Final Sahil Research Report Ss

7/28/2019 Final Sahil Research Report Ss

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A

RESEARCH REPORT

ON

Consumer behavior regarding tea industry

SUBMITTED TO:-

KURUKSHETRA UNIVERSITY

KURUKSHETRA

In Partial fulfillment for the degree of

M.B.A

Session 2011-2013

SUBMITTED TO: SUBMITTED BY:

MS.VASUNDRA SAINI SAHIL SHARMA

Assistant Professor. MBA MBA -IV SEM

UNIV. ROLL NO

Swami Devi Dyal Institute Of Management Studies Barwala, Panchkula (Haryana)


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SR NO. CONTENTS PAGE NO.

Certificate of company Acknowledgement Preface Declaration

III

IV

V

VI

Chapter 1 Introduction Introduction of the company 7-1516-36

Chapter 2 REVIEW OF LITERATURE 37-40

Chapter 3 RESEARCH METHODOLOGY

Research design Scope of the study Objectives of study Limitation of the study

4142434445

Chapter 4 DATA ANALYSIS AND INTERPRETATION 46-59

Chapter 5 FINDINGS & SUGGESSTIONS 60-62

Chapter 6 CONCLUSION QUESTIONNAIRE BIBLIOGRAPHY

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CERTIFICATE

This is to certify that SAHIL SHARMAhas completed the project entitled Consumer

Behavior Regarding Tea industry under my supervision. To the best of my knowledge, the

report consists of result of the empirical study conducted by the student. In my opinion, the

work is of requisite standard expected of an MBA student. Therefore, I recommend the same to

be sent for evaluation.

Research Guide Principal


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ACKNOWLEDGEMENT

Gratitude is the hardest of emotions to express and one often does not find adequate words

to convey what one feels and trying to express it

The present project file is an amalgamated of various thoughts and experiences .The successful

completion of this project report would have not been possible without the help and guidance

of number of people and specially to my project guide .I take this opportunity to thank all those

who have directly and indirectly inspired, directed and helped me towards successful

completion of this project report.

I am also immensely indebted to my guide, Ms.Vasundra Saini Assistant Professor(MBA)for her illumining observation, encouraging suggestions and constructive criticisms, which

have helped me in completing this research project successfully.

There are several other people who also deserve much more than a mere acknowledgement at

their exemplary help. I also acknowledge with deep sense of gratitude and wholehearted help

and cooperation intended to me by them.

SAHIL SHARMA


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PREFACE

Research Project is the bridge for a student that takes him from his theoretical knowledge world

to practical industry world. The main purpose of it is to expose for industrial and business

environment, which cannot be possible in the classroom.

The advantages of this sort of integration, which promotes guided to corporate culture,

functional, social and norms along with formal teaching are numerous.

1) To bridge the gap between theory and practical.

2) To install the feeling of belongingness and acceptance.

3) To help the student to develop the better understanding of the concept and questionsalready raised or to be raised subsequently during their research period.

The present report gives a detailed view of the Consumer Behavior Regarding Tea

industry. The research is definitely going to play an important role in developing an aptitude

for hard self-confidence.


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DECLARATION

I hereby declare that, the project entitled Consumer Behavior Regarding Tea industry

assigned to me for the partial fulfillment of MBA degree from Kurukshetra University,

Kurukshetra. The work is originally completed by me and the information provided in the

study is authentic to the best of my knowledge.

This study has not been submitted to any other institution or university for the award of any

other degree.

SAHIL SHARMA

.


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CHAPTER-I

INTRODUCTION


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Consumer Behavior

Consumer Behavior may be defined as the interplay of forces that takes place during a consumption process,

within a consumers self and his environment. This interaction takes place between three elements viz.

knowledge, affect and

Behavior; it continues through pre-purchase activity to the post purchase experience; it includes the stages of

evaluating, acquiring, using and disposing of goods and services.

The consumer includes both personal consumers and business/industrial/organizational consumers.

Consumer behavior explains the reasons and logic that underlie purchasing decisions and

Consumption patterns; it explains the processes through which buyers make decisions.The study includes within its purview, the interplay between cognition, affect and behavior that goes on within

a consumer during the consumption process: selecting, using and disposing of goods and services.

Cognition: This includes within its ambit the knowledge, information processing and thinking part; It

includes the mental processes involved in processing of information, thinking and interpretation of stimuli

(people, objects, things, places and events). In our case, stimuli would be product or service offering; it could be

a brand or even anything to do with the 4Ps.

Affect: This is the feelings part. It includes the favorable or unfavorable feelings and corresponding

emotions towards stimuli (e.g. towards a product or service offering or a brand). These vary in direction,

intensity and persistence.

Behavior: This is the visible part. In our case, this could be the purchase activity: to buy or not a buy (again

specific to a product or service offering, a brand or even related to any of the 4 Ps).

The interaction is reciprocal between each of the three towards each other and with the environment.

OTHER DEFINITIONS:

The behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products

and services that they expect will satisfy their needs.

- Schiffman and Kanuk ..the decision process and physical activity engaged in when evaluating, acquiring,

using or disposing of goods and services."

- Loudon and Bitta The study of consumers as they exchange something of value for a product or service that

satisfies their needs

- Wells and Prensky Those actions directly involved in obtaining, consuming and disposing of products and

services including the decision processes that precede and follow these actions.


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-Engel, Blackwell, Miniard the dynamic interaction of effect and cognition, behavior and the environment by

which human beings conduct the exchange aspects of their lives

American Marketing Association

During the process of evolution of the field of consumer behavior, researchers drew on various

disciplines, ranging from psycho-physiology to literature (Solomon 1995). A list of

professional associations that sponsor theJournal of Consumer Researchprovides a glimpse of

the number of disciplines working together in the field. The diverse disciplines employed by

researchers approach consumer issues from different perspectives. In addition to the many

disciplinary orientations, perspectives on consumer behavior are broadly differentiated by their

emphasis on internal influences (drawing on theories from psychology) and on external

influences (drawing on theories from sociology). Furthermore, methodological inclinationsand fundamental assumptions about the unit of analysis - the consumer, differ radically

between perspectives. Thus, varying perspectives present different views of aspects on

consumption (as emphasized from the consumers perspective), research orientations (as

emphasized from the researchers perspective), and focus (micro/individual or macro/social)

on consumer issues. Research that studies consumer behaviour as a sub discipline of marketing

with the aim to identify how consumer research can be put to use in marketing practice, regards

the field of consumer behaviour as an applied social science. Accordingly, the value of theknowledge generated should be evaluated in terms of its ability to improve the effectiveness of

marketing practice. According to this perspective, marketing management inevitably rests

upon some conception of how consumers behave and of the

Consequences their reactions to product, price, promotion, and distribution strategies are likely

to have for the attainment of corporate goals. In affluent, competitive economies, successful

marketing depends above all on matching the marketing mix, which results from the

integration of these strategies with the willingness of consumers to buy and in doing so more

effectively than ones rivals. The consumer-oriented management which results from such

matching is a response to the enormous discretion exercised by purchasers in these economies.

Moreover, the choices made by consumers have consequences not merely for competing

companies within a given, traditionally-defined industry; because of the high levels at which

discretionary income is running, companies are increasingly forced to compete across the

conventional boundaries of markets and industries.

