Bubble Tea Case Study

CASE STUDY - Bubble Tea

Michelle Gracia

5150348

The key elements that have contributed to Chatime’s success in Australia to this day was that they targeting the right market segment by being present in the Asian-Australian residential area; thus makes their niche market strategy work well. Chatime ‘bubble tea’ which is originally came from Taiwan and has Asian’s taste; simply by targeting fellow countrymen (Asian) in Australia was the answer to penetrate the market as Australia has a high number of immigrations. Chatime is using this opportunity to put down their roots in this country. Their target market was Asian resident, so they make a segmentation by geographic and targeting the location with high concentration of Asian residents. Chatime’s first store are located in Hurstville which has 47,5% of Chinese people. They also focusing in marketing their brand with Mandarin-language media and in social factors by using aspirational group - sponsoring concerts by Chinese pop stars. This made Chatime reaches success in Australia market (Kotler et al. 2012).

The issues that might limit the appeal of ‘bubble tea’ to non-Chinese Australian are the culture of Australian people itself, as cultural is one of the characteristic that influence consumer behavior. This including the difference in taste of the product itself, such as the flavor preferences and the  sweetness/sugar level and the fact that Australian lifestyle prefer a more fresh and healthy product like juice and care for the fat/calories contained in the drink. Also in the marketing point of view, the issue is the brand awareness; on the psychological point; to change the perception that “bubble tea” is an Asian thing; their positioning in the mind of Australian (Kotler et al. 2012).

The key to counter these issues for multinationals is to understand the local perception of the drink products and flavor preferences. Chatime should emphasize in the healthiness and freshness in their product attributes to satisfy the needs of local consumers better. For example, Chatime can promote their ‘bubble tea’ drink with the base of fruit and juice; like smoothie or cold pressed juice combined with Chatime’s ‘pearl’; engineered it into Australian’s taste. They also can promote the use of the freshest local milk, low-fat, and soy milk; and the fact that they can choose the sugar level of the drink. Chatime need to emphasize the benefit they have in their freshly brewed tea; difference function of different tea leaves that good for the body; which appeal to the health-conscious consumers. They will consider their drink as a premium products - to make the drink as something that is indulgent and healthy fortified with benefits and vitamins provided inside.

I expect to find additional Chatime’s outlets in shopping malls, stations, offices, and shopping street (ex. Spice Alley in Chippendale) as those places are general places that not only have more diverse type of people going around but also have a big flow of people that coming inside. With this outlets, it will create awareness of the brand and can reach bigger market segment. Chatime doesn’t need specific geographical segmentation anymore.

I believe that Chatime should target ‘non-Chinese’ locations because it is already started to saturated and they need to grow at some point; making it mainstream. It’s better for Chatime to penetrate now while Chatime’s being ahead, because it hasn’t been done by Chatime’s competitor. Also it is because their new target market is ‘mature’ not Chinese or non-Chinese specifically. Thus, they need to expand to reach their new target market. Another reason is because Australia itself has integrated with many other culture and adapting its various food; this shows that there are room for Chatime to penetrate the locals and can be accepted. ‘Bubble tea’ will not be seen as an entirely new/foreign things for the people.