Lipton Marketing Plan Essay Example
Lipton Marketing Plan Essay Example

Lipton Marketing Plan Essay Example

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  • Pages: 14 (3582 words)
  • Published: June 5, 2017
  • Type: Case Study
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CHAPTER 1

INTRODUCTION

Green tea is widely consumed in Pakistan and is regarded as a health-promoting beverage. The idea behind this project is to conduct a brand-blind taste test for green tea and devise marketing strategies. For this, we have chosen two leading brands of Pakistan i. e. Lipton and Tapal. Their corporate profiles are briefly discussed below Lipton is one of the world's great refreshment brands, making a big splash in the global beverages market with tea-based drinks including leaf tea, infusions, ready-to-drink tea and other healthy, refreshing alternatives to soft drinks.

Lipton is painting the world yellow with a marketing campaign that represents all that Lipton stands for — brightness, vitality and fun with natural goodness. The parent company of Lipton is Unilever. Unilever Pakistan Limited is a Pakistan-based company. The Company manufactures and markets home and personal care products,

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beverages, ice cream and spreads . The Unilever Pakistan Limited (UPL) was established in Pakistan in 1958. Unilever Pakistan is the largest FMCG Company in Pakistan, as well as one of the largest multinationals operating in the country.

Unilever has consolidated its green tea line under its Lipton ‘Clear Green’ brand, which includes its original pure flavor alongside three newly launched flavors – Jasmine, Lemon and Mint. “Lipton tea can do that” is the positioning statement of Lipton.

Products:

  1. Clear green: Mint
  2. Clear green: Lemon
  3. Clear green: Jasmine 4
  4. Clear green: Natural

ABOUT TAPAL HISTORY The journey of Tapal's remarkable success is the combined efforts of three dynamic generations of the Tapal Family. In 1947, Tapal started out as a family concern under the personal supervision of its founder, Adam Ali Tapal.

Against tough competition Adam Ali's unique

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blend, later named Family Mixture, became a hot favorite and eventually the largest selling brand in the unorganized tea market. From this auspicious beginning, Tapal moved from success to success introducing tea brands to suit every taste and pocket, sold from its retail outlet in Jodia Bazar, Karachi. The quality of Tapal teas soon became legendary and people from all parts of Karachi started lining up at the outlet to purchase tea. For their convenience, Tea distribution was initiated to retail outlets around the city.

The company continued to grow under the management of the founder's son, Faizullah A. Tapal. Today Tapal Tea is managed by the founder's grandson, Aftab F. Tapal. After studying abroad, Aftab Tapal returned to Pakistan to introduce professional management and unique production ideas to the business. A well trained tea taster and tea connoisseur himself, Aftab Tapal introduced new tea concepts and developed a wide range of tea blends catering specifically to the tastes of people throughout Pakistan. His progressive outlook resulted in giving further strength to the foundation of quality laid by his family.

Making a modest beginning over half a century back, today Tapal has become the largest, 100% Pakistani owned Tea Company in the country. It has modern tea blending and packaging factories, warehouses equipped with state-of-the-art equipment and a team of highly dynamic professionals headed by Aftab Tapal himself.

SHARED VALUES

  1. Trust in Each Other Tapal believe that trust is the foundation of our business actions. It believes that honesty is absolute and that integrity cannot be compromised. All our actions are guided by fairness and sincerity of commitment.
  2. Outstanding Quality Tapal believes in dedicating ourselves to achieving an

outstanding quality in all our activities. Excellence is a journey, not a destination. Quality is a way of life for us.

  • Passion for Creativity Tapal is open to novel ideas in every aspect of our business of choice. Tapal believes in providing an environment which supports individual opinion and efforts, inspires and enables everyone to use their creativity and entrepreneurial flair.
  • Leadership They are committed to being the No. 1 national company in our business of choice; a role model for others to follow. They believe in empowering individuals at every level. We encourage the use of judgment and decision making with ownership and accountability. We believe empowerment creates leadership.
  • Together, Everyone Achieves More  They believe in unity and purpose of value the benefit of coordinated efforts. With a common goal and team spirit we will fulfill the needs of internal and external stakeholders. BRANDS| Tapal is proud to have been a part of Pakistan's history since its inception. As a company they have grown and flourished together with the great nation. Founded by Adam Ali Tapal, the company first started marketing a number of quality blends to Pakistani consumer market.
  • Through continuous innovation and research and development they gain a big share of Pakistani market. They still are growing and hope to be a leader in a market in coming years. Tapal is the heart brand of green tea in Pakistan. “Shades of green” is a brand of Tapal manufacturing green tea in Pakistan. In the year 2000, Tapal became the first tea company to launch a range of flavored green teas in the country. The real achievement lies in the fact that Tapal has

    maintained the leadership position in this category for over 10 years. Tapal is currently the market leader with 65% market share.

