Corporate Profile
Corporate Profile
To become one of the leading tea companies operating in Pakistan
and Asia (future goal); it is our philosophy to reward our
customers with products at outstanding value with uncompromising
quality.Our product offering includes black tea; mainly from
Indonesia, Vietnam, China and other parts of Asian Countries. Other
business interest includes softcommodity trading, e.g. coffee,
spices, oil-seed and pepper.
Our core business activities include tea blending, packing of
consumer packs, design of tea flavorings and bulk tea supply.
Our close working relation and involvement in the process of tea
growing has provided us an advantage that is much sought after by
our competition. Freshness and Quality is going to be our key to
success and is a reputation that we are proud of.
MARKETING PROBLEM
The marketing problem for Pearl Tea company is to: -
How do consumer perceives other brands available in the
market
The main points in the research are:
The tea buying factor-consumer insight, taste, etc
Price sensitivity
Old brand, young brand
Who is buying, who is thinking
Switchers, retainers, loyal- what do we call our consumers
RESEARCH PROBLEM
The research problem of Pearl Tea company is to: -
What Sip Tea can offer or provide that others do not offer or
provide
RESEARCH DESIGN:
The research design we are pursuing will deal with Conclusive
Research and since consumer perception is a behavioral quality we
will go for descriptive research in the research design. The
research will help us evaluate the alternate solutions that the
consumer perception results bear for us and ultimately help in
formulating a clear direction for the marketing plan of Sip
Tea.
The tools that we will use will mainly be interviews (All tea
drinkers) and questionnaires to help us measure consumer
perceptions and attitudes towards the different brands of tea
available in the market.
SAMPLING METHOD:
Element:
Tea preference/perception of consumers.
Sampling Unit: All tea drinkers (single stage sampling)
Sampling Frame: All tea drinkers since there are no distinct
Sampling Units.
Sample Size: 100 individualsSAMPLING PROCEDURE:
Our sampling procedure will be NON-PROBABILITY based on
JUDGEMENT and CONVENIENCE in order to choose our elements for
research.
The Convenience element deals with the accessibility of areas
with respect to the available resources at hand. Therefore we will
be covering selected areas like Clifton, Defense, Gulshan,
Nazimabad, and S.M.C.H.S when distributing questionnaires.
The element of Judgment comes because of the fact that we are
only looking for people who drinks tea and every one else are not
considered. Because the people we want to survey are all tea
drinkers and hence it would be a waste to approach people who do
not drink tea and drink other beverages.
DATA COLLECTION METHOD AND TOOLS
Data collection tools that we will use in our research will be
interviews (with people related to tea industries) and
questionnaires. So our primary research will basically be a
resultant of the information gathered from the above-mentioned
tools. Our primary research will aim at gaining first hand
information about the consumer attitudes towards various brands
available in the market.
As part of our secondary research, we also intend to search the
Internet, marketing books, case studies and newspaper articles in
order to find more information about the tea industries and its
current activities etc.
QUESTIONNAIRES
We had designed questionnaires with the help of which we
conducted surveys among our selected sample space. The
questionnaire mainly focuses on our research issue and contains
questions that guide us about consumer preference and perception of
Tea.
The questionnaire that we have designed to help us in our
research is as follows:
1. Do you drink Tea?
Yes
No
2. Which brand you are currently using?
Tapal
Lipton
Supreme
Open bag tea
Any other brand
3. Do you use any other brand beside the brand chosen in
Question# 2?
Yes Please specify the brand.
No
4. If yes in Question# 3, then how frequently do you switch your
tea?
Monthly
Quarterly
Semi annually
Annually
Others
5. What are the factors that you look for before buying?
Strong taste
Strong smell / Aroma
Freshness
Color
Product name
Price
Any other thing
6. Who makes purchase decision in your house?
Childrens
Females
Males
7. Who purchases tea in your house?
Childrens
Females
Males
8. How many cups does your family consume?
1 cup2 cup3 cup4 cupmore
Children------ ------ ------ ------ ------ Elders ------ ------
------ ------ ------
9. When do you have tea?
Breakfast
Lunch
Evening
After Dinner
10. Where do you live in Karachi?
Clifton
Defence
Shahra-e-Faisal
Gulshan-e-Iqbal
Nazimabad
Other (Please specify) __________________________________11.
What is your gender?
Male
Female
12. What is your age?
Under 18 years
18 25 years
25 30 years
30 40 years
Above 40 years
13. What is your household income?
Below Rs 10,000/-
Rs 10,000/- to Rs 20,000/-
Rs 20,000/- to Rs 30,000/-
Above Rs 30,000/-
SIGNIFICANCE AND RESTRAINTS OF THE STUDY
Today the market of tea is highly competitive and it is growing
with the demand and more new entries in this industry are taking
place. Tea is used by all consumers from 13 and above age.
Since the problem is already defined, the study will deal with
Conclusive research mostly. Also the sample group that the study
will also be small in size and will deal with the consumers in
Karachi only and that too in selected areas because a nation wide
first hand study would be very difficult to conduct at this level
with our limited resources.
CONCLUSION
From our research we have concluded that:
1. In most of the areas of Karachi, Tapal has a higher market
share then Lipton and other form of teas.
2. The reason for having a higher market share is consumer
preferences towards strong taste (21.9), freshness (21.9), price
(24.6) and brand name (24.6) which is provided by Tapal and Lipton
lacks in it.
3. Most of the time decision is made by males (65.2) and then by
females (26.1). but we should not forget about children who also
contribute to decision making (8.7)
4. Tea is purchased by females (51.7) most of the time and then
by males (48.3)
5. It is very interesting to know that every member of the
family consumes tea irrespective of age. Childrens consume 1 cup
daily in breakfast and elders consume 2 to 3 cups daily on
average.
6. This industry is growing at 8% per annum.
7. Health consciousness through out the world has also increased
the usage of tea and decreased the usage of other beverages such as
soda.
8. We can target out product towards the strong taste, freshness
and quality at economical price.
9. We should target our adds towards males and females both as
they both contribute almost the same to the decision making of the
brands and then purchasing of the brands.
