Marketing Report

(Phase 2)

Introduction of Wagh Bakri tea in Tier 2 cities

Drinking a daily cup of tea will surely

starve the apothecary- Chinese Proverb

A Report by Team 7
Arjun Aathish Anu Amruth
Komal Goel Paras Kamra
Shreyansh Sethiya Swati
Shrivastav
 Marketing Report

Contents
PAGE NO:

INTRODUCTION TO PHASE 2 2

TEA MARKET IN INDIA 3

COMPANY PROFILE & JOURNEY 4-5

SALES & DSTRIBUTION 5-6

QUALITY CERTIFICATIONS 8

KEY PLAYERS/COMPETITORS 9

CUSTOMER TYPES 10

STP PROCESS 13-15

PORTERS 5 FORCES WRT TEA 16

SWOT ANALYSIS 17

4 PS OF MARKETING APPLICATION 18-19

CUSTOMER DECISION PROCESS 20-21

MARKETING AND SALES TECHNIQUES 22-24

FUTURE PLANS FOR GROWTH IN KEY MARKET AND EXPANSION 25

CONCLUSION 27

BIBLIOGRAPHY 28

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Phase 2

This report, done by Team 7, section C, and is about the Tea Dust market in India. The aim of the report
is to discuss the market strategy for a tea dust product. (WAGH BAKRI).

Wagh Bakri, the 3rd largest tea producer in India, has been taken up and the market strategy aims at
increasing its presence in the growing regions of India at its Tier 2 cities.

The methodology involved predominant secondary research and a few inputs from primary research.
While the data as such have not been reproduced, it has been used to prepare the market strategy for
Wagh Bakri.

WAGH BAKRI
MOTIVE
Location The Marketing plan involves segmenting the
Ahmedabad, India rising middle-income class of Tier 2 cities in
Revenue regions such as Uttar Pradesh, Madhya
$600m Pradesh, Chattisgarh, Bihar and West Bengal.
Employees
3,000 For introducing Wagh Bakris line of tea,
single segment concentration market
Company
Private targeting methodology is adopted.

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Tea Market in India

Hot drinks manufacturers in India are faced with a highly mature market with long
established traditions and product preferences among consumers. In total volume sales terms, India was
the largest market for tea in the world and the fifth largest market for other hot drinks in 2010. As tea
and coffee already have a very high penetration in India, companies have sought to increase their market
share by developing innovative distribution strategies to reach new consumers. For packaged hot drinks
players, the consumers of unpackaged tea and coffee in rural areas represent a potential new consumer
base .While conventional distribution channels such as kiranas (small grocery retailers) and
supermarkets account for over 90% of the sales of tea and coffee, companies continue to experiment
with new channels to expand their consumer base into less accessible rural areas and consumer groups
consisting of affluent youth. With urban markets approaching saturation, national companies
increasingly seek to expand their distribution footprint to rural regions while regional players are making
an effort to enter neighboring regions.

The Indian tea market is approximately 14000Cr in value.

The industry is growing at 2% CAGR
The outlook for the industry is positive in the semi-urban and urban areas and sluggish in the
rural areas
The growing middle-class segment is looking forward to reliable products apart from variety
Younger generations are look-out for new ideas and fads.
There is a growing awareness about organic farming and products, and there is a growing
willingness in people to pay for this segment
With more than 700 small tea manufacturers, the product space has become crowded with little
or no differentiation in terms of product quality.
Since independence tea production has grown over 250%, while land area has just grown by
40%.
There has been a considerable increase in export too in the past few years. Total net foreign
exchange earned per annum is around Rs. 1847 crores.
The labour intensive tea industry directly employs over 1.1 million workers and generates
income for another 10 million people approximately. Women constitute 50% of the workforce.

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Company Profile
Wagh Bakri is a family owned tea company in Gujarat, India. Sir Narandas Desai, the founder,
believed that the Company is not just about tea, but more a confluence of his values and beliefs of co-
existence and harmony and of the strong and the meek. The same beliefs are reflected in Corporate
Philosophy even today.

