Ceylon Tea came into being nearly a century and half back when the then existing coffee plantations, struck by a deadly disease – which virtually proved the death knell of coffee in Ceylon as it was then called, were converted to tea plantations. Nearly all the coffee plantations were very soon converted to tea plantations. As Ceylon Tea made its mark in the world and was being widely traded in the markets, measures were instituted to facilitate and monitor the process of manufacture and sale of tea to be shipped to foreign countries. On 30th July 1883 the first public sale of tea took place. The Ceylon Chamber of Commerce brought under its purview the conduct of these auctions. In 1894 the Ceylon Tea Traders Association was established. Today almost all tea produced in Sri Lanka is sold in auctions conducted by these two organizations.
This assignment is mainly about a FMCG product which the organisation depends only on Tea. I have sectioned this assignment in to different sections, to make the reader easy and understandable. I have also given a brief idea about marketing orientation, key steps to follow to be marketing oriented and also difficulties of implementing marketing orientation. Then I have spoke about the marketing environment with micro and macro environment and also how these environments impact to the organisation.
At last I worked with marketing mix and how the marketing mix elements are blended together in an organisation.
I hope this assignment will be something different and interesting task for you.
Mainly concentrated on preliminary data questionnaire and the study also contains secondary data from www.zaidtea.com Got reference from articles and books are revealed by tables and diagrams. Also discussed and got ideas from people who are in the high position in the tea industry.
Body of Assignment
1. Zaid Tea Company
1.1 About Zaid Tea
The Company incorporated in 2008 was formed in the year 1998 by a person with multifaceted experience gained in the tea industry and inherited from his forefathers of two previous generations.
Naushad Jamaluddin the Managing Director/CEO of ZAID TEA CO. (PVT) LTD and a scion of an icon in the tea industry was nurtured in it from an early age during the tenure of his school days whilst assisting his father and grandfather in their tea business and plantations. He was trained in the delicate art of tea tasting by some of the best experts in the industry. He has blossomed to be an expert, having an exquisite flair in tasting and blending teas to meet the most exacting requirements of his buyers. Zaid Tea with its well experienced, diligently trained resource personal and cutting edge knowhow is eminently suited to seamlessly source and deliver the most exacting tea blends to its diverse worldwide clientele. Selecting for them the choicest of teas produced in factories located in the tea plantations of the central highlands of Sri Lanka and sold at the Colombo
Tea Auctions, each having their distinct and subtly varying aroma, flavor and liquor Zaid Tea Co (Pvt.) Ltd is incorporated as a limited liability company under the Companies Act of Sri Lanka. It is registered as an exporter of Ceylon Tea with the Sri Lanka Tea Board – the regulatory body of the Government of Sri Lanka entrusted with the task of ensuring the maintenance of the quality and image of Ceylon Tea exported from the country The Co. is also registered with the Sri Lanka Export Development Board as an exporter of Ceylon Tea. This is another regulatory body of the Government of Sri Lanka promoting exports in general from the country
1.2 Products and Main Brands
Zaid Tea Company has their own brand – the “Maskeliya Kahata” range of black teas comes in aluminum pouches and tea bags with their distinct aroma, flavor and liquor. The teas come from plants grown in the cool crispy air of the mountain ranges of the Hatton – Maskeliya tea plantations famed for its teas with its distinctly fine aroma and flavor
Further they have their own brand of blended teas and green teas
a) Maskeliya Kahata in aluminum pouches
b) Maskeliya Kahata in tea bags
a) Kingswood Tea in loose packaging
b) Kingswood Tea in tea bags – flavored and unflavored
a) Kingswood Green Tea in loose packaging
* Kingswood Green Tea in tea bags – flavored and unflavored
a) BLACK TEA
Bulk Teas – They source and deliver unblended or specified blends worldwide packed in paper sacks, plywood chests and corrugated cartons with inner lining of either aluminium foil or suitable polythene to retain the freshness and aroma
Branded Teas – They also source as per customer specifications and blend, package in printed cartons or other packaging as per their own brands and deliver worldwide
Flavored Teas – Here too we can supply either in bulk or as per customers branded or un branded packaging – cinnamon, vanilla, ginger etc
b) GREEN TEA
Zaid Tea are in a position to supply you Green Tea plucked and processed from the finest tea gardens located in of the high mountainous terrain found in the central highlands of Sri Lanka where the air is fresh, pure, cool and crispy. It is manufactured to the highest international standards. Like black tea we can supply in bulk or customized brand, packaging and flavoring – unflavored, jasmine, mint etc
1. What Is Marketing Orientation
A business which begins work on, or philosophy that focuses on identifying and meeting customer’s needs and wants satisfyingly. -Himaz Ahamed
2. Key steps that Zaid Tea should implement in order to be marketing oriented 2.1 Customer Focused
An organizational orientation toward satisfying the needs of potential and actual customers. Customer focus is considered to be one of the keys to business success. Achieving customer focus involves ensuring that the whole organization, and not just frontline service staff, puts its customers first. All activities, from the planning of a new product to its production, marketing, and after-sales care, should be built around the customer. Every department and every employee should share the same customer-focused vision. This can be aided by practicing good customer relationship management and
maintaining a customer relations program. In order to achieve this, the organization must: a) Define its market, effectively segment and target the right customer and listen to customers. b) An extensive programme of employee education and communication may be necessary to introduce customer focus in order to create the environment that encourages to think customers. c) Implement an effective marketing information system that will track customer needs on a continuous basis. 2.2 Competitor Focused
In terms of competitors, in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats. Profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment.
