Marketing Research Project on Unilever

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ACKNOWLEDGEMENT:


We here by thank Allah who gave us the ability and strength to complete this report. We also thank our teacher “Miss Shehnaz Meghani” whose encouraging guidance helped us to prepare this report on “Lipton Cardamom Tea”; the work that has been put up in this report would not have been possible without her guidance and support.
We also take this opportunity to show our deep gratitude to all persons who have directly or indirectly helped us while making this informative report. We would like to give special thanks to Mustafa A. Khan, Managing Director Trust Professional (Pvt) Ltd who provided us detailed information regarding the product and give us all the necessary information required to complete the report.

No doubt, all the people who were involved while making report played an active and wonderful role. We hope that this term report will provide useful knowledge and information regarding our research product to the reader.

PREFACE

During the course ‘Principles of Marketing’ our team was assigned to prepare a report based on the marketing strategies of a well-known product.

Our assigned product is Lipton’s Cardamom Tea backed by Unilever.

During the collection and analysis of data, we didn’t face any problem while acquiring the related information. All the related problems, which were faced by us, are already kept in risk assessment time and minute in nature, so due to that factor we have completed our report in time.

This report will definitely create a better understanding of marketing concepts and their implementation in a real life scenario. This report is about a known product, which is easily available in the local market and comes under the category of Fast Moving Consumers Goods (FMCG). After reading this report, the reader can understand how big companies like Unilever make marketing strategies for themselves and for their business units, especially focussed on LIPTON’S CARDAMOM TEA.

EXECUTIVE SUMMARY:

*      Unilever was created in 1930 when the British soap-maker Lever Brothers merged with the Dutch margarine producer, Margarine Unie.

*       Unilever Company came into the Pakistan market in 1949 with the name of Lever Brothers Pakistan.

*      Changed the name Lever Brothers Pakistan to Unilever in year 2003.

*      The leading consumer products company in Pakistan, a multinational with deep roots in the country.

*      The average per annum consumption of tea is 150 million kilograms

*      Lipton has the slogan LIPTON TEA CAN DO THAT.


*      Lipton enjoys a huge market share.

*      The main charisma of the product is the aroma and the new taste.

*      Major competitors is Tapal

*      Under the BCG Matrix, LIPTON CARDAMOM TEA lies in the question marks stage.

*      The product is in the growth stage.

*      The product only caters the niche market.

*      Consumers are emotionally attached with this brand, and in loyalty pyramid comes under committed buyers.

*      The distribution of the product is not intense.

*      Practice the product development strategy

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TEA OVERVIEW:

The world's passion for tea is legendary, and as it became less a drink for the rich and more a drink for the masses, the commerce of tea became big business.
Tea is Pakistan’s most popular and cheapest beverage. The annual consumption is about 150 million kilogram, fluctuates at just less than 1kilogram per year; this is the world’s seventh highest consumption. 66 percent of the country’s total population of 154 million lives in rural areas, where tea consumption is greatest
Today, tea is the world's second most popular drink (after water). It's easy to make, affordable and one of the fastest growing beverages (6.5% over 5 years).
Pakistan became a major tea importer. It is now the world’s third largest tea importing country. Kenya is the leading supplier with 57 percent of Pakistan’s import. Illegal imports are substantial, nearly 1/3 of domestic consumption and a nearly 81 million USD business.
The Pakistan’s tea-makers can be classified into the “blended and packed” segment of the market and the “loose” tea segment. Blending, Packaging and distribution are nominated by Unilever, the world’s largest transactional corporation in the tea industry, and Tapal Limited, a very competitive local firm. Both are based in the port of Karachi. There are some other minor players. Out of recent total legal imports of 114,000,000 kilograms, 70,000,000 kilograms went to the packers, while the rest was imported by independent traders who sell “loose” tea in open markets.

COMPANY PROFILE

Unilever was created in 1930 when the British soap-maker Lever Brothers merged with the Dutch margarine producer, Margarine Unie.

At that time, an international merger was an unusual move. But the owners of the two companies could see that bringing together complimentary businesses with strong global networks would create new opportunities.

In the Thirties, Unilever introduced improved technology to the business. The business grew and new ventures were launched in Latin America. The entrepreneurial spirit of the founders and their caring approach to their employees and their communities remain at the heart of Unilever's business today.

Unilever has universal appeal. One of the largest producers of packaged consumer goods, Unilever operates in 150 countries in Asia, Africa, North America, the Middle East, Western Europe, and Latin America.

