UNIVERSITI TUNKU ABDUL RAHMAN FACULTY OF BUSINESS AND FINANCE FACULTY OF ACCOUNTANCY AND MANAGEMENT (ACADEMIC YEAR 2021/2022) OCTOBER 2021 TRIMESTER UKTM1013 PRINCIPLES OF MARKETING GROUP ASSIGNMENT COVER PAGE Faculty: Faculty of Accountancy and Management Tutorial Group: T3 Tutor’s Name: Ms Leong May Li Assignment Details Brand name (in full) Tealive Due date: Week 5, Thursday (18 November 2021) before 5:00 PM. Student Details: Student Name Student ID Programme (AT/GE/IN) Kee Ning 1805235 AT Lee Yee Lian 1701420 AT Matthew Pong Jing Hong 1701563 AT Povanes Ganesh 1704370 AT Tan Shi Ting 1805144 AT Mark Awarded Teamwork Marks Deduction if applicable FINAL MARK Important Note: Submission of assignment is the responsibility of the students. Failure to comply may result in a zero mark. UNIVERSITI TUNKU ABDUL RAHMAN FACULTY OF BUSINESS AND FINANCE FACULTY OF ACCOUNTANCY AND MANAGEMENT (ACADEMIC YEAR 2021/2022) OCTOBER 2021 TRIMESTER UKTM1013 PRINCIPLES OF MARKETING GROUP ASSIGNMENT COVER PAGE Marks Allocation Assessment PART A: Introduction Discuss the background of the local brand selection in detail. 7 marks PART B: Market Analysis Identify and explain: a) a) 10 marks Opportunities and Threats face by the market (where the brand belongs to, not the brand) PART C: Marketing Strategy Identify and discuss the following in detail: a) Segmentation b) Targeting c) Positioning 25 marks PART D: Customer Perspectives on the Product and Price Assuming you are the customer (buyer/ consumer) of the brand, provide a quantifiable comment related to marketing concepts/theories on: 15 marks a) Product and/or service offered by your brand b) Pricing of your brand PART E: Recommendations for Product and Price NOW assuming you are the Manger of the brand, provide a recommendation to improve the brands competitiveness on: a) Product and/or service offered recommendation b) Pricing recommendation PART F: Conclusion Provide a conclusion for your assignment. 3 marks Quality of the written assignment Layout, citations and references, language proficiency, originality TOTAL MARKS Name of Assessor 15 marks 5 marks 80 marks Signature Auto sign Marks Awarded DISCREPANCY REPORT FOR UNDERPERFORMED GROUP MEMBER(S) Marks in this assignment will be rewarded equally for each group member who could share their task responsibility fairly. However, the weighted marks could be different if the group members feel that their team member(s) does (do) not provide sufficient contribution. Please indicate your team member(s) name and ID number whom you think does (do) not contribute adequately, and your opinion must be supported by other team members. Kee Ning 1805235 100% Supported by other members with name & signature Matthew Pong Lee Yee Lian 1701420 100% Povanes Matthew Pong Jing Hong 1701563 100% Povanes Ganesh 1704370 100% Tan Shi Ting 1805144 100% Member Name 1 2 3 4 5 Member student ID State Member contribution (0 -100%) Signature Tan Shi Ting Lee Yee Lian Kee Ning Notes: The above information reflects the level of contribution of the individuals working within the specified group. If a member feels that he/she has given a fair contribution, please write a 100% contribution. The completed form must be submitted to the lecturer/tutor before 18 November 2021, Thursday. Where no submission of this form is made it will be assumed that a group mark will stand. Table of Contents 1.0 Introduction .................................................................................................................................... 1 2.0 Market Analysis ............................................................................................................................... 2.1 Opportunities ................................................................................................................................ 2 2.2 Threats .......................................................................................................................................... 3 3.0 Marketing Strategy .......................................................................................................................... 3.1 Segmentation ............................................................................................................................. 4-5 3.2 Targeting ................................................................................................................................... 5-6 3.3 Positioning ................................................................................................................................ 6-7 4.0 Customer Perspectives on the Product and Price .................................................................... 8-9 5.0 Recommendations for Product and Price ............................................................................. 10-12 6.0 Conclusion .................................................................................................................................... 13 7.0 References ................................................................................................................................ 14-17 8.0 Appendices .................................................................................................................................... 18 1.0 Introduction Initially, Chatime was the brand that the founder, Bryan Loo introduced to the Malaysian market, and he was also the master of the Chatime franchise in Malaysia (Loob Holding, 2021). Unfortunately, the parent company of Chatime, La Kaffa International, decided to end a contract with Loob Holdings, Bryan Loo's company (Maan, 2017). The agreement between La Kaffa and Loob was terminated due to Taiwan's disagreement over the business direction of Chatime in Malaysia. Therefore, Bryan Loo chose to change his business strategy from franchisee to top brand. Tealive is Southeast Asia's leading lifestyle tea brand, with the mission of bringing joy to everyone via tea. They provide a wide range of beverages, from signature pearl milk tea to coffee and smoothies. Tealive is available in over 650 locations worldwide, including Malaysia, China, Vietnam, Myanmar, Brunei, the Philippines, Australia, and the United Kingdom (Loob Holding, 2021). They are also planning to locate their brand in more countries. Loob Holding Sdn Bhd has collaborated with local beauty brand ‘Safi’ in the “Beautealive” campaign to promote the newly released “BeauTea” range (The Malaysian reserve 2020). According to Loob founder and CEO Bryan Loo, the power of tea pulled together two top homegrown brands to collaborate and showcase the advantages of tea beyond that of a beverage. They also collaborated with a Malaysian brand ‘MAMEE’ to produce ‘Spicy Mi Boba’. The flavour is simply defined as a cup of MAMEE Instant Noodles mixed with a cup of Tealive milk tea with boba (Fakhry. B. N, 2020). There is a latest addition to the Tealive family which is Tea-rush by Tealive, a fun sized version of its mature sibling. Tea-rush is specially crafted to serve tea lovers that are constantly on the go, with unique offerings. According to Goh (2021), Tealive's holding company, Loob Holding Sdn Bhd, sold a 30% strategic share to private equity firm Creador. According to Creador founder and CEO Brahmal Vasudevan, Loob was chosen as Creador's first investment in the fast-growing food and beverage (F&B) sector since Tealive had grown to be a regional leader with over 650 locations in less than five years. For the financial year ended 30 June 2020, Tealive has made a remarkable revenue of RM307 million and net income of RM58 million, which led Creador to invest in Tealive. Bryan Loo also mentioned that Tealive plans to hit the 1,000th store milestone in Malaysia in the next three years. In addition to the established Tealive brand, Loob's stable includes new beverage series, ready-to-eat food under the Tealive Eats brand, and the affordable coffee chain Bask Bear Coffee (Goh, 2021). 