ACKNOWLEDGEMENT

We would love to express our gratitude towards our lecturer of the course Mkt382, Mr.

Mohammad Riasat Amir, for helping us immensely by enhancing our knowledge on topics

related to international marketing and making the course an enjoyable one. As well, all the group

members are thankful to each other, for contributing the best effort, each of us possibly could.

Executive Summary

M. M. Ispahani Ltd. is a very well figured company in Bangladesh. Since 1980 Ispahani Ltd. Is

operating its business in Bangladesh. The company mostly renowned for famous “Ispahani Tea”

brand across the country as well as foreign countries. ISPAHANI has a long history of providing

the highest quality tea while serving the community at large. Their teas are well known and

appreciated in Bangladesh. It is the group which is pioneer in many fields & remains one of the

most successful & respected business in all over Bangladesh. Today they are the largest tea

trading company in the country and dominates the domestic tea market, capturing more than

50% of the national branded tea market and near 80% of the branded tea-bag market. Ispahani

Tea is renowned all over Bangladesh and its bestselling brands such as Mirzapore Best Leaf and

Mirzapore Double Chamber Tea Bags are household names. The company has enjoyed the

leadership position in the market since the 1990’s & has it throughout these years. In doing so,

the company has developed an incomparable distribution system along with ensuring splendid

quality & highest customer satisfaction. The strong presence of different local and MNCs has

been a constant threat to Ispahani. Still the company has sustained its leadership position all

these years by maintaining its quality and assured services through their loyal & faithful

customers. Today or tomorrow, this consumption would exceed the national production and this

national production will be emerging throughout the world in a way that the company will have

to make a new way to meet the market demand nationally as well as internationally by adopting

various initiatives. Till date Ispahani Tea is being imported in UK, Qatar, Bhutan, India and

Singapore. It is high time the company start business in other countries as a part of business

expansion. For this reason we have considered Canada as the next country where Ispahani should

go and expand their global business. The following report contains a marketing plan for

expanding Ispahani Tea business in Canada.

Table of Contents

List of figures, Tables and Matrices

Introduction

The Ispahani has been involved in business in South Asia since 1820. Mirza Mohammed

Ispahani established the Calcutta office of M.M. Ispahani & Sons in 1900. Mirza Mohammed

Ispahani’s eldest son, Mirza Ahmed Ispahani, joined the partnership in 1918 and, with his

younger brothers, Mirza Abol Hassan Ispahani and Mirza Mahmood Ispahani, established the

private limited company, M.M. Ispahani Limited, in 1934. In 1947 the corporate Head Office

was moved to Chittagong, where it stands today. With corporate offices in Chittagong, Dhaka

and Khulna and, through its tea, textile, jute, property, poultry and shipping divisions, the Group

employs approximately 10,000 people.

The Ispahani Group is a pioneer in many fields and remains one of the most successful and

respected business houses in Bangladesh. It is the largest tea trading company in the country and

dominates the domestic tea market, capturing approximately 50% of the national branded tea

market and 80% of the branded tea-bag market. Ispahani Tea is renowned all over Bangladesh

and its bestselling brands such as Mirzapore Best Leaf and Mirzapore Double Chamber Tea Bags

are household names. The company has an unrivalled distribution network of over 490 sales

centers under 20 zonal offices in the whole country.

So by this time we are planning to export this products and grab our market in Canada. Because

in Canada everyone drinks coffee and besides that Canada is a low-temperature country and if

we can introduce tea over there with flavored and non-flavored and make them feel worthy and

appeal of it then it would be a huge as well as unbeatable market for us to start up the tea trend in

Canada.

The audience for tea is changing as rapidly as the market for tea is expanding. What was once

predominately male & female, older consumer, has evolved into a much broader target audience

depending upon the specific segment and drinking occasion.

Historically the average purchaser of tea bags in North America is middle aged people in

between 35-55 years of age. The consumers of the beverage prepared were also little older than

the average dispersion of age within the population. This indicated that younger people were not

being introduced to the joys of drinking tea & new consumers were hard to come by.

Since coffee shops in Canada will not appreciate to promote tea in their country, we need to look

after at low costs, brand recognition, wide exposure etc.

In order to represent and promote the company in the North American market and to business

there, we also need to maintain the relation with foreign partners, experience of local authorities,

suppliers & distributors channels need to be strong. As well as reducing the risk of the foreign

partners competing with us.

Research Methodology

Basically the research on Ispahani Mirzapore tea is qualitative and secondary research is based

on treatment of data & data collection method. More deliberately it is an action research. Before

entering into a new international market, new country and global market, firstly we certainly

need a huge information about that country (Canada), the country culture, the country people, the

demographic & geographic perception, how to be emerged and many more. And what are the

preliminary problems as well as how it can be solved. That’s why this qualitative research we did

in our project.

To be noted more, we also had to overview on the whole Canadian statistical data's , their

archival documents including very accurate observations on the total tea market and its industry.

Based on objective of research lastly we’ve experimented through exploratory research which

show us the patterns, distributions, relationships & trend evolutions of original tea trade

circulating throughout the whole Canadian & North American zone. And from where we’ve

found our target market , market segmentation , strategies to enter the market, strategic planning,

budgeting, 4p’s of marketing, buyers and sellers distribution channel, consumer behavior and

many more.

Point to be noted, we were unable collect the data primarily from authentic sources. So this limits

the reliability of the data. That is why all we are depending upon the secondary sources of

information from the web. Which becomes a limitation for the accuracy of the research findings.