Unilever is one of the world's leading suppliers of fast moving consumer goods in foods, household and personal care products. Unilever are growing biggest brands through innovative product development and compelling brand communications. Each of these brands has enormous potential to meet the changing needs of consumers through a variety of products that fulfil their brand's promise. At the same time they also have the potential scale, profitability and international appeal needed to be world-leaders.

Unilever Best foods' strength lies in its ability to tailor products to different markets and anticipate consumer’s demands. This comes from in-depth understanding of the countries in which they operate and policy of listening to the customers.

Employing more than 247,000 people, Unilever is part of the Unilever Group owned by the Netherlands-based Unilever N.V. and UK-based Unilever PLC. Unilever has two global divisions, Home & Personal Care and Food.


Company Mission Statement:

·        The leading consumer products company in Pakistan, a multinational with deep roots in the country.

·        Meet the everyday needs of people everywhere – to anticipate the aspirations of consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life.

·        Drive to serve consumers in a unique and effective way.

·        Attract and develop highly talented people, who are exited, empowered and committed to deliver double-digit growth.

·        Serve everybody needs of all the consumers everywhere for foods. Hygiene and beauty through branded products and service that deliver the best quality and value.

·        Strive to maintain an ever simple and enterprising business.

·        Use superior consumer understanding to produce breakthrough innovation in brands and channels.

·        Committed to making continuous improvements in the management of our environmental impact and to the longer-term goal of developing a sustainable business.

·        Brands capture the heart of consumers through outstanding communication.

·        With branded products and services which raise the quality of life.

·        Through managing a responsive supply chain management, they maximize value from suppliers to customers.

·        They are exemplary through commitment to business ethics, health, environment and involvement in the community.

Company Values:

·        Unilever Vision, Mission, Values, and Code of Business Principles are the principle belief of the company.

·        Employees are ambassadors of Unilever, both inside and outside the work place.

·        Respect Individual differences and provide equal opportunity regardless of gender, ethnic or social background.

·        Treat each employee and contacts with respect, regardless of grade and job title.

·        Set the business priority accordingly.

·        Respect time enthusiastically to achieve growth.

·        Company search for new ideas even by the consumers.

·        Every person is a potential Unilever customer, they treat all with respect.

·        Ensure superior quality products and services and aiming for zero complaints.

·        Never lose a consumer, Own the problem, win them back and ensure they feel positively treated.

Unilever Market:

Unilever caters in three categories and which include Food Brands, Personal Care Brands and Home Care Brands.

Brands of Unilever:

Unilever Pakistan offers brands in three categories
  1. Home care brands
  2. Personal care brands


FOOD BRANDS
Blue Band
Brooke Bond A1

Flora

Lipton

Pearl Dust

Supreme


HOME CARE BRANDS

Comfort


Rin


SurfExcel


PERSONAL CARE BRANDS

Clear

Close-up

Fair n lovely

Lifebuoy Shampoo

Life Buoy Soap

Lux

Ponds

Rexona

Sunsilk

LIPTON INDUSTRY PROFILE:

Unilever is one of the world’s greatest consumer goods company and Lipton is a product of Unilever.
 Sir Thomas Lipton was a Scottish-born entrepreneur and innovator who decided in 1880, at the age of 40, that he would make tea accessible to all at acceptable prices and with a guaranteed quality. Before Thomas Lipton, tea had been expensive. It was a beverage for the rich and variable in taste as a result of improper packaging and transportation. Thomas Lipton acquired tea estates in Ceylon (today Sri Lanka) and organized packaging and transportation at low cost to sell his teas 'direct from the tea garden to the tea pot'. In 1893, he established the Thomas J Lipton Co., a tea packing company with its headquarters and factory in Hoboken, New Jersey.
LIPTON teas were an immediate success in the US. Thomas Lipton was knighted by Queen Victoria, who made him Sir Thomas Lipton in 1898 at the age of forty-eight.
Thanks to Sir Thomas Lipton, LIPTON is the world’s leading tea brand and present in more than 80 countries.
LIPTON stands for brightness, vitality and fun. It compromises of yellow label, iced tea and green teas. It is designed for upper middle, upper lower and upper middle class. Lipton is a market leader in the industry. It comes in all the packages including hard packs, jars and tea bags.

“LIPTON TEA CAN DO THAT”

Mission Statement of Lipton:

The mission of Lipton is to meet the everyday needs of the people everywhere to anticipate the aspirations of our consumers and customers to respond creatively and competitively with products, which raise the quality of life.

