International School of Business Western Sydney University

PRINCIPLES OF
MARKETING
(PMk-S120WSB-2)

LECTURER: Vo Thanh Hai

Student: Ngo Le Khanh Van - B1111923072

Nguyen Van Hien- B1111823093
Hoang Thien Tai-B1011725042
Le Viet Luong- B1121914091

MARKETING REPORT

Industry: BUBBLE TEA- Brand: GONG CHA

Contents

I. Introduction:
1) Company description
2) Product description
II. Marketing environment:
1) Macro environment
2) Micro environment
III. SWOT analysis
IV. STDP (Segmentation, Targeting, Differentiatong, Positioning)
V. Conclusion

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I. Introduction:
1) Company description:

Gong Cha is the fastest growing tea brand in Asia with

over 1500 stores in over 20 regions worldwide as well as
being the first tea franchise to operate on a world-class
luxury cruise liner, the Majestic Princess. Gong Cha was
founded in Kaohsiung, Taiwan (China SAR) in 2006. As
Gong Cha claimed the slogan “The best quality comes
first”, the firm had shown their effort of making Gong
Cha become a popular brand name around the region by
expanding to Hong Kong in 2012 by a Hong Kong native.
By the end of 2012, their 46 stores decreased to only 5
because of food scandals. Then the company managed to
recover consumer confidence and further expanded in various countries, such as Macau, South
Korea, New Zealand, Australia, Singapore, Malaysia, China, Canada, the United States, the
Philippines, Myanmar, Vietnam, Japan, Brunei, and the United Kingdom. Also, Gong Cha first
showing up in District 1, Ho Chi Minh City, Vietnam on 10th Nov 2014 by CEO Nguyen Hoai
Thuong (Gong Cha Vietnam Company). Until now, Gong Cha has a total of 49 stores in
Vietnam, which states its objective to compete for the Vietnamese bubble tea market share, and
also stated its mission to build a strong relationship between milk tea lovers in Vietnam.

2) Product description:

Gong Cha offers 57 different drinks, which is divided into

7 types: Gong Cha Signature Series, Brewed Tea Series,
Healthy Series, Milk Tea Series, Creative Mix Series, Fresh
Milk Series, Smoothie Series, and Yogurt Drink Series. In
Vietnam, it has 6 main types of Gong Cha drink, apart from
Fresh Milk. About Gong Cha Signature Series, it has
another name is Gong Cha Special House, which has the
base is brewed tea with upper layer special creamer foam.
The taste is marvelous and it is the top seller of the Gong
Cha product.
Besides, Gong Cha also offers the menu based on the
season. According to Gong Cha's head-quarter, Gong Cha
always tries their best to create and serve the best and unique tastes that the customers cannot
find anywhere else. This function leads the Gong Cha image into always seemed like the more
premium product, from the packaging to the tea, and as the market shifted to become
increasingly upmarket.

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II. Marketing Environment:

1) Macro environment
a) Demographic forces

It can be seen that there are 70 percent of people older than 14, this can be an opportunity for
Gong Cha in Vietnam. However, the age 55 and over are not potential customers for Gong Cha
to aim at as they often have diabetes meaning that sugar can make the diseases become worse.

b) Economic forces

The Gong Cha business has slightly affected the current economics environment of Vietnam.
Last year was a difficult year for Vietnam as they suffered from a lot of natural disasters in many
places and damage cost nearly 5.2 billion, but they still managed to strengthen the economy. In
the last quarter the GDP had recorded the strongest performance. It expanded at a better than
expected rate of 7, 02%. However, the exchange rate from Vietnam currency to China currency
is low (1 VND = 0, 00030 CNY) so the profit may not gain much. Furthermore, Gong Cha can
hope for a better result and opportunity during establishing their business in Vietnam.

c) Natural forces

Vietnam is a country near the equator so usually the temperature is from 21oCto 27oC and
increases gradually from North to South. It is also believed that it is too hot during the summer in
the south of Vietnam and too cool in the south. That’s why it can work as a positive thing for
Gong Cha as their sweet milk tea products are available in both hot and cold. Whether the
environment in Vietnam is hot or cold, Gong Cha could satisfy their customer, so the tropical
weather of Vietnam will give a head start to the business of Gong Cha milk tea. 

d) Technology forces

It can be seen that Vietnamese are often using apps in their smartphones everyday; apps include
social media, online newspapers, order transports, paying and so on. Thanks to that routine,
Gong Cha can promote their product and discounts to gain attention from the public. So, they can
increase the number of sales, revenue and get feedback from their product. Technology can be a
potential opportunity for Gong Cha to increase their revenue as well as their popularity. 

