Example Of Comprehensive Marketing and Promotional Plan of CHAGEE-Jasmine Green Milk Tea
Executive Summary
This report examines CHAGEE-Jasmine green milk tea, a product of CHAGEE. The business is a tea beverage brand that trades under the Sichuan CHAGEE Enterprise Management Co. name. This report will investigate the company and the product SWOT analysis. The report, as part of its strengths, will feature modern oriental teahouse designs, certified organic tea, and multiple products. Major weaknesses to be covered are premium pricing, reliance on New Zealand milk, and lack of human capital. Conversely, opportunities featured include growth of the foreign market, growth of the millennial and Gen Z markets, and growth in dairy production and quality. Major threats featured are increased competition, changing policies, and changing consumer behavior. The report suggests multiple pricing approaches, different raw materials sources, and training of human resources.
1.0. Introduction
History and Growth: CHAGEE is an emerging China-Chic tea beverage brand operating under Sichuan CHAGEE Enterprise Management Co. The organization opened its first store at Wuyi Road, Kunmin, Yunnan, on November 17, 2017, before undergoing massive growth and later shifted to other core cities across China like Shanghai, Fujian, Sichuan, Guizhou, and Guangxi, among others (CHAGEE 2023). The tea beverage brand has been opening multiple stores in Malaysia, Thailand, and Singapore. The business has more than 70 chains in these locations. Currently, the business has 2360+ locations across the globe (CHAGEE 2023).
Products and Services: The business focuses on natural fresh milk tea, pure tea, fresh fruit tea, and related derivative products.
Mission and Vision: “Inheriting and innovative oriental culture and tea affairs combine them into a new oriental tea shop” (CHAGEE, 2023)
2.0 Chosen Product Line
The selected CHAGEE Malaysia product is CHAGEE-Jasmine Green Milk Tea. This product is a green tea beverage blended with Jasmine Green Milk Tea. The unique green tea taste and aromatic scent of jasmine make this product popular in Malaysian chains.
Image 1: CHAGEE-Jasmine Green Milk Tea (CHAGEE, 2023)
3.0. SWOT Analysis
4.1. Strengths
4.1.1. Modern Oriental Tea House
Image 2: Modern oriental teahouse designs
One of the biggest strengths of CHAGEE is its modern teahouse designs. The business has been successful in bridging its traditional and modern tea beverage elements, and it is keen to replicate them in its store designs. Customers of CHAGEE-Jasmine green milk tea would enjoy their beverage in modern chains, which not only guarantees a peaceful ambiance but also signifies the company’s perfection preferences. Visitors to these chains would fall in love with their seat arrangement, which indicates the collective culture of Malaysia, China, and Southeast Asia locations. Customers will look forward to enjoying the best tea beverages in these chains.
4.1.2 Recognized and Certified Organic Tea
CHAGEE is recognized for its organic tea by relevant authorities in the U.S., Europe, China, and Japan. The organization in 2017 was feted for having “The Largest Organic Oolong Tea Farm in the World” (CHAGEE 2023). The company’s organic tea farm in Lincang, Yunnan, provides the optimum environment for the growth of tea. Customers are sure about enjoying top-quality tea products because of their recognition by top tea destinations across the world. For organic-conscious customers, CHAGEE-Jasmine green milk tea guarantees their preference.
The final CHAGEE-Jasmine green milk tea guarantees quality and organic products through its evident traditional steps. First, the company plucks these tea leaves by picking the best quality on the farm. CHAGEE pluck only fresh leaf: buds and the leaves below it. The next step is sun withering to allow natural reduction of the moisture content on the tea leaf. The process continues indoors, where chemical changes will take place in the leaf to increase amino acids and flavor. Subsequent core activities include tossing, rolling, repeat rolling, and finished semi-made tea (CHANGEE 2023). Additionally, processes carried out by CHAGEE to guarantee quality include stalk extracting and hot air drying. Moreover, the tea will undergo semi-made tea drying, shaping, and, lastly, wet fermentation. These important steps have been helpful in boosting the quality and reputation of CHAGEE-Jasmine green milk tea.
4.1.3 Multiple Products
The other strengths of the business are multiple products. The company provides natural fresh milk tea, fresh fruit tea, pure tea, and other tea-related products. The other popular CHAGEE product in the Malaysian store is CHAGEE-Jasmine Green Milk Tea. Customers have diverse preferences and could easily lose interest in repetitive products. CHAGEE is aware of the risks of depending on one product. Accordingly, they have multiple brands.
