QQ Milk Tea: Keeping Up With Its Competitors

A Marketing Plan

Presented to

Faculty of the Department of Business Administration

School of Business and Economics

University of San Carlos

In Partial Fulfillment

of the Requirements for the Course

Marketing Management (BA 104)

MW 6:00 – 7:30 PM

Submitted by:

Bagul, Raizah L.

Balunan, Lierah Mae A.

Florita, Eve Benjielyn V.

Pitogo, Bella Blanca L.

Sy, Samantha B.

Vargas, Philip

April 15, 2019

 Oral Defense Rating Form
Marketing Management (BA104)
May 10, 2019

Title of the Study : QQ Milk Tea: Keeping Up With Its Competitors

Proponent/Group Memebers : Bagul, Raizah L.

Balunan, Lierah Mae A.
Florita, Eve Benjielyn V.
Pitogo, Bella Blanca L.
Sy, Samantha B.
Vargas, Philip

Instructions: Based on the criteria below, rate the group using the following scale:
0 None 1.1 – 2.0 Satisfactory
1.0 Poor 2.1 – 3.0 Good

Rated by: Score Interpretation

0 – 30 Fall
Name: 31 – 40 Conditional; major
revisions required
Signature: 41 – 50 Satisfactory
51 – 60 Good
Date:

Comments:
 ENDORSEMENT

This Marketing Plan entitled QQ MILK TEA: KEEPING UP WITH ITS COMPETITORS

in partial fulfillment of the course Marketing Management (BA104) has been examined and

approved for FINAL SUBMISSION.

ALICIA LINCUNA VILLAR, Ph.D. Ed

Adviser, BA 104

Time:
 ACKNOWLEDGEMENT

I consider that our present sufferings are not worth comparing with the glory that

will be revealed in us.

Romans 8:18

We would like to express our gratitude to everyone who supported us throughout the marketing

research. We are thankful for their aspiring guidance, invaluably constructive criticism and friendly

advice during the paper works. We are sincerely grateful to them for sharing their truthful and

illuminating views on a number of issues related to the research.

First and foremost, thanks to the God, the Almighty, for showering blessings throughout the

marketing research and giving us enough strength and teamwork to complete our research. We would like

to thank our professor, Mrs. Alicia L. Villar, for the valuable guidance and advice. She inspired us greatly

to work hard on this research. Thank you to the employees of the QQ milk tea for giving their time to help

us and answer our questions throughout the research. Without them, we would face many difficulties

while doing this.

 EXECUTIVE SUMMARY

QQ Milktea has been involved in food and beverage industry for almost 5 yrs. It is your

usual milk tea store that you can find in malls, downtown part of the city and university belts.

The company is owned by a corporation composed of 4 young professionals. QQ Milktea offers

a varied menu of affordable meals/snacks that go with their authentic-taiwanese-flavored milk

tea. Since the company is located in a area where there is a cluster of colleges and universities,

their target maket is mostly composed of university students. The company aims to provide

customer quality milk tea and comfort food that would exceed their expectations making them

one of the top milk tea stores in the country.

The company has several challenges: the company doesn't have a varied and wide

market. Also the company is struggling to work at its full capacity since they aren't generating

enough income for them to afford growth opportunities. The researchers felt the need to make a

marketing plan formulated to identify which strategy the company should pursue in order for

them to improve their generation of income and sustain their existence in the long-term without

compromising the quality of its services. As the researchers determine how best to enlarge the

company's operations, they will consider expanding the business as defined in our strategy.
 TABLE OF CONTENTS

