The Unilever Group is one of the world’s leading suppliers of fast-moving consumer goods. Besides having a significant global presence, Their Lipton brand is a leader in the international market. This report contains and explains the major variable components, which are essential in the process of marketing. It will give an in depth analysis of the tea market. It will also give a comprehensible picture of the internal and the external factors involved that encircle the Tea Product.
Lipton Herbal Tea Ingredients
Holy Thistle –has been used medicinally for over 2000 years, most commonly for the treatment of liver problems by supporting it in the release of toxins. It has been highly regarded for therapeutic uses and was cultivated throughout Europe. Holy thistle products are still popular in Europe and the United States for various types of liver disease. Holy thistle is believed to have great power in the purification and circulation of the blood. Persimmon –leaves are a good source of important dietary antioxidants, such as vitamin A& C. It has been widely used as a tea in oriental countries. Persimmon leaf is anti-allergic in composition. It is also used topically in some beauty products to help to clarify the skin and eliminate dull and dark areas. Malva Leaf –was considered as a perfect plant in early literatures. In ancient days it was not only valued as a medicine, but was used to decorate the graves of friends. Marshmallow Leaf –has been traditionally used to soothe and support the intestines. Herbs such as Marshmallow are often helpful for symptomatic relief of coughs and irritated throats. Topically, marshmallow is used to soothe and soften irritated skin. Marshmallow leaf is completely non-toxic.
Marketing Planning vs. Strategic Planning
Developing a marketing strategy involves two steps:
(1) Selecting a target market and
(2) Developing the best marketing mix (the 4 P’s or 7 P’s) to satisfy this target. Ultimately, the tactics becomes much more specific and provide more precise details about such matters as, say: where should we advertise? When should we run the ads? How will we get distribution in certain types of stores? Etc. In effect, the tactics describe how to achieve the strategies and how to manage resources that are required to implement the tactics. Companies need to analyze and track what their competitors are doing. It is important to know the strengths, weaknesses, objectives, and strategies of the competition. The marketing plan is an important document used by companies for planning. It is a road map and surveys the business environment, describes problems, threats and opportunities in the industry, contains a marketing strategy, and has financial projections/budgets. We must not confuse a marketing plan with a business plan.
A marketing plan is concerned more with strategy whereas a business plan is more concerned with financial information. The primary purpose of a business plan is to raise money from venture capitalists or bankers; the primary purpose of a marketing plan is to provide direction for a company. The marketing plan is an integral part of the business plan. Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”).
The main problem with this process is that the “environment” in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning.
On the other hand, strategic planning is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues. The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives. Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the “environment”.
It can help to:
•Identify sources of competitive advantage
•Gain commitment to a strategy
•Inform stakeholders in the business
•Set objectives and strategies
Marketing planning is also important since it is often a prerequisite for obtaining funding whether one is a marketer in a large corporation seeking additional money for his or her department or is part of a small start-up company looking for initial funding.
Customer-Driven Marketing Strategy
There are three processes toward an effective customer driven marketing strategy such as Segmentation Targeting Positioning Segmentation identifies the difference category like as age, location, & religion.- Targeting means product for specific people.- Position means minds of the customer.
Lipton’s Neighbouring Segments:
Geographic–The market of Lipton is segmented according to geographic criteria such as nations, states, regions, countries, cities, and neighbourhoods. Demographic –Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality. Demographic segmentation variables are amongst the most popular bases for segmenting customer groups. This is partly because customer wants are closely linked to variables such as income and age. Psychographic –Through psychographic segmentation Lipton’s consumer are divided according to their lifestyle, personality, values and social class.
Lipton’s Target Market:
Choosing a targeting strategy depends on company resources, product variability, product’s life cycle stage, market variability, and competitors’ marketing strategies. Lipton has equal benefit for everybody. We will have to focus on the all group of ages. Thus we will use Undifferentiated Marketing (or mass-marketing) where everything about the product is designed to bring all people to Lipton. This is a market coverage strategy in which a firm decides to ignore market segment differences and go after the one market with one offer. The reason of choosing full market coverage is to be a market leader in future.
Lipton’s geographic customers are of USA, Europe and India but in near future after establishing the product in these areas they will definitely launch their product in the rest of the continents.
