International Market Research: TWG Tea's Pakistan Expansion Plan

This market research report explores the potential of introducing TWG Tea, a luxury tea brand from Singapore, to the Pakistan market. The research employs both primary and secondary data to assess consumer perception and market viability. It delves into Pakistan's demographic data, tea consumption patterns, disposable income comparisons, and regional tea preferences. A PESTEL analysis provides cultural context, while the research methodology outlines survey and interview designs used to gather primary data. The findings include descriptive statistics and cross-tabulations, offering insights into consumer behavior and cross-cultural considerations. Ultimately, the report provides conclusions and recommendations for TWG Tea's market entry strategy, considering the unique challenges and opportunities within the Pakistani market. Desklib is a platform where you can find similar solved assignments.

Running head: INTERNATIONAL MARKETING RESEARCH
International Marketing Research
Name of the student
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Executive Summary
This is a market survey where the study has conducted both primary data and
secondary data analysis to examine the viability of the Pakistan market for TWG tea which is
a luxury tea company in Singapore. The analysis of the result had shown that Pakistan market
is untapped and being an underdeveloped country, the availability of resources is cheap.
Moreover, Pakistan is one of the largest tea consuming nations in the world but due to the
low disposable income of the population and majority of the population falling under the
poverty line, it is essential to examine the market carefully and develop effective strategies to
prepare for the uncertainties in the market.

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Table of Contents
Introduction................................................................................................................................4
Problem definition and Research Objectives.............................................................................4
Current Understanding and Secondary Data Sources................................................................5
Demographic data of Pakistan...............................................................................................5
Pakistan Tea consumption......................................................................................................6
Average disposable income comparison................................................................................7
Tea habits as per geographic location in Pakistan.....................................................................8
PESTEL analysis (culture consideration)..............................................................................9
Unique Value Proposition....................................................................................................10
Research Method......................................................................................................................10
Instrument Design....................................................................................................................12
Analysis and Results................................................................................................................16
Findings................................................................................................................................16
Descriptive statistics.............................................................................................................19
Cross tabs.............................................................................................................................20
Cross cultural consideration.....................................................................................................25
Conclusions and Recommendations........................................................................................25
References................................................................................................................................27

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Introduction
This report has aimed to introduce a new product of an existing company into a
foreign market. TWG has been chosen as the company of choice which is a luxury tea
company in Singapore, established in the year of 2008 (Twgtea.com 2018). It is the only
upscale tea salon in Singapore and have expanded their business to different parts of the
world. The salon not only sales tea but other food products infused with tea. The company
has been selling more than 800 types of tea exported from different parts of the world. The
company has expanded in different countries such as Russia, USA, Morocco, Taiwan, United
Arab Emirates, Japan, Hong Kong, United Kingdom, Australia, India, China, Taiwan,
Thailand and Malaysia (Twgtea.com 2018). The foreign market chosen for expansion is
Pakistan which is one of the south east Asian countries. The population in Pakistan has a
keen interest in tea and consumes tea most of the times when compared to the variety of
options they have in the market. The report will analyze the perception of the consumers
regarding the products offered by the company to create strategies for expanding in Pakistan.
The research will use both secondary and primary data to provide valuable insights for
developing the strategies.
Problem definition and Research Objectives
Pakistan being one of the tea love nations is still untapped in terms of offering the
consumers with quality luxury tea experience. The population in the country have different
opinions and their choice and taste of tea vary depending upon the geographical locations.
Therefore, it will be difficult for the company to make an expansion in the Pakistan market
without having enough information about the consumers and their needs. The Pakistan

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market will be difficult to penetrate as 40% of the market share has been taken by unbranded
tea companies and out of the remaining 60% of Tapal is the market leader by a bigger margin
(Shaikh 2018). Therefore, it is essential for the company to analyze the market effectively
examine the time of entry, marketing strategies and target market. The study will aim to
compare the purchasing behavior of the consumers in Singapore to the consumers in Pakistan
so that they can make modifications to their marketing mix.
The major of the study are as follows:
 To examine the consumer’s perception towards luxury tea in Pakistan when
compared to the perception in Singapore especially the working professionals
 To compare the primary data and the secondary data to provide valuable
insights on consumer perception
 To develop survey questionnaire and interview questionnaire to collect data
from the Pakistan market.
Current Understanding and Secondary Data Sources
Demographic data of Pakistan
Population 204,924,861 (July 2017 est.)
Age structure 0-14 years: 31.36% (male 33,005,623/female 31,265,463)
15-24 years: 21.14% (male 22,337,897/female 20,980,455)
25-54 years: 37.45% (male 39,846,417/female 36,907,683)
55-64 years: 5.57% (male 5,739,817/female 5,669,495)
65 years and over: 4.48% (male 4,261,917/female 4,910,094) (2017 est.)
Dependency ratios total dependency ratio: 65.3

