Marketing are the activities involved in the transfer of goods from producer to consumers such as advertising, storing, shipping and selling. The marketing principles are the ideas which form the basis of most product promotion strategies. The marketing principles are used by the companies to optimize the market performance of the existing products and to successfully launch products into the new market. This report includes the situational analysis of the Vinamit which is a Vietnam based company aims to bring Vietnamese agricultural products to the new level. The company is raising the value of agricultural products to the world. The air-dried banana is made available by the Vinamit and it is available all over the stores, supermarkets and convenience stores. This report includes the description of the company along with the product description. The marketing environment is also defined in the terms of micro and macro environment. The microenvironment identifies the factors in Vietnam like suppliers, customers, marketing intermediaries, competitors and public. Whereas, the macro environmental factors includes factors like demographic, economic, natural, technological, technological, political and cultural. Further the SWOT analysis has also been explained to identify the strengths, weaknesses, opportunities and threats of the Vinamit. Finally the STDP model has been defined to easily segment, target, differentiate and position. The company can make use of STDP to segment group of customers and targeting strategy to target the segment. It even helps to differentiate products of the company and positioning.
Vinamit is one of the leading company which possesses post-harvest food processing technologies. The company is achieving success from many years by maintaining hygiene in Vietnam and around the globe. It has even attained and certificates of food safety. It was established in Vietnam in the year 1988. Its factory was located in Nha Be with technology and equipment were imported from Taiwan. It started to export to China in 1977 which is currently one of the largest markets of Vinamit. Vinamit has a mission to bring customers spices of life from nature through its products range. The company also aims to help farmers and find outlets for the harvest products (Armstrong, Adam, Denize and Kotler, 2014). It has also the mission of encouraging farmers to nurture. The CEO of Vinamit is Nguyen Lam Vien who is also chairman of the company.
Vinamit sells products all over the small, big stores, supermarkets and convenience stores across the country. The dried fruit products of the company have been exported to many countries like China, Thailand, Singapore, Japan, the US, and Europe. The company offers frozen fruits, vegetables, air dried fruit, vacuum fried fruit, freeze-dried fruit, nut candies, chocolate covered air dried fruit and more. This report includes a description of the Air-dried banana. The air drying process maintains the drying chamber temperature at 50-70 degree Celsius which is equal to the drying temperature under the sun. The air-dried banana ensures food safety and they are not exposed to the external environment. It retains the quality of the original fruit. These can be preserved for the longer time than the fresh fruit. Vinamit occupies more than 80% market share and has the productivity of 10,000 tons per year. The products of the Vinamit are popular enough and has won the title of Vietnamese high-quality products for the ten successive years.
It is the biggest goal of the companies to provide constant quality production for the customers. These try to minimize the risk by building a close relationship with reputable suppliers. This effort is made to ensure quality and sufficient raw materials for the production. All the materials should be confined by the authorities (Testa, et. al. 2016).
The companies transfer the product units to the customers with the help of marketing intermediaries. It is important to function of the companies and not possible without the involvement of the marketing intermediaries (Bagwell, 2018). This category includes distributors, whole sellers, retailers and more. There is more trend of selling products through intermediaries in Vietnam than selling directly. The intermediaries provide the warehouse where manufactured goods purchased are initiated. They assist the companies in sales promotion and advertising activities.
The food is one of the top things on which Vietnamese people spend their money. They have various food choices. The economy is continuously developing significantly despite facing difficulties. There are various food companies that guarantee food safety and hygiene. The companies active in Vietnam are Kirin, Sky investment, Akuruhi etc. The customers prefer to choose products which are upgraded and contain hygiene. So, the customers automatically move to the company providing such features (Rahmah, Sumarwan and Najib, 2018).
There exists both traditional and modern type of retailers in Vietnam who compete with each other. Various foreign food companies from Japan, South Korea, and Thailand have set up the distribution systems in Vietnam. These companies aim to attain a high market share in this high potential market. The competition is becoming tougher between the domestic and foreign companies. The foreign companies have even invested in department stores and supermarkets. It is claimed that the Thai retailers have captured almost 50% of market share in Vietnam (Ummah, et. al. 2018).
The public in Vietnam is willing to purchase air dried fruit which is positively linked to health and safety. Whereas, the females appreciate the nutrition value contained in the fruits. The environmental and sustainability concerns do not influence the purchasing decisions of the public. Due to the perceived superior quality, the public is not priced sensitive for the air-dried fruits.
The microenvironment affects the Vinamit's ability to operate in Vietnam as lack of suppliers affect the production process of the company. The availability of the raw material depends on the suppliers. It is the key issue which is faced by the company in producing air dried bananas. The customers has a role in the changing taste and preferences. The issue is finding in matching the taste of the customers. These two factors affect most to the company.
