Introduction
Reasons for choosing the topic
Vietnam has always been considered an attractive coffee and tea chain business market with market size of about 1 billion USD/year (according to research by Euromonitor) This is also a very competitive and tough market because of the presence of countless brands In which, the most prominent brands can be mentioned such as The Coffee House, Phuc Long Coffee & Tea, Highlands Coffee, Cong Coffee Each brand has a different style, drink, price, and service, but the common point between them is that they are all famous and extremely familiar brands for Vietnamese consumers The reason these brands are able to succeed and stand firm in the fiercely competitive market is partly due to an effective 7P marketing mix strategy Therefore, the writer wants to know how these brands build and execute their marketing strategies The writer chooses Phuc Long Coffee & Tea as the object of the writer's research and the topic that the writer chooses is "Analyze marketing mix 7P's strategy of Phuc Long Coffee & Tea in Vietnam market."
Research objective
- Research and analyze the current situation of Phuc Long Coffee & Tea marketing mix activities, including elements of services product, price, distribution, promotion, service processes, physical evidence, people
- Make comments, evaluate and propose solutions to improve the 7P marketing mix strategy for Phuc Long Coffee & Tea.
Introduce about Phuc Long Coffee & Tea
1.3.1 History of establishment and development process
- In 1968, Phuc Long was founded in the famous tea plateau Bao Loc (Lam Dong)
- In 1980, Phuc Long opened the first three stores selling products in Ho Chi Minh City on Le Van Sy, Tran Hung Dao, and Mac Thi Buoi streets
- In 2000, Phuc Long trading production company limited was officially established.
- In 2007, Phuc Long took possession of a tea hill in Thai Nguyen and at the same time invested in building a coffee and tea factory in Binh Duong
- In 2012, the first Phuc Long Coffee & Tea store was launched at Crescent Mall District
7 That was an event marking a turning point in Phuc Long's development history when the company officially entered the Food & Beverage field with Phuc Long Coffee & Tea shops operating under the self-service model in a modern, classy, and outstanding space
- So far, Phuc Long Coffee & Tea chain stores have been present in all major cities across the country (Ho Chi Minh City, Hanoi, Da Nang, Nha Trang, Binh Duong).
- With the ceaseless passion for expanding the market through sustainable development, Phuc Long is striving to become a company specialized in manufacturing and exporting high-quality coffee and tea in Vietnam
- Phuc Long hopes to create a Vietnamese brand with outstanding quality reflected in each product, thereby gradually affirming its position in the international market
- To become a pioneer by creating new ideas for the coffee and tea industry
- To develop an outstanding brand, motivate one another, as well as turn the ideas into reality over unity, interaction, listening, and respect
- Maintain high quality that satisfies customers by having a deep understanding of their needs and values
- To the consumers: Commit to supplying the best quality products and services
- To the employees: Continue to improve the professional, dynamic and creative work environment Provide a fair and equitable work environment that facilitates opportunities for advancement
- To the community: Balance between the benefits of the company and those of the community, actively contribute to the social activities of the community, and always show a high sense of responsibility
- Manufacture, export, and trade finished products of coffee and tea (packaged)
- Offer food and beverage services at Phuc Long Coffee & Tea shops:
+ A comprehensive variety of food and drinks
+ A fine selection of cakes and fritters
Market & Competitors Analysis
Market Analysis
According to the report of Coffee shop chains landscape on social media in 2020, The Coffee House, Phuc Long Coffee & Tea, and Highlands Coffee were the top three brands with coverage across social networks when holding more than 75% market share in discussing chains about coffee shops Following were many domestic brands such as Ong Bau Coffee, Cong coffee, Trung Nguyen, Milano, Passio, GUTA showing a strong wave of pure Vietnamese brands in the current market The most popular international brand on social media was Starbucks ranked at fourth place with 14.4% of the discussion market share
Figure 2.1:Overall Buzz Volume about Coffee Shop Chains in Vietnam in 2020
(Source: Coffee shop chains landscape on social media in 2020) 2.1.2 Operation status of coffee shop chains
In 2020, Highlands Coffee has continued to hold its position as the largest coffee chain in Vietnam, with the distance from the other group not much changed Total revenue has reached nearly 2,140 billion VNĐ, only a slight decrease compared to the previous year
The 2nd position was mixed when The Coffee House with a relative decline fell to 3rd place Phuc Long grew slightly, rose to 2nd place The situation at Starbucks is not much different from The Coffee House These three coffee chains recorded revenue in the range of 700-800 billion VND From 2019 onward, all three beverage chains have recorded "dizzying" growth
4 rates, averaging 30-40% per year This further shows the tremendous impact of the pandemic on the entire F&B industry, of which the above names are just examples
In the following group, Trung Nguyen Franchising, the unit set up to manage the Trung Nguyen Coffee Space chain, lost one-third of its revenue NISO Group, the management unit of the restaurant & coffee chain with the RuNam brand, even more than halved its revenue
In terms of profits, there is a divergence among the major coffee chains Notably, in the case of Highlands Coffee and Phuc Long Coffee & Tea, profits increased by 45% and 119%, respectively, reaching 80 billion VND and 35 billion VND Somehow, both coffee chains have still increased efficiency amid the epidemic The group of coffee chains that were already losing money suffered heavier losses, including The Coffee House, Trung Nguyen Franchising and NISO Group Starbucks, a foreign coffee chain, saw a sharp drop in profit, from 39 billion VND to 5 billion VND
Figure 2.2: Revenue and profit of Coffee Shop chains in Vietnam over the years
Competitors Analysis
Highland Coffee, Starbucks, The Coffee House are formidable competitors of Phuc Long Coffee & Tea in the coffee shop chain market in Vietnam
- Highlands Coffee: Because Highlands Coffee pursues middle-class target audiences, office workers and young people are the main, so the main business strategy of Highlands Coffee is to open shops in office buildings (Grade A is awarded) prioritize) Highlands Coffee chain currently has more than 336 stores Highland Coffee's revenue reached nearly 2,200 billion VND in 2019 and nearly 2,140 billion VND in 2020, far surpassing and more than double the total profit for the remaining competitors
- Starbucks: In 2019, the revenue of the Starbucks chain reached more than 780 VND billion, an increase of more than 32% compared to the previous year thanks to faster system expansion This number helps the world-famous coffee chain stand in the group of chains with the highest revenue, behind Highlands Coffee, The Coffee House
- The Coffee House: After many times of scaling up and raising capital, The Coffee House has become the second-largest coffee chain in Vietnam (after Highlands Coffee) The Nikkei Asian Review at the end of 2018 rated The Coffee House as one of the chains with the highest growth rate today The difference of this chain is that it does not invest in stores in golden locations, but has a rich menu of drinks, moderate prices, high-speed wifi, a large area, targeting the young customer segment In 2019, this chain's revenue reached 863 billion VND, an increase of nearly 30% compared to 2018 However, The Coffee House was the highest loss chain in the leading group, with a negative profit of more than 80 billion VND With the highest gross profit margin among coffee chains, the main reason for this chain's loss is its high selling costs
Phuc Long also has competitors from alternative products such as famous milk tea brands KOI, Tocotoco,
In addition, on the market, there are a variety of beverage products rich in types, designs, and tastes, such as C2 tea, 0-degree green tea; or carbonated drinks such as Pepsi, Coca Cola are strongly competitive products in the youth market segment
Target customers analysis & Positioning Strategy
Segmentation
The first segmentation: high-end class with high income They are willing to pay a high amount of money not only to enjoy a quality drink but also want to show their caste and value while enjoying the atmosphere, the decoration, and the service attitude of the staff
The second segmentation: the group of customers with an average income in this segment are mainly office workers and students They are less concerned about price, rather a concern about the quality, and need to find comfortable spaces to meet friends, work, and exchange The third segmentation: low-income, much consideration for the price There is no need for quality drinks and enjoyment, finding space for themself.
