FOREIGN TRADE UNIVERSITY

……….O0O……….

MIDTERM REPORT

INTERNATIONAL-EXPANSION MARKET STRATEGY FOR

TRUNG NGUYEN LEGEND

Hanoi, 2024
 Table of Contents
1. Executive summary 4
2. Background information on Trung Nguyen Legend 4
2.1. Overview 4
2.2. Regarding International Marketing 4
3. Export Marketing Screening 5
3.1. Preliminary screening 5
3.1.1. GDP, PPP 5
3.1.2. Political stability 5
3.1.3. Bureaucratic delay 7
3.1.4. Related cultural factors 7
3.2. Fine-grained screening 8
3.2.1. Market attractiveness 8
3.2.2. Competitive Strength 16
3.3. Models for market selection 23
4. Market entry mode 24
4.1. Market entry criteria 24
4.1.1. Internal factors 24
4.1.2. Product 24
4.1.3. Desired mode characteristics 27
4.1.4. External factors 27
4.1.5. Transaction-specific factors 28
4.2. Mode of entry 28
5. Marketing Mix (STP & 4Ps) 31
5.1. STP 31
5.2. Product 33
5.2.1. Main product line 33
5.2.2. Side product line 33
5.2.3. Brand & other components 33
5.3. Price 35
5.3.1. Internal Factors 35
5.3.2. External Factors 36
5.3.3. Price Policies 40
5.3.4. Price Strategy 40
5.4. Place/Distribution channel 41
5.4.1. Determinants of channel decisions 41
5.4.2. Channel decisions 43

2
 5.5. Promotion 44
5.5.1. Communication process 44
5.5.2. Final direction for promotion: 47
6. Conclusion 49
7. References 51

3
1. Executive summary

In recent years, Vietnamese coffee has gained significant attention in the global market due to its
distinctive flavors and brewing methods. Trung Nguyen Legend, as a leading player in the
Vietnamese coffee industry, plays a significant role in introducing Vietnamese coffee into the
international market. Leveraging the success and reputation of Vietnamese coffee culture, Trung
Nguyen Legend aims to penetrate new markets effectively and profitably.

The key to Trung Nguyen Legend successful international expansion lies in a comprehensive
marketing strategy tailored to the characteristics of each target market. By leveraging its authentic
Vietnamese coffee experience, Trung Nguyen Legend aims to captivate consumers and establish a
strong position in the global coffee landscape.

This study will examine the potential markets as well as propose marketing strategies for Trung
Nguyen Legend to penetrate into the most lucrative and suitable market.

2. Background information on Trung Nguyen Legend

2.1. Overview
Trung Nguyen has been a Vietnameses’ beloved coffee brand since 1996 with the G7 packaged
coffee product. Following the inspirational entrepreneur story of founder Dang Le Nguyen Vu, the
company has a rebrand in 2016 into Trung Nguyen Legend, an energy coffee brand that promotes
a purposeful lifestyle for the youth. Following the rebrand, Trung Nguyen launched its own coffee
shop chain - Trung Nguyen Legend Coffee World, and currently has 86 locations in Vietnam and 4
in China. Each coffee shop displays a classy, elegant, and inspirational style, showcasing 3 “coffee
cultures”: Ottoman, Zen, Roman.
2.2. Regarding International Marketing
Following the 5th coffee wave, Trung Nguyen Legend introduces new Legend coffee products and
has ambition to open coffee chains around the world. Beside the Vietnamese market, Trung
Nguyen coffee products have also gained the love of Chinese consumers (Chnbrand, 2019). This
partly initiated the opening of Trung Nguyen Legend’s first foreign coffee shop in Shanghai,
China in 2022. Currently, Trung Nguyen Legend boasts 4 coffee shops in China and a
representative office in Korea (2023).

4
3. Export Marketing Screening
3.1. Preliminary screening
3.1.1. GDP, PPP
GDP PPP denotes gross domestic product based on purchasing power parity. This index provides
an easy way to compare different countries on their living standards, thus being the first priority in
our screening process. When the standard of living is high, the potential profit for Trung Nguyen
Legend is also high.

World Economics reports the following 20 countries with the highest GDP PPP:

Table 1.Top 20 countries, ranked by GDP PPP (World Economics, 2023)

3.1.2. Political stability

5
This metric indicates if a country has a stable political and governmental basis. A stable politics in
the target country is crucial for expansion, as it decreases external uncertainty and harm while
doing business, ensuring our long-term development. The following is the 2022 World Bank data
on Political stability & Absence of Violence/Terrorism of the above 20 countries:

Country Political Stability

Japan 1.1

Canadia 0.8

Germany 0.6

Korea, Rep. 0.6

United Kingdom 0.5

Italy 0.4

France 0.3

Spain 0.3

United States 0.0

Brazil -0.3

Saudi Arabia -0.4

Thailand -0.4

Indonesia -0.4

China -0.4

India -0.6

Mexico -0.7

Russia Federation -0.9

Egypt, Arab Rep. -1.0

6
 Turklye -1.0

Nigeria -1.8

Table 2. Aforementioned countries ranked by political stability index (World Bank, 2022)

The authors have chosen the top 9 countries from the table above (with non-negative scores) to
further analyze.

3.1.3. Bureaucratic delay

In general, countries in Europe have an on-going culture of red tape and bureaucratic delay,
especially for foreign businesses.
● Italy’s tax burden and red tape has encouraged corruption for a long time. While reforms
have taken place in recent years, Italy’s finance and labor markets are still negatively
affected by inefficient bureaucracy, difficult financing options. This in turn demotivates
entrepreneurs to develop in the country (Hentsch, 2018).
● France has considerably high corporate tax rates at over 28%. Moreover, companies have
to pay other types of taxes including property and consumer goods taxes. Foreign business
entries are also significantly slowed due to excessive establishment laws (Safeguard
Global, 2022).
● Spain has a centuries-old heritage of red tape and is a somewhat bureaucratic nation.
Entrepreneurs will undoubtedly be faced with a lot of paperwork in setting up a new
business, let alone a foreign one (Andalucia, 2022).
● Germany possesses many drawbacks regarding bureaucracy. For instance, new businesses
have to register with local trade, commerce, tax offices, and a couple more related
authorities. Tax laws are a significant burden, consisting of 9 tax payments per year for
businesses, averaging 200 hours of business time (Wolters Kluwer, 2020).
● The UK has a lengthy resolution process for property registration, which can take up one
full month. Businesses also have to pay employee taxes together with business taxes as
well (Wolters Kluwer, 2019).
Therefore, the authors have decided to move forward with 4 countries: the US, Canada, Korea,
and Japan.
3.1.4. Related cultural factors
As Trung Nguyen Legend prides itself on a rich coffee lifestyle and its origins, cultural factors
play an integral part in our screening process. Out of our top 4 countries, research shows that

7
Japan is not as suitable as the other 3 countries for us to expand to, as Japanese has a long-lasting
culture of tea ceremony, and tea is beloved by the majority of the population (Coffee BI, 2023).

This concludes the study’s preliminary screening with 3 countries: the US, Canada, and Korea.

3.2. Fine-grained screening

3.2.1. Market attractiveness
3.2.1.1. Market size (...%)
● Indicator: Market value of coffee industry (in billion U.S. dollars)
The bigger the market size, the more revenue the market is generating and the more attractive the
market is for Trung Nguyen Legend to enter.

o The US: $11.4bn

o Canada: $3.1bn
o Korea: $2.2bn
(Source: Statista, 2023)

● Scale of comparison:

Market value
Scale
(Billion U.S. dollars)

Lower than 1.5 1 Very poor

1.5 - 2.99 2 Poor

3 - 4.49 3 Medium

5 - 6.49 4 Good

Higher than 7 5 Very Good

● Classify the score:

8
 Country The US Canada Korea

Score 5 3 2

3.2.1.2. Market growth (...%)

● Indicator: Market value growth rate of coffee industry (in billion U.S. dollars)
The bigger the market growth, the more potential the market has in the future for Trung Nguyen
Legend to capitalize on.

o The US: 4%
o Canada: 5%
o Korea: 2.7%
(Source: Statista, 2023)
● Scale of comparison:

Market growth rate

Scale
(%)

Lower than 1.5 1 Very poor

1.5 - 2.49 2 Poor

2.5 - 3.49 3 Medium

3.5 - 4.49 4 Good

Higher than 4.5 5 Very Good

● Classify the score:

Country The US Canada Korea

Score 4 5 3

9
 3.2.1.3. Affordability of doing business (...%)
● Indicator:
This criteria will include several factors which indicate the average basic expenses of doing
business in that country.
The higher the affordability of doing business in a market, the easier and more efficient it is for
Trung Nguyen Legend to operate in.
● Geographical distance between Vietnam and selecting markets (in km): reflects ease and
cost of transportation
o The US: 13,789 km
o Canada: 11,565 km
o Korea: 3,109 km
(Source: Map data, 2024)
● Hourly minimum wage (in U.S. dollars): reflects cost of operation and staffs
o The US: $7.25
o Canada: $12.32
o Korea: $7.40
(Source: Velocity Global, 2024)
● Rent index (in points): reflects estimated price of rental
o The US: 44.7
o Canada: 36.0
o Korea: 17.1
(Source: Numbeo, 2024)

● Scale of comparison:

Geographical Hourly minimum Rent index

distance wage (points) Scale
(km) (U.S. dollars)

Higher than 12,000 Higher than 10 Higher than 1 Very poor

40

9,000 - 11,999 7.5 - 9.99 30 - 39 2 Poor

6,000 - 8,999 5.0 - 7.49 20 - 29 3 Medium

10
 3,000 - 5,999 2.5 - 4.99 10 - 19 4 Good

Lower than 3,000 Lower than 2.5 Lower than 10 5 Very Good

● Classify the score:

Country The Canada Korea

US

Geographical distance score 1 2 4

Hourly minimum wage 3 1 3

score

Rent index score 1 2 4

Average score 1.6 1.6 3.3

3.2.1.4. Buying power of customers

● Indicator: Calculated based on the data of disposable income and average propensity to
consume
This refers to the amount of money that consumers have available to spend on goods and services.
The higher the buying power, the more likely they are to buy coffee and other products from Trung
Nguyên Legend coffee shop.
● Disposable income per capita in 2023:
o The US: $58,870.00
o Canada: $28,140.00
o Korea: $14,770.00
(Source: World Bank ,OECD)
● Average propensity to consume (APC):
o The US: The APC of USA is estimated to be around 0.83, meaning that Americans
spend 80% of their disposable income on goods and services
o Canada: The APC of Canada is estimated to be around 0.92

11
 o Korea: The APC of Korea is estimated to be around 0.952
(Source:Statista)
● Based on (1) and (2), we have calculated consumption expenditure per capita in 2023:
o The US: $48,861.1
o Canada: $25,888.8
o Korea: $14,064.64
● Scale of comparison:

Consumption expenditure
Scale
(Thousand U.S. dollars)

Lower than 10 1 Very poor

10 - 20 2 Poor

20 - 30 3 Medium

30 - 40 4 Good

Higher than 40 5 Very Good

● Classify the score:

Country The US Canada Korea

Score 5 3 2

3.2.1.5. Government regulations

Government regulations can affect the market attractiveness by influencing the cost, quality,
availability, and demand of coffee and related products
The US:
● Health and Safety Regulations: The US has stringent health and safety regulations for food
service establishments. Coffee shops must adhere to standards set by the Food and Drug
Administration (FDA) and local health departments to ensure food safety and sanitation.

12
 ● Licensing and Permits: The US requires coffee shops to obtain various licenses and
permits at the federal, state, and local levels. These regulations vary by location and can
impact the time and cost of opening a coffee shop.
● Zoning and Land Use Regulations: Zoning laws and land use regulations dictate where
businesses can operate. Coffee shops must comply with local zoning ordinances and obtain
approval from city planning departments before opening.
Canada:
● Health and Safety Regulations: Canada has strict health and safety regulations for food
establishments. Coffee shops must adhere to standards set by Health Canada and local
health authorities to ensure food safety and hygiene.
● Licensing and Permits: Coffee shops in Canada must obtain licenses and permits from
various government agencies at the federal, provincial, and municipal levels. These
regulations can impact the time and cost of opening a coffee shop.
● Language Requirements: In certain parts of Canada, particularly Quebec, language
regulations may require businesses to provide services in both English and French.
Korea:
● Foreign Ownership Restrictions: Korea, like many countries, may have restrictions on
foreign ownership or investment in certain industries. International coffee brands need to
assess these regulations to ensure compliance and may need to partner with local
businesses or navigate other legal structures to operate within the bounds of the law.
● Licensing and Permits: Obtaining licenses and permits to operate a coffee shop in Korea
can be complex and time-consuming. Government regulations may require foreign
businesses to navigate various bureaucratic processes, which could delay the opening of
the coffee shop and increase operational costs.
● Health and Safety Standards: Korea enforces health and safety standards for food and
beverage establishments. Coffee shops must adhere to regulations related to food handling,
cleanliness, and sanitation to maintain consumer trust and avoid penalties.

● Scale of comparison:

Government regulations Scale

Highly restrictive and burdensome 1 Severe regulatory obstacles hinder business

regulations operations.

13
 Many strict regulations 2 Numerous regulatory requirements complicate
business procedures

Moderate strict regulations 3 Regulations exist but are manageable and do not
excessively impede business activities

A few strict regulations 4 Limited regulatory hurdles facilitate smoother

business operations

Highly favorable regulatory 5 The regulatory landscape is conducive to business

environment growth and ease of operations.

● Classify the score:

Country The US Canada Korea

Score 3 4 2

3.2.1.6. Coffee consumption behaviors

Indicator: Coffee assumption per capita, Preferences, Coffee Culture and Coffee Industry Shifts
● The US:
o Coffee Consumption Per Capita: The United States is one of the largest consumers
of coffee globally, with 4.4 kgs per capita.
o Preferences: Americans have diverse preferences, ranging from traditional drip
coffee to specialty espresso-based drinks. There's a growing trend towards specialty
and gourmet coffee.
o Coffee Culture: The US has a robust coffee culture, with a plethora of coffee shops,
including national chains like Starbucks and Dunkin', as well as independent cafes.
Coffee consumption is deeply ingrained in American lifestyle and social
interactions.
o Trends: Specialty coffee, single-origin beans, cold brew, and artisanal brewing
methods are gaining popularity. There's also an increasing emphasis on
sustainability and ethical sourcing in the coffee industry.
● Canada:

14
 o Coffee Consumption Per Capita: Canada also has a high coffee consumption per
capita, with 5.85 kgs per capita in 2019
o Preferences: Tim Hortons, a Canadian coffee and fast-food chain, holds a dominant
position in the Canadian coffee market. Canadians enjoy a variety of coffee drinks,
including traditional drip coffee, espresso-based beverages, and specialty drinks.
o Coffee Culture: Coffee holds significant cultural importance in Canada, serving as
a social lubricant and a reason for gathering among friends, families, and
colleagues.
o Trends: While traditional coffee remains popular, there's a growing interest in
specialty and gourmet coffee. Canadians are increasingly interested in artisanal
coffee roasters, third-wave coffee shops, and ethical sourcing practices.
● Korea:
o Coffee Consumption Per Capita: Korea has experienced a remarkable surge in
coffee consumption in recent years, with a growing coffee culture among Koreans.
The average coffee consumption per capita of Korea in 2019 reached
2.3kg/person/year.
o Preferences: Korean consumers often prefer sweeter and creamier coffee drinks,
such as lattes and flavored beverages. Convenience and accessibility are important
factors driving consumer choices.
o Coffee Culture: Coffee consumption in Korea is deeply embedded in social
interactions, with coffee shops serving as popular venues for meetings, dates, and
social gatherings.
o Trends: The Korean coffee market is dynamic and constantly evolving. There's a
strong emphasis on aesthetics, design, and customer experience in coffee shops.
Korean consumers are also increasingly interested in specialty coffee, cold brew,
and unique coffee creations.

● Scale of comparison:

Coffee consumption behaviors Scale

Unattractive market with limited coffee consumption, preferences, and 1 Very low
culture.

15
Below-average market attractiveness with moderate coffee consumption 2 Low
and evolving preferences.

Average market attractiveness with established coffee consumption, 3 Moderate

diverse preferences, and coffee culture.

Above-average market attractiveness with high coffee consumption, 4 High

diverse preferences, strong coffee culture, and emerging trends.

Highly attractive market with exceptionally high coffee consumption, 5 Very High
sophisticated preferences, deeply ingrained coffee culture, and
innovative trends

● Classify the score:

Country The US Canada Korea

Score 4 4 3

3.2.1.7. Summary

Criteria Weight The Canad Kore

US a a

Market size 20% 5 3 2

Market growth 20% 4 5 3

Affordability of doing business 10% 1.6 1.6 3.3

Buying power of customers 15% 5 3 2

Government regulations 10% 3 4 2

Coffee consumption behaviors 25% 4 4 3

Total 100% 4.01 3.61 2.58

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 Table 3. Market Attractiveness - Scoring

3.2.2. Competitive Strength

● The US: Starbucks is the strongest competitor.
● Canada: Tim Hortons is the strongest competitor.
● Korea: Starbucks is the strongest competitor.

