(LUẬN văn THẠC sĩ) nghiên cứu marketing và đề xuất cho sản phẩm fast food vietmac

Objectives of the research Vietmac had started its business with very limited information in fast food industry.. Scope of the research First, in this research the author presents an o

NGUYEN MINH DUC

VIETMAC FAST FOOD – MARKETING RESEARCH

AND RECOMMENDATIONS

Major: Business Administration

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisor: Dr Tran Doan Kim

Hanoi – 2011

TABLE OF CONTENTS vi

LIST OF CHARTS ix

LIST OF FINGURES xi

LIST OF TABLES xii

INTRODUCTION 1

CHAPTER 1: LITERATURE REVIEW 9

1.1 Marketing research 9

1.2 Research methodology theory and implication 13

1.2.3 Sample selection 18

1.2.4 Data collection methods 19

1.2.5 Data processing analysis 19

1.3 The marketing analysis 20

1.3.1 Fast food marketing 20

1.3.2 Market segmentation, target market and positioning 23

1.3.3 Marketing mix 23

1.4 Franchising 25

2.1.2 Market development 33

2.1.3 Consumer data 34

2.1.4 Competitor information 35

2.1.5 Vietnam Fast food Industry models analysis 38

2.2 Vietmac marketing review 44

2.2.1 About Vietmac 44

2.2.2 Comparative advantages and marketing strategies 50

2.2.3 Initial target market & customer 51

2.2.4 Performances 52

CHAPTER 3: SURVEYS CONDUCTING AND FINDINGS 54

3.1 Surveys conducting 54

3.1.1 Questionnaire design 54

3.1.2 Target respondents and sampling 56

3.1.3 Questionnaires delivery 56

3.1.4 Data processing and analysing 56

3.2 Vietnam fast food market findings 57

3.2.1 About competitors 57

3.2.6 Behavior of people about distribution channel 69

3.2.7 Market structure and opportunity 70

3.2.8 Recognition of Vietmac and comments 72

3.2.9 Respondents information 74

3.3 Vietmac satisfaction measurement 76

3.3.1 Satisfaction measurement comperation between Vietmac and KFC 76

3.3.2 Respondents summary 84

3.4 Other findings 86

3.5 Answering the research question 88

CHAPTER 4: SOME MARKETING RECOMMENDATIONS FOR VIETMAC 92 4.1 Recommendations 92

4.2 Action plans 97

4.3 Conclusion 97

REFFERENCES 99

APPENDIXES 101

Chart 3 Brand changing habit 59

Chart 4 Brand satisfaction measurement 60

Chart 5 Nutrition, health and safety satisfaction measurement 60

Chart 6 Tasty and flavor satisfaction measurement 61

Chart 7 Convenience satisfaction measurement 62

Chart 8 Menu flexible satisfaction 62

Chart 9 Price satisfaction measurement 63

Chart 10 Point of sale decoration satisfaction measurement 63

Chart 11 Service and staff behaviour satisfaction 64

Chart 12 Satisfaction compare within KFC, Jollibee and Vietmac 64

Chart 13 Important factors 67

Chart 14 Behaviour of people about price 67

Chart 15 Price sensitive 68

Chart 16 Ads channels 69

Chart 17 Distribution channels 70

Chart 18 Frequency of eating fast food in last month 71

Chart 19 Times of eating fast food in last three months 72

Chart 20 Recognition of Vietmac Rice burger 72

Chart 21 Brand satisfaction Vietmac V.s KFC 77

Chart 26 Price satisfaction Vietmac V.s KFC 81

Chart 27 P.O.S decor Vietmac V.s KFC 81

Chart 28 Service and staff behaviour Vietmac V.s KFC 82

Chart 29 Vietmac satisfaction by factors 83

Figure 4 Factors influence to Vietnam fast food marketing application 22

Figure 5 The four Ps components of marketing mix 24

Figure 6 Market analysis steps 28

Figure 7 Porter five force 44

Figure 8 Vietmac Rice burger product 46

Figure 9 Vietmac's strengths and weaknesses 84

LIST OF TABLES

Table 1 Forecast sales in fast food by subsector: units/outlets 2011-1014 (quoted from 2009 -

2014) 33

Table 2 Forecast sales in fast food by subsector: foodservice value 2011 – 2014 (quoted from 2009-2014) 33

