Chiến lược Marketing của The Coffee House

Vietnam National University International University Major: Business Administration Final Report Subject: Principle of Marketing Research Topic: Analyzing the appropriate marketing strategies of the chains of coffee stores- the Coffee House Lecturer: Professor A.U.Zafar Teaching Assistance: Mr Do Class: Principle of Marketing Group member: TABLE OF CONTENT Chapter 1: The opening 1.1 The reasons of picking up this topic 1.2 The purpose of the thesis 1.3 The significant of particularly researching this topic 1.4 The scope of the thesis topic 1.5 Methodology sections 1.6 Literature reviews Chapter 2: Content of the topic I Executive summary 1.1 The chains of coffee stores- the Coffee House's history of establishment and development 1.2 The vision, mission and core values of the chains of coffee stores- the Coffee House 1.3 The introduction to the brand values and serving products of the chains of coffee storesthe Coffee House 1.4 The summary of strategic objectives in the chains of coffee stores- the Coffee House II Current marketing situation of the chains of coffee stores - the Coffee House 2.1 Analyzing the variety of market and the market description of Coffee House 2.2 Analyzing the Coffee House's method of distributing products 2.3 Analyzing the facing competitive environment in coffee industry in term of the Coffee House 2.4 Reviewing the selling products compared to the demand of customer III Scrutinizing the SWOT component of the chains Of coffee stores- the Coffee House 3.1 Reviewing the background of SWOT analysis 3.2 The importance of SWOT analysis in conducting the marketing strategies 3.3 The strength of the chains of coffee stores- the Coffee House 3.4 The weaknesses of the chains of coffee stores- the Coffee House 3.5 The opportunities of the chains of coffee stores- the Coffee House 3.6 The threats of the chains of coffee stores- the Coffee House IV Analyzing the marketing methods appearing in the marketing strategies of the Coffee House by examining the current strategies 4.1 The traditional marketing 4.2 The technological marketing 4.2.1 SEO (Search Engine Optimization) 4.2.2 Advertisement on social media 4.2.3 The Coffee House’s application V Scrutinizing the marketing strategies of the chains of coffee storesthe Coffee House 5.1 Analyzing the positioning of the Coffee House 5.2 Analyzing the production strategies of the Coffee House 5.3 Analyzing the pricing strategies of the Coffee House 5.4 Analyzing the distribution strategies of the Coffee House 5.5 Analyzing the market research of the Coffee House VI VII VIII Exploring the details of the Coffee House marketing action programs Budget for operating the marketing strategies of the Coffee House The controlling of marketing strategies in the Coffee House Chap 3: The summary and recommendation Acknowledgement Throughout the process of learning, exploring and researching in the principle of marketing class, our team has already completed the topic “Analyzing the appropriate marketing strategies of the chains of coffee stores- the Coffee House.” On behalf of all members in the group, I would like to express the honors and gratefulness to those whose joined-hand to accomplish our thesis Especially, mr Zafar the professor and mr Do assistant lecturer who taught us at the basic knowledge and brought us a huge understanding about the general of principle marketing Our team is also thankful for the supports of the older students of K17, K16 and our friends in the International University Ho Chi Minh city, 22/05/2019 Group Chap 1: The opening 1.1 Reasons of picking up this topic Nowadays, coffee is one of the most essential and famous beverages which serves a mass demand for all social classes From wealthy households to mediocre ones, the daily consumption of coffee has become familiar and universal According to the Viet Nam Central Highlands forestry science and technology institute, the amount of coffee consumed annually is about kilogram for each American and kilograms for each at England Especially in Asia, the habit of drinking coffee as a morning tea has raised to a new level, becoming one of the unique cultural features in the attentions of international friends Besides, the effects of coffee on human health studied since 1897 Furthermore, in recent, many scientific shreds of evidence about the benefits of coffee have been precisely and accurately studied for public-showing, including Battig's research in 1987 and Macrae's research in 1989 Most recently, research results in 2017 of Grosso showed that drinking coffee has benefits in reducing the risk of chronic diseases such as cancer and cardiovascular disease However, according to studies by Messina in 2015 which said that the caffeine in coffee could cause some value effects like central nervous system stimulation leading to an increase in focusing ability and reducing the drowsy and tired feeling In Vietnam, according to international experts, the sense of protection of people's health has increased markedly because of the habits of drinking coffee of people cautiously increasing quickly It contributes significantly to promoting the importance of the coffee industry to daily life From 2018 until now, the coffee market has been evaluated as one of the five industries in very high growth potential and makes the enormous attractive profits, while the cost to face risks is meager According to the survey of university of Economics and Finance Ho Chi Minh City, Vietnam in 2003, the average growth rate of coffee is about over 6% per million units purchased a year, domestic and foreign businesses must enhance the level of competition based on the terms of the quality and the designs of both on the products and also services For those purposes, the marketing strategies of businesses must be applied effectively, whether it is a big or small model Because of those positive purposes of increasing the level of personal satisfaction and making good profits for business, many business models of coffee chain stores established However, the coffee business model is not always going to succeed Especially in Vietnam, even most of the major coffee chains operating in Vietnam experienced an increase in sales scale last year 2018, for example, the Highlands Coffee with 240 stores over the country, but still many did not achieve good profits, for example, the Trung Nguyen coffee reduced in 50 selling percentage over last year According to news, almost all causes of losses in Coffee stores blamed on the shortage of operating capital However, with the excitement of the current coffee market, the competitive