ASSIGNMENT: NUMI ORGANIC TEAS MARKET SEGMENTATION ANALYSIS

ATENEO DE DAVAO UNIVERSITY

SCHOOL OF BUSINESS AND GOVERNANCE
MARKETING DEPARTMENT
In Partial Fulfillment
of the Requirement in
MKTG 321 Strategic Marketing Management
A.Y. 2016 - 2017
Submitted by:
Rexor L. Amancio
Frances Coreen Shane A. Ostan
Submitted to:
Maam Donna Vida Abrina

December 6, 2016

Questions:
1.
2.
3.
4.
5.

What market is Numi Tea serving?

Can Numi Tea still do market penetration?
How is Numi Tea segmenting its market?
What is Numi Teas basis of segmentation? (Explain)
What new segmentation strategy can be effective for Numi Tea?

______________________________________________________________________

Numi Organic Tea is a privately-owned social enterprise based in Oakland, California

and is known for its assortment of organic and fair trade certified teas and herbal
"teasans". The sibling founders Ahmed and Reem Rahim named the company "Numi"
from the Arabic term for citrus, and at the same time, the Middle Eastern dried lime tea
they drank in Iraq as kids.
Numi inspires well-being of mind, body and spirit through the simple art of tea. It is
rooted in the principle of creating a healthful product that nurtures people and honors
the planet. They strive to foster a healthy, thriving global community while bringing their
customers the purest, best-tasting organic tea.
According to Jen Mullin, Vice President of Numi Organic Tea Marketing, their company
is made out of the youth. She thinks that Numi consumers would be as young as their
employees. However in the quantitative data theyve gathered, the age of their
consumers came out older than expected.
A Numi consumer, according to Mullin, is generally a female, educated (in college or
having a college degree), loves tea to the point of buying two to three boxes a month,
predominantly drinks green tea, and interested in organic stuff. With this description,
one can tell that Numi Organic Tea follows a post-hoc segmentation pattern since they
base their groupings on their research findings, mainly using demographic
segmentation.
Some common bases of demographic segmentation are age, gender, income and
family lifestyle (Lamb et al., 2014). Now that Numi knows its consumers based on
research findings, it targets selling mainly to women, particularly in college with the
attributes mentioned. Through research and studying of demographics, the Numi

Marketing Team figures out whom to target since demographic information is widely
available and often related to consumers buying and consuming behavior (Lamb et
al.,2014). This allows the team to be aware of whom is purchasing what and how often
they purchase the product. Also, the information allows them to target the areas or
place that these particular consumers buy from. For instance, if demographic
information tells me that a woman in her late 20s who attends school buys tea often,
then one would know that among the target areas could be a college campus.
As mentioned, Mullin included eco-moms to be part of the customer list. By
demographic segmentation, she was able to look at consumers that purchase most tea.
By knowing who the demographic is for their products, the marketing team can
determine not only how to draw in their usual demographics but also in trying to reach
out to other types of consumers outside their demographics which led them to sampling.
By offering the free samples to local businesses as well as to consumers instead of
focusing on traditional marketing methods such as print, TV, and advertising, they were
able to determine those that were interested in the products since people become more
interested whenever they have first-hand experience in tasting the tea. One tastes the
tea and it will have an effect because it tastes good. And the next time one goes to the
market, the product will be actively sought out.
Numi uses samples, believing that the actual taste of the tea will sell the product. They
have samplings in places like the healthy grocery stores, colleges and universities,
spas, luxury hotels, restaurants, and even coffeeshops and they were able to expose
themselves to different consumers and increase their consumer base. They were also
able to tap consumers who do not have luxurious lives by offering them teas at big
chain stores such as Target or Costco, allowing them to reach customers on a tight
budget.
Product sampling may be expensive, Mullin claims, but its now blooming in the
marketing industry so people would quote per piece for a gift bag, quote a production
fee per sample or even a sponsorship fee.

According to Ahmed Rahim, Co-founder & CEO of Numi Organic Tea, mass market
consumers in grocery stores, websites, and big distributions gave surprising demands
and interest for high quality organic sustainable product. Numi has then become a
leader in the US in organic and fair traded tea product. There was so much demand
even from the mass market world.
Most of the time, even if the product has not been heard of, consumers are still curious,
wanting to try the product. Spas are basically places of relaxation and this organic tea
represents a sense of this tranquility since tea has always been equated as a drink to
ease and calm the mind. Their targeted consumer wants something new and organic.
Moreover, the company joins in promoting greater causes such as the Cancer Walk and
sends out free samples of tea to those consumers who are interested in the same
cause.
If one is treated good, good will be gotten in return. And so building a relationship with
the consumers lets them know that the company actually cares about their wants and
interests and theyre not just in it for the money. As for the Numi Team, they donate for
free but also pay for some sampling, as well. Their brand is one thats sought after so
they can donate samples for free, paying for some sampling programs such as an Earth
Day when they gave every passenger a gift basket containing all organic and fair traded
goods. Another was when they gave samples of the goodie bags to families who are
travelling in airlines.
To add to their list, the company tries to reach out to consumers who are college
students and would want to cultivate them for the long-run. Since they believe that the
US is still a coffee drinking community, they want to convince more of the young
generation to convert themselves into tea drinkers. Tea is found to be a natural choice
for them. And if its cold in their vicinity and theyre seeking for a warm beverage, tea is
also their answer. Tea is a good beverage that they can keep drinking and drinking
without giving bad effects unlike alcohol. College students are leaning towards organics
and are interested in fair trade. They are the people who enjoy tea. The company hopes
to have them as tea drinkers throughout their lives.

If Numi wants to really expand their horizons on their customers, they could apply social
segmentation as an approach since this considers the cultures, subcultures, religion,
race, or nationality of a consumer. By knowing these factors, maybe they can expand
their product lines to cater the preferences of the people who are grouped, for example,
in a certain nationality. They could then create new products suitable to their tastes and
thus expanding their market, considering they have already built up their premium brand
name in the tea industry. The Numi Organic Tea is already a leader in the US; they
could be a world-wide leader in tea selling as well.

Sources:
http://www.numitea.com/
https://prezi.com/oj-sp5zb5tki/numi-tea-marketing-management/