Vinamilk Marketing Analysis

Vina take out Marketing AnalysisThis news report aims to analyse how the strategic operational mathematical serve well and management contributed to the business vision of Vinamilk which is becoming the leading milk products manufacturer in Vietnam. First of all, by identifying precisely customers expectations of corporation products, the operations execution of instrument objectives allow be determined in order to make the process of producing and delivering products could be urbane efficiently. These objectives ar aiming for the final purpose of the whole process is providing products in a way that maximise customers satisfaction.Secondly, the performance objectives identified in the former part will then be translated into significant action which is designing the manufacturing process. Put simply, manufacturing process of the federation will be designed appropriate for what the company is trying to achieve. The chosen process design also inescapably to match with the c haracteristics of an output resources and it is manifested with lay-out.Finally, some recommendations will be provided in order to cut through the shortcomings that the company has been facing in managing its achievement and delivery process1.1 Background of companyVinamilk company established in 1976 as the Southern Coffee-Dairy Company, then renamed to linked Enterprises of draw Coffee Cookies and Candies I in 1978 and finallyVietnam Dairy Company was formally established in 1993. In 2003, follows its IPO to the Ho Chi Minh investment company Exchange, the company legally changed its name to Vietnam Dairy Products Joint Stock Company (VINAMILK). The company is a state owned reckonprise in which the government owns some 50.01 % of the sh bes and the rest of the sh bes are currently active trading at the Ho Chi Minh Stock Exchange.The principal activities of Vinamilk are manufacturing and distributing products derived from milk such as fresh-milk, condensed milk, powdery mil k, yogurts, ice-cream, cheese and early(a)s drinks such as growth juice and soya milk. According to Euromonitor, it has been the number dairy player in Vietnam for the three years ending 31 December 2007.From its equitization in November 2003 to now, the sales of Vinamilk have experienced an average growth rate of 21%/year. In 2009, total sales of Vinamilk have reached a come in of over VND 10,000 billion and its profit also has got the highest amount ever before.Vinamilks main competitors and Dutch Lady Vietnam, a division of Friesland Foods, Nestl Vietnam, Abbott, Mead Johnson, Friso and Nuti viandsCustomerBasically, when any company decides to enter a market place, identifying its target markets is the very key thing needed to do. By doing so, a company will define precisely the concourses of finicky customers it wants to serve and consequently could get castigate products or run to a right person or company. In order to target the market, a company would firstly share its market into smaller segments, each segment is a group of purchasers with the same set of needs and buyer behavior Back to Vinamilk, by breaking up its market based on analysing demographic and geographic variables, it can be seen that Vinamilks goal is to satisfy all customers from kids to elder in any occupation. Especially, the group of kids on a lower floor 14-years-old is considered the target market that Vinamilk wants to come forwards. In the present measure, Vinamilks segment in rural areas and small towns has been weak, thus, this segment will also become the target market which Vinamilk want to focus more in the early future. With the products which is directly refers to the health of customers as Vinamilks products, fictitious character unendingly is the issue that the customers cope the or so. Products need to match with the essential for hygienic and safety food and the ingredients need to be ensured their orginal resources. Otherwise, contrastive customers will have different taste and different preferences, but generally their preference always change, they could also willing to try a new product, new flavor or even the same products with a new layout design. In addition, one of the most important element when choosing a product is equipment casualty, a product with good quality and acceptable price in comparison with other products will be regarded as a sucessful product. These three elements mentioned above are the expectments of customers to Vinamilk products. later on packaging, products are delivered to consumers through two distribution channelsTraditional channelDistributors Outlets ConsumersModern good dealSupermarkets / Metro ConsumersThe distributors, supermakets and outlets are regarded as the internal customers of the company in the supply chain. Delivering products on time is considered the most important thing in which the company needs to concern. If the delivery process because of some reasons are delayed, it wi ll lead to many problems, in which might directly influence to their businesses.CONSUMERS3.0 OperationsINPUTRESOURCESTRANSFORMATION care forOUTPUT RESOURCESFigure 1.1 Operations through-put process(Source Slack et al.2009)Transformed ResourcesRaw materialsMain ingredients for products derived from milk imported milk power, fresh milk from domestic farms.for other productsfruit juice, soya beanOthers ingredientssugar,Transforming ResourcesFacilitiesProcess technologyInternational standard assembly lineModern manufacturing facilitiesStaffGroup of skilled engineers who withstand automatonlike systemsRaw materials quality analysisProcessing raw materialsFinal quality testing processingPackagingFinished productsAnalyze the 4VSHigh volumeVinamilk products are produced at 9 factories with the high capactiy approximately of 570.406 tonnes per annum and distributed to all provinces of the country. The manufacturing processes are taken systematically from processing raw materials to packag ing finished goods. In each process, a team of staff as engineers and workers will directly specialize in tasks related to this process. Their tasks are repeated and systemized in the standard procedures, t presentfore it is often deserving developing specialized technology that gives higher processing efficiencies ( Slack, et al).Low varietyThe product portfolio of Vinamilk is diversified with over 200 different types of products however except fruit juice and soya milk, all products are derived from the main