Introduction To Lever Brothers Pakistan Limited Essay
Introduction To Lever Brothers Pakistan Limited
Founded in 1897, Unilever has provided superior products for millions of people throughout the world. Generation after generation of satisfied customers have continued to maintain Unilever’s reputation as an innovative manufacturer and marketer of family and health care products. Today it is a multibillion-dollar company whose products are distributed in 140 countries worldwide.
“Unilever’s vision is to have its products available within an arm’s reach of every individual’s desire.”
“Our purpose in Unilevers is to meet the everyday needs of people everywhere to anticipate the aspirations of our consumers and customers to respond creatively and competitively with branded products and services which raise the quality of life.”
Unilevers aims to interact directly with its consumers. Its goals are consumer satisfaction and making its consumers feel that the money spent is worth the product. In comparison, it distinguishes its sales objective as achieving greater penetration in terms of sales volume and market share.
Unilever’s excellence in quality, image and distribution, the founding stones of any consumer goods company, is the main reason behind its thundering success and leadership in the market. The company has a clear emphasis on quality and wants to provide the best possible products of the highest quality to its customers. It wants to grow continuously and not stay stagnant.
Lever Brothers Pakistan Limited
Lever Brothers is the largest consumer products company in Pakistan; it belongs to Unilever group of companies, which makes up one of the largest transnational in the world. Lever Brothers Pakistan Ltd. was incorporated in Pakistan in 1948. The company markets almost 50 well known household brands, like Lipton, Surf, Vim, Supreme, LifeBuoy, Lux etc. Which record approximately Rs. 20 billion in sales.
Mission Statement of Lever Brothers Pakistan Limited
We are a leading Consumer Product Company in Pakistan, a multi national with deep roots in the country.
We attract and develop highly talented people who are excited, empowered and committed to deliver double-digit growth.
We serve the everyday needs of all consumers everywhere for foods, hygiene and beauty through branded products and services that deliver the best quality and value.
We strive to remain an ever simple and enterprising business.
We use our superior consumer understanding to produce breakthrough innovation in brands and channels.
Our brands capture hearts of consumers through outstanding communication. Through managing a responsive supply chain, we maximize value from suppliers to customers.
We are exemplary in our commitment to Business ethics, safety, health, environment and involvement in the community.
The mission then translates into attaining a leading position in Pakistani market, by manufacturing and marketing high quality consumer products that benefit the customers. The aim is to be a lean, responsive and flexible organization, operating within a culture of innovation and enterprise. In addition, the primacy of the customer is a central value of the company.
The marketing objective is to increase profitability by increasing sales. By maintaining quality of products, the sales are improving and consumer demand of Levers’ products is increasing. Thus, profits and sales are increasing every year. In this way, the company’s image is not only maintained, but also improved very successfully over time.
Overview of the Beverage Market
The trend in the beverage market of Pakistan of market value share/growth is depicted in the table given below: Pak. Rs. Mn
As can be seen by the table given above tea is the market leader in the beverage market and is expected to retain its current position in the near future. However, the growth rate of the CSDs is much faster than tea whose expected growth rate has become stagnant.
An interesting point to note here is that LBPL’s share of the tea market is expected to grow steadily in the near future despite the fact that the growth rate of the overall tea market is expected to decrease.
The pie chart below shows the current 2000 value shares of the Pakistani beverage market.
Total Value Rs. 47,950 billion or 548 billion Pound Sterling. Does not include one step preparation drinks (i.e. Energile, Squashes etc.), milk
and non-commercial water.
Total Value Rs. 54,475 million or 615 million Pound Sterling Does not include one step perpetration drinks.
Overview of Tea Industry
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. It is said, that tea was introduced with the arrival of the British in the Subcontinent and became popular in the region during the British rule. The British people were clever enough to use a powerful slogan, which remained in the minds of the people. They said, “In winters it provides warmth and in summers, it gives freshness.”
