Vinamilk strategic account business plan

METRO Cash & Carry Company File: Group5_11BSM4 Strategic Account Business Plan.doc Date Published: 06/26/2014

STRATEGIC ACCOUNT BUSINESS PLAN

For METRO Cash & Carry

METRO Cash & Carry

Co. METRO Cash & Carry Vietnam

Lot B, New Residential An Phu - An Khanh

An Phu Ward, District 2, Ho Chi Minh City, Vietnam.

Course & Section: MKT 440 & SM4.

Submitted by:

LÊ HOÀNG KIM DUYÊN_1158028

PHAN NGUYỄN PHƯƠNG ANH_1158007

NGUYỄN HẢI PHƯƠNG HẠNH_1158034

ĐỖ THỊ PHƯƠNG DUNG_1158022

LÊ THỊ THANH TÂM_1158124

GROUP 5 – 11BSM4 – VINAMILK Sale Team

DATE: 06/26/2014

Group5_11BSM4 Strategic Account Business Plan

METRO Cash & Carry Company 11/13/2014

Table of Contents

Documents Objective...................................... 3

Introduction .................................................... 3

The Client Background .................................. 4

Target market................................................. 5

SWOT Analysis ........................................... 5,6

Competitive Analysis ................................... 7,8

Customers need .............................................. 8

Sales opportunities ...................................... 8,9

Sales strategy ........................................ 9,10,11

Communication plan .................................... 11

Financial forecast ......................................... 12

Required Resources .................................... 13a



I. Documents Objective:

We are doing a sale plan for 1 year sale for the purpose to complete product

launch plan and obtain sign off from sales and engineering by June, 2015. According to the plan, The Company wants to reach the sales target of over 8 million; adding 2

distribution partners and achieving a large sales volume through these partners by 2015. For customers, we hope we could expand sales to the current customers as well as increase their loyalty and retention; for new customers, we introduce existing products

and more importantly, we want to anticipate future customer needs through the feedback.

II. Introduction:

In recent years, dairy has become one of the fastest growing sectors in the food industry of Vietnam. Along with the common trend of developing countries, Vietnam dairy’s demand is significantly increasing as a crucial supplementary nutrition source.

One of the most leading dairy companies in Vietnam, Vietnam Dairy Product Joint-stock Company (Vinamilk).Being considered the leading producers of dairy products in

Vietnam, VINAMILK Corporation was established in 1976. In 2005, the company was officially listed on the Ho Chi Minh Stock Exchange (HOSE). In average, its domestic revenue enjoys a gradual increase of 20% - 25% every year. The company is currently in

possession of 9 milk factories throughout the country, 1 coffee factory located in the South, 1 general hospital. The three branches located in three biggest cities, namely Ho

Chi Minh City, Ha Noi and Da Nang City, are able to generate a total output of 504,000 tons of milk per year. There are 5 main brains; they are milk products and products from milk. Milk product: sweetened condensed milk, fresh milk, milk powder, Product from

milk: Ice-cream, cheese, yoghurt. And many other products as: Tea, Coffee, and Fruit Juice…Vinamilk committed to providing the best products for consumers. Vinamilk has

invested in technological innovation to manufacture heathful products. The quality is being improved to meet the needs of consumer. The material is selected carefully. You are really comfortable to use Vinamilk Products. Nowadays, Vinamilk product is the

most popular milk product in Vietnam because of their reasonable price policy.

VINAMILK's dairy products are divided into many categories including liquid milk,

powdered milk, condensed milk, drinking and spoon yogurt, ice cream and cheese (VINAMILK's Homepage, 2011). The company's products are also exported to many foreign markets such as Germany, USA, Canada and China. And most amazing is

VINAMILK claiming to have an 80% domestic market share with regard to dairy products.



III. The Client Background

METRO Group is an international wholesaler brand name which provides many kind of

products to serve the general demands of various customers. Under the brands METRO and MAKRO it develops over 761 wholesale stores in 28 countries all over the world.

Metro’s vision is become the best retailer and develop the process of entering the international market. METRO Cash & Carry will pledge to run with the good quality of environment and strong services to meet customers’ needs in the highest current

lifestyles. METRO Cash & Carry was built firmly on the philosophy of customer centeredness.