Targeting
Phuc Long Coffee & Tea targets middle-class customers from office workers to energetic young people such as students and foreign tourists when coming to Vietnam These customers come to the store not only to talk or meet friends and partners, but also to find themselves a comfortable, spacious space to focus on studying, working, and creating.
Positioning
- The company has succeeded in positioning the brand in the minds of customers as a premium tea, "expensive but worth it"
- Positioning of Phuc Long Coffee & Tea for:
+ Customers: A place to stop, work, relax and chat
+ Products: Phuc Long produces and distributes quality, delicious, full of Vietnamese flavor tea and coffee products
+ Market: Phuc Long wishes to bring its products to many places across the country along with reliable quality and service at a reasonable price for consumers
Figure 3.1: Competitor-based positioning map
Analyzing the Marketing Mix (7Ps) Strategies
Services Product strategy
A service product comprises all elements of service performance, both tangible and intangible, that create value for customers Service products do not lead to ownership or transfer of ownership Customers will feel disappointed and uncomfortable when using service products that are not as expected On the other hand, customers will be satisfied and happy when service products' quality not only meets but also exceeds their expectations Feelings and reviews of customers are the most important recognition for the service products' quality
- Core product: the central component that supplies the principal, problem-solving benefits customers seek
- Supplementary Services: augments the core product, facilitating its use and enhancing its value and appeal
- Delivery Processes: used to deliver both the core product and each of the supplementary services
The main products of Phuc Long Coffee & Tea include tea and coffee Phuc Long has found a unique USP point that no other brand has That is, the taste of Phuc Long must be one, unique and different
The fresh taste of Phuc Long tea comes from two tea hills in Thai Nguyen and Bao Loc Phuc Long focuses on producing by traditional manual methods to bring a cup of strong tea The flavor combination of Phuc Long tea leaves: theanine, carbohydrates, polyphenols, caffeine, enzymes All blend to create a fragrant, bold, and cool cup of tea for customers Phuc Long reserved two options for tea lovers:
+ Make in a modern way with green tea latte
+ Make in a traditional way with a perfect cup of oolong tea in both flavor and taste
Phuc Long always focuses on the pure origin, preserving the premium characteristics of the coffee beans, and constantly strives to find the best coffee beans and roast them to the most perfect level When drinking Phuc Long coffee, four characteristics of the brand can be recognized: strong roasted coffee beans, strong flavor, delicate flavor, and smelly coffee Phuc Long prepares coffee according to two recipes:
+ Make in a modern way: filter coffee, racquet coffee
+ Make traditionally: french press, aeropress, pour-over, cold brew
● Supplementary Services: in Phuc Long, there are various supplementary services including facilitating services and enhancing services
❖ Facilitating services: either needed for service delivery or help in the use of the core product of Phuc Long There are four elements in facilitating services: information, order-taking, billing, payment
- Information: All customers can refer to information about current and upcoming products of Phuc Long, as well as about prices on the official fan page of Phuc Long Coffee & Tea All product information is always updated the fastest on the company's official page with honest illustrations, bringing the most confidence to customers when they have a demand for Phuc Long's products Even though Phuc Long's websites, customers also know the location of each brand's branch, which branch is closest to them to save time for their travel
- Order Taking: In Phuc Long Coffee & Tea, when customers come to order products, the staff will give them invoices with a service vibrating order card to call customers back to receive drinks and dishes This service vibrating order card can help save customers' waiting time, help them be more proactive or not get the wrong drinks or dishes from the staff during the service Moreover, Phuc Long Coffee & Tea also has a way to order through apps such as Baemin, Grab, Now, when customers cannot go
9 directly to the store to buy That is a popular way to attract customers and bring high revenue for brands in today's modern technology era
- Billing: Products in Phuc Long are diverse and combined into combos, so Phuc Long issues invoices right after payment and before receiving drinks or dishes to create the most convenience and accuracy for customers Invoices will have information about the date and time of the invoice, the name of the cashier, product's price so that the customer can grasp it specifically If there is a problem, it will be resolved promptly
- Payment: There are two forms of payment: cash or bank card when customers want to pay in Phuc Long In addition, Phuc Long encourages customers to use e-wallets such as momo, shopee pay, zalo pay, or vouchers and coupons to receive more incentives when paying at the store in an advanced technology platform that can save more time
- Besides the core products of tea and coffee served at Phuc Long Coffee & Tea stores, Phuc Long also launched packaged tea and coffee products for sale in the market Boxed tea, packaged tea, canned tea, and coffee are products that are offered to retail stores such as Vincommerce or VinMart+ to expand market coverage and increase sales for Phuc Long
- In addition to Phuc Long Coffee & Tea beverage products, the brand's mooncakes have made a strong impression on customers not only in terms of quality but also box design and bring success to Phuc Long in the food segment In addition, the decision to diversify products with Phuc Long branded bread also left a positive impression on customers Standard bread originating from France and bearing Vietnamese brand with all sizes, ingredients to ensure food safety, with a slightly higher price than outside, is extremely reasonable, and there is nothing to complain about
❖ Enhancing Services: Besides the facilitating services mentioned above, Phuc Long Coffee & Tea also sets up enhancing services to enhance the customer experience and show the professionalism and difference of the brand with other competitors Three factors increase the value of Phuc Long Coffee & Tea's core products:
