top-rated free essay

Tea Market Analysis in India

By anushree1234 Dec 02, 2010 2883 Words
Introduction
Tea is one of the most refreshing and popular beverages of the world. India is one the the largest Tea producer in the world. Indian tea is the finest quality in the world. After water tea is the most widely consumed beverage in the world. Tea is basically the dried and processed leaves of only one species of plant called camellia sinensis.

Herbal teas or herbal infusions are not really teas, but simply dried leaves and/or flowers from various other plants and herbs. Tea manufactured from green leaves is divided into two types Black Tea and Green Tea. Green tea and black tea have different manufacturing processes. Black tea is again of two types Orthodox tea and CTC tea.

Orthodox teaCTC tea
Orthodox teas are manufactured with the help of orthodox roller in the process of rolling. CTC machine or Rotervan is used in rolling process in manufacturing CTC teas.

History
International
Origins of tea can be traced back to 4th century A.D in China. In 350 A.D Kuo P’o’ described tea as a beverage made from boiled leaves. From 350 to 600 A.D the demand for tea dramatically increased and outstripped the supply of wild tea trees. Thus farmers began to grow tea plants commercially in China. Tea was introduced to Western world in 16th century. India

In 1780, tea cultivation was experimented in India with seeds from China by Robert Kyd. Wild tea plants were discovered to be growing in Upper Brahmaputra Valley. Three major tea producing areas in India :

1. Darjeeling – North eastern India
2. Assam – Far North east India
3. Nilgiri – South India
All three are different in style and flavour.
Darjeeling found at the foothills of Himalayas gives the finest and most uniquely flavoured teas. Called “Champagne of Teas” Assam offers bright and strong cup of tea. It is the single largest contiguous tea growing area in the world. Niligiri tea has elegant flavor and briskness. Combination of fragrance and briskness makes it a truly unique tea in world. Tea producing areas in India : Tea production in India

India is the second largest producer of Tea in the world.

Source: Supplement to Annual Bulletin of Statistics-2008, ITC London As far as exports are concerned, India is the fourth largest exporter in the world.

Source: "Supplement to ITC Annual Bulletin 2008"
India has dual manufacturing base. India produces both CTC and Orthodox teas in addition to green tea. The weightage lies with the former due to domestic consumers’ preference. Orthodox tea production is balanced basically with the export demand. Production of green tea in India is small. The competitors to India in tea export are Sri Lanka, Kenya, China, Indonesia and Vietnam.

Tea is an essential item of domestic consumption and is the major beverage in India. Tea is also considered as the cheapest beverage amongst the beverages available in India.

Tea Industry provides gainful direct employment to more than a million workers mainly drawn from the backward and socially weaker section of the society.

It is also a substantial foreign exchange earner and provides sizeable amount of revenue to the State and Central Exchequer.

The total turnover of the Indian tea industry is in the vicinity of Rs.9000 Crs.

Presently, Indian tea industry is having (as on 18.12.2009 ) * 1692 registered Tea Manufacturers
* 2200 registered Tea Exporters
* 5848 number of registered tea buyers
* Nine tea Auction centers

India predominantly products CTC tea, because of high domestic demand for same. The consumption is above 600 Million kgs per year.   The market consists of both Leaf and Dust Teas both in the CTC and Orthodox Grades.

Market Share

Total tea consumption in India is estimated at 650 million kg, of which the share of packaged tea is 290 million kg, which is growing at 1.7 % per annum.

Tata Tea

About
Set up in 1964 as a joint venture with UK-based James Finlay and Company to develop value-added tea, the Tata Tea Group of Companies, which includes Tata Tea and the UK-based Tetley Group, today represent the world's second largest global branded tea operation with product and brand presence in 40 countries. Among India's first multinational companies, the operations of Tata Tea and its subsidiaries focus on branded product offerings in tea but with a significant presence in plantation activity in India and Sri Lanka. The consolidated worldwide branded tea business of the Tata Tea Group contributes to around 86 per cent of its consolidated turnover with the remaining 14 per cent coming from Bulk Tea, Coffee, and Investment Income. The Company is headquartered in Kolkata and owns 27 tea estates in the states of Assam and West Bengal in eastern India, and Kerala in the south. Products of Tata Tea :

1. Gemini Tea launched in 1980 :

The brand Gemini is a dust tea, sold in the states of Andhra Pradesh, Madhya Pradesh, Chattisgarh, Tamil Nadu and Karnartaka. However the focus of this brand is to be a strong regional player in the state of Andhra Pradesh. This brand has a high component of Assam tea, which lends to its unique strength, taste and color. Gemini is the market leader in its price segment and has been re-staged twice since 1996. The brand has been successfully positioned as "a strong tea for strong family relations".

