486 assignment 2 Passed Marketing 7ps analysis nghiên cứu thị trường thông qua mô hình 7ps

ASSIGNMENT 2 FRONT SHEET
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BTEC Level 4 HND Diploma in Business

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Unit 2 Marketing Essentials

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2019

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INTRODUCTION
In this report, I will present my personal research about extended marketing mix applications of Vinacafe and
Trung Nguyen cafe in comparison and give my individual evaluation as well.
The marketing mix
Marketing mix only gathers marketing tools used by businesses to achieve marketing goals in the market. The
term was first developed in 1950 by Neil Borden (Borden, 1964). A famous marketer, E. Jerome McCarthy,
suggested sorting by ‘4Ps’ in 1960, which is now widely used (Brassington & Pettit, 2005).

Marketing mix which is classified according to 4P model includes: Product, Price, Place, Promotion are used in
goods marketing activities. Over time, this model was developed into 7Ps according to the complexity and
improvement of modern marketing. Booms and Bitner (1981) have introduced other additional 3Ps: Process,
People, and Physical Evidence to improve the marketing activity when the product no longer stops at the line
tangible chemistry is also invisible services.
The successful of marketing relies in interaction and synergy between marketing mix elements as it does on
good decisions within those elements themselves. A good product with bad communication will not work, and
similarly a bad product with the glossiest advertising will not work either (Brassington & Pettit, 2005).
Companies in brief:
Trung Nguyen Group is an enterprise operating in the fields of coffee production, processing and trading;
franchise; modern distribution, retail and tourism services. Trung Nguyen Coffee is one of the leading famous
brands in Vietnam and is present in more than 60 countries around the world.
The Vinacafé brand was established in 1983, and the company became a joint stock company in December
2004. Its coffee products have been awarded the title of "Highest Quality Vietnamese Product" in 1995.
1. Product
Product is one of the first marketing mix components in 4p series. It can be a tangible product or an invisible
service that can meet, serve, satisfies the needs of customers. Then the brand factor, you can use the company
brand associated with the product to create new names. This element may depend on the Language at each
location. Next is packaging and labeling. Finally, you should add more support services to customers during the
purchase process to bring them complete and highly responsive products.
Trung Nguyen: focus on developing the diversity of instant coffee product (highly convenient). Many
kind of coffee types was produced to serve the different taste of customer like black coffee, brown
coffee, milk coffee, white coffee, strong coffee, coffee for women. Moreover, the company still have
various products aim to upper class like Weasel Coffee, roasted coffee, capsule coffee.
When the company runs marketing in Vietnam they call on Vietnamese people to use Vietnamese
goods, they also open drinking test programs so that customers can evaluate the quality of their coffee
products with other competitors' coffee products. Beside that, Trung Nguyen also pays great attention
to packaging, they pack the coffee into small packages that are easy for users to carry.
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Vinacafe: same product line of Trung Nguyen. Vinacafe also develop new product in creative way like
the combination of energy drink and the taste of coffee: Wake Up 247. They think that can attract the
customer’s attention who love both products.
Both companies use this type of strategy to prolong their product line, take competitive advantage.
Although they don’t have any changing on raw materials but they advertise like it’s the new product.
Moreover, they change their product to more convenience and create an image that they are the best
choice.
2. Price
Price is an important marketing mix tool for both creating and capturing customer value ( Kotler, P. and
Armstrong, G., 2013)
Valuation in today's fiercely competitive environment becomes extremely important and challenging. If
product prices are set too low, businesses will have to focus on selling in larger quantities to earn profits. If
the price is too high, customers will gradually turn to competitors products. The main factors included in
the price strategy include initial price, list price, discounting rate.
There has two way to set price, the first is determined by value-based, second is cost-based. Marketer will
decide which way they use by depending in what they provide, the need of customers or their perception
to this product.
The beverage market is almost exclusive with a large number of customers and few sellers. Due to the
wide distribution of products, the price of Vinacafe products depends on the price of competitors, Trung
Nguyen coffee. Both brands use methods to lower product prices as a discount for retailers when buying in
bulk. Therefore, the volume of goods will be consumed at a faster rate with higher interest rates.
The price is not much different when referring to intermediate distribution units such as Shoppe, the price
for 1 box of coffee wake up of Vinacafe is 18 packs each pack is 17gram is sale for 30,000 VND, Trung
Nguyen coffee is 33,000 VND for 18 packs each pack is 16 grams.

