Yun Ju Young - CEO of GS25 Vietnam Company, in Korea, convenience stores account for 15% of the total retail market, Vietnam is just over 2%, so Vietnam has a very big potential.. The re
TYPE OF RETAIL
Why is a Convenience Store?
A recent Nielsen study revealed the pivotal role of convenience for consumers, driving the surge in convenience store proliferation, particularly in urban areas Vietnameses' evolving demographics, with younger consumers demanding greater convenience and personalized experiences, have fueled this growth The rapid multiplication of convenience stores caters to the fast-paced lifestyles and evolving needs of the Vietnamese consumer base.
According to information provided by Nielsen, on average, there will be one store for every 1,000 people, while in Vietnam, there is only one store for every 69,000 Vietnamese In fact, in Japan, Korea and China, convenience stores are the fastest growing retail channel as the economy grows and income levels rise According to Mr Yun Ju Young - CEO of GS25 Vietnam Company, in Korea, convenience stores account for 15% of the total retail market, Vietnam is just over 2%, so Vietnam has a very big potential Therefore, the number of convenience stores must be tripled to satisfy the increasing demand of consumers
Vietnam's retail revenue in 2017 was 129.5 billion USD, up 10.9% compared to
2016 According to the General Statistics Office's forecast, by 2020, Vietnam's retail trade growth rate will reach 11.9%/year, and the market size is about 179 billion USD The retail market in Vietnam is developing and full of potential, young people, especially students, are very interested in convenience stores Realizing the potential market and increasing demand of young consumers, we decided to start up a convenience store The success of Lotte Group in Vietnam is also the motivation for BCS to choose a convenience store startup in the Vietnamese market.
About the Best Convenience Store (BCS)
BCS is a start-up company about a chain of 24/7 convenience stores, founded in the year 2022 With an aim to develop into one of the leading brands of convenience stores inside the domestic market, our retail brand craves for offering customer trust and satisfaction when having an in-store shopping experience, creating a sustainable belief on account of the prestige and quality in each product and service As a result, the name “The Best Convenience Store” (BCS) was given
As a very young convenience store brand, when entering the retailing market in Vietnam, our convenience store chain will joint venture with Son Kim Group to start up
Pursuant to the joint venture agreement, BCS will hold a 40% stake, while Son Kim will hold the remaining 60% BCS will contribute its trademark rights and convenience store management expertise to the venture, while Son Kim will pay royalties and retail revenue commensurate with BCS's 40% interest This partnership aligns with Son Kim's extensive operations in real estate, media, and retail, including a substantial lingerie store chain and fashion centers, providing valuable support for BCS's retail expansion plans.
At the beginning of its establishment, BCS was formed with a total starting capital is 9.050.000.000 VND, with:
It is reported that the general finance resources have been added annually by revenue from business activities of retailing physical stores and e-commerce, especially by the floating capital of the company
• Brand strength and reputation: BCS has a great ambition to become one of the most recognizable convenience store brands, be a reliable and efficient retail trader within Vietnam's commercial market
• Convenience and coverage: In order to make sure that customers can easily access our stores, BCS aims to place the retail locations all over, particularly close to densely populated areas
• Customer service: Our retail stores strive to offer excellent customer service, oriented towards friendliness Providing customers with interesting shopping opportunities
• Product range: A wide range of products are available from BCS Drinks, snacks, fresh food, coffee, as well as common household appliances, cosmetic products, and other things are included Our desire is to accommodate all the basic demands of the customers
To enhance customer convenience, businesses should prioritize mobile-driven experiences Implement a mobile app or website that enables scanning and payment, allowing customers to complete purchases seamlessly This not only streamlines the shopping experience but also promotes social distancing.
Our retail stores offer seamless card payment options for enhanced shopping convenience Customers can pay with a wide range of credit cards like Visa, Mastercard, Dinner Club, Amex, and JCB Additionally, domestic debit cards are also accepted, providing customers with multiple payment choices to simplify their purchases.