3.1 Situational Analysis

Company analysis :

Established since : 1820 Company place of birth : Calcutta , India Headquarter : Chittagong, Bnagladesh Business type : Partnership Product category : Tea, textile, jute, property, poultry and shipping. People employed : More than 10000 Industry : Conglomerate Founder : Mirza Mohammed Ispahani

/

Business type : B2B & B2C (Private) Certified type : Ispahani achieved ISO 9001:2008certification for its quality

management system. Mission :Achieving the excellence in consumer satisfaction by providing top quality tea .To create a dynamic & proactive environment for the employees. Be a developer in the industry

Move forward and grow at the same time consolidate our position based on the consumers.# Market : Local & International both

# Tea chamber category : The double chamber tea bag, the “stand up” pouch, the food grade jar, the three layer pouch, the 10 gms easy pack, the “bag-in-bag” and the zip lock packet.# Tea product variations : Mirzapore Best LeafMirzapore Tea BagBlender's ChoiceZareen Premium Tea

/ /Green Spot FlexHotel DustMirzapore BOPMirzapore PDMirzapore RDLion LeafLion DustMayurFive StarSuperior Tiger

Tea Stall SpecialHot Tea Stall#Currently Targeting : The tea department selects, blends and packs the finest Bangladeshi teas for both the local and international markets. It locates itself on quality and achieves as well as provides a very high degree of customer satisfaction. Best selling brands such as Mirzapore Best Leaf, Mirzapore Double Chamber Tea Bags and Blenders Choice are market leaders and household names in Bangladesh. The latest addition to our range of brands is "Zareen - Tea for Her" targeting the top end users. # Market Leader : By serving and providing highest quality of tea grade Ispahani Mirzapore is standing on the market leading position till now.#Awards :2003 - Enterprise of the Year - Bangladesh Business Awards2004 - AmCham Business Executive of the Year (for managing director M. Salman Ispahani) - American Chamber of Commerce in Bangladesh /

Organizational Assets & SkillsMirzapur tea estate is a huge and antique tea garden in Bangladesh, which was founded in 1890. Mr. Mohammad mirza Ispahani (M.M.Ispahani) most famous reformer and successful businessman started at first 1956. Since then the name of this tea garden converted into Mirzapur Ispahani tea estate. Today the owners of this tea garden are the sons of Mr. Mohammad mirza Ispahani and the chairman of the Ispahani limited is M.M Behruz Ispahani. The Mirzapur tea estate is located at mirzapur. 10 kilometer far from the Sreemangal in Moulvibazar. It covers a large geographical area, that covers Mirzapur, voulachara, kandipara, Vonobhir, Madabpur, Nichunpur and many more. The total ground of the land of the Ispahani tea estate 1498.81 hectors. Management of this tea estate thinks that mirzapur

ispahani is the market leader of whole tea estate in Bangladesh. In this current year they are producing 9, 50, 000 kg tea and this production are increasing enormously. #Competitive strategy :

The Ispahani group has been the all-rounder in numerous fields and has achieved the highest success in its many endeavors. It’s been the household name & largest tea trading company in all over Bangladesh. It regulates the tea market by capturing more than 50 percent of the national branded tea market & 80 percent of the branded tea-bag segment. Now-a-days people identify Ispahani Mirzapore as “Mirzapore Tea” company. The one of the biggest & strongest strengths of this group is rapid investment in infrastructure to ensure quality production. Mirzapore tea company has it’s own factories and own tea gardens to produce teas to the highest satisfactory level with amising combination of tremendous quality service rather than any other companies in Bangladesh. It’s one of the largest tea company in Bangadesh whose tea department selects, blends & packs the finest Bangladeshi teas for both local & international markets.

#Turnover & Export : Yearly Turnover of this group is more than expectation. According to the survey if 2003 this company amounted to more than Tk.200 croreAnd the yearly export is Tk 82.7 crore bringing the cumulative total amount

exported in the last five years to about Tk 263.8 crore.

#Potential customers: Ispahani Mirzapore serves the highest quality of tea products in national & international market at the reasonable prices. And after a time gap they try to improve their tea qualities with new design as well as increase the varieties of tea. This time Ispahani Mirzapore has come up with a tea named as “Zareen” for the health conscious , productive young ladies. And there is also red teas, ices teas, slim teas & many more. And thus like this if we can promote these tea categories in Canada that will be easier to grab the Canadian market & potential customers will be influenced to buy Ispahani Mirzapore tea.

#Marketing Strategy : Ispahani Mirzapore tea applies broad differentiation strategy with 7p’s of marketing. And this way the company is emerging day by day.

Y IA

#Unique Selling propositions : Mirzapore tea is the only product which is selling locally and internationally both. By this time the new product named “Zareen” falls under tea category is taking place everywhere.

Peolple

Purpose

Platform

Plan

Policy

Produce

Performance

PESTLE Analysis (Political, Economic, Social, Technological, Environmental & Legal)

The PESTLE Analysis is a framework used to scan the organization's external macro environment. The letters stand for Political, Economic Socio-cultural, Technological, Legal and Environmental. Some approaches will add in extra factors, such as International, or remove some to reduce it to PEST.

Political Environment (Canada) :Canada is a confederation of ten provinces and three territories, with a central federal government managing national services and international relations. Each province and, to a lesser extent, each territory has constitutional sovereignty over at least some aspects of its affairs. Each level of government is a constitutionally governed democracy, modeled on the British parliamentary system with representatives chosen in statutorily scheduled elections. Suffrage is universal for all citizens over the age of eighteen, except, in some instances, those in prison or citizens living overseas. Political control at each level of government is determined by the political party that wins the largest number of representative seats, not by proportion of popular vote. The election of each representative, however, is direct

and proportional, the winner being the candidate who receives the single largest percentage of the votes cast.

