final exam principles of marketing

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<b>VIETNAM NATIONAL UNIVERSITYUNIVERSITY OF ECONOMICS AND BUSINESS</b>

<b>SCHOOL OF BUSINESS ADMINISTRATION</b>

<b> FINAL EXAM</b>

<b> PRINCIPLES OF MARKETING</b>

<b> Lecturer : Ph.D.Hoang Dam Luong Thuy Student : Tran Nhat Trang Quynh Student ID : 21050318</b>

<b> Class code : BSA2002-E*1</b>

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<b>HAIDILAO</b>

<b>A.INTRODUCTION</b>

<b>1.BRAND STORY </b>

The brand Haidilao was founded in 1994 by Zhang Yong. Haidilao is a small restaurant selling Sichuan spicy hot pot dishes. With over 20 years of development, Haidilao has become a world-renowned catering enterprise. By the end of June 30, 2020 , Haidilao has opened 935 chain restaurants in China, Singapore, Vietnam…

<small> Zhang Yong In 1994, Haidilao HotPot Restaurant was founded inSichuan Province</small>

Haidilao focuses on how to serve customers to make the best impression every time they come to the restaurant: listen, care about what customers need to improve quality. In this way, Haidilao brand has become an international brand and is the only Chinese brand in the ranking of 25 famous brands globally. Besides, Haidilao also tops YouGov’s 2022 Dining and QSR rankings in China.

<b> Over the years, Haidilao has withstood the challenges of the market as well as</b>

customers, and has successfully forged a quality hot pot brand which has earned a reputation for itself. Haidilao combines many kinds of characteristics of hot pot in

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many places of China. As a large-scale chain catering enterprise with operations all over the world, Haidilao adheres to integrity in business. It gives the highest priority to continuously improving the quality and safety of its food products, providing more thoughtful services to its customers while delivering healthier, safer and more nutritious food.

The first feature of the product is the extremely strong Sichuan hotpot. Haidilao's marketing strategy does not stop at the promotion of these hot pot sauces to diners. Diners can unleash their creativity in making hot pot sauce according to their own taste. This is also one of the experiences that attracts many diners to come back for the next time.

The dipping sauce counter is arranged in an open space. Here, diners can make their own according to their personal preferences in addition to the available recipes to suit their preferences. With the motto of putting customer experience first, Haidilao staff will be ready to advise on the right recipe for customers who have difficulties at this stage. And coming to Haidilao, the impressive noodle dance is a special experience. that customers should not miss when coming here.

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<b>2. BRAND VISION</b>

“Communication is a must in establishing trust among people and Chinese hot pot is a perfect choice for enhancing social networking at table. Haidilao is committed to encouraging more people to chat with each other and enjoy their food at table, and creating a kind of table culture favored by young people around the world.”

<b>3. BRAND PHILOSOPHY</b>

Haidilao always commits to the mission of creating happy hot pot time and spreads healthy hot pot culture to foodies all over the world through selected products and innovative services. As a large restaurant chain with global outreach, following the business principle of integrity, Haidilao seeks to provide consumers with more thoughtful services and healthier, safer and better food with more nutrition, while enhancing the stability and safety of food quality.”

<b>4. BRAND SERVICE</b>

Taking customer experience as their top priority, Haidilao always provides innovative and pleasant services to their customers. All the personalized services offered by our restaurants are derived from the innovative ideas of our staff. These warm and personalized services turn every meal into a happy experience.

Haidilao always knows how to please customers and understand customer insights. All Haidilao employees are trained to satisfy any needs of customers. You will easily see trending customer tik tok videos with viral Haidilao staff. Being encouraged makes many people come here to experience such a dedicated service style. Therefore, what can be learned here is to always focus on the quality of the food, take care of customers, and bring the best experience to customers when coming here. From then on, customers will always mention Haidilao even though Haidilao doesn't spend that advertising cost.

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- Competitive Landscape China - Chinese Cuisine Market - Haidilao Leading in a Highly Fragmented Market:

+ Haidilao ranked first in the Chinese cuisine market in the PRC in 2015, 2016 and 2017 in terms of revenue.

+ Haidilao also had the highest annual guest traffic at approximately 103.2 million guests in 2017.

