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Trung Nguyên Marketing Strategy Analysis
Trung Nguyên Marketing Strategy Analysis
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Student’s signature: Bùi Nguyễn Hoàng Anh
Student’s signature: Lê Trần Ngọc Minh
Student’s signature: Phan Yến Phượng
Student’s signature: Huỳnh Nguyễn Bạch Vân
Student’s signature: Phạm Thị Hạ Vy
Note: An examiner or lecturer / tutor has the right to not mark this assignment if the above declaration has not been
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PRINCIPLES OF MARKETING
ASSESSMENT
B. Marketing Environments
1. Micro environments
a. About the company
b. Suppliers
c. Marketing intermediaries
d. Customers
e. Competitors
f. Publics
2. Macro environments
a. Demographic environment
b. Economic environment
c. Natural environment
d. Technological environment
e. Political environment
f. Social environment
C. SWOT Analysis
C. STDP Analysis
1. Segmentation
2. Targeting
3. Differentiation
4. Positioning
E. Conclusion
D. References
E. Appendixes
A. Situation Analysis
1. Company description
a. History
Trung Nguyen is a part of Vietnamese business group which produce, process and
distribute coffee. Moreover, this is the largest and domestic coffee brand in
Vietnam. Its products are exported to more than 60 countries, consisting of G7
countries, United States, European Union, United Kingdom, Germany, China,
Canada, Russia, Japan, Dubai and ASEAN including Singapore.
Trung Nguyen Coffee was founded on June 16th, 1996 in Buon Ma Thuot – the
best place to grow coffee. With the strongly belief as well as willpower, Dang Le
Nguyen Vu has brought the flavor of coffee to the world.
b. Mission Statement
Commitment to bring Vietnamese coffee brand to the global. Furthermore,
bringing creative inspiration as well as connecting the community of coffee lovers
in order to enhance their image.
c. CEO
CEO and Chairman of Trung Nguyen is Dang Le Nguyen Vu. He is considered as
“King of Vietnamese Coffee” by National Geographic Traveler and Forbes Asia.
2. Product description
a. Introduction
G7 is the symbol of the best special coffee in the world. A association of hi-
tech with oriental secret technique that comes from the world's best coffee
regions, which brings a perfect G7 coffee. A distinctive production makes G7
different from others in the fastidious extraction of coffee: G7 instant coffee
has the bold and gripping flavors and aromas because of the extraction of the
best quintessential of the coffee bean.
b. Features
G7 instant coffee has 4 types:
- G7 3IN1.
- G7 Pure soluble Coffee.
- G7 cappuccino has 3 different flavors of selection:
+ G7 Cappuccino – Hazelnut: Mixed fresh Hazelnut flavor and the
finest coffee from Buon Ma Thuot.
+ G7 Cappuccino – Mocha: Combine between chocolate and coffee
flavors.
+ G7 Cappuccino – Irish Cream: The combination of liqueur and ice
cream flavor.
- G7 2IN1
B. Marketing environment
1. Micro Environment
a. The company
Trung Nguyen Coffee was established in 1996 and has become one of the most
famous companies in Vietnamese coffee industry. Trung Nguyen has released
various type of coffee products to satisfy customers’ taste such as roasted coffee
(Creative One-Culi Robusta, Creative Two-Robusta Arabia) and instant
coffee(G7 3 in 1). Trung Nguyen’s products do not only meet the domestic’s need
but also expand their market to other developed countries by applying high
technology. Trung Nguyen International was established in order to bring
Vietnamese coffee to global market. Board of Directors has played an important
in the company’s success:
Mr. Dang Le Nguyen Vu is the Founder and Chairman of Trung Nguyen
Legend Group.
Ms. Le Hoang Diep Thao is the founder and the CEO of TNI (Trung
Nguyen International) Company and Trung Nguyen Instant Coffee JSC.
Ms Diep Thao is the co-founder and co- owner of Trung Nguyen Group
(TNG).
Mr. Do Kyung Soo: Regional Director of Korea
Mr. Tsan Chun Keung (Peter): General Manager of Mainland China
Region.