The macro environment includes the factors given below:
Demographic factors: Vietnam has a small surface area and ranks 65th in terms of land mass alone. The country is spread in 331,210 square kilometers. 7.1% of GDP is spent on health care, clean drinking water, and sanitation facilities (Guilmoto, Dudwick, Gjonça and Rahm, 2018). The 97.6% of the population has improved access. In the terms of the religious preferences, 7.9% are Buddhists, 6.6% Catholic, 1.7% Hao Hao, .9% Cao Dai, .9% Protestant, .1% Muslim and no preference towards religion is 81.8%.
Economic factors: Vietnam is a developing country with a strong GDP growth rate. The GDP in 2015 was 6.68% which was higher than the growth of the past years from 2011 to 2014. It has always been an issue for Vietnam to control and stabilize inflation. The local economy has achieved a breakthrough development in 2015 which is a good basis for rapid progress. The Reserve Bank has also reduced interest rates to attract investors and boost spending of the customers. This assistance can create an issue of competition for the Vinamit. The government has also made policies as supporting land rental, improved business procedure and tax relaxation (Brundenius and Le Dang, 2014). The tax system in Vietnam remains the time consuming, although the government has reduced corporate income tax from 25% to 22%. It has become a largest hurdle to the business operations in Vietnam as each tax payer has to spend an average of 872 hours a year for the tax payments.
Natural factors: The climate in Vietnam is tropical and monsoonal. The temperature varies between 5- 37 degree Celsius. The 51% of the land is used for the agricultural purpose. The national environmental agency is responsible for environmental protection. The land use pressure has led to significant environmental problems comprising deforestation, soil erosion, flooding and more. So, the company can face the issue in getting raw material (Edge, Newbold, and McKeary, 2014).
Technological factors: The shortage of power is increasing with the increasing demand in Vietnam. The internet can be accessed at a reasonable price. The technological factors in Vietnam enhance framework conditions for the innovation. It even strengthens the human resource base for innovation. It even fosters innovation in the business sector. So, the company has to foster innovation from time to time.
Political factors: Vietnam is popularly known as a communist country with only one political party since 1975. It is considered that it has brought stability to the economy. The stable political background is capable of attracting overseas investors and it helps to strengthen the economy. The corruption was never been worse as the economy grows. The single party is blamed for the corrupt activities. The government has even signed a directive on enhancing the exposure and treatment of corruption. It has also closely coordinated with the investigating agencies to handle the cases involving corruption. It is the positive step taken for gaining trust from the investors (Gillespie, 2017).
Cultural factors: The people in Vietnam prefer to eat crunchy food. Vietnamese food contains various spices to enhance the flavor of the meal. Food is one of the four pleasures in life so the people in Vietnam are interested in food and high expectation for their food. People believe in good taste, nutrition as well as presentation. The taste preference of the people is clearly distinguished. It is a challenge for the company to create the perfect flavor. The culture of organic food is not the same as Vietnam in the rest of the world (Bruwer and Li, 2017). So, Vinamit faces a challenge when it comes to export the products.
The macro environmental factors affect the Vinamit's ability to perform in Vietnam. The company is affected by political factors. The government is exposed to corruption, ultimately which affects the functioning of the company. The people in Vietnam prefer to eat crunchy food whereas Vinamit produces air dried bananas not air fried (Nielsen, Asmussen and Goerzen, 2018). People tend to go for the taste than the health benefit. The company focuses on producing food which is enriched with the nutrition. So, the issue is faced when the public wants crispy and spicy food whereas the Vinamit provides the air dried and healthy food.
The SWOT analysis is important in penetrating the market. Vinamit makes use of decision-making tool to access the market.
Reliability: Vinamit has a stable position in the dried fruit industry of Vietnam market. It occupies 80% market share in Vietnam. The products of the company are exported to many countries like China, Japan, Thailand, Singapore and more. It is even sustaining its product quality by international certificates like HACCP, ISO, FDA etc. the company is constantly getting positive feedback from the customers.
Natural material: People tend to be choosy to select imported food products. They focus on the source, essence, and ingredient. Due to variation in the flavor, Vietnamese market is more likely to pay attention to the tropical fruits like Litchi, Jackfruit and more. The products of the Vinamit are made of tropical fruits as well as flavors liked by the Vietnamese people.
Technology: Vinamit makes use of the vacuum drying technology from the USA. The company even prevents oil seepage into the product. The raw fruits are quickly frozen just after the harvesting with the help of the IQF technology. Then the fruit is processed by methods like air fried, fried vacuum and packaging (Gill, Ricciardi, Bates and James, 2017). The products of the company are processed without making use of any chemicals, sugar, preservatives, sugar, and acid which maintains the nutrition of the product.