•Demographic Target: All age groups Lower, Middle, and High income class •Psychographic Target: Higher-Middle class Middle class Lower-Middle class
•Current Market Trend: Market trend is now headed toward a more sophisticated and aware customer. The preference for high-quality product is increasing as customers are learning to appreciate the qualitative differences.
Lipton tea has been positioned in the market as “great tasting and good for consumers” because it is rich in protective antioxidants (Unilever 2007).It is globally promoted as “the perfect drink for active, healthy lifestyle” (Unilever 2007). The following flavours of herbal tea are currently available:
•Herbal tea with Lemon – Herbal tea with a twist of citrus flavour
•Herbal tea with Raspberry – Herbal tea with raspberry flavour
•Herbal tea with peach – Herbal tea with peach flavor Consumer welfare and sustainable development have been the main driving factors behind the packaging and marketing of Lipton Herbal Tea till now.
Therefore, in order to meet the diverse tastes of consumers all over the world, Lipton is continually adding new flavours in the product. These attributes are allowing the organisation to develop and expand its niche at a fast pace in the global arena. Furthermore, Unilever has a strong presence in the developing and emerging markets yet there is plenty of ‘white space’ to move into. These markets are the next in our planned rollout. SWOT Analysis (Business Portfolio Analysis):
When the situation is viewed in terms of SWOT analysis, the following can be highlighted:
•Strong Financial Backup: Lipton Unilever has been established as a group by five investors who are also its board of directors; providing Lipton Unilever with strong financial assistance.
•Emphasis on Quality: The Company manages to provide improved & innovative products to the consumers through research and development. Lipton Unilever is established with the primary concern for uncompromised quality in mind and all of their products are perceived by the consumers as the best in business with respect to quality. They maintain their high quality standards by importing professional expertise and technology from developed nations.
•Encouragement to innovativeness: The Company has a very aggressive strategy when dealing with developing new products, i.e. they are ready to take risks and come out with products that have unique differential advantages and are unavailable in the market.
•In-house research facility: Lipton Unilever has an in-house research facility, where market research can be done about consumer preferences and our competitors; the information is very useful to top level managers for decision making.
•High Price: Since the cost of production of most of their products is high because of various factors (imported ingredients, technology, quality and maintenance etc), they charge high prices for the items they produce.
•Inexperience in the Tea market: Although Unilever comprises of highly professional people and a strong marketing strategy; they are still considered new entrants in the tea market.
•High Growth Rate: Tea industry has high growth potential in line with high rates of population.
•Brand Equity: There is strong possibility to establish brand equity by creating awareness in untapped segments of the market.
•Increasing concern for health: Since the media explosion from the mid-90s, people have convenient access to information. Hence, people are being educated about the concern and need for health awareness and therefore have adopted increasing concern for their health and appearance.
•Rivalry firm: The tea industry facilitates a lot of competition from market leaders like Royal. Their longer existence in the market has given them an established consumer base and loyalty and has provided them with the experience that Lipton Unilever lacks.
•Economic Factors: Increase in government tariffs, import duties and political situation of the country i.e. economic instability could be a threat to Lipton’s product.
An Integrated Marketing Program
The Marketplace and Customer Needs and Wants:
Global Tea Market:
The tea industry is about 170 years old. It occupies an important place and plays a very useful part in the global economy. Tea plantations are mainly located in rural hills and backward areas. The major competitive countries in tea in the world are India, Sri Lanka, Kenya, China and Indonesia. China is the major producer of herbal tea while Sri Lanka and Indonesia are producing mainly orthodox varieties of tea. Kenya is basically a CTC (Crush, Tear, and Curl) tea producing country. India is facing competition from Sri Lanka and Indonesia with regard to export of orthodox teas and from China with regard to herbal tea export. Above Line graph clearly indicates that till 1991 Tea consumption grew at the phenomenon rate of 32.2% where as in recent past few years the average rate of consumption growth is 0.7%. Tea being the only beverage which is consumed at the largest following Water hence there is no trouble to global tea market future with growing population.
Customer Needs and Wants:
The health related issues are increasing day by day due to the lifestyle and inclination of the generation towards fast food or junk food which is generally responsible for health hazards. Unilever’s research shows that majority of the people have developed health consciousness. This is mainly due to the various health programs being broadcasted on television as well as a variety of articles being published in magazines and digests. Lately trends show that people have started reverting back to the natural means of maintaining health. Natural means ensure high nutrition as well as health enhancement. Moreover nowadays more and more people are getting literate and educated. The education in turn brings awareness in the people and they understand what do’s and don’ts. There is class of people who are very health cautious and most of them fall under high class societies.
