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Chi-Tea TumblerOriginal Idea Developed & Researched by: Daisy MartinezAdditional research executed by: Spring 2016 New Venture Team of 4Financials have been omitted due to developing research Table of Contents Executive Summary 1.1 Business Opportunity1.2 Product or Service Description1.3 Current Business Position1.4 Company Bio/Company Analysis 1.5 Financial Potential1.6 The Request2. The Industry, Competition and Target Market 2.1 Industry Overview/Industry Trends 2.2 Market Size and Growth 2.3 Research and Development2.4 Target Market2.5 Customer Analysis3. Product/Service3.1. Service Description3.2. Competitive Comparison3.3. Service DeliveryMarketing Plan4.1 Competitive Advantage4.2 Price4.3 Place4.4 Promotional Plan4.5 Feedback5. Financials6. Goals, objectives, future plans, risks Executive Summary 1.1 Business OpportunityThe business opportunity we are capitalizing on is the tea drinking industry. With more people moving into the healthy lifestyle trend we decided to revolutionize the ordinary tea tumbler to better suit customer needs. The tea tumbler that we have created has a state of the art infuser and filtering system that differentiates itself from competitors. Avid tea drinkers will consume various types of teas, even creating their own flavors by mixing different loose leaf tea leaves. The matter we are deciphering is whether or not consumers are truly making the most out of their tea leaves. Meaning, are they actually saving money by purchasing tea leaves and mixing their own drinks or should they continue to purchase prepackaged leaves. We are also figuring out what is the consumer’s purpose for wanting to use loose tea leaves instead of prepackaged portions?Chi-Tea Tumbler’s purpose is to help consumers become more conscious on the proportion of tea leaves being used and how to create the “perfect” flavor according to the consumer. Tea tumblers currently on the market only offer infusers that do not give consumers the option to stop the infusion unless consumers dispose of their tea leaves. The problem with this is that the tea leaves being thrown out still have flavor left in them and can be used with added water. Unfortunately, consumers do not have a convenient way of storing these leaves, causing them to be disposed of. Chi-Tea Tumbler will have incorporated sensors that act as a scale to notify consumers when they have added the suggested amount of tea leaves to create the perfect taste. This will resolve any overbearing, bitter tastes that may arise.Another design issue we are trying to solve is how to incorporate a storage department within the tea tumbler so more leaves can be stored for later use. This will ultimately depend on the space required to incorporate a storage compartment and if this is an issue that consumers feel is affecting their tea drinking experience. 1.2 Product DescriptionChi-Tea Tumbler will incorporate a filter that can be turned on and off to dispense tea as desired. It will have an attached storage compartment at the bottom that can be unscrewed to store additional tea leaves. This will make a customer’s refill process much more convenient. We will also incorporate sensors that weigh how much tea leaves are added to the infuser. This way, customers will know they are using just the right amount of tea leaves for the perfect cup of tea. 1.3 Current Business PositionAs of now, the focus is getting Chi-Tea Tumbler ready for launch. We are focusing on short term goals and financial forecasts to enable us to reach our long term goals. We would like to establish a base in our company and later expand and develop our product line. Through research, we have established a target market and marketing approach. We will continue to conduct interviews with avid tea drinkers and tea manufacturers to make sure we are servicing all of their needs. 1.4 Company BioOur company strives in giving our customers the best possible product that we can develop. We want customers to spread the word about our tea tumbler which is an excellent source of advertising to get our product as much exposure as possible but, more importantly, we want to retain our customers and have them be loyal to our brand. Our company consists of a knowledgeable, innovative team that has great chemistry and listens to each other's idea. We are open to different opinions and rely heavily on the satisfaction of our customers. 1.5 Financial PotentialWe are newcomers into the tea tumbler industry, but as of now there are only a few companies making tea tumblers which are being sold at retail stores or to specialty tea shops. When consumers are making a tumbler purchasing decision, a few factors they consider are: color, design, and quality. There is little to no variety and each tumbler is practically the same with only size and color being the main differentiators. Argo Tea carries a handful of tumblers, each with the same simple structure, only having the logo printed on the bottle. This gives us more financial potential because we are bringing a revolutionary tea tumbler that is going to change the way consumers use tea leaves. The tumblers will come in a variety of colors and be sold in various specialty tea shops and retailers. Another issue we came across is that there is little to no advertising seen with tea tumblers. Marketing is especially important because it is the line of communication between the consumer and the company. Our plan is to hit marketing strong and spread the word of our advanced tea tumbler which will bring even greater financial potential. 