New Zealand

Julie Prinner, Rachel Lehman, Liz Ferneding, Brad Rowley

Product

Product

Flavors 25% of New Zealanders report that they love to try new

things 52% report that they keep up with new things, but do

not go out of their way to try new things 23% don’t waste their time with new things.

This percentage is very low in comparison to other countries such as China where 50% do not waste their time with new products.

• Since the New Zealanders are receptive to new products and tastes they would be willing to try new flavors of tea that are not currently on the market, giving Lipton a competitive advantage.

Product

Packaging Convenience and Portability

People are working longer hours than before and married women with children are also entering the work force.

Global trends show that convenience and ease of use are key in consumers choices.

• Due to the “on the go” mentality of New Zealanders product convenience is stressed.

The majority of non-alcoholic beverages in New Zealand are packaged in PET bottles (plastic) with aluminum cans and glass packaging declining in use.

Focus on Health 43% exercise more than three times per week

It would be important to position the product as a healthy alternative to soft drinks.

Product

Language English and Maori

English is the official language of New Zealand and less than 10% of the population are of Maori descent.

• Due to the current position of Lipton in Australia, a more standardized approach can be used while entering New Zealand and language changes would not be necessary, therefore reducing costs.

Labeling New Zealand has a 99% literacy rate

A standardized written label could be used in New Zealand due to their literacy rate, which could be an issue in lesser developed countries.

Price

Price

Retail Price Per Capita Income

$21,600 per person Could be priced similarly to the U.S. price of tea because

of the similar income.

Grocery Expenditures The average amount spent on groceries per month

ranges from $300-$400. The average New Zealand household (2.7 people) spends

$11.00 per week on beverages. Based on average consumption and income our

intended price of Lipton would be in the reach of our customers.

Price

Competition Tea

Bushells (Unilever)• Leading tea brand in New Zealand

Lan-Choo (Unilever) Choysa (Unilever)

Fruit juices Soft Drinks

Coke/Diet coke/Caffeine Free Diet Coke, Fanta, Sprite, Lift/Diet Lift

• Accounts for 40.2% of New Zealand’s Beverage market

Energy Drinks Lift Plus Powerade

Place

Place

Geography Islands

North and South• The separation of land by the Cook

Strait, poses transportation problems.

North Island Active volcanic interior surrounded by

geysers and hot springs. South Island

Large mountainous area due to the Southern Alps and surrounding hill countries.

Coastal plains and mountainous terrain dominate New Zealand’s geography.

Due to the unusual terrain of New Zealand distribution issues such as transportation issues could arise.

Place

Geography Population Density

Approximately 80% of the population lives in New Zealand’s major cities.

• Iced tea would mainly be sold in cities like Auckland and Christchurch.

Place

Manufacturing Pepsi Lipton Tea Partnership focusing on existing Lipton RTD tea

in Australia with an emphasis on expansion in New Zealand Pepsi contributes extensive bottling and distribution networks

Unilever currently has 9 major distribution centers in Australia and New Zealand Orders are no longer placed in Australia, using statistical

forecasting to drive the supply chain stock is accessed directly in the New Zealand distribution centers and replenished through integration

Manufacturers are supported by a number of New Zealand based packaging and ingredient suppliers, and a large array of companies from service industries such as distribution, Information Technology, and advertising

Place

Current Distribution Methods Australia offers a distribution option since it is

such a heavy trade partner with New Zealand.New Zealand and Australia currently hold a

free trade agreement allowing for tax free trade.

• Lipton is currently marketing their RTD tea line in Australia and due to the close geographic proximity of New Zealand, distribution networks could be easily established.

Place

Current Distribution Methods There are over 75 New Zealand companies involved in

manufacturing and importing RTD beveragesPCNA bottlers

• Exist in the US (work with Pepsi-Lipton) and also exist in New Zealand

• In charge of marketing, promotion and advertising as well

Other (Coke)• Bottles the products in their factories then ships

them to a warehouse where they are then distributed to the individual outlets using mostly trucks

Place

Current Distribution Methods Distribution Methods of Beverages

Grocery- manufacturers of grocery items sell their branded products via a retailer to the consumer

Brand Owner Retailer- retailers that manufacture their own branded groceries or merchandise for direct sale to the consumer via outlets

Retailers- owners/operators of outlets that sell products and materials directly to the consumers

Place

Trade Export Partners

Australia accounts for 21.8% of New Zealand’s export business

Import PartnersAustralia controls 22.2% of New Zealand’s

import products• Due to the fact that Australia and New

Zealand have a long standing trade partnership, importing and exporting goods would be a familiar distribution pattern.

