Chiến lược Marketing của The Coffee House

Vietnam National University

International University
Major: Business Administration

Final Report
Subject: Principle of Marketing
Research Topic: Analyzing the appropriate marketing strategies of
the chains of coffee stores- the Coffee House

Lecturer: Professor A.U.Zafar
Teaching Assistance: Mr Do
Class: Principle of Marketing
Group member:

TABLE OF CONTENT


Chapter 1: The opening
1.1 The reasons of picking up this topic
1.2 The purpose of the thesis
1.3 The significant of particularly researching this topic
1.4 The scope of the thesis topic
1.5 Methodology sections
1.6 Literature reviews

Chapter 2: Content of the topic
I.

Executive summary

1.1 The chains of coffee stores- the Coffee House's history of establishment and development
1.2 The vision, mission and core values of the chains of coffee stores- the Coffee House
1.3 The introduction to the brand values and serving products of the chains of coffee storesthe Coffee House
1.4 The summary of strategic objectives in the chains of coffee stores- the Coffee House
II.

Current marketing situation of the chains of coffee stores - the Coffee
House

2.1 Analyzing the variety of market and the market description of Coffee House
2.2 Analyzing the Coffee House's method of distributing products
2.3 Analyzing the facing competitive environment in coffee industry in term of the Coffee
House
2.4 Reviewing the selling products compared to the demand of customer
III.

Scrutinizing the SWOT component of the chains Of coffee stores- the
Coffee House

3.1 Reviewing the background of SWOT analysis
3.2 The importance of SWOT analysis in conducting the marketing strategies
3.3 The strength of the chains of coffee stores- the Coffee House
3.4 The weaknesses of the chains of coffee stores- the Coffee House
3.5 The opportunities of the chains of coffee stores- the Coffee House


3.6 The threats of the chains of coffee stores- the Coffee House
IV.

Analyzing the marketing methods appearing in the marketing

strategies of the Coffee House by examining the current strategies

4.1 The traditional marketing
4.2 The technological marketing
4.2.1 SEO (Search Engine Optimization)
4.2.2 Advertisement on social media
4.2.3 The Coffee House’s application
V.

Scrutinizing the marketing strategies of the chains of coffee storesthe Coffee House

5.1. Analyzing the positioning of the Coffee House
5.2. Analyzing the production strategies of the Coffee House
5.3 Analyzing the pricing strategies of the Coffee House
5.4 Analyzing the distribution strategies of the Coffee House
5.5 Analyzing the market research of the Coffee House
VI.
VII.
VIII.

Exploring the details of the Coffee House marketing action programs
Budget for operating the marketing strategies of the Coffee House
The controlling of marketing strategies in the Coffee House

Chap 3: The summary and recommendation


Acknowledgement
Throughout the process of learning, exploring and researching in the principle of marketing
class, our team has already completed the topic “Analyzing the appropriate marketing

strategies of the chains of coffee stores- the Coffee House.”
On behalf of all members in the group, I would like to express the honors and gratefulness to
those whose joined-hand to accomplish our thesis. Especially, mr Zafar the professor and mr
Do assistant lecturer who taught us at the basic knowledge and brought us a huge
understanding about the general of principle marketing.
Our team is also thankful for the supports of the older students of K17, K16 and our friends
in the International University.

Ho Chi Minh city, 22/05/2019

Group

Chap 1: The opening


1.1 Reasons of picking up this topic
Nowadays, coffee is one of the most essential and famous beverages which serves a mass
demand for all social classes. From wealthy households to mediocre ones, the daily
consumption of coffee has become familiar and universal. According to the Viet Nam Central
Highlands forestry science and technology institute, the amount of coffee consumed annually
is about 4 kilogram for each American and 3 kilograms for each at England. Especially in
Asia, the habit of drinking coffee as a morning tea has raised to a new level, becoming one of
the unique cultural features in the attentions of international friends.
Besides, the effects of coffee on human health studied since 1897. Furthermore, in recent,
many scientific shreds of evidence about the benefits of coffee have been precisely and
accurately studied for public-showing, including Battig's research in 1987 and Macrae's
research in 1989. Most recently, research results in 2017 of Grosso showed that drinking
coffee has benefits in reducing the risk of chronic diseases such as cancer and cardiovascular
disease. However, according to studies by Messina in 2015 which said that the caffeine in
coffee could cause some value effects like central nervous system stimulation leading to an

increase in focusing ability and reducing the drowsy and tired feeling.
In Vietnam, according to international experts, the sense of protection of people's health has
increased markedly because of the habits of drinking coffee of people cautiously increasing
quickly. It contributes significantly to promoting the importance of the coffee industry to
daily life. From 2018 until now, the coffee market has been evaluated as one of the five
industries in very high growth potential and makes the enormous attractive profits, while the
cost to face risks is meager. According to the survey of university of Economics and Finance
Ho Chi Minh City, Vietnam in 2003, the average growth rate of coffee is about over 6% per
million units purchased a year, domestic and foreign businesses must enhance the level of
competition based on the terms of the quality and the designs of both on the products and also
services. For those purposes, the marketing strategies of businesses must be applied
effectively, whether it is a big or small model.
Because of those positive purposes of increasing the level of personal satisfaction and making
good profits for business, many business models of coffee chain stores established. However,
the coffee business model is not always going to succeed. Especially in Vietnam, even most
of the major coffee chains operating in Vietnam experienced an increase in sales scale last
year 2018, for example, the Highlands Coffee with 240 stores over the country, but still many
did not achieve good profits, for example, the Trung Nguyen coffee reduced in 50 selling
percentage over last 5 year. According to news, almost all causes of losses in Coffee stores
blamed on the shortage of operating capital. However, with the excitement of the current
coffee market, the competitive component is the potential cause of bankruptcy, which
explains that the contributions of applying the suitable marketing strategies are the core factor
leading to the selling successiveness.
Turn back to one of the giants in Vietnam's coffee industry. Coffee House has been at the
forefront of the best seller for many years to now. Thanks to the reasonable and effective


marketing strategies which is applied not only for profit earning but also for ambition as
serving customers, the Coffee House chains of coffee stores are possible in making Vietnam's
coffee industry become a famous brand that can compete with both local and foreign brands.

