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Faculty of Economics, Management and AccountancyBachelor of Commerce

Advanced Marketing Management

Mrs. Marika Fsadni

Report on:

Marketing Plan for local tea company“Royaltea”

Erasmus Student Group:

Florent DIERIKXPerrine MORELMartin REICHERZERValerie ROGAZZOJennifer SNOEK

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INDEX

I. Introduction of our company 3

II. Marketing Audit 5

A. External audit 5

1. Business and economic environment 52. World tea market 63. Maltese tea market 104. Explanation of the 7 P’S 115. Competitor analysis 11

B. Internal audit 16

C. Issue analysis 16

D. Assumption 17

E. Objectives 15

III. Marketing Strategies 18

A. Market gap 18

B. Product policy 19

C. Marketing mix of Royaltea 20

1. Product 202. Place 213. Price 214. Promotion 215. People 226. Process 237. Physical evidence 23

D. Action programmes 23

IV. Appendix 24

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Explanation of the project

Our consultancy firm has been engaged by a local company to prepare a report on the launch of a new tea brand (“Royaltea”) in the Maltese Market. Our mission is it to develop a marketing plan for the new brand they like to introduce. This includes a Marketing Audit, the search for a Market Gap and finally a Marketing Strategy to introduce the new brand into the Market.

I) Introduction of our company

Consultancy ltd

Mission statement:

RDMSR is a leading marketing consultancy firm that has assisted international clients in developing and improving their business in the Maltese market and throughout Europe. Our mission is to turn knowledge into value for the benefit of our customers. We offer market research, market entry, business plans, marketing plans and project management. Success is about having a global point of view but also knowing the local business you are in. This is where we come in: We can assist you in conducting your business in a foreign market by researching and implementing business strategies so you are saving what is most important to you – Your time and money!

Corporate objectives:

Our objective is to provide every client with quick and effortless access to the European Market. We are committed to delivering long-term value for our clients through outstanding service and dedication.

Who are our customers?

Our customers range from small companies to large scale industries. What they have in common is their need for fast access to knowledge and local resources on the Market.

Company history:

RDMSR Consultancy Ltd was established in 1995 and is able to look back on more than 10 years of successful consultancy services. Its history can be traced through the names of its founders: Martin Reicherzer, Florent Dietrik, Perrine Morel, Jennifer Snoek, and Valerie Rogazzo whose initials form the name RDMSR.

Today these letters also stand for the company’s core statements:

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Research: Research is most essential in our work. Our consultants will be doing the research for you - Saving you time and money!

Development:We will be developing a marketing plan tailored to your needs. As known experts in the Maltese market and throughout Europe we are providing you with our knowledge and competence.

Market orientation:We manage to keep up with the fast changing environment of the market by constantly monitoring sudden changes or trends and immediately responding to them.

Strategy:Every company needs a strategy to meet the changing markets.We will provide you with a strategic Marketing Plan to shape your company’s objectives. This will lead to a better co-ordination of company efforts and provides clearer performance standards for control.

Results:Our plans and actions are result orientated. We will be measuring and evaluating accomplished results and if necessary take corrective action.

For more information please contact us or write an email to: info@rdmsr.com

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II) Marketing Audit

A. External Audit (Opportunities and Threats)

1. Business and Economic Environment

Political/Legal Environment

The entity which has the biggest impact on tea trade today is SAARC (South Asian Association for Regional Cooperation). Globally seen it is the World Trade Organization (WTO) that has the ultimate authority, with decision-making power that already influences tea tariffs, import/export rules, subsidies and quotas. The third major supplier region is Africa, with Kenya exporting the most. It belongs to a regional trade entity, the Common Market for East and Southern Africa (COMESA). These regional and global systems are creating new opportunities and threats for tea trade. Tea supply may be unstable because of various factors e.g. military conflicts.

Economic Environment

The tea industry is dependent upon only a limited number of sources for their raw materials which are much more vulnerable to wide fluctuations in price and/or availability of the material. Since tea is grown in over three dozen countries spread across the entire globe, the likelihood of shortages of supply is extremely small. Although there are a great number of countries producing tea, shortages can occur relative totheir specific origin. This could result in increased costs to packers of tea who are dependent upon those origins to maintain their flavour profiles. Shortage of specialty tea, may also occur. However, it can be assumed that with higher demand for high quality tea the supply will expand as well -- as producers switch from growing lower profitability mass market tea to higher profitability specialty tea. Tea should remain in excellent supply over the next three to five years. Demand should also remain in relative sync with supply. Prices should stabilize for mass market tea but will increase moderately for higher quality specialty tea.

Socio-cultural Environment

Producers have to take note of the changes in consumer tastes and make tea drinking more convenient, pleasant and fashionable.

- Consumers live a healthier lifestyle and have greater responsibility for their health.

- Customers have improved knowledge about nutrition information.- Focus on anti-stress and simplification of one’s life.- Greater reliance on natural homeopathic treatments to prevent disease.- Concern for the environment - buying decisions have to be compatible with

that concern.- Preference for quality products offering true value.- Acquisition of affordable luxuries.

There are demand forces that are creating a new industry - healthy foods. It is a long term trend and will probably grow as more knowledge surfaces about the role foods and beverages play in maintaining health. The demand for tea is also expected to be strong over the next decade.

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Technological Environment

Modern technology has been introduced in the tea industry to become less dependent onunpredictable weather conditions which affect productivity. It has made it possible to increase the plantation area by minimizing space; also labour costs have come down and the entire process has become much faster.

2. World tea market

History of Tea

Legend has it that tea was discovered in China in 2737 BC by the Emperor Shen Nung. It arrived in Europe in the 17th century, first brought to Portugal and Holland.At first, only the nobility drank tea and now it is the beverage most drunk after water because of its taste and its healthy attributes. For example, in the UK, over 163 million cups of tea are drunk every day. A lot of “tea bars” are starting to open across the world.

Types of Tea

There are several ways of classifying tea like the country or region of origin. The tea is divided in three types:

Black teaBlack teas are produced by withering, cutting, rolling, fermenting and drying the tea leaves. The infusion can be light or dark in appearance, varying in colour from orange to brown and will usually have a strong taste.

