TABLE OF CONTENTS

1. OVERVIEW OF THE MARKET ..............................................................................................

2

2. COMPETITORS .........................................................................................................................
3

2.1. Competitors (KFC) ..............................................................................................................

3

2.2. SWOT Analysis of KFC ......................................................................................................

3

3. THE SWOT ANALYSIS OF YOUR PRODUCT/SERVICE ..................................................

5

3.1. McDonald’s Target Market Profile ......................................................................................

5

3.2. SWOT Analysis of McDonald’s ..........................................................................................

6

4. THE RESEARCH OBJECTIVE(S) ..........................................................................................

8

5. LIST THEORIES TO ANSWER THE RESEARCH OBJECTIVES .......................................

9

6. FOCUS GROUP .....................................................................................................................

10

6.1. Profile of The Interviewees ................................................................................................

10

6.2. Discussion Guide ...............................................................................................................

11

7. DATA ANALYSIS .................................................................................................................

14

7.1. Analysis Method ................................................................................................................

14
 7.2. Key findings

....................................................................................................................... 14

1 Consumers’ overall perception and behaviour concerning fast food .......................... 14

2 Consumers’ Perception of McDonald’s ...................................................................... 15

8. RECOMMENDATION/ACTION TO BE TAKEN FOR THE BRAND ...............................

18

9. LIMITATION .........................................................................................................................
20

10. REFERENCES ....................................................................................................................... 21

11. APPENDIX .............................................................................................................................

23

1. OVERVIEW OF THE MARKET

Behind the remarkable development of the Food and Beverage (FnB) industry in
Vietnam are characteristics of economic and cultural factors such as the “dining out” culture and
“drinking” culture. Instead of having breakfast at home, Vietnamese customers often favour
having a quick and convenient breakfast on their way to work, and the same goes for lunch and
possibly even dinner as well. Depending on the region and culture, each place will have its own
strengths in the
FnB industry. Since the taste, affordability, speed, and quality are the Vietnamese’s
superior criteria, fast food and junk food are becoming more and more popular and preferable,
and their main target is the youth community like students, adolescents, and undergraduates,
those who prioritize saving time by eating out over spending time cooking at home.

In 2014, when McDonald’s officially launched its first establishment in Ho Chi Minh
City in Vietnam, this ‘Big Brother’ caused a big heat in the Vietnam fast-food service market.
Years later after its debut, McDonald's, however, has only around 22 outlets in this entire
country. Although

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 McDonald’s has shown such great
ambition when entering Vietnam, this
fast-food chain is not growing as strongly as expected in this market, and the changing eating
habits with health and fitness being prefered than convenience is indicated as one of the common
barriers. If in a foreign country, fast food is inherently reserved for those with little time and
money, in Vietnam, in contrast, using fast food is quite time-consuming and expensive compared
to Vietnamese food. "Not fast enough" and the expensiveness by using imported ingredients are
the two main reasons that McDonald’s struggles with competition in Vietnam.

2. COMPETITORS

2.1. Competitors (KFC)

Entering into the Vietnam market is such a challenge to McDonald’s not only because
of the market itself but also its potential competitors. Compared with other competitors, such as
KFC,
Lotteria and Jollibee, McDonald’s entered into the Vietnam market quite late, in 2014.
Whereas, KFC chose Vietnam as a destination in 1997 and Lotteria was one year later.
Therefore, they already have their own customers and now are the leading fast-food brands in the
Vietnam market. Being the top names in the fast-food market share, KFC and Lotteria are
leading the market with 2019 revenue of VND 1,498 billion and VND 1,683 billion, respectively.

Besides these brands, which are all foreign brands of the Vietnam market, McDonald’s
also has to face the Vietnamese fast food business. These Vietnamese cuisines are offered at a
more affordable price and can easily be accessed. If McDonald’s is called fast food, Banh mi or
‘Xoi’ - the
Vietnamese cuisine will be considered as ‘flash food’. Moreover, plenty of Vietnamese
fast food businesses have been capturing increasing market shares and increasingly expanded
chains.

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 2.2. SWOT Analysis of KFC

Being the first fast-food brand to set foot in the Vietnam market and quickly received a
glowing welcome from the Vietnamese, KFC is now the leading brand in the fast-food industry
of Vietnam.
Therefore, if McDonald’s wants to succeed in the Vietnam market, the most potential
competitor that it has to beat is KFC.

