Marketing Strategy and Consumer Behaviour of Lipton Green Tea
Customer Loyalty is gained by an organization after the product and service provided to the customer have successfully fulfilled the customer expectations regularly. It takes immense hard work and dedication to form an image of a loyal brand and gain loyal customers. It is important to incorporate the marketing strategies of an organization in sync with the customer’s behavior to attain loyal customers. In the recent times, this has been recorded that the percentage of loyal customers in the organization Lipton Green Tea have been reducing gradually and the repeat sale of the product is at the lowest in comparison to the previous years. Being one of the most popular FMCG Company the organization is in a state of crisis and requires immediate investigation. According to the conducted survey, it was recorded that 43.75% consumers of the Lipton Green Tea are loyal customers, but this rate has decreased since the last year. The marketing strategies of the Lipton Green Tea have to be aligned with the behavior of the targeted consumer as this will help in achieving a high consumer retention rate in the organization.
Critical Analysis of Current Marketing Focus of Lipton Green Tea
Current Marketing Strategies
Marketing Segmentation, Targeting & Positioning Strategies in Sync with the Consumer Behavior
The segmentation of the market by the Lipton Green Tea is conducted on the basis of demographic, geographic, behavioral and psychographic. On the basis of this segmentation, the company targets people who are health conscious, tea lovers and people between the ages of 20 to 60 years old. According to the conducted survey, around 50% of the consumers stated that they are motivated to buy the Lipton Green Tea for the mere reason of staying healthy and fit. This is a psychological factor of consumer behavior that includes the attitude or the consumer learning processes. The attitude of the consumer to stay fit and health encourages him to buy the product. This can be examined furthermore with the personal-variable model, that explains the decision making processes of a customer that can be due to personal opinion, goals, beliefs, traditions and other internal motivator. The company’s segmentation strategy completely fulfills this need of the segmented market. But this also displays that the rest of the market who buys the tea due to different behavioral factors is not being targeted effectively. According to the Zeithaml et al, the segmented market should be targeted with a plan that fulfills the customer expectations which should be similar to the customer perceptions (Zeithaml, Bitner and Gremler, 2013). This also means that the prices and the communication between the customers are other important factors that the Lipton Green Tea needs to work on, as they are a crucial motivational factor of a customer. The Lipton Green Tea is positioned in the market as “the perfect drink for an active & healthy lifestyle”. This positioning strategy is attracting only the health conscious people that are just half of the targeted market. For the people, who are tea lovers, they are not being informed about the different flavors and the aromas that are an integral part of the Lipton Green Tea. These are some of the personal factors of consumer behavior that contributes in the process of personal buying decision of the customers. In this case, it can be examined further with the complex model that takes into consideration both the external and internal factors. According to the survey, the energetic behavior of the customers is the driving force to buy Lipton Green Tea and around 50% of the people have this perception. This showcases that the company’s strategy is attracting half of the targeted market and the rest of the market is being ignored that is resulting in the loss of loyal customers (Awara, 2010).
Marketing Mix Strategy
The marketing mix of Lipton Green Tea has helped the organization to generate higher revenues and more customers. But the customer behavior keeps fluctuating due to the growing competitors in the market and their more impressive strategies (Eggert and Ulaga, 2010). The theory of reasoned action, helps in understanding the decision making aspect of the customers under various circumstances. The product strategy of the Lipton Green Tea is a differentiation strategy as the organization provides the customers with different flavors and different number of bags in each packet. According to the survey, 12.50% of the people stated that they were influenced by their friends to buy the product. This is a social factor of the consumer behavior. These social factors can include group influences, social class, work communities and families too. The pricing strategy of the organization is the price penetrating strategy that is utilized to stay ahead of their competitors (Fink et al., 2008). According to the survey, 43.75% customers have stated that they like the taste of the product in comparison to the other brands and also 50% of the customers thought that the price of the product is value for money. This represents that the organization’s pricing strategy is working effectively, but the diversification of the product, that is, the availability of the product in different flavors is not completely in sync with the customers changing behavior and thus there is a requirement for certain alterations. Also, the organization targets a large volume of customers that range from different ages and from a different financial background. The organization can attempt to expand their market by implementing the economy pricing strategy, so that the customers who are not able to buy the product can also purchase it without frills (Hipperson, 2010).
The Lipton Green Tea is available for sales in more than a hundred countries around the world. The organization’s distribution strategy follows both direct and indirect methods. The organization provides more discounts to the wholesalers than the direct customers. This strategy will affect the customer decision to buy the product and will influence the customer to shift to another brand according to the psychoanalytic theory. According to the survey, 6.25% of the people have a negative image of the organization (Kim and Choi, 2016). This distribution strategy of the organization will increase this number gradually affecting the organization’s sales and loss of even more customers as it will have an impact on the customer’s psychological behavioral factors. The promotional strategy of the organization is an aggressive marketing strategy. According to the survey, 50% of the people stated that they were influenced by the organization digital media promotions which forced them to buy Lipton Green Tea. Though this is a good percentage of people who are getting attracted towards the product, but when compared with the type of effect the social media has on the sale of a product then the organization is lagging behind and their efforts are in the midway (Martin, 2016).
