Chapter II

REVIEW OF RELATED LITERATURE AND STUDIES

A. Related Literature

Milk Tea

Nowadays, the taste and preferences of customers have become complex.

Because of the belief that if the company can offer a product that patrons will purchase

it, that is why many businesses concentrate on developing and perfecting the product.

There are, however, plenty of other variables that can lead to the success of

performance of the organization.

Milk tea is a famous tea-based drink that originated in Tainan and Taichung,

Taiwan, in the 1980s. It was invented by a Taiwanese tea shop owner, Liu Han-Chieh,

and his product development manager, Lin Hsiu Hui. The milk tea that we know today

was discovered by adding different ingredients such as fruits, syrups, and tapioca pearls

into different tea with milk beverages.

Milk tea first gained popularity in the 1990s throughout Asia and became more

popular in the United States and Europe in the 2000s. The popularity turned into a

global phenomenon due to the versatility and flexibility of the toppings and flavor

combinations that consumers could choose from. With the global phenomenon of milk

tea, it eventually hit the market with a $2.4 billion value in 2019 and is estimated to

reach $4.3 billion by 2027.

 According to Colonel Sandpiper Perso (2018), Milk tea is one of the trends and

most purchased beverages at the present. Milk tea is popular not only because of its

health benefits, but also because of its special blend and taste, no wonder why many

customers are addicted to it. New generations of consumers have fallen in love with this

new product trend. It is a combination of milk and tea that comes with various flavors

and ingredients as well.

In addition, according to ShiZuoHua (2013), Milk tea can illustrate the market to a

broad prospect. Milk tea was popular among the young generation because it combined

the taste of tea and milk. According to Supranes (2019), more than 23,000 Twitter and

Instagram posts were analyzed in this study to explain the rivalry between

Pizza
COVID-19 pandemic has spread around the world and affected the development
of economic countries. Some countries and states are under hotspot areas. During the
lockdown period, many organizations were forced to close their businesses, causing
economic recession. In addition, many companies have seen a sharp decline in their
sales and affecting their profits. Due to the COVID-19 pandemic, many restaurants have
started their service with takeaway or delivery, however they still unable to sustain their
business, especially the small and medium-sized enterprises (MSMEs). This study aims
to study the strategies used by pizza shops in sustaining their business during the
COVID-19 pandemic. The results showed the strategies used by pizza company for
business survival during the COVID-19 pandemic are promotions and provided quality
foods and there is a significant relationship between promotions and the preference for
Domino’s Pizza.

Factors Purchasing of Milk Tea and Pizza shops

 According to Yang Han (2018), The brand has specialties in ingredients,

sweetness and the regulation of cold and heat; paying attention to the price factor. Milk

tea shops concentrate on picture elements. Milk tea shops attract new customers at a

low price, raising price with the addition of more ingredients to acquire the market

surplus, what’s more, it also beats other rivals with different types of cups in the same

price aspect. Milk tea shops pay more attention to product ingredients, the taste of milk

tea is highly individualized, and it has a distinctive packaging style.

On the other hand, as stated in the study, marketing campaigns are the product

of inquiries into consumer behavior that help advertisers satisfy customers. The 5Ws

and 1H, including who, what, where, when, why and how, were designed to explore the

7 characteristics of customer behavior and to evaluate possible sensitive distribution

and promotion marketing strategies (Wongleedee, 2015).

Place

According to Dawood (2016), the location or place covers topics such as

distribution networks, consumer coverage, product inventory, transportation and

distribution sites. Due to the importance of the product and the consumption occurring

at the same time and at the same place, a company should pay attention to place

decisions; a location that offers all consumer information, competition, promotional

action, and marketing tasks. It should pay attention to how the product can be delivered

at the right time and at the right location, and which channel to deliver the product

should be used.
 Also, as found in the study of Manafzadeha et al (2012), place includes the

operations of businesses that make the goods available to target customers and include

distribution networks of goods, coverage of goods, sorting of goods, locations of supply,

inventory and amount of inventory and transport.

Product

Shariff et al (2016) stated that the asserted product attributes (labels, brand,

appearance, functionality, price, and taste) were positively associated with consumer

satisfaction and desired brand retention.

The product is the total bundled advantages that a consumer receives in an

exchange process. Also, products have seven elements, according to Kotler and

Armstrong (2016), namely variety, quality, style, features, brand name, packaging, and

services.

In addition to having good product design, a product needs good packaging to

increase the awareness of a brand by customers. Packaging refers to the product's

packaging or wrapper design (Kotler & Armstrong, 2016).

Price

Kienzler (2018) indicated that the business owner will gain competitive

advantage, raise profits, and ensure customer service and customer loyalty through
more value-based pricing innovation. Offering various price points and product types will

allow the owner of a small business to expand their business.

Maguire (2018), in her study revealed that a successful pricing strategy lets you

assess the price point at which sales of your goods or services will maximize profits. A

business owner must weigh a wide variety of variables, including manufacturing and

delivery costs, competitive deals, positioning strategies and the target consumer base of

the company, when setting prices.

Furthermore, according to Jesnoewski (2018), Nothing in business, like pricing

your goods and services, may cause uncertainty and doubt. Although you don't want to

pay for your value, you don't want to price yourself out of the market, so how would you

know if the price is right? According to Pofeldt (2018), It takes bravery to raise your

rates, but whether you're a freelancer, a solopreneur, or operating a small service

company, it's sometimes the only way to maximize sales. But without losing your

customers, it is possible to do it.

In addition, Zahorsky (2018), pointed out that your small company's pricing policy

will eventually decide your destiny. By paying careful attention to their pricing strategies,

small business owners will ensure sustainability and longevity. The pricing policy has

usually been to be the lowest price supplier on the market in business plans.

Moreover, price plays an important role in shaping the actions of clients and has

been extensively discussed in marketing literature. Price knowledge is a degree that

indicates how often consumers rely on paying lower prices and finding lower prices is

one of the habits that prevails to gain a profit (Rahpeima et al., 2014).
 As stated by Sumi and Karir (2018), The price is the monetary value of the

commodity that has a substantial impact on a customer's decision-making process. If all

external factors or advantages of a commodity remain the same, the price is considered

a measure of quality. From the viewpoint of a buyer, something lost or compromised to

achieve a product is the price of the product.

Norfarah, Koo, and Siti-Nabiha (2018) have pointed out that High-priced goods

offer the price-conscious customer an unfavorable impression. It plays both positive and

negative roles in influencing consumer’s behavior.