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CONTENTS

Uni Lever’s Codes of Business Principles 6 Uni Lever Pakistan 9 Market Analysis 11 Lipton’s Targeting Strategies 13 Market Segmentation 13 Uni Lever’s Lipton Yellow Label 16

Product

16

Pricing

21

Placement

22
2

Promotion

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Swat Analysis of Lipton Yellow Label 26 Recommendation 27
PREPARED BY
• • •

Hafiz Umair Sultan Amin Chiraghuddin Mohammad Owais

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“We dedicate this humble effort of ours to the brave and courageous people of Iraq who even after so much suffering are standing strong”

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Acknowledgement

A million grateful thanks to Allah the almighty that gave us the perseverance to complete this project, which was indeed a difficult one. We are very thankful to our teacher Miss Saima for assigning us this report. This was a totally new experience for us to get the information, as to how companies make their marketing strategies like targeting strategies, distribution, pricing strategies etc. We would also like to acknowledge the invaluable guidance; supervision and encouragement provided by Miss. Benifer, Miss Tanzeen and Mr. Ali Sheikh without whom it might not have been possible to complete the report.

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Executive Summary

The report is an effort to identify different aspects of Marketing Management 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. Towards the start of report figures regarding the Lipton yellow label market share, total market, and contribution from different tea brands are also given. An integral part of the report is detailed analysis of the marketing aspect including pricing, product, placement and promotion areas. Product Life Cycle and Big Matrix of Lipton yellow label tea are also discussed. Challenges and Recommendations are also given to the best of our knowledge.

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Preface

Attached is the report for the course of Introduction to Marketing. The report is about relating our Marketing knowledge to a real life product. The product, which we chose, is Lipton yellow label tea. This report consists of application of all the 4 P’s of Marketing i.e. Price, Promotion, Placement and Product. sa Interviews, with the Uni lever’s officials, were conducted prior to the beginning of this report. The marketing information is based on the guidance provided by the Uni lever officials during our visits. The report is divided in four main sections. The first section cover the details of what the Lipton yellow label is i.e. the Product, then Pricing strategies of tea and then Place and Promotion aspect discussed. Towards the end of the report, Challenges and Recommendations are also given to the best of our knowledge.

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Uni lever’s Mission Statement
Our purpose in Uni lever is to meet the everyday needs of people everywhere – to anticipate the aspirations of our consumers and customers and to respond creatively and competitively with branded products and services, which raise the quality of life. Our deep roots in local cultures and markets around the world are our unparalleled inheritance and the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers – a truly multi-local, multinational. Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively and to a willingness to embrace new ideas and learn continuously. We believe that to succeed requires the highest standards of corporate behavior towards our employees, consumers and the societies and world in which we live. This is Uni lever's road to sustainable, profitable growth for our business and long-term value creation for our shareholders and employees.

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Uni Lever’s Code of Business Principles
Standard of Conduct:
We conduct our operations with honesty, integrity and openness, and with respect for the human rights and interests of our employees. We shall similarly respect the legitimate interests of those with whom we have relationships.

Obeying the Law:
Unilever companies and our employees are required to comply with the laws and regulations of the countries in which we operate.

Employees:
Unilever is committed to diversity in a working environment where there is mutual trust and respect and where everyone feels responsible for the performance and reputation of our company. We will recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed. We are committed to safe and healthy working conditions for all employees. We will not use any form of forced, compulsory or child labour. We are committed to working with employees to develop and enhance each individual’s skills and capabilities. We respect the dignity of the individual and the right of employees to freedom of association. We will maintain good communications with employees through company based information and consultation procedures.

Consumers:
Unilever is committed to providing branded products and services which consistently offer value in terms of price and quality, and which are safe for their intended use. Products and services will be accurately and properly labelled, advertised and communicated.

Shareholders:
Unilever will conduct its operations in accordance with internationally accepted principles of good corporate governance. We will provide timely, regular and reliable information on our activities, structure, financial situation and performance to all shareholders.

Business Partners:
Unilever is committed to establishing mutually beneficial relations with our suppliers, customers and business partners. In our business dealings we expect our partners to adhere to business principles consistent with our own.

Community Involvement:
Unilever strives to be a trusted corporate citizen and, as an integral part of society, to fulfill our responsibilities to the societies and communities in which we operate.

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Public Activities:
Unilever companies are encouraged to promote and defend their legitimate business interests. Unilever will co-operate with governments and other organizations, both directly and through bodies such as trade associations, in the development of proposed legislation and other regulations, which may affect legitimate business interests. Unilever neither supports political parties nor contributes to the funds of groups whose activities are calculated to promote party interests.

