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Copy of BOH TEA

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Husna Ahmad

on 12 November 2014

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Transcript of Copy of BOH TEA

THANK YOU FOR YOUR
ATTENTION!

5.5 million cups
per day
Today BOH exports its brand of prime grade teas to the USA, United Arab Emirates, Japan, Singapore and Brunei.
BOH Plantations Sdn Bhd is the leading tea grower in Malaysia with four tea gardens in Cameron Highlands and Selangor.

One of the few vertical integrated companies

Represents 70% of all tea produced in wide range of black teas

The company produces 4 million kgs of tea annually
1.5 HOST COUNTRY CONSTRAINTS
MARKET SITUATION
Tea is newly famous in Spain, now one of the most popular beverages next to coffee
Consumers are becoming more health conscious, switching to tea for its health benefits
CONSUMPTION OF TEA
80% of sales are scented teas
Spanish tea drinkers like it with more sugar and sometimes cream, or milk
Green gunpowder tea with mint is one of the most popular teas
Spanish women consume more tea than men.
Consumption has increased by 3,5% in quantity and 7,7% in value, which 50% is consumed at home.
SPAIN'S IMPORT RESTRICTIONS
Required documents to export to Spain: Commercial invoice, Bill of lading, Certificate of origin (three copies)
Apply for export license at Secretaria General de Comercio Exterior
Non EU countries are subjected to quotas
WHO ARE WE?
Elegant formal business attire
Time is more relaxed
Family and relationships are primary things even in business
Long and chaotic business negotiations
BUSINESS CULTURAL PRACTICES
PHASE 2: ADAPTING THE MARKETING MIX TO TARGET MARKETS
PHASE 1: PRELIMINARY ANALYSIS AND SCREENING:
MATCHING COMPANY/COUNTRY NEEDS
2.3 PLACE
TARGET?
DISTRIBUTION?
Low to medium income families and senior households
Indirect distribution
DISTRIBUTION INTENSITY
Intensive distribution strategy: available for our target customers
Leading and largest supermarket operator in Spain
1,311 supermarkets
12.8% share of Spain’s total food retail space
4.3 million households do their grocery shopping at Mercadona every day
OUR FIRST DISTRIBUTOR
PHASE 3: DEVELOPING THE MARKETING PLAN
3.0 SITUATION ANALYSIS
 Té Negro - Black tea. Much weaker than traditional black tea.
 Té Rojo - Pu-erh tea.
 Té Verde - Green tea.
 Té de Fruta - Fruit tea.
 Manzanilla - Chamomile tea.
 Menta Poleo - Pennyroyal tea.
 Tila - Lime blossom tea.
WHICH OF OUR PRODUCTS WILL BE EXPORTED TO SPAIN?
Broken orange pekoe flavour and
its robust character
PRODUCT SITUATION
Refreshing selection of fruit infusions,
herb infusions and green tea
Strong appreciation of coffee and they love to mix their tea with milk and sugar.
Specially blended with or without sugar
Refreshing instant beverage made with natural tea extracts and fruity flavours for spanish heated summers
but with added creamer
COMPETITIVE SITUATION
LOCAL COMPETITORS
Market leader in Spain
Market share of 21%.
Number one tea manufacturer for over 50 years
Other tea brands: Badia, Ben-Hur, Bio3, Careca, Carmencita, El Avion, El Naturalista, Emicela, Herba
INTERNATIONAL COMPETITORS
The rest of the market is shared between global market leaders which provide on a worldwide basis
DISTRIBUTION SITUATION
Intensive distribution in the leading Spanish supermarkets : maximum coverage to reach our target customers
Other leading supermarkets in Spain, like Carrefour, as well as Leclerc and Spar
3.1 SWOT ANALYSIS
STRENGTHS
#1 tea manufacturer in Malaysia

Strong foundations and knowledge

Strong reputation, loyalty and appreciation

Great Marketing and advertising strategies & Techiques for Spain

Opportunities to innovate and adapt some of our products to the Spanish market
WEAKNESSES
OPPORTUNITIES
THREATS
New Market, Unfamiliar with no experience, unknown by Spanish consumers

