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Transcript of Deseratation Analysis Sug
ANALYSIS
TOPIC;
EVALUATION OF MARKETING STRATEGY OF TETELEY TEA IN UK BUSNESS TO CONSUMER MARKET
AimInvestigate the reason behind sustainable performance of Tetley in processing and implementing marketing strategies, in UK B to C market.
Objectives To investigate the marketing strategies which enables tetely to
deliver sutsuniable performance? To make a detailed evaluation on “How Tetley processing their
marketing strategies?” To explore” How Tetley implements their marketing
strategies?” To analyse “how Tetley controls and coordinates their
marketing strategies?” To make a description about the barrier Tetley face while
implementing marketing strategies?
Findings
Marketing strategy of Tetley
Marketing strategy is critically important for all firms to win their battle in the market
place .According to the Manager A, Tetley makes marketing strategies for achieving
objectives of the company .Tetley implements long term as well as short term marketing
strategies based on situation and core business strategies objectives of the company. The basic
core business strategy of Tetley is sustainability and increasing the market share in the UK
market. Tetley updates their marketing strategy time to time according to the dynamic
business environment. The main reason behind this in the current business environment is the
peak competition and changing consumer behaviour. The main objective of the company in
making short term marketing strategy is to beat the competitors, gaining the market share and
for increasing the sales for a particular segment as well as whole segment. Likewise Tetley
implements their long term strategy for creating value to their brand in UK market. According
to Sara Hulse (2008) etl, “Firms doing for achieving the organisational objective that includes
achieving the marketing share and expanding market.”
Tetley is developing the marketing strategy on the basis of identifying the internal and
external environment. This can be analyzed effectively through some business analytical tools
like SWOT, PEST and Michel porter five force analysis of the company .According to the
Colin Gilligan and Richard M.S. Wilson (2009) the evaluation of external and internal
environment is important for making a successful marketing strategy. In this analysis each
tool is analysed separately on the basis of information that I have collected from both primary
and secondary data sources.
SWOT ANALISIS
The term SWOT indicates Strength, Weakness, Opportunities and Threats. The management
normally uses this tool to identify internal and external environment. The strength and
Weakness will analyse the internal environment and opportunities and threats will analyse
external environment. By doing this, company can enhance the internal strength and it will
help the company to reduce the weakness. This enables the company to tap the business
opportunities.
SWOT ANALSIS
(Source, page number 119, marketing strategy 2008, O.C. Ferrell, Michael D. Hartline)
The following is the swot analysis of Tetley in UK market.
Strength
Strength of the company can play a key role in achieving business objectives and
goals .Strength help the company to beat the competitors in the market place and also to
identify their potential areas. Potential strength companies can be vary through different
factors, for example some companies strength can be production capacity, or it can be brand
name etc .Strengths have to match with the opportunity to tap the market. The following
section indicates some of the strengths Tetley have,
Tetley has there own 56 plantations around the world.
Tetley has a tea business history of more than 100 years in the UK market.
Financially strong because it is owned by TATA group.
Brand name and brand logo is a key strength and key asset for the company in the UK
market.
Strong distribution channel in the UK market, for example Tesco, Sainsbury, Asda
etc.
`Weakness
For every coin there are two sides, so here as well the Tetley have some weakness.
Health related issues
People have a perception that Tetley pays low wages for the tea workers in Tetley’s
Asian tea plants.
By identifying above, Tetley can overcome the weakness, for instance I have pointed that the
perception of public regarding paying low wages to the employees in the Tetley tea plant, the
weakness has now identified by the company and they have started mission for overcome this
through their modern strategies. For that Tetley have recently joined in ethical tea partnership
which mainly focus on the welfare of workers in tea plant at different nations.
Opportunities
A good marketing is an art of identifying, developing and exploring opportunities. Tetley’s
marketing opportunities are based on the needs, interest and drinking behaviour of the
consumers. These opportunities had made the success of company in the UK market. The
main market opportunities of the Tetley are follows;
More than 150 million cups of tea drunk in UK per day, it will increase the need of
tea in market creates great opportunity in establishing their products.
