STRATEGIC MANAGEMENT

MASTERS OF BUSINESS ADMINISTRATION 2012

Assignment Record Form
Student Name: ESHANK GARG
University of Derby Index Number: 100272311
Learning Centre: OLYMPIA COLLEGE, KUALALUMPUR MALAYSIA
Course: MBA
Term: 4 (SEMESTER 3)
Module Title: STRATEGIC MARKETING MANAGEMENT
Module Leader: DR. SANKARAN RAMANATHAN
Assignment Submission Due Date: 23 SEPT 2012
Status: Active
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EXECUTIVE SUMMARY

Companies spend a lot of revenue to create a product that meet the customer’s demand, but
due to lack of effective marketing strategy companies faces failure. Marketing is the
important process for every organisation’s to create value and build a strong relationship with
customers, Market is not like 60s and 70s where marketers were the kings and products stay
last long today market it’s more complex and more globalised and its tougher for marketers
to develop an effective marketing plan.

McLeod Russel is purely tea Plantation Company. McLeod Russel India (MRIL), the largest
integrated tea company in the world with a 102 million kg annual production, company
engage in cultivation, processing and sale of tea. The Internal and External analysis of the
organization, competitive environment enables the team to propose dynamic & competitive
strategy for company. M c L e o d T e a i s n a t u r a l a n d powerful means of promoting
the healthy elimination of potentially harmful toxins and waste while opening the
pathway to superior assimilation of important nutrients. Tea, in India is very common
beverage around 74% of adults drink daily. Market is changed, people are more confident
toward the benefits of tea; customers demand more packaged branded tea.

Plantation industry dependent upon the climatic conditions that’s the company faces a price
downfall in 2011 aside from climatic company affects due to political, social, economical and
technological factors. Recently, due to production shortfall in Kenya brings an opportunity
for MRIL to develop a new geographical market as well as plan to develop new product in
domestic market. McLeod plans to achieve 100% growth through develop new package
brand market in Black and Green tea.

Company plans to come out with a new marketing plan of four years in order to achieve 25%
growth per year and moving to target a new geographical and demographic market segment
as well adopt a new dynamic pricing strategy in order to achieve and meet customer demand
and need and for the control and success of plan company plan to hire more marketing and
financial expertise that can audit the revenue effectively and helps to the success of marketing
plan.



TABLE OF CONTENTS

1.0 INTRODUCTION............................................................................................................ 06
2.0 COMPANY PROFILE .................................................................................................... 07

2.1 MCLEOD ACQUISITION…………………………………………………………....07

3.0 SITUATIONAL ANALYSIS .......................................................................................... 08

3.1 MARKET SUMMARY……………………………………………………………….08

3.1.1 GLOBAL AND DOMESTIC SCENARIO…………………………………………09

3.1.2 MARKET NEED AND TREND……………………………………………………11

3.2 MACRO ENVIORNMENT (PEST ANALYSIS)…………………………………….12

3.3 SWOT ANALYSIS……………………………………………………………………14

3.4 COMPETITION……………………………………………………………………….15

4.0 MARKETING STRATEGY .......................................................................................... 16

4.1 MARKETING OBJECTIVE ......................................................................................... 17

4.2 MARKET SEGMENTATION………………………………………………………...18

4.3 TARGET MARKET…………………………………………………………………..19

4.4 POSITIONING………………………………………………………………………..19

4.5 MARKETING MIX…………………………………………………………………...20

4.5.1 PRODUCT…………………………………………………………………………..20

4.5.2 PROMOTION……………………………………………………………………….20

4.5.3 PRICING…………………………………………………………………………….20

4.5.4 PLACE………………………………………………………………………………21

4.6 FINANCIAL OBJECTIVE……………………………………………………………21

4.6.1 BREAK EVEN ANALYSIS………………………………………………………...21



4.6.2 EXPENSE FORECAST…………………………………………………….……….22

5.0 IMPLEMENTATION AND CONTROL ..................................................................... 22

CONCLUSION ............................................................................................................ 24

LIST OF FIGURES ..................................................................................................... 25

FIGURE 1 ............................................................................................................ 09

FIGURE 2 ............................................................................................................ 10

FIGURE 3……………………………………………………………………....10

FIGURE 4………………………………………………………………………11

FIGURE 5………………………………………………………………………15

FIGURE 6………………………………………………………………………16

FIGURE 7……………………………………………………………………....17

FIGURE 8………………………………………………………………………19

LIST OF REFERENCES ............................................................................................ 26

LIST OF APPENDIX .................................................................................................. 32

APPENDIX 1 ..................................................................................................... 32

APPENDIX 2 ..................................................................................................... 34

APPENDIX 3………………………………………………………………….35

APPENDIX 4………………………………………………………………….36



1.0 INTRODUCTION

Strategic Management is a management that provides a comprehensive examination of all
major component of marketing strategy and their integration. The Chartered Institute of
Marketing defined marketing as the management process responsible for identifying,
anticipating and satisfying customer requirement profitability (Kamarulzaman and Abu
2012).

