Principles of Marketing 1

Tapal
Danedar
Ahsan Zafar
Ali Raza Arif
Areej Arif
Maham Usman
 Principles of Marketing 2

STATEMENT OF CONTRIBUTION

Our Second assignment regarding our chosen brand, Tapal Danedar was a majorly
joint effort on the part of all the group members. Initially, Maham had the contact at
Tapal and so we had chosen this brand. We had interviewed the Assistant Brand Manager
for our first assignment and we also asked her questions regarding this assignment. We
had two group meetings in which we discussed what each group member has to do and
allocated 2 questions to be answered by each group member (8 questions between 4
members). We conducted research online collectively again and utilized some previously
found statistics too. Areej typed the out the interview notes which helped all group
members in answering the allocated parts of the assignment along with this statement of
contribution. Maham made the cover page, table of contents, and formatted the entire
report when it was complete. Ahsan and Ali proofread everything and got our assignment
binded.
 Principles of Marketing 3

TABLE OF CONTENTS
Product attributes 4

Brand life cycle stage 6

Market segmentation of the brand 8

Type of product 9

Factors considered while pricing and pricing strategy 10

Distribution channel 11

Designing the channel 12

Meeting the challenges in facing channel members 14

Bibliography 15
 Principles of Marketing 4

Product Attributes

Tapal Danedar and Family mixture are the largest selling tea brands of Pakistan.
The brand was born from its inherent granular ingredient. Currently, the brand name has
become generic and was even used later by Lipton, after which Tapal launched its own
campaign called Asli Tapal Danedar. In this way, the brand now represents a different
product category.

Danedar’s features add value to its product because the blend consists of well
made premium quality Kenyan BP1s (granules). Each component of Danedar blend is
carefully selected to provide a lovely looking leaf appearance that is neat, black and
grainy. Tapal well understands the taste of the tea drinkers in the country and the reason
for the success is that they have localized the taste according to consumer needs wants
and preferences. Danedar brand is known for its distinct taste and aroma and since there
is no real substitute for it, it remains the most popular brand of the country and also of
Tapal’s product mix.

As far as product style and design is concerned, Tapal Danedar is known to be

the leader in innovation and has taken the lead in a number of areas in the tea industry. It
was not only the first brand of its kind but was also the first one to introduce soft
packaging in the country. Interestingly enough, this soft packaging was changed in July
2008 into hard packaging to offer a unique experience to consumers and a new dimension
to the tea market and also the brand. The style of packaging changed to accommodate
Punjab, where people prefer to display hard packs for aesthetic appeal.
Tapal Danedar’s style and design is also something all Pakistanis can relate to.
“Laal hai toh Tapal hai” is their motto which explains that red is the color which
translates our happiness, joys, relations and emotions. It stands out as the color of
Pakistani folklore and customs, weddings, festivity and sentiments. Tapal did extensive
marketing research and then came out with this vibrant red eye-catching design. Even
through its advertisements it explicitly illustrates how the color red is symbolizes
togetherness of the nation. From this we can easily conclude how Danedar’s values,
features, design and style is compatible to its customers and their lifestyle.

“Lal hai to
Tapal hai”
 Principles of Marketing 5

Quality is of utmost importance, because at its facility, tea is blended and packed
in hygienic conditions, untouched by human hands whilst the soft packing technology
keeps tea fresh and packaging costs economical. Its success could be gauged by the fact
that after Tapal many other tea companies also started using soft packaging. Tapal
Danedar’s assistant brand manager while briefing us said “Tapal Danedar is the pioneer
of “granular tea” in Pakistan. It has not only sustained its market leadership by providing
a consistent quality of tea that brings in superior taste, aroma and colour but has also
looked for continual improvement as the recipe for success”.
Tapal Danedar has never compromised on quality and this has been the motto at
Tapal since its inception. It is due to this commitment which Tapal Danedar continues to
grow that its brand equity gets stronger by the day. In December 1997, Tapal Tea became
the first Pakistani Tea Company to earn the ISO-9001 certification: a symbol for the
highest international quality standards. Again in December 2000, Tapal acquired the
ISO9001: 2000 certification, making it one of the first few companies in the world to
achieve this, the ISO9001: 2000 certification system consists of requirements for
environment improvement, concepts of TQM (total quality management) which is an
approach in which all the company’s people are involved in constantly improving the
quality of product, service and business process, with major emphasis on consumer
requirements and satisfaction. For Tapal and its brand Danedar, customer-driven quality
has become a way of doing business.
Tapal’s research and development is one of the best in the country as blending
and tasting and developing new blends according to consumer taste in not at all an easy
task and Tapal has mastered this art. Danedar brand known for its localized taste and
great taste was the masterpiece that came out of Tapal’s R & D department.
It is a research-oriented company. It conducts various researches in the area of
retail audits, consumer behavior, media planning and product development. This research
is used for continual improvement in product quality, brand positioning and
communication according to the changing requirements of the consumers. This I would
consider one of the greatest attributes of the brand. Tapal ensures that taste aroma and
freshness is never compromised that is why Danedar tastes exactly as expected and is
able to satisfy the huge markets it caters.
 Principles of Marketing 6

