MARKETING STRATEGY OF LA VIE LIMITED LIABILITY COMPANY (COMPLETE SOLUTION FOR DEVELOPING MARKETING MIX MINERAL WATER OF LAVIE LTD)

Paris Graduate School of Management

Thai Nguyen University

INTERNATIONAL EXECUTIVE
MASTER OF BUSINESS ADMINISTRATION PROGRAM

THESIS TITLE:

MARKETING STRATEGY OF LA VIE LIMITED LIABILITY
COMPANY (COMPLETE SOLUTION FOR DEVELOPING
MARKETING MIX MINERAL WATER OF LAVIE LTD).

Student’s name:

LE MINH QUANG

Intake I

2012


– The Thesis of IeMBA

TABLE OF CONTENT
INTRODUCTION

7

Chapter I: The situation of the marketing mix activities for mineral water 8
products of Lavie Ltd. in the past

1.1. About Company Limited Lavie and the production of mineral water

8

1.1.1Foudation and development

8

1.1.2. Vision - Mission - Values

10

1.1.3. Production and business results

15

1.1.3.1. The product structure of La Vie Co.

15

1.1.3.2. Revenue and profit over the years

16

1.2. Business environment analysis of la vie - external environment

17

1.2.1.

17

General environment - PEST model

1.2.1.1. Economic Environment

17

1.2.1.2. Political environment, policy and law

21

1.2.1.3. The socio-cultural environment

22

1.2.1.4. Population Environment

24

1.2.1.5. Technology environment.

26

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1.2.2.

Years of work environment Five Forces

27

1.2.2.1. Competitors

27

1.2.2.2. Customers

27

1.2.2.3. Suppliers

27

1.2.2.4. - Substitutes

28

1.2.2.5. Potential competitors

28

1.3. ENVIRONMENTAL ANALYSIS IN

28

1.3.1 The need to analyze the enterprise

28

1.3.2 Tangible resources

29

1.3.3 Intangible resources

30

1.3.4 Value Chain

31

1.3.5 Analysis of evaluation resources (7S)

35

1.3.6 Analysis and evaluation functions

36

1.3.7 Analysis and evaluation capacity

41

1.3.8 Identification and evaluation of valuable resources and core competencies

41

1.3.9 Analysis and evaluation of competitive advantage

41

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1.4. STRATEGIC ANALYSIS MODELS

42

1.4.1. Evaluate the matrix elements outside - EFE

42

1.4.2. CPM matrix

43

1.4.3. Evaluate the matrix elements inside - IFE Matrix

44

1.4.4. SWOT matrix

46

CHAPTER II : Production and business results achieved by Lavie Co., Ltd.

48

2.1.Mixed reality marketing activities for products co. lavie

49

2.1.1.Product Policy

49

2.2.2. Price policy

51

2.2.3.Policy objective of price

52

2.2.4. Factors affecting the price

52

2.3.Advertisement

53

2.3.1.Sales promotion (sales promotion)

55

2.3.2 Sales promotion activities for consumers

58

2.3.3 Other promotional activities:

59

2.4. Direct Sales

59

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2.5.Public relations activities

60

2.6. A number of marketing activities affect the marketing mix strategy for 61

Lavie mineral water products CO., LTD Lavie
CHAPTER III : A number of measures to improve the marketing mix 64
activities for mineral water products Co., Ltd. Lavie
3.1.Objective of the marketing system development mixed

64

3.1.1.The overall objective marketing

64

3.1.2. Objectives for the marketing mix activities

64

3.2. Solutions to finishing system combination marketing for mineral water 65
products company lavie lavie ltd.
3.2.1. Improve the company's marketing capabilities

65

3.2.2. Complete marketing system for mineral water product mixture Lavie

66

3.2.2.1.Program planning organizations marketing mix activities

66

3.2.2.2.Predict response response

67

3.2.2.3. Designed for marketing messages mixed

67

3.2.2.4.Decide the scope, frequency and intensity effects.

68

3.3.The complete system solutions marketing mix for Lavie mineral water 69
through its tools.
3.3.1.Advertisement

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3.3.2.Sales promotion activities

70

3.3.3.Direct Sales

71

3.4. Other solutions

72

3.4.1. Development of management information systems, marketing

73

information
3.4.2. Coordinate the policies of the marketing-mix

73

3.4.2.1.Coordinate with product policy.