2. Kanan Devan Tea launched in 1985

The Kanan Devan Tea story begins in the late 19th century when the first European settlers came to the Kanan Devan Hills in the state of Travancore. Braving an inhospitable terrain the early planters started cultivating Tea bushes in the fertile forest land of the Western Ghats. The tea they produced was exported to Europe and other countries throughout the world.

3. Chakra Gold launched in 1992

Chakra Gold Tea is a blend of high quality Assam CTC Dust teas. Chakra Gold is a strong No 2 Brand in the high quality & high priced Premium Dust tea Market of South India. The consumer communication of the Brand centered on the Golden Moments in the Consumer's life has been well received, and the same theme of Golden touch and Golden woman have inspired millions of Consumers across south India to be the loyal consumers of Chakra Gold, Golden Taste. Consumer promotions have been an important part of the Brand communication.

4. Agni Tea launched in 1998

A Migration of Agni under the Tata Tea umbrella is an ambitious brand consolidation initiative, whereby TATA TEA Agni, became its new offering for the economy segment. By bringing the popular economy brand Agni under the stable TATA TEA, the flagship brand, the company intends to further consolidate its presence in the large and promising economy segment by leveraging the tremendous equity of the flagship brand and allowing consumers access to the popular TATA TEA brand. Tata Tea Agni has been developed through painstaking consumer insight mining and satisfies the economy consumers' need for a differentiated product at an affordable price.

5. Tata Tea Temptation launched in 2001

Tata Tea is now offering consumers great value with the launch of Tata Tea Temptation – a premium, orthodox leaf tea. Temptation will offer tea connoisseurs a ‘Rare Flavour of Assam Leaf’ that delivers a unique taste and aroma. Tata Tea Temptation is the first among many new products to come from Tata Tea Limited and can be attributed to the company’s sharply focussed philosophy - "the customer is sovereign".

6. Tata Tea Gold launched in 2003

The launch of Tata Tea GOLD, tea that has aroma coupled with a refreshing taste. The product, introduced as an upgraded variant of Tata Tea brand, has a blend of 85% CTC and 15% long leaf tea. This is a blend of tea, which is visually unique, and a superior taste. Television commercial is on air on national media. The commercial has been designed keeping in mind the brand personality and has "Na kahonge toh pachtaonge" as its sign-off line.

7. Tetley Tea launched in 2004

The Tetley brand was restaged in the Indian market in December 2004. The highlight of the restage was the launch of flavoured tea bags in four exciting flavours –Masala, Ginger, Lemon and Earl Grey. Flavoured tea bags are available in packs of 12 tea bags, at an attractive put down price of Rs. 20 per carton. The Tetley flavoured tea bag range has been developed in-house, keeping Indian consumer habits in mind. Tetley is the first brand to launch Masala and Ginger tea bags – two very popular Indian flavours. Keeping in mind that most Indians like milk in their tea, Tetley tea bags were customized to allow this, yet ensure that the consumer got a strong cup of tea.

Strength :
Tata tea’s strength blooms on its own plantations : 56 tea gardens in Assam, Kerla and Tamil Nadu. The crop at each of these plantations imbibes the characteristics of the region where it grows. Having plantations in varied agro-climatic zones enables Tata Tea to cultivate distinct tea leaves.

Threat
While Tata tea is the No.1 branded tea, there has been a significant value erosion in the tea market, with regional players offering mediocre products at low prices or with attractive promotions. Despite the fact that tea is most traditional and affordable beverage in India, it is perceived as being old fashioned and less functional than some substitute products.

Competition
The competition Tata Tea is faced with operates on two fronts : organized players like Hindustan Lever on one hand and a plethora of local and regional players on other hand. The latter category is able to flourish in a skewed cost and manufacturing paradigm, making it a serious cause of concern.