TELE SHEET
TABULATION OF QUESTIONS
14. Do you drink Tea?
Q#1Frequency%
Yes100100%
No00%
100100%
15. Which brand you are currently using?
Q#2Frequency%
Tapal6868%
Lipton5656%
Supreme44%
Open Bag3232%
Others00%
100100%
16. Do you use any other brand beside the brand chosen in
Question# 2?
Q#3Frequency%
Yes00%
No100100%
100100%
5. What are the factors that you look for before buying?
Q#5Frequency%
Strong taste8021.9%
Aroma205.5%
Freshness8021.9%
Color51.5%
Product name9024.6%
Price9024.6%
Others00%
365100%
6. Who makes purchase decision in your house?
Q#6Frequency%
Childrens108.7%
Females3026.1%
males7565.2%
115100%
7. Who purchases tea in your house?
Q#7Frequency%
Childrens00%
Females6051.7%
males5648.3%
116100%
8. How many cups does your family consume?
Q#8Frequency%
Childrens10050%
Elders10050%
200100%
9. When do you have tea?
Q#9Frequency%
Breakfast10054.7%
Lunch158.2%
Evening5027.3%
After dinner189.8%
183100%
10. Where do you live in Karachi?
Q#10Frequency%
Clifton3232%
Defence4444%
Sh-e-faisal66%
Gulshan1010%
Nazimabad77%
Others11%
100100%
11. What is your gender?
Q#11Frequency%
Male9384.5%
Female1715.5%
110100%
12. What is your age?
Q#12Frequency%
Under 18 years00%
18 25 years88%
25 30 years9090%
30 40 years11%
Above 40 years11%
100100%
13. What is your household income?
Q#13Frequency%
Below Rs 1000000%
Rs 10 K 20 K9898%
Rs 20 K 30 K00%
Above Rs 30 k22%
100100%
GAP Analysis
Pearl Limited saw the need for fresh quality and good taste as
major ingredients missing in the tea market. Usually competitors
claimed that their product was fresh and had good taste and aroma.
Upon conducting an analysis Sip Tea found out that consumers felt
that certain brands just claimed that they were quality conscious
but were actually not. Seeing the potential to explore and compete
with the major brands in this market Pearl Limited did a
comprehensive analysis to actually identify the potentials of this
need. With the tea market growing at a high rate Pearl Limited
decided to bring a different product in the market which would be
known as Sip Tea. Sip Tea and the management of Sip Tea saw that
all this could only be achieved if they played their cards
right.
Marketing Objective
Our marketing objective underlines our urge for becoming a
market leader in the tea industry by providing the best quality
Kenyan tea to our consumers. It is also our utmost priority to give
the consumers tea at economical price. This will only be possible
by maintaining the efficiency of the tea production unit by
continuous research and development, having deployed latest
technology, keeping in view customers needs and a flawless
distribution system.
Marketing Strategy
It is our intention to attain at least 5% of the Karachi tea
market share within the first year of operations. We do not propose
to this by direct frontal assault on the market. We intend to
undertake a test market; it is because of the possibility of being
subjected to intensive grilling that we plan to keep low profile
for the time being and not take on competition directly. Our
financial restraints do not commit us to target large market,
forcing us to settle for the niche. We believe that by keeping our
margin low we can attain the desire market share. We have all the
credentials to slowly and quietly make our way and join the
league.
Strategic Situation
Pakistan annual tea import bill has swelled to US$220 Million
(approx.Rs.12.76 Billion), a massive figure viewed in the back-drop
of merge Foreign exchange reserves of US$ 5.2 Billion and matching
exports of some primary commodities to compensate for the trade
losses. Many may not readily believe that the annual consumption
figure of tea has already touched the high mark of 100,000 tons and
market sales projection are that an annual total could rise to
500,000 tons, during the next decade based on the current rate of
increase.
The recent initiative taken by our tea marketing company is to
popularize the local cultivation of tea in the Sindh province were,
therefore widely welcomed. Next few years will show how the local
production of the commodity, irrespective of its quality and taste,
will change the habits of the local consumers to save the foreign
exchange reserves.
Bulk of the tea is imported from half a dozen countries, notably
Kenya, Bangladesh, India, Nepal and some other countries but mostly
in line with catering to the local taste.
Production of Tea
YearNo. of Reporting FactoriesProduction (tons)
1995-1996459,399
1996-1997560,673
1997-1998461,119
1998-1999559,277
1999-2000554,970
All tea is imported in Pakistan and there is no sign that
Pakistan will be self-sufficient in producing tea in near future.
This is the second largest food item to be imported after edible.
The country overall expenditure is over Rs.1 billion in importing
tea. Pakistan has imported 98,649 tons of tea worth Rs.9,818
Million during the year 1997-1998 as compared to US$222.9 Million
in the year 1998-1999. The Government has reduced the import duty
on tea from 45%-25%.
Imports of Tea
(Rs. In Million)
YearImportsPercentage Share
1990-19913,7292.2
1991-19924,3061.9
1992-19935,3862.1
1993-19945,6192.2
1994-19955,7941.8
1995-19965,7071.4
1996-19975,2181.4
1997-19989,8182.2
1998-199911,1502.4
July March
1998-19998,725-
1999-20008,299-
Purchase Pattern & Decision Makers
10% Children are Decision makers to convince parents to purchase
tea.
30% Female Decision makers; 60% Female purchase tea.
75% Male Decision makers; 56% Males purchase tea.
Market growth of Tea Consumption is around 8.00%
Market Characteristics
According to the survey conducted by Pearl Limited, an average
household everyday consumes 2 cups of tea and each child 1 cup. It
is used as a relaxant by 78% and as a stimulant by 76%. Over all
speaking 85% of the people polled have a habit of drinking tea,
which includes adults both male and female. Almost everyone has it
at breakfast, 50% take it in the evening, 18% have it between
breakfast and lunch and 18% have it after dinner.
First of all Tea is a staple item, at least in the context of
Pakistan. It is a part of everyones intake.
Secondly it is a low involvement product.
It is a convenience product. It is inexpensive, easily available
and is frequently used.
