ANALYSIS OF MARKETING MIX STRATEGY OF

PART A ANALYSIS OF MARKETING MIX STRATEGY OF THE COFFEE HOUSE Product The Coffee House's essential products: Initially, The Coffee House provided coffee products Because at first, The Coffee House only offers coffee drinks to satisfy the core needs of customers when they come to the cafe: they enjoy coffee The Coffee House Blend is a separate blend of coffee served at The Coffee House chain The roasted and blended formula of The Coffee House's Arabica and Robusta beans creates a balanced whole of bitter, sweet, and sour taste, which makes the coffee strong and aromatic ARABICA seeds come from The Coffee House farm in Cau Dat, the soil to grow the best Arabica coffee beans in Vietnam ROBUSTA seeds of The Coffee House are selected from the most reputable Robusta suppliers in Vietnam from the Central Highlands (Dak Lak, Gia Lai, Lam Dong) However, in their brand development roadmap, The Coffee House realized that they could also attract a large number of customers who not love coffee but want to experience and stick with The Coffee space House, The Coffee House created the motto: "Go to coffee but not necessarily to drink coffee" F&B is a very competitive industry due to a wide range of substitutes Therefore, it is common for stores to improve their menu continually The Coffee House is no exception In addition to the famous coffee, the brand also develops many other products, tea & macchiato, ice-blended drinks, fruit drinks In Starbucks' marketing mix strategy - the P for the product Starbucks continually innovates its products to match the unique and creative needs of customers in different countries Starbucks coffee types will be divided into groups with different criteria, including: Sort by coffee beans: whole coffee beans, roasted coffee beans Sort by roasting: roasted coffee (blonde), medium roasted coffee (medium), carefully roasted coffee (dark) Sort by caffeine level: regular coffee (containing caffeine), and decaf coffee (caffeine removed) Sort by taste: flavoured coffee and flavourless coffee In addition to the above criteria, Starbucks also develops other product lines suitable for a large number of customers who are not connoisseurs of coffee or who prefer not to drink coffee but wish to experience Starbucks's coffee space Additional development products such as fruit tea - Teavana iced tea and seasonal product lines, limited edition, and festive occasions like Christmas and Valentine With the strategy of developing creative and flexible product lines, Starbucks always brings fantastic products, which customers are eagerly waiting Thereby we see both brands of The Coffee house and Starbucks though different product criteria but the same goal to satisfy the needs of every customer whether or not they love coffee or not when coming to the brand From the above factors shows the similarity in product policies of the two brands, both brands are coffee-focused and have auxiliary products to please needs of customers, with the criteria to go coffee does not necessarily drink coffee The difference in product policy of the two brands lies in the criteria of the types of coffee to create a unique brand identity Price It can be said that Vietnam's coffee market is divided into many clear segments, and every sector has large businesses involved Accordingly, the office segment has Highlands Coffee and Trung Nguyen and foreign brands such as Starbucks Coffee The youth or teen segment is the presence of Urban Station and Passio According to Hai Ninh - Founder of The Coffee House brand: although jointly pursuing each other in terms of the number of stores, the brands are far apart in price The average price of Urban Station and Passio ranges from VND 15,000 to VND 40,000: from Trung Nguyen and Starbucks Coffee, from VND 40,000 to over VND 90,000 The price gap from 30,000 to under 60,000 VND, this is the market of The Coffee House In terms of customers, The Coffee House is a combination of Highlands Coffee and Starbucks Accordingly, The Coffee House is aimed at customers who have gone to work, have travelled, like to experience luxury cafes at localized prices One of the most successful strategies of The Coffee House is the Launching strategy of joining exactly, "the right person at the right time" Back then, Vietnamese people were accustomed to sitting on coffee, but at a high price from brands like Starbuck, the price range of 30,000 - 60,000 VND with a "Western" style restaurant is still open It is for this reason that the strategy of market penetration has been carefully studied by globalization to fill that gap The price strategy used by TCH is entirely correct; customers can experience a spacious, comfortable and sophisticated space - not inferior to foreign giants such as Starbucks for only 30,000 - 60,000 VND It is one reason why many young people become loyal fans of this store chain For Starbucks, the price of each product is priced based on the value of