Because we are the students who are eager to learn about the success of others, our team
decides to analyze the topic of the appropriate marketing strategies of the chains of coffee
stores- the Coffee House.
1.2 The purpose of the thesis
The coffee industry in Viet Nam has been prosperous in recent years because most companies
are doing so well in integrating traditional and foreign coffee culture, and most customers are
looking for a coffee shop that can combine these two factors. However, some companies
which misapply the marketing plans still face the money-losing. Furthermore, The Coffee
House is known to be one of the successful ones. They have successfully applied “customer
insight” to their business strategies. They start with the customer and design their brand based
on the customer’s satisfaction and comments. The Coffee House affirming and branding by
generating the closed connection with customers and make their coffee shops become a
“House” where customers feel free to express and have a great time with a coffee in their
hands. This tactic has helped The Coffee House become a significant competitor in the F&B
industry even though they were opened later than many famous and successful coffee brands
in Viet Nam. In conclusion, the purpose of the thesis is to carefully analyze the rare and
unique components in the marketing plan that only be applied in the Coffee House to
contribute as a premise to construct a measure of avoiding the money-losing when
establishing the same business model.
1.3 The significant of particularly researching this topic
With this marketing plan, we will be able to answer how The Coffee House successfully
achieve its strategic objectives and gain their profit while others cannot and what makes
The Coffee House different. The marketing plan will also inform the managers and
employees about their company’s changes so that they can collaborate and put the
marketing strategies into action. This analysis will help our team learn more about
creating an appropriate marketing plan and its role in the company’s success.
1.4 The scope of the thesis topic
This report involves researching The Coffee House's marketing strategies for years back and
the current year. The key features provided in the paper are the strategic goals and objectives
of the studied enterprise, its current marketing situation, and other marketing-related details.

Furthermore, the research also answers for the reasons why the cafe chains can manage and
maintain its brand values successfully as well as reducing the risks of challenges which it is
facing. Additionally, in those pages, the research on the same industry competitors is carried
out, followed by showing the actionable marketing strategies to surpass its opponents. The
main discussion delivers a broad vision in the marketing aspects of the cafe chain to one's
knowledge and expertness. Even though the report is supposed to bring out as much


marketing information as available, some fields cannot be addressed due to the enterprise's
internal particulars.


I. Executive Summary
1.1 The chains of coffee stores- the Coffee House's history of establishment and
development
The Coffee House had its first store opened in Ho Chi Minh city 2014, then been growing
ever since. In 2015, the company reached Ha Noi, and they soon have up to 14 shops in the
capital. Within three years, The Coffee House has had more than 60 shops all over Ho Chi
Minh city, and they also came to Da Nang, Vung Tau, and Bien Hoa. Last year, 2018, was a
significant accomplishment for The Coffee House, they officially bought a coffee farm which
comes with all supplies, factory and storage house for coffee beans from Cau Dat Company.
They plan to plant what they serve at the coffee shop and to export coffee beans in the future.
Their farm has a total of 81.5 acres, which produces 270 tons by the end of 2018 and 440 tons
of Arabica coffee beans in 2019. After four years of operating in Viet Nam’s market, The
Coffee House now has more than 100 shops from North to South.
1.2 The vision, mission and core values of the chains of coffee stores- the Coffee
House
1.2.1 The vision of the coffee chains of stores- the Coffee House
Going to the coffee stores has been a typical daily activity in Vietnamese culture. It is a
communication form between people, which can be seen anywhere, from a sidewalk to an

elegant coffee store. There have been many successful brands in Viet Nam which the
customers prefer and trust rather than a new brand coming to the industry. However, the
Coffee House is known to be a late competitor compared to others, so what makes the
founder decided to create The Coffee House? Are there any differences between The Coffee
House and a foreign brand like Starbucks or a local brand like Trung Nguyen Legend?
The answer is yes. In the past few years, the strategic plans targeted as trying to establish
shops at accessible locations to acquire an enormous consuming market. The Coffee House
believes Coffee House's business model will set ideal places for customers to enjoy their
coffee every day, maybe multiple times a day. With the vision of having 700 coffee shops in
the next five years, The Coffee House commits to provide excellent service at a reasonable
price and an optimum environment for the customers. They can provide all three criteria,
while others cannot. For example, Starbuck can only offer two criteria, which are excellent
service and vast space, but the menu prices are not suitable for Vietnamese's purchasing
segmentation.
1.2.2 The core values of the coffee chains of stores- the Coffee House
The Coffee time in Viet Nam is when customers meet and socialize with others. The Coffee
House has always valued the “people” factor to maximize the service quality and bring the
customers the best experience at their shops. Besides that, coming to The Coffee House,
customers will be able to taste the high-quality drinks served by friendly staff under open and
comfortable shops. The CEO – Nguyen Hai Ninh, believes that coffee will bring everybody


closer and nourish conversations, which creates a relaxing moment for buyers. This statement
has inspired The Coffee House and become a vision for all staff in the company. Loyal
customers love these values about The Coffee House, which means the successful brand in
this competitive industry created.
1.2.3 The missions of the coffee chains of stores- the Coffee House
The Coffee House runs its business under the customers’ perspective, so they tend to serve
natural products to improve customers’ health and to save the environment. That mission
statement guides the company to operate in the best way they can.

