ASSESSMENT 3 | GROUP REPORT

BUSINESS ANALYSIS

Prepared by Class
GROUP 6 PMk-49-06

Nguyễn Hương Giang | Lê Tuấn Thùy Linh | Nguyễn Ngọc Thanh Mai
Nguyễn Ngọc Huyền Trân | Trần Thị Cát Tường

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ASSESSMENT 3 | GROUP REPORT

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 ASSESSMENT 3 | GROUP REPORT

While Highlands Coffee is involved in B2B operations, including the production,

manufacturing, and distribution of instant coffee packs and canned coffee to
various business entities, within the scope of this business analysis, the focus
is exclusively on Highlands Coffee's B2C sector, the consumer market served
through its coffee shop franchises and physical stores.

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ASSESSMENT 3 | GROUP REPORT

Table of
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 I. MARKETING ENVIRONMENT - A. MACRO ENVIRONMENT Group 6

The coffee industry in Vietnam is This has become a significant

predicted to grow rapidly in the market opportunity for Highland
next years as the population Coffee to adjust, improve, market
continues to expand at an average their products, and marketing
rate of one million people per year strategies as well to cater to
(Dan so Viet Nam moi nhất, 2023), younger generations. They could
specifically Gen Z with different expand their menu with a wide
range of diverse beverages, or
coffee preferences, requiring more
offer different types of indoor and
than just a cup of coffee in a coffee
outdoor space to meet their
shop, such as the space, pleasant
demand from chatting with friends
experiences or even ethical
to studying.
sourcing practices.

Growing income allows

Vietnamese to be able to spend
more on premium goods and
services, and consume and buy
more luxury items. According to
the survey of salary trends from
ECA International (Chi, 2022),
Vietnam is expected to have the
world’s second-largest salary
growth rate in 2023.

This means that now consumers are willing to spend more money to
enjoy not only specialty coffee products but also premium
experiences, resulting in Highland coffee focusing on offering high-
quality coffee, such as Robusta & Arabic coffee beans and innovative
products. 5
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 I. MARKETING ENVIRONMENT - A. MACRO ENVIRONMENT Group 6

Post-Covid-19, the global economy in

general and Vietnam in particular, has faced
many challenges, such as high inflation,
economic slowdown, and high
unemployment rate as a result of mass
layoffs by firms.

Besides, in 2022, China still

persisted Zero-Covid policy All of these lead to an increase in the cost of
- Vietnam's major source supply resources and production for coffee
of foreign tourists and the beans in particular, packaging or even
Russian-Ukraine war also administrative policies and transportation
exacerbated the situation, (Viện sĩ, PGS.TS Nguyễn Ngọc Điện, 2023).
pushing the whole world
into a serious crisis.

Therefore, in 2022, Highlands Coffee announced that they would adjust the
price for products, specifically an increase from 10% to 15% for most items,
while the tea category would experience a rise of up to 18% for the large size.
To explain the modification of the selling price, the brand argued that it
needed to do that to maintain and increase the product quality, services, and
customer experiences at the pace of market fluctuations (“VI Sao Highlands
coffee đồng loạt Tang giá ban?” n.d.).

Page 63 of 10
I. MARKETING ENVIRONMENT - A. MACRO ENVIRONMENT Group 6

Climate change has caused extreme consequences to the

coffee industry, specifically the decreased yields, the higher
risk of water shortage or even the rapid growth of pets and
diseases, leading to negative outcomes of productivity,
quality and economic efficiency. This also impacts customer
demand for sustainable coffee practices.

Coffee Leaf Rust Disease - posing threats to

Vietnamese coffee production, impacting heavily
on the coffee supply chain, especially during rainy
seasons in the Central Highlands, where most
coffee plants are grown in Vietnam.(Tuyên, 2021)

To address these problems, the company should invest in sustainable

farming practices to adapt to climate change. In early October 2023,
Highland Coffee announced the construction of a factory in Vung Tau.

To achieve the objective of sustainable development, the brand also

applies several environmentally friendly manufacturing technologies for
modern water treatment systems. In particular, this factory will install solar
energy equipment employing international standards to reduce energy
consumption and the burden of the national power grid.
(Highlands Coffee, 2023)

Page 73 of 10
I. MARKETING ENVIRONMENT - A. MACRO ENVIRONMENT Group 6

in Vietnam...
To keep pace with emerging
trends, coffee shop chains like
Highlands Coffee and their
competitors are integrating
technology from the initial stages
to the final processes, embracing

mobile device food ordering

specialized software for
management
food delivery services
cashless payment systems.

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 I. MARKETING ENVIRONMENT - A. MACRO ENVIRONMENT Group 6

Tax authorities' engagement further influences Highlands Coffee, with tax

agencies playing a crucial role in regulating and monitoring tax compliance
within the F&B sector. These political factors collectively shape the macro-level
environment, influencing Highlands Coffee's strategies, financial considerations,
and adherence to legal requirements in its micro-level business operations.

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 I. MARKETING ENVIRONMENT - A. MACRO ENVIRONMENT Group 6

In Vietnam, Highlands Coffee operates within a

cultural environment rooted in national identity and
traditions, prioritizing the preservation of historical,
familial, and culinary practices.

