MARKETING STRATEGY OF TATA TEA

Marketing Strategy: Regarding Indian markets, important to point out is that once the
customer decides to consume a certain brand, he or she will be very loyal to the product and
it will therefore be hard to convince him or her to buy another brand. The brand Tata Tea is to
introduce innovative products in an existing market and focus on Market Development.

EXISTING MARKET NEW MARKET

EXISTING Market Penetration Product Development

PRODUCT

NEW PRODUCT Market Development Diversification

Producing product in India is less expensive as India is second largest producer of tea in
world tea market and labor is cheap here.

MARKETING MIX OF TATA TEA

PRODUCT
Tata Tea will be a high-quality product offered. Contents of the Tata Tea are: 40 bags, 80
bags, 150 bags, 250 bags (Family pack), the number of bags refers to different target groups.
40 bags for singles, 80 bags for couples, 150 bags and 250 bags are Family Packs. (250 bags
are the most famous) Packaging: Customer perception of a package creates brand equity and
purchaser loyalty. The image presented by the package largely determines success or failure
of a tea line. Appearance stimulates memories and emotions inside the purchaser, who
oftentimes is female, often buying for an entire family. Color, image and slogan all combine
to facilitate customer allegiance.
PLACE
High quality for a reasonable price can be bought from Assam & Darjeeling and will then be
blended and packed. The final product will be distributed to Retailers such as Supermarkets
and main tea shops so the end consumer has easy access to it.
PRICE
Reasons for pricing policy: Tata Tea is competing against the main players on the Indian Tea
Market and by setting a higher price but offering more value for it. Various promotion
activities, giveaways and advertising on radio and television will help to establish the brand
and gain market shares.
PROMOTION
The focus is the Indians like to purchase bargains or buy products that offer free gifts. Other
brands do not offer as many promotion and free gifts. This is why it is important to focus
especially on the Promotion activities of the marketing mix. Need to set up original events in
order to attract new customers and consumers of other tea brands.

TATA TEA OVERVIEW

 Among the top three players in the global tea market in terms of market share
 Market capitalization in excess of US $ 1 billion
 Consolidated Revenues of over US $ 700 million
 29% ownership by the Tata group; FII ownership 22 %; Domestic institutional
shareholders 15%
 Primarily a branded tea operation with presence in over 40 countries with significant
market share
- Tata Tea in India
- Tetley overseas
 Plantation ownership in India and Sri Lanka
 Includes Tata Coffee (Asia’s largest coffee producer)

THE TATA TEA GROUP- STRUCTURE

 MARKET OVERVIEW

World Tea Production in 2004-3200mn kgs (approx.)

GLOBAL OPPORTUNITY FOR ‘TEA’

 Growing Black tea markets define opportunity for geographical expansion of portfolio
in overall Black tea although stagnancy is reported in world markets
- Potential sector revenue of Rs 48,000 crores

 Top 30 ‘Tea’ markets account for 90% of the market volume in the packaged black
tea segment

 Tata Tea & Tetley present in only 35% of this market – with a combined revenue of
Rs 3000 Crores

 Green / Fruits & Herbal / Flavors / Specialty tea account for 49% value of all global
packaged tea revenues!
- Potential sector revenue of Rs 48,000 Crores

 RTD operates in a beverage arena that is at Rs 128,000 Crore

 SEGMENTATION, TARGETING AND POSITIONING

Segmentation:

A similar set of needs and wants defines a particular market segment. Tata Tea recognises
different customer segments across regions, demographics, lifestyle and behaviours.

Geographic Segmentation:

Geographic segmentation takes into consideration the discernible preferences of customers,

and their purchasing behaviour within a particular region. The ability and resources to
purchase, availability, awareness and marketing support structure are issues that are relatively
common within a particular region.

Being a product with a high brand value and image and packaging and pricing superior to
many other products within the category, Tata Tea Premium is targeted at the semi-urban
consumer population living in Tier 1 and Tier 2 cities. Demographic Segmentation:

 Age and Family Size: 20-40 years of age, small and large families in Tier 1 and 2 cities
 Income Group: lower and higher middle-class groups
 Education: Well-educated, aware, politically and socially conscious, responsible and aspiring
citizens
 Gender: Family/home managers (specifically women)

Psychographic Segmentation:

 Convenience and comfort-seeking customers

 luxury-oriented customers
 customers active in social discourses and causes

Behavioural Segmentation:

The product focuses on segments that use the product on a regular basis and who are quality-
conscious, aware and informed, medium to heavy users, with medium to strong loyalty.

Targeting:

The main target of Tata Tea premium is the middle class and upper middle class that accounts
for nearly 300 million people. It also targets the youth encouraging them to embrace social
messages and positioning itself as a social awakener brand. It targets women, who are the
influencers and deciders in the buying process, especially the housewives, and appeals them
to exercise their power to vote in the electoral process.

Porter’s five forces model helps determine the long-run attractiveness of the market or market
segment.
1. Threat of intense segment rivalry: Tata Tea faces intense competition from the local brands,
Brooke Bond Taj Mahal, Wagh Bakri, Red Label Special in the segment it targets. This is
combated by emotionally appealing, incredible promotional and social campaigns and
advertising.
2. Threat of new entrants: Foreign Direct Investment and untapped rural marketing. Tata Tea
tried tapping into the rural areas through the ‘Gaaon Chalo’ campaign, an initiative to
improve its rural distribution.
3. Threat of substitute products: Various categories that cater to rejuvenation and freshness such
as coffee, aerated drinks and energy drinks.
4. Threat of buyer’s growing bargaining power: The wide array of options available in the
market, offering at lower prices has facilitated the growing bargaining power. This threat is
subsided by the brand communication strategy and superior quality of the product.
5. Threat of suppliers’ growing bargaining power: With a large number of producers in the tea
industry offering a range of benefits to the supplier and low switching costs, the suppliers
have increased bargaining power. This threat is minimised by selling the tea packages via
various suppliers and some themselves too.

Positioning:

Tata Global Beverages positions itself as a ‘Good for You’ beverage brand. Tata Tea
positions itself as a young and vibrant brand. The message they wish to convey through their
cause marketing campaigns is “being the change that we want to see”.

In one of the interviews by Sanjiv Sarin, regional president, South Asia, Tata Global
Beverages, said, “While tea may wake you up, Tata Tea awakens you. The campaign
demonstrated Tata Tea’s thought leadership in positioning tea as a medium of ‘social
awakening’ and not just ‘physical awakening’

SWOT ANALYSIS
 Strengths
 Brand presence in 50 countries
 High customer loyalty
 World’s second largest manufacturer
and distributor tea.
 Most trusted brand
Opportunities
 Come with more flavours in tea
 Position tea as a healthy drink as
compared to coffee
 Increase its presence in rural market
REFRENCE:
https://www.mbaskool.com
https://anuradhagoulaymarketingjournal.wordpress.com
https://www.tataglobalbeverages.com
Weaknesses
 Highly fragmented market in India
 It is labour intensive industry and has
associated issues
 Concentration risk over single
category
Threats
 Competition from local and regional
players
 Youth does not prefer tea
 Substitutes like juice are becoming
more popular