Build long lasting relationships through trust and fair play towards all associates.
To continue to be result oriented and contribute positively.
Be progressive and lead from the front. Change with the times.
Be s socially responsible. Return to the society a share of the gains from commercial enterprise.
Sir Narandas Desai started Wagh bakri Tea Company in the year 1892, which then was represented
by small company retail shop at kalupur Ahmadabad, Gujarat. Since then the growth of the endeavor has
been phenomenal and presently Wagh bakri Tea Company has an employee base of more than 400
professional managers and skilled personals with ever increasing space for more, to tend to the
expanding group enterprise in India and abroad.

Wagh bakri tea house markets various tea brands in loose leaf cartons and tea bags for tea lovers all over
the globe the finest certified black teas from Darjeeling tea estates, Assam and Nilgiri. The company
sells organic black and green tea for the health conscious.

The production base is at Dholka (Dist. Ahmedabad) in a impressive spread of 14 acres with a modern
manufacturing plant and state of art production and packaging unit that conforms to International norms
in producing, blending and packaging of the finest tea leaf for worldwide consumption.

Wagh Bakri Tea Group, India largest privately held packet tea company, launches its worlds latest and
Indias first staple free `Hygienic Tea Bags in Middle East at the Gulf Food 2009.

Journey till Today...

Year 1892 Procurement of tea estate
Year 1919 - Establishment of business in Gujarat, namely The Gujarat Tea Depot Co. with first
retail outlet for wholesale teas
Year 1925 Wagh Bakri brand was launched
Year 1944 The Good Morning brand of premium blended tea leaf was introduced
Year 1980 The group established Gujarat Tea Processors & Packers Limited to meet a growing
demand for quality blends of branded teas and with the aim of selling quality tea products
Year 1986 The Standard Tea Processing Co. Limited was established with a view to avail the benefits
of mechanized operations and meet with demands for bulk teas
Year 1989 Year 1994 Darjeeling tea and Mili tea were launched

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Year 1998 Yea4 1999 The Wagh Bakri brand launched in Rajasthan and Madhya Pradesh.
Year 2004 Company received ISO: 9001: 2000 and HACCP Certification.
Year 2006 Tea Processing Co. Ltd. merged into Gujarat Tea Processors & Packers Ltd.
Year 2007 Company started office at Mumbai (India) to expand its operations

Company acquired the land admeasuring 25,748 sq. Meters adjoining to existing Dholka factory and
also 12,595 sq. meters at village Tundel, Taluka Nadiad, Gujarat for the purpose of
expansion / setting up of Tea Blending factory and storage facilities.

Opened a Wagh Bakri Tea Lounge at Ville Parle [East], Mumbai, which serves Ice Tea and all premium
varieties of Tea manufactured / marketed by Wagh Bakri Tea Group along with snacks.

Market Presence

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Wagh Bakri, in spite of being the third largest player in the market, commands only 7% of the market
share. With an ambitious target of 12% or more market share, it has to tap into the fastest growing share
of customers in India for the next few years.

Amritsar, Baddi, Gurgaon, Jaipur, Katra, Manesar, Aurangabad, Bhubaneswar are some of the cities.

"If we have to talk about Vizag and Coimbatore their infrastructure is no less than Tier I cities. With
good hotels, good roads, good water, people are now moving to these places where they can get
everything"

A change in real estate trends is noticed in cities like Jaipur, Chandigarh, Indore, Nasik etc. Many like
Mohali and Agra are being considered as a favorite destination for global investors.

Media consumption has also matured in these markets, and penetration of mediums like print, DTH and
radio can even be higher than in metros.

Many companies today continue to define their market, marketing and investment plans through a
narrow lens focused on just the top handful of cities. But to fully realize its growth potential, India Inc.
would be well-served to evaluate these emerging markets. Through our report, we aim to understand
this opportunity across Indias fifty largest consumption hubs, and map how companies today are
approaching individual hotspots. EY report on Indias growth paradigm: how markets beyond metros
have transformed.

