Assignmeliptopnt of Lipton

7/29/2019 Assignmeliptopnt of Lipton

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Table of Contents

Serial Number Heading Page number

1 Introduction 3

2 SWOT Analysis 3

3 Competitive Advantages 5

4 Target strategy 5

5 Positioning Targeting 6

6 Product Development Strategy 6

7 Promotional Strategy 7

8 Recommendations 8

9 References 10

10 Appendix 1 11

11 Appendix 2 12

12 Appendix 3 13


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Introduction

Lipton is one of the best known and bestselling brands of tea and has made a big splash in global

market with its tea-based drinks including leaf tea, infusions, ready to drink tea and other

alternatives to soft drinks. It has a wide product range which includes, Yellow Label Tea, Lipton

Ice Tea and Lipton Green Tea (Unilever, 2011)

SWOT Analysis

SWOT analysis is a strategic plan that is used by businesses and companies to evaluate the

strengths and weaknesses that can make or break their organization. It also highlights the

opportunities that a company can consider and threats that can cause problems for a company.

Strengths and weaknesses are internal organizational factors where as opportunities and threats

are external factors for an organization(Kotler, 2009)

Strengths

i. Lipton is a brand of Unilever, which is a multinational company with huge funds andprofits and business spread all over the world. Hence, Lipton through Unilever has access

to vast markets and large customer data base. Consumers too, trust Lipton as a brand

since it is a product of a great company like Unilever.

ii. The biggest strength of Lipton as a company is that it has existed for years in the marketand has operations worldwide in over hundred and ten countries. (Unilever, 2011)

Hence, it has strong brand recall and brand awareness. People all over the world are

aware of the brand and have strong recall of it. Moreover, the company has a large

number of loyal customers that have stayed loyal to the brand since years.

iii. Lipton uses internet based marketing techniques extensively to promote offers, discountsand introduction of new products and services (Boyer and Hult, 2005) It also has

competent management team which is able to perform outstandingly even in existing

fierce competition and high inflation rates. Through its management team Lipton Tea hasretained its position as the market leader with the sales of nearly over three billion today.

(Unilever, 2011)

iv. Lipton as a brand has strong ethical values and its slogan for Lipton Tea Lipton Tea CanDo That has been successful worldwide (Lipton, 2011)


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v. Another prominent strength of Lipton is that it comes up with new innovative productsquickly to satisfy changing consumer demands. It has come up with different tea flavors

like as Lipton Vanilla and Lipton White Tea Pomegranate for its consumers. Moreover,

Lipton realized the growing need and demand of market for green tea and instantly came

up with its Lipton Green Tea product to satisfy its consumers (Lipton, 2011)

Weaknesses

i. One of the biggest weaknesses of Lipton is its high price. Due to this a lot of consumersare unable to buy the product.

ii. Tea is a habitual need of many people around the world. Hence, the competitors inmarket are immense. These include Indian and Chinese tea production companies that

have generally lower prices than Lipton. Moreover, since Lipton has operations in more

than hundred countries, the local tea producing houses are also potential competitors.

iii. There are also potential substitutes in the market available for tea. These range fromcoffee to juices and soft drinks.

iv. The positioning of Lipton as a brand is such that it has given an image of a premiumproduct. Such positioning has resulted in low emotional attachment on the part of

consumers for Lipton.

Opportunities

i. One of the biggest opportunities for Lipton is the increasing population growth globallyand the increasing growth of tea market all over the world. Lipton can, hence, increase its

customer database.

ii. People all over the world have become health conscious even when it comes to drinkingtea. Green tea has become a favorite for all people regarding losing weight. Hence,

Lipton can exploit this particular consumer need and increase its market shares.

iii. Lipton has exploited markets all over the world but there are markets remaining to beexploited. It can exploit those markets and make its presence more dominant in the world.

iv. Lipton can even take over small local tea production houses to reduce competition in thecountries that it is operating in.


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Threats

i. The threats that exist for Lipton are immense. These include price wars that Liptoncontinuously has with other competitors both locally and internationally. Moreover,

cheaper technology has given the option to small companies in investing in producing

tea. Low barriers to entry are also increasing competition.

ii. Rising inflation is also a threat for Lipton since it is decreasing the disposable income forconsumers and may result in decrease in buying of Lipton products.

iii. Lipton imports its raw materials to different countries worldwide. These includeimporting materials from its plantations from Kenya, Tanzania and East Africa. Hence,

the rising taxes and import duties will further add the cost of producing Liptons products

(Lipton, 2011)

Competitive Advantage

Liptons main competitive advantage is their admirable portfolio of references. Since they have

been in this business for years, their experience and dominance cannot be easily ignored.

