NATIONAL UNIVERSITY HO CHI MINH CITY

UNIVERSITY OF ECONOMICS AND LAW

ESSAY Subject: INTERNATIONAL BUSINESS

GRADE: SUBJECT TEACHER: GROUP:

K09402T PHAM TO MAI 2

Chau Dinh Ngoc Hieu Trinh thi Thu Hien Hoang Th Kieu Oanh Nguyen Thi Ha Tram

K094020150 K094020286 K094020334 K094020374

Ho Chi Minh City, December 2011

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COMMENTS OF TEACHER
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TABLE OF CONTENTS

THE OPENING..................................................................................................................1 CHAPTER 1: INTRODUCTION OF COMPANY AND PRODUCT...............................................2 1.1. Introduction of Vinamilk........................................................................................2 1.2. Introduction of product..........................................................................................2 1.3. SOUTH KOREA - Target market..............................................................................3 CHAPTER 2: KOREA MAKET ANALYSIS..............................................................................4 2.1. Assessing the economic-geographic environment.................................................4 2.1.1. Geographic environment.................................................................................4 2.1.2. Economic environment....................................................................................4 2.2. Politics..................................................................................................................5 2.3. Korean cultural environment.................................................................................6 2.2. Analyzing international competitors......................................................................7 2.4.1. Potential competitors......................................................................................7 2.4.2. Sypnosis of global business strategies............................................................8 CHAPTERS 3 : SWOT ANALYSIS........................................................................................9 CHAPTER 4: PENETRATING THE LOCAL MARKET STRATEGY...........................................12 4.1. Product strategy.................................................................................................12 4.2. Distribution strategy...........................................................................................14 4.3. Promotion strategy..............................................................................................15 4.3.1. An overview of promotional goals.................................................................15 4.3.2. Promotional strategy.....................................................................................16 4.4. Price strategy......................................................................................................17 4.5. Plan implementation...........................................................................................19 4.6. Cost estimation and financing for market-entry plan implementation..................19 THE CONCLUSION..........................................................................................................21 REFERENCES.................................................................................................................22

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TABLE ASSIGNMENT OF DUTIES

Name Chu nh Ngc Hiu Trnh Th Thu Hin Hong Th Kiu Oanh Nguyn Th H Trm

MSSV K094020150 K094020286 K094020334 K094020374

Duties -....To compile contens: 2.1, 4.4, 4.5, 4.6 parts and chapter 3. -.To recapitulate Word and Power Point -. .To compile contens: 2.3, 4.1parts and chapter 1. -........Presentation about chapter 1 and 2. -.......To compile contens: 2.2, 4.2 parts; chapter 3, opening and conclusion. -.....................Presentation about chapter 3. -. To compile contens: 2.4, 4.3 parts and chapter 3. -.....................Presentation about chapter 4.

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OPENING While we are changing forward the market economy, competition is becoming more intense and more severe. Most of entrepreneurs have to work in the business environment which is very complex and involves many risks. In this competition, if a businessman wants to survive and develop, he will have to design a good strategy. Otherwise, a failure is inevitably. Therefore, businesses have to take advantage of all sources in production and especially they also have to devise and pursue many kinds of tactics and strategies. One of them is that when doing business we should not focus on one market but expand our scale in many different markets in regional area as well as all over the world. When penetrating a new market especially the foreign one, however, we have many difficulties in the micro and macro factors. Thus, we should have a effective exporting strategy to make it easier to explore the new market and gain a number of great successes in the strange land. To demonstrate clearly and give more details about the consuming expansion, with the topic The strategy to export the Vinamilk milk powder product into Korean market, my group conducted a research to help people understand more about the Vinamilk company and more important, about the clear pace in the exporting strategy of Vinamilk operation Although there maybe some mistakes in the research, we hope that the teacher and all classmates will be sympathetic to it. Moreover, we will so pleased if you give us some advice to make the essay perfectly. Thank you for your time to read my words!

CHAPTER 1: INTRODUCTION OF COMPANY AND PRODUCT

1.1.