A strong marketing and advertising campaign needed

Some products might not be suitable for Spanish taste

Current output production can only cater for local demand
Steady increase in tea consumption

Competition scene not too fierce yet

Good practice before going to other European countries

Spain is considered health conscious society therefore better response for our product.
Major International competitors have important share of the market like Lipton and Tetley

Exporting taxes induce extra costs

EU regulations are updated often and can hinder the business operations and amount of revenue or profit generated

Climate change and weather threatening production of tea.
3.2 OBJECTIVES AND GOALS
1.0 COMPANY PROFILE
BOH’s Mission
Represent Malaysian product abroad, expand market share for its product through competitive pricing and quality tea production
BOH’s Objectives
Capture 40% of Spanish tea market through joint venture partner in Spain
1.1 Mission and Objectives
Introduction in 1929, persistent in increasing its product and capitalizing domestic market
In 1970, BOH took market through consumer communication and the bow tie animated ads make a positive and lasting impact for consumers
Tagline: ‘Share the Ummph’
1.2 Philosophy and History
1.3 Product range
1.4 Home country
constraints

POLITICAL SYSTEM
Democracy system, parliamentary system
Regarding cultural norm and standards of locals
Boh tea products must be ‘halal’
Political system in Malaysia is stable
ACCIM’s survey
GDP is grown by an average of 6.5% each year
Government provides subsidies for exporting and BOH can gain competitive advantage
During inflation in 1998, prices of product increased and BOH was not able to export
Based on The Star, BOH is facing labor shortage as it may affect Malaysia’s GDP
BOH tea plantations are vital for tourism in Cameron Highlands
ECONOMIC SITUATION
LABOUR COST
Competitive labor cost and skilled labor in Malaysia
BOH can lower cost of production – labor cost
To reduce the prices and make the products more competitive
Malaysia full of developed infrastructure
Easier for BOH to send products overseas in saving time
With internet and communication, BOH can understand the culture of different countries to customize the products and communicate with partners
Relative ranks of ASEAN countries in infrastructure development
INFRASTRUCTURE
Affect BOH plantations of tea leaf and processes for sales
Global warming is a concern issue
Malaysia government encourages using of biofuel/biodiesel, but this may increase cost of production
CLIMATE CONSTRAINTS

- Become an industry leader and producer of tea in Malaysia and Spain by end of 2020 with market share of 60% in Malaysia and 40% in Spain




- Every quarterly to have at least 2 new channel or retailer to sell our products. Strengthen relationship by providing discounts and credit facilities for next 3 years of entry into Spain.
Exposure of brand image of 40% throughout Spain over the next financial year and increase of 20% consequently for 4 years

At least 5 marketing campaigns within 2 years of entry and 25 presentation to channel members for awareness.

RM 200,000 worth of tea products for tasting and sampling purpose by end of year 2012.
Achieve 60% recycle product packaging by end of 2020.
3.3 Strategy and tactics
Objective 1: Market leader and Market Share
Objective 2: Improve Channel Distribution Relationship
Objective 3: Production Awareness and Marketing Campaigns
Objective 4: Sales Revenue
Sales revenue growth of 30% every half yearly by end of 2014. Target revenue of 15million during 2013 and RM110million by end of 2020
Increase in volume shipped out to our join venture partner by 25% over next year and start distribution to hypermarkets or retailers and increase volume to these channel by 30%.
Objective 5: Shipment Volume and Distribution Sales
Objective 6: Product Recycle Program
Demographic Segment
- 25 – 65 years old
- Working adults with stable income
- Male and Female (More female than male)
According to Research, Tea Consumption 60% Female and 40% Male
Geographic Segment
- Urban Area with high population concentration (like Madrid and Barcelona)
- Cold Climate
Creating unique, consistent and recognized perception about BOH image in the eyes of the customer to distinct us from the competitors

We position BOH product as competitive lower price with high quality tea that comes with good Aroma and Taste.

