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

Table of Contents

4.2.2 Infrastructure 10 4.2.3 Media & Technology nan il

4.3 INTERNA TIONAL BUSINESS ENVIRONMENT 22.20002220 122112 kn TH Hs HH Hàn Hy nở 12

5 TARGET MARKET DESCRIPTION 12

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7.3 PROMOTION STRATEGIES LT

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7.3.2 PFOIHOIÍOH TH HH nà HH nàn HH HH HH HH HH HH HT HH Hà HH ng HT t 1 7.3.3 Public relation

9.1 BOOK

9.2 WEB SITE

10 APPENDIX

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1 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 5 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

2 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

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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 5 years,

it grew ata 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

Corn, and Solomon’s FMCG industry, so it's Seal no wonder they're also

at the top of ice cream

in Korean tea brands

Osulloc Tea 1979 Volcanic Rock Semi- Most Korean Osulloc

Fermented Tea, teas, grown in Jeju Samdayeon, Matcha, Island, are USDA, FSC

Rooibos, Green Tea and Carbon Footprint

certified They are also

Nokchawon 1992 Bitter Melon, Korean Nokchawon is one of

Corn, Honey Citron, Korea's tea brands

and Korean Ginseng specializing in Tea supplying brewed tea to

Michelin-starred restaurants, airports, luxury hotels and the like

Lipton 1878 Hibiscus Lime Aguas Lipton is a proud

national sponsor of American Heart Association’s Life is Why program that inspires people to live healthier, longer lives

3 ANALYSIS OF INTERNAL ENVIRONMENT

3.1 Vision

(Song-I, 8 BEST KOREAN TEA BRANDS IN 2021, 2021)

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 modem-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

- Vietnam has ideal conditions for growing tea that produce top quality products

- When joining TPP, the Government of Vietnam will attract foreign

Threats (T)

- In recent years, the erratic

behavior of pests and diseases has been negatively affecting the quantity of tea

- Many tea companies outside of Vietnam will see

an opportunity to make a profit

- Phuc Long will have to compete with many

range of customers

- Using local products, using

raw ingredients like tea

leaves to make their flavorful

products

- With climate conditions,

the taste of Vietnamese tea is

more delicious

- The prices of Phuc Long's

products are suitable and export of packaged products

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 ST

- Phuc Long targets a wide - Strongly promote the - Building a brand image

that increases competitiveness with other competitors

- Differentiate products in terms of quality and

convenience, take the

initiative for users who need

it whenever they need it

reasonable for customers'

- Phuc Long's logo design is

considered impressive with

the combination of colors

- Promote and communicate

so that customers know

more about the product

and letters

Weaknesses (W) W-O W-T

- Rarely exposed to the - Promote your products on | - Supplementing Marketing

budget to promote Marketing activities

- Redesign product packaging for more impression and creativity

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

4, ANALYSIS OF EXTERNAL ENVIRONMENT

- 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)

+ Education attainment and literacy

80% of South Korean high school graduates go on to university Large majorities of South Korean students go on to enroll in some form of tertiary education and leave higher education with a tertiary qualification In 2017, the country ranked fifth for the percentage of 25- to 64- year-olds that have attained tertiary education with 47.7%, 69.8% of South Koreans aged 25 to

34 years old have completed some form of tertiary education with 34.2% of South Koreans aged 25 to 64 having attained a bachelor's degree which is one of the highest among OECD countries (Mani, 2018)

¢ Urban/rural composition

In 2019, there were around 47.6 million inhabitants living in urban areas in South Korea Urban areas referred to areas used for residential, commercial, or industrial purposes According to the source, approximately 91.8 percent of South Korean citizens were living in urban areas that year (Yoon, Urban and rural population in South Korea from 1997 to 2020, 2021)

4.1.2 Government

- Type:

The Government of South Korea is a centralized democratic republic with the three primary branches of government; executive, legislative and judicial (Government of South Korea, 2021)

* Government bureaucracy:

The National Election Commission, the police force, local government, the ceiling recruitment

strategy, and procurement policy (Government of South Korea, 2021)

* Political stability:

Political stability index (-2.5 weak; 2.5 strong), 1996 - 2019: The average value for South Korea during that period in 2019 was 0.48 points (South Korea: Political stability , 2020)

¢ Economic freedom:

South Korea's economic freedom score is 74.0, making its economy the 24th freest in the 2021

