Tea industry analysis

A PROJECT OF

STRATEGIC MARKETING MANAGEMENT

Black tea Industry

Analysis

Name: Saba Latif ID #: 063832-048

Name: Naima Khan ID #: 053632-075
Name: Sara Syed ID #: 053632-017
Date of Submission: 02/11/06

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 Ä C K Ň Ó W L Ē Ð Ğ Ė M Ĕ N Ť

ÄCKŇÓWLĒÐĞĖMĔNŤ

First and foremost, we express our gratitude to Almighty Allah, the sources of knowledge and
wisdom endowed to mankind, We have revealed unto you in order that
you might lead mankind out of darkness into light by their
Lord's Leave to the Path of the All-Mighty, the Owner of all
Praise.
We extend gratitude to our resource person, Honorable Mr.Mobin-ul-Haque who provoked us to
research on this particular industry, his valuable suggestions, constructive criticism and helpful
discussions broadened our vision and helped us conduct this research.

Here we also express are gratitude to the brand activation manager of Unilever Mr. Abid R. Jaffri
with Tapal Tea Private Limited Corporate manager Mr. Waheed Sarwar for there deep guidance
on the product.
And specially would like to thank our dear parents, who are a constant source of inspiration for
us.

Saba Latif
Naima Khan
Sara Syed

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EXECUTIVE SUMMARY

Tea discovered around 5,000 years ago, tea is generally considered the oldest
prepared beverage. Whatever its color (black, green, yellow or white, depending on
how it has been processed), tea can be produced from three main varieties: camellia
sinensiss, camellia sinensis assamic and camellia seinensis Cambodians. The main
global producing countries are India (accounting for about 26 percent of world
production); China (26 percent); Sri Lanka (9 percent); Kenya (9 percent); Indonesia
(5 percent) and Turkey (4 percent) Black tea dominates world tea production,
accounting for more than 70 percent of the global total in 2004. Green tea production has
continued to increase its share of the world total, largely due to China’s heavy focus on
green tea. Some 76 percent of China’s production is green tea.

Tea is a product widely & extensively used its trend pattrens in different parts of world
are

Pakistan relies on imports to meet all its consumption needs. In 2003 the dominant
supplier was Kenya, which supplied 66 percent of total imports. Pakistan’s apparent
consumption in 2003 of 109 000 tonnes placed it seventh in the world. Annual
consumption has varied considerably year on year as shown in Table 6, ranging from a
low of 85 400 tonnes in 1997 to a high of 119 700 tonnes in 1999. Average consumption
over the 10 years 1994-2003 was 108 000 tonnes. Consumption per capita has been
declining and at 0.71 kg in 2003 is below that of the late 1990s but still above that in
many other important consuming countries.

Needs it satisfy are Alertness, Keeping hot, Keep awaken, For elimination of depression
for entertaining guests etc.

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 Tea industry
History:
Tea discovered around 5,000 years ago, tea is generally considered the oldest prepared
beverage. Whatever its color (black, green, yellow or white, depending on how it has been
processed), tea can be produced from three main varieties: camellia sinensiss, camellia
sinensis assamic and camellia seinensis Cambodians. When the tea tree grows under
natural conditions, it is evergreen and can reach 10 to 15 meters, but when it is cultivated
in gardens (the name given to tea plantation worldwide), its height is artificially limited to
one meter in order to facilitate the pickers. Tea trees are grown mainly in tropical and
subtropical regions with humidity of 70 to 90 per cent. Rainfalls must be abundant and
regularly distributed throughout the year, with a yearly average of 1,500 to 2,500
millimeters.

World tea situation and production:

. World tea production reached 3.2 million tonnes in 2004, up from 2.6 million tonnes a decade
earlier. This represents an annual average growth rate of 2.2 percent. Most of the growth was due
to increased productivity rather than an expansion in area, as producers sought to reduce
marginal costs in order to adapt to depressed prices.

The main global producing countries are India (accounting for about 26 percent of world
production); China (26 percent); Sri Lanka (9 percent); Kenya (9 percent); Indonesia (5
percent) and Turkey (4 percent) Black tea dominates world tea production, accounting for more
than 70 percent of the global total in 2004. Green tea production has continued to increase its
share of the world total, largely due to China’s heavy focus on green tea. Some 76 percent of
China’s production is green tea.

Table 1 – Tea Production, imports and exports: Selected countries 2003

2003 Production Imports Exports

’000 Mt ’000 Mt ’000 Mt
World 3,146 1,554 1,399

India 860 22 176

Sri Lanka 305 305 291
USA 0 94 7
China 791 34 263
Kenya 294 0 269
Russian Fed. 3 169 0
UK 0 157 37
Egypt 0 79 2
Iran 50 33 5

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 Pakistan 0 109 0
Turkey 155 5 7

Imports are diverse with both developing and developed countries represented. The largest
importers, in order of volume imported, are the Russian Federation (11 percent of the world
total), UK (10 percent), Pakistan (7 percent), the USA (6 percent) and Egypt (5 percent).
Together these five countries account for nearly half of total world imports, which totaled 1.6
million tonnes in 2003.

By contrast, exports, as with production, are dominated by developing countries which account
for 90 percent of the world total, with the major exporters in 2003 being Sri Lanka (21 percent of
the world total), Kenya (19 percent), China (19 percent) and India (12 percent). Together these
four countries accounted for 72 percent of the world exports of 1.4 million tonnes in 2003.

As well as being significant exporters, India and China are also the two largest tea consuming
countries, accounting for 21 percent and 17 percent, respectively, of the global total (Chart 2) in

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2003. These were followed by the Russian Federation and Turkey each accounting for 5 percent,
United Kingdom and Japan with 4 percent, and Pakistan and the USA with 3 percent.

Types of Tea

Black Tea

Black tea is a "true" tea (i.e. Camellia sinensis) made from leaves more heavily oxidized than
the white, green, and oolong varieties. Black tea is generally stronger in flavor and contains more
caffeine than the more lightly oxidized teas.

In Chinese and culturally related languages, black tea is known as red tea, perhaps a more
accurate description of the color of the liquid. However, in the western world, "red tea" more
commonly refers to South African rooibos tea.

Green Tea

Green tea has been around for more than 4000 years. Chinese folklore attributes the discovery of
green tea as a drink to a Chinese leader from that era named Sheng Nong. It is said leaves of the
tea tree fell into a pot that he used to boil his water. After tasting the sweet taste of the tea he
proclaimed it was a gift from heaven and added green tea to his list of medicinal herbs.

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Green tea is made from the leaves of the ‘Camellia Sinensis’ plant. The mature leaves are picked
and kiln dried to maintain the correct humidity during the drying process. The dried leaves are
then further processed to remove stems and debris so that only the leaves remain. The dried
leaves are what we think of as green tea.

Green tea is still very popular in Asia and many people believe it has a wide range of health
benefits. There are studies that suggest green tea can inhibit the growth of certain types of cancer
cells and contains certain elements that slow the aging process.

Green and black tea come from the same plant and differs only in their method of production.
Green Tea is dried for a shorter time, and is heated sooner to prevent fermentation. Green tea
extract is one way of getting all the green tea benefits

Diet green tea and green tea extract:

Diet tea will help lose weight - if you are having a green tea drink or green tea extracts as a
part of a healthy diet or if you take another green tea product such as green tea powder, green
tea supplement, green tea patch, and green tea capsule - your weight loss program may be the
successful.

Tea dust

Dust tea is a low-quality grade of fine grained black tea. Traditionally these were treated as the
rejects of the manufacturing process in making high quality leaf tea like the Orange Pekoe. When
leaves break or get crushed during the manufacturing process they are variously labelled as
Broken Orange Pekoe, Fannings and dust based on the particle size. The smaller the particle, the
lower the quality.

This traditionally low quality tea has however experienced a huge demand in the developing
world in the last century as the practice of tea drinking became popular. Cheap tea stalls in India
and the South Asian sub-continent, and Africa prefer dust tea because it is cheap and also
produces a very strong brew - consequently more cups are obtained per measure of tea dust.

Pakistan tea industry:

Pakistan is a leading tea consumer in the world. In fact, the consumption of tea is so
widespread in Pakistan that it possesses 3rd position in the tea importing countries of the
world Tea is Pakistan's favorite hot beverage. Tea imports rose from approximately US$ 120
million in 1998-99 to US$210 million in 1999-00, showing an increase of over 65 per cent.
Its imports were US$173 million in 2002-03. In rupee term, imports increased from Rs348
million, in 1990-91, to as high as Rs1, 8754 million in 1998-99. However, the imports
decreased to some extent, and reached Rs1, 040 million in 2001-02. Pakistan needs a total
area of 250000 acres under tea cultivation to achieve self-made efforts have been made to

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cultivate tea in the mountainous areas; the projects could not achieve the desired results.
The already high tea consumption level may further increase in future due to urbanization and
increase in per capita income. The per capita monthly consumption of tea (black & green) is
56.29 grams. Tea imports rose from approximately US$ 120 million in 1998-99 to US$210
million in 1999-00, showing an increase of over 65 per cent. Its imports were US$173 million in
2002-03. In rupee term, imports increased from Rs348 million, in 1990-91, to as high as Rs1,
8754 million in 1998-99. However, the imports decreased to some extent, and reached Rs1, 040
million in 2001-02.

Pakistan relies on imports to meet all its consumption needs. In 2003 the dominant supplier was
Kenya, which supplied 66 percent of total imports. Pakistan’s apparent consumption in 2003 of
109 000 tonnes placed it seventh in the world. Annual consumption has varied considerably year
on year as shown in Table 6, ranging from a low of 85 400 tonnes in 1997 to a high of 119 700
tonnes in 1999. Average consumption over the 10 years 1994-2003 was 108 000 tonnes.
Consumption per capita has been declining and at 0.71 kg in 2003 is below that of the late 1990s
but still above that in many other important consuming countries (Table 8).

