Mm Report With Final Content_1

8/9/2019 Mm Report With Final Content_1

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Tapal Tea Marketing

Management1

MARKETING MANAGEMENT

GROUP MEMBERS

ABDUL MATEEN

MUBASHIR AHMED

OMER

SHAHRUKH MUSHTAQ

SYEDA TOOBA HUSSAIN

SUBMITTED

TO

NOMAN ASHRAF


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Tapal Tea Marketing

Management2

TABLE OF CONTENT

ACKNOWLEDGEMENT

VISION STATEMENT

SWOT ANALYSIS

COMPETITORS SWOT ANALYSIS

COMPETITIVE STRATEGY WHEN THE TAPAL BRAND

WAS LAUNCHED

MARKETING ENVIRONMENT

SEGMENTATION, TARGET MARKETING AND MARKET

POSITIONING

CONSUMER BUYING BEHAVOUR

PRODUCT

PRICING

DISTRIBUTION STRATEGY

PROMOTIONAL STRATEGIES


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Tapal Tea Marketing

Management3

ACKNOWLEDGEMENTS

This report has been a great learning experience- helping us to learn about

the practical implications of marketing management, which is complex and

dynamic process.

We would like to take this opportunity to thank our instructor Mr. Noman

Ashraf who made this report possible by providing his unconditional

guidance and cooperation throughout the semester.

We also wish to express our gratitude to various Tapal employees who

generously helped us in compiling this report by sharing their expertise,

knowledge and experiences, without which this report would never have

been possible.


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Tapal Tea Marketing

Management4

VISION STATEMENT

To provide value and quality to our consumers, our aim is constantly to

provide world class service for our customers, deliver value for our

products and make Tapal is a great place to work for our employees.

We aim to have a reputation for innovative thinking in the areas that

matter to our customers

To become a global brand.

To be an innovative, marketing and research oriented company.

MISSION STATEMENT

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

world-class service. Customer satisfaction is our number one priority.

OBJECTIVES

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

To offer quality services with integrity, expertise and professionalism

to enhances

our client's operation.

To offer personalized services according to the clients need.


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Tapal Tea Marketing

Management5

SWOT ANALYSIS

StrengthsThe strength of the company would be the innovation and the high quality

products. Because of these the company is able to survive in the market

and still earning a good market share comparing to its competitors.

o Tapal is one company that is catering to the needs of all segments of

the society.

o

Exporto Tea cultivation

o Strong R&D team

o Brand sponsored shows such as musical concerts and cricket

tournaments.

o Good brand awareness in the local target market.

o Danadar, Family mixture and wide range of veriety

o Karachis largest selling brands

OpportunitiesOne of the greatest opportunity that Tapal has its huge market which isincreasing as the population is increasing. Tea has become a staple

product in Pakistan which cannot be denied at 20 to 60 year of age.

o In the long run there is going to be a lucrative market for Ice-Tea and

flavored tea.

o The market growth of the tea-bag market because of it being easy to

use.

o Customers are more attracted towards strong taste and quality of tea

offered by tea providers.

o There are markets in Punjab, N.W.F.P and Baluchistan, which are not as

yet explored by competition.

o Duty free tea import from Sri Lanka and Bangladesh and India.

o Green tea market is growing.

o Research and development (Northern Areas)


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Tapal Tea Marketing

Management6

o Exports ( USA, UAE, CANADA)

WeaknessesNo major weaknesses were mentioned by the authorities of Tapal but its

intense competition as our analysis is one of their weaknesses as to stay

alive against a giant as Unilever and the other one new entrant as Tetley.

o It is a major hurdle for Tapal to position its tea abroad in the minds of

the consumers and encourage them to indulge in brand switching.

o Have to import some of their products from other countries, whichincrease their costs.

o Most of the sales are on cash, problem for the distributor then they can

switch to competitors.

o Tight quality control procedures lead to higher costs and its time

consuming and often discontent the suppliers.

o Tapal Safari Kenya leaf (wrong positioning)

Threats

One of the major threats that Tapal has it is its area of the market whichis not educated and it is using the loose tea which may not be good for

their health as well. Tapal claims that it is not possible for them to create

such a big awareness for them but the Government should play his role so

that these people should have some awareness of the imported loose tea.

o Strong marketing campaigns of Unilever makes it extremely difficult

for Tapal to counter-attack because of low budgets.

o Unilever as a more established brand name than Tapal world wide.

o High import duties encourage smugglers of tea to grow.

o The unstable rules and regulation of the government hinders the tea

companies.

o Due to climatic conditions, when the weather of Pakistan is mostly hot;

consumers would prefer soft drinks over tea.