3.2.2.1. Price per ounce

● Indicator: Trung Nguyen Legend’s price per ounce vs. the competitors’.
The higher the price of the strongest competitors in each market, the lower the market entry
barrier for Trung Nguyen Legend.
o Trung Nguyen Legend: Price/oz: $0.20 (Trung Nguyen Coffee, 2023)
o The US (Starbucks): Price/oz: $0.18 (Hardbacon, 2024)
o Canada (Tim Hortons): Price/oz: $0.13 (Hardbacon, 2024)
o Korea (Starbucks): Price/oz: $0.18 (Hardbacon, 2024)

● Scale of comparison:

Price/oz ($) Scale

0.10 or lower 1 Very poor

0.10 - 0.15 2 Poor

0.15 - 0.20 3 Medium

0.20 - 0.25 4 Good

0.25 or higher 5 Very Good

● Classify the score:

Country The US Canada Korea

Score 3 2 3

17
 3.2.2.2. Product Differentiation
● Indicator: The uniqueness and differentiation of Trung Nguyen Legend’s products
compared to the competitors’. Consider factors like taste, quality, variety, and innovation.
The higher the product differentiation, the higher the chance to enter the market and capture
customer attraction.
o The US and Korea (Starbucks):

▪ While Starbucks localized adaptations and variations to cater to specific

market preferences, it maintains consistency in its brand and offerings

globally.

▪ Trung Nguyen Legend Cafe specializes in robust Vietnamese coffee with

unique flavors like “cà phê sữa đá” (iced milk coffee) and “cà phê trứng”
(egg coffee). They focus on high-quality beans and traditional brewing
methods. Starbucks offers a wide range of globally sourced blends and
flavors, emphasizing consistency. They have an extensive menu, including
espresso-based drinks and seasonal specialties. Both brands prioritize
innovation, with Trung Nguyen Legend Cafe preserving Vietnamese coffee
culture and Starbucks introducing new beverages and technology.
o Canada (Tim Hortons): Tim Hortons offers smooth, medium-bodied North
American coffee blends. Trung Nguyen Legend Cafe offers a diverse range of
coffee products and accessories, while Tim Hortons provides a variety of coffee
and non-coffee options. Trung Nguyen Legend Cafe focuses on preserving
Vietnamese coffee culture and introducing innovative blends, while Tim Hortons
regularly introduces limited-time offerings. Both brands cater to different tastes and
preferences.

● Scale of comparison:

Product Differentiation Scale

Very low 1 Very poor

Low 2 Poor

Medium 3 Medium

High 4 Good

18
 Very high 5 Very Good

● Classify the score:

Country The US Canada Korea

Score 4 5 4

3.2.2.3. Distribution Channel

● Indicator: Number of Trung Nguyen Legend’s stores globally (113 outlets) vs number of
the strongest competitors in its market.
The higher the number of competitors’ stores in each market, the harder for Trung Nguyen Legend
to enter the market.
o The US (Starbucks): 16,386 stores (ScrapeHero, 2024)
o Canada (Tim Hortons): 3,587 stores (ScrapeHero, 2024)
o Korea (Starbucks): 1,893 stores (Yonhap News Agency, 2023)

● Scale of comparison:

Number of stores Scale

10,000 or higher 1 Very poor

5,000 - 10,000 2 Poor

1,000 - 5,000 3 Medium

500 - 1,000 4 Good

500 or lower 5 Very Good

● Classify the score:

Country The US Canada Korea

Score 1 3 3

19
 3.2.2.4. Origin of coffee beans
● Indicator: Trung Nguyen Legend Cafe's expertise in its single-origin coffee beans sourced
exclusively from some specific coffee-growing regions within Vietnam (including the
Central Highlands, Buon Ma Thuot, and Da Lat), comparing with the multi-origin coffee
beans offered by major competitors in each country. Coffee consumers are more preferred
by concentrated flavors and high quality coffee, which originated in a specific region.
The more a coffee is sourced from a single origin, the more likely it is to be preferred by
coffee enthusiasts.

o The US and Korea: As mentioned in Starbucks Website, the coffee belt is divided
into three main regions including Latin America, Africa, and Asia and Pacific
areas. They also provide some single-origin coffee beans from Colombia (a round
body, juicy taste and signature nutty finish), Ethiopia (vibrant, lush flavors ranging
from citrus to berry)
o Canada: Tim Hortons primarily focuses on blends rather than offering a wide range
of single-origin coffees. Most coffee beans come from known coffee regions such
as Colombia, Guatemala, and Santa Rosa.

● Scale of comparison:

Origin of coffee beans Scale

Expertise in single-origin coffee products 1 Very poor

Many wide-known different origins and single-origin coffee 2 Poor

products

Many wide-known different origins and some seasonal 3 Medium

single-origin coffee products

Many wide-known different origins and no single-origin coffee 4 Good

product

Some known origins and no single-origin coffee product 5 Very Good

● Classify the score:

20
 Country The US Canada Korea

Score 3 5 3

3.2.2.5. Cultural alignment:

● Indicator: How Trung Nguyen Legend Cafe can align itself with cultural nuances of each
country.
The better Trung Nguyen Legend can adapt to the culture of the specific market without
compromising its own values, the higher chance for the company to fit into this market.

o The US and Korea: Starbucks has achieved significant cultural alignment in the US
by understanding and adapting to American and Korean consumers' lifestyle,
values, and preferences. Indeed, this brand offers American's fast-paced lifestyle
convenient locations, and drive-thru services nationally. Starbucks stores are also
used as community hubs, providing comfortable spaces for socializing or working
in both countries. As understanding the consumers’ behavior, Starbucks empowers
customers to tailor and personalize their beverage, reflecting individualism and
self-expression culture. In Korea, Starbucks uses hangul (Korean letters) and
incorporates pictures of palaces or other historical sites in Korea on several items.
It also comes up with products appealing to customers like “Spring Strawberry
Latte”, “BLACKPINK Strawberry Choco Cream Frappuccino”. Additionally,
through diversity training, inclusive hiring, and support for LGBTQ+ rights,
Starbucks promotes diversity and inclusion in its workforce and customer base,
which could align with American values of equality and acceptance.
o Canada: Tim Hortons plays an important role in Canada's culture and has long been
recognized as a national symbol and popular coffee branch in this country.
Therefore, the strong connection and trust make it harder for Trung Nguyen Legend
Cafe to penetrate into.

● Scale of comparison:

Cultural alignment Scale

Very low cultural alignment 1 Very poor

21
 Low cultural alignment 2 Poor

Medium 3 Medium

High cultural alignment 4 Good

Very high cultural alignment 5 Very Good

● Classify the score:

Country The US Canada Korea

Score 5 2 4

3.2.2.6. Market share

● Indicator: Trung Nguyen Legend’s market share compared to its competitors; it indicates
the percentage of the total sales/revenue in a market that a business makes up.
The higher market share of its competitors like Starbucks and Tim Hortons, the lower
chance for Trung Nguyen Legend Cafe to penetrate and establish a strong presence in the
market
o The US (Starbucks): 41% (Statista, 2022)
o Canada (Tim Hortons): 54% (Canada Coffee Market Research Report, 2023)
o Korea (Starbucks): 81.7% (Statista, 2022)

● Scale of comparison:

Market share (%) Scale

61 - 100 1 Very poor

41 - 60 2 Poor

26 - 40 3 Medium

11 - 25 4 Good

0 - 10 5 Very Good

22
● Classify the score:

Country The US Canada Korea

Score 2 2 1

3.2.2.7. Summary

Criteria Weight The Canad Kore

US a a

Price per ounce 25% 3 2 3

Product 15% 4 5 4
Differentiation

Distribution Channel 10% 1 3 3

Origin of coffee beans 20% 3 5 3

Cultural alignment 20% 5 2 4

Market share 10% 2 2 1

Total 100% 3.25 3.15 3.15

Table 4. Competitive Strength - Scoring

3.3. Models for market selection

23
 Figure 1. MACS

US Canada Korea

4.01 3.25 3.61 3.15 2.58 3.15

A country B country B country

Table 5. Final MACS Scoring

4. Market entry mode

4.1. Market entry criteria
4.1.1. Internal factors
4.1.1.1. Firm size
● Trung Nguyen Legend owns 5 factories in Vietnam and employs over 5,000 workers, with
annual revenue exceeding 5 trillion Vietnamese dong and several hundred thousand coffee
distribution points. The corporation operates the Trung Nguyen Legend coffee chain in the
mid to high-end segment, currently comprising 80 locations (60% self-operated and 40%
franchised), along with the E-Coffee retail system in the mass market segment, which
currently has 800 points of sale (95% under a zero-dong franchise model).

