Marketing Plan of Lipton Ice Tea

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  • Topic: Tea, Iced tea, Sweet tea
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  • Published : September 19, 2009
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Marketing Plan: Lipton Ice Tea
Industry Analysis
In 2005, the tea industry reached the $1.7 billion category and it is expected to continue growing indefinitely (Mintel 2005). Market analysts believe the tea industry will continue to boom and is not expected to reach saturation level in the near future. The favorable movement in the tea industry can be attributed to two major factors: a) consumers need for convenience and time-saving services; and b) the positive press given to tea. American lifestyle and work habits have made convenience a necessity. As employers demand for productivity from their employees, consumers are more pressed for time. In addition, the shaky economy has made Americans fear for their jobs; thus, any product that can fill the consumers' need for convenience and speed are almost automatically embraced into the American lifestyle (Mintel 2005).

For the last decade, the health benefits of tea have gained wide coverage in the media. Studies continue to show the beneficial properties of teas, with health benefits ranging from lower cholesterol levels to improve arterial health and decreasing chance of cancer. This positive press has definitely catapulted the demand for tea (Mintel 2005). Both the need for convenience and positive press on tea have spurred an increase in sales of tea products, specifically ready-to-drink (RTD) teas sold in single-serve containers (Mintel 2005). Recognizing this trend, various companies in the tea industry have come up with innovative products to take advantage of the booming market for ready-to-drink teas. Lipton tea, one of the global leaders in refreshment brands, launched new products to meet the growing the need for ready-to drink teas and introduced innovative product line to capture the healthconscious market.

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For over a century, Lipton has been dominating the world tea market with the company’s tea-based drinks including leaf tea, infusions and ready-to-drink tea. Its success has been attributed to the firm’s “strong focus on innovation and the expertise of its tea specialistsprofessionals in tea-growing, tasting, buying, blending and R&D teams” (Wikipedia 2007). One of the main driving forces for Lipton’s success is the company’s source of tea. Lipton teas are sourced from various plantations in well-know tea-producing countries such as India, Indonesia, Kenya and Sri Lanka. It maintains specialized tasting rooms in seven regional located across the globe. Presently, Lipton has about 30 different tea blends (Wikipedia 2007). As Lipton is a part of the Unilever global consortium, the company ensures that its tea producing farms do not only yield high-quality product but also protect and improve the natural environment and livelihood of workers and local communities. Lipton’s plantations in East Africa have been working with third party estates to ensure compliance with Unilever’s sustainable agriculture guidelines and the Ethical Tea Partnership criteria (Wikipedia 2007). As part of Lipton tea’s drive to capture the booming market for ready-to-drink teas, the Anglo-Dutch Unilever Company entered into a joint agreement with American PepsiCo in 2003. Through the joint venture agreement, PepsiCo distributes or markets Lipton tea products, specifically Lipton Ice Tea in more than 60 countries where PepsiCo has established its corporate presence (Wikipedia 2007). “The 50-50 JV - Pepsi Lipton International - is the latest move in Unilever's Path to Growth strategy which has mostly involved the disposal of non-core businesses rather than support for existing brands” (“Unilever-PepsiCo” 2003). In a press statement, Unilever announced that the joint agreement with PepsiCo has two main goals: to move the Lipton brand into new distribution channels and into new markets. While Unilever claims that Lipton is the leader in the 16-billion liter world market for ready-to4 drink tea, its presence remains slim in a number of key markets; thus, the agreement with PepsiCo is...
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