Coffee, beyond being a beverage, culturally

Coffee,
embodies a way of life, fostering connections and
social interactions through daily consumption. The
pervasive "coffee culture" is diverse, spanning street
vendors to upscale coffee shops, showcasing unique
regional preferences and contributing to its richness.

This duality extends to the coffee culture, offering

both opportunities and challenges:
Preferences favor both local and international
influences, demanding strategic marketing
decisions. For Highlands Coffee, balancing offerings
to cater to traditional preferences while resonating
with cosmopolitan consumers is crucial, requiring
alignment with prevalent Vietnamese values.

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I. MARKETING ENVIRONMENT - B. MICRO ENVIRONMENT Group 6

Gender: Male and Female

Geography: live in big cities such as Ho Chi Minh City, Ha Noi,
Da Nang,..
Age: 18-54
Income: Middle income
Lifestyle: Life revolves around study and work
Behavior: Often gather with friends on the weekends, want to
find a place to relax and check-in.
Shopping habit: Often use products at home (through food
delivery applications) and physical stores.
(Vo, 2023)

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 I. MARKETING ENVIRONMENT - B. MICRO ENVIRONMENT Group 6

The Coffee House, Phuc Long, and Trung Nguyên are primary competitors of Highland
because they also target the middle class with stable income, students, and office workers who
enjoy tea and coffee. They come to coffee shops not only to chat but also to expand their
network. Besides, they also want to find a spacious, quiet, comfortable space to study and
work. ("Phân tích chiến lược marketing của The Coffee House," 2023),(Loannguyen, 2023). These
brands compete for price, flavor, location, and services.

Starbucks is the secondary competitor. They are a high-end brand targeting office workers,
high-income customers, and foreigners who prefer foreign coffee flavors.

FACTORS INFLUENCE

-The Coffee House attracts more

diverse customers who want gatherings
in coffee shops and freelancers.
Understand that Vietnamese customers like to Therefore, they create a comfortable
go to cafes because of the space rather than feeling for customers and promote
to enjoy coffee. Therefore, The Coffee House curiosity by using greenery and
focuses on providing open space, wide windows to provide sunlight. Highlands
seating, attentive service, and strong wifi to is different as its stores are cozy, and
customers. (Hoanguyen, 2023) incorporate cultural features so it's an
ideal place for work and signing
contracts ("Coffee House vs Highlands:
GiẢi MÃ SỰ KHÁC BIỆT GIỮA HAI THƯƠNG
HIỆU CÀ PHÊ "QUỐC DÂN", 2021). The
Coffee House also pays attention to
customers in groups when setting up
long tables that accommodate 8-12
people. This is The Coffee House’s
advantage over Highlands because
tables in Highlands are small and only
The fit a small group of friends.
Coffee - The Coffee House offers seasonal drinks, - Highlands recently had seasonal
House aiming at young customers who want to try drinks in their menu, catching up with
out new drinks. the latest trends with competitors to
attract young customers.

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 I. MARKETING ENVIRONMENT - B. MICRO ENVIRONMENT Group 6

FACTORS INFLUENCE

Highlands' strength is its

Phuc Long's strength is its unique and different tea
coffee drinks which have a
products. Their tea has an acrid taste and medium
Phuc strong taste that suits the
sweetness that is suitable for office workers who need a
Long preference of Vietnamese
lot of "caffeine" to stay awake at work or those who are
people. However, their tea
health conscious (Loannguyen, 2023)
is not special.

Even though both

Trung Nguyên introduced a new version of The Gioi
Highlands and Trung
Cafe Trung Nguyen Legend. Not only providing special
Nguyên honor coffee
coffee flavors but leading coffee expert also provides
culture, Highlands don't
advice and shares interesting and inspirational stories
have any special
about coffee history, culture, and art, through
movements in making a
performances and tastings. The design of the exhibition
new experience for
spaces in the new The Gioi Cafe Trung Nguyen Legend
customers when they're
reminds us of the traditional homes found across Buon
drinking coffee. A new
Ma Thuot. As a result, The Gioi Cafe Trung Nguyen
version of The Gioi Trung
Legend has been welcomed in many provinces and
Nguyen Legend, apart
Trung cities of Vietnam such as Ho Chi Minh City, Hanoi, Nha
from their traditional
Nguyên Trang, Buon Ma Thuot, and Da Nang (Quỳnh, 2023).
coffee stores, is a good
way to attract customers
who enjoy novelty and
those who want to know
more about coffee culture.
This is also a competitive
edge of Trung Nguyên over
Highlands.

This brand offers de-caf coffee for those who don't Highlands orders are fixed
want to drink caffeine. It only contains half the amount and customers can not
of caffeine compared to normal coffee drinks. Besides, add which kinds of milk
the Starbucks menu is quite diverse: What makes that suit their preference
Starbucks different compared to other brands is apart or choose coffee drinks
Starbucks from products such as Espresso, Iced Coffee, and Iced with less caffeine.
Tea, the brand is creative in adding organic soy milk Therefore, those who are
and non-fat milk, coconut milk, and almond milk, very not used to the strong
suitable for those who care about their health. ("Menu flavor of coffee can get
Starbucks - Giá đồ uống Starbucks cập nhật mới nhất “coffee drunk" if they drink
2023," n.d.) in Highlands Coffee.

