Marketing Research Project on Vital Tea

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Pakistan is the third largest tea importer in the world after Russia and the UK and consumes about 155 million kg of tea every year (of which about 130 million kg is imported).On average, each Pakistani consumes about a kilo of tea a year, a total of approximately 155 million kg. for a population of around 150 million. The annual tea import bill, which this year may be more than US$200 million Vital Tea is a much known tea room in Pakistan. Eastern Product (PVT) Limited, managed by its owners, Mr. Haji Muhammad  Yaseen. He has 22 years of experience managing a successful business in not only Pakistan but also internationally. Although it is a successful company and generating reasonable revenue but it is needed to come forward in front of other competitive brands like Lipton Tea, Supreme Tea and Tapal Tea to give them tough time. For this purpose I have conducted research to collect the data which will help me to cope up these situations. I have taken one dependent variable (market share) and
three independent variables (taste, advertisement and distribution channel). On the other hand research objectives are to conduct the comparative study between Vital Tea and other prominent Players in the market and analysis of customer satisfaction and to find out the reason behind customer buying behavior while purchasing tea brands. For the purpose of research data collection I have used questionnaire and helped for generals to collect the accurate data. I have also explained marketing mix    Product, price, placement and distribution. Vital Tea has various categories in product packing size and quantity with different names in market. Price of the Vital Tea product is less than that of its competitors. But as placement and promotion mix is concerned, this brand has weak distribution channel and promotional activities relatively. They, actually, is still to reach their product on every required spot of the country as well as internationally. I have also analyzed this brand regarding SWOT and PEST analysis. Vital Tea has a lot of opportunities if they improve their distribution channel and advertising issues. It has strong competitors in the market and it has some economical and may be political threats as well.

Title of Research Project & Objectives

The explicit objective of the study is to fulfill the academic requirements of MBA Program. The implicit but major purpose is to be familiar with the Vital Tea and its marketing to national as well as International market. In order to accomplish this objective, the present dissertation covers the succeeding particular objectives:
1.     To highlight the present Market Scenario of Vital Tea.
2.     To examine the prospects of Vital Tea in the overall Pakistan Market.
3.     To identify the problems of Vital Tea not flourish as its competitors.
4.     To know the scenario of its improvement and image.
5.     To recommend some corrective measures, suggestions and recommendations to resolve the problems.
6.     To conduct the comparative study between VITAL TEA and other prominent Players in the market.
7.     Analysis of customer satisfaction and to find out the reason behind customer buying behavior while purchasing Tea brand
Overall Industry History

          Tea Industry in Pakistan

Pakistan, a country of tea-lovers due to the Islamic ban on alcohol, is one of the highest per capita consumers of tea in South Asia. Local tea importers speculate that this is due to a limited choice of beverages.
Pakistan is the third largest tea importer in the world after Russia and the UK and consumes about 155 million kg of tea every year (of which about 130 million kg is imported).On average, each Pakistani consumes about a kilo of tea a year, a total of approximately 155 million kg. for a population of around 150 million. The annual tea import bill, which this year may be more than US$200 million, highlights the importance of the country becoming self-sufficient in both growing and manufacturing tea. So far, these efforts have failed, and Pakistan continues to rely heavily on imported tea. In addition, consumers increasingly want better quality tea.
The tea marketing chain typically resembles one of two models. The first one, used mainly by large trans-national companies, is vertically integrated, with one company managing all the steps, from cultivation on large estates (which is often highly mechanized) to processing of tea bags. The second model can be considered more "traditional". The tea is grown in smaller gardens, which are often owned by a co-operative of producers, and is then usually marketed by national boards, as in India, Kenya and Tanzania. The fair trade movement has had an impact on the tea trade.
Tea imports from Kenya make up about 85 percent of the total import and India is in the second place. Smugglers bring in another 60 to 70 million kg. The import statistics for the month of April 2007 shows that 1.69 million kg tea is imported from India. Imports are mainly from Kenya and other African countries, while the two multinationals blenders import tea from Sri Lanka, Indonesia and Bangladesh. In addition, tea is smuggled into the country via the border areas of the NWFP and Balochistan. In KARACH the government is annually losing Rs 152 million in
revenue due to tea smuggling through Afghanistan, sources in the tea trade said. Pakistan has a 170 million kg tea market.
                                                                    Pakistan Tea Association chairman Hamid Saeed told Daily Times that the business of tea importers was badly hurt due to smuggling of tea. For the last couple of years PTA had been complaining to the authorities by writing letters and reminders to the Central Board of Revenue (CBR) and Anti Corruption Department. Every time it had been told that the authorities would consider this issue and inform PTA of the new government policies.
To curb the problem of smuggling, Pakistan Tea Association and major tea blenders, Unilever, Tapal and Tetley, are demanding that government should abolish all duties and taxes levied on tea imports


