Presotea: A Feasibility Study

This Feasibility Study for Presotea was paid by Ohyama Group of Companies as Market Research for a Tea Shop they are trying to set-up in the Philippines.

Presotea
A Feasibility Study  

INTRODUCTION

Most, if not all, brilliant business ideas nowadays are generated, agreed-upon and closed-deal in the tranquil confines of coffee or tea shops. Every visit to any of the leading coffee or tea shops in town is definitely not complete without those businessmen huddled in a semi-conference talking about a new business deal or simply brainstorming. This goes to show that coffee or tea shops in the Philippines offer a lot more than serving a good cup of coffee or tea.

The tea industry technically started out the same time as that of coffee’s with the establishment of The Coffee Bean and Tea Leaf circa 1963 in California. Since then, tea has slowly but steadily penetrated even in coffee-dominated countries such as the Philippines.

The Philippines as a Soda-Drinking Country

The Philippines is populated by approximately 87 million people with $31 million of its population’s income spent on softdrinks alone. The annual disposable income projected in 2007 is approximately $85 million. This information was based on the statistics obtained from a published Euromonitor International data. Based on these statistics, about $31 million in $85 million is spent by every household on beverages, mainly in softdrinks.

How then, has tea been able to move into a third world country of softdrink-consumers?

Tea Drinking as Culture

One obvious reason is that, the Philippines being an Asian country, is located near the countries where tea originated. Tea originated in Asia particularly in the regions of China, Myanmar and India. Due to its curative and anti-oxidating power, tea origin and its culture is closely inclined to religious or status symbolisms. The Han Dynasty in China used tea as medicine. Laozi, a classical Chinese philosopher, believed tea to be a “cleansing” drink. Ancient recordings indicate the first batch of tea seeds were brought by a priest named Saichō and then by another named Kūkai in Japan. The first historical record documenting the offering of tea to an ancestral god describes a rite in the year 661 in which a tea offering was made to the spirit of King Suro, the founder of the Geumgwan Gaya Kingdom (42-562). The Royal family in India considers tea trade and Indian Black Tea as a prized market and one of the best teas in the world. Ceylon’s teas are classified according to geography known as Up country, Mid country and Low country.

Tea as the Healthier Option

Another reason is the country’s heightening health consciousness, with Filipinos starting to resort to healthier alternatives. According to the Philippines’ Department of Health: “The leading causes of death are diseases of the heart, diseases of the vascular system, pneumonias, malignant neoplasms/cancers, all forms of tuberculosis, accidents, COPD and allied conditions, diabetes mellitus, nephritis/nephritic syndrome and other diseases of respiratory system.” In line with this, studies regarding tea’s health benefits are persistently proving that tea is indeed the healthier option.

Benefits of Tea

Based on studies, tea drinking has numerous health benefits. Among these benefits are: aiding and building bones, an effective weight-loss formula and lessening the risk of having cardiovascular diseases. It was concluded in a study conducted in Taiwan that tea drinking affects the bone density. Researchers found out that people who drank tea in 6-10 years on a regular basis had greater bone density than those who do not drink tea. Reports also say that green tea boosts metabolism and burn up to 60 calories when taken 4-5 times a day. Black tea, which is rich in polyphenols (a form of antioxidant), which reverses endothelial vasomotor dysfunction lessening the risk of cardiovascular diseases.

Due to these benefits and the growing health consciousness of Filipino consumers, the tea shop industry will surely saturate in the market. Not only is it a deviation from the coffee shop trend, but the drink itself is healthier and has the more calming effect than any other beverage.

Having a tea shop in a coffee-shop populated environment allows tea-drinkers to enjoy their cup of tea without the noise and chaos in a jam-packed coffee shop. It is best to give to the customers the main benefit of tea to their system- that soothing and calming effect. Just as perking up is to coffee, tranquility is to tea. A tea shop should indeed exhibit what Teaism is all about:
“Learning to appreciate something that is small and perfect in a world that is not too perfect and even a little out of control.”