Introduction of Vinamilk:

Vinamilk is a abbreviation of Viet Nam Dairy Products Joint Stock Company, established from 1976, has grown and become the leading enterprises in the field of milk manufacturing, business and other products relate to milk, currently has 75% market share of milk in Vietnam. Most products of the company are provided to the market under the brand "Vinamilk", the brand was voted as a "Famous Brand" and is one of 100 strongest brands voted by the Ministry of Industry and Trade in 2006. We have also been selected in the "Top 10 Vietnam high quality goods," from 1995 to 2007. According to Euromonitor, the website specializes in researching the market all countries, Vinamilk is the leading milk producer in Vietnam in 3 years of December 31, 2007. On 18/10/2011, the Vietnam Report Company has officially announced Vinamilk is one of Top 5 bigest companies in Vietnam in 2011. Business Registration License No. 4103001932 November 20, 2003 by Department of Planning and Investment of Ho Chi Minh City. Chairman of the Board Director and General Manager: Mai Kieu Lien Headquarters: 184-186-188 Nguyen Dinh Chieu, Ward 6, District 3, HCMC. Ho Chi Minh Website: www.vinamilk.com.vn With the variety of products, Vinamilk has 200 items of milk and products relate to milk include: condensed milk, powdered milk, nutrition powder, fresh milk, cream, yogurt, cheese and other products such as soy milk, juice, cake, dissolved coffee, bottled water, tea, dissolved chocolate ... These are leading brands on the market including: Vinamilk fresh milk, condensed milk, Dielac milk powder, V-juice Fresh fruit, tea of all kinds ... Vinamilk focused primarily effective business in the Vietnam market, which accounts for about 80% of sales in recent years. Beside strong domestic distribution network with 183 distributors and nearly 94,000 outlets have covered the whole country, the products of Vinamilk is not only Vietnam consumers trust but also reputed in markets outside the country. Up to now, Vinamilk milk products has been exported to markets in many countries around the world: USA, Australia, Canada, France, Russia, Germany, Czech Republic, Poland, China, Middle East, Asia, Laos, Cambodia, Philippines..
1.2.

Introduction of product

Vinamilk Slimming milk is a new product of Vinamilk. Originated from fact that the rate of obesity and overweight in Asia is increasing, Vinamilk has taken shape the idea and produced products "Vinamilk Slimming Milk ". With the target is find out the effective solutions to lose weight, safe and suitable condition for Asians, Vinamilk Slimming milk is a new breakthrough, to help bring practical benefits to customers. A expected weight with the healthy body is completely can be achieved within reach. Unlike other crash loss weight products on the market, Vinamilk Slimming milk is built with
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the effective formula and scientific mode, follows the treatment in stages, support overweight people controls weight sensibly , losses weight effectivly, long-term and stablely, do not gain weight back after having reached the desired weight through diet, reducing the threshold of full that still guarantee to maintain nutrition for all study and daily work. Vinamilk Slimming Milk has been clinically tested on overweight people, the results showed that after 6 weeks of useing, people drinking this milk has reduced about 5.9% of body weight (about 3.9 kg), waist down 5cm, the rate of body fat reduces 2%.

1.3.

SOUTH KOREA - Target market:

According to the research by the Institute for Development of the Korean Ministry of Health (KHIDI) said that about 1/3 (31.7%) of Korean over 20 years old are overweight or obese, up 26% compared to 1998. Eating habits, fast food, at once people has the trend to work more, less do exercise while life is more stressful. In addition, culture and Korean people are similar with the culture and people of Vietnam, this also can help companies is more favorable to penetrate Korea market. Realizing this, our company have decided to promote the export strategic the Vinamilk Slimming Milk to Korean market. The customer target of Vinamilk Slimming Milk focuses on women aged from 20 to 40 years old, has average incomes or higher. Because women in this age often has expressions of overweight, obesity, abdominal fat due to eat habits and activities as well as the work pressure. Also, this group is mostly people who is working, have social contact with so many people, so their shape is very focused. So the beauty needs of this group is very large. This is proven by fact that Korea is a major market for functional foods and bio-functional weight loss supplements with the food products are manufactured / processed in the form of tablet, capsule, powder, liquid, granule, pellet, slice , paste, syrup, gel, jelly ... So our company has researched Vinamilk Slimming Milk product to find a solution to effectively lose weight but to be safe for users.

CHAPTER 2: KOREAN MAKET ANALYSIS Assessing the economic-geographic environment:

2.1.1. Geographic environment:

South Korea is located in Northeast Asia, the South Korean peninsula. In the north the Democratic People's Republic of Korea, the three eastern, western and southern borders are the sea, the blessed many fisheries resources. Terrain classified into two distinct regions: mountains account for about 70% of the area located east, the coastal plains to the west and south. Korea's climate is fairly mild with average temperatures from 6C to 16C. The heavy rain concentrated in a short period in summer. Natural resources: South Korea produces coal, tungsten, graphite, molybdenum, lead, and has potential for hydropower.
2.1.2. Economic environment:

South Korea is a market economy in which the state plays an important role. Korea is one of the leading economies in Asia - Pacific, is the third largest economy in Asia after Japan and China. In 2010, the Korean economy recovered quickly, the rate of GDP growth reached 6.1%, the highest in the past 8 years since 2002 and GDP per capita reached $ 20,500, for the first time exceeded 20 thousand dollars in three years ago (KBS World Report 2010).

