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The world has proven that coffee has actually became an industry with total
transaction value is $ 80 billion worldwide, ranking second after oil industry in terms
of good value and go beyond the gold, silver and precious stones to become the
invested good. The industry has expanded and contains elements of finance, trade,
investment, tourism, culture, knowledge economy, ecotourism, coffee travel. In
Vietnam, coffee is day by day becoming one of the most important economic sectors
contributed $2 billion per year in GDP. From coffee, many companies have developed
and success including Trung Nguyen. Trung Nguyen is a marvelous success of brand
building in Vietnam in recent years. Within less than 20 years, from a small warehouse
in Buon Ma Thuot to process coffee, Trung Nguyen has developed and presented its
good in all regions of the country. Trung Nguyen has made a spectacular entry in the
history of buiding brand in Vietnam.
Trung Nguyen Coffee Corporation (called as: Trung Nguyen Coffee) was established
in 1996 as a new coffee brand in Vietnam and has quickly built up reputation and
becomes one of the most familiar coffee brands for consumers in the domestic and
international markets.
After more than ten years, Trung Nguyen Coffee has developed and emerged into a

powerful group with six members working in major industries namely: coffee
manufacturing and processing, trade tea; franchising and distribution services as well
as retail.
Trung Nguyen currently contains nearly 2000 employees, 3 factories and 5 branches
from the north to south of Vietnam together with one joint venture company placed in
Singapore. Furthermore, the company also indirectly creates jobs for more than 15,000
employees through 1000 system franchising coffee shops across the country. Trung
Nguyen so far has developed many products namely: creative coffee, weasel and
legendee coffee, Passiona low-caffeine coffee, and G7 instant coffee. Please see Trung
Nguyen’s products in the Table as below:
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Table 1. Products of Trung Nguyen coffee

Instant Coffee G7



Gourmet Blend



A research showed that Trung Nguyen is the coffee brand obtaining the biggest
consumer base in Vietnam
market in the last 3 years
from 2009-2011. Nearly 10
million out of 17 million


purchased Trung Nguyen’s

Diagram 1. Market share of G7

coffee products for in-home consumption. The researched also indicated that G7 (3in1)
instant coffee has leaded the Vietnamese instant coffee market with 38% market-share
in total in 2011 (see the diagram above).
The competitive advantages of Trung Nguyen coffee: the company is facing
competitive advantage enormously by being actively control input source,
manufacturing system with factories in the north and south of Vietnam which help to
save costs in term of prices and quality.
Declaration and positioning: During the earlier development process, Trung Nguyen
Coffee is considered sugar water with flavored coffee. After years of development,
Trung Nguyen coffee has always insisted his reason by giving the message and
positioning “it is true with Trung Nguyen". This statement is confirmed quality is the
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leading factor that Trung Nguyen has always pursued by the coffee products have high
quality , position in the market for coffee in Vietnam and around the world .
What has been achieved always require Trung Nguyen to constantly move forward. To
maintain the advantage as well as leading coffee brand in Vietnam, Trung Nguyen has
always been awarded of strategic importance for the company. This will be driven
growth path in the future. To get a proper comprehensive strategy, the company has a
detailed analysis of these factors. Detailed content analysis will be presented in the
following section.

Impacted Factors
Live cycle:

Vietnam coffee industry began to form and develop from the late 19th century by the
French who make the foundation. However, over the centuries, coffee and coffee
industry Vietnam has not really developed until after 1990 -2000 years after Vietnam
participation and integration into the world economy. Therefore, the coffee industry is
assessed as beginning development stages.
Trung Nguyen Company provides this assessment based on evaluating specific data as
According to statistics, coffee exports in 2012 reached 1,732,156 tons, valued at $
3,672,823,086, an increase of 37.8% in volume and 33.4% in value compared with the
same period last year.
In 2012, Vietnam ranks the top coffee exporters to the U.S. market, with 203,516 tones,
achieving value at $ 459,616,328, an increase of 46.8% in volume and 34.7% in value
compared with the same period on a year before, accounting for 12.5% of total export
value. The other bigger import markets of Vietnam coffee include Germany and Spain
respectively, worth $ 427,178,275 and $ 216,281,513, an increase of 28.2% and 59.3%.
The average export price in 2012 is $ 2,120 / ton, down from an average price of
exports in 2011 reached $ 2,191 / ton.
Currently the supply of raw materials in Vietnam has a stable stage and continues to
rise. This proves that the coffee industry is growing fast (see diagram). According to the
data shown we can see, café area and yields are increasing steadily in the years from
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2004 to 2014. If



when the country
began to increase
production at 700




thousand tons in
2010 to 2013, the
number was close
to 1,800 thousand
tons (more than 2 times). Period 2006 - 2010 production increased but not significantly
from 2010-2013 to increase the yield (see table below). This suggests that the café area
and yields are still rising.

