Deseratation Analysis Sug

ANALYSIS

TOPIC;

EVALUATION OF MARKETING STRATEGY OF TETELEY TEA IN UK BUSNESS TO CONSUMER MARKET

AimInvestigate the reason behind sustainable performance of Tetley in processing and implementing marketing strategies, in UK B to C market.

Objectives To investigate the marketing strategies which enables tetely to

deliver sutsuniable performance? To make a detailed evaluation on “How Tetley processing their

marketing strategies?” To explore” How Tetley implements their marketing

strategies?” To analyse “how Tetley controls and coordinates their

marketing strategies?” To make a description about the barrier Tetley face while

implementing marketing strategies?

Findings

Marketing strategy of Tetley

Marketing strategy is critically important for all firms to win their battle in the market

place .According to the Manager A, Tetley makes marketing strategies for achieving

objectives of the company .Tetley implements long term as well as short term marketing

strategies based on situation and core business strategies objectives of the company. The basic

core business strategy of Tetley is sustainability and increasing the market share in the UK

market. Tetley updates their marketing strategy time to time according to the dynamic

business environment. The main reason behind this in the current business environment is the

peak competition and changing consumer behaviour. The main objective of the company in

making short term marketing strategy is to beat the competitors, gaining the market share and

for increasing the sales for a particular segment as well as whole segment. Likewise Tetley

implements their long term strategy for creating value to their brand in UK market. According

to Sara Hulse (2008) etl, “Firms doing for achieving the organisational objective that includes

achieving the marketing share and expanding market.”

Tetley is developing the marketing strategy on the basis of identifying the internal and

external environment. This can be analyzed effectively through some business analytical tools

like SWOT, PEST and Michel porter five force analysis of the company .According to the

Colin Gilligan and Richard M.S. Wilson (2009) the evaluation of external and internal

environment is important for making a successful marketing strategy. In this analysis each

tool is analysed separately on the basis of information that I have collected from both primary

and secondary data sources.

SWOT ANALISIS

The term SWOT indicates Strength, Weakness, Opportunities and Threats. The management

normally uses this tool to identify internal and external environment. The strength and

Weakness will analyse the internal environment and opportunities and threats will analyse

external environment. By doing this, company can enhance the internal strength and it will

help the company to reduce the weakness. This enables the company to tap the business

opportunities.

SWOT ANALSIS

(Source, page number 119, marketing strategy 2008, O.C. Ferrell, Michael D. Hartline)

The following is the swot analysis of Tetley in UK market.

Strength

Strength of the company can play a key role in achieving business objectives and

goals .Strength help the company to beat the competitors in the market place and also to

identify their potential areas. Potential strength companies can be vary through different

factors, for example some companies strength can be production capacity, or it can be brand

name etc .Strengths have to match with the opportunity to tap the market. The following

section indicates some of the strengths Tetley have,

Tetley has there own 56 plantations around the world.

Tetley has a tea business history of more than 100 years in the UK market.

Financially strong because it is owned by TATA group.

Brand name and brand logo is a key strength and key asset for the company in the UK

market.

Strong distribution channel in the UK market, for example Tesco, Sainsbury, Asda

etc.

`Weakness

For every coin there are two sides, so here as well the Tetley have some weakness.

Health related issues

People have a perception that Tetley pays low wages for the tea workers in Tetley’s

Asian tea plants.

By identifying above, Tetley can overcome the weakness, for instance I have pointed that the

perception of public regarding paying low wages to the employees in the Tetley tea plant, the

weakness has now identified by the company and they have started mission for overcome this

through their modern strategies. For that Tetley have recently joined in ethical tea partnership

which mainly focus on the welfare of workers in tea plant at different nations.

Opportunities

A good marketing is an art of identifying, developing and exploring opportunities. Tetley’s

marketing opportunities are based on the needs, interest and drinking behaviour of the

consumers. These opportunities had made the success of company in the UK market. The

main market opportunities of the Tetley are follows;

More than 150 million cups of tea drunk in UK per day, it will increase the need of

tea in market creates great opportunity in establishing their products.