Increase in the population of UK for example increase in migration of people from
highly tea consuming countries like china, India and other Asian countries.
Introduction of advanced technology to tea production have the potential to increase
the production capacity and profitability.
These opportunities have the potential for generating higher sales which enforces the
company to meet the Financial Rate of Return and profit of the company. With the
introduction of modern technology company could reduce the cost of production and
wastage of resources. This will lead the company to meet the growing demand in UK
market in a cost effective way. The low cost production can help the Tetley to do a
competitive pricing in the current highly competitive UK market.
Threats
The UK tea market is highly competitive and relatively elastic
Strong competition from local retail store brands like Tesco and Sainsbury tea brands
Regulation of government and from other bodies like Advertising Standard Authority
(ASA)
Tea is considered as a traditional drink in UK market with the perception of an old
fashioned and less functional than other substitute’s product.
Competitive pricing in the UK market.
PEST ANALYSIS OF TETLEY UK
Picture of PEST analysis
Economical factors
Some environmental factors that affect the company for instance, increasing unemployment
level in the economy it will lead to decrease income and their by reduces the purchase
activities. In addition to this there are some other factors like Changes in customs duty,
inflation and budget etc.
Social factor
Changing behaviour in people for example people in UK are more concerned about health
related issues.
Decreasing income of the people will reduce the conception of tea in the market, this will also
affects the business expanding strategies.
Legal factor
Legal factor plays an important role in UK business environment. Some legal factors like
minimum wages, working hours, maintaining standard and regulations in advertising in UK
market (ASA), health and safety etc are important for the Tetley to run the business in the UK
market.
Environmental Factors
Environmental issues have some key influences in delivering eco friendly product packaging,
and protection of the tea plantation owned by the Tetley. Because of these issues Tetley make
sure that the life of workers in tea plant is safe, comfortable. Tetley is a member of
international ethical tea partnership.
ANALISIS OF PORTERS FIVE FORCES
(Source from competitive strategy techniques for analysing industries and competitor by
Michael .E. Porter 1998)
The marketers make use of Porters five forces to determine the intrinsic long attractiveness of
market or market segment. Five forces include industry competitors, potential entrance, threat
BARGAININGPOWER OFSUPPLIERS
THREAT OF
SUBSTITUTEPRODUCTS
BARGAININGPOWER OF
BUYERS
THREAT OF
NEWENTRANTS
COMPETITIVE RIVALRY
of substitutes, buyers barging power, suppliers bargaining power. This analysis is useful for
firms to develop an effective marketing strategy and also gives an insight about the market.
With the collected information and five forces model I have analysed the industrial
environment of Tetley, that are follows;
Threat of industry segment rivalry
Tetley have a number of strong and aggressive competitors in the UK market. For
example, Tetley is facing strong competition from the companies like twinnings, PG
tips, Yorkshire tea and other local retail tea brands in all segments. These market
conditions in UK will lead to a continuous price war and promotional battles. So by
doing this analysis Tetley can identifies their competitors in every segment in UK
market. And it helped them to develop an effective marketing strategy to beat the
competitors in the market and for gaining the market share.
Threats of new entrance
The chance of new entrance in UK tea market is comparatively high because of the
liberalisation in UK trade laws and increasing demand. Despite of this other
international brands will not entre suddenly to UK market because of the higher
competition in Current market. Companies like Tetley, twinnings, and PG tips plays
important role in the market due to their high presence. These factors will have the
potential to pull back other companies for entering UK market. Company can reduce
the threat of new entrance to UK market by cultivating an emotional attachment
towards Tetley brand in the mind of consumers by delivering value and through
effective communication. Emotional attachments towards the brand can create a
monopoly in UK market. It has proved by other companies in other soft drinks
markets for example coca cola in UK. And it is crucial to Tetley for identifying the
chance of new entrance to the market for making good marketing strategy.
Threats of buyers growing buying power
Buyers have high bargaining power in tea industry because of the large number of tea
manufacturing companies in UK market. Since the switching cost is negligible consumers
have great hand in updating their brand with varying demands and needs. Even though the
demand is high in UK market the companies are fighting to capture market share by the
implementation of new polices and strategies to attract the consumers.
