Introduction
In the current competitive market, business success not only depended on consumer behavior, but also the number of competitors in the market. Businesses must continuously evaluate their products, prices, distributional channels and promotional activities to ascertain their strengths and weaknesses.
Identification of the rivals, their moves and trends helps in the establishment of suitable strategies to compete in the market. According to some economic experts, appropriate strategies can help businesses to maximize great opportunities to enhance sales and attain sustainable competitive advantage using the available resources.
The greatest challenge facing high-growth-oriented businesses is the absence of a strong brand. This has prompted businesses to develop strong brands in order to secure a comparative advantage and strengthen the performance of their products in the market.
The American Marketing Association defines a brand as a name, term, design, symbol or any other feature which identify a good or service of a seller as distinct from those offered by competitors. This implies that, a brand can include attributes that go beyond the names of businesses and the product or service offered.
Currently, companies are developing brands for a number of reasons which include increased competition in the local market, overseas growth and profit opportunities, reduced economies of scale, and diversification of risk among others. Robert’s coffee shop has a strategy of marketing its brand coffee in the Vietnamese market. This paper presents the marketing strategy that will be used by the Robert’s coffee shop in developing the Robert’s coffee brand in the Vietnamese market.
Robert’s Coffee
Robert’s Coffee is regarded as one of the leading coffee retail chains in Europe. The brand has a well established coffee system and gourmand coffee roaster. The concept’s core competency is high quality coffee.
Therefore, the products are derived from high quality raw materials in a thorough roasting process regulated by professionals to ensure high quality coffee. In addition, the product range has been expanded by blending the original coffee to produce flavored decaffeinated coffee, espresso, Cafe’ Latte, Cappuccino and other beverages. Besides, the retail chain offers a range of coffee-making related accessories.
Currently, Robert’s Coffee has nearly 80 retail outlets across Europe and Singapore. The exceptional quality of coffee offered in the Robert’s coffee shops and retail outlets has earned the company a big reputation in Europe. The company commits to sourcing its raw materials from vastly endorsed farms. As a matter of fact, less than 30 percent of the global coffee meets the company’s standard and only the best coffee can create its unique blend. The company’s founders believed that coffee-making is an art which require time and expertise.
Environmental and Industrial Analysis
Overview of Vietnam
Vietnam is a country located in South-East Asia. The country’s economy has been growing at a rapid rate since 1988. Vietnam is a spirited member of the Association of Southeast Asian Nations (ASEAN) and Asian-Pacific Economic Corporation (APEC), which give the country a global authenticity.
In addition, the country is presently making a transition from a government-controlled economy to a relatively free and competitive economy. Vietnam is geared towards becoming a middle-class economy by 2020, service sector playing the most significant part in economic growth and development.
The service sector is projected to grow by more than 8.5 percent per annum in the next 10 years, which accounts for nearly 45 percent of the national gross domestic product. Furthermore, the government is intending to launch an aggressive policy aimed at promoting the growth and development of value-added services.
In 2013, the sector grew by more than 7 percent, which exceeded the agricultural sector. The sector only came second to the industrial sector. The number of companies registered in the trade and service sector increased by 24 percent. In particular, hotels, restaurants and tourism were the leading service industry.
Vietnamese Coffee Industry
Since coffee is the core product of the company, the paper will explore the Vietnamese coffee industry. Coffee is one of the most significant agricultural commodities in the country. Due to the favorable weather and ecological conditions, Vietnam has become one of the top producers of coffee in the global market. The coffee planting areas have been increasing day after day due to the increase in coffee prices in the international market.
According to the country’s agricultural ministry, the coffee plantations have increased considerably in the last one decade, with the majority being Arabica coffee. The current coffee prices in the global market have encouraged farmers to invest more on coffee plantations. The investments are in the form of increased inputs, replacement of old tress and expansion of coffee areas.
In addition, the local coffee consumption has considerably increased to roughly over 1.15kg per head. Nonetheless, the figure is still very low compared to other producing and exporting economies, for instance, Brazil (5.9kg per capita), Canada (6kg per capita) and US (4.1kg per capita). At the moment, local marketers are striving to increase local consumption by producing a wide range of coffee products.