Marketing Communication Mix
The marketing communication mix can be defined as the various methods that are utilized by the organization to promote the organization and their product to a larger market. The marketing communication mix can be categorized into five elements, but with the increasing competition between organizations, there is also a sixth element that is sponsorship events. For the organization, the Lipton Green Tea the communication mix is the first step of building an image of the organization in the opinion of the customers that have to fulfill the customer expectations, before using the product. So the marketing communication mix has to be utilized with the sole objective of influencing the purchasing behavior of the customers (Min, Segal and Dalman, 2014).
The advertisements that are created and broadcasted through different mediums like television, newspapers, magazines, digital media and many other mediums are very effective in attracting customers. The EKB model that is popularly known as Engel, Kollet and Blackwell model, helps in understanding the different shifts through which a customer goes before buying the product. The Lipton Green Tea has targeted the customers with different slogans and taglines. The organization uses a different tagline in various advertisements like 100% natural, 100% real tea, be more tea, feel light & feel active, slimming tea and many more (Odongo, 2016). Now, this approach of promoting the product with different taglines creates confusion in the mind of the customers, hence, affecting their decision to make a purchase. Also, the different taglines restrain the customers who will not relate to a certain tagline that means a certain tagline will not be in sync with a certain customer needs and demands. Thus, the organization has to build a universal tagline for all the customers, which fulfills the needs and demands of each customer. The tagline should be catered to the entire targeted market.
The personal selling of the Lipton Green Tea helps in pitching the potential client by focusing directly on the needs and demands of the customers. This is also known as integrated marketing communication that has a direct impact on customer behavior. In the organization Lipton Green Tea, though the organization has a direct distribution channel, it is not that effective as the organization provides better offers to the wholesales than the direct customers (Rajagopal, 2012).
The organization Lipton Green Tea, does not provide the customers with any specific discounts that will make the customer happy and will transform him into a loyal customer. It is also due to the price penetrating strategy of the organization that forces the company to keep their prices lower than their competitors. The discounts and promotions together, go hand in hand that helps in attaining loyal customers (Zolkiewski, 2012).
The online marketing is the strongest source of influence for Lipton Green Tea. The online communication mix is a huge platform that can positively appeal to the customer’s behavior and can also offend them. Thus, there are bigger responsibilities that come along with it. The brand, Lipton Green Tea, has been stated to provide a high extent of lifestyle with a record of 37.50% customers believing it, according to the survey. Now, the online communication strategy of the organization is extensive, and so the results should be higher (Yi, Gong and Lee, 2013). It is due to the reason that the other brands are attracting customers with better strategies and a more personalized approaches that are reducing the customer retention rate of the organization. This has been analyzed through the motivational needs theory that focus on the five components of the customer behavior that are love, esteem, survival, self-actualization, and safety.
The organization Lipton Green Tea is in a facing a huge crisis the increasing loss of the loyal customers. This has to be implemented and seriously monitored by the organization to make loyal customers for the organization (Xie, Poon and Zhang, 2017).
The organization has to be proactive.
This is the new emerging trend in the competitive world of today that the chances of attaining loyalty of the customers are less during the process, when a product is pitched to a customer. But there are high chances to form a loyal customer when he is surprised with an important information that may help in solving an issue of the customers. Being proactive also help in increasing the innovation standard in an organization. For the Lipton Green Tea, the organization will be able to understand the different behaviors of a customer through the means of being proactive and will help in increasing the customer retention rate in the organization. This can also be termed as relationship marketing. According to Das, relationship marketing helps in providing more customer satisfaction that helps in transforming them into loyal customers (Das, 2009).
Achieve high standards of credibility and customer satisfaction.
The more, the organization Lipton Green Tea will provide customer satisfaction, the more credibility the organization will become in the opinion of the customers. For delivering high customer satisfaction it is important to position your product according to the various consumer needs and demands along with their behavior on each aspect. According to Tao, it is impossible to deliver customer satisfaction without understanding the needs and wants of the customers (Tao, 2014).
Alteration of strategies according to the changes in the customers’ expectations.
The organization can attain loyal customers if the Lipton Green Tea, will function like its emerging competitors, who are delivering customer satisfaction, according to the changing trends and also the behavioral changes that are developing the customers due to these trends. According to Evellyre et al, for fulfilling the needs and demands of the customers and delivering them with customer satisfaction, it is important for every organization to change as the expectations of a customer changes (Evellyre et al, 2009).
From the above analysis, this can be concluded that the organization Lipton Green Tea is reducing its customers due to its efforts in different areas, which are only fulfilling only to half level and this has been examined through the surveys too. The organization is providing mediocre services that are satisfactory for half the targeted audience and the other half is being ignored by the organization. This attitude of the organization is creating a bad image of the brand that is gradually spreading in the market and affecting the customer retention rate of the organization. The Lipton Green Tea is also not changing its strategies according to the emerging competitors which is making the situation even worse. Thus, the recommendations suggested have to be executed seriously and it also requires regular monitoring and changes with the changing circumstances of the organization.
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