Profitability of Bubble Tea in the UK

Profitability of Bubble Tea in the UK

Abstract

Bubble tea is known by many other names such as Boba tea or pearl milk. Bubble tea has become a favorite of any people in the UK. Although not all people are aware of what Bubble tea is, a majority of them have the knowledge about this tea and more people are getting enrolled into the culture of consuming Bubble tea. This study was meant to research on the feasibility and profitability of Bubble tea in the UK. Since the researcher could not get access to everyone in the UK, the researcher sought to use London as the base city for the purpose of conducting this research. The study used interviews and questionnaires to collect data from the respondents. From the findings, the consumption of Bubble tea is bound to rise in the UK since many people are turning to the consumption of tea on their daily basis.

Keywords: Bubble tea, flavor, profitability

CHAPTER 1: INTRODUCTION

Nowadays, Bubble tea business is becoming more and more popular around the world. More people go to the bubble tea shop to buy or drink tea or buy raw materials that would make them make tea at home. Bubble tea is a drink with either a base of green or black tea (both rich in antioxidants), infused with a variety of creamy extracts or natural fruit flavorings. The main consumer group is young people aged 15 to 30 who purse new concept drinks such as fashion and health. Judging from the consumption data of a few years, the main consumer groups are concentrated in the young people who are 15 to 30 years old who are pursuing fashion, health and new concept drinks. In recent years, as people’s awareness of bubble tea has deepened, their consumer groups are also in a stage of overall growth. The global bubble tea market is divided into black tea, green tea, oolong tea, white tea. It is estimated that from 2017 to 2023, the green bubble tea market segment is the most profitable market segment, and by 2023, it accounts for one-third of global foam tea. This is due to some of its health benefits, such as preventing cancer and cardiovascular disease, lowering cholesterol, improving metabolism, losing weight, etc.

Bubble tea stores are divided into two types: self-operated stores and franchised stores. The biggest advantage of joining a tea shop is to save time and worry, and those who have no experience can quickly open the store. The self-operated store can effectively handle the inventory and special products of the company. Because it has direct control and is easy to operate and manage, it can perfectly embody and implement the company’s marketing concept.

My project is trying to find out if bubble tea is profitable in the UK and building a bubble tea market in the UK.

1.1 Background Information

Tea regarded as a universal drink in the UK. During various seasons and in different regions, tea is also served with different seasonings. Some of the commonest seasonings are mint, ginger, tangerine, sesame and peel among others. People drink tea not just for its color and fragrance but also for its great medicinal value. The tea culture in the UK has been developing for a couple of hundred years (Goldman and Nalebuff, 2013). Tea in the UK has gone through export-oriented production stage and has also come to the consumer-centered selection stage.

The national drink Bubble tea is a perfect example of the cultural and dietary integration which symbolizes the culture and the creativity of the UK’s food industry. Besides, the emergence of the Bubble tea has led to the development of a series of industrial chains such as catering, manufacturing process and the raw materials.

Most Bubble tea brands expand their businesses by selling a franchise. Franchising is described as a method that is intended to expand the business and distributing goods and services by way of licensing relationships. Both the franchisor and franchisee conclude a contract that the franchisor grants a license as well as the privilege to the franchise to operate the business under their trademark. Being a franchise is a favorable way for entrepreneurs.  It favors even those that do not have previous business experience. When used in the context of a small business, franchising means the art of having the independence of ownership with a big business network in back (Prasad, 2016). As such, the benefit of buying a franchise is that it has less risk on business failure as a result of the franchisor having been tried out the business concept in the market already.

Tea is taking the UK market by storm. Some of the operators include Chatime and Bubbleology which have rolled out sites across the UK. Bubble tea is gaining a lot of popularity in the current days with many people opting to go for it. It is estimated that Bubble tea was created about 40 years ago and people began to familiarize themselves with it day by day. Bubble tea falls under two categories namely teas without milk and milk teas. Both categories can be survived either when hot or cold. Besides, both varieties come with various ranges such as black, green, fruit or oolong tea which have different flavors.

Bubble tea is served in clear cups with a straw so that tapioca balls which are commonly referred to as “boba” or “pearls” come shooting and the drinker can chew them. In recent times, Bubble tea is becoming increasingly visible on the streets of the UK cities. Bubble tea offers consumers with a social media friendly drink which is considered better than the traditional cuppa. This trend reflects the versatility of tea as well as the ways in which it can be used outside to get consumers excited and as well as generate a higher yield.

