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Prepared By:
(ID-2012121015)
Najeb Islam
(ID-2011421006)
(ID-2012121012)
Prepared For:
BAC
Dhaka, Bangladesh
Acknowledgement
“In the Name of Allah; The Most Gracious, The Most Merciful”.
All praise to the Almighty, without his blessings and endorsement this report would not
have been accomplished.
The successful completion of this report might never be possible in time without the help of
some person whose inspiration and suggestion made it happen.
First of all I want to thank my course lecturer Mr. Irfan Jahangir for helping me complete my
report on “Lipton Herbal Tea - Unilever”.
I also want to thank my team-mates for their continuous and sincere support to expedite
information integral for the accomplishment of this report.
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Unilever
The Unilever Group is one of the world’s leading suppliers of fast-moving consumer goods.
Besides having a significant global presence, Their Lipton brand is a leader in the
international market.
This report contains and explains the major variable components, which are essential in the
process of marketing.
It will also give a comprehensible picture of the internal and the external factors involved
that encircle the Tea Product.
Holy Thistle – has been used medicinally for over 2000 years, most commonly for the
treatment of liver problems by supporting it in the release of toxins. It has been highly
regarded for therapeutic uses and was cultivated throughout Europe.
Holy thistle products are still popular in Europe and the United States for various types of
liver disease. Holy thistle is believed to have great power in the purification and circulation
of the blood.
Persimmon – leaves are a good source of important dietary antioxidants, such as vitamin A
& C. It has been widely used as a tea in oriental countries.
Malva Leaf – was considered as a perfect plant in early literatures. In ancient days it was not
only valued as a medicine, but was used to decorate the graves of friends.
Marshmallow Leaf – has been traditionally used to soothe and support the intestines. Herbs
such as Marshmallow are often helpful for symptomatic relief of coughs and irritated
throats. Topically, marshmallow is used to soothe and soften irritated skin. Marshmallow
leaf is completely non-toxic.
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[Lo 3.2] Marketing Planning vs. Strategic Planning
(2) Developing the best marketing mix (the 4 P’s or 7 P’s) to satisfy this target.
Ultimately, the tactics becomes much more specific and provide more precise details about
such matters as, say: where should we advertise? When should we run the ads? How will we
get distribution in certain types of stores? Etc.
In effect, the tactics describe how to achieve the strategies and how to manage resources
that are required to implement the tactics.
Companies need to analyze and track what their competitors are doing. It is important to
know the strengths, weaknesses, objectives, and strategies of the competition.
It is a road map and surveys the business environment, describes problems, threats and
opportunities in the industry, contains a marketing strategy, and has financial
projections/budgets.
A marketing plan is concerned more with strategy whereas a business plan is more
concerned with financial information.
The primary purpose of a business plan is to raise money from venture capitalists or
bankers; the primary purpose of a marketing plan is to provide direction for a company.
Marketing management constantly have to assess which customers they are trying to reach
and how they can design products and services that provide better value (“competitive
advantage”).
The main problem with this process is that the “environment” in which businesses operate
is constantly changing.
So a business must adapt to reflect changes in the environment and make decisions about
how to change the marketing mix in order to succeed.
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On the other hand, strategic planning is concerned about the overall direction of the
business.
The objective of a strategic plan is to set the direction of a business and create its shape so
that the products and services it provides meet the overall business objectives.
Marketing has a key role to play in strategic planning, because it is the job of marketing
management to understand and manage the links between the business and the
“environment”.
• Measure performance
Marketing planning is also important since it is often a prerequisite for obtaining funding
whether one is a marketer in a large corporation seeking additional money for his or her
department or is part of a small start-up company looking for initial funding.
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[Lo 3.2] Customer-Driven Marketing Strategy
There are three processes toward an effective customer driven marketing strategy such as:
i. Segmentation
ii. Targeting
iii. Positioning
- Segmentation identifies the difference category like as age, location, & religion.
Lipton has equal benefit for everybody. We will have to focus on the all group of ages.
Thus we will use Undifferentiated Marketing (or mass-marketing) where everything about
the product is designed to bring all people to Lipton.
