TEA INDUSTRY IN PAKISTANSubmitted To: SIR NAVAID ALI KHAN

Submitted By:

Prithvi Raj SoniDate: 15-12-2016

INSTITUTE OF BUSINESS MANAGEMENT

Table of ContentsTEA INDUSTRY IN PAKISTAN........................................................................................................................4

TAPAL (THE LEADER)....................................................................................................................................5

LIPTON (THE CHALLENGER).........................................................................................................................6

VITAL (THE FOLLOWER)...............................................................................................................................9

Tetley (THE NICHE)....................................................................................................................................12

TEA INDUSTRY IN PAKISTAN

The history of tea drinking in the subcontinent can be traced far back. It is said, that tea was introduced with the arrival of the British in the Subcontinent and became popular in the region during the British rule. The British people were clever enough to use a powerful slogan, which remained in the minds of the people. They said, "In winters it provides warmth and in summers, it gives freshness."

At present there are two kinds of tea available in the market: branded and unbranded (loose) tea, the ratio is (55:45) respectively. Therefore, the importers are also of two types, though both import tea from the same countries. Bulk importers sell tea to retailers in loose form, while the second category of bulk importers sell packaged tea under brand names.

TAPAL (THE LEADER)Tapal tea is successfully running business since 1980s and has managed to embed its roots deep into the tea industry of Pakistan. The essence of its success is based on its core values which are Trust, Quality, Creativity, Innovation, Leadership and Unity. Tapal tea is a brand which is family oriented and which believes in creating a strong family bond over a cup of tea. Its success on social media can be gauged by the fact that it has the highest following of 11,000 fans on Twitter and the fastest growing fan following of 700,000 on Facebook.

Our aim is to make the brand reachable to our target audience by creating a vast product portfolio and stock keeping units. These come in the form of Tapal Tezdum, Tapal Daanedar, Family Mixture, Tapal Green Tea and 3-in-1 ready to drink sachets.

Tea industry in Pakistan has a number of firms which are working hard to secure the largest market share. Therefore, Tapal faces neck to neck competition with Lipton at all times and work hard to secure its market share by implementing various marketing strategies. These include the following:

a) Keeping tabs on the competitor:It is impertinent to keep a close look on the competitor and stay aware of their advancements. Hence, Tapal plays the role of being proactive firm which responds to all the activities of Lipton on time.

b) Television Commercials: Brand reinforcement is at the core of Tapal’s marketing. This strategy does not ensure a large increase in the consumer body but it does create brand reinforcement and customer loyalty.

c) Product Shelfing:The product must have clear visibility in all the super markets so that it is approachable by the customers. It must be kept up front in the store.

d) Stock Keeping Units: Tapal ensures that it becomes affordable for all type of consumers. Therefore, it is available in various SKUs which range from Rs.5 Sachet to 500g packet and also 3-in-1 ready to drink tea.

e) Complementary Goods:We always work towards creating customer delight. In this quest we provide complementary goods with tea such as our customized mug. We are also planning on increasing the number of these goods and collaborating with other biscuits brands.

f) Vertical Integration Forward: It is important to take steps to further promote our product by presenting it directly to the consumers. This can be done by creating Tapal theme Chai café across Pakistan.

g) Brand Activation: Promote tapal in universities, parks, shopping malls, ramzan/eid transmissions etc.

h) Hotel/Restaurant Endorsement Program: Tea has a wide customer base which includes C2C and also B2B market. Therefore we can collaborate with different restaurants and hotels and urge them to provide our tea only.

i) Corporate Social Responsibility: It is important to give back to this community in which we live and contribute in a positive manner. This can be done effectively if this is collaborated with

the efforts of marketing. According to the new rule of the high court of Sindh, street boards are banned from installing. Therefore, we can locate areas across the city which are a little gloomy and light up the entire area by installing customised Tapal packaged light bulbs across the street. This will not just light up the entire area but will also contribute towards marketing by creating a positive word of mouth.