Over a period of time, the quality and taste of tea was improved by the colonials. Mr. Thomas Lipton was the key person who introduced the aromatic soothing leaves, at prices affordable for the common man. This is one of the main reasons why “Lipton” even now occupies the place of the most well known brand of tea in this part of the world.
At present there are two kinds of tea available in the market: branded and unbranded (loose) tea. Therefore, the importers are also of two types, though both import tea from the same countries. Bulk importers sell tea to retailers in loose form, while the second category of bulk importers sell packaged tea under brand names.
All tea in Pakistan is imported. Therefore, tea, a traditional hospitality item in Pakistan, consumes a large amount of foreign exchange. Tea imports through legal route account for about 200 million US dollars per year and is growing. Another 60 million kilograms of tea or nearly half as much of total consumption of tea is smuggled, that is imported illegally.1 According to official sources, Pakistan consumed 148 million kg in 1996, 60% of which reached the consumer as branded products.
Annual black tea consumption in Pakistan is 0.9 kilogram per head; slightly less than British consumption is 1.25 kilogram per person.2 Pakistan is the world’s second largest importer, after Great Britain, and may become the largest importer due the increase in population and unabated increase in tea consumption. Tea drinking, over time, has doubled mainly because other drinks, especially fresh milk, have virtually disappeared as dairy production was neglected. Another reason is high population growth a year. About 50% of tea imports is consumed in Punjab, 30% in the NWFP, 16% in Sindh and 4% in Baluchistan.3
Pakistan mainly imports tea from Kenya and other African countries like Uganda, Burundi and Tanzania, while multinational companies in Pakistan also import tea from Sri Lanka, Indonesia and Bangladesh.
There are unlimited quantities of smuggled tea flooding the market. The main problem at present is that smuggled tea 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.
The cumulative import duty on tea in 1991 was 60%, 66% in 1992, 76% in 1993, 88% in 1993, 102% in 1995 and rose to 107% in 1996. Sources in the market indicate that the smuggled tea is being sold about 30% cheaper than the legally imported variety and, therefore, holds a great lure for the wholesalers.4
According to one estimate, some 60 million kg of tea, representing nearly 50% of the total consumption, came into the market illegally in 1997.5 The quality of some of the tea flooding the market is admittedly high. But given that it is sold loose, there is absolutely no guarantee that adulteration is not rife in this unorganized sector. The branded tea industry has now successfully lobbied the government for duty reductions (78% cumulative duties on tea) to make smuggling unattractive.
The above pie chart depicts the tea market according to pack forms.
Assessment of Industry Attractiveness
Threat of new entrants
Major players enjoy significant economies of scale and have strong brand identity. Large capital requirements required for setting up distribution channels and heavy advertising for new entrants, to compete against major well established brands.
Rivalry Among Existing Competitors
Devaluation and import duties make domestically produced consumer goods, including tea, more expensive than smuggled products. Smuggling of tea has hampered development and growth in the local tea industry. There is an oligopoly as there are only a handful of local competitors in the tea industry.
Bargaining Power of Customers
Generally, retailers in Pakistan are not large volume buyers therefore they are not able to bargain for proper discounts. Upper class consumers have strong brand loyalty, while low-middle class has become increasingly price conscious and are therefore, not very brand loyal. Retailers are likely to stock smuggled tea due to higher margin on it, and for the same reason, consumers are inclined to buy it, as it is cheaper for them.
Bargaining Source Of Suppliers
High differentiation of input for the tea industry, due to consumer preference for East African tea. Pakistan is one of the largest consumers of tea and a major market for Kenyan tea exporters.
Threat of Substitutes
Coffee is a substitute for tea, but consumer propensity for it is low. Smuggling of tea products into Pakistan continues to depress Levers’ sales and profitability.