4.1.1.2. International Experience

● Trung Nguyên Legend has been exporting coffee to numerous countries around the world:
the US, Canada, Russia, UK, Japan, China…

24
● The corporation has been developing the franchising strategy in foreign countries
o In 2001, the corporation was successful in franchising in Japan and Singapore
o In 2022, Trung Nguyên Legend Cafe launched its first shop in Shanghai, China and
received well reviews from customers, caused a fever throughout the media and
social networks, especially spreading quickly among young people and captivating
people's hearts
o Up till now, the brand has 3 shops in China, and plans to open 130 more shops in
2024. Their ultimate goal is to have an operation of 1000 shops in the country.
4.1.2. Product
4.1.2.1. Product complexity
● Product complexity is assessed based on 5 dimensions: Variety, Functional index,
Structural index, Design index and Production index
● Variety: Trung Nguyên Legend Cafe offers a diverse range of coffee products, including
different blends, flavors, and formats
o High-end, luxury product: Weasel, Legendee…
o Instant Coffee: Classic, Special Edition, Iced Milk Coffee
o Capsule: Roman, Ottoman, Meditation
o Drip Bag: Vietnamese Blend, Americano and Fusion Blend
o Cappuccino
o Passionia
o Whole bean
● Functional index: The corporation focuses on delivering high-quality coffee with
consistent taste, aroma, and brewing characteristics. This requires meticulous sourcing,
roasting, and quality control measures to maintain functional excellence.
● Structural index: Trung Nguyên Legend Café's products involve complex processes such
as sourcing and blending coffee beans, roasting, and packaging. Ensuring consistency in
these processes while accommodating variations in flavor profiles adds to the structural
complexity.
● Design index: The corporation pays attention to product design, with visually appealing
packaging and branding that communicates quality and authenticity. Design elements
contribute to the overall perception of the brand, enhancing its complexity.
● Production index: Trung Nguyên Legend Café operates advanced production facilities to
ensure consistent quality and high-volume output. The production process involves
coordination of sourcing, roasting, blending, and packaging operations.

25
⮚ Based on the product complexity, Trung Nguyên Legend Cafe should consider higher

entry modes like intermediate and hierarchical in order to ensure consistent taste, aroma,
brewing characteristics, packaging as well as adapt to the local culture.

4.1.2.2. Product differentiation advantage

● Mission, Vision: Trung Nguyen Legend pioneers a revolutionary vision and mission,
redefining the coffee industry with groundbreaking ideas and brand strategies.
o Vision: The great organization through serving humanity
o Mission: Build the unified humanity under the value system of the enlightened
lifestyle for success and true happiness
● Product portfolio: A wide range of different brands (listed in product complexity), serving
a diverse audience from high-end customers to casual coffee lovers
● Cultural Fusion for Global Appeal:
o To honor the world coffee heritage, Trung Nguyen Legend Cafe is the first and only
model to converge, filtering the essence of 12 centuries of coffee development
according to 3 typical coffee civilizations: Ottoman - Roman - Zen. From space
architecture, arrangement to F&B product system, or retail products are all created
and arranged according to the 3 coffee civilizations. Not only bringing special
coffee flavors, but also top coffee experts from Trung Nguyen Legend are ready to
share interesting stories about the history, culture, and art of coffee.
o Trung Nguyen Legend Cafe model also brings famous cups of coffee that have
accompanied in life, careers of famous people, or top favorite drinks in the world
by professional baristas. Especially, creative corners, awakenings with the
Life-changing Library cabinet along with the coffee product system defined as
Awakening Energy, Aspiration Energy, or Power Energy..., along with the images
of famous people and inspiring quotes are a special highlight that no chain has.
● Tribution to home country:
o Aspiring to establish Vietnam's position in the coffee industry and become a leader
in the global coffee sector, Trung Nguyen Legend has, over the past 27 years,
positioned itself as a pioneer in building the brand of Buon Ma Thuot - the
homeland of the world's finest Robusta coffee. Bringing international stature to this
region, it has become a global destination for coffee lovers. Trung Nguyen Legend
continues to propose many important initiatives to build and develop Buon Ma
Thuot's brand into the "Coffee Capital of the World." Alongside remarkable
activities honoring the culture and people of the sacred land of Buon Ma Thuot, the
26
 birthplace of Coffee Philosophy, it advocates for the implementation of Vietnam's
iconic "Iced Coffee with Milk", "Vietnamese Filter Coffee", and proposes that the
coffee-growing region of Buon Ma Thuot be recognized as a UNESCO-recognized
cultural heritage site.

⮚ A highly differentiated product, such as the complex coffee offerings of Trung Nguyên

Legend Cafe, can be a significant attraction for potential partners in entry modes like
franchising or licensing. Partners may be drawn to the unique and appealing characteristics
of the product, seeing it as a valuable asset to offer customers.
4.1.3. Desired mode characteristics
4.1.3.1. Risk averse
● Even though Trung Nguyên Legend Corporation has been operating in foreign countries
for two decades, Trung Nguyên Legend Cafe - its brand member - just initiated its
international expansion in 2022.
● For stability growth, the brand should consider less risky strategies as they entail lower
level of financial, management and operation risks

4.1.3.2. Control and Flexibility

To ensure control and flexibility in its international expansion, we suggest Trung Nguyên Legend
Cafe consider intermediate entry modes. While lower modes such as exporting may offer initial
market access with minimal investment, they often entail limited control over distribution, pricing,
and brand image. On the other hand, higher modes like joint ventures provide greater control but
may involve significant financial commitments and shared decision-making with local partners.
4.1.4. External factors
Sociocultural distance between home country and host country:
A great distance is perceived between Vietnam - the home country, and the US - the host country,
in terms of culture, business and industrial practices. This distance suggests that Trung Nguyen
Legend should forfeit direct investment and instead opt for intermediate modes.

Country risk / Demand uncertainty

US consumers spending will continue to grow, but at a slower rate than previous years. This
results in a roughly similar demand for coffee in the US market for the foreseeable future.

Market size and growth & intensity of competition:

27
While the US has steady year-on-year growth of the coffee market and high consumption, the
competitive scene is fierce with a lot of competition, from coffee chains like Starbucks, McCafe,
to local coffee shops. Trung Nguyen Legend should emphasize on modes that grants flexibility
and ability to spread while using moderate resources if they want to acquire market share.

4.1.5. Transaction-specific factors

Tacit nature of know-how
Trung Nguyen Legend is a coffee shop brand that promotes coffee originality and the lifestyle it
brings about. As the coffee products itself are available worldwide, and the coffee shop is
essentially a service offering, the nature of the business has low tacit nature. So Trung Nguyen
Legend can utilize intermediate entry modes to have a faster penetration into the US market.

4.2. Mode of entry

Intermediate Advantages Disadvantages

entry mode

Licensing - Minimal initial investment - The licensees' performance in

- Rise in revenue from marketing and other managerial tasks
already-developed products as a result falls short of expectations
of costly research - Absence of oversight of licensee
- A profitable spin-off if the licensor activities
is able to provide the licensee - It is possible for the licensee to
additional goods or parts underutilize the market
- The licensee's local marketing, - The risk that the licensee won't have
distribution network, and current enough fund
consumer relationships are - Governments frequently place
immediately available to the licensor restrictions on the supply of
- Government contract securement components or the transferrals of
thanks to local production royalties
- Patent protection - Expensive to negotiate with the
licensee and the local government

Franchising - More authority in comparison to - The price of preserving goodwill and

licensing brand recognition
- Low-cost, low-risk entry strategy

28
 - Highly driven business contacts, - Finding qualified franchisees may be
financial resources, and expertise in costly and time-consuming
the local market - Not having complete control over
- Achieving economies of scale while the activities of franchisees
marketing to clients abroad - Issues with local laws, such as
- Capacity to establish new, far-off money transfers, franchise fee
foreign markets more swiftly and payments, and limitations placed on
extensively franchise agreements by the
- An early indicator of potential future government
foreign direct investment - The company's reputation and global
profile could be jeopardized if certain
franchisees perform poorly

Joint venture/ - Having access to contacts and - Issues with transfer price
Strategic knowledge in regional marketplaces - Joint venture contributions may start
alliance - Decreased political and market risk to seem out of proportion

- Access to the resources and abilities - Loss of command over activities

of the other partner abroad
- Joint failure risk - Over time, each partner's level of
- Economies of scale through resource importance for the enterprise may
and skill pooling fluctuate
- Gets around host government - A loss of discretion and adaptability.
limitations - Cultural disparities
- Possibility of improved ties to - Issues with joint venture
national administrations as a result of management structures and dual
having a local partner parent staffing.

