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RMIT International University Vietnam Bachelor of Commerce Program

ASSIGNMENT COVER PAGE Your assessment will not be accepted unless all fields below are completed

Subject Code:

BUSM2371

Subject Name:

Business Enterprise 2

Location where you study:

RMIT Vietnam – Saigon South Campus

Title of Assignment:

Work-In-Progress

File(s) Submitted

BE2_G2_ICEBERG_WiP.doc

Student name:

Nguyen Thuy Trang s3160865 Le Thi Anh Thu s3160794 Dao Cong Duy s3153660 Ha Tran Phuong Ngoc s3142619 Le Thi Tuong Vi s3131818

Learning Facilitator in charge:

Mr. Peter Tran

Assignment due date:

29 August, 2008

Date of Submission:

29 August, 2008

Late Submission Approval

NA

Number of pages including this one: (Please number your pages like this: page 1 of 7, page 2 of 7, etc)

56

Word Count: (Main Content)

9,300


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EXECUTIVE SUMMARY

Yakult Honsha Co., Ltd was established in Japan in 1930. Their core product is Yakult

Probiotics fermented milk which was proved to help people’s health and wellness, as well as

nice complexion and a slim form. Yakult entered Vietnam in 2006 (Yakult Vietnam) and they

have just made their sales since June 2008.

Up to now, the business operations do not live up to expectation due to their incompetent

marketing and promotional activities. As a consequence, this report was composed to analyze

Yakult Vietnam’s current situation, and recommend feasible marketing strategies to help them

increase their sales in Ho Chi Minh City market in particular.

The marketing plan was composed of 8 main parts. The first one Company information

described Yakult Vietnam’s history as well as their operations. With the mission statement

focusing on people’s health and happiness based on expertise in life sciences and

microbiological researches, they have set such ambitious business objectives as 30% market

share in HCMC by the end of the first year and the profit after tax rate up to 15%. Their business

strategies were differentiation in product and services (with high quality and Japanese-technique

and helpful Yakult Ladies squads).

The second part was Market research & analysis concerning detailed discussion of the market

Yakult operates in. This included knowledge about their opportunities, targeted segmentation,

main competitors with their specific products and customers, and a SWOT analysis to

summarize all the achieved information. Significant findings were: Vietnamese households spent

their majority on food and beverage consumption, the country’s population would maintain its

youthfulness until 2020, and the average income levels were projected to rise unstopped from

2002 to 2009. In addition, the fact that Yakult was facing harsh competitiveness from many

rivals, e.g. Vinamilk, Dutch Lady and Campina who had vast customer backgrounds was also a

noticeable point.


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The next section discussed Yakult’s production strategies. First, regarding the quality and brand

name, their products were recognized all over the world. With billions of friendly Probiotics

bacteria, they were proved to balance human’s digestive system, enhance immunity and reduce

remarkable amount of toxics. In addition, their packaged bottles were handy, convenient and

recognized, making it an outstanding point to the customers. However, the design was too simple

and unattractive, which might be a drawback in such an appearance-oriented market as Vietnam.

Regarding the price, Yakult Vietnam applied ‘value-based’ skimming pricing strategy on the

basis of hi-tech equipment and innovative technology from Japan. Moreover, we also planned to

offer quantity discounts and geographic pricing to boost the sales result. Two positioning maps

comparing Yakult’s price and quality and convenience with other brands were also come up with

to confirm our skimming method.

Most importantly, this marketing plan proposed the detailed promotional strategies helping

Yakult enhance their profit. We used 3 methods altogether: marketing, promotion and

sponsorship. Our intended marketing channels included HTV7, HTV9, The Gioi Phu Nu and

Tiep Thi Gia Dinh Megazine, and VnExpress website. We would also offer price packs and

coupons on the occasion of holidays to attract purchase, as well as sponsorship on Suc Song Moi

and charity programs to raise our brand awareness. The overall budget for this campaign during

the first year was VND 1,992 million.

The next section, Customer strategies described how we went through Marketing & stimuli,

Buyers’ black box and Buyers’ response steps to reach the consumers. This included some

cultural and social factors, personal perceptions, psychological and social class backgrounds to

decide what consumers buy. In addition, the distribution services that we offered also affected

our sales. Currently, we had retail stores and partner supermarkets all over the city, and in the

future we would expand our Yakult Lady squad to larger than just Phu Nhuan District and

Dist.11 at this moment.

The last part offered detailed figures of our projected sales and profits in the effect of this

marketing campaign. Some assumptions were also defined clearly for the readers to understand

the worksheet.


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1. INTRODUCTION.................................................................................................... 06

2. COMPANY INFORMATION ................................................................................. 06

2.1 Company background information........................................................................ 06

2.2 Mission statement ................................................................................................. 07

2.3 Business objectives............................................................................................... 07

2.4 Business strategies................................................................................................ 08

2.5 Company structure................................................................................................ 08

2.6 Management team ................................................................................................ 09

2.7 Departmental communication ............................................................................... 10

3. MARKET RESEARCH & ANALYSIS .................................................................. 10

3.1 Industry overview................................................................................................. 10

3.2 Market opportunities............................................................................................. 11

3.3 Income growth...................................................................................................... 12

3.4 Market segmentation ............................................................................................ 14

3.5 Competitors.......................................................................................................... 17

3.6 Competitors’ products .......................................................................................... 19

3.7 Competitors’ customers ........................................................................................ 22

3.8 SWOT analysis..................................................................................................... 24

4. PRODUCT STRATEGIES ...................................................................................... 25

4.1 Product attributes.................................................................................................. 25

4.2 Branding............................................................................................................... 26

4.3 Product classification............................................................................................ 27

4.4 Product levels ....................................................................................................... 27


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4.5 Packaging ............................................................................................................. 27

5. PRICING STRATEGIES ........................................................................................ 28

5.1 Overall pricing strategies ...................................................................................... 28

5.2 Pricing in detail .................................................................................................... 30

5.3 Positioning maps .................................................................................................. 32

6. PROMOTION STRATEGIES................................................................................. 34

6.1 Objectives ............................................................................................................ 34

6.2 Advertising........................................................................................................... 34

6.3 Sales promotion.................................................................................................... 40

6.4 Sponsorships ........................................................................................................ 40

6.5 Promotion mix budget .......................................................................................... 41

7. CUSTOMER STRATEGIES................................................................................... 42

7.1 Customer behaviors .............................................................................................. 42

7.2 Characteristics affecting customer behavior .......................................................... 43

8. DISTRIBUTION STRATEGIES............................................................................. 47

8.1 Distribution channels ............................................................................................ 47

8.2 Warehouses .......................................................................................................... 48

9. SALES & FINANCIAL FORECASTS.................................................................... 48

10. CONCLUSION......................................................................................................... 50

11. REFERENCE ........................................................................................................... 50

12. APPENDIX............................................................................................................... 53


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1. INTRODUCTION Yakult Honsha Co., Ltd originated from Japan in 1930. Their core activity is producing

Probiotics fermented milk proven to be extremely good for health and wellness. Yakult entered

Vietnam in 2006 under the name Yakult Vietnam and they have made their first sales in this

June. Currently, the company’s sales in Ho Chi Minh City particularly is not good; that’s why

this marketing plan comes in place with the hope that Yakult Vietnam will gain bright success in

the next year to come.

The marketing plan includes 8 major parts:

Company information

Market research & analysis

Product strategies

Pricing strategies

Promotion strategies

Customer strategies

Distribution strategies

Sales & financial forecasts

2. COMPANY INFORMATION

2.1 Company background information

Yakult Honsha Co., Ltd was found by Dr. Minoru Shirota in 1930. Dr. Minoru Shirota was

driven by the passion of creating an affordable way for maintaining people’s health and wellness

as at that time Japan was not wealthy and malnutrition and infectious diseases led to the death of

a lot of children


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Yakult fermented milk drink was first introduced in Japan market in 1935 and was considered as

the world’s first Probiotics drink. It is known as a preventive medicine which is aimed at the

prevention rather than the cure of the diseases (Yakult Japan, 2008).

