MARKET RESEARCH REPORT HIGHLANDS COFFEE

HIGHLANDS COFFEE
MARKET RESEARCH REPORT

EXCUTIVE SUMMARY
Highlands coffee is a brand of Viet Thai international Joint Stock Company (VTI) and was established by David
Thai with the objective is the leading high-grade retail industry in Vietnam. Highlands coffee not only gives the
customers the feeling of traditional value in Vietnam but also make them experience the part of modern
active lifestyle. Especially, the shop located at number 7, DinhTien Hoang Street, HoanKiem, Ha Noi is one the
famous shop of Highlands coffee attracting many customers from Vietnamese to foreigner. According to that
shop, our report draws attention to the external factors including the situation, market description and buyer
behavior and finds out how these factors affect Highlands Coffee’s strategy; particularly positioning strategy,
service blueprint, physical evidences, pricing strategy, promotion strategy and internal marketing.
This report is conducted to help Highlands solving some problems that are occurring in their business. Firstly,
based on the determinant attributes, Highlands can improve its marketing to meet the consumer’s needs and
compete with the competitors. Next, some effective PR strategies will be suggested to build trust and


credibility through the analysis of
favorable publicity state. Finally, it will help Higlands to understand buyer behavior then they
may propose a more powerful 360 degree marketing and distribution to capture awareness andstimulate
sales.

RESEARCH OBJECTIVES
Based on the survey with 500 people, this report is conducted to help Highlands solving some problems that
are occurring in their business.
The following objectives will be meet through the research:
-

To determine major factors influence consumers’purchasing Highlands Coffee products.
To observe consumers attitudesand usages when shopping for Highlands Coffee products.
To determine the Highlandposition in consumers mindset.

To identify whether favourablepublicity play a significant rolein decision-making of Highlands Coffee
consumers.
To uncover the difficulties that Highlands Coffee has.

RESEARCH METHODS
•

RESEARCH PROCESS:
CREATE SURVEY -> DEPLOY SURVEY -> COLLECT AND ANALYZE RESPONESE

1. CREATE SURVEY:

By using “google docs”- an online survey software and questionaire tool.


Market research on customer demand on coffee brandHighlands Coffee
We are doing a research on customer demand on Highlands Coffee.
Thank you for taking your time to do our survey!
1. Personal Information
Thông tin kháchhàng
1.1 What is your age? (Bạnbaonhiêutuổi?)

Under 18 ( Dưới 18)
From 18 to 25 (Từ 18 đến 25)
From 26 to 35 (Từ 26 đến 35)
From 36 to 45 (Từ 36 đến 45)
Above 45 (Trên 45)
1.2 What is your current monthly income? (Thu nhậpbìnhquânhàngthángcủabạn?)
0 (I am a student) (Tôilàhọcsinh/sinhviên)
Under 3 million (Dưới 3 triệuđồng/tháng)

From 3 to 5 million (Từ 3 đến 5 triệuđồng/tháng)
Above 5 million (Trên 5 triệuđồng/tháng)

1.3 Do you usually go out to have a coffee? (Bạncóthườngđiuốngcàphê ở ngoàikhông? )
Yes (Cóthườngxuyên)
Sometimes (Thỉnhthoảng)
No (Khôngbaogiờ)

2. About Highlands coffee
Đốivớisảnphẩmvàdịchvụcủa Highlands coffee.
2.1 Have you ever tried Highlands coffee before? (Bạnđãdùngthửsảnphẩmcủa Highlands
coffee baogiờchưa?) *
Yes, I have (Tôiđãtừngthử)
No, I haven't (Tôichưabaogiờdùngthử)