Increase in the population of UK for example increase in migration of people from

highly tea consuming countries like china, India and other Asian countries.

Introduction of advanced technology to tea production have the potential to increase

the production capacity and profitability.

These opportunities have the potential for generating higher sales which enforces the

company to meet the Financial Rate of Return and profit of the company. With the

introduction of modern technology company could reduce the cost of production and

wastage of resources. This will lead the company to meet the growing demand in UK

market in a cost effective way. The low cost production can help the Tetley to do a

competitive pricing in the current highly competitive UK market.

Threats

The UK tea market is highly competitive and relatively elastic

Strong competition from local retail store brands like Tesco and Sainsbury tea brands

Regulation of government and from other bodies like Advertising Standard Authority

(ASA)

Tea is considered as a traditional drink in UK market with the perception of an old

fashioned and less functional than other substitute’s product.

Competitive pricing in the UK market.

PEST ANALYSIS OF TETLEY UK

Picture of PEST analysis

Economical factors

Some environmental factors that affect the company for instance, increasing unemployment

level in the economy it will lead to decrease income and their by reduces the purchase

activities. In addition to this there are some other factors like Changes in customs duty,

inflation and budget etc.

Social factor

Changing behaviour in people for example people in UK are more concerned about health

related issues.

Decreasing income of the people will reduce the conception of tea in the market, this will also

affects the business expanding strategies.

Legal factor

Legal factor plays an important role in UK business environment. Some legal factors like

minimum wages, working hours, maintaining standard and regulations in advertising in UK

market (ASA), health and safety etc are important for the Tetley to run the business in the UK

market.

Environmental Factors

Environmental issues have some key influences in delivering eco friendly product packaging,

and protection of the tea plantation owned by the Tetley. Because of these issues Tetley make

sure that the life of workers in tea plant is safe, comfortable. Tetley is a member of

international ethical tea partnership.

ANALISIS OF PORTERS FIVE FORCES

(Source from competitive strategy techniques for analysing industries and competitor by

Michael .E. Porter 1998)

The marketers make use of Porters five forces to determine the intrinsic long attractiveness of

market or market segment. Five forces include industry competitors, potential entrance, threat

BARGAININGPOWER OFSUPPLIERS

THREAT OF

SUBSTITUTEPRODUCTS

BARGAININGPOWER OF

BUYERS

THREAT OF

NEWENTRANTS

COMPETITIVE RIVALRY

of substitutes, buyers barging power, suppliers bargaining power. This analysis is useful for

firms to develop an effective marketing strategy and also gives an insight about the market.

With the collected information and five forces model I have analysed the industrial

environment of Tetley, that are follows;

Threat of industry segment rivalry

Tetley have a number of strong and aggressive competitors in the UK market. For

example, Tetley is facing strong competition from the companies like twinnings, PG

tips, Yorkshire tea and other local retail tea brands in all segments. These market

conditions in UK will lead to a continuous price war and promotional battles. So by

doing this analysis Tetley can identifies their competitors in every segment in UK

market. And it helped them to develop an effective marketing strategy to beat the

competitors in the market and for gaining the market share.

Threats of new entrance

The chance of new entrance in UK tea market is comparatively high because of the

liberalisation in UK trade laws and increasing demand. Despite of this other

international brands will not entre suddenly to UK market because of the higher

competition in Current market. Companies like Tetley, twinnings, and PG tips plays

important role in the market due to their high presence. These factors will have the

potential to pull back other companies for entering UK market. Company can reduce

the threat of new entrance to UK market by cultivating an emotional attachment

towards Tetley brand in the mind of consumers by delivering value and through

effective communication. Emotional attachments towards the brand can create a

monopoly in UK market. It has proved by other companies in other soft drinks

markets for example coca cola in UK. And it is crucial to Tetley for identifying the

chance of new entrance to the market for making good marketing strategy.

Threats of buyers growing buying power

Buyers have high bargaining power in tea industry because of the large number of tea

manufacturing companies in UK market. Since the switching cost is negligible consumers

have great hand in updating their brand with varying demands and needs. Even though the

demand is high in UK market the companies are fighting to capture market share by the

implementation of new polices and strategies to attract the consumers.

