ANALYSIS

INTRODUCTION

SITUATION ANALYSIS

COMPANY DESCRIPTION
Lotte Co. was originally established in June 1948 in Japan with the
aim to provide an internationalization and diversification products
and services to customers (Lotte Co. Ltd. 2012). In 1967, Lotte Co.
Ltd. expanded their market to Korea, established Lotte Group to
offer a modernized food industry and a high-standard lifestyle to
their customers (Lotte Group 2012). Nowadays, Lotte has grown into a global company with
offices in more than 50 countries worldwide, various sectors and approximately 4,700
employees (Lotte Co. Ltd. 2012). Food and Beverage is still the forte of Lotte Group and has
a stable development in the global market especially Japan, China, Russia and Vietnam. In
2011, Lotte had earned 522.0 billion in total (Lotte Co. Ltd. 2012).
Lotte entered Vietnam market with their forte food and beverage. However, it is not until
December 2008 that Lotte started investing into Vietnamese market, with the establishment
of the first Lotte Mart in Ho Chi Minh City. In Vietnam, with KFC, Lotteria is the main player
in fast-food franchising business (Tuoi Tre 2012).
Lottes mission is to create high quality services and products contributing to an abundant
life for their customers through creativity exploration and challenge confrontation.
PRODUCT DESCRIPTION
According to Lotteria 2012, Lotteria is the leader in the Korean fast-
food industry with 550 billion won sales in 2009. Firstly appeared in
Vietnam in 1998, yet Lotteria is not popular till the entrance of
bulgogi burger in 2004 (Lotteria 2012). According to Tuoi Tre 2012,
Lotteria is the owners of more than 120 shops across the country,
aiming to open 140 stores by the end of 2012. Entering Vietnam market, as the similarity in
dining culture as well as Asian taste, Loterria Vietnam quickly attracts the taste of
Vietnamese by the outstanding flavour of modern Korean fast-food. With the stable
development and market share in Vietnam, Lotteria aims to become the 1
st
choice brand in
the near future (Lotteria 2012).
With strong growth of economy, consumers now prefer the
convenient and affordable food as their first option in their
hectic daily lifestyle. Realizing this rising demand, many fast-
food franchises have entered the young Vietnamese market
with the hope to offer consumers with more alternatives to
their dining options. They provide products for consumers with
suitable prizes and high availability. The two biggest fast-food franchises in Vietnam today
are KFC and Lotteria, with the total of more than 250 stores across the country (Tuoi Tre
News 2012)
With many diverse fast-food products, the main focus of Lotteria when entering Vietnam is still
hamburger, the forte of the franchise. However, due to the recent entrance of Burger King a well-
known brand for hamburger, Lotteria has decided to create a marketing campaign to promote and
sustain the position of Lotteria in the marketplace.
MARKETING ENVIRONMENTS

There are several components that have direct or indirect impacts on marketings management of
Lotteria; they help the company to build and maintain its strong relationships with the target
customers. To illustrate, micro environment and macro environment make up the marketing
environment.
Micro-environment

1. The Company
According to Lotte (2012), Lotteria was part of expansion of Lotte Group. Moreover, in Vietnam,
since Lotteria debuted in 1998, there are now 117 branches operating throughout the country and
nearly 50 branches in Ho Chi Minh city (Lotte 2012). Lotte Group is a strong corporation with the
aims of enhance consumers living standard, thus they have a strong based management and
business strategies. The Lotte Group includes the top management, finance, R&D, purchase
operation and accounting that can affect marketing. For instance, the marketing budget can be
controlled by the finance department; the production team can plan to create the suitable products
and it leads to prevent potential customers turning to competitors products. Furthermore, because
marketing department helps build and maintain strong relationship with its customer, Lotteria grows
rapidly in the past few years.
2. Suppliers
Suppliers are an important factor to the companys customer value system. The suppliers provide
needed sources for Lotteria such as drinks manufactories (Pepsi, Vinamilk), chicken and vegetables
from farmers. Moreover, controlling the partnership with them can help to bring the great quality of
products as well as service. Rising supply cost can affect the marketing and the sales volume so the
marketing managers need to monitor the price trends, also watch supply availability and build good
long term relationship with them.
3. Publics
Media Public: Promotions of Lotteria on the Internet, magazines and television. They generate and
affect the public opinions and are a great channel to increase the awareness of the consumers.
Internal Public: They are employees of Lotteria. They will get bonuses depending on their
performances while working. They can be the opinion leaders among the general public and
generate opinions about the working environment as well as product and service of Lotteria, which
actually would bring strong reputation for Lotteria in the public. Therefore, Lotteria should provide
good working environment.
General Public: Feedbacks are always taken from the customers in order to know about the attitude
of the public. Because the general publics attitude and behaviors toward product and activities may
affects its reputation and sales.
4. Customers
One of the important goals of any marketing strategy is to identify and achieve the needs of the
customer. Lotteria can ensure greater customer satisfaction by considering customer importance
and by that, it increases the long-term goal of the business. If Lotteria cannot develop customer
loyalty and satisfaction, they could lose the customers quickly to the strong competitors. Lotteria has
a large group of customers, including:
Customer Markets: Teenagers and young adults, who love fast-food services and the taste of Korea
food, are the main target customers that Lotteria aims to. They are the one who directly bring profits
for the company by using our products and service; therefore, Lotteria should always cares about
the demand of those customers and satisfy their needs with the best product and service.
International Customers: Lotteria has more than 140 branches in the Southeast Asian nation so they
have international customers in many countries. The large size of International markets shows the
strong ability of market penetration of the company.
5. Competitors
Vietnam - a developing country with a young population is a promising market for fast food industry.
Today, people concentrate on saving their time to find place and eat good food. As the result, fast
food market in Vietnam is highly competitive since numerous fast food chains have been developing
in Vietnam in order to satisfy customers needs.
Direct Competitors:
KFC is the biggest competitor of Lotteria in
Vietnam. KFC has three main products: chicken
meals, hamburgers and snacks. There are about
100 shops opening in big cities and KFC has been
leading in fast food market today with more than
60% of market share in Vietnam branches. It can
affect Lotteria on their share in the market.


