History of Lipton Tea

Lipton Tea is a British tea company, founded and named after its original owner, Sir Thomas Johnson
Lipton. Lipton tea began in1870 and is currently one of the biggest tea distributors in the world.

Origin of Lipton Tea – Legend Myths and Facts

Lipton was born in 1850, in Glasgow, Scotland. In 1865, Lipton moved to the United States where he
held various jobs, including working on a tobacco farm, a rice plantation and a streetcar. Lipton, Lipton
returned to Scotland and opened his own grocery store in 1871 .Lipton pioneered the idea of selling tea
as individual packets, for longer freshness, consistent quality and guaranteed weight.

Lipton tea today

Lipton tea is now one of the largest tea traders in the world. It is currently owned by the Unilever
Company.

Objectives

 The aim is to provide quality tea that is safe for the health and energizing for the mind and body
with an unforgettable flavor.
 Lipton has to retain its position as a market leader against all its competitors especially Tapal
who is its challenger and close substitute.
 It has to interact directly with the consumers in order to be aware of the requirements and
expectations of its consumers.
 It has to maintain the highest satisfaction standards and goodwill among the consumers.
 It has to maintain its brand name and loyalty.

Market research analysis

Market research analysis is conducted by adopting following techniques and methods to input
information in this report

TYPE OF RESEARCH:

The Research type is Observational. Involves gathering primary data by

 Observing relevant people

 Actions and situations
 Group discussion

Data collection methods

1. Observation:
2. Structured and unstructured Interviews:
3. Questionnaires:
  General Questions
 About the product

Primary data

Office Tours (wazirabad 1/2012) Office visit has been conducted to get basic information about the
uniliver Company, itsobjectives and products Uniliver office Moti bazaar, Islamabad mor wazirabad.

Secondary data

Websites

 WWW.UnileverPakistan.com.pk
 WWW.lipton.com.pk

Market plan and strategy

 SITUATIONAL ANALYSIS

MICROENVIRONMENT FACTORS

Microenvironment of a company is all the factors that affect its ability to serve its customers. Itincludes
the company, suppliers, marketing intermediate, customer markets, competitors, and publics

1. The Company
 Unilever was created in 1930 when the British soap-maker Lever Brothers merged withthe
Dutch margarine producer, Margarine Unie.
 Unilever Company came into the Pakistan market in 1949 with the name of Lever Brothers
Pakistan.
 Changed the name Lever Brothers Pakistan to Unilever in year 2003.
 The average per annum consumption of tea is 150 million kilograms.

Suppliers

More than 150,000 outlets in Pakistan including

 Super stores
 General stores
 Grocery stores
 Discount stores
 Departmental stores

650 distribution offices with Head quarter in Karachi

1.
Marketing Intermediaries

 Unilever marketing intermediaries have played an effective role in distributing its products.
 Physical distributers
 Financial intermediaries
 These have strongly helped the company in promoting its products.

1.Customers

Number of people familiar with tea around the world

MACRO ENVIRONMENT FACTORS

Microenvironment factors are all the societal factors, which affect the company; these include
demographics, economic, natural, technological, political and cultural forces.

1. Demographics

Generally people consume 2-4 cups of tea per day.The demographics include

 Age
 Location
 Gender
 Race
 Occupation.

The potential market of Lipton is the people aged 10-60; it does not target the children.

2. Economics Forces

Economic forces in a macro environment are:

 Economic growth rate

 Unemployment rate
 Inflation rate
 Interest rates
 Infrastructure quality
 Business cycle stage (e.g. prosperity, recession, recovery)

3. Cultural Factors

Pakistan has produced unique cultural of its own type.

 Values
 Norms
 Cross culture
Target market
Targeting of Lipton:

Lipton Yellow Label is working in more than 110 countries therefore the target market is aglobal village
that consists of people with different cultures, taste, habits & food.

 It targeted the urban areas (offices, hotels, restaurants, café, and banks)
 Lipton is targeting for upper middle, upper lower and upper middle class
 The teabags are targeted toward the upper high class.
 Soft packs and jar packs are targeted for middle and middle lower class.
 The age group segment selected for Lipton is between (15 – 60)
 It is targeting to those people who are young, trendy, cosmopolitan, hip, and cosmopolitan.