Market Segmentation

Geographically : South India, Southeast India, Southwest India

Social class : Working class, middle class, upper middle class

Marketing Mix of Tata Tea

Product
Tata Tea will be a high quality product offered.Contents of the Tata Tea are: 40 bags, 80 bags, 150 bags, 250 bags (Family pack), the amount of bags refers to different target groups. 40 bags for singles, 80 bags for couples, 150 bags and 250 bags are Family Packs. (250 bags is the most famous)

Packaging:
Customer perception of a package creates brand equity and purchaser loyalty. The image presented by the package largely determines success or failure of a tea line. Appearance stimulates memories and emotions inside the purchaser, who oftentimes is female, often buying for an entire family. Colour, image and slogan all combine to facilitate customer allegiance. Place

High quality for a reasonable price can be bought from Assam & Darjeeling and will then be blended and packed. The final product will be distributed to Retailers such as Supermarkets and main tea shops so the end consumer has easy access to it.

Distribution Plan :

Price
The company is concentrating on building value around its brands to distinguish it from competitors. The median price for a 250gm pack is Rs 42.50. On the basis of prices, the largest segment of packet tea market at 61% is where the average tea price is less than Rs 145 per kg ; followed by segment where price is between Rs 145-180 per kg range and then the premium end beyond Rs 180 per kg. Promotion

The focus is the Indians like to purchase bargains or buy products that offer free gifts. Other brands do not offer as many promotion and free gifts. This is why it is important to focus especially on the Promotion activities of the marketing mix. Need to set up original events in order to attract new customers and consumers of other tea brands.

The “Jaago re” campaign of Tata Tea attempts to migrate tea from being a physical and emotional revitaliser to becoming a catalyst for 'social awakening' with the message 'Har Subah Sirf Utho Mat, Jaago Re.' This establishes thought leadership for the brand thereby reinforcing its market leadership. Jaago Re exhorted people to wake up and vote. It boosted sales significantly and helped Tata Tea to get an annual turnover of Rs 4,800 crore.

Buouyed by the success of ‘Jaago Re’ launched another campaign titled ‘Aaj Se Khilana Bandh, Pilana Shuru’. This version takes the issue of corruption and urges citizens to awaken and fight against it.

Hindustan Unilever
About :
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company, touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. The company’s Turnover is Rs. 17,523 crores (for the financial year 2009 - 2010) HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about €40 billion in 2009 Unilever has about 52% shareholding in HUL. Hindustan Unilever was recently rated among the top four companies globally in the list of “Global Top Companies for Leaders” by a study sponsored by Hewitt Associates, in partnership with Fortune magazine and the RBL Group. The company was ranked number one in the Asia-Pacific region and in India. The mission that inspires HUL's more than 15,000 employees, including over 1,400 managers, is to help people feel good, look good and get more out of life with brands and services that are good for them and good for others.  It is a mission HUL shares with its parent company, Unilever, which holds about 52 % of the equity. Products of HUL

1. Brooke Bond Red Label

* Red Label is a 105 year old brand and has tremendous equity and heritage in the Indian Market * It is the second largest tea brand in the country
* It has both leaf and dust variants, as well as a health and immunity variant - Red Label Natural Care.
* It is now proven that regular consumption of 3 cups of Red Label Natural Care every day can enhance one's immunity and help one fall ill less often. * Red Label holds the Guinness Record for the worlds largest tea party.

Range : Red Label, Red Label Natural Care

2. Brooke Bond Taaza

The great refreshment of Taaza inspires women to have an identity beyond their homes and to refresh their lives. Many young women in emerging India live life bound within their roles as a mother, wife and daughter in law. In the process, they lose their own identity. However, a changing India and examples of women achievers as portrayed by media, is leading to an awakening of her desire to carve out an identity for herself. She is however limited by her own inhibitions and a sense of inertia. Taaza recognizes this latent need and also believes that every woman has innate talent. The fresh green leaves in Taaza give her amazing refreshment that inspires her to realize her talent. Taaza is her ally and confidant. * Taaza is a 20 year old brand with strong presence in North & West India. * It is the 3rd largest tea brand in the country with a portfolio spanning in both leaf and dust segments. * It has a strong presence in the out of home segment in South India. 