Title Page

Oral Defense Rubric

Endorsement Sheet

Acknowledgement

Executive Summary

Table of Contents

List of Tables

List of Figures

CHAPTER

1 OVERVIEW OF THE BUSINESS VENTURE 1

1.1 Introduction 1

1.1.1 Vision 1

1.1.2 Mission 1

1.1.3 Goals 2

1.1.4 Objectives 2

1.1.5 Review of Business Environment 2

External Environment 2

Internal Environment 3

Competitive Advantage 3

Competition 3

2 INDUSTRY ANALYSIS 4

2.1 Industry Profile 4

2.2 Classification 4
 2.3 Size 5

2.4 Competition 5

2.5 Key Success Factor (SWOT Analysis) 6

2.6 External Factor Analysis 8

PEST Analysis 8

2.6.1 Political Factor 8

2.6.2 Economic Factor 9

2.6.3 Social Factor 9

2.6.4 Technological Factor 9

2.7 Competitor’s Analysis 10

2.7.1 Existing Competitors 10

Political Factor (SWOT Analysis) 12

Economical Factor (SWOT Analysis) 13

Social Factor (SWOT Analysis) 14

Technological Factor (SWOT Analysis) 15

2.7.2 Potential Competitors 16

3 MARKETING PLAN 17

3.1 Marketing Strategies and Programs 17

3.1.1 Market Segmentation 17

3.1.2 Target Market 18

3.1.3 Positioning 19

3.2 Marketing Mix Decision 20

3.2.1 Product 20
 3.2.2 Price 21

3.2.3 Distribution Channel 22

3.2.4 Integrated Marketing Communication 23

3.3 Sales Forecast 23

3.3.1 Sales Projection in Units and Pesos (bottom-up approach) 24

4 SUMMARY, CONCLUSION, AND RECOMMENDATION 25

4.1 Summary 25

4.2 Conclusion 26

4.3 Recommendation 27

BIBLIOGRAPHY 28

APPENDICIES 29

A. Documentation 29

B. Research Instrument 30

C. Curriculum Vitae 31
 LIST OF TABLES

TABLE PAGE
1 Direct Competitors 10
2 Indirect Competitors 11
3 Potential Competitors 16
4 Sales Forecast 24
 LIST OF FIGURES

FIGURES PAGE

KEY FACTORS ANALYSIS

1 6
(SWOT ANALYSIS)

2 Political Factor 12
3 Economic Factor 13
4 Social Factor 14
5 Technological Factor 15

Hierarchy of Class Income

6 18

7 Hierarchy of Age 18
8 Organizational Chart 22
 Chapter 1

OVERVIEW OF THE BUSINESS VENTURE

1.1 Introduction

The QQ Milk Tea is a full service restaurant/cafe located at P. Del Rosario Street Cebu

City in front of University of San Carlos. The restaurant cafe features simple menu with a

friendly prices. They serve delicious food and milk tea influenced by Taiwanese taste. QQ Milk

Tea is a strong milk tea shop which aims to provide customers with quality products at

reasonable and friendly prices for their target market. The company targets students and young

professionals, especially students of University of San Carlos. As a newcomer in the milk tea

market, QQ seeks to come up with products that will be distinct from other competitors, a

product that will provide satisfaction, quality taste and new variety of milk tea. The company

presents their milk tea with different add-ons (ex. pearls) that you can add on your drink to taste

beyond the milk tea flavor that is a craze among the younger generation.

1.1.1 VISION

To create the best tasting milk tea and be the milk tea of choice, giving people a great tea

experience one cup at a time.

1.1.2 MISSION

The researchers aim to provide customer quality milk tea and comfort food that would

exceed their expectations making us one of the top milk tea stores in the country.

1
1.1.3 Goal

The company’s goal is to bring milk tea experience closer to home and be the town’s

choice for the satisfaction of milk tea cravings.

1.1.4 Objectives

1.1.4.1 To operate a successful café with enough number of employees

1.1.4.2 To increase profitability year by year of operations

1.1.4.3 To obtain a minimum of 50 regular customers a day

1.1.4.4 Maintain an average gross margin of forty (40) percent.

1.1.5 REVIEW OF BUSINESS ENVIRONMENT

1.1.5.1 EXTERNAL ENVIRONMENT

QQ Milk tea has an advantage because of its locations which is near big Universities and

Colleges. The university students are the primary customers of the establishment. However due

to inflation, there is an increase in the prices of their raw materials which caused their products’

prices to increase. The other competitors nearby offers the same product with a higher price

however it has a good ambiance that can catch the attention of the students. Nowadays the new

generation are more into nice ambiances than the quality of the products and the services being

offered.

2
1.1.5.2 INTERNAL ENVIRONMENT

The company has 2 regular employees and 3 part-time employees. Regular employees

have fixed salaries while part-time employees are paid based on their hours of work. Though

lacking in personnel, they are able to provide quality service and products. QQ's workers are also

quite friendly. As for their products, they are affordable which fits the budget of students of the

nearby school, University of San Carlos. However, the ambiance and interior design is not that

appealing to millennials. With regard to the company's accounting system, they rely only on

manual recording and computation as QQ is a small company.

1.1.5.3 COMPETITION

QQ Milk tea has a lot of competitors since milk tea has become a trend in the current

generation that is why a number of businessmen nowadays engage themselves into this kind of

business. Most of these milk tea establishments are within the same area where QQ is located

and it adds more pressure to the company in terms of competition. Gentlemen Café is one

competitor that stands out and is the number one competitor of the company. The competitor is

an already established milk tea shop that sells a variety of comfort food and milk tea and has a

good ambiance. But QQ’s strategic location gives them an edge over their competitor which is

being situated right across the University of San Carlos.

1.1.5.4 COMPETITIVE ADVANTAGE

QQ Milk tea offers different milk tea variations. The blend and preparation process

makes the product unique. The prices of its milk teas are much cheaper compared to other

competitors. The business embraces innovation since they were able to market their products

through an application called Grab Food, where customers can easily access their products.

