marketing report trung nguyens marketing analysis

As a result, 89% of respondents selected G7 as their favorite product.+ 2010: Trung Nguyen coffee products are exported to over 60 countries and territories worldwide, including theUnite

MARKETING REPORT

TRUNG NGUYEN’S MARKETING ANALYSIS

Subject: MKT101

Class: MC1804

Lecturer: Đo Vu Thien Nhan

Group 6:

Pham Y Uyen Quynh - SS181127

Nguyen Nhat Gia Han - SS180158

Le Cao Hanh Nhan - SS180520

Nguyen Hoang Anh Tuan – SS181315

TABLE OF CONTENTS

1 Micro environment

2 Macro environment

III Marketing target and positioning:

1 Targeting

2 Positioning

1 Product

2 Price

3 Place

4 Promotion

I COMPANY BACKGROUND:

-Trung Nguyen Group is an enterprise operating in the fields of coffee production, processing and trading; brand licensing; distribution services, modern retail and tourism Trung Nguyen Coffee is one of the leading famous brands

in Vietnam and is present in more than 60 countries around the world (Wikimedia contributors, 2022)

-Formation and development history:

+ 1996: On June 16, 1996, Chairman Dang Le Nguyen Vu established Trung Nguyen in Buon Ma Thuot - the coffee capital of Vietnam

+ 1998: The establishment of the first coffee shop in Ho Chi Minh City marks the beginning of the Trung Nguyen restaurant chain in Vietnam's provinces and countries around the world

+ 2001: Japan and Singapore have had great success with franchising Announcement of the slogan "Inspire Creativity" with products distilled from the best coffee beans, modern technology, unrivaled oriental know-how, and the extreme passions that have brought China to the world Nguyen won over customers all over the country + 2003: The G7 instant coffee product was born on November 23, 2003, at the "G7 Instant Coffee Festival" at Thong Nhat Palace, which drew thousands of participants and made its mark through a blind taste test Choose the most popular instant coffee product from the G7 and the world's largest coffee brand As a result, 89% of respondents selected G7 as their favorite product

+ 2010: Trung Nguyen coffee products are exported to over 60 countries and territories worldwide, including the United States, Canada, Russia, the United Kingdom, Germany, Japan, China, and Asean

+ 2018: Opening of the World Coffee Museum in Buon Ma Thuot; Introduction of the Trung Nguyen Legend Brand and Product System Differentiation - Special - New Unique - New Generation of Trung Nguyen Legend Coffee + 2023: Establishing a representative office in Korea; assisting in the development of Buon Ma Thuot City into the world's Coffee City; launching the "La Forêt en Ville" hotel complex and the "The World Coffee Center" conference center; breaking ground on the construction of the "Loving" and "Happy" school zones in the Coffee City urban area; commemorating the 20th anniversary of the G7 brand conquering the world (Many publics activities)

(Trung Nguyên Legend, 2022)

II MARKETING ENVIRONMENT

1 MICRO ENVIRONMENT

1.1 Company:

-Producing, processing, trading, and franchising the Trung Nguyen coffee brand are the main areas of activity

-Vision: Great vision by serving the human community - Mission: Building a unified human community based on an awakened lifestyle value system that brings true success and value

-Core values: unwavering faith; community service; humanity responds; solid financial foundation

(Trung Nguyên Legend, 2022)

1.2 Suplier:

Trung Nguyen's main ingredients are coffee beans Trung Nguyen chooses the best ingredients from five different regions: Robusta beans from Buon Ma Thuot, Arabica beans from Jamaica, coffee from Ethiopia's original homeland, Brazil - a well-known brand of the world's leading export coffee, and Colombian coffee beans add a variety of flavors Trung Nguyen has many advantages in purchasing raw coffee because of its factory's location in Vietnam's coffee capital, Buon Ma Thuot The company purchases in two ways: through private businesses, traders, and directly from farmers With the first form, when private businesses or purchasing agents are currently facing many difficulties so the company has discovered a new direction for input materials, which is to invest in and directly manage the coffee farms

of the farmers themselves, transforming coffee farms into a part of the coffee industry This allows the company to be proactive in strategic raw materials, thereby contributing to the strengthening of the relationship between businesses and coffee farmers

1.3 Intermidiaries:

-Franchising: Trung Nguyen is the first company to use the franchise business model, establishing a nationwide franchise system and expanding into major markets such as the United States, Japan, Singapore, Thailand, and others China, Cambodia, Poland, and Ukraine are other examples Trung Nguyen offers coffee lovers a unique style of enjoyment imbued with Vietnamese cultural identity and the quintessence of humanity through franchising Coffee lovers everywhere will experience Vietnam's distinct coffee culture at Trung Nguyen coffee franchises

