Proceedings of International Conference on Advances in Tea, 12-13 August 2017, Sri Lanka,
Tea marketing: looking towards digital strategies
Bandara NPSN
Agronomy Division, Tea Research Institute, Ratnapura 70000, Sri Lanka
*
Corresponding author: shyamantha.bandara@yahoo.com
Introduction
Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large, according to the definition of
American Marketing Association (2013). With the invention of digital media,
there is a new frontier of digital marketing, which is a new form of human
communication. As a result, marketing has undergone significant changes in the
way information is delivered to customers (Mangold and Faulds 2009).
Particularly, social networks, as a part of Web 2.0 technology, provide the
technological platform for the individuals to connect, produce and share content
online (Ellison 2007).
As a result of changes in marketing environment, digital marketing strategy has
become a necessity for any business to succeed in competition. In simple terms,
without digital marketing strategy, a business will miss the opportunities and lose
business (Ryan and Jones 2014). This argument has a profound importance to
the Sri Lankan tea industry, in a period where tea is becoming popular among
young generation in niche markets like USA. Digital marketing is fast gaining
grounds in the markets like USA. In spite of that, Sri Lanka tea is facing a
challenge presently with continuously declining exports (Economy Next 2016).
Introduction of digital media has made the whole marketing more complex and
has widened the gap in marketing (Day 2011). Usually while the technological
gap mainly favours the developed countries and the gap of internet use is
widening between developed and developing countries (Guillén and Suárez
2005). Export oriented industries in the developing countries, need to properly
study and plan, not only to minimize the marketing gap, but perhaps to lead and
gain market advantages.
For any successful implementation of digital marketing strategy, it is essential to
evaluate the present situation of the business/industry. In terms of Sri Lanka tea
industry, the situation is somewhat perplexing and need careful understanding
as it is more of a business involving millions of international customers as well
as a producer base, involving millions of people in remote places, hostile for any
other industry. Emergence of more open world economy, globalization of
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customer taste and expansion of internet access around the globe all increase
the interdependency and interconnection of nation economies across the globe
(Doole and Lowe 2008) and it makes again highlight the importance of
understanding the global tea business to design a marketing strategy. Tea is one
of the crop among tropical beverages, where gap between the producer
countries and developed north has only grown wider in recent decades (Talbot,
2002). Besides the survival of Sri Lanka tea industry, defining and reshaping the
industry within global marketing would be a fillip to nation’s economy as well.
For the reason that international marketing is the best way to raise the national
power (Czinkota and Ronkainen 2012).
In this article, we examined some of the basics of digital marketing with
reference to Sri Lanka tea industry, analysing the basic elements required for
successful digital marketing strategy, giving parallel analysis to the industry
performers. Finally, it gives some suggestions for consideration to develop a
digital marketing strategy for Sri Lanka tea industry.
Marketing scenario of Sri Lankan tea
Sri Lanka tea, popularly known as Ceylon Tea, industry is the largest export
earning agriculture product in Sri Lanka. It accounts for nearly 1% of Sri Lanka
GDP (Central Bank of Sri Lanka, 2015). Though, there is a growth in production,
recent price declines have created threat to the industry, creating economic
strains (Economy Next 2016). Continuous volatility of major export markets of
Russia, Turkey and other Middle Eastern countries has driven the market prices
further down. The looming economic uncertainties in the middle eastern
markets could further drive the Sri Lanka tea market prices down.
In contrast, there are improvements in tea markets in the developed markets like
the USA. The USA tea market, estimated to be valued at US$ 10.84 billion
(Goggi 2014) in 2014. Table 1 shows the strong growth rate of USA tea market,
from US$ 1.84 billion in 1990 to US$ 10.41 billion in 2013. While traditional
markets show a modest growth, Ready to Drink category has shown an
exponential growth, from 0.2 billion US$ in 1990 to 5.10 billion US$ in 2013.
However, though US tea market has shown a heathy growth, Sri Lanka tea has
not tapped the necessary potential (Morrel 2009). Hence there is a huge potential
for the Sri Lank tea industry tap the potentials of the USA tea market (Table 1).
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Table 1. Total tea sales in the USA, according to different market segments.