3
 Chapter 2

INDUSTRY ANALYSIS

2.1 Industry Profile

The QQ Milk tea Café sells affordable milk teas and offers a variety of both dine-out and

dine-in food selections. It is located in Geronilla Building, Pantaleon Del Rosario Street, Cebu

City just across the University of San Carlos. Their main customers are students from USC and

some from other neighbouring schools like CNU, UC, ACT and Velez College. They are open

from Mondays to Sundays from 10:00 a.m. to 9:00 p.m. They offer free Wi-Fi and an air

conditioned room.

The café is meant to be casual, the kind of place that you can go to with a bunch of

friends or simply enjoy some me-time. No one is expecting Michelin standards but what people

really want is a place that they can go back regularly for a quick meal and comforting taste that

they are familiar with without breaking the bank. QQ Milk tea Café has shown that having the

right mix of calm and commotion in an environment can boost creativity.

2.2 Classification

The QQ Milk tea Café is a restaucafé and service and product business. They have the

combination of a casual, comfortable setting with affordable and tasty food.

4
2.3 Size

The QQ Milk tea Café is a corporation; it is a small-medium enterprise (SME) composed

of two regular employees and two to three part-time working employees. The corporation was

initially formed in 2013 by a Taiwanese businessman but due to the lack of marketing expertise,

the café was then acquired by a group of Industrial Engineering students back in 2016.

2.4 Competition

There is a strong competition in the milk tea industry around the university area, as the

milk tea has been a trendy beverage for most young people. Some of its direct competitors

include Oppa Café, Cong Café, San Jose Bakeshop, and Gentlemen Café. Their indirect

competitors are Jollibee, Starbucks, McDonalds, and other establishments inside Elizabeth Mall

and Metro Supermall.

5
2.5 KEY FACTORS ANALYSIS (SWOT ANALYSIS)
STRENGTHS
1. Location
- Good accessibility for the
students since the establishment
is within the university belt (near
University of San Carlos, Cebu
Normal University, University of
Cebu, etc).
2. Products are price-friendly
- Affordability is present since the
primary target market are
students.
3. Quality of Products
- Products have authentic and
palatable taste.
4. Quality of Service
- The staffs have a high
responsiveness to customer
satisfaction.
OPPORTUNITIES
1. Location and Target Market
- More chances of them to make
their business better to achieve
their goal which is to gain more
profit.
2. Regularization of part-time
employees
- They can have stable employees
so that there will be an effective
segregation of tasks.
3. Quantity of Products
- They may take a chance to
improve the quantity of product
so that the customers will be
more enticed to visit and buy
their goods.
Figure 1
WEAKNESSES
1. Lack of Manpower
- As the customers go exceptionally
large, the orders may not be
accommodated in time.
2. Interior Design and Ambiance
- The absence of unique and
attractive environment can
dishearten potential customers to
go and purchase their products.
3. Traditional System of Operating
- Manual system is used for their
operations and accounting (e.g. no
cash register or computer desktop
for storage of cash and files) which
may create loopholes with regards
to internal control.
THREATS
1. Sanitation and Hygiene
- Lack of strict compliance on their
cleanliness may cause certain health
conditions to arise.
2. Poor Internal Control (e.g. Separation of
Duties)
- No proper dissemination of tasks
which may arise to possible
problems such as employees may
be exposed to temptation to do
fraud or theft
3. Lack of Security
- As the location is prone to
unforeseen happenings specifically
theft, it will be more advantage that
they could have security guard,
emergency exit, and the like.
6
Analysis:

S1 VS W1: They have a good location so it is accessible for the customers, but as the

customers increase they cannot serve them because of the lack of employees. The researchers

recommend that they should hire more employees to cater to the demands of the customers.

S2 VS W2: As their interior design and ambiance is not that great, they make sure that

their product is of great quality and affordable. Though customers are satisfied with the product

it’s better to make their place nice as well to attract customers not just for their product but also

for their place.

S3 VS W3: Though they lack of employees, they give high quality service for their

customers. However they have been using the manual system for operating and accounting

which could be the cause of loss of money and etc., the researchers recommend that they should

revert to using the cash register for the safety of their cash and the computer for monitoring of

inventory and etc.

O1 VS T1: As their place is accessible they can have more customers as days go by, but

due to their location it is in the highway all the smoke, dust and etc. is circulating around, with

no proper sanitation or ventilation customers health is at stake as well as theirs. The researchers

recommend that they should put some air purifier for the place.

7
 O2 VS T2: Due to no separation of task employees might be tempted to do something

bad, they should regularized their part time employees, for the betterment of them and the

business.

