trung nguyên

Within 10 years, from a small coffee company located in the middle of the coffee capital Buon Me Thuot, Trung Nguyen has emerged into a powerful corporation with 6 member companies: Trun

THE MINISTRY OF FINANCE ACADEMY OF FINANCE

Hà Nội, ngày 22 tháng 11 năm 2020

popular coffee brand among consumers both at home and abroad Within

10 years, from a small coffee company located in the middle of the coffee capital Buon Me Thuot, Trung Nguyen has emerged into a powerful

corporation with 6 member companies: Trung Nguyen Joint Stock

Company, Trung Nguyen Instant Coffee Joint Stock Company, Trung Nguyen Coffee Company Limited, G7 Trading and Service Joint Stock Company and Vietnam Global Gateway Joint Venture Company (VGG) with main industries including: production, processing trading in tea and coffee; franchising and modern retail and distribution services In addition,Trung Nguyen has also built a system of more than 1000 convenience stores and G7Mart distribution centers nationwide

· CEO and General Director: Dang Le Nguyen Vu

· Head Office: 82-84 Bui Thi Xuan, Ben Thanh Ward, District 1, Ho Chi Minh City

· Established Day: 16/06/1996

2. History of formation and development

· 16/06/1996: Started his career in Buon Ma Thuot (Producing and trading tea and coffee)

· 1998: Trung Nguyen appeared in Ho Chi Minh City with the slogan

"Bring new creative inspiration" and the number 100 Trung Nguyen cafes

· 2000: Marked the development with a presence in Hanoi and

franchised to Japan for the first time

· 2001: Trung Nguyen is present nationwide and continues to franchise

in Singapore, followed by Cambodia and Thailand

· 2002: The product of Tra Tien was born

· 2003: Launched G7 instant coffee and exported G7 to developed countries

· 2004: Opening Trung Nguyen coffee shop in Japan, a network of 600 cafes in Vietnam, 121 distributors, 7,000 points of sale and 59,000 retail stores of products

· 2005: Inauguration of the roasting plant in Buon Ma Thuot and

Vietnam's largest instant coffee factory in Binh Duong Certified by

EUREPGAP (Good Agricultural Practice and Good Coffee Quality) of the world Officially opened Tra Tien Phong Quan cultural tourist site in Lam Dong Developing a coffee shop system up to 1,000 coffee shops and franchising presence by Trung Nguyen cafes in Japan, Singapore,

Thailand, Cambodia, China, Ucarine, USA , Poland

· 2006: Investing and building and developing the largest distribution system G7Mart in Vietnam and building and standardizing the domestic franchise system, promoting the development of franchising

internationally Launched Vietnam Global Gateway Joint Venture

Company (VGG) headquartered in Singapore

3. Rewards and recognitions.

· 2000-2007: Won the title of Vietnamese High Quality Goods

· 2000: General Director was awarded the Red Star Award

· 2003: Labor Medal Grade III Award

· 2003 & 2005: The Vietnam Gold Star Award

· 2004: ASEAN Best Young Entrepreneurs Award

· 2006: The Vietnam Famous Brand Award, The Vietnam Strong Brand Award

· 2007: Labor Medal Grade III Awarded, Certificate of Merit from the Prime Minister for the enterprise "For many consecutive years being votedfor the title of High Quality Vietnamese Goods, contributing to the cause

of building socialism and defending the country, Voted by consumers as the leading product in the non-alcoholic beverage industry in the

HVNCLC 2007 poll organized by Saigon Tiep Thi Newspaper

· 2012 : The National Brand Awards

· 2011: National Quality Gold Award

· 2014: Certificate of Excellence in Asia-Pacific

· Sweetened Sweetened Cream Brothers

B, Marketing management Orientation

1 Production concept

Consumers tend to prefer widely available and affordable products

Therefore, at the end of 2003, G7 was introduced Before G7 appeared, Vietnam's instant coffee market had only two main pillars, Vinacafe and Nescafe, in which Netscafe used position with more than 50% market share With reasonable prices about 40500 to 203100 VNĐ depend on size Almost people have normal income can buy it

- In addition, It is unique, rich and seductive taste, exactly style of

Vietnamese coffee, helping G7 instantly conquer 89% of consumers

- Right at first period,G7 is produced at two instant coffee factories in Buon

Ma Thuot, later expanded with an instant coffee factory in Binh Duong Processing capacity in this period is about 150-200 tons / month

2 The product concept

To match the change of trend over time, Trung Nguyen continuously

improves product quality, performance more and more with a total

investment of more than 40 million USD for coffee processing factory But Trung Nguyen always keep tranditional taste to make people have special impression

3 The selling concept

Each person has a preference,so in one product line, Trung Nguyen also produces different types to suit many users They can easy choose what they want to buy

