Business Daily from THE HINDU group of publications
Thursday, Sep 28, 2006
ePaper
Business Daily from THE HINDU group of publications Thursday, Sep 28, 2006 ePaper |
|
|
|
|
|
|
|
Agri-Biz & Commodities
-
Tea Marketing - Strategy
Kohinoor Mandal
Price cut TATA TEA is reducing Rs 5 for a 250 gm Agni packet and Rs 3 for a 500 gm packet. The reduction has been made despite average auction prices of tea rising. Other players are closely watching the developments. Kolkata , Sept. 27 The Rs 4,000-crore packet tea market may soon witness a price war as Tata Tea Ltd has reduced the price of its Agni brand, the second largest brand. The price reduction has been made despite the fact that the average auction prices of tea are on the rise. It has registered an increase of around 10 per cent on a year-to-year basis compared to 2005.
Value for money
In an announcement to the media, the company stated that the product will remain unchanged but consumers would get "better value for their money" through the price reduction. Tata Tea is reducing Rs 5 for a 250 gm Agni packet and Rs 3 for a 500 gm packet. This brand is placed in the economy sector of the market. With this move, Tata Tea will try to dominate this sector.
Others watching
Other players have not responded by announcing similar price cuts but sources said both national and regional players were closely following the developments. At the national level, Tata Tea brands competes with that of multinationals such as Hindustan Lever and Goodricke and also with local brands such as Wagh Bakri, Good Morning, Society, Girnar, Jivraj and others. In the last few years, the competition in this sector was of a different nature. Though the auction prices dropped in those years, the packet tea players hardly responded with similar reduction in their prices. Instead, they offered several freebies to the consumers.
Profit margins shrink
It also witnessed several new players entering the sector. This year with the increase in the auction prices, the profit margins of the packet tea players have started to shrink. Against this backdrop, Tata Tea reduced the price of the Agni brand, which is available in 22 States. "Tata Tea's strength is in the geographical spread and the brand loyalty. The roadmap for the future clearly is to leverage both these strengths to further expand the market and Agni's share of that market," Mr Sushant Dash, Group Product Manager, said.
More Stories on : Tea | Strategy | Tata Tea Ltd
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|