Final Report Tapal

MARKETING RESEARCH

TERM REPORT ON

SUBMITTED BY:

Urooj Khan

Salman Saeed

Irfan Bhatti

Akbar Nagaria

Owais Idrees Khan

SUBMITTED TO: Ms Fareen Razzak

IoBM

1

ACKNOWLEDGEMENT

We would like to thank Ms. Fareen Razzak for providing us the opportunity to work on

this report. This report has enabled us to apply almost all marketing concepts that were

covered during course and will help us to embrace further learning of the subject.

We would also like to thank Mr.Agha Ali Jaan, (Brand Manager, Danedar, Tapal Tea Pvt

Ltd, Pakistan) and Ms.Hafsa Farooq, (Assistant Brand Manager, Ice tea, Tapal Tea Pvt.

Ltd, Pakistan) for providing us with priceless information required for the making of this

report.

IoBM

2

EXECUTIVE SUMMARY

From the dimmest of history when

around 2727 B.C. a few leaves of a

wild shrub tea blew into the royal

bowl of boiling water being sipped

by the legendary Emperor Shah

Nung, known as the Divine

Husbandry as well as a patron of

arts. Tapal Tea here brought tea

from the royal bowl to the common man's cups as the most sought after beverage the

country over.

Under the management of the founder's son, Faizullah A. Tapal, the company continued

to grow and innovate. Currently it is being managed by the founder's grandson, Aftab

F.Tapal who has continued giving further strength to the foundations of quality laid by

his family. After studying abroad, Aftab F.Tapal returned to introduce professional

management and unique production ideas into the business. His progressive outlook

resulted in the total automation of the tea plants in Karachi.

Their motto "never compromise on quality" remains the byword on the lips of all

engaged in producing Tapal Tea that has resulted in customer's brand loyalty and their

unflinching addiction. The testimony of their quality has made them the first tea company

in Pakistan to earn the ISO-9001: 2000 Quality Certification, the symbol of supreme

quality standards.

Pioneer of the Danedar category in Pakistan, Tapal's Danedar remains a firm favorite

around the country with its grape-nutty appearance, rich golden color and a strong

refreshing taste. In fact its popularity is such that several multinationals have launched

their own versions, but Tapal remains the original and ultimate Danedar because of its

IoBM

3

unique color, aroma and taste. Color and a strong refreshing taste are its most significant

attributes.

Tapal is proud to have been a part of Pakistan's history since its inception. As a company

they have grown and flourished together with the great nation. Founded by Adam Ali

Tapal, the company first started marketing a number of quality blends to Pakistani

consumer market. Through continuous innovation and research and development they

gain a big share of Pakistani market. They still are growing and hope to be a leader in a

market in coming years.

IoBM

4

PASSION FOR TEA

The world's passion for tea is legendary, and as it became more a drink for the masses,

the commerce of tea became big business.

In Pakistan the annual consumption is about 150 million kilogram, and fluctuates

1kilogram per year; and is the world’s seventh highest consumption. Majority of the

country’s total population lives in rural areas (about 66 percent out of 150 million) where

tea consumption is in majority. It is the most popular and cheapest beverage. And tea is

world's second most popular drink (after water). It's easy to make, affordable and one of

the fastest growing beverages (6.5% over 5 years).

PAKISTAN BECAME A MAJOR TEA IMPORTER.

Pakistan is now the world’s third largest tea importing country. Kenya is the leading

supplier with 57 percent of Pakistan’s import.

The Pakistan’s tea-makers can be classified into:

The “blended and packed” segment of the market.

The “loose” tea segment.

Blending, Packaging and distribution are nominated by Unilever, the world’s largest

transactional corporation in the tea industry, and Tapal Limited, a very competitive local

firm. Both are based in the port of Karachi. There are some other minor players. Out of

recent total legal imports of 114,000,000 kilograms, 70,000,000 kilograms went to the

packers, while the rest was imported by independent traders who sell “loose” tea in open

markets.

IoBM

5

TEA ADDICTION

In Pakistan is can be taken as a symbol of relaxation

almost every 10th person is a tea addict and undoubtedly

feels proud of this addiction. Wildly recognized with its

flavours of light yet effective green tea, lemon tea, the

amazingly “sab ki favourite” doodh patti, the occasional Kashmiri Chai, or the delicacy

of herbal tea, we all love and adore tea.