4 The marketing concept

There are many marketing strategy of Trung Nguyen Specially to mention is

in 1998, Trung Nguyen appeared in Ho Chi Minh City with the slogan

"Bringing new creative inspiration" The coffee shop has Tay Nguyen style that has many delicious types of coffee By 2000, Trung Nguyen marked its development with a presence in Hanoi and gave Singapore its trademark for the first time Trung Nguyen Coffee is a Vietnamese company that applies thedomestic and international franchise business model for the first time And after 5 years, Trung Nguyen has built up a reputation and become a familiar coffee brand name for both domestic and foreign consumers In 2001, Trung Nguyen had a nationwide presence and a leading position with a network of coffee products In addition, Trung Nguyen also successfully established initial rights in Japan, Thailand, China and Cambodia

5 The societal marketing concept

Trung Nguyen is a corporate social responsibility They have many program investments and charity activities One of programs is “Every day a good book to change a person's life" is organized towards the book festival April

21 With the desire to continue to contribute to building a generation of

young warriors rich in fighting spirit, aspiration, Creativity, discipline and sustainable enrichment in the spirit of service

Viet Nam is high economic growth country

Vietnam's economy is gradually recovering and achieving impressive results In recent years (2016-2019) our country's growth rate has had positive changes, GDP growth is relatively stable, especially in 2019, the GDP index reached an impressive number of 7.02% and The national income per capita in 2019 is estimated at $ 32,000

This creates confidence for investors, can attract a lot of domesticand foreign capital

⮚ Social factors

- According to the latest statistics of the World Health

Organization (WHO), our country's population ranks 15th in the world with approximately 95.6 million people Vietnam is considered a densely populated country and its population continues to increase This is the golden population period of Vietnam, the number of people in the working age is high, which contributes to economic development Cheap labor cost

is also an important factor in attracting investment from

foreign enterprises

Vietnam's population structure by age

- The process of urbanization and immigration also affects the consumer market for goods and services Up to now, the

country has about 700 municipalities, including 5 run cities, 44 cities under the province and over 500 towns

centrally Since the renovation period, international cooperation has been promoted, Vietnam joined international organizations such as ASEAN, APEC, WTO, Currently, Vietnam has established through diplomatic relations with 171 countries ofall continents Vietnam is also a member of 63 international organizations and has relationships with more than 500 non-

governmental organizations At the same time, Vietnam has commercial relations with 165 countries and territories.

The government always creates favorable conditions for

enterprises to develop comprehensively and strengthens

cooperation with foreign enterprises to expand production scale

⮚ Political factors

The State promulgates enterprise support policies For domestic firms, the government often has its own preferential policies to support business development (eg simplifying loan procedures).Stable political security According to a global survey on the level

of peace (conducted by the Economist Intelligence Unit),

Vietnam ranks 39th out of 144 countries highly appreciated for itsforeign friendliness and low risk of terrorism

⮚ Technological factors

In recent decades, Vietnam has witnessed the rapid development

of science and technology, especially in the fields of information technology, biotechnology,… playing an important role in

improving labor productivity, increasing production efficiency However, technological change is not only researching, but also developing and being widely applied Since 2000, the rate of statebudget expenditure on science and technology has reached 2%, marking an important milestone in the process of implementing policies on investment and development of science and

technology of the Party and State In addition, there are

investment sources for science and technology from enterprises, foreign investment and science and technology funds

1.2 Threats

⮚ Economic factors

- Domestic enterprises are losing their competitive advantage:

When Vietnam joined WTO, challenges for businesses is the

issue of competition Market opening creates opportunities for

"giants" in the world to take over the Vietnamese market Their products will be sold in the Vietnamese market, making domestic business to face fierce competition

- High input costs reduce the competitiveness of businesses:

The interest rates of commercial bank loans increased sharplyfrom 17-19%, causing the profitability of businesses to

decrease significantly

The cost of raw materials, production machinery of the

business is very high, especially the cost of machinery and equipment because most of them are imported This has a direct impact on the product cost

Labor wages are always in the upward trend of adjustment, which also makes input costs higher

⮚ Social factors

- Despite the large population, there is a lack of highly qualifiedhuman resources: Vietnam’s graduation rate of students is not low, but the real human resources that businesses need does not meet the demand

⮚ Political factors

- The legal system has many limitations, making it difficult for businesses to make business decisions In addition,

Vietnamese businesses are not sure of the current law, which

is very dangerous in trade

- Corruption threatens social stability and economic

development

⮚ Technological factors

Although the government has always encouraged, invested in technology and achieved certain achievements, there are still many limitations In reality, the current contingent of high-qualityscientific and technological staff in Vietnam is lacking, facilities

of research institutes and universities are generally weak, lacking and inconsistent.