Life cycle stage of Tapal Danedar and corresponding strategy

On the map of
product life cycle,
Tapal Danedar is in
maturity stage.

After family mixture’s success the company innovated further and an entirely new
category brand was launched with the name of Tapal Danedar. It was an instant success.
Now it has been quite sometime since Tapal Danedar came out. It has enjoyed great
popularity among the masses and the term Danedar has almost become generic for tea.

Tapal Danedar is currently at its maturity stage on the product life cycle graph.
Large players such as Lipton and Tapal have established their brands in the market and
are enjoying huge profit margins. Now they are looking towards product differentiation
and multi segmentation because consumers are now more taste conscious and looking for
variety available to them in a tea market.

Tapal Danedar is a product at its maturity level so they are finding new multiple
segments to differentiate themselves. However, in this phase market share growth is at
the expense of someone else’s business, rather than the growth of the tea market itself.
This period is the period of the highest returns from the product. Tapal Danedar that has
achieved its market share goal enjoys the most profitable period.

Pricing and discount policies should be changed in relation to the competition

policies i.e. pricing moves up and down accordingly with the other tea brands and sales
and coupons are introduced in the case of consumer products. Promotion and advertising
of Tapal Danedar should be done in a way that relocates from the scope of getting new
customers, to the scope of product differentiation in terms of quality and reliability.
Brand Danedar has done this and has also succeeded in a creating an image for itself and
differentiating as the brand of the people of Pakistan through its ‘laal hai toh Tapal hai’
 Principles of Marketing 7

advertisement campaign. Therefore, currently Tapal’s strategic goal would include

defending market position from the competitors and improving the product so that major
players like Lipton are not able to grab the market share. Moreover, increasing the size of
pie is also a good idea because that means increasing the market of tea drinkers. Supply
chain goal at this maturity level would be general and reinforced distribution with good
supply to the middle men but with low margins of profit for them.
 Principles of Marketing 8

Market segmentation

Tea is something Pakistanis are very specific about. Different Geographic

locations in Pakistan prefer different types of tea. Some areas prefer dust tea whereas
other areas prefer Extra Strong tea. Tapal Danedar has positioned itself as a general
purpose tea hence it is preferred mainly by audiences belonging to urban areas. Currently
Danedar has a growing market share particularly due to its popularity among the urban
youth.

The people who consume other brands under Tapal are considered very loyal to
their respective brands, because they are rarely found to switch brands.

Pricing is indirectly connected to the market segments of Tapal Danedar. Pricing

can be easily be changed in need based SKUs such as Teabags because people who buy
tea bags are more considerate of the convenience factor rather than the price factor.
Whereas prices of other SKU’s such as sachets cannot be changed even slightly because
they target price sensitive segments of the market.

Marketing Strategy also differs across demographics. In the northern part of the
country, mainly in the rural areas of Punjab and NWFP, a BTL approach is adopted with
on-ground, direct activities as well as personal selling strategies. In the southern
demographic an ATL approach is adopted with TV advertisements, billboards, radio,
newspapers etc.

Currently Tapal Danedar has positioned itself as an all-purpose quality brand.

With its advertisement directed towards traditions and family values and their deep-
rooted links with tea and tea-time. Moreover the Corporate TV advertisements of the
Tapal Company set Tapal as a patriotic company with deep-rooted national values. Even
our questionnaires showed that the majority of our random sample participants were
attracted to Tapal because of its Pakistani Identity Type of Product (Tapal Danedar).
 Principles of Marketing 9

Type of product

The significance of tea in the eyes of its consumers varies across the type of
consumers. What tea means to a youngster differs from what it means to a household of
tea “addicts”. Another way to perpetuate its product life cycle was the introduce tea bags
backed by the motto ‘differ tastefully’. This was appealing to the working class segment
that does not have time to brew tea and consists of ‘minute managers’.

