Exploring the Australian
Market:
Lipton R.T.D. Iced Tea
Caroline Bintz
Kevin Donohoe
Mike Holt
Amber Miller
Sara Vineyard
Quick Lipton Facts
• Current Global Market Share (2000): 9.5%
• Flavors: 9 flavors
• Kroger, Walgreen's, Meijer, etc.
Australia at a Glance
• Land mass equal to U.S.,
but population
equivalent to the greater
Los Angeles area.
• Majority of population
located on the coast
• Age as of 2004:
– 0-14 years = 20.1%
– 15-64 years = 67.2%
– 65+ years = 12.8%
• 20% of population born
outside of Australia
Consumer Behavior
• The R.T.D. tea market in Australia is of a much smaller scale as
compared to that of the United States.
- Australia market – 0.4 million liters in 2002
- U.S. market – 1,878.3 million liters in 2002
• The Australian R.T.D. tea market saw a 37.50 percent decrease in
volume sales over the years of 1997-2002; whereas the U.S.
experienced a 32.46 percent increase during this same period.
• The RTD tea market experienced a 55.57% decrease in value sales in
Australia from 1997-2002.
• Forecasted sales for RTD tea in 2005-2007 are only 0.3 million liters
per year.
• Recent trend towards high quality, value-added food products.
• Consumer spending on non-alcoholic beverages in Australia were
$5.17 billion in Australian dollars in 2001.
PRODUCT
Product / Place / Price / Promotion
Competition
• Cadberry Schweppes Australia
- Manufacturer of sugar confectionery and soft drink.
- Brand Share of market for fruit drinks: 4.7%
- Types: Oasis, Passiona, and Sunkist
• Berrivale Orchards Ltd.
- An association of cooperatives producing fruit, fruit juice and
other foods.
- Brand share of market for fruit drinks: 8.3%
- Types: Berry Fresh, El Fresco, and Sunrise
Product / Place / Price / Promotion
Labeling & Packaging
• Australia /New Zealand Standards code states that there are
percentages of key ingredients and main ingredients that may
cause allergies.
• U.S. exporters should ask their Australian importer to ensure
that their products comply with Australian Federal and State
Government labeling regulations.
– Australian laws mandate that pre-packaged goods are to be labeled
with a true description of the goods in clear contrast to the background
graphics, nor may they falsely represent any crucial information
pertaining to the product.
• Cans sold by Coca-Cola; packaged in 10’s and 30’s.
• Cans sold by Pepsi; packaged by 24 case.
Product / Place / Price / Promotion
Recycling/Packaging
•
Legislation has provided incentive for Australian
drink companies to create voluntary waste reduction
plans to meet government waste reduction goals.
–
•
In accordance with legislation, Unilever Australia has signed the
National Packaging Covenant and the Greenhouse Challenge
Programs.
Unilever Australia has an involved corporate
environmental policy which strives to minimize waste,
reduce environmental impact from production,
conserve energy, and maximize recycling and re-use
practices.
PLACE
Product / Place / Price / Promotion
Retailers
• Supermarkets
– 1.8 supermarkets per 1000
inhabitants
– Woolworths and Coles/BiLo dominate market with
75% of supermarket sales
– Trend towards wider
product range, larger
outlets, longer hours, lower
prices
– Supermarkets account for
2/3 of food sales
• Convenience stores
– 7-eleven and Night Owl
are major chains
– 82.6% of sales are done by
independently owned
outlets
Product / Place / Price / Promotion
Distribution
• Domestic production
options
– Unilever plant in New
South Wales that produces
hot tea.
– PepsiCo Australia in New
South Wales produces
similar products and has
strong presence in
category.
– Coca-Cola Amatil produces
similar products located in
Victoria.
• Importing options
– China
produces/distributes
Lipton through
Guangdong Lipton Foods
Company
– Thailand
produces/distributes
Lipton through Serm Suck
PCL
– Indonesia
produces/distributes
Lipton through Unilever
and Aqua Golden
Mississippi Consumer
Product / Place / Price / Promotion
Corporate Distribution Aid in
Australia
• Freight on Board Pty Ltd
- Freight on Board are able to provide sea, air,
customs and logistical solutions to American
companies doing business in Australia.
• Henning Harders Pty Ltd
- Henning Harders are international
forwarding agents and licensed customs
brokers. They handle consignments by air
and sea freight - in particular between
Australia and the United States
Product / Place / Price / Promotion
US Commercial Services
• Help US companies find local partners and attorney.
• IPS: International Partner Service: CS will locate, screen,
and assess Australian agents, distributors, licensees, and
joint venture partners for IS companies.
• Golden Key Services: designed to make US company
representatives visit to Australia more productive.
Provides Market Orientation briefings, market agents,
agent/distributors search and screening.
http://www.buyusa.gov/australia
Product / Place / Price / Promotion
Corporations Law
• The entity is registered under automatically as an Australian
company, enabling it to conduct business throughout without
further registration in individual states or territories
• Does not require directors to be Australian, but must have a
registered office address and a statutory agent responsible to fulfill
the requirements of the Corporations Law
• Every company must be registered for a Australian Business
Number under the Goods and Services Tax.