the product Starbucks said that they provide high value to customers, both tangible and intangible.t Tangible value is the quality of the product, from carefully selected and rigorous coffee beans by a well-trained staff Intangible values are the experiences and emotions that customers are immersed in an authentic coffee space Starbucks' marketing mix in Vietnam is based on consumer behaviour Customers always tend to think that: Expensive products have a higher value; high-end brands will be reputable and create more quality products Via above analysis shows the difference in price strategy of the two brands The Coffee House chooses a competitive price strategy in order to occupy the mid-range market which still has a gap, while Starbucks is loyal to the price strategy with the criterion “expensive products have higher value” Place The Coffee House uses a direct sales distribution channel model A stamp imprinted on the minds of customers, also a trait that makes people curious, is the continuous opening of The Coffee House, appearing dense in big cities, considering the location that is always located at easy-to-find location, central facade, possesses eye-catching street view to create convenient comfort for customers Up to now, The Coffee House has reached 160 stores covering 14 provinces and cities which are usually big cities, most of which are concentrated in Ho Chi Minh City and scattered in other provinces such as Hanoi and Nha Trang Trang, Vung Tau In addition, The Coffee House operates its delivery team from the call centre staff to the specific delivery staff who are deploying delivery services in the city via the Website thecoffeehouse.com and the phone app The Coffee House, in cooperation with the only food delivery app, Lala, and appear only on the Now app but only in places with a small order flow like Da Nang and Can Tho Place in Starbucks' marketing mix in Vietnam is a story about where customers can own and enjoy its products Building direct and personalized relationships is a guide in Starbucks' distribution strategy With this criterion, Starbucks developed cafes with beautiful coffee space, through Starbucks App and retailers Adapting to the development of technology, Starbucks develops an ordering application through the Starbucks App, allowing customers to place orders anytime, anywhere In addition, this brand also cooperates with hotels, airports and coffee shops in areas for office workers Only that much, we can see that Starbucks coverage is enormous, customers can easily own Starbucks products and help Starbucks maximize profits Thereby we see that Starbucks owns a more diverse distribution channel system than TCH, so the ability to reach and make a mark in the minds of customers is also better Thereby we see that Starbucks owns a more diverse distribution channel system than The Coffee House so the ability to reach and make a mark in the minds of customers is also better But in return, The Coffee House has a much bigger coverage of stores in Vietnam than Starbucks Promotion * Marketing online Advertising (mostly digital marketing):  Facebook marketing: The fan page of TCH has nearly 500,000 followers with exciting and interesting posts about promotions, articles about new product launches, or individual occasion wishes posted in Golden hour frames suitable for young people  Youtube: With more than 2.87 thousand subscribers, and videos of creative change that have captured the hearts of customers  Website: TCH has a beautifully designed, beautiful website Besides, the use of tools like Google AdWords makes it easier for TCH to reach customers * Promotion activities and customer appreciation - Promotion activities: Many attractive promotions, vouchers are valid for the frequency of thick - Customer Gratitude - Bean Accumulation: BEAN - a brand new unit for accumulating points at The Coffee House Rewards 3.0 -Keep membership - New benefits While TCH's competitors, Starbucks is one of the most innovative and innovative brands for media, advertising, promotion, event organization The most seasonal activities of Starbucks include events, special promotions, logo printing on beverages, fish utensils, drinking glasses, thermos and collaborating with brands and influencers Limited editions One of the most innovative forms of Starbucks promotion is Gift Card, to attract customers who have never used the service This program is for friends of former customers, and the company uses the same customers to advertise for free With over 27 million fans on Facebook alone, and more than million followers on Twitter have proven how Starbucks has a large number of customers, brand power at the top of the F&B industry worldwide The above analysis shows that both brands are taking advantage of their strengths to conduct trade promotion, promote images on the Internet, especially social networking sites commonly used among young people and writers (target customers) such as Facebook, Instagram, Each