Table 2 – Quantity of Vietnam coffee in phase 2005 – 2010, source: BCT
However, the actual exports of coffee in the recent time do not increase or increase but
no stability. The numbers of small coffee exporters in Vietnam are very crowded with
over 100 businesses but they have strong competition resulting in reducing price. This
situation form Trung Nguyen Coffee the ideas of thinking about the unification
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Vietnam exports so that the export value will be higher both in quality and quantity.
From the thoughts that inspired Trung Nguyen to build a proper strategy to shape coffee
exports Vietnam.
Besides export markets, coffee consumption in the domestic market also showed some
very encouraging data. Speed domestic coffee consumption is relatively high growth
and stability, crop forecasts in 2010/2011 production of domestic coffee consumption
will reach 12.1 % growth over the same period last year.
Instant coffee market goes up
According to the British Coffee Association, in 2000, the share of instant coffee
consumption only accounts for 13 % of total coffee consumption and only 10 years
later, this figure exceeded 40 %, the current instant coffee continues to accelerate
strongly and threatened proportion of the product consumed traditional roasting coffee.
Two nations with the highest rate of consumption of instant coffee are England with 81
% and Japan with 63 %, while in the traditional U.S. market, sales of instant coffee
accounts for only 9 %.
According to data from the International Coffee Organization (ICO), instant coffee
consumption in Vietnam grew 31 % in 2010, reaching 1,583 million packs of instant
coffee which accounts for 38.5 % of total consumption, roasted coffee grind up about
61.5 %. Growth of instant coffee production increased by only about 4.5 % but the
growth of instant coffee consumption in Vietnam has reached double digits.
Diagram 2 – Total instant coffee of Viet Nam (Ton)

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Source: MARD

These data were analyzed in very detail and thereby shape the strategic of Trung
Nguyen coffee for the domestic market as well as exports. This strategic orientation of
Trung Nguyen Group will become Vietnam's leading coffee and coffee contributes to
the development of Vietnam towards sustainability.


Up to the current period, the instant coffee market Vietnam is ongoing "nettle race"
between three typical companies including VinaCafe (Bien Hoa Coffee - VinaCafe
JSC); Nescafe (Nestle - Switzerland) and G7 (Trung Nguyen Company). So far, Trung
Nguyen is still the market leader in Vietnam instant coffee but to maintain and
strengthen the position may also exporting instant coffee to other countries that are
extremely important targets. After the target formed, Trung Nguyen has formed
strategies developing instant coffee containing spirit and style of Vietnamese people
and will offer to the world.
To implement this strategy, Trung Nguyen has focused on the study of national taste.
This study divided into 03 main markets: the taste of Asia – expect to export to Asian
countries; Taste and Europe; taste of America (North America) for soluble coffee
exports to two continents. Trung Nguyen also actively building a network of
international distributors - has branches in Singapore and manufacturing supply chain.
When completed, this system will help companies to secure supplies as well as
distribution system completed.
For roasting coffee export industry, Trung Nguyen is currently competing in the 3
major competitors including Vietnam Coffee Corporation and over 100 small
businesses as analyzed and company also has a strategy ( see part 1 ) .


In term of export market, Vietnam's coffee exports mainly to the European region,
official statistics in 2013 coffee exports to the region reached 568.0 thousand tons with
a turnover of 1.2 billion (down 13.7% in volume, turnover decreased by 15.6%
compared with 2012). There are 13 markets in the European coffee imported Vietnam
coffee and there were 11 import market has fallen comparing to previous years, only 2
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markets have increased in 2013 including British market (increased by 13.1% in
volume, 6.9% increase in turnover) and Russia (increased by 11.2% in volume, an
increase of 13.0% in turnover).
Asia is the second largest region importing Vietnam coffee in 2013, reaching 269.0
thousand tons with a turnover of 598.9 million, down 21.8 % in volume and 20.6 % of
the metal value compared with 2012. Trung Nguyen has 11 regional markets of Asia
import coffee from Vietnam, in which Japan and China are the two leading importers,
specifically exports to Japan reached 78.1 thousand tons turnover of U.S. $ 167.6
million, to China reached 37.1 thousand tons with a turnover of 96.2 million. Notably,
exports to India and Israel show signs of growth compared to 2012, exports to India
increased by 3.8 % and 4.8 % of turnover, to Israel with 11.0 % growth increasing and
16.8 % of turnover.
Besides, the company also targets the African market. This is a new market and
potential. For the turnover, the market has accounted for over 10 % of export revenues
of Trung Nguyen.
It is founded that the maintenance and development of traditional markets and new
markets is vital for development of Trung Nguyen coffee. Trung Nguyen's strategy is to
focus research, search and maximize the market.

