HIGHLANDS COFFEE MARKET RESEARCH REPORT 2012

Big decisions cant wait

Facilitator: Mr. Moulik Zaveri Authors: Nguyen Truong Minh Hien | Nguyen Lam Quoc Trung | Tran Thi Kim Mai| Nguyen Thi Phuong Thao | O Quoc Vinh

RMIT International University Vietnam

BP181 Bachelor of Commerce Program
ASSIGNMENT COVER PAGE
Your submission will not be accepted unless all fields below are completed Course Code: MKTG 1254
Course Name: MARKET RESEARCH REPORT Location where you study: SGS Title of Assignment: MARKET RESEARCH File(s) submitted 1 Student name: Nguyen Truong Minh Hien

Nguyen Thi Phuong Thao Nguyen Lam Quoc Trung Tran Thi Kim Mai O Quoc Vinh

Student e-mail address: s3256208@rmit.edu.vn

s3231140@rmit.edu.vn s3262909@rmit.edu.vn s3231137@rmit.edu.vn s3298762@rmit.edu.vn

Learning Facilitator in charge: MOULIK ZAVERI Assignment due date: 6 January 2012 Date of submission: 6 January 2012 Number of pages including this one: 73 Word Count: 4,984 words (applied for main contens)

CONTENTS
EXECUTIVE SUMMARY ............................................................................. ....4 1 BACKGROUND ........................................................................................ .5 I. II. THE COFFEE MARKET IN VIETNAM ....................................... .6 COMPANY PROFILE .............................................................. .7

2 PROBLEM DEFINITION, PURPOSE &HYPOTHESIS ............................. ....9 A. B. MARKETING PROBLEM ......................................................... ..10 RESEARCH PURPOSE, OBJECTIVES, HYPOTHESIS .................. ..10

3 ALTERNATIVE METHODS, CHOSEN METHODS & TIMELINE .......... ..13 I. II. III. ALTERNATIVE.14 CHOSEN METHODS...16 REPORT TIMELINE.....18

4 PROPOSED SAMPLING & ACTUAL SAMPLING ................................. ..19 5 SAMPLE STATISTICS ............................................................................. ..21 6 ANALYSIS & FINDINGS ................................................................. . 28 I. II. QUANTITATIVE RESEARCH......29 QUANLITATIVE RESEARCH...37

7 CONCLUSION, RECOMMENDATION & LIMITATION...40 I. II. III. CONCLUSION ........................................................................ ..41 RECOMMENDATION ............................................................. ..41 LIMITATION .......................................................................... ..45

REFERENCE ................................................................................... .46 APPENDICES.................................................................................. .48

EXECUTIVE SUMMARY
This report is conducted to help Highlands solving some problems that are occurring in their business. Firstly, based on the determinant attributes, Higlands can improve its marketing to meet the consumers needs and compete with the competitors. Next, some effective PR strategies will be suggested to build trust and credibility through the analysis of favorable publicity state. Finally, it will help Higlands to understand buyer behavior then they may propose a more powerful 360 degree marketing and distribution to capture awareness and stimulate sales.

The report firstly introduces the background of the company and the marketing problems which are some difficulties in understanding the consumer determinant attributes for purchasing R&G products in local market; remaining favourable publicity state of the brand after its several severe scandals and exploring buyer behaviours of R&G products as well. Then in order to deal with these problems, we apply both quantitative and qualitative research methods which are survey and focus group discussion respectively to generate accurate and reliable results. In the sampling methods, we choose non-probability methods which are convenience and quota sampling because of time and human resources constraints. Next, we assign the work to each member and set up a detail schedule. As soon as the survey is designed completely, we start to conduct the survey and collect the data. Putting these data into SPSS and analysing them, we can test for the hypothesis we established from the beginning. Moreover, this report will provide some recommendations that are PR strategies to rebuild the trust, refreshment with innovative package and diversified trade marketing. Along with these recommendations, some limitations will be discussed as well. These are unconscious misinterpretation, deliberate falsification, targeted population and shortage of time as well. Finally, the report will end with a conclusion which summarizes all the key points we discussed.

CHAPTER

BACKGROUND OF HIGHLANDS

According to GiaCaPhe (2011), coffee consumption in Vietnam achieved rapid growth in the world with 31%, from 1.208 million bags in 2009 to 1.583 million bags in 2010.The research of IAM in the habit of using coffee shows that there are 65% of consumers have used Vietnamconsumers coffee drink coffee seven times a week, in favour of males (59%); while about 21% of consumers use instant-coffee from 3 to 4 times a week and slightly leaning consumer groups are women (52%). The usage rate of coffee at home and outside is equal to 49%-50% (Tran 2010).

The graph above shows that the growth of Vietnams coffee production over 16 market years is very enormous. However, from 2009 to 2011, there was a fluctuation in the production of Vietnams coffee.

Based on the chart, it is easily to recognize that Vietnam is the one of the top twelve coffee exported-countries increase output in 2010 and 2011 with Brazil. Although there is increasing the production, the exportation coffee and number of coffee drinkers, in general, the coffee consumption in Vietnam decreases slightly compare with other countries. According to International Coffee Organization (ICO), Vietnams domestic coffee consumption is only 3.6% of total production, the lowest of all exporting countries. Vietnam's rising living standard has contributed to restructuring the group of coffee drinkers, with more young people in cities picking the bitter beverage now while it was the choice of elderly people and rich families in the past (Reuters 2008). In recent years, many foreign coffee brands like The-Coffee-Beans, GloriaJean or Illy have entered into Vietnam while domestic coffee brands like VinaCaf, TrungNguyen or Higlandshave been able to maintain its strong positions in the market. In fact, Higlandshas been in the market for several years producing high quality coffee products for both Vietnamese and foreign consumers. Higlandsis a coffee brand of VietThai Company (VTI). In 2002, the very first Higlandscoffee shop was opened. Up till now, it has over 70 coffee shops in six provinces including Hanoi, HoChiMinh, HaiPhong, DaNang, VungTau and DongNai.

Higlandsbelieves in serving people rich experiences, based around coffee which come from doing everything well. Packaged R&G coffee products of Highlands are quite diversified, contain both international and Vietnamese flavoured styles. For international coffee blend, there are Espresso-Full City Roast, Espresso-Cinnamon Roast, Espresso-Arabica Supreme, Espresso-Decaffeinated. For traditional Vietnamese blends, there are Gourmet, traditional and Heritage. Recently, Higlandshas been suffered from severe scandals like having a dead mouse inside the cupcake several years ago or reprinting new expiry date for over 31,000 coffee cans. Hence, many consumers really worried and do not believe about the quality of Highlandsss products anymore. Those scandals make Highlandss image less value in consumers perception in brand image. Therefore, this marketing research aims to help Higlandsto realize its target markets determinant attributes and buying behaviour of purchasing R&G product and its brand favourability in consumer mind-set.

CHAPTER

PROBLEM DEFINITION, PURPOSES & HYPOTHESIS

I.

Marketing Problem First problem: Higlands needs to understand the consumer determinant attributes for purchasing R&G products in local market. Second problem: They have to figure out the favourable publicity state of the brand after its several severe scandals. Third problem: To explore the buying behaviours of R&G consumers.

II.

Research Purpose-Objectives-Hypothesis

Purposes
1. Based on the determinant attributes, Highland would be able to promptly modify its marketing mix strategy to match consumers need and stay competitive in the market.

Questions
What are the attributes that influence consumer choices for R&G coffees? How do these attributes influence the consumers decision for R&G products? Which attribute is the most significant one?

Objectives
To determine major factors influence consumers purchasing process in R&G market.

Hypotheses
Ho: The taste of the R&G coffee brand is not the highest importance for the consumers. H1: The quality of the R&G coffee brand is the highest importance for the consumers.

2. The analysis of favourable publicity state will help Highlands to come up with effective PR strategies to build trust and credibility.

What are the most popular brands currently in the coffee market? How well Highland is positioned inside consumer mind? How do consumers perceive Highland relative to its key competitors, Trung Nguyen and VinaCafe? How does favourable publicity determine the relationship between consumer-level perceptions of brands and their purchasing process? And how do promotional tools impact consumer preferences?

To obtain ratings and rankings in term of brand awareness between players in R&G market. To determine the Highland position in consumers mindset and to measure the gap to reach the desirable brand image. To identify whether favourable publicity play a significant role in decision-making of R&G consumers.

Ho: Highland is in the top 3 most preferable brand for R&G products. H1: Highland is not in the top 3 most preferable brand for R&G products. Ho: 50% of the qualified respondents are able to recognize Highlands promotion and marketing activities. H1: Less than 50% of the qualified respondents are able to recognize Highlands promotion and marketing activities.