Market Segment
Our prime market ranges from the middle to the upper middle
income group residing in Karachi. The taste preference of this
group is partially distinct from other parts of Sindh, where dust
tea is preferred to leaf tea due to its strong taste. The main
difference here is the acceptance of tealeaf. Tea is consumed both
at home and work place. Housewives are the main purchases for
domestic use.
Our Competitors and Their Analysis
We must be aware of what our competitors are up to, or if we
simply follow our own marketing/ advertising strategies in a
vacuum, we are unlikely to survive for long. Therefore our most
important guideline while formulating our plan and strategies would
be to know as follows:
Who are our competitors?
What are their products?
Who do they target upon?
What needs do they cater to?
What marketing /advertising strategies do they use?
What are their strengths and weaknesses?
On important need for answering these questions is the growing
threat to tea importers by illegal smuggling of tea products. Tea
trade (unbranded and open) is now facing threats from the large
scale smuggling through afghan transit containers. It is available
in the open market commonly called duty free, and hence it becomes
impossible to compete with these smuggled quantities.
Competitive AnalysisThere exists an overlap of target market for
various brands and quality of tea. Individual brand shares have
fluctuated in the past largely as a result of the introduction of
successful new brands and the re-launch of established brands, we
are against a very large and experienced giant Lipton Yellow label
and Tapal as a very entrenched member of a big league. Other
established members our Kohinoor and Isphani.
Tapal is believed to be Karachi market leader. Its certainly has
out sold Lipton and Supreme in respect of dust and mixture. Its
success in leaf has also being quite encouraging.
Looking at this scenario we find ourselves in very trying
circumstances. Endeavors to carve at our share can mean retaliation
the big three have shown what they are capable of doing to
competitors. The key to successful ads is consumer insight that can
only be achieved if you understand your consumers through direct
consumer contact market research etc. After all such handwork and
labor one may actually be able to find out what they want and
thereby giving it to them. That is why the market share of
'Supreme' augments when they show a family enjoying special moments
over a cup of tea, and a globally acknowledged & popular brand
like 'Lipton' starts losing its share in a market which just cant
relate to Hadiqa and Ali Haider getting kicks out of sipping on
tea. Lipton even had the idea to sniff out Tapal through its
Karachi attack plan (related above), during the launch of Tapal
Special but failed.
Our Future Actions
Presently, we are just targeting middle and upper middle in
Karachi. We plan to move to lower class as well. Later on, if all
goes well we plan to go to different regions other than Karachi,
such as Lahore, Islamabad, NWFP, Punjab, etc.
At present we are manufacturing 400gms pack and 200gms pack, we
hope to pack tea in different sizes as well. Packet teas are very
popular in developing countries while tea bags have increasingly
replaced packet teas in developed ones. Other different sizes will
be sachets, pouches, cartons, tins, teabags, etc.
Flavored Tea: A well-blended herbal infusion reveals a full
spectrum of flavors with high, middle and top notes. No single
flavor should overwhelm the others. With practice and fair analysis
of the tea consumption market, we as a company may be able to
distinguish three or four flavor notes green, flowery, fruity,
spicy, etc. This will be our next venture once we build our name in
the black tea industry.
As we plan to cater even the lower class we will be launching
whole leaf (green tea), fannings tea and dust tea.
Our Competitive Advantage
Our competitive advantage is Price. We will be targeting the
market with lower price as compared to other tea brands present in
the market. Apart from price we will not compromise on quality,
thus in simple words:
Good Quality at Economical Price
Market Segmentation & Selection of Target Market
In the first phase of its launch the product Sip Tea is to
penetrate in the Karachi market that comprises of 13,000,000
people. After doing a comprehensive research and a complete
analysis of the potential market for tea the usage pattern and the
presence of competitors, our company, Pearl Limited selected a
target market, which has following characteristics and
features.
Demographics
Age:13 years and above
Income:Rs.10,000 and above
Gender:Male and Female
People who look for ecstasy and seek relaxation from mental and
physical stress.
People who are trend following, energetic and outgoing also
comes in our target.
As the population distribution and usage pattern shows that this
product is mainly consumed in the upper class, upper middle and
middle-middle class. So Sip Tea will also penetrate in this
particular segment with a different marketing program.
According to a survey Karachi has 24,000 retail outlets where
different consumer items are sold. Out of these we are planning to
target 7,000 8,000 retail outlets in the major areas of city where
our target market lies, which are:
DistrictsAreas
District MalirMalir Cantt.
District SouthClifton, Defence and retail outlets at hotels
District WestLalazar Colony, etc.
District CentralNorth Nazimabad, some areas of Nazimabad &
F.B. Area
District EastP.E.C.H.S., S.M.C.H.S., K.D.A. Scheme No.1,
Bahadurabad, Mohd. Ali Society, D.M.C.H.S., Al-Hilal Society,
Gulistan-e-Jauhar and Gulshan-e-Iqbal
Expected Growth for Sip Tea
The short-term plan of the company is to create awareness among
the people who perceive tea being harmful for their health. In the
long run company wants to go into penetration process. In the first
year of its launch the company wants to achieve 5% of the total
market by massive promotional and advertising activities.
Consequently, we are also targeting to achieve 7% - 8% in the next
year and at least 25% in the fifth year of its launch.
Description of End-User
Consumers have traditionally associated tea with refreshment,
revival and relaxation of body and mind. These are the three famous
Rs which are firmly linked with tea, not only as a product but also
as a philosophy of living.
Tea drinking continues to constitute an important position in
consumers daily consumed beverages. It appears to satisfy
physiological, social and psychological levels of consumers.
Consumers seek psychological benefits with payoff in terms of
refreshed feeling. It kills boredom and monotony and contributes
towards feeling of calmness and relaxation.
Consumers justify the consumption of tea to release fatigue and
lethargy to recharge them. It is of interest to note the role of
varying with different parts of the day and situations.
Morning tea serves as a wake-up signal to start of the day.
Mid-day tea serves differently for males and housewives. A man
may take his cup of tea to beat the heat, kill the monotony or as a
means of social interaction of his workplace. On the other hand
this mid-day tea for a housewife is a payoff / reward for attending
her necessary part of morning chores. She slowly sips her tea to
enjoy in these private moments when she is not rushed. She would
look forward for the company of her neighbor / friend to enhance
her pleasurable moment.
