Davit's Tea Brand Audit Proposal

The objective of Davit’s Tea brand audit is to evaluate and relate the theoretical approaches with practical market research and mainly to come to know about the inventory and exploratory expects of the brand. The behavioral and psychological nature of the brand equity will be analyzed and the current position of the brand in industry will be examined. We would like to study and research the brand effectiveness, strategy, positioning, customers’ perception, and further testify the brand in a multidimensional perspective.

Marketing and Business Environment

Davit’s Tea is the first Canadian-based tea company, established by David Seal, a young passionate entrepreneur gaggers to bring the happiness taste of life to people through the consumption of tea. Davit’s primary functional vision is to provide consumers with a high quality tea developed by its own tea expertise. The company builds its very own brand equity and engagement with customers by delivering a sense of belonging and connecting people who are willing to share their tea experiences together in the brand community.

Its first store was successfully launched in 2008 on Queen Street, a metropolitan area in Toronto, Ontario. Traditionally, existing tea consumers re limited to experience a small and narrowed market where not many selection of tea was offered. However, Davit’s Tea has taken the leading stance in the industry by breaking the traditional concept of tea, informing tea alone possesses an indefinite potential to be developed and grown. In Davit’s Tea store, customers are offered with over 1 50 types of flavored tea from all over the world.

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It also differentiates itself from other tea brands such as Tavern from Cataracts and Tim Horror’s by providing variety of seasonal tea collections and the Tea of Month, which can be easily made at home, office, and anywhere you want. Unlike Cataracts where tea and coffee sold are consumed on the spot, Davit’s Tea uniquely sells every supplies needed for tea and also shows how easy and fun it is to make tea with people at your own place. By doing so, people have a chance to be more exposed and dissolved into the ‘tea culture’ with various people in their daily life.

However, back in 2008, investing in the tea industry was considered as a risky move for many beverage companies. According to Statistics of Canada, both tea and coffee industry where most weight is heavily put on represents 1. % of the value of sales of food and beverage goods manufactured. The consumption of tea both in Canada and internationally was lower by far relative to the coffee consumption. Coffee alone generated the revenue more than $1 billion per year whereas tea served just above than 500 million in 2007. The gap between tea and coffee industry’ seemed to be significant and definite at that time.

However, currently in Canada, intensive competition has been rising among beverage brands and retail stores as the consumers preferences and tastes had shifted toward products that enable ‘healthy lifestyle’. Tea is a profitable commodity. Store footprints are usually small, while mark-ups and profit margins are high, ranging from 50% to 70%. More businesses attempt to enter the industry to expand the business scale. For example, Tavern, a tea specialty acquired by Cataracts aggressively positioned its products in response to the competition.

Stores across America feature ‘Opera Chaw Tea’ which is personally blended and developed by Opera Winfred, a world renowned and influential TV show host, writer and publisher, to capture more potential customers in beverage industry. In addition, Tavern plans to expand its tea buss news around the world by launching more tea stores every year. Current challenges and untapped opportunities for brand equity Current Challenges Davit’s Tea has achieved many successful milestones and developed its own competitive advantages over other competing companies.

However, there are still some weaknesses and challenges that Davit’s Tea is facing at the moment. Although there are various challenges for Davit’s Tea, the biggest four challenges for Davit’s Tea are 1) its unique but limited operational system 2) heavy training expense due to a high turnover rate 3) difficulty in upturning customers in some countries with a strong coffee preference culture and 4) its limited marketing strategy. Firstly, Davit’s Tea is famous for owning its unique operation system.

The management team of Davit’s Tea itself operates all the stores in Canada and SACS; there are no franchise opportunity unlike Cataracts, Tim Horror’s and Chaw Time. This system may be advantageous for them because the company is able to control every elements starting from location selection to recruitment process, however, this is one of the biggest challenges the Davit’s Tea is facing. This operational system is time-consuming and it engages resources inefficiently. There would be some limitations to the numbers of shops to open and earning investments from outer company if Davit’s Tea continues to hold back the franchise opportunities.

Consequently, this will decrease the brand awareness and customers’ accessibility of Davit’s tea. Secondly, Davit’s Tea is suffering from the huge employee training expenses due to a high staffs’ turnover rate. Many workers quit the job due to high expectation from the company compared to their low compensation system and low promotion opportunities. Even though the Davit’s Tea has high petition for friendly and kind customer service, their employees’ experiences would create the negative impression upon brand’s image through word of mouth or posting negative reviews on online if those employees’ complaints do not resolved.

It took 2 times more expenses to train employees to be tea expert compare with training programs from their competitors, but once the employees decide to leave the position, the value resources will be mostly wasted. Third, some countries have strong coffee culture; Most of the North American and European countries like America, Canada, Brazil, Italy, Norway had been influenced by coffee for hundreds of years. The Davit’s Tea is only serving hundreds of various teas on their menu if so the Davit’s Tea will miss out a large amount of customers or markets who prefer coffee more than tea.