1.2 Research Questions

This section is one of the essential parts of any research. The clarity of a research question is shown by the ability to draw a set of conclusions from the data that has been collected. Besides, it is essential to develop a research question that clearly focuses on the research. This research will be guided by the following research questions;

  1. What are the benefits and problems in Bubble tea due to internationalization in the agricultural industry?
  2. Do the present Bubble tea marketing strategies have an impact on its profitability?

1.3 Research objectives

As a part of the research, the research objectives need to be clear and specific and they need to identify what the researcher wishes to achieve after doing the research. Therefore, they can be said to be the milestones that the researcher follows to be able to deliver what he intends to deliver. The following are the objectives of this research;

  1. To determine the benefits and problems facing Bubble tea trade due to internationalization.
  2. To identify the best Bubble tea marketing strategies that can increase its profitability in the UK.

1.4 Dissertation Structure

Proper organization is a key factor in the development of research. The structure helps to communicate the information in a sensible manner and also guide the researcher in coming up with appropriate conclusions. This research will seek to describe a sensible rationale of research design selection as well as choices which include inductive approach, interpretive philosophy, and qualitative data collection by conducting qualitative data collection through questionnaire survey and in-depth interviews. The summarized structure of the interview is provided below.

 

CHAPTER 2: LITERATURE REVIEW

The growing globalization is giving rise to free trade agreements which have enabled the tea companies to thrive in a great manner. Many of these have turned to internationalization as a way of improving their sales (Gerzema and Lebar, 2008). Despite the fact that internationalization is a great process which can increase the profitability of the Bubble tea business, it also comes with its share of challenges (Goldman and Nalebuff, 2013). One of the main challenges for the internationalization process is to overcome the liability of foreignness. Hahn and Doganaksoy (2008) states that the process is internationalization can be divided into four phases viz pre-entry, entry, and growth and repositioning. The pre-entry stage is the initial stage in any business where the individual or the company is preparing to enter the market. During this process, the individual or the company seeks to understand the potential markets, the industry as well as the needs to come up with several key decisions (Goldman and Nalebuff, 2013). During this stage, the individual or the company needs to make decisions on where to go, when to enter the market and how to enter that specific market. These are important considerations which need to be considered before the decision to enter the market has been made.

The question of how to enter the market is very critical since it requires a proper study of the entry modes. The literature that covers entry modes offers various theories which the need to be considered. However, most of it explains the entry theories in a statistical manner. When compared against the developed markets, emerging markets have a major challenge in that they differ in the external environment and the firm characteristics (Goldman and Nalebuff, 2013). As such, there is a need to clarify the entry mode choices for emerging markets. It is essential to perform a proper external environment analysis when entering to the emerging markets.

The entry phase describes a period when a firm has decided to enter a new market and has set all the required resources ready (Hahn and Doganaksoy, 2008). In this phase, the competitor or the firm is in the process of being established in the new market. This phase is very important since an evaluation of the entry needs to be thoroughly conducted. Judging from the market reaction, there is the need to make the decision as to whether to implement the entry mode or not (Prasad, 2016). In the growth phase, also known as the sequencing phase, the firm is in the process of establishing its position in the market and is likely to experience growth. The last phase is where the individual or the firm has become fully established and is ready to defend its position (Goldman and Nalebuff, 2013). At one point in time, the company needs to experience maturity and it is at this point that the market share will be lost and the firm will need to evaluate how to position itself in a successful manner.

2.1 Theories

Many theories have been brought forward to try and determine the development of businesses. One of these is the Uppsala model. This model has been used to explain the process of profitability and internationalization in business. The model arose as a result of some research that was conducted at the University of Uppsala in the middle of the ’70s (Goldman and Nalebuff, 2013). This model explains various means that and patterns that firms go through in gradual investments in foreign markets. Although this theory has been widely used, some scholars have criticized it for a number of reasons. Many of these believed that a wider part of the existing theories lessened the impacts of the problems of cultural differences and paid little attention to the necessary internal foundations so that firms could take care of international activities.

The Uppsala Internationalization model cites four different steps which are essential for entering the international maker and which cannot be considered independently without considering the situation of the company, the status of the market and the knowledge of the market. This model explains that most tea companies being their expansion at a nearby market. While here, it is possible for them to have a wider knowledge of the market as well as greater control of the resources which can affect the operation of the business. In this case, distance is considered as a great factor. Distance refers to both the cultural distance that a firm experiences as well as the various differences witnessed in the policy, language and the difficulty of acquiring knowledge and market information.

