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A
RESEARCH REPORT
ON
Consumer behavior regarding tea industry
SUBMITTED TO:-
KURUKSHETRA UNIVERSITY
KURUKSHETRA
In Partial fulfillment for the degree of
M.B.A
Session 2011-2013
SUBMITTED TO: SUBMITTED BY:
MS.VASUNDRA SAINI SAHIL SHARMA
Assistant Professor. MBA MBA -IV SEM
UNIV. ROLL NO
Swami Devi Dyal Institute Of Management Studies Barwala, Panchkula (Haryana)
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SR NO. CONTENTS PAGE NO.
Certificate of company Acknowledgement Preface Declaration
III
IV
V
VI
Chapter 1 Introduction Introduction of the company 7-1516-36
Chapter 2 REVIEW OF LITERATURE 37-40
Chapter 3 RESEARCH METHODOLOGY
Research design Scope of the study Objectives of study Limitation of the study
4142434445
Chapter 4 DATA ANALYSIS AND INTERPRETATION 46-59
Chapter 5 FINDINGS & SUGGESSTIONS 60-62
Chapter 6 CONCLUSION QUESTIONNAIRE BIBLIOGRAPHY
6465-68
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CERTIFICATE
This is to certify that SAHIL SHARMAhas completed the project entitled Consumer
Behavior Regarding Tea industry under my supervision. To the best of my knowledge, the
report consists of result of the empirical study conducted by the student. In my opinion, the
work is of requisite standard expected of an MBA student. Therefore, I recommend the same to
be sent for evaluation.
Research Guide Principal
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ACKNOWLEDGEMENT
Gratitude is the hardest of emotions to express and one often does not find adequate words
to convey what one feels and trying to express it
The present project file is an amalgamated of various thoughts and experiences .The successful
completion of this project report would have not been possible without the help and guidance
of number of people and specially to my project guide .I take this opportunity to thank all those
who have directly and indirectly inspired, directed and helped me towards successful
completion of this project report.
I am also immensely indebted to my guide, Ms.Vasundra Saini Assistant Professor(MBA)for her illumining observation, encouraging suggestions and constructive criticisms, which
have helped me in completing this research project successfully.
There are several other people who also deserve much more than a mere acknowledgement at
their exemplary help. I also acknowledge with deep sense of gratitude and wholehearted help
and cooperation intended to me by them.
SAHIL SHARMA
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PREFACE
Research Project is the bridge for a student that takes him from his theoretical knowledge world
to practical industry world. The main purpose of it is to expose for industrial and business
environment, which cannot be possible in the classroom.
The advantages of this sort of integration, which promotes guided to corporate culture,
functional, social and norms along with formal teaching are numerous.
1) To bridge the gap between theory and practical.
2) To install the feeling of belongingness and acceptance.
3) To help the student to develop the better understanding of the concept and questionsalready raised or to be raised subsequently during their research period.
The present report gives a detailed view of the Consumer Behavior Regarding Tea
industry. The research is definitely going to play an important role in developing an aptitude
for hard self-confidence.
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DECLARATION
I hereby declare that, the project entitled Consumer Behavior Regarding Tea industry
assigned to me for the partial fulfillment of MBA degree from Kurukshetra University,
Kurukshetra. The work is originally completed by me and the information provided in the
study is authentic to the best of my knowledge.
This study has not been submitted to any other institution or university for the award of any
other degree.
SAHIL SHARMA
.
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CHAPTER-I
INTRODUCTION
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Consumer Behavior
Consumer Behavior may be defined as the interplay of forces that takes place during a consumption process,
within a consumers self and his environment. This interaction takes place between three elements viz.
knowledge, affect and
Behavior; it continues through pre-purchase activity to the post purchase experience; it includes the stages of
evaluating, acquiring, using and disposing of goods and services.
The consumer includes both personal consumers and business/industrial/organizational consumers.
Consumer behavior explains the reasons and logic that underlie purchasing decisions and
Consumption patterns; it explains the processes through which buyers make decisions.The study includes within its purview, the interplay between cognition, affect and behavior that goes on within
a consumer during the consumption process: selecting, using and disposing of goods and services.
Cognition: This includes within its ambit the knowledge, information processing and thinking part; It
includes the mental processes involved in processing of information, thinking and interpretation of stimuli
(people, objects, things, places and events). In our case, stimuli would be product or service offering; it could be
a brand or even anything to do with the 4Ps.
Affect: This is the feelings part. It includes the favorable or unfavorable feelings and corresponding
emotions towards stimuli (e.g. towards a product or service offering or a brand). These vary in direction,
intensity and persistence.
Behavior: This is the visible part. In our case, this could be the purchase activity: to buy or not a buy (again
specific to a product or service offering, a brand or even related to any of the 4 Ps).
The interaction is reciprocal between each of the three towards each other and with the environment.
OTHER DEFINITIONS:
The behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products
and services that they expect will satisfy their needs.
- Schiffman and Kanuk ..the decision process and physical activity engaged in when evaluating, acquiring,
using or disposing of goods and services."
- Loudon and Bitta The study of consumers as they exchange something of value for a product or service that
satisfies their needs
- Wells and Prensky Those actions directly involved in obtaining, consuming and disposing of products and
services including the decision processes that precede and follow these actions.
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-Engel, Blackwell, Miniard the dynamic interaction of effect and cognition, behavior and the environment by
which human beings conduct the exchange aspects of their lives
American Marketing Association
During the process of evolution of the field of consumer behavior, researchers drew on various
disciplines, ranging from psycho-physiology to literature (Solomon 1995). A list of
professional associations that sponsor theJournal of Consumer Researchprovides a glimpse of
the number of disciplines working together in the field. The diverse disciplines employed by
researchers approach consumer issues from different perspectives. In addition to the many
disciplinary orientations, perspectives on consumer behavior are broadly differentiated by their
emphasis on internal influences (drawing on theories from psychology) and on external
influences (drawing on theories from sociology). Furthermore, methodological inclinationsand fundamental assumptions about the unit of analysis - the consumer, differ radically
between perspectives. Thus, varying perspectives present different views of aspects on
consumption (as emphasized from the consumers perspective), research orientations (as
emphasized from the researchers perspective), and focus (micro/individual or macro/social)
on consumer issues. Research that studies consumer behaviour as a sub discipline of marketing
with the aim to identify how consumer research can be put to use in marketing practice, regards
the field of consumer behaviour as an applied social science. Accordingly, the value of theknowledge generated should be evaluated in terms of its ability to improve the effectiveness of
marketing practice. According to this perspective, marketing management inevitably rests
upon some conception of how consumers behave and of the
Consequences their reactions to product, price, promotion, and distribution strategies are likely
to have for the attainment of corporate goals. In affluent, competitive economies, successful
marketing depends above all on matching the marketing mix, which results from the
integration of these strategies with the willingness of consumers to buy and in doing so more
effectively than ones rivals. The consumer-oriented management which results from such
matching is a response to the enormous discretion exercised by purchasers in these economies.
Moreover, the choices made by consumers have consequences not merely for competing
companies within a given, traditionally-defined industry; because of the high levels at which
discretionary income is running, companies are increasingly forced to compete across the
conventional boundaries of markets and industries.
Recently, though, some researchers have argued that consumer behaviour should not have a
strategic focus at all. It should instead focus on 2 The American Statistical Association, the
Association for Consumer Research, the Society for Consumer Psychology, the International
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Communication Association, the American Sociological Association, the Institute for
Operations Research and Management Sciences, the American Anthropological Association,
the American Marketing Association, the Society for Personality and Social Psychology, the
American Association for Public Opinion Research, the American Association of Family and
Consumer Sciences, and the American Economic Association (Source:
http://wiscinfo.doit.wisc.edu/jcr/policy_board.htm) . Moneesha Pachauri the understanding
of consumption for its own sake, rather than because the knowledge generated can be applied
by marketers (Holbrook 1985). While this view has emerged relatively recently, it has
encouraged many to expand the scope of their work beyond the fields traditional focus, on the
applied benefits of undertaking consumer studies. This more critical view of consumer
research has also led to the recognition that not all consumer behaviour and/or marketing
activity is necessarily beneficial to individuals or society. As a result, current consumer
research is likely to include attention to the dark side of consumer behaviour, such as
addiction, prostitution, homelessness, shoplifting, or environmental waste (OQuinn and Faber
1989; Barron 1989). This activity builds upon the earlier work of researchers who have studied
consumer issues related to public policy, ethics, and consumerism. There is a growing
movement in the field to develop knowledge about social marketing, which involves the
promotion of causes and ideas, such as responsible drinking, energy conservation, and
population control. This article presents a review of the literature, in the field of consumer
behaviour. The first section, describes the dominant, positivistic consumer perspectives. The
second section, presents a methodological and analytical overview of the traditional
perspectives, already discussed in section one. Further discussion on the paradigm shifts within
consumer research, is supported by a diagrammatic representation of the evolution of the field
of consumer behaviour. The remainder of this section is devoted to presenting the highlights of
the debate between the recent non-positivist perspectives and the traditional positivist-based
approaches. This discussion surrounds the issues of fundamental assumptions and techniques
of analysis of various alternative modes of enquiry. And finally, the last section presents an
overview of the developments within the field of consumer research . Tea is the most widely
consumed beverage in the country India and China are respectively the largest and second
largest producers and consumers of tea. These two countries are together account for half of
world's tea production.
