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The Tea Market In The Netherlands Marketing Essay

Market analysts imagine the tea industry will continue to grow and will probably not realise its full potential any time soon. The positive change in the industry is related to two major factors; consumers increased requirement of time-saving services as well as for convenience and the positive publicity directed at tea. The tea market in the Netherlands is currently doing well. According to a written report by Euromonitor the hot drinks market is experiencing a wholesome growth. People are preferring to invest money on tea as an inexpensive luxury despite the economic crises (Euromonitor 2010). Sales of tea in 2008 made revenues of $ 296. 9 million us dollars, which is 29. 4% of the full total hot refreshments market as suggested in the graph below.

The European Union (EU) has the biggest effect on the tea industry in the Netherlands as they follow the majority of its restrictions. Legal requirements will be the basis for the market entry and products sold in the EU must meet these requirements. Other requirements are public, usually dwelling on the basic safety of workers and environmental techniques relating to the tea development (EPCKenya 2010).

There is a positive increase for the tea industry especially within European countries, it's the second major continent after Asia to transfer tea. In 2002, NL consumed one tenth of tea use in UK as the biggest consumers in Europe (MAMO et all 2006). As mentioned above the monetary turmoil has seen consumers opting to buy more tea as other products have become more expensive, Based on the Euromonitor the fact that hot drinks are seen as a good way to get comfort and feel great when times are abrasive has helped the sector to accomplish expansion (Euromonitor 2010).

Social environment

Consumer preferences are changing as consequence of social influences, making tea drinking more convenient, nice and fashionable. Consumers are opt to taking more care for their health and have improved knowledge about nutrition. Today's world demands a whole lot and consumers are more pressed for time, any product filling up the consumers' need for easiness and convenience are accepted quickly into the Dutch lifestyle (Datamonitor 2009). You can find more give attention to anti-stress and simplification of one's life. In the last decade, tea's benefits associated with health have been extensively and positively mentioned in multimedia. Studies continuously confirm these benefits of tea, with health advantages a mixing machine of improvement in heart and soul health, lower degrees of cholesterol to and decreasing chances of malignancy (ukteacouncil. com). The positive publicity has definitely increased the demand for tea which has been increased by the Dutch belief in natural homeopathic treatments to prevent disease. The latest influential craze is the matter for the surroundings. This has also been n the mass media hence the recognition of good trade goods (Max havelaar. com). Individuals are now also demanding quality products offering true value. (Euromonitor 2009)

Technological environment

This sector is very competitive in holland. The tea consumer is becoming increasingly educated and complex. This means producers and sellers need to keep creating added principles products to attract and cater for the average person needs and personal preferences. There is a great call for continued progressive research and improvements to come up with new flavours and products ( Euromonitor 2009).

Market characteristics

There are a great deal of products on the market, black tea, green tea, white tea, fruits herbal teas. Dark colored tea gets the largest market accompanied by dark-colored fusion tea. However green tea extract demand keeps growing as health issues become more popular. The majority of tea comes in tea bags covering 94% (Datamonitor 2010). The average price of tea is Euro 1. 81 per 100 grams. Tea is mostly bought from Supermarkets with specialised tea sold in specialised tea outlets. In the previous years tea was used mostly outside the home but 2009 noticed more consumers preferring to consider tea in the house. (Euromonitor 2010).

Consumer characteristics

Tea in holland is drank by all sorts of individuals, however the key demographics are folks of all age range from generally 21 years of age up-wards with women being the most consumers. Women between your age of 30 and 50 are still the major tea drinkers. You will discover varied occasions of consumption and widening likes. Women will mainly drink tea during breaks and in public settings. They choose flavoured teas such as vanilla and chai, as well as Earl Grey. Men are a portion growing that is seeking the enjoyment of tea. The majority are eating it for health reasons, as well as to alleviate stress. Men generally prefer the original teas, including oolongs and greens. Others such as young consumers' affinity for tea is powered by the countless media. They also try tea for health reasons. (Datamonitor 2009)

There is a growing market for reasonable trade teas. China is among the primary suppliers of reasonable trade tea along with, Vietnam, Tanzania, Sri Lanka, Rwanda, Nepal Laos and some other emerging origins. 85% of most good trade tea is analyzed and certified organic. The Fair Trade was were only available in 1988 when a fall in the price tag on coffee facilitated economic crisis for expanding nations that produced and sold espresso, having great effects on small level farmers. The Netherlands was the first country to be dynamic about Fair Trade documentation through the first ever Rational Trade label, Maximum Havelaar. It didn't take long, many countries adopted the tendency of Rational Trade official certification. Products with the Max Havelaar label are produced and bought and sold under good conditions. Utmost Havelaar label is the one which consumers and businesses the chance for small makers in growing countries help acquire a much better devote the supply chain in order to live their work. The Max Havelaar label found in the Netherlands by itself delivered more than 250 different products ranging from peanut butter to bath tub towels. Most companies are now heading in direction of fair trade. (Maximum Havelaar. com)

However, in line with the results of the interview with the teabar owner who has been around the tea cafe industry for 4 years, she recognized that many Western people (not only Dutch) are sceptical about the quality of the tea that comes from China. People tend to give more trust to japan tea. Please see interview appendix B.

This view is recognized by MAMO et all on the book. It is stated that "Chinese exports to the EU and Japan are hindered by import restrictions imposed because pesticide residues experienced in Chinese tea exceed maximum permitted levels" (MAMO et all 2006).