2.2 Is Highlands Coffee your favourite brand of coffee in Viet Nam? (Highlands coffee
cóphảilàhãngcàphêưathíchcủabạn?) *


Yes
No ( move to question 2.4)
2.3 Why do you choose to drink Highlands coffee? (Tạisaobạnchọnuống ởHighlands coffee?)
Because of its taste (Bởivìhươngvịcủanó)
Because of its reasonable price (Bởivìgiáthànhhợplý)
Because of its great service (Bởivìdịchvụtốt)
Because it has great view ( Khônggianđẹp)
Other:
2.4 How often do you drink coffee in a week? (Bạnuốngcàphêbaonhiêulầntrongmộttuần?) *
Once a week
2 - 3 times a week

3 - 5 times a week
More than 5 times a week
No more than once a week
2.5 How much do you usually spend on coffee per week? (Bạnthường chi
baonhiêutiềnchocàphêtrongmộttuần?) *
30.000VND - 45.000VND per week
45.000VND - 60.000VND per week
More than 60.000VND per week
2.6 How do you know about Highlands coffee ? (Bằngcáchnàobạnbiếtđến Highlands coffee ?)
*
Via friends ( qua bạnbè)
Via social network (Facebook, Website, ... )( qua mạngxãhội)
Via advertisments (qua quảngcáo)
Other:
2.7 How often do you buy Highlands coffee in a week? (Bạnmuacàphê Highlands
baonhiêulầntrongmộttuần?)
Once a week
2 - 3 times a week
3 - 5 times a week


More than 5 times a week
2.8 What do you think about the advertising of Highlands Coffee?
(Bạnnghĩnhưthếnàovềcáchquảngcáocủa Highlands coffee ?) *
It's very attractive (Rấtthuhút, bắtmắt)
It's normal (Bìnhthường)
It's not attractive at all (Khônggâyấntượng)
Other:
2.9 Would you indicate the satisfaction for Highlands coffee?
(Bạnhãychỉramứcđộhàilòngđốivớicáctiêuchísaucủasảnphẩm Highlands coffee) *

Very Dissatisfied
(Rấtkhônghàilòn
g

Dissatisfied
Normal
(Khônghàilòng) (Bìnhthường)

Satisfied
(Hàilòng)

Very
Satisfied
(Rấthàilòng)

The package (Baobì)
The nutrition
(Giátrịdinhdưỡng)
The taste (Hươngvị)
The variety of
products
(Sựđadạngsảnphẩm
)
The price (Giá )
The service
(Cáchthứcphụcvụ)
Promotions
(Khuyếnmãi,
giảmgiá)

2.10 If Highlands Coffee launch a new product, would you think about try it? (Nếu Highlands
Coffee ramắtdòngsảnphẩmmới, bạncósẵnsàngdùngthửkhông?) *
Yes, I will try absolutely (Tấtnhiêntôisẽdùngthử)
May be, I will have a try (Cóthểtôisẽthứ)
No, I don't think about it (Tôikhôngnghĩđếnchuyệnđó)
2.11 Will you recommend Highlands coffee to your friends, families,...? (Bạnsẽgiớithiệu
Highlands Coffee chobạnbè, ngườiquenchứ ?) *
Yes
Maybe
No
2.12 If you can, what would you like to change about Highlands Coffee? (Nếuđược,


bạnmuốnthayđổiđiềugìnhất ở Highlands Coffee?)
Your answer:

2. DEPLOY SURVEY:

Every members of the group shared the link of this survey on Facebook and asked all friends to do the
survey for help.
3. COLLECT AND ANALYZE DATA:
-

Clean up data

-

Summarize data

-

Break up data into categories

-

Visualize the result

-

Act on result


SAMPLE STATISTICS

BACKGROUND OF HIGHLANDS COFFEE


Highlands Coffee is a Vietnamese coffee shop chain and producer and distributor of coffee products,
established in Hanoi by Vietnamese American David Thai - Viet Thai International Joint Stock Company (VTI) in
1998. The founding of the Highlands Coffee company marked the first time an Overseas Vietnamese was able
to register a private company within Vietnam. As of 2009, the company operated 80 coffee shops in six cities
and provinces across Vietnam. In 2011, Highlands Coffee purchased the pho chain Phở 24 from LýQuíTrung for
an estimated 20 million USD. The next year, Highlands sold 50% of its shares to the Philippines multinational
chain Jollibee Worldwide for 25 million USD .
With the rapid development, VTI has owned about 60 coffee shops with a famous trademark Highlands Coffee
all over the country. Proud to be a Vietnamese brand, Highlands’s philosophy is to combine the modern world
with traditional, classical values of Vietnam.