Table 3 Global Brand Owner Shares of Chained Fast Food 2005-2009 38

Table 4 Brand Shares of Chained Fast Food 2006-2009 38

Table 5 Hanoi fast food market sales forecast - lunch time meal 49

Table 6 Vietmac performances 52

Table 7 Factors measurement influences on chosing a brand 58

Table 8 Time of meal 65

Table 9 Place of meal 65

Table 10 Group of people 66

Table 11 Willing measurement to sellect fast food 66

Table 12 Treatment of people with fast food 70

Table 13 Fast food potential measurement 70

Table 14 Respondents by genders 74

Table 15 Respondents by ages 75

Table 16 Respondents by careers 75

Table 17 Respondents by location 76

Table 18 Respondents by income 76

Table 19 Vietmac Satisfaction by factors 82

Table 20 Descriptive statistics 84

Table 21 Gender 85

Table 22 Careers 85

Table 23 Place of work 86

Table 24 Decision right 86

INTRODUCTION

1 Back ground

Global economic with the daily changing of business environment, as the human needs are continuously developing and changing, according to those changes, opportunities are constantly appearing Marketing research plays an important role

in searching for new opportunities and determining the objectivities, valuation of those new opportunities It is also used to know more about existing market like customer, competitor, business environment, marketing trend and prospect… Fast food is an example of changing and developing market over the past years Living and working environment and food culture have been changing, people quickly accept Western style fast food and this is a great opportunity for investors in this area

In a short time, the leading brands of fast food worldwide have been quickly penetrating and growing strongly in Vietnam, for example, KFC, Lolteria, Jollibee, BBQ, Pizza Hut

Sales volume of fast food chain stores in five years from 2004 to 2009 had grown 55%, and forecasted to grow 18.9% / year from now to 2014 Sales of fast food industry in Vietnam in 2009 reached 6.296,6 billion, expected to reach 9.204, 4 billion USD in 2014 (according to Eromonitor international) Fast food for lunch time that serving officer is one of the major markets that competitors are focusing

on

Vietnam currently has some brands participating in fast food industry and also found the objective signs e.g Pho 24, Ga 99 and most recently, in early July,

2011, Vietmac Rice burger brand was officially introduced in Hanoi after six month

of researching and developing

2 Definition of Problem

Vietmac is trying to launch a new product – Vietmac rice burger to a rich potential market but risk It stared business with limited information about fast food market,

it did business when the founder saw the opportunity with his intuition

Vietmac managers need to know both about market landspace and behaviour of customer about Vietmac product

Who are serving this market? What are customer’s needs, habit and satisfaction? What is the most important characteric of fast food products?

Why some people choose FKC, others choose Jollibee, and some like Vietmac? What differentiates Vietmac product from its competitors' products? Do we need to enhance our current product or service?

What specific marketing strategies are currently using? How do competitors market their products? Should marketing strategy need be revised?

After six months of testing new product Vietmac rice burger to Hanoi market, the company has achieved initial goals, but this time the company needs to look back for any adjustments in marketing strategy and marketing plan to choose a right way

of developing

3 Objectives of the research

Vietmac had started its business with very limited information in fast food industry

So that the first objective is to have an overview of Vietnam fast food market It is very important, once understanding about market, Vietmac managers will know how to deal with it Information about market the thesis will cover is: competitor, customer need, habit, and satisfaction, product, price place and promotion, market structure and opportinuty, awareness of Vietmac product

The second objective is to measure the satisfaction of costomers with Vietmac rice burger product after few months of testing and developing the products Satisfaction about brand/origin, nutrition/health, tasty/flavor, time consumming, menu flexible, price, place, service and staff will be presented

The author will focus on fast food products that serve for officer in lunch time in Hanoi city

Finally, is to provide Vietmac manager some recommedations in marketing strategy and marketing activity

4 Research question

To fullfill the objectives of the research, the study should answer the following questions:

• Is there a need for Vietmac's product or service?

• What is the target market?

• Who are the customers?

• What do customers expect from this type of product or service?

• What are customers willing to pay for this type of product or service?

• What specific companies are servicing this market?

• Is the market saturated or wide open? If so, why?

• What is the size of the market? Is it a growing market? Is the industry stable, volatile, growing or trendy?

• How can Vietmac reach this market? How do competitors reach the market? What are the business models of competitors?

What core competencies must the product or service have?

• What is Vietmac competitive advantage?

