[This article has been written in Singapore context]
The Bubble Tea Story
The rise and fall of the bubble tea story is one of the best case studies we ever heard in Singapore’s business history. It is so closely related to us. I can still remember that time (just a decade ago) when a cup of bubble tea can cost about $3.50. Many business owners started to open up bubble tea shops in as many location as they can find. It seemed like a very lucrative, “sure-win” business to go in. Some business owners even did extreme marketing methods such as employing young bikini clad models to “attract” male customers walking by. The bubble tea business boomed to a point of over-saturation and many of the bubble tea shop owners started to compete in pricing wars; consumers were able to get bubble tea for as low as $1.20 or less.
The price war reduced the average profit margin. Many shop owners during that time delivered bubble tea as a commodity rather than as a brand. There is not much brand differentiation to create that unique reason for the consumers to buy bubble tea from a particular shop. Bubble tea is just bubble tea to most consumers.
This leads to a decline for the local bubble tea industry in the early 2000s. From here, we can learn a very important lesson that is not to “sell down” your product by waging a price war against your competitors; price or any sales gimmicks and discounts are no longer the primary factors that move consumers’ behaviour today. Consumers today are looking for something else other than just the price. They are looking for intangible factors such as your product quality, the buying experience, your customer service as well as your brand image. People are willing to pay good money for premium products and services that give good premium image and satisfied customer experience.
In the late 2000s, the bubble tea industry has made a major comeback by introducing many cool bubble tea brands today such as Each A Cup, Gong Cha, KOI Café, and ShareTea. Each of these unique bubble tea shops has its unique branding image with its own selection of bubble tea flavours that are different from one another. New brands are becoming more health conscious where consumers are able to select the amount of sugar level for their drinks. These great bubble tea brands don’t just market themselves based on low prices, they also introduce a different kind of trend and lifestyle to the young consumers market. This approach leads to better profit margins and therefore better brand sustainability in the long run.
Changing Consumer Trend
The music retail industry has started to decline due to the rise of internet songs downloading; over the past few months and years, we have witnessed the fall of various renowned retailer brands such as Tower Records, Sembawang Music as well as Gramaphone.
Change is something that is not easily managed especially for the large companies but it is something inevitable and important. Competition is always constant and consumer behaviour is always changing. So, it is always good to move with the consumer trend even if you are the market leader so that your brand will not be left out. Just like when the era of mobile phones ended with the introduction of smart phone by Apple iPhone, Samsung is fast to react with its Android smartphone collaboration with Google, in order to capture the new market share.
Can Good Old Brands be Revived?
Do you still remember drinking the smooth and sweet Root Beer Float while munching the signature curly fries at A&W Restaurant? Or shopping in the supermarkets of YAOHAN and Carrefour? Or having a sumptuous salad buffet at Ponderosa in Marina Square? Or queuing up for one of the tastiest donuts in Singapore outside the Raffles City outlet of The Donut Factory? These brands bring back many fond memories to many of us. Hence, if they were to make a comeback, I believe consumers in Singapore will be able to accept it again with open arms.
So when people asked me whether a brand of the past can be revived again, I would usually give them the answer ‘yes’; provided they are willing to change quickly with the consumers as well as the willingness to create a clear direction in terms of marketing and branding.
Three Steps in Making a Comeback:
1. Re-invent your branding and marketing strategy to cater for today’s consumer demands and needs.
2. Take advantage of new marketing and branding media platforms such as internet and social media.
3. Maintain a healthy profit margin; never engage in a price war.
Business failures and closure of operations do not mean that it is the end of the world for the business. We can always make a comeback. All businesses have the potential to grow and become better than before. Just like the saying goes, “When the going gets tough, the tough gets going.”