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Marketing Plan for Lipton Ice Tea

Date of Submission: 19-April,-2010

London College of Advanced Studies

SUBMITTED TO
Humayara Tarannum
Lecturer of
School of Business
London College of Advanced Studies

SUBMITTED BY
Shahadat Hossain
ID : 2595-10935

School of Business
London College of Advanced Studies
Acknowledgement:
At first we are grateful to our Almighty ALLAH for completing this assignment su
ccessfully within the given time period.
We want to thank Humayara Tarannum Honorable course teacher, School of Business,
London college of advanced studies, for her guidance, supervision & suggestion
throughout the study period of our assignment. Her continuous support and re-enf
orcement has encouraged our to do the study work properly.

As a leader I got some creative and helpful members in my group for assigning th
e assignment. I thank my all member.

Table of content
S.N Item Name
Page No
01. Executive Summary …….…………………………………………… 06
02. Introduction ………….……………………………………….. ……... 06
03. Limitations ……………………………………………..……………… 06
04. Theoretical Frame work and methodology………………………….. 06
05. Analysis and Interpretation………………………….……………….. 07
06. Customer Analysis …………………………………………………… 08
07. Brand Analysis and Positioning…………………………………….... 10
08. packaging strategy…………………………………………………….. 11
09. Marketing planning…………………………………………………… 12
10. Recommendations ……………………………………………………. 12
11. Conclusion……………….…………………………………………….. 13
12. Reference……………………………………………………………..... 13
EXECUTIVE SUMMARY:
Unilever Best foods, Lipton Iced Tea are great tasting and good for you because
it is rich in protective antioxidants. This is the perfect drink for your active
, healthy lifestyle. It’s available in plastic bottles so you can take it anywhere
! Try our Green Tea with Citrus…you have never tasted a delicious green tea like t
his before! Also available in Diet. USA and Shin Shii, Taiwan are competitors in
the rapidly growing iced-tea market with their brands Lipton (in alliance with
Pepsi) and Kai Shii respectively. Unilever has also introduced an instant hot-te
a can by the name of Brooke Bond’s PG Tips. Kai Shii is about to be launched in th
e US market. The following study evaluates various market segmentation strategie
s, potential consumer target segments, and factors to forecast demand that were
used or could have been used by these two companies.
INTRODUCTION:
The following report focuses on the growing canned iced-tea beverage market, wit
h an emphasis on the Western market. This development led to opportunities for U
nilever Best foods, USA (herein referred to as ‘Unilever’) and Shin Shii, Taiwan to
exploit them further through efficient marketing with their brands Lipton and Ka
i Shii respectively. A study was conducted to evaluate effective strategies for
market segmentation and identify suitable and potential markets for iced-tea man
ufacturers to enter. In addition, factors that could be used to forecast future
demand were described.
The main aims and objectives of this study are outlined as follows:
1) Understand what kind of markets drive a high demand for iced tea and the
reasons behind them.
2) Recommend market coverage strategies and market entry strategies for Uni
lever and Shin Shii respectively.
3) Recommend brand-positioning strategies for Lipton and Kai Shii and an al
ternative hot ready to drink tea beverage by Unilever.
Limitations:
The main reference (Kotler et al text, 2001) is slightly outdated, that may thus
fail to include changes in the company’s profile or business portfolio. For examp
le, Lipton’s alliance with Pepsi may no longer exist. Also, relatively lesser info
rmation could be obtained about Shin Shii, as it is still a very obscure and les
s known company internationally. Ref: Kotler et al text, 2001
Theoretical Framework and Methodology:
The analysis of this case study is based on the marketing theories of:
I) Strategic Planning with SWOT analysis
II) II) Marketing Planning
Both theories are described in the marketing textbook by Kotler et al and each c
ontain several other components that would be defined and discussed. Some additi
onal research was also carried out, especially pertaining to demand forecasting.
 Non-numerical data was largely sufficient to support or be used for recommendin
g marketing strategies except when market share had to be discussed.
(Ref: principal
of marketing text book by kotler 12th edition.)
ANALYSIS AND INTERPRETATION
Strategic Planning:
The fast moving consumer goods (FMCG) market is highly volatile and trends in ma
rket demand or supply oscillate frequently. In such circumstances, companies ent
ering this market must be clear of their objectives and purpose to ensure sustai
nability. For example, Unilever wants to “meet everyday needs of people everywhere…a
nd to respond creatively and competitively with branded products and services wh
ich raise the quality of life.” Once these are laid out, it is essential to do a S
WOT (strengths, weaknesses, opportunities and threats) analysis for the company
before attempting to plan marketing strategies and evaluating in detail factors
such as brand positioning.
Lipton Kai Shii
Strengths i) Already a market leader and a well-known and reputed brand.
ii) Extensive knowledge of local culture and tastes.
iii) Wider product range with technological superiority, e.g. Brooke Bond’s hot te
a can. i) Market leader in Taiwan with 70% market share in oolong sector.
ii) Extensive experience in successful advertising.
Weaknesses i) Having too many brand extensions can dilute and confuse consu
mer perception and give fresh and new competitors to seize market share.
i) Totally unknown to Western consumers.
ii) Limited experience of Western consumers
Opportunities i) Alliance with Pepsi to access massive distribution network. P
resence of big, well known partners drives demand further.
ii) Declining markets for other beverages such as soft drinks.
iii) Greater awareness of health benefits of tea. i) Introduce new type of
tea- oolong iced-tea. Create curiosity and be the first to bring it to mainstre
am.
ii) Declining markets for other beverages such as soft drinks.
iii) Greater awareness of health benefits of tea.
Threats i) Overcrowded and small market with about 200 other brands which might
cause significant demand reduction.
ii) Presence of other major players such as Coca-Cola and Nestle leading to toug
h competition. i) Major competition from market leader Lipton and other big man
ufacturers.
ii) Prospect of rejection in finding distribution partner or retailer unwilling
to take on new product
Table 1- SWOT analysis of Lipton and Kai Shii

