MARKET RESEARCH REPORT HIGHLANDS COFFEE

HIGHLANDS COFFEE MARKET RESEARCH REPORT EXCUTIVE SUMMARY Highlands coffee is a brand of Viet Thai international Joint Stock Company (VTI) and was established by David Thai with the objective is the leading high-grade retail industry in Vietnam Highlands coffee not only gives the customers the feeling of traditional value in Vietnam but also make them experience the part of modern active lifestyle Especially, the shop located at number 7, DinhTien Hoang Street, HoanKiem, Ha Noi is one the famous shop of Highlands coffee attracting many customers from Vietnamese to foreigner According to that shop, our report draws attention to the external factors including the situation, market description and buyer behavior and finds out how these factors affect Highlands Coffee’s strategy; particularly positioning strategy, service blueprint, physical evidences, pricing strategy, promotion strategy and internal marketing This report is conducted to help Highlands solving some problems that are occurring in their business Firstly, based on the determinant attributes, Highlands can improve its marketing to meet the consumer’s needs and compete with the competitors Next, some effective PR strategies will be suggested to build trust and credibility through the analysis of favorable publicity state Finally, it will help Higlands to understand buyer behavior then they may propose a more powerful 360 degree marketing and distribution to capture awareness andstimulate sales RESEARCH OBJECTIVES Based on the survey with 500 people, this report is conducted to help Highlands solving some problems that are occurring in their business The following objectives will be meet through the research: - To determine major factors influence consumers’purchasing Highlands Coffee products To observe consumers attitudesand usages when shopping for Highlands Coffee products To determine the Highlandposition in consumers mindset To identify whether favourablepublicity play a significant rolein decision-making of Highlands Coffee consumers To uncover the difficulties that Highlands Coffee has RESEARCH METHODS • RESEARCH PROCESS: CREATE SURVEY -> DEPLOY SURVEY -> COLLECT AND ANALYZE RESPONESE CREATE SURVEY: By using “google docs”- an online survey software and questionaire tool Market research on customer demand on coffee brandHighlands Coffee We are doing a research on customer demand on Highlands Coffee Thank you for taking your time to our survey! Personal Information Thông tin kháchhàng 1.1 What is your age? (Bạnbaonhiêutuổi?) Under 18 ( Dưới 18) From 18 to 25 (Từ 18 đến 25) From 26 to 35 (Từ 26 đến 35) From 36 to 45 (Từ 36 đến 45) Above 45 (Trên 45) 1.2 What is your current monthly income? (Thu nhậpbìnhquânhàngthángcủabạn?) (I am a student) (Tôilàhọcsinh/sinhviên) Under million (Dưới triệuđồng/tháng) From to million (Từ đến triệuđồng/tháng) Above million (Trên triệuđồng/tháng) 1.3 Do you usually go out to have a coffee? (Bạncóthườngđiuốngcàphê ngoàikhông? ) Yes (Cóthườngxuyên) Sometimes (Thỉnhthoảng) No (Khôngbaogiờ) About Highlands coffee Đốivớisảnphẩmvàdịchvụcủa Highlands coffee 2.1 Have you ever tried Highlands coffee before? (Bạnđãdùngthửsảnphẩmcủa Highlands coffee baogiờchưa?) * Yes, I have (Tôiđãtừngthử) No, I haven't (Tôichưabaogiờdùngthử) 2.2 Is Highlands Coffee your favourite brand of coffee in Viet Nam? (Highlands coffee cóphảilàhãngcàphêưathíchcủabạn?) * Yes No ( move to question 2.4) 2.3 Why you choose to drink Highlands coffee? (Tạisaobạnchọnuống ởHighlands coffee?) Because of its taste (Bởivìhươngvịcủanó) Because of its reasonable price (Bởivìgiáthànhhợplý) Because of its great service (Bởivìdịchvụtốt) Because it has great view ( Khônggianđẹp) Other: 2.4 How often you drink coffee in a week? (Bạnuốngcàphêbaonhiêulầntrongmộttuần?) * Once a week - times a week - times a week More than times a week No more than once a week 2.5 How much you usually spend on coffee per week? (Bạnthường chi baonhiêutiềnchocàphêtrongmộttuần?) * 30.000VND - 45.000VND per week 45.000VND - 60.000VND per week More than 60.000VND per week 2.6 How you know about Highlands coffee ? (Bằngcáchnàobạnbiếtđến Highlands coffee ?) * Via friends ( qua bạnbè) Via social network (Facebook, Website, )( qua mạngxãhội) Via advertisments (qua quảngcáo) Other: 2.7 How often you buy Highlands coffee in a week? (Bạnmuacàphê Highlands baonhiêulầntrongmộttuần?) Once a week - times a week - times a week More than times a week 2.8 What you think about the advertising of Highlands Coffee? (Bạnnghĩnhưthếnàovềcáchquảngcáocủa Highlands coffee ?) * It's very attractive (Rấtthuhút, bắtmắt) It's normal (Bìnhthường) It's not attractive at all (Khônggâyấntượng) Other: 2.9 Would you indicate the satisfaction for Highlands coffee? (Bạnhãychỉramứcđộhàilòngđốivớicáctiêuchísaucủasảnphẩm Highlands coffee) * Very Dissatisfied (Rấtkhônghàilòn g Dissatisfied Normal (Khônghàilòng) (Bìnhthường) Satisfied (Hàilòng) Very Satisfied (Rấthàilòng) The package (Baobì) The nutrition (Giátrịdinhdưỡng) The taste (Hươngvị) The variety of products (Sựđadạngsảnphẩm ) The price (Giá ) The service (Cáchthứcphụcvụ) Promotions (Khuyếnmãi, giảmgiá) 