Table 7 – Tea imports, exports and consumption in Pakistan: 1994-2003

Year Imports Exports Consumption

(‘000 tonnes) (‘000 tonnes) (‘000 tonnes)
1994 116.1 1.5 114.6
1995 116.6 7.6 109.0
1996 114.8 0.0 114.8
1997 85.4 0.0 85.4
1998 111.6 0.0 111.5
1999 119.7 0.0 119.7
2000 111.4 0.0 111.4
2001 106.8 0.0 106.8
2002 98.0 0.0 98.0
2003 109.0 0.0 109.0

Table 8 – Tea consumption in Pakistan: 1998-2003

Total Total Per capita

population consumption consumption
(‘000) (tonnes) (kg per cap)

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 1998 135,381 111,500 0.82
1999 139,018 119,700 0.86
2000 142,654 111,400 0.78
2001 146,277 106,800 0.73
2002 149,911 98,000 0.65
2003 153,578 109,000 0.71
Av 1998-2003 0.76

. Pakistan is a developing country market with a per capita GDP of US$ 2 100 in 2004. Growth
of its economy has picked up in recent years and was estimated at 5.5 percent in 2004 with a
relatively low inflation rate of 2.9 percent. Although it is an extremely price sensitive market
dominated by bulk CTC teas, there is a small market segment for high quality teas. In 2003, the
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population of Pakistan was estimated to be 154 million, 66 percent of whom lived in rural areas,
where tea consumption was highest. Tea is the most popular and cheapest beverage in Pakistan,
but is increasingly facing competition from other beverages.

Companies in Pakistan:

Company Description

Uni Lever Brothers (Pakistan) Limited Formerly known as Lever Brothers (Pakistan) Limited.
The Group's principal activities are to manufacture and sell spreads and cooking products, ice
cream, beverages and home and personal care products. The brands of the Group include Brooke
Bond, Lipton, Lux, Rexona and Lifebuoy, Sunsilk, Surf, Vim, Dalda, Blue Band and Planta. The
operations of the Group are carried out in Pakistan. Beverages accounted for 40% of 2002
revenues; Home and personal care, 35% and Spreads and cooking products; 19% and Ice cream,
6%.

Unilever at a glance

Our mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene and
personal care with brands that help people feel good, look good, and get more out of life.

Key facts

• in 2005 our worldwide turnover was €40 billion

• we employ 206,000 people in around 100 countries worldwide

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 • every day, 150 million people choose our brands to feed their families and to
clean themselves and their homes
• over half of our sales are generated by our 12 €1bn brands: Knorr, Flora/Becel,
Hellmann's, Lipton, Omo, Surf, Lux, Dove, Iglo/Birds Eye/Findus, Blue Band/Rama,
Sunsilk and our Heart ice cream brand
• we are the global market-leader in all the Food categories in which we operate: Savoury
& Dressings, Spreads, Weight Management, Tea and Ice Cream
• we are also global market-leader in Skin and Deodorants, and have very strong positions
in other Home and Personal Care categories
• by 2005, we invested around €1 billion in research and development, for example at
the Unilever Food and Health Research Institute, which has a worldwide reputation for
scientific excellence
• in 2005 we spent over €79 million on a wide range of community projects
• we have 337 manufacturing sites across six continents, all of which strive for
improved performance on safety, efficiency, quality and environmental impacts, working
to global Unilever standards and management systems
• we invested €5 billion in advertising and promotions in 2005

Lipton yellow label:

Lipton is one of the world's great refreshment brands, making a big splash in the global
beverages market with tea-based drinks including leaf tea, infusions, ready-to-drink tea and other
healthy, refreshing alternatives to soft drinks. Lipton continues to lead as the global tea beverage
market, making a big splash with a variety of tea-based drinks. Lipton is growing fastest in
ready-to-drink teas Lipton ready-to-drink teas in Asia which can be served hot or cold. Other
recent flavour innovations cater to changing and adventurous tastes, Leaf tea remains a favourite
in many markets and Lipton is making it tastier and easier to make with innovations.

While tea is a naturally rich source of antioxidants, it is not a substitute for

fruits or vegetables which provide a wide range of antioxidants and essential
vitamins and minerals.

Key success factors of Lipton

• Tea is the world's favourite beverage, after water.
• Independent scientists also place leaf tea second only to water as the most ideal beverage
in the world.
• All leaf teas are naturally zero calories and so can help with your weight management
programme.
• Lipton tea provides you with flavonoid antioxidants. Antioxidants are thought to help
keep our body healthy by preventing every day wear and tear by free radicals.

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 • Studies observing large populations and there eating and lifestyle habits over a long
period of time show that regular tea drinking may help maintain heart health. A number
of studies showed that people consuming tea (without milk and sugar) on a regular basis
as part healthy lifestyle tend to maintain better heart health better than those who do not
drink tea.
• Lipton is the world's best-known and best-selling brand of tea, with sales of nearly €3
billion today. Lipton is the global market leader in both leaf and ready-to-drink tea, with
a global market share nearly three times larger than its nearest rival.
• Available in over 110 countries, Lipton is particularly popular in Europe, North America
and the Middle East and parts of Asia.
• Tea revitalises your mind and body.
• Tea – half the caffeine of a regular cup of coffee.
• All teas – black, green, oolong or white provide you with an antioxidant boost.
• Just one 200ml cup of Lipton Yellow Label will provide you with around 135mg of
antioxidants.

Lipton range

Lipton Yellow Label tea Lipton Green Tea

Lipton Iced Tea Lipton Ice Tea

Tapal tea:
Tapal started out as a family concern Tapal moved from success to success introducing tea
brands to suit every taste and pocket,. Tapal introduce professional management and unique
production ideas to the business Tapal introduced new tea concepts and developed a wide range
of tea blends catering specifically to the tastes of people throughout Pakistan. Today Tapal has
become the largest, 100% Pakistani owned Tea Company in the country. It has modern tea
blending and packaging factories, warehouses equipped with state-of-the-art equipment and a
team of highly dynamic professionals.

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Tapal Danedar

Gulbahar green tea

Tapal jasmine green tea

Tapal family mixture

Tapal special teabags

Chenak dust Highly

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Mezban premier dust

Tapal special round teabags

Tapal safari chai

Tapal tezdum

Tetley(Tata tea) :
Set up in 1964 as a joint venture with UK-based James Finlay and Company to develop
valued-added tea, the Tata Tea Group of Companies, which includes Tata Tea and the UK-based
Tetley Group, today represent the world's second largest global branded tea operation with
product and brand presence in 40 countries. Among India's first multinational companies, the
operations of Tata Tea and its subsidiaries focus on branded product offerings in tea but with a

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significant presence in plantation activity in India and Sri Lanka. Tata Tea and the Tetley Group
have full-fledged research and development centers that focus on the branded business. Tata Tea
has a research centre at Teok (Assam) and a product development centre at Bangalore focused on
the entire gamut of tea operations

The Tetley Group

Headquartered in Great Britain, is a leading international tea company selling over 60 Tetley
branded products to over 40 countries world-wide. Tetley is the second largest tea bag brand in
the world; it is the number one tea bag brand in Great Britain and Canada and has significant
market shares in the United States, Australia, Poland and France. Beyond these markets Tetley is
steadily growing its presence in the rest of Europe, particularly the former Eastern block
countries and throughout the Caribbean and lesser developed markets such as Bangladesh,
Pakistan and Russia where Tetley was launched last year. Tetley has a customized portfolio of
offerings for each country, ranging from black, green, fruit and herbal teas, iced ready-to-drink
teas and an extensive range of exotic specialty tea. The Tetley brand is accorded "Super Brand"
recognition in Great Britain.

Tetley own one manufacturing facility at Eaglescliffe in the north of England. Established since
1969, it currently occupies 220,000 square feet and is believed to be the largest tea bag factory in
the world. Its quality management systems are accredited to the ISO 9002 standard and are also
in the process of receiving the ISO 14001 certification.

Statistics of Pakistan &market situtaion:

The market situation that Worldwide tea production in 2001 was over 3 million tons
(Table 1, data in metric tons). The greatest production was from China and India, which
generated about half of the total world production. Indonesia, Sri Lanka, and Kenya together
account for another quarter of the total production. In 2000, India was the leading black tea
producer (815,000 tons, 38% of total black tea production), while China produced the most green
tea (500,000 tons, 73% of total green tea production) (FAO 2001). Exports totaled 1.4 million
tons in 2001, with the top four exporting nations, Sri Lanka, Kenya, China, and India, accounting
for (respectively) 21, 18, 18, and 13 percent of the exports.

STATISTIC
Location: Southern Asia, bordering the Arabian Sea, between India on the east and Iran and
Afghanistan on the west and China in the north.

Area: 796,095 Square Kilometers.

Area-comparative: slightly less than twice the size of California.

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Climate: mostly hot, dry desert; temperate in northwest; arctic in north.

Terrain: flat Indus plain in east; mountains in north and northwest; Balochistan plateau in
west.

Natural Resources: land, extensive natural gas reserves, limited petroleum, iron ore,
copper, salt, limestone, marble, chromites and precious stones.

Natural Hazards: frequent earthquakes, occasionally severe especially in north and west;
flooding along the Indus after heavy rains (July and August)

Population: 130,579,000 Male: 67,840,000 Female: 62,739,000 Urban: 42,458,000 Rural:

88,121,000

Population Growth: 2.11% (2001 est.)

Birth Rate: 31.21 births/1,000 population (2001 est.)

Death Rate: 9.26 deaths/1,000 population (2001 est.)

Ethnic Groups: Punjabi, Sindhi, Pashtun, Baloch, Muhajir

Religions: Muslim 97.96 (Sunni 77%, Shi?a 20%), Christian, Hindu, and other 3%.