•
•
•

•
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Customers: The Coffee House will be their “home” where they can work, talk, and
relax during the day.
Product: Customers can have the best quality services at The Coffee House at an
affordable price.
Market: Now, the company has its coffee farm to produce and export coffee beans.
They want to bring their products to the world so that everybody will know the
Vietnamese coffee bean.
Technology: All their shops are supplied with the latest coffee machine to make
customers delicious drinks.
Self-evaluation: The Coffee House has proved its stand in the coffee industry in Viet
Nam by having unique values.
Company’s development: The reason that The Coffee House can thrive is by serving
healthy products to the customers, which is their most concern at this time.
Public image: The Coffee House does not only want to create profit for their
company, but the business also cares about improving the economy.

1.3 The introduction to the brand values and serving products of the chains of
coffee stores- the Coffee House
Nowadays, The Coffee House as people general views is an effective combination of these
following factors
•

The coffee shops selling their coffee beans: As a coffee shop, self-generating its
coffee is not an easy task. The production chain can cost the company much more
than buying from a supplier. Nevertheless, The Coffee House chooses to grow its
coffee to control the process more efficient. Have the beans grown on 1650m
highland, and the company hopes that their Arabica coffee bean will reach the top
quality with edible seeds and the dedication of the farmers. From the farm to the
coffee cups serving at the shops, were studied and instructed by coffee experts and
talented barista in order to serve the best product. The company is willing to buy high
price seeds to ensure the quality of the farmers at their farm. That way, the farmers
will be happy and comfortable to work and ensure a good outcome for the company.
No matter what point in the process, The Coffee House always offer a reasonable
price for their customers.


•

•

•

The coffee shops having vast space: As customers' reminder can tell in their brand
name, The Coffee House designs their shop as a comfortable home or office. In order
to achieve that, they must appreciate the "people" factor in their business plan. They
should know their customer psychology to design a suitable space to maximize their
customers' experience every count of visiting. In the coffee shop is where the magic
happens, the farmers and the baristas will reap what they sow. All staff work for a
purpose, which is helping the customers have their best time at The Coffee House.
The coffee stores with a clear vision: The Coffee House does not stop at expanding
its brand in Viet Nam province. They hope to be successful in introducing the brand

value to the world. They value high-quality seed, with the wants of getting the world's
attention about Vietnamese coffee images. With a benefactor, their goal can smoothly
go succeeded.
The coffee stores with unique signature: The Coffee House signature is all-glass
spaces with two tones including orange - black luxury, which is an impressive design
but no less in harmony with nature. Besides, that's designs undoubtedly catch your
eye at first sight. The signature also is the alternating greenery which makes the
stores’ atmosphere more comfortable like a small garden in the heart of the bustling,
crowded city center.

1.4 The summary of strategic objectives in the chains of coffee stores- the Coffee
House
The primary marketing objective is to increase customer satisfaction by determining three
types of customers that The Coffee House has had from day 1. Based on this report, the
company will know its strengths and weakness according to its customer’s experience. They
will be able to understand what makes their customers choose them and what does not. Many
critics have pointed out that The Coffee House is a successful brand in the industry, and they
still have many projects in the future, so the reasons behind unsatisfied customers need to be
fixed before it is too late.
II. Current marketing situation of the chains of coffee stores - the Coffee House
2.1 Analyzing the variety of market and the market description of Coffee House
The coffee industry is competitive as always with both foreign and domestic businesses on
the market. Some businesses start as coffee manufacturers, some start with their coffee stores,
and some combine both ways to expand their growth. Along with the enormous coffee
consumption in Vietnam (1.38kg/individual), various products, including instant coffee,
flavorful coffee, healthy coffee, etc. have been distributed to consumers. As a result, the
market is so diverse, which leads to changes in concepts to satisfy consumers' tastes and
lifestyles.
Consumers now have more options to consider than they did ten years ago. For example,
teenagers who prefer social places with aesthetic decoration can choose trendy cafes to meet.

On the other hand, there are also plenty of coffee places designed especially for office staff,
specialists, etc. who require formal and standard environment for work. However, pleasing


consumers are more challenging as they have experienced so much on the market. It causes
the market to shift from original products to creative ones and from ordinary customers'
services to customer-driven ones.
Therefore, The Coffee House chain distinguishes itself by inventing coffee drinks with
unique recipes and upgrading their customer care services. The Coffee House's marketing
segments consist of customers who value coffee, also need a quality space to meet and
work. Therefore, their customers vary in every social class, such as students, entrepreneurs,
professionals, etc. Particularly, its customers are divided into three sections: satisfied
customers, unsatisfied customers, and will-be-satisfied customers. The coffee chain's mission
is eventually to have satisfied customers only. Hence, they make unparalleled drinks and
distinctive customer services, which other stores can hardly do.
2.3 Analyzing the facing competitive environment in coffee industry in term of the
Coffee House
The coffee industry in Vietnam started to grow in the 90s. Plenty of private entrepreneurs
explored the demand on the market and the potential of producing coffee beans, then brought
it into the distributing lines and connected it with the F&B industry. The country has perfect
weather and natural conditions to plant coffee trees, especially the Robusta ones. Therefore, it
is no doubt that Vietnam has enormous coffee productivity not only for serving the domestic
market but also for export.
By 2010s, 80% of coffee producers joined the F&B industry and had their store chains. Most
coffee products they offer are pretty much the same, but the keys to distinguish one another
are drink recipes, prices, and service concepts. As a young producer on the market, The
Coffee House stands out with its coffee specialties, reasonable prices, and home-stimulated
concept. However, it, too, has to face plenty of big competitors that are in the same pricing
segment, offer a similar menu, and build up the same service concept.
The following corporations are the top three biggest domestic competitors on the

