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PG tips

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Topics: Tea
Mother company

PG Tips is a brand of tea in the United Kingdom, manufactured by Unilever UK. The founder of PG tips is Arthur Brooke. He launched the product in 1930. He opened his first shop in Manchester, but years later he becomes big in the market. This because a big grocer placed a bulk order of tea at wholesale prices. The original name was Pre-gest-tee which shows that the tea could be uses as a digestive aid. Grocers changed the name into PG, and the company added ‘tips’ to highlight the fact that PG tips uses the top two leaves and bud of each plant to make its tea. The makers of PG tips introduced the tea bag and they soon sold out loose-leaf tea. By 1958 PG Tips had risen from fourth to first place in the British tea market.
In 1956 PG Tips began using sketched chimpanzees in their TV advertisements. These were dressed in human clothes and were known as the 'Tipps family'. The voices of the monkeys are provided by celebrities. These advertisements were stopped in the 1970s after complaints by animal rights organizations. Because the sales dropped, PG tips decided to re-introduce the chips 18 months later. Now we can still see the chimps in PG tips commercials, they are seen as the company’s mascot.
In 2002 the Tipps family were replaced by birds called T-birds. The birds were animated by the company who designed famous films like Wallace and Gromit and Chicken Run. By this cooperation, PG tips was able to use famous figures for their promotion material. The “Gromit’ mugs made the sales increase by 600%.
PG tips always have been smart if it comes to advertising. For its 75th anniversary PG tips included limited edition tea bags and a Diamond teabag which was worth €7,500.
Unilever
PG tips is a part of Unilever. Unilever is a Dutch multinational consumer goods company specialized in food, beverages, cleaning products and personal care products. In 2006 Unilever had 179.000 employees and a revenue of 39,6 billion Euro.
Next to PG tips, Unilever owns brands like Lipton and Ben and Jerry’s. In total, Unilever owns over 400 brands. The head quarters of Unilever are based in Rotterdam (Holland) and in London (UK). Unilever was founded in 1930 by the merger of the British soap maker ‘Lever Brothers’ and the Dutch margarine producer ‘Margarine Unie’.
Unilever is considered as the world's third-largest consumer goods company measured by 2011 revenues (after Procter & Gamble and Nestlé) and the world's largest maker of ice cream.
Products
PG tips are specialized in tea. Their tea blend is the same for over 75 years. PG tips was the first company who used tea bags. PG Tags, tea bags with a string, were launched in 1985, and pyramid-shaped tea bags in 1996 (branded as Pyramid Bags). The pyramid-shaped bag was designed to help the tea leaves move more freely, as loose tea moves in a teapot, and supposedly create a better infusion. One 2011 version of the product packaging makes the claim: "The PG Tips pyramid tea bag gives the tea leaves 50% more room to move around than a flat conventional tea bag. So the tea bag works more like a miniature tea pot. This allows for all the freshness to be released for the best tasting cup of PG."
The tea of PG tips is available in its original form (loose tea), tea bags and in bending formats. The tea bags always contain the exact same type of tea. This blend is called 777 and can contain between 12 and 35 single estate teas at one time. The amount of tea types depend on the season. Their tea leafs are found all over the world.
PG tips offers 4 types of tea:
PG tips black tea: in order to give the tea leaves room to move, the tea is sold in pyramid tea bags. The amount of tea is exactly what you need for one single brew.
Special moments: The Fresh One: One of the Special Moments range of teas from PG tips. By pressing fresh tea leaves, the genuine taste of fresh tea is captured. The Evening One: A blend of lightly pressed leaves and decaffeinated tea. And the Strong One: A full-flavor blend with extra-pressed leaves and a rich, rounded character.
Decaf: a caffeine-free tea. It tastes the same as normal tea but without caffeine.
Green tea: PG tips provides normal green tea, Lemon green tea and Mint green tea. It has a pure flavor with a fresh scent.
The teas are sold in different sizes. You can choose to buy a big package with 240 regular tea bags, or 100 pyramid tea bags. PG tips also sells mugs to drink your tea in.
On each of the tea packets you will see a green frog. This green frog stands for the Rainforest Alliance. This means that the tea is bought from farmers who earns a faire wage, with good quality housing, medical care and education for their children. You could compare it with Fairtrade products.
Every day, people drink 165 million cups of tea, around 35 million cups are made with tea from PG tips. After using the tea bags, people throw them away. This is harmful for the environment. Tea bags are the largest contributor to unavoidable waste in the UK, generating 370,000 tones every year. PG tips tries to make people include teabags in their waste recycling schemes by using campaigns. Like this people can still enjoy their tea, and think about the environment at the same time.
PG tips claims that their tea is a digestive tea. This means that an average cup of PG tips is fat free and black tea calorie free. PG tips works perfectly to hydrate since it’s made with water. If you drink 6 cups of PG tips, you reach your daily water requirement of 1, 5- 3 liters per day.
A lot of people drink ‘tisane’ tea, because of the caffeine in normal tea. In PG tips, there is half of the caffeine as in a normal tea.
On top of that, PG tips contains fluride, which may be beneficial to your dental health. Coffee on the other hand is very bad for the condition of your teeth.
Cultural differences
France
A statement written by Melanie Jones: She stated that the French way of doing business is very closely connected to the French culture, and international business men and women, that they sometimes make early mistakes like souring a deal before its even begun. In France it is said that culture norms are expected when in Paris or other cities. France places a premium on individuality; this allows the choice to have freedom of opion with separate social and professional lives, which of course in the UK is very similar. Many have experienced that when mixing business with pleasure ends negative. And the French like to stay focus and separate what’s personal to professional. 