This is a market coverage strategy in which a firm decides to ignore market segment
differences and go after the one market with one offer.
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• Geographic Target:
Lipton’s geographic customers are of USA, Europe and India but in near future after
establishing the product in these areas they will definitely launch their product in the rest of
the continents.
• Demographic Target:
• Psychographic Target:
Higher-Middle class
Middle class
Lower-Middle class
Market trend is now headed toward a more sophisticated and aware customer.
The preference for high-quality product is increasing as customers are learning to appreciate
the qualitative differences.
Lipton’s Positioning:
Lipton tea has been positioned in the market as “great tasting and good for consumers”
because it is rich in protective antioxidants (Unilever 2007).
It is globally promoted as “the perfect drink for active, healthy lifestyle” (Unilever 2007).
• Herbal tea with Lemon - Herbal tea with a twist of citrus flavour
Consumer welfare and sustainable development have been the main driving factors behind
the packaging and marketing of Lipton Herbal Tea till now.
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Therefore, in order to meet the diverse tastes of consumers all over the world, Lipton is
continually adding new flavours in the product.
These attributes are allowing the organisation to develop and expand its niche at a fast pace
in the global arena.
Furthermore, Unilever has a strong presence in the developing and emerging markets yet
there is plenty of ‘white space' to move into.
When the situation is viewed in terms of SWOT analysis, the following can be highlighted:
STRENGTHS –
• Strong Financial Backup: Lipton Unilever has been established as a group by five
investors who are also its board of directors; providing Lipton Unilever with strong financial
assistance.
• In-house research facility: Lipton Unilever has an in-house research facility, where
market research can be done about consumer preferences and our competitors; the
information is very useful to top level managers for decision making.
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WEAKNESSES –
• High Price: Since the cost of production of most of their products is high because of
various factors (imported ingredients, technology, quality and maintenance etc), they
charge high prices for the items they produce.
OPPORTUNITIES –
• High Growth Rate: Tea industry has high growth potential in line with high rates of
population.
• Increasing concern for health: Since the media explosion from the mid-90s, people
have convenient access to information. Hence, people are being educated about the
concern and need for health awareness and therefore have adopted increasing concern for
their health and appearance.
THREATS –
• Rivalry firm: The tea industry facilitates a lot of competition from market leaders like
Royal. Their longer existence in the market has given them an established consumer base
and loyalty and has provided them with the experience that Lipton Unilever lacks.
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[Lo 3.1, 3.3, 3.4] An Integrated Marketing Program
The tea industry is about 170 years old. It occupies an important place and plays a very
useful part in the global economy.
Tea plantations are mainly located in rural hills and backward areas.
The major competitive countries in tea in the world are India, Sri Lanka, Kenya, China and
Indonesia.
China is the major producer of herbal tea while Sri Lanka and Indonesia are producing
mainly orthodox varieties of tea.
Kenya is basically a CTC (Crush, Tear, and Curl) tea producing country.
India is facing competition from Sri Lanka and Indonesia with regard to export of orthodox
teas and from China with regard to herbal tea export.
2007
1951
1961
1971
1981
1991
1992
1993
1994
1995
1996
1997
1998
1999
2001
2002
2003
2004
2005
2006
2008
Above Line graph clearly indicates that till 1991 Tea consumption grew at the phenomenon
rate of 32.2% where as in recent past few years the average rate of consumption growth is
0.7%.
Tea being the only beverage which is consumed at the largest following Water hence there
is no trouble to global tea market future with growing population.
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Customer Needs and Wants:
The health related issues are increasing day by day due to the lifestyle and inclination of the
generation towards fast food or junk food which is generally responsible for health hazards.
Unilever’s research shows that majority of the people have developed health consciousness.
This is mainly due to the various health programs being broadcasted on television as well as
a variety of articles being published in magazines and digests.
Lately trends show that people have started reverting back to the natural means of
maintaining health.
Moreover nowadays more and more people are getting literate and educated.
The education in turn brings awareness in the people and they understand what do’s and
don’ts.
There is class of people who are very health cautious and most of them fall under high class
societies.
