Chiến lược Marketing của The Coffee House

Vietnam National UniversityInternational University Major: Business Administration Final Report Subject: Principle of Marketing Research Topic: Analyzing the appropriate marketing strat

Vietnam National University

International University

Major: Business Administration

Final Report Subject: Principle of Marketing

Research Topic: Analyzing the appropriate marketing strategies of

the chains of coffee stores- the Coffee House

Lecturer: Professor A.U.Zafar Teaching Assistance: Mr Do

Class: Principle of Marketing

Group member:

TABLE OF CONTENT

Chapter 1: The opening

1.1 The reasons of picking up this topic

1.2 The purpose of the thesis

1.3 The significant of particularly researching this topic

1.4 The scope of the thesis topic

1.4 The summary of strategic objectives in the chains of coffee stores- the Coffee House

II Current marketing situation of the chains of coffee stores - the Coffee House

2.1 Analyzing the variety of market and the market description of Coffee House

2.2 Analyzing the Coffee House's method of distributing products

2.3 Analyzing the facing competitive environment in coffee industry in term of the Coffee House

2.4 Reviewing the selling products compared to the demand of customer

III Scrutinizing the SWOT component of the chains Of coffee stores- the

Coffee House

3.1 Reviewing the background of SWOT analysis

3.2 The importance of SWOT analysis in conducting the marketing strategies

3.3 The strength of the chains of coffee stores- the Coffee House

3.4 The weaknesses of the chains of coffee stores- the Coffee House

3.5 The opportunities of the chains of coffee stores- the Coffee House

3.6 The threats of the chains of coffee stores- the Coffee House

IV Analyzing the marketing methods appearing in the marketing

strategies of the Coffee House by examining the current strategies

4.1 The traditional marketing

4.2 The technological marketing

4.2.1 SEO (Search Engine Optimization)

4.2.2 Advertisement on social media

4.2.3 The Coffee House’s application

V Scrutinizing the marketing strategies of the chains of coffee stores- the Coffee House

5.1 Analyzing the positioning of the Coffee House

5.2 Analyzing the production strategies of the Coffee House

5.3 Analyzing the pricing strategies of the Coffee House

5.4 Analyzing the distribution strategies of the Coffee House

5.5 Analyzing the market research of the Coffee House

VI Exploring the details of the Coffee House marketing action programs VII Budget for operating the marketing strategies of the Coffee House VIII The controlling of marketing strategies in the Coffee House

Chap 3: The summary and recommendation

Throughout the process of learning, exploring and researching in the principle of marketingclass, our team has already completed the topic “Analyzing the appropriate marketing

strategies of the chains of coffee stores- the Coffee House.”

On behalf of all members in the group, I would like to express the honors and gratefulness tothose whose joined-hand to accomplish our thesis Especially, mr Zafar the professor and mr

Do assistant lecturer who taught us at the basic knowledge and brought us a huge

understanding about the general of principle marketing

Our team is also thankful for the supports of the older students of K17, K16 and our friends

in the International University

Ho Chi Minh city, 22/05/2019

Group

Chap 1: The opening

1.1 Reasons of picking up this topic

Nowadays, coffee is one of the most essential and famous beverages which serves a mass demand for all social classes From wealthy households to mediocre ones, the daily

consumption of coffee has become familiar and universal According to the Viet Nam CentralHighlands forestry science and technology institute, the amount of coffee consumed annually

is about 4 kilogram for each American and 3 kilograms for each at England Especially in Asia, the habit of drinking coffee as a morning tea has raised to a new level, becoming one ofthe unique cultural features in the attentions of international friends

Besides, the effects of coffee on human health studied since 1897 Furthermore, in recent, many scientific shreds of evidence about the benefits of coffee have been precisely and accurately studied for public-showing, including Battig's research in 1987 and Macrae's research in 1989 Most recently, research results in 2017 of Grosso showed that drinking coffee has benefits in reducing the risk of chronic diseases such as cancer and cardiovascular disease However, according to studies by Messina in 2015 which said that the caffeine in coffee could cause some value effects like central nervous system stimulation leading to an increase in focusing ability and reducing the drowsy and tired feeling

In Vietnam, according to international experts, the sense of protection of people's health has increased markedly because of the habits of drinking coffee of people cautiously increasing quickly It contributes significantly to promoting the importance of the coffee industry to daily life From 2018 until now, the coffee market has been evaluated as one of the five industries in very high growth potential and makes the enormous attractive profits, while the cost to face risks is meager According to the survey of university of Economics and Finance

