Problems and Recommendations for Sir Lankan Tea in the Australia

Table of Content

During the ass’s and ass, Ceylon tea experiences their highest peak because tea from Sir Lankan was exporting to Australia. During the early ass’s, Ceylon market share started to decrease because of price competition from a cheaper new tea source and the development of new technologies which is cut- ear-curl (CT) while Ceylon tea still using orthodox method. However, Ceylon tea was able to be brought back to Australian Market due to Dilemma effort . Dilemma was able to spot the opportunities and take the lack of quality tea in Australia market into its advantage.

Currently, Dilemma is top 3 global tea brands now. SOOT analysis is to measure the internal and external factors of the business such as strengths, weaknesses, opportunities and threats. Marketing environment are categorize as internal environment and external environment which consist of micro-environment which is impinge directly and macro- environment which is no direct relationship. Customer-Driven Marketing Strategy is market segmentation, targeting and positioning. Lastly, marketing mix consist of price, place, products, promotion (Sharp 2013). . 0 Problem Statement The main issue or problem indemnified is the decrease of volume and value of Sir Lankan tea in the Australia market where quality of an tea is replace with other factor . One of the factor of the decline is caused by demographic and cultural change where it affects consumer preference for example consumer might switch tea consumption to coffee. Besides that, Dilemma also face threat room competitors which dominates Australia tea market such as Milliner and ABA Food & Beverages.

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The appearance of a cheaper source of tea attracts purchases from business which further decrease the popularity of Ceylon tea as it require higher production cost. Another factor for decreasing demand of Ceylon tea is the new Cut-Tear-Curl technology which promotes convenience instead of taste causes Ceylon tea to loss its competitive advantage which is its good aroma by manufactured using orthodox method. 3. 0 Analysis 3. 1 SOOT Analysis SOOT is defined as strength, weakness, opportunities and threat. The purpose f SOOT analysis is to assist management in strategic planning process (Buy 2013).

To engage with the best strategy, company must first understand its own characteristic where situational analysis is needed (Buy 2013). Strength is the measure of a company competitive advantageous compared to competitors, weakness measures the areas in which company needs more improvement, opportunities are future or potential growth available and finally threat is external environment that could harm company benefits (Kiang 2006). SOOT analysis helps company to make rational decision by focusing on their strength, taiga their weakness, make preparation for future threats and finally explore potential opportunities (Buy 2013).

Strength 1) Provide High Quality Products Dilemma are able to provide high quality tea product which is “Dilemma Pure Ceylon Tea” to maintain competitiveness in the market It helps the company to open a new market segment targeting high quality tea drinker 2) Stable and establish company Dilemma are founded way back on 1974 and currently one of the biggest tea product provider in Australia Proven high financial stability of company 3) Strong and established Branding

Branding will enable a company to have more control over price setting Customer loyalty will be fortified Weakness 1) High Price Due to high cost of production and to sustain quality of product higher price are sold compared to other brands for example Lipton.

Higher price will decrease demand of certain target customers according to economic market principle 2) Low Awareness on Quality Tea Consumer prefer convenience over tea quality Cause lower sales and decrease in popularity 3) High Dependency on Supplier Product of Dilemma mostly depends on tea supply from Sir Lankan Cause lower intro towards cost price and risk of supply shortage for example climate change causes lower production of tea in Sir Lankan Opportunities 1) Growth of Tea Market Higher growth in tea market will provide more potential customers to Dilemma Tea and coffee manufacturing industry are expected growth of 44% (Fishbowls 2014) 2) Product exclusiveness Currently in the market there are very less pure Ceylon tea Opportunities for Dilemma to monopolize or attract targeted customers 3) Legal System Promotion of Sir Lankan tea is supported by Australian government Tax benefits and exemption of import duties provided by government to encourage tea from

