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Launch Of Green Tea In Uae Marketing Essay

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A marketing plan provides a sound framework for developing the marketing strategy for a product. It
has a list of action items like sales objective, budget requirement, resource requirement etc. It is a very
important part of the overall business plan. In the first submission, we had already talked at length
about the cultural and economic analysis of the market and features of the product. This submission
will carry forward from where we left in the last assignment. We will take a closer look at the intricacies
of running a business like understanding the target market, designing a suitable promotion strategy,
having an overview of distribution and production process etc.
The last part explained in detail the benefits of the green tea. It also explains how it protects the body
against the most important carcinogens or tumors that can attack the body which is: indirect chemical
carcinogens, physical carcinogens and direct chemical carcinogens.
We also analyze how to market the product and how will it work in the UAE. Such as: Culture analysis
in the UAE, economic analysis in the UAE and competitive market analysis in the UAE.
Traditional approach to look at any product based marketing involves understanding of:
Financial data Factors like what will be the estimated product cost, distribution cost, expenses etc.
Product data It involves understanding of product pricing and other formalities like packaging etc.
Sales and distribution data It involves what should be the sale targets and associated costs and
revenues.
Advertising and sales promotion data which caters to promotion strategy for the product.
Thus preparing a good marketing plan can be a very complex process. But in a nutshell the aim of any
marketing plan is very simple, which is to understand the factors and situation which have an impact on
successful running of the business.
We have looked at the complete marketing plan from the perspective of our product-Green Tea hp. This
will be a new product in UAE market. As a result the challenge with this product is to start afresh with
all marketing strategies. This project deals with various aspects of a marketing plan. To begin with it
addresses the marketing objectives.
Marketing objectives encompass setting realistic sales and profit expectations. This involves analysis of
the total market for the product and the share for our product. Besides it also involves understanding
the target consumer.
Next section talks about marketing strategies. Marketing strategies outlines programs which will help
us reach the expected sales and profit targets outlined in marketing objectives. This involves how
much and when to spend on advertising and other promotional activities.
Next we have discussed the implementation intricacies for our business. Tasks such as distribution
from USA to UAE and price determination for the product are dealt with in this phase. These tasks are
closely related to the financial statements and budgets. For any new business, it is very critical that a
close check should be kept on the budget allocated and required. It is always good to have a planned
budget before embarking on any new venture.
Last but not the least we have also looked at the resources required to sustainably run our new
business. Understanding the mode of generating financial resources, personnel resource and

production capacity have been dealt in great detail.

Marketing Plan
Marketing Objectives
Target Markets
A target market is a specific group of people which a business thinks as their potential customers.
They have similar characteristics like age, demographics, income etc. They also have similar buying
patterns and can be classified as a separate category. The business tries to target this category when
developing marketing strategies for its products or services and all of its marketing messages and
campaigns are dedicated towards the target market.
To develop a powerful marketing plan, we should answer following questions regarding the target
market:
How well do we understand the needs of our target market?
Can we relate to what our target consumers need and what we have to offer?
Are there any ways by which we can offer highly customized products for different groups?
What product should be made generic and what should be offered to a broad set of consumers?
A well defined target market can build the success of any company. While making products available to
a huge market looks attractive, we would like to target specific customers to make ourselves known in
the market. This is because green tea is new product in UAE and is not well known. In our previous
submission, we had highlighted that we would specifically target the age group of 15-50.This was
based on the consumption pattern of this group.

Demographics
As we know UAE has a large foreign expatriate population. The total population of the UAE is
estimated at 2.3 million people. Only about 20 percent which represent 460,000 people of these are
UAE locals. The rest are foreign workers. We would target all the people for our product.
The Age breakup of UAE is as follows
019 years: 27.4% (female 40,328,895, male 42,667,761 ;)
2064 years: 60.1% (female 90,813,578, male 89,881,041 ;)
65 years and over: 12.6% (female 21,991,195, male 15,858,477)
The above breakup highlights the huge proportion of working age group population in UAE.

