Final exam assignment international marketing plan for bach coffee in the japanese market

Lương Thị Thúy Kiều 2121000417 Trang 4 EXECUTIVE SUMMARY Bach Coffee is a Vietnamese coffee brand that utilizes modern coffee production technology, carefully selects high-quality coff

THE MINISTRY OF FINANCE UNIVERSITY OF FINANCE MARKETING –

FACULTY OF MARKETING

FINAL EXAM ASSIGNMENT

INTERNATIONAL MARKETING PLAN FOR BACH COFFEE THE JAPANESE MARKET IN

Course Name: International Marketing Course Code: 2321702031202 Lecturer: Đặng Huỳnh Phương Class : CLC_21DMA02

Ho Chi Minh City, 2023

THE MINISTRY OF FINANCE UNIVERSITY OF FINANCE MARKETING –

FACULTY OF MARKETING

FINAL EXAM ASSIGNMENT

INTERNATIONAL MARKETING PLAN FOR BACH COFFEE THE JAPANESE MARKET IN

Course Name: International Marketing Course Code: 2321702031202 Lecturer: Đặng Huỳnh Phương Class: CLC_21DMA02

Ho Chi Minh City, 2023

EXECUTIVE SUMMARY Bach Coffee is a Vietnamese coffee brand that utilizes modern coffee production technology, carefully selects high-quality coffee beans, and follows a strict roasting and grinding process to deliver fresh and robust coffee experiences to its customers Bach Coffee is actively expanding its coffee exports to international markets with the aim of introducing the Vietnamese coffee brand to diverse cultures, offering high-quality coffee products with the rich flavors of Vietnam to a global audience

Bach Coffee has successfully penetrated the Indonesian market and made a distinct mark there Next, Bach Coffee intends to bring the Vietnamese coffee brand to Japan, one of the largest importers of Vietnamese coffee in the world Japan ranks third globally in annual coffee imports, with Vietnam being the second-largest exporter of coffee to Japan after Brazil The coffee market

in Japan is estimated to generate revenues of up to 6 billion USD in 2023, with a projected annual growth rate of 0.39% (CAGR 2023-2028) (Statista,2023) In particular, the soluble coffee product market in Japan is expected to reach 5 billion USD in 2023, with an estimated annual growth rate

of 1.11% (CAGR 2023-2028) (Statista,2023) This is considered a highly potential and rapidly developing market, offering significant opportunities for businesses to establish their reputation and presence

To promote exports to the Japanese market, experts say that businesses and industries in general and the coffee industry in particular need to research and specifically survey the needs

of the marke.To achieve these goals, Bach Coffee needs to develop the most suitable and effective marketing strategy To approach and meet the demands of consumers and create an identity in the market, Bach Coffee develops valuable strategies based on product strategy, price strategy, distribution strategy, and promotion strategy

I Company overview

1 Introduction of the company

Bach Coffee, a Vietnamese coffee brand,was established in 2009, representing modern coffee production technology for discerning individuals who understand and appreciate the specialty coffee offerings of Vietnam

Bach Coffee prides itself on the selection of high-quality coffee beans and rigorous roasting

to bring customers fresh and rich flavors cups of coffee They source their coffee beans from reputable coffee-producing regions in Vietnam, including Đa Lak k, Lam Đong, and Cao Bang, using both Arabica and Robusta coffee bean varieties

For Bach Coffee, quality isn't merely "controlled", it is "crafted." It's a daily, repetitive endeavor that involves everyone and is an integral part of every production stage

Bach Coffee wishes to bring customers not only delicious coffee, but also comfort and professional service At the same time, Bach Coffee also guides eco-community responsibility through taking advantage of natural resources and implementing charity programs in the society

III Country selected

1 Brief discussion of the country's relevant historical developments

The history of Japan dates back to the Jomon period, around 10.000 BC, when the Japaneseprimarily relied on hunting, gathering, and pottery Later, around the 3rd century BC, Japan made trade with China and Korea, acquiring elements of their civilizations

In the late 19th century, Japan paved the way through exchanges with Western countries through the Meiji renaissance Japan rapidly developed into a superpower, making significant advancements in industry, defense, and military capabilities

During World War II, Japan invaded several countries in the Asia-Pacific region However, after being defeated in 1945, Japan went through a period of reconstruction and was placed under the governance of the Allied Powers