Currently, Yakult is sold in 31 countries over the world and approximately 21 million people

drink Yakult everyday. Yakult Vietnam Co., Ltd, which is the joint venture of Yakult Honsha

and Danone Group of France, was established in June of 2006. The initial sales of Yakult were

in Ho Chi Minh City market in September 2008 and the product was imported from Yakult

Indonesia at that time (Yakult Japan, 2007). Currently Yakult Vietnam’s factory in Vietnam-

Singapore Industrial Park is in operation with the capacity of 73,000 bottles per day and that will

increase to 865,000 bottles per day when the demand increase (Writer, 2008).

Product Name Yakult

Package 65ml / 5 bottle packs of polystyrene containers

Planned Retail Price 18,500 Vietnamese dong / 5 bottle pack

Start of Sales September 2007

Sales Area Ho Chi Minh, Vietnam

Sales Channel Home delivery sales by Yakult Ladies and store

sales in supermarkets and other retail locations

(Yakult Japan, 2007)

2.2 Mission statement

"To contribute to the health and happiness of people around the world through the pursuit of

excellence in life sciences in general and our expertise in microbiological research in

particular."

2.3 Business objectives

Yakult Vietnam business objectives included:

Increase Vietnamese customer awareness about healthy drink, especially about the drinks

that contain beneficial bacteria. Healthy drinks is a new trend in beverage market with

many products such as green tea, ginseng drink but there is not any product that focuses


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on a specific health benefits. Yakult will focus on strengthening the digestive system

which is a vital part in creating a healthy body.

With the speed up of marketing activities plus the image of high quality Japan product,

Yakult expect to obtain 30% market share of fermented milk drink market after 1 year.

The profit after tax rate is 15% out of $9 million sales within a year.

Increase in sales volume is expected to be 40% each year since year 2.

The Return on Investment of this marketing plan is around 50%.

2.4 Business strategies

In order to achieve the objectives, differentiation strategy will be used. Firstly is the

differentiation in physical product. Being the first Probiotics milk drink in the world and

a product from Japan which Vietnamese customers have a good perception. Second thing

is the differentiation in service. Yakult Lady is an important part in Yakult’s sales

channel. In order to obtain a stable sales growth, it is critical that the customer understand

and experience the health benefits that Yakult product brings to them. Therefore, Yakult

Ladies not only do home delivery but also communicate directly with customers to

provide them necessary support and information about the product’s benefits.

As stated above, one of Yakult’s business objectives is to increase customer awareness.

Therefore, Yakult pays attention to strengthening marketing activities to convey its image

and messages to customers. Moreover, promotional activities will be used to increase the

demand.

Besides that, Yakult Vietnam aims to increase the approachability to customers and

product availability by widening distribution network and expand Yakult Lady service to

more parts in the city.

2.5 Company structure

The structure of Yakult Honsha which is the parent company in Japan is a corporation. It was

incorporated on 9 April 1955 (Yakult Japan, 2008).


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Yakult in Vietnam is the joint venture between Yakult Honsha and Groupe Danone of France.

Groupe Danone is the biggest shareholder of Yakult Honsha with 20% ownership. The joint

venture in Vietnam is their second overseas cooperation after the first one in India in 2007 which

is Yakult Danone India Pvt. Ltd (Masaki, 2006). In Yakult Vietnam Co., Ltd. Yakult Honsha

holds 80% of ownership and the other 20% is owned by Groupe Danone. This cooperation of the

two global leaders in Probiotics product (Yakult) and dairy product (Groupe Danone) would

bring a lot of benefits and is its competitive advantage in terms of experience, knowledge and

skills.

2.6 Management Team

Mr. Michio Kashiwaya – General Manager of Yakult Vietnam Co., Ltd used to be Vice Manager

and also worked in Marketing Department of Yakult Indonesia. Therefore, he has a lot of

experience and understanding about the corporation. Moreover, as a joint venture between

Yakult Honsha and Groupe Danone of France, the management team is the combination of

talented people of two corporations who have valuable knowledge in beverage industry,

especially dairy product.

As a member of Yakult Corporation, Yakult Vietnam is also driven by Shirota-ism which is the

gathering of ideas and desires of the founder, Dr. Minoru Shirota.

MICHIO KASHIWAYA General Manager

Marketing Production

Human

Resources Finance


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Shirota-ism is considered to be one of three sources of strengths of Yakult and as the foundation

of Yakult’s business. It has effect on management team’s decision making and also how the

company operates.

2.7 Departmental communication

The departments in Yakult Vietnam are connected by an intranet in which information is shared

and employee can access the internal sources to find their needed information. Internal numbers

are also available so that the communication between the departments is fast and effective.

Meetings of each department are held weekly and if there are more tasks or sudden events extra

meetings will be held.

3. MARKET RESEARCH & ANALYSIS

3.1 Industry overview

Figure 1: Shirota-ism Principles Source: Yakult Australia, 2007


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VND 0

VND 2,000

VND 4,000

VND 6,000

VND 8,000

VND 10,000

VND 12,000

VND 14,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Year

Bill.

don

gs

Figure 2: Industrial output value for manufacture of food products and beverages (1995 – 2005)

Source: General Statistics Office, 2006

Overall, the manufacturing output for food and beverage industry in Vietnam has increased

continuously from 1995 to 2005. As the economic is growing, it expected to grow steadily in the

next five years. In addition, according to Euromonitor International (2005), food and beverage

spending is held biggest proportional (around 23%) in Vietnamese household expenditure

(Appendix 1). Thus, this industry is very potential to enter in for Yakult.

For fermented milk drink in Ho Chi Minh City, there are four companies that have introduced

this type of healthy drink: Probi (Vinamilk), Betagen (Campina), Yakulk. Thus, the market type

for this product is oligopoly which is price sensitive. In this market, price war should be avoided.

Instead, the market share and sales can be gained as creating differentiation such as high quality,

premium service and customers’ loyalty.

3.2 Market opportunities

This plan is for marketing Yakult products in Ho Chi Minh City. Thus, the analysis will focus

mainly on the economic situation, consumers’ behaviors and lifestyle of citizens that live in Ho

Chi Minh City

Young population of Vietnam:


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Source: Euromonitor International from National Statistics

Figure 3: Vietnam population pyramid (1980 – 2000) and estimate for Vietnam population pyramid (2010 – 2020)

Source: Euromoniter International, 2008

There is significant bulge among those between 15 to 25 years old in 2010 and 25 to 30 years old

in 2020. In general, even though the population of infant is steadily dropping, Vietnam still

young population until 2020. Thus, young population would be the right decision for Yakult to

focus on.

Income growth:

Rising in standard of living would be the first reason that creates the opportunity for products’

characteristics that offer healthy living such as Yakult.


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Figure 4: Income growth (2002 – 2006)

and estimate of income growth (2007 – 2009) in Ha Noi & Ho Chi Minh city Source: AC Nielsen Omnibus

As the statistic shows the income level has raised continuously from 2002 to 2009 in Ha Noi and

Ho Chi Minh City. There are 4 levels of income (per month) that has been showed in the study:

Less than VND 2 million: Upper lower (unskilled labors)

VND 2 – 4 million: Working class

VND 4 – 7 million: Middle class (average-paid white and blue collars)

VND 7+ million: Upper class (career oriented professionals, considered to have high

income and wealth)

The study indicated the middle class and upper class were estimated to in crease to 94% of total

population in 2009. Therefore, it generates the prospective economic situation in geographic

region (Ho Chi Minh City) that Yakult targets its products to.

Significant rise in health concern:

Citizens now pay more attention about their health as it is critical factor to achieve happy life.

As the Vietnamese wisdom “health is gold” or “strong spirit in a healthy body”, people try to

apply healthy living therapies such as nutrition meal and regular exercise. For example, in the

morning there are always crowds in the parks and gyms. Moreover, suggestions about healthy

and nutrition meals are broadcasted more and more regularly on the TV. As Yakult products are

considered as a treatment of digestive diseases, a method of cancer prevention and boosting the

immunity system, they have a high successful rate to convince consumers to purchase.


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3.3 Market segmentation

As the standard of living rises, the physiological and safety needs (Maslow model) are already

satisfied. Currently, most citizens in Ho Chi Minh City are in level three of Maslow model

which is sense of love and belonging:

Figure 5: Maslow’s hierarchy of needs

Source: McShane Travaglione, 2002

In this level, people seek and give care, as well as long for the feeling of love and beloved.

