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Report on

Lipton

Topic: report on Lipton yellow label

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Submitted to Muhammad ARSLAN Sarwar

Submitted by

Group: (E)Names: roll no

Muhammad USMAN 095 SOHAIB Tariq 104 Syed QAISAR Abbas Hafiza SAHER Afshan

Class M.com (x)

Subject Principles of MARKETING

Table of contents (report on Lipton tea) Name of topics page #1 Acknowledgment 4

2 Dedication 5

3 Executive summary 6

4 Introduction 7

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5 Objectives 9

6 Market research analysis 9

7 Market plan and strategies 10

8 Situation analysis Target market Bases of segmentation Level of competition Market mix

o Producto Priceo Placeo Promotion

SWOT analysis BCG matrix Porters’ 5 forces model

analysis

9 Feedback and control 24

10 Recommendations 24

11 Conclusion 25

Acknowledgement

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Thanks to ALLAH almighty for giving us the skill as well as we also wants to tribute to our

HOLY PROPHET Peace Be upon Him who show us the reality of God.

We would like to thank to our professor Muhammad ARSLAN SARWAR (Principles of

Marketing) who have been providing guidance and support during the whole process of our

report. We feel motivated and encouraged every time we attend his lectures. Without his

encouragement and guidance this report would not have materialized.

The guidance and support received from all the group members who contributed to this report,

was vital for the success of the report. We were grateful for their constant support and help.

This report was arguably one of the most painful yet thrilling experiences in 1st semester. Making this report has immensely helped us in understanding the skills of Marketing. Thanks!

And finally … thanks to those cups of tea we’ve had during this report!!

DEDICATEDTo

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Our Beloved parents

Muhammad ARSLAN Sarwar

All UOG’s faculty

All sweet friends, fellows and group members

Executive Summary

The report is an effort to identify different aspects of Marketing in Lipton Yellow Label

tea, which is one of the major players in the branded tea market in Pakistan; Lipton the

only international tea brand in Pakistan changed its initial elite based marketing and

turned to serving the masses of Pakistan with premium quality tea.

At present there are two kinds of tea available in the market: branded and unbranded

(loose) tea, the ratio is (40:60)

Towards the start of report figures regarding the Lipton yellow label situation analysis of

market, its target market, and contribution from different tea brands are also given.

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Its bases of segmentation and level of competition of Lipton tea in the market.

An integral part of the report is detailed analysis of the marketing aspect including

pricing, product, and placement and promotion areas.

SWOT analysis, BCG Matrix and porter five forces model analysis of Lipton yellow

label tea are also discussed.

Feedback, control, Recommendations and conclusion are also given to the best of our

knowledge.

Introduction of Unilever

Unilever is one of the worlds greatest consumer goods company and Lipton yellow label is a product of Unilever.They sell around 150 million products a day, which makes them worlds largest food businesses and a leader in Home and Personal Care markets. There brands meet people everyday needs for nutrition, hygiene

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and personal care and they are obsessed with developing new products that reflect the way that people likes and tastes are changing.

Company Information

Unilever was created in 1930 when the British soap-maker Lever Brothers merged with the Dutch margarine producer.Unilever Company came into the Pakistan market in 1949 with the name of Lever Brothers Pakistan. Changed the name Lever Brothers Pakistan to Unilever in year 2003.The average per annum consumption of tea is 150 million kilograms. Lipton enjoys a huge market share. Unilever caters in three categories which include

a. Food Brandsb. Personal Care Brands c. Home Care Brand

History of Lipton Tea

Lipton Tea is a British tea company, founded and named after its original owner, Sir Thomas Johnson Lipton. Lipton tea began in 1870 and is currently one of the biggest tea distributors in the world.

Origin of Lipton Tea – Legend Myths and Facts

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Lipton was born in 1850, in Glasgow, Scotland. In 1865, Lipton moved to the United States where he held various jobs, including working on a tobacco farm, a rice plantation and a streetcar. Lipton, Lipton returned to Scotland and opened his own grocery store in 1871.

Lipton pioneered the idea of selling tea as individual packets, for longer freshness, consistent quality and guaranteed weight.

Lipton tea today

Lipton tea is now one of the largest tea traders in the world. It is currently owned by the Unilever Company.