Brief History of Lipton
1948- Lipton launched in Pakistan in tin pack
1949- Lipton discontinued
1955- Lipton reintroduced in Pakistan
1974- Lipton was discontinued due to the government price embargoes 1984- Lipton re-launched in Pakistan with a big bang
1987-Tea bags were added to the Lipton portfolio
1989- Lipton merged with Lever Brothers
1995- Lipton introduces Danedar
1998- Lipton re-launched
1999- Lipton re-launched with improved blend in smaller pack sizes 2000- Re-launch scheduled of Leafier Blend
Lipton was first introduced in Pakistan in 1948. Tea was sold in tin packs at the time. The year 1989 was a major milestone in Lever’s history. The tea giant Lipton was merged with Lever Brothers that year in Pakistan, five years after the international takeover of the Lipton company by Unilever. The most glorious era in LYL’s life was 1984-1992 with a record growth of 70% in 1989 and the highest ever brand volume achieved in 1992. This was due to an effective advertising campaign (Nazia/Zoheb), consistent with good quality tea, lower taxes and limited smuggling.
The table below shows the volume of sales of LYL in Pakistan over the years. Year
In 1997, Brook Bond, another leading player in the tea business in Pakistan, was merged with Levers, so that Lipton and Brooke Bond, once fierce competitors in the local market now belonged to the same company.
Brooke Bond had long been part of Unilever globally but in Pakistan it remained a separate entity until 1997. Lever came to realize that it did not make sense to have two Unilever companies competing with one another. “A lot of synergies would be created if the two companies were merged,” in the words of the former MD of Brooke Bond. The solution to any potential cannibalizing was to position the two brands differently. This effort was successful and Supreme, with its distinctive red packaging, came to firmly
represent the aspirations of the people of Pakistan. Supreme cuts across class, region and gender divide. Its success is also due to the brand’s catering to Pakistani tastes.
Lever, now owns three tea factories of which two are situated in Karachi – one in SITE and the other in West Wharf area. The third factory is in Khanewal, Punjab. The SITE and Khanewal factories once belonged to Brook Bond, while the West Wharf tea factory was inherited from Lipton when it was merged with Levers.
Efforts had been made to grow tea in Pakistan since 1950s, but the first major step was taken in 1982 by the government. The Pakistan Agricultural Research Center was set up near Manshera. In 1989, Levers also stepped in and a Tea Research Station was set up in Shinkiari, near Manshera. With Unilever providing the expertise, the Center aims to determine whether tea can be grown in the area. Lever also seeks to establish effective plant culture technology to help the government in its tea growing efforts. The company also intends to build a small black tea manufacturing factory near the site and will buy the harvested tea from the farmers. In June 1998, Lever signed an agreement with those farmers interested in growing tea.
SWOT Analysis of Lipton
Lever Brothers is a multinational company
Powerful heritage of Lipton as presence in the Pakistani market since 1948 Familiar with psychographics and demographics of the local consumers Strong brand image and brand awareness in Pakistan
Market leader as it has a 70% market share in branded tea. Larger sales force
Strong and long-term relationship with distributors, wholesalers and retailers. Sound and experienced management.
Excellent marketing department assisted by a highly regarded marketing research unit. R&D and financial support from parent Unilevers.
The Lever-Brooke Bond merger made it possible to compete more effectively with loose tea.
Loss of market share to Tapal in Karachi and Multan
Low market share in N.W.F.P.
Positioning of Lipton Yellow Label as a premium product to which consumers have weak emotional attachment
High rate of population growth
Tea was added to the smuggled goods list in March 1998 and import duty was reduced from 45 to 25 percent. This has collectively placed the entire organized tea business in a more favorable position. Market opportunity of Lipton Yellow Label in rural areas
Threat from cheaper tea smuggled into the country via border areas of NWFP and Baluchistan, seriously affecting Levers’ sales and earnings. Possible increase of Tapal and loose tea market shares
Rising inflation, which reduces disposable income of consumers. Increasing import duties since a lot of raw materials are imported would raise the price of its end products. Lipton’s profit margin is exposed to rupee devaluation.
