International Strategic Marketing

Project

OVERVIEW OF TEA SHACK

Submitted by:
Cheshtha Chhabra
Debipriya Saikia
Anubha Aggarwal
Swapnil Jain

Introduction
Overview of Tea Shack
Tea Shack is India's most loved tea hub for the youthful and the middle aged. In Asia, Tea Shack
is the third biggest regarding finest tea leaves. There are additionally 10000 little producers
whom we source from and who make us who we are and we're happy to be a piece of their lives.
Prominently known as Tea Shack, we Endeavour to give the best experience to our visitors.
Initially, we got the idea of bistros to India! Tea Shack provides the best ambience to seat, talk
and listen to discussions, hold short gatherings etc. .
All our tea leaves are plucked from the best harvested tea gardens of Darjeeling to have the
ability to fulfill the best characteristics of each mixture that we brew. That is the reason we leave
here some bit of what we charge to offer for the most part.
Tea shack is really the pioneer in creating, trading, retailing and conveying world-class tea. It
has placed assets into imaginative work and joined the adjusting successfully to improve the
progression of diverse tea fusions and extend its passages.
Hence, we have decided to expand the best brewing experience to the rest of the world by first
entering the Norwegian market.

Business Environment analysis

The Norwegian market channels are relatively simple. T h e l a r g e s t c h a n e l
f o r t e a d i s t r i b u t i o n r e m a i n g r o c e r y r e t a i l e r s . The two brands
capturing the majority market share are lipton and twinings with 17% and 39%
respectively. While there are two strong traders in the market, they have little
interest in sustainable tea. There is increasing trend among manufactures to deal
more directly with origins, sometimes through European brokers There are also
approximately 400 specialty retailers. Most of these are covered by the small and
medium manufacturers. The high-end or specialty trade is well developed through
quality brewers and a widespread network of retailers and tea cafes selling high

quality tea flavours. Organic tea is primarily sold in grocery retail. Both flavoured
tea and organic that are distributed through the mainstream grocery channels are
expected to grow, although at a different pace, of about 5 percent for organic and
well over 10 percent for fair trade.

Trends in the Norwegian market

Tea in Nigeria saw a total volume growth of 8% in 2015. Volume sales grew steadily
over the review period due to an increase in formal work culture and the marketing
activities if key players. All major manufacturers now offer both organic and fair
trade tea. Tea is served in an increasing number in offices, ai conferences and other
formal business meetings. Consumers taste and preference are becoming more
adventurous and site green tea flavor combinations as one of the best trends
along with loose tea and large tea leaves. Industry has a positive outlook for fair
trade tea over the next few years, expecting reasonably strong growth of between 10
and 15 percent per annum. Expectations for organic are more muted and while
some expect modest growth, others project reasonably flat sales.

Constraints in the Norwegian market

The few dominant retail grocery chains are price-driven and have a
conservative space management policy. If sustainable tea do not gain sufficient
market share their life on the shelf may be cut short. Although these products
currently have broad distribution, no one, including the stores carrying them, has
made many marketing efforts.

Political-Legal Environment
Government type:constitutional monarchy

 Legal system:mixed legal system of civil, common, and customary law; Supreme Court
can advise on legislative acts
Head of government: Prime Minister ERNA SOLEBERG
Cabinet: State Council appointed by the monarch with the approval of parliament
Main political party:Christian People's Party, centre party, Labour party

As stated by MarketResearch.com (2008), tea come in top import item in the

import basket which makes the tea industry very vulnerable towards foreign trade
regulations. Overall stability being granted, the political situation in the Norway is
probably less concerning for the tea industry; however, the respective situation in
the major tea growing countries might have a more imminent effect on the
industry with regard to green tea supply and price.

Economic Environment
GDP:$420.95 billion
Inflation rate:2.3%
Export: petroleum and petroleum products, machinery and equipment, metals, chemicals,
ships, fish
Import: machinery and equipment, chemicals, Tea, metals, foodstuffs
Per capita income: 80749$

 Main Industries :petroleum and gas, food processing, shipbuilding, pulp and paper
products, metals, chemicals, timber, mining, textiles, fishing

Dealing with a commodity, the tea industry in the Norway is only marginally
affected by economic forces such as GDP Trends, interest rates, inflation, or
energy price and availability.

