tapal report

1

A hot cup of tea at 7:30am at the breakfast table just before rushing out for the office and not forgetting to drop the kids to school; in the afternoon after a stressful morning at work; while sitting in the garden with friends at 6pm in the evening; at night with family enjoying precious moments; on a late Sunday morning in bed- Tea is an integral part of our lives. And Tapal is the favorite tea brand for people in Pakistan.

INDUSTRY BACKGROUND

In 2727 B.C Chinese Emperor Shen-Nung was boiling drinking water when a few leaves of a wild tea tree blew into the royal bowl. He discovered that the leaves imparted a delightful flavor to his water; and so it became his favoured drink.

The China tea plant was taken to Japan in about AD 800, where it was regarded as a medicine for several hundred years, until green tea was developed to become a popular beverage. Tea was introduced into England, as a gift from the British East India Company, in about AD 1660 and to rest to Europe soon thereafter.

Ceylon (Sri Lanka) emerged as a tea producer in 1867 and Java (now part of Indonesia) in 1878. Today traditional tea growing countries of China, India, Indonesia, Sri Lanka and Japan have been joined by many others in South America (Argentina, Brazil, Peru, Ecuador) and Africa (Kenya, Uganda, Tanzania, Malawi, Rwanda, and Mozambique). Now Pakistan has also entered the tea industry. In the beginning it only relied on imported tea and international based tea industry, however, with Tapal in the picture, Pakistan has entered tea production and export as well. The total tea market of Pakistan comprises of 100 million kilograms of legally imported tea plus 45 million kilograms of illegally smuggled tea, thus giving an overall market of 145 million kilograms.

Tapal is one of the first locally based tea industry. It has three main plants, two in Karachi and one in Lahore. Apart from importing tea, Tapal also produces tea on its own, gardens have been planted in Wazeershah and Mansera, that will soon start producing yield in couple of years.

COMPANY BACKGROUND

History of Tapal Tea

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 tea 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 the founder’s grandson, Aftab F. Tapal, manages

T a p a l m a k e s t e a t i m e t e r r i f i c!

2

Tapal Tea. 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 COMSATS Institute of Information Technology, Sahiwal.

BUSINESS SCOPE

The Business We are in?

We are in the market of Hot Beverages and specialize in the area of Black Tea. We desirea high level of customer satisfaction and unflinching brand loyalty through commitmentto quality and constant innovation.

Who are our Customers?

We have a diversified customer base ranging from urban to rural areas including variousinstitutions. Hence, Tapal’s target market mainly consists of young adults and adultsbelonging to high, middle and lower income groups.

ACCOMPLISHEMENTS OF TAPAL

From the time of its inception the doors of success have been open for the Tapal family. Though faced with tough competition Tapal not only very smoothly made the journey to success but also emerged as the market leader in a number of fields. Tapal has been:

• The first to introduce soft packs in the country.• The first tea company to introduce metal-free tea bags.• The first to develop an entirely new blend and category-Tapal Family Mixture (the mixture of leaf & dust).• The first to invent the highly successful brand Danedar Leaf Blend.• The first to market Kenya teas in Pakistan. • The first tea company to be awarded the ISO 9001/2000 Quality Certification

COPMANY TURNOVER & PROFITS


3

Being a private company the records of the profits and sales of the company are kept confidential. However the Tapal managers described the profits of the company to be rising every year. Tapal’s market is improving and each year brings more sales and profits for the company. The past 5 yrs have been very lucrative for the company and their sales have gone up as they have won the market of their competitors. Today their sales are maximum and Tapal are the best local brand for the tea lovers.

MARKET SHARE TRENDJust like the profits the market share is also kept confidential, but as is evident from the general market situation, the market share of the company is on the rise. Today Tapal captures a major percentage of the tea market. The company managers told us that Tapal’s market position is stronger in the southern region as compared to the north where their competitors still have the major market share. The reason being that in north they have been operating just for 11 yrs whereas in the southern region they have been established for 22-25 yrs and sell four to five times more then their competitors Lipton. Considering the sales of Lipton and Brooke bond together, Tapal comes on the second number, however if the sales of the two competitors are considered independently, Tapal’s sales are on the first number in the southern region.