Sir Lankan to enter Australia market Threats 1) High Competitors Dilemma will have to compete with big companies such as Milliner in the industry Price competition cause by competition will reduce Dilemma profits 2) Niche Market Quality tea which is promoted have a possibility to only attract niche market This indicates only a small market target will be reach by this product therefore sales and profits from selling the product will be low 3) Change in Consumer Taste Changes in cultural lifestyle could lead to a decrease of tea consumption and substitutes by other beverages This will cause decrease in target market . 2 Marketing Environment Marketing environment changes will impact upon a business. There are 2 types of marketing environment which is internal environment and external environment which consist of micro and macro-environment. Marketing environment changes affects business management and decisions (Fieriness 2014). 3. 2. Internal Environment: Materials The product of Dilemma is wide known as quality tea and the major factor of its quality is its materials used which is a Ceylon tea origin from Sir Lankan. Ceylon tea popularity started to drop during sass due to lack of ability to compete n price and the reason was Ceylon tea uses traditional method and the effort to maintain its tea quality have driven up cost of production (Edwards and Generate 2000) . However Dilemma decided to use Ceylon tea as its core materials for its product “Dilemma Pure Ceylon Tea” to recapture market share by emphasizing its quality as its competitive advantage (Nazism 2013). Employees Dilemma have an approximate of 30,000 employees. They have a considerable good policy towards employees for example the founder of Dilemma, Merrill J.

Fernando has established MGM Charitable Foundation with the purpose to share art of the company wealth to its employees. Through its foundation, it also helps unprivileged people by for example offering jobs in Sir Lankan and donation. Since Sir Lankan minimum wages are low, there is a low direct labor cost incurred by Dilemma. 3. 22 Micro-Environment Customers The main customers of Dilemma Pure Ceylon Tea will be high quality tea drinker since this product emphasize on its quality instead of price competition. Dilemma have the third biggest market share in Australia amounts to 13. 7 percent (Nazism 2013). As compared to other tea company, Dilemma have a stronger customer loyalty as provided that there is less competition for tea that emphasize on quality.

The 6 pillars of Dilemma ethics avowed to maintain its consistency and quality in the product to maintain customer loyalty (Dilemma 2014). Competitors Competitors are businesses that provide the same or similar product in the same industry (Entrepreneur 2014). The presence of competitor usually brings a negative impact to a business. The competitors of Dilemma consist of big companies such as Milliner and ABA Food and Beverages which dominates 56% tea market share of Australia (Sharp 2013). Strategies used by competitors insist of price competition where cost of production is driven down to reduce selling price and counter measure taken by Dilemma is by introducing high quality tea targeting different target segment (Sharp 2013).

Intermediaries Marketing intermediaries is also known as middleman as it serves as a distribution channel for products (Hammond 2014). Products of Dilemma are mostly distributed to retail store for sales. Dilemma also collaborate with Dabber Food to widen their distribution network (Tabulators 2010). Dilemma have a very effective conduct to handle with intermediaries for example a maximum of 8 working hours is needed to strike an agreement with retailers compared to others company where it takes weeks (Levy 2012). 3. 2. 3 Macro-Economics Legal Forces and Government Policies In Australia, the effort to import Ceylon tea from Sir Lankan is supported by the local authorities in Australia.

Few of the advantages are exemption of import tax and import duties which lower the cost of production in Sir Lankan (Sharp 2013). Besides that, Dilemma also have legal protection on their brands preventing others to misused their logo and only acceptable quality of Ceylon tea have the sights to be called pure Ceylon tea in the market to maintain their quality image (Quantities 2007). Social and Cultural Force Cultural environment include of influence of family education and social system. Every business must understand that there will be always gradual change in social and culture where it will also affect the preference, wants and needs of consumers (Boundless 2014).

The invention of tea bag and CT method has change perspective of people in Australia to choose convenience over taste of tea and also changed the tea culture. Less people will use traditional brewing teeth even it tastes better and this highly affect Dilemma as its product emphasize on quality of tea and its taste (Becket et. Al 2002). Technological Forces The rapid technologies changes may increase convenience of consumer however it affect business practices in many ways in terms of product, management method, or new opportunities or threats (Sharp 2013). In the tea industry, one of the major changes in technology is the emerging of the new CT (cut-tear-curl) method where it prepares tea in a faster and simpler method (Mahayanist 2010).

