VAN LANG UNIVERSITY

FACULTY OF PUBLIC RELATIONS AND COMMUNICATION



MID-TERM EXAM
COURSE: PRINCIPLES OF MARKETING
TOPIC: MARKETING STRATEGY OF PHUC LONG
COURSE CODE: 223_72MARK30282_01

THE INSTRUCTOR’S NAME: TRAN QUANG THIEN

Academic year: 2022 – 2026

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TABLE OF CONTENTS
CHAPTER 1: ABOUT PHUC LONG................................................................................2
1.1 Brand’s History in VietNam................................................................................................................2
1.2 Market size........................................................................................................................................3
1.3 Recent performance trends...............................................................................................................4
CHAPTER 2: ANALYSIS OF MARKETING ENVIRONMENT.....................................4
2.1 Macro factors.....................................................................................................................................4
2.1.1 Cultural factors............................................................................................................................4
2.2 Micro factors......................................................................................................................................7
2.2.1 Marketing intermediaries...........................................................................................................7
CHAPTER 3: ANALYSIS OF THE TARGET MARKET AND CUSTOMERS
BEHAVIOR.........................................................................................................................9
3.1 Target market.....................................................................................................................................9
3.2 Customer behavior:.........................................................................................................................11
CHAPTER 4: BRAND POSITIONING............................................................................14
4.1 Positioning.......................................................................................................................................14
4.2 Competitive advantage....................................................................................................................15
4.3 Unique selling points (USP).............................................................................................................15
5.1 Three levels of product................................................................................................15
5.1.1 Core customer value.................................................................................................................15
5.1.2 Actual product:.........................................................................................................................15
5.2 Product & service decisions.............................................................................................................16
5.2.1 Product attribute......................................................................................................................16
5.2.2 Branding....................................................................................................................................16
5.2.3 Packaging..................................................................................................................................17
5.2.4 Labeling.....................................................................................................................................17
5.3 Product mix decisions......................................................................................................................18
References..........................................................................................................................20
Image sources....................................................................................................................21
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DECLARATION AND STATEMENT OF AUTHORSHIP

Student’s name: Nguyen Dinh Cat Tuong

Class: 223_72MARK30282_01 Student ID: 2273201081992

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CHAPTER 1: ABOUT PHUC LONG

1.1 Brand’s History in VietNam
Phuc Long was born in 1968 with a family model, selling only tea and coffee. In 2000,
Phuc Long Trading Production Company Limited was established. And in 2012, Phuc
Long officially expanded into the food and beverage industry with its first self-service
store, marking a strong transformation. By the end of 2022, Phuc Long's stores have
grown to 132, including flagship stores and mini stores (excluding kiosks). With more
than 50 years of establishment and development, Phuc Long has become one of the
leading brands in Vietnam's tea and coffee industry and has always been a pioneer in
quality products.
1.2 Market size

Table 1.1 The scale of large coffee chains across the country (Source: cukcuk.vn)
Market coverage is significantly increased by kiosk models located at Winmart stores
nationwide. By the end of June 2022, Phuc Long owned up to 971 kiosks, reaching
millions of customers. Thanks to this model along with the opening of 44 new flagship
stores, Phuc Long achieved 1,579 billion VND in revenue and 195 billion VND in profit
before interest, taxes, depreciation and amortization (EBITDA) (according to Masan
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Group's annual business report in 2022). In addition to conquering the F&B market, Phuc
Long also aims to conquer the home consumption market by leveraging its packaged tea
products. Home tea consumption (packaged and instant tea) is forecast to reach a market
size of approximately $2.3 billion by 2027.
Also according to the business report of Masan Group in 2022, Phuc Long is expected to
become the No. 2 company in the F&B market in terms of the number of stores by 2023.
Phuc Long's expected revenue in 2023 is 2,500 billion VND to 3,000 billion VND, an
increase of 58% to 90% compared to 2022.
1.3 Recent performance trends
Although in the last 6 months of 2022, Phuc Long had to close 150 kiosks due to poor
performance, in general, the brand tends to expand when opening 44 more flagship stores
by 2022 and aiming to open 90 more stores by 2023. Notably, the brand has shifted to a
higher customer segment with the opening of the Phuc Long Premium store in September
2022. Not stopping at the Vietnamese market, in July 2021, Phuc Long opened its first
store in the USA, marking a big step forward in its journey to the world.
CHAPTER 2: ANALYSIS OF MARKETING ENVIRONMENT
2.1 Macro factors
2.1.1 Cultural factors
Vietnamese people are known to have a long tradition of drinking tea and coffee.
Seizing the opportunity, Phuc Long focuses on developing the brand's tea and coffee
quality. The brand has a supply from Thai Nguyen and Bao Loc, which also helps
Phuc Long's Tea target the habit of using local products and win the public's trust
from the very first day.
Phuc Long also knows how to seize the opportunity to change its style to suit each
region's culture.
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Picture 2.1 Phuc Long Hoi An (Source: Phuc Long Coffee & Tea Facebook)
When coming to Hoi An City, Phuc Long changed the store's appearance to match
the ancient atmosphere here.