With the growth of multinational corporations and the vertical integration of entertainment, distribution and delivery systems and products, national policies are shifting and adapting to address these changes.

The trend to more open markets and a free trading world make it more challenging to negotiate trade agreements that recognize cultural diversity and the unique nature of cultural products.

As a nation, they believe in the benefits of open markets, but more concerned about the effect that global trade, combined with rapid technology change, may have the approximal ability to promote the tea trade in Canadian culture.

#Economical Environment :

Basic Economy

Canada is a resource rich, but land and people poor, country. While physically vast, there are geographic limitations on where people can live such that most of the population is located around the Great Lakes, and in the Saint Lawrence River Valley. This has meant, however, that the natural resources throughout the country can be exploited more fully.

Key to Canada's basic economy is its role as a resource base, not only for its own manufacturing, but for export as well. Minerals and ore, forestry products, and in particular in the twentieth century, oil and gas, have been the foundation of the Canadian economy since European conquest of the area.

Farming is also key to the Canadian economy, although most of Canada's agricultural production s exported, primarily though not exclusively, to the United States. This is a function of the scale of agricultural production in Canada in relation to the smallness of the Canadian population. Very few Canadians produce at the subsistence level; so few in fact, that it is fair to say all agricultural production in Canada is production for sale. Equally important, even that agricultural production consumed in Canada itself is not sold directly by producers

to consumers but rather through a network of secondary distributers. Because of the shortness of Canadian growing seasons, a significant portion of all food consumed in Canada is imported from elsewhere in the world.Canada has experienced the strongest growth in employment among G-7 countries during the recovery

#Results Achieved

The following section reports on key overall results achieved under the stimulus phase of Canada's Economic Action Plan. Actions taken during the stimulus phase are divided into six themes:

Reducing the Tax Burden Helping the UnemployedBuilding Infrastructure to Create JobsAdvancing Canada's Knowledge Economy and Creating Better JobsSupporting International Industries and CommunitiesImproving Access to Financing and Strengthening Canada's Financial System

#Tax Relief for Creating Businesses

A competitive business tax system is essential for creating an environment that encourages new investment, growth and job creation in Canada. In 2007, Parliament passed a bold tax reduction plan that lowered the federal general corporate income tax rate from 22.12 per cent in 2007 (including the corporate surtax that was eliminated in 2008) to 15 per cent in 2012. The stimulus phase of the Economic Action Plan built on these corporate income tax reductions to help position businesses to weather the effects of global economic challenges, invest in Canada, and spur innovation and growth—thereby creating more and better-paying jobs for Canadian workers.

As a result it will be a huge advantage to cultivate tea production in Canada.

Social & Cultural Environment :

Canadian culture -- ideas, songs and stories -- gives meaning to who they are as Canadians. Through cultural products, such as sound recordings, books and films, we express ideas and perspectives, and they share stories and images that are uniquely Canadian -- among their selves and with the rest of the world.

Cultural products are "brain and soul foods" that help us communicate with others and share differing views. They entertain, and they inform. They help shape our sense of identity. They add richness to their lives.

In Canadian books, magazines, songs, films and radio and television programs, they are able to see and understand everyone easily. They develop a more cohesive society and a sense of pride in who they are as a people and a nation.

So as a socially well cultured environment and for spending time with a kind gesture & well mannered way Ispahani Mirzapore tea can be a great influence to capture the market in Canada.

Technological Environment :

Digitization and the convergence of the broadcasting, cable, satellite and telecommunications sector are creating new technologies, which will compete with existing distribution systems. At the same time, there will be even greater opportunity to distribute Canadian content both at home and abroad. With the flow of time the road and transport are getting much developed. As well as sea way, air cargo system is getting better with the time. Now a days Canada is more emphasizing on better communication & digitalization system. So as a result it will be a great opportunity if we can start up our business with right hit to the time.

Environmental Environment : Environmental decision-making in Canada takes place in a complex array of jurisdictions, with multiple social and economic priorities, differing stakeholder interests, complex scientific knowledge, international considerations, and priorities of Canadians. Canada is a country of vast distances and a dispersed population, an economy driven by production and export of natural resources, a northern climate, and of high population growth. The Canadian economy is highly dependent on the health and sustainability of our natural resource industries (renewable and non-renewable), and the reliability of our critical infrastructure, including transportation and health care systems. The direct and indirect contribution of the natural resources sector to the Canadian economy is estimated to be between 20 and 25% of Canada’s gross domestic product (Statistics Canada, 2008a). Canada has a small, open economy which means we are dependent on two-way trade.

A large proportion of Canada's economic output is exported, and 40% of those exports are energy-intensive, resource-based commodities such as oil and natural gas (Environment Canada, 2007).

Similarly, Canada imports 31% of our domestic consumption and, of that, 54% comes from within North America (Statistics Canada 2010a, Statistics Canada 2010b, and Statistics Canada, 2009a). The North American economy is highly integrated and there is a great deal of harmonization and alignment of a range of policies, regulations, and standards. Thus, Canada needs continued access to international markets, particularly the U.S. And if we can set up with a free trade agreement or custom union law then it will be a huge impact for doing business in Canada for us.