Evening tea is related with relieving day long tension and
fatigue. It brings about a light and jovial mood.
Tea serves as a sign of hospitality as it is the most desired
yet affordable beverage. A good cup of tea is described as that
which has the aroma and good color. One of the main concepts behind
Sip Teas brand is that of taste and aroma, both known to be
strongly inter-related. There is no concept of taste without the
aroma. Most consumers cook their tea and leave it to simmer. It is
believed that the tea liquor is left on stove to simmer; it gives
out the full color and strength enhancing the aroma. Consumers do
not appear to be interested in describing the tea in its dry form.
They tend to focus on the end cup and end benefits.
Positioning Strategy
Positioning Statement
For the privileged tea drinkers, Sip Tea is right leaf (danedar)
tea that has superior taste because it uses the best tea
leaves.
Objectives for Market Target
Sales Objectives
To make our distribution process quick, smooth, fast and
efficient. Meaning that our product is available at all times in
the market.
Defining and outlining our distributors and retailers along with
our Sales co-ordination department to achieve our proper
salesmanship with our customers.
By offering special schemes, incentives and trade deals to our
retailers we hope to achieve the objectives set by the marketing
department.
Capturing shelf space as much as possible by proper dealer and
distributor co-ordination.
Short-Term Objectives
Building brand awareness in the minds of the consumers.
By proper, effective and heavy media advertising this will
eventually help us to overcome our competitors promotional
efforts.
To achieve 5% market share.
Long Term Objectives
To build line acceptance.
To target other regions like Quetta, Lahore, Islamabad, etc. in
the long run.
To acquire at least 25% of the market share by the year
2008.
Trying to squeeze competitors market share.
To develop and up-grade our Research & Development
department, so that we can come up with better quality and more
improvised products.
To achieve low-cost distribution by selling their products
through independent distributors and retail stores.
To achieve low-cost production through investment in automated
manufacturing activities.
(i) Product Description
The name of the product Sip Tea which means to have tea in less
quantity with each sip. By this name we plan to convey a message to
our customers i.e. they should Sip it at least once to see the
difference by comparing our brand with other tea brands in the
market. As said before that one of our competitive edge is to hit
the market with the quality, so we will try to do as we have
committed to our clientele.
What Does Sip Tea Contain?
Sip tea comprises of three main components: caffeine,
polyphenols and essential oils (also called aromatic or volatile
oils). Additional elements are introduced during Sip tea
processing:
Caffeine: When caffeine was first extracted from tea, it was
thought to be a different substance and was called theine. It is
now known that they are one and the same. It is the caffeine in tea
which gives it its reputation as a banisher of fatigue and a lifter
of spirits. Caffeine stimulates the central nervous system,
promotes blood circulation and stimulates the kidneys to produce
more urine. All types of tea (green, oolong and black) contain
about 40 mg of caffeine per serving, depending upon blend and
strength of brew, which is a third to a half as much as coffee.
Polyphenols: Once incorrectly referred to as tannins,
polyphenols are responsible for the color, briskness and flavor of
the teas. They account for about one-third of the soluble materials
in leaves, but differ in type between teas. Groups of related
polyphenolic compounds are called Catechins. Green teas are high in
the simple Catechins which are only lightly colored. In black teas,
through fermentation, the catechins have formed into larger, more
complex structures called tea flavins. Polyphenols has been the
subject of recent medical research, which suggests that they may
have positive health benefits in the prevention of heart disease
and cancer.
Essential Oils: Essential oils contribute significantly to the
fragrance of tea and somewhat to its taste. They accumulate in the
leaf as it grows, and evaporates during and after manufacture.
Exposed to strong heat, they will disappear completely, which is
why they are also referred to as volatile oils.
Sip Teas Unique Selling Proposition
The foil-in-bag consists of a foil wrap inserted into a pouch.
Although it is chosen by many of our competitors as it offers some
advantages over the others. In that a wider range of packaging
materials can be sourced locally rather than imported and the inner
pack is hermetically sealed; this has been kept in mind with the
view to maintain the products freshness and taste at all times. The
cost is reasonable the pack is crushed proof and secondary
packaging can be straight forward.
Marketing Program Positioning Strategy
(i) Perception of Customer About Our Product
Pearl Limited plans to create a perfect brand image for our
product in the minds of the consumer. Pearl will be taking the idea
of Gladstone, the Victorian Prime Minister (1865) and what his
views were about tea:
If you are cold; tea will warm you
If you are too heated; it will cool you
If you are depressed; it will cheer you
If you are excited it will calm you.
Demographics
The demographic environment mainly provides a brand structure
for our company to place our product. In other words, it greatly
facilitates in the market positively for product and determining
its possible competitors.
Almost all social classes consume tea; age and sex factors do
not have a significant impact on tea. And it could be somewhat
broadly and easily categorized. Individuals belonging to all sexes,
ages varying from 12 to 70 years by and large consume tea.
Psychographics
There are people who belong to middle and upper middle-class.
Modern time-conscience, busy people who want to work hard and
believe in achieving their goals. Our Sip Tea will be source of
satisfaction, energy and refreshment on their busy lines.
(ii) Brands Positioning
In terms of Brand positioning we have translated this by
entering in to the fray through niche market. The type of market
chosen by us has entry points are areas of Karachi populated by our
target groups. We will try to penetrate in the targeted areas with
the help of tea stalls and institutions. The market has some to
accept the soft packs along with traditional hard packs. The credit
for the development of the soft pack goes to Tapal; whatever may be
the history the fact is that the soft pack has come to be accepted
as a regular type. It has taken positive color overtime. It is
economical without affecting the quality which means that there
marketer are perceived to be holding the interest of the company
dear to them. Hard packs on the other hand are perceived as
superior and hold a large share of the market. Keeping these facts
in mind and using them on our benefits.
Functional Positioning
We plan to capitalize on our main area that is through our brand
we hope to relax our consumer. We want the consumer to feel that
once he starts his day with Sip Tea he will actual
ly feel fresh, energetic and a totally new person! Sip Tea will
be a tea brand that does wonders for its consumer.
Experimental Positioning
Apart from the fact that Sip Tea will relax and revive an
individual, Sip Tea also plans to target the taste buds of its
consumers.