Picture 2.2 Tipping machines at Phuc Long USA (Source: Khoa Pug Youtube
Channel)
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The unique feature of Phuc Long in the USA compared to Vietnam is that the store is
equipped with a machine at the cashier for customers to choose the amount of tip
they want, adapting to the tipping culture there.
2.1.2 Economic factors

Table 2.1 Average GDP of Vietnam in the period 2000 – 2022 (Source: Ban Kinh Tế
Trung Ương)
The line graph shows that Vietnam's GDP had a steady increase in recent years.
Especially, it grew sharply in 2022. Entering the year 2023, GDP in the first 6 months
increased by 3.72%. Inflation is below 4% over the past 7 years (2015-2022). Creating
a good premise to maintain CPI below 4.5% in 2023. These positive figures about
Vietnam's economic situation are beneficial to Phuc Long's operations, as customers
can consume more and the company can expand its production scale to meet
consumption needs.
2.2 Micro factors
2.2.1 Marketing intermediaries
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In terms of financial intermediaries, from 2021 until now, Masan has owned 85% of
Phuc Long's shares, making it the mother company of Phuc Long. A kiosk model
was developed, placed in Masan's Wincomerce system. As of mid-July 2022, they
own up to 981 kiosks. Although the results were not as expected and Masan said they
are adjusting this model in 2023 before expanding but this has given Phuc Long
many opportunities in marketing intermediaries.
Moreover, Phuc Long also distributes products at supermarkets and shopping centers
such as Lotte Mart, Co.opmart, Vincom, etc. And is available on food delivery
applications such as Shopee Food, Grab Food, Baemin,...
2.2.2 Competitors
a. Direct competitors

Table 2.2 Most favorite brand in March 2023 by Q&Me (Source: brandsvietnam.com)
The chart shows that besides Phuc Long, the top 3 most popular brands, as well as the
formidable direct competitors of the brand are: Highlands, The Coffee House and
Starbucks:
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- Highlands Coffee: As of May 2023, the brand owns 635 stores. A large number of
stores, prime locations, and diverse products are factors that help Highlands to gain high
profits. As same as Phuc Long, Highlands also serves Banh Mi Vietnam in addition to
drinks and cakes but with more options for customers, making Banh Mi Highlands more
stand out. In addition, Highlands takes traditional filter coffee as the brand's signature,
conquering many customers with the taste of Vietnamese coffee.

- The Coffee House: The brand has a good quality product but at a price that is suitable
for the masses. Not only that, after merging the coffee division of Cau Dat Farm, The
Coffee House officially operated its own farm in Cau Dat - the golden strip of Arabica
coffee beans, in order to provide clean and quality coffee products.

- Starbucks: As a multinational coffee chain, the biggest strength of Starbucks is having a

very strong brand positioning. The brand has a unique way of serving that responds to the
individual preferences of customers by allowing them to customize the ingredients in
their drinks. Starbucks also has ingredients such as organic soy milk, fat-free milk,
coconut milk, and almond milk, which is suitable for people who care about health.

b. Indirect competitors:

Indirect competitors can be mentioned as substitute products such as carbonated drinks

(Coca-cola, 7UP, Fanta,...), teas (Wonderfarm squash tea, Oolong Tea+ Plus, Lipton
tea,...), coffees (G7 instant coffee, Nescafé,...). In addition, competition also comes from
sidewalk coffee sellers, private coffee and milk tea shops.

