Owner of koi bubble tea

1.0 Executive Summary

The purpose of this report is to provide a feasibility study for Koi Café in Singapore as a proposal for an entry into Surabaya, Indonesia. Koi Café in Singapore was opened in 2007 as the first overseas branch of a Taiwan’s iconic bubble tea brand from Taipei, Taiwan. Nowadays, Koi has 46 branches globally including in Jakarta, Indonesia. This report will provide the current Surabaya’s environmental analysis and implications for Koi Café from political, economic, cultural, technological, and legal environment sectors. The next parts are SWOT analysis and its implication, marketing objectives, market segmentation, marketing mix strategies such as product, price, place, and promotion that may be utilized by the company, followed by the implementation and evaluation about the marketing mix for the next 12 months and the conclusion in the end of this report. Research for this report are based on credible academic journals, reliable book, some trustworthy and private websites. The depth and breadth of this report is limited to the 25 pages.

The current situations in Surabaya, Indonesia has shown opportunities for Koi Café to open a branch there. This can be seen from the good mayor of Surabaya that makes a stable political situation which benefits Koi Café. Moreover, the situation of economic in Surabaya stands at 7.6%, which shows a higher growth than the National rate. Indonesia has many people residing belonging from various cultures, with a majority of residents belonging from the Islamic Culture and also includes the Hofstede's Culture Dimension table. The technology analysis includes the air flights, Surabaya ports and direct roadways which connects Surabaya and Jakarta. In the Environmental analysis, the temperature of Surabaya is suitable for the customers to consume the Koi Café beverage as well as to grow tea plantations for making the beverage. Legal analysis of Koi Café for Surabaya include the tax rate for foreign companies and the legal system of Indonesia.

Koi Café plays the strength in being a demand product, customisation of drinks, and being halal. The weaknesses include the obligation on collaborating the ownership with local companies in order to venture into the domestic market. The opportunities exhibits the population of potential customers in Surabaya and favourable weather that complements with the product. On the other hand, the threats for Koi Café include a higher tax rate for foreign companies and indirect competitors in Indonesia.

Koi Café’s marketing objectives is to achieve 20% of market share, $850,000 of profits, and 75% of brand awareness by 31 December 2018. The main target market are students and young adults start from 12 years old to 35 years old.

Standardization on the brand name could reduce the advertising cost and exhibits a positive image of Koi Café as a global brand. Elastic product such as Koi Café should not make the price higher than other competitors. Market pricing is suggested to be used along with cost-plus pricing to achieve the profit objective. In the future, relationship pricing can be implemented to bring down the price. International joint ventures with local private limited liability company is needed for international brand to venture into Indonesia. As the main target market are students, social media and internet are become the main promotional media to advertise. Continuous scheduling social media and internets ads in a regular manner throughout the year is done to create demand and to influence customers into buying the products.

In conclusion, the PESTLE and SWOT analysis have shown a favourable results for Koi Café to venture into Surabaya to start its operation where its marketing objectives can be achieved internationally with an appropriate marketing mix.

2.0 Introduction

Koi Café is a brand of Taiwan’s iconic bubble tea. In Taipei, the capital city of Taiwan, bubble tea shop can be found out of every 20 shops especially when it is in the area of the night markets (Daniel Food Diary 2013). In 2006, two stores of Koi Café were opened in Taichung, Taiwan to strengthen the brand name. In 2007, Koi Café expanded their business overseas for the first time to Singapore as an effort to make the brand go internationally (About Us 2012). However, in Taiwan, the original name of Koi Café is 50 Lan. The company decided to change its name to Koi Café as a strategy to attract Singapore local youths by serving contemporary vibes (Daniel Food Diary 2013). As Koi wanted to go internationally, Koi Café expanded to Xiamen, China in 2011. The store was put at the intersection of Hexiang West Road and Hubin Central Road (About Us 2012). In 2013, Koi Café asseverated to not only bring Taiwanese teas to become a global heritage through introducing genuine Taiwanese teas, but also make the pleasant experience by tasting the tea (About Us 2012). According to their website (About Us 2012), they have 46 branches globally in Taiwan, Singapore, Xiamen, Quanzhou, Macau, Indonesia, and Cambodia.

Koi Café which specializes in bubble tea, also has another kind of beverages to choose. They offer tea, milk tea, bubble tea, macchiato, handmade Café , and fruit-flavored tea. For those who love the real taste of tea, they have Jasmine Green Tea, Assam Black Tea, Honey Green Tea. For those who like their tea to be milky, Koi has Milk Tea, Chocolate Milk, Honey Milk Tea. Moreover, they have their specialty Bubble Tea, Bubble Milk Tea, Grass Jelly Milk Tea. Koi also offer macchiato such as Ovaltine Macchiato, which is one of their best seller. Macchiato is known for the sweet cream on the top of the drink. For those who do not like tea, there is fruit-flavored such as Fresh Lemon Juice, Honey Lemon Lime Juice, Honey Aloe Vera. In addition, Koi put coffee on their menu for those who prefer coffee over tea such as Café Macchiato, Golden Bubble Koi Café, and Konjac Jelly Koi Café (Our Products 2012). The drinks can be customized by adding toppings such as bubbles, pearls, grass jelly, aloe vera, and konjac jelly. Furthermore, the customers also can choose the sugar level starts from zero sugar, 25%, 50%, 75%, 100%, and 120%. The customization does not stop until there; the customers can choose the ice level such as less ice or more ice on their drinks (Yu 2015).