Lifestyle
Lifestyle is one important key factor used in determining which segments are used to target customers.
Some important information in this section is there which includes how the Emirates market lives, their
hobbies, their interests and their extracurricular activities. Emirates are living in extremely hot climate
and they use tea as part of greeting to their guests most of the time.

Frequency

It's important to try and find out how frequently target segment will use the offered product or service.
Specifically, businesses should always determine if they're looking for on time sale and be in premium
segment or to target more customers more often through new and innovative marketing techniques.
Emirates have decent per capita income and they usually prefer the large packs and try using new
products that come in the market. One of the major factors which contributes to their type of behavior is
the diversity in their population. Exposure to various cultures makes them easily accept and
experiment new products more often.

Desires / Needs
Business should be surely discovering the general need of the country they are planning to enter with
new product. They should be aware of the basic desire and need of the emirates before launching
Green Tea Hp here. Another point is that UAE development & taking care of health sector is
participating in the general issue by health and is making awareness campaigns about the importance
of using the green tea and replaces the unhealthy food habits by using the healthy products. This will
lead to decrease in the obesity and the diseases in the country. Therefore we can say that there is
desire and need of Emirates which is developing towards this product of Green Tea hp.

Expected Sales and Profit Expectation


Sales and Profit objectives define the projected amount of goods to be sold. Thus it is very important for
the success of any business that realistic objectives should be set. Once the sales objectives are set,
everything else like marketing budget, channels to be used, number of sales personnel to hire etc. is
based on these objectives or expected sales figures.
For our product i.e. green tea we would look to cater to different tastes of the expatriate population.
According to our research, we found that total UAE tea sales volumes showed a growth of 9% in 2009,
or at 4,472 tons. (www.hktdc.com). Thus the change in tea sales from 2008 to 2009 is 369 tons. The
below table summarizes the sales figures for the next year.

Expected Sales Table

Growth in Sales in 2009


4472
Percentage Growth in 2009
9%
Sale in 2009
49,688
Sales in 2008
49688/1.09=45585
Change in Sale from 2008 to 2009
4103
Projected Sales in 2012(assuming same growth rate)
49688+(4103*3)=61997

This market is primarily controlled by Lipton (www.usa2uae.com, 2009). Most of the new players like
Green Tea Hp would aim at getting a minor market share to begin with.
Based on the estimates from other new players like entering into this segment, like wagh bakri from
India, we would look to target at least 1 percent (www.usa2uae.com, 2009)
According to people in tea industry, UAE is looking for new and fresh taste in the tea segment. Already
available products do not cater to the expectations of the people. Since the migrant population comes
from different backgrounds, they have different tastes. Thus our green tea with many flavors would be
able to fulfill this need to some extent. Thus we can hope to hit at least 1 percent of the market share.
Thus 1 percent of projected sales in 2012 is 620 tons (approx). To calculate the profit margin we would
take industry standards for gross profit margin and cash profit margin. We would take conservative
estimates by assuming values lower a leading player in this industry. For our purpose we have taken
Tata Tea data (www.moneycontrol.com) and calculated accordingly for green tea.
Market Share
Average Price of tea in last year
Total revenue
620 Ton
3451.5 dollars/ton
620*3451.5=2139942 dollars
We have assumed the market price of tea at 3541.52 dollars per ton
Company
Gross Profit Margin
Cash Profit Margin
Profit Dollars
Tata Tea Beverage
10 Percent
9 Percent
NA
Green Tea Hp (UAE)
8.7 percent
8.7 percent
2139942*.087 = 186174

