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Brand Attractiveness in Packaged Tea Industry: Local, National and Global Brand*

CASE STUDY, BRAND MANAGEMENT
ET Cases - GSMC, 15 Pages

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Brand Attractiveness in Packaged Tea Industry: Local, National and Global Brand

 

Morning starts with a cup of tea for millions of people around the world. In India, tea is a staple beverage without which a day is impossible and incomplete. Tea, in India, was first introduced for commercial production by the British. India has retained its leadership over the tea industry for the last 150 years. The market size in India is estimated at INR 10,000 crores with a penetration of more than 90% in the domestic market1. This industry provides employment to more than 1.1 million Indian workers and almost half the workforce constitutes of women. Indians take a lot of pride in their tea industry because of the pre-eminence of the industry as a significant earner of foreign exchange and a significant contributor to India’s GNP. The three prominent tea-growing regions in India are Darjeeling, Assam and Nilgiri. While Darjeeling and Assam are located in the North East regions, Nilgiri is a part of the southern region of the country.

Tea Industry Background

Key Players in the Tea Industry

Being the oldest industry, a large number of players operate at the national level. In India tea is consumed mainly in two forms (i) packaged and (ii) unpacked/loose. Most of the tea gardens of Eastern and North Eastern parts belong to big national tea groups like the Tata, HUL, Duncan, etc. Only in the beginning of the twenty first century, global players entered India (Exhibit I). The packaged tea players are mostly the national and global brands at all India level. Almost all the national and global brands have presence across India by leveraging on their own distribution networks. The share of Cut Tear Curl (CTC) tea constitutes 80 percent of the tea market followed by Orthodox tea, Green and Flavored tea. HUL leads the market with a share of 32% and Tata Tea has the second largest share of 22% (Exhibit II). For the big players, branded tea accounts for close to 70-80 percent of their total revenues.2

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1 http://www.tea.in/industry, Heinz Traber, Zilleweg. 1, 46286 Dorsten, GERMANY
2 Maps of India: Top Tea brands in India 2013

Teaching Note Preview

Brand Attractiveness in Packaged Tea Industry: Local, National and Global Brand

 

Synopsis

This case deals with a local tea brand Korangani belonging to Assam , an important state of North East India and examines its progress from its first launch in  packaged tea industry since 1997. Korangani Tea with its variants are now a household name in the major markets of the North East and parts of Eastern India, having sales of approximately 350,000 kilograms annually, with a turnover of INR13.38 crore in 2013-14. Korangani has been experiencing tremendous competition not only from other local players but also from National and Global brands. How can local brands sustain itself alongside the highly resourceful National and Global brands? Korangani has constantly upgraded its product level, has been using competitive pricing and distribution strategies. Local brands may also enjoy certain brand equity. This case tries to answer – Whether local, national and global tea brands differ in brand attractiveness? In fact tea marketers need to ascertain what consumers look beyond the functional values of the product.

Pedagogical Objectives

  • • To identify the points-of-parity and points-of-differences of the local brand Korangani
  • • To understand importance of branding issues so as to evaluate brand attractiveness, this can emulate differential advantage to the local brand
  • • To examine the strengths of global and national brands and listing down of critical success factors of local brands

 

Case Positioning and Setting

This case can be used in the MBA programs, for the course of Marketing to highlight the concepts of branding, brand positioning and brand attractiveness.

Assignment Questions

  • i. Examine how local brands survive only on points-of-parity rather than points-of-difference.
  • ii. Will local brand Korangani be able to create any differential advantage by its brand attractiveness?
  • iii. Develop SWOT analysis for the local brand Korangani. What are its critical success factors?
  • iv. .................

 

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Abstract

This case is expected to enlighten the participants regarding the difficulties faced by local tea brands while positioning against the national and global tea brands. What makes a consumer choose his cup of tea remains a marketing dilemma? This has been intensified by local, national and global brands sharing the same shelf in  almost all retailing outlets. Is the attractiveness of these tea brands different among the consumers? The present booming tea industry of Assam originated in 1926  when a forest in Upper Assam was cleared by a visionary person to cultivate tea plants and later got converted into tea estates. Incorporated in 1985, it started packaged tea distribution from 1998 allover North East India. Today this local tea brand ‘Korangani’ of Assam is a popular household name of North East and Eastern Region of  India. This local brand has been facing tremendous competition from national brands and recently from global brands. In order to sustain, Korangani has been  constantly upgrading its product level and using competitive pricing and distribution strategies. Korangani’s management feels there are other drivers that make  consumers choose between the different brands. Can identifying its brand attractiveness help Korangani to design effective positioning strategies?



Pedagogical Objectives

  • To identify the points-of-parity and points-of-differences of the local brand Korangani.
  • To understand importance of branding issues so as to evaluate brand attractiveness, this can emulate differential advantage to the local brand.
  • To examine the strengths of global and national brands and listing down of critical success factors of local brands.

Case Positioning and Setting
This case can be used in the MBA programs, for the course of Marketing to highlight the concepts of branding, brand positioning and brand attractiveness.


* GSMC 2016, IIM Raipur

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