2.1 Strengths

“nationality” in each its products, G7 is no

exception, daring to face all challenges and demonstrating the bravery of the nation

National spirit and culture is a "power" in marketing Trung Nguyen has promoted that strength when it

gathered the support of Vietnamese consumers The use of the coffeebeans of the traditional Central Highlands to make instant coffee products with Vietnamese style has targeted customers’s

psychology: "Vietnamese use Vietnamese goods" Along with Trung Nguyen becoming a familiar brand of consumers, G7 quickly

established a foothold in the Vietnamese market

- Good quality product, distinct flavor: All coffee products from

Trung Nguyen are made from the best raw materials with modern technology and special extraction secrets G7 coffee has a

distinctive, concentrated and seductive flavor, exactly Vietnamese taste A flavor that no other coffee brand has been That has been proven by the trust of customers in G7, the sales of this product haveincreased rapidly since advertising Moreover, Trung Nguyen

exploits G7 coffee with many flavors to adapt to different customers,such as: G7 3in1 coffee, G7 2in1, G7 instant black, G7

cappuchino…

- Strong distribution from Trung Nguyen's existing distribution network and promotion, marketing:

Distribution network: Defining instant coffee as a highly convenient

commodity, Trung Nguyen has developed a distribution channel with 121 distributors, 7000 sales locations, 59000 retail stores and

1000 convenience stores Trung Nguyen is known as a pioneer

coffee company in asserting its brand, form of control and franchise

in Vietnam market With dynamism and creativity, Trung Nguyen has built a system of franchised stores nationwide and international markets such as Japan, Singapore, Thailand, China and Cambodia

Promotion and marketing:

Promotion and marketing played a decisive role,

helping Trung Nguyen brand to make the most impressive market penetration in the history of branding in Vietnam

In the program "Grand Festival G7" was held at Reunification

Palace More than 35,000 people participated in this festival Here, Trung Nguyen invites consumers to sample 2 instant cups of coffee, one from G7, one from Nescafe (consumers are not told the brand before drinking) and compare which product they prefer Before conducting this coffee trial, Trung Nguyen sent a letter to Nescafe and was ready for a lawsuit if any The results showed that 89% of consumers chose G7 and 11% chose Nescafe: Trung Nguyen won completely in this campaign.

2.2 Weaknesses

- Trung Nguyen's customers are quite plentiful (even heterogeneous) from young to elderly people, freelance, jobless to officer, high-income people, Customer heterogeneity is a long-term weakness in the business In modern marketing, the customer heterogeneity is due to the lack of identity of the marketing strategy, as a result, the

chain store has no identity, or the chain's identity fades after its initial success The style and habits of each person when drinking coffee are not the same Some people drink coffee simply they have

a habit of drinking coffee to stay

awake at work or study, they do not

care much about the brand or type of

coffee, as long as they have coffee to

drink However, some people drink

coffee for relaxation after hard work

or they like to enjoy the coffee flavor

of a certain brand Sometimes,

people drink coffee because of the famous brand of the company, they will feel more stylish, have a more professional style through

drinking coffee of a famous brand Meanwhile, Trung Nguyen's strategy is aimed at the vast majority of

Vietnamese consumers It can

be easily seen that Trung Nguyen's mistake is not clearlyidentifying the target segmentation Trung Nguyen should find

market gaps, market segments, and target segmentation

- Trung Nguyen's franchise system is massive, inconsistent and being out of control; thus, it does not ensure uniformity and create its own style Many levels of coffee shops, many choices for customers havemade the image of Trung Nguyen without a specific portrait other than a signboard with Trung Nguyen logo in front of the gate We can see this through the price list, the quality of coffee and the way

of serving at Trung Nguyen shop The level of investment in

decoration also has a huge difference

- Trung Nguyen is using price differentiation strategy, the customer heterogeneity in Trung Nguyen's products corresponds to the

product cost The goal of this strategy is to maximize profits, but thisstrategy is not suitable for a wide franchise system and leads to not being able to control its own chain The dense distribution system leads to internal competition in its own market

- The constant change in the system of signs, colors, designs and packaging causes the situation that there are many different forms ofidentification on the market, making it impossible for customers to know what is real and what is fake?

2.3 Opportunities

- Coffee is protected by government in terms of interests and

trademark, supports product prices, facilitates export to foreign countries Coffee associations were established to support each other

in the development of the coffee industry, to avoid monopolistic behavior, and market disputes that leads to infringement of business interest of enterprises, and to

protect the interest of

Vietnamese coffee on the

world market

In recent years, the

government has implemented

many policies that have a

positive impact on the

Vietnamese coffee industry: removing barriers to trade and

investment, allowing the private sector to participate more fully in the market, Credit policies are more open, fertilizer import tax is reduced to below 5%.

- Vietnam joined the WTO, creating a new opportunity for the coffee industry in general and Trung nguyen in particular Trung Nguyen coffee has been known not only in domestical market but also in foreign markets

- In the coming years, Trung Nguyen will remain a major player in the

Vietnamese coffee market This helps businesses have many

opportunities and benefits to attract capital and cooperate with

foreign countries

2.4 Threats

- The competition for raw materials is increasing:

In the period 2011-2012, Vietnamese businesses are facing fierce

competition in the purchase of coffee in the coffee capital Dak Lak withforeign competitors Currently,

there are about 10 large-scale

foreign enterprises that have

directly come to buy coffee in the

largest raw material area in

Vietnam If Vietnamese businesses

are facing capital difficulties with

high borrowing costs, this is an

advantage for foreign businesses

With abundant financial potential,

foreign buyers can buy in bulk with high quality goods

- Vietnam's economy has had a great growth rate, but accompanied

by inflation, currency devaluation, difficulty in attracting and turning over capital.