Luận Văn Enhancing Consumer Perceived Quality

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
NGUYEN THUY VAN
ENHANCING CONSUMER PERCEIVED
QUALITY: A CASE OF VINAMILK
INFANT FORMULA MILK POWDER
DỊCH VỤ VIẾT THUÊ ĐỀ TÀI TRỌN GÓI ZALO TELEGRAM : 0934 536 149
TẢI FLIE TÀI LIỆU – TRANGLUANVAN.COM
MASTER OF BUSINESS ADMINISTRATION
Ho Chi Minh City – Year 2022

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
NGUYEN THUY VAN
ENHANCING CONSUMER PERCEIVED
QUALITY: A CASE OF VINAMILK
INFANT FORMULA MILK POWDER
MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: Assoc. Prof. Dr. NGUYEN THI MAI TRANG
Ho Chi Minh City – Year 2022

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ACKNOWLEDGEMENT
First of all, I would like to express my grateful thanks to my supervisor, Dr. Nguyen Thi
Mai Trang, for supporting me. During the whole time of doing thesis, her advice helps me
to get through all mistakes in my work. Moreover, she also teachs me much more than just
finishing this thesis. Again, I want to say “Thank You Very Much” to my advisor for all
he has done for me.
Secondly, I would like to use this chance to give deep gratitude to all lecturers of
International School of Business (ISB) – UEH for their helping me in during my academic
years at ISB. I have been assisted very much in the completing of this thesis by the
knowledge and skills that I have learned.
Furthermore, I would like to appreciate the contribution of people who help me complete
the in-depth interview to share their valuable time and support me with useful information
for completing this thesis.
Last but not least, I would like to express my special thanks to my family who always
support and encourage me both physically and mentally during the time I do this research.

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EXECUTIVE SUMMARY
When global infant formula milk powder market gets a remarkable growth with CARG at
3.0%, especially targeting key emerging country. With the fastest growth rate since 2011,
Vietnam’s economy reach 7.08% of GDP in 2018. Then, Vietnam would be a competitive
market for infant formula milk powder category with strong competition from domestic
and foreign manufacturers.
Nowadays, behavior of Vietnamese consumers are changing rapidly due to development
of technology and globalization. Vietnam’s IFMP industry has experienced an update
trends and changes as the rise of premiumizations and shifting from powder milk to
drinking powder milk. Then it is crucial for manufacturers to change in order to meet their
target consumer’s need and want.
Recent year, sales revenue of powder milk has decreased with CAGR of -2% compare to
2013, while sales revenue of drinking milk powder has gradually increased. Besides,
volume share of Vinamilk’s IFMP also has changed among price segmentation. According
to the result of in-depth interviews and previous study, this study aims to figure out what
the main problem is, validate the main problem, the importance of main problem. This
research will explore the cause of the main problem. The findings of research implements
that the low level of consumer’s perceived in quality leading to change in sales revenue
and volume share. Then the alternative solutions would be suggested to improving the low
level of consumer perceived in quality.

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Contents
ACKNOWLEDGEMENT..........................................................................................................................3
EXECUTIVE SUMMARY.........................................................................................................................4
LIST OF ABBREATIONS.........................................................................................................................7
LIST OF TABLES......................................................................................................................................8
LIST OF FIGURES ....................................................................................................................................8
1. INTRODUCTION...............................................................................................................................9
1.1. Company’s background .............................................................................................................9
1.2. Vinamilk’s powdered milk category........................................................................................10
1.2.1. Infant formula milk powder (IFMP) ...................................................................................11
2. PROBLEM CONTEXT....................................................................................................................12
2.1. Global infant formula milk powder market ...........................................................................12
2.2. Vietnam FMCG landscape and infant formula milk powder market..................................13
2.3. Vinamilk’s infant formula milk powder situation in Vietnam..............................................16
2.3.1. Sales revenue gradually shifts from powder milk to drinking powder milk (UHT).............16
2.3.2. Change in Volume Share of Vinamilk’s IFMP category.....................................................17
3. PROBLEM IDENTIFICATION .....................................................................................................19
3.1. Potential problems ....................................................................................................................21
3.1.1. Inadequate product’s recognition.......................................................................................21
3.1.2. The low level of consumer’s perceived in quality ...............................................................23
3.1.3. Market condition.................................................................................................................24
3.2. Problems validation ..................................................................................................................26
3.2.1. Eliminating inadequate product’s recognition and market condition as main problem.....26
3.2.2. Illuminating low level of consumer’s perceived in quality as the main problem................27
3.3. Justify the importance of low level of consumer’s perceived in quality...............................30
3.4. Potential causes .........................................................................................................................33
3.4.1. Less reliable source of information.........................................................................................33
3.4.2. Less visibility in high-end segmentation .................................................................................34
3.5. Cause validation........................................................................................................................37
3.6. Cause – and – effect tree...........................................................................................................38
4. ALTERNATIVE SOLUTIONS.......................................................................................................39
4.1. The first alternative solution: building strong positive traditional word of mouth ............40

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4.2. The second alternative solution: building the strong positive electronic Word – of – Mouth
through social media.............................................................................................................................43
4.3. Solution justification.................................................................................................................47
5. ACTION PLAN IN ORGANIZATION ..........................................................................................48
6. CONCLUSION .................................................................................................................................51
SUPPORTING INFORMATION............................................................................................................52
REFERENCES..........................................................................................................................................70

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LIST OF ABBREATIONS
CAGR Compound annual growth rate
eWOM Electronic word of mouth
FGD Focus group discussion
FMCG Fast moving consumer good
HMO Human Milk Oligosaccharide
IFMP Infant formula milk powder
IHV In home visit
KOL Key opinion leader
MAT Moving annual total
MFGM Milk Fat Globule Membrane
SKU Stock keeping unit
TY This year
UHT Utra high temparature
WOM Word – of - Mouth
YA Year ago
YTD Year to date

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LIST OF TABLES
Table 1 Financial highlights 2014 - 2018
Table 2 Infant formula milk powder’s price segmentation
Table 3 Growth in volume share and Value share
Table 4 Volume share and growth rate IFMP
Table 5 Sales revenue of Vinamilk’s powder milk
Table 6 Sales revenue of Vinamilk’s drinking powder milk
Table 7 Estimated cost for building strong positive traditional WOM
Table 8 Estimated cost for building strong positive e-WOM through social media
LIST OF FIGURES
Figure 1 Vinamilk’s product portfolio
Figure 2 Vinamilk’s powdered milk category
Figure 3 Global infant formula milk powder market forecast 2023
Figure 4 Vietnam (MT Urban) 2018 - Volume share IFMP + Specialty
Figure 5 Value Share Nation Wide 2017 - 2018
Figure 6 Sales revenue Vinamilk’s infant formula milk powder
Figure 7 Volume share – Vietnam modern trade urban
Figure 8 Vinamilk IFMP volume share – price segmentation
Figure 9 Sources of information to buy the first IFMP product for children in 2018
Figure 10 The most important reasons for switching IFMP brands
Figure 11 Birthrate (crude)
Figure 12 Percentage of household
Figure 13 Volume share %
Figure 14 IFMP Volume share – Price segmentation
Figure 15 Consumer’s buying decision making process
Figure 16 Number of mom & baby stores
Figure 17 % share of occasion shopping
Figure 18 Infant formula milk powder buying behavior
Figure 19 Shopping occasion in 2018
Figure 20 Cause and effect diagram

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1. INTRODUCTION
1.1. Company’s background
As one of the biggest companies in Vietnam, Vinamilk established in 1976 under the first
name of Southern Coffee-Dairy Company. In 1978, it renamed as United Enterprises of
Milk Coffee Cookies and Candies and changed into Vietnam Dairy Company in 1993.
Since 2003, as followed the IPO to market of Ho Chi Minh Stock Exchange, it has changed
into Vietnam Dairy Products Joint Stock Company (hereafter called as Vinamilk)1
.
Vinamilk’s products portfolio are conducted in business industry including in producing
and distributing more than 250 SKUs with main products categories as fresh milk, yogurts,
powdered milk & nutrition powder, sweet condensed milk, ice-cream & cheese and soya
milk, fruit juice & beverage.
Figure 1: Vinamilk’s product portfolio
(Source: Vinamilk’s internal report 2018)
In 2018, Vinamilk achieved the total revenue at 52,135 billion VND with a CARG of
10.6% compare to year 2014 and increases in revenue 2.9% than 2017. Profit after tax is
10,206 billion VND at a CARG of 13.9% compare to year 2014.

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Table 1: Financial highlights 2014 - 2018
(VND billion) 2014 2015 2016 2017 2018 CAGR vs. 2017
Total revenue 35,187 40,223 46,965 51,135 52,629 10.6% 2.9%
Profit befor tax 7,613 9,367 11,238 12,229 12,052 12.2% -1.4%
Profit after tax 6,068 7,770 9,364 10,278 10,206 13.9% -0.7%
(Source: Vinamilk’s financial report 2018)
Vinamilk1
would like to become one of the most favorite brands in Vietnam. 1
According
to CEO of Vinamilk - Mrs. Mai Kieu Lien that the leading manufacturers in Vietnam dairy
market, Vinamilk should be always innovative and innovation is a key success factor that
makes Vinamilk to achieve its mission how to deliver the valuable nutrition to community
with its respect, love and responsibility.
1.2. Vinamilk’s powdered milk category
Vinamilk’s powdered milk category consists of three types of product for: adult, pregnancy
and infant formula milk powder.
Figure 2: Vinamilk’s powdered milk category
(Source: Vinamilk’s internal report 2018)

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As one of keyproduct category of Vinamilk, powder milk category contribute 26% revenue
and 28% gross margin profit for Vinamilk in 20171
. With 27% share in 2017, Vinamilk’s
powdered milk category is leading in the market and has strong impact on the growth of
this category.
1.2.1. Infant formula milk powder (IFMP)
The international Codex Alimentarius Commissions2
states that infant formula is a
breast-milk substitute specially manufactured to satisfy, by itself, the nutritional
requirements of infants during the first months of life up to the introduction of appropriate
complementary feeding. Infant formula milk powder is also defined as a a manufactured
food designed and marketed for feeding to babies and infants, usually prepared for bottle-
feeding or cup-feeding from milk powder (mixed with water)2
.
According to Nielsen3
- a global performance management company that provides a
comprehensive understanding of what consumers Watch and Buy, infant formula milk
powder can be segment by price as table below:
Table 2: Infant formula milk powder’s price segmentation
Lower
Mainstream
Upper
Mainstream
Premium Super Premium
Price's segmentation
(VND/gram)
< 200 200 <= 300 300 <= 400 > 400
(Source: Nielsen’s report 2018)
Due to price segmentation of Nielsen3
, Vinamilk’s infant formula milk powder category is
divided into three segments: premium, mainstream and specialty; particularly as mentioned
in figure 2. Based on formulation, Vinamilk’s IFMP can be divided into powdered milk
(mixed with water) and drinking milk (not mixed water). Furthermore, according to the
basic of product type the market is segmented into starting milk formula, follow-on milk
formula, toddlers milk formula, and special milk formula.

