VAT Registration No: 842417633. An hour after the official opening hour, the long line in front of the store still remained, as there were more people like Tram coming to become one of the first to taste Starbucks in Vietnam. Their merchandises include coffee and tea‐brewing equipment, mugs and accessories, packaged goods, music, books and gifts. Fischer, D., & Roy, K. (2019). No plagiarism, guaranteed! Gross national income per capita was $1,270 in 2011. Laos, a landlocked country bordered by Thailand, Myanmar, Cambodia, Vietnam and China, has so far reported only 24 COVID-19 infections, according to a tally kept by the Johns Hopkins University. According to an annual report by USDA Foreign Agricultural Service, in 2019, Vietnam is the second-largest coffee producer and exporter in the world, with more than 30.5 million bags of coffee has been produced.  The forecast growth rate is higher than 8% a year and expecting to increase steadily over the next five years.  Domestic consumption will also increase to 3.4 million bags, which is about 10 percent of total coffee production.  Vietnamese people are proud of their traditional robust, dark brew coffee. Starbucks said it was monitoring the coronavirus situation but is still aiming at an opening in summer 2021. Starbucks is struggling in a coffee market that worth more than $5.9 billion (USDA Foreign Agricultural Service, 2019). Starbucks said it was monitoring the coronavirus situation but is still aiming at an opening in summer 2021. And both Phuong and Nga love the taste of Starbucks and accept the price. Starbucks revenues in Vietnam exceed target VietNamNet Bridge – The Starbucks Corporation, one of the world’s leading coffee brands, has claimed initial success in Vietnam. Their stores are a neighborhood gathering place for meeting friends and family. "We plan to open 700 stores across Vietnam in the next five years, with an average of 10 new stores every month," said The Coffee House founder and CEO Nguyen Hai Ninh.  According to a 2018 report from Vietnam Industrial Research and Consulting Company, Starbucks' revenue in Vietnam in 2018 is VND 25.78 million, and The Coffee House ranking second in revenue with $ 29.1 million.Â, Business Strategy of Starbucks in Vietnam, Branding is essential and has been ranked as one of a marketing priority strategy for companies because it is a way that customers distinguish a company from its competitions (Bui, Nguyen, & Pham, 2017).  Having a strong brand makes a memorable impression on customers and creates a perception of a company's value and reputation.  Developing a brand must include setting and implementing strategies that bring practical benefits to customers, and thereby achieve the company's goals.  Companies must understand consumption processes, which include customer behavior and decision making.  Hussain (2019) defines sensory marketing as an advanced marketing strategy that promotes customer relationships with the brand, boosts sustainable emotional connection, optimizes brand loyalty.  To develop long-term stability, companies must understand psychology, age, occupation, average income, and customer behavior.  Not only are quality products with competitive prices, but they also satisfy customers' needs and want, the changes their requirements, purchasing dynamics, and personality characteristics of each group of customers, as well as direct and indirect factors, impact on your buying behavior.Â. Unlike China, where tea is the caffeinated drink of choice, Vietnam inherited a coffee culture from French colonizers in the 19th century. It also helps create a long‐term supply of the high‐quality beans which they have been carefully blending, roasting and packing fresh for more than 40 years. Over the past few years, the fresh fruit smoothie industry has bloomed into a billion dollar industry. Real Estate: According to Bloomberg, in the year of 2018, Vietnam's real estate market is increased by 17% (Lee & Chau, 2019). Md Isa, A., Subhan, M., & Saud, M. (2017). This is not an example of the work produced by our Essay Writing Service. Vu said he intends to build a “coffee empire” and a global brand within the next 10 years, rivaling Starbucks. It is predictable that Starbucks stores and services in Vietnam may not be invested as much as in the U. S. According to the company’s website, the coffee roaster discovered enzymes that mimic civet digestion and developed a process to give the coffee the same “magical flavor. Starbucks will have to compete with Trung Nguyen Coffee and Highlands Coffee, a homegrown brand as well as other coffee chains that have opened stores in Vietnam in recent years and who have more experience catering to the Vietnamese love of strong coffee, including the Australian coffee chain Gloria