Green teaGreen teas are teas that have been picked and rolled before firing. This stops the veins on the leaves breaking, preventing the fermentation process, so that the leaf does not turn brown. The brewed tea is pale yellow or green in colour.

Oolong teaOolong teas are semi-green teas, produced by stopping the fermentation process just as the leaves start to turn brown. The leaves are then fired or dried and deliver a yellowish infusion.

Data about tea market

World tea production continued to reach new highs in 2004, when output grew by 2 % to reach an estimated 3.2 million tonnes, according to an FAO report prepared for the Intergovernmental Group on Tea meeting in Bali (20-22 July 2005) to review the currentWorld tea market and its medium-term outlook.

The expansion in production was due mainly to the increases recorded in Turkey, China, Kenya, Malawi, Sri Lanka and Indonesia. The growth in output from these countries more than offset declines in other major producing countries, including India and Bangladesh.

In China, tea output for 2004 approached the 800 000 tonnes milestone as policy initiatives to promote production and trade of tea began to have an impact on the sector.

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In Sri Lanka, production increased slightly by 1.3 % to 309 000 tonnes in 2004, reflecting the recovery from crop losses after devastating floods in low grown tea areas of the island in 2003. In Indonesia, where a 1.2 % growth was recorded, output reached 170 000 tonnes in 2004.

In Turkey, production was reported to have expanded dramatically in 2004 as output increased by 32 % to reach around 205 500 tonnes, due to higher yields.

Tea production in Kenya increased by more than 11 % in 2004 to reach 328 000 tonnes, as a result of favourable weather in most of the growing regions and the expansion in processing capacity. Malawi also reported a significant increase of 19 % in tea production with output reaching 50 000 tonnes.

In India, tea production declined by 4.3 % to reach around 820 200 tonnes due to unfavourable weather conditions and the closure of up to 70 tea gardens in Assam.

Exports and imports

World tea exports increased by 4.4 % in 2004 to reach 1.47 million tonnes, as shipments from all major exporting countries increased during the year.

Kenya was the largest exporter, once more surpassing Sri Lanka. The 8.9 % increase in exports from Kenya brought total shipments for the year to almost 293 000 tonnes. A similar increase (8.9%) was also recorded by Indonesia.

Tea exports from China expanded by more than 7 % to reach 282 000 tonnes, and were dominated by green tea, which accounted for more than 75 % of its total exports.

World net tea imports continued to increase in 2004, by 1.5 %, reaching 1.42 million tonnes. This trend reflected the increases in traditional developed country markets of the European Community (an increase of 2.4 %), the United States (5.3 %) and Japan (2 %), where imports reached 215 000 tonnes, 99 000 tonnes and 56 000 tonnes, respectively.

Most of the growth in these markets is reportedly in response to promotional efforts on the health benefits of tea consumption. Available evidence from medical research suggests that moderate consumption of tea offers protection against heart and blood vessel disease, some cancers, and bacterial infections.

Prices

In 2004, tea prices opened at US$1.56 per kg in January and closed at US$1.73 per kg in December, reflecting an improvement on the demand side, according to FAO.

A recent study on the market evolution between 1993/1995 and 2001/2003 indicated that, out of 27 agricultural commodities, tea showed the second lowest variability in prices: 2 % decline compared to 39% for cocoa and 38% for coffee.

"Recent developments in the world tea market suggest that the major players have succeeded in bringing the market towards balance," said David Hallam, Chief, FAO Raw Materials, Tropical and Horticultural Products Service.

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Demand has been stimulated in the major producing countries themselves, notably for black tea, and supply has been tailored to market opportunities," Mr. Hallam added.

The meeting of the Intergovernmental Group on Tea will be preceded by the International Tea Business Conference (18 - 19 July 2005) which will take place at Bali's International Convention Centre.

The tea market is very competitive and is relatively elastic, if PG Tips raised their prices 20p more customers would more likely go for a substitute like Typhoo Tea as in theory they would be cheaper.

The distribution of the tea production in the world:

- Black tea: more consumed in Europe, India and north of America. Represents 80% of the worldwide consumption.

- Green tea: less than 18% of the worldwide consumption.- Oolong tea: Consumed in China and Japan. 2% of the worldwide consumption.

Forty countries cultivate tea. China, India and Sri-Lanka bring more than a half of the production.

3% 9%5%

6%

28%24%

9%

16%

Japan

Kenya

Turkey

Indonesia

India

China

Sri Lanka

Others

The worldwide production in 2003 was 3.15 million tons.The world tea exports reached 1.4 million tons in 2003. In 2003, global tea imports reached 1.39 million tons.

Main consumer countries of the world (1995 – 2004)

9%

23%

17%1%9%

23%

9%5%

3%

1%

Europe

The USA

Canada

Japan

India

China

Sri Lanka

Africa

Others Asia

Others

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Consumption:

Women between the age of 30 and 50 still represent the biggest group of tea drinkers. They mainly drink it during leisure-time breaks and in social outlets. Women prefer flavoured teas such as vanilla, mango and chai, as well as Earl Grey.

Men comprise an increasing segment that is seeking the enjoyment of tea. They have heard the reports that claim tea is good for you and are consuming tea for health reasons, as well as to relieve stress. Men generally prefer the basic teas, including oolongs and greens.

The young consumers’ interest in tea is driven by the many new introductions and great marketing. They also try tea for health reasons; however, they are more apt to be persuaded by great packaging and innovative “hip” versions of a traditional tea.

Main Players:

In the early 1990s the tea market was extremely concentrated: 90% of the Western trade was in the hands of only seven transnational companies and 85% of world production was sold by multinationals. This concentration has increased since. This means that transnational companies have a presence at almost all stages of the journey of tea from tea bush to tea bag. This huge degree of power is often used to manipulate prices. According to a report by the World Bank (1997) the processing and distribution of tea in 1990 was controlled by four major UK corporations - Unilever/Brooke Bond, Cadbury Schweppes, Allied-Lyons (now Tata Tea) and Associated British Foods/Twinings. Together these controlled 80% of the tea market in many countries. In a market that is declining overall, the two manufacturers experiencing growth are Unilever and Twinings.