“Marketing as the process by which companies create value for customers and build strong
customer relationship in order to capture value from customers in return” (Kotler and
Armstrong 2012, pp. 29).

Every organisation operates in a dynamic marketplace-competition, technology, consumer
and market force, redefine industry every day. Staying competitive means continuously
adjusting and adopting customer approach to meet changing needs and expectation.
Marketing must be understood not in the old sense of making a sale-‘telling and selling’- but
in the new sense of satisfying customer needs. According to management guru Peter Drucker,
‘The aim of marketing is to make selling unnecessary’. Broadly, marketing is social and
managerial process by which individuals and organisations obtain what they need and want
through creating and exchanging values with others. (Kotler and Armstrong 2012).

Marketing is simply to shorten the sales cycle. Strategic Marketing is doing this, well,
strategically. Far too often, organisations try to develop product to meet customer demand
without verifying what the customer actually wants, then they make a strenuous effort to
‘sell’, through advertising, promotion and publicity- through ‘outbound marketing’.
Experienced organisations have learned that it’s not their opinion whether the product is
needed or not, the opinion that matters most is that of the customers. These organisations
have learned what they don’t know about their customers and this precious knowledge comes
from ‘inbound marketing’ (Namara 2012).

This paper shows the strategic marketing plan of McLeod Russel in order to achieve
company’s 100% growth for upcoming 4 years on tea industry. This plan includes current
market positioning of company and their competitors and affects of financial meltdown over
company and helps to move on 25% growth per year.



2.0 COMPANY PROFILE

McLeod Russel India Limited (MRIL), has been growing
tea in India since 1869, and is today the world’s largest tea
plantation company. McLeod Russel produces
approximately 100 million kilos of high quality tea from 61 estates in Assam and West
Bengal (India), 3 estates in Vietnam and 5 estates in Uganda and recently taken over the
management control of Gisovu Tea estate in Rwanda. The company was start in May 5 1869,
when Captain J.H Williamson and Richard Boycott Magor, two Englishmen based in
Calcutta, formed a partnership firm, Williamson Magor and Company, to service in Assam
(The Economic Times 2012).

McLeod Russel India Limited (MRIL) was originally incorporated as Eveready Company
India Private Limited. The company’s tea is marketed under the registered Elephant trade
mark, Company offers a wide range of retailing options for clients. Many of tea factories have the
facility to pack tea in a Vacuum form, resulting in clients receiving a uniquely fresh product. McLeod
Russel produces high quality Orthodox and CTC varieties of black tea. The group has a state-of-the-
art blending facility that accommodates all of the client's blending requirements which received
HACCP certification in 2008 (UK Tea Council 2012).

2.1 McLeod Acquisition

The bulk Tea Division of Eveready Industries India Limited with all assets (including 28
estates), Liabilities and Rights has been transferred in the company with retrospective effect
from April 1 2004. The name of company was changed to McLeod Russel India Private Ltd.
In July of 2005, McLeod Russel had acquired Borelli Tea Holdings Ltd from the Magor
family based in England and took over the 17 gardens of its Indian Subsidiary Williamson
Tea Assam Ltd, with further acquisition of Doom Dooma Tea Company and Moran Tea
Company in 2006-2007 respectively. In Oct, 2007, Moran tea company (India) became as a
subsidiary of the company. The BOD of the company had approved the scheme of
amalgamation of The Moran Tea Company India with McLeod Russel India during February
of the year 2008 with requisite majority (IIFL 2012).

Recently, the company plan to fund the acquisition of two Rwanda tea plantations via internal
accruals. This deal will give 7 million kg out of 20 million kg in Rwanda which is 25-30% of
the market share (Money Control 2012).



3.0 SITUATION ANALYSIS

According to D. Power (2012), a situation refers to the general position or context that a
person or organisation is operating within at a specific point in time. A situation analysis
defines and interprets the state of the environmental of a person or organisation.

From a strategy-making standpoint, the purpose of situation analysis is to determine the
feature in a company’s internal/external environment that will most directly affect its
strategic options and opportunities (Chaneta 2012). The situation analysis or audit, described
as the ‘where are we now’, is the means by which a company can identify its own strength
and weakness as they relate to external opportunities and threats (Vrontis and Thrassou
2006).

The financial year 2008-2009 saw a great economic depression worldwide, affects Indian
export, economy and finance. Consequently, the rate of inflation, interest rates and the stock
market indices which had touched their peaks had started declining rapidly. The stock of
foreign exchange declined from $330 billion some six months before to 245 billion by the
first week of December 2008 and the BSE index declined from over 20000 during the early
months of 2008 to 9000 during the last week of November 2008 (Kumar 2012).

The year 2008 registering a decline of 5.61 million kgs over the production level of 986.43
million kgs achieved finally during 2007. The year 2008, the Indian tea industry recorded its
finest performance in a decade with price realizations first achieving and the sustaining new
heights (Tea board 2009). During the year MRIL reach 26% higher compared to the turnover
recorded in the previous year (Annual report 2008).