High production costs: The processes carried out in the Vinamit includes huge expenses. The vacuum drying technology has been imported by the company from the US. Time to time the company needs to update with the technologies and import the subsequent. So, the company is required to keep apart its huge investment for the enhanced process.
Limited technical expertise: The company use advance kind of techniques in its production process. So, it requires advanced technical experts to conduct the process. The experts are required to possess advanced skills and experience (Hoang, Hoshino and Hashimoto, 2015). Unfortunately, the company faces problem in getting technical experts.
Irregular supply of the organic produce: Vinamit faces a problem in getting a supply of the organic produce. The irregular supply of the product creates a problem in the production of the company. It does not affect the production process but profitability also. The company has to even stop the production due to non-availability of the raw material.
Lack of quality planting material: If the company does not get the quality raw material than it cannot produce the quality products in Vietnam. The problem of the quality planting materials is faced due to the poor soil fertility. Sometimes the company has to compromise the quality due to the non-availability of the raw material.
Promoting a healthy lifestyle: Vinamit has attained opportunities due to the growing interest and awareness of the people towards healthy food products. The company offers various healthy options like frozen fruits, air dried, nut candies and more. The air-dried products like a banana are more in the trend due to the beneficial factors (Ibrahim and Mas’ud, 2016).
Developing local organic suppliers: The company produces air dried bananas in Vietnam and it purchases raw material from the local producers only. It helps in developing local organic suppliers. It also increases the GDP of the country. The organic producers are also likely to huge to match up the demand of the company. The local suppliers have been corresponding growth from 2004.
Reduces dependence on the import: The sufficiency of the local producers helps the company to reduce dependence on the imports for the raw material. The less dependency on the imports stimulates demand in the home country. It pushes the growth of the suppliers in Vietnam.
Employment opportunities: Vinamit creates employment opportunities in Vietnam. The dependency on Vietnamese suppliers motivates them to produce more raw material along with maintaining quality. The company had initially 200 employees. Now with the increasing production, the employment opportunities are constantly increasing in the company. The company requires skilled employees to carry on the process.
Global competition: The trend of healthy food is increasing so there are various companies worldwide which are producing the same products. Vinamit faces competition immense competition from them. There is not just competition of producing quality products but it also faces the pressure of using updated technology for producing goods.
Variability in the climate pattern: The variability in the climate pattern creates a difference in the quality of the raw material. As a result, difference is felt in the taste of the products (Le Dang, Li, Nuberg and Bruwer, 2014).
Pest and disease incidence: The pests are used to prepare food in a short duration of time. But it puts an impact on the quality of the fruits (Karam, 2016). Using too much pest affects the nutrition contained in the fruits.
Higher certification costs: The company is required to attain various certificates in Vietnam to ensure quality and standardized parameters. The certificates like HACCP costs higher for the company which certifies the food safety. There are some other certificates which are held by the company like FDA, HALAL, KOSHER, Organic EU and Organic USDA certification.
Age – Air dried fruit is loved by all individuals as it is enriched with high fiber and Vitamin C, however, it is more tends towards the children and middle-age people and thus it targets the young people having age groups of 15-40 years old (Anesbury, Winchester and Kennedy, 2017). Also, they target children as the product if good at reducing the risk of asthma in children.
Income – Vinamit set the price suitable for the people having middle or high income. Therefore, low-level income group people might not be attracted to this product due to the price factor.
The company is currently targeting all small, big stores, supermarkets and convenience stores across the country. Moreover, their products are also exported to many nations such as US, Europe, Japan, Singapore and many more. In terms of expansion, they are moving towards targeting more numbers of countries.
Social Class – The company is focusing on two social classes – middle and high classes.
Life Style – Their products like Air Dried Banana are suitable to variable lifestyles of consumers. More numbers of people have now inclined towards health-conscious products in Vietnam and this makes them eat more food which is full of fiber and other nutrients ingredient that helps in losing weight, improve concentration and reduce the risk of asthma in children (Diamantopoulos, Ring, Schlegelmilch and Doberer, 2014).
Regular Occasion - All the products of Vinamit are made for the regular occasion, which can be consumed one time on a daily basis. Mostly, children of the house need to be consumed Air Dried Banana daily.
Attitude towards the products – solemn and excited.