1 2.0 Market Analysis Our chosen brand is Tealive and the market analysis is based on Bubble Tea market. Thus, opportunities and threats of Bubble Tea market will be emphasized in this market analysis. 2.1 Opportunities 2.1.1 Customer’s Loyalty Customer loyalty programs are the most well-known feature of bubble shops. Initially, Bubble Tea shops used stamp cards as one of the customer loyalties programmes. Since there were so many issues, such as the customers losing stamp cards or getting stamped at the wrong stores, the bubble tea market has decided to switch to a digital loyalty program (Kim, 2017). The customers felt it was a new idea and a cool feature. The bubble tea market also uses the digital loyalty program to track their customers’ activities and makes it easy for them to gain points from their purchases because it helps the market to retain their old customers. Besides, bubble tea shops launched a trend by developing visually appealing beverages that encouraged consumers to upload photos of their drinks on social media, which went viral and garnered much attention. The appearance and flavour of the beverages have become a social phenomenon that everyone wants to be a part of. On the other hand, many brands in the bubble tea market are working directly with customers to provide faster and more direct feedback by consuming their product and its performance in the marketplace. This will help drive customers’ loyalty, and eventually, it will benefit market growth. According to GrabFood research, Southeast Asians consume at least four bubble teacups per month per person. Thailand leads the way with six cups per person, with the Philippines a close second with five cups (Lye, 2021). This shows that how consumers are loyal to bubble tea products nowadays. 2.1.2 Market Growth The bubble tea market will be worth USD 965.2 million by 2027, with a CAGR of 7.20% growth rate from 2020 to 2027. Because of the region's need, bubble tea has grown in popularity in growing markets. Furthermore, increased health consciousness and consumer adoption of drinks such as green tea, black tea, and white tea in terms of health are boosting market growth (Data Breach Market Research, 2021). The enormous growth of the worldwide bubble tea market is mostly attributable to rising health-consciousness, a reduction in demand for carbonated beverages, and the health advantages provided by bubble tea consumption. Bubble tea is thought to enhance the immune system because it contains antioxidants such as catechins, which reduce oxidative stress. Furthermore, the inclusion of fresh fruits such as mango, strawberry, and lychee provide a significant dosage of vitamin C. Bubble tea is a good energy booster since it includes caffeine, which delivers quick energy and boosts metabolism (Researchdive, n.d.). According to Allied Market Research (n.d.) research regarding the bubble tea market analysis, the black tea segment earned the most revenue in 2019 and is likely to maintain this trend during the projection period, based on base ingredients. This can be due to the global surge in popularity of bubble tea utilising black tea as a foundation component. On the other hand, green tea is predicted to rise at the fastest CAGR, which is about 8.2% throughout the forecast period, owing to an increase in the number of health-conscious customers globally. Refer to Appendix 1. 2.1.3 The revolution of technology The upcoming technologies are driving up demand for technology to boost the competitive advantage in the bubble tea market. Many bubble tea companies have now embraced the internet's technological advancements, and online moved their bubble tea businesses. They have hired digital marketing firms to construct cutting-edge e-commerce websites to promote their bubble tea products (Stackpath, 2020). The bubble tea companies have revolutionalised to digital with their website and ecommerce service during the COVID-19 pandemic. This is due to maintaining hygiene and contactless deliveries together with customers' satisfaction throughout the pandemic period. According to Stackpath (2020), these websites will appealingly present the bubble tea products and utilise infographics to show how to buy bubble tea online quickly. Furthermore, some of these websites have frequently asked questions (FAQs) sections to clarify information and installed online chat software to 2 engage with leads, answer queries, and assist. Besides, bubble tea businesses now use cutting-edge equipment to produce their bubble tea concoctions, and they even seal the tops of their plastic cups with sealants. While employees are still required to be physically present to operate them, these machines have significantly reduced the time necessary to prepare and efficiently serve bubble tea drinks. When a customer places an order, all the necessary ingredients are poured into the machines, certain buttons are pressed, and the bubble tea drink is ready to be handed to the consumer within minutes. As a result, the revolution of technology is fuelling growth in the bubble tea market. 2.2 Threats 2.2.1 High number of competitors The different brands of bubble tea became a huge option among consumers. CoCo, GongCha, Chatime, Macao Imperial, and Tiger Sugar, Tealive, and many others are among the most famous and well-known brands on the market. Based on a conjoint analysis regarding consumer preference analysis on attributes of milk tea, various milk tea brands each have their speciality; yet they provide varying amounts of characteristics. These characteristics may include brand, price range, tapioca pearl size, sugar level, amount of ice, cream cheese inclusion, and type of bubble tea. Competition in the bubble tea industry reduces an individual company's market share and limits the potential customer base, particularly when demand is restricted. A high number of competitions also will affect the profit earning for each company in the bubble tea market. Bubble tea shops operate in a monopolistic competition market structure. In a monopolistic competitive industry, the barriers to entry and exit are low, and the decisions of one business do not immediately impact those of its competitors (Investopedia, 2021). According to Tpjchumanists-Economics-Blog (2010), low barriers to entry are low start-up costs since people do not spend much capital. There is also no requirement for specialised skills in the bubble tea industry, which makes it simple for anyone to establish bubble tea shops. There is also a modest capital need for rent and labour wage. Therefore, the bubble tea shops are earning average profits in the long run, just like any competing firm. Since the bubble tea market is anticipated to grow with a CAGR of 7.20% from 2020 to 2027, it will increase competitive rivalry with a low barrier to entry. Eventually, it will also lead to a high threat of substitutes. 