These questions will be answered after this marketing research is completed

5 The necessary of the research

Marketing research covers a wide range of phenomena In essence it fulfills the marketing manager’s need for knowledge of the market The marketing manager of Vietmac may ask “How we can expand Vietmac brand and gather customer from other competitors?” or “How is customer satisfying with the products?” Or “If need

to refine the product or price? ” Each of these marketing questions, as well as questions concerning most other marketing decisions, requires some information about how customers, distributors, and competitors will respond to the executive’s marketing decisions Marketing research is one of the principal tools used for answering these questions

Beside that, after discovered, the author found that, there are few reports, documents, researches mentioned about Vietnam fast food market While, Vietmac had tested it products for few months, so that it needs more and more information about fast food market and its testing results This research may supply more knowledge for readers, investors, marketers, and especially, it is meaningful for Vietmac managers

6 Scope of the research

First, in this research the author presents an overview of Vietnam fast food market and some major analysises about it such as market trends, market prospect, consumer market data, competitor information, model analysis

Second, Vietmac customer satisfaction measurment will be conducted in the research

The author also compare Vietmac rice burger with the market leader, may be KFC, Jollibee or Lotteria to find out the strong and weakness of each sides

The research will conduct two questionnaire surveys, one for Vietnam fast food market, and the other for Vietmac satisfaction measure

Food for lunch time market is diversified to kinds of foods Take the main market share is traditional foods such as “ordinary sidewalk meals” (In Vietnamese is said

“Cơm bụi”), “home delivery rice meals” (In Vietnamese is said “Cơm hộp”), and

“canteen service” However, Vietmac rice burger is defined as fast food, so the author will not mention and analyse non-fast food products, or if yes, it is just point

of views of the author, professors, or information gathering from second data sources The fact that, definition of fast food is too wide, it includes any foods that can be served fast, such as bakery product fast food, burger fast food, chicken fast food, pizza fast food, Vietnam noodle fast food or it may be classified to chained fast food and independent fast food, convenience store fast food… in this research the author mainly focus on chained fast food with range of products that serve for lunch time meal such as burger fast food, chicken fast food and Vietnam noodle And the research focuses mainly on officers working in Hanoi

7 Research methodology

The data and information may be collected from primary source where data can be measured in numerical or secondary source where information is just as point of views In this research the outhor uses both approach method of qualitative and quantitative

Data and information from secondary sources and surveys are both gathered

This research will use descriptive research method to describe and demonstrate the answers of the problems

8 Research design

In general, the process of the research usually involves six phases described as

Figure 1 Phases of the research process :

Figure 1 Phases of the research process 1

This research will follow this design

9 Organization of the research

This thesis includes four chapters

Chapter one: Literature review In this chapter, we will scan through the literature about marketing research, research methodology, marketing management, and the theory of franchising By understanding this literature chapter, readers will have a better understanding the other chapters

1 William G.Zikmund, Exploring marketing research, 2 nd edition, 1986, p.40

Chapter two: Vietnam fast food market review and Vietmac marketing review First, this chapter will take an overview of Vietnam fast food market It gives readers an understanding about history, market trend, market prospect, consumer market data, competitor and some industry model analysis This chapter also helps the researcher to do next chapters more fluently, accurately It is also help researcher to have more information for other analysis

Sencond, the situation analysis is main concept of this chapter General information, idea, products, comparative advantages of Vietmac are mentioned in this chapter

Chapter three: Surveys conducting and findings In this chapter, the author will describe the conducting of two questionnaires such as generating needed information and questions, designing questions, respondents and sampling, questions delivery, data process and analysis, and finally, the findings of the research will be presented in this chapter

Chapter four: Some Marketing recommendations for Vietmac After discovering theory, market review, conducting surveys, and the findings are presented in above chapters The author will make some recommendations for Vietmac Future actions should be suggested Finally, in this chapter, any condensations will be summarized

in conclusion section

8

Figure 2 Organization of the research

CHAPTER 1: LITERATURE REVIEW

By understanding the literature, readers can approach the research easily, accurately This chapter will mention about basis theories such as marketing research, research methodology theory and implication for this research, marketing management, and franchise theory

1.1.1 Task and Definition

The task of marketing research is to make the information used in decision making more accurate The emphasis of marketing research is to shift decision makers from intuitive information gathering to a systematic and objective investigation

As American marketing association: Marketing research is defined as the systematic and objective process of gathering, recording, and analyzing data for aid in making marketing decisions 2

After that, it expanded as: Marketing research is the function that links the consumer, customer, and public to the marketer through information - information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process Marketing research specifies the information required to address these issues, designs the methods for collecting

2

American marketing association (1960) Marketing definitions: a Glossary of marketing terms , page 17

information, manages and implements the data collection process, analyzes, and communicates the findings and their implications 3