Introduction of Estern product (PVT)Limited.
CEO's Message: I started this business in 1991 with the philosophy to satisfy our customer needs, by establishing strategic relationships with all our distributors, retailers and end buyers, and building core competence in blending and packaging technology, we have and will continue to have a strong competitive position in today's market place furthermore, in anticipation of future changes, a vertically integrated company will be our strategic aim thereby strengthening our company's capability to serve the tea industry.
Company Profile: Pakistan is truly a rare land, home to different civilizations and diverse cultures. It was here in the verdant plains of Punjab one and a half decade ago, that a small movement began to bring the wholesome purity of nature back into the home and heart. A movement that lives by the spirit of Pakistan. A movement that is Eastern products (Pvt) Limited processing, packaging and marketing of Pakistan Tea specialties has not always been a Standardized affair. At least not until the Haji Mohammad Yasin founded the Eastern products (Pvt) Limited. In 1991 with a small tea factory that was to grow into a local giant on the bane of a single promise consistent quality. At the core of the group’s success is the sincerity and dedication of its team of highly qualified technical, financial and marketing expert.
The Group caters to the premium segment of the market and so must maintain exacting Standards of quality. So stringent are the quality specifications at every stage, that they have become a habit rather than being mere procedure. The Group’s plants have state-of art-technology and sophisticated Equipment.

Quality Control Department:
The Group caters to the premium segment of the market and so must        maintain exacting Standards of quality. So stringent are the quality specifications at every stage, that they have become a habit rather than being mere procedure.
The Group’s plants have state-of art-technology and sophisticated equipment. We believe it is vitally important that we maintain our first class reputation as dependable manufacturer of high integrity. While we endeavor always to offer our customers a first class standard of service, we seek to develop a relationship with them more as a partnership than simply as seller and and buyer
We believe that what we make is excellent in quality and consistency and that the support and marketing assistance, Alongside
the technical advice, that we can bring to our customer is of great help to them. It is our intention to continue our policy of becoming stronger players in tea trading.
 Our expertise in blending and our knowledge in packaging technology, we are able to fulfill our client’s requirements for
LEAFY, GRADES, DUST GRADES and SMALL GRADES TEA PRODUCTS.
We believe that a critical success factor in the industry is gaining sustainable competitive advantage in packaging technology. That is the main objective of our research team. Continual development, modification and production of machinery to meet current market requirement and future international business.
Vision statement:
                                   Adding Vitality to life and meeting everyday needs for nutrition, hygiene with brands that help people feel good, look good and get more out of life. Furthermore, we want to create sustainable world, in which human populations can continue to exist indefinitely with a high standard of living and health

 on the other hand, we want to establish the benefits  that
 Create positive influence in the society
 and create opportunities for good quality of life.

Our Mission:
Our main goal is to produce the most reliable and valuable products and services and to build core competency in blending and packaging technology. To increase sales in our existing markets, we focus on providing our customers with better value and to penetrate new strategic business areas is to add vitality to life.
We recognize that the world in which we operate is changing. Consumers are increasingly bringing their views as citizens into their buying decisions, demanding more from the companies behind the brands. They want companies and brands they trust.
In the future, our brands will do even more to add vitality to life. Our vitality mission will focus our brands on meeting consumer needs arising from the biggest issues around the world today – ageing populations, urbanization, changing diets and lifestyles
We see growing consumer need for:
  • A healthy lifestyle
  • More variety, quality, taste and enjoyment.