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2. PROBLEM CONTEXT
2.1. Global infant formula milk powder market
The global IFMP market is value at 27.7 billion USD in 2018 and will reach 35 billion
USD by the end of 2025 at a CARG of 3.0% during period from 2019 to 20254
. Due to
high purchasing power, the middle class become the engine of development in many
countries. It is not only one of the largest categories within health and wellness (HW)
packaged food but was also a very fast growing one during the review period, despite the
decline in birth rates and an increasing number of breastfeeding campaigns4
. Changing
lifestyles, female participation in the workforce along with the lack of time and
inconvenience is expected to boost the global infant nutrition market. The slowdown in
sales in developed regions has caused leading players to target key emerging markets,
which are driving the global market.4
Figure 3: Global infant formula milk powder market forecast 2023
(Source: Market Research’s Report 2018)
Asia Pacific is the key region, led by China, which saw the largest absolute growth over
2010-2015, followed by Hong Kong, Indonesia and Vietnam. China is seeing a movement

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towards premiumisation – a trend which is apparent in both emerging and developed
markets5
. According to Euromonitor International, China alone accounted for 46% of milk
formula market in 2015. Europe is the second-largest region-wise market with 21.46%
global consumption share3
.
Based on report of Euromonitor Interbational5
, premiumisation strategies are likely to
remain driven by free-from special baby milk formula including hypo-allergenic milk
formula, naturally healthy products such as organic, as well as goat milk formula. The
emergence of HMOs and MFGM in milk formula are also likely to fuel new product
launches.
2.2. Vietnam FMCG landscape and infant formula milk powder market
According to General Statistic Officer (GSO)6
Vietnam, in 2018 Vietnam’s economy
represent the fastest growth rate since 2011 to achieve GDP at 7.08%. CPI has been under
control to remain index below 4% since 2015. The retail sales of consumer goods also
increases to 12% in 2018 reflecting the high domestic demand of Vietnamese consumers.
In 2019, economic growth is forecasted to up 6.8%.6
According to Kantar World Panel7
, FMCG market is lagging in Urban areas, while still
growth in rural areas. In the rural areas, market will get its momentum back and expect to
continue with 5-6% year-on-year growth in 20197
. In urban 4 key cities, dairy is still
stagnant. On the other hand, the year 2018 dairy continue growth at 7.9% in value and
6.6% in volume compare to year ago.
Based on Euromonitor International report5
, Vietnam is a competitive market for infant
formula products. The infant formula market in Vietnam is relatively small in terms of
demand but quite large in terms of supply in comparison with other markets in the region.
The research shows that strong competition in the market brings benefits to consumers in
terms of both wide products ranges and price points that are available for consumers.

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Figure 4: Vietnam (Modern Trade Urban) 2018 - Volume share IFMP + Specialty
(Source: Nielsen’s report)
According to report on update trends and market changes in 2018 of Nielsen3
, there are
three main trends in IFMP industry that is increasing in drinking milk, decreasing powder
milk and premiumization trends. Vietnam IFMP market share has gradually shifted from
powder milk to drinking milk. Share of drinking milk keeps its momentum, posting the
double-digit growth; in contrast, powder milk keeps declining.
Figure 5: Value Share Nation Wide 2017 - 2018
Mead Johnson
Nestle
Nutifood Vinamilk
Dutch Lady Abbott

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As can be seen from table below, it changes not only in volume share but also in value
share as well. In comparison to 2017, the growth rate of powder milk volume’s share and
value share in 2018 were -13% and -11% respectively; while the growth rate of drinking
milk powder were 20% and 17% respectively. Then, Vietnam’s IFMP market has shifted
gradually from powder milk to drinking milk powder.
Table 3: Growth in volume share and Value share
% Growth 2018 vs. 2017 % change Volume % change Value
IFMP -8% -6%
Powder milk -13% -11%
Drinking milk 20% 17%
Nielsen also figured out the changed in each company in Viet Nam market as well. In
general, Vinamilk is leading in volume share of IFMP + specialty category accounting for
39.7% share of total category in 2018; whereas, Nutifood is leading in drinking milk
powder accounting for 54.9% share. Besides, the growth rate of total category in 2018
compare to year ago is also negative. In contrast, volume share of drinking milk powder
category in 2018 increase 22% compare to 2017.
Table 4: Volume share and growth rate IFMP
2018
Drinking milk - IFMP IFMP + Specialty
Vol Shr Vol Growth vs YA Vol Shr Vol Growth vs YA
Category 100.0 22% 100.0% -14%
Vinamilk 35.6% 32% 39.7% -13%
Abbott 8.7% 34% 15.8% -14%
Nutifood 54.9% 14% 14.9% -21%
CGHL 0.1% 9.1% -15%
Mead Johnson 0.3% -30% 6.1% -17%
Nestle 0.3% 4.6% 3%
(Source: Nielsen’s report 2018)
To sum up, Vietnam IFMP’s industry are more and more challenges with fiercely
competition from both of domestic and foreign competitors.

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2.3. Vinamilk’s infant formula milk powder situation in Vietnam
2.3.1. Sales revenue gradually shifts from powder milk to drinking powder milk (UHT)
According to Vinamilk’s internal report, sales revenue of powder milk has decreased since
2016, with CAGR of -4% compares to 2015. In 2018, powder milk achieved 4,496 billion
VND with the growth rate of -17% compare to 2017. Besides, as a premium brand of
Vinamilk’s IFMP category, sales revenue of Optimum Gold (powder milk) has slowdown
its growth rate since 2017. Although the CAGR was 10% compare to 2015, its growth rate
in 2018 comparing to 2017 is -9%.
Table 5: Sales revenue of Vinamilk’s powder milk
2015 2016 2017 2018 CAGR
TOTAL
POWDER MILK
Revenue (Billion VND) 5,070 5,548 5,407 4,496 -4%
Growth rate 2% 9% -3% -17%
OPTIMUM GOLD
Revenue (Billion VND) 1,148 1,631 1,661 1,515 10%
Growth rate 17% 42% 2% -9%
(Source: Vinamilk’s internal data)
On the other hand, after the first launching in the end of 2014, sales revenue of Vinamilk’s
drinking milk powder has increased gradually at CAGR of 111% compare to 2015. It
achieves growth rate of 39% compare to 2017. Sales revenue of Optimum Gold UHT with
CAGR of 159% also has increased significantly since 2015.
Table 6: Sales revenue of Vinamilk’s drinking powder milk
2015 2016 2017 2018 CAGR
TOTAL DRINKING
MILK POWDER
Revenue (Billion VND) 228 844 1,527 2,127 111%
Growth rate 270% 81% 39%
OPTIMUM GOLD
UHT
Revenue (Billion VND) 48 265 555 839 159%
Growth rate 451% 109% 51%

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To sum up, based on internal sales report of Vinamilk IFMP from 2014 – 2018, Vinamilk’s
IFMP has switched gradually from powder milk to drinking milk in the revenue of sales.
CAGR of drinking milk is valued at 111% comparing to first launching in 2015, whereas
milk powder’s sales revenue has decreased since 2016. Hence, behavior of consumer in
buying IFMP’s product has been changing gradually from powder to drinking powder,
which is more convenient.
Figure 6: Sales revenue Vinamilk’s infant formula milk powder
2.3.2. Change in Volume Share of Vinamilk’s IFMP category
According to Nielsen report, volume share of Vinamilk’s IFMP category increased 0.5%
in December 2018 after several months decreasing. Volume share of total IFMP category
increased due to volume share of drinking milk has increased significantly. Although total
volume share of YTD 2018 increased 1%, volume share of IFMP category has been
gradually decreased since December, 2017.