1.1.2 Marketing information system (MIS)

One of the most essential tasks of marketing research is to provide information for making decision Has many alternative sources and type of information It may be available or gathered from a survey Managers usually complain of a lack of right information, they were also overburdened with too much irrelevant information Resolution for this trouble, information should be managed systematically Further,

as marketing research grew in importance during the 1950s and early 1960s, managers realized that unsystematic handling of isolated problems as they occurred was not the most effective means for gathering information This more effective type of thinking, along with the widespread use of computers, led to the development of the marketing information system (MIS) concept

A marketing information system is a continuing and interacting structure of people, equipment, and procedures design to gather, sort, analyze, evaluate, and distribute pertinent, timely, and accurate information for use by marketing decision makers to improve their marketing planning, execution, and control 4

1.1.3 Marketing research process

In introduction, six phases of research had been listed Now, Figure 3 Follow chart

of the research process shows the decisions that researchers must make in each phase

3 American Marketing Association (AMA) - Official Definition of Marketing Research

4 Philip Kotler, Principles of Marketing (1980, page 136)

Figure 3 Follow chart of the research process 5

The process begins with problem discovery Indentifying the problem is the first step toward its solution

Correctly defining the problem is the crucial first step in the marketing research

process If the research problem is defined incorrectly, the research objectives will also be wrong, and the entire marketing research process will be a waste of time and money

Exploratory research is often conducted during the initial stage of the research process The preliminary activities undertaken to refine the problem into a

5 William G.Zikmund, Exploring marketing research, 2 nd edition, 1986, p.42

researchable one need not be formal or precise The purpose of exploratory research

is a progressive narrowing of the scope of the research topic and a transformation of the discovered problems into defined one incorporating specific research objectives Researchers have three basic techniques for discovering insights and gaining a clearer idea of the problem: secondary data, experience survey, and pilot studies

Statement of research objectives After defining the problems, with or without exploratory research, the researcher should make a formal statement of the problem

and research objectives It points out the type of information that should be

collected and provides a framework for the scope of the study

Research design After the researcher has formulated the research problem, the research design must be developed A research design is a master plan specifying the methods and procedures for collecting and analyzing the needed information, it

is a framework for the research plan of action

Selection of the basic research method takes an important role In general, there are

four basic design techniques for descriptive and causal research: survey techniques,

experiments, observations and secondary data studies Which techniques should be

utilized depend on available data sources, the urgency of the decision, and the cost

of obtaining the data

Once the proper design has been determined, the researcher moves on the next phase: sampling

Sampling involves any procedure that uses a small number of items or that uses parts of the population to make a conclusion regarding the whole population

The next sampling issue concerns sample size Sample size means that how big

should the sample be?

Gathering or collecting information should be conducted after all above phases Correlative with research techniques, there are many methods of data gathering

such as: secondary methods, observation, mail interview, telephone interview, personal interview, focus group

Once data gathering has been completed, the data must be converted into a format

that will answer the research question Data processing generally begins with the

editing and coding of data Editing involves checking the data collection forms for omissions, legibility, and consistency

Before data can be tabulated, meaningful categories must be established for groups

of responses The rules for interpreting, categorizing, recording, and transferring the data to data storage media are called codes

Finally, conclusions and reports are made for managerial decision

This section discusses more about the research design and methodology The first

concept that the author mentions is research purposes? After that, which method

approach should be used, in method approach theory, the author mentions about

types of research, research approaches, and choosing a basic method of research

Which types of research should be applied, Exploratory research, Descriptive

research, Analytical research, Predictive research and why they are chosen? Which

method approach should be used, qualitative or quantitative? Which basic methods

of research should be applied, survey research or secondary data study?

To answer those questions, research design is first dealt with Marketing research

design includes six phases (as in introduction mentioned, see Figure 1 Phases of

the research process ) To discover research methodology, the phases will be

interpreted once again, see again at Figure 3 Follow chart of the research process

for analyzing

After that, Sample selection, Data collection methods, Data processing analysis will be discussed to help readers know more about how the surveys is conducted

This section will detail the theory of above section – marketing research

1.2.1 Research purpose

Market research is the process of systematic gathering, recording and analyzing data about customers, competitors and the market This research can help create a business plan, launch a new product or service, fine tune existing products and services, expand into new markets etc It can be used to determine which portion of the population will purchase the product/service, based on variables like age, gender, location and income level It can be found out what market characteristics your target market has With market research companies can learn more about current and potential customers

The purpose of this research is to help company make better business decisions about the development and marketing of new products and fine tune the product – Vietmac rice burger after few months of testing in market It also has a review and synthesis existing knowledge about marketing research and fast food market in Vietnam

1.2.2 Research approach

This research need information about fast food market, gathering information is one

of the most important tasks So that, after definition of the problem and identification objectives and questions of research, now the types of research, research approach and research methodologies are needed to define and employed