- Safekeeping: Making customers feel more secure and comfortable when using the brand's service is a necessary factor to increase the number of customers of the brand And Phuc Long Coffee & tea has done that They arrange parking staff with large parking lots Some branches also have two parking lots for customers to help them feel secure when enjoying products at Phuc Long Coffee & Tea shops
- Hospitality: Although this is a group in enhancing services, it is indispensable in any business model today, and Phuc Long Coffee & Tea is no exception The staff of Phuc Long Coffee & Tea has a professional service style, with hospitality and friendly When entering the shop, customers will hear the greetings of the waiters and cashiers They will be assigned a seat by the staff if they cannot find a suitable seat
- Exceptions: Phuc Long Coffee & Tea employees are given a partial right to deal with customer situations and exceptions to a reasonable extent It could be the customer's personal preferences when ordering products such as adding more sweetness to the coffee Or making the wrong drinks or dishes that the customer ordered, the staff can decide for themselves without notifying the manager Phuc Long Coffee & Tea has empowered employees reasonably enough to avoid putting pressure on employees and losing the seamlessness of the service process
Pricing strategy
Table 4.1: Price list of some products at Phuc Long
Phuc Long Con Panna 60.000 VND
Phuc Long Milk Tea 45.000 VND
The foundation's underlying pricing strategy can be described as a tripod, with costs to the provider, competitors’ pricing, and value to the customer as the three legs Phuc Long Coffee
& Tea has also built a pricing strategy for its products and services based on these three basic factors:
Phuc Long's selling price policy is reasonably built based on the available strengths of tea and coffee, the two main sources of ingredients for most of the brand's products These two sources of ingredients are grown, processed, and supplied by Phuc Long company to its chain of stores Because of mastering the main input ingredients, the cost of the product is less affected by the impact of other suppliers At the same time, it also minimizes production costs per product, giving customers an affordable price but still delivering excellent quality
According to cost-plus pricing, in addition to input ingredients and production costs, the price of the product depends on service costs such as the use of seats and a few other costs related to the operation of Phuc Long Coffee & Tea shops such as:
+ Fixed costs: costs for facilities, luxurious interior design in the style of "Western restaurant", modern machinery and equipment, prime location in the middle of the city + Direct costs: seasoning sources and tools are carefully selected with high input standards + Labor costs: staff are selected for professional training and are always enthusiastic about customers
+ Additional costs: service quality and brand value built over more than 50 years
+ Other expenses: advertising, electricity, water, wifi,
Vietnamese coffee market has fierce competition among businesses The market is divided into many clear segments, each segment has the presence of big brands, and each brand has its target customer Accordingly, the high-end segment for high-income office workers has the participation of Highlands Coffee or foreign brands such as Starbucks Coffee, The Coffee Bean
& Tea Leaf, In contrast, Trung Nguyen positions its brand lower but identifies its segment as customers who love traditional coffee flavors Meanwhile, Phuc Long chooses for itself the mid-range segment with a price that is affordable for the majority of people to bring its brand to all consumers as quickly as possible
Although closely following each other in terms of the number of stores, the brands are far apart in price The average price of Urban Station, Passio ranges from 15,000 to 40,000 VND; the average price of Trung Nguyen, Starbucks Coffee is from 40,000 to more than 90,000 VND The price gap from 30,000 to less than 60,000 VND is identified as Phuc Long's market More specifically, the price of a cup of Cappuccino at Phuc Long is 30,000 VND for a small cup and 35,000 VND for a large cup, but at Highlands Coffee, it is up to 54,000 VND and even Starbucks Coffee is 80,000 VND Phuc Long also sells milk tea - a favorite drink of young people in recent times Similar products, but the selling price is quite cheap, only about 25,000
- 45,000 VND / cup, equal to 50 - 70% of the selling price of Trung Nguyen, or 30% - 50% of the selling price of Starbucks and The Coffee Bean & Tea Leaf Therefore, for Phuc Long, bringing the brand closer to all consumers is quite simple A representative of Phuc Long said that foreign brands entering the Vietnamese market in the beverage segment are not a threat, because the target audience of Phuc Long is young people, the price is reasonable Therefore,
13 it can be seen that the green color on Phuc Long's logo is not to compete with Starbucks or competitors in the above group, but wants to gain an advantage in the middle segment
At the same time, Phuc Long also has an extremely accurate and reasonable market entry price strategy to create the success of this brand today At a time when Vietnamese wanted to sit down for coffee at "Western restaurant"-style shops, they had to accept an expensive price of about 45,000 to 60,000 VND because at that time there were only high-end brands on the market like Starbucks or The Coffee Bean Therefore, Phuc Long Coffee & Tea shops were founded with an average product price, but the taste and service are not inferior to high-end brands
Besides tea and coffee drinks, which are Phuc Long's strengths, this brand has a diverse menu with many different drinks such as juices or iced drinks at different prices to meet the different needs of customers This shows that Phuc Long Coffee & Tea is not inferior to foreign and domestic brands Besides, services in Phuc Long Coffee & Tea are developed in two forms:
- The first is "Take away express" which is a form of takeaway coffee at branches with mid-range facilities, or at kiosks in combination with Vinmart+ to serve the group of middle-income customers The products' prices range from 30,000 to 40,000 VND Some basic beverages can be mentioned such as iced, hot milk coffee, peach tea
- The second is "Take away house" which is a form customers can enjoy the typical coffee flavor and many other drinks of Phuc Long at large Phuc Long Coffee & Tea branches Prices range from 40,000 to 65,000 VND, serving high-income customers Phuc Long's pricing strategy was launched when the brand put itself in the customer's position and asked questions: How much does it cost to experience at a shop like this? Is the amount of money the customer spends reasonable? Is the cost commensurate with what they are entitled to? Can they afford to go to the shop often?…The great thing about Phuc Long is that it targets a wider range of customers, from commuters, tourists to students who prefer to experience luxury cafes with localized prices In short, the pricing strategy used by Phuc Long is correct, customers can experience a spacious, comfortable and sophisticated space - not inferior to foreign "big guys" like Starbucks or The Coffee Bean with only the price of 30,000 - 60,000 VND That is the reason why many young people become loyal customers of this chain of stores