    Available in refreshing Jasmine, Lemon, and Elaichi flavors, Tapal Green Tea is blended using the finest tea leaves and specially selected flavors, to create the perfect harmony of taste and aroma. A favorite of health-conscious people, the brand delivers a wealth of benefits. It helps to soothe and relax you whilst helping in digestion, enhancing metabolism and aiding in weight loss. Jasmine Green Tea was introduced first and is a winning combination of an alluring fragrance and health-giving properties. Then came Elaichi green tea with its unique nature that lifts your mood and helps you achieve a new level of clarity; ollowed by Lemon, with its crisp taste and refreshing aroma. People of every age enjoy cups of Tapal Green Tea after meals and in the evenings to soothe away the cares of the day and enjoy a healthy lifestyle. “A new shade for a healthy lifestyle” is the positioning statement of Tapal shades of green.

    Products:

    1. Jasmine
    2. Lemon
    3. Elaichi

    THE INDUSTRY

    Tea has never been an indigenous product of Pakistan, but it is so deeply rooted in our culture that most of us would declare it the country’s national drink without a second thought.

    This tenacious hot brew attained permanent shelf life in the hearts and minds of the nation ever since it was introduced by the British during the colonial era, and now as the West’s increasing preoccupation with health and health-related products permeates our media, the spotlight has fallen on black tea’s counterpart. Green tea is the new black for those living up to the global

    health kicks, and local market giants, Tapal and Lipton have both opted to capitalize on this trend.

    As a product, green tea has had a long history and presence in Pakistan, though at a scale which has largely been overshadowed by black tea. While black tea consumption stood at an astounding 170,000 tons last year, the consumption of green tea was a mere 500 tons. Pakistan’s ‘healthy hedonists’ are particularly focused on the issue of digestion, hence the emphasis on food consumption and tea drinking. Green tea’s health benefits to a daily lifestyle will aid in changing the general perception that green tea is a product only to be consumed in the cold winter months.

    Tapal has opted to reinforce this emerging green tea culture by playing upon health benefits, but unlike Lipton, the emphasis of the campaign has been on creating an emotional connects between the consumer and the product.

    COMPETITION

    Green tea market is a small market so the competition is too intense. The main competitors are Lipton and tapal. Trying to build the green tea market in the midst of a recession is yet another major hurdle for both Lipton and Tapal, especially as the branded green tea category faces the drawback of eing a comparatively pricey product. At the retail level, a limited survey of shops across Karachi indicates that both Tapal and Lipton currently stand out from the crowd of foreign green tea brands and flavored tea in terms of packaging, price and most significantly, placement. Both brands are prominently displayed occupying positions next to the more popular products which either company produces, lending them support, credence and visibility on the shelves.

    Additionally, both Tapal

    and Lipton’s SKUs range at comparatively modest, competitive prices, breaking down to two to three rupees per teabag, while foreign brands such as Tetley and Twining range seven rupees and up, per teabag. According to the retailers at these shops, Tapal has struck big with its value-addition sample pack, in which all three flavors are available for the consumer to try out. In the limited market, both the brands also face competitive pressures from the imported brands as well as local unbranded green tea sold openly in the market.

    The imported brands cost on an average thrice the price of well established local brands such as Lipton and Tapal. Following are the imported brands available in the market:

    • Alokozay
    • Twinings
    • Aroha Direct competition of Tapal green tea is with Lipton green tea.

    Indirect competition of tapal is with tea, loose tea and other teas available in market. Generic competition includes all the generic products which can fulfill consumers’ generic needs. Last one is budget competition that includes the alternatives.

    Market Analysis

    Green tea is the new black for those living up to the global health kicks, and local market giants, Tapal and Lipton have both opted to capitalize on this trend. This tiny market is segmented into those who prefer loose, unbranded green tea (popular year-round in Baluchistan, NWFP and further north) and those who prefer the more up market branded green tea, with sales restricted to the larger urban centers and towns across the country. This branded segment of the market constituted only 200 to 225 tons last year, with a majority of sales taking place in winter, as green tea’s consumption is currently tied directly to

    seasonal shifts.

    Tapal was the first to enter this small-scale market in 2000, and is currently the market leader with a 65% share in the branded green tea market. Having been the first to launch green tea in teabags, the company also explored multiple flavors to form its current line of Elaichi, lemon and jasmine flavored green tea, available under the new, ‘Shades of Green’ banner. Following a similar strategy, Unilever has consolidated its green tea line under its Lipton ‘Clear Green’ brand, which includes its original pure flavor alongside three newly launched flavors – Jasmine, Lemon and Mint.

