Submitted by:Angela D’Orrico, Josh Domingues, Luis

Alberto Farry, Loredana Matarazzo, Aijia He, Yogesh Chanana

Submitted to: Margery TaylorSubmitted on: April 5th, 2013

Course Code: MARK 1027

Tetley Premium Masala

Table of

Content

Executive Summary

Mission Statement

Marketing Objectives

•Positioning Statement•Features and Benefits•Brand Name and Rationale •Packaging•Competitive Advantage

Product Strategy

Pricing Strategy

Place Strategy

•Creative Strategy/Integrated Marketing Communication•Slogan/Visual Message•Mass Advertising•Pre-Launch Promotional Activities•Launch Promotional Activities•Post-Launch Promotional Activities•Promotions Budget

Promotional Strategy

Financials

Marketing Implementation

Control

Executive SummaryBased on the opportunities we outlined in the Situational Analysis, we

surmised that the most lucrative course of action for Tetley would be to capitalize on the segment of the market that prefers the highest quality tea possible. As of right now, retail tea does not quite meet the standards of the tea you would find at a tea house or specialty tea store. Using our breadth of international experience within the group, we discovered a type of tea called Masala Chai that is extremely popular in South Asia and India, but is underrepresented in the Canadian market.

Masala Chai has a large amount of health and energy benefits that definitely appeal to a health-conscious nation, but the primary draw is the outstanding taste and quality of the tea. As such, our marketing plan focuses primarily on how high-quality the tea is while still keeping the health issues relevant.

We expect the strategy to draw in two large markets of consumers: • the Tetley (or competitors) retail tea drinker looking for an upgrade• the tea house frequenter looking for that experience in the comfort

of their own homeWe estimate this product to achieve $44.7 million in sales, with over 90% of the Premium/Masala Chai tea market share. We also expect our competitors to match or counter this new product with one of their one, but we hope to capture a large degree of customer loyalty by being first out the door in this untapped, potentially large market.

The product will be successful based on our positioning as the quality focused brand. Our

entire Integrated Marketing Campaign is based on one idea- bringing tea house quality to the home of the consumer. As you follow this plan, you will see that every step taken

and decision made is with this in mind- capturing the imagination of the tea house frequenter, making them curious about the product, getting them to try and love the product, and ultimately become a loyal customer for Tetley Premium Masala.

Mission Statement

“To become a global leader in good-for-you beverages through innovation, strategic acquisition and organic

growth”

Marketing Objectives

• To successfully introduce Tetley Premium Masala into the market place on October 1st, 2013

• To drive target market awareness of over 80% by April 1st, 2014

• To achieve over 90% of the Canadian Masala Chai tea market by April 1st, 2014

• To deliver over $30 million in revenue by the end of fiscal Year 1

Target Market

Tea connoisseurs A strong passion and taste for high quality

great tasting teaHealth conscious

Middle class or above Attend tea houses

Lead a “hip” lifestyle

25-40 Year Olds

Solid amount of disposable income

Willing to pay a slightly higher price

Goes to tea houses

Always wanted a high quality tea to enjoy at home

Becomes aware of our product through the marketing campaign or pre-launch promotions

Is intrigued by the promise of quality and the health benefits, gives our product a try and is hooked as a

loyal customer

30 Year Old Ideal Customer

Product Strategy

Positioning Statement

“To lovers of a high quality tea who are seeking wellness, taste, quality and comfort, we

introduce to you a new joy from South Asia- Tetley Premium Masala. A type of Masala Chai that is rare for North America, Tetley Premium Masala lets you discover exciting new sensations, clear your mind, and provides a home-made warming,

quality taste. This healthy choice of a combination of natural spices delivers flavor and a

commitment to staying healthy”

Features and Benefits

Tetley Premium Masala is specifically addressed to those in search of a unique, high quality taste along with numerous health benefits. Tetley Premium Masala is made with full body black tea leaves and different spices that provide the following features and benefits:

KEY FEATURES BENEFITS PERCEPTION

Main ingredient “Sattvic"

Clear the mind and calm the spirit. Healthy

Other Ingredient Impart to a warmth as medicine

Improve digestion, breathing and circulation Healthy

Can be combined with many antimicrobial Spices

Very captivating, and fight off a sore throat or cough.