Since it is difficult to change the lifestyle of people all of sudden; people look for better
product which can keep them healthy and offer resistance or meditate their health for long
life and better health.
We must keep in mind that tea is hot beverage consumed by people all over the world at
highest after water.
So it is a great idea if tea can prove as tea as well as medicine and offer better health &
immunization as it is consumed twice to thrice a day.
If tea can provide health benefits it will be surely welcomed by the class of health conscious
people.
Furthermore, A few recent studies suggest that the health benefits would drive the
performance of Lipton herbal tea across the globe (Winslow 2006).
Consumers generally perceive tea consumption to be a healthy activity and are more likely
to consume herbal tea rather than other soda based drinks.
Therefore, the 100 percent Natural Tea and 150 mg of protective natural antioxidants has
made Lipton tea a major participant in the global tea market.
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Integrated Marketing Plan for Lipton:
• To enable Lipton Tea to satisfy, fulfil the consumer’s personality & lifestyle.
In order to achieve our objectives we will use following strategies while developing our
marketing mix.
Value Based Pricing – We will set our product price, based on the benefits it provides to
consumers. Because our offer is unique and highly valuable features are better positioned
to take advantage of value-based pricing.
Multi-Channel (Hybrid) Distribution Systems – We can utilize more than one distribution
design by following a multi-channel or hybrid distribution system.
As Example, we may use a direct retail system by selling Lipton Tea in company-owned
stores, and through a direct marketing system by selling via direct dispatch, and through a
single-party selling system by selling through grocery stores.
This approach will allow us to reach a wider market; however, we must be careful with this
approach otherwise channel conflicts will arise.
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Marketing Mix of Lipton Tea:
• Product –
Lipton Tea will be a high quality product offered as specially blended herbs tea.
150 bags and 250 bags are Family Packs. (250 bags is most famous nowadays)
Packaging: Customer perception of a package creates brand equity and purchaser loyalty.
The image presented by the package largely determines success or failure of a tea line.
Appearance stimulates memories and emotions inside the purchaser, who oftentimes is
female, often buying for an entire family.
Thus colour, image and slogan of Lipton must all combine to facilitate customer allegiance.
Before coming to this idea we had to systematically search for new product ideas through
analysing our internal sources, customers, competitors, distributors, and suppliers.
Afterward we marked the best idea and dropped poor ones by examining the market size,
product price, development time and costs, manufacturing costs, and rate of return.
• Place –
High quality tea for a reasonable price will be bought from Assam & Darjeeling (India) and
will then be blended and packed in the Lipton factory.
Then we may open up company-owned stores to start a direct retail system to sell Lipton
Tea. We can even sell Lipton tea directly to the end consumers by sending direct dispatch
from factory.
At the same time the final product will be distributed to authorized dealers and retailers
such as supermarkets and main tea shops so the end consumer has easy access to it.
Place in supermarket: On the middle and lower levels of self. The Lipton Tea will be placed
according to the content of tea bags.
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• Price –
Reasons for pricing policy: Lipton Tea will be competing against the main player on the
Herbal Tea Market Royal Tea by setting a higher price but offering more value for it.
Various promotion activities, giveaways and advertising on radio and television will help to
establish the brand and gain market shares.
(Assuming fixed costs of USD 300,000 and constant unit variable costs of USD 10)
Price [P] Unit Demand Expected Unit Total Revenue Total Costs [TC] Profit [TR - TC]
Needed to Demand at [TR = P x EUD]
Break Given Price
Even[UDN] [EUD]
Used Formula:
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• Promotion –
The promotion is the most important point to launch our products because we want to be
able to compete with our biggest competitor. We must focus on this point because the
people like to purchase bargains or buy products that offer free gifts.
Other brands do not offer as many promotion and free gifts. This is why it is important to
focus especially on the Promotion activities of the marketing mix. We are going to set up
original events in order to attract new customers and consumers of other tea brands.
Our objectives:
- Develop awareness
- Generate traffic
Stand in the supermarkets: we want to set up a stand in the supermarket in order to make
tasting to the supermarket’s clients.