Unilever is the major supplier of black tea in the world with 15% selling. Unilever’s main brands are: Lipton, PG Tips and Red label have a turnover of 2.35 billion Euros each year in 100 countries. Lipton Yellow Label is the brand most sold in the world.

Auction tea

The tea prices fluctuate according to the time of the year, availability, quality and demand. The price of the tea market is given by auctions. The final London tea Auction was held in 1998. Major auction centres are in Mombassa (Kenya), Colombo (Sri-Lanka), Calcutta (India), Jakarta (Indonesia) and Limbe (Malawi). Sometimes, the tea is sold directly from the producers to the distributors. The fair-trade labelling organization’s (FLO) fair-trade premium for tea is calculated by adding € 0.50 per kilo to the word auction price. The two main brokers in the world are:

- J-Thomas and Co. - Carritt Moran and Co.

The different tastes of tea

There are nine main tastes of tea in the world:- Original tea

(from specific countries or regions)

- Standard teas- Medicinal teas- Organic teas

- Hot or cold teas- Perfumed teas- Seasoning teas- Decaffeinated teas- Exotic teas.

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3. Maltese tea market

The consumption per capita is 3 cups per day. It represents 250 000 cups per day in Malta.

The three main leaders in Malta are :- Lion Brand : 60 % of the market- Teatley- PG Tips

Before, maltese people was used to drink coffee. With the english colonisation, the culture of tea emerged and now , the tea is the famous drink of Malta.

Analyse of the different imports of tea in Malta

National Statistics Office - Malta International Trade UnitNB: Some Countries may be repeated under the same CN code because of different units of measure from different systems

Arrivals/Imports January to December 2004 -PROVISIONAL

Country Value Lm Kgs

Green tea in immediate packings of <= 3 kg

DENMARK 241 70ITALY 1585 283UNITED KINGDOM 23226 5178KENYA 844 212CHINA 32 4SRI LANKA 243 43

AUSTRALIA 744 129Total: 26915 5919Green tea in immediate packings of > 3 kg

ITALY 2546 428NETHERLANDS 254 187UNITED KINGDOM 1149 159

CHINA 224 50JAPAN 89 7SRI LANKA 4257 1704Total: 8519 2535Black fermented tea and partly fermented tea, whether or not flavoured, in immediate packings of <= 3 kg

FRANCE 255 4ITALY 640 335

NETHERLANDS 44797 41653UNITED KINGDOM 759515 482813BRAZIL 1361 335SRI LANKA 1296 596Total: 807864 525736Black fermented tea and partly fermented tea, whether or not flavoured, in immediate packings of > 3 kg

GERMANY 4807 587ITALY 1534 563NETHERLANDS 10397 1142UNITED KINGDOM 4008 852SRI LANKA 23 76UNITED ARAB EMIRATES 83 85Total: 20852 3305

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With these different datas, we can see that the black tea is more imported than the green tea in Malta. The packings of <= 3 kg are more imported in Malta than the packings of > 3 kg. The most important countries for the import of green tea in Malta are the United Kingdom and Italy. For the black tea, the most important countries are the United Kingdom and Netherlands.

4. Explanation of the 7 P’s

The traditional marketing mix contains of four major elements, the "4-Ps of marketing". As defined by Kotler et al. (1999):

Product: "Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. In includes physical ob-jects, services, persons, places, organizations and ideas." Price: "The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the prod-uct or service." Promotion: "Activities that communicate the product or service and its merits to target customers and persuade them to buy." Place: "All the company activities that make the product or service available to target customers."In the context of services marketing, Booms and Bitner (1981) have therefore suggested an extended "7-Ps" approach that contains the following additional "Ps":People: All people directly or indirectly involved in the consumption of a service, e.g. employees or other consumers. Process: Procedure, mechanisms and flow of activities by which services are consumed. Physical Evidence: The environment in which the service is delivered. It also includes tangible goods that help to communicate and perform the service.

5. Competitor analysis (Appendix 1)

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13

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Boston Consulting Group Matrix - Competitor Analysis (Malta)

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6

4

Star

?Cash-cow Dog

1) Lion Brand2) Tetley3) PG Tips

4) Typhoo5) Twinings

6) Projection of own company

Lion Brand is the main player in the Maltese Market with a Market Share of 60%. Tetley is right behind Lion Brand, experiencing low growth but having a high market share. PG is the third big player in Malta together with Typhoo it is also well represented in Malta. Twinings is experiencing high growth with fruit and herbal teas that focus on the healthy attributes of tea and are a lifestyle product that is tailored to the new needs of the customer. Young consumers demand for healthy products, a tea that is enjoyable, a drinking experience.Under no. 6 with we have he projection of our own company over the next year. We would like to see it as a star developing towards a cash cow.

Relative Market Share

Relative Market Growth

HIGH LOW

HIGH

LOW

1

2

3

5

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B. Internal Audit (Examination of local company that engaged us)

SWOT Analysis (summary of findings in the Marketing Audit)

External Opportunities

Shortage of tea supply unlikely Supply should remain stable over next 3-5 years Demand should remain in relative sync with

supply Mass market tea prices will stabilize Consumers are living a more healthy lifestyle Consumers prefer quality products that offer true

value Modern technology in the tea industry will be

able to increase productivity Tea production in 2004 reached new highs and

increased by 2% World tea export increased by 4.4% in 2004 to

1.47 tonnes Growth in tea market due to promotional efforts

of healthy attributes of tea

External Threats

Limited number of raw materials Unstable tea supply of high quality tea High quality tea prices will increase moderately Tea market is very competitive and relative

elastic Strong local competition like Lion Brand (60%

market share) Maltese customers are loyal to their local brand Global players like Unilever, Lipton, Twinings

etc. control 80% of the world tea market

Company Strengths

Local company that will be favoured by the Maltese

Diminishment of Financial Risk (no exchange rates or import from other EU countries)

Insider knowledge of Malta

Company Weaknesses

New company - needs to establish its position in the market place

Brand name is little known

C. Issue Analysis

Main issues that should be addressed in the Action Plan: Company needs to gain experience in the market place Aggressive promotion efforts to establish brand name and gain market share Create effective marketing mix Establish company image of high quality, great value for money Find distribution deal with main tea shops, supermarkets in Malta Start aggressive promotion (e.g. free gifts included in purchase) to win customers of

Lion Brand Try to gain market share of Lion Brand.

