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David's Tea Presentation

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Kate Pires

on 4 April 2014

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Transcript of David's Tea Presentation

Kate Pires, Leila White, Amy Pass,
Naomi Stewart & Alexandria Williams
CANADA
Brand Personality
Brand Values
Energetic
Enthusiastic
Youthful
Knowledgeable
Friendly
Vibrant
Inclusive
Innovative
Luxury tea experts
Health-conscious
Vibrant lifestyle
Trendy experience
Quality product
Canadian Brand positioning map
Canadian
Market Share
political
Strong, positive importing/exporting partnership between the UK and Canada (both Commonwealth).
Recent issues selling certain British food products in Canada (due to formulation regulations) could result in a backlash.

No duties or tariffs for importing tea into the UK from Canada.

Only pay one duty to import into both the UK and Poland as they are both EU members.

(BBC, 2014; European Commission, 2013; GOV.UK, 2014)
U.K.
Brand Blueprint
PESTLE
Economic
UK General:
GDP growth by 0.7% in the final quarter of 2013, taking economic growth to 1.9% between calendar years 2012 and 2013: the strongest since 2007.
Unemployment is falling.
The tea market reached £683 million in value in 2013 and grow by 0.6% over 2013-17 to reach £687 million.
$1 CAD = 0.54p
Market expected to benefit from growth in the number of 25-34s.

London Specifically:
Approx 5.6 million Londoners are between 17 - 64.
Median age is 34.
London has the highest disposable income in UK (£20,509/ph).

(Office for National Statistics, 2013, 2014; Mintel, 2013a)
social
Technological
Legal
Environmental
Porter's
Threat of New Entrants
Threat of Substitutes
Bargaining power
(suppliers)
Bargaining power
(Buyers)
Competitive rivalry
uk positioning Map
market entry
strategy
Goals
(UK & Poland)
PolAnd
political
Strong, positive importing/exporting relationship between Poland and Canada.

Export Development Canada (EDC) is actively pursuing business with Poland.

Expanding trade opportunities between Poland and Canada for food products (specifically organics).

Only pay one duty to import into both the UK and Poland as they EU members.

(CGRPM, 2011; Export Development Canada, 2014)
Economic
GDP falls behind UK - but is increasing.

Unemployment predicted to fall in 2014.

Polish tea market sales were €525m.

No supply chain issues envisaged.

Poland relatively resistant to Eurozone financial crisis.

$1 CAD = €0.65

(OECD Better Life Index, 2013;
Euromonitor International 2013b, 2013d)
social
Technological
Legal
Environmental
Threat of New Entrants
Threat of Substitutes
Bargaining power
(suppliers)
Bargaining power
(BUYERS)
Competitive rivalry
Porter's
Final Thoughts
Long-term
5 Year Goals:
Market share:
UK
- 1.5% (£10.3m - based on anticipated market value in future)
Poland
- 1% (€5.25m - based on current market value, excludes inflation).
50% brand awareness in David's Tea flagship cities in UK and Poland
Future expansion within Europe.
UK:
Begin by expanding northward
Manchester, Liverpool, Birmingham, Cardiff and Edinburgh
Poland:
Łódz, Wrocław and Poznań
Launch of ecommerce-enabled website.
Warehouse needed in Europe to store product.
Ongoing progression to premium pricing.
Ongoing development of tea flavours.
Continue building partnerships with related businesses.
Monitor trends in cultures.
PESTLE
Canadian Tea Market Data:
Tea industry retail sales value grew to $517m CAD in 2012.

Tetley Canada has largest market share with 31% ($1.6b).
35% of black tea total retail value sales.
17% of fruit/herbal tea sales.

Lipton and Twinings have 2nd and 3rd largest share.

"Tea consumption will continue to grow in Canada...rising demand for premium tea experience drives new developments in the market."

Retail tea sales forecasted to grow 2% annually to reach $564m in 2017.
(Euromonitor International, 2013c)
“DAVIDsTEA” is trademarked in the UK by David's Tea
Trade mark EU008598476

No legal restrictions or requirements expanding a Canadian company into the UK.

(Intellectual Property Office, 2013)
“David’s Tea” is not currently copyrighted in Poland.