The stand should be placed between the fresh food and the food with the aim to attract all
the consumers.
The stand should represent the brand with the colour of the company, the logo, the
environment of Lipton.
For example, the stand could be coloured with a combination of red and yellow.
Moreover, the hostesses can give some presents to the children like, balloons with the logo
of the brand and pens with the logo.
Also, during the launch of our product (one week), all the customers at the supermarket will
receive a sample of “Lipton Tea” for free at the cashiers including a voucher which explains
the game to win a trip to London.
Promotional offers during the year: If a client buys a box of 150 bags, he will get a free cup
or a spoon or a little kettle.
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In addition, during first two months, we can organize a game: when you buy Lipton, you win
some points and with certain numerous of points, you can get a present which represents
the brand image.
Promotional event for Lipton Tea launching: During one weekend in a big city we will
organize a big event.
In the street, there will be hostesses with special clothes who will distribute samples and
cups with tea to offer the product to passer-by.
After the show, they will hand out flyers the people can fill in so as to win the weekend trip
to London.
At the end of the event, there will be a drawing of lots. The winner will receive the present
(tea boxes) via post way.
Furthermore, in the street there will be a lot of decoration of the brand image.
Advertisement: At the beginning, the strategy is to focus on the Internet, the radio and on
daily newspaper to reach a lot of customers.
These media are noticed by a large target group which will help the firm to be known.
After six months or one year, we will begin a campaign on television, in magazines and on
airports.
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Building Profitable Relationship and Creating Customer Delight
Lipton will increasingly be able to customize marketing messages to larger target audiences
on the basis of the customer's expected response and the customer's value to the firm.
By following the CRM strategies discussed here, firms can reduce overall marketing costs,
increase overall customer response rates, and, most importantly, increase overall customer
and firm profitability.
For example:
Lipton’s marketing plan has data on markets, prospects, and lists. This is also supported
through a third party vendor.
But marketing needs to drive generated leads to Sales for follow up.
Thus, the marketing department also could use feedback from service and sales about what
campaigns are working.
Customer Service has excellent customer feedback, but it's not looping back into marketing
department. This is the type of data that can act as the foundation for upcoming marketing
campaigns.
Customer Service can also provide sales representative important product information or
specific account issues that would be invaluable for sales to have before they call on an
account.
Finally, Customer Service can be used for cross sell and up sell opportunities.
This provides each department with a 360-degree view of the customer, and ensures that
the data is current and complete.
Lipton’s CRM applications will also enable companies to interact with customers throughout
multiple channels including the Web, phone, fax, direct mail, e-mail, and in person or
through partners.
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Partner Relationship Management:
Partner Relationship Management is a used to describe the methodology and strategies for
improving communications and relationships between companies and their channel
partners.
These solutions include key features for selling, commission, opportunity, marketing
campaigns, inventory access, and other features designed to facilitate the relationship
between manufacturers and their channel partners.
Partner relationship management can take a number of different forms. In some cases,
delivery of a product is needed during specific times of the day.
For example, in Lipton’s shipping and receiving departments, suppliers must deliver within a
certain time frame.
In the busiest of locations, that window could be as little as 30 minutes. When traveling
across a large geographic region, that can be a hard target to hit.
Using software and other communication tools often provided through a partner
relationship management strategy, suppliers, shippers and the end users can keep in
constant contact with each other.
This means the end user will be able to know where each item is each step in the process
and when to expect it.
Depending on the situation, this may allow Lipton’s factory to adjust production so that the
entire operation does not shut due to supply concerns.
Without this benefit, Lipton would need to wait for an order from the retailer or reseller.
That could delay the process and thus allow both sides to miss out on valuable sales.
For example, it may include a partner loyalty component, which will provide a benefit to
both companies. As those relationships are solidified, it will provide a good customer base
on which both can depend.
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Capturing Value from Customers to Create Profit and Customer Equity
The first four steps in the marketing process involve building customer relationships. The
final step involves capturing value in return.
1) By creating superior customer value, the Lipton herbal tea creates highly satisfied
customers who stay loyal and buy more.