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3. By understanding different attitudes and usages in the process of buying decision (peoples attitude toward information, the choice of the purchase place, getting aware of the price), Highland may propose a more powerful 360 degree marketing and distribution to capture awareness and stimulate sales.

Where and when do consumers usually purchase R&G products? How often do they shop? How much are they willing to spend per purchase? Is it more likely that consumers buy R&G products from their favourite coffee shops? Are consumers buying decision process influenced by other end-users references such as friends, family, coworker? Who is the purchaser and who is the end users?

To observe consumers attitudes and usages when shopping for R&G products. To define the connection between coffee and caf. To identify relationship between personal and references and reference groups with purchase intentions To determine whether R&G purchaser is the real end-user.

Ho: Vietnamese consumers prefer to enjoy coffee at the caf shops H1: Vietnamese consumers do not prefer to enjoy coffee at the caf shops Ho: Consumers normally purchase R&G coffee products at the caf shops. H1: Consumers normally do not purchase R&G coffee products at the caf shops. H0: Consumers normally purchase R&G coffee products once every three weeks. H1: Consumers normally do not purchase R&G coffee products once every three weeks. H0: Consumers normally spend around 50,000 vnd to 99,000 vnd to purchase R&G coffee/ time. H1: Consumers normally spend less than around 50,000 vnd to purchase R&G coffee/ time. Ho: There is a weak connection between a coffee store and R&G goods of the same gourmet brand. H1: There is a strong connection between a coffee store and R&G goods of the same gourmet brand. Ho: There is a significant relationship between purchasers of R&G coffee and the end-users. H1: There is no a significant relationship between purchasers of R&G coffee and the end-users. H0: Highland is in the top 3 most preferable brand for R&G products. H1: Highland is not in the top 3 most preferable brand for R&G products.

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CHAPTER

ALTERNATIVE METHODS, CHOSEN METHODS & REPORT TIMELINE

I.

Alternative Methods

1. Qualitative research methods According to Belk (2006), qualitative research is the method for the researchers to gather all information, opinions and data collected from focus group discussion, in depth interview, secondary data analysis and projective technique to understand deeply the consumers behaviour, their attitudes and beliefs toward a specific product of one brand. Furthermore, the most important element that we concerned about is what the answers of the respondents are in words not just the number of respondents. In our research, by applying these methods for R&G coffee of Highlands, we want to know what are the factors that influence Vietnamese coffee drinkers and their attitude with the R&G coffee in general and specifically for Highlands.

QUALITATIVE METHODS
Focus Group Discussion

EXPLANATION
This is an unstructured and free-flowing interview with one moderator and six to ten participants, who together discuss a particular subject (Zikmund et al 2011). Similarly, in a study by Morgan (1997), focus group, which is a method included in qualitative research, gathers data via group interaction

ADVANTAGES

Developed in the short time, using FG discussion, designed topics for respondents and get their opinions in an hour of discussion. Effective technique for idea generation, because lack of new ideas, instead of trying to find it out, asking for respondents opinions to improve the product Flexibility, it is really easy to find participants and switching the time for the convenience with respondents The interviewees are willing to answer the questions without hesitation because they are put under no pressure. Snowballing: a comment by one individual often triggers a chain of responses from the other participants.

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2. Quantitative research methods Quantitative research, which is including survey questionnaires, mail survey, Internet survey and personal interview, are the basic methods that required researchers to collect the statistics and data and based on what researchers receive to analysis the main problem of the research. Moreover, in this quantitative research, we mainly focus on the numbers and the statistics to determine the respondents beliefs. In addition, using these tools for our research, we have found out the determinants that affect the purchasing power of customers though R&G products.

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Quantitative Method
Survey Questionnaires

Explanation

Advantages

Disadvantages

Survey is one of the most popular methods in quantitative research for collecting primary data by communicating with a representative sample of individuals (Zikmund et al 2011).

Can be done quickly. Low cost. Efficient and accurate means of assessing information about population. Large sample is feasible so the samples result is more likely to close to the population. Geographic flexibility, do not concern where respondents coming from, as long as they have an email is enough. Low cost. Respondent convenience. Anonymity of respondent sensitive problems are solved. Providing the opportunity to give feedback to the respondent. Completeness of questionnaire. High participation. Probing complex answers. Length of interview perhaps up to 90 minutes more indepth information collected.

Variety of errors. Questionnaires may be structure, with limited choices, or unstructured, to allow open-end responses.

Mail Survey

Mail survey is a self administered questionnaire that researcher can build a list of questionnaire and send to respondent through email (Zikmund et al 2011)

Personal Interview

This is a face-to-face and two-way conversation in which an interviewer asks a respondent to answer questions (Zikmund et al 2011).

Absence of interviewer respondent cannot question the interviewer when they have problem in understanding the questionnaires. Response rate it is a significant obstacle because respondents consider these emails are spam Interviewer influence. Expensive for each interview. Possibility of interviewers bias. Respondents are unwilling to speak truthfully because of sensitive reasons or lacking of anonymity.

II.

Chosen Methods

By applying a mixed-model of both Qualitative and Quantitative Research Method, our team believes that it could help to generate more accurate, credible and reliable results than utilizing just one amongst two most common methodologies.

1. Quantitative Research In order to learn more about coffee preferences, brand awareness, and attitude of the

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consumers, a set of self-administered questionnaires is designed for the purpose of getting responses from different sampling sub-groups. Known as cost- effectiveness, less time-consuming and highly geographical flexibility, it helps to generate a broad view of the whole R&G coffee market consumption with the sampling size of 127 consisting of students, office workers, households and so on. Moreover, the detailed sampling plan is clearly demonstrated on how the sample is chosen for the use of this studys research methodologies and techniques in the following section of this report.

2. Qualitative Research Primary data generated from the use of self-administered questionnaires technique is insufficient for the market research team to understand thoroughly all-marketing problems that have been raised. Therefore, a focus group discussion will be conducted by professional moderator leading discussion for groups of 6 homogeneous consumers, aged from 18 to 35, class A, B, and living in HCMC. In fact, having a focus group discussion does not require lots of money or valuable incentives for the interviewees as compared to in-depth interview while still being able to carry on the expectation of providing an in-sight into the consumption of Vietnamese coffee products.

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REPORT TIMELINE
Process Research the background of R&G market in HCM City Determine the marketing problems, research purposes, research questions and research objectives and hypothesis of the research Choose appropriate methodologies (including quantitative, qualitative) Submit the proposal and get feedback from teacher Make appointment with interviewees by emails and prepare questions for focus group discussion Run 1 hour of Focus group discussion within 10 interviewees Design pre-tested and practice on 15-25 respondents as the quantitative research Develop to the real surveys by both emails & papers directly to respondents in 5 days with 100 respondents Collect and analyze the data Integrated information and make conclusions and recommendations based on the final data Finish the whole project and waiting for teachers feedback Review, print and submit the final project In charge members Thao Trung

W6 X

W7

W8

W9

W10

W11

W12

Hien All members Mai

X X X

Hien Vinh X

Mai, Thao

All members Trung, Hien

X X X

All members All members

X X

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RP

CHAPTER

PROPOSED SAMPLING & ACTUAL SAMPLING

18

Based on the information of the current Vietnams coffee market, Coffee is a competitive product with many potential domestic competitors such as TrungNguyen and Vinacaf, Highlands started from the very last brands in the coffee market and it is a big disadvantage for Highlands to complete with the strong built brands. In addition, this project mainly focuses on the Roast & Ground coffee of Highlands, which is allotted in almost entire super markets and markets around Vietnam. Moreover, Vietnamese usually use coffee every morning before going to work as a habit and on average; they drink every 2 cups per day. Therefore, the population that we obviously target on is the coffee drinkers who are from 18 to 35, 38 to 55 and above 55, only consumers who live in Ho Chi Minh City. However, because the price of each R&Gs Highlands package is higher than other brands so we aim at people with the middle and high income. Normally, the coffee drinkers that we want to seek for the project are business woman/man, employees and employers.

Otherwise, the target population size of R&G coffee is quite large, including all of the purchasers and coffee drinkers. From the report, we use survey and focus group to apply for our research. For the survey, we prepared specific questions and choose 130 random respondents that we found in the super markets, markets and office but only 127 responses. However, the research team had to eliminate 10 respondents who dont drink coffee. Hence, there are only 117 qualified respondents for our research, it took us nearly 1 week to collect the answers and 1 week to classify all of 150 answers. For the focus group discussion, firstly we designed a full 9 topics in 9 different questions for the respondents and decided to find 10 people but to the very last minutes, there are only 6 people who are willing to help us, 3 of them are housewives and 3 of them are coffee drinkers. Thus, proving a camera recording, it is easier for us to follow the conversation.