Conclusion:
Hence, the most suitable intermediate entry mode for Trung Nguyen Legend should be
franchising. The business can start with a small scope and carefully select franchisees.
Here's a deeper dive into this decision:
● Pros:

29
 o Compared to letting another party gain a license or forming a joint venture, franchising
requires less upfront investment and allows for quicker market penetration. This can be
crucial in a competitive market like the US, where time and resources are valuable.
o Trung Nguyen doesn't need to directly manage operations in the US stores, which
reduces risks associated with unfamiliarity with local regulations, staffing, and market
trends. The franchisee assumes these responsibilities, mitigating potential losses for
them.
o Carefully crafted franchising agreements can give Trung Nguyen Legend significant
control over brand standards, product quality, and marketing. This ensures a consistent
and authentic brand experience for US consumers, protecting the brand's reputation.
o It earns royalties based on sales generated by the franchisee, providing a steady
revenue stream without significant involvement in daily operations.
● Cons:
As there are significant cultural differences between the US and Vietnam, Trung Nguyen Legend
would need to be sensitive to these differences. Selecting a reliable and capable franchisee is
crucial. Poor performance or brand violations can damage Trung Nguyen Coffee's reputation and
future expansion possibilities.

5. Marketing Mix (STP & 4Ps)

5.1. STP
Segmentation - Targeting
Demographic:
● Age: 18-45
● Occupations: Professionals, Employees, Students
● Life-cycle stage: Singles, Married couples
Geographic:
● Region: US
● Density: Urban cities
Psychographic:
● Social class: Middle, Upper-class markets
● Lifestyle: Achiever, Explorer, Entrepreneur, Aspirer, Meditator
Behavioral:
● Benefits sought: A place to work and meet. Enjoying a coffee with a classic, relaxing
atmosphere

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 ● Others: Enthusiastic about coffee origins, avid coffee tasters

Positioning
Trung Nguyen Legend is a quality coffee brand that inspires people. Apart from providing an
ambience for coffee and meeting people, the brand also promotes its exquisite coffee origin and
showcases 3 major coffee cultures. Customers can visit, have freshly ground Trung Nguyen coffee
while enjoying the stories behind Trung Nguyen coffee and the lifestyle it promotes.
Given the desired positioning, Trung Nguyen Legend would towards the Comfortable
environment and High specialty attributes on the positioning map:

Figure: Positioning map for Trung Nguyen Legend in the US (Source: Bournemouth, Blogspot)
5.2. Product
5.2.1. Main product line
Coffee
● Trung Nguyen Legend Coffee: Energy Drink (Energy for Prosperity, Energy for Creativity,
Energy for Connection), Drip bag…
For this product line, we suggest keeping the Trung Nguyen Legend Coffee portfolio due
to its diverse offerings and exceptional quality, formulation, and conceptual innovation. This range
not only showcases a spectrum of flavors but also encapsulates the essence of its Vietnamese
heritage, accentuating its origin with each sip. By maintaining this portfolio, we affirm its
reputation for excellence while celebrating the distinctive Vietnamese taste.

31
 However, in order to cater to the American preference, we propose adjusting the formulas
of these products to cater to the American taste, especially the most popular coffee - Latte and
Iced Coffee. This adjustment is essential as Vietnamese coffee is often considered to have a strong
and bitter flavor profile attributed to robusta beans.

Tea/Smoothie/ Fresh drinks

In addition to maintaining the existing portfolio from the Vietnamese branch, we recommend
expanding the product line to incorporate a selection of healthy smoothies. This strategic addition
caters to the prevalent preference among Americans for nutritious beverages.

Main course/Food/Dessert
Besides from the popular Vietnamese meals that have already included in the menu such as Bánh
mì, Phở, Cơm…, we suggest adding some other popular side food/dessert such as croissant,
tiramisu, cookies, cheesecakes, yogurt.

5.2.2. Side product line

● Coffee: Roasted Coffee, Instant Coffee, Coffee Beans…
● Books
● Merch: Totes, Cups, Bottles, Notebooks, Pens, Umbrellas…
5.2.3. Brand & other components
● Brand kit: We continue to keep the Trung Nguyen Legend Cafe brand kit
o Name: Trung Nguyên Legend Cafe
o Logo: The symbols of the crescent moon and heart intertwine, corresponding to the
rays of the sun symbolizing the movement and harmony of the laws of the universe
and the laws of emotions. This clearly demonstrates the ideas and thoughts of Mr.
Dang Le Nguyen Vu - the founder of Trung Nguyen, honoring the beauty of the
awakened lifestyle, and of those who pursue that lifestyle. It is crystallized from
dedication, selfless service, and the spirit of discipline, transcending oneself as well
as always striving for truth, humanity, and beauty in every action of each
individual.
o Color: Black, White and Royal Yellow
o Values:

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 ▪ Heritage: Honors the rich heritage of Vietnamese coffee culture, drawing

inspiration from centuries-old traditions to deliver authentic coffee

experiences.

▪ Quality: Committed to uncompromising quality standards, Trung Nguyen

Legend meticulously selects the finest beans and employs artisanal roasting
techniques to ensure every cup is a testament to excellence.

▪ Innovation: With a spirit of innovation and creativity, Trung Nguyen

Legend pushes boundaries, introducing new flavors and concepts that

redefine the coffee experience while staying true to its roots.

▪ Community: Trung Nguyen Legend fosters a sense of community and

camaraderie, bringing people together over a shared love for exceptional

coffee and enriching cultural connections.
● Decoration and Service
● Honoring the global coffee heritage, Trung Nguyen Legend Coffee World is the first model
to converge, filtering the essence of 12 centuries of coffee development across 3 exemplary
coffee civilizations: Ottoman - Roman - Zen. From spatial architecture, layout to F&B
product systems, or retail products, all are creatively designed and arranged according to
the 3 coffee civilizations. Not only bringing special coffee flavors, but also top coffee
experts of Trung Nguyen Legend are ready to advise, share interesting stories, and inspire
about the history, culture, and art of coffee. Customers can also directly experience the
differences, especially of the 3 coffee civilizations through performances, tastings.
● The Trung Nguyen Legend Coffee World model also brings famous cups of coffee that
have accompanied in life, the careers of famous figures, or top favorite drinks in the world
by professional baristas who have undergone at least 1,000 hours of practical training.
Especially, the creative corners, awakening with the Life-Changing Bookshelf system
along with the coffee product system are designated as Awakening Energy, Aspiration
Energy, Power Energy, or the Philosopher - Expert - Artist product set..., along with the
images of famous figures and inspiring quotes are a special highlight that no chain of
stores has.
● The coffee culture associated with Americans often is speed and quantity, rather than
relaxation and enjoyment. However, Trung Nguyen Legend Coffee stands for leisurely
indulgence and awakening energy. To combine the 2 different cultures, we propose the

33
 Coffee & Library model, transforming establishments into havens where patrons can work
and study amidst the serene ambiance. This fusion allows individuals to savor their coffee
while immersing themselves in productive pursuits, fostering a harmonious balance
between productivity and pleasure. Additionally, to accommodate our bustling clientele,
we advocate for experimenting with a drive-through model, offering convenience without
compromising on the quality and essence of the Trung Nguyen Legend Coffee experience.
5.3. Price
5.3.1. Internal Factors
● Firm-level:
o Corporate & marketing objectives: Trung Nguyen in general and Trung Nguyen
Legend specifically aims at building a “different, special and one-and-only” brand.
o Production locations: Trung Nguyen Legend makes their coffee shops spacious for
areas like meditation, displays. Hence, they often spend a lot of money on renting.
o Firm positioning: Like its name “Legend”, Trung Nguyen Legend view themselves
to be a premium segment coffee brand that brings a unique coffee experience.
On average, the profits of Trung Nguyen Legend is around 10 - 15% of the
revenue.
o Country of origin: Vietnam has a well-established reputation when it comes to
coffee. International customers will have a good impression on Vietnamese coffee
and may even view Trung Nguyen Legend as a coffee expert.
● Product:
o Product positioning: Trung Nguyen Legend wants to bring an all-around coffee
experience in their coffee shops. Hence, the customers get to taste high quality
coffee, enjoy high-class service yet at a reasonable price.

5.3.2. External Factors

5.3.2.1. Environmental
● In the United States, the tariff rate was 5.4% for all goods, and 10.6% for agricultural
products, and 4.5% for manufactured goods based on Most Favored Nation (MFN) in
2020. The tax rate for imported coffee is 0%, which is favorable for Vietnam to export
coffee in the USA (Source: The Ministry of Finance).