component is the potential cause of bankruptcy, which explains that the contributions of applying the suitable marketing strategies are the core factor leading to the selling successiveness Turn back to one of the giants in Vietnam's coffee industry Coffee House has been at the forefront of the best seller for many years to now Thanks to the reasonable and effective marketing strategies which is applied not only for profit earning but also for ambition as serving customers, the Coffee House chains of coffee stores are possible in making Vietnam's coffee industry become a famous brand that can compete with both local and foreign brands Because we are the students who are eager to learn about the success of others, our team decides to analyze the topic of the appropriate marketing strategies of the chains of coffee stores- the Coffee House 1.2 The purpose of the thesis The coffee industry in Viet Nam has been prosperous in recent years because most companies are doing so well in integrating traditional and foreign coffee culture, and most customers are looking for a coffee shop that can combine these two factors However, some companies which misapply the marketing plans still face the money-losing Furthermore, The Coffee House is known to be one of the successful ones They have successfully applied “customer insight” to their business strategies They start with the customer and design their brand based on the customer’s satisfaction and comments The Coffee House affirming and branding by generating the closed connection with customers and make their coffee shops become a “House” where customers feel free to express and have a great time with a coffee in their hands This tactic has helped The Coffee House become a significant competitor in the F&B industry even though they were opened later than many famous and successful coffee brands in Viet Nam In conclusion, the purpose of the thesis is to carefully analyze the rare and unique components in the marketing plan that only be applied in the Coffee House to contribute as a premise to construct a measure of avoiding the money-losing when establishing the same business model 1.3 The significant of particularly researching this topic With this marketing plan, we will be able to answer how The Coffee House successfully achieve its strategic objectives and gain their profit while others cannot and what makes The Coffee House different The marketing plan will also inform the managers and employees about their company’s changes so that they can collaborate and put the marketing strategies into action This analysis will help our team learn more about creating an appropriate marketing plan and its role in the company’s success 1.4 The scope of the thesis topic This report involves researching The Coffee House's marketing strategies for years back and the current year The key features provided in the paper are the strategic goals and objectives of the studied enterprise, its current marketing situation, and other marketing-related details Furthermore, the research also answers for the reasons why the cafe chains can manage and maintain its brand values successfully as well as reducing the risks of challenges which it is facing Additionally, in those pages, the research on the same industry competitors is carried out, followed by showing the actionable marketing strategies to surpass its opponents The main discussion delivers a broad vision in the marketing aspects of the cafe chain to one's knowledge and expertness Even though the report is supposed to bring out as much marketing information as available, some fields cannot be addressed due to the enterprise's internal particulars I Executive Summary 1.1 The chains of coffee stores- the Coffee House's history of establishment and development The Coffee House had its first store opened in Ho Chi Minh city 2014, then been growing ever since In 2015, the company reached Ha Noi, and they soon have up to 14 shops in the capital Within three years, The Coffee House has had more than 60 shops all over Ho Chi Minh city, and they also came to Da Nang, Vung Tau, and Bien Hoa Last year, 2018, was a significant accomplishment for The Coffee House, they officially bought a coffee farm which comes with all supplies, factory and storage house for coffee beans from Cau Dat Company They plan to plant what they serve at the coffee shop and to export coffee beans in the future Their farm has a total of 81.5 acres, which produces 270 tons by the end of 2018 and 440 tons of Arabica coffee beans in 2019 After four years of operating in Viet Nam’s market, The Coffee House now has more than 100 shops from North to South 1.2 The vision, mission and core values of the chains of coffee stores- the Coffee House 1.2.1 The vision of the coffee chains of stores- the Coffee House Going to the coffee stores has been a typical daily activity in Vietnamese culture It is a communication form between people, which can be seen anywhere, from a sidewalk to an elegant coffee store There have been many successful brands in Viet Nam which the customers prefer and trust rather than a new brand coming to the industry However, the Coffee House is known to be a late competitor compared to others, so what makes the founder decided to create The Coffee House? Are there any differences between The Coffee House and a foreign brand like Starbucks or a local brand like Trung Nguyen Legend? The answer is yes In the past few years, the strategic plans targeted as trying to establish shops at accessible locations to acquire an enormous consuming market The Coffee House believes Coffee House's business model will set ideal places for customers to enjoy their coffee every day, maybe multiple times a day With the vision of having 700 coffee shops in the next five years, The Coffee House commits to provide excellent service at a reasonable price and an optimum environment for the customers They can provide all three criteria, while others cannot For example, Starbuck can only offer two criteria, which are excellent service and vast space, but the menu prices are not suitable for Vietnamese's purchasing segmentation 1.2.2 The core values of the coffee chains of stores- the Coffee House The Coffee time in Viet Nam is when customers meet and socialize with others The Coffee House has always valued the “people” factor to maximize the service quality and bring the customers the best experience at their shops Besides that, coming to The Coffee House, customers will be able to taste the high-quality drinks served by friendly staff under open and comfortable shops The CEO – Nguyen Hai Ninh, believes that coffee will