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Tapal Tea Marketing

Management7

Competitors SWOT Analysis

Tapals success has left many astounded. No magic formula however, lies

behind its growth other than hard work, dedication and of course unique

blends and better quality.

Lipton Yellow Label

Lipton was first introduced in Pakistan in 1948. The tea giant Lipton

was merged with Lever Brothers in 1989, five years after the

international takeover of the Lipton Company by Unilever Lipton Yellow

Label's main feature is that it is tea of the "finest blend" available. The

benefits offered by Lipton Yellow label to its consumers are "good

quality and good taste" since it is and international brand,

Brooke Bond SupremeIn 1997, Brook Bond, another leading player in the tea business in

Pakistan, was merged with Levers, so that Lipton and Brooke Bond,once fierce competitors in the local market now belonged to the same

parent company. Brooke Bond had long been part of Unilever globally

but in Pakistan it remained a separate entity until 1997.

Tetley TeaTetley Tea is a product of Tetley Clover Private Limited, hoping to

capture six to eight per cent share in a market dominated by Unilever

and Tapal Tea. Tetley tea was due to hit the market in October 2003

but it had been delayed. The delay was caused by late shipments ofblending plant and machinery from abroad at Hub, Baluchistan. Lakson

Group and Tetley UK had entered into a joint venture investment of

Rs150-170 million in 2003 to form TCPL, a company incorporated in

Pakistan. Tetley Clover has planned to import tea from Kenya and Sri

Lanka due to good aroma and taste of tea of these countries and at the

same time Indian Tea might be used for blending.


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Tapal Tea Marketing

Management8

COMPETITIVE STRATEGY WHEN THE TAPAL BRAND WAS

LAUNCHED

OVERVIEW

Tapal tea is a perfect example of a gorilla brand becoming a market leader

through consistently improving themselves through different strategies and

creating value addition. When they started off in Pakistan they were doing

retail and whole sale business with shop in Jodia Bazar. With foresight Tapal

evolved formidable two prone strategy maintaining and continuously

improving blending quality and dynamically pursuing brand building

exercises. So in this way they shifted from a well planned gorilla attacks to a

frontal attack which Brooke Bond and Lipton were unable to defend because

of being engage in fighting for there market share with each other, and

under estimating a brand which was few years ago a shop in jodia bazaar.

(that clearly demonstrates the real essence of marketing & war

that is THE unknownmeaning who is the enemy, where is the

enemy, how to find the enemy, how to beat the enemy before the

enemy gets over you ENEMY=COMPETITOR.)

Now Tapal is playing defensive strategies against Brook Bond who are

imitating their marketing strategies and they are attacking Lipton which has

reached a saturation point and that presents opportunities for Tapal to gain

control of that territory the Lipton has been able to manage.


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Tapal Tea Marketing

Management9

MARKETING ENVIRONMENT

MACRO ENVIRONMENT

Social and Cultural Forces

Society and culture plays an important role in determining themarketing plan and business strategy of the organization. Although

Unilever and Tapal are big names and enjoy a very good market

share but still these forces sometimes play a major impact. Recently

when Muslims planned to resist against the foreign made goods it

could have greatly affected the sales of Supreme & Lipton Yellow

Label but at the same time this situation could have been good for

Tapal. These forces not always play a negative role but can

sometimes be really helpful.. In Asia society and culture does make

an impact.

Political and Legal ForcesThe tea market is very much dependant on Political & Legal forces.

In other words we can say that Political & Legal forces can dictate

the sales and profitability of the Tea selling firms. Taxes and Excise

duty are of real importance to these organizations. The price of the

tea is to great extent dependent on taxes. On the other hand there

are several other requirements that the Tea selling firms need to

fulfill. For new entrant especially Tetley there would be many

Political and legal barriers.

Technological ForcesAs far as Tea is concerned the Technological forces that may apply

are good machinery for refining and packaging. Tapal is considered

to be the pioneer in soft packing. Unilever is also up to the task as

far as packaging goes. Unilever and in my opinion Tetley will always


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Tapal Tea Marketing

Management10

have an upper hand and would be able to sustain the pressure of

bringing in new technological changes as they are financially strong

and have employees who love technological changes on the other

hand Tapal may initially cope up with these foreign firms but in long

run it will not be able to make constant technological changes.

