HANOI UNIVERSITY

FACULTY OF MANAGEMENT AND TOURISM

REPORT OUTLINE
PRINCIPLES OF MARKETING

Semester 2021

• Summary Executive

This report will mainly focus on the business performance of consended-milk from Dutch Lady
by collecting the statistic in the past five years from 2016 about the company current market
situation. Afterwards, we will analysize those figures through internal and external environment
which have impacts on the cooperation. Then, this report will expose a list of marketing
objectives for Dutch Lady consended-milk market and finally propose some marketing plans for
Dutch Lady to promote their ranking in consended- milk market for a specific period of time.
 • Company Introduction
Dutch Lady Vietnam has grown into a successful and well-known foreign enterprise in Vietnam.
Dutch Lady under the brand FrieslandCampina - one of the largest corporations in milk
productions. Dutch Lady Vietnam has achieved ISO 9001 and was certified by the Queen of the
Netherlands in 2005. Dutch Lady's market share has continuously increased year by year. The
company products include many types of dairy products for instance liquid milk, powdered milk,
condensed milk, yogurt, etc. During the past time, Dutch Lady Vietnam has always conducted
research and invested in technology in order to provide consumers with the highest quality
nutritional products to compete in the market with the big players like Vinamilk, Nutifoods,
Nestle Vietnam. This report will mainly focus on the business performance of consended-milk
from Dutch Lady and propose some marketing plans for Dutch Lady to promote their ranking in
consended milk market for a specific period of time.

• Current Marketing Situation

• Internal Environment
• Current business performance:

In terms of financial results, FrieslandCampina Vietnam's income and profit are declining. This
company's net sales in 2016 and 2017 was VND 7,152 billion and VND 7,290 billion,
respectively, with a net profit of VND 1,147 billion and 809 billion. The net profit in 2019 will
be 758 billion dong, up from 792 billion dong in 2018. FrieslandCampina Vietnam's total assets
reached 2,611 billion VND as of December 31, 2019, a 6% increase from the beginning of the
year; equity decreased marginally from VND 1,087 billion to VND 1,055 billion.

Structure (%) of companies about kind of milk (2018)

As it showed in the chart, 6 percent is the amout consended milk from Dutch Lady in
comparision with other kinds of company. Consended milk is considered to be the most
advantage of Dutch compared with their biggest competitor: Vinamilk which consended milk
occupied only 2 or 3 percent in the dairy market.
 • 4Ps Review:

Product: 
• Standard Dutch milk quality (145 years of experience in the dairy industry)
• High-quality agricultural techniques & healthy cows
• Standard packaging for food use
• Product meets with food safety requirements
• With the cream-keeping technology, the product has a completely natural flavor.

Price:
• Commitment to stable prices
• There are price incentives when making purchases on distribution sites (Lazada, Shopee)

Place:
• The distribution channels of the product are present in all 63 provinces and towns
Promotion:
• Coverage is high on TV, advertisements appear in golden hour
• There are many catchy promotional videos for cooking lessons with the product
• Micro Environment
• Key Target: 

• “This popular milk product can be used for cooking, baking and for whitening tea or
coffee. Dutch Lady is available in a convenient tin packaging and has a shelf-life of 18
months when stored correctly”
• “Building strong families”

• Customer analysis
• Segmenting

Over all of its products, Dutch Lady decides to segment the market by ages:

• Children from 1 to 6 years old:

• Teenagers from 7 to 15 years old:
• Youth from 16 to 25 years old:
• Adults from 25 to 35 years old:
• The middle age and old people from 35 years old and over

• Targeting

Since Dutch Lady condensed milk is a multi-purpose product, it’s targeted customer expands
from age 16 to 35 and over.

The versatility of Dutch girl condensed milk is shown through advertisements that guide the
preparation of dishes from sweet dishes such as bread, chocolate, fruit, etc., to savory dishes like
grilled ribs, curry, burger, etc.

Advertisements for the use of condensed milk are all aimed at parenting, or adults in general,
meals for children under the age of 15. So even though the age of 15 is not really the target
customer of this segment, this is still a factor affecting buying behavior.
• Positioning

Dutch Lady's products always aim at the common mission of providing high quality, nutritious
dairy products and building a healthy life full of vitality.

In the condensed milk segment, the company has focused more on creating a price advantage.
Dutch Lady is currently one of the lowest priced condensed milk products in comparison to Ngoi
Sao Phuong Nam or Ong Tho Trang of Vinamilk

Demonstrating strengths through use and convenience, directing users to the habit of buying a
product for multiple purposes. 

• Suppliers
Every year, FrieslandCampina Vietnam purchases over 75,000 tons of Fresh milk from more
than 3,000 dairy households, accounting for a quarter of fresh milk made in Vietnam.

Dutch Lady's distribution channels are present in 63 provinces and cities, even in rural areas, the
company's presence is strongly covered.

Dutch Lady always gives reasonable incentives to distributors through practical third-party
support policies.