Socio-cultural Environment
Socio-cultural forces have undoubtedly the most noticeable influence on the tea
industry. As stated by MarketResearch.com (2008), consumers seek higher quality
tea, thereby increasing the demand for the higher priced specialty tea not only in
the newly revived tea house culture but also at home.

Regulatory Environment

In 1972, Norway was the first country in the world to have a ministry at cabinet level with
special responsibility for environmental matters. National environmental governance in Norway
is organized in a hierarchical manner. At the top is the Ministry of the Environment which is the
leading government institution regarding environmental issues. Much of the work is delegated to
a set of subordinated directorates:
Climate and Pollution Agency
Directorate for Nature Management
Directorate for Cultural Heritage
Norwegian Polar Institute

 Norwegian Mapping and Cadastre Authority

Norwegian Radiation Protection Authority

Nature of Demand
NORWAY TEA MARKET
Norways small market (population 4.5 million) consumed about 40,000 tons of tea.
Although imports showed a substantial increase over the previous year, much of this
can be credited to stock build-up to take advantage of lower prices rather than
significant consumption growth. Over the last decade total imports averaged
45,000 tons of green tea equivalents but this number has trailed down in recent
years and so has per capita consumption. Consumption growth has been increased by
8% in 2015.
The market seems to be fairly transparent and well-organized in regard to certification
and there are not many competing labels or claims of sustainability. The
national market is fairly well educated especially concerning ethical commerce,
an issue that has recently been raised by retailers. None of the roasters finds that
certifications are confusing or a problem.
TRENDS
Tea is seeing growing interest from consumers in Norway with 8% value growth in
2015. Despite macho flavour combinations such as Liptons Green Gunpowder, tea is
still seen as a feminine drink mainly favoured by young, urban women.
COMPETITIVE LANDSCAPE
The largest channel for tea distribution remains grocery retailers and this is where the
two main brands, Twinings and Lipton, are sold. The wide availability and customer
base mean that, as in previous years, Haugen-Gruppen AS and Unilever Bestfoods,

responsible for Twinings and Lipton tea respectively in Norway, also dominated sales
in 2015, recording respective value shares of 39% and 17%.
PROSPECTS
The interest in health, wellness, and premium products is expected to see further
growth over the forecast period. The biggest developments over the forecast period
will be seen in herbal/traditional medicinal tea, followed by loose black standard tea,
and organic fruit/herbal teas with Loose teas, large tealeaves, and more unusual teas
such as the Japanese green tea powder
RETAIL PRICE
One company dominates organic tea sales in India and while their organic t e a is not cheap
it is positioned to sell at a price that is 10 percent lower than their premium brand. Because
Norways retail prices for conventional tea are relatively high the price differences between
them and fair trade are not pronounced. .

SIGNIFICANT SUPPLYING COUNTRIES FOR SUSTAINABLE TEA

The primary suppliers for these markets have been Mexico, Brazil and India. Mexico
and Peru are the dominant suppliers.

SWOT ANALYSIS
Strength
Excellent brand name and brand visibility
Huge young crowd as target group

Excellent ambience and service

It produces/grows the tea it serves hence reducing the cost
Products of extremely good quality and taste.

Weakness
Crowd management
Improper sitting arrangement
Lacks strength to maintain brand loyalty
Follow the competitor strategy

Opportunities
Introduce cheaper versions of tea
Tap the smaller towns/cities
Merchandising.
Tie ups with other companies for promotion
Tea cafe industry is one of the fastest growing industries in Asia.

Threats
Entry of foreign players like Twinings
Large unorganized market
Competition with other tea cafes.

5.0 MARKETING STRATEGY

Entry strategy:
For entering into Norway tea market we are opting for wholly
owned subsidiary in Greenfield investment. We are already a
established firm in our domestic country and we are 3 rd largest in
Asia and also in Norway there is no as such a major tea producing
firms.
Target Market Analysis
Demographics
Merely 21% of the 18-24 year olds actually consume one or more cups of
green tea per day compared to 70% of those 65 years and older. While
this research is based on at-home consumption, another article by
Research agency indicates a similar trend with regard to out-of-home
consumption. Although seven out of ten consume their g r e e n t e a
at least occasionally outside the home, those between 55 and 64 years of

age are considerably more likely (47%) to do so than the generation of

18 to 24 year olds (75%).
Green tea consumption varies greatly by ethnic origin. While more than
65 % of the white population in the Norway drinks green tea on a regular
basis also exhibits gender variations with regard to tea consumption with
women drinking about half a cup of tea more per day than men (1.9 cups
compared to 1.4 cups).