bring everybody closer and nourish conversations, which creates a relaxing moment for buyers This statement has inspired The Coffee House and become a vision for all staff in the company Loyal customers love these values about The Coffee House, which means the successful brand in this competitive industry created 1.2.3 The missions of the coffee chains of stores- the Coffee House The Coffee House runs its business under the customers’ perspective, so they tend to serve natural products to improve customers’ health and to save the environment That mission statement guides the company to operate in the best way they can • • • • • • • Customers: The Coffee House will be their “home” where they can work, talk, and relax during the day Product: Customers can have the best quality services at The Coffee House at an affordable price Market: Now, the company has its coffee farm to produce and export coffee beans They want to bring their products to the world so that everybody will know the Vietnamese coffee bean Technology: All their shops are supplied with the latest coffee machine to make customers delicious drinks Self-evaluation: The Coffee House has proved its stand in the coffee industry in Viet Nam by having unique values Company’s development: The reason that The Coffee House can thrive is by serving healthy products to the customers, which is their most concern at this time Public image: The Coffee House does not only want to create profit for their company, but the business also cares about improving the economy 1.3 The introduction to the brand values and serving products of the chains of coffee stores- the Coffee House Nowadays, The Coffee House as people general views is an effective combination of these following factors • The coffee shops selling their coffee beans: As a coffee shop, self-generating its coffee is not an easy task The production chain can cost the company much more than buying from a supplier Nevertheless, The Coffee House chooses to grow its coffee to control the process more efficient Have the beans grown on 1650m highland, and the company hopes that their Arabica coffee bean will reach the top quality with edible seeds and the dedication of the farmers From the farm to the coffee cups serving at the shops, were studied and instructed by coffee experts and talented barista in order to serve the best product The company is willing to buy high price seeds to ensure the quality of the farmers at their farm That way, the farmers will be happy and comfortable to work and ensure a good outcome for the company No matter what point in the process, The Coffee House always offer a reasonable price for their customers • • • The coffee shops having vast space: As customers' reminder can tell in their brand name, The Coffee House designs their shop as a comfortable home or office In order to achieve that, they must appreciate the "people" factor in their business plan They should know their customer psychology to design a suitable space to maximize their customers' experience every count of visiting In the coffee shop is where the magic happens, the farmers and the baristas will reap what they sow All staff work for a purpose, which is helping the customers have their best time at The Coffee House The coffee stores with a clear vision: The Coffee House does not stop at expanding its brand in Viet Nam province They hope to be successful in introducing the brand value to the world They value high-quality seed, with the wants of getting the world's attention about Vietnamese coffee images With a benefactor, their goal can smoothly go succeeded The coffee stores with unique signature: The Coffee House signature is all-glass spaces with two tones including orange - black luxury, which is an impressive design but no less in harmony with nature Besides, that's designs undoubtedly catch your eye at first sight The signature also is the alternating greenery which makes the stores’ atmosphere more comfortable like a small garden in the heart of the bustling, crowded city center 1.4 The summary of strategic objectives in the chains of coffee stores- the Coffee House The primary marketing objective is to increase customer satisfaction by determining three types of customers that The Coffee House has had from day Based on this report, the company will know its strengths and weakness according to its customer’s experience They will be able to understand what makes their customers choose them and what does not Many critics have pointed out that The Coffee House is a successful brand in the industry, and they still have many projects in the future, so the reasons behind unsatisfied customers need to be fixed before it is too late II Current marketing situation of the chains of coffee stores - the Coffee House 2.1 Analyzing the variety of market and the market description of Coffee House The coffee industry is competitive as always with both foreign and domestic businesses on the market Some businesses start as coffee manufacturers, some start with their coffee stores, and some combine both ways to expand their growth Along with the enormous coffee consumption in Vietnam (1.38kg/individual), various products, including instant coffee, flavorful coffee, healthy coffee, etc have been distributed to consumers As a result, the market is so diverse, which leads to changes in concepts to satisfy consumers' tastes and lifestyles Consumers now have more options to consider than they did ten years ago For example, teenagers who prefer social places with aesthetic decoration can choose trendy cafes to meet On the other hand, there are also plenty of coffee places designed especially for office staff, specialists, etc who require formal and standard environment for work However, pleasing There are various stories that the usages of the invalid voucher are allowed in Coffee House; some people not believe in that However, those cases have already happened When customers come to the shop with the invalid vouchers, Coffee House still sell the drinks to them by paying vouchers as well as explain that the vouchers cannot be used anymore because the reason of delivering happiness which is more important than creating a profit, contribute to the success of building up the brand values for the Coffee House 3.3.2 From human-centered to satisfy the smallest details Besides, the human-centered can also be represented by the actions of paying attention to the smallest details to satisfy customers For example, with the same drinks but coffee house becomes different from other competitors by focusing not only on the tastes but also on the looks and prices Furthermore, about