MARKETING THEORIES AND

PRACTICES
Submitted to: Madam Ayesha Pervaiz

Group Members
Asad Ali Zahid

Fahd Naveed

Marvi Ashok

Marvi Sohail

Saad Kazim

Khurram Rehman Alvi

MBA 2K13 -A
EXECUTIVE SUMMARY

The proposed project report is the marketing plan for “Tapal Danedar Envelope
teabags”. Enveloped tea bags are introduced first time in the Pakistan’s market
by Tapal. The unique selling proposition of envelope teabags is their ability to
retain freshness and smell while providing optimum taste and aroma. It also has
the unique qualities of being staple free and microwave friendly. Tapal Danedar
envelope tea bag was introduced in the market 4 months ago with its tagline,
“King of teabags” however, Tapal, not being able to effectively create
awareness amongst target market is the major issue. Apart from that the content
of their advertisements and the promotional campaign not being in-line with the
concept of “King of teabags” is what we have focused on this report. The report
consists of the detailed marketing plan.
Table of Contents
EXECUTIVE SUMMARY .................................................................................................................................. 1
1. COMPANY INTRODUCTION AND PROBLEM IDENTIFICATION .............................................................. 4
1.1 Products ........................................................................................................................................... 4
1.2 Tapal tea bags............................................................................................................................... 4
1.3 Unique Selling Preposition (USP) ................................................................................................ 5
1.4 Problem identification ................................................................................................................. 5
1.5 Market Share .................................................................................................................................. 6
1.6 Sales .................................................................................................................................................. 6
2. SITUATION ANALYSIS ................................................................................................................................ 7
2.1 EXTERNAL ENVIRONMENT ............................................................................................................ 7
2.1.1Category Analysis ................................................................................................................... 7
2.1.2 Competitors’ Analysis ......................................................................................................... 11
2.2 INTERNAL ANALYSIS .............................................................................................................................. 18
2.2.1 Company Resources .............................................................................................................. 18
2.2.2 Current Market Strategy ........................................................................................................ 19
2.2.3 Competitive Advantage ....................................................................................................... 20
2.2.4 Other Products.......................................................................................................................... 20
3. MARKETING OPPORTUNITY ANALYSIS .................................................................................................... 21
3.1 Customer Analysis ....................................................................................................................... 21
3.1.1 Existing Customer Analysis ..................................................................................................... 21
3.1.2 Potential Customer Segments .............................................................................................. 24
4. Research Findings and Analysis............................................................................................................... 27
4.1 Primary Research Analysis ........................................................................................................ 27
4.2 Retailer Questionnaire Analysis (Aattached- exhibit B) ................................................... 37
4.3 Taste Testing .................................................................................................................................. 39
5. SUGGESTED OBJECTIVES ......................................................................................................................... 40
5.1 Financial Objectives ................................................................................................................... 40
5.2 Management/ Personnel ......................................................................................................... 41
5.3 Production ..................................................................................................................................... 41
5.4 Marketing ...................................................................................................................................... 42
 5.4.1 Product/ services ................................................................................................................. 42
5.4.2 Sales ......................................................................................................................................... 42
5.4.3 Pricing ...................................................................................................................................... 42
5.4.4 Adverting................................................................................................................................ 42
6. SUGGESTED STRATEGIES......................................................................................................................... 43
6.1 Product........................................................................................................................................... 43
6.2 Place ............................................................................................................................................... 45
6.3 Promotion ...................................................................................................................................... 46
6.4 Pricing ............................................................................................................................................. 49
6.5 People ............................................................................................................................................ 49
7. PROJECTIONS .......................................................................................................................................... 50
7.1 Anticipated costs ........................................................................................................................ 50
7.2 Expected Results ......................................................................................................................... 52
ATAR (Awareness, Trial, Availability, Repeat) Model ........................................................... 52
8. CONCLUSION ........................................................................................................................................... 54
Exhibit A - CONSUMERS QUESTIONNAIRE .................................................................................................. 55
Exhibit B - RETAILERS QUESTIONNAIRE ...................................................................................................... 58
EXHIBIT 3: PRINT AD.................................................................................................................................... 60
 1. COMPANY INTRODUCTION AND PROBLEM IDENTIFICATION

Tapal tea is an international beverage that is enjoyed by people worldwide.

Having over 62 years of experience, it has been offering some world-class brands
which are savored by people around the globe. Tapal Danedar, the flagship
brand of the company and also one of the biggest multinational brands of
Pakistan, caters to diverse income segments including single sachet users to large
households.

1.1 Products

Tapal brands include wide array of tea products, namely

 Tapal Mixture
 Tapal Tea bags
 Mezban
 Green Tea
 Tapal Special etc

Tapal tea is a nation-wide market leader. Lipton and Supreme, brands of Unilever
(also competitor of Tapal) have been the market leaders till 2009, however, now
they are considered to be the followers of Tapal.

1.2 Tapal tea bags

The product line of Tapal that we would be focusing on is the teabag category,
which includes Danedar Round Teabag and Danedar Envelope teabag. The
product of our concern for this marketing plan is the Danedar Envelope teabag
– King of teabags

The company has introduced the enveloped teabags for the first time in Pakistan.
The product has been available in the market since last 5 months and was placed
at some of the renowned departmental stores at the time of the launch.
Target Market: The product caters to a niche – “pure tea lovers” and targets the
upper middle class.

1.3 Unique Selling Preposition (USP)

i) Hermetically sealed envelope

These teabags are hermetically sealed which protects it from moisture and
oxygen transmission resulting in preserving better flavor and long lasting freshness.
The teabag in sealed envelope protects it from dust as well.

ii) Aromatic tea

The superior quality of Tapal teabags ensures strong aroma which provides a
refreshing experience to tea lovers along with superior taste

iii) Staple Free and microwave friendly

Tapal has introduced staple free teabags, which are microwave friendly. Staple
free teabags provide ease of making tea instantly in microwaves without any
electrical hazards. In addition these tea bags are completely decomposed
leaving no waste behind.

1.4 Problem identification

Danedar Envelope teabags’ major problem lies with the products positioning and
promotion.

The company has not been able to effectively create awareness amongst target
market about the USP of product. During the launch advertisement campaign
company heavily focused on the core values of company and its traditional
customer base, this suppressed the visibility of the product in the Ads

Ads were not able to differentiate the product from other products (teabags) as
a premium product. The existing campaign/ad was not supportive of the whole
concept of “king of teabags”. Moreover, the time span for which the TVC
campaign of this product was on air was very less; the advertisement was played
merely 4-5 times and was never seen again on television. No promotion
whatsoever was done apart from the TVC campaign.

These problems will basically translate into our marketing research objectives:

 To find out the extent to which consumers are aware of Tapal Envelope
teabags.
 To gauge consumers opinion regarding this particular product, through
survey or test marketing
 To propose new strategies or ways through which we can solve the
marketing problem.

1.5 Market Share

Overall Tapal is the market leader in the Tea Industry, but currently it holds only
10% of market share in the northern region in ‘black tea bags’. Although their
green tea bag share is over 80%, the aim of introducing the envelop tea bags
was to increase their share within the black tea bags in the northern region in
particular, along with urban centers such as Lahore and Karachi.

However, it has failed to capture the market it was expected to. The sales have
gone up but the envelop tea bags have cannibalized Tapal’s other black tea
bags, while only capturing a small proportion of market share from their
competitors. The growth has not matched the expectations.

1.6 Sales
Tapal leads its competitors in terms of sales volume; however, its revenues are still
less than that of Lipton (its main competitor). This is primarily due to Tapal’s
products being priced slightly below that of Lipton and their small share in more
lucrative tea bags market. Following figures show the huge discrepancy between
the tea bag sales volume of Lipton and Tapal.

Lipton Tapal

Tea bag Sales/ 3,000 tonnes 200 tonnes

Year

2. SITUATION ANALYSIS

2.1 EXTERNAL ENVIRONMENT

2.1.1Category Analysis
To account for the ever growing demand of tea, the trends that are being
followed by the supermarkets are changing. The tea and coffee section occupy
more space and have more devoted shelves and this trend seems to be growing
drastically. The competitive offerings have also stretched in both size and
numbers as the new tea brands and companies come into marketplace.
Promotional offers are also witnessed at superstores on various tea brands. Local
as well as international companies are competing to grab an increasing market
share.

