Executive Summary

Phuc Long Coffee and Tea is a chain of coffee shops and has been present in major cities in Vietnam.
Here, they serve a variety of drinks to snacks, but perhaps the most prominent products here are the
coffee and tea lines. Through marketing activities mainly on social media, Phuc Long has realized that
the customers they are serving today are limited to the female group from 18 to 35 years old. In which,
men account for less than 25% of the number of customers. Coffee product lines have not left an
impression on customers, so sales are still low.

The amount of coffee drink consumption depends on the demographic factors of the target audience
such as age, gender, average income, etc. The factors of price, quality, advertising, how customers
perceive coffee products, coffee drinking culture, etc. are also considered to have an effect on
consumption. The balance of male and female visitors is also to balance Phuc Long's production and
branding. Female visitors make up about 2/3 and are also the largest source of consumption of tea
products, while men account for the rest and are also the typical consumers of coffee. 

A preliminary understanding of background information led to the creation of the marketing problem:
How can Phuc Long Coffee and Tea increase coffee consumption to balance the strength of Phuc
Long's coffee products as well as brand awareness, and reach 25% of male customers visiting the
store?

And to solve the marketing problem, a research problem is collected and researched on related issues:
Investigate preferences, factors influencing purchasing behavior and awareness of Phuc Long brand
and its coffee products among 18-35 year olds and men group of customers. 

To broaden doubts about research purposes, research objectives and research questions will be raised: 

Research Objective #1 

Determine preferences and factors affect purchasing behavior of coffee products between current (18-
35, females) and expected (25+, males) customers. 

 How do preferences for coffee drink products differ between current and desired customers? 
 Does online purchasing have a greater impact on both current and expected customers?
 What kind of advertising methods of coffee products attract expected customers?

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  What factors when purchasing coffee products directly influence the purchase of current
segments?
 How does the Vietnamese coffee culture affect the target customers' preferences?

Research Objective #2

Identify which promotional practices have a positive influence on Phuc Long brand awareness and
coffee product line in particular of the target group of customers. 

 How effective has Phuc Long holiday campaign promotion been on target customers?
 What is the percentage of brand awareness through the coffee line product of the target group
of customers?
 What content promotional practices of Phuc Long brand have been most successful in
impressing the target group of  customers? 
 Through what promotional practices does the target customers know about Phuc Long brand?
 Which promotional practices draw the most attention and buying decisions of coffee products?

Background
Micro Environment
Phuc Long Coffee & Tea was established in 1968, built a tea processing factory in 2007, but it was not
until 2012 that it officially entered the Food & Beverage industry when it opened the first store at Ho
Chi Minh City. Phuc Long is one of the few beverage companies that can actively source inputs when
owning tea hills in Thai Nguyen, Lam Dong and having tea and coffee processing factories in Binh
Duong (Phuc Long 2019). Phuc Long Coffee and Tea's current fields of activity are manufacturing,
exporting and trading in tea and coffee products. Providing food and drink services at the stores. And
door to door delivery service.  

This brand has 2 types of stores. One is the Take away express direction that serves low-end customers
with low prices, the second is Take away house which serves the 'more luxurious' group of customers
with higher income. If a few years ago, Phuc Long's stores were merely places to sell and introduce
products, recently, this brand seems to have changed its approach to customers and started promoting
the brand by chain. Phuc Long coffee shop with a new brand identity design and appearance in prime
locations in crowded areas.  

With the advantage of placing many stores in prime locations, Phuc Long has minimized the overload
for customer experience as well as other services. It is extremely convenient for students or office

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workers because they can walk down the street and buy milk tea easily. As for the delivery service,
you can also shorten the waiting time. Most of the places that Phuc Long chooses are accessible places
with high population density, however the price is definitely not cheap. They accept "loss" in terms of
profits to be able to dominate the market, to close the distance with competitors ahead.

Based on the available strengths of tea and coffee, Phuc Long has built an extensive menu with
traditional tea and coffee as well as ice blended drinks that are no different from foreign brands. Up to
now, this coffee and tea company has clearly positioned its brand. From servicescape to quality, price
or discount deals are all good. They focus on promoting the brand on the fanpage on Facebook, this is
where interactive activities take place, where announcing the activities or incentives of Phuc Long. 

Phuc Long's target audience is the middle segment, young customers with reasonable prices. Group of
young customers which account for a large proportion of the population structure and are also ready to
spend. This is a more diverse audience, from employees, tourists to students. Since they aim at a
diverse customer base, its selling price is mid-range, suitable for the majority of people. The
"comfortable" selling price is one of the fastest ways to help Phuc Long bring its brand to all
consumers. 