ABOUT THE COMPANY

Tapal has been well recognized company of Pakistan since 1947. Adam Ali Tapal was

the founder of the Tapal Company. He bought a tea store in Jodia Bazar from a Hindu

who was at then migrating to India .

At that time of establishment, Mr. Adam Ali Tapal stood against the tough competition

and uncertainty (such as change in government setup, quota system, tea not grown here,

import restrictions etc) in the market because he saw an opportunity in the industry.

The shop in Jodia Bazar existed until the 1970 when the third generation of the Tapal

family, Mr. Aftab Tapal, the current CEO joined the company. Aftab Tapal introduced

professional management and unique production ideas to the business. A well trained tea

taster and tea specialist himself, Aftab Tapal introduced new tea concepts and developed

a wide range of tea blends catering specifically to the tastes of people throughout

Pakistan. Fazullah.A.Tapal (founder’s grandson), took over as CEO and initiated tea

distribution to retail outlets around the city for the convenience of the people.

Tapal has made its mark in the market by its very slogan “Laal hai toh Tapal hai”.

IoBM

6

MISSION STATEMENT OF TAPAL

To provide a value added service to our customers with quality, reliable, and world-class

service. Customer satisfaction is our number one priority.

OBJECTIVES

To transform our competencies into the best advantage for our clients.

To offer quality services with integrity, expertise and professionalism to enhances

our client's operation.

To offer personalized services according to the clients need.

STATEMENT OF COMMITMENT

Never Compromise on Quality!

This commitment to quality has resulted in a high level of customer satisfaction and

unflinching brand loyalty. Tapal believes to act locally, but think globally

IoBM

7

TAPAL’S PRODUCTS

1. TAPAL DANEDAR:

Tapal Danedar is pioneer of the Danedar

category in Pakistan. Tapal Danedar remains

a favorite around the country with its grape-

nutty appearance, rich golden color and strong refreshing taste. In fact its

popularity is such that other companies have launched their own versions of this

blend, but Tapal's remains the original and ultimate Danedar because of its unique

color, aroma and taste. Also available in double chamber tea bags, today Tapal

Danedar enjoys the position of the "No.1 Tea Brand" in Pakistan.

MARKET SEGMENTATION

The market for Tapal Danedar is highly

commodity driven and this product is easily accessible available through out

Pakistan. They have divided market into segments and choose working and

middle class.

MARKET TARGETING:

Tapal danedar is basically targeting urban people.

Danedar brand has the characteristics to remain intact even after a long

time. So it targets customers who want to fresh for longer time.

Tapal target the middle as well as lower class because they think middle class is

most important class

It is made to target customers who respond towards light and soft taste

The target audience will be primarily working class starting from the age

of 20 to round about 55 years of age.

IoBM

8

It is targeting

strong tea

drinker.

MARKET POSITIONING AND DIFFERENTIATION:

Product:

o Color, Aroma and Taste

o They have introduced 3 trade mark soft pack variations, 3 enveloped pack

sachets, a high utility jar, a pouch and the ground-breaking convenient

teabags.

Price: Company is offering medium range price so that most no of people can easily

afford it

Promotion:

o Print campaign

o Advertisements

o Focusing on har lamhe ki chai

o Started a show “chai ke lamhaat laaye laakhon ke inamaat” in order to give

benefits to customers it was launched at ARY DIGITAL,ATV,APNA etc

IoBM

9

Density Urban

Region All over Pakistan

Income Under 15000 - 30,000 RS

Lifestyle Believers achievers and strivers

Social class Middle class, Working class

Taste preference Light

Age 10 and above

2. TAPAL Family Mixture:

A unique combination of high-grown Kenya leaf and

dust tea, Tapal Family Mixture is the pride of Tapal.

Developed in 1947, it created a completely new

category in the tea market. It gives a refreshing aroma

of leaf and the strong taste of dust- together in one

cup. It is the blend that started the Tapal success story

and many other companies followed Tapal in introducing similar blends.

MARKET SEGMENTATION:

Tapal Family Mixture is a blend of leaf tea and dust which give both strength and aroma

to strong tea lovers. Tapal have chosen segment of traditional family and for upper

middle class .

MARKET TARGETING:

Tapal famil mixture is again targeting urban

people.