4) This means that companies must aim high in building customer relationships.
5) Customer delight creates an emotional relationship with a product or service, not just a
rational preference.
6) Lipton herbal tea is realizing that losing a customer means losing more than a single sale.
It means losing customer lifetime value.
8) Share of customer is defined as the share the company gets of customers purchasing in
their product categories. (Thus, banks want to increase “share of wallet.”)
Unilever want not only to create profitable customers, but to “own” them for life, capture
their customer lifetime value, and earn a greater share of their purchases.
Marketing consists of actions taken to build and maintain desirable exchange relationships
with target audience involving a product, service, idea, or other objects.
Customer equity is the total combined customer lifetime values of all of the company’s
current and potential customers.
Clearly, the more loyal the firm’s profitable customers, the higher the firm’s customer
equity.
Customer equity may be a better measure of a firm’s performance than current sales or
market share.
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Building the Right Relationships with the Right Customers
Not all customers, not even all loyal customers, are good investments.
“Strangers” show low potential profitability and little projected loyalty. The relationship
management strategy for these customers is simple: Don’t invest anything in them.
“Butterflies” are potentially profitable but not loyal. The company should use promotional
blitzes to attract them, create satisfying and profitable transactions with them, and then
cease investing in them until the next time around.
“True friends” are both profitable and loyal. There is a strong fit between their needs and
the company’s offerings. The firm wants to make continuous relationship investments to
delight these customers and retain and grow them.
“Barnacles” are highly loyal but not very profitable. There is a limited fit between their
needs and the company’s offerings.
The goal is to build the right relationships with the right customers.
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[Lo 3.5] - Factors Affecting the Effective Implementation of the Marketing Plan
Human Resources Capabilities: The people working in this organization are the key to
achieving effective implementation of those strategic plans. Staffing competent employees
involves recruiting, training and retaining a capable and adaptable workforce.
Knowledgeable, dependable and versatile employees have the ability to overcome the
obstacles to change, and can meet performance goals even when other resources are
scarce. If all of the other elements listed in this article are present, but the workforce does
not meet these criteria, then achieving those objectives may be nearly impossible.
Favourable Environment: We have to Rethink existing policies and procedures, and make
any changes necessary to facilitate the changes resulting from our strategic initiatives. We
may find that certain aspects of our existing operational framework can actually impede
strategy implementation, and that certain areas may stand out as being lacking in policy
guidance in light of our new strategic goals.
Incentive Systems: We must consider altering existing incentive systems to coincide with our
new strategic objectives. As an example, if we can alter existing incentive system rewards
employees on the basis of tenure, but our new strategic plan calls for a 50 percent increase
in service plan sales to reposition our company as a service provider, then consider altering
the system to reward employees or teams with high monthly service plan sales numbers.
According to "Crafting and Executing Strategy" by Thompson, Strickland, and Gamble, our
employees' incentive-based goals will always coincide with our organizational objectives.
Strong Leadership and Culture: Organizational culture and strong leadership are
inseparable. We must encourage and train our management team to be agents of change,
with the ability to champion new ideas and coach employees through the change process.
Also, use our influence as a leader to reset the tone of our organization to reflect the
importance and seriousness of our new strategic plans, and lead by example in terms of
flexibility and dedication to change.
Capital Resources: All of the internal elements listed in this article require capital to employ.
For example, highly skilled workers demand higher wages, technological infrastructure can
be costly, and reward systems require capital if material goods are offered. Thus proper
budget have to be introduced.
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References:
1. http://www.liptontea.com/
2. Wikipedia. 2007. “Lipton.” Available at http://en.wikipedia.org/wiki/Lipton
3. Company Reports: Unilever Annual Review 2011
4. http://www.monografias.com/trabajos15/strategic-marketing/strategic-
marketing.shtml
5. http://www.knowthis.com/principles-of-marketing-tutorials/marketing-planning-
and-strategy/
6. http://www.mediapost.com/publications/article/170917/new-strategies-for-
customer-relationship-managemen.html
7. http://www.wisegeek.com/what-is-partner-relationship-management.htm
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