Market has witnessed the tea in various forms apart from traditional tea, which
include herbal teas, specialty tea, ready to drink tea and green tea. These
products are available in varying convenient packaging’s depending upon their
shapes and sizes, which are made keeping in mind the requirement of the target
market.
The consumption of tea is not limited to supermarkets and retailing business, the
tea consumption has bypassed all barriers and is available in variety of non-
traditional outlets such as offices, convenience stores, gas marts, vending sector
and foodservice sector.

Another reason to ever growing tea demand can be attributed to strong

marketing campaigns, in which companies invest heavily. Companies follow
various marketing strategies which also include various Ads on television and
endorsement from Celebrities. This creates awareness among the consumers
which are the potential market for tea producers

Recent Scientific research has highlighted the health benefits of tea; this has
allowed the tea producers to uniquely position the tea in the market to attain
maximum benefits. Tea industry has grown at a much greater pace and is
amongst the fastest growing industry in recent years.

2.1.1a Market

Pakistan has a long tradition of tea drinking that has now become an integral part
of the country’s social life. Pakistanis consume about 170 million kilos of tea
annually. In Pakistan, tea is considered a food-staple. The annual per capita
consumption of tea in Pakistan is about 1 kg. Pakistan is the 3rd largest importer
of tea after England and Russia and the consumption is increasing day by day
with the increase in population.

Kenya is the largest exporter of black tea to Pakistan, with a 55 percent share in
that market, while China is the largest seller of green tea in Pakistan, claiming a
100 percent share. In addition, Pakistan is importing black tea from nineteen
different tea-producing countries of the world.

While understanding the potential and conservation of valuable foreign

exchange expended on imported tea, government of Pakistan created a special
corporation in 1973 and started a project called "Research and Introduction of
Tea in Pakistan”. Studies of the prospective tea growing areas were conducted
in collaboration with experts from China. Based on topology, climatic data and
soil suitable areas were identified in the country. Tea Research Station was
established with technical assistance Pakistan Agricultural Research Council
(PARC), Islamabad. The first black tea processing plant with the capacity of one
ton made tea per day was established at NTRI by PARC with the technical
assistance of Chinese Engineers during 2001.

Tea consumption in Pakistan is expected to grow at a constant rate in future. The

companies are likely to increase their reach to rural areas to enhance growth.
Strong distribution, effective advertisements are the requirement of companies to
stay competitive in the market.

2.1.1.b Political/Legal
A country’s political environment is a harbinger of a strong economy. Sadly,
Pakistan’s political environment happens to be very weak and unstable and
therefore is reflected in the growth rates of all industries. The tea industry is no
exception. According to a report of 2013, Pakistan has been the third largest
importer of tea and has been importing both black and green tea from 21
different countries and there is a market of about 170 million kg for black tea.

The Pakistan tea association claims to encourage tea imports in the country
however there has been a significant reduction in the sales tax from 16% down to
5% on import of black tea in order to stop illegal supply of tea. This will
automatically cause the prices to fall as well which would be quite a relief for
everyone. The reduction in sales taxes has also boosted the exports as per the
report. So far, the anti-dumping regulations of the WTO are the only actions that
can be enforced. Nevertheless, these are hard to prove and the real issue is
smuggling, which is already outlawed by the international community In addition
to this, quotas and trade barriers, import duties and taxes all have an effect on
this industry and hence need to be taken into consideration.

2.1.1.c Economic
As mentioned before, illegal tea importing has hurt a lot of local suppliers and has
hindered the growth of tea industry. The level of inflation is an important
consideration while making pricing decisions. Inflation has actually shown a
gradual reduction over July 2012 – January 2014. The inflation rate in Pakistan was
recorded at 8.53 percent in March of 2014. High levels of inflation cause the tax
rates to increase and make importing tea quite expensive. In such a situation,
even if the labor cost is low, a lot of money is still required for investment into
training the workforce. The global economic recession has also well played its role
in slowing down the growth of industries

2.1.1.d Social
The social factors and psychographics are changing and have a direct impact
on any business. In Pakistan tea has always been a popular beverage but there
has been an increasing need for segmentation and accurate positioning
because of the changing lifestyles and demographics. People are becoming
more and more specific and today’s customer is more aware than ever of her/his
requirements. Word of mouth has an ever increasing impact on a brand’s image
nowadays as people are finding new and faster ways to interact and exchange
opinions.

2.1.1.e Technological
The recent surge in internet usage has given birth to hundreds of thousands of
virtual communities online. User opinion is becoming a valuable and impactful
factor in decision making and hence, can make or break you. Smart marketers
find ways to use technology to the best of their advantage.

Besides the marketing side, technology has also had its impact on productions
and operations. Tapal already has state of the art equipment in place and has
an impressive production facility which helps in delivering a product that is
superior in quality.

2.1.1.f Environmental
Tea production does not have any significant environmental considerations. It is
not very detrimental to the environment as a lot of raw material being used is
biodegradable though one noticeable thing is the effect of deforestation on the
growth of tea leaves which is very alarming because if deforestation continues at
its current rate it could eliminate this important segment altogether.

2.1.2 Competitors’ Analysis

Tapal has a number of competitors, which have increased over the past number
of years with emergence of brands such as Vital tea and Tetley. However, Lipton
remains the main competitor for Tapal. In the following sections we will analyze
each of Tapal’s competitors.

2.1.2.a Lipton
Lipton, a direct competitor of Tapal, has been established for more than 100 years
now and is available in more than 100 countries due to its association with
Unilever.

Mission statement
“To meets the everyday needs ofpeople everywhere to anticipate the aspiration
of our consumers and customers to respond creatively and competitively with
products which raises the quality of life.”

Product
The portfolio of Lipton tea consists of the following

 Lipton black tea

 Lipton tea and honey
 Lipton Green tea
 Lipton herbal tea
 Lipton Iced tea
  Lipton K-Cup Pack
 Lipton black tea bags
 Lipton flavored tea

It provides a vast array of tea-based drinks ranging from ice tea soft drink, black
tea to a healthier category like green tea. Within the above mentioned tea
products, there are sub-categories as well pertaining to various flavor, aroma and
taste. Also, Lipton’s black tea captures a huge market share i.e. 90%.

Price
The products of Lipton are costly as compared to Tapal. As far as the cost is
concerned, Lipton’s one packet costs Rs. 600-700 per kg and the sales margin
they get from this category is around 200% which is why they are focusing on tea
bags a lot. (Source: Interview with Zonal Manager, Tapal and former General
Manager, Lipton, Unilever)

Place
Lipton has 650 distribution offices across Pakistan and it is available in almost all
big superstores but talking specifically about the teabags, Lipton tea bags are not
available in all outlets. Even in universities, one will find the increased usage of
Tapal tea bags. However, Lipton Yellow Label Danedar is known for its distribution
network.

Promotion
Lipton Tea uses various promotional techniques at different times of the year; it
makes use of TV ads, advertisements in magazines and also social media such as
facebook.
Strategies followed by Lipton
Currently Lipton is focusing on product development; introducing new products
time to time in order to expand its customer base, it also introduced new flavors
in Lipton iced tea as well as in honey and green tea.

Positioning of Lipton
Positioning basically relates to creating a unique image and strengthening the
position of the product/brand in the minds of consumer. The main product i.e.
Lipton Yellow Label has positioned itself in its customers mind as

 Refreshing
 Quality product
 Through slogan
 Taste
 Active
 Color

Target Market
Lipton basically targets the urban areas and has focused on upper and middle
class; Lipton Yellow Label teabags are targeted towards the upper class whereas
the jars or the soft packs are targeted towards middle class. Lipton targets those
people who are young, trendy and cosmopolitan.

Strengths and weakness

Strengths Weakness
Highly innovative Distribution weaker in some
areas like Sindh
 Quality and wide array of High price
products/brand portfolio
Strong brand image
Strong base and quality
management
Sound financial position
Increased market share in black
tea

In the Northern region and NWFP, Lipton is the leader. Lipton is ahead of Tapal in
terms of revenue (sales margin); their tea bags’ category contributes around 30-
35% of sales. Their marketing is very strong; around 50% of their ads are tea bags
focused.

It sells 1500 tons of tea bags nationally. Last year, Unilever’s sales volume was
33,000 tons out of which they sold 1500 tons of tea bags.

2.1.2.b Brooke Bond Supreme

Brooke Bond Supreme enjoyed the position as a market leader in tea category in
Pakistan for many years. However, in 2013, Tapal took over the top market share
position posing a major threat to Supreme, Lipton and other brands in tea
category. Supreme repositioned itself as a tea for health conscious people. Its
unique selling proposition is that “Supreme enhances immunity”.