2.10 If Highlands Coffee launch a new product, would you think about try it? (Nếu Highlands Coffee ramắtdòngsảnphẩmmới, bạncósẵnsàngdùngthửkhông?) * Yes, I will try absolutely (Tấtnhiêntôisẽdùngthử) May be, I will have a try (Cóthểtôisẽthứ) No, I don't think about it (Tôikhôngnghĩđếnchuyệnđó) 2.11 Will you recommend Highlands coffee to your friends, families, ? (Bạnsẽgiớithiệu Highlands Coffee chobạnbè, ngườiquenchứ ?) * Yes Maybe No 2.12 If you can, what would you like to change about Highlands Coffee? (Nếuđược, bạnmuốnthayđổiđiềugìnhất Highlands Coffee?) Your answer: DEPLOY SURVEY: Every members of the group shared the link of this survey on Facebook and asked all friends to the survey for help COLLECT AND ANALYZE DATA: - Clean up data - Summarize data - Break up data into categories - Visualize the result - Act on result SAMPLE STATISTICS BACKGROUND OF HIGHLANDS COFFEE Highlands Coffee is a Vietnamese coffee shop chain and producer and distributor of coffee products, established in Hanoi by Vietnamese American David Thai - Viet Thai International Joint Stock Company (VTI) in 1998 The founding of the Highlands Coffee company marked the first time an Overseas Vietnamese was able to register a private company within Vietnam As of 2009, the company operated 80 coffee shops in six cities and provinces across Vietnam In 2011, Highlands Coffee purchased the chain Phở 24 from LýQuíTrung for an estimated 20 million USD The next year, Highlands sold 50% of its shares to the Philippines multinational chain Jollibee Worldwide for 25 million USD With the rapid development, VTI has owned about 60 coffee shops with a famous trademark Highlands Coffee all over the country Proud to be a Vietnamese brand, Highlands’s philosophy is to combine the modern world with traditional, classical values of Vietnam HIGHLANDS COFFEE’S TARGET CUSTOMERS The target customers Highlands coffee has been serving are the middle class, the office staffs and the active young generation because drinking coffee here with the prestigious coffee brand helps them confirm their status in the society Moreover, Highlands coffee always focuses on creating the comfortable and exciting atmosphere for customers to enjoy coffee every day Therefore, this is an appropriate place the office staffs who want the quiet and less luxurious space to discuss with their friends and enjoy coffee with pastry-the Western style In addition, Highlands also targeting customer group are young businesses who used to study abroad so they are familiar with the style of European-American like drinking coffee at a chic restaurant that impress the style of the place they used to live Another, the customers of Highlands coffee are foreigner living and working in Vietnam CURRENT SITUATION • a b c d a 4Ps: Products: - Highlands has a wide range of products such as coffee, tea, cake, cookies,… - Suitable for everyone - The quality of drinks is not really good: too much ice,… Price: - The price is quite high compare to others coffee shops - Too expensive for students or young people who haven’t earn much money yet - The price is too high for the quality and service - Combos are sometimes available with cheaper price Place: - Highlands coffee located on one of Hanoi’s centre old street, with a small front space, sometimes, especially peak time like weekends, there is no vacancy to park the motorbike and the car - Highlands Coffee stores are located at center of city or famous shopping malls, which are all crowded areas - HighlandsCoffee brings Western values to their stores through the wooden tables & chairs, large armchairs - With outdoor stores, HighlandsCoffee put emphasis on the big white umbrellas, which reminds of outdoor coffee shops in Italia or France Promotions: - The promotional mix is the combination of personal selling, advertising, sales promotion and public relations that it used in its marketing plan - They use Facebook as a channel of online advertising But their Fanpage works unefectively • SWOT: Strengths: - Best well known coffee brand in VietNam b c d - • A Vietnamese coffee brand Has big market share Many stores around big cities center Vietnamese people love drinking coffee Weeknesses: Do not care about improving quality and flavours Price is too high Non - availability in small town Receive a lots bad comments about products, services and staffs Opportunities: Wide range menu Build on their loyal customer base Target wide customer group Threats: Competition with another brand of coffee such as Trung Nguyen, Starbucks, The Coffee House,… Competition with another brand of drink such milk tea,… Recently scandal about the quality of products and the staff’s behavior LOGO: Highlands Coffee’s logo is a quite eye-catching design with main colors: red and white White letters are put on red background which is easy to recognize Logo’s shape is oval and quite Western style is At first, Highlands Coffee chose red as their identified color to differentiate themselves with other coffee brands which often attach with brown- the color of café It also fits with their positioning strategy which brings not only coffee products to customers but a friendship