Answer to Question no -2

The tea industry in India is about 170 years old. It occupies an important
place and plays a very vital part in the national economy. Tea is an essential item of
domestic consumption and is the highest consumed and the cheapest beverage available
in India.

Geographically, tea is widely consumed in the North, East and West of India, and is
popular with a wide variety of social classes and consumer age groups.

Market segmentation is the analysis of a market to identify the different types of

consumer. By matching the consumer categories to the types of product on offer unfilled
Market niches may emerge. The potential profitability can be enormous for filling these
gaps.

Market research is the process of gathering primary and secondary data on the buying
habits, lifestyle, usage and attitudes of genuine and potential customers. The intention is
to gather evidence that can enable marketing and product decisions to be made in a more
scientific manner than would otherwise be possible.

The main ways to in which the rural tea market can be segmented is through considering
the factors:
♦ Demographic, e.g. by age, social class or sex.
♦ Psychographic (by attitudes and taste) e.g. trendy against simple (dull).
♦ Geographically by region.
♦ Behaviorally by usage

Here in our case demographic and geographic segment is done on the basis of age group
and income e.g. 18-50 years of age and middle income group and northern India’s rural
market respectively.

Apart from these broad segments again we have to segment the rural market narrowly on
different basis like age is to classify again and psychographic behavioral segmentation
has to be done in this segment.

Firms use these factors to try and segment large areas of the market. Under Demographic,
segmentation we need to research
♦ Whether more women or men drink/buy tea, so a firm might concentrate
according to their taste and preference through product development
advertising, slogan or packaging, pricing etc.
♦ On the basis of age group 18-50 can be again classify into 18-30, 30-40
and 40-50. With proper market research we could know about the age
group which are consuming max tea and different age group with
difference taste.
 ♦ Middle income group need to be sub divided into lower middle income,
middle middle income and upper middle income group. As we are
considering the rural market the max nos of customer might fall under
lower middle income group.
♦ Occupation wise most of the rural populations are farmer or labourer.
♦ Literacy level in rural market is lower as compare to urban market. During
promotional activities this factor should be take care utmostly.
♦ Religions and different social classes of rural market cant be avoidable
while preparing a marketing strategy for tea marketing as these factors are
more sentimental to rural people.

Geographically here the rural market is segmented to only north India but still we need
to segment this large segment into small segments on the basis of
♦ Population density
♦ Region wise: north east, extreme north etc.
♦ Climatic condition: Himalayan range, Punjab & Harayana etc.

Pyschographically, a firm might segment the rural market on the basis of

♦ Lifestyle: Rural people don’t have a lavish lifestyle, they generally having
a low profile living style. Accordingly marketer has to design the tea for
the rural market.
♦ Personality: In general rural people are not more ambitious.

On the basis of behavioral segment marketer has to research the following segments
♦ Occasion: How often the customer having tea in a day. Generally in winter
the consumption of tea increases as comparison to other season.
♦ User status: Through proper research (primary & secondary) marketer has
to find out many people are non user, regular user or seasonal user of tea
in the existing segment
♦ Usage rate: Marketer has to find out the customer and segment them on
the basis of usage rate of tea like light user, medium user, heavy user of
tea.

TYPES OF TEAS:
Main varieties:
1. Black,
2. Oolong,
3. Green,
4. White,
5. Loose teas and
6. Tea Bags.

Black teas are oxidized and fermented during processing, to give them their distinctive
flavors. Black tea has a full, rich taste. This particular variety of black tea is called
Keemun.
Oolong Tea is tea that falls between a black and a green tea. It only undergoes a small
amount of fermentation during processing.

Green teas have undergone less processing than black teas, and have a much lighter
flavour. The health benefits of green tea are seemingly endless. Since the leaves are not
fermented, the taste is pleasantly fresh and herbal.

White Tea comes from the Camellia sinensis plant. White tea is scarcer than the other
traditional teas, and quite a bit more expensive. This variety of white tea is called Silver
Needle

Loose teas are typically whole leaves or at least large pieces of leaves

A tea bag is a small, porous paper, silk or plastic sealed bag containing tea leaves for
brewing tea

After having the above discussion we can answer the question a) b) and c) as follows

a) Product variety:
Rural consumers never look into variety in a product rather they search the value for
their money they are spending. So keeping in mind the marketer should provide a tea
which can satisfy the rural consumer.
♦ Product wise if the marketer is targeting rural market it is obvious that he
will choose either or both of loose tea & tea bag as these teas are lower
cost.
♦ Flavors: Launching of flavored teas bamboo cups in china bring it to India
too. Launching of more flavors in India (lemon tea, black tea).The taste
and preference of the different region is different accordingly the product
launched in the rural market.

b) Pricing:
Pricing is one of the important decision that has to taken by the marketer after proper
research as we know that the Indian rural market is very much price sensitive and they
need the value for money, marketer has to price the product attractively keeping these
things in mind to capture the market. Pricing should be done at the lower medium to
lower end and some promotional offer should be provided with every purchase.

♦ Rapid Penetration: Deeper penetration in rural markets by using self help

women groups for door to door selling with low price and high
promotional activities.
 ♦ Profit margins for retailers: Increase profit margins for retailers to achieve
higher sales volume as they are the main influencing factors in lower
income group people.

c)Promotional activities:
More number of ads which are equally effective as middle class people from rural
get influenced by ads to a large extent e.g Jaago Re campaign. Generally the
promotional activities can be undertaken to tap rural market through
♦ Weekly haats,
♦ Radio advertising,
♦ Melas,
♦ TV advertising in regional languages etc.
♦ Bundling: Providing a bundle pack like a small tea sachet free with 100
Gms pack of biscuits.
♦ Positioning: Position tea as health drink as research shows that those who
are having tea regularly the chances of heart disease reduced in them.