KTHP Mar Service CLMarketing Phuc Long Coffee&Tea PDF

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THE MINISTRY OF FINANCEUNIVERSITY OF FINANCE – MARKETING-----o0o-----SERVICES MARKETINGTOPIC: ANALYSIS OF MARKETING STRATEGY 7Ps OF PHUC LONG COFFEE & TEA BRANDCourse Code: 2021702052704Group 7Nguyễn Thị Kiều Diễm (1921005387)Nguyễn Thị Kiều Diễm (1921005388)Trương Thị Tố My (1921005533)Phan Thị...

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THE MINISTRY OF FINANCE UNIVERSITY OF FINANCE – MARKETING -----o0o-----

SERVICES MARKETING TOPIC: ANALYSIS OF MARKETING STRATEGY 7Ps OF PHUC LONG COFFEE & TEA BRAND

Course Code: 2021702052704 Group 7 Nguyễn Thị Kiều Diễm

(1921005387)

Nguyễn Thị Kiều Diễm

(1921005388)

Trương Thị Tố My

(1921005533)

Phan Thị Anh Thư

(1921005683)

Hoàng Ngọc Hải Yến

(1921005805)

Majors: MARKETING Specialized: MARKETING MANAGEMENT

Ho Chi Minh City, 2021

Table of contents Introduction ................................................................................................................... 1

I.

1.1. Reasons for choosing the topic .......................................................................................... 1 1.2. Research objective ....................................................................................................... 1 1.3. Introduce about Phuc Long Coffee & Tea ..................................................................... 1 1.3.1. History of establishment and development process....................................................... 1 1.3.2. Vision..................................................................................................................... 2 1.3.3. Mission .................................................................................................................. 2 1.3.4. Core values............................................................................................................. 2 1.3.5. Areas of operation ................................................................................................... 2 II. Market & Competitors Analysis ...................................................................................... 2 2.1. Market Analysis ........................................................................................................... 3 2.1.1. Market share ........................................................................................................... 3 2.1.2. Operation status of coffee shop chains ....................................................................... 3 2.2. Competitors Analysis .................................................................................................. 5 2.2.1. Direct competitors ................................................................................................... 5 2.2.2. Indirect competitors ................................................................................................. 5 III. Target customers analysis & Positioning Strategy ............................................................ 5 3.1. Segmentation ............................................................................................................... 6 3.2. Targeting ..................................................................................................................... 6 3.3. Positioning ................................................................................................................... 6 IV.

Analyzing the Marketing Mix (7Ps) Strategies .............................................................. 7

4.1. Services Product strategy ............................................................................................. 7 4.2. Pricing strategy .......................................................................................................... 10 4.3. Distribution strategy .................................................................................................. 14 4.4. Promotion strategy..................................................................................................... 18 4.5. Service processes management.................................................................................... 23 4.6. Physical evidences management .................................................................................. 28 4.7. People management ................................................................................................... 32 4.7.1. Human resource organization model........................................................................ 32 4.7.2. The people factor determines service quality. ............................................................ 34 V.

Evaluation & recommendation ...................................................................................... 36 5.1. Services product strategy............................................................................................ 36 5.2. Pricing strategy .......................................................................................................... 36 5.3. Distribution strategy .................................................................................................. 37

5.4. Promotion strategy..................................................................................................... 37 5.5. Service processes management.................................................................................... 38 5.6. People management ................................................................................................... 39 5.7. Physical Evidence ....................................................................................................... 39 CONCLUSION.................................................................................................................... 40 REFERENCES .................................................................................................................... 41

TABLE LIST Table 4.1: Price list of some products at Phuc Long ................................................................... 10 Table 4.2: Positions and duties of each position at Phuc Long Coffee & Tea shops ........................ 33

PICTURE LIST Figure 2.1:Overall Buzz Volume about Coffee Shop Chains in Vietnam in 2020 ............................. 3 Figure 2.2: Revenue and profit of Coffee Shop chains in Vietnam over the years ............................ 4 Figure 3.1: Competitor-based positioning map ............................................................................ 7 Figure 4. 1: The pricing tripod................................................................................................. 11 Figure 4.2: Phuc Long kiosk model at Vinmart New City - Distrisct 2 ......................................... 15 Figure 4.3: The dense order of the Phuc Long Kiosk model is arranged inside Vinmart .................. 15 Figure 4.4: Phuc Long Phan Xich Long branch – Phu Nhuan district ........................................... 16 Figure 4. 5: Number of stores of Phuc Long and competitors ...................................................... 17 Figure 4.6: Information and Physical Processes of the Augmented Service Product ....................... 17 Figure 4.7: Phuc Long Gift Card program................................................................................. 20 Figure 4.8: 20k voucher promotion .......................................................................................... 21 Figure 4.9: The flowchart of Phuc Long Coffee & Tea ............................................................... 23 Figure 4. 10: The blueprint of Phuc Long Coffee & Tea ............................................................. 26 Figure 4. 11: Phuc Long Coffee & Tea Logo ............................................................................ 28 Figure 4. 12: Phuc Long Dinh Tien Hoang Branch, District 1 ..................................................... 29 Figure 4. 13: View at Phuc Long Pho Quang branch, Tan Binh district ........................................ 30 Figure 4. 14: Some designs of Phuc Long Coffee & Tea ............................................................. 31 Figure 4. 15: Human resource organization model at Phuc Long Coffee & Tea ............................. 32

I.

