EXECUTIVE SUMMARY
We aim to introduce a sustainable luxury brand in China, the leading tea company Zhu Ye Qing, into the American luxury market. To present the best quality in the new market, we choose the most luxurious brand under the company, Lun Dao. With the rise of health conscious among the American consumers and the high-pressure working background, it is a great opportunity for us to emphasize the importance of hot tea and meditation for physical and mental health respectively in the US market. Through combining Chinese tea culture with the philosophy of balance of Taoism, we bring in a new form of meditation to the US market, the mediation with the core concept of Tao, balance between nature and human while appreciating our supreme tea. Via the tea meditation, consumers concentrate on their inner side and nature, and relax in the meantime. The meditation and tea provides consumers a new way to restore their energy, creating a new perspective of life, the balance of life. Beside the personal side, our tea house also offers a social place for customers interact with their friends or others. Our main strategy is to increase the intangible value of our product and our brand as well as develop good relations with people, both the press and consumers, through various media and word of mouth. To build good relations, we also hold events such as tasting parties for our main customers to socialize and to create brand awareness. All in all, it’s a highly human and nature oriented program.
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COMPANY SUMMARY
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Zhu Ye Qing Company is a leading company of the tea
industry in China, selling high-quality tea produced from its own specific plantation in E’mei Mountain in Sichuan province of China. It’s not only the leading company but also the first one that built brand awareness in the industry. Its position is a luxury tea company with little harm to the environment within its operation and tea plantation. Today, it sells tea in the first tier cities in China and exports to Japan, North Africa, Europe, US and other countries. Under the company, it has four brands, Lun Dao, Zhu Ye Qing, Bi Tan Piao Xue, and Bao Ding Xue Ya. We choose Lun Dao, the most luxurious brand among the four, to expand to the Untied States.
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IN-DEPTH COMPANY’S HISTORICAL REVIEW Beginning
Medicine Drink
2737 B.C.
Qin Dynasty Han Dynasty 221 – 206 B.C. 206 B.C – 220 A.D.
Tea culture was appeared
Expressed by other arts
Brought to Western
Tang Dynasty 618 – 907
Song Dynasty 960 – 1279
Ming Dynasty 1368 – 1644
First Sino-Japanese War
Qing Dynasty 1644 – 1911
Commercialized 1911
Experts agree that the beginning of drinking tea was in 2737 B.C. While legendary ancient Emperor Shen-Nong, who was also the ancestor of Chinese agriculture, was resting beside a bush, the leaves accidentally fell into the water that he was boiling for drink. Then he found that the drink had a great aroma and good taste, soothing his fatigue and refreshing his spirit (“Chinese Tea”). The Tang Dynasty (618 – 907 A.D.) was a specific point in the cultivation of tea; during the Tang Dynasty, tea became a national drink (“Tea”). At that time, the tea culture was turning into an art and becoming firmly established (“History of Chinese Tea”). Also, the first book of tea, Cha Jing or The Classic of Tea, was published in the Tang Dynasty by Lu Yu. The book included the origin of tea, the way to brew tea, tea sets, and different types of tea. The tea ritual was seen as a symbolic harmony between humans and nature. In this period, tea was compressed in to teacakes and became easy to transport, which helped tea to spread to India and Japan (“History of Chinese Tea”). In the Song Dynasty (960 – 1279 A.D), the tea culture was expressed through Chinese arts. During the Song Dynasty, art and literature was splendid. Most scholars were experts in the tea culture. The process, from the preparation to the drinking of tea, became very elaborate (“History”).
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ZHU YE QING named by Chen Yi
1964
1998
2005
2007
Tea history Sichuan tea history Company history
In the Ming Dynasty (1368 – 1644 A.D.), the tea culture encountered another major turning point, which has continued until this modern day. The process of drinking tea was simplified and made easier, which caused drinking tea to be more fashionable (“History of Chinese Tea”). Furthermore, with the method known as “stir fixation” replacing “nature fermentation” as the traditional means of making tea, the production of green tea and black tea was invented (“History”). Tea houses became common in urban areas, and social centres provided full service of tea and snacks (“History”). It was during the Ming Dynasty that the Chinese tea culture was exported to Europe. In China, Sichuan has always been an important centre of tea production. According to the Chinese philosopher and geographer Gu Yanwu, tea had been popular among citizens in Sichuan since the Qin Dynasty (221 – 206 B.C.). During the Han Dynasty, the tea trade market first emerged in Sichuan. Because of its superior quality, the tea produced in Sichuan was chosen as a tribute to the Tang Court (Ri Zhi Lu). Moreover, the earliest custom of drinking tea appeared in the Sichuan area (Ri Zhi Lu). The tea house continues to be a social place and lifestyle in Sichuan. Now, Chengdu, the capital of Sichuan, has the largest number of tea houses in the world, approximately 38,000 (Sina).