Determining the level of needs is critical because based on it, the massage and image of Yakult

will be built. In general, Yakult will build its image that protects human health, brings joy and

happiness for Vietnamese families.

In the first three years, there are two target segmentations:

Young ladies (18-30 years old)

This is the main target segment of Yakult. In this segment, young ladies are the most concerned

about their beauty to be confident when communicating and performing social activities. With

the benefits of delighting the skin, they would consider Yakult product as safe way to improve

their complexion and to be good looking. Besides, they can use Yakult to benefits their health

and prevent obesity.


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Figure 6: Population pyramid of Vietnam in year 2007


As the statistic numbers state, the females from 18 to 30 years old occupy about 16.19% the total

population (Appendix 2). This will be the potential segment combined with the children segment

from 1 to 5 years old.

Figure 7: Fertility rate for the Vietnam from 1/4/2006 to 31/3/2007


The figure has showed that most women gave birth at the age of 20-24 and 25 to 29. As the

regulation in Vietnam, each family must have maximum 2 children. The trend from 2006 to


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2007 was most woman were likely to give birth the first time at 20-24 years old and probably

wait for around 3-4 years (depending on each household situation, e.g. finance) to have the

second baby. Hence, it is a good idea to make Yakult suitable to both mothers and children.

When mothers do the shopping, they would consider Yakult as healthy milk and purchase the

product for themselves as well as their beloved babies. It is more effective at cost-saving: the

advertising campaign will send the message to the main market segment (young lady 18-30 years

old). Consequently, the children segmentation which is 15.33% of total population would be

reached as well. This is particularly true for Ho Chi Minh City as the total fertility rate (TFR) in

urban areas is 1.7 children per household (General Statistics Office, 2007) and 95 women per

thousands would have babies between 20 and 24 years old and 130 women per thousands would

have babies between 25 and 29 years old (see Appendix 3).

Children (1-12 years old)

The population pyramid (General Statistics Office, 2007) indicates that Vietnam has large,

young & growing population. Therefore, it is very potential for Yakult to focus not only on

children from 1 to 5 years old but also from 5 to 12 years old. The first reason is the age of 1-12

years is an important period for children as they experience both rapid mental and physical

growth.

Second, in the childhood, most kids suffer from constipation (Webtretho, 2007). Yakult products

would be the right treatment for their digestive diseases. Parents, who want to prevent or cure

their illness, will purchase the products. At the moment, the traditional yogurt is served to kids

as desserts to support their digestive systems. It is believed that once having healthy digestive

systems, kids are likely to observe nutrition from the meals effectively and boost their immunity

systems significantly. As a result, they can grow well and avoid diseases. Since Vietnamese

perception towards Japanese products is high quality; there is high propensity that Yakult will be

purchased as parents trust that their kids’ health will be well-protected with high quality

products.


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3.4 Competitors

Vinamilk

Vinamilk is the dominant brand in Vietnam that sells products made from milk. The website

http://just-food.com (2008) stated that they achieved 29.5% profit (VND 812 billion ~ $49.23

million) and 27.5% increase in sales (VND 4.77 trillion) for seven months from January 2008 to

July 2008. It is very prospective for Vinamilk as they have achieved 71.2% of its full-year goal

just after half of the year. Even though Vietnam has joined WTO leading to floods of imported

goods, Vinamilk still maintain their market leader position and even increase the market share.

Its strategic plan is to improve supply chain management, potentially the quality of raw material

sources via direct investment, and use it as a vital competitive tool to control price (BMI

Industry Insights – Food & Drink – Asia, 2008).

For instance, they also have the wide and effective distribution channel including 183

distributors and 94,000 retailers in Vietnam (Vietnam branding, 2008).

Effective marketing plan is one of the keys leading to the success of Vinamilk. According to

Binh (2008), Vinamilk is the third company in the first half of 2008 that has spent enormous

budget with nearly $6.5 million or 73% higher than the amount they spent in the first half of

2007 for advertising campaigns via TNS Media Vietnam.

Recently, it has introduced a very effective advertising campaign. At the beginning of the year,

the regular advertisements were been broadcasted on TV which were very cute, funny and

attractive, especially to children. It included the “cows” which are funny and healthy.

The slogan of “100% fresh milk” is easy to remember by the harmony song “100%”. It is noticed

that kids love funny music and likely to sing or even dance with the song. Consequently, parents

notice the brand name and Vinamilk are successful to build good image of their products.

Previously, there was tolerant news about Vinamilk that cheap powder milk has been used

instead of fresh milk. It damaged the image of Vinamilk and also many negative feedbacks. The

new advertising campaign has changed the situation and boosted up their sales as well as profit.


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Currently, Vinamilk marketing department spent a lot of effort and budget for this campaign. For

example, every day there is the advertisement show on HTV7 of Vinamilk with the main

messages: “Drinking milk is the way to support poor children”. Not only television but also

newspaper, magazines, poster, big pictures (at the bus stop) are used to maximize the aspect of

marketing campaign. It claimed that Vinamilk registered in the highest growth in advertising

spending, are going to invest $2 million to further promote and reposition its roast and instant

coffee brand Moment in Vietnam (Binh, 2008).

Overall, it is worth for Vinamilk to spend tremendous amount of money as they have been

successful in re-building their reputation and image. With around 200 product lines (Phuc,

2005), Vinamilk has been the largest and most powerful company in daily product industry in

Vietnam. When their Probi – Vinamilk fermented milk – drink was launched into the market, it

is expected to have high successful rate as having popular brand name as well as customer

loyalty. In short, Vinamilk is considered to be giant local competitor that has the products line

compete with Yakult in both direct (Probi) and indirect (yogurt) substitute.

Dutch-lady

The international corporation: Dutch Firm Friesland Foods has placed its manufacturers in

Vietnam and introduce their product under brand name: Dutch Lady. According to Binh (2008),

Ductch Lady is the fifth company that has spent money for their advertising campaign. The

company use “mother and children” to build image for its brand. The advertising of Dutch Lady

is quite strong as regarding to the level 3 of Maslow model: Sense of love and belonging. For

instance, Dutch Lady has used some promotion campaign such as “Thanks mom” or “Let’s love”

to give the warm feeling for families members. They also targeted mothers and mothers who

made the buying decision. Most of the TV ads emphasize the importance of mothers’ role in

their kids’ life and how kids appreciate the love and care from their mothers. Overall, Dutch

Lady always tries to increase their market share by spending a lot of money on advertising.

Besides, they tend to stand in the second position after Vinamilk. For example, Van (2008) has

stated that in the powder milk market, Vinamilk maintains the top position with 13.8% shares,

followed by Dutch Lady (11.3%), Nutrition (5%), and Nestle (4.4%)


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Campina

Betagen is the product line that belongs to multinational company – Campina. It is the largest

dairy company in Germany and Europe and currently extending to Asia and operating in

ingredients for professional and industrial customers’ world wide (PR Newswire Europe, 2008).

Even though it has been famous in some regions, this brand name is still new to Vietnamese

market and most consumers are not aware of this brand name.

According to Phuc (2005), Campina is the strategic partner of Vinamilk as both of them have the

strength for hygiene and qualified manufacturer standard and good reputation. Nghi (2005) has

stated that the strategic plan for 30 years between Campina and Vinamilk is estimated about 4

million USD, in which each partner will invest 50% of the budget.

3.5 Competitors’ products

3.5.1 Direct

Brand name Product Quantity Volume per quantity Price

Campina Betagen 4 115 ml 16 600 Vinamilk Probi 4 65 ml 17 000

Yakult Yakult 4 65 ml 18 500 Figure 8: Price of Yakult and direct competitors Product

Source: Co-op Mart Dam Sen Currently, Yakult has two direct competitors that have the same type of products – fermented

milk drink:

Probi – Vinamilk

Figure 9: The design of Probi package


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While the others brand name used red color to attract customers. Probi of Vinamilk has applied

the opposite color which is blue. The package color brings the fresh feeling and also

differentiates itself from others brand name when placing on the selves of distributors or

retailers.