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Figure 7: Volume share – Vietnam modern trade urban
(Source: Nielsen report 2018)
Briefly, volume share of total IFMP category slightly increased due to volume share of
drinking milk powder increased. Furthermore, volume share of lower mainstream
decreased, while upper mainstream and premium increased. Hence, volume share has
shifted among price segmentation as well.
Figure 8: Vinamilk IFMP volume share – price segmentation

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This study approach is based on qualitative method with primary data from in-depth
interview and data from Nielsen, Euromonitor International, GSO Vietnam, Kantar World
Panel, data of Vinamilk sales and marketing departments.
3. PROBLEM IDENTIFICATION
According to the result in home visit (IHV) test that IFMP category’s marketing team
conducted by visiting consumer home and asking about source used to find information
about IFMP to purchase for the first time and influencing purchasing. Yearly, brands team
and research team often conducts IHV and FGD (focus group discussion) to investigate
buying behavior and consumer insights in four main cities Ha Noi, Ho Chi Minh, Da Nang
and Can Tho. IHV test that IFMP category’s team conducted among consumers who are
pregnancy, especially at 8th
– 9th
months and mom, who have babies from 0 – 3 years old
(equally divided 0 – 1, 1 – 2, 2 – 3). Consumers provided some sources to find information
for the first products they would buy for their child.
Figure 9: Sources of information to buy the first IFMP product for children in 2018
(Source: Vinamilk in-home visit report 2018)

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Based on the result of IHV test in 2018, it highlights the important of recommendations
from health care Professional (HCP), recommendations from friends and family, parenting
websites and TV advertising as the main sources of information that new parents used to
learn about the first IFMP for their child. According to HCP recommendations and
recommendations from friends/family; interviewer also mentioned the most important
reason for not choosing Vinamilk’s IFMP brands as first source of nutrition for their child
is breastfeeding and origin of products.
Besides the test also figures out the most important reasons for switching IFMP brands.
Feedback from friends and family is the most important reason for consumer to switch
brands. Recommendation from HCP, TV advertising and social media also have
significantly impact on consumer’s decision.
Figure 10: The most important reasons for switching IFMP brands
(Source: Vinamilk in-home visit 2018)
In order to clarify possible problems and validation potential problems, together with
literature reviews and theories about consumer buying behavior and result from Vinamilk’s
IHV, the in-depth interviews are conducted to gather valuable opinions and perspectives
of respondents as below:

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- The first group includes two respondents who are currently working at Vinamilk as
medical field force.
- The second group includes sales and marketing managers in IFMP category such
as: Ms. Ha The – Sales manager of milk powder category, Ms. Hang Bui – Optimum
Gold Brand Manager, Mr. Chau Le – Dielac Brand Manager and Ms. Thanh Van –
Marketing director of Vinamilk’s milk powder category.
- The third group are customers who accepted to buy Vinamilk’s IFMP category and
who refused to purchase.
By conducting in-depth interviews and data collection from both customer’s perspectives
and insights of relative people of Vinamilk’s IFMP, there are three potential problems that
lead to decrease sales revenue including: (1) Inadequate product’s recognition, (2) Low
level of consumer’s perceived in quality of domestic product. (3) Less premium (4) Market
condition.
3.1. Potential problems
3.1.1. Inadequate product’s recognition
UNICEF8
stated that “Breastfeeding is still the best source of nutrition and growth for
infants”. 7
The benefits of breast milk consist of providing infants with all nutrition need
for healthy and grow, boosting immune systems of children to protect them from diarrhoea
and acute respiratory infections.
Firstly, breastfeeding become popular discussion topic on Vietnam’s social media to
promote beneficial to babies’ development. With an increasing emphasis on health and
wellness and the consumption of products that are organic and safe to eat, breastfeeding
was increasingly popular over period.
Ms. Ngan Nguyen – Medical field force executive in Ho Chi Minh acknowledged that
doctors from big maternity hospital in Ho Chi Minh such as Tu Du, Mekong, … often
recommend mom to totally feed their babies under 6th
month with breast milk if enough
condition.

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Medical staffs often organize prenatal clubs to train pregnancies about nutrition for pregnancy period,
preparing to give birth, feeding babies with breast milk, problems often happening for babies under 1
years old.
Beyond threat of being rendered obsolete by breast milk, IFMPs are expected to reposition
themselves in the market to meet ever-changing consumer demands in order to achieve
competitive advantage in the IFMP industry. Besides, Vietnamese mothers who can not
supply enough breast milk for their babies expected more about ingredient of IFMP
products to not only ensure that their babies developed physically but also has similar
effectiveness as breast milk. Furthermore, Euromonitor International5
research stated that
with greater awareness of the health benefits of breast milk, IFMP manufacturers, in an
attempt to resemble its composition, are focusing on nutritional ingredients as a key driver
of innovation.
Mrs. Tram – a mother of 11th
months babies mention that she exclusive feed her baby with
breast milk because of doctors recommendation.
I understand the benefit of breast milk to development of babies, especially babies under 6th
months;
however, I can not provide enough milk for my babies. Hence, I want to provide my baby a product
with similar function to breast milk.
Abbott9
launched Similac Pro-Advance in 2016 containing one of these HMOs, 2’FL,
while in 2017 Nestlé10
launched Nan Optipro Supreme, marked a further development as
it contains these two HMOs, 2’FL and LNnT. Other players planning to introduce new
products containing HMOs include FrieslandCampina11
. MeadJohnson12
launched the first
infant formula with MFGM (Milk Fat Globule Membrane) which is similar to breast milk.
Besides, Ms. Ngan Nguyen – Medical field force executive also acknowledged that:
Recently, I often received questions from medical staff about ingredient of Optimum Gold such as “It
is similar to breast milk, is not it?”, “Does Vinamilk have plan to adding HMOs or MFGM into
Optimum Gold’s formulation like Abbott, MeadJohnson and Nestle?”.
As mentioned by Ms. Ngan Nguyen, ingredients of Vinamilk’s IFMP product still have not
add special nutrients such as HMOs, MFGM would be difficult to compete with other
competitors like Abbott, Nestle, Mead Johnson. Recently, HCP from big maternity hospital

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pay more attention on those special nutrients and value of adding those ingredients for
mom who can not supply their baby with breast milk.
To sum up, Vinamilk’s IFMP category formula, particularly Optimum Gold ingredients
are still not adding HMOs or MFGM – nutrient in breast milk; then, it would be challenge
for Vinamilk’s IFMP products to compete with other foreign products that are
communicating similar to breast milk. Therefore, inadequate product’s recognition would
be one of potential problem leads to shift in sales revenue and change in share volume.
3.1.2. The low level of consumer’s perceived in quality
Based on the result of brand health check in the second haft of 2018, respondents perceived
image of Vinamilk’s IFMP category as mainstream segment. In 2015, Vinamilk launched
Optimum Gold as the first brand of Vinamilk’s IFMP category in premium segment.
However, in premium segment, although Optimum Gold is a premium brand of Vinamilk’s
IFMP category, respondents also valued brand image of Optimum Gold as less premium
than other competitors in the same segmentation.
Vinamilk’s IFMP category seems to be less premium than foreign competitors in the same
segmentation. Mrs. Linh – a mother of 8th
months babies believes that:
After review functions of several types of milk powder, I believe in products that produces in European
and American would have higher quality than domestic products. As reviewed from several website,
the taste of Optimum Gold is slightly sweet and it is easy to cause constipation.
According to Zeithaml as cited by Alhaddad13
measured consumer’s perceived in quality
as the evaluation about overall products quality or superiority.
Firstly, as cited by Veale and Quester14
, previous studies stated that perception about
country of origin create basis of belief in consumers evaluate quality of products or
services.
Country of origin is one of key criteria for parents to select a IFMP product for their child.
Consumers also perceived IFMP’s products with foreign origin would have higher quality

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than domestic. Then, as a domestic product with Vietnam origin, consumer perceive
Vinamilk’s IFMP as lower quality than products with foreign origin.
Mrs. Linh – a mother of a 8th
months baby mentions that she cannot provide enough breast
milk for her baby after 6th
months after giving birth and backing to work. As the first time
being mother, she did not know how to choose an IFMP for my kid. After referring to
information from forums and information channels, some people suggest that she should
buy Japanese milk products like Meiji, Morianna, Wakodo, etc. for babies at home to use.
Meanwhile, some others advise she to use the line of Nan milk produced in cool Russia
does not cause constipation, similar to most breast milk, so the baby does not quit
breastfeeding.
Besides, consumer consistently use price as a predictor of quality, particularly when they
have limited knowledge of product category offerings. Lower price means lower quality
and less premium. Mrs. Linh – a mother of a 8th
months baby also stated that
After scanning information from several websites, I recognized that IFMP product with higher would
be better for development of babies. I decide to feed my baby with Nan OptiPro at price of 200,000
VND for tin 400gr a little higher than Optimum Gold 1 (~180,000 VND) but with higher quality.
As emphasized by Veale and Quester14
, when consumers have limited information about
products, they consistently use price as predictor of quality. Consumers also believe that
higher quality products are more expensive, whereas lesser quality products are cheaper14
.
To conclude, the low level of consumer’s perceive in quality in comparison with other
competitors in the same segmentation would be a potential problems leading to shifting in
sales revenue and change in share volume.
3.1.3. Market condition
IFMP is becoming increasingly saturation with the entry of numerous international players
over the review period. Only a few domestic manufacturers such as Vietnam Dairy
Products (Vinamilk) and Nutifood Nutrition Food stands out.

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Whilst the birth rates in key cities such as Ho Chi Minh city and Ha Noi have slowed, the
birth rate in rural areas is still growing, and represents potential demand for infant products.
Relevant nutrition to target specific target consumers will be necessary over the forecast
period, as consumers in rural and urban areas in Vietnam will have differing needs, and
manufacturers will need to adjust to tap into this demand.
Over the forecast period, the competition in baby food is expected to intensify, as
international players continue to enter the market and as domestic players fight for their
share of sales. Although local knowledge can provide domestic manufacturers with the
edge to succeed, knowledge without good execution and the necessary operations to
support products will not be enough to succeed in Vietnam, and manufacturers which have
expertise in both areas are likely to succeed over the forecast period.
Ms. N. T. T. Van – Marketing director of Vinamilk’s milk powder category stated that the
appearance of an electric breast pump makes breastfeeding more convenient. Many electric
breast pump can be easily purchased online or at Mom and Babies shops. Furthermore,
there are several activities encourage mom with breastfeeding.
Breastfeeding becomes a trend on social communication and the development of technology machines
enable mothers to breastfeed more easily.
To sum up, market condition with trend of breastfeeding and development of milk
substitutes product would impacts on sales revenue and volume share of infant formula
milk powder category. The picture of IFMP category’s competition would be more and
more intensive due to development of machinery and equipment like electric breast pump
facilitating mothers to feed their baby with breast milk. Simultaneously, consumers favor
other types of products that are convenient for external consumption would be challenge
IFMP’s manufacturers. Hence, markets condition with high competition from foreign
competitors, especially grass milk and Japan milk, and whilst birthrate would be one of
potential cause that lead to reduce in sales revenue and change in share volume.

