Report on Marketing Strategy & Consumer Behaviour of Lipton Tea

This report provides a critical analysis of Lipton Green Tea's marketing strategies in relation to consumer behaviour, examining the reasons behind a decline in customer loyalty. It assesses the effectiveness of the company's marketing segmentation, targeting, and positioning strategies, as well as its marketing mix (product, price, place, promotion) and marketing communication mix. The analysis incorporates consumer behaviour theories to understand customer decision-making processes and identifies areas where Lipton Green Tea's strategies may not be fully aligned with consumer needs and expectations. The report also includes strategic recommendations for improving customer retention and regaining customer loyalty by addressing factors such as product diversification, pricing strategies, distribution channels, and promotional messaging, with a focus on creating a universal tagline that resonates with the entire target market. This assignment is available on Desklib, a platform offering study tools for students.

Marketing Strategy & Consumer Behaviour 0
Title: Marketing Strategy and Consumer Behaviour of Lipton Green Tea
Assignment Name:
Student Name:
Course Name and Number:
Professor:
Date:

Marketing Strategy & Consumer Behaviour 1
Executive Summary
It is very important for any organization to have a high retention rate of customers. The high
retention rate can only be achieved if an organization increases their number of loyal customers.
Loyal customers can be formed only by knowing the customers inside-out and then pitching the
customers by establishing strategies that fulfills the needs, demands and the attitudes of the
customers. In this assignment, the marketing strategies of the organization, Lipton Green Tea are
being critically analyzed to understand and examine the causes of the reduction in their loyal
customers. This analysis is conducted in context to the customer behavior aspects and for this
specific customer behavior theory has been utilized.

Marketing Strategy & Consumer Behaviour 2
Contents
1. Introduction..............................................................................................................................2
2. Critical Analysis of Current Marketing Focus of Lipton Green Tea...........................................3
2.1 Current Marketing Strategies.................................................................................................3
2.2 Marketing Mix Strategy.........................................................................................................4
2.3 Marketing Communication Mix............................................................................................6
3. Strategic Recommendations.....................................................................................................8
4. Conclusion................................................................................................................................9
References......................................................................................................................................10

Marketing Strategy & Consumer Behaviour 3
1. Introduction
Customer Loyalty is gained by an organization after the product and service provided to the
customer have successfully fulfilled the customer expectations regularly. It takes immense hard
work and dedication to form an image of a loyal brand and gain loyal customers. It is important
to incorporate the marketing strategies of an organization in sync with the customer’s behavior to
attain loyal customers. In the recent times, this has been recorded that the percentage of loyal
customers in the organization Lipton Green Tea have been reducing gradually and the repeat sale
of the product is at the lowest in comparison to the previous years. Being one of the most popular
FMCG Company the organization is in a state of crisis and requires immediate investigation.
According to the conducted survey, it was recorded that 43.75% consumers of the Lipton Green
Tea are loyal customers, but this rate has decreased since the last year. The marketing strategies
of the Lipton Green Tea have to be aligned with the behavior of the targeted consumer as this
will help in achieving a high consumer retention rate in the organization.
2. Critical Analysis of Current Marketing Focus of Lipton Green Tea
2.1 Current Marketing Strategies
Marketing Segmentation, Targeting & Positioning Strategies in Sync with the Consumer
Behavior
The segmentation of the market by the Lipton Green Tea is conducted on the basis of
demographic, geographic, behavioral and psychographic. On the basis of this segmentation, the
company targets people who are health conscious, tea lovers and people between the ages of 20
to 60 years old. According to the conducted survey, around 50% of the consumers stated that
they are motivated to buy the Lipton Green Tea for the mere reason of staying healthy and fit.

