unit 2 marketing processes and planning

Research marketing mix on the chosen company’s competitor and evaluate the the efficiency of the marketing mix Do research on products, segmentation, target market and plan out marketin

ASSIGNMENT 2 FRONT SHEET

QualificationBTEC Level 4 HND Diploma in BusinessUnit number and

titleUnit 2 Marketing Processes and Planning

Group number:

1.Tran Khanh Huyen2 Nguyen Duc Quang 3 Mai Huy Tien4

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OBSERVATION RECORD

Student 1Tran Khanh HuyenDescription of activity undertaken

 Find and collect materials, sources of information for the team

 Be responsible for the research of the marketing mix of the chosen company and make comparision to its competitor (Part A)

 Do research on market, competitor, segment and complete marketing plan

Assessment & grading criteria

How the activity meets the requirements of the criteria

Student 2Nguyen Duc QuangDescription of activity undertaken

Research marketing mix on the chosen company’s competitor and evaluate the the efficiency of the marketing mix

 Do research on products, segmentation, target market and plan out marketing strategy for marketing plan

 Conduct informations in the collection of source information

Assessment & grading criteria

How the activity meets the requirements of the criteria

Student 3Mai Huy TienDescription of activity undertaken

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I have created a media plan More specifically, I showed everyone a perfect plan that includes Marketing Goals and elements in Media objectives and strategies In addition, Ialso create a system to bring the product to the target audience and target market Above all, I calculated the amount of money to spend on what to spend on this media plan.

Assessment & grading criteria

How the activity meets the requirements of the criteria

Student

signature:Date:Assessor

Assessor name:

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 Summative Feedback:  Resubmission Feedback:

Internal Verifier’s Comments:

Signature & Date:

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1.6 Process and physical evidence 6

2 Highlands Coffee – Starbucks competitors Marketing Mix 7

II Marketing Plan for Starbucks’ Merchandise Line 10

2.5 Customer needs in Viet Nam 13

2.6 Environmental factors affect product marketing 13

3 Swot analysis 14

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4 Objectives and Issue 15

I LO2 Compare ways in which organisations use elements of the marketing mix to achieve overall business objectives

The marketing mix is a marketing strategy used by businesses to promote products and services toapproach potential customers through a combination of marketing elements Traditionally, those elementsare also known as 7Ps, which stand for product, price, place, promotion, process, people, and physicalevidence (Kotler P., 2012)

Our group has chosen Starbucks – a famous international coffee chains that had entered Vietnammarket in since 2013 to study and evaluate its ways of apply the marketing mix into its marketing activities inVietnam And we decide to choose the product ‘Starbucks merchandise’ which is the brand’s famous nichemarket product to be the main subject of our marketing plan

1 Starbucks Marketing Mix:1.1 Product

Starbucks offers its customers a very good number of food and drink options The main categories ofStarbucks products are foods including breakfast, lunch, cakes & cookies, muffins, pastries & doughnuts,fresh fruit and beverages including bottled soft drinks, tea, espresso beverages, filtered coffee, frappuccinoblended beverages, and cold brew In addition to its flagship Starbucks Coffee brand, the company sellsproducts and services under the following brands: Teavana, Tazo Starbucks Corporation also sellsmerchandise products such as coffee- and tea-brewing equipment, Verismo® System by Starbucks, mugs andaccessories, packaged goods, books, and gifts In the financial year 2016, beverages accounted for 74% oftotal sales in the company’s product mix Coffee is the main product sold by the company and it sells more

than 30 blends and single-origin premium coffees.

Entering Vietnamese market, Starbucks wants to keep its own flavor and uniqueness of Arabica coffeeto differentiate with Vietnamese coffee which mainly is Robusta coffee (It has a slightly bitter taste thatusually is offset by sweetened, condensed milk) However, Starbuck can customize the products to suitVietnamese consumer taste It would be a good idea to add more types of coffee drinks that illustrateVietnamese style like Asian Dolce Latte và Dolce Misto These two kinds of coffee was inspired by traditionalmilk tea coffee of Vietnam which are familiar with Vietnamese.