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CHAPTER

SAMPLE STATISTICS

20

Gender structure of Respondent

In the survey that we made, including more than 20 different questions with 4 sections and there are 130 respondents, because some of the respondents are not reliable so it is remaining only 110 surveys that we collected, it is nearly 86% of the total surveys. Moreover, the number of female respondents is more than 27% and there is 64% number of males respondents, it can be explained by our random selection of the respondents. Thus, coffee is a daily-consumed product and it is not a separated product that is only for male or female, with this product we dont distinguish the gender between male and female. Therefore, most of the females respondents are students and employees who need to drink more coffee to save more energy for their activities.

Gender Structure of Respondents

Female 30%

Male 70%

Age Structure of Respondent

From the information that we have found, there are 4 groups of age in the survey. In addition, the group with the highest portion is age from 18 to 25, it take approximately 66% of the total population. The second group is age from 26 to 35 with 20% and standing in the third place is age from 36 to 45, only 8 % out of 100% respondents. Finally the fourth group age from 46 to 55 is respectively 6%. Therefore, there is no one above 55 and under 18. Overall, Age from 18 to 25 is largest; it is because they are mostly students and young office workers who are dynamic and hardworking, thats why they need to consume more coffee than other groups.

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Age Structure of Respondents

From 18 to 25 From 26 to 35 8% 20% 66% 6% From 36 to 45 From 65 to 55

Income Structure of Respondents

Only focusing on the middle and high class. In this survey, the income is calculated for the whole family not for one person. Though the chart below, more than 50% income of the total family is over 20 million VND. From 10 million VND to 19 million is 29% and from 5 million to 9 million, it is constantly 9%. With 2 % is for the income under 5 million. Furthermore, we did the survey in several of international universities and some international high schools like Raffle and RMIT University where we can find students who live in family with high income.

Income Structure of Respondents

2%
10% Below 5 million VND 5 million - 9 mllion 57%

31%

10 million - 19 million Above 20 million

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Occupation Structure of Respondents

Based on the chart below, it reflected that more than 50% people are students while number of employees (office workers) reached to 33%. Constantly, there are only 8 employers (owners of organizations) out of total 130 respondents and remaining with a modest percentage 6%. Thus, unemployed and people who are looking for jobs are 6 out of 130 surveys, about 6% of the total population. The lowest percentage is 1% for housewife and 0% in retirement. By tracing following the occupation, we know exactly who we should target on based on the total occupation structure.

Occupation Structure of Respondents

Students Employees Employers 0% 7% 29% 59% 5% Unemployed Retired

Frequency Coffee Purchasing of Respondents

Observing from the shopping habit of customers in our survey, we figured out that 39 consumers go to super markets or markets to buy coffee for each half month, with hold 31% of total frequency purchased coffee. Moreover, 29% people buy coffee more than three weeks, with every three week, there is 14%, it take longer time for each purchase and by watching their frequency coffee purchasing times, we should provide a package of coffee that contain more coffee than the usual one to be more convenient and save time for consumers. Otherwise, some of the customers who have more time spending on shopping, usually buy coffee each week, coffee is one of important drinks for these consumers and the number purchasing times is quite high 18% with 23 respondents.

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More than 3 week/time 3 week/time 2 week/time 1 week/time 0 5 14

29

31

18
10

15

20

25

30

35

Frequency Coffee Purchases

Location Structure of Coffee Purchases

For the Vietnamese in general, the places that they always go for shopping are supermarkets and markets and in the survey, an interesting thing that we have found is almost 65% Vietnamese often go to supermarkets and 31% go to markets to buy coffee. Therefore, we should focus on marketing mainly in supermarkets and markets to attract more customers. And the next places are shopping mall; convenient stores and coffee shops go from 18%, 16% and 15% of the total respondents. In Vietnam, the family stores are very popular and there is 12% consumers buy coffee at the family stores.

70 60 50 40 30 20 10 0 Coffee shops Shopping centers 15 18

64

31 16 12

Supermarkets

Markets

Convenient Family stores stores

Location Structure of Coffee Purchases

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Purchasers & buying decision makers in family

In general, consumers answered that they often buy coffee by themselves for their personal purposes, about 43% of customers while the person who usually buy coffee for the whole family is the mother or father, remaining at 33%. Staying equally, respondents who often buy coffee in the family are husband or wife and brother or sister with 4% for both. In many Vietnamese, there are maids who work in as helpers who usually do house works in the family; these maids are the persons who often go to the markets or super markets to buy coffee for their bosses, by 9% of total purchasers. Sometimes the purchasers are not always the end users of a product, they may buy for their husbands, wives, sons or daughters and it is hard to observe the actual decision makers of a product like coffee. In some cases, purchasers buy coffee and they made decision to choose a coffee brand by themselves but in some other case like wives who buy coffee based on the brands that their husbands used and their husbands decisions

Purchasers of Coffee in the family

Purchasers of Coffee in the family Maids My brother/Sister My son/Daughter 0 My wife/Husband My mother/Father 4 42 52 4

12

Myself

25

Maids Brother/Sister Son/Daughter Wife/Husband Mother/Father Myself 0

1 3 0 2 46 65 10 Decision Makers of Purchasing Coffee 20 30 40 50 60 70

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CHAPTER

ANALYSIS & FINDINGS

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I.

QUANTITATIVE RESEARCH

Marketing Problem #1: Higlandsneeds to understand the consumer determinant attributes for purchasing R&G products in local market.

Research Question - What are the attributes that influence consumer choices for R&G coffees? Hypothesis 1: Brand is the determinate attribute that influence consumer choice for R&G products.

Attributes for purchasing R & G products in local market

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Least Unimportant 3.40% 3.40% 6.80%

Unimportant 9.40% 5.20% 6.80%

Neutral 23.90% 12.80% 29.10%

Important 27.40% 34.20% 2.80%

Most important 35.90% 44.40% 34.10%

Packaging Brand Taste Price

6%

16.20%

27.30%

30%

20.50%

Based on the research, the amount of respondents chose Brand attribute which occupied 44.4%. It is one of the most important factors when purchasing coffee. Perhaps, when people believe in quality of the brand, it is quite easy to prevent them switching to another brand. Next, Packaging has 35.9% of respondents. It is likely that having nice packaging design can attract more people to buy the products. Taste and Price occupy 34.1% and 20.5% respectively. These figures demonstrate that not so many respondents can exactly differentiate between the tastes and flavour. Therefore, consumers might think that taste and price are not one of the important attributes when purchasing coffee products. Based on the analysis, it is sufficient to conclude that the hypothesis 1 is accepted as brand is the most important attribute that have an impact on the consumer choice for R&G coffee products.

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Marketing Problem #2: Higlandshas to figure out the favourable publicity state of the brand after its several severe scandals. Research Question 1: How do consumers perceive Highlands relative to its key competitors, TrungNguyen and VinaCafe?

Hypothesis 1: Highlands is in the top 3 most preferable brand for R&G products. Null hypothesis H0: Highlands is in the top 3 most preferable brand for R&G products. Alternative hypothesis H1: Highlands is not in the top 3 most preferable brand for R&G products. The respondents were asked to rank five roasts & ground coffee brands based on their level of satisfaction including Higlands and its competitors such as TrungNguyen Caf, Vinacaf, Nestle and The Coffee Been & Tea Leaf. In order to generate data for this finding, the research team was design a scale from 1 to 5 (1 for the least satisfaction and 5 for the most satisfaction) each brand name for the respondents to rank based on their perception and experiences with each particular coffee brand. The results are critically analysed as below.

4.5

4
3.5 Average Point 3 2.5 2 1.5 1 0.5 0 Average Highlands 3.974 Trung Nguyen 4.15 Vina Caf 4.475 Nestle 3.51 Coffeebean 2.94

As statistically shown on the illustration, VinaCaf prevails over other coffee brands with the average point of 4.475/5 while Trung-Nguyen Caf is occupied the 2nd rank with 4.15. In fact, it can be seen that there is no significant difference between Trung-Nguyen and Higlandsas it follow by 3.974/5 seizing the third place in the most favourable coffee brands. Predictably, Nestle and Coffeebean are reckoned to be the least favourable with 3.51 and 2.94 respectively. Hence, the hypothesis is accepted as Higlands fall into the top three favourable brands. Research Question 2: To what extent do the customers get to know HiglandsR&G coffee products?

