ANALYSIS

INTRODUCTION

SITUATION ANALYSIS
COMPANY DESCRIPTION
Lotte Co. was originally established in June 1948 in
Japan with the aim to provide an internationalization
and diversification products and services to
customers (Lotte Co. Ltd. 2012). In 1967, Lotte Co.
Ltd. expanded their market to Korea, established
Lotte Group to offer a modernized food industry and a
high-standard lifestyle to their customers (Lotte Group 2012). Nowadays,
Lotte has grown into a global company with offices in more than 50
countries worldwide, various sectors and approximately 4,700 employees
(Lotte Co. Ltd. 2012). Food and Beverage is still the forte of Lotte Group
and has a stable development in the global market especially Japan,
China, Russia and Vietnam. In 2011, Lotte had earned 522.0 billion in
total (Lotte Co. Ltd. 2012).
Lotte entered Vietnam market with their forte food and beverage.
However, it is not until December 2008 that Lotte started investing into
Vietnamese market, with the establishment of the first Lotte Mart in Ho
Chi Minh City. In Vietnam, with KFC, Lotteria is the main player in fast-food
franchising business (TuoiTre 2012).
Lottes mission is to create high quality services and
products contributing to an abundant life for their
customers
through
creativity
exploration
and
challenge confrontation.
PRODUCT DESCRIPTION
According to Lotteria 2012, Lotteria is the leader in the
Korean fast-food industry with 550 billion won sales in 2009. Firstly
appeared in Vietnam in 1998, yet Lotteria is not popular till the entrance
of bulgogi burger in 2004 (Lotteria 2012). According to TuoiTre 2012,
Lotteria is the owners of more than 120 shops across the country, aiming

to open 140 stores by the end of 2012. Entering Vietnam market, as the
similarity in dining culture as well as Asian taste, Loterria Vietnam quickly
attracts the taste of Vietnamese by the
outstanding flavour of modern Korean fast-food.
With the stable development and market share in
Vietnam, Lotteria aims to become the 1st choice
brand in the near future (Lotteria 2012).
With strong growth of economy, consumers now
prefer the convenient and affordable food as their first option in their
hectic daily lifestyle. Realizing this rising demand, many fast-food
franchises have entered the young Vietnamese market with the hope to
offer consumers with more alternatives to their dining options. They
provide products for consumers with suitable prizes and high availability.
The two biggest fast-food franchises in Vietnam today are KFC and
Lotteria, with the total of more than 250 stores across the country (TuoiTre
News 2012)
With many diverse fast-food products, the main focus of Lotteria when entering
Vietnam is still hamburger, the forte of the franchise. However, due to the recent
entrance of Burger King a well-known brand for hamburger, Lotteria has
decided to create a marketing campaign to promote and sustain the position of
Lotteria in the marketplace.

MARKETINGENVIRONMENTS
There are several components that have direct or indirect impacts on
marketings management of Lotteria; they help the company to build and
maintain its strong relationships with the target customers. To illustrate, micro
environment and macro environment make up the marketing environment.

Micro-environment

1. The Company
According to Lotte (2012), Lotteria was part of expansion of Lotte Group.
Moreover, in Vietnam, since Lotteria debuted in 1998, there are now 117
branches operating throughout the country and nearly 50 branches in Ho Chi
Minh city (Lotte 2012). Lotte Group is a strong corporation with the aims of
enhance consumers living standard, thus they have a strong based management
and business strategies. The Lotte Group includes the top management, finance,
R&D, purchase operation and accounting that can affect marketing. For instance,
the marketing budget can be controlled by the finance department; the
production team can plan to create the suitable products and it leads to prevent
potential customers turning to competitors products. Furthermore, because
marketing department helps build and maintain strong relationship with its
customer, Lotteria grows rapidly in the past few years.

2. Suppliers
Suppliers are an important factor to the companys customer value system. The
suppliers provide needed sources for Lotteria such as drinks manufactories
(Pepsi, Vinamilk), chicken and vegetables from farmers. Moreover, controlling the
partnership with them can help to bring the great quality of products as well as
service. Rising supply cost can affect the marketing and the sales volume so the
marketing managers need to monitor the price trends, also watch supply
availability and build good long term relationship with them.

3. Publics
Media Public: Promotions of Lotteria on the Internet, magazines and television.
They generate and affect the public opinions and are a great channel to increase
the awareness of the consumers.

Internal Public: They areemployees of Lotteria. They will get bonuses

depending on their performances while working. They can be the opinion leaders
among the general public and generate opinions about the working environment
as well as product and service of Lotteria, which actually would bring strong
reputation for Lotteria in the public. Therefore, Lotteria should provide good
working environment.
General Public:Feedbacks are always taken from the customers in order to
know about the attitude of the public. Because the general publics attitude and
behaviors toward product and activities may affects its reputation and sales.

4. Customers
One of the important goals of any marketing strategy is to identify and achieve
the needs of the customer. Lotteria can ensure greater customer satisfaction by
considering customer importance and by that, it increases the long-term goal of
the business. If Lotteria cannot develop customer loyalty and satisfaction, they
could lose the customers quickly to the strong competitors. Lotteria has a large
group of customers, including:
Customer Markets: Teenagers and young adults, who love fast-food services
and the taste of Korea food, are the main target customers that Lotteria aims to .
They are the one who directly bring profits for the company by using our
products and service; therefore, Lotteria should always cares about the demand
of those customers and satisfy their needs with the best product and service.
International Customers:Lotteria has more than 140 branches in the
Southeast Asian nation so they have international customers in many countries.
The large size of International markets shows the strong ability of market
penetration of the company.

5. Competitors
Vietnam - a developing country with a young population is a promising market
for fast food industry. Today, people concentrate on saving their time to find
place and eat good food. As the result, fast food market in Vietnam is highly
competitive since numerous fast food chains have been developing in Vietnam in
order to satisfy customers needs.

