CHAPTER 1

INTRODUCTION

Green tea is widely consumed in Pakistan and is regarded as a health-promoting beverage. The

idea behind this project is to conduct a brand-blind taste test for green tea and devise

marketing strategies. For this, we have chosen two leading brands of Pakistan i.e. Lipton and

Tapal. Their corporate profiles are briefly discussed below

Lipton is one of the world's great refreshment brands, making a big splash in the global

beverages market with tea-based drinks including leaf tea, infusions, ready-to-drink tea and

other healthy, refreshing alternatives to soft drinks. Lipton is painting the world yellow with a

marketing campaign that represents all that Lipton stands for — brightness, vitality and fun

with natural goodness.

The parent company of Lipton is Unilever. Unilever Pakistan Limited is a Pakistan-based

company. The Company manufactures and markets home and personal care products,

beverages, ice cream and spreads .The Unilever Pakistan Limited (UPL) was established in

Pakistan in 1958. Unilever Pakistan is the largest FMCG Company in Pakistan, as well as one of

the largest multinationals operating in the country. Unilever has consolidated its green tea line

under its Lipton ‘Clear Green’ brand, which includes its original pure flavor alongside three

newly launched flavors – Jasmine, Lemon and Mint.

“Lipton tea can do that” is the positioning statement of Lipton.

Products:

1. Clear green: Mint

2. Clear green: Lemon

3. Clear green: Jasmine

4. Clear green: Natural

ABOUT TAPAL

HISTORY

The journey of Tapal's remarkable success is the combined efforts of three dynamic generations

of the Tapal Family. In 1947, Tapal started out as a family concern under the personal

supervision of its founder, Adam Ali Tapal.

Against tough competition Adam Ali's unique blend, later named Family Mixture, became a hot

favorite and eventually the largest selling brand in the unorganized tea market. From this

auspicious beginning, Tapal moved from success to success introducing tea brands to suit every

taste and pocket, sold from its retail outlet in Jodia Bazar, Karachi. The quality of Tapal teas

soon became legendary and people from all parts of Karachi started lining up at the outlet to

purchase tea. For their convenience,

Tea distribution was initiated to retail outlets around the city. The company continued to grow

under the management of the founder's son, Faizullah A. Tapal.

Today Tapal Tea is managed by the founder's grandson, Aftab F. Tapal. After studying abroad,

Aftab Tapal returned to Pakistan to introduce professional management and unique production

ideas to the business. A well trained tea taster and tea connoisseur himself, Aftab Tapal

introduced new tea concepts and developed a wide range of tea blends catering specifically to

the tastes of people throughout Pakistan. His progressive outlook resulted in giving further

strength to the foundation of quality laid by his family.

Making a modest beginning over half a century back, today Tapal has become the largest, 100%

Pakistani owned Tea Company in the country. It has modern tea blending and packaging

factories, warehouses equipped with state-of-the-art equipment and a team of highly dynamic

professionals headed by Aftab Tapal himself.

SHARED VALUES

1. Trust in Each Other

Tapal believe that trust is the foundation of our business actions.

It believes that honesty is absolute and that integrity cannot be compromised. All our actions

are guided by fairness and sincerity of commitment.

2. Outstanding Quality

Tapal believes in dedicating ourselves to achieving an outstanding quality in all our activities.

Excellence is a journey, not a destination. Quality is a way of life for us.

3. Passion for Creativity

Tapal is open to novel ideas in every aspect of our business of choice.

Tapal believes in providing an environment which supports individual opinion and

efforts, inspires and enables everyone to use their creativity and entrepreneurial

flair.

4. Leadership

They are committed to being the No.1 national company in our business of choice; a

role model for others to follow.

They believe in empowering individuals at every level. We encourage the use of

judgment and decision making with ownership and accountability. We believe

empowerment creates leadership.

5. Together, Everyone Achieves More

They believe in unity and purpose of value the benefit of coordinated efforts. With a

common goal and team spirit we will fulfill the needs of internal and external

stakeholders.

BRANDS

Tapal is proud to have been a part of Pakistan's history since its inception. As a company they

have grown and flourished together with the great nation. Founded by Adam Ali Tapal, the

company first started marketing a number of quality blends to Pakistani consumer market.

Through continuous innovation and research and development they gain a big share of

Pakistani market. They still are growing and hope to be a leader in a market in coming years.

Tapal is the heart brand of green tea in Pakistan. “Shades of green” is a brand of Tapal

manufacturing green tea in Pakistan.

