Class: EMQI63

Student: Nguyen Canh Vinh

Student ID: 11216259

MARKETING MANAGEMENT (EMQI K63)

INDIVIDUAL ASSIGNMENT:

You choose a brand and analyse the brand by answering the questions below:

Highlands Coffee
1. The core values of Highlands Cofffee.
a) Be proud and share the community about Vietnam

Highlands Coffee focuses on spreading the spirit of "proud of Vietnam" to

domestic and international markets. The brand both stores cultural values and tries to
catch up with new tastes with business acumen. Understanding customer psychology, the
space design of each coffee shop is imbued with Vietnamese identity in harmony with
modern and elegant style. Since then, Highlands Coffee has successfully attracted many
generations and different customers.

b) Always keep the passion

Highlands Coffee was born out of the founder's strong passion for Vietnamese
coffee. Until now, the company has been constantly nurturing this aspiration with a
consistent business strategy. Highlands Coffee is proud to commit to 100% clean
ingredients imported in highland areas such as Gia Lai, Dak Dak, etc. Combined with a
unique filter making complex, the brand promises to always bring a pure Vietnamese
coffee culture.

c) Respect, integrity in business

To contribute to maintaining the trust of customers, employees and suppliers.

Highlands affirms business based on respect, uprightness and integrity

d) Promote the spirit of cooperation

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 Within the company, Highlands Coffee wishes to build a strong team spirit. All
members cooperate and support each other to complete the work well and develop the
business.

e) Take care of customer

Customers are the top priority as Highlands Coffee provides the best experience.

2. The ups and downs that the brand Highlands Coffee has been through
for 3 years (2020 – 2023).
The coffee chain model has exploded in recent years and still maintains a high
growth rate. However, the impact of the Covid-19 pandemic and competitive pressure
from new names are blowing hot air on top names like Highlands Coffee.

In terms of revenue, Highlands Coffee is still the leading chain in the market, but
the business results of this brand are showing signs of going down.

In 2021, this brand's continuous growth chain was broken when revenue decreased
by nearly 20%, to just over 1,700 billion VND. At the same time, Highlands Coffee also
reported a loss of more than 19 billion dong. The last time this chain lost money was in
2014.

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 Compared to other chains in the market, Highlands' gross profit margin is always
in the highest group, maintaining about 70% in the last three years. However, the profit of
this chain is relatively modest due to heavy spending on selling expenses. Accordingly,
the net profit of Highlands Coffee Service Company recorded nearly VND 100 billion in
2017 and 2018, decreasing to VND 55-80 billion in the next two years despite record-
setting revenue. In 2021, this company reported a loss.

At the milestone of 2022, the concept of community is raised to a new level by

Highlands Coffee: Highlands Coffee becomes a space associated with the daily rhythms
of customers' daily lives, where they can share their passions and strengthen their
friendships. , find the feeling of "belonging" to a community, in the context of the
modern world with many amenities but gradually losing the true connection between
people.

In 2022, Highlands Coffee is proud to be a business for 5 consecutive years in the

"Top 100 Best Places to Work in Vietnam" and has just been honored with the Top 3 of
the Customer Service Industry.

3. Highlands Coffee’s target customers.

While Vietnamese coffee is still applying the table service process for customers,
Highland has let its customers "self-service". Of course, if it's a chain of cafes with more

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than 200 stores, it's a completely different story. Especially at that time, the self-service
culture was still quite strange to Vietnamese consumers.

Highlands Coffee's target customers are customers with average incomes and
above. The customer file ranges from young people, students, students to middle-aged
people, office workers, business people...

Determining such a wide range of customers is also a problem that the company's
product makers are always concerned about. While keeping the menu suitable for the
taste of middle-aged and sophisticated customers, it can make young people feel not
boring.

This is also one of the rare brands that can retain both of these groups at the same
time thanks to its right business strategy.

4. The customers’ perception of the Highlands Coffee comparing to its

competitors
Coffee shops are one of the most popular places chosen by Vietnamese to spend
time with relatives and friends. Along with this popularity, coffee chains have also grown
to become coffee chains from military to high-class, known by many people such as
Highlands Coffee, Trung Nguyen, The Coffee House, Starbucks, Phuc Long,…

Highland Coffee is considered a coffee chain brand for the middle class (because
the price is over 40,000 VND, 2 to 3 times higher than the average price). Also in this
segment, in the early years of its launch, the brand had competitors Trung Nguyen and
The Coffee House. However, during its operation, Highland was always far ahead of
these two competitors in terms of market share and revenue. The more noticeable
problem is that Vietnamese people tend to be foreign, so many people expect the
international coffee brand Starbucks. By 2013, Highland's position was in danger of
being shaken when Starbucks opened its first store in Vietnam. Before Starbucks
appeared, Highland's market share in Vietnam was quite large (over 50%). As of 2015,
Highland's market share was only 28% and that of Starbucks was 27%.