Competitor focused concept is more preferable in markets which are growing very fast. Tea also one of the fastest growing market in Sri Lanka. So Zaid Tea also can invest in gathering more data about competitors which will enable them to develop innovations at lower costs. 2.3 Strategic Vision
Develop a long-term, market-oriented strategic vision by viewing marketing as more than a series of promotional tools and techniques. Strong leadership from the top with high level executives building a customer philosophy into their business plans and define the future in terms of creating long-term value for stakeholders.
Figure-01 Market vs Operations oriented structure
3. Difficulties in Implementing Marketing Orientation Concept to Zaid Tea Even though Zaid Tea might feels that the marketing orientation is the only correct path to be successful, in practice there are likely to be barriers in developing such an orientation. They are as follows: 3.1 Lack of Effective Customer Service
The job of the customer-service staff involves more than just answering
questions and providing solutions to problems that arise. For market orientation to prove successful, it must also include customer-service representatives who take the time to get to know each customer’s needs and preferences. Zaid Tea Company also can gather records of the feedback it receives and analyze them for use in developing market-orientation plans. Without such customer-service efforts, company loses key opportunities to obtain information. 3.2 Lack of Marketing Knowledge
Lack of marketing knowledge, skill and experience are among the challenges of developing market-orientation plans. Many company employees understand basic marketing concepts, but lack the in-depth knowledge needed to develop marketing-orientation strategies that work. Some companies deal with this by seeking additional education for key employees or by hiring experienced, skilled marketers. Skilled marketers can help develop solid plans and give direction to key employees and departments. For example, an experienced marketer might help customer service, sales and technical-support departments learn how to incorporate a company’s overall market orientation plan. 3.3 Conflict between marketing and other functions
The power struggle between different departments within an organization can hinder the process.
1. Marketing Environment Framework
A company’s marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.
(Philip Kotler – 12th Edition)
Figure-02 the marketing environment
2. Micro Environment
Factors or elements in an organization’s immediate area of operations
that affect its performance and decision-making freedom. These factors include competitors, customers, distribution channels, suppliers, and the general public. Micro Environment| Description| Factors that impact to Zaid Tea| Suppliers| A party that supplies goods or services. A supplier may be distinguished from a contractor or subcontractor, who commonly adds specialized input to deliverables.
| A supplier’s behavior will directly impact the business it supplies. If a supplier provides a poor service Zaid Tea this could increase timescales or product quality. An increase in raw material prices will affect an organization’s Marketing Mix strategy and may even force price increases. Close supplier relationships are an effective way to remain competitive and secure quality products. | Intermediaries| Firm or person (such as a broker or consultant) who acts as a mediator on a link between parties to a business deal, investment decision, negotiation, etc. Intermediaries usually specialize in specific areas, and serve as a conduit for market and other types of information. Also called a middleman. | Zaid Tea must partner effectively with marketing intermediaries to optimize the performance of the total system.| Competition| The marketing concept states that to be successful, an organization must provide greater customer value and satisfaction than its competitors.| Competitor analysis and monitoring is crucial if an organisation is to maintain or improve its position within the market. If a business is unaware of its competitor’s activities they will find it very difficult to “beat” their competitors. The market can move very quickly. As a business it is important to examine competitors’ responses to these changes so that you can maximise the impact of your response.| Customers| A person, company, or other entity which buys goods and services produced by another person, company, or other entity.| Zaid Tea Company’s marketing plan should aim to attract and retain customers through products that meets their “wants and needs” and excellent customer service.| Publics| A public is any group that has an actual or potential impact on an organization’s ability to achieve its objectives. | According to Zaid Tea there are number of publics that will impact. They are:Financial Public, Local Public, Media Public, Government Public, General PublicZaid Tea should keep a good relationship with these publics in order to run
successful business. |
3. Macro Environment
The major external and uncontrollable factors that influence an organization’s decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces. Macro environment is also known as uncontrollable environment.