D. Assumptions

With respect to the tea market climate it is assumed that: Strong competition in the market place will force price levels of products down Royaltea will only be able to differ from its competitors by introducing aggressive

promotion tactics

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Tea supply will remain relatively stable Demand should remain in sync with supply Prices for high quality tea will increase moderately Prices for mass market tea will stabilise

E. Objectives

The different managers should know the sales and marketing objectives of the firm in order to achieve these objectives. We are going to use the method SMART: Specific: The objectives have to be clear. For example, in each shop, the company of

“Royaltea” must achieve the selling objectives. The turnover to reach will not be the same in the different shop because we make the selling objectives according to size of the shop, the frequentation, the type of the clients.Measurable: The company has to follow the different targets in the sales outlets and if each

shop allowed to reach the objectives. To measure the sales we can calculate the sales by day in order to understand how the client bought the product. With these data we can improve the strategy and the sales. The commercials can ask to the supermarket to put the product in a different way or to make more promotion. Achievable: The targets have to be realist. At the beginning the turnover would grow slowly

and after the promotion, it would have a faster expansion. If we reach to win clients from our main competitor (in a first time) and from the others tea brand (in a second time), the sales would grow increasingly. The firm should have a long term’s vision and should be reactive in front of decisions or problems which can occur. Relevant: the objectives have to be founded on fact and not on suppositions. The firm has to

respect its general strategy and its image. The firm should take into consideration the sales of its competitors in order to be based on relevant objectives. Timed targeted: each objective should have a deadline. It can allow measuring the different

sales of the day, of the week, of the month, according to these data, the firm can change the objectives or makes promotion to reach these objectives.

The objectives for the first year: - 4 % of the market share of Lion brand, the main competitor.- 2 % of the others tea’s competitors.- 1 % of the coffee drinkers- Introduce company into the market, strengthen and improve its position- Penetrate the black tea market and achieve revenue of 3 million Lm p.a.- Penetrate health market with fruit and herbal teas achieve revenue of 1.5 Lm p.a.

We expect to hit 25 % of Lion Brand’s clients because it is our main competitor and the products and the prices are very close and competitive. With the strategy, the promotion and the novelty of our brand we can expect to attain a lot of customers. We look forward to hit 8 % of clients of the others competitors because we are in the same segment of product: the fruit tea, the health tea and the black tea. To reach this objective we will make a lot of promotion in order to attract new clients, because we know that the population like and expect the promotional events to buy food and drink.We expect to hit 2 % of the market of the coffee because the black tea is close to the coffee in term of taste, energy (caffeine).

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New markets

ExistingProducts

New Products

Existing markets

III. Marketing Strategies

A. Market Gap

Regarding our research in Maltese supermarkets and pharmacies we have come to the result that there is no market gap in the tea market. It is important to point out that once the Maltese customer decides to consume a certain brand he or she will be very loyal to the product and it will therefore be hard to convince him or her to buy another brand. This is why the local tea brand Lion Brand has a Market Share of 60 %. Customers like it because it is cheap and they receive great value for their money. With the brand Royaltea we are going to introduce already existing products in an existing market and focus on Market Penetration.

Ansoff Growth Strategies

Our recommendation to the local company that engaged us is to compete with Lion Brand the biggest competitor. We found out that it is just possible to gain Market Share by doing better promotion than Lion Brand.

Producing the product in Malta is less expensive for Royalty because costs such as: Exportation, Exchange rates do no exist and therefore do not pose a threat to us.

Conclusion : the gap

We will be introducing Black tea, Peppermint tea and Fruit tea.Objective of Black tea: Compete with Lion Brand because Black Tea is sold most in MaltaCustomers like the strong taste of it.Additionally we want to introduce Fruit and Peppermint tea meeting the changing lifestyles of our customers (emphasis on health).

B. Product policy

Market Penetration

Market Development

Product Development

Diversification

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Name of the local brand that is going to be introduced in the Maltese Market:

“Royaltea”

Reasons for choosing this brand name:

Local tea brands in Malta are Lion Brand, Tower tea and Star tea. Royaltea is a strong name, easy to remember, refers to a good brand because the associations with royalty are “master”, “the best”, “the strongest”, “luxury”.The crown represents the power because we want to be the no 1 on the marketIt can be associated with quality, a luxury brand that is available for everyone at a reasonableprice; customers are receiving a good value for their money.There is also a “name-game” the brand name “Royaltea” resembles the word “Royalty” giving associations that our tea is made for the nobility.

Slogan: Enjoy the luxury…

…. of black tea

Reasons for choosing this Slogan:

The Slogan: “Enjoy the luxury…” stress the uniqueness of our product. It stands for high quality, tasteful and a wide selection for low prices. The Slogan is simple to remember and people connect the jingle easy with our product. It fits very well with the Logo and the name of the product and tells the customer in a whole package the image of the product.

The Logo

Explanation of the different choices :

- The style of the crown: It is a common symbol that refers to the royal Kings and Queens; it is easy to remember and catches the eye of the customer. The style is very simple and modern. Simple because we want to show that that the crown represents the best quality but simple because our prices are not expensive. The

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modernity represents a new birth for the tea because the young people believe that the tea is a beverage for old people. With this modernity it will attract a new segment : young target.

- The colours: the red, the yellow. We chose a red background because it represents the strength, the power; the power is linked with the crown which represents the status and the sovereignty of the king. The yellow represents the gold, the colour of the king; it represents the wealth of the ingredients, the recipe, and the taste.