market to The Coffee House
A. Trung Nguyên: first opened in 1998 in Ho Chi Minh city by Trung Nguyen corporation.
Trung Nguyen's coffee shop chain has expanded to many cities in Vietnam and global. Their
coffee drinks made from coffee beans produced in their factories across the country,
especially Kopi beans. The price ranges from 50.000 - 70.000 Vietnamese Dong - depend on
size, which is considered as middle-class price. The taste of their coffee is original, rich, and
flavorful, even though there are not various drinks. The concept in their coffee shops is
designed to be formal for entrepreneurs, businessmen, and businesswomen; specifically, they
also have business workshops every week to bring their customers closer to the field.
B. Phuc Long: the first store was opened in the 1980s. Although their specialty is tea
produced in their factory in Thai Nguyen, Phuc Long's coffee drinks are also popular,
particularly to young adults. Their coffee beverages contain the taste of Robusta beans, which
is strong and harsh but has a peanutty aftertaste. They set up a regular pricing system for the


menu, and divide their drink size into two: Regular and Big. The inside of their stores carries
the Western decoration that brings a warm, global vibe to customers. Their staffs are trained
to be patient, proficient, and flexible so that customers are served adequately.
C. Cong Ca Phe: first opened in 2008 in Trieu Viet Vuong - an old town in Hanoi. It is
widely known by young adults and foreigners since they build up images of the old Vietnam
during the Vietnamese war, which is unfamiliar but fascinating to customers. Their menu is
all traditional Vietnamese drinks varying from coffee to milkshakes and tea. Despite not
producing coffee beans themselves, they manage to maintain the usual Vietnamese taste that
customers can easily find it everywhere. However, what makes Cong Ca Phe different is that
they remind customers of old-time memories and their hometowns through the way their
stores are decorated, their classic furniture, their cups, and glasses, et cetera. They keep the
prices in the same pricing segments with the other two competitors but offer ordinary
services.
2.4 Reviewing the selling products compared to the demand of customer
2.4.1 Reviewing the selling products in the chains of coffee stores- the Coffee

House
The Coffee House is well-known for seasonal drinks as it all is various and special. The
menu is occasionally changed so that customers will not get bored with the drinks on the
menu and will get chances to try different unique drinks. It is also a strategy to attract and
keep loyal customers years by years. Currently, The Coffee House's new winter seasonal
menu called Share Your Love, together with its usual ones, deliver the following features to
customers
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•
•

Winter seasonal menu: Almond Oolong Milk Tea, Almond Choco Cherry, Almond
Choco Matcha, Almond Milk Coffee.
Original coffee menu: Vietnamese Black/Milk Coffee, Americano, Mocha, Latte,
Espresso, Caramel Macchiato.
The cold brew series: Traditional Cold Brew, Orange and Lemongrass Cold Brew,
Raspberry Cold Brew, Milk Cold Brew.
Teas, juices, blended drinks.

2.4.2 The features of drinks in the chains of coffee stores- the Coffee House
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•
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Medium/large servings, served in glasses and take-away bottles.
Visually stunning and eye-catchy drinks.
Monopolistic, unique formulations.

Self-produced coffee beans and natural flavors, ingredients.
Common but special drinks and suitable for every age.

III. Scrutinizing the SWOT component of the chains of coffee stores- the Coffee
House
3.1 Reviewing the background of SWOT analysis


SWOT considered the major of the possible strategic planning analysis tool which can be
performed to encourage businesses to better understand the current state of business
operations and future potential strategies to achieve their desired goals. Besides, SWOT
analysis is utilized to estimate the Strengths, Weakness, Opportunities, and Threats involved
in conducting a specific project or the other situation which requires decision making. In
practice, once a company objective has been established and conducted, various specific
multidisciplinary functions that represent a broad range of perspectives are required to carry
out the SWOT analysis; which accurately illustrated in the form of a matrix similar to the
Table 1.
Helpful to achieve the
objectives

Harmful to achieve the
objectives

Internal
(attributes of the organization)

Strengths

Weaknesses

External
(attributes of the environment)

Opportunities

Threats

Table 1. the SWOT matrix (adapted from Winer, 2006)

Strengths

The internal attributes of the organization that
are helpful to the achievement of the objective

Weaknesses

The internal attributes of the organization that
harmful to the achievement of the objective.

Opportunities

The external conditions that helpful to the
achievement of the objective.

Threats

The external conditions that harmful to the
achievement of the objective.

3.2 The importance of the SWOT analysis in marketing strategies

When using SWOT analysis, businesses can choose the starting points, which are the
unique advantages of any business or brands, then the business model can be easily
expanded and get more opportunities to interact in the broader competitive
environment.
The importance of analyzing the internal environment
•

•

Businesses can evaluate the strengths and weaknesses frequently and then
switch the marketing strategies to match the current market segmentation
requirements.
Businesses can review the advantages and strengths in current marketing
strategies and then evaluate those factors followed by the list of reacting,


•

including identifying the main strengths, secondary strengths, and neutralization
as well as figure out and re-fix the major weaknesses then secondary
weaknesses.
Businesses can analyze the strengths and weaknesses compared to competitors
to find strategic opportunities for business development.

The importance of analyzing the external environment
•
•

•

The over-controls of macroeconomic forces mainly include demographics,
society, culture, technology, political, legal systems, and laws.
The additional-controls of macroeconomic factors including consumer behavior,
competitors, competitive environment, distributors, suppliers as well as some
other segmentation which affect business profitability, for instance, the gender
and religion
It is essential to identify the opportunities and threats to expand the business
model and show the brand values.