Current Positioning Strategy

Tea has always been considered a product which is easy to make and for
everyone to drink in Pakistan. However, certain ideas still prevail in the country
that tea is harmful for health, darkens skin, a source of acidity and dehydrates a
person. Supreme viewed this threat as an opportunity to re-launch the brand and
position itself as a healthy tea for the whole family. Supreme is the first one to
market itself as a healthy tea in black tea market. The response from market has
been very favorable as in 2012; the company declared a growth in double figures
(around 13%).

Competitive Advantage
Supreme, just like Lipton, has a competitive advantage of marketing, due to
which the company was successfully able to re-launch the brand and it has
always helped in enhancing product visibility. One of the strengths of the brand
is its packaging. Supreme packaging is not only attractive; it is the pioneer of loose
tea packing in the country. The product is also rich in aroma and taste. If
marketed properly, it can easily take over the market leader position again.

Weaknesses
Since Unilever has two major tea brands to focus, Supreme may not get as much
funding and attention with Lipton as it would have gotten if it were the only tea
brand of the company. One of the recent problems with the brand is that the
frequency of TV advertisements has been reduced. One reason could be that
Unilever management wants to focus more on Lipton than Supreme.

Resources
Brooke Bond Supreme has the financial and expert managerial backing of
Unilever Pakistan. The brand rarely faces production problems. Financially the
company is very stable and is one of the strongest companies in the tea category.
The management of the company is very qualified and experienced. Unilever is
known to attract the best of talent as well as managerial level executives for
employment opportunities in the company.
2.1.2.c Vital Tea

Strengths
One of major strengths of Vital tea is that it is local brand. It was established in
1991, therefore it has beena player in Pakistan’s tea market for long enough to
know the dynamics of the market. Therefore, it decided position Vital tea as an
urban tea brand and come into direct competition with bigger players such as
Lipton and Tapal.

The image and the market share of Vital is growing and is therefore now
considered a competitor to Tapal. It is also offering quality tea but at a much
lower price compared to established brands.

Weaknesses
Lack of advertisement/marketing is one of the key areas where Vital tea lacks.
However, weak distribution network is probably their biggest concern as they
have not been able to reach out to its potential target market. It is also struggling
to shrug off it’s brand image of a rural brand.

Competitive Advantage:
Vital Tea has developed a state of the art facility with increased focus on quality.
They are now able to manufacture high quality tea while charging lower prices.

How is Vital Tea a threat to Tapal

Vital Tea has only recently moved into the urban market. Their tea bags can be
considered at an infancy stage. However, due to their growing market share in
the urban centers, it is likely that they would be able to penetrate the tea bag
market as well. Therefore, the do pose a threat to Tapal and can be considered
as an upcoming competitor.
2.1.2.d Alokozay
The Alokozay Group of Companies (AGC) is a leading ISO certified multinational
FMCG company with its headquarters in Dubai, UAE and having its presence in
over 40 countries with an extensive distribution network in Middle East, Central
Asia, Asia, Europe, Africa and North America. Although, it does not have formal
distribution channels in Pakistan as yet, but due to its variety of flavors, it’s gaining
consumer interest.

Current Positioning Strategy: Alokozay is being imported by local distributers in

very limited volume and is only available in major cities.

Strengths
 Various Flavors
 Premium products

Weaknesses
 Hasn’t been introduced in the Pakistani market officially.
 Not marketed/advertised

Competitive advantage
Its variety of flavors can be its competitive advantage but the company itself
hasn’t shown any intent to penetrate in to Pakistani market.

2.1.2.e Tetley
Company Resources and Introduction: Tetley is one of the brands of Tata Global
Beverages Ltd. A truly global brand, enjoyed in 70 countries and available in a
variety of formats from the drawstring tea bag to packet tea, Tetley offers
consumers an ever widening range of new and exciting teas to suit all possible
tea moments. As far as Pakistan is concerned, Tetley has kept its focus on just
black tea.

Strengths
 Strong premium tea
 Parent company backing and ease of launching other varieties of tea
Weakness
 Only focusing on black tea
 Not marketed properly

Competitive advantage
The parent company itself has a strong potential to penetrate into Pakistani
market but after the first introduction, the product hasn’t been marketed properly,
which is the reason why it hasn’t been able to grab the market share.

2.2 INTERNAL ANALYSIS

2.2.1 Company Resources

Tapal has no financial problems and they are equally as competitive as Lipton
whenever they need to deploy resources for sustainability and growth purposes.
The company faces no financial hurdles in production and promotion of its
products. It has two plants in Lahore and Karachi. Tapal has not been short of
supply for its stock over so many years. This consistency in production also
indicates how financially stable is the company.

The personnel and management are very competent. Tapal’s team all over the
country is very dedicated and committed. They have strong ethical values.
Marketing has been very effective over decades and this is the reason why Tapal
has overtaken Lipton to become the market leader in branded tea category.
However, Lipton still markets its products effectively which do not posses very high
quality. So, Tapal has to work on its marketing more by hiring the best and the
most diverse creative talent available in the country.

The company’s HR policies are very flexible. However, the compensation/ salaries
offered by Lipton to its employees are better than those offered by Tapal to its
employees. For that reason, Lipton is the first choice for applicants once they
apply for a job. Lipton has better employer brand image than any other company
in Tea segment.

2.2.2 Current Market Strategy

The targeted positioning of enveloped tea bag is that it makes the most superior
quality and strong tea, with all the freshness retained. It is marketed as the most
superior tea bag which is high in quality, aroma and freshness and is also
microwave friendly (staple free) for on the go consumers who have little or no
time to wait for water to boil in order to make tea in offices and homes. Since tea
is best made when grains or tea bags are added in the boiling water, King of Tea
bags has all the essentials to be marketed as the most superior brand in the tea
bags category. The company is charging premium price for enveloped tea bag
product.

Presently, Tapal is doing little in terms of marketing the King of Tea Bags. TV
advertisements are not played anymore. The only promotion in
Islamabad/Rawalpindi market is being done through distribution channels. The
company’s sales team is ensuring the product availability in most of the big stores.
Shelf spacing, brochures, posters and other below the line marketing tools are
used to promote the product. Extensive marketing has been put on hold by the
company. The company is not even using stalls and trials to generate awareness
about the product.

The sales team of Islamabad/Rawalpindi region expects rigorous marketing in the

near future to penetrate the brand in the market. The company aims to make this
brand the market leader in the tea bag category. The ultimate aim is to take the
regular Tapal tea bags off the market once the enveloped tea bags brands
become the market leader. Tea bag market has a lot of potential as Tapal has
only about 8% market share in this category, while Lipton has almost 90% of the
share. So, not only tea bags offer more profit margins for the company, the market
has a big gap to cover and a big player could make its place in this segment
because the market has only 3 major players, out of which only one has been
really successful.

This year, Tapal expects to sell 200 tons of tea bags while Lipton is expected to
record 2000 tons of tea bags sales nationwide. Out of the 200 tons of expected
sales, King of tea bags is expected to contribute around 63 tons, falling 27 tons
short of the 100 tons targeted sales. Vital tea bags have estimated sales of 10 tons
while Tetley anticipates 1 tons of sales volume. However, conditions are very
unfavorable for the Islamabad/Rawalpindi market as the company’s predicted
tea bags sales are only 20 tons compared to 700 tons of estimated sales of Lipton
tea bags.

2.2.3 Competitive Advantage

The success of Tapal Danedar proves the fact that the quality of company’s
product is its competitive advantage. Superior quality and taste are the key
characteristics associated with Tapal. Such a competitive advantage could
prove to be very significant if the company rebrands its enveloped tea bags and
uses the right marketing tools with high frequency in order to become the market
leader. Tapal has a good marketing team and a strong sales network that does
not make it any weaker than the multinational giants like Lipton. However, Lipton’s
marketing strategies are a little better than Tapal’s, due to which it is giving hard
time to all competitors in the tea bag market.

2.2.4 Other Products

Tapal offers nine different brands of tea under its umbrella which are Tapal
Danedar, Tezdum, Family Mixture, Danedar teabags, Mezban, Chenak, Green
Tea,Gulbahar and Tapal Special. It does not offer products other than tea.
3. MARKETING OPPORTUNITY ANALYSIS

3.1 Customer Analysis

Customers are a group of people who receives the products services or ideas
from a seller, on terms of exchange with something valuable. The customers are
essentially important for any organization to progress and prosper. They allow any
business to earn revenues. Organizations primary goal is to accomplish customer
needs. In order to achieve that organizations work heavily to develop customer
satisfaction and loyalty, to have repetitive buying and maintain current volume
of sales. However the scope of customers are not only limited to the existing
customers, it extends to prospective/ potential customers as well.