In most cases, companies bring a new market through export the establishment of relations which are subsidiary of sales or foreign production. This model seeks to make the decisions on of the management clear as well as offer an opportunity of risk-taking in business. The model works on the premise that the higher the risk; the higher the returns. As such, investors are not shy to put their hard earned money to risky ventures since these are some of the investments that have very high returns. Thus, the Uppsala model applied in the Bubble tea business in the UK seeks to explain and understand the decisions of the management regarding various business ventures (Goldman and Nalebuff, 2013). Being a new business, the Bubble tea business is only embraced by those who are willing to risk what they have. If they emerge successfully, then they get high returns but if they lose, then they lose a lot of money.

Bubble tea business in the UK is taking a bigger dimension by extending the business to overseas markets. In doing this, the business through its management must evaluate the long-run profit potential for a nation. This is done by evaluating the benefits, costs as well as the risks that come with the business. All of these must be properly balanced to ensure that the business will be profitable.

The ability of a business to run in the country is determined by many factors among them the willingness of that nation to offer a satiable environment for conducting the business. Some of the benefits that arise from running a business in a country are determined by the market size, presence of a ready market for the finished products and the present purchasing power of the customers. The UK market offers a satiable market for the already produced Bubble tea. However, there has been the need of some investors to run some subsidiary branches outside London. In the long-run, the economic benefits of running a business in a foreign place are majorly determined by the ability of the business to overcome the challenges that come with foreign markets. The size of the market, the purchasing power of the customers are some of the determinants of the success of a business. The long term benefits if a business is determined by the future economic growth rates as well as the appearance of the economic growth since this is a function of a free market system.

2.2 Consumer Behavior

Consumer behavior refers to the various actions taken by consumers to acquire, use and dispose of consumer goods or services, including the decision-making process that precedes and determines these actions. Consumer behavior is closely linked to the exchange of products or services. Under the conditions of the modern market economy, enterprises study consumer behaviors with a view to establishing and developing long-term exchange relationships with consumers. To do this, you need to understand not only how consumers get products and services, but also how consumers consume products and how they are disposed of after they are used up. Because of the consumer’s consumption experience, the way consumers consume old products and their feelings will affect the consumer’s next round of purchases, that is, it will have a direct effect on the long-term exchange relationship between the company and the consumer. Traditionally, research on consumer behavior has always focused on the acquisition of products and services, and research on the consumption and disposal of products is relatively easy to ignore. With the deepening of consumer behavior research, people are more and more aware that consumer behavior is a whole, a process, acquisition or purchase is only a stage of this process.

Customer behavior affects the age group of people who decide to buy pearl milk tea. The main consumer group is young people aged 15-30 who pursue new concepts such as fashion and health. The gender and age of the consumer group influence their preference for milk tea and determine the frequency of purchase. More female consumers many young people think that drinking tea is a way to catch up with fashion and fashion. So when they are leisurely and have nothing to do, they will choose to go to the tea shop and a cup of tea to kill their time. The standard of living is improved and the time for consumers to relax increases.

2.3 Impulse Buying Theory

Impulse purchase (unplanned purchase) means that the goods purchased by the customer in the supermarket are not ordered or recognized at all before coming to the supermarket. The impulse purchase decision of the customer is formed after entering the shopping place (Ayres, 2014). When people see a long queue at the door of a store, they will feel that this store is very popular and it is worth taking the time to try. In the time they are resting, they will spend this time waiting for food, which will make them feel like this. The food waiting to be served is particularly attractive. After all, this is what they took time to get.

According to the theoretical study of impulsive purchases, people find the reason why people like to buy pearl milk tea. The taste is fresh and delicious. The pearl milk tea is now sold and made of a variety of delicious raw materials. The taste of pure milk tea is very attractive. It is impossible to match the milk tea produced by the big industry. The tastes are constantly being updated, and the changes are numerous. Many series are formed, and consumers have a wide choice. There are only milk teas such as fragrant milk tea, coffee black tea milk tea, wheat fragrant black tea milk tea, etc. The additions include pearls, coconuts, meddler, crystals, etc., while snow bubbles, sand ice, shaved ice, etc. are only available for sale.