Throughout the time that they have been in the business, they have gathered a large number of

loyal customers all over the world. Hence, the long list of loyal customers promotes an image of

Lipton to potential customers as the one of trustworthiness and quality. Also, Liptons net sales

were generated to up to 3 billion currently which proves that customers prefer Lipton Teaadmirably (Unilever, 2011)

Lipton has also proven that it can work extremely well in multi-sectored partnerships. It also has

a good global logistics network that has proven its worth with time. Moreover, they have

scientific knowledge regarding food and nutrition with an excellent research and development

department (Lipton, 2011)

Another core competency of Lipton is its strategic business planning. They set directions through

strategic planning for the organization overall where everybody from executives to employees

are committed (Grant and Wilson, 2003). This ensures that every part of the organization is in

harmony and the work done then carries a meaning. This also leads to making fundamental

changes in customer service when necessary, making important investment decisions or doing

research and development when required (Grant, 2010)


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Last but not the least, another major core competency of Lipton is the way that it has been able to

manage the diverse consumer portfolio worldwide keeping in view the cultural differences and

cultural preferences of consumers. Moreover, they have also identified the changing needs of

consumers before their competitors since they came up with products like Lipton Green Tea and

Lipton White Tea (Lipton, 2011)

Target Strategy

Tea drinking has become a habit for people all around the world. It is no longer considered a

fashion, neither it is drunk at occasions, rather, people now drink tea at least twice a day or more

considering their needs.

In such a situation, where tea drinking is high, Lipton has targeted the market as follows:

1. People who are addicted to tea or drink tea at least twice a day due to their culturalbackground or any other reason. Lipton has targeted such people with its Lipton Yellow

Label Tea, Red label and Black Label Tea.

2. For people who have become health and weight conscious, Lipton has targeted them withLipton Green Tea and Lipton White Tea. It has even come up with different flavors to

satisfy changing consumer demands for taste.

3.

Its third target audiences are the youth. These are those youngsters who want substitutesfrom soft drinks and juices and a beverage that is ready to drink and can be consumed out

of house easily. Lipton has come up with Lipton Ice Tea that is packaged in disposable

cans and is available readily.

Positioning Strategy

Lipton has positioned itself worldwide as a brand that is healthy and of high quality along

with a high price. It has developed a feeling of high class and great aroma to its name. Its

positioning is the same globally no matter whether it is operating in developed nation like as

United Kingdom or in developing nations.


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Product Development Strategy

Lipton always comes up with new tastes and flavors to satisfy consumers changing

demands. It has come up with different tea flavors like as Vanilla and even flavors in Lipton

Green and White Tea brands ranging from Raspberry to Pomegranate in White Tea and Orange

to Natural Green for Green Tea.

It has even formed collaboration with the leading soft drinks company Pepsi Co. for its iced tea

product range. The collaboration was done for two main reasons that are to move Lipton to new

distribution channels and into new markets

Product Life Cycle

A product life cycle can give a business an essential advantage (Grant and Wilson, 2003). This is

because it helps the businesses to observe when to launch a product and assess the current

position of a product on the life cycle graph. Product life cycle consists of five stages namely;

introduction, growth, maturity, decline and extension (Stimpson, 2002)

Lipton has reached the stage of maturity where its sales have remained constant and its

consumers are buying its products continuously. However, the brand has applied many extensive

strategies recently, with introduction of new products and flavors and extending its markets.

If we take any one product of Lipton and study it, we will come to know that almost all of

Liptons products have extended their product life. An example is that of Lipton Yellow Label.

The product had reached maturity stage and to extend its life various promotional campaigns

globally took place along with introduction of new flavors like as Yellow Label French Vanilla,

Orange & Spice and Raspberry.

Promotional Strategy

Lipton has used a large number of promotional strategies for promoting its brands.

1. Its uses below the line promotion tactics like as kiosks at markets and point of sales insuper markets. It has even appointed sales people whose target was to ensure that people

can get a free sample of any new flavor that Lipton launches.

2. It has participated in discounts and various sales promotions.


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3. The company has been a part of informative advertising where it has informed itsconsumers about health benefits of its products. Moreover, it has also involved itself into

various exhibitions (Hill and Jones, 2009)

4. Moreover, it has even initiated carom championship events throughout UAE in tea shopsLipton also used a promotional strategy where consumers were given an offer to buy

three family size boxes of Iced Tea Brew or cold Brew to get a NASCAR licensed pitcher

for free during 2008 (Lipton, 2011)

5. The brand also uses celebrities to endorse it where recently it has used pop singer. It hasproduced a global advertisement using Lalo Schifirin, an internationally acclaimed music

composer, which was aired in more than twenty countries.

Recommendations

The first and foremost recommendation for Lipton is that it should lower its price andaim for people with lower incomes. In this manner, it will be able to generate more sales

and increase its profits. Moreover, it will also be able to increase its customers database

too.

Tea market is such a market that is growing and has there is no possibility of it to reachsaturation. Hence, Lipton should apply extension strategies like as increasing promotions

and finding new markets.