Economic ConditionsBeing a third world country and trying to progress Pakistan still

faces the problem of economic stability, recently it is believed that

Pakistan has been able to maintain economic stability.

Economic conditions play a major impact on tea industry. Like most

of the other industries are dependant on economy, tea is also one of

the industries that can be greatly affected by economic instability.

Whether the economy is in a recession or in a boom, it affects the

activities of Tea industry in a way that it influences the demand of

their product. In a boom the demand of the product increases.

Similarly, in a recession the demand of a product falls since the

buyers consume less of the product due to falling incomes. Though

fluctuations in the demand do occur, these are not major

fluctuations as demand for tea is inelastic in relation to price.

Inflation plays a major role on the marketing strategies used by acompany due to two main reasons. Firstly, inflation affects the

consumers psychology and they become more selective in their

purchases. Secondly, inflation results in rising prices for the raw

materials purchased by Tea selling firms, which in turn increases the

cost of production. This factor plays a major role especially if the

increase in cost cannot be transferred to the consumers in the form

of raised prices.


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Tapal Tea Marketing

Management11

MICRO ENVIRONMENT

Distributors & Sales The success of tea industry to a great extent lies in the hand of

distributors. Tapal, Supreme, Brooke Bond & Tetley share a very

much similar policies with the distributor. Unilever has the same

distributors for most of their product. The main distributors of

Unilever are M.Saya and Gizri Corporation. Tapal in Karachi has a

very big distribution network; it deals with ten different distributors

for the sale of its tea some of the distributors areQiji Enterprise and

Sales Promoter. Tetley main distributors are Consumer Channel &

Express.

CompetitorsThe tea industry is divided into two segments. They are:

Branded Tea

Unbranded Tea

Tapal is facing a tough competition from both the segments as the

unbranded tea has almost half the share of the total tea industry.The

current tea imports are 140,000 tons. The major competitor for Tapal is

Lipton especially as the sales competition from this brand in the tea

industry is getting cut throat. Tapal is a clear market follower in all over

Pakistan as it caters to all the areas rural and urban alike. Lipton Yellow

Label is definitely a market leader claiming that it is a premium top of the

line product with a sign of good taste. But Tapal is the market follower

in branded tea.

However Tapal has countered this competition strategically by creating

positioning and brand pull in customers mind so that they have a separate

identity of their own. Catchy slogans like JAISE CHAHO JEEO for Tapal

Danedar, focusing on the free and radiant spirits of the youth which has

also been tagged along with ZINDAGI MAIN BHARO NAYA RANG.

MUKAMAL GHAR MUKAMAL CHAIisthe slogan for Family Mixture, which


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Tapal Tea Marketing

Management12

positions on the completeness and togetherness of the family and

position Tapal as an integral part of the Family.

Suppliers Tea industry is very much dependant on suppliers. Suppliers are

considered to be the heart of the Tea Industry. All the companies

like Tapal, Unilever and Tetley keep good terms with their supplier

since the shortages might be harmful for the company. These

companies have various suppliers and are not dependant on any

single supplier but still the supply chain needs to be very strong in

order to be in this competitive business.

Internal PublicEmployees and labor unions need to be tackled with great care. Labor

unions are present in Unilever, Tapal and Tetley. All these companiesfollow Industrial Ordinance that includes labor laws etc. Tea is basically

blended and packed in these companies. After suppliers labors play a very

important role in the progress of these organizations. Great care is taken

to provide laborers a good healthy working condition. At Unilever there is

a sports club for the workers. Tapal has plans to open up sports and

recreation club for their laborers.

Financial PublicThese are considered to be the back bone of the company. All these

three companies Unilever, Tapal and Tetley have a good reputation

and can get loans both short term and long term as when wanted.

Teltey has a backing of Lakson group which is one of the biggest

and strongest business groups in the country. Unilever will have an

edge over all the other firms in getting cheap loans and better

service followed by Tetley and Tapal.

Government Public The success of the Tea Industry at macro level depends on the

policies and budget decisions of the government. Taxes and General

sales tax are in the hand of the government, which are a major

threat to tea Industry.


