Plan is prepared for or the existing product of Fresh Milk for children for 2012 when competition is expected to be much stronger. In this marketing plan I have covered the industry analysis, target market of the product, pricing, product, promotion, and distribution strategies for the product. I have given the details about the strategy implementation and details of promotion budget.
Dutch Lady Vietnam is a joint venture company was established in 1995 in Vietnam between Import and Export Company in Binh Duong province (Protrade) and Royal FrieslandCampina – leading dairy corporations in the Netherlands with 135 years of experience operating on the world.
With a commitment to improve life for the people of Vietnam, in 15 years, Dutch Lady Vietnam has been actively contributing to the sustainable development of Vietnam. Full Name of business: Limited liability company food and beverage Dutch Lady Vietnam English name: Dutch Lady Vietnam In foods and Beverages Name: Dutch Lady Vietnam Scope of work: Food – Beverages.
Website: www. dutchlady. com. vn
1. Market Situation Currently, the average milk consumption is 14kg / person / year. Milk consumption growth associated with GDP growth. When salaries were higher, the demand of milk would more higher to improve nutritional quality. Children were still the subjects consumed the most milk, especially in big cities like Hanoi and Ho Chi Minh. Forecasting demand for Vietnam’s milk market will continue to increase in coming years by the impact of per capita income is projected to increase 125% in the period 2008-2012 (to $ 1854 USD / year) lead to increased demand for milk.
The market share of fresh milk in Vietnam [pic]
SWOT Analysis |Strengths |Weakness | |Famous Brand |Raw material of milk not self-control | |Using advanced technology to make quality products. |Product design has not yet focused on variety of customer is children. | |Having the distribution system throughout the country Vietnam. |Not having the advertising programs of fresh milk products were directed | |Having a team for research and new product development. |toward children. | |Having care and counseling service. |Fresh milk products weren’t met by age development per segment of | |
The Board of Director is qualified and experienced.|children. | |Oppoturnities |Threats | |Increasing income |Increasing price of imported raw materials | |The State has budget for preventing malnutrition in children |Competition with many domestic milk company | |High ratio of young population |Influence of the international economic integration (WTO) | |Vietnam always growth high economic |Appearance of many substitute goods | |The State has developed policies to expand the dairy. |Appearance of new competitor | |With advantage of distribution channels for brand development |Changing psychological.
Product – High quality and convenience product and combined flavor – Packaging design focus on customers are children
Price – Price is less than competitor – We give incentives to distributors
Promotion – To enhance awareness about nutrition from milk. – We will make video advertising milk toward children, advertising on the media, TV, newspapers. – The company’s activities associated with social are as nutrient supply, improve school facilities, create opportunities for education for the poor children of learning.
Control – Control and sales analysis – Exploration of customer – Objective assessment (extent of completion) – Rebuild strategy (if ineffective)
Dairy industry is one of the industries which is supervised close by the law and the Government. With strict legal environment will give the dairy industry opportunities and threats. The Government is implementing a plan to improve the strength development of people through which the milk consumption will be higher.
One of the objectives of the plan is to develop the domestic dairy industry by increasing the number of cows to double the current number.
Per capita income more and more will increase the higher demand for quanlity of life, increased demand for eating delicious food, increased demand for wearing good clothes and demand for better healthcare especially for children. So the fresh milk market will be considered as strong growth in next years. Participants in the dairy industry in Vietnam include farmers, consumers, manufacturers, suppliers, experts, veterinarians.
All them will be related and influence each other. Vietnam is a agriculture country. Dairy cows have been applied to livestock from Vietnam in 1920, but today the dairy industry has not really developed. Government has made preferential policies for the dairy farmers in the first three years as the state will support agricultural land use tax, free the irrigation fee on growing grass area for purposes of breeding dairy cows. 3. Technological environment Milk processing is one of the important stage for diversified to products, increase quality and increase revenue for the dairy industry in Vietnam.