The Environment:
Unilever is committed to making continuous improvements in the management of our environmental impact and to the longer-term goal of developing a sustainable business. Unilever will work in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice.

Innovation:
In our scientific innovation to meet consumer needs we will respect the concerns of our consumers and of society. We will work on the basis of sound science, applying rigorous standards of product safety.

Competition:
Uni lever believes in vigorous yet fair competition and supports the development of appropriate competition laws. Uni lever companies and employees will conduct their operations in accordance with the principles of fair competition and all applicable regulations.

Business Integrity:
Unilever does not give or receive, whether directly or indirectly, bribes or other improper advantages for business or financial gain. No employee may offer, give or receive any gift or payment, which is, or may be construed as being, a bribe. Any demand for, or offer of, a bribe must be rejected immediately and reported to management. Unilever accounting records and supporting documents must accurately describe and reflect the nature of the underlying transactions. No undisclosed or unrecorded account, fund or asset will be established or maintained.

Conflicts of Interests:
All Unilever employees are expected to avoid personal activities and financial interests, which could conflict with their responsibilities to the company. Unilever employees must not seek gain for themselves or others through misuse of their positions.

Compliance - Monitoring - Reporting:
Compliance with these principles is an essential element in our business success. The Unilever Board is responsible for ensuring these principles are communicated to, and understood and observed by, all employees. Day-to-day responsibility is delegated to the senior management of the regions and operating companies. They are responsible for implementing these principles, if

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necessary through more detailed guidance tailored to local needs. Assurance of compliance is given and monitored each year. Compliance with the Code is subject to review by the Board supported by the Audit Committee of the Board and the Corporate Risk Committee. Any breaches of the Code must be reported in accordance with the procedures specified by the Joint Secretaries. The Board of Unilever will not criticise management for any loss of business resulting from adherence to these principles and other mandatory policies and instructions. The Board of Unilever expects employees to bring to their attention, or to that of senior management, any breach or suspected breach of these principles. Provision has been made for employees to be able to report in confidence and no employee will suffer as a consequence of doing so.

UNI LEVER PAKISTAN “Touching hearts, Changing lives”
Uni Lever (Pakistan) Limited Formerly known as Lever Brothers (Pakistan) Limited. The Company's principal activities are to manufacture and distribute Tea (Brooke Bond, Lipton); Wall's Ice Cream; Edible Oils and Fats (cooking oils, margarine, specialized fats/oils for the bakery/food industry under the Dalda, Blue Band and Planta brand names); Detergents and personal products (Lux, Rexona and Lifebuoy soaps, Sunsilk shampoo); Fabric Wash & Home Care (Power Surf, Wheel Washing Powder, Vim). Beverages accounted for 41% of 2001 revenues; Detergents and personal products, 32% and Food, 27%. Uni lever is one of the biggest consumer goods company in the world. UNI LEVER’S core business is the production of fast moving consumer goods or “FMCG.

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Every day, around the world, people reach for Uni Lever products. Their brands are trusted everywhere and, by listening to the people that buy them; Uni Lever has grown into one of the world’s most successful consumer goods companies. In fact, 150 million times a day, someone somewhere chooses a Uni Lever product. Look in your fridge, or on the bathroom shelf and you’re bound to see one of Uni Lever’s wellknown brands. They create market and distribute the products that people choose to feed their families and keep themselves and their homes fresh. People’s lives are changing fast. As way we all live and work evolves, our needs and tastes change too. Uni Lever aim’s to help people in their daily lives. So they keep developing new products, improving tried and tested brands and promoting better, more efficient ways of working. Uni Lever was created in 1930 when the British soap maker Lever Brothers merged with the Dutch margarine producer, Margarine Unie. At the time, an international merger was an unusual move. But the owners of the two companies could see that bringing together complimentary businesses with strong global networks would create new opportunities. The companies were competing for the same raw materials, both were involved in large-scale marketing of household products and both used similar distribution channels. Margarine Unie grew through mergers with other margarine companies in the 1920s. William Hesketh Lever founded lever Brothers in 1885. Lever established soap factories around the world. In 1917, he began to diversify into foods, acquiring fish, ice cream and canned foods businesses. In the Thirties, Uni Lever introduced improved technology to the business. The business grew and new ventures were launched in Latin America. The entrepreneurial spirit of the founders and their caring approach to their employees and their communities remain at the heart of Uni Lever's business today. Employing 265,000 people, Uni Lever has two parent companies – Uni Lever NV and Uni Lever PLC – which, despite being separate businesses, operate as a single unit with the same board of directors. Uni Lever's corporate centers are London and Rotterdam. Today UNILEVER is a multinational in the literal sense, which has inspired the corporate world with its innovation, professionalism and competitive spirit. Its operations are spread over fiftytwo countries and millions of people worldwide use its products every day to fulfill and satisfy their needs. Uni Lever has a portfolio of brands that are popular across the globe – as well as regional products and local varieties of famous name goods. This diversity comes from two of Uni Lever’s key strengths:

 Strong roots in local markets and first-hand knowledge of the local culture.  World-class business expertise applied internationally to serve consumers everywhere.
Focusing on performance and productivity, Uni Lever encourages its people to develop new ideas and put fresh approaches into practice. Hand in hand with this is a strong sense of responsibility to the communities it serves. Uni Lever doesn’t only measure success in financial terms; how they achieve results is important too. Uni Lever works hard to conduct business with integrity – respecting their employees, their consumers and the environment around them.

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MARKET ANALYSIS
Tea consumption in Pakistan is very high and Pakistan alone consumes around 4% of the world’s tea production, which also makes it a very good market for tea brand such as Lipton yellow label.

Market situation:
Pakistan’s tea market has a total market size of Rupees 20 billion, or 120000 tons of tea, out of which the share of open tea is 60% which accounts to 12 billion rupees or 72 thousand tons of tea, the packaged tea sector holds only 40% of the market which is worth around 8 billion rupees or 48 thousand tons of tea.

BRANDED TEA 40%

OPEN TEA SELLERS 60%

OPEN TEA SELLERS BRANDED TEA

Demand:
Pakistan’s total tea demand is around 150000 to120000 tons of tea annually, demand and supply are equal, and no company can produce more than the demand as tea leaves go stale after a period 3-4 months.

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Industry Growth Rate:
The industry growth rate is 4%; we think that most of the people in Pakistan are regular users of tea so the market will continue to grow at a steady rate.

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 Uni lever and Tapal also laying claim to the market.

23%

4%

BROOK BOND SUPREEM LIPTON
29%

A-1 KARAK CHAP TAPAL

34% 10%

OTHERS Slice 6
0%

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Lipton’s Targeting Strategies
Lipton uses the concentrated marketing strategy, it basically segments the upper class due to its high price and premium quality but it also caters the need of the middle upper middle and lower class by offer different product line such as the Lipton sashes which are relatively cheap and other small packs that Lipton has introduced to cater these market segments as well.

MARKET SEGMENTATION
Geographic:

World region Country Target market Market size Density Climate

South Asia Pakistan Pakistan 80-100 million Urban, suburban Southern

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Demographic:
Age Gender Family size Lifecycle Income Occupation 12 and above Male, female 1 to 4 or above Young, single young, married, married with children 5000 and above Students, Teachers, Skilled laborers, managers, clerks etc laborers, unskilled

Education Religion Race Nationality

Illiterate, Metric, Intermediate, Graduation. Muslims, Christians, Hindus South Asian Pakistani

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Hypsographic:
Social class Lifestyle Personality All Any Any

Behavioral:
Occasion Benefits User status Usage rate Loyalty status Product Attitude Regular occasion Quality, economy, convenience, speed Potential user, first time user, regular user. Light user, medium user, heavy user Strong Energy, Fun, Youth

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UNI LEVER’S LIPTON YELLOW LABEL

“SIGN OF GOOD TASTE”
Uni lever is the largest seller of packet tea in the world through their two biggest brands Lipton and Brooke Bond tea. Lipton is the flag product of Uni lever by which the company likes to be identified; it is one of Uni lever’s largest brands and the world's most popular tea brand, enjoyed by consumers everywhere. It is available in more than 100 countries and has a global turnover of euros 1.9 billion. The brand grew 5% in 2000. Top markets are the US, Italy, Japan, Egypt, France, Turkey, S. Arabia, Pakistan, Belgium and Poland. In Pakistan Lipton is a less popular as compared to brook bond, which is also a Uni lever brand and the local Tapal brand but in a market where 60% consumers prefer lose tea as compared to packaged it is still a major player. Lipton’s annual sales are around 8 to 15 thousand tons of tea which might not be significant in the over all tea market in Pakistan but if we look at only the branded tea market this represents a major chuck is a of the packaged tea market.

PRODUCT:
Lipton yellow label tea has always been considered a premium brand with premium quality it is one of the most high quality tea in Pakistan.

Lipton offers tea, which is of the highest quality imported from mostly African and Subcontinent countries, which provide high quality tealeaves and are according to the taste of the Pakistani consumers. Lipton is aiming to supply customers with a product that shows that Lipton genuinely understands their tastes and preferences.