With this in consideration, the tea industry is indeed ready to make a mark of its own in the Filipino market.

ALL ABOUT PRESOTEA

Preso Tea which is the trendy and delightful beverage originating from Taiwan is finally going to the Philippines, its first venture outside its Taiwan hometown.

From Preso Tea’s green and yellow shop in the heart of Taiwan, to the servings handed over by the twenty-something crew members, Preso Tea has indeed gone a long way and now, it will try to penetrate a coffee-drinking country that is the Philippines.

The shops are conveniently located in good spots and continuously pops up everywhere almost like a hit fast food chain. The shop itself is hard to miss with its stark green and yellow façade matching the hip and accommodating crew members.

The Crew

The crew members go about with very minimal supervision, there are usually only three crew members per store.

This is because tea processing is handled by programmable machines (these are called GYT222a, GYT323a and GYT322a) precisely according to the specifications of every order which may take around 45 seconds to 2 minutes at the most to prepare.

So Many Choices for Tea

The best seller for every store is the Milk Tea. There are 80 variants in the menu and this includes hot, cold and milk-based teas. Sizes of servings range from medium-sized 500cc to large ones approximately 700cc. The prices range from 20-25twd (Taiwan dollar).

Listed on their menu are:
 Jasmine Green tea
 Assam Black tea
 Oolong Sencha
 Green Jade Sencha
 Oil Cutting Green tea
 A Li Shan iced tea
 Japanese Genmaicha
 Darjeeling Black tea
 Oriental Beauty tea
 Iced Iron Goddess tea
 Golden Oolong tea
 Chrysanthemum Pu-Erh tea
 Organic Jasmine Green tea P
 resotea Specialty Milk Tea
 Assam Milk tea
 Jasmine Green Milk tea
 Charcoal Milk tea
 Milk Tea with Tapioca
 Chocolate Milk tea
 Hazelnut Milk tea
 Matcha Milk tea
 Okinawa Brown Sugar Milk tea
 Hokkaido Milk tea
 Milk tea with pearl
 Pudding Milk tea
 Grass Jelly Milk tea
 Coconut Jelly Milk tea
 Coffee Jelly Milk tea
 Match Milk tea with Red Bean and pearl
 Hazelnut Black tea
 Mango Green tea
 Plum Green tea
 Passion fruit Green tea
 Lemon Green tea
 Fresh Kumquat Lemon Green tea
 Grapefruit Green tea
 Mango Yakult Green tea
 Iced Osmanthus tea
 Iced Rose tea
 Iced Chamomile tea
 Peppermint tea
 Blueberry fruit tea
 Fit tea
 Beauty tea
 Roolbos tea

Customers
Presotea in Taiwan caters more to teens and young professionals on-the-go. This may be due to its selected store locations and store layout which is more appealing to the younger taste.

THE COMPETITION

Demographics
Based on the study conducted by the research team, there are at least three direct competitors in every one of the fifteen central hang-outs in metro Manila alone. The team has identified fifteen places where the class A and B crowd usually hang out. These areas are 1) Trinoma, 2) SM North, 3) Tomas Morato Strip, 4) Eastwood City, 5) Gateway Mall (in Quezon City); 6) Greenhills Shopping Center (in San Juan); 7) Alabang Town Center (in Alabang); 8) Mall of Asia (in Manila); 9) Bonifacio High Street, Serendra (in Taguig); 10) Glorietta, 11) Rockwell, 12) Greenbelt (in Makati); 13) SM Megamall, 14) The Podium and 15) EDSA Shangri-la Mall (in Ortigas).

The Shops
As a direct competitor, Starbucks was present in all of the locations. Other competition considered were: Coffee Bean and Tea Leaf, Seattle’s Best Coffee, Figaro, UCC, Bubble Tea, Kozui Green Tea, Tea Square and Teazers.