• You are free to choose between Australian or US law governing
your contract. However, if foreign contract agreed upon, without a
stipulation of law, Australian courts will apply the law of
jurisdiction where the agent of distributor works, that is Australian
federal and appropriate state and local law.
Product / Place / Price / Promotion
Infrastructure
• Highly sophisticated transportation and telecommunication systems:
– Road System: 490,000 miles of paved roads; 65% of freight is shipped along these
roads.
– Rail Road System: 24,000 miles of railroads; preferred mode of transportation
from Eastern ports (privatized in 1999)
– Air Transport: Serviced by most international carriers, providing access routes
from regional centers to major cities.
– Sea Transport: 83% of exports and 70% of imports; mainly dealing in bulk
commodities.
– Telecommunications system: land-based telephone lines provide access to 97% of
all households.
• Telstra, Optus, Primus, AAPT, Orange, and Vodafone are the dominant carriers.
• Has one of the one of the highest mobile phone user rates in the world (over 10 million
subscribers)
– Telstra, Vodafone, and Orange are the major providers.
– Rapid development because of introduction of fully digitalized network.
PRICE
Product / Place / Price / Promotion
Price
• Current market prices for beverages (in Australian dollars)
–
–
–
–
Coke 1.25L = $1.43
Gatorade 600mL = $1.97
Just Juice 1L = $1.67
RTD Pop Tops Juice 250mL = $.465
• Australia has experienced positive economic growth in recent years:
– A free-market economy that is highly involved in the world market
– Much of the recent growth has been attributed to strong domestic
demand: consumption 4% in recent years.
– Capital spending and consumer spending appear to remain positive in
the upcoming future due to the government’s recent budget and tax
cuts.
– Exchange Rate = 1.5419 Australian dollars : 1 US dollar
Product / Place / Price / Promotion
Price control
• As Australia is a free-market economy, there is little formal price
control.
–
The national regulator, the Australian Competition and Consumer Commission
(ACCC), has the power under the Prices Surveillance Act of 1983 and the Trade
Practices Act of 1974, to investigate, vet or monitor the prices charged by
businesses.
• The ACCC was also active in the implementation of the Goods and
Services Tax (GST), serving as a “watchdog” to ensure that resulting
price increases by the private sector are not excessive. State
governments have the power to control prices, but in recent decades
have rarely done so.
• Goods and Services Tax (GST) shifted Australia’s tax mix away
from income taxes, in July 2000.
– set at ten percent on most goods and services
PROMOTION
Product / Place / Price / Promotion
Media Availability
• Television:
– 97% of population own a TV, only
25% with cable
– TV marketers can ideally reach
93% of population
– Cost for 30 second, Primetime
slot, (6:00PM-12:30PM) is $4,620
– Adults 18+ watch the most
primetime TV
– Only 20% time used for paid
advertisements can be from
outside Australia
• Radio:
– 97% of households and
automobiles have radios
– Radio marketers have the
potential to reach 98% population
– Cost for 30 second, Primetime
slot, (5:30AM- 9:00AM) is $600
Product / Place / Price / Promotion
Media Availability (cont.)
• Newspapers:
– 2 national daily papers accept
advertising
• Combined circulation of
225,000
• The Australian 1 page cost
US$ 8,690
• The Australian Financial
Review 1 page cost US$ 4,775
• Magazines:
– 600 national consumer
magazines accept advertising
• Australia Women’s
Weekly Avg. Issue
Audience 3,571,000
– 1 page cost of US$ 14,900
• New Idea Avg. Issue
Audience 2,694,000
– 1 page cost of US$ 11,720
Product / Place / Price / Promotion
Alternative Media
• Cinema
• Outdoor transit
• Direct marketing
- Australians prefer promotional
material to be sent through direct
mail.
- Duty is levied on catalogs,
circulars, and all advertising
matter introduced into Australia
• Internet
- Low trust in internet safety
• Telemarketing
- “Code of Practice” restrictions
instated June 2003
• Ad trolley
• In store radio
NOTE: Lipton in the United States currently uses
Network TV, Spot TV, syndicated TV, Cable TV network
Product / Place / Price / Promotion
Sponsorship Opportunity
• Common Wealth
Games
– 2006
– Melbourne
• Fanatical following of
sport
– Television audience expected
to be in excess of one billion
people
– 71 member countries
– Language of games is English
Product / Place / Price / Promotion
Possible Roadblocks
Language in Australia:
• Colloquialisms + idioms make Australian English unique
–
–
Spot on means right on, prang is a fender bender, crook is someone who is unwell, bloke is a
guy, mate is a friend (male)
G’day, goodonya, she’ll be right, mate, bloody
• Shorten words for everyday conversation
–
Uni, kindy, telly, footy, barby
• To avoid offensive slang, use standard English
Dialect:
•
•
Accent is far more nasal and less clipped than British English accent
Imported commercials require voice-overs
• Mid-Atlantic accent
Inappropriate Gestures:
•
winking at women, yawning without covering mouth
Product / Place / Price / Promotion
Possible Roadblocks (cont.)
• UK cultural influence
– Tea preference
• Difference in seasons
due to location relative
to Equator
• Metric System
Liquid Conversion Chart:
2 fl oz
60 ml
¼ cup
4 fl oz
120 ml
½ cup
8 fl oz
240 ml
1 cup
16 fl oz
480 ml
1 pint
Thank You!