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To understand more about the level of brand recognition and brand awareness towards HiglandsR&G products, the respondents were asked to recall their past memories of knowing any of Higlandsmarketing & promotion activities.

Percentage of people have been recognized any of Highlands's promotions and advertising campaigns
YES 18%

NO 82%

Out of 57 respondents qualified for this question, only 10 persons (make up 18%) has been participated in those activities while other 47 persons win a vantage position with 82% meaning that they are not able to recognize any marketing activities hosted by Highlands. Out of 18% of the objects, many of them could not exactly indicate the name of its activities or campaigns. Hypothesis 2: 50% of the qualified respondents are able to recognize Highlands promotion and marketing activities The method of Chi-square goodness of fit is utilized to verify the above hypothesis. The proportion of Recognition of Highlands promotion and marketing strategies is a variable to be verified against the hypothesis proportion of 50% YES and 50% NO. Recognition of Highlands promotion and marketing strategies Observed N Yes No Total 10 47 57 Expected N 50 50 Residual 2.7 -2.7

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Test Statistics Recognition of Highlands promotion and marketing strategies Chi-Square .410a df 1 Asymp. Sig. .641 a. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is 31.2. According to the result generated by SPSS, the Chi-square of .410 which is larger than the critical Chi-square .384 (originated from the Chi-square Distribution Table) with degree of freedom is 1 and significance interval equals to 0.05. It is sufficient to conclude that there is a difference between the sample distribution (proportion) and the hypothesized proportion. Therefore, the Null Hypothesis H0 of 50% YES and 50% NO (50% of people that have been surveyed have recognized any of Highlandss marketing activities) is rejected. Marketing Problem #3: To explore the buying behaviours of R&G consumers. Research Question 1: Where is the most favourable place to drink coffee? Hypothesis 1: Vietnamese consumers prefer to enjoy coffee at the caf shops

Preferrable places to drink coffee

35%

5%
60% Caf Shop Home Office/School

Based on the graph, only 6% of respondents prefer to drink coffee at office or school while nearly 48% of respondents would like to enjoy coffee at home. Most of respondents often drink coffee at caf shop with 82%. In fact, the hypothesis 1 states that most of the Vietnamese consumers are prefer to drink coffee at the caf shops will be accepted. Research Question 2: Where and when do consumers normally purchase R&G products? Hypothesis 2: Consumers normally purchase R&G coffee products at the caf shops.

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Places to buy R&G coffee products

8% 10% 10% 11% Caf shops Shopping Centre Super Market

20%

Market Convenience Shop

41%

Grocery Shop

The responses explore the fact that number of respondents who choose to buy the products at supermarket occupying 41% which has highest percentage among all the alternatives. Apart from the convenience, many consumers seem to believe in the quality of products which are sold in supermarkets more than via other channels. With 20% of respondents, market is chosen to be the second place to shop for coffee products. In fact, caf shop, shopping center and convenience shop are ranked at 10%, 11% and 10% respectively. Grocery store is ranked at the bottom (11%) meaning that respondents rarely buy coffee at those places. In short, the hypothesis 2 indicates that consumers normally purchase R&G coffee products at the caf shops should be rejected. Hypothesis 3: Consumers normally purchase R&G coffee products once every three weeks

Number of times spend on buying R & G coffee products

12% 48%

Once a week
25% Once every two weeks Once every three weeks Once every over three weeks

15%

When asked about the times to buy R&G coffee, the answer for 48% of those surveyed had purchased is approximately once over three weeks. About 15% % of people buying R&G coffee over one every three weeks occupied the second position. Next is the percentage of respondents with 12 % who buy on once a week. Final portion is nearly 25% for those who buy once every two weeks. To conclude, the hypothesis 3 is accepted since the findings illustrate that consumers normally purchase coffee products once over 3 week.

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Research question 3: How much are they willing to spend per purchase? Hypothesis 4: Consumers normally spend around 50,000 vnd to 99,000 vnd to purchase R&G coffee/ time

The amount of money spend per purchase

17% 22% 40% 21% Less than 50.000 VND 50.000 - 99.000 vnd 100.000 - 149.000 VND More tha n 150.000 VND

The number of respondents who spend for buying coffee from 50,000- 99,000 VND is 40 %, whereas 17% of respondent spend over 150,000 VND. Another 26 respondents (22%) said that they often spend from 100,000 -149,000 VND. With 21.0% of people buying coffee products spend less than 50,000 VND. Due to the findings stated as above, the hypothesis 4 will be accepted. Research question 4: Is it more likely that consumers buy R&G products from their favourite coffee shops? Hypothesis 5: Null Hypothesis H0 = There is weak connection between a coffee store and R&G goods of the same gourmet brand. Alternative Hypothesis H1= There is strong connection between a coffee store and R&G goods of the same gourmet brand. The research team utilizes the ANOVA technique which is computed by SPPS in order to test the hypothesis as above. ANOVAb Model 1

Sum of Mean Squares df Square F Sig. Regression 4,815 1 4,815 ,498 ,478a Residual 1383,744 148 9,349 Total 1388,559 149 a. Predictors: (Constant), buy R&G coffee product b. Dependent Variable: Perception of the buying at same gourmet brand

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ANOVAb Model 1

Sum of Mean Squares df Square Regression 4,815 1 4,815 Residual 1383,744 148 9,349 Total 1388,559 149 a. Predictors: (Constant), buy R&G coffee product

F ,498

Sig. ,478a

Coefficients Model Standardized Unstandardized Coefficients Coefficients B Std. Error Beta 27,125 1,487 ,244 ,330 ,067

(Constant) Buy R&G coffee product

t 22,158 ,799

Sig. ,000 ,489

a. Dependent Variable: Perception of the buying at same gourmet brand As shown on the table, the confidential level is 95% meaning that the ANOVA analysis is going to be compared with =0.05. Our hypothesis is only accepted if the significant level is higher than .05; otherwise, the alternative hypothesis will be accepted. In this particular situation, our null hypothesis is rejected because the significant level is .478 which is extremely bigger than =0.05. In another word, the alternative hypothesis H1= There is strong connection between a coffee store and R&G goods of the same gourmet brand is accepted. Research question 5: Who is the purchaser and who is the end user? Hypothesis 6: Null Hypothesis H0 = There is a significant relationship between purchasers of R&G coffee and the end-users. Alternative Hypothesis H1= There is no a significant relationship between purchasers of R & G coffee and the end-users. Model Sum of Squares Regression 54,569 Residual 1346,264 Total 1400,833 df 1 148 149 Mean Square 54,569 9,996 F 5,999 Sig. ,015a

SPSS technique is used to test. In the Anova table: If the significant number produced is less than 0.05, H0 will be accepted. If the significant number is greater than 0.05, H1 will be accepted.

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According to table above, the significant number is 0.015 less than 0.05. Based on the rule of acceptance or reject of one way test Anova, the null hypothesis H0 is accepted. This means that there is a significant relationship between the purchases of R & G coffee and the end users.

Last but not least, the survey respondents were also encouraged to recommend new strategies and giving feedbacks for the current roast & ground coffee product line by indicating their concerns into the provided textbox. Amongst the numerous constructive feedbacks and valuable, implementing more promotion strategies, marketing campaigns and improving packaging designs are most recommended. Higlands is suggested to come out with effective marketing strategies along with attractive promotions in order to retain current customers and obtain the prospective ones. The packaging of R&G was criticized by several persons as the coffee would not be able to remain its aromatics once the coffee pouch is opened.

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II.

QUANLITATIVE RESEARCH This qualitative research in form of focus group discussion is conducted with 6 respondents.

Question
Question 1: How do you describe a premium coffee brand?

Similarities
Premium coffee brand needs to have a best combination of the blend, the bean, the roast and the final taste. It is these qualities that make the difference between commercial coffee brand and premium gourmet coffee brands. The product starts with only the finest beans, custom roasted to a perfect medium-intensity. It is made from uniquely flavored beans that are processed with special care.

Differences
Comment #1: Quality and taste of coffee products determine the value of brand, premium or not. Comment #2: Beside the best quality product, the premium is enhanced by brand credibility. Comment #3: A factor that makes them so special is the exclusivity. The price of gourmet coffee brands is therefore not merely decided by its quality, but by how it is made and where it comes from.

Discussion

Question 2: What are your favorite coffee brands? Are you willing to experiment with different brands and flavors? And why?