O3 VS T2: As they improve their product into making it more have quality and quantity

aspects, customers will pour in and business will boom; the unforeseen event may occur such as

theft, or something fire will broke out, with them lack of security they cannot somehow not ready

for these. The researchers recommend for them to take an orientation for safety and install some

fire extinguisher or have some emergency exit if so.

2.6 External Factor Analysis

PEST Analysis

PEST is an acronym for Political, Economic, Social and Technical. It is used to assess

these four external factors in relation to the business station. This analysis helps the business

determine how these factors will affect the business performance and activities.

2.6.1 Political Factor

In this factor, government regulations such as the city’s strict compliance with the

business permits, tax papers and other certificates adds the complication since it requires a

lengthy process. Another issue addressed is the implementation of the TRAIN Law; ever since

such law has been enacted, the QQ Milk tea Café has incurred larger costs and operating

expenses.

8
2.6.2 Economic Factor

The economic factor also plays a vital role in the effect of the business’s sales and

operations. The stability of the economy can be perceived through the disposable incomes of

consumers as to how they decide on their money spending. With this, it can be concluded that

the purchasing power, ability, and willingness to buy (demand) has a great impact on the

business.

2.6.3 Social Factor

With the social factor of college students within the area, QQ Milk tea Café can analyse

the socio-economic environment of its market via elements like customer demographics, cultural

limitations, lifestyle, attitude, and preferences. Another important factor would be the availability

of a Wi-Fi since most students seek the connection to the internet as a striking characteristic in a

coffee shop. The café manager has also added that the incident that happened last 2015 in Manila

wherein two people has been poisoned and died due to the intake of milk tea has greatly declined

their sales.

2.6.4 Technological Factor

The company has incorporated with the application GrabFood in delivering their products

to online consumers; this has affected their sales positively since most of the people nowadays

purchase and transact through the web. The QQ Milk tea Café established a price-friendly image

in the GrabFood environment, having to be the milk tea café that offers the cheapest price; this

gave a positive impact of their product introduction into the online marketplace.

9
 2.7 COMPETITOR’S ANALYSIS

2.7.1 Existing Competitors (DIRECT AND INDIRECT)

Table 1 DIRECT COMPETITORS

Contact
Name of Business Products Address Business Started
Number

Bubble tea,
Junquera St.,
1. Oppa Café ramen, shakes, 2015 09234729947
Cebu City
and snacks

2. San Jose Bubble tea, bread, P. del Rosario,

2018 n/a
Bakeshop and coffee Cebu City

Bubble tea,
Junqeura St.,
3. Cong Café ramen, and 2016 32415962
Cebu City
shakes

Natalio B.
Bubble tea,
Bacalso Ave,
ramen, coffee,
4. Gentlemen Café Cebu City, n/a n/a
waffles, and
Cebu
French fries

10
 Table 2 INDIRECT COMPETITORS

Contact
Name of Business Products Address Business Started
Number

Rice meals and Junqeura St.,

1. Silogan ni Gian 2013 09433790426
drinks Cebu City

Rice meals,
Pelaez St., Cebu
2. Jollibee desserts, French 1978 09171318000
City
fries, and burgers

Colon, Cebu
3. Starbucks Coffee, pastries, 1971
City

11
POLITICAL FACTOR

STRENGTH SOLUTION WEAKNESS

QQ Milk tea strugles to
Despite the It is recommended comply for the
increase in prices for QQ Milk tea to requirements for the
hire someone who application of business
of staple permit due to a more stern
ingredients as a could execute policy imposed by the
result the business incumbent city mayor,
applications for Tommy Osmeña. The
implementation of company only has 2
TRAIN Law, QQ them so as not to permanent employees, it
Milk tea remained burden their only would cost them a
significant amonut of
to have the most 2 employees who time in dealing with those
affrodable are busy catering applications. Their
to customers' competitors have a
products compared needs. designated person for the
to its competitors. execution of those
business application.

OPPORTUNITIES SOLUTION THREATS

Because of QQ should try to As a
government's efforts maintain the consequence of
in boosting the
country's tourism prices of their the TRAIN Law
through the products as implementation,
branding campaign much as customers may
program " It's More possible to still opt not to buy
Fun in the be able to entice QQ's products as
Philippines," more cutomers to they would
tourists visit the
country, making purchase from prefer to use
them a potential them. their disposable
target market of QQ income on
Milk tea and its essential goods.
competitors.

Figure 2

12
ECONOMIC FACTOR

STRENGTH SOLUTION WEAKNESS

Cariolinian QQ must invest Cariolinians are

in advertising, only a small
students, which may it be through fraction of the
are their usual social media or population of
customers, any other means, potential customers
mostly came to attract earning within the area. A
from a family professionals and significant amount
households to of that figure
with a stable to consists of earning
good financial purchase their
products. professionals and
status. households which
they weren't able
to attract.

