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Customer Analysis

Demand for Tea Pakistan is a country with a population of more than 170 million. Whether in the rural or urban areas tea is a phenomenon that is prevalent across all Pakistan socio economic classes and regions. Tea drinking habits are probably adopted by children at the brink of adulthood around the age of 16-17. One very major reason for that could be that it is around this time that many children give the first major exam of their series be it their O levels or Matric. Hence tea provides a good source of staying alert and rejuvenating the senses. Hence tea is drunk across all age groups starting from the age mentioned above. Most tea is prepared by cooking it in hot water until it comes to a boil. The tea in Pakistan is drunk with milk mostly. Many consumers also use sugar although the current price hikes have reduced that amount to a certain extent. Consumers require the tea to have a certain taste, aroma and color. These are the critical elements that are required from a tea as far as a consumer is concerned. A lot of times these factors can cause consumers to continue to purchase a brand i.e. the functional attributes of the tea can be a very important factor in the continued use of a brand but it is not likely to induce trial purchase since the taste of tea cannot be judged without opening the packet.

Purchase Behavior and Decision making The decision maker of the house as far as tea is concerned is the woman of the house although the male person in the form of a father/husband has a strong influence on the choice of tea made. Traditional homemakers take pride in their housework and feel a sense of achievement if their efforts are appreciated. In the rural areas the influence of the male persons is greater than it is in the urban areas. Demographic factors definitely influence the way consumers purchase tea. It would depend on the disposable income of the family and the number of tea drinkers in the family. It would also be determined by the age of the occupants since young people are comfortable with teabags while the elder group has a strong preference for brewed tea. Similarly people from high income are more likely to be convinced of tea bags than people from low income groups. The purchase of tea is carried all year round. It has become staple item in most households and is purchased with the monthly grocery as part of the stock that would normally last a month. It is not reserved for special occasions in most urban households but is a frequently used product meant for daily use. Tea is prepared twice a day in most households. The first cup is had at the break of dawn in the morning while the second round of tea is made in the evening when the bread earners come back from work. For shopkeepers and traders who fall under the out of home segment i.e. they purchase teas from the local dhabba in a chainak, consume tea after meal times and in the afternoon

The purchase decision is made on habitual buying. Loyalty is an important factor in tea purchasing. Many households continue to use a brand that their family has been using for ages. Therefore to get a consumer to change a brand there has to be trial use encouraged first. As time passes the choices of consumers become more rigid and brand switching becomes even more difficult. In smaller towns and areas the opinion of the retailer can be important tools in helping the consumer decide on a brand. The Pakistani consumer is a passionate tea drinker and can differentiate between the different tastes of tea. Hence the young and new tea drinkers re more subject to brand switching and likely to try a new brand than the older segment. The Social Aspect Tea has become part of Pakistani culture, heritage and identity for a majority of Pakistanis. Therefore the needs that are satisfied by tea are functional and emotional both. A lot of consumers are addicted to tea and not drinking tea might lead to headaches. Therefore it becomes imperative for them to drink tea to function in a proper manner. For many others it has become a part of routine, a ritual that they can call their own. It has become apart of their lifestyle their identity hence the emotional attachment. Hence the emotional needs are also satisfied at the subconscious level. Many social factors have been linked to having tea. Tea for many years has been a prime source of entertaining guests especially among the lower income groups. Other than that different emotions have been linked to having tea such as friendship, nostalgia and family values and heritage. Some of these attributes have been used by many packaged tea companies as advertising bases. Tea can be used to socialize with friends, enjoy with family or even be served during business meetings as a tool to break the ice and network. Hence the social factors like acceptance, prestige and hospitality play a very important role in the consumption of tea and consumers deem tea an essential in some of the social situations described above. Lifestyle of Consumer The lifestyle of the consumer does have an impact on whether that person would drink tea or not. Many consumers nowadays are becoming more health conscious and instead of the milk and sugar tea that are referring to have green tea as an alternative option. Also there are some consumers who doubt the health benefits of tea and actually believe it to be detrimental. If the person has the typical urban lifestyle then that person has a greater chance of drinking tea rather than a person who consciously tries to maintain a health conscious lifestyle. Homes of double income households in which most members are earning might choose teabags because of the convenience and the time factor.