Youth today like as college and university going students have been noticed to increasetheir consumption of tea. Lipton should target the youth extensively with new packaging

and flavors to target them.

Local competitors are a big threat for the company. Hence, Lipton should either formcollaborations with them or take over the local competitors to decrease the number of

competitors.

Products like Coffee and soft drinks are easy substitutes for tea. A large number of peopleconsume them and those who do not, there is a potential that they might substitute from

tea drinking to these products for a change in taste. Lipton should exploit the healthy side

of drinking tea and promote it extensively. This will generate good results since people

are becoming more health conscious.


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The market for Green Tea is on rise. A large number of people have increased theirconsumption of green tea for various health and weight reasons. Lipton has high shares in

Green Tea market, but there is still potential for more.

Lipton should aim for strong relationship with its customers since customers are the oneswhom Lipton is aiming to satisfy. Hence, their complaints and suggestions will help the

brand to cater to their needs and become stronger.

Lipton has operation worldwide in more than hundred countries. It should aim ounderstand the different tea habits and the cultural differences.

Even though Lipton has been a market leader for a long time, it should not consider thisas an everlasting thing. It should continuously invest in technological innovations and

develop strategic management.

Lipton should opt for Human Capital Management rather than Human ResourceManagement that is their aim should be to consider their human part of raw materials as a

capital only and they should invest in this capital to produce greater results (Hill et al,

1998).

Lipton should be more involved in Corporate Social Responsibility as a brand. It shouldeven opt for Go Green campaign where it adopts environmentally friendly business

tactics. This will leave a good imprint on peoples minds that are becoming more aware

of preserving the environment.

The brand should start promotional strategies that are below the line activities. These canbe held at universities and college campuses aiming the youth.


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References

Unilever, 2011,Lipton, available at

http://www.unilever.com/brands/foodbrands/lipton/index.aspx [accessed 5/2/2011]

Kotler, P., (2009),Marketing Management, a South Asian Perspective, Prentice Hall, U.S.A., pp

50-52

Boyer and Hult (2005),Journal of Operations Management, 23:6, 642-661

Grant, R.M. (2010). Contemporary Strategy Analysis, Wiley, New Jersey. Pp. 471-473

Grant, C. and Wilson, R.M.S., (2003). Strategic Marketing Planning. Burlington, MA:

Butterworth-Heinemann Publications.

Hill, J., Mcgowa, P., and Maclaran, P., (1998). Developing Marketing Planning Skills:

Combining Theory and Practice.Journal of Marketing Practice, vol. 4(3), pp. 69-84

Hill, C.W. and Jones, G.R., (2009). Strategic Management Theory: An Integrated Approach.

Mason, OH: Cengage Learning. pp. 441.

Lipton, 2011, Sustainable Development and World of Tea, available at

http://www.lipton.com/en_en/#Sustainable development-3,22[accessed 5/2/2011]

Food & Drink Europe.com, 2003, Unilever, Pepsi Co. join forces to meet ice tea challenge

available at http://www.foodanddrinkeurope.com/Products-Marketing/Unilever-PepsiCo-join-

forces-to-meet-ice-tea-challenge[accessed 5/3/2011]
http://www.unilever.com/brands/foodbrands/lipton/index.aspxhttp://www.unilever.com/brands/foodbrands/lipton/index.aspxhttp://www.lipton.com/en_en/#Sustainable%20development-3,22http://www.lipton.com/en_en/#Sustainable%20development-3,22http://www.foodanddrinkeurope.com/Products-Marketing/Unilever-PepsiCo-join-forces-to-meet-ice-tea-challengehttp://www.foodanddrinkeurope.com/Products-Marketing/Unilever-PepsiCo-join-forces-to-meet-ice-tea-challengehttp://www.foodanddrinkeurope.com/Products-Marketing/Unilever-PepsiCo-join-forces-to-meet-ice-tea-challengehttp://www.foodanddrinkeurope.com/Products-Marketing/Unilever-PepsiCo-join-forces-to-meet-ice-tea-challengehttp://www.foodanddrinkeurope.com/Products-Marketing/Unilever-PepsiCo-join-forces-to-meet-ice-tea-challengehttp://www.lipton.com/en_en/#Sustainable%20development-3,22http://www.unilever.com/brands/foodbrands/lipton/index.aspx


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Appendix 1

Product Life Cycle of Lipton

Introduction Growth Maturity Decline Extension

Strategy

Lipton


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Appendix 2

Product Life cycle of Lipton Yellow Label Tea

Lipton

Yellow

Label

Tea

Introduction Growth Maturity Decline Extension

Strategy


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Appendix 3

Market Map of Liptons positioning globally

High Price

Low Price

Low Quality High Quality

Lipton

Assignmeliptopnt of Lipton

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