Each interviewee has their individual opinion about this question. However, in general, they think that a premium coffee brand is defined as which has value of brand, high quality, expensive price, mordent technology for producing process, selecting of the best coffee bean, imported coffee bean from other countries. Most of them love Vinacaf due to the Comment #1: A few participants are Most of interviewees choose brand credibility of selecting the finest loyal to a certain brands. Vinacaf as their favorite coffee and freshest coffee bean and its authenticity Vietnamese coffee. brand. Besides, they are willing Moreover it has many flavors. The to try a new one and switch to second most favorable coffee brands are TrungNguyen because it is strong other coffee brands to have more coffee brand with traditional tastes experience if they have better which suitable for Vietnamese. They are willing to experience other brands quality. and routinized purchase that brands as long as they perceive they obtain something more value of the brand.

Question 3: How do you All participants agree that a welldescribe an ideal cup of balance cup of coffees is the most desirable. That no one particular flavor coffee? dimension is dominant -- acidity, body, flavor notes. Full of body, perfectly balanced, and wonderfully smooth makes it perfect for any occasion, any time of day. Decadent, intense flavors create a truly indulgent taste experience. Question 4: Where do Almost interviewees answer that they you usually have coffee? would like to drink coffee at home Why? with family members because they feel quite comfortable. Other people like to drink coffee at coffee shop with their friend to chat Question 5: Some coffee All people strongly agree that they are drinkers perceive coffee to likely to drink coffee in the morning to be a morning drink to get the day started. They thought that get the day started. What it can help them refresh their mind is your thought on this? before starting a new day to work. Moreover it also brings to them more energy. Question 6: Do you prefer instant coffee or R&G Some people think that instant coffee coffee products? Which does not have good taste while R & G would you choose? coffee bring the authentic taste and aroma like Vinacaf.

Comment: Some people say that an The interviewees agree that an ideal cup of coffee which have high ideal cup of coffee is which has quality coffee bean. strong body, good smell, perfect balanced between taste and

flavor, high quality coffee bean.

Comment: Besides that, an Overall, interviewees often drink interviewee usually drinks coffee at coffee at home and at coffee. office before working.

Almost people respond that they usually drink coffee in the morning at home or coffee shop. It seems to be their habit when starting a new day.

Comment #1: There is only one person In general, the interviewees chooses instant coffee because of prefer R & G coffee product to convenience and cheap price. instant coffee even though it requires longer time. In additional, it also has different taste with instant coffee. It has more authentic taste and aroma than instant coffee.

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Question 7: What are the criteria that make you to decide to buy a particular R&G product over other alternatives? Why?

Many people think that strong brand without scandal can make them feel trust. They gave an example about a scandal of Highland coffee which have mouse in its products and print more day for expiry of products. This scandal makes them scare when thinking about Highland coffees product. To many interviewees, they do not care too much about the price. They are willing to pay high price for high quality product.

Comment #1: The respondents will buy if it has good and particular taste.

Question 8: How do you The respondents think that Highland coffee is opened by David Thai who perceive Highland coffee also is owner of Hard Rock coffee. as a premium coffee Highland coffee has more than 100 coffee shops. Furthermore, its product brand? has expensive price and some type of coffee have nice taste. Question 9: Do you have a brand in your mind before you usually shop for R&G coffee? If yes, which one and why? Lots people do not think exactly the coffee brand before go shopping. They think that in the supermarket, it has too many competitive coffee brands. They seem to have many choices.

The interviewees answer that trust brand/strong brand can bring to them belief when Comment #2: A factor makes them deciding to buy o particular R & buy R & G product is that a coffee can G product. They mentioned have some standard to retain aroma. about Highland coffee scandal which nearly make them Comment #3: Nice designed dissatisfied and feel scared. packaging Moreover, having wonderful taste, nice designed packaging Comment #4: Size is also one of the and big size also are factor make important criteria to decide to buy R & them to decide to buy product. G product. Because some product They gave recommendation have small size. It is not convenience about bigger size for R & G for people because they do not often product. Because they do not go to supermarket. have time for going to supermarket frequently. Comment #1: An interviewee thinks Many interviewees responded that when the first time, she hears that Highland coffee is opened about Highland, she thinks that it is a by talent owner. Besides that the foreign coffee brand. price of product is quite expensive. However, some Comment #2: Another interviewee say people do not believe that that Vietnam coffee brand create Highland coffee as a premium unbelief for her about the quality. coffee. Comment #: 1Some people are loyal customer of their favorite coffee brand. Therefore they do not spend too much time for thinking about brand before they buy. They just go to supermarket and buy their favorite coffee brand. Overall, not many people think about the coffee brand before go shopping.

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CHAPTER

CONCLUSION, RECOMMENDATION & LIMITATION

I.

CONCLUSION

In the timely manner, the extensive research was carried out successfully and generated worthwhile findings. Moreover, the work attempts to propose a diversified yet feasible solution with the aims to resolve marketing problems Highlands Coffee have been dealing with across all these years, re-position brand image perceived in the consumer mind and enhance competitive advantages to confront against key players like VinaCafe and TrungNguyen. The data collected reflect major changes in Vietnam consumers tastes, purchase criteria, usage rates, consumption patterns, and many other attributes. For instance, it appears that nowadays the rising population of the young-aged with hip and hop characteristic, as well as the creation of a large pools of coffee competitors, brand-switching rate in R&G coffee market seem higher than ever. These results reinforce the facts that it is so important for Highlands Coffee to have more effective and efficient marketing programs to differentiate the brand apart from other alternatives, attract new potential segments and retain those who have beloved Highlands products. We strongly believe that with the willingness to achieve higher results and well-managed implementation of the proposed integration marketing, Highlands Coffee will eventually gain back the trust in the public and definitely obtain a niche position in Vietnam R&G market in the near future.

II.

RECOMMENDATION

It is proven that most coffee consumers are willing to spend money for a premium coffee products with an enticing packaging, in which upholds and maintains a unique aroma and incomparable flavours. Based on the above findings and discussion, there is a clear gap between what majority of consumers demand and what value Highlands products intents to bring. We proposed a plan of realistic and applicable strategies for Highlands based on customer determinant attributes and purchase behaviours to match the market needs, enhance brand values and clearly position Highlands Coffee in R&G intense competition. Particularly, celebrity endorsement, social interaction activities, highly functional new packaging, and trade marketing all compliment and compromise each other, thus generating a powerful integration marketing mix to attain the ultimate objectives of Highlands.

Positioning Statement

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Highlands Coffee roast & ground is the leading brand in Vietnamese premium coffee market; fully packed of deep, rich and bold flavors, extraordinary taste, and incomparable aroma until the last drop.

Marketing Messages Highlands Coffee Big decisions cant wait Striking with a strong statement at the first impression, the message aims to trigger cognitive thoughts inside consumers mind and strive directly at what the market cries for. Highlands Coffee sets the pace for life of those who are young, energetic and need to make tactical calls every day. The product restores mental alertness, increase flow of thoughts and increase work productivity, leading to unexpected but brilliant creativity and lucid decisions. Additionally, implication behind the word Big also directs at the new bigger-size package that we will discuss below. After all, this emotional message distinguishes Highlands Coffee from other competitors and clearly defined the benefits of the brands products to the target customers.

1.

PR strategy to rebuild trust

Many businesses have been struggling the loss of credibility in customers perspectives and acted quickly yet appropriately to overcome the damage (Pitta & Katsanis 2005). However, Highlands Coffee havent taken any actions seriously upon the scandals it has been through, creating uncertainty and stereotype among the public against the brand all these years. So what is the magic to save Highlands Coffee from being mired in the muck and rebuild its image again? There isnt one. Rebuilding a reputation for a brand takes time and efforts. But it is possible if we have a long-term effective promotional mix strategy to spread the positive terms about the brand and increase favourable publicity (Fitzgerald 2003). Celebrity endorsement is capable to re-establish brand credibility and build up a sense of trust in the target audiences (Bettman 2009). It also helps to attract potential consumers, reinforce other marketing activities, and increase media coverage. We recommend Ngo Thanh Van and Johnny Tri Nguyen to appear as the key visuals for all of the marketing tools and events Highlands Coffee engages in. Undoubtedly, the strategy is high in execution cost; nevertheless, this is the right time to utilize such a powerful tool to breathe a new life into Highlands Coffee brand.

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On the other hands, the brands should partner with well-known non-profit organizations, namely Operation Smile, SOS Childrens Villages and involves in different activities like charity work, raising funds, conducting social-welfare programs (for example dedicating a percentage amount of one months product sales to orphanage houses, so the children could celebrate a warm Lunar New Year like others).