-Large and small distribution systems: In this traditional business model, Trung Nguyen distributes products to three levels of distribution: wholesalers (distributors, large and small supermarket systems), and retailers Finally, there are retailers (small points of sale, retail stores, grocery stores) and consumers

-G7 Mart: is Vietnam's first franchised retail system, with a small scale, large quantity, and rich store location, deep access to people to meet the needs of shopping close to home, convenient with consistent, reasonable prices

-Online distribution channel: Trung Nguyen Legend has announced the official launch of the "Trung Nguyen Legend coffee brand stall" on Amazon This is a watershed moment for the Group as it embarks on the journey of coffee exportation by leveraging the cross-border e-commerce platform

(Chiến lược phân phối của Trung Nguyên – Đưa thương hiệu cà phê Việt ra thế giới, 2022)

1.4 Competitor:

Nestle and Vinacafé Bien Hoa are Trung Nguyen Legend's main competitors, with Nestle standing out with Nescafe instant coffee and Vinacafe occupying a tripod position with Wake up cafe and Vinacafe products With nearly 75% market share, Vinacafé, Nestlé, and Trung Nguyen are the three major players in the Vietnamese coffee retail market

-According to the survey (vinasearch.net), G7 ranked first in first awareness with 40.7% and third in total awareness with 78.3% Despite being in second place and having a significant difference in first awareness compared to G7 (31.0%), Nescafe has the highest total awareness of 84.3% Vinacafé Bien Hoa ranks third and fourth in both the first awareness index (19.0% and 4.8%), as well as total awareness (81.7%)

(Đối thủ cạnh tranh - Báo cáo thực tập “Chiến lược phân phối cafe Trung Nguyên,” 2014)

-Besides, Trung Nguyen also applies the following model to their competitive strategy:

(Phân tích mô hình 5 áp lực cạnh tranh của Trung Nguyên, 2022)

1.5 Publics:

-At the beginning of 2022, under the direction of President VU, Trung Nguyen Legend received the responsibility of accompanying the People's Committee of Buon Ma Thuot City to implement the Project: "Developing the brand name

of Buon Ma Thuot city to become a 'city' coffee of the world', developing eco-tourism, exploiting local cultural values associated with national monuments" On May 27, 2022, Trung Nguyen Legend Group participated in the scientific conference: "Developing the brand of Buon Ma Thuot city to become a better city in the future, become the "Coffee City of the World", developing eco-tourism, exploiting local cultural values associated with national monuments" by the City People's Committee Buon Ma Thuot organized with the participation of 300 delegates including ministries, central branches, international organizations, scientists, experts in the field of coffee, tourism and cities under the province (Trung Nguyên Legend, 2022)

1.6 Customer:

-Trung Nguyen Legend's customers are aged 25-45, who have a taste for strong coffee, business stories and learn about business

-Trung Nguyen has 3 product lines in 3 different price segments to diversify target customer segments with different income sources:

+ High-end segment: Weasel coffee, legend coffee (Class A: 15m - 150m)

+ Mid-end segment: products from the G7 brand and traditional coffee lines of Trung Nguyen continue to be sold and target the middle-class customer market (Class A and B)

+ Low segment: G7 instant coffee products, targeting the general customer market (Class B: 7m5 - 15m)

- The target customer of Trung Nguyen coffee belongs to the group of Habitual shoppers, usually buys in the morning and buys 3-4 times a week on average (Mar, 2022)

2 MACRO ENVIRONMENT:

-Physical, geographical, and climatic factors all have a significant impact on coffee products Trung Nguyen chose a reasonable location, rich in potential for coffee tree development, and transformed it into a professional coffee intensive land (Anh, 2021)

-Vietnam's coffee consumption potential is quite low; domestic consumption is approximately 3.6%, the lowest among coffee producing countries (according to the World Coffee Association) Director Dang Le Nguyen Vu focused on exporting roasted coffee products and launched instant coffee products (2003) to enter the domestic market, catching up with the "industrial" coffee trend and today's fast pace of life The product has been a huge success for the company and demonstrates the strength of the Vietnamese brand (Anh, 2021)

-Trung Nguyen Legend has always been a pioneer in accepting the responsibility of implementing comprehensive and comprehensive strategies to affirm that Vietnam is not only a powerhouse of coffee exports, but also a center of ideology, philosophy, and culture Contributing to the Central Highlands becoming a model area for sustainable development by aligning benefits for all stakeholders

(Trung Nguyên Legend - những dấu ấn khác biệt của năm 2020, 2021)

III MARKETING TARGET & POSITIONING

1 TARGET MARKET

The criteria to show the target market are clearly divided into the following segments:

Demographics: The majority of coffee drinkers range from students to middle-aged

Occupation: Student, office worker, worker, businessman

Income: People with a middle-high income have a habit of using coffee more often.