Jean’s Coffees International, the California-based Coffee Bean & Tea Leaf, and Nestle instant coffee which is engineered to suit the Vietnamese palette is sold widely in Vietnamese supermarkets. Vu won a medical degree before starting his roasting business. To export a reference to this article please select a referencing stye below: If you are the original writer of this assignment and no longer wish to have your work published on the UKDiss.com website then please: Our academic writing and marking services can help you! Our academic experts are ready and waiting to assist with any writing project you may have. Bloomberg - Are you a robot?. Global revenue of Starbucks 2003-2019 ... Market share … Who are the patrons who would be willing to wait in long lines for that tall, grande or venti cup at a price substantially more than what they can get on the street? A regular customer, an electronics salesman Do Thanh Tung, said he is eager to see if Starbucks coffee really is different from the Vietnamese blends he has been drinking since he was 10 years old. This includes responsible purchasing practices, supporting farmer loans and forest conservation programs. According to the World Bank, the average local salary is only $148 and presents the most significant proportion of the population. The Vietnam Starbuck has announced the plan to close some stores in the next few years due to poor performance (Vietnam Investment Review, 2018). And there is a premium that people are willing to pay for a clean environment, for consistent products and good service. The grand opening of the HCM City store marked Vietnam as Starbucks’ 12th market in the Asia Pacific, and adding up to its chain of some 3,400 stores in the area. The civet coffee is considered a delicacy. Financing: Total net revenues increased 5% to $22.4 billion in fiscal 2017 compared to $21.3 billion in fiscal 2016. (“Starbucks Coffee Company”) In 1981, Starbucks chairman, president and chief executive officer, Howard Schultz, was drawn into Starbucks from his first cup of Sumatra, and joined Starbucks a year later. Why Starbucks has less than 3% of Vietnam’s billion dollar coffee and tea... As the world’s second largest coffee exporter, Vietnam knows its … Their coffeehouses have become a inspiration for coffee lovers everywhere. Study for free with our range of university lectures! Cà phê espresso của chúng tôi, latte của bạn. Retrieved from http://www.fastcompany.com/887990/starbucks-thirdplace-and-creating-ultimate-customer-experience. To bring people together, inspire change and make a difference in people’s lives are all part of being a good neighbor. Pham added that the cool factor is crucial and it’s important for young people to be seen at these places and is not about the coffee. They usually enjoy tea as its purest form without adding any flavors. It's easy to find a Starbucks cafe almost anywhere in the world, but in … They continuously try to provide customers with a high stage of value and satisfaction, not only by focusing on the scope of its products but also at the experiences that they offer. But you won’t find the traditional style in a Starbucks… Starbucks, “the third place”, and creating the ultimate customer experience. Otherwise, a lower price will have to be charged and the net effect will be zero. Pricing: Even after ten years of the fast-growing economy, Vietnam is considered as a lower-middle-income country (("About Viet Nam", 2020). On those trips, they are regular Starbucks customers who go not for a standard cup of coffee but for the specialty drinks. Vietnam is the world’s second-largest coffee producer and it has dozens of local chains as well as small coffee shops on nearly every street corner which present a major challenge for Starbucks to break into the crowded market. Copyright infringement in Vietnam: recognizing the reasons and suggesting some solutions.Â, Pham, T. (2020). They said they came to see if there is any difference between Starbucks Vietnam and in other nations. (“Starbucks Coffee Company”) Starbucks mission is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. In late 2011, the coffee giant also brought out Evolution Fresh, a juice company. Marketing strategy is more than planning all actions to promote your brand, product, or service in advance and monitor the results of such efforts to understand what should be maintained and what can be improved.  Over the past few years, the role of brands in marketing has changed very quickly.  