Marketing plan for mountain coffee of net viet company till 2015

TRƯỜNG ĐẠI HỌC MỞ TP.HCM
HO CHI MINH CITY OPEN UNIVERSITY

UNIVERSITÉ LIBRE DE BRUXELLS
SOLVAY BRUSELLLS SCHOOL

MBMM5

PHẠM VĂN THUẬN

MARKERTING PLAN FOR MOUNTAIN COFFEE
OF NET VIET COMPANY TILL 2015

MASTER PROJECT
MASTER IN BUSINESS & MARKERTING MANAGEMENT

TUTOR’ NAME: Dr NGUYEN MINH HA

Ho Chi Minh City
(2012)


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

COMMITMENT
I hereby commit that the paper was written by myself with information retrieved and obtained
sources and was prepared under the guidance of Dr. Nguyen Minh Ha. Where ideas were
reproduction of other publication, the sources were clearly indicated, thus assuring no
plagiarism committed.

HCMC, 21 February, 2012
Pham Van Thuan
Master of Business and Marketing Management

Pham Van Thuan

ii

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

ACKNOWLEDGEMENT
Firstly, I would like to send great thanks to all Professors from Solvay Bruxells business
school who transfer and share valuable business and marketing knowledge and experiences
to Vietnamese students like us.
Secondly, I would like to send many thanks to my tutor – The professor Nguyen Minh Ha - a
Head of graduation department of Ho Chi Minh City Open University - who has helped me a
lot in giving orientation, advices and comments on how to build up a marketing plan.

I also would like to extend genuine thanks to Mr Serge Bywalski and Ms Nguyen Thi Mong
Thuy, Le Thi Ngoc Hien, our helpful academic program coordinator.

I would like to express my sincere thanks to Net Viet Co.,Ltd, all my colleagues here for
supporting, guidance and encouragement during my project.

Finally, I would like to thank my parents, who help me through two years. They have given
me the strength and courage to follow up the course and pursue my dreams.

This project done in a very short time and even more limited knowledge, so not avoid many
shortcomings. Project themselves as very happy to be teaching more from friends, colleagues
and especially teachers to further enhance their knowledge, as well as complete this project.
I sincerely thank you deeply from my heart.

Pham Van Thuan

iii

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

TUTOR’S COMMENTS

Project title: MARKETING PLAN FOR MOUNTAIN COFFEE OF NET VIET COMPANY
TILL 2015
Student name: PHAM VAN THUAN
Attitude: …………………………………………………….
Content: ………………………………………….
Method and technique: …………………………………………..
Project results: ……………………………………………..
Overall comments: …………………………………………...
Evaluation: ……………..

Tutor’ signature

Dr. NGUYEN MINH HA

Pham Van Thuan

iv

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

EXECUTIVE SUMMARY
Viet Nam is a country of coffee export ranked second in the world, only after Brazil.
Coffee commodity exports have a high export turnover, just behind crude oil, and Viet Nam
mainly exported raw coffee materials. Vietnam's population is currently around 90 million
people, most Vietnamese people have a habit of drinking coffee in the morning, and as such is
a valuable beverage indispensable daily. Therefore, this is also a very big potential market to
exploit and develop in the near future.
Roasted and ground coffee market in Viet Nam are very enormous and developed very
strong and fast. There are also a lot of fierce competitions and intense. There are many
reasons for the domestic coffee market developed strongly in the near future, such as:


Firstly: The current coffee consumption per capita in Viet Nam at 0.83kg/person/year

is very low, lower than the Brazil of 5.2 kg / person / year, the EU is 4.83 kg / person / year

and the United States is 4.13 kg / person / year (International Coffee Organization, 2010).


Secondly: The population of Viet Nam is very large, more than 90 million people, and

2/3 are young people under 30 years of old age (under General Office for Population - Family
Planning Sources 2009), coffee consumption average annual growth of over 10,5%/year
(International coffee organization ICO 2010).