Recently, though, some researchers have argued that consumer behaviour should not have a

strategic focus at all. It should instead focus on 2 The American Statistical Association, the

Association for Consumer Research, the Society for Consumer Psychology, the International


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Communication Association, the American Sociological Association, the Institute for

Operations Research and Management Sciences, the American Anthropological Association,

the American Marketing Association, the Society for Personality and Social Psychology, the

American Association for Public Opinion Research, the American Association of Family and

Consumer Sciences, and the American Economic Association (Source:

http://wiscinfo.doit.wisc.edu/jcr/policy_board.htm) . Moneesha Pachauri the understanding

of consumption for its own sake, rather than because the knowledge generated can be applied

by marketers (Holbrook 1985). While this view has emerged relatively recently, it has

encouraged many to expand the scope of their work beyond the fields traditional focus, on the

applied benefits of undertaking consumer studies. This more critical view of consumer

research has also led to the recognition that not all consumer behaviour and/or marketing

activity is necessarily beneficial to individuals or society. As a result, current consumer

research is likely to include attention to the dark side of consumer behaviour, such as

addiction, prostitution, homelessness, shoplifting, or environmental waste (OQuinn and Faber

1989; Barron 1989). This activity builds upon the earlier work of researchers who have studied

consumer issues related to public policy, ethics, and consumerism. There is a growing

movement in the field to develop knowledge about social marketing, which involves the

promotion of causes and ideas, such as responsible drinking, energy conservation, and

population control. This article presents a review of the literature, in the field of consumer

behaviour. The first section, describes the dominant, positivistic consumer perspectives. The

second section, presents a methodological and analytical overview of the traditional

perspectives, already discussed in section one. Further discussion on the paradigm shifts within

consumer research, is supported by a diagrammatic representation of the evolution of the field

of consumer behaviour. The remainder of this section is devoted to presenting the highlights of

the debate between the recent non-positivist perspectives and the traditional positivist-based

approaches. This discussion surrounds the issues of fundamental assumptions and techniques

of analysis of various alternative modes of enquiry. And finally, the last section presents an

overview of the developments within the field of consumer research . Tea is the most widely

consumed beverage in the country India and China are respectively the largest and second

largest producers and consumers of tea. These two countries are together account for half of

world's tea production.

However they export less than a quarter of their production, due to large domestic demand. As

per a survey on consumption of beverages, Tea accounts for 90% Filter coffee 4% Malted

health beverages 2% instant coffee 2% and carbonated soft drinks just above 1% of total
http://wiscinfo.doit.wisc.edu/jcr/policy_board.htmhttp://wiscinfo.doit.wisc.edu/jcr/policy_board.htm


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consumption squashes, Concentrates, Mineral water account for a minuscule part of the

consumption.

There are other export driven tea producing countries like Kenya, Sri Lanka and Indonesia who

produce only 25% of world tea but control 50% of global trade. They export almost 80% of

their production. In the last five decades, tea production in Kenya, Malawi, Sri Lanka and

Indonesia has increased at a rapid pace.

While the Government set up a target of 10000mn kg by year 2012, as per historical trend,

actual production is unlikely to exceed 900mn kg. Production is FY 99 is estimated at 870mn

kg. Out of the entire tea produced in the country, about 24% is exported. In the domestic

market, only 30% of the tea produced is sold in packaged/ branded from while 46% is sold in

loose form.

Tea plantations in India are concentrated in North East (Upper Assam and West Bengal) and

South (Kerala AND Tamil Nadu). North-East account for 75% of production while the

Southern region accounts for the balance. Although, yield pore hectare is lower in North east

tea quality is superior. For a long time, Indian tea producers were getting artificially high price

for tea as the erstwhile USSR used to buy under bilateral treaty. The rouble (USSR currency)

was artificially overvalued. The collapse of the USSR has been a major blow to the industry.

Paradoxically, India is not globally competitive in production of tea which is labor intensive.

Competing countries Kenya. Sri Lanka are also underdeveloped and have comparatively lower

labor costs and much liberal labor laws. More importantly, average age of tea bushes in India is

relatively high, therefore productivity is lower.

Income tax liability for tea companies is calculated in a unique way. 60% pre-tax profits are

deemed to be agricultural income, taxable by the State Government and 40% corpora earnings

taxable as corporate profits. The effective tax rate works out to be significantly higher.

DETERMINANTS OF CONSUMER BEHAVIOUR

Cultural Factors: Cultural factors exert the broadest and deepest influence on consumer

behavior. It encompasses the social values, attitude towards, social intercourse, language,

belief customs and traditions etc. it includes:

1) Culture:

The culture is the sum total of learned beliefs, values and customs which serve to guide

and direct the consumer behavior of all the members of the society.


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2) Sub Culture:

A sub culture is an identifiable and distinct group that has unique characteristics. A

sub culture is a psychological, religious, social or geographical source of group

identification. These sub culture are used by companies as the basis of segmentation.

3) Social Class:

Virtually all human societies exhibit social stratification it sometimes takes the form of

caste system where the members of different caste are reared for certain roles and can't

change their caste membership and they are known as social class. Social classes are

relatively homogenous and enduring divisions in a society, which are hierarchically

ordered and whose members share similar values, interests and behavior.

Social Factors:

Customer is a social being and its behavior is influenced by several social factors such as

reference groups, family and roles and statuses.

1) Reference Group:

A person's reference group consists of all the groups that have a direct or indirect

influence on the persons attitudes and behavior. Group having direct influence on a

person are called membership.

2) Family:

Family is most important consumer buying organizations in society and it has been

researched extensively family members. Constitute the most influential primary

reference group.

3) Roles and statuses:

A person participants many groups throughout life-family, clubs, organization. The

person's positioning each group can be defined in terms of roles and statuses. A role

consists of the activities that a person is expected to perform and each role carries the

status. Marketers are aware of the status symbol potential of product and brands.


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Personal Factors:

A buyers decisions are also influenced by personal characteristics these include:

1) Age and stage in the life Cycle:

People buy different things over their lifetime and they buy it according to their age and

stage in life cycle e.g. if they are old. They will not buy the baby cycle.

2) Occupation:

A person's occupation also influences his or her consumption patterns. A blue collar

worker will buy the bicycle whereas the company president will buy the car.

3) Economic Circumstances:

Product choice is greatly affected by one's economic circumstances People's economic

circumstances consists of their spend able income, savings and assets, debts and

attitude toward spending and saving.

4) Life Style:

A person's life style is the person's pattern of living in the world as expressed in person's

activities interests and opinions. People use to buy the products according to their life

style.

5) Personality and self concept:

Each person has a distinct personality that influences his or her buying behavior.

PSYCHOLOGICAL FACTOR:

A person's buying choices are influenced by four major psychological factors such as:

1) Motivation:

Motivation refers to the way a person is enthused it intensify his willingness to us his

potentiality for the achievement of his objectives. Motivation has close relationship

with the behavior of human beings; it explains how and why the human behavior is

caused.

2) Perception:

Perception is the process by which an individual selects, organizes and interprets

information inputs to create a meaningful picture of a world. A motivated person is

ready to act. How the motivated person actually acts is influenced by his or her

perception of the situation.


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3) Learning:

Learning involves changes in an individuals behavior arising from experience. It also

affects the consumers buying behavior.

Belief and Attitudes:

Through doing and learning people acquire beliefs and attitudes. These in turn influence their

buying behavior. A belief is a descriptive thought that a person holds about something.

BUYING BEHAVIOUR

A basic Requirement of Marketing:

1) What motivates the buyers?

2) What induces him to buy?

3) Why does he buy specific brand from a particular shop?

4) What are the stages he travels through before he makes the decision for buy?

Knowledge of the consumer and his buying motives and buying habits, is thus a fundamental

necessity for the marketing man.

"Phillip Kotler has given the buyer decision making model and also the factors which

determine his buying behavior"

Decision Making Process:

To be successful, marketers have to go beyond the various influences on buyers and develop

and understanding of how consumer actually make their buying decision. Steps in buying

decision making process are:

Problem Recognition:

Buying process starts when the buyer recognizes a problem or need. The need can be triggered

by internal or external stimuli.

Information Research

In aroused customer will be inclined to search more information. Customer information

sources fall into four groups.

1) Personal sources : Family, friends, neighbor


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2) Commercial sources : Advertising, sales, person dealers, packaging, displays.

3) Public Sources : Mass media, Consumer rating Organizations.

4) Experimental sources : Handling, Examining, using the Product.

Evaluation of Alternatives:

In this consumer process the competitive brand information and make the final judgments for

value.

Purchase Decision:

In the evaluation stage the consumer forms preferences among the brand in the choice set.

The consumer may also form an intention to buy the most preferred brand. A consumer's

decision to modify, postpone or avoid a purchase decision is heavily influenced by perceived

risk.

Post Purchase Behaviors:

After purchasing the product the consumer will experience some level of satisfaction or

dissatisfaction. The marketers job does not end when the product is bought but continues into

the post purchase satisfaction, post purchase actions and post purchase use and disposal.


