Case Study: Lipton and Kai Shii
Competitors in the iced-tea market
Author: Parag Agarwal
Tutorial Group: 7
Tutor: Ms Gillian Scott
1. Executive Summary
Unilever Bestfoods, 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-tea can by the name of Brooke Bond’s PG Tips. Kai Shii is about to be launched in the US market. The following study evaluates various market segmentation strategies, potential consumer target segments, and factors to forecast demand that were used or could have been used by these two companies. The main reference for this report was Chapter 3 of the textbook ‘Principles of Marketing’ by Kotler et al. The main results of the analysis are as follows:
• Both companies’ SWOT analysis reveals that they are dominant and successful in their home markets. • Kai Shii would require a great amount of effort to market itself and bridge the cultural divide and varying tastes and perceptions between Taiwanese and American consumers. • Behavioural (seeking convenience, health conscious), demographic (age groups) and geographic factors largely influence the market segmentation. • Pricing amongst competitors in the same product category plays a vital role compared to pricing amongst for example, carbonated soft drinks etc. • Future demand for the iced tea market or any other segment is based on the growth rate of current market segment bases such as age, income and nationality. Both companies require different approaches to their marketing strategies. The following are the recommendations: • Lipton and Pepsi should expand their market reach across other segments to ward off emerging competitors and increase product visibility. • Lipton iced teas should be made available in various packaging sizes and prices. • Brooke Bond’s ready-to-drink hot tea cans should capitalise on the parent company’s objective of increased customer convenience and the advantage of having developed a unique technology. Thus, it can be priced higher. • Shin Shii’s entry into the American market should focus on selecting a distributor based on mutual trust and initially conducting trials and pilot schemes in cinemas, fun-fairs etc. to gauge general consumer response. • Shin Shii should change the name of its product to suit the American market and sell at lower prices than Lipton unless it feels that Kai Shii’s demand is based on or is increasing due to its unique flavour or product quality.
1. Executive Summary 1 2. Introduction 3 3. Analysis and Interpretation
5 4. Conclusions
9 5. Recommendations
6. Further Study 12
8. Appendix 12
The following report focuses on the growing canned iced-tea beverage market, with an emphasis on the Western market. This development led to opportunities for Unilever Bestfoods, USA...
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