MARKETING RESEARCHTERM REPORT ON SUBMITTED BY: Urooj Khan Salman Saeed Irfan Bhatti Akbar Nagaria Owais Idrees Khan SUBMITTED TO: Ms Fareen Razzak 1 IoBM ACKNOWLEDGEMENT We would like to thank Ms. Fareen Razzak for providing us the opportunity to work on this report. This report has enabled us to apply almost all marketing concepts that were covered during course and will help us to embrace further learning of the subject. We would also like to thank Mr.Agha Ali Jaan, (Brand Manager, Danedar, Tapal Tea Pvt Ltd, Pakistan) and Ms.Hafsa Farooq, (Assistant Brand Manager, Ice tea, Tapal Tea Pvt. Ltd, Pakistan) for providing us with priceless information required for the making of this report. 2 IoBM EXECUTIVE SUMMARY From the dimmest of history when around 2727 B.C. a few leaves of a wild shrub tea blew into the royal bowl of boiling water being sipped by the legendary Emperor Shah Nung, known as the Divine Husbandry as well as a patron of arts. Tapal Tea here brought tea from the royal bowl to the common man's cups as the most sought after beverage the country over. Under the management of the founder's son, Faizullah A. Tapal, the company continued to grow and innovate. Currently it is being managed by the founder's grandson, Aftab F.Tapal who has continued giving further strength to the foundations of quality laid by his family. After studying abroad, Aftab F.Tapal returned to introduce professional management and unique production ideas into the business. His progressive outlook resulted in the total automation of the tea plants in Karachi. Their motto "never compromise on quality" remains the byword on the lips of all engaged in producing Tapal Tea that has resulted in customer's brand loyalty and their unflinching addiction. The testimony of their quality has made them the first tea company in Pakistan to earn the ISO-9001: 2000 Quality Certification, the symbol of supreme quality standards. Pioneer of the Danedar category in Pakistan, Tapal's Danedar remains a firm favorite around the country with its grape-nutty appearance, rich golden color and a strong refreshing taste. In fact its popularity is such that several multinationals have launched 3 IoBM aroma and taste. Through continuous innovation and research and development they gain a big share of Pakistani market. Founded by Adam Ali Tapal. 4 IoBM . They still are growing and hope to be a leader in a market in coming years. but Tapal remains the original and ultimate Danedar because of its unique color. the company first started marketing a number of quality blends to Pakistani consumer market.their own versions. As a company they have grown and flourished together with the great nation. Color and a strong refreshing taste are its most significant attributes. Tapal is proud to have been a part of Pakistan's history since its inception. the commerce of tea became big business. The ³loose´ tea segment. 70. Out of recent total legal imports of 114. a very competitive local firm. while the rest was imported by independent traders who sell ³loose´ tea in open markets.PASSION FOR TEA The world's passion for tea is legendary.000. Packaging and distribution are nominated by Unilever. the world¶s largest transactional corporation in the tea industry.000 kilograms went to the packers. and is the world¶s seventh highest consumption. And tea is world's second most popular drink (after water). Both are based in the port of Karachi. Majority of the country¶s total population lives in rural areas (about 66 percent out of 150 million) where tea consumption is in majority. It's easy to make. The Pakistan¶s tea-makers can be classified into: y y The ³blended and packed´ segment of the market. It is the most popular and cheapest beverage.000 kilograms. affordable and one of the fastest growing beverages (6. Kenya is the leading supplier with 57 percent of Pakistan¶s import. In Pakistan the annual consumption is about 150 million kilogram. 5 IoBM . PAKISTAN BECAME A MAJOR TEA IMPORTER.5% over 5 years).000. and as it became more a drink for the masses. and fluctuates 1kilogram per year. Pakistan is now the world¶s third largest tea importing country. There are some other minor players. Blending. and Tapal Limited. TEA ADDICTION In Pakistan is can be taken as a symbol of relaxation almost every 10th person is a tea addict and undoubtedly feels proud of this addiction.Tapal (founder¶s grandson).A. 6 IoBM . we all love and adore tea. the current CEO joined the company. Tapal has made its mark in the market by its very slogan ³Laal hai toh Tapal hai´. A well trained tea taster and tea specialist himself. ABOUT THE COMPANY Tapal has been well recognized company of Pakistan since 1947. At that time of establishment. Fazullah. Mr. Aftab Tapal introduced professional management and unique production ideas to the business. Adam Ali