In March 2011, Japan faced a dual disaster with a devastating earthquake and tsunami, leading

to severe hardships for the nation Japan has carried out comprehensive economic reform and recovery With diligence, hard work, advanced scientific and technological capabilities, and abundant resources, Japan's economy has recovered rapidly, solidifying its position as a global economic powerhouse

The kanji in Japanese is "origin of the sun", so people are used to calling Japan with the title "Land

of the Rising Sun"

Regarding the relationship between Japan and Vietnam: it began in the late 16th century when Japanese merchants engaged in trade with Vietnam Vietnam established diplomatic relations with Japan on September 21, 1973 In 1992, Japan officially began providing aid to Vietnam Currently, bilateral relations between Vietnam and Japan are developing strongly in various aspects and have entered a new phase in terms of quantity and depth The relations of friendly cooperation and people- -people exchanges are constantly strengthening, evolving into a global and trustworthy torelationship that continues to advance

2 The National Business Environment

Population - population growth rate

According to the 2023 statistics, the current Japanese population is 124,998,527 people, accounting for 1.55% of the world's population, the 11th largest population in the world

In 2023, Japan's population is expected to decrease by -503,523 people

According to estimates, daily change of population rate of Japan in 2023:

• 2,229 babies are born every day on average

• 4,315 people die on average every day

• 706 migrants on average per day

The Japanese population will decrease on average -1,380 people per day in 2023 Japan is facing the risk of decline in the population

Figure 1 Population of Japan from 1980 to 2022, forecast to 2027 (million people)

Source: Japan General Statistics Office Age structure:

Japan is a country with a highly aging population, the population under the age of 15 accounts for 13.1%, the population aged 15-64 accounts for 64%, the population aged 64 and over accounts for 22.9%

Lecture notes, lecture 8 - The…

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Figure 2 The chart shows the structure of Japan population by age group’s

Source danso.org :

• Japan's low birth rate

The number of children born each year in Japan has dropped dramatically, and the birth rate

in Japan is forecast to fall even further

• High average life expectancy

Life expectancy in Japan is 84.9 years, higher than the average life expectancy of the world population (72 years)

Culture uses Japanese coffee

In addition, making coffee with filter paper is also considered a feature in the way of enjoying the country of the rising sun The Japanese have a habit of drinking roasted, bold coffee Later, the presence of Espresso coffee shops created a new habit, giving Japanese people the excitement of brewing coffee

Vietnam's Robusta coffee beans are very popular in Japan with stable quality, price, and highly appreciated coffee flavor Vietnam's coffee also affirmed its value and position in the Japanese market when it surpassed Brazil, the taste gradually consolidated and became familiar

to Japanese consumers

Consumer behavior

According to statistics from the International Coffee Organization on the category of coffee consumption in countries around the world in 2022, the Japanese market ranks 3rd in terms of

consumption of this item Above all, Vietnam is one of the countries with the highest market share of imported coffee in Japan, It can be seen that, with coffee from Vietnam, the Japanese trust and satisfy their pure coffee taste

Coffee is a commonly preferred beverage that people can also consume at work For instance, tNational Coffee Association (NCAUSA) revealed that coffee consumption among 18-24 year olds

about 34% and that about 66% of Americans over 18 consume regular coffee and 28% of coffedrinkers Coffee in this country accounts for coffee outside the home as of January 2022 (MordoIntelligence, 2022)

Picture 3 Percentage of coffee consumers in Japan by age group in 2022

Source Mordor telligence, 2022: In

In addition, Japanese people's consumption trend towards consumer goods such as coffee has always paid special attention to the health factor guaranteed by Japan's strict regulations on food hygiene and safety, then comes the cost and convenience of the product (Mordor

Intelligence, 2022)

2.2 Government

Type

Although Japan still maintains the Emperor's regime, the Emperor of Japan is only "a symbol

of the country of Japan and for the unity of the nation", had no political power, and only performed a role at important Japanese ceremonies as the head of the nation

It consists of three branches: legislative, administrative, and judicial, and is based on people's sovereignty It

is a unitary country consisting of 47 administrative units

Political stability

Japan has a history of political stability, with the transfer of power through democratic elections without conflict

The Japanese people are often actively involved in the electoral process, and representative politicians are elected according to democratic principles

Japan has a multi-party system, with many active political parties The Liberal Democratic Party (LDP) is considered the most influential political party, but other parties also play an important role