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Tapal Tea Marketing

Management13

SEGMENTATION, TARGET MARKETING AND

MARKET POSITIONING

Mass marketing segmented marketing

Market Segmentation

Distinct needs - regular tea/ green tea

Characteristics taste, aroma, strength

Behavior in terms of 4 Ps Segmentation of consumer market

Current Status Of Segmentation There are two clear segments of consumers in the market, branded tea

consumers and un-branded tea consumers. In Sindh, branded tea isconsumed by most of the cities, whereas in the rural areas both branded and

unbranded are equally popular. In Punjab, the city dwellers as well as a

majority of rural areas are absolutely brand loyal while unbranded tea is only

popular in teashops and hotels. In NWFP and Baluchistan, 90% of the

population still prefer the unbranded form as it gives them the chance of see

and smell what they buy before paying for it. In addition, the mindset is such

that now no other tea brand can compete because consumers are strongly

brand loyal.

Tapals consumers can be segmented on the basis of income strata.

Class A:

It consists of consumers who have disposable monthly incomes of Rs. 20k.

Class B:


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Tapal Tea Marketing

Management14

It consists of consumers who have disposable monthly incomes between

Rs. 20k & Rs. 12k

Class C:

It consists of consumers who have disposable monthly incomes between

Rs. 12k and Rs. 8k.

SEGMENTS

GeographicCountry region AllWorld region or country PakistanDensity Urban, RuralClimate Any

BehavioralOccasion AnyBenefit sought Flavor, easy availability, brand status.Loyalty status Significantly highReadiness stage Conviction and purchaseAttitude towards product Enthusiastic, positive.

DemographicAge 18-35.35-50,50-70,70&upGender Both male and femaleFamily size Nuclear family sizeFamily life cycle Young, single married, no children,

married with childrenIncome 8000 and above

Income group Middle, upper middle and high class.Occupation White collar and service workers


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Tapal Tea Marketing

Management15

CONSUMER BUYING BEHAVOUR

Customers value those products whose targeting and positioning is done

effectively. Tapal being the market challenger has the main task to create

the value for its target audience. Marketers at Tapal need to have a close

look at what the consumers are actually looking for, at what price plus the

benefits through the sales promotions that it offers.

They closely monitor the buying behavior of the consumers, as how long is it

taking a consumer to make the decision and are they making a difference

between Tapal and the competitors product or not. Consumers buying

decision varies from product to product, Tapal is a beverage and some value

it as an important part of their lives while some just value it as a necessity in

the winters. It is basically a FMCG.

Tapal is a low involvement product and there are few significant differences

between the brands. It is basically a habitual buying behavior for theconsumers but for 10% of the consumers it is a dissonance-reducing buying

behavior.

HABITUAL BUYING BEHAVOURTapal is a low involvement product and consumers dont take much of their

time while making a buying decision. Consumers when buying a beverage

simply pick the one that they have been drinking since their childhood or

whatever has been going on around their house, there are no problems for

acquiring Tapal as it is available in all available shops. Consumers normally

do not search extensively for information while buying tea but the passive

recipients of information value their decision. The passive recipients of

information are repetitive ads that they see in television, magazines or

hearing it from others. This passive recipient of information creates brandfamiliarity and this helps in molding their buying decision. Even though Tapal

follows under the Habitual Buying Behavior it has a high involvement, as


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Tapal Tea Marketing

Management16

there are many significant differences in the product as compared to the

other products. Thus it could also be applied for Dissonance-Reducing Buying

Behavior. Tapal is a dissonance-reducing buying behavior for those 10 %

consumers in the beverage market who had a bad experience with

competitors tea. Being dissatisfied with the competitors product they take

the decision of buying another product in the same category with much high

involvement.


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Management17

DEMOGRAPICS ACCORDING TO PRODUCT


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TAPAL Age Occupation Lifestyle End Users

Tapal

Danedar 25-65 House wives Housewives Households/offices

Tapal family

mixture25-50 House wives

Female who pride

themselves in

family values &

cohesiveness.

Households

Tapal safari

chai

18-30 Athletes Young,

adventurous &

energetic

individuals

Athletes

Mezban

premier

dust

13-75 Housewives Interior Sindhi

families who

pride in smooth

house hold

running, family

bondage,

hospitality,

'mehman

nawazee' &

quality servings

Dhabbas/

Households

Tapal

special

teabags

18-35 Professional

s

Active, busy &

working

consumers

younger in age

who seek

convenience & in

their busy

lifestyles

Travelers/

workplace

Jasmine

green tea

22+ House wives Health conscious,

dieting females.