Direct Competitors:
KFC is the biggest competitor
of Lotteria in Vietnam. KFC has
three main products: chicken
meals,
hamburgers
and
snacks. There are about 100
shops opening in big cities and
KFC has been leading in fast
food market today with more
than 60% of market share in

Vietnam branches. It can affect Lotteria on their share in the

market.

Other direct competitors: Carl Jrs, Burger King, Jollibee. Especially Burger
King, which has entered Vietnam market in 2012, would soon become strong
competitor of Lotteria in term of selling burgers.
Indirect Competitors: Pizza Hut, Domino Pizza, King BBQ, Subway and other
restaurants.
Vietnam market with the increasing number of middle class has become a target
market for franchising brands. In addition, the market conditions in Vietnam are
more favorable than before. As fast food chains are growing rapidly, Lotteria
must provide greater customer values in order to adapt to the needs of target
customers. In addition, they can gain advantages by positioning their offerings in
the minds of customers.

6. Marketing Intermediaries
They are the firms that help the company to sell, promote or make-available a
good or service. In Lotteria, the goods and services are provided to the
customers needs and wants immediately on their outlets. There are marketing
service agencies who help to research the market to build marketing strategies
and execute promotional materials in order to branding and promote the
products relationship with current consumers. Moreover, physical distribution
firms are transportation firms who help delivering the materials for the Lotteria
shops daily and maintain the good condition of food and other materials on the
way. They are the ones who corporate with Lotteria as partners to deliver the
best products and services to customers; therefore, Lotteria should corporate
with these intermediaries to create common values among each other and with
the customers.

Macro-environment

1. Demographic:
According to CIA World Factbook, the population of Vietnam has reached more
than 91 million in July 2012 (CIA 2012). With the labor generation occupied the
majority of the population, Vietnam is considered a country with young
population (Tong Cuc Thong Ke 2012). This also means that the spending power
of Vietnamese is going to increase, and as the young generation is living in a
faster pace, Vietnam appears to be a very promising market to expand products
such as Lotterias. Along with the rising trend in Internet usage, Generation Y and
Z are the 2 dominant groups in Vietnamese population (CimigoNetCitizens 2012).
Lotteria can now send the messages in a more cost efficient way, through a
channel that is very actively and widely used.
In 2009, there were more than 26 million people living in urban area (Tong Cuc
Thong Ke 2012). There is also an increasing trend in people moving from rural
areas to urban areas. This results in the expansion economic centers in Vietnam,
especially in Hanoi and Ho Chi Minh City. As more and more people inhabit in big
cities, the demand is also increased.
2. Economic:
In 2011, Vietnam GDP reached 1,300 USD per capita (TuoiTre 2011). That was an
increase of 5.89% in compare to the year 2010 (VnExpress 2011). Accordingly,
though slow, the buying power of Vietnamese consumers is growing, which
reveals more opportunities for the brand to expand itself in the market.
At the moment, the consumer spending patterns is more about instant products,
focusing on convenience and simplicity of usage (VnEconomy 2009). There is
also an expecting trend of the consumer focusing more and more on health
issues (Viet Bao 2006). Lotteria has many products that suits very well with those
trends, not to mention that the brand also has an advantage of bringing the
Asian taste in a Western dish.
3. Natural environment:
Vietnamese natural environment is being polluted quite heavily. Annually, there
are an estimated 120,000 150,000 hectare of forest being cut down (LanHuong,

2008). Economic development in Vietnam, though had brought benefits, is also

causing great pressure to the environment (The World Bank 2011). Moreover, the
increasing number of vehicles in urban areas also accounted for the polluted
atmosphere in big cities.
At the moment, Lotteria is paying attention to the environmental issues,
specifically by using disposable packaging that mainly made from paper.
However, they are still using plastic bags to contain the bring-to-go food, which
is considered harmful to the environment and may harm the reputation of Loteria
as a brand with strong environment and safety food management (Lotte 2012).
4. Technological
More and more people now have access to the Internet, especially in urban
areas. According to Cimigo (2012), there are around 35 million Internet users in
2011. The Internet penetration rate in all cities reached 58% in 2011
(CimigoNetCitizens 2012). With the appearance of modern technologies like
tablet computers, smart phones and 3G mobile service, users can get access to
the Internet more easily and more frequently. Lotteria is now having more
options in communication channels which work faster and more effectively to
distribute the messages. Specifically, Lotteria has been constructing a company
website in Vietnam and enable customers to order online. However, the website
has not been driven stably, which affects the sales of delivery service and
communication with customers. Lotteria should quickly develop the website
more effectively and stably in the future.
5. Political
Since the country has joined WTO in 2007, Vietnamese government is more
opened to foreign investment (WTO 2012). The market also opens to different
brands from overseas and therefore it is considered an opportunity for Lotteria to
expand its market in Vietnam.
6. Cultural
Vietnamese people highly value the concept of face, which is defined by social
status, financial condition or more specifically, the things that one owns, buys or
uses. As life is getting more and more fast-paced, fast food is one of the
developing trends among the youth.
There is also a dominating Korean lifestyle affecting the young generation of
Vietnamese. Since Lotteria is a brand originated from Korea, there is a high
chance that the number of people having positive attitudes toward Lotteria will
increase.