resource is milk( www.vinamilk.com.vn). Raw materials are gone through the confusable processing stages, could have some different preparation in the next stages, but it doesnt impact much on the standardization systems.Low availability (Rowbotham et al)With the stable and predictable demand from customer for dairy products, Vinamilk is always actively the way it produces and distributes products to market through maintaining the stability of milk material sources. Although ice-cream products are products have the seasonal charateristic, with the demand of it in the summer time higher than other season, its changing demand doesnt impact much on the general production situation of the company.Low visibilityThe way Vinamilk analyses its customerss behaviour essentially depends on salespersons who are committed to understand the consumers preferences in their regular contact with customers across different outlets.Performance ObjectivesThe objective of the production management is to produce goods and work of Right Quality and Quantity at the Right time and Right manufacturing cost (Kumar Suresh,2009)QualityQuality means doing things right, trying to satisfy customers by providinggoods and serve which are fit for their purpose. The quality advantagein manufacturing and service operations can be achieved through askilled workforce, adequate technology and in force(p) communication ofquality standards and job specifications.(Rowbotham,2007)Being the co mpany operating in the food branch, quality is regarded as the first important objective that Vinamilk needs to care for. All Vinamilk products are produced by the modern system machines and closely controlled by the International Quality Control Standards of ISO 9001 2000 and HACCP certified by the world leading corporations. These productss quality are also ensured to fully announce as stipulated by the Laws under the direct and indirect supervision of competent authorities. With such the control process and exact supervision of competent authorities, released Vinamilk products are qualified with food quality, hygiene and safety standards in accordance with the published standards. Additional, the stability of milk material sources is extremely important as it helps Vinamilk maintains and increases the productivity. As a result, Vinamilk have established stable relationships with suppliers and have committed to purchase high quality fresh milk at the highest price. The companys f actories, which are located in strategic locations costly farms of milk cows, enable the company to maintain and improve these relationships with suppliers.SpeedAn extensive distribution network located across the nation with 201 distributors and over 141,000 outlets in 64 provinces and continued being expanded over time allows Vinamilk to bring its core products to consumers in a fast and effective way. In addition, Vinamilk has a range of modern factories located along the country that helps to reduce transportation expenses as well as to make a way the companys products are distributed to customers becomes easier and more convenience. Furthermore, the company has two transport enterprises, one is located in suburbs of Hanoi specialised in distributing products for Southern, and one is the main distributor for Northern, which is placed at Ho Chi Minh stuburb.FlexibilityFlexibility means being able to change what you do to respond to changes in customer requirements in terms of t he products and services design, volume, mix and delivery times. This can be achieved through dependable suppliers, mobility of multi-skilled labour, and versatile equipment, etc. The product portfolio of Vinamilk is so diversified and successfully satisfies the increasing various demands of consumers. The company owns 3 core brands, in which Vinamilk and Dielac are two key brands and Vfresh is a new one but it offers a peachy potential for development. Vinamilk products are divided up into 6 groups and each group also consists of specific brands for specific customers.For instance, group of powered milkDiealac Alpha for kids.Dielac Pedia for children with poor appetite and malnutrition.Dielac Mama for pregnant and boob feeding woman.Group of liquid milkFor Adults ( 100% Fresh Milk, UHT Milk Flex)For kids ( UHT Milk kid)Vinamilk has continuously introduced to the market its new products to meet the diversified demands of consumers, including Vinamilk Aloe Vera Yogurt Milk with ri ch source of vitamin A and E, Dielac Diecerna, Vinamilk Slimming Milk, orange smoothies, etc..CostWith the manufacturing milk products like Vinamilk, milk materials sources being one of the main bought -in items which has a great influence to the price of products. The fluctuations of input resources may be due to many causes, however in general the increase of input resources will lead to the increase of finished products. In order to stabilize the price of products, Vinamilk has established stable relationships with suppliers and till now approximately 60% milk material has been bought from domestic sources. Vinamilks factories are located near farms of milk cows, enable the company to maintain and improve these relationships with suppliers as well as help the company to limit the costs incurred from delivering milk material.reliablenessDependability means the ability of a firm to deliver a product for customers with the exact time promised. Customers might judge the dependability of an operation yet later the product and service has been delivered.For instance, one supermarket is the distributor of Vinamilk, the delay of delivering products is shown clearly in the way the supermarkets sheves have been being empty for a long time. This trouble has the capacious impact to the business situation of the supermarket while its customers can not find the product they need, and so on.The delay of delivering products to customers may be caused by many reasons in which the most important reason is the quality of manufacturing process. One stage in the process goes wrong, will lead to a whole manufacturing get troubles. If the company does not do well to perform dependability, the delivery is always late, therefore the company itself will lose the goodwill of customers. As a milk company, Vinamilk considers quality is the go past target, therefore, its processes have been designed as a error-free process in which some unpredictable errors that may affects the qual ity of finished products will be minify. Vinamilk is one of the companies that throw the HACCP approach in manufacturing process. The HACCP approach is a scientific system for food safety assurance (Nguyen et al.,2004). Its main purpose is to provide a system whereby food businesses can control quality and safety throughout the entire food operation.