Customer Analysis:
There are two major target markets for ready-to-drink ice tea. One group is the
consumers on the go. These are the employees, students, and other consumers who
lead a busy
life style. The hectic American lifestyle demands for optimize productivity with
lesser time consumption.
Thus, there is a need for products that are accessible and readily available.
Convenience has dominated the market, particularly the food and beverage industr
y.
The other group is made up of health conscious consumers, specifically the baby
boomers
who patronize anything healthy. The positive reviews as well as the studies on t
he benefits of tea
drinking have stirred an interest in tea drinking.
Representing about 10 percent of the world market for tea , Lipton ice
tea is poised to improve its customer base through a joint agreement with PepsiC
o and
aggressive marketing strategy.
Recent report that the main factor for the improving market performance
of Lipton ice tea is its health benefits. Consumers believe that tea is very goo
d for the body; thus,
it is more logical to drink more tea and less soda pop and other drinks. Consume
rs drink Lipton
tea because of its beneficial effects to one’s health. Consumers consider drinking
Lipton as a
healthy habit. The 100 percent Natural Tea and 150 mg of protective natural anti
oxidants has
made Lipton tea a major participant in the global tea market.
“Many tea drinkers choose Lipton because it is really inexpensive and you can get
it just
about anywhere. It is surprising that more people do not drink tea, as they woul
d longer, happier
and healthier lives if they did”
Furthermore, some customers think that taking anti-oxidants are healthy, thus, c
ustomers
drink a couple of gallons per week: “Tea makes you look younger too and gives you
energy as
well. You know it also costs a lot less to drink tea too, for 100 bags at $2.50
lasts you about 3-
weeks. 2-quarts per day are possible when it is really hot out, of course it var
ies with the drinker.
Recognizing that majority of Lipton ice tea’s consumers are the health-conscious a
nd on the-
go drinkers, Lipton continues to develop its product lines to make it more conve
nient,
accessible and health-appealing to consumers.
Ref: www.advanceessays.com/samples/Marketing_Plan

Brand Analysis and Positioning:

Lipton ice tea is produced to make it “great tasting and good for [consumers] beca
use it is
rich in protective antioxidants. Lipton ice tea is marketed globally as “the
perfect drink for active, healthy lifestyle” It is available in 16 oz plastic bot
tles
with select flavors sold in six-pack cases. Flavors available are:
Iced tea Sweetened - Lightly sweetened iced tea
Iced tea Unsweetened - Tea with no sugar and no added flavors
Iced tea with Lemon - Sweetened iced tea with a twist of citrus flavor
Iced tea with Raspberry - Sweetened iced tea with raspberry flavor
Iced tea with peach - Sweetened iced tea with peach flavor
Iced tea Diet Sweet Tea - Lightly sweetened with Splendid and no calories
Iced tea Diet Lemon - Lightly sweetened with a hint of lemon
Iced tea Extra Sweet - Very sweet iced tea, marketed as "Southern Style" in some
areas
Half & Half - Half sweetened ice tea and half lemonade
Diet green tea with Mixed Berry - Mellow tea diet and lightly flavored with mixe
d berry
Ref: Wikipedia 2009; Unilever 2009 ,
www.docstoc.com/.../A-Marketing-Plan-for-Lipton-Ice-Tea-Institutional-Affiliatio
n/

The packaging strategy:

The packaging and marketing strategy for Lipton ice tea is a reflection of Unile
ver’s
thrust for consumer welfare and sustainable development. To meet the growing dem
and for ice
tea, Lipton continues to develop new products through its research and developme
nt department.
New flavors are being added to cater to changing and adventurous tastes of consu
mers.
More importantly, the Unilever-PepsiCo ensures that Lipton ice tea continues to
expand
its niche in the global market. According to Patrick Cesar, director of Unilever
Foods:
We [Unilever] have a strong presence in the developing and emerging markets yet
there
is plenty of ‘white space to move into. These markets are the next in our planned
rollout
and we see Pepsi as the best partner to help us achieve this. This new joint ven
ture marks
a truly significant step in the expansion of the brand, bringing it within the r
each of many millions of new consumers.
Ref: Unilever PepsiCo” 2009). http://www.google.co.uk/search?hl=en&q=www.uniliver+
new+marketing+plan&start=10&sa=N
.