Psychology: Vietnamese people have the style of enjoying coffee slowly, sipping, and thinking Coffee is often chosen for meetings and exchanges The taste of Vietnamese people is coffee rich in natural flavor, with mild acidity, freshness, and mild aroma

Consumption habits: According to statistics, 65% of Vietnamese coffee consumers have a habit of drinking coffee 7 times a week, of which the rate is inclined to men with 59% 21% of instant coffee consumers use coffee 3-4 times a week The popular drinking time is from 7-9 am

Based on the segmentation of the Vietnamese coffee market, Trung Nguyen has aimed to serve customers ranging in age from young to middle-aged This is the age where the need for meetings and group conversations is very high for a multitude of reasons such as group meetings, business discussions with partners, etc Right from its early days of establishment, Trung Nguyen coffee has appeared throughout the world nationwide in the form of franchised coffee shops Compared with other brands, each cup of Vietnamese coffee is sold at a relatively cheap price, ranging from 20-40,000 VND/cup, compared to 40- 65,000 VND at brands like Starbucks and Highlands Building a store system with a different positioning from traditional stores with unique quality and style Thereby helping Trung Nguyen own a network of nearly 1,000 franchised cafes across the country

2 POSITIONING

2.1 Positioning based on product characteristics

At Trung Nguyen, coffee lovers can experience a truly special way to enjoy their favorite beverage while connecting with Vietnamese culture Here, they will come to understand the country's unique coffee culture, which emphasizes the philosophical values that have guided humanity in discovering creativity, balance, and sustainable development 2.2 Positioning based on competitors

Trung Nguyen coffee is up against some stiff competition in Vietnam, with Nescafe dominating the market with 55.95%, and Vinacafé close behind with 38.45% All other coffee brands make up the remaining 5.6% To stand out from the competition, Trung Nguyen Coffee implemented a strategy to slowly build trust with customers, mainly by emphasizing the quality of their coffee Nescafe is the biggest threat to Trung Nguyen Coffee and they have two options to compete: either directly or by occupying market areas that Nescafe doesn't When Nescafe came to Vietnam, it quickly outdid Vinacafe and became the top coffee brand In response, Trung Nguyen Coffee released G7,

an instant coffee brand made from 100% Vietnamese coffee beans This caused Nescafe to change its slogan from

"Starting the day" to "new" through 100% of Vietnamese coffee To prove the quality of their product, Trung Nguyen

Coffee held a "blind test" at the Reunification Palace in Ho Chi Minh City and 89% of consumers chose G7 over Nescafe This confirmed the quality of Trung Nguyen Coffee's 100% Vietnamese coffee products

IV MARKETING MIX

1 PRODUCT

1.1 Characteristics of Trung Nguyen coffee products

Branding: G7 instant coffee products have a short and easy to remember name The name G7 stands for

“ Group of industrial countries” consists of 7 developed countries (US, UK, France, Japan, Canada, Germany, Italy) G7 is also the target market of Trung Nguyen, and above the logo is the phrase “made in Vietnam” That confirms the product is made in Vietnam and It’s also the effort to bring Vietnamese coffee beans further into the international market (Ngọc, 2011)

1.2 Trung Nguyen products (Wikimedia contributors, 2022)

1.2.1 High-end product line

a) Cà phê Chồn (250gr)

The most premium products of Trung Nguyen, made from Kopi lewak seeds harvested naturally and through strict inspection Limited production of 40-50 kilos a year (Cà phê WEASEL, no date)

b) Cà phê chồn Legend (225gr) (Thái, 2020)

Kopi Lewak (Arabica, Robusta, Excelsa) Manafactured by biologically fermentation

c) Legend gift box

Included 1 box of Cà phê chồn Legend and accessories (Thái,

2020) d) Sáng tạo 8 (250/500gr) (Thái, 2020)

Mix of Vietnam, Jamaica, Brazil, Ethiopia coffee beans Contains Arabica, Robusta, Excelsa beans