Promotion Mix
Advertising
Objective

Objective of advertisement will be to attract health conscious customers towards the green. Since the
green tea belongs to premium segment therefore more stress will be given to attract urban area
consumers who are willing to try something new.
Actually if we try to segment people of UAE, we can segregate people into two categories. One who
prefers to try new products available in the market and they are usually called experimenters. Other
category try to retain their own family retained brand which will bar them from experimenting any new
product. Our work, as a green tea promoter, should attract these early experimenters and make a mark
among them. Because the late buyer or safe buyers usually change their buying decision only when
are too much exposed to any new product and when they really get to know that product is fine and can
be used and have superior benefit as compared to their already using product. Hence, we are going to
keep our target consumers to the premium family product thing. It will include kids, teenagers, fathers
and Mothers. But the main target will be the teenagers who really care about their health.
Teenagers generally have the tendency to experiment with totally new product. They try to use
whatever there is in fashion. They want to be different from old generation and there they try every new
thing which makes them different from their previous generation. That is why it is suggestible to make
them a target customer and make our ad strategy as per their symbol of change. Therefore to target
teenager and people in their twenties is be our prime strategy target.
We need to position our product as youth icon thing. We have to make its image to look as fashionable
and belonging to premium class. To make this we will be using some Hollywood star as an endorser
which is youth icon in the eyes of Emirates.

Media Mix
We are going to use the media mix in a way to reach every single people in Emirates in order to make
them of this new product in the market. Since ours is the first company launching this product in UAE
therefore it will be our tough task to educate and inform consumers about the health benefits and
differentiation from the entire existing product available in the United Arab Emirate market. Therefore
we need to use following promotion media mix:
Advertisement in magazines, newspapers and television.
TV program.
Kiosks.
Billboards.
Banners.
The way we going to use this are to make this promotion in various phases. In first phase in which
product need to be made aware in the UAE market is to use the media which is most widely used in
the United Arab Emirates. Therefore we are going to take the initial advertisement through the use of
the maximum reach basis. Since we all know that television is the best mode to reach to maximum
population in minimum time. This will accompanied with the

Message
Message which green tea should be cashing is to convey a royal brand Image and keep a youth icon
associated with product. Idea is to convey the health benefit and Premium product category among
youth. Message should be something like conveying New and Young: Tried me!!.

Cost

Advertisement
Newspaper Advertisement

20000
TV Advertisement

30000
Kiosk Advertisement

10000
Magazine Advertisement

10000
Billboard

10000
Banners

10000
Promotions
10000

Advertising Expense

$ 100,000.00

Sales Promotion

Objective
Objective of sales promotion will be to attract more and more customer in very first year. This should be
done with the help of affordable small packaging of size as small as 100g. This should be the smallest
package that should be available to the customer because smaller than this package will affect the
brand image which is the last thing company want to do.

Premiums
Gift with purchase is the very common promotion techniques used by marketers for promoting the
product. It is used in a way to associate our product with something of real use to the segment we are
targeting. Since here we are targeting the youths therefore we can say that if we need to give some
goodies free with our green tea product we need to offer something which is of real use to the
teenagers and adults. A small teddy bear or a fancy branded pen with the 1 kg pack will attract
consumer towards our product.

Coupon
Other way to attract the shopper towards our product is to let them buy the product with some free
movie coupon. This thing which is really famous among the teenagers is to offer them free movie
tickets on lucky draw to some consumer. Something like free movie coupons to every 5th shoppers can
create a magic. This is cheap from the point of publicity and can work a lot in gaining momentum for
the product.

Cost
Cost allotted to all this promotional strategy will be very less compared to advertisement expense we
are incurring on the product. The main reason for this is because our main aim is to achieve more of
awareness and less of selling. We want to do marketing rather than selling. We are going to produce
what is needed there not we will sell whatever we have produced. Total Cost allotted to promotion will
be $10000 annually.

Personal Selling
At this stage personal selling will be avoided by Green Tea HP. This is totally new product in the market.
Surely personal will help in sale but we are avoiding this to check our brand image deterioration. We
are planning to use this in B2B strategies but not in the business to customers strategy.

Other Promotional Method


All promotional strategy which we are planning is already described in above. As of now Green Tea hp
product will not be experimented with some strange promotional technique. It can work but we dont
want to take risk for this totally new product in United Arab Emirates market.