Swot Analysis

STRENGTHS:

  • Unilever is a multinational company
  • Powerful heritage of Lipton as present in the Pakistan market since 1948
  • Familiar with psychographics and demographics of the local consumers
  • Strong brand mage and brand awareness in Pakistan
  • Market leader as t has a 70% market share in branded tea.
  • Larger sales force
  • Strong and long-term relationship with distributors, wholesalers and retailers.
  • Sound and experienced management.
  • Excellent marketing department assisted by a highly regarded marketing research unit.

WEAKNESSES:

  • Loss of market share to Tapal in Karachi and Multan
  • Low market share in N.W.F.P.
  • Positioning of Lipton Yellow Label as a premium product to which consumers have a weak emotional attachment
OPPORTUNITIES:

  • High rate of population growth
  • Rising literacy
  • Tea was added to the smuggled goods list in March 1998 and import duty was reduced from 45 to 25 percent. This has collectively placed the entire organized tea business in a more favorable position.
·        Market opportunity of Lipton Yellow Label in rural areas

THREATS:

  • Threat from cheaper tea smuggled into the country via border areas of NWFP and Balochistan seriously affecting Lever’s sales and earnings.
  • Possible increase of Tapal and loose tea market shares
  • Rising inflation, which reduces disposable income of consumers?
  • Increasing import duties since a lot of raw materials are imported would raise the price of its end products.
·        Lipton’s profit margin is exposed to rupee devaluation.

Lipton Cardamom Tea:

Lipton has been playing the key role to provide its consumers with something better and different in every way it can. Lipton once again with the extension in its product mix has come up with the idea of introducing new flavor in the market, the cardamom flavor. The differentiation strategy of Lipton is the flavor and aroma. It is targeted for the existing tea drinkers, providing them with something new and attractive, with great aroma and taste.
Unilever has used product development strategy to introduce Lipton Cardamom Tea; it has offered modified/new products to current markets.

SITUATIONAL ANALYSIS:

Microenvironment Factors

Microenvironment of a company is all the factors that affect its ability to serve its customers. It includes the company, suppliers, marketing intermediateries, customer markets, competitors, and publics.

1.      The Company:

Unilever is the largest FMCG Company in Pakistan, which was established in 1948. It is an international company, with head offices in most of the countries of the world. People at Unilever work together to attain a single target, which is customer, need satisfaction. The people at work, coordinates to achieve this target through setting up objectives and targets and attaining them. Top Management set the mission and objectives, whereas the marketing managers set strategies according to all these decisions and missions. Unilever strategy has been quite amazing; their efforts go beyond just providing the products, more importantly, providing consumers with the required health and nutrition information that can help them make better informed choices to lead a healthier lifestyle
2.      Suppliers:

The suppliers have made an important link in the company’s overall customer value and delivery system.

3.      Marketing Intermediaries:

Unilever marketing intermediaries have played an effective role in distributing its products. Unilever products are widely available in nearly all retail stores. The physical distribution of the firm is quite balanced and covers a very wide area. Financial intermediaries of the firm are quite strong and depict a very firm relation with the company. These have strongly helped the company in promoting its products.

4.      Customers:

The customers have always been quite contended with the products. There’s a huge wide range of products produced that are being used by consumers on regular basis. The company has maintained its standard though out, that has helped in binding strong relations with its customers. Customers don’t feel like switching to any other brands and are blind folded by the standard and quality produced. The Unilever Lipton cardamom tea targets very niche market, the concept is new and very few people are aware of it.

Macro environment Factors:

Micro environment factors are all the societal factors, which affect the company; these include demographics, economic, natural, technological, political and cultural forces.

1. Demographics:

Pakistan is the country here tea intake is very high as compared to other countries of the world. Generally, people consume 2-4 cups of tea per day. So demographically in a country like Pakistan where tea intake is high, any production or development in the line/product extension would help the company to grow.
 The demographics include ages, location, gender, race, occupation etc.
 Lipton is designed for upper middle, upper lower and upper middle class. The potential market of Lipton is the people aged 10-60; it does not target the children.

2. Economics Forces: 

The buying of Lipton cardamom tea, which is for a particular class and niche market, the economic factors like low income, the decline in the production, the inflation rate might influence the buying pattern of the people.

3. Cultural Factors:

The Pakistani culture is considerably diverse and this diversity has produced unique cultural amalgam of its own type. Although, the target market of Lipton Cardamom tea are the people who are diverse and ready to try something new and fascinating, which lingers to their taste buds and give them a refresh feeling.

MARKET SEGMENTATION

Market segments are group of customers having similar needs / wants and preferences. It enables the organization to more closely match it marketing mix with the customers of same needs or demands.