Thirdly: Viet Nam's coffee market is still very primitive, there are still many

opportunities for domestic companies as well as foreign investors to join and develop. At
present, Vietnam's market is mainly consumed roasted and coffee grinders, while soluble
coffee arrays also many opportunities for development, currently has 26 major coffee buyers
around the world have offices in Viet Nam (Agroviet, 2011).
Net Viet Company is one of the producing, trading and processing coffee company with
small - scale coffee, is very new participants in the coffee market mostly 2 years operating.
The main business areas of the company is manufacturing, trading and processing of coffee
under the brand name is "Mountain Coffee", mainly for the domestic market, the market in

Pham Van Thuan

v

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

Ho Chi Minh City is the main markets of company. Currently, the staff at the company is still
very weak and lack the skills for the sales and market development, as well as quality coffee
production did not really stable.
As a new small company engaged in market production, trading and processing of
coffee, so the company faced with many difficulties and challenges to survive and grow.
Therefore, company has to analyze and try to find out the strengths, weaknesses, opportunities
and challenges of the market to build the plan, the strategic entry into the market in the early
years, as well as expanding development plans in the next 4 years. This plan was implemented
throughout the marketing mix, including product, price, place of sale and promotion (4P).
Moreover, the company set a specific marketing plan within 4 years in order to
development market in Ho Chi Minh City. Planning has set out to create the sustainable
development of the company in the next coming years.

Pham Van Thuan

vi

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

TABLE OF CONTENTS
Contents ........................................................................................................................ Pages
Commitment ........................................................................................................................ ii
Acknowledgement .............................................................................................................. iii

Tutor’s Comments .............................................................................................................. iv
Executive Summary ............................................................................................................ v
Table of Contents .............................................................................................................. vii
List of Tables ...................................................................................................................... ix
List of Figures ..................................................................................................................... x
CHAPTER I – INTRODUCTION ................................................................................... 1
1.1 Company Description .................................................................................................... 1
1.2 Problem Statement ........................................................................................................ 2
1.3 Objectives ...................................................................................................................... 3
1.4 Scope of Study .............................................................................................................. 3
1.5 Methodology ................................................................................................................. 3
1.6 The Project Structure ..................................................................................................... 4
CHAPTER II – ENVIRONMENTAL ANALYSIS........................................................ 6
2.1 External Environment Analysis .................................................................................... 6
2.2 Internal Analysis ......................................................................................................... 18
2.3.1 Strengths ............................................................................................................. 23
2.3.2 Weakness ............................................................................................................ 23
2.3.3 Opportunities ...................................................................................................... 24
2.3.4 Threats ................................................................................................................ 24
CHAPTER III – MARKETING STRATEGY FROM 2011-2015.............................. 26
3.1 Marketing Objectives .................................................................................................. 26
3.2 Marketing Strategy ...................................................................................................... 27
3.3 Marketing Mix............................................................................................................. 35
CHAPTER IV – MARKETING PLAN for MOUNTAIN COFFEE TILL 2105 ...... 42
4.1 Sales Forecast .............................................................................................................. 42
4.2 Marketing Action Plan from 2012 – 2015 .................................................................. 46
4.2 Marketing Specific Action Plan in 2012 ..................................................................... 49
4.4 Monitoring and Assessment ........................................................................................ 52
CHAPTER V – CONCLUSION AND RECOMMENDATION ................................. 53

Pham Van Thuan

vii

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

5.1 Conclusion ................................................................................................................... 53
5.2 Recommendation ......................................................................................................... 53
REFERENCES ................................................................................................................ 55
APPENDIX ...................................................................................................................... 56

Pham Van Thuan

viii

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

LISTS OF TABLES
Table 2.1: Population – Viet Nam from 2003-2010............................................................ 7
Table 2.2: Viet Nam GDP from 2003-2010 ...................................................................... 11

Table 3.1: Theory of Market Segmentation ...................................................................... 28
Table 3.2: Theory of Market Segmentation ...................................................................... 30
Table 3.3: The List of Current High Potential Target Customers in HCM City ............... 33
Table 3.4: Traditional Mountain Coffee No1 + No2 + No3 ............................................. 36
Table 3.5: Culi Mountain Coffee & Experience Coffee .................................................. 37
Table 3.6: Espresso Brown Mountain Coffee & Espresso Gold Mountain Coffee .......... 37
Table 4.1: Details of Marketing Plan from 2012-2015 ..................................................... 47

