Marketing Plan Proposal

The Coffee Bean & Tea Leaf

Simply the best coffee!
By Group 3 - DESPICABLE Cao Anh Khoa s3311541 Tong Nhat Tram s3324394 Kieu Minh Quyen s3325308 Nguyen Minh Toan s3325376 Nguyen Thi Van Anh s3324330 Propose to Mr. Mattia Miani

Located in Los Angeles, the well known city of art and world trade, International Coffee & Tea, LLC is one of the world leading companies specialized in the distribution of coffee and tea under the name of The Coffee Bean & Tea Leaf. Being the oldest and largest private coffee and tea retailer in the USA, the company owns over 750 coffee shops mostly located in Arizona and 20 foreign countries all over the world serving over 1,000,000 weekly achieving 39% of Compounded Annual Growth Rate. Coffee Bean offers a variety of drinks and food. The companys core value is To create
a spirit within our company that inspires our team members to provide our customers a total quality experience: quality of product, service and environment.

International Coffee & Tea, LLC possess two main brands which are The Coffee Bean & Tea Leaf and Ice Blended. The prior one is also applied on numerous products such as The Coffee Bean Gift Cards, equipments and their single serve beverage system the CBTL. The Coffee Bean & Tea Leaf Product Detail The Coffee Bean & Tea Leaf was founded in 1963 by Herbert B. Hyman the father of gourmet coffee in California who dedicated to finding and serving the best coffee and tea in the world. Followed his dedication, for more than 40 years The Coffee Bean & Tea Leaf have tried to find the finest and rarest premium coffee and tea leaf, grow them in the most trusted farms to provide the best hand-picked tea and coffee of the world. On a daily basis the coffee are roasted by a manual European method and packed using state-of-the-art
equipment for shipment before freshly delivered to the stores. This complex process proves the fact that only the finest coffee beans can make their way to the cup of customers. Coffee Bean Vietnam Entering the new market of Vietnam since 2008, The Coffee Bean & Tea Leaf now has four stores all located in the center of Ho Chi Minh City the countrys largest economic center. As a result of economic development and immigration, the demand for high class drinks increased

rapidly through the past years. The arrival of Coffee Bean offers a new experience for the customers satisfying even the toughest one. Objective Since the Coffee Bean and Tea leaf has just arrived in the market of Vietnam since 2008, the brand is still new to Vietnam customers. Hence the market share of Coffee Bean in this new market is rather low compared to their competitors such as Highland and Trung Nguyen coffee which have been penetrating this market from long before. In order for the brand to be well-known to customers the company objective is set to increase their market share by 15% within the year 2011.

Current Market Situation MICROENVIRONMENT

+ The Company :
Top management
Sunny Sassoon Executive Chairman of the Management Board

Sunny Sassoon took charge of the position of Chief Executive Officer at International Coffee & Tea, LLC on December 19, 1998. He held the leading role in the development of the companys plan. As a result, the number of stores increased from 30 to 600 stores from 1998 to 2007. In 2008, Mr. Sassoon changed roles to Executive Chairman, since then he focuses on developing the companys strategic business plan. Mel Elias Chief Executive Officer & President Since 1999, Mel has been importantly involved in the strategic positioning and dynamic expansion of The Coffee Bean & Tea Leaf (the Company), helping to lead the growth of the company from 60 to over 750 stores around the world. He is now, as the President, responsible for strategy setting and day-to-day operations of this global brand and business.
Terry Mansky Chief Administrative Officer, Senior Vice President and General Counsel

Terry takes the responsibility for the Company's legal, human resource, real estate and global supply chain initiatives and keeps an active role in the Company's overall leadership since 2004. At the same time, he is also the Companys General Counsel.
Bob Kaufman Vice President of Business Development Paul Balzer Vice President of Supply Chain

Coralie Calvet Lewis Vice President of Finance

Mark Lindstrom Vice President of Operations Tom Clemente Vice President of Specialty Sales Diane Kuyoomjian Vice President of Marketing