brand tries to build its own promotions, increase member benefits in order to increase customer loyalty to the brand and attract new customers The human factor in service - People The Coffee House CEO Nguyen Hai Ninh said that the first customer he met was not the CEO, but the salesperson, the number of customers he met and talked to the CEO with his fingers Therefore, The Coffee House always pays attention to the quality of employees when recruiting The training of a good salesman is one of the keys to retaining customers, not just quality and price Customers are an indispensable element in helping to spread the brand of the business The target customers of The Coffee House are students and working, travelling They use coffee not only for drinking, but they also enjoy, socialize, network, network, work And Starbucks has built a platform to foster relationships, always putting employees first, encouraging employees to form close relationships Considered a "partner" rather than an employee, even part-time employees (in the United States) receive stock options and health insurance Former company president Howard Behar believes that employees who feel cared for will care for their customers 6 Process Different stores will have different sizes, so the service process, as well as the number of employees in each shift, is also different The above is the general process at The Coffee House stores that customers experience Online ordering process: With just a few simple steps, you can enjoy the delicious and delicious drinks of The Coffee House When customers call, Delivery Service - Delivery of The Coffee House will serve customers: For Starbuck, the service process at the store is almost similar to The coffee house Service process in distribution channels of sales through Starbuck App As follows: Through comparison of service processes, we see in the current context and the trend of consumer behaviour, the brands have a direct service process in stores quite similar The physical element of service marketing - Physical Evidence • External factors: - Design: From the outside looking at any store of The Coffee House, the front of the shop is using glass, striking with the orange-black tone typical of the shop - Signboard: The name of the restaurant 'THE COFFEE HOUSE' is large and bright, clearly located - Logo: designed prominently by white letters on an orange background; this is also the dominant colour tone of this store chain • Internal factors: - Design: creating a "home" feeling as possible, making you feel like you belong here no matter who you are - Devices: Dispensers are located in the area behind the order counter TCH uses glass for guests to drink on the spot All customer service items have the name of the restaurant, 'THE COFFEE HOUSE', which is exclusively designed from cup holders, plates to pads Not only serving individual drinks but also cakes and bread to eat should have a cake display cabinet for guests to choose easily • Other factors: School uniform: Shirts and pants are the primary colour black, the left chest has the name of the white 'THE COFFEE HOUSE', uniformed from a waitress, bartender to security guard Brochure: designed to introduce new products or all items in the menu of the restaurant Starbucks offers a combination of product and service and I think it really does a good job in giving customers the best experience, so that they want to try it again and again Customers pay not just for cup of coffee or tea, but for overall enjoying their time When you enter the café you see clean, friendly environment, with cozy chairs, sofas, tables, book shelves, bright and “tasty” show case with those alluring pastries, menu with tempting coffee pictures… you see smiling welcoming staff in those green uniforms with Starbucks logo, you hear nice music which complements the atmosphere of the “place to be” Summary: From comparing the 7Ps Marketing strategy of two big bosses in the coffee chain in Vietnam show us that each brand has chosen a different strategy to penetrate the market and wants to dominate the target market that themselves aim for The Coffee House has been successful with the strategy of entering the market to compete directly with price competitors Starbucks with the advantage of an international brand asset is still gradually asserting its position in the high-end customer segment Part B: Develop and evaluate a basic marketing plan History of establishment and development of The Coffee House In August 2014, The Coffee House (TCH) coffee chain was officially launched and continuously impressed with the rapid growth From the first store at 86-88 Cao Thang, up to now, the chain has been present in major cities across the country (Ho Chi Minh City, Hanoi, Da Nang, Bien Hoa, Hai Phong, Vung Tau) At the pace of development, 4-6 new stores are opened each month and serve nearly 15,000 visitors a day In its "homeland" of Saigon, TCH now appears in almost every major street For each