26
3.2. Problems validation
IFMP category has a large contribution in the growth rate of milk powder. Although
Optimum Gold is leading in volume share in premium segmentation of Vietnam IFMP
market, negative symptoms of reducing sales revenue of milk powder and shifting from
powder milk to drinking milk and change in volume share play vital role to Vinamilk’s
IFMP growth. Then validation of the main problems among three identified problems
above plays a significantly role to propose possible solutions for Vinamilk.
3.2.1. Eliminating inadequate product’s recognition and market condition as main
problem
Regarding to inadequate product’s recognition, this issue is not a major problem leading to
reduce sales revenue of Vinamilk’s IFMP.
First of all, IFMP products are generally the same in terms of the most basic nutrients
needed. A IFMP product is produced under sterile conditions and tries to "copy" breast
milk through a complex combination of nutrients such as proteins (including animal and
plant proteins), sugar, and fat, essential vitamins and minerals.
The point of making the difference of the formula is in the ratio, the content of the
ingredients and some added supplements. For example, substances that benefit the
digestive system, increase height, develop intelligence: fiber, bacteria, DHA, ARA ... Most
formula brands add nutrients to their baby's intelligence: Omega3-fat is essential for brain
development and young eyesight. DHA is important for brain and retina development.
Furthermore, formula of Vinamilk’s IFMP consists of most basic nutrients needed and
adding supplements such as DHA, ARA, Luterin, … with foreign standard. Particularly,
brand Vinamilk Optimum Gold was researched and applied wide range of formulation
from European expert with UKAS certification
Mrs. B.T.Hang – Brand manager of Optimum brand acknowledge that:

27
Almost Vinamilk’s IFMP formulation was developed based on Vietnamese children condition.
Vinamilk also coordinated with Vietnam Nutrition Institute to conduct Clinical Nutrition test on
Vietnamese children. Optimum Gold formulation has lacto with ratio similar to breast milk.
Furthermore, Vinamilk also conducted FGD (focus group discussion) to ask consumer
about option adding HMOs and OPO. Currently, consumer still not clear about what is
HMOs or OPO and its function. According to Ms. Ha The,
Based on consumers' needs, they need fake manufacturers to tell them what nutrients are and the role
of nutrients in health. This is why the formula is good for your child. Currently, Vietnamese consumers
do not really understand the nutrient formulas contained in milk cans on their packages, and how to
maintain them when they buy milk for their children.
To sum up, the ingredients of infant formula milk powder is similar. It is differences in the
ratio of nutrients and some vitamins & minerals and supplements added.The product of
Vinamilk is suitable for Vietamese children’s condition. Moreover, most of Vinamilk’s
IFMP product has cooperate with Vietnam Nutritional Institute to conduct clinical tested
to verify benefit of product on Vietnamese children. Then, inadequate product’s
recognition would be eliminated as main problem.
For market condition, IFMP industry has recently showed signal of recovery thanks to the
contribution of premium and super premium segment. Need to make available high-priced
options to attract this group of buyers. Despite the supporting of technology, however, after
returning to work due to diet and stress in work, mothers gradually did not have enough
milk for their baby's meals. At this time, mothers must find solutions to use formula milk.
Therefore, market condition would be eliminated as main problems as well.
3.2.2. Illuminating low level of consumer’s perceived in quality as the main problem
Consumer behavior can be defined as the mental and physical activities that consumer look
for, purchase, use and evaluate goods or services to meet their demands15
. It relates to
thoughts and feelings people experience and action they perform including all factors
influence15
.

28
Consumer’s perceived in quality can be considered as perception of consumer on product
or service’s quality13
. According to Zeithaml as cited by Alhaddad13
also claims perceived
quality as one of component of brand value; then brand with higher perceived quality
would motivate consumer to buy rather than its competitors.
According to Aaker as cited by Alhaddad13
, brand image can be measured as a “set of brand
association that are anything linked in memory to a brand, usually in some meaningful
way”. Besides, Rio et al. also stated brand image as brand’s perception as reflected by the
impression of consumers about brand in their memory13
. Furthermore, brand image can be
defined as “a set of beliefs held about a particular brand”. Then, it takes a vital role in
consumer’s buying decision making process when finding alternative brands13
.
First of all, the rise of premiumisation has significant impact on consumer buying behavior.
Consumer are looking for premium and super premium products with special ingredients.
According to Mrs. B.T.Hang – Optimum Brand Manager also acknowledged that
Abbott relaunching Similar adding HMO and MeadJohnson relaunching Enfa with MFGM has
significant impact on the Vietnam IFMP.
Nielsen16
stated that premium products are experiencing strong sales growth around the
world. The competition to provide customers with higher quality items can be defined as
premiumisation. According to Nielsen report, premium perceptions are about more than
price and about 60% of FMCG categories in Vietnam are up-trading. It offers superior
function or performance.
According to Kantar worldpanel17
, the population is getting older and the group of families
with young children is getting smaller. The birthrate (crude) reduced from 18.6 in 2001 to
14.7 in 2017.

29
Figure 11: Birthrate (crude)/1000
(Source: Kantar World Panel’s report – Urban 4 cities Vietnam)
Ms. N.T.T. Van – Marketing director of Vinamilk’s milk powder category also stated that
Birth rate decreased (birth rate of 3 - 3.5 person/family) with only 1-2 children per family. Economic
conditions are getting better and better, then parents would be able to focus on investing in their
children. Parents want to give the best for the future generation.
Kantar Worldpanel’s report17
also stated that the percentage of household without kids
greater than 12 years old has increased since 2016 from 45% to 50% in 2018. On the other
hand, the percentage of household with child age less than 48 months and from 4 – 12 years
old has decreased. Then, group of family with kids has been gradually narrow.
Figure 12: Percentage of household (%)
(Source: Kantar World Panel’s report – Urban 4 cities Vietnam)

30
Then, as a domestic product, Vinamilk’s IFMP is perceived as less premium than foreign
products; especially products from Japan.
Furthermore, according to Decree 100 about baby food, ceiling price of domestic products
are limited in accordance with Vietnamese regulation. Then price of domestic products like
VInamilk’s IFMP is lower than foreign products; whereas, consumer also perceived lower
price mean lower quality.
To conclude, the rise of premiumization and narrow size of household family have
significantly impact on behavior of Vietnamese consumers. Consumers are looking for
more and more premium product to bring their only child the best thing. Then, the low
level of consumer perceived in quality is considered as the main problem that lead to
change in sales revenue and share volume of Vinamilks’ IFMP category.
3.3. Justify the importance of low level of consumer’s perceived in quality
To strengthen the importance of main problem, the research will propose some possible
consequences of the low level of consumer’s perceived in quality. Consumer’s perceived
in quality can be considered as perception of consumer on product or service’s quality13
.
According to Zeithaml as cited by Alhaddad13
also claims perceived quality as one of
component of brand value; then brand with higher perceived quality would motivate
consumer to buy rather than its competitors.
Mr. Chau Le – Brand Manager of Dielac Grow Plus and in charge of drinking milk powder
acknowledged that:
Premiumisation becomes the main trend in rural and urban areas. It is rising not only for powder milk
but also for drinking milk powder as well. According to price segmentation, consumption of powder
milk is rising in premium products, especially in rural areas. Consumption of premium drinking milk
powder is rising clearly in urban area.
However, the strengths of Vinamilk’s IFMP category are mainstream and specialty
segments. Ms. Thanh Van – Marketing director of Vinamilk’s milk powder category also
stated that

31
Currently, Vinamilk is strong in mainstream and specialty segments with such brands like Dielac Alpha,
Dielac Alpha Gold, Dielac Grow and Dielac Grow Plus. Revenue of those brands contributes 60% of
total sale revenue in 2018.
The rise of premiumisation has significant impact on the lower and upper mainstream
products of Vinamilk. Lower and upper mainstream contributes more than a haft of
Vinamilk’s IFMP sales revenue and volume. Mr. Chau Le – Brand Manager of Dielac
brand also gave his comments that:
Total IFMP sales volume decreased significantly comparing to 2017, especially for lower mainstream.
Premium segmentation is getting share volume from mainstream in rural areas and modern trade.
According to report of Kantar worldpanel17
, volume share of IFMP category in Urban 4
cities and Rural Vietnam change among economy, medium and premium segments for both
powder milk and drinking powder milk. Share volume of premium segment increased
while medium segment decreased compare to the year 2017.
Figure 13: Volume share
(Source: Kanta Worldpanel’s Urban 4 cities and Rural Vietnam)
competitors invest more in the premium and super premium segment and less in the
mainstream segment.

32
Dutch Lady green – a brand in mainstream segment of FrieslandCampina Vietnam has almost
disappeared from the market. Nutifood has changed their brand image by launching infant milk powder
brand Riso Opti Gold which has higher price than its current products poforlio.
Hence, Vinamilk’s competitors are changing their product’s portfolio and upgrading their
brand image to meet consumer’s need and want. Ms. Ha The also stated that
Price of the item in the premium segment is higher than price of product in mainstream segment. Along
with a human resource, staffs and shops are willing to pay more attention to sell a premium product
rather than many products in mainstream segment
To sum up, the rise of premiumisation challenge Vinamilk IFMP category to compete with
premium and super premium from foreign producers. According to Nielsen4
, premium
perceptions are about more than price. Consumers are also looking for high quality
ingredients and superior function to evaluate a brand is premium or not. Consumer
perceived Optimum Gold as less premium than Similac of Abbott and Nan of Nestle may
lead to reduce in sales revenue and volume of share.
Figure 14: IFMP Volume share – Price segmentation (2017 – 2018)
(Source: Nielsen report)
Mrs. B.T.Hang – Brand Manager of Optimum brand stated that consumer looks for more
and more premium product year by year.

