Principles of Marketing Management: of Twinings - Case Study Example

Title: Principles of Marketing Management Table of Contents Summary 2 Situation analysis 3 SWOT Analysis 4 Marketing objectives 6 Target markets 6 Marketing strategies 7 Positioning the products 8 Differentiation strategy 9 Budget 10 Implementation and control of marketing planning 10 Thomadsen, R., 2007, Product Positioning and Competition: The Role of Location in the Fast Food Industry, Journal of Marketing Science, 26(6), 792-804. 13 Twinings strategic market plan to change its Earl Grey tea flavor Summary R. Twinings and Co. Limited, through its marketing management plans to change the flavor of Earl Grey to added lemon and more bergamot to make its tea more wonderful and offer strategic insights on how to position the company and its products so as to be more competitive during the period of Christmas 2011 in Hull. However, the strategic market plan is expected to increase the company’s profits even in its future performance of tea production across the world. In order for the marketing management to provide the company with an efficient strategic market plan, suggestions have been to understand the market position of key or potential competitors, establish Twinings’ situational analysis in order to develop achievable marketing objectives as well as generate marketing strategies based on the company’s SWOT analysis. Twinings will launch various brands so as to increase its brand width and differentiate its product to meet different needs of its consumers. Company Background The company deals in beverage production where it produces and sells tea products internationally. The company's product lines include specialty tea, green tea, iced tea, everyday tea and infusions. It was established in 1706 with its headquarter in Andover, United Kingdom where it operates as a subsidiary of the Twining Crosfield and Company Ltd. Twinings is best known for its Earl Grey tea that is currently known as the most popular tea across the globe. Apart from Earl Grey, Twinings also deals in the production and sell of Lady Grey that works best as Earl Grey but tastes different due to the added flavor of Seville orange and the Earl Green, from Green Tea rather than black. Additionally, Twinings sells fruit as well as herbal teas and as a result, the company is now well-known for its international brand. Currently, the products of Twinings are distributed in more than 100 countries. Situation analysis The current companies within the tea industry are achieving their competitive benefits from economics, particularly in the procurement as well as distribution of tea. Twinings’ tea with its added flavour of lemon and more bergamot will have a considerable edge over any new entrant in the market. This is because of its capability in the procurement and distribution functions. Currently, the product is differentiated based on brand identity as well as the loyalty of customers within the tea or beverage industry. Twinings will launch various brands so as to increase its brand width and differentiate its product. Thus, increase the barrier for new entrants.The company plans to change the flavor of Earl Grey to added lemon and more bergamot to make its tea more wonderful. Twinings has focused on providing the message that a part from the fact that only within the world of tea-production has the words or concepts of "more bergamot" and "wonderful" have ever been used combined, their consumers should feel that they have (Kotler & Armstrong 2010). Since company’s brand has become stodgy, detached and unapproachable. Twinings need to vie with the highly entrenched brands such as category leader Lipton, Hain Celestial as well as a myriad of independent players within the ready-to-drink tea group. The company will pay attention to the news received about the health benefits from flavor variety. However, Twinings Tea Company may face certain problems related to accessing the required distribution channels. In order for Twinings to penetrate the market and sell its new brand tea, it is essential for the product to be distributed in secure front shelves in various stores across the world, though this will in the short-run lead to increased cost of new entry, and thus ultimate the barrier (Kapil 2009). SWOT Analysis The finest ingredients which are coupled with 300 years of experience render Twinings Company the tea expert. The company has nearly 200 blends to choose from, indicating that Twinings always has something special for all segments. Twinings is also well-known for its undisputed and Infusions brand leader which accounts for a 54% market share. The company’s premium brand influence consumers to pay premium price for their products. The Twinings Tea Shops are reliable. This is because they provide a wide range of tea products from the premium tea companies, accessories and gift items. Twinings Tea Company is also committed to ethical principles of tea sourcing. It is a member of the Ethical Tea Partnership (ETP) as well as work with organization for Save the Children, where the company focuses on improving the lives of children within the rural tea-growing communities, particularly in China. Strength -Second largest brand name in tea industry - Wide product range - A very strong financial position of about $6.8 billion per year and globally - High production capacity -The company has about 85000 thousand employees in 43 countries - Already a market leader with a well-known and highly reputed brand Weakness - Less awareness about the local market - Availability of too many brand extensions may in the long-run dilute as well as confuse consumer perception, and thus give fresh and new competitors opportunities to seize the market share Opportunity - Huge market potential such as greater awareness of the health benefits of tea. - Increase awareness about flavour tea - Diverse customer segments -High population coverage Threat - Presence of other key players such