1.2.2.1 Types of research:

Exploratory research is undertaken when few or no previous studies exist The

aim is to look for patterns, hypotheses or ideas that can be tested and will form the basic for further research Typical research techniques would include case studies, observation and reviews of previous related studies and data

Descriptive research can be used to identify and classify the elements or

characteristics of the subject Quantitative techniques are most often used to collect, analyze and summarize data

Descriptive studies are conducted to answer who, what, when, where, and how

questions Implicit in descriptive research is the fact that management already knows or understands the underlying relationships among the variables in the

problem A variable is simply a symbol or concept that can assume any one of a set

of values

A descriptive study used in thesis might include demographic and lifestyle characteristics of customers, their habit and satisfaction Other questions might determine how frequency, or to whom they go with when using fast food It is used

to explore competitor field and factors concerned to fast food

Analytical research often extends the Descriptive research to suggest or explain

why or how something is happening An important feature of this type of research is

in locating and identifying the different factors

Predictive research: The aim of this research type is to speculate intelligently on

future possibilities, based on close analysis of available evidence of cause and effect

It is quite blur of edge within these above types of research, but as described, the Descriptive method is almost used in this research

1.2.2.2 Research approaches

This research uses both data and information that gathered by previous authors and

by the author To understand about fast food market, the author may synthesize information from secondary sources or/and from primary data; to those data and information, the author used both qualitative and quantitative approach method To understand about customer needs, habit, satisfaction… the author may conduct a

survey by questionnaire; to measure the information, the author should apply the quantitative approach

Quantitative approach is on collecting and analyzing numerical data, it

concentrates on measuring the scale, range, frequency etc of phenomena

Quantitative approach is one in which the researcher uses positivistic methodology

to develop knowledge (e.g cause and effect, test a hypothesis or a theory) Quantitative research involves analysis of numerical data For this research, a quantitative survey will be conducted Followings are some features of a quantitative research:

- The aim is to classify features, count them, and construct statistical models in

an attempt to explain what is observed

- Researcher knows clearly in advance what he/she is looking for

- Recommended during latter phases of research projects

- All aspects of the study are carefully designed before data is collected

- Researcher uses tools, such as questionnaires or equipment to collect numerical data

- Data is in the form of numbers and statistics

- Objective seeks precise measurement & analysis of target concepts, e.g., uses surveys, questionnaires etc

- Quantitative data is more efficient, able to test hypotheses, but may miss contextual detail

- Researcher tends to remain objectively separated from the subject matter

Qualitative approach is more subjective in nature than quantitative approach and

involves examining and reflecting on the less tangible aspect of a research subject,

e.g values, attitudes, perceptions Qualitative research involves analysis of data such as words (e.g., from interviews), pictures (e.g., video), or objects (e.g., an artifact) Followings are some features of a quantitative research:

- The aim is a complete, detailed description

- Researcher may only know roughly in advance what he/she is looking for

- Recommended during earlier phases of research projects

- The design emerges as the study unfolds

- Researcher is the data gathering instrument

- Data is in the form of words, pictures or objects

- Subjective - individuals interpretation of events is important ,e.g., uses participant observation, in-depth interviews etc

- Qualitative data is more 'rich', time consuming, and less able to be generalized

- Researcher tends to become subjectively immersed in the subject matter

1.2.2.3 Choosing a basic method of research:

Again, the author must make a decision Figure 3 Follow chart of the research

process indicates that, there are four basic design techniques for descriptive and causal research: survey techniques, experiments, observation and secondary data study For the objectives of the study, the available data sources, the cost of obtaining, the limited of time, this research should use survey techniques and secondary data studies

Survey research involves an interviewer (except in mail and Internet surveys) who

interacts with respondents to obtain facts, opinions, and attitudes A questionnaire is used to ensure an orderly and structured approach to data gathering

Face-to-face interviews may take place in the respondent’s home, a shopping mall,

or a place of business

There are two main types of survey: a descriptive survey concerned with identifying and counting the frequency of a particular response among the survey group, and the other one, analytical survey, which analyze the relationship between different elements (variables) in a sample group In this research, the author is partial to apply descriptive survey

Secondary data studies As in exploratory research, descriptive and causal studies

also use previously collected data Although the terms secondary and historical are interchangeable, secondary data will be used here An example of a secondary data study is the use of a mathematical model to predict sales on the basis of past sales or

on the basis of a correlation with related variables To predict future market potential, data from the government or Research companies may be acquired concerning projections on personal income, population or urbanization etc