Threat of substitute product

Tea is a refreshing hot drink, so the substitute product is coffee already exists in UK market

and demand for the coffee is increasing with tea. Because of this threat and influences of

these substitute products are high in changing the drinking behaviour in the consumer.

Bargaining power of suppliers

In the production of tea in Tetley, the bargaining powers of suppliers are less when compared

to other competitors. The main reason behind this fact is the availability of get raw material

directly from Tetley‘s tea estate. But in the product distribution side suppliers for Tetley are

retailers and they have more bargaining power. This is because, in UK market Tetley’s total

business is depending up on their main suppliers like Tesco, Sainsbury, Asda etc. The

company can defence this situation by building strong and good relationship.

MARKETING STRATEGY PROCESSING

Tetley process the marketing strategy after clear identification of their objectives. The

marketing objectives are changing according to the market situation and environmental

influences .Tetley process the marketing strategy through segmenting, targeting and

positioning. According to arguments of Chris Phillips, Isobel Doole, Robin Lowe (1994)

the companies are using different ways for developing marketing strategy but the

common approach for processing the marketing strategy is done through segmenting,

targeting and positioning.

(Picture of marketing strategy processing)

Market Segmentation

Without proper segmentation of the market company cannot satisfy the needs and

demands of all customers. So it is important to divide the market into a group of

customers or segments with distinct needs and wants. The firm have to choose and

identify the segments in the market for serving effectively. For developing the best

marketing strategy the marketers has to understand what makes each segment unique

and different. In UK business to consumers market Tetley has segmented consumers

on the basis of demographic, behaviour and benefits related. Tetely has also done the

niche market segmentation to ensure consumer satisfaction in all levels.

According to David J Rachman (1974) the company can segment the market on the

basis of behavioural demographic. Kotler ( 2009) state that the consumer market can

be segmented on the basis of benefits and there are some levels of market

segmentation that mainly consist niche marketing. Each segment has analysed

separately with primary and secondary data that are follows;

MARKETING STRATEGY

PROCESSING

SEGMENTING TARGETING POSITIONING

(Diagram of Tetley market segmentation)

Demographic segmentation

In demographic segmentation Tetley has segmented UK business to consumer market

on the basis of age, the family size and income of the people. For example, one of the

age segmentation of Tetley has kids tea segment serves to age range of 7 to 16 old.

This demographic segmentation will help to satisfy the needs and wants of the

customers.

UK tea market consists of different age group with different taste and attitude towards

tea, for instance the age between 7 to 14 they prefer more flavoured tea rather than

going into normal tea and Herbal teas. On the other hand the age groups like 35 to 70

they prefer more health benefits from tea like green tea camomile tea etc. So this kind

of demographic segmentation helps Tetley to serve better to each age group according

to their tastes. And through this segmentation company could satisfy the needs of

different age groups. The demographic segmentation has played a major role in

BENIFITSSEGMENTATION

DEMOGRAPHIC SEGMENTATION

BEHAVIOURSEGMENTATION

TETLEY MARKET

SEGMENTATION

Tetley’s success especially in kids tea market is segmented on the basis of age which

enabled company to capture sustained market share in the specified age range.

Behaviour

Tetley has segmented the consumers on the basis of behaviour. For example some

people buy the tea in large quantity because they don’t do the purchase every day and

every week but on the other hand some customers they do frequent purchase. This

forced company to segment their market on the basis of purchasing behaviour of the

customers. According to the Behavioural Segmentation company has designed the

product packing strategies to satisfy the customers. In the survey questionnaire I have

given the question like how often do you purchase tea and I have given three options

for the opinion. Every week, every month and every three month are the options i

have given to the respective question. In the survey i got 97 replays out of 120 as

“they buy the tea every month “. The percentage of the replied answers is illustrated

with the help of a diagram.