Threat of substitute product
Tea is a refreshing hot drink, so the substitute product is coffee already exists in UK market
and demand for the coffee is increasing with tea. Because of this threat and influences of
these substitute products are high in changing the drinking behaviour in the consumer.
Bargaining power of suppliers
In the production of tea in Tetley, the bargaining powers of suppliers are less when compared
to other competitors. The main reason behind this fact is the availability of get raw material
directly from Tetley‘s tea estate. But in the product distribution side suppliers for Tetley are
retailers and they have more bargaining power. This is because, in UK market Tetley’s total
business is depending up on their main suppliers like Tesco, Sainsbury, Asda etc. The
company can defence this situation by building strong and good relationship.
MARKETING STRATEGY PROCESSING
Tetley process the marketing strategy after clear identification of their objectives. The
marketing objectives are changing according to the market situation and environmental
influences .Tetley process the marketing strategy through segmenting, targeting and
positioning. According to arguments of Chris Phillips, Isobel Doole, Robin Lowe (1994)
the companies are using different ways for developing marketing strategy but the
common approach for processing the marketing strategy is done through segmenting,
targeting and positioning.
(Picture of marketing strategy processing)
Market Segmentation
Without proper segmentation of the market company cannot satisfy the needs and
demands of all customers. So it is important to divide the market into a group of
customers or segments with distinct needs and wants. The firm have to choose and
identify the segments in the market for serving effectively. For developing the best
marketing strategy the marketers has to understand what makes each segment unique
and different. In UK business to consumers market Tetley has segmented consumers
on the basis of demographic, behaviour and benefits related. Tetely has also done the
niche market segmentation to ensure consumer satisfaction in all levels.
According to David J Rachman (1974) the company can segment the market on the
basis of behavioural demographic. Kotler ( 2009) state that the consumer market can
be segmented on the basis of benefits and there are some levels of market
segmentation that mainly consist niche marketing. Each segment has analysed
separately with primary and secondary data that are follows;
MARKETING STRATEGY
PROCESSING
SEGMENTING TARGETING POSITIONING
(Diagram of Tetley market segmentation)
Demographic segmentation
In demographic segmentation Tetley has segmented UK business to consumer market
on the basis of age, the family size and income of the people. For example, one of the
age segmentation of Tetley has kids tea segment serves to age range of 7 to 16 old.
This demographic segmentation will help to satisfy the needs and wants of the
customers.
UK tea market consists of different age group with different taste and attitude towards
tea, for instance the age between 7 to 14 they prefer more flavoured tea rather than
going into normal tea and Herbal teas. On the other hand the age groups like 35 to 70
they prefer more health benefits from tea like green tea camomile tea etc. So this kind
of demographic segmentation helps Tetley to serve better to each age group according
to their tastes. And through this segmentation company could satisfy the needs of
different age groups. The demographic segmentation has played a major role in
BENIFITSSEGMENTATION
DEMOGRAPHIC SEGMENTATION
BEHAVIOURSEGMENTATION
TETLEY MARKET
SEGMENTATION
Tetley’s success especially in kids tea market is segmented on the basis of age which
enabled company to capture sustained market share in the specified age range.
Behaviour
Tetley has segmented the consumers on the basis of behaviour. For example some
people buy the tea in large quantity because they don’t do the purchase every day and
every week but on the other hand some customers they do frequent purchase. This
forced company to segment their market on the basis of purchasing behaviour of the
customers. According to the Behavioural Segmentation company has designed the
product packing strategies to satisfy the customers. In the survey questionnaire I have
given the question like how often do you purchase tea and I have given three options
for the opinion. Every week, every month and every three month are the options i
have given to the respective question. In the survey i got 97 replays out of 120 as
“they buy the tea every month “. The percentage of the replied answers is illustrated
with the help of a diagram.