• Made-to-order foods: Besides the assortment of grab-and-go food and refreshments,
BCS offers breakfast food combos for our shoppers Crispy Vietnamese Baguettes with Iced coffee, Stir-fry noodles, or fresh sandwiches can easily delight our customers in the morning Beyond breakfast, warmed deli, hot foods, and made-to-order items fill a market hole for customers that want a hot meal but do not have to cook themselves, which is less expensive than a restaurant and much healthier than fast food
- Vietnamese Menu (Menu Thuần Việt):
• BCS intends to build our own supply chain to supply fresh ingredients to make Vietnamese foods served in our store Since we are a Vietnamese start-up project, we wish to provide Vietnamese food to our customers more than other popular fast food easily found in many convenience stores such as Korean rice cake, fried food or mixed noodles Moreover, our company believes the idea of serving Vietnamese food will strengthen the campaign "Vietnamese people give priority to using Vietnamese goods"
• At the moment, there are not many convenience stores that serve Vietnamese street food and Vietnamese people give priority to using Vietnamese goods, therefore, we believe our Vietnamese menu (Menu Thuần Việt) will attract many customers and be strongly supported Vietnamese spring rolls (Goi cuon) and Bo La Lot will be first introduced in our menu These two dishes are known as native street food, however, they are nutritious enough and really flavorful to satisfy our customers
• With the idea of supporting Vietnamese cuisine, our BCS also intends to have a collaboration with Trung Nguyên E-coffee to serve local coffee beverages.
TARGET MARKET
Target Market Analysis
In terms of income and age, our convenience stores serve all age ranges, and anyone is welcome to visit the store and purchase goods Domestic workers, students, and housewives are among the most frequent customers among adults and kids People with low incomes can also purchase goods here because of the wide variety of goods available and the reasonable prices; these products range from common household items to imported goods and food A survey conducted by our group shows that the main class of customers that pay attention to convenience stores is from 19 to 24, followed by the age from 15 to
Figure 2.1.1: A survey about the age of customers
Other research also indicates that junk food, street food, and milk tea are top priorities for young people aged 15 to 19 On weekday mornings, the most popular foods are junk food (32%), street food (30%), and specialty coffee (25%) Door-to-door food delivery services are utilized notably heavily at midday (36%), probably to save brief lunch breaks Thus, our store creates some categories of products to fascinate that group of age like fast food and street food Besides, young individuals aged 20 to 24 who are students or new to work frequently utilize food delivery services and consume milk tea both during the week and on weekends The diversity of street stores also caters to their nightlife It is possible to say that the 20-24 age group is a prospective group of nighttime street stores Hence, BCS decides to open 24/7 and makes space with a lot of seats to opportunity those people can stay here and work for a long time along with the high quality of our service Furthermore, we also collaborate with Trung Nguyen E-coffee, which is a chain of coffee world retail stores of Trung Nguyen Legend Group – the quintessential convergence of 3 coffee civilizations: Ottoman – Roman – Zen launched in the period of 8/2019 We believe that our collaboration will bring a new experience to those people that be in favor of traditional coffee and want to try tasty foods as well as great services in our convenience store
Besides, the demographic analysis also focuses on the income level of customers Our recently conducted survey implies that the main group of buyers in convenience stores has low to moderate levels of monthly income Thus, our strategy is to serve products at a wide range of prices but center on the category of low-price merchants
Geographic segmentation is a marketing tactic used to target goods or services at customers that reside in or frequent a specific area It operates under the tenet that locals have common needs, desires, and cultural considerations Therefore, in order to meet this strategy, first of all, we have to focus on areas near schools, which are often crowded by students Students, who are our target customers, will prefer the products in convenience stores such as snacks, fast foods, soda, etc After determining the sites, in order to create attraction and stimulate curiosity for young people, students, and pupils, seasonal promotions are necessary to be operated to increase the sale revenue Last but not least, the number of items adjusted is inevitable to meet the needs of each area We must modify the number of commodities in accordance with the distinctive needs of each region To be more precise, we must increase the proportion of popular goods and decrease the proportion of slow-moving ones
Psychographics, along with demographics and geographics, is a crucial qualitative method employed by retailers to analyze customers' psychological characteristics BCS focuses on deciphering consumer emotions and values through six key factors: personality, lifestyle, interests, opinions, attitudes, and beliefs, values, and social status Understanding these factors allows retailers to tailor marketing strategies that resonate with the psychological makeup of their target audience, effectively influencing their purchase decisions.
