Service marketing Highlands coffee

Báo cáo môn Marketing dịch vụ về Highlands coffee

Lecturer: Mr Tran Tuan Anh Tutor: Mr Tran Tuan Anh Tut 1 BA10

Group members:

Hoàng Diệu Linh 0804000055

Tô Thanh Loan 1004000044 Phạm Thị Yến 1004000101 Phan Thị Hoàng Yến 1007040216

Hanoi University

HIGHLANDS COFFEE

Service Marketing Report

In the process of doing this assignment, we highly appreciate the contributions and suggested ideas of many people Without their help, we could not have accomplished this report.

Our great gratitude firstly goes to Mr Tran Tuan Anh – our lecturer and our tutor of Service Marketing for their dedication and enthusiasm in teaching and guiding us in every single lecture and tutorial All the interesting examples and precious instructions they provided have helped us very much in finishing our assignment

We would like to express my thankfulness to staffs and customers of Highlands Coffee for their co-producing our service experiences and their helpful information.

We also thank our tutorial-mates in Tutorial 1 – BA10 for all their meaningful helps and timely exchange of information, as well as knowledge relating to the course.

Finally, we also owe a great deal to the authors of many websites and books, especially the author of our current text-book Services Marketing – Lovelock,C., Patterson,P., Walker,R for providing us fundamental concepts and techniques which are really necessary for the completion of this assignment.

Executive Summary

Highlands coffee is a brand of Viet Thai international Joint Stock Company (VTI) and was established by David Thai with the objective is the leading high-grade retail industry in Vietnam Highlands coffee not only gives the customers the feeling of traditional value in Vietnam but also make them experience the part of modern active lifestyle Especially, the shop located at number

6, Nha Tho street, Hoan Kiem, Ha Noi is one the famous shop of Highlands coffee attracting many customers from Vietnamese to foreigner According to that shop, our report draws attention

to the external factors including the situation, market description and buyer behavior and finds out how these factors affect Highlands Coffee’s strategy; particularly positioning strategy, service blueprint, physical evidences, pricing strategy, promotion strategy and internal marketing

Table of Contents

1 Situation analysis 1

2 Target market description 2

2.1 Highlands coffee’s target customers 2

2.2 Customer expectations regarding service performance 2

3 Buyer behavior 3

3.1 Customer’s perceived risks and strategies 3

3.2 Customers’ perceived benefits, motivation & involvement 3

3.3 Level of customer-provider interaction 3

3.4 Services description 4

4 Positioning strategy 4

4.1 The place the firm currently holds in customers’ mind 4

4.2 The place the shop wants to hold 5

5 Service blueprint 5

6 Physical evidences 7

6.1 Logo 7

6.2 Store decoration 8

6.3 Staffs 9

7 Current Pricing Strategies 9

8 Promotion strategy 10

9 Analysis of service quality, satisfaction, perceived value and customer retention efforts 11

10 Internal marketing 11

11 Conclusion 12

References 13

Appendix 14

Viet Thai International Joint Stock Company (VTI) was established in 1998, the main activities are in the service sector and coffee production With the rapid development, VTI has owned about 60 coffee shops with a famous trademark Highlands Coffee all over the country Proud to be a Vietnamese brand, Highlands’s philosophy is to combine the modern world with traditional, classical values of Vietnam

1 Situation analysis

In this quick-changing world, along with the busy working pace and dynamic style, the way Hanoi people enjoy life is much different from the past Consequently, the service section, includes coffee shops, has many improvements to fit this trend

According to AIM research about coffee drinking habit, 65% Vietnam consumers use coffee 7 times a week, men account for higher rate (59%) Regarding instant coffee, 21% Vietnamese consumers use it 3 to 4 times a week, female group is slightly more (52%) The rate of drinking coffee at home and outside is equal 49% - 51% Coffee shops in Vietnam can be found in every corner to create the most convenience for customers Hanoi has a huge number of coffee shops but not all cafés are attractive to everyone The most popular cafés are consistent with the unique style Hence, though quite fussy business environment, there are still many opportunities for this type of business which should be provided in a professional manner