3.1.1 Existing Customer Analysis

Customer needs

Tea is amongst the fastest growing industries in the world, likewise in Pakistan the
growth of tea industry has been enormous, this has increased the customer base
many folds and is still increasing. Market survival is knowhow of the customer base
and this knowledge has been judiciously utilized by Tapal, testimony of which is
their wide variety of products targeting various market segments.

One example is, King of teabag which comes in hermetically sealed envelopes
that allows it to maintain its freshness and customer expectations of best taste and
freshness of tea. Tea bags has the added advantage of convenience for the
customer, the process of making is quick and easy. In addition staining process is
also not required which adds more value to the teabag consumption. These all
factors makes it popular amongst the working professionals who consume tea at
workplace and to all the time starved people, who don’t have time abundance
to go through entire tea making process.

Demographics and psychographics

Tapal tea is distributed in the urban areas and is targeting the working class
inclusive of males and females, above the age of 25. However the product is price
high in the market which dictates that the product is targeting customer with
above average to good buying power. The product can be used as a regular
drink at workplace and at homes as well. Tea is also served at various restaurants
and has shaped into second most common drink after water.

Market Growth
Industry is now on the maturity stage. Large players have established their brands
in the market and enjoyed huge profit margins. Now they are looking towards
product differentiation and multi segmentation because consumers are now
more taste conscious and looking for variety available to them in a tea market.

Existing marketing strategies

There is an enormous competition in the tea bag market and market is mature
with established brands available, companies have established their customer
base, in order to attract new customer and maintain existing ones multi
segmentation and high level of differentiation is required, which the company is
using, product has advantages not available with the competitors; the company
is pioneers in bringing teabags in hermetically sealed envelopes which is the USP
of the product. The marketing methods adopted for the promotion of the product
includes TVC, billboards, newspaper and radio. Tapal as a company has various
products with enormous and loyal customer base. Being Pakistani origin
company, Tapal commercials have collectively emphasized and exploited family
values, deep rooted family bond and patriotism due which they have managed
to target families and patriotic segment of Pakistani market.

Significant Opportunities
Market Dynamics: The consumption of tea in the Pakistani market is on a higher
side. Increase in shares of TAPAL TEA signifies the acceptance of its various brands
of the company in the market. This provides an opportunity to segment the
market into various segments; King of tea bag is primarily targeting working class
which is also increasing with such rapid increase in population. Tapal intends to
increase its market share with this differentiated product.

Higher Adaptability: The working class of Pakistan is time starved who responds to
new ideas are more adaptable to convenience and quality, this provides as an
opportunity for the company. This highly convenient and unique product will
attract this particular market as it meets their product requirements.

Quality focus: The tea customers are looking for taste and convenience and the
quality offered by Tapal is above par with its competitors and they have been
consistent in providing higher qualities. The packing of envelope will further
enhance the quality of tea and add convenience to it as it reach customer with
premium freshness, in addition the shelf life of the product will also increase. These
are the opportunities that Tapal will exploit while bringing the same unique and
consistent taste to its customers

Threats

Strong competitor: There is a strong competition in the teabag market, Unilever’s

brand Lipton, with its distribution network and high budgeted marketing is the
market leader. They don’t have this kind of a product at the moment, however if
they launch such a product it may become very difficult for Tapal to maintain the
market share owing to their low marketing budget as compared to Unilever.

Downward trends in growth: With an increase in inflation in Pakistan, the purchasing

power of people is decreasing and customer is further price sensitive which is a
major threat for the product. With price being set at the higher end the product
might show poor sales growth with time.

Threat of Substitutes: Due competitive environment and increasing product range

there exist an ever increasing threats of substitution, the risk of substitution is not
only limited to switching to other brands of tea but it also includes shifting of
customers to other form of beverages which include juice, soft drinks, green tea
and coffee.

3.1.2 Potential Customer Segments

Six Sigma doctrines segregate customers from others by branding them non-
customers and not-customers. Customers are those who are actively dealing with
business by purchasing goods and services in a particular period in time. On the
other hand, not-customers are those who are no longer customers or potential
customers who opt to purchase goods and services from the competition. Non-
customer classification segregates those customers who are dealing in entirely
different segment(s). Based on the classifications of customers under the Six Sigma
doctrine, we have investigated King of Teabag’s potential customer targets and
segments.

Potential Needs

The percentage of Tea consumption (not the volume) is expected to decrease in

future due to consumption of other alternate products that young consumers find
more enticing to their taste and lifestyle. Due to influx of large variety of these new
products, the potential needs of customers are also shifting accordingly, which
makes it extremely important for companies to keep track and strategize
according to the dynamics of the market. As the market loses potential buyer
base as a whole, companies could fight for a piece of the pie in the existing
customer base, or diversify its product portfolio to add products favorable to
younger customers. Similarly, more and more people are now inclined to the use
of green tea because of health benefits; consuming lesser percentage of black
tea.

Despite aforementioned shifts in consumer buying patterns, black tea still is the
cash cow for tea companies like Unilever and Tapal. Due to an increase in the
pace of life in the urban areas, people now consider tea as a convenience
product. Corporate world, where the teabags are so famous due to their
convenience, but recent observation of trends suggest that there has been an
increasing shift to other alternatives such as coffee – which provides an instant
caffeine burst that employees need to carry on with their work. These could be
considered as non-customers for the company.

Demographic/psychographic profiles

Demographic profiles of customers, not-customers and non-customers can be

clearly classified. Tapal’s teabag customers are still largely the medical class
households sector. Not-customer and non-customer classifications are more
dependent on the psychographic factors such as lifestyles, interests, attitudes and
so on. Not-customers of Tapal’s teabags are largely those potential buyers who
are at current consuming Lipton or other tea, whereas, non-customers are can
be classified the younger audience interested in ice-tea, which is targeted at
mainly children. Through marketing, the product itself can be reinforced as the
true ‘King’ of teabags due to the value addition of freshness due to its enveloped
packaging and metal free string.

Significant opportunities

In an environment of dynamic changes in tastes of people, there exist a significant

opportunity for Tapal’s teabags. Potential customers can be enticed via TVCs and
other marketing campaigns to make them realize what they are missing. The non-
customer base is gradually been turned to customers by introduction of Tapal ice
tea and other similar alternatives to cater to their special needs. Tapal envelop
tea bags can cater for the upper class and also for people who travel regularly.
These people can grab a few sachets from their homes while they travel as it is
more convenient to carry sachets rather than teabag boxes.

Major Threats

Competition: One major threat is obviously losing Tapal teabag’s own market
share in the North to the direct competition, since companies don’t operate in
isolation. The competition will be equally interested in leveraging their unique
resources to grab Tapal’s market share.

Alternatives: As discussed earlier, the dynamic variance in the tastes of people

has made it slightly difficult to identify customer for specific products, but there
exists special needs and demand from people who find other alternates or
substitutes favorable. Therefore, it may put in the foundation to a possible
cannibalization of product with the other.

Company Resource Match

Since the competition is quite high in the market, companies need to make sure
that their resources and strategies are capable of harnessing profitability from the
opportunities rising due to potential needs or customers. Potential customers and
non-customer base, therefore, are quite important to the company. Tapal’s
success in the south has mainly been due to its strong distribution and the quality
of the tea which gives a strong taste. But considering the tastes of people in the
North, it is important that company introduces a blend which gives a slightly less
strong taste. Lipton, on the other hand has been guiding people to make Different
variations (Less strong, strong, very strong) tea through its TVCs. This strategy could
be quite effective in case of Tapal as well.
4. Research Findings and Analysis

4.1 Primary Research Analysis

Survey Questionnaire from Potential customers (Attached- exhibit A)

The number of male and female respondents for the consumer questionnaire was
almost equal, with 53% of the total respondents being male and 47% of them
being female. Out of these almost half of the respondents were aged between
23-27, (i.e. young adults & adults) with the percentage equaling exactly 47%. Out
of the remaining ones, 25% consisted of teens and young adults; that is; people
aged between 18 and 22, 12% of the respondents were aged 42 and above, 10%
of the respondents were between the ages of 28 and 32 and the remaining were
between 33 and 41.

Upon analyzing the results, we found that 75% of the total respondents consist of
working professionals, so we can say that tea consumption is especially popular
amongst employed people. We also found that around 12% of the respondents
were students and 9% were housewives and the remaining was unemployed.

The survey covered almost equal proportions of people with different income
levels. As per the results, 29% of the people who responded have an income of Rs
25,001 -50,000/month; 25% of them earn over Rs.100, 000/month with 24% and 22%
of the remaining respondents earn between Rs 50,001-100,000/month &
Rs.25,000/month respectively.
Q1: What kind of tea do you usually consume?