Distribution: From Origin to Destination


Port Selection
United States is bounded by sea on both sides. In the west, it has Pacific Ocean whereas on the east
side, it has Atlantic Ocean. UAE on the other hand lies northwest of the Arabian Sea.

Origin
Since the manufacturing of Green Tea happens in Utah, we are interested in looking for major trading

ports near Utah. Utah lies towards the western side of US. Thus two major ports nearby are
Port of San Francisco, California
It lies on the western edge of the San Francisco Bay with a total trade capacity of 2,654,714 short tons.
This is a major port with high amount of export trade.
Port of Coos Bay .Oregon
It is located on the Pacific coast, with major cities nearby. E.g. It Washington to the north and California
to the south. This port too has high trading volume and is a good option since it had many logistics
operator in nearby states.

Destination
UAE has seaports throughout the region. The major ports are Port Jebel Ali, Port Khor Fakkan , Port
Rashid, Port Saeed ,Port Khalid and Port Zayed.

Packaging
Packaging is required to protect the products from damage during transit and also during storage.
Packaging also plays a crucial role in information transmission and sales.

Marking and Labeling Regulations


On any package, many types of labels are used. These may include trademarks, product certifications
and food authority approvals etc. To make full use of packaging, we intend to publicize the health
benefits of green tea through labeling. Approvals from health authorities and results of study on green
tea can be highlighted through package.

Containerization
During shipping of containers, one needs to take care of identification and bar codes and RFID
numbers for easy tracking and shipment of goods. Another important aspect to consider is the
container standards. There are many container system standards worldwide. It is essential that the
same standards are used by both the trading partners for easy identification of goods.

Costs
Packaging represents a significant portion of the total cost on a product. For example, in tea industry, it
is estimated that the cost of packaging can be as high as 30% of the total cost. This is primarily due to
special type of packaging required to keep the tea fresh and increase the shelf life.
Another cost consideration in packaging is that it is extremely expensive to create a new packaging
design including graphics and structure. Thus the choice of packaging should be a very thought out
process.
For our product, GreenTea HP, we would make investments in generating a stable packaging system.
We would restrict our packaging costs to 10 percent over the long term.
This includes the countrys industrial, agricultural, and animal products. The competent ministries and
departments approve the bill and issue a certificate of origin for all national products meant for
exportation. A copy of these documents should be submitted upon processing an export application.
The customs authorities employ the temporary deposit system in order to simplify and facilitate the
procedures for the importers. A deposit is an amount of money that the customs collects pending

payment of the customs duties or presentation of the original documents.

Price Determination
Transportation Cost
Transportation Cost will be there but that will be borne by wholesaler only. The wholesaler needs to
have enough margins as commission in order to bear this cost and still not make any losses. After the
wholesaler the further transportation cost will borne by retailer. Because of all this, both the retailer and
the wholesaler are getting hefty commission.

Handling Expenses
Handling Expenses will be borne by company itself as most of these handling charges are there as
freight cost are from factory to onboard travelling.

Custom Duties
Custom duty is paid by company only as it is importing the raw tea leafs from elsewhere. The amount
of custom duty generally depends upon the amount of import that is done. Company is paying $50000
as custom fees for the product for very first year on annual basis.

Whole and Retail Mark Up and Discounts


Final Price
Product Cost

$ 2,020,000.00
Selling price (Profit Margin 8.7%)

$ 2,195,740.00
Selling Quantity we are targeting (Ton)

620

Company Price

Selling price per ton

$ 3,541.52
Selling price per Kg

$ 3.54
Selling price per 250g Pack

$ 0.89
Selling Price per 100g pack

$ 0.035

Wholesale Price (@13% WS Commission)

Selling price per Kg

$ 4.00
Selling price per 250g Pack

$ 1.00
Selling Price per 100g pack

$ 0.04

Retail Price (@12.5% Retail Commission)