(Diagram is illustrating the opinion of tea consumers in survey about purchase of tea)
From the survey and interview this research has identified that Tetley utilizes
behavioural segmentation because the tea consumers have different purchase
behaviour. Behavioural segmentation helped Tetley specially to design their products
for different consumers having various purchase behaviour. For instance Tetley
introduced 80 tea bag packet aimed for frequent buyers and 240 tea bag packet for
non frequent purchase customers. This product design has the capability to satisfy
customers who has different purchase behaviour and it will create a emotional
attachment to the brand.
Benefits
Tetley also segments their market in the basis of benefits. People in UK are more
concerned about their health so wide group of tea consumers are looking for the
benefits of drinking tea. Segmentation on the basis of benefits is really important to
the fast moving consumer goods industry to maintain a sustainable performance in the
market. This kind of segmentation helped Tetley to develop health benefits products
like green and earl gray tea. These products have the potential to satisfy consumers
who gives more preference on benefits in drinking tea. By adding this segment to the
existing segment there is a higher chance of increasing market share and sales.
Niche market
Niche marketing segmentation is an unavoidable factor in the tea business industry
due to the wide Varity in the consumption of tea according the personal behaviour
attitude. For example some people prefer decaf tea while some others love it. To
cover these variations and satisfy the needs of all customers in the segmented market
company have to follow niche segmentation.
TARGETING
Once the firm has identified market segment opportunities the company has to decide
how many and which ones to target. Tetley have different tea product in the market
and each product have different target market. Tetley kid’s tea is targeting kids market
and Tetley decaffeinated tea is mainly targeted on people who have problems to have
caffeine. For example Tetley decaffeinated tea is mainly targeted on pregnancy
women’s since they have to reduce the caffeine intake from their daily drink to avoid
chances of miscarriage and lower birth weight of baby. The Tetley, breakfast tea, earl
gray tea, peppermint tea, is targeting whole UK market.
Consumers In the tea market have different taste and preference. Each tea product is
offering different benefits and flavours, so the targeting helps company to concentrate
on a single segment with a particular product to satisfy their needs. Targeting is only
successful when the product features or benefits match with customers wants. Tetley
have different products in the market. Since they are doing mass targeting for all tea it
is difficult for them to manage different taste and preference of the consumers. This
research has identified targeting the customer is vital for satisfying the customers in
the tea market. The right targeting can deliver high potential to generate the sales and
profitability. The identification of right target market is one of the main reasons
behind marketing success of Tetley.
Picture of single segment concentration
The above picture shows the target market of the Tetley kids tea, Tetley is focusing on
only one segment rather than whole market this help the company to satisfy the needs
of the consumers in this segment.
(Picture of mass marketing)
The above picture is shows the mass targeting of Tetley tea this mass targeting which
help to increase the market share and overall sales of the product
POSITIONING
Positioning is an act of designing company offering and image to occupy a distinctive
place in the minds of target market. The main aim is to develop a brand identity
among customers to maximise the competitive benefits in the firm. If company is
positioned the product incorrectly the market will be confused. According to manager
A of Tetley tea, they have positioned their brand in medium segment in terms of
quality and price. Pride and Ferrell (2010) says that Product positioning is an activity
mainly concentrates on creating and maintaining a several concept about the product
in the target market and in the customers mind.
For proving this Tetley statement about their product positioning I have done the a
survey with 120 customers of the Tetley and I have divided this 120 customers into
three groups like high income people ,medium level income and lower level income
people, and each group consist 40 customers. The survey includes question like,
how do you rate the Tetley product quality and how do you rate the price of Tetley
products. For both of these questions i have given three options for their answers like
medium, higher, low. Answers from the three groups have similarities and differences
when considering one group to other. In the case of high level income customers 30
has replayed out of 40 people .The 33 medium income customers has replayed out of
40 and the survey got 34 replay out of 40 from lower level income customers . The
most of the answers from the different groups are pointing that Tetley is a medium
quality brand and price of the tea is also medium.
(Graph is drawn based on the survey response)
Perceptual Map
(Source page number 282, contemporary marketing by David L. Kurtz, H.F.
