Lipton Marketing Strategy Essay Example

age, occupation and income. To be specific, a majority of Australians are the descendants of British people and inherited their living habits and cultural traditions including drinking tea. In particular, they prefer to have black tea in bags and emphasize one-time brew.

On this basis, their tea culture is consistent with the consumption of Lipton tea. This product is appropriate for male and female consumption, because it is with the function of keeping healthy. It is researched that Australian women pay much attention to keeping fit (McColl-Kennedy, 2011) and there are about 100,000 women more than men in Australia (Mercer, 2008). Hence, the ongoing gender-role changes will influence who consumes the product or how it is consumed. However, people there do not have different consumption pattern in relation to tea due to the difference in ethnics, society, region or religion.

Consumers with different ages, sexes and occupations usually differ in their consumption of product. For example, young women may tend to pursue the function of losing weight while elder women attach much importance to health. In addition, students and professional people will be also different in consuming tea. Lipton tea does not have a very high price positioning, so this product is appropriate for the common public without strong requirement for income. However, this product is particularly suitable for professional women as the target consumers of Lipton tea. It would be very useful to concentrate on specific adopter categories.

In this way, they can better satisfy consumer needs. Moreover, groups at different stages of family life cycle might have different consumption patterns for the product. As a whole, housewife in the family

is involved in the whole purchase process. In addition to demographic variables, the market will also be affected by psychological variables such as lifestyle, personality, and purchasing motives. The selected product is appropriate for one distinct lifestyle in pursuit of health. In addition, such a product can satisfy different needs of different types of consumers such as quenching one’s thirst, refreshing oneself, reducing blood pressure, and preventing heart disease and so on (Burt, 2001). Introvert consumers often buy ordinary products such as black tea and green tea. By contrast, creative or adventurous consumers are inclined to buy some novel items such as Chai tea and ice tea. According to these, Lipton is suitable for different personality types due to its wide product range.

Tea is an ordinary product and its consumption will be little affected by emotions. Except external and internal influences, the product will also be subject to the situational and decision-process influences. Specifically, such a product is suitable for social contact such as talking with neighbors, friends or colleagues, and gift giving, which can be marketed for individuals, families, restaurants and companies (Burt, 2001). Seeing from decision process, different individuals apply different evaluative standards to select the tea, including brand, quality, price, taste, or etc. It is investigated that the current major tea brands in Australia are Lipton, Bushells, Lan-choo, and Madura.

Product positioning

Product positioning will only suffer from internal and decision-process influences (Quester, Pettigrew & Hawkins, 2011). In consumers’ mind, drinking tea is necessary to pursue a healthy lifestyle (Unilever, 2012), which is the general semantic memory structure for tea. The ideal version of this product the company

wants to serve is black tea in accordance with the Australian culture. Consumers usually use the following evaluative criteria in the purchasing decision such as price, quality, instant speed, and brand. Of them, instant speed and brand are most important, because Australians would like to drink instant tea and will not switch to another brand once they have identified a brand. In other words, if the tea marketed is not instant or is not the previous brand, consumers will give up purchasing. This is the decision rule of Australian people to buy tea.

Pricing Similarly

Pricing will also be affected by external factors, internal factors, situational factors and decision-process factors (Quester, Pettigrew & Hawkins, 2011). Under the influence of financial crisis and European debt crisis, an increasing number of Australian people prefer to pay in cash (McColl-Kennedy, 2011). To them, tea consumption is a part of living expenses. They totally have adequate income to afford the product. In view of their strong brand loyalty, it is not necessary for the company to lower price for getting an enough relative advantage to guarantee diffusion. In the household, the hostess as the actual buyer of tea evaluates the price of tea.

As a country with much lower long-term orientation index than China, Australia does not perceive price as an indicator of status. Economy in purchasing tea is relevant to the lifestyle of segments. Middle and high income consumers always attach much more importance to health than those low income ones (McColl-Kennedy, 2011). Price is not important to existing customers for buying tea. However, price is a significant aspect of the new consumers’ (who do

not drink tea before) attitudes towards the brand in this product category. The role of price varies with the type of situation. For instance, the product used for presents can price relatively higher.

Quester, Pettigrew & Hawkins (2011) divides decision process into five steps such as problem recognition, information search, evaluation alternatives, purchasing decision, and post-purchasing evaluation. A low price cannot be used to trigger problem recognition because of Australian’s steadiness. Price is not an important evaluation criterion. By contrast, if the product is the favorite of Australian people, they will buy it without considering the price (McColl-Kennedy, 2011). However, price is likely to be a pronoun of quality. For example, most westerners think that China made item is with inferior quality due to low price. Additionally, Australian consumers are not very likely to react to in-store price reductions.

Distribution strategy

Above four types of factors will also influence distribution strategy. The segments have the value of immediate gratification in terms of distribution. There is no big difference between female and male members towards the distribution system. However, working couples, single individuals or single parents might have different needs in relation to product distribution. For instance, working couples may hope the product is emailed to the office. The distribution system can capitalize on reference groups by serving as a meeting place for people with common interests. Tea is not a complex product and thus it does not need a high-service channel to facilitate its diffusion. The selected outlets mainly including supermarkets, convenience store, tea house, restaurants or hotels, and online stores can improve the desired product position, because some companies may be

absent in some distribution channels such as online stores (Burt, 2001).