CHAPTER 3: ANALYSIS OF THE TARGET MARKET AND CUSTOMERS

BEHAVIOR
3.1 Target market
Two remarkable segments defined by Phuc Long are segmentation based on
demographics and occasion.
- Demographics:
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Age: 16 – 50
Generation: Gen Y (1981-1996) and Gen Z (1997 – 2015)
Occupation: Businessman, students, freelancers
Sex: Both male and female
Income: Middle-income people
- Occasions:
As a brand of Vietnamese origin, Phuc Long chooses the segment on the occasion of the
Mid-Autumn Festival - a traditional holiday in Vietnam. Moon cakes with unique,
diverse fillings and colorful designs have attracted the attention of many customers at
every Mid-Autumn Festival. Mooncake products are sold more than 2 months before the
holiday.

Pictue 3.1 Moon cakea at Phuc Long store

Recently, taking advantage of the hot summer weather, Phuc Long has launched two new
collections with the theme "Dao Cam Thanh Mat" and "Refreshing Longan" with six
types of drinks belonging to the three groups: tea, milk tea and ice blended.
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Picture 3.2 The “Dao Cam Thanh Mat” collection advertised at the Phuc Long store
3.2 Customer behavior:

The information below is based on a study of 155 customers at Phuc Long Coffee & Tea
Au Co – Address: 681 Au Co, Tan Thanh Ward, Tan Phu District, Ho Chi Minh City.
The survey was conducted over a period of nearly 3 weeks.

Gender: 90 female (58.1%), 63 male (40.6%) and the remaining 1.3% do not want to
reveal their gender.

Age: 87 customers aged between 18 - 29 (56.1%), 41 customers aged under 18 (26.5%)

and 20 people in the age of 30 - 40 years old (12.9%), the remaining customers are over
the age of 40.
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7 AM – 10 AM

11 AM – 2 PM

3 PM – 6 PM

7 PM – 10 PM

Table 3.1 Customer's arrival time

Statistics show that 41 customers come to Phuc Long at 11 AM – 2 PM (26.5%) and 52
customers come here around 3 PM – 6 PM (33.5%). The rest are 7 AM – 10 AM and 7
PM – 10 PM respectively with 21.3% and 18.7%.
Tea

Milk Tea

Coffee

Ice Blended

Table 3.2 Drinks of the most choice

Based on the data in the table, the most chosen drink is tea with 38.1%. Followed by milk
tea (29%). Other beverages accounted for 4.5% including yogurt, smoothies, and juices.

In tea drinks, the group of black tea accounted for the largest number with 26.5% thanks
to the best-seller Peach Black Tea. Next is Lucky Tea (20.3%). About the second favorite
drink is milk tea. Oolong Milk Tea holds the top position with the result of 33%. The
popularity of Phuc Long milk tea is only slightly inferior, with 32.2%.
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Study or work

Meet friends or partners

Enjoy food and drinks

Taking pictures

Table 3.3 Customer's purpose when coming to Phuc Long

There are 74 out of 155 customers (47.7%) come to Phuc Long to study or work, and 64
customers (41.3%) come here to meet their friends or partners. Only 13 customers (8.4%)
come here simply just to enjoy the drinks and food and 4 customers (2.6%) take pictures
to check-in.

About once a week

2 – 3 times a week
Less
More

Table 3.4 Frequency of customers coming to Phuc Long

Customers seem to be returning to Phuc Long quite often. Up to 62 customers (40%) said
they come to Phuc Long about once a week, 49 customers (31.6%) come here 2-3 times a
week and there are 6 customers (3.9%) coming here more often than that. The remaining
number of customers coming to Phuc Long less than once a week only accounted for
24.5%.
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1- 2 hours
3 – 4 hours
More than 5 hours
Less than 1 hours

Table 3.5 Customer’s staying time at Phuc Long

The period of time that customers stay at Phuc Long the most is 3-4 hours with 52.3%.
Customers staying for 1-2 hours accounted for 38.7%. Those who sit for more than 5
hours accounted for 5.2% These numbers show that Phuc Long can retain customers for a
relative amount of time. Only 3.9% of customers stay less than 1 hour.
The above survey is only conducted on a small scale and there will be a deviation when
compared to customers of the entire Phuc Long system. But through these figures, it is
possible that the basic behaviors and general trends of customers have been shown.
CHAPTER 4: BRAND POSITIONING
4.1 Positioning

High price

High quality
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Table 4.1 Positioning map

