CHAPTER 1
INTRODUCTION
Green tea is widely consumed in Pakistan and is regarded as a health-promoting beverage. The
idea behind this project is to conduct a brand-blind taste test for green tea and devise
marketing strategies. For this, we have chosen two leading brands of Pakistan i.e. Lipton and
Tapal. Their corporate profiles are briefly discussed below
Lipton is one of the world's great refreshment brands, making a big splash in the global
beverages market with tea-based drinks including leaf tea, infusions, ready-to-drink tea and
other healthy, refreshing alternatives to soft drinks. Lipton is painting the world yellow with a
marketing campaign that represents all that Lipton stands for — brightness, vitality and fun
with natural goodness.
The parent company of Lipton is Unilever. Unilever Pakistan Limited is a Pakistan-based
company. The Company manufactures and markets home and personal care products,
beverages, ice cream and spreads .The Unilever Pakistan Limited (UPL) was established in
Pakistan in 1958. Unilever Pakistan is the largest FMCG Company in Pakistan, as well as one of
the largest multinationals operating in the country. Unilever has consolidated its green tea line
under its Lipton ‘Clear Green’ brand, which includes its original pure flavor alongside three
newly launched flavors – Jasmine, Lemon and Mint.
“Lipton tea can do that” is the positioning statement of Lipton.
Products:
1. Clear green: Mint
2. Clear green: Lemon
3. Clear green: Jasmine
4. Clear green: Natural
ABOUT TAPAL
HISTORY
The journey of Tapal's remarkable success is the combined efforts of three dynamic generations
of the Tapal Family. In 1947, Tapal started out as a family concern under the personal
supervision of its founder, Adam Ali Tapal.
Against tough competition Adam Ali's unique blend, later named Family Mixture, became a hot
favorite and eventually the largest selling brand in the unorganized tea market. From this
auspicious beginning, Tapal moved from success to success introducing tea brands to suit every
taste and pocket, sold from its retail outlet in Jodia Bazar, Karachi. The quality of Tapal teas
soon became legendary and people from all parts of Karachi started lining up at the outlet to
purchase tea. For their convenience,
Tea distribution was initiated to retail outlets around the city. The company continued to grow
under the management of the founder's son, Faizullah A. Tapal.
Today Tapal Tea is managed by the founder's grandson, Aftab F. Tapal. After studying abroad,
Aftab Tapal returned to Pakistan to introduce professional management and unique production
ideas to the business. A well trained tea taster and tea connoisseur himself, Aftab Tapal
introduced new tea concepts and developed a wide range of tea blends catering specifically to
the tastes of people throughout Pakistan. His progressive outlook resulted in giving further
strength to the foundation of quality laid by his family.
Making a modest beginning over half a century back, today Tapal has become the largest, 100%
Pakistani owned Tea Company in the country. It has modern tea blending and packaging
factories, warehouses equipped with state-of-the-art equipment and a team of highly dynamic
professionals headed by Aftab Tapal himself.
SHARED VALUES
1. Trust in Each Other
Tapal believe that trust is the foundation of our business actions.
It believes that honesty is absolute and that integrity cannot be compromised. All our actions
are guided by fairness and sincerity of commitment.
2. Outstanding Quality
Tapal believes in dedicating ourselves to achieving an outstanding quality in all our activities.
Excellence is a journey, not a destination. Quality is a way of life for us.
3. Passion for Creativity
Tapal is open to novel ideas in every aspect of our business of choice.
Tapal believes in providing an environment which supports individual opinion and
efforts, inspires and enables everyone to use their creativity and entrepreneurial
flair.
4. Leadership
They are committed to being the No.1 national company in our business of choice; a
role model for others to follow.
They believe in empowering individuals at every level. We encourage the use of
judgment and decision making with ownership and accountability. We believe
empowerment creates leadership.
5. Together, Everyone Achieves More
They believe in unity and purpose of value the benefit of coordinated efforts. With a
common goal and team spirit we will fulfill the needs of internal and external
stakeholders.
BRANDS
Tapal is proud to have been a part of Pakistan's history since its inception. As a company they
have grown and flourished together with the great nation. Founded by Adam Ali Tapal, the
company first started marketing a number of quality blends to Pakistani consumer market.
Through continuous innovation and research and development they gain a big share of
Pakistani market. They still are growing and hope to be a leader in a market in coming years.
Tapal is the heart brand of green tea in Pakistan. “Shades of green” is a brand of Tapal
manufacturing green tea in Pakistan.
