Tea Leaves For Rural Area in Bangladesh
Tea Leaves For Rural Area in Bangladesh
Tea Leaves For Rural Area in Bangladesh
Business environment is very dynamic and changing. In order to come up with good
marketing strategy marketers need to understand the business environment. There are two
types of environment:
a. Macro environment
b. Micro environment
%of
total
0-14
15-29
30-54
55-64
65+
Population
39.73
25.94
25.21
5.36
4.36
Rural
In rural areas around 39.73% of total population is below 14 years and around 25.94% of
people are in between 15-29 years. Furthermore, 25.21% people belong to age group 30-54.
(Bangladesh Bureau Of Statistics (BBS), 2008). If we target age group 15-29 and 30-54 then
we can cover almost 55% of total people live in rural areas.
Religious Market:
Religion
Muslims
Non-Muslims
Around 89.1% of total rural population is Muslims whereas only 10.9% are Non-Muslims
(Hindu, Christians, Buddhists). (Bangladesh Bureau Of Statistics., 2008)Therefore marketers
need to make sure that the ingredient, raw material and packaging material of the product is
Halal.
Educational Group:
Education Level
Illiterate(Rural)
(Bangladesh
Bureau
of
(BBS) , 2011)
Primary School Dropout (Nationally)
Secondary School Dropout
Secondary School Completion
Higher Secondary Dropout
Higher Secondary Completion
University
(BANBEIS-Educational Database, 2013)
21.7%
44.41%
55.59%
21.80%
78.20%
According to Bangladesh Bureau of Statistics (BBS) around 48% people in rural areas are
still illiterate hence we need to choose such a communicating media so that we can reach to
our target customer.
Household patterns:
Household patterns mean the study of the family. In Bangladesh we can manly see 3 types of
household. They are joint family, nuclear households, and single family. In the rural area of
Bangladesh we can mainly see the joint family where there is large number of family
members living together happily.
Natural environment
Bangladesh is a developing country where most of the people are dependent on agriculture or
other natural resources for their livelihood. At the same time, productivity of nature is
necessary to meet the food demand of a huge population. On the other hand, Bangladesh is
one of the most climate changes impacted countries (CPD, 2001). Geographical position of
Bangladesh makes it more vulnerable to natural disaster. Increase frequency of various
natural disasters, and the continuation of environment pollution warrant the necessity to
evaluate present environment policy of Bangladesh.
Bangladesh is facing severe environmental degradation in various areas. Though the
population growth of Bangladesh has been reduced significantly but still it is very populous
country. Increase of population increases the demand for consumption and which ultimately
exploits and degrades natural resources. Severe land pollution, water pollution, air pollution,
degradation in natural resources, bio-diversity, and forest land occurred in Bangladesh.
Nature is the source of raw materials for the production of a product. The raw material may
be renewable, infinite or consuming. In all the cases the raw material will be preserved and
wastage must be minimized. The natural environment involves natural resources that are
needed as inputs by marketers or that are affected by marketing activities. During the past
two decades environmental concerns have grown. Some analysts labelled the specific areas of
concern were:
Shortages of raw materials:
Staples such as air, water, and wood products have been seriously damaged. Non renewable
resources such as oil, coal, and various minerals have been seriously wasted during industrial
expansion.
Increased pollution:
Concentration of huge population in urban area and their activity pollute the urban
environment of Bangladesh. On the other hand agrochemical fertilizers are polluting the rural
environment. Pollution is more acute in the urban area of Bangladesh than it is in the rural
area.
Major causes of pollution that aggravate water quality are industrial effluents, agrochemical,
fecal pollution, and spillage and low water flow in dry season. Water pollution is
compounded by the low flow situation in dry season.
Air pollution is more in urban areas than in rural areas. The main sources of air pollution are
emission of harmful gaseous matters from vehicle, industrial sectors, and construction and
open dumping of garbage. Some other sources are brick kilns and wood and biomass
consumption.
Land degradation occurs in the form of loss of soil quality through salinity intrusion, fertility
decline, nutrient imbalance and top soil loss through erosion. However, high cropping
intensity, loss of organic matter and imbalanced use of fertilizer and pesticides have taken a
very serious toll on overall soil health. Soil quality or productivity is on decline.
Economic environment:
Economic factors are basically the factors that affect the purchase decision of the people. At
the rural area of Bangladesh most of the people earn very low. Mainly the men of the houses
are the earners and the wives stayed at home. Most of the children are dropout after class 5 to
8. Most people live from hand to mouth. These families of the rural areas live on agriculture
and fishing. Most of them do not have their own land. They worked on others.
There are also aged people who are depends on their others to take care of them. The people
who lived in the rural areas can not enjoy the luxuries of life. The look for products with
lesser priced. They have a very weak purchasing power. They spend very less on any types of
goods other than daily foods.
Their main spending is on daily foods, specially vat (boiled rice). They are second major
spending is on the seeds and fertilizers (for the farmers) or for foods of fishes and nets (for
the fisher men). So they spend very less for the non-durable products. Though there are some
families earn moderately good monthly and lead a higher class of life (establish farmers and
the politicians). Sometimes they spend even more than the middle class or higher middle
class of urban areas.