2.2.2 Global economic downturn due to COVID-19 pandemic According to Research Dive (2021), the COVID-19 epidemic has detrimental influences on the worldwide bubble tea market. The unexpected drop in market growth might be attributable to total lockdown and import restrictions in several nations. Furthermore, worldwide supply chain disruptions and government mandates to close cafes, farms, restaurants, production units, and factories to maintain social distancing measures resulted in a reduction in sales and demand for bubble tea. Due to a lack of raw materials and travel restrictions, manufacturing units were forced to close, reducing market growth. For example, the base ingredient required to make bubble tea, such as black tea and green tea, is mainly shipped from India, but companies were unable to sell tea to other nations due to import-export constraints. Furthermore, the closure of businesses, cafés, and hotels resulted in a decrease in bubble tea sales (Research Dive, n.d.). For instance, several bubble tea shops at SS15 Subang Jaya, Malaysia, has closed down permanently due to the prolonged Movement Control Order and the shop owners could not pay up the rent without operating their business and their employees (Ng, 2020). Various government programmes and actions are assisting bubble tea manufacturers in the face of the pandemic. For example, Hindustan Unilever Limited (HUL), a large consumer products firm in India, expanded its relationship with UNICEF, the United Nations Children's Emergency Fund, to assist Assam tea producers and employees during the COVID-19 pandemic. This collaboration intends to provide necessary items to Assam tea producers (Research Dive, n.d.). 3 3.0 Marketing Strategy 3.1 Segmentation on “Bubble Tea” Market Generally, companies divide their segmentation into geographic, demographic, psychographic, and behavioural. Tealive may classify the market into different groups; however, in this case, Tealive emphasizes the segmentation of demographic and behavioural. First of all, demographics refer to broad characteristics of people such as age, gender, income level, etc. (Hayes, 2021). It is often used in marketing strategies for companies to target their customers as well as the size of the potential market. The Department of Statistics Malaysia (2021) stated that Malaysia's population is expected to reach 32.7 million in 2021. In terms of gender, the male population in Malaysia is 16.8 million, which is 0.9 million more than the female population. In the age structure, the median age of Malaysia's population is 29.6 years. The most population is under the age of 15 to 64, which is 69.6% of the total population. Most of the population is in the age range of 25-54 years old, which is 40.86% ("Malaysia Demographics Profile," 2021). Therefore, the customer group can be divided into teenagers (1319 years old) and young adults (20-39 years old). Teenagers are the customers who are still students and usually have pocket money from their parents, while young adults are the customers who are fresh graduates and customers who have started working. In the aspect of income level, the customers are divided into three categories which are low-income, mid-income, and high-income groups. These three categories of customer groups can be considered from households of Bottom 40% (B40), Middle 40% (M40), and Top 20% (T20). B40 household income is below RM4,849, M40 household income is between RM4,850 and RM10,959, while T20 household income is above RM10,960. Moreover, Malaysia consists of various ethnic groups, which are Bumiputera, Chinese, Indian, and others. The population of Bumiputera is the most, which is 69.8% of the total population, while the second-highest population will be the Chinese population, which is 22.4%. Next, behavioural segmentation divides customers into different categories based on their behaviour while interacting with the business. The behaviour of customers can be analysed by the usage rate, the tendency of using delivery service, and loyalty. The usage rate of customers can be classified into non, light, medium, and heavy levels. Non-users are the customers who never buy beverages in the bubble tea market; light users buy bubble tea once within a few months; medium users buy once a month, while heavy users buy at least once a week. According to a survey, 65.4% of the customers rarely spend on milk tea, while 32% buy once per two weeks (Ping, Ling, & Sing, 2021). In addition, customer loyalty can be segmented into weak, moderate, and strong. Weak loyal customers are susceptible to the price and benefits of the products and will compare them with the competitors’ products. Moderate loyal customers are slightly affected by the competitors’ strategies, while strong, loyal customers are not sensitive to the competitors’ strategies. Loyal customers are beneficial for bubble tea shops in generating repeat revenue in the long term (Jones, 2021). In the tendency to use delivery service, the customer groups can be classified into non, light, medium, and heavy users. Non-users are the customers who never use the food delivery service; light users use the food delivery service once within a few months; medium users use the service once a month while heavy users use it at least once a week. With the technology trend, the demand for delivery services from customers in the food and beverage industry has increased, especially from university students (Hooi, Leong, & Yee, 2021). This service brings the most excellent convenience to life because customers can place orders easily through the platform with multiple payment methods such as e-wallet, online banking, and cash on delivery. Based on the segmentation, the target customers in the bubble tea market are a group of people aged between 20-39 years old, both male and female. The customers aged 18-35 years old consume more beverages than customers in other age groups (Mai & Khue, 2016). Besides, this group of customers is more likely to be influenced by the trend through social media. They are much more dependent on the Internet than older people and spend much time on the Internet. Referred to Appendix 2, most Internet users are under 20-30 years old, which is 46%, while the users aged 31-40 are the second majority user, accounting for 21.2% (Muller, 2021). Their tendency of using delivery service depends on the tendency of each bubble tea shop to partner with the delivery service companies. Partnering with food delivery companies helps bubble tea shops to reach more comprehensive customers. In terms of income level, the bubble tea shops 4 whose product's prices are in the low range, such as Chatime, Tealive, and CoolBlog, target the customer group whose income level is low and middle income. Next, the bubble tea shops whose product's prices are in the middle range, such as Gong Cha, The Alley, and Chatto, focus on the customer group whose income level is middle income. While the customer groups who have middle and high income are targeted by the bubble tea shops whose product's prices are in the luxury range, such as Tiger Sugar, Da Boba, and Xing Fu Tang. In addition, the targeted customer group is all races in Malaysia, and the product's ingredients are Muslim-friendly. In Malaysia, there is a combination of western and Chinese tea-drinking cultures, which the whole nation accepts regardless of race. Furthermore, the targeted customer group's usage rates are at middle and heavy levels, which will generate more revenue in the growing bubble tea market. A lot of product and pricing strategies have been done by bubble tea shops to attract them to consume more beverages. The customer loyalty of this group is moderate and vigorous. Strong, loyal customers are essential to a business as they generate regular consumption of the product and a better word-of-mouth referral. They would recommend the product to their friends and relatives based on their satisfying consumption experience. The bubble tea shops make efforts to shift the moderately loyal customers to strong loyalty to sustain their bubble tea business in this growing market. 