- The style of the writing: we chose a writing that represents the royalty and the modernity; it stands for the image of the brand and our values: young, good quality, low prices.

Our goal should be to attack our main competitor Lion Brand, gaining more Market Share by selling Black tea as well as Fruit and Herbal tea, so we can cover the existing tea Market but also focus on new emerging markets like the health market.

C. Marketing Mix of Royaltea

1. Product

Royaltea will be a high quality product offered as specially blended Black tea as well as Fruit and Herbs.

Contents of the Royaltea black 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)

Contents of Royaltea fruit and herbal tea is 25 bagsThis is a standard size, very common on the tea market (comparison with competitors)

The different tastes offered will be:Peppermint, Camomile, Citrus fruits, Red fruits, Mango & Peach, Apple & Cinnamon, Vanilla

Customer attitudes and buying behaviour have changed this is why Royaltea is also offering Herbal and Fruit tea.Peppermint and Camomile are tea flavours that target the Health Tea Market.

Fruit Teas such as Citrus fruits, Red fruits, Mango & Peach, Apple & Cinnamon and Vanilla are flavours that should be considered as consumption teas.

Packaging: (Appendix 2)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.

Target:

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We want to touch the target group in a progressive way. At the beginning, it is important to touch the consumers of black tea, fruit tea and health tea. In second time, we should attract the consumers of the main competitor: “Lion Brand”. The next step will be to touch the tea drinkers in general and at the end, the consumers of coffee. We can argue for the coffee drinkers that the black tea is as strong as the coffee and good for the health.

2. Place

Tea is imported from India because the company is able to get high quality for a reasonable price and will then be blended and packed in Malta.The final product will be distributed to Retailers such as Supermarkets and small shops so the end consumer has easy access to it.

Place in supermarket:The fruit and herbal tea boxes should preferably be placed on top of the shelves in the supermarkets. Beneath them on the middle and lower levels the black tea should be placed according to the content of tea bags. 40 bags should be placed higher than the ones containing more bags.

3. Price

Prices for the tea should be as the following:

Black tea 40 bags 0,49 LmBlack tea 80 bags 0,89 LmBlack tea 150 bags 1,35 LmBlack tea 250 bags 1,95 Lm

Camomile 25 bags 0,69 LmPeppermint 25 bags 0,79 LmCitrus Fruits 25 bags 0,85 LmRed fruits 25 bags 0,85 LmMango & Peach 25 bags 0,85 LmApple and Cinnamon 25 bags 0,85 LmVanilla 25 bags 0,85 Lm

Reasons for pricing policy: Royaltea black tea is competing against the main player on the Maltese Market Lion Brand by setting a higher price but offering more value for it. Various promotion activities, giveaways and advertising on radio and television will help to establish the brand and gain market shares. The prices for fruit and herbal tea are adjusted to the Maltese Market and will therefore be able to compete with already existing brands.

4. Promotion

The promotion is the most important point to launch our products because we want to be able to compete with our biggest competitor “Lion Brand”. We want to focus on this point because the Maltese like to purchase bargains or buy products that offer free gifts. Other brands do not offer as many promotion and free gifts as “Lion Brand” does. This is why it is important to focus especially on the Promotion activities of the marketing mix. We are going to set up original events in order to attract new customers and consumers of other tea brands.Our objectives:

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Promotion in the supermarkets:

- Set up a stand: we want to set up a stand in the supermarket in order to make tasting to the supermarkets’ clients. The stand should be placed between the fresh food and the food withthe aim to attract all the consumers. The stand should represent the brand with the colour of the company, the logo, the environment of royalty. For example, the stand could be shaped like a crown. Moreover, the hostesses can give some presents to the children like plastic crowns, balloons with the logo of the brand and pens with the logo.

- During the launch of our product (one week), all the customers at the supermarket will receive a sample of “Royaltea” for free at the cashiers including a voucher which explains the game to win a trip to London.

- Promotional offers during the year: If a client buys a box of 150 bags, he will get a free cup or a spoon or a little kettle. If he buys a box of 250 bags, he will get a free box of Camomile tea.

- During two months, we can organize a game: when you buy Royalty, you win some points and with certain numerous of points, you can get a present which represents the brand image.

Promotional event for Royaltea launching:

During one weekend in a big city in Malta (preferably Valetta on the freedom square) we will organize a big event.

- In the street, there will be hostesses with special clothes (king and queen clothes) who will distribute samples and cups with tea to offer the product to passer-by. They will distribute flyers

- There will be a show about the theme of British Royalty with flags of our brand. The artists will be dressed in royal clothes and hold a speech about royalty. After the show, they will hand out flyers the people can fill in so as to win the weekend trip to London. At the end of the event, it will have a drawing of lots. The winner will receive the present (tea boxes) via post way

- For the child, there will be inflatable game in castle shape to jump. The staff will keep an eye on the children while the parents take part in the competition

- In the street there will be a lot of decoration of the brand image

Advertisement (Appendix 3)

At the beginning, the strategy is to focus on the Internet, the radio and on daily newspaper (Times of Malta etc) to reach a lot of customers. These media are noticed by a large target group which will help the firm to be known. After six months or one year, we will begin a campaign on television, in magazines and on busses.

5. People

The employees and the consumers are very important for the product’s development. They represent the image of the brand; it is for that the services have to be optimum. The employees and more particularly the commercial people and the hostesses should be trained in order to know the product and to can sell it properly. Moreover, in the other hand, the clients

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are important because they passed a message to the potential clients. To allow this, the hostesses at the beginning and the employees after have to explain the quality, the different taste of the product.

6. Process

We have seen that the selling process is vital in the decision making process. In the shops, the selling is making by the advice. The clients like to feel reassured in front of making process. So we conclude that one time per three months, commercials and hostesses will give advices to the consumers in order to make him more confident the product.

7. Physical evidence

The environment should be very clear, clean and attractive because the decision making process takes into account these elements. Moreover, in the shelves, the products should be stored correctly in order to attract the consumers. We have to ask to the staff that we need light in order to bring out the colours of the product.