73

3.4.2.2.Coordinate with the pricing policies:

74

3.4.2.3. Coordinate with distribution policy.

75

CONCLUSION

75

REFERENCE

75

INTRODUCTION

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Vietnam is now on the development of market economy, many components, the
integration with the regional economy and the world. In the development process,
there is a new job, new opportunities for the people of Vietnam, which is the field
of Marketing.
Only a few years ago, when it comes to Marketing people do not understand what it
is industry, they provided it is simply marketing. But perhaps now, the term
"Marketing" is no stranger to the people but they have not been able to fully
understand the role of its activities in the field of manufacturing and trading.
In the past customers have to be proactive to find the goods, and today's businesses
to find customers for his goods more and more, increasingly diverse. Consumers
may select goods for his business and marketing has helped to sell, just to help
consumers choose the right products they need.
Joint Venture Company La Vie is the one who must find his client because the
bottled water market today are widespread in Vietnam market. Issues need to set out
what companies must do to stay on the market this fierce watch?
In this article I would like to know how the company La Vie can stand strong even

in the Vietnamese market and Marketing department has contributed to that success

CHAPTER I: THE SITUATION OF THE MARKETING MIX ACTIVITIES
FOR MINERAL WATER PRODUCTS OF LAVIE LTD. IN THE PAST

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1.1 ABOUT COMPANY LTD LA VIE
1.1.1Foudation and development
Lavie venture company formed investment partnership of Long An Food Company
and Franco Asiatique Holdings Company Pte.Ltd. (CFAH) under license number
423/GP investor on 30/09/1992 with a total initial investment of $ 5,600,000,
capital of $ 2,000,000 of which the country accounts for 35% stake share, foreign
accounting for 65% share. In October / 1993 Perier Vittel Group-a group of the
world's leading mineral water Company has equity participation CFAH with the
level of contribution is 51% of the shares of the Company CFAH. For Vietnamese
partners, on 04/04/1996 General Trading Company nominated Long An Province
Long An alternative Food Company under the investment license number
423/GPDC2. Lavie Venture company officially changed the name into Co. Lavie on
17/07/2007 under number 501 022 000 040 investment certificate by the People's
Committee of Long An Province-level Co. Lavie is the cooperation between
General Trading Company Long An Province and Nestle Waters corporations.
La Vie Co. officially put into operation on 01 May 07, 1994 with an initial capacity
of 15 million liters / year. Investment each year to be considered by the growth of
manufacturing and trading company. Current capacity 3-fold increase compared

with the initial capacity, there are two kinds of mineral water production line. From
the beginning of modern automated equipment with a closed process technology
from production of bottles, bottle packaging under strict quality supervision of
Neslte Waters, a member of the Nestle Group, along with good market access and
exploit the products of the company is leader in the field of products and bottled

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water is the only bottled water products sales network across the country. Now, the
company is providing the Vietnam market products called 'natural mineral water La
Vie'.
Co., Ltd. La Vie is the first beverage company in Vietnam granted certificate of
international standard ISO 9002 and continuously for 14 years (1997 - 2011) La Vie
was voted by consumers' 'High Quality Vietnamese Goods'. In particular, for 8
consecutive years (2001-2008), La Vie is considered the best and award winning
'Golden Dragon' by the Economic Times in conjunction with the Ministry of
Planning and Investment organization.
La Vie Co., whose office is located in Long An and three branch operations in Ho
Chi Minh City, Hung Yen and Hanoi. The company operates under the
administration of the board, including general manager and deputy general manager
of the Company. From its inception, the company was interested in the development
of local human resources, the company has nearly 272 staff members, but only two
foreigners is CEO and plant manager. The key staff are university graduates and be
nominated to France to attend training under the guidance of experts of Nestlé
Waters Corporation. The Company also applies mentoring training measures in

place or send professional training courses in the country to improve the skills of
officials and employees of the Company.
A crucial part of the success of La Vie Co., Ltd. is a clever combination of
professional qualifications in the field of international mineral of Nestlé Waters
Corporation with the intelligence and diligence of the basic training Vietnam
Company to a sufficient level, access to new technologies as well as take on the
important position.