3.1 Market Summary

India produced 966 million kg of tea in 2010, of which 76 percent is produced in the North-
Eastern states. Being the largest consumer of tea, it consumes 837 million kg in 2010. About
203.86 million kg tea is exported from India which brings about US $ 413 million as foreign
exchange for the country per annum (Hazarika 2011).
MRIL is engaged in the cultivation processing and sale of tea. The company primarily
produces Crush, Torn and Curve (CTC) tea, which accounts for more than 90% of its



production; the rest of the tea manufactured by the company comprises the orthodox variety.
McLeod has 39,358 hectares under tea cultivation globally (McLeod Report 2012).

Over the last 2 to 3 yrs, McLeod Russel has followed the inorganic route and doubled the
plantation capacity to 87mn Kg domestically and has further consolidated its position
globally by adding 20.2mn Kg. Through a series of acquisition plantations in North Indian
(Assam) belt. The company expects operating 30% on the back of crop shortfall with group
consolidate production of 104.5mn Kg (Mehra and Doshi 2012).

Vietnam India
5% 77%

Africa
18%
Figure 1: Mix of Consolidate Group Production Source: (Mehra and Doshi 2012).

3.1.1 Global and Domestic Scenario

Global Scenario

Cultivation of tea is spread over all the continents except North America with wide range of
agro-climatic conditions. More than 30 countries grow tea. The estimated global production
is 3800 million kg of which 43% is exported, with the world consumption around 3700
million kg, the global production and absorption remain finely balanced with production little
ahead of demand (Tea board 2009).



Figure 2: Tea production in key tea exporting countries (million kgs) Source: (ICICI direct
2009).

Amongst all tea producing countries, the major producers are India, China, Sri Lanka and
Kenya. These five countries contribute 77% of the total world population and 80% of global
exports, while India and China ranks the second largest respectively, in tea production as well
as consumption. They export about a quarter of their production. In global trade India’s
contribution is 17% while that of china is 17.6% and the production contributes of 30% and
23% respectively (Majumdar et al 2010).

Figure 3: Global Productivity of tea Source: (Majumdar 2010)



Domestic Scenario

India is the largest consumer and second largest producer of tea in the world. Accounting for
around 40% of the world’s black tea production, has been lagging behind consumption during
the last few years. This has resulted in shrinkage of tea inventories from 306.9 million kg in
2006 to 220.7 million kg in 2009. It is expected to be 206.5 million kg in 2010E, which is just
2.9 months of consumption (lower than the five months of consumption in 2006). The
country has witnessed sluggish production growth of around 2.4% CAGR over 2002-2009. It
is unlikely to register any significant growth in the near term. This is due to the
comparatively lengthy gestation period of a tea plant and the lack of any new land under tea
plantation in the last few years (ICICI direct 2009).

Figure 4: Domestic tea carryover stocks (million kg)

Source: (Tea board: ICICI direct 2009)

3.1.2 Market Need and Trend

Need

The most basic concept underlying marketing is that of human needs. Human needs are states
of felt deprivation (Kotler and Armstrong 2012). All marketing should be based on
underlying needs. For each market segment included in strategy, explain the market need that
lead the group to buy product or service (Berry 2006).

India is the largest consumer of the beverage in the world consuming nearly 25% of global
tea production, about 74 percent of Indian adult population drinks tea regularly. The health
consciousness among Indians is increasing and they have started to recognise the benefits of



tea which is highly anti-oxidant, customers are willing to upgrade to upgrade to enjoy a better
quality product at all levels, entering into a branded segment or upgrading quality and flavour
within the branded offer (Jain 2012).

Trend

The tea is not just a drink the trend gets change now tea is a kind of one drink-for all reasons-
all seasons. There was a time when Indians used to think drinking coffee was cool and
sophisticated but, now the trend is changing, the Indian youth is getting more confident and
they don’t mind ordering the kind of beverage they want to have (Jain 2012). Green tea is
one of the fastest growing categories driven by its health benefits. This fast moving of market
trend gives rise of some factors for market, in 2005, the per capita consumption was 691 gm
while in 2008 it increased to 701 gms. Thus domestic market demand is going strong, though
gradually. Packaged tea is gaining grounds as people start favouring it over unpackaged ones.
Unpackaged tea, which is generally cheaper, is largely sold in rural India. (Research pedia
2011)

3.2 Macro environment (PEST Analysis)

The external (macro) environment or external analysis is to identify strategic opportunities
and threats in the organisation’s operating environment that will affect how it pursues its
mission (Hill and Jones 2009). The aim of this analysis is to identify the critical issues on
environmental that may affect organisation (Drummond and Ensor 2005).

Political

The tea industry in India is highly regulated, while the Tea Act 1953, and control production
and distribution activities (Arm Research 2007).