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 I. MARKETING ENVIRONMENT - B. MICRO ENVIRONMENT Group 6

Highlands Coffee sources its coffee

beans entirely from Vietnam,
specifically from coffee farms in The quality of sourced
Gia Lai, Đắk lắk, Buôn Mê Thuột, coffee beans
Ingredients The reputation of suppliers
and Lâm Đồng. The beans are
meticulously chosen from farms Effective quality control
situated on plateaus with The reliability of equipment
elevations exceeding 800m.
collectively influences the
specific product quality and,
consequently, the overall
Equipment Highlands partners with Toàn success and image of
Phát, a comprehensive supplier Highlands Coffee.
and
that is responsible for designing
machinery
bar and kitchen systems.

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 I. MARKETING ENVIRONMENT - B. MICRO ENVIRONMENT Group 6

Resellers

Highlands Coffee operates both

company-owned stores
licensed stores (franchisees)

This helps the brand reach a broad

consumer base and make its products
available in various settings.

However, managing a vast network of resellers poses challenges, including control

complexities, maintaining consistency, and potential brand image dilution. Negative
incidents with one reseller can impact the entire brand, affecting customer trust
nationwide and influencing the performance of other outlets.

Marketing Services Agencies

Highlands Coffee engages with advertising

agencies, such as Mango Digital Agency, to create
and execute marketing campaigns for brand
awareness, and with technology partners to
develop and maintain digital platforms like AWING, a
company that specializes in digital marketing
through a shared free wifi system
linked to the brand’s website.

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 I. MARKETING ENVIRONMENT - B. MICRO ENVIRONMENT Group 6

Physical Distribution Firms

Highlands Coffee collaborates with distributors to transport materials and

ingredients from suppliers to regional retail stores, and delivery companies
transport products from the point of origin (Highlands Coffee stores) to the
end consumer's location to fulfill online orders and deliveries through the
brand’s app and other food delivery apps (Grab, Shopee Food, Now…)

This includes careful handling to maintain product quality during transit

and timely delivery to meet customer expectations.

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 II. SWOT ANALYSIS Group 6

Strong reputation in the cafe market

According to Highland Coffee:
In the late 1990s, after transforming from coffee bags retailer to a cafe,
Highlands Coffee started to be more popular among the public in Vietnam.
Over the next 10-year period, this brand was transferred to Jollibee, and
became one of the top coffee shop chains in Vietnam in 2020 then
The growth in reputation and popularity of Highlands can be witnessed in
its market share with more than 500 stores opened in Vietnam
Positioning is a high-end brand. using coffee here, customers feel that they
belong to a high class.
Market Share
Highlands is one of four coffee and tea brands with Phúc Long, The Coffee
House và Trung Nguyên Legend accounting for the biggest market share in
F&B. (Mordor Intelligence. 2023)
The growth rate in the expanding market of Highlands was experienced in
roughly 700 new stores in 2023. (Vietdata, 2023)
In 2020, total revenue reached nearly 2.140 billion dong. (Theinvestor,
2023)
Location
Style and culture blend Vietnam and the West to create new experiences
for customers. (Highlands Coffee, 2023)
Located in major city centers, residents, office buildings, and schools are
easily approachable → many customers of diverse ages.

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 II. SWOT ANALYSIS Group 6

The attitude of the staff is not really friendly, making customers feel
uncomfortable.
In 2/2020, at a Highlands store in HCM City, a customer mistaken for a
lottery vendor because of being disabled was ejected by a Highlands
Coffee’ server. (Tạp chí Tài chính Doanh nghiệp, 2020)
There is not too much innovation
in the product portfolio, when their coffee menu only serves traditional
Vietnamese coffee types, and several signature Westen coffee. .

Price: pretty high for the major public.

Range from 29.000 dong to 80.000 dong
In 6/2022, Highlands Coffee officially
adjusted the price of all products by
increasing by 10% - 15%. (Highlands
Coffee, 2022). Due to that, a backlash
among the public grew against the price
policy.
There is not much innovation
in offline activities to increase customer's
experiences compared to competitors, for
example: Trung Nguyen’ exhibition.
Highlands stores concentrate mostly on
city centers. (According to Highlands
Coffee shops map)
The proportion of potential customers in
the outskirts can not reach its products, as
a result in losing potential total revenue

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II. SWOT ANALYSIS Group 6

A large market and potential gains in expanding products: more and

more cafes with high quality services.
According to Euromonitor, coffee and tea shop chain marketing in
Vietnam has a scale valued at 1 billion USD/year.
In addition, based on the research of the World Bank, the Vietnam
market consumes roughly 70,000 tons of coffee/year.
Potential appealing to Vietnamese taste
Vietnamese prefer to enjoy traditional milk coffee, and Vietnamese Iced
Coffee; therefore, whether in luxury cafes or common coffee shops,
those drinks always appear on menus.
Being a local brand, Highlands Coffee has a lot of potential in deeply
understanding Vietnamese culture.

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II. SWOT ANALYSIS Group 6

Highly competitive industry

Foreign rivals such as Wayne's Coffee, Starbucks, The Coffee Bean,
the Running Bean, The Workshop, …
increasing competition in terms of space and prices. In this regard,
Highland is having a problem with the size of the glass when the
amount of water in size M and size L is not different.