(Applying quality function deployment in food safety management, British Food journal Vol. 112 No. 6, 2010 pp. 624-639).( Source Slack et al.2007)Figure 1.2 Polar diagram for Vinamilk3.0 Process designThe whole point of process design is to make sure that the performance of the process is appropriate for what the operation is trying to achieve(Slack et al,2007). Therefore, it can be said that operations process design is an translation of performance objectives. A question here is What type of process design currently adopted in Vinamilk?Generally, the basic process for all products in Vinamilk is the same. Raw materials are tested, p rocessed, contained, then containers are filled, capped, denominate and packed. Inspections are carried out at appropriate stages.Therefore, an idea to adopt caboodle process can be given. In a batch environment, the basic machinery is mend in place, but it is used on different batches of different products( Rowbotham et al,2009). For instance, raw milk and other main raw materials all need to pump into the preventation silo from which the milk will undergo the sterilization process. (http//www.dairyvietnam.org.vn/).In this example, sterilizing machine is fixed machine, it can be used to sterilizing say, a batch of whatever yohurt, freshmilk or powered milk. After sterilizing, raw milk is undergone four more processes such as homogenising, spliting a certain amount of butter from milk, final processing and packaging. Some appropriate readjustment of parameters can be carried out in order to produce different type of products. Like for whole milk products and low fat products, bu tter will be added until it reaches the level of fat at 3.25 percent and 1 percent, respectively in the processing.Read phoneticallyHowever, because of the high volume characteristic of output resources, the production processes have been conducted repetitive, thus, it could be said that the whole manufacturing process of Vinamilk is also a mass process.Basically, flowlines are inflexible because of the design just allows to produce a particular product at a particular rate of output. Therefore, if demand for the product changes, capacity cannot be easily increased and reducing output simply reduces recitation and may result in very little cost saving.An idea of the process design that mixed between batch process and mass process applied in Vinamilk is called group technology will overcome drawbacks of batch and mass process individually. Group Technology (GT) is the analysis and comparisons of items to group them into families with similar characteristics (Kumar Suresh, 2009).Row botham et al., 2007 has the account of group technology as belowsGroup technology can be seen as an attempt to obtain some of the cost benefits of flowlines in a batch environment.A company manufacturing 200 different products will often find that these products fall into families based upon their manufacturing characteristics, and a group of perhaps ten products could require very similar processing in terms of machinery, process sequence and operation times. While the demand for each product individually will not be great enough to justify utilize plant and labour, the output for the whole group may be great enough to justify setting up dedicated facilities. The group technology organization rarely leads to fully fledged flowlines and is more likely to lead to small manufacturing cells containing the necessary plant and labour for that group of products. Set-up and control are easier and transport is reduced compared with batch operations. Compared with both batch and flow opera tions, workers can see the context of their work within the overall scheme since group technology cells are usually small enough so that all process stages are visible from every point.The process design is expressed through layout which is simply understood as the physical arrangement of production facilities used in production. The basic aim of a group technology layout is to identify families of components that require similar of satisfying all the requirements of the machines are grouped into cells. (Kumar Suresh, 2009). Vinamilk could consider a group technology organization based upon the five groups of products identifiedGroup of pulverised milk and infant cerealsGroup of condensed milkGroup of liquid milkGroup of yogurt, ice-cream and cheesesGroup of fruit juice, soy-bean milk, purified waterIt means that five cells layout are designed and each of them is capable of satisfying all the requirements of the component family assigned to it. In another word, all the components assigned to a cell are almost processed within that cell itself. Like the cell of powdered milk and infant cereals has the process line which comprises sterilizing, drying, additional micronutrients, mix, containing and packaging process. The cost of transportation and equipments are minimized in group technology layout. Furthermore, group technology is help to reduces production planning time for jobs as well as set-up time.4.0 ConclusionIn conclusion, this report gives an illustration of how important operations management has contributed to the success of Vinamilk in Vietnam market. First, Vinamilk understands what is important for its customers includes high quality, stable cost, a wide range of products and reliable delivery.Seconds, the way it produces and delievers its products is right for the market. Thereby Vinamilk can indentify the order- winning and qualifying objectives isprice and quality, range of products, respectively. The internal performance objectives are also d etermined as cost, quality and speed.5.0 RecommendationAt the present time, the manufacturing process of Vinamilk is being proceed well which is reflected in the ways Vinamilk have applied the lastest technology in manufacturing and packaging for all factories. Vinamilk is also the only company in Vietnam which possesses the system of machines that uses the eject-deciccation technology by Niro Denmmark, a world leading company in industrial desiccation technology. The company should maintain and bring up the results achieved in the future