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The milestone of La Vie
1992: Establishment of Joint Venture mineral La Vie in Long An
1993: Nestle Water is a major investment for a 65% stake
1994: La Vie debut product markets 0.5L and 1.5L.
1999: La Vie launched 5G bottles for home and office
1999: La Vie achieved ISO 9001 certification, the first company in the field of
beverage achieve this certification
2002: The factory in Hung Yen official manufacturer La Vie provides market the
North
2005: Innovation from the square bottle round bottle switch use to this day
2008: Investing in small bottles and bottles of 19L line with the most modern
technology for the plant in Long An
2009: Achieving ISO 22000 certification, ISO 14001 and OHSAS 18001
2010: Investing in small bottles and bottles of 19L line to the factory in Hung Yen
2011: launch of the new line Krones for Hung Yen plants (20 000 bottles / hour,

project investment PET line for Long An (48000 bottles / hour) and extended
storage.

1.1.2. Vision - Mission - Values
Vision:
Maintain and promote La Vie become the number one bottled water company in
Vietnam (On production and sales) with the resulting high-quality products bring
profit to the company.

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Mission:
- Developing and investing in key personnel
- Investment in system / process (ERP, RMA, etc.), re-set the workflow to improve
productivity
- Investments in brand and product innovation
- Focus on quality
- Improving safety behavior in all areas of the company
- Continuous improvement in order of priority everywhere
Value
- All for customers: We are committed to focus on serving customers and
consumers.Customers will feel very satisfied with our quality and service. We
anticipate the future needs of our customers and are always prepared to meet those
needs.
- Commitment to quality: There is no compromise on quality.La Vie products

always have high quality than the competitors.
Continuous improvement: We always have the ambition to continually improve the
performance measurement indicators, methods and work efficiency of employees.
- Human resources La Vie make a difference: We want to retain, develop and
recruit the staff always had the passion, ambition and progressive.La Vie employees
who have high-performance along with extensive knowledge of the soft drinks
industry.
- Integrity, honesty and dedication: We are open and fair with employees and
business partners.We respect different views. We are committed to the job and the
company.

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- Proud of the company: We are convinced and proud to work for food and
beverage companies in the world as well as Vietnam.

Figure 1.1. Organization Chart Company La Vie

General directors representing foreign partners, general operating business
operations, responsible for the efficient production of the company's business.
Deputy General Director representing the Vietnamese partner in the joint venture,
besides vice president responsible for the relationship between joint venture with
the local government and is operating the quality management activities throughout
the company.

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Director responsible for managing plant production activities as well as
development projects in both the Long An and Hung Yen. Director of the factory
Long An (in fact Director cum factory location) and Hung Yen carry out the
management of production activities in the factory under the management of the
factory manager. Long An is responsible for plant production and supply of
products to market South from the town back on. Hung Yen is responsible for plant
production and market supply North from Quang Tri.
Company marketing department is responsible for marketing, trade promotion for
the country, both North and South markets. Marketing department is responsible for
development and implementation of strategic marketing plans to promote the sale of
products to ensure the business plan of the company.
Booking is divided into two zones with two parts: the sales department small bottle
of South and North, the obligation to sell large bottles of South and North. Northern
Sales is responsible for promoting the consumption of plant products by Hung Yen
produce across the northern range from Quang Tri. In the North, with sales selling
small bottles and a big bottle, small bottle sales department with the task of
organizing the consumption of small-sized products (products with a capacity of
350ml bottles; 500ml; 1 , 5L; 5L) also large bottle sales department is responsible
for organizing large-sized consumer products (product type cylinders 19L aka 5
gallon bottles).
Purchasing and supply mission to organize the search for suppliers of materials,
equipment, machinery, purchase planning and production provide sufficient and
timely manner to ensure the production schedule . And organize freight to the place

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of consumption, fully meet the requirements of the volume of goods as required by
the sales department.
Forecasting, supply planning and product consumption by the plant, supply room,
the sales department work closely together to build. Sales department is often to
predict the volume of products sold in certain phases as the month and year, on the
basis that the supply air and room planning production and supply of products to the
market.
Financial and Accounting Department has an advisory role to the board of the
financial plan to achieve the highest business performance through this plan. Also
responsible for coordinating implementation, inspection and control of business
operations of the company through the financial criteria to ensure the business
objectives set.
HR management HR issues such as recruitment are fully guaranteed to provide
high-quality human resources to effectively serve production and business activities
of the company. Make sure the salary, bonuses and social modes such as social
insurance, health insurance, etc. of staff are met satisfactorily.
The IT department is responsible for ensuring the operation of information
technology systems, data connectivity throughout the company, effective.