Today, Metro is known for its close atmosphere and friendly outlets that offer a assortment of fresh and quality products at reasonable prices. They develop in many kind of services, such as supermarket operations, department store operations, appliances, fine

jewelry, pharmacy, fast food outlets, shops, coffee shops, photocopying, framing, embroidery and gift wrapping services.

METRO decided to enter Vietnamese market by 2002 with the name METRO Cash & Carry. It is one of the biggest wholesale dealers in Vietnam with 19 branches in big cities and provinces.

Contact:

Co. METRO Cash & Carry Vietnam

Lot B, New Residential An Phu - An Khanh

An Phu Ward, District 2, Ho Chi Minh City, Vietnam.

Email: [email protected]

Tel: + 84 (0) 8 390 5190 3

Fax: + 84 (0) 8 373 5190 3.



IV. Target market:

Liquid milk segment of Vinamilk includes a lot of product lines that have ability

to meet needs and requirements of various and large number of consumers, such as: UHT 100% non-fat fresh milk, especially aims at people who are on diet or want to avoid fat,

Twin Cows 100% UHT milk imported targets customer segment that loves imported products, fresh milk plus canxi low fat for lack of canxi or overweight people. Huge demand for liquid milk results in high competition in this industry. Applying business - to

- business sale form, we choose supermarkets and schools as main customers to deal with.

To supermarket, Vinamilk decides to corporate with Metro Corp because we want to expand our distributors. Metro is one of the biggest wholesale traders in the world. By 2002, Metro decided to enter Vietnam market by establishing Metro Cash and Carry

Vietnam Company with the first center located in Ho Chi Minh City. Up to now, Metro is the only wholesaler in Vietnam with 19 branches located in big cities and provinces

throughout Vietnam.

To schools, we aim at boarding school systems throughout Vietnam by demonstrate to these venues and facilities milk demonstration to students ‘meals at schools, showing the

influence of milk to students health care and height growth that attracts participants.

V. SWOT Analysis

Strength

1. Having a long history and strong foundation makes VINAMILK become the

biggest brand in the daily product industry and VINAMILK does not do their business only in domestic market, but they also does in 37 foreign countries.

2. Modern technology and machine system are used to produce the best quality

products from milk which are reached the international standard. VINAMILK has the ability to produce variable types of milk products; therefore they have a

diverse product list in order to satisfy the customers’ demand in Vietnam.

3. VINAMILK also develops its distribution system and expands into nationwide range, include: 266 exclusive distributors, more than 224000 retail outlets and

directly sells for over 600 supermarkets in domestic. Moreover, the company has export into different countries in the ASIA and all over the world.

4. The experienced Research and Development department cooperates with the leading Research companies to advance the best quality products to meet the variable demand of customers in different group of ages.



5. Applying modern technology in Enterprise Resource Planning from producing, qualify management to the circulation and distribution of commodity stage.

6. The operating managers have the ability and experiences in milky production that have strong attachment to the company for years, understanding the market and

consuming trend in Vietnam.

Weakness

1. The materials are conditional on import resources because the national milk

resources was satisfied only 30% of the producing demand. Therefore, the consistency in supply and price depends on the international supply – demand

relationship.

2. The big and continuous development in years unintentionally creates stress for the new managers and employees.

3. Newly researched products are not published to the market.

4. The breeding productivity is lower than the general standard and high price of

milky materials also influences the profit.

Opportunity

1. Average consuming rate in milk market in Vietnam is lower than in other countries in area and in the world. Special products for special use have not been produced by domestic producers, while the price of exporting materials

is too high. So, the company has opportunity to grow up in long term strategy.

2. Expand and diversify the domestic distribution system: offering more retail outlets, developing store chain to introduce new products to customers.

3. From now on, VINAMILK has exported to other countries and contributes 14% of total turnover in economy. However, the company still has chance to

expand the sphere of business.

Threat

1. There is more competitive in milky market, especially with the famous international brands.

2. Commitment of the Vietnamese government about reducing taxes leads to the

cutthroat competition between businesses: large foreign corporations have opportunity to participate in the market.