The changes put Ceylon tea in disadvantage since it uses orthodox method o maintain its tea quality however it open an opportunities to Dilemma to take advantage of lack of quality tea in the market and take control over the market (Sharp 2013) Economic Force Economic of a country is an indicator of its wealth. Changes in economic environment will affect consumer confidence level and their purchasing power (Hammer 2008). In Australia, there is an average of 3. 48% growth every year from 1960 to 2014 (Tragicomedies 2014). Economic growth indicates increase of consumer purchasing power and wealth and this are good news for Dilemma since Dilemma Pure Ceylon Tea is consider expensive compared to its competitors Hereford there will be less possibilities for reduction in demand. 3. 3 Customer-Driven Marketing Strategy 3. 3. Market segmentation Market segmentation is a method of splitting up the market into different sub- groups of the purchaser that respond differently to different marketing (Sharp 2013). In market segmentation, there are four segmentation variables which are Demographic, Cryptographic, Geographic, and Behavior (Usage). Demographic Segmentation Demographic segmentation is a mutual strategy where marketers find market segments depending on the shared demographic or personality qualities Compeller 2013). The example of demographic segmentation is age and income level. Different age people might differ from tea consumption rate. In Australia senior citizens have a higher tea consumption compared to young and middle generation (Australian Bureau of Statistics 2014).

Cryptographic Segmentation Cryptographic segmentation is a method that places importance on the activities, interests and behaviors that they share of a customer (Compeller 2013). Consumer lifestyle is used by Dilemma for its market segmentation. Dilemma segment Australia consumer by stress level and health consciousness (Outage 006). In the end, Dilemma had introduce a new products that is organic tea and decaffeinated tea to server those consumers that health conscious (Pearson Education 2010). Behavioral Segmentation Behavioral segmentation is based on actual buying or consumption behaviors (Sharp 2013). Every Customer has a different expectation or taste towards the Dilemma Tea product. Brand loyalty is one of the behavioral segmentation used to measure consumer consumption rate.

Dilemma focus on their product quality to maintain customer loyalty to rival other competitors such as Lipton (WIPE 2014). 3. 3. 2 Targeting After analyzing the marketing segmentation based on age, gender, race, place, lifestyle, and others, a company will choose suitable market segment to heavily focus on the target market (Hanson 2013). Target market is a group that choose to attend a set of purchaser that has mutual needs and characteristics (Kettle et al 2006). There are three types of marketing strategies which can be identify as undifferentiated marketing, differentiated marketing and concentrated marketing (Newton 2014). Dilemma uses differentiated marketing targeting more than 2 market segments.

The potential target market will be the younger enervation where stress and healthy life style have encourage them to drink tea (B&T MAGAZINE 2013). Besides that, high quality Ceylon tea offer by Dilemma targets middle income and above since there is low purchasing elasticity and also have larger purchasing power. By using a particular marketing strategy, Dilemma Ceylon tea must understand what majority needs are and wants to establish this strategy and improve from there. 3. 3. 3 Positioning Positioning is a rising brand image that indicates to a consumer mind (Sharp 2013). There are three criteria for positioning which are desirability, uniqueness ND affordability (Hanna et al 2009).

The price positioning of Dilemma is currently middle of mainstream retail brands and imported high price. Dilemma practice quality based strategy as Dilemma Ceylon Tea serves high and fresh quality tea, compare to others competitor that emphasize on price. This would create an image or brand loyalty towards consumer especially tea lover because Dilemma Ceylon tea is able to provide good quality of tea for consumers. Besides that, initiative is also taken by Dilemma to attract younger generation customers by motivating through its product attributes about healthy factor. B&T MAGAZINE 2013) 3. 4 Marketing Mix Marketing mix consist of the common up’s which is price, promotion, place and product.