Languages: Punjabi 48%, Sindhi 12%, Siraiki (a Punjabi variant) 10%, Pashtu 8%, Urdu
(official) 8%, Balochi 3%, Hindko 2%, Brahui 1%, English, Burushaski, and other 8%.

Literacy Rates: Both Sexes: 45.0 % Male: 56.5 % Female: 32.6%

Country Name: Islamic Republic of Pakistan

Government Type: Federal Republic based on Parliamentary Democracy

Capital: Islamabad

Date of Independence: August 14, 1947

Suffrage: 18 years of age; universal; separate electorates and reserved parliamentary seats
for non-Muslims.

Chief of State: President General Pervez Musharraf

Flag Description: green with a vertical white band (symbolizing the role of religious
minorities) on the hoist side; a large white crescent and star are centered in the green field;
the crescent, star, and color green are traditional symbols of Islam.
GDP:3726 (Billion Rupees) Per capita 440 (US Dollars)

Exports: 2000-2001 539070 (Million Rupees) Imports: 627000 (Million Rupees)

Insurance Companies: 55

Joint Stock Companies: 40901

Cooperative Societies: 57935

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Labor Force: 40 million

Labor Force by Occupation: agriculture 44%, industry 17%, services 39% (1999 est.)

Industries: textiles, food processing, beverages, construction materials, clothing, paper

products, shrimp

Agriculture products: cotton, wheat, rice, sugarcane, fruits, vegetables, milk, beef,
mutton, eggs Currency: Pakistani rupee

Exchange Rates: Pakistani rupees per US dollar - 59.152 (January 2001)

Tourist Arrivals: 543.40 (In ?000?)

Telephones - main lines in use: 2985.52 (In thousands) 1998-99

Telephones - mobile cellular: 158,000 (1998)

Post Offices: 12,854 1999-2000

Hospitals: 876

Dispensaries: 4635

Doctors: 91823

Dentists: 4175

Nurses: 37623

Television broadcast stations: 22 (1997)

Internet country code: .pk

Cities/Towns (i) Punjab------ 613

connected with (ii) Sindh---------138
Internet: (iii) NWFP---------240
(iv) Balochistan---91

Total-----------1082

Time Zone: 5 hours ahead of Greenwich Mean Time (+5 GMT). Daylight Saving Time is
observed. Internet Users: 1.2 millions
Railways: Track Kilometer 11515.00 Route Kilometer: 7791.00
Highways: total: 247,811 km
Ports and harbors: Karachi, Port Muhammad bin Qasim Airports: 22

©Copyright 2002 - 2003. All rights reserved. The Federation of Pakistan Chambers of
Commerce & Industry
Site by:: EnterTech Solutions

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PEST ANALYSIS

POLITICAL

Consumer Packaging and Labeling Act

The Consumer Packaging and Labeling Act, requires that prepackaged foods either imported or
made in within the country, must not bear any false or misleading information regarding its
origin, quality, performance, net weight or quantity.

Food and Drug Act

Tea manufacturers maintain that one of the challenges their industry faces involves the labeling
of antioxidants.

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The Food and Drug Act sets out conditions regarding health and quality requirements that would
apply to tea and coffee manufacturers just as they would to other food manufacturers so that
consumers will have confidence in the safety of the products they purchase.

Firms have not been allowed to make health claims on food labels unless those foods are classed
and approved as drugs. At the time this profile was being prepared Health was consulting on a
list of health claims that might be permitted on labels of specific foods. If a final decision is
made to permit health claims similar to those proposed by tea manufacturers and others, the Food
and Drug Act Regulations would have to be amended.

Food and Drug Administration (FDA) has regulatory authority to assess the accuracy of claims
made by manufacturers about the health benefits of their products. Currently the FDA does not
provide detailed information about healthful patterns concerning beverage consumption. If a tea
producer claims that a tea product prevents or cures a disease, then the FDA would consider the
tea a drug and regulate it as such. This would mean that the tea would need FDA approval as safe
and effective for its intended use.

ECONOMICAL

Tea prices are highly volatile. However, with the closing of the London Tea Exchange, it has
become increasingly difficult to hedge price risks. Currently around 85 per cent of domestic
production is sold through regional auctions; the balance is being supplied through forward
contracts. In 2002-03, a packet of 200 grams was sold for Rs340. The price per unit in
international market, however, has not increased as compared to an increase in local
market.

Here are some statistical facts about the Tea Industry:

 The total turnover of the tea industry is around Rs. 10,000 crores.
 Since independence tea production has grown over 250%, while land area has just grown by
40%.
 There has been a considerable increase in export too in the past few years. Total net foreign
exchange earned per annum is around Rs. 1847 crores.
 The labor intensive tea industry directly employs over 1.1 million workers and generates income
for another 10 million people approximately. Women constitute 50% of the workforce.

Macro Indicators and Implications for the Trade Policy

Spread over an area of 796096 square kilometer, Pakistan is inhabited by 153.98 million people, the population
growing at the rate of 1.9 per cent p.a., a literacy rate of 53 percent, infant mortality rate of 77 per 1000 live births and
life expectancy of 63 years.1

1
Economic Survey of Pakistan 2005-06

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 Macro Indicators2

Trade to GDP Ratio

In the backdrop of more than 4% per annum growth in the world economy for the fifth consecutive year and wide-
ranging structural reforms, Pakistan witnessed
overall improvement in it exports. While its Fig. III.a . Tra de a s P e r c e nta ge of GDP
exports grew at an average rate of 16.45
percent per annum over the last four years, it 40
34
saw
doubling of exports during the last seven years. 35
29
31.6 In a
28 28.4
bid to improve exports and liberalize the 30 25.8
27.2

economy for increased participation in global 25

trade, it carried on reforms especially in the 20

areas of trade and tariffs during the past six 15

years or so. A manifestation of reform output 10

can
also be seen in the Fig. III.a. which shows 5

0
changes in trade-to-GDP ratio which has 1999- 00 2000- 01 2001- 02 2002- 03 2003- 04 2004- 05 2005- 06 ( E)
increased from around 26 percent in 1999-2000 to
estimated 34 percent in 2005-06. Trade as P erc entage of GDP

Real GDP Growth and Sectoral Contribution

Real GDP grew strongly at 6.6 percent in 2005- 06

as against the revised estimates of 8.6 percent Fig . III.b. Re a l GD P Grow th last
year and 7.0 percent growth target for the year. 10
When viewed in the backdrop of rising and 9
7 .5
8 6 .6
volatile energy prices and the extensive 7
6 .1
8 .6
4 .9
damage caused by the earthquake of October 6 4 4 .7 8,
2005 Pakistan’s growth performance for the 5 3 .1 year
4 1.8
has been impressive. 3
2
Key drivers of this year’s growth have been 1
0
service sectors and industry. Large-scale 1980s 1990- I 1990 - II 2000- 01 2001- 02 2002- 03 2003- 04 2004- 0 5 2005- 06
manufacturing grew by 9.0 percent as against 15.6
percent of last year and 14.5 percent target for the year, exhibiting signs of moderation on
GD P Gr owt account
h R at e of higher capacity
utilization on the one hand and strong base
effect along with several other factors on 5 Fig. III.c. Sectoral Contribution to the GDP Growth the
other hand. The services sector 4.5

continued to perform strongly and grew 4 by 8.8

3.5
percent. Construction too continued its strong
Percentage

3
showing, partly helped by activity in 2.5
private
housing market, spending on physical 2
infrastructure, and reconstruction 1.5
activities in earthquake affected areas. 1

Consumer spending remained strong 0.5 with

real spending rising by 8.1 percent and 0
2001/02 2002/03 2003/04 2004/05 2005-06
investment spending maintaining its strong
momentum at 10.3 percent increase in Agriculture Industry Manufacturing Services real
investment. Agriculture and particularly its crop sector could not perform up to the expectation and registered a
contraction in growth. Livestock, a major component of agriculture, exhibited strong showing and pulled the overall
growth in agriculture to 2.5 percent as against the target of 4.2 percent. Livestock has been the only saving grace as
far as the performance of agriculture is concerned this year.

Figure III.b. shows the trend of GDP growth over time. During 1980s, GDP grew with an average rate of 6.1% while
during the first half of 1990s it moved ahead with 4.9% and coming down to 4% during the second half of the 1990s.
The year 2000-01 witnessed it falling down to 1.8% while from 2001-02 onwards it shows signs of picking up increase
and reaching 8.6% in the year 2004-05.

2
Ibid

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Figure III.c. illustrates the diachronic Fig. III. d. Per Capita Income US$
sectoral contribution in GDP growth from 847
2001-02 to 2005-06. Sector wise 742
669
analysis shows that the agriculture 582
sector started with 0.03% in 2001-02 and 526 501 503
reached 1.4% of contribution during the year
2004-05. It witnessed decline in
contribution during 2002-03 and 2005-06 with
0.55% contribution to GDP growth. The
Industrial sector reached its peak
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
contribution of 3.8% during 2003-04 and now
stands at 1.5% staring from 0.6% during
P er Capita Income US$
2001-02. During the last five years, the manufacturing sector reaching plateau of 2.2% during 2004-05 contributed
1.5 percent during 2005-06. However, the services sector seems to have contributed steadily from 2.5% share during
2001-02 and contributing 4.5% to GDP growth in 2005-06.