Distribution strategy
In a typical sales cycle, distribution embraces three interrelated elements:
+ Information and promotion flow: mainly advertise at Phuc Long's official website, Phuc Long Fanpage, and advertisements on delivery intermediary apps to give information about products, promotions, product prices to consumers
+ Negotiation flow: when customers want to come and enjoy products and services directly at Phuc Long Coffee & Tea stores, they have to queue to order Payments and customer orders take place almost simultaneously The cashier will then issue an invoice with your order number When your order number is reached, the staff will call you to the counter to pick up the food or drink you ordered at the cashier
+ Product flow: Phuc Long cooperates with intermediary delivery apps such as Grab, Baemin, Now to bring products and drinks to consumers when consumers can't come and use them directly at the shop Besides intermediary delivery apps, Phuc Long Coffee & Tea shops only sell directly at the shops because drinks cannot be stored and transported to agents or retailers
The distribution channel in service is the coordination between suppliers, intermediaries, and customers in performing services with the support of technical means through purchasing and selling activities In a service context, distribution channels are usually short, direct channels Therefore, Phuc Long Coffee & Tea shops have also been using the direct sales distribution channel model so that customers can experience the maximum product and service quality that the shops want to bring to customers The brand wants to bring customers not only drinks or dishes but also the experience of the space, the layout of the shops, the communication attitude of the staff towards customers In addition to selling directly at Phuc Long Coffee & Tea shops, from January 12, 2021, Phuc Long also launched another model of Phuc Long Kiosk This is a new model, new space, new experience Customers can both shop at Vinmart stores, and buy Phuc Long's delicious drinks at the order counter located inside the Vinmart stores
Figure 4.2: Phuc Long kiosk model at Vinmart New City - Distrisct 2
Figure 4.3: The dense order of the Phuc Long Kiosk model is arranged inside Vinmart
Besides distributing products and services directly at Phuc Long Coffee & Tea stores, Phuc Long also clearly realizes that "Delivering Services in Cyberspace" or ordering through intermediary and electronic apps is increasingly popular Especially for office workers, students because the product price is better, convenient, easy to find, suitable for their study and working time Especially in the digital transformation in industry 4.0 and the outbreak of
16 the Covid-19 epidemic, Phuc Long has developed “ Delivering Services in Cyberspace” more to meet customers' needs, moving from high-contact to low-contact Specifically, in addition to selling directly at the stores, Phuc Long also links with intermediary partner apps and delivery services that allow customers to order products such as Beamin, Now, and Grab food when customers are unable to come directly to the stores
Depending on different market segments, it is necessary to have different product/service distribution strategies accordingly Because the target customer group of Phuc Long Coffee & Tea is from office workers, foreign tourists traveling in Vietnam to dynamic young people who are students So in big cities like Ho Chi Minh or Hanoi, it is easy to find Phuc Long Coffee & Tea shops often located in office buildings, foreign language centers, near schools, in the city center, and commercial centers Also, many Phuc Long Coffee & Tea shops are located at places that are easy to find, have a beautiful view, and even very close to competitors such as The coffee house, Highland coffee
Figure 4.4: Phuc Long Phan Xich Long branch Phu Nhuan district –
Phuc Long Coffee & Tea has opened 82 stores covering all major cities: the most in Ho Chi Minh City, the rest in Hanoi, Lam Dong, Can Tho, Binh Duong, Da Nang, And branches Phuc Long Coffee & Tea is still being created from Phuc Long trading production company limited Currently, the company does not have a franchise policy
The opening time of Phuc Long Coffee & Tea chain is quite early, and the closing time is late (opening time is from 7 am to about 11 pm during the day) to help customers easily enjoy and use Phuc Long's services at the times most convenient to them Specifically, office workers who go to work can visit the shops before work or after work Or young people like students need a space to create, study and work after school.
Figure 4.6: Information and Physical Processes of the Augmented Service Product
Figure 4 5: Number of stores of Phuc Long and competitors
Some supplementary services can be provided to the customer by other means, without direct communication In Figure 4.1, 5 elements: information, order-taking, consultation, billing, payment are supplementary services that Phuc Long Coffee & Tea provides to customers electronically Everything from advice on choosing drinks, receiving orders, invoicing, payment, and information is done on intermediary apps such as Grab, Baemin, Now Or staff at the stores call customers directly when customers order
The option for service delivery that Phuc Long Coffee & Tea chooses to serve customers is
“ Customer goes to service organization” Phuc Long hopes and encourages customers to come directly to Phuc Long Coffee & Tea chain stores Only then, customers can feel and experience the maximum of service, service attitude of staff, equipment and facilities, space that Phuc Long wants to bring to customers For example, when a customer is sitting near the window, the staff on the floor will automatically ask the customer's permission to pull down the curtain so that the customer does not get uncomfortable with the sunlight and affect the customer's experience at Phuc Long Coffee & Tea shops Such things will prove that Phuc Long's choice of the above distribution option is appropriate because if another option is chosen, the products can also reach the customers through shipping intermediaries, but the customers' experience and evaluation of service quality will not be as maximum as Phuc Long wants.