The consumers were given an option to select either branded or unbranded tea.
Results show that 97% of them are avid consumers of branded tea. It would be
safe to deduce that working professionals in general are choosy about the kind
of tea they consume and clearly prefer branded.

Q2: Rate the following attributes from most important to least important when it
comes to selecting a particular tea brand.

The purpose of this question was to identify the comparison factors which are
more important to tea consumers. Results show that majority of the respondents
thought that the most important selection criteria to them was taste. Two factors
that were rated quite important were aroma and color, the factor rated as
important next to these two was brand name and finally, it was evident from the
results that people were somewhat indifferent when it came to packaging and
price as they have been ranked as fourth and fifth important attributes. This
means while shopping for the tea, the first thing people would look at is taste
followed by other factors.

TASTE AROMA

Q3: Which method do you use MOST frequently for making tea?

Referring to the statistics, it seems that most of the consumers use the traditional
way of brewing tea (59%) (By using loose leaf tea) and about 41% of the
respondents use tea bags.

Q4: Which brands’ teabags do you

use?

For this question, a huge chunk of the pie (63%) was taken away by Lipton tea
bags, which is the main competitor of Tapal. Tapal tea bags were ranked number
two in consumption but the
actual percentage of
consumers is quite low
(19%). As for the remaining
respondents, only 1%
uses Alokozay tea bags and the remaining either don’t use tea bags (9%) or go
for other options (7%).

Q5: Referring to the previous question, why do you prefer this particular brand'
teabags?

Majority of the respondents said that they love Lipton because of its taste, color
and aroma which are basically how they define quality. By looking at the
comments it was obvious that these people were very brand loyal, which means
Lipton has created strong brand equity in the minds of consumers.

6) Which of these products is easily available in the market?

The above table clearly

shows that “Lipton teabags” are easily available in the market i.e. in the region of
Islamabad/Rawalpindi. What we infer from consumers response is the fact that
Lipton has a better placement and distribution network as compared to other
brands such as Tapal. Consumers cannot easily find Tapal’s’ teabags in utility
stores or retail outlets; this is something which is of a serious concern for the brand
because if your product is not easily available in the market, consumers might
purchase the competitors’ product.
7) Which tea brands' advertisements on TV do you like the most?

Out of 68 respondents, more than half of them i.e. 65% were of the view that they
find Lipton’s advertisements to be more entertaining as compared to other
brands’ advertisements. On the other hand, Supreme was ranked second (15%)
and Tapal, third (9%). It is clear from this figure that as far as marketing and
promotion of one’s brands or products is concerned Lipton stays ahead of its
competitors such as Tapal and Vital tea. According to the results, as more people
like Lipton’s advertisements, this means that Lipton has been successful in
developing brand likeability among its consumers. On the other hand, Tapal
advertisements were perceived as entertaining or likeable by only 6 people out
of 68 respondents.

8) Which of the following best describes your tea usage/consumption?

 Frequent/regular tea drinker 45 67%
Occasional tea drinker 15 22%
Special tea's only (Green/herbal etc) 5 7%
Other 2 3%

In order to know consumers tea usage/consumption behavioral pattern, we

asked them to choose a description that best states their tea consumption. As the
above table shows, 67% of the respondents consumer tea on regular basis
whereas the percentage of consumer segment that is health/diet conscious is
very low i.e. 7%; who consume only green or herbal tea. Moreover, 22% of them
consume tea occasionally. Hence, we conclude that more than half of our
respondents are tea-lovers or those who drink tea regularly.

9) How do you like your tea?

Moreover, there are some consumers who choose a particular brands’ tea over
others due to its “tea color” attribute. Hence, to find out the intensity of tea color
that consumers prefer, we asked them a simple question, “How do you like your
tea?” We found out that about 50% of the consumers prefer strong tea whereas
40% of them prefer having medium color tea. The ratio of people who consume
“light” or “very strong” color tea was quiet low.
10) How often do you change your tea brand?
In order to find out about the consumers loyalty towards a particular tea brand,
we asked them the above mentioned question and the graph shows their
responses.

(Where 1=Never 2=Rarely 3=Sometimes 4=Often 5=Very Often)

44% of the respondents claimed that they rarely changed their tea brand
whereas 22% of them were of the view that they never change their brand of tea.
However, 26% of the respondents would change their tea brand sometimes. It is
evident from the stats that most of the consumers are brand loyal when it comes
to their consumption of tea.
11) Are you aware of Tapal Danedar Envelope tea bags?

Talking about “Tapal Danedar Envelope teabag”, this question was asked to
check awareness of consumers regarding this particular product. We can
conclude from the above graph that half of the sample population is aware of
the product. The percent of people who are not aware of Envelope teabags is
also somewhat close to half of the population i.e. 33%.

12) If yes, have you tried the envelope tea bags?

Yes 24 37%

No 41 63%

A follow up question was asked to see how many people, who were aware of the
envelop tea bags, did actually try it. In the previous question nearly 50% (35) of
the respondents were aware of the Envelop teabags. Out of which 24, i.e. (68.5%)
of the people had actually gone on to try the envelop tea bags.
This is nearly 70% of the people which is a not a bad return, however, it is evident
that the overall awareness needs to worked upon. If all respondents are
considered, only 37% of the people have tried the Tapal Envelop tea bags.

13. If no, what is your perception about "Tapal envelope tea bags-King of tea
bags"

As we left it to the imagination of the respondents to tell us how would they

perceive the statement ‘Tapal Envelop tea bags – King of Tea bags’, we had a
varying degree of responses. Some of the common or interesting responses are
summarized below:

 “King of tea bags’ shows it must be good quality and somehow different
from other tea bags
 It probably has a unique packaging with teabags in envelops.
 Though the name says KING, it is not going to beat Lipton
 Strong Taste possibly
 No idea

The purpose was to get an idea what people really think of the name given to
the envelop tea bags and its slogan of King of tea bags. Although some of the
people did interpret the word King as something that would be unique and
possibly better than other tea bags. However, it was evident that plenty of
respondents did not perceive it as something special.

Secondly we had a lot of Lipton fans saying it won’t be as good as Lipton

regardless if they its called King of teabags.

14. Would you prefer using a teabag which is:

1) staple-free, 2) microwave friendly and 3) sealed to protect moisture?

yes 48 - 84%

no 9 - 16%

We selected three unique features of the Tapal Envelop teabags and listed them
without mentioning that they were the features of Tapal Envelop tea bags. With
84% of the respondents replying with a ‘Yes’, we can safely conclude that these
features are certainly useful and will add value to the product.

15. What image comes to your mind when you are presented with these products?

1) Lipton 2) Tapal 3) Alokozay

This question was posed to see what image of these brands has been built in the
minds of the consumers. This would give us a good idea of where Tapal stands
against its main competitor Lipton and an emerging brand in tea bags industry,
Alokozay.

Lipton
Most people view Lipton as a premium brand with the best quality tea. They
described Lipton as ‘Best’ and ‘Taste and quality’. It clearly shows, just like quite a
few of our previous questions that Lipton has positioned itself very strongly where
people see it as the brand to buy.

Tapal
Tapal received mixed responses. Although, some respondents replied by saying
its ‘good quality tea’, ‘Strong taste’, but there were responses such as “Red color’,
‘Village’. This shows that people who have tried Tapal, like its taste and are
generally satisfied. But there seems to be an image amongst other consumers,
who see Tapal as a brand only for the lower class. This is where Tapal needs to
work on, if it wants to position it’s envelop tea bags as the ‘King of teabags’ and
market it to the middle to high class of Pakistan.

Alokozay
The responses were general ‘Not heard of it’, ‘No idea what that is’, ‘good color
but bad taste’ showed that Alokozay is still some way off from both Tapal and
Lipton in the tea bags industry. Therefore, Tapal may yet feel threatened by the
emergence of Alokozay tea bags.

4.2 Retailer Questionnaire Analysis (Aattached- exhibit B)

We circulated the questionnaire and interviewed several retailers in

Islamabad/Rawalpindi such as D-Watson, Euro Mart, Choice Mart, Shaheen
Chemist, Barsa Cash & Carry, Harolds, Metro, CSD, Cosmo etc. along with some
of the wholesalers in Karachi Company. Most of these retailers except for the
wholesalers say that they don’t keep the unbranded/open tea at their stores
since their customers demand only the branded tea. The wholesalers, on the
other hand, indicated that there is high demand for unbranded/open tea by
hotels/restaurants, although the teabags still have high demand because there
aren’t any alternatives available other than Tapal, Lipton, Alokozay and Vital,
where consumer only demand the former two.