Per capital income, in current dollar terms, has grown at an average rate of 13.6 percent per annum during the last
three years rising from $ 669 in 2003-04 to $ 742 in 2004-05 and further to $ 847 in 2005-06. The main factor
responsible for the sharp rise in per
capita income include acceleration in Fig. III.e. Average Inflation (Headline Inflation) real
GDP growth, stable or even appreciation 12 in
exchange rate and four fold increase in the
10
inflows of workers’ remittances. Per 11.4
capita income in current dollar term rose 8 9.7 5.7 from
$ 742 last year to $ 847 in 2005-06, 6
depicting an increase of 13.6 percent.
4
Figure III.d shows the trend in per capita 5.5
income from 1999-00 to 2005-06. 2
0
Inflation measured by the Consumer 1990s 1990-97 1998-2000 2000-06 Price
Index was 9.7 percent during the 1990s. Average Inf lation It
rose to 11.4 percent during 1990-97 and then fell to 5.7 and 5.5 percent during 1998-2000 and 2000-06. Figure III.e.
shows this trend in inflation rates. However, during 2005-06 (July-April), it remained at 8 per cent.

Major Imports

Pakistan's imports are also highly concentrated in few items namely, machinery, petroleum & petroleum products,
chemicals, transport equipment, edible oil, iron & steel, fertilizer and tea. These eight categories of imports accounted
for 72.5 percent of total imports during 2005-06. Among these categories machinery, petroleum & petroleum products
and chemicals accounted for 53.4 percent of total imports. Concentration of imports remained, by and large,
unchanged over the last one decade with the exception of 2000-01. [See Table III.e.]

The import of textile machinery in anticipation of the quota phase-out of textile and clothing has boosted the share of
machinery over the past three years.

Table- III.e. : Pakistan’s Major Imports (Percentage share)

Commodities 99-00 00-01 01-02 02-03 03-04 04-05 05-06*

Machinery 13.9 19.3 17.1 18.5 17.8 22.5 18.0
Petroleum &
27.2 31.3 27.1 25.1 20.3 19.4 22.3
Products
Chemicals 17.5 20.0 15.9 15.1 16.1 15.5 13.4
Transport equip. 5.5 4.0 4.8 5.6 5.6 6.2 7.7
Edible oil 4.0 3.1 3.8 4.8 4.2 3.7 2.7
Iron & Steel 3.0 2.6 3.3 3.3 3.3 4.3 5.1

20
 Fertilizer 1.9 1.6 1.7 2.1 1.8 2.0 2.4
Tea 2.0 1.9 1.5 1.4 1.2 1.1 0.9
Sub-total 75.0 83.8 75.2 75.9 70.3 74.7 72.5
Others 25.0 16.2 24.8 24.1 29.7 25.3 27.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: MOC/FBS/Economic Survey of Pakistan
* Provisional

Major Source of Imports

USA, EU, Japan, Kuwait, Saudi Arabia and Malaysia remain important suppliers of imports into Pakistan. Pakistan’s
imports are highly concentrated in a few countries and over 40 percent continue to originate from just seven countries
namely, USA, Japan, Kuwait, Saudi Arabia, Germany, UK and Malaysia. It may be noted that Saudi Arabia is
emerging as major supplier to Pakistan followed by USA and Japan. [See Table III.f.]

Table-III.f. : Major Sources of Imports (percentage shares)

Country 99-00 00-01 01-02 02-03 03-04 04-05 05-06*

U.S.A. 6.3 5.3 6.7 6.0 8.5 7.6 5.8
Japan 6.3 5.3 5.0 6.6 6.0 7.0 5.6
Kuwait 12.0 8.9 7.1 6.6 6.4 4.6 6.2
Saudi Arabia 9.0 11.7 11.6 10.7 11.4 12.0 11.2
Germany 4.1 3.5 4.3 4.6 3.9 4.4 4.7
U.K. 3.4 3.2 3.4 2.9 2.8 2.6 2.8
Malaysia 4.3 3.9 4.4 4.6 3.9 2.6 3.0
Sub-total 45.4 41.8 42.5 42.0 42.9 40.8 39.4
Other countries 54.6 58.2 57.5 58.0 57.1 59.2 60.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: MOC * Provisional

SOCIAL

With respect to environmental issues, processing firms must meet all laws (e.g. the
Environmental Protection Act, the Environmental Assessment Act and each province's
legislation) and regulations. Under the Pest Control Products Act and regulations pursuant to this
Act, determines which pesticide sprays are approved for use and how they are to be used. Firms
check pesticide residue levels in their products to ensure that they are within regulation levels.
Consumer awareness of pesticide residues and their impacts on human health and the
environment is increasing.

One environmental issue that food processors in general have faced is waste remaining from
packaging. Reductions in container weight can result in reductions in fuel used by large trucks as
well as wear and tear on tractor trailers when hauling product to market, with the added
environmental benefits of reducing the amounts of wasted materials as well as emissions of
greenhouse gases and other air pollutants.

Waste reduction is important everywhere and particularly for large urban centers that are rapidly
using their landfill capacity and are experiencing difficulty and expense in finding and using
acceptable new landfill sites. Reduction of materials in packing cartons can potentially provide
both financial and environmental benefits.

21
Similarly, reductions in waste go hand-in-hand with cost savings as food processors and other
manufacturers make increasing use of plastic, rather than wooden, pallets. Although more
expensive to buy, plastic pallets, which can be made from recycled plastic, can be used many
more times than wooden pallets which tend to be mangled fairly quickly by fork lifts and then
sent to landfill.

Prior to plant construction, food processors must meet municipal zoning requirements. A
proposal to build a new state of the art plant or to substantially enlarge an existing facility could
result in hearings to assess environmental impacts before construction may proceed. Provinces
and municipalities have to be satisfied that systems will be put in place for waste water
treatment. Some processors take a pro-active approach by developing "best practices" with
respect to the environment, for example reducing their energy and water usage as well as their
creation of both solid and water waste.

Overall, there is a trend to internationalize regulations through general trade treaties, and the
industry will face the challenge of looking at regulations that could be harmonized, either
bilaterally with the U.S. or multilaterally through the World Trade Organization and Codex
Alimentarius.

TECHNOLOGICAL

Tea plucked from the garden is sent to the factory for processing, which in most cases, is in or near the
tea garden. This processing, earlier, used to depend solely on the natural weather conditions, but to
become less dependent on the unpredictable weather conditions which affects productivity adversely,
modern technology has been introduced in the tea industry. This has made it possible to increase the
plantation area by minimizing space; also labor cost has come down and the entire process has become
much speedier.

The starting material in black tea processing is the young shoot, the terminal bud and the two adjacent
leaves plucked from the tea plant. The flush is processed in four distinct stages, which are withering,
rolling, fermentation and drying. Each stage involves characteristic changes in the physical and
biochemical composition of the leaves and the cumulative effect of these changes are ultimately reflected
in the quality of the finished product, namely the black tea. After the drying is over, the leaves are sorted,
that is, divided into different grades and made ready for the market.

Plantations:

Unlike other perennials, tea is unique because only its vegetative parts - the two leaves and the bud - are
commercially exploited. Tea is also maintained as a low bush in a continuous phase of vegetative growth.
Both these aspects call for manipulation of plant parts for optimal productivity and growth.

Plucking & Leaf Handling :

22
The plucking of the two leaves and a bud involves a number of systems - Janam plucking, fish-leaf
plucking , step-up plucking etc.. Shear plucking is done when there is a scarcity of pluckers during July to
September. Pluckers' productivity is found to be maximum in unpruned teas. The plucked leaves are
processed to produce the black tea.

Withering :
It is a procedure which brings about physical and chemical changes in the shoots to produce quality,
apart from conditioning the flush for rolling by reducing turgor, weight and volume. Previously the flush
used to be withered under the sun. Now this process is generally achieved either by thinly spreading the
flush on mats, or in thick layers in troughs for 8-18 hours depending on the condition of the leaves.

Rolling :
The object of rolling is to macerate the leaf so that the enzymes and their substrates get intimately mixed
up. This is achieved mechanically either by the use of an orthodox roller, the rotor vane, or by CTC
(crushing, tearing and curling) machines. Rolling ruptures the cell wall thereby enabling the production of
enzymes.

Fermentation :
It is the process of oxidation of leaves. The mechanical aspect involves spreading out of the leaves
macerated by rolling a layer 5-8 cms thick, for 45 minutes to 3 hours, depending on the quality of the
leaves. Fermenting machines make the process continuous, that is, every unit of macerated leaf has to
be spread out for individual treatment.

Drying :

It reduces the moisture content of rolled and fermented leaves from 45-50% level to a 3% level in dried
black tea. It also allows development of black tea aroma. Drying is physically achieved by blowing hot air
through fermented leaves as they are conveyed in chains. The drying process lasts for about 20 minutes.

Sorting :

Sorting may be defined as a procedure in which particles of bulk tea are separated into grades of different
sizes. This sizing can be done either manually or by using different sizing equipments. Sorting meshes of
various sizes are used to grade the tea.

Market Analysis

Factors/Trend Business Company Response

Implication

Political & Legal FDA) has Redesign of old New technology is

regulatory packages with new always welcomed
authority to improvement and by the company but
assess the better quality. it is always under
accuracy of the law.

23
 claims made by
manufacturers
about the health
benefits of their
products.
The Consumer
Packaging and
Labeling Act,
requires that
prepackaged
foods either
imported or
made in within
the country,
must not bear
any false or
misleading
information
regarding its
origin, quality,
performance, net
weight or
quantity.
Economic Tea prices are The labor Around 85 per cent
highly volatile. The intensive tea of domestic
price per unit in industry directly production is sold
international employs over 1.1 through regional
market, however, million workers auctions; the
has not increased and generates balance is being
as compared to an income for supplied through
another 10 million
increase in local forward contracts.
people
market.
approximately.
Women constitute
50% of the
workforce.

Social & Cultural Pesticide sprays are Prior to plant Reductions in

approved for use construction, food container weight can
and how they are to processors must result in reductions
be used. meet municipal in fuel used by large
zoning trucks as well as
requirements. A wear and tear on
proposal to build a tractor trailers when
new state of the art hauling product to
plant or to market.
substantially enlarge
an existing facility

24
 could result in
hearings to assess
environmental
impacts before
construction may
proceed.
Technological Technology is Company is using New technology is
moving faster and new technology as always welcomed
faster to high for packaging and by the company.
performance. quality.