Current Market Situation
Tea consumption remains unaffected by macro-environmental factors, as tea has inelastic demand. For example, the consumption of tea has not increased due to the ban on meals served at weddings. However, it must be noted that tea consumption falls in Ramadan.
The range of various tea brands in the market varies due to quality and taste. Both taste and marketing go together in determining the consumer choice. Once a buyer likes a particular taste, he becomes brand loyal to it,
no matter how expensive or cheap the brand is. Advertisements do influence consumers a great deal, when it comes to inducing trial of branded tea, or switching to another brand. The largest segments of consumers in the tea market are those who are shifting from un-branded to branded tea.
Tea is no longer a luxury in this country; it has become part of our meals. Although Pakistan still imports a large amount of tea from abroad, tea still remains the cheapest form of beverage in the country.
Competition in the tea industry is getting cutthroat. Loose tea, which is unbranded tea, has almost 40% of the total tea market in Pakistan. Lipton Yellow Label is the market leader in branded tea on pan Pakistan basis.
Levers have embarked upon aggressive plans to regain the volumes and margins of the tea business. The main brands, Lipton Yellow Label (in hermetically sealed cartons) and Supreme were re-launched and to regain there lost market share together with improved margins.
Lipton Yellow Label’s main competitor in branded tea is Tapal Daanedar, while in unbranded tea, loose tea provides competition. Tapal Daanedar is a very strong competitor because of several factors, The SWOT analysis is as follows: SWOT Analysis of Tapal Danedar
Positive Consumer perception
Advantage of being “Danedar”, (perception of being economical and easy to sieve) Strong brand loyalty
Frequent trade offers
Dedicated sales force
Quick delivery and removal of damaged goods.
Unattractive packaging (only soft packs)
Availability (only urban)
Technology (no international guidance)
Emergence of other “Danedar” Brands
Stiff competition from LBPL Brands
Rural Market penetration
Capitalize on brands
Entry in leaf segment
The sales of Lipton Yellow Label are monitored region wise. The table below shows the six regions and the sales in percentages of LIPTON YELLOW LABEL and its main competitor Tapal. The total sales of Rs. 8,750 million have been divided for LIPTON YELLOW LABEL into regions with the following percentages. And we have also given Tapal Daanedar’s sales break-up.
Lipton Yellow Label basically has two seasons, which is the summer and winter. The seasonal sales of both Lipton Yellow Label and Tapal are the same. 55% of the annual sales are derived in the winters, which is the peak season and 45% of the sales are derived in the summers. Where as sales of LIPTON YELLOW LABEL in Karachi remain more or less the same.
According to the Brand Manager, Lipton Yellow Label’s consumers have various attributes, among which are discerning, fun loving, outgoing, elegant, and have good taste.
The master brand vision key has eight distinct portions, these are: 1. Competitive Environment
Includes other hot drinks, soft drinks and branded water.
Young minded outward looking people. Focus on recruitment: those leaving home or entering the work force for the 1st time. 3. Insight
People want the image and excitement of the soft drink world in drinks that are good for them 4. Benefits
.Enjoying LYL together makes you feel great, revitalizing mind and body 5. Values and Personality
The brand is bright, vital, sociable, contemporary and cosmopolitan. 6. Reasons to Believe
The bright Lipton world, the revitalizing taste and that Lipton delivers the best natural goodness of tea. 7. Discriminator
The excitement of soft drinks and the natural goodness of tea. 8. Essence
Lipton People get more out of life.
Per capita consumption in Pakistan is 0.9 kg per person per annum. This translates into daily consumption of 2-4 cups per day. Per capita consumption of tea is highest in Karachi, followed by NWFP, although neither Lipton nor Tapal are strong in NWFP, as loose tea has captured 90% of the market. However, Punjab is the most profitable province on the basis of total tea consumption and it is highest in Lahore because of its population size. In other nations the per capita consumption is 2 kg.