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e) Political forces

Vietnam and Hong Kong are strategically located at the heart of the Asian continent and both are
connected to each other by the border. Vietnam also has a strong trade relationship with Hong
Kong from consumable to industrial goods. As Vietnam has a high number of foreign talents in
food and beverages with lower labour cost, Gong Cha being small businesses will have an
advantage on this on it’s staffing. As the government supports and encourages staff upgrading
skills training and financial assistance for small medium enterprises, Gong Cha will definitely
have an advantage on this.

f) Culture forces

Many social and cultural changes are being seen in Vietnam which can have an impact on the
consumption of milk tea. Vietnamese usually like to save rather than spend money as Vietnam is
a developing country and characteristics have been formed long ago. As a result, this can affect a
lot of the Gong Cha business because a cup of Gong Cha may seem too expensive in the
perspective of Vietnamese people. 

2) The micro environment

a) Company

The company managed to recover consumer confidence and further expanded in various
countries, such as Macau, South Korea, New Zealand, Australia, Singapore, Malaysia, China,
Canada, the United States, the Philippines, Myanmar, Vietnam, Japan, Brunei, and the United
Kingdom. Also, Gong Cha first showing up in District 1, Ho Chi Minh City, Vietnam on 10th
Nov 2014 by CEO Nguyen Hoai Thuong (Gong Cha Vietnam Company). Until now, Gong Cha
has a total of 49 stores in Vietnam, which states it is objective to compete for the Vietnamese
bubble tea market share, and also stated its mission to build a strong relationship between milk
tea lovers in Vietnam.

b) Suppliers 

Company Gong Cha has self-sufficient supply, so they will not risk it. However, because the
supply is located in China, the process of distributing the supply may be difficult in some
situations.

c) Marketing intermediaries

Gong Cha are using both direct and indirect channels for their products. They have their own
store, and they also cooperate with physical distribution firms agencies, so they can sell their
products in any place in Vietnam. Furthermore, the advantage of using an indirect channel is that

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it doesn’t require sales personnel to be present at the market opposite. However, the direct
channel consumer can enjoy the modern environment after the consumer collects their drink.

d) Competitors

Gong Cha has several competitors in Vietnam like Koi, TocoToco, Tiger Sugar and so on. But
they have been able to differentiate themselves among them because of their quality and price
range. 

e) Publics

Gong Cha in Vietnam has been gaining a lot of attention from media publics and local publics
groups in Vietnam. In the media, Gong Cha is mentioned with the milk tea brand that has a high
quality of raw material. Gong Cha commented that they have many friendly staff but there are
also many complaints about the staff attitude by the locals. Gong Cha will still be one of the
choice brands in Vietnam.

f) Customers

The sweet lover consumer in Vietnam is the main customers of Gong Cha milk tea. Since they
prefer the milk foam, pudding, black pearl and their tea, Gong Cha has a strong potential to catch
the market.  

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III. SWOT Analysis:

Even though Gong Cha has its strengths and builds strong positioning in Vietnam Bubble Tea
market, they still have weaknesses, and also many highlight factors that can threat to Gong Cha’s
development. The followings are their strengths, weaknesses, threats and opportunities.

Strengths Weaknesses
S1. Gong Cha is a Taiwanese brand, and W1. Gong Cha consumes a large number of
Taiwan is the home of bubble tea plastic glasses.
S2. Good quality tea and peals with friendly W2. Gong Cha has a relatively low level of
customer service differentiation (compared with other
S3. The company has a good reputation brands: Ding Tea, Toco Toco…)
S4. Gong Cha’s brand specialty: Special W3. Lack of variety in flavor
Home
S5. Gong Cha’s policy promotes creativity
and strives for product innovation (Gong
Cha changes and nonstop adding new
products throughout the year)

Opportunities
O1. The stores always cooperate with
factory outlet: clothes shop or in mall to
gain a huge number of consumers.
O2. Viet Nam is a crowded nation, and it
has a young population
O3. The Bubble Tea’s fever is heating up in
developed countries like the US and Japan
including the third world countries like
Vietnam and Indonesia
Threats
T1. Highly comparative beverage.
T2. Beverage store with a concept in the
market that producing a lot of nutritious
drinks for people instead of sugar or milk
mix drink.
T3. Many new brands show up
T4. The image of Gong Cha may be affected
by people’s opinions on social network such
as Facebook, Instagram and Twitter.

