G7 Coffee Of Trung Nguyen Group

Published Date: 02 Nov 2017

Table of Contents

Abstract 3

Introduction & Background 4

Introduction 4

Background 4

Statement of the Problem 5

Statement of the Research Objectives 5

Definition of Terms 6

Significance of the Study and Research Value 6

Scope and Delimitations 7

The reason why G7 Coffee has not been famous in the world 8

The ability of G7 Coffee from Trung Nguyen Group to be famous throughout the world 9

The fact 9

Environmental Analysis 10

The competition between G7 and Nescafe 12

The way how Trung Nguyen Group increase the world wide popularity of G7 Coffee 14

Recommendation 15

Conclusion 16

Reference List 17

Appendix A 19

Appendix B 27

Appendix C 33

Appendix D 34

Appendix E 35

Abstract

The principal objective of this paper is to know exactly the current situation of Trung Nguyen Group’s G7 Coffee and then, to give a recommendation for a suitable Marketing strategy and PR campaign for that G7 Coffee.

In this paper, not only some information about G7 Coffee of Trung Nguyen Group, but also the feeling of some customers in the world about it, will be provided. And then, the researcher will be able to have an overall evaluation of G7 Coffee situation. Finally, an analysis and some recommendations for Trung Nguyen Group’s G7 Coffee will be provided.

Introduction & Background

Introduction

In these days, people are working in such a fast pace. Therefore, coffee has become one of the most favorite kinds of drinks. Many people drink coffee to be able to work or study more effectively. When they feel so tired, some employees or students will need a five or ten minutes break just to drink a cup of coffee. Moreover, someone even have drinking coffee as one of their hobbies. Therefore, in these days, it is quite easy for consumers to buy a cup of coffee at one coffee shop, a can of coffee from the vending machine, or just get some instant coffee sachets at the supermarket. When people think about coffee, they will think of some popular brands, such as, Nescafe, Starbucks, Gloria Jeans, etc.

However, it is the fact that, according to the BBC News in 2012, Vietnam has just surpassed Brazil to be the world’s largest coffee exporter. (BBC , 2012). Furthermore, G7 Coffee– the major product from Trung Nguyen Group – the greatest coffee company in Vietnam – also has high quality like the coffee of those brands. And thus, there are some questions arising from this fact, "Why doesn’t the G7 Coffee from Vietnam become as famous as the coffee from those popular brands, in all over the world?", "Can it be?" and "How can it?"

Background

Trung Nguyen Group was established in June 16th, 1996. At that time, it was just a small company in Buon Me Thuot, which is one of the three main highlands for growing coffee in Vietnam. Nowadays, according to Trung Nguyen’s home page, Trung Nguyen Coffee has been available in over 50 countries in the world. In addition, Trung Nguyen Coffee is even chosen by the government for any international meetings or conferences. It can be said that, Trung Nguyen Coffee has truly become a Vietnamese iconic brand. (Trung Nguyen, 2012) (See Appendix A)

Statement of the Problem

As mentioned above, in July, 2012, Vietnam has become the number one coffee exporter in the world. According to the Vietnamese Ministry of Agriculture and Rural Development (MARD), the coffee production of Vietnam has been well-developed since 1996 and then, had been the world’s second largest coffee exporter for a long time. (Zhi, 2013)

In addition, Trung Nguyen Coffee has become the leading brand in the coffee industry of Vietnam. Thus, the development in the global market of this greatest coffee company from the world’s largest coffee exporter can be a considerable issue.

There are some questions to be considered:

- Why doesn’t the G7 Coffee from Vietnam become as famous as the coffee from those popular brands?

- Can it become as famous as those popular coffee brands, in all over the world?

- If it can, how can it increase its worldwide popularity?

Statement of Research Objectives

Those guiding questions involve the following research objectives:

- To identify the reasons why the G7 Coffee of Trung Nguyen Group – the best coffee company from one of the world’s major coffee exporters like Vietnam – couldn’t become a well-known brand in the world.

- To emphasis and then, analyze the advantages and the current situation of G7 Coffee and Trung Nguyen Group, and also briefly mention about the competition between G7 Coffee of Trung Nguyen Group and Nescafe of Nestle.