Mr. Ho Kim Chye (James): Director of Business Development.
b. Suppliers
Suppliers play an integral part of Trung Nguyen’s operation. Raw material such as coffee bean is
the main key to produce high-quality product. Therefore, Trung Nguyen has to choose coffee
beans from reliable sources: Robusta from Buon Me Thuat City, Dak Lak Province; Arabica
coffee beans from Jamaica and coffee beans from Ethiopia, Brazil. In order to increase the value
of coffee beans, Trung Nguyen developed a coffee farm Ea Tul in Dak Lak Province. Trung
Nguyen has 3 factories in Vietnam to produce roasted coffee and they locate in Binh Duong
Province and Buon Ma Thuot City, Dak Lak Province. Trung Nguyen also has 2 factories to
produce instant coffee: Sai Gon coffee factory and Bac Giang coffee factory – the biggest factory
in Asia making instant coffee. All of these 5 factories use machine imported from Neuhaus
Neotec – German Company. Phuong Nam Company and Vina Packing Films Co., Ltd. By using
high quality raw material and applying advanced technology, the market of Trung Nguyen has
expanded not only in Vietnam but also to more than 60 countries worldwide, such as Japan,
Germany, Canada.
c. Marketing intermediaries:
Trung Nguyen Company has large consumption market due to strong Marketing Intermediaries.
Firstly, Trung Nguyen has approached to new customers by co-operating with other industry:
Trung Nguyen is served on every Vietnam Airlines flight, is exported to 60 countries all over the
world, and featured at international events in Vietnam such as the ASEAN summit and the Miss
Earth 2010 pageant. Secondly, Trung Nguyen uses 2 common newspapers to advertise: Thanh
Nien newspaper, Tuoi Tre newspaper. Besides, Trung Nguyen does many charities such as
giving free books: Trung Nguyen Legend Group together launch the long-term social program of
START-UP – BUILDING THE NATION to give Vietnamese youth wings of Great Aspiration,
discovering the secrets of success, daring to start-up towards prosperity for themselves and the
nation.
d. Customer
Trung Nguyên coffee is a well-known brand in Vietnam, quickly built up its reputation and
become familiar to every family. Coffee has become a traditional drink when almost every
people have a newspaper with a cup of coffee on their table in the morning. Trung Nguyen seizes
an opportunity and concentrates on dominating customer segment who are in middle class have
middle income. They range from young to older generations including college students, white-
collar workers always on the run blue-collars. The targeted customers are both people in urban
and suburban area, they usually have a busy life, therefore, G7 instant coffee is easy to use and
provide enough energy to improve work efficiency. In addition, Trung Nguyen not only provides
a large amount of inland canned coffee but also export to more than 60 countries all over the
world. This explain to Trung Nguyen’s mission, to bringout the Vietnamese coffee taste to
global.
e. Competitors
Along the long-standing brand, the Vietnamese coffee market welcomed a wide
range of new brand. Therefore, enterprises are in a fierce competition.
f. Publics
General publics: the old and middle ages account for 70% of Trung Nguyen customers
and the rest is exported
Media publics: The three-year divorce dispute between Dang Le Nguyen Vu, chairman of
Trung Nguyen Group, and Le Hoang Diep Thao has drowned Vu’s ambition of taking
over the world-leading coffee brand Starbucks to dominate the global coffee market.
Most recently, the dispute between Trung Nguyen Group and Le Hoang Diep Thao, the
group’s former deputy general director, is causing a stir again as it has been revealed that
the group’s subsidiary—Trung Nguyen Instant Coffee JSC (Trung Nguyen IC)—in mid-
2017 sued Thao at the Bac Giang People’s Court for illegally seizing the company’s seals
and the Bac Giang branch’s legal documents
2. Macro Environment
a. Demographic:
The instant coffee industry in Vietnam has been a potential industry since the early 2000s.
According to Statista’s web site, revenue of instant coffee segment comes to US $740M in 2018.
In big cities such as Ho Chi Minh City and Hanoi, the coffee consumption is greater than in rural
area. Most coffee users are households that prefer convenience and competitive prices, so instant
coffee is considered the best option to save time and money. By looking at different segments, in
November 2003 Trung Nguyen company first launched instant coffee G7 that matches the busy
lifestyle in big cities.
b. Economic:
Over the past three decades, with the Doi Moi policy (1986) there have been a stably strong
economic growth, improved living standards and the transition of Vietnam from “from a
centrally planned economy into a more market-oriented economy through gradual integration
into the global trading and investment system” (WTO). This assists the harmony between
economy and agriculture improvement. Vietnam is one country among the countries with
world’s lowest coffee production costs; therefore, producing and exporting coffee play important
role in economic growth. Trung Nguyen is one of the domestic coffee brand which is famous for
its green coffee ingredients. The company focuses on both middle class and upper class with the
prices ranging from 40.000 VND to 16.000.000 VND. As a result, they can choose to buy the
product that is suitable for their budget and also their lifestyle.
