Market And Competitive Strategy Plan For Unilever And Lipton Ice Tea In New Zealand

Background of the Company

Discuss about the Market and Competitive Strategy Plan.

New Zealand is one of the renowned countries specified for the tea drinkers across the world. This small country includes thousands of cafes for the customers who have been usually visiting the place. It is noted that tea drinking has been the old tradition in the history of New Zealand. The rations of early settlers, huts of whalers, and the culture of the immigrants are associated with such tea cultures in Australia (Rashid & Ghose, 2015). The review of the statistical report is also confirming the high consumption amount of tea among the people all over the country. It has been noted that the kiwis usually consume more than 3kgs tea in a year. The growth of cafe culture has changed the drinking habits of the kiwis. The emerging sophistication in the tea cafes and tea markets are also considered as the major reason for the growing competitive market in New Zealand.

The study will be discussing the marketing and strategic plans for Unilever and Lipton Ice tea in New Zealand market. The analysis of the company background will be presented in this study. The theory based analysis will provide the knowledgeable insight regarding the subject matter. The categorisation of the strategic implementation will be discussed. Depending on such categorisation and discussion, the preferable recommendations will be provided.  

Unilever and Lipton Ice Tea has been inspiring the tea drinkers since the year of 1890. The rapid growth in the tea industry has become much beneficial for the company to promote and strengthen the brand position globally. The company has even concentrated on promoting a range of teas and iced teas that create the complete refreshments. The brand is much renowned for the high quality tea including green and black tea. Lipton Tea offers different types of the tea ranges, such as bags tea, herbal infusion, black tea, green tea, leaf tea, flavoured tea, and a range of ice tea (Unilever.com. 2016). The company offers Lipton Chai Latte and Lipton Yellow Label in New Zealand market.  It is noted that the Tea is a product that is preferably used for refreshing the mind. It is considered as the most widely consumed product all over the world. The report follows that the people in Australia usually consume almost over 22 million cups of tea every single day. Moreover, people prefer the tea for their healthy lifestyle. The company in fact offers a range of ice teas, which is free from artificial colours and refreshed ingredients (Qasim, 2015). The flavours of lemon, peach, and free citrus are also available. It is notified that the company has introduced an array of tea-based drinks and tea soft drinks with zero calorie infusions.

BCG Growth Share Matrix

Lipton Ice Tea is even much committed towards maintaining sustainability. The company was appreciated as the most committed organisation, which maintains sustainability by sourcing tea in a large amount of scale. It is presumed that by the year of 2020, almost 100% of the tea of this brand will be sustainably sourced. In this current time, the company is planning to expand and promote the brand in New Zealand market. The market is quote preferable for the tea business, but it has several challenges as well due to high competency level. The study will be formulating the strategic marketing plan for promoting the brand in New Zealand market.

Unilever has captured the third largest position in world for offering high quality consumer goods. The BCG matrix tool is one of the most preferable marketing techniques to understand the portfolio management. Shanbhag, Dutt & Bagwe (2016) mentioned that the principles of such marketing tool are classified into categories, market growth, and shares.

Figure 1: BCG Matrix

(Source: Shanbhag, Dutt & Bagwe, 2016)

Star (High market Growth and High market share): The star category is based on the products, which have the high market value and share (Preczewski, McNatt & Abecassis, 2014). It is noted that there are several products associated with Unilever Brand are holding a large market share for strengthening the position. Due to the innovative approaches and new competitors in the market, the company may face several challenges. Therefore, it is essential for the company to invest more capitals for bringing innovations in the marketing process. For example, Lipton is one of the famous brands of Unilever. This brand is the world class tea brand that has captured the significant place in the world. Even though the brand has the strengthened and competitive position in the market, the company continued investing on an innovative technology. This particular technology is named as TESS technology, which is used for the fresh fragrance from the picked leaves. The application of such technology is enabling the re-launch of Lipton Yellow Label, which brought much success to the brand in last few years.

Cash Cow (Low Market growth and High market share): The cash cow defines the products, which has already introduced and has reached to the saturation point. This category is essential for Unilever, as the brand requires further investments for generating more revenues (Kotler, Berger & Bickhoff, 2016). The profits derived from such investments can then be allowed for re-investment to promote the Star and Problem Child Brands.

Corporate Growth Strategy

Problem Child (High Market Growth and Low Market Share): This particular segment stands for the future growth of the products. It is noted that some of the newly launched brand requires much investments for maximising the potentiality in the competitive market (Kozlenkova et al. 2015). It is more like value added services that are useful enough to attract more customers and strengthen the competitive position in the market. It is also signified that the Cash Cow products usually grows further and more frequently (Tao & Shi, 2016). Therefore, the company invest more efficiency in this problem child product to exploit those cash cow products. For example, Unilever invested more capital on Marmite brand, and the profit gained from these products are used for re-investing in a brand like T2.

