Trung Nguyên Coffe Strategies for Young Consumers

Research Topic: Strategies to encourage young consumers in Hanoi to take an interest in Trung Nguyen Coffee 2015-2020 2.. This study demonstrates strategies to encourage young consumers

Chapter I: INTRODUCTION

1 Research Topic:

Strategies to encourage young consumers in Hanoi to take an interest in Trung Nguyen Coffee (2015-2020)

2 Background:

In recent years, Hanoinians’ demand on leisure activities has increased in terms of quality and diversity The types of coffee that are on trend include: instant coffee (comes in packs), phin coffee (grinded coffee beans brewed through phin filter), mixed coffee (multi-flavored) However, each type of coffee attracts a different range of customers For example: the middle-age takes an interest in phin coffee or instant coffee and have the habit

of shipping a cup of coffee before going to work, whereas young customers prefer going to trendy cafés that offer a wide variety of beverages in the late afternoon or evening

Specifically, young consumers in Hanoi tend to like foreign coffee brands such as Starbucks (American), the Coffee Bean & Tea Leaf® (American), Gloria Jean’s Coffee (Australia), Angel in Us (Korea) and so on It is an undeniable fact that those brands are dominating Vietnam as well as Hanoi coffee market

Vietnamese coffee brands, unfortunately are at a slight disadvantage Trung Nguyen coffee is a rather strong and stable native brand, whose target customers are the middle-age who can afford a rather pricy cup of Trung Nguyen coffee Hanoi capital is a populated area with young population If Trung Nguyen manages to attract younger customers, its customer range and profit will boost considerably

This study demonstrates strategies to encourage young consumers in Hanoi to take an interest in Trung Nguyen Coffee within the period from 2015 to 2020

3 Purposes:

- The study is aimed to find the solution for promoting the drinking habit of Trung Nguyen coffee among Hanoi youngsters

- The paper is hoped to broaden teenagers’ knowledge of the benefit of consuming

a Vietnamese coffee brand

- The research is expected to help Trung Nguyen coffee gain more popularity and interest among domestic consumers in general and Hanoi young consumers in particular

8 Outline:

Chapter I: Introduction

Chapter II: Major findings

1 The real situation of Trung Nguyen Coffee

2 Reasons why Trung Nguyen Coffee should target young consumers in Hanoi

3 Improvements within the brand

4 Raising popularity

Chapter III: Conclusion

Chapter II: DATA ANALYSIS

From 14/10/2015 to 28/10/2015, a survey was conducted in order to understand Hanoi young consumers’ opinions on Trung Nguyen Coffee

1 The real situation of drinking Trung Nguyen Coffee from Hanoi consumers’

perspectives:

Never Once 3-4 times Everyday 0

5 10 15 20 25 30 35 40

How often do you drink coffee every week?

Times per Week

Graph 1.1 – Coffee drinking frequency

Graph 1.1 describes coffee drinking frequency of the participants There are five participants who “never” drink coffee; however, please note that this frequency is measured per week, so “never” implies that they rarely drink coffee Eleven participants drink coffee every day and one fourth of the participants drink coffee 3-4 times per week It can be understood that only some people drink coffee with high frequency Meanwhile, almost half

of the participants enjoy a cup of coffee once per week From these figures, we understand that Trung Nguyen may serve customers who only experience drinking coffee several times per month; but Trung Nguyen will also have a small number of potential loyal customers who will come to the shop quite a few times every week

2 Purposes for targeting young consumers:

Home0 Workplace Branded Stores Unbranded Stores 5

10 15 20 25 30

Places where people drink coffee in accordance to their ages

Above 35 26-35 18-25

Graph 2.1 – Places of preference and Age range

The graph above shows the participants’ age ranges and places where they often have coffee There are only 3 participants above 35 years old would like to drink coffee in branded stores A small number of participants whose ages are 26 – 35 likes drinking coffee

in workplace and unbranded stores The majority of the participants are from the age of 18 – 25 and they prefer drinking coffee either at home or in branded stores It can be inferred from the age range 18 – 25 that most participants are university students; and their habit of drinking coffee at home still takes up a majority That almost half of participants would rather drink in branded stores is a promising piece of information for Trung Nguyen Coffee

3 Improvements to be made:

3.1 Improvements from within the products:

The fact that Trung Nguyen Coffee is more popular among the middle-aged leads to another fact that the coffee and its ingredients are especially combined for the age group’s likes Young consumers, similarly, have their likes and dislikes distinctive from those of the middle-age These differences are reflected in the results of our survey