Legal / Regulatory Environment :Like other governments, Canada imposes rules on foreign ownership in selected important sectors as part of its cultural policy. It does this primarily through provisions in the Investment Canada Act. Under the Investment Canada Act 1985, any foreign investment in a cultural industry is reviewed.

Canada's policy states, inter alia, that foreign-owned companies may not sell books as a primary business activity, and that new businesses must be Canadian-controlled, and that the foreign acquisition of existing Canadian-controlled business is allowed only in extraordinary circumstances.

In 1988, the government developed foreign investment guidelines designed to generate funds for the Canadian film industry and to strengthen the Canadian film distribution sector. The guidelines prohibit foreign takeovers of Canadian-controlled distribution firms and allow foreign takeovers of foreign-owned firms only when investors agree to invest a portion of their Canadian earnings in developing Canadian culture. Under the guidelines, foreign investors who START NEW BUSINESSES are only allowed to distribute their "proprietary products" (i.e. films for which the distributor holds world rights or is a major investor). This restriction applies only to new businesses, established in Canada since the guidelines were introduced in 1988, not to distribution firms then operating in Canada.

At the same time, foreign investors can provide much needed capital and important strategic alliances for the cultural industries. In its policies, the government balances the need to encourage investment with the goal of ensuring that Canadian cultural industries stay in Canadian hands.

And however with the other foreign countries their approach is much more straight forward & welcoming except film industry. And maximum time the issue of emerging business in Canadian market is much more enthusiastic & welcoming.

And if Ispahani Mirzapore can donate for their film industry then there must not be any barriers for doing business according to the regulatory system. And Canadian people are more health conscious , so as per our survey we find out that the tea business will create the great markets in Canadian culture if it rise once.

#Location and Geography :

Canada is located in the northern portion of the continent of North America,

extending, in general, from the 49th parallel northward to the islands of the Arctic Ocean. Its eastern and western boundaries are the Atlantic and Pacific Oceans respectively. Its land area totals 3,851,809 square miles (9,976,185 square kilometers). The easternmost portion of the country is a riverine and maritime environment, consisting of the provinces of Newfoundland, Labrador, Nova Scotia, Prince Edward Island, and New Brunswick. The central portion of the country, in its southern areas, is primarily boreal forest (the provinces of Ontario and Quebec). This forest region extends across the entire country from the eastern slopes of the Rocky Mountains through to the Atlantic coast, and is dominated by coniferous trees. A section of the country westward from the Great Lakes basin along the southern extent of this forest region is a prairie made up mostly of flat grasslands (in the provinces of Manitoba, Saskatchewan and Alberta). The westernmost portion of the country is dominated by the Rocky Mountains, with a narrow riverine environment, made up of northern rain forests, west of the mountains (in the province of British Columbia). Between the southern Carolinian forest of the central regions of the country lies a region in Ontario and Quebec characterized by numerous lakes and expanses of exposed rock known as the Canadian Shield, an area left exposed after the most recent glacial retreat. Across the northernmost portion of the country from east to west lies a region dominated by tundra and finally at its most northern reach, an arctic eco-zone (in northern Ontario and Quebec and in the territories of Nunavut, Northwest Territories, and the Yukon).

Demography The official population at the last census calculation, in 1996, was 29,672,000, an increase over the previous census in 1991 of about 6 percent in five years. The previous five-year increase was almost 7 percent. There has been a slowing population increase in Canada over the last several decades, fueled in part by a decline in the crude birthrate. This slowing of growth has been offset somewhat by an increase in immigration over the last two decades of the twentieth century, coupled with a slowing of emigration. Statistics Canada, the government Census management organization, is projecting a population increase of as much as 8 percent between 2001 and 2005, mostly through increased immigration.

Nature of Demand :

*Background

The landscape in Canada is changing as consumers’ needs and wants evolve. There is a massive noticeable shift is in the area of “premium food and beverages”. Producers and processors can better align their business, through the products, processes and services they deliver.

It highlights some of the subtle differences between urban and rural settings in regards to premium products.

Four common motivators to purchasing premium food and beverages:Health/ Nutrition, & Wellness – products that are more natural, free of additives,

“better for your health”, and the “freshest.” The specific reasons varied among age groups. Younger people recognize the consequences that certain food choices have on their health. Some older Canadians, those with more time or close to retirement, spent more time on their meal planning. Some are better able to afford better quality and foods they enjoy. Some foods sought out are those with Omega-3s or Vitamin D to maintain health.

Convenience/ Immediacy - this is not static, but evolves with changes in household size, household composition, the degree of busyness, and suitable portion size per household (i.e., older consumers, or one- to two-person households).

Indulgence/ Luxury – products are those that fulfill some emotional or personal needs (e.g., a reward, something exotic for a meal, or a rich dessert to celebrate, to show appreciation, to share, impress, treat or enjoy life, or a small luxury they can afford.)

Production Value & Ethics – consumers are also concerned with the needs of others; considering how personal food choices impact the environment, the welfare of animals, local farmers, and their own economy. Consumers have an increased awareness that products and foods are harmful to the environment and some will select foods to “support the health of the environment” and contribute to “less waste”. There is more trust in “organic” or “locally produced”, perceiving these products to have higher production standards, a greater sense of integrity and a perception of being more transparent. Consumers wanted to support farmers right in their own community; these values were more evident where people lived closer to the

food production areas in the country (i.e., Charlottetown, Moncton, Woodstock).

