WHAT TYPE OF PRODUCT IS TEA?
Experience Good
PRIVATE GOOD
--IT’S NOT AVAILABLE FOR EVERYONE
UNLESS THEY PURCHASE IT
(RIVALROUS AND EXCLUDABLE)
-- It’s something that is
consumed and you can value it
based on taste and health
benefits
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
1. Highly fragmented market in India
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
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
Affected by moisture/storage problem
2.Unique aroma
3.Good packaging
4.Good advertising/ brand visibility
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
TWINNINGS
Strengths
Weaknesses
1. Oldest use company logo, give it’s a
rich heritage brand status
1. Despite strong brand, awareness is not
as much some other prominent brands
2.Founding member of Ethical Tea
Partnership
2. Intense competition means limited
market share
3. Rich image heritage
4. Offers wide variety of tea products
5. Immense contribution towards social
responsibility has enhanced its brand
image
Substitutes
COMPLEMENTS
• MILK
• SUGAR
• HONEY
• Coffee
• Soda
• Water
• Juice
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