Per Capita GDP, expenditure and disposable income 2000-2010. (Euromonitor 2008a.) In addition, Korean consumers are affluent, with their average monthly disposable income increasing 5.4 percent from US$2,200 (KRW 2.81million) in 2009 to US$2,559 (KRW 2.96million) in 2010. The inflation rate in South Korea was last reported at 3.9 percent in October of 2011. South Korea imports mainly machinery, electronics and electronic equipment, oil, steel, transport equipment, organic chemicals and plastics. Its principal import partners are: China, Japan, United States, Saudi Arabia, Australia. The most important exports are finished products such electronics, semiconductors, LCD panel, mobile phone, computers related, television, motor vehicle, steel, ships and petrochemicals. Main export partners are China, United States, Japan, Hong Kong. Infrastructure: South Korea has a modern retail sector that is of a high standard with a strong focus
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on customer service. Convenience chains have gradually replaced the family run stores and many offer 24 hour shopping, a wide variety of merchandise and prepared and fast foods. The supermarket sector is gradually losing market share to hypermarkets and operators have reacted by becoming larger and specialising in the areas fresh food products and health food. For example, Western coffee shop franchises including Starbucks, Coffee Bean Leaf, Java Coffee and many others have grown rapidly in the past few years as have bakery franchises including such names as Paris Baguette/Croissant, Crown and Tous les Jours (Planet Retail, 2008). Online retailers have grown 190% during the past 5 years to almost a tenth of retail sales. In 2004, total sales of food and agriculture products accounted for approximately 9% of total online shopping sales, about US$660 million. Innovation in technology has developed new types of retailing in South Korea. The smart card which is equipped with a barcode reader and touch screen on the shopping cart is designed to assist consumers. Besides the smart card, electronic price tagging has been widely used in grocery retailing in South Korea in place of paper price tags and a self-payment system has been introduced by retailers such as Homeplus Lotte Mart and E-Mart to reduce checkout queuing (Euromonitor, 2009a). Korean development level information technology higher, they are the global leaders in the use of internet and mobile technology. Information leading Korean and communication networks are powerful tools to influence the opinions of Korean consumers (Paul Budde Communication 2007). Politics South Korean economics and politics have undergone major changes since the birth of the nation. South Korea today boasts of being a vibrant multi party democracy for the past two decades. While politics in South Korea has strived hard to reach its current stability, economic growth has never stopped here since the 1950s. Today it stands as the 11th largest economy (in nominal value) in the world and has emerged as a global leader in electronics, digital displays and mobile phones as well the largest shipbuilder in the world in terms of tonnage. As can be said that both economics and politics of South Korea have emerged successful from tumultuous pasts and are topics of discussion world over. Enforcement regulations of the food sanitation act (mohw) Korea is one of the largest nations which import foods in the world. The food industry in Korea annually meets about 30% of the domestic demand, other 70% is imported. The Ministry of Health and Wealfare (MHW) and the Korea Food and Drug Administration (KFDA) is the governmental agency that is in charge of establishing, operating and controlling the implementation of policy system about food hygiene. KFDA is an agency which deploys and enforces the laws and regulations above. As of 1998, however, KFDA almost has taken totally the managemential function, building the regulatory policy in the food sector of MHW. Nowadays, there is only one apartment in MHW
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that plays the role of monitoring the implementation of regulations and laws on food hygiene and safety. Food Sanitary Act: Food Sanitation Law was first promulgated in 1986. This law is constantly revised, adjusted and supplemented several times in 1991, 1994, 1995, 1997, 1998, 1999, 2000, 2001, 2002, 2004, 2005, 2006 to have the completed system of policies today. The objective of the Act is to enhance the health of the whole citizens by improving the quality of hygienic and nutritional food for Korean people and prevent effectively from any harmful factors affecting the consumer goods in the South Korea. This law is applied not only for the domestic goods but also the imported ones. The labels of imported food: In the law, all imported productst must be labeled according to the regulations and guidelines of the food hygiene and safety of the KFDA in Korea. The labels may not cover all original labels of products and must show the completed basic information about the products. Flow charts of Import Procedures

2.2.