- To give suggestion of a way to perform the business along with some suggestions in marketing that is suitable with the condition of G7 Coffee and Trung Nguyen Group.

Definition of Terms

Consumer Insight (CI): CI is the customers’ own points of view about some specific issues, such as their needs or their attitudes. The CI is identified when the information about customer, such as customer knowledge or customer motives, is collected and interpreted for a business to acquire and also retain their customers.

Universal Consumer Insight (UCI): The UCI can help company to overcome the differences between the consumers from different countries by separate and even remove those differences. It is because of the reason that, there is the same UCI for all the consumers from many different countries in the world, even when they are different in culture, religion, language, genders, etc. When the UCI is identified, it is when the company is also able to identify customer’s main reasons for getting a product. Or, in other words, it is to identify the major psychological factors of the consumers.

Significance of the Study and Research Value

. Director/Executives of the Trung Nguyen Group: At first, this paper will be primary significance to the chairman of Trung Nguyen Group – the owner of the G7 coffee. The main subject of this paper is to support Trung Nguyen Group on choosing the best ways to run its business.

. Investors: Furthermore, this paper will also be significance to the investors. The paper may point out the advantages of Trung Nguyen Group, so people might be able to decide if they should invest in the company or not.

. Researcher: As a student, the researcher can benefit from doing this research by making readers aware of Trung Nguyen’s existence in the coffee industry. Moreover, it is the fact that, me – as the researcher – who is also a loyal consumer of G7 coffee of the Trung Nguyen Group. Therefore, it will be quite interested to know more about the coffee company that the researcher likes.

Scope and Delimitations

At first, the researcher will focus on the following:

The reason why the G7 Coffee of Trung Nguyen Group couldn’t become a well-known brand in the world.

The advantages, the ability, the current situation of G7 Coffee and Trung Nguyen Group and also a little bit about the competition between G7 Coffee and Nescafe.

Due to time, manpower and budgetary constraints, the researcher of this topic also intends to focus on the following:

Business strategies: This paper will focus on some factors of the business strategies that should be employed by Trung Nguyen coffee company.

The reason why G7 Coffee has not been famous in the world

There might have been many factors that affect the development of Trung Nguyen Coffee – G7. However, in the researcher’s own point of view, the main reason for this is the trade embargo against Vietnam.

In 1964, there was a trade sanctions against the North of Vietnam that was introduced by the US. And then, in 1975, the US continued to introduce a trade sanctions against the whole country. Although the economist said that, Vietnamese work force was really well-educated, diligent, and Vietnamese resources were untapped. Because of that trade embargo from the US, Vietnam had started to become one of the poorest countries in the world and the poorest in Southeast Asia. (Shenon, 1994)

However, 19 years after North Vietnamese troops captured Saigon, thanks to the pressure of so many US companies that wanted to have their business in Vietnam, president Bill Clinton decided to lift the American trade embargo against Vietnam. (Cockburn, 1994)

And, until now, Vietnam has just been a developing country. And thus, the current popularity of Trung Nguyen Coffee – G7 – is enough to be such a miracle of the economy in Vietnam. The current popularity of Trung Nguyen Coffee will be discussed in detail later.

Furthermore, it is the fact that, all the businesses of those popular coffee brands mentioned above began much earlier than Trung Nguyen Coffee Group:

The first Starbucks was opened in 1971, at the Pike Place Market in Seattle. (Starbucks Corporation, 2003)

Nescafe was first introduced in 1938, in Switzerland and started to be such a great success in Europe. (Nestle Group, 2013)

The Gloria Jean’s Coffees started in 1979, in the North of Chicago, USA. (Gloria Jean's Coffee, 2010)

Therefore, in this case, the researcher recognizes that, a comparison between the reputation of Trung Nguyen Coffee Group, which started in 1996, and the reputations of those famous brands will be quite ridiculous.

The ability of G7 Coffee from Trung Nguyen Group to be famous throughout the world

The fact

Firstly, there should be a brief summary about the history and the current size of the Trung Nguyen Group.