1.6 The RequestAs of right now, our plans to fund our tea tumbler company is by utilizing a startup fund website called Kickstarter and to bootstrap the company, which will most likely be our main source of funding. With the money we acquire from these two sources of funding, it should suffice to get us through the first two stages of the venture life cycle which are the developmental stage and the startup stage. When we get to the survival stage, we will look at the company’s finances and purchasing patterns to evaluate how well our product is selling and if additional sources of funding will be required. In the event that we will require more funding, our company will look for angel investor. If we consider an angel investor as an extra source of funding, we are willing to give a certain return on their investment or give a certain percentage of the company. Having more capital to invest in our company can help it grow rapidly and see possibly substantially higher returns. This will be ideal in the rapid growth stage. Angel investors may allow us to gain access to other resources through their vast networking system such as production companies, manufacturers who specialize in tea products, and even mentoring. The Industry, Competition and Target Market 2.1 Industry Overview Aside from water, tea is the world’s most consumed drink with an average of 51% of Americans drinking tea every day. The global beverage industry had an annual worth of $1.4 trillion in 2013 and is projected to grow by at least 2% each year. The growth of the beverage industry can be segmented in the United States by categories of non-alcoholic beverages. While fruit beverages, carbonated soft drinks, and value added water decreased in volume during 2012, tea saw a 4.9% increase in volume. Although the tea segment did not grow as much as energy drinks with 14.3% or coffee with 9.5%, it is continuing to gain popularity as a healthy alternative for caffeine consumption. The non-alcoholic beverage industry can be broken down to classify tea into its own industry in the US. According to the Tea Association of the USA ready-to-drink and iced tea mix comprised 52% of all tea prepared in the US. Instant and loose tea accounted for the remaining 48%. The most common tea in the United States is black tea, making up 85% of consumed tea followed by green tea at 14% and white tea at 1%. Industry Trends Convenience and Availability. Consumers demand beverages that are easy to carry and drink during their busy lifestyles. The convenience of tea is one reason why it is gaining so much popularity. Ready-to-drink tea and single serve tea packets give consumers their beverage in a very convenient way. The increased availability of tea can be seen with supermarkets increasing their tea products as well as more tea shops opening up.Health and Wellness. Consumers’ growing consciousness of their health and well-being has been a crucial factor in tea’s popularity. The benefits of tea are becoming well known throughout the US as consumers are starting to avoid sugary drinks. Tea is starting to be seen as a healthy alternative for people who want caffeine but do not want to drink coffee.Versatility and Customization. Tea can be consumed in various different ways, from ready-to-drink iced tea to loose leaf teas in tumblers. Consumers have many different choices in how they drink their tea as well as different flavors. Tea flavors vary from black tea with a moderate amount of caffeine to caffeine free herbal tea. 2.2 Market Size and GrowthThe amount of loose leaf tea used in tea tumblers is increasing as the amount of tea consumed in the US is increasing. According to the Tea Association of the USA, the total wholesale value of tea sold in the US has grown from less than $2 billion in 1990 to over $10 billion in 2014. The increasing popularity of tea in the US over the past 20 years made the US the second leading importer of tea in 2014. The Tea Association of the USA also concluded that as consumer demand has grown, frequent innovation and the marketing of new products have helped keep tea top-of-mind for consumers. Our new tea tumbler is innovated for the consumer to conveniently brew tea and store additional tea leaves. The amount of shelf space supermarkets and convenience stores allocate to tea has increased because of its popularity. Tea products such as tumblers and loose leaf containers can now be found in the soft drink aisle and the health and wellness aisle. Tea has not only been steadily growing in supermarkets, loose leaf tea and tea tumblers are now a common purchase in tea shops across the country. The industry trends surrounding tea have contributed to its market growth because people are becoming aware of how healthy and available tea is. Since our new tea tumbler will allow consumers to brew their own tea using loose tea leaves, it has a great chance of success because of its known health benefits and growing presence in supermarkets. National Projections- The Tea Association of the USA anticipates strong continuous growth for tea in the United States. Tea sales are forecasted to double over the next five years.- Future success of tea depends on the support of consumers who are looking for healthy beverage choices.- The growth of tea will also be driven by its convenience in stores and the innovation of new tea accessories. 2.3 Research and Development Our new tea tumbler was invented as an upgrade from popular tea tumblers in the market today. Popular tea tumblers in the market include a large screen attached to the lid where one can put loose leaf tea. The tea tumbler gradually dispenses the flavor of the tea as it steeps. Our new tea tumbler has a small compact screen attached to the lid that only allows the consumer to put the correct amount of tea leaves without wasting any. The screen is able to be twisted shut to prevent the over steeping of tea leaves. Our new tea tumbler also has a chamber attached to the bottom to store additional dry tea leaves so consumers can drink multiple cups of tea without having to carry a separate container. 