Joint Venture Vietnam Global Gateway VGG.Formation history ● On June 16, 1996, Trung Nguyen was established in Buon Ma Thuot city.● 1998 The first store opened in Ho Chi Minh City.● 2000
VIETNAM GENERAL CONFEDERATION OF LABOUR TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION DESIGN AN OPTIMAL MARKETING CHANNEL STRATEGY OF TRUNG NGUYEN COFFEE SUBJECT: MARKETING CHANNEL Lecturer: Phạm Văn Phát Members group Nguyễễn Thị Minh Thư - 720H1414 Nguyễễn Thị Phương Thảo - 720H0176 Nguyễễn Hoàng Yễến 720H0261 Trầần Thảo Nhi - 720H1399 Đỗễ Thị Bảo Trần - 720H1420 Mai Lý Thảo Trang - 720H1026 Nguyễễn Phúc Hưng Thịnh - 720H0182 Điễần Gia Ân - 720H0865 MAJOR: MARKETING CLASS: 01 (THURSDAY, SHIFT 3) Ho Chi Minh City, 15th December 2022 INDIVIDUAL TASKS Name Nguyễễn Thị Minh Thư (Leader) ID 720H1414 Task Evaluation - Market background and context (Part A) - Task divider - Final check - Report format - Recommendations for optimizing the marketing channels system (Part F) 100% Điễần Gia Ân 720H0865 Trầần Thảo Nhi 720H1399 - Needs and Problems identification (Part B) 100% Nguyễễn Hoàng Yễến 720H0261 - How to approach the needs and problems (Part C) 100% - How to approach the needs and problems (Part C) 100% Mai Lý Thảo Trang 720H1026 100% Nguyễễn Thị Phương Thảo 720H0176 - Key findings (Part D) - Conclusions (Part E) 100% Đỗễ Thị Bảo Trần 720H1420 - Needs and Problems identification ( Part B) 100% Nguyễễn Phúc Hưng Thịnh 720H0182 - Limitations & caveats (Part G) - Powerpoint maker 100% ACKNOWLEDGEMENT First of all, we want to express our gratitude to the faculty and administration for providing conducive learning environments that allowed us to finish this last essay To facilitate our study, the school has developed a contemporary learning environment and curriculum Our principal is Pham Van Phat He is a highly significant individual who puts in a lot of effort in the acquisition of knowledge and learning each day He gladly advised and assisted us so that we could successfully complete the essay Every time we study with him, he not only imparts knowledge from textbooks but also gives real-world examples that are incredibly helpful in the process of learning These are the emotions we had while studying with him and at the conclusion of the Marketing Channel course More than half of the course has already been finished; the last assignment is to properly complete this essay At that time, he was quite eager and committed to helping us finish it If we had any urgent issues, we would always ask for his help, and he was always willing to help You have our sincere gratitude and appreciation for it Last but not least, we'd want to thank all of the marketing program instructors at Ton Duc Thang University They are the teachers who have supported and guided us throughout our entire college experience, and that gives us more zeal to move forward and carry out the following steps outside of school Thank you, all teachers! LECTURER’S COMMENTS CONTENTS INDIVIDUAL TASKS ACKNOWLEDGEMENT A.Market background and context Manufacturer & products’ overview 2 Market overview Environmental factors 3.1 Economy 3.2 Technology 3.3 Competition 3.4 Social-culture 3.5 Government B Needs and Problems identification 4Ps Analysis 1.1 Product 1.2 Price 1.3 Promotion 10 1.4 Place 11 From manufacturer / producer’s perspectives 14 From the intermediaries’ perspectives: 15 From the customers’ perspectives: 15 C How to approach the needs and problems 17 Secondary data 17 1.1 Product situation on E-commerce platforms .17 1.2 Price Segment 18 1.3 Statistics of stores that are distributing Trung Nguyen Cappuccino products 19 Primary data via research studies 19 2.1 Necessary information 19 2.2 Data collection 23 D Key findings 30 E Conclusions 31 F Recommendations for optimizing the marketing channels system 32 Channel structure [Channel strategy] 32 Optimal marketing/distribution channel [Channel motivation] 33 2.1 Vertical conflicts 33 2.2 Horizontal conflicts 34 2.3 Solutions 35 G Limitations & caveats .36 Document continues below Discover more Marketing from: Channels 704113 Đại học Tôn Đức… 48 documents Go to course Heineken - Tình hình 38 cạnh tranh và… Marketing Channels 100% (3) Chương Môi 89 trường Marketing Marketing Channels 100% (3) Nike Marketing Mix 762 (4Ps) Marketing Channels 100% (2) Essentials of Marketing Marketing Channels None Final Report - Kênh 48 phân phối Marketing Channels A.Market background and context Manufacturer & products’ overview 58 None Copy of tổng hợp Studocu Marketing Channels Born in the middle of 1996 - Trung Nguyen is a fledgling coffee brand of Vietnam Within 10 years, from a small coffee company located in the heart of Buon Ma Thuot coffee capital, Trung Nguyen has risen to become a famous coffee brand in Vietnam a powerful corporation with member companies: Trung Nguyen Joint Stock Company, Trung Nguyen Instant Coffee Joint Stock Company, Trung Nguyen Coffee Co., Ltd., G7 Trading and Service Joint Stock Company and the company Joint Venture Vietnam Global Gateway (VGG) Formation history ● On June 16, 1996, Trung