FOREIGN TRADE UNIVERSITY

FACULTY OF BUSINESS ADMINISTRATION

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INTERNATONAL MARKETING REPORT

“INTERNATIONAL MARKET SELECTION FOR

IDP’S KUN COCOA MALT MILK”
Group : 01

Class : International Marketing - MKTE401.2

Lecturer : Dr. Tran Thu Trang (PhD)

MEMBERS:
Đào Minh Hải 1912250505
Đào Mạnh Tuấn Anh 1912200002
Phạm Thanh Hằng 1912250506
Lê Thị Phương Mai 1912250626
Bùi Nguyễn Huy Quân 1912250511
Nguyễn Trà My 1912250509
Thái Trường Sơn 1912250027

Hà Nội, May 2021

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I. INTRODUCTION
1. Object:
International marketing analysis is critical in the decision-making process. The
company we have chosen is International Dairy Products (IDP) Joint Stock Company, which
has a dairy brand named "Love’in Farm"(LiF) and the product "KUN milk" and is currently
focusing on export and international market development. The primary goal of this assignment
is to identify potential foreign markets for "KUN Cocoa Malt Milk"; then, using a qualitative
approach, estimate these potential environments and determine where to invest and conduct
international marketing activities.
First and foremost, our group will examine certain selection criteria in order to narrow
them down to ... countries for further investigation. The primary focus of this study is market
assessment and selection. After selecting the short-listed candidates, we use the figures of
Economic stability, Aggregate demand for milk, Milk import prospect, Political stability,
Competitive environment, and Consumer trend/Technical barriers to investigating the potential
production of TH true Milk in those countries. We will recommend the most promising market
for LiF's "KUN Cocoa Malt Milk" based on the assessment of each criterion.
2. Scope:
The following aspects are included in the scope of this international marketing research:
 Foreign country environments: With the added environmental complexity of global
marketing, companies need timely feedback on various international environments.
 Market assessment: One of the most common challenges that researchers face is
determining the size of a market, consumer trends, and the needs of potential customers.

II. OVERVIEW
1. About IDP:

International Dairy Products (IDP) Joint Stock Company is established in 2004, with
head office located at Chuong My District, Ha Noi City, Vietnam. With the ambition of
becoming the leader in dairy, the company offers nutritious products in Vietnam. In addition,

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the company also actively markets its products and frequently launches new product
developments while cooperating with leading nutrition partners. Over 17 years of operation,
IDP has a purposeful mission to provide products of international quality and suitable for
Vietnamese. They also aim to Apply advanced technology in collaboration with natural
nutritional solutions to satisfy the nutritional needs of customers.
2. About LiF’s “KUN Cocoa Malt Milk”:
In 2013, IDP officially launched Love'in Farm milk product lines, opening the
development process of future products as well. Manufactured by applying advanced
technologies into the production process, the products always maintain the freshest standards
and follow international standards of quality. LiF products are extremely diverse which
includes: UHT Drinking Yogurt, UHT Milk with Less Sugar,... with various flavors, drawing
attention from all ages, especially younger generations.
Among these products, “KUN Cocoa Malt Milk” was introduced and brought into the
market in 2015. Over the years, it has become an outstanding and top-selling product in the
dairy industry and possessed a great potential to be exported to foreign markets.

3. Export Potentiality of IDP:

III. SCREENING FOR POTENTIAL MARKETS:

1. Selection criterion: World’s major milk importer
World’s major milk importers Milk was the 338th most traded commodity in the world
in 2018, with a total exchange of $9.41B. Trade of milk reflects 0,051% of overall world trade.
The top 5 countries that imported the highest dollar value worth of milk during 2019, including
both sweetened and unsweetened varieties were China, Germany, Hong Kong, Belgium-
Luxembourg. and the Netherlands

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 2. Selection criterion: Countries that have FTA with Vietnam:

Countries that have FTA with Vietnam Out of 4 countries, there are 3 countries
Germany, Belgium and Netherlands belong to the EU. And recently, Vietnam and the EU
signed EVFTA, which brings great opportunities to the Vietnamese economy. According to
the agreement. Once in force, the agreements will provide opportunities to increase trade and
support jobs and growth on both sides, through

 Eliminating 99% of all tariffs

 Reducing regulatory barriers and overlapping red tape
 Ensuring protection of geographical indications
 Opening up services and public procurement markets
 Making sure the agreed rules are enforceable

On November 15, 2020, 15 countries, including all ASEAN members, Australia, China,
Japan, South Korea, and New Zealand signed the Regional Comprehensive Economic
Partnership (RCEP). The free trade agreement is seen as the world’s largest trading bloc. The
RCEP will reduce tariffs and set trade rules, and help link supply chains, particularly as
governments grapple with COVID-19 effects. The FTA is expected to cover all aspects of
business including trade, services, e-commerce, telecommunications, and copyright through
negotiations over some aspects that still need to be finalized. Tariffs are expected to be reduced
within 20 years
3. Selection criterion: Milk import value:
Milk import value of each country. Among those countries, China, Germany,
Netherland are the most potential markets with the highest value of milk imported.