2.4 Brand

Brand is a kind of identification mark, a spiritual symbol, a value concept, and is the core embodiment of excellent quality. The process of cultivating and creating brands is also a process of continuous innovation. With its own strength of innovation, it can stand in an invincible position in the fierce competition, and then consolidate the original brand assets, and participate in a competition at multiple levels, multiple angles and multiple fields. According to research, most people buy things first to see the brand, whether it is a well-known brand that they know (Tsujimoto and Ishikawa, 2008). Therefore, in the tea shop’s business model, most of them are brand franchise stores, which are more attractive to customers. The franchise provider will solve the problem for you: milk tea raw materials, tea shop equipment, menu design, milk tea formula, clerk milk tea technical training, store name design, shop decoration drawings, marketing plan, etc.

CHAPTER 3: RESEARCH METHODS

This research used a qualitative research to look at how the UK can increase its Bubble tea business profitability. The research made use of questionnaires which were given to various people who are in the Bubble tea business. The researcher also gave out some questionnaires to possible clients and asked them of their preferences regarding the product.  The questionnaires were given out to the respondents and each respondent was given 2 days to fill the questionnaire and submit it to the researcher. The questionnaires were dispatched by hand to the recipients and those who the researcher could reach used email to send to them. The respondents would then fill the questionnaires and bring send them back to the researcher through the same email and they had received them from.

After receiving the questionnaires, the researcher analyzed the results based on the questionnaires that had been asked. By looking at the response that was given in the questionnaires, it was possible for the researcher to have a better understanding of the Bubble tea industry and its profitability with the UK. The primary research conducted by the researcher was important since it gave the researcher enough information on the trends in the Bubble tea business as well as future prospects. More than 50 people participated in filling in the online questionnaires while about 30 people filled the questionnaires face-to-face.  In selecting the participants, the researcher did not consider such things as nationality, race or ethnic differences among people. As long as one was an enthusiast if Bubble tea, then he or she was considered for the interview. As such, it is possible that the researcher obtained data from people of different nationalities, races, age and social status. These participants offered information about their preferences as well as the total knowledge of the products.

The questionnaires given to various company representatives were meant to extract information about their experience with the Bubble tea business. The researcher sought to know their previous experience with the business and its future prospects. Was it a business that had a future or was it diminishing? From the information provided, it was possible for the researcher to determine the position of Bubble tea business in London. The researcher valued the use of the various representatives of different companies since they understand the situation of the business more than anyone else. They have access to the benefits and risk involved in carrying out the business.

Other the primary research, the researcher also consulted secondary material widely. Although there is not enough secondary data on the Bubble tea business, the researcher sought materials that had information about Bubble tea business. The material consulted were those that were less than twenty years old. In so doing, the researcher wanted to ensure that only relevant materials are brought into the researcher. It is assumed that a source that is more than 20 years old is likely to present information that may not be appropriate in today’s market. A such, the researchers were keen on the secondary material to consult. The secondary sources were well analyzed and synthesized so that only the relevant information was picked up.

3.1 Research Philosophy and Research Approach

Research philosophy is an essential aspect of any research process. It refers to a belief regarding the way in which data about a phenomenon need to be gathered, analyzed and used (Tsujimoto and Ishikawa, 2008). Various research approaches are based on epistemology as opposed to doxology. The difference between the two is that epistemology refers to what is known to be true while doxology refers to what is believed to be true. Research is supposed to confirm the things that are believed to be true to be known as truths. This is the conversion of doxa to episteme. This study was based on positivism research philosophy. The positivists believe that reality is stable and it is possible to observe and describe it from an objective viewpoint. Besides, observations made on the basis of positivism should be repeatable. In the study of the profitability of Bubble tea business in the UK, the researcher sought to determine the trend of Bubble tea business and present believable findings.

3.2 Research Strategy

In research, the research strategy refers to the way in which the researcher attempts to conduct his or her research. Every research has his or her point of view that they wish to handle the research from. In this research, the researcher planned to prepare questionnaires and then deliver them to the respondents.

3.3 Research Instruments

In any research, research instruments are essential since they make it possible for the researcher to collect data. To get feedback from the respondents, this research used the questionnaires as the instruments of data collection. A questionnaire refers to a set of written questions which have spaces provided where the respondents reply to questions. Questionnaires may be self-administered or used during an interview. For this research, the researcher self-administered the questionnaires and also sent some of them via the email. The filled questionnaires were then collected and the data analyzed appropriately.

