MARKETING MANAGEMENT I

Tea Industry
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Group No. 7

TEA INDUSTRY
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Discovered in China in 2737 B.C

Assam Darjeeling Nilgiri

FOUNDATION

PLANTATION AREA

Assam Frontier Tea Ltd (now Apeejay Tea) The Kalyani Group

Tata Tea Ltd Hindustan Uni Lever Lipton Wagh Bakri

CURRENT PLAYERS

COMPANIES PRIOR TO INDEPENDENCE

References http://www.indianetzone.com/

TEA INDUSTRY CONTD.

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84% is consumed by the domestic market

Overall production of tea in India surged by 12.3% Total turnover = Rs 10,000 crores

Total net foreign exchange = 1,850 crores per annum

1692 Tea Manufacturers, 2200 Tea Exporters , 5848 tea buyers

Tea bag segments market share = 9%

References http://www.stockmarketsreview.com/

MARKET ANALYSIS
4

The assessment of the target

market by looking at the market trends.

Rs Cr

Region wise sales 1,800 1,600 1,400 1,200 1,000 800 600 400 200 24% 15% 9%

91% 12% 2%

Global Scenario :

In 2008, the total tea production was around 3.75M and around 80.0% of it having produced by India, China, Kenya, Sri Lanka and Vietnam.

USA

Europe & ME

Canada and SA

Regions

2009

Figure : Region wise sales of 2009 and 2010 (Source : Year End Analyst Presentation 2009-2010)

References : http://www.zero2ipo.com.cn/en/n/2009-6-6/2009625163506.shtml

Asia Pacific
2010

UK & Africa

South Asia

MARKET ANALYSIS
5

Indian Market Fourth largest in terms of production. Total turnover is about Rs. 10,000 Crores. Tata Tea Among Indias first Multinational companies to have entered the tea market. Market Share Tata Tea is the market leader in India with a market share of 21.6%. It is also a market leader in Poland in the Earl Grey Category with a 19% market share. It accounts for a worldwide tea business of about 86% of the turnover and the remaining 14% is from bulk tea, coffee and investment income.

(Source : Year End Analyst Presentation 2009-2010)

References : www.tatatea.com

MARKET ANALYSIS
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Submarket: The submarket entered by Tata Tea Ltd. is based on the use and price. On the basis of use, the products are primarily categorised as Bulk Tea, Instant Tea, Packet Tea, Coffee and Strawberry.
S.No Brand Experience

1. 2.
3. 4. 5. 6.

Tata Tea Premium Tata Tea GOLD,

TataTea Agni Gemini Chakra Gold Temptation

The Promise of Freshness Aroma coupled with a refreshing taste Economy Segment Dust Tea High quality Assam CTC Dust teas Premium, orthodox leaf tea

Market Segment: Social Class: The working class is either in the category of middle class or upper middle class. Age: Youth who are energetic, knowledgeable, trendy and ambitious.

References : www.tatatea.com

MARKET ANALYSIS
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Market Positioning:

Taste kamyaabi ka
TATA TEA

Initially

Premium

Popular

1st campaign

Jaago Re Aimed at Social awakening of Indian Culture

International blend for discerning customers

Great leaves, Great taste

Ab se khilana band, pilana shuru Aimed at corruption started in Dec nd phase 2009 in association with Fever FM 2 of Jaago Re and Radio MIRCHI.

Pricing: Tata Tea has got the leading price activity in the market. They have got the economy packs, the premium packs and the value packs of tea.

References : http://www.jaagore.com/ http://www.radioandmusic.com/content/editorial/news/tata-tea-ropes-fever-mirchiphase-ii-jaago-re-campaign

MARKET ANALYSIS
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Market Trends: China dominates the global tea production.

A supply shortage is expected to increase the procurement cost for companies. Tata Tea has outperformed in 2010, gaining almost 25% of the market share.

Distribution Distribution of Tata tea is through retailers and dealers.

References : http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/Growthprospects-fire-up-tea-stocks/articleshow/6084261.cms

MARKET ANALYSIS
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Profitability: The company showed a profit of 43% in 2008-2009. Promotion: Primary aim of Tata Tea Limited is to build brand awareness and differentiate their various products from the competitors through trade-sales promotion to support distribution strategy. Key Success Factors: Strong Brand Image and Awareness: The Brand Image of Tata Tea, belonging to the Tata Group needs no new brand recognition or awareness. Strategy against price wars: The strategy of having alternate offerings at different price points. Managerial ability and experience: Headed by Peter Dylan Unsworth. Low product cost

TATA TEA
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Found in 1962, as a joint venture with United Kingdom

Amongst first few MNCs in India and worlds second largest manufacturer and distributor of tea Headquarters situated in Kolkata Chairperson Ratan Tata; Managing Director PT Siganporid Manufacture 70 million Kgs of tea in India, control 54 tea estates, ten tea blending and packaging factories Owns 5 brands in India Tata tea, Tetley, Kanan devan, chakra gold and Gemini. The company has launched a new brand named Tata TEA Gold

MAIN ACTIVITIES OF TATA TEA LTD.