SWOT ANALYSIS
Strength
-

Weakness

Lotteria menu contain similar flavor to the taste of Vietnamese customers, which cause
the easy adaptability of customers to the
food.
Stores are available in almost every center of

Although Lotteria is fast-food restaurant but

sometime, the customer have to wait a longtime for their orders. Therefore, Lotteria
should improve its service more fast and
convenient.

urban areas across the country, which helps

Lotteria maintains the top position in market
share.
- Reasonable cost, cheaper than other
competitors, Lotteria attracts the variety of
target segments and owns high market share
- Lotteria keep its high food hygiene and
safety, which create a good image in
customers mind as a environment-friendly
service and product.
- Lotteria offers home delivery service, that
offer more convenient service for customers
Opportunity
- Young people in Vietnam are favorable of
Korean lifestyle, varied from food, personal
styles to music, which open chance for
Lotteria to adapt more Korean styles and
tastes in Vietnam with little difficulty.
- The income of Vietnamese households are
increasing which maybe lead to the
increasing in buying power. (research backup)
- The dominance of young generation in
Vietnam opens more chance for Lotteria to
extend their market share in the future.
- The lack of food hygiene and safety in
Vietnamese traditional snack food stores/
street vendors food will bring customers
more preference of fast-food product like
Lotteria.

Although hamburgers are main menu which

make Lotteria stand-out; there is few
promotion for this products. Hence, Lotteria
should
develop
continual
long-term
promotion for burger product category.

Threat
- Many competitors such as KFC, Jollie Bee,
Carls Jr., etc. shares the same market in the
industry. Hence, Lotteria have to push their
marketing plan in order to keep loyal
customers and gain market share.
- Fast-food is still considered as unhealthy
food in customers perception. Therefore,
Lotteria should develop more positive image
and feeling about Lotterias fast-food product
toward customers.

STP
Segmentation
Children
Geographic
Age
Country

Teenagers

Young adults

Adults

5 to 12 years
12-17
18-30
Under 35
old
They are born and live in Vietnam
They can be the expats who live in Vietnam, mostly from Asia areas, Europe
and America living in Vietnam
They live in the urban areas such as HCMC, Hanoi, HaiPhong, Da Nang, Hue,
etc. Loteria shops mostly are located in the centre of city or
neighbourhood

Density
Demogra
phic
Demographic
Gender
Male & Female
Family

1, 1-2

1-2, 3-4, 5+

size
Family
life Cycle

Income

Young, single or
divorced
Young, married
without children
Young, married
with children

Middle to high
allowance

Middle to high
allowance

Occupati
on

Educatio
n

Kid garden,
primary school

Secondary to
high school

Generati
on

Z (born after
1994)

Z (born after
1994)

Middle to high
wages or
allowance
Middle to highly
paid jobs
College or
university
students
White collar
workers
High school
graduated,
Undergraduate,
Graduated,
Y (1977-1994)

Married with
children
Married without
children
Divorced/Single
with children
Divorced without
children
Single
Middle to high
wages
Middle to Highly
paid jobs
White collar
workers

High school
graduated,
Undergraduate,
Graduated
Y (1977-1994)

Nationali Mostly Vietnamese, Asian (Korean, Japanese, Chinese, Taiwanese, Thailand,

ty
Singaporean, etc.) and European, American
Psychogrpahic
Social
Middle class, upper class and high class
Class
Lifestyle
Explore the
Active and
Modern, active,
Modern, active,
new things
trendy with
busy with work
busy with work,
Korean wave
and study
study
Take care of
housework, love
their children
Personali Fun, curious
Fun, socialized
Open-minded,
Open-minded,
ty
socialized and
socialized and
eager to try new
eager to try new
things
things
Behavioral
Occasion Hanging out
Hanging out
Hanging out with
Hanging out with
with family
with family and
family and friends
family and friends
friends
Busy with working Busy with working
and studying
and studying
schedule and need schedule and need
to order fast-food
to order fast-food
Benefit
- Delicious
- Trendy with - Young adults
- They seek for
sought
with
Korean
seek for high
high quality
enough
wave: they
quality
products.
amount of
are affected
products with - They seek for

User
status

Loyalty
Status
Attitude
toward
product

food:
Children
seek for
delicious
and easy to
eat food
with small
amount of
food to
digest.
Also, they
would be
attracted by
fun,
colourful
atmospher
e.

by Korean
music and
Korean
culture;
therefore,
they want to
seek for
Korean
product and
service,
including
food.
Also they
seek for
large space
and crowd
atmosphere
to have fun
with
friends.

First time
Regular users
users who
who are already
usually are
familiar with
taken out by
fast-food service
their parents
and willing to try
and fed new
new products.
food and try
new things.
Gradually they
can be regular
customers
who are
familiar with
and love our
brand in the
future.
- Mostly they are familiar and stay
taste and good service
- Positive
- Positive
attitude
attitude
toward to
toward
childrens
Korean
menu
culture
- May
(music,
indifferent
service) and
to try the
Korean food
new food
- Positive
but still
attitude
curious
toward
discount and
special deals.

reasonable
price due to
the limited in
living
expenses.
- They are busy
with work and
study, so they
may seek for
convenient
service like
fast-food and
home delivery.
- They may find
a comfortable
and fast
service store
when
hanging out
and
socializing
with friends as
well as family.
Regular users
who are already
familiar with and
find convenient
using fast-food
service; also they
are willing to try
out the new
products.

warm and
friendly
environment
for their family
gathering
They are busy
with work so
they may seek
for
convenient
service like
fast-food and
home delivery.