3. Low income also affects consuming rate

4. The world economy influences the consistency of pricing and materials supply in

the future and it may out of control of VINAMILK

VI. Competitive Analysis

The competition in the market segment of fresh milk is increasingly fierce because there are a lot of redoubtable rivals. Locally, the strongest rival of Vinamilk is none other than Dutch Lady, followed by the Hanoi milk and TH True Milk are as new

players in the fresh milk market for children segment, which seems like potential big rivals in recent years. Besides, Vinamilk is also being challenged by imported products

following WTO accession commitments. Due to Dutch Lady is supported by capital inflows from its holding company so it does not have the same need to maintain profitability. Therefore, its competitive strategy is more flexible than Vinamilk.

The first argument is in terms of the distribution channels; an extensive distribution channel is an important growth aspect for companies to build a major barrier towards

several new entrances. In particular, Vinamilk has the largest distribution channel with approximately 250 exclusive distributors and more than 24,000 retailers throughout the country, while Dutch Lady builds the second largest dairy distribution network with 145

distributors and Nestle with only around 95 distributors nationwide.

About the purchasing power in raw material inputs, Vinamilk is leading in buying raw

milk in the country, purchasing up to 50% of the total indigenous production, while Dutch Lady is the second largest raw milk buyer with approximately 20% of local fresh milk. Nestle and at least 17 other companies account for the remaining 30% of local fresh

milk supply. However, Vinamilk meets a serious problem in the purchasing price of fresh milk from local farmers. According to the article on The Saigon Times webpage, the

original milk price of Vinamilk is lower than Dutch Lady. Vinamilk’s buying price is only VND7,000 per kilogram at 50 cow-raising families in the country, while the current price offered by Dutch Lady is VND7,500 per kilogram. Moreover, the commission or

bonus for the farmer of Vinamilk is quite low while the bonus policy of Dutch Lady is maintained frequently. Dutch Lady takes care more beneficial to their farmers who are

facing huge difficulties due to the rising production cost, while Vinamilk tend to cut into farmers’ benefits and send many farmers into hardship through purchasing fresh milk with the lower price.

Thirdly, the market share is the most important factor that decided the success of Vinamilk today. As it requires no refrigeration and has a long shelf life, UHT milk is the

dominant product.

Vietnam, such as flavored and UHT milks. Although Vinamilk has larger capacity with 507,406 tons per year, there is no big difference in market share between Vinamilk and



Dutch Lady. According to the Source of Dairy Vietnam year 2010, the market is very concentrated and 60% of the market share belongs to Vinamilk and Dutch Lady with

36% and 24% respectively. Milk imported from companies like Mead Johnson, Abbott and Nestle accounted for about 21% market share. And the remaining 19% shares of the

approximately 20 dairies are small size as Nutifood, Milk Hanoi, Ba Vi and so on.

VII. Customers need:

Customers are an important factor for the survival and development of vinamilk.

We continuously improve products and services through to meet customer needs to ensure the comfort and satisfaction when using the product vinamilk.

Organizing workshops for clients to advertise a new product, a short survey for them to collect some experience when they use the product. we

will create the survey for comments or feedback from customers to improve their products in bad aspects and we will develop the best aspects of the product for creating the best products.

Creating relationships by using membership cards for loyalty customers. When they buy products at the store or the product vinamilk distribution

system will be discounted by 20% and they will be receiving gifts gifts when they purchase products in bulk and special occasions.

a. On the other hand, employees will also be trained knowledges as professional experience, knowledge and soft skills so employees can communicate better to answer customer questions about products and

services of Vinamilk when they are buying products. They will know how to quickly solve problems and they will solve promptly in simple

situations.

VIII. Sales opportunities:

Currently Vinamilk has two distribution channels to deliver products to

consumers:

Distribution through traditional channels (includes 220 independent distributors and over

140,000 retail outlets) distributing more than 80% of the company’s products. To support its distribution network, the company has opened 14 showrooms in the big cities like Hanoi, Danang, Ho Chi Minh and Can Tho, etc. Distribution through modern channels

(such as supermarket, Metro, etc): The advantage of the company is having a wide and strong distribution network, through the dairy factories invested in many places spread

throughout the country; with 1,400 level-one agents as well distribution network spread across the country with 5,000 agents and 140,000 retailers and the other direct distribution channels such as schools, hospitals, supermarket, etc..