Promotion strategy
+ Facebook marketing: Phuc Long's fanpage has 423,174 followers with attractive and interesting posts about promotions, articles about new product launches, new projects or wishes special occasion posted in prime time slots suitable for young people + Website: Phuc Long has a beautifully designed, very attractive website Besides, using tools like Google AdWords makes it easier for brands to reach customers
+ Instagram: With more than 8,000 followers and just like Phuc Long Coffee & Tea Facebook Fanpage, interesting articles about promotions and many articles are constantly updated
Public Relations (PR): The use of corporate communication methods and activities to enhance understanding and build relationships with customers This process is carried out as a long and continuous process By organizing press conferences, product introductions, customer conferences to attract the attention of the press and the public
Right from the early days, Phuc Long has always taken people as the center of every decision and product Phuc Long believes that a happy coffee space starts with happy people and makes every effort to bring the happiest things to this society and life Moreover, Phuc Long hopes to be the place to lay the first foundation to help every person, regardless of gender, religion, background, background, feel happy, happy, and proud of themselves, confidence and effort to pursue their life dream
Some projects are done by Phuc Long
+ Meaningful Christmas 2012 project: On December 22, through the program of selling drink vouchers to raise funds for charity "Meaningful Christmas 2012", Phuc Long has raised more than 70 million VND to help poor students at Long Phuoc primary school in Long Phuoc commune, Ben Cau district, Tay Ninh province
+ Mid-Autumn Festival 2016 with children: Phuc Long donates moon cakes to disadvantaged children in all districts 1, 3, 5, 7, 8, Phu Nhuan, Binh Tan, Binh Duong, with the desire to contribute a small part of their responsibility to help the community around where Phuc Long is doing business
+ Accompanying Lawrence S Ting Charity Walk 2014: Lawrence S, Ting Charity Walking Program is a charity program that contributes to support the poor in the City to have a warmer Tet The program is organized annually by the People's Committee of District 7, People's Committee of District 8, People's Committee of Nha Be District, People's Committee of Binh Chanh District, and Phu My Hung Development Co., Ltd + Phuc Long Gift Card: Phuc Long Coffee & Tea launched Phuc Long Gift Card (Phuc Long Prepaid Card) with denominations of 200,000 VND, 500,000 VND, 1,000,000 VND In addition to providing customers with a fast and convenient form of cashless payment, applied at the stores of Phuc Long Coffee & Tea system, Phuc Long Prepaid Card is also a convenient gift and meaning for friends and relatives on special occasions
Figure 4.7: Phuc Long Gift Card program
- Promotion activities and customer gratitude
Promotions are activities of businesses to stimulate and motivate customers to increase their purchases of products and services by giving customers certain benefits For example, free trial of products, discounts, free gifts, winning coupons Phuc Long is no exception
+ Promotion activities of Phuc Long: Many attractive promotions, valuable vouchers with dense frequency
● Create Membership Card, Receive Attractive Gifts:
When creating a membership card and with a bill from 65k, it is easy to own a Phuc Long Membership Card and enjoy the following incentives: Annual Birthday Gifts, Accumulation and get 1 free glass of water every time customers reach 100 points, upgrade and enjoy 15% discount on the total bill during 365 days
Promotion period: valid until the end of August 5, 2021
Promotion form: Customers will immediately receive a voucher of 20k to enjoy Phuc Long tea and coffee with fresh and premium taste when shopping at Vinmart+
Promotion period: from August 31 to September 4
Promotion form: Customers will immediately receive 1 free drink when buying 3 drinks, 2 free drinks when buying 5 drinks The program applies when customers order via Grab app
● Phuc Long 50% off to celebrate Black Friday:
Promotion period: In 2 days November 28 and 29, 2019
Promotion form: when customers come to any Phuc Long store, buy 01 large drink in the Special Tea group, they will receive a 50% discount for the second large size drink in the same group
Form: when visiting the nearest Phuc Long store, customers will receive Free Upsize offer for all Phuc Long Membership cardholders In addition, customers also receive 1 set of 2019 red envelopes or 1 Phuc Long multi-function holder for VIP & Diamond Membership cards
● Appreciate to loyal customers Free upsize: –
Form: Customers receive a Free Upsize offer when buying drinks This is a small gift from Phuc Long for loyal customers, the program "FREE UPSIZE" as a gift to thank Phuc Long to customers for accompanying them during the time
● Offers based on card class
Membership Card Class: By registering for a membership card, the customer automatically becomes a member of the "Member Card" class of Phuc Long Offer includes a free medium drink of the customer's choice, within the limit and option of Phuc Long providing customers for every 100 accumulated points and receive a free cake fee in the month of the customer's birthday
VIP Card Class: When customers accumulate 400 points in a 12-month period, they will be upgraded to "VIP Card Class" In addition to the same incentives as the membership card, the VIP card class will receive a 10% discount on beverages and cakes, and a 5% discount on other Phuc Long products
Diamond Card Class: When customers accumulate 1000 points in a 12-month period, they will be upgraded to "Diamond Card Class" Customers will enjoy privileges of membership and VIP card class along with a 15% discount on beverages and cakes, and a 10% discount on other Phuc Long products In addition, customers may receive additional offers or special invitations to participate in events organized by or for Phuc Long
Phuc Long has a team of professional, dedicated, and hospitable sales staff Phuc Long's sales staff have been trained in approach and personal selling skills to manage customer relationships Phuc Long employees are responsible for understanding the needs of customers and finding ways to meet those needs by providing suitable products or services
Service processes management
From the customer's perspective, the service process reflects the experiences, feelings, and values they receive when using the service From a business point of view, the service process is a multi-step system, designed to run smoothly, to meet customer needs The following Flowchart and Blueprint diagram will clarify the process of using the service at Phuc Long Coffee & Tea shops The difference between these two diagrams is that the Flowchart only describes each activity and experience in the service from start to finish from the customer's point of view Blueprint is more detailed and complex, describing specifically how the service process takes place Not only fully showing the steps customers go through in the process of using the service, but Blueprint also includes business elements such as operation, the interaction between frontline staff and customers, actions of service staff, and the connection between the frontline department and the backstage, to ensure that the service always runs smoothly according to the service value that Phuc Long Coffee & Tea sets out
Figure 4.9: The flowchart of Phuc Long Coffee & Tea
Figure 4 10: The blueprint of Phuc Long Coffee & Tea
Below is the general process that we can see when a customer comes and experiences at Phuc Long Coffee & Tea chain stores:
+ Valet parking: Usually, at stores with large areas and big parking spaces, there are 2 to
3 security guards to look after the stores and vehicles for customers Stores with a narrower area have a security guard