MARKET SIZE CALCULATION

The Market size is:

NUMBER OF BUYERS = 0.444 Million

MARKET SIZE = NUMBER OF BUYERS * AVERAGECONSUMPTION

THEREFORE 0.444 * 48per year = 21.312Million

Market Segmentation
Market Segmentation Of Lipton Yellow Label

 Distinct needs - regular tea/ green tea /black tea

 Characteristics – taste, aroma, strength
 Behavior – in terms of 4 P’s Segmentation of consumer market

CURRENT STATUS OF SEGMENTATION

There are two clear segments of consumers in the market, branded tea consumers and un- branded tea
consumers. In Punjab, the majority of rural areas are absolutely brand loyal while unbranded tea is only
popular in teashops and hotels

Geographic Segmentation:

 World region Asia

 Country Pakistan
 Cities All major cities of Pakistan
  Density Urban-Rural
 Climate Hot & dry

Demographic Segmentation:-

 Age All age group

 Gender Male, Female
 Family size 1-2,3-4,5 above
 Family life cycle Married & Unmarried
 Income 12000 above
 Occupation White collar & service workers
 Education School, colleges & Universities
 Religion All
 Race Asian
 Nationality Pakistani

Behavioral Segmentation:-

 Occasion Any occasion

 Benefits Quality, taste, flavour and brand status
 Loyalty Status Significantly high
 Readiness Stage Awake & interested
 Attitude towards brand Positive & enthusiastic
 User Status Ex-user, regular user, first time user
 User Rates Medium user, heavy user

Psychographic Segmentation:-

 Social Class Middle class and upper class

 Lifestyle Actualizes, Fulfilled, Believers, Achievers
 Personality Cultured, energetic.

USE-SITUATION SEGMENTATION

 Occasions Regular and parties

 Objective To feel fresh and healthy.
 Location Home, office
 Person Self, family members, friends

Level of competition
Market competition:

The tea market in Pakistan is very well saturated because of the high consumption of open teawhich
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 termsof sales with other small
brand of Unilever and Tapal also laying claim to the market.

Primary competitive alternative

The primary completive alternative of Lipton Yellow Label is Tapal Danedar Tea.

Tapal Danedar

Tapal is a well known name in Pakistan. In 1947, it started business and now is a Tealeader in the tea
market of Pakistan.

Competitive Rivalry

1. Tapal Danedar Tea

 Started in 1947 by Tapal Family.
 Largest Pakistani owned Tea Company
 Innovation
 ISO Certification
 Tapal Danedar and Lipton Yellow Label are primary competitive ofeach other they are they
competitive because they target the sameconsumers for same type of people there Target
market is same. Theyalso have slightly difference in there prices,

Major Players and competitors:

Marketing mix

The Marketing Mix (The 4 P's of Marketing)

Marketing mix (decisions) generally fall into the following four distinct categories:

1. Product
2. Pricing
3. Place issues(distribution)
4. Promotional tools

Product

The product name is Lipton yellow label that has astrong brand image in the consumer mind. It is regular
tea that has a strong taste, aroma, and strength.

Product line

 Black tea
 Green tea
 Flavored black tea
  Herbal tea
 Pyramid tea
 Iced tea mix
 Iced tea to go
 Lipton pure life tea
 Lipton iced tea
 Food service
 Lipton brisk

Price

Lipton Yellow Label has never wanted to compromise on quality so they adoptedvalue based pricing.

Different prices of packs of Lipton yellow label tea in Pakistan:

Product category Prices

1. Packets (Sachet size)

 14gm Rs10
 30gm Rs 20
 95gm Rs 65
2. Packs (medium size)
 190gm pack Rs. 160
 380gm pack Rs. 295
3. Box &jars (large size)
 25 tea bags box Rs. 95
 100 tea bags box Rs. 185
 950gm soft pack Rs. 690

Distribution /placement issues

Distribution is about getting the products to the customer. Some examples of distribution decisions
include:

Distribution channels

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.

Distribution places

1. More than 150,000 outlets in Pakistan including

 Super stores
 General stores
 Grocery stores
  Discount stores
 Departmental stores
2. 650distribution channels, 3majors unit’s manicuring in Karachi, Raheem yarkhan and khaniwal.

Promotional tools
The Lipton Yellow Label does it promotion in following ways.The company uses different promotion
techniques they provide different items toPeople such as:

 Caps
 Tea bags
 Cups
 Printed T-shirts
 Discounts
 Basant festivals
 Vans
 Watches

The company takes different sales promotion techniques at different time period for the salesof the
product.

Electronic Media:

The company is spending a lot on electronic media. In their advertisement they hirerenowned
celebrities.

