Overseas market opportunity for ‘Watawala Tea Sticks’, a newest addition to ‘Watawala’ Tea Family.

1. Product Information

The tea bag, sometimes known as a hybrid teabag, is a miniature, permeable, closed bag or pouch that is
soaked in hot or even cold water to steep and form an extract of teas or other herbs. Initially it only used
for tea but are now now used in some tisanes ("herbal teas") (Sencha Tea Bar, 2020).

Tea bags are generally composed of filtrate or food-grade plastic, with silky cotton or silk being used on
rare occasions. The tea bag is used in the same way as a tea infuser. They can be reused until no more
extraction is available. Sometimes tea bags have a length of thread tied to the top with a paper label
that helps remove the bag while also showing the company or variety of tea. Tea bags have been stayed
in the market for quite a longer time until the tea industry invented new tea making trend, which is ‘tea
sticks’ influenced the market to avoid some disadvantages caused by the tea bags (Sencha Tea Bar,
2020).

"There will be no drops, and there will be no mess!" Stick gets both its moniker as well as its secrecy
from the product's one-of-a-kind filter. Witness Stick infuse from specific brewing holes when you place
it in boiling water. It's easier to handle and stir thanks to its handier container. There's no need for a
spoon with this unusual design. Tea stick trend is spreading in the market replacing the messier tea
bags. Watawala Tea can take the use of this trend can invent it’s own tea flavored tea sticks which can
highly influence overseas market as Sri Lankan tea brands are highly welcomed by the international
markets (sameera hapugoda, 2015).

2. PESTEL Analysis

Political Factors

Tea, as the second most significant crop after rice, gained more recognition in agricultural policy made
by the government. The tea sector is taxed both direct and indirect ways by the government. Tea
taxation was intended to redistribute net income inside the country based on government
societal priorities (www.ipl.org, 2021).

Government limitations imposed due to forex issue that country currently facing is another factor that
effect the ‘Watawala Tea Stick’ marketing in overseas.

Economic Factors

Other countries' exchange rates, interest rates, and GDP values can have a direct effect on the business
activities.

Inflation in the Sri Lankan economy as a result of the Covid-19 pandemic has taken a significant toll on
local businesses.

Social Factors

Sri Lanka is currently facing a labor shortage to pluck tea, which will be a severe issue in the coming
future.

Social class distribution among the society affects the tea preferences (sameera hapugoda, 2015).
Technological Factors

Novel tea making technology should be embraced by the company to capture overseas market and to
cater that demand

Digital marketing aspect is lacking in the company and that needs to be improved.

Environmental Factors

The tea stick packaging is paper based, and it is a sustainable initiative that Company can promote with

The traditional tea packets culture used poly-based packaging and the company need to promote a
recycling program to impress its customers that the company is sustainable concerned.

Legal Factors

Tea imports are not permitted in Sri Lanka. Manufacturer groups are opposed to any tea imports,
asserting that low market prices will be received for their product. Such a rule prevents users from
enjoying a broad array of teas and manufacturers from using foreign - made ingredients in their blends
(sameera hapugoda, 2015).

3. SWOT Analysis

Strengths:

- Watawala Tea Blend Perfection & Quality is an incredibly trusted company that has always
respected its clients by providing them with high-quality teas.
- The company owns reliable supply chain including trusted suppliers, who offer them with raw
ingredients on time, ensuring the procurement procedure stable.
- Watawala items are offered to customers at reasonable and inexpensive prices. Consumers can
choose from a variety of sizes and offers from the venture.

Weaknesses:

- The company is having very low number of tea outlets island wide. Although Watawala has
many franchisees for order taking, there are no acceptable number of outlets or dine-in
restaurants located throughout the country.
- The business's objectives do not align with the technology they are currently using. As a result,
they must spend more in their technology to compete in a competitive industry.

Opportunities:

- More opportunities lies in middle class tea segments. Watawala can also be governed by
middle-class customers. They've divided their market into segments based on demographics.
- Overseas marketing opportunities are awaiting as they are well aware of the quality and the
taste offered by the Sri Lankan tea.
- Variety of opportunities have opened as a result of brand-new evolving customer behavior and
millennials food habits. They use cognitive advertisements to influence the consumers' choice
behavior.

Threats:
 - The current operations and manufactures of Watawala comprise numerous tasks that are
pricey. To minimize this hazard, business can work on cost-cutting strategies.
- The current rising inflation and foreign exchange rates can have an impact on the overseas
market seeking.

4. Porter’s Five Forces Analysis

Bargaining power of Suppliers:

- There are numerous vendors in the business. As Sri Lanka does have a large tea sector, there are
local and worldwide sources from whom tea ingredients can be imported. But current country
policies don’t allow tea ingredients to be imported. Therefore, local suppliers own a
considerable bargaining power (Ali et al., 1997).
- A small group of well-known supplier companies; switching costs are modest, but buyers prefer
to maintain quality.

Buyers from other countries have more bargaining power: -

- The tea sector's negotiating leverage has grown as a result of the uniform or homogeneous product it
sells, where the price is determined by the volume of sales (Ali et al., 1997).

- In addition, it has been demonstrated that end consumers seek excellent tea from abroad suppliers in
order to receive the best value for their money.

-As a result, overseas merchants will seek top-quality tea to gain customer loyalty (Outschoorn, 2000).
As an outcome, buyers have more power over the sector.