33
According to price segmentation, Optimum Gold is consider as premium products and competed direct
to other premium and supper premium brands. The second haft of 2018, volume share of premium and
super premium increased in rural areas due to the rise of Abbott and MeadJohnson.
Therefore, the low level of consumer’s perceived in quality plays an important role to
figure out the main problem of changing in sales revenue and volume share of Vinamilk’s
IFMP category. Ms. N.T.T. Van also mentioned that
Total revenue of IFMP category in Vietnam is about 900 million USD. Premium and super premium
segments accounted for 60%. Increasing income helps to strengthen premium segment when more
premium products are consumed. This trend continues to be developed in the next years, along with the
need of upgrading the consumers’ quality of life.
3.4. Potential causes
The central problem could be caused by following reasons: less reliable source of
information and less visibility in high-end segmentation.
3.4.1. Less reliable source of information
Previous study has shown interest in consumer behavior and consumer’s buying decision
making process for long decade. In general, consumers would experience through five
stages in making purchase decision including need recognition, information search,
evaluation of alternatives, purchase and post purchase evaluate15
. The consumer decision-
making process can be described as the phases that consumers go through in making a final
purchase decision. The task of a marketer is to focus on the whole purchasing process
instead of emphasizing solely on a purchase decision, because consumers experience
different phases before reaching a conclusion. In this model, stage 2 “information search”
would be the most important stage for today’s customers.
Stage 2 – Search for information plays an important role in making decision for parents,
especially new parents. Consumers will decide how much information is needed by
searching around via social media as a platform where explicit knowledge flow occurred
when someone commented on the piece of information15
.

34
Figure 15: Consumer’s buying decision making process
Mrs. Linh also mentioned that before making decision she also get advice from friends.
As recommendation of my friends, they often refer me to use foreign products like Friso, Nan, …
Besides, I often search for information on forums and social to hear how other mothers take care of
their children.
Hence, less of reliable source of information would be one of potential causes that lead to
the low level of consumer perceived in quality.
3.4.2. Less visibility in high-end segmentation
According to Nielsen Report18
, in urban area, sales revenue of fast-moving consumer goods
(FMCG) in modern trade channel reached double-digit growth of 11.3% in quarter 2 of
2018, outperforming traditional trade which was up 1.6%. The report also stated that health
and wellness is a top-of-mind priority for Vietnamese consumers which also has been
mentioned as important previously. Nowadays, shoppers have a tendency to look for high-
quality products or trusted brands in modern stores. Then, companies must be aware of
changing consumption patterns in the country to propose suitable distribution channel for
their products.
Furthermore, Nielsen19
also emphasize that with the fastest growing of middle class in
Vietnam, demands of parents in purchasing products for their kids would be higher in both
of quantity and quality. When the market is saturated, source of growth would be driven
by innovation and high-end products. Recent year, the rise of “Mom & baby” shop like
Concung, Bibo Mart and Kid Plaza provides parents a chance to find high-quality products
for their baby. Nilsen20
report stated that number of stores in mom and baby channel grew
32% in 2018 compare to 2018. Concung’s store increased significantly with 121 new stores

35
to strengthen its top positions. Kid plaza also expands its presence by opening two new
store.
Figure 16: Number of mom & baby stores
Source: (Nielsen report)
According to Kantar Worldpanel report16
, mom and baby shops become the first shopping
channel for mothers to purchase the first products for their kids.
Figure 17: Percentage share of occasions shopping (2017-2018)
Source: (Kantar Worldpanel)

36
Moreover, Nielsen3
report states that less SKU (stock keeping unit) in store then it is
challenge for IFMP company to select main products.
Mrs. T.T.Ha – Sales manager of milk powder category acknowledge that
Less SKU in store. Foreign companies launch drinking milk powder but store does not have more SKU.
High-end store like “Mom & babies” shop will tend to display foreign products which are segment as
premium and super premium.
In specialized stores, powdered formula and liquid milk form the majority of market share.
And in these 2 categories, specialized stores expand their markets well, especially
accounting for a large proportion in IFMP category.
Figure 18: Infant formula milk powder buying behavior
In conclusion, for infant formula milk powder, consumers would tend to choose products
at higher price segment5
. Then, less of visibility in modern trade, especially mom and
baby shop would be potential cause for the low level of consumer’s perceived in quality.
Mrs. T.T.Ha – Sales manager of milk powder category acknowledge that

37
The amount number of product Vinamilk IFMP can list into this channel still limited. Some channel of
“Mom & Babies” shop product do not display Vinamilk IFMP product.
Besides, foreign products also display on popular website e-commerce like Lazada, tiki.vn,
Shopee with hot promotions and discount. That give consumers more chance to purchase
high-en product with lower price.
Figure 19: Shopping occasion in 2018
Hence, less visibility in modern trade would be potential cause of the low level of
consumer’s perceived in quality.
3.5. Cause validation
First of all, according to IHV in 2018, one of the important source of information for new
parents to find first product for their babies is recommendation of health care professional
(HCP). HCP have an important support role to assist the parents in solutions that will
protect the baby by advising the best nutrition for baby with a pure formula, super high
quality formula, closest to breast milk to fulfill all the essential needs. They need to find
proper protection to recover all of the lacking nutritional components for babies. Then,

38
HCPs would prefer to recommend for brand that they have more understanding and
familiar. Mr. Luc Nguyen – National medical field force manager at Vinamilk stated that
Medical field force team of Vinamilk was established in 2013 with mission detailing information and
quality of Vinamilk milk powder products to medical staff. However, other competitors like Abbott,
MeadJohnson, Nestle, … also have medical field force team with more experience and strong
relationship with more medical staff than Vinamilk.
Besides, recommendation of friends and family also contribute vital role to consumer
purchasing decision.
Vinamilk increasingly focuses on digital investment.
Fanpage Vinamilk baby care has large amount number of followings and high interaction. However,
currently Vinamilk’s fanpage and landing page are being used for all brands in infant formula.
Birth rate decreased (birth rate of 3 - 3.5 person/family) with only 1-2 children per family.
Economic conditions are getting better and better => focusing on investing in children -
the future generation gets better and better. In the future, parents will definitely be willing
to invest in their children with the best things - good quality and reasonable prices (high
quality and reliable products). Fathers and mothers have not had much experience in caring
for their first baby, they often seek information and advice from anywhere such as from
HCPs, family, friends, and social …
To sum up, due to development of technology, trend of shopping online become more and
more popular then people don’t need to come to physical shop to buy product. According
to consumer purchasing decision making process, source of information happen before
purchasing. Therefore, less reliable source of information would be selected as one of the
most cause problems at current situation and should be prioritize to solve first.
3.6. Cause – and – effect tree

39
Figure 20: Cause – and – effect diagram
Two main factors caused low level of consumer’s perceived in quality of Vinamilk’s IFMP
consists of less reliable reference or source of information and less visibility in modern
trade like Mom & Babies shop and e-commerce such as Lazada, shopee, tiki, …
4. ALTERNATIVE SOLUTIONS
The low level of consumer’s perceived in quality is vital issue that Vinamilk’s IFMP
category has been facing recently. According to previous analysis, it could be seen that the
main cause of the low level of consumer perceived in quality of Vinamilk’s IFMP category
is the less reliable reference for parents. In order to solve the biggest factor causing the low
level of consumer perceived in quality, Vinamilk’s IFMP category decision makers also
has their own solutions. These solutions also has been impacted on changing situation but
did not significantly changed the situation. Then, this part would focus on offering possible
solutions for solving the main problem.
As emphasized by Daugherty and Hoffman21
,word-of-mouth (WOM) has proven to play a
major role in affecting consumer buying behavior by influencing consumer choice. As cited
in Armelini22
study, Aaker defined perceived quality as subjective perception of a person

40
with respect to brand attibutes. Consumer’s perceived in quality has been measured as
related to price premium, price flexibility and the utilization of brand22
. WOM can impact
the product judgment either positive or negative. Then, in order to positive influence
perceived quality, WOM would be positive. Besides, due to development of technology
and web-based, WOM can be divided into traditional word of mouth (WOM) and
electronic word of mouth (eWOM). Therefore, the potential solutions should be considered
to implement for enhancing consumer perception about quality of Vinamilk’s IFMP
including: building strong positive traditional word-of-mouth and building strong
electronic word of mouth through social media.
4.1. The first alternative solution: building strong positive traditional word of mouth
According to Arndt as cited by Susilowati and Sugandini23
, traditional word of mouth can
be measured as an oral communication person-to-person when looking for advice on a
particular product or service.
In general, traditional Word-of-Mouth (WOM) can be considered as recommendation from
Health Care Professional (HCP) and recommendation from families and friends. One of
reliable source of reference is the consultant from medical staffs or doctors.
Mr. Luc Nguyen – Medical field force manager judged that during pregnancy period, there
are many things to worry about both for HCPs and parents. One of the most important thing
is to be prepared in case of C-section. In Viet Nam, high caesarean birth rate in obstetric
hospitals accounts for 60-70% of total deliveries. Then, lot of infants lack the necessary
bacteria compared to normal babies, this make their immunity system weaker and more at
risk of disease or digestion troubles. Therefore, if the mother can’t provide breast milk to
her child, the baby is missing essential protection necessary for his well-being. Failing to
be able to provide a secure environment, the parents need a surefire solution. As
emphasized by Mr. Luc Nguyen,
Recommendation from doctors or medical staffs would has strong impact of parent decision to buy or
not. Sharing from pediatric doctors and nutrition expert would have significant impact on decision of
parents.

