Group 11: Cao Hng Nhung

Trn Thanh Tng

- Mission: To connect and develop to community of coffee lovers with a passion

for creative coffee in order to achieve a prosperous and sustainable world.
- Vision: To become the worlds coffee leader.

Trung Nguyen Coffee Traditional

Franchise
business model

Coffee shops Wholesaler

Consumers Retailer

G7 Mart
Consumers

Multichannel Distribution Systems

1. Traditional business model

 - There are 3 levels: wholesaler, retailer and consumers.

- In 2010, Trung Nguyen has 4 factories in over Vietnam

More than 600 coffee shops

121 exclusive distributors

59000 retail stores

2. G7 Mart (modern business model)

- G7 Mart system: is the collection of small coffee stores. By equipping,

upgrading and changing the management methods, it makes the traditional
retail stores become convenience stores.

- This is the distribution system that has more than 200 suppliers.

=> Satisfy the shopping habits of Vietnamese consumers.

3. Franchise

- Vertical marketing systems.

- In 2000, Trung Nguyen became the first Vietnamese Company applied

franchising model domestically and internationally.

- Trung Nguyen has more than 1000 franchising stores in over Vietnam and
expands to more than 50 countries all over the world such as Japan, Singapore,
Thailand, Cambodia, China, Poland, USA, etc.

=> By using franchising stores, Trung Nguyen wants to bring Vietnamese coffee to
international market not only the most delicious coffee cups but also special coffee
culture of Vietnam.
Success and failure of Trung Nguyen
Distribution Channel :
Success:
- Make the fever in the coffee market, called "Trung Nguyen Fever". In 6 months, the reputation of
Trung Nguyen become more trustworthy because of the marketing strategy and quality of Trung
Nguyen Coffee beans

- Coffee is very popular all over the world including Vietnam. And drinking coffee is one of
Vietnamese traditional. Understanding this, Trung Nguyen is the first company which manage and
administrate professionally in VNam Market.

- Thirdly, the franchise of Trung Nguyen. Trung Nguyen is the first brand name which using modern
distribution channel. This impact make Trung Nguyen left the other competitor so far.

- The fourth, G7 reach the market strongly and intensive, make Trung Nguyen more popular for the
customers not only in Vietnam but also in the other country.

Failure:
- After one year doing well, Trung Nguyen company started to remain in everything. Journalists don't
care much about them like the past because of same old boring story. It's not the phenomenon
anymore and people careless about things related to Trung nguyen.

- In homogeneity : you can easily find the different prices and services in different places where

having Trung Nguyen Coffee because using franchise unreasonably and wrong pricing strategy.

-They can't get over from their successfully shadow. Using franchise to reach the customers too

rapidly, first it makes very massive profit for company but after that they can't control franchisee

and the result is they lost their unique of the "pioneer".

- Some grocery under the G7 system have very poor condition, and this reason makes customer

doesn't appreciate Trung Nguyen much.