When a customer buys a small coffee

cup for 29,000 and sits for
a long time from 8 am to 5 pm, during those 9
hours, the customer uses wifi, experiences the
air-conditioned space, takes up a part of the
restaurant space, and more importantly
affects the revenue when the restaurant is too
crowded but no seats.

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 III. STDP - A. SEGMENTATION Group 6

PROFILE DEMOGRAPHIC PSYCHOGRAPHIC GEOGRAPHIC BEHAVIORAL

Occasions: Social gatherings,

18-24 years Energetic and full
studying, relaxation
old(9,7% total of vigor Urban areas:
Highschoolers, Benefits sought: Trendy drinks,
population)
College * Large cities: social atmosphere, Wi-Fi
(Kemp, 2023) Requiring modern
students HCM, Ha Noi access, affordable prices
and sophisticated
* Tourist User status: regular users
Passive income space.
attractions: Da User rate: medium
Nang, Nha Trang,
Mature, polite, Vung Tau
health-conscious Occasions: Work meetings,
25-44 years Concentrated in quick breaks, social
old(31,6% total Seeking a place densely gatherings
population) not only populated central Benefits sought: Convenient
Professionals
prestigious, location, value for money,
districts, historical
Middle income identifying their healthy options, Wi-Fi access
sites, and large
or higher status, but also User status: regular users
quiet, and commercial User rate: heavy
relaxing. centers.

Located
Occasions: Leisure meetings,
inprominent
social gatherings, relaxation,
locations: office enjoying coffee with friends
45-54 years buildings, and
Enjoyable, relax and family
old(12,8% total
major street Benefits sought: Familiar
Older population)
Looking for a intersections, atmosphere, healthy options,
people clean, cool, cozy comfortable seating,
where has
Middle income
location. convenient traditional coffee options,
or higher
transportation. high-quality service
User status: potential users
User rate: medium

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 III. STDP - B. TARGETING Group 6

AT FIRTS
Highlands Coffee applied a concentrated marketing strategy for only high-end
customers with high income. After that, Highlands Coffee has changed from a
high-end brand positioning for businessmen and intellectuals to a
“popularization” strategy to attract more customers.

NOW
Highlands Coffee applies a differentiated marketing strategy for various potential
groups from high-income customers to middle-to-high-income customers –
university students and professionals. They are regular users. Due to the
increasing popularity of going to cafes to study and work among young people,
Highlands Coffee can attract these groups with a comfortable space. Moreover,
with the spirit of professionalism for ideal meeting points, Highlands Coffee can
become a frequent destination for office workers.

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III. STDP - C. DIFFERENTIATION Group 6

In the current situation of the coffee shops market where countless types of products
have nearly the same flavors in the same product line and prices, Highlands Coffee
still successfully maintains a steady position in the market, especially with the young.
Besides the active innovation in marketing to increase brand awareness, these
elements remarkably help the Coffee shop chain stand out in the Vietnam market.

01
Product Differentiation

According to Highlands Coffee:

Products are always assured of quality by using purely coffee beans and
a clean source of ingredients purchased directly at coffee farms.
Highlands cultivates a modern and upscale atmosphere, differentiating
itself from the traditional Vietnamese coffee shops. They target young
professionals and urban dwellers seeking a trendy coffee experience.
Emphasis on Vietnamese coffee culture: While offering international coffee
styles, Highlands highlights its roots in Vietnamese coffee heritage. This
appeals to both locals and tourists seeking authentic Vietnamese coffee.
Especially in fresh fruit-based products: This kind of product accounts for
profit as big as coffee products. Diversity in taste, and eye-catching helps
it be well-suited to every age who is not interested in coffee.
However, it faces competition from several other prominent coffee chains,
each with unique offerings and strengths. There are a comparison of
products across key areas (The information was gathered from Highlands
Coffee, The Coffee House, Phuc Long, Trung Nguyen public websites):

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 III. STDP - C. DIFFERENTIATION Group 6

01
Product Differentiation

Product Highlands The Coffee Trung

Phuc Long
Category Coffee House Nguyen

Arabica Arabica
Arabica and
Coffee and and Robusta-
Robusta
Beans Robusta Robusta dominant
blend
blend blend

Wide range Wide Traditional

of espresso- selection Vietnamese
Wide
based of tea- coffee,
Product range of
drinks, based instant
Variety tea-based
flavored drinks, coffee,
drinks.
coffees, especially ready-to-
freezes, teas in milk tea. drink coffee.

Low-range
Price Mid-range
Mid-range Mid-range to mid-
Range to high-end
range

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 III. STDP - C. DIFFERENTIATION Group 6

02 Service
When using products at Highlands's store experience, customers will have
different experiences from the space, environment, and professional staff
(According to Highlands Coffee).

Highland's space not only provides the experience of being a coffeehouse that
comes to a cup of coffee, but it also provides a comfortable “Work from Home” or
"Workplace" experience and offers high work performance and inspiration,
especially an ideal place to meet customers and partners.

However, it faces competition from several other prominent coffee chains, each
with unique points in-service experiences. There is a comparison of service across
key areas (The information was gathered from Highlands Coffee, The Coffee
House, Phuc Long, and Trung Nguyen public websites):

Highlands Coffee: Extensive staff training, high service accuracy and speed,
modern and upscale ambiance, robust loyalty program, and advanced
technology integration.
The Coffee House: Friendly and approachable staff, comfortable and inviting
atmosphere, focus on individual customization, and developing a loyalty
program.
Phuc Long: Efficient service, high accuracy with fast order processing, mix of
modern and traditional elements, and simple loyalty program with mobile app
integration.
Trung Nguyen: Traditional and respectful service, focus on Vietnamese coffee
culture, simple and nostalgic ambiance, and occasional promotions.

