IMPORT OF

DECAFFEINATED TEA
HOME COUNTRY: Kenya
HOST COUNTRY: Pakistan
 Presentation By:
• M. Khubaib Khan Shirwani
ID # 043432-031
• Muhammad Ali
ID # 053732-073
• Hina Qamar
ID # 074132-149
 Introduction
• History of tea
• Manufacturing of tea
• Types of tea
 Health Related Facts of
Decaffeinated Tea
• Contains 1/3 less caffeine than coffee or cola
• Helps reduce fatigue
• Maintains mental alertness
• Stabilizes fluid levels
• Is fat free and calorie free
• The antioxidant in tea helps in preventing cancers of
the mouth, stomach, pancreas, lungs, esophagus,
colon, breast and prostate.
• The antioxidants in a single cup of tea equal those in
one serving of vegetables. Tea’s flavanoids prevent
heart disease by
– Reducing Blood clotting
– Lowering Blood pressure
– Lowering Cholesterol
OVERVIEW OF TEA
INDUSTRY
Worldwide
Worldwide
Worldwide
 Tea Industry of India
• The total turnover of the tea industry is
around Rs. 10,000 crores.
• Since independence tea production has
grown over 250%, while land area has just
grown by 40%.
• There has been a considerable increase in
export too in the past few years. Total net
foreign exchange earned per annum is
around Rs. 1847 crores.
• The labour intensive tea industry directly
employs over 1.1 million workers and
generates income for another 10 million
 Tea Industry of Bangladesh
• World tea production has been
showing an annual increment of 3 %
while in Bangladesh the production
has increased by 1.84 % and
contributes 1.37 in export in the
word tea trade and earns near about
1775 million Taka (Taka 63 = USD
1.00) every year.
 Tea Industry of Canada
• In 2006, the tea market in Canada was worth
approximately $319 million.
• Canadians drink more than seven billion cups of tea
each year.
• In 2005, the per capita consumption of tea in Canada
was 69.98 litres (280 cups) per Canadian, an increase
of 43 percent from 1996 when it was 48.9 litres.
• 74% of Canadians associate tea - both black and
specialty teas - with health benefits
• 77% of Canadians consume tea and 50% are regular
tea drinkers
• The dramatic growth in Specialty is fuelled primarily
by Green Tea which increased almost 20% versus last
year.
• In 2007, the Canadian tea market was worth about
 Tea Industry of Kenya
• Kenya is the third largest producer of black tea after
India and Sri Lanka.
• In 2001, the tea industry turnover was US$ 474 million
of which US$ 437 million occurred from export
earnings with the balance being the value of locally
sold tea.
• The combined revenue from coffee and tea of KShs
39,291 million contributed 29% to the total revenue
generated from exports in 2003.
• During year 2003, beverage crops (coffee, tea and
sugar) realized a total revenue of KShs 58.36 billion
compared to KShs 60.21 billion the previous year.
• The main buyers of Kenyan tea are Pakistan who
import about 23% of the total exports followed by the
United Kingdom, Egypt and Yemen.
 Tea Industry of Pakistan
• Per capita tea consumption of Pakistan is 1 kg per
annum.
• Demand of 140 million kg annually.
• The tea market is divided into two categories,:
– Packet tea (60%)
– Loose tea (40%)
• Pakistan imports about 100 million kg of tea annually
• Tea imports from Kenya make up about 65% of the
total imports
• Importers of tea in Pakistan have to bear a cumulative
impact of 35% as duties and taxes on official imports.
On the other hand, the cost incurred by smugglers is
between 10 – 12%.
•  Official tea imports on 2006-2007 stood at 114,000
tons (worth $214m) as compared to 127,000 tons
TEA INDUSTRY OF
PAKISTAN
 ENVIRONMENTAL ANALYSIS
• Competitive Forces:
– Brooke Bond Supreme
– Brooke Bond A-1 Karak Chai
– Tetley Tea 
– Lipton Tea
– Tapal Tea
– Alokozay Tea
 Structure of Industry
• Fragmented
• Consolidated
 ECONOMIC ANALYSIS
• Per-capita income of $878 in 2006-2007, which increased to $1,027 by May
2008
• CPI based inflation was projected at 10.5% in 2007-2008.
• GDP for the year 2006-2007 was $94.9 billion, which fell to $89.5 billion in
2007-2008.
• Investment showed a 13% growth in 2007-2008.
• Pakistan imported tea worth $84 million from different parts of the world.
• Overall, Pakistan’s imports
– $30.54 billion (2006-2007)
– $39.96 billion (2007-2008)
• Exports of Pakistan
– $17.01 billion (2006-2007)
– $19.22 billion. (2007-2008)
• Pakistan GDP showed a decreasing trend to 5.8% (2007-2008) from 7% (2006-
2007)
• Inflation increased from 7.9% (2006-2007) to 10.3% (2007-2008).
•  Foreign investment has shown negative performance by moving from $8,417
billion (2006-2007) to $5,193 (2007-2008)
• Earning of the people of Pakistan, only 21.03% of the total population has a
Legal and Regulatory Forces
 Technological Forces
• Manufacturing machines
technicalities
• Distribution facilities, i.e.
transportation facilities
• Integration of the company regarding
its operations is also an important
technological factor.
 Socio Cultural Forces
• Pakistan is one of the largest importers and
consumers of tea
• Tea consumption shows an increasing trend
in almost all parts of the country