The analysis revealed that Lipton tea bags are high in demand compared to
others. Lipton is successful in all the shops/marts we visited, where it consistently
outperformed Tapal. In terms of share, Lipton teabags almost double the sales
with that of Tapal’s black tea bag and even more or when compared to the
envelope tea bags. In contrast, Tapal’s green tea is performing well compared to
its Danedar teabags and is neck to neck with Lipton’s green teabags.

Upon enquiring regarding availability of the product, we can conclude that it is

almost available in all the stores with an exception of one or two. Some of the
stores also have sales rep of Tapal on the aisles to promote the product as well.
But despite all these efforts, Tapal hasn’t been able to increase the share of its
enveloped teabags. The consumer response is still good-poor in almost all the
stores taken as sample. It contributes less than 30% to Tapal’s black tea bag sales.

When asked regarding the increased focus on promotional offers, most of the
retailers responded that promotional offers are generally seen to have direct
correlation with the sales of Tapal’s products, though Tapal hasn’t really
introduced any promotional offers for its ‘King of teabag’, but the recent
promotional endeavors in other products, did increase the sales of those
products.

The analysis also showed that customers often have a predetermined choice of
the brand in their mind when they come to the store, although, the retailers
suggest them to buy the brands that are selling better. Lipton, being the priority
of customers, creates a viral effect and consumers often get influenced by the
others.

In addition, it was also seen that most of the retailers convinced the customers to
buy the brand that were giving them trade incentive and margin. To assume more
profits, they would go an extra mile to convince the customers to get the products
that increases their profits.
4.3 Taste Testing

Product testing was conducted at various places with an aim to ascertain the
customer preferences. A group of people who were tea consumers were given
the sample of the tea, both Lipton and Tapal. The tags from both the teabags
were removed in order to get the fair responses on basis of taste, aroma and
quality of tea.

During the course of activity, a large majority of people liked the aroma and taste
of Tapal tea, where as people thought Lipton was the stronger tea of the two
products. The trends that were extracted from the activity were mixed and did
not merit for prominence of one product.

Thus we can deduce from this that the product quality of Tapal is in comparison
to Lipton, but the market share of Lipton is far greater. It was also believed by the
customers that the tea consumption depends highly upon the preference of the
individual customer, some would like to consume strong tea, while others would
prefer contrary.

4.4 Current TV Commercial Response

After the establishment of the fact that both products are comparable, another
test was conducted, where the current Advertisement for the product was shown
to group of people and their views were recorded. The aim was to establish the
product perception in the mind of the consumers. The subject group was asked
questions like
 What is your perception about the brand?
  After watching TVC, what do you think is the target market for the product?
 Do you consider this to be a premium brand, after watching TVC?

The general and common perception of our respondents was that the ad
seemed family focused and their target were probably families. This corrodes
customer perception of target market, which limits the sales of the product.
However in true sense the product was intended to target people from upper
class and upper middle class with high purchasing power. However the Ad did
not capture the working class which is a huge market for the product
The responses recorded showed a trend that after watching TVC, customer did
not perceive that “Tapal envelop teabags” as a premium brand, they
complained that the TVC essentially lacked the royalty that was required out of
the product.

5. SUGGESTED OBJECTIVES

5.1 Financial Objectives

The suggested financial objective for the company is to increase revenues by

enhancing advertisement efforts and sales techniques. King of teabags is
expected to generate sales of 103 million (PKR) by the end of current financial
year. On the contrary Lipton tea bags expected sales are 2.5 billion (PKR). This
Gap in sales is the opportunity for the company. The company wants to increase
sales of teabags which would benefit the company in terms of increased market
share and profitability. High profit margins are associated with the teabags as
compared to packaged tea. These margins can be as much as 200 % and hence
can greatly enhance the financial strength of the company. The increasing sales
would help achieve economies of scale and also reduce the average cost and
expenses incurred by the company.
5.2 Management/ Personnel

There is a need to increase sales representative’s accountability, in order to

maintain company image and promote ethical selling procedures. It is also to be
ensured that right reward is paid to the right performance.

Increase competition and motivation amongst the sales representatives, in order

to make them achieve their targets and aim at higher targets for future.

Focus on employer branding to attract competent talent in the market. Tapal

does not focus on the acquisition of top level talents available in the market as a
result the workforce available to Tapal is not as effective as Lipton’s workforce.
Unilever is usually the first choice of the top talent available in the market. This
gives Lipton a competitive advantage of having creative and talented workforce
to outperform Tapal in marketing activities.

Mitigate the shortage of sales force supply to decrease the burden on existing
employees and to cater for decline in sales force productivity in the specific
areas. When the company has a vacant position of a sales representative in a
particular area, the workload of the vacant position is divided amongst the
existing employees. This results in increased burdens, less satisfaction and
productivity.

5.3 Production

Procure the highest quality of raw tea that is better than the existing highest
quality brand available in the market. Since this is a premium product which is
aimed at high above par taste and tea drinking experience. The product is
intended to be the best amongst the teabag category.
5.4 Marketing

5.4.1 Product/ services

Our marketing objectives’ main focus will be to promote the product as a
premium brand, keeping in view not only its tagline, “King of teabags” but
obviously, the unique features of Tapal enveloped teabags. We aim to reposition
and re-launch the product which is supportive of the whole concept of King of
teabags whereby highlighting its USP’s. Moreover, we are proposing the product
with some modifications and improvements. Introducing the sachet enveloped
teabag and improving the packaging and labeling is what we are focusing on
as far as the product is concerned.

5.4.2 Sales
The sales objective is to increase Tapal’s market share through increased sales of
this product through improved marketing efforts as well as by introducing the
better or improved version of this product. Through this objective, we aim to
surpass our competitor, Lipton in the north region.

5.4.3 Pricing
Since Tapal Danedar Envelope teabag is introduced in the market as a premium
brand due to its unique qualities and being the first sealed envelope teabag in
this market, hence our pricing strategy has to remain competitive. This is important
because lowering the price considerably to assist sales will cause the customers
to think of our product as something which does not offer anything new or is of
poor quality.

5.4.4 Adverting
Promotion and advertising objectives basically pertain to increasing awareness
of this particular product because increasing awareness about the product and
its attributes will pull a lot of customers to enveloped tea bags. Trial generation
and customer acquisition are the main aims of extensive advertising activities that
the company needs to do. The ultimate objective of heavy advertising campaign
is position the brand as the most superior quality product and to become market
leader in tea bags category.

6. SUGGESTED STRATEGIES

6.1 Product

A product has various characteristics or attributes such as size, color, design,

quality, shape, weight etc. One of the characteristics/attributes that we are
proposing to modify and improve of our product is the design, packaging and
the size factor.

Our product is “Tapal Danedar Envelope teabag” with “King of teabags” as its
tagline.

Product Name: We are proposing the name of the product as “Tapal King” with
the tagline “Royal awaits” This is because the envelope teabags are a premium
product that is differentiated from the other products, but utilizing the common
name “Tapal Danedar”, presently being used by other teabag brands of the
company. By utilizing same name, the purpose of premium positioning of the
brand would not be achieved.

Size: Currently two stock keeping units of teabags are available in the market as
far as this product is concerned; one contains 100 envelope teabags and the
other pack consists of 50 envelope teabags.

In order to cater for the “variety” and “usage” element that consumers
increasingly seek nowadays, we are suggesting that Tapal Envelope teabags
should be introduce in another size of packet which basically contains 25 teabags
apart from the large and medium size packs of teabags. The main reason for
proposing this additional small size pack is to target those customers who do not
consume teabags on a regular basis or those who fall into the category of
light/irregular users or maybe medium users. Also, considering the family lifecycle
stage, this can be an attractive option for young married couples (without
children) who might be light users of teabags. Moreover, people who are price
conscious might as well prefer this option since the price of the small pack will be
comparatively less.

Design/packaging and labeling: Secondly, we are proposing the same product

with modifications in its packaging. Presently, the packaging of Tapal Envelope
teabags packet is not very attractive and has some flaws pertaining to the
labeling. One of the most important or integral part of any package is its labeling.

The current packaging and labeling of the product is such that it is a red box
somewhat similar to the standard Tapal Danedar teabags packet. Some issues
that we identified with the labeling were that, the tagline “King of teabags” is
missing on the packaging which is a major drawback. Tapal aims at projecting
the USP of its product, Envelope teabags as King of teabags. However, the fact
that this tagline is missing on the packaging is a serious concern as far as
increasing the consumers’ awareness is concerned. Secondly, the “transparent
window” space present on the products packaging is way too small to be able
to see through the box.