Mackenzie, Kim Snow)
▄ local retail tea products ▄ PG tips
▄ Tetley tea ▄ Jing tea
The above perceptual map showing most common opinion about various tea brand in
UK market Blue colour represent Tetley tea. Most of the customers in the survey
answered that it is a medium brand in the terms of quality and brand. The consumer
perception about tea depends up on the value of products. Tetley has done a
successful positioning of products because they want to position their product in
middle segment in which customers have the same perception about Tetley tea. If
customers have a different perception about the product rather than medium quality
and price, it means the firm has made an ineffective communication. This research
find out Tetley tea had made a strong positioning with out any confusion in the
market and this had made a success in Tetley’s positioning strategy.
MARKETING STRATEGY IMPLIMENTATION
According to manager A of Tetley, company is implementing the marketing strategy through
marketing mix which includes price, product, promotion and place (distribution). The
implementation is practically done with market and to the customers. The right way of
implementing marketing strategy is crucial to the Tetley because if some thing goes wrong in
these four elements it will directly affect company’s sales and its brand name. In UK market,
Tetley has implemented the marketing mix perfectly without making any confusion in the
market. This perfect implementation of marketing mix helps the company to become a market
leader in the tea market. O.C. Ferrell, Michael D. Hartline (2008) point outs that the
firm implement marketing strategy by doing marketing mix which mainly focuses on
product, price, distribution promotion. In this chapter each element of marketing mix
has analysed separately that are following.
Marketing mix of Tetley
PRODUCT STRATEGY
PRICE
PLACE PROMOTION
PRODUCT
Tetley manager A said that product is one of the key element of implementing
Tetley’s marketing strategy and with out this product the company cannot achieve the
objectives. Product delivers value in the name of company and it satisfies consumers’
needs and wants in addition to the development of a better brand identity The
company have product depth in UK market it includes Tetley Assam, African, Ceylon
tea, earl gray tea, Tetley red bush tea , Tetley decaf ,Tetley extra strong, Tetley
peppermint tea, Tetley tea for soya and Tetley kids tea. Different varieties of Tetley
tea are focusing different segment and some of the Tetley is targeting the whole
segment in the UK market.
Product development strategy
The manager A of Tetley said that the new product development is critical in framing
strategies for Tetley. Tetley normally plans the product development by introducing
new product to the market and through acquisitions, for instance Tetley has recently
developed kids’ tea and tea for soya to the UK market. In spite of this Tetley has
acquired Good Earth, these both are the part of Tetley product development. By
adding theses new developed products to existing product will increase sales and
market share in UK market. The most difficult and riskiest part in marketing is
developing a new product and firms introduce these developments of new products
through innovations, product improvement and acquisition of new companies. David
J Rachman (1974)
Tetley marketing research for developing new product is done mainly through online
internal employees and through field research. These researches are mainly
outsourced to other research companies. The Market research includes experimental
methods like delivering sample tea packets to the consumers free to collect feedback.
To make this process effective Tetley produces sample tea bags and give to the public
and employees to bring up the feedback from people about the samples which help
them to identify the likes and dislike of customer. Company is looking into the
product life cycle and sales analysis to frame out product developing strategy. Tetley
tea product life cycle and sales analysis is illustrated with the help of following
diagrams
Product life cycle of Tetley tea
Tetley Tea Product Maturity Launch Growth stage of product Sales
Time
The firms make use of product life cycle for analysing the life time of a particular
product in the market. Tetley tea PLC is also help full for looking the product growth
and maturity. Tetley tea have a infinity life because which we can easily identify from
Tetley’s tea business from last 100 years of history of tea business. Tetley sells the
same product from the beginning of the company that is illustrated in above diagram.
Sales Analysis
Picture 1
One time purchased product
Sales
Time
Picture 2
Infrequently purchased product
Sales replacement sales
Time
Picture 3
Frequently purchased product Sales repeat purchase sale
Time
The above three picture represents the sales analysis of Tetley. Marketers use the sales
analysis at the time of new product development for identifying sales of new product.
For Tetley, the forecasting of sales is critical because it enables them to frame solid
future strategies which can satisfy the growing needs of the customers. The sales
illustrated in picture 3 consumers are doing repeat purchase. In survey most of the
customers answered that they do the repeat purchase of the tea so it is important to
analyse sales as wells as product growth time in the market.