3.1.a Distaste flavors:

ss Sw

eete

ner

After ste

Too

rong -flav

ored

Too Light

avor ed 0

5 10 15 20 25

Flavors that brings discomfort

People

Graph 3.1.a – Distaste flavors

The chart above releases the dissatisfactions of the customers with Trung Nguyen Coffee’s tastes basing on four main aspects: too strong flavor, too light flavor, bad aftertastes and excess sweeteners A great number of people (about 25%) complain about such strong flavor due to high caffeine content in ingredients However, 8% of customers think that the flavor is not strong enough for them to stay concentrating People who think Trung Nguyen products contain excess sweeteners account for 23% Others have bad impression on aftertaste and don not want to try them again All in all, Trung Nguyen brand should develop more various tastes, lessen caffeine content and sweeteners to fulfill the customer’s requirements

3.1.b Customers’ satisfaction:

Graph 3.1.b – Customers’ satisfaction

In this case, there are four aspects that are rated by visitors Firstly, the factor which makes most customers feel pleased to enjoy is undoubtedly the drink, with nearly half of all the people who have done the survey claim that they find the taste of Trung Nguyen's

coffee bold dandy in a positive way Secondly, the service provided by Trung Nguyen staff

is also highly appreciated: 28% of the people asked ranked the attitude of the employees as very satisfied However, 18% and 10% of the customers feel unpleased to very discomfort when served by Trung Nguyen coffee's staff; which means the brand still has to focus more

on training the manners of their personnel On the other hand, the price of the goods and services in Trung Nguyen stores receives many complaints from the visitors In total, 59%

of them give negative feedback about the expensive cost (from 60,000 to 100,000 VNĐ) for

a cup of drip Vietnamese coffee which prevents some customers, especially youngsters, from trying the traditional coffee of Vietnam Last but not least, the interior design of the stores seems not so impressive to customers in either positive or negative way, but the 30%

of dissatisfaction should still be taking care of more seriously

3.1.c Price range preference

25 - 45

50 - 75

80 and above

0 10 20 30 40 50 60

Expected prices from consumers

People

Graph 3.1.c – Price range preference

As it can be seen, the chart indicates the price references of most customers at the age from 18 to 25 years old in Hanoi We give three main price levels for the customers to choose Firstly, it can be seen obviously that a great number of customers (about 78%) prefer to use Trung Nguyen product at the price from 25,000VND to 45,000VND due to their medium wages Only 22% of consumers say that they can afford at the price from 50,000VND to 75,000VND as long as the standard of the product is worth it However, no customer accepts the price level of over 80,000 VND In conclusion, Trung Nguyen brand should adjust price to satisfy its customers

3.1.d Additional promotion:

Graph 3.1.d – Additional promotion

When asked about the kind of promotion they are fond of, 67% of the customers choose the traditional one - membership card This will provide the customers a chance to have discount or gift in special occasions and other interesting deals for the loyal members only Secondly, free vouchers are selected by a quarter of the people who did the survey Vietnamese are also keen on enjoying this kind of promotion as vouchers can offer them more than what they pay (buy one get one for example) Lastly, check-in discount has the least percentage This may due to the need for using the Internet to get online right at the stores, which is quite hard for some elders but very familiar with teenagers

3.1.e Additional features:

Graph 3.1.e – Additional Features

In another case, people are asked to give advice about the feature they would like to add to Trung Nguyen Bakery seems to be the most popular since it accounts for 60% of the answers As expected, youngsters always love something sugary to go along with the bold taste of the coffee Sharing the same proportion, fast food and meal sets both chosen by 20% of the customers

3.2 Raising brand popularity:

In order to make young consumers buy Trung Nguyen Coffee, it is advisable to understand what attracts consumers’ attention and what drives they to buy a product

3.2.a Public awareness:

43.48%

4.35%

8.70%

8.70%

21.74%

13.04%

Through which means of media people know of Trung Nguyen Coffee & their willingness to recommend the brand to others