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3. Place

Distribution channels are representative of where a product can be traded, displayed, introduced. Distributors
can be retailers or e-commerce stores on the internet. Owning a distribution system is an important factor to
bring products to customers. If businesses do not invest, develop proper distribution channels can waste effort
to advertise and produce products without making the market successful.
On consumer channel, we can apply producer to consumer, producer to retailer to consumer or producer to
wholesaler to retailer to consumer.
On business channel, we have producer to business customer, producer to business distribution and producer
to mfr. rep to business distributor to business customer.
As of the end of 2017, Vinacafé's product distribution system (Masan Beverage's distribution system) is
considered the strongest, deepest and most extensive distribution system in the country with more than
130,000 retail outlets. Set market in 63 provinces and cities nationwide with 3 distribution centers in the
North, Central and South.
  Distribution of export goods - future prospects. Currently, Vinacafé brand not only develops in the domestic
market but also expands the international market by exporting instant coffee products to many countries
around the world such as China, America, Canada, Taiwan, ... Revenue from export sales of Vinacafé in 2017
reached VND 184 billion, accounting for 5.66% of the Company's total sales revenue. Total revenue: VND
3,249 billion. (vinacafe, 2017)
Trung Nguyen applies both business and consumer channels
Manufacturer to wholesaler: 121 exclusive distributors
Manufacturer to retailer: 7000 sale points and 59000 retail stores
Producer to consumer: Trung Nguyen cafe has its own store named G7. This store chain is reaching 200 stores
The first company in Vietnam to implement franchising business model with about 1000 franchise cafes.
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Trung Nguyen coffee products are exported to more than 60 countries worldwide, typically USA, Canada,
Russia, England, Germany, Japan, China, Asean... the total revenue is 3,950.7 billion in 2017, G7 provides
nearly 16 billion cups of coffee to global customers (vietnambiz, 2017).
To compare Trung Nguyen got better results by its product distribution network.
4. Promotion