Socio Class
SEC A
SEC B
SEC C
SEC D
SEC E
Income
Tk 40000>
10000 30000
6000 -- 20000
5000 15000
3000 10000
Industry structures:
The people of rural areas depend on natural resources for their basic needs. But some
established families now a days do try to enjoy some of the products apart from their
previous trends. There are some new middle class and very few higher middle class in the
rural areas. They do like to spend for goods that are popular in the urban areas specially
Dhaka city.So basically it is a mixture of subsistence economies and Industrializing
economies. The opportunities for the marketers are moderate but due to the increase is
economy there will be a better opportunity in future.
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Technological environment:
The rural areas of Bangladesh have advanced technologically in recent years. It helped
different companies to go through their target customers with products who usually target the
socio economic class D and E. The rural area people fall into the group D and E of socio
economic class. Generally the people who live in rural areas are uneducated and poor, but the
number of educated people are getting increased day by day. As they are uneducated, cant
read newspaper and magazine. It is also because they are poor and cant afford to buy.
According to Bangladesh Bureau of Statistics (BBS) around 48% people in rural areas are
still illiterate, so the use of newspaper and magazine for promotion in rural areas are not
appropriate. Instead of using those mediums need to use technologies like television, radio,
mobile etc. These mediums will be more effective to get in touch with the rural people.
According to Bangladesh Bureau of Statistics (BBS) around 48% people in rural areas are
still illiterate hence we need to choose such a communicating media so that we can reach to
our target customer.
Media
Newspaper
Radio
Television
Internet
Mobile phone user
Mobile money transfer user
Statistics shows that around 13% people read daily newspaper so we can air our message in
newspaper. However, we need to keep it min that around 48% of people are illiterate in rural
areas. Interestingly, 39.07% of people watch television but only 3.88% people listen to radio.
Unfortunately, only o.45% people have internet access (Bangladesh Bureau of Statistics
(BBS), 2011) In final words, we should heavily focus on TVC since Around 40% people
watch television and we should go for RDC as well since in rural areas when people dont
have electricity then they mostly listen to Radio. However, it would not be handy if we go for
online advertisement or social networking site like Facebook.
Television has become the most established entertainment medium for rural people. Thats
why television is the best medium to reach them. According to Human Development Report
2010, 92 percent people watch only BTV in the rural areas. So, the best way to reach the
target customer should be using BTV. Bangladesh's mobile networks reach 73 percent of
rural households, according to a survey by the International Food Policy Research Institute
(IFPRI. Mobile money transfer services were targeted at rural people, but 48 percent of
mobile money users reside in urban areas, according to a study by PI Strategy Consulting in
partnership with the CGAP (the Consultative Group to Assist the Poor) of World Bank. But
around 70 percent of urban users are the rickshaw pullers who take the service to send money
to the rural areas. The use of mobile phone for promotion will also be very effective. In that
case, the users of mobile phones can easily listen to radio. Only 42.49 percent people in rural
areas in Bangladesh have access to electricity. So, radio is yet a very good source to reach
people in rural area.
Socio-cultural environment:
In rural parts of Bangladesh, some shared beliefs, values, and principles can be noticed
among people. These cultural factors shape the thinking process and consumption pattern of
rural people. Their culture involves certain core beliefs and values and a number of secondary
beliefs and values.
Core Beliefs and Values:
Rural people have strong religious views. Their belief in religion is a core belief. They build
their life on the basis of religious principles which are adopted from families and cemented
by religious institutions and schools. Since most of the people are Muslims, they are greatly
influenced by Islamic principles. They are particularly conscious about their food being
halal. Having faith in marriage and family are among their core beliefs. These beliefs are
instilled in the minds of people from an early age and they grow up with the idea of getting
married and having family. Rural people believe in unity. They lead their life in harmony
within communities and cooperate with each other. They strongly believe in hard work to
survive in life. Furthermore, hospitality of rural people towards their guests can be
recognized as yet another core value. They are well-known for their warmth and openness
while greeting and attending guests.
Our target customers are actually tea sellers in the area stalls, bazaar and also the households
of the rural areas who belong to the social economic class D and E. We are going to provide
same quality products at lower price. The main concern for our target customers is price. As
we are going to ensure them good quality product with lower price, we think it will definitely
work.
In case of our target customer, they usually dont pay attention to the quality of the product.
But through our advertisements and campaign we will let them know about how the good
quality effects in many ways. The regular customers of a tea stall in a village usually dont
look for the specific brand while buying tea. It does not really matter to them, because their
perception is the taste of tea depends on making rather the quality of tea. We will create a
strong brand value for our brand through changing their perceptions. We will make them
understand that if they use good quality product like we are going to serve, then they will find
the outcome. Sometimes pressure of physical labor keeps people away from their work or
they become inactive. Our product will simply make the target customers understand that
SHOTEZ the brand name itself signifies the freshness. By taking a sip of our tea they will
get refreshed will last it for longer time, we will show it them through our TVC. Our product
will also efficient in its manner. It will provide great taste, color and most importantly while
making tea it will required fewer amounts than our competing brands require.