+ Order drink and food: At the bar, there are about 2 to 3 staff to receive orders depending on the number of customers crowded or sparse Phuc Long arranges a large menu board in front of the bar so that customers can easily observe and the ordering process goes more smoothly In addition, behind the bar, there are billboards for new products, bestseller products, or frequently used products to attract customers' attention, suggesting to customers who are confused quickly make the final choice
+ Bill payment and bill presentation: The payment takes place almost at the same time as ordering, this process is almost common in most cafes to save customers time waiting for payment after eating and drinking and easily control the payment of customers There are many forms of payment applied at Phuc Long Coffee & Tea such as cash payment, credit card or electronic wallets Immediately after payment, the staff will issue an invoice to the customer In some shops, customers are given a service vibrating order card This card vibrates to notify the customer to come to the counter when the ordered item is ready However, in some other shops, the customer will be asked for the name, and after the ordered item is ready, the staff will read the customer’s name out loud for them to pick up their item
+ Find a seat and wait to receive food or drink: While the staff prepares the dishes or drinks, the customer will optionally choose a seat they feel comfortable and wait to get the dishes or drinks when the card vibrates or be called
+ Enjoy drink, food and use restroom: After receiving the dishes or drinks and bringing them back to the seat, customers can comfortably enjoy drinks or dishes while chatting with friends In addition, customers can also study, work or use the phone if they go alone Moreover, customers can use the restroom if they need The restrooms at Phuc Long Coffee & Tea shop are very modern, clean, and fully equipped
+ Leaving: Customers will receive a farewell greeting from the staff at the door, then customers return to the parking lot to get their vehicles under the support of the security guard and leave
Physical evidences management
Because the characteristics of the service industry group are abstract, businesses need to have
"tangible" evidence so that customers can easily imagine the service provided That is an important factor affecting customers' expectations and perceptions of the brand's service quality Physical Evidence plays an important role from packaging, equipment supply, creating a difference Real-life customer experiences allow businesses to build a specific brand image They can manipulate consumer perception so well that their brands appear first when an individual is asked to name a brand in their niche or industry
Physical Evidence is divided into two environments including external and internal
- Design: Looking from the outside, the facade of Phuc Long Coffee & Tea uses glass to create a luxurious feeling combined with the main green tone of the shop, mixing a little yellow of the lights All of those bring a unique character about Phuc Long Coffee & Tea brand in the eyes of customers
- Logo: Phuc Long's logo is designed with two main colors, blue and white Although it has undergone many logo changes, the brand still retains its original value Choosing the image of a coffee cup to include in the logo and the green color of the tea created a logo that feels fresh, bright, and has a strong appeal.
- Parking: Parking lots are arranged in front of Phuc Long Coffee & Tea shops, next to or in the basement There are branches in central districts such as Dinh Tien Hoang branch, district 1, with two spacious parking lots, meeting customers' needs However, at branches with less space and peak hours, the parking lot at those branches will be full, which makes a large number of customers have to park their vehicles in the basements of apartment buildings or commercial centers Like at the Pho Quang branch,
Figure 4 11: Phuc Long Coffee & Tea Logo
29 when the parking lot of the shop is overloaded, the security guard will guide customers to send their vehicles to the basement of the Garden mansion apartment
- Location: It is easy to see that all branches of Phuc Long are located in very beautiful places such as in the city center like District 1, District 3, District 7, Phu Nhuan District, Tan Binh District, crowded 3-way intersection and 4-way intersections or located in large commercial centers Most of Phuc Long's branches have two facades and are quite large In addition, the brand has made optimal use of the space and view outside the shops to bring great experiences to customers.
Figure 4 12: Phuc Long Dinh Tien Hoang Branch, District 1
(source: Phuc Long Coffee & Tea Facebook Fanpage)
Figure 4 13: View at Phuc Long Pho Quang branch, Tan Binh district
+ Color: Phuc Long uses two main colors that are green and yellow Yellow brings antiquity and elegance combined with green to create a feeling of warmth, and freshness
+ Furniture: Tables and chairs in Phuc Long are mainly made of wood with various designs such as long rectangular tables for groups of friends who come to study Positions such as in the corner, close to the wall, or the shop partitions places with different square and round tables that can sit from one to four people to meet different needs of customers Windows and doors made of glass create an airy space, helping customers not feel stuffy
+ Bar: In Phuc Long's bar area, architects use wooden materials with different brown colors to create a pleasant feeling, blending with nature but no less modern Next to the bar, the shops also display some of their tea and mug items to make an impression in the customer's mind and help increase sales
+ Decoration: Images of nature, related to tea or coffee are included by Phuc Long Coffee
& Tea to create a feeling of closeness to nature for customers, affirming the value that
31 the brand brings In addition, Phuc Long Coffee & Tea shops display many potted plants to help create a fresher and more comfortable atmosphere
+ One of the remarkable points of Phuc Long Coffee & Tea is that there are many charging sockets at each table Phuc Long knows a large number of customers come here to spend time studying and working a lot, so their laptops and phones need to be fully charged That is probably also the feature that customers pay attention to and give their top priority to choose Phuc Long Coffee & Tea over another nearby coffee shop
- Space: The space at Phuc Long Coffee & tea with the main color tones of green and yellow brings a feeling of both classic and luxury to customers along with modern and youthful designs that have attracted a large number of customers to choose Phuc Long Coffee & Tea instead of other tea and coffee shops The electric light system at the branches is designed with yellow-brown light, highlighting the characteristics of Phuc Long Coffee & Tea Because customers come here to study and work a lot, the music of the shops is always relaxing and calm to create a feeling of relaxation and concentration suitable for customers
+ The dispensers used by Phuc Long are high-class coffee machines of the Astoria line and are located in the area behind the order counter where customers can see them create a professional and high-class brand in the eyes of customers
+ Phuc Long uses paper cups or plastic cups depending on the type of drink that customers order
Figure 4 14: Some designs of Phuc Long Coffee & Tea
+ Using air conditioning, electronic billboards running ads bring customers a sense of convenience and modernity
+ Phuc Long uses two colors corresponding to the main products of the company Those are the green of the tea and the black of the coffee This combination is not too new, but it has a highly attractive effect
+ The large and eye-catching Phuc Long logo is neatly printed on the left chest of the black polo shirt, bringing high efficiency to promote its brand Along with that is the combination with a short green apron and a black cap with a logo printed to create an overall look that is both classic and modern.
