grp 5 assignment

GROUP _5_DAR_CAMPUS 1

MARKETING PLAN FOR AFRI TEA & COFFEE BLENDERS (1963) LTD


OUTLINEIntroductionCompany ObjectivesCompany Governance Product MixMarketing ProgramDistribution ChannelPricing StrategyConclusion and Recommendation


IntroductionThe company was established in 1963 as Brookebond Tanganyika Limited

managed by London based Brookebond group of companies.

There after ownership transferred to Tanzania Tea Blenders owed by Tanzania’s government through Tanzania Tea Authority (TTA).

Like many state owned companies, the company was privatized and eventually changed its name to Afri Tea and Coffee Blenders (1963) Limited in October 2008.

The company operates from its headquarters in Dar es Salaam with its

operations spread out to 16 regions within Tanzania with 12 branches and 1 agent.

The company employs 210 people while getting its regular supplies of raw materials from various tea estates in the Iringa and Tanga regions. The firm has got a production capacity of more than 3000MT and 750MT of Tea and Coffee respectively.


Objectives of Afri Tea & Coffee Blenders (1963) LTD

Establish and maintain an effective quality management system

Measure all aspects of the quality management system as a basis for continued improvement.

Improve the system through training and investment in new technology.

Comply with statutory and other requirements


CORPORATE GOVERNANCEVISION STATEMENT To be the leading tea blending, packing and marketing company in Africa

and a significant player In the World.

MISSION STATEMENT To be the consumers’ first choice for blended tea of high quality and great

tastes

The main company activities include:Blending and packing of tea. Packing instant coffee powder. Roasting, grinding and packing pure coffee. Marketing and selling company's products.


Company Product MixThe Company consist of 3 main aspects which are:-Tea products, Coffee Products, Herbal tea products.


Product MixTea Products


Products Cont……………Coffee Products


Products Cont……………Herbal Tea Products


Product Mix SummaryProduct Mix Width

Tea Products Coffee Products Tea Herbal Products

African Pride Tea Gold Blend Tin Africafe instant coffee tins Camomile tea bags

African Pride loose tea Africafe instant coffee pouches Green tea tea bags

African Pride tea bag African caterer pack Hibiscus tea bags

African Pride Gold Blend tea Bag Africafe 1.6 gm sachets Lemon grass tea bag

African Pride Masala tea Bag Africafe 3 in 1 Peppermints tea bags

Chai Maarufu tea bag Africafe gold (Agglomerated) Rooibus tea bags

Gold Blend Tea loose Africafe safari blend coffee beans (Dark roast)

Kilimanjaro infusions loose chamomile flowers

Green label tea Africafe safari blend ground coffeeKilimanjaro infusions loose hibiscus petals

Green label tea bags tag less Africafe Zanzibar Blend medium roast

Kilimanjaro infusions loose peppermints leaves


Product Life Cycle

Afri Tea & Coffee Blenders (1963) ltd, apply a product life cycle approach involving their partners from farm to consumer in order to minimize the environmental impact of their products and activities.

Aims of the cycle is:-

To use natural resources efficiently;

To improve the environmental performance of the products along their entire life cycle.


Marketing Programs The chart below shows tools that have been used for analysis of the Afri

marketing.


Product Product brands of the company have been in the market for more than

two decades except for Chai Maarufu brand. Afri Products have good quality, value, packaging and branding

Place

Place relates to decisions about the storing and transporting of products, and also about selecting the products channel of distribution. These decisions are critical to the success of an organization.

Price The firm has several options for addressing the price. Manufactured

products may be force to switch to offshore sourcing of certain component to keep costs and prices competitive. Another factor is a through audit of the distribution structure in the target markets.

Promotion The company use advertisement as the form of promotion through

newspapers, magazines, television, radio, billboards, or the Internet

Product

Product brands of the company have been in the market for more than two decades now except for Chai Maarufu brand. Product brands are those very well known to the Tanzanian masses especially at the domestic market. Meanwhile all Afri Tea Brands have been doing well in the export markets. As for the coffee products, Africafe has been noticeably accepted in the export market so much that it is competing effectively with other brands from multinational companies.The export destination for Afri teas & coffees is Germany, Faroe Island, Japan, Russia, Belgium, Denmark, Kenya, Comoros, Zambia and Uganda, United Arab Emirates (UAE), Oman etc.

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Branding

Is the collection of attributes that the consumer has come to expect from a product, which will strongly influence their buying patterns. Branding can be achieved using a company name - it can be applied generically or, as in the case of , on an individual basis. The brand name promises the consumer particular benefits, such as quality and value for money, with these expectations being built up over many years. A brand name is often considered by a company to be its most important intangible asset. In a market where repeat purchases are the key to profitability, a brand name becomes paramount to a product's success.

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Packaging Afri products packaging is the most direct and largest communication

vehicle that the organization had with the most impressions they can deliver. And on the packaging, the firm’s communicate wellness benefits in their business. The packaging materials continue to be the main source of concern, mainly in plastics, paper boxes, metal and glass.

Afri packaging have been target to all consumer types and business.

Eco-efficient packaging

Packaging is essential for food safety. It also helps to avoid wastage before and after purchase by maintaining freshness for the consumer.

Packaging Source Reduction

Waste recovery schemes for the collection, separation and recovery of used packaging .

