The Next Strategic Move for Twining’s Singapore

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Evidence of Current Trendsetters

Twining’s has a wide variety of exquisite tea products. However, most of these tea products are very much mainstream. Products like our classic black tea and fruit tea are diverse but already offered by most other competitors. Novelty can distinguish Twining’s from its competitors. The “Teapuccinos” example from Hamilton (2011) is an illustration of how novel combinations can intrigue tea drinkers. People are attracted to their blends because they are unique.

Some may argue that including more flavors is the key to exploring possibilities, but I believe the only form of novelty that is sustainable in the long run is one that comes from combination.

Potential Issues

With every novel product, there is always the issue of uncertainty in consumers and adverse reactions to change. People do their own cost/benefit analysis and when costs outweigh the benefits, they refrain from purchasing our products. It increases costs, confusion and risk perception (Im, 2015). This may cause the products we produce to not attract the purchases we project to have and may lead to higher sunk costs in innovation.

However, there are utilitarian products and hedonic products. Fine tea-drinking culture falls within the hedonic consumption market where there is a feeling or sensation to drinking tea, comprising aroma and taste. Studies have shown that a luxury brand name can also raise the hedonic value of the product (Hagtvedt, 2009). For Twining’s, our strong brand name can invoke a higher hedonic potential. This minimizes the risks involved as customers are more focused on the psychological benefits of excitement and delight when it comes to valuating products at hedonic value (Im, 2015). To add on, Twining’s has a well-established brand name, fostering the extra consumer trust. Without all these barriers, is evident that the above backlash of novelty is minimal to Twining’s as our target market is on the higher-end in which our consumers purchase our goods based on feeling. Hence, the trend of customization is Twining’s first stepping-stone towards capturing the new bulk of customers.

User-led personalization to retain customers

In addition to the Twining’s own effort to customize its products, personalization creates a platform for the formation of a product-consumer emotional bond and enhances our innovation process, leading to consumer retention, which is crucial in our goal to achieve brand loyalty towards Twining’s.

Emotional bond with the product

When we induce personalization into our products, there is an emotional connection when the user becomes part of the innovation process (Mugge, 2009). Coupled with the fact that consumers are increasingly willing to go after products with emotional benefits (Hagtvedt, 2009), personalization has become crucial Twining’s products. The consumer feels a psychological attachment to Twining’s and that retains our customers in the short run. The reason why we have to shift our efforts towards creating an emotional bond is because perceived product value is no longer based on raw quality (Lee, 2014). According to Lee, a products value is no longer solely determined purely by its capabilities, but instead the perceived feelings and attitudes that come with the product usage. Furthermore, such a strategy is akin to Twining’s company vision to indulge your every mood and taste (Twining’s Singapore, 2014). What this means to Twining’s is that the pursuit for customer retention has now become heavily dependent on customization at the user end.

User-led innovation

User-led innovation can help to retain customers because it can provide a firmer grasp of the consumer demand and can then meet the wants of our customer. Companies are increasingly using ideas from consumers to drive their product innovation because it is most accurate and reflective of the market demand as compared to surveys and other forms of market research (Schreier, 2012). Other than statistical accuracy, there is also potential for quality as the user population is much more vast and filled with brilliant individuals (Mugger, 2009). As a pioneer in the tea industry, we can only observe success elsewhere. One example would be the healthcare industry where, patient-led innovation of products led to an increase in their quality of provision (McNichol, 2012). They realize, that when customers have a say in their product design, there is greater innovation.

Our end goal in mind is to distinguish Twining’s from its competitors via innovation. Given that, it is recommended to harness the power of the consumer in our product formation in order to be more efficient is making better products and retaining customers.

Potential Issues

There is a prevalent concern that the personalization of products will increase costs for Twining’s. It is because personalization requires an extensive product component variety for consumers to choose from. The cost of formulating the relevant product synthesis technologies and options for the consumer will also pose great hurdles in expenditure to ensure our brand name does not suffer.

However, the ability of Twining’s to upsell and cross sell will be present if it engages in personalization strategies (Euro monitor, 2008). Twining’s brand direction also enables us to up-sell based on our high quality brand name. The increased profit margins can be used to fund concurrent innovations and research.

The long-term benefits of such a leap outweigh the costs of personalization. It makes the option for personalization every bit worthwhile to retain all our customers.

Recommendation

Platform for recommendation: Setting up an outlet selling tea

Twining’s should set up its own tea outlet. Preferably, we aim to launch the flagship store at up-market locations like Marina Bay Sands to attract consumers with slightly above average purchasing power. The products will be priced along with local competitors like TWG.

Recommendation: Sale of specialty beverages that the consumers can customize themselves.

Twining’s is recommended to create more specialty beverages through customization and allow customers to mix different tealeaves on the spot for a personal concoction. The company can also include membership card to record customer preferences.

Stakeholder Analysis