2. Refresh with innovative package

Our target market, due to the change in demographic and behaviour attributes, nowadays demands a R&G product from a reputable brand that has the best taste and is stored in the best looking and functional display. Thus, a change in Highlands R&Gs package and design is necessary. Highlands Coffee has introduced vacuum-sealed coffee pouches with valve application since the first day of entering the market. This type of bags is the standard for any coffee packaging and provide ultimate barrier against oxygen, moisture and simplified packaging process. However, the problem usually happens during post-purchase, after several times consuming and storing the products improperly. Vietnamese consumers usually use rubber bands to tight the packages, in which still allows moisture from external environment to steadily damage the inner products. Besides that, the pouches cannot stand on themselves since they are solely made from foiled, that explains why our products couldnt display beautifully on countertops of any households kitchens. Although every R&G players focus on supplying the finest coffee in the world, they usually forget to pay attention to how consumers store their products. Although, pouches may be convenient and low in price, they are not capable to remain the entire sensational aroma that coffee upholds and, unfortunately, diminishing quality over time (Hoenicke & Gatermann 2010). The best tool to make the most of consumer coffee experience matching the excellence of the world class coffee that Highlands humbly provide is to store the products inside an airtight jar (Labuza, Cardelli & Shimono 2009). Airtight canister jar can eliminate harmful effects such as air, moisture, excessive heat and direct sunlight that R&G products might expose to all the time. Made of borosilicate glass and featured a stainless steel lid with removable silicone gasket, this stylist clear coffee is ensured an air-tight seal and product freshness. Moreover, it is designed to spell classy and elegance and able to hold several pounds of coffee most preferable 1 kilogram. As proven, life is too busy to allow the target market to visit their favourite shopping sites frequently, thus a bigger size match nowadays fast beat of life and allows a convenient option of refilling the emptied canister for the next

42

purchase of Highlands Coffee pouches. Bigger size, 1 kilogram, gives an edge to Highlands in competing against other big fish in the market by fulfilling the insight of modern consumers. In short, with the same existing high-quality Highlands R&G coffee, line extension is used by introducing new size and new packaging material. Canister jar is definitely an instant eye catcher and ensure an authentic and exceptional taste of Highlands Coffee. Additionally, it refreshes the brand image and meets the needs of showing off premium brands that nowadays young coffee enthusiasts possess.

Pricing Strategy It depends on the production, marketing and other costs associated to determine an exact price for this new package product. But still, we recommend that price of a 1kg canister of Highlands Coffee Gourmet Blend should be charged in the range of 230-240 VND, since a 200g pouch of the same flavor is sold to end-consumers at the price of 50,000 VND. It is quite expensive, but then it compromises with the quality and value the products possess. One sip will make consumers realize that the price is worth it.

3.

Diversified trade marketing

To restate the previous parts, coffee consumers are likely to make purchase decision during evaluation process rather being aware of what they want to purchase. We cant stress enough the importance of trade marketing in this industry that comprises of many alternatives. With limited brand awareness, consumers will not purchase Highlands Coffees premium products unless they realize there are obvious differences in value and satisfaction they obtain compared to those of other key players. Side by side with the PR campaigns we proposed, sampling and booth activations are the keys of success. These two methods with effective implementation are the easiest way to generate awareness, product trial, and brand switching. Firstly, sampling allows potential consumers opportunities to experience Highlands highquality coffee, re-evaluate their negative stereotype towards the brand, driving immediate sales volumes at the selling points. In frequency manner, Highlands should conduct a twomonth sampling programs during peak hours of the trading sites to attract public attention and promote the new-package products. A team of 3 to 4 promotion girls will lead the activities,

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invite customers for free tastes, and educate them the benefits of the products. Eventually, repetition purchase and brand loyalty will be built. Secondly, standees, hanging mobile, and mock-ups will be utilized to inform the availability of Highlands R&G products, deliver the marketing messages, and eventually set the brand apart from the large pools of competitors. Not only those tools will be displayed in every supermarket products shelves, they will also be visible among Highlands caf chains as table tops, posters and brochures, taking advantage of the strong relationship between caf and coffee consumption.

III.

LIMITATION

One of the biggest errors that we met when doing this research is the unconscious misinterpretation which is concerning about the respondents problems that they dont really understand some of the questions and tend to answers incorrectly. For instance, there is a question that required respondents to rank the given brands form 1 to 5, 1 for the weakest and 5 for the strongest; many of them made the same mistake that they did not ranked but only estimated each brand. In addition, there are two main problems, which are acquiescence bias and extremely bias. Thus, some of the respondents answer quickly the questions by only say yes and some of them answers no for all the questions without thinking.

The second problem that found out is deliberate falsification that is the troubles that existed when the respondents are willing to answers the survey but they intend to give the wrong or untrue answers. For example, when we ask them about their occupation, they never answer that they are unemployed instead of students or employees. Moreover, in the income questions, the respondents also gave the untrue answers; they may answer higher 5 million, only 2% of the respondents in the range of fewer than 5 million.

The third problem is the targeted population; we first targeted on the high and middle class including employees, employers and in general is the business woman or business man. However, when we actually collected the survey and the result that we have found out is 59 in 100% respondents are students.

The final problem, which is the shortage of time, we only have 1 week to design a complete survey and one week to get them back. After that we have to analysis and

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emphasize all of the answers. If there were more time, we would like to spread out the number of respondents for the accurateness.

45

REFERENCES
Belk R W 2007, Handbook of Qualitative Research Methods in Marketing, Cheltenham, Australia. Bettman, J 2009, Celebrity Endorsement, Brand Meaning, and Self-Brand Connections, Connecting with Celebrities,viewed 25 December 2011. CafF 2011, Tieu thu ca phe tai Vietnam tang truong nhanh nhatthe gioi, Gia Ca Phe, viewed 2 December 2011, <http://giacaphe.com/13063/tieu-thu-ca-phe-tai-viet-nam-tangtruong-nhanh-nhat-the-gioi/>. Fitzgerald, N 2003, Rebuilding Trust in Business, CSR, viewed 28 December 2011. Gray, PS, Williamson, JB, Karp, DA & Dalphin, JR 2007, The Research Imagination: An Introduction to Qualitative and Quantitative Methods, Cambridge University Press, New York, USA. Highlands Coffee 2007, Highlands Coffee, viewed by 6 Decemeber, 2011, <http://www.Highlandsscoffee.com.vn/vn/index.html>. Hoenicke, K & Gatermann, R 2010, Studies on the Stability of Arcylamind in Food During Storage, Jounral of AOAC International, vol. 88, no. 1, 2005, viewed 28 December 2011. Labuza, T, Cardelli, C & Shimono, E 2009, Physical Chemistry of Roasted and Ground Coffee: Shelf life Improvement, Journal of DOF, viewed 28 December 2011. Morgan, DL 1997, Focus group as qualitative research, 2nd edn, Sage Publication, California, USA. Nhu, H 2008, Highlands khong hieu vi sao co banh trong chuot, tuoitre, viwed 11 December 2011, http://tuoitre.vn/Chinh-tri-Xa-hoi/282525/Highlands-Coffee-khong-hieu-visao-trong-banh-co-chuot.html Pitta, D & Katsanis, L 2005, Understanding brand equity for successful brand extension, Journal of Consumer Marketing, vol. 12, no. 4, viewed 25 December 2011.

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Reuters 2008, Vietnam's coffee consumption to accelerate, Asean, viewed 7 December 2011, <http://www.coffeeasean.org/details.asp?Object=23&news_ID=221256281&ID_Con=2>. Tran, Hao 2010, Thi truong ca phe Viet nam va co hoi cho doanh nghiep trong nuoc, IAM, viewed 4 Decemeber 2011, <http://www.iamvn.com/vn/default.aspx?news_id=201>. Zikmund, WG, Ward, S, Lowe, B, Winzar, H & Babin, BJ 2011, Market Research, 2nd edn, Cengage Learning, Australia.

