HAWTHORN CAMPUS HBI223N: TRANSNATIONAL MARKETING

To Ms. Chamila Perera

OZEE PREMIUM COFFEE

2011
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Executive Summary

Introduction
Premium Ozee is an Australian company based in Melbourne, Victoria. The company import high quality of fair trade raw coffee beans from Africa, Brazil. Then, they will be processed through a sophisticated roasting procedure which bring to Ozees products the best quality, taste and smell and scent. Finally, those coffee beans will be packaged to different bags, based on their origin, quality and prices. Moreover, most of processes of roasting procedure are handcraft. The company believe the handmade roasting coffee bean will guarantee 99% of quality and enhance value of premium coffee bean. In addition, Ozee commits the whole manufacturing process is totally friendly to the environment which produces lower Carbon dioxide commission than any factories in the world. As the result, the difference between Ozees product and others is the core value. they are definitely encompass the high quality and unique taste that customers can not enjoy anywhere else. Moreover, substitute ingredients which convey different flavours and scents to the products, are completely fresh and natural. At the Ozee, the management board understands that prestigious customers demand is diverse. Hence, customers are able to personalise their orders by selecting their own favourite kinds of coffee beans, adjust flavours, packages and containers design. All orders are placed online and sent by express postage in the 2 days since the payment is received.

Situation Analysis :
Macro Environment:
Demographics:

The figure clearly illustrated that the population of Vietnam is approximately 83 million which highly distinguished from 20-40. The Ozee coffee is also highly targeted by this range of age. According to Niesel (2008), Vietnamese people in 20s and 30s account for 48.5% luxury goods consumers in Hanoi and Hochiminh city. In addition, the proportion of 20s has been shifting up by 5.3% in only one year (Niesel, 2008). Moreover, according Vietnam Business News, this trend in Vietnam is a part of common scenario widely seen in Asia, which accounts for 50% of annual 80$bln dollars market for luxury brands in the world. Hence, there is a huge potential customers for premium coffee industry in Vietnam. Ozee coffee can get more market shares as early as they enter in the future.

Economics:

In 2010, GDP nominal of Vietnam reached to $104.6 billion, with GDP per capita of $1218 (Pricewaterhouse Coopers, 2008). Hence, Vietnam economy is going to reach the 17th largest economy in the world with expected nominal GDP of $ 436 billion and 4,357$ of GDP per capita in the next 15 years (World Bank, 2010). Moreover,
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Vietnam will probabyly turn to be the emerging economies by 2025, with a potential growth rate of 10% per year which is up to around 70% of the size of the UK economy by 2050 (Pricewaterhouse Coopers, 2008). Moreover, Vietnam has joined WTO since 2006 that help to lift up the whole national economy and creat more economies of scale for the national enterprises to develop on its own way. As the result, tariffs and customs complicated procedures are lifting up to harmonise with the international standards.Furthermore, Vietnamese quaility of life has been increased , so more and more people get interest of luxury products in which they believe these products could improve their life quaility. In addition, coffee is one of the products what are able to bring people a big enjoyable.

Cultural Force

Coffee culture has inspired Vietnam for a long time started from the French colonical period. At the beginning, coffee were only for the French and rich Vietnamese. Then, Vietnamese coffe e culture developed more by numerous of western style coffee shops such as Brodards, Ciao cafetc were opened in Dong Khoi street, a central business street of Saigon. From that time, coffee culture have been widely diversifi ed into all different class of V iernamese and even got more closer to low income class of Vietnamese society from workers to farmers. At the present, coffee is symbolised as a national drink and everybody can be served by a cup of coffee.

Technology: (Internet development)

According to the U.S monitoring service, Vietnam is in top 20 internet fast growing countries in the world, right after Canada (Viet, 2010). In fact, there are 24.3 million Internet users, accounts 1/5 of total

population (Niesel, 2008). In terms of ecommerce, Viet Nam is one of Asia sleeping giants. It also reveals there are 30,000 local and international businesses enterprises have been eyeing ventures with domestic partners to tap this market. In fact, couples of well-known U.S.-based online auction site, eBay has already entered to Vietnam market by cooperating with a 6

local IT solution company. Yahoo and Google also offer localised services, including online shopping exclusive to Vietnamese. Furthermore, Alibaba, the worlds biggest online business to business (B2B) , proposes an expansion plan to this competitive market. From that fact, Ozee Coffee believe that Vietnam E-commerce environment is now matured in conducting online sales and promotion activities.