5 Forces Analysis of Tea Industry

Rivalry:
In tea industry the rivalry between firms is high because there is concentrated market and
the competitive advantage is high over every rival. To pursuing an advantage over their rivals the
several tea companies take some competitive moves like they change their prices twice in a
year .rivalry in tea industry also influenced by different degrees.
First of the entire Exit barrier in Pakistan tea industry is high because of the high investment
and the existing firms invest a huge amount of capital and this tea is a bidding product so the exit
barrier in this tea industry is high. Concentration ratio of tea industry in Pakistan is high
because there are only 5 major companies in Pakistan so the tea industry is concentrated. The tea

25
industry growth is low because it is high investment industry and the share of market is limited
among few firms in Pakistan. There are different types of tea product in Pakistan herbal tea
green tea and ice tea. Switching cost in tea industry is low because the customer has different
choices because of different brands of tea and also different substitute industries. Intermittent
overcapacity in tea industry is high because the tea is a bidding product so some times in firm’s
capacity are more than its production but other costs remain the same so the intermittent
overcapacity rate is high.

Threats of substitutes:
Every industry has some threats of substitute. In tea industry they also some threats of
substitute there substitutes are coffee, cold drinks, mineral water, juices, colas, open tea etc. but
the customer have nil switching cost and the trend of consumption of coffee in Pakistan
increasing day by day. The buyer inclination to substitute is increasing like coffee nestle
introduce instant coffee easy to make that’s why buyer switching towards coffee. If the price of
tea increases then customers go towards the substitute like if the government increases the sales
tax on tea then customer go towards tea or other substitute. If the substitute give extra value
added services then customer switch towards.

Barriers to entry:
In tea industry barriers to new entrant is high because it need high investment and high
concentration .In the tea industry Access to inputs is to low because of the limited resources and
the import of tea. Pakistan is the second largest country in tea consumption so most of the part of
our economy is spent on tea consumption if our government increase the sales tax and stop
providing subsidies to tea industry or if increase the income tax then it will become barrier to
entry so any negative change in government policies regarding tea industry create the barriers
for new entrant. In the tea industry there is large capital required in order to compete others so
this is also barrier to entry. Tea is a bidding product so the high bidder has the raw tea material.
Every brand have different identity and have some goodwill so to capture the customer entrant
have to invest heavy amount to overcome the customer loyalty like there is a case that is tapal
dander changed its packaging when they advertise it customer perceived that they transfer
the old material of tea into new cover or packet so they lose the trust of their customer and
they invested heavy amount to overcome that trust. So barriers in the tea industry is high and
in this industry the switching cost is low so it’s also cause barrier to new entry.

Supplier Bargaining Power:

The supplier power of tea industry is high because raw tea is sell on auction the higher
the bid get the raw tea. The concentration of suppliers is low because there are many suppliers
with market share like Sri lank, Japan, Kenya, China, Vietnam, Hawaii, etc. so, the power of
supplier is high .the volume of material of to supplier is very important if they have the high
volume then they get the highest bid but if the material is in good condition because the tea is a
perishable good. Every supplier has different input process. The switching cost of the industry is
low. the tea industry spent a big amount in purchasing a raw tea or tea leaf if there is 100%
expense then they spent 70% on raw tea purchasing out of there total purchases. Yes there is a
threat of forward integration from supplier if they stop forwarding then the industry will suffer

26
a lot. So the supplier power of bargaining is high and its effected tea industry a lot because the
supplier is the most important for the firms in tea industry.

Buyer Bargaining Power:

There is bargaining leverage to the buyer of tea industry because the numbers of buyer
is very big. So to overcome the loyalty of buyer they give bargaining leverage. The volume of
buyer of tea industry is really high in Pakistan. The information about buyer and information to
buyer is plays a very important role for tea industry which type of buyer are permanent user and
what are there expectation. Buyers are sensitive enough so they are price conscious. Yes there is
threat of backward integration because the buyers are powerful. If the industry providing
different product then buyer do not look for alternative. Buyer concentration ratio is low vs.
industry. There is huge availability of substitute.
Stronger forces for Tea industry:
The stronger forces for these industry are buyer bargaining power, supplier
bargaining power and barrier to entry because these forces have great impact on tea industry
so these are the stronger enough these forces have heavy requirement and these have low
switching cost.

Impact on growth and profitability:

Barriers to entry:
This force have great impact on growth because there are many barrier like if new entrant
doest not join this industry then industry cannot grow and its profitability will also be low. So
that’s why tea industry cannot grow but its profitability is good in Pakistan.

Threat of substitute:
There is always a threat of substitute there is low switching cost so the customer easily
switch towards substitute to the profit of the industry does no increase and the industry growth
will low and low profitability. there is many substitute of tea industry in Pakistan and its effect a
lot on tea industry but its vary from seasons to season, in winter the tea consumption increases
but in summer its low.

Supplier power:
In tea industry the major part of their cost spent on raw tea purchasing because the
supplier power is higher so if the revenue is low and cost is higher than the industry will fall
down, tea is abiding product so the tea industry suffering with high auction prices and no new
investments are coming in this industry. So the growth is limited and profitability is suffering
due to high powers.

27
Buyers’ power:
The volume of tea buyer is high in all over the world but the in Pakistan the ratio of tea
user is really high and there is low switching cost so the buyer can easily switch to substitute if
the buyers are loyal the it really helpful in growth and profitability and in Pakistan the buyers are
helping in profitability of tea industry.

Rivalry:
If the industry is concentrated and exit barriers are high then industry is less competitive
the industry growth is slow and profitability is lees.

5 Forces Analysis on Lipton yellow label

Rivalry:
The exit barriers for Lipton is very high because the Lipton is a international brand and it
invested a huge amount in tea industry and it develop a name in black tea industry in Pakistan so
the barriers for Lipton is high. The concentration is also high for this firm in tea industry in
Pakistan. They have different product and there is also differences in their every product of tea.
In Pakistan there is a separate brand identity for Lipton yellow label between rivalries.

Barriers to entry:
Due to high barriers the Lipton have the advantage of absolute cost and access to inputs
and access to distribution is easy and there is also the threat of low switching cost. It’s also
needed a huge capital investment by Lipton which creates barriers for new entrant, and also there
brand identification and fame also create barriers.

Threat of Substitute:
Lipton have also threat of substitute but and there is also a threat of change in technology
in their substitute like instant coffee by nestle also a threat for Lipton and over all tea industry.
the switching cost is zero for the customer the customer can easily switch to other brand like
wise the Tapal tea introduce Herbal tea in Pakistan so the diet conscious customer switch to
herbal tea. The Lipton has the threat of substitute.
Supplier power:
The supplier power is higher soothe Lipton spent huge amount on raw material the
switching cost of the firm in the industry is low and the importance of volume to buyer is very
important because Lipton is big buyer of tea material.

Buyers’ power:
The buyers volume is higher the most of the buyer of Lipton tea is offices and different
working sectors. Lipton has a unique brand identity among buyers, and the buyers also price
sensitive enough but the loyal and taste conscious buyer never switch to other brand if the
substitute is available in suitable price with incentives for buyer then buyer power is also higher
to switch the brand. Like many buyer switch to Tapal tea because of its Danedar quality taste and

28
color. tapal dander changed its packaging when they advertise it customer perceived that
they transfer the old material of tea into new cover or packet so they lose the trust of their
customer and they invested heavy amount to overcome that trust.

5 FORCES ANALYSIS OF TAPAL TEA

Rivalry:
There is high exit barrier and because of huge investment. The exit barriers for TAPAL is
very high because the TAPAL is a international brand and it invested a huge amount in tea
industry and it develop a name in black tea industry in Pakistan so the barriers for TAPAL is
high. The concentration is also high for this firm in tea industry in Pakistan. They have different
product and there is also differences in their every product of tea. In Pakistan there is a separate
brand identity for Tapal tea rivalries.
Barriers to entry:
Due to high barriers the TAPAL have the advantage of absolute cost and access to inputs
and access to distribution is easy and there is also the threat of low switching cost. It’s also
needed a huge capital investment by TAPAL which creates barriers for new entrant, and also
there brand identification and fame also create barriers.

Threat of Substitute:
TAPAL have also threat of substitute but and there is also a threat of change in
technology in their substitute like instant coffee by nestle also a threat for TAPAL and over all
tea industry. the switching cost is zero for the customer the customer can easily switch to other
brand like wise the LIPTON introduce DIET tea in Pakistan so the diet conscious customer
switch to diet tea. The TAPAL has the threat of substitute.
Supplier power:
The supplier power is higher so the TAPAL spent huge amount on raw material the
switching cost of the firm in the industry is low and the importance of volume to supplier is very
important because TAPAL is big buyer of tea material.

Buyers’ power:
The buyers volume is higher the most of the buyer of TAPAL DANEDAR tea is for
family. TAPAL has a unique brand identity among buyers, and the buyers also price sensitive
enough but the loyal and taste conscious buyer never switch to other brand if the substitute is
available in suitable price with incentives for buyer then buyer power is also higher to switch the
brand. Many buyer switches to Tapal tea because of its Danedar quality taste and color. Tapal
dander changed its packaging when they advertise it customer perceived that they transfer
the old material of tea into new cover or packet so they lose the trust of their customer and
they invested heavy amount to overcome that trust. In this case the buyer switch to other
substitute.

29
Substitute &Complement:
There is the existence of substitute with complements like Lipton offers tea whitener cup and
biscuits with their brand so the cup ,tea whitener and biscuits are their complements.

Differences between these two groups:

The major difference is that Lipton growth rate is very high and its profitability rate is
also high but in the tea industry overall growth rate is very low and profitability ratio is low. The
concentration in industry is high but in Lipton is low.
No this company should not change its strategic group because it is in growth and
profitability stage the company made its name among all so it should not change its strategic
group.