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 3. THE SWOT ANALYSIS OF
YOUR PRODUCT/SERVICE

3.1. McDonald’s Target Market Profile

According to John Dudovskiy, an author at Business Research Methodology, McDonald

focuses on 4 types of segmentation which are geographic, demographic, behavioural and
psychographic.
Under the geographic, its segmentation criteria are region and density. McDonald’s
target segment is urban and rural areas of both domestic and international. It established
franchises all over Vietnam, especially in the major city which has a high-density population.
The restaurant is decorated according to local culture. Moreover, the demographic targeted both
males and females between 8 and 45 years old. Not only that, it segments the customer into 3
life-cycle stages which are bachelor, newly married couples and full nest II (older, married with a
child). It also has different areas in the restaurant for families with children provided with large
tables. Occupation of the target segment including students, workers and professionals who have
low to middle income. Another type of targeting is behavioural segmentation. McDonald’s aims
for easygoing and careless personality, at the same time it is geared toward customers who are
seeking cost benefits and time efficiency. User status is potential and regular fast-food eaters.
The initial psychographic segmentation directed toward lower, working and middle social
classes. However, depending on the differences between nations, it may no longer be accurate.

3.2. SWOT Analysis of McDonald’s

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 4. THE RESEARCH OBJECTIVE(S)

First of all, the research aims to get insight into the main group of customers, who are
students from 18 to 22. Based on the focus group interview, the research can generalize the habit
of consuming fast food, brand perception and tendency in making decisions.

Additionally, the research will come up with solutions and suggestions to enhance the
position of McDonald's in Vietnam.

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 5. LIST THEORIES TO ANSWER
THE RESEARCH OBJECTIVES

To meet the requirements of the research objectives, the following theories are used:
• Situational Influence: Anticipating the factors affecting customers’ decision to find ways
to minimize their impacts.
• Attitude: As people often hold negative attitudes toward fast food, it is important to build
a positive brand image.
• Consumers’ Perception: This theory includes products, price, place, service, and other
perceptions which will affect the final decision. As we analyze it, we can find ways to
change their decisions.
• Cross-cultural Variations: McDonald’s is a multinational company, and it adapts itself to
each country’s culture. This is one of the brand’s strengths.
• Decision-making Process: Although it is complicated, we can implement strategies to
change each stage.
• Reference Group: Customers’ decision can be affected by people around them like
friends, family, idols, ... Having known that, we can give out suitable marketing strategies
to spread positive feedback.

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 6. FOCUS GROUP

Demographic information on the eight interviewees who participated in the focus group
interviews from the International School of Business - University of Economics Ho Chi Minh
City (ISBUEH), Vietnam. Of the 3 respondents (37%) were male and 5 respondents (63%) were
female.

All the participants were chosen in different classes/majors and living lifestyles. The
team was divided to conduct interviews in two different parts, one moderator, note-takers and
eight interviewees in total - one group will be conducted in Vietnamese and another group in
English. The focus group interviews were audio-recorded and note taking included. Before the
interview, our group had well-prepared questionnaires/discussion guides which were designed
according to
Ms Phuong’s guidelines. The interview was 60-80 minutes long according to the
discussion guide.

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6.2. Discussion Guide

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 7. DATA ANALYSIS

7.1. Analysis Method

Our group first took note and recorded the interview with permission and translated
them into English if needed. Then, we chose only the answers that were related to the questions
and generally to the research objective to code them and arrange them into potential themes to
analyse. The results of this analysis are presented and discussed in the subsequent section.

7.2. Key findings

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 7.2.1. Consumers’ overall perception and behaviour concerning fast food

Most of the respondents were trying to maintain or at least adapt to a healthier lifestyle,
so eating fast food was a once-in-a-while story to them. Moreover, these students still depended
on their parents financially so when it came to premium fast food as compared to local vendors,
they became price-conscious and pointed out local vending options and self-cooking to be part of
their daily life. Another factor mentioned was that the number of fast-food restaurants was
outnumbered by local food stalls, to which customers could gain more and faster access
whenever they wavered in a food choice. Despite the aforementioned perspective, all participants
did experience fast food before but most of them perceived it as something of the same taste
regardless of brands. Therefore, most interviewees only spent money on fast food when receiving
generous discounts and/or being affected by members of reference groups (friends, family, etc.).
These people would discuss and determine the price, taste, and location, etc. of the fast-food
brand that they found most appealing on such occasions. They were deemed not loyal to any
brands.