Nguyen was established in Buon Ma Thuot city ● 1998 The first store opened in Ho Chi Minh City ● 2000 Trung Nguyen was present in Hanoi, implementing the franchise model ● 2001 Successful Franchise Company in Japan ● 2002: Successful franchising in Singapore ● 2003 Trung Nguyen's G7 instant coffee brand was born ● 2008 The company established an office in Singapore ● 2012 Trung Nguyen becomes the most favorite coffee brand of Vietnamese consumers ● 2014 Trung Nguyen launches Coffee Supermarket ● 2016 Launched Trung Nguyen Legend Café – The Energy Coffee That Changes Life space, becoming the largest coffee shop chain in Southeast Asia None ● 2017 Trung Nguyen Legend officially opened a representative office in Shanghai (China); Launch of E-Coffee Model ● 2018 Inauguration of World Coffee Museum at “Global Coffee Capital” Buon Ma Thuot Field of activity Trung Nguyen Group is an enterprise operating in the fields of coffee production, processing and trading; franchise; distribution services, modern retail and tourism Vision: The great organization through serving humanity Mission: Build the unified humanity under the value system of the enlightened lifestyle for success and true happiness Core value: ● Absolute faith ● Serving community ● Supported by humanity ● Strong eco-finance Customer: The customers that Trung Nguyen Group is targeting are all coffee enthusiasts around the world, regardless of age, gender, geographic location or work income Trung Nguyen's customers are quite diverse with all subjects: from young people, traders, freelancers, unemployed to office workers, high-income people, elderly people Product: - Premium Trung Nguyen Coffee Weasel weasel coffee Legendee mink coffee Creative - Coffee Roasters Popular roasting product group Group of processed products 1, 2, 3, 4, Group of innovative products 1, 2, 3, 4, - Pure coffee beans - G7 instant coffee - Brothers sweetened condensed cream - The income level of these people is different with most of them earning less than million/month with 24 people and over million/month with 11 people → The above data shows that Trung Nguyen's customers of all ages, genders and different income levels are both potential and target customers of Trung Nguyen Trung Nguyen Cappuccino Mocha products appeal to all ages, especially those who need coffee as a refreshing drink for a long working day Part 2: Awareness With their product lines, product lines G7 Instant Coffee and Cappuccino Mocha Coffee are the two most popular products of the company with 38 and 37 votes respectively for use of Trung Nguyen’s products In terms of brand awareness, customers search for Cappuccino Mocha products with the first priority being the quality of the product, its design is said to be not too eyecatching (with 12 out of 51 votes for their design), this does not affect the quality that the product brings to the consumer With the current digital technology era, people are racing against time to make money, the use of fast, convenient and reasonable products is the top priority for their purposes Therefore, Trung Nguyen's products are increasingly attracting more consumers with the effectiveness that the product brings Evidence shows that in a survey of 51 customers, more than half of the people (31 people) choose to buy Cappuccino Mocha products because it is convenient to their use, along with the quality High product quality makes consumers ignore the design and the price is not too impressive to them The quality and usage are so good, but Trung Nguyen still has shortcomings in distributing its products to consumers Customers can easily buy Cappuccino Mocha products in supermarkets and Trung Nguyen’s stores, but on E-commerce platforms, this product line does not bring effective high ordering (20 people voted for buying products at supermarkets, 18 people voted for buying products at stores affiliated to Trung Nguyen and people voted for buying products at E-commerce platforms out of a total of 51 people) Referring to buying Cappuccino Mocha Coffee products, customers will immediately think of going to buy directly at its points of sale, sales through online form have not been fully implemented by this company in expanding its stores distribution channel With the increasing consumption and frequency of coffee use by Vietnamese, the distribution of products that are increasingly accessible to consumers is Trung Nguyen's top priority, among 51 people The average person in the survey uses coffee at least 4-5 times/month and up to 22 people will use coffee at least once a day, which leads to coffee being an important indispensable beverage in the daily routine of Vietnamese, this is an opportunity for Trung Nguyen to further develop its brand in the near future Part 3: Distribution channel development goals Regarding Trung Nguyen's distribution position compared to other stores with the same product, the company's diversity of locations has not been fully exploited The majority of customers feel that the convenience of buying products as well as the location of these chain stores is