Threats of Substitutes:

- Tea has a lot of replacements in the beverages industry, regardless of the fact that it is the
cheapest drink next to water.
- Dairy, carbonated soft drinks, fruit juice, caffeine drinks, alcohol, and other beverages are
among them (Ali et al., 1997).
- While always tea is becoming more popular on the global market regarding the positive health
effects it has, soft drink consumption has not decreased to the same extent.
- Furthermore, most millennial individuals prefer carbonated soft drinks to tea while they have
free time. As a result, it is reasonable to assume that substitutes pose a significant threat (Ali et
al., 1997).

Threats of New Entrants:

- Despite the recent entry of numerous new states into the tea industry, many other big nations
manufacture tea at a lesser rate than Sri Lanka.

- The new entry is now in threat. Moreover, inexpensive alternative is charged for several of the world's
most prominent tea brands, resulting in better profit margins for the corporation.

- International firms, in reality, have well-known brands that have lasted for over a century on the
market (Outschoorn, 2000).
Competitive Rivalry:

- Tea is produced in 34 countries around the world, with Sri Lanka, Kenya, China, Indonesia,
India and Vietnam being major suppliers.
- Kenya, Sri Lanka, India, China, and Indonesia are the leading global competitors in the tea
sector. Kenya, the dominant player, is growing at a faster rate than Sri Lanka because of its
lower-cost producers.
- From 1998 to 2007, Kenya's tea revenue grew by 24.74 percent, whereas Sri Lanka's revenue
rose by only 8.98 percent during the same period.
- Furthermore, these 6 nations account for 82% of global tea exports. In Sri Lanka, the
diversification approach is not being followed as much as it should be.
- In the local extent the biggest competitor accounts for Watawala is Dilmah Tea. Dilmah has
owned a quite impressive brand loyalty than Watawla in local context (www.ukessays.com,
2020).

5. 4P’s of Marketing

Product:

- The superb Oolong tea, newest addition to tea array is soothing and tasty; the Oolong spectrum
contains a variety of scents and flavors that are distinct from green or black tea.
- It's difficult to get accurate caffeine concentration estimates, but it's definitely not too far off to
say that a cup of Oolong is well mixed, contains roughly estimated to have half as much caffeine
as a cup of black tea and half as much as a cup of green tea.
- The change is primarily due to the brewing heat, rather than the tea's content. Oolong tea has
features of both black and green teas, but the taste is very different (www.ukessays.com, 2020).

Price:

- Pricing choices are influenced by internal business variables, outside forces, or in combination of
those two.
- The macro environmental aspect that will influence Watawala Plantation's pricing decision is the
rivals' costs, prices, and probable responses in regard to Watawala Plantation's price fixing
modes.
- When determining whether or not to buy Watawala Plantation's Oolong Tea, a consumer
considers the value and price of other items that rival with Watawala Plantation's (Watawala
Plantations PLC Fundamental Company Report Including Financial, SWOT, Competitors and
Industry Analysis, 2022).
- Watawala Plantation should employ a penetration pricing strategy, which entails setting up a
low starting price at the project initiation phase in order to completely penetrate the market.
- This is because it is an appropriate price strategy that could be used successfully right from the
start to grab the attention of consumers rapidly and easily in order to gain a huge market share
in a short amount of time.
- Watawala PLC can adjust their skimming strategy after the successful launch of Oolong tea.

Place:
 - All places and customers in the target market will be covered by the distributing strategies. This
is undeniable, as the attractiveness of the product develops in tandem with the demand. A well-
executed distribution system will increase the likelihood of achieving the target in a timely
manner. The accessibility is secured with favorable results by ensuring constant contacts and
applying experience and specialty in the trade, as well as ensuring a regular supply without
shortfalls (Watawala Plantations PLC Fundamental Company Report Including Financial, SWOT,
Competitors and Industry Analysis, 2022).
- Over through the nomination of dealers and agents to popularize the particular product, needs
and skill in promotion, expertise, market acquaintance with the items, and so on. Aside from the
distributors, the sales process will be carefully considered.

Promotion:

- Among the most important components of the marketing mix is promotion. The goal now would
be to educate, convince, and acquaint the market with Oolong tea and the tea array of
watawala in order to promote it.
- Direct marketing and publicity prior to launch can consider as key strategies that are linked to
public affairs in this way. Pre-publicity via print and online is required to reach the target
population.
- The target demographic, mostly customers, will be easily achieved through effective and
efficient advertising strategies, which we propose to use.
- The platforms, which we aim to use in conjunction to the press on TV and radio, will be selected
based on its attractiveness and the results-oriented approaches they employ
(www.ukessays.com, 2020).

References

References The Truth About Tea Bags: Should You Use Them or Not? (n.d.). Sencha Tea Bar.
https://senchateabar.com/blogs/blog/tea-bags

sameera hapugoda. (2015). ANALYSIS OF DILMAH’S CURRENT MARKETING STRATEGY. Academia.edu.

https://www.academia.edu/38726060/ANALYSIS_OF_DILMAH_S_CURRENT_MARKETING_STRATEGY

Tr122. (2015, October 18). Dilmah Swot and Pestle. Dokumen.tips; Unknow.
https://dokumen.tips/documents/dilmah-swot-and-pestle.html

Watawala Plantations Plc Is A Pioneer Tea Plantation Marketing Essay. (n.d.). Www.ukessays.com.
https://www.ukessays.com/essays/marketing/watawala-plantations-plc-is-a-pioneer-tea-plantation-
marketing-essay.php

What Is The Porter’s Five Forces In Tea Industry | ipl.org. (2020). Www.ipl.org.
https://www.ipl.org/essay/What-Is-The-Porters-Five-Forces-In-FC547AZKGG

WATAWALA TEA CEYLON LTD - EDB Sri Lanka. (2022). Www.srilankabusiness.com.

https://www.srilankabusiness.com/exporters-directory/company-profiles/watawala-tea-ceylon-ltd/