Amount in US $ billions (Source: Goggi 2014)
Year
Traditional
Market
(Supermarket, Drug and Mass
Merchandisers)
R-T-D
Food Service
Specialty Segment
Total Sales
1990
2012
2013
2014
(est)
0.87
2.30
2.40
2.51
0.20
0.50
0.27
1.84
4.80
1.12
1.57
9.79
5.10
1.18
1.73
10.41
5.23
1.20
1.90
10.84
According to industry analysts, instead of defending the market position
vigorously, Sri Lanka is conceding the market share to relative new comers (Ali
et al 1997). End result could be the crisis, Sri Lanka tea producers experiencing
today. The market model for Sri Lanka tea is shown in the following figure 1.
Though it was based on the pre digital era marketing module very little has
changed. Still 70% of the global tea sales are sold through auctions and 30%
through private sales (Groosman 2011). There is a window opening through
digital marketing to revamp the Sri Lanka tea marketing (Figure 1)
Figure 1. Tea distribution chain, prior to emerge the digital marketing concepts
(UNCTAD 1984)
Present generation consumers and their behaviour
For any product, its own survival depends on the acceptance of the consumer.
If the consumer accepts a particular product and making a demand for the
product, then there will be a market place for such product or brand. In that
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sense it is essential for any brand to identify the behaviour of present day
consumers. Information technology development and availability of internet and
the availability of internet at an affordable level, unlike other technologies, have
changed the consumer behaviour in modern societies.
Consumer behaviour in present day is different from the consumers in the era
where information technology was not available. It is same with the consumer
decision making process as well. The funnel metaphor is where consumers
started with a large number of potential brands and then narrowing down to buy
a brand. In this scenario, customer relationship with brand after purchasing
usually related to product use or after sales only (Edelman 2010). However, the
present day consumer behaviour is best described through consumer decision
journey (Court et al 2009). According to the customer decision journey, rather
than narrowing down the brand selection, the customers add and subtract brands
from a group of consideration during an extended evaluation period. Open
ended relationship with the product is built after the purchase, sharing their
experience online (Edelman 2010).
Changes in the consumer behaviour is well reflected among the new generation
attitudes. New generation of customers can be classified according to their habits
or age limit. Generation C (Gen C) are a set of customers with different consumer
culture, where who care deeply about creation, curation, connection and
community (Google 2013). Present day marketers try to maximize this consumer
behaviour for maximizing the brand marketing. The term “Google Generation”
is a popular phrase that refers to young generation, born after 1993, growing up
in a world dominated by internet (Rowlands et al 2008). Though Generation C
is sometimes used as a synonym to describe the millennials, not only millennials
in the developed countries, belongs to Generation C. They can therefore be
found in any society, with digital communication technologies. In other words,
consumers belong to Generation C can be found virtually in any country in the
world (Figure 2).
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a
b
Figure 2. Consumer decision journey (a) conventional marketing, (b) digital
marketing (Edelman 2010)
Content marketing as the base of digital marketing
There are several definitions for content marketing. One is the marketing and
business process for creating and distributing relevant and valuable content to
attract, acquire and engage a clearly defined and understood target audience –
with the objective of driving profitable customer action (Content Marketing
Institute 2015). Though the concept of content marketing is not a new practice
for the brands to increase their sales by means of attracting the customers through
educational, informational or entreating approach, significance of content
marketing has been increased with the expansion of digital marketing (Baltes
2015). Social media has become the gateways for the brands to reach their
customers through means of content marketing. Final objective of these
exercises would be the increase the loyalty of the customers to make a faster
pathway in the consumer decision journey, through loyalty loop (Figure 3).
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Figure 3. Global highlights of percentage creating content at least once a month
among Gen C (Ipsos MediaCT 2014)
Negative image building for brands/ industry
Consumers ability to respond to the brand messages or experience or any
stimulus either in positive or negative way is a main characteristic of the digital
marketing, when comparing to conventional marketing. While the brand wish
is to see more positive comments and shares for their brands, it also should be
aware of any negative brand sentiments developing in the online community.
Since the digital channels are more democratic and liberal and widely spread, it
is very difficult for the brand to limit the spread of such messages, it can respond
authentically to dilute the negative effects, or perhaps to convert the negative
comments into more positive strong platform for the brand.
