Saad Shammoot, Naeem Khan, Sean Reifinger Tea Market Analysis Saad Shammoot, Naeem Khan, Sean Reifinger

What type of product is Tea? Experience Good -- It’s something that is consumed and you can value it based on taste and health benefits Private Good --It’s not available for everyone unless they purchase it (Rivalrous and Excludable)

How Does it Provide Value to the Customers? Taste Enjoyable drink with Different types of tea with different flavor Health Contains antioxidants, reduces risk of heart attack, helps with weight loss, helps battle cancer, and boost your immune system.

What type of Competition is in this Market? Monopolistic Competition: Many firms offer tea and it is not a perfect substitute, in the long run demand is highly elastic for example Starbucks’ Teavana brand, Coca-Cola’s Fuze and, the Snapple brand portfolio owned by Dr Pepper Snapple , and PepsiCo and Unilever’s Pure Leaf brand

Direct Competitors: Goodricke Group Ltd Strengths Weaknesses 1.  The company has 17 existing tea gardens owned by 8 Sterling Tea Companies 2. A good heritage and reputation stand for it as it was started around 1800s 3. The group is involved in many CSR activities which improves its brand visibility 4. It is backed by Camellia Group which is globally renowned 1. Highly fragmented market in India 2.It is labor-intensive industry and has associated issues like unorganized nature of small growers 3.Difficulties in introduction of mechanization of field operations due to topographical and quality limitations

Lipton Tea Strengths Weaknesses 1.Rich taste and flavor 2.Unique aroma 3.Good packaging 4.Good advertising/ brand visibility Affected by moisture/storage problem

Starbucks Strengths Weaknesses Has one of the most recognizable brands in the industry Extremely high level of store presence High visibility locations of their stores Good supplier relationship Lower turnover due to good health benefits package Invented specialized coffee as a mass product Loyal customer base willing to pay premium prices No franchises, all company operated Coffee is one of the last socially accepted addictions Offers employees health benefits and a 401K Offers employees tuition assistance Voted one of the top ten companies to work for Employees are low skilled Products are more expensive and customers could easily switch to lower cost products in times of economic hardships Aggressive expansion could lead  to a watered down effect Increasing health conscious people, esp. younger generation There is a constant increase in number of competitors Employees are largely part-time Starbucks

Twinnings Strengths Weaknesses 1. Oldest use company logo, give it’s a rich heritage brand status 2.Founding member of Ethical Tea Partnership 3. Rich image heritage 4. Offers wide variety of tea products 5. Immense contribution towards social responsibility has enhanced its brand image 1. Despite strong brand, awareness is not as much some other prominent brands 2. Intense competition means limited market share

Substitutes Coffee Soda Water Juice Complements Milk Sugar Honey

Customers People in general regardless of age and gender High elasticity of demand

Suppliers

Externalities The Positive externalities from tea consumption include lowering overall healthcare costs  as the people consuming tea enjoy its health benefits and do not get sick as often resulting in a general lower cost of healthcare for communities as a whole.  Moreover tea is a sustainable crop as only the top one to two inches of the plant are picked and it does not have to be ripped from the ground like other crops Negative externalities from tea production include the use of pesticides along with lowering water supply and deforestation that affect natural habitats.

Role of government Over 50

Entering the Tea Market? No because of government regulations Suppliers High Bargaining Power Buyers Bargaining Power Brand Loyalty