3.3 The strengths of the coffee stores- the Coffee House
3.3.1 From human-centered to deliver happiness
The founder of the chains of coffee stores- the Coffee House who worked under the
passion with coffee many years, however since after the success of the Urban Station
Coffee, has just realized that coffee considered as the "enjoy beverage" thanks to a large
number of feedback on customers satisfaction of HCM city. "Coffee" is no longer
mentioned as pure drinks; nowadays, it becomes a pleasant place for customers to
release stress, meet friends, share experiences, hobbies, and drinks. However, those
facts have been figured out by various common brand names in the coffee industry, such
as Starbuck Coffee.
Further research, Nguyen Hai Ninh, found that the mid-range cafe segment with prices
from VND 40,000 to VND 60,000 was still limited. Foreign coffee chains with high prices
can only make customers little curious in trend but complicated to become familiar
destinations for Vietnamese people who purchase products in the average prices. Then
the wonderings leading to actions, the establishment of the Coffee House, can give
customers both: optimal experience space and reasonable cost.
Targeting customer's satisfaction and experience as a guideline to operate the business,
The Coffee House focuses on training employees into the types of friendly, enthusiastic
staff, always willing to speak up and share with customers. According to the Coffee
House policy from 2015, "The Coffee House is committed to sharing a 15% stake of the
entire company to employees from the store level". After that, the Coffee House has built

a culture of ownership and employee loyalty successfully. Since then, the stores can
maintain the dedication, enthusiasm, sincerity in the service as well as ensuring the
consistent quality of the whole system during operation.


There are various stories that the usages of the invalid voucher are allowed in Coffee
House; some people do not believe in that. However, those cases have already happened.
When customers come to the shop with the invalid vouchers, Coffee House still sell the
drinks to them by paying vouchers as well as explain that the vouchers cannot be used
anymore because the reason of delivering happiness which is more important than
creating a profit, contribute to the success of building up the brand values for the Coffee
House.
3.3.2 From human-centered to satisfy the smallest details
Besides, the human-centered can also be represented by the actions of paying attention
to the smallest details to satisfy customers. For example, with the same drinks but coffee
house becomes different from other competitors by focusing not only on the tastes but
also on the looks and prices. Furthermore, about the other "details" such as designing
outlet and playing music playlist in the store that all vitally bring the most convenient
and comfortable for customers.
Furthermore, coming to the Coffee House, customers can quickly meet up with the airy
space, large seats, and attentive service. Primarily, secure Wifi connection is the
advantage of The Coffee House. In Coffee House, customers can read, work, or freely chat
with friends in how much time they want. Therefore it is a place where people feel
familiar and treated like close friends.
The last but not least is that the subtlety of The Coffee House's team, which is not
expressed ostentatiously but by the dedicated care of the staff there, from service,
cashier to security. Not only that, the restrooms are always clean, carefully cleaned is
also a plus point of The Coffee House. It has created customer convenience and
increased the enjoyable experience here. The glasses of filtered water are always fullfilled; vehicles are taken out for customers. In Coffee House, employees do not need to
wait until being reminded, which accounts for the actions; they always meticulously

observe the activities and wishes of customers to support at all times. Those are the
differences that appeared only in the Coffee House.
3.3.3 Technological application to the marketing strategies
Nowadays, as the global trends of the market, digital technology contributed a brunch of
efforts in building up the business's efficiency. Almost the business operators are trying to
create their application on mobile phones as a tool to communicate and interact with
customers. However, most customers randomly leave the App after a few counts of usages
because its functionalities are not attractive enough and do not bring the benefits which
customers need. However, the opposite cases appear at The Coffee House.
Some people believe that digital applications are not necessary for the term of applying for
the operation and management of coffee stores. However, an application created under the
brand name of the Coffee House is not just for following the global trends; it is an
advantageous customer-caring channel. By using this App, every guest transactions will earn


points. Every 20 points, customers will receive a free drink and a 10% discount for loyal
customers. Notably, the number of 20 points is not a form of none-achieved targets for
customers, so that it has created momentum for customers to try to achieve goals. Along with
customer-caring software, Mobile App, and some other channels, The Coffee House has
created a multi-channel system to help manage customers effectively.
Besides, the usages of the App also help the customer information management system to
process and analyze the customers' purchases data to predict the new strategies which show
the new product categories to customers as well as improve the quality services. Besides that,
using the App is similar to the apparent decisions in separately dividing the ranks of
customers through loyalty scales as applying for the membership cards on the App. Thanks to
that, the business can easily interact and give specific types of benefits to each type of
customer.
3.4 The weaknesses of the chains of coffee stores- the Coffee House
The restrictions on diversity of menu
According to the CEO's comments since 2017, the Coffee House also has been recorded as

having an imperfect point, which is the diversity of the stores' menu. It was the senior staff
there who admitted that the menu there was nothing exceptional. Most customers come to the
shop because they like the space and service there. The Coffee House is generally still young,
with not much experience, so it needs to learn step by step and take some time to develop.
Business’s wrong directions in future
Furthermore, there are certainly also mistakes that will cost a lot when choosing the wrong
direction for the future. For example, the intense focus on the development of the business
based on customer happiness gives coffee houses many limitations; especially, it can reduce
the stores' sale volume when the allows for carrying food which not belonged to the products
or serving services in the stores appears.
The competitions of new brands
Last but not least, the coffee house's weaknesses include the inferiority in popularity of brand
values because the coffee was established late compared to the competitors when other
competitors have acquired most of the customers' trust. Besides that, the customer's choice
less geared toward emerging brands. Therefore, Coffee House which is always considered as
the second choice of customers. In the marketing competition, weak brand values are
contributive factors leading to the reduction of customers' consumption.
3.5 The opportunities of the chains of coffee stores- the Coffee House
3.5.1 The competitive environment of Vietnam's Coffee industry
According to measured statistics analyzing in six major cities (only famous brands), the
current market share of instant coffee accounts for 62% in quantity and 65% in value
compared to 38% of quantity and 34% about the value of roasted coffee. Particularly in the


Hanoi market and four main cities Hai Phong, Da Nang, Nha Trang, Can Tho, the proportion
of instant coffee still accounts for the majority compared to roasted and ground coffee,
respectively 91%, 73%. Furthermore, Vietnam's market, which has not separately
differentiated types of coffee, only two kinds of coffee business model appears that are local
coffee (serve instant coffee) and exceptional coffee (serve roasted coffee). The local coffee
impressed as Trung Nguyen in Vietnam or Nestlé Taster’s choice coffee in the US.