The researcher also conducted interviews with the respondents. Interviewing can be either structured on unstructured. In a structured interview, the wording of the questions is the same for all the interviews. Respondents are required to choose from answers which have written in advance. In the unstructured interviews, the interviewer gives questions to the respondents about a certain topic and the respondents are at liberty to phrase the questions that they wish. For the purpose of this research, the researcher depended mostly on the questionnaires and thus sought the use of unstructured interviews.

3.4 Sampling

In research, a sample is a group of people that have been taken from a larger population. The sample is assumed to be a representative of the larger population. This study used both random sampling and purposive sampling. Random sampling was used to collect data from the customers of Bubble tea while purposive sampling was used to collect data from companies that deal in the production of Bubble tea. The sample size was 60 customers of Bubble tea and 12 representatives from the companies producing Bubble tea.

3.5 Data Collection and Data Analysis

The data for this study was collected by the use of interviews and questionnaires. The questionnaires were either emailed to the recipients or hand delivered. For the interviews, the researcher engaged a few respondents in a face-to-face interview to be able to gather more information on Bubble tea.

Data analysis refers to the process which is systematically applied in the description, analysis and illustration of the obtained data. During this research, the data that was collected was descriptive in nature. It was collected by the use of questionnaires which the researcher collected after the respondents had filled them. Data was also collected from various companies which are involved in the production of Bubble tea.

The researcher used the responses from the 60 customers of Bubble tea and 12 representatives from the companies producing Bubble tea. The researcher grouped related information together and then also formed clusters of information that he felt essential for use in the research process. In this, information related to the profitability of the Bubble tea business in UK was analyzed.

3.6 Research Ethics

In research, research ethics refers to the norms and principles that must be followed to ensure that the research process achieves its mandate. During the interaction between the researcher and the respondents, it should be made clear that the respondent is not mistreated. He or she should be handled with the utmost care and informed of all the intentions of the researcher. To ensure that ethics were followed in conducting this research, the research first drafted a framework to help in conducting the research. In the framework, the following were emphasized;

Informed consent is a major research consideration which means that the participant should not be coerced to participate in any research but should do so voluntarily and intelligently. The participant has to be given the space to be autonomous and decide whether to contribute to the research or not. Informed consent seeks to prevent assaults on the integrity of the participant. In conducting this research, the researcher ensured that all the participants were informed of the researcher and of the right to decide to participate or not. All the participants were also given the consent form to sign which informed them of their autonomy and independence during the conduction of the research.

The other ethical consideration that the researcher observed was beneficence. Beneficence means to act of not harming the participants. As one conducts research, he or she must ensure that the participants are not harmed in any way, either emotionally or psychologically. Besides, the researcher being conducted should not be aimed at aiming any person but benefiting the constituents. During the conduction of this research, the researcher ensures that the participants were handled well and treated fairly to avoid harming them either physically or emotionally. For those participants who hesitated to respond to some questions, the researcher did not force them. The researcher understood that forcing to answer questions against their will would have amounted to harassment. As such, the researcher informed the participants that they were allowed to answer the questions that they felt like answering and leaving those that they did not prefer to answer unanswered.

The other way that the researcher observed ethics in conducting this research was by respecting the anonymity and confidentiality of the participants. In conducting any researcher, the researcher must be aware to respect the dignity and fidelity of the participants. In researcher, anonymity is protected when the participant’s identity cannot be linked with personal responses. The researcher should not display the names of the participants and the information that they gave. Doing this would amount to disrespecting them. To ensure that anonymity and confidentiality were maintained, the researcher did not ask for the names of the respondents when answering the questions. This way, it was not possible to link a certain individual with particular information. Besides, the researcher promised the participants that their information will only be used for the intended purposes and no information will be linked to a specific respondent.

3.7 Research Reliability and Validity

Research validity and reliability are very important concepts in any research. Both relate to the believability of the findings of the research. Validity refers to the extent to which an instrument represents the factors under study (Holder, 2013). To be able to ensure validity, the researcher asked varied questions during the interviews to ensure that enough information was obtained from the research. Besides, the respondents answered the questions as the researcher listened and made notes to ensure that the questions were only answered by the targeted population.