History of Tapal Danedar

Tapal Danedar is the flagship brand of the company and the name has become synonymous with Tapal’s reputation as a market leader and innovator. First introduced in Pakistan in 1987, this unique blend retains its leadership position because of an extremely loyal following of tea connoisseurs across Pakistan and the globe.

The name ‘Danedar’ is evocative and suggests a blend consisting of premium quality Kenyan BP1s ‘danas’ or granules. These curled leaves are considered to be the most premium form of tea and the Danedar blend is especially created to suit the local taste buds combining a lively flavor with a rich color and a distinct aroma making it a nationwide best seller. Its quality can be judged by the fact that a cup of Danedar tea today tastes exactly the same as it did 30 years ago.

Tapal Danedar enjoys a leadership position in the Tapal portfolio by catering to diverse income segments, from single serving sachet users to large households. Every ‘dana’ of this unique blend delivers the wholesome richness of flavor and taste that has become an essential part of the Danedar experience. So whether it’s your morning pick me up or a relaxing evening cup, it is the preferred choice of millions. No wonder Tapal Danedar is one of the biggest multinational brands of Pakistan, with a growing fan base around the world.

TAPAL DANEDAR MARKET SHARE


4

Over the years Tapal has become a household name when it comes to having great tasting tea. Tapal has risen to be one of the biggest tea blending and packaging company of Pakistan with a turnover of more than PKR 8 bn with Tapal Danedar contributing to more than 42% of the total sales. Tapal Danedar is the second biggest Tea brand of Pakistan in terms of sales and Biggest in terms of Equity.

PRICING STRATEGY

The company adopts Value-based pricing as its Pricing Strategy. It knows exactly at which level the market will accept a price and comprehends how exactly its consumers ‘value its product’. Tapal Tea sells its products to resellers at a higher retail markup than Lipton Tea. Due to this factor, retailers are themselves interested more in selling Tapal Tea to consumers. This is a vital part of the company’s marketing strategy. When compared with Lipton Tea, retailers are expected to sell large quantities of Lipton Tea to compensate for the low markup. It sells most of its brands at a fixed retail price all over Pakistan. Tapal follows high-medium price strategy in which it offers high quality tea at reasonable prices. Tapal also follows a Going Rate Pricing strategy, in which it bases its price largely on competitors’ price that is Unilever. Unilever being the market leader always sets the price, and then Tapal accordingly allocates its prices, always lower than that of Unilever. Tea prices have fallen over the years which are because of reduced import duties and costs. Besides taking the competition into account, Tapal does cost plus pricing.Tapal adopts Seasonal Pricing to stabilize its earnings and sales throughout the year. This itself does not provide competitive advantage in a proper context, but helps in soothing out the earnings and sales.

DISTRIBUTION STRATEGY

The distribution objective of Tapal is to maximize its market coverage. To accomplishthis Tapal has a wide distribution network of 410 distributors across Pakistan. Tapal has awider distribution coverage in the South where as Unilever has better distribution in theNorth. Therefore, Tapal’s main objective is to increase their sales in the North. It ensuresthat it places its tea in the same outlets as its competitors in order to maximizeavailability. The distribution coverage of Tapal is as follows:1. Karachi 14%2. Lahore 34%3. Islamabad 18%4. Sukkur 22%


5

5. Hyderabad 12%

ISSUES IN CHANNEL OF DISTRIBUTION

There are a number of issues that take place in the channel of distribution everyday. These issues usually emerge in the wholesale markets and everyday the company manager has to deal with them and manage the issues effectively so that the company standard is not jeopardized.

Tapal takes makes great effort to manage and resolve these issues. Details of the issues Tapal has to face in the channel and how these issues are managed is as follows:

PRICE UNDERCUTTINGPrice undercutting is a phenomenon that usually takes place in the wholesale market. If a wholesaler is engaged in price undercutting it means that he is selling the product even below the cost price.