To cope with the broad range of products, efficient channels of distribution are currently being exploited, for instance, coffee shops and retail supermarkets. Modish coffee retail chains, for instance, Highlands Coffee and Jean Gloria coffee are also being set up across the country. In addition, countless libraries and internet coffee shops have been opened in major towns. This has created a novel hobby among the youths in the country. Lastly, the consumption of coffee among households has also gone up.
On the global scale, Vietnam is among the leading exporters. In the last two years, Vietnam has beaten Brazil to become the principal exporter of coffee in the global market. To be specific, the country exports more than 1500000 tons of coffee per annum and earns roughly £3.5 trillion per annum from exports. Most of the country’s exports go to Europe. The rest is exported to Japan and Indonesia.
SWOT Analysis
SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is commonly used in business studies to explore the existing conditions in order to come up with possible solutions or strategies of addressing both internal and external challenges.
Strength and weaknesses deal with factors within an organization, whereas opportunities and threats tackle the external environment. In this case, SWOT analysis is used to establish the key internal and external factors that would affect the company and its retail shops in Ho Chi Minh City, Vietnam.
One of the strengths of Robert’s coffee is diversification of its products. The product range has been expanded by blending the original coffee to produce flavored decaffeinated coffee, espresso and other beverages. Besides, the retail chain offers a wide range of coffee-making related accessories. Diversified products will help the company to spread risks and remain profitable throughout the year.
Second, the company’s well trained and professional staff gives the business a competitive edge in the industry. In addition, the company has invested heavily on workers’ training so as to make sure that they are updated with the current trends and practices in the industry. For this reason, the company will be able to provide high quality and reliable services to its clients.
The convenient and easy-to-access location of the company’s shops and other retail outlets is another plus. The company’s shops and retail outlets will be located close to office buildings, colleges, recreational centers, trading centers, main roads, and ample parking areas. Last but not the least, the shops and retail outlets will be equipped with modern facilities and essential equipments.
In addition, they will be decorated with lavish and exceptional European style. Statistics show that most young and learned Vietnamese consumers have a high psychological preference for European lifestyle.
The company’s major weakness is attributed to lack of operational experience in the Vietnamese market. Robert’s coffee has been successful in Europe. However, the brand has never been introduced in the Vietnamese market. Furthermore, the brand can be regarded as a new entrant in the market with low reputation and inadequate publicity.
Lastly, the Robert’s coffee brand products will be priced at the upper edge to match the general positioning of the company as a high quality product and service provider. The prices will be higher than the price offered by the competitors. As a result, the company will not be able to attract a given consumer bracket, especially the low income earners.
The country’s coffee consumers provide the main opportunity for the company. The increasing demand for diverse products among the consumers offers a huge business potential for the company. As a matter of fact, existing coffee shops are yet to meet these demands. The company produces a wide range of products and will be able to meet the consumer demand. Furthermore, the company will offer discretionary services upon client’s request.
It will try to be as flexible as possible. Besides, the retail chain offers a wide range of coffee-making related accessories. The Vietnamese customer’s high preference for the European way of life will provide more opportunity for the business. Lastly, the increasing standards of living in Vietnam will eventually lead to more demand for entertainment and lavish lifestyle.
Last but not least, the company’s major threat is the high number of coffee shops within the target market offering nearly the same services. As a result, competition is very stiff. Other threats include global economic recession and unhealthy competition from the well established companies, for instance, Highlands Coffee and Jean Gloria coffee.
The threat will also come from excessive consumer demands. Generally, Vietnamese consumers are very picky as regards the product quality and product diversity, as well as the services offered.
Components of Marketing Mix (4Ps Marketing Mix)
The concept of marketing mix includes many aspects of marketing which are related to the creation of awareness of a brand and consumer loyalty in the market. In the promotion of Robert’s coffee brand in the Vietnamese market, all the four facets of the marketing mix (also referred to as the ‘four Ps’ of the marketing mix) will be employed.
The four components of the marketing mix are price, promotion, product and placement. The blending of these four aspects of marketing mix will result in a marketing strategy that will ensure that the Robert’s coffee brand meets consumer demand.