Products for replacement

The current market appears many drinks that can replace coffee for example:

First, the bottled product made from chocolate contains a large amount of
increased tone, stimulates the brain produces endorphins - an endogenous
hormone ( often called the " hormone of happiness " ) makes people manic
happy, fun and increase energy reserves and can affect drinking coffee

Second, red apples contain vitamins and fiber, are suitable to eat morning, on an
empty stomach. In the list of “substitute coffee " also have oatmeal , cereal , fish,
chicken, green tea ... So outside café , customers can choose the drinks to gain
weight fair in each breakfast.

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Besides, there are also a lot of other bottle drinks can replace coffee. However, if you
look at the fact that most customers use coffee as a habit to replace the crops that will
not affect the consumption of coffee.
However, these analyzes also put Trung Nguyen on new opportunities. Strategic
diversification from coffee products was formed. Trung Nguyen is studying the
market and will provide bottled coffee products are very handy and compete directly
with existing drinks.

Supply resources:

Supply is the coffee growing areas are mainly distributed in the Central Highlands and
some other localities like Quang Tri, Binh Phuoc or Dien Bien province. Currently the
Central Highlands is the largest coffee plantation where are the majority of the
country's area. Other provinces also started planting coffee like Quang Tri as 1% of the
total area. The new province in the north also started planting coffee but untapped.
Therefore these areas are not located in the local map of Vietnam coffee plantation.
Details of the coffee growing regions are shown in Figure below.



Beside the domestic competitors, currently, there are some foreign investors who have
been or prepared to invest in Vietnam. Therefore, they will become competitors of
Trung Nguyen.
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PEST Analysis

Economic Environment

According to economists, the economic environment is the entire economic factors
such as employment, income, inflation; interest rates, productivity, and wealth affect
the buying behavior of consumers and the organization. Overall, Vietnam’s economy
in 2013 is growing stable. Production growth and the positive changes going on in the
last year, however, economic growth is still low.
Stable macroeconomic Environment stability:
The inflation index is remained stable. The consumer price index (CPI) is slowed
down in November, at 0.34 % compared to October, up 5.5 % compared with 12/ 2012
increased 5.78 % compared to the same period in 2012. Thus, inflation in 11/ 2013 is
slow at the second lowest since 2003 back here (after 2009).
Interest rates have fallen steadily, stabilizing the exchange rate, balance of payments
improved. Ceiling deposit interest rate has been lowered from 14 % to 12 % interest
rate credit fell from a year earlier, this trend is being pushed imaginative direction and
flexibility of market fluctuations and take know of inflation. This is an opportunity for
companies to access concessional loans of banks, maintain and expand production.
The infrastructure of the economy as well as factors is affecting the purchasing power
of the market. If poor infrastructure increases the costs of production and consumption
of products, product price increases, which will reduce the products competitiveness in
the market. Once the service distribution and promotion has been slow due to the
impact on markets of infrastructure will make the product difficult to access or slow
access to the company's products.
Sector Environment
Due to the slowing economy in most developing countries, so the situation is declining
export coffee. Coffee exports of Vietnam in 2013 reached 1.3 million tons with an
export turnover reached $ 2.7 billion, down 24.8 % in volume and 25.9 % in value. If
compared with the previous year, 2013 was the year that coffee industry has been a
significant decline in export volume and export value.

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Review within five years, exports of Vietnam's coffee growing growth in the first 4
years (from 2009 to 2012) with an average growth rate of 17.7 % / year. This suggests
that the main market imported goods is increasingly popular coffee Vietnam and the
number of export markets in coffee growing expanded (2008, coffee exports to
Vietnam 74 market, by the end of 2013 had reached 86 markets). However, the world
economic situation difficult , consumer demand for this item in the import market is
significantly reduced due to the economic downturn , natural disasters diseases ( like
rain ice , water shortage , rust ) that seriously affects the productivity and quality of
coffee products ... leading to the country's coffee exports in 2013 we both volume
decline , both in terms of metal value .