quite small, most customers will feel normal when they want to buy products of this brand - almost half of them - the number of people voted for the average level when evaluating the convenience of buying Cappuccino Mocha coffee products (21 out of 51 people) One of the important factors determining the success of a brand is the attitude and quality of service and customer care of that brand Trung Nguyen has perfected this factor very well when most of the surveyed people feel either like or dislike when having the experience of using the service at the Cappuccino Mocha coffee distribution points (49 people voted the level of Cappuccino Mocha normal to really like the service quality, customer care of Trung Nguyen coffee) Although the number of stores is sparse and not as dense as other brands, each location that Trung Nguyen chooses to set up is carefully researched, suitable for micro and macro environments, making customers happy Customers feel very comfortable when coming to these places to enjoy the company's products (35 people voted for liking and really liking the location of Trung Nguyen coffee shops) The frequency of appearance of this product line is also not appreciated when customers come to their points of sale such as supermarkets, retail stores… According to an expert, you need to appear in front of customers 21 times to be able to impress them This shows that Trung Nguyen has not really promoted Cappuccino Mocha coffee products to retail points across the country Besides that, the location of displaying Cappuccino Mocha coffee products is also a factor that should be paid attention to so that Trung Nguyen can develop distribution channels Based on a survey of 51 people, it shows that consumers quite like Trung Nguyen's display of this product (33 out of 51 people voted like and really like this) This result also shows that the display of Cappuccino Mocha coffee products has also made an impression on consumers Finally, in order to complete the goal of developing a distribution channel for Cappuccino Mocha coffee products, consumers expect Trung Nguyen to be able to promote the distribution of this product on E-commerce platforms (nearly half of consumers voted to promote distribution channels on E-commerce platforms) This also shows that, after a period of Covid 19 along with the growing development of Ecommerce platforms, consumers' shopping behavior is also gradually changing Consumers increasingly prefer to shop for products online rather than offline D Key findings Through analyzing the strategies that Trung Nguyen has used, based on the strengths, weaknesses, opportunities and challenges plus the success or failure of Trung Nguyen in the past time, the writer gives Some development directions to continue building, consolidating and developing Trung Nguyen coffee brand: First: In today's market mechanism, the application of the franchise strategy by Trung Nguyen is completely reasonable However, Trung Nguyen needs to manage franchises more effectively to regain its brand image There are several methods that can be used: ● It’s necessary to expand the diversification of product markets to increase competitiveness ● Strengthen monitoring and development of the franchise system Setting a uniform standard of image and service for franchise stores to create the unique style of Trung Nguyen coffee ● Focus on trademark registration, product design, image identification of Trung Nguyen coffee Limiting the growth rate of the managers but the right in the Vietnamese market Because at the current rate of growth, thousand people cannot control their franchises Building a stricter transfer contract, with strict regulations and high profit margins, will stimulate the franchisee's owners to strictly comply with the provisions of the transfer contract Training more knowledge and experience for the transfer manager, because this is an extremely difficult job plus franchising in Vietnam is a completely new form, so the staff of The company cannot have much experience in this area Solution in purchasing products, in order to obtain good and high quality products Trung Nguyen needs to build a model of close association between enterprises and farmers to create good psychology for farmers in the product consumption stage The need to promote the brand on transmission | pictures, newspapers, magazines, or on radio waves so that the Trung Nguyen brand name will not gradually be forgotten in the minds of customers Expanding the market to the world, especially the Chinese market, this is a large country with the largest population in the world In addition, China is a developing country with a very "hot" growth rate, with a high density of young and very dynamic population This could be a huge market opportunity for Trung Nguyen Trung Nguyen can apply the Showroom model, which is a place to show and introduce coffee specifically as a grape-collecting fair to attract interested customers and a lobby for coffee E Conclusions With continuous efforts and efforts in production and business, Trung Nguyen Joint Stock