space as well Later, when Highlands had acquired a certain position in customer’s minds, Highlands added ecru curve representing wave in a cup of coffee It helps to identify Highlands as a specialized coffee brand deeper and deeper • STORE DECORATION: Highlands Coffee focuses lots on placement Highlands Coffee stores are located at center of city or famous shopping malls, which are all crowded areas The first impression when coming to a Highlands Coffee store is a luxury space with two main colors: red and black The red lanterns which are strongly attached to Highlands Coffee store network createthe warmness and orient Besides, HighlandsCoffee brings Western values to their stores through the wooden tables & chairs, large armchairs With outdoor stores, HighlandsCoffee put emphasis on the big white umbrellas, which reminds of outdoor coffee shops in Italia or France Tables & chairs of such stores are smaller and easy to move However, they are still wooden and in consistent style with the indoor stores Especially, when coming to Highlands stores in luxury buildings such as Vincom, Parkson, customers may notice Highlands Coffee with wooden floor separate from the surrounding area In particular, the indoor stores are also equipped with high tables with swivel chairs like bar, facing the street, to serve those wishing to contemplate the streets The Eastern-Western layout is a distinct feature of Highlands Coffee Visitors to the restaurant, in addition to the drinks and delicious food, also receive value from the comfortable, luxurious and high class space The allocation of different areas at Highlands Coffee is quite reasonable The preparation counter is placed at store’s center Therefore, customers can easilyobserve the preparation process, hygiene etc As for Highlands’ staff, it helps them to capture customer’s needs and serve makes the area professional There are also nearbyshop windows full of various types of cakes and other food • STAFF: Highlands Coffee’s staff all wears uniform which includes red clothes and black aprons Different people may experience different serving in different Highlands Coffee stores My group experience in Highlands Coffee at 7, DinhTien Hoang Street is general delighted The staff was young, dynamic, polite and helpful While waiting, we were served a glass of cold water We observed that the staff could communicate rather well in English with foreigners However, staffs receive some negative feedbacks from customers Some complain that the store is too crowed and serving is too slow • SERVICE: When the customers going to Highlands coffee are overcrowded, there will be no longer blank tables for them and the mixing drink unit may overload which make the waiters of the restaurant serve slowly then the customers wait for them and feel anxious Moreover, Highlands is equipped the cool air so some customers sense too cold.Highlands coffeelocated on one of Hanoi’s centre old street, with a small front space, sometimes, especially peak time like weekends, there is no vacancy to park the motorbike and the car In that case, the staff has to apology the customer that they are full Moreover, the service delivery process seems to take place in short time period, almost time is spent on producing the services Therefore, critical and potential bottlenecks likely occur in this phase For instance, at weekend, customers have to wait a long time for their drinks and the service is poor due to the limited capacity • CURRENT PRICING STRATEGIES: It is obvious that formulation a price strategy in a service organization is a difficult decision which requires careful consideration about many issues And Highlands price approach is the same as the way Starbucks has done in the US and other markets in the surrounded region It is to provide high quality coffee in a special atmosphere for medium income class Highlands price standardization policy works very efficiently This helps Highlands set a clear position in customers’ mind And customers seeking for a cozy and comfortable place can be satisfied with Highlands In Highlands, price of coffee and other beverages fluctuates from 25,000 to 50,000 VND It is not cheap in comparison with other coffee shops • ANALYSIS OF SERVICE QUALITY, SATISFACTION, PERCEIVED VALUE AND CUSTOMER RETENTION EFFORTS: Highlands coffee is running its business well, is one of top coffee store chains in Hanoi There are more and more new as well as loyal customers coming to Highlands for its appealing services cape and good service quality This partly indicates high customer’s satisfaction with Highlands However, as we observed, there is no confidential box for customer’s feedbacks at any Highlands store On Highlands’ website, there is no separate section for customers to complain or communicate with Highlands their problems In conclusion, the measures of quality, satisfaction; perceived value of Highlands is so limited To build customer relationship, Highlands has currently offer kinds of cards: VIP card with price-offs, free goods, gifts, rewards etc for VIP customers and discount card for loyal customers or on special occasions To make customers feel more