The competitors were identified based on their specialty which is tea. The Tea Square, Kozui Green Tea, and Bubble Tea had tea for almost 90% of their menu. Coffee Bean and Tea Leaf almost had equal number of choices for both coffee and tea.

Coffee Bean and Tea Leaf
Pioneering in the history of the coffee shop history is Coffee Bean and Tea Leaf with California as home base in 1963.

Coffee Bean and Tea Leaf (CBTL) offered teas in three different sizes with prices ranging from 135-165php. Among the choices were:
• Classic Lime Tea
• Chai Tea
• Vanilla Ceylon
• Dragon Well Lung Ching
• Genmaicha Green
• Ginseng Peppermint
• Jasmine Dragon Phoenix Pearl
• Lemon Chamomile
• Moroccan Mint
• Pomegranate Blueberry
• Strawberry Cream
• Tropical Passion
• Apricot Ceylon
• Earl Grey
• English Breakfast
• Estate Darjeeling
• Fancy Formosa
• Oolong
• Japanese Cherry

Coffee Bean and Tea Leaf can be mistaken for a spa. The aroma indeed is a mix between coffee beans and tea leaves. There are also water fountains of different types in majority of their stores. Their music is what we call these days as “environmental music” with waterfalls, humming birds and the wind as main instruments. The seats are strategically chosen for comfort. Wall decors are usually painting or 3-d classical art. CBTL also has this fancy brochure/ menu describing each tea flavor and its brief history.

In the early 70’s, Starbucks and Seattle’s Best Coffee followed.

Starbucks
Starbucks started out in the early 70’s in its hometown California.

Starbucks has the traditional Western style for their structure and interior. Starbucks signifies the trendy contemporary American with different types of pop art plastered on their walls. There are also as many couches as there wooden chairs in a shop for customers’ comfort. Music in their shop ranges from the relaxing bossa nova to the upbeat tunes of reggae music. The shop itself smells of coffee beans and pancakes. Some shops are well-lit, some are dim for more conservative patrons.

Starbucks had the following in their menu:
• Tazo Tea
• English Breakfast
• Zen tea
• Chamomile
• Passion Blend
• Earl Grey
• Mint blend

Seattle’s Best Coffee
After the establishment of Starbucks, SBC followed soon after.

SBC had strawberry, peach mint, lemon, earl, English breakfast, genmaicha and jasmine in their menu.

Seattle’s Best Coffee practically has the same ambiance as that of Starbucks but less inventive and more conservative. Majority of the furniture are still the conventional wood-finished and their walls are usually plastered with enlarged old photographs or billboards.

In the year 1993, it was Figaro which brought coffee awareness to the Filipinos even before Starbucks and SBC did.

Figaro

Figaro only had two options for their tea, hot or cold.

In terms of ambiance, Figaro is more of the outdoor experience. The big garden umbrellas and wicker chairs and tables are apparent and more of a trademark to a typical Figaro shop. The interiors are simpler and yet, more elegant.

Bubble tea

The shop that offers the most number of tea variants is Bubble Tea which currently has two main branches, one in SM Megamall and the other in SM North. Bubble Tea chose the livelier and “bubbly” feel for its ambiance.

Bubble tea does not have a menu for customers to look at. Instead, the entire menu of 45 tea variants is displayed right behind the counter. Their teas are categorized in three major types: the Milk Bubble Shakes, Jasmine Green Tea Blend and Black Tea Blend.

For the milk bubble shakes the choices were:
• Royal milk tea
• jasmine green
• taro
• Milk
• almond milk
• strawberry milk tea
• Japanese green
• coconut milk tea
• coffee milk tea
• chocolate milk tea
• passion fruit tea slush
• peach tree tea slush
• strawberry tea slush

For the Jasmine Green tea blend, there choices were:
• brewed strawberry tea
• brewed passion tea
• brewed lychee
• green apple
• kiwi

And for the Black Tea blend, the mixes were: mango, passion fruit, peach lemon, strawberry and watermelon blend. The tea comes in two sizes, for a worth-it price of 60-75php.

