Main Topic: Marketing Coffee in a Tea Culture

Hosts: Stephen Huang , James Stanworth , Clyde Warden

If there is one beverage Chinese culture can be clearly linked to, it would be tea. Tea, and its related rituals, has diffused throughout the past centuries around the world. Yet into this stronghold, coffee marketers have boldly gone, and succeeded, although the results may not be exactly what was expected. Unique cultural values have created a coffee market that has special opportunities. In this show, our panel of coffee drinkers discuss the marketing strategies used over the past couple decades, the current coffee market, and future directions and opportunities.

This topic has an accompanying research show (show 10) for marketing researchers. It includes details on research methodologies and findings mentioned in this show. To view the supplement and other research related shows, register and/or sign in.

With tea and tea related products and retail locations all over the greater China region, it is hard to see how coffee products could get a foothold, not to mention thrive, as they are doing. Since the mid 1980s the Mr. Brown brand has created the ready to drink coffee market. After more than 20 years of exposure, Chinese drinking habits had moved enough to accept coffee and the onslaught of Starbucks and 85c. That early influence, however, has created a preference for sweet drinks and accompanying snacks that may not fit well with the coffee culture often emphasized by Western coffee retailers, including Starbucks.

Starbucks have a one size fits all marketing plan, 85c fits the gap by satisfying the local needs.

Photos:

• 1) Tea houses dominate the drink market. 1) Tea houses dominate the drink market.
• 2) These tea houses normally offer small meals along with tea. 2) These tea houses normally offer small meals along with tea.
• 3) Tea is sold everywhere. Here a stall inside a Carrefour offers samples. 3) Tea is sold everywhere. Here a stall inside a Carrefour offers samples.
• 4) This person can offer advice about the many types of tea for sale. 4) This person can offer advice about the many types of tea for sale.
• 5) A tea house emphasizes that it has Chinese tea. 5) A tea house emphasizes that it has Chinese tea.
• 6) Shelves in small and large supermarkets are crowded with tea leaves. 6) Shelves in small and large supermarkets are crowded with tea leaves.
• 7) Although instant tea bags are for sale, the emphasis is on brewing your own tea. 7) Although instant tea bags are for sale, the emphasis is on brewing your own tea.
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• 9) The small stall is rich in its emphasis on the tea ceremony. 9) The small stall is rich in its emphasis on the tea ceremony.
• 10) The salespeople are normally very knowledgeable. 10) The salespeople are normally very knowledgeable.
• 11) Numerous tea paraphernalia on sale. 11) Numerous tea paraphernalia on sale.
• 12) Even with such a strong tea emphasis, coffee shops are easy to find. 12) Even with such a strong tea emphasis, coffee shops are easy to find.
• 13) A caf? offering coffee with afternoon meals (popular for informal business meetings). 13) A caf? offering coffee with afternoon meals (popular for informal business meetings).
• 14) Bread/cake stores have recently begun to offer coffee and small tables for relaxing. 14) Bread/cake stores have recently begun to offer coffee and small tables for relaxing.
• 15) These copycat stores are easy to start up and attempt to cash in on Starbucks' and 85c's success. 15) These copycat stores are easy to start up and attempt to cash in on Starbucks' and 85c's success.
• 16) Some stores emphasize the type of snack they sell, with coffee on the side. 16) Some stores emphasize the type of snack they sell, with coffee on the side.
• 17) The big local winner is 85c. Normally taking a corner location and using a distinctive design (the white building sticking out). 17) The big local winner is 85c. Normally taking a corner location and using a distinctive design (the white building sticking out).
• 18) 85c normally is all glass on the outside, helping to draw attention inward. 18) 85c normally is all glass on the outside, helping to draw attention inward.
• 19) 85c normally has a takeaway window or simply is open to the outside. 19) 85c normally has a takeaway window or simply is open to the outside.
• 20) This type of design is also normal for bread stores, which shows 85c's close links to bread/cake stores, rather than coffee. 20) This type of design is also normal for bread stores, which shows 85c's close links to bread/cake stores, rather than coffee.
• 21) In the supermarket, coffee is mostly seen in the common 3in1 formulation. 21) In the supermarket, coffee is mostly seen in the common 3in1 formulation.
• 22) American firms have very good brand recognition in this category. 22) American firms have very good brand recognition in this category.
• 23) Mr. Brown dominates the ready to drink coffee market. 23) Mr. Brown dominates the ready to drink coffee market.
• 24) The Mr. Brown logo fits well with the local perception of coffee as a foreign luxury good. 24) The Mr. Brown logo fits well with the local perception of coffee as a foreign luxury good.
• 25) Coffee beans and ground coffee have begun appearing more in since 2005. 25) Coffee beans and ground coffee have begun appearing more in since 2005.
• 26) The UCC brand from Japan has been selling to the coffee hobby market for decades, and is now moving into the growing home market. 26) The UCC brand from Japan has been selling to the coffee hobby market for decades, and is now moving into the growing home market.
• 27) Instant coffee is not so common, as 3in1 tends to dominate and falls between the easy to prepare products and the higher end consumer who wants to brew. 27) Instant coffee is not so common, as 3in1 tends to dominate and falls between the easy to prepare products and the higher end consumer who wants to brew.
• 28) Coffee beans can be found in supermarkets now, but only since about 2005. 28) Coffee beans can be found in supermarkets now, but only since about 2005.
• 29) Numerous brands are positioning for this growing market. 29) Numerous brands are positioning for this growing market.
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ConsumerCam:

Show Links:

• 85c Coffee Shop in Taiwan Video Introduction (in Chinese)
• IS Coffee (a local coffee chain that entered the market early)
• Mr. Brown 25th anniversary campaign (in Chinese)
• Taiwan Coffee Association

Bottom Line:

• In the 80’s coffee was a hobby among experts; it was not a common drink.
• In the 90’s the market grew for importers, Mr. Brown (Ready to drink coffee) became popular.
• 85c is the market leader in Taiwan; the bakery is very popular. People like to socialize there.
• Starbucks in store environment is more suitable for the western culture. E.g. people reading, and enjoy quite time.
• Starbucks targets the middle/high class people, people with cars (They don’t offer take-away bags).
• 85C often have seats outside, people see others enjoying themselves, it becomes an automatic crowd drawer.
• Starbucks’ setting is more closed in, when you go there, it’s an active decision.