As mentioned above, Trung Nguyen Group was established in June 16th, 1996. At that time, it was just a small company in Buon Me Thuot, which is one of the three main highlands for growing coffee in Vietnam. However, after only 10 years, nowadays, with the talented chairman – Dang Le Nguyen Vu - Trung Nguyen Group has become one of the greatest Vietnamese companies, with 6 member companies: Trung Nguyen Corporation Joint-Stock Company, Trung Nguyen Instant Coffee Joint-Stock Company, G7 Commercial and Service Company, Trung Nguyen Limited Liability Company, Trung Nguyen Coffee and G7Express Franchise, and Trung Nguyen International Holding Pte Ltd, which is located in Singapore. The products of Trung Nguyen Group are available in more than 60 countries, such as Malaysia, Thailand, Korean, Australia, United Kingdom, United States, etc. (Truong, 2009)

Trung Nguyen Group is the first company in Vietnam to have the franchise business model. In these days, there have been more than 1000 Trung Nguyen Coffee Shop and G7Express with the franchise model in Vietnam, and more than 10 shops in some countries, such as America, Japan, Thailand, China, Cambodia, etc, and Singapore. For example, just in Singapore, there are 3 Trung Nguyen Coffee shop at Katong Mall, Liang Court, and Marina Bay Sands; and there are also 2 G7Express Café at Changi City Point and Toa Payoh. (Trung Nguyen, 2012)

There is such a good a post ‘Vietnamese Cafes – Authentic Vietnamese Food in Singapore’ on the ‘Twice As Delicious’ website about one of the Trung Nguyen Coffee shop.

"Trung Nguyen provides a pleasant ambience to chill out with its spacious sofa seats (and not fight the weekend crowds in Starbucks)"

"G7 Express Cafe is owned by the Trung Nguyen group. G7 offers an instant coffee option (vs. the traditional drip coffee) and a wide variety of banh mi (Vietnamese baguette)."

(Karyn, 2012) (See Appendix B)

Trung Nguyen Group has Trung Nguyen Coffee as its major brand, which includes many sub-brands: Creative Coffee, Weasel kopi luwak and Legendee simulated kopi luwak coffee, Passiona coffee with low caffeine for lady, and G7 Instant Coffee – its most popular brand. There are some products under the same brand line – G7 Instant Coffee: Black coffee, 2 in 1 coffee, 3 in 1 coffee, and flavored coffee.

According to an Australian website that selling Vietnamese coffee, the G7 Instant Coffee has the richer and full-bodied flavor, which is not found in any other instant coffee. The G7 Instant Coffee is the first and only instant coffee in the world that is processed from green and unroasted beans, which results in such a smooth and non-bitter coffee. Just one sachet of G7 Instant Coffee is enough to make a 6ounce cup. Each sachet of G7 Coffee has only 8 grams of sugar and G7 Coffee is fee of trans-fat. Moreover, the non-dairy creamer ingredients of G7 have met the standards as 100% milk-free of the US Food and Drug Administration (FDA). The G7 products have all been independently tested by the labs in Germany for safety and purity. Therefore, any fans of the unique taste and the high quality of G7 Instant Coffee will accept no substitute. (Viet-Coffee, 2009)

The researcher even found a ‘Trung Nguyen G7 Instant coffee ‘topic on the ‘expat-blog’ forum, in which, Mr. Wang Lea - the Singaporean member who created the topic said that, he went to Saigon (Ho Chi Minh City) for a short trip and he wanted to stock up some G7 Instant Coffee. The G7 Instant Coffee was recommended to him by a Taiwanese friend working in Ho Chi Minh City and then, he and even his colleagues started to love the G7 Instant Coffee very much, because of its unique aroma. Thus, Mr. Wang Lea even planned to buy at least 15 boxes of G7 Instant Coffee in Vietnam and then bring back to Singapore. (Lea, 2012) (See Appendix C) This can be such a great real evidence for the quality of G7 Instant Coffee.

Environmental Analysis

After the consideration of the current situation of the G7 Coffee and Trung Nguyen Group, there is an environmental analysis for G7 Coffee and Trung Nguyen Group. Here is the SWOT Analysis for G7 Coffee of Trung Nguyen Group in the international market:

S – Strength

- Great raw materials to produce coffee, because Vietnam is the largest coffee exporter in the world.

- As mentioned above, G7 Coffee has a unique and high quality that no other coffee might be able to have.

- G7 is a simple but meaningful name that is easy to be remembered.