(Ministry of Culture and National Heritage, 2014)
NOTE:
Porter's 5 Forces model does not explicitly apply to this scenario. It was adapted to suit the circumstances.
NOTE:
Porter's 5 Forces model does not explicitly apply to this scenario. It was adapted to suit the circumstances.
Direct and Indirect Competition - LOW
Deep supply chain of about 15 suppliers internationally
No impact on current tea manufacturing process; only quantity of product output is affected. Ready-to-sell tea will be shipped from Canada to Antwerp port and distributed to the UK and Poland.

(Koh, 2009)
Facts from UK equivalent slide apply to Poland as well.
OBJECTIVES:
To increase awareness in the target market segment (ABC1 females and males, aged 18-40) by 20% within 12 months of the product launch.
To position David's Tea as premium tea experts that provide a unique and trendy tea retail experience.
Obtain up to 0.25% (£1.7m) of the tea market within 12 months.

PLAN:
Maintain the same strategy and positioning as in Canada:
Standardised
Retail stores, tea experts, friendly and trendy atmosphere
However, emphasise cafe aspect.
Adapt tea range to include UK-oriented flavours.
I.e. black current, elderflower, Pimms
Place STrategy
product Strategy
OBJECTIVES:
Launch flagship retail store in London.
Expand further within UK and online within 5 years.

PLAN:
Wholly owned outlets form of distribution.
London: Covent Garden (flagship), Shoreditch, Clapham
No ecommerce website initially.
Shipping:
Port of Montreal to Antwerp or Rotterdam for import to EU.
Onward transport to Poland via road or train.
Onward for UK shipped to Southampton (best for London) then by road.
Promotion Strategy
Price STrategy
OBJECTIVES:
Work our way up to Canadian equivalent premium pricing.

PLAN:
100g = $7 CAD, £3.76
Launch with a price skimming strategy to attract trial of product.
Increase prices to Canadian equivalent as brand becomes established.
OBJECTIVES:
Generate buzz for store launch.

PLAN:
Launch event:
Pop-up shop (sampling cart) in major public transportation areas (i.e. Convent Gardens). Give away tea samples to encourage trial.
Balloons and other promotional decorations.
Social Media:
Contest - Win a trip to Montreal, hashtag your favourite tea sample picture for a chance to win.
PR samples to magazines such as Women's Health, Stylist and Esquire as well as bloggers (tea bags, mug).
Promotion Strategy
The Packaging Waste Directive requires that David’s Tea must comply by ensuring their packaging is eco-friendly.
All David's Tea packaging is currently reusable and recyclable.

No real issue with exporting tea from Canada to the UK as tea a safe product.

(Ministry of Foreign Affairs, 2014;
HM Revenue and Customs, 2014)
S
W
o
T
Tea experts
Strong brand in Canada
Rapid growth
UK is English speaking
Strong coffee culture
Unknown brand in U.K.
Retail focus; lacks cafe
Nation of tea drinkers
Little direct competition
Chance to become market leader
Strong social media market
Many indirect competitors
Not a developed market
Brand awareness issues
S
W
o
T
Tea experts
Strong brand in Canada
Rapid growth
Strong coffee culture
Unknown brand in Poland
Retail focus; lacks cafe
Polish language
Nation of tea drinkers & growth in specialty tea
Chance to become market leader
Modern image
Heavy social media users
Many competitors
Not a developed market
Brand awareness issues
High uncertainty avoidance
market entry
strategy
Polish Positioning Map
product Strategy
pRICE STrategy
pLACE Strategy
Promotion STrategy
Promotion Strategy
Sales of unpacked teas are developing in the big cities due to the rising presence of specialist tea shops such as Czaz na Herbate and Five O’Clock. Customers prefer to seek “expert” advice from shop assistants.

Between 2011-12 manufacturers introduced new flavours.
This strategy showed visible results and customers are willing to try new products and flavours.

A section of Polish society who is strongly aspiring, is seeking "sophisticated novelties supported by high end offerings".

Young Polish population increasingly open to western brands (grown up with independence).

96% of the population identifies as Catholic.