Regular users
who are already
familiar with and
find convenient
using fast-food
service.
Non-users: they
may not use fastfood but they buy
it for their family
or children

loyal with Lotteria due to the suitable

-

Positive
attitude toward
discount and
special deals.
Positive
attitude toward
changing in
menu.
May have
different
attitudes
toward the
fast-food

Positive
attitude toward
discount and
special deals.
Positive
attitude toward
changing in
menu.
May be
indifferent with
western dining
culture but still
accept to use

service and the

combination of
Korean taste
and Western
dining culture

sometimes

Targeting
a. Targeting
Variables

Based on the segmentation table above, Lottetia is currently

targeting various segments that are aged under 35.
Vietnam is a country with a very high inhabitancy,
especially in major cities like Ho Chi Minh, Ha Noi, Da Nang,
etc. People living in these places usually have a tight
schedule; thus they dont have a lot of time to have proper

Segment size
and growth

meals and much rather have fast food. Moreover, big cities
in Vietnam welcome a lot of international cultures so
citizens are likely active and open-minded. In addition to
this, a Korean food brand like Lotteria will have a big
opportunity to gain attention, as Vietnamese people are
usually foreign brand oriented.
There are many strong competitors in the market such as
KFC, Jolibee, Pizza Hut, Dominos Pizza, etc. Also, Vietnam
Investment Review (2012) stated that KFC is the main
competitor in fast food business of Lotteriawhile it occupies
60% of the fried chicken market share with the population of
125 restaurants in all over Vietnam. However, Lotteria is

Structural
attractiveness

well known for its burgers where it takes up to 60-70 percent

of the burger market share.
Plus, substitute products are varied such as street foods;
since people can also have quick and cheaper food that are
easily found right out on the streets. However, the Korean
waves have had a great effect on the young generation in
Vietnam; so thanks to that, Lotteria are more able to expand

their business in this country.

b. Profile of target markets:
According to the General Statistics Office of Vietnam (2010), the figures on
the total population of Vietnamese urban areas are 27,888,200 and its annual
growth equals 10,3%, which is quite densely populated.

Though knowing the target of the fast food industry covers most of the
nation. Since fast food is considered to be a tad more expensive, urban and
affluent areas will be focused on more. Individuals in these locations would likely
have a high-income occupation and could be single, divorced, married with or
without children.

Because the fast food industry is global, nationalities of all

kinds will be focused on.

These target markets tend to be active and modern, therefore, fast food will
work well with individuals who are busy with work and study. Also, people who
are open-minded and social would make good aims. Lotteria would be good for
occasions when families get together or if busy individuals who spend time on
work and study want to grab to seek for convenient service like fast food and
home delivery.

According to ProGuide (2011), Lotteria would be a good

contender in bringing international tastes to open-minded Vietnamese people

who like to try new things in addition to special deals and discounts
c. Targeting strategy:
Lotteria are producing many kinds of different products with a variety of
tastes and flavors such as burgers, chickens, rice, salads, milkshakes, etc.
Thus, having many products that aim to satisfy many segments at the same
time considered to be differentiated marketing strategy (Kotler et al. 2009).
Positioning
a. Competitive advantages
Differentiating itself from other competitors, Lotteria dominates the fast-food
market with three main competitive advantages.

Product differentiation: Lotteria came from South Korean based

company, an Asian country, thus Lotterias products have quite similar
flavor to the taste of Vietnamese customers. With good adaptability to
Vietnamese taste, Lotteria set itself apart from the competition as a
company offers high quality food with a touch of Vietnamese taste and
reasonable cost.
Service differentiation: Lotterias stores are available in almost every
city across the country, especially in the metropolitans such as Hanoi, Ho
Chi Minh, HaiPhong, Da Nang and Hue. Customers can easily find the
stores available in their neighborhood or workplace. In addition, these
stores open 12 to 14 hours a day so that customers can simply get
Lotterias food anytime they want to. Also, home delivery service brings
more convenience for customers.
Image differentiation: Lotteria highly suitable with the recent Korean
wave among young people in Vietnam who are favorable of Korean
lifestyle, varied from food, personal styles to music. Being the first and

only Korean based fast-food franchise, Lotteria is well fitted with the
recent trends among Vietnamese youth.
b. Overall positioning strategy

Price
More

Benefits The

More
More for
more

same
Less
c. Positioning Map

MAKETING MIX STRATEGIES

Product
1. Product Classifications

The same
More for the
same

Less
More for less
The same for less
Less for much less

Lotteria products are convenience products which customers can purchase

without much effort and consideration.

2. Levels of product

Core benefits: Fast food - customers can be satisfied by offering them fast
service food with tasty meal
Actual product :

Brand name:Lotteria takes its name from its parent company which is
Lotte multinational corporation in South Korea and Japan.
Design : variety of choices, main colors using are red, orange and white.
Lotteria uses these colors because red makes people hungry and aslo
attracts attention to customers.
Packaging:Lotteria products are packed in recycled materials implemented
by Lotteria campaign to reduce the use of disposable packaging harmful to
the environment.
Feature: high quality products with clean and pleasant restaurants in quick
and courteous service. It is convenient for customers to offer quick meals
for busy lifestyles.
Quality: Made from fresh ingredients, Lotteria uses high quality chicken
meat and their desserts are made from only the finest ingredients include
Ice Cream Sundaes, Ice Flakes. Lotteria products can please the taste of
customers by their freshness; the food is always freshly made and there
are strict health and safety regulation the ingredients.

Augmented product:
Services: Customer-oriented care, speedy service. Customers will not take a
long time to get the food. There is nothing better to have a ready meal in todays
fast paced life. Moreover, when customers come to Lotteria stores, the staff are
always smile and give customers welcome message Welcome to Lotteria
Additional Services: Internet connection free in stores that can help customers
not only to enjoy their meal but also they can read online newspaper of chat with
their friends or even continue their work
3. Product Life-Cycle Strategies
Lotteria is in the maturity stage since its sales continue to increase in this stage.
The brand awareness is strong; however, competing products are very similar at
this point, creating a difficulty in differentiating the product.
4. Brand Development Strategies

Lotteria is now using line extension, in which Lotteria keeps developing new
products to add on their product categories.The latest product that Lotteria
provides to its customers is Finger Chicken. The flavor is the same but the size is
different. However, customers are willing to try them to see the differences.
Moreover, to make the products familiar with Vietnamese customers, Lotteria
expands the menu with Rice and Soup using with the chicken. Additionally, rice
burger is currently added to the menu with Rice Bulgogi Value and Rice Chicken
Value. Finally, hamburgers ingredients are adjusted to satisfy customers such as
double cheese, double bulgogi.