However they export less than a quarter of their production, due to large domestic demand. As
per a survey on consumption of beverages, Tea accounts for 90% Filter coffee 4% Malted
health beverages 2% instant coffee 2% and carbonated soft drinks just above 1% of total
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consumption squashes, Concentrates, Mineral water account for a minuscule part of the
consumption.
There are other export driven tea producing countries like Kenya, Sri Lanka and Indonesia who
produce only 25% of world tea but control 50% of global trade. They export almost 80% of
their production. In the last five decades, tea production in Kenya, Malawi, Sri Lanka and
Indonesia has increased at a rapid pace.
While the Government set up a target of 10000mn kg by year 2012, as per historical trend,
actual production is unlikely to exceed 900mn kg. Production is FY 99 is estimated at 870mn
kg. Out of the entire tea produced in the country, about 24% is exported. In the domestic
market, only 30% of the tea produced is sold in packaged/ branded from while 46% is sold in
loose form.
Tea plantations in India are concentrated in North East (Upper Assam and West Bengal) and
South (Kerala AND Tamil Nadu). North-East account for 75% of production while the
Southern region accounts for the balance. Although, yield pore hectare is lower in North east
tea quality is superior. For a long time, Indian tea producers were getting artificially high price
for tea as the erstwhile USSR used to buy under bilateral treaty. The rouble (USSR currency)
was artificially overvalued. The collapse of the USSR has been a major blow to the industry.
Paradoxically, India is not globally competitive in production of tea which is labor intensive.
Competing countries Kenya. Sri Lanka are also underdeveloped and have comparatively lower
labor costs and much liberal labor laws. More importantly, average age of tea bushes in India is
relatively high, therefore productivity is lower.
Income tax liability for tea companies is calculated in a unique way. 60% pre-tax profits are
deemed to be agricultural income, taxable by the State Government and 40% corpora earnings
taxable as corporate profits. The effective tax rate works out to be significantly higher.
DETERMINANTS OF CONSUMER BEHAVIOUR
Cultural Factors: Cultural factors exert the broadest and deepest influence on consumer
behavior. It encompasses the social values, attitude towards, social intercourse, language,
belief customs and traditions etc. it includes:
1) Culture:
The culture is the sum total of learned beliefs, values and customs which serve to guide
and direct the consumer behavior of all the members of the society.
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2) Sub Culture:
A sub culture is an identifiable and distinct group that has unique characteristics. A
sub culture is a psychological, religious, social or geographical source of group
identification. These sub culture are used by companies as the basis of segmentation.
3) Social Class:
Virtually all human societies exhibit social stratification it sometimes takes the form of
caste system where the members of different caste are reared for certain roles and can't
change their caste membership and they are known as social class. Social classes are
relatively homogenous and enduring divisions in a society, which are hierarchically
ordered and whose members share similar values, interests and behavior.
Social Factors:
Customer is a social being and its behavior is influenced by several social factors such as
reference groups, family and roles and statuses.
1) Reference Group:
A person's reference group consists of all the groups that have a direct or indirect
influence on the persons attitudes and behavior. Group having direct influence on a
person are called membership.
2) Family:
Family is most important consumer buying organizations in society and it has been
researched extensively family members. Constitute the most influential primary
reference group.
3) Roles and statuses:
A person participants many groups throughout life-family, clubs, organization. The
person's positioning each group can be defined in terms of roles and statuses. A role
consists of the activities that a person is expected to perform and each role carries the
status. Marketers are aware of the status symbol potential of product and brands.
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Personal Factors:
A buyers decisions are also influenced by personal characteristics these include:
1) Age and stage in the life Cycle:
People buy different things over their lifetime and they buy it according to their age and
stage in life cycle e.g. if they are old. They will not buy the baby cycle.
2) Occupation:
A person's occupation also influences his or her consumption patterns. A blue collar
worker will buy the bicycle whereas the company president will buy the car.
3) Economic Circumstances:
Product choice is greatly affected by one's economic circumstances People's economic
circumstances consists of their spend able income, savings and assets, debts and
attitude toward spending and saving.
4) Life Style:
A person's life style is the person's pattern of living in the world as expressed in person's
activities interests and opinions. People use to buy the products according to their life
style.
5) Personality and self concept:
Each person has a distinct personality that influences his or her buying behavior.
PSYCHOLOGICAL FACTOR:
A person's buying choices are influenced by four major psychological factors such as:
1) Motivation:
Motivation refers to the way a person is enthused it intensify his willingness to us his
potentiality for the achievement of his objectives. Motivation has close relationship
with the behavior of human beings; it explains how and why the human behavior is
caused.
2) Perception:
Perception is the process by which an individual selects, organizes and interprets
information inputs to create a meaningful picture of a world. A motivated person is
ready to act. How the motivated person actually acts is influenced by his or her
perception of the situation.
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3) Learning:
Learning involves changes in an individuals behavior arising from experience. It also
affects the consumers buying behavior.
Belief and Attitudes:
Through doing and learning people acquire beliefs and attitudes. These in turn influence their
buying behavior. A belief is a descriptive thought that a person holds about something.
BUYING BEHAVIOUR
A basic Requirement of Marketing:
1) What motivates the buyers?
2) What induces him to buy?
3) Why does he buy specific brand from a particular shop?
4) What are the stages he travels through before he makes the decision for buy?
Knowledge of the consumer and his buying motives and buying habits, is thus a fundamental
necessity for the marketing man.
"Phillip Kotler has given the buyer decision making model and also the factors which
determine his buying behavior"
Decision Making Process:
To be successful, marketers have to go beyond the various influences on buyers and develop
and understanding of how consumer actually make their buying decision. Steps in buying
decision making process are:
Problem Recognition:
Buying process starts when the buyer recognizes a problem or need. The need can be triggered
by internal or external stimuli.
Information Research
In aroused customer will be inclined to search more information. Customer information
sources fall into four groups.
1) Personal sources : Family, friends, neighbor
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2) Commercial sources : Advertising, sales, person dealers, packaging, displays.
3) Public Sources : Mass media, Consumer rating Organizations.
4) Experimental sources : Handling, Examining, using the Product.
Evaluation of Alternatives:
In this consumer process the competitive brand information and make the final judgments for
value.
Purchase Decision:
In the evaluation stage the consumer forms preferences among the brand in the choice set.
The consumer may also form an intention to buy the most preferred brand. A consumer's
decision to modify, postpone or avoid a purchase decision is heavily influenced by perceived
risk.
Post Purchase Behaviors:
After purchasing the product the consumer will experience some level of satisfaction or
dissatisfaction. The marketers job does not end when the product is bought but continues into
the post purchase satisfaction, post purchase actions and post purchase use and disposal.