For proving manager A statement about their product strategy this research has
conducted questionnaire survey with 120 tea customers. This 120 tea customers is
classified into three groups A,B,C .The group A represent high level income tea
consumers, group B represent middle level income tea consumers and C group
includes lower level income consumers .For all group of survey questions , answer
points like Tetley is delivering value and satisfying consumer needs.
For this question i have given yes or no options for their replay. Most of the
customers from different groups are agreeing that Tetley tea is delivering value and
satisfying the needs. Another question like” what is your motive for buying Tetley tea
“and i have given multiple choice options. In this most of the customers are agreeing
that quality is one of the main factors for buying Tetley tea. This response is
illustrated with the help of following graph.
In the current business environment consumers are more concerned about value of
product rather than other things. It is important to the tea companies to deliver value
for managing the customers. The product communicates to the consumers about the
brand in terms of quality and it will determine the position of the brand in the
consumers mind. Product management strategy of the Tetley had made a success in
the UK market that is proved in the survey that most of the tea consumers are
agreeing that Tetley tea is delivering value and this product management has
increased the brand value of the Tetley tea. The UK tea market is more competitive
than other market so the companies are fighting to become a market leader.
In UK market the companies need to be more innovative and want to focus on new
product development. The firm want to develop valuable products rather than just
normal product. And this new product development strategy has proved success in the
market many times for many companies. For example apple I phone and Tetley kid’s
tea. And adding new product to the company will generate the revenue and market
share. So the product development and product management is important to Tetley to
this new product development strategy helped them to achieve sustained performance
in market.
PRICING STRATEGY
According to the manager A, pricing of the Tetley tea is crucial to maintain company
performance. Tetley is currently utilizing the mixed approach in the UK market.
These approaches include looking the overall cost of production and direct
competitors price. In other international market it various depending up on the market
situation. In the overall cost the Tetley will take account of labour cost, transportation,
marketing cost and the international market price of the tea. The continuous
fluctuations of tea price in the global market will not affect Tetley because the
company is getting the tea from their own plant. The company is spending a lot of
money for promoting their brand which is main cost factor for the Tetley facing in
their pricing strategy. For example in 2010 company has spend 8 million pounds for
advertising their tea products. The main internal factor that Tetley is considering
while implementing the pricing strategy is the promotion of brand. On the other hand
company compares the competitor’s price in the UK market. Tetley looks into the
pricing of PG Tips and Twinning’s . These companies are the direct competitor of the
Tetley in UK market. Information given by the managers are supporting with V
Kasturi Rangan, Benson P. Rhapiro, Rowland T. Moriarthy, J R (1995). Statements
they argued is that, the companies will consider the internal cost of production and
competitor prices for pricing strategies.
Depends on the market situation Tetley is adopting different marketing strategies for
various segment in market. For instance, the UK market Tetley has positioned the
price of Tetley Assam, Darjeeling and decaf tea just above of their direct
Competitor price: It is a premium pricing strategy while comparing to other
competitors. Since Tetley have products have 33 % of market share in UK and sales
of these segment brought Tetley to become the market leader in UK. But on the other
hand Tetley is doing market penetration strategy for herbal tea because currently this
herbal tea has only 10 % of market share in the UK. Tetley want to increase the
market share so they positioned herbal tea in a low price for attacking the head of
their direct competitors.