Price
With the existence of international brands such as KFC, JollieBee and the new
comer Burger King, it is undeniable that the fast-food is a fast booming market.
Hence in order to compete in such constantly changing and aggressive
marketplace, Lotteria has been using some specific pricing strategy to
differentiate itself from its competitors.
Companys pricing Strategies
1. Current Price
With various products, ranging from main dish, side dish to deserts and snacks,
the current price for Lotteria is from 7,000 vnd up to 260,000 vnd, depending on
different products.
2. New-product pricing strategies
Since its first entrance, realizing Vietnamese consumers are highly price
sensitive, Lotteria uses market penetration pricing by setting its products at a
relatively low price compared with its competitors, in order to penetrate the
market quickly by attracting a large number of buyers.

3. Product Mix Pricing Strategies

Product bundle pricing
The brand also uses product bundle pricing as a pricing strategies in order to
encourage the purchase amongst potential consumers. Lotteria offers many
combos, including a main dish (Chicken, rice or burger) with a side dish and a
beverage, for its customers who are highly price sensitive. For any combos,
Lotterias customers can save up to 12,000 VND respectively. This strategy is
commonly used by Lotteria, as well as its competitors in the fast-food industry.
Product line pricing
Lotteria offers many product lines for its customers. The 4 main product lines of
Lotteria are beverage, chicken, rice and burger. Nevertheless, Lotteria also
provides various snacks and ice-creams. Within each product line, the prices of
products are also varied. This strategy aims to offer customers the variety of
choices.
For instance: For beverage, Lotterias products are from 14,000VND to
22,000VND. For chicken fried, the prices vary from 29,000VND to 260,000VND.
For more information, please see the Appendix.

4. Price-adjustment strategies
a. Discount
Quantity Discount: For Lotteria chicken combos, customers will have 2 options
basing on the number of chicken pieces that they would like to have. The more
customers buy, the less they have to pay. For instance: if they want to have 6
pieces soy bean chicken, they would have to pay 175,000VND. But if they want 9
pieces of soy bean chicken, they would have to pay 260,000VND. This strategy
helps encourage customers to buy more Lotterias products.
For detailed prices of all combos, please see the Appendix.

b. Segmented Pricing
Time Pricing: Lotteria uses segmented pricing, in particular time pricing as its price-

adjustment strategies. For each week day, Lotteria will offer a discount for a particular
product. Each week day, the discounted product will be different to the previous day.

Figure 1: December Daily Buzz (Lotteria 2012)

Place
1. Marketing Channel:
Lotteria has been applying direct marketing channel by having products directly
distributed from stores to customers. This method helps controlling the
consistency of messages; and therefore, building a clearer brand image towards
customers. However, this can cost a lot more than having many intermediaries to
help distributing the products.

2. Channel Organization:
a. Contractual Vertical marketing system
Lotteria Vietnam is an official franchise of Lotteria. However, it is not controlled
and managed by the parent company. Lotteria Vietnam only follows the core
ingredients and recipes that provide by Lotteria in order to remain the same
production. According to Kotler et al. (2009), Lotteria Vietnam is applying the
service firm-sponsored retailer franchise system where it has to pay for the use
of Lotteria brand name while remains some regulations of the mother
company.

b. Horizontal Marketing system

At the moment, Lotteria has already had a number of business relationships with
some big shopping malls and supermarkets for example Co-op Mart, Maximart,
Parkson, Vincom, etc. Through this system, the company and its partners plan to
achieve their objectives faster with the combination of resources from both sides.

c. Hybrid Marketing system

Since Lotteria are having different channels of distribution for its products to get
to the consumers, they can utilize this opportunity to expand the distribution
network to a larger scale, focusing on the contractual marketing system.
Specifically, they can open more restaurants in different districts to the edge of
the city such as district 2, Thu Duc, PhuNhuan, etc. One of the reasons is that it
helps expanding their individual business, reaching more consumers and
showing a clearer set of brand personalities by not relying on the attractiveness
of shopping malls or supermarkets. Another reason is that since life is getting
more and more fast-paced, the demand for instant products will rise. Moreover,
since the restaurants will not be located in the center of the city, the company
can adjust its budget in order to carry out the plan more comfortably.

3. Marketing Intermediaries:
Since fast food is considered as a convenience product, Lotteria is using
intensive distribution with the purpose of selling as many products as they can;
therefore, the company can maximize profits. However, from this technique,
Lotteria also faces a major disadvantage, which is the difficulty in differentiating
the brand from other convenience products from the same category.

Promotion
Promotion is very important for Lotteria to build and maintain relationship with
customers as well as to promote their monthly updating products and special
discounts. Currently, Lotteria use a lot of promotion tools:
Promotion
Tools
Advertising

Tactics
Advertising is an important method of mass promotion which a
single message can reach a large number of people. This is a tool
that has a power to convince, to impress customers. Lotteria is
now using :
Official Website: The main website of Lotteria (www.lotteria.vn)
is used to provide the menu of Lotteria and also give the
addresses of any Lotteria branch in Vietnam. However, the official
website is not developed consistently, which create the disruption
in connection with our target customers, who usually look for
menu and may look for online ordering. This is a weakness of
Lotteria compared to KFC when they promote a lot in delivery
service as a part of fast-food service.
Newspapers/Magazines: Articles about monthly product
promotions or discount on popular magazines and newspaper
such as TiepThivaGiaDinh, TuoiTre, The Gioi VanHoa. It can
attract multiple readers and it is a reputable way to advertise and
promote a specific image through print media.
In-store display:Banners and posters in store are used to

promote new product, promotions and monthly discounts with the

images of products that look delicious and colourful. This not only
provides information to customers about Lotteria products but
also help encourage customers to come in store to buy products.
Sale
Promotion