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HISTORY OF TEA
Tea is nearly 5,000 years old and was discovered, as legend has it, in 2737 B.C. by a Chinese
Emperor when some tealeaves accidentally blew into a pot of boiling water. In the 1600s, tea
became popular throughout Europe and the American colonies. Since colonial days, tea has
played a role in American culture and customs. Today American schoolchildren learn about
the famous Boston Tea Party protesting the British tea tax one of the acts leading to the
Revolutionary War. During this century, two major American contributions to the tea
industry occurred. In 1904, iced tea was created at the World's Fair in St. Louis, and in 1908,
Thomas Sullivan of New York developed the concept of tea in a bag. Tea breaks down into
three basic types. Black, Green and Oolong. In the U.S. over 90 percent of the tea consumed
is black tea, which has been fully oxidized or fermented and yields a hearty-flavored, amber
brew. Some of the popular black teas include English breakfast (good breakfast choice since
its hearty flavor mixes well with milk). Darjeeling ( a blend of Himalayan teas with a flowery
bouquet suited for lunch) and Orange Pekoe ( a blend of Ceylon teas that is the most widely
used of the tea blends). Green tea skips the oxidizing step. it has a more delicate taste and is
light green/golden in color. Green team a staple in the Orient is gaining popularity in the U.S
due in, part to recent, scientific studies linking green tea drinking with reduced cancer risk.Oolong tea, popular in China, is partly oxidized and is a cross between black and green tea in
color and taste. While flavored teas evolve from these three basic teas, herbal teas contain no
true tealeaves. Herbal and "medicinal" teas are created from the flowers, berries, peels, seeds,
leaves, and roots of many different plants.
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STORY OF TEA
According to legend, the Shen Nong, an early emperor was skilled ruler, creative scientist, and
patron of the arts. His far sighted edicts required, among other things that all drinking water be
boiled as a hygienic precaution. One summer day while visiting a distant region of his realm,
he and the court stopped to rest. In accordance with his ruling, the servants began to boil water
for the court to drink. Dried leaves from the nearby bush fell into the boiling water, and a
brown liquid was infused into the water. As a scientist, the Emperor was interested in the new
liquid, drank some, and found it very refreshing. Therefore, according to legend, tea was
created (This myth maintains such a practical narrative, that many mythologists believe it may
relate closely to the actual events, now lost in ancient history).
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THE TEA INDUSTRY
India has the distinction of being the largest consumer and producer of tea in the world. The
country accounts for 30 per cent of global tea production. It is the only country which
produces both CTC orthodox teas in sizeable quantities. It has a share of 15 percent of the
world's tea exports. This year, production is expected to exceed 850 million kg as projected by
the Federation of All India Tea Traders Association (FAITTA). In 1997 there was a record
production of 810 million kg against 780 million kg in 1996. South India alone accounted for
over 180 million kg which exceeded the production of countries like Turkey and Indonesia.
Organic farming of tea is fast gaining ground in Darjeeling as well. Such organic farming
practices wholly depend on the use of natural fertilizers and insecticides. Apart from clinching
better export deals in the European market, such kind of farming has also helped in retention of
top soil and keeping it alive with micro-organisms, according to the planters who have resorted
to organic farming practices. The use of such practices is on the rise as export markets like
Germany are becoming more stringent on the quality aspect of premium teas. With exports of
organic tea on the rise, most growers are contemplating a conversion of the tea growing area for
organic cultivation. As many as 11 gardens in Darjeeling have become fully bio-organic.
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MAJOR PLAYERS
Tea is a natural oxidant and a source of natural flouride. India is one of the big players when it
comes to tea production. Tea is exported in large amounts from India. India coounts for 31% of
global production of tea and is thus one of the world leaders. India has been producing tea for
the last 150 years. India offers a wide range of tea such as the original Orthodox to CTC and
Green Tea. The tea leaves from Darjeeling and Assam have their own rich aroma in which can
take a lot of pride. The total turnover of the tea industry of India is around Rs. 10,000 crores.
Here is a list of the most popular Tea Brands of India.
Tata Tea
Tata Tea Limited is owned by the Tata Group. It is Indias best and most widely consumed Tea
Brands and is the worlds second largest manufacturer and distributor of tea. Tata Tea has
launched a social campaign named Jaago Re! to awaken the youth against corruption. Tata
Tea is the biggest player in the Tea Industry of India. Tata Tea owns five brands in India: Tata
Tea, Tetley, Kanan Devan, Chakra Gold, and Gemini. Tata Tea has subsidiaries in Australia,
Great Britain, United States, Czech Republic and India.
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Society Tea
Society Tea is owned by Hasmukhrai & Co. established 75 years ago. They are the key tea
manufacturers in India since 1933, and today, Society Tea is known for its consistent taste and
richness of quality. Society is synonymous to a fragrant aroma and is known nationally as well
as internationally for it. Society has an innovative advertising campaign and strong distribution
network.
Duncans Double Diamond Tea
A premium CTC leaf brand, Double Diamond represents strength that of character,
achievement and elegance. Just a spoonful of this tea brews a rejuvenating cup, where strong
flavor and aroma co-exist in fine balance. Packaged in the Duncans home colours and iconised
diamonds, this flagship brand is the chosen cup of the educated, young and forward-looking
couples of today, who believe in the right quality at the right price. A trendsetter in the jar
segment, Double Diamond maintains an attractive inventory of jars and is also available in
small packs.
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Brooke Bond Red Label Tea
Red Label is for the housewife who seeks to bring her family together over a cup of great Red
Label with its perfect strength taste and colour. With the tag line ChuskiyaanZindagiki, It is
the second largest tea brand in the country. Red Label is a 107 year old brand and has
tremendous equity and heritage in the Indian market. Red Label holds the Guinness Record for
the worlds largest tea party. It is now proven that regular consumption of 3 cups of Red Label
Natural Care every day can enhance ones immunity and help one fall ill less often.
Taj Mahal Tea
Brooke Bond Taj Mahal- Indias best tea since 1966. For over four decades, Taj Mahal has
been the gold standard of tea in India. It has been a pioneer of innovations in the Indian tea
market. Taj Mahal was the first to introduce tea bags and also the first to usher-in new formats
like instant tea and dessert tea. Taj Mahal is the most premium brand of tea in the Indian
market. Since 2006, Saif Ali Khan is the brand ambassador of Taj Mahal Tea. Taj Mahal is
special because it is made from the rarest and the best tea leaves.
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WaghBakri Tea Group
Waghbakri tea house is a premium tea house in inception since the year 1892. The tea baron,
Sir Narandas Desai started the company in Ahmadabad being experienced in the art of
blending and tea growing which he learned while owning a tea estate in South Africa. Sir
Narandas Desai was praised by Mahatma Gandhi for his commendable work. The generations
that followed gave boost to his pioneering efforts and developed the business to its present
status of being one of the largest tea houses in India.
Lipton Tea
Lipton is a very famous brand of Tea in India, currently owned by Hindustan Unilever. Lipton
teas are a blend selected from many different plantations around the world, from well-known
producing countries like India, Sri Lanka, Kenya, and China. Lipton Yellow Label is blended
from as many as 20 different teas. Available in over 110 countries, Lipton is particularly
popular in Europe, North America and the Middle East, parts of Asia and Australia. Liptons
main pillar brands are Lipton Yellow Label and Lipton Iced Tea. Other product lines exist as
well, like the Lipton pyramid range in Europe and North America, and Lipton Milk Tea in East
Asia.
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Tetley Tea
Tetley, a wholly owned subsidiary of Tata Global Beverages, is the worlds second largest
manufacturer and distributor of tea. Owned by Indias Tata Group, Tetleys manufacturing and
distribution business is spread across 40 countries and sells over 60 branded tea bags. It is the
largest tea company in the United Kingdom and Canada and the second largest in the United
States by volume. Tata Tea Group, now Tata Global Beverages, is the second largest
manufacturer of tea in the world after Unilever.
Marvel Tea
Marvel, a leading branded organization, is one of the Indias most recognized and respected
brands. Conceived in 1994 by Shri R.C.Jain, the Marvel group has gone on to grow very
successful business in sectors ranging from FMCG, Real Estate and Health Care. Marvel Tea
Estate (India) Limited is amongst Indias top 3 branded tea packaging companies, with over
3000 distributors network. It has a unique brand identity and tea taste which is the key strength
of the company. Marvel Tea is Rich in taste, flavor and aroma and is Made for premium class
segment.
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Pataka Tea
Pataka Tea, the flagship unit of the beverages ventures of Pataka Group, was set up in 2000 for
operations in the packet tea industry. The offerings entail a diverse portfolio of brands, namely
Premium, Mukta and Special, which are increasingly gaining popularity with the countrys tea
enthusiasts. Pataka Tea and the family of beverages to follow are in coherence to maintain thehighest standards of inclusive corporate ethics, and commitment to the communities and
environment.
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Tata Tea Ltd.