W – Weakness

- G7 Coffee chose Nescafe to be its major competitor, which is such an unequal battle. This will be discussed later in a separate part.

- Trung Nguyen Group might have not been so well-experienced in corporate with foreign partners. Therefore, the distribution channels might not be managed very well.

O – Opportunity

- Vietnam has joined the WTO, so it is easier for Trung Nguyen to be more famous, not only in the global market, but also in the local market.

- In these days, the instant coffee has become an ‘everyday product’ (common product), because drinking coffee has become a habit of many people. Therefore, it will be easier for G7 Instant Coffee to join in a new local market.

T – Threat

- The economy of Vietnam is quite unstable, and the economic growth always goes along with the inflation. And thus, it might be difficult for Trung Nguyen Group to get the raw materials for producing enough coffee needed.

- There are many substitutes for the instant coffee, such as the canned coffee or coffee at the coffee shop. Moreover, instead of drinking coffee when feeling so tired, people might choose the energy drinks, such as Red Bull.

The competition between G7 and Nescafe, Starbucks

In reality, a company always has one major competitor, such as Coke and Pepsi, McDonald’s and Burger King, or even the giant Microsoft has Linux to be its main competitor. And, in the case of the G7 Coffee of Trung Nguyen Group, its main competitor is the Nescafe of Nestle.

Last year, in November, there was an interview of the Reuters in Switzerland with Dang Le Nguyen Vu – the chairman of Trung Nguyen Group. Vu said that, Trung Nguyen Group was ready to join in the Western market, and thus, they would make an effort to contend against those popular global brands, such as Starbucks or Nescafe. (Thomasson, 2012)

However, in this paper, the researcher will just focus on the competition between G7 Coffee and Nescafe, because Nescafe has already been the great major competitor of Trung Nguyen in Vietnam. In the Vietnamese local market, the G7 Coffee even made Nescafe to change its current strategy in Vietnam.

From the day that Trung Nguyen Group started to offer the G7 Coffee, Nescafe had to change its slogan really often, to compete with every new slogan from G7 Coffee. For example, at the beginning, G7’s slogan was "Help you think stronger", and Nescafe’s slogan became "More delicious, stronger taste of coffee". After that, the next slogan of G7 was "Extremely strong taste of coffee" and the reaction of Nescafe was "Are you strong enough to try?" And finally, G7’s slogan became "Strong is not enough, it must meet the taste." At that time, the Nescafe Viet has started to be offered in Vietnam. In fact, there was the first time that, a great and powerful company like Nestle had to offer a new and separate product for the local market in one country, just to fight against a local competitor. In Vietnam, G7 has been the top-selling brand of instant coffee, ahead of the instant coffee of Nescafe and the other local brand (ANTĐ, 2010) (See Appendix D)

Unfortunately, in the global market, the case might not be at that easy for G7 Coffee. About this competition with Nescafe in the global market, the chairman of Trung Nguyen Group even had to say that,

"We are like a grasshopper fighting against a giant elephant. In terms of technology, marketing, Nestle is way ahead of us," (Thomasson, 2012)

Mr. Vu said that, there strategy had to be smarter and much more focused. It will take much extra effort from the Trung Nguyen Group, because a Vietnamese brand like G7 is still an unknown brand in many countries in the world.

In addition, about another popular brand – Starbucks, the researcher also found a few words of Mr. Vu in the interview with the Reuters, about Starbucks:

"They are great at implanting a story in consumers' minds but if we look into the core elements of Starbucks, what they are doing is terrible. They are not selling coffee, they are selling coffee-flavored water with sugar in it," (Thomasson, 2012)

And thus, it can be said that, Mr. Vu is quite confident about the quality of Trung Nguyen Coffee, compared to the quality of Starbucks’ Coffee.

Consequently, in the researcher’s objective opinion, it can be concluded that, even when there are also some difficulties, the G7 Coffee of Trung Nguyen Group absolutely has the ability to increase its worldwide popularity.

The way how Trung Nguyen Group increase the worldwide popularity of G7 Coffee

If the G7 Coffee of Trung Nguyen Group is considered to have enough ability to increase its popularity in the world, there should be a possible way for Trung Nguyen Group to do it. And, here are the researcher’s own points of view about that.