Serving famous and traditional Vietnamese dishes, focusing on Vietnamese customers, and bringing them to consumers in a more appealing, sanitary, and high-quality manner Prices should be moderate and appropriate for people of all ages and social classes Besides, combining other utility services such as paying electricity, water, and phone bills, as well as withdrawing money…
Sorting garbage, limiting the use of plastic waste, using recyclable or easily destroyed items, and heeding the environmental protection message
The seating service must be served, and a charging socket has been installed The space must be clean, wide, and decorated with vibrant colors and dynamic images, short maxims, or encouragement in life Clean and odorless toilets are also important factors influencing customer choice and loyalty Free wifi and a stable network Customers fill in the information to access wifi, through which BCS can collect information or take surveys from customers, in addition to running promotions on the login app Finally, there is a parking space and a security guard to keep an eye on the car while customers shop at the store
BCS informs customers about promotions and discounts via the app, website, or Facebook; proposing many different promotions throughout, offering customers at the cashier
Use a variety of payment methods besides cash such as Zalopay, e-wallets, and banking, etc
The staff treats customers with enthusiasm and friendliness, always saying hello, thank you, and goodbye to show respect and make good impressions on customers
Customers are grouped based on the benefits they seek in a product, service, or company in order to persuade them to purchase Food and drink, for example, are the two most popular items at convenience stores; the rest are popular products that are closely related to customers' daily lives
BCS employs data from customer purchases and browsing history to identify patterns and personalize recommendations Customers who regularly make morning purchases at convenience stores, such as coffee and breakfast items, are targeted with promotions that offer discounts on these products.
Many customers fall into one of three engagement categories:
• Occasional: These customers are familiar with our brand, but they rarely buy The majority of them are passersby who require an item quickly
• Regular: Customers who buy and shop at the store on a regular basis, such as students, officers, and residents
• Intensive: These are typically the most loyal customers
Knowing customer engagement is important for having the right approach, as well as doing statistics or finding the best location to open new store branches in the future
Determine the “rush hour” time of day when the store is crowded so that staff and product materials can be best prepared, reducing waiting and out of stock
Another important type of behavioral segmentation is customer satisfaction (feedback) It aids in the development of stronger customer-company relationships and provides an opportunity to resolve or improve an issue prior to customer dissatisfaction
We can also use follow-up surveys when customers connect to wifi, text messages to gauge customer satisfaction, or satisfaction ratings after a payment is made
Learning which customers are your most loyal—and retaining them as long-term customers—can be accomplished by collecting customer phone numbers or accumulating points through the app to redeem gifts, receive birthday vouchers, or participate in a variety of other promotions Furthermore, we can leverage their ongoing support to highlight the value of our products and services while also appealing to new potential customers.
Trade – Area
The store is close to neighborhoods, schools, and other amenities This can provide clients from a wide variety of segmentations with a high level of accessibility, particularly students Additionally, we should think of certain natural and man-made barriers (traffic flow) to make it easier for clients to enter and exit the property Additionally, we can utilize some benefits to generate better accessibility, such as being close to a bus stop, opposite or next to schools, We also must have a parking area, which will be convenient for customers when they come to our store
To make it simpler for people to learn about the store's existence whenever there is a need and to access it from various directions, choose locations where there are few natural and physical barriers
• Streets: Students must cross the streets in order to reach the store which is located at the opposite corner of the road
• Houses and Buildings: If surrounding buildings are higher than stores
• Too far: Students who are not provided with personal vehicles will feel difficult to reach the store
2.2.3 Type of store: Convenient store with Vietnamese specialty
2.2.4 The nature of merchandise, assortment, and location of alternative sources for the merchandise:
BCS provides a large assortment of Vietnamese products, foods which have Vietnamese unique cuisine and flavor like spring rolls, and we also have fast foods like noodles and other stuff for students to choose BCS also provides a resting place for customers, especially students who don’t have seats outside, or just a place where they can have a short break before going back to work or study in the afternoon
BCS must face competitors including:
• Other convenience stores, a store that has Vietnamese specialties has to face Korean or Japanese convenience stores, which already have a huge number of customers who choose them
• Coffee shops provide a low-cost resting place, where you can stay with only 1 cup of coffee
LOCATION ANALYSIS
TOPSIS method
Technique for Order Preference by Similarity to the Ideal Solution (or TOPSIS) selects the alternative that is closest to the ideal solution and farthest from negative ideal alternative
• Ideal alternative: the one which has best level for all attributes considered
• Negative ideal alternative: the one which has the worst attribute values
This technique assumes that we have m alternatives (options) and n attributes/ criteria, and we have score for each option with respect to each criterion
Let 𝑥𝑖𝑗 score of option i with respect to criterion j
Let 𝐽 be the set of benefit attributes or criteria (more is better)
Let 𝐽′ be the set of negative attributes or criteria (less is better)