Our primary survey revealed the following consumer insights:
When they buy tea, most of the time they buy non-branded tea. This is because they
want it with in a very minimum price.
Available branded tea usually they find costly.
They dont even find good quality tea in the retail shops located nearby.
Fathers are the main customers who buy tea for their family and the shopkeepers
usually buy themselves.
For family 50gm sized pack is more preferable and for shopkeepers it is 400gm pack
size.
The main benefit while buying tea, they look for is low price.
Our survey revealed that most of the people usually take tea three times a day.
We got actually neutral answers from the target customers while asking them question
about where they usually take tea. So we will target both the shops in Bazaar and
home.
Most of the people answered they take tea because they want refreshment. So we
focused on longer refreshment.
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Their main entertainment media is Television. But we find that they use radio as an
alternative entertainment media when occurs load shedding. So we tried to reach them
both through TVC and RDC.
Most of our target customers prefer watching Bangla movies. Sometimes they also
like to watch cricket games live and news as well. So we will take this opportunity to
sponsor cricket games. We will also take the time slot of Bangla movies and News to
air our TVC and RDC.
Most of our target customers like to go to a festival called PahelaBaishakh and
Victory day. So we will sponsor those programs to promote our product.
User/consumer
Purchaser
Decider
Initiator
Influencer
Initiator: The individual who begins to search for a solution to the customers problem.
Here, in case of family father can be the initiator, for the tea stall located in the bazaar the tea
maker can be the initiator and for the area shops the shopkeeper can be the initiator.
"SHOTEZ" tea will be promoted and distributed extensively so that they can get the product
whenever the need arises.
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Influencer: Individual who may have some influence on the purchase decision. Influencer
always has a deeper impact on the minds it also lead to actual purchase of the product.
Sometimes the word of mouth of influencer affects consumers purchase decisions. In this
case, neighbors, the individual customers of tea stalls and area shops can influence.
Decider: They are the individuals who listen to the initiator and influencer and then decide
which brands to purchase. That means taking into account the views of the initiator and
influencer, an individual will actually make a decision as to which product to purchase. The
consumer himself or the elder member of the family especially father or mother of a family or
the tea stall owner and shopkeeper can be the decider of purchasing our product.
Purchaser: The individual who actually buys the product or service is also known as
purchaser or customer. Mainly purchaser is the individual who spends money to make
purchase. For our product deciders are the purchasers.
Consumer: Individual who actually uses the product means the end user of the product. The
members of a family, the customers of a tea stall located in the bazaar and area shops are the
consumers.
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Competitor Analysis:
It is important to know about competitors to enter into a market. By knowing competitors
company can set up their strategy. Analysis of strategies followed by competitors often
reveals their strengths and weaknesses that can be helpful in designing the right marketing
strategy.
Strategic Group:
Strategic group signifies a group of firms in the same industry, following the same or a
similar strategy in a given market aimed at identical group of customers.
The tea brand SHOTEZ, belongs to the strategic group of Fresh tea and Muskan tea. These
companies follow the same strategy that is undifferentiated marketing strategy. Their target
segment sec D and sec E. Our brand SHOTEZ also falls under the same strategic group as it
is aimed at the same socio economic class and consumer needs.
Direct competitors:
The competitors operating in the market within the same product category, addressing the
same need of the selected segment, are the direct competitors of our brand SHOTEZ. In the
market, there can be observed numbers of competitors that exist in the tea market, addressing
same need. Among them the most popular brands are
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Indirect Competitors:
The Competitors who serve the same need, but do not fall in the same product category are
the indirect competitors. These competitors are basically the substitute products that fulfill the
same consumer need our product serves. In the tea market, the major indirect competitor can
be coffee.
Competitor Assessment:
Our research revealed:
Our main competitors are IspahaniMirzapore tea, Taaza tea, Fresh tea and Muskan tea. They
are targeting the same customers. IspahaniMirzapore tea and Taaza tea target all the segments
of consumer through their differentiated marketing strategy. Fresh tea and Muskan tea follow
the undifferentiated marketing strategy to attract customer. Finlay follows the differentiated
marketing strategy. Ispahani is the market leader right now in the tea market. They have the
highest market share. Taaza also has the second highest market share. But we have the
opportunity to make market in rural market. All the competitors give most importance in
urban area. Thats why we choose cost leadership strategy to capture the market. We will be
doing that by providing our customers better quality product at lower price. We will build a
good relation with our distributors so that they store our product in a large volume. That will
be our one of the major strengths.
IspahaniMirzapore Tea:
It is the largest tea trading company in the country. It dominates the domestic tea market,
capturing approximately 50% of the national branded tea market and 80% of the branded tea
bag market. Its best selling brands such as Mirzapore best leaf, Mirzapore double chamber tea
bags, IspahaniZarreen Premium are household names. Ispahani is following the differentiated
marketing strategy. They are targeting all the segments so that they can go in everywhere.
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Thats why customer can get their product easily wherever they are. They produce different
pack sizes. They have priced 20g for BDT 6 tk, 50g for BDT 20 tk, 100g for BDT 40 tk, 400
g for 140 tk, and 50 teabags for 70 tk.