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III. STDP - C. DIFFERENTIATION Group 6

03 Logo

Highlands's trademarks differ from those of other brands; a

simplification in design, image, and color is very similar, creating a

seamless connection in the design pole inspired by the high mountain

areas and the hot gamut color in the Dak Lak, where the fresh coffee
beans are cultivated.
From its early days, Highlands Coffee's logo has been a distinctive red
oval with two smaller ovals inside, inspired by the image of a coffee
bean.
In the new iteration in 2021, Highlands Coffee has retained the three
elements of mountain, water, and plain, arranged according to the Yin-
Yang philosophy of East Asian culture. This is a nod to the brand's

commitment to preserving traditional values and community spirit.

From above, the layout still evokes the image of a cup of coffee.
In terms of branding, the four main colors of the previous logo, including
red, white, coffee brown, and earth brown, have been converted to a
uniform red color. Red also represents the spirit of patriotism, passion,
appreciation of coffee heritage, and dedication to customer and
community service that the brand aspires to.
In addition, the representation of the logo on a transparent background
with trendy pastel color choices is a new experiment by Highlands Coffee.
The brand develops a system of 18 extended colors called "community
colors", representing the spirit of integration and compatibility of the new
brand direction regardless of changes in space or context.

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III. STDP - D. POSITIONING Group 6

Positioning statement
To those who not only have a love for coffee, tea and delicious cakes but
also need a place to connect, Highlands Coffee is a coffee brand offering a
rich flavor of Vietnamese coffee and a space for the community, where
people can bond with the common ground of Passion - Kinship -
Appreciation - and Mutual Support. In Highlands Coffee's stores, customers
can share their passions, strengthen their relationships, and find the feeling
of "belonging". What Highlands Coffee aims to do is not only to contribute
to the country's new developments, but also to always be very close to the
daily life of Vietnamese people ("HIGHLANDS COFFEE LÀ CỦA CHÚNG MÌNH!,"

2022).

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III. STDP - D. POSITIONING Group 6

Positioning map
Map 1: Price vs Service
The chosen attributes for this map are price and service. According to Q&Me
survey, Highlands doesn't have as good service as Phúc Long and The Coffee
House, while the price for its products is only lower than Highlands and The
Coffee House.

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III. STDP - D. POSITIONING Group 6

Positioning map
Map 2: Variety vs Flavor
Even though drinks in Highlands have good taste (less favored than Trung
Nguyên), it has less variety compared to The Coffee House, Starbucks and
Phúc Long (Q&Me, 2022).

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IV. 4P - A. PRODUCT Group 6

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 IV. 4P - A. PRODUCT Group 6

a wide range of coffee options, for different preferences:

Phin Coffee: Traditional Vietnamese coffee
PhinDi: Modern Vietnamese Coffee for the youth
Espresso-based drinks (lattes, cappuccinos...):
provide an international palate for coffee lovers

The "Freeze" category suggests a selection of

international-inspired frozen or blended beverages,
offering coffee-based or other frozen mixtures.

The Freeze category is likely to include modern, creative,

and refreshing options, especially appealing in a country
with a warm climate like Vietnam.

The tea category signifies that Highlands Coffee

caters to non-coffee drinkers, offering a modern
interpretation of Vietnamese tea with natural
and aromatic flavors.
With the addition of fruits and toppings, these tea
beverages can be enjoyed with or without milk.

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IV. 4P - A. PRODUCT Group 6

Besides beverages, Highlands Coffee extends

its product variety to include cakes and
pastries. This complements the coffee
experience, providing customers with options
for snacks or light meals.
The cakes and pastries offered may include
both Vietnamese specialties (Banh Mi Que)
and international favorites (cakes), creating
a diverse and appealing menu.

In general, Highlands' products effectively align with the

Targeting strategy, catering to a diverse range of customers
spanning various ages (18-54), occupations
(students, professionals), and purposes for
visiting coffee shops (study, work, relaxation).

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 IV. 4P - A. PRODUCT Group 6

Customers have the flexibility The establishment offers versatile spaces,

to place orders directly with elegant indoor areas suitable for those
through the company's seeking privacy and tranquility, and outdoor
website or various electronic spaces featuring lush greenery for a more
food delivery applications. vibrant atmosphere.

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 IV. 4P - A. PRODUCT Group 6

The name "Highlands Coffee" evokes the

imagery of Vietnam's highlands, where
coffee is grown, emphasizing a connection to
authentic coffee origins and a distinct
Vietnamese identity.

"LUÔN TỰ HÀO" (ALWAYS PROUD) encapsulates the brand's spirit, emphasizing that pride
extends beyond physical stature. The phrase "NƠI CAO NÀO Ở DÁNG VÓC - MÀ LÀ Ở GÓC
NHÌN RỘNG MỞ" highlights that despite not being physically tall, the Vietnamese people
are renowned worldwide for their cleverness and adaptability. The journey of spreading
the pride of being born in Vietnam becomes an integral part of the brand's narrative.