People management
Cashier Bartender Service staff Security guard Shipper staff
Figure 4 15: Human resource organization model at Phuc Long Coffee & Tea
Table 4.2: Positions and duties of each position at Phuc Long Coffee & Tea shops
+ Responsible for the business of the store
+ Responsible for revenue; employee management; customer service; issues related to food hygiene and safety; store operation
+ Plan weekly work and submit reports to the area supervisor
2 Shift supervision + Operate the entire store during the assigned shift
+ Check and supervise the operation of the store during the assigned shift under the company's standards
+ Carry out consulting; introduce promotions; order to the POS machine; collect money from customers and give a change to customers
+ Ensure revenue in shifts, report revenue
+ Prepare drinks for customers according to the process and recipe
+ Ensure the hygiene situation of the bar area; the dispensing counter must always be clean, under food hygiene and safety standards
+ Sell tea/coffee products; clean the store; support customers
+ Stand on duty in the area for preparing drinks, product area, upstairs area
+ Tally of goods and products
Watch over customers' vehicles and assist customers in moving their vehicles
Deliver goods and products of the store to customers by motorbike within 3km from the store
4.7.2 The people factor determines service quality
Service employees are crucially important The people that customers meet and talk to first are frontline employees, so frontline employees are considered the face of a business In addition, the frontline is an important source of differentiation, competitive advantage and an important driver of customer loyalty Understanding the importance of the "People" factor, Phuc Long Coffee & Tea always focuses and pays attention to this factor
Phuc Long Coffee & Tea shops always select employees with the most suitable skills, styles, or personalities for different jobs At the same time, the employees hired by Phuc Long Coffee
& Tea are always consistent with the company's core values and culture
After being recruited, employees will participate in the company's training courses on the necessary skills to ensure the best service quality for customers For the candidates who have received the application and depending on the vacancy, they will be trained by the company within 3 days before starting work The right of all employees in Phuc Long Coffee & Tea system is to participate in the company's training courses
The policy on salary and bonuses is very important because it can determine whether the employee's commitment to the business is strong and long-lasting In addition, it also affects employees' attitudes towards work such as whether they are happy, dedicated to working or not The following are the salaries for some positions at Phuc Long Coffee & Tea:
+ Store manager: from 8 million to 12 million VND/month (not including allowances, revenue bonus)
+ Shift supervision: from 7 million to 9 million VND/month
+ Cashier: from 6 to 8 million VND/month
+ Bartender: from 6 to 8 million VND/month
+ Service staff (full time): from 4.5 to 5 million VND/month
+ Service staff (part-time): from 17,000 to 21,000 VND/hour
+ Shipper staff: from 6 to 7 million VND/month
In addition to the monthly salary, employees are also rewarded with bonuses if the sale reaches the target depending on the store where they work That will help employees be motivated to do their jobs better and care more about customers In addition, the salary on holidays and Tet holidays is increased by about 3 to 4 times, and the 13th-month salary is added Not only that, when working for a long time at Phuc Long Coffee & Tea, employees can be promoted to a higher position in the working department
+ Create a good working environment for employees, encourage employees to contribute ideas to the business
+ Phuc Long buys health insurance, social insurance, life insurance for all employees (except part-time employees)
Each store has a manager and a supervisor who takes turns to manage the store, in addition to an area manager Phuc Long Coffee & Tea shops always require employees to:
+ Serve, take care and establish a good relationship with customers
+ Follow the recipe and maintain product quality
+ Comply with the company's working regulations
+ Complete the assigned work well, report honestly
- Develop relationships within the company and build company culture
Phuc Long Coffee & Tea encourages employees to develop a relationship of solidarity and attachment within the store, with support between departments
Phuc Long Coffee & Tea service culture is enthusiastic - thoughtful - dedicated Therefore, the staff of Phuc Long Coffee & Tea always have a professional demeanor, a cheerful and radiant face, a smile on their faces When customers enter the shop and proceed to the order counter, the staff welcomes them with a friendly and welcoming attitude During the process of enjoying drinks at the store, there will always be staff ready to respond to all requests and answer all customers' questions On the other hand, customers still complain about the attitude of some security guards in some stores That is those security guards are not friendly and not enthusiastic to assist customers in moving their vehicles.
Evaluation & recommendation
Services product strategy
+ Phuc Long's product quality always brings a stronger flavor than other brands, especially tea products
+ There are many choices for customers on the menu of the shops, especially tea products such as oolong tea, peach tea, litchi tea, That is the strength of Phuc Long compared to other brands in terms of product diversity
+ The foods included in the combo or sold individually such as bread have helped the brand leave an impression Because most customers spend many hours at the shop to study and work, their need for food and drink is necessary
+ Phuc Long cooperates with e-wallets like Zalopay to bring many great incentives and attract a large number of customers
+ Phuc Long Coffee & Tea has performed quite well the services product strategy Currently, the services product strategy of the brand has no disadvantages.