(US Department of State, 2005; Euromonitor International, 2013b, 2013d)


Direct Competitors -

LOW
Whittard
Aged brand image - 'bone china cup & saucer'
Recently went into administration

Indirect Competitors - HIGH
Supermarket tea brands and coffee shops
No switching costs
Easier and cheaper to buy flavoured tea bags during supermarket shop
Coffee shop culture is strong in UK
Loose leaf tea consumption is lower than bagged tea consumption
(BBC, 2008; Mintel, 2012)
NOTE:
Buyers refers to the end users as the product is sold through wholly-owned distribution channels.

Direct and Indirect Competitors - LOW
Buyers are in a weak position as David’s Tea is a new product with little direct competition.
David's Tea can afford to charge a premium price and to increase profit margins.
If consumers are presented with a high price they are more likely to accept it is a premium product
David’s Tea premium price and specialised outlets restricts buyers from using their purchasing power for price reduction.

Future Consideration
:
David’s Tea should monitor competitor’s offering to ensure differentiation and keep buyers’ bargaining power low.

Facts from UK equivalent slide apply to Poland as well.

Only differing aspect is that there are 2 direct competitors.
Interbrand, Newell and Sorrell
Canadian Cafe/Bars Market Data:
2012 value of Canadian cafe/bar market was $4.9b.

38% market share ($1.86b) for specialist coffee shops.
5% market share ($245m) for cafes.
Starbucks has 16% value share in sales.

Market sales expected to reach $5.2b by 2017.

Market development increasing in specialty tea area.

(Euromonitor International, 2013a)
Who Drinks
tea anyway?
Canadian
Market Share
Direct Competitors
-
LOW
Expertise needed
Knowledge of product and process for premium tea production.
Higher capital investment
Storage and retail space required.
Need to rely solely on their own customer base as opposed to the customer base available at supermarkets.

Indirect Competitors
-
MEDIUM
Barriers to entry are medium to low.
Investment capital is needed to open and maintain cafes.
Tea bag brands need to acquire distribution through supermarkets.
9/10 consumers drink tea (average of 3.5 cups/day according to a WRVS survey of 2000 Brits).

56% of tea drinkers say they ‘enjoy’ the ritual of tea drinking (1,303 internet users aged 16+ who have drunk standard or specialty tea).

Herbal tea enjoys strong associations with health, it also suffers from a ‘bland’ image.

25-34s are core drinkers of tea.

16-24s drink a significant amount of herbal tea.

1/3 consumers think it's worth paying more for specialty teas
Based on 1, 303 internet users aged 16+ who drink tea*.

25%* view loose tea as better quality than bags.

Christianity is the largest religion.

(Mintel, 2013a; Dailymail.com, 2013)

Hofstede's
Cultural dimensions
(The Hofstede Centre, 2014)
(Euromonitor International, 2013d)
OBJECTIVES:
Create a strong online community which embodies David's Tea's brand values which reaps an engaged following.
Build partnership with related businesses that target market would frequent.

PLAN:
Centralised marcoms with cultural differentiation.
Exclude country-of-origin strategy.
Create "David's Tea UK" social media accounts:
Facebook, Instagram, Twitter, YouTube, Pinterest
Post daily content (hedonic and promotions).
Partner with local health & wellness businesses.
eNewsletters
Use SEO.

UK internet penetration in 2013 was 87% (44.3m adults) of the population and is steadily increasing.

Most popular social media platforms are Facebook, Twitter, Instagram and LinkedIn.

72.57% (36m) of UK internet users use Facebook.

18 -44 year olds account for 42% (15.1m) of Facebook users.

(Fanalyzer, 2013)

Internet penetration in Poland is 65% (per 100 people) and is steadily increasing.

Most popular social media channels are Facebook, Nasza-Klasa and Twitter.

Nasza Klasa is a local Polish social network that operates similarly to LinkedIn.

(Bloom Worldwide, 2013; The World Bank, 2013)
Direct Competitors
-
MEDIUM
Few direct competitors at present.
Polish tea culture is changing shape.
People are looking for 'sophisticated novelties' and 'high end offerings'.
Depending on how the market react to this there could be more direct competitors in the future.