    According to Sami Wahid, Brand Manager, Tapal Green Tea, the company has seen a 43% growth in green tea sales this year, surpassing all expected sales targets. He says Tapal is yet to see profits from the product due mainly to the small size of the market, but he believes green tea consumption can easily swell to 2,500 tons or more annually. The Lipton team is also aware of this fact, and they see future growth in terms of a brand new market with a separate identity from black tea. As Aamir Malik, Creative Director, Blitz DDB explains: “Green tea is not going to cannibalize regular tea’s market, as it is not a substitute.

    Green tea is essentially taken with heavy, rich meals, while regular tea is usually drunk separately. It’s generally consumed for its therapeutic value. ”

    PEST ANALYSIS: The external macro environment in which a firm operates can be expressed in terms of the following factors Political Economic Social Technological PEST analysis is used to describe a framework for the analysis of these macro environment factors.

    POLITICAL FACTORS: These factors

    and government interventions can make or break the industry. The political factors have played a very benign role for the tea industry.

    The political arena has a huge influence upon the regulations of the businesses, and spending power of consumers and other businesses. The political environment of Pakistan is relatively unstable in the current situation. The investors are not willing to invest in Pakistan. However, WTO and trade policies encourage the import of raw materials for Tea industry. Tea Import Quota It is an important consideration. Each year there is a certain quota on tea import in total imports of Pakistan. Each player is given quota to import and manufacture so one can say that it is a regulated industry.

    Diplomatic Relations: The relations with the tea producing nations and Pakistan play a vital role as large part of imports comes from Kenya, but now Pakistan is also importing tea from India. Unstable Geographic Conditions Pakistan is situated at a very critical and geographically strategic location. Due to the uncertainty new investors are not ready to invest in Pakistan.

    ECONOMIC FACTORS: Economic conditions of an environment have a direct impact on the development of any industry. The recent economic recession in the world has had an impact on Pakistan’s economy as well.

    Pakistan's economy mainly encompasses textiles, chemicals, food processing, agriculture and other industries. In 2005, it was the third fastest growing economy in Asia. Since the beginning of 2008, Pakistan's economic outlook has taken a dramatic downturn. Security concerns stemming from the nation's role in the War on Terror have created great instability and led to a decline in FDI from a height of approximately $8 bn to

    $3. 5bn for the current fiscal year. Concurrently, the insurgency has forced massive capital flight from Pakistan to the Gulf.

    Combined with high global commodity prices, the dual impact has shocked Pakistan's economy, with gaping trade deficits, high inflation and a crash in the value of the Rupee, which has fallen from 60-1 USD to over 80-1 USD in a few months. For the first time in years, it may have to seek external funding as Balance of Payments support. Inflation remains the biggest threat to the economy, jumping to more than 9% in 2005 before easing to 7. 9% in 2006. In 2008, following the surge in global petrol prices inflation in Pakistan has reached as high as 25. 0%. The central bank is pursuing tighter monetary policy while trying to preserve growth.

    Foreign exchange reserves are bolstered by steady worker remittances, but a growing current account deficit - driven by a widening trade gap as import growth outstrips export expansion - could draw down reserves and dampen GDP growth in the medium term.

    Social Factors

    The social and cultural influences on business vary from country to country. It is very important that such factors are considered. People are socializing more may it be events or casual visits to friends and family. Tea has always been an integral part of Pakistani culture and rituals. It is understood that tea would be present at all events.

    Changing Trends

    As work environment is becoming more stressful; people require different forms of refreshment and intakes to increase their energy levels. This further increase the intake of tea at workplaces, tea is not only just available to the employees when needed but is

    also served twice a day in order to keep them going. On the other hand, media expansion, growth of advertising as a separate industry has resulted in greater exposure of all the brands and masses. Hence social factors and changing mindsets have positively affected this industry Tea has always been acceptable in all social classes because of its usage.

    Green tea has recently gained a lot of popularity due to health reasons and is largely consumed. Another factor is the emergence of ice tea which is indirectly competing with soft drinks.

    TECHNOLOGICAL FACTORS: Technology is important to gain an edge over competitors and it drives globalization. Technology helps companies to reduce cost and achieve economies of scale. Technology also leads to the development of new products and sometimes even segments. Tea manufacturers like Unilever and Tapal already manufacture tea of the highest quality and they achieve it by the state of the art production facility that they have.

    Lipton has also installed its own plant of Danedar tea production.