❖ Step 1: Weighting the criteria: we give weight to the attributes, which are considered more important than others will have higher weight In our opinions, the level of importance is increasing from Restriction < Convenience of store location < Pedestrian and vehicle customer < Occupancy cost < Size of trade area
❖ Step 2: Normalize scores or data as follows:
❖ Step 3: Construct the weighted normalized decision matrix, which has element is 𝑣 𝑖𝑗 = 𝑤 𝑗 𝑟 𝑖𝑗
❖ Step 4: Determine the ideal and negative ideal solutions
𝑣𝑗 ∗ = {max(𝑣𝑖𝑗) 𝑖𝑓 𝑗 ∈ 𝐽, min(𝑣 𝑖𝑗 ) 𝑖𝑓 𝑗 ∈ 𝐽 ′ } Negative ideal solution: 𝐴 ′ = {𝑣1 ∗ , … , 𝑣𝑛 ∗ }, where:
❖ Step 5: Calculate the separation measures for each alternative
The separation from the ideal alternative is:
𝑗∗ −𝑣 𝑖𝑗 ) 2 with i = 1, …, m Similarly, the separation from the negative ideal alternative is:
❖ Step 6: Calculate the relative closeness to the ideal best and worst solution 𝐶 𝑖 ∗ and 𝐶 𝑖 ′
𝑖∗ +𝑆 𝑖′ , select the alternative with 𝐶𝑖 ∗ closest to 0
𝑖∗ +𝑆 𝑖′ , select the alternative with 𝐶𝑖 ∗ farthest from 0
Following those steps, we have:
Criteria Size of trade area
Pedestrian and vehicle customer traffic
➢ Step 3: Construct the weighted normalized decision matrix
Criteria Size of trade area
Pedestrian and vehicle customer traffic
Criteria Size of trade area
Pedestrian and vehicle customer traffic
➢ Step 4: Determine the ideal and negative ideal solutions
Criteria Size of trade area
Pedestrian and vehicle customer traffic
➢ Step 5: Calculate the Euclidean distance from the ideal best
The pedestrian and vehicle customer traffic
Calculate the Euclidean distance from the ideal worst
Through out the TOPSIS method, as the result in the step 6, it come to conclusion that Nguyen Gia Tri Street will be the most sufficient and convenient street to site a store
The pedestrian and vehicle customer traffic
Thus, the Huff’s Gravity Model then will be utilized to identify the appropriate exact location to build up a store.
Huff’s Gravity Model
We have the formulation of Huff’s Gravity Model:
𝑃𝑖𝑗 = Probability of a customer at a given point of origin traveling to a particular shopping center j
𝑇 𝑖𝑗 = Travel time or distance from customer's starting point to shopping center b = An exponent to that reflects the effect of travel time on different kinds of shopping trips
After a long period of time for taking into consideration the site location, we have decided to buid up our first new store at 36/70 Nguyen Gia Tri ( with the size area of 102 m 2
Choose the customer‘s starting point is the school zone and the travelling distance will be the total gap between our store as well as those nearest convenience stores and the school zone
Location Size (square meter) Travelling distance
Family Mart (190 Nguyen Gia Tri) 95 0.1
Determining the potential sale of the new retail store after a period of operation is one of the key element affecting the decision of siting the location in which area In order to estimate the expected revenue of store, we first verify the market size of each area denoted above According to Steven, author of the article “What is the definition of market share” defined market size is the number of sales or customers who are potential to the business it can be found out by looking at existing sales numbers, or in simplified meaning, is the total potential number of customers or sales, usually in a given year
Following the market research we have made, the average amount of money that customers are willing to pay is 100,000 VND per time for shopping in convenience store
Figure 3.1.2: The average amount of money per time for shopping of customers
In the area surrounding Nguyen Gia Tri Street, the number of customers is extremely large, derived from the visitors who come to variety of convenience stores, the hospitals; and undergraduates from the nearby school zone as well as the inner residents It is estimated that the total number of potential customer on this street is 4,600,000 customers visit to Nguyen Gia Tri Street per year Hence, the market share that those customers brings to this street at Binh Thanh district is total 460 billion VND
Let choose the location of the nearest conveniece stores on D2 street, which are Circle
The probability of customer in the firts nearby convenience store, Circle K (27 Nguyen Gia Tri), vistiting to the start-up store on Nguyen Gia Tri Street:
102 0.5 0.45+0.5 85+0.14 100+0.1 95+0.27 67 = 0.073 For the store Circle K (113 Nguyen Gia Tri):
Continue for the remain stores, the probability will be 0.411 and 0.107, respectively for store Family Mart and Ministop
Thus, the expected selling revenue is:
The most important factor for any retail store, especially a new brand is location As a result, to decide where to locate the store, we carefully considered many aspects based on factors such as the size of the trade area, the occupancy cost of the location, the density of people movement and customer demand there, the pedestrian and vehicle customer traffic, property restrictions, the level of convenience with respect to customers, and competitors The following are some of the most obvious benefits and drawbacks of locating BCS's first store on Nguyen Gia Tri Street
Nguyen Gia Tri, also known as D2 is considered one of the super famous culinary streets in Saigon that is popular with foodies This route is an outstanding site of Binh Thanh district because of the high-quality service that offers the most unique shopping, dining and entertaining experiences Besides, the density of movement and traffic is frequent because it is surrounded by Foreign Trade University, Hutech University, Industry University, University of Transport, Gia Dinh high school…
Another plus point of this location is that it is easy to identify and access; the road width is quite wide with no median strip, and there are sidewalks on both sides of the road
In general, the cost of renting space is less than that of the other locations on our consideration list, and this also includes the parking area in front of the store
This bustling street boasts a vibrant food and beverage scene, featuring both renowned brands and sidewalk eateries The presence of 24/24 cafes adds to the lively atmosphere A 24/7 convenience store near these establishments is likely to attract a substantial student and youth demographic BCS, with its focus on traditional Vietnamese dishes and emphasis on environmental and hygiene concerns, is well-positioned to capture a significant customer base in this prime location.