Consumers can be grouped and served in various ways based on geographic, demographic, psycho graphics and behavioral basis.

Tea drinking is our national habit, addiction and part of our evolutionary culture; it is no more a fashion in Pakistan. Tea drinking has become such a habit in Pakistan that such slogans for tea drinkers are in the air.


GEOGRAPHIC:

Country
Pakistan
Country Region
All
Climate
Moderate

DEMOGRAPHIC:
Age
12+
Gender
Male-Female
Family Size
Any
Income
Rs 50000+
Occupation
Professionals, Students, Managers, Officials
Family life Cycle
Single, Married, Divorced etc
Education
Professionals, Graduates, Students
Religion
Islam (majority)
Race
Asian
Nationality
Pakistani
PSYCHO GRAPHIC:
Social Class
Upper middles, lower Uppers, upper-uppers
Life Style
Achievers
Personality
Cultured, energetic.

Behavioral:
Occasions
Regular, Special
Benefits
Taste, Aroma
User Status
Ex-user, regular user, first time user
Loyalty Status
Strong
User Rates
Medium user, heavy user
Readiness State
Aware, interested, desirous
Attitude Towards Product
Positive, Enthusiastic

TARGET MARKET:

Lipton Cardamom Tea has used concentrated niche marketing strategy. Lipton has chosen Niche marketing because it goes for a large share of one or few segments. The aroma and essence is not the need of everyone, only few classy people, who want a great lifestyle with a touch of uniqueness will go for a cardamom flavored tea. Lipton basically has targeted the urban areas and has concentrated on the upper and middle classes {preferable age group ranging from (15 – 60)}. Today as both men and women consume equal amounts of tea the age group segment selected for Lipton is 15 – 60 for they want to target those people who are young trendy, cosmopolitan hip and cosmopolitan.

Lipton cardamom tea is a product of Unilever targeted for niche market with new essence and flavor. It is high quality high price product. The people at Lipton understood the need of the niche market, that the niche market is more innovative and need changes. Moreover, Lipton does not focus on the households, the Lipton cardamom tea focuses on the commercialism of this product. It is available to the universities, offices and shopping malls.   By doing so, it is targeted the needs of the people who want comfort, quality, convenience and pleasure.

Market Size Calculation


Geographical:
Region: Pakistan (Lahore, Karachi & Islamabad)
City or metro Size: = 25.914 Million
Density: Urban (70% of metro size = 18.139 Million
Climate: Northern, Southern

Demographic:
Age: 12+ (80% of Density) = 14.511 Million
Gender: Male, Female
Family Size: 3+ (80% of Age) = 11.609 Million
Family Life Cycle: All
Income: Above Rs 30,000/= 5.224 Million
Occupation: All except farmers and unemployed (60% of income) = 1.134 Million
                                                                                           
Psychographics:
Social class: Upper upper, lower uppers and upper middles (50% of occupation)
                      = 1.567 Million
Lifestyles: Achievers, Experiencers (90% of social class) = 1.410 Million
Occasions: Regular occasion
Benefits: Quality, convenience, pleasure (70% of life styles) = 0.9873 Million
User status: first time (45% of benefits) = 0.444 Million                            
Usage rate: Medium
Readiness stage: Unaware

 Therefore Market size is
NUMBER OF BUYERS = 0.444 Million
MARKET SIZE = NUMBER OF BUYERS * AVERAGE CONSUMPTION
THEREFORE 0.444 * 48per year = 21.312Million               

POSITIONING:


Positioning is the way the product is defined by consumers on important attributes.
Lipton is portrayed as a high quality product mostly catering to the affluent or the middle class; it portrays itself as a cosmopolitan, elegant, high class and sophisticated tea. It portrays itself as a “is a sign of good taste” through its slogan.
The Lipton cardamom tea is a flavored tea with a new aroma and taste. It is a value added to their previous image. They positioned their product in the mind of consumer as a new value added to the tea, offering core benefit of taste along with health.
Position their product as
·        High quality
·        High price
·        Great aroma
·        New taste
·        Exciting and refreshing

“CARDAMOM TEA FOR THE PERFECT TASTE”

REASONS TO LAUNCH THE PRODUCT:

Over the years, people’s lifestyle has been continuously changing. People have become very innovative and want to endeavor new things which can give them pleasure and comfort. The Lipton cardamom tea is the type of tea which has milk and sugar already added to it. It is a complete tea mixture to use. The target market of Lipton Cardamom Tea is the elite class; moreover, it targeted those people who want relaxation in the day to day routine work. This product is of high premium quality.
The launching of the product was to satisfy the need of target market by providing them taste, aroma, pleasure and convenience. It is an unsought good.

