Marketing Principles

GROUP ASSIGNMENT
Analyzing of
Trung Nguyen Legend
Name:

Nguyễn Đình Thăng - HS140128

Nguyễn Lưu Đức - HE140602

Phạm Thị Hải Yến - HS150582

Trần Đức Thắng - HE140204

Nguyễn Hương Huyền – HS153091

Class: MC1504

Lecture: Trần Thị Bích Hạnh

Course: MKT101 – Makerting principles

Date: Fall 2020

 I. PRODUCT INTRODUCTION.
1. The birth and establishment of Trung Nguyen Legend Company
- In 1996, he founded Trung Nguyen Coffee Company in Buon Ma Thuot. 

- In 1998, Trung Nguyen Company opened a coffee shop in Ho Chi Minh City for the
first time, expanded its business under the franchise model, since then, Trung
Nguyen franchise cafes appeared everywhere across the country.

- In 2003, along with the development of the G7 instant coffee brand, Trung Nguyen
gradually dominates the Vietnamese coffee market, surpassing
both Vinacafe and Nestlé (which has entered the Vietnamese market for 100 years
by 2012).

- In 2005, Trung Nguyen inaugurated the largest coffee processing factory in

Vietnam in Binh Duong. Trung Nguyen Coffee has been chosen by the Ministry of
Foreign Affairs of Vietnam to be the Ambassador for cultural diplomacy and as a
gift to heads of state. 

- In 2018, on the 22nd anniversary of its founding, the Founder - President and
General Director of Trung Nguyen Group, Mr. Dang Le Nguyen Vu announced that
this Group will enter a new stage of development with the new title Trung Nguyen
Legend.

2. Trung Nguyen's product group.

Divided into two division -level product: High-end products, intermediate-class products.
Corresponding to 3 product lines :   Special coffee, roasted coffee, instant coffee. THĂNG
 II.

MARKETING MIX 4P.

1. Product:

- In Trung Nguyen's product portfolio, we see that this company implements a

product diversification strategy. Not emphasizing any segment of the market, but
the goal is to reach all different needs of customers, from high-end products to
popular products. The evidence is that Trung Nguyen always tries hard to find out
or it can be said to create (new) needs of customers. G7 Passiona - coffee for
women is an example. Trung Nguyen has awakened the beauty needs of women
even in drinking a drink - thought it could not be "cool" like coffee. Trung Nguyen
oriented 3 product lines, so setting 3 different rates in accordance with the value of
the product.

- Trung Nguyen also launched high-class coffee products such as weasel coffee
(Weasel), the most expensive and rare coffee in the world for export to developed
countries. This sophisticated and classy product was given as a gift to the Heads of
State by the Ministry of Foreign Affairs and selected as a cultural diplomatic
ambassador.
- N ot
stoppin
g at only

diversifying types of products, what Trung Nguyen pays much attention to is the quality of
products. Trung Nguyen pays great attention to the quality of input products for the
production process; from carefully selecting each coffee bean with the best quality, the
state-of-the-art drunk grinding equipment with unique roasting and drying methods has
created a unique flavor for each cup of Trung Nguyen coffee.

- Besides, Trung Nguyen also owns a huge chain of franchised coffee shops across
the country, especially in the central areas and prime locations such as Trang Tien
(Hanoi), Opera House (HCM City), ... to promote their products as well as their
brands.

- The space of Trung Nguyen cafes is not only reconstructed to create a comfortable
feeling for coffee-drinkers to enjoy creativity, but it also brings a cultural identity of
the Vietnamese people. Each store brings a different space but still gives people
who come to Trung Nguyen having a true Trung Nguyen feeling. It is true of the
saying "the coffee of richness and happiness".
- With the spirit of national coffee, it can be said that Trung Nguyen's Logo
represents a great ambition of CEO Dang Le Nguyen Vu. The symbol of Trung
Nguyen has a strong impression on consumers because the "arrow" image is a
stylized image of the communal house pulse of Central Highlands - the origin of
Trung Nguyen Legend. The arrow is the desire to rise to show the company's will to
conquer the top. All create a Trung Nguyen with the will of Vietnamese brand in
the international arena. LƯU ĐỨC
2. Price:

- It is easy to see that the prices

of coffee products of Trung
Nguyen are clearly differentiated
between product lines to create
conditions suitable for the
spending ability of many groups
of customers. For example, with
only about 7000 - 14000 VND ,
you can absolutely enjoy a real
cup of Trung Nguyen Legend at
a cafe branded Trung Nguyen
with comfortable space. Or if
customers like G7 instant coffee products, they can easily buy their favorite
products at extremely affordable prices (21,000 - 200,000 VND). That
proves that in the coffee market, Trung Nguyen Legend has avoided price
barriers, facilitating competitive advantage over other product lines such as
Nescafe, Vinacafe, ...

