Institute of Business & Technology

Program: Presented to:

M.B.A
(Evening)

Sir. Ahsan Nawaz

Group members:
M. Nadeem Baig (BM-25390) M. Ovais Sabir (BM-25386) Yasir Rasheed (BM-25396)

By

Letter of Transmittal
April 19, 2011 Sir Ahsan Nawaz BIZTEK

Respected Sir, Here is the report you requested entitled Lipton Tea, along with the recommendation of uses of Tea. The study includes both primary and secondary research. The primary study focused on a Lipton tea company currently operating in the market. Although the import of Tea has increased in recent years, Recommendation is to exploit the opportunities of self cultivation can be expanded enough to make Pakistan quench the consumer market within the country. Through the course of the term, we were given the opportunity to learn much about the tea industry and import business in general. We feel that this knowledge will be helpful in future work terms, and in our career.

Sincerely, M. Ovais Sabir Yasir Rasheed M. Nadeem Biag

Acknowledgement

Our heads bow before our first and for most guide, our beacon and strength, the ALMIGHTY ALLAH. Thank you ALLAH for giving us strength, knowledge and power to stand-up after small failures, and for impossible, possible for us.

As best is always saved for the last, well always be obliged to our dearest teacher Sir Ahsan Nawaz, who guides us in shaping this report and enhancing our skills for report writing.

Table of Content
1. Introduction of company 2. Target markets

3. Buying behavior 4. Competitive strategy

5.

Branding & Packaging

6. Marketing Mix 7. Product life cycle 8. Recommendation 9. Conclusion

Introduction of company
Unilever was formed in 1930 when the Dutch margarine company Margarine Unie merged with British soapmaker Lever Brothers. Both companies were competing for the same raw materials, both were involved in large-scale marketing of household products and both used similar distribution channels. Between them, they had operations in over 40 countries. Margarine Unie grew through mergers with others margarine companies in the 1920s. Lever Brothers was founded in 1885 by William Hesketh Lever. Lever established soap factories around the world, and had plantations in many Third World countries. In 1917, Lever began to diversify into foods, acquiring fish, ice cream and canned foods businesses.

However, in spite of Unilevers vast size and presence worldwide, the companys actual visibility is surprisingly low. Anonymity hides the companys importance. Unilever does not retail under its own name, preferring brand names to create the illusion of diversity. Who does not know brand names like Magnum, Omo, Dove, Knorr, Ben & Jerrys, Lipton, SlimFast, Iglo, Unox, Becel, and Lever2000? Theyre all part of the Unilever armada of brand names. To make sure the brand names do not go unnoticed, Unilever spends huge amounts of money on marketing and advertising. Advertising has always been a keystone of Unilevers businesses.

Our Assignment
Unilever is offering various products with their many variants including food and home and personal care products. We selected Lipton Yellow Label as our assignment. Lipton Yellow Label is one of the world's great refreshment brands. In Lipton we have few variants such as:

Lipton Yellow Label pack

Lipton Yellow Label Value Pack

Lipton Yellow Label Jar

Lipton Green Tea

Lipton Green Tea Jasmine

Lipton Green Tea Mint

Lipton Green Tea Lemon

Lipton Yellow Label

Lipton is one of the world's great refreshment brands, making a big splash in the global beverages market; it is the epitome of international quality. Lipton Yellow Label's assurance of quality has helped it become the world's largest selling tea brand. Specially plucked from the best tea gardens of Kenya and blended to perfection - it is truly the gold standard in tea. The 100% International Blend - made with one of the best technologies available in the world, has been brought to you to provide the finest tea drinking experience.

Competitive Strategy

COMPETITORS ANALYSIS
The tea industry is divided into two segments. They are: Branded Tea Unbranded Tea Lipton is facing a tough competition from both the segments as the unbranded tea has almost half the share of the total tea industry. The current tea imports are 140,000 tons. The major competitor for Lipton is LIPTON especially as the sales competition from this brand in the tea industry is getting cut throat. Lipton is a clear market follower in all over Pakistan as it caters to all the areas rural and urban alike. Lipton Yellow Label is definitely a market leader claiming that it is a premium top of the line product with a sign of good taste. Lipton has countered this competition strategically by creating positioning and brand pull in customers mind so that they have a separate identity of their own. Catchy slogans like HER LAMHAY KI CHAH for Lipton Yellow Label Tea, focusing on the free and radiant spirits of the youth which has also been tagged along with ZINDAGI MAIN BHARO NAYA RANG is the slogan For Lipton, this positions on the completeness and togetherness of the family and position Lipton integral part of the Family.

Target Market
In order to reach the target market we at LIPTON went through a number of steps to identify the potential customers. The target market at the end of the day becomes the most important aspect for LIPTON to target and satisfy the needs and wants in the best possible way yet yielding profits for the company. These steps are: market segmentation, market targeting, and market positioning. The whole market segmentation aspect is covered in the following tables which uses the segmenting variables.

Segmentation

Geographic: Density Climate

Karachi & Lahore Urban Can be taken cold as hot conditions are more prevalent throughout the year.

Demographic: Age Income Social class 5 years and above Rs.30, 000/- & above Upper and upper middle class

Psychographics: Life style Personality Value oriented, sociable & active Compulsive, health conscious & ambitious

Behavioral: Occasion Benefits Regular & special occasion Quality, economy, convenience nutrition, uniqueness and

User status

Non user, potential user and first time users

Macro Environment
Political:
The first element of a PEST analysis is a study of political factors. Political factors influence organisations in many ways. Political factors can create advantages and opportunities for organisations. Conversely they can

place obligations and duties on organisations. Political factors include the following types of instrument: Legislation such as the minimum wage or anti discrimination laws. Market regulations Trade agreements, tariffs or restrictions Tax levies and tax breaks Type of government regime eg communist, democratic, dictatorship

Economic Factors:
In Pakistan, the purchasing power of the consumers is increasing. The rich families are becoming richer and the poor families are becoming poorer thus the economy is becoming more saturated. However due to the overall economic developments, the life style of the people is improving and thus purchasing power has enhanced.