Tokyo is the capital of Japan Japan has a post-war pacifist constitution

Japan has a strong and compliant legal system, with a set of rules and regulations widely applied to maintain social order and govern political activity

Legal system/regulations

Japan has a strong legal system to protect property ownership and investment rights This includes protection of intellectual property and trademark rights

Japan is a country with strict labor laws, requiring businesses to have working conditions specified in the labor contract and not to force labor All employees are entitled to employment rights and benefits such as maximum working hours, time off, holidays, and maternity leave Businesses in Japan must register their employees for compulsory retirement insurance, health insurance, unemployment insurance, and workers' accident compensation insurance All of these apply to employment relationships regardless of the employee's nationality (Ohta, 2021) The Japanese government often has extensive regulatory interventions in many economic sectors to ensure safety, environmental protection, and consumer welfare

Social security

The Japanese government strives to maintain and improve people's lives based on ensuring social welfare and public health, providing social security through a system of insurance and social benefits

This includes social insurance, employment, health care, unemployment benefits, pensions, and other forms of assistance

Japan is facing the challenge of a growing aging population, which puts pressure on the social security system, leading to ongoing discussions about measures to reform and ensure its sustainability this system

2.3 Geography

Type of surface areas

Geographically, Japan's territory has 3,900 small islands, of which the 4 main islands are Honshu, Hokkaido, Kyushu, and Shikoku, mainly forests and mountains, accounting for about 97% of the total area

Japan's total land area is 379,954 km², ranking 60th in the world and accounting for less than 0.3% of the world's total land area Japan has a total of 47 prefectures, of which Hokkaido province has an area of more than 83 million square meters, and the province with the smallest area, Kagawa prefecture, is just over 1 million square meters This is also understandable because the terrain of Japan is mainly large and small islands, and the land area is extremely small

Japan is famous for its long and high mountain range, of which Mount Fuji (Mount Fuji) is the highest peak This mountain is a famous symbol of Japan

Major cities

Figure 4 Map of major cities in Japan

Source Internet : Climate

Japan is located in the Southern Hemisphere, in a temperate climate area, but geographically stretching to the subtropical region, Japan's climate is unevenly distributed Being an intermediate between hot and cold zones, the weather changes erratically, with 4 distinct seasons, but each region has a different climate along the length of the country

• The north is located in a temperate zone with a mostly cold and snowy climate (winter will last longer than usual)

• Southern Japan has a subtropical climate, with mild winters, hot summers, and often heavy rains

3 Market and Size Potential

3.1 Economy

Economic growth rate

The Japanese economy is a developed free market economy

It is also the second largest economy in Asia It is a member of the G7, G20, APEC, and ASEAN At the same time, Japan is also the secose-largest economy among developed countries

One of the key factors leading to this positive result is the growth rate of consumption strong individual, which is an assessment of a new signal that the impact of the COVID-19 pandemic tends to decrease Statistics show that Japan's real gross domestic product (GDP) adjusted for inflation increased by 0.4% compared to the fourth quarter

of 2022 In fiscal 2022 Japan's real GDP expanded by 1.2% marking the 2nd consecutive year of growth After that, Japan's adjusted GDP in the first quarter of 2023 increased to 2.7%

This is considered a higher-than-expected number, the fastest increase since the October-December quarter Japan's gross domestic product (GDP) saw a quarter-on-quarter increase of 1.5%, above economists' average predictions of 0.8%, and positive data boosted growth annual growth rate of the economy ranked 3rd to 6%, much higher than the previous forecast of 2.9% The main reason for Japan's economic growth was the strong recovery of exports at 3.2%, in addition, the positive recovery of tourism and services also contributed greatly to GDP growth In recent years, the number of tourists and tourism spending in Japan has increased, partly due to the weaker ¥ currency against other currencies However, there is still a dark spot in the overall economic picture of the Japanese economy when personal consumption, which accounts for more than a quarter of GDP, decreased slightly, which shows that Japanese households are struggling to cope with consumer prices use increased

GDP per capita

According to the International Monetary Fund (IMF), Japan's GDP per capita reached 41,637 USD (2020) and fell to 39,312 USD (2021), and gross domestic product is 4.941 trillion USD From

1960 to 2021, Japan recorded GDP per capita data has the lowest value in 1960 of 475.32 USD and 2012 is the year when the peak is reached with data of 49,145.28 USD