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Company History
E’mei Mountain, located in Sichuan, is one of the earliest tea plantations in the world. Because of its isolation from the outside world, it became the lifetime destination of many hermits who were influenced by Taoism. In this way, Taoism was introduced into this primitive mountain area. Naturally, these hermits delivered a Taoistic attitude into the way of drinking tea, and the significant E’mei tea culture was gradually formed. With the passage of time, the tea culture underwent numerous improvements and expansion. Our company – Zhu Ye Qing – inherited the tradition of tea production. Taoism was first recognized as a religious system during the 4th and 3rd centuries B.C. The publication of the Tao Te Ching and other works provided a focus for Taoist thinking, which is about the inner side and health of humans. Taoism was named after the central principle, Tao, which pervades this system of thought. The original meaning of the term was “way” (path). At the end it was extended to signify "reason in man and reality." This transformation was brought to definite accomplishment by the real founder of the system, Lao-tze (6th century B.C.). He was enabled to give new life and meaning to the doctrine of Tao as a simple and unitary principle of all reality. And that doctrine hypostatized the principle of Tao.
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*See the whole story at Appendix A.
The tea that is uniquely grown in E’mei Mountain was named by Foreign Minister Chen Yi in 1964. At that time, when Chen Yi went to E’mei Mountain on official business, he was surprised by the great taste of the tea there. He asked the monk in Wannian Temple, with whom he was playing chess and enjoying tea, “What kind of tea is this?” The monk told him that the tea was produced in E’mei Mountain but had no name and he could name it as he liked. Chen Yi answered, “The tea water is clear and the leaves are green and full of life, really like the tender bamboo leaf, so let us call it Zhu Ye Qing.” The translation of Zhu Ye Qing is “bamboo leaf green,” and this is the origin of the name of our tea, which we also used as our company name (Zhu Ye Qing Official Website). Zhu Ye Qing Company was established in 1998. In 2003, Zhu Ye Qing sponsored the game of “Go” (or wéiqí in Chinese) and revived the Chinese tea culture; in 2004, it was appointed by organizers to provide the tea for the game.In 2005, it launched its most luxurious brand, “Lun Dao - Zhu Ye Qing,” and was chosen as the gift for the president of Russia at that time, Vladimir Putin. Then in 2007 it was selected to represent as the Chinese ambassador in the luxury exhibition Top Marques in Monaco, and entered European market.
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PERIOD OVERVIEW AT FOUNDATION Since the system of the tea culture was firmly established in the Tang Dynasty (“Tea”) and was valued by the Tang Emperors, tea plantations became popular in China (The History of Tea); the prototype of the tea plantation of our company can be traced back to the Tang Dynasty.
Political The Tang Dynasty was the most prosperous era, known as the “Golden Age,” in Chinese history (TheTangDynasty.org). The government at that time set three basic departments to frame the rules and laws, which were divided into six ministries: military, personnel administration, finance, justice, rites and the public works. This system well regulated the society. The government achieved its political hegemony by receiving tributes from numerous kingdoms and states and exerted a powerful cultural influence over neighboring states (Wiener). The political stability ensured the flourish of the tea culture.
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Economic China took centre-stage of the world economy, marking “the rise of the East in World History” (Adshead). The prosperity of the economic development was driven by regional specialization, market expansion, waterway transportation and foreign trade. The improvements of both agriculture and the handicraft industries resulted in people’s involvement in commercial activities, which also paved ways to both domestic and international trade with other countries (Totallyhistory). During this period, transportation was efficient and well managed. The ground network already extended to all directions within the nation (TravelChinaGuide). The prosperity of the Silk Road, established in the Han Dynasty, as well climbed to its summit in the Tang Dynasty. The marine trade routes were also expanded (Totallyhistory). The specialization of each region, the development of transportation, and the well-organized trade routes were the biggest reasons for the dissemination of the tea culture to other countries.
Social Compared to the former dynasties, Tang had better diplomatic relations. The social structure during the Tang Dynasty had more mobility than in many of the other times in Chinese history; this was due to the institution of the imperial examinations that allowed men of lower class to improve their lot through hard work, perseverance and ability. Because of this background, generally the situation of the public was improved, which as well left people more leisure time. The relative peace and prosperity of the society made it possible for the upper class to enjoy the time than they did during the prior dynasties (About.com). As a result, they had more time to appreciate tea drinking. Since “it is during the Tang Dynasty that Taoism becomes the official (state religion) of China (Reninger)�, Taoism, also strongly influenced tea culture.
Technological Technology was one of the most brilliant evolutions in the Tang Dynasty. The new technologies and techniques also led to the growth of agricultural production. Due to the help of new techniques, the speed of planting was faster and the number of square measure became larger (thetangdynasty. org). According to The Classic of Tea, during the Tang Dynasty the rules of tea planting were formed; the process and methods of making tea were also completed officially via this book (Lu).