c. Natural:
Located in Southeast Asia, Vietnam is a tropical country and strongly influenced by seasonal
monsoons. Climate differences also rely on the altitude. With height of 500 – 600 m above the
sea level and high amount of rainfall (more than 1.000 mm per year), five provinces in Tay
Nguyen are suitable for cultivating coffee and robusta coffee is the most famous among the
others. Climate change and other environmental issues have impacted the coffee production
industry not only in Vietnam but also around the globe. Due to the fact that temperature keeps
getting higher, most of the growing coffee areas will be inappropriate for producing in 20 to 30
years. According to the website of Thien Nhien newspaper, by 2050 the total area which is
suitable for robusta coffee production is said to decrease from 52.39702 km2 to approximately
28.87646 km2. However, experts have pointed out an effective way to cope with these
environmental changes through planting coffee under forest’s shadow or combining with other
industrial plants which can provide shadow. In terms of Trung Nguyen company, they
introduced a new product using capsule rather than plastic package in order to minimize the
waste materials.
d. Technological
There have been some improvements in technology of Trung Nguyen cafe. First of all is to apply
the most modern nanotechnology and technology of spray drying condensed milk in
manufacturing Vietnamese coffee. Moreover, the combination between these up-to-date
technology and Eastern people’s key has guaranteed the entire original taste of the tastiest coffee
beans that are chosen selectively from Arabica Cau Dat and Robusta Buon Ma Thuot.
Additionally, Trung Nguyen invested more than 55 million vnd in constructing the drip irrigation
system ( which was belonged to Israel) and assist households in coffee lands with instruction and
knowledge of technology. This system is brilliant! It provides water and fertilizes directly to
each coffee plant by irrigation and filter system saving up 60% amount of water not only helps to
improve life of people here but contribute to develop Vietnamese coffee.
e. Political
Vietnam, officially the Socialist Republic of Viet Nam is ruled by Communist Party of Vietnam
(CPV) and it is a fairly peaceful country (ranks 60 out of 163 in 2018). Due to the Doi Moi
policy (1986), Vietnam has earned its stability in economic growth along with transformation of
its economy from being closed to integrating with the world. As a result of the policy,
Vietnamese government has declined its interference and control in business activities and
increased in personal economy element.
Vietnam also stimulates trading goods while the government has changed tax policies of
importing and exporting that would benefit investors. According to the website of Tin Tuc
newspaper, from the beginning of 2018 the import tax of some goods will drop to 0% in order to
build an equal and competitive business environment. The Vietnamese government has achieved
the agreement with many countries to open the market of processed coffee in Vietnam and
reduce the import tax. Therefore, lots of foreign and domestic start to invest in producing instant
coffee and Trung Nguyen company is one among the most successful brand in instant coffee. To
the world, Vietnam is the country that exports Robusta coffee the most and is competing with
Brazil to be the top coffee exporters worldwide. Moreover, Vietnam not only dominates the
coffee exporting market in India with its higher growth rate of 31.7% in amount and 8.2% in cost
than in 2017 but it is the potential counterpart in global market with its increasing exporting
growth rate, such as Germany rises 133.8%, Thailand rises 138.7%, Russia rises 172% in
10/2018 and so on. However, Vietnam still has many disadvantages in exporting coffee. One of
them is unplanned development of growth of coffee in areas or lands that lacks water and
nutrients, as well. In addition, Vietnam also imports more and more coffee throughout the years
from Brazil, USA, China, etc. Furthermore, Vietnam can not meet the international market
demand for Arabica coffee which has more quality than Robusta as it specializes in growing
Robusta coffee and it leads to growing coffee importing.
f. Social
Vietnam is a developing country that has much more low and middle class people than the upper
class; that is why products which are cheap and advantageous are popular and favored by
Vietnamese people.
Coffee is indispensable to Vietnamese’s daily life and with the Vietnam’s social environment,
G7 instant coffee is the best choice for everyone. To the founder of Trung Nguyen coffee, he
said he wanted to use each pack of coffee to convey a message to every Vietnamese people that
he aspired to change the inner-self of civilian in this nation and each enterprise has responsibility
for its field, country and citizens to enhance love and belief from consumers. In addition, G7 is a
commercial product for office workers, a data findings of Kantar Worldpanel states that there
was 1 out of 3 drinking coffee having G7 instant coffee; especially there was nearly 40% of use
of G7 from workers in more than 30 group. As a result, in 2011, G7 took the lead in instant
coffee market with the market share 38%; then in first 3 months in 2012 was complete a leader
with 40% of the market share. Furthermore, a survey found that from 2009 to 2011, Trung
Nguyen is the number one coffee brand with the largest amount of coffee consumers in Vietnam
(65% out of 10 households using Trung Nguyen coffee could not agree more that they loved
Vietnam brand the most.