Company in recent years has achieved many achievements, creating significant growth in revenue and profit, affirming its position in the market replace its products in the market Initially, Trung Nguyen was just a fledgling coffee brand of Vietnam but quickly became a familiar coffee brand with domestic and foreign consumers Thanks to pioneering in applying the famous business model in Vietnam in just ten years from a small coffee company located in the middle of the coffee capital Buon Ma Thuot, Trung Nguyen has emerged into a powerful corporation with six member companies: Trung Nguyen Joint Stock Company, Trung Nguyen Instant Coffee Joint Stock Company, Trung Nguyen Coffee Company Limited, G7 Trading and Service Joint Stock Company, Vietnam Global Gateway Joint Venture Company (VGG) ) with main lines of business: production, processing, trading of tea and coffee, brand empowerment and modern retail and distribution services In the future, Trung Nguyen Group will develop with few successful companies members at the same time doing business in a variety of industries ● It’s necessary to expand the diversification of product markets to increase competitiveness ● Strengthen monitoring and development of the franchise system Setting a uniform standard of image and service for franchise stores to create the unique style of Trung Nguyen coffee ● Focus on trademark registration, product design, image identification of Trung Nguyen coffee F Recommendations for optimizing the marketing channels system Channel structure Distribution system diagram of Trung Nguyen Coffee To deliver products to consumers, Trung Nguyen has cooperated with levels of distribution: wholesalers (distributors, system of large and small supermarkets), and retailers (small selling points, shops selling goods) retailers, grocers) and finally consumers Trung Nguyen currently has coffee factories across Vietnam, 121 exclusive distributors, 7,000 points of sale, and 59,000 retail stores Trung Nguyen has developed an extensive distribution system, making the company's products always available for customers to choose from Difficulties for Trung Nguyen's distribution channel structure: • Trung Nguyen has to spend a large amount of money from investing in supporting suppliers and supporting coffee growers, to investing in building factories and shops • Control the chain of franchise stores when it grows too fast • Trung Nguyen has problems with disputes over its properties • Multi-channel management is a large and complex management activity Optimal marketing/distribution channel 2.1 Vertical conflicts The vertical conflict is a conflict that occurs between members at different levels of distribution in the channel Manufacturers today sell their products through a series of simultaneous channels Therefore, channels sometimes compete to reach with a group of customers The distribution channel includes retailers and distributors of Trung Nguyen Choosing a retail distributor is also very important because if not carefully selected the product distribution area is very easy to inventory, it will not be sold, making it difficult for importing goods and new shipments For example, if Trung Nguyen chooses a retail store located in a rural area, little tends to enjoy instant coffee, especially Cappuccino coffee The low consumption will lead to cost costs On the contrary, if Trung Nguyen researches the market carefully and chooses a retail store in the central and office areas, it will ensure the output potential of the product is very high With a multi-channel system including offline and online systems, Trung Nguyen may encounter conflicts with its product promotion policy Usually, the manufacturer will be ready to spend more money on advertising and communication Therefore, it is easy to lead to consumers who only buy products through e-commerce channels or official stores being widely promoted Leading revenue at traditional retail stores and supermarkets has decreased 2.2 Horizontal conflicts Horizontal conflict is a conflict between intermediaries at the same level of distribution channels Therefore, when Trung Nguyen Legend contacted or received cooperation from Trung Nguyen retail channels, the price agreement was provided by them, to avoid other prices between locations For example, retail stores → Mega Market sells Trung Nguyen Legend instant coffee with a spoon, but buying at convenience stores is not promoted There are big issues that Trung Nguyen faces now, because of Covid-19 translation, many physical stores are closed The trend of using e-commerce platforms is also very high Online business is said to be a more economical way than external retail thanks to no cost of premises Data in recent years shows that e-commerce in Vietnam reached US $ 11.8 billion, an impression of 18% It can be seen that conflicting issues between direct shopping and online are easy to arise without the price preservation policy For e-commerce channels, promotions, and marketing campaigns are what can be considered essential to serve each other's competitive needs For