Marketing plan for 2020

Contents
Introduction to Dilmah
Environment analysis and SWOT analysis
Brief introduction to 4Ps
STP Approach
PLC and Challenges faced by the company
Conclusion
 Executive Summary
This report provides a detailed description about the marketing strategies practiced by the world-
renowned tea brand Dilmah and how it progressed to a much larger conglomerate over the thirty-two
years since its beginning. Although being a giant in its field it still manages to stick to its core values of
marketing and branding, for example Dilma shined out in the market as the most pure and unblended
tea in the world and still being one of the finest teas around the world it still does not use cheap
blended multiple origin tea. Throughout the years Dilmah brand has being able to gain the faith and
convince for its customers to find nothing but the best, concurrently maintaining its premium pricing
which most of its competitors failed in attempting.
 Introduction
Dilmah an international sensation for tea was originally formed by Merrill Joseph Fernando in the year
of 1988. When Merrill himself went against the traditional production of blended tea and founded
garden fresh unblended single origin tea. Merrill J Fernando is an industry expert who possess a carrier
experience of 58 long years, he is championed as one of the best teamakers in the world. M.J Fernando
is a visionary who is responsible of establishing the concepts of single origin tea. His company Dilmah
today stands undoubtably as the market leader of tea exports in Sri Lanka. Not only was he able to
revolutionize the tea industry but was also able to compete as a challenging tea brand for most of its
multinational competitors. Dilmah throughout its life span has surely become one of the most
sensational tea brands produced from the island, concurrently contributing to Sri Lankan economy. With
an industry expertise Dilmah now advanced up-to 2267+ products currently shipping to over 100
countries in 6 different continents around the globe. Having a market capitalization of $78.2 Million,
providing phosphor to 10,000 lives of its employees Dilmah today stands truly as an industry expert.
 Environment analysis and SWOT analysis

When determining the marketing environment, the task environment included with customers which
Dilmah started off as a bulk tea producer and eventually focused more on the commercial aspect of tea.
Main customers od Dilmah was USSR, Australia and New Zealand. Dilmah of course did not have many
supplies because they produced and packed only garden-fresh tea which is plucked from their own tea
estates. Main competition was the Australian local tea brands who was initially a market threat to
Dilmah, but later when their consumers got to know that Dilmah was producing authentic and pure Sri
Lankan tea soon it became the talk of the town. Merrill. J had very less faith in intermediaries and
Dilmah was able to increase its net profits as a result which all excess proceeds were distributed among
the employees by setting an example to other companies on workplace ethics, Dilmah become a direct
supplier of goods to supermarkets.

Talking about the external environment (PEST Analysis) Political environment and its effects on Dilmah
makes a big impact on the company, suppose the Sri Lankan government impose a new income tax on
global multinationals it would affect the company negatively. According to the North American Free
Trade Agreement Canada is bound to import more tea from UK, even though there is a good market for
Ceylon tea, and in 2013 Sri Lankan government-imposed taxes on exporting brands which hit many local
exporters such as Dilmah. Economical aspect is really crucial to many imports specially exchange rate
between countries, demand pattern changes, change of raw material prices are some of the major
economic factors affecting Dilmah. Social factors (S) includes the brand value and market value for tea
which fluctuates, societal believes that tea is good for human body has an impact on demand,
unemployment changes within a country also may affect Dilmah with its operations. T I signify the
technological attribute modern technological advancements specially in production and also ease of
getting statistical data.
 SWOT Analysis

Collective experience of over 60 years

A well reputed brand in 100+ countries
currently ranked within the top 10 tea brands within the world
Strengths A well financially stable company

Less marrket share in Sri Lanka compared to other brands

Dilmah dose't have factories in countries like Caneda which will help them to decrese cost of importing tea on
regular basis
Weaknesses

Tea imports of Caneda rushingly increased in Caneda upt 843$ million which made Dilmah a massive profit within
an year
Tea consumption around the globe is expected to increase by 22% within the next 5 years due to health awreness.
Due to increased in alchol consumption specially in Australia Dilmah can promote its products such as Vodka tea
Oppturnities and tea beer

Seasonal changes in Sri Lanka may affect on the production and supply chain of tea as Dilmah only prodcues
unblended garden fresh tea
Higher competetion specially in international markets due to local brands, such as T2 and Lipton which are owned
Threats by much larger conglomerates.
Introduction to 4Ps
Product
Product is anything offered to the market with the in intention of satisfying a need, a product can be a
physical good, services, experience, events, persons, plans, properties, information, ideas etc.