Tapal was the founder of the Tapal Company. took over as CEO and initiated tea distribution to retail outlets around the city for the convenience of the people. import restrictions etc) in the market because he saw an opportunity in the industry. or the delicacy of herbal tea. Mr. tea not grown here. the amazingly ³sab ki favourite´ doodh patti. quota system. the occasional Kashmiri Chai. Adam Ali Tapal stood against the tough competition and uncertainty (such as change in government setup. The shop in Jodia Bazar existed until the 1970 when the third generation of the Tapal family. He bought a tea store in Jodia Bazar from a Hindu who was at then migrating to India . lemon tea. Aftab Tapal introduced new tea concepts and developed a wide range of tea blends catering specifically to the tastes of people throughout Pakistan. Aftab Tapal. Wildly recognized with its flavours of light yet effective green tea. Customer satisfaction is our number one priority. but think globally 7 IoBM .MISSION STATEMENT OF TAPAL To provide a value added service to our customers with quality. reliable. STATEMENT OF COMMITMENT Never Compromise on Quality! This commitment to quality has resulted in a high level of customer satisfaction and unflinching brand loyalty. expertise and professionalism to enhances our client's operation. OBJECTIVES y y To transform our competencies into the best advantage for our clients. To offer quality services with integrity. y To offer personalized services according to the clients need. and world-class service. Tapal believes to act locally. MARKET TARGETING: Tapal danedar is basically targeting urban people. MARKET SEGMENTATION The market for Tapal Danedar is highly commodity driven and this product is easily accessible available through out Pakistan. rich golden color and strong refreshing taste. In fact its popularity is such that other companies have launched their own versions of this blend.1 Tea Brand" in Pakistan. Danedar brand has the characteristics to remain intact even after a long time. Tapal Danedar remains a favorite around the country with its grapenutty appearance. So it targets customers who want to fresh for longer time. Also available in double chamber tea bags. aroma and taste. 8 IoBM . but Tapal's remains the original and ultimate Danedar because of its unique color. TAPAL DANEDAR: Tapal Danedar is pioneer of the Danedar category in Pakistan. Tapal target the middle as well as lower class because they think middle class is most important class It is made to target customers who respond towards light and soft taste The target audience will be primarily working class starting from the age of 20 to round about 55 years of age. today Tapal Danedar enjoys the position of the "No. They have divided market into segments and choose working and middle class.TAPAL¶S PRODUCTS 1. 000 RS Believers achievers and strivers Middle class. It is targeting Density Region Income Lifestyle Social class Urban All over Pakistan Under 15000 . a high utility jar. Price: Company is offering medium range price so that most no of people can easily afford it Promotion: o Print campaign o Advertisements o Focusing on har lamhe ki chai o Started a show ³chai ke lamhaat laaye laakhon ke inamaat´ in order to give benefits to customers it was launched at ARY DIGITAL.APNA etc 9 IoBM .ATV. 3 enveloped pack sachets. Working class strong tea drinker. a pouch and the ground-breaking convenient teabags. Aroma and Taste o They have introduced 3 trade mark soft pack variations.30. Taste preference Light Age 10 and above MARKET POSITIONING AND DIFFERENTIATION: Product: o Color. it created a completely new category in the tea market. MARKET TARGETING: Tapal famil mixture is again targeting urban people. It is targeting joint family system which we can still found in Pakistan Tapal attract the upper middle class buyer. It is made for whole family. TAPAL Family Mixture: A unique combination of high-grown Kenya leaf and dust tea. Developed in 1947. It gives a refreshing aroma of leaf and the strong taste of dust. It is the blend that started the Tapal success story and many other companies followed Tapal in introducing similar blends. Tapal Family Mixture is the pride of Tapal. Market Positioning And Differentiation: Density Region Income Lifestyle Social class Urban All over Pakistan Rs 25000 and above Traditional (family) Upper middle class Taste preference Strong 10 IoBM . It is made to target customers who respond towards strong and pleasant taste.together in one cup. Tapal have chosen segment of traditional family and for upper middle class . It is targeting strong tea drinker. MARKET SEGMENTATION: Tapal Family Mixture is a blend of leaf tea and dust which give both strength and aroma to strong tea lovers.2. for every member of family.Motive was to give prizes to customers