Public
Relations

Coupons:Lotteria is offering coupons to customers through the

distribution of coupon booklets. These will help the consumer to
save some money when they purchase Lotteria products.
Patronage rewards: When a customer regularly purchases
Lotterias products, they are given a VIP card that allows them to
save 10% of every bill at Lotteria later on.
Sweepstakes &Games: On Facebook page, Lotteria constantly
holds contests to encourage interactions among target
customers. This attracts a lot of participants as well as
encourages store visits and consequently purchasing.
Facebook page:Lotteria Facebook uses to broadcast any new
promotion campaign and menu of Lotteriafrequenlty. This is a
good way to spread information on social network because
Facebook is a good medium to interact with customers. Lotteria
has been using Facebook to create events that helps increase
visibility to the target customers. This channel also helps create
more interaction with customers compared to the website,
especially easily reach and communicate with our target
customers who are savvies of social media. Customers can raise
their voice to express their opinions and feedback about Lotteria
products and services.

Personal
Selling

Lotteria applies Territorial sales forces structure, which each

sales team is assigned to selected geographic areas and sell all
the products of Lotteria. Lotteria stores are located everywhere in
Vietnam, encompassing from different cities (Hanoi, HaiPhong, Da
Nang, HCMC, Binh Duong, etc.) to separated districts in each city.
Since our target segments are living randomly in those urban
areas, territorial sale force structure help Lotteria reach as many
target segments as possible. Also, for each particular area,
Lotteria can develop the different promotion plan in order to fulfill
the life-styles and taste of atmosphere and dining music
background of customers. For example, Lotteria in Phu My Hung
and District 7, which a lot of foreigners and high-class customers
living, Lotteria stores usually open the foreign music, which in
other districts they open Vietnamese music.

Direct
Marketing

Online marketing:Business to consumer (B2C) online marketing is

used by Lotteria at the moment. Lotteria established an official
website andofficial Facebook fanpage which has menu
available on a separate page for customers. This helps customers
to order Lotterias products via telephone for free delivery.

OBJECTIVES
With many diverse fast-food products, the main focus of Lotteria when entering Vietnam is
still hamburger, the forte of the franchise. However, due to the recent entrance of Burger King
a well-known brand in hamburger, Lotteria has decided to create a marketing campaign to
promote and sustain the position of Lotteria in the marketplace. For that aim, the objectives
of the marketing plan is:

Financial Objectives

To increase Lotteriassales in burger up 5% at the end of the campaign.

Organization Objectives
To maintain Lotterias position in fast-food industry, especially in burger market as
number 1 dominant player in the market share.
To build Lotterias image as an environmental friendly fast-food brand.
Marketing Objectives
To promote the Lotterias burger as well as its position in the market during the
campaign.
To promote Lotteria as the best-service fast-food brand in the marketplace that offers
healthy products.
To sustain the loyal customers of Lotteria during the campaign.
To develop a new type of burger for Lotteria.

RECOMMENDATIONS
MARKETING STRATEGIES

Target Market
Variables
Segment size &
growth

Structural
attractiveness

According to the set objectives, Lotteria should be

focusing on 2 main variables, which are teenagers and
young adults (see segmentation table above).
Targeting citizens living in big cities such as Hanoi, HCMC,
Da Nang, etc. is a wise decision that needs to keep up.
Moreover, the ability of culture adaption in the cities is
higher where there is a collection of multicultural food
brand operating there.
According to the target market analysis, KFC is still the
biggest rival of Lotteria where its operating more than
100 stores around Vietnam. However, Lotteria still
remains number 1 in the burger market share where KFC
can hardly compete.

a. Profile of target market

According to the General Statistics Office of Vietnam (2010), the figures on the
total population of Vietnamese urban areas are 27,888,200 and its annual growth
equals 10,3%, which is quite densely populated.
These target markets are modern, open-minded and busy with work or study;
therefore, fast food like Lotteria is perfect for their precious time. For teenagers,
they are the ones who having good reaction on Korean culture such as music,
clothes and services. For young adults, they are sociable but strict with their
schedule. Thus, Lotteria is a good choice of providing good convenient products
with a small amount of time.

b. Targeting Strategy

As Lotteria should be concentrating on 2 distinctive target markets,

differentiated marketing strategy is considered to be suitable for Lotterias
promotion (Kotler et al. 2009).

Positioning
Product Differentiation
As number one fast-food brand
in burger with wide range of
desserts and snacks, product
Differentiation the forte among
other competitive advantages
of Lotteria, comparing to other
competitors.
Using
fresh
ingredients,
Lotteria
offers
customers with high quality
products that are delicious and
healthy at the same time.
Lotteria should make this fact
more visible to consumers via
promotional efforts to illustrate
the high-quality and healthy
products of Lotteria

People Differentiation
TH
True
Mart
has
knowledgeable and polite staffs
to
serve
customers.
This
system should be maintained
through
annual
training
workshops
exclusively
for
Lotterias staffs.

Image Differentiation
It is undeniable that Lotteria is nothing rather
than just a fast-food brand with good food and
reasonable price. To be differentiated among
competitors, it is a must that Lotteria start
developing a new brand image. We suggest
that Lotteria start show customers that they
care about customers health and the welfare
of the society:
- Lotteria
should
offer
customers
with
recyclable
packaging

which
are
environmentally friendly. It shows that other
than just an ordinary fast-food brand,
Lotteria is a brand that actually cares for the
society.
- Due to the rise of health conscious among
customers, Lotteria can show that it is a
brand that genuinely cares for customers
health, by offering more healthy choices that
are affordable and delicious
Services Differentiation
- TH can improve their delivery services. Along
with free delivery, the delivery should be fast
(less than 30 minutes) and provide customers
with hot food.
- Quantity discount (for chicken) and product
bundle
pricing
(combos)
should
be
maintained using in the future to show that
Lotteria always offers customers the best
deals for delicious meals.