After planning and developing a good product, setting a suitable product price, and making it available to
customers, the companies now need to communicate their value propositions to customers ( Kotler, P. and
Armstrong, G., 2013). The purpose is to improve the consumers’ awareness about their products, leading to
the developing in sales, and also creating brand loyalty. There are many kinds of promotion mix: advertising,
sale promotion, public relation, personal selling and direct marketing.
Developing effective communication which have 5 steps. First is identifying target audience, then is set the
communication objectives that may to raise customer awareness in products and support for sales. Third, we
design the message which are encouraged to align well with the company branding and reputation. Then, you
choose media and select message source.
Each Trung Nguyen product offers its own message:
“Cà phê Trung Nguyên giúp suy nghĩ mạnh hơn”
“Đaị diện thanh niên thế kỷ 21 với tách cà phê”
‘Nghĩ nhanh và mạnh như 777”
So the target audience of Trung Nguyen is every kinds of people who use café like the inspiration source to
help people creative that lead to success.
Vinacafe said that this business will only sell pure coffee, instead of soy-based products like before. The brand
conveys the message: "At Vinacafé, we always believe that" coffee must be coffee ". From August 1, 2016,
every coffee from Vinacafé is pure coffee. It like the commitment from vinacafe so people can enjoy the taste
of truly café with no nervous.
Both companies use variety of medias: public banner, TV commercial, intermediaries.
The report on the popularity of instant coffee brands conducted by Vinasearch in April 2017 shows that, in
terms of brand popularity, take turns at the top of the measurement indicators including Nescafé and G7
(Trung nguyen cafe) has the highest popularity, 31.7% and 30.8%, respectively. The two leading brands keep a
long distance from the rest of the top brands: Vinacafe 17.3%, Wake up 7.1%, Café Pho 6.5% (vinasearch,
2017).
5. People
Many services depend on direct, personal interaction between customers and a firm's employees (like getting
a haircut or eating at a restaurant). The nature of these interactions strongly influences the customer's
perceptions of service quality. Customers often judge the quality of the service they receive largely on their
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assessment of the people providing the service. Successful service firms devote significant effort to recruiting,
training, and motivating their personnel, especially but not exclusively those who are in direct contact with
customers (Christopher H. Lovelock, 1999).
For Trung Nguyen, they have G7 mart chain stores to supply products directly to customers, also have their
own branded coffee shops, staff standards are always attentive and enthusiastic to guests. In Vinacafe, it
mainly distributes products to wholesale and retail agents, so the people factor does not stand out as Trung
Nguyen coffee.
6. Process
A particular method of operations or series of actions, typically involving steps that need to occur in a defined
sequence. The process describes the method and sequence in which service operating systems work. Badly
designed processes are likely to annoy customers because of slow, bureaucratic, and ineffective service
delivery. Similarly, poor processes make it difficult for front-line staff to do their jobs well, result in low
productivity, and increase the likelihood of service failures (Lovelock & Wright, 1999).
There are a few sorts of process can be used here in services. To begin with, people processing is the process
of tangible actions to people's bodies (hair shop, motel, hostel, restaurant). The second one is possession
process which involves tangible actions to goods and other physical possessions belonging to customers (fixing
service, store). The third is mental stimulus process has intangible actions directed at people minds (weather
forecast, cinema). The last one is information process which is Includes intangible actions directed at
customers' assets (insurance, banking service).
The challenges in the service process are to ensure productivity, quality, demand and capacity at the same
time. Therefore, process design should be carefully considered so that both profit and customer satisfaction
can be improved.
Both companies, in process of processing products, checking samples with strict standards. Preserving coffee
beans in a dry place and often checking humidity, packaging with special lining and one-way valve.
Because Trung Nguyen has its own chain of coffee shops, they also have the process of serving customers to
use the product in their shops enthusiastically, full of the flavor of coffee to satisfy customers. In that case we
can see the process from Trung Nguyen more complete than Vinacafe because of Trung Nguyen has the
service process. In my point of view Vinacafe should provide the service process to increase competitive

advantage to the rival industry.
7. Physical evidence
The appearance of buildings, landscaping, vehicles, interior physical evidence: visual furnishing, equipment,
staff members, signs, printed materials, and other visible cues all or other tangible clues that provide tangible
evidence of a firm's service style and quality. Service firms need to provide evidence of service manage
physical evidence carefully because it can have a profound impact on quality, customers' impressions. In
services with few tangible elements, such as insurance, advertising is often employed to create meaningful
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symbols. For instance, an umbrella may symbolize protection, and a fortress, security (Christopher H. Lovelock,
1999).
In the coffee shops of Trung Nguyen, the special feature of these cafe shop is the open space, relaxing music
for customers, there are many types of books for customers to read while enjoying coffee.
The uniform that has designed polite, elegance, friendly with customers, that is the combination of black and
red which black is coffee, the red one stands for the color of nation- Vietnam
Vinacafe once again that don’t have the coffee shops or any physical evidence like Trung Nguyen so they need
to upgrade themselves to not to lose Trung Nguyen Café.
In conclusion, we can see Trung Nguyen has great advantage to expand the market compared to Vinacafe, the
reason here, we can conclude is Vinacafe now is not concentrating in the last 3P so they are loss of advantages
compared to Trung Nguyen café.
References
Kotler, P. and Armstrong, G., 2013. Principles of Marketing. 15th ed. London: Prentice Hall.
Borden, N., 1964. marketing. s.l.:s.n.
Brassington & Pettit, 2005. Essentials of marketing. London: Pearson.
vietnambiz, 2017. vietnambiz. [Online]
Available at: />[Accessed 22 February 2019].
vinacafe, 2017. annual report , Bien Hoa: vinacafe.
vinasearch, 2017. Popularity of instant coffee, Vietnam: Vinasearch.

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