Tapal is very conscious of its image and ensures that none of its distributors and wholesalers indulge in price under cutting which adversely effects the image of the product and eventually the image of the company. Tapal has overcome this problem by taking a number of measures. Tapal understands that the wholesalers and retailers usually indulge in price undercutting if they are unable to sell their product and want to get rid of the excess stock in pipeline. In order to make sure that their wholesalers are never faced with such a scenario that would force them to indulge in price undercutting, Tapal managers visit the wholesale market and retail outlets to inquire the amount of stock required by them so that just the right amount of stock is supplied to them.

The wholesalers also told us that they have never had the need to do price undercutting because they always purchase the required number of product and they have this facility that if they have excess stock they can return it to the company. Also the company provides them with this opportunity that if one brand in not selling, the wholesalers and retailers can exchange its stock with the brand, which is selling in the market.

PROFIT TO TRADE

The issue about the profit to trade in the channel of distribution is that whether the channel members are getting the profits according to the ROI and their expectations or not, and if they are not getting the desired profits to trade then what are the reasons behind it.


6

The company kept the information regarding its profits confidential from us. However we inquired the wholesalers and retailers about what they feel about their profits on trade. What we learned is that the wholesalers are not very happy and they feel that the profits they get are not sufficient for their investments. The reason being that they think there is too less margin on the Tapal products and the retailers get better margins then them.

TRANSHIPMENT

Entering someone’s territory in order to meet the targets is known as transshipment. However no existence of any kind of transshipment was found in the channel of distribution of Tapal. Distributors usually get involved in transshipment when their target is not met and so they are forced to sell in other distributors territories when they are pressurized by the company to purchase next months stock. However in case of Tapal, it’s the policy at Tapal never to force the distributor to purchase if they already have stock. Rather the company assists the distributors to find out the problem in the distribution channel because of which they are not able to meet the target.

The company admitted to having faced such problems where the distributor is unable to meet its target due to government policies, financial problems, time constraints and economic situation of the country. However the company never puts any pressure on the distributor and so trans shipment doesn’t takes place.

Tapal’s customers are very loyal and since they have full support of the company they never indulge in transshipment even thought their territories are so close that two different distributors serve two shops next to each other.

All this is from the company’s point of view. However, from our visit to the market we found outthat the distributors often attempt to sell in another’s territory but the wholesalers say that they do not buy the product from them because they then have doubts that the product might not be original and also they don’t want to ruin their terms with their own distributors

PRODUCT MIX

The product mix is the set of all product lines and items that a company offers.Tapal has a single product line-TEA, within which the company offers a number of brands ranging from the high quality products to serve the upper class to reasonable products for the lower classes. Tapal offers a variety of products not only to efficiently serve its entire target


7

markets but also to gain a competitive edge over its major competitors like Lipton and BrookeBond. The highly successful mix of great teas, modern marketing, proper distribution and promotional activities has resulted in overwhelming growth for Tapal over the last 50 years.

After Tapal's unique Family Mixture became Karachi's largest selling brand, the company was encouraged to innovate further. As a result, in 1987, an entirely new category brand called Danedar was created and launched. Tapal Danedar became the country's largest selling tea brand with a loyal following. Since then a number brands have been introduced. The company follows the strategy of multi-branding in which the company introduces the same product with different brand names. Detailed descriptions of all the brands of Tapal are as follows:

Chenak Kenya Dust Mezban Super Dust Special Teabags Gulbahar Green Tea

Family Mixture Danedar Leaf Blend Safari Kenya Leaf Jasmine Green T

TAPAL BRANDS

Tapal Danedar

Pioneer of the Danedar category in Pakistan, Tapal Danedar remains a favorite around the country with its grape-nutty appearance, rich golden color and strong refreshing taste. In fact its popularity is such that other companies have launched their own versions of this blend, but Tapal's remains the original and ultimate Danedar because of its unique color, aroma and taste. Also available in double chamber tea bags, today Tapal Danedar enjoys the position of the "No.1 Tea Brand" in Pakistan


8

Tapal Family Mixture

A unique combination of high-grown Kenya leaf and dust tea, Tapal Family Mixture is the pride of Tapal. Developed in 1947, it created a completely new category in the tea market. It gives a refreshing aroma of leaf and the strong taste of dust- together in one cup. It is the blend that started the Tapal success story and many other companies followed Tapal in introducing similar blends.