The Tea Square
The Tea Square is a kiosk conveniently located in populated areas especially in a business area. This may be due to their target market which is people-on-the-go who needs a quick and healthy refreshment to detoxify themselves. The tea is served in disposable cups in approximately 3-5 minutes.

The Tea Square has nine variants both served hot or cold for the very affordable price of 25-35php. The tea options were: mango, authentic green tea, fresh peppermint, blueberry, four red berries, country peach, honey lemon, chamomile and black cherry. The best-seller is the Four Red Berries served cold.

Kozui Green Tea

Kozui Green Tea offers eight variants of tea served hot and cold. Listed on their menu are:
Sencha tea, Genmaicha tea, Kukucha tea, Matcha tea, Dragon Well tea, Jasmine tea, Piluochun tea and Oolong tea. They come in 12-16 oz. servings with prices ranging from 70php- 85php.

Kozui Green Tea went after the more comfortable and Asian-like ambiance. It is located along the gimmick strip of Tomas Morato.

UCC
UCC has extended its approach from a coffee shop to a restaurant. Their shops are usually designed to cater to large groups especially families.

Other Attractions
Among the many attractions of majority of the shops are the Wi-Fi services and frequent-drinkers promo. Starbucks, SBC and CBTL offer limited edition planners for frequent-drinker who are able to fill their promo cards during the Holiday season. Aside from these, there are also novelty items offered such as beanies (toys stuffed with real coffee beans, signature mugs, caps and coasters. These three stores also circulate trendy brochures that give information about each coffee or tea flavor.

Truly, coffee or tea shops these days have evolved from a place to enjoy one’s favorite drink into a venue where one can socialize, relax or do work. Many of the patrons usually choose that shop wherein they can do more than just drink and enjoy their cup.

REGULATORY REQUIREMENTS

As with any other businesses, there are certain requirements to submit to formally establish the legality of the business here in the Philippines. Every requirement must be submitted and thoroughly reviewed by the Department of Trade and Industry and Securities Exchange Commission.

Business Name Registration

Everything starts with the business name. The business name should be registered through DTI’s Business Name Registration Systems to obtain the Transaction Reference Number Acknowledgement. The application fee is 300php plus other minimal fees for documentation stamps, etc. For a stock corporation such as the Ohyama Group of Companies which will bring Presotea to the Philippines, the other requirements for Name registration are:
 name verification slip
 articles of incorporation and bylaws
 affidavit of undertaking to change name
 treasurer’s affidavit
 bank certificate of deposit
 authority to verify bank account
 filled up registration sheet

There is a standard registration form that can be obtained from the DTI for those who prefer to register the faster way. The form is usually 300-400php. The customized application on the other hand, requires a detailed document stating the primary and secondary purpose of the business and capitalization. It is 210php for the bylaws fee, 300php for the stock and transfer book and 100php for the documentary stamps.

City Government Permits

Securing local permits is also crucial for a business. It is important to have the Barangay Clearance and Mayor’s Permit to establish the business. To obtain them, the requirements are:

For Barangay Clearance
 registration certificate from the Securities Exchange Commission for corporations
 lease contract

For the Mayor’s Permit
 barangay clearance for application for a Mayor’s Permit
 contract of lease between your company and the lessor
 registration from SEC
 sketch of the location
 Community Tax certificate of the corporation
 Fire safety certificate issued by the Bureau of Fire and protection

The requirements vary based on the location. There may be a need for an engineering clearance, health inspection services or insurance coverage. Obtaining a barangay clearance may require 1,500php for fees and 10,000php for a mayor’s permit.