Marketing Strategy & Consumer Behaviour 4
This is a psychological factor of consumer behavior that includes the attitude or the consumer
learning processes. The attitude of the consumer to stay fit and health encourages him to buy the
product. This can be examined furthermore with the personal-variable model, that explains the
decision making processes of a customer that can be due to personal opinion, goals, beliefs,
traditions and other internal motivator. The company’s segmentation strategy completely fulfills
this need of the segmented market. But this also displays that the rest of the market who buys the
tea due to different behavioral factors is not being targeted effectively. According to the
Zeithaml et al, the segmented market should be targeted with a plan that fulfills the customer
expectations which should be similar to the customer perceptions (Zeithaml, Bitner and Gremler,
2013). This also means that the prices and the communication between the customers are other
important factors that the Lipton Green Tea needs to work on, as they are a crucial motivational
factor of a customer. The Lipton Green Tea is positioned in the market as “the perfect drink for
an active & healthy lifestyle”. This positioning strategy is attracting only the health conscious
people that are just half of the targeted market. For the people, who are tea lovers, they are not
being informed about the different flavors and the aromas that are an integral part of the Lipton
Green Tea. These are some of the personal factors of consumer behavior that contributes in the
process of personal buying decision of the customers. In this case, it can be examined further
with the complex model that takes into consideration both the external and internal factors.
According to the survey, the energetic behavior of the customers is the driving force to buy
Lipton Green Tea and around 50% of the people have this perception. This showcases that the
company’s strategy is attracting half of the targeted market and the rest of the market is being
ignored that is resulting in the loss of loyal customers (Awara, 2010).

Marketing Strategy & Consumer Behaviour 5
2.2 Marketing Mix Strategy
The marketing mix of Lipton Green Tea has helped the organization to generate higher
revenues and more customers. But the customer behavior keeps fluctuating due to the growing
competitors in the market and their more impressive strategies (Eggert and Ulaga, 2010). The
theory of reasoned action, helps in understanding the decision making aspect of the customers
under various circumstances. The product strategy of the Lipton Green Tea is a differentiation
strategy as the organization provides the customers with different flavors and different number of
bags in each packet. According to the survey, 12.50% of the people stated that they were
influenced by their friends to buy the product. This is a social factor of the consumer behavior.
These social factors can include group influences, social class, work communities and families
too. The pricing strategy of the organization is the price penetrating strategy that is utilized to
stay ahead of their competitors (Fink et al., 2008). According to the survey, 43.75% customers
have stated that they like the taste of the product in comparison to the other brands and also 50%
of the customers thought that the price of the product is value for money. This represents that the
organization’s pricing strategy is working effectively, but the diversification of the product, that
is, the availability of the product in different flavors is not completely in sync with the customers
changing behavior and thus there is a requirement for certain alterations. Also, the organization
targets a large volume of customers that range from different ages and from a different financial
background. The organization can attempt to expand their market by implementing the economy
pricing strategy, so that the customers who are not able to buy the product can also purchase it
without frills (Hipperson, 2010).
The Lipton Green Tea is available for sales in more than a hundred countries around the
world. The organization’s distribution strategy follows both direct and indirect methods. The

Marketing Strategy & Consumer Behaviour 6
organization provides more discounts to the wholesalers than the direct customers. This strategy
will affect the customer decision to buy the product and will influence the customer to shift to
another brand according to the psychoanalytic theory. According to the survey, 6.25% of the
people have a negative image of the organization (Kim and Choi, 2016). This distribution
strategy of the organization will increase this number gradually affecting the organization’s sales
and loss of even more customers as it will have an impact on the customer’s psychological
behavioral factors. The promotional strategy of the organization is an aggressive marketing
strategy. According to the survey, 50% of the people stated that they were influenced by the
organization digital media promotions which forced them to buy Lipton Green Tea. Though this
is a good percentage of people who are getting attracted towards the product, but when compared
with the type of effect the social media has on the sale of a product then the organization is
lagging behind and their efforts are in the midway (Martin, 2016).
2.3 Marketing Communication Mix
The marketing communication mix can be defined as the various methods that are
utilized by the organization to promote the organization and their product to a larger market. The
marketing communication mix can be categorized into five elements, but with the increasing
competition between organizations, there is also a sixth element that is sponsorship events. For
the organization, the Lipton Green Tea the communication mix is the first step of building an
image of the organization in the opinion of the customers that have to fulfill the customer
expectations, before using the product. So the marketing communication mix has to be utilized
with the sole objective of influencing the purchasing behavior of the customers (Min, Segal and
Dalman, 2014).