There are two clear segments of consumers in the market, branded tea consumers and un-branded tea consumers. In Sind, most of the cities consume branded tea, while in the rural areas both branded and unbranded are equally popular. In Punjab, the city dwellers as well as majority of rural areas is absolutely brand loyal while unbranded tea is only popular among the teashops and hotels. In NWFP and Balochistan, 90% of the population still prefer the unbranded form as it gives them the chance of seeing and smelling 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.
Lipton’s consumers can be segmented on the basis of income strata. The income strata used by Levers have been developed by Levers’ own Marketing Research Department.
A class consists of consumers who have disposable monthly incomes of Rs. 12,000. B class consists of consumers who have disposable monthly incomes between Rs. 8,000 and Rs. 12,000. C class consists of consumers who have disposable monthly incomes between Rs. 6,500 and Rs. 8,000. Marketing Mix
Lipton Yellow Label is a fast moving consumer product that caters to the A 1, A 2, B and C socio-economic classes.
The tea industry of Pakistan is in the “Maturity” stage of the product life cycle, but Lipton Yellow Label is in the “Growth” stage, as it still has market potential in Pakistan.
Lipton Yellow Label’s main feature is that it is tea of the “finest blend” available. The benefits offered by Lipton Yellow Label to its consumers are “good quality and good taste” since it is an international brand. Brand image of Lipton is of a Discerning, Cosmopolitan, Elegant and Friendly person and this image is portrayed in all the advertising.
Tea usually loses colors and fragrance over time. Lipton Yellow Label has a normal shelf life of one year and the shelf off-take is one week.
Lipton Yellow Label is available in the following line extensions: Lipton Yellow Label, Finest Blend Tea
Lipton Yellow Label, Danedar tea
Lipton Yellow Label, tea bags
They are available in the following sizes and prices:
All these brands cater to consumers of different income levels. Lipton Yellow Label is targeted towards A, B and C income groups.
Re-launch of Lipton Yellow Label
During the recent re-launch of Lipton Yellow Labels several elements of the product were improved upon and a change in the image of the brand from a “premium” one to “subsistence” one, was brought about. The blend of the tea was made more superior. The sizes of the packets have also been reduced.
Since Lipton Yellow Label has always emphasized being an international product, of the highest quality, Lipton Yellow Label is marketed as a “premium” or “top of the line” product. A premium of 2-5% is charged on every pack.
The closest competitor of Lipton Yellow Label, which is Tapal Daanedar , has a price of Rs.49 for its 200 gms pack, whereas a 200 gms pack of Lipton Yellow Label is priced at Rs.50. Similarly, in all other sizes, Lipton Yellow Label has maintained almost identical price premiums compared to Tapal.
Lipton Yellow Label is facing a problem, in that the consumers generally perceive that the prices of Lipton Yellow Label products are very high, since it is a premium product, as compared to other competing products. Therefore, they feel Lipton Yellow Label is out of their reach. However, Lipton Yellow Label has a price premium of 4-5%, which translates into not more than Rs.1 per packet in absolute terms. Lipton Yellow Label, in spite of being a premium product has a competitive price, which is not being realized by the consumers.
Placement is one area where Lipton Yellow Label outperforms all its competitors in tea industry, because of its association with Levers, which is the biggest FMCG Company operating in Pakistan. Lipton Yellow Label has a wide distribution network consisting of more than 600 distributors catering to around 140,000 outlets across the country.
There are 140,000 outlets in Pakistan, which include superstores, department stores, general stores, medical stores, paan walas, grocery stores, merchants, etc. Grocery stores and merchants together provide 80% volume of Levers’ tea sales. Lipton has more than 600 distributors for tea. There are corporate distributors exclusively for Lipton and similarly exclusive Brooke Bond distributors.