HIGHLANDS COFFEE’S TARGET CUSTOMERS

The target customers Highlands coffee has been serving are the middle class, the office staffs and the active
young generation because drinking coffee here with the prestigious coffee brand helps them confirm their
status in the society. Moreover, Highlands coffee always focuses on creating the comfortable and exciting
atmosphere for customers to enjoy coffee every day. Therefore, this is an appropriate place the office staffs
who want the quiet and less luxurious space to discuss with their friends and enjoy coffee with pastry-the
Western style. In addition, Highlands also targeting customer group are young businesses who used to study
abroad so they are familiar with the style of European-American like drinking coffee at a chic restaurant that
impress the style of the place they used to live. Another, the customers of Highlands coffee are foreigner living
and working in Vietnam.

CURRENT SITUATION
•
a.

b.

c.

d.

a.

4Ps:
Products:
- Highlands has a wide range of products such as coffee, tea, cake, cookies,…
- Suitable for everyone.
- The quality of drinks is not really good: too much ice,…
Price:
- The price is quite high compare to others coffee shops

- Too expensive for students or young people who haven’t earn much money yet.
- The price is too high for the quality and service.
- Combos are sometimes available with cheaper price.
Place:
- Highlands coffee located on one of Hanoi’s centre old street, with a small front
space, sometimes, especially peak time like weekends, there is no vacancy to park
the motorbike and the car
- Highlands Coffee stores are located at center of city or famous shopping malls, which
are all crowded areas.
- HighlandsCoffee brings Western values to their stores through the wooden tables &
chairs, large armchairs
- With outdoor stores, HighlandsCoffee put emphasis on the big white umbrellas,
which reminds of outdoor coffee shops in Italia or France.
Promotions:
- The promotional mix is the combination of personal selling, advertising, sales
promotion and public relations that it used in its marketing plan.
- They use Facebook as a channel of online advertising. But their Fanpage works
unefectively
• SWOT:
Strengths:
- Best well known coffee brand in VietNam


b.
c.
d.
-

•

A Vietnamese coffee brand
Has big market share
Many stores around big cities center
Vietnamese people love drinking coffee.
Weeknesses:
Do not care about improving quality and flavours
Price is too high
Non - availability in small town
Receive a lots bad comments about products, services and staffs.
Opportunities:
Wide range menu
Build on their loyal customer base
Target wide customer group
Threats:
Competition with another brand of coffee such as Trung Nguyen, Starbucks, The
Coffee House,…
Competition with another brand of drink such milk tea,…
Recently scandal about the quality of products and the staff’s behavior.

LOGO:


Highlands Coffee’s logo is a quite eye-catching design with 2 main colors: red and white. White letters are put
on red background which is easy to recognize. Logo’s shape is oval and quite Western style is. At first,
Highlands Coffee chose red as their identified color to differentiate themselves with other coffee brands which
often attach with brown- the color of café. It also fits with their positioning strategy which brings not only
coffee products to customers but a friendship space as well. Later, when Highlands had acquired a certain
position in customer’s minds, Highlands added ecru curve representing wave in a cup of coffee. It helps to
identify Highlands as a specialized coffee brand deeper and deeper.
•

STORE DECORATION:

Highlands Coffee focuses lots on placement. Highlands Coffee stores are located at center of city or famous
shopping malls, which are all crowded areas. The first impression when coming to a Highlands Coffee store is a
luxury space with two main colors: red and black. The red lanterns which are strongly attached to Highlands
Coffee store network createthe warmness and orient. Besides, HighlandsCoffee brings Western values to their
stores through the wooden tables & chairs, large armchairs. With outdoor stores, HighlandsCoffee put
emphasis on the big white umbrellas, which reminds of outdoor coffee shops in Italia or France. Tables &
chairs of such stores are smaller and easy to move. However, they are still wooden and in consistent style with
the indoor stores. Especially, when coming to Highlands stores in luxury buildings such as Vincom, Parkson,


customers may notice Highlands Coffee with wooden floor separate from the surrounding area. In particular,
the indoor stores are also equipped with high tables with swivel chairs like bar, facing the street, to serve
those wishing to contemplate the streets. The Eastern-Western layout is a distinct feature of Highlands Coffee.
Visitors to the restaurant, in addition to the drinks and delicious food, also receive value from the
comfortable, luxurious and high class space. The allocation of different areas at Highlands Coffee is quite
reasonable. The preparation counter is placed at store’s center. Therefore, customers can easilyobserve the
preparation process, hygiene etc. As for Highlands’ staff, it helps them to capture customer’s needs and serve
makes the area professional. There are also nearbyshop windows full of various types of cakes and other food.
•

STAFF:

Highlands Coffee’s staff all wears uniform which includes red clothes and black aprons. Different people may
experience different serving in different Highlands Coffee stores. My group experience in Highlands Coffee at
7, DinhTien Hoang Street is general delighted. The staff was young, dynamic, polite and helpful .While waiting,
we were served a glass of cold water. We observed that the staff could communicate rather well in English
with foreigners. However, staffs receive some negative feedbacks from customers. Some complain that the

store is too crowed and serving is too slow.
•

SERVICE:

When the customers going to Highlands coffee are overcrowded, there will be no longer blank tables for them
and the mixing drink unit may overload which make the waiters of the restaurant serve slowly then the
customers wait for them and feel anxious. Moreover, Highlands is equipped the cool air so some customers
sense too cold.Highlands coffeelocated on one of Hanoi’s centre old street, with a small front space,
sometimes, especially peak time like weekends, there is no vacancy to park the motorbike and the car. In that
case, the staff has to apology the customer that they are full. Moreover, the service delivery process seems to
take place in short time period, almost time is spent on producing the services. Therefore, critical and
potential bottlenecks likely occur in this phase. For instance, at weekend, customers have to wait a long time
for their drinks and the service is poor due to the limited capacity.


•

CURRENT PRICING STRATEGIES:

It is obvious that formulation a price strategy in a service organization is a difficult decision which requires
careful consideration about many issues. And Highlands price approach is the same as the way Starbucks has
done in the US and other markets in the surrounded region. It is to provide high quality coffee in a special
atmosphere for medium income class. Highlands price standardization policy works very efficiently. This helps
Highlands set a clear position in customers’ mind. And customers seeking for a cozy and comfortable place can
be satisfied with Highlands. In Highlands, price of coffee and other beverages fluctuates from 25,000 to 50,000
VND. It is not cheap in comparison with other coffee shops.

•

ANALYSIS OF SERVICE QUALITY, SATISFACTION, PERCEIVED VALUE AND CUSTOMER RETENTION
EFFORTS:

Highlands coffee is running its business well, is one of top coffee store chains in Hanoi. There are more and
more new as well as loyal customers coming to Highlands for its appealing services cape and good service
quality. This partly indicates high customer’s satisfaction with Highlands. However, as we observed, there is no
confidential box for customer’s feedbacks at any Highlands store. On Highlands’ website, there is no separate
section for customers to complain or communicate with Highlands their problems. In conclusion, the
measures of quality, satisfaction; perceived value of Highlands is so limited.
To build customer relationship, Highlands has currently offer 2 kinds of cards: VIP card with price-offs, free
goods, gifts, rewards etc. for VIP customers and discount card for loyal customers or on special occasions. To
make customers feel more closely with Highlands and want to come back to it more frequently, employees
should be encouraged to be more tactical in handling customers’ urge for drinks. Waiters and waitresses
should improve their English as well. The services cape should be changed according to different times of the
year to create new, romantic and classical feeling to the customers. The quality of drinks must be maintained
as good as possible.