Korean cultural environment: Social: Korean society based on the belief in Confucianism, Confucian culture. To enhance the

Korea has many cultural similarities with Vietnam due to the influence of Chinese culture. collective harmony of the group or community in social activities. Education: Right from the nursery, the baby was about education and domestic products and become remind parents when they choose to buy things for them. Use of content has become a consistent set of consumers of all ages. Religion: 51% of the population Korea beliefs religions. Population: According to the Korean population is 50,062,000 people on 1/2010. These years, Korea's population is growing steadily. On average, Korea's population increased by 200,000 people/year. Korea faces the risk of social aging. But Korea's birth rate has improved. Culture of Korean consumers: With increased wealth, population aging, improved education and income of the Korean people is quite high, so the style of their food consumption is very important about quality care, high-nutrient composition, safety and health needs beauty as well as
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their food quality, packaging and shelf life, product and environmental friendliness are a greater concern for disease prevention. The model of "green consumers" are increasingly ingrained in the thinking of the Korean. Consumers prefer products with a national brand and / or have been recognized and proven in the market. Price isnt the most important factor in consumption habits, but also included service, quality, sharing, social responsibility, business ethics ... Korean consumers prefer to shop at large supermarkets and shopping online rather than buying goods in retail stores. Koreans prefer domestic consumption and they will be very easy to open their wallets to pay for an item even though domestic goods are more expensive than imported goods. Korean food market is divised tightly. Usually, the big distributors do not directly import goods which they get from the satellite company specializing in importing, selling directly to Korean is very difficult.
2.3.

Analyzing international competitors

2.3.1. Potential competitors

There are a number of slimming products in Korea. However, the product that are popular with Korean people is the following Namyangs product: Namyang Total food Company:
- 17 Tea: 365 days, 0 Calories, No Antiseptic, No Artificial Flavors, No Calories - 17 Tea.

Namyang 17 Tea has 17 all natural and rare ingredients for purification of the body including L-Carnitine, increasing fatty acid metabolism, and green tea's Catechin. 17 Tea considers not only your health but also your beauty "Refresh your body and mind" with 17 Tea. - Healthy Weight Loss Program: Namyang's <Healthy Weight Loss Program > (New Weight Reduction Strategy Upgrade) is a dietary food containing balanced essential nutrition such as protein and minerals. With this product, weight reduction effect has been enhanced through the combination of HCA with the product's ingredient. The HCA has a body fat dissolution effect. The product contains diet fiber such as glukomanan that enhances the feeling of being solid and full. One can eat with convenience and selected time and place, this dietary food. In addition, Namyang's 'Chetonia', another special nutrition food, was specially produced for incurable epileptics. And this food contains Cheton-generating food with high fat content effectively suppressing convulsions. Competitive advantages of Namyang
- Well-known brandname:Namyang Dairy Products Co., Ltd. was founded on March 13,

1964, as the first general dairy products business operation in Korea. The operation was established with the view of expediting the development of the nation's dairy industry and to contribute to the enhancement of public health through provision of high-quality dairy products, leading the progress made in the industry. It holds 75 percent of the market share in infant
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formula. Also armed with high quality yogurt, milk, cheese, fruit drink and like, it now enjoys the greatest share in the Korean market... Currently, Namyang is standing at the top of Korean dairy products companies by virtue of its ceaseless interests in research, development, and bold investment in terms of scale of net sales or technical level.
- The use of technology for production:In Namyangs factories, workers have been replaced

by robots. Until 2007, Namyang had 4 production factories, including Chonan with the most modern production line and equipment. To assure the quality of its products, Namyang has also applied closed production process.
- Access to raw materials:Namyang owned 874 dairy farmings that provide over 28.900 litter

milk everyday for its factories. Global business activities: Namyangs products for mom & children are specially concerned and their quality is continuously enhanced. The companys products have confirmed a position and accounted for 50% marketshare in Korean market.Besides, these products have also been exported to 12 countries such as US, Japan, Taiwan, HongKong, IndonesiaNamyang has concentrated on building and consolidating the trust of its customers in its products quality by its real action.It has taken part in a number of social activities in many countries. Recently, while most of milk companies in the markets have raised their price of milk because of inflation,, Namyang has not raised its price yet for over 3 years because the company controlled its raw materials from its dairy farms.
2.3.2. Sypnosis of global business strategies

Aim :to make distributors as well as consumers in Korean market know and accept the product Stt 1 2 3 4 5 Strategies Trademark registration Holding a conference Participating in fairs Promotion (advertising, media) Developing source of raw materials Purposes To define ownership To introduce slimming milk to distributors To introduce product to customers To introduce product to customers Ensure to supply stable volume of milk Advantages created - avoid being imitated and can be protected by law - setting up a distribution system in markets - being easier to deliver products to customers -define potential customers -make the product be similar to customers -provide customers with knowledge about product - make the product be similar to customers -have possibility to create competitive price and reliable brand.

