by a Guru
It is quite interesting to note how consumers are responding to bottled or powdered tea beverages these days. In a recent study conducted by a group of 3rd year students of the Ateneo de Davao University, the writer asked them to look at the beverage tea market in Davao City, specifically the bottled ones, not those in bags.
As a backgrounder, it has been observed recently that even carbonated soft drinks companies have already expanded their market to the non-carbs. In the United States for example, Pepsi-Cola has acquired the distribution of Lipton tea, while Coca-Cola was into an agreement with Nestle to distribute Nestea (Kotler 2000). In Davao City, we noticed that separate brands are invading the market, and prominently have come C2, Earth and Sky, Real Leaf; Lipton, fruit flavors like Tropicana and the like. Tang and Eight O’clock Magnolia and Nestea are now into powdered tea flavors.
A separate group study revealed that while carbonated drinks still sustained a large patronage of 54%, non-carbonated drinks are into the level of 46% already. These include the powdered drinks (Cayaban, Lagura, Bacharpa et al. 2009 unpublished).
The survey conducted was only limited to one hundred respondents. Considered in the survey were the demographic profile of the respondents, personality and buying behavior characteristics. The survey was more of a descriptive one rather than quantitative. Some results of the survey follow:
As opposed to the abovementioned results, this latter survey, in terms of consumer preference within the generation ranges of Baby Boomers (1955-65) up to the present Generation Z (1995-present) wherein 53% of the respondents belong to the Generation Y, Carbonated drinks were preferred by only 14.55%, Fruit juices 48.18% while tea beverages significantly closing in at 32.73%. No answer given was at 4.55% (Badayos, Betanio, Chua, Ty and Zulueta 2009. unpublished). The most important factors in a patronage of a tea beverage according to the study is good taste (highest) with a mean of 4.8 followed only by price with a mean of 3.9, packaging at 3.8 and branding at 3.55 (lowest). Thus, the results seem to indicate that flavors play a significant role in consumer choice no matter if the product has been assumed by a popular brand.
Psychographic characteristics of these respondents range from being a home-body (42.73%), couch potato (65.45%), have vices (71.82%). Techno savvy (63%), but health conscious (45%) particularly vegetarians (69%), with meat lovers at 38%, concerned with political issues (51.82%), but seem to be moderately concerned with the environment (36%), and being humanitarian (32.73%). These types of consumers seem to know what to buy when going into a beverage store (52.73%), thus maybe considered loyalists, while impulsive buyers were pegged at 45.45%. Groceries and supermarkets were the most preferred outlets in buying beverages (46.81%) while convenience stores (including sari-sari stores) ranked second (24.11%), and food outlets at a distant (11.35%), an impact to on premise buying, Surprisingly, only 44% of these consumers are willing to look for their favorite brand/product in another store if it is not available in a store where they intend to buy the beverage.; 40.65% take the drink during leisure hours and 36.59% mealtime. Greatest influencers to buying are friends (55.97%) followed by family (30.60%), while there is a narrow line of influence by ads or endorsements 56/53 percentile favorable to them..
Now, let’s go to the most interesting part. What five brands are considered top of the mind, according to the survey as of this writing: C2 (31.82%), Nestea (33.64%), Lipton (14.55%), Real Leaf (2.73%), others (.91%). Seventy percent (70%) of the respondents drink 1-2 bottles per day while 31% of them drink 3-5 bottles per day. What flavors are mostly preferred: Apple (46.79%), Lemon (25.69%), Plain Green Tea (6.42%), and Forest Fruits (5.5%).
The current demand assumptions seem to reveal that 32.73% of the respondents prefer to take tea beverages regularly and that would translate to at least 377,279 of the Davao’s 1.8(?) million population. Assuming that they drink one bottle of tea per day on the average, price average of P20, annual current demand estimate for bottled tea in Davao City alone is estimated to be at PHP 2.535BB. (Badayos, Betanio, Chua, Dumagfo, Ty,and Zulueta 2009 unpublished)
These figures, however, may not be accurate due to the limitations of the study and may be subject to challenge by the more prominent research firms. However, consider this as a testing ground for marketing students. They need to be trained to appreciate the dynamics of how the market feels and these may trigger further validation and initial information to new opportunities for marketers to respond because of the “pulse” it delivered. A third study among the writer’s 3rd year students reveal a possibility of coming up with more tea shops as a substitute to the ever growing coffee shops in the city. ABANGAN.