Pricing Strategy
Robert’s coffee shops and retail outlets will set prices, which reflect savings when compared to the actual value of the product. The company’s brand products will be priced at the upper edge to match the general positioning of the company as a high quality product and service provider. At the initial stage, the company will set prices, which will be 15% mark-up on the cost of production and later a mark-up of 25% on the cost of production.
The setting of prices relative to those of competitors is expected to be effective since the target market for Robert’s coffee brand are mostly middle-class city dwellers. In addition, low prices are associated with poor quality. These middle class city dwellers will be the largest consumers of the Robert’s coffee products in Ho Chi Minh City, Vietnam.
Promotional Strategy
In order to further the growth and development of Robert’s coffee brand, the activities of advertising, sampling, discounting, word-of-Mouth and publicity will be used in enticing the customers. Promotional strategies are used in defining and locating the target audience for the product and clearly passing specific messages.
The promotional strategies will be employed in creating an awareness of the presence of the Robert’s coffee brand in the Vietnamese market. The promotional strategy that will be used will ensure that the targeted customers get the right information about the Robert’s coffee brand product and accessories. This will be achieved through the use of right medium and strategy to reach targeted consumer.
By promoting the product, the level of visibility of the product will be maintained and the volume of the demand for the products and accessories will be set to an expending margin. The concept of Robert’s coffee will be introduced in the promotions. A hygienic slip of paper will be attached to one of the Robert’s coffee products. This paper will contain the fortune of the day and an interesting message to the customers. This could be present in the advert in order to entice the customers to buy the product.
Jackpot offer with Robert’s brand will also be provided. This will be a trip for two to a foreign country. This will enable consumers who are yet to decide on the product to participate in the consumption process. In addition, this will serve a good purpose of tapping new customers to consume the Robert’s coffee brand.
Product Strategies
The Robert’s coffee brand will provide standardized and convenience products. The Royal coffee brand is expected to go through all the four stages of product life cycle development in a span of a decade. The four stages are brand introduction, brand growth, brand maturity and brand decline.
The research and development team will be assigned the task of coming up with new products under the Robert’s coffee brand name in order to ensure that the company meets the pressure of the competing brands in the market, meet the changing tastes and preferences of the consumers, and ensure sustainable growth and development of the company.
At the initial stages (brand introduction), there will be a slow growth in the sales and low levels of profits. The stage will be marked by fewer customers. This is because the products would have not been adequately promoted and the customers are will be still weighing on their purchasing decision. As a result, a slow market penetration strategy will be employed. This strategy will ensure that the product is launched at a relatively fair price.
The growth stage will have a rapid increase in the level of sales as the market for the product will be opened up and more distribution channels will be in place. The increased level of sales will be as a result of trial and repeat buys demonstrating that the product will have satisfied the customers.
Product quality management strategies will be employed to ensure that the high level of sales is maintained. The second last stage is characterized by a decrease in the amount of sales. Market modification and product modification techniques, as well as the marketing mix modification strategies will be employed in order to sustain the level of sales in the company.
Product Placement
Companies normally use numerous strategies to penetrate the existing and emerging markets taking into consideration the challenges and the opportunity they present. Given the large number of well established companies in the target market, the company will apply two strategies, that is, establishing own shops/retail outlets and joint venture.
Since establishing businesses from the scratch is very costly, the company will enter into agreements with some of the local shops and retail outlets to market/sell a number of their products. Robert’s coffee will only form joint venture with companies whom they share strategic goals. This will also help the company to penetrate the Vietnamese market.
Market Positioning
The brand positioning will be classified into two sections: customer’s services and advertising. Based on the satisfaction of the consumers, the main goal will be ensuring that the existing clients are maintained. There is a direct relation between consumer satisfaction and customer loyalty. It is believed that, satisfaction of the employees and agents leads to the satisfaction of the customers.
In advertising, the company will rely more on media advertising than any other medium of promotion. This is because the brand will be sold in a foreign market and the media is the channel that will be able to reach the largest proportion of the targeted audience. In addition, the company will use the social media to attract the youthful clients.