Attacking pricing strategy of Tetley herbal tea
The above picture shows the attracting pricing strategy of Tetley herbal tea to the head of
direct competitors like PG tips and twinning’s for increasing the sale in UK market
PRICE LIST OF VARIOUS TEA BRAND IN UK
PRODUCTS PRICE OFTETLEY TEA UK
PRICE OF PG TIPS UK
PRICE OF TWINGINGS UK
1NORMAL TEA(ASSAM, DARJILING) 91.6 PENCE
(100 GRAM )
87 PENCE(100 GRAM )
79.9 PENCE (100 GRAM )
2DECAF TEA 81 PENCE
(100 GRAM )60 PENCE(100 GRAM )
13.6 PENCE(100 GRAM )
3 EXTRA STRONG 45.2 PENCE(100 GRAM )
80 PENCE(100 GRAM )
82 PENCE(100 GRAM )
4 GREEN TEA 1.50 PENCE(100 GRAM )
2.31 PENCE(100 GRAM )
1.88 PENCE(100 GRAM )
The above box shows the price of the Tetley tea in the UK market and their direct
competitor’s price. This is done for clarifying the manager statement about their various
pricing strategy for different product .Competitor pricing is collected from different retail
store. if we compare the price of Tetley Assam tea as per the above information with
competitors Assam tea price ,Tetley positioned their price just above the others in market.
But in the case of Tetley herbal tea they have positioned the price lower than their
competitor. The theory strongly supports that Tetley pricing strategy is well organised and
enables Tetley to became a market leader.
In the survey i have given one question about evaluating pricing of Tetley .The question was
“how do you rate the Tetley product price?”, and for answer i have given three options like
low, medium, high. The survey has conducted with 120 people and 97 have replayed and
most of the answers pointed that Tetley’s pricing is medium. The answers from the three
groups are illustrated with the help of a graph that is follows;
(Graph is illustrating consumers’ answers in survey about pricing of Tetley tea)
This research found that about pricing, people have different perception. One of the main
reasons for this common answer “medium pricing” can be the comparison of price with other
brands in the market.
Pricing of the tea products is critical to the companies in the UK market because these pricing
strategies have the potential to increase sales as well as reducing the sales in some occasions.
Once the brand has a strong presence in the market then the company can increase price, it
has proved in the UK market for example SONY computers. Tetley is maintaining the price
of Assam, Darjeeling, tea just above of the competitors because Tetley is the market leader
with 33 percentage of market share in UK market. They don’t need to cut down the price. If
they cut down the price there is a chance of misunderstanding about quality. So these pricing
strategies have the power to maintain brand image. But on the other side in the UK market
Tetley herbal have only 10 percentage market share. They are implementing price penetration
strategies to get maximum potential to increase the sales and also to have capacity bring the
customers from the competitors. So this pricing has made a major role in making Tetley the
market leader.
PROMOTIONAL STRATEGY
According to manager A, promotion is one of the key strategies for Tetley tea. Tetley has
spent 14 million pounds’ in 2010 for promoting their products. Tetley implement
promotional strategy through a promotional mix and it consists of advertising , public
relation, sales promotion ,and direct marketing. Tetley is making use various modes of
channels like online , TV, news paper ,bill board and store . This effective promotion
strategy helped Tetley to gain market share from PG tips. This strategic promotion activity
has increased Tetley market share to 33.8 % while comparing the PG tips 32.1% and
twinning’s 26.6% in the UK market. Tetley do promotional strategy to push the product in
market and to communicate with market about how to make a perfect cuppa and its benefits.
According to David .J. Rachman (1974), state that the firms do the promotion for
communicating to the public about their product and company. Implementation of
promotional strategy through advertising, personal selling, sales promotion direct marketing,
store display and through public relations.
Communication mix of Tetley UK
Picture of communication mix
COMMUNICATIONMIX OF TETLEY
ADVERTISING SALES
PROMOTION DIRECT
MARKETINGPUBLIC
RELATION
Advertising
Manager A point out that Tetley is doing advertisements by using different modes like TV,
online, news paper, billboard, etc .The company has spend 9 million for advertisements .
Tetley has outsourced the advertising creation task to Dare which is a famous advertising
agency in UK. Internet is key advertising tool of Tetley, for example Tetley tea folks are
popular in face book, and in YouTube.
Sales promotion
The manager A of Tetley says that, they do the sales promotion to boost business capabilities;
which is a short term strategy for the Tetley. Currently Tetley is doing various sales
promotion like 2 for 1 tickets to Alton towers, chance for win a holiday to different
designations ,win a T shirt ,and Tetley discount coupons . In 2010 Tetley has introduced
coupons worth 3 million for targeting 8million customers and for pushing the herbal teas in
UK market.