Households/

Offices

Tezdum 25+ Farmers/Athl

etes

Vigorous/energeti

c

Dhabbas/

HouseholdsChenak

Dust

25+ Housewives/

Blue-collar

workers

Strong Households/

Offices

Ice tea 18-35 Students Outgoing, active Restaurants/cafes


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Management19

TAPALS UNDERSTANDING OF CONSUMER BEHAVIOUR

Since blending tea has been a passion at the core of sales activities for three

generations. Tapal family had its finger on the pulse of tea tasting buds of

consumer. Their likes and preferences..the most important

ingredient for not only understanding consumer need but making the brand

succeeds. For Tapal, Its DANEDAR & FAMILY MIXTURE Brands are foremost

examples. Back in 1947 Adam Ali Tapal successfully created a new taste

variant by blending dust and leaf tea which was then known as family

mixture.

Thirty years later in 1977 a formidable two-prone strategy to achieve

company goal: maintain and continuously improve blending quality and

vigorously pursue brand-building exercise. Besides its legacy of tea being ahabit and a light-hearted social need Tapal realize early that tea drinking is a

serious business at both individual and collective level.

While the competitors were producing blends based on Srilankans tea

imports, Tapal for the first time introduced tea from Kenya which was

stronger in taste and the satisfying blend was happily accepted by the

consumers.


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Tapal Tea Marketing

Management20

PRODUCT

Tapal Danedar and Family mixture are the largest selling tea brands of

Pakistan. The brand was born from its inherent granular ingredient.

Currently, the brand name has become generic and was even used later by

Lipton, after which Tapal launched its own campaign called Asli Tapal

Danedar. In this way, the brand now represents a different product category.

Product FeaturesDanedars features add value to its product because the blend consists of

well made premium quality Kenyan BP1s (granules). Each component ofDanedar blend is carefully selected to provide a lovely looking leaf

appearance that is neat, black and grainy. Tapal well understands the taste

of the tea drinkers in the country and the reason for the success is that they

have localized the taste according to consumer needs wants and

preferences. Danedar brand is known for its distinct taste and aroma and

since there is no real substitute for it, it remains the most popular brand of

the country and also of Tapals product mix.

Product Style & DesignAs far as product style and design is concerned, Tapal Danedar is known to

be the leader in innovation and has taken the lead in a number of areas in

the tea industry. It was not only the first brand of its kind but was alsothe first one to introduce soft packaging in the country. Interestingly enough,

this soft packaging was changed in July 2008 into hard packaging to offer a

unique experience to consumers and a new dimension to the tea market and

also the brand. The style of packaging changed to accommodate Punjab,

where people prefer to display hard packs for aesthetic appeal.

Tapal Danedars style and design is also something all Pakistanis can relate

to. Laal hai toh Tapal hai is their motto which explains that red is the color

which translates our happiness, joys, relations and emotions. It stands out as

the color of Pakistani folklore and customs, weddings, festivity and

sentiments. Tapal did extensive marketing research and then came out with

this vibrant red eye-catching design. Even through its advertisements it

explicitly illustrates how the color red is symbolizes togetherness of the


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Tapal Tea Marketing

Management21

nation. From this we can easily conclude how Danedars values, features,

design and style is compatible to its customers and their lifestyle.

Product Line:

Tapal has introduced new tea concepts and developed under its product

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

throughout Pakistan. Today Tapal has become the largest, 100% Pakistani

owned Tea Company in the country. The saga of Tapal tea started with its

formulation of a unique tea blend, which was later named Tapal family

mixture, that led to the brand name of Tapal tea becoming a hot favorite,

and eventually the largest selling tea brand in Pakistan. The current product

line of Tapal consists of the following brands: Following are the products of

Tapal:

Safari Kenya Leaf

Tezdum

Tapal Danedar:

As evident by its name the blend consists of well made premium quality

Kenyan BP1s (granules). Each component of Danedar blend is carefully

selected to provide a lovely looking leaf appearance that is neat, black,

grainy and fairly even. Danedar blend is an excellent combination of lively

taste and distinct flavor of worlds best high grown teas, which produces

satisfying cup of tea for the consumers who like aromatic/flavor tea. The

most important feature of this top quality Danedar brand is that the


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Tapal Tea Marketing

Management22

characteristics of a brewed cup remain intact even after a long time. Simply,

Danedar is a powerful brand and a great value product and there is no real

substitute of it.

