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ZENTEA

Report on Market Structure Business Economics
by

Desiree Salud

on 14 April 2010

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Transcript of ZENTEA

Got TEA? Business Economics Report
Market Structure
Bernabe, Philip
Cajayon, Roniel
De Vera, Joey
Ferrer, Shirley Marie
Lualhati, Nits
Salud, Desiree Gaye
Sampang, Leah
Dr. Dante Sy COMPANY BACKGROUND Zentea was established in July 2005
with a branch in SM North EDSA. A privately
owned business of tea-based drinks inspired
from oriental concept of drinking tea.

Mission-Vision To be the leading tea-based beverage shop in the Metro Manila by 2011
To be known as the best tea shop
To be the Most innovative drinks using the best teas and ingredients around the world
Slogan: “Perfecting Teas,
Innovating Drinks!” Branches:

Zentea College of St. Benilde Arellano Ave, Manila
Zentea St. Scholastica Leon Guinto , Manila
Zentea St. Paul Manila Malate Manila
Zentea Univesity of East, Manila
Zentea Masangkay Manila
Zentea St. Jude Malacanang Manila
Zentea Ongpin, Manila
Zentea University of Asia and Pacific Pearl Drive , Ortigas Pasig
Zentea Xavier School, San Juan
Zentea Grace Christian College Quezon City
Zentea Ateneo Jsec, Quezon City

Corporate Values Respect for Individually
Honesty
Business Ethics
Fear from God
Brotherhood and Friendship
Value for Work
Industry Background Tea-based drinks grouped under food and drinks (f &d ) industry
known as "new beverage"
has four types


Location Tea-based drinks have become very popular in the Philippines and can be found mainly in malls, around schools and commercial areas. The National Capital Region would rank with the most number of tea-based drink stations or stalls given the fairly large number of students and workers in the region. Tea beverage caters to the young consumers from students up to the young professionals. Wherever the younger consumers are often seen, tea-based drink stalls could also be found. Given the varieties being offered in the tea beverage industry, the adult consumers are slowly catching on. Major Players (rated based on number of branches)
1. Zentea (11 Branches)
2. Bubbletealicious (6 branches)
3. Bubble tea (5 branches)
4. Simple Life (3 branches)
5. Serenitea (3 branches)
6. Fanchu (2 branches)
7. Kozui (1 branch)
Market Size Green Tea Iced Teas
L 40 XL 45
green apple lemon
strawberry grapes
kiwi raspberry
peach mango
honey lychee

Milk Teas (with Pearl or Jelly)

*Nai Cha (pearl milk tea) L 45 XL 50
Choctea (chocolate milk tea) L 55 XL 60
Cremetea (fruit cream tea) L 55 XL 60
Carnival (caramel milk tea) L 55 XL 60
Altitute (almond milk tea) L 55 XL 60
Horlics (malt milk tea) L 60 XL 65
*Best Seller

PersonaliTea (gourmet mixes)
L 40 XL 45

Red Zen Highway
3Berries Hibernate
Shilled Tropical
Metallic Mimic
Age: 9- 60 years old
Gender: Female 60% Male 40%
Status single 95% married/ others 5%
Market Profle AB 60% C 30% D-E 10%
Educational Attainment Primary/Elementary school graduate 5% High school graduate -85 % College graduate 10%
Market Profile Zeatea’ distribution and production efficiency, like in an oligopolistic industry, is less as expected in the pure competition. This is due to the availabity of raw materials, price setting, and target market. It can only produce what the market can consume. Lastly, the monopolistic competion model provides an important insight: The rate of profit in the long run will be zero. As depicted in the graph , the long-run equilibrium for monopolistic competition, prices above marginal cost but economic profits have been driven down to zero. This is in supported by the characteristic that it is relatively easy to penetrate a monopolistic industry. This forces firms to take into account competitors’ reactions to price and output deviations and brings strategic considerations into their market. To keep up with the competition.

*How competitive will be the rates and services
*Continuous research for innovative tea based products
To further differentiate self.
*Uniqueness of tea based beverages (e.q. Hibernate)
Growing number of competitors in the same health drink
industry.

Indirect Competitor (with different base drinks but under prepared segment)

Soya Drinks, Soy Yummy (Taho)
Zagu
Fruitas
Buko Joe

Readiness of the Philippine market especially teens when it
comes to tea beverages.
*Health Consciousness
Market Structure Causes of the Problem Increasing competition is a problem which is as old as business and it is an issue that businesses has to deal with successfully so as to maintain market share. 1. Increasing competition/
New Entrants 2. Product Imitation Although patents serve the purpose of protecting products from imitation, experience will tell us that it is better said than done. The proliferation of pirated goods everywhere is more than enough to prove this.

Low-priced alternative products - ready to drink teas
Other than the direct competitors/new entrants in the prepared tea base segment. The industry is faced with alternative ready to drink tea based products. Such as C2, One Tea, Sola and others.

Solutions to the Problems Strengthen the competitive advantage
Continues Product development
Advertising and Promotion (Niche Marketing
Strengthen Competitive Advantage

To remain competitive, one must know the answer to “why would we choose Zentea over its competitors?” and implement it the quickest and in the most efficient way.


Internet
FB (and other social networking)
Gaming

Socializing/Ambience
hangout ‘til the next subject
group study
individual review/study

Breaks
Snack
Lunch
Brunch
Dinner

Making all these available on every Zentea location will make it easier for new & existing fanatics of the brand to decide against competition and make it a habit to a drink or two and experience Zentea.
TV & Radio ad is effective but very costly, but there 2 ways to replicate its effectiveness but not as costly:

Viral Marketing
Simply put, positive hearsay
1. Strengthen competitive advantage 2. Advertising and PR Creating something to talk about Zentea is an effective way to advertise with virtually zero cost, namely:

Singles’ tambayan
School Spirit
male & female student inspiration of the month with holistic criterion namely:
Beauty/Appeal
Academic
Popularity
These are the people which everybody is looking up to on great styles and new trends, these would influence the crowd to patronize the brand.
A real person endorsers
Great Rendezvous point

Niche Marketing
Focusing only on Zentea’s strong market will promote better results without depleting much resource.






By aggressively engaging to expansion, Zentea should identify primary location that will cater their market ahead to their competitors. This called Market Positioning/ Penetration.
This can be done by strengthening its business development programs such as intensive franchising packages, leasing scout capabilities and preparing sufficient funds for expansion.
Furthermore, the company should prepare for its operational capabilities for these expansions such us Employee Training Programs, Improve Logistics and Commissary.
3. Aggressive Expansion Program Graph
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