Our Second positioning is for health conscious people in large numbers. “A Quality Brand For Everyone Wishing For a Healthy and Active Lifestyle”
Focus our marketing efforts and resources on large cities such as Madrid with 2.8million, Barcelona with 1.4million and Valencia with 736,000 people.

Health conscious population with life expectancy of 81.07 average years ranked 13th in world. Marketing to target this group of segment. Design ads and promotions to cater these group eg. Buy 3 BOH Tea of 250g get 5 packs of herbal vitamin product.

Language: Spaniards often use English at workplace and Spanish(preferred) at home. Our product packaging, ads marketing, promotion and website to be translated to Spanish and English language to make it feel a home brand and appealing.

Share a healthy Lifestyle! - Compartir un estilo de vida saludable!
Use of Instant Redeemable Coupons (IRC) (Negotiation with retail stores)
- 70% of consumer purchase decision made in store use instant coupons to draw the consumer attention to a brand and make impulse purchase and encourage trial and taste a new product. Eg buy 2 BOH tea leaves save €1 or Save €2 when you buy BOH Tea 250g with BOH Green Tea 50g
Positioning
Market Segmentation and Target Market
Socio Economic Segment
- Middle and Higher Income earner
- Single or Married
- Housewives
- Skilled and Educated
Lifestyle and Personality Segment
- Carefree lifestyle-those retirees
- Tea-Lover
Health conscious people (Life Expectancy Women-84.27 years while Men 78.06 years)

- Coffee Drinker-Target this users to prefer Tea. (since Spain is mostly a Premium Coffee Consuming Country, It would be a major market to convert this consumers to tea consuming) by use or marketing tactics and demonstrating the harmful effects of too much coffee consumption and benefits of Tea).
3.4 Selecting mode of entry
3.5 Budget and action programs
Joint Venture with Vincent Food
Reasons:
Unfamiliar market and more control over the product and marketing mix

Though we will lose share of profit but BOH’s priority is to ensure our end product maintains its quality, price and brand

This form will allow fast and effective way to gain access to market with few resources.

Vincent Food as local company will understand more of business practices, culture and good connections of dealer’s network for distributing products.

Reduce burden of cost and risk because partner will share profit and loses.

Partner will contribute well equipped warehouse that it possess.

Additionally share intelligence of market, customer behavior and information which may be vital for adaptation purposes
Selection based on 3 criteria
Whether partner will help BOH to achieve its strategic goals thought market access and willing to share costs and risk of product distribution
Share the same vision as BOH for effective venture
Have reputation of fair play and use its know-how and experience to win market share for products

Vincent Food is a Spanish Wholesale company which imports, sells and distributes international food, beverages and non-food products and have massive distribution links . They believe in good stock management, fast service and excellent value for money.
Projected Financial Statement of BOH tea in Spain from 2012 to 2014
BUDGET
ACTION PLANS
2.1 PRODUCT
Demand for tea is increasing (development of tea culture and health benefits of tea)
Spanish consumers like more sweet flavoured teas, and scented teas
Fruity flavours are much appreciated (orange, lemon, tangerine, vanilla or tea including any kind of berry)
Flavours:
Adding vanilla flavour, or sugary taste to some classic BOH products
BOH Aromatic ( combinations of red berries and blue berries)
Successful in Spain? our company will invest more R&D in scented teas to invent different flavours of tea.
Quality, packaging, labeling adapted to spanish market.
In Malaysia, BOH stands for Best of Highlands
When BOH is going into Spain, it may define in different meaning
BOH in Spanish means bug or curve
Maintaining our brand name
We will use our current website (www.boh.com.my) by adding Spanish language and a customer service interface.
Spanish consumers are looking for quality, health and are concerned about beverage safety
BOH is a halal product : lots of Muslims in Spain.
Long-term R&D to ensure that only the best tea clones are cultivated
High quality loose leaf teas are becoming more and more popular rather than teabags in Spain.
We have to use recyclable or reusable material on BOH tea products to meet the rules and regulations of EU
The packaging in BOH provides protection from humidity by wrapping each teabag in a sealed foil sache to keep the tea fresh.
PRODUCT ADAPTATION
BRANDING
PACKAGING
QUALITY
PRODUCT DEMAND
ONLINE PRESENCE
2.2 PRICE
PRICING STRATEGY
PRICE DISCOUNTS
To our distributors to attract them to purchase in large quantities