Since it is difficult to change the lifestyle of people all of sudden; people look for better product which can keep them healthy and offer resistance or meditate their health for long life and better health. We must keep in mind that tea is hot beverage consumed by people all over the world at highest after water. So it is a great idea if tea can prove as tea as well as medicine and offer better health & immunization as it is consumed twice to thrice a day. If tea can provide health benefits it will be surely welcomed by the class of health conscious people. Furthermore, A few recent studies suggest that the health benefits would drive the performance of Lipton herbal tea across the globe (Winslow 2006). Consumers generally perceive tea consumption to be a healthy activity and are more likely to consume herbal tea rather than other soda based drinks. Therefore, the 100 percent Natural Tea and 150 mg of protective natural antioxidants has made Lipton tea a major participant in the global tea market.
Integrated Marketing Plan for Lipton:
Our Marketing Objective:
•To offer consumer best health advantage through Lipton Tea.
•To establish Lipton as market leader in herbal tea industry.
•To enable Lipton Tea to satisfy, fulfill the consumer’s personality & lifestyle.
•To increase Lipton Tea’s popularity as an icon in Herbal Tea product. In order to achieve our objectives we will use following strategies while developing our marketing mix.
Value Based Pricing
We will set our product price, based on the benefits it provides to consumers. Because our offer is unique and highly valuable features are better positioned to take advantage of value-based pricing.
Multi-Channel (Hybrid) Distribution Systems
We can utilize more than one distribution design by following a multi-channel or hybrid distribution system. As Example, we may use a direct retail system by selling Lipton Tea in company-owned stores, and through a direct marketing system by selling via direct dispatch, and through a single-party selling system by selling through grocery stores. This approach will allow us to reach a wider market; however, we must be careful with this approach otherwise channel conflicts will arise. Promotion Mix (Integrated Marketing Communications)
In order to deliver a clear, consistent, and compelling message about Lipton and its product we will use; Advertising as it will allow us to reach many buyers and repeat message many times; Sales Promotion since it provides wide variety of tools and rewards quick response; Public Relations because it is very believable and will dramatize Lipton and its product.
Marketing Mix of Lipton Tea:
–Lipton Tea will be a high quality product offered as specially blended herbs tea. Contents of the Lipton Tea will be:40 bags, 80 bags, 150 bags, 250 bags (Family pack)The amount of bags refers to different target groups.40 bags for singles, 80 bags for couples,150 bags and 250 bags are Family Packs. (250 bags is most famous nowadays)
Packaging: Customer perception of a package creates brand equity and purchaser loyalty. The image presented by the package largely determines success or failure of a tea line. Appearance stimulates memories and emotions inside the purchaser, who often times is female, often buying for an entire family. Thus colour, image and slogan of Lipton must all combine to facilitate customer allegiance. Before coming to this idea we had to systematically search for new product ideas through analysing our internal sources, customers, competitors, distributors, and suppliers. Afterward we marked the best idea and dropped poor ones by examining the market size, product price, development time and costs, manufacturing costs, and rate of return.
–High quality tea for a reasonable price will be bought from Assam & Darjeeling (India) and will then be blended and packed in the Lipton factory. Then we may open up company-owned stores to start a direct retail system to sell Lipton Tea. We can even sell Lipton tea directly to the end consumers by sending direct dispatch from factory. At the same time the final product will be distributed to authorized dealers and retailers such as supermarkets and main tea shops so the end consumer has easy access to it. Place in supermarket: On the middle and lower levels of self. The Lipton Tea will be placed according to the content of tea bags.
Prices for the tea will be as the following:
– Price of $18 for regular sized pack
-Price may be increased to reflect quality
Reasons for pricing policy:
Lipton Tea will be competing against the main player on the Herbal Tea Market Royal Tea by setting a higher price but offering more value for it. Various promotion activities, giveaways and advertising on radio and television will help to establish the brand and gain market shares.