CHAPTERS 3 : SWOT ANALYSIS SWOT Strength

CONTENTS Strong and prestigious brandname:Vinamilk is the top milk producer in Vietnam. It was voted famous brandname and one of the 100 strongest brandname by Ministry of Industry and commerce in 2006 and reached top 5 of the 200 largest private enterprises in corporate income tax payment in 2011 by Vietnam Report. It was also listed in top 10 of Vietnamese high quality product.Vinamilk is in the top 450 company voted by Forbes Asian.The market share of Vinamilk is 75 %. Vinamilk has distribution systems in 64 provinces in Vietnam. Financial potential and large scale: -

In 2004, the company had the charter capital of 1590 billion VND. Advanced assembly line, capability of large production and stable quality:Vinamilks products are ensured quality by using quality control system ISO and HACCP. In 1999, Vinamilk has successfully applied the quality management system according to international standards ISO 9002 and now is applying the quality management system according to international standard 9001:2000. Moreover, the product has been studied clinically in the National Institute of Nutrition, confirmed good weight loss effect, safety and suitable for Asian. In addition, packaging are made from paper which cover by silver to preserve friendly enviroment and type of tin has three classes cover to well preserve..

Source material production quality: Vinamilk is one of the leading milk producer in Viet Nam with Dielac brand name, Diversified products Vinamilk Corporation provides healthy products which satisfy the international standards of quality, including: Vinamilk fresh milk, condensed milk, Dielac powdered milk, tea
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Vinamilk always chosse safety materials imported from Europe and the Middle East. -

Vinamilk has sustaintial relations in foreign markets. It is known by foreign consumers through Vietnam Airlines and it also has shopping online website: www.shop.vinamilk.com.vn. Vinamilks products are now sold in the supermarkets of foreign retailers: Coopmart, Big C, Lotte Mart, Metro,and exported to Australia, Cambodia, Iraq, Kuwait, The Maldives, The Philippines, Suriname, UAE v the U.S, Vinamilk Slimming milk is new productand Vinamilk has not penetrated the local market yet so that it has not established The company concentrates much on supply domestic consumers with its products; therefore, it does not have any experience

relations with Korean retailers yet as well as has no experience in doing business with Koreans. on international market. In particular, Vinamilk exported to 10 countries, accounted forapproximately20% of revenuewhereas Vinamilk businessesinthe Vietnamese marketaccounted forapproximately80% of revenue in the past three-year period. Changes in exchange rate may influence the companys business because 50% of raw materials are imported and 30% revenues gain from exports.Furthermore , Vinamilk has not had a competitive advantage in price in comparison with other Opportunity company. Korean GDP/ person is high and consumers are aware of the benefits of healthy food, so they dont react much with price changing. Korean population is ageing so that there will be a greater focus on the healthy benefits of food (according to the Korean National Statistic, the avg. life expectancy in 2050 will be 86, with 34.4% of the population over 65). The Korean lifestyle is becoming busier and more stressful than ever, resulting in more health concerns. The rate of obese kids in korea and the demand of beautifying of girls and women are increasing significantly. Korean people prefer using environmentally friendly products. Moreover, the distribution channel in Korean market is short and focusses on hypermarkets and supermarkets. Korean consumers like shopping at supermarkets and hypermarkets such as Lotte mart, E-mart, Tesco home plus,rather than retail stores. Together with the development of technology, shopping online also plays an important role in exporting to Korea. Asean-Korea Free Trade Agreement creates some advantages for Vietnam and the most important one is that exports
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Weakness

originated from Vietnam get preferential tariff.Furthermore, Korean prominent retailers have penetrated Vietnamese market ( Lotte mart with the chain of supermarkets in Ho Chi Minh City and Hanoi). This is a good chance for Vinamilk to be known as

top quality brandname by Korean distributors and consumers. Intense competition with other companies in the same market such as the famous brand name originated from South Korea and America. Harsh rules of Korean Government in verifying products quality create barriers for Vinamilk slimming milk: Imported functional products are often 2-3 times more expensive than domestic products for consumers, due to import tax and KFDA recognition costs. The certification process for functional foods is time-consuming, especially if the functional food has not considered as generic by the Korea Food & Drug Administration. Consumers are hard-to-pleased and their rights are protected effectively; thus, if information about the product is not provided fully, they will not accept that product. In addition, Korean consumers are more trusting of domestic/natural products than imported products, and are very conscious of where their food is produced.

Threat

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CHAPTER 4: PENETRATING THE LOCAL MARKET STRATEGY

4.1.