Micro Environment:
Suppliers: (see more in Appendix)
Ozee Coffee is different from another company which provides online coffee service is the location that coffee beans come from. All of them are imported from the third world country such as Africa. A significant feature of third world country is they own abundant and natural resources. So this point definitely brought the high quality and unique taste that customer can not enjoy anywhere else. As the results, the Ozee Coffee will become famous and highly standardised services. However, substitute ingredients are like sugar, fruit juices and milk which are available in the Australia market and passed the quality test of the health care department, the company will choose instead of importing all the ingredients to reduce cost.

Competitors:
With a major of Vietnam population, Ozee Coffee stills a new brand name of coffee market. Our company has to compete with other brands which were established for long time such as:

Source: Trung Nguyen coffee website Trung Nguyen was established from 1996 and one of the most famous coffee brand in Vietnam, contain 25% of market share (Nielsel, 2008)

Source: Highland coffee website Highland coffee belongs to an American Vietnamese and has been established from 1998. They opened a lot of branches through Vietnam by using mass marketing strategy.

Source: The Coffee Bean & Tea Leaf website

The Coffee Bean has been established in 1963, all coffee beans are produced from high altitude in Costa Rica, Colombia, Ethiopia and Papua New Guinea.

Gloria Jean's has entered Vietnam market since 2007. Besides offering in store coffee, GJ also introduces to Vietnamese customers premium processed coffee bags which are directly imported from Australia.

SWOT Analysis:
SWOT
STRENGTHS
International experience of import and export coffee beans. International reputation of Australian brands. Wide ranges of products. Premium raw materials and ingredients with strict quality control. Qualified training labour forces.

WEAKNESSES
Niche customers target. Unpopular brand name in Viet Nam.
Lack of physical distribution channel in

Vietnam
High price

OPPORTUNITIES
Ozee coffee is the first international company enters the luxurious market of coffee in Vietnam. Intensive local coffee culture. The economy of Viet Nam is increasing rapidly, leads to the demand of customers to enjoy the high quality from foreign brand of high income customers. Vietnam population is young and they are affected by the Western lifestyle, people will easily go and enjoy luxurious products. Viet Nam joined WTO, so trade barriers and tariffs are removing. Increasing number of internet trading. More online payment methods are introduced in Vietnam, such as Payment, Bpay.

THREATS
Local brands are considering to enter the market. The inflation and GFC shrink the income of customers and they tend to save more money and cut off purchasing luxury goods. Fluctuated prices of ingredients. Probability of supply shortage. Weak regulation of local online trading.

The weaknesses of our company are that niche customers targeted. Our company only aims for customers who are high-income and able to spent on premium coffee beans. Because of the products is all premium coffee; the price for the products became high. On the other hand, our company is a brand new online-based company and hence we are an unpopular brand in Vietnam, so the aim of promotional campaign is to enhance the brand awareness in 65% internet users in Vietnam. Moreover, it will be a circumstance for us during the start-up time. The next weakness of our company is that there is lack of physical distribution channel in Viet Nam. There are also some threats for our company to start an online business. When entering the Vietnam market, the local brands needed to be considered. The local brands in Vietnam are normally old and influence Vietnamese a lot. This may cause people cant easily accept the new brand. The Global Financial Crisis in 2008-2009 causes the inflation and shrinks the income of customers. This makes them rather save money instead of purchasing the luxury products. Besides this, the prices of the raw materials and ingredients can be very fluctuated. This may cause that our company need always adjust the price of the products in order to earn profits. Premium coffee is hardly to be found and may limited supply from suppliers. This makes the probability of supply shortage may happen. Lastly, the weak regulation of local online trading may be a threat to our company. Finally, hackers may be a nominal risk to the company, but the risk is certainly in the minimum scale due to the progress of online security initiatives.

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MARKETING OBJECTIVES:
To promote the apps benefits to K-6 schools staffs and parents awareness in the next 2 years. To gain the app identity to 30% of Australian children in K-6 by 2017. To obtain 1.5 % in K6 teaching resource market share by at the end of 2014. To keep the growth rate above 10% from 2012 to 2016.