Their major strengths include:
1. Its quality and achieves a high customer satisfaction
2. Unrivalled distribution network of over 300 sales centers
Their weaknesses are:
1. Do not have strong distribution channel in rural area
Taaza Tea:
Taaza stands for premium quality and refreshment bringing in the world famous tea blending
expertise and heritage of the Brooke Bond House. Brooke Bond Taaza consistently delivers
its promise of freshness with the help of Unilevers world-class buyers and blenders. Taaza is
made from the finest tea gardens of Bangladesh. Taaza is following differentiated marketing
strategy. They are second largest market share after Ispahani. Its best selling brands are
Brooke Bond Taaza Danedar and Brooke Bond Taaza teabag. They have priced the 50g tea
pack size at BDT 20, 400g at BDT 139 tk, 50 teabags at BDT 70.
Major strength:
1. Established brand in the market
Major weakness:
1. Lack of variety in the product line.
Fresh Tea:
Fresh tea was established in 2000. Fresh tea is one of the best tea blends of the country with
the best raw tea carefully chosen from the finest gardens of Bangladesh. Fresh tea has great
strength, mouth fullness and taste. Along with bright liquor, attractive color and natural flavor
it gives you the best freshness. Fresh is following the undifferentiated marketing strategy.
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Brand: fresh premium tea, fresh danedar tea, fresh dust tea, no-1 leaf tea, no-1 strong
tea.
Sources of raw materials: Sylhet, Chittagong, Bangladesh tea board auction.
Pack sizes: 500 gm, 400 gm, 200 gm, 100 gm, and 50 gm.
Customers: household, superstore, grocery shop, hotel, restaurant, tea stall.
Major strength:
1. Best tea blend of the country
Major weakness:
1. Dont have strong distribution channel.
Muskan Tea:
Muskan tea vouches for the sensation and comes in a special moisture-proof pack that
preserves the aroma and freshness of the tea leaves inside. Its unique blend has maintained its
place in the hearts of consumers with the most refreshing and revitalizing cup of tea. Each
grain of muskan tea has been selected from the finest tea gardens of Bangladesh, giving a
blend with exceptional color, taste and aroma. Muskan tea is packed under the supervision of
tea experts within a clean environment. Currently they are serving 500 gm for BDT 156 in
the market. Muskan tea sources the best tea leaf from around the country and provides a
perfect blend, packaging its rich aroma and color in branded product. They are experts in
providing the right cup of tea for your everyday need, with around the clock quality check in
all its processes from choosing the right leaf to packaging. Muskan is following the
undiffrentiated marketing strategy.
Product: Black tea
Pack size: 200 gm and 500 gm sizes.
Major strength:
1. Price is lower than competitors
Major weakness:
1. Not popular in consumer market
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Finlay tea:
Finlay is a global integrated tea company focusing on the manufacture and sale of black tea,
green tea, instant tea and decaffeinated tea. It also has other significant interests including
coffee trading and packaging. Finlay is able to supply an entire of leaf teas specially
formulated for particular customers requirements and able to manufacture tea with certain
color, taste, and characteristics. Finlay is following the differentiated marketing strategy.
They have priced the 200 gm at BDT 85. Other pack sizes like 100 gm and 500 gm also
available.
Major strength:
1. Well known and popular in consumer market.
Major weakness:
1. Dont distribute their product that much in rural area.
The primary competitors of our brand are Ispahani Mirzapore Tea, Taaza Tea, Fresh tea and
Muskan tea. As such, we have chosen to implement the market challengers strategy in
launching our brand into the tea market. There exists a tremendous market share to be gained
from the rural segment. Tea has a great demand in rural area. Most of the tea companies dont
give that much importance in rural area. Thats why its a big opportunity for us to make our
product profitable through different promotion campaign and distribution channel.
The primary strategy would be attacking the presently residing brands and grab their market
share through side attack.This would be effective in capitalizing on the weaknesses of both
rival brands through:
1) Lower price, so that consumers can afford it.
2) Strong distribution channel so that all the rural consumers can get our product.
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The successful implementation of this strategy calls for effective distribution channel which
is currently the prime weakness of the rival brands.
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Considering the recent scenario, political instability of our country can be a roadblock
in regulating business effectively.