Marketing Strategy & Consumer Behaviour 7
The advertisements that are created and broadcasted through different mediums like
television, newspapers, magazines, digital media and many other mediums are very effective in
attracting customers. The EKB model that is popularly known as Engel, Kollet and Blackwell
model, helps in understanding the different shifts through which a customer goes before buying
the product. The Lipton Green Tea has targeted the customers with different slogans and
taglines. The organization uses a different tagline in various advertisements like 100% natural,
100% real tea, be more tea, feel light & feel active, slimming tea and many more (Odongo,
2016). Now, this approach of promoting the product with different taglines creates confusion in
the mind of the customers, hence, affecting their decision to make a purchase. Also, the different
taglines restrain the customers who will not relate to a certain tagline that means a certain tagline
will not be in sync with a certain customer needs and demands. Thus, the organization has to
build a universal tagline for all the customers, which fulfills the needs and demands of each
customer. The tagline should be catered to the entire targeted market.
The personal selling of the Lipton Green Tea helps in pitching the potential client by
focusing directly on the needs and demands of the customers. This is also known as integrated
marketing communication that has a direct impact on customer behavior. In the organization
Lipton Green Tea, though the organization has a direct distribution channel, it is not that
effective as the organization provides better offers to the wholesales than the direct customers
(Rajagopal, 2012).
The organization Lipton Green Tea, does not provide the customers with any specific
discounts that will make the customer happy and will transform him into a loyal customer. It is
also due to the price penetrating strategy of the organization that forces the company to keep

Marketing Strategy & Consumer Behaviour 8
their prices lower than their competitors. The discounts and promotions together, go hand in
hand that helps in attaining loyal customers (Zolkiewski, 2012).
The online marketing is the strongest source of influence for Lipton Green Tea. The
online communication mix is a huge platform that can positively appeal to the customer’s
behavior and can also offend them. Thus, there are bigger responsibilities that come along with
it. The brand, Lipton Green Tea, has been stated to provide a high extent of lifestyle with a
record of 37.50% customers believing it, according to the survey. Now, the online
communication strategy of the organization is extensive, and so the results should be higher (Yi,
Gong and Lee, 2013). It is due to the reason that the other brands are attracting customers with
better strategies and a more personalized approaches that are reducing the customer retention rate
of the organization. This has been analyzed through the motivational needs theory that focus on
the five components of the customer behavior that are love, esteem, survival, self-actualization,
and safety.
3. Strategic Recommendations
The organization Lipton Green Tea is in a facing a huge crisis the increasing loss of the loyal
customers. This has to be implemented and seriously monitored by the organization to make
loyal customers for the organization (Xie, Poon and Zhang, 2017).
 The organization has to be proactive.
This is the new emerging trend in the competitive world of today that the chances
of attaining loyalty of the customers are less during the process, when a product is
pitched to a customer. But there are high chances to form a loyal customer when he is
surprised with an important information that may help in solving an issue of the

Marketing Strategy & Consumer Behaviour 9
customers. Being proactive also help in increasing the innovation standard in an
organization. For the Lipton Green Tea, the organization will be able to understand the
different behaviors of a customer through the means of being proactive and will help in
increasing the customer retention rate in the organization. This can also be termed as
relationship marketing. According to Das, relationship marketing helps in providing more
customer satisfaction that helps in transforming them into loyal customers (Das, 2009).
 Achieve high standards of credibility and customer satisfaction.
The more, the organization Lipton Green Tea will provide customer satisfaction,
the more credibility the organization will become in the opinion of the customers. For
delivering high customer satisfaction it is important to position your product according to
the various consumer needs and demands along with their behavior on each aspect.
According to Tao, it is impossible to deliver customer satisfaction without understanding
the needs and wants of the customers (Tao, 2014).
 Alteration of strategies according to the changes in the customers’ expectations.
The organization can attain loyal customers if the Lipton Green Tea, will function
like its emerging competitors, who are delivering customer satisfaction, according to the
changing trends and also the behavioral changes that are developing the customers due to
these trends. According to Evellyre et al, for fulfilling the needs and demands of the
customers and delivering them with customer satisfaction, it is important for every
organization to change as the expectations of a customer changes (Evellyre et al, 2009).
4. Conclusion
From the above analysis, this can be concluded that the organization Lipton Green Tea is
reducing its customers due to its efforts in different areas, which are only fulfilling only to half