Tapal Safari Chai

Tapal Safari is made from the finest Kenya leaf teas and provides extra cup of great tasting tea to the consumer. Tapal Safari chai, with a safari theme, is aimed at adventurous people

Mezban Premier Dust

A full-flavored dust that delivers high quality at a very economical price, Mezban Premier Dust is the blend for consumers who prefer tea with a strong flavor & taste. Originally developed for hot teashops, Mezban has become a favorite amongst household consumers as well. It is the most popular brand of tea in Sindh. The name of the brand itself is a characterization of the typical hospitality that is inherent to and a matter of pride for the people of Sindh.

Chenak Dust

Highly popular in Sindh, Chenak is known for its extra strong flavor, color and taste. As a result of these features and high quality of tea it is No.1 in its category.

Tapal Special Teabags

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.

Gulbahar Green TeaGreen tea lovers around Pakistan regard Gulbahar as a special treat. Perfect as an after dinner option, Gulbahar remains a perennial favorite due to its refreshing flavor.


9

Tapal Jasmine Green TeaTapal Jasmine Green Tea is the most recent addition to Tapal Brands. Tapal Jasmine Green Tea is blended to perfection using the finest tea leaves and specially selected Jasmine to give a refreshing experience of light taste and soothing aroma. It is available in metal-free tea bags specially enveloped for extra freshness

COMPANY MISSION AND OBJECTIVES

It is the mission of the company to excel in quality. "Never compromise on quality" has been the motto at Tapal since the very beginning. This commitment to quality has resulted in a high level of customer satisfaction and unflinching brand loyalty.

Proving its consumers the best quality being the mission of the company, the prime objective of Tapal is to master in Tea blending and tasting. Tapal is a research-oriented company. In order to meet its objectives, Tapal subscribes to and conducts various researches in the area of retail audits, consumer behavior, media planning and product development. This research is used for continuous improvement in product quality, brand positioning and communication according to the changing requirements of the consumers.

Consistency and quality are the two keystones of Tapal's production policy, and the Quality Control Department at Tapal ensures that flavor and freshness is never compromised. It is the mission of the company to provide the people of Pakistan the highest quality products and improve their lives in whatever little way possible, and keeping this mission in mind the company objectives are set accordingly.

Brand IDENTITY

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 world’s best high grown teas, which produces satisfying cup of tea for the consumers who like aromatic/flavor tea.


10

The most important feature of this top quality Danedar brand is that the 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 IMAGE AND POSITIONING

Tapal focuses on its local market more as compared to its international target market, the reason being, that it is a locally based private company that has great growth capacity with in its local market. For this purpose, Tapal has come up with innovative marketing strategies that have helped create product awareness and brand loyalty.Pioneer of the Danedar category in Pakistan, Tapal's Danedar remains a firm favorite around the country with its grape-nutty appearance, rich golden color and a strong refreshing taste. In fact its popularity is such that several multinationals have launched their own versions, but Tapal remains the original and ultimate Danedar because of its unique color, aroma and taste. Color and a strong refreshing taste are its most significant attributes.

Innovative methods like modern technology and promotion schemes are used for this purpose; from the very beginning, Tapal realized the importance of importing innovative technologies such as the soft packing process. A fully automatic facility was established where soft packs were produced for the first time in Pakistan. At this facility tea is blended and packed in hygienic conditions, untouched by human hands whilst the soft packing technology keeps tea fresh and packaging costs economical. The success of these soft packs has been such that other tea companies have also followed Tapal's lead and launched some of their brands in soft packaging.Tapal's experienced "high voltage" marketing team has contributed over the years to the phenomenal growth of the brands and the company.

With the view that the younger generation will be Tapal's future customers, Tapal is actively supporting the fast developing music industry in Pakistan. It has sponsored the leading singers in Pakistan and actively participates in music concerts. For example, Fakhir Ahmed, one of the most famous pop singers of Pakistan, especially popular amongst the youth, is one of the officially endorsed artists of Tapal.