Pham Van Thuan

ix

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

LIST OF FIGURES

Figure 2.1: Coffee Consumption of the Top 10 Countries in the World ............................ 8
Figure 2.2: Porter’s Five Forces Model ............................................................................ 13
Figure 2.3: Number of Coffee Consumption in Viet Nam ................................................ 14
Figure 2.4: Number of Coffee Suppliers in Viet Nam 2010 ............................................. 16
Figure 3.1: Type of Distribution Channel ......................................................................... 41
Figure 4.1: Sales Forecast of Company in 2012 ............................................................... 43
Figure 4.2: Sales Forecast from 2012-2015 ...................................................................... 44
Figure 4.3: Sales Forecast and Expensive from 2012-2015 .............................................. 45
Figure 4.4: Details of Marketing Plan in 2012 .................................................................. 50

Pham Van Thuan

x

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

CHAPTER I
INTRODUCTION
1.1 Company Description
Net Viet Company was founded in 2010, the office at 14 Nguyen Thi Dieu Street,
District 3, HCMC, and the factory at 143 Vo Van Hat, District 9, HCM City. The company
specializes in manufacturing, trading and processing of coffee with Mountain Coffee brand,
with separate product lines as a Traditional Mountain coffee No1, Traditional Mountain
coffee No2, Traditional Mountain coffee No3, Culi Mountain coffee, Experience Mountain
coffee, Brown Espresso Mountain coffee, Gold Espresso coffee. Slogan of Net Viet Company
is "Essence from the high Mountain”. Target customers of the Net Viet Company are business
(B2B) as Saigon Coop supermarket systems, Maxi mark supermarket systems, Big C
supermarket systems, the office coffee shops, the convenience stores, specialty stores, and
Mobile Cart Coffee systems.
Net Viet Company is a company specialized in manufacturing, trading and processing
of coffee, still very young company, compared to other coffee companies in the market. The
initial development is not really clear, not a business plan to develop specific, not sufficiently
developed a strategy in the long term, the company has not much experienced in the coffee
market, power of workers is limited, production quality is not stable, etc… Company was

established in the economic crisis period, economic crisis occurred, as well as the limitations
of strategic planning and development. Currently, Net Viet Company has also faces with
many difficulties in the competition and market development in Viet Nam coffee market.
For the purpose of increasing market share, pass the difficult period of economic crisis
and aims to develop in the future, the Net Viet Company have decided to restructure the
company till to 2015, assumption coffee sales will increase 54% compared to 2012, brand
image of Mountain Coffee will be available at most large supermarkets systems, specialty
stores, convenience stores, big and luxury coffee shops, etc... Mobile Coffee Cart systems will
reach to 50 points in Ho Chi Minh City market at the end of 2015.

Pham Van Thuan

1

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

To achieve these above objectives, the company has focused on all human resources,
power, energy and time as well as the necessary funds to prepare a business plan very
carefully. Wishing to contribute a few comments and ideas to contribute to the business plan
for the Net Viet Company much more better, I have chosen the study "Marketing Plan for
Mountain Coffee of Net Viet Company Till 2015" as the final project.

1.2 Problem Statement
Manufacturing, trading and processing of coffee growth and development are very
strong in recently. Coffee market is growing stronger and more attractive to many companies

as well as domestic companies and foreign corporations to participate in the market, because
the incentives of government investment in agricultural industry areas as well as Viet Nam is
considered one of the speed of rapid economic development and stability in the region and in
the world and is one of the most attractive market in the world. The number of manufacturing
companies, trading and coffee processing in Viet Nam market has grown rapidly in recent
time, from only 500 enterprises in manufacturing, trading and processing of coffee in 2007,
has increased nearly 1,000 businesses in 2010 (Vicofa, 2010), that is up nearly 100% within 3
years, this is really very impressive numbers. Besides, there are 26 coffee buyers in the world
also has representative offices in Viet Nam (Vicofa, 2011).
However, due to a newly established company engaged in the market during the economic
crisis, with so many difficulties and challenges such as high inflation, volatile markets, high
unemployment, the monetary policy has been limited, etc…Thus, Net Viet Company is facing
with a lot of pressure and challenges. To be able to survive in this very difficult period and
prepare for growth in the future, Net Viet has to focus investment on improving product
quality, reasonable prices and services must be improved, particularly focusing on human
development resources. Focus on product development and market expansion in Ho Chi Minh
City as one of the first steps to develop the Net Viet Company. In order to do this, an effective
marketing plan for the Mountain Coffee is very important to help the company operate more

Pham Van Thuan

2

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

efficiently, get more market share, creating a better image as well as a coffee brand in Viet
Nam market.
Therefore, the following questions must be asked:
1. What are the strengths, the weaknesses, what opportunities and risks of Mountain
coffee need to be found, as well as limited weaknesses and exploited maximize the
opportunities and strengths?
2. What are marketing strategies, marketing plans that company need to build in next 4
years, from 2012-2015?