The purpose of marketing mix is to help business to make strategic business decision based on the four variables to reach potential market segments (Chic 2009). Product The 1st P in marketing mix is product where it could be a service or physical product intended for targeted customer (Violet 2014). On the sass, Sir Lankan Ceylon Tea have started to decline due to low popularity however Dilemma saw this as opportunities and try to re-popularize Ceylon tea by introducing Dilemma Pure Ceylon Tea. The introduction of the product indicates launch phase in the product life cycle where continue marketing is required (Mammogram 2013). Dilemma uses product orientated strategy where target of customers come after launching of a product (Themes 2007).

During the launch of the product, the tea market is already dominated with cheaper tea choices and also new technology which is cut-tear-curl however Dilemma believe that quality of tea is essential and new market segment can be explore by emphasizing on its quality Price Price is amount of money that is demanded in exchange for using or buying he product or service (Kettle et. Al 2006). There are a few pricing strategies include market skimming, market penetration, premium pricing and economic pricing. The price of Dilemma Pure Ceylon Tea has an approximate medium range price where it is between imported-high priced specialist such as Twinning and mainstream retail brands such as Lipton (Sharp 2013).

The price strategy used by Dilemma is market skimming where a higher price is charge compared to majority similar tea product for example Lipton after Dilemma Pure Ceylon Tea was introduced. Dilemma was able to use this strategy because of its uniqueness f the product where there is very little access to pure Ceylon tea or quality tea (Themes 2007). Promotion Promotion is known as “communication”, which can be communicate to the audiences about the development and builds favorable relationships in order for them to have outlook on it. (Armstrong & Kettle 2013) Promotion that is being use here is above-the-line and blow-the-line. Above-the-line means paying to advertise such magazine, television and others.

Not only that, Dilemma tea is going to be the first companies in Australia to launch a completely integrated CRY Code advertising campaign. Dilemma’s CRY code advertising have a four full page of Dilemma in magazine stated which is Better Homes and Gardens, New Idea, Marie Claire, Who and Women’s Health. (Lane 2011). Below-the-line means indirectly adverting such public relations and product replacement. Public relations is Dilemma Tea held a lot of high teas around New Zealand, promoting its informally guilty message along with the expanding interest in tea mycology. (Admit 2014). Product replacement is Dilemma used famous chef Peter Curtail to advertise about Dilemma in the mid July it which advertisement is going to set on the 25th anniversary. Shaded 2013).

Dilemma sponsor Sir Lankan Cricket with real time updates of scores, team, player and commentators. Dilemma also put up their history of Ceylon tea as a service project in largest single-category information websites in the world attracting many consumers (super brand 2013). Place Place refer to the distribution channel of a product which also means medium between customers and product (Violet 2013). Dilemma distribution channels consist of retail shops, videodiscs agencies and also recently set up its self operating branch in Australia (Fodders 2012). Setting up own branch requires ore cost compared to other distribution channels however it may be more profitable.

Since Dilemma Pure Ceylon Tea emphasize on its quality, the decision as setting up own store will allow more control over quality therefore it its the right move to further increase distribution channels using own branch (The Times 2007). 4. 0 Recommendation Dilemma is already a well establish business and brand where it is the 3rd largest tea supplier to Australian Market. In order to keep up with their target market, Dilemma must continue to maintain their quality and authenticity of their product to retain customer loyalty. Besides retaining existing market, Dilemma could try to capture other target market for example younger generation. Effort made by Dilemma is the creation of Dilemma capsule which promotes convenience yet quality tastes of tea (B MAGAZINE 2013). 5. Conclusion In conclusion, marketing theories and strategy can help Dilemma to improve in Australian industry. The SOOT analysis can help Dilemma identify their strength, weakness, opportunity and threat of the company position. Dilemma should focus more on their weakness which high price, low awareness on quality tea and highly dependent on suppliers. Next, market segmentation helps Dilemma to Ochs on real consumers and avoid unnecessary focus on a particular consumer. Market segmentation helps to fulfill the needs and wants of consumer by doing that it Dilemma to build brand loyalty among the consumers. Finally the marketing mix is able to help Dilemma to adjust to new trends or social of the consumers. Reference List Admit.

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