IV. Segmentation, Targeting, Differentiating, Positioning

1) Segmentation:

Age People aged People aged People aged People aged

Segment 18 - 24 25 - 34 35 - 44 Over 44
Geographic Country Viet Nam
characteristic Country region Southeast Asia
Demographic Gender Male, Female
characteristic Family size 1–5
Income Average 2.985 USD/people/year
Generation Generation Y Generation Y Generation Y Generation X,

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Generation X Baby boomer

Psychographic Social class Working class Working class Middle class Lower upper
characteristic Middle class Middle class Upper middle Upper upper
Lower upper

Lifestyle Tend to prefer Pay attention Prefer healthy Great concerns

to use foreign to quality and food products about health and
product brand. with known food safety
Follow latest Eating and origin enjoy healthy
trends drinking high- Purchase food lifestyle
quality food. from stores
instead of
street vendors

Personality Dynamic, Confident, Cautious, Cautious,

confident creative polite tactful,
dependable
Behavioural Occasion Regular occasion
characteristic Benefit Tasty and Tasty, Tasty,
convenient convenient and convenient and
bubble tea healthy healthy
product
User status Regular user Regular user Potential user Potential user
Attitude towards Enjoyable, Positive Positive Inconvenient
products Interested, Negative
Convenient

2) Targeting:
 After segmenting the market, Gong Cha decides to focus on two particular groups:

+ 18-24: extrovert, like to use foreign goods. Especially in the field of drinks, they really like
milk tea but Taiwan is the cradle of milk tea and gong cha has originated from Taiwan so people
are more and more appreciated and appreciated.
+ 25-34: people are quite fond of this drink but consume less than 18-24 ages. However, both
groups are students and workers so Gong cha has extra offers to sell so it is very convenient for
students and extremely busy with office work. Therefore, Gong Cha is focusing more on these
two age groups than the others, and they choose the differentiated strategy. Gong cha is trying to
prove it very convenient because:
- Gong Cha's product allows people to save more time because of modern machine time
supporting experienced staff.

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- The consumer can make it easier to use products because the Gongcha's product packet is very
tight and secure.

 Also, people of these 2 groups are in different social classes where Gongcha's price is
suitable for almost all classes. Therefore, people can buy and use without having to worry
about prices too much
3) Differentiation:

Gongcha has become a milk tea brand known for having clean and high quality ingredients and
creating products that can only be found in gong cha and it has a special name is Gongcha
special house. This great success relies on appropriate strategies to differentiate Gongcha
products

a) Product:

According to Gong Cha's website, Gong Cha house special is the only product that can only be
found in Gong Cha with exclusive ingredients that make drinks based on 3 criteria: healthier
choice, a long history, the unit. Because, these products are the premise for the following
products to create a line of products with create the favor of preservation and smooth product.

Gong Cha illustrates that all products are less than 120 calories per product. Therefore, it will
make it easier to drink and feel the taste of milk tea and not be affected by other factors such as
anxiety about calories being too sweet, etc.

b) Service:

Gong cha website updates information about the chain of events and has specific notices to apply
promotions and sale codes. Depending on the country, there will be separate offers for
membership. On the Gong Cha websites of each country, they will always send hotline numbers
and emails to customers to send feedback or answer questions about problems that customers
encounter at the store.

c) People:

Most of Gong Cha's staff are young and well trained and are also available to learn and develop
technique skills. Moreover, they are always creative and inspiring to develop new products as
well as good solutions to improve customer service.

d) Channel:

Gong Cha Company has rights to over 1500 stores in 20 regions of the world (Macau, South
Korea, New Zealand, Australia ...) and has 49 stores in Vietnam within 14 years. They have
more than 50,000 staffs and managers.

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e) Gong cha images:

+ Cooperating with fast shipping companies.

+ Regularly create promotions (especially every Wednesday)

+ Cooperating with celebrities like My Tam and Park Seo Joon to become brand ambassadors.

+ Open stores across the country to expand the image.

While each strategy of differentiation has its impact on the development of Gong Cha, the
product strategy is the strongest method; gong cha focuses on developing supply not only for
convenience but also for the quality and taste of the products. As a result, a quality of Gong
Cha's product is the key to the success of Gong Cha company because customer of always
compare the taste and the quality of difference kind of Gong Cha's product before deciding to
buy or not.