• General attitude of the customers as well as
the consumers of tea is very positive
• Both black and green teas are liked by the
consumers in Pakistan.  
• There are some concerns of
environmentalism in public sector and niche
segment of this society.
• Every age segment in Pakistan usually are
very much adherent to tea.
James Finlays Kenya Ltd.
 Products and Services
• Tea estates in Sri Lanka, Kenya and Uganda, growing
and manufacturing over 45m kilos of black and green
teas every year
• Providing sourcing and blending services to a global
client base through our tea trading offices in the UK,
Kenya, Dubai, Malawi, Vietnam and the USA
• UK decaffeination facilities, creating a range of
decaffeinated products for customers in Europe and
the USA
• Sourcing and packaging tea and coffee for large retail
multiples in Japan and Europe from our state of the art
facilities in the UK and Sri Lanka
• Growing over 100 million stems of cut flowers,
principally roses, carnations and lilies, from our three
flower farms in Kenya and our new farm in China and
then supplying them to markets in Europe, the USA
• Company History
• Finlays Today
• Corporate Philosophy:
– To use all land in the most productive and responsible
manner
– To maintain and improve the fertility of the soil
– Through the intelligent use of research services, and
those of the local research institutes, to keep at the very
top of technological improvement in the fields
– To maintain the highest standards of housekeeping in
our factories
– To make teas which will achieve the best prices on the
international markets
– To involve employees at all levels in decision-making so
that they develop a real interest in the Company’s
objectives and prosperity
 Research
• Secondary Data Collection
• Primary Data Collection
– Interview
• Retailer
• Distributor
 Key Success Factors
• High demand of such blended tea in the locality.
• Accelerated sales growth experienced in the
category of sachet packs.
• Extensive distribution channel for the sachet
packs focusing even on small kiosks in the
urban and rural areas.
• The product would be focusing the price
conscious segment of the market by providing
similar and better quality branded product at
lesser price.
• Emphasizing on excellent service to the other
wholesalers.
• Adapting to the rapid social and economic
changes.
Segment
 Target Market 1
• Health conscious people
• Very conscious regarding addiction of
tea
• Focus towards niche product
marketing
• Family oriented people
• Members of the upper class
• Ready to pay the ‘extra price’ in
order to get a health friendly
 Target Market 2
• 30% of the tea consuming population
• Middle class
• Quite health conscious
• Price conscious
• Job-oriented and have a fixed monthly
income
• Cost-benefit analysis is performed by
them in every purchase
• Corporate sector with their preference
being usage of teabags of
 Need Analysis
• Quite health conscious people
• Don’t wish to be addictive to tea
• Avoid the consumption due to negative
impacts.
• Harmful side effects of caffeine
– Addictive drug
– Can result in harmful side effects
• Increased likelihood of sleeping disorders
• Kidney damage,
• Soak up free calcium in the body
 Marketing Objectives
• To have their products in arm’s reach
whenever and wherever consumers
want them
• Whether they are new or brand loyal
consumers, each consumer must be
able to find Finlays products in order to
buy them
• Aims at growing its current market by
expanding brand and flavor distribution;
and by growing consumer awareness
and repeat purchases
• Aims to explore new markets by
PERFORMANCE ANALYSIS
COMPETITORS PROFILE
MATRIX
SWOT Analysis
 Strengths
• Strong history of over 250 years
• Relationship with customers and communities
• Tea estates in Kenya, Uganda, and Sri Lanka
• Expertise in sourcing, blending and packing
• Social services, like awareness campaigns regarding
HIV/AIDS, etc.
• Decaffeinated tea suppliers and manufacturers
• Extensive market knowledge
• High service levels
• Delivery of product on standard, on time and in
full(logistics)
• Team of expert blenders and tasters to ensure quality
• World’s largest supplier of quality tea extracts
• Ongoing investment on research and development
 Weaknesses
• Dual focus due to B2B and B2C
supplies of tea extracts and tea
• Manufacturing and supplying only
black and green tea among all types
of tea
• Limited customers due to only one
type of tea
• No customers of dust tea as they are
dealing only in leaf tea
• Lack of clarity in corporate mission,
 Opportunities
• Entering the wide markets of dust
tea, scented tea, etc.
• Entering into business with other
countries, ultimately expanding their
network of customers
• Introduction of flavored tea in the
market
• Line extension in the existing product
line, e.g. ice tea
 Threats
• Industry giants in current Pakistan
market
• High switching cost of customers
• Political and economical situation of
Pakistan
• High import duty on tea
TWOS Matrix
IFE Matrix
EFE Matrix
IE Matrix
 Strategic Grid Matrix
Quality