Distributors are offered a margin of around 4-5% and retailers are offered a margin of around 10-12%. The distributor and retailer margins vary from one product size to another. But retailers get a margin of 25% on smuggled tea, which is brought in through the Afghan transit trade. Hence, retailers naturally prefer to stock and sell smuggled tea.
Lipton Yellow Label is using Asiatic Advertising agency currently, due to international alignment of Unilever. Previously the advertising agency used was R-Lintas. The promotion mix for Lipton Yellow Label comprises of around seven main activities. Different media are used in combination to increase effectiveness of promotion mix.
The promotion budget for these activities is calculated by the “percentage of sales method”. The promotion budget for the up-coming year is set in advance at the end of the current year. The budget is linked to a sales volume target. The budget is allocated according to various media and different promotion activities for every quarter. Sales volume is monitored primarily on a weekly basis to evaluate the result of promotional activities on sales volume. The budget might be reduced drastically, by as much as 10 to 40 % if it is observed that hypothetically 90 % of the budget has been spent, but only 70 % of the sales volume target has been met.
We have described the various promotional activities on the basis of budget allocation, in order of importance.
TV advertising for Lipton Yellow Label comprises of 55 % of the promotional budget. Television advertising is used mainly because its reach is higher than any other medium and hence, this acts as the most effective inducement to consumers to purchase the product according to the Brand Manager.
Lipton Yellow Label is advertised through out the year on television. On an average yearly basis, Lipton Yellow Label advertises from one to two spots per day on TV. During the peak season i.e. winter (October to March) the number of slots increase to, six to eight slots per day. This is also true for the first week of a typical four-week consumer promotion.
The duration of the advertisements is typically thirty seconds in the beginning of the advertising campaign. Then a shorter ten-second version of the same advertisement is aired on TV within a one-month period. The reasons for the change in the length of the advertisement are:
Target consumers have viewed the complete 30-second advertisement within the one-month period. The consumer promotion usually lasts for about a month only. The cost of the ten-second advertisement is comparatively less than the thirty-second advertisement.
Sometimes there are TV advertisements designed for different regions of Pakistan to achieve different advertising objectives in those geographic areas. For example, to achieve brand awareness in a new market segment or to advertise the launch of a consumer promotion, various advertisements would be aired keeping the target market in mind. In this regard, a 20-second advertisement will be aired on TV in Karachi and Hyderabad before the end of the year 1999 to advertise a new consumer promotion.
The current advertisement theme emphasizes uses Ali Hiader and Hadiqa Kiyani. It is believed that the campaign clearly matches the personality of the brand with that of the celebrities. Also, the vital modern and colorful images reflect the Lipton brand world at its best.
Adtrack monitors the Share of Voice for TV on a weekly basis for Lipton Yellow Label, according to time slots and the TV channels used. The result for Share of Voice for 1998 for Levers as a whole was 69% and 36% for Lipton Yellow Label specifically whereas, SOV for 1999 for Lever as a whole stands at 88%, and 46% for Lipton Yellow Label. In contrast, Tapal advertises on television only during the peak season between Octobers to March. For this reason, the brand awareness of Lipton Yellow Label and Tapal shows a gap which is in Lipton Yellow Label’ favor. This is also reflected in the SOV figures for Lipton Yellow Label and Tapal, as we assume that the research, which provided these figures, was conducted just before the peak season. Tapal’s SOV for 1998 stands at 31% and the SOV for 1999 stands at 12%.