Indirect Competitors
-
HIGH
There are many established tea brands in the supermarket as well as cafes.
The structure of competition
Direct competitors -
LOW
Whittard is the only real direct competitor
Indirect competition -
HIGH
There are many indirect competitors
Degree of differentiation

Direct and Indirect Competitors -
MEDIUM
Tea is a commodity, however, the flavour ranges differ.
Strategic objectives
Direct and Indirect Competitors -
MEDIUM to HIGH
Tea is quite a mature market, however, the loose leaf tea market specifically is growing
Exit barriers - Undetermined
Cannot confirm how other companies source their product.
Information is not available.


The structure of competition:
Direct Competitors -
MEDIUM

Czas na Herbate and 5 O'Clock Tea are the only real direct competitors
Indirect Competition -
HIGH
There are many indirect competitors

Degree of differentiation:
Direct and Indirect Competitors -
MEDIUM
Tea is a commodity, however, the flavour ranges differ.

Strategic objectives:
Direct and Indirect Competitors -
MEDIUM to HIGH
Tea is quite a mature market, however, the loose leaf tea market specifically is growing.

Exit barriers - Undetermined
Cannot confirm how other companies source their product.
Information is not available.
OBJECTIVES:
To increase awareness in the target market segment (ABC1 females and males, aged 18-40) by 20% within 12 months of the product launch.
To position David's Tea as premium tea experts that provide a unique and trendy tea retail experience.
Obtain 0.2% (€1.2m) of the tea market within 12 months.

PLAN:
Maintain the same strategy and positioning as in Canada:
Standardised
Retail stores, tea experts, friendly and trendy atmosphere
However, emphasise cafe aspect.
Adapt tea range to include Polish-oriented flavours.
I.e. Cherries and berries
OBJECTIVES:
Launch flagship retail store in Warsaw.
Expand further within Poland and online within 5 years.

PLAN:
Wholly owned outlets form of distribution.
Warsaw (flagship) and secondary, Krakow
No ecommerce website initially.
Shipping:
Port of Montreal to Antwerp or Rotterdam for import to EU.
Onward transport to Poland via road or train.
OBJECTIVES:
Work our way up to Canadian equivalent premium pricing.

PLAN:
100g = $7 CAD, €4.50
Launch with a price skimming strategy to attract trial of product.
Increase prices to Canadian equivalent as brand becomes established.
OBJECTIVES:
Generate buzz for store launch.

PLAN:
Launch event:
Pop-up shop (sampling cart) in major public transportation areas. Give away tea samples to encourage trial. Integral to counteract higher uncertainty avoidance.
Balloons and other promotional decorations
Social Media:
Contest - Win a trip to Montreal, hashtag your favourite tea sample picture for a chance to win.
PR samples to magazines such as Grazia and Monitor as well as bloggers (tea bags, mug)
OBJECTIVES
Create a strong online community which embodies David's Tea's brand values which reaps an engaged following.
Build partnership with related businesses that target market would frequent.

PLAN
Centralised marcomms with cultural differentiation.
Exclude country-of-origin strategy.
Create "David's Tea Poland" social media accounts:
Facebook, Nasza-Klasa, Instagram, Twitter, YouTube, Pinterest.
Post daily content (hedonic and promotions).
Build strong partnerships with local, related businesses (i.e. yoga studios).
eNewsletters
Use SEO
Brand Personas
The Packaging (Essential Requirements) Regulations is applicable to David's Tea because they;
Produce packaged goods
Design, specify or produce packaging
Pack or fill packaging to sell
Claim to have packed or filled packaging by putting their brand and trademark on the packaging Import packaging or filled packaging.

David's Tea complies with the above regulation.

Environmental permits for water, air and waste pollution are not applicable to Davids Tea because they will not be needing warehouses to produce their goods.

(Ministry of Foreign Affairs, 2014)



To establish David’s Tea as a trendy and friendly tea destination.

To increase awareness in the target market segment ABC1 females and males, aged 18-40 by 20% within 12 months of the product launch.

To increase the number of stores through expansion in each country.
Direct Competitors - MEDIUM
2 established loose leaf tea retailers.

Indirect competitors - HIGH
Tea bar culture is strong in Poland - very easy to substitute.
No switching costs associated with either Tea Bars or supermarket tea bags.

Canadian MarComs
B&C approach focused on digital communications.
Full transcript