Tax Registration

A business is not business without a Tax Identification Number or TIN and this could be obtained from the Bureau of Internal Revenue by filling up BIR forms 1901 and 1903. Submit the accomplished forms to the Revenue District Office or Large Taxpayer’s Assistance Division that has jurisdiction over your head office, branch office place of production or storage places. The BIR forms along with these other documents must be brought:
 sketch of the location
 a photocopy of the mayor’s permit or municipal license
 SEC registration
 Articles of incorporation or partnership
 Branch offices must present a certificate of registration of the head office

Registration of the book of accounts with the BIR authority to print or issue receipts and to use cash registers, leaf books and accounting books are also necessary to obtain that certificate of registration or BIR Form 2303. The registration fee costs 500php while the documentary stamp is 1% of the subscribed capital for corporations.

Social Security Registration

Partnerships and corporations must submit copies of the Articles of Partnership or Incorporation for Social Security System coverage. Aside from this, SSS form R-1A must also be submitted for a corporation’s initial and subsequent employees’ SSS coverage. All employees are mandated to be registered under SSS.

Special Permits

For a foreign corporation which aims to invest in a tea shop, there are special permits that must be secured from specific government agencies in which the business will fall under. These permits will take care of any exportation deals:
 Bureau of Plant Industry (tea leaves)
 Bureau of Food and Drugs
 International Coffee Organization Certifying Agency
 Department of Environment and Natural Resources for authority to build or operate pollution-control devices (tea machines etc)
 Bureau of Product Standards for commodity clearance to ensure conformity with established standards
 Intellectual Property Office for trademarks and patent registration

Rough Budget Allocation for Business Registration

Business Name Registration 1,000 php
Barangay Clearance 1,500 php
Mayor’s Permit 10,000 php
Tax Registration (1% of projected capital) 500 + 30,000 php
SSS 500 php
Special Permit (500/ permit)(10 permits) 5,000 php

For registering a business for a corporation with a projected capital of 3 million pesos, the company must prepare approximately 50,000 for registration of the business and other special permits and clearances.

THE STUDY

Actual Data Gathering versus Euromonitor

While we may have the most accurate and most thorough analysis of the Coffee and Tea Trade in the Philippines in a more convenient and costly manner through the Euromonitor, we, researchers, still preferred the more reliable and more tedious procedure of first-hand Actual Data Gathering.

Since the study has to consider the feasibility of a business that has its own objectives and requirements, having a general overview is not efficient enough to draw a conclusion for a very specific venture. For example, if the business aims to cater to the Class A and B crowd, then we can conduct data gathering in establishments that cater to the same crowd. This is as compared to acquiring all data from Euromonitor and straining them to the relevant ones resulting to unnecessary data that we have already paid for.

Timeliness, is also another important factor to consider. Euromonitor may indeed have the latest information on a yearly basis, but there is not any more up-to-date than conducting a survey concurrent with the actual study itself. In addition, we have first-hand experience and information which may very well explicate the result of the study.
Immersion would be the benefit we could get in Actual Data Gathering, and a very crucial one at that. Actual Data Gathering could expose researchers directly to the condition of the market and how the business will fare with competitors. Moreover, it could also open venues to gather more information crucial not just to data gathering but for the study itself.

We would indeed extend effort in going to possible direct competition (other tea shops) and to observe and fill out a survey questionnaire, but being immersed in the environment itself and being able to take down notes with details left out in the laying out the plan for data gathering, we have the option to add in a comment or two that might help out a lot in the accuracy and reliability of the study.

THE STUDY

While we may have the most accurate and most thorough analysis of the Coffee and Tea Trade in the Philippines in a more convenient and costly manner through the Euromonitor, we still preferred the more reliable and more tedious procedure of first-hand Actual Data Gathering.

We have hired people to answer survey questionnaires about the shops located in the 15 designated areas. These researchers took the time to interview another customer during their visit on their assigned shop.

The team has identified fifteen places where the class A and B crowd usually hang out. These areas are:
1) Trinoma
2) SM North
3) Tomas Morato Strip
4) Eastwood City
5) Gateway Mall (in Quezon City)
6) Greenhills Shopping Center (in San Juan)
7) Alabang Town Center (in Alabang)
8) Mall of Asia (in Manila)
9) Bonifacio High Street, Serendra (in Taguig)
10) Glorietta
11) Rockwell
12) Greenbelt (in Makati)
13) SM Megamall
14) The Podium
15) EDSA Shangri-la Mall (in Ortigas).