Sip Teas Astringency FactorA live, pungent sensation on the
tongue and gums. Astringency is not to be confused with bitterness,
which is undesirable.
Astringency gives tea its refreshing quality. Not many people
are familiar with the term Self-Drinking. This term will be applied
to Sip Tea that has good quality and flavor balance, and does not
need blending.
Sip Teas Positioning Concept
Sip Tea plans to position its tea brand in the following
categories:
1. Sip Teas Attributes
The attributes of any product are its tangible characteristics.
As far as Sip Tea is concerned it energizes, revitalizes, relaxes
and refreshes a persons mind. Be it as a morning cup or late in the
evening as a relaxant; Sip Tea hopes to care for its customers.
2. Sip Teas Price / Quality Complement
Sip Tea will be approaching the tea market as a cost-friendly
and a quality-conscious product. Sip Tea will be offering the
product at economical price and not compromising on quality
standards.
3. Use or Application
Sip Tea plans to increase its product usage by adding further
enhancing factors to it. Sip Tea is a combination of health and
fun-drink; not only this, it also has other application
factors.
Sip Tea can be used by women to soften and lighten the eye bags
under their eyes.
Sip Teas used tea (after the extracts have been taken out) can
also help in cleaning of household utensils that have stains on
them
Sip Tea carries a lot of health benefits. The theaflavins in
black tea show antioxidant properties in model laboratory studies.
In a recent laboratory test conducted by Pearl Limited, the
frequency of pancreatic cancer declined in relation to an
increasing lifetime consumption of black tea. Sip Teas benefits for
men aged 65 to 84 is that increasing intake of foods containing
flavonoids - 61% from black tea, 13% from onions, and 10% from
apples - was strongly linked to a lower rate of death from stroke
and other coronary disease. Sip Tea will be a natural source of
fluoride and will have positive effect on preventing tooth decay
and gum disease; so for a consumer who are conscious of drinking
tea due to this factor will revert to consumption of Sip Tea as
being a User-friendly Tea.4. Product User
The end-user is Sip Teas consumer. Any individual who buys Sip
Tea is our valued consumer. Sip Tea hopes to inculcate positive
habit pattern in their consumers. This could be that Sip Tea
changes the brand perception about the product. The image that Sip
Tea hopes to kindle in a customers mind is of youthfulness, energy,
happiness, refresher, etc. Thus, in the end changing the user
habits of a particular consumer from the existing image that
another tea brand has established in his or her mind to the one
that projects:
Sip Tea - the best tea youve ever had
5. Competitors
Sip Tea is selling tea; thus, we are competing with all the
players in the beverage i.e. with mineral water, carbonated drinks,
fruit juices, other tea brands, milk, coffee, cola drinks, etc. Our
competition is with quite a few existing and established tea brands
in the market. These are Lipton and other Lipton products by Lever
Brothers Pakistan Limited, Kohinoor, Ispahani, Tapal and Brooke
Bond. Sip Tea hopes to position tea in a totally different
perspective than that of its competitors. For e.g. the Brooke Bond,
Taj Mahal advertisement has a celebrity, Zakir Hussain being
portrayed as an individual and as a celebrity who can leave
anything in life but Taj Mahal Tea and his tabla.
(A) Product Strategy
With success on its mind, Sip Tea is following a communications
strategy that focuses on the product and the product experience.
The brand advertising strategy is in three parts:
The brands heritage,
The teas taste, aroma and color, and
The emotional bonding with the consumer.
All our commercials will sign off with the line:
Sip Tea,
Sip Tea will be packaged in a way that the tea leaves will be
protected and it will maintain its functional form. The tea will
not loose its taste because we will be very careful about the
products packaging. Sip Teas pack will not be difficult to open;
consumers will be able to comprehend easily on how to open the
pack. Sip Tea will create a desirable image by the color of its
pack. Most consumers associate a specific color with certain
feelings, such as Red is associated with fire; our pack will be
mainly using colors green and yellow. The color green depicts the
color of freshness and relating that tea leaves are green in color;
the yellow color conveys a different message to our consumers - a
message that yellow is about youthfulness, energy and
happiness.
Apart from offering valued services to our customers at
point-of-sale areas, we will also allow and welcome those customers
who find any fault in our product. By this we will be available to
our consumers at all times i.e. there will be a call centre which
will handle all customer queries about our product. We want to be
in direct contact with our customers and not just through our
wholesalers, retailers, shop-owners, etc.
Sip Tea will not be just another tea brand or just another shelf
item; it hopes to become a household name. The people at Sip Tea
are there to create awareness about the product, thereby searching
for consumer interest, their evaluation, trial of Sip Tea, finally
leading to adoption of the product and most importantly after being
satisfied and completely contented with Sip Tea he / she comes
again to the store to purchase it.
Initially the product will be available in three most popular
sizes. There will be 400gms pack, 200gms pack and a 10gms sachet
pack. This aspect has been kept in mind so as to achieve
Divisibility in relation to our brand. The Divisibility factor is
very important if we want the purchase for our customers to be
convenient, and that for every occasion there is a size.
Manufacturing tea bags is also in the pipeline; this will happen in
the near future.
Product Life Cycle
To be able to market its product properly, a firm must be aware
of the product life cycle of its product. The standard product life
cycle tends to have five phases: Development, Introduction, Growth,
Maturity and Decline. Sip Tea is currently in the introduction
stage, which is evidenced primarily by the fact that they dont have
a loyal group of stable customers and thus we need to work on
establishing a brand name for ourselves and cut in competitors
market share.
Furthermore, cost management, product differentiation and
marketing have become more important as growth slows and market
share becomes the key determinant of profitability.
