Tea is considered to be an essential consumption item in many countries of the world, including Pakistan. The history of tea drinking in the subcontinent can be traced far back. Over a period of time, the colonials improved the quality and taste of tea. At present there are two kinds of tea available in the market: branded and unbranded (loose) tea, the ratio is (54:46) respectively. Bulk importers sell tea to retailers in loose form, while the second category of bulk importers sell packaged tea under brand names. Branded VS Unbranded Unbranded 46% Branded 54% Branded Unbranded All tea in Pakistan is imported.
Therefore, tea, a traditional hospitality item in Pakistan, consumes a large amount of foreign exchange. Pakistan mainly imports tea from Kenya and other African countries like Uganda, Burundi and Tanzania, while multinati onal companies in Pakistan also import tea from Sri Lanka, Indonesia and Bangladesh. The current tea imports are approximately 150,000 tons. There are unlimited quantities of smuggled tea flooding the market. The main problem at present is that smuggled t ea has now taken over the market, simply because of the high duty and taxes levied by the government on branded tea.
Smuggled tea escapes all duties and levies, and therefore can be sold cheaply, as loose tea. Now efforts are being made to grow tea leaves locally. History of Tea Origin of Tea – Legend Myths and Facts First Discovery According to Chinese mythology, in 2737 BC the Chinese Emperor, Shen Nung, scholar and herbalist, was sitting beneath a tree while his servant boiled drinking water. A leaf from the tree dropped into the water and Shen Nung decided to try the brew. The tree was a wild tea tree. There are many authentic and supposed references to tea in the centuries before Christ, according to the Chinese dictionary dated circa 350 AD.
The Chinese t’u was often used to describe shrubs other than tea, hence the confusion when Confucius allegedly referred to tea or t’u when writing about the “sow thistle” plant in the Book of Odes. From the earliest times tea was renowned for its properties as a healthy, refreshing drink. By the third century AD many stories were being told and some written about tea and the benefits of tea drinking, but it was not until the Tang Dynasty (6818 – 906 BC) that tea became China’s national drink and the word “cha” was used to describe tea.
The modern term “tea” derives from early Chinese dialect words such as Tchai, Cha and Tay – used both to describe the beverage and the leaf. Known as Camellia sinensis, tea is an evergreen plant of the Camellia family. It has smooth, shiny pointed leaves which look similar to the privet hedge leaf found in British gardens. The Tea Plant There are more than 1,500 teas to choose from more than 25 different listed countries around the world but the main producers are India, Sri Lanka, Kenya, Malawi, Indonesia and China. It is cultivated as a plantation crop, likes acidic soil and a warm climate with at least 50 inches of rain per annum.
Other factors affecting flavor characteristics are the methods of processing and, of course, the blending together of teas from different areas and regions OR the additions of flowers, fruit, oils, herbs or spices from other plants. Overview of tea industry in Pakistan Product Lifecycle Matrix Introduction Growth Maturity Decline Sales Lipton Tapal Supreme Tetley Time Company Introduction Tapal Tapal is a well known name in Pakistan. In 1947, it started business and now are a Tea leader and so celebrated its 55 th anniversary in 2002. Their first shop was in Jodia Bazaar.
The journey of Tapal’s remarkable success is the combined efforts of three dynamic generations of the Tapal Family. Tapal started out as a family concern under the personal supervision of its founder, Adam Ali Tapal. The company continued to grow under the management of th e founder’s son, Faizullah A. Tapal. . Currently it is managed by the founder’s grandson, Aftab F. Tapal who has continued giving further strength to the foundations 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. He was the first to introduce soft packs in the country. He developed an entirely new brand and category- Tapal’s Family Mixture (the mixture of tea & dust). Mr. Aftab Tapal was the first to invent the highly successful brand Danedar Leaf Blend. In December 1997, Tapal Tea became the first Pakistani Tea Company to earn the ISO-9001 certification: a symbol of the highest international quality standards.
Again in December 2000, Tapal acquired the ISO-9001: 2000 certification, making it one of the first few companies in the world to achieve this milestone. In addition to the standard requirements, the ISO -9001: 2000 certification system includes requirements for environment improvement, concepts of TQM (continuous improvement) with major emphasis on consumer requirements and satisfaction.
Big companies that fail to keep pace with changing times by technologically advancing themselves or failing to keep a finger on the pulse of the consumer often become so complacent that they tend to become almost like dinosaurs…flirting with extinction. For companies today, new product introductions based on consumers need and backed by explicit points of differentiation, play a pivotal role in grabbing the leader ship position from jaws of competition. Revitalizing confidence of sales team in their “heroes”, winning the hearts of consumers and putting animal back in the cage where it belongs.
Timing is of quintessential importance. The generals staging the these wars, need to be proactive, always two steps ahead of the competition, know precisely when their pray is most vulnerable and then move in with agility of commando to unleash mayhem by striking the dagger in the animal’s heart. for people who find cola wars interesting…sip into this…and get taste of tea war where one brand, our hero, that is Tapal Danedar , has almost single-handedly run through the enemies camps like hurricane Katrina did on that fateful day in New Orleans.
Here the attacked with all marketing strategies as mention above and becoming market leader now Tapal with such a product organogram is strategically aligned to defend them selves. Some of the strategies they must be using are given below: Pioneer of the Danedar category in Pakistan, Tapal Danedar remains a favorite around the country with its grape-nutty appearance, rich golden color and strong refreshing taste.
In fact its popularity is such that other companies have launched their own versions of this blend, but Tapal’s remains the original and ultimate Danedar because of its unique color, aroma and taste. Today, Tapal Danedar enjoys the position of the “No. 1 Tea Brand” in Pakistan.