Range : Taaza, Taaza Thanda

3. Brooke Bond Taj Mahal

A taste for the finer things in life.
Crafted from carefully selected tender leaves from India’s finest tea gardens, the lingering aroma of Taj Mahal always has an impact. When a cup of Taj is served, compliments follow. Taj Mahal is not just a cup of tea, it is a sensory experience. Key facts

* Taj Mahal was launched in 1966 by Brooke Bond.
* Ustad Zakir Hussain, the tabla maestro was the brands ambassador for almost two decades, exemplifying both discernment as well as the pursuit of excellence. * Taj Mahal since 2007 has Saif Ali Khan as its ambassador, a relevant choce for today’s Indian * Taj Mahal is the most premium brand of tea in the Indian market. * It was the first brand to launch tea bags and is the only tea brand in India to be sold in vacuum sealed packs. Range : Taj Mahal, Taj Mahal tea bags, Taj Mahal Flavoured Tea bags

4. 3 Roses

To keep a relationship going, every young couple needs a little time to talk. The perfect colour, strength and aroma of 3 Roses creates that perfect tea moment where couples can spend time talking about the everyday issues that matter to them. Whether it is playful banter, a little mischief or serious conversation, in the final reckoning, it’s these little moments and conversations that make relationships stronger. Key facts

* 3 Roses is a 30 year old regional brand and is the market leader in Tamil Nadu. * It is one of the largest FMCG brands in Tamil Nadu across categories. * It has a strong presence in both in home and out of home segments. * It has two functionally differentiated variants - 3 Roses Natural Care and 3 Roses Mind Sharp. Range : 3Roses Regular, 3 Roses Natural Care, 3 Roses Mind Sharp

Marketing Mix of HUL
Product
Price
Place
Promotion

Bibliography
1. http://www.teaboard.gov.in/pdf/stat/Global%20Scenario07.pdf 2. http://www.docstoc.com/docs/11516173/TATA---TEA
3. http://www.hul.co.in/
4.

Cite This Document

Related Documents

  • Indian Tea Market Analysis

    ...perspective of tea market  Current scenario  Consumer habits and practices  Consumer awareness  Market size and growth  Major players  Positioning  Future trend  Conclusion  Bibliography  INTRODUCTION The Tea Business in India is nearly a 170 years old practice. This agro-based industr...

    Read More
  • India Rural Market - Analysis

    ...Case Summary • Urban markets in India are already crowded and saturated. • Rural India is undergoing a phenomenal changes. • FMCG & consumer durable companies, which are basically “volume targeters” need to find new market regions and/or segments to sustain their topline & bottom-line. • Companies can exploit rural market segmen...

    Read More
  • Tea Industry in India

    ... | | Tea Industry in India | | | ...

    Read More
  • Analysis on Deodorant Market of India

    ...K.J.Somaiya Institute of Management Studies and Research Marketing Management Deodorant Market of India - An Overview (Main Brand Studied – Dove) Submitted to: Professor Kiran Sharma Submitted by: Sneha M Zawar PGDM (Communications) Roll no: 60 05 – August – 2012 Contents Overview of Market:...

    Read More
  • Modular Kitchen Market in India

    ...Modular Kitchen Market in India 2014-2018 A modular kitchen is a kitchen with a range of fixtures and cabinets put together in a planned manner that facilitate the effective usage of the spaces in a kitchen. A modular kitchen normally constitutes wooden cabinets, countertops, internal accessories such as built-in covered baskets household ...

    Read More
  • Tea Product Export from India

    ...------------------------------------------------- History of tea in India The cultivation and brewing of tea in India has a long history of applications in traditional systems of medicine and for consumption. However, commercial production of tea in India did not begin until the arrival of the British East India Company, at which poi...

    Read More
  • Tea in India

    ...researchandmarkets.com/reports/573364/ Tea in India Description: Commodity prices of tea were very dynamic and all players had to increase their unit prices in 2009. The rise in prices has resulted in loose tea losing out to small local tea manufacturers, as it has been able to absorb the rise in costs. The price points of local tea players ...

    Read More
  • Tea Industry in India

    ...[Type text] TEA INDUSTRY IN INDIA By, Snehal Zarekar Abm09024 Tea Industry in India , IIML Page 1 LETTER OF TRANSMITTAL February10, 2013 To, Prof. M.K. Awasthi (Associate Professor) Indian Institute of Management Lucknow, India Sir, enclosed is the project report on “Tea Industry in India”, which you authorized me t...

    Read More

Discover the Best Free Essays on StudyMode

Conquer writer's block once and for all.

High Quality Essays

Our library contains thousands of carefully selected free research papers and essays.

Popular Topics

No matter the topic you're researching, chances are we have it covered.