In the year 2000, Tapal became the first tea company to launch a range of flavored green teas

in the country. The real achievement lies in the fact that Tapal has maintained the leadership

position in this category for over 10 years. Tapal is currently the market leader with 65% market

share. Available in refreshing Jasmine, Lemon, and Elaichi flavors, Tapal Green Tea is blended

using the finest tea leaves and specially selected flavors, to create the perfect harmony of taste

and aroma. A favorite of health-conscious people, the brand delivers a wealth of benefits. It

helps to soothe and relax you whilst helping in digestion, enhancing metabolism and aiding in

weight loss.

Jasmine Green Tea was introduced first and is a winning combination of an alluring fragrance

and health-giving properties. Then came Elaichi green tea with its unique nature that lifts your

mood and helps you achieve a new level of clarity; followed by Lemon, with its crisp taste and

refreshing aroma. People of every age enjoy cups of Tapal Green Tea after meals and in the

evenings to soothe away the cares of the day and enjoy a healthy lifestyle.

“A new shade for a healthy lifestyle” is the positioning statement of Tapal shades of green.

Products:

1. Jasmine

2. Lemon

3. Elaichi

THE INDUSTRY

Tea has never been an indigenous product of Pakistan, but it is so deeply rooted in our culture

that most of us would declare it the country’s national drink without a second thought.

This tenacious hot brew attained permanent shelf life in the hearts and minds of the nation

ever since it was introduced by the British during the colonial era, and now as the West’s

increasing preoccupation with health and health-related products permeates our media, the

spotlight has fallen on black tea’s counterpart.

Green tea is the new black for those living up to the global health kicks, and local market giants,

Tapal and Lipton have both opted to capitalize on this trend.

As a product, green tea has had a long history and presence in Pakistan, though at a scale which

has largely been overshadowed by black tea. While black tea consumption stood at an

astounding 170,000 tons last year, the consumption of green tea was a mere 500 tons.

Pakistan’s ‘healthy hedonists’ are particularly focused on the issue of digestion, hence the

emphasis on food consumption and tea drinking. Green tea’s health benefits to a daily lifestyle

will aid in changing the general perception that green tea is a product only to be consumed in

the cold winter months.

Tapal has opted to reinforce this emerging green tea culture by playing upon health benefits,

but unlike Lipton, the emphasis of the campaign has been on creating an emotional connects

between the consumer and the product.

COMPETITION

Green tea market is a small market so the competition is too intense. The main competitors are

Lipton and tapal. Trying to build the green tea market in the midst of a recession is yet another

major hurdle for both Lipton and Tapal, especially as the branded green tea category faces the

drawback of being a comparatively pricey product.

At the retail level, a limited survey of shops across Karachi indicates that both Tapal and Lipton

currently stand out from the crowd of foreign green tea brands and flavored tea in terms of

packaging, price and most significantly, placement. Both brands are prominently displayed

occupying positions next to the more popular products which either company produces,

lending them support, credence and visibility on the shelves.

Additionally, both Tapal and Lipton’s SKUs range at comparatively modest, competitive prices,

breaking down to two to three rupees per teabag, while foreign brands such as Tetley and

Twining range seven rupees and up, per teabag. According to the retailers at these shops, Tapal

has struck big with its value-addition sample pack, in which all three flavors are available for the

consumer to try out.

In the limited market, both the brands also face competitive pressures from the imported

brands as well as local unbranded green tea sold openly in the market. The imported brands

cost on an average thrice the price of well established local brands such as Lipton and Tapal.

Following are the imported brands available in the market:

Alokozay

Twinings

Aroha

Direct competition of Tapal green tea is with Lipton green tea. Indirect competition of tapal is

with tea, loose tea and other teas available in market. Generic competition includes all the

generic products which can fulfill consumers’ generic needs. Last one is budget competition

that includes the alternatives.

CHAPTER 2

Market Analysis

Green tea is the new black for those living up to the global health kicks, and local market giants,

Tapal and Lipton have both opted to capitalize on this trend. This tiny market is segmented into

those who prefer loose, unbranded green tea (popular year-round in Baluchistan, NWFP and

further north) and those who prefer the more up market branded green tea, with sales

restricted to the larger urban centers and towns across the country. This branded segment of

the market constituted only 200 to 225 tons last year, with a majority of sales taking place in

winter, as green tea’s consumption is currently tied directly to seasonal shifts.

Tapal was the first to enter this small-scale market in 2000, and is currently the market leader

with a 65% share in the branded green tea market. Having been the first to launch green tea in

teabags, the company also explored multiple flavors to form its current line of Elaichi, lemon

and jasmine flavored green tea, available under the new, ‘Shades of Green’ banner.

Following a similar strategy, Unilever has consolidated its green tea line under its Lipton ‘Clear

Green’ brand, which includes its original pure flavor alongside three newly launched flavors –

Jasmine, Lemon and Mint.