Previously, we often use the "brand" that exists with the company name and products, and make them attractive to consumers, also known as "brand polishing." Designers look at every aspect, such as nearby buildings, urban features, and try their best to integrate Starbucks into local structures. (“Starbucks enters entrenched Vietnam coffee market | SeacoastOnline.com”) Vietnam is the world’s second-largest coffee producer and it has dozens of local chains as well as small coffee shops on nearly every street corner which present a major challenge for Starbucks. They insist on Starbucks because they know they can count on its genuine service, an inviting atmosphere and a superb cup of expertly roasted and richly brewed coffee every time. Starbucks Coffee Company today announced plans to open its first location in Laos by the summer of 2021, reaffirming the company’s long-term commitment to continued growth across Asia. Retrieved 26 January 2020, from https://www.worldbank.org/en/country/vietnam/overview. (Talpau & Boscor, 2011), Starbucks offers an ultimate customer experience that puts customer feeling at the top of priority and promotes the value of "Starbucks Culture" that provides "third place" experience to consumers (Dollinger, 2018).  Consumers are put at the center of the company's concerns and all decisions and actions consider from the consumer's point of view and focus on the needs of customers.  The company offers a welcoming atmosphere to many young white collars, college students as "a home away from home" (Qian & Xing, 2016).  Starbucks became a fashion symbol in Vietnam in just a few years; It translates more than coffee, but brand and culture.  Many young white collars, university students like to spend time in coffee shops and are passionate about the environment that Starbucks creates where they can work, read, browse the Internet. Registered Data Controller No: Z1821391. They also hope to contribute one million volunteer hours each year to their communities by 2015. He said Starbucks is not worth worrying about as it doesn’t sell coffee. Dang Le Nguyen Vu, founder and owner of Trung Nguyen said he’s ready to compete against Starbucks with a plan he’s developed over the past three years. According to Sara Senatore, a New York-based analyst at Sanford C. Bernstein & Co, prices may still be less than the U.S. because of lower income and operating costs. They will also work to significantly reduce their environmental footprint through energy and water conservation, recycling and green construction. STARBUCKS IN VIETNAM 2. And Nestle instant coffee which is engineered to suit the Vietnamese palette is sold widely in Vietnamese supermarkets. Location is the key to success, and getting the right site usually comes with high prices. A case study of Starbucks.Â, Nguyen, H. (2017). And with every cup, they strive to bring both their heritage and an exceptional experience to life. (“Starbucks opens first store in coffee-loving Vietnam”) Starbucks opened its first cafe in Vietnam in Ho Chi Minh City as part of its strategy to expand across Asia, and plans to add more shops throughout the country. Starbucks will seek to profit from surging consumer demand. (“Starbucks enters entrenched Vietnam coffee market | SeacoastOnline.com”) There is a strong demand among youth in Hanoi and Ho Chi Minh City for branded goods and services. Starbucks card members enjoy Starbucks Rewards which include complimentary handcrafted beverage of customers’ choice, brewed coffee and/or whole bean coffee. Starbucks' mission statement is "to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time," emphasizing direct experience in daily work, life, and entertainment (Starbucks, 2020).Â. In order to uphold a sustainable competitive advantage, Starbucks must achieve its value activities in a way difficult for competitors to replicate or imitate. A level of value must support the competitive advantage to the customer that is at least compatible to the competitors. (“sustainable competitive advantage analysis | blekko”) Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry. Study for free with our range of university lectures! Information in this assignment should not be used to form the basis for any kind of financial or investment advice, as the content may contain inaccuracies or be out of date.. 4316 words (17 pages) Business Assignment, 4th Nov 2020 Retrieved from http://www.worldstopexports.com/coffee-exports-country/. This is not an example of the work produced by our professional assignment writers. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Venue options, which range from mobile coffee carts to locally-owned cafes to big-but-still-local names like Trung Nguyen, are pretty much unlimited. Laos, a landlocked country bordered by Thailand, Myanmar, Cambodia, Vietnam … While it’s consumed as a morning pick-me-up in parts of the western world, it’s a social activity that takes place throughout the day here. Starbucks offers the finest coffees in the world, grown, prepared and served by the finest people. Some speculated about how the Starbucks will compete with Trung Nguyen Coffee and Highlands Coffee, a homegrown brand that credits Starbucks as an inspiration. A first time customer, Nguyen Ngoc Tram, 17 explained to Tuoitrenews that as this is the first time she tasted a US coffee brand name, she was very eager to buy her first Starbucks cup and was willing to queue for more than 30 minutes to be able to sip her Vietnamese Starbucks coffee. 