Ho Chi Minh City, Vietnam in 2003, the average growth rate of coffee is about over 6% per million units purchased a year, domestic and foreign businesses must enhance the level of competition based on the terms of the quality and the designs of both on the products and alsoservices For those purposes, the marketing strategies of businesses must be applied

effectively, whether it is a big or small model

Because of those positive purposes of increasing the level of personal satisfaction and makinggood profits for business, many business models of coffee chain stores established However, the coffee business model is not always going to succeed Especially in Vietnam, even most

of the major coffee chains operating in Vietnam experienced an increase in sales scale last year 2018, for example, the Highlands Coffee with 240 stores over the country, but still manydid not achieve good profits, for example, the Trung Nguyen coffee reduced in 50 selling percentage over last 5 year According to news, almost all causes of losses in Coffee stores blamed on the shortage of operating capital However, with the excitement of the current coffee market, the competitive component is the potential cause of bankruptcy, which

explains that the contributions of applying the suitable marketing strategies are the core factorleading to the selling successiveness

Turn back to one of the giants in Vietnam's coffee industry Coffee House has been at the forefront of the best seller for many years to now Thanks to the reasonable and effective

marketing strategies which is applied not only for profit earning but also for ambition as serving customers, the Coffee House chains of coffee stores are possible in making Vietnam'scoffee industry become a famous brand that can compete with both local and foreign brands Because we are the students who are eager to learn about the success of others, our team decides to analyze the topic of the appropriate marketing strategies of the chains of coffee stores- the Coffee House.

1.2 The purpose of the thesis

The coffee industry in Viet Nam has been prosperous in recent years because most companiesare doing so well in integrating traditional and foreign coffee culture, and most customers are looking for a coffee shop that can combine these two factors However, some companies which misapply the marketing plans still face the money-losing Furthermore, The Coffee House is known to be one of the successful ones They have successfully applied “customer insight” to their business strategies They start with the customer and design their brand based

on the customer’s satisfaction and comments The Coffee House affirming and branding by generating the closed connection with customers and make their coffee shops become a

“House” where customers feel free to express and have a great time with a coffee in their hands This tactic has helped The Coffee House become a significant competitor in the F&B industry even though they were opened later than many famous and successful coffee brands

in Viet Nam In conclusion, the purpose of the thesis is to carefully analyze the rare and unique components in the marketing plan that only be applied in the Coffee House to

contribute as a premise to construct a measure of avoiding the money-losing when

establishing the same business model

1.3 The significant of particularly researching this topic

With this marketing plan, we will be able to answer how The Coffee House successfully achieve its strategic objectives and gain their profit while others cannot and what makes The Coffee House different The marketing plan will also inform the managers and employees about their company’s changes so that they can collaborate and put the marketing strategies into action This analysis will help our team learn more about creating an appropriate marketing plan and its role in the company’s success

1.4 The scope of the thesis topic

This report involves researching The Coffee House's marketing strategies for years back and the current year The key features provided in the paper are the strategic goals and objectives

of the studied enterprise, its current marketing situation, and other marketing-related details Furthermore, the research also answers for the reasons why the cafe chains can manage and maintain its brand values successfully as well as reducing the risks of challenges which it is facing Additionally, in those pages, the research on the same industry competitors is carried out, followed by showing the actionable marketing strategies to surpass its opponents The main discussion delivers a broad vision in the marketing aspects of the cafe chain to one's knowledge and expertness Even though the report is supposed to bring out as much

marketing information as available, some fields cannot be addressed due to the enterprise's internal particulars.

of Arabica coffee beans in 2019 After four years of operating in Viet Nam’s market, The Coffee House now has more than 100 shops from North to South.

1.2 The vision, mission and core values of the chains of coffee stores- the Coffee House

1.2.1 The vision of the coffee chains of stores- the Coffee House

Going to the coffee stores has been a typical daily activity in Vietnamese culture It is a communication form between people, which can be seen anywhere, from a sidewalk to an elegant coffee store There have been many successful brands in Viet Nam which the

customers prefer and trust rather than a new brand coming to the industry However, the Coffee House is known to be a late competitor compared to others, so what makes the

founder decided to create The Coffee House? Are there any differences between The Coffee House and a foreign brand like Starbucks or a local brand like Trung Nguyen Legend?