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Art and Literature Culture and art in the Tang era were the most magnificent in Chinese history. New styles of ceramics were created; potters invented new techniques for decoration on the ceramics with three colors to create unique looks, which was called “sancai” (TheTangDynasty.org). The most important form of art at that time was Chinese poetry, called Tang poetry. Many historically excellent poets appeared at that time. While reading the poems, people can also see the “stability, progress and harmony” of the society in the Tang era. Since Taoism had a deep influence on scholars in the Tang Dynasty, Taoism was also linked to poetry. In these Taoist art forms, there was an obvious aesthetic consistency between the ideas of simplicity, harmony, attunement and the beauty and power of the natural world (taoism.about.com). With the tremendous development of literature, the first monumental book of tea, Cha Jing, was published. Cha Jing, or The Classic of Tea, explored ten aspects of tea (Lu). This book represented the start of Chinese tea culture, and it had a huge contribution to the spreading of tea culture. It claimed that tea drinkers should enter the realm of complete serenity, to concentrate on tea and make tea tasting become a medium for cultivating one’s morality as well as molding one’s temperament. It created a precedent for the Chinese tea ceremony and set a model for the expansion of tea culture in later ages (Lu). The tea ceremony and the serving of tea have been considered a type of art since ancient China; it is also called “cha dao “ in Chinese or “the way of tea” (Rotaru, 2013). The history of the tea ceremony can be traced back 1200 years ago, which is in the Tang era. The ceremony required certain steps in the process of brewing and drinking tea. *See the complete overview at Appendix B.
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CURRENT STATUS
Mission Statement To provide spiritual oasis and to offer a new life perspective and longevity.
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SWOT Analysis Strengthes • Long history and legend of Zhu Ye Qing tea and the reputation of E'mei Mountain • One of the best tea brands in the Chinese tea market • The first tea brand that established brand awareness in China • Successful branding strategy, including promotion and packaging • The advantage of the climate and geography for the quality of tea • The support for tea plantation from the government • Representation of Chinese culture in the European market • The only Chinese luxury brand that was invited to the luxury exhibition Top Marques in Monaco • The tea houses of Zhu Ye Qing, named Tea Tao, have already operated well in China • The ecotourism in E’mei Mountain • The introduction of tea culture, performance and teaism to tourists
Weaknesses • Limited volume of production • Various brand names and price levels under Zhu Ye Qing company, blurring its brand image • Restricted distribution of Zhu Ye Qing nationwide • The brand recognition is better among the connoisseur
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Opportunities • Continuous growth of Organic Foods Market in the US • People’s rising awareness of the benefits of green tea • Tea is one of the fastest-growing beverage categories in the world • Consumers increasingly see beverages as a mean to enhance health, e.g. changing from coffee to tea • Customers’ tastes and expectations are evolving to encompass more varieties and higher quality • US consumers’ tea preferences become diverse and complex • The trend of healthy lifestyle in the US, e.g. yoga, meditation • The consciousness of sustainability • Consumers’ concern for ingredients for the sake of safety • The Chinese tea house is still a niche market in the US
Threats • Highly fragmented tea market in China with intensive competition from both national brands and local producers • Consumers’ preference toward local varieties instead of branded tea • Irregular and disordered pricing system in Chinese tea market • The negative impact on high-end tea due to strict government policy against corruption • Rising distribution and transportation costs • The production and quality of tea is highly affected by local climate and environment • The number of tea drinkers and the frequency of drinking tea are projected to grow very slowly, especially among younger consumers
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PHYSICAL • • • • • • •
Simple and elegant design Color green Refresh Pure vegetal Mellow sweet Delicate Bamboo leaves
Prism
PERSONALITY • • • • •
Serene Wise Responsible Natural Reclusive
RELATIONSHIP
CULTURE
• • • • • •
• • • • •
Respect Trust Understanding Peace Kindred spirit Long-lasting friendship
Chinese Taoism Sense of balance Perfectionism Know-how
REFLECTION
SELF-PROJECTION
• • • • •
• I feel peaceful • I feel healthy • I feel refreshed
High quality High value Meditation Natural Admirable
Source: Kapferer 15
Brand Equity Pyramid THE BRAND DNA Tao (harmony, balance and longevity) BUSINESS CATEGORY Luxury tea and experience THE UNIQUE POINT OF DIFFERENCE High quality and unique tea species combined with Taoist philosophy
ESSENCE
PILLARS
PERSONALITY
CONSUMER BENEFITS • Physically: health • Psychologically: mind and spirit PERFERENCE DRIVERS • Healthy lifestyle • Longevity • Unique smell and texture of tea • Unique aesthetics of tea leaves • Eco-friendly BRAND BEHAVIOR Response for sustainable conscious | Remain low-key Inherit from Chinese tea culture | Pursue for perfectionism ATTITUDE AND TONE Serene | Wise | Natural | Exclusive | Eco-friendly
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Brand Strategy UNIQUE REVELATION We emphasize the balance from the perspective of Taoist philosophy in our tea experiences and the appreciation of tea that only the connoisseur customers can achieve. BELIEF SYSTEM To be the opposite of the materialistic society and utilitarianism, Taoism advocates the nature and simple living style. Taoism rejects competitive individualism, provoking the idea of no competition with uncompromising idealism. While holding the romantic freedom from the material world, it persists on respecting for the universe and letting the universe operate itself without interference of the ego. It insists on living in balance with the universe and enlightening through simplicity and balanced action (Aaron, 2010). Taoism aspires for longevity by following the regular power of the universe. By relieving oneself from the external world and relaxing one’s heart from tension, one can reach the status of no ego and feel the nature. To understand the original taste and aroma of tea, one needs to have internal peace (Aaron, 2010). With the worship and respect for nature, the harmony between nature and human enhances and prolongs one’s life (Reid ix).