1.2.3 Sample selection

A sample is a subset from a larger population Although the basic nature of the sample is specified in the research design, selecting the sampling procedure is a separate step in the research process Several questions must be answered before a sampling procedure is selected First, the population or universe of interest must be defined This is the group from which the sample will be drawn It should include all the people whose opinions, behaviors, preferences, attitudes, and so on will yield information needed to answer the research problem - for example, all persons who working in Hanoi, ate fast food at least once in last three months Sample with size

of around 300 people is separated by gender, ages, career, marriage, location, income

After the population has been defined, the next question is whether to use a probability sample or a nonprobability sample

In this research, the author decided to choose non-probability sampling method According to the method of gathering responds (email, print and internet survey), people that use internet are required to fulfill the questionnaire Also, only people that ate Vietmac rice burger are asked for their satisfaction with Vietmac product

1.2.4 Data collection methods

Once the research design has been formalized, the process of gathering or collecting information from respondents may begin Obviously, because there are many

research techniques, there are many methods of data collection such as observation,

questionnaire, personal interview, focus group, secondary, case study… When the survey method is utilized, some form of direct participation by the respondent is necessary during the process The respondent may participate by filling out a questionnaire or by interacting with an interview

It is important to minimize errors in the process For example, it is important that the data gathering be consistent in all demographic

In this research the author used secondary method and questionnaire survey to gather data and information

1.2.5 Data processing analysis

Editing and coding: Once the field work has been completed, the data must be converted into a format that will answer the questions mentioned in Introduction section Data processing generally begins with the editing and coding of the data Editing involves checking the data collection form omission, legibility, and consistency in classification The editing process corrects problems like interviewer errors before the data are transferred to the computer

Before data can be tabulated, meaningful categories must be established for groups

of responses The rules for interpreting, categorizing, recording and transferring the data to the data storage media are called codes

Analysis is the application of logic to the understanding of data that have been gathered about the subject In its simple form, analysis may involve determining consistent patterns and summarizing the appropriate details revealed in the investigation Statistical analysis may range from portraying a simple frequency distribution to very complex multivariate analysis, such as multiple regressions

In this section, the author discusses about some field of marketing management theories such as marketing mix, segmentation, target market, positioning

The American Marketing Association defined: Marketing (management) is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals 6

1.3.1 Fast food marketing

We should take an overview of Vietnam fast food marketing application, how players employ their marketing activities?

Franchise business model: Almost fast food brand in Vietnam are doing business as franchising e.g KFC, Lotteria, Jollibee, Pho 24

To get more and more customer, one of the most popular marketing strategies of fast food brands is to fast expand its store chains KFC is an example, by the end of

2005, KFC Vietnam has all 17 stores, at the end of 2010, KFC Vietnam has raised its total stores to 90, at present, KFC has 100 stores and it plans at the end of 2011 reaching to 105 stores

Attractive decoration, cool atmosphere, and comfort are some criterion of fast food stores According to a recent survey by AC Nielsen about trends of fast food

6

Peter D Bennett, Dictionary of Marketing Terms, 2 nd ed (Chicago: American Marketing Association, 1995).

behaviour conducted in Vietnam, more than 70% of respondents said that they come

to the fast food stores because they like the atmosphere, the service here

Professionalize staffs Staffs working in fast food industry are almost good looking, trained by the company, so that, they are very professional and standardization Flexibility and localization the menu and tastes Mr Thanh Tam, Business director

of KFC Vietnam said in the past, no one sold rice in fast food stores, but now rice has become the highest, 90% sales volume for Vietnamese customers According to

Mr Dennis Flore, JFC (Jollibee) Vice chairman, affirmed that, the best seller in Jollibee menu is chicken rice In Vietnam, chicken rice is usually used with soup Thanks to using traditional formular of cooking, dishes become more suitable for Vietnamese customer, chicken rice takes a proportion of 60% in total sales volume

of Jollibee in Vietnam market

Some characteristics of marketing environment influence to Vietnam fast food

marketing application are generated as figure 4

Figure 4 Factors influence to Vietnam fast food marketing application

1.3.2 Market segmentation, target market and positioning

A marketer can rarely satisfy everyone in a market Not everyone likes the same taste of fast food, price of product, or the way of serving Therefore, marketers start

with market segmentation They identify and profile distinct groups of buyers who

might prefer or require varying products and marketing mixes Market segments can

be identified by examining demographic, psychographic, and behavioral differences among buyers The firm then decides which segments present the greatest opportunity 7