Higher living standard leads to higher demand and expectation from customers They are willing to pay more for products that give them technical, functional, or emotional benefits Today, people coming to the cafés is not just for drinking but to seek interesting experience with impressive space, beautiful design and professional service delivery As a result, adding determinacy attributes to customers is extremely essential When dynamic, modern trends overflow into Hanoi streets, coffee shops gradually renovate in attempt to meet demand diversity And specialization is a rising trend in this industry

Some coffee shops bring the comfortable atmosphere by the decorations Instead of formal tables and chairs, they use only small and short tables with many buffers for sitting Some others are designed in ancient Hanoi style or country style Bar-coffee is a good choice for those who are interested in live music They can also give some shows Other kinds of coffee shops are “Cat”

café like Ailu Cat, game coffee (Dice) and “Book” café such as Tùng book, Lollybooks, AIM, Sách which are a mix of coffee serving with another utility

It can be seen that the market for coffee shop is becoming more and more competitive, and threats to Highlands café come from both their direct and indirect competitors

Highlands’s target customers are 18 to 45 year-old people Clearly, its core rivals are other luxurious cafés which serve the same target customers like The Coffee Bean & Tea Leaf restaurant chain, The My way coffee and restaurant chain, Ibox or ILU coffee However, Highlands holds the strength of delicious coffee and good reputation

Besides, the growth of substitutes like tea shops (Lipton, Dilmah, Taiwan milky tea) or yogurt shops also raise the risk for Highlands Although these kinds of shop target customers are teenagers, Highlands and other coffee shops are still under the risk of losing customers if they cannot manage their business well

2 Target market description

2.1 Highlands coffee’s target customers

The target customers Highlands coffee has been serving are the middle class, the office staffs and the active young generation because drinking coffee here with the prestigious coffee brand helps them confirm their status in the society Moreover, Highlands coffee always focuses on creating the comfortable and exciting atmosphere for customers to enjoy coffee every day Therefore, this is an appropriate place the office staffs who want the quiet and less luxurious space to discuss with their friends and enjoy coffee with pastry-the Western style In addition, Highlands also targeting customer group are young businesses who used to study abroad so they are familiar with the style of European-American like drinking coffee at a chic restaurant that impress the style of the place they used to live Another, the customers of Highlands coffee are foreigner living and working in Vietnam

2.2 Customer expectations regarding service performance

Expectations occur at the pre-purchase stage of a service which have much affected on customers’ satisfaction evaluations To Highlands coffee, it is always evaluated as high quality coffee shop Consequently, customers who choose Highlands usually have formed this prior attitude toward this coffee shop Furthermore, Highlands also has done very well in using marketing communications Customers know Highlands through words of mouth, blogs, magazines and TV interviews Thanks to the good service quality, it aids to build a very outstanding image in customers’ mind All those things contribute to enhance customers’ expectation regarding Highlands’s service performance Before they come to this coffee shop,

they expect to receive good drinks, affirm their status and enjoy a quiet space for relaxing or talking to their friends The more expectation they have the more dissatisfied they are if Highlands can not satisfy their requirements Therefore, it is not an easy job for Highlands coffee

to please customers constantly

3 Buyer behavior

3.1 Customer’s perceived risks and strategies

When the customers going to Highlands coffee are overcrowded, there will be no longer blank tables for them and the mixing drink unit may overload which make the waiters of the restaurant serve slowly then the customers wait for them and feel anxious Moreover, Highlands is equipped the cool air so some customers sense too cold Therefore, Highlands coffee has some strategies to reduce customer risks Firstly, as the customers are crowded and the restaurant has not enough tables to serve Highlands coffee prepare additional tables and chairs to guarantee that the customers will have enough seats However, if customers are overcrowded with large numbers and the Highlands does not have ability to serve, the Highlands coffee does not make customers wait too long with a bad impression Therefore, the staffs are willing to notice the overloaded of the restaurant and then introduce them to other Highlands coffee at discounted price so that they

do not go to the restaurant of competitors Another, Highlands always follows the sale of drinks that were best-selling in order to estimate in case of overload Additionally, Highlands Coffee also bases on the sale of previous periods to make predictions about period that will have the largest customers to pre- mix drinks in the bottles or cups and increase the number of the staff to serve customers on the peak hours

