International marketing plan for phuc long tea in south korea

Our team will investigate and develop Phuc Long tea products of Phuc Long Trading Production Co., Ltd in the Korean market over the next 5 years under the theme "INTERNATIONAL MARKETING

MINISTRY OF FINANCE UNIVERSITY OF FINANCE – MARKETING FACULTY OF MARKETING &&& INTERNATIONAL MARKETING PLAN FOR PHUC LONG TEA IN SOUTH KOREA Subject: International Marketing Code: 20317020312 Team members: Trần Quốc Tiến 1921005705 Nguyễn Thị Ngọc Trang 1921005728 Đoàn Minh Phước 1921005608 Lương Ngọc Hiếu 1921005429 Ho Chi Minh, 2021 Table of Contents EXECUTIVE SUMMARY SITUATION ANALYSIS 2.1 COMPANY’S MISSION STATEMENT AND SHORT PROFILE OF THE COMPANY 2.2 INSTANT TEA INDUSTRY SITUATION 2.3 COMPETITOR ANALYSIS ANALYSIS OF INTERNAL ENVIRONMENT 3.1 VISION 3.2 MISSION 3.3 SWOT ANALYSIS 3.4 STRATEGY EVALUATION ANALYSIS OF EXTERNAL ENVIRONMENT 4.1 MICRO ENVIRONMENT 4.1.1 People 4.1.2 Government 4.1.3 Geography 4.2 MACRO ENVIRONMENT 4.2.1 Economy 4.2.2 Infrastructure 10 4.2.3 Media & Technology 11 4.3 INTERNATIONAL BUSINESS ENVIRONMENT 12 TARGET MARKET DESCRIPTION 12 5.1 SEGMENTATION 12 5.2 TARGET MARKET 12 5.3 POSITIONING 13 INTERNATIONAL MARKETING GOALS AND OBJECTIVES 13 MARKETING PROGRAM 14 7.1 PRODUCT STRATEGIES 14 7.1.1 How innovative is the product 14 7.1.2 Product adaptations 15 7.1.3 Compare it to competitors’ products 15 7.2 PRICING STRATEGIES 16 7.2.1 Applying penetration pricing strategy in the Korean market 16 7.2.2 Compare it to competitors’ price 16 7.3 PROMOTION STRATEGIES 17 7.3.1 Advertising 17 7.3.2 Promotion 17 7.3.3 Public relation 17 7.3.4 Direct marketing 17 7.3.5 Personal selling 18 7.3.6 Compare it to competitors’ promotion 18 7.4 DISTRIBUTION STRATEGIES 18 7.4.1 Port selection 18 7.4.2 Distribution channel structure 19 7.4.3 Distribution channel support strategy 19 EVALUATION, MEASUREMENT AND CONTROL 20 8.1 EVALUATION 20 8.2 MEASUREMENT 20 8.3 CONTROL 21 LIST OF REFERENCES 21 i 9.1 BOOK 21 9.2 WEB SITE 21 10 APPENDIX 22 ii EXECUTIVE SUMMARY The Korean market is regarded as one of the most promising for both local and foreign enterprises Korea is the 14th greatest trade power in the world, with a total turnover of about 1,786 billion USD (2014), and the world's sixth largest exporter (628 billion USD each year) (628 billion USD) In 2014, imports totaled 536.6 billion USD (2014) When it comes to preserving excellent culture, tea is one of the most commonly utilized goods in the country of kimchi Tea is one of the most promising and rapidly expanding goods in Korea, with several rival brands Our team will investigate and develop Phuc Long tea products of Phuc Long Trading Production Co., Ltd in the Korean market over the next years under the theme "INTERNATIONAL MARKETING PLAN FOR PHUC LONG TEA IN SOUTH KOREA” At the same time, it addresses concerns concerning the product's market potential, product supply, competition, the political climate, and Korea's advantageous qualities for developing tea goods of the company and difficulties that may arise while entering the market The study consists of the following main parts: Situational analysis, Analysis of the Internal Environment, Analysis of the External Environment, Target market description, International Marketing Goals and Objectives, Marketing Program, Evaluation, Measurement and Control SITUATION ANALYSIS 2.1 Company’s mission statement and short profile of the company In 1968 in Bao Loc Plateau, Phuc Long was born with the expectation of bringing quality tea and coffee products Over the past 50 years, Phuc Long has continuously been a pioneer brand with many innovative ideas in the industry tea and coffee industry Currently, Phuc Long has built more than 80 stores in major cities across the country Besides increasing the coverage of products to supermarkets and convenience stores With the desire to constantly expand the market, Phuc Long wishes to create a Vietnamese brand with class and quality reflected in each product, thereby gradually asserting its position in the international market Phuc Long sets out four missions to guide the company's development • Become a pioneer of the times with innovative ideas at the forefront of the tea and coffee industry • Let's bring brands to shine, motivate each other, and turn ideas into reality with the spirit of cohesion, interaction, listening and respect • To create joy and affection for customer 2.2 Instant Tea industry situation The Korean tea market is expected to reach US$309.84 million (calculated at retail prices) by 2015 By 2025, the Korean tea market is forecast to reach US$458.14 million (calculated at retail prices), is growing at a rapid pace CAGR is 3.35 % per year for the period 2020-2025 This is a decrease from the roughly 4.54%/year growth registered during 2015-2019 Per capita consumption by value reached $6.15 per capita (in retail price) in 2015 Over the next years, it grew at a CAGR of 4.13%/ five In the medium term (until 2025), this index is forecast to slow down and grow at a CAGR of 3.03%/year (Tea, 2021) The tea market has grown significantly over the past few years along with changing consumer behavior Nowadays, tea drinkers are more interested in high quality products with a great story and the drink has specific health benefits for them, which has driven the demand for healthy green tea strong strong Strong botanical