Other direct competitors: Carl Jrs, Burger King, Jollibee. Especially Burger King, which has entered
Vietnam market in 2012, would soon become strong competitor of Lotteria in term of selling
burgers.
Indirect Competitors: Pizza Hut, Domino Pizza, King BBQ, Subway and other restaurants.
Vietnam market with the increasing number of middle class has become a target market for
franchising brands. In addition, the market conditions in Vietnam are more favorable than before.
As fast food chains are growing rapidly, Lotteria must provide greater customer values in order to
adapt to the needs of target customers. In addition, they can gain advantages by positioning their
offerings in the minds of customers.
6. Marketing Intermediaries
They are the firms that help the company to sell, promote or make-available a good or service. In
Lotteria, the goods and services are provided to the customers needs and wants immediately on
their outlets. There are marketing service agencies who help to research the market to build
marketing strategies and execute promotional materials in order to branding and promote the
products relationship with current consumers. Moreover, physical distribution firms are
transportation firms who help delivering the materials for the Lotteria shops daily and maintain the
good condition of food and other materials on the way. They are the ones who corporate with
Lotteria as partners to deliver the best products and services to customers; therefore, Lotteria
should corporate with these intermediaries to create common values among each other and with
the customers.
Macro-environment

1. Demographic:
According to CIA World Factbook, the population of Vietnam has reached more than 91 million in
July 2012 (CIA 2012). With the labor generation occupied the majority of the population, Vietnam is
considered a country with young population (Tong Cuc Thong Ke 2012). This also means that the
spending power of Vietnamese is going to increase, and as the young generation is living in a faster
pace, Vietnam appears to be a very promising market to expand products such as Lotterias. Along
with the rising trend in Internet usage, Generation Y and Z are the 2 dominant groups in Vietnamese
population (Cimigo NetCitizens 2012). Lotteria can now send the messages in a more cost efficient
way, through a channel that is very actively and widely used.
In 2009, there were more than 26 million people living in urban area (Tong Cuc Thong Ke 2012).
There is also an increasing trend in people moving from rural areas to urban areas. This results in the
expansion economic centers in Vietnam, especially in Hanoi and Ho Chi Minh City. As more and more
people inhabit in big cities, the demand is also increased.
2. Economic:
In 2011, Vietnam GDP reached 1,300 USD per capita (Tuoi Tre 2011). That was an increase of 5.89%
in compare to the year 2010 (VnExpress 2011). Accordingly, though slow, the buying power of
Vietnamese consumers is growing, which reveals more opportunities for the brand to expand itself
in the market.
At the moment, the consumer spending patterns is more about instant products, focusing on
convenience and simplicity of usage (VnEconomy 2009). There is also an expecting trend of the
consumer focusing more and more on health issues (Viet Bao 2006). Lotteria has many products that
suits very well with those trends, not to mention that the brand also has an advantage of bringing
the Asian taste in a Western dish.
3. Natural environment:
Vietnamese natural environment is being polluted quite heavily. Annually, there are an estimated
120,000 150,000 hectare of forest being cut down (Lan Huong, 2008). Economic development in
Vietnam, though had brought benefits, is also causing great pressure to the environment (The World
Bank 2011). Moreover, the increasing number of vehicles in urban areas also accounted for the
polluted atmosphere in big cities.
At the moment, Lotteria is paying attention to the environmental issues, specifically by using
disposable packaging that mainly made from paper. However, they are still using plastic bags to
contain the bring-to-go food, which is considered harmful to the environment and may harm the
reputation of Loteria as a brand with strong environment and safety food management (Lotte 2012).
4. Technological
More and more people now have access to the Internet, especially in urban areas. According to
Cimigo (2012), there are around 35 million Internet users in 2011. The Internet penetration rate in
all cities reached 58% in 2011 (Cimigo NetCitizens 2012). With the appearance of modern
technologies like tablet computers, smart phones and 3G mobile service, users can get access to the
Internet more easily and more frequently. Lotteria is now having more options in communication
channels which work faster and more effectively to distribute the messages. Specifically, Lotteria has
been constructing a company website in Vietnam and enable customers to order online. However,
the website has not been driven stably, which affects the sales of delivery service and
communication with customers. Lotteria should quickly develop the website more effectively and
stably in the future.
5. Political
Since the country has joined WTO in 2007, Vietnamese government is more opened to foreign
investment (WTO 2012). The market also opens to different brands from overseas and therefore it is
considered an opportunity for Lotteria to expand its market in Vietnam.
6. Cultural
Vietnamese people highly value the concept of face, which is defined by social status, financial
condition or more specifically, the things that one owns, buys or uses. As life is getting more and
more fast-paced, fast food is one of the developing trends among the youth.
There is also a dominating Korean lifestyle affecting the young generation of Vietnamese. Since
Lotteria is a brand originated from Korea, there is a high chance that the number of people having
positive attitudes toward Lotteria will increase.

SWOT ANALYSIS

Strength Weakness
- Lotteria menu contain similar flavor to the
taste of Vietnamese customers, which cause
the easy adaptability of customers to the
food.
- Stores are available in almost every center of
urban areas across the country, which helps
Lotteria maintains the top position in market
share.
- Reasonable cost, cheaper than other
competitors, Lotteria attracts the variety of
target segments and owns high market share
- Although Lotteria is fast-food restaurant but
sometime, the customer have to wait a long-
time for their orders. Therefore, Lotteria
should improve its service more fast and
convenient.
- Although hamburgers are main menu which
make Lotteria stand-out; there is few
promotion for this products. Hence, Lotteria
should develop continual long-term
promotion for burger product category.

