Starbucks makes noisy debut, Trung Nguyên gets boisterous, Highlands keeps quiet

highlandsCuriosity has been raised when Highlands Coffee still keeps quiet, while the US Starbucks has entered Việt Nam with noisy media campaigns and Trung Nguyên has triggered a war of words with the US giant.

One year ago, the third-party merger & acquisition (M&A) deal among Highlands Coffee – Phở 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 Nguyên 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 Nguyên, 90 percent, and The Coffee Bean 86.67 percent.

Nguyễn Đức Sơn, 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 Nguyên’s Đặng Lê Nguyên Vũ has run a noisy communication media to fight against the US giant Starbucks.

Vũ appeared on foreign and domestic newspapers in the interviews given to the newspapers, saying that the US Starbucks cannot frighten Trung Nguyên, because Starbucks would not be able to conquer the Vietnamese hearts, who have their specific “coffee culture.”

Vũ also said that Starbucks just sells the “coffee flavored water,” not real coffee.

Unlike Trung Nguyên, 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 Nguyên, because it has just set its foot in Việt Nam.

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 Nguyên 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.

Source: Businesspeople Weekly

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