In the year 2000, Tapal became the first tea company to launch a range of flavored green teas
in the country. The real achievement lies in the fact that Tapal has maintained the leadership
position in this category for over 10 years. Tapal is currently the market leader with 65% market
share. Available in refreshing Jasmine, Lemon, and Elaichi flavors, Tapal Green Tea is blended
using the finest tea leaves and specially selected flavors, to create the perfect harmony of taste
and aroma. A favorite of health-conscious people, the brand delivers a wealth of benefits. It
helps to soothe and relax you whilst helping in digestion, enhancing metabolism and aiding in
weight loss.
Jasmine Green Tea was introduced first and is a winning combination of an alluring fragrance
and health-giving properties. Then came Elaichi green tea with its unique nature that lifts your
mood and helps you achieve a new level of clarity; followed by Lemon, with its crisp taste and
refreshing aroma. People of every age enjoy cups of Tapal Green Tea after meals and in the
evenings to soothe away the cares of the day and enjoy a healthy lifestyle.
“A new shade for a healthy lifestyle” is the positioning statement of Tapal shades of green.
Products:
1. Jasmine
2. Lemon
3. Elaichi
THE INDUSTRY
Tea has never been an indigenous product of Pakistan, but it is so deeply rooted in our culture
that most of us would declare it the country’s national drink without a second thought.
This tenacious hot brew attained permanent shelf life in the hearts and minds of the nation
ever since it was introduced by the British during the colonial era, and now as the West’s
increasing preoccupation with health and health-related products permeates our media, the
spotlight has fallen on black tea’s counterpart.
Green tea is the new black for those living up to the global health kicks, and local market giants,
Tapal and Lipton have both opted to capitalize on this trend.
As a product, green tea has had a long history and presence in Pakistan, though at a scale which
has largely been overshadowed by black tea. While black tea consumption stood at an
astounding 170,000 tons last year, the consumption of green tea was a mere 500 tons.
Pakistan’s ‘healthy hedonists’ are particularly focused on the issue of digestion, hence the
emphasis on food consumption and tea drinking. Green tea’s health benefits to a daily lifestyle
will aid in changing the general perception that green tea is a product only to be consumed in
the cold winter months.
Tapal has opted to reinforce this emerging green tea culture by playing upon health benefits,
but unlike Lipton, the emphasis of the campaign has been on creating an emotional connects
between the consumer and the product.
COMPETITION
Green tea market is a small market so the competition is too intense. The main competitors are
Lipton and tapal. Trying to build the green tea market in the midst of a recession is yet another
major hurdle for both Lipton and Tapal, especially as the branded green tea category faces the
drawback of being a comparatively pricey product.
At the retail level, a limited survey of shops across Karachi indicates that both Tapal and Lipton
currently stand out from the crowd of foreign green tea brands and flavored tea in terms of
packaging, price and most significantly, placement. Both brands are prominently displayed
occupying positions next to the more popular products which either company produces,
lending them support, credence and visibility on the shelves.
Additionally, both Tapal and Lipton’s SKUs range at comparatively modest, competitive prices,
breaking down to two to three rupees per teabag, while foreign brands such as Tetley and
Twining range seven rupees and up, per teabag. According to the retailers at these shops, Tapal
has struck big with its value-addition sample pack, in which all three flavors are available for the
consumer to try out.
In the limited market, both the brands also face competitive pressures from the imported
brands as well as local unbranded green tea sold openly in the market. The imported brands
cost on an average thrice the price of well established local brands such as Lipton and Tapal.
Following are the imported brands available in the market:
Alokozay
Twinings
Aroha
Direct competition of Tapal green tea is with Lipton green tea. Indirect competition of tapal is
with tea, loose tea and other teas available in market. Generic competition includes all the
generic products which can fulfill consumers’ generic needs. Last one is budget competition
that includes the alternatives.
CHAPTER 2
Market Analysis
Green tea is the new black for those living up to the global health kicks, and local market giants,
Tapal and Lipton have both opted to capitalize on this trend. This tiny market is segmented into
those who prefer loose, unbranded green tea (popular year-round in Baluchistan, NWFP and
further north) and those who prefer the more up market branded green tea, with sales
restricted to the larger urban centers and towns across the country. This branded segment of
the market constituted only 200 to 225 tons last year, with a majority of sales taking place in
winter, as green tea’s consumption is currently tied directly to seasonal shifts.
Tapal was the first to enter this small-scale market in 2000, and is currently the market leader
with a 65% share in the branded green tea market. Having been the first to launch green tea in
teabags, the company also explored multiple flavors to form its current line of Elaichi, lemon
and jasmine flavored green tea, available under the new, ‘Shades of Green’ banner.
Following a similar strategy, Unilever has consolidated its green tea line under its Lipton ‘Clear
Green’ brand, which includes its original pure flavor alongside three newly launched flavors –
Jasmine, Lemon and Mint.