- Lotteria keep its high food hygiene and
safety, which create a good image in
customers mind as a environment-friendly
service and product.
- Lotteria offers home delivery service, that
offer more convenient service for customers
Opportunity Threat
- Young people in Vietnam are favorable of
Korean lifestyle, varied from food, personal
styles to music, which open chance for
Lotteria to adapt more Korean styles and
tastes in Vietnam with little difficulty.
- The income of Vietnamese households are
increasing which maybe lead to the
increasing in buying power. (research back-
up)
- The dominance of young generation in
Vietnam opens more chance for Lotteria to
extend their market share in the future.
- The lack of food hygiene and safety in
Vietnamese traditional snack food stores/
street vendors food will bring customers
more preference of fast-food product like
Lotteria.

- Many competitors such as KFC, Jollie Bee,
Carls Jr., etc. shares the same market in the
industry. Hence, Lotteria have to push their
marketing plan in order to keep loyal
customers and gain market share.
- Fast-food is still considered as unhealthy
food in customers perception. Therefore,
Lotteria should develop more positive image
and feeling about Lotterias fast-food product
toward customers.

STP
Segmentation
Children Teenagers Young adults Adults
Geographic
Age 5 to 12 years old 12-17 18-30 Under 35
Country They are born and live in Vietnam
They can be the expats who live in Vietnam, mostly from Asia areas, Europe and America living
in Vietnam
Density
Demographi
c
They live in the urban areas such as HCMC, Hanoi, Hai Phong, Da Nang, Hue, etc. Loteria shops
mostly are located in the centre of city or neighbourhood
Demographic
Gender Male & Female
Family size 1, 1-2 1-2, 3-4, 5+
Family life
Cycle
Young, single or
divorced
Young, married
without children
Young, married with
children
Married with children
Married without
children
Divorced/Single with
children
Divorced without
children
Single
Income Middle to high
allowance
Middle to high
allowance
Middle to high wages
or allowance
Middle to high wages
Occupation Middle to highly paid
jobs
College or university
students
White collar workers
Middle to Highly paid
jobs
White collar workers

Education Kid garden, primary
school
Secondary to high
school
High school graduated,
Undergraduate,
Graduated,
High school graduated,
Undergraduate,
Graduated
Generation

Z (born after 1994) Z (born after 1994) Y (1977-1994) Y (1977-1994)
Nationality Mostly Vietnamese, Asian (Korean, Japanese, Chinese, Taiwanese, Thailand, Singaporean, etc.)
and European, American
Psychogrpahic
Social Class Middle class, upper class and high class
Lifestyle Explore the new
things
Active and trendy
with Korean wave
Modern, active, busy
with work and study
Modern, active, busy
with work, study
Take care of
housework, love their
children
Personality Fun, curious Fun, socialized Open-minded,
socialized and eager to
try new things
Open-minded,
socialized and eager to
try new things
Behavioral
Occasion Hanging out with
family
Hanging out with
family and friends