Faster, stronger and virally spread negative image building for the
brands/industry in the online community is a kind of cultural black lash,
characterized as “doppelgänger brand image”. Doppelgänger brand image is a
family of disparaging images and stories about a brand that are circulated in
popular culture by a loosely organized network of consumers, anti-brand
activists, bloggers and opinion leaders in the news and entertainment media
(Thompson et al 2006).
Sri Lanka tea industry particularly needs to be aware about the negative brand
images created by the activists, bloggers and other consumers. Though, there
are no direct threats online, there are reports about some illegal practices in tea
industry in some other countries (Stop the Traffik 2015). One of the weaker areas
of Sri Lanka tea industry is the labour housing in tea estates. However, to counter
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such negative comments, there are some more positive points available in Sri
Lanka tea industry, like free from child labour, pricing formula for private tea
farmers and minimum wage policy.
Tea brand presence in the online market places
Behaviour of different brand presence in the digital market place is important for
a business to make strategic decisions on marketing. Google is the largest search
engine on the desktop with nearly 70% of search engine market share
(Netmarketshare 2016).”Google Trend” is a free tool to evaluate the popularity
of any term or brand in the online search engines. Trends in online search query
data have been useful in providing models of real world phenomena (Mohebbi
et al 2011). Web based queries are used to detect early detection of epidemics
(Ginsberg et al 2009). Following graph shows the popularity of some tea brands
based on search terms used online (Figure 4).
Figure 4. Google search trend of different tea brands from 2004 to 2016 (Google
2016)
Dilmah is a brand of Ceylon tea, owned by Ceylon Tea Services PLC, with a
turnover of US$ 50 million (7,337 million LKR) in 2015 (Ceylon Tea Services
PLC 2015). The company sales range of tea products, including loose black tea,
green tea, organic tea and ready to drink tea. Lipton is a brand owned by
Unilever, and it is a major player in the US tea market (Bailey 2015). David’s tea
is a Canadian tea retailer, founded in 2008. It is a company which has grown
fairly faster way, opening more tea boutique. The company has 201 stores across
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Canada and the US. It outsources tea from many countries, including Sri Lanka.
Tetley is the second largest manufacturer and distributor of tea, which belongs
to Tata Global Beverage Company. Pure Leaf Tea is an Iced Tea brand marketed
as a partnership between Pepsi Co and Unilever. According to the graph, Lipton
has a strong search base, followed by Tetley, until 2014. Davids Tea has
surpassed the Tetley, through it is a new entrant to the market. Dilmah too has
shown consistent level of search index during the period. Figure 4 also shows
the seasonal variation of search index. Usually, there is a high search demand
during winter periods.
Presence in social media
Social media is very active platform among new customer segment. About 67%
of Generation C customers, upload their own photos to social networks and 88%
has their own profile with US$ 65 updating it daily (Google 2013). Table 5 shows
the distribution of the tea brands in Youtube, Tweeter and Facebook. In
relationship with high search volume of Lipton, it has more views on Youtube,
highest Tweeter followers and highest Facebook likes. Growth of social media
is not related to the age of the brand presence. For example, David’s Tea has a
very rapid growth into the social media, though it is a new comer to the market
(Table 2).
Table 2. Social media matrices for some popular tea brands (Statistics for Teatley
green tea channel has been used for Youtube) as at 2016-07-01
Social Media Channel
Youtube
Tweeter
Facebook
Subscribes
Views
Joined
Tweets
Followers
Likes
Likes
Dilmah
Lipton
655
668,930
Nov 2009
1,388
2,813
577
1,761,733
12,586
14,532,478
Feb 2006
~23,000
~48,500
2,664
6,904,396
David’s
Tea
1,875
200,896
Mar 2009
159,000
~80,000
1,452
248,049
Tetley
770
353,533
Jan 2014
~14,700
~98,300
7,220
147,832
Geographical distribution of search
For any global product distributor like tea, finding the places from where more
search results would arrive is important for the developing market strategies.
Market orientation is the key thing for success, especially for a new product
(Wren et al 2000). Table 2 shows the demand for certain tea varieties based on
their geographical reference. Most widespread distribution was found to be for
the term Darjeeling Tea. It shows a healthy distribution pattern globally. The
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Proceedings of International Conference on Advances in Tea, 12-13 August 2017, Sri Lanka,
term Ceylon Tea too has some interesting from few countries. However, for the
terms like, Kenya Tea or Sri Lanka tea, search has been confined to the producer
countries, it self (Table 3).