1.3 Objectives
The objective of this study is to develop a marketing plan to provide a road map and
specific guidelines for Net Viet Company to achieve its business development goals in Ho
Chi Minh City in the next 4 years from 2012-2015.

1.4 Scopes of works
This project is mainly for the operation of Net Viet Company in Ho Chi Minh City from
2012 – 2015. The company will focus on offering convenient, high quality, reasonable price
and good services. This project will focus on roasted and grinder coffee. This project is not
focus on production and logistic site of the company and instant coffee as well.

1.5 Methodology
The study is based on both types of data namely primary and secondary data.
Primary data: In-depth interviews with the Marketing Manager – Nguyen Van Dung
and the Director – Nguyen Bao An, some functional managers of Net Viet Company as well
as 100 customers to obtain information on the firm’s current situation and their assessment
about the current industry’s environment.

Pham Van Thuan

3

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

Secondary data: Data was collected from macro and industry analysis reports, database
of historical data resource of the coffee market, the company’s reports, research of company,
internet, government offices, newspapers, etc…
Data analysis:
Once the data has been collected, the researcher has used an inductive pattern to analyze
the data collected by means of primary survey and secondary sources.
The data analysis basically consisted of the following components:


The first components relates to the macro-economic environment in Viet Nam,
especially in Ho Chi Minh City. It is very necessary for the suitable understanding of
the growth and development of Viet Nam economies and coffee market.



The second component covers an in-depth internal and customers analysis of Net Viet
Company, and then writing out SWOT for the company itself.



The third component reveals the qualitative analysis that presents in detail the
marketing plan from 2012 to 2015 for Net Viet Company as well as the

comprehensiveness action plan. The final monitoring and assessment of the marketing
plan is also mentioned.

1.6 The Project Structure
The structure of the study is as follows:
The first chapter presents the overall introduction of the study including company
description, problem statement, objectives, scope of study, methodology and structure of the
study.
The second chapter analyzes in depth of current macro-economic situation and coffee
market in Ho Chi Minh City that helps identify opportunities and threats for the development
of coffee company in general, and then point out Net Viet strengths and weaknesses in

Pham Van Thuan

4

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

particularly. The marketing plan from 2012 to 2015 for Mountain Coffee of Net Viet
Company in Chapter three will be explained.
The fourth chapter shows the detailed action plan for Net Viet Company, including sales
forecast, marketing plan, marketing expensive and marketing monitoring/assessment.
The final chapter will make final conclusion and recommendation for the topic.

Pham Van Thuan

5

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

CHAPTER II
ENVIRONMENT ANALYSIS
There are many factors affected to the operation, development and success of an
Enterprise, such as the impact from external factors environment as social factors, political
factors, the elements of the regulations and business rules, the elements of the national
economy of the enterprise and elements of the science and technology, these factors are
important and have great impact to the operation, development and success of the Enterprise.
Meanwhile, the factors affecting the inside of a business is very important and greatly
influenced the success of enterprises such as the human resources, Enterprises’ culture,
elements of labor forces skill, etc…
Analysis of factors affecting the operation, development and success of the company
in order to help company clearly see the weaknesses, strengths, risks and opportunities for
future development. In addition, enterprises need to analyze the impact factors from the
external environment as well as the internal factors in order to build the policies, plans,
strategies needed to ensure safety operation and success of the business upon the occurrence
of adverse effects to the operation of businesses as well as ensure the implementation of
policies, plans and strategies that the company have built. The impact factors from the
external environment and the internal factors environment will be analyzed as below.

2.1 External Environment Analysis

2.1.1 Macro Level: SLEP Model Analysis
There are many factors in the macro-environment that will be a great leverage but also a
threat to agriculture industry in general and coffee market in particular. These factors include
Social, Legal, Economic, Political and Technological factors (SLEPT).