as Lipton, Hain Celestial and a myriad of independent players within the ready-to-drink tea group, leading to tough competition - High fuel and energy cost - Law & order situation in various countries - Taxes and tariffs - Taste consciousness habit Marketing objectives Twinings Tea Company has focused on its twin objectives of creating the world of premium tea through the introduction of new blends. The company plans to motivate their consumers by more products for the coming Christmas season to increase profits. To position the company in international beverage markets as the expert tea blender by encouraging more consumers to engage with the Twinings brand. To consolidate as well as improve their partner relationships in trade so as to promote the sale of new and various products. Increase and maintain positive media coverage for Twinings and its varied products Target markets The main segments targeted by Twinings are the consumers of Unilever and Tapal brands because they can take their products on a higher price. Through its communication strategy, Twinings would highlight its legacy as well as expertise in tea blending. However, the marketing management has discovered that being a niche player within the tea market may not be of great help to the company in its long-run. This is simply because unbranded products also have huge markets and can as well be suitably targeted. Twinings also targets grey market since it is currently controlled by imports that are only obtained from Kenya. Based on its global presence, the company plans to source some basic products from various parts the world to become equipped in meeting the varied taste requirements its customers, particularly this coming Christmas season. Twinings targets institutional buyers such as hotels and offices in addition to the household consumers. This is because they are segments considered to be of less price sensitive and their taste is not based more quality consciousness the household consumers. Therefore, the company will seek to tie-up with the international hotel chains as well as multinational companies. The Twinings’ noticeable difference in brand advertising will in itself make its consumers to sit up and notice. As a result, the company will brilliantly engage with all its target audiences by chatting through various channels such as Facebook, YouTube and twitter. In doing so, it would appear as if Twinings has done a great task in extolling the virtues as well as the health benefits achieved from tea drinking. This will be an ad campaign for incredibly clever management of the company and for its long time survival in the tea production industry (Ferrell & Hartline 2010). Marketing strategies The core concept facilitating the design and implementation of marketing strategies, tactics as well as mixes in Twinings Tea Company, is the creation of an ideal brand image based on its reliable and wider marketing vision. However, the marketing team has discovered that implementation and control of the company’s marketing strategy needs a more solid and comprehensive as well as integrated use of the marketing-controls. Therefore, Twinings has focused on building a strong and unique brand image for its long-term marketing success. Positioning the products Twinings has over 300 years experience in the tea industry and has a widely respected and reliable blender for tea across in the whole world. The company operates in over 100 countries with a production of nearly 200 blends of tea. Internationally, Twinings is ranked the second largest tea brand. It is also considered as part of the £6.8 billion directed to Associated British Foods plc (ABF). Twinings is globally recognized for all its premium products. The management plans to leverage the company’s positioning for to operate in Pakistan. The Twinings’ powerful brand positioning makes its consumers reliable to its products. Since the tea market is becoming increasingly competitive, the marketing management of Twinings has sought to distinguish the company’s products from its competitors. Through their ever-growing range of the healthy teas which are packed full of anti-oxidants as well as all sorts of other products that the company encourages its clients to consume, Twinings has focused its advertising strategy very definitely to include the female market. It is a delicately and animated advert accompanied by an evocative cover message of the saying “Wherever You Will Go.” This creates a dreamy as well as emotive mood where Twinings has cleverly picked up on its relationship with tea, while perfectly positioning itself for the female market (Thomadsen, R., 2007). It is important to argue that effective product positioning is determines effective marketing. However, irrespective of the position the marketing management attempts to create for a company’s product, it is only the position that a product occupies within its target audience’s mind that counts. Therefore, effective positioning must done on the basis of actual customer needs the existing market facts as well as the measurable capabilities of a company’s product. In addition, the product must be communicated precisely and more powerfully to the targeted audience (Frederikson 2007). Differentiation strategy Based on Porter’s Forces Model of Threat of new Entry, Twinings aims at having an edge over the emerging entrants through its well-organized procurement and distribution functions. The new flavour tea product will be differentiated based on brand identity as well as loyalty of customers within the tea industry. Twinings plans to launch different brands so as to increase its brand width, highly differentiating its tea products to increase the barrier to entrant. This is to promote Twinings differentiation strategy of producing teas in a range of different lines that includes organic and everyday tea, specialty tea, Fresh and Fruity in addition to providing products with the message of “Moment of Calm" as well as "Revive