LIPTON (THE CHALLENGER)History of Lipton:

Lipton was created at the end of the 19th century by Sir Thomas Lipton in Glasgow, Scotland.

SLOGAN: "DIRECT FROM THE TEA GARDENS TO THE TEA POT“

VISION: Lipton vision is to available within an arm’s reach of every individual desire.

Lipton in Pakistan: Lipton was launched in Pakistan in 1948 and is one of the oldest brands in the country.

Lipton’s Portfolio in Pakistan:

a) Lipton Yellow Label Tea

b) Lipton Mega Daane

c) Lipton Teabags

d) Lipton Green Tea

e) Lipton Flavored Tea

Lipton is one of the world's great refreshment brands, making a big splash in the beverages market with tea-based drinks including ready-to-drink tea and other healthy, refreshing alternatives to soft drinks.

Lipton stands for brightness, vitality and fun with natural goodness.

a) Yellow Label is probably the world’s most famous tea.

b) It’s the world’s best-selling tea brand, has been established for more than 100 years

c) Lipton plays the role of an energetic brand that aims to redefine the meaning of tea in people’s lives.

d) Lipton tea provides great taste, aroma, flavor and color.

Target Market of Lipton:

Commercially they target the urban areas of Pakistan who come in the category of average middle class or above.

POSITIONING:

Initially the single idea behind Lipton is

“Light premium priced tea with best quality”

Later, they re-positioned itself specifically addressed local customers by old melody

Chai chahye. Kaun sy janab

Lipton he to hay hmm lajawab

Then they positioned its tea. The tea which

“Clear The Mind”

Re- Positioning

After that in 2009, a new campaign was launched which communicated that;

‘SIP OF INSPIRATION’

Now the brand has transitioned towards a simpler message

‘DRINK POSITIVE’

Competitors in Pakistan:

a) Tapal Danedar

b) Tatley

c) Vital Tea

Distribution Channel

Manufacturers Wholesalers Retailers Consumers

Promotional Tools:

The Lipton does it promotion in following ways:

a) Advertisementb) Personnel sellingc) Sales Promotions

SALES PROMOTION

Lipton, the world’s leading tea brand, launched three month long Dip & Win consumer promotion campaign

MARKETING CHANNELS

a) Newspaperb) Magazinesc) Bill boardsd) Special promotions or packagese) Internet marketingf) Bus brandingg) Sponsorship

Associating With Music and Musician

In ads they bring singers like Nazia Hassan and Zohaib Hassan, Meesha Shafi, Arif Lohar and Ali Zafar.

Recommendation:

As Lipton is the oldest and famous tea brand in Pakistan they should fuscous on how to sustain and grasp more market share because many new entrants are entering in market

Specially, Tapal tea is grasping more market share by introducing new products and different appeal.

VITAL (THE FOLLOWER)

The Vital Group started its operations in 1991 with the launch of VITAL TEA – which has now become the choice of every third person who drinks tea in Pakistan. With its passion to serve and due to the high demand from its customers and buyers, VITAL GROUP has now launched other personal care items, such as VITAL BEAUTY SOAP.

Vital Tea is VITAL GROUP’s very first product which was launched in a small town of Punjab, ‘Haroonabad’. Within a very short span of time, we started selling it across the country and to a larger market outside Pakistan also. Vital Tea’s export started since 2005. The tea is now available in different flavors.

Vital Tea leafs are hand-picked in the mountains of Kenya. To capture the aroma of the tea, these leafs are, then, processed on the same day and shipped to our facility in Pakistan. Our Master Chef blends the mixture for a rich color and taste that touches the hearts through taste buds. Every cup of Vital Tea provides a hot and refreshing blend of perfect aroma, color, and taste that serves your taste buds well.

Try once and you will agree with our description!

Due to high demand of our customers, green tea product will also be available in the local and global market.

Although it is a successful company and generating reasonable revenue but it is needed to come forward in front of other competitive brands like Lipton Tea, Supreme Tea and Tapal Tea to give them tough time.

