CHAPTER 2

REVIEW OF RELATED LITERATURE

Milk Tea business, a popular commodity right now due to its general affordability and availability,
dashed into the industry and took it by storm. A couple years since its pioneering years, we’re looking at
every nook and corner somehow harboring a Milk Tea Shop, regardless if it’s a small- or large-scale unit
and the place of Boac, Marinduque is no stranger to it. That being said, factors with relation to it’s effects on
customers will be elaborated by some of the articles stated below.

According to an article written by Mira Jirah C. De Guzman, Larisse Ma. Jenaila P. Deramas, titled
“The Influence of Marketing Strategies of Milk tea Shops on the Preference of the Consumers”, a clear
depiction of what the customers want on their milk tea is the creation of a unique brand. Behavioral aspects
are triggered when certain milk tea shops create easy-to-remember names as a tagging for their milk tea
flavors. This is a great marketing strategy to keep your customers from forgetting what your product is and
is deemed to be one of the founding points of this research. In addition, accessibility and location of these
shops are also considered by the customers as the current technology demands quick and easy delivery. Is
it located in a place where there’s a huge traffic of customers? If not, are they accessible online?

Another factor to consider in this research is the types and qualities of ingredients used by these
shops on their Milk Teas. As illustrated in an article (Consumer Preference Analysis on Attributes of Milk
Tea: A Conjoint Analysis Approach) created by Ardvin Kester Ong, et. al., using a conjoint analysis, they
have denoted the hierarchy in which milk teas are evaluated and valued by customers. Topping of the list is
the size of the pearls, followed up by sugar level, amount of ice, type of drink, price, the inclusion of cream
cheese, and brand, as the key points in creating a winning milk tea.

A supporting article can be then deduced from the works of Van Dung Ha, in the article titled
“Determinants of Milk Tea Selection in Ho Chi Minh City”, in which a similar instance of surveying
customers in a certain place, in their case Ho Chi Minh City, regarding their preferences for Milk Teas.
Additional factors can be deduced from this article as summarized by this list (with corresponding
hierarchy); price, brand, quality, and customer behaviour.
 A similar article was also written by Violita Flamy Pangkey, “The Analytical Hierarchy Process
(AHP) Of Consumer Purchase Decision In Selecting Bubble Tea Shop” in which comparisons between milk
tea shops were made and was based on five major marketing principles. As the title says, a hierarchy
process is justified within the article and can be summarized as follows; price, flavor, store atmosphere,
sales promotion, and experience. All of which are similar to the first two reference mentioned in this
chapter.

Factors mentioned above were used as reference in order to formulate the correct research
process to adopt within this research. This will then lead to one of the key points of the research which is
the scenario of re-purchasing for customers who developed a liking for certain commodities. As what is
stated in the article written by Heiner Evanschitzky, “Consequences of customer loyalty to the loyalty
program and to the company”, “results indicate that company loyalty influences a customer’s choice to visit
a particular provider and to prefer it over competitors, but it is not a strong predictor of purchase behavior.
Conversely, program loyalty is a far more important driver of purchase behavior. This implies that company
loyalty primarily attracts customers to a particular provider and program loyalty ensures that once inside the
store, more money is spent.” In Layman’s terms, it means that the brand in which a certain commodity is re-
purchased can affect the behavior of a customer in terms of considering where to buy a certain product.
Meanwhile, great program loyalty, in the form of well-organized marketing strategies, can drive any
customer passing by, in our case Milk Tea Shops, to buy almost inevitably.

Customer loyalty is also shown in the article “How customer value affects customer loyalty in milk
tea market in China?” by Zhang Yingyue. Evaluating a milk tea brand called “Yidiandian Milk Tea” deduced
that customers who are given emotional and social value by their drink are more inclined to be loyal with
them. Whether it is a raise in social status when drank, a joy in every sip, or a surprise in every cup, such
feelings are essential for dictating how loyal these customers will be to the brand in the future.

Furthermore, factors which can be seen in a loyal customer are presented in the article “The four
C’s of customer loyalty” by Jennifer Rowley. With the purpose of understanding the indications of a loyal
customer, the following “C’s” have been coined; captive, convenience-seekers, contented, and committed.
Some C’s such as convenience-seekers and contented can be described metaphorically with the way
orders are being handled in which certain shops offer the oft convenient food delivery service and others
take a keen eye on the taste, respectively.

In “Critical Success Factors to Improve the Business Performance of Tea Drink Chains”, five
factors were determined to be crucial in the milk tea business’s success. As explained in the article, “These
critical success factors can be divided into: (1) “brand image management” (6 items), (2) “quality and cost
control” (5 items), (3) “personnel training and customer satisfaction” (5 items), and (4) “marketing mode and
promotion mode” (2 items).“ With further explanations respectively as follows; ersonnel training and
customer satisfaction” was the most important critical success factor. It should focus the training for quality
and the requirement of a good attitude toward customers. All items should influence the will of customers to
consume again. (2) The “brand image management” is like a spiritual indicator that represents the tea drink
chain. People refer to this brand and know which chain enterprise it is, meaning the brand image managing
is successful. It can represent the spirit of the chain enterprise and have good quality at the same time. (3)
The chain tea-drinking stores with high “quality and cost control” such as decoration cost, personnel cost,
equipment cost, and water or electricity cost. Quality and cost control cannot be ignored with increasing
income and profit. A centralized purchasing system should be used efficiently and can help chain stores
save time and simplify processes to copy many models to obtain the market. (4) “Marketing mode and
promotion mode” reach their results by using the propaganda of media and newspapers. The display and
type of goods can reach their goal by marketing. (5) The “location of business” can be evaluated on other
kinds of competition styles from traffic conditions. It is analyzed to determine the advantage of a location via
influencing factors.”

In “The Product Life Cycle of Milk Tea: An assessment” by Fhrizz S. De Jesus, describing the
longevity of the milk tea business should also be taken into consideration. Of course, you can’t have loyal
customers if your business is not sustainable in the first place. Financing of companies should be as
important as keeping customers in the way of not spending unnecessary expenses, analyzing current
trends, product innovation, etc. A proper marketing plan should always be considered.

Of course analyzing the current status of commerce in the MIMAROPA region should be
conducted, thus, the “Strengthening rural enterprise development in the Philippines” by Dr. Ma. Josefina P.
Abilay is enumerated in this chapter, as well. According to the article, the MIMAROPA region houses
27,432 total number of establishments, 94.32 percent or 25,876 are micro, 5.4 percent or 1,505 are small,
and less than 1 percent or 29 are medium. This explains how vast the competition is in MIMAROPA as
most of Milk Tea Shops are small and micro businesses scattered around the region.
https://www.emerald.com/insight/content/doi/10.1108/02634500510624138/full/html

https://link.springer.com/article/10.1007/s11747-011-0272-3