(Diagram is illustrating the opinion of tea consumers in survey about purchase of tea)

From the survey and interview this research has identified that Tetley utilizes

behavioural segmentation because the tea consumers have different purchase

behaviour. Behavioural segmentation helped Tetley specially to design their products

for different consumers having various purchase behaviour. For instance Tetley

introduced 80 tea bag packet aimed for frequent buyers and 240 tea bag packet for

non frequent purchase customers. This product design has the capability to satisfy

customers who has different purchase behaviour and it will create a emotional

attachment to the brand.

Benefits

Tetley also segments their market in the basis of benefits. People in UK are more

concerned about their health so wide group of tea consumers are looking for the

benefits of drinking tea. Segmentation on the basis of benefits is really important to

the fast moving consumer goods industry to maintain a sustainable performance in the

market. This kind of segmentation helped Tetley to develop health benefits products

like green and earl gray tea. These products have the potential to satisfy consumers

who gives more preference on benefits in drinking tea. By adding this segment to the

existing segment there is a higher chance of increasing market share and sales.

Niche market

Niche marketing segmentation is an unavoidable factor in the tea business industry

due to the wide Varity in the consumption of tea according the personal behaviour

attitude. For example some people prefer decaf tea while some others love it. To

cover these variations and satisfy the needs of all customers in the segmented market

company have to follow niche segmentation.

TARGETING

Once the firm has identified market segment opportunities the company has to decide

how many and which ones to target. Tetley have different tea product in the market

and each product have different target market. Tetley kid’s tea is targeting kids market

and Tetley decaffeinated tea is mainly targeted on people who have problems to have

caffeine. For example Tetley decaffeinated tea is mainly targeted on pregnancy

women’s since they have to reduce the caffeine intake from their daily drink to avoid

chances of miscarriage and lower birth weight of baby. The Tetley, breakfast tea, earl

gray tea, peppermint tea, is targeting whole UK market.

Consumers In the tea market have different taste and preference. Each tea product is

offering different benefits and flavours, so the targeting helps company to concentrate

on a single segment with a particular product to satisfy their needs. Targeting is only

successful when the product features or benefits match with customers wants. Tetley

have different products in the market. Since they are doing mass targeting for all tea it

is difficult for them to manage different taste and preference of the consumers. This

research has identified targeting the customer is vital for satisfying the customers in

the tea market. The right targeting can deliver high potential to generate the sales and

profitability. The identification of right target market is one of the main reasons

behind marketing success of Tetley.

Picture of single segment concentration

The above picture shows the target market of the Tetley kids tea, Tetley is focusing on

only one segment rather than whole market this help the company to satisfy the needs

of the consumers in this segment.

(Picture of mass marketing)

The above picture is shows the mass targeting of Tetley tea this mass targeting which

help to increase the market share and overall sales of the product

POSITIONING

Positioning is an act of designing company offering and image to occupy a distinctive

place in the minds of target market. The main aim is to develop a brand identity

among customers to maximise the competitive benefits in the firm. If company is

positioned the product incorrectly the market will be confused. According to manager

A of Tetley tea, they have positioned their brand in medium segment in terms of

quality and price. Pride and Ferrell (2010) says that Product positioning is an activity

mainly concentrates on creating and maintaining a several concept about the product

in the target market and in the customers mind.

For proving this Tetley statement about their product positioning I have done the a

survey with 120 customers of the Tetley and I have divided this 120 customers into

three groups like high income people ,medium level income and lower level income

people, and each group consist 40 customers. The survey includes question like,

how do you rate the Tetley product quality and how do you rate the price of Tetley

products. For both of these questions i have given three options for their answers like

medium, higher, low. Answers from the three groups have similarities and differences

when considering one group to other. In the case of high level income customers 30

has replayed out of 40 people .The 33 medium income customers has replayed out of

40 and the survey got 34 replay out of 40 from lower level income customers . The

most of the answers from the different groups are pointing that Tetley is a medium

quality brand and price of the tea is also medium.

(Graph is drawn based on the survey response)

Perceptual Map

(Source page number 282, contemporary marketing by David L. Kurtz, H.F.