Objectives o The aim is to provide quality tea that is safe for the health and energizing for

the mind and body with an unforgettable flavor.o Lipton has to retain its position as a market leader against all its competitors

especially Tapal who is its challenger and close substitute.o It has to interact directly with the consumers in order to be aware of the

requirements and expectations of its consumers.o It has to maintain the highest satisfaction standards and goodwill amongst

the consumers.o It has to maintain its brand name and loyalty.

Market research analysis Market research analysis is conducted by adopting following techniques and methods to input information in this report

TYPE OF RESEARCH:The Research type is ObservationalInvolves gathering primary data by

Observing relevant peopleActions and situationsGroup discussion

Data collection methods

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1. Observation: 2. Structured and unstructured Interviews: 3. Questionnaires:

General Questions About the product

Primary dataOffice Tours (wazirabad 1/2012)

Office visit has been conducted to get basic information about the uniliver Company, its objectives and productsUniliver office Moti bazaar, Islamabad mor wazirabad.

Secondary dataWebsitesI. WWW.UnileverPakistan.com.pk

II. WWW.lipton.com.pk

Market plan and strategy

SITUATIONAL ANALYSIS

MICROENVIRONMENT FACTORS

Microenvironment of a company is all the factors that affect its ability to serve its customers. It

includes the company, suppliers, marketing intermediate, customer markets, competitors, and

publics

1. The Company

Unilever was created in 1930 when the British soap-maker Lever Brothers merged with the Dutch margarine producer, Margarine Unie.

Unilever Company came into the Pakistan market in 1949 with the name of Lever Brothers Pakistan.

Changed the name Lever Brothers Pakistan to Unilever in year 2003. The average per annum consumption of tea is 150 million kilograms.

Suppliers

More than 150,000 outlets in Pakistan including

o Super stores

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o General stores

o Grocery stores

o Discount stores

o Departmental stores

650 distribution offices with Head quarter in Karachi

2. Marketing Intermediateries

Unilever marketing intermediaries have played an effective role in distributing its

products.

Physical distributers

Financial intermediaries

These have strongly helped the company in promoting its products.

3. Customers

Number of people familiar with tea around the world:

MACRO ENVIRONMENT FACTORS

Microenvironment factors are all the societal factors, which affect the company; these include

demographics, economic, natural, technological, political and cultural forces.

1. Demographics

Generally people consume 2-4 cups of tea per day.

The demographics include

Age

Location

Gender

Race

Occupation

. The potential market of Lipton is the people aged 10-60; it does not target the children.

2. Economics Forces

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Economic forces in a macro environment are:

Economic growth rate Unemployment rate Inflation rate Interest rates Infrastructure quality Business cycle stage (e.g. prosperity, recession, recovery)

3. Cultural Factors

Pakistan has produced unique cultural of its own type.

Values

Norms

Cross culture

Target market

Targeting of Lipton: Lipton Yellow Label is working in more than 110 countries therefore the target market is a global village that consists of people with different cultures, taste, habits & food.

It targeted the urban areas (offices, hotels, restaurants, café, and banks) Lipton is targeting for upper middle, upper lower and upper middle class The teabags are targeted toward the upper high class. Soft packs and jar packs are targeted for middle and middle lower class. The age group segment selected for Lipton is between (15 – 60) It is targeting to those people who are young, trendy, cosmopolitan, hip, and

cosmopolitan.

MARKET SIZE CALCULATION

The Market size is:

NUMBER OF BUYERS = 0.444 Million

MARKET SIZE = NUMBER OF BUYERS * AVERAGE

CONSUMPTION

THEREFORE 0.444 * 48per year = 21.312Million

Market Segmentation

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Market Segmentation Of Lipton Yellow Label

Distinct needs - regular tea/ green tea /black tea Characteristics – taste, aroma, strength Behavior – in terms of 4 P’s Segmentation of consumer market

CURRENT STATUS OF SEGMENTATION

There are two clear segments of consumers in the market, branded tea consumers and un-branded tea consumers. In Punjab, the majority of rural areas are absolutely brand loyal while unbranded tea is only popular in teashops and hotels

Segmentation Base Selected Segmentation Variables Geographic Segmentation:-

World region Asia Country Pakistan Cities All major cities of Pakistan Density Urban-Rural Climate Hot & dry

Demographic Segmentation:-

Age All age group Gender Male, Female Family size 1-2,3-4,5 above Family life cycle Married & Unmarried Income 12000 above Occupation White collar & service workers Education School, colleges & Universities Religion All Race Asian Nationality Pakistani

Behavioral Segmentation:-

Occasion Any occasion Benefits Quality,taste,flavour and brand status Loyalty Status Significantly high Readiness Stage Awake & interested Attitude towards brand Positive & enthusiastic User Status Ex-user, regular user, first time user User Rates Medium user, heavy user

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Psychographic Segmentation:-

Social Class Middle class and upper class Lifestyle Actualizes, Fulfilled, Believers, Achievers Personality Cultured, energetic.