Pham Van Thuan

6

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

Social Factors:
With the population of over 86 million (see in table 2.1), 2/3 of which are below 30
years old, Viet Nam has enormous young human resources. The country records in continued
improvement in key human development indicators such as high literacy rates of above 90%
education, health improvement, life expectancy, and impressive poverty reduction. The
workforce is highly motivated, adaptable and has strong work ethic.
Table 2.1: Population – Viet Nam from 2003 – 2010

Population
(million)

2003
79,4

2004
80,4

2005
81,5

2006
82,6

2007
83,7

2008
84,8

2009
85,9

2010
87

Source: BMI, HCM city Statistical Yearbook, 2008
Compared with other countries in the region, Viet Nam still have low labor cost. This
can be proved by the extremely low Gross Net Income per capital of Viet Nam in 2010 with
only US$ 1,100 compared to US$ 38,000 of Singapore or US$ 3,850 of Thailand. Moreover,
it is worth mentioning that there are an increasing number of students choosing agriculture
and economics as their majors rather than technology and manufacturing at the Universities.
The current coffee consumption per capita in Viet Nam at 0.83kg/person/year is very
low, lower than the Brazil of 5.2 kg/person/year, the EU is 4.83 kg/person/year and the United
States is 4.13 kg/person/year (International Coffee Organization, 2006).

Pham Van Thuan

7

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

Figure 2.1: Coffee consumption of the top 10 countries in the world
12
10
8
6
4
2
0
Norway

Finland

Denmark

Sweden

Holand

Swiss

Germany

Austria

Belgium

France

Sources: USDA, 2008
According to USDA statistics (2008), the amount of coffee consumption per capita of
Viet Nam is lower than the national top 10 largest coffee consumer in the world (see in figure
2.1), as follows: Norway is over 10kg/person/year, Finland is 9.8 kg/person/year, Denmark is
9.6 kg/person/year, Sweden is 7.8 kg/person/year, Holand is 6.8 kg/person/year, Swiss is 6.7
kg/person/year, Germany is 5.7 kg/person/year, Austria is 5.6 kg/person/year, Belgium is 5.5
kg/person/year and France is 3.8 kg/person/year. Compared with other consuming nations
such as the table above, Viet Nam has many opportunities to increase sales volume in coming
time because big population, the population is very young and dynamic. In addition, the
coffee market in Viet Nam still in its infancy, yet stable, so this is a great opportunity for
companies in domestic and foreign companies entering the coffee market in particular and
economy in general.
The market in Viet Nam is divided into three main regions, these is the North market,
the Central market and the South market. The North and Central market consumers usually
choose Tea as a drink coffee traditional and commonly used as a valuable gift to each other
when there are festivals, New Year, etc…Meanwhile in the South market, consumers view
coffee as a beverage indispensable traditional daily and this is a very big potential for all the
companies want to penetrate, development market and the South was seen as an key and

Pham Van Thuan

8

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

important area to expand the brand in Viet Nam as well as set a foundation for future
development.
Besides, the consumption market in Ho Chi Minh City is very large, with a population
of over 8 million peoples is seen as a key market, many opportunities and great potential for
development in coffee industry in general and for the development of Net Viet Company in
particular.
Generally, social factors of Viet Nam are proved to be very positive not only for
agriculture sector but also to other industries. These social factors have great impact on the
development of Net Viet Company in the future as well.
Legal Factors:
The Circular 01-06:2009/BNNPTNT by the Department for Processing Trade in
agricultural, forestry, aquaculture and salt Editor, Science Technology and Environment
approval and issued Circular 2009/TT-BNNPTNT day 01 June in 2009 the Ministry of
Agriculture and Rural Development: Hygiene and food safety (FSH) is the conditions and
measures necessary to ensure appropriate food and not damaging to the health and lives of
consumers when food is prepared and/or food purpose of its use. The manufacturing
company, trading and coffee processing must comply with the Circular and regulated as on of
the Ministry of Agriculture and Rural Development of Viet Nam and According to the
Decision: No.11/2006/QĐ-BYT March 9, 2006 of the Minister of Health of manufacturing
companies, trading and coffee processing certificate of eligibility and safety and food

hygiene.
In conclusion, this legal improvement really means for coffee companies, especially
infancy company as Net Viet, it helps create a transparent market, and above all a fair
playground for everyone.