C. SWOT Analysis
Strengths Weaknesses
The factory is located in the capital of coffee with Some people have a problem with the
a solid infrastructure – Buon Me Thuoc declaration of G7 with Nescafé. The
There is a wide distribution channel system. In persuasiveness of this message “Fighting
Vietnam, this is the first form of confronting and for Vietnamese brand” is dwindling.
franchising. The quality of the products satisfy the Consumers are also looking forward to
needs of Vietnamese people. Trung Nguyen Legend launching a new G7
Trung Nguyen always focus on "ethnicity" in each product.
of its product and G7 is no exception. Trung Nguyen Coffee Company has
The usage of coffee beans in Tay Nguyen’s problem in massive transfer system and
traditional forests as a dissolved coffee in inconsistency. Thereby, this is a reason that
Vietnamese style has hit the customer psychology makes company not guarantee consistency
"Vietnamese use Vietnam’s products". G7 quickly and not create their own style.
gained a foothold in the Vietnamese market
because Trung Nguyen has gained national fame
as a brand.
The taste and aroma of G7 is so special that no
instant coffee can make it. This has proven the
trust of customer when they has used G7’s
products
Trung Nguyen develops G7 coffee with many
flavors in order to adapt to suit individual tastes
such as G7 coffee 3in1, G7 2in1, G7 soluble
black, G7 cappuccino, which enriches this brand.
Opportunities Threats
G7 has pioneered the "revolution" named Before G7 instant coffee of Trung Nguyen
"Vietnamese spirit" and has shown the dream of was launched, there are many other instant
the Vietnamese people who dare to prove coffee had existed including Nescafé and
themselves. Vinacafe.
G7 wants to become a leading brand not only in Trung Nguyen has declared war on Nestlé
Vietnam market but also in the global market. USA and has taken a high position in
With clever marketing strategies as well as the domestic market. Therefore, a wide range of
quality of G7 which brings to foreign markets by companies want to overthrow Trung
franchise stores. G7 have various opportunities to Nguyen coffee company.
become the worthy adversary with big brands The development of franchise stores carries
such as Nescafé and Highlands coffee. a number of risks when it may not be able
to control every system of shops. This is
possible reason for discrediting the
Vietnamese coffee and for foreign
companies to attack the G7.
D. STDP Analysis
1. Segmentation
2. Targeting
People of all ages, classes, types of job; especially the ones who need to highly concentrate on
work or are stressed, busy and crave for energy. It suits the younger much more than the older, as
young people want fastness and convenience.
3. Differentiation
a. Product differentiation:
Trung Nguyen is known for being the largest domestic coffee brand in Vietnam. What makes
Trung Nguyen different is that it is one in a few Vietnamese coffee brand which represents spirit
of culture. According to Mr. Vu – the chairman of Trung Nguyen, a brand that represents
identity and value of a culture is complimentary. At the moment, Vietnamese people are
encouraged to use their own domestic products such as coffee. This is also one of three messages
he wants to send to the consumers in Vietnam. Trung Nguyen does not only encourage to use
domestic coffee but it also always works on new product which is able to fit in each generations’
lifestyle. In order to achieve that, in 2003 G7 instant coffee was first launched. After a blind taste
test in Independence Palace in Ho Chi Minh City, G7 became the most favorite instant coffee
and received orders up to 16 tons of G7 from the USA, Australia and Holland. Trung Nguyen
focuses on improving the quality and also extending the cost range through a variety of products.
Targeting on the upper class and real coffee enthusiasts, Trung Nguyen presents weasel coffee.