and Revitalize." The plan to change Twinings Earl Grey tea flavor will differentiate its product from the competitors because of its added lemon and more bergamot that will make it more wonderful and good tasting to consumers. The Twinings website is unique because it includes directions on how to serve teas as well as clear marks which reflects what teas do and safe from caffeine (Raphael 2011). The company will market its new flavor tea on the basis of regional preferences. Since Twinings provides details on how teas are produced, including growing, harvesting various species of tea as well as many interesting information on how to make tea. The newly created tea flavor will be consumed immediately given the ready information on how to use it and the resulting benefits. Budget Continuing to implement the strategy of presenting its newly flavored tea and other products as part of the life's little luxuries, Twinings has planned to break the $5 million out of a $6 million marketing budget to be spent on next month’s advertising campaign so as to promote the idea of a "tea break. The company will devote most of the time and expenses to sourcing as well as blending the finest, lemon and bergamot tea leaves within the 30 varieties to include new Sunset Rose and the Rose Bush herbal teas. The decision comes after Twinings Tea Company repositioned its brand last year as a way to appeal the younger and affluent consumers who perceive tea as their life's little luxuries. Therefore, promoting the consumption of a lemon and bergamot flavored tea, rather than relying on the Earl Grey tea attract more consumers of Twinings, and thus increase the company’s profits. Implementation and control of marketing planning The Twinings’ advertising campaign will involve communications tools that are critical in achieving its objectives, reinforcing the position of the company as an expert in tea blend as well as conducting tea blend education to evaluate how the new flavor performs. The marketing campaign will be evaluated based on Twinings' sales data, media analysis coupled with commissioned research. The main message in the advertising plan is the emphasis on the role played by Twinings in inventing of classic tea blends, highlighting the new blends, educating consumers as well as trade of the history and achievements, and sampling tea blends which are less familiar to consumers of Twinings Tea Company (Kotler & Keller 2009). The campaign is required to generate results in various groups of disparate audiences to include grocery trade such as buying executives as well as managers of larger stores, high end restaurants and hotels that deal in food service and able to provide opportunities for their consumers to the new blends, existing consumers comprising of the female as the main grocery buyers particularly those who are over 35 years, new consumers to include the younger female target in the ages of 25-35 years old and the news and food media. Advertising will feature different blend information for retail shops, women and lifestyle magazines to portray Twinings as the market leader and an 'expert blended (Philip 2011). Measuring of the objectives will be evaluated based on entry made to the tea consumer promotions and giveaways, the magnitude of client’s attendance at events and their feedbacks on the taste of new flavor of tea and other Twinings products. Additionally, message analysis of the media coverage and advertising analysis results will be highly considered. However, continuous evaluation of the strategic market plan will include leads generated from the marketing program such as direct marketing efforts, number of inquiries made in regard to advertising efforts made and the Internet leads. This is in order for the marketing management to stand back and determine whether or not the marketing plan is achieving the intended objectives, what can be learnt from the mistakes made and how to utilize the available resources to come up with a better plan for Twinings future performance in the tea market (Walker et. al. 2009). Strategies and tactics for launching products as well as executing the required tasks dominate much of the thinking attempts to compete and win a larger market share and customer base. Launching of new products requires careful planning and is an exciting, challenging as well as rewarding management role. Therefore, the ability to create powerful positioning and carry out strategic analytical exercises that do not directly contribute to tangible marketing output is the hidden force that underlies any successful product launch. As a result, a powerful brand as well as cautiously crafted marketing strategies only becomes effective through the positioning strategy on which they are based on (Hill & Jones 2007). Bibliography Frederikson, A.M., 2007, Strategic marketing planning: a grounded investigation, Journal of Marketing, 13(4), 56-58. Ferrell, O.C & Hartline, M., 2010, Marketing Strategy, Cengage Learning. Hill, W. L. C. & Jones, R. G., 2007, Strategic Management: An Integrated Approach, 7th ed., , Boston: New York, Houghton Mifflin Company. Kotler, P & Keller, K.L., 2009, A Framework for Marketing Management (4th Ed.), Pearson Prentice Hall. Kapil, S., 2009, Marketing Management: How to Create, Win & Dominate Markets, Global India Publications. Kotler, P & Armstrong, G., 2010, Principles of Marketing (12th Edition), Pearson. Thomadsen, R., 2007, Product Positioning and Competition: The Role of Location in the Fast Food Industry, Journal of Marketing Science, 26(6), 792-804. Philip, K., 2011, Marketing Insights from A to Z: 80 Concepts Every Manager Needs to Know, John Wiley and Sons. Raphael, T., 2011, Managing Product Variety and Collocation in a Competitive Environment: An Empirical Investigation of Consumer Electronics Retailing, Management Science, 57, 1009-1024. Walker, O.C.et. al, 2009, Marketing Strategy: Planning and Implementation. 3rd ed. New York: McGraw-Hill College Div. Read More