John "Jay" Anthony Isais Senior Director of Coffee, Roasting, and Manufacturing

Debbie Sassoon Director of Product Innovation

David De Candia Director of Tea

Finance
Revenue 2003: $114.3 million 2006: $179.5 million 2009: $195.0 million Employees 2007: 3660 employees 2009: 5000 employees

+ Suppliers : The Coffee Bean and Tea Leaf is procuring fresh green coffee
beans from over 16 countries around the world to manufacture all of our coffee product lines sold at our global chains coffee shops, including 4 locations inVietnam. (The Company is not buying coffee beans from local growing regions of Vietnam due to the dissatisfied quality of this ingredient.)

+ Intermediaries : + Customers : + Competitors :

Highlands Coffee: founded in 1998 with packaged coffee, opened the first coffee shop in 2002, works with the finest Grade A beans in the country, now has over 40 shops in Vietnam. Gloria Jeans Coffees: sine 1979, 100% Australian, over 750 stores in 30 countries, 5 located in HCMC. Trung Nguyen Coffee: since 1996, using pure coffee beans from Vietnamese growing regions, owns more than 1000 company owned or franchised coffee shops in 43 countries, as well as distributors in Asia, North America, Europe and now, Australia.

+ Publics :

MACROENVIRONMENT
+ Demographic :The median age of Vietnamese is estimated 27.8 years in
2011( CIA World Factbook). This would be an advantage if The Coffee Bean target to the medium-aged market. Moreover, English is increasingly favored in Vietnam, so aside from Vietnamese, The Coffee Bean can use English.

+ Economic : In the recent years the economic growth of Vietnam especially in

Ho Chi Minh City ( HCMC ) has been increasing rapidly, in fact the GDP of HCMC reached 11.8% to VND414,068 billion in 2010. As a result, the living standard of its people especially the middle class has been raising through the last few years which leads to an increase in the demands for higher quality of goods and services.

+ Natural :
Coffee Bean and Tea Leaf purchases coffee from several countries in three regions:

Latin America, the Pacific and East Africa, including Costa Rica, Columbia, Ethiopia and Papua New Guinea. Besides, they also buy tea from Sri Lanka, Kenya, India, Thailand,, China, Taiwan and Japan. However, these countries have to face environmental problems that can negatively affect the quality of the products.
Coffee: Costa Rica: At the beginning of raining season, floods are common. This is the result from deforestation. Moreover, fertilizer and pestiside have polluted water and soil. Colombia: Despite receiving adequate rainfall, droughts are common. Ethiopia: Water shortage is common in some areas during the dry season. Papua New Guinea: Water is polluted with sewage. Moreover, water supply is threaten by global warming Tea: Sri Lanka: Air pollution from industry and vehicles is causing negative effects to environment. Soil erosion and reduction in water flow are happening, which damage the Sri Lanka'a agriculture. Nation's water is polluted with untreated sewage. Kenya: Drought and desertification are threatening productive argriculture lands. Water pollution from urban and industry waste is also a major environmental problem. Thailand: The level of air pollution is increasing due to the growth of industry and vehicles. Water pollution is also a serious environmental problem. India: Cyclones and annual floods are common. The increasing in atmospheric temperature is causing negative effects to argriculture. Many rivers in India are heavily polluted, which lead to the reduction in water supply. Fertilizers and pestisides are the main causes of land pollution.

China: Pollution is now a serious problem that China has to suffer. Climate change due to global warming has damaged the environment. A large amount of untreated sewage generated from industry has been pour into rivers, which causes water pollution. Droughs and floods are also the big environmental issues. Taiwan: The sources of water are being polluted. Soil erosion happens in many places. At the middle and lower altitudes, floods are common. Japan: Global warming, which leads to climate changes, is a current major environmental issue in Japan. Moreover, this country has to suffer natural disasters such as earthquake, volcano eruption and tsunami

+ Technological :
There are 24,269,083 Internet users as of June, 2010, 27.1% of the population, according to ITU.

And 23 percent used ATM cards (The market survey released by Nielsen in August 2010).