High Taste & Healthy

Traditional Indian Tea Natural, exotic, specialty tea image. High quality.

High Taste & cultural

Brand Name and Rationale

Tetley Premium Masala is a name that evokes a sense of strength and quality, while remaining a quick, exotic, and fun name. Including Tetley in the name is a must, as the Tetley brand is trusted (highest Canadian market share), loved, and known.

• Why the word Premium? Because it’s a stronger word that really drives home a sense of quality as well as exclusivity.

• Why Masala? Not only to be informative on the type of tea, but because the exotic sound of the word flowed better with the entire brand name, and added a little spice to the whole thing.

Packaging

Tea Begs• familiar to the

consumer• comes in a

pyramidal shape for a unique look, and strong presence on

the shelves• labeling spices• compostable materials for the environmentally-friendly consumer

Tea Leaves/ Loose Tea

• Tin that keeps the leaves fresh without the worry of excess foil or

packaging• Slightly richer taste

• Classical version of tea for those inclined to try out traditional ways of

doing things

Tassimo T-Discs

• offers the most convenience

• for the always-on-the-go customer who would like to make our product quick

and easy

There are three different types of packaging that we are introducing to the market place, each with their own unique advantages:

Competitive Advantage

• High qualityTetley Premium Masala stands for goodness and exceptional flavour offering a range of black tea based on top quality ingredients • Stimulation of your sensesThe quality and aroma of Tetley Premium Masala is ensured by the packaging and thoughtful creation process• Brand LoyaltyThe Tetley brand comes with a wealth of benefits- including already built in distribution channels and a built in loyal consumer base. • Committed to sustainability The tea is produced utilizing a range of eco-friendly processes

Pricing Strategy A high price point might price out the less committed tea drinkers, but our target market is tea LOVERS who are willing to pay a premium price for something of real value and quality. As such, as you can see in the charts below, our pricing is higher than industry average, but still affordable:

PackageGroup

RetailPrice

Expected Sales

Volume

Tea BagPyramid Shape

$4.99(25 bag/ per pkg)

High

Loose TeaTin

$6.99(100g/ tin) Medium

TASSIMODISK

$9.99(12 T-disks/

per pkg)Low

Place Strategy

Key Retailer Stores (Loblaws, Sobeys, Metro, etc):

• Ease of access for the target market, as well as attract new customers with the high quality promise

Co-Promotional Strategy with Retailers and In-House Specialty Stores:

• Provides free samples to attract customers who may not otherwise try the product

• Informational seminars on the health benefits of tea in general and Tetley Premium Masala in specific

Specialty Tea Stores and High-End Restaurants:

• High level of service with knowledgeable sales people, introduces the product to people who may not be aware of it or who may not try it under other circumstances

Promotion Strategy

Creative Strategy/Integrated

Marketing Communication

Target Audience: Our target audience is people who frequent tea houses and prefer a higher quality of tea. These tea connoisseurs are generally in the 25-40 age range, in the middle-class or higher with a decent amount of disposable income.

Key Take-Away Message From All Promotions: Tetley Masala is high-quality tea on par with tea you can consume at the tea house. It is a unique product not offered by our competitors.

Slogan/Visual Message

The general visual message we’d like to convey through all our promotional activities and ads is a person sitting at a kitchen

table enjoying Tetley Masala. The kitchen is like a regular kitchen, except it’s crowded as if it was a tea house. It is a visual representation of the slogan- the person’s home has

been transformed in to a tea house. We want to communicate that the quality of the tea will make you feel like you’re in a tea

house, even at your own kitchen table.