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HISTORY OF TEA

Tea is nearly 5,000 years old and was discovered, as legend has it, in 2737 B.C. by a Chinese

Emperor when some tealeaves accidentally blew into a pot of boiling water. In the 1600s, tea

became popular throughout Europe and the American colonies. Since colonial days, tea has

played a role in American culture and customs. Today American schoolchildren learn about

the famous Boston Tea Party protesting the British tea tax one of the acts leading to the

Revolutionary War. During this century, two major American contributions to the tea

industry occurred. In 1904, iced tea was created at the World's Fair in St. Louis, and in 1908,

Thomas Sullivan of New York developed the concept of tea in a bag. Tea breaks down into

three basic types. Black, Green and Oolong. In the U.S. over 90 percent of the tea consumed

is black tea, which has been fully oxidized or fermented and yields a hearty-flavored, amber

brew. Some of the popular black teas include English breakfast (good breakfast choice since

its hearty flavor mixes well with milk). Darjeeling ( a blend of Himalayan teas with a flowery

bouquet suited for lunch) and Orange Pekoe ( a blend of Ceylon teas that is the most widely

used of the tea blends). Green tea skips the oxidizing step. it has a more delicate taste and is

light green/golden in color. Green team a staple in the Orient is gaining popularity in the U.S

due in, part to recent, scientific studies linking green tea drinking with reduced cancer risk.Oolong tea, popular in China, is partly oxidized and is a cross between black and green tea in

color and taste. While flavored teas evolve from these three basic teas, herbal teas contain no

true tealeaves. Herbal and "medicinal" teas are created from the flowers, berries, peels, seeds,

leaves, and roots of many different plants.


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STORY OF TEA

According to legend, the Shen Nong, an early emperor was skilled ruler, creative scientist, and

patron of the arts. His far sighted edicts required, among other things that all drinking water be

boiled as a hygienic precaution. One summer day while visiting a distant region of his realm,

he and the court stopped to rest. In accordance with his ruling, the servants began to boil water

for the court to drink. Dried leaves from the nearby bush fell into the boiling water, and a

brown liquid was infused into the water. As a scientist, the Emperor was interested in the new

liquid, drank some, and found it very refreshing. Therefore, according to legend, tea was

created (This myth maintains such a practical narrative, that many mythologists believe it may

relate closely to the actual events, now lost in ancient history).


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THE TEA INDUSTRY

India has the distinction of being the largest consumer and producer of tea in the world. The

country accounts for 30 per cent of global tea production. It is the only country which

produces both CTC orthodox teas in sizeable quantities. It has a share of 15 percent of the

world's tea exports. This year, production is expected to exceed 850 million kg as projected by

the Federation of All India Tea Traders Association (FAITTA). In 1997 there was a record

production of 810 million kg against 780 million kg in 1996. South India alone accounted for

over 180 million kg which exceeded the production of countries like Turkey and Indonesia.

Organic farming of tea is fast gaining ground in Darjeeling as well. Such organic farming

practices wholly depend on the use of natural fertilizers and insecticides. Apart from clinching

better export deals in the European market, such kind of farming has also helped in retention of

top soil and keeping it alive with micro-organisms, according to the planters who have resorted

to organic farming practices. The use of such practices is on the rise as export markets like

Germany are becoming more stringent on the quality aspect of premium teas. With exports of

organic tea on the rise, most growers are contemplating a conversion of the tea growing area for

organic cultivation. As many as 11 gardens in Darjeeling have become fully bio-organic.


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MAJOR PLAYERS

Tea is a natural oxidant and a source of natural flouride. India is one of the big players when it

comes to tea production. Tea is exported in large amounts from India. India coounts for 31% of

global production of tea and is thus one of the world leaders. India has been producing tea for

the last 150 years. India offers a wide range of tea such as the original Orthodox to CTC and

Green Tea. The tea leaves from Darjeeling and Assam have their own rich aroma in which can

take a lot of pride. The total turnover of the tea industry of India is around Rs. 10,000 crores.

Here is a list of the most popular Tea Brands of India.

Tata Tea

Tata Tea Limited is owned by the Tata Group. It is Indias best and most widely consumed Tea

Brands and is the worlds second largest manufacturer and distributor of tea. Tata Tea has

launched a social campaign named Jaago Re! to awaken the youth against corruption. Tata

Tea is the biggest player in the Tea Industry of India. Tata Tea owns five brands in India: Tata

Tea, Tetley, Kanan Devan, Chakra Gold, and Gemini. Tata Tea has subsidiaries in Australia,

Great Britain, United States, Czech Republic and India.


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Society Tea

Society Tea is owned by Hasmukhrai & Co. established 75 years ago. They are the key tea

manufacturers in India since 1933, and today, Society Tea is known for its consistent taste and

richness of quality. Society is synonymous to a fragrant aroma and is known nationally as well

as internationally for it. Society has an innovative advertising campaign and strong distribution

network.

Duncans Double Diamond Tea

A premium CTC leaf brand, Double Diamond represents strength that of character,

achievement and elegance. Just a spoonful of this tea brews a rejuvenating cup, where strong

flavor and aroma co-exist in fine balance. Packaged in the Duncans home colours and iconised

diamonds, this flagship brand is the chosen cup of the educated, young and forward-looking

couples of today, who believe in the right quality at the right price. A trendsetter in the jar

segment, Double Diamond maintains an attractive inventory of jars and is also available in

small packs.


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Brooke Bond Red Label Tea

Red Label is for the housewife who seeks to bring her family together over a cup of great Red

Label with its perfect strength taste and colour. With the tag line ChuskiyaanZindagiki, It is

the second largest tea brand in the country. Red Label is a 107 year old brand and has

tremendous equity and heritage in the Indian market. Red Label holds the Guinness Record for

the worlds largest tea party. It is now proven that regular consumption of 3 cups of Red Label

Natural Care every day can enhance ones immunity and help one fall ill less often.

Taj Mahal Tea

Brooke Bond Taj Mahal- Indias best tea since 1966. For over four decades, Taj Mahal has

been the gold standard of tea in India. It has been a pioneer of innovations in the Indian tea

market. Taj Mahal was the first to introduce tea bags and also the first to usher-in new formats

like instant tea and dessert tea. Taj Mahal is the most premium brand of tea in the Indian

market. Since 2006, Saif Ali Khan is the brand ambassador of Taj Mahal Tea. Taj Mahal is

special because it is made from the rarest and the best tea leaves.


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WaghBakri Tea Group

Waghbakri tea house is a premium tea house in inception since the year 1892. The tea baron,

Sir Narandas Desai started the company in Ahmadabad being experienced in the art of

blending and tea growing which he learned while owning a tea estate in South Africa. Sir

Narandas Desai was praised by Mahatma Gandhi for his commendable work. The generations

that followed gave boost to his pioneering efforts and developed the business to its present

status of being one of the largest tea houses in India.

Lipton Tea

Lipton is a very famous brand of Tea in India, currently owned by Hindustan Unilever. Lipton

teas are a blend selected from many different plantations around the world, from well-known

producing countries like India, Sri Lanka, Kenya, and China. Lipton Yellow Label is blended

from as many as 20 different teas. Available in over 110 countries, Lipton is particularly

popular in Europe, North America and the Middle East, parts of Asia and Australia. Liptons

main pillar brands are Lipton Yellow Label and Lipton Iced Tea. Other product lines exist as

well, like the Lipton pyramid range in Europe and North America, and Lipton Milk Tea in East

Asia.


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Tetley Tea

Tetley, a wholly owned subsidiary of Tata Global Beverages, is the worlds second largest

manufacturer and distributor of tea. Owned by Indias Tata Group, Tetleys manufacturing and

distribution business is spread across 40 countries and sells over 60 branded tea bags. It is the

largest tea company in the United Kingdom and Canada and the second largest in the United

States by volume. Tata Tea Group, now Tata Global Beverages, is the second largest

manufacturer of tea in the world after Unilever.

Marvel Tea

Marvel, a leading branded organization, is one of the Indias most recognized and respected

brands. Conceived in 1994 by Shri R.C.Jain, the Marvel group has gone on to grow very

successful business in sectors ranging from FMCG, Real Estate and Health Care. Marvel Tea

Estate (India) Limited is amongst Indias top 3 branded tea packaging companies, with over

3000 distributors network. It has a unique brand identity and tea taste which is the key strength

of the company. Marvel Tea is Rich in taste, flavor and aroma and is Made for premium class

segment.


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Pataka Tea

Pataka Tea, the flagship unit of the beverages ventures of Pataka Group, was set up in 2000 for

operations in the packet tea industry. The offerings entail a diverse portfolio of brands, namely

Premium, Mukta and Special, which are increasingly gaining popularity with the countrys tea

enthusiasts. Pataka Tea and the family of beverages to follow are in coherence to maintain thehighest standards of inclusive corporate ethics, and commitment to the communities and

environment.


