Table of Contents
1.1 What is Art-Tea-San
1.2 Who is Aesop?
1.3 Overall product
2.1 PESTEL Analysis
2.2 Competitor Analysis
2.3 SWOT Analysis
Marketing Mix: Positioning
Marketing Mix: Strategy
6.1 Product and Price
6.2 Promotion and Place
7.1 Cost Analysis
7.2 Break-even Analysis
7.3 Promotional Budget
7.4 Sales Forecasts
(Cost, Revenue and Profit Forecast)
Conclusion and Recommendations
1.1 What is Art-Tea-San?
Art-Tea-San embraces the authenticity of unique tea flavours to create an enlightening experienced customer. Originally, VVNs NYC Artisan Tea (pronounced ‘Vivian's'), this product successfully offers a premium full-leaf tea brewed on the spot, combined with a variety of fresh fruit and nut flavours, served in a cup painted by local artists.
1.2 Who is Aesop?
Aesop is an Australia high quality skincare company owned by Natura, aiming to provide premium products to improve overall skin and body care, including soaps, creams and fragrances.
1.3 Overall product
When combined Aesop, Art-Tea-San can become a premium product in the new homerange product line called “Spaces of Ceremony,” “Products for the Self” and “Other dwellings,” which branches out from the traditional skincare range (Aesop 2018). Art-Tea-San offers a creative indulgence in tea, appealing to individuals who seek a contemporary experience, predominantly between 15-30 years old.
The principal political factor is sourcing materials from different parts of the world. A focus will be on the duty and tax rate in which is needed in order to import raw materials. These rates could affect rates importing the materials as well as the country exporting the materials, which, in turn affects customer spending as well as business expenses. As the only organic material will be tea leaves, there will be less regulations set out by the Australia New Zealand Food Standards Code (http://www.agriculture.gov.au/travelling/bringing-mailing-goods). Furthermore, Arteasan will emphasize to the adherence of social and environmental standards that are governed by fair trade practices (https://www.business.gov.au/products-and-services/fair-trading).
The foundations of the business will be affected profoundly by the economic environment of Australia. According to the Australian Bureau of Statistics, real GDP in 2018, has jumped 1% during this quarter, which is the largest increase in seven years. Researches state that Australia has not experienced a recession – two consecutive quarters of negative growth in 27 years, which ensures the likelihood of economic growth to remain consistent. The study also states that household spending increased by 0.7% which was driven by a rise in food expenditure at 1.3%. Thus, Arteasan can potentially gain a successful result upon establishing the brand in Australia. However, Arteasan will have to deal with the inflationary environment where labour and operational costs are not set. The business will also have to take into consideration currency exchange rates, the economic environment of different markets and the taxation level of these environments. (http://data.un.org) Furthermore, it is important to note when household incomes become weak, consumers are less likely to splurge on normal goods and would rather spend on inferior goods, which, as a result the business will need to think of a pricing strategy to meet the needs of consumers.
According to a study conducted by Roy Morgan, in 2016, 50% of Australians drank at least one cup of tea a week. This percentage has been slowly rising since his first research in 2014. Many cultural and social changes are occurring in Australia, Australian are adopting a healthier lifestyle and keeping a health consciousness mind towards food and beverage intake. Tea has always been known as a natural remedy for stress as well as containing many antioxidants and vitamins that are beneficial to overall health and wellbeing. Aesop is a respected brand in Australia, thus, Arteasan will benefit from the popularity and established branding of Aesop. Furthermore, with tea cups being printed with artworks given by local artists, this shines a light for smaller independent/starting artists. Additionally, this could potentially gain a following from artists, bloggers and photographers who are always keeping track of Arteasan for when there is a new design as well as posting about the aesthetics of the art. This will also create a community that appreciates crafted tea and art.
There has been an immense technological growth in the world and Australia. Consumers, specifically younger individuals utilise social media and ecommerce in order to connect to retailers. This affects their purchasing decisions as well as review past purchases from either themselves or other individuals. This means that Arteasan will have to be able deliver internet and mobile technologies in order to fully access these consumers. For example, having social networking websites such as Facebook, Twitter and Instagram as part of the promotion mix will allow Arteasan to engage with current and new consumers. This allows for continuous connectivity which will allow for a competitive edge. Social media will also stand as another way to promote – through the use of influencers as well as a mode of ‘word of mouth'.
Arteasan must maintain and follow legal procedures and regulations in all aspects of the business. Ensuring that standards from jurisdiction set out by the government are in the best interests of the business. Especially, as Arteasan is dealing with consumers (beverages), there needs to be strong knowledge of legal background in order to successfully and legally package, source, manufacture, distribute and prepare to the market.