With strong brand name of Starbucks as the world largest coffee house chain According to Starbucks“Exceptional coffee can only come from exceptional beans” They want to make sure their beans meet thehighest standard of quality Starbucks taste more than 1000 cups of coffee a day to verify the superior taste

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that all of consumers have come to expect A batch of coffee is tasted at least three times before it’sapproved, so every time customers take a sop of Starbuck coffee, it’s a sip that they will love

Starbucks is also noted for the continued placement of its easily identifiable logo front and center ofits coffee cups and pouches Packaging of take-away coffee are simple, elegant plastic cup and paper cup withoutstanding Starbuck mermaid logo Drink ware (mugs and tumblers) is favorite by many eco-friendlyconsumers Plus discount are applied on purchases when customer bring their own Starbuck drink ware tothe stores It is a brilliant way to keep customers engage with the brand Customer’s enjoyment of food anddrink are enhanced by eye-catching packaging

Starbucks offer consumers excellent services and focus on personalization to keep direct emotionalengagement with customers Starbucks recognizes that it's not just about the product, it's also about theexperience Each Starbucks location you walk into has the same look and feel Baristas serve your coffee toyou by name And if it isn't exactly what you ordered, they make sure to correct it and ask how they canmake your experience better.

1.2 Price

Starbucks pricing strategy can be described as a hybrid of premium pricing, geographical pricing,psychological pricing strategies Starbucks pursues a premium pricing strategy and its products are generallymore expensive compared to the competition A cup of Starbucks coffee costs about VND 70.000 in Hanoi,Vietnam, and about GBP 2.80 in London High Starbucks prices are understandably the result of pursuingproduct differentiation business strategy and capitalization on a high level of customer loyalty Nevertheless,such a strategy may alienate certain segments within the current customer base, especially in times of

economic difficulties.

Geographical pricing represents another important element of Starbucks pricing strategy It has beenfound that “a Starbucks coffee in London is almost half (48%) the price of the same beverage in Bern,Switzerland, who tops the list for the most expensive drinks from the chain worldwide.” (Ealing Times, 2017).The world’s largest coffee retailer also applies psychological pricing strategy by using Price Point Perspective(PPP), i.e pricing products 0.99 cents instead of USD 1.

1.3 Place

The element is to set a question for managers to ask when, and where to serve the customers.“Starbucks is the ‘third place’ away from home and work where the individual has a place and time of hisown” (Kumar, 2003) Starbucks flagship stores in Hanoi are located in mostly commercial centres and malls(Vinhomes Metropolis Lieu Giai, Vinhomes Royal city) or office buildings (Charmvit Tower Tran Duy Hung, IPH4

Tower Xuan Thuy) in the center of the inner districts which have high traffic density Local business peopleare likely to stop by Starbucks because it is near to their work Some tourists are also likely to go in, becauseit is in the centre of the city and a familiar brand, and the store can be seen just by the roadside Such anopposite location provides target customers to choose it to be the place that they want to stay and relax

In addition to offline stores, Starbucks has developed a number of apps (Starbucks App for iPhone,Starbucks App for Android, and Starbucks App for Windows) for busy customers who would like to walk inselect stores and go straight to their coffee Starbucks Vietnam also serves its beverage products on popularonline orderings apps such as Shopeefood, Grab In 2021, the mermaid coffee chain partnered with Shopeeand Lazada to launch an online store that sells the brand’s signature merchandise line on their apps.

1.4 Promotion

First of all, Starbucks mainly sells their products direct to customers at stores that means personalmarketing Starbucks approaches directly with the customer and determines a customer’s wants and needs.The company also organizes events in which people of the regions will be asked to visit the venue andinteract with its workforce The visitors will be given free samples of the products so that they can test theirquality and taste.Besides, Starbucks gives discount for customers on special days such as: “50% off on anysummer beverage”, “Enjoy 30% off on opening celebration” Starbucks also organized meaningful campaignslike: Challenge "Starbucks Moments” or “Experience the First Starbucks Reserve Store” to attract morecustomers The company also has many other promotional activities, which included printing information ontee shirts, mugs or phone case.

Starbucks makes use of a number of promotional strategies to communicate with its stakeholders Ithas a customer loyalty scheme called ‘Starbucks Rewards’ As a member, you can collect 1 star for every VND

y y , y y40.000 you spend in stores or online After a collection of 100 stars within a year, members will be upgradedfrom green status to gold status For gold members, every 25 stars you collect makes you eligible for a rewardwhich is redeemable for a drink item There are also new year gifts for gold members each year and birthdaygifts of a free food item for every registered member.

Corporate social responsibility is another powerful mechanism often used by Starbucks Starbucksprides itself as a leading company in sustainability as the coffee chain has taken actions since 2015 to sourceits coffee and tea ethically, plant more than 40 million coffee trees, support various local coffee farms andgradually introduce reusable cups to customers through promotion The coffee chain carries an all-year-round promotion of 10% discount on product price if customers bring their own drinkwares.