the other "details" such as designing outlet and playing music playlist in the store that all vitally bring the most convenient and comfortable for customers Furthermore, coming to the Coffee House, customers can quickly meet up with the airy space, large seats, and attentive service Primarily, secure Wifi connection is the advantage of The Coffee House In Coffee House, customers can read, work, or freely chat with friends in how much time they want Therefore it is a place where people feel familiar and treated like close friends The last but not least is that the subtlety of The Coffee House's team, which is not expressed ostentatiously but by the dedicated care of the staff there, from service, cashier to security Not only that, the restrooms are always clean, carefully cleaned is also a plus point of The Coffee House It has created customer convenience and increased the enjoyable experience here The glasses of filtered water are always fullfilled; vehicles are taken out for customers In Coffee House, employees not need to wait until being reminded, which accounts for the actions; they always meticulously observe the activities and wishes of customers to support at all times Those are the differences that appeared only in the Coffee House 3.3.3 Technological application to the marketing strategies Nowadays, as the global trends of the market, digital technology contributed a brunch of efforts in building up the business's efficiency Almost the business operators are trying to create their application on mobile phones as a tool to communicate and interact with customers However, most customers randomly leave the App after a few counts of usages because its functionalities are not attractive enough and not bring the benefits which customers need However, the opposite cases appear at The Coffee House Some people believe that digital applications are not necessary for the term of applying for the operation and management of coffee stores However, an application created under the brand name of the Coffee House is not just for following the global trends; it is an advantageous customer-caring channel By using this App, every guest transactions will earn points Every 20 points, customers will receive a free drink and a 10% discount for loyal customers Notably, the number of 20 points is not a form of none-achieved targets for customers, so that it has created momentum for customers to try to achieve goals Along with customer-caring software, Mobile App, and some other channels, The Coffee House has created a multi-channel system to help manage customers effectively Besides, the usages of the App also help the customer information management system to process and analyze the customers' purchases data to predict the new strategies which show the new product categories to customers as well as improve the quality services Besides that, using the App is similar to the apparent decisions in separately dividing the ranks of customers through loyalty scales as applying for the membership cards on the App Thanks to that, the business can easily interact and give specific types of benefits to each type of customer 3.4 The weaknesses of the chains of coffee stores- the Coffee House The restrictions on diversity of menu According to the CEO's comments since 2017, the Coffee House also has been recorded as having an imperfect point, which is the diversity of the stores' menu It was the senior staff there who admitted that the menu there was nothing exceptional Most customers come to the shop because they like the space and service there The Coffee House is generally still young, with not much experience, so it needs to learn step by step and take some time to develop Business’s wrong directions in future Furthermore, there are certainly also mistakes that will cost a lot when choosing the wrong direction for the future For example, the intense focus on the development of the business based on customer happiness gives coffee houses many limitations; especially, it can reduce the stores' sale volume when the allows for carrying food which not belonged to the products or serving services in the stores appears The competitions of new brands Last but not least, the coffee house's weaknesses include the inferiority in popularity of brand values because the coffee was established late compared to the competitors when other competitors have acquired most of the customers' trust Besides that, the customer's choice less geared toward emerging brands Therefore, Coffee House which is always considered as the second choice of customers In the marketing competition, weak brand values are contributive factors leading to the reduction of customers' consumption 3.5 The opportunities of the chains of coffee stores- the Coffee House 3.5.1 The competitive environment of Vietnam's Coffee industry According to measured statistics analyzing in six major cities (only famous brands), the current market share of instant coffee accounts for 62% in quantity and 65% in value compared to 38% of quantity and 34% about the value of roasted coffee Particularly in the Hanoi market and four main cities Hai Phong, Da Nang, Nha Trang, Can Tho, the proportion of instant coffee still accounts for the majority compared to roasted and ground coffee, respectively 91%, 73% Furthermore, Vietnam's market, which has not separately differentiated types of coffee, only two kinds of coffee business model appears that are local coffee (serve instant coffee) and exceptional coffee (serve roasted coffee) The local coffee impressed as Trung Nguyen in Vietnam or Nestlé Taster’s choice coffee in the US Exceptional coffee can be mentioned as High Land and Starbuck in Vietnam However, in the future, with the massive participation of local coffee, this model may lead to saturation, which explains that it will not attract customers and make any profits Therefore, the opportunities for the special coffee increase significantly There are various common opportunities of exceptional coffee Firstly, this coffee business model easily integrated with the world coffee industry and less saturated Secondly, this coffee business model is trends to meet customer needs and satisfy the current customer tastes Thirdly it has the little competitive factors as well as this business model can gain customers' attention and selfdevelop it's brand value quickly 3.5.2 The opportunities of the chains of coffee stores- the Coffee House The Coffee House aims to establish new stores within Viet Nam According to the market competition- rules of survival in the market, the shakiness of a name once honored as the empire of Vietnamese