As Arteasan focuses on hot and cold tea, it will allow the business to prosper throughout the year. As a result, Arteasan will focus on different drinks during different seasons. Arteasan will establish itself as a premium choice for consumers, thus tea leaves must be of quality and from a good source.
2.2 Competitor Analysis
Who are your competitors?
What products or services do they sell?
What is each competitor's market share?
What are their past strategies?
What are their current strategies?
What type of media are used to market their products or services?
How many hours per week do they purchase to advertise through the media used in this market?
What are each competitor's strengths and weaknesses?
What potential threats do your competitors pose?
What potential opportunities do they make available for you?
Aesop has been developed as a company that identifies in numerous markets and industries. Aesop alone sells home and personal products such as body creams, washes, soaps etc in a psychical and online retail environment. However, in this case Aesop is faced with competitors from the beverage industry as our focused product is Artisian Tea. While Aesop's competitors also produce and sell upper market hygiene and wellness focused products aimed at the individual, the competitors in this situation lean more towards companies such as T2 and The Rabbit Hole – both of which are established Tea bars around NSW. Both of these companies have similar product and service offerings, allowing for customers to enjoy Tea in-house and takeaway, as well as selling Tea sets, brews and accessories in-store. Currently, T2 has the majority of the Tea retail and in-store brewing market share with The Rabbit Hole securing a significant amount of the remaining market share. The rest of the market is made up of sole stores offering similar products. These stores use their in-house brewing products as a means to invite customers in-store and then advertise and offer their main products such as tea leaves, pots, flasks and cups. Our competitors use both a distribution model as well as a retail model to market their products, allowing for their own products to be sold in stores such as Harris Farm and Myer, whilst also having numerous specialised T2 stores and breweries. Not only do they use these methods, but our competitors use billboards and posters as their main methods of marketing rather than online or TV advertisements. Potential threats to Aesop + Artisan Tea Bar from competitors would be the difficulty in brand differentiation, as our products and services are basic in nature. However, opportunities for Aesop include collaboration with local artists as a method of differentiation and inspiration for further products and services.
2.3 SWOT Analysis
Few previous collaborations between high quality personal-care brands and beverage stores
Exposure from Artists' promotion as result of featuring them on our products
Variety in Consumer's
Difficult industry to enter as there are already numerous well known and well-established brands - high competition
Societal objectives: corporate social responsibility, whereby corporations are expected to act in the interests of the society in which they operate e.g. supporting local artists by sharing their work via the artisan tea cups.
Customer Retention objectives: increase the number of new customers who purchase aesop products by widening the target market to tea drinks and those who support the local art community.
Monetary objectives: by introducing a new and unique product to the aesop target market, an increase in profit is expected through the sale of both aesop products and artisan teas.
Increase sales of aesop products in conjunction with the artisan tea by 10%
Increase new customer retention rates by 20% by the end of the year
Increase brand awareness and market share by 5% by the end of the year
Improve customer loyalty and repeat business by 15%
Increase sales of aesop products in conjunction with the artisan tea by 10% measured by comparing the businesses financial records before and after the tea is introduced into the product mix.
Increase new customer retention rates by 20% by the end of the year measured by comparing the businesses customer email capture records from the previous year to this financial year.
Increase brand awareness and market share by 5% by the end of the year by dividing the company sales by the total market sales and comparing that result to the previous financial years result.
Improve customer loyalty and repeat business by 15% measured by calculating the number of customers who return to purchase aesop products within the financial year.
Objectives are actionable as they are able to be implemented by all staff within the aesop stores. Companion selling and promotional offers with the aesop product and the artisan teas will encourage customers to buy the product initially. The societal objective that supports local artists is also actionable and will increase the likelihood that customers return as it supports a good cause.
The objectives are realistic as they expect reasonable growth within the next few years from introducing the product. The anticipated growth is expected based on the introduction to a new market, the positive social influence associated with the product as well as the overall quality and uniqueness of the artisan tea, giving it the competitive edge.
Objectives are given specific timelines that results are expected to be achieved. These timelines are based on the standard amount of time needed for a product to gain traction within a new market, keeping in mind the ability of aesop as its own established brand to introduce the product to its current market.
It is essential to market towards customers who seek a high quality, unique experience of tea drinking. The proposed target market would include, but not limited to the customers of Aesop skincare products, as well as organic tea drinkers. This opportunity opens the Aesop brand up to another revenue stream which will allow for a collaboration of target groups i.e. skincare customers, tea drinkers, and philanthropists who appreciate the work of international artists in this case since VVN's is based in New York City, America.
A broad market space is achieve through the targeting of ages 15-30 years old, both male and female, who present a contemporary outlook on their daily life without a limited mindset, such as purchasing tea, but open to new flavours, tastes and experiences. Art-Tea-San offers a unique, healthy, energising drink to provide an everyday spark and uplifting attitude to consumers. Furthermore, this product is targeting socially involved individuals who aim to contribute to local artists, as each cup is creatively painted and appreciated.