7.2.2. Consumers’ Perception of McDonald’s

Out of eight people in the interview, seven already tried McDonald’s. These seven
people used to go to McDonald’s because they were affected by a reference group (their friends)
and liked the taste of McDonald’s. The other one answered based on her knowledge about the
brand.

The expensive price was agreed on by all participants (100%), and most of them were
not willing to pay for it when eating out alone. Most interviewees would only be willing to use
McDonald’s on special occasions with other friends or family members only if McDonald’s had
offered huge discounts as compared to other brands. Unfortunately, McDonald’s did not

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according to the claim of five participants (62.5%), leading to their directing food choices to
other brands. The other three, however, still chose McDonald’s because they did not care much
about the price (because of their financial capability) but about how their social status could be
associated with this premium restaurant.

When it comes to taste, most of the respondents including who did and did not try
McDonald’s once (62.5%) thought that it was not much different from other brands and they
would pay more attention to the price and follow the flow of the reference group they were to eat
out with on that particular occasion. Of the rest who already ate McDonald’s, they kept coming
back to
McDonald’s because they liked its chicken although one person thought it was not as
good as the KFC and Lotteria. When asked about ‘Burger Pho’, one of McDonald’s attempts to
localise the menu for Vietnamese customers, 87.5% of all interviewees refused to try because it
was not worth their money.

During the interview, participants also claimed that they sometimes or rarely saw
McDonald’s stores in their day-to-day operations as compared to KFC or Lotteria. During their
daily life, they preferred something more accessible like convenience stores and local food with a
variety of stores and choices at rock-bottom prices.
Table 5:​ Factors influencing consumers’ perception of McDonald’s

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 In conclusion, most interviewees are price-conscious, healthy-lifestyle-oriented and
affected by the reference groups when it comes to the choice of premium fast-food chains,
especially McDonald’s although some ignore those factors and keep coming thanks to
McDonald’s original taste, not the culturally-adapted dishes. Moreover, fast food is chosen on
special occasions with their friends and family only while their daily choice will be something
more accessible, convenient and affordable from the local food market and convenience stores.

8. RECOMMENDATION/ACTION TO BE TAKEN FOR THE BRAND

From what has been analyzed above, some of the recommendations are given for
McDonald’s to become more successful in the Vietnam market.

1.​ ​Change the perception of fast food price:

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 McDonald's should have strategies to increase the value of the brand instead of reducing the
prices which may decrease their reputation. By pointing out or showing that McDonald's is worth
it, the brand can, for instance, be able to show consumers that they have the best quality
ingredients, best skill or unique technique for creating dishes. ​2. ​Create attractive price, logical
dishes for a pack of combo:
Vietnamese youth prefer to eat combos with the number and variety of dishes in
those combos, the purpose of which can be chosen to buy and eat with friends and family.
Brand image can show that McDonald's is a fun, happy place and friendship, love, and the
menu design for the combo also needs to change to be more suitable at a reasonable price.
3.​ ​Brings the McDonald near to more consumers, especially youth
Open or change outlets near the big and famous university or create food trucks on
the street near the school or any location that has many students, youth such as
entertainment park or university, high school and selling their products.
4.​ ​Come up with other strategies to increase their regular product purchases.
The recommendation is that McDonald's fast food also needs to change the purpose
of its products. The brand can design or create more dishes to suit their breakfast, lunch, and
dinner needs, as well as be reasonable, affordable and advertise how healthy McDonald's
gives to the consumers in each meal. The physical surroundings also need to be focused
such as music with a fun and happy appeal, and especially the smell in the store (reducing
the smell of fried oil, increasing the aroma of freshness), and a clean, spacious place (also
displayed for highend, modern brands).
5.​ ​Change the products according to the trend of youth
Youth now concentrate more on green consumption and healthy food that they
would prefer to become knowledgeable students and want to be recognized as a trendy
person who always keeps up with the green consumer trend and eating healthy habits.
Therefore, McDonald’s should have strategies in building a brand image of green
consumption with recyclable packaging, a glass of water and bee hut. Besides, the company

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should create and build dishes which contain healthy ingredients and concentrate on
advertising these. This also helps the brand to be more valuable.