- Japan is a country famous for the traditional tea ceremony art, besides, the
Japanese also knew about coffee very early (in 1800). Therefore, Japan is a
quite "strict" taste "market. However, Trung Nguyen franchise in Japan has
fixed the price per cup of Trung Nguyen coffee 50% higher than Starbucks
and 25% higher than other coffee.

- And Trung Nguyen has achieved success in ToKyo, creating a miracle jump
for Trung Nguyen on the way of integration, as a lever to develop the
franchise system in a variety of other developed countries.

- The method of distributing products from the factory to the G7 mart system
of distribution stores has saved a large amount of transportation costs. Since
then, the price of the product is significantly lowered, stable and easily
competitive with the market price of other products.
- Trung Nguyen Legend products mostly serve potential customers with
decent or average income. However, Trung Nguyen still has a group of
products that meets the needs of high-demand customers, for
businessmen, ...

- However, Trung Nguyen still has outstanding product lines creating a

unique position for its brand. Specialized coffee is a high-end product
line with limited production per year is a special gift for the true connoisseur
of coffee, leaders,…. ; therefore, in terms of cost, it is many times higher
than other products (300,000 - 16,000,000 VND).

- With G7 Cappuccino has 3 flavors to choose from: Hazelnut, Irish Cream

and Mocha THẮNG
G7 Cappuccino - Hazelnut: G7 Cappuccino – Irish Cream: G7 Cappucino – Mocha:
34.000       VND 34.000 VNĐ 27.000 VNĐ

3. Place:

- One of the goals when Trung Nguyen sets its distribution policy is that all products
can be spread throughout the domestic and foreign markets. And the fact that G7
instant coffee accounted for 38% of the Vietnamese market in 2011 showed that
Trung Nguyen's level of market control and quality of marketing activities are
gradually being effective.

- After defining their target, Trung Nguyen has identified options for main
distribution channels:

 Intermediate traditional distribution : the distribution channel level 3.      

Producer Retailers Consumers

 
 
 - The number is updated to 2010, Trung Nguyen has 4 roasted coffee factories, 2
instant coffee processing factories throughout Vietnam, a network of 600 cafes in
Vietnam, 121 exclusive distributors, 7.000 points of sale and 59.000 retail stores
for products.

 Franchise system (franchise stores): This is a vertical distribution channel. Trung

Nguyen Legend is the first Vietnamese company to adopt a domestic and
international franchise business model. In a short time, Trung Nguyen has about
1,000 franchised cafes nationwide and 8 overseas ones such as the US, Japan,
Singapore, Thailand, China, Cambodia, Poland and Ukraine.      

               
  Modern distribution intermediary (G7 Mart system): G7 Mart is formed on the
basis of a collection of small grocery stores by equipping, upgrading and changing
management methods, service methods to turn these traditional retail stores into a
chain of convenience stores operating under the modern distribution model. G7
Mart strives to cooperate with manufacturers to unify selling prices at all G7 Mart
stores across the country and to build Vietnamese trade centers overseas named
Viettown to bring Vietnamese products out to the world market. There are 200
suppliers for the entire G7 Mart chain across the country. The special thing about
the G7 Mart system is that it is built on a franchise model.      

The introduction
of the G7 mart system
shows the strategic
reach and ambition to
gain a firm position
in the distribution system of Vietnam. According to the original plan, by 2010, G7 would
have 35,000 grocery stores and member stores participating in the G7Mart project. G7 will
build 200 distribution centers, 100 distribution warehouses, 7 trade centers and 7
hypermarkets. However, up to now, the remaining G7 Mart stores have been opened by
Trung Nguyen by themselves, and all stores that cooperate with grocery store owners are
automatically closed.

 Franchise form in Trung Nguyen

+ One of the "accidents" that often happens is the "fake" brand. Recent statistics of Trung
Nguyen Legend Company show that there are hundreds of Trung Nguyen Legend shops
that cannot be thoroughly handled and controlled. 

+ With the franchise form of Trung Nguyen:

- Advantages: Within 2 years of its launch in the market, Trung Nguyen has quickly
expanded the distribution network of Trung Nguyen Legend, making a strong impression
on consumers when only in a short time. Nearly 500 Trung Nguyen Legend shops appeared
from North to South. 

- Limitations : Franchise stores are located in different locations, but the service style in
one location is not good for customers, which will lead to negative thinking for the
entire Trung Nguyen Legend system. It is difficult to manage the whole system, from style
to decoration, to service. The larger the franchise system, the easier it is for them to lose
control if their brand identity is not strengthened and protected. Recent statistics of Trung
Nguyen Legend said that there are hundreds of Trung Nguyen Legend shops that cannot be
thoroughly handled and controlled.  