3.2 Customers’ perceived benefits, motivation & involvement

Highlands coffee will give the precise experiences to customers when they drink coffee because it is created by finest coffee beans Whereby, they feel differently from other coffee shop because of combining the quintessence of the modern world with the charming and traditional values of Vietnam Especially, Highlands creates the comfortable, cheerful atmosphere, warm style of service, friendly smile and enthusiastic of staffs to customers

3.3 Level of customer-provider interaction

Since coffee shop services belong to high contact that involves much contact between provider and customers If customers have any problems or complaints, most of them will be solved through face to face So, there is an implication for Highlands coffee that building up a good team to solve the problems that happen at times

3.4 Services description

According to four characteristics of a service, Highlands coffee’s service can be described in terms of intangibility, heterogeneity, perishability and inseparability Firstly, to intangibility feature, customers do not obtain ownership of the drink or food they order What’s more, different customers may perceive Highlands’s services in different levels of performance quality Since the quality of services are varied by many factors, not only originating from customers themselves but also from employees Maybe one employee is very gentle or helpful in answering the customers’ complaints but another may be arrogant or unhelpful Those factors make it hard for Highlands to control their quality and offer a consistent service In term of perishability feature, in time when the demand of customers is very high, normally it’s hard for them to go into Highlands coffee since the shop uses up all their capacity and no vacancy A very important point is that customers are a part of the service performance When Highlands coffee provides services, customers also need to take part in process by ordering the drinks and cakes

4 Positioning strategy

Clearly drawing up the positioning strategy at the very first stage of developing a business project plays a critical role in enhancing the business success The positioning strategy focus on the two important questions: which place the firm is currently on the customers’ mind and which place they want to hold on the market

4.1 The place the firm currently holds in customers’ mind

Interviewing customers in Highlands Coffee shop and collecting judgments from many forums, we found out that in customer’s mind, Align offers a rendezvous, a good coffee and a beautiful view Located at the first floors of Asian Tower, Highlands Coffee is an ideal place for officers coming during their time break or even for business meeting During our interview time

we also took notice that nearly half of the customers were the youngster, which is rare comparing

to other Highlands coffee shops Phong, a young customer explained that because this Highlands coffee shop is located on the centre of the city, it would be more convenient to him to meet his friend here The supplementary services such as toilet, music and food are also highly rated (Foursquare, 2012)

However, there are many complaints regarding to the service quality at Highlands coffee 6 Nha Tho, mostly about the long waiting time or the noise “The serving is too slow”, “I normally have to wait about half an hour to enjoy my coffee”, “This place has the most annoying blender machine on earth”, said the customers

From some information from customers that the reporters collected during the shop visit and websites, it can be seen that Highlands Coffee shop is really a special coffee shop to customers,

since they offers high quality core product to customers and has the variable supplementary services; however they needs to professionalize the staff to build better image on customers’ mind

4.2 The place the shop wants to hold.

Highlands Coffee Shop positions itself as a high price, high quality coffee shop The shop owners want to emphasize that, the high price means high service quality as well Since customers are enjoying a more special service, so they should also pay a higher price for what they are getting

5 Service blueprint

Highlands Coffee’s service is of high contact one Almost activities are visible to the customers Business is done through face to face communication For example, the waiter brings the menu to the table, the customer read the menu then order foods or drinks, if they have any question or any request, they speak immediately These characteristics put pressures on the setting

up a clear blueprint in which stages in service production and delivery are shown The blueprint

on the operation of Highlands Coffee cafe is represented as follows:

Trung Nguyen Coffee High price Low price

High quality

Low quality

“B t” ệt”

Highlands Coffee

The coffee shop’s document determines that the customers are welcome at the gate by the guards who are required to say greeting to visitors, keep the motorbike and guide them to come into Then, the waiter staff opens the doors for customers, say hello and give the menu After taking note the order from customers, they go into the bar and pass that order to kitchen staff for preparing Then, the drinks or foods are brought to customers When customers want to go, they ask the waiter to take the bill and pay money afterward The very clear and detailed description on the tasks, duties, responsibilities make it easier and quicker to deliver the services

Highlands coffee