Reliability is another essential feature in any research process. The purpose of maintaining reliability is to ensure that the cases of error in research are limited to as low as possible. To ensure reliability in this research, the researcher made sure to use the right instruments to reduce cases of error. To reduce data bias, the researcher ensured that the questionnaires were delivered to the intended respondents through emails registered under their names. The researcher ensured that all the questions in the questionnaires were counterchecked to eliminate cases of ambiguity and errors.

CHAPTER 4: FINDINGS/ RESULTS

From the data obtained, the researcher was able to find out that many people in London know what Bubble tea is.  From the analysis done, 64.7% confirmed that they knew what Bubble tea is. These people confirmed to have had past experience with Bubble tea and they expressed their love of the tea. 54.4 % of the respondents confirmed that they had never tried out Bubble tea. This means that there is still a significant number of people have not known what Bubble tea is yet. There were also questions of the most preferred flavor of Bubble tea and the largest percentage of the respondents confirmed that they liked the coconut flavor. Many people consider flavor when they want to buy Bubble tea. From the results of the questionnaires, 58.7 % of the respondents said that flavor is one of the most important parts when it comes to choosing Bubble tea. This is an indication to the companies producing Bubble tea that if they need to increase profitability, then they need to a lot in minding the flavor to use.

In the research methodology, the researcher asked questions on how to promote the Bubble tea business. From the responses obtained, the research found out that promotions were essential in the flourishing of the Bubble tea business. Promotions are essential as it attracts as many people as possible to the product (Ajami and Goddard, 2015). Poor promotional strategies always lead to poor reception of the specific product. Promotion is the process that links the customer to the product. As such, it must be done in the best way possible to ensure that the products which a company makes reach the customer within the required time. Most of the people that filled in the questionnaire acknowledged that they have heard of the bubble tea first through advertisements. To a majority of the people, promotions activities such as free tastings of bubble tea and organization of some social activities such as concerts and language exchanges were important promotional avenues. Based on these findings, companies should put the focus on the free tasting and activities offers since these are the areas that interest the clients most.

From the research, it was found out that a significant number of people did not know about the existence of Bubble tea. This means that there is a need to engage in various promotional strategies to ensure that Bubble tea is made popular among the people. Besides, the promotion will ensure that bubble tea business will attract a range of people from various places and this will ultimately increase its profitability. The researcher found out that there is an area that is being neglected a lot in the promotional strategy. This is the social media platform. In the current world, social media has gained a wide usage and organizations should make it a priority when it comes to the advertising of products. Statistics reveal that about 4.2 billion people around the globe use mobile phones. Out of these, around 4 billion have access to the internet and social media platforms. Young people are the major users of social media and they use them on a daily basis. As such, many business experts advise that if one is not in any social media platform, then it might become very hard for them to advertise their products. For this reason, it is necessary that the Bubble tea business embrace this opportunity and consider social media as a major promotional avenue.

CHAPTER 5: DISCUSSION AND ANALYSIS

The Bubble tea business in the UK is thriving and increasing at a very high rate. Many companies are turning to it due to the increased number of customers in the UK. The success of Bubble tea business has majorly been impacted by the lifestyle of the English people. The English people are fun loving and like to spend time with their loved ones when they are free. This kind of lifestyle offers a conducive environment for the bubble tea business to thrive. Bubble tea business is easy to make since it is not based on any sophisticated technology. It is just a simple beverage which has been added a little bubble of fruity flavors and tapioca. The only bit that requires a little technology is in the making of those little bubbles.

The quality of the tea is dependent on the quality of the bubbles. The quality of the bubbles is determined by the quality of the ingredients that have been used. This is the reason why many companies are testing various ingredients day by day to make the appropriate bubbles. The status of Bubble tea business is increasing day by day. More and more people are coming to accept Bubble tea as an alternative beverage. This is made possible by the increased promotional activities by companies. These promotional activities have been helpful in linking the products to the buyers.

Although the number of people who reported to have interest in Bubble tea remains higher than that of the people who do not know about it, there is a great need to get as more people as possible to like Bubble tea. This is one of the ways that will ensure that the profitability of Bubble tea goes up. At the moment, many people have not yet known the importance of Bubble tea. These people can be made to know more about Bubble coffee by engaging vibrant promotional activities. To do this, companies only need to work out on their promotional tactics and get as many people on board as possible.