For this product line, Vinamilk has used the beautiful lady with the Pro-bi bottle inside for their

advertisement. Their slogan of “healthy inside, beautiful outside” has targeted female teenagers

from 15 to 25 years old. As the Vinamilk spent money to advertising for this product line in

newspaper, magazines, poster, and radio and sometimes on the TV. Customers are aware of this

product and there is high successful rate to launch this product to the market

Betagen – Campina

The product package is quite similar to Yakult, which is in red color. However, the cover at the

top of bottle is covered in Blue color, differs from the silver color that Yakult currently uses. In

addition, the bottle volume is bigger (115 ml) than other competitors (65ml). The price is also

cheaper such as VN 400 per log compared to Probi and VND 1,900 per log compared to Yakult

price. Thus, Betagen has applied low-cost strategy for their products.

As they hardly spent money for any advertising campaign, consumers are not aware of this brand

name. However, as the appearance is quite similar, consumers tend to mistake Betagen, instead

of Yakult. Moreover, as the marketing campaign of Yakult is not effective enough, consumers

are not motivated to buy the products. The first option probably is Probi from Vinamilk, and if

they prefer to purchase foreign brand, Betagen might be the choice as it is cheaper than Yakult

and consumers perceived that they have the same quality.

Design of Yakult product Design Betagen product


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3.5.2 Indirect

Brand name Product Quantity Flavor Volume per quantity

Price (VND)

Plain yogurt 100 ml 14000 Yogurt 4 Fruit juice

calcium-plus 100ml 18000

Susu (Kid) –Drinking yogurt 6 chocolate 110ml 15200

Susu (Kid) Yogurt 4 strawberry 80 ml 10000

Vinamilk

Drinking yogurt 4 Green Tea 180 ml 17600 4 strawberry 110ml 11400

Yomost 4 Strawberry

Orange Cocktail

180 ml 17400 Dutch Lady

Drinking yogurt 4 Green Tea 180 ml 16400 Figure 10: Price of Yakult and indirect competitors Product

Source: Co-op Mart Dam Sen

Yogurt:

One of indirect competitors to Yakult is traditional Yogurt which has been familiar and used

daily in most household in Vietnam. The competitive advantages customers’ loyalty (as the

products are used for a long period of time), and variety of flavor available such as strawberry,

calcium plus, mango, fruit juice, etc.

In most kindergartens and school, yogurt is often served as the dessert for kids after taking the

naps. It is considered to be healthy drink that is important to include it in kids’ daily meal.

Drinking yogurt:

Several years ago, Yomost (Dutch Lady) has boosted up their sales by focusing on its promotion

and advertising program. They has raised the campaign named “the feeling is very Yomost”,

which is favored by many teens. Hence, Yomost has created strong consumers loyalty and good

perception in customers mind. However, the products seem to be on the mature stage. Thus

Dutch Lady has launched new product: Drinking yogurt (green tea) in order to attract customers.

Vinamilk has also launched the same type product: drinking yogurt green tea. Those products

targeted female teenagers from 15 to 25 years old. It leads to tough competition in the daily

products such as yogurt for this segmentation. Thus, Yakult would target the different market

segment which is young lady (18-30 years old).


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3.6 Competitors’ customers

3.6.1 Business customers

As the requirement of Yakult products is to be well-preserved in 0-50C, the major business

customers will be popular distributors and retailers that are well-equipped for this type of

products.

Coop-mart

This is dominant supermarket in Ho Chi Minh City at the moment as having some competitive

advantages such as good reputation, great customers’ loyalty, and large service network with 15

shopping centers in Ho Chi Minh City (Appendix 4). There are frequent giant numbers of

customers shopped at their network in the weekend. Thus, to build brand awareness effectively,

Yakult need to run the promotion campaign mainly in this supermarket.

Big C

Big C is belongs to Casino Corporation – one of the top Europe retailers – with more than 9,000

stores all over the world. In Vietnam, they have organized the great stores with more than 50,000

types of products, particularly daily products. Their marketing strategy is low-cost as usually

offering discount/ coupons to generate sales and create customers loyalty. In Ho Chi Minh city,

currently they have 3 shopping centre which located in Phu Nhuan, Binh Tan and District 10

(Big C, 2008). Placing the products in those stores would support to improve distribution

channel of Yakult.

3.6.2 Final consumers

To get the others customers, it is critical to understand the buyers’ behavior first. The above is

the study of AC Neilson about most urban family behavior in Vietnam:


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Figure 11: Most Vietnamese urban family behavior Source: AC Nielsen

It showed that in most urban family, mothers and grandmas usually make the decision for

purchasing food and beverage such as daily products. Since Yakult is in this type, it is worth

putting effort to get attention from those people. The main messages will be Yakult is right

choice for them to take care of the family. In addition, they often shop before 8:00 AM in the

morning. Thus it is important to make sure that the stock always available in distributors and

retails in the morning around that hour; and also in the weekend.

In addition, the product brand is from Japan should be emphasized as the good Vietnam

preference about Japanese products.

By introducing Yakult Lady Service, Yakult is able to lower the price and make their products

competitive in the market by cutting the expenses used for wholesalers and retailers. There are

two ways Yakult has placed the price VND 18,500/ bulk (5 bottles) if purchased via

intermediaries (such as super market, retailed store) and VND 17,500/ bulk (5 bottlers) if

distributed directly to home (Sanhdieu, 2008). It is value-added for consumers when purchasing

in bulk they can enjoy the low price and do not have to go shopping.


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Figure 12: Yakult Lady service that restructure the market structure

3.7 SWOT analysis

In short, Yakult has the following internal and external factors:

Strength:

Yakult is famous global brand name

Strong differentiation as providing Yakult Lady Service: home distribution

Use the most advanced biologic technology and unique production method

Professional and experienced management team

Weaknesses:

Currently, brand awareness for Yakult in Vietnam is not achieved yet

The package design cannot be changed as the policy from headquarter

Opportunity:

Rise in health concern

Good preference from Vietnamese about Yakult products

Living standard is increasing

Threat:

High inflation in Vietnam: it is expected to stay over 6.0% between 2007 and

2010, causing a drag on incomes and slowing down consumers spending

(Euromonitor International, 2007) (Appendix 5)

Threat from local giant: Vinamilk and their strategic partner: Campina

Potential entrants

PRODUCER WHOLESALERS RETAILERS CONSUMERS


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As Yakult Lady is used to deliver products at home with lower retailed price in

the market, it might increase the cost as the fuel price rise. Consequently, Yakult

might experience loss if it cannot control the delivery expense.

4. PRODUCT STRATEGY

4.1 Product attributes

Quality:

Performance quality:

- The quality of Yakult has been recognized over the world

- The product is made with Japan technology

Conformance quality:

The consistency of Yakult is ensured over the world. The production of Yakult in Vietnam is not

an exception. It is operated to ensure that the taste, the quality of Yakult in Vietnam is the same

as Yakult from anywhere in the world. Moreover, it has a quality control system to bring

consistently high quality product to Vietnamese customers.

Features:

There are billions of Probiotics (friendly) bacteria contained in a single bottle of Yakult.

Drinking Yakult is helpful in preventing the growth of bad bacteria. Yakult also has a lot more

benefits such as:

Balance the digestive system

Enhance immunity to prevent infectious diseases

Increase the amount of "good bacteria" in digestive system Reduce toxins in our body

(Yakult USA)

Design:

Yakult’s bottle is small with 7cm height and 4cm width. In Vietnam Yakult comes in a pack

of 5 bottles (while that is 7 in some countries which represents for 7 days in a week), each


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bottle is 65 ml. The bottle is sealed with a red foil on top to keep the milk fresh. Yakult

bottle’s design is consistent over the world. On both the bottles and the outer wrap, red is the

only color that is used.

However, other brands of fermented milk drink also use the similar bottle design and two

brands among direct competitors use red as their main color. Therefore currently the role of

design elements in customer recognition is not quite high.

4.2 Branding

The name Yakult comes from the word “jahurto” in Esperanto which means yogurt. Esperanto

was intended to be a form of international communication and the name Yakult was given for the

product because it was expected to be a universal drink (Yakult USA).

Yakult brand and messages are expected to appear consistently in every point of contact with the

customer so that whenever the customers see or think about the name Yakult they have the

perception of its high quality and healthy benefits.

Yakult tries to spread its image as wide as possible to create a strong identity. Attention is not

only paid to the product design but also other direct and indirect means to approach the

customers. Yakult ladies’ uniform and delivery vehicle or delivery trucks of Yakult would be

designed with Yakult’s identity such as logo, color and so on.