Vietnamese, especially young people, will be strongly attracted by social networking sites In addition,the presence of Starbucks on Facebook, Instagram or Pinterest will turn coffee into a hobby that consumers5

can easily share with friends and family For example: Starbucks regularly offers preferential treatmentthrough the form of like, share, comment on social networks, thereby increasing the interaction rate as wellas the coverage of the product to the users Easy to see one of the strongest channels are through socialmedia like Facebook, which has 334, 024 people like and 332, 441 people follow page; Instagram with 56,5thousand followers and so on

1.5 People

Many services involve both actions of employees and customers, which is essentially shown in thecase of Starbucks Strategically, service personnel is an important source of product differentiation (Hoffman& Bateson, 2002) It is often challenging for café to differentiate themselves from similar businesses in thebenefit bundle it offers or its delivery system Starbucks recognized this problem The strategies for Starbucksare to offer customers with friendly services Quality is the key factor to attract more loyal customers andgood services keep customers’ satisfactory in order that they would raise high perception about Starbucks,hence adding more value to the company Understand the important of services, before lauching new stores,Starbucks had hired their staff and trained them for months to ensure an excellent front-end staff that willserve not only high quality cups of coffee but aslo cautions and comfortable environment.

For instance, to execute the so-called friendly services, Starbucks focuses on developing a friendlyenvironment in the workplace, its stores, which will help employees understand the message that thecompany wishes to deliver to its customers better Starbucks employees are called partners and are treatedlike a real partner Starbucks has been building itself up as a brand synonymous with social responsibilitysince 1988 where it became one of the first companies in the US to offer full medical insurance to both fulland part-time partners They provide their partner with free training, which educates them with the basicknowledge of Starbucks service skills, and Starbucks culture The promotion training is also offered for staff

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self-development The partners’ job behind the counter includes recording the name of their customers,personalizing their service, and offering the service individually In Starbucks' case, customers have to stay inthe actual process of production in order to receive service, so their behaviour and their reaction to theservice encounter will play an important role The nature of these interactions strongly influences thecustomer’s perceptions of service quality (Lovelock & Wright, 2002).

1.6 Process and physical evidence

Since a service is not tangible that cannot be felt, smelt or tasted as is the case when you want to buyconventional products such as soaps, drinks or foods, advantage must be taken of every opportunity to linkwith what is physical In Starbucks Store, customers can often see the Starbucks logo on every take away cup,and napkins They can see some comfortable chairs inside the store, and especially one couch is sitedoutside They also can feel quite warm and relaxing, due to the warm colors that have been printed on the6

wall, and listening to the jazz music They can also see the smiling face of every employee that makes themfeel good And they also can see the clean environment around, and smell the coffee bean All of those thingsare referred to as the “tangible clues”, which make customers feel that they are having a quality service here.In theory, much of that physical evidence is seen by the consumer as part of the product, and they can beoften used to influence behavior of customers (Bateson, 1992)

Another reason that customers should drop by a nearest Starbucks store to enjoy a comfortableatmosphere called the third place Starbucks is neither home nor work but a community space where peoplecan meet Purchasing a cup of Starbucks also means that consumers get a pleasant, cozy workplace with freeWi-fi and charging stations (elcectronic socket).

Currently, one of the formidable competitors of Starbucks in the coffee chain business in Vietnammarket is Highlands Coffee Highlands Coffee was established in 1998, it is a famous coffee chain and hasbranches throughout the country In 2020, Highlands is the brand holding a total of 24% market sharediscussing coffee shop chains on social networks (YouNet Media, 2020) This brand has effectively appliedthe marketing mix to its brand development and has great similarities and interesting distinctivecharacteristics when compared to Starbucks.

2 Highlands Coffee – Starbucks competitors Marketing Mix2.1 Product

In addition to the product is filter coffee, Highlands also offers customers many other choicesincluding:

Drinks (with coffee): Americano, Caramel macchiato, Latte, Espresso, Mocha macchiato, Cappuchaino,Caramel filter FREEZE, Classic filter FREEZE.

Beverages (no coffee): FREEZE green tea, FREEZE chocolate, Cookies & cream.Tea: peach jelly tea, peach tea, lychee jelly tea, san gold tea.

Pastries: Highlands Chocolate Cake, Cheese Caramel Cake, Green Tea Cheesecake, Tiramisu Cake2.2 Price

Valuation method: Highlands products have an average price ranging from 30,000 VND to 70,000 VNDper product.