The answer is yes In the past few years, the strategic plans targeted as trying to establish shops at accessible locations to acquire an enormous consuming market The Coffee House believes Coffee House's business model will set ideal places for customers to enjoy their coffee every day, maybe multiple times a day With the vision of having 700 coffee shops in the next five years, The Coffee House commits to provide excellent service at a reasonable price and an optimum environment for the customers They can provide all three criteria, while others cannot For example, Starbuck can only offer two criteria, which are excellent service and vast space, but the menu prices are not suitable for Vietnamese's purchasing segmentation

1.2.2 The core values of the coffee chains of stores- the Coffee House

The Coffee time in Viet Nam is when customers meet and socialize with others The Coffee House has always valued the “people” factor to maximize the service quality and bring the customers the best experience at their shops Besides that, coming to The Coffee House, customers will be able to taste the high-quality drinks served by friendly staff under open andcomfortable shops The CEO – Nguyen Hai Ninh, believes that coffee will bring everybody

closer and nourish conversations, which creates a relaxing moment for buyers This statementhas inspired The Coffee House and become a vision for all staff in the company Loyal customers love these values about The Coffee House, which means the successful brand in this competitive industry created.

1.2.3 The missions of the coffee chains of stores- the Coffee House

The Coffee House runs its business under the customers’ perspective, so they tend to serve natural products to improve customers’ health and to save the environment That mission statement guides the company to operate in the best way they can

 Customers: The Coffee House will be their “home” where they can work, talk, and

relax during the day

 Product: Customers can have the best quality services at The Coffee House at an

affordable price

 Market: Now, the company has its coffee farm to produce and export coffee beans

They want to bring their products to the world so that everybody will know the Vietnamese coffee bean

 Technology: All their shops are supplied with the latest coffee machine to make

customers delicious drinks

 Self-evaluation: The Coffee House has proved its stand in the coffee industry in Viet

Nam by having unique values

 Company’s development: The reason that The Coffee House can thrive is by serving

healthy products to the customers, which is their most concern at this time

 Public image: The Coffee House does not only want to create profit for their

company, but the business also cares about improving the economy

1.3 The introduction to the brand values and serving products of the chains of coffee stores- the Coffee House

Nowadays, The Coffee House as people general views is an effective combination of these following factors

 The coffee shops selling their coffee beans: As a coffee shop, self-generating its

coffee is not an easy task The production chain can cost the company much more than buying from a supplier Nevertheless, The Coffee House chooses to grow its coffee to control the process more efficient Have the beans grown on 1650m

highland, and the company hopes that their Arabica coffee bean will reach the top quality with edible seeds and the dedication of the farmers From the farm to the coffee cups serving at the shops, were studied and instructed by coffee experts and talented barista in order to serve the best product The company is willing to buy high price seeds to ensure the quality of the farmers at their farm That way, the farmers will be happy and comfortable to work and ensure a good outcome for the company

No matter what point in the process, The Coffee House always offer a reasonable price for their customers

 The coffee shops having vast space: As customers' reminder can tell in their brand

name, The Coffee House designs their shop as a comfortable home or office In order

to achieve that, they must appreciate the "people" factor in their business plan They should know their customer psychology to design a suitable space to maximize their customers' experience every count of visiting In the coffee shop is where the magic happens, the farmers and the baristas will reap what they sow All staff work for a purpose, which is helping the customers have their best time at The Coffee House

 The coffee stores with a clear vision: The Coffee House does not stop at expanding

its brand in Viet Nam province They hope to be successful in introducing the brand value to the world They value high-quality seed, with the wants of getting the world'sattention about Vietnamese coffee images With a benefactor, their goal can smoothly

go succeeded

 The coffee stores with unique signature: The Coffee House signature is all-glass

spaces with two tones including orange - black luxury, which is an impressive design but no less in harmony with nature Besides, that's designs undoubtedly catch your eye at first sight The signature also is the alternating greenery which makes the stores’ atmosphere more comfortable like a small garden in the heart of the bustling, crowded city center

1.4 The summary of strategic objectives in the chains of coffee stores- the Coffee House

The primary marketing objective is to increase customer satisfaction by determining three types of customers that The Coffee House has had from day 1 Based on this report, the company will know its strengths and weakness according to its customer’s experience They will be able to understand what makes their customers choose them and what does not Many critics have pointed out that The Coffee House is a successful brand in the industry, and they still have many projects in the future, so the reasons behind unsatisfied customers need to be fixed before it is too late

II Current marketing situation of the chains of coffee stores - the Coffee House 2.1 Analyzing the variety of market and the market description of Coffee House