teas and herbal blends In addition, the concept of tea has also changed, as it is viewed by most young consumers as a sexy and healthy drink Premiumization is another positive development in the market, as customers are showing a strong preference for functional botanical blends and individual handcrafted teas More and more people are interested in innovative flavor combinations, as well as the authenticity and story behind a certain brand When it comes to different varieties, a recent trend suggests that natural, earthy alternatives like ginger, matcha, turmeric and cumin are in higher demand Cheese tea is another foodservice phenomenon, especially popular in Asian countries like Malaysia, Taiwan, and China Another interesting trend in the tea market is the emergence of tea pairing menus As customers increasingly choose unique and experiential products, many restaurants have tried to enhance the dining experience by introducing multi-course tea fusion menus In addition, the tea market has been expanded beyond the hot beverage category with the development of new ready-to- drink beverages and iced tea variations For example, Kombucha has shown impressive growth over the past few years, from a niche product to a hit in mainstream supermarkets 2.3 Competitor analysis Brands Established Flavors Achievement Dong Suh 1968 Buckwheat tea, Brown Dong Suh has always Rice Green Tea, Purple been a leader in Korea's Osulloc Tea 1979 Corn, and Solomon’s FMCG industry, so it's Seal no wonder they're also at the top of ice cream Volcanic Rock Semi- in Korean tea brands Fermented Tea, Samdayeon, Matcha, Most Korean Osulloc Rooibos, Green Tea teas, grown in Jeju Island, are USDA, FSC and Carbon Footprint Nokchawon 1992 Bitter Melon, Korean certified They are also Corn, Honey Citron, 100% organic Lipton 1878 and Korean Ginseng Tea Nokchawon is one of Korea's tea brands Hibiscus Lime Aguas specializing in Frescas, Orange supplying brewed tea to Passionfruit Jasmine Michelin-starred Green Tea, Mango restaurants, airports, Pineapple Aguas luxury hotels and the Frescas like Lipton is a proud national sponsor of American Heart Association’s Life is Why program that inspires people to live healthier, longer lives (Song-I, BEST KOREAN TEA BRANDS IN 2021, 2021) ANALYSIS OF INTERNAL ENVIRONMENT 3.1 Vision Phuc Long aspires to be a firm specialized in the manufacture and export of high-value tea and coffee in Vietnam, with the aim to continually grow the market - sustainable development Phuc Long aspires to build a Vietnamese brand that reflects class and excellence in every product, progressively establishing itself in the worldwide market 3.2 Mission Become a modern-day trailblazer with new ideas at the forefront of the tea and coffee industries Let's make companies shine, motivate one another, and transform ideas into reality in the spirit of collaboration, engagement, listening, and respect Each of us must continually shine in order to bring delight and affection to our clients Do not allow your capacity to sleep to lapse; you must continuously push yourself and rejuvenate yourself Create high value via comprehension, empathy, and genuine value propositions that meet consumer pleasure Document continues below Discover more fInrotemrn: ational Marketing IM_UFM_2022 Trường Đại học Tài… 17 documents Go to course Review UNIT 14,15,16 - tiếng anh 100% (1) CHƯƠNG mkt service - Marketing… None BT Vật lý lần - Lecture notes 3123 31 Kỹ thuật 100% (7) đo lường COCA-COLA FINANCIAL ANALYSI… 39 Corporate 100% (6) Finance MKT 1605-Individual assignment 33 Corporate 100% (3) Finance Chapter 1+3+4 AHT - 3.3 SWOT analysis fin202 100% (3) SWOT 25 OF PHUC Corporate LONG Finance Opportunities (O) Threats (T) - Korean customers' demand - In recent years, the erratic for convenience products is behavior of pests and increasing diseases has been negatively affecting the quantity of tea - Vietnam has ideal conditions for growing tea - Many tea companies that produce top quality outside of Vietnam will see products an opportunity to make a profit - When joining TPP, the Government of Vietnam - Phuc Long will have to will attract foreign compete with many investment opponents - Joining the TPP is also an - The Covid-19 pandemic opportunity to change the has affected exports and tax barrier from low to zero imports The export of tea from Vietnam to other countries is much more convenient, so Phuc Long will be able to bring their brand to the world Strength (S) S-O S-T - Phuc Long targets a wide - Strongly promote the - Building a brand image range of customers export of packaged products that increases of Phuc Long competitiveness with other - Using local products, using competitors raw ingredients like tea - Develop Signature leaves to make their flavorful products, eliminate the way - Differentiate products in products products are saturated, and terms of quality and research products convenience, take the - With climate conditions, initiative for users who need the taste of Vietnamese tea is - Improve product quality it whenever they need it more delicious - Wide distribution of - The prices of Phuc Long's product network products are suitable and reasonable for customers' pockets - Professional customer service - Good reputation due to its perfect quality - Always understand customers and make them happy - Phuc Long's logo design is considered