store, this brand evolves in its own way based on the concept available to create a local space, close to customers 2 Vison and Mission of The Coffee House  Vision TCH aims to respect and value the connection between people and our customers TCH is inspired by the coffee cups and drinks we create and strongly believes that the best quality drinks served in a friendly space with dedicated staff at TCH will bring comfort to customers  Mission Every decision and action at The Coffee House begins with the mission "Deliver Happiness" - Delivering happiness From employee happiness to customer satisfaction, TCH believes that everyone can contribute to the community's good deeds Happiness is created and spread, with The Coffee House, is complete happiness According to the data of Vietnam Industry Research and Consultancy Joint Stock Company (VIRAC) in 2018, in the Top coffee chains with the largest number of stores in Vietnam, the number of pure-Vietnamese chains with names is The Coffee House, Phuc Long, Trung Nguyen Legend and Cong; The remaining three chains are Highlands Coffee, Starbucks and Coffee Bean & Tea Leaf Achievement From 2014 to July 2018 , The Coffee House has develop and open the 100th store.- In “ 2018, The Coffee House Signature has been opened, providing a luxury place fortopnotch quality coffee with ready-at-hand brewing coffee (or “cà phê phin”) instead ofa ” “ regular menu which could be find in any The Coffee House’s franchise all acrossVietnam - Back in 2015, The Coffee House has managed to set its foot all over Hanoi’s mostimportant districts up to 14 physical stores, spread across the city.- A dedicated coffee farm with over 1,650 square meters on top of a valley to helpbringing its dream of Vietnamese coffee going abroad one step closer.- Not just Hanoi alone, The Coffee House now extended to the southern part ofVietnam, including Da Nang, Bien Hoa and Vung Tau ” SWOT Analysis Strengths Weaknesses Nguyen Hai Ninh has experience Nguyen Hai Ninh has to “ “ when he opened Urban Station and he marketing, pay commission to find knows factors that are attract managers customers Imitable product (other brands can The Coffee House is proactive in easily imitate that makes their raw material - coffee roasting product products become less competitive) packed Technology advancement is not Until now, The Coffee House is the The Coffee House's strongest asset fastest growing brand while we are entering the era of Corporate with Ahamove to deliver Marketing 4.0 ” their products to customers To be listed as Runner up in 10 most influential places ” “Shall we go to the coffee shop? ” – “ core value of the brand as well as Vietnamese culuture ” Opportunities Threats The Coffee House can expand their Facing with other brands from “ “ business to other countries because of foreign countries international economic integration Other coffee shop brands also have 2.Vietnam s coffee consumption go up the in recently years and same target demographic young therefore the benefits are divided population is The Coffee House's The Coffee House is too familiar target customer with a portion of customers therefore 3.Technological advancement enables they want to find other interesting The Coffee House to improve places customer service Arabica and Robusta coffee has the ideal weather to grow up ” Self-developed marketing plan ” To launch our new product which is “Banh Mi” to the competitive market all “ ” “ overVietnam, we decided to align our goals for the marketing plan with S.M.A.R.T objectives What we have come up for our made-up product in 2021 would be: ” “Banh Mi” would be commercialized at the first beginning of 2021 when “ National Holiday is over and The Coffee House is back in business at the first Quarter Special combos would come with it including one “Banh Mi” and one ” “ drink of choice that are in Medium size (less than 35.000 VND) until a specific sale target has reached The end forth is promotion would be at the last of Quarter with at least 1000 combos sold This promotion happens specifically in Hanoi only to test the reaction of the customers ” Specific: In this marketing scheme, we’ll entirely focused on reaching the sales “ target for the combo “Banh Mi” by pushing our advertisement agenda on every ” “ stores locatedall over Hanoi to make sure that every customers who comes into the store would see thatcombo on every banner, screens that located within the store ” Measurable: The end goal for this promotion would be at the end of June 2021 “ (the last Q2) so the sales can be easily tracked whether it could meet or not ” Achievable: 1000 sold combos within 180 days (2 Quarters) equal to 180 days “ of opening for The Coffee House therefore, a minimum of combos sold per day can be easily met as The Coffee House does have a steady amount of customers getting to and fro, especially on weekdays ” Realistic: Our product “Banh Mi” is a easy to made and easy to consume within “ ” “ a preferable