SEGMENTATION

 There are two clear segments of consumers in the market, branded tea consumers
and un-branded tea consumers. In Sindh, branded tea is consumed by most of the
cities, whereas in the rural areas both branded and unbranded are equally popular.
In Punjab, the city dwellers as well as a majority of rural areas are absolutely
brand loyal while unbranded tea is only popular in teashops and hotels. In Khyber Pakhtoonastan and  Baluchistan, 90% of the population still prefer the unbranded form as it gives them the chance of see and smell what they buy before paying for it. In addition, the mindset is such that now no other tea brand can compete because consumers are strongly brand loyal.


Demographic Segmentation:-

*    Age                                                  Above 3 years.
*    Gender                                            Male, Female.
*    Family size                                      1-2,3-4,5 above.
*    Income Level                                  Almost all people. 
*    Occupation                                      All categories.
*    Education                                        Educated and uneducated.
*    Religion                                            All
*     Race                                                Asian
*     Nationality                                     Doesn’t matter



 Geographic Segmentation :-

*    World region                                     Asia
*    Cities                                                  All major cities of Pakistan
*    Density                                              Urban-Rural    
*      Climate                                            Hot & dry
                                             
                
                  
Behavioral Segmentation:-

*    Occasion                                           Any occasion
*     Loyalty Status                                Not Significantly high
*    Readiness Stage                              Awake & interested
*    Attitude towards brand                 Positive & enthusiastic      
                            
                     

Psychographic Segmentation:-

*    Social Class                                        Every class
*    Lifestyle                                             Fulfilled, believers, experience makers
                                                                      

Marketing Mix (4 Ps)

The four of marketing Vital Tea are as follows:

1.PRODUCT
                The product Vital Tea has not exceptional but good image brand image in the mind of consumers. The quality of Vital Tea makes it different and offer best quality tea to its consumers. We believe in dedicating ourselves to achieve ourselves to achieve an outstanding quality in all our activities .Excellence is a journey and not a destination. Quality is a way of life to us.

*    Trade name: 
                                               Vital tea , a Eastern Product (PVT) Limited

*    The actual product:
                                                              Tea Beverage

*    Branding 
                                         Yellow aspect of refreshing, hard pack and soft pack both also tin                                             pack and  plastic Packing.
*    Brand personality & Brand equity:

·        Freshness, Healthy, Innovative, quality etc.
·        Vital Tea provides a quality, consistent, innovative and accessible tea reputation
·        Marketing considerations Product life cycle.
·        It is a product at its growth level so they are finding new multiple segments.

  2.PRICE

Vital Tea has never wanted to compromise on quality so they adopted value based pricing. The pricing strategy that they are following for Vital tea is cost oriented as the price that it is taking comparatively low then its main competitor. Its price we can say that varies according to cost and even in high quality.

                                                  Products with Prices
                                                                                               As you know that prices are selected up to date because prices don't remain constant.So, select the prices with current rate.


 For example,  10 sachet is for 4 rupees

3.Placement:

                          Distribution plays an integral role in any company whether it’s a FMCG or utility
Good. Vital tea has a distribution network spread across the large area of Pakistan. The growing image and popularity of the brand is so much making it the strong competitor of other tea making brands in Pakistan. Vital Tea caters to its customers by providing Vital tea  to more than 50000 outlets in Pakistan, which includes super stores, general stores, grocery stores and discount stores and all departmental stores.

                                         Vital tea has its headquarter in Haroon Abad and more than 200 distribution offices all over Pakistan. The role of distribution in the marketing mix is to deliver a product to its target market or final consumer. Between the manufacturer and the final consumer stands a set of intermediaries performing a variety of functions. These intermediaries constitute a marketing channel also known as trade channel or distribution channel.