Table 3. Geographical distribution of different tea search terms (Google 2016)
Darjeeling
Region
Ceylon Tea Sri Lanka Tea
Kenya Tea
Tea
Sri Lanka
100
100
0
0
Australia
3
0
30
0
Canada
2
0
30
0
United
2
0
38
0
Kingdom
United States
2
0
29
0
India
1
0
90
0
Germany
0
0
33
0
Spain
0
0
17
0
France
0
0
11
0
Japan
0
0
21
0
Kenya
0
0
0
100
Taiwan
0
0
100
0
SWOT analysis on Sri Lanka tea industry for digital marketing readiness
Digital marketing has become a part of the total marketing strategy for any brand
or industry. In a period with uncertain global markets and turmoil market for
Ceylon Tea (Economy Next 2016), the concepts of digital marketing can be
evaluated to evaluate the readiness of the industry for implementing digital
marketing strategies. SWOT analysis is one way to analyse the ground situation
and readiness of the industry to suit the new marketing frontier.
Table 4 shows a SWOT analysis on Sri Lanka tea industry’s readiness to venture
into the digital marketing. The industry has to be analysed with the completion
from other tea industry players in mind. Here for the Sri Lanka tea would face
main competition from Indian tea industry, Kenya tea industry as well as other
emerging players like, Vietnam and Indonesia. Sri Lanka tea industry possess
many threats strengths to build up a successful campaign. One of the main
threats would be the close work of competing countries with the developed
markets. While African countries are working closer with European countries.
Kenya’s total national production has percentage of 23.1, 40.4 and 8.4 as
Fairtrade International, Rainforest Alliance and UTZ Certified certifications
respectively, whereas for Sri Lanka’s representative percentages are 7.1, 3.4 and
0.4 respectively (Table 4).
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Proceedings of International Conference on Advances in Tea, 12-13 August 2017, Sri Lanka,
Table 4. SWOT Analysis on Sri Lanka tea industry to venture into digital
marketing
Strengths
Weakness
Communication facilities
Resistance to change
Organized system
Language barrier
Geographical uniqueness
Slow adaptation of technology
High literacy
Poor infrastructure
Strong labour laws
Erstwhile production systems
Opportunities
Threats
Global consumer base
Fast changing systems
European background
Industry affiliations
Strong and rich heritage
Production landscape
Natural biodiversity
Large pool of IT resources
Scenic beauty
Strategies for Sri Lanka tea industry to succeed in digital marketing
Ceylon Tea or Sri Lanka Tea is an umbrella term for the tea produced in Sri
Lanka. Several companies market Ceylon Tea under their own brand names.
For any industry to sustain global market, it needs to get adjusted for the digital
era. Because, impact of internet will be captured and integrated into the
practices of large established companies, and impact is already evident (Gereffi
2001). Following are some ideas for the tea industry to sustain in the digital era.
Improving market intelligence and customer reactions, trending in more
advanced ways to monitor customer preferences and thoughts.





Reviewing the production chain lines to standardize according to the
requirements of customers, developing new standards to suit the digital
era.
One grey area needs the attention would be housing of estate workers.
Developing content marketing strategies using social media, blogs etc.
encouraging companies, factories, estates, other individuals to create
content, building positive image and getting the attraction of new global
customers.
Involving customers as co-creators to use their creative ideas for
marketing. Strong heritage of the Sri Lanka tea industry, its roots to
western creators in past centuries, like scenic estate bungalows, factories
and their creators.
Minimizing the digital divide among tea stake holders and related
institutes. Continuous monitoring and awareness program will be
essential in this regard.
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Conclusions
Tea is one of the crop that can only be grown in tropics profitably, and consumed
mainly in the developed countries in the north. However, international
inequality persists yet in the marketing chain (Talbot 2002). Forward integration
in the marketing chain is the strategy so far to minimize this widening gap in
commodity market. However, digital tools and digital marketing environment
are very good platforms to integrate into minimizing the trade gap and uplifting
the economy of developing countries, like Sri Lanka.
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