POSITIONING STRATEGY
Clearly drawing up the positioning strategy at the very first stage of developing a business project plays a
critical role in enhancing the business success. The positioning strategy focus on the two important questions:
which place the firm is currently on the customers’ mind and which place they want to hold on the market.
•

The place the firm currently holds in customers’ mind.

Interviewing customers in Highlands Coffee shop and collecting judgments from many forums, we found out
that in customer’s mind, Align offers a rendezvous, a good coffee and a beautiful view. Located at the first
floors of Asian Tower, Highlands Coffee is an ideal place for officers coming during their time break or even for
business meeting. During our interview time we also took notice that nearly half of the customers were the

youngster, which is rare comparing to other Highlands coffee shops. Phong, a young customer explained that
because this Highlands coffee shop is located on the centre of the city, it would be more convenient to him to
meet his friend here. The supplementary services such as toilet, music and food are also highly rated.
However, there are many complaints regarding to the service quality at Highlands coffee 7 DinhTien Hoang,
mostly about the long waiting time or the noise. “The serving is too slow”, “I normally have to wait about half
an hour to enjoy my coffee”, “This place has the most annoying blender machine on earth”, said the
customers. From some information from customers that the reporters collected during the shop visit and
websites, it can be seen that Highlands Coffee shop is really a special coffee shop to customers,since they
offers high quality core product to customers and has the variable supplementary services; however they
needs to professionalize the staff to build better image on customers’ mind.
•

The place the shop wants to hold.

It is obvious that formulation a price strategy in a service organization is a difficult decision which requires
careful consideration about many issues. And Highlands price approach is the same as the way Starbucks has
done in the US and other markets in the surrounded region. It is to provide high quality coffee in a special
atmosphere for medium income class. Highlands price standardization policy works very efficiently. This helps
Highlands set a clear position in customers’ mind.Highlands Coffee Shop positions itself as a high price, high
quality coffee shop. The shop owners want to emphasize that, the high price means high service quality as
well. Since customers are enjoying a more special service, so they should also pay a higher price for what they
are getting.

RECOMMENDATION
It is proven that most coffee consumers are willing to spend money for a premium coffee products with an
enticing packaging, in which upholds and maintains a unique aroma andincomparableflavours. Based on the
above findings and discussion, there is a clear gap between what majority of consumers demand and what
value Highlands products intents to bring. We proposed a plan of realistic and applicable strategies for
Highlands based oncustomer determinant attributes and purchase behaviours to match the market needs,

enhance brand values and clearly position Highlands Coffee in R&G intense competition. Particularly,celebrity
endorsement, social interaction activities, highly functional new packaging, andtrade marketing all
compliment and compromise each other, thus generating a powerfulintegration marketing mix to attain the
ultimate objectives of Highlands.
•

PR STRATEGY TO REBUILD TRUST:

Many businesses have been struggling the loss of credibility in customers‟ perspectives andacted quickly yet
appropriately to overcome the damage. However,HighlandsCoffee haven’t taken any actions seriously upon
the scandals it has been through,creating uncertainty and stereotype among the public against the brand all
these years.So what is the magic to save Highlands Coffee from being mired in the muck and rebuild itsimage
again? There isn’t one. Rebuilding a reputation for a brand takes time and efforts. Butit is possible if we have a
long-term effective promotional mix strategy to spread the positiveterms about the brand and increase
favorable publicity.Celebrity endorsement is capable to re-establish brand credibility and build up a sense of
trustin the target customers.It also helps to attract potential consumers, reinforceother marketing activities,
and increase media coverage. Undoubtedly, the strategy is high in execution cost;nevertheless, this is the right
time to utilize such a powerful tool to breathe a new life intoHighlands Coffee brand.
On the other hands, the brands should partner with well-known non-profit organizations,namely Operation
Smile, SOS Children’s Villages… and involves in different activities like charity work, raising funds, conducting
social-welfare programs (for example dedicating a percentage amount of one month’s product sales to
orphanage houses, so the children couldcelebrate a warm Lunar New Year like others).
•