Mackenzie, Kim Snow)

▄ local retail tea products ▄ PG tips

▄ Tetley tea ▄ Jing tea

The above perceptual map showing most common opinion about various tea brand in

UK market Blue colour represent Tetley tea. Most of the customers in the survey

answered that it is a medium brand in the terms of quality and brand. The consumer

perception about tea depends up on the value of products. Tetley has done a

successful positioning of products because they want to position their product in

middle segment in which customers have the same perception about Tetley tea. If

customers have a different perception about the product rather than medium quality

and price, it means the firm has made an ineffective communication. This research

find out Tetley tea had made a strong positioning with out any confusion in the

market and this had made a success in Tetley’s positioning strategy.

MARKETING STRATEGY IMPLIMENTATION

According to manager A of Tetley, company is implementing the marketing strategy through

marketing mix which includes price, product, promotion and place (distribution). The

implementation is practically done with market and to the customers. The right way of

implementing marketing strategy is crucial to the Tetley because if some thing goes wrong in

these four elements it will directly affect company’s sales and its brand name. In UK market,

Tetley has implemented the marketing mix perfectly without making any confusion in the

market. This perfect implementation of marketing mix helps the company to become a market

leader in the tea market. O.C. Ferrell, Michael D. Hartline (2008) point outs that the

firm implement marketing strategy by doing marketing mix which mainly focuses on

product, price, distribution promotion. In this chapter each element of marketing mix

has analysed separately that are following.

Marketing mix of Tetley

PRODUCT STRATEGY

PRICE

PLACE PROMOTION

PRODUCT

Tetley manager A said that product is one of the key element of implementing

Tetley’s marketing strategy and with out this product the company cannot achieve the

objectives. Product delivers value in the name of company and it satisfies consumers’

needs and wants in addition to the development of a better brand identity The

company have product depth in UK market it includes Tetley Assam, African, Ceylon

tea, earl gray tea, Tetley red bush tea , Tetley decaf ,Tetley extra strong, Tetley

peppermint tea, Tetley tea for soya and Tetley kids tea. Different varieties of Tetley

tea are focusing different segment and some of the Tetley is targeting the whole

segment in the UK market.

Product development strategy

The manager A of Tetley said that the new product development is critical in framing

strategies for Tetley. Tetley normally plans the product development by introducing

new product to the market and through acquisitions, for instance Tetley has recently

developed kids’ tea and tea for soya to the UK market. In spite of this Tetley has

acquired Good Earth, these both are the part of Tetley product development. By

adding theses new developed products to existing product will increase sales and

market share in UK market. The most difficult and riskiest part in marketing is

developing a new product and firms introduce these developments of new products

through innovations, product improvement and acquisition of new companies. David

J Rachman (1974)

Tetley marketing research for developing new product is done mainly through online

internal employees and through field research. These researches are mainly

outsourced to other research companies. The Market research includes experimental

methods like delivering sample tea packets to the consumers free to collect feedback.

To make this process effective Tetley produces sample tea bags and give to the public

and employees to bring up the feedback from people about the samples which help

them to identify the likes and dislike of customer. Company is looking into the

product life cycle and sales analysis to frame out product developing strategy. Tetley

tea product life cycle and sales analysis is illustrated with the help of following

diagrams

Product life cycle of Tetley tea

Tetley Tea Product Maturity Launch Growth stage of product Sales

Time

The firms make use of product life cycle for analysing the life time of a particular

product in the market. Tetley tea PLC is also help full for looking the product growth

and maturity. Tetley tea have a infinity life because which we can easily identify from

Tetley’s tea business from last 100 years of history of tea business. Tetley sells the

same product from the beginning of the company that is illustrated in above diagram.

Sales Analysis

Picture 1

One time purchased product

Sales

Time

Picture 2

Infrequently purchased product

Sales replacement sales

Time

Picture 3

Frequently purchased product Sales repeat purchase sale

Time

The above three picture represents the sales analysis of Tetley. Marketers use the sales

analysis at the time of new product development for identifying sales of new product.

For Tetley, the forecasting of sales is critical because it enables them to frame solid

future strategies which can satisfy the growing needs of the customers. The sales

illustrated in picture 3 consumers are doing repeat purchase. In survey most of the

customers answered that they do the repeat purchase of the tea so it is important to

analyse sales as wells as product growth time in the market.