Tapal has strategically positioned all its brands so that they have a separate identity of their own. Catchy slogans like “JAYSAY CHAHO JEEO” for Tapal Danedar, focusing on the free and radiant spirits of the youth. Which has been tagged along with “ZINDAGI MAIN BHARO NAYA RANG”.“RANG MAIN RANG…DAM MAIN DAM” is the slogan for Family Mixture, which positions on the colors and essanse of life. Then comes “MOOD BANAYE DIL GARMAYE” for Jasmine Green tea, which focuses on the different moods of life and how they can be enhanced with the tea.


11

The series in the new clutter breaking thematic campaign from Tapal Danedar's Brand Team, where the current positioning of the brand i.e. "Har Lamhay Ke chah" is reinforced and carried forward by making the claim Tapal Danedar "Har Mizaaj Sey aashna."

The first film that took Tapal Danedar onto this positioning platform was the famous "Cups Campaign" where a claim saying 'nobody understands the tea drinking tradition of Pakistan better than Tapal Danedar'. This current TVC enhances this positioning and takes it a step forward by claiming that in addition to knowing the Tea Drinking Culture, Tapal Danedar also fullly understands the varying moods of its millions of consumers, and offers the perfectly satisfying cup of tea that completes every moment and every emotion.

SALES AND DISTRIBUTION OBJECTIVES

Tapal is a market follower in the tea industry, accordingly its objectives focuses on increasing market share and winning over the competition. Some of the prominent objectives are:

MARKET PENETRATION

Since the local market of Tapal is already established, the main objective of the company now is to improve their market share by market penetration, i.e., increasing the usage rate and winning the competitors customers.

Mainly being a local company Tapal focuses on its local position more. Market penetration is attained by extending distribution to all areas including such far and remote that even the police don’t go there. Due to this, the company has to face several difficulties such as security hazards and one of the main objectives of the company is to serve all the areas far and wide efficiently and manage the problems faced in the market penetration.

Nature of Relationship of Tapal Danedar with Tapal

Tapal Danedar is known to be the leader in innovation and has taken the lead in a number of areas in the tea industry. The performance of tapal’s product can be gauged from the fact that they are independent and established brand bringing in revenues for the company from their respective markets. After tapal’s unique family mixture the company was encouraged to innovate further. As a result an entirely new category of brand ‘Danedar ‘was created and launched. Tapal became the country’s largest selling brand which shows that tapal has been successful in creating strong brand image amongst its customers. So the relationship between tapal and tapal Danedar is that Tapal is the main selling brand of the Tapal tea company, which captures 65% of market


12

share in southern region. Which shows that how much stronger the brand is and how much company trust it. Tapal Tea Company and Tapal enjoys strong relationship.

Driver’s Role

Tapal tea has the driver’s role here and Tapal Danedar is the follower because in every single product and brand tapal tea has used his main name ‘Tapal’. Tapal is their key selling name and they have associated their every product with this name. Tapal has built a strong customer relationship with its customers and their product identity also resonate with customers, so customer know and have strong affiliation with the name ‘Tapal’, so the company have made its strategy to put ‘Tapal’ name on every single product.

Endorser

Tapal is the endorser and Tapal Danedar is the Endorsee. Tapal has endorsed its every single product because the name Tapal resonates with customer and is well known to them so Tapal Tea has endorsed all of its brand.

Brand Architecture

Tapal Danedar is in Tea industry since 1947, it had structured it self a strong competitor for other tea manufactures in market like Lipton and Soya supreme. It not only Created and communicated its brand identity clearly to its customers was also able to send a clear message of advertisement what it is offering. It had created effective powerful brand in its product line which customer can differentiate from bands inside organization but also around the market. Every brand is effectively been communicated to the customer Tapal has also created synergy among its brands which would help one out of other to the offering of the company. Through its advertisement it gave a clear message what a brand or product is about and to which target market it is offered. Tapal has given leverage to all of its brand, which increased brand equity. Tapal is continuous in doing innovation and trying to bring in new flavors and tastes to its customers.

Brand Portfolio:

Sub brands:

Tapal has no of sub brands which are offered to the market. Some of them are as follow

Tapal Danedar Tapal Mezbaan Tapal Tezdum


13

Tapal Family Mixture Tapal chenak Tapal Gulbahaar Tapal Safari Tapal Ice tea

Brand Port folio Graphics:

Logo Tapal has a simple Logo Name on the company name as ‘Tapal’. All the brands are associated with this name.