Hanging out with
family and friends
Busy with working and
studying schedule and
need to order fast-food
Hanging out with
family and friends
Busy with working and
studying schedule and
need to order fast-
food
Benefit
sought
- Delicious with
enough
amount of
food: Children
seek for
delicious and
easy to eat
food with small
amount of food
to digest.
- Also, they
would be
attracted by
fun, colourful
atmosphere.
- Trendy with
Korean wave:
they are
affected by
Korean music
and Korean
culture;
therefore, they
want to seek for
Korean product
and service,
including food.
- Also they seek
for large space
and crowd
atmosphere to
have fun with
friends.
- Young adults seek
for high quality
products with
reasonable price
due to the limited
in living expenses.
- They are busy with
work and study, so
they may seek for
convenient service
like fast-food and
home delivery.
- They may find a
comfortable and
fast service store
when hanging out
and socializing
with friends as well
as family.
- They seek for high
quality products.
- They seek for
warm and friendly
environment for
their family
gathering
- They are busy with
work so they may
seek for
convenient service
like fast-food and
home delivery.
User status First time users
who usually are
taken out by their
parents and fed
new food and try
new things.
Gradually they can
be regular
customers who are
familiar with and
love our brand in
the future.
Regular users who
are already familiar
with fast-food
service and willing to
try new products.
Regular users who are
already familiar with
and find convenient
using fast-food service;
also they are willing to
try out the new
products.
Regular users who are
already familiar with
and find convenient
using fast-food service.
Non-users: they may
not use fast-food but
they buy it for their
family or children
Loyalty
Status
- Mostly they are familiar and stay loyal with Lotteria due to the suitable taste and good
service
Attitude
toward
product
- Positive
attitude
toward to
childrens
menu
- May indifferent
to try the new
food but still
curious
- Positive attitude
toward Korean
culture (music,
service) and
Korean food
- Positive attitude
toward discount
and special
deals.
- Positive attitude
toward discount
and special deals.
- Positive attitude
toward changing in
menu.
- May have different
attitudes toward
the fast-food
service and the
combination of
Korean taste and
Western dining
culture
- Positive attitude
toward discount
and special deals.
- Positive attitude
toward changing in
menu.
- May be indifferent
with western
dining culture but
still accept to use
sometimes
Targeting
a. Targeting
Variables
Based on the segmentation table above, Lottetia is currently targeting
various segments that are aged under 35.
Segment size and
growth
Vietnam is a country with a very high inhabitancy, especially in major cities
like Ho Chi Minh, Ha Noi, Da Nang, etc. People living in these places usually
have a tight schedule; thus they dont have a lot of time to have proper
meals and much rather have fast food. Moreover, big cities in Vietnam
welcome a lot of international cultures so citizens are likely active and
open-minded. In addition to this, a Korean food brand like Lotteria will
have a big opportunity to gain attention, as Vietnamese people are usually
foreign brand oriented.
Structural
attractiveness
There are many strong competitors in the market such as KFC, Jolibee,
Pizza Hut, Dominos Pizza, etc. Also, Vietnam Investment Review (2012)
stated that KFC is the main competitor in fast food business of Lotteria
while it occupies 60% of the fried chicken market share with the
population of 125 restaurants in all over Vietnam. However, Lotteria is well
known for its burgers where it takes up to 60-70 percent of the burger
market share.
Plus, substitute products are varied such as street foods; since people can
also have quick and cheaper food that are easily found right out on the
streets. However, the Korean waves have had a great effect on the young
generation in Vietnam; so thanks to that, Lotteria are more able to expand
their business in this country.
b. Profile of target markets:
According to the General Statistics Office of Vietnam (2010), the figures on the total population
of Vietnamese urban areas are 27,888,200 and its annual growth equals 10,3%, which is quite
densely populated.
Though knowing the target of the fast food industry covers most of the nation. Since fast food
is considered to be a tad more expensive, urban and affluent areas will be focused on more.
Individuals in these locations would likely have a high-income occupation and could be single,
divorced, married with or without children. Because the fast food industry is global, nationalities of
all kinds will be focused on.
These target markets tend to be active and modern, therefore, fast food will work well with
individuals who are busy with work and study. Also, people who are open-minded and social would
make good aims. Lotteria would be good for occasions when families get together or if busy
individuals who spend time on work and study want to grab to seek for convenient service like fast
food and home delivery. According to ProGuide (2011), Lotteria would be a good contender in
bringing international tastes to open-minded Vietnamese people who like to try new things in
addition to special deals and discounts
c. Targeting strategy:
Lotteria are producing many kinds of different products with a variety of tastes and flavors
such as burgers, chickens, rice, salads, milkshakes, etc. Thus, having many products that aim to
satisfy many segments at the same time considered to be differentiated marketing strategy (Kotler
et al. 2009).
Positioning
a. Competitive advantages
Differentiating itself from other competitors, Lotteria dominates the fast-food market with three
main competitive advantages.
Product differentiation: Lotteria came from South Korean based company, an Asian country,
thus Lotterias products have quite similar flavor to the taste of Vietnamese customers. With
good adaptability to Vietnamese taste, Lotteria set itself apart from the competition as a
company offers high quality food with a touch of Vietnamese taste and reasonable cost.
Service differentiation: Lotterias stores are available in almost every city across the
country, especially in the metropolitans such as Hanoi, Ho Chi Minh, Hai Phong, Da Nang and
Hue. Customers can easily find the stores available in their neighborhood or workplace. In
addition, these stores open 12 to 14 hours a day so that customers can simply get Lotterias
food anytime they want to. Also, home delivery service brings more convenience for
customers.
Image differentiation: Lotteria highly suitable with the recent Korean wave among young
people in Vietnam who are favorable of Korean lifestyle, varied from food, personal styles to
music. Being the first and only Korean based fast-food franchise, Lotteria is well fitted
with the recent trends among Vietnamese youth.
b. Overall positioning strategy


Price
More The same Less
Benefits More More for more More for the same More for less
The same The same for less
Less Less for much less

c. Positioning Map


MAKETING MIX STRATEGIES
Product
1. Product Classifications
Lotteria products are convenience products which customers can purchase without much effort and
consideration.
2. Levels of product
Core benefits: Fast food - customers can be satisfied by offering them fast service food with tasty
meal
Actual product :
Brand name: Lotteria takes its name from its parent company which is Lotte multinational
corporation in South Korea and Japan.
Design : variety of choices, main colors using are red, orange and white. Lotteria uses these
colors because red makes people hungry and aslo attracts attention to customers.
Packaging: Lotteria products are packed in recycled materials implemented by Lotteria
campaign to reduce the use of disposable packaging harmful to the environment.
Feature: high quality products with clean and pleasant restaurants in quick and courteous
service. It is convenient for customers to offer quick meals for busy lifestyles.
Quality: Made from fresh ingredients, Lotteria uses high quality chicken meat and their
desserts are made from only the finest ingredients include Ice Cream Sundaes, Ice Flakes.
Lotteria products can please the taste of customers by their freshness; the food is always
freshly made and there are strict health and safety regulation the ingredients.

Augmented product:
Services: Customer-oriented care, speedy service. Customers will not take a long time to get the
food. There is nothing better to have a ready meal in todays fast paced life. Moreover, when
customers come to Lotteria stores, the staff are always smile and give customers welcome message
Welcome to Lotteria
Additional Services: Internet connection free in stores that can help customers not only to enjoy
their meal but also they can read online newspaper of chat with their friends or even continue their
work
3. Product Life-Cycle Strategies
Lotteria is in the maturity stage since its sales continue to increase in this stage. The brand
awareness is strong; however, competing products are very similar at this point, creating a difficulty
in differentiating the product.
4. Brand Development Strategies