According to Sami Wahid, Brand Manager, Tapal Green Tea, the company has seen a 43%

growth in green tea sales this year, surpassing all expected sales targets. He says Tapal is yet to

see profits from the product due mainly to the small size of the market, but he believes green

tea consumption can easily swell to 2,500 tons or more annually.

The Lipton team is also aware of this fact, and they see future growth in terms of a brand new

market with a separate identity from black tea. As Aamir Malik, Creative Director, Blitz DDB

explains:

“Green tea is not going to cannibalize regular tea’s market, as it is not a substitute. Green tea is

essentially taken with heavy, rich meals, while regular tea is usually drunk separately. It’s

generally consumed for its therapeutic value.”

PEST ANALYSIS:

The external macro environment in which a firm operates can be expressed in terms of the

following factors Political Economic Social Technological PEST analysis is used to describe a

framework for the analysis of these macro environment factors.

POLITICAL FACTORS:

These factors and government interventions can make or break the industry. The political

factors have played a very benign role for the tea industry. The political arena has a huge

influence upon the regulations of the businesses, and spending power of consumers and other

businesses. The political environment of Pakistan is relatively unstable in the current situation.

The investors are not willing to invest in Pakistan. However, WTO and trade policies encourage

the import of raw materials for Tea industry. Tea Import Quota It is an important consideration.

Each year there is a certain quota on tea import in total imports of Pakistan. Each player is given

quota to import and manufacture so one can say that it is a regulated industry.

Diplomatic Relations: The relations with the tea producing nations and Pakistan play a vital

role as large part of imports comes from Kenya, but now Pakistan is also importing tea from

India. Unstable Geographic Conditions Pakistan is situated at a very critical and geographically

strategic location. Due to the uncertainty new investors are not ready to invest in Pakistan.

ECONOMIC FACTORS:

Economic conditions of an environment have a direct impact on the development of any

industry. The recent economic recession in the world has had an impact on Pakistan’s economy

as well. Pakistan's economy mainly encompasses textiles, chemicals, food processing,

agriculture and other industries. In 2005, it was the third fastest growing economy in Asia. Since

the beginning of 2008, Pakistan's economic outlook has taken a dramatic downturn. Security

concerns stemming from the nation's role in the War on Terror have created great instability

and led to a decline in FDI from a height of approximately $8 bn to $3.5bn for the current fiscal

year. Concurrently, the insurgency has forced massive capital flight from Pakistan to the Gulf.

Combined with high global commodity prices, the dual impact has shocked Pakistan's economy,

with gaping trade deficits, high inflation and a crash in the value of the Rupee, which has fallen

from 60-1 USD to over 80-1 USD in a few months. For the first time in years, it may have to seek

external funding as Balance of Payments support.

Inflation remains the biggest threat to the economy, jumping to more than 9% in 2005 before

easing to 7.9% in 2006. In 2008, following the surge in global petrol prices inflation in Pakistan

has reached as high as 25.0%. The central bank is pursuing tighter monetary policy while trying

to preserve growth. Foreign exchange reserves are bolstered by steady worker remittances, but

a growing current account deficit - driven by a widening trade gap as import growth outstrips

export expansion - could draw down reserves and dampen GDP growth in the medium term.

Social Factors The social and cultural influences on business vary from country to country. It is

very important that such factors are considered. People are socializing more may it be events or

casual visits to friends and family. Tea has always been an integral part of Pakistani culture and

rituals. It is understood that tea would be present at all events. Changing Trends As work

environment is becoming more stressful; people require different forms of refreshment and

intakes to increase their energy levels. This further increase the intake of tea at workplaces, tea

is not only just available to the employees when needed but is also served twice a day in order

to keep them going. On the other hand, media expansion, growth of advertising as a separate

industry has resulted in greater exposure of all the brands and masses. Hence social factors and

changing mindsets have positively affected this industry Tea has always been acceptable in all

social classes because of its usage. Green tea has recently gained a lot of popularity due to

health reasons and is largely consumed. Another factor is the emergence of ice tea which is

indirectly competing with soft drinks.

TECHNOLOGICAL FACTORS:

Technology is important to gain an edge over competitors and it drives globalization.

Technology helps companies to reduce cost and achieve economies of scale. Technology also

leads to the development of new products and sometimes even segments. Tea manufacturers

like Unilever and Tapal already manufacture tea of the highest quality and they achieve it by

the state of the art production facility that they have. Lipton has also installed its own plant of

Danedar tea production.

PORTER’S FIVE FORCES:

RIVALRY AMONGST COMPETITORS

The competition in the tea industry is high. Since there is low switch cost for the customer there

is a tendency amongst them to buy substitute brand if the brand they have been consuming is

unavailable for any reasons. There are a moderate product differences and brand identities

between the competitors.