(Marketing Mix)4-PS OF LIPTON CARDAMOM TEA

Product:

The Lipton cardamom tea is of high premium quality and mainly to cater the upper upper, upper middle & lower upper class, and in that class it only targets the niche market, the people who are in universities, colleges and offices or the people who are going to shopping malls can drink this Lipton cardamom tea. It does not market the households. It only markets the elite class and professionals

Product concept:

Pleasure
  • Taste
  • Aroma
  • Flavor
  • Delight and Freshness
Convenience
  • Availability
  • Quickly Available
Health
  • Physiological functional claims
  • Benefits of Cardamom

Price:

Lipton cardamom tea pricing strategy isn’t quite effective. The product is costly. The tea vending machine costs around Rs.500000 to Rs.1000000. Furthermore, the tea is available in 1kg packet only and its costs around Rs.600. The cup of tea costs around Rs.15-20 depending on the place, and in comparison to normal tea it costs Rs.10. There is no other charm or appealing factor in the product accepts for the aroma and style. There are no discounts or allowances given on the product.

Place:

Lipton Cardamom tea is not available in all outlets. Since it’s of high quality and for niche segment, it’s only available in few whole sale markets and that too, it’s not available to household’s users. It is only available in wholesale. In Karachi, Makro super store and Metro Super Store has it.

Promotion:

The promotion strategy for Lipton Cardamom tea is quite poor. It hasn’t been advertised properly. Even though the company has healthy relations with people, there has been no personal selling done by the company for this product. Most of the people are unaware of this brand of tea, it is mainly due to the fact that it is not available for the households and the target market is limited. The sales promotion is quite low. Many people are still unaware if such a product even exists in market taken out by Lipton. Promotion is done only on magazines; even the Unilever website does not contain much information about it. You can hardly find anything on the website of Unilever or the search engines.

PRODUCT CLASSIFICATION AND CONSUMER BUYING BEHAVIOR

Lipton cardamom tea is an unsought product and has little awareness.

Buying Behavior:

The people buying Lipton Cardamom tea has Variety-Seeking Buying behavior, although Lipton plans to change it to habitual buying behavior.

Perceptual Map:                                                     

The product is of high quality and high price. The quality in the essence of cardamom and benefits of cardamom.

COMPETITOR ANALYSIS:

Competitors are the major threat face by every company in a market. Companies need to keep a careful check on its competitors. They have to keep into consideration that what other competitors is offering, at what prices, what quality, what benefits etc. Lipton cardamom tea is a newly introduced concept and it has not captured a very large market but still all major tea companies are its competitors.
The main competitor of Lipton cardamom tea is Tapal, which has the 41% of market share.

Tapal:


Tapal tea is one of the major competitors for Lipton in the tea industry. Its product range has achieved great popularity in Pakistan. Products such as tapal danedar and family mixture are the top selling brands of tapal, other brands are also gaining acceptance in the market. The company has enjoyed a phenomenal growth particularly during the last decade to expand its base in the branded market, which for long were dominated by multinational competitors. During the year 2009, Tapal ’s market share has increased. The market share
has risen as Tapal has won customers due to its strong taste and aroma backed by innovative products, for instance, in the same year; Safari was launched with the aim of ‘revolutionizing the taste buds of consumers with a stronger blend of tea ’ .Tapal has engaged in extensive promotion of its products. Another factor driving sales is relatively less prices. The increase in market share is evident from its increase in sales. Tapal has shown an increase of about 29%in sale revenue. This has been primarily Tapal has introduced a wide product range to meet the requirement of different taste and aroma of Pakistani culture. Tapal green tea has shown a rising popularity. It has introduced different flavors in green tea range. Recently tapal has launched ice tea which has been not as successful in the market. The major brands of tapal are:

  • TAPAL DANEDAR
  • TAPAL FAMILY MIXTURE
  • CHENAK DUST
  • TAPAL GREEN TEA:

              Jasmine Green tea
              Elaichi Green tea
                    Lemon Green tea

  • TAPAL MEZBAN
  • TAPAL TEZDUM
  • TAPAL GULBAHAR TEA
  • TAPAL SAFARI
  • TAPAL ICE TEA

RECOMMENDATIONS to build customer’s equity

·         They should make the product available for the households as well.
·         They should reduce the size of the packet.
·        Intense distribution.
·        Different promotion strategies to cater different markets. Different advertisement should make for the interest of different markets