Fall 2018 C.

Stone MARK 201

Sample Case Study – DAVIDsTEA

Figure 1. DAVIDsTEA logo.

DAVIDsTEA (see Figure 1) has put a fresh, North American twist on tea. The company opened
its first store in Toronto in 2008 and has since expanded its colourful and modern shops to many
bustling neighbourhoods and busy shopping streets across Canada and the United States (see
Figures 2-3). The strategy is simple: delight customers with great-tasting teas and exceptional
customer service. “It seems like a basic idea, but there wasn’t anyone else that was doing it at the
time,” explains owner David Segal.
Tea is largely made from the leaves of the Camellia sinensis (or “tea plant”) that grows in
specific tropical climates in East Asia. The leaves are refined through a process of oxidation to
achieve different varieties of tea, such as black, green, and oolong. DAVIDsTEA takes these
plain teas and mixes them with a variety of flavourants to produce unique blends. The result is
exclusive tea blends such as ‘Read My Lips’, a delicious chocolate mint dessert tea, and ‘Movie
Night’, a combination of apple pieces, maple, and popcorn. With more than 150 blends available,
including several organic, kosher, and Fair Trade certified options, DAVIDsTEA has built a
loyal following. “Our customers come in to sample our teas and talk to our staff – they feel like
they’ve travelled around the world without even leaving the store,” says Segal. DAVIDsTEA
makes tea fun and accessible. According to Segal, “Tea has a stereotype for being a bit
[boring]… either highly British or Asian. If one of our customers hasn’t tried loose-leaf tea
before, we take them by the hand and show them how easy it is.” The company’s value
proposition is working, as tea sales are soaring. It appears the trend is going to continue, as
Canadians’ tea consumption is expected to rise more than 70% by 2020.
DAVIDsTEA primarily sells loose-leaf tea for customers to brew at home, but also
prepares both hot and iced tea in-store for customers on-the-go (see Figures 4-5). Over time,
DAVIDsTEA has expanded its product mix to include a line of innovative tea accessories
designed in-house, from spoons and infusers to tea sets and travel mugs, as a way to help ensure
customers are able to make the best cup of tea possible (see Figure 6). Popular accessories are
often bundled with best-selling teas to create pre-packaged gift sets, perfect for long-time
DAVIDsTEA fans and tea newcomers alike (Figure 7). While basic tea products (loose-leaf and
on-the-go) are available at prices comparable to competitors, accessories and gift sets are often
priced slightly higher, but feature unique and distinctive packaging and design. In addition to
their physical stores, all DAVIDsTEA products are available on their website, where they can be
shipped within Canada (Figure 8). Additionally, DAVIDsTEA has recently signed a deal to have
select pre-packaged teas sold on shelves at some grocery stores in Canada, including Provigo
stores in Montreal.

Case study adapted in part from THINK Marketing (2nd Edition) by K. Tuckwell and M. Jaffey. Altered
and reproduced solely for non-commercial use in a learning environment.
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Figure 2. A DAVIDsTEA storefront in Montreal.

Figure 3. The interior of a DAVIDsTEA shop, with its selection of teas on display, sorted by
type.

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Figure 4. Loose-leaf tea is packaged in pouches and tins Figure 5. Drinks are also prepared in-store for
for customers to take home. customers who are on-the-go.

Figure 6. A selection of DAVIDsTEA tea accessories. Figure 7. An example of a DAVIDsTEA holiday

gift set.

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Figure 8. DAVIDsTEA’s website (Canada – English).