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Balance
BRAND RITUALS The tea ceremony has four steps: • Look: the shape and color of dry tea leaves • Smell: the aromas of brewing tea • Observe: the movement of tea leaves during brewing • Taste: the flavor with three little sips According to “The Virtual of Tea,” the “elegantly simple and quiet environment is often the ideal setting for tea drinking.”
廉
美 和 靜
Lian, literally meaning honest and clean: Tea helps drinkers develop a calm and peaceful temperament, purifying the soul and warding off disturbances Mei, literally meaning aesthetic appeal: tea brings the enjoyment of beauty, both sensual and spiritual He, literally meaning harmony: tea is often an enjoyable conversation between friends Jing, literally meaning respect: serving tea to either guests or seniors is a gesture of politeness (Zhuang, 1989)
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DISTINCTIVE LEXICON
ZHU YE QING The name of the company for the namesake of the exclusive species of the tea.
LUN DAO The luxury product line under Zhu Ye Qing company. The English translation of the foreign words in the trademark is "Discuss Tao".
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TEA TAO The name of the tea house, symbolizing the concept of integration between tea and Taoism.
TEA MIND Customized meditation and tea service, provided by the tea house.
PIN (品) Pin can be translated as tasting; it is a way to divide the quality of tea, and emphasizes the atmosphere of tasting tea. In Chinese, 品 consists three mouths (口); Chinese considered tea an important element in social activities, but three is a best number of tea tasting, with communication, interaction and learning from each other.
CHA (茶) The word 茶 (tea) in Chinese is made up of three components: 艹 (grass), 人 (human), 木 (wood). 人 is in the middle of 艹 and 木. It embodies the essence of Taoism: the unity of man and nature (Taosim, Chinese Tea, Chinese Tea Culture).
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MARKET ANALYSIS
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MARKET OVERVIEW
Although coffee has been part of Americans’ daily drink, during the past few years, tea consumption has grown in the US market either on-trade or off-trade. Key Players in the U.S. tea market Unilever United States, with its well-known brand Lipton, RC Bigelow with Bigelow brand, Twinings & Co Ltd, R with Twinings, Hain Celestial Group Inc. with Celestial Seasonings, and Starbucks Corp with Teavana and Tazo Tea. Between 2009 and 2013, while the sales of Unilever and Bigelow declined, the sales of Twining and Starbucks continued to grow (“Tea in the US”).
The preference of tea in the US market has been occupied by black tea, especially in the format of ready-to-drink tea and ice-brewed tea. But during the past five years, the trend of green tea and other tea has been rising and perceived as high quality. Additionally, because of the awareness of health and nutrition, some coffee consumers are switching from coffee to tea, which contains less caffeine. The new formats of tea, such as the pyramid tea bag, and loose-leaf/full-leaf tea have become popular in the US market and are perceived as more unique and high ranking. Although the growth of volume sales is slow, value sales have increased well. Tea rooms and specialty tea cafes as well are emerging in the market around urban areas (“Tea in the US”).
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THE SIZE OF MARKET
In the United States... $2390.2 million retail tea sales in 2014 4,000 specialty tea rooms retail shops in 2013 85% growth to $36.4 billion sales of natural & organic food and beverages from 2005-2009 61% Americans have visited a natural food store in 2008 13-19% out of the total 215 million US adults are considered as LOHAS consumers $290 billion marketplace for goods and services focused on health, environment, social justice, personal development and sustainable living *LOHASTM: Lifestyles of Health and Sustainability
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GROWTH POTENTIAL AND OPPORTUNITIES In the United States... Hot drinks in the US showed sigenificant growth in 2013 Green tea has been growing much faster
22.5% growth of tea consumption during the last decades, additional 3% growth in the next five years 6% growth predicted to increase to 38,156 tons for the on-trade volume of tea by 2018 8,000% growth of the catagory in other fringe and artisanal teas, like rooibos, oolong, and white tea over the past 10 years alone The size of the LOHAS group continues to expand *See more information at Appendix C.
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COMPETITIVE LANDSCAPE According to The Tea Association of the US, US tea consumers are mostly in the South and Northeast regions (“Tea Fact Sheet”). While Southern citizens prefer iced tea and sweet tea due to the climate, Northeast is a better choice for our tea house. New York City is number one on the list of the most stressed out cities in the United States (Hicken). Since our statement is a spiritual oasis considered a relaxing destination for citizens, it would be highly potential for us to set our oasis in a high-pressure location. The other factor is that New York City is a city of high income (Bee). In addition, the perception of tea in New York City has shifted from a hot drink to “haute” drink with the emergence of trendy tea houses and reimaged afternoon teas. The gourmet tea rooms serving loose-leaf have become more common in New York City. Tea has become a “chic lifestyle” instead of just a “commodity” (Covington). We choose Washington D.C. as our second location because it’s the capital and cultural symbol of the U.S.