41
In order to expertise can be able to trust in our product and refer to their patients, it plays a
vital role to interact and share detail about ingredients, nutrient in our products to HCPs to
help them understand about quality, ingredients, … to be confident to recommend for their
patients. Therefore, transforming HCPs expertise become brand ambassador would help
Vinamilk to create a reliable source of information.
Besides, establishing partnership with mom and baby channel and organizing the training
workshop for staffs of big channel mom and baby shop like Concung, BiboMart, Kid Plaza.
Each salesman at those mom and baby shops would be a brand ambassador and would be
equipped with nutritional knowledge to share for their customer.
Finally, organizing activation program at modern trade like supper market and hyper-super
market to approach a wide range of consumers.
- Inviting doctors and nutritional expertizes consult at activation booth
- Let consumers use trial products and share opinions about their experience
Accordingly, benefits and costs when building/ strengthen strong positive traditional word-
of-mouth are described as bellows:
Benefits:
- Doctors and psychologist would endorse for scientific information related to product
and communication concepts
- Build a reliable source of information from the beginning of need
- Transform each salesman become a brand ambassador and an expertise in nutrition
- Approach a wide range of consumer
- Build professional and premium image
Costs:
- Cost of human resource support for training program
- Cost of training staff and approaching expertise, HCPs
- Cost of training staffs of mom & baby shop like ConCung, BiBoMart and Kids Plaza

42
- Cost of organizing activation in supermarket
Table 7: Estimated cost building strong traditional Word-of-Mouth
# Activities Total cost
1 Approaching HCPs 1,810,000,000
Traning medical fieldforce staff 580,000,000
Group presentaion 1,080,000,000
Venue 900,000,000
Point of sales material (POSM) 180,000,000
Human resource -
Detailing 150,000,000
POSM 150,000,000
Human resource -
3 Training staff of mom & baby shop 2,013,000,000
Venue 840,000,000
Lecturer 750,000,000
Pediatrics expert 120,000,000
Psychology expert 423,000,000
MC 60,000,000
Personal income tax 67,000,000
Travel cost for expert 80,000,000
Door Gifts + Mini game gifts 195,000,000
Sales tool kit 150,000,000
Standee 6,000,000
Sampling 12,000,000
Other 60,000,000
4 Activation modern trade 3,588,215,742
Idea - design 306,000,000
Venue 493,000,000
Produce POSM 674,350,000
Technology (Sound, light, LCD, Ipad, …) 611,000,000
Program 87,000,000
Human Mangement 319,988,889
Logistics 156,400,000
Other 264,773,889
Management fee (12%) 349,501,533
VAT (10%) 326,201,431
TOTAL ESTIMATED 7,411,215,742

43
4.2. The second alternative solution: building the strong positive electronic Word –
of – Mouth through social media
In general, electronic word of mouth (e-WOM) is the extension of WOM on the internet
platform. According to Park et al.24
, differ from activities in traditional WOM,
communication in e-WOM happens on an online platform. Henning-Thurau et al.25
demonstrate eWOM as any positive or negative judgement proposed by potential, actual,
or former consumer about a product/service or an enterprise, which would be shared to a
large number of people through Internet.
e-WOM consist of social media like Fan-page on Facebook, Google Search Optimize
(SEO), Baby blogs or parenting websites, … A number of studies can be found in the
literature about social media and its effects on consumer buying decision. Kaplan and
Haenlein26
investigated the challenges and opportunities experienced in marketing through
social media. The study indicated that the social media could be used as an opportunity in
understanding the consumer decisions making process.
Social media is a virtual place which can be Blogs and different websites are used by
individuals or companies to share about them and their products trough internet26
. Kaplan
and Haenlein26
conceptualized social media as an internet-based program that provides a
platform for consumers to express their own opinions, share information and past
experiences by using different social networks, blogs and other content areas. Then through
social media consumer can be easily accessed a huge number of data in order to evaluate
all the alternative solution.
Ms. Thanh Van also acknowledge that it is crucial to build premium image of Vinamilk’s
IFMP on social media in order to increase the level of consumer’s perceived in quality. It
play an important role to develop communication on social media through cooperating with
KOLs creates positive influence contents. The role of KOLs woud be creating discussions
about brands, participating in events and creating word-of-mouth for mom communities,
increasing brand recognition and increasing level of consumer’s perceived in quality about
Vinamilk’s IFMP. Ms. Thanh Van acknowledged that

44
Vinamilk should invest more on digital. Begin with orienting and building the KOLs community has
strong influence on consumer to use and believe in quality of Vinamilk’s products. In order to attract
attention of consumers, Vinamilk need to create mass awareness of Vinamilk’s IFMP category.
The concept of key opinion leader (KOL)27
, also known as an "influencer", is a person or
group of people who has expert product knowledge with relatively broad influence on
social community. They are often divided into three main groups: VIPs/Celebrities (famous
people), Professional Influencer (who have the image) and Citizen Influencer (People in
the online community often share experiences, have high likes and follow turns).
Furthermore, Potter and Stapleton28
defined the target audience as the group that
practitioners want to reach through their bystander prevention and intervention strategies.
Or to be more precise, target audience is a specific group of people with shared
characteristics who are the most likely to be interested in our products. The first and
foremost important is to have a narrow focus in defining who the members of the target
audience are, as it is unrealistic to expect that one bystander prevention strategy will
resonate with all members of an entire geographic community28
. Ms. Thanh Van claimed
that after creating mass awareness, Vinamilk need to focus on a specific group that have
baby and looking for premium product for their baby. Ms. Thanh Van also stated that:
It is easy to approach the target audience; however, how can we influence those target audience is really
challenges.
To sum up, a social campaign would be conduct to build brand image of premium and
increase the level of consumer perceived in quality about Vinamilk’s IFMP products. The
campaign would consist of three phase: phase 1 – creating strong viral effect, phase 2 –
focus on target audience and phase 3 – connect by true and close story.
Phase 1 – Creating strong viral effect: The campaign would begin with organizing scientific
symposium with the participation of KOLs like:
- Doctors who has good expertise and prestige in pediatrics field
- Celebrity who have child from 2 – 4 years old with more than 100,000 followers and
more than 10,000 engagement. Besides, celebrity is not brand ambassador of any IFMP
brand

45
After symposium, celebrity would use all materials from symposium to create discussion
content on social. Besides, cooperating with leading doctors and experts on nutrition for
children to increase the reliability and science of products. Then, through those activities
to increase the reliability of premium and super premium of Vinamilk IFMP
Phase 2 – Focus on target audience: After explosive period on a large scale, this stage
would focus on the right consumers including inviting experts in pediatrics and
psychology, celebrity and hot mom (parents who have child from 2 – 4 years old, live in
Vietnam and have more than 2,000 followers, more than 200 engagement) to join workshop
and talkshow.
Phase 3 – Connect by true & close story: This phase would focus on creating or connecting
with mom community to create word-of-mouth and sharing experience.
- Establish group facebook for parents interaction, livestream, …
- Using hot mom to share and inspire their story about taking care of their child
- Sampling on digital and hot mom sharing experience for their kids using product
- Interact with mom community on facebook to share true story about using product
- Hot fanpage: using sample & sharing experinces to social community
- Invite celebrity to use sample for their kids and sharing story
Besides, continue building strong fanpage Babycare, landing page and Youtube channel
for each segmentation (mainstream, premium and super premium).
Accordingly, benefits and costs when building/ strengthen strong positive electronic word-
of-mouth through social media are described as bellows:
Benefits:
- Create discussion about product identification and reliability of premium and super
premium IFMP of Vinamilk on social networks.
- Using celebrities would help to build mass awareness through huge followers
- Using hot mom and mom’s community would help to build brand trust and viral WOM
to followers community through their true and close story
- Reaching potential consumers in premium and super premium segment

46
- Increasing brand recognition and level of perceived quality of consumer about
Vinamilk’s IFMP
Costs: Breakdown of building the strong positive word-of-mouth indicates
Table 8: Estimated cost for building strong e-WOM through social media
# Phase Activities Total cost
I Phase 1 1,272,777,778
1 Organize scientific symposium 967,222,222
Operation 400,000,000
KOLs 500,000,000
Seeders 10,500,000
Personal income tax 56,722,222.22
2 Youtube clip + Facebook post 611,111,111
II Phase 2 838,888,889
1 Workshop livestream 494,444,444
MC 20,000,000
Expertise 65,000,000
KOLs 180,000,000
2 Talkshow livestream 344,444,444
MC 20,000,000
Expertise 65,000,000
KOLs 180,000,000
III Phase 3 1,298,222,222
Facebook group 114,666,667
Hot fanpage 162,222,222
Hot mom 1,021,333,333
IV Report 103,000,000
Before campaign 15,000,000
During campaign 70,000,000
After campaign 18,000,000
V Other 1,023,000,000
Tutorial clip 215,000,000
Post content 636,000,000
Post design 22,000,000
Sampling for hotmom 112,000,000
Sampling facebook group and
community
3,000,000
Transportation cost 15,000,000
Filter data & select to send sampling 20,000,000
Estimated 4,535,888,889
Management fee 12% 544,306,667
VAT 10% 508,019,556
TOTAL (INCLUDED VAT) 5,043,908,444

47
4.3. Solution justification
In summary, based on the two solutions presented above, it is very valuable and practical
to choose the best solution to implemented action plans for Vinamilk. Then, the central
problem should be solved immediately to improve the level of consumer perceived in
quality of Vinamilk’s IFMP category.
According to above alternative solutions, it is crucial to validate and choose the best. Either
reliable source of information or visibility in modern trade play an important role to
consumer’s perceived in quality. As mentioned in previous part, consumer buying decision
making process consists of five step. Reliable source of information would impact on step
2 – information search and step 3 – Evaluate alternatives; whereas, visibility in modern
trade would impact on step 4 – purchase. Strengthen reliable source of information should
be prioritize to implement right now.
Bickart and Schindler29
summarized that traditional WOM include spoken words chat with
one friend or family in a face-to-face communication. On the other hand, eWOM often
relates individual experiences and sharing ideas in written form which help people to search
for information in their own way29
. According to Bickart and Schindler29
, the written
communication would be more logical than oral form. Then, Phelps et al.30
claimed that
due to its speed, convenience, multiple reach, and less pressure from face to face
communication, eWOM is more powerful in comparison with traditional WOM.
According to Ms. Thanh Van, due to limitation in human resource and budget, traditional
WOM can reach less amount number of consumer than eWOM. Furthermore, when
comparing between costs and benefits of two solutions, eWOM is better than traditional
WOM by bringing more benefits at lower costs.
In conclusion, the previous study also clarify the advantage of eWOM compared to
traditional WOM. Besides, in comparison between benefits and costs of two alternative
solutions, eWOM creates more benefits and lower cost than traditional WOM. Therefore,

48
the second alternative solution – building a strong positive electronic word-of-mouth
through social media should be prioritized to implement first.
5. ACTION PLAN IN ORGANIZATION
In the early of June 2019, Vinamilk’s IFMP has launched its first product in super premium
segmentation – Vinamilk Organic Gold to fulfill its portfolio. Vinamilk Organic Gold is
the first milk powder produced domestic with European Organic standard in Vietnam.
Based on above findings and theories informed, together with limitation of time, resources,
budgets and consideration of long term benefits; Vinamilk’s IFMP category needs to take
some proposed actions for project launching product in super premium category. Then, a
detailed action plan taking five months from August, 2019 to January, 2020 will be clearly
scheduled and depicted as Table bellows.