Exceptional coffee can be mentioned as High Land and Starbuck in Vietnam.
However, in the future, with the massive participation of local coffee, this model may lead to
saturation, which explains that it will not attract customers and make any profits. Therefore,
the opportunities for the special coffee increase significantly. There are various common
opportunities of exceptional coffee. Firstly, this coffee business model easily integrated with
the world coffee industry and less saturated. Secondly, this coffee business model is trends to
meet customer needs and satisfy the current customer tastes. Thirdly it has the little
competitive factors as well as this business model can gain customers' attention and selfdevelop it's brand value quickly.
3.5.2 The opportunities of the chains of coffee stores- the Coffee House
The Coffee House aims to establish new stores within Viet Nam
According to the market competition- rules of survival in the market, the shakiness of a name
once honored as the empire of Vietnamese coffee- Trung Nguyen coffee will make more
opportunities for new brand names to develop. In the coffee shop chain segment, the founders
of The Coffee House seem to participate in this ambitious bond race when they have just
announced an opportunity of reaching the number of 10,000 visitors per day across the
chains' system. Besides, this new brand does not hesitate to express its chance to run 200
stores by 2020. Furthermore, since the Coffee House has established in 2014, after nearly two
years of operation, this brand has 28 stores in Saigon, Hanoi, and Dong Nai. The highlight of
The Coffee House is a beautiful location, mostly located in the golden position in the heart of
the city. The first store established in September 2014 in Cao Thang, District 3 (Ho Chi Minh
City). The Coffee House's design has shaped the whole system as youthful design, suitable
places for young people, along with that, it is the success of drinks and food which capture a
lot of customers’ attention. Therefore, to expand new stores within Viet Nam, the Coffee
House can say it’s achievable because they have strong brand values as well as a considerable
number of loyal customers currently.
The Coffee House aims to change the customers’ tastes and compete with local
brands
The Coffee House is competing with local brands, especially when they were the ones who
discovered new market segmentation. Besides, in the future, while various local brands may
have to think to launch an exceptional coffee chain as well as strengthening the position of

roasted coffee to compete in the market, the Coffee House doesn't need to do that. The reason
is that the vision of their business model at the beginning has matched with the future market
demands. Also, with a substantial advantage in using technology in marketing, the Coffee
House can ultimately create a large number of potential customers which is a vital sign to
reach the opportunity of competing with local brands. Besides that, the Coffee House is
consistent with their chosen path. The global business decided to do it with their coffee


because the trend of the world is doing so while the current Viet Nam customers are more
driven to the instant coffee. The Coffee House decided to open more stores every year to
welcome more customers to come to the shop as well as generating the opportunity to change
the customers' tastes with pure coffee. However, when being consistent about the ingredients
and processing, the process of persuading the drinker is a long way, but it is conductible.
The Coffee House aims to bring quality Vietnamese coffee abroad
The Vietnamese’s community living abroad in general and living in Europe, in particular,
have a vast market, from which they can bring Vietnamese goods to foreign countries. Until
now, Viet Nam people's economy still tends to be a market economy; so the fact that almost
Vietnamese businesses deliver Vietnamese products to foreign countries is limited to many
levels, including the lack of solid branding. Currently, the market volatility in European
countries is substantial, but it also opens up opportunities for us to bring Vietnamese goods of
good quality and stability into this market. Especial with the coffee industry, which is the
most suitable industry bringing the products that matched the food standards of Europe. Let
turning back to the Coffee House, which is well known as owning expert teams of roasters,
who can control the quality of coffee from the very first stages such as seed selection,
cultivation methods, roasting recipes, and grinding to produce the final product. In particular,
there are two answers to the questions about how to bring VN products aboard, includes
investment and location. In Coffee House, there are two participations are leading to the
success of Coffee House, the first one is the Seedcom Investment Fund, and the second one is
the Prosperity Trees group. Accordingly, Seedcom assisted The Coffee House in expanding
and managing the chain of stores. Prosperity Trees is helping with marketing, advertising,

coffee growing, etc. Because, the Coffee House which owns strong supporters as well as the
products which are suitable for the foreign market, considered as having opportunities to
bring the quality of Viet Nam coffee to oversea
3.6 The threats of the chains of coffee stores- the Coffee House
The external threats of the Coffee House
The Coffee House has collided greatly over the past two years. The competitive threats come
up when the competitors are not only in the F&B industry because they always located in the
gold position in the downtown areas, therefore, they have to compete with other common
brands in others industry, for instance, The Gioi Di Dong and Dien May Xanh which are
nearby their location. Besides, the threats of losing customers appear when some business
models which are established in the mall but in the high floor still are not switched to locate
at the foot of the building. In the mall or supermarket, the shippers are hard to take the
products to deliver to customers as well as some apps refuse to collaborate with the
businesses which hardly contact with their shippers.
The internal threats of the Coffee House
Starbucks has about 20 stores, but the ambition will have 100 stores within the next 3-5 years.
Highlands has about 130 locations and will undoubtedly continue to expand, Trung Nguyen
currently owns about 100 stores and 10,000 coffee selling points under the brand name of
Trung Nguyen. The reasons for their success are that they will never handle with the lacking
of operating capital if they sell the products at the price of 60.000 to 80.000 VND. About the
Coffee House, their calculation on cost of opening a store belonged to the model of The
Coffee House, ranging from 80,000 to 300,000 USD in the golden position. However the
price of their selling drinks is between 30,000 and 60,000 VND then the threats can quickly


come up when the business does not reach enough customers to cost recovery, it business
model will be difficult to survive long.
IV. Analyzing the marketing methods appearing in the marketing strategies of the
Coffee House by examining the current strategies
4.1 Traditional marketing