According to Sami Wahid, Brand Manager, Tapal Green Tea, the company has seen a 43%
growth in green tea sales this year, surpassing all expected sales targets. He says Tapal is yet to
see profits from the product due mainly to the small size of the market, but he believes green
tea consumption can easily swell to 2,500 tons or more annually.
The Lipton team is also aware of this fact, and they see future growth in terms of a brand new
market with a separate identity from black tea. As Aamir Malik, Creative Director, Blitz DDB
explains:
“Green tea is not going to cannibalize regular tea’s market, as it is not a substitute. Green tea is
essentially taken with heavy, rich meals, while regular tea is usually drunk separately. It’s
generally consumed for its therapeutic value.”
PEST ANALYSIS:
The external macro environment in which a firm operates can be expressed in terms of the
following factors Political Economic Social Technological PEST analysis is used to describe a
framework for the analysis of these macro environment factors.
POLITICAL FACTORS:
These factors and government interventions can make or break the industry. The political
factors have played a very benign role for the tea industry. The political arena has a huge
influence upon the regulations of the businesses, and spending power of consumers and other
businesses. The political environment of Pakistan is relatively unstable in the current situation.
The investors are not willing to invest in Pakistan. However, WTO and trade policies encourage
the import of raw materials for Tea industry. Tea Import Quota It is an important consideration.
Each year there is a certain quota on tea import in total imports of Pakistan. Each player is given
quota to import and manufacture so one can say that it is a regulated industry.
Diplomatic Relations: The relations with the tea producing nations and Pakistan play a vital
role as large part of imports comes from Kenya, but now Pakistan is also importing tea from
India. Unstable Geographic Conditions Pakistan is situated at a very critical and geographically
strategic location. Due to the uncertainty new investors are not ready to invest in Pakistan.
ECONOMIC FACTORS:
Economic conditions of an environment have a direct impact on the development of any
industry. The recent economic recession in the world has had an impact on Pakistan’s economy
as well. Pakistan's economy mainly encompasses textiles, chemicals, food processing,
agriculture and other industries. In 2005, it was the third fastest growing economy in Asia. Since
the beginning of 2008, Pakistan's economic outlook has taken a dramatic downturn. Security
concerns stemming from the nation's role in the War on Terror have created great instability
and led to a decline in FDI from a height of approximately $8 bn to $3.5bn for the current fiscal
year. Concurrently, the insurgency has forced massive capital flight from Pakistan to the Gulf.
Combined with high global commodity prices, the dual impact has shocked Pakistan's economy,
with gaping trade deficits, high inflation and a crash in the value of the Rupee, which has fallen
from 60-1 USD to over 80-1 USD in a few months. For the first time in years, it may have to seek
external funding as Balance of Payments support.
Inflation remains the biggest threat to the economy, jumping to more than 9% in 2005 before
easing to 7.9% in 2006. In 2008, following the surge in global petrol prices inflation in Pakistan
has reached as high as 25.0%. The central bank is pursuing tighter monetary policy while trying
to preserve growth. Foreign exchange reserves are bolstered by steady worker remittances, but
a growing current account deficit - driven by a widening trade gap as import growth outstrips
export expansion - could draw down reserves and dampen GDP growth in the medium term.
Social Factors The social and cultural influences on business vary from country to country. It is
very important that such factors are considered. People are socializing more may it be events or
casual visits to friends and family. Tea has always been an integral part of Pakistani culture and
rituals. It is understood that tea would be present at all events. Changing Trends As work
environment is becoming more stressful; people require different forms of refreshment and
intakes to increase their energy levels. This further increase the intake of tea at workplaces, tea
is not only just available to the employees when needed but is also served twice a day in order
to keep them going. On the other hand, media expansion, growth of advertising as a separate
industry has resulted in greater exposure of all the brands and masses. Hence social factors and
changing mindsets have positively affected this industry Tea has always been acceptable in all
social classes because of its usage. Green tea has recently gained a lot of popularity due to
health reasons and is largely consumed. Another factor is the emergence of ice tea which is
indirectly competing with soft drinks.
TECHNOLOGICAL FACTORS:
Technology is important to gain an edge over competitors and it drives globalization.
Technology helps companies to reduce cost and achieve economies of scale. Technology also
leads to the development of new products and sometimes even segments. Tea manufacturers
like Unilever and Tapal already manufacture tea of the highest quality and they achieve it by
the state of the art production facility that they have. Lipton has also installed its own plant of
Danedar tea production.
PORTER’S FIVE FORCES:
RIVALRY AMONGST COMPETITORS
The competition in the tea industry is high. Since there is low switch cost for the customer there
is a tendency amongst them to buy substitute brand if the brand they have been consuming is
unavailable for any reasons. There are a moderate product differences and brand identities
between the competitors.