49
Process Activities Objectives Person incharge Timeline
Preparation
Proposed dea for general campaign
Get approve for budget and overall
campaign
brand team Week 1 - Aug/2019
Briefing digital team
Describe need and demand of brand
team
brand team W1 - Aug/2019
Briefing agency
Describe need and requirement of
Vinamilk
brand team & digital team W1 - Aug/2019
Proposal submission
Propose overall strategy, exceution,
management and commitment KPI
agency W3 - Aug/2019
Presenting date Select agency brand team & digital team W4 - Aug/2019
Report before campaign
Identify key success factors of
campaign and get approve for social
KPI
Agency W4 - Aug/2019
Phase 1
Creating strong viral
effect
Organize scientific symposium
Build professional and scientific
image
Agency & Vinamilk team
Doctors (good expertise & prestige)
Celebrity KOLs
(Followers > 100,000, Engagement > 10,000)
W1- Sept/2019
Post facebook to share experience
participating in symposium
Build mass awareness
Celebrity KOLs
(Followers > 100,000, Engagement > 10,000)
W1- Sept/2019
using products
W1 - W4 Sept/2019
Make short clip on Youtube about
childcare
W1 - W4 Sept/2019

50
Process Activities Objectives Person incharge Timeline
Phase 2
Focus on target
audience
Organize workshop & livestream to
consult child psychological
- Build mass awareness
- Build brand trust to target audience
- Viral Word-of-Mouth to follower
Celebrity KOLs
(Followers > 100,000; Engagement > 10,000)
Hot mom
(Parents (Child 2 - 4 age), live in Vietnam,
Followers >2,000; Engagement >200)
W1 - Sept/2019
participating in workshop
Celebrity KOLs
Hot mom
W1 - W4 Sept/2019
Organize talkshow about children
nutrition
Celebrity KOLs
Hot mom
W4 - Nov/2019
participating in talkshow
Celebrity KOLs
Hot mom
W4 Nov - W3 Dec/2019
Phase 3
Connect by true &
close story
Sampling on digital
- Create closely WOM
- Build brand trust based on story of
using product
Hot mom
Mom community on facebook
W1 Aug - W4 Dec/2019
Create post about product on
Facbook's group
Create Youtube clip sharing
experinence about taking care of
their child
Seeding on Mom & baby community,
forums
Seeding in related topic W1 Aug - W4 Dec/2019
Report &
Evaluation
Monthly report
- Measure efficiency during campaign
- Summary report monthly
- Propose suggestion & direction
Agency
Monthly
from Aug - Dec/2019
Final report of all campaign
- Summary data
- Evaluate performance of campaign
- Analyse efficiency & lesson learned
Agency Week 1 - Jan/2019

51
6. CONCLUSION
Vietnamese baby product category has a huge potential source of growth. Particularly,
Vietnamese IFMP market also has increased rapidly since 2015. The research with the
topic “Improving the low level of consumer’s perceived in quality: a case of Vinamilk
infant formula milk powder category” has stated some points as below:
First of all, symptoms of shifting in sales revenue and changing in volume share of
Vinamilk’s IFMP category has been clarified through analysis of collected data from
Vinamilk’s internal report, marketing department and sales department and previous
statistics studies.
Secondly, there are several problems leading to above symptoms were proposed such as
inadequate product’s recognition, the low level of consumer’s perceived in quality and
market condition. However, after processing of identification and validation, the low level
of consumer’s perceived in quality are proved as main problems among three factors.
Furthermore, potential causes lead to the low level of consumer’s perceived in quality are
validated as less reliable source of reference and less visibility in high-en segmentation like
Concung, Bibo Mart, Kids Plaza, supermarket and hyper supermarket, … Then, less
reliable source of information would be proposed as the main cause that lead to the central
problem of the research.
Finally, alternative solutions also proposed to improve the level of consumer perceived in
quality of Vinamilks’ IFMP such as building strong traditional word of mouth and building
the strong positive word-of-mouth on social media. Then, an action plan should be
scheduled to implement solution “building strong positive electronic word-of-mouth
through social media”.

52
SUPPORTING INFORMATION
Two types of data applied in this study are primary data and secondary data. Secondary
data was collected from previous report and study. These data helped reinforce academic
theories, provided information from interviews and current situation of Vinamilk’s IFMP
category. Besides, primary data was collected from qualitative research by conducting in-
depth interview. Interviewees were divided into three main groups as below:
- The first group includes two respondents who are currently working at Vinamilk as
medical field force team.
- The second group includes sales and marketing managers in IFMP category such
as: Ms. Ha The – Sales manager of milk powder category, Ms. Hang Bui – Vinamilk
Optimum Gold Brand Manager, Mr. Chau Le – Dielac Brand Manager and Ms.
Thanh Van – Marketing director of Vinamilk’s milk powder category.
- The third group are customers who accepted to buy Vinamilk’s IFMP category and
who refused to purchase.
The in-depth interview was conducted to collect general data and opinions of interviewees
about shifting in sales revenue and change in share volume of Vinamilk’s IFMP category
and their suggestions. All questions that respondents in each group have been asked as
follows:
INTERVIEW GUIDE
Research objective: To investigate the problem leads to decrease in sales revenue, sales
volume and change in share volume of Vinamilk IFMP, what is the main cause and propose
the most appropriate solution to solve it.
Duration: 10 – 20 minutes
Overall discussion framework:

53
# Key sessions Objectives Timing
1 Overall background
To understand the current situation of
Vinamilk’s IFMP category
2 – 3
minutes
2
Explore the crucial
problem and define main
cause
To explore the crucial problem that lead to
low sales result symptom, find out the
main cause of problem
5 – 10
minutes
3 The solution To find out the most appropriate solution 5 – 10
minutes
Detail interview content:
# Question
First
group
Second
group
Third
group
1
Could you please introduce about yourself
(Your name, age, working experience)
x x x
2
What do you think about Vinamilk’s IFMP
position in Vietnam market?
x x x
3
Could you share the reason why you refuse to buy
or decide to buy a product of Vinamilk IFMP?
x
4
Can you share your opinion about business result
of Vinamilk’s IFMP?
x x
5 Could you share the reason why it changed? x x
6
In your point of view, what is the most important
problem that leads to change of sale revenue and
volume share?
x x
8
What do you think about the consequences of the
problem? Why?
x x
10
What are the cause of the problem? And which is
the most important cause among them?
x x
11
What are solutions that company should do to
improve sales revenue and share volume?
x x
12
What are your opinions about the effectiveness of
above solutions? Could you share any alternative
you think should be taken to solve this problem?
x x

54
QUALITATIVE RESEARCH
Duration of each interview: 10 – 20 minutes
Address: 10 Tan Trao, Tan Phu, Dist. 7, HCMC
In-depth interview 1:
Interviewer: Nguyen Thuy Van
Interviewee: Ms. Thanh Van
Title: Marketing director of Vinamilk’s milk powder category
Age: 42
Working experience: More than 16 year experience in Marketing, brand management in
fast moving consumer good (FMCG)
Status: current working for Vinamilk as Marketing director
N.T.Van: Morning. Could you introduce something about yourself and the position you
are working in this company?
N.T.T. Van: Hi. My name is Van. I have joined Vinamilk since. I used to work at Nestle
Vietnam and Kimberly Clark Vietnam as Senior brand manager of premium and super
premium brands.
Van: What do you think about Vinamilk’s IFMP situation in Vietnam market?
Thanh Van: Vinamilk is a leading nutrition company in Vietnam for many years. In term
of market share of total IFMP category (including powder milk and drinking power milk),
Vinamilk still holds the leading position. Vinamilk is a domestic manufacturer providing
Vietnamese consumer with suitable price. However, nowadays, Vietnamese consumer is
gradually upgrading to premium and super premium segment. It would be opportunity and
challenges for Vinamilk in the next few years.
Van: Can you share your opinions about business result of Vinamilk’s IFMP?

55
Thanh Van: Sales revenue of powder milk has decreased, while sales revenue of drinking
milk powder has increased and volume share change among price segmentation –
consumer is upgrading from mainstream to premium and from premium to super premium.
Van: Could you share the reason why it changed?
Thanh Van: Change in consumer buying behavior: breastfeeding trend, out-door
consumption and looking for more and more premium products.
Van: In your point of view, what is the most important problem that leads to change in sale
revenue and volume share?
Thanh Van: Tendency of upgrading trend may be the most important problems that leads
to this changed. Recently, birthrate decreased with only 1 -2 children/ family then each
family has from 3 to 3.5 persons. Their economic conditions are getting better and better,
then they would have more condition to take care of their child with the best of nutrion.
Van: What do you think about the consequences of the problem? Why?
Thanh Van: Total revenue of IFMP category in Vietnam is about 900 million USD.
Premium and super premium segments accounted for 60%. Increasing income helps to
strengthen premium segment when more premium products are consumed. This trend
continues to be developed in the next years, along with the need of upgrading the
consumers’ quality of life.
Currently, Vinamilk is strong in mainstream and specialty segments with such brands like
Dielac Alpha, Dielac Alpha Gold, Dielac Grow and Dielac Grow Plus. Total revenue of
those brands contributed about 60% to total sales revenue of Vinamilk’s IFMP category in
2018.
Besides, market share of competitors in premium and super premium segment is increasing
whereas reducing in the mainstream segment. For example, Dutch Lady green – a brand in
mainstream segment of FrieslandCampina Vietnam has almost disappeared from the

56
market. Nutifood has changed brand image by launching Riso Gold higher price than its
current products. Then, our competitors are changing and upgrading.
Van: What are the cause of the problem? And which is the most important cause among
them?
Thanh Van: As I mentioned before, nowadays, Vietnamese consumer is gradually
upgrading to premium and super premium segment; however, their perception about
Vinamilk’s product is economy and medium. Although, Vinamilk Optimum Gold is a
brand of Vinamilk’s IFMP in premium segment, consumers may perceived it as a
mainstream as other product of Vinamilk.
Vinamilk is strong in communication on TVC; but consumers who are mom from 22 – 30
years old with high income would be missed in TVC channel. Vinamilk also increasingly
invest for digital marketing several years ago. Since 2017, Vinamilk has built a fanpage for
IFMP category with a large number of follower and high interaction, but all of brand in
Vinamilk’s IFMP from mainstream to premium would be promote all this website. This
would make consumer mislead. Besides, concept of those activities still simple and just
reach some parts of consumer on social.
Van: What are solutions that company should do to improve sales revenue and share
volume?
Thanh Van: Invest more for digital platform. It is crucial to build premium image of
Vinamilk’s IFMP on social media in order to increase the level of consumer’s perceived in
quality. Vinamilk should build a strong positive KOLs/influencer with high level of
influencing including celebrity, professional, expertise, hot mom and mom community.
Begin with orienting and building the KOLs community has strong influence on consumer
to use and believe in quality of Vinamilk’s products. In order to attract attention of
consumers, Vinamilk need to create mass awareness of Vinamilk’s IFMP category.