Therefor, the main point of the development planning of processing milk industry is based on the development of technology, advanced equipment, innovation to improve the quality and product diversity, research and production of new products with high quality to satisfy domestic demand and exports. Besides that the research development will also need to ensure strict hygiene, food safety, improve nutritional value of products, saving energy and protect ecological environment.
To invest in scientific research, the state encourages to invest in scientific research, purchase the technology, received the technology transfering from development countries and application of technologies in production.
Besides, enterprises are also encouraged through joint venture to carry out technology transfer to meet the requirements of modern technology, and encourage investors to use domestic equipment manufactured similar quality with imported equipment. To support the dairy industry, there are ancillary industries are as packaging production, processing aids, additives, micronutrient applications in the dairy industry are also encouraged to transfer technology, research to ensure food safety at the highest level.
On the other hand, the research institutes will also strengthen the capacity to be able to focus on research issues of science and technology of milk processing and preservation, food safety and hygiene in milk processing. 4. Social- cultural environment Vietnam is evaluated a potentiality market with nearly 30% population rate in cities and total 86 million population and distribution by age are as follows: • 0-14 age is 29. 4% • 15 -64 age is 65% • Over 65 age is 6. 5% So the structure of Vietnam’s population is considered a young population. Total raw milk production in 2010 was produced 306,662 tons.
Total milk consumption continuous increase in the rate of 15-20% by each year, forecast in 2020 the consumption of milk will increas double, the average milk consumption in Vietnam is currently around 14 kg / person / year. But compared to the world, the Vietnam milk consumption is still too low, probably because we don’t have the habit of drinking milk. Next, to compare with other food and income of of families (especially in rural areas), the price of dairy products in Vietnam is still quite high. As in many other countries with high income levels, the milk becomes an indispensable food in the daily menu. 5. Natural environment.
According to data dated 01/10/2011 of General Department of Statistics, total dairy herds in the country increased in 2009 compared to 11. 31%, from 115,518 cows to 128,583 cows, 13,065 additional cows. Compared with 2009, total production of raw milk production in 2010 increased 10. 23%, an increase of 28,472 tons from 278,190 tons in 2009 to 306,662 in 2010. The amount of raw milk only satisfy about 22% of milk consumption in currently, the rest of row milk have to import. Until September 11/2010, we was imported 646 million milk and milk products, mainly from New Zealand, the United States, the Netherlands and Thailand.
According to statistics from the Association of Vietnam fodder, raw milk demand increases from 500 million liters in 2010 to 805 million liters in 2015. 2. Buyer Analysis Customers of Dutch Lady are divided into two categories: – Customers – Distributors. Customers who are the end of customer, they may cause pressure to product quality. Currently, milk products is very diverse and can be interchangeable, and the price factor is not the most important for consumers when choosing dairy products. Companies compete with each other by the quality and diversity of product, brand… then to price competition.
Customers can compare the same products of different companies from which to make decisions to buy or not buy products and push pressure on prices of products and some of pressures from customers are as follow: – Information that customers has had – The characteristics of the brand – The sensitivity of price – The product differentiation – The availability of substitute goods Distributors influence purchase decisions of consumers. The domestic dairy companies and the exclusive agent of foreign dairy firms have to compete to get the point distribution strategy primarily through discount and commissions to retailers.
The central distribution points such as nutrition, hospitals, pharmacies e. g can gain considerable strength against dairy firm, because they can influence buying decisions of dairy products of customers through counseling, referral products. The current distribution of the dairy industry has been the use of existing enterprises. Therefore, joining rivals to convince this channel shared by accepting many commissions to distributors, so the costs is higher. 3. Competiors Analysis With these attractive oppotunities, the dairy market is becoming more crowded and competition is getting tougher.
Currently the milk market, the largest competitor of Dutch lady is Vinamilk, in addition to many other domestic dairy products such as Hanoimilk, Mocchaumilk … and some imported milk are as Johnson, Abbott, Nestle. 1. Substitute goods Currently, milk products haven’t substitution good. However, consideration of wider so that dairy products can compete with many health care items such as soft drinks. So the dairy industry is endangered from substitute good. 2. Threats from the participation and influence of new firm The end of month 12/2010, milk market was received a new clean fresh milk brand was TH True Milk of True Milk Group.