3.2 Targeting Based on the market segmentation, Tealive targets its customers aged between 20-39 years old for both males and females. In this group of customers, their occupations can be university students, fresh graduates, and working adults. Tealive targets them as they are active users of social media, and they are more likely to be influenced by the posts and advertising pictures about the aesthetic drink of Tealive on social media. Health-conscious customers in this group can consume Tealive drinks because Tealive also sells some healthy beverages. Tealive started cooperating with the UK's oat milk brand to upgrade its brand to get closer to the global beverage trend (Azman, 2021). Thus, the customers who are lactose intolerant can consume it. Tealive with various flavours of beverages can attract this group of customers to consume the drinks. Then, the customers will share their experience of consuming Tealive beverages with friends through social media, promoting the Tealive Brand. The reason for not focusing on the customers aged 40 and above is because they have a higher awareness about their health conditions, especially the sugar content in the beverages. They prefer to consume beverages that are no or less in sugar. In addition, for the elderly, the boba or pearls in the milk tea can cause indigestion as their digestive system is slower ("How bubble tea can affect your health," 2019). Besides, Tealive targets customers whose income level is low to medium, where their monthly income is below RM4000. It is because the price of Tealive beverages is in a low range in the bubble milk tea market, with a minimum price of RM6.50 per cup ("Tealive Menu And Price List (Updated 2021)," 2021). The low price of Tealive's beverages allows most of the customers to have the ability to buy its beverages. Middle-income customers can also buy the low-priced Tealive beverages multiple times. Especially during the economic downturn due to Covid-19, the consumers can have the ability to buy Tealive beverages with their slightly affected income. In addition, Tealive's target customer group is all races in Malaysia, so everyone can consume it, allowing Tealive to maximize its revenue. Tealive has become the first trending bubble tea shop to receive Halal certification for its products in Malaysia (Azzam, 2019). Furthermore, the customer groups with usage ranges of medium and heavy levels in bubble tea are targeted by Tealive because they are potential customers of Tealive. They usually are lovers of bubble tea who are willing to spend money on bubble tea and will frequently consume bubble tea in their life. If Tealive beverages attract them, they may buy beverages from Tealive, which helps Tealive generate revenue. Besides, they are moderately or strongly loyal to Tealive. Tealive targets them as they will bring revenue to Tealive, and they may help promote their good experience of consuming Tealive beverages with their friends and relatives, which will help generate much revenue in the long run. The loyalty of this group of customers makes Tealive not so afraid of losing them quickly. In this growing bubble tea market, they will not be easily attracted by the competitors’ strategies and move their loyalty to other bubble tea shops. They may be light to heavy users of the delivery services, who will make orders through digital platforms such as GrabFood and Foodpanda. Tealive targets them because the food and beverage delivery service is becoming more common, especially during the Covid-19 pandemic. Besides, food delivery services platforms can help Tealive to increase the customers and sale volume. According to a Grab article, the 5 bubble tea order with GrabFood delivery services increased by 3000% in 2018 in Southeast Asia (“BUBBLE TEA CRAZE in Southeast Asia,” 2020). Tealive has implemented an undifferentiated market strategy as it focuses on the whole market to reach its audience as wide as possible and targets on common needs of the customer, which tends to contribute to brand awareness and generate higher sales volume. Targeting market strategies always depends on the company’s resources. Tealive has conducted an undifferentiated marketing mix through the product, price, promotion and place. Recently, onde-onde series drinks and yoghurt pop drinks were newly introduced and sold through all the outlets in Malaysia. Undifferentiated marketing enabled Tealive to lower its research costs and generate higher sales volume by offering the same marketing program through its outlet (Tealive Marketing Strategy, n.d.). 3.3 Positioning Tealive positions itself as a brand full of innovation, affordable, modernised, and environmentally friendly to provide a valuable experience to its targeted customers in the bubble tea market. Tealive has made efforts to create product innovation in its brand to be differentiated in the growing bubble tea market. Tealive became the first brand to sell the DIY (Do It Yourself) bubble tea kit in the bubble tea market (Azman, 2020). All the ingredients of bubble tea are included in the DIY kit. A few plantbased options MILKLAB also sold by Tealive to allow its customers to choose their flavour and add creations on the DIY kit. This DIY kit allows the customers to have their own bubble tea making experience, and they can make bubble tea according to their preference. Several tutorial videos about the DIY bubble tea have also been uploaded on Tealive's YouTube channel, Tealive TV, to enable its customers to learn and make their DIY bubble tea quickly. After a month of the DIY kit's launch, thousands of DIY bubble tea kits have been sold (Tan, 2020). In addition, Tealive launched its cookies, which are Tealive Chocolate Chip Cookies, to differentiate its brand. The cookies are made with premium ingredients and made using their handcrafted recipe. Besides, Tealive has actively created new flavours of beverages and combo meals to attract consumers to compete with its competitors. For example, Tealive recently introduced a new series of flavours, the Yam Yam series for Milk Tea, Brown Sugar Smoothie and Smoothie (Consumer, 2021). Yam balls, sago and pearls are added to the beverages as the topping. Different combo meals, including Tealive beverages and dishes, in different periods or festivals by Tealive to provide a different experience to its customers. In 2020, Tealive cooperated with many companies to introduce special editions of new products, such as dUCk boba lipsticks, Boba-licious ice creams and Mi Goreng Boba. Furthermore, Tealive gains a competitive advantage in price among the competitors by expanding its business scale. Hence, Tealive positions its products at affordable prices to attract more customers to buy its products. Tealive sets its regular bubble tea with a minimum price of RM6.50 so that the customers can keep consuming Tealive products (Azzam, 2019). It is not premium; thus, everyone can buy it although their income is low. In addition, Tealive also provides a loyalty programme, Unitea, which allows its customers to register as Tealive's lifetime members at the cost of only RM10.35 (Tealive, n.d.). This membership fee is affordable to people, and the membership also makes Tealive become a friendly brand because being a Unitea member can get a lot of benefits such as a complimentary drink upon sign