+ In 2017, Haidilao was one of the fastest growing restaurant groups among major Chinese restaurant groups.

+ Haidilao ranked first among major Chinese cuisine brands in terms of certain key performance indices, including but not limited to table turnover rate, annual sales per restaurant and annual guest traffic.

- Global Chinese Cuisine Market - Haidilao: the Clear Leader in Overseas expansion:

+ In order to take advantage of the growth of the global Chinese cuisine market, a number of China-based restaurant groups have expanded overseas in the past few years.

+ The five largest players only held a 0.6% share of the global market in terms of 2017 revenue. Haidilao was the largest Chinese cuisine company globally in 2015, 2016, and 2017 in terms of revenue.

<b>2. SUPPLIERS</b>

- Haidilao primarily procure food ingredients that do not require processing from third-party suppliers and processed Ingredients from Shuhai Group

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- Decoration materials, renovation services and decoration project management services from Shuyun DongFang.

- Soup base and instant hot pot products from Yihai Group. - Lamb products from Jarud Qi Haidilao.

- Human resources management and consulting services from Weihai Consulting

=> Haidilao generally has more than two qualified suppliers for each type of major food ingredient to reduce reliance on a single supplier. Through our years of operations, it has identified and established stable business relationships with high quality suppliers for our major food ingredients → Suppliers are not too concentrated.

<b>3. CUSTOMERS</b>

the most popular dine-out option among Chinese cuisine brands.

- <b>Dining experience: Haidilao ranked first in terms of dining experience</b>

among Chinese cuisine restaurant brands: Approximately 99.3% of participants who have dined at Haidilao left satisfied, among which over 50% of participants were very satisfied with the dining experience.

major Chinese cuisine brands.

- <b>Repeat guests: 68.3% of the participants who have dined at Haidilao visit at</b>

least once every month and 98.2% of the participants who have dined at Haidilao would visit again.

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<b>4. MARKETING INTERMEDIARIES </b>

- Haidilao is known as a chain of famous hot pot restaurants around the world and currently has 466 directly managed non-franchise stores with a growth rate of 5-7 stores opening each year. In Vietnam, Haidilao currently has 14 facilities with premises mainly in 2 big cities, Ho Chi Minh and Hanoi. Haidilao grills are mostly located in commercial centers or luxury buildings in the central area.

- Hadilao distributes services through 2 channels:

+ Directly: Haidilao’s restaurant => customers come to the counter to order, order via machine => experience the service

+ Indirect: customers order via website, fanpage => shipper receive goods and

+ According to its prospectus, 60 percent of the funds raised will be used for company expansions in the next three years, while 20 percent will be used for R&D and the application of new technology, and 15 percent for loan repayment. The underwriters of this IPO include CMB International Capital and Goldman Sachs.

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+ In 2017, Haidilao earned a revenue of 10.76 billion yuan ($1.57 billion), up 35.9 percent from the year prior, while its revenue grew by 7.5 percent to 1.19 billion yuan. A breakdown of Haidilao’s revenue in 2017 shows that 97.6 percent of its total revenue came from its restaurants business.

+ According to a report by Sullivan, Haidilao ranks first in revenue amongst all Chinese food restaurants around the world for the year 2017.

+ Book KOLs, KOCs do PR for this brand. Synopsis: Their journey to eat hot pot; how were they served while eating hot pot in Haidilao?; how do they feel when eating hot pot here?; How to make Haidilao dipping sauce;… Haidilao will automatically become "Viral" without investing much money in product advertising. Create a trend, not a trend: Haidilao smartly encourages its employees to be creative by rewarding employees with creative suggestions for the restaurant.

<b>II.MACRO ENVIRONMENT 1. POLITICAL</b>

<b>● Government stability</b>

- No imminent threats from terrorists and military issues in existing markets. - Political stability in existing markets: China, HongKong, Malaysia,

Singapore, VietNam, … → support business’s growth expansion.

- China has good records of consistently adhering to international treaties, specifically WTO’s regulations on Restaurant Industry.

<b>● Tax policies</b>

- Taxation policies – Over the last two decades Haidilao Intl has benefitted from lower taxation policies throughout the western hemisphere. It has resulted in high profits and increasing spending in the research and

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development. The increasing inequality in Hong Kong can lead to changes in the taxation policies. Secondly local governments are also looking into Restaurants specific taxation policies to contain the carbon footprint of the Services sector.