The official website of Yakult will spend a large portion to provide customer useful information.

For instances:

Providing useful knowledge about digestive system and stress on how it can affect the

whole body’s health

Providing access to more detailed information of Yakult (or Probioticss)’s benefits to

health.

Lifestyle advice for a healthy digestive system

Personal health plan which include healthy diet and recipes

Effective exercises, specifically the ones that are helpful for the digestive system.


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In short it is expected to strongly increase customers’ awareness about the importance of

digestive system and how Yakult can contribute to enhance its strength. Besides that, it shows

Yakult’s personal attention and care to customers.

4.3 Products classification

Yakult is consumer product because it is bought by final consumers and it is for personal

consumption. In specific, Yakult is convenience product for the following reasons:

It is bought frequently and immediately

The consumers’ comparison between different producers is not too high

The seller place the product in many locations to increase product availability

(Armstrong and Kotler, 2005)

4.4 Product levels

Core benefit - A type of healthy drink

Actual product - Popular brand name in the world – Pioneer in Probioticss

milk drink

- High quality level

- Enhance immunity and digestive system

- Portable and convenient bottle design

Augmented product - Home-delivery by Yakult Ladies

- Provide customer with sufficient information and advice

(Armstrong and Kotler 2005)

4.5 Packaging

Primary package:

The bottle is handy, convenient and is recognized over the world. The bottle is made using

polystyrene. Polystyrene is recyclable; it is resistant to both acid and alkaline conditions. The cap

is made using high quality aluminum foil (Yakult USA).


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The bottle seems to be very small but there is a reason. Since Yakult is not thirst-quencher, the

customer is recommended to take one to two bottles everyday. The little 65ml bottle is

considered as an ideal volume that customers can consume per day.

Secondary package:

The bottles are wrapped in a cellophane cover with red print on. On the right side there is a

stamp-shaped which stated Yakult is high quality product from Japan and it was sold since 1935.

At the back of the outer wrap, there is general information about the benefits of Yakult and its

Nutrition Facts.

In general, Yakult’s package performs the following functions:

Provide product information

Provide organization’s identity

Convenience of storage, display and usage

Inform brand value

Environmentally friendly

However, the packaging is not attractive enough. In order to enhance customer recognition

through packaging, changes are going to be made. The bottle design cannot be changed because

it is consistent globally. Therefore the outer wrap is going to be adjusted to make it more

attractive to customer. The outer wrap will still use the red color which is the identified color of

Yakult and it will be made from special paper in order to maintain Yakult’s environmentally

friendly image.

5. PRICING STRATEGY:

5.1 Overall pricing stragies:

5.1.1 Factors to consider when setting prices:


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Yakult’s pricing decision is influenced by both internal and external factors.

a. Internal factors:

Marketing objective: the company has recently set product quality leadership, which

means it differentiates quality with other competitors, as its marketing objective. In

other words, it will set quite high price to match with its high-quality products.

Marketing mix strategy: other marketing mix element including product design,

distribution and promotion will be coordinated with pricing strategy to emphasize total

value concept.

Cost: In near future, the company is going to raise the plant capacity to 865 000 bottles

per day. That means it is able to achieve economics of scale. Hence, variable costs of

production are also lower.

b. External factors:

Type of market:

In fact, Yakult is in oligopoly market with few sellers who are sensitive to each other’s

pricing/marketing strategies. However, with high barriers to entry and Yakult’s distinct

healthy product, it is still competitive, even in case of that the company set high price.

Economic condition:

Inflation: Vietnam has encountered a significantly increased inflation rate.

Customers’ perceptions of price and value: in food and beverage industry, especially in

healthy dairy product market as Yakult, customers usually care about the quality rather

than prices.

5.1.2 General Pricing Approach:


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Figure 13: Value-based Pricing Process

Source: Armstrong G. & Kotler P., 2005 pp.303

Yakult uses Value-based pricing as their main approach. In other words, the key for the

company to pricing is to focus on buyer’s perception in stead of its cost. Pricing for Yakult

Probiotics fermented milk begins with analyzing consumer needs and value perceptions, and

the price is set to match consumers’ perceived value. For instance, in recent, as the living

standard is increasingly improved, there is a sharp rise in heath and beauty concern of Ho

Chi Minh citizens, especially young women and parents of children. Thus, there will be a

large number of customers who are willing to pay a reasonably high price for such a

delicious healthy product as Yakult.

Thanks to this value-based pricing approach, the company can decide the best price at which

customer demand could be increased most.

5.2 Pricing in detail:

5.2.1 New product pricing strategy:

With many distinct healthy benefits of Lactobacillus Casei Shirota bacteria, Japanese hi-tech

equipments as well as in unique innovating formula as our differentiation, we aim to apply

market skimming pricing strategy for this new product in Vietnam, specifically in HCMC.

That means we set a high price for the new product to “skim” revenues layer by layer from

the market .The company will make fewer, but more profitable sales (Armstrong, G &

Kotler, P 2005). Beside with high-quality healthy Japanese Probioticss fermented milk

image, there are also other reasons for applying skimming strategy including not high cost of


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small volume and high barrier to entry characteristic of this oligopoly market, as mentioned

above.

More specifically, Yakult has set price of 18,500 VND/ bulk (5 bottles) through

intermediaries such as supermarket or retailers and 17,500 VND/ bulk for required direct

delivery to home in District 11 and District Phu Nhuan and other districts in near future.

5.2.2 Pricing adjusting strategy:

Discount in quantity:

This strategy is most appropriate to housewives segment who buy the products for the whole

family with large quantity, especially young housewives who care about heath and beauty.

This discount strategy will be applied in the first quarter of this marketing campaign. More

specifically, if customers buy 2 bulks (in total of 10 small 65ml bottles), they will pay at a

discount price as following table.

Normal price Discount price

Through intermediaries

( supermarkets & retailers)

37 000 VND

(18 500 x 2)

34 000 VND

Through directly free delivery

system.

35 000 VND

(17 500 x 2)

33 000 VND

Figure 14: Quantity discount pricing

Geographic pricing:

As briefly mention above in new product pricing strategy part, the company will charge

cheaper prices (only 17,500/ bulk) for customers who require for direct delivery to home

(called Yakult Lady) in District 11 and District Phu Nhuan. The primary aim for this

pricing adjusting strategy is to create a brand loyalty for customers, i.e. young women and

family living near our warehouses. We have tried to expand this delivery system

throughout the city to attract more customers (for more details, refer to Distribution).


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5.3 Positioning map:

Position map of level of quality and price:

Figure 15: Comparison quality vs. price

QUALITY

High

High Low

Low

PRICE

YAKULT

Pro-bi (Vinamilk)

Betagen

Yomost (Dutch Lady)

Drinking yoghurt (Vinamilk)

Vinamilk-Yogurt


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Position map of level of convenience and price:

Thanks to its diverse distribution system, especially free distinct delivery system in District 11

and district Phu Nhuan (be going to expanded throughout the city in near future) called ‘Yakult

Lady’ with many useful advices to customers’ health from considerable female deliverers,

Yakult has an upper level of convenience for customers compared to other competitors.

Figure 16: Comparison convenience vs. price

Convenience

High

High Low

Low

YAKULT

Pro-bi (Vinamilk)

Betagen

Yomost (Dutch Lady)

Drinking yoghurt (Vinamilk)

Vinamilk-Yogurt

PRICE


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6. PROMOTION STRATEGY

6.1 Objectives:

The company has just expanded to Vietnam, particularly in HCMC, for 1 year. Therefore,

primary objectives for promotion strategies should be:

Increase brand awareness of target customers to 85% by the end of year.

Gain 30% market share in Probiotics fermented milk oligopoly market in HCMC at the

end of this year.

Increase total sales by 40% each year since the second year.

6.2 Advertising:

6.2.1 Advertising objective:

Advertising is an effective promotion tool to reach masses of geographically dispersed

buyers with a message repeated many times (Armstrong G. & Kotler P., 2005). Obviously,

with such a new product as Yakult, information advertising which inform customer of huge

healthy benefits of the product and its available services is the most appropriate objective.

However, since cost for such communication is expensive, the most effective advertising

methods must be chosen for the best result.

