THEORETICAL BASIS
Demand
Definition: The quantity demanded of any goods is the amount of the goods that buyers are willing and able to purchase at a given price.
The law of demand states that, all else being equal, an increase in the price of a good leads to a decrease in the quantity demanded, and conversely, a decrease in price results in an increase in quantity demanded This illustrates an inverse correlation between the price of a commodity and the quantity demanded by consumers.
Jennie's demand schedule illustrates her purchasing behavior for coffee at varying prices At a price of $1.00 per cup, she purchases 16 cups monthly However, as the price increases, her consumption decreases significantly, culminating in a purchase of only one cup per month when the price reaches $6.00.
Price of coffees (P) Quantity of coffees demanded (Q)
Table 1.1 Demand schedule of Jennie
A demand schedule is a table that illustrates the correlation between the price of a product and the quantity demanded by consumers, while keeping all other influencing factors constant This tool is essential for understanding consumer behavior and market dynamics, as it clearly outlines how price changes affect demand for a specific good By analyzing a demand schedule, businesses can make informed decisions about pricing strategies and inventory management.
- Jennie’s coffees demand schedule obey the law of demand Quantity of coffees demanded will increase when their price falls, vice versa.
- A demand curve is a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time.
- A demand curve can be derived from a demand schedule.
- The slope of the demand curve is ΔQD/ΔP, with ΔP is a decrease in P and ΔQ is an increase in QD
- A demand curve is described a demand function taking a standard form like:
Q D = a – bP or P = α - βQ D , with a≥0 and b≤0; α = 1/b and a/b.
And the inverse demand function (or price function) treats price as a function g of demand quantity:
- For instance, considering Table 1.1, we can write the demand function as:
We have QD = a – bP, at P = 2, Q = 13 (1):
Thus, we have the demand function of Table 1.1 is:
QD = 19 – 3P or P = 6.33 – 0.33QD, with c = a/b = 19/3 and d = 1/b = 1/3.
- A demand curve is a downward-sloping line from left to right showing negative correlation between price and quantity demanded, other things equal.
- For example, we have the demand curve from the demand schedule Table 1.1:
Movement along the demand curve
Price fluctuations directly impact the quantity demanded; specifically, when prices rise, the quantity demanded tends to fall, and conversely, when prices drop, the quantity demanded increases This relationship causes movements along the demand curve, reflecting the inverse correlation between price and demand.
In Figure 1.1, point A indicates a higher price and lower quantity demanded compared to point B, illustrating that a movement along the demand curve from point A to point B results in an increase in quantity demanded and a decrease in price.
Market demand versus individual demand
- Figure 1.1 is an example for an individual’s demand for a product.
- Market demand is the sum of all the individual demands for a particular good or service.
Market demand can be effectively analyzed through the demand schedules of two individuals, Jennie and James, as illustrated in Table 1.2 This table reveals the quantity of coffee each individual is willing to purchase at various price points, with Jennie's schedule indicating her cup purchases and James's schedule reflecting his buying behavior.
Price of coffee Quantity of coffees demanded by Jennie
Quantity of coffees demanded by James Market demand
- The market demand at each price is the sum of the two individual demands.
- Shown on the graph: The market demand curve is the horizontal addition of the individual demand curves at any price.
- Since individual demand curves are downward sloping, the market demand curve is also downward sloping
The market demand curve illustrates the relationship between the price of a good and the total quantity demanded, while keeping other influencing factors constant When the price (P) decreases, individual demand increases, leading to a rise in the overall market demand for that good.
Shifts in the demand curve
- A shift in the demand curve caused by a change in a factor (income, expectations ) which may make the product more attractive/ unattractive and changes the quantity demanded at any given price.
Figure 1.2 Shifts in the demand curve
Demand shift to the left (D to D1), meaning that people will demand less of the product at a given price.
Demand shift to the right (D to D2), meaning that people will demand more of the product at a given price
- Main factors that affect the demand for products and services:
A change in demand for a product resulting from a change in consumer buying power is called the income effect.