• Compete against food and beverage brands
As mentioned above, this is a busy eating street, so convenience stores must compete with many food startups and well-known brand F&Bs, as well as nearby street vendors
• Compete with other convenience stores
There are currently five convenience stores on this road: two Circle K, two ministops, and one Family Mart, all of which are well-known brands in Vietnam, and thus remain BCS's main competitors However, based on actual observations and market estimates, BCS can be successful in putting a new store here due to high customer requirements despite the wide street and busy traffic density
This route occasionally has traffic jams during peak hours, especially when schools dismiss at the same time or people spill from district 2, Go Vap district
BCS, a startup convenience store, competes fiercely with established players like Circle K and Gs 25 in Vietnam's FMCG retail market To determine channel profitability, BCS seeks to reach customers through intermediate touchpoints NielsenIQ's Consumer Behavior Trends Report reveals the growing trend of Omni shoppers, particularly among the 18-30 age group, which aligns with BCS's target market.
Figure 5.1: The development of omni shopper for 3 years
With a view to attracting and accessing a large number of customers and delivering the products and services, BCS has applied some retail channels to target different audiences and be suitable for the specific features of the merchandise As a result, customers can quickly look for and purchase those products anywhere or anytime that they need and feel convenient for themselves
The first retail channel our company focuses on is a physical retail store to provide merchants and services with fast demand for passengers or pedestrians The essential advantage of having a brick-and-mortar retail store is to introduce the products to customers in the context of allowing them to experience the products and related services and then build on that experience and relationship in person so that it stays with them It is crucial for our convenience store, in which foods are prominent among the remaining products Thus, having a retail store is an opportunity for BCS to allow our customers experience the tangibility of the products and the services as well as leverage the human touch factor by having store associates engage with the customers directly for assistance and promoting sales
In addition, with regard to the group of busy customers, who have little time to go shopping, BCS also distributes products via the website, online app, and e-commerce marketplaces like Shopee food and Grab food With the appearance of a series of websites and e-commerce platform applications such as Shopee, Lazada, Zalora, or JD , customers can easily shop for everything A survey conducted in 2022 by NielsenIQ shows that 73% of consumers said they regularly make purchases on e-commerce shopping platforms and 59% said they have repeatedly ordered or shopped on international websites
Figure 5.2: The frequency of shopping online and offline of customers
Furthermore, in the context of supply chain disruptions and inflation, users have quickly adjusted their shopping behavior, actively switching between purchase channels to ensure a consistent shopping experience These channels will provide online buyers with a diverse range of products and prices; support them with the delivery system within the city to save time in purchasing
Figure 5.1.1: Merchandise mix diagram of BCS
Figure 5.1.2: Merchandise mix diagram of General Merchandise
Figure 5.1.3: Merchandise mix diagram of Health and Beauty products
Figure 5.1.4: Merchandise mix diagram of Edible Grocery
Figure 5.1.5: Merchandise mix diagram of Food Service
Figure 5.1.6: Merchandise mix diagram of Beverage
Assortment Mix
Food and Drink are the most popular among customers with a percentage of 55.3% and 35.7% The second category holding 15.5% is General Merchandise The Health and Beauty category takes up 4.1%
Figure 5.3.1: The percentage of good’s catogories
As research we have made, Food and Beverage are the best seller categories The strategy to attract more customers is to design the layout of the store, arrange the food and drink sections near each other, which triggers customers’ demand when they buy food, they will want to buy drinks Provide a menu with a variety of products and combos that includes both food and drink