Direct marketing
Manager A stressed that Tetley is doing direct marketing using internet as a part of direct
marketing. Tetley send promotions direct to the customers via e mail.
Public relation
Manager A said that public relation is very important to the Tetley tea because now a day’s
people are more concerned about health and social responsibility. Tetley is promoting healthy
life style and the benefits of taking a cup of tea .Tetley joined with British heart foundation
for targeting 1.6 million people to raise fund for helping heart week people and they have a
rain forest alliance to protect environment.
The graph shows communication cost Tetley UK in 2010
For evaluating the effectiveness of promotional strategy i have given some question about
promotions of Tetley in the questionnaire. From that most of the customers have received and
seen the Tetley’s promotions along with this, 55 percent of the consumers answered that
Tetley’s promotion motivates the consumer to buy their products.
(This diagram shows opinion of the tea consumers about Tetley tea)
The above diagram shows 55 percentages of the consumers are motivated by the Tetley
promotion to buy their products from this we can infer that Tetley’s promotional mix strategy
is going well in the market and it also indicates that half of the business is generated through
promotion. By doing this effective promotional mix the firms can increase market share and
they can cultivate an emotional attachment towards the brand. it has proved in fast moving
consumer sector for example nestle coffee.
PLACE OR DISTRIBUTION STRATEGY
According to manager A Tetley have an efficient and effective distribution channel all over
UK. The main distribution is done through retailers it includes UK office direct, Tesco,
Sainsbury, Asda etc. Company is following a vertical distribution system. Tetley have an
alternative online distribution. This channel serves mainly through Tetley website. Company
have a strong and long term relationship with channels. Tetley encourages motivation
relationship by offering discounts and offers to their channels. For example Tetley will give
promotional merchandise product like cups , T shirt , point of sale displays , win a chance for
Jaguar and company will give discount vouchers which can be use in different store.
Channels of distribution
The above picture shows various channels of distribution in Tetley UK .The Company have
main three distributions channel and it is really important to fast moving consumer goods
market. if the company is keeping one distribution channel, the company cannot make sure
the availability of product in the market. This is because geographically the country is big and
if the company is keeping only one distribution channel the distributers have more barging
power .So it important for the companies like Tetley to keep multi channel distribution
system for delivering product effectively in the UK market.
Vertical distribution system of Tetley
Tetley is mainly following vertical distribution system that is illustrated with help of the
above diagram .This vertical distribution is the most cost efficient and effective for delivering
goods. Through this channel system the company can increase the sales since in UK retailers
have high potential for generating sales.
For placing the tea in the retail store Tetley have certain rules that are displayed in the
following box
CONTROLLING THE MARKETING STRATEGY
Tetley control the marketing strategy by evaluating the performance in terms of sales and
market share .But mainly depends up on Tetley’s marketing objectives .Company have
different marketing strategies once it is implemented they will control depends on the
performance of the marketing strategy. It is important that Tetley need to control the
marketing strategy because the company has spend a lot of cost for developing and
implementing the strategy. So they should evaluate the performance in the market whether it
is bringing any potential or not. This marketing strategy controls and helps Tetley to choose
an alternative, if the implemented marketing strategy is not doing well in the market . So this
research is strongly supporting the way that Tetley do controlling and strongly recommending
that in the competitive business environment.
Barriers for implementing Tetley marketing strategy
The manager A says that in some cases Tetley has faced some problems in implementing the
marketing strategy For example for implementing the promotional coupons because the major
problem in the coupons Tetley has is the store is remedying the coupons for other products
not for the Tetley’s product. And other major problem is that Tetley has faced the regulation
of advertising standard authority for translating the health benefits. Tetley has recently
withdrawn the advert of green tea from the UK market and restructured it with a new face. It
was a barrier to Tetley for implementing the advertisement strategy. These barriers can create
a lot of cost problems to the company because in the UK tea manufacturing companies are
paying huge amount for advertising and promotions. So this kind of barriers will reduce the
profit and chance for failing marketing strategy. It is important to the companies like Tetley to
identify these barriers before implementing the marketing strategy so that the company can
reduce the cost.