It can be seen on the positioning map above that Phuc Long has an affordable price
compared to other competitors such as Highlands Coffee, Starbucks, The Coffee House,...
With the slogan " A Passion for Quality", Phuc Long is committed to bringing customers
a quality experience. Building a position in the hearts of customers about high-quality,
pure Vietnamese tea, and bold flavor in their tea drinks.
4.2 Competitive advantage
Phuc Long has a great advantage in the supply source. The brand owns two tea hills and
production factories in Thai Nguyen and Bao Loc. In addition, Phuc Long also owns a
factory in Binh Duong, equipped with modern machinery, certified with HACCP (Hazard
Analysis and Critical Control Points). This helps Phuc Long reduce a lot of pressure on
suppliers, save production costs, always ensure product quality and easily gain the trust
of customers.
The support from the parent company Masan for Phuc Long - one of the three largest
private companies in Vietnam in terms of market capitalization - is also a great
advantage, opens up many potentials for Phuc Long in the field of food and beverages.
4.3 Unique selling points (USP)
The unique selling point of Phuc Long is the flavor of its drinks. Phuc Long always
brings a bold and distinctive tea flavor, making it different from the market, conquering
fastidious customers and tea connoisseurs.
CHAPTER 5: PRODUCT STRATEGY IN THE MARKETING MIX (4P)
5.1 Three levels of product
5.1.1 Core customer value
Satisfy customers' needs for refreshment, relaxation or alertness with coffee, tea and other
beverages. In addition, Phuc Long serves additional foods that help reduce appetite.
5.1.2 Actual product:
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Phuc Long offers its customers pure tea and coffee products. For the milk tea product
line, the characteristic acrid flavor is the highlight of the brand. Besides serving
beverages, Phuc Long also serves a wide variety of foods, from Banh Mi Phuc Long to
desserts. And although operating on a self-service model, Phuc Long still provides a very
enthusiastic staff. Finally, the appearance of simple but delicate packages is what makes
Phuc Long's products easily recognizable.
5.2 Product & service decisions
5.2.1 Product attribute
In terms of quality, the products are guaranteed to be food safety and hygiene. Their tea
and coffee products are made with 100% local ingredients. Phuc Long's products always
ensure the highest quality due to the production and supply by the company itself.
Therefore, features of the beverage products is not only for refreshment but also to give
people the best tea and coffee experience. In addition, the style and design of the products
are minimalist and modern, able to enter the hearts of customers effortlessly. These
factors have assisted with the increase in customers’ perceptions.
5.2.2 Branding

Picture 5.1 Phuc Long’s logo

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Phuc Long using 3 logos at the same time: the company’s logo, the store - Phuc Long
Coffee & Tea’s logo and an logo for packaged tea products. To be more specific about
the store logo, Phuc Long uses the image of a cup to illustrate both its main product lines,
tea and coffee and the dominant green color creates a feeling of freshness and friendliness
to the public. Whether it is the logo of the beverage product line or the packaged
products, the words “since 1986” are always present to remind of the long tradition of the
brand. As an original Vietnamese brand, up to now, Phuc Long has been likened to the
"king of tea" and always focuses on the quality of their product. Although the brand is
constantly innovating, Phuc Long still retains its traditional values.

5.2.3 Packaging

Picture 5.2 Packaging of Phuc Long’s products

Phuc Long’s drinks use two types of cups, paper and plastic. Paper cups are only used
specifically for Phuc Long's milk tea. Products are placed in transparent plastic bags if
purchased to take away. The brand uses paper wrapping for straws to be more
environmentally friendly. And about packaged tea products, they are packed into bags,
boxes, and cans.

5.2.4 Labeling
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5.3 The label of Phuc Long's cup

Beverages are designed to be as simple as possible with a solid background color, always
with the brand's logo placed above the product. On the body of the cup, there is a small
sticker with basic information such as the name of the drink, the type of cup (paper or
plastic), the size of the drink, etc. Especially for paper cups, the brand's website is added
and the three words "Please Recycle Me" is written on the side as a call of contributing to
environmental protection.
5.3 Product mix decisions
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Table 5.1 Product mix map