Fifteen percent of Lipton Yellow Label promotion budget is spent on outdoor advertising. Outdoors are now being used more by Lipton Yellow Label for to increase out of home visibility in shops and in the streets. The various activities under the umbrella of outdoor advertising are:
Yellow Label has about 200 hoardings all over the country, and seven spectaculars, one in Rawalpindi, and six in Karachi. These spectaculars are located in Karachi at:
Airport Area (90 feet x 30 feet)
Nipa Chowrangi (60 feet x 20 feet)
Guru Mander (60 feet x 20 feet)
Sabzi Mandi (60 feet x 20 feet)
Water Pump (60 feet x 20 feet)
Clifton (60 feet x 20 feet)
The rentals for these spectaculars vary. Although they differ among various cities, the costs incurred are inclusive of KMC taxes, maintenance, erection charges, etc. On an average, a 90 x 30-ft spectacular costs the company an approximate sum of Rs. 2 to 3 million annually, whereas a 60 x 20ft spectacular costs about Rs. 1 million per year. The average rental for hoardings on national basis is about Rs. 50,000 to Rs. 60,000, for a 20 x 10-ft hoarding. The charges per square footage are dependent on site rental, structure and what the content of the hoarding is.
Ten percent of the promotion budget is spent on print media, which includes both newspapers and magazines. All types of local newspapers are used for various advertisements, depending on the purpose of the advertisement campaign. Similarly, different types of magazines are used for advertising.
Point of Sale materials
Five percent of the promotion budget is allocated to POS materials. The point of sale material is used primarily for launches or re-launches, and there are at least 10 rounds of every promotional campaign for Lipton Yellow Label.
The company policy is to run certain promotions in a few territories only, to achieve different marketing objectives. This would mean that some of the promotions are restricted to one region, Karachi, while others are
restricted to Lahore.
For instance, the introduction of newer and smaller packs of Yellow Label was only meant for Karachi, whereas the provision of the free sachets of Surf Excel with every pack of Yellow Label was designed for Lahore. Thus, the material designed for point of sale for each promotion is different.
Five percent of the promotion budget is allocated to radio. The purpose of advertising on radio is to reach the rural population. Hence, Radio Pakistan is the most favored choice for advertising Lipton Yellow Label.
Discounted Selling and Free Samples
To familiarize consumers with the new blend of Lipton Yellow Label, five percent of the promotion budget is spent on discounted selling and free samples. In the words of the Brand Manager, it is used only if very confident that the promotion will be successful. It is used on a house-to-house basis in certain neighborhoods.
Lipton Yellow Label is aware of the impact of good packaging in creating instant consumer recognition of the brand or product. Thus, Lipton Yellow Label’s distinctive yellow packaging makes the product stand out from its competition on store shelves. The primary container is the hermetically sealed pack, which offers the following benefits:
It helps to keep the product safe from temperature changes and moisture, and thus, helps to maintain the product’s shelf life of one year. The sealed packing also helps in preserving the unique and superior taste of Lipton Yellow Label. This feature also helps preserve the taste for a longer period of time, during the usage of the product.
The secondary container, which is the more important aspect of packaging, is distinctive yellow in color, with the Lipton label boldly emblazoned on all faces of the box. In this severe competitive environment, packaging has to perform many sales tasks – right from attracting attention to the product, to describing the product and making the sale.
In the case of Lipton Yellow Label, the name of the product is also mentioned, along with the claim “International Quality No. 1”. The product weight is mentioned and on both the sides, there are directions for preserving the freshness of the product inside. On the top left hand corner,
there is also a mention of the “newer and richer product”. However, there is no mention of the “best before” or expiry date anywhere on the pack.
Two major changes have been introduced in the packaging of Lipton Yellow Label recently. The package size has been downgraded from 250 grams to 200 grams, and the 125 gram pack has been downgraded to 100 grams. The prices have also been correspondingly reduced. This is so because it caters to people with all sorts of income groups. Therefore, consumers with low levels of disposable income will find it cheaper to purchase a smaller packet, which now also costs less.
History Of Lipton Yellow Label Television Advertising Themes A brief history of the advertising of Lipton Yellow Label since the merger with Lever Brothers Pakistan is given as follows.
1985: The purpose of the advertisement was to induce trial of Lipton Yellow Label. The advertisement showed different nationalities of different Lipton Yellow Label consumers to depict the international nature of the product. The tag line for advertisement was “aazmaiey, aap bhi maan jain gay.”