4) Positioning:
a) Positioning map

In terms of price, the drinks of Gong Cha, Toco Toco and KOI have the same prices, there is no
significant difference. Gong Cha's products are priced from VND 33,000 to VND 64,000,
followed by Toco Toco with prices ranging from VND 29,000 to VND 52,000, and finally KOI
with prices ranging from VND 27,000 to VND 60,000. Based on the above information, it is
shown that all three brands are aimed primarily at young customers, suitable for all pockets.
However, considering the number of stores in Vietnam, Toco Toco is the brand with the most
stores with 300 branches covering the whole country of Vietnam, followed by Gong Cha with 49
stores, at the end, KOI with 28 branches nationwide. In addition, each milk tea company has its
own advantages to attract customers as Gong Cha has a pleasant sweet milk tea flavor and a soft,
fat aromatic milk foam in the mouth when drinking. Besides, the friendly, quick service attitude
also contributes significantly to the success of this brand. As for KOI milk tea, their products are
not too bold and have only a faint aroma, but extremely attractive and addictive. Moreover, Koi
also pleased their customers when the "gods" are chosen road and rock mode according to their
preferences. Finally, Toco Toco Milk Tea Company is a brand that cares and carefully researches
the taste and culinary culture of each region. Therefore, this brand of milk tea has launched a
very diverse menu, delicious flavor suitable for each specific region.

b) Value preposition

Gong Cha is a brand that offers flavored products that bring distinct colors and creates its own
brand with an average price of 33,000VND to 64,000VND, Gong Cha has brought quality
products that are rated The price is very high in the milk tea market with the proof that in 2017,

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Gong Cha only had 16 stores (the table below) but since 2017, it has grown and expanded with
49 stores.

V. Conclusion

In conclusion, this article gives people an overview of how and marketing strategy of gongcha.
The article covers the brand, product, SWOT, macro-micro environment, market segments that
the manufacturer targets. The strength of this report is the marketing principles that Gongcha
uses to promote titles to the market. The article details Gongcha's marketing strategies as well as
Gongcha's success after applying the marketing strategy. However, the article should outline
Gongcha's future plans for new marketing areas such as digital marketing, social media, public
relations, etc. This research article is very useful because it helps us see how, as well as
Gongcha's marketing strategy, to bring huge revenue as well as their influence on the world. It
should be remembered that this analysis is limited: further understanding and evaluation can only
occur when using other resources such as comparing with budget forecasts and reporting changes
in the financial situation. At the time we took the data, the company didn't have clear plans for
the future because it was just an article from a newspaper so their marketing strategy could be
renewed. In this case, the importance of understanding consumer behavior should be at the
forefront. There are many factors that influence consumer and business behavior so it is
important to use popular buyer patterns in your marketing campaign. Gongcha has succeeded in
marketing and promoting its products to regions around the world through distributions.

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VI. Reference list:

About us - Gong cha. (2020). Retrieved 12 March 2020, from

https://gongchatea.com.au/about-us/

Brand story - Gong Cha (Singapore). (2020). Retrieved 12 March 2020, from:
http://www.gong-cha-sg.com/about-us/brand-story/

bubbleteaboy, V. (2020). Gong Cha. Retrieved 12 March 2020, from:

https://thatbubbleteablog.wordpress.com/2018/12/01/gongcha/?
fbclid=IwAR0muUz2aUuSdyXJFVyzT8so1QEOvTtr0MVdM-BL2zkxQud7XMcBDlpg2bM

Linh, M. (2020). HÉ LỘ 10 THƯƠNG HIỆU TRÀ SỮA ĐƯỢC YÊU THÍCH TẠI VIỆT NAM.
Retrieved 12 March 2020, from
https://blog.maybanhang.net/10-thuong-hieu-tra-sua-duoc-yeu-thich-tai-viet-nam

Menu hiện tại Archives - Gong cha Vietnam. (2020). Retrieved 12 March 2020, from
https://gongcha.com.vn/en/danh-muc/menu-hien-tai/

Milk tea (bubble tea) trend in Vietnam. (2020). Retrieved 12 March 2020, from
https://www.slideshare.net/asiaplus_inc/milk-tea-bubble-tea-trend-in-vietnam

Retrieved 12 March 2020, from:

https://www.academia.edu/35426390/Gong_Cha?auto=download

ToCoToCo Menu. (2020). Retrieved 12 March 2020, from:

https://tocotocotea.com/pages/collection-all

Vietnam Demographics Profile 2019. (2020). Retrieved 12 March 2020, from

<https://www.indexmundi.com/vietnam/demographics_profile.html?
fbclid=IwAR13lmZh3wYtHEPqGBT8PGnpKV4PGz6NFkAwaGgd4wMZeaeu4ElkUyHX8ic>

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貢茶茶飲連鎖加盟事業. (2020). Retrieved 12 March 2020, from

https://web.archive.org/web/20130206213915/http://www.gong-cha.com/en/prod.php?no=9

貢茶茶飲連鎖加盟事業. (2020). Retrieved 12 March 2020, from

https://web.archive.org/web/20150412174851/http://www.gong-cha.com/news.php?
act=view&no=130

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