A target market or target audience is a group of people that will basically need or

want your products and services Target market is defined in terms of age, sexual orientation, gender, economic class, religion, ethnicity, or location This socio- economic grouping process actually allows businesses to create profiles of the typical consumers who will likely buy the products of your company

Positioning For each chosen target market, the firm develops a market offering The offering is positioned in the minds of the target buyers as delivering some

central benefit(s)

1.3.3 Marketing mix

Marketing mix is the set of marketing tools that the firm uses to pursue its

marketing objectives in the target market As shown in Figure 5 The four Ps

components of marketing mix , McCarthy classified these tools into four broad groups that he called the four Ps of marketing: product, price, place, and promotion 8

Figure 5 The four Ps components of marketing mix 9

Marketing-mix decisions must be made to influence the trade channels as well as the final consumers Typically, the firm can change its price, sales-force size, and advertising expenditures in the short run However, it can develop new products and modify its distribution channels only in the long run Thus, the firm typically makes fewer period-to-period marketing-mix changes in the short run than the number of marketing- mix decision variables might suggest

9 Philip Kotler, Marketing Management, Millenium Edition, 2001, P.10

Robert Lauterborn suggested that the sellers’ four Ps correspond to the customers’ four Cs 10

The franchising model, which allows people with access to limited capital to enter

an established business, is well suited to a developing economy like Vietnam In recent years, the Vietnam franchising market has experienced a strong surge with average annual growth at 30 percent, with more than 600 new franchising shops being opened Although the market is still small and competition is limited, it is expected to grow quickly Several popular foreign franchisors have recently expanded their operations with some success and enterprising local businesses are now becoming more aware of the franchising model than ever before Many are looking for opportunities to work with well-known foreign brands to start a franchise business in Vietnam

Franchising was legally recognized in Vietnam with the passing of the Commercial Law, which took effect on January 1, 2006 and includes eight articles dealing with franchising activities

10 Robert Lauterborn, “New Marketing Litany: 4Ps Passe; C-Words Take Over,” Advertising

Franchising first took hold in Vietnam in the 1990’s with the appearance of famous foreign fast food and beverage chains like Kentucky Fried Chicken, Dilmah, Lotteria, and Jollibee Franchising activities have become more widespread in Vietnam in recent years, with a number of well-known products and services offered by local and foreign entities being franchised in the local market Prior to the adoption of the 2006 Commercial Law the Vietnamese Government viewed franchising with skepticism and did not recognize it as a legitimate vehicle for promoting commercial activity and investment This perspective has been changing

as Vietnam witnesses the development of strong franchise sectors among its neighbors and begins to recognize the role this sector can play in creating jobs, as well as attracting investment, improved management practices and new technology The issuance of the new Commercial Law, together with the Office of Government Decree No 35/2006/ND-CP, dated 31 March 2006 (Decree 35) specifically legitimized franchising services, and therefore marked an important change of the Government’s perspective towards the development of the franchise sector in Vietnam

Fast food franchises focus on high volume, low cost and fast expansion

CHAPTER 2: VIETNAM FAST FOOD MARKET AND

VIETMAC MARKETING REVIEW

By analyzing the market, the researcher understands how market is structured, market’s characteristics and its main competitors, how they change, what are the trends and prospect It is also to identify the relevant factors shaping the industry Fast food market analysis is a detail exploration to identify emerging trends and make projections about the future of this sector of the economy It usually covers fast food in a specific region or nation to provide detailed information about a particular market Analyst with experience in economics, politics, and the restaurant industry can be involved in the preparation of a fast food industry analysis Governments, investors, and members of the fast food industry may commission such an analysis for the purpose of making decisions, about business practices and policy moves

The fast food market that serves lunch time for officer is a niche market, though in the first phase of developing, Vietmac focus on this market, but in overall, the managers of Vietmac needs to know an overview of fast food market, not just this niche market

Firstly the author gives some terms of history of the fast food industry, taking note

of historic growth rates and key events; factors that affect the growth, government regulations, and some leading businesses in the industry It will include estimating size of the market, establishing trends in the sales over recent years, determining current operational/management trends within the industry Types of marketing strategies are prevalent within the industry…?

After that, industry developments, news, innovations should be discussed And, the author also generates information about consumer market data Then competitor information is analyzed also This is to answer who is the major business in the industry? What is their market share, target market?

