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Table of Contents 1 Executive Summary..........................................................................................................3 2 Tea Industry- An overview...............................................................................................4 .............................................................................................................................................4 History of Tea.................................................................................................................4 World Tea Market...........................................................................................................4 3 Company Profile...............................................................................................................7 Market share of Wagh Bakri and Unilever Lipton.........................................................8 4 Market Segmentation........................................................................................................9 5 Visible elements of marketing .......................................................................................11 6 Branding/Positioning......................................................................................................12 7 Marketing Mix Elements................................................................................................12 8 Conclusion......................................................................................................................13 9 Appendix 1 - References.................................................................................................14 10 Appendix 2 Statistical Data.......................................................................................15 10.1 Statistical Data Global Scenario of Tea..............................................................16 11 Appendix 3 Survey Questionnaire.............................................................................21
1 Executive Summary
This document analyses the marketing strategy adopted by two companies operating in the Indian Tea Market. In order to understand the various dynamics of the Indian Tea Market, the companies chosen are one from Indian origin (Wagh Bakri Group) and the other is a Multinational company (Unilivers Lipton Tea). A sample survey/research was conducted to assess the market perception about these two brands with different class of people in India and the survey findings distinctly identifies the key areas that contribute to each of these brands market share as a result of their respective marketing strategies. Unilever-Lipton is clearly a market leader and due to its international presence and has been successful in India with consistently maintaining the market leadership for several years while Wagh Bakri Group being a proprietary company has held on to its market share by focusing on certain segment of the market where Lipton is relatively weaker. The document is broadly split into 2 parts. Part-A identifies the customer segment by demographic and socio-economic factors. The target segments of each of these brands have contributed significantly to play by their respective company strengths. Part-B Analyzes the visible elements of marketing such as packaging, labeling, advertising, sales promotions, websites, trade publications, outlets, pricing etc. and compare the marketing mix elements of the selected two brands
History of Tea
The first person to drink tea was a man named Shen Nung from China, who one day took his family mountain climbing. During the climb Shien Non Shei became thirsty and a leaf drifted onto his foot. He picked this leaf up and twisted the leaf with his fingers. The juice of the leaf went on to his fingers and he tasted the juice. The taste of the juice was quite bitter, so Shien Non Shei felt that this leaf could have medicinal properties and could help quench thirst, when brewed.
Manufacture
Tea manufacture is the process of converting young fresh tea shoots into dry black tea. This involves a number of processes from plucking to packing. At the plucking stage, only the top leaf tips are picked every 6 to 7 days. The tip leaves are younger and finer which produce a better quality tea. The fresh green leaves now need to have the moisture removed from them. This is done by blowing air through the leaves for up to 14 hours, leaving a soft and pliable leaf. There are then two ways of treating the tea. Tea which is to be used as loose leaf will normally be rolled gently to create a twisted appearance.
Types of Tea
There are several ways of classifying tea like the country or region of origin. The tea is divided in three types: Black tea Black teas are produced by withering, cutting, rolling, fermenting and drying the tea leaves. The infusion can be light or dark in appearance, varying in color from orange to brown and will usually have a strong taste. Green tea Green teas are teas that have been picked and rolled before firing. This stops the veins on the leaves breaking, preventing the fermentation process, so that the leaf does not turn brown. The brewed tea is pale yellow or green in color. Oolong tea Oolong teas are semi-green teas, produced by stopping the fermentation process just as the leaves start to turn brown. The leaves are then fired or dried and deliver a yellowish infusion.
Tastes of Tea
There are nine main tastes of tea in the world: Original tea (from specific countries or regions) Standard teas Medicinal teas Organic teas Hot or cold teas Perfumed teas Seasoning teas Decaffeinated teas Exotic teas.