E.g.: When income increases without any change to prices, this makes consumers able to purchase more normal goods at the same price, and they tend to spend less on inferior goods.
Goods whose demand rise when consumers’ income rises
Goods whose demand decline when consumers’ income rises
When the income level gets higher, people gain more extra money to buy furniture, clothes, automobiles
When income increases, people gain extra money, leading to the decrease in needing shoddy goods as noodles, canned food, second-hand clothes; which are substituted by higher quality goods.
(i.e., positive partial derivative of QD with respect to (w.r.t) I) ƏQ D /ƏI < 0
(i.e., negative partial derivative of QD with respect to (w.r.t) I)
The effect of a change in the prices of other products on a product's
Substitutes Meaning: A pair of products that could generally take the place of (substitute for) each other.
Example: Pepsi is a substitute goods for Coca Cola, and vice- versa When the price of Coca Cola demand curve depends on the type of relationship between the products.
The demand for Pepsi increases when the availability of substitute and complementary products rises, provided that Pepsi maintains its current pricing.
Mathematically, Ə/ƏP Y < 0, if Y is a complement for X.
Meaning: A pair of products is called complement when a rise in the price of a good reduces the demand for another good.
Complements are products that are typically used together, such as printing paper and ink cartridges When the price of ink cartridges rises, consumers tend to print less, resulting in decreased purchases of both ink cartridges and printing paper.
Mathematically, Ə/ƏP Y < 0, if Y is a complement for X.
Changes in consumers’ tastes also affect a product’s demand curve.
In today's world, consumer preferences are significantly influenced by advertising and media reports For instance, if a study emerges suggesting that chocolate consumption is linked to improved health, it can lead to a surge in the demand for chocolate bars.
Both the expected future price and current demand move in the same direction.
E.g.: If consumers expect that the price of rice will increase as a result of a shortage, the current quantity of rice demanded may increase as consumers accumulate it to avoid paying a higher price in the future.
Market demand is significantly influenced by the number of buyers in the market For instance, if Lisa joins James and Jennie as a coffee consumer, the overall demand for coffee would rise at every price point, leading to an increase in market demand.
Supply
Definition: The quantity supplied of any good is the amount that sellers are willing and able to sell.
The law of supply states that, all else being equal, an increase in the price of a good leads to a higher quantity supplied, while a decrease in price results in a lower quantity supplied This illustrates a positive correlation between commodity prices and the quantity supplied.
Table 2.1 illustrates Teddy's coffee supply schedule, detailing the quantity of coffee he provides each month at different price points At a price of $1.00, Teddy supplies just one cup of coffee per month; however, as the price increases, the amount he supplies also rises significantly.
Price of coffee (P) Quantity of coffee supplied (Q S )
Table 2.1 Supply schedule of coffee by Teddy
A supply schedule is a table that illustrates the relationship between the price of a good and the quantity supplied, while keeping all other factors that affect producers' willingness to sell constant.
- Teddy’s coffees supply schedule obeys the law of supply Quantity of coffees demanded increases when their price increases, vice versa.
- A supply curve is a graphical representation of the relationship between the price of a good or service and the quantity supplied for a given period of time.
- A supply curve can be derived from a supply schedule.
- A supply curve is described a supply function taking a standard form like:
Q S = a + bP, with b is the positive constant.
Or an inverse supply function:
- For instance, considering Table 2.1, we can find its supply function as:
We have Qs = a + bP, at P = 2, Qs = 3 (1):
The supply curve slope = = = 2 = b, thus: QS = a + 2P (2)
Thus, we have the supply function of Table 2.1 is: QS = -1 + 2P.
The supply curve demonstrates an upward slope, indicating that, all else being equal, an increase in price leads to a greater quantity supplied This relationship highlights the positive correlation between commodity prices and the amount supplied in the market.