34
 Figure 2: The Sales Tax Rate of all States in the US (Source: Tax Foundation, 2023)

● In the US, sales tax rates vary depending on the policies of each state, which mostly range
from 5% to 7% (Source: Tax Foundation, 2023). It is recorded that California is the state
that imposed the highest sales tax rate with 7.25% plus the local district tax rate regardless
of take-away or on the premises beverage (Source: California Department of Tax and Fee
Administration, 2021). Meanwhile, from 2023, there has been no statewide sales tax
among five states, namely Alaska, Delaware, Montana, New Hampshire, and Oregon.

● There is also state sales tax between Origin-Based and Destination-Based. In an

Origin-Based state, it does not matter if customers pick their purchase or have it delivered
because all sales are subject to state's sales tax. However, when it comes to
Destination-Based Authority, the tax rates differ with picked up and shipped products.
Particularly, if a customer purchases an item in-store and takes it home immediately, sales
tax is based on the store's location. Conversely, if a customer buys an item in-store but gets
delivery to their home, the sales tax depends on the state's sales tax rate where the
customer lives.

35
 Figure 3: Origin-Based and Destination-Based State Sales Tax (Source: Taxjar, 2021)

● The US government does not currently impose direct price controls on coffee.
● Anti-dumping investigations against Vietnamese coffee have been initiated in the past, but
none are currently active.
● In January 2024, Vietcombank announced a dollar exchange rate of 24,395 VND for
buying and 24,765 VND for selling per dollar. The current exchange rate represents a rise
of approximately 1.4% since the start of the year and is roughly 0.5% below the highest
point reached at the end of October 2022.

36
 Figure 4. Exchange rate VND - USD (Source: Xe)

● In America, the inflation rate recorded in Jan 2024 is 3.09%, which is lower compared to
that in Dec 2023 (3.35%) and long term average of 3.28%.

Figure 5. Inflation rate in the US (Source: YCharts)

5.3.2.2. Market
● The coffee market concentration level in the US is more inclined to a fragmented level.
This market could be considered as a monopolistic competitive market, featuring
numerous domestic and multinational participants competing for market share.

37
 Figure 6: USA Coffee market concentration level (Source: Mordor Intelligence)

● The own-price elasticity of -1.93 (Capps et al., 2022) suggests that consumers are highly
responsive to price changes when it comes to buying coffee for home consumption,
indicating elasticity in demand.
● According to National Coffee Association of USA, US consumers are increasingly willing
to pay a higher price for specialty coffee but remain price-sensitive for everyday coffee
5.3.3. Price Policies
Trung Nguyen Legend should use the geocentric policy when entering US market due to the
following reasons:
● Market adaptation and Profit maximization: USA have a higher living standard, therefore,
costs and competitor prices are also correlatively higher. Geocentric pricing policy can
help Trung Nguyen Legend to absorb their costs and maximize the brand’s profits.
● Price control: With full control over their pricing, Trung Nguyen Legend can make sure
that there is no risk of franchisers setting the prices too high and pricing is always aligned
with their brand objective. Besides, the brand also can freely modify their prices whenever
needed to test out other pricing strategies.
5.3.4. Price Strategy
Entering US market, Trung Nguyen Legend should use market pricing strategy due to the
following reasons:
● Premium brand positioning: Trung Nguyen Legend has always built their brand with a
premium image. Hence, pricing their products in the medium to high segment and not

38
 decreasing it gradually like the skimming method can ensure their positioning to be
consistent in the customers’ perspective.
● Competitive landscape: The coffee market has a lot of competitors already and Trung
Nguyen Legend should set their prices based on competitive prices.

5.4. Place/Distribution channel

5.4.1. Determinants of channel decisions
5.4.1.1. External determinants
● Customer characteristics
Vietnamese communities in the US and younger demographics (18–45 years old) are the targets.
The primary drivers of this segmentation include population growth, greater disposable income, an
increasingly hectic lifestyle, etc.
● Nature of product
While coffee is generally not a high-turnover commodity, ours is because of the unique experience
and services, high level of loyalty, and "premium" venues.

⮚ It is therefore preferable to have a selective distribution network.

● Nature of location
For the location choices, to serve the younger segmentation that we target, there are several key
factors to note: Convenience, Unique coffee experiences, Offline services, Sustainability.

⮚ Trung Nguyen Legend could select and screen some of the most famous and crowded

streets in big cities in the US such as: New York, Los Angeles, Chicago, Houston.
● Competition
Trung Nguyen Legend would choose the same channels as its competitors.

5.4.1.2. Internal determinants

● Structure of the channel
o Types of intermediary: Wholesaler, Retailer
o Market coverage (Channel width)

Selective
Intensive distribution Exclusive distribution
distribution

Product type Convenience Specialty

39
 Product life cycle
Mature New
stage

Product price Low-price High-price

Brand loyalty Brand-preferred Brand-insisted

Frequently Infrequently
Purchase frequency
purchased purchased

Product uniqueness Common Distinctive

Selling requirement Self-service Personal-selling

Technical complexity Non-technical Technical

Service requirements Limited-service Extensive-service

Table 6. Factors influencing channel width

⮚ Channel width: Selective distribution

⮚ Market coverage: Selective coverage

o Channel length: Short

Producer → (Wholesaler) → Retailer → Customer

▪ Maintain great control over the distribution process

▪ Ensure consistent brand representation

▪ Efficient communication and coordination with selected intermediaries

⮚ Aims to provide a consistent and high-quality coffee experience to customers

● Choosing a mix of distribution channels: Multiple-channel distribution

o Reasons of choosing the distribution

▪ Extended market coverage: Each channel caters to different consumer

preferences and behaviors, allowing the brand to tap into various customer
segments and geographic locations.

40
 ▪ Increased sales volume: Provides more avenues for customers to access

Trung Nguyen Legend's products. Hence, brand can capture customers who
prefer different shopping experiences or channels.

▪ Better accommodation of evolving customer needs: For instance, some

customers may prefer the convenience of online ordering, while others may
enjoy the in-store experience. By offering both options, the brand can adapt
to different customer preferences and enhance customer satisfaction.

5.4.2. Channel decisions

5.4.2.1. Direct channels
● Franchise-Owned Cafes:
o Owned and operated by individual franchisees who would adhere to the brand's
standards and guidelines.
o Location: Attractive spots in the center or at the popular streets in big cities, or
convenient spots close to target customers (Universities, Offices, etc.).
o Maximum control over the brand experience and ensures consistent quality across
locations, which leads to better market penetration and adaptability to local
preferences.
● Franchise-Owned Stores:
o Apart from the cafes, Trung Nguyen Legend can also establish offline stores that
provide coffee products in packages, for instance gift boxes, instant coffee.
o Location: In large shopping malls, supermarkets, or independent stores close to
residential areas
● Online E-commerce Platform:
o Channels: Original website (Main channel), Amazon, Walmart, Etsy, etc.
o Functions: Provides convenience and accessibility for customers, serves as an
additional revenue stream, complementing the physical store presence and
increasing sales potential.

5.4.2.2. Indirect channels

● Franchisee-Retail Partnerships:
o Target partners: Established retail chains (grocery stores or specialty food stores),
that are willing to carry its coffee products.

41
 o Potential partners: Whole Foods Market (Major cities like Los Angeles, NYC),
Trader Joe's, Central Market, Asian grocery stores
o Leverage the existing retail infrastructure and customer base of these stores to
reach a wider audience.

5.5. Promotion
5.5.1. Objectives

Marketing Objectives Communication Objectives

Increase penetration to Short term objectives:

attract new customers - Increase customer awareness about Trung Nguyen Legend’s unique
for Trung Nguyen coffee heritage and offerings within the first year.
Legend - Establish media relations by securing at least 3 major media features
in the U.S. within the first 6 months
Long term objectives:
- Strengthen brand position and message
- Build community involvement by participating in or sponsor 20
community events related to coffee culture by the end of year 5

5.5.2. Key message

Insight: American coffee culture is characterized by a fast-paced lifestyle where coffee is often
consumed on the go. However, there’s a growing trend towards mindfulness and the appreciation
of artisanal experiences. It is an opportunity for Trung Nguyen Legend to introduce its rich
heritage and unique coffee experience to those seeking more than just a caffeine fix.
Key message: “Trung Nguyên Legend: Where every cup is an invitation to creativity, a sip of
happiness, and a moment of solidarity. Our coffee isn’t just energy; it’s a life-changing experience.
Unique, special, and brewed with love - we inspire a world where coffee sparks creativity and
fuels dreams that can change the world.”
Big idea: “Trung Nguyên Legend - Awaken Your Senses, Enrich Your Soul” The big idea
revolves around creating a multi-sensory coffee experience that not only stimulates the taste buds
but also nourishes the mind and spirit.