up, birthday tokens to redeem a drink, buy ten free one promotion and earn BPOINTS & pay less on Tealive's products. A program called "Tealive Thursday" also allows the members to drink their second cup of Tealive beverage at a price of only RM1.10 between 3 pm and 6 pm every Thursday. Thus, Unitea membership can make the customers keep purchasing from Tealive, thereby gaining their good loyalty. It helps Tealive to build and manage a good relationship with customers. Moreover, Tealive has taken various actions to modernize Tealive business. Tealive made its business more digitalized and convenient to actively cope with the uncertainties that can be a threat in the technological era. Due to Covid-19, Tealive has started its e-commerce platform to reach customers. The platform provides the sale of DIY bubble tea kits and some unique edition products. According to Azman (2019), Tealive won silver for Marketing Excellence Awards in 2019 and Gold for Asia e-commerce Awards in 2020 in recognition of its outstanding work in the business. Tealive also planned to develop a variety of cashless and contactless ordering and payment methods. There are ten drive-through shops, and more than hundreds of drive-in shops have been opened by Tealive in Malaysia by May 2021 to bring the 6 most excellent convenience to its customers. Besides, a digital application with a variety of features called Tealive Club has been launched by Tealive to provide a better service experience to the customers. Tealive Club allows members to collect points, get the latest news about Tealive, provide instant feedback, etc. The cashless and contactless ordering and payment methods are also included in Tealive Club, such as Self PickUp, Delivery, and Online Store. Moreover, Tealive cooperated with an e-wallet company, Touch' n Go, to allow the customers to order and pay for their purchases using the e-wallet. This app-in-app method helps Tealive promote sales because Touch' n Go users can use Tealive Pick-Up service to order Tealive beverages in the Touch' n Go app. Tealive has become the top drink company whose customers use the Touch' n Go service to make the most transactions. Over 200,000 transactions have been made on Tealive's transactions using the app (Azman, 2021). Recently, environmental issues are becoming a matter of great concern to people. In the bubble tea market, the increasing use of single-use plastic cups, straws and lids create problems for the environment (Indiegogo, 2021) and raise concern from society and non-government organizations (NGOs). Therefore, Tealive strives to contribute to the issue. Tealive has introduced a sustainability campaign, the Tealive Eco series (Tealive, 2020), to save the environment and convey a positive image to the customers. Paper straws have replaced their plastic straw to reduce plastic waste. Besides, Tealive Eco Strawless Cups that are reusable have been introduced and held for sale to everyone. The customers can use the cup to fill their bubble tea in their next purchase to help reduce the waste. This allows Tealive to save their costs and save the environment. Tealive also cooperates with OneCup to introduce a reusable bottle, Eco Glass Tumbler, free with a stainless-steel straw. Lastly, Tealive has also introduced Eco Tea Bag to promote the use of reusable bags and reduce single-use plastic use. All these products help Tealive to have an environmentally friendly brand in the bubble tea market. For the lower and middle class of all the teenagers and adults’ customers groups searching for a distinctive way to enjoy tea and relax, Tealive is the only brand among all the bubble tea brands that offers innovative, affordable, and convenient bubble tea. It is because it provides creative and low-price beverages and operates its business to be closer to the customers, which helps the customers get a better sense of relaxation and balance in their lives. 7 4.0 Customer Perspectives on the Product and Price Tealive can be a convenience product where customer purchases are made frequently, quickly, and with minimal comparison and purchasing effort. Customers will have little planning and have low involvement if they want to buy a milk tea. Tealive produces bubble tea, which is a high-quality, hand-crafted, and healthful beverage. It is a light and refreshing drink made with tea, juice, or milk and tapioca. Tea, Cocoa, Coffee, Smoothies, Sea Salt Cheese, Matcha, Fruit Tea, and Sparkling Juice are some of the drinks provided by Tealive. Tealive’s signature product is signature brown sugar pearl milk tea. It comes with a regular or large size, whether with ice or hot, and the sugar level ranges from 0% to 100%. From this, customers can customize their drinks which best suits their needs for sugar and the portion. Tealive also uses different cups for their hot drinks, which can sustain the temperature, different from the cups that the cold drinks use. After that, Tealive introduces new drinks according to the season. For example, Durian Milk Tea is made from real durian D24. Customers that have tried this new drink are giving a positive review. The quality of the ingredients for the bubble tea and the tapioca bubbles determines the quality of the bubble tea. Because a sweet taste generally attracts more people, many recently launched bubble tea shops produce delightful and sugary substances for their bubbles. However, Tealive uses high-quality tapioca, which is not very sweet. Overall, customers respect the high quality of the ingredients and final product of Tealive with a reasonable price. Tealive have also introduced boosters known as Tealive Plus, which is mixed with bubble tea drinks. There are four types of boosters. One of them is antioxidants, which boost immunity by improving the human immune system, inhibiting inflammation, and neutralising free radicals. Next, protein enhances the human lifestyle by enhancing muscle strengths. After that, Collagen keeps skin radiant by improving skin moisture and skin suppleness. Finally, Veg Fibre supports digestive health, and it helps regulate cholesterol levels and weight management. Tealive benefits customers as their product bring many health benefits and are nutritious to the customers’ health. Tealive also produces its snacks which are chips and cookies. According to Bryan Loo, in an era where digital marketing plays a huge role in consumers’ lives, consumers seek experiences even when they make a purchase. Therefore they have fascinating, innovating, and thinking out of the box ideas during this pandemic. For instance, collaboration between MAMEE and Tealive instant bubble tea noodle, collaboration between Walls and Tealive boba ice-cream and DIY bubble tea kits. Consumers will feel excited about the DIY bubble tea kits, which enable bubble tea lovers to create their own Tealive bubble tea at home without going out to buy. This also increase the consumers’ awareness increases of Tealive through other products. Tealive has introduced the Tealive Eco Series as part of its commitment to sustainability. It is a collection of environmentally friendly products designed to improve the tea-drinking experience while also influencing the environment. Customers buy the idea of Tealive Eco strawless cup where an interior chamber in this revolutionary cup retains toppings above the drink, and this eliminates the need for a straw by allowing the toppings to flow seamlessly from cup to mouth with each sip. Tealive also replaces plastic straws with paper ones to reduce plastic waste. Overall, customers consider Tealive