- For example, we have the supply curve (Figure 2.1) from the supply schedule Table 2.1:
Movement along the supply curve
Price fluctuations directly impact the quantity supplied; specifically, an increase in price leads to a rise in the quantity supplied, while a decrease in price results in a lower quantity supplied This relationship causes movements along the supply curve, reflecting the upward or downward shifts in supply dynamics.
In Figure 2.1, point A shows a lower price and quantity supplied compared to point B, indicating that a shift in the demand curve from point A to point B results in an increase in both the quantity supplied and the product price.
Market supply versus individual supply
- Just as market demand is the sum of the demands of all buyers, market supply is the sum of the supplies of all sellers.
Table 2.2 presents the supply schedules for two coffee suppliers, Teddy and Danny To derive the market supply curve, we horizontally sum the individual supply curves, similar to how demand curves are combined.
Price of coffee Quantity of coffee supplied by Teddy
Quantity of coffee supplied by Danny
Quantity of coffee supplied in the market
- The market supply at each price is the sum of the two individual supplies.
- Shown on the graph: The market supply curve is the horizontal addition of the individual demand curves at any price.
- Since individual supply curves are upward sloping, the market demand curve is also upward sloping
The market supply curve illustrates the relationship between the total quantity supplied and the price of a good, while keeping other influencing factors constant When the price of a good decreases, the quantity supplied by individual producers declines, leading to a reduction in the total market supply.
Shifts in the supply curve
- A change in a factor (production cost, tax ) might affect the supply of a product and then cause the supply curve shifts.
An increase in supply occurs when the supply curve shifts to the right, moving from S to S2, while a decrease in supply is represented by a leftward shift of the supply curve from S to S1.
Figure 2.2 Shifts in the supply curve
- Main factors that affect the products and services supply, as input prices, taxes, technology, expectations, number of sellers…
An increase/ decrease of production cost might affect the quantity supplied The production cost includes wages, material, overhead.
E.g Suppose the price of coffee beans falls Coffee beans are the input into producing coffee, so the fall makes selling coffee more profitable because of lower amount of money spent on input ingredient. Sellers are now willing to produce a larger quantity at any price; therefore, it raises the supply of coffee Thus, the supply curve for coffee shifts to the right.
Tax might impact the cost of goods, thus, quantity supplied is also impacted.
E.g The government increases the tax on tobacco, this leads to higher expenses when selling these products but lower profit Business might reduce the supply of tobacco.
Technology also partly affects the supply.
E.g In the case of selling coffee, the invention of machines, for example, reduced the amount of labor required to produce coffee beans through processes such as roasting, grinding, packing, etc.
By reducing production costs, advances in technology have enhanced the supply of coffee.
Producers' supply decisions are often influenced by their future expectations For instance, if a company anticipates an increase in coffee prices, it may choose to store a portion of its current production instead of supplying it to the market immediately.
Market supply is significantly influenced by the number of individual sellers in the market; as the number of sellers increases, the overall supply also rises, and conversely, a decrease in sellers leads to a reduction in supply.
E.g If Teddy either Danny or both were to retire from the coffee business, the supply in the market would fall.
A supply curve only shifts when there is a change in a relevant variable not represented on either axis While price changes cause movement along the supply curve, factors such as input prices, taxes, technology, expectations, and the number of sellers lead to shifts in the curve itself.
Market equilibrium
Definition: Market equilibrium is the state when the quantity supplied and demanded in the market is in equilibrium, at which point prices become stable.
Market equilibrium occurs at the intersection of the supply and demand curves, determining the equilibrium price (PE) and equilibrium quantity (QE).
For instance, we have the graph shows the form of market equilibrium:
When the market price (P1) falls below the equilibrium price (PE), a shortage occurs, resulting in higher consumer demand for the product than suppliers are willing to produce This imbalance leads to a supply shortage and an excess of demand.
During special occasions or holidays, coffee shops experience a surge in customers, resulting in increased demand that outstrips supply In response to this shortage, sellers often raise prices As prices increase, the quantity demanded decreases while the quantity supplied increases, ultimately guiding the market back toward equilibrium.