2.4 Target MarketOur target market is millennials because consumers, ages 18 through 29, tend to drink more tea than any other age group. When we walk around campus, we see students with tumblers in their hands heading to class either hot tea or iced tea. Also, while walking around the city we see young professionals with tea mugs in their hands trying to get to various workplaces. As a college students and young professionals that drink tea, we are consumers ourselves, so we are knowledgeable of what the right target market should be. As a result, we are confident that our target market is the right choice to maneuver. Studies have shown the tea is the hottest trend among millennials, whether hot or cold. According to the article “Coffee's millennial problem: tea increasingly popular among young Americans” by Peter Moore on “.... tea has been consistently growing in popularity in recent years, with consumption growing 20% from 2000 to 2014.” and also saying “Among under-30s, however, coffee and tea are equally popular, with 42% of millennials preferring coffee and 42% opting for tea.” Furthermore that, “Over a quarter (27%) of under-30s say that they only drink tea, compared to 18% who only drink coffee.” Tea increasingly becoming the hottest trend gives us confident that our product will be a valued asset to our target market. 2.5 Customer Analysis Our focus on the millennials group is substantial because they are more acceptable to the convenience of having an app to provide them with nutritional facts. Based on the Tea Association of the U.S. Inc., millennials represent approximately 4 out of 5 when it comes to tea drinkers. (Tea Association of the U.S.A. Inc., 2014) We plan to use this data and target this group to educate on the benefits of products affiliated with our company. In order to do so, the app we will create becomes available upon purchase of a tumbler. The diagram above provides relevant data demonstrating that millennials utilize technology more than generation X. It shows a significant amount of usage but millennials have more disposable income. Millennials are trendsetters because they are starting to make tea more relevant in the United States. Based on Jessica Thomas, “millennials are recognizing the immense benefits of tea and are starting to pride themselves on being connoisseurs” (Thomas, 2015). They are health conscious individuals who focus on the overall factors quick and convenient, but still holding its beneficial elements. Product/Service 3.1 Service DescriptionChi-Tea Tumbler is a device with a filter that can be turned on and off to dispense tea as desired. With our tea tumbler, customers have the convenience of being able to storage extra tea leaves through an attached storage compartment on the bottom of the tea tumbler that can be unscrewed for access. Our advanced technology will incorporate sensors that weigh how much tea leaves are added to infuser. This way, customers will be able to achieve the perfect cup of tea without wasting unused leaves they may have accidentally poured in the infuser. Often, consumers pour too many leaves when using tea infusers because the infuser can be a bit misleading with its long slim shape. Instead of measuring the required amount of tea, consumers will fill the infuser to the brim without realizing they are exceeding the recommended amount of tea leaves. This will usually result in a strong, bitter taste. Chi-Tea Tumbler makes it easy for people on-the-go that want to enjoy tea but do not have the time or patience to sit and measure tea leaves. 3.2 Competitive ComparisonChi-Tea Tumbler is different from your average tea tumbler because our company will manufacture it using the most durable and highest quality materials. With its sleek design, it will draw the attention from business professionals to everyday college students. Our competitive advantage is that it is more advanced than your average tea tumblers. Because of its technological details, this will be more eye catching to tech savvy individuals. Since we will be targeting millennials and young professionals, they will appreciate the complexity of this innovation. In addition to the tea tumbler purchase, customers will have exclusive access to our website that lists different tea recipes, additional types of tumblers, and a warranty registry, in case of any problems or damages that may occur while using the tea tumbler. 3.3. Service DeliveryWe will be selling our product to traditional tea shops like, Dunkin Donuts, Argo Tea, Starbucks, Teavana and other tea shops willing to carry our product. We believe it will be easier to deliver our product through traditional tea shops because these shops already sell items within the same category as our tumbler. By delivering our product to traditional tea shops, it is accessible for our target market to purchase because they won’t have to go through websites and have to pay additional fees and inconvenience. Convenience is the most essential part of our product delivery. Marketing Plan4.1 Competitive AdvantageThe competitive advantage of our Chi-Tea Tumbler is the advanced technology used in designing our product. We’ll manufacture it using the most sturdy and high level materials. Our product will be start-of-the-art compared to the other products in the market. Because of the advanced technological aspect of it, it will be an attractive product to our target customers, millennials and young professionals as well as the tech savvy individuals. The polished design of our product will get the attention of the college students to the young business professionals. Also, with the purchase of the Chi-Tea Tumbler our customers will have an exclusive access to our website with list of different recipes on how to make different type of teas. As well as a supply of diverse tumblers and a warranty registry for when there is any malfunction with the tea tumbler. 