Marketing Strategy of Lipton Tea – Thomas Lipton: Lipton Tea British brand of tea named in honor of the creator Thomas Lipton and currently owned by Unilever was established as a small store situated in Glasgow, Scotland in the year 1871 by Thomas Lipton which by the year 1880, had increased to over 200 stores.
Sir Lipton Thomas then began traveling around the world to introduce new products in his stores. One of these items was tea. Recognizing the market demand for tea increasing exponentially on the European market in the mid-1890s, he bought his tea plants situated in Ceylon, Sri Lanka, and then packaged and sold Lipton Tea for a low price by offering it in small packs. Lipton Tea later also went on to become a huge hit within The United States.
Unilever bought Lipton Tea later in a deal that was concluded through a variety of different transactions. Unilever began with the acquisition process of the United States and Canadian Lipton business in 1938, it was completed in 1972, with the purchase of the rest of the world Lipton company through Allied Suppliers.
The Joint venture was established by Unilever in 1991 along with PepsiCo, and Pepsi Lipton Partnership to market the teas that are ready to drink throughout North America. Another joint venture called Pepsi Lipton International (PLI) was formed in 2003 to serve a variety of markets outside of the United States. markets that were later extended to a wide range of European markets in 2007.
Did You Know About Lipton Tea?
Company : Lipton Tea
CEO: Alan Jope
Founder: Thomas Lipton
Year founded: 1890
Headquarters: Hoboken, New Jersey
Annual Revenue: 900 million dollars
Products & Services: All Products, Navigate to Black Teas, Green Teas, Herbal Teas, Fruit Teas, Matcha Teas, Benefit-Led Teas.
Competitors: Snapple | Nestea | Twinings | Nescafe
Lipton Tea Fun Fact: Lipton is a British brand of tea, owned by Unilever. Lipton was also a supermarket chain in the United Kingdom, later sold to Argyll Foods, after which the company sold only tea. The company is named after its founder Sir Thomas Lipton.
Marketing Strategy of Lipton Tea – Segmentation, Targeting, Positioning
Lipton Tea adopts a flexible segmentation strategy that offers a broad range of products it provides. Its geographic segments of market segments are according to states, nations regions, cities, countries, and the neighborhood.
Demographic segmentation of Lipton is occupation, age, and income as consumers are closely tied to factors like both income and age.
In the psychological segment, consumers are classified by their personality, lifestyle, values, and their social class.
Lipton uses Undifferentiated Marketing or Mass marketing because it focuses on equal advantages for all and adheres to only one offering method. The goal is to be a market leader in the future.
Geographically Lipton has a significant number of customers from the USA, India, and Europe. The demographics and psychographics of the customers vary from middle-class to high-income categories.
Lipton was originally marketed as a tasty high-end, elegant, and premium tea that was marketed to global consumers, with their ads echoing this concept. In particular, all the actors and props in the ads were from abroad. Repositioning specifically, then, helped target the Indian customer using an Indian dialect.
Lipton Tea Mission Statement
“To meet the everyday needs of people everywhere, to anticipate the aspirations of consumers and customers, and to respond creatively and competitively with branded products and services which raise the quality of life. Also, Lipton drives to serve consumers uniquely and effectively and attract and develop highly talented people, who are excited, empowered, and committed to delivering double-digit growth”
Lipton Tea Vision Statement
“To provide the best quality tea has made Lipton the number one tea in the world today. Lipton offers an option for tea lovers to enjoy their favorite drink excitingly and refreshingly”.
Lipton Tea Tagline
Lipton tea – Lipton. Tea can do that.
Marketing Strategy of Lipton Tea – Competitive Advantage
Being among the top brands in the tea industry throughout the years, Lipton has been adamant in its strategies for marketing to gain an edge over its rivals. The brand also has the benefit of the range of items it has in its collection.
