VietNamNet Bridge – Curiosity has been raised when Highlands Coffee still keeps quiet, while the US Starbucks has entered Vietnam with noisy media campaigns and Trung Nguyen has triggered a war of words with the US giant.
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One year ago, the third-party merger & acquisition (M&A) deal among Highlands
Coffee – Pho 24 and JolliBee wrapped up after JolliBee Worldwide, a subsidiary
of JolliBee completed the purchase of 50 percent of the VTI’s business division
in Vietnam.
The deal reportedly had the value $25 million. The buyer agreed to lend $35
million to the seller at the interest rate of 5 percent as a part of the deal.
The loan would become matured by 2016.
The outstanding feature of Highlands is that the brand has been following a
constant and clear positioning right from the beginning with the strong brand
association of image – the coffee for businessmen, and the coffee for high
income intellectuals.
A small scaled market survey conducted by Richard Moore Associates (RMA),
Highlands has the strongest brand association of image, at 100 percent, for “the
coffee for businessmen” (understood as the “on spot” cafes, not “coffee to go”).
The second position belongs to Trung Nguyen Coffee, 66.67 percent, followed by
the US The Coffee Bean and Tea Leaf, 56.67 percent.
Highlands was also the strongest in terms of brand association of image for “the
coffee for the intellectuals with high incomes,” with 96.67 percent, followed by
Trung Nguyen, 90 percent, and The Coffee Bean 86.67 percent.
Nguyen Duc Son, RMA’s Branding Strategy Director, noted that the majority of
Vietnamese know this is a Vietnamese brand. Especially, Highlands Coffee has
been recognized as a high end coffee brand.
Starbucks issues a noisy challenge, Highlands answers by keeping quiet
Vietnamese coffee brands have been acting differently on the wave of foreign
investors flocking to Vietnam.
Trung Nguyen’s Dang Le Nguyen Vu has run a noisy communication media to fight
against the US giant Starbucks.
Vu appeared on foreign and domestic newspapers in the interviews given to the
newspapers, saying that the US Starbucks cannot frighten Trung Nguyen, because
Starbucks would not be able to conquer the Vietnamese hearts, who have their
specific “coffee culture.” Vu also said that Starbucks just sells the “coffee
flavored water,” not real coffee.
Unlike Trung Nguyen, Highlands and its partner JolliBee have been absolutely
quiet. There might be some suppositions.
First, this might be a policy of JolliBee. Analysts commented that this is the
favorite way the group sometimes follows and succeeds in the competitions with
the global fast food groups in the Philippines.
Second, is it because the stake transfer procedures between JolliBee and
Highlands have yet been wrapped up?
Observers have noted that Highlands has quietly reduced the coffee prices, which
means that Highlands may pursue JolliBee’s strategy – applying reasonable sale
prices to be able to sell more.
A drink expert has noted that at this moment, Starbucks is not the main rival of
Trung Nguyen, because it has just set its foot in Vietnam.
Starbucks now only has one take away shop which targets the customers who spend
money to buy the “feeling” of being connoisseurs when drinking the most famous
brand coffee.
Meanwhile, Trung Nguyen believes that it can conquer the hearts of customers,
because it has different products for different groups of customers, from
popular to high end products.
However, it is Highlands, which will be the direct redoubtable rival of
Starbucks in the future.
Doanh Nhan