+ For G7 Mart system: 

- Advantages : The fact that G7 Mart operates under the franchise model has helped the G7
Mart chain of stores quickly replicate. Thanks to the franchise model, the number of G7
Mart stores has quickly reached such a large number (500 standard stores and nearly 10,000
member stores).
- Limitations : The G7 Mart brand is clearly not strong enough, G7 Mart focuses on small
stores, but it must be noted that: shop owners are small businesses, they can overcome
barriers compared with G7 Mart regulations. They do not seem to be doing the core
problem: organizing the retail chain management system. With the management system of
the retail chain stores, the profit that can be brought lies in the organization of the supply
chain to have the best and most reasonable supply prices. YẾN
 

4. Promotion:

 Vietnam's coffee market for more than ten years has been a three-way battle
between Vinacafe - Nescafe - Trung Nguyen .      

Vinacafe spreads their heart through the story of time, affirming that the product is the
crystallization of timeless value. "Standing in each cup of coffee is a deep love for
Vietnamese coffee beans", also cared for each coffee wiper but Nescafe wanted to convey
the message of love in it.
To make a difference with the two big rivals, Trung Nguyen chose his own path bearing the
national name and creativity, with outstanding slogans: "Spark creativity", coffee for
creative brain, "Arousing Vietnamese national spirit ”.

With this communication method, Trung Nguyen has won the distinctive attribute of
creativity, and also won the target group of customers who have creative needs.

 Different from many other brands that revolve around the strategy of creating
everyday emotions for consumers. Trung Nguyen has boldly brought into the
brand feelings of social responsibility, national responsibility as a commitment
and always creates topicality for the market (such as the project of a Scholarship
to study abroad sponsored by Trung Nguyen, supporting other brands such as
Thanh Long VN, Nam Roi pomelo, especially the project of the World Coffee
capital located in Dak Lak)      

With this, Chairman Dang Le Nguyen Vu has made the right inferences and steps from the
goal of "Serving the community", from the mountainous community to the plain, from the
countryside to the city, with a point of view from zero, from No to Yes and get the
weakness win the strength. They have implemented many programs such as Building the
Brand of Vietnamese Agricultural Products and especially the programs for the young
generation - the main generation to create the future of Vietnam such as the fund "Arousing
of Creation" - supporting youth to start a business in 2005, started the Forum: "Whether our
country is small or not small", "Day of action for the great Vietnam" in 2005, "Journey for
Vietnamese aspirations". Trung Nguyen 's PR campaign "The books of life"
has also brought about certain success.
  Sponsor contests and conferences to promote products. For example : "G7
Grand festival, try products" attracted more than 35,000 participants.      

 Exploit ads for free on virtual social networks like Facebook, Youtube.      
 Trung Nguyen has promotions that are both suitable for each period and suitable
for long-term campaigns.      
 Coffee chains are also a way to widely advertise brands to
consumers.   HUYỀN  

III. Offer:
Through analyzing the strategies that Trung Nguyen used, based on the strengths and
limitations, opportunities and challenges along with the success or failure of Trung Nguyen
in the past time, my team made some suggestions for the development orientation of Trung
Nguyen Legend brand.

In today's market mechanism, Trung Nguyen's application of the franchise strategy is

completely reasonable, bringing high economic efficiency. However, Trung Nguyen needs
to manage franchises more effectively to regain brand image. THẮNG

- Limiting the growth rate of franchises in the Vietnamese market because at the
current rate, Trung Nguyen can not fully control. For example, a province should
have only 2-3 franchised branches, the manager can easily and conveniently
control.
 - Build stricter transfer deals, with strict rules plus a decent profit margin. This will
stimulate the franchisors to strictly comply with the provisions of the contract.

- Train more knowledge and experience for managers as well as employees to build
a good image for the brand. Because just one transfer branch has staff with bad
service attitude will be equated that Trung Nguyen also has a bad service attitude
to customers. HUYỀN

Moreover, as a solution in product purchasing to buy high quality products, Trung Nguyen
needs to build a model of close coordination between businesses and farmers to create a
good and secure mentality for the farmer.

In addition, it is necessary to increase the promotion of the brand on television, newspapers,

magazines, .. so that the brand is not gradually forgotten in the minds of customers.

They need to choose a spearhead in the customer segment, to develop and affirm and
emphasize the brand, as well as to have a focused, profound, not spread policy. YẾN

IV. Conclusion:
- Campaign Asia is the leading prestigious and famous Media magazine with over
50 years old in Asia Pacific. Announcing the results of the Asia Top 1,000
Brands, the magazine said: “We asked the question:“ Which local brand do you
think is the strongest in Vietnam? By using the phrase "Strongest local brand",
we mean that the brand is from Vietnam, has the best reputation and the
strongest emotional connection with the people living in that market " .

- Asia's Top 1,000 Brands Ranking is a survey of consumer opinion across 14

markets in Asia and the Pacific, assessing brand popularity across 15 major
product categories including umbrella automotive, retail, restaurant services
(F&B) and consumer electronics. This is a measure of attractiveness, showing
which brands are succeeding with their marketing and branding efforts, image in
the minds of consumers. According to the ranking results, Trung Nguyen
Legend is the top coffee brand that consumers trust the most. LĐỨC