Lotteria is now using line extension, in which Lotteria keeps developing new products to add on
their product categories. The latest product that Lotteria provides to its customers is Finger Chicken.
The flavor is the same but the size is different. However, customers are willing to try them to see the
differences. Moreover, to make the products familiar with Vietnamese customers, Lotteria expands
the menu with Rice and Soup using with the chicken. Additionally, rice burger is currently added to
the menu with Rice Bulgogi Value and Rice Chicken Value. Finally, hamburgers ingredients are
adjusted to satisfy customers such as double cheese, double bulgogi.
Price
With the existence of international brands such as KFC, JollieBee and the new comer Burger King, it
is undeniable that the fast-food is a fast booming market. Hence in order to compete in such
constantly changing and aggressive marketplace, Lotteria has been using some specific pricing
strategy to differentiate itself from its competitors.
Companys pricing Strategies
1. Current Price
With various products, ranging from main dish, side dish to deserts and snacks, the current price for
Lotteria is from 7,000 vnd up to 260,000 vnd, depending on different products.
2. New-product pricing strategies
Since its first entrance, realizing Vietnamese consumers are highly price sensitive, Lotteria uses
market penetration pricing by setting its products at a relatively low price compared with its
competitors, in order to penetrate the market quickly by attracting a large number of buyers.
3. Product Mix Pricing Strategies
Product bundle pricing
The brand also uses product bundle pricing as a pricing strategies in order to encourage the
purchase amongst potential consumers. Lotteria offers many combos, including a main dish
(Chicken, rice or burger) with a side dish and a beverage, for its customers who are highly price
sensitive. For any combos, Lotterias customers can save up to 12,000 VND respectively. This
strategy is commonly used by Lotteria, as well as its competitors in the fast-food industry.
Product line pricing
Lotteria offers many product lines for its customers. The 4 main product lines of Lotteria are
beverage, chicken, rice and burger. Nevertheless, Lotteria also provides various snacks and ice-
creams. Within each product line, the prices of products are also varied. This strategy aims to offer
customers the variety of choices.
For instance: For beverage, Lotterias products are from 14,000VND to 22,000VND. For chicken fried,
the prices vary from 29,000VND to 260,000VND.
For more information, please see the Appendix.
4. Price-adjustment strategies
a. Discount
Quantity Discount: For Lotteria chicken combos, customers will have 2 options basing on the
number of chicken pieces that they would like to have. The more customers buy, the less they have
to pay. For instance: if they want to have 6 pieces soy bean chicken, they would have to pay
175,000VND. But if they want 9 pieces of soy bean chicken, they would have to pay 260,000VND.
This strategy helps encourage customers to buy more Lotterias products.
For detailed prices of all combos, please see the Appendix.
b. Segmented Pricing
Time Pricing: Lotteria uses segmented pricing, in particular time pricing as its price-
adjustment strategies. For each week day, Lotteria will offer a discount for a particular
product. Each week day, the discounted product will be different to the previous day.
Place
1. Marketing Channel:
Lotteria has been applying direct marketing channel by having products directly distributed from
stores to customers. This method helps controlling the consistency of messages; and therefore,
building a clearer brand image towards customers. However, this can cost a lot more than having
many intermediaries to help distributing the products.
2. Channel Organization:
a. Contractual Vertical marketing system
Lotteria Vietnam is an official franchise of Lotteria. However, it is not controlled and managed by
the parent company. Lotteria Vietnam only follows the core ingredients and recipes that provide by
Lotteria in order to remain the same production. According to Kotler et al. (2009), Lotteria Vietnam
is applying the service firm-sponsored retailer franchise system where it has to pay for the use of
Lotteria brand name while remains some regulations of the mother company.
b. Horizontal Marketing system
Figure 1: December Daily Buzz (Lotteria 2012)
At the moment, Lotteria has already had a number of business relationships with some big shopping
malls and supermarkets for example Co-op Mart, Maximart, Parkson, Vincom, etc. Through this
system, the company and its partners plan to achieve their objectives faster with the combination of
resources from both sides.
c. Hybrid Marketing system
Since Lotteria are having different channels of distribution for its products to get to the consumers,
they can utilize this opportunity to expand the distribution network to a larger scale, focusing on the
contractual marketing system. Specifically, they can open more restaurants in different districts to
the edge of the city such as district 2, Thu Duc, Phu Nhuan, etc. One of the reasons is that it helps
expanding their individual business, reaching more consumers and showing a clearer set of brand
personalities by not relying on the attractiveness of shopping malls or supermarkets. Another reason
is that since life is getting more and more fast-paced, the demand for instant products will rise.
Moreover, since the restaurants will not be located in the center of the city, the company can adjust
its budget in order to carry out the plan more comfortably.
3. Marketing Intermediaries:
Since fast food is considered as a convenience product, Lotteria is using intensive distribution with
the purpose of selling as many products as they can; therefore, the company can maximize profits.
However, from this technique, Lotteria also faces a major disadvantage, which is the difficulty in
differentiating the brand from other convenience products from the same category.
Promotion
Promotion is very important for Lotteria to build and maintain relationship with customers as well as
to promote their monthly updating products and special discounts. Currently, Lotteria use a lot of
promotion tools:
Promotion Tools Tactics
Advertising

Advertising is an important method of mass promotion which a single message
can reach a large number of people. This is a tool that has a power to convince,
to impress customers. Lotteria is now using :
Official Website: The main website of Lotteria (www.lotteria.vn) is used to
provide the menu of Lotteria and also give the addresses of any Lotteria branch
in Vietnam. However, the official website is not developed consistently, which
create the disruption in connection with our target customers, who usually look
for menu and may look for online ordering. This is a weakness of Lotteria
compared to KFC when they promote a lot in delivery service as a part of fast-
food service.
Newspapers/Magazines: Articles about monthly product promotions or discount
on popular magazines and newspaper such as Tiep Thi va Gia Dinh, Tuoi Tre, The
Gioi Van Hoa. It can attract multiple readers and it is a reputable way to
advertise and promote a specific image through print media.
In-store display: Banners and posters in store are used to promote new product,
promotions and monthly discounts with the images of products that look
delicious and colourful. This not only provides information to customers about
Lotteria products but also help encourage customers to come in store to buy
products.

