This document is a marketing plan for David's Tea, a Canadian tea retailer with over 100 stores. It outlines the company's mission, goals, strengths, customer base, competitors, and proposed marketing strategies. David's Tea aims to provide high quality loose-leaf teas and exceptional customer service in a fun atmosphere. Their strengths include a strong brand, unique tea blends, frequent new product releases, knowledgeable staff, and customization options. The plan analyzes competitors like Starbucks and Tim Hortons and proposes strategies for products, pricing, promotion, and distribution to continue David's Tea's expansion.

1. MKTG 1102 – Essentials of Marketing
David’s Tea – Marketing Plan
Created by:
Anna Sawyer, Kyle Buyers, Timothy Brown,
Christie Cao, and Gary Xiao
Fall, 2012

2. Table of Contents
Executive Summary....................................................................................................................................... 3
Company Description .................................................................................................................................... 3
Strategic Focus and Plan ............................................................................................................................... 4
Mission ...................................................................................................................................................... 4
Overall Company Goals ............................................................................................................................. 4
Objectives ................................................................................................................................................. 4
Competencies and Sustainable Advantages ................................................................................................. 4
Advantages................................................................................................................................................ 4
Sustainable Advantages ............................................................................................................................ 4
Situation Analysis .......................................................................................................................................... 4
SWOT Analysis........................................................................................................................................... 5
Industry Analysis ....................................................................................................................................... 6
Customer Analysis of David’s Tea ............................................................................................................. 6
Competitor Analysis .................................................................................................................................. 7
Competitive analysis – Starbucks.......................................................................................................... 7
Competitive analysis – Tim Horton’s .................................................................................................... 8
Others ................................................................................................................................................... 8
Market-Product Focus .................................................................................................................................. 8
Marketing and Product Objectives: .......................................................................................................... 8
Target Markets:......................................................................................................................................... 9
Points of Difference: ............................................................................................................................. 9
Positioning: ............................................................................................................................................... 9
Marketing Program ....................................................................................................................................... 9
Product Strategy ....................................................................................................................................... 9
Price Strategy .......................................................................................................................................... 10
Promotion Strategy ................................................................................................................................. 10
Place/Distribution Strategy ..................................................................................................................... 11
Financial Data and Projections.................................................................................................................... 11
Past Sales Revenues ................................................................................................................................ 11
Five- Year Projections ............................................................................................................................. 11
Organization................................................................................................................................................ 12
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3. Implementation .......................................................................................................................................... 12
Product Strategy ..................................................................................................................................... 12
Price Strategy .......................................................................................................................................... 12
Promotion Strategy ................................................................................................................................. 12
Place/Distribution Strategy ..................................................................................................................... 13
Evaluation and Control ............................................................................................................................... 13
Bibliography ................................................................................................................................................ 14
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4. EXECUTIVE SUMMARY
The following plan outlines the suggested marketing strategy and tactics for David’s Tea, a high quality
loose-leaf tea provider that has aggressively expanded since its creation in 2008. David’s Tea has over a
hundred stores located across Canada and the United States, and is continuing to expand the company
in terms of locations and diversities of tea. For potential and current customers, David’s Tea targets the
young, hip urbanites, traditional and non-traditional tea drinkers, baby boomers and the health
conscious, offering a healthy and trendy drink. David’s Tea has several distinguishing features including
a strong brand, their unique blends, frequently released new flavors, the quality of the tea imported
from around the world, high product customization for customers, and excellent customer service by
knowledgeable and expert staff. The North American tea market is expanding steadily mainly due to
health awareness and the benefits that tea provides, which creators of David’s Tea have capitalized on.
Their expansion and growth has primarily been from strong customer relationship management and
brand loyalty, experienced management, strong financial backing, and a high demand for quality hot
beverages. Four years and over 100 stores after their start, David’s Tea is established and financially
strong, and in need of a solid marketing plan to continue their explosive growth.