CHAPTER 6: CONCLUSIONS AND RECOMMENDATIONS

6.1 Summary of Findings

From this research paper, it is evident that the Bubble tea business has great potential in the UK. The prevailing market environment, the market size and the purchasing power of the customers offer a great environment for the Bubble tea business to thrive. The use of primary research was rather essential in this study as it provided a real case of the status of Bubble tea business in the UK. Besides, the primary research helped the researcher to gather essential information for the completion of this study. One essential part of any form of business if the marketing strategy that the business uses. The marketing mix evaluated in this study was essential as it relied on the information gathered from potential customers. As mentioned, customers are an essential part of any business. They can determine either its fall or progress. The researcher made use of a marketing mix to be able to collect data and analysis to be able to develop a proper analysis.

The main information obtained from the primary research and secondary research confirmed that the UK is a nation that offers a great environment for a business to succeed. The information obtained found that the people of UK are outgoing people, love listening to music, love to enjoy themselves and love attending to social events and social institutions such as hotels, restaurants and entertainment joints. Due to this reason, the business of Bubble tea is booming and has great potential to grow further in the UK.

Bubble tea offers something that is both fresh and refreshing.  Besides, it has some essential medicinal values and gives added value to young people. People also have the tendency of sharing their happy moments with their friends and celebrating them using tea.

Bubble tea is a business that is gaining popularity in the modern market. Having been started in the 1990s, in Taiwan, the business has flourished in various other parts of the world such as the UK and the US. In the UK, Bubble tea business has hit the market with a renewed zeal. At its invention, Bubble eta was regarded as a street food which was made with powdered milk. This was so because means of refrigerating the food were not readily available. Very few people had refrigerators that they could use to store food. With time, Bubble tea shops began to travel far and wide as many people started accepting it as a satiable drink.

In the UK especially London, Bubble tea is consumed a lot as a beverage and it contains tea as the basic component. Besides tea, it also has some chewy tapioca balls. In some places, Bubble tea is known as the pearl milk tea, boba juice, boba tea or bubble milk tea (Hahn and Doganaksoy, 2008). The Bubble tea market in the UK is driven by cost-effective price as well as health benefits which are associated with bubble tea. Even with this, there is the addition of artificial preservatives which are mean to make the tea last for a longer time. Besides, additions such as color, sugar and new flavors are added to the tea to make it compete favorably with the carbonated drinks. Besides, the addition of such ingredients offer opportunities for market expansion.

Basing on the ingredients used, the global bubble tea market is classified into various categories based on the color of the tea. There is the back tea, white tea, oolong tea, and green tea. In the UK, the green bubble tea segment is regarded as the most lucrative and accounts for close to a one-third share of the global bubble tea. This percentage is expected to rise significantly since the demand for green bubble tea is on the rise (Meyers and Gerstman, 2005). The reasons why green bubble tea is on the high demand is that it is attributed to various health benefits such as the prevention of cardiovascular diseases, prevention of cancer, reduction of cholesterol, weight loss, reduced risk of type 2 diabetes and improved metabolism. Besides, green bubble tea is known to control Parkinson’s and Alzheimer’s diseases.

The global bubble tea market is also categorized based on its flavor. Based on this classification, bubble tea is classified into the original flavor, chocolate flavor, coffee flavor, and fruit flavor among others. Among these, it is the fruit flavor that has the highest potential to grow. This is driven by the fact that it appeals to the highest number of consumers, there is diversity in fruit flavor and it has a higher nutritional value when compared to other flavors. A consumer may dictate the kind of fruit flavor that pleases him or her and get it.

Bubble tea is also categorized based on the component. As regards the component, bubble tea may be divided into flavor, creamer, sweetener, liquid, pearls, and tapioca among others. The liquid component is regarded as one of the types of tea that are expected to dominate the bubble tea market. The liquid competent is liked by many consumers since the liquid is the base for tea. Many people would prefer taking liquid tea instead of tea in any other form.

Some Bubble tea is made by mixing various ingredients. One of these types is the Matcha Milk Tea. This kind of bubble tea is made by combining almond milk and honey instead of using the sweetener. Besides, some extra tapioca and chia seeds may be added. The tapioca pearls are preferred by many people and they provide a chewy texture which is neither too soft nor too hard. The use of chia seeds offers an extra texture while the honey that is used as an ingredient offers a delightfully subtle feeling. This kind of tea requires expertise to make it since it if it is not made well, it may taste a bit chalky. In the UK, the UK franchise was founded by Eric Khaw. In the inception days, Khaw stated that he wanted to offer the “finest quality drinks and desserts.” The menu offers a variety of things such as blended ice desserts as well as smoothies (Jolly, 2008). The various forms of flavors offered are those that belong to classic fruits such as Lychee, mango and other exotic flavors such as Rose Guanying and Yakult. The benefit of having such a wide menu is that the consumer is able to select from the variety in an easy manner. Besides, it is possible for a consumer to request for a cocktail of various fruit flavors which it is possible to make them.