Exclusive distribution system is identical with the lifestyle of each segment. To other distribution alternatives, each segment is easy to discredit the origin of the product. And its desired features will not change with the situation. Supermarkets and online stores are within the segment’s reference groups. This segment’s consumers will search information in these two outlets. Generally speaking, this segment will use convenience and product range to evaluate outlets. As usual, the outlet is selected after the product. If the outlets are not convenient or they do not have a wide range of products, customers may switch to other outlets.

Promotion strategy

Alike, promotion strategy will also subject to the influence of external factors, internal factors, situational factors, as well as decision-process factors (Quester, Pettigrew & Hawkins, 2011). These perspectives will be analyzed one by one. Values towards nature and health hold by the segment can be used in communications about the product. The scandal related issues should be avoided. It is likely to communicate with the selected segments in accordance with the emerging gender-role perceptions of each segment. The non-verbal communication system of each segment refers to advertisement. Reference groups can be used in the advertisements by direct and indirect means. Moreover, the advertisement can help to make the product part of one role-related product clusters. Opinion leaders cannot be reached but influenced.

If the product is an innovation, promotion can overcome some diffusion inhibitors. People who are likely to purchase the products should receive the information regarding the products. The messages such as drinking better and living better

are closely related to the purchase motives of the segment, which can help consumers lessen motivational conflict if necessary. The company has considered emotional implications of the advertisement regarding the product usage. The lifestyle portrayed in the advertisements is coincident with the desired lifestyle of the chosen segments.

The promotion campaign does not illustrate the full range of appropriate usage situations for the product. Problem recognition will not be emerged naturally and must be generated by advertisement. Before problem recognition, the segment will search product information. After it, the segment will attend to the information related to the brand. Taste, package size and function are used to make a decision in purchasing tea. Post-purchase dissonance is likely caused by the inconsistency between product and function, which cannot be reduced by promotional campaign. Moreover, the company has designed messages to promote repeat purchases and brand loyal purchases.

Product

Product is one of 4P’s strategies except price, place/distribution, and promotion. It will also face external influences, internal influences, situational influences and decision-process influences (Quester, Pettigrew & Hawkins, 2011). Seen from external influences, the product designed is fit for all the members of the market segment. For this reason, it is able to cater to different demands of different household members. If the product is an innovation, it will possess requisite relative advantage and is not complicated to diffuse rapidly. The desired image of Lipton tea is refreshing and consumers can actually have such a perception.

That is to say, the product is perceived in a manner consistent with the desired image. Moreover, the product will satisfy the key purchase motives of the segment

such as in pursuit of health, relieving thirst, and etc. From the perspectives of the segment, an ideal tea is natural and healthy, which is consistent with Lipton tea. What’s more, the product is appropriate for many potential usage situations such as drinking and sterilizing. The alternatives of tea are water, wine, alcoholic beverage, and nonalcoholic beverage (e.g. fruit juice). It performs better than those alternatives on some important evaluated criteria used by this segment such as healthcare function. Lipton tea will perform effectively in keeping fit and losing weight. It is assumed that the product will perform worse than expected by this segment. After all, drinking is not the single factor of losing weight.

Consumer satisfaction and commitment

It has often been said that “Customer is god”. Owing to this, any organization must attempt to improve customer satisfaction and commitment for survival and development so that customers make repeated purchase (Kardes, Cronley and Cline, 2011). One of major reasons for Lipton tea has rapidly penetrated to so many markets can also attribute to that it has obtained high customer satisfaction and customer commitment. On the one hand, Lipton tea has a wide product category which can improve the satisfaction of customer.

In addition to product category, nature, quality, function and culture lead to customer satisfaction. Price is not an important factor that causes customer commitment to Lipton brand. On the contrary, product differentiation, high-quality service and sales philosophy are factors enabling to lead to customer brand loyalty. In addition, the formulation and implementation of all strategies including market segmentation, positioning, pricing, promotion and product strategy is for the sake of better

satisfying customer needs so as to reach the aim of enhancing consumer satisfaction and commitment.

Conclusion

According to the above overview, the report gets the following conclusions. First of all, the market for Lipton tea is mainly segmented by culture, gender, occupation, purchasing motives, and lifestyles. Secondly, product positioning is primarily considered from general semantic memory structure, the ideal version of this product and the evaluative criteria. Thirdly, pricing strategy is mainly affected by consumption habit, ability and culture. Fourthly, distribution strategy is related to values and exclusive distribution is regarded as a distribution system in accordance to consumer lifestyle. Fifthly, promotion strategy is also relevant to values and advertisement is regarded as its promotion strategy. Sixthly, product strategy adopted by the company is designing multiple categories of products to satisfying varying needs of different customers. Finally, customer satisfaction can be achieved by product category, nature, quality, function and culture while customer commitment needs to be reached by product differentiation, high-quality service and sales philosophy.