Tata Tea is the leading tea plantation company in India. It is the largest integrated tea
producer in the world. The company has 55 tea estates across the country covering 140790
acres of land. Of this about 63480 acres are under tea cultivation. The company produced
59mn kgs of tea in FY01. Sales declined by 10% yoy to Rs. 8.23bn in FY01. Sales and
profitability has been adversely affected due to depressed tea prices at auctions and lower sales
of valued added brands, which face competition from the local unorganized players. Tata Tea
leaped into the international league when it acquired world's second largest branded tea
company Tetley last year, The $271mn acquisition was financed through a GDS issue of 45mn,
loan from banks and 15mn were generated through internal resources. The company has
invested an additional 10mn in the company in FY01. India is the largest producer and
consumer of tea. Approximately 1.05mn acres of land in India is under Tea cultivation. More
than 3/4th of the tea produced is consumed domestically, while rest is exported. Indian tea
bushes are very old and therefore productivity is quite low.
Tata Global Beverages Limited (TGBL) is an emerging player in the globalbeverage market.
The company has made a strategic shift from being a local teacompany to a global beverage
company through various acquisitions andstrategic partnerships with global beverage giants
like PepsiCo and Starbucks. Asa result, the company has made an entry into the top 10 global
companies list inthe hot drinks category, posing a challenge to global players like Nestl,
Unileverand Kraft Foods. The companys product portfolio comprises leading globalbrands
like Tetley, Eight O Clock and local brands like Tata Tea.Bottomed-out margins; expect a
positive surprise: We model in TGBLs OPM toimprove by ~150bp overFY2011-13E from
8.6% in FY2011 to ~10.1% inFY2013E, driven by a shift in the companys focus from the
plantation business tobranded products and rationalization in the operating cost structure.
WhileTGBLs focus on volume growth remains intact, selective price increases andstable ad
spends will further aid in margin improvement. Also, with the Tea Boardof India estimating
higher tea production in 2011 as compared to 2010 (~5%higher production), we expect auction
prices of tea to soften, thereby providing arelief to the company from heightened input cost
pressure.Estimate ~40% plus adjusted EPS CAGR over FY2011-13E: We model a ~40%
EPS CAGR over FY2011-13, led by (1) 9% revenue growth and (2) a ~150bpmargin
improvement. We believe the company is set to outperform the industrysgrowth, with the help
of selective price increases and strong brands like Tata TeaPremium, Tata Tea Gold, Agni Dust
and KananDevan.Key valuation trigger: Despite its leadership position in the Indian packaged
teamarket, No. 2 position in the global tea market and generating ~90% of its totalrevenue from
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branded products, TGBL is trading at 12.2x FY2013E EPS (which isat a discount to its FMCG
peers, trading at 20x35x FY2013E EPS). Also, on EV/Sales basis, the stock is trading at 0.6x
FY2013E EV/Sales (historical averageof 1x EV/ Sales). Hence, we initiate coverage on the
stock with a Buyrecommendation and a target price of `97, based on 14x FY2013E EPS
of`6.9(0.8x FY2013 EV/Sales).
Brooke Bond Red Labelnation's cup of tea Brooke Bond Red Label Tea was launched in
the year 1903, which makes it one of the oldest brand of tea in the country. It also has the
distinction of being the largest brand of tea in India and has a truly national presence. For years,
Red Label has stood for good quality tea and it can be easily called as one of the India's
favourite tea brands. The brand was relaunched in the year 2000 with a new product
formulation, wherein long Assam orthodox tea leaves were added to the base CTC tea to
deliver enhanced taste. These are referred to as 'Assam Super Tasters' in the brand's
communication. The new campaign highlights the irresistible taste of the new Red Label Tea
through executions that revolve around a very catchy base line Don't Mind Ek Cup Aur
Ready for another cup.
Brooke Bond Red Label, one of the oldest tea brands in the country and the largest selling
one, celebrated Mother's Day today by greeting and commending a cross section of mothers in
the cities of Delhi, Mumbai and Bangalore. The mothers ranged from housewives to working
mothers and even celebrities. Over 500 mothers in each of the three cities were pleasantly
surprised when they were paid an unannounced visit by a Brooke Bond representative. Aimed
at recognising the tears and sweat that mothers go through to bring up their children and keep a
happy home running, they were presented with flowers, cards and a sample product of the
company.
The Red Labelbrand, has the mother as the key brand ambassadors in its current 'Jiyo Mere
Lal' advertising campaign. The advertising campaign reflects the macro family issues of
urban India with the mother in control. The underlying theme has been to depict Red Label as
a trusted support to the mother, its satisfying taste helps her diffuse tensions in the family and
promote happiness, harmony and togetherness. The Jiyo Mere Lal campaign has in fact tried
to depict issues which symbolize the changing nature of Indian society, like the father and son
generation gap, inter-caste marriages and, now, gender divide which will be aired from the
middle of May.
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Brooke Bond one of the world's largest recognized tea brands was established in the U.K. in
1869. Brooke Bond belongs to Hindustan Lever Limited, the Indian subsidiary of Unilever.
Red Label was the first brand launched under the Brooke Bond umbrella in India. This was
followed by brands like Taj Mahal Tea, Super Dust 3 roses and A1. The beverages
business of Hindustan Lever Limited had a turnover of Rs. 1786 crores in 1998, with the
Brooke Bond tea brands having a leading share of it.
Brooke Bond has consistently led the Indian tea market because of its unmatched insight into
tea and the needs of the Indian consumer. Today, this tea insight is being harnessed through
an aggressive innovation programmed led by a team from the innovation centre at the
Hindustan Lever Research Center (HLRC), based in Bangalore. This insight led Brooke Bond
to pioneer most innovations in the Indian tea market like CTC tea, soft packs, the CEKA
carton, Paisa packets, Tea bags and pet jars.
Pataka Tea
Pataka Tea is the main product of the beverages division of the well known Pataka Group.Pataka Tea was set up during 2000 so that the group could venture into the business of packed
tea. Following are its other major verticals:
Biri Textiles Food HealthcareAt present tea prices have gone up owing to dry weather during the initial part of 2012 followed
by the recent floods in Assam. The demand and supply scenario of the tea industry is such that
prices are expected to go further up. In 2011 the industry produced 988 million kilos of tea and
the total production for 2012 is expected to be the same.
During January to July, 2012 the tea production in India was 4 percent lesser than the similar
period in 2011. The demand has been increasing steadily in the interim and this has led to an
increase in prices of products such as black tea whose average price has increased by 10
percent compared to the previous period.
In July 2012 tea prices had increased by 18 percent when compared to July 2011. The average
auction prices of Indian black tea in northern and southern India are supposed to remain more
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than INR 100 per kilo till 2020. From 2001-2010 this figure was INR 73. This will happen as
throughout the demand for black tea will be more than the production levels.
The pace of re-plantation is on the slower side and this means that tea production will always be
lower than the demand. In the other leading tea producers of the world there has been no
increase in the area under tea cultivation. This is also another important factor in this regard.
India along with Kenya and Sri Lanka is one of the major producers of tea in the world. If any
local or climatic problem disturbs the tea production in these countries, then coupled with the
price issues, there could be some serious concerns for the global tea industry.
Experts have already portrayed a grave scenario regarding the balance between tea production
and consumption. There has been a serious decline in inventory as is evident from statistics.
India along with Kenya and Sri Lanka accounts for 60 to 62 percent of the global supply of
black tea. However, India is the biggest consumer of black tea and exports 17 to 20 percent of
the total production as opposed to Kenya and Sri Lanka who export 90 to 95 percent of the
aggregate production because of the smaller markets.
It is possible that the tea export segment of India might face problems if inventory levels
continue to fall, production is slow, and domestic usage goes up. Old bushes comprising 25
thousand hectares were replanted from 2006 to 2011 and these areas take up the maximum
portion of the area that has been added for tea cultivation in the recent times.
A part of the tea, supposed to be used for exports, is being redirected for local consumers in
India. In 2011, 192 million kilos were exported but in 2016 the figure is supposed to come
down to 127 million kg.
It is expected that till 2017 tea production in India will increase at a compounded annual
growth rate of 1.6 percent while for consumption in the same period the rate has been estimated
at 1.8 percent.
However, this will not have any effect on the success of the tea companies as tea prices in India
are equal with any other place in the world because of the overall quality of products available.