Dhaka
Chittagon
g
D
h
a
k
a
Ch
itt
ag
on
g
Sylhet
Barishal
S
yl
h
et
Khulna
Ba
ris
hal
Rajshashi
K
hu
ln
a
Rangpur
Ra
jsh
ahi
Ra
ng
pu
r
Demographic:
Age
Gende
r
Educat
ion
Occup
ation
0-14
Male
Income
Religio
n
House
hold
Patter
n
Ethnici
ty
Marita
l Status
Socio
A
econo
Unedu
cated
Studen
t
Musli
ms
Single
Individ
uals
Bengal
is
Marrie
d
15-29
Femal
e
SSC
30-54
House
wife
Worki
ng
Wom
en
Worki Unemploy
ed
ng
Men
Hindu
s
Nucle
ar
Famil
y
Others
Christ
ians
Joint
famil
y
Budd
hists
Oth
ers
HSC
55-64
Bachelors
65+
Masters
PH
D
Single
B
21
mic
Class
(SEC)
Income 40000 tk and
more
10000-30000
6000-20000
500015000
300
0100
00
Psychographic segmentation:
Personality
Loving
Lifestyle
Trendy
Compulsive
Sociable
Healthy
Sporty
Imaginativ
e
Fancy
Assertive
Behavioural Segmentation:
User
Status
Usage
Rate
Buyer
Involveme
nt
Loyalty
Status
Current
Customer
High
Ex-Customer
Medium
High
Low
Hardcore
Loyal
Split
Loyalty
Competitors
customer
Low
Potential
customer
Shifting
Loyalty
Switchers
Benefit Segmentation:
Benefits
Refreshment
Low
Price
Weight
Loss
Less Cholesterol
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Rural
Villages
Around
Age
Gender
Education
Income
Dhaka
Chittagon
g
Sylhet
Barishal
29-44
Female
SSC
1000030000
Housewife
45-54
54+
Occupation
15-29
Male
Uneducated
40000 TK
and more
Student
Religion
Muslims
Hindus
Household
Pattern
Ethnicity
Marital
status
Socio
economic
Class (SEC)
Lifestyle
Single
Individuals
Bangalis
Single
Nuclear
family
Others
Married
User Status
Competitors
Customer
Potential
Customer
Usage Rate
High
Medium
Buyer
Involvemen
t
Loyalty
Status
Low
Switchers
Split
Loyalty
Benefits
Refreshmen
t
Low Price
HSC
600020000
Working
Women
Christian
s
Joint
family
500015000
Working
Men
Buddhist
s
Rajshah
i
Khuln
a
Rangpu
r
300010000
Others
Healthy
Shifting
Loyalty
Sales potential: The total domestic Tea consumption was 64 million kg which worth around
TK 12122.24 million. So the attractiveness of the market is high. (Bangladesh Tea Board,
2013)
Growth potential:The internal consumption of tea has been increasing rapidly in last era. In
2001, internal consumption was 36.95 million kg and in 2013, it is increased to 64.00 million
kg. (Bangladesh Tea Board (BTB), 2013)
Competition: Though there exists intense competition in the tea industry, the sales and
growth potential overcomes this intense competition.
Positioning Strategy
Brand positioning is nothing but the superior value or the unique benefits that reminds the
consumer about such brands. The positioning of a brand provides consumers a compelling
reason to choose the brand in place of the competitors.
Point of difference (POD) association:
It is such benefits or attributes that a brand provide to the consumers to portrait themselves
different than their competitors. The point of difference is strongly favorable for the brand
itself. It creates strong positioning of the brand in the consumers mind. But creating a strong
brands point of difference is a tough job.
A point of Difference must possess 3 Characteristics
1. Desirability: Desirability states that the brand POD must be attractive and appealing
to the customers. Our main point of difference is better refreshment for a longer
time. For the people who live in villages their most premium priority is the price. So
we are also offering the lower price than that of our competitors. So our target
customers of Socio economic Class
2. Deliverability by the company: refers to the ability of a company to deliver the
value proposition of the brand to its customers. We are utilizing the best possible raw
materials at a lower price. We will buy our direct materials in a bulk, which will
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allow us a lower production cost. And thus we will be able to deliver the product to
the consumers at a cheaper price. And as we will use better quality of raw materials,
the caffeine of such materials will provide better refreshment of mind and soul for
the rural people.
3. Differentiating from the competitors: our main differentiating point from the
competitors is our pricing. We are offering lower price than the other brands, such as
Isphanai, Taza etc.
Point of pairity (POP) association:
All of our competitors are offering a good refreshing time. Like Ispahani is offering a
healthy and relaxation time with friends. The point of parity association has two basic
forms.
1. Category point of parity: it refers to those benefits or attributes that a product
or service must have to stay in that industry. In one word they are the necessary
benefits that are required by the industry. For the tea industry the category point
of parity is hot drinks, which provide refreshments. As we are purchasing the
best raw materials available at the cheaper price, those materials will provide
such benefit to the consumers.
2. Competitive point of parity: they are the benefits that neutralize the
competitors point of difference. For our SHOTEZ tea the competitive point of
parity is its different packed sized, specially the small sachet we are providing.
Positioning Statement:
Positioning statement is the sentence that describes the brand position of the brand. For our
product the positioning statement is To the consumers belonging to the SEC D and SEC E,
in the rural area of Bangladesh, who is looking for a better refreshing tea time, SHOTEZ tea
provides a longer and refreshing moment from their stressful and hardworking life.
Differentiation strategy:
1. Employee differentiation: for our brand SHOTEZ tea, we would like to higher those
people who are accustomed to the rural environment. They will be provided with
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training of how to convinced rural people. They will provide the consumers information
about our product and its benefits.