It is targeting joint family system which we

can still found in Pakistan

Tapal attract the upper middle class buyer.

It is made to target customers who respond

towards strong and pleasant taste.

It is made for whole family.

It is targeting strong tea drinker.

Market Positioning And Differentiation:

IoBM

10

Density Urban

Region All over Pakistan

Income Rs 25000 and above

Lifestyle Traditional (family)

Social class Upper middle class

Taste preference Strong

Tapal family mixture sets position in minds of consumer as it is for whole family, for

every member of family.

Tapal captures consumers in following ways

Product:

o Color

o Aroma

o strong Taste of dust

o They have introduced tea bags and jars for house hold

Price: Company is offering medium range price so that most no of people can

easily afford it

Place: company has made it easily available all over including big stores, small

stores and very small shops like khokas

Promotion:

o TV show launched name ”KHUSHI KE LAMHAAT” staring MANI and

TEHREEM .Motive was to give prizes to customers and earn their loyality

o SMS campaign

o Launched song”Laage na nazar

IoBM

11

SHADES OF GREEN:

Tapal Shades of Green is an aromatic combination of the

finest carefully selected tea leaves and the tantalizing

freshness of natural Jasmine, Elaichi and Lemon.

Jasmine

Infused with Jasmine

flowers, Jasmine Green

Tea opens a new

window to your mind.

Its vibrant essence

breathes new life into your sense with a distinct soothing effect. Jasmine Green Tea is a

winning combination of alluring fragrance and health.

Elaichi

The earthy flavor of Elaichi Green Tea has a pulsating nature that lifts your body to a

new level of clarity giving you more revitalization.

Lemon

Lemon Green Tea with its rich taste regenerates your

soul. It is your perfect soul mate to indulge in a

rejuvenating experience of its refreshing essence

Market Segmentation:

Tapal has segmented on

the basis of health

IoBM

12

Density Urban

Region Across Pakistan

Income Rs. 25,000 & above

Lifestyle Thinkers achievers &Health conscious people

Social class Lower uppers and uppers

conscious consumers who are very health conscious and

are not ready to compromise their healthy diet patterns

under

any circumstances whatsoever. They want tea with a strong

taste and smell, there is simply no way that they want to

give up on the typical, cultural taste of their tea. So Tapal

has designed product for health conscious people.

Market Targeting:

Tapal family mixture is again targeting urban people.

It is made to target customers who are health conscious

It is made for health benefits.

As it is made from jasmine ,lemon and elaichi which are harmless for human

beings


By offering health benefits, it has maintained strong position in the minds of consumer.

Product:

o Color

o Aroma

o It activate your senses

o Suitable for your health

Price: Company is offering medium range price so that most no of people can

easily afford it

Place: Company is trying to promote it all over Pakistan

Promotion:

o Billboards and advertisements were launched

IoBM

13

IoBM

14

CHENAK:

An economy dust embracing high grown flavor teas

proportionally blended with medium grown Kenyan

golden color teas to give an all round cup at a reasonably

lower price Chenak Dust infuses quickly and gives the

consumer a strong bright color cup within a very short

time.

Chenak Dust is popular with those ‘tea lovers’ who take

several cups of tea due to its friendly price.

Market Segmentation and

Targeting:

Tapal have segmented the rural Sindh into upper interior Sindh and lower interior

Sindh. Tapal Chenak is targeted to the lower interior Sindh, for the middle lower

and lower end segments of the market that prefers strong tea, but cannot afford a

high quality tea.

It is made to target local people of Sindh

It is for those people who have low

earnings.

Market Positioning And

Differentiation:

Company sets low price position in the

market.

Product:

o Color

o Aroma

o Light Taste

IoBM

15

Density Rural

Region Interior upper Sind

Income 15000 RS and less

Lifestyle Traditional people who

prefer light taste

Social class Lower middle class

Taste

preference

Light

Age 7 and above

Price: Low price is offered to fulfill demands of lower class people

Place: Company has made it available every where in Sindh as well as big cities.