1st Jan 1970 Nowadays, things are different.  Companies build marketing strategies based on an understanding of value customers (Baidya, Maity, & Ghose, 2019).  The function of marketing is to make a profit based on satisfying the wishes and needs of the customer.  To understand and influence people's requirements, marketers need to follow a culture of market penetration, especially in an international environment.  Each key market has its cultural heritage. It is one that is dedicated to inspiring and nurturing the human spirit and committed to serving the finest coffee, creating an exceptional customer experience, and being a great place to work. FILE - This Oct. 27, 2020, file photo shows a sign at a Starbucks Coffee store in south Seattle. Vietnamese people value tea for its simple purity and drink organic tea that grows popularly in the North of Vietnam. Most of other customers are young, and those who have already experienced Starbucks in the US and other Asian countries. Starbucks has far less coverage than in regional countries. People come to Starbucks to work, chat or meet up. (NaturalNews) Starbucks, the coffee shop that is renowned for its seemingly limitless coffee varieties, is opening a new chain of juice bars in response to the growing health trend towards unprocessed and whole foods. Furthermore, other international food chains have opened stores in Vietnam in recent years, including the Australian coffee chain Gloria Jean’s Coffees International, the California-based Coffee Bean & Tea Leaf, and the American fast-food chains KFC and Burger King. She and her friend Nguyen Nga are already part of the Starbucks in-crowd thanks to jobs that often take them outside the country. They share their customers’ commitment to the environment. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. He had commented on an email to The Associated Press that Starbucks is looking forward to growing with Vietnam’s already vibrant coffee industry and making a positive impact in the communities where they operate. (“Starbucks Coffee Company”) Starbucks have always believed in serving the best coffee possible and it is their goal for all of their coffee to be grown under the highest standards of quality, using ethical sourcing practices. Retrieved from https://www.vn.undp.org/content/vietnam/en/home/countryinfo.html, Baidya, M. K., Maity, B., & Ghose, K. (2019) Innovation in Marketing Strategy: A Customer Lifetime Value Approach.  Retrieved from http://jbm.nccu.edu.tw/pdf/volume/2502/JBM-vol-2502.pdf#page=80, Dao, K., & Heidt, T. (2017). STARBUCKS IN VIETNAM 2013 1. Starbucks think the market demand is high enough to justify its own set of chains, not just an extra few fruit options on the menu at their coffee shops. Therefore, the demand for low-cost coffee is substantial. Their healthy foods and snack options which include a wide menu to support vegetarian and vegan lifestyles will also be available. (“Starbucks Coffee Company”) Today, Starbucks connect with millions of customers every day with exceptional products and nearly 18,000 retail stores in 60 countries. Reference this. And their master roasters bring out the balance and rich flavor of the beans through the signature Starbucks Roast. Starbucks is grateful to their partners (employees) for making Starbucks the company that they are. Thuy further added that expensive coffee is just for the children of government officials, or people who have lots of money. Starbucks' Entry into Tea-Drinking India.Â, Starbucks.  (2018).  Retrieved from https://stories.starbucks.com/press/2018/starbucks-announces-strategic-priorities/, Sun, L., Zheng, X., Su, M., & Keller, L. (2017). Many local espresso chains are serving the mid-market segment and offer reasonably service with select merchandise at desired prices. They also offer a selection of premium Tazo® teas, fine pastries and other palatable treats to please the taste buds. The company has strong ethical values and ethical mission statement. (“Starbucks opens chain of raw vegan juice bars”) (“Starbucks opens new blend of juice bars”) (“Starbucks to open first Evolution Fresh juice store – USATODAY.com”) New markets for coffee and healthy beverages are beginning to emerge and that can be retailed in their cafes. 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