Sale Promotion

Coupons: Lotteria is offering coupons to customers through the distribution of
coupon booklets. These will help the consumer to save some money when they
purchase Lotteria products.
Patronage rewards: When a customer regularly purchases Lotterias products,
they are given a VIP card that allows them to save 10% of every bill at Lotteria
later on.
Sweepstakes & Games: On Facebook page, Lotteria constantly holds contests to
encourage interactions among target customers. This attracts a lot of participants
as well as encourages store visits and consequently purchasing.
Public Relations Facebook page: Lotteria Facebook uses to broadcast any new promotion
campaign and menu of Lotteria frequenlty. This is a good way to spread
information on social network because Facebook is a good medium to interact
with customers. Lotteria has been using Facebook to create events that helps
increase visibility to the target customers. This channel also helps create more
interaction with customers compared to the website, especially easily reach and
communicate with our target customers who are savvies of social media.
Customers can raise their voice to express their opinions and feedback about
Lotteria products and services.

Personal Selling

Lotteria applies Territorial sales forces structure, which each sales team is
assigned to selected geographic areas and sell all the products of Lotteria.
Lotteria stores are located everywhere in Vietnam, encompassing from different
cities (Hanoi, Hai Phong, Da Nang, HCMC, Binh Duong, etc.) to separated districts
in each city. Since our target segments are living randomly in those urban areas,
territorial sale force structure help Lotteria reach as many target segments as
possible. Also, for each particular area, Lotteria can develop the different
promotion plan in order to fulfill the life-styles and taste of atmosphere and
dining music background of customers. For example, Lotteria in Phu My Hung
and District 7, which a lot of foreigners and high-class customers living, Lotteria
stores usually open the foreign music, which in other districts they open
Vietnamese music.

Direct Marketing

Online marketing: Business to consumer (B2C) online marketing is used by
Lotteria at the moment. Lotteria established an official website and official
Facebook fanpage which has menu available on a separate page for customers.
This helps customers to order Lotterias products via telephone for free delivery.


OBJECTIVES
With many diverse fast-food products, the main focus of Lotteria when entering Vietnam is
still hamburger, the forte of the franchise. However, due to the recent entrance of Burger
King a well-known brand in hamburger, Lotteria has decided to create a marketing
campaign to promote and sustain the position of Lotteria in the marketplace. For that aim, the
objectives of the marketing plan is:
Financial Objectives
To increase Lotterias sales in burger up 5% at the end of the campaign.
Organization Objectives
To maintain Lotterias position in fast-food industry, especially in burger market as
number 1 dominant player in the market share.
To build Lotterias image as an environmental friendly fast-food brand.
Marketing Objectives
To promote the Lotterias burger as well as its position in the market during the
campaign.
To promote Lotteria as the best-service fast-food brand in the marketplace that offers
healthy products.
To sustain the loyal customers of Lotteria during the campaign.
To develop a new type of burger for Lotteria.

RECOMMENDATIONS
MARKETING STRATEGIES
Target Market

Variables According to the set objectives, Lotteria should be focusing on 2 main
variables, which are teenagers and young adults (see segmentation
table above).
Segment size &
growth
Targeting citizens living in big cities such as Hanoi, HCMC, Da Nang, etc.
is a wise decision that needs to keep up. Moreover, the ability of
culture adaption in the cities is higher where there is a collection of
multicultural food brand operating there.
Structural
attractiveness
According to the target market analysis, KFC is still the biggest rival of
Lotteria where its operating more than 100 stores around Vietnam.
However, Lotteria still remains number 1 in the burger market share
where KFC can hardly compete.


a. Profile of target market
According to the General Statistics Office of Vietnam (2010), the figures on the total population of
Vietnamese urban areas are 27,888,200 and its annual growth equals 10,3%, which is quite densely
populated.
These target markets are modern, open-minded and busy with work or study; therefore, fast food
like Lotteria is perfect for their precious time. For teenagers, they are the ones who having good
reaction on Korean culture such as music, clothes and services. For young adults, they are sociable
but strict with their schedule. Thus, Lotteria is a good choice of providing good convenient products
with a small amount of time.
b. Targeting Strategy
As Lotteria should be concentrating on 2 distinctive target markets, differentiated marketing
strategy is considered to be suitable for Lotterias promotion (Kotler et al. 2009).
Positioning
Product Differentiation Image Differentiation
As number one fast-food brand in
burger with wide range of desserts and
snacks, product Differentiation the
forte among other competitive
advantages of Lotteria, comparing to
other competitors. Using fresh
ingredients, Lotteria offers customers
with high quality products that are
delicious and healthy at the same time.
Lotteria should make this fact more
visible to consumers via promotional
efforts to illustrate the high-quality and
healthy products of Lotteria
It is undeniable that Lotteria is nothing rather than just a
fast-food brand with good food and reasonable price. To
be differentiated among competitors, it is a must that
Lotteria start developing a new brand image. We suggest
that Lotteria start show customers that they care about
customers health and the welfare of the society:
- Lotteria should offer customers with recyclable
packaging which are environmentally friendly. It
shows that other than just an ordinary fast-food brand,
Lotteria is a brand that actually cares for the society.
- Due to the rise of health conscious among customers,
Lotteria can show that it is a brand that genuinely cares
for customers health, by offering more healthy choices
that are affordable and delicious
People Differentiation Services Differentiation
TH True Mart has knowledgeable and
polite staffs to serve customers. This
system should be maintained through
annual training workshops exclusively
for Lotterias staffs.
- TH can improve their delivery services. Along with free
delivery, the delivery should be fast (less than 30
minutes) and provide customers with hot food.
- Quantity discount (for chicken) and product bundle
pricing (combos) should be maintained using in the
future to show that Lotteria always offers customers the
best deals for delicious meals.