Slogan: “ Bring the Tea House to Your Home”

Mass Advertising The following 3 forms of mass advertising will be used, and the ads we plan on ushering out:

1.Television: The TV ad will be a short clip targeted for specific channels and times. It will begin in a crowded tea house as somebody orders Tetley Masala. He or she will begin drinking the tea, when gradually the tea house fades away and he or she is left sitting at their kitchen table. Satisfied with the tea, they smile as “Tetley Masala: Bring the Tea House to Your Home” appears superimposed on the screen.

2. Magazines: Target specific magazines- still image with “Tetley Masala: Bring the Tea House to Your Home” at the top. A person drinking the tea is center of the page sitting in his or her own kitchen, but the kitchen is crowded with people around him or her chatting and also enjoying tea, like a tea house.

3. Online Advertising: Banners on targeted websites (specifically health conscious and/or tea enthusiast websites) that prominently display the logo and a similar image to the one in the magazine ad. Clicking on the banner redirects to the Tetley website where there is further information on the Masala tea including health benefits, quality testimonials, and where to find it.

Pre-Launch Promotional Activities

Pre-launch promotions start on May 1st, 2013

• Small samples sent out to retailers and specialty tea shops

• Mass social engagement through online interactions such as Facebook, Twitter, Instragram, and Tetley’s website that will hype a premium new product

• Promoting on our website and through social media that health benefits and high quality taste of Tetley Premium Masala.

Launch Promotional Activities

The launch date is October 1st, 2013

• We begin our mass advertising campaigns as illustrated before

• Active online engagement for any relevant questions from consumers through Facebook, Twitter, and the Tetley website

• A few PR representatives hit the morning breakfast talk show circuit to promote the tea in a fun and friendly manner

• A small launch party where we invite employees and members of the media to join and help build awareness and promotion of the product

Post-Launch Promotional Activities

• Track the sales and make sure that we are keeping up with demand and that the product is keeping up with expectations

• Utilize the “Tetley Better U” Instragram contest in a new and exciting manner to specifically promote Tetley Premium Masala.

• Continue to promote the health and quality of the product

Promotions Budget

ACTIVITY COST RATIONALE

Mass advertising (TV, Magazine, Online)

$3, 500, 000 With a budget of this size, we can produce quality advertisements, and air/display them in the proper time/location

Ongoing Online Interaction

$130, 000 Accounts for the start-up and design of the new online features as well as pays for 3 employees to oversee this aspect and engage with consumers on a personal level online

Contests and prizes, as well as samples

$100, 000 This includes all the free samples of the product we will be giving away, as well as the prizes for the contests we will run

Small launch party and promotion

$25, 000 More than enough for a small party to promote the new product

TOTAL: $5, 755, 000

Financials

Revenue Estimate Sales Revenue

(unit in Mn CAD)

Remark

　 Target Market Quantity 　 　　 　 Estimated Market Size 202.40 *

　 　 Estimated Market Share 24% **

　 　 Estimated Total Market Quantity 48.58 　　 　 Target Masala Chai consumer group % 15% ***

　 　 Target Masala Chai consumer 7.29 　　 　 Estimated 60 % Consumer interested in play-around 4.37 i

　 　 Estimated 30 % Consumer interested in Stay-fresh 2.19 ii

　 　 Estimated 10 % Consumer interested in Purity-Intense

0.73 iii

　 　 　 　 　　 Price per unit (in dollar) 　 　　 　 Selling Price (Play-Around) 4.99 a

　 　 Selling Price (Stay-Fresh) 6.99 b

　 　 Selling Price (Purity-Intense) 9.99 c

　 　 　 　 　　 Revenue per product group 　 　　 　 Play-Around Sales Revenue 21.82 D=a*I

　 　 Stay-Fresh Sales Revenue 15.28 E=b*ii

　 　 Purity-Intense Sales Revenue 7.28 F=c*iii

Total Sales Revenue 44.37 D+E+F　

Note: • Referred to Canada Food and Drink Report

26

** Referred to PMB Data*** Referred to Agriculture and Agri-Food Canada

Income Statement Income Statement for Year ended fiscal year by

2013

Sales revenue $ 44,460,000

Less cost of goods (@50% of Revenue) $ 22,230,000

Gross margin $ 22,230,000

Less Promotion and marketing expense $ 5,755,000

Contribution to Profit $ 16,475,000

Where Revenue From:

Tea Market Current value* $ 1,976,000,000

Specialty Tea share 60%* $ 1,185,600,000

Tetley market share 24%** $ 284,544,000

Masala Chai 15%*** $ 71,136,000

Wholesales price 60% $ 44,460,000

Note: • Referred to Canada Food and Drink Report

26

** Referred to PMB Data*** Referred to Agriculture and Agri-Food Canada

Marketing Implementation

ControlThe controls necessary to monitor the progress of Tetley Premium Masala are as follows:

• Track sales figures • Make sure results come close to projected

marketing objectives• On-going monitoring of competitive activity in

order to reach market share objective• On-going social media engagement for target

market awareness and trial objectives

Appendix – Masala Chai Price Comparison Table

PackageGroup

Compared with Competitors

Compare with OtherTetley Tea Products

Compared with Industry Sales

Price

Tea BagPyramid Shape

Higher than tea bag package

Stay average Tetley per tea bag price

($3.99/20 package)

A little above Average

Loose TeaTin

Higher price than Twining loose chai tea

tin box package

Higher than average Tetley Specialty Tea product

Higher than average

TASSIMODISK

Exclusive, nothing similar

Higher than average Tetley Tassimo product price

($6.99/ 12 T-disks)Extremely Higher

Appendix – Masala Chai Pricing Rationales

PackageGroup

Company Objectives

Customer

Cost Competition Pricing Strategy

Applied Methods

Price Reduction Allowance

Tea BagPyramid Shape

Remained 13% sales volume increase in 2013 and strength cost competitiveness

Very Price Sensitive/Elastic

Lower Level Product Cost with high sales volume range

The competition of tea market place in Canada is in between with Monopolistic and pure competition whereas several firms selling the similar price and more differentiate products in the market. The Masala Chai product group will more focus on product quality product value than pure price competition.

Market Penetration to increase sales in volume to stay leadership position

Cost-base Pricing Methods:Use cost per unit including direct and indirect cost to add up for the listed sales price to remain average market price and to gain new product awareness

N/A

Loose TeaTin

Remained leading position in 24% of the market place and increase competitive advantage

Average Price Sensitive/ Elastic

Medium-High Level Product Cost with average sales volume range

Follow Competitive Pricing to increase market share amongst those main competitors

Competitor-Based Methods:Set up price higher than competitors to signify premium product image

Seasonal Discount (e.g. summer discount)

TASSIMODISK

Continually enjoyed value leadership in Canada and still focus on Tetley's Brand-driven agenda and innovation

Price Insensitive/ inelastic

High Level Product Cost with Lower sales volume range

Market Skimming to increase perceived value rapidly

Value-Based Methods:Set high-end price strategy to increase overall value of high-quality health benefit perception

N/A

Appendix – Masala Chai Product Group Cost Of Good

SoldTotal COGS (Direct Labor Cost, Raw Material, etc)　

Sales vol & Total Cost. in

Mn

Remark

　 Play-Around Variable Cost 　　　 Estimated Unit Variable Cost $1.00 A

　　 Estimated sales volume 4.37 I

　 Total Play-Around Variable Cost $4.37 D=A*I

　　 　 　　 Stay-Fresh Variable Cost 　　　 Estimated Unit Variable Cost $1.50 B

　　 Estimated sales volume 2.19 II

　 Total Stay-Fresh Variable Cost $3.28 E=B*II

　　 　 　　 Purity-Intense Variable Cost 　　　 Estimated Unit Variable Cost $2.50 C

　　 Estimated sales volume 0.73 III

　 Total Purity-Intense Variable Cost $1.82 F=C*IIITotal Variable Cost 　 $9.47 D+E+F

Note: • Referred to industry Canada that unit cost of good sold ranged from 20-25 %

of unit sale price.