Place

Transportation in New Zealand Railways

3,898 km Highways

92,053 total Waterways

1,609 Ports and harbors: Auckland, Christchurch, Dunedin,

Tauranga, Wellington• Over 90% of exports and imports by value and nearly

99% by volume are carried by sea• 13 major commercial ports, 4 of which are partly

privatized Airports

113• A developed infrastructure provides extensive

transportation options, both by land and sea to get the product into the hands of the consumer.

Place

Beverage Distribution Major grocery outlets, such as

supermarkets/hypermarkets, lead the beverage distribution in New Zealand

Two companies dominating the grocery sector are Progressive Enterprises Ltd and Foodstuffs Ltd, which is comprised of three separate companies and have several chains.

Slowly changing towards convenience stores, due to busier consumers and their changing needs towards convenient products

Shelf space is readily available in New Zealand’s supermarkets.

Place

Beverage Distribution Specialty Stores

In New Zealand, smaller specialty stores like butcheries and bakeries are more prevalent.

37% of New Zealanders buy their groceries at two or more stores.

• Iced Tea would need to be placed in a wider variety of locations to gain full market potential, therefore increasing the distribution network.

Promotion

Promotion

Consumer Behavior New Zealand’s new aged beverage market is

projected to reach a value of $77.4 million. An increase of 43.7% since 2003

Iced Tea is the leading source of revenue for new aged beverages.

Accounts for 91% of the market’s value. Since there is a growing market for iced tea, it

would be wise for Lipton to enter the emerging market.

Promotion

Consumer Behavior Hofstede Indexes

79 Individualism- Everyone is special mentality, self-focused, limited family.

• A campaign focused on the individual benefits sought from the product would be key.

49 Uncertainty Avoidance- Rule Oriented Society, but accept changes and variety of opinions.

30 Long Term Orientation- Not deeply rooted in tradition, change can occur quickly.

• Due to the nature of this society, Lipton could enter its product into the market without fear of rejection.

Promotion

Media Options Radio Broadcast Stations

124 AM 290 FM 4 Shortwave

Television Stations 41 plus 52 medium power repeaters and over 650 low

power repeaters Internet

474,395 hosts 2.11 million users

• The vast media availability throughout the country allows for a variety of promotional options.

Promotion

Television TV advertising is expensive, but reaches 98% of

all households in New Zealand.In 2003 New Zealanders spent 2 hours and 53

minutes on average per day watching television.

There are five major channels in New Zealand of them, TV 1 is the most popular channel.

TV2 is watched by people 18-39 which attracts marketers because of the variety and market dominance of this group.

Promotion

Internet Internet advertising is relatively cheap and

use is rapidly growing, with 78% of New Zealanders (ages 10+) now able to access the Internet from any location.

81% are considered regular users of the internet.

• This group accesses the internet at least once every four weeks.

52% have access from their home.

Promotion

Newspaper and Magazines Newspaper and Magazine advertising is cheaper than

television advertising, but less likely to be seen. 80% of New Zealander’s get a daily newspaper. Magazine consumption is dominated by women in

New Zealand. Three of the six top selling magazines are women’s

magazines. • NZ Woman’s Weekly • Woman's Day• Australian Women's Weekly

Promotion

Current Message of Lipton Lipton

“Be yourself, naturally” Theme of refreshing Stereotypical youth social scenarios Superficial politeness between characters but

dialogue is “refreshingly honest and frank”• These themes target a youthful drinker

specifically and also appeal to the active lifestyles of New Zealanders.

• Unilever New Zealand Limited wants to make the brand more prominent and appeal to a younger, more contemporary audience in order to promote consumption and future long term loyalty

Promotion

Position of Competitors Coca Cola

“Waves of Freedom”• Advertising that features kite surfing

(popular summer extreme sport)• Advertises popular events and sports

throughout the country during their respective seasons.

Due to the emerging trend of healthy beverages, Lipton could gain a competitive advantage over soft drink companies with their current health and vitality approach.

Summary

Product Issues Packaging Product Positioning

Pricing Issues Per Capita Income Competition

Place Issues Terrain Location of Production Facility Wide distribution network

Promotion Issues Benefits Sought Media Pricing Media Reach