New York City 25
Washington D.C.
Direct competitors - Premium Tea Brands in High Sales Volume
Indirect Competitors - High-end Organic Groceries
Indirect competitors - Luxury Fitness Clubs & Yoga Retreats
New York City
Washington D.C.
*See the detail introductions for competitors in Appendix D. 26
COMPETITIVE LANDSCAPE High Price
Western Style
Eastern Style
Low Price
Popular Tea Houses in New York City
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High Price
Eastern Style
Western Style
Low Price
Popular Tea Houses in Washington D.C.
These two maps show the positions of Tea Tao and direct competitors in New York City and Washington D.C. The selection of competitors are based on different recommendations by famous media outlets. From this map, the high price range area is mainly western style tea. The Mandarin’s Tea Room in New York City, which is a Chinese Style tea house, is the only Eastern style tea house in the high price range. Thus, as a luxury tea house with a Chinese tea culture association, Tea Tao’s closest competitor is The Mandarin’s Tea Room. *See more information at Appendix E.
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Core competencies, competitive advantages
Core Competencies We are distinct from other high-end tea rooms/tea houses in the US market. Most of the luxurious tea rooms are Western, especially British, in style, providing Britain afternoon tea; only a few are Asian style, but even they are Japanese tea houses. While tea perception is shifted from commodity to premium product, we have the advantage to add values to our teahouse and tea experience (LaMendola). US tea consumers perceive loose-leaf/full-leaf tea as high quality tea and ready-to-drink tea bags are perceived as ubiquitous. Competitive Advantages We offer unique tea experience combined with education of tea culture and peace of meditation via the spirit of Taoism. Customers who enjoy the public phenomenon can choose the open space table, with a tea expert demonstrating and preparing tea for customers; customers who prefer a quiet and private experience can order a meditation room and have an expert providing tea services for them and a meditation teacher instructing them to enter the inner peace of meditation. The demonstration of tea ritual and the instruction of meditation will be concentrated on combining tea experience with the concept of meditation of Taoism. We also provide VIP system of tea choices for our connoisseur customers to truly enjoy our tea with in-depth understanding of the taste and knowledge of the tea they choose. Our competitive advantages also include our special origin of tea, our exclusive taste in the US tea market, the beauty of visual dynamics of tea brewing, and the sustainable concept. As mentioned before, our mission statement is to provide spiritual oasis and to offer a life perspective and longevity; we aim at encouraging people to live according to a natural system. This concept matches exactly with recent introduction of a new idea around the world--LOHAS, which stands for healthy and sustainable lifestyle (LOHAS.com).
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KEY SUCCESS FACTORS
• • • •
Tea market has been rising in the US market (“Tea in the US”). Health conscious has been stronger among US consumers (“Tea in the US”). New York City is a high-income and high-stress city that needs a medium to release its pressure (Hichen). Lun Dao tea houses are already established in China with strong financial background and the unique origin of Zhu Ye Qing tea.
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TARGET CONSUMER
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LOHAS™ Affluent Generation X NATURALITES™
* 1. 2. 3.
Lundao brand targets at three groups of consumers: Affluent gen X and older millennial who exprenece lots of pressure while working LOHASTM consumers who hold solid attitudes toward personal and planetary health NATURALITESTM consumers who have a strong personal health focus
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Demographic • • • • • •
Gender: Both male and female Age: 30-50, mostly Generation X and older millennials Average Income: $150,000 Income Producing Assets (IPA) Range: more than $1,000,000 Education: college degree or higher Family Life Cycle: singles and partner couples
Lifestyle/Psychographic • Geography: New York City & Washington D.C. • Top Tapestry™ Segment: Laptops and Lattes (Esri ZIP Code: 10007/10024 & 20004) • Work and leisure activities: they hold professional positions in business, finance, legal, computer, and entertainment; physical fitness is a priority for them, thus they exercise regularly and pay attention to nutrition. Their leisure time is filled with visting art galleries and museums, attending the theater and opera, reading books and newspapers electronically, and going to bars and clubs (Esri "Laptops and Lattes"). They tend to keep balanced lifestyle between work and life (Keene and Handrich). • Interests: fashion, traveling, technology, fitness (Esri “Laptops and Lattes”). • Relevant opinions and beliefs: they are more realistic and desire for authenticity; “they know what they want and what they like and most importantly who they are” ("Reaching Generation X"). They tend to be less focused on material possessions and more concerned with having a memorable experience (Sommer 5).