This part will focus on the depth of merchandise of BCS For further detail, in each category variety, BCS offers multiple items for the customer to choose
First, Food and Beverage categories will be divided into several parts:
• Edible Grocery: o Candy and Biscuit:
▪ Candy: Trident, Ferrero Rocher, Meji, Hershey, Nestle, Ritz, Xylitol, Kit Kat, Tic Tac, Milka, Skittles, Snicker, Haribo
▪ Biscuit: Mar, Choco Pie, Custard, LU, Oreo, Belvica, Pladis, Guylian, Kinh
Do o Packaged food: Bread, Sandwich, Rice, Noodle o Chip and Snacks: Oishi, Kara Mucho, Kinh Do, Bento, Ocean Fish, Orion,
▪ Ice cream: Celano, Vinamilk, TH true cream, Milo, Oreo, Merino, Wall
▪ Milk: Milo, Vinamilk, Fami, TH True Milk, Da Lat Milk, Dutch Lady, Proby
▪ Yogurt: Da Lat Milk, Vinamilk, BaVi, Dutch Lady
• Food Service: o Hot Serve: Pho Xao, Bo La Lot, Bap Xao o Cold Serve: Banh Mi Que, Goi Cuon
• Liquor: o Beer: Corona, Tiger, Heneiken, Saigon, Strongbow, Budweiser, 7 Bridges,
Blanc, Vodka, 333, Leffe, Trappe, Engel, Steiger, Sabeco, Carlsberg o Liquor: Imperial Blue, Soju, Whiskey, Vodka, Jeagermeister
• Soft Drink: Aquafina, Lavie, Dasani, Milk tea, etc
• Energy Drink: Monster, Bull, Vietnamese coffee, Espresso, Latte, Tea Plus,
BCS offers a variety of products in every category (Food, Beverage, General Merchandise, Health and Beauty) The data in the following figure shows that 3 categories: Hot Serve Meal, Cold Serve Meal, and Coffee are preferred by many customers As BCS is a convenience store, the Food and Beverage category always takes the highest percentage of SKUs The Vietnamese Menu that serves: Goi Cuon, Bo La Lot, Banh Mi, … is the uniqueness of BCS BCS wants to honor the Vietnamese Culinary Culture and sell Vietnamese goods for Vietnamese people
Figure 5.3.2: The percentage of assortment mix
PRICING
The main pricing strategies
Understanding customer behavior is crucial for pricing decisions Customers primarily focus on price and product quality Pricing significantly impacts profitability High prices hinder competition, while low prices can raise quality concerns Therefore, businesses must establish a balanced pricing strategy that caters to value-conscious customers while ensuring profitability and market share.
Most of our potential customers are very concerned with convenience and speed and do not want to care much about price As a result, BCS selects “EVERYDAY LOW PRICE” as the primary pricing strategy for the store With EDLP, we make their decision easier and save them time comparing prices from various businesses and trying to find the best deal Customers are no longer subjected to erratic fluctuations in sales of unstable prices Furthermore, this strategy is certain to attract customers who make purchasing decisions solely on price
In terms of benefits, it brings to the store, the first can be mentioned is shortening sales cycles, reducing stockouts and improving inventory management Customers no longer need to compare prices to find the best price and choose their business every time when businesses using EDLP provide the lowest prices in the marketplace, resulting in our products spending only a short time on the shelves Second, because the goods loop operates continuously, it is easier to predict product demand for how many products to stock on your shelves Third, minimal advertising and operating expenses - “Everyday low pricing” strategy does not necessitate costly advertising campaigns because customers are already familiar with the store's brand identity Compare that approach to the high low pricing strategy, where investments in advertising are constantly required to keep customers informed about upcoming sales
While the variety of benefits of implementing an EDLP strategy is very appealing, there are two considerable drawbacks to be aware of The first is the customer's misunderstanding and assumption that we do not provide high-quality products The other is that we have few discounting opportunities because our prices are initially the lowest
To optimize marketing efforts, BCS prioritizes budget allocation for impactful messaging over excessive promotions While strategic discounts may be implemented when advantageous to both customers and the company, the primary pricing strategy remains "Everyday low price." This approach aligns with the nature of consumer goods, providing stable and competitive pricing rather than relying solely on promotional tactics.