Index Its overall score is unchanged, with an improvement in the government spending score offset by declines in investment freedom and financial freedom (South Korea, 2020) + Legal system/regulations:

The country's legal system is based on a civil law system The President is elected every 5- years by popular vote and Prime Minister is appointed by the President South Korea is divided into nine provinces and has a total of 232 lower-level governments within metropolitan cities (South Korea , 2021)

+ Openness to foreifn direct investment (FDD:

Foreign Direct Investment J2017 2018 oD

FDI Inward Flow (million USD) 17,913 |12,183 | 10,566

FDI Stock (million USD) 229 399 | 237,238 | 238,553

Number of Greenfield Investments* 120 136 117

Value of Greenfield Investments (million USD) | 5,234 (SOUTH KOREA: FOREIGN INVESTMENT, 2021) {8,539 =| 3,608

In 2020, the value of foreign direct investment (FDI) inflows to South Korea totaled approximately 20.75 billion U.S dollars based on report amount and decreased by 11.1 percent compared to the previous year Despite the rapid decrease of FDI in the first half of 2020 due

to the COVID-19 pandemic, it recovered quickly in the second half Hereby FDI to South Korea has stayed above the 20 billion U.S dollar level since 2015 While global FDI suffered

a drastic fall in the pandemic, the decrease in South Korea has been comparatively moderate, showing that South Korea is a safe place to invest even during the pandemic (Yoon, 2021)

¢ Currency: Won

* Fiscal and monetary policies:

South Korea to maintain expansionary fiscal policy, slowly shift toward monetary tightening

* Financial stability index:

As of May 2021, the financial stability index (FSD) of South Korea reached 1.8 points, showing

a decrease compared to the previous months The index value reached the highest level in April

2020 and fell thereafter (Financial stability index (FSI) in South Korea from January 2019 to May 2021, 2021)

* Social security:

The major programs included in the system are the National Pension, National Health

Insurance, Long-Term Care Insurance, Child Care, and the National Basic Livelihood Security

System (Sunju, 2015)

¢ Healthcare:

Healthcare in South Korea is universal and funded through a combination of government subsidies, outside contributions, and tobacco surcharges Hospitals and clinics are modern and

efficient, and expats will find a variety of both Western and Eastern treatment option (Health Insurance and the Healthcare System of South Korea Explained, 2020)

4.1.3 Geography

- Surface areas

Geographical location: East Asia

Area: 98,480 square kilometers (38,023 square miles)

Hemispheres: Northern and Eastern

Time zone: 9 P.M = noon GMT

Longest distances: 642 kilometers (399 miles) from north-northeast to south-southwest; 436 kilometers (271 miles) from east-southeast to west-northwest

Coastline: 2,413 kilometers (1,508 miles)

(Geography of South Korea, 2021)

« Major bodies of water:

South Korea has four major rivers: the Han River and the Kum River, the Naktong River and the Somjin River (Geography of South Korea, 2021)

+ Major cities

Capital: Seoul

Big cities: Busan, Daegu, Daejon, Kwangju, Incheon, Ulsan

+ Climate

The climate is temperate, with 4 distinct seasons

South Korea has a continental climate, with hot, rainy summers and cold winters Temperatures range from 22°C to 29°C (71°F to 83°F) in the summers and from -7°C to 1°C (19°F to 33°F)

in the winter months, with warmer winter temperatures along the southern coast and cooler temperatures in the interior (Geography of South Korea, 2021)

4.2 Macro environment

4.2.1 Economy

« GDP:

South Korea is an OECD member and a member of the G20 states In 2020, South Korea's

GDP was around 1.63 trillion U.S dollars (Economy of South Korea, 2021)

ÖÒ GDP per capita (purchasing power parity (PPP))

South Korea Gross Domestic Product (GDP) per Capita reached 31,637.300 USD in Dec 2020, compared with 31,928.800 USD in Dec 2019 (Economy of South Korea, 2021)

- Poverty

In 2019, the share of people in South Korea living with less than half of the median disposable income was 16.3 percent, showing a slight decrease compared to the previous year While the relative poverty rate has fallen steadily in recent years, the figure is still relatively high by global standards, especially among the elderly (Economy of South Korea, 2021),

- Airports

South Korea has 35 operational civilian, military and paramilitary airports Including 8 international airports: These Korean airports serve domestic and international passengers on all continents (List of airports in South Korea, 2021)

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