“These days,
people are
always on the
go and hardly
have any time
to spare. For
those who have
a distinct
preference…”
Tapal newsletter

Many students consume tea near exams because it is a good source of caffeine. It
helps them to relax and keeps them energized and awake. For students however the brand
or quality of the tea doesn’t matter much because all they want is a quick energizer drink.
For this segment tea becomes more of a convenience product.

For many families, where tea is consumed everyday and becomes a regular part of
the household groceries it can be classified as a shopping good. In families the consumers
are more particular about taste, quality and price of the tea. Hence a lot of effort is put
into the selection of the proper tea. Some families may like strong tea while others may
value color.

Even though basically tea is a convenience product; it can be classified into other
categories based upon its image and positioning among the users.
 Principles of Marketing 10

Factor considered while pricing and pricing strategy

Various factors need to be considered while pricing a product. The factors

considered by Tapal Danedar are mainly cost of the tea, demand, purchasing power of its
consumers, economic conditions (usually they promote the product through added
convenience such as “20% extra tea” or “10 teabags free” and rarely through lowering of
prices) and company’s profits, not necessarily in the same order.
According to our contact Saba Ihsan, there exists “sure shot consideration for cost
and most of our cost is due to raw tea being an imported product, and the pressures from
the international community”. Tapal charges a premium of 2-4% on all its packs. This is
what we would call a cost plus pricing strategy. The company emphasizes on Tapal
Danedar being an International quality top brand of tea and it is marketed as not only a
product available for the masses but also as a premium and “top of the line” product.
Tapal Danedar is the only tea brand in Pakistan which caters to SEC A + to SEC D.
All brands of Tapal have prices similar to one another despite offering a
totally different product; Danedar, Dust, Family Mixture, and Tezdum. The premiums on
all packs are identical too according to our contact Ms. Saba Ihsan. As Tapal specifically
caters to different segments of the market its prices are based on its effective value to
customers relative to other products. Tapal follows perceived value pricing as all its
brands deliver the value that they promise in their value proposition.

Tapal Danedar has various SKUs to facilitate its SEC C and SEC D consumers.
Sachets come in up to 3 sizes and all are priced keeping in mind the SECs spending
patterns. Our contact mentioned that majority of Tapal Danedar consumers are from
middle and lower income groups so the brand has to take care of price sensitive
consumers as well. A 200gm pack of Tapal Danedar costs as low as Rs. 80 whereas
Lipton; Rs 89 and Brooke Bond Supreme; Rs. 88. For Danedar, come categories (Tea
Bag) has to be priced accordingly. While these are perceived to be a luxury and
convenience form of tea consumption, Tapal Danedar’s teabags are much cheaper than
Lipton’s or Tetley’s. Ms. Sana told us that premiums may increase on higher quantity
SKUs but it is the sachet packs of which they cannot change prices of because they
usually have very price sensitive consumers.

Tapal Danedar does not implement location based pricing. Even though our
contact was adamant about her views that Danedar is popular among the lower classes
too, we feel that it does not cater to the rural areas of NWFP and Baluchistan where
firstly, people prefer dust tea and secondly, they want inexpensive tea in the unbranded
form as it gives them the chance of smelling and looking at what they are to buy before
paying for it. However, Tapal Danedar has practiced various market penetration
strategies and intensive distribution whilst focusing on the attributes of its tea as well as
packaging.
 Principles of Marketing 11

Marketing distribution channel

Tapal Danedar has a wide distribution network linking various intermediaries

which perform assorted functions. Distribution plays a significant role in the marketing
mix because it delivers a product to its target market and is a liaison between the
manufacturer and the final consumer.
Distributing or Marketing channels overcome the time, place and possession gaps
that separate goods and services from those who need or want them. They are sets of
interdependent organizations involved in the process of making a product or service
available for consumption. The manufacturers supply the distributors with packaged tea
and the latter is to supply tea to wholesalers and retailers.

