VUONG HOANG NU UYEN

ANALYZE THE COFFEE HOUSE’S POTENTIAL ENVIRONMENT

I/ Macro and Micro Environmental factors

1. Micro environment factor:

Vietnamese coffee market has been almost saturated with market share
divided equally for many big brands such as Nestlé cafe, Trung Nguyen
Café, Vinacafé and other senior coffee brands such as Starbuck, Highland,
ect. However, among these competitors, there are three main rivals of TCH
to develop its brand and expand the market share:

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+ Highland Coffee: Nearly 100 shops, almost in the big cities, it has been a
positioned as the coffee for people who doing business and have high-
income. With the large space, good drinks as well as good service, Highland
Coffee can attract the adults.
+ Trung Nguyen Café: More than 1000 coffee stores, this is a traditional
coffee of Vietnamese. Therefore, its brand attracts to a lot of customer
segments and specially foreigner tourists. => The most common brand.
+ Starbuck: With the target customers range from the age of 16 to 40 who
live in rich families or higher income and tourists, Starbuck has advantages
in a well-known worldwide brand and high-quality.

 The analysis of SWOT in TCH:

a) Strengths:
- Strong brand image
- Moderate diversification through branch stores
- Stable number of customers from different ages.
- Reasonable and competitive price.
- Menu diversification between F&D.

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b) Weakness
- Not yet accessible with the rural areas.
- Rarely producing new products
- Cost of facilities
c) Opportunities
- Great market potential
- Providing services according to the unique needs of customers.
- Space for store design, good services, quality products.
d) Threats
- Fierce competition market ( domestic and international)
- Customers are on the trend of milk tea ( Substitute products)

2. Macro environmental factor:

 The analysis of PEST in TCH

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a) Political
- Pressure to strengthen environmental regulation
- Employment law – pressure to increase the minimum wage

b) Economical
- Consumer confidence is improving slowly
- Inflation rate
- Interest rate will increase soon

c) Social
- Income distribution: TCH tends to sell premium priced products
which is hard for people on lower incomes to be attracted.
- Coffee isn’t hot trend nowadays.
- Health consciousness (Caffeine and anti-oxidants)

d) Technological
- New inventions, including advanced roasting techniques can provide
advantages
- Energy use and costs are key with ethically sourced coffee beans
adding to raw material costs.

II/ Marketing Mix (4P’s):

1. Production
F&B is a very competitive industry because of the variety of substitutes.
Therefore, it is quite common for stores to continuously improve their
menus. TCH is no exception. In addition to coffee products are quite
popular, the brand also developed many other products, such as milk
tea, ice-blended ... most recently, launching a series of Macchiato
products, which are very popular among young people. This has brought
many alternatives for customers, when coming to globalization,
contributing greatly to retaining consumers. Lower caffeine content
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options may attract more health conscious consumers; plus emphasis on

ethically produced coffee beans. Take-away is also applied perfectly in
TCH.

2. Price
TCH chooses a price range from 30,000 to 40,000 VND / person - a
reasonable cost, enough to entice customers to sit regularly.

3. Promotion
Coffee House's content always takes the story of the customer as the
center instead of placing the attention on the product, but also towards
the customer's mind. Maximizing the social media promotion of
Starbucks and its good works in ethical and responsible coffee
production will improve the firm’s reputation. A constant and interactive
presence on social networking sites as well as discounting policies will
build relationships with consumers.

4. Place
Not only making a mark through the dense appearance in big cities, the
brand also earned points by choosing a place that is very suitable for the
target audience. The stores of TCH are always located in easy-to-find
locations, easy to park, the central façade of the districts, where there
are eye-catching street views.