In addition to this central cess, states taxes, sales taxes, changes in laws regulations, poor
price realization, regulation towards labour, increase in cost of production, global warming,
climatic challenges, financial crises are the factors that affects the organisations macro



environment. However, the policies will include subsidies, price controls or guarantees,
import/export controls, quotas and tariffs, exchange rates etc. If a government facilitating
favourable policies there will be more opportunity to expand business for company (Das
2009).

Economical

When the price of a commodity falls, it becomes relatively cheaper than other substitute
commodities. This induces the consumer to substitute the commodity whose price has fallen
for other commodities, which have now become relatively expensive. As a result of this
substitution effect, the quantity demanded of the commodity, whose price has fallen, rises.
Income effect: When the price of a commodity falls, the consumer can buy more quantity of
the commodity with his given income, as a result of a fall in the price of the commodity,
consumer’s real income or purchasing power increases.

Number of consumers: When price of a commodity is relatively high, only few consumers
can afford to buy it, and when its price falls, more numbers of consumers would start buying
it because some of those who previously could not afford to buy may now afford to buy.

Social

Provide free accommodation and sanitation facilities to all employees. Provide free primary
education for employee’s children it achieved thorough construction of school in each tea
garden. Central Hospital provides advance facilities and good number of staff apart from the
medical facilities in every garden. Company has also initiated health care programme called
‘Mothers Club’ which provide guidance and awareness on health and hygiene related matters
in the region. Freedom of Association: Allows every employee the right to form and join a
Trade Union (Kadavil 2012).

Technological

The distributors and consumers are terribly concerned about demand, pricing and marketing
Availability of new genotypes, machinery, availability of Information, communications
technology, rotorvane feeders, rotorvanes, CTC machines, CFM's, twelve VFBD's, coal
stoves, boilers, milling machines, lathe machines. Not only technology, but also available of



more reliable information will also has an effect to the structure of the industry. (Brunett
2008).

3.3 SWOT Analysis
SWOT analysis is a device that helps business managers to evaluate the strength, weaknesses,
opportunity and threats involving in any business enterprise. Specially, SWOT is a basic and
candid model that assesses what a business can and can’t do, as well its potential
opportunities and threats (Ommani 2011).

INTERNAL ANALYSIS
STRENGTH WEAKNESSES
Single largest private sector company McLeod is purely plantation oriented
in the world with 39,358 hectare with no revenues from packaging
globally under plantation (McLeod (Annual Report 2012). This low
2012). diversification and increased demand
McLeod accounts for 7.8% of India’s supply gap can lead the weakness of
total tea production and 2% of global company.
tea production (Techn 2012). In introduction of mechanization of
fields operations, remote location of the
The Company manages to provide plantation and transportation of teas
improved/innovative products to the over long distance from tea garden to
consumers through research and sale points (IIFT 2009).
development.
EXTERNAL OPPORTUNITY THREATS
ANALYSIS India is largest consumer of Tea with
3% growth on annual consumption, Indian exports fell by 5 million kgs,
which increases gradually (Arm during 2010 on the back of strong
domestic demand and production
Research 2007).
shortfall. Domestic consumption is
Narrowing down of the gap between estimated to be around 860 million kgs,
supply and demand due to increased during 2010 (Baheti 2012).
growth rate of consumption in the Fast moving market trend, consumers
major producing countries(IIFT 2009) are willing to buy brand, they knows the
benefits of tea now the market trends
Demand for Orthodox teas by CIS and moves fast towards the green, organic,
Middle East countries during2010 was herbal tea, and low cost of production of
very strong. However, financial teas from Kenya, Vietnam, Indonesia
imbargo on Iran may affect the export etc, makes a threaten in Indian market
of orthodox teas in coming years (Jain 2012).
The production is largely dependent
upon vagaries of nature, high labour and
is also subject to follow labour laws,
exchange rate fluctuations, external
changes (government, politics, taxes
etc), price downfall brings threats for
the company



Stagnant production in India and carry
forward shortage should lead to firmer
prices in the country.

3.4 Competition

McLeod Russel is principally a CTC variety producer, accounting for 92% of its product mix.
The company is the largest producer, exporter of black tea from India.

India has dual manufacturing base India produces both CTC and orthodox teas in addition to
green tea. The weightage lies due to domestic consumer preferences. Orthodox tea production
is balanced with export demand and production of green tea is small. The competition to
India is Sri Lanka, China, Kenya, Indonesia and Vietnam (Thakur 2010). Aside from global
market Tata Global Beverage, Unilever, Bombay Burmah, Jayshree tea, Warren Tea etc, are
the vast domestic competitors of McLeod (Money Control 2012).

Figure 5: 1 Year Price Performance Source: (Fulletron 2012)

McLeod is purely Plantation Company, with largest production of CTC and black, while the
market competition demand more packaged, branded teas as well as the customers are more
influence towards green and organic tea and in order to achieve growth in market competition
the company must have to be diversified. The company plans to market its tea aggressively in
the domestic market through strategic tie-ups with renowned national packers (BSEIndia
2005). (APPENDIX 1)



Figure 6: BSE Market Shares Comparison Source: (CNBC Money Control, 2012)

4.0 MARKETING STRATEGY

The strategic planning process represents a set of steps a marketer goes through to develop a
strategic marketing plan (Grewar and Levy 2008).