6.2 Recommendations

Based on this study, there are some important details that have emerged concerning the profitability of Bubble tea in the UK. The study has found out that the Bubble tea business in the UK is growing at a very high rate and has the potential to grow even more in the future. Every new day comes with new customers of rubble tea. As such, companies dealing in the production of Bubble tea need to utilize this huge customer base to their advantage. The lifestyle of the UK has enabled many customers to like Bubble tea. Following the findings of this study, the researcher recommends various issues as follows.

Companies dealing in the production of Bubble tea need to focus on the atmosphere of tea in the UK. They need to increase their customer base by focusing on some other neglected areas such as the universities and colleges. These institutions provide a huge customer base which if it is well utilized will end up profiting the company. The companies can set up some sheds inside the institution or even outside the institutions to ensure that learners are served with Bubble tea at their convenience. Besides, they should aim to provide packed Bubble tea which the learners can carry as they go to their classes and the library. Bubble tea refreshes the mind and many learners would want to have it beside them as they revise in the library. For the cafes set outside the university, it is important that the owners install free Wi-Fi which the learners can use as they sip their tea. Learners are fond of the internet and they will only be comfortable in a place where they are guaranteed of their happiness. One way of guaranteeing this happiness is by offering them free Wi-Fi.

This study also recommends that companies involved in the production of Bubble tea use social media as a marketing platform. In current times, the use of social media has hit very high levels. More and more people are opening social media accounts day by day. The young people have reached a level that they are referred to as social media “addicts” due to the amount of time that they spend in those accounts. A good company is supposed to be where the customers are. It should not be the work of the customers to follow the company but the company to go in search of the customers. As such, companies involved in the production of Bubble tea need to focus on social media advertising since this is bound to increase their sales. Some of the major social media platforms that people are using today include Facebook, Twitter, Instagram, and Snapchat. The ease of access to social media has been facilitated by the increased usage of smartphones among the youth. Companies can also use these social media platforms to launch and promote the Bubble tea factory.

The other recommendation is that companies involved in the making of Bubble tea need to understand the behavior of the English people and utilize the opportunity provided. In the UK, weekends are usually considered as fun days and families move out to enjoy themselves. Besides, most of the offices and jobs are not opened on Saturdays and Sundays. People spend their time relaxing and enjoying with their family members. This provides a good opportunity where companies can launch an event on Saturdays for people to come and enjoy themselves. Such a platform could be very beneficial to the sale of Bubble tea.

 

Appendices

QuestionnaireTop of Form

Bubble Tea

* Required

Identity

Are you a male or a female? *

Male

Female

How old are you? *

Choose

Socio-profesional category

Choose

Which country are you from? *

Choose

Knowledge

Do you know what bubble tea is? *

Yes

No

If drinking bubble tea, would you be interested in knowing the origin of the product/ingredients?

Yes

No

Consumption

How often do you drink bubble tea?

Everyday

Once a week

Few times a month

Occasionally

Never

When do you usually drink it?

In the morning

After work

For dessert

At night

Other

What flavour do you prefer?

Coconut

Almond

Vanilla

Mocha

Papaya

Mango

Passionfruit

Strawberry

Apple

Ginger

Peach

Honey

Milk Tea

Fruit Tea

Milk Tea

Fruit Tea

What is the most important thing for you?

Packaging

Taste

Quality

Diversity of the offer

Originality

Price

Other

Do you usually elaborate it yourself or go to a shop to have it?

Home-made

Cafeteria/bubble tea shop

Restaurant

Supermarket

Extra value

What kind of activities attract you more?

Concerts

Language exchange

Board games / table games

Craft workshops

Other:

What kind of promotion appeals more to you?

Traditional advertising (TV, Newspapers)

Free tastings

Marketing campaigns on the streets

Big range of activities offered

Vouchers

Other:

In a cafe, what is the most important thing for you?

Product

Atmosphere (interior design, music…)

Staff/customer service

Location

Other:

Bottom of Form

 

Consent Form

A Research on the Profitability of Bubble Tea Business in the UK

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