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Tata Tea Ltd.

Tata Tea is the leading tea plantation company in India. It is the largest integrated tea

producer in the world. The company has 55 tea estates across the country covering 140790

acres of land. Of this about 63480 acres are under tea cultivation. The company produced

59mn kgs of tea in FY01. Sales declined by 10% yoy to Rs. 8.23bn in FY01. Sales and

profitability has been adversely affected due to depressed tea prices at auctions and lower sales

of valued added brands, which face competition from the local unorganized players. Tata Tea

leaped into the international league when it acquired world's second largest branded tea

company Tetley last year, The $271mn acquisition was financed through a GDS issue of 45mn,

loan from banks and 15mn were generated through internal resources. The company has

invested an additional 10mn in the company in FY01. India is the largest producer and

consumer of tea. Approximately 1.05mn acres of land in India is under Tea cultivation. More

than 3/4th of the tea produced is consumed domestically, while rest is exported. Indian tea

bushes are very old and therefore productivity is quite low.

Tata Global Beverages Limited (TGBL) is an emerging player in the globalbeverage market.

The company has made a strategic shift from being a local teacompany to a global beverage

company through various acquisitions andstrategic partnerships with global beverage giants

like PepsiCo and Starbucks. Asa result, the company has made an entry into the top 10 global

companies list inthe hot drinks category, posing a challenge to global players like Nestl,

Unileverand Kraft Foods. The companys product portfolio comprises leading globalbrands

like Tetley, Eight O Clock and local brands like Tata Tea.Bottomed-out margins; expect a

positive surprise: We model in TGBLs OPM toimprove by ~150bp overFY2011-13E from

8.6% in FY2011 to ~10.1% inFY2013E, driven by a shift in the companys focus from the

plantation business tobranded products and rationalization in the operating cost structure.

WhileTGBLs focus on volume growth remains intact, selective price increases andstable ad

spends will further aid in margin improvement. Also, with the Tea Boardof India estimating

higher tea production in 2011 as compared to 2010 (~5%higher production), we expect auction

prices of tea to soften, thereby providing arelief to the company from heightened input cost

pressure.Estimate ~40% plus adjusted EPS CAGR over FY2011-13E: We model a ~40%

EPS CAGR over FY2011-13, led by (1) 9% revenue growth and (2) a ~150bpmargin

improvement. We believe the company is set to outperform the industrysgrowth, with the help

of selective price increases and strong brands like Tata TeaPremium, Tata Tea Gold, Agni Dust

and KananDevan.Key valuation trigger: Despite its leadership position in the Indian packaged

teamarket, No. 2 position in the global tea market and generating ~90% of its totalrevenue from


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branded products, TGBL is trading at 12.2x FY2013E EPS (which isat a discount to its FMCG

peers, trading at 20x35x FY2013E EPS). Also, on EV/Sales basis, the stock is trading at 0.6x

FY2013E EV/Sales (historical averageof 1x EV/ Sales). Hence, we initiate coverage on the

stock with a Buyrecommendation and a target price of `97, based on 14x FY2013E EPS

of`6.9(0.8x FY2013 EV/Sales).

Brooke Bond Red Labelnation's cup of tea Brooke Bond Red Label Tea was launched in

the year 1903, which makes it one of the oldest brand of tea in the country. It also has the

distinction of being the largest brand of tea in India and has a truly national presence. For years,

Red Label has stood for good quality tea and it can be easily called as one of the India's

favourite tea brands. The brand was relaunched in the year 2000 with a new product

formulation, wherein long Assam orthodox tea leaves were added to the base CTC tea to

deliver enhanced taste. These are referred to as 'Assam Super Tasters' in the brand's

communication. The new campaign highlights the irresistible taste of the new Red Label Tea

through executions that revolve around a very catchy base line Don't Mind Ek Cup Aur

Ready for another cup.

Brooke Bond Red Label, one of the oldest tea brands in the country and the largest selling

one, celebrated Mother's Day today by greeting and commending a cross section of mothers in

the cities of Delhi, Mumbai and Bangalore. The mothers ranged from housewives to working

mothers and even celebrities. Over 500 mothers in each of the three cities were pleasantly

surprised when they were paid an unannounced visit by a Brooke Bond representative. Aimed

at recognising the tears and sweat that mothers go through to bring up their children and keep a

happy home running, they were presented with flowers, cards and a sample product of the

company.

The Red Labelbrand, has the mother as the key brand ambassadors in its current 'Jiyo Mere

Lal' advertising campaign. The advertising campaign reflects the macro family issues of

urban India with the mother in control. The underlying theme has been to depict Red Label as

a trusted support to the mother, its satisfying taste helps her diffuse tensions in the family and

promote happiness, harmony and togetherness. The Jiyo Mere Lal campaign has in fact tried

to depict issues which symbolize the changing nature of Indian society, like the father and son

generation gap, inter-caste marriages and, now, gender divide which will be aired from the

middle of May.


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Brooke Bond one of the world's largest recognized tea brands was established in the U.K. in

1869. Brooke Bond belongs to Hindustan Lever Limited, the Indian subsidiary of Unilever.

Red Label was the first brand launched under the Brooke Bond umbrella in India. This was

followed by brands like Taj Mahal Tea, Super Dust 3 roses and A1. The beverages

business of Hindustan Lever Limited had a turnover of Rs. 1786 crores in 1998, with the

Brooke Bond tea brands having a leading share of it.

Brooke Bond has consistently led the Indian tea market because of its unmatched insight into

tea and the needs of the Indian consumer. Today, this tea insight is being harnessed through

an aggressive innovation programmed led by a team from the innovation centre at the

Hindustan Lever Research Center (HLRC), based in Bangalore. This insight led Brooke Bond

to pioneer most innovations in the Indian tea market like CTC tea, soft packs, the CEKA

carton, Paisa packets, Tea bags and pet jars.

Pataka Tea

Pataka Tea is the main product of the beverages division of the well known Pataka Group.Pataka Tea was set up during 2000 so that the group could venture into the business of packed

tea. Following are its other major verticals:

Biri Textiles Food HealthcareAt present tea prices have gone up owing to dry weather during the initial part of 2012 followed

by the recent floods in Assam. The demand and supply scenario of the tea industry is such that

prices are expected to go further up. In 2011 the industry produced 988 million kilos of tea and

the total production for 2012 is expected to be the same.

During January to July, 2012 the tea production in India was 4 percent lesser than the similar

period in 2011. The demand has been increasing steadily in the interim and this has led to an

increase in prices of products such as black tea whose average price has increased by 10

percent compared to the previous period.

In July 2012 tea prices had increased by 18 percent when compared to July 2011. The average

auction prices of Indian black tea in northern and southern India are supposed to remain more


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than INR 100 per kilo till 2020. From 2001-2010 this figure was INR 73. This will happen as

throughout the demand for black tea will be more than the production levels.

The pace of re-plantation is on the slower side and this means that tea production will always be

lower than the demand. In the other leading tea producers of the world there has been no

increase in the area under tea cultivation. This is also another important factor in this regard.

India along with Kenya and Sri Lanka is one of the major producers of tea in the world. If any

local or climatic problem disturbs the tea production in these countries, then coupled with the

price issues, there could be some serious concerns for the global tea industry.

Experts have already portrayed a grave scenario regarding the balance between tea production

and consumption. There has been a serious decline in inventory as is evident from statistics.

India along with Kenya and Sri Lanka accounts for 60 to 62 percent of the global supply of

black tea. However, India is the biggest consumer of black tea and exports 17 to 20 percent of

the total production as opposed to Kenya and Sri Lanka who export 90 to 95 percent of the

aggregate production because of the smaller markets.

It is possible that the tea export segment of India might face problems if inventory levels

continue to fall, production is slow, and domestic usage goes up. Old bushes comprising 25

thousand hectares were replanted from 2006 to 2011 and these areas take up the maximum

portion of the area that has been added for tea cultivation in the recent times.

A part of the tea, supposed to be used for exports, is being redirected for local consumers in

India. In 2011, 192 million kilos were exported but in 2016 the figure is supposed to come

down to 127 million kg.

