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Principles of Marketing Management

Name: Jayasundara Mudiyanselage Sarani Tharanya Jayasundara

Student No: 20415623
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Executive Summery

This report focuses on a market audit of the Dimah brand in global market.
Here, Dilmah aims to gain an understanding of the brand through micro and macro
analysis. Explains the current status of the company and the position of Dilmah in
the global market.

The impact of competitors in the global market and how the market
segmentation has been done through perceptual mapping. Dilmah tea is very
famous in the commercial world hence the compilation is very high between many
competitors. It also describes the competition with the main competitors.

SWOT Analysis hopes to understand how Dilmah's internal and external

factor based benefits can be gained. Finally Dilamh's sustainability highlights are
pointed out. This audit is expected to give the market an overall understanding of
Dilamh tea marketing position.
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Content Page

1. Introduction - Tea Services PLC – Dilmah 04

2. Background of Industry and Market 05
3. Marketing audit 06

Micro analysis 06

Macro analysis 07

4. Competitive analysis 08
5. SWOT analysis 09
6. Sustainability highlights in Dilmah 11
7. References 13

8.
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1. Introduction – Dilmah Tea

Dilmah tea brand was introduced by Sri Lanka Tea Service PLC and founded
by Merrill J Fernando. That was in the 1930s. Dilmah Tea is now available in
over 100 countries. It is more popular in the international market than in the
Sri Lankan market. Therefore, it is advisable to conduct Dilmah tea
marketing audit in the international market. (Dilmah, 2017/2018)

Accordingly, they have a large network of sales agents and distributors to

run the business and find new opportunities.(Ukessays, 2016). In terms of
regions, it extends to North America, South America, Europe, West Africa,
South Africa, CIS region, Middle East and Asia Pacific. Dilmah's first exporter
was Australia, which exports 70% of its total to the Australian market.
(Kumar, 2018)

With countries in these regions, Dilmah has a large range of products

including black tea, green tea, home garden tea, real white tea, herbal tea
and flavored black tea. Still, Dilamh gets most of its profits from the
international market. (IvyPanda, 2019) In addition, there are several
products sold in the international market under the Dilmah brand. (Kumar,
2018) For the financial year 2018/2019, the company has raised Rs.10, 713
million (US $ 59.51 million). Its net profit was 1,591 million rupees (US $
8.83 million), up 33% from the 2018/2019 financial year. The share capital
issued by Ceylon Tea Services PLC is Rs.11, 522 million (US $ 64 million).
(Ukessays, 2016)
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Product categories

 The original gourmet tea

 Tea of premium single origin
 Exotic fun tea

Other products

 Fruit Infusions  Cheese Ball Cracker

 Ceylon Green Tea
 Asian Spice Tea
 Green Tea
 Almond Toffee
 Trax Pack
 Watte Single Estate Tea
 Box Pack
 Creamity Wafer Rolls
 Good Choice Cookies
 Korento Cookies
 Fruit Drop Candie
 Fruit Cookies
 Chocopie
 Darling Jelly

 Wafer Sticks
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1.1 Industry and Company Background

The global tea market size was $ 55,144 million in 2019 and is expected to
increase to $ 68,950 million by 2027. It will also be 6.6% from 2020 to 2027. The
green tea sector is the largest contributor to the market with an estimated revenue
of $ 16,362 million by 2019 and $ 26,110 million by 2027. (Roshan Deshmhuk et
al, 2020).

In 2009, Dilma achieved the British

Retail Association Global Standard for
Food Security

In 2012 Dilmah was the first real high tea in New first real high tea in
Zealand and Singapore. Also 2013 Dilmah was the Middle – east.

In 2015 Dilmah tea lounge in Indonesia and Malaysia.

Dilamh is very valuable in 2017 with Carbon natural
facility fulfill.

Also in 2019 they voted by most trusted brand in

New Zealand. (Dilamh , 2020)
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The Dilmah brand is today the third largest tea retailer in the world. There
are different types of demand and flavor in this market regionally. Accordingly,
Macro and Micro analysis will help in gaining an understanding of the global market.