6.2.2 Target audiences: young women, parents and children, especially in HCMC.

6.2.3 Advertising budget:

The company has decided to apply objective-task method which develops the promotion

budget by setting specific objectives, determining necessary tasks to achieve these objectives

and calculating the total of all tasks cost equal to budget.

6.2.4 Advertising strategy:

a. Advertising message:


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The advertising message applied should be able to reflect the huge benefits for hearth,

especially digestive system, and for beauty of Yakult Probiotics fermented milk product.

More specifically, advertisements have to tell prospective customers about advanced unique

Lactobacillus Casei Shirota ferment form Japan in the product and its fresh delicious taste in

the most attractive way. The creative concept will emerge as a combination of meaningful,

believable and distinctive visualization and phrase. Our phrase, i.e. considered as our slogan,

is ‘Refresh yourself to enjoy your life’.

However, to capture the target market’s attention and interest, we have to turn that creative

concept to an actual ad execution. It is suggested that the advertising message be presented in

musical style in advertisement in TV ads.

For print advertising, we will apply the following posters for separate customers including:


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Young women caring about beauty and heath parents caring prevention of digestive

deceases and resistance for their children:

Figure 17: Print ads no.1


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For parents caring prevention of digestive deceases and resistance for their children.

Figure 18: Print ads no.2


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b. Advertising media:

In order to gain brand awareness of 85% target customers, based on media habits of target

customers and types and costs of messages, Yakult will use following media vehicles

including TV ads magazines and internet.

Television TV ads are the most popular

media type that our target

customers including young

women and families are

exposed. Because of good

mass-market coverage, cost

per exposure is low. It is the

most appropriate to appeal to

the senses.

HTV7 & HTV9 broadcasts

Obviously, HTV7 has attracted

the most proportion of HCM

citizens. It is effective for the

company to reach customers in

the city. Besides, the broadcast

are also at the top in Vietnam.

Scheduled 2 times per day

within the first month.

Magazines Beside with good pass-along

readership and high-quality

production, magazines has

also high geographic and

demographic selectively,

specifically for its two

separate target customers

such as young women and

parents.

The Gioi Phu Nu Magazine

One of the most popular

magazines with a wide

circulation of 130,000, targeting

at young women- our primary

In first two quarters, printed

advertisement will be appeared

in two issues in the first week of

each month.

Media types Specific media vehicles Media timing


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Figure 19: Proposed marketing mix

c. Evaluate advertising:

Advertising evaluation will be measured through sales effects. More specifically, past sales

will be compared with past advertising expenditures. However, in fact, sales are affected by

target customers.

Tiep thi & Gia dinh Magazine

Also one of the best-selling

magazines, with circulation of

110,000 and targeting

housewives. Thanks to its

credibility and prestige, the

advertorial of the company will

be more convincing.

Internet It is considered as one of the

least expensive media types

as well as having interactive

capabilities.

www.vnexpress.net

According to www.alexa.com, it

is at the top 3 sites in Vietnam,

with a wide audience base

attracted.

A banner will be advertised on

the website the week late of each

month.


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many factors besides advertising such as product price and features. Therefore, managers

should also consider these issues.

6.3 Sales promotion:

The primary objectives for sale promotion are to increase short-term sales as well as build

long-term market share.

Price packs:

Every customer who buys a box of our product (total 80 small bottles) will be given a free

extra bulk of Yakult (5 small bottles) in Tet Holiday, i.e. in first quarter of our campaign. In

fact, Tet holiday is the period of time customers consume products most in year, especially

foods and drinks as our products.

Coupons:

In the first month of this marketing campaign, in order to promote early trial and customer

preference of Yakult product, we will offer 5,000 coupons with a 10% allowance for each

total bill through delivery requirement within HCMC. These coupons will be offered at the

same time with our advertorials begins to appear to customers through Tiep thi & Gia dinh

and Phu Nu Magazines in the first issue. The reason is to stimulate their trials when they are

developed a good perception for Yakult through our attractive advertorials. In fact, compared

to total circulation of 240,000 each issue of the two magazines, we intend to offer only 5,000

valuable coupons for first home delivery requirement. That will help to stimulate customers

to delivery as soon as possible.

6.4 Sponsorships:

Actually, sponsorship for building company’s image as a community caring and responsible

is in term of Public Relations. The company has decided to sponsor for Suc Song Moi

television show in VTV1 and ‘The warm world for poor children’ charity program.


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Suc Song Moi Show in VTV1:

In current, this show is one of the hottest show in Vietnam,

which has attracted a huge amount of various audiences

especially families and women. The show covers so many

diverse issues in life including cooking, entertainment,

traveling, education, fashion and heath care. Beside with

sponsoring for this show, we will require to appear our

advertisement before each show. With the high density of broadcasting (at 11.am from

Monday to Friday every week), it is ensured to build a good image of Yakult to customers

with a good mass-market coverage.

Charity program:

The company intends to establish a charity program called ‘The

warm world for poor children’ in next quarter. In particular, the

company will draw part of its net profit (10%) to build a charity

fund for this program to buy 5,000 gifts such as for poor children

in HCMC at Christmas and Mid-autumn Festival. Besides,

thousands of Yakult Probioticss fermented milk bottles will be included in gifts.

6.5 Promotion mix budget:


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Promotion Mix Unit Cost in (000)

VND Units

Total Cost in (000)

VND Print Advertising

Phu Nu Magazine 4,500 12 54,000 Tiep thi & Gia dinh Magazine 5,000 12 60,000 Total Print Advertising 114,000

Television Advertising

HTV 7 9,000 60 540,000 Total Television Advertising 540,000

Online Advertising www.vnexpress.net 4,000 12 48,000 Total Online Advertising 48,000

Promotion Campaign

Coupons 4 10,000 40,000 Price packs 7 100,000 700,000 Total Promotion Campaign 740,000

Sponsorship

Suc Song Moi Show 300,000 1 300,000 Charity Program 50 5,000 250,000 Total sponsorship 550,000

Total Promotion Cost 1,992,000

Figure 20: Marketing budget

7. CUSTOMER STRATEGIES

7.1 Customer behavior

Armstrong & Kotler (2005) describe that “consumer buyer behavior is the buying behavior of

final consumers-individuals and household who buy goods and services for personal

consumption”. They also state that each of them has different motivation as purchasing.

However, base on the Model of buyer behavior (Armstrong & Kotler, 2005), it can be studied

and find out what/ where/ how/ how much/ when and the most difficult question: why customers

buy it.


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Figure 21: Model of Buyer Behavior

Source: Armstrong & Kotler (2005)

The starting point of this model is the marketing and other stimuli which will be processed to

enter buyer’s black box to generate buyer’s response definitely. Yakult looks into terms of the

consumer’s black box including buyer characteristics and decision process to identify how our

customers’ stimuli are changed into responses inside. For instances, when and where customers

would buy Yakult, how much they buy and why they would choose Yakult as healthy product

for skin and digest.

7.2 Characteristic affecting consumer behavior

7.2.1 Cultural factors

In order to discover new products to satisfy customers’ demands, spotting cultural shifts is

always required for marketers. In recent years, with developing life, Vietnamese people pay

more attention and increase spending for health care products (Hedley, 2007). Not only do make

outside more beautiful, Vietnamese consumers want to improve inside healthier. As a result,

fermented milk is considered as best choice for them to have gentle skin and good digestive

system (Vietbao.vn, 2008). Moreover, consumers aware that millions bacterium in it can help

them balance and adjust food digestion as well as decrease cancer danger of intestine.


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Taken advantage from this “cultural shift toward greater concern about health and fitness”, Yakult

has launching new product (fermented milk) into Vietnam food and beverage industry. So as to build

customers awareness of product advantageous, Yakult needs to advertise its feature on all media

including television, newspaper, magazines and internet as well. It will open to all classes of

Vietnam, especially for young lady and children.

7.2.2 Social factors

SaigonInfo (2007) states that Vietnamese family is traditional-oriented including many

generations: grandparents, married couples and children. Moreover, there are more than 26,335

households in Vietnam in 2007 (Euromonitor, 2007). The wife is the controller all expenses and

makes decision whether that product should be bought for family. Basing on this characteristic,

Yakult should consider placing its advertisements on Women magazines or publication related to

women. Also, it should pay attention on advertisement on television where housewives entertain

in free time.