Selling price per Kg

$ 4.50

Selling price per 250g Pack

$ 1.13
Selling Price per 100g pack

$ 0.05

Pro-formal financial Statement and Budget


Marketing Budget
Advertisement/Promotion Expense
Advertisement
Newspaper Advertisement
20000
TV Advertisement
30000
Kiosk Advertisement
10000
Magazine Advertisement
10000
Billboard
10000
Banners
10000
Promotion
10000
Advertising Expense
$ 100,000.00

Distribution Expense
Distribution Cost
Store Payroll

20000
Store Management
10000
Rent
10000
Utilities
10000
Depreciation
10000
Repair
20000
Maintenance
13000

Total Distribution Expense


93,000.00
Product Cost
Processing Raw Green tea cost
Raw product (1000 ton)
1,000,000.00
Processing Variable Cost
230,000.00
Processing Fixed Cost
270,000.00

Final Green Tea product (620 ton)


$ 1,500,000.00
Product Cost
Percentage of Selling Cost
Green Tea Product Cost(620 ton)
$ 1,500,000.00
74.3%

Custom expense
$ 50,000.00
2.5%
Packaging Cost
$ 200,000.00
9.9%
Selling Expense
$ 73,000.00
3.6%
Advertising Expense
$ 100,000.00
5.0%
Distribution Expense
$ 93,000.00
4.6%
Misc Expense
$ 4,000.00
0.2%
$ 2,020,000.00
Selling price (Profit Margin 8.7%)
$ 2,195,740.00

Final Price
Product Cost
$ 2,020,000.00
Selling price(Profit Margin 8.7%)
$ 2,195,740.00
Selling Quantity we are targeting (Ton)
620
Selling price per ton
$ 3,541.52
Selling price per Kg

$ 3.54
Selling price per 250g Pack
$ 0.89
Selling Price per 100g pack
$ 0.04

Other Cost
Misc Expense
$ 4,000.00

Pro forma annual profit and loss statement (Profit year)


Profit And Loss Statement
Income
Revenue

$ 2,195,740.00

Expense

Cost of Goods Sold

1,000,000.00

Processing Variable Expense

230,000.00

Processing Fixed expense

270,000.00

Custom expense

$ 50,000.00

Packaging Cost

$ 200,000.00

Selling Expense

$ 73,000.00

Advertising Expense

$ 100,000.00

Distribution Expense

$ 93,000.00

Misc Expense

$ 4,000.00

Total Expense

2,020,000.00

EBIT

$ 175,740.00

Interest

$ 25,000.00

EBT

$ 150,740.00

Tax @ 20%

$ 30,148.00

Net Income

$ 120,592.00

Resource Requirements
Finances

In a product life cycle, different financial needs arise at different points in time .The funding stages of a
business are as follows:
Seed capital It is the amount you need initially to set up and plan your business activities.
Start-up capital It is the amount of money required to maintain operational activities like buying raw
material, processing etc in the first year. It is also called working capital
Mezzanine (expansion) capital It is required to expand the current facilities. e.g. to upscale the
production to full installed capacity or to buy a new larger business.
For our product, Green Tea, finances will be required to start business operations, logistics and
distribution, to pay for customs, for setting up packaging facilities and so on. We need a sum of around
500,000 dollars as calculated in above sections, of which 230,000 is variable cost and 270,000 are
fixed cost.
Capital funding can be of two types Debt Capital and Equity Capital. Debt capital means taking a loan
which can be paid back over a period of time. This gives an easy way to maintain control over the
company as well as get funds. The most common type of debt funding for a new business like ours is
secured loans.
To start any business, the first and foremost option that comes to mind is to avail business loans. A
business can also avail secured loans from banks by keeping some property as collateral with the
bank. Amount of secured business loans depends on value of the security kept with the lender.
Generally a secured loan can fetch an amount of 50,000 to 100,000 dollars. It can be paid back in a
period of 5-30 years depending on the terms and conditions.
Equity capital is another way of funding in which people or firms become a part of the company. In this
way they earn a portion of your profits in ways of dividends or can make huge money when the
company goes public.
Thus to determine the type of funding, we need to ask, that whether we are comfortable paying
monthly installments or we would like to give up ownership rights in our company. Along with this, we
need to ask following questions:
Does my business qualify for debt financing?
Am I willing to lose the secured collateral if the business fails?
Am I willing to share the confidential financial information of my company?
Some of other choices for funding a business include:
Personal savings.
Borrowing from family and friends.
Making a partner and using his personal funds.
Approaching a commercial finance company.
Getting venture-capital fund.
Thus to raise the funds of 1500,000 dollars, we can make following arrangements.