Tapal Family Mixture:

Family mixture is a blend of high grown Kenyan primary leaf and dust

grades, which are carefully selected for their rich cooler, distinct flavor and a

light golden appearance. The leaf and dust grades enhance a faster mixtureguaranteeing the consumer a rich flavor cup within a quick brewing time.

Only tea leaves which are low in moisture content is selected for Family

mixture in order to guarantee a long shelf life and a longer liveliness period

of the brewed tea.

Chenak Dust:

Chenak dust is an economy tea embracing high grown flavored teas which

are proportionally blended with medium grown Kenyan golden leaves. This

gives an all round cup of tea at a reasonably lower price Chenak Dust infuses

quickly and gives a strong cup of tea within a very short time. This brand is

popular with actual tea lovers who love drinking tea several times a day

because of its low price.

Tapal Mezban:

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

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


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Tapal Tea Marketing

Management23

characteristics. Only high grown Kenyan teas are used for this blend due to

their high concentration of flavor and strength. Mezban Dust has a smooth,

thick and full cup with an irresistible aroma making it a perfect cup at any

time of the day. A small quantity of Mezban Dust makes several cups of tea,

which makes it both suitable for domestic use but even more for the hot tea

shop consumers who prefer a quick and strong cup of tea.

Tapal Special Tea Bags:

The unique flavor of high grown leaves especially selected from the finest

tea gardens in the world make Tapal Special Teabags a treat at any time. The combination of an extra strong blend with the convenience of

environmental friendly metal-free tea bags has made Tapal Special an

instant hit with consumers.

Tapal Ice Tea:

The super market culture has changed consumer purchase habits and the

youth today has ample choices in front of them, even when compared to 5

years ago. Increasingly they are becoming a huge market on their own.

Tapal wants to increasingly cater to the youth market and has done so with

the launch of Tapal Ice Tea. With Tapal ice tea, Tapal has literally set a new

precedent in the market. Tapal Ice Tea is not a new product but it is a first of

its kind in Pakistan. Tapal ice tea is made for today's generation which loves

to enjoy their life at its fullest and chill out. Thirst-quenching and delicious,

Ice Tea is pure and satisfying. Made from real tea, it combines the goodness

of tea antioxidants with no preservatives, no artificial colors and only a small

percentage of sugar which is less than most regular soft drinks. Thus tapal

Ice tea is a refreshing addition to TAPALs popular product line of traditional

teas.


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Tapal Tea Marketing

Management24

Jasmine Green Tea:

Tapal Shades of Green is an aromatic combination of the finest carefully

selected tea leaves and the tantalizing freshness of natural Jasmine, Elaichi

and Lemon.

PRICING

Various factors need to be considered while pricing a product. The factors

considered by Tapal are mainly cost of the tea, demand, purchasing power of

its consumers, economic conditions (usually they promote the product

through added convenience such as 20% extra tea or 10 teabags free

ssand rarely through lowering of prices) and companys profits, not

necessarily in the same order

As Tapal specifically caters to different segments of the market its prices are

based on its effective value to customers relative to other products. Tapalfollows perceived value pricing as all its brands deliver the value that they

promise in their value proposition. Tapal has various SKUs to facilitate its

SEC C and SEC D consumers. Sachets come in up to 3 sizes and all are

priced keeping in mind the SECs spending patterns. Our contact mentioned

that majority of Tapal consumers are from middle and lower income groups

so the brand has to take care of price sensitive consumers as well. A 200gm

pack of Tapal Danedar costs as low as Rs. 80 whereas Lipton; Rs 89 and

Brooke Bond Supreme; Rs. 88. For Danedar, come categories (Tea Bag) has

to be priced accordingly.

Tapal does not implement location based pricing. Even though our contact

was adamant about his views that Tapal is popular among the lower classes

too, we feel that it does not cater to the rural areas of NWFP and Baluchistan

where firstly, people prefer dust tea and secondly, they want inexpensive tea

in the unbranded form as it gives them the chance of smelling and looking at

what they are to buy before paying for it. However, Tapal has practiced


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Tapal Tea Marketing

Management25

various market penetration strategies and intensive distribution whilst

focusing on the attributes of its tea as well as packaging.