Product strategy Vinamilk slimming milk was produced with efficient formula and scientific mode of

treatment in stages, supports people who are overweight, controls weight through a reasonable diet, reducing the threshold of fully and completely maintaining nutrition for daily activities, life and work.
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Formula of milk contains CLA which helps inhibit fat synthesis and L-carnitine which

increases the fat tranformation. Also, the nutritional balance system of protein, vitamins and essential minerals have low energy, ensuring adequate nutrition for the user during dieting. The product has been studied clinically in the National Institute of Nutrition, confirmed good weight loss effect, safe and suitable for Asian, and also tested on overweight subjects, after 6 weeks this product, who drank reduce on average 3.9 kg, waist down 5cm, body fat percentage decreased 2%. Effective formulation and scientific treatment regime help people who uses this milk can reduces weight in long-term stability, not to gain weight back after they reach the desired weight loss.
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Treatment regimens with four phases: adaptation, attack, consolidation and maintenance with

each weight loss goals and specific time help users perform easily. In particular, the milk smells pleasant, is easy to drink, has no side-effects so that it makes weight loss process more easier. Nutritional status IBM Index Note Underweight <18,5 Should not use Weight Loss Milk Normal 18,5 - 24.9 Pre-obesity 25 - 29.9 Should use Weight Loss Milk Obesity >30 (*): According to the WHO classification scale for adults over 18
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Characteristics of products: Based on the taste and habits of Korean, our company will Invest heavily in an advanced management system and a closed production process, and synchronous with the international standards from planting grass, building cages, preparing food for cattle, health management, processing and packaging to distribution of products to the consumers.

produce the products Vinamilk slimming milk with the following characteristics:

Material: taken from fresh milk and processed according to standard 7028:2002: products made from material milk and processed at high temperatures, ensuring food hygiene standards and safety products.
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Flavor: delicious, tasty, standard flavors, easy to drink Net weight: There are two kinds of packaging: o o o Tin box 300g used to be about 8 times (each time an equivalently 37.5 g) Box of paper 525g: 1 box of 14 packets for 14 times using Besides, we propose the type of packaging in the form of liquid milk in box of paper,

each box is 220ml capacity. This design is very handy, easy to carry, very suitable for the consumption habits of Koreans, they need the convenience because they are very busy (The Koreans have the longest working time the world).

Design on the package: Sample code of Vinamilk slimming milk is expressed with market is the same as the one in Vietnam but clearly,

eye-

catching design and suitable for Korean interests. The design of products exported to Korea the information about the manufacturer, importer, manufacturing date, expiry date as well as how to preserve a part includes two common languages: Korean and English to Korean consumers. Morever, the design must consist of the certification mark of international quality because Koreans are very interested in product quality.

Improving product quality: To meet the increasing demands of consumers, the listing has constantly renewed technology, improved management and product quality. Vinamilk is now applying the quality management system according to international standard 9001:2000. This has dispelled somewhat the quality gap with imported milk and increase the confidence and

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prestige

of

the

company

in

competitive

market.

4.2.

Distribution strategy

The selling and distribution system of Vinamilk spreading everywhere is necessary so as to lead to the success in the operation, which makes the company gain an enormous quantity of customers and ensures the effective results of launching the new products and the promotion strategies not only in the Asian area but also all over the world. There are many different ways to launch our product into the Korean market such as by means of the well-known hypermarkets like EMart, Tesco Home Plus, Huyndai Department Store, Lotte Mart, supermarkets, the outlet chains 24/7, Gmart, or the small outlet stores... In general, the Korean market is a potential and attractive enviroment for foreign entrepreneurs to export the products into. Although the distribution network in Korea is very diversified, we choose only one distributor, Tesco Home Plus. Its a South Korean/ British chain of discount retail stores jointly owned by Samsung and Tesco with 113 branches throughout South Korea. Tesco currently holds 94% of the shares in the venture. Home Plus operates both hypermarkets and its express format as well as home delivery shopping service. Home Plus hypermarkets typically offer home products, clothing, electronics, and sporting goods. They also usually feature a multi-story car park, large supermarkets and small special purpose stores such as fast food restaurants, travel agencies, appliance-rental firms, pharmacies and bookstores. There are also culture centres in some of the stores. Home Plus is the second largest retailer in South Korea, just behind Shinsegae Group.
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Why did we choose Tesco Home Plus but not another one? Because of three main reasons: Firstly, according to recent research, the Korean citizens prefer buying goods and shopping in hypermarkets, supermarkets rather than in small outlet stores operating outside. Secondly, we should use one main distributor when we export our goods into the Korean market because the Korean entrepreneurs do not like the foreign ones using too many distributors to introduce products in order to ensure the belief in business. As the traditional way of thinking, Vietnamese businesses like having as many distributors as possible to expand their product network. By contrast, Koreans like the mutual belief in business. It means that when you want to deliver your goods to the Korean customers, you should choose only one distributors, not all of them at the same time. Finally, nowadays, the technology in Korea is developing dramatically and powerfully and plays an important role in Korean peoples life. Tesco's strategy with Homeplus to overtake E-mart which is owned by Shinsegae Group, South Korea's leading retailer is to find some methods to build stores, to use the online world to grow its sales. It's Homeplus online stores or malls that are now the number one e-commerce site for groceries, general merchandise and consumer goods in the nation, which offers it a solid base in those strategic efforts. The virtual stores located in the subway stations are an extension of that online paradigm and strategy. The Homeplus stores in the subway stations consist of virtual grocery shelves, fresh and perishable food cases, which are designed to look like the inside of a brick-and-mortar store. Shoppers walk up to the virtual store, choose the items they want to buy, and then scan the product QR code using their smart phone. Once the product QR code is scanned, the item goes into a shopper's online grocery cart. When a shopper completes his or her purchases, they then ask for time for the groceries to be delivered to their home later in the day.. The Homeplus virtual subway station-based stores is one of the most innovative food and grocery retailing concepts we've seen over the last couple years.
4.3.