Although premium food and beverages were often purchased on weekends and for special occasions, they may also be moving more into the mainstream (becoming more the norm, with little or no rationalization by consumers for the purchase). (This is supported both by literature reviews and focus group participants). If consumers have a link between health and diet, then their willingness to pay for products relevant to a healthier lifestyle increases as they accept that living healthy is an everyday commitment. Often during special occasions, the food/beverages served act as a focal point for the event. While weekends are a time when consumers are more likely to shop for something special or a treat, for some they are a time to “experience” cooking at home, and for others they are a time to “avoid” cooking at home.

Barriers to introduce:

Cost, price & value – depends on consumers perception.

Real value of the tea must be determined by the consumers with reasonable

price & values.

Audience/consumer – Audience must be considered of likings & dislikings.

Excess packaging – Authentic packaging indicates the signal of a premium product.That must be taken care of .

Purpose/Use of Product – Whether the product is for everyday use or long termOr short term to be indicated.

To find products in grocery stores labelled as local but brand is foreign made.No difference in taste/quality – Quality must be served.

If this qualities we can take care of then it will be to easy for us to flourish all over Canada and establish our Brand Value with a short period of time.

Referencing: http://www.ispahanifoods.com/about/http://www.canadabusiness.ca/eng/page/2863/http://www.euromonitor.com/hot-drinks-in-canada/reporthttps://en.wikipedia.org/wiki/Demographics_of_Canada

https://www.osler.com/en/resources/cross-border/2014/dbic/doing-business-in-canada

largest tea company in Bangladesh. Our Tea Department selects, blends and packs the finest Bangladeshi teas for both th

Competitor Analysis (in country of investment)

After making analysis of competitor we find that these three are the top leading companies Lipton (a Unilever brand), Tetley (a Tata Global Beverages brand), Twinings (an Associated British Foods brand) are cpompeting with Ispahani Mirzapore Tea. And if it monopolistic market can create once in Canada only by overcoming all these PESTLE situatation step by step. Though there are some more companies already in Canada but if Bangladeshi Ispahani Mirzapore can grab the market by considering cultural, social , csr & also some noteworthy issues then within a short period of time Ispahani Mirzapore tea will be the fastest growing Tea King in the business name of Canada .

SWOT analysisIspahani Mirzapore tea has expanded since 1980. Tea has been one of the fastest growing items in Canada. It has been seen in a survey by the agricultural Canada food that by 2020 tea consumption will rise by 40%. One main factor of this prediction is the aging baby boomer generation. Also, the population of Asia and Middle East immigrations into Canada has contributed greatly to the consumption of tea because of their culture.

Internal company strengths and weaknesses

Strengths:

Ispahani can keep experienced manager to interpret with customers easily Hire staff that are friendly and outgoing so that they can communicate with customers

easily. Ispahani offers diversified products with best quality so that customers from all around

that world can purchase it.

They believe every customer is important, so they make customized tea according to the preference of each customer.

Ispahani also offers online marketing via online purchasing of product and direct orders. Customers can easily connect with the brand name especially Asian customers. Customers might like the uniqueness of the product because the benefits of the product

are outstanding and not offered by any other company.

Weakness:

Ispahani expense might rise as they have to invest in training the new employee which will result in high turnover.

Lot of customers prefers coffee and hot chocolate, so that segment of people is eliminated. To capture that segment of customers will be quiet difficult.

Nowadays, customers prefer to seat in a café and then have their beverage but Ispahani Mirzapore tea only offers packets tea.

As the brand name is little known so the company needs time to establish in the market.

External market opportunities and threats

Opportunities:

Ispahani Mirzapore can expand their market into the US. They can offer seating within retail stores, so that customers can sit and relax. Since tea is a healthy item and customers are now more health conscious so the demand

of tea will be rising. Tea can be stored so there is less chance that there will be shortage of tea. Due to advanced technology in the tea industry productivity will increase.

Threats:

There is a huge competition with other beverage companies like Starbucks which provide more facilities to customers.

If in future there is a downturn in economy then customers will be less interested in tea. There are a limited number of raw materials in tea industry. When the quality of tea is rising, the price will increase and many customers might not

want to purchase it.

Tea market in Canada is very competitive and relative elastic. There are local competitors like Hindustan Unilever and Tata tea which is more than 50% of the tea market in Canada.

Figure 1 - The SWOT Analysis

Strengths Experienced management and staff Diversified product Online marketing Brand name connects with

customers Uniqueness of the product

Weaknesses Brand name is little known Investment in training employee Other beverages No seating arrangement

Opportunities Expand more other countries Offer seating arrangement Healthy item Shortage is unlikely Modern technology

Threats Limited raw materials Competitive tea market Economy downturn Competition with other beverage

OBJECTIVES

Companies decide to go global and enter international markets for a variety of reasons and these different objectives at the time of entry should produce different strategies and performance goals.

International Objectives

Ispahani has been exporting their product to five different countries for a long period of time. For the first time they are approaching a North American country which is Canada. Despite being

successful in Bangladesh, there are some reasons for expanding their business in another country like Canada:

Domestic market in Bangladesh is already saturated and there is pressure to raise sales and profits. Ispahani has a very ambitious sales and profit targets. If such figures have to be realized, companies have to move out of their domestic markets and foreign markets they are in.

Sometimes companies have to move out of their domestic markets when their competitors have done so, if they want to maintain their market share. Ispahani is facing the same situation. Its competitors have started expanding their business in different countries, it is inevitable for Ispahani to think about making a move.

Exporting is an excellent way to expand the business with products that are more widely accepted around the world. Ispahani can take the advantage of Tea being accepted widely around the world including Canada. As a result they can achieve greater scale of economy.