This is project that breed cow and and produce the clean fresh milk in Nghe An province with total investment up to USD 1. 2 billion, with closed process, comply with international standards of modern Southeast Asia. TH Milk herd has grown with more than 10,000 cows and is going to reach 137,000 cows in 2017. In this year, the company’s processing capacity is going to reach 500 million liters / year, 50% to meet the needs of domestic market. TH True Milk is anticipated that rival the greatest potential to compete in the market of fresh milk.
Characteristics of dairy industry is growing steadily, profits, market share was relatively stable, when the new company joins to industry must have capital and potential is strong enough to overcome the barriers. Industry barriers are not small for the new company special capital and processing technical. In the future, Lady Dutch will be competed more from new firm come from foreign country that with the superior technology, capital and material inputs. Hence the intensity of competition increases from new potential competitors.
Dutch Lady has always been the choice of consumers. It has gained a foothold, its position in the hearts and confidence of consumers. – Advanced technology from the Netherlands (every year, food industry of this country has deducted 2% of sales from food to reinvest in research and development). Milk production technology always has strict regulations on food safety and ensuring that your milk is always fresh and delicious so that will enhance for health of consumers. – Dutch Lady have the wide distribution through more than 150 distributors and 100,000 retail outlets, every year, it provide to consumers over 1.5 billion milk products through from supermarkets to convenience store.
Over 15,000 people are directly and indirectly working for Dutch Lady. With the networks distributing spread across Vietnam that it is easily bring its products to consumers. – Dutch Lady has a team of counselors and nutritionists are always happy to answer customer questions about the nutritional and products of Dutch Lady that is free from Monday to Friday every week. Through that will create the trust and intimate relationships between company and customers. – The company of research and development of new products.
We have marketing team and marketing sale with high experience in analyzing and determining tastes and consumption trends with nearly 2,000 salespeople. – Board of Directors of the company has good management capacity. We have staffs of experienced and high sense of responsibility.
Domestic raw material milk don’t stable, the breeding dairy cow is still sparse because it isn’t concentrated livestock on a large scale. Beside, dairy cow which have difficulty bringing up, the incidence is higher. Therefore it’s difficulty for buying the raw material milk.
Due to the presence of many brands in the Vietnam’s dairy market, customers have more options and difficulties in purchasing decision-making than ever before. There are still a certain number of customers who easily switch brands. In this case, dairy brands enclosed by an attractive incentives/ promotion activities are often preferred or the seller’s recommendation on substitute brands can be prioritized. The decision-making of customers is greatly influenced by distributor’s recommendation. – The tighter control of government on the price of dairy products.
In conclusion, the strengths and weakness and oppoturnities and threats of Fresh Milk Products of Dutch Lady are summarized as below: |Strengths |Weakness | |Famous Brand |Raw material of milk not self-control | |Using advanced technology to make quality products. |Product design has not yet focused on variety of customer is children. | |Having the distribution system throughout the country Vietnam. |Not having the advertising programs of fresh milk products were directed | |Having a team for research and new product development. |toward children. | |Having care and counseling service.
|Fresh milk products weren’t met by age development per segment of | |The Board of Director is qualified and experienced. |children. | |Oppoturnities |Threats | |Increasing income |Increasing price of imported raw materials | |The State has budget for preventing malnutrition in children |Competition with many domestic milk company | |High ratio of young population |Influence of the international economic integration (WTO) | |Vietnam always growth high economic |Appearance of many substitute goods | |The State has developed policies to expand the dairy.
|Appearance of new competitor | |With advantage of distribution channels for brand development |Changing psychological | IV. Objectives 1. Total sales of fresh milk is going to reach 135,000 tons in 2012. Increased 18% over 2011. 2. Total revenue is going to reach 148 million and profit before tax is going to reach USD 15 million in 2012. Strategy 1: Product Stratagy (The strategy focused target is children) – We will produce diversify the fresh milk products for developing of each developement age segment of children by three of age segment are as follow: o Fresh milk products combine many flavors for target customers from age 1-3.
o Fresh milk products combine many flavors for target customers from age 3-6. o Fresh milk products combine many flavors for target customers from age 6-14 – Packaging design focus on customers are children. Strategy 2: Price Statagies (Competitive pricing) – Price is less than competitor by by the program saving cost. – We give incentives to distributors using a discount rate. Strategy 3: Promosion Stratagy (Advertaiment, promosion and public realation)
– To enhance awareness about nutrition from milk.