Strategic group maps:

High

Unilever

Tapal
P Brook Bond
Supreme
R Medium Vital
I
C
E Dust
Open Tetley
tea

LOW

Low Medium High

QUALITY
Strategic group map1

30
 BOTH Unilever
G Tetley Dust
Open tea
E
O
G
R
A
GOBAL
P
H
I
C Tapal
Supreme
A Vital
L LOCAL
L
Y
Low Medium High

VOLUME OF SALES
Strategic group map2

31
Porter analysis of Strategic group map:

Rivalry:
In tea industry the rivalry between firms is quite high as there are quite a many firms and articulates a cut throat
competition .There are not much exit barriers& industry concentration is showing a wide gap as though local tea
being not up to the mark in quality but do present justified price penetration in market .the major players also includes
Lipton & Tapal as both are forward with controlled market skimming strategies.
Threat of substitute:
Of course there are a high percentage of threat of substitute due to various other choices in beverage industry.
Switching cost is now not usually high as there are a lot of options to fall in. And due to buyer inclination and impulse
decision also exhibit it to make the product basis highly differenciated.
From the strategic map 1 it is so clear that low price intensely grab major market share but as well it depends on the
segment inclination & purpose.
Barriers to entry:
There are low barriers of entry in global phenomenon yet they are high if locally to think about it as tea is not
been produced locally and have to import. Trends in Trade
Fig. III.f. Pakistan's Share in World Exports (percent)
International trade in Pakistan has witnessed
growth in the last several years, although its 0.2
share in world exports trade during 2004 has
remained around 0.153 percent compared to 0.16 0.16
0.15
0.14
around 3.14 percent for China, 1.96 percent 0.15

for Singapore, 1.08 percent for Thailand, 1.46

Percent

percent for Malaysia, 0.77 percent for India 0.1

and 0.54 for Turkey. The share in world
imports for Pakistan was 0.17 percent
0.05
compared to China’s 4.48 percent, India, 0.86
percent and Turkey’s 0.75 percent.
0
1990 1995 2000 2004

Export Share %

32
Bargaining power of supplier:
Bargaining power of supplier is quite low as the industry is quite in its boom and there are many supplier countries
available out there which discriminate from each other due to quality strong ness-basically content level variation due
to various reasons.
Still there are quite a lot un served markets also been depicted by the strategic group map1.
Bargaining power of buyer:
The power seems to be intensely high as from the map there are many firms in the same business which are
accelerating due to low pricing strategy & strong taste.
Still people have high purchasing power and therefore there is intense demand for Lipton due to conformity its quality
standard even though with high price. This is also possible due to the product good will and its geographically dealing
strategies.

Impact of forces on cost and price structure:

Barriers to entry:
Cost:
The cost is the main reason for barriers and the market is concentrated so the cost
is high but the switching cost is low.

Price structure:
Sometime the government changes its policies and the profit of the company is
distributed among five companies because there is no new firm so the companies’ structure there
prices according to this situation.

Supplier power:
Cost:
As above explain that the supplier power is high the cost is also high in tea
industry because the tea is an import product so the supplier charges according to their
money value or according to their prices so this increases the cost.
Price structure:
When the cost high the firm tries to recover its cost so they structure the price to
keep in view the cost and high cost push towards high prices.

Threat of substitute:
Cost:
There is low switching cost but the change in technology increases the cost of
substitute. If the substitutes reduce the prices then the cost is higher for tea industry because
there is low switching cost.
Price structure:
The companies structure their prices by keeping in view of the prices of their
substitute. If the price if substitute id reduced they have to reduce the price also. And give some
incentives to the buyer to compete in the market.

Buyers’ power:

33
 Cost:
If the buyer power high and bargaining leverage is there then its increases the cost
and the high the cost higher the prices and price sensitive buyer switch to other brand.
Price structure:
The firms structure their prices keeping in view their buyers which type of
segment using their product and if there is need of incentives how, what, and when they give
incentives.
Rivalry:
Cost:
There is high exit barrier if the industry earning profit or not the cost is there it is
a high budget investment industry so you cannot easily take out your money or leave the
industry.

Price structure:
The rivalry companies structure their prices according to their competition it
increases the prices if they want high revenue and the quality is good ant they have the loyal
customers and high market share.

So these forces have some positive and negative impacts on cost and price structure.

Crop figures (in m.kgs) Aug 06 Aug 05 Jan/Aug 06 Jan/Aug 05

Sri Lanka 21.8 24.5 210.0 215.1

Kenya 23.21 21.79 181.19 209.8

Forthcoming auction quantities (pkgs.) Week 41 Week 42 Week 43

Mombassa 93.461 96,255 106,765

Blantyre 3,620 4,740 N/A

Colombo 6.2 m.kgs 5.6 m.kgs N/A

Jakarta 10,080 10,460 11,440

Kolkata 143,039 N/A N/A

Guwahati 156,094 N/A N/A

34
Potter’s 5 forces model of tea industry

Supplier’s power
India, Kenya, China, Sri
Lanka, Assam, Ceylon

Barriers to entry Threat of substitute

High investment Tea industry
Coffee, soft drinks,
Low switching cost Rivalry carbonated drinks,
Govt. policies Lipton, Tapal, mineral water and
Huge Capital Supreme, Tetley, other beverage
requires. Open tea items.

Buyer power
High volume buyer
Low switching cost
High range of
substitute

35
The economic situation of industry:
In south Asia tea consumption is very high, It is a profitable industry, because the Pakistan the
biggest buyer of tea.

Opportunity:
Lipton introduce its other brands like “ice tea” & “herbal tea & flavor tea” it is the oldest
brand in Pakistan so its quality is best people prefer Lipton and they use to of its taste. The
company can increase its market share in a growing market. New innovative products to meet the
customer requirements can be introduced. Fast growing economy and per capita income is an
opportunity. Expansion in consumer base of the country has opportunities to develop new
products and find new markets.

Threats:

Lipton is facing tough competition from tapal because it come up with Danedar quality and with
herbal tea in Pakistan and its market share increases day by day now there is another
international brand come into the Pakistan’s market name Tetley it also increasing its market
share day by day. The company has a threat of being a foreign company. Increasing competition
is a threat. Free Trade Agreements with the countries like Srilanka (SAFTA) that are heavy
exporters of tea pose a threat of their tea could be available in the market in cheaper prices.
Smuggling of tea also poses a threat. Innovative products by the competitors.

Rate of change of technology

The rate of change in technology in tea industry is very low but they are taking action on small
scale in changing the technology here are some steps taken to change the technology from tea
cultivation to production(from net ).

36
Monitoring in Tea Production
By Nigel Melican

Because tea factories have, for so many years, been producing tea that always finds a market,
monitoring for optimum efficiency and quality has not necessarily been built into the production process.
But things are changing, and as packing companies are now buying more tea directly from the producers,
entering into forward contracts, and specifying exactly the type of teas they want, it is becoming more
important for manufacturers to be able to meet those specifications. International regulations controlling
acceptable levels of pesticides and other residues, health and hygiene, among other things, also make
measuring and monitoring an essential part of factory operations. Every tea factory manager should ask
himself daily about his process conditions, “If you are not measuring them, how are you going to control
them?”

The secret to the successful running of a tea production unit is to assess anything that could possibly go
wrong, to isolate it, and then modify procedures to ensure that it will not go wrong in the future. If the risk
areas are monitored and all procedures are followed correctly, then the risks are eliminated. Built in alarm
systems that alert managers and workers when things threaten to malfunction will help to reduce errors.

MONITORING IN THE FIELDS

The two aspects of monitoring needed for the growing crop

are of the local climate and attacks by pests.

Tea yield and quality are very dependent on the weather, so

the first stage of monitoring is the regular collection of data
about climatic conditions. Every tea estate should have
efficient equipment to measure temperature, humidity and
rainfall, and should collect such information as part of the
efficient running of the estate. Monitoring methods can range from visual reading to collection of weather
records by satellite link. With modern technological methods of weather recording, and routine collection
of data, it is often possible to predict such factors as the onset of insect infestation and changes in crop
yield, which can be directly influenced by weather patterns. Methods such as plucking rounds, irrigation,
fertilizer rates and applications of relevant pesticides can then be adapted to suit the prevailing conditions
on a day-to-day basis.

The crop should be regularly monitored for attacks by pests. This is usually done through careful
observation by the naked eye, and information should be shared with neighboring estates in order to
avoid the rapid spread of infestations over a wider area.

MONITORING THE PLUCKING AND TRANSPORTING OF LEAF

As soon as the green leaf has been plucked, things can very easily start to go wrong unless temperature
is carefully monitored and controlled.

First of all, tea should be processed as soon as possible after plucking, so the fresh leaf must reach the
factory in as short a time as possible. Two hours is the recommended; three hours is the absolute limit.
During transportation the leaf must also be kept cool or it will start to ferment (oxidize), producing tea with
an unpleasant, stewy flavor. Simply throwing the sacks of tea into the back of a lorry in very hot conditions
will create these kinds of problems. A better method is used by some estates: they hang the bags of leaf
on Lorries with racks. This allows air to circulate freely around the sacks and helps to keep the leaf cool.
Some also use plastic stacking baskets to stop the leaves being crushed and becoming overheated.

37
It is much cheaper and more efficient to make sure that leaf is handled correctly than to introduce
expensive refrigerated Lorries. The leaf should be transported in sensible containers and the monitoring
of the temperature of the leaf inside the sacks or baskets is essential.