1.3 Trung Nguyen roasted coffee product line

Midrange segment

Chế phin 1: from Culi Robusta beans

Chế phin 2: from Robusta & Arabica beans

Chế phin 3: from Arabica beans

Chế phin 4: from 4 type of beans (Arabica, Robusta,

Catimor & Excelsa)

Chế phin 5: from Culi Arabica beans

Sáng tạo 1:Culi Robusta (bitter with black color) Sáng tạo 2: the combination of Arabica & Robusta Light brown color with a bit of bitter Caffeine content at roughly 2%

Sáng tạo 3: Arabica Light brown color, soothing feel Sáng tạo 4: made from Culi Arabica,

Robusta, Excelsa, Cartimor Special taste with dark brown color

Sáng tạo 5: Culi Abrabica from Lâm Đồng provinvce.Has a distinctive aroma, less bitter and brownish black color (Wikimedia contributors, 2022)

2 PRICE

2.1Price Strategies: Cost-based pricing and Market - Penetration pricing for new products

Trung Nguyen is inherently a brand and is “born late” compared to the long-standing Vietnamese brands such as Nescafe or Vinacafe Moreover, Vietnam is still a developing country, the vast majority of people have average income, but not high Therefore, the initial goal of determining price is to keep abreast of competitors' prices, and do everything possible to reduce prices to the lowest level to create competitive advantages and win sympathy from domestic consumers (Trang, 2021, p 6)

To do that, Trung Nguyen has actively proposed many effective policies to reduce costs for production, transportation and business management stages:

The factory is located in Buon Ma Thuot, and built its own coffee farm to supply raw materials This help ensure the lowest shipping and purchasing price

Invest in high-tech lines and the most advanced machines for two main production plants to maximize labor productivity and product quality

Diversify price levels, depending on product types, customer segments

Trung Nguyen uses cost-based pricing and market - penetration pricing for new products Thanks to the successful application of the above policies, Trung Nguyen’s prices are now considered more reasonable than competitors (Trang, 2021, p 7)

2.2 Product Mix Pricing Strategies:

2.2.1 Product line pricing:

Common products: Instant coffee, N coffee, I coffee, S coffee,

Mid-range products: Passiona coffee, Sang Tao coffee, House Blend coffee, Gourmet Blend coffee, Phin coffee,

High-end products: Weasel coffee, Legendee coffee, Classic Blend coffee,

2.2.2 Product bundle pricing:

Trung Nguyen has many product combos with preferential and attractive prices for customers

For example: The Spirit Of Philosophy(Vitruvian), The Spirit Of Philosophy(Hemingway), The Spirit of Creativity (Adam), Binh An Combo, Chia Se Combo,

- The Spirit Of Philosophy (Vitruvian) product set

includes:

01 box of Legend Roasted Coffee – 150 g

01 Vitruvian stainless steel vacuum bottle

01 Vitruvian stainless steel phin filter

01 Vitruvian stainless steel cup

01 stainless steel spoon

01 USB pen + 01 cloth bag

01 product introduction sheet

01 book of Meditations Every Day

(The Spirit Of Philosophy (Vitruvian), no date)

- Binh An Combo includes:

01 Phin Giấy Vietnamese Blend Coffee

01 Sáng Tạo Coffee

01 Legend Classic Coffee – 12 packs

01 Legend Special Edition Coffee – 18 packs

02 Brother Cream (sugar)

01 Vĩ Nhân aluminum phin filter (Combo Bình An, 2022)

2.3 Price Adjustment Strategies:

2.3.1 Psychological pricing: for foreign markets, especially Japan

Different from the domestic pricing plan, when reaching out to the world, first of all, to Japan, Trung Nguyen uses an extremely “surprise” pricing method: value - based pricing and psychological pricing

Franchisees price each cup of Trung Nguyen coffee 50% higher than Starbucks and 25% higher than domestic products

Actually, Japanese people have a habit of drinking coffee for a long time Therefore, the appearance of a completely new foreign coffee brand with a price much higher than domestic coffee makes the Japanese feel extremely curious and excited The delicious, passionate Buon Ma Thuot coffee beans have conquered the fastidious Japanese right from the first try

As a result, it is this “unique” pricing strategy that has helped Trung Nguyen achieve success in Tokyo on the way to penetrate the international market and a lever for the development of franchise systems

2.3.2 Promotional pricing:

Taking advantage of understanding of local culture, Trung Nguyen also taps into the “cheaper price” mentality of Vietnamese people by regularly organizing price incentives on special days such as Black Friday, Tet Holiday, 20/11, Valentine, 12.12, 10.10,

3 PLACE