Germany China Hong Kong Netherland Belgium

1.842.749.508 4.631.360.675 935.749.923 1.252.389.950 1.106.414.222

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IV. MARKET ASSESSMENT & SELECTION:
1. Stability Index:
Evaluating stability is a fundamental step in the process of determining whether to enter
a market. To measure this index, it is crucial to gather and score 2 key factors, including
political and economic factors.

2. Political Stability:
Along with other macro-indicators of business environments, Political stability has a
wider impact on the economy, thus creating implications for investment flow, consumer
confidence. Therefore, prior to any other criteria, Love in Farm has to compare this index to
figure out the most appropriate and compromising market to enter.

Below is a ranking chart (2019) for 3 countries selected where data are available

China Germany Netherland

Political Stability -0.24 0.58 0.86

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 Country China Germany Netherland
Score 1 2 3
(This criterion accounted for 15% of the final score)

2.1. Economic Stability:

The indicators of unemployment and economic growth constitute the basic
conditions of economic stability that decide which market a company should enter. As
economic stability measures the ability to access resources essential to life (i.e.:
financial resources, jobs that provide a stable, living wage, etc), understanding this
index will help the company to see the potential of a new market that they are about to
penetrate in a bigger dimension of macro-outlook

China Germany Netherland

GDP, current US Billion dollar 14342.9 (3) 3861.12 (2) 907.05 (1)
Average GDP growth rate(2015-2019) 6.74% (3) 1.63% (1) 2.22% (2)
5,585.89 2,022.75 397.12
Household consumption, billion USD (38.9% GDP) (52.3% GDP) (43.78%GDP)
(1) (3) (2)
4.6% 3.14% 3.38%
Unemployment rate (2019)
(1) (3) (2)
Economic Stability 8 9 7

SCORE:

Country China Germany Netherland

Score 2 3 1
(This criterion accounted for 20% of the final score)

2.2. Aggregate demand for milk:

Understanding domestic demand for a particular product is one of the first and
foremost factors to be considered when determining the right market to enter. Domestic
demand reflects consumers’ desire to purchase goods and services and their willingness
to pay a price for such products in a specific country.

By examining the consumption level of each country, businesses can gain

insights into the market attractiveness. In addition to that, the company also needs to

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 consider the market growth rate, which will provide a picture of changes in consumers’
demand and taste. With thorough research on such matters, the company can anticipate
not only the entry of its product but also prepare the best course of actions to increase
the chance of success

China Germany Netherlands

Milk Consumption level in 2019
12000 2461.543 704
(thousand metric tons)
Score 4 2 1
This criterion accounted for 20% of the final score

3. Milk Import prospect:

Evaluating the share of imports in the domestic market will bring various significant
points to the market selection process. The interpretation gives an import landscape overview
of potential countries, how much they are purchasing and willing to spend. It also reveals
consumers’ preferences, residents’ openness to foreign products should be included in the
understanding of a market

China Germany Netherlands

4.631.360.675 1.842.749.508 1.252.389.950
Milk import value USD USD USD
(3) (2) (1)
Share of milk imported value in
30.78 42.06 15.47
the total domestic market in 2019
(2) (3) (1)
(%)

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 -2.84% -2.93% -0.73%
Import Growth Rate
(2) (1) (3)

Import prospect 7 6 5

Score 4 2 3

(This criterion accounted for 20% of the final score)

4. International tax rate:

Evaluating the international tax rate is also one of the most important parts as it will
strongly affect organizational profit.
China Germany Netherlands
International Tax Rate 25%
26.95% 20%

Score 1 1 2

(This criterion accounted for 10% of the final score)

5. Technical barriers:
In the aftermath of tainted Chinese milk products and to tighten quality control in the
domestic market, China’s Certification and Accreditation Administration (CNCA) is now
requiring all infant formula produced overseas to be registered with the nation’s quality
watchdog before it can be sold in the country.

German Product Packaging Ordinance announced the packaging must be recycled, or

else, the exporter must recall the packaging and bear all costs. Products from animals and plants
to be imported into Germany must go through very strict inspection and quarantine stages. If

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detected unsafe in food hygiene, they will be destroyed at the border in the residual. In terms
of mycotoxins, in addition to EC Regulation 1525/98, Germany also sets its own standards.