OPPORTUNITIES SOLUTION THREATS

It is necessary for The increased
Tourism's QQ to increase inflation rate can
contribution to their prices prompt potential
Philippine economy because of the
stood at 12.2% of customers to
increased spend their
the country's gross inflation rate,
domestic product they should strive disposable
(GDP) in 2017, up to mak it minimal income on
from the previous essential goods
year's 10.7% which by minimizing
their cost so as to instead of on
means a wider
potential target still be able to non-essential
market for QQ make customers goods like milk
purchase from tea.
them.

Figure 3

13
SOCIAL FACTOR

STRENGTH SOLUTION
WEAKNESS
Price of the products are The business must
conducive to the lifestyle market its current Market share is
of its major customers area to other
which are students. Due customers aside
not broad as it
to its price, the business from USC students. only well
has an edge compared to
its other competitors.
The solution can be known to USC
achieved by students or
Loyal customers will approaching schools
continue to order from to open a stand students within
them; evidenced by
customers who are
inside its premises its area.
currently working during special
professionals continuing occasions (e.g.
to purchase despite founding
graduating. The business anniversary of
was able to strengthen its school, intramurals,
position within their etc.)
lifestyle.

OPPORTUNITIES SOLUTION THREATS

The business has The business The market share of the
an untapped business may decrease if
should attempt to competitors strengthen
market share in carefully develop its social position via
students from and create their lowering price or
product that increasing awareness of
other schools. their products.
Since the business would signify that
it is safe to eat so Another threat the
is not well business is facing, an
known, these that customers do incident that a business
potential not veer to from the same milk tea
indirect poisoned a customer.
customers veer to competitors – The phenomenon led to
more known competitors that
a decline in sales, the
customers veering
businesses do not sell milk instead to other
instead. tea but rice meals businesses that were not
offering milk tea.
instead.

Figure 4

14
TECHNOLOGICAL FACTOR

STRENGTH SOLUTION WEAKNESS

The area of the business
The business should has weak signal wherein
The business has move to an area that customers have difficulty
Wi-Fi available for has a strong signal to contacting others. The
be able to give weakness may trigger the
its customers thus customers to flock to the
being able to have customers the competitors of the
convenience. business as it may be
an edge compared more comfortable to have
to other a meeting place where
competitors that The business should contact is easy.
lack the install a database or The business does not use
POS for their a database or technology
technological transactions to in recording their
advancement. record them safely. transactions and instead
uses manual recording;
which may result to a loss
in their sales and
information regarding
how their business is
doing.

OPPORTUNITIES SOLUTION THREATS

The business has The business The competitors of
should install an the business, namely
the opportunity to Cong Café and
expand its use of entertainment set
Gentlemen, are
technology to be up to amuse equipped with both
more serviceable customers. television and a
to its customers by sound-system to
setting up more amuse their
customers. The
charging stations, customers may veer
stronger Wi-Fi, to the mentioned
and a television or businesses instead as
sound-system to it is more
entertain entertaining to them.
customers.

Figure 5

15
 2.7.2 POTENTIAL COMPETITORS

Canteens within the school premises and San Jose Bakeshop’s recent offered of milk tea.

Table 3

Business Contact
Name of Business Products Address
Started Number

2. San Jose Bubble tea, bread, P. del Rosario,

2018 n/a
Bakeshop and coffee Cebu City

16
 Chapter 3

MARKETING PLAN

3.1 Marketing Strategies and Programs

QQ Milk Tea is currently relying on word of mouth to increase awareness of its products.

Recently, the business joined GrabFood to expand its current market share to customers aside

from students within the vicinity of the business. Furthermore, the business is relying on the

student friendly price of its products and present location of the business to acquire and keep its

customers. Currently, the business is not into advertising via billboards, posters, nor

sponsorships; its marketing strategies are limited.

3.1.1 Market Segmentation

The company has divided the market into three two segments based on: age of consumers

and class income of consumers.

The age of the market is divided into four: teens, young adults, adults, and senior. Teens

being 13 to 19 years old, Young Adults being 20 to 29 years old, Adults being 30 to 49 years old,

and Seniors being 49 to 80 years old.

The class income of the consumers is divided into low, middle, and high income. Class

income of the consumers is divided into PHP 0 to 15,000 per month, PHP 15,001 to 29,999, and

PHP 30,000 above for low, middle, and high respectively.

17
 Class
Income

Low Middle High

Figure 6 Hierarchy of Class Income

Age

Young
Adolescents Adults Seniors
Adults

Figure 7 Hierarchy of Age

3.1.2 Target Market

The company aims to target itself onto the low and middle income segments by offering

affordable products that are relatively cheaper compared to other businesses whose core products

are milk tea. The company aims to penetrate the lifestyle of the two segments by pricing their

products at a relatively low price so continuous patronage of the business would not hurt their

income.