57
Secondly, Focusing on target audience. Vinamilk need to focus on a specific group that
have baby and looking for premium product for their baby. It is easy to approach the target
audience; however, how can we influence those target audience is really challenges.
Van: What are your opinions about the effectiveness of above solutions? Could you share
any alternative you think should be taken to solve this problem?
Thanh Van: Increasing engagement and recognition on social, then increasing the level of
consumer perceived in quality. Besides advertising on digital platform, training staff about
products is also important as well. We need to increase the representative of premium brand
in modern trade and mom & baby shop where premium mom often look for premium
product.
Interviewee: Ms. Hang Bui
Title: Brand Manager of Brand Vinamilk Optimum Gold
Age: 33
Working experience: Nearly 4 year experience in Vinamilk
Status: current working for Vinamilk as a brand manager
Hang Bui: Hi. My name is Hang. I have joined Vinamilk since 2016 as a brand manager
of brand Dielac Alpha and Dielac Alpha Gold. After that, in 2018 I moved to brand
Vinamilk Optimum Gold.
Van: What do you think about Vinamilk’s IFMP position in Vietnam market?

58
Hang Bui: As a brand manager of Vinamilk Optimum Gold – a product in premium
segment of Vinamilk, I believe that it is the right strategy to upgrading image of Vinamilk’s
IFMP category in consumer’s perception. Although Almost Vinamilk’s IFMP formulation
was developed based on Vietnamese children condition.
Vinamilk also coordinated with Vietnam Nutrition Institute to conduct Clinical Nutrition
test on Vietnamese children. Optimum Gold formulation has lacto with ratio similar to
breast milk. Vietnamese people have a tendency to use product with foreign origin.
Furthermore, in consumer’s perception of high-en segment, our product with domestic
origin and lower price than our foreign competitors like Nestle, Friso, Abbott, … are
consider as a economy and medium products.
Hang Bui: Sales revenue of power category has decreased since 2016 and volume share
also changed among price segmentation.
Hang Bui: As I mentioned before Vietnamese consumer now looking for something more
premium and their perception about our product still low, then they would switch to use
other.
Hang Bui: In my opinion, consumers are looking for more and more premium product. In
their perception premium may be higher price, or adding some new and significant
ingredients. For example, Abbott relaunching Similar adding HMO and MeadJohnson
relaunching Enfa with MFGM has significant impact on the Vietnam IFMP and consumer
mind.
Furthermore, you also can see the upgrading in consumer buying behavior year after year
as well. In 2017, consumer switched from lower mainstream to upper mainstream. In 2018,

59
they switched to premium and super premium segmentation. According to price
segmentation, Optimum Gold is consider as premium products and competed direct to
other premium and supper premium brands. The second haft of 2018, volume share of
premium and super premium increased in rural areas due to the rise of Abbott and
MeadJohnson.
them?
Hang Bui: I think that it would be the source of information. Nowadays, parents care more
about nutrition for their baby.
volume?
Hang Bui: In my opinion, we should pay more attention to digital to approach wide range
of consumers.
Hang Bui: Investing for digital would have us to approach more consumers at the same
time. It would have us to build mass awareness through a huge number of social
community. Besides, we should increase our visibility in modern trade as well. I think we
should combine online communication and offline visibility to approach our target
consumer on every channel.
Interviewee: Mr. Chau Le
Title: Brand Manager of Specialities
Age: 30

60
Working experience: More than 4 year experience in Vinamilk
Status: current working for Vinamilk as a brand manager
Chau Le: Hi. My name is Chau. I have worked at Vinamilk since 2015 as an assistant
brand manager of brand Dielac Grow Plus. Since, I have been promoted to the position as
brand manager of Specialty including brand Dielac Grow Plus, Dielac Grow and Pedia.
Chau Le: Vinamilk is still leading in IFMP category in Vietnam. However, due to
globalization and upgrading trend, Vinamilk has deal with more and more challenge
competition.
Chau Le: In 2017, total IFMP sales volume decreased significantly comparing to 2017,
especially for lower mainstream. Premium segmentation is getting share volume from
mainstream in rural areas and modern trade.
Chau Le: Premiumisation becomes the main trend in rural and urban areas. It is rising not
only for powder milk but also for drinking milk powder as well. According to price
segmentation, consumption of powder milk is rising in premium products, especially in
rural areas. Consumption of premium drinking milk powder is rising clearly in urban area.
Chau Le: As I mentioned before, consumers are upgrading to higher segmentation.
Van: What do you think about the consequences of the problem? Why

61
Chau Le: Our sales revenue would decreased in mainstream segment. Because, consumers
would prefer to switching to use product in higher segmentation.
them?
Chau Le: In my opinions, less visibility in modern trade would cause this problem.
volume?
Chau Le: From my point of view, we should build partnership with modern trade like
organize activation in super market and hyper super market to increase representative and
engagement with consumer.
Chau Le: I believe that that activation in modern trade would provide us more chance to
interact directly to consumers and led them understand more about our products through
using trial sample.
Interviewee: Mr. Ha The
Title: Sales manager of milk powder category
Age: 38
Working experience: More than 8 years of experience in Vinamilk
Status: current working for Vinamilk as a sales manager of milk powder category

62
Ha The: Hi. My name is Ha. I have joined Vinamilk since 2011.
Ha The:
Ha The: Recent year our sales revenue and volume share has been change among price
segmentation.
Ha The: Consumers are changing. They are now looking for something convenient,
premium, …
Ha The: Price of the item in the premium segment is higher than price of product in
mainstream segment. Along with a human resource, staffs and shops are willing to pay
more attention to sell a premium product rather than many products in mainstream segment
Based on consumers' needs, they need fake manufacturers to tell them what nutrients are
and the role of nutrients in health. This is why the formula is good for your child. However,
currently, Vietnamese consumers do not really understand the nutrient formulas contained
in milk cans on their packages, and how to maintain them when they buy milk for their
children.
them?
Ha The: We are strong in general trade channel; however, in modern trade, we still not
have special display area to attract consumer.
volume?

63
Ha The: We should increase our visible in modern trade like supermarket, hyper
supermarket and mom & baby shop.
Ha The: This give us more chance to attract consumers at the first sign. Besides, we can
build partnership with mom and baby shop by cooperate to train their staff about nutrition
and our products.
Interviewee: Mr. Luc Nguyen
Title: Medical field force manager
Age: 44
Status: current working for Vinamilk as medical field force manager
Luc Nguyen: Hi. My name is Luc Nguyen. I have worked at Vinamilk since 2014 as a
regional field force manager. Since 2016, I was promoted to the position as National
medical field force manager.
Luc Nguyen: We are weaker than our competitors in the basic of scientific and expert. Our
competitors like Abbott, MeadJohnson, Nestle have long time of development with more
scientific evidence in many country.

64
Luc Nguyen: Recently, we faced many challenge to compete with foreign competitors in
high segmentation from European, America to Japan, …
Luc Nguyen: I think that globalization and rapidly increasing in economy growth rate
attracting foreign manufacturers to join Vietnam market.
Luc Nguyen: In my opinion, the most important problem may be the consumer perception
about our products quality.
them?
Luc Nguyen: In the preparation process for the baby to come, there are many things to
worry about both for HCPs and parents. One of the most important thing is to be prepared
in case of C-section. In Viet Nam, high caesarean birth rate in obstetric hospitals accounts
for 60-70% of total deliveries. Therefore, lot of infants lack the necessary bacteria
compared to normal babies, this make their immunity system weaker and more at risk of
disease or digestion troubles.
Medical field force team of Vinamilk was established in 2014 with mission detailing
information and quality of Vinamilk milk powder products to medical staff. However,
other competitors like Abbott, MeadJohnson, Nestle, … also have medical field force team
with more experience and strong relationship with more medical staff than Vinamilk.
volume?
Luc Nguyen: Recruit pediatric doctors and expertise become our brand ambassador.

65
Luc Nguyen: Sharing from pediatric doctors and nutrtion expert would have significant
impact on decision of parents. In order to expertise can be able to trust in our product and
refer to their patients, we have to interact and share detail about ingredients, nutrient in our
products to them. When they understand about our quality, they would be confident to
recommend to their passion. Then, these expertise would become our brand ambassador.
Interviewee: Mr. Ngan Nguyen
Title: Medical field force executive
Age: 30
Status: current working for Vinamilk as medical field force manager
Ngan Nguyen: Hi. My name is Ngan Nguyen. I have joined Vinamilk since 2017 as a
Medical field force executive.
Ngan Nguyen: Vinamilk has established medical field force team since 2014. Compare to
our competitors like Abbott, MeadJohnson and Nestle, …, we just on the way to build trust
in medical aspect. Our competitors have long term cooperation with health care professors.

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