It is expected that till 2017 tea production in India will increase at a compounded annual

growth rate of 1.6 percent while for consumption in the same period the rate has been estimated

at 1.8 percent.

However, this will not have any effect on the success of the tea companies as tea prices in India

are equal with any other place in the world because of the overall quality of products available.


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TATA TEA:

Super brands Market:

Tea is the most versatile beverage ever discovered by man a kind of one-drink-for-all

reasons-all-seasons. Tea warms when it is cold; cools when it is hot; cheers when depressed;

calms when excited; awakens when sleepyand available at every street corner. In short, tea is

therapy-in-a-cup. It is savored equally at roadside stalls as incorporate boardrooms, in a silver

tea service as in a clay cup. Tea drinking is hardwired into the Indian DNA. Over 400 billion

cups of this brilliant beverage are consumed each year in India pushing annual per capita

consumption to over 700 grams. Tea only trails water as the beverage-of-choice with the

highest share-of throat in the country. India is the largest producer of tea in the world with the

branded tea market pegged at some 450 million kilos valued at over Rs. 4000crore (US$ 833.30

million) (Source: Tea Board).After a period of stagnation India's tea production grew 2% in the

2011/12 financial year to touch 1000 million kilos. Correspondingly, its exports also grew

from200 million kilos to 203 million kilos in the same year (Source: Tea Board).Achievements

As recently as the early 1980s, tea was a commodity tightly controlled by a handful of brands.

Remarkably, the companies that owned these brands rarely, if ever, grew the teas they

marketed. The advent of the Tatas in the branded tea business in 1985 ushered in sweeping

changes in an industry hidebound by decades of tradition. As a standalone brand, Tata Tea

played a crucial role in transforming the Indian tea market from a staid, boring mlange of

players to a young and vibrant business. The first thing Tata Tea did was to change the way tea

was purchased from planters and sold to consumers. Owning their own estates gave the

company complete control over their operations. The second thing they did was to inject

effervescence into their packaging. In a single stroke, they dispensed with the sedate cardboard

box and introduced an attractivepoly pack. Innovations such as these earned Tata Tea several

consumer and marketing awardsand a place in the homes and hearts of people. The AMGF

Mere Brand award and the Readers Digest Trusted Brand Platinum award in2006 and the

Most Preferred Brand of Tea in India in the CNBC sponsored Consumer Awards in 2007, were

conferred on the company. Tata Tea was also rated the Second Most Preferred Beverage Brand

in India in the Brand Equity Survey of 2008.In The Economic Times Most Trusted Brands

Survey in the same year, Tata Tea was ranked20ththe only tea brand which figured in the top

50.The latest accolade is its 25th rank in Indias Top 50 Most Valuable Brands released by

Brand Finance. While winning at competitive forums was good for the mind, winning in the

market place was a stunning achievement for the soul. In a June 2007 study, Tata Tea

outperformed competitors, achieving a volume share of19.20% (Source: ACNielsen). For a


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company less than 25 years old besting rivals 200 years in the business was truly

commendable. History The Tata Tea ancestry goes back to the 1880swhen James Finlay Plc., a

Glasgow-based company, owned and run by the Muir family, developed tea plantations in

Assam and Theodoras. For the next three quarters of a century Finlay controlled large swathes

of properties and grew some of the finest qualities of tea in the world.. Tata Tea Limitedthen

a full-fledged plantation enterprisewas born. Tea is often a victim of the vicissitudes of the

commodity market. To insulate itself and leverage its home tea plantation advantage the

company took a decision to shift focus from commodity sales to branded tea. Tata Tea, the

brand, was introduced in 1987 changing forever the course of the industry. At the turn of the

century, Tata Tea acquired the UKbased Tetleythe worlds second largest tea brand and a

company three times its own size. Overnight, Tata Tea was catapulted onto the world stage and

joined a handful of powerful international beverage brands. By integrating its strengths with

those of Tetley, Tata Tea now has an influential presence in matured markets of the US, the

UK, Canada, Australia and Europe. Product In 24 years since launch, Tata Tea has powered

itself into peoples lives across metros and hamlets, in equal measure. Every fifth cup drunk

in India is a Tata blend. The brand straddles the Indian firmament like a colossus, placing in

each socio-economic segment, one brand that controls the market. Its flagship brand, Tata Tea

Premium, proudly labeled as the worlds number one tea, is the countrys largest packet tea

brand. It singlehandedly accounts for an all India value share of 10.20%and dominates Indias

North, East and West geographies (Source: Nielsen).As the markets grew people in the higher

SEC sought an upgraded version of Tata Tea Premium. The company launched Tata Tea Gold

in 2003filling this emerging need-gap. Today, Tata Tea Gold is not just the companys image

driver it is also the only successful launch in the packaged tea market in more than a decade.

The price conscious economy segment is the battleground for the fiercest wars in the tea market

.Littered with scores of regional and local brands,Tata has a telling presence here. Its Tata Tea

Agni has proved to be a star performer, eroding the market shares of established brands and

taking on strong regional players on their own turf. The brands winning formula is an

innovative blend consisting of 10% high-quality extra strong leaf tea coupled with stylized

superior quality packaging, unmatched in this segment. The health and wellness, value-add

segment is the latest market to emerge in India. Here, Tata Tea Life, introduced in 2007 and the

four variant in the Tata Tea family, offers a regular every day tea enhanced with the nature

goodness of Brahmi, Tulsi, Ginger, Cardamom and Mint. Recent Developments March 2009

was a defining moment for Tata Tea. For the first time, this young brand jumped to the top of

the table cornering a combined value market share of 15.70% (Source: Nielsen).There cent


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consolidation of Tata Tea Premium, Tata Tea Gold, Tata Tea Agni and Tata Tea Life, under the

Tata Tea umbrella brand has contributed to the success story by enabling the company to

communicate a single, unified message to consumers. Tata Tea has also recently signed a joint

venture agreement with the Zhejiang Tea Import& Export (ZTIE) Company in China for

manufacturing and marketing green tea polyphones, other green tea extracts, cold and hot

water soluble instant tea, liquid tea concentrates and several value-added tea beverage

products. Promotion through the years Tata Tea has communicated its promotional messages

using high impact payoff lines and jingles. Over the years, its advertising has made

evolutionary shifts in its brand positioning, moving from a functional promise in the

AsliTaazgi (real freshness)campaign to AsliTaazgi , AsliMaaza (real freshness, real pleasure)

which laddered Taazgito a higher benefit. But irrespective of its evolving strategy, the one

element that has never changed in nearly 25 years of advertising is its young, fresh, modern and

energetic image. This has been constantly renewed by young and effervescent brand

ambassadors of their times, such as Amjad Khan in the 1980s and JuhiChawla and Sonali

Benders in later years. One of the more memorable commercials was for Tata Tea Gold with

the tagline NaaKahoge to Pachtaoge (say noand regret). It featured four young friends one of

whom refused the offer of teaonly to find himself unhappily left out of the pleasure the others

derived. The advertising campaign for Tata Tea Premium moved the brand to another platform:

it sold a dream through its tagline Taste KamyabiKa (the taste of success) epitomized by its

high-achieving brand icons, Sonia Mize and SunidhiChauhan.Thethought is simple: effort

makes everything possible. However, the brands most recent campaign and possibly the

highpoint in its evolution, so farwas the high describelJaago Re (awaken) campaign.This

outstanding creative effort sought to elevate the role of tea from being just a wake-up drink to a

medium of awakeningHer Sabah Sir Utah Mat, Jaago Re(each morning dont just awaken

your body, awaken your soul).The campaign received both critical acclaim as well as positive

consumer feedback. Launched just before the general elections of 2009 the campaign achieved

the dual purpose of imparting a socially relevant message as well as the fine association with

the product. This call for awakening has also been extended to the field of soccer with Tata

Teabag Re Soccer Stars (awaken, you soccer players).This initiative is a unique programmed

signed to identify grassroots talent in soccer and select them for further training, under FC

Arsenal coaches in India and London. Brand Values Tata Tea is a remarkable case study of

brand development in a market fragmented by200-year old brands on the one hand, and a

plethora of loose tea blends and small, local tea packers on the other. Its success is largely

attributed to a daring in challenging norms and bringing energy to an industry, which even if it


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was selling a beverage to awaken the body, simply appeared tired and fatigued. No one has put

it better than George Orwell who said, Anyone who has used that comforting phrase a nice

cup of tea invariably means tea from India.He could well have been t alking about Tata

Tea.www.tatatea.com SUPERBRANDS 177Every month people in India drink over 2100

million cups of Tata Tea One in six cups of tea drunk in India is a TatablendTata Tea has the

largest tea plantation base in India, employing over 50,000 people Tata Tea was one of the first

Indian brands tousle the Taazgi (freshness) platform in the foodscategory50 million

households buy Tata Tea each year Things you didnt know about Tata Tea.