With the brand MRIL, largest producer of tea but still Tata Tea, Unilever are the dominant
players in the market (John and Chandran 2008). MRIL has to introduce innovative
products in an existing market and focus on market development as well company has
advantage of market development and export to the new market of Afghanistan, Pakistan,
Russia and Egypt with the existing product. It is proposed that MRIL embarks on market
development strategy. Lifestyle of customers is changing who emphasize on health, brand,
and packaging. McLeod can capture this market by focusing on packaging and market
development (Kaushik 2010).



McLeod can take advantage of the positive press on the health benefits of tea. More and more
tea makers are adding green tea in their portfolio as customers in India are developing a taste
for the beverage of its many health promoting effects (Kumar 2009).

EXISTING PRODUCT NEW PRODUCTS

.
EXISTING MARKET PRODUCT
MARKETS
PENETRATION DEVELOPMENT

NEW MARKET
MARKETS DIVERSIFICATION
DEVELOPMENT

Figure 7: Market Expansion Grid Source: (Kotler and Armstrong 2012)

4.1 Market Objective

The company expects to increase the cumulative proportion of teas marketed through export
and private network and intends to create new packaging especially for institutional sales.
The company believe production would be stable, which would result in recovery in
production and realisation to increase by 10% in FY13E (ICICI direct 2012).

The company can enlarge capital in order to diversify into tea plantation such as green and
organic tea towards globally, particularly in the value added tea segment. Hence, marketers
also realise that exports are essential for the sustenance of industry but, Indian tea exports
have been losing to competition from Kenya, Sri Lanka, China and other new age tea
exporting nations. In this case it is extremely to search out new markets (IIFT 2009).

Diversification towards green tea- Green tea consumption in India is rising at a rate of more
than 10% annually. Traditionally, people drink black tea with sugar and milk. But, green tea
consumption will grow in the future because of its health benefits and awareness (Dassgupta
2012).



Retail Brand Image- Tea is the most common selling product in India. Small retail stores
dominant as the sales channel for tea. Brands like Tata Tea, Unilever and others are dominant
because of their strong retail market image. McLeod can easily penetrate in the market
because of large production of black tea in the world. Like green tea, tea bags are also a
growing category. Tea bags also command higher prices as compare to other categories, so
company can achieve that new market (Researchpedia, 2012). (APPENDIX 2)

4.2 Market Segmentation

The market share of product can’t get protected by serving the commodity market alone,
branding requires segmentation.

Geographical Segmentation

Geographical segmentation, call for dividing the market into different geographical units such
as nations, regions, countries. The company has annual production of approx 70.12 million,
in which the half is sold through auction and other half is divided equally for domestic as
well as for export. Recently, production has dropped in all tea producing nations of the world
while demand remains steady. Shortfall in Kenya works to advantage and CTC consuming
market will open up, export to Afghanistan and Egypt is on increase and volume to Pakistan
may pick up. An export to Egypt is likely to increase by more than 50%. Even Russia also
witness a growth in spite of economic crisis, people may shift from premium variety to less
costly varieties (Ravi 2009). However, the segmentation towards Asian countries as well as
UAE and Russia can brings opportunity for the company after a market decline in big export
markets of Russia and UAE (Dutt 2007).

Demographic Segment

Demographic market segment divided the market into groups, on the basis of age, gender,
income, social, religion, race, generation etc, clearly, a marketing war is brewing between
major players in the branded tea segment in India. Companies are offering wide range and
recently premium tea is quite common in marketing which costs, (approx, MRP 280+) is



expensive, as Tea is a fast moving goods are very common beverage in India, hence
customers may shift from premium to cheap economy brand (Financial Express 2012).

In India there are more than 5000 towns and over 6, 38,000 villages. Nearly 87% of these
villages have a population around 2000 people per village. However, branding is demanded
but if the company has segmented market than it may helps to achieve the big market of
economy segment.

Figure 8: Economy Segment of Branded Market Source: (FAO 2010)

4.3 Target Market

As the largest tea exporter McLeod maintains strong connection with buyers in Europe,
Middle Ease, and North America, which are target positioning market as well as the key
customers of the company If the company move towards the segmentation then a big market
of Russia, Egypt as well as target the domestic, economy, social market through develop new
products and new packaging market which can brings a better opportunity of 100% growth
for the company in upcoming four years.

4.4 Positioning

MRIL, world largest producer of black tea, company enjoys the strong position of tea export
market. McLeod exports to a number of countries and the premium markets of Germany,
Ireland, Netherlands and UK, which accounted for around 40 per cent of total exports in
FY2009. UAE was the largest export market for McLeod’s in FY09, accounting for
around 33 per cent of its export sales, followed by UK, which accounted for around 28per
cent of its exports (ICRA 2012). In order to further diversify its exports market company
plans to position in new geographical markets of Russia, Egypt, Pakistan and Afghanistan.