The coffee industry is competitive as always with both foreign and domestic businesses on the market Some businesses start as coffee manufacturers, some start with their coffee stores,and some combine both ways to expand their growth Along with the enormous coffee consumption in Vietnam (1.38kg/individual), various products, including instant coffee, flavorful coffee, healthy coffee, etc have been distributed to consumers As a result, the market is so diverse, which leads to changes in concepts to satisfy consumers' tastes and lifestyles

Consumers now have more options to consider than they did ten years ago For example, teenagers who prefer social places with aesthetic decoration can choose trendy cafes to meet

On the other hand, there are also plenty of coffee places designed especially for office staff, specialists, etc who require formal and standard environment for work However, pleasing

consumers are more challenging as they have experienced so much on the market It causes the market to shift from original products to creative ones and from ordinary customers' services to customer-driven ones

Therefore, The Coffee House chain distinguishes itself by inventing coffee drinks with unique recipes and upgrading their customer care services The Coffee House's marketing

segments consist of customers who value coffee, also need a quality space to meet and work Therefore, their customers vary in every social class, such as students, entrepreneurs,

professionals, etc Particularly, its customers are divided into three sections: satisfied

customers, unsatisfied customers, and will-be-satisfied customers The coffee chain's mission

is eventually to have satisfied customers only Hence, they make unparalleled drinks and distinctive customer services, which other stores can hardly do

2.3 Analyzing the facing competitive environment in coffee industry in term of the Coffee House

The coffee industry in Vietnam started to grow in the 90s Plenty of private entrepreneurs explored the demand on the market and the potential of producing coffee beans, then brought

it into the distributing lines and connected it with the F&B industry The country has perfect weather and natural conditions to plant coffee trees, especially the Robusta ones Therefore, it

is no doubt that Vietnam has enormous coffee productivity not only for serving the domestic market but also for export

By 2010s, 80% of coffee producers joined the F&B industry and had their store chains Most coffee products they offer are pretty much the same, but the keys to distinguish one another are drink recipes, prices, and service concepts As a young producer on the market, The Coffee House stands out with its coffee specialties, reasonable prices, and home-stimulated concept However, it, too, has to face plenty of big competitors that are in the same pricing segment, offer a similar menu, and build up the same service concept

The following corporations are the top three biggest domestic competitors on the market to The Coffee House

A Trung Nguyên: first opened in 1998 in Ho Chi Minh city by Trung Nguyen corporation

Trung Nguyen's coffee shop chain has expanded to many cities in Vietnam and global Their coffee drinks made from coffee beans produced in their factories across the country,

especially Kopi beans The price ranges from 50.000 - 70.000 Vietnamese Dong - depend on size, which is considered as middle-class price The taste of their coffee is original, rich, and flavorful, even though there are not various drinks The concept in their coffee shops is designed to be formal for entrepreneurs, businessmen, and businesswomen; specifically, they also have business workshops every week to bring their customers closer to the field

B Phuc Long: the first store was opened in the 1980s Although their specialty is tea

produced in their factory in Thai Nguyen, Phuc Long's coffee drinks are also popular,

particularly to young adults Their coffee beverages contain the taste of Robusta beans, which

is strong and harsh but has a peanutty aftertaste They set up a regular pricing system for the

menu, and divide their drink size into two: Regular and Big The inside of their stores carries the Western decoration that brings a warm, global vibe to customers Their staffs are trained

to be patient, proficient, and flexible so that customers are served adequately

C Cong Ca Phe: first opened in 2008 in Trieu Viet Vuong - an old town in Hanoi It is

widely known by young adults and foreigners since they build up images of the old Vietnam during the Vietnamese war, which is unfamiliar but fascinating to customers Their menu is all traditional Vietnamese drinks varying from coffee to milkshakes and tea Despite not producing coffee beans themselves, they manage to maintain the usual Vietnamese taste that customers can easily find it everywhere However, what makes Cong Ca Phe different is that they remind customers of old-time memories and their hometowns through the way their stores are decorated, their classic furniture, their cups, and glasses, et cetera They keep the prices in the same pricing segments with the other two competitors but offer ordinary

services

2.4 Reviewing the selling products compared to the demand of customer

2.4.1 Reviewing the selling products in the chains of coffee stores- the Coffee House

The Coffee House is well-known for seasonal drinks as it all is various and special The

menu is occasionally changed so that customers will not get bored with the drinks on the menu and will get chances to try different unique drinks It is also a strategy to attract and keep loyal customers years by years Currently, The Coffee House's new winter seasonal menu called Share Your Love, together with its usual ones, deliver the following features to customers

 Winter seasonal menu: Almond Oolong Milk Tea, Almond Choco Cherry, Almond

Choco Matcha, Almond Milk Coffee

 Original coffee menu: Vietnamese Black/Milk Coffee, Americano, Mocha, Latte,

Espresso, Caramel Macchiato

 The cold brew series: Traditional Cold Brew, Orange and Lemongrass Cold Brew,

Raspberry Cold Brew, Milk Cold Brew

 Teas, juices, blended drinks.