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Research and Development

Tea cultivation Manufacture of black and instant tea

Blending
Marketing and sales

Distribution

PEST ANALYSIS
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POLITICAL FACTORS 1) Unclear Regulations during exports 2) Issue with the state government

ECONOMIC FACTORS 1) The Budget 2) Custom Duty 3) Scanty rainfall

PEST ANALYSIS
SOCIAL FACTORS 1) Unable to establish a sales strategy 2) Unable to sell units to low income group. TECHNOLOGICAL FACTORS 1) In-house technology for producing instant tea has immensely helped. 2) Successful use of technology in bringing in more flavors

SWOT ANALYSIS
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STRENGTHS

1) Positioning: Taste Kamyabi Ka,

has been replaced by Jaago Re. 2) Taste and quality 3) Youth brand 4) Affordability

WEAKNESSES
1) Inability to capture all the regions 2) Unable to target the lower income groups

SWOT ANALYSIS
OPPORTUNITIES
1)Unexploited Rural Market 2)Increasing number of youth who prefer tea 3)Various tea flavours 4) Ability to leverage on the fact that income levels are on the rise.

THREATS
1)Competitive Market 2)Strong presence of regional competitors

COMPETITOR ANALYSIS
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LIPTON Lipton YEAR Found by Sir Thomas Lipton in late 19th century SLOGAN Slogan - "direct from the tea gardens to the tea pot" PRODUCTS Lipton Yellow Tea Lipton Iced tea Lipton Pyramid tea

BROOKE BOND Hindustan Lever

YEAR Found in 1869 by, Arthur Brooke

SLOGAN Taj Mahal Wah Wah Taj Red Label Warmth of your Family Taaza Tazza Ho le SLOGAN Slogan - Building Relationships

PRODUCTS Taj Mahal Red Label Taaza

WAGH BAKRI Wagh Bakri Tea Group

YEAR Found by Sir Narayan Das Desai in 1892 with its production base at Dholka (Dist . Ahmadabad)

PRODUCTS
Organic Tea WB Perfect Dling Good Morning Wagh Bakri Tea Bags

PORTERS ANALYSIS
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Threat of New Entrants

Bargaining Power of Customers

Threat of Substitute Products

Bargaining Power of Suppliers

Competitive Forces

Competitive Rivalry within an industry

Porters 5 forces model explains following factors:

Competition within Industry (High) Buyers (High) Suppliers (Low) Substitutes (Moderate) Potential new Entrants (High)

STRATEGIES
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Innovation

Merger and acquisition

Brand Portfolio

Market Share

Health Issue

Social Cause

MARKET SURVEY
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Market Survey was done with around 124 respondents - 73 responses were direct survey and the rest were online survey. The analysis was done on the basis of Personal Factors: Age and Economic Circumstances. Cultural Factors: Geography and Types of tea Positioning of brands: Reason For Purchase of a Particular Brand and Brand of Tea Preferred Personal Factors:
Age: It was observed that 62% of them were less than 25 years, 21% belonged to age group 25-40 years, 16% were aged between 40-60years and 2% were above 60 years. We could conclude that the youth were major consumers of tea, who were the target customers of Tata Tea.

MARKET SURVEY
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Personal Factors: Economic Circumstances

36% >1 Lakhs 27% 3-6 Lakhs

23% 1-3 Lakhs 14% <6 Lakhs

Benefits

MARKET SURVEY
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Cultural Factors:
Geography
From market survey, it was observed that 84% of the respondents were from the Northern and eastern parts of the country and the rest 16% were from the Southern part.

MARKET SURVEY
20 Cultural Factors:

Types of Tea:

10%

3% 2% 4% 3%

Normal tea (with milk) Black Tea Green Tea

7%

12% 67%

Prefer tea

78%

Prefer coffee

Iced Tea Herbal Tea Other Flavours

14%
Other beverages

Depends on the situation

MARKET SURVEY
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Where do you buy your tea Prefer loose tea

4%

37%

19%
Supermarkets Kirana Stores Caf

No Yes

10% 71%

59%

No, but would like to

MARKET SURVEY
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Male

Female

At work At a cafe at home travelling and every where else in between 6%

48% 52%

33% 55% 6%

MARKET SURVEY
23 Positioning of brands :

Reason For Purchase of a Particular Brand :

79% of the respondents preferred to continue with the current product

MARKET SURVEY
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Brand of Tea Preferred :

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