Introduction

1.1. Reasons for choosing the topic Vietnam has always been considered an attractive coffee and tea chain business market with market size of about 1 billion USD/year (according to research by Euromonitor). This is also a very competitive and tough market because of the presence of countless brands. In which, the most prominent brands can be mentioned such as The Coffee House, Phuc Long Coffee & Tea, Highlands Coffee, Cong Coffee. Each brand has a different style, drink, price, and service, but the common point between them is that they are all famous and extremely familiar brands for Vietnamese consumers. The reason these brands are able to succeed and stand firm in the fiercely competitive market is partly due to an effective 7P marketing mix strategy. Therefore, the writer wants to know how these brands build and execute their marketing strategies. The writer chooses Phuc Long Coffee & Tea as the object of the writer's research and the topic that the writer chooses is "Analyze marketing mix 7P's strategy of Phuc Long Coffee & Tea in Vietnam market."

1.2. Research objective -

Research and analyze the current situation of Phuc Long Coffee & Tea marketing mix activities, including elements of services product, price, distribution, promotion, service processes, physical evidence, people.

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Make comments, evaluate and propose solutions to improve the 7P marketing mix strategy for Phuc Long Coffee & Tea.

1.3. Introduce about Phuc Long Coffee & Tea 1.3.1. History of establishment and development process -

In 1968, Phuc Long was founded in the famous tea plateau Bao Loc (Lam Dong).

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In 1980, Phuc Long opened the first three stores selling products in Ho Chi Minh City on Le Van Sy, Tran Hung Dao, and Mac Thi Buoi streets.

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In 2000, Phuc Long trading production company limited was officially established.

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In 2007, Phuc Long took possession of a tea hill in Thai Nguyen and at the same time invested in building a coffee and tea factory in Binh Duong.

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In 2012, the first Phuc Long Coffee & Tea store was launched at Crescent Mall District 7. That was an event marking a turning point in Phuc Long's development history when the company officially entered the Food & Beverage field with Phuc Long Coffee & Tea shops operating under the self-service model in a modern, classy, and outstanding space. 1

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So far, Phuc Long Coffee & Tea chain stores have been present in all major cities across the country (Ho Chi Minh City, Hanoi, Da Nang, Nha Trang, Binh Duong).

1.3.2. Vision -

With the ceaseless passion for expanding the market through sustainable development, Phuc Long is striving to become a company specialized in manufacturing and exporting high-quality coffee and tea in Vietnam.

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Phuc Long hopes to create a Vietnamese brand with outstanding quality reflected in each product, thereby gradually affirming its position in the international market.

1.3.3. Mission -

To become a pioneer by creating new ideas for the coffee and tea industry.

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To develop an outstanding brand, motivate one another, as well as turn the ideas into reality over unity, interaction, listening, and respect.

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Maintain high quality that satisfies customers by having a deep understanding of their needs and values.

1.3.4. Core values -

To the consumers: Commit to supplying the best quality products and services.

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To the employees: Continue to improve the professional, dynamic and creative work environment. Provide a fair and equitable work environment that facilitates opportunities for advancement.

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To the community: Balance between the benefits of the company and those of the community, actively contribute to the social activities of the community, and always show a high sense of responsibility.

1.3.5. Areas of operation -

Manufacture, export, and trade finished products of coffee and tea (packaged).

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Offer food and beverage services at Phuc Long Coffee & Tea shops: + A comprehensive variety of food and drinks. + A fine selection of cakes and fritters. + Delivery service.

II.

Market & Competitors Analysis

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2.1. Market Analysis 2.1.1. Market share According to the report of Coffee shop chains landscape on social media in 2020, The Coffee House, Phuc Long Coffee & Tea, and Highlands Coffee were the top three brands with coverage across social networks when holding more than 75% market share in discussing chains about coffee shops. Following were many domestic brands such as Ong Bau Coffee, Cong coffee, Trung Nguyen, Milano, Passio, GUTA... showing a strong wave of pure Vietnamese brands in the current market. The most popular international brand on social media was Starbucks ranked at fourth place with 14.4% of the discussion market share

Figure 2.1:Overall Buzz Volume about Coffee Shop Chains in Vietnam in 2020 (Source: Coffee shop chains landscape on social media in 2020)

2.1.2. Operation status of coffee shop chains In 2020, Highlands Coffee has continued to hold its position as the largest coffee chain in Vietnam, with the distance from the other group not much changed. Total revenue has reached nearly 2,140 billion VNĐ, only a slight decrease compared to the previous year The 2nd position was mixed when The Coffee House with a relative decline fell to 3rd place. Phuc Long grew slightly, rose to 2nd place. The situation at Starbucks is not much different from The Coffee. House. These three coffee chains recorded revenue in the range of 700-800 billion VND. From 2019 onward, all three beverage chains have recorded "dizzying" growth