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TATA TEA:
Super brands Market:
Tea is the most versatile beverage ever discovered by man a kind of one-drink-for-all
reasons-all-seasons. Tea warms when it is cold; cools when it is hot; cheers when depressed;
calms when excited; awakens when sleepyand available at every street corner. In short, tea is
therapy-in-a-cup. It is savored equally at roadside stalls as incorporate boardrooms, in a silver
tea service as in a clay cup. Tea drinking is hardwired into the Indian DNA. Over 400 billion
cups of this brilliant beverage are consumed each year in India pushing annual per capita
consumption to over 700 grams. Tea only trails water as the beverage-of-choice with the
highest share-of throat in the country. India is the largest producer of tea in the world with the
branded tea market pegged at some 450 million kilos valued at over Rs. 4000crore (US$ 833.30
million) (Source: Tea Board).After a period of stagnation India's tea production grew 2% in the
2011/12 financial year to touch 1000 million kilos. Correspondingly, its exports also grew
from200 million kilos to 203 million kilos in the same year (Source: Tea Board).Achievements
As recently as the early 1980s, tea was a commodity tightly controlled by a handful of brands.
Remarkably, the companies that owned these brands rarely, if ever, grew the teas they
marketed. The advent of the Tatas in the branded tea business in 1985 ushered in sweeping
changes in an industry hidebound by decades of tradition. As a standalone brand, Tata Tea
played a crucial role in transforming the Indian tea market from a staid, boring mlange of
players to a young and vibrant business. The first thing Tata Tea did was to change the way tea
was purchased from planters and sold to consumers. Owning their own estates gave the
company complete control over their operations. The second thing they did was to inject
effervescence into their packaging. In a single stroke, they dispensed with the sedate cardboard
box and introduced an attractivepoly pack. Innovations such as these earned Tata Tea several
consumer and marketing awardsand a place in the homes and hearts of people. The AMGF
Mere Brand award and the Readers Digest Trusted Brand Platinum award in2006 and the
Most Preferred Brand of Tea in India in the CNBC sponsored Consumer Awards in 2007, were
conferred on the company. Tata Tea was also rated the Second Most Preferred Beverage Brand
in India in the Brand Equity Survey of 2008.In The Economic Times Most Trusted Brands
Survey in the same year, Tata Tea was ranked20ththe only tea brand which figured in the top
50.The latest accolade is its 25th rank in Indias Top 50 Most Valuable Brands released by
Brand Finance. While winning at competitive forums was good for the mind, winning in the
market place was a stunning achievement for the soul. In a June 2007 study, Tata Tea
outperformed competitors, achieving a volume share of19.20% (Source: ACNielsen). For a
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company less than 25 years old besting rivals 200 years in the business was truly
commendable. History The Tata Tea ancestry goes back to the 1880swhen James Finlay Plc., a
Glasgow-based company, owned and run by the Muir family, developed tea plantations in
Assam and Theodoras. For the next three quarters of a century Finlay controlled large swathes
of properties and grew some of the finest qualities of tea in the world.. Tata Tea Limitedthen
a full-fledged plantation enterprisewas born. Tea is often a victim of the vicissitudes of the
commodity market. To insulate itself and leverage its home tea plantation advantage the
company took a decision to shift focus from commodity sales to branded tea. Tata Tea, the
brand, was introduced in 1987 changing forever the course of the industry. At the turn of the
century, Tata Tea acquired the UKbased Tetleythe worlds second largest tea brand and a
company three times its own size. Overnight, Tata Tea was catapulted onto the world stage and
joined a handful of powerful international beverage brands. By integrating its strengths with
those of Tetley, Tata Tea now has an influential presence in matured markets of the US, the
UK, Canada, Australia and Europe. Product In 24 years since launch, Tata Tea has powered
itself into peoples lives across metros and hamlets, in equal measure. Every fifth cup drunk
in India is a Tata blend. The brand straddles the Indian firmament like a colossus, placing in
each socio-economic segment, one brand that controls the market. Its flagship brand, Tata Tea
Premium, proudly labeled as the worlds number one tea, is the countrys largest packet tea
brand. It singlehandedly accounts for an all India value share of 10.20%and dominates Indias
North, East and West geographies (Source: Nielsen).As the markets grew people in the higher
SEC sought an upgraded version of Tata Tea Premium. The company launched Tata Tea Gold
in 2003filling this emerging need-gap. Today, Tata Tea Gold is not just the companys image
driver it is also the only successful launch in the packaged tea market in more than a decade.
The price conscious economy segment is the battleground for the fiercest wars in the tea market
.Littered with scores of regional and local brands,Tata has a telling presence here. Its Tata Tea
Agni has proved to be a star performer, eroding the market shares of established brands and
taking on strong regional players on their own turf. The brands winning formula is an
innovative blend consisting of 10% high-quality extra strong leaf tea coupled with stylized
superior quality packaging, unmatched in this segment. The health and wellness, value-add
segment is the latest market to emerge in India. Here, Tata Tea Life, introduced in 2007 and the
four variant in the Tata Tea family, offers a regular every day tea enhanced with the nature
goodness of Brahmi, Tulsi, Ginger, Cardamom and Mint. Recent Developments March 2009
was a defining moment for Tata Tea. For the first time, this young brand jumped to the top of
the table cornering a combined value market share of 15.70% (Source: Nielsen).There cent
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consolidation of Tata Tea Premium, Tata Tea Gold, Tata Tea Agni and Tata Tea Life, under the
Tata Tea umbrella brand has contributed to the success story by enabling the company to
communicate a single, unified message to consumers. Tata Tea has also recently signed a joint
venture agreement with the Zhejiang Tea Import& Export (ZTIE) Company in China for
manufacturing and marketing green tea polyphones, other green tea extracts, cold and hot
water soluble instant tea, liquid tea concentrates and several value-added tea beverage
products. Promotion through the years Tata Tea has communicated its promotional messages
using high impact payoff lines and jingles. Over the years, its advertising has made
evolutionary shifts in its brand positioning, moving from a functional promise in the
AsliTaazgi (real freshness)campaign to AsliTaazgi , AsliMaaza (real freshness, real pleasure)
which laddered Taazgito a higher benefit. But irrespective of its evolving strategy, the one
element that has never changed in nearly 25 years of advertising is its young, fresh, modern and
energetic image. This has been constantly renewed by young and effervescent brand
ambassadors of their times, such as Amjad Khan in the 1980s and JuhiChawla and Sonali
Benders in later years. One of the more memorable commercials was for Tata Tea Gold with
the tagline NaaKahoge to Pachtaoge (say noand regret). It featured four young friends one of
whom refused the offer of teaonly to find himself unhappily left out of the pleasure the others
derived. The advertising campaign for Tata Tea Premium moved the brand to another platform:
it sold a dream through its tagline Taste KamyabiKa (the taste of success) epitomized by its
high-achieving brand icons, Sonia Mize and SunidhiChauhan.Thethought is simple: effort
makes everything possible. However, the brands most recent campaign and possibly the
highpoint in its evolution, so farwas the high describelJaago Re (awaken) campaign.This
outstanding creative effort sought to elevate the role of tea from being just a wake-up drink to a
medium of awakeningHer Sabah Sir Utah Mat, Jaago Re(each morning dont just awaken
your body, awaken your soul).The campaign received both critical acclaim as well as positive
consumer feedback. Launched just before the general elections of 2009 the campaign achieved
the dual purpose of imparting a socially relevant message as well as the fine association with
the product. This call for awakening has also been extended to the field of soccer with Tata
Teabag Re Soccer Stars (awaken, you soccer players).This initiative is a unique programmed
signed to identify grassroots talent in soccer and select them for further training, under FC
Arsenal coaches in India and London. Brand Values Tata Tea is a remarkable case study of
brand development in a market fragmented by200-year old brands on the one hand, and a
plethora of loose tea blends and small, local tea packers on the other. Its success is largely
attributed to a daring in challenging norms and bringing energy to an industry, which even if it
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was selling a beverage to awaken the body, simply appeared tired and fatigued. No one has put
it better than George Orwell who said, Anyone who has used that comforting phrase a nice
cup of tea invariably means tea from India.He could well have been t alking about Tata
Tea.www.tatatea.com SUPERBRANDS 177Every month people in India drink over 2100
million cups of Tata Tea One in six cups of tea drunk in India is a TatablendTata Tea has the
largest tea plantation base in India, employing over 50,000 people Tata Tea was one of the first
Indian brands tousle the Taazgi (freshness) platform in the foodscategory50 million
households buy Tata Tea each year Things you didnt know about Tata Tea.