coffee- Trung Nguyen coffee will make more opportunities for new brand names to develop In the coffee shop chain segment, the founders of The Coffee House seem to participate in this ambitious bond race when they have just announced an opportunity of reaching the number of 10,000 visitors per day across the chains' system Besides, this new brand does not hesitate to express its chance to run 200 stores by 2020 Furthermore, since the Coffee House has established in 2014, after nearly two years of operation, this brand has 28 stores in Saigon, Hanoi, and Dong Nai The highlight of The Coffee House is a beautiful location, mostly located in the golden position in the heart of the city The first store established in September 2014 in Cao Thang, District (Ho Chi Minh City) The Coffee House's design has shaped the whole system as youthful design, suitable places for young people, along with that, it is the success of drinks and food which capture a lot of customers’ attention Therefore, to expand new stores within Viet Nam, the Coffee House can say it’s achievable because they have strong brand values as well as a considerable number of loyal customers currently The Coffee House aims to change the customers’ tastes and compete with local brands The Coffee House is competing with local brands, especially when they were the ones who discovered new market segmentation Besides, in the future, while various local brands may have to think to launch an exceptional coffee chain as well as strengthening the position of roasted coffee to compete in the market, the Coffee House doesn't need to that The reason is that the vision of their business model at the beginning has matched with the future market demands Also, with a substantial advantage in using technology in marketing, the Coffee House can ultimately create a large number of potential customers which is a vital sign to reach the opportunity of competing with local brands Besides that, the Coffee House is consistent with their chosen path The global business decided to it with their coffee because the trend of the world is doing so while the current Viet Nam customers are more driven to the instant coffee The Coffee House decided to open more stores every year to welcome more customers to come to the shop as well as generating the opportunity to change the customers' tastes with pure coffee However, when being consistent about the ingredients and processing, the process of persuading the drinker is a long way, but it is conductible The Coffee House aims to bring quality Vietnamese coffee abroad The Vietnamese’s community living abroad in general and living in Europe, in particular, have a vast market, from which they can bring Vietnamese goods to foreign countries Until now, Viet Nam people's economy still tends to be a market economy; so the fact that almost Vietnamese businesses deliver Vietnamese products to foreign countries is limited to many levels, including the lack of solid branding Currently, the market volatility in European countries is substantial, but it also opens up opportunities for us to bring Vietnamese goods of good quality and stability into this market Especial with the coffee industry, which is the most suitable industry bringing the products that matched the food standards of Europe Let turning back to the Coffee House, which is well known as owning expert teams of roasters, who can control the quality of coffee from the very first stages such as seed selection, cultivation methods, roasting recipes, and grinding to produce the final product In particular, there are two answers to the questions about how to bring VN products aboard, includes investment and location In Coffee House, there are two participations are leading to the success of Coffee House, the first one is the Seedcom Investment Fund, and the second one is the Prosperity Trees group Accordingly, Seedcom assisted The Coffee House in expanding and managing the chain of stores Prosperity Trees is helping with marketing, advertising, coffee growing, etc Because, the Coffee House which owns strong supporters as well as the products which are suitable for the foreign market, considered as having opportunities to bring the quality of Viet Nam coffee to oversea 3.6 The threats of the chains of coffee stores- the Coffee House The external threats of the Coffee House The Coffee House has collided greatly over the past two years The competitive threats come up when the competitors are not only in the F&B industry because they always located in the gold position in the downtown areas, therefore, they have to compete with other common brands in others industry, for instance, The Gioi Di Dong and Dien May Xanh which are nearby their location Besides, the threats of losing customers appear when some business models which are established in the mall but in the high floor still are not switched to locate at the foot of the building In the mall or supermarket, the shippers are hard to take the products to deliver to customers as well as some apps refuse to collaborate with the businesses which hardly contact with their shippers The internal threats of the Coffee House Starbucks has about 20 stores, but the ambition will have 100 stores within the next 3-5 years Highlands has about 130 locations and will undoubtedly continue to expand, Trung Nguyen currently owns about 100 stores and 10,000 coffee selling points under the brand name of Trung Nguyen The reasons for their success are that they will never handle with the lacking of operating capital if they sell the products at the price of 60.000 to 80.000 VND About the Coffee House, their calculation on cost of opening a store belonged to the model of The Coffee House, ranging from 80,000 to 300,000 USD in the golden position However the price of their selling drinks is between 30,000 and 60,000 VND then the threats can quickly come up when the business does not reach enough customers to cost recovery, it business model will be difficult to survive long IV Analyzing the marketing methods appearing in the marketing strategies of the Coffee House by examining the current strategies 4.1 Traditional marketing The vouchers and coupons which provide free products, services The banners which introduce the new products, special offers The workshop coffee Serve customers with dedication Say thank to customers 4.2 Technological marketing 4.2.1 SEO (Search Engine Optimization) The Coffee House has a popular website which is calculated as reaching over 1,200 visits every day compared to 40000 visits at the stores Nowadays, the Coffee House has generated enough functionality for their website including