+ Political :
In many countries, the Government buys a lot of coffee and tea from farmers to control different markets. This is to stablilize the price of coffee and tea and the balance between supply and demand. The Government also has adopted plans of providing rescue aid to support farmers when weather is not favourable. Moreover, farmers sometimes stand together and raise their voices when their interests are damaged.

+ Cultural : The consumption of coffee in Vietnam is small compared to its enormous export.
However, there's still a potential for developing the coffee market because coffee has become part of the traditional beverage of the country. (Coffee Culture, Destinations and tourism, L Jolliffe - 2010)

SWOT ANALYSIS
POSITIVE Opportunity - High economic growth leads to improvements in living standards. NEGATIVE - Young population which is the main target. NEGATIVE Threat - Various competitors such as Highlands coffee, Gloria Jeans coffee and Trung Nguyen coffee. - Many people do not have time to spend at the shops -Traditional Vietnamese coffee. Weakness - Due to the complexity in producing, the prices of coffee bean are higher than competitors

Strength - Coffee are being growth in a complex way to provide the best coffee possible/ INTERNAL - Good quality of workforce. -High reputation and worldwide recognition. - Extensive selection of coffees and teas.

SWOT MATRIX
Strength Weakness Opportunity Threat

Segmentation
Geographic:
Region: Ho Chi Minh City

City size: Ho Chi Minh City is the most crowded city of Vietnam with approximately 8 million people. Density: Urban

Demographic:
Age: Coffee Bean is aiming to various ages however it is most suitable for working people which is mostly in the age of 20 to 55

Young people under the legal drinking age are one of the fastest-growing segments of the coffee drinking market. Coffeehouses are obviously their first choice when a place is needed to gather friends. Besides, entertainment on weekend nights draws a young group of enthusiastic customers. The surge in interest in coffee drinking among young people assures a diverse, receptive, sophisticated customer base now and in the future. Older adults also enjoy the fact that for the relatively modest price of a cup of coffee and snack, they can meet with their friends, relax or work. Instead of going to a bar and paying for an alcoholic drink or a restaurant where a meal usually comes with a hefty price tag, the coffeehouse is an intimate yet inexpensive venue. Gender: Male and Female Income: as the price of Coffee Bean is rather expensive, it is suitable for people with high level of income

Psychographic
Lifestyles: many hard-working, fast-paced white-collars consider a stop at their local coffeehouse a necessary part of their day. Moreover, coffeehouse provide calm, inviting environment for people to socialize, relax or catch up on work. Social class: as the ages and the income sugggested, the social class segment of coffee bean are working people or people from upper middle class and higher.

Behavioral

Market Targeting
Differentiated marketing is mainly used as the targeting strategy for the Company. The reason for choosing this strategy is that the firm's resources is vast (ingredients taken from 16 countries in the world), we have various product lines, product life cycle stage is maturity. The most important thing is that our competitors are also using this strategy so it makes sense when we apply differentiated marketing for The Coffee Bean and Tea Leaf. Socially responsible target marketing is highly needed for the company, which not only serve the interests of the company but also the interests of those who are targeted. Specialty Drinks Black coffee isn't for everybody. As a result, Coffee Bean have formulated drinks that appeal to other tastes. For example, coffee, specifically espresso, can be mixed with flavored syrups, sugars and powders to create drinks such as the white chocolate mocha or caramel latte that appeal to people who are looking for a sweeter drink. For these particular trends, we have in our menu Espresso lines (Espresso, Espresso