The right packaging should include the tagline “King of Tea Bags” in a prominent
position on the packaging. Moreover, on the envelopes, the crown should be
printed too. The packaging color scheme and theme should be prominently
different from the normal tea bags packaging. As previously discussed, the USP of
the product was hermetically sealed envelopes of teabags, a transparent
window was made on the package in order to provide clear vision to the
customer. However this window is very small which hardly serves the
aforementioned purpose. In order to provide clear visibility the size of transparent
window should be sizeable.

6.2 Place

As far as the placement of this product is concerned, there is not much issue due
to the fact that the product is available in almost all the departmental stores of
Islamabad, with the exception of one or maximum two stores. Moreover, the shelf
space allocated to Tapal and its product is sufficient however, in a few cases we
found out that the product was not placed onto separate racks or was not given
separate shelf space.

Trade incentives: The importance of retailers in the sales process cannot be

undermined as customer approach to retailers for buying product. Retailers can
shape the buying patterns, if they are given incentives to promote and sell the
product. According to the retailers that we interviewed, they were of the view
that if they are given attractive incentives, they would put in more effort to
promote the product in store to its customers. Following types of trade incentives
can be offered to retailers
  Quantity discounts: On buying of product in bulk an incentive offered to
the retailers in form of discount, which reduces the cost per unit. These are
also known as cash discounts.
 Bonus products: On buying product in bulk, an incentive offered to the
retailers in the form of bonus product. These products can be the same
product or any other product that the company offers. In order to avail
these discounts retailers need to order a specific minimum quantity.
 Trade contest: a competition will be generated amongst the retailers or
whole sellers in an area, whereby rewarding the retailers with highest sales
figures. This will induce competition and every retailer will strive to attain
highest sales. Incentives like cash, sponsored trips and free products are
common reward of a trade contest.

This practice encourages the retailers to purchase larger quantities, which in turn
increase sales and retailers profit margins. For a product that is not purchased
frequently, quantity discounts are most appropriate method to incentivize the
retailers, as they are widely accepted by retailers.

Out of Category Display: The out of category display is when the product is
displayed at a prominent place in the store. This placement will increase the
visibility of the product which would increase the probability of selling the product.

Shelf Space: Tapal can also promote itself by having attractive shelves dedicated
to its envelope tea bag to generate point of purchase sales. It should be the first
thing that a customer notices on entering a store.

6.3 Promotion

One major issue with Tapal is ineffective advertising and in most cases, insufficient
advertising. They have not focused on creating brand awareness for their envelop
tea bags at all. When asked, many people did not even know that the product
existed. It looks like Tapal is not putting in enough effort into devising a smart
marketing strategy. The major customers of Tapal are avid users of social media
and Tapal has no presence there. By checking their page on facebook we saw
that Tapal’s last update was in 2012! After that the page has practically been
dead. In contrast, Lipton has great social media presence. It continuously keeps
in touch with its customers, keeps updated and is building long term relationships
with its customers.

Tapal should design an effective marketing campaign and should use a variety
of mediums to advertise their new product. One noticeable fact about Tapal’s
advertising is that all of its ads are family oriented. Sure, there is nothing wrong
with that but they need to understand that more than often different products
have different markets there is no one kind of advertising focus that would work
for all product markets. For Tapal’s envelope tea bags we found out after the
survey that most of the sales for teabags come from upper class and upper
middle class which is inclusive of elite working class. Therefore, they are the core
consumers and should be exposed to relevant marketing and advertisements,
something they can relate with.

Tapal should also use attractive hoardings, roadside hoardings, print and digital
ads.

Above the Line, Below the Line and Trade Promotions:

TV Commercial: The TV commercial needs to project the image of a premium

brand which is not very sophisticated, offers high quality tea which could be
made conveniently. The advertisements should be informative yet interesting for
the target market. In the initial days of re-launch, the frequency of advertising
should be very high.

Billboards: Billboards or hoarding advertising in another medium to increase

awareness about the product and promote its unique selling propositions.
Billboard advertising should be placed selectively in areas trafficked with upper
class and upper middle class people, such as Jinnah Super, Blue Area and F-
sectors of Islamabad.

Print Advertisement: Magazines such as Newsweek, Daily Times, Fashion Central,

Herald etc, could be used as effective mediums to promote enveloped tea bags
to the target market. Such magazines are trendy, information intensive, mostly
read by working class, upper class and upper middle class, and cover the formal
and casual reporting for the target market.

Social Media: Its facebook page is a great and inexpensive way to connect to
thousands of consumers and ask for feedback, opinions and encouraging
constructive criticism because it will be able to bridge the gap between what it
is offering and what the consumers demand. The social and mobile media can
be used for generating word of mouth and viral marketing/promotions. Using viral
videos, teaser ads and generating viral buzz can provide intended promotion to
the product.

Consumer Incentives: To stimulate sales, it can also have online contests like its
competitors do, such as dip and win (a lucky draw kind of thing), picture your tea
moment contests(where the contestant can take a picture that best describe
her/his special tea moment and get people to vote her/him in order to win).
Contests like these will not only draw attention to Tapal and increase the
awareness but also help in generating sales. This can also be supplemented by
the gifts and other incentives provided on sale of Tapal teabags. It is worth
mentioning that during the course of research we found that sales of products
were increased by provision of gifts.

Stalling: This type of activity is carried out at a market place or a mall where the
consumers are attracted towards the stall and offered to try/ taste the product.
As we are projecting “king of tea bags” as a premium brand the theme should
complement the brands image.
Corporate promotion: In order to increase the awareness of the products and the
values it offers to the customers, Tapal can arrange activities in large corporate
offices by providing sample tea bags. This can also be augmented by providing
brand labeled hot water dispensers at the offices. Such sampling activities can
also be targeted at hotels and restaurants to promote the brand.

6.4 Pricing

Tapal teabags are available in the two sizes in the market; the market price of
both packages is shown in the table below. It is however analyzed during the
course of this project that the price of Tapal teabags is higher. Keeping into
consideration the prices of Lipton teabags we have proposed new pricing of the
current products, plus an addition to existing packaging size.

Status Quantity Current Price Proposed Price

Existing 100 380 350
Existing 50 200 185
Proposed (New) 25 110 100

We have proposed package in a smaller size, containing 25 tea bags, priced at

Rs.100. The point in doing this is to attract customers by low pricing and offering a
more convenient pack which is fit for consumption by a single person. It’s a matter
of fact that today’s very demanding and savvy customers like to have variety
and several options so this tactic will help in generating sales.

6.5 People

As mentioned above, loss in sales might be a consequence of ineffective sales

force. Tapal needs to see which consumer segment accounts for the greatest
sales and should make them its core target market. According to the results of
the survey, as it already been mentioned above, the main buyers of tea bags
belong to the elite working class who are always on the go, seek convenience
and want to save time. Another promising segment is that of housewives who
have also shown interest in the product. Housewives are Tapal’s potential
customers because they do most of the grocery shopping; the sales team should
be properly trained and informed about the target market, so as to maintain their
subsequent selling techniques. Sales representative and promoters is the ones
directly in contact with the customers who can make an impression of the
product. Effective sales representative and promoters would result in customer
satisfaction, various techniques that can be utilized are as follows

Training: Periodic training must be given to the direct sales representatives and
store interceptors. The training should not only impart selling techniques but should
also endeavor to improve interpersonal communication skills. Mall Interceptors
should be located at stores, where they would provide product benefit
awareness to the customer and will prone them to make a purchase. However
the aforesaid objective can only be achieve when the training of interceptors is
effective in developing highlighted skills.

7. PROJECTIONS

7.1 Anticipated costs

Most of the costs would be incurred from the promotional activities. From TV
commercials to Billboards, the estimates of all the costs are mentioned below.
These are only estimates as the costs would depend on a number of factors such
as frequency, duration and length of the campaign.

TV commercial: The costs of making a new TV commercial would vary

considerably according to our locations and other related costs. After speaking
with different advertising agencies, a good commercial would cost
approximately Rs. 15 million.
However, a considerably amount will go towards the celebrity that is hired. We
would suggest, Shaan, the Pakistani actor, in a lead role for our commercial. This
would cost an additional Rs. 10 million. Therefore, Total Cost = 25 million.