Red Label
Mumbai: Red Label, the largest tea brand from the house of Brooke Bond, for the first time in
its history of 140 years, has roped in Indian televisions smart bahu Hina Khana a.k.a. Akshara
from Yeh Rishta Kya Kehlata hai for its latest ad campaign. The latest Brooke Bond ad
campaign starring four smart bahus from across the country, aims at repositioning Red Label
Tea as the trusted choice of a contemporary Indian housewife. The ad goes on air from October
1st, 2011.
The ad campaign focuses on re-positioning Red Label Tea as not just a healthy but also a
reasonably-priced tea available in packs that fit every housewifes budget. As a part of the
campaign, the stars will be seen urging viewers not to trust everything they hear and see. The
television commercial has the actress re-assuring the audience that contrary to general
misconception; Red Label Tea offers not just superior-quality taste and health benefits but also
suits every familys pocket.
Commenting on the new Brooke Bond Red Label campaign, Mr. Arun Srinivas, Vice
President, Beverages, Hindustan Unilever Ltd, said, Our latest ad campaign plans to establish
Red Label as a tea that is not just consistent and high on quality and health benefits, but also fits
every housewifes budget. The actresses, perceived as the smart bahus of the 21st century on
the television shows will come to the forefront in their off-screen avatars and campaign for the
countrys oldest tea brand, Red Label. The ad campaign will also feature their on -screen
mother-in-laws which makes it even more interesting and engaging for the viewers.
Ms. Hina Khan, on being inducted to the Red Label family, commented Drinking Red Label
has been a part of my daily regime since my teenage years. When Red Label offered me the
chance to endorse the brand, I jumped at the opportunity. It was a wonderful experience to
see my on-screen character Akshara, the smart bahu of Indian television blending in perfectly
with the campaign.
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So Bahuranis! Pick your pack of Red Label tea-the best quality tea that is not only healthy
but also affordable
TEA VARIETIESTea can be distinguished as green and black depending on the apparent colour. Black tea
manufactured by deliberate fermentation of leaf juice, has stronger taste and liquor. Green tea
manufactured by preventing the fermentation, is light and perceived to have medicinal values.
Leaf tea can be processed as orthodox or CTC (crush, tear and curl). CTC production entails
an accelerated fermentation. Quality of tea is measured on parameters of liquor, aroma/
flavor, leaf appearance etc.
Tea is also classified on the basis of area of cultivation. The most common varieties are
Darjeeling Tea, Assam Team, Dooars Tea, Ceylon Tea, Chinese Tea and Kenyan Tea.
Consumer Habits and Practices:
Consumers differentiate tea quality on attributes of taste, pungency, strength, freshness,
color, packaging etc.
Convenient drinks like instant tea (i.e. soluble tea powder), tea bags (bags are dipped inhot water) and ready to drink flavored tea (vanilla, strawberry flavored etc) are popular
in developed countries and have negligible market in India.
Popularity of tea is significantly higher in the North. This could be due to relatively
lower cost and habits formed over the years.
Preferred variety of tea varies from one region to another. Dust which brew into
stronger tea is preferred in the South. The western states of Gujarat and Maharashtra
offer market for good quality loose and packet tea. While in the northern state of
Rajasthan, CTC fannings are liked, other states prefer CTC broken. Central India is
again a dust market.
Awareness and penetration:
Tea is by far the most popular beverage in India. Its penetration in urban areas is 89.3% and
72.6% in rural areas. At all India level, tea penetration averages 77.2%
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Interestingly, tea penetration is higher in medium sized towns (0.51mn population) at 93.3%
compared to 90.5% in metros (population above 1mn). This could be due to the fact that
coffee penetration is significantly higher at 24.2% in metros (above 1mn population) compared
to 16.7% in medium sized towns with population between 0.5 and 1mn. Awareness about tea is
close to universe in urban areas and 80% in rural areas.
Packet tea:
Between 1970 and 1985, tea consumption in the country grew at the rate of 4.5% p.a. The entire
growth was however was in loose tea segment and the relative share of branded tea declined
from 42% in 1970 to 25% in 1985. This was due to excise duty on packet tea and higher
inflation, which compelled consumers to switch to loose tea for economy.
The Union Budget 1998-99 had levied an 8% excise on packet tea above 100gm, Demand for
tea is highly price sensitive and consumers tend to shift to relatively cheaper varieties of loose
tea, when price of branded/ packaged tea rises. The levy of excise had a negative impact and
branded tea segment which was steadily rising witnessed a decline in consumption in 1998.
With heavy lobbying by the tea industry, the Government has again withdrawn the excise levy
in the recent Union Budget 1999-2000.
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MANUFACTURING PROCESS
Black tea can be processed as CTC or orthodox. About 4-5kg of green tea leaves are required
to produce 1kg of made tea (made tea is what we buy off- the-shelf). Freshly plucked tea leaves
are withered (dried) with the help of ambient or warm air for 24 hours. For orthodox tea,
leaves are twisted in rollers, juiced and enzymes are released to act on the polyphones. CTC
processing involves passing the leaves through a pair of cylindrical rollers fitted with rotary
segments (tooth like sharp edges) rotating at different speed. After rolling, leaves are fermented
through the process of oxidation. Leaves are left in fermenting drums at high humidity for
45-60 minutes. In this process, chemical changes takes place and color, strength, liquor and
aroma are developed at this stage. Fermentation process has to be arrested at right time. Themass is fired a exposed to hot air (90-120) which destroys enzymes and stops fermentation
process. Due to this firing, leaves turns black. Bulk tea is sorted by size with the help of
sieves and density through winnowing. Fiber, dust, broken leaves are separated and good
quality tea is packed in tea chest or consumer packs.
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CHAPTER-II
REVIEW OF LITERATURE
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Literature Review
Consumer Behavior Christopher (1989) studied the shopping habits of consumers to form an
idea of whether or not the store concepts, product ranges and strategies of the companies are
appropriate towards consumer requirements. He believed that consumer behaviors are
unpredictable and changing continuously changing; while trying to under try to understand
how individual or group make their decision to spend their available resources on
consumption-related items. These are factors that influence the consumer before, during, and
after a purchase (Schiff man and Kanuk, 1997), for example, feedback, from other customers,
packing, advertising, product appearance, and price (Peter & Olsonetc, 2005).
The essence of this approach is critical for organisational success, so that they can have a better
understanding of their customer behaviours (Solomon et al., 2006). The physical action or
behaviour of consumer and their buying decision every day can be measured directly by
marketers (Papanastassiu and Rouhani, 2006). For that reason many organisations these days
are spending lot of their resources to research how consumer makes their buying decision, what
they buy, how much they buy, when they buy, and where they buy (Kotler, Amstrong,
2001). To get a well coherent result, organisations normally looked at these behaviour base
their analysis on difference conceptions; whether customers buying behaviour were measured
from different perspectives, such as product quality and better service, lower price structured
etc (Papanastassiu and Rouhani, 2006)
Different theories and researchers have claimed that when organisation fully meet all aspects of
its customer needs, the result enhances their profitability (Chaudhuri, 2006), and also enable
them to develop a better tackling strategies for consumer (Asseal, 1998). Possibly, the most
challenging concept in marketing deals with the understanding why buyers do what they do
and what method or philosophy are they using to evaluate the product after the transactions andwhat might be the effect on future transaction (Schiffman, 2004). The reason why marketer
chooses to learning about consumers buying behaviour is, from a business perspective; to be
able to be more effectively reach consumers and increase the chances for success (Sargeant&
West, 2001). Therefore the field of consumer behaviour has take a tremendous turn in the
commercial world and became the fundamental concepts of achieving company goal
(Schiffman and Kanuk, 2007).
More recently, different researchers and author have given their definition and meaning of
consumer behaviour. For Michael R. Solomon (2001) consumer behaviours typically analyse
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the processes of group selected or individual purchases/dispose of product, service, concept or
experiences to satisfy their need and desires. Additionally, Kotler (1996) suggested that
consumer behaviours have a huge impact in a firm marketing decision making process every
year. There is a risk that what a consumer does will inflict on his or her behaviour and generate
consequences. (Snoj, PisnikKoda&Mumel, 2004). The user and the purchaser can be different
person, in some cases; another person may be an influencer providing recommendations for or
against certain products without actually buying or using them (Solomon 1999; Solomon et al.
1999).