Target market of La Vie
Natural mineral water products the La Vie service for refreshments and goals focus
on the high-income market, development of industrial life that is urban, industrial

zones across the country. La Vie bottled product types 350ml, 500ml, 1.5L, 5L and
5G (19L) in which two strategic product lines is 500ml and 5G.

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- The small bottle of product: 350ml, 500ml, 1.5L and 5L are sold nationwide
through retail market: distributors, dealers, supermarkets and retail stores.
- 5G assigned product market:


Commercial customer markets: business, company, factory, industrial,

office, headquarters buy in bulk.


Residential market: the family



Current 5G products are distributed mainly in Hanoi,

Hai Phong, Ha Long, Hai Duong, Ho Chi Minh City, Can
Tho, Vung Tau, Bien Hoa and surrounding areas

1.1.3.

Production and business results

1.1.3.1. The product structure of La Vie Co.

The time now La Vie bottled natural mineral water as the major products are
classified into two groups: small size products with the bottled product types 350ml,
500ml, 750ml Premium, 1.5L and big bottled products Product with 5L and 19L
vessels. In which the two products account for a high proportion of 500ml and 19L.
Analyzing the structure of small-sized bottles and large bottles, the data is measured
in liters of bottled products, small size accounts for 46% of output, and large size
bottles account for 54%

Analysis of the proportion of each product, with data calculated in liters, 19L
products (5gallons) accounted for 49.4% of output and 500ml products accounted
for 28.7%. These are the two main products in the product portfolio of La Vie. The

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remaining products turn 350ml accounted for 8.0%, 1.5L accounted for 8.4%, 5L
accounted for 4.4%, the kid-350ml 0.5% and 0.3% premium 750ml.

1.1.3.2. Revenue and profit over the years

Table 1.1: Summary of revenue and profit

Items

2007

2008

2009

2010

2011

REVENUE

231,571,343

304,377,018

388,594,700

543,676,268

749,644,690

TAX

10,008,896

23,816,172

32,823,822

69,661,538

84,101,223

NET PROFIT

(1,394,478)

17,039,498

26,967,557

50,687,848

62,589,614

31%

28%

40%

38%

138%

38%

112%

21%

8%

8%

13%

11%

PROFIT
BEFORE

REVENUE
GROWTH
PROFIT
GROWTH
RATE
RETURN

OF

4%

Source: Financial statements of La Vie 2007-2011

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Chart 1.1: Revenue growth and profit

Tăng trưởng Doanh thu-lợi nhuận

140%

14%
12%

120%

10%

100%

8%

80%

6%

60%

4%

40%

Tỷ suất lợi nhuận

Doanh thu & Lợi nhuận

160%

2%

20%
0%

TĂNG
TRƯỞNG
DOANH THU
TĂNG
TRƯỞNG LỢI
NHUẬN
TỶ SUẤT LỢI
NHUẬN

0%
2007

2008

2009

2010

2011

2.2. BUSINESS ENVIRONMENT ANALYSIS OF LA VIE - EXTERNAL
ENVIRONMENT
2.2.1.

General environment - PEST model

2.2.1.1. Economic Environment
Economic growth rate

Table 1.2 : Growth rate of GDP in the period 2002-2011
2002

2003

2004

2005

2006

2007

2008

2009

2010

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2011

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GDP Growth (%)

7.1

7.3

7.8

8.4

8.2

8.5

6.3

5.3

6.8

5.9

Source: World Bank - World Bank

Figure 1.2: The growth rate of GDP of Vietnam during the period 2002 - 2011

- According to data on the economic growth of Vietnam from 2002 until now is
quite high.This is a positive factor to the business activity in the economy of
Vietnam in general and La Vie in particular. Growth rate of GDP growth has pulled
the growth rate of GDP per capita also increased:

Table 1.3: GDP per capita in 2002-2011
2002

2003

2004

2005

2006

2007

2008

2009

2010

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2011

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GDP Growth (%)
GDP

per

(USD)

capita

7.1

7.3

7.8

8.4

8.2

8.5

6.3

5.3

6.8

5.9

441

492

558

642

731

843

1,070

1,130

1,224

1,411

Unit: USD / person / year

Source: World Bank - World Bank

Graph: GDP per capita in 2002-2011

GDP per capita (USD)
1500
1000
500

GDP per capita…

0

- From the above data shows GDP per capita relative increase steadily over the
years, and the relative increase since 2002.Vietnam has overcome the low-income
threshold and are at the stage of low average income. This is a benefit for the
economy as well as general manufacturing enterprises La Vie in particular.
Increasing consumer

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- Economic growth and per capita income affects the consumption of general goods
and bottled water products, including La Vie in particular.When economic growth,
high income people, material life is guaranteed, the need to improve nutrition,
demand for food safety, including bottled drinking water also increases.

- On the one hand to achieve a relatively high GDP growth for many years, but
Vietnam's inflation high and erratic, control is poor.2011 inflation index at
18.7%. This is a major difficulty for the production, rising input value while people
limit consumption because of the expensive.
- Go along with high inflation and erratic bank interest rates also unpredictable
fluctuations, especially in 2011 and early 2012, interest on bank loans at very high
rates, sometimes up to 25% / year.This figure was stifling the production of goods
and, of course, have a major impact on the economy. Production decline as people's
incomes decline and ultimately consumers decline, here it is direct production
decline.
Vietnam international economic integration:
- When Vietnam joined the World Trade Organization WTO, Vietnam will cut
import duty in accordance with the roadmap as WTO commitments.Specifically,
about 36% of tariff lines in the tariff to cut import tax rates compared to the
current. Route cuts last from 5-7 years. The branch cuts most textiles, fisheries,
manufacturing
create and machinery, automobiles and auto parts, food processing ...
- Along with the reduction of import tariffs under WTO commitments, Vietnam
continues to make the commitment to regional tariff reductions under the FTA.As
these commitments are very radical cuts, down to 0-5%. This will have a significant

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impact on domestic production if no corrective measures for partner countries have
advantages in manufacturing and EXPORT export.The tariff reductions under the

FTA within the framework of AFTA time not have much impact on domestic
production due to the fact that ASEAN trade accounted for only 25-27% of the total
value of import and turnover thus ensuring that the only to be exempt from the new
tax accounts for 10% of total imports from ASEAN. However, the when AFTA
extended to China, South Korea, the effects will become evident.
- The Vietnam involved more deeply into the world economy, on the one hand to
create favorable conditions for domestic companies expand, access to advanced
technology, improve management On the other hand, it also creates competitive
pressure for domestic companies.Forcing companies to regulate activity, lower cost
products to adapt to the new situation.

2.2.1.2. Political environment, policy and law
- The stable political situation of Vietnam is crucial to economic development, jobs,
income for workers, increasing social demands.This is also a positive impact in
creating and implementing strategies of enterprises in Vietnam in general, including
La Vie.
- In the trend of integration into the regional and world economy, Congress enacted
and continue to complete the Code of Commercial Law, Business Law, Investment
Law, Tax Law ... to speed up the process economic reform in Vietnam.
- The State has implemented policies to encourage all economic sectors, industries,
business enterprises which the law allows.This leads to stronger competition in the

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market, which requires businesses to survive and develop, they must constantly

improve their competitiveness, more efficient operation.
- It can be said that bottled water in general and bottled natural mineral water in
particular is one of the essential products in people's everyday lives, ensuring clean
drinking water needs of the strata in society.
- Legally binding for the production of bottled natural mineral water mainly related
to food safety and protection of natural resources and the protection of consumers'
interests.This is also the problem is La Vie many years very seriously and
considered the long-term strategy.