Sales and Distribution Network

A need was felt in the last 70s by Wagh Bakri group to make available fresh tea in convenient packs
to the discerning consumers of Gujarat, as a result,GTPPL as a part of wagh bakri group was founded in
1980 with a objective to market sealed packet tea in Gujarat. Since then GTPPL has satisfied the need of
more and more customers over a period of years due to its unmatched consistency in quality and strong
distribution system. Total average sale of GTPPL is approx. 19.5 lack kgs per month. Turnover is likely
to exceed 350 crs this yr. The company is operating in four states across India i.e. Gujarat, Rajasthan,
Madhya Pradesh and Maharashtra .

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Operational Procedure

Order

A scheduled day in a week is fixed to receive the orders from all the 4 states, subsequently order-
wise production takes place at DHOLKA factory

Dispatch

The company delivers material on fixed day in a week across all 4 states

Distribution System

GTPPL is its product available to its consumers through distribution system consisting of dealers and
retailers. The total number of dealers in Gujarat is 185 and the numbers of retailers are about 55,000.
Overall GTPPL enjoys approx. 65% market share in Gujarat.

GUJARAT:

G.T.P.P.L

DIRECT DESPATCH AHMEDABAD LOCAL SUPERSTOCKIST

TO DISTRIBUTOR DISTRIBUTORS

TRADE TRADE TRADE

In Rajasthan, the company launches product first in Udaipur section and it was launched subsequently in
Jodhpur / Jaipur sections. Distribution section was much similar to Gujarat. And in Madhya Pradesh the
company has super stockiest one at Indore and another at Jabalpur.

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Quality Certifications:
Lacon GMBH, Germany

Certified Organic as per NPOP, Council regulation EC and Swiss Organic FarmingOrdinance
Certified 100 % Organic as per the NOP standards of the USDA
Intertek Semko Certification AB-KISTA, Stockholm, Sweden.

Quality Management System

ISO 9001:2008,Quality Management System, Swedac Certification

Food Safety Management System.

HACCP - Principles of Food Hygiene, by Intertek

ISO 22000:2005 - Food Safety Management System, Swedac Certification

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Key Players/Competitors

Products and Services

Products Services

Wagh Bakri Tea Specialized Retail Outlets

Good Morning Premium Tea Tea Lounge

Mili Tea Online Portal (overseas customers)

Wagh Bakri Perfect

Darjeeling Tea

Organic Tea Gift Packs

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Customer Analysis

DIRECT COSTUMERS:

Super markets
Retail chain (Brick and mortar)
E-commerce companies
Authorized vendors in IRCTC
HTS (Hot Tea Shops)

INDIRECT CUSTOMERS:

Adults
Restaurant and tea shop customers
Health conscious people

MACRO LEVEL CUSTOMERS:

Manufacturers
Wholesaler
Retailers
Corporates
Younger generation
Families

MICRO LEVEL COSTUMERS:

Employees of the organization

Shop owners
Adults

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Marketing Strategy
Approach:

1. Extension of Wagh Bakri Lounges to Tier 2 cities.

2. Promote Wagh Bhakri through the Chai Baithak stores.

3. Promote sale through Distributors and Retailers.

Advertisements focusing on the importance of spending time with family and friends, and how Wagh
Bakri helps people get together. It should show that the brand cares for human relationships. Targeting
age groups between 20 and 40.

2 Video advertisements for Singles, friends (1 comprising male lead and 1 comprising female
lead)
1 Advertisement for the family consumers

Wagh Bakri Lounges

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Each Wagh Bakris Chai Baithak could be modeled on the following:

The heritage of the city and its people.

Present itself as a place for enjoying private meetings as well as noisy get together.

It should stand testament to what the name stands for bridging the difference between different
classes of people.

The shop design should encourage buyers who wish to have a quick chai, apart from the general
hangout area.

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Targeting

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Positioning

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Porters Five Forces In Tea Market

Threat of buyers
Threat of new
growing bargaining
entrants power
FDI Other options
Untapped available
rural markets Product
differentiation
Large number of
Threat of intense consumers
segment rivalry
Taj Mahal
Red Label
Special
Unbranded
Tea Threat of suppliers
Threat of growing bargaining
substitutable power
products Large
Coffee number of
Aerated drinks producers
Energy drinks Low
switching

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SWOT Analysis

Strength:
The company has an advantage of its marketing research.