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APENDICES
APPENDIX 1: HIGHLANDS COFFEE KHNG HIU V SAO TRONG BNH C CHUT
TTO - Nhng ngy qua, c dn mng xn xao truyn cho nhau thng tin v mt sn phm ca cng ty Vit Thi c "km" mt ch chut nht n mnh. V cho n chiu ti 9-10 th thng tin trn bng pht d di trong cng ng mng. Thng tin trong th gii mng m t s vic xy ra vo chiu ch nht (510) khi mt khch hng ang dng bnh kem ti qun c ph Highlands the Manor (91 Nguyn Hu Cnh, P.22, Q.Bnh Thnh, TP.HCM) - tr s chnh ca Highlands Coffee, thuc tp on Vit Thi International - th pht hin c mt con chut con nm ngay trong bnh. B ngt xu ti ch. Sau khi v vic xy ra, cc nhn vin ca Highlands Coffee gi in cho bo cho cp qun l cao hn gii quyt vn . Chiu ngy 9-10, b Nguyn Ngc Hn Gim c Marketing ca Cng ty TNHH Vit Thi Quc T cho bit: sau khi nhn c phn nh ca khch hng v v vic ny, Ban Gim c Cng ty ghi nhn v vic mt cch ht sc nghim tc nhm iu tra lm r nguyn nhn. Tr li TTO, sng 10-10, ng David P.Thi, Tng gim c - ngi sng lp Cng ty c phn Vit Thi Quc T cho rng s vic xy ra rt ng tic v HiglandsCoffee l mt thng hiu ln trn th trng bn l c ph v lun c quy trnh cht ch i vi mt m bnh. Hin cng ty ang thnh lp mt ban thanh tra ni b tm hiu v sao mt quy trnh cht ch, ngay c con kin cng khng lt qua, m li xy ra s c ng tic nh vy v s sm cng b trong thi gian ti. H thng HiglandsCoffee hot ng ti Vit Nam t 6 nm nay. []

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Translation: These days, many Vietnamese online community transmitted information about a product of Vietnam Thai companies "with" one focus mice "hiding". The incident was happened on Sunday afternoon when a customer was ussing coffee cake at the Highlands the Manor (91 Nguyen Huu Canh, P.22, District, HCMC) - the head office of

HiglandsCoffee, Vietnamese Thai International group - the detection of a mouse inside the cake. She fainted on the spot.

After the incident, the staff of Highlands Coffee phoned to tell higher management level to solve problems. On the afternoon of October 9th, Nguyen Ngoc Han - Director of Marketing Vietnam Co., Ltd.Thai International said that after receiving the customer's reflection on this incident, the Director of the Company has recorded a case seriously and going to investigate the reasons immediately.

Reproduced from http://tuoitre.vn/Chinh-tri-Xa-hoi/282525/Highlands-Coffee-khong-hieu-visao-trong-banh-co-chuot.html

49

APPENDIX 2: C ph Higlands"bn li hn s dng 31 nghn sn phm

Ngy 11-5-2011, thng tin t Chi cc qun l th trng (QLTT) TP H Ni cho bit, n v ny va pht hin v tm gi 31 nghn sn phm c ph ng lon ca hng c ph ni ting HiglandsCoffee c du hiu bn li hn s dng. Trc , ngy 10-5-2011, mt i cng tc ca Chi cc QLTT TP H Ni pht hin ti kho hng ca Tp on Vit Thi, nm ti x Tu Lit, huyn Thanh Tr, H Ni, 31 nghn sn phm c ph ng lon c bn li hn s dng. Tp on Vit Thi l doanh nghip chuyn sn xut v kinh doanh c ph, nhn hng HighlandssCoffee. Mt cn b phng nghip v Chi cc QLTT TP H Ni cho bit: Bn ngoi cc lon c ph ny, ngy, thng sn xut v hn s dng (in ln u) c ty xo nhng vn cn m, cha sch, bn cnh l ngy thng sn xut v hn s dng mi. V bn HiglandsCoffee cng tha nhn vic bn li hn s dng ny. Theo h (ngi pha HiglandsCoffee PV) th do cht lng ca cc sn phm ny vn cn s dng tt nn h gia hn cho tui i ca cc sn phm ny(!?). Vic bn li hn s dng ny c thc hin nh my trong min Nam, sau hng c vn chuyn ra Bc tiu th. Translation: HIGLANDSCOFFEE SHOOTS THE EXPIRATION DATE FOR 31 THOUSAND PRODUCTS On 11-5-2011, the information from market department management (Market Management) of Hanoi, discovered the unit coffee and temporarily seized 31 thousand canned coffee products coffee's famous HiglandsCoffee signs of "firing" the expiration date. Previously, on 10-5-2011, a work team of the Hanoi Market Management Department found out that in the warehouse of Viet Thai Group, located in the commune Tuu Liet, Thanh Tri district, Hanoi, 31 thousand coffee products Canned coffee is "fired" the expiration date. Vietnam Thai Group is an enterprise specializing in manufacturing and trading of coffee,

50

HiglandsCoffee brand. An official division of Hanoi Market Management Department said that outside the coffee cans, date of manufacture and expiry (in the first time) to be erased but still fuzzy, not clear, besides that is the date of production and the new expiry date. And the HiglandsCoffee has also admitted to "shoot" the use of this term. According to them (who the HiglandsCoffee PV) is the quality of the product is still good, so their use has extended the lifespan of these products (!?). The "shoot" the term used is made here in the South, and then shipped to the North for sale.

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APPENDIX 3
SUVERYS QUESTIONS Do you drink coffee? o Yes o No
Section 1: Contact Information Q1 Gender Male Female Q2 How old are you? Less than 18 18-25 26-35 36-45 Above 45 Q3 Level of your education Primary Education High school Intermediate Education University Q4 Your occupation Student Employee Employer (Self employed) House wife/husband Unemployed Retired Q5 How many members in your family? 0-1 2-4 5-6 More than 6 Q6 Please indicate your monthly income range Under 5 million VND 5,000,000 9,999,999 VND 10,000,000 14,999,999 VND 15,000,000- 19,999,999 VND Above 20 mil VND SA 1 2 SA 1 2 3 4 5 SA 1 2 3 4 SA 1 2 3 4 5 6 SA 1 2 3 4 SA 1 2 3 4 5

Go to Section 1 and Section 2 Thanks for spending time with us

52

Section 2: About drinking coffee Q7 You usually drink coffee in: Caf Home Office Others Q8 On average, how many cups of coffee do you consume daily? 1 cup a day 2 cups a day 3 cups a day More than 3 cups a day Myself My mother/father My Brother/sister My wife/husband Son/daughter Maid Myself My mother/father My Brother/sister My wife/husband Son/daughter Maid Q11 How often do you buy coffee? Once a week Once every 2 weeks Once every 3 weeks Once over 3 weeks Q13 Where do you normally buy coffee? Super markets Coffee shops Markets Family stores Convenience stores Less than 50,000 VND 51,000 100,000 VND 110,000-150,000VND More than 150,000 VND SA 1 2 3 4 SA 1 2 3 4 SA 1 2 3 4 5 6 SA 1 2 3 4 5 6 SA 1 2 3 4 SA 1 2 3 4 5 SA 1 2 3 4

Q9 Who often buys coffee in your family?

Q10

Who decides the coffee brand?

Q14

How much do you spend per purchase?

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Q16

How important is each of the following to you when purchasing/ordering coffee? Please indicate your answer from least unimportant to most important ( Tick options in the table below)

Price Taste Brand Packaging

Least Unimportant o o o o

Unimportant o o o o

Neutral o o o o

Important o o o o SA 1 2 3 4

Most important o o o o

Q17

What is the factor that influences your purchase decision the most? Choose one only

Price Taste Package Brand Yes No

Q18

Have you ever heard about Higlandscoffee?

Go to section 3 Thanks for spending time with us

Section 3: About HiglandsCoffee Q19 In order of preference, please rank these brands from 1-7 Highlandss Trung Nguyen Vinacafe Nestle The Coffee Bean & Tea Leaf

Q20

In your opinion, what are the differences of Highlands coffee compared with other coffee brands? Choose one only

Strong taste and quality Available everywhere Appealing packaging Favorable brand Others______________

SA 1 2 3 4 5

Roast and Ground Coffee Coffee beans are harvested from the coffee plantations, and then through the process of roasting and grinding into powder, coffee powder is packed to a small package before distributing to the supermarket and other stores. Q21 Have you ever bought/drunk Highlands R&G coffee? Yes No Go to section 4 Thanks for spending time with us

Section 4: About Highlands R&G coffee SA

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Q22

How did you find out about Highlands R&G coffee?

Friends-Families Internet Newspapers & Magazines Display at point of coffee shops Advertising Display at point of sales Good quality Unique taste with Vietnamese people Suitable price Represent the status

Q23

What do you think about Highlands R&G coffee?

1 2 3 4 5 6 SA 1 2 3 4

If YES, please specific your answer: Q24 Have you ever seen any promotion or advertising of Highlands coffee? o o Yes No

If you are allowed to give advice Q25 for R&G products improvement, what would you suggest?