2. Channel differentiation: more effective and efficient distribution strategy can be a
valuable asset for the brand. As the tea market is competitive, we will pursue a different
distribution strategy than our competitors. Rather using whole sellers or retailers, as our
prime customers will be the tea stalls, well will hire a person for each Union and that
person will personally keep contact with the tea stall owner and always provide the
product on order. No financial intermediaries will allow us to sell the product at a price
that will be a win-win situation for both the company and the tea stall owners.
Value proposition:
For our SHOTEZ tea the value proposition strategy we are following is the same for less.
Such value proposition is stand for providing the same benefits at a lower priced. We will
be providing the same attributes as our competitors but we will charge lower price than
them. And as the rural people are mainly concern about the price of products, and they
mostly look for a cheaper one, our value proposition will lead us to a higher sell in volume.
Product Strategy
The Different Levels of the Product
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PAEBCoxuatpsgeeimncPiarnoldPufirocdtuct
PCoreBasnicfiProductExpAcoutgedmnialProduct
There are five different levels of a product such as: Core benefit level, Basic Product level,
Expected product level, augmented product level and potential product level
1. Core benefit level
This is the first level of the product. It is the core customer value and the core
customer need that is being provided/fulfilled by a product or service. Our product
gives refreshment for a longer period of time.
2. Basic product level
These are the basic different attributes of a product which deliver the core benefit to
the customers. Our product is hygienic and natural. It gives the maximum
refreshment. No harmful chemical is used.
3. Expected product level
The different attributes and performance marks which a consumer expects from a
product or service. Usually from our product consumers can expect good quality
at low price.
4. Augmented product level
These are the additional customer services and benefits that a company provides to its
customers. For our brand theres no augmented product level.
5. Potential product level
This is the final level of a product. These are all the possible augmentations and
transformations the product or offering might undergo in the future. We expect to
come up with more variants of tea in future.
Durable or Non-durable Product
1. Durable Products
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Durability signifies the expected economic life of a product. Durable goods are
tangible in nature which survive many uses. These products require more personal
selling. Their profit margin is high and require more seller guarantee.
2. Non-durable Products
Tangible goods are normally consumed in one or few uses. As these goods are
frequently purchased, the appropriate strategy is to make them available in many
locations. Profit margin is low. Advertise heavily to induce trial and preference.
Here we can say SHOTEZ CHA is a non-durable product as consumers cant re-use
it and they need to purchase once/twice a month depending on the pack size.
Consumer Good Classification
1. Convenience Goods
Products that are purchased frequently, immediately, and with minimal
purchasing effort and comparison shopping.
These products need mass promotion and widespread distribution.
The product price should be less.
Habitual or variety seeking buying behavior occurs in case of purchasing
convenience goods.
2. Unsought Goods
These are the products which consumers are not aware of or havent thought
of buying until they need them.
Aggressive promotional effort is required by the marketers to build brand
awareness.
After discussing after discussing these consumer goods we can say that our product falls
under convenience and unsought goods. Because:
Tea is used and purchased frequently, immediately and with minimal purchasing
effort. Consumers usually dont compare among brands or style of tea. They go to the
shop and purchase available brand without any differentiation. The price is also very
low. So, we will say that SHOTEZ CHA is a convenience good.
As we are targeting socio-economic class D & E, most of our target consumers are not
aware of our brand. They previously purchased other competing brands. So, our
product also falls under unsought goods.
Product Category
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We vacuum seal all our teas into our vacuum packs as soon as we get them. We have special
vacuum packing machinery, which seals the tea into a vacuum pack by removing all the
oxygen from it. This process ensures that the tea does not loose its freshness, aroma & flavor
by preventing the growth of microorganisms that spoil food products. Thus, the shelf life of
tea is increased considerably making sure it remains fresh during storage and transportation.
We pack all our teas in superior quality three-layered aluminum packets to protect the tea
from being exposed to air or moisture, thus increasing its shelf life.
Considering our target customers, we have tried to keep our packaging as simple as we could
along with maintaining the standards of a good packaging. Our brand name SOTEZ is
short, and it is a familiar word to our target customers. We have used Sonar Bangla font so
that it is easily understandable and readable from distance. We have used vibrant colors to
make it more attractive to our consumers. We made sure that it looks attractive enough for
our consumers to make them feel the difference. Compared to our nearest competitor brands
our packaging is better yet cost effective.
Convenient Pack Sizes
We deliver our teas in convenient pack sizes of 20g, 50g, 100g & 400g so consumers do not
have to order large amount of tea of one type.
Benefits of Packaging:
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Price sensitivity of demand: signifies what happens to buying behaviour when price
changes. From our customer analysis part, we have found that our target consumers are very
much sensitive to price. In other words, if we charge lower price with same level of benefits
then they are more likely to switch to our brands.