    PORTER’S FIVE FORCES: RIVALRY AMONGST COMPETITORS The competition in the tea industry is high. Since there is low switch cost for the customer there is a tendency amongst them to buy substitute brand if the brand they have been consuming is unavailable for any reasons. There are a moderate product differences and brand identities between the competitors.

    THREAT OF NEW ENTRANTS Threat of new entrants is high. This is evident by the immense growth in the industry and government policies are also encouraging new Tea houses to emerge on the scene.

    The taxes on import of tea are reduced thereby decreasing the cost of production. It can be taken as positive sign

    by a prospect player. Initially it was thought that no company would survive against the giants of Unilever but since Tapal people have started thinking that local brands can do well and new players might decide to come into this market.

    THREAT OF SUBSTITUTES In this case tea will always remain an integral part of our culture. There is a low switching cost associated with the trade off of substitutes. It can easily be assumed that the demand for green tea is increasing.

    Change in patterns can be observed because consumers are shifting from normal tee to green tea.

    BARGAINING POWER OF BUYERS The bargaining power of buyers is low because of the high demand and low availability of substitutions. Although due to increased competition prices remain competitive but buyers have little or no bargaining power.

    BARGAINING POWER OF SUPPLIERS Bargaining Power of supplier is high because there are few suppliers of tea. The reason why there are few is because there is a specific taste of tea that consumers like so the manufacturers are forced to choose from few options.

    In Pakistan tea is imported majorly from Kenya and Srilanka so the supplier is at power to influence the price due to the limited availability of the raw tea. In Pakistan recent plantation of tea farms may favor the local manufacturers and foreign suppliers may find a reduction in their bargaining power. Overall attractiveness?

    SWOT ANALYSIS

    TAPAL INTERNAL FACTORS | STRENGTHS | WEAKNESSES | Management | Experienced, broad base of interests and knowledge | Large size may lead to conflicting interests | Product Line | Differentiated, Variation in products | So much product lines but still not able to knock out

    loose tea. Marketing | Diverse, and local awareness | May lose focus, may not be segmented enough | Personnel | Very experienced, high knowledge | Possible conflicts due to so many people, possible trouble staying focused | Finance | High sales revenue, high sale growth, large capital base | High expenses, may have trouble balancing cash-flows of such a large operation | Research & Development | Continuous efforts to research trends an reinforce creativity | Sometimes they conduct research but the advantage is taken over by small competitors. | EXTERNAL FACTORS | OPPORTUNITIES | THREATS |

    Consumer/Social | Increase in the population | Illiterate people go for loose tea which is substandard as well | Competitive | Distinctive name, product and packaging in with regards to its markets | Intense competition can pay so they have to keep eyes open| Technological | Maintenance of proper website which subscribes and provides information regarding long production line. | Competitors are global leaders so they have more technology as compared to Tapal | Economic | Consumer income is high for the loose tea. | Very elastic demand, almost pure competition |

    LIPTON Strengths:

    1.  Already a market leader and a well-known and reputed brand.
    2. Extensive knowledge of local culture and tastes.
    3. Wider product range with technological superiority, e. g. Brooke Bond’s hot tea can.
    4. Experienced and quality management.
    5. Strong Ethical value (culture and heritage)
    6. Strong financial position

    Strong company image Weaknesses:

    Having too many brand extensions can dilute and confuse consumer perception and give fresh and new competitors to seize market share.

    Opportunities:

    1. Declining markets for other beverages.
    2. Greater awareness of health benefits of green tea.

    Threats:

    Overcrowded and small market might cause significant demand reduction.

    Presence

    of other major players such as Lipton and foreign brands leading to tough competition.

    CONCLUSION

    After doing the industry’s overall analysis using PEST and Porters five forces and briefly discussing the Internal and external factors of both major green tea brands of Pakistan using SWOT we have come to the conclusion that the green tea industry of Pakistan is a growing as well as attractive, though the rivalry as well as barriers to entry are high there is still a lot of potential in this market.

    Due to the changing trends and more health conscious customers the green tea market is flourishing and if Unilever and Tapal will use the right strategies and implement them correctly they will make huge profits from this market industry. After studying the whole industry we have also concluded that Tapal; shades of green is currently the market leader of Pakistan with a market share of 65%, and Lipton is the greatest competitor of Tapal as Lipton too is trying the level best to replace Tapal’s position in the market as the leader.

    A detailed study on Tapal will be done in the later chapters of this report in which we will discuss the strategies which Tapal can opt in order to retain its market share and leadership position. We will also talk about the Company’s current selling proposition, its 4 P’s, STP and other information, after the brand- Blind taste test when we’ll be having a clear idea of what customers want and will be in a much better position to decide about the overall strategies and Marketing plan of the Company.

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