Additionally, multiple products mean increased revenues. The company features multiple products as a way of increasing its revenue collection from multiple market segments. For instance, the business is aware of the increased interest in tea beverages among its young customers. As such, the introduction of a revolutionary product like CHAGEE-Jasmine Green Milk Tea not only interests the young population but also generates revenues. Pure tea targets the older segment, while fresh fruit tea and related derivative products target the younger customers who are now earning incomes and are willing to spend to enjoy the best products offered by CHAGEE.
4.2. Weaknesses
4.2.1 Expensive Product
CHAGEE charges premium prices for its products, including CHAGEE-Jasmine green milk tea. Organic products are rare in the contemporary market, where the focus is on simplification of the process and cost saving. CHAGEE’s company website indicates that its premium trees are grown on a farm that is 1,588 meters above the sea level in the Lincang, Yunnan area” (CHAGEE, 2023). The location is responsible for providing an optimal atmosphere for the growth of tea.
Image 2: Tea Farm, Lincang, Yunnan area
Conversely, the business only uses local daily supplied fresh fruit carefully picked to ensure it aligns with CHAGEE’s goal of quality products. The strict procedures and processes demanded by organic products and customers increase the cost of production. As a result, these premium fruits, team, and milk increase the prices of tea beverages beyond the majority of Malaysians, who struggle to get decent milk daily. However, CHAGEE-Jasmine green milk tea identifies itself as a premium brand and targets affluent customers.
4.2.2 Reliance on New Zealand Milk
The other major weakness of CHAGEE-Jasmine green milk tea is the reliance on milk from New Zealand. According to the company website, the business only uses milk imported from the nation because it produces the best milk in the world. The risk of the approach is that the availability and prices of the product will depend on the dynamics of New Zealand. Additionally, the company is likely to pass these costs to consumers. For instance, for a product like CHAGEE-Jasmine Green Milk Tea, its prices and supply will depend on the availability in the New Zealand markets, and so will other core products of the business. Overreliance on New Zealand milk could explain why CHAGEE charges premium prices for its products.
4.2.3 Lack of Human Capital
The other significant issue that affects CHAGEE regards the need for more human resources in foreign outlets. The organization insists that its goal is to expand Chinese tea culture by mixing traditional and modern practices. The company’s outlets in China could keep up with these demands, especially with the traditional practices. However, the business needs more employees, especially in the South Asia region like Malaysia. These human resources could fit in the modern practices, but they need help with the traditional Chinese tea practices, which is what clients look for when visiting these chains to take the product. With the strict requirements by CHAGEE-Jasmine green milk tea to justify its premium status, its foreign outlets will need help to adapt and display these traditional tea practices.
4.3. Opportunities
4.3.1. Growth of the Foreign Market
CHAGEE-Jasmine green milk tea has the opportunity to expand to other foreign markets aside from Malaysia. The first stop for China’s tea has been Southeast Asia. According to Pandaily (2022), the combined population of Southeast Asia is 600 million, which represents a massive consumption potential. The certification of CHAGEE as one of the premium organic teas in a nation such as the U.S. and a region like Europe has been increasing its target market. The business also has the potential to penetrate the Australian market, which is warming up to the Chinese tea culture. The growth is not limited to foreign nations alone. CHAGEE has the chance to tap into the Chinese market that is keen on different organic tea flavors.
4.3.2. Growth of the Millennial and Gen Z Market
The Millennials and Gen Z are keen on experimenting. CHAGEE features multiple products aside from pure tea. The growth in the target market means that CHAGEE will find a market for products such as natural fresh milk tea, fresh fruit tea, CHAGEE-Jasmine green milk tea, and other related beverages. The company has the opportunity to grow its revenues with the expansion of its product portfolio, especially for this group with varying preferences.
The other opportunity that follows the growth of this target group is disposable income. The target group in Malaysia, other Southeast Asian Countries, and Western nations have been registering a growth in their disposable income. Majorities of millennials and Gen Zs are in employment or are looking forward to promotions in their workplaces (Sidorcuka and Chesnovicka 2017, p. 808). The status means that they have disposable incomes to purchase premium products like what CHAGEE-Jasmine green milk tea offers the target market. Therefore, the business is likely to benefit from the growth of the disposable incomes of the target population.