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 IV. 4P - A. PRODUCT Group 6

The design philosophy of Highlands Coffee is

a harmonious integration of cultural
elements, modernity, and functionality,
evident across various elements:

Highlands Coffee embraces a Vietnamese spirit in its interior design, seamlessly

blending traditional and modern styles. The warmth of yellow lighting and ethnic
paintings creates a welcoming atmosphere. Unique marks such as bicycles, ao dai
(traditional clothing), non la (conical hats), and urban area photos distinguish
Highlands Coffee, establishing a connection with Vietnamese culture.

In some locations, Highlands Coffee adopts a Mid-Century Modern style, featuring

industrial designs with slightly dark colors. The furniture is multi-functional, with
tables suitable for work and seats designed for comfort. Green plants are
strategically placed to bring elegance and a calming effect to the ambiance.

The order counter is thoughtfully designed with eye-catching red tones in cake
cabinets or shelves. The menu is strategically arranged for easy visibility, ensuring
a seamless and appealing ordering experience.

The outdoor space is crafted with wooden furniture, dark-toned iron, and
occasionally bamboo or rattan materials. Recognizable red umbrellas provide
shade, creating a private and inviting atmosphere that customers can easily
identify from a distance.

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 IV. 4P - A. PRODUCT Group 6

Highlands Coffee consistently serves beverages in

plastic cups (equipped with transparent lids), plastic
straws, and plastic spoons at the store.

Unless customers order extremely hot drinks like

hot coffee, which are served in ceramic mugs,
the majority of beverages are presented in
plastic cups with plastic straws.

Both plastic and ceramic cups bear the

distinctive logo of the brand.
The red-colored plastic straws and spoons
maintain a cohesive visual identity with the
overall brand design.

This attention to packaging underscores Highlands Coffee's commitment

to ensuring that the packaging not only aligns with the brand's identity
but also plays a role in maintaining the freshness of its coffee.

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IV. 4P - B. PRICE Group 6

1. AVERAGE PRICE

Beverages
Range from 29,000 VND to 85,000 VND.
Predominantly priced between 45,000 VND and 65,000 VND.
Cakes and Pastries:
Food prices fall within the range of 19,000 VND to 35,000
VND.

37
 IV. 4P - B. PRICE Group 6

2. MAJOR PRICING STRATEGY

The price of drinks in Highland is not low compared to their competitors

(The coffee house, Trung Nguyen Legend, Cộng cafe). However, in return,

Highland offers ideal places to enjoy coffee while hanging out with

family and friends, study and have meetings with no time limit, which is

suitable for their targeted customers (people from the middle class,

office workers, and young people). Besides, customers can get a cup of

coffee that has quality ingredients in a clean environment with free wifi

and air-conditioning, adding to the value that these customers receive.

As Highland coffee shops are located in crowded roads and apartment

stores, it’s easier to find a store nearby without travelling long distances.

Even though Highlands increased its price by 10-15 % in 2022, revenue in

that same year reached 3569 billion VN, two times as much as that of

2021 (Yenhoang, 2023). It indicates that customers are willing to pay for

that price because they perceive products and services meet their

expectations. For that reason, the pricing strategy that Highland

adopts is Customer value-based pricing

38
 IV. 4P - B. PRICE Group 6

3. PRODUCT MIX PRICING STRATEGY

Product Line Pricing

According to Highlands Menu, this brand has:

Diversity in taste choices of drinks for each product line
Vietnamese PHIN coffee: Phin Sua Da, Phin Den Da, Bac Xiu
Freeze: Green Tea, Chocolate, Cookies and Cream, Caramel, Classic
Tea: Sen Vang, Thach Dao, Thanh Dao, Thach Vai, Xanh Dau Do
Difference in sizes (S, M, L) with differences in prices
→ lead to meeting the needs more efficiently of a wide range of customers.
The unequal cost between drinks. for example, the latte’s price is higher than
the cappuccino because a cup of latte involves more milk than the other
one.
The different style: coffee with foreign style will charge a higher price than
Vietnamese coffee (29.000 vnd).

39
 IV. 4P - B. PRICE Group 6

3. PRODUCT MIX PRICING STRATEGY

Optional product pricing:

Besides selling beverages,

the company supplies
customers with optional
products along with the
main products. for example,
when using coffee in
Highlands, customers can
order an enclosed cake or
bottled water. (Highlands
2023 menu)

40
 IV. 4P - B. PRICE Group 6

3. PRODUCT MIX PRICING STRATEGY

Product Bundle Pricing

Customers can choose from combo packages that are

affordable to them.

Combo Hưng Khoi: a traditional coffee size S, with a sandwich with

39.000 dong, helps the customers save 9000 dong for each combo.
Combo Chuyen Tro: a tea drink size S (not applicable for Tropical Tea)
and a passion fruit cheesecake, helps the customers save 10.000 dong
for each combo.
Combo Thu Gian: a Freeze size S with a green tea cheesecake, helps the
customers save 16.000 dong for each combo.