time frame and our goal which is to reach 1000 combo sales within our designated time is also easy to attain ” Timely: We have set up this promotion to last about months until the end of “ June (end of Quarter 2) therefore a plentiful amount of time to help the brand reached its goal ” After running the promotion of combo “Banh Mi” with a preferred choice of “ ” “ drink lastuntil the end of Quarter 2, we will then opened up this campaign to further down branches (in Da Nang and many other store branches down South of Vietnam) with a bigger goal of 5000-10000 combo at the end of Quarter (the end of December 2021) given that the first campaign is a success The price and quality would still be kept thesame to deepen our customers’ belief that The Coffee House can maintain its customer’s satisfaction and our brand’s ethic Specific: This campaign’s agenda will be further expanded to outer regions not just in Hanoi but far down South to implement our new idea to a broader audience ” Measurable: The end goal for this promotion would be at the end of December “ 2021 (the last Q4) with a bigger sales goal of to 10 times larger than the first goal of Quarter tothe end of Quarter Attainable: With a bigger goal in mind, we have calculated that the minimum of 5000 combo (maximum 10000) sales equal to 180 days (from Quarter to the end of Quarter 4) means that a minimum of 28 combo sales (maximum 56) per day from every store across Vietnam can be attained as this time, our market has significantly opened up much bigger than ever ” Realistic: The product would still be kept the same quality and quantity to make “ sure that it is an easy consumable item for everyone at every age to enjoy It is also easy to attain this aspect as our product still the same Timely: Another months for this promotion to last (from July 2021 to the end of December 2021) to see whether this product of ours can be successful within domestic market ”  Segmentation – Targeting-Positioning Segmentation “ Segmentation Geographic Country region Vietnam: Hanoi, Ho Chi Minh, Bien Hoa, Vung Tau, Da Nang, Hai Phong Density Urban, Suburban In geographic segment, The Coffee House is mostly located in these regions, especially in Ho Chi Minh City That is the reason why customers living near stores or not too far from the location can come to buy and try the product Moreover, living in urban and suburban areas, people are more likely to have leisure coffee-time than in other areas Demographic Age 15 - 35 Gender Male, Female, Others Family life cycle Young, single/married Income Under 2.000.000 VND Education Academic level: Grade 8-12/12, College student, Worker Religion None Nationality Vietnamese and other nationalities Demographic segment is all about people “Banh Mi” is easy to enjoy with afford ” “ able price for everybody but our group focused more on students and workers “ ” They require aquiet working space so that they will choose our coffee shop Sometimes, they work through day time and if they go out and have lunch, it will interrupt their work Got ahold of this insight, “Banh Mi” in The Coffee House ” “ ” “ will be the best choice for these people With an afford able price, both students ” “ and workers can buy “Banh Mi” and it is suitable for lunch ” “ ” Psychographic Social class Underclass, Working class Lifestyle Sustainablers Personality Adaptable This criteria allows to divide the market based on social class, personality and “ lifestyle Banh Mi is suitable for those who prefer convenience and easy to adapt to new kinds of food The sole advantage of The Coffee House’s Banh Mi is that customers just have towalk to the order counter and they can instantly buy it without waiting in line Most likely people of underclass and working class would be pleased by the price as it does notcost too much money The range of customer will be bigger, from underclass to middleclass or even higher class because one price fits all ” Behavioural Occasion Regular occasion Benefits sought Quality, convenience, fast User status User rate 1st-time users, potential user, frequent user, non-users, ex-users Light user Loyalty status Medium Attitude towards the product Positive, demand for product with better quality and price “ Behavioral market segmentation has some criteria related to knowledge, attitudes, responses to the product and uses These factors - in which a customer takes intoconsideration – contribute to consumer decision making and it is also affected by his/her behavior Banh Mi can be served every time in the year and the flavor would be changed and customized according to which season we are in Also, this product has the benefits that every customer seeks within a product: the convenience, how quickly it can be consumed and also the quality of Banh Mi User status and user rate are segmented into every user status, because The Coffee House wants to bring a good experience in a coffee shop and create a habit for customer in the long-term; light users