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Customer behavioral
SPECIFIC TECHNOLOGY USAGE These age-range consumers had “low-tech childhoods” but now are the first “high-tech” middle-age. They know the power and importance of technology and participate in it enthusiastically, but their experience and knowledge on technology are weaker than the following generation (Tate). They are “flexible, adaptable and comfortable with technology” and crave personal contact and specific information. They desire to learn leading edge technology (Keene and Handrich). And those who are health and environment conscious in this target segment are in favor of technical developments while enjoying nature (Heim). They are more likely than the general population to own digital smart phones and other digital devices, have 63% smartphone ownership, and 41% tablet ownership (iab). MEDIA CONSUMED According to the figure below, affluent Americans in generation X are the largest demographic of digital media users among all age groups; they have 47.6 hours weekly of Internet use with traditional media down only slightly (Ipsos). They approach social media out of curiosity and desire for reconnecting with their old friends. Their usages of social media are mostly connection with their social groups. They are the first generation that adopts the Internet as part of their daily life, including purchasing and mapping. Furthermore, they like to research merchandise online before they purchase. About 65% of generation X used Facebook in 2014, and their usage of Twitter had risen (Fox). For the consumers who care about healthy lifestyle (LOHAS), they have heavier Internet (+21%) or Magazine (+16%) usage than the average US adult (MRI & NMI). SHOPPING HABITS Our target customers shop at natural and organic grocery stores such as Whole Foods Market, purchasing organic foods and beverages as a safer, healthier, and fresher option (Molyneaux). They are heavy users of green, socially responsible, or healthy products, and are willing to pay for premium products ("NMI’s Organic Segmentation"). Regular expenses include nice clothes, traveling, and treating themselves to a great meal or a spa (Esri "Laptops and Lattes").
*See more information at Appendix F.
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PRODUCT AND VALUE PROPOSITION
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GOALS AND OBJECTIVES
• Introduce Lun Dao to the US market and build brand awareness* Store traffic: 35 unique visitors per day in 1 year • Elevate Taoist philosophy to a new perspective of life in the US* • Bring in the extraordinary Chinese species of tea into the US tea market Tea Tao aims to break even within 3 years. The sales intents to earn 5% increase each year. • Provide excellent and unique tea experience • Be recognized as one of the best tea houses in the US Be ranked by more than 5 digital and print media as one of the top tea houses or -
recommended as the must-visit tea house every year. The news of Tea Tao and Lun Dao tea be reported by the press more than 15 times a year. CTR (click through rate) of our each video surpasses 100 The “likes” of our Facebook page exceeds 300 for each post The followers of our Instagram account over 500 for the first year. Be recognized by over 60% interviewees in the neighborhood of our tea house and 20% in the US market.
*Lun Dao will keep tracing brand awareness ratio after Tea Tao starts operating in New York and Washington D.C. Lun Dao anticipates the brand awareness ratio achieving 20% a year later, and then raising to 40% by two years.
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STRATEGY OVERVIEW For our product, we focus on the balance of Tao. As for other strategy, we emphasize on the relations between our brand and both the press and consumers; for promotion, we aim to develop relations with them via events and both print and digital media, and to build our brand awareness through the sponsorship and partnership with golf club and golf players. Our public image will be creating balance between life and work for our consumers.
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UNIQUE SELLING PROPOSITION
Our tea species is exclusively planted and manufactured only at the height of 4000ft to 4500 ft in E’mei Mountain in Sichuan province of China.
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BRAND POSITIONING
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Within the US market, most of the tea houses are affordable and western style. The only tea house that is similar to us is The Mandarin’s Tea Room, which is also high class. But unlike The Mandarin’s Tea Room, which is traditional-eastern, Lun Dao tea house is modern easter, which combines the essence of western and eastern but still keeps the core of Chinese culture. Therefore, in the US tea market Lun Dao has unique position.
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MARKETING MIX Product TEA The uniqueness of Lun Dao tea is because of its strict standard of plantation and production. The standard of soil condition is strict and takes 10 years to cultivate the nutrition. Since the requirement for the soil condition is rigorous, Lun Dao tea is only made locally and the production involves 18 manual steps to reach high quality. Furthermore, there’s not a sign of modern mechanism in our tea plantation; the growth and production of Lun Dao tea is totally nature. Beside the plantation, our distinctive tea making methods of Lun Dao require tea makers who are sophisticated and have been through many life experiences to produce tea without rush to achieve perfection.
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E’mei mountain
Taoist temple
Tea plantation
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Lun Dao green tea is planted at the altitude of 4,000~5,000ft on E’mei Mountain, to enjoy sufficient sunshine, while the average of green tea is at 2,600~4,000ft. This factor results in the limited quantity of Lun Dao plantation. Another factor for its rarity is that every 500g Lun Dao needs 5 million fresh and delicate sprouts to produce.
MASTER LUN DAO
(SUPREME GREEN TEA)
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REGULAR GREEN TEA
Beside green tea, we also have black tea, oolong tea and Jasmine tea. Oolong tea The aroma of Lun Dao oolong tea is strong and long lasting. It has mellow taste and can be brewed more times than other tea. Black tea When the black tea of Lun Dao being transported to England, it was praised as the “flowing ruby.� Jasmine tea We use 4-5 times of Jasmine than the quantity the other brands use. We process our Jasmine tea with our green tea together, which results in an unique aroma. OOLONG TEA
BLACK TEA
JASMINE TEA
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SERVICE - TEA ROOM
Our tea rooms provide the space for customers to social and enjoy tea together. Tea house in Sichuan, our brand origin, is not only a store for tea drinking but also a place for people to social with others. While tea helps refresh people’s mind and physics, it also create a calm and peaceful atmosphere for people to spend time together. Even when social with friends instead of meditating alone, customers can still relax well and refresh themselves.