Red Label

Mumbai: Red Label, the largest tea brand from the house of Brooke Bond, for the first time in

its history of 140 years, has roped in Indian televisions smart bahu Hina Khana a.k.a. Akshara

from Yeh Rishta Kya Kehlata hai for its latest ad campaign. The latest Brooke Bond ad

campaign starring four smart bahus from across the country, aims at repositioning Red Label

Tea as the trusted choice of a contemporary Indian housewife. The ad goes on air from October

1st, 2011.

The ad campaign focuses on re-positioning Red Label Tea as not just a healthy but also a

reasonably-priced tea available in packs that fit every housewifes budget. As a part of the

campaign, the stars will be seen urging viewers not to trust everything they hear and see. The

television commercial has the actress re-assuring the audience that contrary to general

misconception; Red Label Tea offers not just superior-quality taste and health benefits but also

suits every familys pocket.

Commenting on the new Brooke Bond Red Label campaign, Mr. Arun Srinivas, Vice

President, Beverages, Hindustan Unilever Ltd, said, Our latest ad campaign plans to establish

Red Label as a tea that is not just consistent and high on quality and health benefits, but also fits

every housewifes budget. The actresses, perceived as the smart bahus of the 21st century on

the television shows will come to the forefront in their off-screen avatars and campaign for the

countrys oldest tea brand, Red Label. The ad campaign will also feature their on -screen

mother-in-laws which makes it even more interesting and engaging for the viewers.

Ms. Hina Khan, on being inducted to the Red Label family, commented Drinking Red Label

has been a part of my daily regime since my teenage years. When Red Label offered me the

chance to endorse the brand, I jumped at the opportunity. It was a wonderful experience to

see my on-screen character Akshara, the smart bahu of Indian television blending in perfectly

with the campaign.


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So Bahuranis! Pick your pack of Red Label tea-the best quality tea that is not only healthy

but also affordable

TEA VARIETIESTea can be distinguished as green and black depending on the apparent colour. Black tea

manufactured by deliberate fermentation of leaf juice, has stronger taste and liquor. Green tea

manufactured by preventing the fermentation, is light and perceived to have medicinal values.

Leaf tea can be processed as orthodox or CTC (crush, tear and curl). CTC production entails

an accelerated fermentation. Quality of tea is measured on parameters of liquor, aroma/

flavor, leaf appearance etc.

Tea is also classified on the basis of area of cultivation. The most common varieties are

Darjeeling Tea, Assam Team, Dooars Tea, Ceylon Tea, Chinese Tea and Kenyan Tea.

Consumer Habits and Practices:

Consumers differentiate tea quality on attributes of taste, pungency, strength, freshness,

color, packaging etc.

Convenient drinks like instant tea (i.e. soluble tea powder), tea bags (bags are dipped inhot water) and ready to drink flavored tea (vanilla, strawberry flavored etc) are popular

in developed countries and have negligible market in India.

Popularity of tea is significantly higher in the North. This could be due to relatively

lower cost and habits formed over the years.

Preferred variety of tea varies from one region to another. Dust which brew into

stronger tea is preferred in the South. The western states of Gujarat and Maharashtra

offer market for good quality loose and packet tea. While in the northern state of

Rajasthan, CTC fannings are liked, other states prefer CTC broken. Central India is

again a dust market.

Awareness and penetration:

Tea is by far the most popular beverage in India. Its penetration in urban areas is 89.3% and

72.6% in rural areas. At all India level, tea penetration averages 77.2%


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Interestingly, tea penetration is higher in medium sized towns (0.51mn population) at 93.3%

compared to 90.5% in metros (population above 1mn). This could be due to the fact that

coffee penetration is significantly higher at 24.2% in metros (above 1mn population) compared

to 16.7% in medium sized towns with population between 0.5 and 1mn. Awareness about tea is

close to universe in urban areas and 80% in rural areas.

Packet tea:

Between 1970 and 1985, tea consumption in the country grew at the rate of 4.5% p.a. The entire

growth was however was in loose tea segment and the relative share of branded tea declined

from 42% in 1970 to 25% in 1985. This was due to excise duty on packet tea and higher

inflation, which compelled consumers to switch to loose tea for economy.

The Union Budget 1998-99 had levied an 8% excise on packet tea above 100gm, Demand for

tea is highly price sensitive and consumers tend to shift to relatively cheaper varieties of loose

tea, when price of branded/ packaged tea rises. The levy of excise had a negative impact and

branded tea segment which was steadily rising witnessed a decline in consumption in 1998.

With heavy lobbying by the tea industry, the Government has again withdrawn the excise levy

in the recent Union Budget 1999-2000.


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MANUFACTURING PROCESS

Black tea can be processed as CTC or orthodox. About 4-5kg of green tea leaves are required

to produce 1kg of made tea (made tea is what we buy off- the-shelf). Freshly plucked tea leaves

are withered (dried) with the help of ambient or warm air for 24 hours. For orthodox tea,

leaves are twisted in rollers, juiced and enzymes are released to act on the polyphones. CTC

processing involves passing the leaves through a pair of cylindrical rollers fitted with rotary

segments (tooth like sharp edges) rotating at different speed. After rolling, leaves are fermented

through the process of oxidation. Leaves are left in fermenting drums at high humidity for

45-60 minutes. In this process, chemical changes takes place and color, strength, liquor and

aroma are developed at this stage. Fermentation process has to be arrested at right time. Themass is fired a exposed to hot air (90-120) which destroys enzymes and stops fermentation

process. Due to this firing, leaves turns black. Bulk tea is sorted by size with the help of

sieves and density through winnowing. Fiber, dust, broken leaves are separated and good

quality tea is packed in tea chest or consumer packs.


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CHAPTER-II

REVIEW OF LITERATURE


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Literature Review

Consumer Behavior Christopher (1989) studied the shopping habits of consumers to form an

idea of whether or not the store concepts, product ranges and strategies of the companies are

appropriate towards consumer requirements. He believed that consumer behaviors are

unpredictable and changing continuously changing; while trying to under try to understand

how individual or group make their decision to spend their available resources on

consumption-related items. These are factors that influence the consumer before, during, and

after a purchase (Schiff man and Kanuk, 1997), for example, feedback, from other customers,

packing, advertising, product appearance, and price (Peter & Olsonetc, 2005).

The essence of this approach is critical for organisational success, so that they can have a better

understanding of their customer behaviours (Solomon et al., 2006). The physical action or

behaviour of consumer and their buying decision every day can be measured directly by

marketers (Papanastassiu and Rouhani, 2006). For that reason many organisations these days

are spending lot of their resources to research how consumer makes their buying decision, what

they buy, how much they buy, when they buy, and where they buy (Kotler, Amstrong,

2001). To get a well coherent result, organisations normally looked at these behaviour base

their analysis on difference conceptions; whether customers buying behaviour were measured

from different perspectives, such as product quality and better service, lower price structured

etc (Papanastassiu and Rouhani, 2006)

Different theories and researchers have claimed that when organisation fully meet all aspects of

its customer needs, the result enhances their profitability (Chaudhuri, 2006), and also enable

them to develop a better tackling strategies for consumer (Asseal, 1998). Possibly, the most

challenging concept in marketing deals with the understanding why buyers do what they do

and what method or philosophy are they using to evaluate the product after the transactions andwhat might be the effect on future transaction (Schiffman, 2004). The reason why marketer

chooses to learning about consumers buying behaviour is, from a business perspective; to be

able to be more effectively reach consumers and increase the chances for success (Sargeant&

West, 2001). Therefore the field of consumer behaviour has take a tremendous turn in the

commercial world and became the fundamental concepts of achieving company goal

(Schiffman and Kanuk, 2007).