Highland is a brand that has existed for a long time and has existed for more than
two decades in the Vietnamese market and around the world. From the first days of
launch, the management stages are strictly controlled to help build a professional image
in the eyes of customers.

Highland Coffee's drinks are suitable for Vietnamese tastes, especially coffee.
Unlike other coffee brands in the world (such as Starbucks), Highland's coffee has a rich
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flavor. The coffee beans are also carefully selected by hand, so the quality is always
guaranteed. In addition, the current fast foods in Highland have also been "Vietnamized",
thus improving brand positioning and customer friendliness. Highland does away with
burgers and fries and keeps a dish close to Vietnamese people, which is banh mi.

In August, Q&Me decided to survey 405 people aged between 16 and 49 to

understand the popularity of Vietnamese coffee coffee brands.

With 503 locations as of the end of 2022, including 175 in Ho Chi Minh City, 124
in Hanoi, and 204 in other provinces and cities across the nation, Highland Coffee is the
largest coffee chain in Vietnam.

According to Q&Me's survey, by the end of 2022, there were only two other
coffee chain stores in China with over 100, namely Trung Nguyen (482) and Coffee
House (150).

Q&Me also published the “Top-of-mind Coffee Chain” list, which can be
understood as the first coffee brand that comes to mind of consumers. According to this
list, Highlands Coffee is the first coffee brand that appears in the minds of consumers
with a rate of 43%. Meanwhile, Trung Nguyen ranked second with 40%.

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 However, when it comes to brand awareness, Trung Nguyen has been proven to be
superior to other coffee chains, with 75% of respondents agreeing The second ranked
coffee is Highland Coffee, accounting for 67%.

5. The brand’s strategy impacting the brand’s profit

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 Strategy marketing mix of Highlands Cofffee

Focusing on the 4 main elements of the Marketing mix strategy: Product, Price,
Place, Promotion, Highlands Coffee development: product research, price stabilization,
wide distribution and methodical communication.

a) Product:

The menu at Highlands Coffee's stores is quite distinct: coffee and the rest. Coffee
lovers still have enough choices to satisfy their coffee passion. For those who don't want
to enjoy coffee, they still have tea and other iced drinks. It can be said that it is a product
that suits the taste of most diners. The point worth mentioning is that, the company has
created its own "reputation" with typical drinks, such as Filter Coffee, Espresso Coffee,
Freeze Green Tea, Golden Lotus Tea...

b) Price:

The common ground for drinks of Highlands is usually from 29,000 VND to
75,000 VND. The price ranges according to the sizes of drinks from small, medium, large
... depending on the preferences of each customer, with any budget. This pricing strategy
is completely consistent with the target customer group, which is a group of diners with a
good average income.

c) Promotion:

The company has launched a number of communication campaigns such as

replacing bags with self-destructing bags, encouraging customers to bring their own cups
instead of using plastic cups at the store, all bringing positive effects from the
community. . This company also cooperates with delivery partners such as Grab, Baemin,
ShopeeFood to have promotion programs to stimulate demand, promote online sales
channels in parallel with business activities at the point of sale.

Reference:
MISA AMIS, 27 October 2022, Giá trị cốt lõi của Highlands Coffee: Tự hào cà phê Việt
Nam, retrived on 31 January 2023, from: https://amis.misa.vn/69548/gia-tri-cot-loi-cua-
highlands-coffee/

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Minh Sơn, 12 August 2022, Highlands lần đầu lỗ sau 8 năm, retrived on 30 January 2023,
from: https://vnexpress.net/highlands-coffee-lan-dau-lo-trong-8-nam-4498932.html

Q&Me, Viet Nam Market Research Report – Favorite cofffe chain (2022), retrive on 31
January 2023

Anh Nguyễn, 12 December 2022, Thương hiệu cà phê nào có độ nhận diện cao nhất tại
Việt Nam, retrived on 31 January, from: https://vietnambiz.vn/thuong-hieu-ca-phe-nao-
co-do-nhan-dien-cao-nhat-tai-viet-nam-20221221153142394.htm#:~:text=C%C3%A1c
%20th%C6%B0%C6%A1ng%20hi%E1%BB%87u%20c%C3%A0%20ph%C3%AA
%20kh%C3%A1c%20c%C3%B3%20%C4%91%E1%BB%99%20nh%E1%BA%ADn
%20di%E1%BB%87n,hay%20Aha%20Coffee%20(17%25).