(B) Distribution Strategy
Sip Teas effective and efficient distribution channel provides
its members with an important strategic edge over competing
channels. Sip Teas distribution strategy will basically relate to
the fact that how to reach to our target market. For this reason,
Sip Tea, can outsource the major activity as we feel that it will
be hard to distribute to 24,000 retail outlets on our own,
therefore we believe to develop good ties in order to push the
product in the market. To be prompt and accurate in supplying of
the product to the retailer shops consistently, we have been
preparing the whole wide squad for the distribution in which we
emphasize our distributors to wear our product design on delivery
vans which exhibit the product attributes and holds the tea name,
color, design and slogan. With that we have also provided special
caps to our distributors who are exclusively distributors of Sip
Tea.; so as to project the image of the company and at the same
time using it as a promotional tool. We do not want to be
out-of0stock ever. According to a recent research conducted by Food
Marketing Institute, an estimated 3% of annual sales are lost due
to out-of-stocks and that retailers lose about 0.5% of their
customers due to this problem.
Selecting the Distributor
This subject is as sensitive as pricing. Wrong channeling can
lead to total chaos. While selecting the distribution area we at
Sip Tea felt we needed to have a certain checklist to evaluate and
select our distributor:
The distributor should be financially sound.
The distributor should have the necessary knowledge of
distributing Sip Tea to the target market.
The distributor should have the Right Infrastructure that is,
Human Resources to transport and take Sip Tea to the market, having
proper storage and warehousing facilities with transportation
aspect to be kept in mind.
The last and the most important factor that we had kept in mind
while evaluating our distributor was that he should not have been
handling any competing brand that is, Lipton, Tapal, Brooke Bond,
Ispahani, etc. because then this would result in clash of interest
from the consumers side between two or more brands.
Distribution Channels coffee & tea chains
supermarket/hypermarket/utility stores bazaars petrol stations
& convenience Outlets pharmacies other outlets food wholesalers
other wholesales retailers cash & carry(c)Pricing Strategy
We have come up with three sizes initially which are 400gms
pack, 200gms pack and 10gms sachet pack each. After getting an
encouraging response from the target market we will go into further
divisibility. Meanwhile, we believe we can penetrate into the
market by introducing prices lower than other local and foreign
brands in the market:
400 grams at Rs.110.00
200 grams at Rs.52.00
10 grams at Rs.3.00
This pricing level along with an effective promotion campaign
will help us to achieve our goal of capturing 5 % of the market
share.
Price Breakup - 400gms Pack
ParticularsPer Unit Cost (PUC)
Cost of Goods Sold41.51
Add: Excise Duty5.19
Sales Tax6.23
Ex Factory Price52.93
Add: General Admin. Exp.13.85
Distribution Exp.15
Promotion Exp.17.85
Profit Margin4.15
Selling Price to Retailer103.78
Retail Margin6.23
Selling Price110.00
Price Breakup - 200gms Pack
ParticularsPer Unit Cost (PUC)
Cost of Goods Sold19.64
Add: Excise Duty2.45
Sales Tax2.95
Ex Factory Price25.04
Add: General Admin. Exp.6.55
Distribution Exp.7.07
Promotion Exp.8.45
Profit Margin1.96
Selling Price to Retailer49.07
Retail Margin2.94
Selling Price52.00
Price Breakup - 10gms Sachet Pack
ParticularsPer Unit Cost (PUC)
Cost of Goods Sold1.13
Add: Excise Duty0.14
Sales Tax0.17
Ex Factory Price1.44
Add: General Admin. Exp.0.38
Distribution Exp.0.41
Promotion Exp.0.48
Profit Margin0.11
Selling Price to Retailer2.82
Retail Margin0.17
Selling Price3.00
Competitors Pricing Analysis
Competitor BrandsPrices for 10gmsPrices for 50gmsPrices for
100gmsPrices for 125gmsPrices for 200gmsPrices for 250gmsPrices for
400gmsPrices for 500gmsPrices for 400gms (Plastic jar)Prices for
450gms (Plastic jar)
Lipton Yellow Label Tea--Rs.30-Rs.60Rs.118--Rs.135
Richbru Chai---Rs.29-Rs.57----
A1 Kenya Mixture--Rs.24-Rs.47-----
Tapal DanedarRs.3Rs.15Rs.28-Rs.55-Rs.108-Rs.115-
Tapal Family Mixture--Rs.26-Rs.51--Rs.125-Rs.125
Supreme Tea---Rs.33-Rs.66---Rs.125
Ispahani Danedar--Rs.28-Rs.55-----
Ispahani Super Mix--Rs.26-Rs.51-----
Kohinoor-Classic Strong---Rs.34-Rs.65----
Kohinoor-Danedar----Rs.55-Rs.110---
D) Promotion Strategy
In the promotional mix the company has decided to use the
following elements according to the target market and the nature of
the product.
Sales Promotion
Sales promotions are those marketing activities that provide
extra value or incentive to the sales force, distributors, or the
ultimate consumer and can stimulate immediate sales. Sip Tea will
be coordinating their integrated promotional activities with the
marketing mix; this decision has been taken so as to avoid wastage
of time, money and energy at all functions of the business. Sip Tea
will be taking into consideration consumer oriented sales
promotion, point-of-purchase displays, gifts and memorabilia,
collectible items, etc.
Point-of-purchase Displays: Sip Tea will provide its product
cutouts to the retailer shops to place it at their counters.
Consumer-oriented Sales Promotion: Sip Tea will give free
plastic teapots on its 400gms pack and tea-cozys with 200gms
pack.
Gifts and Memorabilia: Sip Tea will be giving wall clocks,
calendars and a Sip Tea diary to major outlets in Karachi city.
Collectible Items: Sip Tea will be rewarding its valued
consumers with collectible items such as key-chains, mugs,
teaspoons, etc. all carrying Sip Tea logo for better rapport with
consumers, maintenance of brand loyalty and brand recognition.
Forecasts and Budgets
We have made the following sales forecast for the year 2002
based upon which for our own internal records and references we
will be making projections for the next seven years.