Package It was not only the first brand of its kind but was also the 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.

Product Design Tapal Danedar’s 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. Tapal did extensive marketing research and then came out with this vibrant red eye-catching design.

SWOT ANALYSIS

The internal and external situation analysis can produce a large amount of information, much of which may not be highly relevant. The SWOT analysis can serve as an interpretative filter to reduce the information to a manageable quantity of key issues. The SWOT analysis classifies the internal aspects of the company as strengths or weaknesses and the external situational factors as opportunities or threats. Strengths can serve as a foundation for building a competitive advantage, and weaknesses may hinder it. By understanding these four aspects of its situation, a firm can better leverage its strengths, correct its weaknesses, capitalize on golden opportunities, and deter potentially devastating threats.

Strengths

The 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.

Opportunities


14

One of the greatest opportunity that Tapal has its huge market which is increasing as the population is increasing. Tea has become a staple product in Pakistan which cannot be denied at 20 to 60 year of age. Per capita consumption is almost 1kg according to a recent research in Pakistan.

Weaknesses

No 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.

Threats

One of the major threats that Tapal has it is its area of the market which is 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.

COMPETITION

Tapal Danedar’s major competitors in the branded category include Unilever (Lipton and Supreme), then Vital Tea, Tetley Tea, Eastern tea and other brands. The unbranded market as awhile is also a competitor for Tapal. Among these the major competitor is Unilever with Lipton and Supreme Tea as its offerings. To compete with it, Tapal Danedar offers same quality at a lower price. Also many consumers prefer Tapal’s tea s taste as it has a strong masala or taste´ while Lipton Yellow Label is generally considered not a very strong tea. To cater to the Pakistani market which prefers tea strong, Tapal Danedar has its own strong flavour. Also it competes with Lipton in other categories of tea, for example in the green tea or Tapal Family mixture. Tapal and Lipton previously had launched similar offerings in their Danedar; however, Tapal’s Danedar was registered by the Government while Lipton’s was not. Tapal’s Danedar is the main cash cow for the company while Lipton’s Yellow Label fulfils that criterion for its company. Besides that they have the same packaging, foil, hard packaging and same quality. Also Unilever is a multinational company while Tapal has national roots. The unbranded market occupying 40% of the market share becomes a major competitor for Tapal. The tea and other goods are smuggled through the border from Afghanistan. Most of the population of Pakistan hails from rural areas and they are the ones who buy the unbranded tea. So to cater to that market, Tapal has developed regional brands which cater to Sections C, D, E and F classes. Also it has different variants, for example 5 g, 10 g, etc to cater to every market. Not to mention that government regulations and awareness


15

through media of how harmful loose tea could be because it contains contamination has also led to a decrease in loose or unbranded teas consumption

Tapal Tea 100 gm 200 gm 1000 gm

Tapal Danedar Rs 52/- Rs 99/- Rs 470/-

Tapal Family Mixture Rs 50/- Rs 95/- Rs 440/-

Competitor Price 100 gm 200 gm 1000 gm

Lipton Rs 57/- Rs 105/- Rs 530/-

Supreme Rs 52/- Rs 99/- Rs 450/-

BCG MATRIX


16

STARS Lipton and Tapal have been placed as stars because they not only have higher market shares as compared to the rest of the brands but also because their business growth rate is higher and they believe in continuously investing in their businesses for expansion purposes.

CASH COW Supreme is a cash cow because business growth wise, its progress is pretty slow but as far as the market share is concerned, it absolutely has a greater market share than Tetley or Vital for that matter; but at the same time its share is not comparable to that of Tapal or Lipton. Therefore the option for them to invest further in the business is also limited hence limiting their growth opportunities

QUESTION MARKSTetley and Vital, both have the worst cash nightmares because they have the least market share with demand still existing which could be met. The low market share is an issue at their end and if they do not work on improving it they might end up in the dog category in the near future. It is important for them to further diversify their businesses if they want to sustain themselves in the current market scenario.