More recently, different researchers and author have given their definition and meaning of

consumer behaviour. For Michael R. Solomon (2001) consumer behaviours typically analyse


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the processes of group selected or individual purchases/dispose of product, service, concept or

experiences to satisfy their need and desires. Additionally, Kotler (1996) suggested that

consumer behaviours have a huge impact in a firm marketing decision making process every

year. There is a risk that what a consumer does will inflict on his or her behaviour and generate

consequences. (Snoj, PisnikKoda&Mumel, 2004). The user and the purchaser can be different

person, in some cases; another person may be an influencer providing recommendations for or

against certain products without actually buying or using them (Solomon 1999; Solomon et al.

1999).

In this case, most of the large consumer electronics retailers tend to gathered more information

about customers motivating factors and what influences their buying behaviours Solomon &

Stuart (2000).

To get in-depth understanding consumer behaviour concepts will gives us an idea on how its

plays significance role in our life and in the whole trend of business profit to various firms

which will allow the researcher to get the analysis and determine product positioning, develop

the message and targeting strategy in order to reach to the market (Holskins J, 2002). Consumer

behaviour involves lot aspects, such as;

Complex Buying Behaviour

This kind of buying behaviours significantly involved the consumers when making a purchase

decision. This kind of buying behaviours demand consumer to highly involve within the

process. In case of high involvement, consumers distinguish salient differences among the

competing brands (Kotler, Wong, Saunders, Armstrong, 2005). This phenomenon is

particularly essential for Dixons consumers to highly involve, and engage in extensive research

about the product category and make a good purchase decision about the firm own

manufacturing products, in case they invent a new technology electronics products or

audio-video equipment that is too expensive.

Dissonance reducing buying behaviour

This type of buying behaviour also has high consumer involvement. In terms of expensive and

infrequent purchase, consumer also undergoes reducing dissonancy behaviour. It is extremely

difficult for consumers to differential among brands in this type of buying behaviours (Kotler,

Wong, Saunders, Armstrong, 2005). Differentiating Dixons electronics products/equipments


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in the same store from PCWorld or Currys is a daunting task and consumer buying these

products may encounter dissonance reducing buying behaviour, as electronics are usually

expensive and self-expressive. Consumer may easily assume that the available electronics

brands in the store/market within a certain price range to be of the same quality. Then if the

product does not meet customers expectations, it will result to consumer to experience post

purchase dissonance (after sales discomfort) (Kotler, Wong, Saunders, Armstrong, 2005).

Habitual Buying Behaviour

Contrariwise, in this type of buying behaviour consumers have lesser levels of

involvements. It implies that consumer do not have to bother to retrieved information about

the available products and brands in the market. So therefore, there are no potential differences

between the different brands. Whether this factor will have damaging effects on Dixons will be

analyse at the findings and analysis chapter below. Because of the less level of involvement, in

habitual buying behaviour consumers dont often go to the stores to purchase product, (Kotler,

Wong, Saunders, Armstrong, 2005).

However, some believed that if the consumer persistently purchasing the same product

repeatedly, it becomes habit and their mindsets and perceptions changes overtime about the

brand and the provider (Cohen and Manion, 1987). This conception will portray the consumer

to have unconscientiously developed a brand loyalty to that particular brand due to the

consumer regular buying habits (Cohen and Manion, 1987).

Variety Seeking Buying Behaviour

This type of consumer level of involvement is low. However consumer may became critical in

terms of brand differences. Additionally, consumer may easily switch from PC World to

Currys i.e. from one brand to another. The consumers can now have beliefs about the various

brands and choose a brand without much evaluation. But they evaluate that product at the time

of purchase. In this high technology world, consumer switches their brands not because of

dissatisfaction but because of that enormous trend of technological equipment (Aaker, 1991).


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CHAPTER-III

RESEARCH METHODOLOGY


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RESEARCH METHODOLOGY

The research study has been carried out by the way of consumers sampling and the target were

retailer and customers in the Shahzadpur. The objectives of research study were met byunderstudying a survey of customer and retailers.

The research is descriptive in nature; conducted to find out the market potential of tea in

Shahzadpur.The tools used for survey were questionnaire to customers and retailer in

Shahzadpur and getting the questionnaire filled on the spot.

All the questions in the questionnaire are closed ended.


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SCOPE OF THE STUDY:

The study is basically about the analysis of the ongoing trends in customer behavior regarding

Tea. He size of sample for customers in 100 of Shahzadpur (Ambala). The scope of the study

has been kept restricted due to individual researcher.Sample Size : 100

Result have been enumerated in the findings

Data source : Primary data and Secondary data

Research Approach : Survey

Research Instrument : Questionnaire

Sampling Out : Shahzadpur


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OBJECTIVE OF THE STUDY

To know which brand is more preferred by the customers to purchase

To study the effect of various promotional schemes given by the companies

To study whether the customers are brand loyal or not.


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LIMITATIONS OF THE STUDY

Following have been the limitation of the percentage study:

The sample size of only 100 people was taken from the large population for the purposeof study.

The present study was related to rural people only.

The study was related to the customer satisfaction in respect of tea and no attempt has

been made to study the consumer behavior in respect to other durable goods.

Due to constraints of time only a few aspects of buying behavior of tea users. For the

same time due to paucity of time the statistical methods used are limited to the

collections of percentages only.

Influence of certain interviewing variables like culture, sub culture on customer

behavior and satisfaction could not be studied in detail.


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Chapter-IV

DATA ANALYSIS

ANDINTEREPRETATION


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Q.1 Which schemes do you prefer most?(Customer)

Schemes No of RespondentsRefill Jar 05

Free Gift 40

Cash Discount 26

Coupon 10

Lucky Draw 07

Extra Quantity 12

Interpretation: According to the data collected by me through the survey of 100 respondentsmaximum respondents prefer free gifts that is 40% 26% of respondents prefer cash discounts,

10% of them prefer coupons 7% of them prefers lucky draw schemes, 12% of respondents

prefer extra quantity of tea and rest 5% respondents prefer refill jar.

5%

40%

26%

10%

7%12%

Refill Jars

Free Gift

Cash Discount

Coupon

Lucky Draw

Extra quantity


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Q.2 You prefer any particular brand, if yes, which brand are you using?(Customer)

Brand No. of Respondents

Taj Mahal 30

Super Cup 15

Tazza 17Double Diamond 8

Tata Tea 30

Interpretation: According to the data collected by me through the survey of 100 respondents

maximum respondents prefer a particular brand like 30% of respondents prefer Taj Mahal,

30% of them prefer Tata Tea, 17% of them refersTazza, 15% of them prefer Super Cup and 8%

of them prefer Double Diamond.

30%

15%17%

8%

30%

Taj Mahal

Super Cup

Tazza

Double Diamond

Tata Tea


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Q.3 In your choice of tea what will you prefer first, Give rating

choice No. of Respondents

Brand name 30Price 17

Packing & advertising 15

Quality 30

Scheme 8


maximum respondents prefer a particular brand like 30% of respondents prefer Brand name,

30% of them prefer Quality, 17% of them refers Price, 15% of them prefer Advertising and 8%

of them prefer Scheme.

30%

15%17%

8%

30%

brand name

packing&advertising

price

scheme

quality


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Q.4 Do you shift from one brand to another on the basis of scheme and gifts and after

what time?


After 2 months 38

After 4 months 24After 6 months 24

After 1 year 14


maximum respondents shift from one to another brand on the basis of scheme, 35% of them

changes their brand after 2 months, 25% changes it after 4 months, 25% of them changes after

6 months and 15% of them changes after 1 year.

38%

24%

24%

14% After 2 months

After 4 months

After 6 months

After 1 year


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50

Q.5 For how many years you have been using this particular brand?

Time period No. of Respondents

6 months to 1 year 501-3 years 25

3-5 years 18

5 years and above 7

Interpretation: The data in above table shows out of 100 respondents 50 are using a particular

brand from 6 months to 1 year, 25 of them using a particular brand from 1-3 years, 18 are using

it 3-5 years and rest of 7 are using a particular brand from 5 years and above.

50%

25%

18%7% 6 months to 1 year

1-3 year

3-5 years

5 years & above


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Q.6 Which package do you prefer to use?

Pack No. of Respondents50 gm 1

100gm 3

250gm 56

500gm 25

1 Kg. 13

2kg. & above 2


shows 56% of them prefer 50gm. pack, 25% of them refers 500gm pack, 13% refers 1kg. pack,

3% refers 100gm and rest 1% for 2kg and above.