Sales Forecast
Total Market
:13,000,000 kgs
Targeted Market Shares (5%):650,000 kgs or 650,000,000
gms/year
Total Sales (400gms)
:650,000,000 * 0.25 = 162,500,000
Total Sales (200gms)
:650,000,000 * 0.30 = 195,000,000
Total Sales (10gms)
:650,000,000 * 0.45 = 292,500,000
Size of Package (400gms)
:162,500,000 / 400 = 406,250 units
Size of Package (200gms)
:195,000,000 / 200 = 975,000 units
Size of Package (10gms)
:292,500,000 / 10 = 29,250,000 units
Trade Price 400gms (in Rs):406,250 * 103.77 = 42,156,562
Trade Price 200gms (in Rs):975,000 * 49.07 = 47,843,250
Trade Price 10gms (in Rs)
:29,250,000 * 2.82 = 82,485,000
Total Sales
:42,156,562 + 47,843,250 + 82,485,000
= 172,484,812 Income Statement
Particulars2002
Sales172,484,812
Less: COGS 68,993,925
Gross Profit103,490,887
Less:
Gen Admin Expense
Distribution Expense
Promotional Expense 22,997,952
24,837,813
29,667,388
Net Profit 25,987,734
Methods for Determining the Promotional Budget
There are six important methods of determining the promotion
budget:
Affordability
Percentage-of-sales
Competitive parity
Objective and task,
Profit maximization,
Ratio of elasticities.
The level of promotion at which profits reach a maximum is
called the optimal level of promotion. The optimum is the point at
which the input to the system gets the highest returns or
output.
The method, which Sip Tea has selected to determine the
promotional budget, is Affordability. In the affordability method
of budget setting, a firm spends as much on promotion as it can
afford. It first determines how much money is available after other
expenses are paid. It then determines to spend some fraction or
that entire amount on promotion.
Our mother company, Pearl Limited, is ready to take care of all
the promotional expenses. We have taken the challenge of
communicating, hand in hand with our people the idea behind
launching of Sip Tea, which is a high quality, low-priced, health
maintaining, relaxing, and energizing tea. We have been working in
the tea industry, but as a Tea Brand, it is our first product,
therefore the promotional budget needed to launch this product will
be given by our mother company i.e. of Rs.36,000,000/- for the
first three months during our product launch stage.
Scheduling Advertising
Scheduling refers to the timing of the promotion expenditures or
the sequencing of promotions within a time-period. Few of them are;
massing, flighting, pulsing, and even-scheduling. We have selected
flighting because it involves irregular scheduling ads in bursts
for short periods of time within the year, separated by long
periods of time with no advertising. Flighting may also be called
as bursting.
Sip Tea thinks that it is the best way for the company to
schedule its advertising because through affordability method it is
able to advertise the brand with irregular volumes and irregular
time intervals. The second idea behind this is that we will be
promoting heavily in the first three months because of the
introductory phase of the product. Flighting helps us to maintain
different amount of advertising in different months within a time
span of a year. With the passage of the product life cycle, looking
at the position of our product in the market, we can change the way
we have to schedule our advertising budget.
Media Planning
Media Objective
Sip Tea will reach to its target market making them aware about
the product and its brand message.
Media Strategy
Media strategy describes the course of action you plan to follow
to achieve the media objectives. Our strategy would be using the
four categories of media mix, which will help us to reach our
target audience through all doors of the promotional mix, and
easily as well. Doing this efficiently at a minimum cost will help
the company to achieve its objectives.
Media SelectionTo reach the target market in a short period of
time we need the vehicle that will drive us to achieve our
objectives. The best suitable way of accomplishing this is through
the use of the following media:
Electronic Media
Broadcast media consists of both television and radio.
Electronic media provides the resources to present your
communication in a creative way, thus enhancing the benefits and
usage. The colors and the communication if incorporated properly,
remain in the minds of the viewers. We have used it for the purpose
of broad reach as well.
The idea that Sip Tea, can be best delivered to the people by
the use of an effective commercial. The channels selected by us are
PTV Network and PTV World both. PTV World will show the commercial
in between different drama serials and programs. The commercial
will run in the prime time and after News Headlines in Khabarnama
and Time Spot before Khas Khas Khabrain in PTV.
Print Media
Magazines and newspapers are selected for the purpose of
communicating as well. These involve the reader with the message
and have a longer life as compared with electronic media. If a good
quality ad with good color scheming is used it catches the eye
pupil and thereby communicates a positive feedback to the brain.
Jung, Dawn and The News are selected for this purpose. Weekly Mag
and Womens Own magazines are also the focus of attention of the
target audience we plan to serve. Selecting them as a channel to
convey the communication message will also help us in getting to
our goals.
Point of Purchase and Mobile Media
Point of purchase always encourages impulse buying, because
through this aspect people have the capability to recall a brand
and encourage brand loyalty. Right at the early stage we are using
buntings and cut-outs. Mobile media is the best way to provide
repeated exposure as it has got little time to get the target
audiences attention but if done properly can expose Sip Tea, hence
creating recognition and awareness for it. Billboards are used at
places where our target market resides or passes by. This will
provide us with the opportunity of mass viewer-ship.