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rates, averaging 30-40% per year. This further shows the tremendous impact of the pandemic on the entire F&B industry, of which the above names are just examples In the following group, Trung Nguyen Franchising, the unit set up to manage the Trung Nguyen Coffee Space chain, lost one-third of its revenue. NISO Group, the management unit of the restaurant & coffee chain with the RuNam brand, even more than halved its revenue In terms of profits, there is a divergence among the major coffee chains. Notably, in the case of Highlands Coffee and Phuc Long Coffee & Tea, profits increased by 45% and 119%, respectively, reaching 80 billion VND and 35 billion VND. Somehow, both coffee chains have still increased efficiency amid the epidemic. The group of coffee chains that were already losing money suffered heavier losses, including The Coffee House, Trung Nguyen Franchising and NISO Group. Starbucks, a foreign coffee chain, saw a sharp drop in profit, from 39 billion VND to 5 billion VND

Figure 2.2: Revenue and profit of Coffee Shop chains in Vietnam over the years (Source:Cafef.vn)

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2.2. Competitors Analysis 2.2.1. Direct competitors Highland Coffee, Starbucks, The Coffee House are formidable competitors of Phuc Long Coffee & Tea in the coffee shop chain market in Vietnam. -

Highlands Coffee: Because Highlands Coffee pursues middle-class target audiences, office workers and young people are the main, so the main business strategy of Highlands Coffee is to open shops in office buildings (Grade A is awarded). prioritize). Highlands Coffee chain currently has more than 336 stores. Highland Coffee's revenue reached nearly 2,200 billion VND in 2019 and nearly 2,140 billion VND in 2020, far surpassing and more than double the total profit for the remaining competitors

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Starbucks: In 2019, the revenue of the Starbucks chain reached more than 780 VND billion, an increase of more than 32% compared to the previous year thanks to faster system expansion. This number helps the world-famous coffee chain stand in the group of chains with the highest revenue, behind Highlands Coffee, The Coffee House

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The Coffee House: After many times of scaling up and raising capital, The Coffee House has become the second-largest coffee chain in Vietnam (after Highlands Coffee). The Nikkei Asian Review at the end of 2018 rated The Coffee House as one of the chains with the highest growth rate today. The difference of this chain is that it does not invest in stores in golden locations, but has a rich menu of drinks, moderate prices, high-speed wifi, a large area, targeting the young customer segment. In 2019, this chain's revenue reached 863 billion VND, an increase of nearly 30% compared to 2018. However, The Coffee House was the highest loss chain in the leading group, with a negative profit of more than 80 billion VND. With the highest gross profit margin among coffee chains, the main reason for this chain's loss is its high selling costs

2.2.2. Indirect competitors Phuc Long also has competitors from alternative products such as famous milk tea brands KOI, Tocotoco,... In addition, on the market, there are a variety of beverage products rich in types, designs, and tastes, such as C2 tea, 0-degree green tea; or carbonated drinks such as Pepsi, Coca Cola... are strongly competitive products in the youth market segment

III.

Target customers analysis & Positioning Strategy

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3.1. Segmentation The first segmentation: high-end class with high income. They are willing to pay a high amount of money not only to enjoy a quality drink but also want to show their caste and value while enjoying the atmosphere, the decoration, and the service attitude of the staff. The second segmentation: the group of customers with an average income in this segment are mainly office workers and students. They are less concerned about price, rather a concern about the quality, and need to find comfortable spaces to meet friends, work, and exchange. The third segmentation: low-income, much consideration for the price. There is no need for quality drinks and enjoyment, finding space for themself.

3.2. Targeting Phuc Long Coffee & Tea targets middle-class customers from office workers to energetic young people such as students and foreign tourists when coming to Vietnam. These customers come to the store not only to talk or meet friends and partners, but also to find themselves a comfortable, spacious space to focus on studying, working, and creating.

3.3. Positioning -

The company has succeeded in positioning the brand in the minds of customers as a premium tea, "expensive but worth it".

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Positioning of Phuc Long Coffee & Tea for: + Customers: A place to stop, work, relax and chat. + Products: Phuc Long produces and distributes quality, delicious, full of Vietnamese flavor tea and coffee products. + Market: Phuc Long wishes to bring its products to many places across the country along with reliable quality and service at a reasonable price for consumers.

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Positioning based on competitors:

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Figure 3.1: Competitor-based positioning map

IV.

Analyzing the Marketing Mix (7Ps) Strategies

4.1. Services Product strategy A service product comprises all elements of service performance, both tangible and intangible, that create value for customers. Service products do not lead to ownership or transfer of ownership. Customers will feel disappointed and uncomfortable when using service products that are not as expected. On the other hand, customers will be satisfied and happy when service products' quality not only meets but also exceeds their expectations. Feelings and reviews of customers are the most important recognition for the service products' quality. Service products consist of: -

Core product: the central component that supplies the principal, problem-solving benefits customers seek.

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