THREAT OF NEW ENTRANTS
Threat of new entrants is high. This is evident by the immense growth in the industry and
government policies are also encouraging new Tea houses to emerge on the scene. The taxes
on import of tea are reduced thereby decreasing the cost of production. It can be taken as
positive sign by a prospect player. Initially it was thought that no company would survive
against the giants of Unilever but since Tapal people have started thinking that local brands can
do well and new players might decide to come into this market.
THREAT OF SUBSTITUTES
In this case tea will always remain an integral part of our culture. There is a low switching cost
associated with the trade off of substitutes. It can easily be assumed that the demand for green
tea is increasing. Change in patterns can be observed because consumers are shifting from
normal tee to green tea.
BARGAINING POWER OF BUYERS
The bargaining power of buyers is low because of the high demand and low availability of
substitutions. Although due to increased competition prices remain competitive but buyers
have little or no bargaining power.
BARGAINING POWER OF SUPPLIERS
Bargaining Power of supplier is high because there are few suppliers of tea. The reason why
there are few is because there is a specific taste of tea that consumers like so the
manufacturers are forced to choose from few options. In Pakistan tea is imported majorly from
Kenya and Srilanka so the supplier is at power to influence the price due to the limited
availability of the raw tea. In Pakistan recent plantation of tea farms may favor the local
manufacturers and foreign suppliers may find a reduction in their bargaining power.
Overall attractiveness?
SWOT ANALYSIS
a) TAPAL
INTERNAL
FACTORSSTRENGTHS WEAKNESSES
ManagementExperienced, broad base of
interests and knowledge
Large size may lead to conflicting
interests
Product Line Differentiated, Variation in So much product lines but still
products not able to knock out loose tea.
Marketing Diverse, and local awarenessMay lose focus, may not be
segmented enough
PersonnelVery experienced, high
knowledge
Possible conflicts due to so many
people, possible trouble staying
focused
FinanceHigh sales revenue, high sale
growth, large capital base
High expenses, may have trouble
balancing cash-flows of such a
large operation
Research &
Development
Continuous efforts to research
trends an reinforce creativity
Sometimes they conduct
research but the advantage is
taken over by small competitors.
EXTERNAL
FACTORSOPPORTUNITIES THREATS
Consumer/Social Increase in the populationIlliterate people go for loose tea
which is substandard as well
Competitive
Distinctive name, product and
packaging in with regards to its
markets
Intense competition can pay so
they have to keep eyes open
Technological
Maintenance of proper website
which subscribes and provides
information regarding long
production line.
Competitors are global leaders
so they have more technology as
compared to Tapal
Economic Consumer income is high for the Very elastic demand, almost
loose tea. pure competition
b) LIPTON
Strengths:
I) Already a market leader and a well-known and reputed brand.
II) Extensive knowledge of local culture and tastes.
III) Wider product range with technological superiority, e.g. Brooke Bond’s hot tea can.
IV) Experienced and quality management.
V) Strong Ethical value (culture and heritage)
VI) Strong financial position
VII) Strong company image
Weaknesses:
I) Having too many brand extensions can dilute and confuse consumer perception and
give fresh and new competitors to seize market share.
Opportunities:
I) Declining markets for other beverages.
II) Greater awareness of health benefits of green tea.
Threats:
I) Overcrowded and small market might cause significant demand reduction.
II) Presence of other major players such as Lipton and foreign brands leading to tough
competition.
CONCLUSION:
After doing the industry’s overall analysis using PEST and Porters five forces and briefly
discussing the Internal and external factors of both major green tea brands of Pakistan using
SWOT we have come to the conclusion that the green tea industry of Pakistan is a growing as
well as attractive, though the rivalry as well as barriers to entry are high there is still a lot of
potential in this market. Due to the changing trends and more health conscious customers the
green tea market is flourishing and if Unilever and Tapal will use the right strategies and
implement them correctly they will make huge profits from this market industry. After studying
the whole industry we have also concluded that Tapal; shades of green is currently the market
leader of Pakistan with a market share of 65%, and Lipton is the greatest competitor of Tapal as
Lipton too is trying the level best to replace Tapal’s position in the market as the leader.
A detailed study on Tapal will be done in the later chapters of this report in which we will
discuss the strategies which Tapal can opt in order to retain its market share and leadership
position. We will also talk about the Company’s current selling proposition, its 4 P’s, STP and
other information, after the brand- Blind taste test when we’ll be having a clear idea of what
customers want and will be in a much better position to decide about the overall strategies and
Marketing plan of the Company.
Top Related