41
 IV. 4P - B. PRICE Group 6

3. PRODUCT MIX PRICING STRATEGY

Price adjustment
Discount
Highlands has Highlands Coffee Membership Program on Vani
app. For every 10,000 VND spent at Highlands Coffee stores,
customers will earn 01 DRIP. For every 20 DRIPS, customers can get
a discount of 5000 VND on their next purchase, 35 DRIPS for a
discount of 10.000 VND,... (Highlands, 2023)
Segmented price
Highland has different price for different sizes of product.
They also charge different prices for different locations due to
higher cost. For example, price of Highland’s food and drinks in the
airport, Vinwonder are more expensive compared to standard
menu
Psychological price
Highlands Coffee applied a small difference in pricing but very
effective, that is pricing almost all products at odd numbers such
as 49.000 dong or 59.000 dong... Although this price is not much
different than 50.000 dong, 60.000 dong, it has an impact on
customers’ psychology to make them feel the price is much
cheaper. As a result, they are willing to pay for the products.

42
 IV. 4P - C. PLACE Group 6

Company's stores:
According to the information available on the Highlands Coffee
website up to the present date, Highlands Coffee now has 563 shops
in 53 provinces and cities throughout Vietnam, with the majority of
them located in Ho Chi Minh City, Hanoi, and later in regions with
scenic attractions such as Da Nang, Khanh Hoa,...

563
Strategic location selection:

Concentrated in densely populated central

districts, historical sites, and large
commercial centers.

Located in crossroads,
intersection, where has
many offices, schools with
convenient transportation -
> increasing brand
coverage and user
familiarity. (Nguyễn Hằng,
2023)

43
 IV. 4P - C. PLACE Group 6

Franchise
Requirements: Benefits:
Highlands Coffee's franchise Highlands Coffee can provide extensive
price is about 3.5 - 5 billion assistance with issues such as finding
VND. a suitable business site, setting up
Monthly franchise fee: 7% space, transferring the brewing process
Monthly management fee: 5% and operating the shop, completing
Location requirements: Area business procedures according to legal
over 150m2, located right at a rules, and so on.
junction or intersection in a There is no need to produce menus or
densely populated area or in selling price.
office buildings, apartments, Increasing possibilities to reach
shopping centers. potential consumers.
Revenue is often consistent, and
capital recovery is swift (DN, H. , 2023).

Partnerships with e- such as ShopeeFood and GrabFood -> to expand

commerce platforms their online reach and delivery services.

Mobile app:
Customers can order drinks and food online for delivery
through their mobile app. Highlands app provides
customers pleasant experience, such as the ability to order
in advance, avoiding the process of queuing - ordering -
paying - waiting for order. Besides, there are also gift
points (10.000VNĐ - 1 drip) as well as various promotions,
especially when registering as a new member, 50% off for
the first order. (Highlands Coffee, 2023).
44
 IV. 4P - D. PROMOTION Group 6

Printed ads
Target audience: Highlands Coffee customers

When Highlands Coffee launches a new

product, printed posters will be sent to
customers after they complete the
payment process. In addition, on the
order counter and on each table, there
are posters of Highlands Coffee to
advertise new products to attract
customers' attention and increase
awareness of that program.

By this way, Highlands Coffee

successfully brings new products to its
regular customers.

Internet
Target audience: GenZ and people with high and constant use of social
networks and a quick grasp of trends.
Highlands Coffee always updates promotions on social networking sites such
as Facebook, Instagram, Youtube,...

Advertising via the Internet is extremely necessary so that Highlands Coffee

can easily reach this group of customers. High-quality images and content in
their posts have attracted a lot of interaction for Highlands Coffee and this
strategy also strengthens its position in the Vietnamese coffee market.​

45
 IV. 4P - D. PROMOTION Group 6

Outdoor advertising
Target audience: passer-bys

The brand also cleverly chose to

place banners and LCDs in prime
locations, attracting the attention of
the community

=> Wide coverage is one of the ways

Highlands Coffee uses to spread its
mission to consumers, helping to
imprint it in everyone's minds.

Intersection billboards in big cities:

Because it is located at the intersection of main roads, people passing by many

times in many days will help increase the frequency of reaching customers. With a
moderate height and clear vision, customers can easily access the brand's
advertising information from many sides without encountering any significant
obstacles.

Outdoor advertising is a low-level form of advertising that easily catches the eye of
passersby. During the journey, they will encounter repeated outdoor advertising
panels, helping to form an impression in the subconscious of any people.

46
IV. 4P - D. PROMOTION Group 6

Offer free drink if customers purchase a mainstream product (for

example, Freeze or Tea) on special occasions such as Couple's
day, Teacher's day,... These promotions often help to promote
sales and advertise new products.

47
IV. 4P - D. PROMOTION Group 6

Product bundles:
Customers will get a lower price if they purchase in a combo,
encouraging them to try a variety of products to find out their
favorites and buy more than what they intended. This
promotion only lasts 1 month to celebrate Vietnamese Family
Day.

48
IV. 4P - D. PROMOTION Group 6

Upsize drinks for the next purchase.

This promotion is for customers who used Highlands'
products and encourages them to comeback to Highlands.

49
 IV. 4P - D. PROMOTION Group 6

Coupons and vouchers:

Attract customers to their
brand instead of
competitors with similar
products.