D. Action Programmes

Marketing Strategy

Action ResponsibilityControl System

TimingCosts

Lm

Marketing communication

campaign

Advertisement on TV, internet, radio, newspapers, campaign ad on the street

Marketing managers

Monthly sales

figuresWhole year 500,000

Set up special stand for personal selling

Marketing Managers, Sales

managers,Counter staffSupervisors

Count customers

and monitor

sales per moth

Jan 2007 –April 2007

20,000

organize promotional event in Valetta

Marketing Managers,

Supervisors, Hostesses

Count participants

April 2007 50,000

Promotional offers e.g. free gifts with purchase

Marketing Managers, Production Managers

Produced output figures

Jan 2007 –May 2007

10,000

Organize sweepstake “Weekend trip to London”

Marketing Managers

March 2007 –April 2007

5,000

Loyalty scheme “Point system”

Marketing Managers, Customer Service

Customers taking use

of point system

Whole year 5,000

Marketing promotion campaign

Distribution of free samples to customers at cash point

Marketing Managers, Cashiers, Supervisors

Count customers

First weekof January 2007

5,000

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APPENDIX

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Appendix A: Packaging

1- Half Left

Directions :- Boil freshwater and pour onto

teabag.- Leave for 3-5 minutes.- Add sugar, honey if desired.

Net Weight 70 g

Ingredients : Black tea

Use one bag for one cup

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2- Half right

Net Weight 70 g

ROYALTEA is loved for its rich flavour and full strength. It

contains only premium quality tea that is carefully selected and

blended.

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2- Package bottom

Exclusively produced for: Attard and sons Ltd.68, Republic Street, Valetta, MALTA.

Packaging date 20/02/2005Best before 20/02/2008

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2- Package face

Enjoy the luxury…

…of black tea

Net Weight 70 g

40 Tea Bags

Of Malta

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2- Package up

Net Weight 70 g

40 Tea Bags

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Appendix B: Detailed analysis of main competitors

A. Unilever: Marketing mix

The brand for the tea is: LIPTON. Lipton is one of the world's great refreshment brands, making a big splash in the global beverages market with tea-based drinks including leaf tea, infusions, ready-to-drink tea and other healthy, refreshing alternatives to soft drinks.

Product:

Features: Lipton developed a lot of particular features like: - Ready-to-drink teas.- Lipton Pyramid tea bags.- Lipton Cold Brew tea bags that allow iced tea to be freshly brewed in cold water in

just five minutes.A very important thing for Lipton is the health properties that the tea provides to each person who drinks Lipton tea. Teas have antioxidant health properties, Lipton has a label: the AOX seal (supported by the Unilever Health Institute) which ensures minimum antioxidant levels needed for efficacity. Lipton developed different programs of healthy tea :

- Tea antioxidants: Antioxidants can help the body protect itself against free radicalsmolecules that can damage cells. Antioxidants in tea called flavonoids can do that.

- Heart health research: drinking black tea is associated with a reduced risk of heart disease.

- Tea and body protection: a healthy immune system protects the body from infection and disease (anti-allergic, anti-inflammatory, anti-viral and anti-bacterial).

- Tea and performance: recently investigators have been exploring the tea potential benefits on mental alertness and physical performance.

- Appearance: fresh-brewed tea, both black and green has no sodium, no sugar, no fat and virtually no calories, yet tea is a satisfying, aromatic beverage and helps with weight loss.

Quality: The Unilever Health Institute was created in 1997 to develop knowledge about the benefits of tea on health. Sugar levels in Lipton Ice Tea are lower than standard carbonated soft drinks on the market in Europe; we're lowering the levels in much of the range by around 10%.

The tea provides of famous countries where the culture of tea is very old and the level of quality is very high. This allows having a good quality for the different Lipton’s products.

The different brand:- Lipton black teas : Orange Pekoe and Pekoe cut black tea; decaffeinated hot tea; cold

brew; decaffeinated cold brew; orange and spice; blackberry; honey and lemon; spiced chai; raspberry; french vanilla; mint; flavoured black tea collection.

- Lipton green teas: 100% natural; 100% natural decaffeinated; Orange, passion fruit and jasmine; lemon ginseng; honey; mixed berry; mint; green tea collection.

- Herbal tea: lemon; quietly chamomile; cinnamon apple; orange; peppermint; honey and lemon; ginger twist; raspberry; peach; chamomile; mango; herbal tea collection.

- Traditional tea product: english breakfast; earl grey; premium tea pods.

Packaging, size: All the boxes of Lipton teas are yellow to recognize the brand everywhere, each box correspond to its own sort of tea. For example, for the orange and spice tea, a picture of orange and vanilla are printed on the box over the yellow :

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There are different sizes in each brand of tea, it depends of the number of tea bags inside. It can be boxes of 25, 50, 100 bags. The famous it is the 20 bags box.

Promotion:

To promote Lipton and to be recognize by consumer, Unilever decided to make yellows boxes, this colour allow to be recognize in the supermarket because this colour is very flashy. The marketing campaign represents all that Lipton stands for brightness, vitality and fun with natural goodness. A famous sentence to promote Lipton tea: “LIPTON. That’s why we’re The Tea Experts”.

In addition, Lipton has also teamed up with the Discovery Health Channel and the US National Parks Foundation to show what tea can do for you.

Place:

Lipton is the world's leading brand of tea. Lipton is the global market leader in both leaf and ready-to-drink tea, with a global market share nearly three times larger than its nearest rival. Available in over 110 countries, Lipton is particularly popular in Europe, North America and the Middle East and parts of Asia. You can buy it in different stores (supermarket, grocery...), or in direct on Internet too, you can order for a delivery at your home.

Price:

Prices depends on the different boxes size (20, 50, 100 bags) and of the different brand (black tea, green tea, herbal tea or traditional tea. The less expensive are black and green teas. The different prices are in the same cost bracket of Lipton’s competitors.

