New Zealand

1
New Zealand

• Julie Prinner, Rachel Lehman,
• Liz Ferneding, Brad Rowley

2
Product
3
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 dont 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.

4
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.

5
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.

6
Price
7
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.

8
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 Zealands Beverage
  market
• Energy Drinks
• Lift Plus
• Powerade

9
Place
10
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 Zealands geography.
• Due to the unusual terrain of New
  Zealand distribution issues such as
  transportation issues could arise.

11
Place

• Geography
• Population Density
• Approximately 80 of the population lives in New
  Zealands major cities.
• Iced tea would mainly be sold in cities like
  Auckland and Christchurch.

12
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

13
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.

14
Place

• Current Distribution Methods
• There are over 75 New Zealand companies involved
  in manufacturing and importing RTD beverages
• PCNA 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

15
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

16
Place

• Trade
• Export Partners
• Australia accounts for 21.8 of New Zealands
  export business
• Import Partners
• Australia controls 22.2 of New Zealands 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.

17
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.

18
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 Zealands
  supermarkets.

19
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.

20
Promotion
21
Promotion

• Consumer Behavior
• New Zealands 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 markets value.
• Since there is a growing market for iced tea, it
  would be wise for Lipton to enter the emerging
  market.

22
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.

23
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.

24
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.

25
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.

26
Promotion

• Newspaper and Magazines
• Newspaper and Magazine advertising is cheaper
  than television advertising, but less likely to
  be seen.
• 80 of New Zealanders get a daily newspaper.
• Magazine consumption is dominated by women in New
  Zealand.
• Three of the six top selling magazines are
  womens magazines.
• NZ Womans Weekly
• Woman's Day
• Australian Women's Weekly

27
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

28
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.

29
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