When the market price (P2) exceeds the equilibrium price (PE), a surplus occurs as suppliers produce more of a good than consumers are willing to purchase This situation results in an excess supply and a corresponding shortage in demand.
As the number of coffee shops increases, competition intensifies, prompting sellers to lower their prices This reduction in prices leads to a rise in quantity demanded while simultaneously decreasing the quantity supplied The market will continue to experience falling prices until it achieves equilibrium.
The law of supply and demand dictates that market actions by buyers and sellers drive prices toward an equilibrium point where supply equals demand At this equilibrium, both buyers and sellers are content, resulting in no further upward or downward pressure on prices Consequently, the price of any good adjusts to align the quantity supplied with the quantity demanded, ensuring market stability.
The equilibrium price in a market is affected by shifts in the demand or supply curves, leading to changes in both price and quantity exchanged between buyers and sellers When an event causes one of these curves to shift, it results in a new market equilibrium.
An increase in demand, while the supply curve remains unchanged, leads to a rise in both the equilibrium price and quantity, shifting from E to E' For instance, following an effective advertising campaign, the demand for milk rises, causing the demand curve to shift right from D to D' Consequently, the equilibrium moves to E', where both the equilibrium price and quantity are elevated compared to their initial levels (PE' > PE).
Figure 3.2 The change of the equilibrium as demand increases (due to advertising).
When supply increases while the demand curve remains unchanged, the equilibrium price decreases and the quantity increases, shifting from E to E' For instance, the importation of dairy cow breeds with high milk content enhances the supply of canned fresh milk, causing the supply curve to shift right This movement results in a new equilibrium point, E', where the price declines and the quantity rises.
Figure 3.3 The change of the equilibrium as supply increases (due to input).
- Suppose a market of a good has a demand function of QD = 19 – 3P and a supply function of QS = -1 + 2P Then, the market equilibrium E(QE,PE) is determined by QS = QD -1+2P = 19-3P Therefore, PE = 4 QE = 7.
When individuals experience an increase in income, the demand for a particular good rises by 2 units, leading to a new demand function represented as Q’D = 19 – 3P + 2 Consequently, the updated market equilibrium, denoted as E’(Q’E, P’E), is established based on the quantity supplied, QS.
= Q’D -1 + 2P = 21 – 3P P’E = 4,4 and Q’E = 7,8 Therefore, the new market equilibrium is: E’(4.4,7.8).
TOPIC APPLICATION
ANALYSIS OF THE TOPIC’S THE CURRENT STATE
1 Demand of TH True Milk’s dairy products in Vietnam market
Buyers’ income: The income is a determining factor in the purchasing power of consumers As income changes, purchasing power changes, causing the demand for goods and services to change.
In the third quarter of 2021, the General Statistics Office of Vietnam reported that the average monthly income for employees was 5.2 million dong This figure represents a decline of 877,000 dong from the previous quarter and is 603,000 dong lower compared to the same period last year.
The Covid-19 pandemic has profoundly impacted workers' lives, leading to a decline in average employee income In the third quarter of 2021, the average income dropped to 5.2 million dong, compared to 5.5 million dong in the second quarter of 2020, which had already recorded the lowest average income for employees in the past decade.
Therefore, due to the decrease in income of Vietnamese consumers, the demand for TH True Milk products also decreases.
TH True Milk offers 950ml of pasteurized fresh milk at a price of 36,000 dong, while Vinamilk provides 900ml for 35,409 dong and Dalatmilk sells 950ml for 39,000 dong With a commitment to price stability that aligns with quality and product volume, TH True Milk is steadily building consumer trust and maintaining consistent demand, which is showing signs of growth.
A recent study indicates a significant rise in the "consumer believing index," influencing purchasing behavior As a result, consumers are increasingly inclined to trust healthy products, particularly complementary items like pure fresh milk TH True Milk has capitalized on this trend by emphasizing terms such as fresh milk, pure fresh milk, and real fresh milk, establishing a strong foundation for its dairy products and creating a notable impact in the Vietnamese dairy market.