References
Tiếng Việt
(n.d.). Retrieved from https://phuclong.com.vn/ve-chung-toi
GDP bình quân Việt Nam năm 2000 xếp thứ 173/200 thế giới, năm 2022 thay đổi thế nào?
(2023, 4 4). Được truy lục từ kinhtetrunguong: https://kinhtetrunguong.vn/kinh-te/kinh-
tet-vi-mo/gdp-binh-quan-viet-nam-nam-2000-xep-thu-173-200-the-gioi-nam-2022-thay-
doi-the-nao-.html
H. D. (2023, 26 3). Mảnh ghép Phúc Long đang có vai trò gì trong hệ sinh thái tiêu dùng bán lẻ
của Masan Group? Được truy lục từ vietnambiz: https://vietnambiz.vn/gia-tri-khoan-dau-
tu-280-trieu-usd-cua-masan-group-de-thau-tom-chuoi-do-uong-phuc-long-
202332683142127.htm
N. Q. (2022, 8 3). Thị trường đồ uống trà & cà phê 2022: Phúc Long cùng Highlands Coffee bứt
tốc, The Coffee House và Trung Nguyên Legend chững lại. Được truy lục từ cafebiz:
https://cafebiz.vn/cuc-dien-chuoi-tra-ca-phe-2022-phuc-long-cung-highlands-coffee-but-toc-the-
coffee-house-va-trung-nguyen-legend-chung-lai-20220803130413448.chn
đầu thế giới. thesaigontimes, https://thesaigontimes.vn/bien-loi-nhuan-cua-chuoi-cua-hang-
flagship-phuc-long-thuoc-top-dau-the-gioi/.
T. H. (2023, 4 12). Highlands Coffee, Phúc Long, The Coffee House “kèn cựa” nhau trên chiến
trường F&B, thương hiệu nào được yêu thích nhất? Được truy lục từ brandsvietnam:
https://www.brandsvietnam.com/23605-Highlands-Coffee-Phuc-Long-The-Coffee-
House-ken-cua-nhau-tren-chien-truong-F-B-thuong-hieu-nao-duoc-yeu-thich-nhat
T. H. (2023, 2 10). Masan có "vỡ mộng" sau cuộc đua trend mở ồ ạt kiosk Phúc Long: Không
chỗ ngồi, menu đơn giản, khách hàng thờ ơ, biên lợi nhuận thấp? Được truy lục từ markettimes:
https://markettimes.vn/masan-co-vo-mong-sau-cuoc-dua-trend-mo-o-at-kiosk-phuc-long-khong-
cho-ngoi-menu-don-gian-khach-hang-tho-o-bien-loi-nhuan-thap-16299.html
Tiếng Anh
News, T. T. (2022). What makes Phuc Long a phenomenon in Vietnam? Tuoi Tre News,
https://tuoitrenews.vn/news/business/20221210/what-makes-phuc-long-a-phenomenon-in-
vietnam/70410.html.
Nguyen , A. (2020, 9 24). PHUC LONG - AN OUTSTANDING EXAMPLE OF SUCCESS IN
THE TEA AND COFFEE MARKET IN VIETNAM (PART II). Được truy lục từ
vietnamcredit: https://vietnamcredit.com.vn/news/phuc-long-an-outstanding-example-of-
success-in-the-tea-and-coffee-market-in-vietnam-part-ii_14146
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Image sources
T. H. (2023, 4 12). Highlands Coffee, Phúc Long, The Coffee House “kèn cựa” nhau trên chiến
trường F&B, thương hiệu nào được yêu thích nhất? Được truy lục từ brandsvietnam:
https://www.brandsvietnam.com/23605-Highlands-Coffee-Phuc-Long-The-Coffee-
House-ken-cua-nhau-tren-chien-truong-F-B-thuong-hieu-nao-duoc-yeu-thich-nhat
GDP bình quân Việt Nam năm 2000 xếp thứ 173/200 thế giới, năm 2022 thay đổi thế nào?
(2023, 4 4). Được truy lục từ kinhtetrunguong: https://kinhtetrunguong.vn/kinh-te/kinh-
tet-vi-mo/gdp-binh-quan-viet-nam-nam-2000-xep-thu-173-200-the-gioi-nam-2022-thay-
doi-the-nao-.html
Các chuỗi cà phê Việt Nam đang dần mở rộng … về số lượng. (2023, 2 28). Được truy lục từ
cukcuk: https://www.cukcuk.vn/22369/cac-chuoi-ca-phe-viet-nam-dang-dan-mo-rong-ve-so-
luong/