the net-click on brand stories, coffee stories, menu, customers’ rewards, news, employment and stores’ information However, in a robust competitive coffee market, almost famous brands that owned for themselves each useful websites, therefore, to compete with The Coffee House has to utilize the SEO to conduct the marking The definitions of SEO (Search Engine Optimization) Search engine optimization is the process of increasing the website's visibility on search engine results Specifically, the higher a site appears, and the more search results it has, the more people will be able to access it through search engines Besides, the purpose of applying the SEO in marking is to increase the rate of interacting with customers as well as promoting the brand values though the network tools The Coffee House’s purposes of using the SEO in marketing • • • • • • • Promoting brand information to the public Increasing interaction rate with customers Creating convenience for customers Identifying new potential groups of customers Reaching untapped market segments Help businesses expand the market Reducing the costs of digital marketing includes display ads 4.2.2 Advertisements on social media Coffee House implements a marketing method by applying social media marketing on both famous media which are Facebook and Instagram However, most of their fan page creates the public relations (PR) by affecting the customer purchases’ demand and customer attention through telling the “business stories” According to the statistic, there are more than 20 posts per month on The Coffee House’s fan page on Facebook and Instagram About the contents, the Coffee House posted a lot of workshops videos and viral clips considered as short videos as well as their stories and images about unique coffee and unique business that attract a lot of young people There are also "internal" stories about their stores and staff, and there are also stories about their community social activities Notably, this is one of the most effective forms of self-PR However, this method does not annoy customers like using the Youtube ads; all of the above ways make Coffee House like "House" of the guests Besides, Coffee House CEO has said that Facebook is an active marketing channel for restaurants and cafes Therefore utilizing this tool skillfully will bring in countless customers The purpose of marketing on Facebook and Instagram A Make customers know the Coffee House brand Whenever the Coffee House wants to launch its new stores in any locations, by using the Brand Awareness goal-setting on FB, they can create a campaign to introduce the local people to know their delicious cafe products Furthermore, the information on new discounting program also published on those social media B Exchange from media visitors to real store visitors The Coffee House wants to use FB and Instagram to encourage customers' interested in their business, it also use to make customers buy or use the product/service more frequently Besides, by using FB and Instagram, Coffee House can create a campaign to encourage potential customers to visit the nearest store as well as receive the customers' feedbacks 4.2.3 The Coffee House application What is BEAN, how to save up BEAN for rewards? From 23/09, The Coffee House will launch the new Loyalty Program - The Coffee House Rewards through The Coffee House application, with attractive privileges and privileges to bring perfect experiences to customers BEAN - a brand new unit for accumulating points at The Coffee House Rewards 3.0 appearing in the year of 2019 Business no longer uses Sao as the old program With the new program, points will entirely be changed by BEAN Besides, with the BEAN you accumulate, not only to promote members but also to exchange for more diverse and more attractive offers at the Special Store - the first time available at The Coffee House Come to the stores or order through The Coffee House's app to accumulate BEAN by making deals when buying The Coffee House products (VND 10,000 = BEAN) Particularly when customers get promoted to diamond rank, their accumulated BEAN points will be multiplied by x1.5 times Customers' rank in Coffee House application In the new version, the membership model will have changes from to ranks includes NEW - COPPER - SILVER - GOLD - DIAMOND These new promoting program will help customers to up-rank more straightforward and faster Besides, the customers’ ranks in the old version are maintained in the latest version There will be four changing periods corresponding to quarters Term 1: From January to the end of March 31 Term 2: From 1/4 to end of June 31 Term 3: From July to the end of September 30 Term 4: From October to the end of December 31 The new version’s compensation and new rewards A The compensations Categories Description Compensation Customers with 25 stars Members have accumulated from 22 to 24 stars and will receive BOGO rewards Members have reached to 97 stars BOGO rewards Up-rank to Copper membership Up-rank to the next ranks Customers in Silver but no longer reach to Gold membership Customers in Gold membership Customers in Diamond membership- 50 stars Members have reached 98 to 99 stars Free drinks Up-rank to Gold membership Gold membership reaching 45 to 48 stars Diamond membership reaching 45 to 50 stars Free drinks Customers in Diamond membership- 100 stars Diamond membership reaching 95 to 99 stars Free drinks and cakes New rewards After up-rank Prerogative Free cakes for birthday Up-size for first orders Special rewards for rank from Silver to Diamond Customers with 26 to 97 stars Free drinks B The new rewards Redeem BEAN in the rewards store Free snack when the bill is over 100.000 VND Buy get Accumulate faster- x1.6 in new version Exclusive rewards Free one coffee/ Thai tea in M size Experience new services, new features, new products, freeparticipate in workshop and events The opportunity to receive exclusive prizes of great value Free drinks and cakes V Scrutinizing the marketing strategies of the chains of coffee stores- the Coffee House 5.1 Analyzing the positioning of the Coffee House The Coffee House will be continuously positioned by using the 5P marketing strategy: People&Physical Evidence, Promotion, Price, Product, and Place This strategy will allow the cafe chain to cover all aspects needed to operate successfully without leaving out any factor It also greatly benefits the chain by determining its brand consistently and keeping track of customer insight Furthermore, customers will always be provided with a sincere attitude 5.2 Analyzing the production strategies of the Coffee House The Coffee House