Promotion:

Issued Om shanty om calendar

Launched a show “dar dar par inam”

IoBM

16

TEZDUM:

Tapal earned a unique distinction in 2003 as it became

the first tea company to introduce hassle-free, extra

strong round teabags in Pakistan. With no strings

attached, these teabags are easy to use and their shape

guarantees an ideal infusion of taste and aroma for a

refreshing, strong cup of tea. With the tagline, “Lage

Thaa Kar Ke!” Tapal Tezdum has hit home with the

people who like strong tea


Density Rural and metropolitian

Region Punjab and Khyber pakhtoon khwah

Income 15000 to 25000 Rs

Lifestyle people who prefer strong taste

Social class Middle class


Market Targeting:

People who love to drink strong tea

It is targeted people who has rular background

It is made to hit those people who belive in

Quality


Tezdum is considered as strong tea which gives you

strength to cope with your problems

Product:

IoBM

17

o Color

o Aroma

o Strong taste

Price: They have launched 125 gm packet but strong contents so u use little

amount with better results

Place:

o Made available at door step

Promotion:

o Launched advertisement about it strong taste

IoBM

18

MEZBAAN DUST

Tapal Mezban Dust has an attractive leaf appearance, which is neat, black and grainy. It

is the finest quality dust blend which is carefully selected for its quick liquoring

characteristics.

Only high grown Kenyan teas are used for this blend due to their high concentration of

flavor and strength. Mezban Dust has a smooth, thick and full cup with an irresistible

aroma making it a perfect cup at any time of the day.


Density Rural

Region Interior upper sindh

Income Under 10000

Lifestyle Traditional people who prefer strong taste

Social class Lower middle class


Market Targeting:

IoBM

19

Tapal have segmented the rural Sindh into upper interior Sindh and lower interior Sindh.

It has targeted the upper rural market of Sindh by taking out a product Mezban Premier.

It is mainly targeted towards old traditional people who prefer strong tea


The positioning of the brand has been strategically achieved to symbolize the bonds and

relationships that underscore the human equation for the people of Sindh along with

celebrating their rich heritage and culture.

Product:

o Color

o Aroma

o Strong taste

Place:

o Door to door selling

Promotion:

o Mezbaan trade dhamaka :trader were provided rewards

o Announced customer promotion titled rishton ka safar

IoBM

20

ICE TEA:

The invention of ice tea is generally

believed to have occurred in America

in 1904, although some evidence has

been presented that it may have been

drunk in the South well before that.

Like many great inventions, ice tea

was created completely by accident.


Density Urban

Region Across Pakistan

Income 35000 and above

Lifestyle Inovaters thinkers and experiencers

Social class Lower upper class and upper class

Taste preference bitter

Age 18-40 years

IoBM

21


Price :

o The introductory price of ice tea is Rs 30

and thus it is not very expensive

Place:

o They have not done efforts to make

available all over country but if they try

to promote it can easily get available to

every where because Tapal network is world wide.

IoBM

22

INTELLECOVERAGE

IoBM

23

PRODUCT LIFE CYCLE

IoBM

24

Internal Factors Strengths Weaknesses

Management Experienced, broad base of interests and knowledge

Large size may lead to conflicting interests

Product Line Differentiated, Variation in products

So much product lines but still not able to knock out loose tea.

Marketing Diverse, and local awareness May lose focus, may not be segmented enough

Personnel Very experienced, high knowledge

Possible conflicts due to so many people, possible trouble staying focused

Finance High sales revenue, high sale growth, large capital base

High expenses, may have trouble balancing cash-flows of such a large operation

Research & Development

Continuous efforts to research trends an reinforce creativity

Sometimes they conduct research but the advantage is taken over by small competitors.

External Factors Opportunities Threats

Consumer/Social Increase in the population Illiterate people go for loose tea which is substandard as well

Competitive Distinctive name, product and packaging in with regards to its markets

Intense competition can pay so they have to keep eyes open

Technological

Maintenance of proper website which subscribes and provides information regarding long production line.

Competitors are global leaders so they have more technology as compared to Tapal

Economic Consumer income is high for the danedar class

Very elastic demand, almost pure competition

IoBM

25

DISTRIBUTION NETWORK

Distributors:

Tapal deals only with distributors on contract basis with no other intermediaries involved.

They do not extend credits to their primary customers and all their sales are mainly cash

based.

The contract comprises of a specification of a complete volume of the market, Tapal’s

share in the market, the profit margin of the distributor, the sales that will be made by the

distributor, as well as the complete route plan of the distribution network.