Marketing Mix: Positioning
Positioning is an essential component of the Art-Tea-San product launch, under the Aesop brand, aiming to establish a brand identity and product image in the mind of the consumer. This involves differentiating the product from competitors by providing optimum value through price, customer service, features and distribution, filling a market niche (Entrepreneur Media 2018). Art-Tea-San will be positioned as a high quality, luxury consumer good, aligning with the current quality of the Aesop cosmetics brand with products which are “created with meticulous attention to detail, and with efficacy and sensory pleasure in mind” (Aesop 2018).
In order to gain a competitive advantage through value, Art-Tea-San appeals to organic tea drinkers, with top quality ingredients used such as fresh fruits, nuts and oatmeal. The physical product will provide a unique offering through the culmination of organic tea and artistic designs on cups, inspired by local artists. Aesop will differentiate through the strategy of price, utilising a price skimming strategy to position as exclusive and high quality premium full-leaf tea, developing the reputation over time. Price bundling may also be offered to differentiate from competitors, offering the combination of cosmetic products and artisan tea at a single price (Stremersh 2002).
Premium customer service will also be offered to provide a personalised, high value service, both pre-sale and after-sale. Art-Tea-San a will be differentiated through the experience in which it provides consumers, with personal recommendations of sales staff shared honestly. The personal experience offered by Aesop is further resonated in their environmental and social concerns, aiming to improve overall quality of life by using recyclable glass and cardboard and limiting the use of palm oil. When combined with Art-Tea-San, this provides a unique stance to “promote a lifestyle … centered around the appreciation of tea and the sharing of art” (VVNs Tea 2016). Through the involvement of local artists, the product is differentiated from competitors, by recognising the benefits of community involvement and an overall experience.
Marketing Mix: Strategy
6.1 Product and Price
Creating a successful, and unique product is highly influential for Aesop in the development and expansion of their range into Tea's. Art-Tea-San has developed a competitive advantage over other competing brands such as T2 through combining the art of local Artists and a range of unique Tea blends to provide a product that both limits environmental waste and provokes a sense of creativity and inspiration into the consumer. The Art-Tea-San Tea represents and aligns with Aesop's unique branding approach through their environmental design, aromatic experiences, and poetic writing. Art-Tea-Sanby Aesop is sold under a private label brand, in which the brand is owned by the resellers in this case the retailers being Aesop.
Aesop combines design, architecture, film and literature into their stores and products; this molds well with Art-Tea-San which showcases the natural enrichment that art, design, and pure ingredients produce. (Haldemann 2017) Art-Tea-San uses premium-grade full leaf tea from all over the world, just like the coffee bean ‘single origin' that come from all different origins. Offering ongoing variety to customers with an exciting experience to consume new and different flavours, whilst also having the ability to create different beverage combinations. (VVNs Tea 2016) Although Art-Tea-San is primarily a product, there is a service component surrounding the delivery of the Tea, involving the interaction between staff and customers. Therefore, the quality of customer service is imperative in the products description.
Art-Tea-San is a new product within the Aesop brand, therefore a new product pricing approach will be undertaken known as price skimming; which involves charging the highest price that customers who desire the product are willing to pay. This will be executed through a cost-based pricing strategy; encompassing a fixed percentage amount placed on top of production and delivery of product costs. Thus, the pricing of Art-Tea-San is consistent with Aesop's other products, ensuring there is no crossovers between demographics. Further, prices will be consistent across all stores and locations, avoiding the illegal activity of price discrimination.
6.2 Promotion and Place
Aesop has a well-established sales department which has enabled the brand to stand out as one of the most valuable cosmetic brands. An addition to the team of sales representatives will help in the development of new outlets that will be used in the distribution of Art-Tea-Sanis product. In order to ensure that promotion of the product in the market is effective, Aesop needs to find sales representatives who are qualified in the tea industry so that they can help the promotion team to develop new distribution channel. The company also needs to direct more resources towards the promotion of the product, the resources will be used on adverts and facilitating the distribution teams (Dolnicar & Friedrich 251). The resources will also be used to maintain good public relations, promote sales and personal selling. Though such promotion, the product will be able to penetrate in the market and considerably have a higher share as compared to the competitors.
With Aesop's existing distribution channels around the country, the company needs to conduct an analysis and target regions that have a high potential for growth. Since they are introducing a new product into the market, they need to conduct a market research so that they can establish the proper ways of getting the product to the consumers. The existing distribution markups will help the company in understanding different regions and the trends in the market. The company will also be able to make sure that the Art-Tea-Sanis products are made available at the right time and place with the proper quantities through the use of channels such as sale agents, retails, direct sales through e-commerce platforms and wholesalers.
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