1% 3%

56%25%

13%

2%

50gm

100gm

250gm

500gm

1kg.

2kg & above


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52

Q.7 How many times do you take tea in a day?

Usage of tea in a day No. of Respondents

One time 9Two time 35

Three time 40

If more, specify 16


shows 40 of them take tea thrice a day, 35% twice a day, 16 of them more than thrice and rest

9% take for it single time a day.

9%

35%

40%

16% One time

Two time

Three time

If more, specify


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Q.8 Do you prefer sale of any particular brand? If yes, why?

Reason No. of Respondents

Margin 26Target 17

Intensive 30

Schemes 27


shows 29% of them prefer for sale due to incentives, 27% of them due to margin, 27% of them

due to schemes and remaining 17% due to target.

26%

17%

30%

27% Margin

Target

Intensive

Schemes


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Q.9 Which brand is leader in the Market?


Taj Mahal 34

Super Cup 23

Tazza 23Double Diamond 7

Tata Tea 13


shows Taj Mahal is the leader of marked with shares 34%, then Super Cup with shares 23%,

then Tazza with shares 23% then Tata Tea with shares 13% and then Double Diamond with 7%

share.

34%

23%23%

7% 13%Taj Mahal

Super Cup

Tazza

Double Diamond

Tata Tea


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Q.10 Does customer show any particular preference regarding brands (Retailer)

Response No. of Respondents

Yes 60

No 40


shows most of the consumers are preferred a particular brand 60% of dealers says this and rest40% say on consumers does not prefer a particular brand.

60%

40%

Yes

No


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56

Q.11 If the price of branded tea will be decreased by the company, do you think the sale

of branded tea will increase


Yes 60No 40

Interpretation: According to the data collected by me through the survey of respondents

60% respondents say YES and 40% respondents say NO.

60%

40%

Yes

No


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Q.12. What will be the effect of display tea on sale?


Increased sale 50Decreased sale 30

No effect 20

Interpretation:

After survey, it is found that the 50% respondents are say sale is increased & 30% respondents

are say sale is decreased & 20% respondents are say there is no effect on sale.

50%

30%

20%

increased sale

decreased sale

no effect


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Q.13 If the schemes are reduced what will be the effect on sale? (Retailer)

Effect No. of Respondents

Increased 37Decreased 63

Interpretation: According to the data in above table shows that the sales will be decreased

after reducing the schemes 63% of respondents say this and 37% says sales will be increased.

63%

37%

decreased

increased


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59

CHAPTER V

FINDINGS & SUGGESSTIONS


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FINDINGS

Retailers and Customers:

Taj Mahal is a market leader due to the company provides cash incentives to the dealers

and retailers.

Tata Tea is followed by Taj Mahal due to good margins are provided by the company.

Taaza is also a brand of HLL Company, which come at a third number due to its

advertising.

Super Cup Tea stands at fourth number due to less margins are given to dealers and

retailers.

Double Diamond comes at last number in the above five brands due to its less schemes

provided to retailers. For display of tea company provides cash incentives to retailers.

Mainly retailers suggest a brand on the basis of Margin provided by the company.

Due to display of tea the sale of that particular brand increases.

If the company reduces schemes, gifts the sale of that tea will decrease.

Currently with TajMahal Tea and Taaza the coupon scheme is launched.

Godfrey Phillips India Ltd. gives spoon and fork with the Super Cup.

CUSTOMERS:

Customer gives first preference to schemes in purchase of tea as compare to quality,

brand name.

In schemes the customers want more free gifts, cash discounts as compare to refill jar,

lucky draw.

Customers prefer particular brand, but they prefer Taj Mahal Tea that is according to

the survey of 100 customers 38% of respondents prefer Taj Mahal.

Customer shift regularly from one brand to another, 40% of customers change their

brands after two months.

Very few customers prefer from particular brand, which using that brand from six

months to one year.

Sale of 250gm. packet size is more 55% of respondents prefer 250gm. pack.

Very few customers go for purchase of local brand (mainly the workers).

More people buy poly bags of tea as compare to tea boxes.


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SUGGESTIONS

Company should give more margins to dealers and retailers

.

Company should give more and attractive advertising of tea on TV, newspaper etc.

Packaging will have to improved in color, picturisation, font style etc. from time to time

Companies have to maintain their distribution system. So, that regular supplies of tea

available to customers at right time and at right price.

Company ought to give some schemes regularly to its customers and in new attractiveways, which persuade the customers to buy.

Companies should see the strategy followed by the competitors so that they adopt

according to them

.

Company should provide more free gifts to customers to increase the sale of tea.

It is find that there are not much promotional schemes for the retailers though there are

many schemes for consumers.

The retailers with low turnover are more interested in monetary and immediate

benefits.


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CHAPTER- VI


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CONCLUSION

I come to know that the tea market is demand driven and facing cut throat competition. The

pull of the consumers is so strong that the dealers are forced to keep the brands of consumer's

choice. Moreover, the companies are enchasing upon these. There are as such no lucrative

schemes for dealers. The companies just look after the logistic involved in supplying the

product at dealers place and its advertising. Still there are some trade promotions schemes.

The stocks are supplied at the dealers place on company's cost on condition of buy back in case

of low sale. The credit terms of the company ranges from 15-20 days from the day of supply.

The dealers margin ranges from 5% - 8%. The bigger and established players such as Taaza,

Brook bond, Taj Mahal, Red Label, TetleyTea, MarvelTea, Lipton Tea, Waugh Bakri etc. gives

5% margin. Whereas smaller and new players such asPataka Tea, Jay Shree Tea, etc.

generally gives margins upto 8%. Presently, Taaza tea has come up with a display scheme for

the dealers. When asked for the most effective consumer promotion scheme most of them

pointed out on the spot schemes such as gift inside, cash discount, and extra quantity as the

best, Out of these most of them cited cash discount as the best.


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QUESTIONNAIRE

FOR DEALERS AND RETAILERS

Name of Dealer : ____________________________

Name of the firm : ____________________________

Name of Dealer : ____________________________

Name of Firm : ____________________________

Q.1 Please specify the respective scheme conference on such products?

a) TajMahal b) Tata Tea

c) Tazza d) Double Diamond

e) Super Cup

Q.2 Which brand is leader in Market?



e) Super Cup

Q.3 Do you + sale of any particular brand? If yes, why?

a) Margin b) Target

c) Incentive d) Schemes

Q.4 Does customer shows any particular preference regarding brands?

a) Yes b) No

Q.5 If yes, which brand sells the most?



e) Super Cup


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Q.6 If Yes, How much?

a) 5% b) 15%

c) 10% d) 20%

Q.7 Does company indulge in display and merchandising? If yes, on what terms specify?

_____________________________________________________

Q.8 What will be the effect of display of tea on sales?

a) Increased Sale b) Decreased Sale

c) No effect


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IN CONSUMER SEGMENT

Name : ____________________________

Location : ____________________________

Q.1 In your choice of tea, what will you prefer first, Give rating?

a) Brand Name b) Price

c) Packaging & Advertising d) Quality

e) Scheme

Q.2 Do you prefer particular brand, if yes, which brand are you using?

a) TajMahal b) Super cup

c) Tazza Tea d) Double Diamond

e) Tata Tea

Q.3 Which scheme do you prefer most?

a) Refill Jar b) Free Gift

c) Cash Discount d) Coupon

e) Lucky Draw e) Extra Quantity

Q.4 For how many years you have been using this particular brand?

a) 6 months to 1 year b) 1-3 years

c) 3-5 years d) 5 years & above

Q.5 Do you shift from one brand to another on the basis of schemes and gift and after what

time?

a) After two months b) After four months

c) After six months d) After one year


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Q.6 Which package do you prefer to use?

a) 50 gm. b) 100gm

c) 250gm. d) 500 gm

e) 1Kg. e) 2 Kg. and above

Q.7 How many times do you take tea in a day?

(a) One time (b) two time

(c) Three time (d) If more, specify


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BIBLIOGRAPHY

BOOKS:

Zikmund, William G "Business Research Methods" Johnson South Western, Seventh

Edition, 2003.

Ram Pal & Gupta, "Articles on Consumer Buying Behavior"

The psychology of consumer behavior by Brain Mullen

Consumer behavior written

Final Sahil Research Report Ss

Documents

Transcript of Final Sahil Research Report Ss