In regards to the age segment, adolescents and young adults will be targeted. Since

among students and young adults milk tea has been a trend that has lasted for a couple of years

and isn’t something new. In fact, the product has been a staple drink among their age group.

18
 The researchers will be marketing the specific age group by presenting to them a place

where they can catch up with their friends amidst the hustle of school or work. Furthermore,

playing trendy music and a flexible environment that can cater to studying customers and

relaxing customers.

3.1.3 Positioning

The company positions itself as a place where their customers can wind down from a

long day of school work, catch up with friends, or get some work done. Simply, it is a company

that cares for its customers.

The company plans to position the business as such that when “milk tea” is said QQ Milk

tea will be immediately thought of as the number one place to go for its target markets. Through

this positioning, customers will approach the business first before others. The phenomenon can

be achieved through consistently offering a wide variety of foods that customers can easily

choose from at a cheaper price compared to its competitors.

In order for the company to sustain its competitive advantage, it should be present in the

minds of the customers as a food that can be eaten for lunch, snacks, or dinner. As to lunch and

dinner, the company offers silog meals that can be eaten together with the milk tea. As to snacks,

the company offers egg rolls and ramen.

The company aims to brand itself as a business that is easily accessible and affordable

given its near distance from schools and its student-friendly priced products.

19
3.2 Marketing Mix Decision

3.2.1 Product

QQ Milk tea Café offers an authentic Taiwanese flavour of milk tea and affordable meals

to its customers; the establishment makes sure to serve delectable and palatable food and

beverages. Such products the customer offers are ready-to-eat meals like silog, egg rolls, pancit

canton and the like. With its milk tea line, the café serves only one basic drink which is their

authentic Taiwanese milk tea along with add-ons which the customers can freely choose their

own preferences. The choices for the add-ons are black pearl, coffee jelly, egg pudding, etc.

The market entry and growth strategies of the café in terms of marketing their products

are on a conservative and not so strong level. They basically rely on the advantage of their

location wherein the students of different universities are their major market. The entity should

rather not limit its scope of customers but rather think outside the box and enhance their growth

strategy such as marketing and brand management. One of the marketing programs the café has

also implemented is a stamp card wherein a customer collects a number of stamps (signatures) in

order to obtain a free drink after acquiring all of the stamps required. This program of theirs has

long been running already and not many of the customers even know about it. The said stamp

card program is not highly effective since most of their staff do not market or promote to their

customers the existence of this stamp card.

20
3.2.2 Pricing Strategies

The business should offer affordable products given its target markets are low income,

middle income consumers, adolescents, and young adults.

The strategy can be accomplished by starting their milk tea products at an affordable

price PHP 65 and adding PHP 15 for every add-on at the choice of the customer: egg pudding,

wintermelon syrup, black pearls, and etc. In line with that, the business should offer another milk

tea flavor from their regular; recommended milk tea flavors being almond and taro. The

premium flavors should start at a slightly higher price of PHP 80; the increase in price is counter

acted as the flavor is different from their regular and a new flavor.

The company will also offer product bundle pricings. An example would be the bundle of

banana muffin and hot tea – is bought separately it would be higher but since it is bought

together as a bundle it is cheaper. To illustrate better, the company will offer combo-style

products consisting of a milk tea and ramen for PHP 150 which is cheaper compared to buying

the two products separately for PHP 65 and PHP 95.

As to segmented pricing, senior citizens are also offered discount when buying the

products.

Lastly, the company gives discounts to loyal customers. The business offers a loyalty

card at a minimum price and for every milk tea the customer earns one star and for every

corresponding twelve stars earned there is a free product whether drink or food.

21
3.2.3 Distribution Channels

To begin, QQ Milk uses direct marketing channel since it has no intermediary

participants. QQ Milk Tea sells their product directly to their customers. However in 2018, the

owner of QQ had a new endeavor on its distribution. QQ is now coordinating with Grab Food, a

mobile application, which customers can order online and what they have ordered will be

delivered to the delivery address with only a PHP 15.00 charge.

Suppliers

QQ Milk Tea

Online Orders Direct from the

store
Grab Food Customers

(Mobile App)

Customers
Cust

Figure 8 Organizational Chart

22
3.2.4 Integrated Marketing Communication

Since QQ Milk tea is small in terms of company size, they only employ a simple

communication system internally and externally. When it comes to internal communication such

as decision making, the parties mainly involved are the owners and the results are then

communicated to the employees once an agreement has been reached. Decisions pertaining to

pricing, budgeting, changing a supplier, coming up with a new marketing strategy, and the like

are agreed upon only by the stockholders. However, they only seldom hold meetings because of

their busy schedules so oftentimes it is only the employee in charge who makes decisions which

will then be approved by the owners.