will launch the new seasonal menu in every season as usual but yet remain its original coffee drink line The features on the seasonal menu not only have to be attractive and creative but also be different from previous years' seasonal menus Moreover, in every seasonal menu, there will always be one to two coffee drinks so that it will manage to surprise customers who enjoy coffee and to be a place that customers come to for coffee like its name One more key in the product strategy is that features on the menu have to fit with seasons, for example, cold beverages will only be promoted during spring and summer, while hot drinks will be promoted during fall and winter only 5.3 Analyzing the pricing strategies of the Coffee House The Coffee House positions itself to be a middle-cost alternative, which is from 30.000 60.000 Vietnamese Dong for both seasonal features and original ones Its target customers with this pricing system are not only for middle-class but also for higher-class who enjoy a fair price and classality space The regular size of drinks is typically costed from 30.000 to 50.000 Vietnamese Dong depending on which items The large size of drinks has higher cost from 45.000 to 60.000 Vietnamese Dong With its strong position, The Coffee House can increase the price to place itself into the same segment with other high-class cafes However, the chain will continue to keep the middle-class price in sustained future to remain the reasonable option that customers choose to go 5.4 The distribution strategies of The Coffee House In order to reach the customers, The Coffee House has employed a selective distribution strategy where the customers will come to the shops or The Coffee House will come to them Therefore, the distribution strategy depends mostly on the “people” factor, which leads to other elements like time and location The location of the coffee shops is extremely important because it must be convenient for the customers, especially if the company are introducing its first shop to the market That will create a good impression on the customers The Coffee House is in the expanding period, so they constantly introduce new locations in the major cities in Viet Nam, although the locations of their new coffee shops are not randomly chosen They must qualify The Coffee House’s top criteria: accessible, charming, have its own parking lot, and a great view The Coffee House’s business theory is to value “people” so their customer’s opinion is counted when they need a new location and design it to be another fantastic shop in the chain The company wants to create a signature space in their coffee shops that tend to locate on the main streets and have a nice view of the busy streets in the city All of their shops have high celling and many windows which make the space wider and more open, the light is yellow which create a warm atmosphere, different kinds of table and chair are put in different sections to help customers work better, and especially small details like electrical outlets are available at each table, music playlists are comfortable, etc The Coffee House knows that coffee time is not just about coffee anymore, it is about the space and location where a customer can enjoy himself That is why The Coffee House invest their time and money in creating a great space for their customers With the internet nowadays, a customer can wear pajamas and order a drink to be delivered right to his door And The Coffee House has used this advantage in their distribution strategy They cooperate with some transport companies like Grab, GOVIET, or Now to help them deliver the service to their customer Their customers will be able to access to the full menu with a suggestion of the nearest location of The Coffee House on their phone Time and quality are the only elements that need to be carefully considered in this distribution method 5.5 The market research of The Coffee House The research had been made to analyze the customer’s experience at The Coffee House for the future development of the shops Other objectives are to know the customer’s satisfaction about the service and facility, to identify the most frequent customer group and to gather opinions in improving the customer’ satisfaction and company’s sales The Coffee House had conducted primary data from an online survey which was designed in Likert scale and multiple choices questions The survey was designed to be simple, convenient, and effective for the customers There are 43 responses that the company’s performance will be analyzed The questions focus on customer’s general opinion about The Coffee House: frequency, price, whether they come back, if The Coffee House is their first choice, what they love and hate about The Coffee House and evaluation questions in areas such as food and drinks, services, facilities, and the company’s concept According to the survey, customer segmentation can be divided into three groups in which the young adults and adults can be seen visiting The Coffee House more than the middle age customers group The result is reasonable because most customers spending times at the coffee shops model like The Coffee House are young generations who need space to work and study As such The Coffee House should design their system to be suitable for these customers in order to maximize customer’s satisfaction The second data will help the company know how frequency their customer visit The Coffee House to use the space and enjoy a cup of coffee The sample shows that 23.3% (10 respondents) visit the shops every day, follows by 2.3% (1 respondent) visit to times a week or whenever that customer hangs out with his friends Then 4.7% (2 respondents) response to twice a week and 18.6 % (8 respondents) represents once a week 30.2% (13 respondents) count for visiting The Coffee House once a month Among 43 responses, 34 respondents said he would like to come back in the future (79.1%) and customers said they won’t return (20.9%) The survey will also give the company its customers personal opinions of things that they like and hate about The Coffee House Many of them have stated that they love all aspects the company values the most: space, services, and price Although some respondent still think that their price is high for students (54%) The Coffee House is one of the famous brands in the F&B industry, therefore it is the first choice of many customers which usually makes many of The Coffee House shop crowned Which create a negative aspect for the company because some customers prefer a quiet place The company would take these negative responses on account to be able to serve its