TRUNG NGUYEN COFFEE MARKETING STRATEGY

I. OVERVIEW OF TRUNG NGUYEN GROUP

- Born in mid-1996 - Trung Nguyen is a young coffee brand in Vietnam,
but has quickly built a reputation and become the most familiar coffee
brand for domestic and foreign consumers.
- In just 10 years, from a small coffee company located in the middle of
the coffee capital of Buon Me Thuot, Trung Nguyen has emerged into a
strong corporation with 6 member companies: Trung Nguyen Joint Stock
Company, Trung Nguyen instant coffee joint stock company, Trung
Nguyen coffee company limited, G7 trade and service joint stock company
and Vietnam Global Gateway joint venture company (VGG) with main
industries including: production, processing processing and trading tea
and coffee; Brand franchising and modern retail and distribution services.
In the future, Trung Nguyen Group will develop with 10 member
companies, doing business in many diverse industries.
- A pioneer in applying the franchise business model in Vietnam, currently,
Trung Nguyen has a network of nearly 1,000 franchised coffee shops
across the country and 8 abroad such as: USA, Japan, Singapore, Thailand,
China, Cambodia, Poland, Ukraine. Trung Nguyen coffee products and G7
instant coffee have been exported to 43 countries around the world with
key markets such as the US and China. Besides, Trung Nguyen has also
built a system of more than 1,000 convenience stores and G7 Mart
distribution centers nationwide.

II. 4P MARKETING STRATEGY OF TRUNG NGUYEN COFFEE

1. Product strategy
- At world-famous coffee brands, their marketing strategy considers coffee
to be just a normal drink. As for Trung Nguyen, products are continuously
researched and developed to diversify. Trung Nguyen's goal is to reach
and conquer all customer segments, thereby meeting customer needs
from affordable to high-end products.
- Currently, Trung Nguyen coffee is divided into 4 main groups: specialty
coffee, roasted and ground coffee (powdered coffee), instant coffee and
coffee beans.
- Instant coffee: G7 Coffee, Trung Nguyen Legend Coffee, specially
prepared Trung Nguyen instant coffee (Trung Nguyen Legend Cappuccino
Mocha, Cappuccino Coconut...), filter coffee.
- Roasted coffee: Popular roasted coffee (Aspiration Coffee I, S Conquer
Coffee, Vitality Coffee), mid-range roasted coffee (Premium Blend,
Gourmet Blend, House Blend).
- Coffee beans: Trung Nguyen Legend Success coffee beans (1,2,3,8), Drip
coffee beans (1,2,4,5,8) and Buon Ma Thuot Espresso coffee.
- Specialized coffee (Premium coffee): Legend coffee (weasel coffee),
Weasel coffee, Creative coffee 8.
- Trung Nguyen has been very steadfast in its goal to provide the market
with many lines of coffee from popular to high-end. Besides, this brand
also created Legend Passiona coffee specifically for women. With low
caffeine content, it helps supplement collagen, anti-aging substances and
dietary sugar, which has been trusted by many women.
- For famous coffee companies in the world, their marketing strategies
only consider coffee as a common drink. G7 cafe's marketing strategy for
products has a clear difference when following its slogan: "Energy Coffee -
Life-Changing Coffee". Recognizing the influence of Trung Nguyen's macro
environment, the Group's products have always aimed to bring the value
of human happiness. Trung Nguyen does not emphasize or focus on any
market segment, but the goal is to be able to meet all the different needs
of customers. That's why Trung Nguyen has launched products from high-
end to popular.
- In 2003, Trung Nguyen Coffee produced and launched instant coffee
products - G7 coffee. This is the marketing strategy of Trung Nguyen
coffee that creates a huge buzz. New products and effective marketing
strategies helped Trung Nguyen completely change the landscape of the
instant coffee market at that time. With rich flavor, intact aroma, affirming
"real coffee", G7 coffee has created a great impression on customers and
is increasingly expanding its identity.

2. Price strategy
- The prices of Trung Nguyen's products are also very diverse, depending
on the type of product, market segment, and target customers of that
product. Besides, Trung Nguyen also has preferential price policies,
differentiated for each customer group.

- For only about 7,000 to 14,000 VND, everyone can enjoy a cup of Trung
Nguyen coffee at this branded coffee shop. Or if customers like G7 instant
coffee products, they can also easily buy their favorite products at
extremely affordable prices (21,000 - 200,000 VND).

- Therefore, the pricing strategy has helped Trung Nguyen gain a

competitive advantage over other product lines that have had great
influence such as: Nescafe, Vinacafe,... From saving a large amount of
transportation costs in The process of distributing products from factories
to stores has helped the price of each type of Trung Nguyen coffee be
lowered, stabilized, and easily competitive.

