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Brewing the best of the best

Published: 
15 Sep 2017

While Vietnam’s traditional coffee culture is the dream of many a tourist, can a modern coffee chain win over the taste buds of the Vietnamese, and even beat the competition from foreign brands? The answer is yes, as one local company found when it adapted its offerings to meet consumer tastes and preferences in the small city of Cao Lanh in Dong Thap province, which only received its city status in 2007.

Cao Lanh and its population of 160,000 is a far cry from Ho Chi Minh City and its population of more than seven million. Despite the potential difficulty a modern coffee chain might face when trying to enter a traditional market in a city like Cao Lanh that had never experienced modern consumer offerings, it attracted the interest of the founders of the Best of Best (B.O.B), the city’s first modern coffee chain. Established in December 2014, B.O.B is a highly successful venture. By 2016, for example, the chain had grown to five stores throughout the province and by the end of 2017 it expects to open two to three more coffee shops in another city in the province.

Before deciding to invest in Cao Lanh, the founders surveyed more than 200 potential customers to identify their demand for, and expectations of, drinking coffee or juice. Most respondents were high school students and young people. Based on the survey results, the owners decided to invest in the city. Next up was a strategy to overcome the possible barriers to entry mentioned earlier.

The strategy revolved around three major steps:

ADAPTING TO THE CULTURE OF THE LESS-DEVELOPED CITY

First, the team worked on the formulation of the drinks and followed the recipes provided by the experts and professional bartenders from Ho Chi Minh City. Several were trialled before the final formula was decided ahead of the official opening of the coffee shop. Surprisingly, more sugar was needed to satisfy local tastes.

Secondly, changes were made on how customers would pay for their drinks. At B.O.B Coffee outlets, customers order and pay for their drinks in advance at the counter before enjoying them. This payment method was practiced in the large cities of Vietnam, but runs contrary to the local retail culture in Cao Lanh and Dong Thap province. Indeed, customers did not like to pay in advance and were uncomfortable with this method of payment. This was especially true for the elderly who were resistant to the new service culture. Educating customers took time.


In the beginning: The first B.O.B. outlet opens in Cao Lanh. (Photo Credit: B.O.B.)

USING AN ENGAGING MARKETING STRATEGY

The owners used the social media to improve brand awareness. Pages were created for Facebook, Zalo and Instagram. Posters and banners were placed in B.O.B coffee shops and busy nearby places. The stores also offered gifts celebrating occasions such as store openings and anniversaries together with festive seasons such as the Lunar New Year and Christmas. Stores also organised activities like music and movie nights on weekends for younger customers. Normally a slow time for the business district and downtown coffee shops in general, these activities resulted in a full house. The owners also provided free drinks at high school events in the region, thereby building a strong brand awareness in the community.

The continuous marketing activities and weekly events led to a clear increase in the number of loyal customers. The first year saw an average of 300 to 350 customers per day in each store, rising to between 380 and 420 customers per day in the second year of operations, and continuing to rise steadily in the current year.  

The B.O.B Coffee chain also seeks opportunities for cooperation with other organisations as part of its reputation-building efforts. Specifically, the company has an agreement with Delimanjoo, a Korean brand popular for its cakes and ice cream, a move that is expected to attract fans of the brand’s baked goods and sweets.

Another cooperation is with the Western English Center, a local English language centre with its main office in Ho Chi Minh City, in which B.O.B Coffee outlets host English-speaking and singing contests.

The coffee chain also endorses sustainable development, giving back to society through organising the annual Trăng Ngộ charity performance for poor primary school students during the mid-autumn holiday.

 

ENSURING QUALITY CONTROL AND DESIGN

B.O.B Coffee pays attention to the quality of ingredients, beverages, store image and service. Quality is ensured by choosing reputable suppliers. Founders also established an inspection department to check on the quality of ingredients. Training courses provide employees with an understanding of the procedures as well as equiping them with the skills to work efficiently. With quality ingredients and skilled employees, service at B.O.B Coffee outlets is always maintained at the best quality. Finally, each store receives a food and beverage safety registration certificate.  

The founders also made various trips to luxury coffee shops around Ho Chi Minh City to observe the interior design, staff uniforms, furniture and lighting. Based on their observations, they were able to make decisions that led to the creation of comfortable stores for consumption of coffee and relaxation at any time of the day. Successful implementation of these strategies has seen B.O.B Coffee steadily increase its sales volume since the first quarter of 2015, as shown below. 


Source: Authors.

PUTTING THEORY INTO PRACTICE

The founders of B.O.B Coffee have successfully applied the theoretical perspectives of marketing principles, human resource management and business strategies to set up a modern coffee chain in rural Vietnam. The company has illustrated how market research was able to assist the new coffee chain to influence consumption behaviour while adapting to customer tastes and preferences when penetrating the less-developed market. Through the collection, analysis and resulting insights of their market research the B.O.B team were able to gain the insights and confidence needed to bring a bold concept to a new market.

 

Hau Vinh Nguyen is an MBA student at International University, Vietnam National University, Ho Chi Minh City, Vietnam and Phuong V. Nguyen is a lecturer at International University, Vietnam National University, Ho Chi Minh City, Vietnam.

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