2.2.1.3. The socio-cultural environment

Vietnam in the concept of culture is a unified national culture on the basis of multiethnic cultural nuances are presented in three main characteristics:
The first characteristic: Vietnam has a rich culture and diversity in all aspects, the
Vietnamese community with 54 ethnic groups have the right customs, good for a
long time, the ceremony Meeting meaningful community activities, sustainable
belief in religious, ideological tolerance in the different teachings of the religion,
thorough communication and metaphor in language communication, from
traditional to modern literature and art.
The second characteristic: The structural differences in terrain, climate and ethnic
distribution, the population has created the cultural area has its own characteristics
in Vietnam. From the cradle of Vietnamese culture in the Red River Delta of Viet
mainstream culture villages and wet rice civilization, to the cultural nuances of

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ethnic minorities in the Northwest and Northeast. From the land border Vietnam's
telecommunications building in the North Central to blend with Cham Cham culture
in South Central. From the new lands in the South with a combination of ethnic
culture, Khmer to the diversity of cultural and ethnic groups in the Central
Highlands.
The third characteristic: With a history of thousands of years of English along with
the convergence of the back of other peoples, from the local culture of the ancient
Vietnamese from Hong Bang to the external influences for thousands of years. With
influences from ancient China and Southeast Asia to the influence of France since
the

19th

century,

the

West

in

the

20th

century

and

21st

century

globalization. Vietnam has made a change in culture in the period of history, there
are aspects loss but there are other cultural aspects added to the culture of modern
Vietnam.

Currently Vietnamese culture retains the inherent richness however, the black
mixed with the awareness of new and modern and there are even imported from
outside interference nature strong.
The interference of culture that provides opportunities and challenges for social and
cultural issues, but also the economy. Consumer goods manufacturing industries,
including La Vie also given yourself the opportunity.
Vietnam, with 54 ethnic groups and there are thousands of festivals every year, the
festival attracts millions of visitors, the demand for drinking water, or water festival
in the festive spirit is great.

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Habits as consumers still use boiled water instead of bottled water is also difficult
for the bottled water industry, however this is slowly changing habits when
industrial life washed until the distant rural areas.
Thanks to the open economy, there is a strong pattern of culture in Vietnam blow
millions of foreign tourists to visit, this is a tremendous opportunity for the
production of drinking water close bottles in general and La Vie in particular.

2.2.1.4. Population Environment
Pakistan is considered the country's population, about 90 million people
today. Vietnam's

population

is

now

considered

the

golden

population

period. Population structure in the process of change is very powerful.
First, population growth trend analysis

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Sơ bộ 2011
87840.0
1.04
27888.2
31.75

2010
86932.5
1.05
26515.9
30.50

2009
86025.0
1.06
25584.7
29.74

2008
85118.7
1.07
24673.1
28.99

2007
84218.5
1.09
23746.3
28.20

2006
83311.2
1.12
23045.8
27.66

2005
82392.1
1.17
22332.0
27.10

2004
81436.4
1.20
21601.2
26.53

2003
80467.4
1.17
20725.0
25.76

2002
79537.7
1.17
19873.2
24.99

2001
78620.5
1.27
19299.1
24.55

2000
77630.9
1.35
18725.4
24.12

1999
76596.7
1.51
18081.6

thành thị (%)

1998

23.61

Tỉ lệ Dân số

75456.3
1.55
17464.6
23.15

thị

1997
1.57
16835.4
22.66

số (%)

74306.9

73156.7
1.61
15419.9
21.08

Tỷ lệ tăng dân

Dân số thành

1996

71995.5

số

14938.1

Tổng số dân

20.75

Thời gian

1995

Table 1.4 : Vietnam population data

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– The Thesis of IeMBA

Source: General Statistics

Comments: The population of Vietnam is about 90 million people and is still in a
straight line, with the current population growth rate of about 1% / year 2011 is
1.04%.
Analysis of population distribution by urban and rural areas showed increasing
trend of urban population trend line.There are currently about 32% of the
population live in urban areas, this ratio will change rapidly in the future.

Vietnam is in the golden population period should have abundant labor force, as
well as a major consumer force for manufactured goods.
Table 1.5: Age structure of the population, 2009
Tuổi

Nam

Nữ

Tỷ lệ (%)

Lũy tích

0-4

8,6

7,8

8.2

8.2

5-9

8,2

7,5

7.8

16.0

10-14

8,8

8,1

8.4

24.4

15-19

10,8

10,1

10.4

34.8

20-24

10,0

9,6

9.8

44.6

25-29

9,2

8,9

9.1

53.7

30-34

8,2

7,8

8.0

61.7

35-39

7,8

7,4

7.6

69.3

40-44

7,0

6,9

7.1

76.4

45-49

6,2

6,5

6.4

82.8

50-54

4,9

5,4

5.1

87.9

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