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While consumers drink tea and chat together in tea rooms, we also provide tea ceremony for them to learn about the beauty of brewing and drinking tea. It’s also a good topic for them to chat and enjoy the time together. It provides customers an education of Chinese tea culture and the complete demonstration of brewing and tasting tea with the tea devotee’s explanation.
Steps of tea ceremony: Look The shape and color of dry tea leaves Pre-heating • Warm cup and tea pot • Portion the leaves • Rinse tea Wash the tea leaves of possible impurities and heats them so that they can provide a richer flavor Infusion • Transfer from water to tea Control the water temperature and brewing time in order to ensure the quality of tea • Filter Enjoying • Savor The aromas of brewing tea • Observe The movement of tea leaves during brewing • Taste The flavor with three sips
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SERVICE - TEA MIND Our tea mind rooms provide private mediation services for temporary rest to make balance between work and life, between outside world and inner peace, between human and nature. Our meditation is an action with non-action.
5 steps of tea meditating: • Select a type of tea and sit cross-legged on the cushion erectly to straight spine and let the energy flow through the body • While the server boils the kettle, adjust breath to breathe in and out slowly and evenly and pay attention to physical sensations. Focus on the energy flow of the body. Then shift focus to the feelings and the inner thoughts. • Observe the change of tea leaves and the color of the liquor mindfully with full attention without a sense of self and preference when the server pours the boiling water into the cup. • Smell slowly and appreciate the aroma of tea. • Sip the tea and let the liquor flow through throat slowly. Discover the transformation of the taste and scent of the tea in mouth. Stop for a while, recall the taste and feeling of the tea, imagine the journey of the tea from the plantation at the mountain, the harvest of the sprout, the manual production in Sichuan, to the brewing process and how the tea became part of the body.
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Pricing
MASTER LUN DAO SUPREME GREEN TEA $90 per person
REGULAR GREEN TEA $60 per person Average
BLACK TEA $20 per person Average
OOLONG TEA $20 per person Average
JASMINE TEA $20 per person Average
TEA MIND $100 per hour
TEA CEREMONY $50
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Placement: New York
Solow Building, 9 West 57th St., Manhattan Zip Code: 10019 Neighborhood: South of Central Park
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Lun Dao will open its New York Tea Tao inside a Manhattan skyscraper where our target consumers, the high-income, highpressure residents, work at or work nearby. Solow Building would be a perfect choice for Tea Tao since the floors above the 23rd floor offer a virtually unhindered view of Central Park. Even if the building is not located on Wall Street, its tenants mostly work in the financial industry (the list of its well-known tenants include several private equity firms such as KKR & Co. L.P., Apollo Management, and Silver Lake Partners; and the U.S. Headquarters of the French corporate and invest bank Natixis, and the alternative investment management firm Highland Capital Management). Tea Tao aims to constitute a private harbor for relaxation to balance the nature of the Central Park and the hussle and bussle of the world’s busiest city.
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Placement: Washington D.C.
857 8th St. NW, Washington D.C. Zip Code: 20004 Neighborhood: Downtown/Penn Quarter
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Lun Dao treasures the symbolic value of this metropolis, which is its political and cultural statement. Located in the heart of the Nation’s Capital, Lun Dao Tea Tao is close to the government and business districts as well as the major attractions and monuments of D.C. With business people and briefcases crowding the sidewalks to and from, Downtown D.C. is not an option for slow-walking. Tea Tao wishes to create a habitat for repose, bringing an open, transparent air to the regulars of Downtown.
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LOBBY
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TEA ROOM
TEA MIND ROOM
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Promotion
ADVERTISING Prints
CONSUMER RELATION VIP system
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DIGITAL MEDIA Official website Email Social media
PARTNERSHIP & SPONSORSHIP Golf
PRESS RELATION Reporters/Editors
EVENT Press conference Tasting party
ADVERTISING Prints One month before our tea house opening, we will start to release our print advertising with our posters on print magazines. The advertisement will continue after the launch of our brand and tea house.
Forbes
The Economist
GolfDigest
Food&Wine
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Poster for Tea Product
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Poster for Tea Mind
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EntryPage
DIGITAL MEDIA Official website We use our website and email as oneway media to deliver our information to our customers. Our website provides information such as the story of our brand, the species of our tea, and the knowledge of the Chinese tea culture. Consumers can also make reservations for either tea rooms or meditation rooms via our website.
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Reservation Page
Main Page
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DIGITAL MEDIA Email And we use regular emails to stay connect with our customers and to provide news about our brand and tea house for them. We’ll also utilize emails to send weekly cheer-up quotes to our subscribers on each Monday. Social media Social digital media are the mutual channels for us to communicate with our consumers and other potential customers. Since Generation X is the main group using Facebook to get information and stay connect with friends, we also create a Facebook account for spreading the information, including our special events and other information. Instagram is used to convey our brand image. It will be our another medium to post weekly quotes and instant events and news for our subscribers.