COMPANY DESCRIPTION
A young and aspiring entrepreneur, David Segal, was only in his twenties when he became the owner
and creator of David’s Tea. He would visit tea shops and wonder why he could not find a quality cup of
tea anywhere. He quoted, “I felt there was a void in which we could deliver a fun, fashionable and
accessible tea experience on the main streets and in high traffic malls,” Segal says (Bury, 2011). David
and his cousin and business partner, Herschel Segal, who started the company Le Chateau, began the
company in 2008 in Montreal, Quebec and opened their first store in Toronto. Together they wanted to
establish a new twist on tea and make it a fun and fashionable culture (Laird, 2012). Today David’s Tea
has grown into a national retail chain and e-commerce company with over 100 stores across North
America (David’s Tea, 2012).
David’s Tea is known for their unique and customary tea blends. The company went on a world search in
source of quality loose leaf teas, and used them to create exclusive blends which are their primary
products. They offer over 120 types of loose leaf tea that make up their permanent collection as well as
seasonal blends (David’s Tea, 2012). The company strives at introducing a new product or tea into the
store every two weeks, keeping them in the loop of the mature growth stage of the market. The
company is also an eco-friendly tea store providing organics, recyclable packaging and other sustainable
practices (David’s Tea, 2012).
David’s Tea is a company that primarily concentrates on the relationship building between customers
and their employees, offering a tailored experience and exceptional service. This plan describes how
David’s Tea has positioned itself as a leading tea provider and how they plan to compete for market
share for tea beverages in Canada.
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5. STRATEGIC FOCUS AND PLAN
Mission
Great tea, friendly stores, and above-and-beyond customer service (David’s Tea, 2012).
Overall Company Goals
1. To become the number one tea retail experience in North America.
2. To promote healthy living by drinking quality loose-leaf tea.
3. Continue expansion into the US market.
Objectives
1. Have a David’s Tea in each of Canada’s 100 most affluent communities
2. Have the largest share of the North American loose-leaf tea market by end of 2013
3. Open a David’s Tea in each North American metropolitan area where consumers spend greater
than $1,500 per year on coffee/tea per person
4. Expand into 20 new neighborhoods in the US & Canada by end of 2013 that have an ethnic
majority focused on a tea-based culture
5. Have each location generating a profit within 1 year of its open
6. Sponsor and publish at least 3 peer-reviewed medical studies on the benefits of drinking tea per
year
COMPETENCIES AND SUSTAINABLE ADVANTAGES
Advantages
The employees at David’s Tea demonstrate high expertise and customer service. Combined with the
unique company's quality loose-leaf tea this differentiates them from their competition. One of the
company’s growth strategies is customer relationship management, tailoring each service to their
customers and providing a quality experience. Another advantage is Co-founder Hershel Segal has had
success in entrepreneurship prior to the establishment of David’s Tea, creating the retail store Le
Chateau (Bury, 2011). This creates a heavy advantage for David’s Tea in terms of experience and
financial backing.
Sustainable Advantages
David’s Tea consistently researches and releases new blends frequently, a strong sustainable advantage
that makes them leaders in the tea market. Strong branding is another sustainable advantage that is
continuously progressing and will continue to do so.
SITUATION ANALYSIS
David’s Tea has expanded since its opening in 2008. In 2010, the chain went from 8 to 40 locations
across the country. In 2011, 25 more opened, and 2012 was a big year for David’s Tea with explosive
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6. growth (Budak, 2011). Growth in the company can be compared to the fact that tea has been one of the
fastest growing menu items in Canada. A recent Agriculture Canada Food study predicted that by 2020
tea consumption will grow to 40% (Budak, 2011). One contributing factor to this prediction is the aging
baby boomer generation. This generation is concerned with their health and will soon be retiring,
staying at home drinking tea. The many health benefits of tea has helped to drive consumption among
baby boomer and among younger generations. Furthermore the increasing population of Asian and
Middle Eastern immigrants into Canada has contributed greatly to the consumption of tea, because tea
is a cultural staple (Budak, 2011).