– We will make video advertising milk toward children, advertising on the media, TV, newspapers.
– The company’s activities associated with social are as nutrient supply, improve school facilities, create opportunities for education for the poor children of learning V. Marketing Strategies 1. Mission Vision of Dutch Lady is “Improving life” Mission: Dutch Lady Vietnam has a mission to develop, manufacture and trading the high quality milk products, provide high nutrition for your health. Vietnamese slogan is “Co gai Ha Lan – s? n sang m? t s? c s? ng” 2. Segmentation We have segmented the market on characteristics of people are as follow: Demographic Age: from 1 to 14 years Social Class: Middle class.
Psychographics Activities: Health related, education, convenience VI. Action Programs 1. Product Stratagy Products that we develop a winning product line of fresh milk for children. We improve the product through: – Flavor – The nutritional value include the following substances: + Choline is a nutrient important for the formation and development of memory and learning ability of children. + More and more scientific studies confirming the role of choline for cognitive development and intelligence of the child and recommended Choline supplementation in the diet.
+ Taurine is an amino acid needed to form the central nervous system, develop and improve retinal function. +Taurine is also important nutrients to help structure and visual function of children develop and mature. + Along with Choline, Taurine helps the transmission of information between brain cells together and with other organs of the body helps the brain perform better role in the command center “smart”.
+Calcium is a nutrient indispensable to leading children can grow in height. Dairy Calcium is characterized most easily absorbed than calcium in other foods. There are many foods provide calcium, but milk is a food and provides the most absorbable calcium than whole.
Dutch Lady Fresh Milk + enhanced levels of calcium to help children develop the maximum height. + Protein is very important nutrients to help children develop and grow. Whey protein has very high nutritional quality. Assessing quality in all kinds of protein foods, high-quality milk protein than beef and fish protein. With a high quality whey protein, milk, Dutch Lady Fresh Milk + helps your body healthy children, develop and grow better. + Vitamin B2Giup children absorb and metabolize nutrients better ensure that infants are full of energy and fun learning. Quality The company has invested in fresh milk production over USD 50 milion.
The modern equipment integrated automation or semi-automatically, to meet the requirements of quality and food safety and international standards. Design Strengthening innovative image, impoving design packaging for brand to each specific product follow three age segments who are children under 14 years old. Brand Name Using the name “Dutch Lady” for all the products to give a unique identity in the market. Service Established service center for healthcare with counselors and nutrition experts of Dutch Lady are always happy to answer all customer questions about nutritional needs and milk products of Dutch Lady.
2. Price Statagies Company launched to the reducing energy program with the motto of constantly improving the sense of energy saving, environmental protection for all staff, actively propagate and implement specific programs reduce energ. This has reduced production costs and products price. Dutch Lady has more than 30% market share of fresh milk in Vietnam, a year in sales of Dutch Lady doubled. Along with a large market share and provide products to market quickly so we can increase sales by offering lower prices to attract customers.
Currently, the price of domestic milk prices dependent on foreign sources of raw materials, more than 70% of raw materials imported from abroad, the country imported mainly from New Zealand, Netherlands, Australia … With hundreds of years of experience in the dairy industry from the Netherlands, since 1996, FrieslandCampina Vietnam has implemented programs to develop the dairy industry. From early in 2010, FrieslandCampina Vietnam has been implementing risk management systems for quality in order to complete the entire system to ensure the quality of the company from beginning to end stages.