4.3.3 Growth in Dairy Production and Quality
China’s growth in quality milk production is another opportunity for businesses like CHAGEE. The company has been relying on milk for New Zealand to spice up its premium products. The idea for selecting New Zealand milk is the quality of the product. However, China has been boosting its dairy quality and production, which will benefit a business like CHAGEE. According to the U.S. Department of Agriculture report, China increased its raw milk production to over 42 million metric tons (MMT) (USDA 2023). CHAGEE can take advantage of the increased raw materials. Improvement in Chinese milk quality control means that companies relying on dairy raw materials should refrain from importing from distant nations such as New Zealand.
4.4. Threats
4.4.1 Increased Competition
CHAGEE faces increased competition from local and international markets. The current China and Southeast Asia markets are saturated with players dealing with similar products with different brand names. For instance, CHAGEE’s products, such as natural fresh milk tea, fresh fruit tea, CHAGEE-Jasmine green milk tea, and other related beverages, are facing stiff competition from both domestic and global markets. Although the business argues that it produces premium organic products, multiple companies are producing organic tea and other substitutes. As such, the market is saturated. CHAGEE cannot claim exclusive dominance in China and other markets, especially the Southeast Asia areas.
4.4.2. Changing Policies
The core factor that could prevent CHAGEE-Jasmine green milk tea from dominating the U.S. and European markets is changing policies. For a start, emerging geopolitics has been responsible for the difficulties in the penetration of some of China’s products in the U.S. and the U.K. markets. In one example, the difficult relationship between the U.S. and China during President Trump’s era meant that some of the products from the Asian giant could not access its markets (Nordin and Weissmann 2018, p.233). Issues such as human rights have also been preventing some of the Chinese products from hitting Europe. The idea of the market is that accepting these products would signify the acceptance of the oppression directed toward workers or suppliers. Changing global policies has been slowing down global markets from enjoying the best beverage like what CHAGEE offers its consumers.
China and the rest of the global nations have also been introducing strict policies to control the movement of agricultural products, which affects a firm like CHAGEE. China’s policy of protecting local industries means that the product could experience strict regulations when it is sourcing its raw material from New Zealand. Changes in agricultural policies to protect populations in Southeast Asia also mean that there are increased risks that some products could be banned from entering traditional markets. The ever-changing policies present the biggest threat to CHAGEE.
4.4.3. Changing Consumer Behavior
Global consumer behaviors are changing at a faster pace, which could affect CHAGEE-Jasmine green milk tea’s performance. Currently, these consumers have a high demand for traditional Chinese tea and organic products like CHAGEE-Jasmine green milk tea. However, consumers could change their positions and switch to other beverages in the market within a short period. The success and the existence of the product depend on the ability to switch to customers’ preferences, a fete that takes time to attain.
Recommendations
Introducing Multiple Pricing Strategies
CHAGEE is famous because of its premium products. However, in the increasingly competitive market and the global economic turmoil, individuals are selecting to avoid premium products for cheaper alternatives. The majority of potential customers who could purchase CHAGEE’s products are going to other chains that stock different products with dissimilar nutrients. The company could reverse the process by introducing multiple prices.
The business could consider competitive pricing to sell its CHAGEE-Jasmine green milk tea product. The company could slightly reduce its prices to entice consumers to give up “ordinary” tea for this top-quality product. Consumers could react to any reduction in the current prices to make purchases (Ketelsen et al. 2020, p. 120123). While this technique would guarantee an increase in sales, the company should be keen to ensure it does not reduce profit margins significantly. Organic products are expensive compared to their alternatives; thus, CHAGEE is justified with the setting of premium pricing.
The business should also select to match the prices of other premium brands in the market. CHAGEE-Jasmine green milk tea should ensure that the prices of its teacups match those of substitutes or the same premium brands in the market. For instance, the price of CHAGEE-Jasmine green milk tea should stay consistent with what McDonald’s offers for similar beverages. The move is important in maintaining profit margin and premium customers. The company could choose to ignore the pricing for regular tea beverages in the market.
The company should also select psychological pricing to attract and maintain customers. CHAGEE-Jasmine green milk tea could be selected to remove a few cents from the cup of tea to make customers believe there is a reduction. Additionally, the firm could sell organic tea with a cheaper accompaniment at an “offer” price (Tiwow et al. 2022, p. 1170). The move will entice consumers to believe that the product is offering better offers at a favorable price. The move will help the company to maintain the price of the organic tea and even more, especially when it overprices the accompaniment.