However, they have not been able to fine-tune their product development and construction strategy
effectively. Although the brand name "Coffee & Tea'' expresses the mission and strength of the
company, it has not really shown in promotional activities and sales activities. When it comes to Phuc
Long's core product, perhaps people will only think of tea, but is the image of the tea product so firmly
attached to the mind of the customer? Take a look at Highlands's example, the 3 core product groups
are Tea, Coffee and Freeze and the 3 products representing each group always appear in every image,
advertisement, poster and menu. 

Therefore, recently, Phuc Long noticed that the majority of customers who experience in-store or other
services are women aged 18-35, the number of male customers is much lower than female. Less than
25% are men. Then, although Phuc Long is famous for tea and coffee, the coffee product line has not
really resonated in comparison with similar products of other brands. Buyers mainly come to Phuc
Long for tea products such as Oolong milk tea and Lychee tea.

Given the above facts, they have restructured the goals set out to complete in the shortest time: 
 Increase the number of customers purchasing coffee products by 30%
 Achieve at least 25% male visitor group of 18-35 years old

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 Macro Environment
The beverage industry is currently one of the fastest growing FMCG sectors in Vietnam. According to
Figure 1, revenue for the coffee segment in Vietnam is expected to reach nearly 6 billion USD by
2021 and the annual growth rate is 8.1% (CAGR) (Statista c. 2020). Especially roasted coffee which is
a staple drink of Vietnamese is very popular and favored, accounting for 90% of the total revenue for
this segment. According to the Vietnam Coffee - Cocoa Association, in addition to large enterprises in
the coffee sector, the coffee shop chain business is the fastest growing type with annual revenue
increasing about 32% (Vu 2018). This high growth is due to the expansion of existing coffee shop
brands and the penetration of new brands.

Therefore, it can be seen that more and more new competitors have entered the fierce domestic coffee
market in Vietnam. Local brands have exploded, along with the proliferation of foreign franchises
from big brands entering Vietnam. Some of the big names like Starbucks, Coffee Beans and Tea Leaf,
Dunkin Donuts, Gloria Jeans, etc. have directly competed with local coffee chains such as The Coffee
House, Highlands, Trung Nguyen, Phuc Long Coffee and Tea etc. But due to the difference in culture
and taste, more or less foreign brands have suffered losses when Vietnamese consumers prefer roasted
coffee because of its unique taste (Megan et al. 2019) They enjoy coffee as a culture: sipping and
thinking, it will take time to discover the culture of Vietnamese coffee (Wunderman 2019). While
Americans consider coffee a quick drink, they prefer it for breakfast as an anti-sleep drink
(Moreschini  2018). 

In addition to competition from famous domestic and foreign coffee chains, customer audience and
customer gender are also an essential factor affecting the brand's coverage. Highlands Coffee has the
highest market share in the coffee market in Vietnam. Regarding customers, Highlands is still
balanced in both gender and age when the beverage menu can serve a large number of customers when
using Highlands Coffee's services (Figure 2 & Figure 3).With an appropriate price range, same price
range as competitors, Highlands is now one of the biggest rivals of Phuc Long Coffee and Tea.

A DecisionLab survey on Q2 2016 showed that most of the time, male go out-of-home to visit a place
for eating more than females. 50% out of 16,000 respondents said that health concerns do not play an
important role when choosing a location, instead convenience will be the top priority (Roscher &
Thomasen 2016). A hygienic environment, good quality, delicious taste and worth the money are
among the top 5 important reasons for choosing an outlet for consumers. On top of that, factors like
brand image, product image, price, taste and marketing & advertising have been shown to have a
positive influence on customer purchase intention (Figure 4). Apart from those, average income, age,
gender, etc. are the internal factors that also affect the consumption of coffee drinkers (Huang & Dang

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2014). In 2020, the 25-34 age group has the highest coffee consumption in Vietnam at approximately
30% and more than 50% is male (Statista c.  2020). 