PRODUCT SIZE PRICE (IN RS)

DANEDAR 200 grams 60

FAMILY MIXTURE 200 grams 54

DANNEDAR TEA

BAGS

100 grams 120

TAPAL TAZEDUM 400 85

VALUE DELIVERY NETWORK

Tapal imports its raw materials like tea leaves from Kenya. These raw

materials reach the Karachi port from where they are taken to the factory.

They are also growing tea leaves locally. The raw materials are then used to

manufacture the actual product: Tapal Family Mixture, Tapal Danedar, Tapal

Tez Dum, Tapal Safari Chai, Mezban Premier Dust ,Chenak Dust and Tapal

Jasmine Green Tea, Tapal Safari Kenya leaf. Most of the raw materials are

imported, and of course the packaging for the product is done in Pakistan.

Raw materials

imported Kenya and

Production of the tea

(Factory)

Wholesalers


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Tapal Tea Marketing

Management26

After the product is made, it is taken by the distributors who distribute the

final product all over Pakistan. The wholesalers take the products in large

bulks from the factory on a fixed profit margin and then sell it to other

channels like retailers of general store, super stores, beauty shops etc. who

then sell the product to final consumers.

These distributors are not permanent but when the product is about to enter

the market, they are informed about it and they themselves buy it in any

quantity they want (usually a fixed volume set by the company). As for the

retailers, it is also their wish in how much volume they would buy the

product because sometimes they already have large inventory and

sometimes they have small volume to serve consumer demands.

The profit margin between the retailers and distributors is decided amongst

themselves because usually retailers can sell the product upto 15-20% profit

margin, So some of the profit has to be shared with the distributors also.

SUGGESTED UPGRADE FOR THE VALUE DELIVERY

NETWORK

Tapal imports its raw materials from Kenya that could prove to be very risky

as in case of economic crisis or natural calamity. Such situations can cause

the orders for raw materials not to be completed on time, or may have

Retailers

Consumers


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Management27

problems in completing the orders at all. Tapal should try to build such

relations that would assist in delivering the raw materials even if there is a

crisis in the suppliers country (they must not back out in such times) or be

able to help when there is excess demand in the market and companys

stock is low.

Tapal can also think of making its own raw materials in Pakistan the long

term it can help ponds reduce its costs, so on the same time reduce its price

which can bring it closer to the competitors and in the long-run they can

even export it to other countries which is going to be strategically very

crucial in future times.

Tapal, with its strategy of importing the raw materials has to bear the

shipping costs and the taxes. Though this plan, if implemented needs a lot ofinvestment but the returns would be high. Raw materials would be available

on short period notices, foreign exchange would be saved which is spent on

paying taxes, shipping costs and to importers. Basically, the company would

be able to look after the quality of raw materials and closely monitor its costs

because fluctuating exchange rates and inability to check on raw materials

sometimes creates problems.

Although Tapal is available in more places like in villages etc easily than

other brands but it should make its distribution stronger. It should hire its

own distributors and give them incentives by not allowing them to sell thecompetitors tea products. Permanent distributors would always stay loyal

because presently Tapal and Lipton dominate the market but arrival of any

another good tea brand may compel distributors to buy more of that product

if they are given good incentives like greater profit margin.

Distributors chosen should also be such that run their channels on large and

wide scale; selling and making the product available even in remote areas.

Making the distributors part of the company is necessary and keeping

positive relations is essential part.

Therefore, any break in the value delivery chain would prove to be harmful

not only for company but for the consumers also. Consumers not getting the

product on time would compel them to ask for the competitors product and

the company would lose out its profits and customers. In between, other

channels would encounter the same problems. So these actions are

necessary in order to strengthen the value deliver chain network.


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DISTRIBUTION STRATEGY

The distribution objective of Tapal is to maximize its market coverage. To

accomplish this Tapal has a wide distribution network of 410 distributors

across Pakistan. Tapal has a wider distribution coverage in the South where

as Unilever has better distribution in the North. Therefore, Tapals main

objective is to increase their sales in the North. It ensures that it places its

tea in the same outlets as its competitors in order to maximize availability.

The distribution coverage of Tapal is as follows:

1. Karachi 14%

2. Lahore 34%

3. Islamabad 18%

4. Sukkur 22%

5. Hyderabad 12%


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Distributors:

Tapal deals only with distributors on contract basis with no other

intermediaries involved. They do not extend credits to their primary

customers and all their sales are mainly cash based.The contract comprisesof a specification of a complete volume of the market, Tapalsshare in the

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

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

network.