Figure-03 Macro environment forces
The main forces in the macro environment are commonly denoted by the mnemonic PESTEEL forces. a) Political Environment
b) Economical Environment
c) Social and cultural Environment
d) Technological Environment
e) Ecological Environment
f) Ethical Environment
g) Legal Environment
3.2 Political Environment
The first element of a PESTEEl analysis is a study of political factors. Political factors influence Zaid Tea Company in many ways. Political factors can create advantages and opportunities for Zaid Tea. Conversely they can place obligations and duties on company. Political factors include the following types of instrument: – Legislation such as the minimum wage or anti discrimination laws. – Voluntary codes and practices
– Market regulations
– Trade agreements, tariffs or restrictions
– Tax levies and tax breaks
– Type of government regime
Non conformance with legislative obligations can lead to sanctions such as fines, adverse publicity and imprisonment. Ineffective voluntary codes and practices will often lead to governments introducing legislation to
regulate the activities covered by the codes and practices. 3.3 Economical Environment
The second element of a PESTEEl analysis involves a study of economic factors. Zaid Tea Company also affected by national and global economic factors. National and global interest rate and fiscal policy will be set around economic conditions. The climate of the economy dictates how consumers, suppliers and other organisational stakeholders such as suppliers and creditors behave within society. An economy undergoing recession will have high unemployment, low spending power and low stakeholder confidence. Conversely a “booming” or growing economy will have low unemployment, high spending power and high stakeholder confidence. A successful organisation will respond to economic conditions and stakeholder behaviour. Furthermore Zaid Tea will need to review the impact economic conditions are having on their competitors and respond accordingly.
1. Traditional Marketing Mix
1.1 What Is Marketing Mix
Marketing mix is the set of controllable tactical marketing tool that firm blends to produce the response it wants in the target market. The marketing mix consists of everything the firm can do to influence the demand for its product. Thus in performing their key tasks marketing managers have at their disposal marketing programs to create customer satisfaction and ultimately profit for the organisation. These tools are often referred as the “4P s” on how to use these ingredients require marketing research and information. Marketing mix variables are as follow:
Figure-04 Traditional Marketing Mix
2. How The Marketing Mix Elements Are Blended Together In Zaid Tea Company Sri Lanka is one of the oldest tea producing countries in the world – commercial Production was started in 1867 by the British planter James Taylor in Loolecondera Estate in Kandy. The tea produced in this country, popularly known as “Ceylon Tea”, ranks among the best available teas in international trade. In 2007, Sri Lanka was the third-largest tea-producing
country globally, with a 9% share of global production, producing 30.6 million kilograms of tea. The total extent of land under tea cultivation has been estimated at approximately 187,309 hectares.
Sri Lanka produces tea throughout the year, and the growing areas are mainly concentrated in the central highlands and southern inland areas of the island. They are broadly grouped under these headings according to their elevations, with high growns ranging from 1200 m upwards, medium growns covering between 600 m to 1200 m. and low growns from sea level up to 600 m. High grown teas from Sri Lanka are renowned for their taste and aroma.
The two types of seasonal tea produced in these areas, Dimbula and Nuwara Eliya, are much sought-after by blenders in teaimporting countries. Uva teas from the Eastern Highlands contain unique seasonal characteristics and are widely used in many quality blends, particularly in Germany and Japan. The medium grown teas provide a thick colour variety which is popular in Australia, Europe, Japan and North America. The teas produced in low grown areas are mainly popular in Western Asia, Middle Eastern countries and CIS countries. Most factories in these areas produce what is known as a leafy grade of tea, the tea leaves of which are highly twisted and can grade into long particles.
