Tea retail business and the Great Captains: an intro

L’Heure Gourmande by Adrian Scottow

Small tea business are like every other small business in the world. They face different challenges be it competitors, taxes, difficulties to find good suppliers… but they also have unique advantages in terms of their capacity to evolve, a peculiar relationship with their customers, the services they can provide.

This can be summarized in one sentence: small is beautiful but big is powerful.

One of the first decisions to make before launching a retail business (and tea is one of these) is what should be the focus or should I say the market for the future new company: should it try to provide everything (or nearly everything) or focus on a peculiar market (Japanese teas, home blended teas…)?

Some of you would object that this approach is quite academic and that usually people when starting a business don’t really know where they are heading or I would rather say, they don’t have a clear vision of what I just wrote about. They might have an unique expertise, some specific suppliers, a peculiar idea but for most of them (and I did write most of them), the idea is launching a business for different reasons.

This is exactly why I decided to write on this topic.

As usual, I won’t go too deeply in the topic as it is a mere introduction to something that I am sure has already been studied many times in different industries/fields.

What I want to do is provide a first look at these two alternatives and their pros and cons.

The “provide everything” approach as its name implies is a generalist approach which intents to give a little of something to everyone or to have every single need covered.

Pros

Covers every potential need

Focuses on a larger target market

Is more resilient to changes in trends

Cons

Higher competition from other companies

Differentiation from others is more difficult to achieve

Unable to answer the most precise needs of some customers

Table 1: Some pros and cons of a “provide everything” approach

The “focus, focus, focus” (the third focus being there to avoid any confusion with Hocus Pocus) approach is completely the opposite as it aims at being the best/only/… seller of a specific thing and be recognised for it.

Pros

Avoid direct competition with most people on the market

Recognised more easily for its expertise and unique approach

Higher value of the products sold or higher willingness of the customers to be more

Cons

Smaller market

More fragile when dealing with change in market trends

Linked with fewer suppliers

Table 2: Some pros and cons of a “focus, focus, focus” approach

I think most of the pros and cons can be understood quite easily so I will only comment a little more on two of them.

The first one is the trend parts.

If a company is surfing on the wave of the health benefit of green teas and selling only these teas ; it will have troubles to use what was its main selling argument when this trend “dies”.

And if it has nothing else to promote its products, it might be in dire straits.

On the other side, if it sells several products, it will have no problems surviving the different trends that rise and fall.

Obviously this simplification doesn’t work if you are talking about a trend that has been around for so long that it is something normal to most people in an area or in the world.

The second one is the higher value of the products sold or the willingness of the customers to pay more.

When a company is focusing on a product or a line of products, people recognise its expertise (I made the hypothesis that this company is knowledgeable about what it is doing) and are eager to pay more (probably a little more) for its products.

Why? Because deep inside us, we know that expertise has a price and that this price is worth it when expertise and quality go together. How do we know if they do? The first answer is by trying but we are also willing to believe more in the product quality when it is sold by someone knowledgeable in a topic.

Don’t tell me that it is the same as a salesman selling vacuum cleaners or encyclopedias as it is not. These people are sales experts not real vacuum cleaners experts. The good ones could sell you anything.

This is how this post ends but I am sure I missed something. So don’t hesitate to comment/discuss/correct me…

Napoléon on Saint Helena

What? I forgot something? The Great Captains?

No they didn’t all drink tea but they give a lot of thoughts to this being everywhere vs. focus problem and as always in military things, there was never a clear answer as it depended on a lot of things.

 

Xavier

My name is Xavier.

I live on the other side of the pond but you had probably found this out thanks to my “strange” English.

I am a tea addict and I studied several (and I do mean several) years ago marketing, hence this blog, which will try to combine both worlds.

Latest posts by Xavier (see all)

13 comments.

Leave a Reply

Your email address will not be published. Required fields are marked *