The secondary campaign will be more informational in nature. The product at this point will be repositioned -- slightly -- from being a superior version of a new Asian-American favorite to being something that can appeal to all markets. By adopting a more global feel to the marketing, we believe that we will be able to develop new markets, increase our exposure among non-Asians and do this without compromising the core audience that we will have built to that point.
There are other strategies that could work as well. For example, we could enter the market with the assumption that the brand is strong and the product is familiar. Such a strategy would thus focus on positioning the shop, perhaps as a consistently superior bubble tea experience. Standards of cleanliness, quality and service would all be featured. The main drawback to this approach, however, is that it assumes too much of the audience. The New York audience is not as hip to trends coming from Asia as the West Coast audience is, so while bubble tea is known it is not nearly as big a phenomenon in New York. Thus why we feel the need to introduce the brand and the product. In addition, with so few competitors in New York there is little reason to focus on differentiating from them; we probably will not share a neighborhood anyway.
Another potential strategy is a low-cost, low-key approach. Tapioca Express is typically a low marketing overhead operation, and prefers that the quality of the experience is the main draw for customers to return. It is believed that the differences in the West Coast market allow for this tactic whereas in New York it cannot be taken for granted that a bubble tea shop will be inherently successful. Indeed, rents in New York are very high, which means that success must come quickly, and for that we need exposure, our chosen strategy.
Our competitors in bubble tea are small independent outlets and have very little in the way of marketing strategy. For the most part, their strategy is low-budget, ad hoc and focused mainly on building awareness. More general competitors like Starbucks represent a more significant threat, as they have strong marketing programs. A premium beverage is marketed, along with a "third place" experience. We believe that the "third place" concept is a good one in a crowded city where everybody lives in a small apartment. We will adopt this in some of our promotions as well, even though this could engender some response from the coffee giant. However, as we compete only indirectly, we believe such a response would be limited at best.
There will not need to be much adjustment to the core features of the product for the purposes of marketing. We may need to reduce the number of beverages if our high-rent spaces to smaller than the real estate to which we have become accustomed on the West Coast. However, we feel that the product we offer supports our premium positioning. The brand should be consistent with the currently established Tapioca Express. The company has been able to build brand value in its Western markets and there is no reason to believe that such brand strength would not materialize in New York given time.
At the core of the promotion plan will be print advertising -- lesser newspapers including smaller dailies, Chinese papers and community papers. This will allow us to focus our promotion on target communities. In addition, social media will be used to help spread the word of Tapioca Express' arrival in New York among the Asian community. We hope to achieve some public relations, perhaps by opening a very high profile location (Penn Station or Times Square) that will attract some media attention.
For the New York market, we will need to adjust our pricing strategy. This is a function of costs, however, rather than marketing concerns. New Yorkers are accustomed to paying extra for products, so our prices compared to those of our competitors will remain in line with comparisons in other parts of the U.S. We will price slightly above independent bubble tea shops, a reflection of our superior atmosphere and product. We have noted in the past that customers will pay more for our boba tea, but not much more, so we only charge a slight premium.
Distribution marks a challenge. Our logistics system is located in the west. Our supplies come primarily from China and Taiwan, sometimes through distributors based in Western Canada. To enter New York, we will need to ship our core ingredients to an area warehouse and from there to the stores. Currently products are shipped to Los Angeles, which for some products may mean needless travel. We will work to reduce this in order to make our New York operations more viable. In terms of store location, Tapioca Express will open several outlets in order to make a big arrival on the New York scene. Focus will be on one high profile location, one suburban location and a couple of inner city locations, perhaps in the boroughs, where the demographics are most suitable.
We will continue the Tapioca Express traditional of good service. We will send a trainer from our best-performing outlet to work with the New York staff, and will have our managers in New York fly to California to work with head office and see operations out West. We believe that by doing this we can deliver the same level of service in New York that we have become known for in the West.
The franchisee already has the financing. The first step then is to scout locations for the shops. The second step, also to be undertaken by the franchisee, is to explore appropriate media options for promotion. Marketing will be coordinated with head office, using ads developed by the head office marketing team. This will ensure that while the message is tailored for New York, the tone and images will be consistent with Tapioca Express' other marketing efforts. The franchisee will then be responsible for taking and placing the head office advertisements, readying the shops, and hiring the staff. Market research will be conducted by the franchisee, either using personal contacts, existing staff or any agency.
Head office has approximately $100,000 to commit to the launch. This cost will go to the development of new ads and to split financing of the new ads and signage for the locations with the franchisee. The franchisee will be responsible for the remaining ads and this will cost approximately $50,000. Social media costs are only the hourly wage of the worker. Most of the marketing program will be conducted by the franchisee or an agent thereof.
Each of these actions prescribed should be measured against its intended effect. The most specific segregation is between the launch promotion and the product introductions. The survey that will be conducted can determine the effectiveness of the launch promotion by inquiring about awareness of the Tapioca Express brand and its products. The survey can also determine if the third objective has been met by asking about bubble tea in general to the non-Asian respondents.
On the whole, not only will the survey measure the intended effect, but so too will the revenues for the operation in the first year. Exposure in particular can be measured by raw revenue numbers, which can be analyzed statistically against promotional expenses and promotional types in a multivariate t-test or ANOVA. Gaining exposure and understanding of bubble tea among non-Asians can be done by measuring the number of non-Asian customers before and after this promotional program begins at the six-month mark.
Tapioca Express is a chain of bubble tea shops that wants to expand to New York. The company wants to establish the brand, build recognition of the brand as a bubble tea shop specifically, and increase understanding of the bubble tea product, particularly among non-Asians. The campaign will be focused around the launch, with awareness being the key objective. Post-launch, more complex messages will be sent. These initiatives will be measured by sales figures, and non-Asian sales figures.
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