Promotion strategy

4.3.1. An overview of promotional goals

Identifying the goals of promoting is a very important step because it relates to the goals of marketing. Despite its purpose is the companys revenue, promotional goals in different situations are not the same. Objectives related to the promotion of product:

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Announce consumer about the slimming milk of Vinamilk; Help them understand clearly about the benefits of fresh, natural milk. Make the consumers feel that their best choice is to buy our product. Stimulate them to buy our product and make them become our loyal consumers.

4.3.2. Promotional strategy

Promotional stratetry includes these steps: Identify the target market:women who has to work in office all day, age from 25 to 35. Identify promotional goals: In short-term: o Announce the presence of Vinamilk slimming milk to Korean consumers by means of distribution channel. o Provide them with the knowlegde about the product o Emphasize on the special feature of the product o Create the liking to consumers In long-term: o Make the consumers feel that their best choice is to buy our product. o Stimulate them to buy our product and make them become our loyal consumers. Define the message of promotion: losing weight safe and effectively Choose promotion tools:
In short term: we focus on introducing the new product to the distributors (push stratefy).

To do this, we use the tool of advertising on the Internet, on newspapers and magazines. The company also participates in industrial exhibitions held in Korea as well as Trade Promoting fairs in order to inform many distributors about its presence in Korean market. This tool seems to be appropriate in the early stages of the promotion of the product.
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In long term: In the late phases, when our product is accepted widely in the market, we will

use the tool of advertising through media such as television, stereo, followed by the promotional goals as we want to aim at customers (pull strategy) and to emphasize the quality of the product.We will also use the tool of public relation that we take part in some social activities, sponsoring, charities or environmental protecting programs in Korea. We use pullpush mix strategy because of some reasons: first, our product is a new product and a kind of consumer goods. Second, our distribution channel is short. And finally, there are sufficient print and electronic media available to carry the marketing messages.
4.4.

Price strategy

The table below provide information about slimming products in Korean market : Product Name 17 tea 2l 17 tea 1.5l 17 tea 500ml 17 tea 340ml Brand Name Namyang Namyang Namyang Namyang Manufacturer Namyang Dairy Products Co.,Ltd Namyang Dairy Products Co.,Ltd Namyang Dairy Products Co.,Ltd Namyang Dairy Products Co.,Ltd Seller Tesco home plus, Lotte Mart v E-mart Tesco home plus, Lotte Mart, E-mart v Mega-mart Tesco home plus v E-mart Tesco home plus, Lotte Mart, E-mart v Mega-mart Price 2250-2500 won 2250-2350 won 1400-1500 won 950 - 1000 won USD/1L or 100g 0,9/1L 1,0 /1L 1,2/1L 1,3 /1L 2,3/1L 2,4/1L 2,24/1L 2,36/1L

Chlorophyll Juice $150/ box oxus21 Oxus21 company Tesco home plus 20,8/1L (120ml x 60 packs) 17 tea (paper box)Namyang Dairy Namyang Mega-mart 2500 won 5,35/100g 1,5gam x 25packs Products Co.,Ltd AHC X-Slim diet, 45000 won(500mg AHC HCA E-mart 60,2/100g HCA x 120 Capsules) FOB $30/box Erom Natural Raw Erom Erom Co.,Ltd. Tesco home plus,.. 2,5/100g Meal for Women (40g x30 pouches) Erom Natural Raw FOB $10-15/box 2,5-3,75 / Erom Erom Co.,Ltd. Tesco home plus, Meal (Nio) (400g) 100g (http://www.lottemart.com, http://www.megamart.com,http://www.homeplus.co.kr, http://www.emartmall.com) According to the table, slimming products are the high-priced segment:
For liquid products: o High price from 19,8 USD /1L to 20,8 USD /1L, including brands such as Oxus21, Shalom 17

o Competitive price from 0.9USD/1L to 2.4USD/1L, including brands : Namyang, Maeil, For powdered products: o High price from 59,7 USD/100g to 60,2 USD/100g , including brands such as AHC, Shalom o Competitive price from 2,5 USD/100g to 5,35 USD/100g, including brands: Namyang, Erom...