How? Shipping the products on CIF bases:
distributors will only have to pay expenses from the destination port
MARKET PENETRATION PRICING STRATEGY

Because this brand of tea is totally new to the market and since it’s a household brand, charging relative low prices compared to its competitors is justified.
2.4 PROMOTION
ADVERTISING
PUBLIC RELATIONS
SALES PROMOTION
Press advertising (less costly)
In-store advertising with promoters giving out free T-shirts and tea tasting
Television advertising at meal times and mornings
Speech: talking about health conscience in consuming tea products
Special events: organizing the scholarship sponsorship for students in environmental courses.
Public service: regarding global environmental issues, for instance: donation of a % of our revenue to help Japan tsunami victims
Short-term incentives
Premiums in which either free or cheaper tea product
Some samples for trial purpose
Price pack
Coupons
Attached a free sample of new tea flavor in current tea product to invite consumers to buy new products
PHASE 4: IMPLEMENTATION, EVALUATION AND CONTROL
4.0 CONTROL OBJECTIVES
Strict standards and activities
Assigned person to take responsibilities at different level
Ensure the products are available to customer at the right time, right price and quality.
4.1 STANDARDS AND ASSIGNED RESPONSIBILITIES
Ensure packaging of the products are met with the EU regulations
Quality to be maintained consistence and changes are made accordingly to match customer preferences.
Ensure advertising campaign is effective in creating awareness of the brand and positive effect of tea consumption.
4.2 MEASURING PERFORMANCE
use of integrated system of extranet where we will be able to observe the stock levels
conduct a survey by distributing questionnaires
compare the actual expenditure with the forecast expenditure
track the end consumer price every quarterly
Responsibility of financial auditors
4.3 POSSIBLE MISCALCULATIONS AND SOLUTIONS
Difficulty in shipping goods to Spain during winter.
project demand for the season and ship in the goods early that can last during that period.
Change of the policies by EU
maintaining our external affairs, being a good corporate citizen, promote healthy lifestyle and goes green.
climate change in Malaysia affects the production of tea.
either import from Kenyan of Vietnam or buy more land for plantations within Malaysia.
Advertising is not attractive.
to design advertisement by using better modes of transport that targets our market segment such as billboards and advertising in television.
TACTICS
POSITIONING MAP
CONCLUSION
use of joint venture with Vincent Food

The market is dominated by coffee so we can create the awareness of health benefits of tea drinking.

The standard of living is very high and prices usually in Spain are high compared to Malaysia making it more profitable to charge higher for the products.

BOH’s strength: expert management practices such as marketing campaign in order to maintain the customers’ loyalty

BOH’s weakness: current production cannot meet the demand and the threat of climate change

Trade fair very effective way to create awareness and very popular in Spain throughout the year. (Sampling, tasting and health benefit for branding purposes)

Distribute through large retail store such as Mercadona making it widely available throughout Spain. It has presence in 46 province with 1,311 supermarket representing 12.8% of food retail space with 4.3 million customer shopping every day.

Use of Search Engine Optimization (SEO) to increase chances of appearance in top list when search on a particular phrase. Eg BOH or Tea.

Social Media Networking such as Facebook and Twitter
Integrate inventory and supply chain with our retailer to trigger alert whenever a certain lever of stock reaches so as to replenish the stock on time. To ensure products of BOH are available anytime without running out of stock

Automated tea vending machines at strategic locations. Eg. Malls and large retail outlets
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