_______________________________________________________ ____________________________________________________________ __________________________________________________

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APPENDIX 4: FOCUS GROUP DISCUSSIONS TRANSCRIPT

Moderator: Warmly welcome to the focus group discussion of Highlandsss coffee, so today is 31/12/2011 and also is the last day of the year, we would like to say Happy New Year to everyone. Moderator: Ok, Happy New Year. We would like to say thank you to all of you for spending time with us to participate in the focus group discussion so that we could understand more about your perception and buyer behaviors toward the R&G coffee product of Higlandsand before we start with the discussion, may I have the brief introduction of each respondent so can we start with the first person, please introduce yourself in full name as well as your age and occupation. Tran Thanh Nam: Hello everyone, My name is Tran Thanh Nam, right now I am working in a bakery and my age is 26 Bui Minh Hieu: Hello everyone. My name is Bui Minh Hieu, Im 27 years old and I am working for a insurance company. Nguyen Thi Moc Mien: I cannot speak English. I am 30 years old and am a housewife. Moderator: Because the third respondent cannot speak English so I would like to take turn to translate her answer into English and her full name is Nguyen Thi Mong Mien, 30 years old, currently she is a housewife. Thank you, Mrs. Mien. Pham Kieu Nga: My name is Pham Kieu Nga, 29 years old. I am working as a cashier for Minh Tuan Campany. Moderator: Thank you Ms. Nga. And how about the guy who is standing at the corner? Le Minh Ky: Hi, everyone. My name is Ky, Le Minh Ky, 27 years old. I work as a policeman at the District 1 police counter. Pham Thanh Thao: hello everyone, my name is Pham Thanh Thao. I am a student of The Open University, stream banking finance, nice to meet you. Moderator: Ok, should we start with the first question? And the first question for the discussion is how do you describe a premium coffee brand according to your perception and experience. You may start now. Tran Thanh Nam: May I start first? I drink a lot of coffee and experience a lot of coffee brands so my definition about a premium coffee brand is quite complicated. It can rise up the brand, the position at the market, the price, the quality of the product making up the premium

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for that brand. So I think a premium coffee brand can be determined, the most determinant attribute is the price. That brand must be expensive Moderator: According to his experience and perception, a coffee product that has a high price equal to that product is a premium brand. Is that right? Bui Minh Hieu: I think a premium brand is a brand that has its brand name and coffee shops extensively appear everywhere throughout the cities and countries. So that is my opinion. Moderator: So you mean a wide distribution equals to a premium brand? Bui Minh Hieu: yes Moderator: How about Mrs. Mien? Because she cannot understand the question so I am going to translate the question. Mrs. Mien: I think high price and high quality. Ms. Nga: In my opinion, a premium brand has to be modern technology and consistent producing process from selecting the fresh seed of the coffee to produce a very delicious cup of coffee. Mr. Nam: So your point is selection of the best determine the premium of that brand. So must that coffee bean come from local or foreign? Ms. Nga: I think is in local. Because, you know, transportation, shipping from other countries cost a lot of money. Moderator: So Ms. Nga seems having a good understanding of the coffee industry, right? You may have so much experience drinking coffee. Well, can I have something from Mr. Ky? Mr. Ky: I think a good coffee product means good packaging because I need to buy coffee to give it to my boss, so good design and beautiful can show my respect to my boss. Moderator: Thank you, Ky. That is very interesting answer. He needs a coffee product with a good design so he can give the coffee to his boss with the high respect from the boss, and how about Ms. Thao? Ms. Thao: I agree to all of you and I want to support for Ngas opinion. I think a premium coffee brand that have the bean come from Brazil, one of the top ten country import in the world. Ms. Nga: I want to add more. The other important factor is quality of the coffee bean, you know, to create a special taste you have to consider where to import or just using the local bean. Moderator: You guy have any other comment or enough?

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Mr. Nam: I think I care the best ingredients, high quality technology, well manage process of producing coffee, I think Ms. Nga makes a good point of it. I want to add another thing, the brand positioning in the market can also determine the premium, like if the consumer perceive that brand is credible and trustable, they can value that product very high. Moderator: I really appreciate your ideas. To sum up, I would like to have a quick look. All of you agree that modern technology with the high quality coffee bean and flavor should be strong and the price must be expensive because it reflects the quality of the coffee and we also have certain response that people also care about the packaging. Before move to the second question, I would like each of you name your favorite coffee brand. Mr. Hieu: Trung Nguyen because I spend a long time with it from I start drinking coffee. The taste is quite good. Ms. Mien: Vinacafe, do not want to change because it has a special taste. Ms. Nga: Vinacafe, willingly to change because want to try something new. Mr. Nam: Vinacafe, stick to one brand, it has different flavors. Nothing beat Vinacafe because Vinacafe s taste is the best. Mr. Ky: not addict to one brand, young and want to try something new. Mr. Thao: Trung Nguyen, strong brand in Vietnam, suitable taste to Vietnamese, willing to try if it has a better taste. Moderator: Mr. Nam and Ms. Nga are not willing to change. The rest is willing to change. Now, the third question is how do you describe an ideal cup of coffee? Mr. Hieu: contain elements: strong taste, smooth state, strong body of the coffee. Mr. Nam: romantic, smell taste good, flavor intend. Ms. Thao: taste, flavor, nice smooth to attract. Ms. Nga: flavor, ingredient. Moderator: If no further opinion, we will move to fourth question that is where do you usually drink coffee? Mrs. Mien: drink at home with her husband. Ms. Nga: coffee shop and home. Ms. Thao: coffe shop. Mr. Ky: at home and office, keep concentrate at work, drink with father. Mr. Nam: at home, morning and evening, to focus on working. Moderator: Some coffee drinkers perceive coffee to be a morning drink to get the day started. What is your thought on this? Mrs. Mien: comfortable, smart, work better.

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Ms. Nga: hobbit, more energy for a long day working. Mr. Nam: getting busy, do not have time to seat down to relax, solve complex in my head, help to make the wise decision. Mr. Ky: smart and wise to face with challenge. Moderator: Do you prefer instant coffee or R&G coffee products? Which would you choose? Ms. Nga: R&G, has different taste to instant coffee. Mr. Nam: Instant coffee is convenience, cheap, taste differ to Vietnamese coffee. Prefer R&G even it takes a longer time. Mr. Ky: As I said before, I love Vinacafe, has 2 types. Do not like instant because it is not like real, prefer R&G reserve authentic taste, most important I drink coffee because I addict to the aroma taste, not because for fun. Moderator: Thanks. It is very interesting that most of them prefer to R&G coffee, even though our life is getting busier and it is not easy to make R&G coffee. Take 5 minutes break. Moderator: Welcome back, next question is what are the criteria that make you to decide to buy a particular R&G product over other alternatives? Why? Mr. Nam: many competitors in super market, most important criteria is brand and package. Quality important, Vinacafe, Trung Nguyen promise to provide the best taste. Ms. Thao: High quality coffee. Vinacafe, Trung Nguyen has no scandals. Ms. Nga: Higlandshas many scandals. Scandals about the mouse, cheating on expire date. Mr. Nam: Do not want to try Highlandss. Mr. Ky: stick a new date on the can, do not respect the customer. The size is the most important because I cannot buy frequently. Ms. Nga: The taste is not consistent. Moderator: That is interesting that the question asking the criteria to make the customer purchase product, but most of you reveal the scandal of Highlandss. Mr. Nam: mentioning the decreasing quality, I do not choose the coffee bag. After a certain time, the coffee has no taste anymore. I prefer the coffee can. Moderator: Thanks, Mr. Nam. The next question is how do you perceive Highlandsss coffee as a premium coffee brands not a coffee shop? Mr. Nam: Higlandsis popular nowadays. The owner comes back from USA and originally from Vietnam, David Thai. Mr. Nga: Because of scandals, I do not want to purchase any products from Highlandss.

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Ms. Mien: I think Higlandsis popular, after joining the discussion group, I afraid of Highlandsss coffee. Moderator: And now is the last question, I am not going to take your time anymore. Do you have a brand in your mind before you usually shop for R&G coffee? If yes, which one and why? Mr. Nam: I usually do not because every time I go shopping, there are many alternatives. I look at the package and brand. Ms. Nga: I do not think about this when shopping. Base on the price and package, I decide the coffee that I buy. Mr. Ky: Yeah, before going to super market. I check out what product is in my house. Go to that and find if there is a new product with a sample, so I will try it. Moderator: Ok thank you everyone for the great answer and on my hand now is the incentives for each of us. Please consider these incentives as a special thank from the research team to everyone. So this is for Mr. Nam, Mr. Hieu. Because we have 3 females, so I think it would make you very happy when you open it. Thank you again for your time and enthusiastic. Goodbye.

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Photos taken during the focus group discussion at RMIT Saigon South Campus

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