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PriceThe firm has several options for addressing the price. Manufactured

products may be force to switch to offshore sourcing of certain component to keep costs and prices competitive. Another factor is a through audit of the distribution structure in the target markets.

Price strategyPrice strategy is a basic, long-term pricing framework, which establishes

the initial price for a product and the intended direction for price movements over the product life cycle. It consists of 3 type of pricing strategy which is Price skimming, Penetration pricing and Status quo pricing.

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Price techniquePrice Setting

Skimming

Status quo Penetration

Establish price

Benchmark

Estimate demand, costs and

profit

Evaluate result

Choose price strategy

Fine tune best price

Set Price

Price techniqueSkimmingIs a pricing technique designing to allow high price at higher income groups for luxury or status goods, or at extracting maximum returns from a market for a new technology product before competitors emerge. Penetration Is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers. Status quo Is the pricing technique of a firm may seek price stabilization in order to avoid price wars and maintain a moderate but stable level of profit.

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Factor Affecting the Pricing

Cost Product Promotion Place

Competition

Quality

Place Place relates to decisions about the storing and transporting of products,

and also about selecting the products channel of distribution. These decisions are critical to the success of an organization.

Effective inventory management drives down costs and enhances product quality. Choosing the right distribution channel (i.e. should we sell through middleman firms or should we sell directly to the end-user) Direct energy cost pressures have eased in recent months. The major distribution channel include with geographically consideration with the manufacturing place situated. It’s very cost effective way for the firm’s expenses in distribution its products to targeted market.

Afri Channel decisions and intermediaries:-

i. Direct and indirect sales ii. Mail order and internet iii. Retail

iv. Wholesale v. Agents

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Distribution Channels Retailer Wholesaler Agents

Channels Channels

ChannelsProducer

Retailers

Consumers

Producer

Wholesalers

Retailers

Consumers

Producer

Agents

Wholesalers

Retailers

Consumers

Product transportation Adequate transport have been uses to transport products from the factory

to consumers.

Containers

Trucks

Pickups

Motorcycles

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Promotion Few good or services, no matter how well developed, priced or

distributed, cannot survive in the marketplace without effective promotion which is a communication by marketers that informs, persuades and reminds potential buyers of a product in order to influence their opinion.

Advertising

Advertising is defined as any paid form of product information that is delivered to potential customers in a non-personal way (such as through newspapers, magazines, television, radio, billboards, or the Internet). The communication is not just about advertising only, and the communication often creates a creative slogan in order to make sure consumer will remember Products “African Pride/ Africafe /Kilimanjaro“

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Advertising MediaTelevision

Outdoor media

Internet

Printed Media

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Benefits and limitationPorter’s five forces Afri Tea and Coffee Blenders (1963)


Benefits and limitation cont….Threats of Substitute products (Strong) During our visit and interview with the Afri management team and major

products consumers we could identify Substitute product for Afri Tea and Coffee Blenders (1963) ltd. Substitute of products is a threat for Afri because there are many substitute product available on a market Such as Chai Bora Limited product as a part of Trans century under the Tatepa Group of Company

Threats of New Entrants (Moderate) Afri Business Competition still attractive. So the threats of new entrants is

moderate because the variation segment on this industry is moderate attractive which has moderate entry barriers and low exist barriers.


Benefits and limitation cont….Industrial Rivalry (Strong)

The intensity of rivalry among Afri existing competitors in the markets is strong due to company have good and clear markets leader with a small existing competitors and high switching cost of substitute products from a customers.

Bargaining power of suppliers (Moderate) The profitability of those industries significantly depends on the suppliers

pricing strategy of the products that serves as input for the industry players.

During our visit and interviews with tea and coffee suppliers including major industry players we identify Afri Bargaining power of suppliers is little strong due to controlling power over increasing the price of supplies.

SWOC ANALYSISSTRENGTHS WEAKNESSES

Being a product of African. They offer high quality and safe products at affordable prices. Importance is given to nutrition, health and wellness of the consumer. The brand is well differentiated from its competitors. They have an efficient supply chain. Responsive organization structure and a strong management team.

Supply chain configuration is complex Cascading indirect taxes Weak bargaining power towards consumers/buyers. Weak marketing and distribution products.

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SWOC ANALYSIS CONT…………

OPPORTUNITIES CHALLENGESThere is potential for expansion in small town and other geographies.Rising demand for premium product.Simply taxation and distribution.Product offering.

Sectoral woes – volatility of price of raw material, packaging material and fuel.Availability of agro based commodities.Food inflation.Competition with East African community.Unreliable electricity Power SupplyCompetitors have diversity in packaging (bottles, pouches, cans, etc)

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Conclusion and recommendation

Afri corporate objectives and strategy uses as a tools to maintain its market position as the Tanzania’s number one selling tea and coffee brand. In order to achieve this, Afri has to develop a marketing strategy that will take into account all the elements of the marketing mix. This will involve individual strategies for pricing, product development, promotion and distribution.

Since Afri tea and coffee blenders (1963) ltd is an established brand name, these strategies must be flexible and relevant to each new generation of consumers, but at the same time, great care must be taken not to damage the perceptions of the product built up over decades of marketing.


Thank you for your Attention !

grp 5 assignment

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