Pham Van Thuan

9

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

Economic Factors:
Viet Nam participated in the World Trade Organization (WTO) in 2007. Join the WTO
has helped Viet Nam's economy to reach a lot of favorable conditions in which the export and
import of goods is much easy but Viet Nam still also faced with many difficulties since there.
Despite the world economic crisis from 2007 to the enormous impact to the global
economy, including Viet Nam, but Viet Nam's GDP still growth average 6.5% annually (show
in table 2.2). The economic component of Viet Nam is still sustainable and recovered very
quickly, especially manufacturing and agricultural business. Industry and domestic coffee
business with a great impact from the economic crisis but coffee consumption is still growing
2% annually. This is a very stable growth and very good signal for the production and trading
coffee in the future.
The inflation rate of Viet Nam's economy is very high 17.5 percent in 2010. The credit
policies have limited a lot of competitions in the market and lose many opportunities for the
production and sales in the coffee industry, especially for small and medium enterprises. In

addition, high interest rates from 14 to 20 percent per year has made business more
difficulties in developing expanded manufacturing business, especially small and medium
enterprises.
Moreover, the market exchange rates are more and more changes. Exchange rates
between the US Dollar and Viet Nam Dong are also high, about 8 percent in 2010, this has
contributed significantly to the difficulties of the economy, the competitiveness of the
economy has declined dramatically especially in producing, trading and coffee processing and
agriculture businesses.
Furthermore, the tightening of credit and financial policies from domestic banks has
caused many difficulties and challenges for companies that trading in the economy in general
and manufacturing industry and agricultural business in particular. However, per capita
income increased over the years, to nearly $US 1,200 (see in table 2.2), this is very important
in promoting consumption in the economy, as well as the agricultural products industry.

Pham Van Thuan

10

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

In addition, Viet Nam economy has increasingly integrated into the regional economy
even in the world economic, it helps Viet Nam economy grow faster, more dynamic, more
opportunities for strongly developing. Besides, there have many challenges and difficulties
also, especially in the manufacturing and agricultural business is still infancy, the competition
is increasingly fierce, more drastic.

Table 2.2: Viet Nam GDP from 2003 - 2010

GDP (per capita)

2003
482.2

2004
528

2005
587.6

2006
617.3

2007
667.4

2008
730

2009
805.6

2010
880

7.3

7.7

8.4

8.1

7.7

8.2

8.7

8.5

GDP (growth)

Source: BMI, HCM city Statistical Yearbook, 2005
In summary, there are many favorable factors for the development of manufacturing,
trading and coffee processing in Viet Nam in general and for the development of Net Viet
Company in particular.
Political Factors:
Viet Nam is ranked as one of the most Asian stable countries on politic. Multinational
companies consider Viet Nam as a safe and lucrative investment destination in comparison
with other countries in the region and in the world. However, Viet Nam has still facing with
big problem in inflation and corruption. With the economy and political stability have
encouraged and attracted large domestic companies engaged in the coffee market, as well as
many of the big foreign companies have the financial resources to participate in Vietnam's
coffee market. As a result, Viet Nam coffee market is likely to enjoy such abundant foreign
indirect investment and has more chances to develop in the years to come.
Technological Factors:

Currently, most of the manufacturers on the market and trading in Viet Nam do not have
really invested heavily in production technology and processing coffee. There are only some

Pham Van Thuan

11

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

of companies producing, trading and coffee processing of coffee which brand names on the
markets to invest in improving the qualifications for production workers, changing the
machinery and equipment by modern equipment and machinery, apply of scientific advances
in the production process and processing of coffee.
In overall, Viet Nam market is still very easy for roasted and grinder coffee quality,
they are just focused only on price but not really focused on other factors such as the
production process and processing of coffee, coffee quality, product packaging design, after
sales services…However, many coffee producers and processors understand that in order to
survive and develop in the fiercely competitive period today, they must changes by their self,
including investments in science and technology, application of modern processing
technology in coffee production and processing.
In conclusion, Net Viet Company is acutely aware that to survive and develop in the
future, company should apply the scientific and technical progress in production and
application of new production processes, selection of modern machinery to produce products,
in order to create good quality products, reasonable price, to enhance competitiveness of the
product on the coffee market.