United Kingdom
The UK is known as a homogenous society, since the world war two, it is said that Britain has become very diverse, as it has allowed a large number of immigrants to populate the country. The many cultures, traditions, religions and background make it very hard to define British people as looking or acting in one particular manner. Many people sound British, of course from leaving in Britain you will eventually, many also retain the cultural heritage of their forefathers while many people may become more British than the person that can trace their lineage. The nations favorite dishes is ones of other cultures; Indian curry is usually had on a Saturday, Fridays are the British fish and chips with mushy peas, and Sundays are roast dinners.
Doing business in the UK is done with formality, many like to work with business that they already know from previous experience. The younger business men and women do not need a long standing relationship before starting business, and also they do not require a intermediary to make business introductions. Nonetheless, networking and relationship building is often key to long-term business success. Ranking in the UK is very respected they enjoy dealing with those of their level, makes the work move faster.
Both cultures
Well seeing how they can both do business, PG tips believes it would not be a problem to import PG Tips France, the British people will just need to remember the business culture of France and there’s to be sure the process is a successful one.

Targeted market
PG Tips would need to know what to offer in France, the French as mentioned above can be tensed in their state of working conditions, so a success may be the calming infusions such as, green tea, mint tea or there original. Well PG Tips is an affordable product for all walks of life so their goal should be to target the young, the elderly, and the middle age. We believe that the working class and mums should be the main target; the reason being is their mix of calming and warming teas and flavors.
Looking into the French market we have noticed that there is a gap for PG Tips, going into may stores such as Franprix, monoprix we can see that there are a variety of different types of teas, but there are not much traditional British teas, one of the things that the Brits are known for are their love of tea, this is known by other cultures so it would be an easy entry. But there may be a few pointers to be watchful of when entering this market.
When there are new entrants to an industry it will help increase the level of competition, which all try to avoid. But this will depend on the barriers to entry. The tea industry does not have high entry barriers because there are many tea brands. PG Tips will have to be aware that there are brands such as Lipton and twirling’s, even though PG Tips has created one of the most popular tea brand in the UK, there can still be another brand in France such as Lipton that can take over.
When there is a substitution with a product it can decrease the industries attractiveness and profitability; this is because it puts a cap on the price levels. For there to be a threat on substitute products it will depend on the customer’s willingness to substitute, the customers will compare prices and the performance. Looking into the many stores in France the tea prices are at a considerable price, PG Tips is no different, but the main issue will be the conversion rate and weather that will affect their entry. To stay in the safe zone PG Tips will need to enter Franprix, Dia and Auchan. PG Tips have won over many, by their rapid product innovation and price cuts, there may be a gap to bring back those whose love for tea has died down.
Now mentioning business-to-business and business-to-consumer marketing, well they are both different but both useful when importing into another country, we are need to know the market and who spesifically to target to. Now the b2b and b2c will give us this specific outlook. Many belive that to market a product is simple to market and weather you are marketing to a consumer or a business, you are still just marketing to a business, but no they are both people but a person buying for ones self and buying for their company is two different emotional experiences. If we enter France with this product using our b2c strategy to market our b2b will cost us money and may cost us customers, so I will outline the type of b2b and b2c needed for our purpose.
B2C (PG Tips into France)
Product driven – PG Tips was made on the bases of wanting customers to want and need it, this is seen by the different blends of tea bags. Consumers want something that can cure, cure anything where it be headaches, stress, sickness, insomnia etc. PG Tips has done this, they have had the customer in mind by these different tea bag options offered. Also by their intelligent adverts of comfort, consumers want this conform. This is shown by the high increased stress rates in Europe.
Brand identity – They have created a brand that calls comfort and happiness, importing in France we will need to be sure to focus on consumers that are in need of this, by this action our product will be a success.