Company analysis

A long founded tea company, The Hong Kong Fine Tea Ltd (THF) has knowledge for producing and distributing the high quality Chinese language teas for greater than a century. Over technology, nowadays this company has become aware to the strong competition in the tea market. Therefore THF plan to increase their business to EUROPEAN and UNITED STATES market so that they can introduce the high quality tea flavours of Chinese teas to the, the burkha.

In order to build Chinese tea awareness on the list of directed market who are young metropolitan professionals, THF require a retail and product brand concept that fit to the young urban experts characteristics.

Strengths

Market leader in China' Central Area in all types of teas.

Experience in marketing tea.

Weaknesses

Limited experience of Western consumers

unknown to Traditional western consumers.

Lack of american technological competence.

Opportunities

i) Introduce genuine Chinese tea. Create curiosity and be the first.

ii) Declining market segments for other beverages such as carbonated drinks as consumers become more health mindful.

iii) Wider knowledge of health advantages of tea.

Threats

i) Major competition from market head Pickwick and other big manufacturers.

ii) possible difficulty in circulation of the tea stores have placed tea types of products they already sell.

Consumer analysis

Demographic segmentation

We used income as our main basis for the segmentation. This is due to quality of the brand. Hong Kong Fine Teas have been producing high quality tea for years therefore we would want to get into the Netherlands market at the same level. The brand will be meant for consumers of top middle and low higher class. In addition they are in a professional job this means they have a school education or are in School. We also decided to go with age as much products on the market are based after "stage of life" and there are different patterns of intake at different age ranges.

Psychographic segmentation

On the foundation of Psychographics, lifestyle was the best suited for this product because it establishes how people organise their lives and spend their time and money (Pelsmacker 2009). Principles of spending so much time to get ahead in their employment opportunities, they have money and have confidence in quality of life, shelling out for comfort, pleasure, health insurance and young ones products time savers.

Geographic segmentation

Where people live has an effect on their consumption habits (Pelsmacker 2009). This will also help us in planning for the store locations and the syndication for the in-store products. We will aim at the urban professional as the match the cultural class and attribute of need for time. For even more segmentation please refer to appendix A.

Consumer Profile

Hence from the research results above our ideal consumer will be from the demographic of 25 years to 44 years, apt to be in university or college and or a professional. Demographically they can be metropolitan, looking for benefits in tea of health, rest and rejuvenation. Psycho graphically they are sociable, environmentally lively, busy and pressured - seeking convenience and require the soothing benefits given by tea. They may be considering new ethnicities and tastes. Second the brand would be more ideal to focus on working class people who have a high throw-away income.

Consumer insight

Our research results (appendix C) disclosed that a huge percentage have tried out Chinese green tea. A lot of the consumers are more worried about health advantages of tea and would also just like a tea that relaxes and rejuvenates (indicating a need for replenishment of energy). Alternatives of tea vary a good deal and depend greatly on individual flavor, hence consumers now would rather brew their own tea to be able to get a personal taste right, no longer do they like tea brewed to pay many tastes simultaneously. Most consumers favor green tea extract to other styles of tea. Therefore our key insights are :-

Drinking tea for

Health - increased metabolism, anti-oxidation, well balanced

Relaxing - refreshment, serenity

Rejuvenation - restored energy

Warmth - during winter

As shown below in the graph.

Core consumer insight

A consumer includes more psychological areas - what consumers think and feel, what their goals and how these influence how they behave. Many of these things are not conscious behaviours or applying for grants the part of consumers. A lot of consumers are infected, perhaps expectant of varied external factors such as the way a brand is marketed. Individuals are not born wanting to buy a particular brand. Therefore our main main insight is consumers are buying a high quality genuine green tea, easy to make that will rejuvenate them while relaxing in a healthy way. This evidently shows what our customer is looking for and just why.

Big idea

As result of the above a specific opportunity arises when we identify that we can enter in the tea market in Netherlands to offer a genuine Chinese tea that provides the fantastic benefits folks have heard of Chinese tea. Our big idea originates from the insight that "Many consumers have heard about Chinese green tea extract but feel it is not on their behalf" we intend to offer them an experience of Chinese spring in a glass of green tea. This is because Chinese springtime is associated with freshness, ambiance and that's when everything comes to life. The Chinese language believe planting season time is also the optimum time to harvest the high quality tea leaves the highest health advantages.

Brand concept

All products have core benefits that should be provided for consumers. Consumers seldom want to pay a sizable amount for products that simply deliver the primary key benefits, that is exactly what they already likely to get as grounds for the main price. Successful brands are those that shock a consumer with added value in in conjunction with key benefits. These added ideals go toward the brand to preparing itself as not the same as the opponents. Added values executed well will have the client choosing the brand as a desire because they're unable separate the two. Therefore, some customers are likely to be browsing for the brands to add meaning to their life in conditions of lifestyle or personality. A brand can usefully be displayed such as a "fried-egg" format, where in fact the brand is proven to have key features that are ornamented by less tangible but effective features as shown below. (strategicmarketsegmentation. com)

Hence as discussed above the brand is to provide the simple practical value - intrinsic good thing about being simply tea. It is a hot beverage to meant to keep you warm. This is its basic operation. The next is the psychological values will be to the consumer that tea makes you healthier, feel refreshed and comfortable. The added services or rather experience of the consumer with the product will be the smell, looks and flavor that is lovely spring flavours.

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