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We choose these press because our target market is similar to theirs, such as the stockbroker for Wall Street Journal and healthconscious consumers for Real Simple. We aim to have our information reported on the health & wellness or food & drink space on those press to reach the elites and healthconscious consumers.
PRESS RELATION Reporters/Editors We will build relation with various media to have chance to report either news and events about us or the information about our brand and tea house; also to get opportunity to have the recommendation from those media to the public. Following is how we are going to manage our press relation. • 2 months before our opening, we will begin to provide segmental news about our brand and tea house to the press to release our information to the public. • Develop relation with the reporters/editors and invite them to our press conference. • Provide the press release draft for them to edit and report on their media whenever we have an event or any news. • Hold seasonal activities for the press and socialize with them to ensure that they have a good perception of our brand and tea house. • Also make sure that we keep good relationships with the media so that they will have pages for us.
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CONSUMER RELATION VIP system Our new customers cannot order our highest Lun Dao tea. Only the VIP customers, seen as the connoisseurs, can order it. Once we recognize those customers as connoisseurs of tea, we will provide them the choice of exclusive varieties of Lun Dao tea. There won’t be a clear description about this system; only via our special invitation and recommendations by other VIP customers can they have access to it.
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PARTNERSHIP & SPONSERSHIP To broaden our brand awareness, we will cooperate with the golf club and golf players. The reason why we choose golf is the similar spirit, which is self-concentration. Both our tea meditation and golf require to concentrate on tea and the little white ball respectively. For the U.S. Open 2018, we will sponsor for the golf balls and golf cars as well as tea.
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Besides, we will sponsor Shinnecock Hills Golf Club financially. In the meantime, we’ll also invite the high-class members of the club to our tasting parties. Shinnecock Hills Golf Club Shinnecock Hills Golf Club is a golf club founded in 1891 in the US. It is the oldest incorporated one and was one of the five founding member clubs of the USGA. It has been through various expansions and renovations for decades and had its major restoration in 1991. The annual fee for membership is $500,000. It’s a high class and exclusive golf club.
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EVENT During our pre-launch, launch, and postlaunch, we will hold different events for different targets. The main events are the press conference and the tasting party. After the opening of our tea house, we will keep holding other events. Press conference In February, on the day of launching, we are going to invite various press to our tea house to write about our opening and to have clearer images of our tea house and our brand to report. After the conference, our tea house is officially open. Tasting Party In the middle of April, we will hold a tasting event for the the highest level customers and press to our tea house to taste the first spring tea, which is harvested and produced approximately 5 April. At the party, there will be give-away, a tea cup, for every attendants.
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Invitation card
Give-away
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Jordan Spieth was ranked the 9th in the world golf ranking in 2014. He was born in 1993 in Dallas TX.
Rickie Fowler was born in 1988 in Murrieta CA. He was ranked the 10th in 2014.
Gerry Watson was born in 1978 in Florida. In the world golf ranking he was ranked the 4th in 2014.
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For our tasting party, we will invite one famous and high-rank golf player such as Gerry Watson to be our special guest each time, and also the high-class members of Shinnecock Hills Golf Club to taste the first spring tea and to socialize with the special guests and other members. Our list of golf players includes Gerry Watson, Jordan Spieth, and Rickie Fowler.
People Gifts: tea caddy made by tin
CRM (customer relation management) In store, our staffs and tea servers will provide consistent and respectful services and environment for our customers to ensure they have great experience at our tea house. We’ll also send little gifts and greeting cards every special holiday for both the consumers, as well as birthday card for customers.
Social Digital: Facebook, Instagram Facebook and Instagram will not only be our promotion tool but also our word of mouth media for people to share the information with their friends and to see how much people “like,” “share,” and “comment” on our page so they can have the idea of our brand’s popularity.
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2016 PROMOTION CALENDAR
December Print Advertising Forbes The Economist GolfDigest Food & Wine Media Relation Vogue Wall Street Journal New York Times New Yorker Time Food & Wine Real Simple Event Marketing Tasting party Press Conference Digital marketing Official Website E-mail Social Media Marketing Instagram FaceBook 71
Pre-Launch January
Launch February
March
April
Post-Launch May
June
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CONCLUSION
Although in the US market coffee is still the main national drink for daily life, the growth of tea drinking and the trend of health conscious show the positive future for us. In addition, we’re not merely selling Chinese tea to Americans but to introduce a new way of life for them to improve the quality of both their physical and mental life. Especially in the high-pressure neighborhood, our tea house Tea Tao will be the spiritual oasis for the residence. Besides, we choose golf to be our sponsorship target and invite golf players to our tasting parties to create word of mouth. Though it seems that golf have no connection with tea and tea house, we see the common between the two: self control. Both golf and tea meditation are about concentration. Furthermore, golf is a common high-class sport for affluent people and elites, who are our main target customers. Therefore, we decide to develop the new market and relations with golf for the US tea market. Overall, with the increase of the trend of meditation and healthoriented consumers, there is a great opportunity for our brand.
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