The promotion is the most important point to launch our products because we want to be able to compete with our biggest competitor. We must focus on this point because the people like to purchase bargains or buy products that offer free gifts. Other brands do not offer as many promotion and free gifts. This is why it is important to focus especially on the Promotion activities of the marketing mix. We are going to set up original events in order to attract new customers and consumers of other tea brands.
-Build loyal customer base
In order to achieve above mentioned we will pursue the following: – Stand in the supermarkets: we want to set up a stand in the supermarket in order to make tasting to the supermarket’s clients.
The stand should be placed between the fresh food and the food with the aim to attract all the consumers. The stand should represent the brand with the colour of the company, the logo, the environment of Lipton. For example, the stand could be coloured with a combination of red and yellow. Moreover, the hostesses can give some presents to the children like, balloons with the logo of the brand and pens with the logo. Also, during the launch of our product (one week), all the customers at the supermarket will receive a sample of “Lipton Tea” for free at the cashiers including a voucher which explains the game to win a trip to London. Promotional offers during the year: If a client buys a box of 150 bags, he will get a free coupon a spoon or a little kettle.
In addition, during first two months, we can organize a game: when you buy Lipton, you win some points and with certain numerous of points, you can get a present which represents the brand image. Promotional event for Lipton Tea launching: During one weekend in a big city we will organize a big event. In the street, there will be hostesses with special clothes who will distribute samples and cups with tea to offer the product to passer-by. After the show, they will hand out flyers the people can fill in so as to win the weekend trip to London. At the end of the event, there will be a drawing of lots. The winner will receive the present(tea boxes) via post way. Furthermore, in the street there will be a lot of decoration of the brand image. Advertisement: At the beginning, the strategy is to focus on the Internet, the radio and on daily newspaper to reach a lot of customers. These media are noticed by a large target group which will help the firm to be known. After six months or one year, we will begin a campaign on television, in magazines and on airports.
Building Profitable Relationship and Creating Customer Delight
Customer Relationship Management:
Customer relationship management (CRM) refers to building one-to-one relationships with customers that can drive value for the firm. The continuing evolution of CM is made possible by understanding the interactive relationships that develop between firms and customers and among customers themselves. Lipton will increasingly be able to customize marketing messages to larger target audiences on the basis of the customer’s expected response and the customer’s value to the firm. By following the CRM strategies discussed here, firms can reduce overall marketing costs, increase overall customer response rates, and, most importantly, increase overall customer and firm profitability.
Lipton’s marketing plan has data on markets, prospects, and lists. This is also supported through a third party vendor. But marketing needs to drive generated leads to Sales for follow up. Thus, the marketing department also could use feedback from service and sales about what campaigns are working. Customer Service has excellent customer feedback, but it’s not looping back into marketing department. This is the type of data that can act as the foundation for upcoming marketing campaigns. Customer Service can also provide sales representative important product information or specific account issues that would be invaluable for sales to have before they call on an account.
Finally, Customer Service can be used for cross sell and up sell opportunities. The key is to have all your customer information integrated. This provides each department with a 360-degree view of the customer, and ensures that the data is current and complete. Lipton’s CRM applications will also enable companies to interact with customers throughout multiple channels including the Web, phone, fax, direct mail, e-mail, and in person or through partners.
Partner Relationship Management:
Partner Relationship Management is a used to describe the methodology and strategies for improving communications and relationships between companies and their channel partners. These solutions include key features for selling, commission, opportunity, marketing campaigns, inventory access, and other features designed to facilitate the relationship between manufacturers and their channel partners. Partner relationship management can take a number of different forms. In some cases, delivery of a product is needed during specific times of the day. For example, in Lipton’s shipping and receiving departments, suppliers must deliver within a certain time frame. In the busiest of locations, that window could be as little as 30 minutes. When traveling across a large geographic region, that can be a hard target to hit. Using software and other communication tools often provided through a partner relationship management strategy, suppliers, shippers and the end users can keep inconstant contact with each other.
This means the end user will be able to know where each item is each step in the process and when to expect it. Depending on the situation, this may allow Lipton’s factory to adjust production so that the entire operation does not shut due to supply concerns. Partner relationship management is also important for a manufacturer and reseller or retailer. Software allows the producer to understand when a certain product is in demand and allows that producer to adjust his processes likewise. Without this benefit, Lipton would need to wait for an order from the retailer or reseller. That could delay the process and thus allow both sides to miss out on valuable sales. In addition to communication, partner relationship management can also provide services in other areas. For example, it may include a partner loyalty component, which will provide a benefit to both companies. As those relationships are solidified, it will provide a good customer base on which both can depend.