Even though the interest on tea is increasing, the countries’ culture is hard to change just because of the world trend has changed. Lastly, the Davit’s Tea marketing is too heavily relied on social media. According to research, Davit’s Tea is spending a lot of money and time on social media marketing such as replying to every single customers’ tweet or hiring more staffs in social media marketing department. However, if they continue to approach customers only with social media marketing then their target customers would be very limited to youth people and they would be hard to raise their brand awareness.

They should consider other marketing tools to raise brand awareness not solely with social media. Opportunities for Brand Equity Regarding challenges the Davit’s Tea is currently facing, there are some opportunities the Davit’s Tea could increase their brand equity and reinforce the challenges they are facing. First, they can create some products to be sold at wholesale markets such as Metro, Lowbrow’s, Cost and etc. Brand trials and experiences are important in order to raise the brand equity.

In order to do so, Davit’s tea could produce some products designed for wholesale sale, enabling to increase customers’ accessibility, trial and raise its brand awareness. If the customers have enjoyed the purchased products from the wholesale market than there are high possibilities this would lead to brand preference and visit of retail store nearby. Secondly, there are a lot of markets left for Davit’s Tea, especially, Global markets such as Asia or Europe. Under strong preference of coffee in European countries, there are increasing interests on decaffeinated products such as tea due to health concerns.

Davit’s Tea could open online orders for other countries as well in order to approach new customers who are willing to buy Davit’s Tea products in other countries. Furthermore, Davit’s Tea can be more active on promoting its brand by advertising or using other various marketing methods. As it has been discussed above, marketing of Davit’s Tea is heavily relied on social media. However, in order to reach various customers and to raise its brand awareness, it should give a shot on other marketing strategies. For example, it could hang up the poster on the ETC wall just like Tim Horror’s to allow more potential customers to recognize.

Also, it can use Youth videos to introduce an easier way to make a tea at home, or release more an articles regarding the tea industry and their company on magazines/ newspaper. SOOT Analysis Drivers of current brand equity Davit’s Tea has strong brand equity, created with its uniqueness, favorable and strong factors of the brand. Subconsciously, customer, company and competitors could create brand equity. Positioning and identifying is a first step to build brand equity. Davit’s tea was first opened in 2008.

Currently, they have opened about 120 stores in North America, and be;en the years of 2012 to 2014, they have opened about 40 more stores. The increasing number of stores builds the awareness of Davit’s Tea by providing easily accessing availability to the consumers. Davit’s Tea is focusing on sales of specializing in tea and tea related products. Since tea is recognized for healthy beverage that involves relaxation feelings, which is the opposite of coffee or energy drinks, the consumption of tea is growing in a fast rate and about 84% of the population consumes tea every year.

Tea is the 2nd most consumed beverage in the world, and the annual sales of tea is estimated to $423 million from annual grocery sales, and $760 million from annual food service sales. Since the consumer’s purchasing of tea is increasing, their interest towards Davit’s Tea have also increased. By positioning and identifying its brand, Davit’s Tea became one of the most recognized teashop in Canada. Furthermore, there are various articles about the massive expansion and innovative corporate structure of Davit’s tea.

This became an unofficial advertisement, and built credibility by distancing itself from rival rand. One of the unofficial advertising examples is that, Melanie Barbaric, the Events & Community Relations manager of Davit’s tea, gave a Davit’s tea package with hand written note to Opera Winfred. With no expectation at all, this also has brought an amazing effect of advertising in Davit’s tea. Opera have posted the picture on her Mainstream, where she has more than 1. 3 million followers, and 32,377 people have liked her photo.

Nevertheless, she mentioned about how she favors Davit’s tea on O Magazine. One small gift to a famous person has raised the huge awareness of Davit’s tea, and since Opera is a celebrity with enormous credibility image, Davit’s tea also gained the reputation of credibility. Davit’s tea frequently releases new flavors with over 1 50 variety kinds of selections from all around the world. They have their own style and design, and special collections for holidays and other special occasions (e. G. Christmas Collections, Summer and Winter teas, and Cold fighting teas).

Since Davit’s tea are reputed for its innovative design, the collections gives imagery of perfect gift for people and individuals themselves. Moreover, the unique names of different kinds (e. G. The Skinny, Happy Kampuchea and Read My Lips) gave various positive feelings to people and established brand equity. Potential Drivers of Future Brand Equity Davit’s tea has created its brand equity by informing customers about their position and brand identity, and gave credibility with positive feelings about its brand.

However, they need new and innovative strategies to harden its brand equity. Recently, Agriculture Canada Food Trends Study predicted that in year 2020, the tea consumption would increase to 40%. Louise Robbery, the president of Tea Association of Canada mentioned that one of the factor f the raise of consumption is due to the retiring of baby boomers, who are concerned about their health, and will likely be drinking more tea at home. Therefore, One of the strategies that Davit’s tea should use is to increase the number of stores, which will give location benefit to consumers.