3 Company Profile
Wagh Bakri Wagh Bakri Group is one of the largest privately-held tea producers and sellers in India, making leading strides in tea exports. The group sells more than 25 million kg of tea annually and retail consumer packing to countries all over the world. The group has not diversified into other FMCG products and focuses mainly on the Tea business. Unilever-Lipton Lipton is part of the multinational company Unilever from UK. It is one of the leader FMCG company in the world market. In 1890, Sir Thomas Lipton set sail for Ceylon in search of the world's finest tea. There he turned the growing of tea into a subtle and noble art, blending teas to create unique and refreshing flavors that brought him fame and fortune. Under the slogan 'direct from the tea garden to the tea pot', he made tea a popular and approachable drink for everyone high quality but reasonably priced. His passion for perfecting the finest blends of teas took him to the most far flung reaches of the British Empire. At the end of the 19th century he had 300 clerks in London where he had moved his business to from Glasgow in 1891/2, 5000 hands in Ceylon and 150 shops all over England. Unsurprisingly, Lipton produces the worlds number one tea today.
This research examines the various factors or the company strategies that explains their market share in 2 parts.
4 Market Segmentation
Market Segmentation Demographic Criteria Criteria Age: 5+ years onwards will be the potential customer. Wagh Bakri Focuses mainly on the non-working class group and hence the pricing is done to suit this class India still remains male dominated working group class and this will be their primary target Low income group Less educated Lowe strata Being a Gujarat based company, enjoys huge loyalty from the state of Gujarat Being a regional player with minimum presence in other states focuses mainly on lower to middle income group level personality /lifestyle category Successful in indentifying the individualistic taste preference an offers region specific products Selectively targeting the markets such as Gujarat and now slowly expanding to other metros Unilever Lipton Lipton is more of a luxury brand and focuses on slightly high end working class as their main customers Lipton being slightly expensive caters to women and men working class. High Income group Relatively better educated due to brand awareness Relatively higher strata International brand, religion hardly plays a role.
Gender
Psychographic
Being an international player the main customer base comes from the middle income to higher income group lifestyle class. Offers standardized products with high quality products Available in all metrosurban and suburban areas with wide distribution channel.
Behavioral
Benefit sought, Product usage rate, brand loyalty, product end use, readiness to buy stage Geographic penetration
Geographic
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It shows fresh green leaves on their packaging to convey message that its natural. For lemon iced tea, package shows lemon, ice along with fresh green leaves. In short, their packaging tells the flavor and purpose of the tea inside. Advertising Lower brand awareness is the result of lower advertisement initiatives. National level advertisements are minimal Basic details about the products Sponsors international events Print, Media, Digital advertisements with huge budgets Product value, health/nutritional values Safety and quality standard adherence. Being one of premier FMCG player offers heavy promotional offers with its other products.
Labeling
Promotions
Due to lesser vertical businesses have limited advertisement budgets and hence lower promotional events
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6 Branding/Positioning
Lipton with its huge man power focusing on brand image is constantly inventing new ways and means to improve the brand image and position its products into the right space. Out of many such initiates are connecting to the youth who are the expanding class of consumers with good spending power through FACEBOOK, ORKUT, TWITTER social networking websites. Lipton tea in different forms such as packaged ice tea has become a fashion statement for the youth in the budding cafs around India and the take away tea packs are hugely successful. Their focus to tap the youth market is the step in the right direction. While Wagh Bakri is lagging behind on such initiatives and remain focused on the lower income group strata who normally do not get access to these initiatives.
Place
More of regional player Has smallest pack and smallest price to cater to the lower income strata which is their main focus Limited and sharp focus on selective markets drive them to be conventional in promotions
Price
Promotion
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8 Conclusion
The different marketing strategies applied by each of these companies analysed above have led to the belief that to connect to the masses, the regional understanding of the tastes and preferences with lower income strata coverage has helped Wagh Bakri to maintain their consistent market share while being an international player with enormous amount of resources easily available in product development and promotion has clearly given an edge to Lipton to be the market leader.
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9 Appendix 1 - References
http://beacononline.wordpress.com/2008/03/15/india-largest-tea-producerand-consumer/ http://www.domain-b.com/industry/Foods/20090825_good_morning_tea.html http://www.Wagh Bakritea.com/ http://www.lipton.com/ http://www.scribd.com/doc/21943036/Wagh-Bakri-Products http://teaboard.gov.in/ http://www.adbrands.net/us/lipton_us.htm
http://www.youtube.com/watch?v=rvVadyEg8hk
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