Tapal Danedar is distributed through a conventional marketing channel that

comprises of a manufacturer, distributors, wholesalers, and retailers. These perform the
important tasks of information dissemination, negotiation, ordering, financing, risk
taking, storage, and promotion. Channel members can influence one another but do not
have significant control over one another.
At the moment, there are 14 distributors working simultaneously in Karachi.
According to our contact, they never face any freight issues as much as they face issues
regarding cost of the tea itself! One of Tapal Danedar’s goals is to build a long-term
partnership with its intermediaries that will eventually be profitable for all channel
members.
 Principles of Marketing 12

Designing the marketing channel

Analyzing customer needs

Manufacturers face many complex decisions when designing a marketing
channel. As the channel forms an essential part of the customer delivery network, each
channel member is supposed to add value for the benefit of the customer. Availability is
important because Tapal consumers prefer to buy from closer location. At first, this
special granular tea was only available in Jodia Bazaar and Kharadar, but because of
growing popularity, the brand was then sold through retail distribution.

Setting channel objectives

Much of the marketing channel, particularly in above-the-line and below-the-line
advertising depends on the nature of the target market. As Tapal is a large organization
competing with multinationals such as Unilever and Tetley, it has the resources to
establish a wide distribution network with many distributors. In the tea market, Tapal
Danedar now has a share of 30% with a production of 170,000 tons. Syed Haroon Rashid,
GM, Tapal tea states that Tapal tea’s market ranges from Karachi to Rahim Yar Khan.
For example, recent examples of BTL campaigns are the Chai Banao, Dhoom Machao, in
which marketers travelled across the nation to discover how people related to tea. The
marketing channel for Sindh and Karachi is relatively different because it focuses more
on ATL marketing. On the other hand, there is more BTL marketing in Punjab because
consumers towards the north prefer more face to face interaction. Facing competition
head-on, Tapal prefers a wide distribution outlet that is shared by its competitors, which
include Lipton, Supreme and Tetley.

Identifying major alternatives

Tapal follows the traditional channel of importing tea from Kenya, producing it,
distributing and transporting to retailers:

Raw materials Tea is Tea sent to

from Kenya manufactured wholesalers

Consumers buy
Retailers
tea

The cartons of packaged tea are then sold to wholesalers who sell it to retailers
and the Retailers usually have a 15% margin. Tapal team performs the vital task of
research, survey, evaluation, financing negotiation and payment. Tapal’s intermediaries
form a cohesive relationship. There, rather than traditional value delivery network, other
alternatives for Tapal would include a Corporate Value Management System, where
Tapal possesses its own retail outlets or an Administered VMS that means collaboration
with distributors for better marketing. Lastly, another of Tapal’s options may be contracts
between distributors to encourage long run stability.
 Principles of Marketing 13

However, based on an economic criteria, and Tapal Danedar being a well

established convenience brand bought through habitual buying behavior, it is better to
maintain the traditional network in order to actively face competition on the shelves of
supermarkets, general and convenience stores.
As far as Tapal’s international channel is concerned, a major part of the
distribution channel involves importing the fine granules from Kenya, which means
greater uncertainty and fluctuation in prices.
 Principles of Marketing 14

Meeting challenges of distribution

In distribution and sales, Tapal, Brookebond/Unilever and Tetley have distinct

distributors. 14 distributors work simultaneously, ensuring that the demands are met with
and there is smooth flow in the channel from the manufacturer all the way to an
individual customer. Qiji enterprise and sales promoters are distributors for Tapal and all
its brands. In fact, Mr. Mohammedi Miabhoy, COO of Tapal was responsible for setting
up a sales channel in Punjab and NWFP in the 1990s.

The distributors are chosen after careful analysis of the financial background and
public relations. Then, the distributors are provided with a thorough description of the
network and the costs that will be incurred. If the distributor agrees, the contract is signed
and the condition is that the distributor needs to be brand-loyal, pro-active and cannot
deal with other tea companies, or the contract will be terminated immediately. The
contract states that the distributor or Tapal can nullify the contract after a one month
interim period. The area of distribution itself is divided in accordance to north and south.
 Principles of Marketing 15

Bibliography

1. IOANNIS KOMNINOS PRODUCT LIFE CYCLE MANAGEMENT Electronic

Engineer, B.Eng M.Sc.(Eng)

2. Recommended Plan for increasing Tapal ICE tea’s sales

<www.scribd.com/doc/9404824/Report >

3. “ANALYSIS OF THE MARKETING PLAN OF TAPAL TEA MAINLY FOCUSING ON

TAPAL DANEDAR”
<http://www.amcy5.com/index.php?option=com_content&view=article&id=33:sample-
project-on-tapal-tea&catid=23:marketing-projects&Itemid=3 >