Marketing Problem and Research Problem

Based on the findings, although everyone acknowledges that Phuc Long possesses well-known tea
products, it has not focused on developing the second strength which is coffee. So coffee is identified
as an area of focus that Phuc Long will improve within their demographic group - people ranging from
18-35 years old. The goal is to increase the number of customers buying coffee and stimulate more
male customers in the target customer group. Through preliminary research, there are several reasons
for low coffee consumption and visits from male visitors. The menu is also confusing with too many
items, not focusing on the core dishes, the advertising campaigns have not yet made a certain
impression on Phuc Long's signature product. Affecting male guests, there are many reasons that can
be mentioned such as the high cost compared to the quality it offers, the marketing is not impressive
enough, the space is not suitable for Vietnamese coffee culture. However, these factors still need to be
studied further to have a better understanding of its influence on Phuc Long Coffee and Tea. 

From the synthesis section, a marketing problem can be originated:

How can Phuc Long Coffee and Tea increase coffee consumption to balance the strength of Phuc
Long's coffee products as well as brand awareness, and reach 25% of male customers visiting
the store? 

To solve the current situation, Phuc Long needs to do a thorough research of the relevant directions:
Investigate preferences, factors influencing purchasing behavior and awareness of Phuc Long
brand and its coffee products among 18-35 year olds and men group of customers. 

Research Objectives and Research Questions

Research Objective #1 

Determine preferences and factors affect purchasing behavior of coffee products between current (18-
35, females) and expected (25+, males) customers. 

 How do preferences for coffee drink products differ between current and desired customers? 

5
  Does online purchasing have a greater impact on both current and expected customers?
 What kind of advertising methods of coffee products attract expected customers?
 What factors when purchasing coffee products directly influence the purchase of current
segments?
 How does the Vietnamese coffee culture affect the target customers' preferences?

Research Objective #2

Identify which promotional practices have a positive influence on Phuc Long brand awareness and
coffee product line in particular of the target group of customers. 

 How effective has Phuc Long holiday campaign promotion been on target customers?
 What is the percentage of brand awareness through the coffee line product of the target group
of customers?
 What content promotional practices of Phuc Long brand have been most successful in
impressing the target group of  customers? 
 Through what promotional practices does the target customers know about Phuc Long brand?
 Which promotional practices draw the most attention and buying decisions of coffee products?

Appendix
Figure 1: Revenue Forecast Revenue in Coffee segment in Vietnam

(Source: Statista)

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 Figure 2 & 3: Highlands and Phuc Long’s menu

(Sources: Highlands; Phuc Long Coffee and Tea)

Figure 4: Factors affect customer purchase intentin on coffee products

(source: An Empirical Analysis on Purchase Intention on Coffee Beverage in Taiwan, European

Journal of Business and Management 2014)

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References
1. Phuc Long 2019, About us, viewed 1 February 2021, <https://phuclong.com.vn/ve-chung-toi>.
2. Statista c. 2020, Coffee Vietnam, Statista, viewed 3 February 2021,
<https://www.statista.com/outlook/30010000/127/coffee/vietnam>.

3. Vu, MQ 2018, The situation of Vietnamese enterprises in the coffee sector, National Business
Registration Portal, viewed 3 February 2021,
<https://dangkykinhdoanh.gov.vn/vn/tin-tuc/599/4875/tinh-hinh-cac-doanh-nghiep-viet-nam-
trong-linh-vuc-ca-phe.aspx>.
4. Megan, M, Quan, T 2019, Vietnam Coffee Annual 2019, viewed 3 February 2021,
<https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Coffee
%20Annual_Hanoi_Vietnam_5-20-2019.pdf>.
5. Wunderman, A 2019, Exploring Vietnam’s Coffee Culture With The Founder Of Nguyen
Coffee Supply, Forbes, viewed 3 February 2021, <Wunderman, A 2019
https://www.forbes.com/sites/aliwunderman/2019/08/20/exploring-vietnams-coffee-culture-
with-the-founder-of-nguyen-coffee-supply/?sh=39c503e73b2e>.
6. Moreschini, A 2018, The Influence of Millennials on the USA Coffee Culture, Coffee Business
Intelligence, viewed 3 February 2021, <https://coffeebi.com/2018/11/14/the-influence-of-
millennials-on-the-usa-coffee-culture/>.
7. Roscher, K & Thomasen, TQ 2016, Out-of-Home Food & Drink Consumption Trends
Vietnam, Decision Lab, viewed 3 February 2021, 
<https://www.decisionlab.co/hubfs/Download_materials/Decision%20Lab_OOH
%20trends_Mailer-official.compressed-updated-prices.pdf>.
8. Huang, YF & Dang, HS 2014, An Empirical Analysis on Purchase Intention on Coffee
Beverage in Taiwan, European Journal of Business and Management, viewed 2 February
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