Funds Breakup

Seed Capital
500,000 Dollars
Secured Loans at 5 Percent
500,000 Dollars
Equity Capital for 10% stake in Company
500,000 Dollars

Personnel
Every organization should be clear about its human resource needs. Thus planning can help in getting
the right number of people at the right place. This kind of planning is largely dependent on the
organizations overall goals.
Forecasting of personnel depends on the following factors:
Mission of the organization.
Projected Turnover.
Quality of employee skills.
Technological advances in production and packaging.
Personnel can be acquired from any of the following two sources
Internal
External
Internal recruitment refers to promotion of employees from within the organization to fill the gaps. This
involves listing of an employees education and skill set and based on that making recommendation for
promotion. A company also considers performance levels of employees over past years.
External Supply of qualified candidates refers to getting the required personnel from outside the
organization. This involves having a good knowledge about the supply conditions in different
occupations and awareness about the general business environment. The information about such
conditions and availability of personnel can be found in:
Monthly updates of national bank.
Publications of various associations.
Publications of various employment agencies.
Since ours is a new product, we would primarily be focusing on external sources to fill our personnel
needs. Also we would like to estimate the number of personnel required on the basis of ratio analysis. It
involves forecasting the employee numbers based on the ratio of some factor like sales volume to the
number of people required per unit of sales. Our product has sales of 620 ton.

Production Capacity
It refers to the volume of products which can be manufactured in a plant or factory with a given amount
of resources. Production capacity depends on the efficiency of machines and workforce. It is essential
that highly efficient processes should be put in place for the same.

Another important concept to consider while deciding on the production capacity is capacity utilization.
It gives a relationship between the actual production that happens in a plant with the total installed
capacity and potential production. For Green Tea HP, we would be targeting an actual production
capacity of around 650 ton in the first year. But we plan to have installed capacity around 1500 ton. We
would scale up the production in a phased manner.
Good production planning will help make better decisions in terms of sales, profit, expenses etc. To
calculate production capacity, we should consider various factors like number of facilities, number of
employees and equipment etc. Also number of employee required (discussed in previous section on
personnel planning) plays a crucial part in the same.
We need to determine the number of hours per week for employees. For our product, we assume an
industry standard of 40 hours per week. The time spent in breaks, lunch time etc would be deducted
from this time to calculate actual time spent on the production.
Once we have actual time spent on production and the number of employees employed, we can
calculate the actual production.
Actual Production = Actual hours spent in production * Number of Employees

Sources
Tea Processing Article Retrieved May 15, 2011, from Tea Manufacturing firm inputs
Website: http://www.enjoyingtea.com/teaprocessing1.html
Technology Trends in Tea Manufacturing Article Retrieved May 15, 2011, from Tea Manufacturing firm
inputs
Website: http://www.teauction.com/home/techtrend.asp
Frequently Asked Questions Retrieved May 15, 2011 from Green tea Hp
Website: www.greenteahp.tv
Green Tea. (n.d). Retrieved May 15, 2011, from www.centerimt.com
Website: http://www.centerimt.com/News/GreenTeaAssay_Detail.asp
UAE port Information Retrieved May 03,2011, Website: http://www.uae-shipping.net/forums/