CUSTOMER ANALYSIS

Tapal has utilized the local channel of distribution. Which not only help them in reducing the fixed investment but also give something in return to society in term of employment. The demand of Tapal in urban areas is more than rural areas, sales of Tapal increase in winter seasons. Changing life style bought innovation to the market and Tapal is well aware of this changes.


17

TARGET MARKETING

The target market is that they are defining for our brand Tapal Danedar is the A class and B+ class. The target of this brand is the urban areas of the country and along with the use in offices and business class as well. Tapal Danedar is basically the one to one competitor against Lipton yellow label. The class and geographical location we can say is almost same for both the brands.

Tapal Danedar is basically targeting urban people.

Danedar brand has the characteristics to remain intact even after a long time. So it targets customers who want to fresh for longer time.

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

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

The target audience will be primarily working class starting from the age of 20 to round about 55 years of age.

Tapal Brand Building Strategies

DISTINCTIVE CAPABILITIES

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

Organizational Processes

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

Skills and Accumulated knowledge

Tapal danedar has developed impressive skills in operating its business model at veryhigh quality accumulated knowledge has guided management improving business designovertime


18

Coordination of Activities

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

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

company.

Values at Tapal

As far as creativity is concerned, Tapal’s products have always excelled within their range of competitors and they have been able to sustain quite a lot of loyal customers.

Trust in each other, Outstanding quality, Passion for creativity, Leadership, Together everyone achieves more

A Commitment to Quality

"Never compromise on quality" has been the motto at Tapal since the very beginning. This commitment to quality has resulted in a high level of customer satisfaction.

Tapal’s Quality Policy

The Management and the employees of Tapal Tea (Pvt.) Ltd. are committed:To produce products that meet the customer's requirements & expectations.Leader in Innovation: Always on the move, Tapal Tea is honored to have taken the lead in a number of areas in the tea industry. Tapal has been:

The first to introduce soft packs in the country The first tea company to introduce metal-free tea bags. The first to invent the highly successful brand Danedar Leaf Blend. The first to market Kenya teas in Pakistan.

Their commitment to quality and leadership skills can hence be judged from the analysis presented above; Tapal is no doubt a national brand which has been able to come up to the expectations of not only the consumers but the management as well.

Unique Selling Proposition

The main reason behind Tapal’s success is that it has localized its taste. It manufactures its product according to the taste and requirements of the market it is

catering.


19

Another reason behind Tapal’s success in catching the hearts of the consumers is that, it has always been close to them. This has been possible because of its strong Brand Activation Activities. These activities have added a new dimension to their marketing activities making them more attractive, exciting and interactive as possible.

These activities also provide the consumer with a 360-degree product experience, which not only helps in educating the consumer but also engages them to the brand. These activities cover Outdoor Billboards, Event Marketing, Road Shows i.e. floats, mobile kitchens etc, Rural Development Programs, Weekly Bazaars, and Merchandizing of the products.

Presence of Tapal TAPAL has 5 main warehouses in Pakistan which are located in the following cities.

1. KARACHI 2. HYDERABAD3. SUKKUR4. MULTAN5. RAIWINDI

This is also one of their strengths that they have a strong distribution channels. Tapal Tea Pakistan: Southern Region: Karachi, Hyderabad, Sukkar Northern Region: Lahore, Islamabad, Multan

Tapal Brand Building Strategies

Sales Promotional Strategies

Sales are promoted by encouraging the market segments through free sampling The company is running different sales promotional schemes at different times of the

year depending on the sales of the company..

Promotion


20

Tapal has been active in advertising for each of its products in the product-line. It has been using both BTL(below the line) and ATL( above the line) for the purpose of

promotion. Through BTL Tapal is focusing on display racks,sign boards etc. mainly placed to

different retailers for heavy promotion against their competitors. The specific term used by Tapal is the Modern Trade so that they have an eye contact of

the product with the customer. In this they are using shelves to display their product in big stores like Makro and Metro.

Through ATL tapal is focusing on broadcast and print media promotion by placing ads on TV and placing newspapers ads as well.

Communication

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. Tapal has used the following tools and techniques to communicate the value they have created for their target customers.