If leaf temperature goes above 43ºC, the cell walls begin to break down, release enzymes and the
catechins in the leaf begin to oxidize. What plantation workers often do not appreciate is the fact that
when leaf is picked in a field where the ambient temperature is 40ºC and is loaded into a sack where the
ambient temperature is also 40ºC, the temperature of the leaves nearest the outside of the sack will drop
down to 28º, 29º, or 30º, as water is evaporated from the leaf. But the water stops evaporating in the
middle of the sack where the leaf is packed more tightly and no air is circulating, and here the
temperature can rise to as high as 50ºC due to the heat of respiration.

To avoid such high temperatures, leaf should be packed loosely and air must be allowed to circulate
freely. Packing can be controlled by monitoring the weight of each container and the heat inside the
containers is easily monitored by inserting a thermometer probe into the sacks. Use of portable data
loggers ensures that factory management has a permanent record of green leaf transport conditions.

MONITORING DURING WITHERING

Withering is normally a 16-20 hour process carried out under ambient

conditions which can often fluctuate. It involves two processes. The
first is the biochemical process during which the starch in the leaf is
converted to sugar, and some of the proteins in the leaf turn to amino
acids. The withering process prepares the juices in the leaf for the
manufacture of tea. If leaf is taken directly from the field and
processed without withering, the resulting liquor will have a harsh,
grassy, and unpleasant flavor. This biochemical wither takes an
absolute minimum of 12 hours and cannot be speeded up without
losing quality-but it can be extended to 24 hours by cooling the leaf.
As yet, there is no on-line test to monitor the optimum biochemical wither, but tea scientists are working
on it.

The second part of the process is the physical wither during which water is removed from the leaf, in
order to reduce the moisture content from 80% to 68%. This part of the process can be accelerated by
blowing dry air through the leaf and by applying heat. To ensure best quality, there should at least be
some checking of the temperature of the air the leaf is receiving. An air temperature of a steady 25-30°C
is ideal, but if it goes above 35°C the leaf may become overheated and quality will fall off very rapidly. A
temperature of 40°C is definitely damaging. Alarm bells therefore need to sound-perhaps when air
temperatures reach 33°-35°C-warning staff to turn down the heat.

Measuring of how much moisture has been lost from the withering leaf is traditionally carried out by
examining and squeezing a handful of leaves. Checks are also run by weighing a bag of leaf into the
withering trough and then taking the leaf bag out at intervals and weighing it again to see how much
moisture has been evaporated during that time. The first of these monitoring methods depends on the
skill and experience of the individual worker. In a factory of 50 troughs, the second method is laborious.

With orthodox leaf, the target moisture content after withering is between 50% and 75% moisture,
depending on the type of manufacture. Assam’s are traditionally soft withered (65-75% moisture) and
Ceylon’s are hard withered (50-60% moisture). In CTC leaf, wither of between 68% and 70% is usual.
Variations in the moisture content of leaf after the withering process are, however, often greater than

38
variations in the moisture content of fresh leaf coming into the factory from the fields. This means that the
withering process often widens the standard deviation of moisture content, instead of reducing it, in the
withered leaf. This quite common problem can be expensive and complicated to solve. The best way to
tackle it is to install Near Infra Red (NIR) moisture measurement. NIR equipment shines a light on the leaf
and measures the amount of interference caused by water in the reflected light. Measurements are taken
10 times every second by a sensor head as the tea moves along on a conveyor belt. This is the only
known way of accurately measuring moisture content instantaneously and on-line. Its use is standard in
other related industries (tobacco, coffee, flour milling and food products).

NIR is expensive but can also reduce production costs at the later drying stage. Dryers work best when
run under constant conditions. If the tea to be dried enters the dryer at a fixed rate with fixed moisture
content, the dryer will work more efficiently. As the moisture content varies, the dryer conditions also have
to be varied to suit the tea, or factory managers have to accept that some tea will not be dried enough
and other tea will be dried too much. The former compromise increases fuel costs and both compromises
reduce tea quality. NIR moisture monitoring allows dryer feed rate to be varied automatically to ensure a
constant load of water into the dryer. One liter of oil is required for every two kilograms of tea dried, and
running the dryer at a constant setting optimizes evaporation, saves fuel, reduces costs and improves
quality. These kinds of savings and improvements are particularly relevant to larger factories where up to
four or five million kilos of tea are being dried annually.

MONITORING DURING CUTTING

Leaf maceration by cutting is swift and little monitoring is needed

during the cutting process, but checks on increases in temperature in
the Rotor vane and the CTC machines will give the factory manager
an indication as to how efficiently his machinery is working. If the
temperature rises too high, it is an indication that the nip is too tight. If
there is no steady increase in temperature from one machine to the
next, then one nip is insufficiently closed. In the ideal factory, this
background information should be consistently monitored and logged. The actual temperature does not
need to be checked all the time, but staffs do need to be quickly aware if it is too low or too high.

The size of CTC cut or degree of maceration will usually be checked by eye, but monitoring the efficient
use of machinery will help to ensure that costs are kept down and machinery is well maintained. The
electric current drawn, the sounds the machine makes while operating, the vibrations, and the smells of
the process, all add to the overall picture of how the factory is running and operators should be constantly
aware of them.

MONITORING DURING OXIDATION

More can go wrong during the natural oxidation (fermentation) stage

of processing than in any other part of tea manufacture. This is
because oxidation involves a very sensitive, exothermic reaction that
produces heat and which can easily get out of hand and goes too fast.
Monitoring the time and temperature of fermentation is therefore
crucial.

The modern method of temperature control is to blow cool moist air

through the dhool (macerated or rolled withered leaf). Temperature,
humidity and airflow all therefore need to be monitored.

39
The duration of oxidation at a given temperature determines the rate of change of green catechins to
theaf lavins and the amounts of thief lavins that are converted to thearubigins. Thus time determines the
final briskness, strength, thickness and the flavor of the liquor. So, timing also needs to be monitored.

Given that during oxidation, cool air is blown from bottom to top, the dhool at the bottom of the layer is
cooler than that at the top. Ideally, the dhool should be forked over at regular intervals to prevent the
lower layer remaining under-fermented and the upper layer from over-fermenting. This can happen even
more easily if the layer of dhool is too thick. It is possible to install continuous monitoring to check the
temperature at different depths to see what the differential is. Too great a difference indicates either that
the air is not moving fast enough through the dhool or that the air temperature is too high. The best
thermometers to use for this 3-level temperature checking are stainless steel probes or electronic
thermometers that are inserted into the dhool at appropriate depths on the oxidation bed.

On a continuous fermenter, which generally turns the tea throughout the process, it is important to
monitor the inlet air temperature, the inlet air humidity, the temperature of the surrounding air, and the
temperature of the dhool.

The length of time that the fermenter is set up for varies according to conditions and often needs resetting
to suit the optimum oxidation time for the leaf on any particular day or hour. This varies according to the
raw material, the time wither and the oxidation temperature. The only way that the factory manager can
know the optimum fermentation time is to run his process line with the fermenter set at a particular time
and save a sample of black tea from the dryer, then to repeat that process three more times at a range of
fermentation times, until the optimum time of oxidation has been decided by liquoring and tasting the four
samples. The problem with this method is that it takes four hours to run the test and, during that time, the
temperature, humidity and general conditions in the oxidation room can change, often negating the
purpose of the test. And yet, a factory can be losing between 5 and 7 US ¢/kg of tea by being 10 minutes
wrong with the fermented setting.

To save time and to accurately find out the optimum setting for the fermented, we recommend the use of
the Tea craft Op-Tea-Mizer. This unique piece of QC equipment allows the factory to take samples from
four timed points on the fomenter and to dry the tea under similar conditions in 20 minutes instead of the
normal four hours mentioned above. The fermented can then are set to its optimum time and ensure that
the factory produces the best tea possible from any given line of dhool.

MONITORING DURING DRYING

During drying, both temperature and airflow need to be monitored.

Most tea driers have some kind of system for indicating temperatures,
but they are often inaccurate-sometimes by as much as 10° C-
because they are old or they were wrongly calibrated in the first place.
Temperature variations of only 3°-4° can mean the difference
between good and spoiled tea. Thermometers need to be absolutely
accurate and they need to be in the right position in the drier to be of
any use. If an accurate thermometer is in the wrong place in the drier, or is the wrong length, it is of no
use at all.

Two aspects of airflow need to be checked-both the volume going into the drier and the air pressure
inside the drier. Because in a fluid bed drier the air passes through the bedplate at high resistance, it goes
through the holes into the chamber very quickly to fluidize the tea particles. As water is lost from each tea
particle, its temperature increases proportionally and so, by measuring and comparing the temperature of
the inlet air and the temperature of the exhaust air, it is possible to monitor the moisture content of the tea
accurately within the drier.

40
Most modern fluid bed driers have built-in temperature recorders but, again, these are only any good if
they are accurate. It is necessary to check and recalibrate thermometers to be absolutely sure that
readings are accurate and to use a reliable platinum resistance thermometer as the factory standard.

In some driers, there can be a +/- 3% deviation in moisture content of the made tea. Final monitoring
needs to be carried out as the dried tea exits the dryer in order to again check the moisture content.
Ideally, NIR equipment should be used here for purposes of accuracy. Alternatively, tea samples need to
be taken every 10-20 minutes to check the moisture content using a reliable moisture meter such as the
Tea craft Thermoray. It is also advisable to check the moisture meter regularly for accuracy: ISO
standards exist for this.

MONITORING GRADING

In the tea factory, checks on grading are traditionally done by eye. The grading machines (sifters) are set
up with standard meshes which must not have any faults or large holes in, and a more exact way to check
that the meshes are doing their job of separating the leaf into particles of regular sizes is to use particle
size analysis. This passes a set amount of tea through the sieves in a set time to check that the grading
profile is the same each day or each week. The grade profile is measured using a set of certified sieves
and a laboratory sieve shaker to test that the size range of particles going into a grade is always the
same. If it is not, then the settings and meshes of the factory sifters must be adjusted slightly.