Market segmentation, targeting and positioning

MARKET SEGMENTATION:
o Age: The company is going to target in 2 distinct age segments: Parents and K-6 school staffs: they are not the apps users of this application. this is the most focusing customers Demographic K-6 pupils (4-12 years old): K-6 pupils are the main users of this application, but they dont have consuming power to make buying decision to the apps. However, this customer segment is able to influent on purchasing decision. Geographic Psychographic

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Age: The company will love by the people who really know coffee and love coffee. This is more interested among the business people. It targets on the business people with the average age from 25 to 45 years old. Income: The price of the coffee that set by Ozee Coffee is high. It is suitable for the people who have high-income and it will be at least

Demographic

$AUD50, 000 per annum and above. Ozee Coffee sells high quality coffee which import from third world country and process in Australia. Hence, only the high-income people who really like coffee afford to buy the products. The middle to low-income people may rather choose cheaper coffee and ready-made coffee from local coffee shops or fast food restaurants instead of the coffee beans. Ozee Coffee is an online-based company in Australia. It plans to enter Ho Chi Minh city and Hanoi city in Vietnam. Geographic distance may

Geographic

be a weakness of the company which issues of the time delay in logistics, lack of distribution channel. However, those problems can be solved by applying advantages of online sales and tracking technology. Social class: high income class whose annual income is a above 80 000 AU$ Lifestyle: Ozee Coffee produces premium coffee beans which suitable to

Psychographic

the consumers who are members of the new generation want to enjoy life and pamper themselves with luxurious things. Vietnamese high consumers need reliable products that enhance their daily lives and make them distinct from others.

TARGET MARKETING:

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The company decides to use Niche- marketing as the primary strategy. Focusing on a small particular group of customers will save cost and time in buyers behaviours research. Moreover, niche marketing also enhance the effect of advertising campaign due to common buyers characteristics and backgrounds. Regards to brand awareness of Ozee Coffee is luxury and premium quality, the image of Ozee Coffees brand towards wealth, so the snob effect will brings customer purchase decision making because of its scarcity, and the bandwagon effect encourages consumers buy goods in order to be distinct with a particular social group.

POSITIONING:
Positioning is not necessary for Ozee Coffee, because in the luxury products segmentation, the matter is being one-of-kind. As the result, if the products of Ozee coffee compare with other competitors in a very different market sector, especially in terms of price features, or benefits, then no longer company brand awareness is conceived a luxury. Moreover, luxury goods are superlative, but not comparable. Therefore, the crucial point of success is identity, not the brands position of relation to a competitor. In another meaning, Ozee Coffees customers select Ozees products due to the distinction from others they are entitled to. As a result to build a strong brand awareness of 65% of Vietnamese Internet users is the most crucial point of the companys promotion campaign.

Marketing mix strategies:

PRODUCT
Quality
Ozee coffee are fair trade products, which are imported from Brazil and Africa farmers and complex processed at factory in Australia. It is high quality processed coffee. Beyond that, products are packaged in luxury and designable containers which are made from premium woods or metal, depends on customisation of customers. Therefore, the products quality will bring to Ozees customers distinct identity and satisfaction.

Core value:
Luxury products, distinctive value and high quality.

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Brand
According to Vietname Business News (2010), The Luxury Institute has found that 91% of affluent consumers surveyed wanted to see their favourite luxury brand online, and 94% did not perceive online trading to cheapen a luxury brand in any way. Customers want to engage with brand online because it provides value to them, often in a convenient way. Understanding such cognitive processes of our luxury consumers, and aligning them with digital usage trends will strengthen strategic planning and increase the likelihood of digital success.

PRICE:
Due to instinctive premium brand awareness, the price of Ozee Coffee is ranging from $150 to $250 per 100 gram, depends on types and flavours. In fact, the price range is higher five times than any competitor in the Vietnam coffee market. Moreover, research and development costs are likely to be high, as are the costs of introducing the product to the market via promotion, advertising etc. In such cases, the practice of price-skimming allows for some return on the set-up costs Company also sells handmade coffee mugs and accessories which could be recycled in reasonable price. There is some discount for loyal customers and customers who buy high value items in total. Company provides designable gift package (such as color wrap papers, items included, ect), so that there will be some charge when customers choose their own design package. Through the websites, Ozees customers could pay by PayPal, visa, or credit payment methods. It should be flexible so that customers might find it easy to deal with company. A luxury brand needs to reconcile the potential trade off between exclusivity, which makes a brand out of ordinary, and accessibility, which provide sufficient sales and profits, while at the same time project a positive brand association of user profiles Moreover, it can be difficult for a luxury brand company to manage its optimal advertising and pricing strategies because there are different market segments and their respective consumptions interact with each other.

PLACE:
Ozee Coffee is online business. It means that the company relies on cyber space to sell products and web-based activities are very important in Ozee business the retail website. The

distinctive point of Ozee Coffee websites is customers can customise their orders. The webpage is
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designed extremely friendly user interface that not require customers intensive knowledge of Internet. Moreover, customers are able to customise their orders from beans to containers, which are always available in diversified premium and hi-end materials.