2.2 Macro analysis

Factor Analysis
1. Political Under a relatively stable exchange rate regime, the
balance of payments is dictated by the government's
complex policies on agriculture in many countries.
(Molden, 1975). Edwards (1978) points out that various
government policies on tax relief, public research and
expansion, and public investment in infrastructure
development have been rationalized. (Edwards et al,
2000)
2. Economical Export earnings in 2017 were $ 1.43 billion, equivalent to
US dollars, based on the average exchange rates that
weighed on the global tea industry. But the main reason
for the decline in tea exports in 2018 was global political
and economic uncertainties such as declining production
and economic sanctions imposed on Iran. (Dailyft, 2019)
3. Social Nowadays their preference changes with the increasing
number of consumers who are concerned about health
issues. So Dilmah has launched more than 65 new
product lines. (DILMAH, 2019)
4. Technological Dilma has connected 24,297 online customers during the
period 2018/2019 and received 1,202 customer service
responses. Innovative tea using new technology uses
inspired music. There are also 2,384,695 tea-inspired
connections through social media connections and mobile
apps. (DILMAH, 2019)
5. Legal Compliance with laws, regulations, codes, internal controls
and approved policies, and compliance with all applicable
legal and statutory requirements of the DCTC. Also getting
licenses for Dilmah to sell all the tea contributes to the
rains. For example green tea. (DILMAH, 2019)
6. Environmental The climate in many of the countries where Dilmah
exports tea is dominated by extreme long and cold
winters. Namely UK, USA, New Zealand, Canada ETC, As
an alternative, tea is in high demand, so many people
keep it warm in a cold environment. So Dilma can easily
export tea. (DILMAH, 2019)

Table 2.2 Macro analysis – Dilmah

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Micro Analysis:

Dilmah has revolutionized the tea industry, which is dominated by multinational

corporations. The owner has been creating a vision for the past 4 years to expand
Dilmah's commercial world through branding and marketing. As a result of that
effort, the Dilmah brand is one of the 8 best tea brands in the world. (cimaglobal).
It markets over 2267 products worldwide and employs over 726 people. There, the
company provides internal and external training to meet the challenges of its
strengths and weaknesses. (Dilmah Ceylon Tea Company, 2016/2017). Given the
current market situation, global marketing initiatives, research and development,
and industry thinking leadership bring significant investment to the business.
According to their sustainability report (2018/2019), 48% of Dilmah's values are
retained for future development. Also, 31% is allocated for employees, 12% for
shareholders and 5% for development programs. (Dimah Tea, 2018/2019)

Dilmah's another commendable performance in the midst of challenging industrial

conditions saw sales volume grow by 11% and corresponding revenue by 16%. It
was largely a result of favorable currency movements. Strong high growth and
marginal expansion PBT up 32% to Rs.1.6 billion (2017/8 - Rs.1.3bn) and EPS
increased by 31% to Rs.76.71. (DILMAH, 2019)

Dilmah's customers can be viewed in two ways. That is, as supermarkets and
wholesalers. Initially it was difficult to deal with the supermarket chain but I had to
use a push strategy to buy tea. There are two types of global hot drinks. Namely
tea and coffee. The market value of these two is $ 69.77 million. Morocco, Russia
and the United Kingdom love green tea. Also, countries like the United States,
Pakistan and Japan have high demand for black tea. Another strong market for
dilmah tea in Australia. Dilmah is the No. 1 tea brand in the country. Dilmah tea
generally outperforms imported tea in retail in countries such as Russia and
Australia. Also dilmah is positioned in installments globally packaged tea so this is
of more interest to tea drinkers. (Paperdue, 2012)
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Suppliers are also very supportive of Dilmah to stay ahead in the tea industry. It
helps to make marketing strategies successful. Dilmah works for their development.
Below is a summary of global suppliers and distributors.

Tea Suppliers Global 15

Organic Tea Suppliers Global 11
Suppliers – Other Global 104
Distributors Global 34
Figure: Global suppliers & distributors source: (Dilmah, 2017/2018)

Figure: Global suppliers & distributors source: (Dilmah, 2017/2018)

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2. Competitor analysis

There is a huge demand for Dilmah in the global tea market. But there were several
key competitors to compete with Dilmah. There are main 10 Competitors to Dilmah
in Global sector.

 Twinings Tea  Celestial Seasonings Tea

 Tazo Tea Products
 The Republic of Tea  Harney & Sons Tea Products
 Lipton Tea Products  Bigelow Tea Products
 Yorkshire Tea Products  Tetley Tea Products

Following table shows a comparison between three key players in global tea
industry.

Company Global No of Sales Market Online platform

expansion Products share

Dilmah tea 104 2833 $ 59 million 26% T-Radio - Tea Inspired

in sales Music. Growth of social
(Dilmah, media 2% Dilmah Tea,
2017/2018) 4% The t-Lounge by
Dilmah, 4% Dilmah Tea
Gastronomy 79%MJF
Charitable Foundation,
55% Dilmah
Conservation (Dilmah,
2017/2018)
Twinning Tea 47 More $134.2 14.1% share Creating a Tea Lover’s
than 500 million of the total ‘Digital Utopia’
product (Bolton, market but (Panagas, 2017)
ranges 2019) holds 60% of
the specialty
tea market.
(Baker,
2012)
Lipton tea 110 96 $3.3 billion 11.6% Partnered with Alibaba to
products (Cavale, 2020) (Statista develop an online leasing
Research market for water
Department, purifiers. 76,000 people
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2014) have access to 2.3

million pieces of learning
content, with 55,000
pieces being consumed
on a monthly basis,
including PowerUp, our
digital upskilling
programme. (Uniliver,
2018)