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 9. LIMITATION

This group project has some potential limitations. The sample size was 8 students and
all of them are ISB students. The sample size was not large enough that it will be difficult to find
significant relationships from the data; thus, this report should not be considered as
representative of the
Vietnamese youth’s behaviour group in the fast-food market. Besides, the length of the
interview with the focus only around 50 minutes to collect data for analysis. Therefore, the lack
of data or not reliable data cannot be avoided. To reduce these potential limitations, there should
be more research reports or surveys with more reliable data, the large sample size also required.

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 10. REFERENCES

Dudovskiy, J. (2016). McDonald’s Segmentation, Targeting and Positioning. Business Research

Methodology. Retrieved from:
<​https://research-methodology.net/mcdonalds-segmentation-targeting-and-positio
ning/​>

Farooq, U. (2019). SWOT Analysis of KFC. Marketing Tutor.Net. Retrieved from:

<​https://www.marketingtutor.net/swot-analysis-of-kfc/​>

KFC. (2020). Vietnam KFC’s story. KFC official website page. Retrieved from:
<​https://kfcvietnam.com.vn/en/about-us.html​>

Lotteria. (2020). Lotteria’s story. Lotteria official website

page. Retrieved from: ​<​https://www.lotteria.vn/lotteria-story​>

McDonald’s. (2020). About McDonald's Vietnam. McDonald's official website page. Retrieved
from:
<​https://mcdonalds.vn/mcdonalds-introduction​>

Quy, N. (2020). KFC most favored fast-food chain in Vietnam: Survey. VNExpress
International.
Retrieved from:
<​https://e.vnexpress.net/news/business/data-speaks/kfc-most-favored-fast-food-ch
ain-invietnam-survey-4153820.html​>

Singh, K. (2019). SWOT Analysis of McDonald’s. MarketingArk.com. Retrieved from:

<​https://www.marketingark.com/mcdonalds-swot-analysis.html​>

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Tien, N.H., Dana, L.P., Jose, R.J.S., Dat, N.V. & Duc, P.M. (2020). Analysis of McDonalds’
entry into Vietnam Market. Research Gate. Retrieved from:
<​https://www.researchgate.net/publication/342623916_Analysis_of_McDonalds'_
entry_str ategy_into_Vietnam_market​>

WARC. (2020). KFC leads in Vietnam but fast food growth slows. Retrieved from:
<​https://www.warc.com/newsandopinion/news/kfc-leads-in-vietnam-but-fast-food
-growthslows/44041​>

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 11. APPENDIX

5 Steps to Plan the Marketing Research

Business or What is the current situation of the business, the brand, or marketing
marketing performance?
background This research is a McDonald’s launch in Vietnam. McDonald’s is one of the
American well-known fast-food brands. Despite its success in Western
markets, McDonald’s does not get much appeal in Vietnam. Up to 2020,
McDonald’s has only 22 branches all over Vietnam.
More competitors:
• Other fast-food brands: Jollibee, Lotteria, etc.
• Local food stores
McDonald’s has significantly dropped its sales

Define problem • Problem: difficulty in entering the Vietnamese market

or action to be • Action needed: uplift sales and raise brand recognition
taken

Define • McDonald’s current situation

information
needs • What are other competitors doing? Setting up more promotion? New
products?
• How is the sale rate or performance of the McDonald’s product (now
and before)?
• Behaviours of past consumers and current consumer
• Information about the product's advertising budget comparison with
past years
• Research on Vietnamese food gout and cuisine culture

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List out detailed • Are you currently eating at McDonald’s?
questions to be
explored • What do you like or dislike about its foods? Why?
• How can we improve the product? In terms of quality, packaging,
design, or price, etc.
• Why do you think McDonald’s cannot compete with other brands?
• Why do you switch to other fast food brands?
• What is your expectation for a fast food store?

Define your Focus groups will be selectively chosen from youth (15-20), office staff and
target nuclear families who ate and are currently eating at McDonald’s stores. The
respondents fast-food category targets youth aged from 15-20 because this demographic
often chooses fast food for their hanging out meetings. Office staff also
order it for meals. Nuclear families which have kids are likely to come to
fast-food stores for eating out.

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