The amount of emphasis put on grading depends very much on what packers and blenders are
demanding from their suppliers. It is especially important for teabag manufacturers. If the density of a
given tea is incorrect, it can affect the amount that goes into the tea bags and may mean that expensive
adjustments have to be made to packing machinery.

To help with this problem, modern factories use tapped density volume meters to make sure that after
grading; a given volume of tea has a certain weight. The old-fashioned way to check this is to use a
measuring cylinder that is filled with tea, and then bang on a hard surface to see how the level of tea
settles. However, there are too many variables for this method to efficiently measure density and it does
not meet international standards, thus an automatic tapped density voltmeter is recommended for
consistent monitoring.

MONITORING THE MOISTURE CONTENT IN MADE TEA

Once the made tea has been packed it is possible that it will absorb
quality-destroying moisture during transportation and storage. Paper
sacks, with their four layers of paper, foil and polythene, are a vast
improvement on tea chests, but if sacks are not made to
internationally acceptable standards, are not properly sealed at the
valve or are ruptured in any way, the tea will not be totally protected
from taints and moisture.

When sacks of tea arrive in the factory where they are to be blended,
it is important to check the moisture content so that tea with a higher level of moisture content is used
before tea with a lower level of moisture. Monitoring bulk moisture content can be carried out by plunging
a probe moisture meter into the sacks or tea chests.

FUTURE EXECUTION

Tea companies may feel that all the tea they make will find a market and that they therefore do not have
to worry very much about monitoring the various stages of the manufacturing process. But monitoring can
help them to save money by making efficient use of machinery and equipment, and by improving and
standardizing quality they will attain better prices in the marketplace.

41
 The amount of monitoring needed varies from one factory to another and monitoring must be appropriate
to the particular situation. Many factories would benefit from the use of simple equipment to run simple
checks. But the most important aspects of manufacture that every factory should be concerned with are
the monitoring of temperature, humidity, airflow, moisture content and density in the packing room.

One of the most useful pieces of equipment that can help tea manufacturers improve quality and reduce
costs is the unique award-winning Tea craft ECM System for Miniature Manufacturing of Black Tea. This
mini-scale tea factory can precisely simulate any process conditions and is being used by tea research
institutes and forward-looking tea producers throughout the world. It can be set up to show how tea
quality varies according to process conditions and helps the factory manager to set conditions that are
ideal for the quality he is trying to achieve. Samples of teas made under a range of different process
conditions can be sent to brokers who can immediately put a value on the tea and therefore tell the
manufacturer how much he would make or save on the production of that tea in the factory situation.

Supply chain of Tea:

Production process of black tea in Japan

All Green Tea, Black Tea, Oolong Tea and White Tea Comes from the same plant

42
Camellia sinensis.
In most countries tea is
plucked by women.
BACK TO TOP
Black Tea production process
Here the pickers take their
tea to be weighed.
The exposure to oxygen will
activate the enzymes to
change the flavor and make
the leaves turn dark and end
up as black tea.
In some places tea is cultivated in In other places tea grows in clumps of bushe
neatly manicured rows. That spread up and down hillsides.
They pick the top two leaves and bud Here is a close-up of the top two leaves and
from new shoots that sprout on the Bud.
top of the bushes.
These withering troughs are Rolling will expose the inside
set on screens with air of the leaves to air.
flowing underneath to
remove moisture.
Next the tea must be dried. Finally it is sifted for size.
Smaller particles are perfect
for teabags.
43
Larger leaves will be used as At the end of the journey the
loose tea. tea will be blended and
packed and sold to happy tea
drinkers around the world.

Figure 1 Tea value chain

Value chain analysis:

Input logistics:
In inbound logistics the company receive material from supplier .in tea industry
the company receives raw material of from grower to supplier and supplier tocompany.the first
one is leaf brought in to the factory and then they process the leaves and turn them into raw tea
then this tea brought to the broker and then it would sale by auction to company.

Operations:
The tea company perform some processes like Withering, rolling, roll-breaking
and green leaf shifting., Fermentation, firing, orthodox, CTC, The legg cutter, Restrovane,
oxidation , Grading ,flavoring turn into danedar and other crush or dust form.

Output logistic:
On this stage the tea turn into finish product all packaging would do and sent for
store and go down and storage places.

Marketing and sales:

44
 In this stage the company starts its advertising campaigns and distributes their
product. And open their distribution channel and outlets.

Services:
In tea industry the services are the complains by the customer like the tea is a
perishable good and its suck the smell of other products like food ingredients and detergents
so this complaints fulfils by the company and they do regular visits to their distribution
centers and retail stores.

Problem in supply chain:

Yes there is a problem in supply chain that companies did not get direct from
suppliers they get from brokers or auctioneers and there is no proper supply of raw tea and
companies come after a long time in supply chain.

International scenario in light of WTO:

The international scenario is two types for Pakistan tea industry:
Negative affects
Positive affects
Negative affects:
The negative is that the international brads come in and try to capture the tea
market of Pakistan. India also a big producer of tea and they also have the well known
brands like TAJ MAHAL, RED LABEL, TATA TEA etc. so they will also try to
damage the tea industry of Pakistan.

Positive affects:
On the other side Pakistan has the opportunity to introduce their brands on
international level and also have the opportunity to capture the market of India and other
neighbor countries. This will increase the investment level in tea industry of Pakistan.

Need analysis

Need satisfaction:
• Alertness
• Keeping hot
• For elimination of depression.
• Addiction
• Time pass
• Entertaining guest

The worldwide low prices for tea are finally forcing modernization among the specialty tea
producers. Premium tea is a niche market and a wonderful beverage, but often remarkably

45
inefficient from a business perspective. This inefficiency has diverse causes, many revolving
around almost unchanged multi-generational family business practice. Family feuds span
generations, and ultimately lower the regional image for all involved. The basic requirements
and functions/uses are to cater need like hunger, pleasure, addiction, alertness, entertaining
guests to maintain body temperature in winter specially of course for time pass

SHARE OF MARKET:
Tea popularity in the beverage industry is surprisingly sprouts in recent decades .By the
questionnaire we have conducted there is quite positive trend towards its consumption.

WHAT TYPE OF BEVERAGE DO YOU DRINK MOST FREQUENTLY

Frequency Percent Valid Cumulativ
Percent e Percent
Valid tea 21 52.5 52.5 52.5
coffee 2 5.0 5.0 57.5
soft drink 14 35.0 35.0 92.5
juice 3 7.5 7.5 100.0
Total 40 100.0 100.0

what type of beverage do you drink most frequently

60

50

40

30

20

10
Percent

0
tea coffee soft drink juice

what type of beverage do you drink most frequently

DO YOU DRINK TEA

Frequency Percent Valid Cumulativ
Percent e Percent
Valid no 7 17.5 17.5 17.5
yes 33 82.5 82.5 100.0
Total 40 100.0 100.0

46
 do you drink tea
100

80

60

40

20
Percent

0
no yes

do you drink tea

47
 RECOMMENDATIONS
• The potential markets should be tightly captured & expansion should be made to serve the un served
markets
• To eliminate the possibility of organic matter interfering with taste or color the demonized water
had to have a total organic carbon (TOC) content below 50 parts per billion. The water purification
specialists at ELGA LabWater reviewed the quality of the mains water at Unilever’s thirteen tasting
sites and proposed two models from their PURELAB Option range: the Option-R and the Option-E.
• Surge for non users proportion and there fears regarding the specific product use.
• Product up gradation anticipation is intensely required to keep ahead with Competitors
• Must explore the new scales & dimensions for expending the existing market by inventing new product
performances.
• Total demand increase for product category
• Rekindle interest in a mature market
• Increase usage rate & i.e. frequency of use
• very important to play as Think global & act local.
• Increase total no of users.

The first step in w

Segment N
( Non users)

Questioner

48

Segmen
Participation and demographic information

Do you drink tea?

. Yes
. No

Which of the following age groups do you belong to?

. Less than 21 years old
. 21–44 years of age
. 45+ years of age

What was your highest level of education completed?

. Primary level
. Secondary level
. Intermediate level
. Graduation level
. Masters level
. PhD level

Beverage consumption

Excluding water, what type of beverages do you drink most frequently? (Check one)
. Tea
. Coffee
. Soft drink
. Juice
. Other: ______________________________.
. Do not know / No response

When do you drink tea? (Check all that apply)

. In the morning
. At noon
. In the afternoon
. At night
. Never (please quit questionnaire.)
. Do not know / No response

Tea consumption

In what form do you buy tea? (Check all that apply)

. Tea bags
. Tea leaves (Open tea)
. Sachets
. Bags
. Box packing
. Jar

49
. Other: _____________________________.

Where do you usually buy tea? (Check one)

. Supermarket
. Specialty store
. Natural food store

How often do you drink tea? (Check one)

. Daily
. Every other day
. Weekly
. Monthly
. Do not know / No response

What type of tea you consume? (Check one)

. Black tea
. Green tea
. Pink tea
. Other: _____________________________.
. Do not know / No response

How much of tea do you consume per day? (Check one)

. One cup or less
. Two to three cups
. Four to five cups
. More than five cups
. Do not know / No response

What is your main reason for drinking tea?

. Fun
. Brightness
. Taste
. Health
. Other: _____________________________.
. Do not know / No response

Which of the following attributes do you consider when purchasing tea? Rate the attribute
below according the following scale:
1 = Very important
2 = Important
3 = somewhat important
4 = Not very important
5 = of no importance
Attribute

50
Price
Consistency of taste
Quality
Brand name
Source of production
Nutritional content
Health benefits
Organically produced
Naturally produced

If you do not take open tea under which label you prefer to buy? (Check one)
. Supreme
. Lipton
. Tetley
. Vital
. Tapal
. A1Karak
. Other: _____________________________.
. Do not know / No response.

51