Trial offer to promote

new products

50
IV. 4P - D. PROMOTION Group 6

Organize some challenges that offer giveaways for winners:

This helps to increase the brand's social media presence and
attract new customers by asking users to share post or tag
their friends

51
 IV. 4P - D. PROMOTION Group 6

Community activities:
Highlands Coffee regularly engages in
volunteer activities, conducts
fundraising sports events, or become
sponsors -> always actively contributing
to the growth of society

-> This meaningful message has

attracted attention, interest and
participants around the nation, such as “
Hội Thao Highlands Coffee Vì Từ Thiện”,
“Hiến Máu Nhân Đạo Thường Niên – Tự
Hào Dòng Máu Việt”.

-> Building brand awareness and

promoting a positive image to the
community (Highlands Coffee, 2022).

Special events:

Occasionally, Highlands Coffee

organizes several special events, rather
than promoting its products

-> Focusing on providing customers

pleasant experiences as well as
showing a unique and diverse image,
especially the endless love with
Vietnamese culture, such as the
community campaign “Đương Đại Hóa
Tranh Đông Hồ Cùng Highlands Coffee”.
Or a series of acoustic events designed
to assist customers relax, entertain and
engage Highlands lovers together.

52
 IV. 4P - D. PROMOTION Group 6

Social media & Influencer marketing:

Through social media platforms

Facebook (1,6M followers), Tiktok (104K
followers) and partnering with
Vietnamese influencers

-> promote their products, reach a

wider audience and share their brand
story in a relatable and authentic way
by posting appealing images and
videos, sometimes holding minigames
with online customers, especially the
young generation, usually attracted by
trendy and engaging content.

Press releases and media outreach:

Regularly issuing press releases

announcing collaborations and
sharing compelling stories about
their history, coffee origin, or
social responsibility initiatives

-> connect with their audience

on an emotional level and build
brand awareness, targeting older
people who regularly read news,
and those who have interests in
activities, which bring value and
significance to society.

53
IV. 4P - D. PROMOTION Group 6

Website and News

Highlands Coffee's website is a central hub for information about the
company and its products.
Vietnamese-Centric: All content should be primarily in Vietnamese, with
English translations available for tourists and non-Vietnamese speakers.
Informative and Engaging: Provide detailed information about Highlands
Coffee's menu, coffee origins, brewing methods, and sustainability
initiatives.
Regular Updates: Update the website regularly with new content,
including news, promotions, events, and blog posts.
Multilingual Customer Service: Offer customer support in Vietnamese and
English via online chat, email, or phone.
By implementing these comprehensive strategies, Highlands Coffee can
create a website that attracts new customers, enhances brand loyalty,
and drives online sales. Remember, the key is to constantly adapt and
improve based on user feedback and data insights.

54
 IV. 4P - D. PROMOTION Group 6

Social Media
One of the popular channels to promote products or campaigns of Highlands
cannot fail to mention a social networking platform like Facebook with more than
1.1 million followers. On social media platforms, they post several times a week,
sharing a mix of content including:
Promotional offers and new product launches
Behind-the-scenes glimpses and stories
User-generated content
Contests and giveaways
Event announcements
Customer testimonials and reviews
Run Facebook Ads to target specific audiences and promote their latest
offers.
Take advantage of the power of the Internet, especially social networking
platforms. Highlands has built its fanpage on Facebook and does strong
communication on it regularly, discussions, and customer feedback about
Highlands.
In addition, Highlands Coffee also focuses on advertising on
other major platforms such as Tik Tok to reach to more
customers in a range of younger age.. in 2023, a staggering
80% of Gen Z in the Vietnam reported using TikTok, making it
their most popular social media platform, surpassing even
long-time favorites like YouTube, Instagram

55
V. RECOMMENDATIONS Group 6

In assessing Highlands Coffee's current strategies and performance,

notable strengths and areas for improvement emerge.

Notably, the brand excels in promoting its image on social media platforms,
garthering significant attention and interactions. According to YouNet Media,
the brand has attracted nearly 1.1 million interactions, over 272,000 discussions,
and more than 15,000 posts, earning the distinction of being the leading coffee
shop brand with nearly 39% market share among the top 10 most discussed
brands on social media from January 1 to June 14, 2023. This success
underscores the effectiveness of promotional strategies, particularly in
targeting the young generation segment.

56
V. RECOMMENDATIONS Group 6

In assessing Highlands Coffee's current strategies and performance,

notable strengths and areas for improvement emerge.

Shortcomings arise in the alignment of physical spaces (actual products) with

the targeted customer experience for university students and professionals.

Issues such as relatively small tables, inadequate storage for study or work
materials, and limited open workspace for group activities impact the overall
customer experience.

Additionally, the ambiance of some stores, characterized by insufficient

lighting, is not conducive to study or work activities.

Furthermore, Highland's offerings do not sufficiently diversify the experience

for customers seeking entertainment, relaxation, or social interaction, lacking
activities like workshops or aesthetically pleasing spaces for photography,
which are offered by competitors.

These issues indicate a misalignment of actual and augmented products with

the core customer value and targeting strategy, potentially posing a
competitiveness risk.

To address these challenges, we recommend that Highlands Coffee

enhances its physical spaces to better accommodate the needs of
university students and professionals. This involves optimizing table sizes,
providing more storage options, creating open workspaces, and
improving lighting conditions.
Additionally, introducing diverse activities and aesthetics can help enrich
the overall customer experience, making Highlands Coffee a more
competitive and appealing choice for its target segments.

57
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