2.2 Overall positioning strategy

The strategy More for less should be continuously used. Even though Lotterias
products are sold at the lower price, the high quality of products is still always

maintained. Discounts are still frequently used in special occasions. Customers

will be served by friendly, helpful and polite staffs, alongside with fast and free
delivery. Rather than just a regular fast-food brand, Lotteria shows that it cares
for the societys welfare and consumers health through recyclable packaging
and healthier products.

SWOT Matrix (Table)

MARKETING MIX STRATEGY

Product
1. Existing Product
2. New Product

Lotteria should develop new product line of burger in order to keep in mind of
customers that burger is focus product category, rather than keep developing
snack products, like they do at the moment. Also, developing the new type of
burger would be a must to compete with a new competitor - Burger King Vietnam
who also focuses on selling burger. Therefore, we suggests Lotteria add 2 new
flavors of buns on the burger categories, which are Veggie Rice Bun and
Whole Wheat Bun (see the Figure #). These 2 types of buns could be used for
all the existing burger products of Lotteria. Instead of only choosing flavor of the
burger, Lotterias customers could now choose what type of bun they would like
to have in their burgers.
Vegie Rice Burgers and Whole Wheat Rice Burgers contain fewer calories than
others types of bun, which brings more nutrient and healthier meal for
customers. In addition, with these green ingredients in 2 new products,
customers would gradually think that Lotteria offering more healthy and
nutritious fast-food products.
In brief, Lotteria offers them a variety of buns flavors, including Normal Bun, Rice
Bun, Vegie Rice Bun or Whole Wheat Bunin order to offer new purchasing
experience to our target customers as well as to gain more market share in the
burger market.

Figure #: New product lines: Burger with Veggie Rice Bun & Burger with Whole
Wheat Bun.

Price
1. Existing Product pricing strategies
a. Product Mix Pricing Strategies
The product bundle pricing that is currently applied by Lotteria can be
sustained to use in the coming year in order to minimize customers
confusion and maintain their satisfaction and habit while using Lotteria. Also,
product line pricing is a good strategy that Lotteria can be kept for the
existing products in order to maintain customers satisfaction to the variety
of choices when ordering food at Lotteria.
b. Price Adjustment Strategies
Other than the current time pricing strategy with daily discount, Lotteria
should use segmented pricing, particularly location pricing. They should
provide online ordering system for people who want to have Lotteria without
having to go out. Lotteria can give 10 % discount for different product from
online orders. Due to the strategy More for less, the price should be a
tad lower than other competitors in the market. Consequently, Lotteria can
reach more customers who have busy schedule with work and family, and
want to grab convenient food.
2. New products
For the new products, Lotteria can set the higher price than normal products
but still keep it reasonable enough to maintain the positioning strategy
More for less. Also, the new products also should keep using Value-Added
Pricing strategy in order to satisfy customer and to compete with the
competitors.

a. Prices
The price for Veggie Rice Bun and Whole Wheat Bun Burger should be
the same with the existing products price. We suggested that the price can
be ranged from 25,000 to 40,000 VND, depending on the burgers flavor.
b. New-product pricing Strategy:
Lotteria should use Market Penetration Strategy that is selling at low price
at the beginning to get as high market share as possible for its new product.
So, in the first month of launching new product, Lotteria can encourage
customers to buy burger with the new bun and get a large cup of cokes for
free in order to attract and encourage customers to try the new products.
Even though the production cost increases due to the introduction of the new
buns, Lotteria still offers new burgers buns for the same price. Hence, the
customers would find the price for new products reasonable and appealing for
trial. In addition, it would emphasize Lotterias image as the number one fastfood brand in burger that offer healthy choices to its customers.
c. Product-mix pricing Strategy:
Product bundle pricing & Optional pricing
Lotteria still can maintain burger combos with a set of burger (with a chosen
bun), beverage and side dish at a reduced price. Additionally, Lotteria can let
customers choose their snacks to go with a chosen-bun burger at the 10%
discount of total. By this, Lotteria give customers individual choice, which not
only encourages customers to try the new bun but also illustrate the More
for less strategy of Lotteria.
d. Product Adjustment Strategy
Segmented pricing Customer Segment pricing & Time pricing
For new flavors of burgers bun, Lotteria can combine customer segmented
pricing and time pricing by offering a happy hour from 5PM to 8 PM on
Wednesdays for only students customers who have student ID. Wednesday is
a peak time since it is the sale-off day of a lot of cinemas which often are
relatively close to Lotterias store. Moreover, at the time, students from
secondary to university usually have fewer classes than normal. For this peak
time, Lotteria should offer student customers a combo for new bun burgers at
30% off price during the happy hour. By this strategy, Lotteria can attract and
encourage customers come as group to enjoy the combo jumbo and share fun
moments together. Lotteria can temporarily gain sale and market share for
this product.

Place
1. Existing Product Recommendation
a. Marketing Channel:
Lotteria should be focusing on expanding its distribution network where urban
areas are expanding. The more stores this company opens, the easier the access
to the products it will become. However, the company should balance the
number of stores open and the marketing budget in order to maximize profits.

b. Marketing Intermediaries:
Aiming to make Lotteria a corporate brand of convenience product, the company
should maintain the intensive distribution strategy. Moreover, it should be
developed along side with the promotion mix tools to make the brand stand out
more among the competitors, changing the buying behaviours of consumers
towards the brand.