Dog (Low Market Growth and Low Market Share): These products have lost the time and no more exciting for the customers. In fact, the company may not receive much profitability by investing resources in these products. If the company happens to keep these products in the market, it will just waste the resources, which are generated from the effective products. If this particular product segment can contribute any benefit to the company, then it may exist for long. However, having no such investment return, Unilever had eliminated many brands, which were wasting the resources in spite of generating any profit.

Unilever and Lipton Tea together has been focusing much on the sustainable future on the business. The maintenance of the sustainability is one of the major weapons for implementing the strategic business. It is to be noted that in this current scenario, the world has been facing several troubles like scarcity of water, lack of food supplies, high temperature, and increasing rate of the unhygienic atmosphere. On the other hand, the population is also growing much frequently (Hasan, 2015). Therefore, each day, the companies have to face several environmental challenges, which are creating the significant impact on business. In keeping concentration on such troubles, the company has undertaken several environmental welfare initiatives that are providing the fruitful solutions to such challenges. In the year of 2010, the company launched the Unilever Sustainable Living Plan, which is considered as the blueprint for the future sustainable growth of the business.

In fact, it is noticed that the Lipton Ice Tea is introduced in a new refreshing bottle. The brand tries to reduce the use of plastics while preparing the containers. Moreover, the tea is prepared such a way that it consumes less water, less energy, and less emission of Greenhouse Gas. The leaves are picked fresh and then prepared by taking advices from the experts. It generally adds more flavour and tastes for minimising the environmental footprints. The brand has undertaken such sustainable strategy in order to strengthen the competitive position and ensure the business growth.

Competitive Landscape

In the year of 2015, Unilever brand started dominating the RTD tea in New Zealand. The ratio of value share increased up to 57% in that particular year. The brand was then specified as the first brand in that category and was built in off-trade and on-trade channels. The company introduced a bigger volume plastic pack of 1.5 litre bottle (RTD Tea in New Zealand. 2016). In the year of 2015, the Best Beverage Company broke the record by initialising the biggest value chain share in RTD tea. The AriZona Brand made the profitable approaches in both off-trade and on-trade channels (Khamis, 2012). It is noted that the brand is much convenient in retailing channels for its distinctness. It is even available in 500 ml bottle as well. Hence, apparently, it is seen that the competitive landscape is much prominent for tea business in New Zealand.

Raymond Miles and Charles Snow introduced a new typology of the marketing strategy that considers four different functional areas. According to Walker (2013), these four functional areas are based on the specific rate at which each organisation determines to change the market or products. In case of Unilever and Lipton Ice Tea, there is no exception found. These four functional areas are described further:

Prospectors:  Prospector is the main responder to the changes that are going to be undertaken by an organisation (Miles, Miles & Cannon, 2012). Mostly, the organisations, which seek for the better opportunity and the higher market shares, undertake such prospector strategy to strengthen the business position. It is notified that Unilever and Lipton Ice Tea is introducing new technologies to develop the product value in New Zealand market. The innovative use in the business functionalities is thus prominently shown in the launch of teas in New Zealand.

Defender: Many of the firms pay most attention towards acquiring supports from defenders instead of implementing growth and innovative strategies. These organisations usually maintain customer retention policies and stable growth for the existing products. These organisations thus fall under the categories of defender. However, Unilever and Lipton Ice Tea is more fascinated about the innovations and growth opportunities. Hence, the company does not follow this category.

Analyser: It is seen that few of the organisations follows the analyser strategy for maintaining market share and the innovative approaches as well. However, these organisations still cannot match the innovative level of the prospectors (Walker, 2013). Unilever and Lipton Ice Tea found that the brand requires more investments on innovations, which became the major focus for the company. Hence, it did not acquire such analyser strategy to promote the products in New Zealand market.

Market Categorisation: Miles and Snow and Porter’s Generic Strategy

Reactor: The Miles and Snow theory explains that the reactor strategy does not maintain consistency in making strategic approaches. Several organisations react to several environmental events, but fail to anticipate those events. Therefore, Unilever and Lipton Ice Tea has not accepted this strategy, as the company is much focused on innovations.

Delmas & Pekovic (2015) implied that the business-level strategy indicates the achievement of the organisational core competencies. The organisations keep the focus on satisfying the customers’ preferences and strengthening the competitive position. However, Unilever and Lipton Ice Tea has undertaken the porter’s generic strategy to establish the business in New Zealand. The generic strategy includes three different metrics, such as cost leadership, focus, and differentiation.

Cost Leadership: Unilever and Lipton Ice Tea has concentrated on the wider range of the customers by focusing on the pricing strategy. It is noted that the internal efficiency is mainly based on the pricing parameter for obtaining the margin that helps in acquiring the sustainable business. This cost leadership strategy is based on the standardised products, which have certain generic qualities. Therefore, the company has concentrated on such pricing strategy of tea that is launching in New Zealand market.