Print Advertisement: At the time of re-launch we would take the front page space
of The News and Dawn. This would approximately cost us Rs. 2 million together.
For the first month after launch, we would advertise in the newspaper regularly
but only on weekends will the front page advertisements be used. Therefore, it
comes down to Rs. 8 million plus regular advertisements for a total of Rs. 10 million.

For magazines, it would cost us between Rs. 50,000 to 100,000 to advertise on one
page (other than front page). However, for a front page it would cost Rs. 150,000.
We would take both options for a number of magazines (5 approximately).
[Monthly Cost = (150,000 x 5) + (75,000 x 5) + 10 million = Rs. 11 million]

Billboards: We would be placing our advertisements on prime locations, such as

the F-sectors of Islamabad and Blue area. It would cost Rs. 500,000 for one month.
The number of billboards in Islamabad/ Rawalpindi that would be rented would
total to approximately 12. [Monthly Cost = Rs. 6,000,000]

Cost of running TV commercial: Running a 45 second TVC on one of the major

channels such a GEO or ARY will cost between 20,000- 150,000 during prime times
(7pm – 10pm).

As we would be running over 20 TVC’s per channel (8 channels), therefore, the

cost per channel for a day would approximately be 20 x 85,000 = 1,700,000.
However, this extensive marketing will gradually be trimmed for the following
months. [Monthly Cost for 8 channels = 1,700,000 x 8 x 30 = Rs. 408,000,000 i.e. Rs.
408 million].

Below the line (BTL) Activities: BTL activities include having stalls, store interception,
trial tasting etc. These activities will be outsourced and will be carried in all the
major points in both Islamabad and Rawalpindi. The combined cost for both cities
will be Rs 5 million for a month.

Strategies Cost (Rupees)

1. Making of a TVC 25 million

2. Print Advertisement 11 million

3. Billboards 6 million

4. Running of TVC on Major channels 408 million

5. BTL activities 5 million

Total Cost 455 million

The above chart shows the cost associated with the marketing activities carried
out in the very first month of re-launch of Tapal Envelop tea bags.

7.2 Expected Results

We have decided to use the ATAR model to predict some results. The data
collected from surveys was used in this model.

ATAR (Awareness, Trial, Availability, Repeat) Model

The ATAR model provides a framework to help estimate the adoption rate in each
year. The ATAR model is based on concept of ‘Diffusion of Innovation’. For a
person to become a regular purchaser of the new product they must first become
‘Aware’ that it exists. Once they have become aware of it they must make the
decision to ‘Try’ it out. In order to try it out, it must be ‘Available’ for them to
purchase. If they are happy with the trial then they may decide to adopt the
product, that is, ‘Repeat’ the purchase again.

To calculate our target number of units to be produced we look at the total

population of Islamabad and Rawalpindi region, which is approximately 2 million
and 5 million respectively. According to Pakistan’s Demographics statistics, 65%
of the population is above the age of 15. And for the age group of 15 and above,
85% are usually tea drinkers.

Therefore, 7 million x 0.65 x .85 = 3.87 million populations can be considered as tea
drinkers in Islamabad and Rawalpindi combined. However, only 3.2% of the total
tea drinkers make use of teabags. That leaves us with a total of => 3.87 x 0.032 =
123,840 people.

The per capita tea consumption is Pakistan is 1kg. As a tea bag contains 2 grams
of tea, to ensure 1 kg of sale, we need to sell 500 tea bags. Therefore, our target
market in terms of units sold should be:

123,840 x 500 = 61.92 million tea bags, Price per tea bag = Rs. 3.8

Using the information collected from our surveys we can forecast the following
percentages:

Current Percentages Forecasted Percentages

Awareness 45% 75%
Trial 60% 80%
Availability 60% 80%
Repeat 40% 60%

Therefore, the percentage of market that will be adopted following our Marketing
campaign would be:

61.92 x 0.75 x 0.80 x 0.80 x 0.60 = 17.83 million teabags. In terms of revenue it will
generate 17.83 x 3.8 = Rs. 67.75 million for Islamabad/Rawalpindi region alone.
8. CONCLUSION
After carrying out detailed primary and secondary research, we come to this
conclusion that the product, “Tapal Envelope teabag” has not been able to
capture the desired market share due to its poor promotional strategies which
accounted for reduced visibility and awareness.

Despite the fact that Tapal Envelope teabags are available at almost all
departmental stores, Tapal has been unsuccessful to generate sales from this
product. The main problem lies with the way it is marketed; envelope teabags
were initially launched as a premium brand since it is a differentiated product
which is not being offered by its competitors.

Moreover, the lesser frequency of the advertisement on media also accounted

for reduced level of awareness of the product. Some of the proposed strategies
include improved product packaging and labeling, an informative yet interesting
advertisement, roadside hoardings, increasing activity and presence on social
media platform, giving consumer incentive to stimulate sales, corporate
promotion etc.

The suggested strategies we propose, aims at improving the marketing efforts in

order to increase product visibility and develop brand likeability; this would
generate sales, improve profit margin and eventually prove to be a successful
product.
Exhibit A - CONSUMERS QUESTIONNAIRE
Gender

a. Male b. Female

Age

a. 18-22
b. 23-27
c. 28-32
d. 33-36
e. 37-41
f. 42 and above

Income

a. Rs 25,000/month
b. Rs. 25,001 – 50,000/month
c. Rs 50,001 – 100,000/month
d. More than Rs. 100,000/month

1) What kind of tea do you usually consume?

a. Branded
b. Non branded

2) What is your favorite tea brand?

a. Lipton
b. Tapal
c. Booke Bond Supreme
d. Islamabad tea
e. Other (Please specify) __________________
3) Rate the following attributes from most important to least important when it
comes to selecting a particular tea brand. (1 being least important and 5
being most important)

1 2 3 4 5
Taste
Aroma
Color
Price
Brand
name
Packaging

4) Which method do you use MOST frequently for making tea?

a. Tea bags
b. Loose leaf tea (Brewing tea the traditional way)
5) Which brands’ teabags do you use?
a. Alokozay
b. Tapal
c. Lipton
d. Other (Please specify) _______________
6) Which of these products is easily available in the market?
a. Supreme
b. Lipton tea bags
c. Tapal teabags
d. Other ________________________
7) Which tea brands’ advertisements on TV are entertaining?
a. Supreme
b. Lipton
 c. Tapal
d. Vital
e. Other _________________________
8) Are you aware of Tapal Danedar Envelope tea bags?
a. Yes
b. No
9) If yes, have you tried the envelope tea bag?
a. Yes
b. No

10) If no, what is your perception about “Tapal envelope tea bags – King of tea
bags”?

______________________________________________________________________________

11)Which of the following best describes your tea usage/consumption?

a. Frequent/Regular Tea drinker
b. Occasional Tea drinker
c. Special Tea’s only (Green/Herbal/others)
d. Don’t drink tea

12)How do you like your tea?

a. Weak
b. Medium
c. Strong
d. Very Strong

13)How often do you change your tea brand?

a. Very Often
b. Often
 c. I do not change the tea brand

14)Would you prefer using a teabag which is 1) staple-free, 2) microwave

freindly and 3) sealed to protect moisture?

15)What image comes in your mind when you are presented with these brands?
a. Lipton Teabags _____________________
b. Tapal Teabags ____________________
c. Alokozay Teabags __________________

Exhibit B - RETAILERS QUESTIONNAIRE

Store name _______________________________________

1) What kind of tea accounts for the highest sales?

a. Branded
b. Unbranded (loose tea)
2) Which brand’s tea bags are mostly purchased by consumers?
a. Lipton tea bags
b. Tapal tea bags
c. Alokozay
d. Islamabad tea
e. Vital
f. Others _________________________
3) Which branded tea bags and what category of these tea bags are most
sold at your store/most preferred by customers? (please tick the
appropriate box)
Tea brand Type of tea bags
Green tea Black tea
 Lipton
Tapal
Alokozay
Supreme

4) Do you have Tapal envelope tea bags at your store?

a. Yes
b. No.
5) If yes, what has been the response of consumers regarding Tapal
envelope tea bags in terms of sales?
a. Excellent
b. Very good
c. Good
d. Poor
6) What is the effect of price on sales of the tea? Would customer still buy if
price is higher?

___________________________________________________________________________

___________________________________________________________________________

7) What is the effect of promotional offers on sale of tea? Do promotional

offers increase sales?

___________________________________________________________________________

___________________________________________________________________________

8) How much does placement of the product affect the sales of the
product?

___________________________________________________________________________
 ___________________________________________________________________________

9) Do the customers search for the required product or buy whatsoever they
find first?

___________________________________________________________________________

EXHIBIT 3: PRINT AD