1.

Strengths
Long history and strong foundation is the first and foremost strength to make Vinamilk
become a leader in dairymarket of Viet Nam. Thanks to the completely qualified
products, competitive with the market existing goods, throughout about 34 years
operating history, Vinamilk has undoubtedly become a familiar and trusted trademark in
the mind of domestic clients. Moreover, it has gained a great customer satisfaction and
understanding as well as the knowledge of the local market.
Another remarkable factor that has actually strengthened the Vinamilks leading position
is that it established wide and deep distribution system located nationwide and being
expanded over time. The distribution network is not only the essence for long-term period
strategy but also the decisive factor for the success of a consumer goods producer. It
allows Vinamilk to bring its core products to consumers in a fast and effective way. To be
more specific, today the company has more than 1500 distributors, over 90000 retail
outlets in the entire country.
Along with the solid distribution, in order to do well Vinamilk always pay attention to
investing in modern equipment and factories. At the present, a range of modern factories
located along Viet Nam that helps to reduce transportation expenses and a system of
advanced equipment that helps to ensure the output products meeting the international
standards.
One more aspects should be highlighted in the strength of Vinamilk is that its loyal and
cooperative relationships with both local and oversee suppliers allow the company to
have a stable material sources at the reasonable price. Today, around 60% of all cow milk
produced in Viet Nam is consumed by Vinamilk.
Last but not least, a professtional experienced management team in dairy business and
production, a transparent internal management system and tight and detailed management
procedures are other keys to success making Vinamilk a top business of the Viet Nam
milk industry branch.
2. Weaknesses
The low-income majority rural population is the first weakness having influence on the
operation of Vinamilk. In case the economy slowing growth in the coming period, as
lower income people will restrict the consumption of output in the country, reduce profits
and sales revenue of the company.
In addition, reducing the duties for dairy products will be favorable conditions for
imported dairy products. With 50% of raw material to the companys import and 30% of
the companys revenues are from exports, the fluctuations in exchange rates affect the
operation of the Company.
Finally, Viet Nams WTO accession will create conditions for foreign company to take
part in the domestic market. It will increase competition among companies in the industry
as a result.

II Price
Along with price, place, promotion, pricing is one of the four elements of the marketing
mix also. Pricing strategy is important for companies who wish to achieve success by
finding the price point where they can maximize sales and profits. It is considered to be a
competitive factor in attracting customers of all businesses. Therefore, putting reasonable
policies keep particularly important role in helping Vinamilk having effective business
strategies.
1. Factors
1.1. Production expenses
Expenses for technology and production line
Vinamilk is currently using facilities and equipment with modern and advanced
technology provided by the leading suppliers to keep Vinamilks products at best
quality, sustainable and competitive with other competitors. Nowadays, Vinamilk is
one of a fewer producers owning Lactenso Asetic Technology, combi 124-36, A3
speed . Most of such technologies are imported from well- known dairy equipment
vendors in the world.
In addition, Vinamilk also considerably invest in information technology.
Expenses for inputs
Cost of materials (mainly liquid milk and powered milk) used for production account
for significant proportion in the total cost of sales of Vinamilk (approximately 89%
production expense). In the present, around 60-70% Vinamilks inputs are imported
(powered milk), the rest purchased in domestic market is liquid milk.
Now, the rate of consuming amount of milk in domestic market is about 44.5%
(equivalent to 30-40% inputs used for production). Thanks to the benefit of extensive
distribution network and procurement policy, Vinamilk has the advantage of
regulating certain price as making purchasing fresh milk.
Cost of sales
Cost of sales are the second highest rate in milk price which make up from 5%-7% of
cost. Meanwhile, fees for advertising, promotion account for from 1%-19.2%.
Vinamilk having advertising costs higher than the limits(10%) is capable of driving
up the prices.
1.2. Reputation and product quality
Product line owning high quality and creating the trust in mind of domestic
consumers allows Vinamilk to put a higher price without response.
1.3. Demand and psychology in using dairy products
Health care issue has increasingly become topic of people today concern so dairy
products are favorite choice of almost households (especially powered milk, liquid

milk and yogurt). In common perception of buyers, the exceptional qualified goods
often go along with expensive price and exceptional reputation thus they intend to
buy the products with high price. This trend at the same time contributes to increase
the milk price.
1.4. Competitive price
In common opinion of consumers, as shopping they often compare the price of the
company having the same product to make the best decision. Therfore, Vinamilk
conducts to study about expense, cost, price and quality of competitors products.
2. Business goals and pricing strategies
Companies may use a variety of pricing strategies, depending on their own unique
marketing goals and objectives and Vinamilk is not exception. For each target in different
circumstances and period, Vinamilk will apply different pricing policies.
Over the years, the company has built a reputable brand name for its major products. Its
highly- popular brand, Vinamilk, is viewed by many domestic consumers as the most
trusted trademark for nutritional dairy products thanks to its international quality, security
of food safety and hygiene and diversity of products and services with long-term
competitive strategies. To express their outstanding products, Vinamilk apply the
premium pricing strategy which is the practice of keeping the price higher than the
competitors so as to encourage favorable perceptions among buyers. This method is
intended to exploit the tendency for buyers to assume that expensive items enjoy an
exceptional reputation, are more reliable or desirable or present exceptional quality.
When it comes to another goal, in order to attract customers and capture market share,
penetration pricing strategy is designed by entering with lower price as compared with
the competitors. Thanks to this idea, the business will be able to raise awareness and get
people to try the product, generate word-of-mouth and make a crowded market category
as a result.
In terms of maintaining profit in difficult times while prices of many raw materials
strongly increased, Vinamilk has been following a policy of controlling and tightening
costs and expenses. To be more specific, all monthly cost items were well planned in
detail at the end of the pervious year. At the end of each month, actual cost was compared
with the approved cost to understand causes of divergence and to fix the problem
immediately.
In conclusion, Vinamilks pricing is quite reasonable. Outstanding competitive advantage
as compared with the same products is absolute advantage in meeting most of the needs
of consumers everywhere, the entire world and all walks.