because of what they have done to reduce waste for the environment and the world. For branding, According to Loo, the meaning of Tealive is ‘We are telling people that we are moving on, we are not only living after all that has occurred, but we have also come out stronger than ever, and we are not frightened of change’. Tealive might be found in various businesses and leisure, such as Tealive furniture and Tealive clothes, which is their brand’s vision (Khor, 2017). Tealive has a slogan which is ‘bobalicious’, which combines the word boba and delicious. This slogan had reached customer minds when they heard the name Tealive from their friends and advertisements. Overall, Tealive is easy to pronounce and remember by customers. Tealive has done a very well design on their cups as a signature purple that gives energy, and the brand name Tealive on their design allows consumers to recognize Tealive easily. Next, they pack their drinks for the customers by using unique bags to carry if they buy many drinks, which is easy for them to carry and protect the drinks from dripping out. The particular bags are unique and are 8 transparent, which gives a cool and modern design. With this, Tealive can attract customers and capture the customer’s attention. In terms of the environmental perspective, the unique bags used are ecofriendly and reusable. For their labelling, they will label the drinks that the customer orders, which will differentiate their drinks so that no misappropriate confusion between the seller and the customers. The sum of values and costs that customers pay for the benefit of using a product or service is referred to as pricing. The price is volatile and can be changed at any time. Price has a significant effect on every company as it will affect its sales and profit. So, if the price is too high, customers will not be willing to buy it, same as if the price goes too low, the profit would be less and even causing the company to make losses. Hence, to establish a strong relationship with the customer, a pricing strategy should be adopted to develop and obtain customer value. From the effective pricing strategies, Tealive used product line pricing, which considers the price differences across products in the line, customer evaluation of their attributes, and their rivals' pricing. The product line may compare the products based on pricing, different package volume and flavour. For example, the Original Pearl Milk Tea costs RM6.60 for regular and RM7.55 for large sizes. Overall, customers will buy large-sized beverages because customer value favours the product, giving them more benefits. Next, Tealive also adopted product-bundle pricing, which combines the food and beverages to sell at a reduced price. For instance, the price of a bundle consisting of one food and one beverage is lower than buying the food and drinks individually. This will encourage customers to buy the bundle and improve food selling as Tealive main selling food and beverages are selling pearl milk tea. Competitors like Chatime are using the same strategy as Tealive, and many other luxury competitors such as Xing Fu Tang are using the same strategy even their prices are higher. Thus, this will not give Tealive any opportunities against competitors, but joining them will be the most effective way. Tealive have used psychological pricing strategy, which is adjusting the price for psychological effect. The theory behind psychological pricing is that buyers would perceive a slightly reduced price as a lower price. For instance, a product priced at RM8.99 but conveyed by the customer as RM8.00 and not RM9.00, thus treating RM8.99 as a lower price than RM9.00. The official name for all those 9s at the end of prices at the stores is called charm pricing (Yu, 2021). According to studies conducted by experts at MIT and the University of Chicago, prices that finish with 9 could stimulate customer demand for that product. This is because the customer read the price from left to right, and the customer saw the price of RM8.99. The customer read the price is closer to RM8.00 rather than RM9.00. Therefore, Tealive has set their prices in their menu as RM9.90 instead of RM10.00 due to this psychological pricing strategy. Tealive also approaches the promotional pricing strategy, which reduces the price temporarily so that their drinks and beverages could attract customers. Tealive will usually reduce its price on selected days. For instance, Tealive had made a promotional price during the month of Ramadan. This has helped attract customers who have bought Tealive regularly or those who have not drink it for a very long time. However, the essential part is to attract new customers who want to try a drink of Tealive for the first time. Due to COVID-19, many customers stay at home and are not allowed to travel. This will affect Tealive to face a downfall in their economies. Thus, drastic measures should be taken to get back in their pace in selling their products differently. For instance, digital e-commerce can be implied in this situation. 9 5.0 Recommendations for Product and Price In order to improve the brand's competitiveness within the bubble tea market, Tealive should constantly strive to improve its products and pricing to create and capture its customers' value. This can help build customer relationships to ensure the customer's loyalty towards Tealive and increase Tealive's market growth. Besides, the revolution of technology provides many opportunities for Tealive to improve its products. Tealive will also be able to keep up with its rising competitors and cope with any unexpected economic crisis by strengthening the Tealive brand's competitiveness. The base of a traditional milk tea usually contains tea mixed with dairy milk (Ong et al., 2021). However, not everyone can consume dairy milk as some may be allergic to dairy products. Therefore, Tealive can introduce more types of dairy-free milk aside from oat milk. For instance, soy milk, coconut milk and almond milk (Tarantino, 2018). These kinds of milk are free of lactose, and hence, they are suitable for lactose-intolerant customers. Most people will start to experience lactose intolerance symptoms during adulthood, causing them to experience severe diarrhoea, nausea and bloating, or pain in the abdominal area (MedlinePlus, n.d.). Moreover, these kinds of milk are considered plant-based milk, which suits some of their vegan customers (Fernandez, 2021). With the addition of more nondairy milk, customers can have the opportunity to opt for a healthier option for their milk tea due to health issues, vegan diet constraints or simply just due to their personal milk preferences. This can help to increase Tealive’s growth in the bubble tea market. Pearls are the most common topping that customers often choose to include in their bubble tea drinks (Ong et al., 2021). Tealive can introduce an option for customers to choose their preferred size of pearls in their bubble tea drinks, whether they want them in big pearls or tiny pearls. Currently, Tealive is only offering pearls in their standard size, which is considered as big pearls. Tealive can introduce tiny pearls, which are half a size smaller than the big pearls. This will make it easier for customers to chew, and it will take less chewing time than big pearls (Ong et al., 2021). The tiny pearls option will surely appeal to customers who like pearls but are too lazy to chew them for too long. Other than that, Tealive can introduce cream cheese as its new optional ingredient. According to Ong et