Estimating cost and price:
1. 20gm pack size
Packaging and labelling cost: TK 0.4
Cost of producing per gram tea: TK 0.20
Total Cost for 20 gm pack size: 20gm* TK0.20+ TK 0.4= TK 4.4
2. 50gm pack size
Packaging and labelling cost: Tk.0.8
Cost of producing per gram tea: TK. 0.20
Total cost for 50gm pack size: 50gm* TK. 0.20+ 0.8= TK 10.8
3. 100gm pack size
Packaging and labelling cost: Tk.1
Cost of producing per gram tea: TK. 0.20
Total cost for 100gm pack size: 100gm* TK. 0.20+ TK 1= TK 21
4. 400gm pack size
Packaging and labelling cost: Tk. 3
Cost of producing per gram tea: TK 0.20
Total cost for 400gm pack size: 400gm* TK. 0.20+TK 3= TK 83
Trade price (TP):
Pack Size
20gm
50gm
100gm
400gm
TP
TK 4.5
TK 12.6
TK 24.5
TK 92.4
Justification: Weare charging different profit margin for different pack size.
Pack Size
20gm
5ogm
100gm
400gm
Since we are going to launch our product in the rural areas and have targeted people who are
mostly in the socio economic class D & E. we assume that they will buy more 20gm pack,
therefore we are charging only 2.5% profit margin. Furthermore, consumers who are in the
joint family tend to buy more 50gm or 100gm pack size so we are charging 16.67% profit
margin. Customers like tea stall owners will buy more 400gm pack size and we will earn
12% profit margin.
Market retail price (MRP): Cost of per Unit Purchase/ 1- Desired Profit Margin
Pack Size
20gm
50gm
100gm
400gm
MRP
(TK 4.5/1-0.11)=TK 5
(TK 12.6/ 1-0.3)=TK 18
(TK 24.5/1-0.3)=TK 35
(TK 92.4/1-0.3)=TK 132
Justification: We have decided to set our MRP at which our marketing intermediaries can
earn 30% profit margin except for 20gm pack size. If we allow them to earn 30 % profit
margin by setting TP TK. 3.5 then we will incur loss of (Total cost 4.4- TP 3.5)= 0.9 TK per
unit. Therefore, we allow them to earn only 11% profit margin by setting the TP TK4.5. That
may lead to arise to a problem like marketing intermediaries will be less likely to buy 20gm
pack even though customer demands 20pack more. Hence, to overcome this problem we have
decided to give more trade promotion to our marketing intermediaries for 20gm pack size.
When customer buys large pack size, per gram purchasing cost goes down.
Pricing Methods:
Penetration pricing:is a pricing strategy whereby we are going to set a relatively low initial
entry price, usually lower than the intended established price, to attract new customers.
Hence, well encourage customers to switch to the new product because of the lower price.
Justification: Penetration pricing strategy is most consistent with our pricing objective of
increasing market share by selling at a large volume. We may face lower per unit profit since
we charge lower price for our product but the fact if we can sale at large volume then our
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total profit will be high in the long run. Furthermore, if we can sale at large volume by setting
the price low then it will lead to capture a big portion of the market share.
Price Adoption Strategy
Price Discount and Allowances:
Seasonal Discount: Well also follow time based pricing whereby well charge different
price based on the time like season. In summer in between April to July, people are less likely
to have tea so well provide them an incentive to buy our brand say for 12:2 whereby well
provide 2 extra packs of our 20gm tea pack if they buy 12 piece of 20gm packet at a time.
Promotional Pricing:
Special events pricing: We will pursue special event pricing during some special events like
Eid, Puja, rural election to encourage customer to buy more tea. We allow our customers say
for a tea stall owner to buy at 6:1whereby if they 6 pack of 400gm our brand then we will
provide a 100gm pack free.
Differentiating Pricing:
Product Form Pricing: well charge different price for the same product based on the
different pack size.
Push strategy is providing incentives to the marketing intermediaries, who resulted more
demand from the intermediaries and thus the product is pushed down the channel. On the
other hand marketing pull strategy is providing incentives to the consumers, so that they
demand more.
For SHOTEZ tea, as it is a new brand in the market, we will follow the push strategy to
attract the marketing intermediaries and make our product available in their shops and stores.
Our first target is to attain more position in the distributers shell, thus try to move away our
competitors product. As from our visit to a village we had witnessed that the rural people do
not have a very high brand royalty. Rather they would like to buy the available product. So if
SHOTEZ tea becomes the most available product then they will buy it more. Even for higher
incentive the shopkeepers will buy our brand more.
After convincing
the
distributers
we
will also follow the pull strategy to attract the consumers to us. As the rural people are very
much price concern we will provide 20% extra in the packages at the same price.
Manufacturer
Distributer
Independent
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Shopkeeper
Independent
Consumer
We will follow the conventional marketing strategy. We will hire independent marketing
intermediaries. For hiring the Distributers we will analyze their success and ability to reach to
the maximum area. We will hire a distributer for each sub division and that distributer will be
those who have good reputation in those sub divisions. These distributers will take the
product from us and supply it to the shopkeepers and the tea stall owners.
And finally the shopkeepers and the tea stall owners will deliver our brand to the consumers.
For delivering our product we will follow two independent intermediaries --- Distributer, who
will distribute the product to the retail shop keepers and the tea stall owners. And the tea stall
owners will deliver our brand SHOTEZ tea to the consumers. As we will sell our product in
as many shops and tea stalls as possible, the consumer can have our brand whenever they feel
the need.