Positioning of Tetley When Tetley was initially launched it was built on the positioning of being a strong tea. Other than that there was no clear well defined position. The product was aggressively priced with the smallest pack costing as low as 9 rs and the most expensive one around the 110 mark. Hence price was their major USP. It was sold to the SEC C and the Sec D class and was popular on the outskirts and suburbs of the metro towns and in the rural/semi rural areas. When Tetley was launched in 2006 it did not create that much of awareness among the consumers. Hence the company used aggressive pricing to attract consumers and managed to attract the lower socio economic class living in suburban and rural/semi rural areas. Hence a lot of consumers from the upper class do not perceive the product as low quality and cheap product which would not blend with the self image of most individuals nor would it create an aspiration to develop the self image to match that product. As a result the attitude towards the product is of indifference because of a lack of awareness and the perceived quality of the product.

Understanding the competition

In the tea sector 60% of tea is available in the loose form while 40% is in the packaged form. The packaged form is where all the major corporations are fighting for their share. The market that Tetley is fighting for has the following major players Brook Bond Supreme Lipton Yellow Label Tapal Danedar

The indirect competiton consists of many different beverages. The most obvious competitor is coffee but while it has shown significant growth in the urban sector it still is not that serious a challenger to the popularity of tea. Other beverages include juices, colas and even flavored milks (those brands that are not explicitly targeted towards kids) along with energy drinks that have an ever expanding market. If we look at the positioning and benefits of our major competitors we can list them as follows: Lipton: Lipton promises to deliver a clear mind and think with clarity. The key ingredient is thiamine which is present in the tea and provides a clear start to the day. The target market for Lipton is youth. For the tea bag category it is slightly younger that is people

who like to have fun and want to have things customized to their taste. The Lipton Yellow Label focuses on the young go getters the office goers who want to think clearly and think better. In both cases the focus is on youth. Brooke Bond Supreme: This brand focuses on the family values promoting tea as a beverage that is the choice of the family whenever it sits down together. This ad focuses on the time that family spends together and stresses the quality, color and aroma of brewed tea that is ideal for family settings. It is targeted towards the homemakers of urban households who use the tea to set up a homely environment in which family life can be enjoyed to the fullest. The latest positioning again focuses on the functional aspect of flavanoids which are being promoted as beneficial to health for the whole family. Tapal Danedar: This brand is the market leader as far as packaged tea brands are concerned. This brand is again positioned to the same audience as Brooke Bond. Their positioning statement is that Tapal tea completes every moment and no moment is complete without Tapal. It is a tea for all occasions and the positioning is used to inculcate habitual buying in the consumers. Positioning with Respect to Competitors The position of Tetley, as explained earlier is, not clear to the consumers who were aware of it. Luckily for Tetley since the awareness level of consumers was fairly low therefore the repositioning will not be that difficult because the most important thing in repositioning is the unlearning of the previous positioning. In this case where the consumers are unaware of the previous positioning the repositioning to them would be like launch of a new product and this would account for a majority of consumers. The positioning the company had originally was the strongest tea but that failed to create or leave an impact on the consumers hence they were not perceived as such. When the prices were lowered they became the cheapest tea available and hence garnered consumers because of the low price. The consumers made in this strategy are highly price sensitive with little or no brand loyalty. A small change in price will turn these consumers away. Hence while other brands have a clear position in the consumers mind Tetley does not have such a position and is viewed as the lowest and the cheapest quality tea out of all its competitors The Ad budgets of the competitors are fairly large around 25-30 million. This allows them to produce a high quality ad and purchase air time with greater frequency and reach. The message strategy used by Lipton is a mix of verbal and visual and the media strategy that they use is heavy advertising on Radio where they sponsor programs that are most likely to be listened to by the target audience. There is also heavy advertising on television . The rest of the competitors are also fairly similar with a heavy media presence and the message is focused on both the visual as well as the verbal content.