- During the process of advancing to Japan, Trung Nguyen carefully

researched the psychology and tastes of the Japanese people. In fact,
Japan is inherently famous for its traditional tea ceremony art. The
Japanese knew about coffee very early (around the early 19th century),
but selling coffee to the Japanese was not easy. The Japanese market is a
market where consumers demand high standards of product quality
(taste, handling, ingredients,...). Trung Nguyen does business in Japan in
the direction of franchising. Trung Nguyen's franchise agent in Japan has
priced each cup of Trung Nguyen coffee 50% higher than Starbucks, 25%
higher than domestic products.

=>> This pricing strategy has helped Trung Nguyen achieve success right
in Tokyo on the way to penetrate the international market and is a lever
for the development of franchise systems in many countries. other in the
world.

3. Place strategy

- Talking about Trung Nguyen, it is impossible not to mention that the

Group has expanded its system by franchising. Trung Nguyen coffee's
marketing strategy applied according to the 4P model has greatly
contributed to the success in creating the Trung Nguyen network.
- A carefully calculated and wise distribution strategy has helped the Trung
Nguyen brand gradually move towards dominating the Vietnamese coffee
market, thereby creating a springboard for the brand to expand in the
international market. international. Besides, Trung Nguyen has also caught
up with the trend when using the online store format: "Trung Nguyen
Coffee store".

- Trung Nguyen has taken advantage of traditional and modern

distribution forms to achieve its goals. Regarding distribution channels,
the brand currently has 3 main distribution channels: Traditional channels,
modern channels and franchise system.

3.1. For traditional channels

- With traditional channels, G7 has applied 3 levels to bring products to

consumers:

+Wholesaler (distributor)

+Retailers (small points of sale or retail stores such as grocery stores)

+Consumers

- In traditional channels, Trung Nguyen mainly focuses on distributing

medium and mass coffees, because these product lines are most accepted
and trusted by consumers, along with moderate prices, easily accessible
to the majority of customers.

3.2. For modern distribution channels

- In the marketing strategy of Trung Nguyen coffee in terms of distribution

system. The brand has built the G7 Mart system. This is the first
franchised retail system in Vietnam. According to Trung Nguyen, the G7
Mart system was born to meet the Vietnamese habit of retail shopping.
Along with identifying consumers' shopping habits near home, G7 Mart is
often small-scale stores such as grocery stores or convenience store
chains. With this system, Trung Nguyen has distributed all existing coffee
products, in addition to distributing other products.
- Therefore, Trung Nguyen's franchise system has overcome the
shortcomings that exist in the form of distribution on traditional channels
such as low selling prices, uniformity, and guarantees like 1 supermarkets
and bringing technology into the management process. The birth of this
system chain has demonstrated the strategic vision and ambition to
dominate the domestic market and reach out to the world.

3.3. Trung Nguyen's franchise system (coffee shop)

- Trung Nguyen is the first Vietnamese coffee brand to apply a business

model in the form of domestic and international franchising since 1998,
only two years on the market. In just a short time, there were about 1,000
coffee shops franchised by Trung Nguyen across the country and 8 abroad.

G7 – Real energy coffee is a globally loved coffee brand

=>> The wise G7 distribution strategy has helped the Trung Nguyen
coffee brand gradually move towards dominating the Vietnamese
domestic market, creating a springboard for the brand to expand in the
international market. Besides, Trung Nguyen also uses an online store
format: "Trung Nguyen Coffee store" - a form especially suitable for the
consumption behavior of young people today.

4. Promotion strategy
- Promotion is a necessary business activity to keep pace with the
consumer market. Trung Nguyen does not pay too much attention to
advertising programs, but mostly focuses on PR and promotion plans.

- PR activities: Trung Nguyen promotes the spirit and national pride in its
logo and impressive slogan "Sparking creativity". The system is also
proactive in fulfilling its responsibilities to the country and society as
committed by sponsoring small brands when they encounter difficulties.

- For example, during the crisis period, Vietnam Dragon Fruit had a lot of
inventory that could not be exported. Or programs that sponsor
scholarship projects to study abroad. Especially the World Coffee Capital
project in Dak Lak. The above meaningful and practical activities have
helped Trung Nguyen quickly gain trust and support from customers.

- Promotion: Marketing mix of Trung Nguyen coffee also focuses on

implementing many promotion programs to customers. Such as deep
discounts, buy a thermos and get 10 cups of energy coffee, minigames,
etc. Besides, the brand also implemented a cooperation plan with Moca -
an online payment platform and 50% off when paying here.

- In addition, Trung Nguyen also constantly exploits social platforms such

as Youtube and Facebook to increase accessibility. This group does not
promote advertising but instead uses the brand's core value foundation
for PR. This strategy has partly helped the brand quickly make a strong
impression on Vietnamese users as well as attract many foreign
customers.