impressive with the combination of colors and letters Weaknesses (W) W-O W-T - Rarely exposed to the - Promote your products on - Supplementing Marketing media to promote brands, e-commerce platforms budget to promote products, etc Marketing activities - Promote and communicate - Lack of creativity and so that customers know - Redesign product impression in packaging more about the product packaging for more product design impression and creativity 3.4 Strategy evaluation The Korean market is one of the prospective markets for tea product development Because Koreans consider tea to be an exquisite delight, a traditional culture filled with national identity The firm considers the growth and penetration of Phuc Long tea in Korea to be a challenge In Vietnam, tea has the benefit of ranking second in the world in terms of export volume, quality Furthermore, Phuc Long is one of the most well-known brands in Vietnam, with a high level of customer confidence However, when it comes to exporting to Korea, we encounter significant hurdles due to the large number of rivals Some people have complained about the low quality of Vietnamese items The severe outbreak of the COVID-19 pandemic, along with the implementation of social distancing measures, has disrupted the movement of commodities, causing supply chains to be disrupted and hurting production and commercial operations As a result, Phuc Long Trading Production Co., Ltd must devise a clear market research approach, comprehend Korean consumer behavior, and push the Marketing Mix strategy in order to tap into customer psychology At the same time, firms involved in import and export must be informed of COVID-19 developments in the global market in order to capitalize on all possibilities and preserve their export strengths Use market development techniques such as digital marketing channels to continue to grow your business At the same time, businesses need to improve their competitiveness and adaptability to overcome all difficulties ANALYSIS OF EXTERNAL ENVIRONMENT 4.1 Micro environment 4.1.1 People • Language: Korean • Culture: Culture is greatly influenced by Chinese and Japanese cultures The industrialization and urbanization of South Korea, especially Seoul, have brought many changes to the way Korean people live A healthy lifestyle is a trend, young people are now more interested in drinking tea every day to have a healthy body instead of the habit of drinking coffee as before But Korea's tea ceremony culture can't keep up with their pace of life, so it is gradually being replaced by more convenient packaged tea products that are in line with modern trends (안녕하세요 (Hello) and Welcome to our Guide to South Korean Culture, Business Practices & Etiquette , 2020) • Religion According to Pew Research Center (2010), about 46% of the population have no religious affiliation, 23% are Buddhist and 29% are Christians (Religion in South Korea, 2021) • Work ethic Korean people are known for their intelligence and work ethic It is no wonder why the country has one of the highest average annual work hours (Working in South Korea, 2020) • Population growth rate According to Statista, In 2020, the population in South Korea increased by about 0.14%, compared to the previous year (O'Neill, South Korea: Population growth from 2010 to 2020, 2021) • Age structure In South Korea, approximately 71.67 percent of the population was between 15 and 64 years old in 2020, while those above the age of 64 made up around 15.8 percent The youngest generation made up an even smaller percentage than the elderly, but were the only group that did not increase in size over the last decade, partly due to a decrease in births since 2007 (O'Neill, 2020) Occupation: Mainly office workers who have a hobby of drinking tea Income: With low-middle income Mainly concentrated in big cities like Seoul, Daejeon, Changwon, Busan, And areas where many Vietnamese people live like Ansan 5.3 Positioning In Phuc Long's tea product positioning strategy, Phuc Long's target customers are all tea lovers This group of customers has the common characteristic that they have had time to contact and get used to the taste of tea, not just the traditional taste A cup of tea per day will bring consumers good health, a youthful and energetic body Science has proven that tea contains many antioxidant compounds that help prevent the aging process and cell damage, prolong youth, protect the cardiovascular system, prevent the risk of diseases, cancer as well as prevent cancer very effective With a long-standing enthusiasm in the tea industry, the company is confident that it can beat other competitors in terms of price and product quality, Phuc Long is proud of its closed model, from cultivation to production and processing and distribute the product to the market Phuc Long uses quality ingredients from Bao Loc, Di Linh (Lam Dong) and Thai Nguyen to keep the flavor of each type of tea when it reaches consumers INTERNATIONAL MARKETING GOALS AND OBJECTIVES 13 “Actionable” marketing objectives Return on investment (ROI) should reach 10% by the second year of operation From 16 to 18 percent of the market share in the fiscal year Reputation improvement for the company through a 50% increase in local charity expenditure over the next five years Enhance the customer referral rate by investing in marketing Push up consumption to increase