2.2 Overall positioning strategy
The strategy More for less should be continuously used. Even though Lotterias products are sold at
the lower price, the high quality of products is still always maintained. Discounts are still frequently
used in special occasions. Customers will be served by friendly, helpful and polite staffs, alongside
with fast and free delivery. Rather than just a regular fast-food brand, Lotteria shows that it cares for
the societys welfare and consumers health through recyclable packaging and healthier products.

SWOT Matrix (Table)

MARKETING MIX STRATEGY
Product
1. Existing Product
2. New Product
Lotteria should develop new product line of burger in order to keep in mind of customers that burger
is focus product category, rather than keep developing snack products, like they do at the moment.
Also, developing the new type of burger would be a must to compete with a new competitor - Burger
King Vietnam who also focuses on selling burger. Therefore, we suggests Lotteria add 2 new flavors
of buns on the burger categories, which are Veggie Rice Bun and Whole Wheat Bun (see the Figure
#). These 2 types of buns could be used for all the existing burger products of Lotteria. Instead of
only choosing flavor of the burger, Lotterias customers could now choose what type of bun they
would like to have in their burgers.
Vegie Rice Burgers and Whole Wheat Rice Burgers contain fewer calories than others types of bun,
which brings more nutrient and healthier meal for customers. In addition, with these green
ingredients in 2 new products, customers would gradually think that Lotteria offering more healthy
and nutritious fast-food products.
In brief, Lotteria offers them a variety of buns flavors, including Normal Bun, Rice Bun, Vegie Rice Bun
or Whole Wheat Bun in order to offer new purchasing experience to our target customers as well as
to gain more market share in the burger market.


Figure #: New product lines: Burger with Veggie Rice Bun & Burger with Whole Wheat Bun.
Price
1. Existing Product pricing strategies
a. Product Mix Pricing Strategies
The product bundle pricing that is currently applied by Lotteria can be sustained to use in the
coming year in order to minimize customers confusion and maintain their satisfaction and
habit while using Lotteria. Also, product line pricing is a good strategy that Lotteria can be kept
for the existing products in order to maintain customers satisfaction to the variety of choices
when ordering food at Lotteria.
b. Price Adjustment Strategies
Other than the current time pricing strategy with daily discount, Lotteria should use segmented
pricing, particularly location pricing. They should provide online ordering system for people
who want to have Lotteria without having to go out. Lotteria can give 10 % discount for
different product from online orders. Due to the strategy More for less, the price should be a
tad lower than other competitors in the market. Consequently, Lotteria can reach more
customers who have busy schedule with work and family, and want to grab convenient food.
2. New products
For the new products, Lotteria can set the higher price than normal products but still keep it
reasonable enough to maintain the positioning strategy More for less. Also, the new products
also should keep using Value-Added Pricing strategy in order to satisfy customer and to compete
with the competitors.
a. Prices
The price for Veggie Rice Bun and Whole Wheat Bun Burger should be the same with the
existing products price. We suggested that the price can be ranged from 25,000 to 40,000 VND,
depending on the burgers flavor.
b. New-product pricing Strategy:
Lotteria should use Market Penetration Strategy that is selling at low price at the beginning to
get as high market share as possible for its new product. So, in the first month of launching new
product, Lotteria can encourage customers to buy burger with the new bun and get a large cup
of cokes for free in order to attract and encourage customers to try the new products. Even
though the production cost increases due to the introduction of the new buns, Lotteria still
offers new burgers buns for the same price. Hence, the customers would find the price for new
products reasonable and appealing for trial. In addition, it would emphasize Lotterias image as
the number one fast-food brand in burger that offer healthy choices to its customers.
c. Product-mix pricing Strategy:
Product bundle pricing & Optional pricing
Lotteria still can maintain burger combos with a set of burger (with a chosen bun), beverage and
side dish at a reduced price. Additionally, Lotteria can let customers choose their snacks to go
with a chosen-bun burger at the 10% discount of total. By this, Lotteria give customers individual
choice, which not only encourages customers to try the new bun but also illustrate the More for
less strategy of Lotteria.
d. Product Adjustment Strategy
Segmented pricing Customer Segment pricing & Time pricing
For new flavors of burgers bun, Lotteria can combine customer segmented pricing and time
pricing by offering a happy hour from 5PM to 8 PM on Wednesdays for only students customers
who have student ID. Wednesday is a peak time since it is the sale-off day of a lot of cinemas
which often are relatively close to Lotterias store. Moreover, at the time, students from
secondary to university usually have fewer classes than normal. For this peak time, Lotteria
should offer student customers a combo for new bun burgers at 30% off price during the happy
hour. By this strategy, Lotteria can attract and encourage customers come as group to enjoy the
combo jumbo and share fun moments together. Lotteria can temporarily gain sale and market
share for this product.
Place
1. Existing Product Recommendation
a. Marketing Channel:
Lotteria should be focusing on expanding its distribution network where urban areas are expanding.
The more stores this company opens, the easier the access to the products it will become. However,
the company should balance the number of stores open and the marketing budget in order to
maximize profits.
b. Marketing Intermediaries:
Aiming to make Lotteria a corporate brand of convenience product, the company should maintain
the intensive distribution strategy. Moreover, it should be developed along side with the promotion
mix tools to make the brand stand out more among the competitors, changing the buying
behaviours of consumers towards the brand.
2. New product recommendation
a. Marketing Channel:
For the 2 new products, they should be available at Lotterias restaurants that have high number of
consumers visited monthly in order to introduce the new products to the consumers more
effectively while still balancing the cost-efficiency of the marketing plan.
b. Channel organization:
Hybrid marketing channel will remain as a model to distribute the new products. (see existing
Products Channel Organization recommendation above)
c. Marketing Intermediaries:
Selective marketing channel will be applied in this situation in order to make the new products
appear more unique and particular to the consumers. For example, only a few stores in Hanoi and
Ho Chi Minh City will have these products.