4.5 Marketing Mix

Marketing Mix is not a scientific theory, but merely a conceptual framework that identifies
the principal decision making. This tool can be used to develop both long term strategies and
short term tactical programmes (Goi 2009).

The world of market today is not as same as before in 60s or 70s, where marketers were king.
Product difference can last months, minute not years. Companies can successfully embrace
the new model of 4Es (Experience, Everyplace, Exchange and Evangelism) in their market
mix (Fetherstonhaugh 2009).

4.5.1 Product (Experience)

Product includes all features and combination of goods and related services that a company
offer to its customers (Kotler and Armstrong, 2012). The business has to produce a product
that people wants to buy and for this company has to decide which segment they are aiming
at, MRIL a leading black and orthodox tea and CTC tea production company, in such case if
the company opens a tea café or tea bars at their tea estate as well as other parts of city then if
will gives a nostalgic experience to customers which bring the customer loyalty for the
product as well plan to develop new product such as, green tea, herbal tea in the existing
domestic market in order to stable the domestic market position.

4.5.2 Promotion (Evangelism)

Promotional strategies include all means through which a company communicates the
benefits and values of its products and persuades target customers to buy. It is a marketer’s
bag of tool for communicating with customers and other stakeholders (Kotler and Armstrong
2004). Company plan to promote their product through press release, promotion campaigns,
T.V, radio advertisement and leaflets etc. Indians are more confident to buy value, cheap
products and free gifts, MRIL, can promote by offering free gifts with every purchase for
instance free pack of 250gm with the purchase of every 1 kg pack.

4.5.3 Pricing (Exchange)

Price is the one element of the marketing that produce revenue. In a simplest way it is a
concept of money that customers have to pay to obtain the product (Kotler and Keller 2012).
The price must be high to cover costs and make a profit but low enough to attract customer.



In tea export, the prices are mainly set by tea board, auctioneers, government policies and it
would be noted gain in prices from 2008 after a recession, company plan to adopt dynamic
pricing so that they can meet the characteristic and demand of customers.

4.2.4 Place (Everyplace)

Placement involves all companies that make the products available to the targeted customer.
Fertherstonhaugh (2009) said that now the trend is change customers create their own path,
we can’t interrupt people, so marketers need to understand the concept of everyplace, which
means full range of possibility in reaching people. McLeod is a tea plantation company, aside
for tea shops or tea markets, company uses virtual personal assistant system, so that their
customers can choose their tea as well as they can watch the plantation and brewing of tea on
webcam, mobile and plan to adopt effective distribution channel for hotels, restaurants,
institutional cafeterias this can helps the company to reach full range of possibility in
reaching people.

4.6 Financial Objective

The plan calls 100% growth for coming 4 years by the last plan with 21% net profitability
rate. Currently the target price of company is 370INR (4traders 2012). This plan assumes two
important trends:

First, a steady decline growth in gross margin percentage, which means company, has to take
more risk and implement the plan step by step.

Second, increase the total revenue growth of 7.1% Y-O-Y, by both sales volume and
marginal risk in tea price (ICRA 2012). (APPENDIX 3)

4.6.1 Break-Even Analysis

Break-Even analysis is a useful tool to study the relationship between fixed cost, variable cost
and returns. A break-even point defines when an investment will generate a positive return



and can be determined graphically or with simple mathematics (Gutierrez P H 2012). Once
the break-even point is met, assuming no change in selling price, fixed and variable cost, a
profit in the amount of the difference in the selling price and the variable costs will be
recognized (Kotler and Armstrong 2012). (APPENDIX 4)

FIXED COST
BREAK EVEN =
PRICE - VARIABLE COST

4.6.2 Expense Forecast

Effective marketing requires a very high percentage of sales and marketing expenses to sales
during the early years, Expenses divided over four main categories: advertising, public
relations, travel and website, a smaller budget is included for graphics and printing expenses,
and a substantial additional budget for contingencies. (APPENDIX 5).

5.0 IMPLEMENTATION AND CONTROL

Tight control measures to closely monitor quality and customer service satisfaction. This will
enable to react very quickly to monitor correct problem that may occur.

The Company has in place adequate systems of internal control commensurate with its size
and the nature of its operations. These have been designed to provide reasonable assurance
with regard to recording and providing reliable financial and operational information,
complying with applicable statutes, safe guarding assets from unauthorized use or losses,
executing transactions with proper authorization and ensuring compliance of corporate
policies.



The Company has an Audit Committee, the details of which have been provided in the
Corporate Governance Report. The Audit Committee reviews Audit Reports submitted by the
Internal Auditors. Suggestions for improvement are considered and the Audit Committee
follows up the implementation of corrective actions. The Committee also meets the
Company's statutory auditors to ascertain, their views on the adequacy of internal control
systems in the Company and keeps the Board of Directors informed of its major observations
from time to time. The Risk Management Policy adopted by the Company has further
strengthened the internal control system (Baheti K 2012).

