Marketing Mix for Sri Lankan Tea

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Table of Contents

1.Introduction02

2.Applying the Marketing Mix…….04
2.1 Product………..…………………………………………………………………...…………..05 2.2 Place ……….………………………………………………………………………………….06 2.3 Price …………………………………………………………………………………………..08 2.4 Promotion …………………………………………………………………………………….09

3.Conclusion 12
4. References ……………………………………………………………………….13

1. Introduction
Since the discovery of Tea in 2737 B.C in China, and after the Europeans learnt about tea in 1589, drinking tea has spread throughout the world and today it is a widely consumed beverage. Tea production in Sri Lanka is of high importance to the Sri Lankan economy and the world market. Sri Lanka is the world's fourth largest producer of tea and the industry is one of the country's main sources of foreign exchange and a significant source of income for labourers, with tea accounting for 15% of the GDP, generating roughly $700 million annually. Ceylon tea is divided into three groups: High or Upcountry (Udarata), Mid country (Medarata), and Low country (Pahatha rata) tea, based on the geography of the land on which it is grown. Tea produced in Sri Lanka carries the "Lion Logo” on its packages, which indicates that that the tea was produced in Sri Lanka.The most important foreign markets for Sri Lankan tea are the former Soviet bloc countries of the CIS, the United Arab Emirates, Turkey, Iraq, Iran, UK, Japan, Saudi Arabia, Syria and Libya. Ceylon tea was renowned for its quality, but supplies exceeding demand, higher cost of production and intermediary’s margins have forced the tea industry to compete on price rather than on quality. Consumers preferring flavoured and instant teas are also not helping the local tea industry that produces old style orthodox teas. If you take the trend world over convenience and fast food are popular. People now do not have the time to brew tea and make tea in the traditional way. At present, instant tea is one of the fastest growing segments in the beverages market. Instant teas and green tea demand is growing in Europe, USA and Japan. Instant tea has created a lot of excitement and modernized the image of conventional tea. About 50% of instant tea consumers are newcomers to the tea market. Instant tea has not replaced the traditional tea bag, however, instant tea covers a very wide product range, usually depending not on the tea, but the flavouring used. The tea is usually a relatively a minor component, with sugar typically the primary ingredient, then flavourings, colouring agents, anti-caking agents, etc. Most instant teas do not contain real tea, rather tea extract. This artificial addition further separates instant teas from their parent leaves. However, one must not fail to appreciate the success of instant tea and recognize that it is a product, which has its roots in tea. The most "instant" of instant teas is called ‘Ready to Drink (RTD)’. Also known as bottled tea there used to be a strong stigma in the tea community about this relative of the leaf. Viewed largely as the stepchild of the big cola companies, RTD teas were thoroughly infused with their mass-production ethos: make it cheap, stack it high, move it fast. However, a new trend is beginning to emerge from the creative folks of the tea industry. Fighting to erase the image that Goliath cola companies have painted for tea, some true tea-loving companies are introducing innovative bottling methods. They are making great teas available without the addition of unnecessary preservatives, and without covering the lack of quality tea with an overabundance of sugar. The instant tea manufacturers are hoping to challenge beverage marketers outside the tea industry with their new products. The attempt to attract younger consumers is an effort to compete with the cold-drink market, which has grown by four times in the last ten years, according to market-research firm A.C. Nielsen. Nielsen's statistics show a slow decline in the tea market over the past...
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