One promotion tool the company uses for marketing is through social media where they

post their menu and announcements. Although this is simple, they still have a hard time

executing it because it is only the owner who manages the social media accounts and when he

gets busy, no one can update them.

3.3 Sales Forecast

The researchers of this study have conducted an interview with Miss Cherryl Gabasa, the

store manager of QQ Milk tea Café. With the said interview, the researchers have gathered some

important data as to how the café copes up with the demands of the customers and its variation or

seasonality.

The researchers have found out that on Tuesdays and Thursdays, the café has its highest

number of cups being sold (50-60 cups per day) through the week while on Mondays,

23
Wednesdays and Fridays, the café sells on an average level of 40-45 cups per day. On weekends,

30-35 cups per day are only being sold. The sales projections are based on the information

gathered:

Having the information of the number of cups sold per month, the researchers have

managed to do another forecast for the following year’s demand (in number of cups).

3.3.1 Sales Projection in Units and Pesos (bottom-up approach)

Table 4 Sales Forecast

PERIOD MONTH DEMAND FORECAST

1 January 1456 #N/A

2 February 960 1456
3 March 1300 1108.8
4 April 1208 1242.64
5 May 1292 1218.39
6 June 820 1269.92
7 July 793 954.98
8 August 987 841.59
9 September 1163 943.38
10 October 1035 1097.11
11 November 675 1053.63
12 December 568 788.59
13 January 634.18

24
 Chapter 4

SUMMARY, CONCLUSION, AND RECOMMENDATION

4.1 Summary

QQ Milktea has been involved in food and beverage industry for almost 5 yrs. It is your

usual milk tea store that you can find in malls, downtown part of the city and university belts.

The company is owned by a corporation composed of 4 young professionals. QQ Milktea offers

a varied menu of affordable meals/snacks that go with their authentic-taiwanese-flavored milk

tea. Since the company is located in a area where there is a cluster of colleges and universities,

their target maket is mostly composed of university students. The company aims to provide

customer quality milk tea and comfort food that would exceed their expectations making them

one of the top milk tea stores in the country.

The company has several challenges: the company doesn't have a varied and wide

market. Also the company is struggling to work at its full capacity since they aren't generating

enough income for them to afford growth opportunities. The researchers felt the need to make a

marketing plan formulated to identify which strategy the company should pursue in order for

them to improve their generation of income and sustain their existence in the long-term without

compromising the quality of its services. As the researchers determine how best to enlarge the

company's operations, they will consider expanding the business as defined in our strategy.

25
4.2 Conclusion

QQ Milk Tea is a good example of a company that is able to sustain its business for six

years due to an affordable and enjoyable milk tea and convenient location. The business is

relatively cheaper compared to its competitors while the location of the business is in the vicinity

of different schools. The core strength of the business lies in its ability to be a welcoming venue

for the surrounding students to unwind, catch up, and study due to the two previously mentioned

characteristics.

However, QQ Milk Tea still has the ability to drastically improve its marketing and

operations. The business is currently lacking in awareness from students relatively distant from

the venue. Furthermore, QQ Milk Tea is lacking in using technology as leverage for its

operations since its transactions are currently manual. Lastly, the business lacks product

diversification and product development of their milk tea as it only offers one regular milk tea

flavor, which is a weak point since the product is their main selling point.

The marketing strategy of QQ Milk Tea is mainly relying on word of mouth and recently

joining GrabFood as means to increase public awareness of its products. The business also relies

heavily on the affordability and palatable taste of its products to acquire and maintain customer

loyalty.

The business is currently enduring and surviving despite experiencing a change of

ownership and a drastic decrease in market share due to one year where there was no influx of

students during Kto12. However, the business still has plenty of room to improve its faults. QQ

Milk Tea may still refine and enhance itself from a surviving business to a thriving enterprise.

26
4.3 Recommendation

First of all, since QQ Milk tea is within the radius of the nearby universities, the target

market is mostly students. Therefore, it is recommended that the café should use a great variety

of targeted promotional tools. For example, the media selection could include internet, outdoors

personal selling and word of mouth. The researchers highly recommend that the café should

invest in advertising as this helps market their products and attract not just university students

but also earning professionals and households to purchase from them. As it is currently a

growing small-medium enterprise, the company does not have ample budget to fund huge

advertising means (i.e. television and/or radio advertisements and commercials). Since the

internet is an easy, free and less costly medium, so the café’s greatest advertising choice would

be through social media.

Also, it is mentioned under the SWOT analysis as the entity’s weakness that they struggle

to comply certain requirements for the application of such business permits due to the strict

implementation policy by the current government; with this, it is highly recommended by the

researchers that the company shall hire someone to actually process and execute the

requirements of these business application permits so that it will not be a burden for the

employees already since currently there are only 2 employees who work regularly in the café.

