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Vinamilk is a leading dairy brand in Vietnam, having become familiar to most people. Its products are present in all supermarkets, convenience stores, and both urban and rural areas, firmly establishing itself in consumers’ minds. This success is a significant achievement in Vinamilk’s marketing strategy. Let’s analyze what this top dairy brand’s team has done in the following article.
Introduction to Vinamilk Dairy Brand
Vinamilk, or Vietnam Dairy Products Joint Stock Company, was established on August 20, 1976, specializing in the production and distribution of dairy products. With nearly 50 years in operation, the company has achieved many remarkable successes. Vinamilk holds a 75% market share in the dairy processing industry and its products are available in over 250,000 retail points nationwide.
On August 15, 2023, Vinamilk was honored as the 2nd most valuable brand in Vietnam’s “Top 100 Brands,” just behind Viettel. Additionally, the brand is renowned for its unique, humane marketing campaigns that contribute significantly to society. Notable activities include the “3 Million Glasses of Milk Program for Poor Children” and the “Vinamilk Young Talent Incubator Scholarship Fund.” In 2023, Vinamilk also stirred up media attention with its impressive logo change trend.
Marketing Models Applied by Vinamilk
These are tools that marketers use to research and identify influential factors, allowing them to propose appropriate marketing strategies. Below are two models Vinamilk has used to analyze the market.
STP Model
In marketing, the STP model is a method that helps businesses leverage a targeted customer group to develop cost-effective marketing campaigns. This model comprises three main parts:
Market Segmentation
Dividing the general market into smaller segments based on common characteristics such as age, gender, hobbies, or consumer behavior.
Vinamilk targets various customer groups in its strategies, including children, teenagers, adults, middle-aged women, and seniors. Marketers have identified key characteristics of each target group:
- Children (5 – 14 years old): Energetic, creative, enjoy socializing with friends, and have a daily milk-drinking habit.
- Teenagers (15 – 25 years old): Unstable income, enthusiastic, adventurous, and experimental.
- Adults (26 – 44 years old): Financially stable individuals leading busy lives.
- Middle-aged Women (40 – 60 years old): Usually married, composed, enjoy life, and prioritize health.
- Elderly (65 – 70 years old): Moderately active, conscious of physical and mental well-being, often with retirement income.
Target Market
Although Vinamilk products cater to all age groups in the market, the company primarily focuses on children aged 5 to 14. This age range represents a period of physical development, high metabolism, and a demand for physical and intellectual enhancement. Moreover, children account for a large proportion, approximately 23.2%, of Vinamilk’s sales revenue.
Additionally, the rise of the middle-income class in recent years has altered consumer behavior. People are more concerned about product value rather than price. Therefore, Vinamilk consistently emphasizes quality and proudly promotes its Vinamilk products made with 100% organic ingredients.
Positioning
This process involves positioning a business’s product or service in the minds of the target customers, creating a unique position that attracts customers more than competitors.
Vinamilk focuses on producing milk products to meet the needs of its target customer groups. With over 80% of total product consumption in Hanoi and Ho Chi Minh City, the brand has accurately positioned its products.
SWOT Model
The SWOT model is a common marketing analysis method that delivers high effectiveness. Therefore, businesses often use this model to assess their strengths and weaknesses, identify opportunities, and navigate potential threats for development.
Strengths
Brand: Vinamilk remains the king of Vietnam’s dairy industry with a 44% market share (in 2023). Moreover, consumers highly rate the brand, consistently voting it as one of Vietnam’s top 10 high-quality products from 1995 to 2009.
Product Quality: Products like “Condensed Milk,” “Sterilized Milk,” “Dielac,” and “Yogurt Vinamilk” are produced from over 5,000 cows on international standard dairy farms. This ensures high-quality milk that meets diverse consumer needs in Vietnam.
Distribution Network: Vinamilk has over 249,000 retail points nationwide, covering 64 provinces and cities. Furthermore, the company exports its products to the United States, Japan, South Korea, China, and other countries.
Equipment: Vinamilk employs modern technologies from Germany, Italy, and Switzerland in its production lines to guarantee product quality.
Marketing Campaigns: Initiatives like the “Vietnam Rising Fund” and “One Million Trees for Vietnam Fund” are professional advertising programs with a strong humanitarian focus.
Weaknesses
Despite being the king of Vietnam’s dairy industry, Vinamilk still faces some weaknesses. The company has not achieved complete autonomy over its milk sources, heavily relying on imports.
With rising demand for fresh milk, domestic sources only meet about 30% of the market’s needs. Consequently, Vinamilk must import 70% of its raw materials from New Zealand, the United States, European Union countries, and Japan. This increases material costs and product prices.
Opportunities
The government has implemented several tax incentive policies to encourage business development, enabling domestic brands to compete with imports. Consequently, import taxes on raw materials in Vietnam have decreased more than those promised by the WTO.