SWOT Analysis
Location Favourable Unfavourable
of Factor
Internal Strengths Weaknesses
 Experienced management in  Investment in training with
entrepreneurship new employees due to high
 Extensive hiring process of employees turnover of staff
 Tea experts  Strictly tea- no coffee or hot
 Friendly and outgoing staff chocolate
 Offer quality loose leaf tea, diversified  No seating
blends from around the world  Limited budget, high expense
 Offer direct marketing, customizations
of each customer experience
 Online marketing via online purchasing
of products and direct orders
 Brand name has connects with high
quality tea
External Opportunities Threats
 Expand more into the U.S. and Europe  Competition with other hot
 Offer seating within stores beverage companies
 Increasing demand for tea with rising including Starbucks, who is
health concerns now entering the market
 Limited amount of other specialty tea
stores in North America  Future downturn in
economy, less interest in
quality tea
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7. Industry Analysis
The tea industry is currently experiencing growth because consumers are becoming more aware of the
health benefits of drinking tea. In 2008 the tea and coffee represented 1.1% of the total value of sales
of food and beverage goods (The Canadian Tea, 2010). The tea industry has a number of competitors in
the non-alcoholic beverage sector including coffee, soft drinks, energy drinks, milk and dairy beverages,
fruit juices, bottled water, sports drinks, vegetable juices, soya beverages, hot chocolate, and low
alcohol wine coolers and ciders. Below is a pie chart showing the percentage, measured by volume
(hectolitres), of sales of all non-alcoholic beverages in 2008 (The Canadian Tea, 2010).
David and Herschel Segal are tackling the tea industry because it brings people together, all over the
world, and it’s the second-most popular drink on the planet, second only to water. And, quite simply,
because it makes many people happy.
For the past six years, tea has been one of the fastest-growing menu items in Canada, with out-of-home
consumption at 584 million servings over the past year, versus more than 500 million in 2007. Compared
with coffee (more than 1 billion servings per year), tea is not as prevalent, but certainly growing. A
recent Agriculture Canada food-trends study predicted tea consumption will jump 40% by 2020, a rise
attributable to many factors including an aging population (Budak, 2011).
Potential and current customers include young, hip urbanites, traditional and non-traditional tea
drinkers, baby boomers, and the health-conscious.
Customer Analysis of David’s Tea
Hot beverages are a daily routine for the majority of Canadian adults according to the 2008 Beverage
Consumption of Canadian Adults study. This research indicated that at least 64 percent of adults drink
coffee or tea daily (Garriguet, 2008). The number of coffee drinkers is an important consideration to this
marketing plan, as coffee and tea share many of the same benefits (caffeinated, warm,
convenience). This is confirmed in research in the 2005 study Canadian Food Trends for 2020, which
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8. states that the high degree of correlation between tea and coffee consumption indicates that the two
are substitutes for each other (Serecon, 2005).
Percentage who consumed selected beverages the previous day, by age, group, and gender, household population
19 or older, Canada, excluding territories, 2004 (Garriguet, 2008, Table 2).
19 - 30 31-50 51-70 71+
Percentage Men Women Men Women Men Women Men Women
who consumed
beverage (%)
Coffee 40 39 71 64 79 74 75 68
Tea 20 30 27 35 33 47 49 56
The 2008 study revealed that coffee consumption stays relatively equal throughout adulthood for men
and women; whereas tea consumption increases as both men and women age (Garriguet, 2008). This
may be explained in the 2005 study, where it is suggested that this rise in consumer interest is
associated with the growth of consumer interest in health and wellness products (Serecon, 2005).
The 2005 study also indicates that specialty teas do not appear to be price sensitive as they fit into a
luxury good category where they "satisfy the need for 'small indulgences' among a more sophisticated,
and aging population (Serecon, 2005). According to Industry Statistics from the Tea Association of
Canada website, the specialty tea market ($92m )now outpaces the conventional tea market ($89m).
Subsequently, the market growth for specialty teas is huge. According to the 2005 study, the per capita
growth in specialty teas is expected to grow 40% between 2001 and 2020 (Serecon, 2005). An aging
baby-boomer generation and an increased focus drive this growth on health and well-being will drive
the growth of this industry.
The comparable price between coffee and tea indicate that the target market for David’s Tea is fairly
broad across adulthood.
Competitor Analysis
David’s Tea’s competitors mainly includes coffee shops, chains, and other businesses that sell hot
beverages, and retailing businesses that sell accessories such as cups and teapots. As the main products
of David’s Tea are various blends of tea, the major competitors David’s Tea is facing are the fast drink
businesses. Among them, Starbucks and Tim Horton’s are two of the most established.