closely with Highlands and want to come back to it more frequently, employees should be encouraged to be more tactical in handling customers’ urge for drinks Waiters and waitresses should improve their English as well The services cape should be changed according to different times of the year to create new, romantic and classical feeling to the customers The quality of drinks must be maintained as good as possible POSITIONING STRATEGY Clearly drawing up the positioning strategy at the very first stage of developing a business project plays a critical role in enhancing the business success The positioning strategy focus on the two important questions: which place the firm is currently on the customers’ mind and which place they want to hold on the market • The place the firm currently holds in customers’ mind Interviewing customers in Highlands Coffee shop and collecting judgments from many forums, we found out that in customer’s mind, Align offers a rendezvous, a good coffee and a beautiful view Located at the first floors of Asian Tower, Highlands Coffee is an ideal place for officers coming during their time break or even for business meeting During our interview time we also took notice that nearly half of the customers were the youngster, which is rare comparing to other Highlands coffee shops Phong, a young customer explained that because this Highlands coffee shop is located on the centre of the city, it would be more convenient to him to meet his friend here The supplementary services such as toilet, music and food are also highly rated However, there are many complaints regarding to the service quality at Highlands coffee DinhTien Hoang, mostly about the long waiting time or the noise “The serving is too slow”, “I normally have to wait about half an hour to enjoy my coffee”, “This place has the most annoying blender machine on earth”, said the customers From some information from customers that the reporters collected during the shop visit and websites, it can be seen that Highlands Coffee shop is really a special coffee shop to customers,since they offers high quality core product to customers and has the variable supplementary services; however they needs to professionalize the staff to build better image on customers’ mind • The place the shop wants to hold It is obvious that formulation a price strategy in a service organization is a difficult decision which requires careful consideration about many issues And Highlands price approach is the same as the way Starbucks has done in the US and other markets in the surrounded region It is to provide high quality coffee in a special atmosphere for medium income class Highlands price standardization policy works very efficiently This helps Highlands set a clear position in customers’ mind.Highlands Coffee Shop positions itself as a high price, high quality coffee shop The shop owners want to emphasize that, the high price means high service quality as well Since customers are enjoying a more special service, so they should also pay a higher price for what they are getting RECOMMENDATION It is proven that most coffee consumers are willing to spend money for a premium coffee products with an enticing packaging, in which upholds and maintains a unique aroma andincomparableflavours Based on the above findings and discussion, there is a clear gap between what majority of consumers demand and what value Highlands products intents to bring We proposed a plan of realistic and applicable strategies for Highlands based oncustomer determinant attributes and purchase behaviours to match the market needs, enhance brand values and clearly position Highlands Coffee in R&G intense competition Particularly,celebrity endorsement, social interaction activities, highly functional new packaging, andtrade marketing all compliment and compromise each other, thus generating a powerfulintegration marketing mix to attain the ultimate objectives of Highlands • PR STRATEGY TO REBUILD TRUST: Many businesses have been struggling the loss of credibility in customers‟ perspectives andacted quickly yet appropriately to overcome the damage However,HighlandsCoffee haven’t taken any actions seriously upon the scandals it has been through,creating uncertainty and stereotype among the public against the brand all these years.So what is the magic to save Highlands Coffee from being mired in the muck and rebuild itsimage again? There isn’t one Rebuilding a reputation for a brand takes time and efforts Butit is possible if we have a long-term effective promotional mix strategy to spread the positiveterms about the brand and increase favorable publicity.Celebrity endorsement is capable to re-establish brand credibility and build up a sense of trustin the target customers.It also helps to attract potential consumers, reinforceother marketing activities, and increase media coverage Undoubtedly, the strategy is high in execution cost;nevertheless, this is the right time to utilize such a powerful tool to breathe a new life intoHighlands Coffee brand On the other hands, the brands should partner with well-known non-profit organizations,namely Operation Smile, SOS Children’s