REPORT MARKETING SERVICES TOPIC ANALYSE MARKETING MIX 7p’s STRATEGY OF AN EXISTING SERVICE IN VIETNAM MARKET

Starbucks is the world's leading coffee brand, owning more than 21,000 stores around 65 countries, of course, including Starbucks Vietnam..  According to Euromonitor's report, the 5 lar

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Han, Thach Thi Ngoc Han.

HO CHI MINH CITY – 2021

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Coffee is a beverage that is loved by many Vietnamese people This is the basis for the birth and development of Vietnamese coffee brands Among a series of successful domestic names in this field, there is a "foreign giant" who has

"risked his life" as Starbucks.

Starbucks is the world's leading coffee brand, owning more than 21,000 stores around 65 countries, of course, including Starbucks Vietnam With the mission

of being one of the fastest growing companies and building brands in the US, Starbucks has contributed significantly to the economic development of the region each year.

With the expansion of the market in Asia, Vietnam is the 12th location that Starbucks targets In early February 2013, Starbucks officially opened its first store in Vietnam, with a 2-storey store in Ho Chi Minh City Starbucks has partnered with Coffee Concepts Vietnam (belonging to Hong Kong Maxim Group) to build a business model that combines globalism and local culture in Vietnam.

In this essay, we will learn and report information from Starbucks, market analysis, their competitors, target customers, STP strategy and Marketing Mix strategies (7Ps) From there, we will have a basis to make general assessments, conclusions and offer solutions for Starbucks.

Section 2: Market and competitor analysis (HÂN)

2.1 Market analysis

2.1.1 Market share

 The coffee market in Vietnam is fragmented with small shops accounting for the majority of coffee sales According to data from the United States Department of Agriculture, there are more than 540,000 restaurants in Vietnam and more than 436,000 of them are street stalls.

 According to Euromonitor's report, the 5 largest coffee chains in Vietnam accounted for 15.3% of the market share, led by the Highlands chain Although Starbucks holds the No 2 position, accounting for nearly 3% of the entire coffee market in Vietnam Starbucks is a global coffee brand Vietnamese coffee with 77 stores across the country and concentrated in

4 cities: Hanoi, Ho Chi Minh, Hai Phong and Da Nang , in Vietnam nearly 1.7 million Vietnamese will have a Starbucks store.

2.2 Operation status of coffee shop chains

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largest coffee chains in Vietnam witnessed a decline The period of rapid growth that had lasted for many years came to an abrupt end and revenue rapidly declined However, the delivery segment grew many times compared to before Covid-19 Takeaway, order-to-pick up, and delivery models are generally thriving F&B's main business, thanks to its delivery business, has survived the lockdown.

 Specifically, Starbucks closed 3 stores in 2021 but opened 9 new locations In December 2021 and January 2022, 6 more stores will be opened: 3 stores in Hanoi and 2 stores in Ho Chi Minh City and 1 store in Binh Duong.

 In 2019, Starbucks chain's revenue reached more than VND 780 billion,

up 32%, helping the world-famous coffee chain to be in the top with the highest revenue after Highlands and The Coffee House Besides, Starbucks' gross profit margin is just over 19% compared to 35% of Phuc Long, 60-70% of Highlands and The Coffee House.

 In 2020, Highlands Coffee will continue to hold its position as the largest coffee chain in Vietnam, with the distance from the other group not much changed Total revenue reached nearly 2,140 billion VND, only decreased slightly.

 The 2nd place changed, The Coffee House dropped to 3rd place Phuc Long grew slightly and rose to 2nd place These two coffee chains recorded revenue in the 700-800 range billions dong.

Overview of the coffee shop chain market in Vietnam 2020

(Nguồồn: Brands Vi t Nam) ệ

PhucLong

Strength

 There is a great advantag

e in the

 The market share ranks

 A polite and friendly brand

 Custom ers are diverse: working

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source of raw materials for coffee productio n.

 standing famous coffee brand with the taste of Vietnam.

