Identifying Target Customer for a Startup Business: Russian Herbal Tea Case Study in Taiwan
«IDENTIFYING TARGET CUSTOMER FOR A STARTUP BUSINESS: RUSSIAN HERBAL TEA CASE STUDY IN TAIWAN» Abstract. This paper is aimed to identify target customer and utilizing the results of the analysis to create an appropriate product strategy for a startup business. The main object of the case study was chosen to be Russian herbal tea as a new product for Taiwanese tea market. The data is collected from a focus group interview and prior marketing survey for investigation of the potential customers’ feelings about the product. Then three analysis methods were applied to analyze the gathered data: Cluster Analysis, Regression and ANOVA, and Factor Analysis on Statistical Package for Social Science (SPSS). The results indicate that (i) the target customer for a Russian herbal tea startup was defined as follows: 1) employed and retired 2) care about the quality of the products they buy; 3) package design and materials can influence their purchasing behavior; 4) they are mostly tea drinkers; 5) are not afraid and on the contrary willing to try new products on the market; (ii) there is a correlation between a fact of enjoying tea as the most favorable drink and a willingness to drink self-prepared tea at home, in office or school, and thus the most optimal product strategy would be selling Russian tea in retailer stores as a set of tea bags ready for brewing; (iii) the most important factors that affect consumers choice of tea are the special qualities that can help to reduce stress, improve concentration, relax and benefit to health. Based on the above mentioned results, the paper also presents some conclusions which would be useful for defining an appropriate product strategy for the mentioned startup.
1. Importance of Research Starting a new business is always considered to be a challenging issue for entrepreneurs, as it requires a correct value proposition and an appropriate product strategy for the potential customers. Due to the lack of the reliable data, this can involve numerous risks connected with a success of a particular business concept. Moreover, opening a new niche in the existing market, especially in a foreign one, can multiply these risks to a greater extent. However, conducting marketing surveys and utilizing some statistical analysis methods can reduce the uncertainty levels and the risks connected with the lack of data accordingly. 2. Literature Review Customer segmentation concept utilizing Cluster Analysis has been analyzed by researchers in wide areas of marketing. In this particular paper, some ideas of the researchers from Wroclaw University of Economics were used to prove that the mentioned method can be utilized in identifying potential customer portfolio for a range of businesses ( Marta Dziechciarz-Duda 2007). To support the idea of utilizing Factor Analysis for defining an appropriate product strategy the Author also involved some research results from the outside materials (Ali Akbar Jowkar et al 2013). Other scientific materials were also used as a reference to support some ideas described in this paper.