It can be seen from the pie chart through which means of communication participants know about Trung Nguyen Coffee Broadcast media and acquaintances take up

to totally 87% of the pie, inferring Trung Nguyen has been doing a great job of advertising its name through broadcast media Moreover, the fact that 44% of participants know about the brand through friends and relatives means that young consumers value their acquaintances’ feedbacks and reviews highly Printed media and the internet take up a small percentage of the pie chart Indeed, Trung Nguyen Coffee has been neglecting its advertisement through printed media and its appearance in the virtual world is yet to project strong positive impressions towards internet users Additionally, we would like to take a closer look at the willingness to introduce Trung Nguyen coffee to other individuals of one group of participants and the results turns out quite positive Among 30 participants who know about Trung Nguyen coffee through acquaintances, 80% are likely or very likely to recommend Trung Nguyen Coffee to others, and only 20% do not want to introduce the brand to anyone From these numbers, we can see the strong and weak points of Trung Nguyen Coffee in making its name known among young consumers, as well as the positive turnout of raising its popularity through means of communication

3.2.b Visit purpose and Location preference:

Graph 3.2.a - Trung Nguyen Coffee’s popularity

21.70%

26.00%

30.50%

4.40%

Reasons why visiting Trung Nguyen Coffee

& Ideas on new locations

Study Business University campus Multi-function building Sight-seeing spots

The graph above clearly show the customers’ purpose when visiting Trung Nguyen Coffee and places where a part of customer would like the coffee shop located It can be seen from the bigger pie chart, 17% of the customers come to Trung Nguyen Coffee to study, 22% for business purposes, whereas over 60% of the participants choose Trung Nguyen when hanging-out As a result, we would like to take a closer look at the customers with hanging-out purpose The smaller chart illustrates the options of these 60.9% people A great number of people would like to have Trung Nguyen coffee in multi-function buildings such as Vincom mall chain, Lotte departments, AEON Mall, etc Meanwhile, 26% of customers prefer to visit Trung Nguyen at university campus However, only 4% think that the coffee shop should be located in sight-seeing spots From these numbers, we can see the places that Trung Nguyen should start the business and find the solution to help Trung Nguyen serve customers with the best service

Graph 3.2.b – Visiting purposes & Locations

preference

Chapter III: CONCLUSION

1 Summary:

- Survey among 18 to 25 years old – young customers

- Half of the survey participants have the habit of drinking coffee at home; some

do go to branded stores to drink coffee, but only once a week

- They dislike too strong-flavored and light-flavored coffee

- Participants show positive response to the beverages but negative feedbacks towards the interior design, staff services and prices

- They are only willing to pay a rather low price range for a cup of coffee (25,000 – 45,000 VND)

- Participants also wish to have membership privileges as well as free vouchers given by Trung Nguyen Coffee

- They want bakery to be added as an additional feature to every store

- In terms of popularity, Trung Nguyen Coffee has been known through the positive recommendations of participants’ acquaintances

- Participants would like to see more Trung Nguyen coffee stores in multi-function buildings and school campuses – those are places they often visit

2 Conclusion:

The survey studies about Hanoi young consumers’ opinions on Trung Nguyen Coffee Based on the results, strategies to attract young consumers in Hanoi will be planned and put into action Through the survey, we concluded that:

- Young Hanoinians either drink coffee at home or at branded stores

- They dislike overly extreme flavors in coffee

- Trung Nguyen Coffee needs to improve its interior design, staff services and product prices

- The young want Trung Nguyen Coffee to add bakery, membership cards and free vouchers to the store chains

- Those have been to Trung Nguyen Coffee are likely to recommend the brand to others

3 Suggestions:

Several suggestions can be drawn from the results of this survey:

3.2 Trung Nguyen staff should be better-trained.

3.3 It is advisable that Trung Nguyen extend its coffee menu Perhaps adding a new

menu section for students with softer prices will attract younger customers

3.4 Opening chain stores in multi-function buildings has been a trend in recent years

It catches lots of attention from building visitors but also faces fierce competition from other brands Meanwhile, opening Trung Nguyen Coffee stores in university campuses is a creative idea; of course, prices should be adjusted along with additional promotional features

Survey questionnaires

Young consumers' opinions on Trung Nguyen coffee | Khảo sát ý kiến người tiêu dùng trẻ

về cà phê Trung Nguyên

We are a group of students from AEP (Advanced Educational Programs) of National

Economic University and we are carrying out a research about Trung Nguyen coffee Here

is the study about how consumers assess the products and services provided by Trung Nguyen coffee We hope that you can spend some time to complete the survey in order to support our project Your responses to these following questions will be used in our research

To complete the survey, please choose the answer that you find appropriated by ticking the answer of each question and the chart

* Required

Which age range do you belong to? *

Bạn thuộc nhóm tuổi nào dưới đây?

How often do you drink coffee every week ? *

Bạn uống cà phê bao nhiêu lần mỗi tuần?

Where do you often drink coffee ? *

Bạn thường uống cà phê ở đâu?