Finally, SWOT and Porter Five Force are generated

Vietnam fast food market analysis is generated as figure 6

Figure 6 Market analysis steps

2.1.1 Overview

2.1.1.1 Market overview

Fast food (also known as Quick Service Restaurant or QSR within the industry

itself) is the term given to food that can be prepared and served very quickly 11 While any meals with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with preheated or precooked ingredients, and served to the customer in a packaged form for take- out/take-away The term "fast food" was recognized in a dictionary by Merriam– Webster in 1951

11 http://en.wikipedia.org/wiki/Fast_food

Outlets may be stands or kiosks, which may provide no shelter or seating 12 , or fast

food restaurants (also known as quick service restaurants) Franchise operations

which are part of restaurant chains have standardized foodstuffs shipped to each restaurant from central locations 13

According to most historians, the first fast food chain was White Castle, which was formed on the west coast of the United States in 1916 The industry didn’t really start to take off until McDonalds became popular in the late 1940s and early 1950s After that, many different people started imitating the business model of the more successful chains, and eventually some of these people became big enough to form major chains themselves

As above definition of fast food, in Vietnam, Pho 24, wrap&roll, Bánh xèo, Kdo’s are some chains of fast food But in Vietnam, almost people treat fast food as Western style fast food such as KFC, Lotteria, and Jollibee

Major factors that affect to the growth of fast food industry such as fast food product and service, time of consumption, income, life styles, healthy and safety, population, urbanization…

A March 2009, AC Nielsen survey of fast food market development in Vietnam shows that KFC is the market leader It has 20 shops opened in HCM City and nine

in Hanoi, among an all-Vietnam total of 68 shops Next is Lotteria (15 shops in HCM City and three in Hanoi, a total of 56 nationwide), and then Jollibee with eight shops so far

At the end of July, 2011, KFC has 100 stores, Lotteria has 87 stores

2.1.1.2 Some highlights in Vietnam fast food market:

12 John A Jakle, Keith A Sculle (2002) Fast Food: Roadside Restaurants in the Automobile Age

13 Talwar, Jennifer (2003) Fast Food, Fast Track: Immigrants, Big Business, and the American Dream

• Current value sales grow by 13% in 2009 to reach almost VND6.3 trillion Estimated to reach VND 9.2 trillion in 2014

• The number of fast food outlets reaches 7,000 in 2009, a 6% increase over

2008 Estimated to reach 8.3 outlets in 2014

• Through good business strategies, chained fast food’s popularity continues to increase despite the economic crisis

• Chained burger fast food records the fastest current value sales growth of 29% in 2009

• In 2009 KFC Vietnam Co Ltd leads a fragmented category with an 11% share of value sales At the end of 2011, KFC will reach 105 stores, and maintains the leader position of the market

• Over the forecast period, fast food sales are expected to grow by an 8% constant value CAGR

2.1.1.3 Vietnam Fast food market trends

• Recent years the fast food category witnessed a big change in the pricing strategies of most companies The adding of economy menu in most fast food outlets, together with massive promotion and discount campaigns, made fast food a more affordable meal choice for consumers Apart from adjusting prices to increase market penetration, fast food players paid more attention to local taste preferences and catered their menus accordingly Western-style fast food formats like burger or chicken either localized their food offer or added popular local dishes like Vietnamese stewed pork

• Most fast food companies are basing their operations on the chained business model which allows more effective resource allocation, standardized management and led to the development of good strategies Thus, despite the

economic crisis in 2008 and price storm of 2011, fast food has been less affected than other industries

• Chained burger fast food recorded the fastest current value sales growth of 29% in 2009, marginally ahead of chained chicken fast food In 2009, chained burger fast food brands in Vietnam such as Lotteria and Jollibee employed good strategies, such as introducing local dishes to their menus, which attracted consumers and boosted sales Chained chicken fast food is dominated by KFC This is the preferred fast food format among Vietnamese customers, largely because chicken is used in many popular dishes in the country

• In terms of the number of outlets, chained chicken fast food posted the fastest growth of 34% in 2009 Due to the higher popularity and greater acceptance of chicken fast food options among customers, it is easier for players in this category to expand their coverage quickly Outlet expansion has been proved to be an effective strategy Leading players, including KFC with 100 stores by July, 2011, spread out into newly developed cities and more remote areas, outside of the big cities where competition is already intense

• The value sales split between eat-in and take-away in fast food in Vietnam is quite unique due to the habits of local customers In most countries, fast food

is known for convenience and speed of service with the purpose to provide customers with a quick but nutritional meal Thus, take-away’s sales share is normally high However, Vietnamese consumers still consider any kind of foodservice outlet, including fast food, as a place to sit in, eat and enjoy This

is particularly the case for chained fast food players such as KFC or Lotteria which offer pleasant decor and a comfortable and friendly ambience Thus, customers choose to visit these outlets not only to eat but also to spend time