Market Objectives:

Specific: Ispahani has to enter the market in Canada, so that it can create a significant space in there through its targeted market by creating an awareness and a good vibe in the Canadian market about the Ispahani’s prodcuts, which can generate enough sales revenue in order to function further.

Measurable: The sales response can help Ispahani measure the goal it has set.

Achievable: The targeted expected revenue has not been set too high, which becomes difficult for Ispahani to achieve.

Realistic: Even though Ispahani is a well renowned brand in Bangladesh, customers are not aware of it in Canada, so the much profit it is earning in Bangladesh, that much is very unlikely to earn in Canada within the set time period. Hence, the goal is not set in the context of Bangladesh, as demographic and psychographic pattern of customers vary.

Time: The goal for creating a space in the market should be achieved within 2 to 3 years of time at maximum. If the goals within this time is not achieved, it will likely signal that the market of Canada is not profitable.

MARKETING STRATEGY

Segmentation

A similar set of needs and wants defines a particular market segment. Ispahani needs to

recognize different customer segments across regions, demographics, lifestyle and behaviors.

Through our research, we have the following findings and analyzing those, the total target

market is segmented in different categories.

Geographic Segmentation

Geographic segmentation takes into consideration the discernable preferences of

customers, and their purchasing behavior within a particular region. The ability and

resources to purchase, availability, awareness and marketing support structure are issues

that are relatively common within a particular region.

Being a new and foreign product within the category, Ispahani is targeted at the semi-

urban consumer population living in two provinces of Canada; Quebec and Ontario. Also

since these geographic regions are more exposed to the various marketing campaigns,

they also possess higher levels of brand awareness which increases the trust they place in

the foreign brand and loyalty they maintain.

Demographic Segmentation:

Age: 20-45 years of age.

Income Group: lower and higher middle class groups

Education: Well-educated, aware, politically and socially conscious, responsible and

aspiring citizens

Gender: Both Male and Female.

Psychographic Segmentation:

Convenience and comfort-seeking customers

luxury-oriented customers

customers active in social discourses and causes

Health cautious customers

Behavioral Segmentation:

Ispahani needs to focus on segments that use the product on a regular basis and who are quality-

conscious, aware and informed, ready to grab new products, medium to heavy users, with

medium to strong loyalty.

Target Market

The audience for tea is changing as rapidly as the market for tea is expanding. What was once a

predominately female, older consumer, has evolved into a much broader target audience

depending upon the specific segment and drinking occasion.

Historically, the average purchaser of tea bags in the Canada was female, 35-55 years of age.

The consumers of the beverage were also a little older than the average dispersion of age within

the population. This indicated that younger people were not being introduced to the joys of

drinking tea and new consumers were hard to come by. But for now, hot beverages are highly

popular drinks in Canada, with 95% drinking at least one type of tea, coffee or hot chocolate.

That 57% drink five or more types of these beverages reflects the high level of engagement

which continues to increase as improvement brings new products to the market. Basically, Tea

drinker does not specify any target group of its own rather any people of any age falls under the

target segment.

Positioning

In Bangladesh, Ispahani tea positions its brand with the advantage of being pioneer in the

industry and one of the finest producer of tea in the country which is not the same with Canada.

It will be a foreign brand which will be less known probably an unknown brand to the target

audience. They have a unique and amazing tagline in Bengali, which will be not the right

language to choose when hitting the market in Canada. The main emphasis will be on

customization of the product. We will try to position the brand by letting the target customers

know how Ispahani Tea is customized for them according to the taste and preference. Besides, as

Ispahani Tea is going to Canada with a great expectation, we have to uphold some strategies to

get into consumers’ mind. To make the product acceptable and also to increase its acceptability

we have to follow some basic techniques. These can be-

Offering the product with the low price than other competitors.

Provide the highest quality possible.

Customize the product according to the taste and preference of the local consumers.

Give more with the same price.

Offer gifts at different occasions.

Involve in local CSR activities.

Sponsor different cultural, educational or sports events.

Free sampling in different places.

Market Entry Strategy

The process of entering and then developing an international market is a challenging one, which

many companies still identify as an Achilles’ heel in their global capabilities. In fundamental

terms, entering a new country-market is very like a starting-up a new business, with no sales, no

marketing infrastructure in place, and little or no knowledge of the market. After analyzing the

situation of the company and the alternatives of different strategies, we have decided to go for

‘Exporting’ the product to Canada. This means they will export directly to Canada where they

will have a distributor hired for selling the product. They are responsible for handling the market

research, foreign distribution and logistics of shipment and for collecting payment. The

distributor will have their own agents who will distribute the product among the local retailers.

Other related activities will also be done by the respective stuffs that the company have assigned.

Though Ispahani will assign the distribution task to the hired firm, they will have direct

involvement in the business which will include all the activities of selling. The reasons behind

choosing this method are:

Potential profits are greater for taking less risk.

Reducing the challenges that might occur while distributing in a new country.

Have a greater degree of control over all aspects of the transaction through the

agents.

Know who your consumers are.

Your consumers know who you are. They feel more secure in doing business

directly with you.

Customers can provide faster and more direct feedback on the product and its

performance in the marketplace.