Pricing strategy
+ Pricing strategy in the mid-range segment, suitable for a wide range of audiences, helps Phuc Long maximize the number of customers
+ There are many different prices for a variety of products to help customers have many suitable choices
+ The applied pricing strategy is fully consistent with product quality
+ The mid-range pricing strategy helps Phuc Long quickly position itself in the highly competitive market, while also limiting the penetration of competitors
+ The prices of od products such as cakes are still relatively highfo
+ Need to adjust the price of food products, or offer many preferential discounts when buying food products with drinks
Distribution strategy
+ Location of branches is easy to find
+ The Kiosk model is quite convenient for consumers to buy and take away because the number of customers will be spread evenly at all Phuc Long Kiosk located at Vinmart, making waiting time for orders quickly
+ Linking with intermediary apps, convenient for consumers to order when they don't have time to enjoy drinks at Phuc Long Coffee & Tea shops
+ The number of branches and stores is less than other competitors
+ Phuc Long does not have a franchise policy.
+ Continue to expand more business models in more provinces
+ Should have more franchise policy to expand the number of stores nationwide
Promotion strategy
+ Phuc Long's promotions are attractive and have a fairly thick frequency
+ Phuc Long's sales staff work professionally
+ Brand information as well as promotions are updated clearly and quickly on Phuc Long's social networking sites
+ Phuc Long's PR activities are doing quite well
+ There are many projects on special occasions of the year
+ Phuc Long does not focus on advertising on television, newspapers
+ Less participation in sponsorship of sports and arts events
+ Direct marketing activities such as mail or email marketing, door- -door marketing, to phone sales
+ Phuc Long should advertise in both social networks and media, not just focus on advertising on social networks
+ Actively participate in sponsoring sports, music, and arts events
+ Phuc Long should strengthen its direct marketing activities
Service processes management
+ The self-service model optimizes the limitations of the traditional service model, the big point is to avoid wasting resources because the old model forced to hire many employees
+ The form of payment takes place right after the customer places an order to help the service process go faster, avoid the situation of customers waiting for payment after finishing the foods and drinks, and also reduce the waste of travel time for staff when they have to go to each customer's table to collect money
+ The service vibrating order cards have been applied to help regulate the flow of customer service smoothly, without interruption because the staff has to go to each table to ask what customers want to drink or eat At the same time, with these service vibrating order cards, customers will save more time because they will actively order drinks or foods as soon as they enter the store In addition, there are areas where customers sit far away from the service counter, upstairs or in some hidden corner, then the staff will be quite confused when delivering drinks or foods because they do not know where customers are sitting
+ The preparation time is quite long
+ When in a crowded situation, it is difficult for staff to control the process of preparing and delivering products to customers There is still confusion and wrong dishes for customers
+ When the store is crowded, the store's hygiene is not guaranteed because the staff has not been able to clean up after the previous customer left
+ Should allocate more staff at peak hours to avoid errors affecting the process of using services and products of customers
+ Apply modern equipment to the preparation process or enhance the bartending skills of staff through courses and training courses to minimize the preparation time to avoid customers waiting too long
+ Receive comments and feedback from customers to handle and fix errors that still occur in the process of customers using products and services at Phuc Long Coffee & Tea shops.
People management
+ Attractive salary and bonus policy, specifically the salary for each position at Phuc Long Coffee & Tea are quite good and equal to the general level
+ Having good benefits policy for employees
+ Dynamic working environment with many career advancement opportunities created fairly for members
+ Thorough recruitment and training policy
+ Creating opportunities for employees to contribute ideas and encourage unity in the working environment
+ The attitude of security guards in some branches is not friendly and not enthusiastic to help customers in moving customers’ vehicles
+ To limit the unfriendly attitude and failure to fulfill the duties of some security guards, Phuc Long Coffee & Tea should have an appropriate sanction policy For example, if the security guards violate more than three times, they will be fired In addition, it is necessary to stipulate rewards and punishments for those who detect security guards with the above symptoms to avoid the situation that the employees cover for each other
In addition, the following measures can be used:
⬧ Install cameras to check how the security guards work
⬧ Secret customers to check the security guards' attitude and way of serving customers.
Physical Evidence
+ The number of people studying and working in Ho Chi Minh City is very large and the need to choose a place to focus on achieving high efficiency is very necessary for them And Phuc Long has met that need with a cool and airy space
+ The shops' design is modern, the open space always creates a comfortable feeling for customers when sitting at the shop
+ At each table, it is always designed with a power outlet below,convenient for customers when they need to charge laptops, tablets, phones,
+ There are many options of tables and chairs such as single tables for two people, long tables for large groups,…
+ Many branches of Phuc Long are facing the problem of lack of space for customers
The situation that customers come to the shop and have to leave because of running out of seats happens often in small branches, especially on weekends
+ Besides the situation of running out of seats for customers, there is also the problem of
Phuc Long's parking lot There are many cases customers have to go to another shop or have to find a parking space for a fee because the parking lot of Phuc Long Coffee &
Tea shops are full That gives a feeling of dissatisfaction about the service of Phuc Long
+ If a branch often has a shortage of seats, Phuc Long should consider expanding that branch to meet the needs of customers and increase revenue
+ Cooperate with other parking lots to keep vehicles for free for customers
First, the writer gave a brief introduction about the reason for choosing the topic, study objectives At the same time, an overview of Phuc Long and Phuc Long Coffee & Tea commercial production limited liability companies is introduced to help readers understand more about the study object The identification of the object and study objectives helps to achieve the most effective study Next, the writer gives basic and general information about the Vietnamese coffee shop chain market to help readers understand more about this market
In this section, direct and indirect competitors of Phuc Long Coffee & Tea are also highlighted
In section 3, the author identified the target customers of Phuc Long Coffee & Tea and discussed the brand's service positioning strategy Next, the writer applies service marketing theory to analyze the marketing mix 7P activities of Phuc Long Coffee & Tea that the brand has been implementing in recent years, thereby finding out the advantages and limitations of each strategy At the same time, propose solutions to improve the marketing mix strategy 7P of Phuc Long Coffee & Tea to help the brand develop further in the future.
Lovelock, C., & Wirtz, J (1984) Services Marketing: People, Technology, Strategy
(7 th ed.) Boston, MA: Pearson Education
Lovelock, C., & Wirtz, J (2008) Essentials of Services Marketing (3rd ed.) Boston, MA: Pearson Education
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Khuyến mại Retrieved from: https://www.phuclong.com.vn/khuyen-mai