That’s a competitive advantage that we have the direct fresh milk with high quality without intermediate additional cost. Prices list |Product Name |Unit |Price (VND) | |Fresh milk (Sugar, non sugar, strawberry, |180 ml |4900 | |chocolate) | | | | |110 ml |3300 | | |1 L |21800 | We have over 150 distributors across the country and we offer reasonable incentives fordistributors through clear policy support and practical. The company has providedadvanced management software helps efficiently manage distribution of goods and the operation of retail stores.
Policy will apply the discount increases with sales to distributors. 3. Promosion Stratagy Our advertising and promotion strategies is based on three phases We will use doctors in our advertising, these doctors will focus on needing of the nutritional of milk and milk has always played an important part in our diet so after that will introduce and recommend using Fresh Milk of Dutch Lady. We will make video advertising milk toward children, advertising on the media, TV, newspapers. Packaging for children focusing on flavors as well as creating associations with character by each age segmentation.
The company’s activities associated with social are as nutrient supply, improve school facilities, create opportunities for education for the poor children of learning. Some programs are as “Special Study firefly light” has awarded more than 20 thousand scholarships, construction 7 school, creating conditions for poor children in remote areas difficult to continue to the school. Giving gift promotional products are as clothing, backpack with dairy when hold promotion organizations such as the children days. Packaging for children from age 1-3 [pic] Packaging for children from age 3-6.
[pic] Packaging for children from age 6-14 [pic] |No |Content |Cost (USD) | |1 |1 – Communication |3,890,232 | | |TV chanel |3,348,837 | | |Radio |100,465 | | |Print adverstising |167,442 | | |Poster |33,488 | | |Internet |240,000 | |2 |2 – Promotion |4,107,875 | | |Customer Even |130,000 | | |Gifts |440,000 | | |Loyaty |550,000 | | |Coupons |506,000 | | |Happy New Year |309,375 | | |Children Day |220,000 | | |Vietnam Family Day |412,500 | | |Back to school |605,000 | | |Vietnam Woman Day |330,000 | | |Vietnam Teacher Day |275,000 | | |Christmas Season |330,000 .
VII. Projected Profit & Loss Statement ( 2012 –2015) | |2012 |2013 |2014 |2015 | Total | | Total market size | MT | 593,000 | 652,300 | 717,530 | 789,283 | 2,752,113 | |(dairy) | | | | | | | | Market size of fresh | MT | 355,800 | 404,426 | 466,395 | 528,820 | 1,755,440 | |milk | | | | | | | | Market share | % |38% |40% |42% |45% | | | Gross profit | | 44,617,320 | 50,842,126 | 58,632,451 | 67,836,918 |221,928,815 | |A&P | |10. 80% |11. 12% |11. 46% |12. 03% | | |Distribution | |4. 00% |4. 12% |4. 24% |4. 46% | | |Logistic | |0. 50% |0. 52% |0.
53% |0. 56% | | |Maintenance | |0. 20% |0. 21% |0. 21% |0. 22% | | P/L | | 15,616,062 | 16,803,323 | 18,200,392 | 18,718,631 | 69,338,408 | | [pic] VIII. Control 1. Control and sales analysis Analysis of sales includes the assessment of actual sales compared with sales goals. Sales analysis will tell us that our strategy in the right or not? If sales drop down, we will assess how much volume reducetion? What area reduction? after that we try to correct and improve strategy. 2. Exploration of customer Organization of customer surveys with samples selected.
Requesting to customers evaluate the friendly spirit of the company’s employees, service quality, satisfaction for product, satisfaction with the brand image. Noting complaints from customers arising from the more comprehensive grasp of customer reactions to products and this is the basis to modify, improve and boost the production of existing products. 3. Objective assessment (extent of completion) 4. Rebuild strategy (if ineffective).
Incresing the awareness, educatin the consumers providing information about important of nutrition having from fresh milk. Drirect Marketing combined promotion Increase Usage, We will also target kids. Focusing on different flavors, chocolate, strawberry for each age segment. We will launch a campaign in junior schools and provide different gift packs. Public relations We will hold celebrate different occasions like Children days.
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