and earn their loyality o SMS campaign o Launched song´Laage na nazar 11 IoBM . small stores and very small shops like khokas Promotion: o TV show launched name ´KHUSHI KE LAMHAAT´ staring MANI and TEHREEM . Tapal captures consumers in following ways Product: o Color o Aroma o strong Taste of dust o They have introduced tea bags and jars for house hold Price: Company is offering medium range price so that most no of people can easily afford it Place: company has made it easily available all over including big stores.Tapal family mixture sets position in minds of consumer as it is for whole family. Jasmine Green Tea is a winning combination of alluring fragrance and health. Jasmine Infused with Jasmine flowers. Elaichi and Lemon. Elaichi The earthy flavor of Elaichi Green Tea has a pulsating nature that lifts your body to a new level of clarity giving you more revitalization. Lemon Lemon Green Tea with its rich taste regenerates your soul.000 & above Thinkers achievers &Health conscious people into your sense with a distinct soothing effect. Its vibrant essence breathes new life Density Region Income Lifestyle Urban Across Pakistan Rs. Jasmine Green Tea opens a new window to your mind. It is your perfect soul mate to indulge in a rejuvenating experience of its refreshing essence 12 IoBM .SHADES OF GREEN: Tapal Shades of Green is an aromatic combination of the finest carefully selected tea leaves and the tantalizing freshness of natural Jasmine. 25. It is made to target customers who are health conscious It is made for health benefits. Product: o Color o Aroma o It activate your senses o Suitable for your health Price: Company is offering medium range price so that most no of people can easily afford it Place: Company is trying to promote it all over Pakistan 13 IoBM . cultural taste of their tea. So Tapal has designed product for health conscious people. Market Targeting: Tapal family mixture is again targeting urban people. there is simply no way that they want to give up on the typical. They want tea with a strong taste and smell. As it is made from jasmine .lemon and elaichi which are harmless for human beings Market Positioning And Differentiation: By offering health benefits.Market Segmentation: Social class Lower uppers and uppers Tapal has segmented on the basis of health conscious consumers who are very health conscious and are not ready to compromise their healthy diet patterns under any circumstances whatsoever. it has maintained strong position in the minds of consumer. Promotion: o Billboards and advertisements were launched 14 IoBM . Market Segmentation and Targeting: Tapal have segmented the rural Sindh into upper interior Sindh and lower interior Sindh.CHENAK: An economy dust embracing high grown flavor teas proportionally blended with medium grown Kenyan golden color teas to give an all round cup at a reasonably lower price Chenak Dust infuses quickly and gives the consumer a strong bright color cup within a very short time. It is made to target local people of Sindh It is for those people who have low earnings. Chenak Dust is popular with those µtea lovers¶ who take several cups of tea due to its friendly price. but cannot afford a high quality tea. Product: o Color o Aroma o Light Taste Social class Taste preference Age 7 and above Density Region Income Lifestyle Rural Interior upper Sind 15000 RS and less Traditional people who prefer light taste Lower middle class Light Price: Low price is offered to fulfill demands of lower class people 15 IoBM . for the middle lower and lower end segments of the market that prefers strong tea. Market Positioning And Differentiation: Company sets low price position in the market. Tapal Chenak is targeted to the lower interior Sindh. Promotion: Issued Om shanty om calendar Launched a show ³dar dar par inam´ 16 IoBM . Place: Company has made it available every where in Sindh as well as big cities. TEZDUM: Tapal earned a unique distinction in 2003 as it became the first tea company to introduce hassle-free. extra strong round teabags in Pakistan. ³Lage Thaa Kar Ke!´ Tapal Tezdum has hit home with the people who like strong tea Market Segmentation: Density Region Income Lifestyle Social class Rural and metropolitian Punjab and Khyber pakhtoon khwah 15000 to 25000 Rs people who prefer strong taste Middle class Taste preference Strong Market Targeting: People who love to drink strong tea It is targeted people who has rular background It is made to hit those people who belive in Quality Market Positioning And Differentiation: Tezdum is considered as strong tea which gives you strength to cope with your problems 17 IoBM . strong cup of tea. these teabags are easy to use and their shape guarantees an ideal infusion of taste and aroma for a refreshing. With the tagline. With no strings attached. Product: o Color