Percentage-wise Breakup of Sip Teas Expected Viewer ship using
the four vehicles of Media Selection
(A) Publications
WeekDawn-SundayJung-AkhbarJung Sunday MagazineThe NewsWeekly
MagazineWomens Own
Week 1Half-Page
(2nd Page)F/Pg upto 215 cmsTitle Page ColorF/Pg upto 215 cmsB/Pg
ColorCenter Spread
Week 2Qtr. Page
(Pg 1)F/Pg upto 215 cmsInside Front/Back ColorF/Pg upto 215
cmsInside Front/Back Color-
Week 3Qtr. Page
(Pg 16)F/Pg upto 215 cmsInside Front/Back ColorF/Pg upto 215
cmsB/Pg Color-
Week 4Qtr. Page
(Pg 17)F/Pg upto 215 cmsInside Front/Back ColorF/Pg upto 215
cmsInside Front/Back Color-
Week 560 Column cms (Pg 1)F/Pg upto 215 cmsB/Pg Color-B/Pg
ColorCenter Spread
Week 660 Column cms (Pg 16)F/Pg upto 215 cmsB/Pg ColorF/Pg upto
215 cmsInside Front/Back Color-
Week 760 Column cms (Pg 1)F/Pg upto 215 cmsB/Pg Color-B/Pg
Color-
Week 860 Column cms (Pg 16)F/Pg upto 215 cmsB/Pg ColorF/Pg upto
215 cmsInside Front/Back Color-
Week 960 Column cms (Pg 1)F/Pg upto 215 cmsB/Pg Color-B/Pg
ColorCenter Spread
Week 1060 Column cms (Pg 16)F/Pg upto 215 cmsB/Pg ColorF/Pg upto
215 cmsInside Front/Back Color-
Week 1160 Column cms (Pg 1)F/Pg upto 215 cmsB/Pg Color-B/Pg
Color-
Week 1260 Column cms (Pg 16)F/Pg upto 215 cmsB/Pg ColorF/Pg upto
215 cmsInside Front/Back Color-
Total
CostRs.3,446,100Rs.2,838,000Rs.2,921,625Rs.1,053,500Rs.449,550Rs.90,000
Total Publication Media Charges (3 Months) = Rs.10,798,775/-(B)
Mobile Media and Point-of-Purchase Media
Billboards
Schon CircleRs.1,000,000/-
Sharah-e-Faisal (Kala Pul)Rs.1,000,000/-
Hasan SquareRs.1,000,000/-
Total Cost (3 Banners)Rs.3,000,000/-
Point-of-Purchase
Buntings (25,000 @ Rs. 4/-)Rs.100,000/-
Cutouts (20,000 @ Rs. 6/-)Rs.120,000/-
Total CostRs.220,000/-
Total Mobile and P.O.P. Media Costs = Rs.3,220,000/-
(C) Broadcast Network
PTV Network
WeekPTV SpotsInsertionsDurationCost/insertionTotal Cost
Week 1After News Headlines in Khabarnama730
sec.Rs.41,980Rs.293,860
Time Spot before Khas Khas Khabrain730
sec.Rs.31,485Rs.220395
Prime Time1530 sec.Rs.31,485/-Rs.472,275
Week 2After News Headlines in Khabarnama730
sec.Rs.41,980/-Rs.293,860
Time Spot before Khas Khas Khabrain730
sec.Rs.31,485/-Rs.220,395
Prime Time1530 sec.Rs.31,485/-Rs.472,275
Week 3After News Headlines in Khabarnama730
sec.Rs.41,980/-Rs.293,860
Time Spot before Khas Khas Khabrain730
sec.Rs.31,485/-Rs.220,395
Prime Time1530 sec.Rs.31485/-Rs.472,275
Week 4After News Headlines in Khabarnama730
sec.Rs.41,980/-Rs.293,860
Time Spot before Khas Khas Khabrain730
sec.Rs.31,485/-Rs.220,395
Prime Time1530 sec.Rs.31,485/-Rs.472,275
Week 5Spots before/after a specified program630
sec.Rs.20,990/-Rs.125,940
Prime Time1530 sec.Rs.31,485/-Rs.472,275
Week 6After News Headlines in Khabarnama730
sec.Rs.41,980/-Rs.293,860
Prime Time1530 sec.Rs.31,485/-Rs.472,275
Week 7Prime Time1530 sec.Rs.31,485/-Rs.472,275
Time Spot before Khas Khas Khabrain630
sec.Rs.31,485/-Rs.188,910
Week 8Spots before/after a specified program530
sec.Rs.20,990/-Rs.104,950
After News Headlines in Khabarnama530
sec.Rs.41,980/-Rs.209,900
Week 9After News Headlines in Khabarnama530
sec.Rs.41,980/-Rs.209,900
Time Spot before Khas Khas Khabrain530
sec.Rs.31,485/-Rs.157,425
Prime Time1530 sec.Rs.31,485/-Rs.472,275
Week 10Spots before/after a specified program630
sec.Rs.20,990/-Rs.125,940
After News Headlines in Khabarnama530
sec.Rs.41,980/-Rs.209,900
Time Spot before Khas Khas Khabrain430
sec.Rs.31,485/-Rs.125,940
Week 11Prime Time1230 sec.Rs.31,485/-Rs.377,820
After News Headlines in Khabarnama530
sec.Rs.41,980/-Rs.209,900
Week 12Spots before/after a specified program630
sec.Rs.20,990/-Rs.125,940
After News Headlines in Khabarnama530
sec.Rs.41,980/-Rs.209,900
PTV World
WeekPer Week InsertionsDurationSpot RateTotal Cost
Week 14230 SecondsRs.15,875/-Rs.666,750
Week 24230 SecondsRs.15,875/-Rs.666,750
Week 34230 SecondsRs.15,875/-Rs.666,750
Week 44230 SecondsRs.15,875/-Rs.666,750
Week 53530 SecondsRs.15,875/-Rs.555,625
Week 63530 SecondsRs.15,875/-Rs.555,625
Week 72830 SecondsRs.15,875/-Rs.444,500
Week 82830 SecondsRs.15,875/-Rs.444,500
Week 92830 SecondsRs.15,875/-Rs.444,500
Week 102830 SecondsRs.15,875/-Rs.444,500
Week 112830 SecondsRs.15,875/-Rs.444,500
Week 122830 SecondsRs.15,875/-Rs.444,500
Total CostRs.6,445,250
Contingency Plan
If our marketing strategy fails then we will again conduct the
overall SWOT and GAP Analysis, followed by re-defining our
corporate objectives, goals, aspirations, employee trust, etc.
thereby seeing and judging where we actually failed and why.
Defining on how to handle a situation where our competitors are
having a great time seeing that another player is out of the tea
industry; meaning less players more market share and as such how to
counter attack it. We dont need to be aggressive but surely will
need to ensure to take careful and calculated steps so that we do
not falter in future.
BIBLIOGRAPHY
Strategic Management by Craven; Chapter 15 Marketing Strategy
Implementation and Control, Part V. References for International
Marketing and Trade System Strategic Management Process by Philip
Kotler Marketing Back to Basics, Lecture at American Marketing
Association Case study on The Tea Cup Runneth Over, Why Less really
is more by N. Michael Langenborg Searched the internet and various
websites on the internet. To name a few: www.yahoo.com
www.peetstea&coffee.com www.marketingmajic.com
www.agencyfaqs.com www.homebusinessmag.com
Good Quality
High Price
Low Price
Sip Tea
Bad Quality
Tapal Family Mixture
Lipton
Supreme
Tapal Danedar
Lipton
Supreme
Tapal Family Mixture
Tapal Danedar
Flavor
Sip Tea
Tasteless
Aroma
Smell
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