TH True Milk distinguishes itself in the dairy industry through its strong brand positioning and commitment to community values, adhering to the Law of Mind By addressing consumers' concerns about cleanliness in an era of increasing modernity, TH has strategically positioned itself as a leader in the milk market, being the first to label its products as “pure milk.” This proactive approach not only sets TH apart from its competitors but also enhances transparency in the liquid milk sector by advocating for clear ingredient sourcing on fresh milk products As a result, TH True Milk has garnered public attention and earned consumer trust, solidifying its reputation as a reliable choice for genuine milk products.
TH True Milk positions the brand of Pure Fresh Milk with the first organic dairy farm in
TH Group has successfully introduced over 70 new organic products to the market, including TH True Milk Top Kid formula, TH School Milk, TH True yogurt, TH True yogurt drink, TH True ice cream, TH True butter and cheese, TH True water, and TH True Food featuring natural red rice and sugar These offerings are designed to cater to the diverse needs of consumers seeking healthy and organic options.
TH True Milk prioritizes not only the quality and taste of its products but also their visual appeal The brand's packaging features a distinctive design with a white background and blue sky, symbolizing its commitment to organic and natural values This consistent visual identity enhances brand recall among consumers, leading to increased brand recognition and purchase intent Additionally, the attractive and well-designed packaging appeals to consumers, driving higher demand for TH True Milk products.
TH True Milk's community campaigns, such as "Join hands for Vietnamese stature" and "For the health of the community," significantly enhance consumer engagement by showcasing the company's commitment to the well-being of Vietnam's youth These initiatives resonate particularly during the pandemic, as they address the growing public concern for health and wellness, effectively capturing the attention of both consumers and the broader community.
Thanks to all those strengths and the boldness in making strategies as well as brand positioning, the demand for the company's products has been continuously increasing.
TH True demonstrated impressive growth in urban areas, boosting its Consumer Reach Points (CRP) by 7% Over the past year, the brand successfully expanded its consumer base by adding over 100,000 households, now reaching more than half of the urban household market.
In the wake of the Covid-19 pandemic, consumers are increasingly prioritizing healthy eating habits and seeking natural products Responding to this demand, TH True Milk has introduced several innovative product lines aimed at enhancing consumer health Notably, TH True Milk HILO offers a remarkable 70% increase in calcium content while reducing fat by 60%, and is free from lactose and refined sugar Additionally, the brand presents TH True Light Meal with Cereal, TH True Beverage featuring organic juices, teas, and rice water, and TH True Nut, which provides nutritious nut milks, along with TH True Milk Organic, catering to the growing preference for health-conscious options.
Bringing new and quality products to meet the different needs of consumers, it makes the demand of TH True Milk increase.
TH True Milk has gained significant popularity in Vietnam and is also making strides in international markets Notably, on October 22, 2019, TH Milk Joint Stock Company became the first enterprise to receive a transaction code from China's General Administration of Customs This milestone allowed the company to officially export two categories of dairy products: pure pasteurized fresh milk and pasteurized fresh milk with natural flavorings.
The more consumers choose to use milk products from TH True Milk, the more the demand of products rises.
Image of TH True Milk products in a supermarket in China
2 Supply of TH True Milk’s dairy products in Vietnam market
TH True Milk's key strength lies in its autonomy over input materials, ensuring high-quality production All of its milk products are sourced from a network of closed, high-tech farms that meet international standards, which supply the company's processing facility located in Nghia Son, Nghia Dan, Nghe An.
TH sources its cows from renowned dairy-producing countries like New Zealand, the USA, Australia, and Canada to guarantee high-quality milk production with clear pedigree To enhance future breeding, TH also imports female calves from these countries, which are fertilized using top-tier sperm sources globally This ensures that the cows exhibit high milk production capabilities, optimal fat and protein content in their milk, ease of calving, high fertility rates, and robust disease immunity.