Pricing strategy and sentiment: This is not a low price compared to the general level of brands inVietnam However, because Highlands Coffee's main target customers are middle-class, office workers andyoung people, high pricing was clearly and consistently positioned from the outset, with the message "coffeefor businessmen" and "coffee for the intelligentsia with income"

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2.3 Place

Since its inception, Highlands Coffee has always shaped its brand as a high-class coffee brand, so thedistribution strategy and location of the shop have always been carefully considered by Highlands Coffee tobring comfort roof, convenience for customers at any shops Highlands Coffee chooses the areas with thebest locations to arrange a comfortable space while still keeping the same features romance of its own chainstores This brings many benefits to Highland as in busy areas, a higher number of customers with higherdemand is likely to bring better returns for Highland.

Currently, Highlands Coffee has 232 stores (as of November 12, 2018), concentrated in all major Thesystem of stores is usually located in beautiful locations (concentrated in busy neighborhoods or people'sattractions such as shopping centers, entertainment venues, entertainment, etc) this is increasingcompetition compared to other stores or brands, so Highlands Coffee's customer base is very large.

In addition, Highland also has a number of intermediaries providing shipping services such asLoship.vn (Ho Chi Minh and Hanoi), Now.vn, Grab, Beamin, etc Distribution intermediaries receive ordersand distribute them by shops Although it is just an add-on service, it also shows that Highland cares moreabout its customers.

2.4 Promotion

Highlands encourages robust communication through posting information about events andpromotions on Facebook, via email marketing, and via mobile marketing (SMS Brand name, games App):Send promotional and advertising messages to consumers in order to provide information to the user.

Highlands Coffee developed significantly throughout the country after being in business for a timeand steadily, so to reinforce its brand, enhance its marketing operations using PR tool.

Highlands employs a variety of promotions and events to reinforce its brand and establish a name foritself with its featured items.

2.5 People

Highlands Coffee's employees are chosen and trained after a rigorous procedure overseen by a skilledand creative management team Highlands Coffee hires the best employees throughout each level Tobecome a Highlands Coffee employee, regardless of position, part-time or full-time, you must fulfill highstandards for working style and service style in order to provide the greatest quality to consumers HighlandsCoffee also employs new personnel on a regular basis, ensuring that I always have a new life in the café As a

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result, every time a client enters Highlands Coffee, they are met with a new and fresh vitality from theemployees Before beginning work, each employee will spend three days learning the fundamentals ofcoffee, as well as the Highlands Coffee service style, before beginning work under the supervision of theteam manager.Highlands Coffee constantly assures excellent service company organization, administration,and operation by implementing contemporary and proper rules, procedures, and criteria for employeeselection and management The organization encourages employees to form connections within the shop,with cross-departmental assistance.

Highlands Coffee's service culture is upbeat and welcoming Highlands' personnel provides excellentservice and always appears to be pleasant, with a grin on their faces Throughout the process of drinkingcoffee at the cafe, there will always be employees available to satisfy all demands and answer any customerqueries.

2.6 Process

The process that Highland Coffee is aiming for is an industrial process by which, from the moment acustomer sets foot in the product until the product isstandardized it will be limited to a fixed time With aprofessional service style, the division of stages for products is also reasonably divided by Highland to bringthe best service to customers The process from the time a customer sets foot in the restaurant until thecustomer leaves is as follows:

From the moment the customer arrives, the service staff will welcome the customer enthusiasticallyand warmly Customers will be advised on drinks, guided to choose dishes After receiving the order, theservice staff will enter information into the computer, calculate the money and send the invoice to thecustomer After receiving money from guests, the staff sends a request form to the bartender department,distributes vibration cards and arranges seats for guests.

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After receiving the order from the waiter, the bartender department will proceed to make drinks anddishes The time to create the dish will be limited to 10 minutes along with using a fixed recipe to create thefood with its inherent taste.

While waiting, customers can sip a glass of filtered water and enjoy the music space at the bar After the drinks and food are prepared, the waitstaff will signal to the customer through a vibrating card, the customer can go to the counter to pick it up or ask the staff to help While using the service, customers can ask staff not far away for assistance.

2.7 Physical Evidence

Highlands Coffee's employees are chosen and trained after a rigorous procedure overseen by a skilledand creative management team Highlands Coffee hires the best employees throughout each level To9

become a Highlands Coffee employee, regardless of position, part-time or full-time, you must fulfill highstandards for working style and service style in order to provide the greatest quality to consumers HighlandsCoffee also employs new personnel on a regular basis, ensuring that I always have a new life in the café As aresult, every time a client enters Highlands Coffee, they are met with a new and fresh vitality from theemployees Before beginning work, each employee will spend three days learning the fundamentals ofcoffee, as well as the Highlands Coffee service style, before beginning work under the supervision of theteam manager.Highlands Coffee constantly assures excellent service company organization, administration,and operation by implementing contemporary and proper rules, procedures, and criteria for employeeselection and management The organization encourages employees to form connections within the shop,with cross-departmental assistance.