1. The vouchers and coupons which provide free products, services
2. The banners which introduce the new products, special offers
4. The workshop coffee
3. Serve customers with dedication
4. Say thank to customers
4.2 Technological marketing
4.2.1. SEO (Search Engine Optimization)
The Coffee House has a popular website which is calculated as reaching over 1,200 visits
every day compared to 40000 visits at the stores. Nowadays, the Coffee House has generated
enough functionality for their website including the net-click on brand stories, coffee stories,
menu, customers’ rewards, news, employment and stores’ information. However, in a robust
competitive coffee market, almost famous brands that owned for themselves each useful
websites, therefore, to compete with The Coffee House has to utilize the SEO to conduct the
marking.
The definitions of SEO (Search Engine Optimization)
Search engine optimization is the process of increasing the website's visibility on search
engine results. Specifically, the higher a site appears, and the more search results it has, the
more people will be able to access it through search engines. Besides, the purpose of applying
the SEO in marking is to increase the rate of interacting with customers as well as promoting
the brand values though the network tools.
The Coffee House’s purposes of using the SEO in marketing
•
•
•
•
•
•
•

Promoting brand information to the public

Increasing interaction rate with customers
Creating convenience for customers
Identifying new potential groups of customers
Reaching untapped market segments
Help businesses expand the market
Reducing the costs of digital marketing includes display ads

4.2.2 Advertisements on social media


Coffee House implements a marketing method by applying social media marketing on both
famous media which are Facebook and Instagram. However, most of their fan page creates
the public relations (PR) by affecting the customer purchases’ demand and customer attention
through telling the “business stories”.
According to the statistic, there are more than 20 posts per month on The Coffee House’s fan
page on Facebook and Instagram. About the contents, the Coffee House posted a lot of
workshops videos and viral clips considered as short videos as well as their stories and
images about unique coffee and unique business that attract a lot of young people. There are
also "internal" stories about their stores and staff, and there are also stories about their
community social activities. Notably, this is one of the most effective forms of self-PR.
However, this method does not annoy customers like using the Youtube ads; all of the above
ways make Coffee House like "House" of the guests. Besides, Coffee House CEO has said
that Facebook is an active marketing channel for restaurants and cafes. Therefore utilizing
this tool skillfully will bring in countless customers
The purpose of marketing on Facebook and Instagram
A. Make customers know the Coffee House brand
Whenever the Coffee House wants to launch its new stores in any locations, by using the
Brand Awareness goal-setting on FB, they can create a campaign to introduce the local people
to know their delicious cafe products. Furthermore, the information on new discounting
program also published on those social media.

B. Exchange from media visitors to real store visitors
The Coffee House wants to use FB and Instagram to encourage customers' interested in their
business, it also use to make customers buy or use the product/service more frequently.
Besides, by using FB and Instagram, Coffee House can create a campaign to encourage
potential customers to visit the nearest store as well as receive the customers' feedbacks.
4.2.3 The Coffee House application
What is BEAN, how to save up BEAN for rewards?
From 23/09, The Coffee House will launch the new Loyalty Program - The Coffee House
Rewards through The Coffee House application, with attractive privileges and privileges to
bring perfect experiences to customers. BEAN - a brand new unit for accumulating points at
The Coffee House Rewards 3.0 appearing in the year of 2019.
Business no longer uses Sao as the old program. With the new program, points will entirely
be changed by BEAN. Besides, with the BEAN you accumulate, not only to promote
members but also to exchange for more diverse and more attractive offers at the Special Store
- the first time available at The Coffee House.
Come to the stores or order through The Coffee House's app to accumulate BEAN by making
deals when buying The Coffee House products (VND 10,000 = 6 BEAN). Particularly when


customers get promoted to diamond rank, their accumulated BEAN points will be multiplied
by x1.5 times.
Customers' rank in Coffee House application
In the new version, the membership model will have changes from 6 to 5 ranks includes
NEW - COPPER - SILVER - GOLD - DIAMOND. These new promoting program will help
customers to up-rank more straightforward and faster. Besides, the customers’ ranks in the old
version are maintained in the latest version. There will be four changing periods
corresponding to 4 quarters.
Term 1: From January 1 to the end of March 31.
Term 2: From 1/4 to end of June 31.
Term 3: From July 1 to the end of September 30.

Term 4: From October 1 to the end of December 31.
The new version’s compensation and new rewards
A. The compensations
Categories

Description

Compensation

Customers with 25 stars

Members have accumulated
from 22 to 24 stars and will
receive BOGO rewards
Members have reached to 97
stars

BOGO rewards
Up-rank to Copper
membership
Up-rank to the next ranks

Customers in Silver but no
longer reach to Gold
membership
Customers in Gold
membership
Customers in Diamond
membership- 50 stars

Members have reached 98 to
99 stars

Free drinks
Up-rank to Gold membership

Gold membership reaching 45
to 48 stars
Diamond membership
reaching 45 to 50 stars

Free drinks

Customers in Diamond
membership- 100 stars

Diamond membership
reaching 95 to 99 stars

Free drinks and cakes

New rewards

After up-rank

Prerogative

Free cakes for birthday

Up-size for first orders

Special rewards for rank from
Silver to Diamond

Customers with 26 to 97 stars

Free drinks

B. The new rewards


Redeem BEAN in the rewards
store

Free snack when the bill is
over 100.000 VND
Buy 2 get 1

Accumulate faster- x1.6 in
new version
Exclusive rewards

Free one coffee/ Thai tea in M
size

Experience new services, new
features, new products, freeparticipate in workshop and
events
The opportunity to receive
exclusive prizes of great value