4.2 PriceWe will be offshoring the production of Chi-Tea Tumbler in order to save on manufacturing costs. To begin, we will be creating two different tumblers to sell on the market. This will help us determine how much the average customer is willing to spend to meet their tea making needs. The more basic designed tumbler will retail for $45 and the more complex design will retail for $55. To manufacture the tea tumblers, the basic tumbler will cost approximately $7 per tumbler with an additional $10 cost per scale. The scales we will be incorporating will cost approximately $10 wholesale for an estimated 10,000 scales. In order to insure that our tumbler will be a success, our company decided to purchase from an established manufacturer to ensure that the scales will be compatible with the product. Also included in the $10 per scale is a manufacturer's warranty. This will help eliminate a few foreseeable issues that may rise from the incorporated technology. The material of the tumblers will be the main distinction between the $45 and $55. The lower cost tumbler will be made of steel but will not carry any design other than color. The higher priced tumbler will come in a variety of colors as well as a waved designed body. Our predictability is that the tumbler will cost between $17-20 to manufacture due to the complexity of the incorporated technology. Once Chi-Tea Tumbler is well established and profitable, the company will invest in more tumblers which will reduce the wholesale cost and possibly change manufacturers to also cut costs. 4.3 PlaceWe will introduce our new tea tumbler to the Chicago market first and then expand throughout the Midwest. Chicago is a large city with a lot of coffee and tea shops where we can sell our new tea tumbler. Along with coffee and tea shops, we plan on selling our new tea tumbler to electronic and fitness shops. Since the price of the tumbler is higher than most other tea tumblers, we will be selecting retailers that have customers with more disposable income. Places such as Lululemon, Starbucks, Teavana, Best Buy, and Dick’s Sporting Goods will help maintain the target market we hope to receive. 4.4 Promotional PlanPromotion will be a great way to show consumers the benefits of our tea tumbler and the convenience of it. We are going to use guerrilla marketing to promote our tea tumbler on social media for low costs and maximum exposure. We will also pay coffee shops to display our product next to the loose leaf tea in order to give customers a better understanding of the features of our tumbler as well as the design. To promote sales for our tea tumbler we are going to include three free servings of various loose leaf tea flavors with each tumbler. This will give customers another reason to buy our product and it will give them the opportunity to try our product without having to purchase a large amount of loose leaf tea. Giving customers three free samples of tea will let them try our product’s features out for a low cost and it will eventually give us the opportunity to start our own loose leaf tea brand to include in all of our tea tumbler sets. 4.5 FeedbackThroughout our first year of production, our team will be on the field making sure Chi-Tea Tumbler is being marketed as best it can. By having our team talk to customers, we can ensure that they are fully informed of the benefits that our tea tumbler can bring to them. Unlike other competitors, our creation will be saving them loads of money with every use. We will also be able to get firsthand feedback from our customers instead of any possible miscommunication from emails or online surveys. Along with this, we will have a customer service hotline and an online review link where customers can rate our product and tell us what they liked most about the product as well as any problem they may have encountered. We will be monitoring the sale of items per store and location to see where our product is most profitable and make any adjustments according to venue.5. Financials 6. Goals & Future Plans, objectives, risks Goals & Future plansThe ultimate goal for this product is to come up with a strategy that will optimize maximum profit. We want to be able to break even within the first year of production while continuing to satisfy our customers by showing them that the tea tumbler is worth having. From previous discussions, we have had the opportunity to connection with executives within the industry to share their expertise. One connection in particular was having the chance to talk to CEO Patrick from Tiesta Tea, who gave us a presentation on his loose tea company and explained to us how it became very successful. After listening to his story, another goal for us would be to partner up with a successful loose leaf tea company such as Tiesta Tea. With their great success, they would be an excellent company for us to partner with in the future. This can help us with branding and get us off on the right foot when establishing our company. ObjectivesOur objectives are simply to market our tumbler in the most unique way possible. We want to be able to show off the unique features of our tea tumbler by taking part in tea festivals and targeting social media to reach out to our customers. We want to hire experts in the long run that can keep this company going and possibly even expanding it even more. We want everyone in this company to know their role and perform at the highest level possible. RisksOne major risk of tea tumblers is the design. As time goes on, trends tend to change and old trends are left to perish. Like the saying goes “out with the old and in with the new”. But we feel that as long as we keep up with the constant changes in current trends in the market, we will continue to thrive. We will continue to provide informative tips on how to proportion tea sizes for effective results. Another risk that we will face is entering in an up and coming trend where our competitors already have their loyal customers and presence on retailer’s shelf space. We would have to come in at a low to moderate pricing range to gain exposure then adjust the price appropriately. Our final risk is the size, adding the extra compartment is what separates us from our competitors. Keeping the size to a portable sleek style can be challenging but our design team is working to keep our product sleek, durable, and affordable. 6. Appendices Work CitedTea Association of the U.S.A. Inc. (2014). Retrieved from 14655/ten-tea-fact-sheetThomas, J. (2015, January 5). The Benefits of Tea and Why You Should Drink More. Retrieved from The Benefits of Tea and Why You Should Drink More: ................
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