Tea is produced from the Camellia Sinensis plant. The tea plant, which is evergreen, isn’t a shrub as popularly believed but a tree that is grown like a shrub to facilitate the process of tea plucking and production. It is native to Southeast Asia and is grown in a wide range of climatic conditions across the world. Tea is mainly produced in India (the world’s largest producer), Sri Lanka (till recently the world’s largest exporter), China, Kenya, Vietnam, Indonesia and Malaysia. The differing climatic conditions in the world’s various tea growing areas influence the quality and taste of the various teas.
Zaid Tea Company has their own brand – the “Maskeliya Kahata” range of
black teas comes in aluminium pouches and tea bags with their distinct aroma, flavor and liquor. The teas come from plants grown in the cool crispy air of the mountain ranges of the Hatton – Maskeliya tea plantations famed for its teas with its distinctly fine aroma and flavor
Further they have their own brand of blended teas and green teas
c) Maskeliya Kahata in aluminium pouches
d) Maskeliya Kahata in tea bags
c) Kingswood Tea in loose packaging
d) Kingswood Tea in tea bags – flavored and unflavored
b) Kingswood Green Tea in loose packaging
* Kingswood Green Tea in tea bags – flavored and unflavored
Table 02- Price List Effective from 1st January 2013 of Maskeliya Kahata ZAID TEA CO (PVT) LTD|
Price List Effective from 1st January 2013|
Product| MRP| WSP| QDP|
Maskeliya Kahata 20g| 20.00 | 18.00 | 17.10 | Maskeliya Kahata 50g| 42.00 | 36.96 | 35.11 | Maskeliya Kahata 100g| 84.00 | 73.92 | 70.22 | Maskeliya Kahata 250g| 195.00 | 171.60 | 163.02 | Maskeliya Kahata 500g| 385.00 | 338.80 | 321.86 | Maskeliya Kahata 1Kg| 755.00 | 615.00 | 584.25 | Maskeliya Kahata 2Kg| 1,495.00 | 1,215.00 | 1,154.25 | Maskeliya Kahata100 Tea Bags| 250.00 | 220.00 | 209.00 | | | | |
| | | |
| MRP – Maximum (Marked) Retail Price|
| WSP – Wholesale Price – Price to Retail Trader|
| QDP – Quantity Discounted Price| |
The above table shows the effective price list of Maskeliya Kahata from 1st January 2013.
The role of this element basically describing availability, which is “right place” and the “right time”. Zaid’s Maskeliya Kahata is also available in every retailer shops. A channel of place is a set of interdependent organisation, which helps to make a product available in market for use of consumer. Zaid Tea also uses this concept of channels in order to provide Maskeliya Kahata available in the market. The below diagram denotes how Zaid Tea uses the distribution channels.
Figure-05 Distribution channels of Zaid Tea
* Note- There is also another Distribution channel method:
PRODUCER AGENT WHOLESALER RETAILER CONSUMER
In a fast growing market day by day everything is fluctuating faster than we expect. Products and services are also same. The purpose of the project is to exhibit organisation to be marketing oriented and to aware about the marketing environment with micro and macro environment , how these environments impact to the organisation.
a) Explore the possibilities of upgrading plantation jobs, by providing upward movement, to attract more workers to work in the estate.
b) There should not be any effort from the plantation companies to dilute the existing labour laws which protect the workers in the tea industry, on the
grounds of declining returns.
c) The big companies could also tie up with the ILO and other civil society organisations to help small growers achieve minimum labour and environmental standards. Adherence to such standards will give an additional product value to the tea being sold at the retail level. In return, the companies could provide incentives in terms of better prices to the small growers. These
practices could work to the advantage of both.
a) Provide technical and marketing assistance to the small and marginalized Farmers
b) Provide credit schemes and debt management services to the plantations
c) Strengthen the relationships between small tea growers and private processing factories. Develop a strategic intervention in order to help each actor aware of their rights and responsibilities within the value chain.
International tea buyers
a) Take responsibility for conditions in their entire tea value chains, particularly where they have more influence.
b) Provide support to the small tea growers through technical and marketing assistance
c) Pay a higher price for tea produced in a sustainable process
d) Do not lobby to dilute the social protections available to tea estate workers
e) Conduct multi-stakeholder monitoring and verification of the social and environmental standards on the tea estates from which tea is procured
* PCM Text Book
* Kotler P. “Marketing Management” 9th Edition, Prentice hall of India, 1997, pp 128-150 * www.zaidtea.com