TH True Milk stands out for its self-sufficient raw material fields, offering a diverse feed menu for its cows that includes 16 ingredients such as corn, American sorghum, and sunflower A notable feature is a 50-hectare sunflower field that provides hundreds of tons of fresh food, tailored specifically for milking cows, convalescent cows, and calves After two years of experimentation, experts at TH have found that sunflowers thrive in the Western Nghe An region's climate and soil, yielding significantly higher results than traditional maize and grass feeds.
The vast field of sunflowers is fodder for cows
On April 20, 2011, Nghe An Tate & Lyle Sugar Company transferred shares to TH Milk Joint Stock Company, surpassing 20 international investors This partnership with Tate & Lyle PLC, the UK's largest sugar group, ensures a reliable supply of high-quality sugar ingredients for TH True Milk's products.
PROPOSED SOLUTION
1 Impulse products advertising strategies to consumers
The brand's products enjoy significant popularity and market presence primarily in Northern and Central Vietnam; however, their market share in the South remains limited due to strong competition This disparity may result in reduced market share and revenue for the company.
In 2020, TH True Milk, a leading brand in dairy and dairy substitutes, holds a limited market share in rural areas compared to urban regions, despite offering competitive pricing and product quality that surpasses many larger brands.
Therefore, the company needs to promote more advertising activities, such as:
To enhance market presence, it is essential to implement robust advertising activities and campaigns that target high-potential areas, particularly densely populated regions and rural areas in the South By focusing on these locations, where consumption capacity is significant but market share remains low, businesses can effectively diversify their outreach and strengthen their brand visibility.
Increasing product display, hang banners in large commercial centers, high- traffic areas such as bus stations, hospitals, schools.
To effectively promote new products and campaigns, it is essential to engage in communication activities, including posting in newspapers and magazines Additionally, online platforms such as news websites and social media channels like Facebook and Instagram should be prioritized, ensuring that both visuals and content are carefully curated to enhance the advertising of the company's offerings.
Video platforms like YouTube and TikTok have become powerful tools for businesses to promote their products TH True Milk can leverage these platforms to create engaging content that showcases its brand and products effectively.
Another way is to cooperate with celebrities, content creators, KOLs In new product promotion campaigns to increase the effectiveness of advertising campaigns
Here are a few photos of TH True Milk's Instagram page and 2 celebrity campaigns:
2 Research and develop products to meet consumers’ needs
In just a decade, TH True Milk has made significant strides in the Vietnamese dairy market through innovative strategies and a clear vision Moving forward, the company's primary objectives are to build consumer trust, boost revenue, and expand its market share Achieving these goals will require TH True Milk to enhance the nutritional quality, variety, and safety of its products.
To strengthen its position in the dairy market, the company should prioritize investments in facilities, machinery, and nutrition research to create delicious and safe nutritional formulas Additionally, leveraging scientific advancements from leading countries can enhance production processes, resulting in higher quality products Understanding consumer needs, particularly those of children—who rely on milk as a vital nutritional source—through surveys and feedback is crucial By aligning products with consumer expectations, especially for children, the company can solidify its presence and loyalty among dairy consumers.
3 Take advantage of benefits to maintain revenue during the Covid-19 pandemic
During the Covid-19 pandemic, TH True Milk benefited from its self-sufficient production resources, allowing the company to maintain a steady supply of its products As consumers increasingly sought nutritious dairy options to enhance their health, the demand for TH True Milk's offerings continued to rise.
Since the onset of the pandemic in March 2020, TH has distinguished itself as one of the few businesses to sustain its production chain, achieving double-digit growth while fully supporting employee benefits Currently, TH holds a leading position in Vietnam's fresh milk segment, commanding nearly 45% market share and continuing to experience growth even amidst the pandemic This success underscores the strong trust consumers place in TH's products.