Competitive analysis – Starbucks
Starbucks has dominated the coffee market for years. It is not only known for creating quality coffee and
service, but also noted for its atmosphere and customer experience. Starbucks brands have obtained
recognition worldwide and possess a strong influence. It blends company and community values by
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9. providing quality coffee and building a common culture and environment in all store locations as well as
headquarters (Gibson, 2009). Moreover, Starbucks has strategic alliances and partnerships to obtain and
sell the highest quality products.
Starbucks has a revenue of $13.3billion and the trend is growing in the past five years. Its net income
has risen dramatically from 315.5 million in 2008 to 1.38 billion in 2012 (Yahoo! Finance, 2012). In spite
of the high growth, the need for coffee is quite different as the month varies (winter is generally their
busy season).
Starbucks poses a significant threat to David’s Tea if it decides to focus on the tea market, which it
apparently is starting to. Last month it acquired competitor Teavana for a whopping $620 million, which
shows its dedication to disrupting the industry (Lutz, 2012). It seems Starbucks is not going to let David’s
Tea expand further into the market without a fight.
Competitive analysis – Tim Horton’s
Tim Horton’s offers a variety of products, most notably its coffee, fresh baked goods and homestyle
soups and sandwiches have been famous in Canada for many years. Tim Horton’s focuses on
environmental leadership as a main value, and markets itself heavily to working middle-class Canadians
(Tim Horton’s, 2010-2012).
Although Tim Horton’s is not making a dramatic rise in its income and revenues recently, its sales and
income maintain a steady growth over the last three years. However, Tim Hortons’ percentage gross
margin has dropped from 2010 to 2012 and the operating expenses have risen at a greater pace than its
revenues (Yahoo! Finance, 2012).
Overall, given their significant penetration in the Canadian market, strong brand, and successful
finances, Tim Horton’s could be a strong contender to David’s Tea if it chose to enter the tea realm.
Others
It is worth noting that there are other competitors to David’s Tea springing up, such as Teaopia. It seems
others who recognize the tea market’s potential and are entering themselves, hoping to experience the
same success David’s Tea has. In the next several years, competition will be fierce.
MARKET-PRODUCT FOCUS
Marketing and Product Objectives:
1. Provide premium tea for all
2. To be recognized as the friendliest and expert tea provider in North America.
3. To promote healthy living by drinking David’s Tea.
4. To make tea sexy and fashion forward.
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10. Target Markets:
Potential and current customers include young, hip urbanites, traditional and non-traditional tea
drinkers, baby boomers, and the health-conscious.
Points of Difference:
David’s Tea has four unique characteristics:
1. Unique blends, new flavors released frequently.
2. Quality loose leaf tea imported from around the world.
3. High product customization that customers appreciate.
4. Excellent customer service by tea-knowledged and expert staff.
Positioning:
MARKETING PROGRAM
Product Strategy
David’s Tea line of products include over a hundred different varieties of teas with varying flavours and
health benefits. The wide variety allows the company to encourage customers to search for their
favourite flavours, and or them to offer customers specific teas for specific situations: a refreshing tea
for a hot day, a calming blend for someone who is stressed out, etc. Compared to coffee shop
competitors who target the caffeine junky or the sweet tooth, this variety allows their stores to have a
much broader appeal to customers throughout the day.
David’s Tea will educate its guests about its products by actively sampling them and by encouraging its
employees to engage customers as they walk into or past the store. While many people enjoy tea, there
are hundreds of different varieties and many people are unaware of the different blends and what they
9

11. taste like or what their health benefits may be. David’s Tea recognizes that by putting their product in
someone’s mouth that they are able to tell new customers the story behind their product, and introduce
returning customers to new flavours. This helps grow the customer base and diminish the effect of
brand fatigue.
David’s Tea is boldly branded teal with an all-caps Logo. This branding is carried through to their take-
away beverage containers. The design is meant to stand out from rival hot beverage companies
(Starbucks – white cup, Tim Horton’s – red cup) and compete against their brand awareness.