The company is using targeting strategy as Niche-marketing. It is ascertained that Vinamit products are available in all supermarket, convenience stores, small and big stores all across the country including in Hanoi, which is the capital of Vietnam. The company is also advertising their products via a differentiated marketing strategy. This many people over the globe know about the company fame i.e. when they opened in Vietnam and the goodwill of the name of Vinamit (Grünig and Morschett, 2017). The company is using niche marketing to market and advertise their products by using banners, discount banners in the convenience and big stores. Moreover, the company is also making their presence in the virtual world (digitally) by posting various stories on Facebook and Instagram page and with the making of certain sample recipes on their Youtube channel. As their products are exported to other countries, these platforms also help them to test the market of the respective country before the purpose of investing. However, Niche marketing helps them in increasing their efficiency and efficacy in the business with the help of low advertisement expense.
In addition, the company targeted this segment because it aids one of the most profitable areas. The middle age people income group have a stable income and also they are also more concern towards their children healthy and thus not show any tightness in spending money towards the products. This gives benefit to the company in terms of profitability and market share which helps the company in their future expansion.
In Vietnam, there are various aspects relating to product differentiation and Vinamit has considered about all such as product attributes, branding, packaging, labeling and support services. The company is doing well in assuring quality and special feature of their products like Air Dried Banana. The company is using chemical-free technology and retain the typical taste of the natural characteristics in Air Dried Banana including vitamin and nutrition of the fresh vegetables. This helps the company to keep their products at high quality (Luo, 2018).
In terms of branding, they have a strong brand name in Vietnam. They are also trying to create a simple brand so that the customer can easily perceive and understand their products and this gives them the advantage to develop new products. Vinamit is also doing well in terms of packaging as it provides all the information relating to the products such as ingredients details, place of production, expiry date and many more. They satisfy the customer (as they know that what they are consuming) and make them inclined towards the products.
Positioning is the act of designing the company strategy to establish a distinct and valued place in the minds of customers. Most of the products of Vietnam are high in quality and with more ingredients that are nutritious. The attributes used in the 1 positioning map are quality and price whereas the 2 positioning map includes the taste and nutrition. These attributes are used because they can clearly help Vinamit to attain a position in the market. The price/quality characteristics help to position the Vianmit. It reflects the high quality of the brand where cost is not considered relevant and the quality benefits are derived from using the brand (Maraseni, et. al. 2017). The 1 positioning map positions the company by focusing on the quality and the value offered by the company on the competitive prices. The price is an important consideration but the quality should also be comparable. Vinamit offers the high-quality air dried banana on the high prices compared to its competitors like KNG and Novatrade.
The 2 positioning map defines the company by offering high nutrition accompanied by the good taste. The nutrition is an effective attribute which defines the position of the company. Vinamit positions high along with providing good taste. The company has attained the first position in Vietnam in terms of nutrition and taste. Vinamit is followed by its competitors Novatrade and KNG. Vinamit even ranks high in the number of stores when it is compared to the competitors.
Vinamit is delivering value proposition in terms of nutritional content, taste, color, and flavors. The company has broad categories of products, which can be preserved for a much longer time (Some products can be preserved up to 12 months). Also, their products are enriched in fiber, vitamins, and minerals. These all aspects attract the customer to use their products on a daily basis. Vianmit uses unique value proposition (USP) is used for the air-dried bananas. It defines the value of the product in order to create for its customers (Nguyen, Sullivan Mort, and D'Souza, 2015). The unique selling proposition includes segmenting. The value chain focuses on the internal operations whereas value proposition is the component of strategy which looks at the customers and their demand. The USP finds a new way of segmenting the market in order to expand the market. It is effective for the Vinamit to generate sales.
From the above report, it can be concluded that Vinamit has suitable marketing environment. The microenvironment is favorable for the development of the company. The identified factors contributing to microenvironment are suppliers, marketing intermediaries, competitors, customers, and the public. These factors analyze the ability of Vinamit’s to operate in Vietnam. The macro-environmental factors such as demographic, economic, technological, natural, political and cultural have an impact on the functions of the Vinamit. The key issues have been identified out of the macro factors. The SWOT analysis has been applied to the company by integrating with the micro and macro environmental analysis.
The STDP is used to differentiate a group of the customers which is interested in purchasing air dried bananas. The segment is done on the basis of the demographic, geographic, psychographic and behavioral factors. The targeting strategy used by the Vinamit is Niche marketing to market and advertise air dried bananas. It is advertised through banners in the convenience stores and supermarkets. It even makes use of digital technology. The differentiated strategy is used by Vinamit to differentiate its products such as product attributes, labeling, branding, packaging and support services. The positioning creates a place and value in the mind of the consumers. The high quality, nutrition and taste help to attain a position in the marketplace.
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Vinamit, 2018. Air dried banana. [Online] Available at https://vinamit.com.vn/en/product/air-dried-banana/ [Accessed on 23 November, 2018]
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