The different price and brand in Malta :

- Yellow Label Tea (black tea), 25 tea bags : 0,45 Lm- Yellow Label Tea (black tea), 50 tea bags : 0,83 Lm- Yellow Label Tea (black tea), 100 tea bags : 1,49 Lm- Lemon Flavour Tea, 25 bags : 0,88 Lm- Camomile Flavour Tea, 25 bags : 0,88 Lm- Mint Tea, 25 bags : 0,88 Lm- Breakfast Tea (premium black tea), 25 bags : 0,88 Lm- Earl Grey Tea, 25 bags : 0,88 Lm- Forest Fruit Tea, 25 bags : 0,88 Lm

Lipton products are not numerous and they are not well placed in the supermarket because ths customer can’t see easily these products.

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B. Pickwick: Marketing mix

The brand Pickwick has become a strong international tea brand and can be found in many countries around the world.

Pickwick offers a wide range of tea:- Fruit teas (lemon, peach, tropical fruit…)- Herbal teas (chamomile, peppermint…)- Black teas (Darjeeling Blend, Earl Grey…)- Green teas (green tea with lemon)

Marketing Mix:

- Product policy:

For Pickwick, it is important to touch a lot of market segments. Consequently, the brand has chosen to begin with the assortments. The black tea product offering is positioned as refined, traditional quality tea. The fruit assortment is positioned as young, renewing and trend. The green tea is a positioned as simple and refreshing.The herbal tea is positioned as well-being and health.

The packaging of the box:- The box hold 20 tea bags- The box is bright and coloured- The way of packaging is quite English approach because on the box, there is a

drawing of an English mail coach

- Price policy:

The price of tea on the world market is rather stable because supply and demand are well balanced. However, tea bags use a lot of packaging material. As a result, price mutations among paper and paperboard can strongly influence the cost price of tea. The consumer price is related to the number of teas and additions (for instance pieces of fruit) used in the blend and type of packaging format.

- Promotion and communication policy:

Pickwick regularly did promotional activities that give consumers the possibility to obtain attractive offers. These activities can be supported in shops by displays for example.Depending on the target group and the objective of the advertising, Pickwick selects a lot of Medias: television advertisement, magazine advertisements, daily newspaper advertisements, outside advertisement and Internet. The brand puts emphasize on these words ‘serenity in a hectic world’ or ‘enjoy a moment of rest in a busy surrounding' in the advertising.

- Place Policy :

The distribution is often selective. Therefore, shelf performance has a great importance. Popular products are often placed at the top of the shelf as. The variation packs though can be considered an impulse product, and are often placed at eye height level.

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C. Twinings: Marketing mix

The famous tea brand Twinings in is part of the Grocery business area of Associated British Foods Plc. Twinings is sold in over 100 countries around the world and is at the forefront of tea trade today.

Target Market:

Twinings is targeting every person that drinks tea. With its wide product range of different teas (e.g. Green Tea, Herbal and Fruit Tea) it is also trying to reach younger customers that live a healthier and more varied lifestyle.

Product:

Twinings offers a wide product range:

Classic leaf teas (e.g. Ceylon breakfast, Ceylon Orange Pekoe, Darjeeling, Earl Grey…)Classic tea bags (e.g. see the above mentioned)Flavoured Black tea (e.g. Apple, Cinnamon & Raisin, Blackcurrant…)Green tea: (e.g. Green Tea & Lemon, Green Tea & Mint, Green Tea Selection…)Herbal & Fruit Infusions (e.g. Blackcurrant, Ginseng & Vanilla; Camomile & Spearmint…)

Product Quality:Twinings employs expert blenders that carefully select teas from thousands of different tea estates. The tea is tasted for quality, flavour and colour. Professional tasters will select teas to produce the desired blend. Each sample blend is brewed, and undergoes a methodical tasting procedure. Twinings, in common with the rest of the food and drinks industry, fully recognises its duty to supply safe, wholesome and nutritious products and is therefore concerned to minimise the level of pesticide residues in food.

Service:Twinings is trying to meet the needs of many customers worldwide with localised web pages supplying them with relevant information on product range, promotions, events and new products. Mail order services and online shops currently only exist for the UK and the USA.The company stresses the healthy attributes of tea drinking turning it into a real experience by recommending simple steps to ensure that the tea served is perfect every time. It also supplies health facts about tea and detox plans meeting the changing needs and lifestyles of its customers.

Packaging:In Malta Twinings is usually sold in boxes of 25 envelope bags or in small tins with a content of 100 grams. The packaging of the boxes and tins is simple but bright and colourful to attract the customer’s attention. The brand name is always clearly displayed on the tea boxes.

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The packaging of teas such as Herbal and Fruit Infusions and Flavoured Black is made of lighter colours but with pictures referring to the various tastes Twinings offers. The Green Tea packaging is held in bright green and does as well have attractive designed pictures on the front cover referring to its taste. The brand name Twinings is running horizontally across the display on a golden banner.

Price:In Malta the average price for a 25 bags box of tea is about 0.80 Lm. The price is reasonably and in the mid-price sector. Twinings is therefore able to compete with other main players such as Lipton or Pompadour.Its prices, taken from the biggest supermarket in Malta (Smart Supermarket), are as followed:

Promotion:

Advertising is made through Radio, TV, magazines as well as the internet.

Twinings Pure Peppermint 25 bags 0.50 LmTwinings Green tea & lemon 25 bags 0.74 LmTwinings Jasmine green tea 25 bags 0.75 LmTwinings Green tea & mint 25 bags 0.74 LmTwinings Green tea selection 25 bags 0.80 LmTwinings Ceylon breakfast 25 bags 0.78 LmTwinings Darjeeling 25 bags 0.73 LmTwinings Lemon scented 25 bags 0.73 LmTwinings Camomile & Spearmint 25 bags 0.84 LmTwinings Flowers of camomile 25 bags 0.82 LmTwinings English breakfast 25 bags 0.72 LmTwinings English breakfast 100 bags 2.53 LmTwinings Earl grey 100 bags 2.53 LmTwinings Earl grey 25 bags 0.72 LmTwinings Earl grey decaffeinated 25 bags 1.04 Lm

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Place:

The tea is distributed to various different countries and sold by wholesale as well as retail.In Malta it can be bought in supermarkets and in small private shops.