Other target customers of Yakult are young ladies. They want to look brighter with beautiful skin

as well as healthy and fit body. As a result, Yakult should place advertisement on magazines

such as Tiepthigiadinh, Thegioiphunu or websites for young generation.

Children are one of target customers of Yakult. They have significant influence on parents’

purchasing. Vietbao.vn states that fermented milk is good for children digestion and increase

eating process. Consequently, on television advertisement, Yakult should add information

advantageous to children’s health to attract their parents on its product.

7.2.3 Personal factors

Occupation

Female population occupies 50% of Vietnamese population including young ladies or women

who are working in air-conditioner offices (Euromonitor, 2007). For a long time affecting by air-

conditioner, their skin will become rough and dry. As a result, fermented milk of Yakult is no

doubts to be the most convenient and healthy drink for them in order to smoothen and give

nutrition for skin from inside. Yakult should express that message on its advertisement on


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newspaper or magazines (by images of white-collar female worker with smooth skin or young

beautiful lady).

Life-styles

The second target customer of Yakult is parents with children, especially housewives who spend

amount of time on television and magazines besides housework. Taken advantage from this,

Yakult would have good indirect marketing from television and women magazines.

7.2.4 Psychological factors

Motivation:

Following the Maslow theory, there is an esteem need of women to seek for smoother skin and

fit body. Thus, Yakult should try to satisfy this need by expressing beautiful and healthy women

after using Yakult product on their advertisement in all media.

Belief & Attitude

Many people think that fermented milk is just normal yogurt. That means whether they use any

kinds of yogurt, they will have the same result such as healthy body and good digestive system.

This belief will result the wrong conception of consumers about Yakult product. Therefore, the

company should marketing to make clear about its differentiation in adding million of bacterium

beneficial for digestion in Yakult product.

7.2.5 Customer social classes

Armstrong & Kotler (2005) explain that middle class are white and blue-collars workers who

have average payment for household and personal consumption. According to http://state.gov,

the income of Vietnamese middle class in HCMC rose from $220 in 1994 to $726 in 2006. In

addition, they have job stability and above average knowledge as well as consider personal and

family health. Yakult also targets to the upper class which income rate is less growing than the

middle class. Both classes can easily get Yakult‘s friendly message for their better health:

decrease obstruction of digestion, increase the amount of good bacteria, and increase body

defense.

7.2.6 Customer’s buying decision behaviour


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The buying decision behavior for Yakult is complex buying behavior in which the consumers

purchase for high value brand name and seek a lot of product information before purchasing. In

fact, there are famous brand names of fermented milk product, for example Probi fermented milk

of Vinamilk – well-known brand name with Vietnamese consumers. Therefore, in order to

differentiate from Vinamilk and others, Yakult has to build good image and provide competitive

advantage of its product to consumers.

Figure 22: Types of Buying Decision Behavior

Source: Armstrong & Kotler (2005)

7.2.7 Customer’s buying decision process

Although there are several brand names of fermented milk in HCMC including Vinamilk and

Betagen, Yakult as a new comer with high Japanese technology is considered as new product in

Vietnamese food and beverage market. Adapting stages in Adoption process for new product

(Armstrong & Kotler, 2005) including Awareness, Interest, Evaluation, Trial and Adoption,

Yakult has started raising awareness about applying millions of Lactobacillus Casei Shirota

bacterium in its product to customers. Then, the company can skip two next stages to go through

the third stage by giving samples in supermarkets. Finally, as consumers find Yakult as healthy

product, they decide to use it regularly.


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8. Distribution strategy

8.1 Distribution channels:

Currently, the main distribution channel of Yakult Vietnam Company focuses on retail stores

and supermarket in districts 1, 3, 4, 5, 8, 10, 11, Binh Thanh and Phu Nhuan districts.

In addition, so as to give the best service for customers, Yakult provide ‘Yakult Lady’ delivery

system in district 11, Phu Nhuan district and some near regions (www.vnexpress.net, 2008). In

future, the company will broaden this system to other districts in HCMC. Yakult female

deliverers will distribute products right to homes or offices as well as give good advices for

customers to have better lives.

Figure 23: Yakult’s distribution mix

Retail Stores

Supermarkets

“Yakult Ladies”


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8.2 Warehouses

After opening the manufacturer in use at Singapore – Binh Duong industrial zone in April 2008

(www.vnexpress.net), Yakult has distributed products directly to retail stores and supermarkets.

Each stores and supermarkets have their own warehouse for Yakult product storing. Those

warehouse can help Yakult Vietnam to decrease warehouse fee and transportation cost.

However, those need to equip suitable fridge to store Yakult product in appropriate atmosphere

from 8- 10 degrees.

9. SALES & FINANCIAL FORECAST Our predictions are based on the following assumptions:

Unit sales in HCMC = 1/5 total production in the whole country (73,000 bottles/ day

now, increasing to 865,000 bottles/ day after 1 year).

Offered price = VND 18,500/ 5 bottle pack

COGS = 30% sales revenue

Total marketing cost = Print + TV + Online (1 year) = VND 700 million

Depreciation: 2007, factory investment was $26 billion for 50 years.

During the first 2 years, it will depreciate $1.2 billion/ year

Depreciation 1 month = $100,000 = VND 1,650 million

Rent (including offices and warehouses) = VND 500 million/ month


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PROJECTED INCOME STATEMENT, next 12 months

in (000) VND Revenue

Before Mktg plan

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total

Unit produced (/day) 73,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 650,000 700,000 750,000 800,000 865,000 6,915,000 Unit sales (/day) 14,600 60,000 70,000 80,000 90,000 100,000 110,000 120,000 130,000 140,000 150,000 160,000 173,000 1,383,000

Monthly unit sales 438,000 1,800,000 2,100,000 2,400,000 2,700,000 3,000,000 3,300,000 3,600,000 3,900,000 4,200,000 4,500,000 4,800,000 5,190,000 41,490,000

Sales Revenue 1,620,600 6,660,000 7,770,000 8,880,000 9,990,000 11,100,000 12,210,000 13,320,000 14,430,000 15,540,000 16,650,000 17,760,000 19,203,000 153,513,000 Revenue (/day) 54,020 222,000 259,000 296,000 333,000 370,000 407,000 444,000 481,000 518,000 555,000 592,000 640,100 5,117,100

COGS (30%) 486,180 1,998,000 2,331,000 2,664,000 2,997,000 3,330,000 3,663,000 3,996,000 4,329,000 4,662,000 4,995,000 5,328,000 5,760,900 46,053,900

Gross Profit 1,134,420 4,662,000 5,439,000 6,216,000 6,993,000 7,770,000 8,547,000 9,324,000 10,101,000 10,878,000 11,655,000 12,432,000 13,442,100 107,459,100 Expenses Advertising 20,000 45,000 45,000 50,000 50,000 50,000 60,000 60,000 70,000 70,000 70,000 65,000 65,000 700,000 Utilities (5%) 81,030 333,000 388,500 444,000 499,500 555,000 610,500 666,000 721,500 777,000 832,500 888,000 960,150 7,675,650

Depreciation 1,650,000 1,650,000 1,650,000 1,650,000 1,650,000 1,650,000 1,650,000 1,650,000 1,650,000 1,650,000 1,650,000 1,650,000 1,650,000 19,800,000

Entertainment/ PR 10,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 144,000 Insurance 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 180,000 Maintenance 25,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 600,000 Management fee 200,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 3,600,000

Rent 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 6,000,000

Salary (15%) 243,090 999,000 1,165,500 1,332,000 1,498,500 1,665,000 1,831,500 1,998,000 2,164,500 2,331,000 2,497,500 2,664,000 2,880,450 23,026,950

Supplies (5%) 81,030 333,000 388,500 444,000 499,500 555,000 610,500 666,000 721,500 777,000 832,500 888,000 960,150 7,675,650

Telephone 40,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 600,000 Delivery (1%) 16,206 66,600 77,700 88,800 99,900 111,000 122,100 133,200 144,300 155,400 166,500 177,600 192,030 1,535,130 Miscellaneous (3%) 48,618 199,800 233,100 266,400 299,700 333,000 366,300 399,600 432,900 466,200 499,500 532,800 576,090 4,605,390