Villages… and involves in different activities like charity work, raising funds, conducting social-welfare programs (for example dedicating a percentage amount of one month’s product sales to orphanage houses, so the children couldcelebrate a warm Lunar New Year like others) • DIVERSIFIED TRADE MARKETING: To restate the previous parts, coffee consumers are likely to make purchase decision duringevaluation process rather being aware of what they want to purchase We can’t stress enoughthe importance of trade marketing in this industry that comprises of many alternatives Withlimited brand awareness, consumers will not purchase HighlandsCoffee’s premium productsunless they realize there are obvious differences in value and satisfaction they obtaincompared to those of other key players Side by side with the PR campaigns we proposed,sampling and booth activations are the keys of success These two methods with effectiveimplementation are the easiest way to generate awareness, product trial, and brand switching Firstly, sampling allows potential consumers opportunities to experience Highlands high-quality coffee, reevaluate their negative stereotype towards the brand, driving immediatesales volumes at the selling points In frequency manner, Highlands should conduct a two-month sampling programs during peak hours of the trading sites to attract public attention and promote the new-package products A team of to promotion girls will lead the activities,invite customers for free tastes, and educate them the benefits of the products Eventually,repetition purchase and brand loyalty will be built Secondly, standees, hanging mobile, and mock-ups will be utilized to inform the availabilityof Highlands R&G products, deliver the marketing messages, and eventually set the brandapart from the large pools of competitors Not only those tools will be displayed in everysupermarket products shelves, they will also be visible among Highlands café chains as tabletops, posters and brochures, taking advantage of the strong relationship between café andcoffee consumption • IMPROVING PRODUCTS AND SERVICES: Coffee is one of, if not, the most popular drinks in Vietnam and Highlands Coffee is also the most well-known chain of coffee shops that have been expanding throughout Vietnam and abroad since 2002 It surely stood the test of time But still, there are many problems: - Highland’s waiters’ working style is kind of slow When drinks are ready, guests have to come and take it back to their seat themselves Old drinks stay old, new drinks stay uninterested They have no plan on connecting with customers on any kind of social media Slow and, most of the time, broken wifi connection So, as a customer myself, here’s some solutions: - • Ask for feedbacks, in any platform, this helps them see what they’ve been missing and improve their quality Create a big, powerful online team since social medias are one of, if not, the best way to reach and keep customers Do stay in touch with customers, give them discount code on their birthday This sure makes them stay and love Highland’s coffee a bit more Change the waiters’ working pace Fix the wifi connection Come up with a more eye-watering menu, most of us don’t even know and, if yes, want to try the banh mi from Highland coffee Stay creative with the new drinks PRICING STRATEGY: According to our survey,we can take some results: Most customers of Highlands Coffee arein 18-25 years old,they are all students and they haven’t had current monthly income yet This type of customers arealways occupied and dynamic We can see that Highlands is so popular and famous on the market,Highlands always focus on customer in all ages but it fail to attract the customer’s attention who are out of 18-25 years old Most of adults feel Highland isn’t convenient over other factors,so they tendto choose street vendor coffee The character of Highlands that people like most is its taste Menu of Highlands is so plentiful There are some types of coffee,from traditional to modern drink;some types of fruit tea,this drink is interesting for girls and woman.However,we can see that the price is quite high so it isn’t suitable for students Highlands should give some solutions to solve these problems Such as: reducing every drinks down to 1015%; giving special offers on holidays and on weekends because in this moment,people have many free time to go out; presenting some gifts such as cup or bottle which has logo ofHighland,vouchers,combos Moreover,HighandsCoffee can add some special customer service such as loyalty card ... brand of coffee in Viet Nam? (Highlands coffee cóphảilàhãngcàphêưathíchcủabạn?) * Yes No ( move to question 2.4) 2.3 Why you choose to drink Highlands coffee? (Tạisaobạnchọnuống Highlands coffee? )... wave in a cup of coffee It helps to identify Highlands as a specialized coffee brand deeper and deeper • STORE DECORATION: Highlands Coffee focuses lots on placement Highlands Coffee stores are... recommend Highlands coffee to your friends, families, ? (Bạnsẽgiớithiệu Highlands Coffee chobạnbè, ngườiquenchứ ?) * Yes Maybe No 2.12 If you can, what would you like to change about Highlands Coffee?