The competition considered were: Starbucks, Coffee Bean and Tea Leaf, Seattle’s Best Coffee, Figaro, UCC, Bubble Tea, Kozui Green Tea, Tea Square and Teazers.

RESPONDENTS’ DEMOGRAPHICS

Gender
Coffee and tea shops are frequented by females. According to the study, 60% of the respondents are female. Although, the difference of the percentages do not put male coffee drinkers far behind, it is still safe to assume that coffee and tea caters to both feminine and masculine tastes.

Age
Majority (77%) of those who come to the shop are middle-aged, with ages ranging from 20-35 years old; fourteen percent consists of 36-50 year-olders; 6% are teenagers; and 3% are senior citizens.

Education
Most, if not all, patrons are educated. Sixty-nine percent of the respondents are college graduates, 12% are took graduate studies, 17% are college students and the remaining 2% are still in high school.

Source of Income
Sixty-five percent of the patrons earn their own money as the market for coffee and tea shops target those who have the highest purchasing powers- the earning professionals, 16% on one hand, obtains their income from business and since it is a very young market for this type of establishments, there is still a remaining 19% who ask money from their parents.

Profession
The young professionals who are frequenters of coffee and tea shops come from different fields such as: accounting, banking and finance, information technology, marketing, health care, customer service and
media and research. Fifteen percent have their business while 15% are still students.

RESPONDENTS’ BEHAVIOR

Majority of the customers are still coffee drinkers. Most of them still prefer their drinks hot, may be it tea or coffee.

Generally, people flock to coffee and tea shops to meet and hang-out with their friends. Other reasons for coming to the store are: to work, study, relax and unwind or to obtain freebies and promotional products. A meager 11% of the respondents claim that they go to the shop for the product itself.

Bestsellers
Here are the COFFEE bestsellers for the shops:
sumiyaki coffee
javanilla
tiramisu
peppermint mocha
frappucino
classic hot mocha
blue mountain # 1 coffee
barako coffee
javakula
cappucino

Here are the TEA bestsellers for the shops:
four red berries
coffee soy milk tea
chamomile tea
moroccan mint tea
green tea
zen tea
strawberry milk tea
genmaicha lemon tea
bubble milkshakes
chai tea
blueberry iced tea

Customers’ Insights

During the conduction of the survey, the researchers had a little chat with the customers of the café. The researchers found out some interesting facts on consumer behavior that actually helped a lot in determining the marketing approach for the Presotea shop.

What Customers Look For
Most of the customers go to coffee or tea shops to have a quiet place to study, work or meet with friends. Coffee or tea shops have even become a “date” place for couples instead of the usual hang-out places like a bar or the movies. Some business people also made coffee or tea shops an extension of the office. They conduct business meetings, settle deals or simply treat clients in these places. For those who do not have work to do, they just go to the shop to relax and unwind.

Product
The production of ready-to-drink coffee and tea has made these drinks a household beverage. So when customers visit a coffee or tea shop and pay ten times more than the actual price of these RTD beverages, they expect something extraordinary and unconventional with what they are going to order. For example, Bubble Tea offers Milk Bubble Shakes, a variant of your favorite tea made into a slushy drink with bubble pearls (sago) at the bottom. People (especially those who are real thirsty) order their tea from Tea Square because it is affordable and fast to prepare. Starbucks, Seattle’s Best Coffee and the Coffee Bean and Tea Leaf promote tea drinking using informative and artistic brochures that convey the history and benefits of the tea they are selling. To add to that, the aforementioned establishments offer freebies such as planners, signature toys and other collectibles for frequent drinkers especially during the holiday season. Other than these qualities and strategies, shops also offer cakes and pastries (and sometimes real meals and dishes) that go well with the drink.