Total Expenses 2,929,974 4,553,400 4,875,300 5,202,200 5,524,100 5,846,000 6,177,900 6,499,800 6,831,700 7,153,600 7,475,500 7,792,400 8,210,870 76,142,770

% of sales 180.8% 68.4% 62.7% 58.6% 55.3% 52.7% 50.6% 48.8% 47.3% 46.0% 44.9% 43.9% 42.8% 49.6%

PBT (1,795,554) 108,600 563,700 1,013,800 1,468,900 1,924,000 2,369,100 2,824,200 3,269,300 3,724,400 4,179,500 4,639,600 5,231,230 31,316,330

Income Tax (28%) 0 30,408 157,836 283,864 411,292 538,720 663,348 790,776 915,404 1,042,832 1,170,260 1,299,088 1,464,744 8,768,572

Net Profit (1,795,554) 78,192 405,864 729,936 1,057,608 1,385,280 1,705,752 2,033,424 2,353,896 2,681,568 3,009,240 3,340,512 3,766,486 22,547,758

Mktg Investment 1,192,000

Cashflow (1,192,000) 78,192 405,864 729,936 1,057,608 1,385,280 1,705,752 2,033,424 2,353,896 2,681,568 3,009,240 3,340,512 3,766,486 23,739,758

ROI 54.62%


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10. CONCLUSION All in all, the marketing plan has proved its potential benefits. It’s high time

Yakult Vietnam act to gain customers’ awareness and compete with Vinamilk and

Capina!

11. REFERENCE Writer S 2008, Yakult Vietnam reportedly inaugurates yogurt factory, Food

Business Review, viewed 17 August 2008, <http://www.food-business-

review.com/article_news.asp?guid=58CEFBA7-912A-41CE-9AB9-

9A08DF2D586F>

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August 2008, <http://www.atimes.com/atimes/Japan/HF15Dh01.html>

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2008, <http://www.yakult.co.jp/english/pdf/history2007-08.pdf>

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<http://www.yakult.co.jp/english/htm/index.html>

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<http://www.yakult.co.jp/english/news/200708-02.html>

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<http://www.yakultusa.com/yakult/>

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Statistics office, viewed 26 August 2008, GMID database.

ACNielson 2008, Vietnam society: demographics and life style, Buying Behavior

course, Pakawat Kietisalsopon, RMIT University, viewed 16 August 2008, RMIT

Black Board.

Binh, M 2008, ‘Ad spending remains strong despite economic woes TNS Media

names top ten advertisers in Vietnam’, The Saigon Times Daily, 26 August,

viewed 27 August 2008, Factiva.


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McShane, S & Travaglione, T 2002, Organizational Behaviour on the Pacific

Rim, 2nd edn, McGraw-Hill Australia Pty Limited, Australia.

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sector at constant 1994 prices by industrial activity, viewed 26 August 2008, <

http://www.gso.gov.vn/default_en.aspx?tabid=470&idmid=3&ItemID=6403>

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survey: Major findings, viewed 26 August 2008, <

http://www.gso.gov.vn/default_en.aspx?tabid=515&idmid=5&ItemID=7245>

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http://vietnambranding.com/danh-ba/danh-ba-thuong-hieu/110/Vinamilk>

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August 2008, Factiva.

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Branch, 4 June, viewed 26 August 2008, Factiva.

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<http://www.webtretho.com/forum/showthread.php?p=1166546>

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Vinamilk Continues Rapid Ascent’, Business Monitor International, 14 August,

viewed 26 August 2008, Factiva.

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VN/40089687/87/>

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12. Appendix: 12.1Appendix 1: Consumer Expenditure by Purpose (% Analysis): 1990-2015

% of total consumer expenditure

1990 1995 2000 2005 2010 2015

1990 1995 2000 2005 2010 2015

Food and non-alcoholic

beverages 26.00 26.00 24.94 22.78 23.18 23.84

Alcoholic beverages and

tobacco 5.60 5.60 5.78 5.86 5.65 5.53

Clothing and footwear 8.60 8.50 8.19 9.23 10.20 10.24

Housing 8.70 8.60 8.58 8.66 8.22 8.66

Household goods and

services 8.70 8.60 8.51 8.76 8.74 7.77

Health goods and medical

services 7.93 7.83 7.71 7.64 7.78 7.90

Transport 12.57 12.42 11.96 11.87 11.21 10.70

Communications 1.16 1.15 1.55 1.76 1.66 1.64

Leisure and recreation 5.03 4.97 4.90 5.08 4.87 4.95

Education 7.54 7.45 7.36 7.48 7.44 7.50

Hotels and catering 5.00 5.90 6.11 6.44 6.55 6.86

Misc goods and services 3.18 2.99 4.39 4.43 4.50 4.41

TOTAL 100.00 100.00 100.00 100.00 100.00 100.00 Source: National statistical offices/OECD/Eurostat/Euromonitor International

12.2Appendix 2: Population structure by age group and sex, Vietnam 1/4/2007


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(Information adopted from General Statistics office 2007)

12.3Appendix 3: Age specific fertility rate for the whole country from 1/4/2006 to 31/3/2007 by urban and rural areas.


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10.4 Appendix 4: Coop-mart network service in Ho Chi Minh City

1. CO.OPMART CỐNG QUỲNH ĐC: 189C Cống Quỳnh, P.NCT, Q.1, Tp.HCM Tel: 08. 8325239 Fax: 08. 9253615 2.CO.OPMART NGUYỄN ĐÌNH CHIỂU ĐC: 168 Nguyễn Đình Chiểu, P.6, Q.3, Tp.HCM Tel: 08. 9301384 Fax: 08. 9301386 3.CO.OPMART ĐINH TIÊN HOÀNG ĐC: 127 Đinh Tiên Hoàng, P.3, Q.BT, Tp.HCM Tel: 08. 5100092 Fax: 08. 841 8227 4.CO.OPMART THẮNG LỢI ĐC: 2 Trường Chinh, P.Tây Thạnh, Q. Tân Phú, Tp.HCM Tel: 08. 8155483 Fax: 08. 8152969 5.CO.OPMART PHÚ LÂM ĐC: 6 Bà Hom, P.13, Q.6, Tp.HCM Tel: 08. 7514798 Fax: 08. 7514800 6.CO.OPMART TRẦN HƯNG ĐẠO ĐC: 727 Trần Hưng Đạo, P.1, Q.5, TP. HCM Tel: 08. 8382886 Fax: 08. 923 9496 7.CO.OPMART ĐẦM SEN ĐC: 3 Hòa Bình, P.3, Q.11, Tp.HCM Tel: 08. 8589968 Fax: 08. 8608516 8.CO.OPMART NGUYỄN KIỆM ĐC: 571 - 573 Nguyễn Kiệm, Q. Phú Nhuận, Tp.HCM Tel: 08. 9972477 Fax: 08. 9972479 9.CO.OPMART HẬU GIANG ĐC: 188 Hậu Giang, P.6, Q.6, Tp.HCM Tel: 08. 960 0913 Fax: 08. 960 0254 10.CO.OPMART PHÚ MỸ HƯNG ĐC: Đại lộ Nguyễn Văn Linh, P. Tân Phong, Q. 7, Tp.HCM Tel: 08. 4120084 Fax: 08. 4124944 11.CO.OPMART XA LỘ HÀ NỘI ĐC: 191 Quang Trung, Q.9, Tp.HCM

Tel: 08. 7307233 Fax: 08. 7307240 12.CO.OPMART BMC ĐC: 254 Lũy Bán Bích, Q. Tân Phú, Tp.HCM Tel: 08.9734024 Fax : 08.9736312 13.CO.OPMART LÝ THƯỜNG KIỆT ĐC: 497 Hòa Hảo, Q.10, Tp.HCM Tel: 08. 9572857 Fax: 08. 9522843 14.CO.OPMART AN ĐÔNG ĐC: 18 An Dương Vương, Q.5, Tp.HCM Tel: 08. 8352612 Fax: 08. 8352592


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Information adopted from the website of Coop-mart http://coopmart.saleoff.com.vn/store/news.aspx?NewsID=184&StoreID=353 Appendix 5:

Source: Euromonitor International from national statisticsNote: Figures for 2007 onwards are projections

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