Tapal chooses their distributors after analyzing their complete financial

background and Public Relations. They provide the distributors with a

detailed description of the distribution network; all the costs and expenses

involved and when the distributor agrees the contract is signed. This contract

involves the condition that the distributor has to be brand loyal, pro-activeand cannot deal with other tea companies otherwise the contract will be

terminated. The contract includes a clause that describes its termination

process. Either of the two parties: Tapaland the distributor, can terminate

the contract on one month basis.


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DISTRIBUTION STRUCTURE

END USERS /APPLICATIONS OF

PRODUCTS

Interpretation:

Company

Distributor

Whole sellers Retailers

Universitie

s

Restaurant

s/Institution

s

Offices Households


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Management31

The manufacturers sell from their warehouses to their major distributors,

which sell directly to wholesalers, who either pass it on to the retailers

and then to the end user or to the end users directly.

Distributors also sell directly to large retailers and then the product is

passed onto the consumers.

This distribution trend of the industry is very similar to what Tapal follows.

Tapal also sells directly to OOH (Out of House), which comprise of

educational institutions, companies, travel & hot teashops.

Tapals outlet coverage (2005) was 75% and its market reach(2005)

was 30%.

Supply Chain

PROMOTIONAL STRATEGIES

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

stage in our view is the trickiest stage of the entire value creation process.

Vendor/Suppli

erOrder Process

Storag

eType/Market

FORECASTMANUFACTURIN

G

CUSTOMER

/TRADE

R/D industry

Invent

ory

Scheduling/ti

mingFeedback

WAREHOUSING DISTRIBUTION


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The entire effort of creating the value will go down the drain if the

communication is not done properly. There are cases when a company fails

to communicate the value to the selected target customers or even worse

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

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

techniques to communicate the value they have created for their target

customers.

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

television advertising to MASS ADVERTISING. The basic reason for the shift

is that the organization realizes that television advertising is not the same as

it used to be around 12-13 years ago. With a wide range of television

channels available it is very difficult to convince the viewer to not to changehis/her channel. But this does not means that they do not indulge in

television advertising at all. The new brand Tapal Mezban Dust is targeted

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

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

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

of hospitality with the image of the brand. Ads are shown on KTN as it is

believed that sindhi viewers do not change the channel during commercial

breaks as it is the only sindhi channel.

Mass Advertising in the form of billboards are the most common form of

advertising. The expenditure ratio of mass adverting to television advertising

is 1.5 to 1. Big billboards with high color resolution for Gulbahar (their new

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

tea. The portrayal of men wearing formal suits and having tea at restaurants

has persuaded people of the corporate sector to try the slightly expensive

green tea. Advertising on the new Fm radio channels like City Radio or FM

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

mixture.


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Public RelationsAs far as publications such as catalogues and brochures are concerned the

company does not have any such publications. They have not yet focused on

the possibility of issuing any sort of publications for improving upon publicrelations.

Personal SellingThe company has a B2B (business to business) approach as far as personal

selling is concerned. Sales rep visit hotels like Marriott and Sheraton to offer

bulk amounts at a discount rate. Through this process they are able to sell

more and this serves as an easy method for further communication of the

value which was promised primarily in ads and billboards. Face to face

communication of value is much more effective than advertising as

immediate feedback can be received which helps in ameliorating the

communication process.

Direct MarketingAgain no form of this communication is taking place at a formal level. The

company does not have a separate department. The only form of direct

marketing is done by the brand managers who readily receive any

complaints and comments about their brand through emails but do not

respond to those emails. They only look after certain complaints which have

been reported consistently.

Sales Promotion

Sales are promoted by encouraging the market segments through freesampling. The target segments are given free samples of the tea brand

which is targeted for them. For instance in Lyari and Malir there are quite a

few colleges where people of lower middle class income segment come to

study. They like tea which is high in caffeine and strong in taste so that they

can nourish their minds. Free sampling of such a brand (Tez Dam) was

carried out for almost 2 weeks. After 2 weeks a lot of students bought the

product although the product was no more for free and had no market before

the free sampling was done.

Sales ForceTapal at present has hard any notable sales force. When asked why? The

company manager responded that since Tapal makes tea. Tea is a

convenience product, such products are widely available, and customers

have frequent purchase with little shopping effort. Such products have little

customer involvement; hence a well equipped sales force is not essentially


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required. According to the manager of Tapal, making sure that the product is

available all the time is more important.

Documents

Mm Report With Final Content_1