sales Achieve 90% product awareness by making the product better and better, regularly holding events over the next years Expand the market through producing new goods, discovering new unexplored regions, and broadening the possible consumer group, etc Incorporate new technology and modernized specialist equipment This is done through investing in the development of sophisticated science and technology, as well as by training a team of qualified technicians and workers to satisfy the company's development requirements Increasing website traffic is a common goal for companies hoping to put their products in front of more people The company might focus on digital marketing terms like click-through rate (CTR), cost-per click, and impression 10 Reach sales levels to become one of the 50 largest tea producing companies in the world MARKETING PROGRAM 7.1 Product strategies 7.1.1 How innovative is the product After more than 50 years of extracting the quintessence from green tea buds and the desire to bring customers the most valuable experience when enjoying, Phuc Long is continuously a pioneer brand with many ideas The pioneering innovation in tea is expected to bring users high quality tea products, preserving the traditional Vietnamese flavor combined with a modern enjoyment style Each tea package when reaching consumers is produced and packaged by Phuc Long according to the most advanced technology, enhancing the penetration of the tea to the outside and enhancing the rich flavor, re-experience the whole experience when enjoying 14 Besides the traditional flavored products, Phuc Long giving birth to teas with extremely delicious flavors (lychee tea, rose tea, peach tea ) 7.1.2 Product adaptations With the current vibrant pace of life, the outside culture has also been more or less imported into Vietnam and also does not exclude the culture of enjoying tea, and that more or less changes the taste for enjoying tea of young people Therefore, the company needs to continue to research new products to better suit the tastes of customers Improving product quality, constantly searching for excellent tea varieties, constantly researching - improving production methods to produce pure-tasting products, constantly improving the quality of production technology and machinery , improve the quality of production materials A beautiful and eye-catching product packaging will be easier for customers to notice and choose to buy, so it is necessary to focus on creative and impressive product packaging design to attract customers' choices 7.1.3 Compare it to competitors’ products Phuc Long, when entering the Korean market, will encounter many other strong competitors such as Osulloc tea, Lipton tea, Nokchawon tea, and Dongsuh tea its products Because Vietnam is one of the famous countries for tea Therefore, the taste of Vietnamese people about this food group has also become stricter and stricter than common sense Phuc Long Tea is sourced from two tea hills that we own in Thai Nguyen and Bao Loc - these are also two places that are considered famous tea estates of Vietnam Grasping the increasing demands of customers, Phuc Long has constantly searched for high- quality tea varieties, constantly researched - improved production methods to produce high- quality teas with high flavor Tea is new but still retains the traditional features, the company has also diversified its products so that customers have more choices 15 7.2 Pricing strategies 7.2.1 Applying penetration pricing strategy in the Korean market Price Penetration Strategy is the use of a low initial selling price for a new product to entice customers to quickly grow the market and improve sales volume The aim is that after a period, the company will have a significant market share and will be able to lead in terms of market share This method is appropriate for companies with large-scale economies of scale and experience lines to increase efficiency, which means that the more goods produced by the firm, the cheaper the unit cost of the product It is frequently utilized as a key technique to generate a huge market for the company After doing study on the price-influencing elements in the Korean market, such as tariffs and income The business agreed on a price of 10,000 won for Phuc Long tea Penetration pricing may be an effective marketing approach for increasing market share and sales volume of Phuc Long's tea goods if the firm has the proper price plan Furthermore, greater sales volume can lower production costs and accelerate product turnover Penetration pricing strategies are designed to maximize sales, gain widespread market acceptance, and capture large market shares quickly by setting relatively low initial prices Company cost in manufacturing the product is an important factor in pricing Based on production costs, the company can set a temporary discount to stimulate sales or store traffic Therefore, it will help Phuc Long easily enter the Korean market, increase brand recognition from customers, and gradually become the Top of Mind of customers 7.2.2 Compare it to competitors’ price Competitors for tea goods in the Korean market frequently adopt a competitive price approach That is, the process through which a company determines strategic pricing for its goods by exploiting the prices of other competing products or services on the market With a changing 16