PROMOTION:
We are going to follow seven different ways exclusively on the Internet to promote our site. As a start-up company, the marketing is going to be mainly online with SEO (Search Engine
Optimization) SMO (Social Media Optimization) as well as SEM (Search Engine Marketing)

techniques. The latter will be analyzed and kept within a monthly budget.

1) Search Engines:
We are going to design web pages that will be well indexed by the search engines by using descriptive titles and accurate META tags and by going through on page techniques such as density of key phrase, a logic and linked site structure, etc.

2) Linking Strategies:
In order to get indexed more efficiently and to gain page rank we are going to focus on link building off page. The more pages pointing to our site the more traffic we will experience. We can get a listing in Google DMOZ directory which is for free and in Yahoo! Directory whose fee could be around $300 per year. We can try to buy links in Pay per Post Networks or, even better, request one way links by publishing Spanish exercises with reference links to our site in www.zonaele.com; www.todoele.net and www.marcoele.com. Another way to get inbound links will be by article and directory submission in sites such as Ezinearticles.com. We will consider the participation in Yahoo! Answers and Linkedin Answer with an expertise profile and links to our site. And, finally, we will register in comparison shopping sites as Shopzilla that can increase our sales as well as boost our pagerank.

3) Paid Advertising:
SEM techniques: creation of campaigns in Google Adwords with specific and low cost terms and with a monthly limited budget. Tracking analytics on a daily basis and adjusting the ads, keywords strategy or text strategy according to results. Banner ads: buy space in different targeted and related web sites in order to display animated banners made in-house. However this strategy can be expensive so we will reconsider whether it is worth or not depending on our customer acquisition cost. Affiliate marketing: selling our courses via ClickBank. This can be an effective way to advertise since we have to pay only when the sale is made. However, the commission rate offered to affiliates on the Spanish learning sites is quite high, about 75% of the total price. Depending on

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the success rate of people getting affiliated, an in-house hosted affiliate system will be contemplated.

4) Viral Strategies:
Writing interesting articles of Spanish culture and learning methods with links to our site and offer them to others to use on their web sites. Video marketing: create video teasers with reference links to our site and upload them to Youtube and other video distribution sites. Audio marketing: open an account in iTunes directory and post regularly teaser podcasts of the commercial courses that we will be offering.

5) Social Media Optimization

Brand awareness through contribution in Spanish learning forums and blogs and participation in social bookmarking and social news services as Del.icio.us, Stumble Upon, Reddit. We can also create a profile of the company in Facebook, MSN Space, Twiter, Linkedin, etc. Write social news for publishing in Digg or Yahoo! Buzz. And, finally, host pictures of our site in Flicker.

6) Public Relation: we are going to try to get news releases picked up by several Internet
publications through PRweb.com.

7) E-mail Marketing:
We are going to build an opt-in list categorized according to our customer profile and send newsletters to our registered clients via AWeber8. There is going to be a personalization of emails to send to people that have just registered or customers that have already purchased one of our courses. The profile of our visitors will be considered also by their interests and, once they sign up to our site they can chose which area of the culture or learning they want to study in depth.

Control Program:
Short term
The marketing plan will be processed from November of 2011 to May 2012. The control program is one of the most important parts which will stick all departments of the company to process tasks together and ensure the success of companys objectives:

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Long term
Action Get ready for change Target Analyse the current company and market industrys situation Conduct buyers behaviour survey to local customers for setting prize, promotional campaign. Establish technical department from IT department to deal with handling the establishment and maintenance online store webpage with local IT company. Establish the congress among supply chain members to discuss about the change Agree about which thing needs to be changed Share the budget among members due to the high cost of carrying the change Top managers of all members in the supply chain. Third month Responsibility Top managers, logistic managers and market research staffs of all members in the supply chain. Duration First 2 month

Search for necessary information Start bring the strategies in practice

Search for Online trading software Search for EDI integration provider Review the paper-based data which will be exchanged Search for Network provider Setup the EDI networks or Extranet Test the performance of transaction software with the network connection

IT personnel

Fourth month

IT personnel and technical department

Fifth and sixth months

Training

Establish a training course for employees and managers to get familiar with the EDI or Extranet network

All member of logistics department and some related departmental managers and logistics managers from supply chain members. Top managers and