Human Resource

Tea Industry is highly labour intensive. The Company employs over 80,000 personnel at its
Tea Estates and other establishments in India. Employee relations remained satisfactory
during the period under review. The Company would like to record appreciation of the
wholehearted support and dedication from employees at all levels in maintaining smooth
production and manufacture of tea from all the Tea Estates during the year.

Operations and Research

Company needs continuous market research to understand brand awareness and brand
attitude among their target market as well as an effective operation, lean management and
long term procurement policies

Finance

Financial ratios have improved substantially over last couple of years. Gross debt
(consolidated) as on 31st March 2011 amounted to Rs. 316 crores as compared
to Rs. 402crores as on 31st March, 2010. Internal generations have been used to reduce the
debt byRs.86 cores during the year.



CONCLUSION

Marketing plan is a process that leads the marketing strategies towards achieving the
marketing objectives. The lifestyles of Indians are such that convenience has become more of
a necessity rather than luxury. Any product which has the matter to fulfil consumer’s need for
convenience, are more successful than any other product in the subject market. The positive
environment for tea publicity and the need for convenience have made the tea industry a
successful one. It’s been the whole decade now that tea industry is getting more popular due to its
advertised health benefits. Researches show that the advantages of tea range from low energy
level to the improvisation of major fitness and declining chance of cancerous disease. Many
tea products have come up with innovative features to have an advantage of the booming and
growing market. The R&D department of MRIL is focused on branding and the innovations
of Black as well Green tea. Effectively step by step implementation and control of marketing
plan not only helps the company to achieve objectives but also helps to retain customer’s
loyalty. In India people are very much loyal towards their brands, is tough for competitors to
move them. Proper value of their money and attractive marketing promotions leads the
McLeod to achieve their targets.



LIST OF FIGURES

FIGURE 1

Mix of Consolidate Group Production………………………………………………..09

FIGURE 2

Tea production in key tea exporting countries (million kgs)………………………….10

FIGURE 3

Global Productivity of tea………………………………………………………………. 10

FIGURE 4

Domestic tea carryover stocks (million kgs)……………………………………………11

FIGURE 5

1 Year Price Performance………………………………………………………………15

FIGURE 6

BSE Market Shares Comparison……………………………………………………….16

FIGURE 7

Market Expansion Grid………………………………………………………………….17

FIGURE 8

Economy Segment of Branded Market………………………………………………...19



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LIST OF APPENDIX

Appendix 1: CPM (Competitive Profile matrix) MATRIX

CFS McLeod Russel Tata Tea Hindustan
Unilever
WEIGHT RATING SCORE RATING SCORE RATING SCORE

ADVERTISING 0.2 1 0.2 3 0.6 3 0.6

PRODUCT QUALITY 0.1 3 0.3 2 0.2 4 0.4

PRICE 0.1 2 0.2 3 0.3 4 0.4
COMPETITIVENESS
MANAGEMENT 0.1 2.5 0.25 3 0.3 3.5 0.35

FINANCIAL POSITION 0.15 3 0.45 2 0.3 3 0.45

CUSTOMER LOYALTY 0.1 2 0.2 4 0.4 3 0.3

GLOBAL EXPANSION 0.2 3 0.6 2 0.4 3 0.6

MARKET 0.05 2 0.1 3 0.15 4 0.2

TOTAL 1 2.3 2.6 3.3

1= major weakness, 2=minor weakness, 3=minor strength, 4=major strength



Steps of Preparing CPM Matrix
List key external factors as identified in the external audit process. Include 6-10 factors,
including both opportunities and threats, that affect the firm and its industry

Assign to each factor a weight that ranges from 0.0 (not important) to 1.0 (very important).
The weight indicates the relative importance of that factor to being successful in the industry.
Weights are industry-based. Sum of all weights must equal 1.0

Assign a 1 to 4 rating to each key external factor to indicate how effectively the firm’s
current strategies respond to the factor, where 4 = the response is superior, 3 = the response is
above average, 2 = the response is average, and 1 = the response is poor. Ratings are
company-based.

Multiply each factor’s weight by its rating to determine a weighted score

Sum the weighted scores for each variable to determine the total weighted score for the
organisation



Appendix 2: SMART MATRIX

SPECIFIC The Objective have to be clear, the company of ‘McLeod Tea’, must
achieve the selling objectives. The turnover to reach will not be the same
in the different market because company make the selling objectives
according to the size of the target market, the frequentation, the type of
the clients.
MEASURABLE Company has to follow the different targets in the sales outlets and if
each shop allowed to reach the objectives. The measures the sales
company can calculate the sales by weekly or monthly, in order to
understand how the client bought the product. With these data company
can improve the strategy and the sales. The commercials can ask to the
supermarkets to put the product in different way or to make more
promotion
ACHIEVABLE The targets have to be realist. If company reach to win clients from main
competitors (in a first time) and from the other tea brand (in a second
time), the sales would be grow increase. The firm should have a long
term’s vision and should be reactive in front of decisions or problems
which can occur.
RELEVANT The objectives have to be founded on fact and not on supposition. The
company has to respect its general strategy and its image. The firm
should take into consideration the sales of its competitors in order to be
based on relevant objectives.
TIME Each objective should have a deadline. It can allow measuring the
TARGETED different sales of the day, week, month, according to these data, the firm
can change objectives or make promotions to reach these objectives.