al. (2021), the customer’s decision to buy milk tea is influenced by the inclusion of cream cheese. This is because it offers many health benefits; for instance, the amount of protein content in cream cheese is high, and its fat is low. Obesity and cardiovascular disease can also be reduced by consuming cream cheese (Ong et al., 2021). Cream cheese can also balance the flavour of the bubble tea by adding a tint of saltiness flavour so that the bubble tea is not just mainly sweet. Tealive customers can be given twolevel options whether to include cream cheese or not include cream cheese in their bubble tea. According to Sörqvist et al. (2013), the flavour of a product can influence the willingness to pay customers. The consumer tends to be attracted when there are many different bubble tea flavours available for them to choose from (Ong et al., 2021). Tealive can launch a new bubble tea series, for instance, herbal tea series. This herbal tea series will be entirely crafted from natural and organic ingredients without any added preservatives and artificial colourings and flavourings. A few examples of herbal teas are lavender tea and chamomile tea. Lavender tea can promote calmness which can help to reduce anxiety and stress ("Lavender Tea Health Benefits," 2020). On the other hand, according to Villines (2020), chamomile tea can offer many health benefits in terms of promoting sleep for insomniac people and reducing female consumers' menstrual pain. Apart from that, Tealive can regularly release a new innovative bubble tea flavour every three months as a new addition to its permanent menu. This can ensure that customers will not get tired of drinking the same bubble tea flavours. Tealive can also release a new limited-time series of bubble tea drinks that are only available during special festive occasions, such as during Chinese New Year, Hari Raya Aidilfitri, Hari Deepavali, and Christmas Day. The flavour of the bubble tea drinks can be tailored according to festive occasions. For instance, an orange-flavoured bubble tea series can be released by Tealive during the Chinese New Year. Customers love to try out new flavours and will more certainly do so when they are in a celebration mood in which they can have fun while enjoying the Tealive bubble tea drinks with their friends and families. 10 Tealive should conduct quality control towards the preparation process of their bubble tea. Customers are more likely to remain loyal to the brand if the perceived product's quality meets or goes beyond their expectations and leaves a good impression on them (Pattarakitham, 2015). Tealive should maintain a hygienic preparation process of their bubble tea by preparing it in a clean environment. Tealive should also ensure that its bubble teas achieve consistency in their tastes or flavours to ensure customers' satisfaction and trust towards its products' quality. The brewing process of the tea should be followed strictly. Purified and filtered water should be used as they are free from contaminants and bacteria, protecting consumers' health (Bossen, n.d.). Tealive's bubble tea should also be brewed with the proper tea to water ratio at a correct temperature and infused within an appropriate timing to maintain the bubble teas' taste. Every batch of ingredients used for the bubble tea should also be checked to ensure the quality of the bubble tea produced by Tealive. A product’s packaging is crucial as it provides various marketing functions (Iswara & Rahadi, 2021). The packaging’s primary function is to serve as protection for the product itself. An attractive packaging design can also attract customers and boost up the sales of the product. Even though Tealive has introduced a strawless cup for customers to enjoy their bubble tea, it is not enough to promote environmental sustainability. However, some customers may not purchase it and stick to the regular bubble tea plastic cup, which is not recyclable. A product’s packaging should not solely focus on protecting the product, as it should also promote recycling and environmental sustainability (Iswara & Rahadi, 2021). Hence, Tealive should invest in its packaging and replace its main drinking cup with an environmental-friendly paper cup that can be recycled. This will help to reduce further damage to the environment due to excessive plastic usage. According to (Kampfer et al., 2017), a product’s packaging design will influence the willingness to pay customers. This means that customers will be more likely to pay and purchase product that has attractive packaging design. Tealive has not changed its cup designs for a long time, and customers may get bored of the old designs. Hence, Tealive should be more creative and offer a few beautiful cup designs for customers to choose from for their bubble teas. Tealive can use its signature purple theme colour for the cup designs. Tealive can also decorate their cups in conjunction with certain festive occasions such as Christmas Day. For instance, by decorating around the cups with mini-Christmas trees. Tealive’s staff can also write a short and straightforward inspirational quote on the bubble teacups to motivate and cheer up customers. The unique cup designs and quotes can enable customers to have an enjoyable drinking experience with Tealive. A product needs to have good branding as a particular product can be recognized and remembered by customers through the product’s brand (Pattarakitham, 2015). It can also create brand awareness among new consumers (Tee et al., 2020). Tealive’s famous slogans or taglines are ‘Bobalicious’ and ‘Always More Than Tea’. Tealive should label the taglines on the cups of its bubble tea to position its taglines in the mind of its consumers. With the inclusion of the taglines, customers will easily differentiate Tealive from the other bubble tea brands. Tealive will also gain a competitive advantage over many of its competitors in the bubble tea market. Tealive can also introduce some support services to maximise the experience of its customers. Tealive can regularly conduct surveys among its customers to monitor their satisfaction with the products and services offered. Through the surveys, customers can also give some suggestions or new ideas on how Tealive can improve their products and services. Tealive can select a group of existing customers to participate in the surveys. Customers willing to participate will receive a free drink from Tealive as a form of gratitude upon completion of the survey. Tealive will also retain its customer’s loyalty when improvements are made accordingly based on the data collected from the customers. Tealive can also offer a unique service for customers to experience making bubble tea drinks by themselves in selected Tealive outlets. This will give customers a personalised bubble tea making experience that is not available yet among other bubble tea brands. With the revolution of technology, Tealive should upgrade its website with an online chat assistant software that can quickly help handle and answer any consumer queries about any of its products or services. 