Capturing Value from Customers to Create Profit and Customer Equity
The first four steps in the marketing process involve building customer relationships. The final step involves capturing value in return.
1) By creating superior customer value, the Lipton herbal tea creates highly satisfied customers who stay loyal and buy more.
2) By Creating Customer Loyalty and Retention
3) The aim of customer relationship management is to create not just customer satisfaction, but customer delight.
4) This means that companies must aim high in building customer relationships.
5) Customer delight creates an emotional relationship with a product or service, not just a rational preference.
6) Lipton herbal tea is realizing that losing a customer means losing more than a single sale. It means losing customer lifetime value.
7) Growing Share of Customer
8) Share of customer is defined as the share the company gets of customers purchasing in their product categories. (Thus, banks want to increase “share of wallet.”)
Building Customer Equity
Unilever want not only to create profitable customers, but to “own” them for life, capture their customer lifetime value, and earn a greater share of their purchases. Customer Equity in Lipton Tea Marketing consists of actions taken to build and maintain desirable exchange relationships with target audience involving a product, service, idea, or other objects. Customer equity is the total combined customer lifetime values of all of the company’s current and potential customers. Clearly, the more loyal the firm’s profitable customers, the higher the firm’s customer equity. Customer equity may be a better measure of a firm’s performance than current sales or market share.
Building the Right Relationships with the Right Customers
Not all customers, not even all loyal customers, are good investments. “Strangers” show low potential profitability and little projected loyalty. The relationship management strategy for these customers is simple:
Don’t invest anything in them.
“Butterflies” are potentially profitable but not loyal. The company should use promotional blitzes to attract them, create satisfying and profitable transactions with them, and then cease investing in them until the next time around. “True friends” are both profitable and loyal. There is a strong fit between their needs and the company’s offerings. The firm wants to make continuous relationship investments to delight these customers and retain and grow them. “Barnacles” are highly loyal but not very profitable. There is a limited fit between their needs and the company’s offerings. Important point: Different types of customer require different relationship management strategies. The goal is to build the right relationships with the right customers.
Factors Affecting the Effective Implementation of the Marketing Plan
Human Resources Capabilities:
The people working in this organization are the key to achieving effective implementation of those strategic plans. Staffing competent employees involves recruiting, training and retaining a capable and adaptable workforce. Knowledgeable, dependable and versatile employees have the ability to overcome the obstacles to change, and can meet performance goals even when other resources are scarce. If all of the other elements listed in this article are present, but the workforce does not meet these criteria, then achieving those objectives may be nearly impossible.
We have to Rethink existing policies and procedures, and make any changes necessary to facilitate the changes resulting from our strategic initiatives. We may find that certain aspects of our existing operational framework can actually impede strategy implementation, and that certain areas may stand out as being lacking in policy guidance in light of our new strategic goals.
Technology can give our organization valuable assistance in implementing new policies, procedures and initiatives. Utilize technology to enhance and maintain communication and accountability for all relevant managers and operational employees throughout the change process, and to keep track of implementation and performance goals and their achievement. This may require adding new systems and infrastructure, ensuring that all systems will function reliably, and training all relevant staff to use new systems and programs.
We must consider altering existing incentive systems to coincide with our new strategic objectives. As an example, if we can alter existing incentive system rewards employees on the basis of tenure, but our new strategic plan calls for a 50 percent increase in service plan sales to reposition our company as a service provider, then consider altering the system to reward employees or teams with high monthly service plan sales numbers .According to “Crafting and Executing Strategy” by Thompson, Strickland, and Gamble, our employees’ incentive-based goals will always coincide with our organizational objectives.
Strong Leadership and Culture:
Organizational culture and strong leadership are inseparable. We must encourage and train our management team to be agents of change, with the ability to champion new ideas and coach employees through the change process. Also, use our influence as a leader to reset the tone of our organization to reflect the importance and seriousness of our new strategic plans, and lead by example in terms of flexibility and dedication to change.
All of the internal elements listed in this article require capital to employ. For example, highly skilled workers demand higher wages, technological infrastructure can be costly, and reward systems require capital if material goods are offered. Thus proper budget have to be introduced.