USE-SITUATION SEGMENTATION

Occasions Regular and parties Objective To feel fresh and healthy. Location Home, office Person Self, family members, friends

Level of competition

Market competition:

The tea market in Pakistan is very well saturated because of the high consumption of open tea which accounts for over 60% of tea sold but if we look at the branded tea market there Brooke bond leads the market in branded tea, while Tapal being second and Lipton being third in terms of sales with other small brand of Unilever and Tapal also laying claim to the market.

33%

23%

4%

29%

10%

BROOK BOND SUPREEM LIPTON

A-1 KARAK CHAP TAPAL

OTHERS

Primary competitive alternativeThe primary completive alternative of Lipton Yellow Label is Tapal Danedar Tea.

Tapal Danedar

lipton

LiptonDilmah

Alkozay

TetleyTapal

Supreme

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Tapal is a well known name in Pakistan. In 1947, it started business and now is a Tea leader in the tea market of Pakistan.

Competitive Rivalry

Tapal Danedar Teao Started in 1947 by Tapal Family. o Largest Pakistani owned Tea Companyo Innovationo ISO Certificationo Tapal Danedar and Lipton Yellow Label are primary competitive

of each other they are they competitive because they target the same consumers for same type of people there Target market is same. They also have slightly difference in there prices,

Major Players and competitors:

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Marketing mix The Marketing Mix (The 4 P's of Marketing)

Marketing mix (decisions) generally fall into the following four distinct categories:

Product

Pricing

Place issues(distribution)

Promotional tools

Product

The product name is Lipton yellow label that has a strong brand image in the consumer mind. It is regular tea that has a strong taste, aroma, and strength.

Product line

o Black tea

o Green tea

o Flavored black tea

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o Herbal tea

o Pyramid tea

o Iced tea mix

o Iced tea to go

o Lipton pure life tea

o Lipton iced tea

o Food service

o Lipton brisk

PriceLipton Yellow Label has never wanted to compromise on quality so they adopted value based pricing. Different prices of packs of Lipton yellow label tea in Pakistan:

Product category PricesPackets (Sachet size)

14gm Rs10 30gm Rs 20 95gm Rs 65

Packs (medium size) 100gm pack Rs. 30 200gm pack Rs. 60 400gm pack Rs. 115

Box &jars (large size) 50 tea bag box Rs. 64 100 tea bag box Rs. 125 450gm jar Rs. 125

Distribution /placement issues

Distribution is about getting the products to the customer. Some examples of distribution decisions include:Distribution channels

Lipton yellow label being a consumer good follows an intensive and selected distribution policy in the placement of its products it tries to reach its consumers any where and every where.

liptonManufacture

WHOLESALER

DISTRIBUTERRETAILER

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Distribution places More than 150,000 outlets in Pakistan including

o Super stores

o General stores

o Grocery stores

o Discount stores

o Departmental stores

650distribution channels, 3majors unit’s manicuring in Karachi, Raheem yar khan and khaniwal.

Promotional toolsThe Lipton Yellow Label does it promotion in following ways.The company uses different promotion techniques they provide different items to People such as:

Caps Tea bags Cups Printed T-shirts Discounts Basant festivals Vans WatchesThe company takes different sales promotion techniques at different time period for the sales of the product.

Electronic Media:

The company is spending a lot on electronic media. In their advertisement they hire renowned celebrities.

Advertisement:

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The Lipton Yellow Label uses different types of advertisement as follows

Television:

Lipton yellow label spends a lot on television advertisment.Commercial during cable network movies, TV shows such as special drama, news, talk shows and SitcomProduct placement is also done in many of the shows.

Magazines:

Full page advertisment including Akhbar-e-Jahan, Mag, Family Magazine, Fashion & Business Magazine.

Internet:

Lipton Yellow Label advertises on websites such as Facebook & Yahoo.

Co-Branding:

Avaiable at big shopping malls such as Dolmen Mall, Park Towers & Millenium Mall.