Mr. Vu once said: “I want to be the world coffee leader.” (“Tôi muốn làm lãnh đạo cà phê thế
giới.”), so it can be obviously seen that Trung Nguyen’s strong ambition is to affirm the
importance of Vietnamese coffee to the world.
b. Channel differentiation:
Trung Nguyen coffee shop system in Vietnam is distributed around the country. On the other
hand, they also distribute their products through Coffee Hypermarket website and others super
market system.
c. Image differentiation:
Trung Nguyen builds its brand by focusing on the spirit of “the essence product of Vietnamese
land” through combining the traditional coffee culture and the modernity of packaging, design
patterns and shop decoration. The logo of Trung Nguyen – an upward yellow arrow was stylized
from communal house in Tay Nguyen – represents the will to conquer and become the best
coffee brand. Besides, main color in their logos are the color of earth, coffee beans which is truly
familiar with Vietnamese people. Trung Nguyen also conducts agricultural start-up project that
attracts lots of Vietnamese citizens around the country and this is one of marketing strategies that
helps Trung Nguyen become more viral. Trung Nguyen constantly works on new product
through improving packaging, decoration and widening the cost range so that the demands of
each different types of customers segment can be met.
Appendix 1 illustrates coffee market share in Vietnam in 2016 that was conducted by Market
Intello. It can be seen from the chart that Trung ranked first while NesCafe that is the strongest
competitor to Trung Nguyen ranked second. Consumers have tendency to choose the brands they
are similar with, and Trung Nguyen is widely well-known by most of generations (Appendix 6).
d. People differentiation:
With professional working attitude, not only Trung Nguyen’s products but also their staff gain
favorability from the customers. Their goal is to create the highest quality and bring the best
services to completely satisfy the consumers’ needs and demands
4. Positioning
Trung Nguyen is the famous coffee brand, both in domestic and export, Vietnamese people
appreciate the great achievments of what Trung Nguyen has bring into life. In the coffee market
in recent years, although Trung Nguyen has to compete with many competitors, Trung Nguyen
in the domestic market seems like more vibrant, this brand prove their positioning in supplying
their customers with massive of coffee products. Beside the Origin Coffee Bean, fresh coffee,
Legendee coffee and many different lines, Trung Nguyen also serves their customer with G7 X2
instant coffee which is the combination of taste of the filter coffee and traditional G7 instant
coffee. This coffee line provides consumers with great taste and both suitable for local and
foreigner people in Vietnam. This feature is an important attribute to make Trung Nguyen
successful in becoming the leader in Vietnamese coffee manufacturer and distributor.
Comparing to the direct competitors such as Starbucks and Highland Coffee, Phuc Long, ect.
Trung Nguyen offers more variety of products for many costumer targets. While other brand
concentrate on their coffee shop for people to stay for a moment or take away, Trung Nguyen is
still maintaining their position as an famous and international brand with good quality, more
diverse product line.
High quality
Low price High price
Low quality
Value positioning
According to the ratio between prices and product quality, Trung Nguyen applied ‘more for
more’ positioning strategy for their products, for example The Lion Weasel Coffee is expensive
due to some conditions. With the high technology and good taste of coffee, Trung Nguyen
attacks a competitor’s more-for-more positioning by introducing a brand offering comparable
quality with competitive prcies in some line of products.
E. Conclusion
With unremitting efforts in production and business, Trung Nguyen Coffee has become a
familiar brand not only in domestic market but also in international market. Trung Nguyen also
achieved many achievements as well as created significant growth in term of revenue and profit.
Furthermore, with the decision to pioneer in applying the franchise business model in Vietnam,
Trung Nguyen has emerged as a powerful corporation.
References
Institute for Economics & Peace. (2018) Global Peace Index 2018. Retrieved November 19 th,
2018 from http://visionofhumanity.org/app/uploads/2018/06/Global-Peace-Index-2018-
2.pdf
Super agricultural projects - Phase 3: International standard coffee materials. Retrieved March
11, 2015; from https://thanhnien.vn/tai-chinh-kinh-doanh/sieu-du-an-nong-nghiep-ky-3-nguyen-
lieu-ca-phe-chuan-quoc-te-540301.html
Trung Nguyen Online – your source for Vietnam’s number 1 coffee. Retrieved from
http://www.trung-nguyen-online.com/index.html
Global Coffee Report. (2012). Trung Nguyen’s G7 Instant Coffee celebrates ninth birthday.
ninth-birthday
Trung Nguyen Legend. (n.d). Trung Nguyen Legend’s Milestone. Retrieved from
https://trungnguyenlegend.com/lich-su-phat-trien/?lang=en
Trung Nguyen Legend. (n.d). Vision – Mission – Core Values. Retrieved from
https://trungnguyenlegend.com/tam-nhin-su-mang-gia-tri-cot-loi/?lang=en
Appendix