Political Environment

Currently, Vietnam's political stability is considered. This is a very basic element to
attract foreign investment and is highly appreciated. Survey locations with the most
attractive investment investors Japan by the Trade Promotion Organization of Japan
(JETRO) done this clearly acknowledged. And the factors attractiveness of this
business is due to political stability.
Policy innovation, opening with political stability, a safe living environment, security
is the underlying cause that amount of capital foreign direct investment into Vietnam.
In November 2013, this capital gain of $ 10 billion, an increase of 9.9 % compared to
the same period last year. Export turnover increased by 24.5 % in 11 months, a growth
rate much higher growth rate under high goals and many times the GDP growth rate.
Unstable political situation in Vietnam has decisive significance in the economic
development, employment income for workers, increasing consumer demand of
society. This also impact on the creation and implementation of the strategies the
Vietnamese enterprises.

Social Environment

Vietnam's social strides bass levels on human index. In addition, information systems
and communications to people are very good. Therefore Trung Nguyen needs more
conditions to reach customers.

Technology Environment
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These factors create opportunities and challenges coexist forcing businesses to learn
skills to make marketing strategies. As one of the inputs of the production process, so
this is an important factor to decide the production of effective corporate structure or
not. So that also affect the marketing activities of the Central Highlands are using
technological factors to promote the sale of products on the market.
Trung Nguyen has applied the new achievements of the equipment and machinery to
produce the product has quality efficiency of both facilities. On the other hand the
impact of science and technology to the advertisements and stitched level
communication about the product. Science has developed to meet the demand for
consumer products in both quality and quantity. Science and technology also creates
new manufacturing resources effectively to help businesses reduce production time
and improve production efficiency. So the challenge is constantly changing production
With regard to the conduct of scientific research and the application of scientific and
technological progress , which is the basis to find useful ways of processing milk suit
different consumer tastes . This is also one of the challenges learn to market faster
through the channel advice on science and technology policy.


Strategy and Implementation Plan

Overall, Trung Nguyen is trying to diversify its products to meet the needs of enjoying
coffee of all kinds of customers with emphasis on instant coffee and coffee export.
Instant coffee: Trung Nguyen will have many products and different prices to meet
the tastes of all classes. Instant coffee will be distributed at the department stores,
supermarkets. Trung Nguyen will also link with one large distribution company to
distribute products efficiently. Instant coffee products will be distributed in the city
before they are available in countryside. Real research shows that consumers enjoyed
kind of Cappuccino instant coffee of Trung Nguyen. According to the survey of over
1000 customers, it shows very positive reaction results. This kind of coffee had
attractive, very gently scent, in a line with the people and is mainstream product.
Hence, Trung Nguyen hope in the long and medium term, instant coffee of Trung
Nguyen will account for 35% instant coffee market share. Instant coffee of Trung
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Nguyen desires to achieve the purpose that is to become the favorite products in this
Coffee shops: This product confirms Trung Nguyen coffee brand, and thus it only
focuses on customers with average income or more. Trung Nguyen coffee shops will
have different prices with product lines such as:
 Common products: including products as vitality coffee, aspirations coffee,
conquest coffee.
 Medium products: including products as Passion coffee filter coffee, roasted
coffee seeds…
 Advanced products: including products as Diamond Collection café, Legendee
café, Classic Blend café …
Trung Nguyen coffee shops have youthful, luxury, warm style to serve the young that
like coffee, middle and upper class. Trung Nguyen not only shows customers how to
enjoy coffee but also gives information about coffee types, effects and practice to
make the most delicious coffee. Contents are as follows:

Trung Nguyen will introduce the healthy benefits of drinking coffee: Coffee
seeds contain antioxidant minerals; using coffee in the morning is effective in
increasing the metabolism, helps burn calories; coffee is also good for

cardiovascular system…
 Making the coffee at Trung Nguyen café shop raises the curiosity, inspiration
and creates its own culture of coffee.
Those actions will act on specific strategies of Trung Nguyen coffee is a supplier of
high-quality coffees. Café will not only products alone but also has its own value.
Analysis shows that the company's strategy has always been concretized through
vision and mission. So, I would like to conclude by the company's strategic vision
statement and mission of the company:
Vision: To become a conglomerate promoted the rise of Vietnam’s economy,
maintaining the autonomy of national economic and inspire, demonstrate a desire to
explore the Great and conquer Vietnam.
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Mission: Build leading brands by bringing coffee to enjoy creative inspiration and
pride in bold style Trung Nguyen Vietnamese culture.

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1. Strategy and development program, Chapter 12, Marketing Management,
Philip kotler, Custom Edition for University of Phoenix, Upper Saddle River,
New Jersey 07458
2. Main impact of coffee, March 2013, http://www.vietrade.gov.vn/kien-thuc-kinhdoanh/109-chin-lc-tham-nhp-th-trng.html




4. Trung Nguyen and distribution system in Vietnam, 09 February 2006
5. Overview






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