5.5.2. Final direction for promotion:

42
 5.5.2.1. The strategic approach

We defined Trung Nguyen Legend ’s strategic approach as to get (1) American and
Vietnamese - US community to (2) experience Trung Nguyen Legend Coffee by (3)
communicating Trung Nguyen Legend as an exquisite experience with an USP: Vietnamese
high-quality coffee in taste and scent enriched with cultural values. .

5.5.2.2. The tone and mood

The tone and mood for Trung Nguyen Legend Coffee can be described as sophisticated,
aspirational and welcoming:
● Sophisticated: The brand emphasizes the high quality and unique blends of their
coffee, using terms like "legend" and focusing on the rich history and heritage of
Vietnamese coffee. This establishes a sense of exclusivity and refinement.
● Aspirational: Trung Nguyen Legend Coffee aims to position itself as a premium brand
associated with success and achievement. The brand identity aims to inspire,
suggesting that enjoying their coffee elevates you to a higher level of experience.
● Welcoming: Frame Trung Nguyen Legend coffee as an invitation to explore
Vietnamese coffee culture and discover new flavor profiles. Convey their dedication to
using high-quality ingredients and creating a welcoming coffee experience.

These elements combine to create a distinctive and immersive brand experience for the target
audience. It goes beyond simply offering coffee and positions it as a lifestyle choice associated
with sophistication, cultural appreciation, and aspiration.

5.5.2.3. The IMC Plan & Tools

Phase 1: Trigger (Awareness & Interest)
● Objectives: Generate brand awareness, pique interest in Trung Nguyen Legend coffee, and
introduce the concept of the coffee shop experience.
● Activities:
○ Social Media Marketing: Launch engaging social media campaigns on Facebook,
Instagram, and TikTok.

43
 ■ Facebook: Share high-quality photos and videos showcasing the coffee
shop's ambiance, Vietnamese coffee brewing methods (“phin” filters), and
delicious pastries.
■ Instagram: Run eye-catching contests and giveaways, encouraging
user-generated content with branded hashtags like #TrungNguyenUS
#TasteofVietnam. Partner with local US-based Vietnamese influencers for
product reviews and shop visits.
■ TikTok: Utilize trendy music and short-form video formats to showcase the
coffee brewing process and unique menu items at the coffee shop in a fun
and interactive way.
○ Search Engine Optimization (SEO): Optimize the Trung Nguyen Legend US
website for relevant keywords like "Vietnamese coffee near me", "unique coffee
shops", and "specialty coffee."
○ Outdoor Advertising: Utilize eye-catching bus wraps or digital billboards in
high-traffic areas near targeted demographics. Feature captivating visuals and a
short, memorable tagline like "Experience Authentic Vietnamese Coffee Shop."

Phase 2: Experience (Trial & Consideration)

● Objectives: Encourage customers to visit the coffee shop, experience the unique
Vietnamese coffee offerings, and establish Trung Nguyen Legend as a preferred coffee
destination.
● Activities:
○ Grand Opening Events: Host grand opening events at each new Trung Nguyen
Legend location. Offer free samples, special discounts, and live music to generate
excitement and encourage trial.
○ Loyalty Program: Implement a loyalty program that rewards frequent customers
with points redeemable for free drinks, merchandise, or discounts.
○ In-Store Promotions: Run limited-time promotions on select beverages like "Buy
one, get one free" or offer special combo deals with pastries when experiencing the
space at the coffee shop and share feedback.

Phase 3: Amplify (Retention & Advocacy)

● Objectives: Convert satisfied customers into brand advocates who recommend Trung
Nguyen Legend to their network and promote repeat visits.

44
 ● Activities:
○ Customer Relationship Management (CRM): Collect customer data through loyalty
programs and online forms to gather feedback to improve the coffee shop
experience and personalize future marketing communications. Send targeted email
campaigns with special offers and birthday promotions.
○ Social Media Engagement: Respond to customer comments and messages on social
media platforms, fostering a sense of community and encouraging positive online
reviews about the experience in Trung Nguyen coffee shop.
○ Referral Programs: Incentivize existing customers who refer friends and family to
come to the coffee shop for trial by offering them rewards like free drinks or
discounts after a successful referral.

6. Conclusion

An effective strategy for international growth is crucial for a company's future and
expansion. Companies strive to enter new markets by leveraging their resources to create
additional long-term revenue streams. This presents opportunities in both developed countries,
where demand is high, and emerging markets, where demand is growing. A successful market
penetration strategy optimizes the use of corporate resources, facilitating business growth.

In our report, we propose a marketing mix strategic plan for Trung Nguyen Legend to enter
the US market. After thorough research, we recommend franchising as the most suitable entry
mode for the firm. This proposal is based on our insights and knowledge and is intended as a
guide. We extend our appreciation to Mrs. Phạm Thị Minh Châu for her invaluable assistance in
completing our research. However, due to time constraints, limited understanding, and restricted
access to existing data, our study may have limitations. We welcome and are grateful for
constructive feedback and recommendations to enhance our report.

45
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2024).

Thế Giới CÀ Phê Trung Nguyên legend: Shanghai (no date) Facebook. Available at:
https://www.facebook.com/thegioicapheTNL.shanghai/ (Accessed: 06 March 2024).

Worldwide governance indicators (no date) DataBank. Available at:

https://databank.worldbank.org/source/worldwide-governance-indicators/Series/PV.EST
(Accessed: 06 March 2024).

Fine-grained Screening (Market Attractiveness)

Coffee - Canada (no date) Statista. Available at:

https://www.statista.com/outlook/cmo/hot-drinks/coffee/custom?currency=USD&locale=en&toke
n=A6-1-k9QK3e-sAs8tck0IszHNyA-FYjZ07ARGa0YmpL11oV__p-j51DPZ7KEmlmQhwDYeU
gQv4-DI-jhbZQYHir5VnOW1beEN1eT1ra9JobOS8SED-1F7g%3D%3D#revenue (Accessed: 07
March 2024).

Minimum wage by country in 2024: A guide for global employers (2024) Velocity Global.
Available at: https://velocityglobal.com/resources/blog/minimum-wage-by-country (Accessed: 07
March 2024).

Rent Index by Country 2024 (no date) Rent index by country 2024. Available at:
https://www.numbeo.com/cost-of-living/rankings_by_country.jsp?title=2024&displayColumn=1
(Accessed: 07 March 2024).

Statista. (n.d.). Coffee shop market size worldwide 2022. Available at:
https://www.statista.com/statistics/1361275/coffee-shop-market-size-worldwide/.

Statista. (n.d.). Worldwide coffee production. Available at:

https://www.statista.com/statistics/263311/worldwide-production-of-coffee/.

Team, C. (n.d.). South Korea Beverage Regulation. [online] ChemLinked. Available at:
https://food.chemlinked.com/foodpedia/south-korea-beverage-regulation/ (Accessed 21 Mar.
2024).

Costello, C. (2023). How is South Korean specialty coffee culture evolving? Perfect Daily Grind.
Available at: https://perfectdailygrind.com/?p=105559/

47
Vladová, A. (2005). CURRENT TOPIC INTERNATIONAL COMPARISON OF THE
PROPENSITY. Available at: https://nbs.sk/_img/documents/biatec/bia07_05/12_15.pdf (Accessed
20 Mar. 2024).

Fine-grained Screening (Competitive Strength)

Canada Coffee Market Research Report 2023 (no date) Pristine Intelligence. Available at:
https://pristineintelligence.com/reports/canada-coffee-market#:~:text=Coffee%20is%20a,a%2021
%25%20share. (Accessed: 07 March 2024).

Cà Phê Hòa Tan Legend Classic (2023) Cafe Trung Nguyên, Cà Phê Trung Nguyên, Cà Phê.
Available at:
https://trungnguyencoffeevn.com/product/ca-phe-hoa-tan-legend-classic-trung-nguyen/ (Accessed:
07 March 2024).

Number of Starbucks locations in the USA in 2024 (2024) ScrapeHero. Available at:
https://www.scrapehero.com/location-reports/Starbucks-USA/#:~:text=How%20many%20Starbuc
ks%20stores%20are,Starbucks%20stores%20in%20the%20US. (Accessed: 07 March 2024).

Ridder, M. (2023) Market share: Leading ready-to-drink (rtd) coffee brands U.S. 2022, Statista.
Available at:
https://www.statista.com/statistics/753258/market-share-rtd-coffee-brands/#:~:text=In%20the%20
52%20weeks%20ended%20May%2015%2C%202022%2C%20Starbucks%20was%20the%20lea
ding%20ready%2Dto%2Ddrink%20(RTD)%20coffee%20brand%20in%20the%20United%20Stat
es%2C%20with%20a%20market%20share%20of%20roughly%2041%20percent (Accessed: 07
March 2024).