Strengths:

Strong brand name, known all around the worldAt the forefront of tea tradeImproved design and packaging Wide product range, targeting a broad customer segment

Weaknesses:

No. 3 world market share

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D. Tetley: Marketing mix

Price:

The Tetley teas are cheaper than their most important competitors.For example you just pay a little more for a packet of 80 bags of Tetley than for a packet of 20 or 25 bags of their famous competitors.

Some examples:Tetley 40 bags 0.47 LmTetley 80 bags 0.88 LmTetley 40 bags decaf 0.95 Lm

Promotion

For many years Tetley and his Maltese partner, Charles Darmanin & Co, have been offering consumers the opportunity to collect Tetley branded gifts. Maltese consumers can exchange the required number of empty Tetley resealable bags for a free Tetley gift. Promotions are advertised in the local Maltese press and also in the shops and supermarkets across the island. Consumers can bring the required number of Tetley packets to Charles Darmanin's Promotions shop in Valletta:

And in the others countries Tetley also uses the television for advertisement.

Product

Tetley has been a popular firm in Malta since its introduction over 50 years ago. It is sold in packages of 40’s 80’s 160’s and 240 tea bags.There are also different versions like drawstring, decaffeinated, Tetley gold and Tetley speciality.

Place

Tetley is the second biggest tea bag brand worldwide, with sales in a number of key markets across the globe. Tetley is a brand leader in both the UK and Canada, is a well established major brand within both the USA and Australian tea markets, and has a developing presence in France, Poland and Russia. Tetley also holds brand leadership or significant shares within a number of other world tea markets.

In Malta you can buy Tetley in the supermarkets and in a lot of grocery shops all over the country.

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E. Lion Brand: Marketing Mix

Lion brand is the most famous brand in Malta with a Market Share of 60 %.

Product

Lion brand is a local and a private label. It is very popular because the brand exists since 1928.

Features: Lion brand imports the raw material from the most famous countries which produce tea (India, Sri Lanka and China) and make the final product and the packaging in a factory in Malta. They have their proper recipe to make a good quality of tea.The brand has its proper machine to make tea bags. They produce fresh tea bags in special boxes which allows to conserve a good taste.The taste of this tea is very strong to compete with Italian products.

They produce different taste of tea:- Black tea: boxes with 40, 80, 160, 240 bags. The tea is conserved in special paper

to keep the tea fresh but only for the box of 40 bags.- Health tea: boxes with 40 bags.

Price

The prices of this brand are very competitive because they are not expensive. For example, the family pack (250 bags) is less than 2 Lm. They have a penetration strategy.

Place

The brand is sold in the supermarket in Malta and they try to export this product. They should buy other machines to make different bags because the bags in Malta do not have the same design than in the others countries. They have not a string which is very common in others countries like in England.

We can find the Lion brand in different bars and restaurants because the Maltese people are very passionate about this brand.

Promotion

Lion Brand tries to make promotion several times each year. Maltese people like this kind of sale. At this moment, when you buy a family pack, you have a free cup.

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F. Teekanne: Marketing Mix

The company:

Teekanne was founded in 1882 and looks back on more than 120 years of success. It started with the innovative idea of Rudolf Anders and Eugen Nissle to sell tea as a branded product. Today the Teekanne Group with 1.300 employees is represented with production facilities and/or branches in eight countries around the world plus distribution partners in many different countries. The Teekanne Group is headquartered in Düsseldorf, Germany. It’s from here that they export their products all over the globe.Today under the umbrella brand name Teekanne there are different brands aggregated. Except of Teekanne they have Teehaus, Sir Winston Tea, Friesen Sonne and Pompadour.

Teekanne offers a wide range of tea.

Black tea, Green tea, Fruit tea, Honey bush tea, Rooibos tea, Herbal tea, Medical tea

Target group:

The target group of Teekanne includes every kind of tea drinkers. For that reason they offer a wide range of products which includes all different kinds of tea. There assortment includes all multiple moments of usage: breakfast, launch, afternoon, dinner and medical tea.

Marketing-Mix

Product policy: Teekanne offers a wide range of products to satisfy the needs of their customers. The product range includes black, green, fruit, herbal, rooibos, honey bush and medical tea. The different kinds of teas are available in many different kinds of taste. This gives the range a big selection and the customers’ different possibilities to decide. In foreign countries Teekanne just sell the brands “Sir Winston Tea” and “Pompadour”. All the other brands are just available in Germany.

The packaging of the box:The boxes hold between 20 and 25 tea bagsThe boxes have all the same design, hold in different colours corresponded to the taste of the tea Every box is designed with the logo and a short description of the sort

Price policy: “Sir Winston tea” as well as “Pompadour” is nearly on the same price level except of the healthy tea which is higher positioned. There are little price differences between the different tastes of tea. Teekanne is positioned on the same price level than their competitors.

Some price positioning in MaltaSir Winston tea, Earl Grey, 20 bags 0,77 LMSir Winston tea, white tea, 20 bags 0,72 LMSir Winston tea, wild fruit, 20 bags 0,71 LMPompadour, Peppermint, 20 bags, 0,71 LMPompadour, Mixed fruits, 20 bags 0,71 LMPompadour, Red Orange, 20 bags 0,85 LM

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Promotion / Communication policy: Teekanne always uses the latest mediums for doing advertising. They were always up to date with using commercials at television and advertisements in different newspapers and magazines. Famous persons, like Sean Connery in the latest commercial, are standing for Teekanne and help the product to become more famous. Teekanne has a good and easy to handle homepage on the internet in English and German. The brand emphasises the words “Live the world of tea” in their advertising.

Place policy: The distribution outside Germany is done by distribution centres nearly on the whole world. There is also a centre here in Malta which is responsible for the distribution in Malta (J & E Griscti, MSIDA – Malta). So they take care that Teekanne is nearly available on the whole world. At the supermarket the products are well positioned, mostly on eye high level so that the consumers see the product at once.