Vital Tea has distribution channel as follow:


 Manufactur________WholesaleR________ Retailer ________Consumer

Channel of distributions according to this brand is simply as shown by the diagram as manufacturer to distributors who vary according to geographical dispersion and then to retailer to final consumer.. TAPAL has 5 main warehouses in Pakistan which are located in the following cities.

1. KARACHI
2. Lahore
3. NAWAB SHAH
4. MULTAN
5. RAIWIND

From these warehouses the product moves to the distributors. And from these distributors the product move to the next, which is retailer and then to the consumer.

4.Promotion:

Vital tea does it promotion in following ways.
The company uses different promotion techniques they provide different items to                      people such as:
*    Caps
*    Cups.
*    Printed T-shirts.
*    Discounts.
*    Cars & Motor Cycles Scheme. NOW in Multan Division and Rawalpindi.
The company is different sales promotion techniques at different time of the year depending on the sales of the product.

Electronic Media :

The company is spending a lot on electronic media. In there advertisement they hire renowned celebrities.
Advertisment:

Vital Tea uses different types of advertisement as follows
Television:
         Vital Tea spends on television advertisement. Commercial during cable  network movies, TV shows.
Magazines:
                       Full page advertisement including Akhbar-e-Jahan, Khabrain Family Magazine, Fashion & Business Magazine. 

SWOT Analysis

All organizations should understand their operating environment as it allows them to take advantage of the opportunities and minimize threats. The following analysis illustrates the environment of Pakistan in which Vital Tea will be operating:-

Strengths


*         Experienced and Quality Management.
*         Strong Ethical value (culture and heritage).
*         Highly Innovative.
*         Strong Company image
*         Quality & Variety
*         Effective & Attractive Packaging
The strength of the company would be the innovation and the high quality products. Because of these the company is able to survive in the market and still earning a good market share comparing to its competitors.


Weaknesses

*            High prices of the Product.
*            Substitute Products.
*            Lack of Advertisement.
*            Weak Distribution Network.
          Comparatively less Frequent Schemes and Discount Packages

Opportunities



*      Brand is the part of traditional drinking habits.

*      Quality Control Department.

*      Comparatively less product prices.

*      Huge gap to cover the area and enhance business.

*      Export in other country making its image in Pakistan.

*      Launching of tea Bags.

One of the greatest opportunity that Vital Tea has its huge market which is increasing as the population is increasing. Tea has become a staple product in Pakistan which cannot be denied at any stage of age.



Threats



*      Strong completion in rural and urban areas.

*      Internationally increasing tea prices.

*      Political conditions in the country may be obstacle to exports.

*      High inflation in the country can negatively affect the brand.

One of the major threats that Vital Tea has it is its area of the market which is not educated and it is using the loose tea which may not be good for their health as well. Vital Tea claims that it is not possible for them to create such a big awareness for them but the Government should play his role so that these people should have some awareness of the imported loose tea.




Political.
The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. You must consider issues such as:

*      Unstable Government.
*      Tax Policies.
*      Changing Laws.
*      Government's position on marketing ethics.
*      Behind the Scene Lobby.


Economic.

Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. Economic factors that can play effective role in this business are:
*      Interest rates.
*      The level of inflation.
*      Long-term prospects for the economy Gross Domestic Product.
*      Increasing tea prices internationally.
 Economic conditions affect how easy or how difficult it is to be successful and profitable at any time because they affect both capital availability.


Social.

The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include:
*    Socially Acceptable
*   Heavily consuming in every class of Family.
*    No impact and effect of religion and language.

 

Technological:

Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points:
*    Quality control Department.
*    Use of latest technology for packing.
*    Use of technology in CRM.
*    Use in Advertisement.   



METHODOLOGY OF THE STUDY & RESEARCH

A method involves a process or technique in which various stages or steps of collecting data are explained and the analytical techniques are defined.

