Effective Segmentation for Strategic Value Creation

Segmentation is necessary to examine the target audience and direction in which the company need to work towards, in order to create value and consumer commitment (Nobre, Brito and Lencastre, 2004). The division profile of TWG Tea's target market can be mostly identified through the "behavioural" division. Consumers use TWG Tea's services for various factors, such as buying retail items or dining in. The market can likewise be segmented by the customer's knowledge of teas and tea products, in addition to their attitude towards the services supplied.

As TWG Tea Company is the among the few tea business with restaurants and retail outlets in Singapore, it gains utilize on positioning compared to its rivals such as Lipton, Twinnings and Hediard. Besides getting the upper hand from its rivals, consumer purchasing behaviour is likewise crucial and can affect the positioning of TWG Tea in the market. Pre Purchase Phase Requirement Awareness TWG Tea trains its staff in tea knowledge.

With over 400 kinds of teas, it is essential for the servers to be able to determine requirements of the consumers and advise the proper products, especially for customers who have no prior experience with the products.

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Service Expectations Tangibles The concrete elements of TWG Tea's outlets are well groomed personnel and have a good ambience consisting of facilities and screens. Dependability Consumers can expect timely and accurate service from the staff members, in addition to abundant product understanding when approaching employees for help. Responsiveness

Customers have the ability to expect prompt service and politeness from workers.

Employees take initiatives to approach customers without having to be triggered for their help. Guarantee TWG Tea is easily contactable and open to consumer enquiries or opinions, supplying a couple of platforms for communication such as the corporate site, outlet stores, telephone hotlines, and emails for queries. Employees are also trained to deal with and deal with consumer complaints, as well as knowing which service personnel to get in touch with if problems could not be solved on the area.

Empathy Testers are available at display counters for consumers to smell each tea in order to aid in independent decision-making. Tea ice creams are also available for trying in order for customers to choose their preferred flavours. Operating hours of the outlet are reasonably timed and hours and is extended during weekends. Information Search Consumers who infrequently purchase tea may require greater effort in information search, and through the expertise of employees, are able to find the information they need.

There are also detailed explanations of TWG Tea’s products available in stores to assist in customers’ search for information. Evaluation of Alternatives Search attributes are very important when the consumer is evaluating its alternatives, as this shows the position that TWG Tea has in comparison to its competitors. For example, the price and location or convenience (Kang, 2011) are important factors that affect the consumers’ ultimate buying decision.

The perceived risk involved in the encounter with TWG Tea will also affect the buying decision. Such risks include functional, physical, financial, social, psychological, and time risk. The Purchase of a Service The purchase of services from TWG Tea is made after the service has occurred, which gives the consumer a chance to evaluate the service before deciding to purchase it. This can avoid poor purchase outcomes and ensure that the consumer agrees with the price and value of the service being offered.

The Service Encounter Being simultaneously produced by the consumer and TWG Tea’s employees, the service encounter can be further evaluated in terms of value, satisfaction and loyalty of TWG Tea’s service by the consumer. Not only is good service important, it is more important for a service failure to be restored with a service recovery to show that the company is able to handle failures well. Post-Purchase Evaluation Satisfaction levels are measured at this stage after the purchase transaction is complete.

With the excellent service from TWG Tea’s employees, consumers should expected to be satisfied with both the products and service, and develop loyalty for the brand. With loyalty being developed, word-of-mouth recommendations will occur and this will gain positive reputation for TWG Tea. Positioning Strategies The positioning strategies employed by TWG Tea, are both positioning via service attributes as we as positioning via service benefits. Positioning Strategy Via Service Attributes

For the positioning strategy via service attributes relating to service-related features, TWG Tea offers an extensive range of tea not found in any other competitor, as well as a range of tea related products on sale and full restaurant services which incorporate tea into every item on the menu. The combination of tea in both the traditional retail sense as well as fully incorporating tea into the restaurant services is unique to this company. Outlets are also located in strategic areas with high consumer traffic such as along Orchard Road, the Central Business District as well as the Marina Bay area.

Globally, TWG Tea has continued to locate themselves in areas catering to the higher end of the market segment such as Harrods in London, Dean and Deluca in New York as well as Iiyugaoka in Tokyo. Staff are trained in product knowledge of the tea as well as expected to uphold high service standards. With regards to positioning strategies via service attributes concerning usage and user imagery, TWG Tea provides teas to hotels such as the Fullerton and the Shangri La as well as being offered on Business Class flights on Singapore Airlines flights.

Positioning Via Service Benefits Positioning via service benefits are seen in the fulfilment of the symbolic as well as the experiential needs. Fulfilment of the symbolic needs can be seen in the brand being marketed as a luxury service, commanding higher prices due to the quality offered. As mentioned above, TWG Tea is served at establishments that are associated with the higher echelons of society.

As for the satisfaction of consumer’s experiential needs, TWG Tea offers an incredible variety of teas, and is entirely unique in it’s concept. When dining in the restaurant, teas are blending into the food, providing consumers with an experience found nowhere else. Tea brewed in the restaurant is also done precisely with attention paid to the time leaves are left to steep in the water as well as the water temperature. These strategies aid in the positioning of TWG Tea in the minds of consumers, which will be further elaborated upon.