Seventh month

Implementation the

Using Extranet or EDI network to

Eighth, ninth
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strategy in logistics

support the logistic activities Primary test the performance of Extranet or EDI network to the Unicharms business

logistics managers and staff of all supply chain members

and tenth months

Test the operation of strategies

Evaluate the performance of EDI or Logistics manager and extranet and other supporting information technical department systems based on the improvement of CPFR and flow of information compare with cost saving. Update information for Extranet or EDI network. Fix some mistakes of Extranet or EDI network if its performance does not meet the expected requirement Logistics manager technical department

End of every year

Maintain Extranet or EDI network

End of every year

References
Trong, K. 2009, "Online Shopping Flourishing in Vietnam", Lifestyle, Vietnews, view on 14th October 2011, <http://www.vietnewsonline.vn/News/Lifestyle/5898/Online-shoppingflourishing-in-Vietnam.htm>

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The Nielsen Company, 2008. Vietnam Grocery Report 2008, Annual Report, view on 14 October 2011, https://vn1.nielsen.com/site/NielsenVietnamGroceryReportOctober2008.pdf Stocking, B. 2007, "Vietnam develops taste of luxury goods", World News, The Washington Post, view on 14th October 2011, <http://www.washingtonpost.com/wpdyn/content/article/2007/09/23/AR2007092300319.html> Pricewaterhouse Coopers, 2008, "China to overtake US by 2025, but Vietnam may be fastest growing of emerging economies", Annualreport, view on 14th October 2011, http://www.pwc.com/gx/en/press-room/2008/china-asia-economic-markets-growth-emergingmarkets.jhtml Viet, N. 2010, "Vietnam Ranks High for Internet Users", News Report, view on 13rth October 2011, http://newamericamedia.org/2010/08/vietnam-ranks-high-for-internet-users.php Vietnam Culture, 2010, "Gift and Gift-giving Customs in Vietnam", Gift Ideas, view on 14th October 2011, http://www.vietnam-culture.com/articles-143-17/Gift-and-Gift-givingCustoms-in-Vietnam.aspx Vietnam Business News, 2010, "Vietnam spends $5.7bln importing luxury goods", Import-Export, viewd on 14th October 2011, <http://vietnambusiness.asia/vietnam-spends-5-7blnimporting-luxury-goods-in-2010-moit/> World Bank, 2010, "Doing Business in Vietnam", Vietnam annual report, view on 14th October 2010, http://www.doingbusiness.org/data/exploreeconomies/vietnam
th

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Appendix
Product Description: #1 Kopi Luwak
The most expensive and first-class coffee bean in the world, origins from Indonesia. Kopi Luwak is coffee made from beans that have been eaten, partially digested then excreted by the Common Palm Civet, also known as the toddy cat. This is a type of animal similar to a weasel which looks like a cross between a raccoon and a cat, also known as toddy cats. The raw red coffee beans are ingested and the outer part partially digested and eliminated. The digestive process erases all traces of bitterness. The local population looks for the scat and picks the beans from it, then cleans and sells them. Harvested beans go for up to $200 a pound and the coffee can be up to $50 a cup!

#2 Island of St. Helena

A bit less expensive is coffee from the Island of St. Helena Coffee Company at $79 pound. This coffee grows on the island where Napoleon Bonaparte was exiled, 1200 miles off the African coast. The bean itself was originally brought to the island from Yemen in 1732. Production is limited; only six estates are producing it but demand is considerable. Some years the crop is not that good because of soil and weather conditions that further contributes to its big price tag. On average, only 4,500 pounds of these beans are produced per year. The coffee has a bright citrus and berry flavor, spicy and slightly peppery with notes of cola nut and chocolate in the darker roasts.

#3 Brazilian Fazenda Santa

From Gerais, Brazil comes Fazenda Santa Ines at about $50 per pound. It is a sweet coffee with bright color and flavors of lemon and clove. It is creamy on the palate with a chocolaty body and a sweet finish. This coffee got the highest score in the history of the Cup of Excellence, receiving 95.85 points out of 100. 20

#4 Jamaican Blue Mountain Coffee

Blue Mountain coffee from Jamaica is around $49 per pound and most coffee lovers agree it's well worth the price, esp. if it is the top grade. But be warned: do not buy a blend, which is only required to contain a very small amount of authentic Blue Mountain coffee or beans. This coffee is unusually sweet with a wonderfully intense aroma. It is nutty and fruity enough that people who usually use cream and sugar in their coffee find they don't need it. Jamaican Blue Mountain is exactly average-or middle of the scale-in bitterness, aftertaste and acidity; this is something no other coffee has ever achieved.

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