Price of the Vital Tea product is less than that of its competitors. But as far as placement and promotion mix is concerned, this brand has weak distribution channel and promotional activities relatively. They, actually, is still to reach their product on every required spot of the country as well as internationally. Vital Tea has a lot of opportunities if they improve their distribution channel and advertising issues. It has strong competitors in the market and it has some economical and may be political threats as well.

MARKETING MIX 4PC’SThe four marketing mix of Vital Tea are as follows:PRODUCTThe product Vital Tea has not exceptional but good image brand image in the mind of consumers. The quality of Vital Tea makes it different and offer best quality tea to its consumers. We believe in dedicating ourselves to achieve ourselves to achieve an outstanding quality in all our activities .Excellence is a journey and not a destination. Quality is a way of life to us.

Trade name: Vital tea, A Eastern Product (PVT) LimitedThe actual product: Tea BeverageBranding: Yellow aspect of refreshing, hard pack and soft pack both also tin pack and plastic Packing.Brand personality & Brand equity:

a) Freshness, Healthy, Innovative, quality etc.b) Vital Tea provides a quality, consistent, innovative and accessible tea reputationc) Marketing considerations Product life cycle.d) It is a product at its growth level so they are finding new multiple segments.

PRICE:Vital Tea has never compromised on quality so they adopted value based pricing. The pricing strategy that they are following for Vital tea is cost oriented as the price that it is taking comparatively low then its main competitor. Its price varies according to cost and even in high quality.

Products with Prices:As you know that prices are selected up to date because prices don't remain constant. So, select the prices with current rate.

For example: 10 RS. Sachet is for 4 rupees

Placement:Distribution plays an integral role in any company whether it’s a FMCG or utilityGood. Vital tea has a distribution network spread across the large area of Pakistan. The growing image and popularity of the brand is making it the strong competitor of other players in tea making industry. Vital Tea caters to its customers by providing Vital tea to more than 50,000 outlets in Pakistan, which includes super stores, general stores, grocery stores and discount stores and all departmental stores.Vital tea has it’s headquartering in HaroonAbad and more than 200 distribution offices all over Pakistan. The role of distribution in the marketing mix is to deliver a product to its target market or final consumer. Between the manufacturer and the final consumer stands a set of intermediaries performing a variety of functions. These intermediaries constitute a marketing channel also known as trade channel or distribution channel.

Promotion:The company uses different promotion techniques they provide different items to people such as:

a) Capsb) Cups.c) Printed T-shirts.

d) Discounts.e) Cars & Motor Cycles Scheme (now in Multan Division and Rawalpindi)

The company uses different sales promotion techniques at different time of the year depending on the sales of the product.Electronic Media: The company is spending a lot on electronic media. In there advertisement they hire renowned celebrities.Advertisement: Vital Tea uses different types of advertisement as follows:Television: Vital Tea spends on television advertisement. Commercial through cable network, movies, TV shows.Magazines: Full page advertisement including Akhbar-e-Jahan, Khabrain Family Magazine, Fashion & Business Magazine.

Strengths:Experienced and Quality ManagementStrong Ethical value (culture and heritage)Highly InnovativeStrong Company imageQuality & VarietyEffective & Attractive Packaging

WeaknessesHigh prices of the ProductSubstitute ProductsLack of AdvertisementWeak Distribution NetworkComparatively less Frequent Schemes and Discount Packages

The strength of the company would be the innovation and the high quality products. Because of these the company is able to survive in the market and still earning a good market share comparing to its competitors.

OpportunitiesBrand is the part of traditional drinking habitsQuality Control DepartmentComparatively less product pricesHuge gap to cover the area and enhance businessExport in other country making its image in PakistanLaunching of tea Bags

One of the greatest opportunity that Vital Tea has its huge market which is increasing as the population is increasing. Tea has become a staple product in Pakistan which cannot be denied at any stage of age.

Tetley (THE NICHE)INTRODUCTION:

Tetley came in to being in 1837 in England. Over 179 years ago, two brothers Joseph and Edward Tetley founded Joseph Tetley & Co. in 1837. In 1856, they moved the company to London—then the center of the world's tea trade. They eventually parted, and Joseph unveiled the newly named "Joseph Tetley & Co., Wholesale Tea Dealers."