Long-first in the Vietnam ese coffee industry and is a famous long- standing coffee chain founded by someone with Vietnam ese blood and has the largest scale.

 Large store system and beautiful location with strong financial resource s.

 Actively introduc

image with a custom er- centric policy.

 The location

of the store system is located

in the comme rcial center and in a prime location

people, tourists, students and students

 The price is affordab le

thanks

to the self- sufficien

t source

of raw material s.

 Coopera tion betwee

n Phuc Long and Massan with the

"Kiosk"

model through a

nationwi de network

of 2,200 VinMart + stores

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e new products with diverse series of continuo us

activities and organize Minigam

es with many attractiv

e gifts with content that attracts the most customer

fanpage.

to easily reach custome

rs across the country.

Weakne ss

 No experienc

cooperati

on with foreign partners.

 Poor distributi on channel managem

 Still using plastic to serve customer

s to take away and on site, this increases the amount

 The store system is present

in the city center and has not yet reached custom

 Limit incentiv

es and promoti ons on all sales platform s.

 Staff is not enthusia stic and

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ent of waste

in the environ ment.

 The price

is quite high compare

many classes of customer s.

 The store system is mainly concentr ated in big cities.

ers in the vicinity.

 Difficult to manage and control each store through franchis ing.



service attitude

is not good.

2.2.2 Indirect competitors

 In addition to the three big names in the Vietnamese market, Starbucks faces a number of other formidable coffee chains that are emerging today:

 Cong Coffee: This is a cafe built in pure Vietnamese style but attracts domestic and foreign customers The space is classic and evokes a feeling of nostalgia and excitement, with its continuous rise Cong Ca has begun its journey to foreign markets.

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Chain Logo Plus Coffee

 Gemini Coffee: a famous brand with clean and green coffee, it quickly becomes a unique destination that attracts young people and has affordable prices for customers with average incomes in society.

Gemini Coffee chain logo

 Ong Bau: is a popular franchise coffee chain in Ho Chi Minh City with a mobile bar model that is easy to reach consumers and the main coffee with ingredients from CADA farms with the quality of Vietnam Nutifood Company is in charge and the menu is diverse

to suit many customers.

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Logo Ong Bau Cafe

2 Geographic segmentation Starbucks is present in five continents and owns a chain of stores worldwide These include the most popular places such as the Americas, Asia Pacific, the Middle East, Africa,

Currently, Starbucks is very focused on the Chinese market, when it has more than 1500 stores Not stopping, the company continues to push further on the mobile ecosystem as well as loyal customers in China In Japan, Starbucks also has about 1000 stores, and promotes the development of digital systems in this market Countries like China, Japan, Korea, and Canada are Starbucks countries that operate strongly outside of the main US market.

3 Demographic Segmentation Starbucks targets people of Generation Y, the year of birth is between 1977 and

2000 There are two target groups as follows:

Group 1: Customers from 25-40 years old People with good income, education level from university or higher Having a position in society and a habit of using high-quality, health-focused products This group accounts for 49% of the company's total revenue.

Group 2: Customers from 18-24 years old Although they have not been able to control their finances, they are from well-to-do families, studying at university

or starting to work in society Having a habit of consuming coffee at the same time has a trendy and trendy taste.

4 Psychological segmentation Starbucks targets customers with high consumption power, willing to spend a certain amount of money to use a good, beautiful product, pursuing trendy coffee Capturing the mentality that they are people who are sensitive to trends and follow a middle-class, luxury style.

Targeting

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The target market can be a certain market segment, but it can also be many different market segments, as long as that segment has competition and opportunity to achieve the business goals.

- At first, Starbucks selected the target market as coffee connoisseurs Building

an open space, personal service is as good as creating the best place to work outside the home and office Therefore, customers from the beginning were well-off, professional, highly educated people in society.