Tapal chooses their distributors after analyzing their complete financial background and

Public Relations. They provide the distributors with a detailed description of the

distribution network; all the costs and expenses involved and when the distributor agrees

the contract is signed. This contract involves the condition that the distributor has to be

brand loyal, pro-active and cannot deal with other tea companies otherwise the contract

will be terminated. The contract includes a clause that describes its termination process.

Either of the two parties: Tapal and the distributor, can terminate the contract on one

month basis.

IoBM

26

Company

Distributor

Whole sellers Retailers

Universities Restaurants/ Institutions Offices House holds

IoBM

27

BCG MATRIX of TAPAL’S PRODUCTS

IoBM

28

COMPETITORS

Tapal’s competitors include

• Lipton

• Tetley

• Supreme

• Unbranded tea suppliers

IoBM

29

TEA MARKET SHARE

TEA MARKET SH

Tapal has 46% share in tea market , while lipton shares 23% ,brooke bond and

Tetley has 10 % share .

IoBM

30

DISTINCTIVE CAPABILITIES

Distinctive capability varies according to the products as it goes with the tea industry

ORGANIZATIONAL PROCESSES

Tapal danedar tea has very effective research and development through which they are having very innovative brands with production efficiency.

SKILLS AND ACCUMULATED KNOWLEDGE

Tapal danedar has developed impressive skills in operating its business model at very high quality accumulated knowledge has guided management improving business design overtime

COORDINATION OF ACTIVITIES

Coordination of activities among different departments is the essence of tapal danedar. Research and development supports other departments to have controlled and timely production.

ASSETS

People inside the organization and Tapal itself brand names are assets of the company.

TAPAL’S RESEARCH AND DEVELOPMENT EFFORTS

Aftab F. Tapal is a well-trained and highly experienced tea taster of the country and is

recognized as a qualified tea specialist worldwide. Tapal's tea managers have been

trained at home and abroad in this very rigorous and specialized discipline, and have

frequently travelled to leading tea-producing countries searching for better teas.

IoBM

31

UNIQUE SELLING PREPOSITION

The main reason behind tapal’s success is that it has

localized its taste. It manufactures its product according

to the taste and requirements of the market it is catering.

Another reason behind Tapal’s success in catching the

hearts of the consumers is that, it has always been close to them. This has been possible

because of its strong Brand Activation Activities. These activities have added a new

dimension to their marketing activities making them more attractive, exciting and

interactive as possible.

MARKETING MIX

PRODUCT

Tapal has a variety of brands each catering to different market segments. After Tapal’s

unique Family Mixture became Karachi’s largest selling brand, the company was

encouraged to innovate further. As a result an entirely new category brand called Danedar

was created and launched. Tapal Danedar became the country’s largest selling tea brand

with a loyal following, which shows that Tapal has been successful in creating a strong

Brand Image amongst its consumers.

PRICE

Tapal people never wanted to compromise on quality so they adopted value based

pricing. As Tapal specifically catering to different segments of the market so its prices

are based on its effective value to customers relative to other products. Also the prices are

different for different SKU’s.

IoBM

32

PLACE

Now Tapal has a distribution network spread across Pakistan, from Karachi to Khyber

with over 400 distributors. Extensive training programs are provided for the devoted sales

personnel. The popularity of its fine brands is unabated, making it the No 1 national tea

company in Pakistan.

Tapal caters to its customers by providing Tapal Danedar and Family Mixtures to more

than 140,000 outlets in Pakistan, which include superstores, department stores, general

stores, medical stores, paan walas, grocery stores, merchants, etc. Grocery stores and

merchants together provide 80% volume of the tea sales.

PROMOTION

• Electronic Media

Initially, the company relied heavily upon print media but this trend is changing now

because of the in customer’s life style. Right now, company is doing intensive advertising

through networks. In their advertisement they hire the services of renowned celebrities.

• Tapal and Music

With the view that the younger generation will be Tapal's future customers, Tapal is

actively supporting the fast developing music industry in Pakistan. It has sponsored the

leading singers in Pakistan and actively participates in music concerts.

• Sales Promotion Strategies

The company is running different sales promotional schemes at different times of the

year depending on the sales of the company.

IoBM

33

Tapal’s brand is backed by planed strategy implementation and followed up with

effective communication its advertising and promotion is touching all aspects of media

and market opportunities.