Co brand

SWOT Analysis of Lipton

Swot analysis means company overall:

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

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STRENGTHS1. Unilever is a multinational company2. Strong brand image, loyalty and brand awareness in Pakistan3. Market leader as it has a 70% market share in branded tea.4. Strong and long-term relationship with distributors, wholesalers and retailers.5. Sound and experienced management and quality control staff6. Strong Ethical value (culture and heritage)7. Strong supply line and accessibility8. Strong financial position9. Quality, variety and success of the slogan10. Effective & attractive packaging11. Strong distribution structure12. Highly innovative and effective marketing team

WEAKNESSES

High prices of the product Substitute products Stiff/high competition Large advertising budget

Low market share in Karachi, Multan and N.W.F.P.

OPPORTUNITIES

1. High rate of population growth 2. Market opportunity of Lipton Yellow Label in rural areas3. Brand is the part if traditional drinking habits4. Research & development5. Makes people active6. Expansion in other areas of country7. Huge market to exploit8. Strong brand loyalty

THREATS

1. Strong competition in rural and urban areas2. Internationally increasing tea prices and nationally consumption of open tea.3. Political conditions in the country may be obstacle to exports4. High rising inflation in the country can negatively effect the brand5. Tapal’s recent marketing campaign and possible increase of tapal tea market shares.6. Smuggling and increasing prices of raw material raise the prices of tea products.

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BCG Matrix of Lipton The BCG Growth-Share Matrix is a portfolio planning model

developed by Bruce Henderson of the Boston Consulting Group in the early 1970's.

BCG Growth-Share Matrix

Question mark

Question mark is a stage in which company gets the high market growth rate of there product but very low relative share of market

Stars

Star is a stage in which company gets high market growth rate and high relative share of market. It is a stage in which company reach at its peak point.

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Cash cows

Cash cows is a situation in which company gains high relative share (cash generation) of their market but low market growth rate (cash usage).It is a stage in which Lipton yellow label falls in the current market situation.

Dogs

A dog is a condition in which the company has very low market growth rate and has a low relative market share. In such condition the company may shut down their work and exit the market.

Porter five forces model analysis

(Lipton yellow label tea)

Porter five forces model analysis includes:

o Bargaining power of suppliers

o Bargaining power of customer

o Competition among competitors/Rivalry

o Threat of new entranceo Threat of substitute products

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o Bargaining power of suppliers

The bargaining power of suppliers for Lipton tea is high in Pakistan because there is an import of tea leaves from different countries like bangladesh, Sri Lanka, Kenya and other countries.

o Bargaining power of customer

If consumers are fewer the bargaining power of the consumers is high. If the consumers are more then the bargaining power of consumer is high. The bargaining power of Lipton’s consumers is very high because there are many brands in the market, Like Supreme, Tatly, and Tapal dander at lower price.

o Competition among competitors/Rivalry

The competition of Lipton yellow label among competitor / rivalry is very high because the lipton tea is an international brand and has a large investment in the market. it has many competitor like tapal, supreme , tatly in the market . so they face a huge completion in the tea market in the market.

o Threat of new entrance

Lipton yallow label is faceing very few threat of new entrance in the tea market of Pakistan because of limited resoures and huge investment of capital is required to enter in tea market of Pakistan. So new enterance of tea company in the current market is har

o Threat of substitute products

Lipton yellow label is facing very high threat of substitute product in the tea market of Pakistan. It has also threat of technological changes of their competitor in his product. For example tapal has previously launched a new compaign.

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Feedback and control

Uniliver Company uses the different strategies to get market control such as;

Operating Control of Uniliver Strategic Plans of Uniliver market surveys Market Audit of Uniliver

Recommendations

Lipton yellow label should reduce its prices in order to become a more affordable brand.

Lipton yellow label should increase the use of tea vending machines to all the major cities in Pakistan.

Lipton should introduce its internationally recognized ice tea in Pakistan first on an experimental basis and if this taste clicks with the consumers of Pakistan Lipton stand to be the only tea brand providing the consumers with this product.

Lipton should market its tea bags in small quantity boxes as it has done with it’s lose tea.

Lipton ‘s out of home department is one of its major strengths it should be expanded

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Conclusion

Lipton yellow label (UNILIVER) company has a strong image in the international market due to large in size in term of financial and human resources capital and wider product range Lipton can look forward to competition in an encouraging and growing market with increasing demand expected to rise rapidly in the current market status.

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