Unrau, H. (2024) Tim Hortons vs Starbucks: Who offers the best brew for your buck?, Hardbacon.
Available at: https://hardbacon.ca/en/budget/tim-hortons-vs-starbucks/ (Accessed: 07 March
2024).

World Coffee Portal (2023) Vietnam’s Trung Nguyen Legend opens first store in the US, World
Coffee Portal. Available at:
https://www.worldcoffeeportal.com/Latest/News/2023/September/Vietnam-s-Trung-Nguyen-Lege
nd-opens-first-store-in#:~:text=Founded%20in%201996%2C%20Trung%20Nguyen,international
%20debut%20in%20September%202022. (Accessed: 07 March 2024).

48
Yoon-seung, K. (2024) S. Korea holds fourth-largest number of Starbucks stores in 2023, Yonhap
News Agency. Available at:
https://en.yna.co.kr/view/AEN20240212001000320#:~:text=South%20Korea%20held%201%2C8
93%20Starbucks,by%20the%20U.S.%20coffee%20giant. (Accessed: 07 March 2024).

Market entry

J.P. Morgan Chase (2022) 2024 economic outlook: Insights & trends: J.P. Morgan, 2024
Economic Outlook: Insights & Trends | J.P. Morgan. Available at:
https://www.jpmorgan.com/insights/outlook/economic-outlook/economic-trends (Accessed: 19
February 2024).

Lịch Sử Phát Triển (no date) Trung Nguyên Legend. Available at:
https://trungnguyenlegend.com/lich-su-phat-trien/ (Accessed: 17 February 2024).

Orfi, N., Terpenny, J. and Sahin-Sariisik, A., (2011) Harnessing product complexity: step
1—establishing product complexity dimensions and indicators. The Engineering Economist.
Available at:
https://www.researchgate.net/publication/254333950_Harnessing_Product_Complexity_Step_1-E
stablishing_Product_Complexity_Dimensions_and_Indicators (Accessed: 17 February 2024).

Sức Hút Thế Giới Cà Phê Trung Nguyên legend đầu Tiên Tại Thượng Hải, trung quốc, Trung
Nguyên Legend. (2022) Available at:
https://trungnguyenlegend.com/suc-hut-the-gioi-ca-phe-trung-nguyen-legend-dau-tien-tai-thuong-
hai-trung-quoc/ (Accessed: 18 February 2024).

Tầm Nhìn - Sứ Mạng - Giá Trị Cốt Lõi (no date) Trung Nguyên Legend. Available at:
https://trungnguyenlegend.com/tam-nhin-su-mang-gia-tri-cot-loi/ (Accessed: 19 February 2024).

TNL (2022) Trung Nguyên Legend - Thương Hiệu Tỉnh Thức, thanhnien.vn. Available at:
https://thanhnien.vn/trung-nguyen-legend-thuong-hieu-tinh-thuc-1851484666.htm#:~:text=T%E1
%BA%ADp%20%C4%91o%C3%A0n%20v%E1%BA%ADn%20h%C3%A0nh%20chu%E1%BB
%97i,h%C3%ACnh%20nh%C6%B0%E1%BB%A3ng%20quy%E1%BB%81n%200%20%C4%91
%E1%BB%93ng) (Accessed: 17 February 2024).

Trọng Nghĩa (2024) Bước đầu trong kế hoạch kiếm 1.000 tỷ USD của ông Đặng Lê Nguyên Vũ:
Mở 1.000 Cửa Hàng Trung Nguyên legend Tại Trung Quốc và phát triển Thành Chuỗi Trên Toàn
Thế Giới?, Kênh thông tin kinh tế - tài chính Việt Nam. Available at:

49
https://cafef.vn/buoc-dau-trong-ke-hoach-kiem-1000-ty-usd-cua-ong-dang-le-nguyen-vu-mo-1000-
cua-hang-trung-nguyen-legend-tai-trung-quoc-va-phat-trien-thanh-chuoi-tren-toan-the-gioi-1882
4021108403793.chn#:~:text=Theo%20con%20s%E1%BB%91%20doanh%20nghi%E1%BB%87p
,l%C3%A0%20con%20s%E1%BB%91%20kh%C3%B4ng%20t%C6%B0%E1%BB%9Fng
(Accessed: 18 February 2024).

TRUNG NGUYEN LEGEND ENERGY COFFEE (no date) Trung Nguyên Legend. Available at:
https://trungnguyenlegend.com/trung-nguyen-legend/?lang=en (Accessed: 18 February 2024).

STP & 4Ps mix

Blue Bottle Coffee - central tower photos (2023) Yelp. Available at:
https://www.yelp.com/biz_photos/blue-bottle-coffee-central-tower-san-francisco?select=RnVkxk7
Y6eHqKim2FXZiSQ (Accessed: 26 February 2024).

Cagnassola, M.E. (2023) Here’s where coffee costs the most (and least) in the U.S., Money.
Available at:
https://money.com/coffee-costs-most-least-expensive-cappuccino/?__cf_chl_tk=ErRRzCQg7wdfF
0Y.hB8SlbwSiMJTL.FaI83BKECnT0E-1709187106-0.0-1575 (Accessed: 25 February 2024).

Capps, O., Cheng, M., Kee, J. and Priestley, S.L., (2023) A cross‐sectional analysis of the demand
for coffee in the United States. Available at:
https://onlinelibrary.wiley.com/doi/abs/10.1002/agr.21779 (Accessed: 25 February 2024).

Capps, Oral, et al. “A Cross‐Sectional Analysis of the Demand for Coffee in the United States.”
Agribusiness, 18 Nov. 2022, https://doi.org/10.1002/agr.21779.

Marketing (no date). https://media3.bournemouth.ac.uk/marketing/10branding/05position.html.

Terpenny, J., & Sahin-Sariisik, A. Harnessing Product Complexity: Step 1-Establishing Product
Complexity Dimensions and Indicators.

Trung Nguyên Legend - Trung Nguyên Legend. (2023, April 14). Trung Nguyên Legend. Retrieved
February 20, 2024, from https://trungnguyenlegend.com/trung-nguyen-legend/?lang=en

Pierce, S. (2024) The truth about your daily latte: The cost of coffee shops vs. Luxe Coffee Bar
Setups, HerMoney. Available at:
https://hermoney.com/enjoy/the-truth-about-your-daily-latte-the-cost-of-coffee-shops-vs-luxe-coffe
e-bar-setups/ (Accessed: 26 February 2024).

50
TaxJar (2024) Is food taxable in California?, TaxJar. Available at:
https://www.taxjar.com/blog/food/california-food-tax-is-food-taxable-in-california#:~:text=In%20
most%20cases%2C%20grocery%20items%20are%20exempt%20from%20sales%20tax.%20An%
20exception%2C%20however%2C%20is%20%E2%80%9Chot%20prepared%20food%20product
s%2C%E2%80%9D%20which%20are%20taxable%20at%20California%E2%80%99s%207.25%
25%20state%20sales%20tax%20rate%20plus%20the%20local%20district%20tax%20rate%20(s
ee%20rates%20here)%2C%20whether%20they%E2%80%99re%20sold%20to%2Dgo%20or%20
for%20consumption%20on%20the%20store%20premises. (Accessed: 25 February 2024).

Unknown (no date) Position map.

https://zeinaelzeindees12.blogspot.com/2012/04/position-map.html.

Promotion

“How have specialty coffee consumers changed in recent years?” Perfect Daily Grind, 15 August
2023, https://perfectdailygrind.com/2023/08/specialty-coffee-consumer-trends/ . Accessed 21
March 2024

Lindner, J. (2023). Must-Know Media Consumption Statistics [Current Data] • Gitnux. [online]
gitnux.org. Available at:
https://gitnux.org/media-consumption-statistics/#:~:text=Average%20media%20consumption%20
worldwide%20is .

Market Research Future (2023). ‘Percolating Trends: Exploring the Global Coffee Market
Dynamics’. [online] www.linkedin.com. Available at:
https://www.linkedin.com/pulse/percolating-trends-exploring-global-coffee-market-3eg4f/
[Accessed 21 Mar. 2024].

Statista (2022). Time spent with digital vs. traditional media in the U.S. 2019 | Statista. [online]
Statista. Available at:
https://www.statista.com/statistics/565628/time-spent-digital-traditional-media-usa/ .

World Population Review (2021). Coffee Consumption by Country 2020. [online] World
Population Review. Available at:
https://worldpopulationreview.com/country-rankings/coffee-consumption-by-country/ .

51