This research is an elaborate study to enable us to understand the whole scenario of Vital Tea Tea in the Pakistani  market. Collected data and information were tabulated, processed and analyzed critically in order to make the paper more informative, fruitful and purposeful.

In preparing this report I have used data and information of the following category:

a)     Primary data
b)    Secondary data

The primary data had been collected by direct interview, informal discussions and specially questionnaire.
Most of the data have been collected from secondary sources. The secondary information is collected from various books, research papers, and documents, articles related with the Tea Plantation, etc. 

 QUESTIONNAIRE


The purpose to use this tool is to get the data which will help me to cope up with the situations that is hindrance for the Vital Tea to give tough time to other related brands and get market share as maximum as possible.

1. The brand you like the most.
 a) Vital Tea        b) Supreme Tea     c) Lipton Tea     d) Other

2. Supreme and Lipton Tea have better taste than Vital.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly  Disagree

3. Vital Tea is easily available at your locality.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly Disagree

4. Supreme and Lipton Tea display more print and electronic advertisements than Vital Tea.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly Disagree

5. Both brands have stronger distribution channels than Vital Tea.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly Disagree

6. You purchase other brand if your required brand is not available.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly Disagree

7. Vital Tea shows more print ads on sign boards and in popular news papers like The News, Don News and The Nation than other tea brands.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly Disagree

8. Supreme and Lipton Tea have more attractive advertisement than vital Tea.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly Disagree

9. Vital Tea should introduce ice tea with different tastes like Lipton tea.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly Disagree

10. Vital Tea should extend their product line regarding taste.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly Disagree

11. Vital Tea should increase its warehouses as it has only five in Pakistan.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly Disagree

12. Advertisement, better taste and availability can increase the market share of Vital Tea.
Strongly Agree  Agree   Somewhat Agree   Disagree  Strongly Disagree

13. Suggestions _______________________________________
                     



                             

 


Name     ________________________
Gender _________________________
Occupation ______________________
Contact No. ______________________



USER PROFILE.
Total Respondent 50
Lipton Tea
22
            Supreme Tea
18
                         Vital Tea
10



SUPREME AND LIPTON TEA HAVE BETTER TASTE THAN VITAL TEA.
Total respondent 50
Respond
No of Respondent
Strongly Agree
24
Agree
16
Somewhat Agree
7
Disagree
2
Strongly Disagree
1





VITA TEA IS EASILY AVAILABLE AT YOUR LOCALITY.
Total respondent 50
Respond
No of Respondent
Strongly Agree
1
Agree
5
Somewhat Agree
16
Disagree
18
Strongly Disagree
10


SUPREME AND LIPTON TEA DISPLAY MORE ADVERTISEMENTS THAN VITAL TEA.
Total respondent 50
Respond
No of Respondent
Strongly Agree
28
Agree
15
Somewhat Agree
6
Disagree
1
Strongly Disagree
0


VITAL TEA HAS COMPARATIVELY WEAKER DISTRIBUTION CHANNEL.
Total respondent 50
Respond
No of Respondent
Strongly Agree
31
Agree
16
Somewhat Agree
2
Disagree
1
Strongly Disagree
0


SUPREME AND LIPTON TEA HAVE ATTRACTIVE ADVERTISEMENTS THAN VITAL TEA.
Total respondent 50
Respond
No of Respondent
Strongly Agree
25
Agree
11
Somewhat Agree
8
Disagree
4
Strongly Disagree
2


VITAL TEA SHOULD INTRODUCE ICE TEA WITH DIFFERENT  TASTE. 
Total respondent 50
Respond
No of Respondent
Strongly Agree
19
Agree
12
Somewhat Agree
14
Disagree
2
Strongly Disagree
3


VITAL TEA SHOULD EXTEND ITS PRODUCT LINE REGARDING TASTE
Total respondent 50
Respond
No of Respondent
Strongly Agree
14
Agree
27
Somewhat Agree
7
Disagree
2
Strongly Disagree
0