2. New product recommendation

a. Marketing Channel:

For the 2 new products, they should be available at Lotterias restaurants that
have high number of consumers visited monthly in order to introduce the new
products to the consumers more effectively while still balancing the costefficiency of the marketing plan.

b. Channel organization:
Hybrid marketing channel will remain as a model to distribute the new
products. (see existing Products Channel Organization recommendation above)

c. Marketing Intermediaries:
Selective marketing channel will be applied in this situation in order to make
the new products appear more unique and particular to the consumers. For
example, only a few stores in Hanoi and Ho Chi Minh City will have these
products.

Promotion
1. Existing product promotion plan

For existing product, Lotteria should invest more in promotions tailoring loyal
customers and our target segments.
Suggested
Marketing
Tools
Advertising

Tactics

Sale
Promotion

Lotteriashould maintain coupons and patronage rewards in

order to maintain relationship with our regular customers and
gain more sales. The coupons should have more discounts on

Burger shaped brochure: Because Lotterias objective aims to

promote that Lotteria focus on burger products and offer more
type of burgers than other competitors. Lotteria can design a
customize menubrochurein shape of a burger. Then when
customers turn to each page of coupons, they can see the
different ingredients of burgers, its nutrients information insides.
This type of advertising create an impression in customers that
Lotteria care about customers health and always put efforts in
creating new type of healthy burgers. The brochures can give out
to customers order delivery meal and any customers passing by
Lotteria stores.

Personal
Selling

Public
Relations

burgers menu.
Sweepstakes:In order to encourage customers buy large
amount of products, whenever a customer pays for a bill over
200,000 VND, they will have a chance to win a random prize from
Lotteria through a lucky draw. All of the draws will result in a prize
ranging from a VIP card or a coupon booklet.
Lotteria can still maintain the existing territorial sales force
structure in order to extend more market share and gain sales in
the future. Especially, when Lotteria currently are winning over
the market share in burger fast-food industry (Burger King
Vietnam) and closely compete with KFC Vietnam, it should invest
more in this strategy so as to improve Lotteria in the first position
of fast-food market-share.
Training Salespeople: Salespeople are the representatives of
the company who directly communicate and serve to customers.
Therefore, training salespeople is every important process. The
training should aim to improve the similarity and consistency of
individual salespeople in all Lotteria stores in different areas. The
salespeople should be trained about the fast-food service
industry and the Lotteria company, their specific job skills so as
to represent the right manner and Lotterias culture to customers.
Also, they should have knowledge about specific types of
customers in order to meet the specific needs of customers. With
the consistency, our target customers can be satisfied in every
Lotteria stores they go to gain loyalty with Lotteria. This can help
to attract and create first impression for first-time users.
To advance and keep up with the good affiliation with different
publics, LOTTERIA is to enforce actions to spread a good
corporate brand image and at the same time help the brand gain
the number one dominant player in the burger market chair as
one of the companys objectives
Sponsorships:Lotteria should sponsor some events that help
improves environment in order to emphasize one of the most
important organization objectives, which is being an
environmental friendly fast food brand.
Web pages: This is one of the most important PR tools of
Lotteria currently. It lets customers have a chance to interact
with the brand, get benefits, and also change their buying
behavior. The Lotteria web page should be more easily accessible
for frequent customers. The webpage should be more organized
in terms of placement and information display in order to help
customers understand further about the brand. Also, because
most of our target customers nowadays are busy and looking for
fast-food service through internet, with online ordering on the
website, Lotteria can easily reach our large target customers and
gain more sales.
Facebook Page: Lotteria should maintain the official Facebook
Fan Page to interact and communicate directly with our target
customers, who are more than 55% of Internet users (Cimigo
2012). Lotteria can continue creating online contest to increase
interactivity with target customers and grab attention from
publics to Lotteria brand. By encouraging customers give
feedback through FB pages, Lotteria will gain more customer

Direct
Marketing

satisfaction.
For existing products, Lotteria should maintain using online
marketing to communicate directly to the customers.

2. New product promotion plan

Lotteria should promote their new products to target customers as healthy meals
and as a strong fast-food brand in producing variety of burgers.
Sale Promotion

POP display:Every Lotterias restaurant should have a standee placed near

the entrances with the image of the Jumbo burger in order to promote for the
new product as well as remind customers that they are having a new option
for a meal at Lotteria. Also, Lotteria can place at their reception booths small
standees formed in new type of burger buns shape to get high attention of
customers when they are ordering.
Premiums: For the first month launching new products, Lotteria can offers
for customers buy 1 new type of burgers will get 1 combo of any snack
(French fried, cheesesteak) and coke for free. This encourages customers
more willing to try new products.
Salespeople: Because sale person direct communicate with customers when
they come to order food at our booth. Therefore, salespeople should be trained
to direct introduce about our new products and recommend customers to buy
when they want to order burgers.
Direct Marketing In order to promote for the new products (new burgers
buns), in addition to online marketing, Lotteria should use direct-mail marketing.
Direct emails would be sent to frequent customers who have Lotteria
membership card, to inform customers about the new products and relating
discounts, in order to encourage trial for the new buns.

References
General Statistics Office 2010, Average urban population by province, viewed
23 November 2012, http://www.gso.gov.vn/default_en.aspx?
tabid=467&idmid=3&ItemID=12936
Kotler, P, Armstrong, G, Ang, S, Leong, S & Tan, C 2009, Principles of Marketing:
A global perspective, 12thedn, Prentice Hall, Pearson Education, South Asia.
ProGuide 2011, Nha hang thucannhanhLotteria, 25November, viewed 23
November 2012, <http://www.proguide.vn/cua-hang/27-nha-hang-thuc-annhanh-lotteria.aspx>

Vietnam Investment Review 2012, Youth swallow up fast food, 31 October,

viewed 23 November 2012, <http://www.vir.com.vn/news/features/youthswallow-up-fast-food.html>