The company has the quality consistency in their products and they are very keen about the quality of
their product.

The company has a variety of quality product according to the taste of consumers.

The company has a great advantage of their goodwill in the market.

Weaknesses:
Though the company has third position in the market, yet they have not captured the all over world
market.

One of the weaknesses of the company is oolong tea, it is mainly exported but it is not sold in
domestic market even if may captured a good market share.

It is tough to sell tea in those regions were mainly people are non-tea drinkers.

Opportunities:
The company has good opportunities to grow in the market by introducing more variety of products
according to preferred tastes of consumers.

Threats:
The company faces competitions by HUL who has 10% growth in market.

The company faces severe completion with regional players in some regions

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The 4 Ps:

Price: The price is the amount a customer pays for a product. It is determined by number of factors
including market share, competition, material costs, product identity and the customers perceived value
of the product. The business may increase or decrease the product if other stores have the same product.

Follows high-medium price strategy and offers more value for it.
Follows a Going Rate Pricing strategy.
Besides taking the competition into account, Green Tea does cost plus pricing
It provides consumers a reasonable price according to its quality.

Place: Place represents the location where a product can be purchase. It is often referred as the
distribution channel. It can include any physical store as well as virtual stores on internet.

In the beginning the company sole aim was to capture the tea market of Gujrat, as they were
already in tea business here, only and then strategically build their network to other cities of
India.
Green Tea has a distribution network spread across India, from Mumbai to Pune with over 500
distributors.
It also distributes its product worldwide.

Promotion: Promotion represents all of the communications that a marketer may use in the
marketplace. Promotion has four distinct elements: Advertising, Public relations, Word of mouth and
Point of sale. A certain amount of crossover occurs when promotion uses the four principle elements
together, which is common in the film promotion.

Advertising covers any communication that is paid for, from television and cinema commercials, radio
and internet adverts through print media and billboards. One of the most notable means of promotion
today is the promotional product, as in useful items distributed to targeted audiences with no obligations
attached. This category has growth each year for the past decade while most other forms have suffered.
It is only form of advertising that target all five senses and has the recipient thanking the giver.

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Public relations are where the communication is not directly paid for and includes press releases,
sponsorship deals, exhibitions, conferences, seminars or trade fairs and events.

Word mouth is any apparently informal communication about the product by ordinary individuals,
satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often
plays an important role in word of mouth and public relations.

Advance campaign to build awareness and differentiated products quality from its competitors.

Develop Awareness Among People.

Build Loyal Customer Base.

Product: An object or a service that is mass produced or manufactured on a large scale with a specific
volume or units. A typical example of a mass produced service is the hotel industry. A less obvious but
ubiquitous mass produced service is a computer operating system. Typical examples of a mass produced
objects are the motor car and the disposable razor.

Wagh Bakri will be a high quality product offered as specially blended herbs tea powder.

Contents of the WAGH BAKRI will be in 40 bags, 80 bags, 150 bags, 250 bags (Family pack)

The amount of bags refers to different target groups.40 bags for singles, 80 bags for couples, 150
bags and 250 bags are Family Packs.

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Roles and Stages in Consumer Decision Process for B2C

NEED

Refreshment. Meeting,
Meeting Complement for Snacks
Complement for Snacks

INFORMATION GATHERING/SEARCH
Friends, Family
Advertisements and Newspaper, Radio, Members, Co Workers
Own Experience
Sales people Magazine and Other
Acquaintances

EVALUATION OF ALTERNATIVES

Tata Tea Brooke Bond Tetley Others

PURCHASE OF PRODUCT/SERVICE

Based on Price Based on Availability Based on Tastes & Preferences

POST PURCHASE EVALUATION

Customer Satisfaction from Wagh Bakri

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Roles and Stages in Consumer Decision Process for B2B