Slimming products in the Korean market are variety of categories, brands, and origins. In addition, competitive prices and the differences between the same products and capacities depending on brandname and quality of goods. Most of the famous brandnames originated from Korea and America are high-quality products and familiar and high- accepted market. In short , Vinamilk slimming milk will penetrate Korean market at the high-priced segment, good quality with competitive brands of South Korea and America such as Namyang, Leptin, Erom, Maeil, Shalom. The main competitors in the slimming products market are strong brands of South Korea and America, therefore, Vinamilk choose Penetration pricing. The price will be lower than that of competitors in the segment of senior products in the early stages in order to penetrate easily this market. Vinamilk must contact Tesco home plus to be agreed upon prices lower than prices of competitors who supply Tesco home plus and find out the differences between input prices and output prices of Tesco home plus. So, Vinamilk can determine specific prices. Vinamilk will export Vinamilk slimming milk to Tesco home plus with FOB (Free On Board) price. This is because Tesco home plus has experiences and relationships in the transport and import of goods.Therefore the FOB sale price will bring them more beneficial, while Vinamilk has not an experienced exporter in Korea market. FOB price and penetrating price help Vinamilk slimming milk compete easily against competitors and be easily distributed by importers.

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4.5.

Plan implementation 2011 12 2012 10 11

Plan penetration the Korean market STT 1 2 3 4 5 6 7 CONTENTS Contact distributor Contract agreement Certificate from the Food Research Institute of South Korea Registered license in South Korea Production of export products Product promotion Exports to the Korean market 11

Plan assignment of responsibilities STT 1 2 3 4 5 6 7 8 9

4.6.

CONTENTS Production and business plans Contact distributor Contract agreement Certificate from the Food Research Institute of South Korea Registered license in South Korea Production of export products

Requirements Realistic To achieve high efficiency Quickly time Save and efficient cost The reasonable terms and Ability to meet VNCTP standards from South Korea Fast and efficient Standards of the factory and meets requirements of the partner Fast, efficient and inexpensive Checking quality and transportation

Responsibilities Implementation Business & plan department Marketing & Sales department Marketing & Sales department Marketing & Sales department coordinate distributor Marketing & Sales department Production department, QA Marketing & Sales department Import and export department Finance and accounting department

Checking Business & plan manager Business & plan and Marketing & Sales manager Business & plan and Marketing & Sales manager Marketing & Sales manager Marketing & Sales manager Business & plan manager Business & plan manager Business & plan manager Finance and accounting manager

Product promotion Exports to the Korean market Report production and business Profit and Product Quality results Cost estimation and financing for market-entry plan implementation
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Stt

CONTENTS

The estimated cost Details USD Two Marketing & Sales employees to Korea

Based on reference Cost of Living in Korea 7000 USD / person (http://www.edu.voffice.vn) 37000 Round-trip plane ticket from Ho Chi Minh City - Vietnam Airlines Seoul 1200USD / 1 person, pay staff for work overseas 100USD/day / person (Vinamilk) 550 1950

Contact distributor

2 3 4 5 6 7

Contract agreement Certificate from the Food Research Institute of Korea Registered license in South Korea Production of export products Product promotion Exports to the Korean market

Contracting directly Application and provide additional information Filing fee Production Carring out strategy Packaging costs, transportative goods. Costs of customs procedures Transaction costs, payments, exchange rate opportunity cost (interest rates on bank deposits 14%/ year)

Filing fee in the South Kroea 350 USD / brand 350 (http://vietbao.vn/Kinh-te/Lam-the-nao-de-bao-ve-thuong-hieutai-My/10762282/87/) Market price is around 10 USD / 100g (production costs by 1 /100g 10% -15% of original price ) 7000 Costs of promotion strategy in Vietnam is around 8000 USD (Hanjin shipping) 90USD/20 Feet

HSBC bank

Report production and business results

Based on estimated costs, estimated capital costs do not include the production and transport costs to implement plans to bring products to the Korean market is 160 000 USD from the capital's business Vinamilk for penetrating foreign markets.

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CONCLUSION It is very necessary for an entrepreneur to have a far vision and find next steps in business. One of the challenges that Vinamilk company has to come over is the exports to Korean market, which has hard to - pleased customers to break down. The experience, potential, sources and advantages of Vinamilk conpany in the production and export to the different markets, however, have been proved through the success that the company gained since its establishment up to now such as One of the most ten famous brandnames in Asia or One of the best 200 businesses in Asia Pacific AwardThis all above things show us that being the business partner with Korea will be completely carried out in the near future.

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