Another weakness of the company would be their manual recording system as this can give rise

to certain problems in terms of weak internal control; with this; the researchers also recommend

for the company to have a proper database and maybe install a POS (point of sale) for an

appropriate recording of their daily transactions.

27
BIBLIOGRAPHY

https://yourbusiness.azcentral.com/add-recommendation-companys-marketing-plan-29218.html.

Kenya Lucas, n.d.

https://www.cleverism.com/product-four-ps-marketing-mix/. Martin, August 6, 2014

https://www.ukessays.com/essays/marketing/bubble-tea-the-marketing-plan-marketing-

essay.php?fbclid=IwAR3inKFxbw4kAifmNCUnHGizlSjbslFQQi8MYNb43e9RayxV_zSgxPzZ-

rY. UK Essays, May 12, 2016

http://www.expo2015.org/magazine/en/economy/the-challenges-of-the-tea-industry--

environmental-and-social-sustainability-.html. Stefano Carnazzi, November 26, 2014

https://www.trekksoft.com/en/blog/65-travel-tourism-statistics-for-2019?fbclid=IwAR0TiZk-

BRoh3H7aj4lRphGNOImseSb2KTRMNtazc3IIX901BOoHOrZyQU4. Stephanie Kutschera,

July 4, 2018

https://ceopedia.org. Economic Factors Affesting Business, June 1, 2012

https://www.marketingtutor.net/economic-factors-affect-business-environment. Umar Farooq,

December 1, 2015

https://www.inc.com/guides/2010/06/defining-your-target-market.html. Mandy Porta. January

12, 2012

https://www.marketing91.com/positioning-strategies. Hiteshi Bhasin. August 25, 2018

28
APPENDICIES

A. Documentation

29
B. Research Instrument

B1. Survey/Questionnaire

B2. Technological Devices

Mobile Phones

Laptops

30
C. Curriculum Vitae

Personal Information

Name: Raizah L. Bagul

Date of Birth: May 19, 1998

Address: Homewise, Pelaez St., Cebu City

Contact Number: 09177177122

E-mail address: braizah@rocketmail.com

Educational Background

Primary Education: Corpus Christi School

2005 – 2011

Secondary Education: Corpus Christi School

2011 – 2015

Tertiary Education: Xavier University – Ateneo de Cagayan

2015-2016

University of San Carlos – Downtown Campus

2016 – present

31
Personal Information

Name: Lierah Mae A. Balunan

Date of Birth: May 11, 1999

Address: Canduman, Mandaue City

Contact Number: 0956-144-3094

Email Address: lierahbalunan@yahoo.com

Educational Background:

Primary Education: Tetuan Central School

2005-2011

Secondary Education: Zamboanga City High School

2011-2015

Tertiary Education: Ateneo de Zamboanga University

2015-2016

University of San Carlos

2016-present

32
Personal Information

Name: Eve Benjielyn V. Florita

Date of Birth: June 1, 1996

Address: 091Provincial Road, South Poblacion, City of Naga, Cebu

Contact Number: 0945-381-6603

E-mail address: floritaevebenjielyn@gmail.com

Educational Background

Primary Education: Buenavista Elemntary School

2003-2009

Secondary Education: Maximino Noel Memorial National High School

2009-2013

Tertiary Education: University of San Carlos – Downtown Campus

2016 – present

33
Personal Information

Name: Bella Blanca L. Pitogo

Date of Birth: November 19, 1997

Address: Brgy. Don Felipe Larrazabal, Ormoc City, Leyte

Contact Number: 0945-144-0649

Email Address: pbellablanca@gmail.com

Educational Background:

Primary Education: Ormoc City Christian Academy

2004-2010

Secondary Education: New Ormoc City National High School

2010-2014

Tertiary Education: Western Leyte College

2014-2016

University of San Carlos

2016-present

34
Personal Information

Name: Samantha B. Sy

Date of Birth: October 28, 1997

Address: 235 Pelaez Street, San Antonio, Cebu City

Contact Number: 0917-645-7815

Email Address: sysamantha97@gmail.com

Educational Background:

Primary Education: Kong Hua School

2004-2010

Secondary Education: Kong Hua School

2010-2014

Tertiary Education: Xavier University – Ateneo de Cagayan

2014-2016

University of San Carlos

2016-present

35
Personal Information

Name: Philip Nerre Vargas

Date of Birth: May 27, 1997

Address: 163 Villa Zacate Basak Pardo, Cebu City

Contact Number: 0956-147-3964

Email Address: philipnerrevargas@gmail.com

Educational Background:

Primary Education: Mayor A.S Fortuna Memorial Elementary School

2005-2011

Secondary Education: Tipolo National High School

2011-2015

Tertiary Education: University of San Carlos

2016-present

36