Gain new knowledge and experience

MARKETING MIX STRATEGIES AND TACTICS

Product Strategy

Ispahani Tea line of products will include six different varieties with different flavors and health

benefits. The wide variety of product will allow the company to grab a greater market share from

the target audience. The products that will be offered are:

Standard/Regular – These includes ordinary tea bags which contain black tea, blends,

red and instant teas. Decaffeinated tea is used to refer to black tea that has been through a process to remove

most of the caffeine content. Specialty tea is used to refer to tea which, although similar in appearance to standard tea

and also often drunk with milk, is usually sourced from specific high-quality tea

plantations and has a distinctive taste. Examples include Earl or Lady Grey, Chai and

Darjeeling, Ceylon, Assam and Kenyan blends. Fruit and herbal teas are typically infusions which contain pieces of fruit, herbs (eg

peppermint), spices or flowers (eg: chamomile). Tending not to contain black or green

tea, they are generally caffeine-free. Green tea is a tea which gives a light green color when brewed and is generally drunk

without milk. In contrast to black tea which is oxidized, green tea is un-oxidized and has

a more bitter flavor. Instant tea comes in powder or bag form and contains soluble tea solids, sometimes with

the addition of sweetener, milk powder and/or flavorings.

These variations of product are not available in Bangladesh, these will only be produced for

Canada as a part of test marketing. Later, the company will decide which variation has more

demand and which has less. According to that the company will take further necessary steps.

Since, it will be totally a new product to the Canadian people, Ispahani will provide free samples

at places to let them know about their product.

Place (Distribution) Strategy

Ispahani Tea will be primarily distributed through the local retail shops, mega shops or

departmental stores in four of the major cities of different provinces. These are:

Toronto, Ontario

Montreal, Quebec

Ottawa, Ontario

Mississauga, Ontario

These are some of the most populated places in Canada and are best places to do business.

Besides, these places are geographically and culturally close to each other. On the other hand, It

is not a wise step to develop a business in the whole country where hardly people know about the

product.

In these cities, Ispahani will sample it’s product to the new customers in different busy streets

and therefore, raise the awareness of the brand.

Ispahani will assign the task of distributing the product to one of the most renowned and

premium distributors in Canada; ‘Allmart Distributing’. For more than 27 years Allmart

Distributing has been delivering beverages in the Greater Ontario and Quebec Area. They will

have a three year contract which can be extended later if the business suggests so.

‘Allmart Distributing’ will follow the DSD (Direct store delivery) for distributing Ispahani Tea.

Under the DSD system, The Company delivers the products directly to retail stores. DSD enables

to merchandise with maximum visibility. It’s more suitable for products that are restocked often

and are sensitive to promotions and marketing and also convenient for products approaching a

new market.

That means the Ispahani shipment will be received by Allmart and to be stored in their

warehouse. Later, The products will be distributed to the local retailers in different regions.

Ispahani Shipment

Fig 2: Distribution Channel

Price Strategy Structure

One of the four major elements of the marketing mix is price. Pricing is an important strategic

issue because it is related to product positioning. Moreover, it has also significant influence over

other element like product feature, distribution and promotion. In Bangladesh, Ispahani follows

Cost plus Pricing. They set a price based upon analysis and research compiled from the target

market in the country. This means that marketers have set prices depending on the results from

the research. For instance if the competitors are pricing their products at a lower price, then it's

up to them to either price their goods at an above price or below, depending on what the

company wants to achieve.

But the market of Canada is totally a different situation and new to the company. In this case,

Every Company has to struggle a lot to gain the expected market share. Ispahani Tea is no

exception to this case. For dealing with this market condition, the strategy that will be adopted

by Ispahani for entering the market will be ‘Penetrating Pricing’.

Penetration pricing includes setting the price low with the goals of attracting customers and

gaining market share. The price will be raised later once this market share is gained.

Allmart Warehouse

Local Retailers

Consumers

In comparison to the competitors, Ispahani will provide a discounted price in order to attract the

customers. The advantages expected from the pricing strategies are:

Attract more customers.

Boost in sales.

Achieving recognition.

Faster growth of the business.

Promotion Strategy

As a new product, Ispahani has to struggle at the very beginning in Canada. The only thing that

can minimize this struggle is promotion. Promotion is the key to eliminate the barrier between

the product and the target consumers. In the Hierarchy of effect model, we will hit the first two

stages of the model; Awareness and Knowledge.

In the Awareness stage. the customer becomes aware of the product through advertising. This is

a challenging step, there is no guarantee that the customer will be aware of the product brand

after they view the advert. Customers see many adverts each day but will only remember the

brand of a tiny fraction of products. So, the advertisement of Ispahani should be attractive

enough to be remembered in consumers’ minds. Then the customer begins to gain knowledge

about the product.

The promotional tools that Ispahani will use are:

Newspaper Advert- The Daily newspaper in the target areas should contain the

advertisement of Ispahani tea to educate its customers about the products. The

advertisement should also contain the information that will help them to distinguish the

product form others.

Public Relations- Ispahani should arrange different articles to be written on the

unveiling and the existence in the market in Canada. The articles will demonstrate that

the company is innovative and expert in Tea business. They will be doing some PR

campaigns to attract further media attention.

Billboards- Attractive billboards are always appealing to the consumers. Ispahani need

to hire the best designer to make billboards which will be seen in different busy roads of

the targeted areas.

TV Commercials- Though now-a-days people are less attracted to TV advertisements,

they play a vital role in positioning the brand. Repetitive advert can hold a place in

people’s subconscious mind which will influence the buying behavior. However, they

should not plan to go for TV commercials in the very beginning as this will up rise the

cost.

Events- The Company should focus on sponsoring different events as this is a form of

mass communication. Being seen at some of the local events such as community festivals

will be a great way to spread awareness of their tea.