APPENDIX 3: REVENUE FORECAST (Y13)

01/15 03/06 04/25 06/14 08/03 09/22 11/11

Corporate Identity Revision

PR Development Quotes

Website Online

Standard Page Brouchers

Personal Speaking Campaign

Targeted Advertising

Press Release 1

PressRelease 2

ACTION START DATE END DATE BUDGET(INR)
Corporate identity 15-01-2013 15-04-2013 50,000
revision
PR development 01-02-2013 29-09-2013 1,00000
quotes
Website online 01-01-2013 28-02-2013 80,000
Standard page 15-02-2013 21-04-2013 25,000
broachers
Personal speaking 20-04-2013 06-11-2013 80,000
campaign
Targeted 15-06-2013 18-09-2013 40,000
advertising
Press release 1 15-09-2013 16-09-2013 30,000
Press release 2 15-11-2013 16-11-2013 30,000
TOTAL 4,35,000



Appendix 4: ACTION PLAN (2013-2016)

(FOR FIRST YEAR)

MARKETING ACTION RESPONSIBILITY CONTROL TIME COST
STRATEGY (INR)
Marketing Start with an integrated Marketing managers Monthly sales It will done 1,500,000
communication advertisement on T.V, figure in two
campaign radio, internet, print shifts from
newspaper campaign Jan-May
ads on supermarkets 2013 and
and streets. Sept-Nov
2013
Marketing Sales promotion Marketing managers, Count Nov 2013- 25,000
promotion campaign and exhibit at Sales Personnel, customers and March
campaign the major industry trade Counter staff monitor Sales 2014
shows to educate Supervisors per month
customers, dealers and
generate channel
support for the existing
product. It will create a
buzz by providing
samples to selected
dealers, super markets

Organise promotional Marketing managers, Count Feb 2013 50,000
events and it will add Supervisors, Hostesses participants
sales promotions such
as a contents in which
customers post their
experience their
feedback on company
website and company
will also distribute new
point of purchase
Hold a trade sales Marketing managers, Produced Oct 2013- 20,000
contest offering prizes Promotional Output figures Jan 2014
for the salesperson and managers.
retail or organisations as
well as promotional
offers in terms of free
gifts with every
purchase



Organize sweepstake Marketing managers Jan 2013- 50,000
“Holiday trip” Feb 2014
Loyalty scheme “Point Marketing managers, Customers Whole year 10,000
system” Customer service taking use of
point system
Distribution of free Marketing managers, Count First week 10,000
samples to customers at Cashier, Supervisors customers of Nov
cash point 2013 –Dec
2013
Plan to roll out a new Marketing managers, Customer Aug 2013- 50,000
national advertising Promotional count Oct 2013
campaign, the radio and managers.
T.V ads will feature
celebrity voice telling
the quality and effects
of product

ACTION PLAN (FOR SECOND, THIRD and FOURTH YEAR)

MARKETING ACTION RESPONSIBILITY CONTROL TIME COST
STRATEGY (INR)
Product Launch Plan to roll out a Marketing managers, Customer 1st (Jan-Apr) 25,000
campaign campaign for the Sales personnel, count and and 2nd
promotion of new Counter staff count (May-
product launch and to Supervisors participants Aug)Quarter
educate dealers and of 2013
customers to generate
a channel support for
new products
Product launch Marketing managers, Monitor sales 3rd (Sept- 50,00000
Sales personnel per month Dec)Quarter
of 2013
Marketing Start with an Marketing managers Monthly sales 1st (Jan- 1,500,000
communication integrated figure Apr) and
campaign advertisement on T.V, 3rd (Sept-
radio, internet, print Dec)
newspaper campaign Quarter of
ads on supermarkets 2015
and streets.
Plan to add more new Marketing, Sales and Count and 2nd (May- 50,000,000
products in existing operation personnel monitor Sept)
product line monthly sales Quarter of
2015
Branding and Organise promotional Marketing managers, Count 1st (Jan-Apr) 50,000
Marketing events and it will add Supervisors, Hostesses participants Quarter of
promotion sales promotions such 2016
as a contents in which



customers post their
experience their
feedback on company
website and company
will also distribute new
point of purchase
Plan to roll out for Marketing managers, Customer 3rd (Sept- 50,000
more attractive Public relationship participations Dec)
packaging and managers and Quarter of
maintain public supervisors 2015 and
relationship 2nd (May-
Aug)
Quarter of
2016
Marketing Research Marketing and Sales Count Jan-Mar and 20,000
personnel participation Nov-Dec of
every four
year


STRATEGIC MANAGEMENT

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