• Competitors
There are many Dutch Lady's competitors such as: Vinamilk, TH True Milk, Nestle, Moc Chau,
Ba Vi…. These brands all have product lines that compete directly with Dutch dairy firms.
However, with the launch of a lot of products from drinking milk, to powdered milk and yogurt,
the company wanted to target the direct competitor Vinamilk, Vinamilk had, immediately Dutch
Lady had that item. The aim is to compete directly with dairy brands that have more than half a
century's experience in the Vietnamese market.
 • Macro Environment
• Demographic:

According to the statistic from Knoema, the birth rate of Vietnam in recent years witnessed a
downward slopping up to 2.3% (2020) in comparision with the fertility rate in the base year
2009. With their slogan “For a remarkable rise in Vietnam” Dutch Lady implemented many of
the community programs aimed at instilling meaningful and realistic values in Vietnam's youth.
In order to contribute to the comprehensive development of Vietnamese children, Dutch Lady
has launched many programs such as “the journey of 2 million glasses of milk” for children in
the countryside. To increase nutritional knowledge for parents in rural areas, Dutch Lady has
provided nutrition knowledge for children to more than 591 local women's associations, with
nearly 200,000 mothers participating (reported by VOV in 2016), besides they also held a
program "Ve an com" on Radio with the aim of creating an interactive forum between parents
and experts in psychology and nutrition. Therefore, we can see that the Dutch Lady is always
targeting the main customers who are children and the youth. However, basing on the fertility
rate in recent years, we can see that these gradual declines will negatively affect to Dutch Lady.
• Natural environment:

Because of the Corona virus in 2020, people have to quarantine at home for a long period of
time. Not going out to work or hanging out with friends, Vietnamese people tend to make more
hand made things especially cake, candy or healthy foods. Take advantage of quarantine time,
Dutchlady push their brand name on the social media and make them easy to be found on online
market.
• Culture force:

From 2007 onwards, as reported by Misa, consended milk is no longer a determinant

commodity due to the introduction of a variety of fresh milk replaced the usage of consended
milk. In today’s society, people pay more attention to their health by reducing the amount of
sugar in dairy products. In addtion, the majority market share of consended- milk are in rural
market currently.

On the other hand, coffee drinking culture, especially milk coffee is one of the essential routine
of Vietnamese people. That is the reason why consended milk market still have a foothold in
Vietnamese consumers good market. As can be seen from the pie chart of Consended- milk
Market (2017), Dutch Lady which belongs to Friesland Campina made up for 20%.
• Technology:

Buying things online instead of going out have become more and more popular in recent years
as a result of the development of technology and internet. Although, Dutch Lady has in online
market before but they still catched up the trend “online shopping” by pushing their brand name
on social media like Facebook or Youtube. Nowadays, there are a lot of consended milk
advertisements, however, Dutch Lady knows how to distinguish their own brand name with
sologan (base on each market segmentation)

Moreover, Dutch Lady are available on online shopping market such as: Shoppee
(dutchlady_official_store) and Lazada.

• SWOT Analysis

• Strengths 
Dutch Lady is one of the most favorite brand in Vietnam.

• Develop a product line of sweetened condensed milk in the direction of supplementation

in order to diversify types and flavors to make further profit, to meet the increasing
demand of customers, to take advantage of production capacity, trying to rollout and
prevent competitors.
• Improving package design constantly and enhancing the product’s quality.   For instance,
awaring the needs of customers who want to add milk into cooking to make it tasty, the
company produced Dutch Lady sweetened condensed milk.
• Distribution system consists of two channels including traditional market and
supermarket.

+ Traditional market: through more than 150 distributors and 100,000 retailers.

+ Supermarkets across the country.

• Weaknesses
Commitment to stable prices: Even when facing unfavorable fluctuations in exchange rates, raw
materials, etc ... In recent years, consumer, food and dairy manufacturers simultaneously increase
prices. However, Dutch Lady remained consistent with its commitment.

Not a proactive source of raw materials: Currently, the main source of raw materials is from the
breeding dairy cow which is still sparse because it isn't concentrated livestock on a large scale.
Therefore, it’s difficult to buy raw material milk and the quality of raw materials is still difficult
to control. 

The market segment is rare because sweetened condensed milk products are only for children
aged 15 and over.

• Opportunities
As living standards are getting higher, people tend to care about their health more than ever
before and happen to pay a higher cost for life.

The development of the internet, television and poster will create favourable conditions for
promoting brand development. Such as establishing “Association for Learning Promotion” or
“Dairy industry development program” for farmers. Vietnam is evaluated for economic growth in
Southeast Asia.

-Vietnam has a tropical climate where suitable crops for dairy products are grass, corn bran, rice,
etc., to raise dairy herds and develop raw material areas. The State has a policy to expand the
domestic dairy herd, to provide funding and technical support so that the domestic source of milk
material does not depend much on imports.

• Threats
Vietnam is implementing tax cuts as committed when joining WTO, condensed milk from 30%
to 25%. This is a great advantage for foreign businesses to easily enter the Vietnamese market.

Market participation of many major competitors: The dairy market is more and more exciting
with the presence of many companies, especially big brands in the world such as Vinamilk,
FrieslandCampina, Dairy Champ… this is a big challenge for DUTCH LADY.

Currently on the market more products directly competing with condensed milk are cream,
butter, jelly, ... Therefore, the appearance and the strong competition of the new firm in the milk
market is inevitable.