o Aroma o Strong taste Price: They have launched 125 gm packet but strong contents so u use little amount with better results Place: o Made available at door step Promotion: o Launched advertisement about it strong taste 18 IoBM . Mezban Dust has a smooth. Market Segmentation: Density Region Income Lifestyle Social class Rural Interior upper sindh Under 10000 Traditional people who prefer strong taste Lower middle class Taste preference Strong Market Targeting: Tapal have segmented the rural Sindh into upper interior Sindh and lower interior Sindh. It has targeted the upper rural market of Sindh by taking out a product Mezban Premier. Only high grown Kenyan teas are used for this blend due to their high concentration of flavor and strength. It is the finest quality dust blend which is carefully selected for its quick liquoring characteristics.MEZBAAN DUST Tapal Mezban Dust has an attractive leaf appearance. which is neat. thick and full cup with an irresistible aroma making it a perfect cup at any time of the day. It is mainly targeted towards old traditional people who prefer strong tea 19 IoBM . black and grainy. Market Positioning And Differentiation: The positioning of the brand has been strategically achieved to symbolize the bonds and relationships that underscore the human equation for the people of Sindh along with celebrating their rich heritage and culture. Product: o Color o Aroma o Strong taste Place: o Door to door selling Promotion: o Mezbaan trade dhamaka :trader were provided rewards o Announced customer promotion titled rishton ka safar 20 IoBM . ice tea was created completely by accident. although some evidence has been presented that it may have been drunk in the South well before that.ICE TEA: The invention of ice tea is generally believed to have occurred in America in 1904. Like many great inventions. Market Segmentation: Density Region Income Lifestyle Social class Urban Across Pakistan 35000 and above Inovaters thinkers and experiencers Lower upper class and upper class Taste preference bitter Age 18-40 years 21 IoBM . Market Positioning And Differentiation: Price : o The introductory price of ice tea is Rs 30 and thus it is not very expensive Place: o They have not done efforts to make available all over country but if they try to promote it can easily get available to every where because Tapal network is world wide. 22 IoBM . INTELLECOVERAGE 23 IoBM . PRODUCT LIFE CYCLE 24 IoBM . almost pure competition Product Line Marketing Personnel Finance Research & Development External Factors Consumer/Social Competitive Technological Economic 25 IoBM . May lose focus. high knowledge High sales revenue. Consumer income is high for the danedar class Weaknesses Large size may lead to conflicting interests So much product lines but still not able to knock out loose tea. possible trouble staying focused High expenses. may not be segmented enough Possible conflicts due to so many people.Internal Factors Management Strengths Experienced. may have trouble balancing cash-flows of such a large operation Sometimes they conduct research but the advantage is taken over by small competitors. high sale growth. Threats Illiterate people go for loose tea which is substandard as well Intense competition can pay so they have to keep eyes open Competitors are global leaders so they have more technology as compared to Tapal Very elastic demand. product and packaging in with regards to its markets Maintenance of proper website which subscribes and provides information regarding long production line. Variation in products Diverse. large capital base Continuous efforts to research trends an reinforce creativity Opportunities Increase in the population Distinctive name. broad base of interests and knowledge Differentiated. and local awareness Very experienced. as well as the complete route plan of the distribution network. can terminate the contract on one month basis. 26 IoBM . The contract includes a clause that describes its termination process. Tapal¶s share in the market. all the costs and expenses involved and when the distributor agrees the contract is signed. The contract comprises of a specification of a complete volume of the market.DISTRIBUTION NETWORK Distributors: Tapal deals only with distributors on contract basis with no other intermediaries involved. the sales that will be made by the distributor. They provide the distributors with a detailed description of the distribution network. pro-active and cannot deal with other tea companies otherwise the contract will be terminated. Either of the two parties: Tapal and the distributor. Tapal chooses their distributors after analyzing their complete financial background and Public Relations. They do not extend credits to their primary customers and all their sales are mainly cash based. the profit margin of the distributor. This contract involves the condition that the distributor has to be brand loyal. Company Distributor Whole sellers Retailers Universities Restaurants / Offices House holds 27 IoBM . BCG MATRIX of TAPAL¶S PRODUCTS 28 IoBM . COMPETITORS Tapal¶s competitors include Lipton Tetley Supreme Unbranded tea suppliers 29 IoBM . TEA MARKET SHARE TEA MARKET SH Tapal has 46% share in tea market . while lipton shares 23% . 