- Currently, in the US, Starbucks sells almost all types of coffee like a store The majority of customers are in cities or upscale suburbs.

Starbuck's adults are between the ages of 25-40 and account for about 49% of the business's revenue.

+ Young people aged 18-24 account for about 40% of revenue.

+ Children and adolescents are mainly bought by their parents and about 2% of the age group 13-17.

Section 4: Marketing Mix (7Ps) Service

Starbucks planned to launch a wide range of products that were not limited to coffee and coffee-related products Specifically, the company has launched many different coffee product lines, suitable for each specific customer group.

At the same time, the company also expanded its product portfolio such as adding wine, cake… and providing music in stores.

1 Accumulate card points for customers

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Each customer's spending is earned as a star, 1$ (~23,000 VND) corresponding

to 2 bonus points Customers are entitled to redeem these stars to receive free drinks and food When the members accumulate enough bonus points, the system will automatically upgrade the card and along with the member's priority policies.

1 Fast and easy payment supporting

They offer their customers the most suitable payment methods This company offers the following forms of payment: cash payment, Starbucks membership card, payment by scanning code and also payment via electronic wallets, debit cards (MasterCard, Paypal, etc.) Apple Pay),

1 Order directly on the phone interface

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In addition to the reward points policy and support for many forms of payment, this company also integrates the feature of ordering food directly on the phone application Customers order, pay and choose the method of receiving the food (pick up at the counter or take away).

This helps to reduce the wait time of customers when placing an order The essence makes it possible for customers to shorten the time period and enjoy better service quality Especially in peak hours, customers do not have time to queue and wait long as well as to avoid the service staff being overloaded.

1 Personalize User Experience

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If the customer's name on the cup becomes a typical Starbucks culture, with their application they have gone much further than that in their customer management process They understand the details of the user's transaction history to take care of them specifically, personalized for each user.

Thanks to this application, the company itself also seeks and understands its customer insights more clearly This is completely beneficial for all their promotional activities and is a prime example of "right person, right time", stimulating customers to make quick decisions, and speeding up their shopping process becomes easier.

1 Manage customer behavior

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To be able to understand and replicate the current model, if you want to take care of customers, you must first understand customers, Trade-off with research efforts, customer surveys, with each object, each interest , taste needs a special care route.

Product

Starbucks Corporation has always focused on innovating its product mix to dominate the food and beverage market The company adds as well as modifies product lines with the aim of expanding market reach and increasing market share.

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List of Starbucks products/drinks

Price

Starbucks uses a premium pricing strategy In the marketing mix, this pricing strategy takes advantage of the behavioral trends of customers, who will buy more expensive products on the basis of perceived correlation between high

"price" and high "value", focus on exploiting mid-range and above customer files At the same time, hitting the customer psychology expensive products will come with high value.

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Through this pricing strategy, Starbucks maintains its premium specialty image However, the company still strives to grow and really deliver high-quality products and improve the customer experience at its cafes This pricing strategy

is directly related to Starbucks' overall competitive strategy in helping the business maintain its premium brand image.

1 Espresso & Coffee drinks at Starbucks Coffee

Selling price: 40,000 - 85,000 VND

1 Green Tea Cream Frappuccino

Selling price: 95,000 - 115,000 VND.

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1 Green Tea Latte

Selling price: 80.000vnđ

1 Caramel Frappuccino at Starbucks Coffee

Selling price: 90.000 - 110.000vnđ.

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Tiêu đề	Analyse Marketing Mix 7P’s Strategy Of An Existing Service In Vietnam Market
Tác giả	Tran Trung Vinh, Hoang Le Bao Han, Thach Thi Ngoc Han
Người hướng dẫn	Dang Huynh Phuong
Trường học	University of Finance – Marketing
Chuyên ngành	Marketing
Thể loại	report
Năm xuất bản	2021
Thành phố	Ho Chi Minh City

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