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Case study – ‘Classmate Xiaoming”

BUSINESS REPORT PPT – Timesaver Template Classmate Xiaoming Tea

 Objectives of the case study 2

• To determine the reasons underpinning the success of the Classmate

Xiaoming tea which is focused on teens and young adults
• To identify the key success measures of Classmate Xiaoming tea in the
Chinese market
• To define what companies can learn from the success of Classmate
Xiaoming tea

Classmate Xiaoming Tea

 Reasons underpinning success of the 3

• The product
Chinese Ready to Drink (RTD) tea market was a saturated one when the
Classmate Xiaoming was introduced in the market. This product was targeted
toward younger population born after 1995.
• When the product was launched the population of China was around 1.37 billion
with the age group of 15-19 around 78.09 million and age group 10-14 around
73.98 million (2015). Based on the data from China tea marketing Association
more than 500 million people consume tea related beverages in China and the
major percentage of new converts are young people.
• The product was designed in the name of Xiaoming a Character found in their
text books and well connected with the Chinese youth.
• The 4 P’s explains how the product or service was offered
Product:
• The company launched their product using cold brewed technology. The
company Identified a potential gap which was not seen by other players and
offered their product targeting Classmate
the youth who were born after 1995.
Xiaoming Tea
 Reasons underpinning success of the 4

• The product
product was launched in four flavors namely lemon, red tea, green tea, and jasmine.
The cap of the bottle takes the person back to childhood as it can be used as a toy. The
company primarily focused to design and name the product in a unique way.
• This product refreshes the memories of the Chinese youth childhood and comes with a
catchy name, differentiated packaging, and tasty recipes.
Price:
• The price of the product started from $0.75 and from the data provided by Nielsen the
sales of the overall tea drinks showed Y-O-Y growth of 10.9% in first half of 2016
compared to 2015 first half. This effect in sales is due to the competitive pricing of the
product.
Promotion:
The company advertised its product through digital channels with viral clips and memes
that replicate the character of Xiaoming . The company had spent on various marketing
programs such as sponsoring campus events, placements in dramas, and films for
promoting the product. Classmate Xiaoming Tea
 Reasons underpinning success of the 5

• The product
company for the launch of their product Liuliuda Tea in 2016 designed an Ad
campaign named as Totally Awesome.
Place:
• The product is present both in online and offline stores. The primary sales channel
chosen by Uni-President were convenience stores and supermarkets in first-tier and
second-tier cities. The sales figures for the RTD segment were increased by around 4%
in 2016 after the introduction of Xiaoming.
Competition:
• Uni-President was ranked second after Master Kong in terms of market share in the
beverages segment. After the launch of Classmate Xiaoming Uni-President faced stiff
competition from Nongfu Spring which launched a similar product line named as Tea Pai
with different flavours such as peach oolong, citrus green tea and lemon black tea and
reported a huge boost in their sales figure during 2016.

Classmate Xiaoming Tea

 Key Success Measures of the product 6

• Uni-President launched the classmate Xiaoming for improving their market share in a
saturated ready to drink tea market.
• Based on the Nielsen’s data the ready to drink tea products with price greater than
$0.75 gained higher sales during the period 2015 and 2016.
• Uni-President achieved success in achieving higher sales and market share with in the
first half of 2016 as there was a revenue growth of 10.9% with 5.3 points increase in
market share for this period. The market share of Uni-President beverage products for
2015 and 2016 were 24.8% and 27.8% respectively.
• A growing customer base is a major factor which would be the immediate reflection of
the fact that company’s product is reaching the target audience. A good review of an
existing customer would bring a new referral and also a repeat purchase from the
existing customer.
• The factors such as new packaging, competitive pricing and the connectivity with the
name of product were the main reasons boosting the sales of this product
Classmate Xiaoming Tea
 Key Success Measures of the product 7

• Classmate Xiaoming in a short period generated sales of around $851.16 Million during
2016 with a growth rate of 1.5% .
• The increasing demand for the cold brewed teas and the huge success of Classmate
Xiaoming made the company to launch a variant Liuliuda Tea with a lactic acid flavour
in 2016 and designed an AD campaign named as Totally Awesome to interact with the
customers.

Classmate Xiaoming Tea

 Key takeaways to be taken from the success of 8

classmate
• To understand the consumer trends in the market and design a product which suits and
attracts them. This point helps in generating higher revenues with an improved market
share.
Consumer Trends in the Chinese Ready to Drink (RTD) Tea Market
The cold brew segment in the Chinese RTD market was far from
saturation during 2015-16 and was a market with high growth potential.
The consumer perception towards RTD is changing as they are
considering it as an alternative to the normal brewed tea.
Product innovation can be considered as major restraining factor in this market.
• To Possess production bases with technologically advanced equipment and to make
strategic partnership with OEM’s for increasing the production efficiency.
• To set an effective pricing strategy which helps in bringing new customers also
retaining the existing ones.

Classmate Xiaoming Tea

 Key takeaways to be taken from the success of 9

• To classmate
select a suitable sales channel and a proper advertising campaign. For instance,
with the promotion from Zhejiang Satellite TV and iQIYI and by a few celebrities the
product Classmate Xiaoming became very popular among their target group.
• To differentiate the product
Uni-President launched their product specific to a niche segment (Chinese Youth)
and attracted the customers by giving the product a name which is highly familiar
for the Chinese youth from their childhood.

Classmate Xiaoming Tea