Psychographics
Tea is no longer simply tea, but rather a herbal tea or organic tea. With
increased tea education, the quality of tea has become more important to
the consumers and they are willing to pay the price for it. The focus
group discussion revealed that consumers will rather sacrifice quantity
than quality when it comes to their tea indulgences. In addition, mentions
the increasing health consciousness of consumers who seek health
benefits in the products they consume in addition to taste and quality.
Psychographic trends for the East Central and West Central region of
the Norway when stating that adults in the East and West Central regions
are more likely than adults. who are very loyal in their consumption
behaviors .

Geographic
The observation of tea shop locations suggests that tea shops are mostly
found close to residential areas, strip malls, college campuses, or
downtown/business areas. Most t e a shops rely on the foot traffic these
locations provide and recruit their customers from that..
Research findings that show how out-of-home tea consumption differs by
geographic region. People in the West are at 42% most likely to quench

their tea thirst at a specialty tea shop while that is the case for only 27%
of Southerners. People in the Midwest prefer to drink their tea at a diner
or sit-down restaurant (55%) While they will certainly visit a more remote
tea shop in case they had business in that area, they pretty much agreed
that they will not commute for more than two miles for the sole purpose of
going to a tea shop

6.0 MARKETING MIX STRATEGIES AND TACTICS

Product Plan
The objective for Tea Shack is to streamline all of the products. Tea
S h a c k h a s to make its product the key element; the key element is the
contribution of awareness and attitude in fulfilling the positioning to deliver
on marketing objectives. Tea Shack has to be recognized as a specialty tea
shop that offers variety of herbal tea.. By making Tea Shack

being

recognized as one dynamic institution the product line has to be

streamlined and promotional tactics have to be integrated.

Packaging Plan
The package bears the responsibility of holding or maintaining our product
and communicating the essence of our brand.. The packaging will
generate awareness and drawing attention to the product right at the point of
sale. We will have our logo on the 14oz, 16oz, and 18oz to-go cups-along
with tea quotes, tips, and recycled paper logo. The cups will be recycled
to represent that our company has a strong environmental and social
commitment. The packages are designed to protect the product as well,
while emphasizing the new logo scheme..

Pricing Plan

Tea shack may be wants to stand out in the tea industry, so I have to make
prices unique.. Standard size cup of tea is about the same price as one of
competitors,. Selling a Tea Shack at a great price will make tea stand out
from the competition. What Tea S h a c k

will do for a competitive

advantage will sell their medium sized cup lower than its competitors.. In
order to have a successful pricing plan, then Tea Shack

must review

pricing every quarter. It has to measure with competitor pricing and

external pricing to stay on edge. Tea Shack goal will be to hold their
competitive advantage .

Promotion
To create awareness our company will be offering tea bags with a cup of tea to
our every first customer.
Advertisement through media channels, banners, distribution of free samples
in the retail stores.
Additional commission to retailers to increase the sales volume

Distribution Plan
Tea Shack channels of distribution will be its physical stores .Tea shack
will be leaning towards a pull strategy; a pull strategy involves marketing
to the ultimate purchaser or directly to consumers to build demand,
forcing the outlets to stock the product . The stores of course will be full
serviced, where anyone can get a Tea Shack at a great price! A future
distribution channel that we will like to implement will be Tea Shack
vending machine. To create awareness our company will be offering tea
bags with a cup of tea to our every first customer.

Conclusion

As my report based on launching of tea shack in Norwegian market

from the whole study on the various parameters it is not easy to enter in
new market without any research and study of that market. So after study
I came to know that in Norway Tea Shack
Reason of selecting

this

country is,

have good opportunities.

Norway is

big

market

of

T e a , per capita consumption of Tea is 10.7 kg so I decided to select this

country.