In the Netherlands, the main technical barrier is the EU's general import regulations and
measures, which are specified in five product standards:

- Quality standard: The ISO 9000 quality management system

- Food hygiene standards: Apply Hazard Analysis Critical Control Point (HACCP)

- Safety standard: EU regulations marking requirements

- Environmental protection standards: Eco-labels, regenerative labels, internationally

recognized certificate

China Germany Netherlands

Score 1 1 2
(This criterion accounted for 15% of the final score)

6. Conclusion:
The appearance of Love’in Farm brand name has added a bright spot to the dairy
industry in Vietnam when there is a large-scale fresh milk process in Vietnam that has reached
international standards. The appearance of the company was strongly welcomed by consumers
at home. Contributing a big part to the success of Love’in Farm are professional and logical
marketing activities.

These things have created a premise for the company to gradually export dairy products
abroad. Our analysis in criteria such as Economic stability, Aggregate demand for milk, Milk
import prospect, Political stability, Technical barriers, International Tax Rate in 3 countries:
Germany, China, and the Netherlands, we have decided that China will be the country in which
we export our product and also has international investment and marketing activities. From a
market perspective, consumers always love new products that can compete with top brands,
because it gives the market more choices for consumers, improves product quality, contributes
to the intellectual and physical development of humans. China will be a promising destination
for Love’’in Farm to invest in.

Country
China Germany Netherland
Criterion Weight

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 Political stability 15% 1 2 3
Economic stability 20% 2 3 1
Aggregate demand for 20% 3 2 1
milk
Milk import prospect 20% 3 2 3
Technical barriers 10% 1 1 2
International Tax Rate 15% 1 1 2
Sum 100% 2.0 1.95 1.9

 Market Entry Mode

After evaluating all factor, we’ve decided to export our product to China due to theses
reasons:
 The trade barriers and tariffs have been significantly reduced due to the RCEP,
The FTA is expected to cover all aspects of the business including trade,
services, e-commerce, telecommunications, and copyright through negotiations
over some aspects that still need to be finalized.
 The cost of exporting is lower than that of the other entry modes, entrepreneurs
and small businesses are most likely to use exporting as a way to get their
products into markets around the globe to avoid the expense of establishing
operations in the new country.
 China is one of our neighboring countries so the transportation costs will be
much lower than exporting to other countries.
 Availability of information: The Internet has made exporting easier. Even small
firms can access critical information about foreign markets, examine a target
market, research the competition, and create lists of potential customers. Even
applying for export and import licenses is becoming easier as more governments
use the Internet to facilitate these processes.

V. MARKETING MIX
1. Product:
LIF KUN Cocoa Malt Milk is formulated especially for kids. With yummy taste and
rich nutrients, it is a great source of nutrition and energy for children that can help them reduce
the threshold of fully and completely maintaining nutrition for daily activities.

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 With LIF KUN Cocoa Malt Milk, the perfect combination of pure fresh milk with malt
and cocoa gives the milk product a more fragrant, better flavor, moderate sweetness, cocoa,
and malt ingredients with excellent energy-boosting effect for physical activities.
On the package of each box, there is an interesting character that stimulates the
development of the child's personality.
In particular, LIF KUN Cocoa Malt Milk, with a highly effective formula and a
combination of vitamin K2, calcium, and vitamin D, promotes effective bone system
development for children.
2. Promotion:
Identifying the goals of promoting is a very important step because it relates to the goals
of marketing. Despite its purpose is the company’s revenue, promotional goals in different
situations are not the same.
2.1. Objectives related to the promotion of a product:
o Announce consumer about the LIF KUN Cocoa Malt Milk;
o Help them understand clearly the benefits of the product.
o Make the consumers feel that their best choice is to buy our product.
o Stimulate them to buy our product and make them become our loyal consumers
2.2. The promotional strategy includes these steps:
o Identify the target market: children from 3 years old
o Identify promotional goals:
In short-term:
 Announce the presence of LIF KUN Cocoa Malt Milk to Korean
consumers by means of a distribution channel.
 Provide them with the knowledge about the product
 Emphasize the special feature of the product
 Create the liking to consumers
In long-term:
 Make the consumers feel that their best choice is to buy our product.
 Stimulate them to buy our product and make them become our loyal
consumers
2.3. Choose promotion tools:
In short term: We focus on introducing the new product to the distributors
(push strategy). To do this, we use the tool of advertising on the Internet, in

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 newspapers, and in magazines. This tool seems to be appropriate in the early stages
of the promotion of the product.
3. Place:

4. Price:
Since the milk market in China is full of products that are very competitive in
price and most of malt products are beers, we choose the penetration strategy and set
our product at a reasonable price so that every household, especially those with kids,
can afford our product. Then, once our products are penetrated into the market, IDP
will fix the price to be more beneficial towards revenue.

https://www.theglobaleconomy.com/China/wb_political_stability/

https://www.theglobaleconomy.com/Germany/wb_political_stability/

https://www.theglobaleconomy.com/Netherlands/wb_political_stability/

Political stability: https://www.theglobaleconomy.com/compare-countries/

Economic growth rate: https://www.theglobaleconomy.com/compare-countries/

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