David’s Tea has a bright, open, and smart design to each of their stores. The stores want to be easy to
navigate for people who would like to take their tea to go, and comfortable enough for people to sit
down and relax. The company is emphasizing the lightness of tea in the décor and design of its stores.
Price Strategy
The price strategy of David’s Tea can be separated into two different parts: to-go drinks, and bulk tea to
take home.
To-go drinks – The price point of their to-go drinks is equivalent to medium-to-high range coffee
shops at around $2.50 per beverage. In this sense, David’s tea avoids competing on price against rival
beverage companies like Starbucks.
Bulk tea – The pricing of their bulk tea is where David’s tea has a competitive advantage versus
rival hot beverage retailers like Starbucks. At David’s Tea you can get a 50g container of loose tea of
your choice for approximately $6.00 dollars that will make about 25 servings. Whereas a bag of coffee
from Starbucks may cost twice as much for the same number of servings.
Promotion Strategy
David’s Tea uses a variety of different promotional elements to raise awareness of their brand:
Personal Selling – David’s Tea utilizes personal interaction to sample products and to educate its
customers about the teas that it sells. The employees of the company are passionate and educated
about their products and can make recommendations to someone looking for a new flavour. This
employee experience separates David’s Tea from rival hot beverage competitors like Starbucks or Tim
Hortons.
Public Relations – David’s Tea has several articles written about their company and its relatively
quick expansion across Canada and now into the United States. Articles are used to demonstrate that
the company is innovative and experts in the tea business. This is used to build brand credibility and to
distance itself from rival tea shops.
Internet – David’s Tea has an integrated online shop on their website that serves as a tool to
promote their teas, seasonal mixes, and their associated housewares. The company also has a Facebook,
Twitter, and Pinterest page which are used to promote new store locations, new blends, and inform
customers what their ‘Tea of the day”.
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12. Sales Promotion – The website for David’s Tea is promoting a Holiday Gift Guide to promote
their winter seasonal selections. Their bundles of tea offer a significant savings over ordering the
included flavours individually. Additionally, David’s Tea will include three free sample teas for any online
order placed. The online store also has an expanded selection of discontinued and seasonal teas not
available to the retail stores.
Gift Cards – David’s Tea puts a lot of emphasis on gift cards as a gift-giving solution for their
customers. The company knows that they have loyal and passionate customers, and recognize that they
can use this to bring new people into their store to purchase gift cards and also introduce them to the
experience.
Advertising – David’s Tea does essentially no print or media advertising, and instead relies on
word of mouth to promote their products. Subsequently, the interactions and knowledge that their
employees are able to pass on to customers are critical to encouraging word of mouth promotion
Place/Distribution Strategy
David’s Tea stores are primarily located in central shopping areas. In Vancouver they are currently
located in areas such as: Vancouver on West 4th Street and in the Oakridge Center Mall, in Burnaby at
the Brentwood Mall, in West Vancouver at the Park Royal Mall, and in Surrey at Guildford Center. By
selecting these locations they are choosing to be in high traffic areas where they can be conveniently
shopped.
By choosing shopping districts, David’s Tea hopes to encourage customers to buy tea while they are
shopping. The stores are located at these locations are each in areas with heavy foot traffic. These
locations allow the company to actively sample their teas to people passing by and therefore raise the
awareness of their brand.
FINANCIAL DATA AND PROJECTIONS
Past Sales Revenues
David’s Tea is a private company that does not divulge its financial data. However, it does not take an
open ledger to recognize that opening more than 100 stores in the last 4 years is a sure sign of great
success. It is safe to say, given their rapid expansion, that their past sales revenues are quite impressive.
Five- Year Projections
David’s Tea is getting close to saturating the Canadian market, and while they may have room to expand
in 2013, may soon become cramped in 3 or 4 years. In order to continue their rapid growth and revenue
generation, they will need to continue expanding in the US and consider other countries as well. Given
that they are near this tipping point, they may need to evaluate other strategies to continue their solid
profits, such as a more efficient supply chain to lower costs.