often hold a large percentage of the market and they ready to pay a small amount of money - that is our target customer In addition, the strategies to get ahold of loyal customers aim at retaining old customers and acquiring new customers The Coffee House focuses more on service, in this case, service is the best way to provide the experience that could retain our customers Because The Coffee House’s Banh Mi targeted towards students and workers therefore it should be afford able as well as in good quality “ ” Targeting: Differentiated (Segmented) Marketing ” With The Coffee House’s Banh Mi, our group target more than one specific “ target in the market that is called Differentiated (Segmented) Marketing and some offers will be designed for each part of the segments This allows us to increase potential customers, sales, revenues as well as profits Focusing on more than one target means that the costs will be increased because we need to use tactics such as offering other products (our teamcame up with a combo The Coffee House’s Banh Mi and Peach Tea Mania) and creating marketing messages (“No more hunger with The Coffee House Banh Mi”) for the ” “ customers Choosing differentiated marketing will bring more sales potential to The Coffee House because it pursuits different types of customers In turns, customers will choose our product if those products match with their needs, which will increase ourprofits and customers’ satisfaction On the down side, if The Coffee House chooses differentiated marketing, it means the company will also have to emphasize the quality and the service to keep the customers In addition, the company will also have to compete directly with other companies that offer low-cost products, some struggles may appear such as copy-cat product Because of this, The Coffee House has to use marketing to sell quality and value, to be diligent in product designs to discerning customers Posittioning ” According to statistics based on website sources, Facebook fanpage and business representatives) as of December 2019, the number of coffee shops of chains has changed significantly: Highlands Coffee from 240 to 299 shops, The Coffee House from 140 to 160, Trung Nguyen Legend from 92 to nearly 100, Starbucks from 45 to 64, Phuc Long from 44 to 60, Plus from 63 to 61 (excluding shops overseas), Coffee Bean & Tea Leaf from 15 to 10  Evaluate and monitoring marketing mix “ Evaluate and monitoring marketing mix is an important step of marketing strategy This step helps the company to realize problems in near future and how the company can improve situation due to the market changes Evaluating and monitoring is a way to help company realize efficiency of marketing strategy without costing too much time andmoney Evaluating and monitoring can be done through many methods Surveys: Surveys are created as an effective way to understand customer satisfaction, what or how they think and feel about company products or company marketing strategies Customers are the ones who purchase company product so what’s on their mind about the product orthe marketing strategies is important Surveys consist of many questions with an aim to gather information about customers: it can be done through phone calls, emails, online surveys Online tools: We are living in 4.0 industries, where internet is evolving We can use online tools suchas Google Analytics to analyze data and Facebook or any social network to calculate thenumber of people reach your product through likes, views Return on investment: Return on investment or ROI is crucial in business and marketing ROI helps thecompany to check the money putting into marketing plan whether it would bring profit or not ” CONCLUSION When doing this research, I decided to analyze and research and compare the Marketing Strategy of 7Ps between two major coffee brands in Vietnam, The Coffee House and Starbucks to see the similarities and other differences between these two brands In the course of my research, I chose The Coffee House as the focus and gave an analysis of the strengths, weaknesses, opportunities, threats of businesses, copper and marketing activities of businesses Not only that, I also came up with some new ideas and new hypothetical plans for the company Hopefully the marketing knowledge I have learned and applied into this research can help us achieve our research goals  ... (excluding shops overseas), Coffee Bean & Tea Leaf from 15 to 10  Evaluate and monitoring marketing mix “ Evaluate and monitoring marketing mix is an important step of marketing strategy This step helps... 60,000 VND, this is the market of The Coffee House In terms of customers, The Coffee House is a combination of Highlands Coffee and Starbucks Accordingly, The Coffee House is aimed at customers... Develop and evaluate a basic marketing plan History of establishment and development of The Coffee House In August 2014, The Coffee House (TCH) coffee chain was officially launched and continuously