Promotion
1. Existing product promotion plan
For existing product, Lotteria should invest more in promotions tailoring loyal customers and our
target segments.
Suggested
Marketing Tools
Tactics
Advertising

Burger shaped brochure: Because Lotterias objective aims to promote that
Lotteria focus on burger products and offer more type of burgers than other
competitors. Lotteria can design a customize menu brochure in shape of a
burger. Then when customers turn to each page of coupons, they can see the
different ingredients of burgers, its nutrients information insides. This type of
advertising create an impression in customers that Lotteria care about
customers health and always put efforts in creating new type of healthy burgers.
The brochures can give out to customers order delivery meal and any customers
passing by Lotteria stores.

Sale Promotion

Lotteria should maintain coupons and patronage rewards in order to maintain
relationship with our regular customers and gain more sales. The coupons should
have more discounts on burgers menu.
Sweepstakes: In order to encourage customers buy large amount of products,
whenever a customer pays for a bill over 200,000 VND, they will have a chance to
win a random prize from Lotteria through a lucky draw. All of the draws will
result in a prize ranging from a VIP card or a coupon booklet.
Personal Selling

Lotteria can still maintain the existing territorial sales force structure in order to
extend more market share and gain sales in the future. Especially, when Lotteria
currently are winning over the market share in burger fast-food industry (Burger
King Vietnam) and closely compete with KFC Vietnam, it should invest more in
this strategy so as to improve Lotteria in the first position of fast-food market-
share.
Training Salespeople: Salespeople are the representatives of the company who
directly communicate and serve to customers. Therefore, training salespeople is
every important process. The training should aim to improve the similarity and
consistency of individual salespeople in all Lotteria stores in different areas. The
salespeople should be trained about the fast-food service industry and the
Lotteria company, their specific job skills so as to represent the right manner and
Lotterias culture to customers. Also, they should have knowledge about specific
types of customers in order to meet the specific needs of customers. With the
consistency, our target customers can be satisfied in every Lotteria stores they go
to gain loyalty with Lotteria. This can help to attract and create first impression
for first-time users.

Public Relations

To advance and keep up with the good affiliation with different publics, LOTTERIA
is to enforce actions to spread a good corporate brand image and at the same
time help the brand gain the number one dominant player in the burger market
chair as one of the companys objectives
Sponsorships: Lotteria should sponsor some events that help improves
environment in order to emphasize one of the most important organization
objectives, which is being an environmental friendly fast food brand.
Web pages: This is one of the most important PR tools of Lotteria currently. It
lets customers have a chance to interact with the brand, get benefits, and also
change their buying behavior. The Lotteria web page should be more easily
accessible for frequent customers. The webpage should be more organized in
terms of placement and information display in order to help customers
understand further about the brand. Also, because most of our target customers
nowadays are busy and looking for fast-food service through internet, with online
ordering on the website, Lotteria can easily reach our large target customers and
gain more sales.
Facebook Page: Lotteria should maintain the official Facebook Fan Page to
interact and communicate directly with our target customers, who are more than
55% of Internet users (Cimigo 2012). Lotteria can continue creating online
contest to increase interactivity with target customers and grab attention from
publics to Lotteria brand. By encouraging customers give feedback through FB
pages, Lotteria will gain more customer satisfaction.
Direct Marketing For existing products, Lotteria should maintain using online marketing to
communicate directly to the customers.


2. New product promotion plan
Lotteria should promote their new products to target customers as healthy meals and as a strong
fast-food brand in producing variety of burgers.
Sale Promotion
POP display: Every Lotterias restaurant should have a standee placed near the entrances with
the image of the Jumbo burger in order to promote for the new product as well as remind
customers that they are having a new option for a meal at Lotteria. Also, Lotteria can place at
their reception booths small standees formed in new type of burger buns shape to get high
attention of customers when they are ordering.
Premiums: For the first month launching new products, Lotteria can offers for customers buy 1
new type of burgers will get 1 combo of any snack (French fried, cheesesteak) and coke for free.
This encourages customers more willing to try new products.
Salespeople: Because sale person direct communicate with customers when they come to order
food at our booth. Therefore, salespeople should be trained to direct introduce about our new
products and recommend customers to buy when they want to order burgers.
Direct Marketing In order to promote for the new products (new burgers buns), in addition to
online marketing, Lotteria should use direct-mail marketing. Direct emails would be sent to frequent
customers who have Lotteria membership card, to inform customers about the new products and
relating discounts, in order to encourage trial for the new buns.

References
General Statistics Office 2010, Average urban population by province, viewed 23 November
2012, http://www.gso.gov.vn/default_en.aspx?tabid=467&idmid=3&ItemID=12936
Kotler, P, Armstrong, G, Ang, S, Leong, S & Tan, C 2009, Principles of Marketing: A global
perspective, 12
th
edn, Prentice Hall, Pearson Education, South Asia.
ProGuide 2011, Nha hang thuc an nhanh Lotteria, 25

November, viewed 23 November 2012,
<http://www.proguide.vn/cua-hang/27-nha-hang-thuc-an-nhanh-lotteria.aspx>
Vietnam Investment Review 2012, Youth swallow up fast food, 31 October, viewed 23
November 2012, <http://www.vir.com.vn/news/features/youth-swallow-up-fast-food.html>