For proving manager A statement about their product strategy this research has

conducted questionnaire survey with 120 tea customers. This 120 tea customers is

classified into three groups A,B,C .The group A represent high level income tea

consumers, group B represent middle level income tea consumers and C group

includes lower level income consumers .For all group of survey questions , answer

points like Tetley is delivering value and satisfying consumer needs.

For this question i have given yes or no options for their replay. Most of the

customers from different groups are agreeing that Tetley tea is delivering value and

satisfying the needs. Another question like” what is your motive for buying Tetley tea

“and i have given multiple choice options. In this most of the customers are agreeing

that quality is one of the main factors for buying Tetley tea. This response is

illustrated with the help of following graph.

In the current business environment consumers are more concerned about value of

product rather than other things. It is important to the tea companies to deliver value

for managing the customers. The product communicates to the consumers about the

brand in terms of quality and it will determine the position of the brand in the

consumers mind. Product management strategy of the Tetley had made a success in

the UK market that is proved in the survey that most of the tea consumers are

agreeing that Tetley tea is delivering value and this product management has

increased the brand value of the Tetley tea. The UK tea market is more competitive

than other market so the companies are fighting to become a market leader.

In UK market the companies need to be more innovative and want to focus on new

product development. The firm want to develop valuable products rather than just

normal product. And this new product development strategy has proved success in the

market many times for many companies. For example apple I phone and Tetley kid’s

tea. And adding new product to the company will generate the revenue and market

share. So the product development and product management is important to Tetley to

this new product development strategy helped them to achieve sustained performance

in market.

PRICING STRATEGY

According to the manager A, pricing of the Tetley tea is crucial to maintain company

performance. Tetley is currently utilizing the mixed approach in the UK market.

These approaches include looking the overall cost of production and direct

competitors price. In other international market it various depending up on the market

situation. In the overall cost the Tetley will take account of labour cost, transportation,

marketing cost and the international market price of the tea. The continuous

fluctuations of tea price in the global market will not affect Tetley because the

company is getting the tea from their own plant. The company is spending a lot of

money for promoting their brand which is main cost factor for the Tetley facing in

their pricing strategy. For example in 2010 company has spend 8 million pounds for

advertising their tea products. The main internal factor that Tetley is considering

while implementing the pricing strategy is the promotion of brand. On the other hand

company compares the competitor’s price in the UK market. Tetley looks into the

pricing of PG Tips and Twinning’s . These companies are the direct competitor of the

Tetley in UK market. Information given by the managers are supporting with V

Kasturi Rangan, Benson P. Rhapiro, Rowland T. Moriarthy, J R (1995). Statements

they argued is that, the companies will consider the internal cost of production and

competitor prices for pricing strategies.

Depends on the market situation Tetley is adopting different marketing strategies for

various segment in market. For instance, the UK market Tetley has positioned the

price of Tetley Assam, Darjeeling and decaf tea just above of their direct

Competitor price: It is a premium pricing strategy while comparing to other

competitors. Since Tetley have products have 33 % of market share in UK and sales

of these segment brought Tetley to become the market leader in UK. But on the other

hand Tetley is doing market penetration strategy for herbal tea because currently this

herbal tea has only 10 % of market share in the UK. Tetley want to increase the

market share so they positioned herbal tea in a low price for attacking the head of

their direct competitors.

Attacking pricing strategy of Tetley herbal tea

The above picture shows the attracting pricing strategy of Tetley herbal tea to the head of

direct competitors like PG tips and twinning’s for increasing the sale in UK market

PRICE LIST OF VARIOUS TEA BRAND IN UK

PRODUCTS PRICE OFTETLEY TEA UK

PRICE OF PG TIPS UK

PRICE OF TWINGINGS UK

1NORMAL TEA(ASSAM, DARJILING) 91.6 PENCE

(100 GRAM )

87 PENCE(100 GRAM )

79.9 PENCE (100 GRAM )

2DECAF TEA 81 PENCE

(100 GRAM )60 PENCE(100 GRAM )