              VITAL TEA SHOULD INCREASE ITS WAREHOUSES.
Total respondent 50
Respond
No of Respondent
Strongly Agree
11
Agree
19
Somewhat Agree
16
Disagree
2
Strongly Disagree
2


ADVERTISEMENT, BETTER TASTE AND STRONG DISTRIBUTION CHANNEL CAN INCREASE THE MARKET SHARE AND BRAND AWARENESS OF VITAL TEA.
Total respondent 50
Respond
No of Respondent
Strongly Agree
32
Agree
14
Somewhat Agree
4
Disagree
0
Strongly Disagree
0


         HYPOTHESIS                           
 Regression Analysis

Hypothesis:
                         Ho: Taste, advertisements and strong distribution cannot cause to increase market share of Vital Tea.
                         H1: Taste, advertisements and strong distribution can cause to increase market share of Vital Tea.



Coefficient of determination.(R-Square):
                                                                              Coefficient of determination of this regression analysis is 72.3% which shows that market share is 72.3% depending upon the taste, distribution and advertisement of Vital Tea. It means that 27.7% other variables which are contributing in relation to market share.



Adjusted R Square:
                                 Adjusted R Square is that coefficient of determination which is we can say that, error free result. When we deduct the standard error from coefficient of determination then we get adjusted R Square. In this analysis adjusted R Square is 70.5%.


Standard Error:
                          Standard error is the difference between the coefficient of determination and adjusted R Square.

Interpretation of ANOVA Table:
                                                           Since f calculated value is greater than f table value therefore Ho is rejected. It means customer satisfaction depends upon the price, distribution, quality and advertisement. F table value is 2.23 which is smaller than f calculated value. Its means market share can be increased by taste, advertisement and distribution channel of Vital Tea.

Interpretation of Coefficients:
                                                  If we increase 1% taste expenses it will contribute 0.501% to increase market share. Similarly if we increase 1% advertisement it will result to increase 0.105% market share. Same is the case with the distribution of the Vital Tea. By increasing 1% expense or investment on distribution channel causes to increase .299% of market share.


OUTCOMES

1.     According to my research, Vital Tea has just 18%          usage from 50 respondents
         Whereas Lipton Yellow Label Tea has 46% and Supreme Tea has 36%.
2.     People like the taste of competitive brands more than Vital Tea.

3.     On a large number of retail stores, Vital Tea is not available easily.

4.     Vital Tea is weak in advertisement as well as in trade channels or distribution 
         channels.
5.     People show more loyalty other than Vital Tea.
6.     Most of the respondent also viewed that Vital Tea should introduce cold coffee.

7.     One respondent is of the view that Vital Tea would have more attractive brand if they
         assign the slogan “VITAL FOR LIFE” to their brand.
8.     Most of the respondents like or use the tea brands    because of taste. Other aspects
        like quality, price etc is ranked after taste.
9.     87% respondents were agreeing that Vital Tea can increase its market share by
         better taste and quality and frequent and attractive advertisements.
10.   From secondary research data, Eastern Product (PVT) Limited is only 19 years old 
       even then it is working very good whereas its competitors are in the market several 
       years ago than Vital Tea, so it requires some time to compete and give very tough 
       time to their competitors and get market share as maximum as possible. 

SUGGESTIONS, RECOMMENDATIONS

1.     Vital Tea has good quality but as we know that it has strong competitors in the market so, to be strong opposition, it should enhance level of quality.

2.     If the nature of your product is FMCG, distribution channel has very importance. Vital Tea has weak in trade or distribution channel. So, they should emphasize on distribution network.


3.     They should increase their print as well as electronic advertisements and display them frequently on local, national and international channels like GEO TV, ARY network etc.

4.     Like Lipton Tea, they should extend their product line as Lipton is offering in different tastes.


5.     They should also offer T-bags.

6.     They should offer more schemes on events and occasions.

7.     For the sake of promotional activities, they should organize social, educational and sponsorship regarding activities with different kinds of service organizations.

8.     To increase overall company revenue and market share, they should diversify in other product line which match best with their resources.
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