Emotional buying decision - There are a few emotional buying decisions but we will mention a few that will apply to our product. In order to enter the French market with a success we will need to be sure that the location and method of selling will entice consumers to buy.
Envy – this is a powerful buying motive. If a firend has our product in their kitchen, the other will feel the need to buy it. So we will need to target social people.
Vanity – everybody is surely guilty of this buying motive. Why buy green and mint when you already have the original. People are attracted to new things so bringing out flavours that the French would like will call the attention of more buyer. Flavours such as lemon, strawberry etc. “Vanity is related to self esteem and is a very powerful buying motive”.

Social network - Many people all over the world are enticed to social network, this has become a very powerful advertising tool, and PG Tips is already a part of this.
“The ultimate goal of B2C marketing is to convert shoppers into buyers as aggressively and consistently as possible”.
B2B: Focusing on building a relationship and communication using marketing activities that will generate a lead into the sales cycle. Having an email campaign for our soon business partners will be to drive prospects to the internet in order to learn more on our products and the benefits that they will bring. It will also allow them to learn about the product.
“B2B companies use marketing to educate various players in the target audience because the decision to purchase is usually a multi-step process involving more than one person”.
This is crucial to have in mind while doing business to business, to insure the right target is reached.
Marketing strategy

PESTEL analysis
Political: In France, tax on tea is 5,5%. France itself does not produce tea, they import without tariffs or specific quality standards outside of the regulations on the safety of food products and labelling. This is a fully liberalized market. The manufacturers of tea therefore enjoy low purchase prices. In France, the government created the ecological label so it can be applied on the tea.
François Hollande's coalition won the absolute majority during the 2012 elections, providing it with the authority and power to go ahead with fiscal and structural reforms. The government proposed major policy measures to revive the country's competitiveness that will require significant support in order for legislations to be passed in the national assembly.
Economic: In France the interest rate is low and the economy of the country does not grow very much. The tea sector is a privileged sector where we can see the impact of the economic crisis. French banks have considerable exposure to the troubled economies of Greece, Spain, and Italy, which makes them vulnerable. Banks have exposure to both sovereign and commercial debts. In terms of infrastructure, In terms of infrastructure France possesses one of the best infrastructure networks in Europe, with a leading road and highway system. The French railway network is one of the most integrated and well organized in Europe, providing quality service and reliable, high-speed passenger train travel. In terms of air transport, France is a global air transport hub with around 500 airports, including 45 domestic airports and 10 international airports.
Social: France copes with an aging population, high unemployment levels, less than optimum income distribution and a deficient educational system. France has one of the highest birth rates in Europe, and this has seen an upward trend since 1990. France is the thirtieth place in the world with a consumption of 230 g of tea per person per year. The tea is consumed mostly in a teabag and the biggest consumers can be found in Ile de France and in the west of France. Black tea is two times more consumed than green tea, but has a less evolution than green tea.
Technological: France is at the forefront of technology initiatives in Europe. France has a favourable innovation climate, which is reflected in the large number of patents which it generates. It ranks fifth in the world in terms of the number of patents granted for its innovation. Consumers can buy their tea trough ´old fashioned´ ways, but with the new technology, they have access to many systems like the online shopping and mobile device application. With the social media the company can have a real impact on the consumers, and it provides cheap but effective publicity for the company.
Environmental: France is at the forefront of environmental legislation in Europe. The Environment Charter forms a part of the French constitution, and the country's environmental laws have influenced EU directives to a great extent. In the UE, since the 1st September of 2008 there are some regulations regarding the use of pesticides. For the world production, there is the label Fair Trade which protects the environment. In Europe, Unilever, Sarah Lee and Twinings, are involved in the Dutch Sustainable Trade Initiative. The initiative is launched to review production models (soil, surface water, health workers including pickers, etc..), and limit the residues in the final product. The impact of global warming remains to this day moderate but it could in the future become more important for tea producers.
Legal: France has an independent judicial system which is responsible for the maintenance of law and order. The regulatory regime in France has comprehensive laws that are in line with most other EU nations. There are transparent laws for establishing companies in France. These regulations follow EU directives to a great extent. As a member of the EU, France provides a reasonably hospitable climate for foreign investment. French laws of consumption require that consumer product labelling has to be done with the exact list of ingredients present inside. The expiry date must be visible too.
Competition
Unilever is the leader on the tea market with 45,7% of the market. Unilever represents brands like Lipton, Tchaé, Saveurs du Soir. Their main competitors is Foods International. They cover 23,7% of the market with brands like Twinnings and La Tisannière. Less important competitors are Tata Tea and brand of supermarkets like Carrefour, Auchan and Leclerc wich represents 12,6% of the market. A small part of the market is covered by luxury brands like Mariages frères.
Demand
The French consume 230 grams of tea per year. The sells of the black are declining in recent years but the green tea is in a huge growth because of his benefits for the health. The demand of green tea continues to grow and we found it in many products (food supplements, cakes ...). The tea belong mainly to the higher occupational categories and more urban. The tea drinkers are mostly consumers and individuals consuming retired with strong purchasing power.