13.6 PENCE(100 GRAM )

3 EXTRA STRONG 45.2 PENCE(100 GRAM )

80 PENCE(100 GRAM )

82 PENCE(100 GRAM )

4 GREEN TEA 1.50 PENCE(100 GRAM )

2.31 PENCE(100 GRAM )

1.88 PENCE(100 GRAM )

The above box shows the price of the Tetley tea in the UK market and their direct

competitor’s price. This is done for clarifying the manager statement about their various

pricing strategy for different product .Competitor pricing is collected from different retail

store. if we compare the price of Tetley Assam tea as per the above information with

competitors Assam tea price ,Tetley positioned their price just above the others in market.

But in the case of Tetley herbal tea they have positioned the price lower than their

competitor. The theory strongly supports that Tetley pricing strategy is well organised and

enables Tetley to became a market leader.

In the survey i have given one question about evaluating pricing of Tetley .The question was

“how do you rate the Tetley product price?”, and for answer i have given three options like

low, medium, high. The survey has conducted with 120 people and 97 have replayed and

most of the answers pointed that Tetley’s pricing is medium. The answers from the three

groups are illustrated with the help of a graph that is follows;

(Graph is illustrating consumers’ answers in survey about pricing of Tetley tea)

This research found that about pricing, people have different perception. One of the main

reasons for this common answer “medium pricing” can be the comparison of price with other

brands in the market.

Pricing of the tea products is critical to the companies in the UK market because these pricing

strategies have the potential to increase sales as well as reducing the sales in some occasions.

Once the brand has a strong presence in the market then the company can increase price, it

has proved in the UK market for example SONY computers. Tetley is maintaining the price

of Assam, Darjeeling, tea just above of the competitors because Tetley is the market leader

with 33 percentage of market share in UK market. They don’t need to cut down the price. If

they cut down the price there is a chance of misunderstanding about quality. So these pricing

strategies have the power to maintain brand image. But on the other side in the UK market

Tetley herbal have only 10 percentage market share. They are implementing price penetration

strategies to get maximum potential to increase the sales and also to have capacity bring the

customers from the competitors. So this pricing has made a major role in making Tetley the

market leader.

PROMOTIONAL STRATEGY

According to manager A, promotion is one of the key strategies for Tetley tea. Tetley has

spent 14 million pounds’ in 2010 for promoting their products. Tetley implement

promotional strategy through a promotional mix and it consists of advertising , public

relation, sales promotion ,and direct marketing. Tetley is making use various modes of

channels like online , TV, news paper ,bill board and store . This effective promotion

strategy helped Tetley to gain market share from PG tips. This strategic promotion activity

has increased Tetley market share to 33.8 % while comparing the PG tips 32.1% and

twinning’s 26.6% in the UK market. Tetley do promotional strategy to push the product in

market and to communicate with market about how to make a perfect cuppa and its benefits.

According to David .J. Rachman (1974), state that the firms do the promotion for

communicating to the public about their product and company. Implementation of

promotional strategy through advertising, personal selling, sales promotion direct marketing,

store display and through public relations.

Communication mix of Tetley UK

Picture of communication mix

COMMUNICATIONMIX OF TETLEY

ADVERTISING SALES

PROMOTION DIRECT

MARKETINGPUBLIC

RELATION

Advertising

Manager A point out that Tetley is doing advertisements by using different modes like TV,

online, news paper, billboard, etc .The company has spend 9 million for advertisements .

Tetley has outsourced the advertising creation task to Dare which is a famous advertising

agency in UK. Internet is key advertising tool of Tetley, for example Tetley tea folks are

popular in face book, and in YouTube.

Sales promotion

The manager A of Tetley says that, they do the sales promotion to boost business capabilities;

which is a short term strategy for the Tetley. Currently Tetley is doing various sales

promotion like 2 for 1 tickets to Alton towers, chance for win a holiday to different

designations ,win a T shirt ,and Tetley discount coupons . In 2010 Tetley has introduced

coupons worth 3 million for targeting 8million customers and for pushing the herbal teas in

UK market.