Marketing Planning:
The first step in marketing planning is to determine what kind of factors or ba
ses are to be used to segment the market. Segmentation includes dividing buyers
into distinct groups, each with different needs, characteristics or behavior, wh
o might require separate products or marketing mixes. The iced-tea market also h
as several groups or segments where consumers perceive or buy a product in a sim
ilar way in each of these segments.
Their bases can be classified as follows:
I) Behavioral- consumers seeking convenient and hassle free refreshments.
II) Demographic- age groups.
III) Geographic- urban centers, city suburbs, villages and towns or all mentione
d.
Price cannot be considered a major factor influencing buyer perception as canned
iced-teas are more or less equally priced with similar products such as soft dr
inks or iced coffee. However, pricing amongst competitors in the same product ca
tegory plays a vital role.
The next step involves targeting specific segments with potential for the compan
y in which the company has a differential advantage over its competitors. The ch
oice of market segments should enable the company to generate the greatest custo
mer value and sustain it over time. The choice of segments also varies according
to its size and the resources it has. For example, Shin Shii, with lesser resou
rces might want to target a few segments initially in contrast to Unilever that
would want to cover a bigger market by targeting several segments.
Ref: http://www.liptont.com/our_products/iced_tea/
Recommendations:
The following lists the recommendations for Lipton and Pepsi with regard to:
1.Market coverage strategy:
As Lipton and Pepsi are already well established across several segments, they s
hould use an undifferentiated marketing strategy spanning the entire market. As
the number of competitors exploiting the demands of each segment increases, it i
s essential to remain clearly ahead in the consumer’s mind. This can be achieved b
y increasing visibility across other segments such as tourist places. Pepsi’s wide
distribution network which already makes Pepsi cola widely available should giv
e Lipton iced-teas the same level of importance, and on the grounds of both Lipt
on’s and Pepsi’s reputation, demand from retailers appropriate type of shelf space,
for example at the eye level of the consumer. This is because iced-teas are incr
easingly becoming ‘impulse’ goods as their demand increases. This implies that consu
mers postpone their decision making process until they are about to buy the prod
uct. In such cases, the first popular product they see that is neatly shelved wo
uld most often create a want for that product itself shutting out all other infl
uential input.
2.Brand positioning of Lipton iced-teas:
As more segments are targeted, the product should offer greater flexibility and
choice to cater to a wide range within each segment. For example, it could o
ffer different types of packaging, and in different quantity (volume) with diffe
rent prices. This could give students amongst others an advantage in choosing th
e same product at a lower price on a regular basis.
3.Brand positioning of Brooke Bond canned teas:
Brooke Bond canned teas, boasting of a revolutionary new concept of ready to dri
nk hot tea in a can, should position themselves as being a natural extension to
the company’s policy of providing convenience and greater choice to the consumer.
Being the first to develop and perhaps patent this technology, it could charge h
igher prices, as it is an up market product.
However, as it requires the use of heating cabinets, it cannot be widely accessi
ble outdoors. It is essential to note that the two brands are marketed separatel
y even though some of their target groups of consumers may overlap, as many peop
le are unaware that these brands belong to the same company, Unilever.
Ref: www.advanceessays.com/samples/Marketing_Plan
CONCLUSION:
As Lipton and Kai Shii both serve and cater to the same market, they use similar
marketing strategies but with different approaches to achieve their company’s obj
ectives. Both companies differ largely in size in terms of financial and human r
esource capital. This affects the way they implement their strategies. Lipton, b
eing a global brand has a slight edge in terms of expertise in the tastes and cu
lture of its target group of consumers. It also has wider product range and tech
nological superiority and is planning to launch a radical new product- Brooke Bo
nd’s hot tea can. However, although Shin Shii would be a new player with Kai Shii
in the American market with no international experience, Unilever should be wary
of its past achievements of revolutionizing a new type of product very successf
ully in the Taiwanese market. Despite successfully facing domestic competitors i
n the overcrowded iced-tea market, it might want to review its marketing policy
to be better prepared to face a small but unpredictable competitor. Both compani
es can look forward to competition in an encouraging and growing market with dem
and expected to rise steadily in the immediate long run.
Reference:
The main reference for this report was Chapter 3 of the textbook ‘Principles of Ma
rketing’ by Kotler et al.
Principal of marketing text book by kotler 12th edition.)
Kotler et al text, 2001
Unilever PepsiCo” 2009).
www.advanceessays.com/samples/Marketing_Plan
http://www.liptont.com/our_products/iced_tea/
http://www.google.co.uk/search?hl=en&q=www.uniliver+new+marketing+plan&start=10&
sa=N
www.docstoc.com/.../A-Marketing-Plan-for-Lipton-Ice-Tea-Institutional-Affiliatio
n/