customers the best The graph below shows some opponents of The Coffee House that customers may choose over them First place is Highland Coffee (40.5%), follows by Phuc Long (31%) and then Cong Ca Phe (11.9%) and Starbucks (9.5%) The graph shows that mostly agree with an excellent menu that The Coffee House offers, after that many are unsure about the seasonal menu which the company has, and they are unsure about the coffee’s quality Lastly the customers agreed about the fresh of cakes and pastry during the day Service is one of the criteria that The Coffee House guarantee with their customers Many of them noticed the staff’s attitude toward the customers: friendly and welcoming Continue by customers are not sure if the staffs have enough knowledge to answer their questions and if staffs are able to handle issues But they are agreed with the fact that the staffs are welltrained To maximize customer’s satisfaction, The Coffee House try to provide a comfortable space for every guest Many customers like that tables and chairs are comfortable and new, the coffee shops are clean, music is not too loud, and Wi-Fi connection is strong enough Many customers are not sure about the concepts that The Coffee House can offer to their experiences at the shops, which is followed by some who agree and strongly agree with the idea that the Coffee House want to deliver With the goal is to apply “people” factor in their business plan, The Coffee House should promote the existing features to help those are not yet satisfied with what The Coffee House have to offer them Beside the original plan, the company would need to develop another way to let the customers know about the existing and new service, product, and experiences that they could buy at The Coffee House With customers who lack of information, the company may not reach the goal they have set The Coffee House should design more discount programs to prove that The Coffee House can offer great service with a reasonable price compared to others VI Exploring the details of the Coffee House marketing action programs The Coffee House action programs are to optimize customers' experience, to boost customercentred services through the 5P strategy: • People & Physical Evidence: The Coffee House space is designed to create the feeling of being home as much as possible: high rise architecture with the use of glass windows creates an open space, yellow lights increase the feeling of coziness, tables and chairs are arranged in areas to have both co-working space and meeting space Other details, such as outlet designed for convenience, smooth music playback, friendly staff, etc are also taken care of by The Coffee House to provide the best experience for customers • Promotion: The Coffee House always takes customers' stories as the center of their content, instead of focusing on products Photos and posts shared with the theme of "Humans of The Coffee House", are highly invested by the brand Every activity in The Coffee House's marketing communication strategy closely follows the "Home" • position and insights from its target audience Price: The price strategy is given when placing itself as a customer and asking questions: How much does it averagely cost to experience at a coffee shop? Does that cost correspond to what is provided? Is it affordable to go frequently with this price? After all, the brand towards the best price possible for customers: average 30.000 - • 40.000 Vietnamese Dong/person Products: The Coffee House constantly improve their menu In addition to popular coffee, the brand also develops many other products, such as milk tea, ice-blended, macchiato series, This has brought many alternatives to customers, when coming to The Coffee House, and contributed greatly to retaining customers It recently starts to • go green by reducing the use of plastics to create eco-friendly products and packages Place: Not only does it impress through the dense appearance in big cities, but the brand also earns points by choosing the right location for the target audience The Coffee House's stores are always located in easy-to-find and easy-to-park locations, in the center of the district, where the street view is upfront VII Budget for operating the marketing strategies of the Coffee House Types of Marketing Predicted costs Percentage of effectiveness Coffee House signature to million USD/ year 100% growth rate in 2018 Self-produce coffee materials 318 to 409 USD/ coffee farmer/month 4.500 to 9,090 USD / maintain the coffee quality/ month 30.000 to 40.000 USD/new store Reduce 9.7% costs of purchasing coffee materials Open new branches Staffs-training Traditional marketing 100.000 to 300.000 USD/month 15% in company’s stock for all staffs/year 136.360 to 181.818 USD/year Technological marketing 90.000 to 136.360 USD/ year Market research/SWOT analysis/ promoting strategy 45.454 to 136.360 USD/ year Depend on the customers’ purchasing rate 100% growth rate in 2018 40.000 customers/ day 40.000 customers/ day 40.000 customers/ day Predicted as increasing 30% in next months 40.000 customers/ day Predicted as increasing 30% in next months Pricing/production strategy 9.000 to 13.636 USD/ year Predicted as matching about 70% with customers demand in future Promoting the brand values and brand images 500 thousand to million USD/ year Predicted as matching about 70% with customers demand in future Expenses Summary About million USD Unpredicted Profits Summary About 31.82 million USD Increase in future VIII The controlling of marketing strategies in the Coffee House By monitoring the service’s quality and customer’s response, The Coffee House will be able to react quickly and precisely under any problems that may occur There are many ways that the company can apply to receive early signs of deviations from the plan includes the customer’s survey and monthly sales report The Coffee House would also need to research regularly to keep up with the shifting in customer’s preference, customer’s behavior, new menu, and new competitors in the market ... of coffee stores- the Coffee House 3.6 The threats of the chains of coffee stores- the Coffee House IV Analyzing the marketing methods appearing in the marketing strategies of the Coffee House. .. conducting the marketing strategies 3.3 The strength of the chains of coffee stores- the Coffee House 3.4 The weaknesses of the chains of coffee stores- the Coffee House 3.5 The opportunities of the. .. Scrutinizing the marketing strategies of the chains of coffee storesthe Coffee House 5.1 Analyzing the positioning of the Coffee House 5.2 Analyzing the production strategies of the Coffee House 5.3