Differentiation: Unilever and Lipton Ice Tea is much concerned about the needs of the customers. It is analysed that drinking tea has been the old tradition in New Zealand. Accordingly, the tea market is much competitive. Hence, the company started thinking about the fruitful differentiation strategy that can add the unique value to the offered products. The company started preparing the tea with several refreshing flavours and fresh leaves. In fact, the brand has engaged several experts to ensure more effective tastes of the ice tea that will be offered to the customers (Ibrahim, 2015). In order to maintain the parameter of the carbon footprints, the company started using the ingredient, which consumes lesser energy, lesser water, and amount of plastic is also reduced. The products include the high quality ingredients and definite features.

Focus: It is noted that Unilever and Lipton Ice Tea has fixed the concentration on the demographic feature of the overall population. Tea is a product that is consumed by the people of all age group. Hence, the target customers Unilever and Lipton Ice Tea include men, women, young, and adults of all ages. The tea market in few years ago is also comparable to the current emerging market. The changes in the customers’ preferences and demands are also highlighted accordingly. The innovation is thus associated in using technicalities for ensuring the customers’ satisfaction.

Niraj Dawar defined that upstream activities involve many of the organisational resources, which are associated with the production and products. The divisions, profitability, and the measurement associated with the products and productions are explained in the upstream activities (Leavy, 2015). On the other hand, downstream activity includes the satisfaction, retention, and acquisition of the customers. If the organisations can undertake the efficient upstream activities, it will be beneficial in managing the downstream activities (Langie, 2014). Hence, it can be inferred that both the activities are interlinked to each other. Similarly, Unilever and Lipton Ice Tea has been maintaining the upstream functions by obtaining ideas from the experts while preparing the tea from tea leaves. The flavours are added to satisfy the customers and draw their attention. Moreover, the competition is much higher in the New Zealand tea market. Hence, the improvement of the company’s upstream activities can generate supports from the customers by achieving the satisfaction level.

Varadarajan explained the strategic marketing framework by explaining the Resource-Advantage Theory, which is widely known as R-A Theory of Strategic Marketing. This R-A Theory includes four major dimensions, which are needed to be considered by the organisation. These dimensions are domain, definition, foundational premises, and fundamental issues (Varadarajan, 2015). The further explanations are provided below:

Domain: In the field of strategic marketing, the first concern is to focus on the domain of the products. Lipton Ice Tea is a brand of Unilever, which prepares the tasty flavoured tea with refreshed leaves. The experts put their knowledge to mix the high quality ingredients that are healthy for humans. The brand identity is also much effective for strengthening the competitive position in the New Zealand market.

Definition: Definition is generally indicating the specifications of the decisions undertaken by the organisation while developing market or products (West, Ford & Ibrahim, 2015). In case of Unilever and Lipton Ice Tea has decided to evaluate the tea market in New Zealand. With the addition of more flavoured ingredients and refreshments, the company is trying to maintain the environmental welfare besides launching such products. Hence, the market definition represents the decisions undertaken by the company.

Foundational Premises: The foundational premises refer to the generalisation of the products, markets, and the time schedules (Lee, 2014). Unilever and Lipton Ice Tea is launching the tea products in New Zealand market in a short time span. The company is mainly focusing on the business-to-customer or B2C process for introducing the new flavoured tea in the market.

Fundamental Issues: The observed differences in the market are referred as the fundamental issues. The major obstacle that Unilever and Lipton Ice Tea might face in the New Zealand market is the enormous threats from the competitors. The focus on the high quality and the customer satisfaction level can mitigate such issues in a significant way.

It is true that Unilever and Lipton Ice Tea has been maintaining the environmental welfare by reducing the carbon footprint level. However, it is also noted that the New Zealand market has been following the tradition of drinking teas since ages. The tea market is widely accepted by the consumers of all age. Accordingly, the competitors are also a major concern for the business sustainability. However, reviewing the different tactics undertaken by the company, it can be recommended that Unilever and Lipton Ice Tea requires focusing on more capital resources. Investment on the upstream activities will be much beneficial for the company to gain the attention of the customers. Moreover, the structured pricing strategy will also be much fruitful for the company to ensure the strengthened competitive position in the business market. It is noted that the investment on the production will gather more revenues that can be invested for the other brands. Hence, focus on such strategic marketing process may derive profitability to the company in a significant way. Another recommendation is to undertake the attractive promotional activities. If the company can facilitate the effective promotional activities with the help of different latest technologies, it would be easier to draw the attention of the customers. The featured broadcasting of the tea preparing style would gather the interests of the customers in a significant manner.

Conclusion

The study is analysing the marketing strategy undertaken by Unilever and Lipton Ice Tea, which is introducing the special flavoured ice tea in the New Zealand market. The company follows a set of marketing strategies for adding the efficiency. Reviewing the different typologies of the theories that are preferable for the strategic marketing process, it is noted that the company requires focusing on the upstream activities more. The achievement of the customer satisfaction level would be beneficial for the sustainable development of the company in this competitive market.

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