Ichitan Co.

Topics: Green tea, Tea, Black tea Pages: 6 (1773 words) Published: February 4, 2013
Production/Operation Management
Field Trip Report (Tan Land)

1. Company/Organization overview: briefly discuss the company’s product and/or service offered and target markets.

Ichitan group was established by Mr. Tan Passakornnatee after he sold his first Green Tea brand, the Oishi Green Tea, to Thai Beverage Public Company limited. Ichitan group start off selling Double Drink which are juices. After a while, Mr. Tan has launched Ichitan Green Tea to compete with his old Oishi brand. The product was first launched in three flavors. The first flavor is the original flavor that focuses on the taste of original green tea by using only blooming tea. The second flavor is the honey lamon that combine a mixture between green tea and lemon as well as adding honey as sweetener. The third flavor is Genmai which focus on the smell of Japanese rich that perfectly matches with the taste of green tea.

After the three flavors of Ichitan green tea has become quite successful, they gradually launch more flavors in order to capture more customers. Nowadays, Ichitan has all together of 6 flavors, in which 3 additional flavor were added. One of them is green tea with Chrysanthemum a Chinese herb that perfectly blended together with tea and offers a new experience for customers. The next one is Midori Punch a new cutting edge flavor the combine the taste of various kinds of fruit with green tea.

Ichitan mainly target group of Ichitan green tea are people age between 20-50 years old such as university students, office workers, and businessmen who mostly has income above 10,000 baht per month. This group of people, especially in Bangkok, tends to like to drink green tea; moreover with the trend of health conscious, many people are switching from dinking carbonate drink to drink healthier product in which Ichitan grean tea who positioned itself as healthy organic green tea drink also falls in the category. Ichitan green tea also target people of age lower than 20 years old as a minor target group. This group of customer; however, has lower purchasing power and might purchase green tea less often than those in the first group

2. Operation Strategy: Identify and discuss the company’s competitive strategy. (differentiation, cost leadership, or response)

Ichitan used a strategy known as best cost provider strategy which is a mixture of both differentiation and cost leadership. Ichitan price its green tea at 15 baht per bottle while Oishi is priced at 20 baht per bottle. This low-cost penetration strategy aims to attract customer to switch to buy Ichitan green tea product. Currently, a bottle of Ichitan green tea is priced at 16 baht per bottle. This strategy actually works very well for Ichitan as the actual cost of the company is not that significantly different from that of Oishi. Ichitan provide 420 ml of the green tea volume while Oishi gives 500, which mean that Ichitan pricing strategy is only a little cheaper than Oishi. As to give a better picture, 1 baht that customers spend on purchasing the product could buy 26.5 ml of Ichitan green tea (16 baht) while get 25 ml if they purchase Oishi.

Even though Ichitan gives important on being a low-cost provider, it focuses more on its product differentiation. Ichitan produces organic green tea which is produced using methods that do not involve modern synthetic inputs such as synthetic pesticides and chemical fertilizers. The company has received a certificate to produce such kind of green tea and is currently the only producer of organic green tea in Thailand. Ichitan focus on advertising about its unique quality and position itself to be a healthier green tea comparing to other brands in the market

3. Operation Description

3.1 Operational Process Flows and Capacity

Located on a 76-rai (12-hectare) plot of land, the 50,000 square metres Ichitan Green Tea Factory was built with an idea of “Greenovation” which reflects the company socially...
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