In this case, most of the large consumer electronics retailers tend to gathered more information
about customers motivating factors and what influences their buying behaviours Solomon &
Stuart (2000).
To get in-depth understanding consumer behaviour concepts will gives us an idea on how its
plays significance role in our life and in the whole trend of business profit to various firms
which will allow the researcher to get the analysis and determine product positioning, develop
the message and targeting strategy in order to reach to the market (Holskins J, 2002). Consumer
behaviour involves lot aspects, such as;
Complex Buying Behaviour
This kind of buying behaviours significantly involved the consumers when making a purchase
decision. This kind of buying behaviours demand consumer to highly involve within the
process. In case of high involvement, consumers distinguish salient differences among the
competing brands (Kotler, Wong, Saunders, Armstrong, 2005). This phenomenon is
particularly essential for Dixons consumers to highly involve, and engage in extensive research
about the product category and make a good purchase decision about the firm own
manufacturing products, in case they invent a new technology electronics products or
audio-video equipment that is too expensive.
Dissonance reducing buying behaviour
This type of buying behaviour also has high consumer involvement. In terms of expensive and
infrequent purchase, consumer also undergoes reducing dissonancy behaviour. It is extremely
difficult for consumers to differential among brands in this type of buying behaviours (Kotler,
Wong, Saunders, Armstrong, 2005). Differentiating Dixons electronics products/equipments
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in the same store from PCWorld or Currys is a daunting task and consumer buying these
products may encounter dissonance reducing buying behaviour, as electronics are usually
expensive and self-expressive. Consumer may easily assume that the available electronics
brands in the store/market within a certain price range to be of the same quality. Then if the
product does not meet customers expectations, it will result to consumer to experience post
purchase dissonance (after sales discomfort) (Kotler, Wong, Saunders, Armstrong, 2005).
Habitual Buying Behaviour
Contrariwise, in this type of buying behaviour consumers have lesser levels of
involvements. It implies that consumer do not have to bother to retrieved information about
the available products and brands in the market. So therefore, there are no potential differences
between the different brands. Whether this factor will have damaging effects on Dixons will be
analyse at the findings and analysis chapter below. Because of the less level of involvement, in
habitual buying behaviour consumers dont often go to the stores to purchase product, (Kotler,
Wong, Saunders, Armstrong, 2005).
However, some believed that if the consumer persistently purchasing the same product
repeatedly, it becomes habit and their mindsets and perceptions changes overtime about the
brand and the provider (Cohen and Manion, 1987). This conception will portray the consumer
to have unconscientiously developed a brand loyalty to that particular brand due to the
consumer regular buying habits (Cohen and Manion, 1987).
Variety Seeking Buying Behaviour
This type of consumer level of involvement is low. However consumer may became critical in
terms of brand differences. Additionally, consumer may easily switch from PC World to
Currys i.e. from one brand to another. The consumers can now have beliefs about the various
brands and choose a brand without much evaluation. But they evaluate that product at the time
of purchase. In this high technology world, consumer switches their brands not because of
dissatisfaction but because of that enormous trend of technological equipment (Aaker, 1991).
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CHAPTER-III
RESEARCH METHODOLOGY
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RESEARCH METHODOLOGY
The research study has been carried out by the way of consumers sampling and the target were
retailer and customers in the Shahzadpur. The objectives of research study were met byunderstudying a survey of customer and retailers.
The research is descriptive in nature; conducted to find out the market potential of tea in
Shahzadpur.The tools used for survey were questionnaire to customers and retailer in
Shahzadpur and getting the questionnaire filled on the spot.
All the questions in the questionnaire are closed ended.
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SCOPE OF THE STUDY:
The study is basically about the analysis of the ongoing trends in customer behavior regarding
Tea. He size of sample for customers in 100 of Shahzadpur (Ambala). The scope of the study
has been kept restricted due to individual researcher.Sample Size : 100
Result have been enumerated in the findings
Data source : Primary data and Secondary data
Research Approach : Survey
Research Instrument : Questionnaire
Sampling Out : Shahzadpur
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OBJECTIVE OF THE STUDY
To know which brand is more preferred by the customers to purchase
To study the effect of various promotional schemes given by the companies
To study whether the customers are brand loyal or not.
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LIMITATIONS OF THE STUDY
Following have been the limitation of the percentage study:
The sample size of only 100 people was taken from the large population for the purposeof study.
The present study was related to rural people only.
The study was related to the customer satisfaction in respect of tea and no attempt has
been made to study the consumer behavior in respect to other durable goods.
Due to constraints of time only a few aspects of buying behavior of tea users. For the
same time due to paucity of time the statistical methods used are limited to the
collections of percentages only.
Influence of certain interviewing variables like culture, sub culture on customer
behavior and satisfaction could not be studied in detail.
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Chapter-IV
DATA ANALYSIS
ANDINTEREPRETATION
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Q.1 Which schemes do you prefer most?(Customer)
Schemes No of RespondentsRefill Jar 05
Free Gift 40
Cash Discount 26
Coupon 10
Lucky Draw 07
Extra Quantity 12
Interpretation: According to the data collected by me through the survey of 100 respondentsmaximum respondents prefer free gifts that is 40% 26% of respondents prefer cash discounts,
10% of them prefer coupons 7% of them prefers lucky draw schemes, 12% of respondents
prefer extra quantity of tea and rest 5% respondents prefer refill jar.
5%
40%
26%
10%
7%12%
Refill Jars
Free Gift
Cash Discount
Coupon
Lucky Draw
Extra quantity
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Q.2 You prefer any particular brand, if yes, which brand are you using?(Customer)
Brand No. of Respondents
Taj Mahal 30
Super Cup 15
Tazza 17Double Diamond 8
Tata Tea 30
Interpretation: According to the data collected by me through the survey of 100 respondents
maximum respondents prefer a particular brand like 30% of respondents prefer Taj Mahal,
30% of them prefer Tata Tea, 17% of them refersTazza, 15% of them prefer Super Cup and 8%
of them prefer Double Diamond.
30%
15%17%
8%
30%
Taj Mahal
Super Cup
Tazza
Double Diamond
Tata Tea
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Q.3 In your choice of tea what will you prefer first, Give rating
choice No. of Respondents
Brand name 30Price 17
Packing & advertising 15
Quality 30
Scheme 8
Interpretation: According to the data collected by me through the survey of 100 respondents
maximum respondents prefer a particular brand like 30% of respondents prefer Brand name,
30% of them prefer Quality, 17% of them refers Price, 15% of them prefer Advertising and 8%
of them prefer Scheme.
30%
15%17%
8%
30%
brand name
packing&advertising
price
scheme
quality
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Q.4 Do you shift from one brand to another on the basis of scheme and gifts and after
what time?
Brand No. of Respondents
After 2 months 38
After 4 months 24After 6 months 24
After 1 year 14
Interpretation: According to the data collected by me through the survey of 100 respondents
maximum respondents shift from one to another brand on the basis of scheme, 35% of them
changes their brand after 2 months, 25% changes it after 4 months, 25% of them changes after
6 months and 15% of them changes after 1 year.
38%
24%
24%
14% After 2 months
After 4 months
After 6 months
After 1 year
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Q.5 For how many years you have been using this particular brand?
Time period No. of Respondents
6 months to 1 year 501-3 years 25
3-5 years 18
5 years and above 7
Interpretation: The data in above table shows out of 100 respondents 50 are using a particular
brand from 6 months to 1 year, 25 of them using a particular brand from 1-3 years, 18 are using
it 3-5 years and rest of 7 are using a particular brand from 5 years and above.
50%
25%
18%7% 6 months to 1 year
1-3 year
3-5 years
5 years & above
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Q.6 Which package do you prefer to use?
Pack No. of Respondents50 gm 1
100gm 3
250gm 56
500gm 25
1 Kg. 13
2kg. & above 2
Interpretation: According to the data collected by me through the survey of 100 respondents
shows 56% of them prefer 50gm. pack, 25% of them refers 500gm pack, 13% refers 1kg. pack,
3% refers 100gm and rest 1% for 2kg and above.
1% 3%
56%25%
13%
2%
50gm
100gm
250gm
500gm
1kg.
2kg & above
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Q.7 How many times do you take tea in a day?
Usage of tea in a day No. of Respondents
One time 9Two time 35
Three time 40
If more, specify 16
Interpretation: According to the data collected by me through the survey of 100 respondents
shows 40 of them take tea thrice a day, 35% twice a day, 16 of them more than thrice and rest
9% take for it single time a day.