Industry Level:
When analyzing the competitive industry impact factor in the coffee business, there are
many competitive factors affecting the production, trading and coffee processing. However,
the model analyzes of Porter is clear, effective and suitable for business.
The competitive structure of coffee industry can be analyzed using Porter’s five forces
model including rivalry amongst existing competitors, bargaining power of buyers, bargaining
power of suppliers, threat of substitute products and threat of new entrants (see in figure 2.2).

Pham Van Thuan

12

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

Figure 2.2: Porter’s Five Forces Model

New Entrants: High.
International & domestic
competitors with strongly finance.

Suppliers: High.
There are many
suppliers with
various
ingredients.

Industry Competitors: Very high
There are a lot of international and
domestic companies in Viet Nam
now.

Buyers: High
The consumer
will seek for
new and better
quality
products.

Substituted: High
There are more alternative
products in the future.
Rivalry amongst existing competitors: very high
Currently, there are more and more many companies in the country, as well as foreign
companies have strong brand name to join market coffee, with the following reasons:


Viet Nam is one of the largest coffee producing and export in the world (second only
to Brazil), mainly Robusta coffee production.



The value of coffee exports from Viet Nam is still very low, although quality of Viet
Nam's coffee are of high quality in the world. The export turnover accounted for 2%
of annual GDP.



Production of domestic coffee consumption increasing every year, over 10% / year.



Domestic market are growth strongly and stability.



Viet Nam has large population, young and dynamic, low labor costs, educational level
is high, the coffee market is still very new and infancy, this is very great opportunity
for local companies as well as foreign companies have strong financial resources and
abundant.

Pham Van Thuan

13

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

Figure 2.3: Number of coffee company in Viet Nam

Sources: Net Viet statistic book, 2010
Currently, there are many companies involved in manufacturing, trading and processing

of coffee in Viet Nam market. Statistics from the table above shows that more and more
domestic companies and foreign companies engaged in the coffee market. In 2000 only 100
coffee companies, in 2010 there were 800 companies involved in manufacturing, trading and
processing of coffee, increased 400% within 10 years (detailed in figure 2.3). This indicates
that the coffee market in Viet Nam is increasingly fierce competition and intense. So, the new
small company involve in the coffee market as Net Viet Company must make much effort to
build brand name and high quality products, reasonable prices, perfect services to compete
with the company have strong brand name and position in coffee market today.
In summary, the competitive of domestic and foreign companies in the coffee market
increasingly fierce and aggressive. Especially, the foreign companies have strong financial,
scientific and high technology, modern machinery. Small companies such as Net Viet
Company face with many difficulties to survive and develop required a lot of effort, focused
on human resources, business plans must be clear and carefully. Thus, rivalry amongst
existing competitors is very high.

Pham Van Thuan

14

MBMM5


Marketing Plan for Mountain Coffee of Net Viet Company

Final Project

Threat of Substitute Products: high
Coffee is regarded as a kind of traditional beverage products in Viet Nam and even in
the world. Consumers in Viet Nam have a degree to enjoy coffee in very differences and
unique ways, many consumers are calling as coffee’s culture in Viet Nam. It is also a kind of

beverage products needed for daily.
However, there are more and more choices for consumers of beverage products. In
today's market, there are many substitutes for coffee as tea, juices, soft drinks, etc...This is a
challenge for manufacturers, trading and coffee processing nowadays. In conclusion,
consumers are very easy to look for an replacement products for coffee if they feel the
product is not quality, prices are unreasonable, promotions are not attractive, etc…So, the
threat of substitute is high.
Bargaining Power of Buyers: high
Because of the market have many companies involved in the production, trading and
processing of coffee on the market today. So consumers now have more choices to find a best
manufacturer, best quality, reasonable price as well as the most perfect services. With more
than 800 companies producing, trading and processing of coffee on the market today,
consumers will have more choices, they should require more quality products, and more
reasonable price, services have better, promotions program more attractive, etc…Small and
medium companies will face with many difficulties in competing with large companies in
finding and serving customers.
The standards of life in Viet Nam is increasingly advanced, increasingly diversify
needs, the demand for enjoying products increasingly and changes very fast. So, the market
segment is increasingly clear, consumers will find out to ensure the company with full of
those above requirements. To conclude, the powered of buyers is considered high.

Pham Van Thuan

15

MBMM5