• Discounts on goods close to date:
Lowering prices on products as they approach their sell-by dates could motivate more shoppers to make a purchase and generate revenue on products that would otherwise be tossed out Therefore, our BCS will offer a 50% discount on packaged food and beverage products for 10 days before their expiration printed on the labels
To encourage customers’ purchasing power, we also have a program for our close members Customers have to register accounts on our app and accumulated sales from the first purchase will be recorded Close customers who buy goods at our stores with purchasing an amount of more than 1,000,000 VND last year will receive a 100,000VND voucher to buy goods this year on their birthday Dear customers who purchase goods at our stores with sales of more than 2,000,000 VND will receive Tet gift baskets equivalent to 200,000 VND when purchasing our products during the Tet holiday.
The product’s price
No Merchandise group Items Average cost (VND/unit)
Detergents – Medical Facial Masks – Umbrellas – Raincoats – Battery –
Feminie Hygeine – First aid kit – Napkin
Edible Grocery Package Food - Ice Creams - Chip &
Hot Serve (Pho Xao, Bo La Lot, Bap
Cold Serve (Banh Mi Que, Goi Cuon) 15,000 - 19,000
4 Beverage Beer - Soft drink - Energy drink
5 Frozen Foods Spring rolls - Mandu - Vegetables
6 Fresh Fruits Mangos - Plums - Guavas - Bananas -
7 Instant Foods Lunch Box - Onigiri - Sandwiches -
Pens - Pencils - Erasers - Erasing Pens –
10 Liquor Imperial Blue - Soju - Whiskey - Vodka -
Target product’s price
Vietnamese food is widely applauded for its balancing flavors as it is a symphony of protein, spices, herbs, vegetables, and even fruits No wonder people have also known Vietnamese food as one of the healthiest cuisines in the world Although European, Japanese, and Korean foods are increasingly popular, Vietnamese cuisine is still prominent among traditional food enthusiasts, and epicure As a Vietnamese start-up project, our desire is to serve Vietnamese food to our customers with the motto "Vietnamese people give priority to using Vietnamese goods" Moreover, currently, competitors in the convenience store market usually attract the customer’s attention via a wide range of Korean or Japanese foods and are particularly successful on account of this product strategy Hence, BCS has made a decision to introduce a menu with some special Vietnamese food with an aim not only to satisfy the urgent demand of patrons but also to offer them nutrient-rich meals
Vietnamese cuisine stands out for its exceptional diversity, uniqueness, and sophistication, captivating diners with its distinct flavors Recognizing the growing demand for authentic Vietnamese cuisine, we have meticulously crafted our Vietnamese menu, "Menu Thuần Việt," which is expected to resonate with customers seeking an authentic taste of Vietnam To ensure the freshest ingredients for our dishes, we have established our own supply chain, providing us with the highest quality ingredients to create delectable Vietnamese delicacies such as Goi cuon (Vietnamese spring rolls).
Bo cuon la lot (Grilled beef in piper lolot leaves) will be first introduced on our menu
Goi cuon is a favorable type of traditional food and is suitable for every kind of age
Thus, we propose to prepare this meal every day with fresh ingredients The price is also reasonable and competitive, just 15,000 VND for a pack of 3 pieces
The next dish we would like to supply is Bo cuon la lot with the price of just 7,000 VND for a roasting jack
In addition, to satisfy the Vietnamese demand, especially for the young, famous street foods like Bap xao, Banh mi que, and Pho xao are also provided at reasonable prices, taking just 15,000 VND; 19,000 VND and 29,000 VND respectively for each part meal
With the idea of supporting Vietnamese cuisine, our BCS also intends to make a collaboration with Trung Nguyen E-coffee to serve local coffee beverages Trung Nguyen E-Coffee is a chain of coffee world retail stores of Trung Nguyen Legend Group – the quintessential convergence of 3 coffee civilizations: Ottoman – Roman – Zen launched in the period of 8/2019 Right from its inception, Trung Nguyen E-Coffee quickly created a strong franchise boom, becoming the No 1 choice of more than 1,000 partners and presence nationwide To draw the attention of customers, we give them a discount of 5% on the total buying bill as ordering coffee of Trung Nguyen brand.
MARKETING COMMUNICATION MIX
Unpaid Advertisement
There are numerous ways to reach customers today, and most enterprises use the power of social media to increase brand awareness In recent years, the rise of social networks for entertainment, connection, and commerce has had a significant impact on the interaction between businesses and customers Because they are inexpensive, information spreads quickly when customers can easily update and share it
BCS takes advantage of consumers' current social media interests such as websites, social media channels (Facebook, Instagram, Tik Tok), apps, and messages These advertising strategies reach a large number of users with various activities to inform and advertise new initiatives Furthermore, with our main pricing strategy of "Everyday low price" combined with some sort of discount on goods or shopper programs, this form will help us to get access to customers faster and more conveniently
BCS can directly interact with our customers and receive direct customer feedback about products and services through various types of unpaid communication Especially, based on the survey or statistic, we can capture the trends and needs of customers' products to gain more insight from potential customers As a result, our company will adjust appropriate marketing strategies, promotions, and service quality to continuously improve customer satisfaction.