SWOT analysis
Strengths:
- Our product is very famous in England, recognition of the quality of the product.
- Strong market position
Weaknesses:
-Producers do not know the behaviours of French consumers.
- Many competitors on the market which have a strong reputation in France
Opportunities:
-After water, tea is the most consumed drink in the world. In the EU, the consumption increases with 5.5% per year.
-Research on green or black tea in reducing risk of cancer.
-Strong development of vending machines Threats:
-Many tea-based drinks on the market (ice tea)
- Tea is not homogeneous in the world, which creates difficulties in transport from producer countries.
- The retail groups can purpose tea at low price.
- French customers do not know the brand

As we can see, there are some serious threats. Luckily, PG tips has a good market position in England, which provided money. With this money, PG tips can use publicity to gain market share. Since tea is a very popular drink, there will be a place in the market for PG tips.
Segmentation
By segmenting the market of PG Tips in France it will be possible to match groups of buyers with the same needs and behavior. There are different factors which can be used to segment the market, this are the following:
Geographical factors
Physiographic factors
Socio-cultural factors
Demographic factors
When looked at the market in which PG Tips wants to compete several segments can be made. The first segment uses the demographical factors by dividing the market into different age groups. For PG Tips the market can divided into the age groups: under 20, 20-55 and 55+ (the young, middle aged and elderly). Another segment can be maybe by using a physiographical factor, in this case lifestyle. By dividing the buyers into the following groups: family life and student/single life. Also the geographical factor is interesting. France is a big country with many different climates. That why it would be able to divided the market into the north and south of France for example. By using these segments for the PG Tips market it will be easier to target the right groups of people.

Targeting
In the last paragraph the different segments for the market of PG Tips were described. By targeting to a specific segment or segments PG Tips can get more market share. That why they have to decide on which segments they should focus. There are three different ways to target a market:
Single segment with single product: A single product is being targeted to just one specific segment within a group of many segments.
Single product aiming at the whole market: A single product is used to target all the segments within the market.
Multi-segment approach: A variety of different segments are being targeted by a variety of different products.
PG Tips should use the multi-segment approach to target the market. They have many different sorts of teas like black teas, decaf and green teas and as written in the last paragraph they also have many different segments. Because the consumers of PG Tips all want something else, have different preferences, it’s best to target the products on many different segments. The segments they should focus on are the age groups and the lifestyle buyers.