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Suppliers:
Uni lever Pakistan limited mostly buys tea from African countries because of the great taste, smell and quality of the tea leaves but during 1990 to1992 Uni lever Pakistan limited also started buying tea from subcontinent tea producing countries like India, Srilanka, and Bangladesh to fulfill shortages because importing tea from African countries namely Kenya, Zambia, Zimbabwe and South Africa takes 8 to 9 months.

Product quality:
Lipton yellow label prides its self on having the best blend in the market; Lipton officials stated that their blending techniques were unique and sophisticated so as to ensure high quality taste and smell; checks are conducted at every level of blending to make sure that the product is of the highest quality. Lipton also uses professional tea tasters who taste the tea and give their recommendations about it, all in an effort to come up with the best blend.

Product style and design:
Lipton’s style and design has always been one of its strongest features. Lipton’s logo style has always been a part of its appeal to its consumers right from the very start the yellow and red color the design of its different quantity packs and boxes, the white stripes on its teabags box are all internationally recognized.

Packaging:
To ensure quality of the manufactured tea packaging is effectively done to restore the customer’s confidence at the other end of consumption.

• Shrink Wrapping • Aluminum sealing
These methods of packaging are used to ensure the quality, taste and smell of the tea. Packaging material is mostly obtained from outside sources. These packaging materials include plastic jars, aluminum, cartons, shrink-wraps and boxes for teabags etc.

Labeling

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Lipton Super graphics is a background device that is used to add impact and to enliven and enhance the branding of applications. Lipton is Yellow and Red brand. When used in balanced way these colors are all needed to understand 'Lipton'. This yellow and red color is the trademark of Lipton in the minds of its consumers and competitors alike and is an integral part of Lipton’s success.

Product development and research:
Product development and research is an important factor in the long-term success of a product. Uni lever Pakistan limited with its huge research and development infrastructure has always tried to make sure that new innovations are introduced to the Lipton brand to make it better then it was to ensure its success.

Product lines:
Lipton was first introduced in medium and large size tin boxes as open tea but now there is Lipton danedar, Lipton family pack and Lipton tea bags available in 50g, 100g, 200g packs, 400g Plastic jars 100g and 500-gram boxes for tea bags, 7g Sachet These different quantity packs are in line with the product line extension strategy that Lipton yellow label is following.

Product life cycle:
Lipton yellow label has been doing very well for many years. Two years back Lipton yellow label’s sales had gone down as this product had reached its maturity stage so Uni lever Pakistan took steps to was rejuvenate its flag product in Pakistan, modifications were made to its packaging and labeling giving it a more pronounced 'Lipton' look. Aggressive marketing was started to re claim the lost market. Lipton yellow label was in its maturity stage when it was rejuvenated which extended its maturity stage in its life cycle.

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Sales

Profit Time
Product Developme nt Stage

0

Introduction

Growth

Maturity

Decline

BCG matrix
Uni lever considers Lipton yellow label as a Star where as Lipton’s tea bags, which are considered stars internationally in Pakistan Uni, lever defines them as question marks.

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STAR

QUESTION MARK

MARKET GROWTH RATE

?
CASH COW DOG HIGH LOW MARKET SHARE RATE

Low

High

Lipton yellow label tea

Tea bags

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PRICING:
Uni levers Pakistan follows a product based pricing techniques for all its products which is the pricing policy of Uni lever in all the countries it is operating in it never gets involved in price wars with its competitors.

Pricing Approaches:
In conformity with company policy Lipton yellow label tea also follows a product based pricing system in which they charge a particular profit over cost of the product.

Prices of different packs of Lipton yellow label tea in Pakistan:
50 tea bag box 100 tea bag box 200gm pack 100gm pack 400gm pack 450gm jar 7gm Sachet Rs. 64 Rs. 125 Rs. 60 Rs. 30 Rs. 115 Rs. 125 Rs. 7

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AMIN BHAI YAHAN PAY PRICES SAHI KAR K LIKH DENA JO AAJ KAL KI HOON WOH
• PLACEMENT:
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.

Intensive distribution:
Lipton follows a n intensive distribution policy with its 50gm, 100gm, 200gm packs, 400gm Plastic jars and its 7gm Sachet because these packs are used by the masses and have a higher demand so by following this strategy it is made sure that Lipton is with in the reach of its consumers.

Selected distribution:
Lipton yellow label follows an selective distribution policy with its 100gm and 500-gm tea bags boxes because they are only used by a particular section of the society namely the upper and upper middle class so these tea bags are only placed in big utility stores, big hotels and posh areas where consumers of tea bags are concentrated.