Figure 5 The chart of Japan's GDP per capita in the period 1960 - 2021

Source: Internet Import coffee

an increase of 11.6% in value compared to 2020

previous year 2020 Especially in 2021, Japan increases the source of coffee imports from Vietnam, which makes Japan a potential country for coffee producers in Vietnam to focus on and pay more attention to

Figure 6 Structure of the coffee supply market to Japan (% by volume)

Source: ITC, 2021 Currently, many businesses tend to develop processed coffee production rather than other types of coffee

Among them, Vietnam accounted for the largest import volume, reaching 35,598 tons

Inflation rate

The year 2022 is considered to be the year with the highest inflation rate in 41 years in Japan with the core consumption index (CPI) increasing by 4%, which also makes people here get used to falling prices

Figure 7 Inflation in Japan highest in 41 years

Source: Internet

In Japan in May 2023, inflation continued to rise uncontrollably as per the intended target

of 2%, the core consumption index did not include fresh foods but included energy products increased by 3.2% over the same period last year Although this increase was lower than the 3.4% increase in April, it was higher than the 3.1% increase expected in the core consumer inflation market excluding raw materials and fresh food However, including energy items increased by 3.2% y/y Although, this increase was lower than the 3.4% increase in April, but higher than the 3.1% increase forecast in the core consumer inflation market excluding raw materials and fresh food in May 2023 at 4.3%, higher than 4.1% in April and the highest level since June 1981 The reason for the increase was mainly due to the steady increase in the price

of daily necessities and food, making it difficult for families to spend

Currency exchange

The official currency of Japan is the Yen, denoted by (¥) Converted into Vietnamese Dong

Figure 8 Japan was the only G7 country that did not spend more on infrastructure

from 1996 2019 –

Source: OECD, Japanese Cabinet Office

In addition, the Japanese government also believes that about 40% of tunnels need to be repaired and rebuilt to ensure the safety of the people and the transport industry

Experts in the country are also making policies urging the authorities to quickly make infrastructure investments, giving priority to projects suitable for Japan's dwindling population.The 50-year period is considered the usual life cycle of most infrastructure

there in 2033 (Duc Anh, 2022) During the period from 2016 to 2020, the Japanese government's eye inspection showed that 36% of tunnels, 9% of bridges and 14% of road ancillary works such as signs and traffic lights were in urgent need of repair

Media & Technology

Japan is considered to be the third largest e-commerce market in the world, closely following giants such as China, the US, the UK with more than 74% of the population or 88 million consumers on the trading floor Paying e-commerce in 2020

Economically, according to the World Bank, Japan is in the top 30 richest countries Total GDP in 2021 is over 5 trillion US dollars; GDP per capita is 40,246 USD The e-commerce market value brought to this country is more than 150 billion US dollars

In terms of population factors, the overall scale of Internet use of the people has covered 90.7% Smartphone usage rate is 82% and is expected to increase to 92% by 2025 Social mediausage rate is 83% LINE is currently the dominant social platform in the market, followed by Twitter and Facebook, and local social network Mixi is also vying for market share

According to statistics, there are currently 100 million e-commerce users in Japan and an additional 13 million users are expected by 2025; Over 70% of Japan's population shop online, expected to reach 89% by 2025 As discussed in current reports, Japan's E-Commerce market isexpected to surpass 25 billion dollars in 2026 as the country makes its digital journey from street-side retail to online stores The current e-commerce markets in Japan include: amazon Japan, rakuten, Yahoo! Shop Japan, DMM, Zozotown, wowma, rakuma (Dan Viet newspaper, 2021)

In which Amazon Japan, Yahoo Japan and Rakuten are the top three e-commerce markets with the highest frequency of use in Japan These platforms currently account for 50% of total eCommerce revenue

4 Competitive Environment

Coffee Blendy Mellow

BLENDY is a brand of instant coffee released in 1977 in Japan by Ajinomoto General Foods Company

Blendy is considered a coffee with a deep and clear flavor With the modern "T2ACMI roasting" technology from Ajinomoto AGF, the quality is controlled from the time to the temperature of the roasted coffee beans to create a rich, aromatic coffee flavor and eliminate the bitterness and taste sour Blendy Mellow Rich Instant Coffee of Blendy brand is favored by many Vietnamese consumers because of its fresh aroma and rich taste This is the outstanding differencebetween BlendyTM and its product lines on the Japanese market today

Suntory's Boss Coffee