ASSIGNMENT NO 3

Muhammad Yahya Bin Zafar And Zulqarnain Haider

Company: UNILIEVER

Product: Lipton Tea

Lifecycle Stage: The Brand Lipton is jointly owned by PepsiCo and UNILIEVER. The brand named after Thomas Lipton and
sold by PepsiCo. It is basically a ready to drink Beverage Company famous for its drinking Tea. There are basically four
stages of product cycle namely, introduction, growth, maturity and decline. The current status of Lipton Brand is that it
has achieve the stage of maturity, where the sales have become constant and retained customer are stick to its name
and buying the product continuously.

Strategy: Since the Lipton is in maturity stage, there is high chances for the product to enter into decline stage
where their market share and sales will gradually become less. To prevent the product to enter into decline
stage, Lipton has achieved the Healthy drink tag, and extend their tea product like green Tea with different
Flavors, which help to reduce obesity and fat and this strategy help maintain the maturity stage of Lipton Tea.
This product is now exclusively known among health-conscious people.
Factors considered in setting price and associated Strategy:
Factors: some of the factors which affect the price setting of Lipton are:
The Cost: The most important factor which affect the price of product is the fixed cost and direct cost of
company. A company should budget their future expense and set the price with required margin.
The competitors: Since in market there is less competition in the niche of healthy tea drink, which is big
advantage for Lipton to set price. They are targeting specially health conscious people.
Customer: Customer is the key to success for every business. The Lipton tea specifically target the middle to
high class people. It covers the wide range of age group from ice tea for 10 years children from strong tea
suitable up to 70 years senior citizens
The positioning: In psycho analysis, the laptop has created the image of healthy lifestyle, Adventurous,
energetic and young tagline in mind of people which also help the company to set price accordingly.
Strategy in Price Setting: The strategy adopt by Lipton is penetration pricing strategy. No doubt Lipton covers
a mass share of market. It penetrated in rural and urban market with strategy of low pricing and more value
addition to the customer. The low pricing model also help to take advantage over other competitors in
market. The intelligent packaging, high quality and great customer care makes the Lipton the most favorite tea
for consumer.
Nature of Distribution channel: with Availability across 110 countries Lipton also has very wide network of
distribution in Pakistan. Being the no 1 Teas brand the Lipton host almost 18,000 outlets in different region of
Pakistan. Its headquarters is situated in Karachi and with over 650 official distributers in Pakistan. The Lipton
has planned to expand its distribution network in Sindh. The main distributer of tea is UNILIEVER and for Ice
Tea PepsiCo.
Factors for making marketing channel: The marketing channel are made by looking on factor which affect
customer relation because the sole purpose of distribution to deliver the product to the end customer. Since
the Lipton tea powder is not perishable don’t need fast delivery on the other hand Lipton Ice tea need fast
delivery. Since it is consumer product the best possible way to deliver is through retailer channel and since
market share is large there is so many distribution channels. Finally, the cost benefits analysis is done to
analyze the profitable distribution channel for the product.
Challenges faced in Distribution Channel: Currently Lipton has faced Stocking challenge especially in Sindh
region due to high demand, it can be eliminated by developing trust between distributer and retailer. The
second issue face by Lipton is customer service, especially for a big company like Lipton who mainly issue their
product to distributor they also have to visit the retailer to display the product properly and get feedback from
customer.
Promotional strategy: As the company uses the aggressive marketing strategy. Lipton has achieved making
the image of healthy drink in the mind of consumer. It highlights it main features like healthy lifestyle, User-
friendliness packaging and affordability. Slogan like “Feel Light Feel active” represent the health factor while
Ice tea slogan “Naturally Tasty and Refreshing” position the image of healthy lifestyle in consumer minds.
Lipton also has used the opinion leader marketing strategy in their ads done by famous celebrities.
How IMC is working for the brand? Lipton tea uses all the integrated marketing tools like advertisement on
social media television, radio and printing press. When the Lipton ice tea was first introduced it was not liked
by most of people but then the company recognize and make the title according to the slogan that “Lipton ice
tea makes your day bright” and show a brighter face of the day, this bring a reasonable impact on the sale.
The slogan of Lipton tea is “Jagy un k lye jo eham hy” this advertisement hits the emotional point of the
customer. And their mission is to meets every day needs of everywhere to anticipate the aspiration of our
consumers and customers to respond creatively and competitively with products which raise the quality of
life. The price of Lipton tea is kept reasonable so that it can be available for everyone. A special personal
selling team was made in order to train the staff at different restaurant to teach them proper tea preparation
and service. Lipton underwent a London-based summer experiential marketing campaign in 2010 under the
slogan "Don't knock it 'til you’ve tried it!”. Roaming demonstrators handed out 498,968 samples over the 58-
day run. After the campaign, 87% of consumers claimed to enjoy Lipton Ice Tea, while 73% said they were
more likely to purchase in the future. Lipton also made commercials starring The Muppets for the 2014 Disney
film Muppets Most Wanted. Lipton also use mass communication media for the advertisement purpose there
is a proper website of Lipton tea where they introduce their product and share information about their
products.
Problems and opportunities in marketing Lipton Tea: The most important challenge face during the
marketing of a product is competitors and price. When Lipton tea was first introduce in 1980, Tetley tea and
Brooke bond were already in the market and people were used to with those. So to grab the attention is one
of most important challenge. To tackle this challenge Thomas Lipton arranged packaging and shipping at low
costs and sold his tea in packets by the pound 500g, half pound 250g, and quarter pound 120g, with the
advertising slogan: "Direct from the tea gardens to the teapot." Lipton teas were a subsequent success in the
United States. One of the recent problem for Lipton tea in Pakistan is also its price, because the price of Lipton
tea is little bit higher due to its quality. On the other hand some companies like tapal danedaar and vital are
available at quite low price although they are not that much quality seekers. To tackle this challenge Lipton
should also increase its quantity as its price.
There were some opportunities in the market like for a single person it was quite expensive and difficult to
make tea, so Lipton Company introduced Tea bags and grabbed the opportunity.
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