First of all, about the quality of G7 Coffee, Trung Nguyen Group not only need to retain the current unique flavor of it, but also to listen to the customers to know whether the products have already met their needs or there should be some improvement.

Secondly, in this case, Trung Nguyen Group might have two strategic target markets to focus on: the market of instant coffee sachet and the market for the coffee shops with G7Express and Trung Nguyen Coffee franchise. And thus, there will be many problems to be considered, such as the list of products at the coffee shop, the standard sale process, etc or even the marketing strategy. All of those things should be not only good, but also different.

Nowadays, in the reality, when there are so many brands in the world, Trung Nguyen Group need to be great in a different way, to be able to stand out from the crowd. And, to be able to find out the difference for its brand, Trung Nguyen Group will have to make an effort to identify the Universal Consumer Insight (UCI). (See Appendix E)

In the local market of Vietnam, Trung Nguyen Group succeeded in determine the Consumer Insight (CI), they emphasized the national spirit of Vietnamese consumer. However, nowadays, in the global market, the strategy that Trung Nguyen Group is employing, which is based on the CI of Vietnamese consumer, might have no effect. Therefore, Trung Nguyen Group will have to identify the UCI. When the UCI is succeeded to be identified, both the Vietnamese consumers and the global consumers might be influenced by the marketing campaign of Trung Nguyen Group, which will base on that UCI.

Moreover, to be able to be succeeded in building a global brand, Trung Nguyen Group will need to tell the global consumers a unique and fantastic story about their product. About this, Mr. Dang Le Nguyen Vu – the chairman of Trung Nguyen Coffee – also have the same point of view with the researcher:

"Our ambition is to become a global brand,"

"American consumers don't need another product. They need another story,"

"They sing great songs about sustainable development but at the end of the day, the return on investment is what they care about. They don't grow coffee, do they? We do."

That’s what Mr. Vu said in the interview with the Reuters. And after that, he also noted that Trung Nguyen Group also has an objective to improve the lives of people in the coffee-growing highland area.

In the interview of the FBNC channel on TV, Mr. Vu also emphasized the three questions that Trung Nguyen Group had to answer, and one of those questions was:

"What is the story that the world need to get from Trung Nguyen? And what is that attractive and unique story?"

To answer those questions mentioned above, there must be a much greater research from the research on this paper, and that should be a job for Mr. Dang Le Nguyen Vu and his Trung Nguyen Group. And thus, the researcher is able to give only a small recommendation for Mr. Vu in the next part of the paper.

Recommendation

It is the fact that, every country in the world have its own and unique drinking habit. May be, many people in many different countries might go together like coffee. However, each of them might drink coffee in such a different way. Therefore, Trung Nguyen Group might need to carefully learn about the target market that they intend to join, before they start to do it.

Moreover, in the researcher’s own opinion, Mr. Vu needs to remember one basic thing: No matter how great you might think that the quality of your products is, there is always somebody who might not agree with it.

Conclusion

To conclude, the researcher would like to summarize those answers for the guiding questions of this research:

Firstly, why doesn’t the G7 Coffee from Vietnam become as famous as the coffee from those popular brands? In fact, and in the researcher’s own point of view, the main reason for this is the trade embargo against Vietnam. Because of that trade embargo from the US, Vietnam had started to become one of the poorest countries in the world. Therefore, all the businesses of those popular coffee brands, such as Nescafe, Starbuck, or Gloria Jean’s began much earlier than Trung Nguyen Coffee Group

Secondly, does G7 Coffee of Trung Nguyen Group have the ability to become as famous as those popular coffee brands, in all over the world? Because of the fact mentioned above about the quality and the situation of Trung Nguyen Coffee, it can be said that, even when there are also some difficulties, the G7 Coffee of Trung Nguyen Group absolutely has the ability to increase its worldwide popularity.

And finally, if G7 Coffee of Trung Nguyen Group has enough ability, how can it increase its worldwide popularity? Trung Nguyen Group will have to identify the UCI. When the UCI is succeeded to be identified, both the Vietnamese consumers and the global consumers might be influenced by the marketing campaign of Trung Nguyen Group, which will base on that UCI. Moreover, to be able to be succeeded in building a global brand, Trung Nguyen Group will need to tell the global consumers a unique and fantastic story about their product.

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