Finlays, Lipton, Tapal

High

Brooke Bond Supreme

Brooke Bond A-1, Tetley

Low

High R&D
BCG Matrix
MARKETING MIX
 Product
• Decaffeinated tea
• Benefits:
– Fighting against the changes of ageing
– Boosting the body’s immune functions
– Reducing blood pressure
– Lowering LDL (bad) cholesterol and increasing HDL
(good) cholesterol levels
– Thinning the blood thereby reducing the risk of a
heart attack and stroke
– Reducing the risk of certain forms of cancer
– Preventing dental cavities and gingivitis due to its
fluoride content.
– Aiding in digestive processes in the body
 Price
• Finlays 2 kg Rs. 1,000
• Finlays 1 kg Rs. 510
• Finlays 45 gms Rs. 25
• Finlays 100 gms Rs. 90
• Finlays 400 gms Rs. 200
• Finlays 500 gms Rs. 260
• Finlays 200 gms Rs. 150
• Finlays teabags 100 pack Rs. 135
• Finlays teabags 200 pack Rs. 250
• Finlays Sachet 28 gms Rs. 15
 Place
• Initially, Lahore
• Gradually other parts of the country
 Promotion
• A+ category shall be used for
advertisement
• Free sampling
• Massive campaigning using the
concept of pull strategy
• Co branding through installation of
Finlays tea machine at different
places in corporate sector or other
food/fitness businesses
• Media campaigning regarding
 Packaging
50% of the packaging shall comprise of the following:
• Finlays 2 kg Jar pack
• Finlays 1 kg Box pack
• Finlays 400 gms Box pack
• Finlays 500 gms Jar pack
• Finlays 200 gms Box pack
• Finlays teabags 100 pack Jar pack
• Finlays teabags 200 pack Box pack
• Finlays Sachet 28 gms Sachet pack
• Finlays 45 gms Sachet pack
• Finlays 100 gms Sachet pack 
30% of the packaging shall comprise of the following:
• Finlays teabags 100 pack Jar pack
• Finlays teabags 200 pack Box pack
20% of the packaging shall comprise of the following:
 Positioning
• Health of the customers
• Customer friendly product, which is
not very harmful for them regarding
the presence of caffeine in tea
Placement
 Point of Difference
• Decaffeinated tea
Process
Marketing Strategies
 Product Development
Strategy
• Pull Strategy
• Brand awareness
• Heavy advertisement
• To gain bargaining power of supplier
 Pricing Strategy
• Premium price strategy
• Skim pricing in order to get the
cream from top of the demand curve
• High price shall be charged, with a
30% increase as compared to the
leading competitor
 Advertisement Plan
• Both ATL and BTL from A+ category shall be
used for advertisement
• Massive campaigning using the concept of
pull strategy
• Allocation of advertisement budget at 5%
• A product focusing on high class at a high
price, thus creating a niche market segment
• Co branding through installation of Finlays
tea machine at different places in corporate
sector or other food/fitness businesses
• Media campaigning regarding decaffeinated
 Organizational Hierarchy
Managing Director

HR  Manager  Costing&Eff  Production  Commercial  Purchasing  Company  C.F.O. Manager

Manager Manager Director Manager Secretary

Accounts Manager

Wholesale   Advertising & Sales  Retail             Sales  Export Manager  Distribution  Chief Quality  Merchandizing   Product 

Manager  Manage Promotion Manager  Manager Manage  Manager     M Controller      M Manager        M Development 
Manager

Training &  Social     Welfare  Sales Personnel  Industrial Relations  Personnel 

Development  Manager  Manager Manager Relation Manager
Manager
FINANCIAL ANALYSIS
Income Statement
 Financial Analysis
Production Assumptions
• Maximum attainable capacity in percentage 95%
• Capacity utilization (1st Year) in percentage 20%
• Production capacity in units (20% in first year)
243,996 Kgs
• Production capacity utilization growth rate 5%
• Sale price growth rate in percentage 5%
 
Cash flow Assumptions
• Raw Material Inventory Cycle (In Days) 10
• Accounts Receivables Cycle (In Days) 20
• Accounts Payable Cycle (In Days) 20
• Initial Cash in Bank (Rupees) 300,000
 Financial Analysis
Expense Assumptions
• Communication Expense (% of Admin. Exp.) 3.5%
• Machine Maintenance (per unit of production) Rs. 1 / Kg
• Pre-Operational Expense Rs. 168,500
• Wages Growth Rate 10%
• Electricity Tariff Growth Rate 8%
• Vehicle Price Growth Rate 10%
• Office Equipment Price Growth Rate 5%

Depreciation Expense Assumptions

• Plant & Machinery Depreciation Rate 10%
• Furniture & Fixtures Depreciation Rate 10%
• Vehicle Depreciation Rate 10%
 
Financing Assumptions
• Debt 30%
• Equity 70%
• Return on Equity 16%
THANK YOU ….