Threats
Vinamilk faces intense competition from both domestic and international rivals. The brand is no longer the sole choice for consumers when compared to major brands like Nestle, Dutch Lady, and Abbott.
Moreover, consumers are increasingly demanding more from powdered milk products, and competition is coming from imported milk products from the UK, US, Netherlands, etc. This has caused Vinamilk to lose its monopoly position in the market.
Furthermore, the Vietnamese government has issued policies encouraging foreign companies to enter the Vietnamese market. As a result, import taxes on fresh milk have decreased from 20% to 18%, and those on condensed milk have decreased from 30% to 25%. This increases competition among milk brands in the market.
Analysis of Vinamilk’s 4P Strategy
Through the STP and SWOT models, marketers can effectively develop Vinamilk’s marketing strategy. Below are analyses of the 4P strategy of the brand:
Product Strategy
Currently, Vinamilk leads the dairy market with a diverse product portfolio, including bottled milk, powdered milk, yogurt, and condensed milk. The brand has implemented several product strategies, such as:
- Collaboration with Tetra Pak, a leading company in processing and packaging liquid food, to innovate product packaging design.
- Continuously updating and improving technologies, preservation methods, distribution, and food storage to increase product shelf life.
- Promoting environmentally friendly products by using Tetra Pak’s paper-based packaging for milk products.
- Investing in dairy farming processes, including grass cultivation, barn construction, feed supply, veterinary medicine, and farm facility construction, to produce the highest quality milk.
Price Strategy
Vinamilk consistently conducts product price surveys among competitors in the same industry and maintains lower selling prices. Therefore, with internationally standardized products at reasonable prices, the brand has dominated the Vietnamese milk market.
Moreover, Vinamilk actively invests in standard dairy farms to reduce dependence on imported materials, enabling the company to adapt continuously to meet consumer needs and expectations.
Distribution Strategy
Vinamilk’s distribution network is extensive nationwide, with over 250,000 retail points, including direct distribution channels to customers. Additionally, the company’s products are available in more than 3,800 large and small supermarkets and 1,300 convenience stores nationwide.
Currently, Vinamilk manages four main distribution systems:
- Distribution to large supermarkets such as Big C, Metro, and smaller supermarkets like Fivimart, Citimart, and Vinmart.
- Distribution to organizations, institutions, schools, hotels, and restaurants.
- Distributor network.
- Export markets.
Promotion Strategy
Vinamilk accompanies consumers during the Covid-19 pandemic with a multi-channel marketing communication strategy. The company focuses on conveying the message of ‘100% pure fresh milk’ when quality is a top concern. The brand also emphasizes product origins in marketing campaigns on TV, video, radio, and social media platforms.
With cheerful cow imagery, singing, and dancing in previous advertisements, Vinamilk has increased consumer awareness of the brand. Additionally, the brand sponsors competitions and scholarship programs, creating an attractive and positive image among consumers.
Marketing Strategies of Vinamilk
With the above information, you can envision Vinamilk’s marketing activities. To understand more, let’s explore some marketing strategies of the brand, including:
Advertising on Facebook fan page
Vinamilk quickly invested in building a Facebook fan page amidst social shifts. The company has attracted over 697,000 likes and 723,000 followers on the official fan page, making customer outreach easier.
Billboard advertising
In addition to online media, Vinamilk also uses outdoor billboards to reach users at major intersections, where there is a high volume of traffic. Vinamilk’s unique billboard ads attract significant viewer interest.
TVC communication
As a leading corporation in Vietnam, Vinamilk leverages TV channels to market its products. Vinamilk’s TV commercials are vibrant, emotionally rich, and creatively meaningful. One of Vinamilk’s famous TV campaigns is the ‘6 Million Glasses of Milk Fund.
Sponsorship of competitions and scholarships
Vinamilk’s scholarship programs and competitions receive great support from the media, community, schools, and government. This not only increases brand recognition but also spreads good humanitarian values, enhancing consumer trust in Vinamilk.
Logo Change Campaign
One of Vinamilk’s marketing strategies that garnered special attention was the recent logo trend change. On July 6, 2023, the company unexpectedly changed its brand identity after nearly 50 years of operation. Vinamilk’s logo transitioned from an emblem to a wordmark design with the addition of ‘est 1976’ – the year of the company’s establishment.
Furthermore, Vinamilk encouraged young people to create logos in the new style by visiting est1976.vinamilk.com.vn. This activity became a trend at that time and quickly attracted young participants.
This change not only successfully repositioned the brand but also garnered attention from many potential customers, enhancing the brand’s position in customer perception.
Conclusion
The above is an analysis of Vinamilk’s marketing strategy and the reasons behind its success. I hope this article provides you with useful information and insights for future business development. Stay tuned for more successful Business Case Study!
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