Final Teavana Paper2

Final Teavana Paper2 - Insight Consulting Teavana Inc....

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Insight Consulting Teavana Inc. December 14, 2011 Jaclyn Greco, Sam Levit, Melany Narvaez Juhair Khan, Adam Schumer
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Executive Summary Teavana is a retailer of loose-leaf tea and tea merchandise. Loose-leaf tea varies from bagged tea in several ways. Most importantly, loose-leaf teas have significantly less preservatives, and are made from whole tea leaves. Since its commencement, Teavana has had a very defined mission, to provide consumers with high quality teas and tea merchandise, and to expose consumers to the relaxing and calming effects of tea and the tea lifestyle. Andrew Mack (CEO) and his wife Nancy Mack became so fond of the tea lifestyle throughout their world travels and since then have decided to provide consumers with the opportunity to also experience the tea lifestyle. Since 2009, Teavana has had strong financial performance. From 2009 to 2011 gross sales have increased 95.2% from $63.86 million to $124.70 million, respectively. Teavana is currently operating 197 stores and has a very strong and well-defined growth strategy in place. By 2015, Teavana’s goal is to have a minimum of 500 stores domestically. Teavana differentiates themselves on several levels. Primarily, Teavana offers a very unique retail experience referred to as the “Heaven of Tea” experience. This heaven of tea experience is a process executed by Teavana’s salespeople. Teavana has extensively knowledgeable salespeople located in its retail stores referred to as “teaologists”. These teaologists are familiar with all Teavana’s tea blends, their health benefits, where they originate from, and how to brew each tea blend. The teaologists grasp consumer’s attention using the sample carts that are located at the front of the Teavana store. They then lure consumers into Teavana and bring them over to the wall of tea. This wall has large tins full of over 100 types of varieties of teas. Once these consumers are brought to the wall of tea, they are introduced to different types of teas and exposed to all the information about the tea; the aromas of the tea, and
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can see the texture of the loose-leaf teas. The objective of the “Heaven of Tea” experience is to eventually influence the consumer’s behavior and convince them to make a purchase at Teavana. Teavana has several basic key issues. First and foremost, there is not enough brand recognition or strong brand awareness. Secondly, Teavana currently does all operations and distribution through one distribution center in Connecticut. This does not provide Teavana with the capacity for growth required to execute its defined growth strategy. And lastly, Teavana does not have a large enough presence in the quick-serve tea market with only 4% of net sales allocated from beverage sales. The way Teavana markets its brand is very unique and has been successful thus far but has raised some concern for long-term growth and success of the brand. They strategically place their retail stores in high-traffic locations and high-volume retail venues. This exposes them to large numbers of consumers at a consistent rate.
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Final Teavana Paper2 - Insight Consulting Teavana Inc....

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