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13. ORGANIZATION
David’s Tea is concentrating on making tea fun and fashionable by creating a specific brand and
culture. They have fashioned tea as a healthy and tasty alternative in the hot beverage market,
attracting young customers who are concerned with their future healthy lifestyle and old customers
who are concerned with their current health. Their culture also centers on making the tea experience
great, focusing on more than just unique blends by providing quality service and expertise about their
loose-leaf tea blends from around the world. Overall, their strong brand is best represented by a
cheerful, healthy, and wholesome lifestyle that is relevant to today’s trends and fashions.
IMPLEMENTATION
Product Strategy
 Continue to offer a variety of teas, and have at least 30 regular blends and 5 seasonal blends in
stock for each store
 Hold monthly store meetings to educate each employee on the products and ensure they are
properly trained
 Keep a strong brand throughout the store and make sure every product is placed in a branded
David’s Tea container
 Offer products in a modern retail atmosphere
Price Strategy
David’s Tea is separated into two categories: to-go drinks, and bulk tea for home. Their to-go drinks are
priced equivalent to medium- to high-range coffee shops around $2 to $3 per beverage. Their bulk tea
they are able to price cheaper versus their competitors while still offering a high quality product.
Promotion Strategy
David’s Tea uses a variety of different promotional elements to raise awareness of their brand:
Personal Selling: the company has a fairly thorough recruitment process, as well as ongoing staff
education and training that ensures their employees are excellent personal sellers and representatives
of their brand.
Public Relations: already under the public eye for their rapid growth, David’s Tea will continue to
implement PR campaigns to attract further media attention. Their angles can combine their strong
brand with the rapid expansion of their business to create compelling articles.
Internet & Social Media: David’s Tea already focuses significantly on their online sales, doing a
lot of business and transactions online. They combine this with their social media (Facebook, Twitter,
Pinterest) to listen to customer feedback and constantly improve their product offering. To capitalize on
this, the company should do contests and giveaways for each social network, as well as work with
popular food/drink/tea blogs to improve Internet attention and retention..
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14. Sales Promotion: David’s Tea capitalizes on the seasonal market well, creating blends for spring,
summer, fall, and winter. They do this through a holiday gift guide as well as online. Continuing to offer
online promotions and advertising through their website will help drive revenue and repeat purchases.
Moreover, partnering with other like-minded companies that advertise seasonally (for instance, select
clothing lines) could help increase their sales.
Gift Cards: David’s Tea uses gift cards to encourage their faithful customers to spread the love of
tea and create new ones, bringing fresh faces into the store. This is a great strategy, and this plan
suggests improving it by creating a rewards program for its top customers.
Advertising: David’s Tea uses direct marketing by strongly branding themselves and their
offerings (from cups to tea cans to at-home accessories) with their familiar teal colors. Pairing this with
local/neighborhood advertising, such as posters and print advertisements within 100 meters of their
stores, will create additional sales.
Events: The company holds a significant number of events, mainly tastings of their familiar and
new products. They also supply tea for fundraisers and charity events occasionally. Continuing to do
these on a regular basis is a good start, and supplementing the program with appearing at local events
(such as community festivals) will be a great way to spread awareness of their tea.
Place/Distribution Strategy
Position David’s Tea in main shopping areas and central avenues with heavy foot traffic. Be the only tea-
specific venue within the mall (or street, as it applies). Also be in close vicinity to large corporate
skyscrapers, given that their occupants favor a coffee-break lifestyle and appreciate a higher-quality
beverage that augments their personal image.
EVALUATION AND CONTROL
Marketing managers of David’s Tea are encouraged to re-examine their goals and objectives on
a bi-weekly basis and assess successes and shortcomings. Based on their evaluation results, they are
encouraged to make appropriate changes to drive the company forward. Each Objective in this plan is
SMART, and should be evaluated monthly to see if the company and marketing program is on track to
achieve it.
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15. BIBLIOGRAPHY
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Lutz, Ashley, November 14, 2012. Business Insider.
http://www.businessinsider.com/starbucks-just-acquired-teavana-2012-11
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16. Public information via Yahoo! Finance, retrieved November 23, 2012.
http://ca.finance.yahoo.com/q/is?s=THI&annual
Public information via Yahoo! Finance, retrieved November 23, 2012.
http://finance.yahoo.com/q/is?s=SBUX
Rivka and Sonja's Prezi, Propasal for Company/Brand feature: David’s Tea
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