DIVERSIFIED TRADE MARKETING:

To restate the previous parts, coffee consumers are likely to make purchase decision duringevaluation process
rather being aware of what they want to purchase. We can’t stress enoughthe importance of trade marketing
in this industry that comprises of many alternatives. Withlimited brand awareness, consumers will not

purchase HighlandsCoffee’s premium productsunless they realize there are obvious differences in value and
satisfaction they obtaincompared to those of other key players. Side by side with the PR campaigns we
proposed,sampling and booth activations are the keys of success. These two methods with
effectiveimplementation are the easiest way to generate awareness, product trial, and brand switching.
Firstly, sampling allows potential consumers opportunities to experience Highlands high-quality coffee, reevaluate their negative stereotype towards the brand, driving immediatesales volumes at the selling points. In
frequency manner, Highlands should conduct a two-month sampling programs during peak hours of the
trading sites to attract public attention and promote the new-package products. A team of 3 to 4 promotion
girls will lead the activities,invite customers for free tastes, and educate them the benefits of the products.
Eventually,repetition purchase and brand loyalty will be built.
Secondly, standees, hanging mobile, and mock-ups will be utilized to inform the availabilityof Highlands R&G
products, deliver the marketing messages, and eventually set the brandapart from the large pools of
competitors. Not only those tools will be displayed in everysupermarket products shelves, they will also be
visible among Highlands café chains as tabletops, posters and brochures, taking advantage of the strong
relationship between café andcoffee consumption.


•

IMPROVING PRODUCTS AND SERVICES:

Coffee is one of, if not, the most popular drinks in Vietnam and Highlands Coffee is also the most well-known
chain of coffee shops that have been expanding throughout Vietnam and abroad since 2002. It surely stood
the test of time.
But still, there are many problems:
-

Highland’s waiters’ working style is kind of slow.
When drinks are ready, guests have to come and take it back to their seat themselves.
Old drinks stay old, new drinks stay uninterested.
They have no plan on connecting with customers on any kind of social media.

Slow and, most of the time, broken wifi connection.

So, as a customer myself, here’s some solutions:
-

•

Ask for feedbacks, in any platform, this helps them see what they’ve been missing and improve their
quality.
Create a big, powerful online team since social medias are one of, if not, the best way to reach and
keep customers.
Do stay in touch with customers, give them discount code on their birthday. This sure makes them stay
and love Highland’s coffee a bit more.
Change the waiters’ working pace.
Fix the wifi connection.
Come up with a more eye-watering menu, most of us don’t even know and, if yes, want to try the banh
mi from Highland coffee. Stay creative with the new drinks.
PRICING STRATEGY:

According to our survey,we can take some results:
Most customers of Highlands Coffee arein 18-25 years old,they are all students and they haven’t had current
monthly income yet. This type of customers arealways occupied and dynamic. We can see that Highlands is so
popular and famous on the market,Highlands always focus on customer in all ages but it fail to attract the
customer’s attention who are out of 18-25 years old. Most of adults feel Highland isn’t convenient over other
factors,so they tendto choose street vendor coffee.
The character of Highlands that people like most is its taste. Menu of Highlands is so plentiful. There are some
types of coffee,from traditional to modern drink;some types of fruit tea,this drink is interesting for girls and
woman.However,we can see that the price is quite high so it isn’t suitable for students .
Highlands should give some solutions to solve these problems. Such as: reducing every drinks down to 1015%; giving special offers on holidays and on weekends because in this moment,people have many free time
to go out; presenting some gifts such as cup or bottle which has logo ofHighland,vouchers,combos.

Moreover,HighandsCoffee can add some special customer service such as loyalty card.