NEED

To Capture market by selling something or running Retail business

INFORMATION GATHERING/SEARCH

Customers who bought Sales

Competitors Wholesalers
from others Manager/Distributors

EVALUATION OF ALTERNATIVES

Whether this product Whether its sales

Future benefits like
would be profitable or volumes would be larger Inventory Overload
trips, bonus, etc
not. or not

PURCHASE OF PRODUCT/SERVICE

Whether it would be sold in

Trade off of other products Trying New product
Seller's area

POST PURCHASE EVALUATION

High Demand from Retailers or

Customer Satisfaction Whether Sales are made on Time
Customers

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Marketing And Sales Techniques

Brand Evolution
Wagh bakri has categorized the organic teas, all other form of double and single chamber tea
bags, Darjeeling teas and Nilgri teas as Specialty Teas and have started various forms of sales
promotion. This has operationalised our vision for catering to newer generation which
traditionally was never our customers. Going ahead in this segment we have launched last year
wagh bakri organic combo pack which has all the variable of the organic format with recipe
booklet, which has helped our customer to understand the teas better.

Tea Lounge
Wagh Bakri to go one step forward and entered in the service arena of serving all forms of teas
from single platform which we have discovered as Tea Lounge. They have opened one tea
lounge in Mumbai in November 07 and have received an over whelming response and hence we
are looking forward to go ahead with this idea on pan India basis.

Vending Operations
Vending operation is also a newer version of having hot tea. There are lots of opportunities and
the company desires to cater to this business on pan India basis.

Institutional Business
The company is expanding wings, by tapping huge potential i.e. institution business. In this
process the company is appointing distributors and setting up distribution networks. The
company has already started business with railways, authorized vendors in IRCTC, organized
segments (i.e. corporate) and also tapped HTS (Hot Tea Shops) Highway Restaurants with
organized efforts & now we are in process of streamlining it.

Employee Focus
As Wagh Bakri represents traditional culture and believes in close-tie values, it treats the
employees as extended family members. Employees are evaluated annually and appreciated
according to their performance. Annual Days are held for employees to loosen up, and enjoy
being part of the company.
Employees can walk up to their seniors to give their feedbacks about the operations or to
generate new ideas. The employee can discuss the problems faced to the immediate seniors, if
not satisfied can move to a step above.

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Marketing Initiatives
Wagh Bakri has gone to each and every customer be it an upper end customer or the middle or
lower level of customer in terms of socio economic class with different forms & mediums of
communication.

Advertising & Publishing Agency

The company has hired nationally renowned agency for their different brands. Triton
Communication, Hanmer MS & L & Percept Advertising are working on creative part to
help them communicate to their TG i.e. their target group. A publishing agency is hired
Publicity Parlour for publishing creative made by the agencies in print as well as in electronic
medium.

Marketing Research
Wagh Bakri always had belief in marketing research, which had been carried forward by
purchasing syndicated marketing research report ( lastly purchased this type of report from A C
Nielson) & conduct market research by marketing companies.

Electronic Medium
Last year they had presence on number of channels like colors, star Gold, Aaj Tak, Star One,
Star News, NDTV Imagine, Set Max, Sahara One, Zee etc. The plan behind broadcasting on
these channels is to communicate the brand value to a particular customer, who will recall their
already known brand like Wagh Bakri, Wagh bakri Perfect or Milli. The company wants to
break periphery of four states i.e. MP, Rajasthan, Gujarat, & Maharashtra to communicate to
their future customers across India. In short they want to spread in PAN India where their
distribution has still not reached and this is the best possible way to reach their prospective
customers and make them aware about the brand.

Print Medium
This is the medium which they think is the second most effective medium after broadcasting as
they can communicate to their TG. This medium is being used for two main agendas i.e to
communicate for the ongoing consumer promotion schemes & for brand building activity. They
have good presence in this medium be it local newspaper or national newspapers.

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Internet Selling
Wagh bakri is now catering to customers seeking tea online. Their online selling portal have all
the enmities required for the online selling portal. This initiative has kept them on global
platform. www.premiumtea.com and www.buytea.com are the two websites which are catering
to tea lovers seeking packed tea over the net.