CUSTOMER SERVICE
Our general customer service
Retail customer service is about giving appropriate (and timely) support to consumers in order to help them solve problems and satisfy their requirements and expectations Commendable customer service brings benefits to customers and even our company involved in the transaction, thus, it is considered as an important factor that could not be ignored Furthermore, many consumers often cite high levels of customer service as a reason why they would favor one business over another or even pay more for the product or service on offer
To provide an excellent experience for buying inner store, BCS has made a customer service training program for staff at the first beginning of the working period Our motto is “BE OUR GUEST”, with basic principles of customer service, including Greeting, Sympathy, Eye contact, Speed of service, and Gratitude Customers need to be attended to in a friendly environment as well as be served as fast as possible, even when the business is extremely crowded Thus, BCS could maintain our "convenience" through quick decision-making and prioritizing of staff
In addition to those basic principles, our store also provides a variety of services to personalize and satisfy the customer’s experience like having a seat or free Wi-Fi On top of that, BCS always appreciates and takes notice of customer’s feedbacks and expectations, crave for changing and upgrading gradually.
Our general customer service
Our store also offers some special service to provide more convenience to our customers:
• Card payment: In our store, different types of cards such as credit cards (Visa,
Mastercard, Dinner club, Amex, JCB…) and other domestic debit cards are kindly accepted
• Online game card: Prepaid game cards of all the popular online games in
Vietnam such as VNG, Vcoin, OnCash, Garena, and GateFPT are available at the BCS store
• Prepaid phone cards: Viettel, Mobifone, Vinaphone, Vietnamobile, Gmobile phone cards are available at our store Phone card denomination varies from 10,000 VND, 20,000 VND up to 500,000 VND
• Bill Payment: Bill payment service is available at the store with living expenses bills: electricity, water, telephone, cable TV, and internet financial bills: credit card (ANZ, HSBC), insurance Installment bills (ACS, Homecredit, FE Credit, HD Saison, Prudential) Air/bus tickets that help you quickly settle the bills 24/7.
STORE LAYOUT AND DESIGN
Type of design layout
BCS convenience store strategically employs a grid layout within its compact space to enhance customer experience This layout maximizes the utilization of corners and walls, ensuring that every inch of the store is functional By organizing products into clearly defined categories and arranging them along well-defined aisles, customers are effortlessly guided to their desired items The grid layout not only optimizes space efficiency but also enhances product visibility, encouraging customers to browse and purchase a wider variety of goods.
Figure 9.1.1: The grid layout of store on the first floor
Figure 9.1.2: The grid layout of store on the second floor
Moreover, BCS also provides customers with a sitting area located on the first floor of the store, a place where customers can use to learn, to relax, to do their job or just only chat with their friends.
Customer flow effect
The store lanes help the customers to have a defined way of how to navigate the store and find their desired products It doesn’t confuse the customers because the products are placed in their categories shelves The customers can go through the isles to browse, and be exposed to the BCS’s vast choices, increasing our chance of higher revenue The BCS Convenience Store isn't particularly big, though, and shoppers don't have much trouble finding what they're looking for.
Fixtue
BCS has many assorted products, so the BCS convenience store is designed to group products depending on the attributes or uses of the product such as health and beauty products, spices, or packaged foods…
BCS showcases products in a self-service format, utilizing fixed display shelves that guide customers through their selections This customer-centric approach eliminates the need for staff assistance, empowering buyers to navigate the store independently and access items at their convenience From a psychological standpoint, this layout aligns with consumer preferences for self-directed shopping experiences.
Music
Upon entering BCS, customers are enveloped in an immersive auditory experience characterized by the presence of captivating music melodies Despite not being excessively loud or startling, these melodies permeate the entire store, subconsciously prompting customers to hum or sing along to the enchanting tunes playing in the background.
The music played at BCS stores will be specifically picked to encourage customers to make more purchases, rather than just to make customers feel comfortable or add a little background noise to make the environment livelier.
APPENDIX
STT Full name Student ID Tasks Contribution
Leader of group, manage the process of project, do type of retail, target market, huff’s model, retail channel and customer service part, and finish the report
Good completion, join in presentation
Do target market, retail channel, location analysis, marketing communication
Good completion, join in presentation
Huỳnh IELSIU20153 Do Merchandise Mix,