example, Shopee and Tiki are both retail channels of Trung Nguyen Legend Online However, different promotions lead to customers who will prioritize buying at Tiki more This is a typical example of horizontal conflict 2.3 Solutions Some solutions to complete Trung Nguyen's supply chain: • Be cautious in expanding the scope of production and recruitment • Linking with distributors to reach consumers • Channel managers should focus on expanding products in store shelves at all distribution channels to create the most convenience for customers • Actively reduce the comparison between brands and promote more habitual buying behavior of customers • Proposing many promotions at the point of sale to increase the price sensitivity of customers to easily increase profits for businesses • Create new values, and promote consumer buying behavior G Limitations & caveats It can be seen that the Trung Nguyen Legend brand chain has a certain position in the Vietnamese coffee market and witness some prosperity in the world market Trung Nguyen coffee has been and is still growing its brand thanks to their particular qualities However, there are still certain limitations, through consumer surveys, our team will show some difficulties and disadvantages that the Trung Nguyen Legend system is still facing First, it must be mentioned that Trung Nguyen's current outstanding business model is franchising The fact that franchise stores depend on the parent brand can cause many difficulties, because when the parent brand has a great influence or the problems cannot be temporarily resolved, facing the direct impact is the franchise store Just a little mistake from the parent store is enough to cause damages, making a big impact on these franchise stores The communication process of Trung Nguyen Legend is still not fully optimized It can be seen that, nowadays, it only takes a customer to complain about the quality or service style, it will quickly spread on social networking platforms, which is very easy to face criticism from the public In this respect, Trung Nguyen does not well, evidence can be seen that bad rumors and unfavorable information always surround the brand in newspapers, social networking communities, It is necessary to be very careful and handle the communication skillfully in order to prevent false information in time Limit as much as possible, avoid unfortunate situations that cause store chains to encounter any problems Every step of the brand's communication is always concerned by many people, so solving the current situation crisis is an urgent task Trung Nguyen Legend's market share is increasingly being occupied by more well-known brands, which reflects the slow and rigid innovation of Trung Nguyen's menus and products In the Vietnamese market, there are more and more alternative products such as Nescafe, Vinacafe, Phuc Long, Cong, etc., along with coffee shops that take advantage of the space so that customers can conveniently work, discuss or meet at the shop The fact that Trung Nguyen Legend has not been able to consolidate so many convenient services is currently a dilemma in the current competitive market, causing chain stores to lose a number of potential customers Improving products, adding new flavors, and launching product lines to diversify the market is still a difficult problem for Trung Nguyen Although there is still an effort to change the image, the effects of the old image are still there and it takes both time and money to change If this problem can be solved, Trung Nguyen will be able to receive a new and loyal customer base Through the above limitations, it can be seen that with the Trung Nguyen Legend Cappuccino product line, Trung Nguyen has not yet been able to bring strategic effectiveness to the channel and attract consumers' interest in this new product line Specifically, the product line is facing three main problems The first one is the low level of awareness, the promotion and marketing activities of Trung Nguyen Legend's new products are not really effective and attract the attention of customers The Trung Nguyen Legend Cappuccino product line's channel strategy is to blame for the second issue, which is the inconsistent multi-channel distribution, which is not necessarily a positive thing This product line is offered through numerous channels of distribution, but this has resulted in many inconsistencies and multi-channel distribution without a defined strategy, which causes the product line to stop at appearance but not effectively consumed For that reason, we have the final limitation that e-commerce channels are not promoted and advertised in the most optimal way The current era is the era of digital technology, digital platforms are being actively used for sales and marketing, this was also accomplished by Trung Nguyen Legend, who listed their name and merchandise on e-commerce platforms However, in order to use such digital channels effectively, we also need to have a rational plan with an emphasis on segmentation and promotion Obviously, Trung Nguyen Legend has not yet done this