The Place
Coffee and tea contain relaxing and alerting components, because of these, people will also look for the same thing in the shop where they order their drinks from. Since most of them come to coffee and tea shops to study, work or relax, they need a tranquil place with a cozy ambiance that is conducive to intimate conversations, relaxation or concentration. The shop should be well-lit, well-ventilated, comfortable, quiet and relaxing. It should be easy to find and accessible and must have convenient seating or floor design. Patrons of coffee and tea shops are accustomed to the rich aroma of their preferred shop, along with its relaxing music and zen-like atmosphere. Most of the shops design the place depending on their target market. Starbucks for instance, has mixed furniture (wooden chairs, couches, bench, umbrella tables etc.) to cater to more types of people. Figaro, with their signature wicker chairs and umbrella tables with the more “outdoor feel” connects more to older and conservative patrons. Wi-Fi service has also been a fast-becoming trend for any food and drink establishments these days especially for businessmen and students alike. People with laptops usually look for places with wireless connection to do work and surf the net for free while having their favorite drink.

Reasons for Coming to the Shop
Based on the accomplished survey sheets, here are some of the customers’ insights, in their own words:
Establishment Reason for coming to the store

Coffee Bean and Tea Leaf
>to chill out after work
>to catch up with a friend
>to have conversations
>to go on dates
>because starbucks is full
>to chill out without getting drunk
>to read quietly
>to be alone
>to conduct business transactions
>to avail the wi-fi service
>for the drink
>to finish a deadline
>a good place to use a laptop

Starbucks Coffee
>to chill out after work
>to discuss problems with friends
>near the workplace
>to conduct business transactions
>use wi-fi for research
>to obtain the planner
>to meet new friends
>have long discussion with friends
>to kill time
>to be alone and read the newspaper
>to socialize with friends
>just to chat
>baristas are friendly

Seattle’s Best Coffee
>to acquire the promo diary and goodie bag
>wi-fi connection
>to accompany a friend
>unlimited tambay time
>for comfort
>to bond with friends
>to rest from shopping
>to enjoy the coffee
>to relax
>to try out different types of coffee

Figaro >to have small talk over coffee
>to unwind
>to meet up with colleagues
>to spend time with family and friends
>to have some privacy
>to enjoy good native coffee at an affordable price
>meet with clients and potential investors
>to read the newspaper
>to catch up on reading
>to detoxify
>to have power lunch

Bubble Tea
>for the food and drink
>to meet up with friends

Kozui Green Tea >to study
>to try something new
>to hang out

Tea Square
>to have a refreshing drink

UCC >to conduct a meeting
>to spend time with family and friends

Suggestions
The researchers have asked if there are still areas for improvement for their favorite shops and here are the usual answers:
 “shops should promote the benefits of tea”
 “they should serve free mint”
 “wi-fi service is a must”
 “the place should not become a sellout just like what Starbucks has become”
 “baristas should appear friendlier”
 “we must support native coffee”
 “other tea shops should be as affordable as Tea Square”

MARKETING STRATEGY

Tea drinking has been an important part of culture especially of Asian countries. This is the main reason why as part of the Asian continent, bringing tea culture in the Philippines would just be like celebrating a practice as old as history in the modern times.

Since tea drinking is considered a part of culture (if not a culture in itself), it will definitely be able to penetrate a coffee-dominated country such as the Philippines. With the right marketing strategies and risk management, a tea shop will be able to fare competitively with other tea or coffee shops.

Even with a foreign name, tea is going to be a marketable product mainly because of its health benefits. In addition to that, the novelty of tea shops in contrast to the overwhelming number of coffee shops today, gives people a different and healthier alternative from sellout coffee shops.

For further upselling of the already known healthy product, we could use two effective approaches. One would be the traditional and more common media usage such as print (newspaper, magazines, brochures), tv and radio commercials, billboards and website. The other approach would be diffusion marketing or more commonly known as “word-of-mouth marketing”. With the latter approach, the tea shop could invite cool people during a buzz-worthy event and have them “spread the word” to invite potential customers. This way, their testimonials would be more believable than those who were actually paid to advesrtise a product.