30 IoBM .brooke bond and Tetley has 10 % share . Tapal's tea managers have been trained at home and abroad in this very rigorous and specialized discipline. TAPAL¶S RESEARCH AND DEVELOPMENT EFFORTS Aftab F. SKILLS AND ACCUMULATED KNOWLEDGE Tapal danedar has developed impressive skills in operating its business model at very high quality accumulated knowledge has guided management improving business design overtime COORDINATION OF ACTIVITIES Coordination of activities among different departments is the essence of tapal danedar. ASSETS People inside the organization and Tapal itself brand names are assets of the company. Research and development supports other departments to have controlled and timely production.DISTINCTIVE CAPABILITIES Distinctive capability varies according to the products as it goes with the tea industry ORGANIZATIONAL PROCESSES Tapal danedar tea has very effective research and development through which they are having very innovative brands with production efficiency. Tapal is a well-trained and highly experienced tea taster of the country and is recognized as a qualified tea specialist worldwide. 31 IoBM . and have frequently travelled to leading tea-producing countries searching for better teas. it has always been close to them. As a result an entirely new category brand called Danedar was created and launched. Another reason behind Tapal¶s success in catching the hearts of the consumers is that.UNIQUE SELLING PREPOSITION The main reason behind tapal¶s success is that it has localized its taste. 32 IoBM . This has been possible because of its strong Brand Activation Activities. It manufactures its product according to the taste and requirements of the market it is catering. As Tapal specifically catering to different segments of the market so its prices are based on its effective value to customers relative to other products. Also the prices are different for different SKU¶s. PRICE Tapal people never wanted to compromise on quality so they adopted value based pricing. Tapal Danedar became the country¶s largest selling tea brand with a loyal following. exciting and interactive as possible. After Tapal¶s unique Family Mixture became Karachi¶s largest selling brand. These activities have added a new dimension to their marketing activities making them more attractive. the company was encouraged to innovate further. MARKETING MIX PRODUCT Tapal has a variety of brands each catering to different market segments. which shows that Tapal has been successful in creating a strong Brand Image amongst its consumers. Tapal and Music With the view that the younger generation will be Tapal's future customers. grocery stores. etc. Tapal caters to its customers by providing Tapal Danedar and Family Mixtures to more than 140. Right now. medical stores. which include superstores. In their advertisement they hire the services of renowned celebrities. It has sponsored the leading singers in Pakistan and actively participates in music concerts. department stores. from Karachi to Khyber with over 400 distributors. The popularity of its fine brands is unabated. PROMOTION Electronic Media Initially. paan walas. the company relied heavily upon print media but this trend is changing now because of the in customer¶s life style. Extensive training programs are provided for the devoted sales personnel. Grocery stores and merchants together provide 80% volume of the tea sales. Tapal is actively supporting the fast developing music industry in Pakistan.PLACE Now Tapal has a distribution network spread across Pakistan. general stores. 33 IoBM . company is doing intensive advertising through networks. merchants. Sales Promotion Strategies The company is running different sales promotional schemes at different times of the year depending on the sales of the company. making it the No 1 national tea company in Pakistan.000 outlets in Pakistan. The TV adds show the culture of Sindh and tries to correlate the sindhi heritage of hospitality with the image of the brand. There are many ways to communicate the value created. Tapal has used the following tools and techniques to communicate the value they have created for their target customers. Ads are shown on KTN as it is believed that sindhi viewers do not change the channel during commercial breaks as it is the only sindhi channel. There are cases when a company fails to communicate the value to the selected