PROMOTIONAL MIX

Communication of the value created by the company is very important; this stage in our

view is the trickiest stage of the entire value creation process. The entire effort of creating

the value will go down the drain if the communication is not done properly. There are

cases when a company fails to communicate the value to the selected target customers or

even worse when the target customers get the wrong message. There are many ways to

communicate the value created; Tapal has used the following tools and techniques to

communicate the value they have created for their target customers.

Advertising

As far as Advertising is concerned, the company has shifted away from television

advertising to “MASS ADVERTISING”. The basic reason for the shift is that the

organization realizes that television advertising is not the same as it used to be around 12-

13 years ago. With a wide range of television channels available it is very difficult to

convince the viewer to not to change his/her channel. But this does not means that they

do not indulge in television advertising at all. The new brand “Tapal Mezban Dust” is

targeted for the customers of interior Sindh. This brand extension needs both

TV as well as mass marketing as it is struggling with in the awareness stage. The TV

adds show the culture of Sindh and tries to correlate the sindhi heritage of hospitality

with the image of the brand. Ads are shown on KTN as it is believed that sindhi viewers

do not change the channel during commercial breaks as it is the only sindhi channel.

IoBM

34

Mass Advertising in the form of billboards are the most

common form of advertising. The expenditure ratio of mass

adverting to television advertising is 1.5 to 1. Big billboards

with high color resolution for ‘Gulbahar’ (their new green

tea) are good at tempting the customer to try the crystal clear

green tea. The portrayal of men wearing formal suits and

having tea at restaurants has persuaded people of the

corporate sector to try the slightly expensive green tea.

Advertising on the new Fm radio channels like City Radio or

FM 107, FM 96 is also extensively done for the young urban

crowd for family mixture.

Public Relations

As far as publications such as catalogues and brochures are concerned the company does

not have any such publications. They have not yet focused on the possibility of issuing

any sort of publications for improving upon public relations.

Personal Selling

The company has a B2B (business to business) approach as far as personal selling is

concerned. Sales rep visit hotels like Marriott and Sheraton to offer bulk amounts at a

discount rate. Through this process they are able to sell more and this serves as an easy

method for further communication of the value which was promised primarily in ads and

billboards. Face to face communication of value is much more effective than advertising

as immediate feedback can be received which helps in ameliorating the communication

process.

Direct Marketing

Again no form of this communication is taking place at a formal level. The company does

not have a separate department. The only form of direct marketing is done by the brand

IoBM

35

managers who readily receive any complaints and

comments about their brand through emails but do not

respond to those emails. They only look after certain

complaints which have been reported consistently.

Sales Promotion

Sales are promoted by encouraging the market segments

through free sampling. The target segments are given free

samples of the tea brand which is targeted for them. Free

sampling of such a brand (Tez Dam) was carried out for almost 2 weeks. After 2 weeks a

lot of students bought the product although the product was no more for free and had no

market before the free sampling was done.

Sales Force

Tapal at present has hard any notable sales force. When asked why? The company

manager responded that since Tapal makes tea. Tea is a convenience product, such

products are widely available, and customers have frequent purchase with little shopping

effort. Such products have little customer involvement; hence a well equipped sales force

is not essentially required. According to the manager of Tapal, making sure that the

product is available all the time is more important.

IoBM

36

ACHIEVEMENTS OF TAPAL:

• The first to introduce soft packs in the country.

• The first tea company to introduce metal-free tea bags.

• The first to develop an entirely new blend and category-Tapal Family Mixture (the

mixture of leaf & dust).

• The first to invent the highly successful brand Danedar Leaf Blend.

• The first to market Kenya teas in Pakistan.

• The first tea company to be awarded the ISO 9001/2000 Quality Certification

IoBM

37

TAPAL TEA (PVT.) LTD. HAS MADE YET

ANOTHER MARK!

Philip Kotler’s latest book “Marketing Management; A

South Asian Perspective”, contains a detailed case

study of Tapal Danedar and its proud tale of success.

Tapal Tea of Pakistan is a good example of how a local company comes out of the

shadow of a giant multinational and becomes a challenger in the market.

(Taken from: Kotler “Marketing Management”,13th Edition-A South Asian Perspective)

IoBM

38

Final Report Tapal

Documents

Transcript of Final Report Tapal