Lipton yellow label distribution network:
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Lipton possess a very large distribution network it has 3 depots to store its product, 550 distributors to distribute the tea around Pakistan 3 factories to process the imported tea leaves and produce the final product, Lipton also has 2500 recognized Lipton retailers in Karachi, Lahore, and Rawalpindi to sell its tea.

Lipton Tea Depots Distributors Super stores Wholesaler Retailer Consumers Big hotels

Out of home department:
Lipton yellow label tries to place its product at all the major events in the country Lipton’s out of home department team goes to great lengths to secure exclusive rights to supply their tea to all major events e.g. Recently during the 2002 ITCN exhibition at the expo center in Karachi Lipton secured exclusive rights to provide tea to this international event this kind of distribution is all in line with the intensive distribution policy that Lipton is following.

Lipton tea vending machines:
In an effort to provide instant Lipton tea to consumer Lipton carried out a small experimental distribution campaign. Lipton placed tea vending machines in several key areas in Karachi this concept although a well established one in the west is relatively new to the Pakistani market so far the results have been mixed.

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PROMOTION:
Uni lever spend heavily on the promotion and advertising of its products according to Uni lever Pakistan officials the company spends around 10 to 15 % of its gross sales on advertising and promotional schemes to support their products.

85% TOTAL COMPANY REVENUES

15% 0%

TOTAL PROMOTIONAL BUDGET

Promotion of Lipton yellow label tea:
Lipton has always been very innovative in its promotional activities; Lipton uses almost all the medias of information to promote its self they spend heavily on print and electronic advertisements, they undertake massive advertisement campaigns, Co branding there product with another related product they even organize media events, sponsor shows, hire musicians,

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actors and other stars all in an effort to promote them selves and achieve an edge over the competition.

Promotional advertisements:
From the very beginning Lipton has associated its self with youth, fun & energy so to portray its self in that way it has always hired stars, which can relate Lipton to this concept e.g. Nazia Hasan and Zohaib Hasan were hired to represent Lipton in an advertisement campaign and Lipton sponsored their concerts all in an effort to position its self as a fun and energy product. Lipton hired Ali Haider and Hadiqa Kiani for their marketing but the concept of drinking tea on a rainy day did not work well for Lipton. Lipton recently another advertisement campaign was undertaken with out hiring any major cricket, music or film star to represent their product this was a major shift from the star related advertisement policy that Lipton had in Pakistan but they succeeded in promoting there product with the same concept of fun and energy while also relating to the lower and lower middle classes in this advertisement campaign.

Co Branding:
Lipton has been very successful in using co branding to promote its self it used various schemes of co branding its self with another related product e.g. Offering free sugar with Lipton tea. Offering free candy biscuits with Lipton tea. Offering free milk with Lipton tea. All co branding promotional schemes are for a period of 4 to 6 weeks only.

Internet advertisement:
Lipton also setup its own website “planet lipton.com” in order to use the Internet to promote itself this website is also used to support different promotional schemes that Lipton undertake from time to time

Promotional schemes, programs & events:
Lipton undertakes various promotional schemes and organizes events by its self or participates or sponsors other events e.g.

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Recently Lipton made the world largest tea bags, which got it in to the Gennies book of world records. They sponsored the Basant mela in Lahore and Karachi. They sponsor shows like Lipton time. Lipton also sponsors concerts of different musician.

Swat Analysis of Lipton Yellow Label tea
Strengths:
Strong brand name • Premium taste • Strong distribution structure • Foreign trained staff • Highly effective marketing team • Quality control staff • International brand name

Weaknesses:
• High price • Stiff competition • Large advertising budget

Opportunities:
• Huge market to exploit • Strong brand loyalty

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Threats:
• • • • • Political situation High consumption of open tea Tapal’s recent marketing campaign High tariffs on tea imports Smuggling

Challenges:
Lipton yellow label tea like any other international brand in Pakistan is facing a slow down in sales because of the economic conditions, dealing with the low cost unbranded open tea and increasing use of mushroom tea brands is also a major challenge even for a well established tea brand like Lipton yellow label the aggressive marketing techniques employed by Tapal are also proving to be a major source of concern the marginally low sales of Lipton yellow label tea in the years 2000 and 2001 the proof of the importance of tackling with these challenges apart from this bringing down the price of Lipton is also proving much harder then initially estimated by the Lipton team, the high rate of import tariffs continues to be a major barrier in the growth of Lipton yellow label tea.

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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