9%
35%
40%
16% One time
Two time
Three time
If more, specify
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Q.8 Do you prefer sale of any particular brand? If yes, why?
Reason No. of Respondents
Margin 26Target 17
Intensive 30
Schemes 27
Interpretation: According to the data collected by me through the survey of 100 respondents
shows 29% of them prefer for sale due to incentives, 27% of them due to margin, 27% of them
due to schemes and remaining 17% due to target.
26%
17%
30%
27% Margin
Target
Intensive
Schemes
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Q.9 Which brand is leader in the Market?
Brand No. of Respondents
Taj Mahal 34
Super Cup 23
Tazza 23Double Diamond 7
Tata Tea 13
Interpretation: According to the data collected by me through the survey of 100 respondents
shows Taj Mahal is the leader of marked with shares 34%, then Super Cup with shares 23%,
then Tazza with shares 23% then Tata Tea with shares 13% and then Double Diamond with 7%
share.
34%
23%23%
7% 13%Taj Mahal
Super Cup
Tazza
Double Diamond
Tata Tea
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Q.10 Does customer show any particular preference regarding brands (Retailer)
Response No. of Respondents
Yes 60
No 40
Interpretation: According to the data collected by me through the survey of 100 respondents
shows most of the consumers are preferred a particular brand 60% of dealers says this and rest40% say on consumers does not prefer a particular brand.
60%
40%
Yes
No
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Q.11 If the price of branded tea will be decreased by the company, do you think the sale
of branded tea will increase
Response No. of Respondents
Yes 60No 40
Interpretation: According to the data collected by me through the survey of respondents
60% respondents say YES and 40% respondents say NO.
60%
40%
Yes
No
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Q.12. What will be the effect of display tea on sale?
Response No. of Respondents
Increased sale 50Decreased sale 30
No effect 20
Interpretation:
After survey, it is found that the 50% respondents are say sale is increased & 30% respondents
are say sale is decreased & 20% respondents are say there is no effect on sale.
50%
30%
20%
increased sale
decreased sale
no effect
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Q.13 If the schemes are reduced what will be the effect on sale? (Retailer)
Effect No. of Respondents
Increased 37Decreased 63
Interpretation: According to the data in above table shows that the sales will be decreased
after reducing the schemes 63% of respondents say this and 37% says sales will be increased.
63%
37%
decreased
increased
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CHAPTER V
FINDINGS & SUGGESSTIONS
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FINDINGS
Retailers and Customers:
Taj Mahal is a market leader due to the company provides cash incentives to the dealers
and retailers.
Tata Tea is followed by Taj Mahal due to good margins are provided by the company.
Taaza is also a brand of HLL Company, which come at a third number due to its
advertising.
Super Cup Tea stands at fourth number due to less margins are given to dealers and
retailers.
Double Diamond comes at last number in the above five brands due to its less schemes
provided to retailers. For display of tea company provides cash incentives to retailers.
Mainly retailers suggest a brand on the basis of Margin provided by the company.
Due to display of tea the sale of that particular brand increases.
If the company reduces schemes, gifts the sale of that tea will decrease.
Currently with TajMahal Tea and Taaza the coupon scheme is launched.
Godfrey Phillips India Ltd. gives spoon and fork with the Super Cup.
CUSTOMERS:
Customer gives first preference to schemes in purchase of tea as compare to quality,
brand name.
In schemes the customers want more free gifts, cash discounts as compare to refill jar,
lucky draw.
Customers prefer particular brand, but they prefer Taj Mahal Tea that is according to
the survey of 100 customers 38% of respondents prefer Taj Mahal.
Customer shift regularly from one brand to another, 40% of customers change their
brands after two months.
Very few customers prefer from particular brand, which using that brand from six
months to one year.
Sale of 250gm. packet size is more 55% of respondents prefer 250gm. pack.
Very few customers go for purchase of local brand (mainly the workers).
More people buy poly bags of tea as compare to tea boxes.
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SUGGESTIONS
Company should give more margins to dealers and retailers
.
Company should give more and attractive advertising of tea on TV, newspaper etc.
Packaging will have to improved in color, picturisation, font style etc. from time to time
Companies have to maintain their distribution system. So, that regular supplies of tea
available to customers at right time and at right price.
Company ought to give some schemes regularly to its customers and in new attractiveways, which persuade the customers to buy.
Companies should see the strategy followed by the competitors so that they adopt
according to them
.
Company should provide more free gifts to customers to increase the sale of tea.
It is find that there are not much promotional schemes for the retailers though there are
many schemes for consumers.
The retailers with low turnover are more interested in monetary and immediate
benefits.
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CHAPTER- VI
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CONCLUSION
I come to know that the tea market is demand driven and facing cut throat competition. The
pull of the consumers is so strong that the dealers are forced to keep the brands of consumer's
choice. Moreover, the companies are enchasing upon these. There are as such no lucrative
schemes for dealers. The companies just look after the logistic involved in supplying the
product at dealers place and its advertising. Still there are some trade promotions schemes.
The stocks are supplied at the dealers place on company's cost on condition of buy back in case
of low sale. The credit terms of the company ranges from 15-20 days from the day of supply.
The dealers margin ranges from 5% - 8%. The bigger and established players such as Taaza,
Brook bond, Taj Mahal, Red Label, TetleyTea, MarvelTea, Lipton Tea, Waugh Bakri etc. gives
5% margin. Whereas smaller and new players such asPataka Tea, Jay Shree Tea, etc.
generally gives margins upto 8%. Presently, Taaza tea has come up with a display scheme for
the dealers. When asked for the most effective consumer promotion scheme most of them
pointed out on the spot schemes such as gift inside, cash discount, and extra quantity as the
best, Out of these most of them cited cash discount as the best.
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QUESTIONNAIRE
FOR DEALERS AND RETAILERS
Name of Dealer : ____________________________
Name of the firm : ____________________________
Name of Dealer : ____________________________
Name of Firm : ____________________________
Q.1 Please specify the respective scheme conference on such products?
a) TajMahal b) Tata Tea
c) Tazza d) Double Diamond
e) Super Cup
Q.2 Which brand is leader in Market?
a) TajMahal b) Tata Tea
c) Tazza d) Double Diamond
e) Super Cup
Q.3 Do you + sale of any particular brand? If yes, why?
a) Margin b) Target
c) Incentive d) Schemes
Q.4 Does customer shows any particular preference regarding brands?
a) Yes b) No
Q.5 If yes, which brand sells the most?
a) TajMahal b) Tata Tea
c) Tazza d) Double Diamond
e) Super Cup
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Q.6 If Yes, How much?
a) 5% b) 15%
c) 10% d) 20%
Q.7 Does company indulge in display and merchandising? If yes, on what terms specify?
_____________________________________________________
Q.8 What will be the effect of display of tea on sales?
a) Increased Sale b) Decreased Sale
c) No effect
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IN CONSUMER SEGMENT
Name : ____________________________
Location : ____________________________
Q.1 In your choice of tea, what will you prefer first, Give rating?
a) Brand Name b) Price
c) Packaging & Advertising d) Quality
e) Scheme
Q.2 Do you prefer particular brand, if yes, which brand are you using?
a) TajMahal b) Super cup
c) Tazza Tea d) Double Diamond
e) Tata Tea
Q.3 Which scheme do you prefer most?
a) Refill Jar b) Free Gift
c) Cash Discount d) Coupon
e) Lucky Draw e) Extra Quantity
Q.4 For how many years you have been using this particular brand?
a) 6 months to 1 year b) 1-3 years
c) 3-5 years d) 5 years & above
Q.5 Do you shift from one brand to another on the basis of schemes and gift and after what
time?
a) After two months b) After four months
c) After six months d) After one year
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Q.6 Which package do you prefer to use?
a) 50 gm. b) 100gm
c) 250gm. d) 500 gm
e) 1Kg. e) 2 Kg. and above
Q.7 How many times do you take tea in a day?
(a) One time (b) two time
(c) Three time (d) If more, specify
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BIBLIOGRAPHY
BOOKS:
Zikmund, William G "Business Research Methods" Johnson South Western, Seventh
Edition, 2003.
Ram Pal & Gupta, "Articles on Consumer Buying Behavior"
The psychology of consumer behavior by Brain Mullen
Consumer behavior written
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