First of all, we sell products with the client, we will have many different opportunities such as creating long-term relationship with client. Many companies in Vietnam, they sell

with cheap price and make more promotions but our client who is still choose VINAMILK because they believe about our quality. On the other hand, we also create

constant revenue resource with this client because they buy more and are often willing to pay more.

Secondly, The loyal customers are typically repeat customers. This means that these

people will return to on particular company and buy again, resulting in a steady income for that business. Loyal clients also typically recommend their favourite companies to

family and friends, which bring in more business. Besides, an increase in keeping customers can promote our bottom-line profit by 25% to 100% depending on our fixed costs.

Finally, saving money but effective with world of mouth. When loyal client and customer to use or buy product of VINAMILK, they feel better than others, they will tell with

everyone about that product line by word of mouth. Therefore, VINAMILK will attract different client resource and creative belief from customers about VINAMILK’s brand everywhere.

IX. Sales strategy:

No1:

Knowing that almost all families have chosen supermarkets as their shopping places recently because supermarkets not only ensure the goods quality but also offer reasonable prices compared with traditional distribution channels as markets. With Cash

and Carry style (customers pay in cash and self-transport), Metro has taken part in Vietnamese market with the target “distributing business and retailers only”. Metro is

appropriate with marketing objective that VINAMILK desires to reach up to 60% local market share of fresh milk the upcoming year. To the mutual beneficial agreement, VINAMILK is eager to cooperate with Metro to make Metro trademark to come closer to

its customers through new and popular product lines of VINAMILK. Besides, VINAMILK can increase the sales figures, make sure output quality and easily control

business operations before the products are handed over to consumers through POS (Point of sales), including Metro’s outstanding administration software. These are some benefits Metro can obtain when cooperating with VINAMILK. Comparing with Dutch

Lady and TH True Milk, strategy of VINAMILK is that should Metro agree to let VINAMILK in with the large number and make payment with in one week, VINAMILK

will offer them 15% discount of the sales value. If Metro can’t afford to make payment or pre-paid, VINAMILK will also let the company make short-term debts with the lowest interest rates. Instead, Metro will help VINAMILK display the cargo at the best location

and give them the priority to demonstrate VINAMILK products with customers. In



upcoming haft year, VINAMILK will apply special deals for customers shopping at Metro only. This promotional deals will be quarterly divided but in different ways.

From April to June, to prepare for International Children’s Day June 1th, VINAMILK set up gift-offer programs when customers buy fresh milk products in Metro with the invoice

of more than 200,000 VND. Those who are with children will be given a nice teddy bear, printed the logo of VINAMILK – Metro co-operation and have opportunities to get 10 scholarships of 5 millions VND.

From July to September: set up booths that serve VINAMILK fresh milk free of charge, not only increase sales figures for two parties, but also help customers to know more

about VINAMILK by sharing children health care experience before upcoming examinations.

From September to December: work with Metro to set up “Milk funds for Vietnam”,

“Care for Vietnamese children’s future”, give milk and warm clothes for poor children in need in remote areas.

From January to March: VINAMILK products will be packed in big parcels with all kinds of milk suitable to each family member, selling at Metro only.

Moreover, customers will be given gift vouchers when buying goods at Metro with point-

collecting programs if buying VINAMILK package here.

No2:

The second potential market of VINAMILK to develop the sales plan which tend to some boarding schools in the country. Our marketing team researched that the purpose of the boarding school in the city that they are very concerned about health problems of

their students, VINAMILK will implement the plan for the distribution of milk for the boarding school in the city. Compared with Dutch Lady or TH True Milk, one of the

strongest competitive advantages of VINAMILK is its old brand. VINAMILK’s reputation has a sustainable development in the domestic market nearly 40 years. These are some benefits that the schools could get when they cooperate with VINAMILK. If

schools accept to order VINAMILK products in large quantities and pay off in 1 week, the VINAMILK will discount 5% of value of goods. Additionally, the milk cartons were

used; VINAMILK will purchase and bring to recycle. The money from the purchase process will deducted by 1% in the sale cost. This is the sales strategy of mutual benefit to both parties, VINAMILK will bring milk cartons to recycling into new products so

schools can teach their students to know how to protect environment. VINAMILK will deliver with benefits such as gifts including milk, school supplies for students ...

depending on quarter. Moreover, VINAMILK also organize some promotions for schools to build long-term relationships.