Free drinks and cakes

V. Scrutinizing the marketing strategies of the chains of coffee stores- the Coffee
House
5.1. Analyzing the positioning of the Coffee House
The Coffee House will be continuously positioned by using the 5P marketing strategy:
People&Physical Evidence, Promotion, Price, Product, and Place. This strategy will allow the
cafe chain to cover all aspects needed to operate successfully without leaving out any factor.
It also greatly benefits the chain by determining its brand consistently and keeping track of
customer insight. Furthermore, customers will always be provided with a sincere attitude.
5.2 Analyzing the production strategies of the Coffee House
The Coffee House will launch the new seasonal menu in every season as usual but yet remain
its original coffee drink line. The features on the seasonal menu not only have to be attractive
and creative but also be different from previous years' seasonal menus. Moreover, in every
seasonal menu, there will always be one to two coffee drinks so that it will manage to
surprise customers who enjoy coffee and to be a place that customers come to for coffee like
its name. One more key in the product strategy is that features on the menu have to fit with
seasons, for example, cold beverages will only be promoted during spring and summer, while
hot drinks will be promoted during fall and winter only.
5.3 Analyzing the pricing strategies of the Coffee House
The Coffee House positions itself to be a middle-cost alternative, which is from 30.000 60.000 Vietnamese Dong for both seasonal features and original ones. Its target customers
with this pricing system are not only for middle-class but also for higher-class who enjoy a
fair price and classality space. The regular size of drinks is typically costed from 30.000 to
50.000 Vietnamese Dong depending on which items. The large size of drinks has higher cost
from 45.000 to 60.000 Vietnamese Dong. With its strong position, The Coffee House can
increase the price to place itself into the same segment with other high-class cafes. However,
the chain will continue to keep the middle-class price in sustained future to remain the
reasonable option that customers choose to go.
5.4 The distribution strategies of The Coffee House

In order to reach the customers, The Coffee House has employed a selective distribution
strategy where the customers will come to the shops or The Coffee House will come to them.
Therefore, the distribution strategy depends mostly on the “people” factor, which leads to
other elements like time and location.
The location of the coffee shops is extremely important because it must be convenient for the
customers, especially if the company are introducing its first shop to the market. That will
create a good impression on the customers. The Coffee House is in the expanding period, so
they constantly introduce new locations in the major cities in Viet Nam, although the
locations of their new coffee shops are not randomly chosen. They must qualify The Coffee
House’s top criteria: accessible, charming, have its own parking lot, and a great view. The
Coffee House’s business theory is to value “people” so their customer’s opinion is counted
when they need a new location and design it to be another fantastic shop in the chain. The
company wants to create a signature space in their coffee shops that tend to locate on the
main streets and have a nice view of the busy streets in the city. All of their shops have high
celling and many windows which make the space wider and more open, the light is yellow
which create a warm atmosphere, different kinds of table and chair are put in different
sections to help customers work better, and especially small details like electrical outlets are
available at each table, music playlists are comfortable, etc. The Coffee House knows that
coffee time is not just about coffee anymore, it is about the space and location where a
customer can enjoy himself. That is why The Coffee House invest their time and money in
creating a great space for their customers.
With the internet nowadays, a customer can wear pajamas and order a drink to be delivered
right to his door. And The Coffee House has used this advantage in their distribution strategy.
They cooperate with some transport companies like Grab, GOVIET, or Now to help them
deliver the service to their customer. Their customers will be able to access to the full menu
with a suggestion of the nearest location of The Coffee House on their phone. Time and
quality are the only elements that need to be carefully considered in this distribution method.
5.5 The market research of The Coffee House

The research had been made to analyze the customer’s experience at The Coffee House for
the future development of the shops. Other objectives are to know the customer’s satisfaction
about the service and facility, to identify the most frequent customer group and to gather
opinions in improving the customer’ satisfaction and company’s sales.
The Coffee House had conducted primary data from an online survey which was designed in
Likert scale and multiple choices questions. The survey was designed to be simple,
convenient, and effective for the customers. There are 43 responses that the company’s
performance will be analyzed. The questions focus on customer’s general opinion about The
Coffee House: frequency, price, whether they come back, if The Coffee House is their first
choice, what they love and hate about The Coffee House and evaluation questions in areas
such as food and drinks, services, facilities, and the company’s concept.


According to the survey, customer segmentation can be divided into three groups in which
the young adults and adults can be seen visiting The Coffee House more than the middle age
customers group. The result is reasonable because most customers spending times at the
coffee shops model like The Coffee House are young generations who need space to work
and study. As such The Coffee House should design their system to be suitable for these
customers in order to maximize customer’s satisfaction.

The second data will help the company know how frequency their customer visit The Coffee
House to use the space and enjoy a cup of coffee. The sample shows that 23.3% (10
respondents) visit the shops every day, follows by 2.3% (1 respondent) visit 3 to 4 times a
week or whenever that customer hangs out with his friends. Then 4.7% (2 respondents)
response to twice a week and 18.6 % (8 respondents) represents once a week. 30.2% (13
respondents) count for visiting The Coffee House once a month.

Among 43 responses, 34 respondents said he would like to come back in the future (79.1%)
and 9 customers said they won’t return (20.9%). The survey will also give the company its

customers personal opinions of things that they like and hate about The Coffee House. Many
of them have stated that they love all aspects the company values the most: space, services,
and price. Although some respondent still think that their price is high for students (54%).
The Coffee House is one of the famous brands in the F&B industry, therefore it is the first
choice of many customers which usually makes many of The Coffee House shop crowned.
Which create a negative aspect for the company because some customers prefer a quiet place.
The company would take these negative responses on account to be able to serve its
customers the best.

The graph below shows some opponents of The Coffee House that customers may choose
over them. First place is Highland Coffee (40.5%), follows by Phuc Long (31%) and then
Cong Ca Phe (11.9%) and Starbucks (9.5%).