Electronic Media

Tapal rely heavily upon print media but this trend is changing now because of customer’s life style. Right now, company is doing intensive advertising through networks. In their advertisement they hire the services of renowned celebrities.

Advertising

As far as Advertising is concerned, the Tapal has shifted away from Television advertising to “MASS ADVERTISING Mass Advertising in the form of billboards are the most common form of advertising. 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.


21

Tapal and Music

Tapal is actively supporting the fast developing music industry in Pakistan. It has sponsored the leading singers in Pakistan and actively participates in music

concerts.

Public Relations

As far as publications such as catalogues and brochures are concerned the company does not have any such publications. They have not yet focused on the possibility of issuing any sort of publications for improving upon public relations.

Personal Selling

The Company has a B2B (business to business) approach as far as personal selling is concerned.

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

TAPAL’S ADVERTISING STRATEGY

TARGET CONSUMERThe target consumer of TapalDanedar is

Male and Female who are 18 plus and coming from all sectors of Pakistan Families that come under the income range of more than 5000 rupees.

PRODUCT CONCEPTTapal focuses togetherness through their advertising. It’s a family oriented product that shows how caring for each other brings happiness into their lives. It highly emphasis on family values and bondingThey want to reach out to middle or upper middle class of Pakistan.


22

COMMUNICATION MEDIA The communication medium for TapalDanedar is Print-

Audio—FM and AM radio.

Electronic

Outdoor advertising—Billboards, advertisements on public transportation (cabs, buses).

Tapal Danedar has their focus more on electronic which is roughly 80% and print which is 20%. TV- 80% Radio-11% Print -9%

ADVERTISING MESSAGE Tapal Danedar has shown their advertisement that had more visual arts rather than copy.They have their slogan” HAR LAMHA KI CHAH” which is shown every time in the form of copy


23

Tapal has very simple advertisement that can be absorbed easily so their visual arts show a lot of clarity.

ADVERTISING BUDGET The advertising budget ofTapalDanedar is approcximately 80-90 Million.

RECOMMENDATIONS

The company is already functioning very well and the management has not left out any loops holes. However a few recommendations that can help further improve the company performance are as follows:

Clarity of message should also be there in advertisement of other brands as well about target audience, other than its just tea.

Lack of resources as compare to its major competitor (Levers). Instead of Importing they may have their own tea plantation They company can target the customers of branded tea by emphazing the product quality and

and good will. Tapal tea should also extensively Promote their other brand as well in this tough hard

competition they can’t depend on only one brand. Tapal Tea should also try to find out other new and different markets. Tapal needs to avoid the mix of image of some of the brands through advertisement e.g give

the Tea bags the different distinguished image and association because they are normally used in offices and educational institutes not in family.


24

http://www.enotes.com/small-business-encyclopedia/advertising-budget

Train their sales person and make teams that would persuade customer and distributors about the quality of tea.

The company should adopt a more lenient policy and should extend credit terms also to their distributors. This does not mean that the company should totally give the distributors the liberty of the credit but the company’s credit policy should be strict. Tapal only deals with its distributors on cash basis that sometimes leads to dissatisfaction. If they extend credits to them at a time when their distributors are facing financial problems, the customers will be more satisfied with the company.

Tapal does not give any kind of compensations to its distributors. This can adversely affect their sales if the distributor is unable to finance the expenses. Therefore to extend cooperation to the distributor it is recommended that the company should offer a certain percentage of the sales as compensation to them.

For the sake of sale promotions, Tapal can come up with innovative selling techniques such as establishing small tea stands that offer ready made tea for customers at hand, at busy and important public places like the Defense commercial areas, official areas like I.I. Chundigar, and shopping areas like The Gulf, Park Towers, and the Forum etc.

CONCLUSION

From our research we can conclude that Tapal has been functioning at its optimum level. The management of its sales is very efficient and the company is accomplishing its objectives successfully.

Tapal has not overlooked any areas that require attention and has paid great head to issues that are important from functional and operational point of views.

Tapal is already an active market follower of the Pakistan tea industry and with the pace of its growth; it is also proving to be a threatening one to the market leaders..


25

Documents

tapal report