Advertisement:

The Lipton Yellow Label uses different types of advertisement as follows

Television:

Lipton yellow label spends a lot on television advertisment.Commercial during cable network movies, TV
shows such as special drama, news, talk shows and SitcomProduct placement is also done in many of the
shows.

Magazines:

Full page advertisment including Akhbar-e-Jahan, Mag, Family Magazine, Fashion & BusinessMagazine.

Internet:

Lipton Yellow Label advertises on websites such as Facebook & Yahoo.

Co-Branding:

Avaiable at big shopping malls such as Dolmen Mall, Park Towers & Millenium Mall.
SWOT Analysis of Lipton
STRENGTHS

1. Unilever is a multinational company

2. Strong brand image, loyalty and brand awareness in Pakistan
3. Market leader as it has a 70% market share in branded tea.
4. Strong and long-term relationship with distributors, wholesalers and retailers.
5. Sound and experienced management and quality control staff
6. Strong Ethical value (culture and heritage)
7. Strong supply line and accessibility
8. Strong financial position
9. Quality, variety and success of the slogan
10. Effective & attractive packaging
11. Strong distribution structure
12. Highly innovative and effective marketing team

WEAKNESSES

1. High prices of the product

2. Substitute products
3. Stiff/high competition
4. Large advertising budget
5. Low market share in Karachi, Multan and N.W.F.P.

OPPORTUNITIES

1. High rate of population growth

2. Market opportunity of Lipton Yellow Label in rural areas
3. Brand is the part if traditional drinking habits
4. Research & development
5. Makes people active
6. Expansion in other areas of country
7. Huge market to exploit
8. Strong brand loyalty

THREATS

1. Strong competition in rural and urban areas

2. Internationally increasing tea prices and nationally consumption of open tea
3. Political conditions in the country may be obstacle to exports
4. High rising inflation in the country can negatively effect the brand
5. Tapal’s recent marketing campaign and possible increase of tapal tea market shares.
6. Smuggling and increasing prices of raw material raise the prices of tea products.
BCG Matrix of Lipton

The BCG Growth-Share Matrix is a portfolio planning modeldeveloped by

Bruce Henderson

of the Boston Consulting Group inthe early 1970's.

BCG Growth-Share Matrix

Question mark

Question mark is a stage in which company gets the high market growth rate of there product butvery
low relative share of market

Stars

Star is a stage in which company gets high market growth rate and high relative share ofmarket. It is a
stage in which company reach at its peak point.

Cash cows

Cash cows is a situation in which company gains high relative share (cash generation) of their market but
low market growth rate (cash usage).It is a stage in which Lipton yellow label falls inthe current market
situation.

Dogs

A dog is a condition in which the company has very low market growth rate and has a lowrelative
market share. In such condition the company may shut down their work and exit themarket.

Porter five forces model analysis

1. Bargaining power of suppliers

The bargaining power of suppliers for Lipton tea is high in Pakistan because there is an import of
tealeaves from different countries like bangladesh, Sri Lanka, Kenya and other countries.

2. Bargaining power of customer

If consumers are fewer the bargaining power of the consumers is high. If the consumers are morethen
the bargaining power of consumer is high. The bargaining power of Lipton’s consumers is very high
because there are many brands in the market, Like Supreme, Tatly, and Tapal dander at lower price.

3. Competition among competitors/Rivalry

The competition of Lipton yellow label among competitor / rivalry is very high because thelipton tea is
an international brand and has a large investment in the market. it has manycompetitor like tapal,
supreme , tatly in the market . so they face a huge completion in the teamarket in the market.

4. Threat of new entrance

Lipton yallow label is faceing very few threat of new entrance in the tea market of Pakistan because of
limited resoures and huge investment of capital is required to enter in tea market of Pakistan. So new
enterance of tea company in the current market is har

5. Threat of substitute products

Lipton yellow label is facing very high threat of substitute product in the tea market of Pakistan.It has
also threat of technological changes of their competitor in his product. For example tapalhas previously
launched a new compaign

Feedback and control

Uniliver Company uses the different strategies to get marketcontrol such as;

 Operating Control of Uniliver

 Strategic Plans of Uniliver
 market surveys
 Market Audit of Uniliver

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
inPakistan.
 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

Conclusion
Lipton yellow label (UNILIVER) company has a strong image in theinternational market due to large in
size in term of financial and humanresources capital and wider product range Lipton can look forward
tocompetition in an encouraging and growing market with increasingdemand expected to rise rapidly in
the current market status.