TATA TEA

K.V.Meghanathan
Parth Shukla
Balchandra Tilve
Rahul Choudhary
Nitesh Kedia
TEA INDUSTRY IN INDIA
• COMPANY PROFILE

• TYPE PRIVATE
Founded:Calcutta, India (1964)
Headquarters: Calcutta, India
• Key people: Ratan Tata (Chairman)
• Products: Tea
• employees:59000(2006)
 Company profile

• Tata Tea Limited, also known as Tata-Tetley, is the

world's second largest manufacturer and distributor of tea
• The company has been the star performer in the global tea
industry in recent years.
• Tata Tea Limited owns several tea manufacturing
companies across the world including Good Earth Teas
and JEMČA, Czech Republic's leading tea company
• MARKET SHARE

• Total tea consumption is estimated at 650 million kg, of which

the share of packaged tea is 290 million kg, which is growing
at 1.7 per cent per annum.
Value Market Share

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0
HINDUSTAN LOCAL
TATA TEA
LEVER COMPANIES

Jul - Sept 2003 30.7 19.7 29.1

Oct Dec 2003 28.7 19.3 31.1
Jan - Mar 2004 28.6 19.0 32.0
Sept'04 29.3 19.7 29.9
 International market

• The Tata Tea group’s acquisitions since Tetley, its first mega
one in 2000 for $432million, was followed by four
acquisitions.
• The tea major has now acquired a 33% stake in South African
tea company, Joekels Tea Packers, through Tata Tea Tetley,
its subsidiary.
• The acquisition will also pave the way for Tata Tea to sell its
Tetley branded products in South Africa, Namibia, Botswana,
Lesotho and Swaziland through Joekels.
 Black Tea
Country Production (mn/kgs) Auction Prices (INR/kg)
January-August August
2004 2003 2004 2003

India 493.1 535.4 72.09 54.42

Sri Lanka 204.1 201.8 84.13 71.37

Kenya 207.4 175.1 72.66 68.94

B’Desh 29.8 31.0 51.69 53.14

Malawi 31.7 30.2 48.50 50.24

 a r k e t
B r a nd M
Lead
a r e %
Sh

10.4
8.8
7.6

MAT Mar'03 MAT Mar'04 Sept'04

 Market Performance
• US – improved volumes (up 12%) and net sales (up 3%) in
local currency.
• Canada sales in local currency flat to 2003/04, EBIT 13%
ahead of last year due to cost of sales and overhead savings
and some A&P phasing benefits
• Australia – Steady growth in volumes (up 7%) and sales (up
4%) further augmented by cost of sales and overhead savings
continue to deliver EBIT at record levels
• International Tea – volumes, net sales and EBIT all still ahead
of last year
STRENGTH:

• Tata Tea’s strength blooms on its own plantations: 56 tea

gardens in Assam, Kerala and Tamil Nadu. The crop at each of
these plantations imbibes the characteristics of the region
where it grows. In that respect, tea is much like wine. Having
plantations in varied agro-climatic zones enables Tata Tea to
cultivate distinct tealeaves.
Threat:
• While Tata Tea is the No 1 branded tea, there has been a
significant value erosion in the tea market, with regional
players offering mediocre products at low prices or with
attractive promotions
• Despite the fact that tea is the most traditional and affordable
beverage in India – and probably because of as well - it is
perceived as being old fashioned and less functional than some
substitute products.
Marketing plan & strategy

• Marketing plan & its strategies makes product race in

competitive situation and executes brand image, which gives
loyal customers to the company. It helps the product to make
its independent identity offer diverse brands after taking local
tastes into account. Our products vary in terms of blend,
pricing and packaging formats to cater to the unique needs of
each segment." strategy is to invest in long-term brand
building for sustained growth
• Strengthen our business in existing geographies
• Expansion into new geographies
• New product development and building business in
– Black Tea
– Fruit and Herbal Infusions
– Ready to Drink Teas
– Out of home
• Building operational capability to enable the commercial
business to achieve growth
• Management Strength
Competition:

• The competition Tata Tea is faced with operates on two fronts:

organized players like Hindustan Lever on the one hand and a
plethora of local and regional players on the other. The latter
category is able to flourish in a skewed cost and
manufacturing paradigm, making it serious cause for concern.
 Market segmentation:

• “It consists of a group of customer who share similar set of

wants ”

Geographically
• South India, southeast India, southwest India.

Social class:
• Working class, middle class, upper middle class
OBJECTIVES
Marketing objectives are to:
• Increase market share.
• Generate brand awareness within consumer target market and
business target market.
• The road ahead promises plenty. The goal is to move the brand
portfolio from its current 19 per cent value share to a 25 per
cent value share in the medium term
 Product:

• There are three national brands in the company’s basket, Tata

Tea, Tetley and Agni, and three regional brands, Kanan
Devan, Gemini and Chakra Gold. Apart from building and
strengthening brand imagery, the company has significantly
increased its focus on delighting the consumer through the
superiority of its product delivery.
 pricing
• The company is concentrating on building value around its
brands to distinguish it from competitors.
• The median price for a 250-gm pack in northern India, Tata
Tea’s main market, is approximately Rs 42.50
• Tata Tea plans to wean away these consumers through its
branding initiatives. On the basis of prices, the largest segment
of the packet tea market is economy at 61 per cent where the
average tea price is less than Rs 145 per kg; followed by the
popular segment where pricing is in the Rs 145-180 per kg
range and then the premium end beyond Rs 180 per kg.
 Distribution (place):

• Should be through best known established dealers, retailers.

The following distribution channel would be used for

distribution of the products in the neighboring states. For the
purpose of
– Physical flow of the product
– Information flow
– Payment flow
– Promotion flow
 DISTRIBUTION PLAN

MANUFACTURER

WHOLESALER

DEALER

RETAILER

CONSUMER
Promotion:

• Create an advertising campaign to build brand awareness and

differentiate products quality from competitors through
emphasizing trade-sales promotion to support distribution
strategy.
• Tata Tea’s brand-building initiatives are focused on taste,
quality and imagery
Positioning:

• Each brand endeavors to build a lasting relationship with the

buyer and is strongly positioned in its particular segment. Tata
Tea thrives on the ‘great leaves, great taste’ platform in the
popular category. In the premium segment, Tetley showcases
the finest international blend for discerning consumers. Agni,
in the economy segment, offers strength and a low price.