<b>● Trade blocs</b>

- China maintains 17 Free Trade Agreements (FTAs) and is implementing additional 8 FTAs→ Business can lower resource costs, increase supply of talented labor, and benefit from gaining advanced technology and knowledge from foreign experts.

<b>2. ECONOMIC</b>

<b>● GDP and rate of economic growth</b>

- GDP growth rate signals growth in demand -> Business leverages this trend by expanding its product range and targeting new customers (by identifying changes in consumption patterns -> emerging value proposition).

<b>● Inflation Rate</b>

- High inflation can cause an increase in prices (→ lose brand loyalty and constant endeavors to manage costs.) and decrease in disposable income (→ lower purchasing power).

<b>● Employment rate</b>

- If the employment rate is high then it will impact Haidilao's strategies in two ways – it will provide enough customers for Haidilao's products, and secondly it will make it expensive for Haidilao to hire talented and skillful employees.

<b> => Vietnam is a signatory to the most free trade agreements in the world, reducing</b>

and eliminating tariff barriers, as well as non-tariff barriers, towards the establishment of a free trade area. This is a good sign because it has ensured equal access to resources between state-owned and private enterprises, between domestic and foreign-invested enterprises, removing market barriers. The corporate catering business group has many brands such as Haidilao, Jollibee, Pizza Hut, …so there is also a chance to increase competitiveness thanks to easier access to resources. The economy has grown positively since 2013 – especially the structural transformation of the service sector, which has developed impressively. People in Haidilao's target market have an increased economic life, so they are more interested in enjoying services, especially food services. Besides, the integrated

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economy makes people have the need to exchange jobs, meet partners, office meetings,., which increases the demand for food services at restaurants like Haidilao and increases profit from the market.

<b>3. SOCIAL & CULTUREa) Social</b>

<b>● Demographic</b>

- Gender roles, power structure in society, portion of youngsters, birth rates… - A higher portion of the younger population is beneficial for Haidilao as it

will allow the company a larger consumer population base

<b>● Attitude towards Health & Safety</b>

- The attitude towards health and safety is often reflected in the quality of the products and cost structures of manufacturing processes. Haidilao has stringent norms for health and safety norms so in emerging economies

<b>● Level of Social Concerns & Awareness in Society</b>

- Higher levels of social concerns in society often result in higher consumer activism and pressure from non-governmental organizations, & pressure groups.

<b>b) Culture</b>

Hot pot is a familiar dish for Asians in general. Hotpot brings the spirit of reunion, a gathering and warm atmosphere. Eating hot pot has become a habit of our Vietnamese people, so when having family reunions, hotpot is one of the top choices.

With the typical Chinese hotpot flavor, especially Sichuan spicy hotpot, Haidilao has brought a new experience, different from the traditional hot pot in Vietnam. Thus, when enjoying hot pot at Haidilao, customers will receive the values and quintessence of the new culinary culture.

<b>4. TECHNOLOGY</b>

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<b> With the widespread explosion of the influence that technology has on all aspects</b>

of life, the Internet and electronic devices have become an indispensable part, covered by all ages. With the vital importance of the Internet in modern life, restaurants need to know how to use all the benefits that the Internet brings to serve their business strategies.

In addition, the dominance of social networking sites in giving and spreading information is something that everyone can see. Most of the age groups use social networks as a habit in daily life. This also poses a problem for the restaurant's marketing strategy in the selection of promotion channels appropriate to the target market. However, the development of technology not only brings opportunities, but also when technology develops, people are different in terms of distance, but still easily reach each other, the need for face-to-face meetings at restaurants is decreased, significantly affecting the target customer behavior and the revenue of Haidilao restaurant.

<b>III. SWOT</b>

<b>1. STRENGTHS</b>

A special feature when enjoying Haidilao's dishes is that besides satisfying the sense of smell and taste, the eyesight is also completely expanded with the unique noodle dance performances, which can also be considered as the highlight, making diners unable to rest their eyes.

Haidilao has a human resources organization with an employee turnover rate of 10%, while the turnover rate at management level here is 0%. To make the whole system ready for operation, right from the staff training stage, let them be ready to

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