COMPETITIVE STATEGY
They should try to continuously improve themselves through creating value addition and focusing on the image it has been able to develop. This can only be done when they are able to maintain Dramatic difference of there Brand from other Brand th rough image & product differentiation Tapal should never play defensive but a strategy should be aligned that they should be attacking themselves and improving them self with time as the Change(effective change) has become the order of the day) and thus not becoming complacent.
Tea as a nature is a habitual buying, and Lipton being there for decades has become a household name and shifting from Lipton to Tapal is not easy. So it is very important that Tapal make strategies in increasing their market share by shifting consumer behavior from.
SUGGESTED UPGRADE FOR THE VALUE DELIVERY NETWORK
Tapal imports its raw materials from Kenya that could prove to be very risky as in case of economic crisis or natural calamity. Such situations can cause the orders for raw materials not to be completed on time, or may have problems in completing the orders at all. Tapal should try to build such relations that would assist in delivering the raw materials even if there is a crisis in the supplier’s country (they must not back out in such times) or be able to help when there is excess demand in the market and company’s stock is low.
Tapal can also think of making its own raw materials in Pakistan the long term it can help ponds reduce its costs, so on the same time reduce its price which can bring it closer to the competitors and in the long-run they can even export it to other countries which is going to be strategically very crucial in future times. Tapal, with its strategy of importing the raw materials has to bear the shipping costs and the taxes. Though this plan, if implemented needs a lot of investment but the returns would be high.
Raw materials would be available on short period notices, foreign exchange would be saved which is spent on paying taxes, shipping costs and to importers. Basically, the company would be able to look after the quality of raw materials and closely monitor its costs because fluctuating exchange rates and inability to check on raw materials sometimes creates problems. Although Tapal is available in more places like in villages etc easily than other brands but it should make its distribution more stronger. It should hire its own distributors and give them incentives by not allowing them to sell the competitors tea products.
Permanent distributors would always stay loyal because presently Tapal and Lipton dominate the market but arrival of any another good tea brand may compel distributors to buy more of that product if they are given good incentives like greater profit margin. Distributors chosen should also be such that run their channels on large and wide scale; selling and making the product available even in remote areas. Making the distributors part of the company is necessary and keeping positive relations is essential part.
Therefore, any break in the value delivery chain would prove to be harmful not only for company but for the consumers also. Consumers not getting the product on time would compel them to ask for the competitor’s product and the company would lose out its profits and customers. In between, other channels would encounter the same problems. So these actions are necessary in order to strengthen the value deliver chain network.
CURRENT STATUS OF SEGMENTATION
There are two clear segments of consumers in the market, branded tea consumers and un-branded tea consumers. In Sindh, branded tea is consumed by most of the cities, whereas in the rural areas both branded and unbranded are equally popular. In Punjab, the city dwellers as well as a majority of rural areas are absolutely brand loyal while unbranded tea is only popular in teashops and hotels.
In NWFP and Balochistan, 90% of the population still prefer the unbranded form as it gives them the chance of see and smell what they buy before paying for it. In addition, the mindset is such that now no other tea brand can compete because consumers are strongly brand loyal. Tapal’s consumers can be segmented on the basis of income strata.
SUGGESTED UPGRADE FOR SEGMENTATION
Demographic segmentation should also be done for teenage tea drinkers: Over the years the trend of drinking tea has increased amongst teenagers. Some 6- 7 years ago teenagers were more interested in cold beverages such as soft drinks and juices but now the trend has changed and teenagers prefer to drink tea so Tapal can segment the market in terms of teenage tea drinkers enabling it to serve this segment by using applying its brand in such a way that it seems appealing to this its young customers.
Geographic segmentation can be done for specific areas in major cities: In every city there are particular areas where most of the high-income group people reside. For instance in our city Karachi, the areas of Clifton, Defence, K. D. A etc are assumed to be the elite areas occupied by the high income class. Tapal can also segment the market in terms of area for example catering to the people living in Defence; it can observe their buying pattern that how much they buy? How often they buy? Etc and based on that it can make a new line extension suiting the needs of such users.
Catering to such users is important because they are heavy users of tea for their usage rate is high compared to other people living in areas besides these. Occasional segmentation can be done: Tapal has currently not segmented the market for special occasions. But it should do so as the consumption of tea increases on occasions such as Eid, Basant and during the monsoon season for people tend to drink more. This occasional segmentation will result in increase of sales plus customer satisfaction. Segment the market in terms of heavy and medium users.
Tapal can segment the market in terms of heavy and medium users. For instance, Tapal can consider hotels and big organizations as heavy users of their product and home users as medium users and then go for different marketing plans for both the two segments. For the heavy users It can provide tea in bigger quantities at reduced price or may be it can come in contract with such heavy tea users, this thing will not only increase Tapal’s sale but will also increase awareness among the people who drink tea in such organizations and hotels.
For the light users Tapal can do a market research and find out that what is the best quantity-price package the home users look for and then target this segment with an appropriate marketing plan.
IMPROPER AGE SPECIFICATIONS
Focusing on the advertisements, one would notice that they usually specify the age group of about 18-45 maximum 50 years. But one should realize that the story of good taste goes beyond that age limit. Many people older than the age of 50 prefer to have Tapal compared to other brands. The company should extend the age limit to at least 70 years and grandparents both maternal and paternal should be portrayed in the advertisements as well.
If Tapal loses its focus on these consumers then there is a possibility that some other competitive brand may come up and target this line of consumers eventually resulting in a loss of market share for Tapal. Apart from that they should concentrate on further targeting the younger age group between (15 – 25), and create an image which appeals to this generation, as this age group are not only their expected present customers but they would also be their future major consumer.