Budgeted/ Forecasted Financial Plan

Initial InvestmentShipment of Product $3,000,000Office equipments $2,500,000Architect Consultancy Fee $500,000Furniture $200,000IT Support cost $200,000IS support (Database &systems ) $300,000Total Initial Investment $6,700,000

Variable CostPaper for office use $100Electricity, utilities, supplies NilTotal Variable Cost Per Customer $100

Fixed Costinsurance for premise $10,000Executive employee Salary (7 executives* 55000) $385,000employee: high level (5* 60000) $300,000Employee: medium level(15*25000) $375,000Employee: low level (20*15000) $300,000Total discretionary fixed cost

(promotional activities) $416,666Total Fixed Cost Per Month $1,786,666

RevenueAvg Customers Per Day $20Avg Customers Per Month (1st Month) $372Avg Wallet Size (Price) per Customer $4300Monthly Revenue $1,599,600

Revenue1600,000

1648,000 1697,440 1748,363

1800,813

1854,837 1910,482

Cost of Goods Sold (Variable Cost) 200,000

206,000 212,000 218,000

224,500

231,000 237,500Gross Margin

1400,0001442,0

00 1485,440 1530,3631576,313

1623,837 1672,982

Fixed Cost1786,666

1786,666 1786,666 1786,666

1786,666

1786,666 1786,666

Cash Inflow/Net Profit

-386,666

-344,66

6-

301,226-

256,303

-210,353

-162,82

9 -113,684

Fig1: revenue forecast month 1- 7.

Revenue 1967,796 2035,829 2096,903 2159,810 2224,604Cost of Goods Sold 244,500 251,500 259,000 266,500 274,000

(Variable Cost)Gross Margin 1723,296 1784,329 1837,903 1893,310 1950,604Fixed Cost 1786,666 1786,666 1786,666 1786,666 1786,666Cash Inflow/Net Profit

-63,370 -2337 51,237 106,644 163,938

Fig2: Revenue forecast month 8-12

123456

-500000 -400000 -300000 -200000 -100000 0 100000 200000

-386666-344666

-301226-256303

-210353-162829

-113684-63370

-233751237

106644163938

789101112

BreakEven period

NET PROFIT

NUM

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OF

OPE

RATI

NG

MO

NTH

Description on financial aspect of the project

Initial investments:

For the investment we need to invest on the office premise (approximately 5000 square feet),

architect consultancy fee, office equipment, IT infrastructure (laptop, CCTV, wires etc.), IS

infrastructure (systems building, websites, and back-end database), and furniture. The cost

structure has been designed approximately $.6.7 million.

Revenue forecast for the first year:

At the first year the revenue calculation has been conducted in a minimum based method, which

refers the lowest revenue which the Ispahani can earn.

Cost forecast for first year:

For fixed cost, salaries have been allocated for employees according to managerial level and

professional executives. Discretionary cost (advertisements, PR activity, and promotional

activities) has been broken down into per month base. So the fixed cost has been approximately

predicted $ 1,786,666 including variable costs.

Profit forecast:

Since Ispahani’s first year profitability has been counted, the real scenario shows the negative

profitability until the 10th month appears. However, the 3% growth in each month cannot bring

any positive amount profit till 9th month though on those months variable cost could be covered

by sales revenue amount. Henceforth, from the 10th month Ispahani start achieving positive

figured profit.

Net present value:

For the calculation for net present value (NPV), the basic formula has been used. Which refers

the addition of cash inflows of successive years and from that amount the subtraction of initial

investment amount. Here, cost of capital has been predicted 10% annually, 3% growth monthly.

And the value of NPV is expected $1384351.And it also indicate the positive figure .So, in this

project seems quite favorable of investors.

Project cash flow (5 years approximately) - initial investment

$321,819/(1.1)^1+ $1,667,256/(1.1)^2+ $2,267,460/(1.1)^3+ $3,083,745/(1.1)^4+

$4193893/(1.1)^5-$6,700,000

= $ 1,384,351

Break- Even/ payback period:

As from the first month to ninth month of operations Ispahani is predicted to be failure to

achieve positive figured net income .Which indicates form 9th month Fixed cost could not be

covered from the sales revenue. As 10th month Ispahani will start to achieve positive figured net

income and also capable of gaining breakeven point. Hypothetically it is predicted that 10 th

month is the payback period. The entire calculation has been done according to minimum earn

expectation from first month otherwise the breakeven point /payback period would be achieved

bit earlier than the current observation.

Financial Contingency PlanThis is very likely that at the first year, Ispahani is not going to earn profit and might even earn

losses during few months, or even the first year too. In such cases, the profit earned in the

domestic market by Ispahani can be used to tackle the losses being incurred at Canada.

In case, of any other financial shortages, bank loans and overdrafts might be the options which

can be thought over.

Evaluation and ControlMarketing managers of Ispahani Tea will be encouraged to re-examine their goals and objectives on a bi-weekly basis and assess successes and shortcomings. Based on the evaluation result they will approach to make appropriate changes to drive the company forward.

9.1 Formal Project Plan for Implementation of Recommendations

BIBLIOGRAPHY/REFERENCES

1. http://www.ispahanifoods.com/

2. http://www.ispahanibd.com/

3. https://en.wikipedia.org/wiki/M._M._Ispahani_Limited

4. http://ispahani-tea.com/flavours.html

5. https://en.wikipedia.org/wiki/Pricing_strategies

6. http://www.slideshare.net/KyleBuyers/davids-tea-marketing-plan

7. http://www.scribd.com/doc/22063801/Royal-Tea-Complete-Marketing-Plan-for-Tea#scribd

11.0 APPENDICES