The products it sells include
- Yellow Label Tea
- Lipton Green Tea
- Lipton Darjeeling Tea
- Black Iced Tea Peach
- Classic K-cup pack
- Matcha Green tea and Mint
- Green Iced Tea Citrus
- Berry Citrus
But, certain domains can be explored by the organization to prevent the decline in markets due to the entry of many regional players into diverse domestic markets. This can be achieved by addressing these issues:
Low Foreign Sales :
Lipton over the last few years was unable to establish a foothold in international markets due to the entry of foreign players. About half of Lipton’s sales all over the world are derived from the US market, while other regions contribute the remainder which isn’t a great proportion, and therefore Lipton should adopt aggressive marketing strategies to boost its share in other markets.
Inability to meet the demand from large segments :
While its competitors like Nestea which is targeting all of the population, Lipton continues to focus only on its market segment as it does not define its actual market leading to more flexible marketing strategies.
Insufficient foreign manufacturers:
Lipton must import tea raw materials from all over the world due to the lack of facilities and factories in the foreign market which means it depends on the political stability of other countries which results in changes to the marketing strategies of companies in response to the aforementioned factors.
Some of the biggest international, as well as local competitors to the brand, are:
- Teley (Global)
- Dilmah Tea (Australia, New Zealand, and Sri Lanka)
- KaziKazi Tea (Bangladesh)
- Brooke Bond (India and Pakistan)
- Tata Tea Limited (India)
- Punjana (Europe)
- Yorkshire Tea (Europe)
- PG Tips (Europe)
- Typhoo Tea (Europe)
- Imperial Tea Court (US)
- Arizona (US)
- Nestea (US)
- Upton tea (Europe)
Marketing Strategy of Lipton Tea – BCG Matrix
The company has Lipton Clear and Yellow Label teas continuing to hold their position in the Star and Cow segment globally the majority of the profits for the company comes from these brands.
However, Lipton Iced tea is still a mystery, it appears to be a concern for the brand, Lipton honey and tea is something the company seems to be thinking about the future of Lipton tea.
Marketing Strategy of Lipton Tea – Distribution Strategy
With its presence in more than 100 countries, Lipton Tea enjoys a solid distribution network with its partner PepsiCo which is present in nearly every country.
Lipton’s Joint Venture with PepsiCo has helped the brand establish its roots in several of the initially hostile markets. Lipton Pure Leaf and Brisk appear to have grown lots of ground, particularly across North America.
Marketing Strategy of Lipton Tea – Market Analysis
Lipton remains the market-leading brand across the US with a market share of 26.5 percent and Arizona tea is a distant third with a 21.5 percent market share.
In UK Tetley has the top position with a market share of 27%, followed by PG tips, which has 24%. Lipton was ranked fifth in the UK market, with about 10 percent market share.
In India Lipton has an estimated market share of 15%, which is equal to its mother Unilever Brand Brooke Bond, and is the second-largest behind TATA tea.
Marketing Strategy of Lipton Tea – Customer Analysis
Lipton Tea targets tea lovers with a Middle- to High-class income across all age categories. Through its broad selection of teas, such as Iced tea Lipton also reaches out to children aged between 8 and seniors aged 70 and over.
Marketing Strategy of Lipton Tea – Promotional Strategy
With a brash marketing approach, Lipton has positioned its drinks as a healthy and nutritious brand with a range of promotions that highlight its key attributes like quality, affordability, and user ease of use. Lipton has positioned itself as a friendlier brand to people who buy its products with slogans like “Direct from the tea gardens to the teapot”, “100% Natural and 100% Real tea” and “Lipton gets into hot water more than anything”.
The brand’s advertising campaigns were launched and broadcast on radio, television magazines, newspapers, as well as social media sites.
Axing on the famous endorsement plan to attract people to the typical Indian mass market, the brand has signed actresses Shraddha Kapoor as well as Anushka Sharma to work on Lipton Green Tea campaigns in India as well as the actor Hugh Jackman to promote Lipton Ice Tea across the globe.
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