From July to September, VINAMILK supports students who face difficult circumstances in their life by several valuable scholarships on the occasion of the new school year,

organize the free health care for all students in high schools.

From April to June: students have to take a lot of exams in this period, then VINAMILK

offer leaflets which contain necessary information about regimen for students to ensure that they remain the best health condition. Additionally, VINAMILK offer 180ml fresh milk for each student on the exam days.

X. Communication plan:

Indirect communication (via mail, letters...):

_Metro: Send letter of introduction about the company and the cooperation plan, so Metro can learn and consult before deciding to cooperate. On the other hand, the previous mailing also help companies save time and still understand the gist, but will hardly

uniform opinion. Need to have a meeting after finding out information and make decisions, sign contracts.

_ The Boarding School: send mail introducing products that the company will provide to the schools, and the benefits that will be enjoyed school when cooperation. The school will have time to consider the terms on which the company launched. The two sides will

be meeting to discuss cooperation and provide appropriate direction

Direct communication (meetings, telephone, presentations ...):

_Metro: Vinamilk representative will contact directly with the management of the Metro, introduce product and discuss the benefits of both parties. There should be more meetings to make the final decision. This takes time, but the two sides to achieve high efficiency.

_ The Boarding School: Talking to the representatives of the school to introduce our company and products. There is a showcase of the products and the products suitable for

each age. Spend a nday in an agreement and signed a contract with the school



XI. Financial forecast:

Balance Sheet

2013 2014 2015

Current Asset 12,415,939 12,621,027 12,784,634

Long-Term Asset 9,466,984 9,486,300 9,560,897

Total Asset 21,882,923 22,107,327 22,345,531

Liabilities 4,498,116 3,497,656 2,497,657

Owner's Equity 17,384,807 18,609,671 18,674,532

Total Resources 21,882,923 22,107,327 21,172,189

Income Statement

2,013 2,014 2,015

Sales 6,863,710 7,114,392 8,564,987

Less Deductions 141,001 153,808 171,300

Net Sales 6,722,709 6,960,584 8,393,687

Cost Of Sales 4,285,765 4,587,602 4,378,524

Gross Profit 2,436,944 2,372,982 4,015,163

Net Operating Profit 1,838,932 1,667,907 1,567,985

Profit Before Tax 1,862,007 1,707,657 1,865,478

Business Income Tax 337,682 346,426 33,579

Net Profit 1,524,325 1,361,231 1,831,899



Required Resources

“Metrol group report”. Retrieved December 18, 2010 from

http://www.metrogroup.de/internet/site/metrogroup/node/11163/Len/index.html#top

(n.d.) Retrieved June 10, 2003 from http://www.metro-cc.com/internet/site/mcc/node/MCC_HOME/Len/index.html

“Vinamilk grilled over fresh milk buying price”. Retrieved March 26, 2009 from

http://english.thesaigontimes.vn/1138/Vinamilk-grilled-over-fresh-milk-buying-price.html

“Những thay đổi tích cực của thị trường sữa Việt Nam”. Retrieved January 19, 2008 from

www.dairyvietnam.org.vn

“Examples of strategical objectives”. Resources. Retrieved July 18, 2012 from

http://onstrategyhq.com/resources/examples-of-strategic-objectives

“Vinamilk’s SWOT Analysis”. Retrieved October 2, 2007 from

http://www.vinamilk.com.vn/uploads/Download_E/20140415_VINAMILK_AR2013-EN.pdf

http://www.metrogroup.de/internet/site/metrogroup/node/11163/Len/index.html#top

http://www.metro-cc.com/internet/site/mcc/node/MCC_HOME/Len/index.html

http://english.thesaigontimes.vn/1138/Vinamilk-grilled-over-fresh-milk-buying-price.html

http://www.dairyvietnam.org.vn/

http://onstrategyhq.com/resources/examples-of-strategic-objectives



Vinamilk strategic account business plan

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