There are main features of a product,

 Core benefit – Tea is widely known as a nutritious drink, Dilmah makes this as an effective
marketing tool.
 Quality level – Dilmah uses premium quality in all of their products, Dilmah is well famous for its
quality products.
 Packaging – Implementation of high-quality, eye-catching and vibrant packing standards can be
seen throughout its products.
 As per Dilmah the main product is tea, Dilmah today has 2267+ products available with them
with a variety of differentiations such as Premium selection, special tea, estate tea etc. And
according to different strengths, sizes and flavors.
Price
Due to the quality and authenticity of Dilmah products it uses a premium pricing, and with application of
market skimming pricing strategies they have being able to uplift Dilmah globally as a well-recognized
tea brand. Dilmah uses product bundle pricing strategy for its products

Place
Dilmah has its own delivery system in which you can order products online through the website, also for
most countries Dilmah has implemented supply chins of their own, and others are conducted through
international suppliers.

Promotion
It is crucial for any tea manufacturing company to use heavy advertising in order to retain in the market,
therefore Dilmah too believes the concept that more and more the product reaches to the customers
more the sales.

Some of the promotional strategies used by Dilmah are

 Advertising - Mainly through social media and through television advertisements.

 Sales promotion – Dilmah uses sales promotional actives to boost it’s sales such as giving
discounts.
 Direct selling - Specially for customers in UK , USA and Australia customers can directly purchase
from the company
STP Approach
Segmentation
Segmentation is the process of dividing the mass market in to smaller number of segmented groups
based a variety of categorizations. Segmenting not only helps to divide the mass market which is more
efficient for a company in terms of production and catering goods, but also helps to improve its profits
and specialization in production.

Dilmah has segmented the mass market in a way that it can cater almost all the sub groups in a market

1) Geographic segmentation – Dilmah as of 2020 delivers its 2267+ products to over 100 countries
in 6 continents, it is certainly a brand with a global presence. Mainly focuses on the geographic
sectors such as high populated areas and creating demand clusters to Significantly improve on
its sale geographically around the globe.

2) Demographic segmentation – Demographic segmentation is most commonly used by the

companies. Demographic segmentation is dividing the mass market according to age, gender,
family size, occupation, race, ethnicity, nationality etc.
Dilmah has a wide variety of products for these segmented markets
According to age
 Youth – Tea beer, Ice tea
 Middle age – Premium Ceylon selection, Watte and Dilmah exceptional series
 Old aged – 100% Organic tea
3) Behavioral Segmentation – Segmeting the market according to consumer behavior patterns
such as Consumption patterns, usage rate, average spending.
Target market
The qualified and accessible market that a firm chooses to serve . As per Dilmah targets many market
segments with different locations and different behavioral patterns therefore it implements a unique
style of marketing the 4ps in those locations.

Main target market of Dilmah can be identified as high- or middle-class customers

Positioning
This is how a company places its brand on minds of customers, Dilmah is undoubtably a high quality
premium product it is positioned into consumer minds with the trust gained by Dilmah over the years.

“Single origin garden fresh tea” the tagline of Dilmah makes it a unique product and this was the unique
selling point which made Dilmah what it is today.
Porter’s Five Forces
 Threat of rivalry – Dilmah constantly faces the threat of rivalry as the brand is a competitive
market giant, many competitors such as Lipton, Tetley are competing against Dilmah
 Threat of new entrances – New entrances are not much of a threat to a vast operating tea
company like Dilmah.
 Threat of substitutes – Coffee is the main threat of substitute
 Buyers bargaining powers - buyers bargain power has increased especially due to the pandemic
of COVID - 19
 Threat of supplies bargaining power – This remains low as large number of suppliers remain in
the market
Conclusion

The current situation of the tea market is highly competitive specially after the
pandemic citizens will be more considerate to buy products shipping form
outside countries, therefore Dilmah should adhere to those strategies and
execute a Stronger plan

Y.N Kumarage
22006599