target customers or even worse when the target customers get the wrong message. The entire effort of creating the value will go down the drain if the communication is not done properly. the company has shifted away from television advertising to ³MASS ADVERTISING´. this stage in our view is the trickiest stage of the entire value creation process. With a wide range of television channels available it is very difficult to convince the viewer to not to change his/her channel. But this does not means that they do not indulge in television advertising at all. Big 34 IoBM . This brand extension needs both TV as well as mass marketing as it is struggling with in the awareness stage. The new brand ³Tapal Mezban Dust´ is targeted for the customers of interior Sindh.5 to 1. Advertising As far as Advertising is concerned. The expenditure ratio of mass adverting to television advertising is 1. Mass Advertising in the form of billboards are the most common form of advertising. PROMOTIONAL MIX Communication of the value created by the company is very important. The basic reason for the shift is that the organization realizes that television advertising is not the same as it used to be around 1213 years ago.Tapal¶s brand is backed by planed strategy implementation and followed up with effective communication its advertising and promotion is touching all aspects of media and market opportunities. Public Relations As far as publications such as catalogues and brochures are concerned the company does not have any such publications. Direct Marketing Again no form of this communication is taking place at a formal level. Personal Selling The company has a B2B (business to business) approach as far as personal selling is concerned. Face to face communication of value is much more effective than advertising as immediate feedback can be received which helps in ameliorating the communication process. The portrayal of men wearing formal suits and having tea at restaurants has persuaded people of the corporate sector to try the slightly expensive green tea. The company does not have a separate department. They only look after certain complaints which have been reported consistently. 35 IoBM . Sales rep visit hotels like Marriott and Sheraton to offer bulk amounts at a discount rate. The only form of direct marketing is done by the brand managers who readily receive any complaints and comments about their brand through emails but do not respond to those emails.billboards with high color resolution for µGulbahar¶ (their new green tea) are good at tempting the customer to try the crystal clear green tea. FM 96 is also extensively done for the young urban crowd for family mixture. They have not yet focused on the possibility of issuing any sort of publications for improving upon public relations. Advertising on the new Fm radio channels like City Radio or FM 107. Through this process they are able to sell more and this serves as an easy method for further communication of the value which was promised primarily in ads and billboards. Sales Promotion Sales are promoted by encouraging the market segments through free sampling. Sales Force Tapal at present has hard any notable sales force. making sure that the product is available all the time is more important. When asked why? The company manager responded that since Tapal makes tea. 36 IoBM . After 2 weeks a lot of students bought the product although the product was no more for free and had no market before the free sampling was done. such products are widely available. Free sampling of such a brand (Tez Dam) was carried out for almost 2 weeks. According to the manager of Tapal. hence a well equipped sales force is not essentially required. Such products have little customer involvement. and customers have frequent purchase with little shopping effort. Tea is a convenience product. The target segments are given free samples of the tea brand which is targeted for them. The first to market Kenya teas in Pakistan. The first tea company to be awarded the ISO 9001/2000 Quality Certification 37 IoBM . The first to develop an entirely new blend and category-Tapal Family Mixture (the mixture of leaf & dust). The first to invent the highly successful brand Danedar Leaf Blend.ACHIEVEMENTS OF TAPAL: The first to introduce soft packs in the country. The first tea company to introduce metal-free tea bags. A South Asian Perspective´. Tapal Tea of Pakistan is a good example of how a local company comes out of the shadow of a giant multinational and becomes a challenger in the market. HAS MADE YET ANOTHER MARK! Philip Kotler¶s latest book ³Marketing Management.TAPAL TEA (PVT. (Taken from: Kotler ³Marketing Management´. contains a detailed case study of Tapal Danedar and its proud tale of success.) LTD.13th Edition-A South Asian Perspective) 38 IoBM .