Change Raw Materials Source
CHAGEE should also take advantage of the growing dairy farming in China to reduce its importation of milk from New Zealand. Majorities of the company’s products, including CHAGEE-Jasmine green milk tea, rely on milk from New Zealand. In the era of changing geopolitics, firms must be vigilant to take advantage of local resources to minimize overreliance on foreign raw materials (Lim and Thrower 2021, p. 3; Salimi and Amidpour 2022, p. 609). China’s dairy market has been experiencing changes, especially regarding the production and quality of milk. These changes mean that a company such as CHAGEE should aspire to source the product from local suppliers or even start local production.
CHAGEE should consider setting up its dairy production farm to monitor the production of quality milk like the one it has been sourcing from New Zealand. The company could send its experts to New Zealand to learn about dairy farming and come to apply the same to China. The approach would not only save CHAGEE raw material importation costs, but it will also help the business monitor and improve its product quality, in addition to eliminating risks emerging from changing geopolitics. The firm should also take advantage of the assistance provided by the Chinese government to dairy farmers to improve its craft and production of milk. The move will help improve the raw materials of a product like CHAGEE-Jasmine green milk tea.
Improve Service Presentation in Outlets
The success of CHAGEE’s products in the global setting is the ability to convince consumers that the services they get in its outlet in China are the same treatment they will get in Malaysia, the U.S., Europe, and worldwide. After all, the reason why these consumers visit these outlets is to enjoy China’s traditional services and products. CHAGEE will attain this goal with proper training of locals.
The organization must look forward to the hiring and recruitment step as the core area that will manifest during training and service delivery. CHAGEE must ensure the smart hiring of individuals who are willing to adapt and practice Chinese tea culture as a way of serving its customers. The approach is the same technique a global company like the one Starbucks instills in its foreign workers to help push its values. Only domestic employees who pass this stringent test should qualify for the training process.
The other improvement would include areas such as serving and handling requests. CHAGEE has specific standards it applies to its operations in China, which customers in other chains would expect would continue. CHAGEE must improve its training on these service practices and respond to customers’ orders to facilitate uniformity and identity. Currently, staff could be blending the host nation’s practices and modern techniques that would dilute the entire meaning of Chinese tea culture. However, with proper training, these employees would be able to display Chinese tea culture, in addition to preserving the identity of CHAGEE.
Digitalization
The success of CHAGEE-Jasmine green milk tea marketing is through the incorporation of digitalization marketing. Social media marketing is the most significant approach CHAGEE could use to popularize CHAGEE-Jasmine green milk tea. The company could use platforms such as WeChat, TikTok, and international ones like YouTube and Instagram to market CHAGEE-Jasmine green milk tea. The benefit of using these social media platforms is the significant number of customers using them for communication, social activities, and the receipt of marketing information. Additionally, these platforms are cheaper compared to traditional approaches like TV and outdoor advertisements to popularize the product.
The other marketing approach integrated by the business should be social media influencers. This digital marketing method involves the use of influential people in society to help push the product. For example, the CHAGEE Malaysian outlet could use Lee Zii Jia, the badminton player, to popularize CHAGEE-Jasmine green milk tea. The selection of the athlete is because of his significant social media followers, who can be potential customers. The use of social influencers is an easy approach to reach a significant target market.
Conclusion
CHAGEE features multiple products, but one of its significant brands is CHAGEE-Jasmine green milk tea. The report examined the product and the company’s SWOT analysis. Core strengths featured include modern oriental teahouse designs, certified organic tea, and multiple products. On the other hand, major areas for improvement facing the product include premium pricing, reliance on New Zealand milk, and the need for more human capital. Conversely, opportunities featured include growth of the foreign market, growth of the millennial and Gen Z markets, and growth in dairy production and quality. Major threats featured are increased competition, changing policies, and changing consumer behavior. The recommendations available to CHAGEE for the product include multiple pricing strategies, improvement of service presentation, and change of raw material source. The evaluation of CHAGEE-Jasmine green milk tea is through conducting the company and the product’s SWOT analysis. The recommendation is a way forward to boost the brand image to the target customer group.
References
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