According to the analysis of three competitors in the above tea industry, Dilmah's
work in twining tea can be seen to be expanding globally. However, in terms of
production, Dilmah has more products, but Twinning has a larger product range.
Through this they work to gain competitive advantage. Twining tea, however, was
ahead in terms of sales. It will be a challenge for Dilmah in the competition. Dilmah
has a large market share as it is spread across many countries. Also, all three
companies are reaping the benefits of digitization

The map below shows the market position of the major competitors in the global
tea industry according to their preferences. Dilmah, Twining and Lipton are the
three taste that are on the upper limit of consumer preference. But Dilmah has a
taste for taste rather than a brand. But at the top of the flavor is Lipton.

Source: (Yoann Pham,

Monica Conic, 2014)
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3. SWOT analysis

 Strengths
 Today, Dilma is one of the top 10 tea brands in the world
 According to Dilma's annual reports, they appear to be financially
stable.
 They offer their tea lovers a variety of products and flavors for new
and existing markets.
 The company has a very innovative skills team that regularly offers
innovations that expand the portfolio.
 Dilma has established a reputable brand in over 104 countries around
the world.
 Dilmah has experienced management of entrepreneurship. (dokumen,
2020)

 Weaknesses
 Dilma affected by price hike as climate change could damage tea
growing areas in Sri Lanka.
 According to the calculation of the cost of importing Dilma tea from Sri
Lanka to foreign countries, it is sold overseas at a slightly higher price
than its competitors.
 Since Dilma does not offer coffee or hot chocolate, consumers in those
markets are not attracted to Dilma. (dokumen, 2020)

 Opportunities
 Alcohol-blended blends, as a result, will be an opportunity for Dilma to
promote the new product.
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 Drink more than 50% of global alcohol consumption, so Dilma can

easily promote the new vodka product to market and increase market
share.
 Nowadays people buy products online because they have a busy
lifestyle and it is more convenient. Tea consumption is expected to
increase by 40% by 2020.
 Changing statistics and increasing demand for the premium tea
experience will continue to grow tea consumption for new
developments in the market.
 The transition of the global market to the healthier side of the food
and beverage industry is a green light for Dilma and she will be able to
further promote her green tea range. (dokumen, 2020)

 Threat
 Due to the popularity of coffee over tea, coffee is considered to be the
leading beverage in the market.
 Labor cost growing up.
 Comparatively low yield.
 Inability to engage in multi origin blending. (dokumen, 2020)

The SWOT analysis for the Dilmah brand outlines its

strengths, weaknesses, opportunities and threats. Accordingly, Dilmah's strengths
such as financial stability, being the third largest tea exporter in the world, and
having skilled employees are valuable strengths for the company's future business.
Like other exporters, Dilmah has identified their weaknesses. That is, climate
change, rising import costs, and so on. Dilmah deals with many countries through
its global online shop. Dimaha was also awarded the Carbon Natural Certificate in
2018. They are ready to produce vodka products for global drinkers, which is an
opportunity they have identified. They were also ready to replace green tea due to
increasing health problems. However, they also face rising labor costs, a common
threat. But Dilmah tactfully innovates its own talented employees.
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4. Sustainability Highlights in Dilmah

Source: (Dilmah, 2020)

 Decreased energy consumption - 10.6% (2016/2017)

 Decreased water consumption – 8% (2016 / 2017)
 Waste diverted from landfills – 98% (2016 / 2017)

Source: (Dilmah, 2020)

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 $0.3m Contributed to Dilmah Conservation

 $ 0.5m Contributed to MJF charitable foundation (2016 / 2017)
 100,000 Underprivileged Sri Lankans benefited to date
 Dilmah premium luxury leaf tea bags made from natural source and
compostable.

Source: (Dilmah, 2020)

7. Strategic Imperatives

Dilmah has created a forward-looking strategic vision in every sector. The

aim is to increase their market share and promote the brand. Accordingly,
Dilmah should focus on development in the next 12 months. The following
steps should be taken for this.

I. Proactive marketing efforts

II. Focus on Quality
III. An Inspired Team
IV. Driving towards production automation
V. Conservation and community engagement (Dailyft, 2019)

Most importantly, Dilma will continue to pursue activities that protect its
valuable brand and add value to the brand. Dilmah can be satisfied with its
performance and achievements over the past few years. But in order to be a
market leader in the future, it needs to expand its market share. A company
must have the ability to adapt to changing economic, social, political and
environmental factors in order to survive in the business world.
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