In 1888, the company started catering American agents to distribute Tetley's teas throughout the United States.

In 2000, Tata global beverages acquired Tetley by 56% of total shares.

Our Mission

a) Tetley, the better state of mind teas. b) Our belief: A better state of mind begins with a better tea. c) Tea Is Extraordinary

Tetley Pakistan:

Having an experience of around 150 plus years and more than 40 countries, Tetley came into Pakistan in December 2003 with joint venture of Lakson group and , Tata global beverages.

Flavored Teaa) Masalab) Earl Greyc) Lemond) Gingere) Elaichif) Tulsi & Lemon

Target Market:

Behavioral and Consumption: Tately has targeted non users, who have tried tea bags but are not aware of flavored tea bags. Consumption is low; heavy tea drinkers but medium tea bag users

Psychographics: Lifestyle: Working professionals who live a stressful and busy life Attitude/Interests: Health is of utmost importance, they are active and don’t compromise on their body and health. They are open to new experiences, are smart go-getters.

Needs: They feel they deserve to get their choice and don’t want to stick to just alternatives. Convenience and hygiene is of utmost importance to them.

Geographic: Geographically Tately has divided its products into two segments. Tately Josh is catering interior of sindh market. Tately Gold is targeting market of metropolitan cities.

Distribution ChannelManufacturers Wholesalers Retailers Consumers

Promotional Tools:

Tately promotes its products in following ways:a) Advertisementb) Personnel sellingc) Sales Promotionsd) ATLe) BTL

Tately Gold, Sonahery chai, started its biggest campain “Na Pasand Aae, To Paise Wapas”. Tately started its sells promotion activities by providing free spoon and cup with pack of one Kg tea.Conclusion: Despite being second largest in the world, Tately could not survive in Pakistan due to many reasons:

a) Trade restrictions of India and Pakistanb) Lower Market researchc) Poor segmentation

Recommendation: Tately can come up with Desi taste and heavy marketing. It can improve by creating more awareness of its brand and can take the same market position.

Nature of competition:Sine tea industry is very sensitive in terms of prices, companies have to play major role in grabbing the market. As mentioned above the 55% tea comes through smuggling and companies have to play on rest of the ground. In order to be market leader, companies have to cater all the aspects of marketing.

Tapal has positioned them as family tea, whereas, Lipton has positioned itself as businessperson’s tea. Competition is direct between both of them because of same flavours, and same prices. Both of them follow almost same marketing strategies to attract customers.

Vital tea has targeted rural areas of country, whereas, tetley has targeted itself as premium price tea. Competition is direct between both but they have not positioned themselves well.

Tapal has indirect competition between Vital and tetley . The reach of Tapal is far more than those of others, whereas, other two are limited to some of the areas.

PRINCIPLES BEING FOLLOWED BY TEA BRANDSIf we speak of principles, all of them being large brands have followed most of the principles required to stay and survive in the market.

Firstly, if we consider brand positioning which is how customer perceives our products in their mind and how distinctive it is considering current market. All of these brands; lipton, Tapal, Vital and Tetley has positioned themselves in a unique or different manner.

Secondly, if we consider branding alone which is how we make our product unique or different from other products which could be in form of quality, design, reliability etc. Tapal has launched itself as a unique brand which offers different flavors, colors etc. Lipton has premium quality and variety.

Thirdly, if we consider product strategy principles they are also being followed as tapal has different product and services differentiation as compare to lipton, Tetley and vital. Tapal is considered differently as it is used more in rural areas as compare to lipton and other brands because people like to have strong tea which they feel refreshes them. Similarly, lipton is liked more by people in urban areas for its premium quality.

All the major principles like branding, positioning, product strategy, brand equity, designing and managing services are followed since all these tea companies are reputable. Tapal and lipton being the leaders and direct competitors follow most of the principles as they are not only surviving, but also making profits and increasing their market share.