Intensive distribution:
We will follow intensive distribution to deliver our product to consumers. We want to reach
as many outlets as possible so that rural consumers can get our product in everywhere. Thats
why we will build good relationship with our intermediaries so that they store our product in
large quantity. As our product tea is durable, and it is everyday usage product we follow the
intensive distribution strategy. Even in rural area there are a number of people who drinks tea
every day, at least once. And the brand itself is with a lower profit margin.
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IMC is the most effective and efficient promotional tools and media to communicate with the
target consumers only by delivering clear, consistent and compelling message.
Target Audience: signifies people who will hear, see or expose to our message. Generally,
our target customers are our target audience.
Communication Objective: Since we are new in the market, our target audience are not
aware of us and dont know much about our brands attributes and benefits. So our
Communication objective is to build brand knowledge in our target audience through brand
awareness and brand image and to provide information to the target audience about the
attributes and benefits of our brand.
Message strategy: answer the questions what do we want to communicate to our target
audience.
Message strategy can be of three types:
Cognitive message strategy
Affective message strategy
Conative message strategy
We are going to utilize cognitive message strategy.
Cognitive message strategy: The message that we are communicating to our target audience
will explain the functional benefits and attributes that SHOTEZ will provide the benefits of
refreshment for the longer period of time. In other words, message posses the rational
arguments. The goal of a cognitive message strategy approach is to design an ad that will
have an impact on a persons knowledge structures. Our message contains the information
that SHOTEZ is a TEA brand that provides refreshment for longer period of time through its
good quality but at a lower price than the competitors. Hence, you will remain active for a
longer period of time and keep working your task smoothly.
Message execution: Message Execution signifies how a marketer will explain the message.
Message can be executed through animation, slice of life, demonstration, testimonial
evidence, fantasy and information. We will execute our message through slice of life
commercial and information commercial whereby we will provide as much information as
possible since we are new in the market.
Slice of Life:
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In slice of life commercials, advertisers shows everyday scenario and what the problems that
consumers are currently facing and then how our brand can actually solve these problems.
Slice of life commercials have four phases, these are:
Encounter
Problem
Interaction
Solution
Encounter phase shows an everyday scenario that the target audience face. Problem phase
shows how consumers are facing problems. In interaction phase the brand is introduced and
in solution phase it is shown that how the brand solve the problem.
A teacher usually takes tea from a nearby tea-stall before going to his class (Encounter
Phase). In addition, after taking two classes he takes another cup of tea for refreshment as he
has to take two more classes (Problem phase)
But, on that very day after taking tea for the first time he didnt come to take another cup of
tea. (Solution Phase) On the way back home the teacher went to the tea stall and asked the
shopkeeper about the tea that he (SK) used. The shopkeeper replied that He used SHOTEZ
CHA (Interaction). He also said that SHOTEZ CHA gives refreshment for a longer period
of time. Then the teacher realized why he didnt have to take tea for the second time and took
a 200g SHOTEZ CHA for his family.
Information
Since we have targeted SEC D & E, we will use informative message execution strategy for
RDC, print advertisement and in shop posters whereby we will present the information in a
straight forward manner so that they can easily encode or understand our message.
Message Source: We have chosen Mr. Jahid Hassan as an endorser for our products
SHOTEZ CHA. He is very popular and possesses likeability in the rural areas. According to
our customer analysis, in rural areas most people prefer to take advice from and trust a
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teacher. Therefore, we have decided to give him a Teachers role thus well ensure
trustworthiness.
C ine m a
H a ll
E x p o se r
In S h o p
Poste r
Pub lic
Relatio n s
We are utilizing both above the line (ATL) and below the line (BTL) communication. We
have planned to make TVC which will be BTV focus because SEC D & E are our target
audience and majority of them lives in rural area and watch BTV most we telecast mostly
during bangle movie time and when cricket match is going on. We also telecast our TVC in
cinema hall during bangle movie. We will also make RDC which will be broadcasted in
Bangladesh Betar because majority of our target audience listen to Radio during loadsh and
to Bangla movie songs which are broadcasted in Bangladesh Betar.
We will also utilize sales promotion whereby we will provide some incentives to generate
immediate sales. During summer in between April to July, people are less likely to have tea
so well provide them an incentive to buy our brand say for 12:2 whereby well provide 2
extra packs of our 20gm tea pack if they buy 12 piece of 20gm packet at a time or during
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EID, Puja We allow our customers say for a tea stall owner to buy at 6:2whereby if they 6
pack of 400gm our brand then we will provide two pieces of 100gm pack free.
Promotional Mix: are comprises of five promotional tools and we are going to utilize:
Advertising
Public relations
Sales Promotion
ATL strategies will be implemented through traditional mass media mostly advertising:
Advertising: We will use this form of non-personal communication whereby one
message is not designed for one audience rather for many audience hence we will
communicate message to large population. For our IMC, we will make use of TVC
that will be aired on BTV. Furthermore, we will broadcast our RDC that we have
made through Bangladesh Betar. At the same time, we will disseminate print ads that
would be posted on shops, market place (Hat-Bazar) and cinema halls since these are
areas frequently visited by the SEC D and E people.
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