Macchiato, Americano, Caramel Latte, Cafe Latte, Capuchino). Kids Drinks Even kids are partaking in this growing industry. Cold, blended beverages are extremely popular with children. There is normally more sugar and less coffee in blended beverages, which makes the caffeine level a little more tolerable for this younger generation of coffee drinkers. Cold blended beverages are made by blending a cold coffee base, dairy products such as milk or cream, sugar and ice. The result is a thick, frothy drink that is tasty and sweet. Therefore we have the Coffee Ice Blended Drinks product lines (Black Forest, Caramel, Halzenut, Mocha, Vanilla, White Chocolate). Coffee Alternatives The coffee market also provides alternatives for people who cannot have caffeine because of health problems and for people who just don't prefer the coffee taste. Decaf is often available for those who love the taste of coffee but cannot handle caffeine for one reason or another. Examples: Fru-Tea Ice Blended Drinks ( Mucho Mango, Lemon Zest) and Coffee-Free Ice Blended Drinks (Pure Chocolate Ice Blended, Pure Vanilla Ice Blended)

Differentiation and Positioning

Positioning Strategy Price More Same Less More More for More More for the Same More for Less Same Less Benefits

Product Differentiation The Coffee Bean and Tea Leaf claim that their coffee and tea are differentiated from others. Both their input and output have the most exclusive quality. The Coffee Bean and Tea Leaf has been searching for the best harvests from Sumatra to Costa Rica and only accepting the highest grades of green coffee and full tea leaf. They produce the top 1% of the specialty coffees and fine teas for the drink. Customers can discover their range of exceptional coffees with 28 distinctive special blends and the rarest teas in the world chosen from their 25 assorted varies. Moreover, their Ice Blended is the smoothest, tastiest and definitely the most delicious drink in the world. Service Differentiation The website of The Coffee Bean and Tea Leaf Vietnam is designed to bring convenience to customers by providing them the whole food, drink menu and home delivery service. Now the customers not only can enjoy their coffee at home but also make their own product by The coffee bean and tea leaf packed coffee and tea. Besides, the website has been frequently updated with news, promotion of new products. The Coffee Bean provides totally free wi-fi. Customers can easily access the internet by entering 5-digit password that showed on the left corner of the tv screen in the customer lounge. Especially, having troubles with the wifi, customers will be helped immediately

by the staff. Moreover, The Coffee Bean may provide free delivery coffee by making a phone call or simply order on its website. There will be 24/7 online staff to bring u drinks every time and every where Channel Differentiation The Coffee Bean and Tea Leaf have 6 stores in District 1 and 3 in Ho Chi Minh City. Another new store in District 1 will soon go in business next month. These stores are located at high traffic places, easily attracting customers. Moreover, The Coffee Bean and Tea Leaf also use Youtube to introduce their services and create their own page in social networks such as Facebook, Twitter and ZingMe. People Differentiation While other companies' franchises are single units, The coffee bean and tea leaf's senior manager collaborate with other local managers to exchange experience, knowledge about culture and potential customers, including Vietnam. Then each outlet of The Coffee Bean & Tea Leaf can lead and control by the manager who is suitable enough and have knowledge and experience about the region. Then they always have the greatest ability to find suitable adaptable strategies. In additional, special training is provided to staff to be more forward in greeting and helping the customers. Staff inThe Cofee Bean are professionally trained to provide all customers' need for having a good drink and time in The Coffee Bean. For example, staff are trained to make best drink for customers. Moreover, They are trained t be able to mend every problem relevant to internet accessability. Image Differentiation The brand name The Coffee Bean and Tea Leaf was found in September 1963 in California. For years, The Coffee Bean and Tea Leaf have asserted substantial influence in the world market. Today, they have hundred stores at different locations around the world. However, this is still a new brand name in Vietnam. They have just entered the Vietnamese market for a few years.

PRODUCT STRATEGY
The core benefit that customers seek at The Coffee Bean and Tea Leaf is basically a high quality drink. However, by buying the drinks, customers spend time at our stores looking for a space to relax.The Coffee Bean and Tea Leaf offers free delivery as an augmented product. Customers can enjoy authentic cups of coffee at home for the premium price at home. Customers coming to The Coffee Bean expect the warmth

Reference
2006 the Coffee Bean & Tea Leaf, About Us, viewed 6 March 2010, <http://www.coffeebean.com.vn/VN/about_us.aspx>

2011 International Coffee & Tea, LLC, About Us, viewed 6 March 2010, <http://coffeebean.com/About-Us-C30.aspx>