Another approach would be “branding” the product. We will use the raw tea and repackage them maintaining the name and logo and distribute them in supermarkets nationwide. This will not only add to the profit but is also a good marketing strategy making the product a household name.

The target location for the first shop would be anywhere in the 15 locations in Metro Manila where the study was conducted and eventually put up shops in provincial areas as well. The main reason why the first shop is going to be situated in Metro Manila is that in the greater Manila area, the purchasing power is at peak. Presotea aims to cater to the Class A and B crowd.

Presotea will maintain its target market as it is in its Taiwan hometown: people-on-the-go. But since Filipinos prefer to lounge a bit while enjoying their drink, it is advisable to include canopies, couches, tables and chairs in the shop. This closely resembles coffee shops where people flock into because of the place to hang-out.

The tea shop will also offer other Chimei products by Ohyama Company partners such as ice cream, cakes and pastries.

The first shop will open with a kick-off event but right after the product is already distributed in the market.

So the next question is, why put up with the competition of established coffee shops? It is a matter of taking risks and creating demands. People know that tea is a healthy option, then they will seek it. They also need a “cool” place to hang-out and every known coffee shop are jampacked so they will look for a more tranquil and less crowded place.

APPENDICES:

Appendix I

PRESOTEA FOCUS GROUP DISCUSSION

Rationale

Focus Group Discussion is a venue designed to obtain defined information through an assigned moderator and a select few to openly discuss what they think of the Presotea products.

The data gathered in this strategy focuses on the product itself identifying its strengths and weaknesses from an unbiased third person’s point of view.

The planned FGD aims to have actual tea-drinkers and non-drinkers alike critique the Presotea products and solicit their opinion on how it will fare in the market.

It is important that the venue will create a comfortable atmosphere for the participants for them to freely share their ideas and perceptions.

We will have participants that are actual tea-drinkers to provide their expert opinion about the product- inquiries about the taste, presentation and its comparison to existing competition. We will also invite non-tea-drinkers to assess the Marketing Department’s approach to have even non-drinkers patronize the product. This data gathering technique is important in obtaining perceptions from future patrons of the product in a non-threatening environment which will allow them to provide uncensored opinions to better the product and its marketability.

Questions

Actual Data Gathering
 How was your experience in the actual data gathering (survey)?
 What did you observe about the crowd? From what classes were they?
 Did customers order food aside from their drinks or did they order drinks only?
 How long did they stay?
 In the duration of the stay, did they reorder? What did they order?
 Did they order tea?
 What is/are the reason/s why Filipinos do not drink tea as much as they drink coffee?
 Do you think they are there for the product or for other reasons?
 How was the place/ ambience? Do you think it is a factor for customers to frequent the coffee shop?
 Why do you think people frequent the shop?

Product
 How do you find the product?
 What can you say about the packaging?
 Will it appeal to the Filipino market?
 Is the taste too trendy or too contemporary or plain outdated?
 What are its components that catered very well to your taste?
 What are your tea preferences?
 What was it that you do not like about the taste? Any suggestions?
 How does it compare to the other teas you have tried and liked?
 Why drink tea?
 Do you believe that drinking tea is a culture as much as it is a cure for certain disorders?

Presentation
 Is the presentation too trendy or too contemporary or plain outdated?
 With how the product was presented, what market do you think it will most sell out to?
 With the tea-drinking culture in the Philippines as basis, how do you think that this foreign culture of tea-drinking will blend in?
 What are the key components in its presentation that are most appealing to its consumers?
 What will turn you off as a consumer in terms of presentation?

Tea Shop
 How do you think Presotea will fare in the market? Will the market patronize it?
 What could be the ways to penetrate the target market?
 What Filipino trademark can we incorporate into the shop to invite the Filipino patrons?
 What are the possible locations for business?
 Aside from tea-drinking itself, what other facets of culture can invite people to at least try teas?