Marketing Strategy & Consumer Behaviour 10
level and this has been examined through the surveys too. The organization is providing
mediocre services that are satisfactory for half the targeted audience and the other half is being
ignored by the organization. This attitude of the organization is creating a bad image of the brand
that is gradually spreading in the market and affecting the customer retention rate of the
organization. The Lipton Green Tea is also not changing its strategies according to the emerging
competitors which is making the situation even worse. Thus, the recommendations suggested
have to be executed seriously and it also requires regular monitoring and changes with the
changing circumstances of the organization.

Marketing Strategy & Consumer Behaviour 11
References
Awara, N. (2010). Strengthening Customer Retention Through the Management of Customer
Relationships in Services Marketing. SSRN Electronic Journal, 1(1), pp.77-97.
Das, K. (2009). Relationship marketing research (1994‐2006). Marketing Intelligence &
Planning, 27(3), pp.326-363.
Eggert, A. and Ulaga, W. (2010). Managing customer share in key supplier
relationships. Industrial Marketing Management, 39(8), pp.1346-1355.
Evellyre et al (2009). Chapter 2: Review of Literature. [Online] Shodhganga.inflibnet.ac.in.
Available at: http://shodhganga.inflibnet.ac.in/bitstream/10603/10529/7/07_chapter2.pdf
[Accessed 8 Oct. 2018].
Fink, R., James, W., Hatten, K. and Bakstran, L. (2008). Supplier strategies to increase customer
purchases over the duration of customer‐supplier relationships. Journal of Business & Industrial
Marketing, 23(8), pp.529-543.
Hipperson, T. (2010). The changing face of data insight – And its relationship to brand
marketing. Journal of Database Marketing & Customer Strategy Management, 17(3-4), pp.262-
266.
Kim, H. and Choi, B. (2016). The effects of three customer-to-customer interaction quality types
on customer experience quality and citizenship behavior in mass service settings. Journal of
Services Marketing, 30(4), pp.384-397.
Martin, C. (2016). Retrospective: compatibility management: customer-to-customer relationships
in service environments. Journal of Services Marketing, 30(1), pp.11-15.

Marketing Strategy & Consumer Behaviour 12
Min, J., Segal, M. and Dalman, M. (2014). The Identity Salience and Emotional Attachment
Strategies in Alumni-University Relationships. International Journal of Customer Relationship
Marketing and Management, 5(2), pp.21-37.
Odongo, I. (2016). Content Marketing: Using it effectively for Brand Strategy and Customer
Relationship Management. Advances in Social Sciences Research Journal, 3(12), pp.40-90.
Rajagopal (2012). Brand manifestation and retrieval effects as drivers of buying behavior in
Mexico. Journal of Database Marketing & Customer Strategy Management, 19(3), pp.179-196.
Tao, F. (2014). Customer Relationship management based on Increasing Customer Satisfaction.
International Journal of Business and Social Science, 5(5), pp.256-263.
Xie, L., Poon, P. and Zhang, W. (2017). Brand experience and customer citizenship behavior: the
role of brand relationship quality. Journal of Consumer Marketing, 34(3), pp.268-280.
Yi, Y., Gong, T. and Lee, H. (2013). The Impact of Other Customers on Customer Citizenship
Behavior. Psychology & Marketing, 30(4), pp.341-356.
Zeithaml, V., Bitner, M. and Gremler, D. (2013). Services marketing. 6th ed. New York:
McGraw-Hill Irwin, pp.30-60.
Zolkiewski, J. (2012). Business to Business Marketing: Relationships, networks and strategies by
Nick Ellis. Journal of Customer Behaviour, 11(4), pp.371-372.