2.4.2 The features of drinks in the chains of coffee stores- the Coffee House

 Medium/large servings, served in glasses and take-away bottles

 Visually stunning and eye-catchy drinks

 Monopolistic, unique formulations

 Self-produced coffee beans and natural flavors, ingredients

 Common but special drinks and suitable for every age

III Scrutinizing the SWOT component of the chains of coffee stores- the Coffee House

3.1 Reviewing the background of SWOT analysis

SWOT considered the major of the possible strategic planning analysis tool which can be

performed to encourage businesses to better understand the current state of business

operations and future potential strategies to achieve their desired goals Besides, SWOT analysis is utilized to estimate the Strengths, Weakness, Opportunities, and Threats involved

in conducting a specific project or the other situation which requires decision making In practice, once a company objective has been established and conducted, various specific multidisciplinary functions that represent a broad range of perspectives are required to carry

out the SWOT analysis; which accurately illustrated in the form of a matrix similar to the

Table 1.

Helpful to achieve the

objectives Harmful to achieve the objectives

Internal

(attributes of the organization)

Strengths Weaknesses

External

(attributes of the environment) Opportunities Threats

Strengths The internal attributes of the organization

that are helpful to the achievement of the objective

Weaknesses The internal attributes of the organization

that harmful to the achievement of the objective

Opportunities The external conditions that helpful to the

achievement of the objective

Threats The external conditions that harmful to the

achievement of the objective

3.2 The importance of the SWOT analysis in marketing strategies

When using SWOT analysis, businesses can choose the starting points, which are the unique advantages of any business or brands, then the business model can be easily expanded and get more opportunities to interact in the broader competitive

environment

The importance of analyzing the internal environment

 Businesses can evaluate the strengths and weaknesses frequently and then switch the marketing strategies to match the current market segmentation requirements

 Businesses can review the advantages and strengths in current marketing strategies and then evaluate those factors followed by the list of reacting,

Table 1 the SWOT matrix (adapted from Winer, 2006)

including identifying the main strengths, secondary strengths, and neutralization

as well as figure out and re-fix the major weaknesses then secondary

weaknesses

 Businesses can analyze the strengths and weaknesses compared to competitors

to find strategic opportunities for business development

The importance of analyzing the external environment

 The over-controls of macroeconomic forces mainly include demographics,

society, culture, technology, political, legal systems, and laws

 The additional-controls of macroeconomic factors including consumer behavior, competitors, competitive environment, distributors, suppliers as well as some other segmentation which affect business profitability, for instance, the gender and religion

 It is essential to identify the opportunities and threats to expand the business model and show the brand values

3.3 The strengths of the coffee stores- the Coffee House

3.3.1 From human-centered to deliver happiness

The founder of the chains of coffee stores- the Coffee House who worked under the passion with coffee many years, however since after the success of the Urban Station Coffee, has just realized that coffee considered as the "enjoy beverage" thanks to a large number of feedback on customers satisfaction of HCM city "Coffee" is no longer

mentioned as pure drinks; nowadays, it becomes a pleasant place for customers to release stress, meet friends, share experiences, hobbies, and drinks However, those facts have been figured out by various common brand names in the coffee industry, such as Starbuck Coffee

Further research, Nguyen Hai Ninh, found that the mid-range cafe segment with prices from VND 40,000 to VND 60,000 was still limited Foreign coffee chains with high pricescan only make customers little curious in trend but complicated to become familiar destinations for Vietnamese people who purchase products in the average prices Then the wonderings leading to actions, the establishment of the Coffee House, can give customers both: optimal experience space and reasonable cost

Targeting customer's satisfaction and experience as a guideline to operate the business, The Coffee House focuses on training employees into the types of friendly, enthusiastic staff, always willing to speak up and share with customers According to the Coffee House policy from 2015, "The Coffee House is committed to sharing a 15% stake of the entire company to employees from the store level" After that, the Coffee House has built

a culture of ownership and employee loyalty successfully Since then, the stores can maintain the dedication, enthusiasm, sincerity in the service as well as ensuring the consistent quality of the whole system during operation