Organized Retail Network

Wagh Bakri have accepted the importance new form of retailing i.e organized retail network.
This retail network is growing up rapidly and would start catering many customers who are used
to go to next door retailing. They have started the activity of gondola displays, floors stack
displays and also used promoters at the select outlets where they can interact with the end
customers.

Customer & Trade Promotion (Cp & Tp)

Customer promotion is given for two reasons; one is to motivate a customer to change and
second is appreciating customers choice to continue using the particular product. They are also
providing CP on their selected SKU for the same reason.
Trade promotion is being given traditionally as a helping hand for the sale of a particular product
& to get the self-space in a particular retail outlet. It is like getting a license from a retailer to
enter their shop. But at the end of the day CP & TP are given to improve the Top line i.e Sales

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Future Plans For Growth In Key Market And Expansion

Newer Markets and expansion in the existing market:-

The company has formulated and implemented our strategy of going state by state as far as launching of
the product & setting up the distribution network is concerned. In the last financial year the company
have taken aggressive steps to penetrate the entire Maharashtra market which they are aiming by 2010.

Mumbai:
Launching of mili dust 5kg bag & Wagh Bakri 1kg pouch in the last 6 months

The company focuses on dust skus which is well accepted and very much appreciated.

The company launched the product in very strong local dominated markets like Jalna(dominated
by vikram tea) and Kolhapur(dominated by hp tea) and got reasonably good response

Going ahead the company is planning to enter other tier I & II cities of northern &Southern India and
have launched the product in goa and Delhi.

Delhi:
The company has launched Wagh Bakri in Delhi, Noida, Ghaziabad,

Gurgaon and Faridabad and in near future mili launch is planned

The company has used Press, Radio and Television to create awareness of brand

Exports
Wagh bakri wants to grow their export division by catering all Indians and asian community
wherever they are residing using this as a launching pad, the company would like to cater to all the tea
connoisseurs of the main stream market all over the globe. Recently we have entered UK, Australia,
New Zealand and also having strong dialogues with some of the European buyers and hoping to get
good business from them

Currently focusing in USA as a strong hold in New York, Chicago, Atlanta, Houston etc

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For Sustainable Agriculture

Hoardings by Greenpeace.

Since movements such as these become popular through digital media, the customers have to be
communicated about the effort the company makes in this direction. A good point of reassurance is the
point of consumption. Typically, at tea shops where Wagh Bakri is used. It will help promote goodwill
for the brand apart from loyalty.

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Conclusion
Looking at the overall plan, one thing is clear that no matter what it takes, the audience need to be
targeted very smartly and in a way that make them feel that the product has something in it that others
do not.

This acts as a competitive advantage for the company. Capturing the maximum share in the market leads
to more and more identifications of opportunities and these profitable opportunities need to be grasped
eventually at all levels of competition.

The firm may operate with an annual advertising plan and the campaign must be so strong that it
delivers the message straight forwardly and hitting the aperture at the right place with maximum media
share.

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Bibliography
http://www.waghbakritea.com/about_us.html

http://www.waghbakritea.com/achievements.html

http://www.waghbakritea.com/product.php

http://www.thehindubusinessline.com/2007/11/29/stories/2007112952070500.html
www.waghbakritea.com/Export%20House
http://www.afaqs.com/news/story.html?sid=24771_Percept/H+wins+creative+duties+for+Good+
Morning http://www.afaqs.com/search/index.html?k=wagh%20bakri&sbs=Media%20Brief
http://www.waghbakritea.com/tea_recipes.html
http://www.waghbakritea.com/archives.html
www.google.in
www.wikipedia.org

Books referred to:

Principles of marketing by Philip Kotler,9th edition, published by Prentice Hall of India Pt. ltd.,
year of publishing-1992.
Financial management by Khan and Jain, 2nd edition, published by TATA MCGRAW Hill, year
of publishing-1992
Production and operational management by Ashawathappa and Bhatt, 1stedition, published by
Himalaya publishing house, year of publishing-1999.

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