Moreover, Davit’s tea should use advertising marking to raise its reputation. TO Create a TV commercial, they need to hire an advertising company or a celebrity. Hiring a recognizable celebrity costs about $kick-$300 and making advertising costs more additional. Since Davit’s tea is still a small brand with mall budget, they should make a campaign video to promote. One of the examples is the smooth Valentine’s Day video of Wilkinson Sword Shaver Company. This theme of the video is that a man should shave on valentine day, because it is not a day to irritate a lady.

It cost small budget to make a video, but have raised more than 1,700,000 views on Youth. A campaign video that shows how healthy it is to drink a tea or the free trade of Davit’s tea could be an effective and meaningful future driver to building its brand equity. Today, due to cheap and easy access of smart phones, the number of smartened users has reached about 1. 5 billion users. Play store is the smart phone application store of Samsung. In the Play store, the application for Cataracts reached 5 million downloaded, while the application for Tavern reached 50 thousand downloaded.

Cataracts’ smart phone application personalizes by each customers, and has an everyday promotion that if a frequent purchasing customer buys 12 cups of coffee, they get free drink. Howard Schultz, the CEO of Cataracts said that there are more than 7 million mobile transaction is in the stores each week. Since more number of people use different smart phones from other companies, creating a rationalized smart phone application could also help building its awareness and efficiency. Lastly, customers are sensitive about personalization.

The brand that could satisfy this factor could create loyal customer, who loves the brand and uses the brand as identifier of themselves. Coca Cola had ‘Share a coke’ campaign that grew sales for the first time in 10 years. This campaign was writing 250 most popular names on each bottle of coke, and this campaign created the personalized feelings to the consumers with their names on the bottle. Benchmarking this idea, creating tea names with popular names could create a belonging feeling to consumers by personalizing.

Data collection methods

Data Collection and marketing research is one of the most crucial processes that links the customers and end users to the marketer through information which used to identify and define marketing opportunity while generating, evaluating and refining marketing performances as a brand. The goal of the research and data collection is to identify and assess how changing elements of marketing mix and brand equity impact customer behavior and perception, thus, it is very important to learn and audit a brand from customers’ perspectives and responses.

We plan to conduct a mixed- methodology approach in both qualitative and quantitative research to collect data on the brand audit to make sure both subjective and objective opinions are valued in the data collecting process. Qualitative Research Qualitative Research is an in-depth exploration of what people think, feel, or do, and most importantly, the reason behind the purchasing action. We believe it’s very helpful to understand the brand performance when customers could have opportunity to talk about their unique experiences with the brand and therefore we propose 2 methods: focus group and depth interview. . Focus groups In focus groups, we will be the moderator uses a scripted series of questions and topics to lead a discussion among a group of people. The advantage of using a focus group is that we could get more subjective response other than a yes or no answer and it will be beneficial for us to further integrate customers’ responses into analysis. We would like to take a neutral stance and subjectively ask questions such as “please describe your experience when shopping at Davit’s Tea” or “How do you feel about the brand? To give people more freedom to discuss both positive and negative opinion towards the brand. In order to get a more relevant and balanced result, we would like to conduct at least 3 groups of people (with around 5-7 people in each group) from age 15-60 and we expect the targeted participants would have various demographic backgrounds: gender, occupation, spending habits, disposable income, Tea/coffee drinking routine, etc. 2.

Depth Interviews

Depth Interview is another method we would like to use by interviewing people with unstructured and open-ended questions. We would like to conduct an interview in a more intimate environment or via telephone since it allows participants to talk more openly and be more comfortable to give arsenal opinions. The results might not be 100% statistically re opinion may not represent a large enough segment Of the POLL Nevertheless, focus groups and interviews yield valuable insight customer attitudes.

Quantitative Research

Since the qualitative research might not provide absolute stasis findings, we therefore decided to conduct quantitative research analysis to determine the result. We plan to use a structured quo with mostly closed questions that allow respondents to select it from given list of possible responses. We would distribute sues both online survey resources and printed version to fill out. We excel to report the findings with statistics, tables, and graphs. 1.

We would like to use “snowball sampling” strategy by asking rest participants to pass along a survey link to relevant others, or visa locations where the target market is likely to congregate. We WAC pass the survey through social network like Faceable to ask fan and people online to fill out the question. We will use accessible free online survey programs like surveying’s. Com, Zimmerman, Monkey. Also, in order to gather more responses, we plan to go around campus or library/coffee shop to ask people take 2 mini out while waiting for elevator, etc. Please see possible survey IQ Appendix 1. 2.

Quantitative Observation

Individual responses to surveys and focus groups are sometime from people’s actual behavior, and therefore, we plan to use q observation method to observe some customers purchasing be stores, at work, or other reachable locations. We would like to o customers’ behavior in Davit’s Tea and their competitors (suit by examining how customer making the order at different store Davit’s Tea has very different and unique way to make the order have a traditional menu displayed any where in store, instead, t tea boxes placed on the wall with special names for customers I fore making the purchasing decision.

We will observe and cool customers’ knowledge about the brand and further integrate to Other possible tools to manage data Since The Rotten School of Management maintains a site license: and students to use the Qualities Research Suite, we would like advantage of this system and use it to apply on some of data c methods.