11 Price is an essential factor affecting customers’ satisfaction with the product and brand (Iswara & Rahadi, 2021). The income level of the customers also influences the purchasing decision of a product by customers. This means that customers with lower purchasing power will usually prefer products with lower prices (Iswara & Rahadi, 2021). Since Tealive targets, customers whose income level is low to medium, the price of bubble tea should be maintained at an affordable price range. Tealive should adopt customer value-based pricing as one of its product’s pricing strategies. The pricing is set according to the customer’s perceived value and how much they are willing to pay for it. This pricing strategy will ignore the competitor’s price and costs. The price of bubble tea should be affordable enough without affecting or reducing the quality of the bubble tea. This will enable Tealive to have a competitive advantage over most of its competitors, charging a higher price for the same quality of bubble tea drinks. Certain factors need to be considered when setting up a pricing strategy. Tealive should set the price low enough to avoid intense competition in the bubble tea market, which can help create a higher barrier to entry of the bubble tea market for new competitors. However, the price should not be too low and should be kept slightly lower, just within the competitor's price level, to ensure that the bubble tea's set profit margin can be achieved. Tealive can adopt market penetration pricing to reduce some of its prices for a new product to attract more customers and gain a larger market share. For instance, the price of a newly launched permanent bubble tea can be temporarily set at a lower introductory price for around two weeks to gain customers' attention to try out the new products. On the other hand, Tealive can adopt the market-skimming strategy for its pricing decisions when launching a new limited series bubble tea for a limited time only. For instance, Tealive can set a high price for the newly launched seasonal bubble tea, only available during special occasions. Although there may be fewer sales due to the high price, it can lead to a higher profit margin for Tealive. Tealive should also make some adjustments on its price when necessary due to the changing government regulations. The goods and service tax (GST) is likely to be reimplemented by the Malaysian government in 2022 (Shankar, 2021). With the reimplementation of GST, Tealive has to readjust all the pricing for its bubble tea, which means that the price of the bubble tea will now include the GST as well, resulting in a slightly higher price. The improvements made on the pricing of the bubble teas will enable Tealive to improve the brand's competitiveness in the growing bubble tea market. 12 6.0 Conclusion In conclusion, Tealive was born in difficult circumstances since there was a court case between its parent company, Loob Holdings and La Kaffa International, in 2017. Last year, Tealive surprisingly made a remarkable revenue of RM 307 million which took a turn for the better despite uncertainty in the Covid-19 pandemic. In the bubble tea market, the economic downturn due to the covid-19 pandemic and the high number of competitors are considered as threats that urge the company to take proactive action in order to cope with these uncontrollable risks and be able to survive in the business environment, which is full of uncertainties. On the other hand, the advancement of technology becomes the foremost opportunity for the market, which boosts revenue through e-commerce platforms as it brings convenience to customers. Increasing health consciousness and adoption of tea culture bring the opportunity to the market and was predicted to elevate market growth dramatically up to 7.2% in the next five years. In order to effectively minimize threats and maximize its opportunities, Tealive has developed marketing strategies through demographics and behavioural segmentation, targeting students and working adults aged between 20 to 39 and positioning itself with full of innovation, affordable, modernized and environmentally friendly. The positioning of Tealive has attracted its loyal customers, especially with its price advantage and strawless cup to sustain the environment. Based on the feedback given by customers, they are satisfied with the product introduced by Tealive because of its high-quality ingredients and reasonable price. Hence, the quality control and hygiene preparation process are vital for Tealive to enhance customer expectations of product quality. Besides, Tealive has introduced Tealive Plus, which is bubble tea mixed with several types of boosters such as protein, antioxidants, collagen and Veg Fiber, which fulfil customers' interest as the healthconscious become more trending and concerned nowadays. Moreover, the Tealive strawless cup was introduced to encourage customers to participate in protecting the environment. However, Tealive is suggested to replace its drinking cup with a paper cup so that customers who did not have Tealive strawless cup can also contribute to becoming environmentally friendly users. In terms of price strategy, Tealive utilized product line pricing, which set multiple prices for various products in a product line, psychological pricing strategy by setting the price that makes it looks "cheaper" to the customer (Gaille, 2018) as well as promotional pricing strategy occasionally to attract more potential customers to give it a try. As a recommendation, market penetration pricing is suggested when Tealive introduces a new product, while a market-skimming strategy is recommended when Tealive tends to introduce a limited series of products. This is because the former could help gain more attention from customers while the latter could generate higher profit for Tealive in a limited time. Last but not least, Tealive should always be aware of the changes of macro and microenvironment and continue improving its products and services by conducting a regular survey to create value for customers and sustain in this changing environment. 13 7.0 References Allied Market Research. (n.d.). Bubble tea market size, share and trends: Research report - 2027. Retrieved November 1, 2021, from https://www.alliedmarketresearch.com/bubble-tea-market Azman, N. H. (2021). Loob set for 1,000 Tealive outlets. Retrieved from The Malaysian Reserve: https://themalaysianreserve.com/2021/05/18/loob-set-for-1000-tealive-outlets/ Azzam, A. 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(2021). https://www.lokataste.com/tealive-menu-price-malaysia/ Retrieved from LokaTaste: Tee, J., Erdiansyah, R., & Aulia, S. (2020). Pengaruh Word Of Mouth dan Brand Awareness terhadap Keputusan Pembelian Xing Fu Tang di Indonesia. Prologia, 4(1), 18. Retrieved from https://doi.org/10.24912/pr.v4i1.6420 Tealive, Safi Kick Off Health, beauty partnership. The Malaysian Reserve. (2020, March 4). Retrieved November 16, 2021, from https://themalaysianreserve.com/2020/03/04/tealive-safi-kick-offhealth-beauty-partnership/. Tpjchumanists-Economics-Blog. (2010, August 5). The bubble tea industry. Retrieved November 2, 2021, from https://tpjchumanists-economics-blog.tumblr.com/post/907824662/the-bubble-teaindustry Villines, Z. (2020). What are the benefits of https://www.medicalnewstoday.com/articles/320031 chamomile tea? Retrieved from Yu, E. (2021). WHAT IS PSYCHOLOGICAL PRICING? 4 STRATEGIES, EXAMPLES, AND TACTICS. Retrieved from ProfitWell: https://www.priceintelligently.com/blog/bid/181764/psychologicalpricing-strategy-where-s-your-head-at Yusof, A. (2021, June). Creador's entry to accelerate Tealive's Asean expansion, says founder Bryan Loo. Retrieved from https://www.nst.com.my/business/2021/06/700886/creadors-entryaccelerate%C2%A0tealives%C2%A0asean-expansion-says-founder-bryan-loo 17 8.0 Appendices Appendix 1 shows the growth of green tea segment with a CAGR of 8.2% from 2020 to 2027. Appendix 2 shows the Age Group Distribution of Internet Users in Malaysia in 2020. 18