Socio-Cultural Factors:
In Pakistan, the concept of tea is that of a hot drink that is served with milk, which is taken in the leisure time. On the other hand the product that we intend to introduce is totally on the contrary. Our product is a strawberry flavored instant tea drink more like a shake served in cans with extra wide straws to enjoy the drink while chewing the tapioca balls thats not only exciting but a part fun.

Technological Environment:
We at LIPTON are aiming to provide a high quality LIPTON YELLOW LABEL using the latest technology available. Tea blending and tasting is considered top priority at LIPTON. In order to do this we require a tea manufacturing plant through this modern facility tea is going to be blended and packaged in hygienic conditions untouched by human hands. In order to utilize the latest technology we intend to launch LIPTON YELLOW LABEL in metal free Plastic cans. This technology will help us in keeping the tea fresh and packaging costs economical.

Branding & Packaging

Delivering on Customer Desire Relevance Value Positioning Portfolio Integrated Marketing Activities Management Support Monitoring

The desirable taste for tea in Pakistani market, especially in Karachi is strong. Liptons taste is weaker than what the average consumer desires.

Liptons Packaging

Weakness:
Showing black tea on the packet while 90% of consumers drink milk-based tea.

Proposed
Can show fresh green leave which May ad nice effect? Can show milk-based tea which the consumer can relate to.

MARKITING MIX (4 Ps)

1) Product
Lipton Yellow Label Tea is a brand extension.

Branding:
LIPTON is already a well established brand in Pakistan. Therefore, customers would not have any issues regarding the quality of Lipton Yellow Label Tea. Especial attention would be paid to its design. The design of the packet would be delicious.

Packaging:
The packaging would be done in yellow and orange colour so as to give effect of rising sun. The purpose of packaging would be to protect the drink and to attract consumers with the presence of the shiny sun which attracts the consumers that by drink Lipton yellow label tea they start their day with refreshing and full of energy with great thoughts.

Labeling:
The labeling of Lipton Yellow Label Tea would consist of Logo of LIPTON along with the name Yellow Label Tea. It would have Lipton Yellow Label Tea content along with its Date of manufacturing, when it was made.

2) PLACE:
After the tea is manufactured it would be send to distribution centers from where it would be distributed to retailers. This would be followed in all the cities where Lipton Yellow Label Tea would be launched.
Factory

Distribution canter

Retailers

Customers

3) Pricing:
LIPTON would follow market penetration strategy for its Yellow Label Tea in the beginning. Factors which would be involved in setting price are:

Costs:
Fixed and variable cost would influence the pricing of Lipton Yellow Label Tea

Elasticity:
Our Tea drink is not considered a luxury product and not an essential food item therefore it has elastic demand a rise in price would cause the demand of Instant tea drink to decrease and a decrease in price would probably lead consumers to buy more.

Competition:
Our Lipton Yellow Label Tea prices may not be affected by competition as Lipton Yellow Label Tea is the innovative product that is uninitiated in Pakistan and a niche thats un- touched by other competitive companies.

4) Promotion:

Budget for Advertising:

Promotions through hotels and restaurants: Rs. 0.8 million Ads would be placed on different channels to capture larger market and also to inform customers of new trends hitting the tea industry.

Local Newspaper expenditure:

Rs.0.2 million for newspaper ads would be placed on Sundays and Saturdays rather than the whole week as it will reach more customers and highest target market. Billboards and companys activities together, account for approx 0.5 million in the advertising budget.

Product Life Cycle

GREEN TEA
ICE

BLACK TEA

Introduction Decline

Growth

Maturity

Implications
The industry is in the maturity stage, so competing firms in order to gain market share, constantly innovate and frequently use price-cutting. They also increase communication channels like advertising and sales promotion to entice brand switch. Green tea has is in the growth stage and we believe that there is a potential for growth given that green tea provides health advantage. Thus this property will attract health conscious people. Ice tea is in its introductory stage, it was recently test marketed in Karachi which resulted in a successful response in future it will be coming

up with new flavours and has a potential to gain a large market share as soon it is launched nationally.

Recommendations
Market:
The need is to first develop a segment on the basis of their needs, and then focus should spread upon their needs. They should be updated with the latest trends in the market, what are the needs and changes taking place in market. They should go for market research to change the latest trends and changes in the market segments.

Segmentataion:
Unilever at this time has segment its market much biger and certain irrelevant portions which are not enough profitable. The following lists the recommendations for Lipton with regard to:

Brand positioning of Lipton iced-teas:

As more segments are targeted, the product should offer greater flexibility and choice to cater to a wide range within each segment. For example, it could offer different types of packaging, and in different quantity (volume) with different prices.

Conclusion
The tea import bill mounts to US-$ 220 million in 2008 and the population is 164 million this implies a US-$ 1.3/person (Rs 104/Person) of tea in a year. The import share of tea is 13% from total imports and trend analysis shows in increasing trend. This is mainly due to the economic boom from 2002 2008 where consumer markets have been steadily. Other facts for import bill to increase are currency devaluation and inflation. However, this does not explain the deceleration in the rate of increase in import. The consumer market in Pakistan does not have many branded teas (Tapal and Unilever being prominent). The market is like with the culture indulgence of tea and the brands are exploiting this for their sales campaigns. Companies have strategically launched different contains a

special place in Pakistani culture so it has a significant impact on bonding families and promoting a non-alcoholic environment.