1986: The theme continued with the purpose of attracting new consumers. Taste and satisfaction were the two key words used in the advertisements with the added emphasis on Lipton Yellow Label being an international brand of high quality. The tag line “aazmaiey, yaqeenan aap bhi maan jain gay.”
1987: Quality number one was the slogan used, along with mention of taste and aroma being the best. The tag line was “ quality number one chai.”
1988: Celebrity marketing concept was used with yesteryear film actress, Nayyer Sultana. Emphasis was on brand loyalty to Lipton Yellow Label due to consistency of quality standards and emotional attachment to Lipton Yellow Label. Emotional memories of good times were associated with Lipton Yellow Label for the first time. There was a shift in advertising theme from convincing consumers of quality, to emphasis on maintenance of quality standards. The tag line was “ hamesha wohi zayka, acchi yaadon key tarha.”
1989: The shift in the advertising theme i.e. that Lipton Yellow Label has maintained its quality standards over time, which is why consumers prefer it was continued with the same celebrity. The tag line was “ Lipton Yellow Label.“
1990: Nayyer Sultana appeared for the third time in the Lipton Yellow Label advertisement. The theme this time was that Lipton Yellow Label is not just for the celebrity but for everyone. The tag line this time was “Lipton key Yellow Label.”
1991-92: The celebrity-marketing concept was continued, but this time with Nazia Hassan and Zohaib Hassan. The choice for much younger celebrities was to appeal to the new generation of consumers. A total of three ads were made with the same celebrities in the same time period.Tag line was “ sab say acchi hai.”
1993-94: For the first time the functional benefit was promoted as, double chamber tea bags were launched. The design of the tea bag was advertised to convey the message of more taste and flavor from a single tea bag. The tag line was “ Simply the best.”
1995-97: A new first was that the advertisement was both in Urdu and English languages once again, the international consumption of Lipton Yellow Label from all walks of life was depicted. The tag line was “ Sign of good taste.” The same tag is still in use since then.
Lipton Yellow Label launched boil-o-bag, which conveyed convenience of use. A 300g plastic jar for introducing was introduced for the benefit of consumers as it had better packing than ordinary jars and would maintain the freshness of tea.
1998-99: The first advertisement focused on packaging of Lipton Yellow Label, specifically the improved seal of Lipton Yellow Label tea packets that results in better quality, taste and smell and therefore, more
Joint promotion was advertised on regional basis, example; with Surf Excel, click and everyday. An advertisement comparing the attributes of Lipton Yellow Label and other teas showed that consumers overwhelmingly preferred Lipton Yellow Label because of its taste. Another joint promotion of Lipton Yellow Label and Brooke Bond Supreme was advertised to convey the reduction in packet sizes, which represented lower prices for consumers.
Problem Faced By Lipton Yellow Label Looking at the past history of Lipton Yellow Label and the current situation at hand, we believe that Lipton Yellow Label is loosing its market to competition. Thus the problem faced by Lipton Yellow Label for decline in sales especially in Karachi and Multan regions are: The image of Lipton Yellow Label in the eyes of the consumers is that it is too premium a brand for them thus the result being that the consumers can’t associate themselves with it. The main competition of Lipton Yellow Label is Tapal Daanedar.
Tapal is a domestically based tea company and is gaining market share at the expense of Lipton Yellow Label in Karachi and Multan with sales being five times higher than Lipton Yellow Label in Karachi. Lipton Yellow Label has tried to penetrate the market of NWFP, but it has failed to do so as the locals prefer loose tea to branded tea. Although Lipton Yellow Label is advertising heavily, they are not able to generate the end-user demand. Tea advertising presently done by Lipton Yellow Label is not coming out as aggressively as it should considering the fact that Lipton Yellow Label is the market leader in branded tea market.