Highlands Coffee's service culture is upbeat and welcoming Highlands' personnel provides excellentservice and always appears to be pleasant, with a grin on their faces Throughout the process of drinkingcoffee at the cafe, there will always be employees available to satisfy all demands and answer any customerqueries.

3 Compare

In conclusion, Starbucks and Highlands Coffee bear some similarities in their application of themarketing mix Both of these coffee chains brought a similar products ranges to cater to customers’ need,price tactics are somewhat similar as their target customers is well-off coffee consumers who come to themto experience both the drinks and the excellent services Highlands Coffee also adapted Starbucks’ self-serving idea to make a more wholesome service experience to customer

II Marketing Plan for Starbucks’ Merchandise Line

II Marketing Plan for Starbucks Merchandise Line1 Executive Summary

Starbucks is the leading retailer and roaster for specialty coffee in the world It has over 7,500 storeslocated worldwide As Starbucks continues to expand, it will encounter all sorts of new product markets, withnew and demanding customers for unique and appealing products Starbucks has begun by introducing anextension of the Merchandise line targeted to the set of customers who are loyal customers of the companyand customers who are interested in sustainability Entering this new market, Starbucks faces manychallenges from having to compete to retain brand recognition of its primary products, yet increaseawareness of its new product line Our analysis and research of the market have resulted in key findings asfollows:

• The Merchandise line will help Starbucks position itself in the developing market for the aware and10

concerned young population, who take interest in investment of sustainability; Starbucks will also need toenhance the product perception to maintain the perceived high quality Customers of this segment aresensitive to the quality and longevity of the product

• With this line extension, Starbucks will be facing many new competitors such as Lock&Lock, Thermos orElmich, and other local reusable bottles and kitchen appliances providers Special care must be implementedto maintain Brand equity for its primary product, and not become diversified as the current customers seekalternatives

• Based on our research, we found that consumers at the age 22-30 with stable income from VND10.000.000 who care about trends and sustainability to be the primary potential target market

• Additionally, we have concluded generating awareness about the product via a media campaign with KeyOpinion Leaders (KOL) would be highly advisable A Secondary approach would be Social Media or PrintMedia such as magazines, journals, and newspapers

2 Current Marketing Situation2.1 Market Description

Drinkware is one of the familiar items in many families There are many types of cups on the market whichcome in all shapes, sizes, materials, colors and quality ranging from normal to excellent quality Therefore,this is a very active market with strong growth in proportion to the increase in the country's population Atthe same time, there is strong competition between many domestic and foreign brands In particular,

companies such as Lock&Lock, Thermos and Elmich are names that hold relative market share in Vietnam.Products range from super low prices to expensive branded products, but the quality of the cup alsogoes hand in hand with the value the customer spends Currently, many brands and manufacturers try toseize these lucrative parts from the market As a result, the market share of small businesses andautonomous enterprises accounts for 90% of the beverage cups in Vietnam, especially Chinese products

This is a very promising and challenging new market, in which to create a foothold by specialising indifferentiation is required so that the product can attract the consumers Starbucks now has a definiteposition in this market as it is the only coffee chain that distributes drinking cup products that are diverse intypes, models and innovate regularly The right directions in the past have helped the company to build aloyal customer base for its drinkware products But in order to penetrate this niche market and grow toestablish a name in the industry and contribute to the brand image, new steps need to be discussed.

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 Along with the season collection, there is a basic collection of cups which will be sold in store andonline throughout the year, with classical designs that satisfy the most difficult customers, the onewho like timeless and simple products.

 There will also be collections of drinkware which are collaborations with famous artists and designers,which will be sold worldwide including Vietnam.

2.3 Competitive Review

In Vietnam, the cup market is almost saturated and there is little change on the part of customers andproducers Despite its strong competition, the market is evolving little Starbucks' main competitors likeLock&Lock, Thermos and Elmich, do not have much influence on the decisions and strategies of thecompany.

Since Starbucks has chosen a completely different segment and the market approach, we can viewStarbucks as monopolizing a niche market for premium cups to drink The development of Starbucksproducts has always gone hand in hand and associated with the brand that created it.

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