Direct marketing

Manager A stressed that Tetley is doing direct marketing using internet as a part of direct

marketing. Tetley send promotions direct to the customers via e mail.

Public relation

Manager A said that public relation is very important to the Tetley tea because now a day’s

people are more concerned about health and social responsibility. Tetley is promoting healthy

life style and the benefits of taking a cup of tea .Tetley joined with British heart foundation

for targeting 1.6 million people to raise fund for helping heart week people and they have a

rain forest alliance to protect environment.

The graph shows communication cost Tetley UK in 2010

For evaluating the effectiveness of promotional strategy i have given some question about

promotions of Tetley in the questionnaire. From that most of the customers have received and

seen the Tetley’s promotions along with this, 55 percent of the consumers answered that

Tetley’s promotion motivates the consumer to buy their products.

(This diagram shows opinion of the tea consumers about Tetley tea)

The above diagram shows 55 percentages of the consumers are motivated by the Tetley

promotion to buy their products from this we can infer that Tetley’s promotional mix strategy

is going well in the market and it also indicates that half of the business is generated through

promotion. By doing this effective promotional mix the firms can increase market share and

they can cultivate an emotional attachment towards the brand. it has proved in fast moving

consumer sector for example nestle coffee.

PLACE OR DISTRIBUTION STRATEGY

According to manager A Tetley have an efficient and effective distribution channel all over

UK. The main distribution is done through retailers it includes UK office direct, Tesco,

Sainsbury, Asda etc. Company is following a vertical distribution system. Tetley have an

alternative online distribution. This channel serves mainly through Tetley website. Company

have a strong and long term relationship with channels. Tetley encourages motivation

relationship by offering discounts and offers to their channels. For example Tetley will give

promotional merchandise product like cups , T shirt , point of sale displays , win a chance for

Jaguar and company will give discount vouchers which can be use in different store.

Channels of distribution

The above picture shows various channels of distribution in Tetley UK .The Company have

main three distributions channel and it is really important to fast moving consumer goods

market. if the company is keeping one distribution channel, the company cannot make sure

the availability of product in the market. This is because geographically the country is big and

if the company is keeping only one distribution channel the distributers have more barging

power .So it important for the companies like Tetley to keep multi channel distribution

system for delivering product effectively in the UK market.

Vertical distribution system of Tetley

Tetley is mainly following vertical distribution system that is illustrated with help of the

above diagram .This vertical distribution is the most cost efficient and effective for delivering

goods. Through this channel system the company can increase the sales since in UK retailers

have high potential for generating sales.

For placing the tea in the retail store Tetley have certain rules that are displayed in the

following box

CONTROLLING THE MARKETING STRATEGY

Tetley control the marketing strategy by evaluating the performance in terms of sales and

market share .But mainly depends up on Tetley’s marketing objectives .Company have

different marketing strategies once it is implemented they will control depends on the

performance of the marketing strategy. It is important that Tetley need to control the

marketing strategy because the company has spend a lot of cost for developing and

implementing the strategy. So they should evaluate the performance in the market whether it

is bringing any potential or not. This marketing strategy controls and helps Tetley to choose

an alternative, if the implemented marketing strategy is not doing well in the market . So this

research is strongly supporting the way that Tetley do controlling and strongly recommending

that in the competitive business environment.

Barriers for implementing Tetley marketing strategy

The manager A says that in some cases Tetley has faced some problems in implementing the

marketing strategy For example for implementing the promotional coupons because the major

problem in the coupons Tetley has is the store is remedying the coupons for other products

not for the Tetley’s product. And other major problem is that Tetley has faced the regulation

of advertising standard authority for translating the health benefits. Tetley has recently

withdrawn the advert of green tea from the UK market and restructured it with a new face. It

was a barrier to Tetley for implementing the advertisement strategy. These barriers can create

a lot of cost problems to the company because in the UK tea manufacturing companies are

paying huge amount for advertising and promotions. So this kind of barriers will reduce the

profit and chance for failing marketing strategy. It is important to the companies like Tetley to

identify these barriers before implementing the marketing strategy so that the company can

reduce the cost.