Since March 2020, amid the ongoing COVID-19 pandemic, TH Group and Bac A Commercial Joint Stock Bank have actively participated in the "Vì tầm vóc Việt" Fund, delivering essential products, medical equipment, and necessities to critical areas affected by the outbreak.
- The three units have donated more than 4 million glasses of fresh milk and healthy drinks,
- 36 high-frequency ventilators and many medical supplies,
The organization has significantly contributed 46 billion VND to the Vaccine Fund, along with tens of billions of VND dedicated to support activities and healthcare for individuals directly impacted by the epidemic nationwide.
Until now, the total value of TH's support for COVID-19 prevention activities has reached more than 104 billion VND.
TH True Milk joins hands with the government and community to repel the Covid-
CONCLUSION
This essay explores the concepts of supply and demand, highlighting their interaction and the various factors that can influence them Additionally, it examines market equilibrium, detailing its characteristics and the impact it has on supply, demand, and market prices.
In the second part of the analysis, we examined the supply and demand dynamics of TH Dairy Joint Stock Company, providing a comprehensive overview of these factors in a real-world context This analysis led to the formulation of targeted solutions and objectives for TH True Milk, aimed at enhancing their market position and operational efficiency.
Finally, to have a better understanding of the supply and demand of TH True Milk company, here are the analysis of the company's advantages, disadvantages, opportunities and challenges:
- Large investment, leading modern equipment in Vietnam
- Revenue and profit are constantly increasing over the years
- Stable capital source from Bac A Bank.
- Advantage of pioneering pure milk brand in Vietnam.
- Clear and specific strategic goals.
- Experienced, enthusiastic and professional staff and management team.
- Cow farm and factory meet international standards.
- The process is closed and modern, ensuring the quality of each product when it reaches consumers, thus attracting and building consumers' trust in the company
- Compared to big competitors like Vinamilk, TH True Milk has a relatively low market share.
- High operating cost of dairy farming system.
- The distribution system has not yet created high coverage.
- Relatively high prices make it difficult to reach the middle and lower classes who account for a large proportion of consumers in Vietnam.
- Mainly doing business and relying heavily on the domestic market, the foreign market has not really had a foothold.
As the income and living standards of Vietnamese consumers continue to rise, there is a growing trend towards prioritizing health This shift is reflected in an increasing investment in functional foods and nutritional products, highlighting the consumers' commitment to improving their well-being.
- Opportunities for global development, access to large markets:
+ The first dairy company in Vietnam has a batch of milk officially exported to the Chinese market.
TH has established a presence in the Russian market with a farm and factory in two districts of Kaluga province, which will soon become the largest milk processing facility in Russia In Moscow province, a farm and fodder storage area have been completed Additionally, the Russian Far East and the Republic of Bashkortostan have invited TH to invest, with plans to begin cultivating and building farms in early 2020 Overall, TH is implementing investment plans across four regions in Russia, and with local support, the company aims to strengthen its foothold in the dairy industry and promote its True Milk brand globally.
The competitive landscape in the dairy industry is intensifying, with established domestic brands like VinaMilk and Nutifood facing formidable international rivals from countries such as the US, UK, France, and Japan With the implementation of the EVFTA, the elimination of tax rates between 5-20% on European dairy products over the next 3-5 years will enable Vietnamese consumers to access these foreign products at more affordable prices This influx of diverse tastes will pressure local brands like TH to enhance both their pricing strategies and product quality to remain competitive.
TH True Milk faces significant challenges in effectively implementing its future commitments amid fierce competition from both imported and local milk brands The company must focus on maintaining and enhancing the quality of its milk products while simultaneously upholding the benefits and advantages associated with its community campaign.
Recent analysis reveals the ongoing challenges faced by TH True Milk in the competitive dairy market Despite these obstacles, the brand has demonstrated resilience through significant achievements and impressive sales figures.
10 years, TH True Milk is still considered a phenomenon and a potential player in the dairy market in Vietnam as well as the world in the future.