Positioning
In Great Brittan PG Tips are known for their quality and knowledge in teas. It would be best to create the same position in France. To get this position they have to overcome a couple of obstacles. First of all the tea market is very broad with a lot of different competitor. For PG Tips brands like Lipton and Twining’s will probably form the biggest treat. When they enter the market it’s therefor important that they focus on letting the public who they are and what they stand for in this case, getting the public familiar with the quality and the knowledge the have in making tea. They should focus on their selection of green teas. As already described in the marketing strategy the demand in green teas is growing. By promoting heavily on these sorts of teas on the selected targeted segments PG Tips should be able to get the position they want in the French market.

4 p´s
Product: PG Tips works with 4 different ranges:
-Black Tea: sold in 5 different sizes (40, 80, 100, 160 and 240) for tea bags or in pure tea granules.
-Special Moments: 4 different flavours of tea bags pack (The Fresh One, The Evening One, The Hint of Earl Grey One and The Strong One) in two different sizes (80 or 160 tea bags).
-Decaf: sold in three different sizes (40, 80 or 160 tea bags)
-Green Tea: sold in three different flavours (Pure Green Tea, Lemon Green Tea and Mint Green Tea).in a handpicked pack.

All these ranges offer different teas. To consume it, the consumer has to infuse it in hot water. This is a tea of high quality directly produce in England.
The Company developed in 1996 a new shape for their tea bags, the pyramid-shape. The pyramid-shaped bag was designed to help the tea leaves move more freely, as loose tea moves in a teapot, and supposedly create a better infusion. One 2011 version of the product packaging makes the claim: "The PG Tips pyramid tea bag gives the tea leaves 50% more room to move around than a flat conventional tea bag. So the tea bag works more like a miniature tea pot. This allows for all the freshness to be released for the best tasting cup of PG."
About the guarantee, PG Tips assure that the company make sure all the tea is grown using sustainable farming methods. Its friendship with the Rainforest Alliance means that the people who pick the tea earn a better living and their families have access to a proper education and medical care.
Price: We decided to keep the same kind of price as in England. We will bring the price into alignment with the market price. We want our product affordable for everybody but to keep the quality image, it shouldn’t be too cheap.
Some promotions will be made for special event (Company birthday, National event, Christmas...) or sometimes for group purchase (e.g. two for one).
Place: Our product will be sold at the national scale by intermediary of wholesaler, supermarket or grocer's shop. The quantity will be negotiated with these intermediaries. Then the PG Tips tea will be accessible in the whole French market.
Promotion: For the advertising, we want to keep the PG Tips England models and the Monkey Mascot. Based on humour and sensibility, the message is addressed to the same targets. We want to use different media like television, billboard, radio...
Some promotions could be made with presents for regular customer (like the Gromit Cup operation).

Sources

Bloom. (2011). PG Tips (the ones). Retreived at 13-05-2013 from Bloom London: http://www.bloom-london.com/brand/pg-tips-(the-ones)
Jones, M. (2011, november). http://www.ibtimes.com/reporters/melanie-jones. Retreived at 01-05-2013
Marketing Teacher. (2013). Segmentation. Retreived at 13-05-2013 from Marketing Teacher : http://www.marketingteacher.com/lesson-store/lesson-segmentation.html
Marketing Teacher. (2013). Targeting. Retreived at 13-05-2013 Marketing Teacher: http://www.marketingteacher.com/lesson-store/lesson-targeting.html
Net, J. d. (sd). http://www.journaldunet.com/economie/. Retreived at 01-05-2013
PG Tips. (2013). Our teas. Retreived at 13-05-2013 from PG Tips: http://www.pgtips.co.uk/product
PG Tips. (sd). History of PG tips. Retreived at 24-04-2013 from PG Tips: http://www.pgtips.co.uk/article/detail/290609/history-of-pg-tips
PG Tips. (sd). PG tips history. Retreived at 24-04-2013 from: http://www.pgtips.co.uk/article/detail/290609/history-of-pg-tips technopedia. (sd). www.technopedia.com. Retreived at 03-05-2013 trade, A. (sd). http://agritrade.cta.int/fr/Agriculture/Produits-de-base/The/Note-de-synthese-2011-Secteur-du-the. Retreived at 03-05-2013
Unilever. (sd). Unilever. Retreived at 03-05-2013, van http://www.unilever.co.uk/

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