CASE STUDY of

Assam Farm Fresh Tea

Handling sales
pressures

PRESENTED BY:
Ankita Prasad.
Date:15-03-2011
Purpose of the Case
Study
 How should Assam Farm Fresh Tea (AFFT) strike
a balance in its ‘push’ and ‘pull’ policies to enable
sales personnel function in a result-oriented way.

 Major decision areas and activities that make

sales force management as an important
determinant of a firm’s success.

 How Kapoor,the Sales Officer, and AFFT will

position himself between Shah Bhai and his
bosses.
Introduction
 Assam is situated at the North-eastern Himalayan Sub-region of
India.

 Assam is one of the industrially backward states of the country. In

spite of being blessed with a high potential for development of
resource-based and demand-based industries in the state, the
pace of industrialization in Assam had not been satisfactory.

 The industrial sector in the state had been centralized around

some particular sectors, like tea, petroleum, coal, jute and forests.

 Industries in Assam can be broadly classified into four heads : (a)

Agro-based industry, (b)
Mineral-based industry,
(c) Forest-based industry, and
(d) Other industries.

 Agro-based industries of Assam include-Tea industry, Sugar

industry, Grain mill products industry-(Rice, Oil and Flour Mill),
Food processing industry and Textile industry.
 Brand Preference across all
segments-:
1.Since tea is a highly differentiable product, its prices
makes very a lot depending upon consumer segments
to which it is targeted.
For Example-: Tea brands in the economy segment
range from Rs.19 to Rs.35/250g, where specialty teas
are priced as Rs.375/250gm.

2. The premium and specialty segments creating a

good number of brand loyal consumers, therefore the
prices tends hardly any important to consumers.

3.Product initiates type of packing which ensures-

freshness of the “flavor and fragrance”
Secure packaging to prevent loss.
4.The taste and demand of tea market can be
divided into various segments based on
pack sizes-:
 In the urban India customer preference is for 200/250grams
which contribute 48% to total market.

 Demand of smaller packs of 50 grams and less represented

increasing growth rate from 32% to 45% from 1995 to 2000
respectively.

 The pack types prevailing in today industry are in the form of

jars, bottles, boxes,pouches,strips etc.
A new report by Global Industry
Analysts, Inc.
 A new report by Global Industry Analysts, Inc. predicts that global
tea and coffee sales will reach $70 billion by 2015. The key factors
driving growth are health, quality and premiumization.
 Despite a smaller market size, tea is expected to overtake coffee
producers of the famous Assam region in India have asked the
local government for tax relief to counter rising production costs
and low margins, which have plagued the industry in recent years.
 The Tea Board of India has launched the first e-auction of tea in
the headquarters of country’s largest tea auction firm, J Thomas &
Co. The country has seven auction centers located at Guwahati,
Siliguri, Jalpaiguri, Kolkata, Coimbatore, Connor and Kochi, where
the online trading platform will be gradually introduced .
 Average prices in Assam, which accounts for more than half of
production, may reach $4 per kilogram by April from current
levels of approximately $3.30. The company attributes the rise to
inconsistency in weather or cropping pattern, as well as
continuing past attacks. Price rises are set to boost profits of tea
growers including McLeod and Jayshree Tea, and raise costs for
tea buyers like Unilever or Tata Global Beverages.
Introduction of the company
 In such a scenario, Assam farm fresh tea has lunched a
new attractively packaged leaf tea, called ‘Valley’s Pride’.
 The company has a turnover of Rs 210 crore and has been
there in the Indian market since last 35 years.
 It has made its mark because of its quality of tea, aroma
and ‘value for money’ pricing however the business is
getting extremely competitive now.
 Since last 5 yrs, the co. has also started procuring fruit
drinks, jams and jellies from contract manufacturers under
strict quality-control norm and started branding and
distributing them through their existing channel partners.
 Worries

1.Low scale achievement.

2.Sales of valley’s pride have not picked up in

Gujarat and Maharashtra.

Kapoor,
the sales Vijay
officer. desai, the
boss.
 Brakes bond which is the nearest
competitor is launching another leaf tea ‘Green
Darjeeling’ next month.
 AFFT’s distributors were facing resistance from
retailers as they said four other brands were well
established and ‘Valley’s Pride’ was not even
getting trials.
 Although, sales of ‘Valley’s Pride’ has picked up
in up,Rajasthan,Uttaranchal,Punjab and Haryana
but Kapoor’s territory is primarily
“dust tea”.

Another worries…
 consignment
Kapoor
. The
sales
officer.
Shah Bhai,
The
distributor.
Imagine you are kapoor who is stuck
between his channel partners and bosses.
What would u do in such a situation?

Convinces shah Bhai to take 3 tons

of tea
promising quick advertising
and
liquidation of stocks.

kapoor
 Desai disappointed that shah Bhai
must have taken 5 tons instead of 3 tons.
2 tons of ‘tetra pack drinks’
lying as unsold inventory.
 kapoor

consignment

Shah
bhai

1.Shah bhai found wrong products and unwanted

packed sized composition.

2.He found wrong flavour of fruit drinks which

was unsold in his territory.

3.Retailers also complained that the company is

constantly trying to push unordered low demand
products along with ordered ones.
 Lists of How Mr.Kapoor would like to
make the channel partners inclined to
push the “Valleys Pride” to the Customers

1) Region wise customers should be listed.

2) Consistence of quality.
3) Packaging should be attractive.
4) Quantity wise easy availability of products.
5) Dealers should be given extra incentives for selling of
products to the customers.
6) Frequent meeting of dealers and product trials and
testing.
7) Attractive sales commissions.
The reasons of where AFFT went Wrong:
1)Proper zone wise distribution was not followed.
2)Customers’ choice was not taken into
consideration.
3)Improper packaging of product.
4)Product was sub-standard.