THREAT OF NEW ENTRANTS

Threat of new entrants is high. This is evident by the immense growth in the industry and

government policies are also encouraging new Tea houses to emerge on the scene. The taxes

on import of tea are reduced thereby decreasing the cost of production. It can be taken as

positive sign by a prospect player. Initially it was thought that no company would survive

against the giants of Unilever but since Tapal people have started thinking that local brands can

do well and new players might decide to come into this market.

THREAT OF SUBSTITUTES

In this case tea will always remain an integral part of our culture. There is a low switching cost

associated with the trade off of substitutes. It can easily be assumed that the demand for green

tea is increasing. Change in patterns can be observed because consumers are shifting from

normal tee to green tea.

BARGAINING POWER OF BUYERS

The bargaining power of buyers is low because of the high demand and low availability of

substitutions. Although due to increased competition prices remain competitive but buyers

have little or no bargaining power.

BARGAINING POWER OF SUPPLIERS

Bargaining Power of supplier is high because there are few suppliers of tea. The reason why

there are few is because there is a specific taste of tea that consumers like so the

manufacturers are forced to choose from few options. In Pakistan tea is imported majorly from

Kenya and Srilanka so the supplier is at power to influence the price due to the limited

availability of the raw tea. In Pakistan recent plantation of tea farms may favor the local

manufacturers and foreign suppliers may find a reduction in their bargaining power.

Overall attractiveness?

SWOT ANALYSIS

a) TAPAL

INTERNAL

FACTORSSTRENGTHS WEAKNESSES

ManagementExperienced, broad base of

interests and knowledge

Large size may lead to conflicting

interests

Product Line Differentiated, Variation in So much product lines but still

products not able to knock out loose tea.

Marketing Diverse, and local awarenessMay lose focus, may not be

segmented enough

PersonnelVery experienced, high

knowledge

Possible conflicts due to so many

people, possible trouble staying

focused

FinanceHigh sales revenue, high sale

growth, large capital base

High expenses, may have trouble

balancing cash-flows of such a

large operation

Research &

Development

Continuous efforts to research

trends an reinforce creativity

Sometimes they conduct

research but the advantage is

taken over by small competitors.

EXTERNAL

FACTORSOPPORTUNITIES THREATS

Consumer/Social Increase in the populationIlliterate people go for loose tea

which is substandard as well

Competitive

Distinctive name, product and

packaging in with regards to its

markets

Intense competition can pay so

they have to keep eyes open

Technological

Maintenance of proper website

which subscribes and provides

information regarding long

production line.

Competitors are global leaders

so they have more technology as

compared to Tapal

Economic Consumer income is high for the Very elastic demand, almost

loose tea. pure competition

b) LIPTON

Strengths:

I) Already a market leader and a well-known and reputed brand.

II) Extensive knowledge of local culture and tastes.

III) Wider product range with technological superiority, e.g. Brooke Bond’s hot tea can.

IV) Experienced and quality management.

V) Strong Ethical value (culture and heritage)

VI) Strong financial position

VII) Strong company image

Weaknesses:

I) Having too many brand extensions can dilute and confuse consumer perception and

give fresh and new competitors to seize market share.

Opportunities:

I) Declining markets for other beverages.

II) Greater awareness of health benefits of green tea.

Threats:

I) Overcrowded and small market might cause significant demand reduction.

II) Presence of other major players such as Lipton and foreign brands leading to tough

competition.

CONCLUSION:

After doing the industry’s overall analysis using PEST and Porters five forces and briefly

discussing the Internal and external factors of both major green tea brands of Pakistan using

SWOT we have come to the conclusion that the green tea industry of Pakistan is a growing as

well as attractive, though the rivalry as well as barriers to entry are high there is still a lot of

potential in this market. Due to the changing trends and more health conscious customers the

green tea market is flourishing and if Unilever and Tapal will use the right strategies and

implement them correctly they will make huge profits from this market industry. After studying

the whole industry we have also concluded that Tapal; shades of green is currently the market

leader of Pakistan with a market share of 65%, and Lipton is the greatest competitor of Tapal as

Lipton too is trying the level best to replace Tapal’s position in the market as the leader.

A detailed study on Tapal will be done in the later chapters of this report in which we will

discuss the strategies which Tapal can opt in order to retain its market share and leadership

position. We will also talk about the Company’s current selling proposition, its 4 P’s, STP and

other information, after the brand- Blind taste test when we’ll be having a clear idea of what

customers want and will be in a much better position to decide about the overall strategies and

Marketing plan of the Company.