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youth dependency ratio: 57.9
elderly dependency ratio: 7.4
Potential support ratio: 13.5 (2015 est.)
Median age Total: 23.8 years
male: 23.7 years
Female: 23.8 years (2017 est.)
Population growth rate 1.43% (2017 est.)
Table 1
(Source: www.worldbank.org. 2018)
Pakistan Tea consumption
Country
Area
Consumption segment
All Lowest Low Middle Higher
Pakistan Nationa
l
Local
Currency
66,204.9
0
45,229.5
5
19,170.0
2
1,784.50 20.83
Pakistan Nationa
l
$PPP 1,974.30 1,348.79 571.67 53.22 0.62
Pakistan Nationa
l
US$ 777.11 530.9 225.02 20.95 0.24
Pakistan Rural Local
Currency
41,301.7
9
32,212.4
3
8,956.95 132.41 0
Pakistan Rural $PPP 1,231.66 960.61 267.1 3.95 0
Pakistan Rural US$ 484.8 378.11 105.14 1.55 0
Pakistan Urban Local
Currency
24,903.1
1
13,017.1
3
10,213.0
7
1,652.09 20.83
Pakistan Urban $PPP 742.64 388.18 304.56 49.27 0.62
Pakistan Urban US$ 292.31 152.79 119.88 19.39 0.24
Table 2
(Source: www.worldbank.org. 2018)

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Average disposable income comparison
Pakistan Singapore
Average monthly disposable salary
(After tax)
$239.31
Ranked
139th.
$2,759.38
Ranked 26th. 12 times more than
Pakistan
(Table 3: Nationmaster.com. 2018)
The above tables show that the overall population of Pakistan is quite high and as per
the consumption data, the majority of the consumers belong to the lower segments in the Tea
industry. The consumers in the middle and the highest segment in the tea segment are low in
numbers and as per the purchasing power parity, the value is 0.62 in the higher segment and
49.27 in the middle segment for the urban areas. This shows that majority of the population is
below the poverty and as per the average disposable income of the consumers, its only
$239.31 which is quite less when compared to the disposable income of the consumers in
Singapore. The lack of foreign direct investment has resulted in slow economic growth which
is the reason that average consumers prefer buying tea from unbranded companies. This is the
reason that the unbranded tea companies hold 40% of the market in Pakistan (Shaikh 2018).
Tapal is the market leader in the branded tea segment and has been preferred by the
consumers due to the quality, consistency and reasonable price of the products. Tapal being a
domestic brand has developed a strong grip on to the market where the other branded
companies are nowhere near the products offered by the other organizations.

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There is huge in difference culture in terms of tea preferences in Pakistan and
Singapore. Moreover, the economy of both the countries are very different from each other.
Singapore is an advanced developing country and can be considered as a developed country
in terms of the economy and the infrastructural growth (Thesmartlocal.com 2013). However,
on the contrary, Pakistan is an underdeveloped country and the economy can be compared to
the South American or African nations. The inflation rate of the country is relatively high at
9% which has effects on the unemployment of the country which is at 6%. This shows that
the products offered by the company cannot be brought by majority of the population and
only a niche market of population will have the purchasing power to afford the habit of
visiting tea salon. Therefore, this means that TWG has to be carefully in selecting the
consumers in the market.
Tea habits as per geographic location in Pakistan
Tea is the part of cultural identity in Pakistan which is the reason that the
consumption average is 1 kg when compared to the global consumption average that is
0.79kg (Shaikh 2018). The consumptions vary from north to south where the population in
the south prefer string flavor and rich color. On the contrary, population in north prefers
lighter concentration which shows that there is diversity in preferences in tea consumption
based on cultural values. Singapore has a huge tea drinking population and tea has been
popular in the country for centuries. However, the majority of the tea flavors are on the
lighter and sweeter side, such as the Chinese tea, Bubble tea, Teh Tarik and tea frappe
(Thesmartlocal.com 2013). Therefore, it is essential to understand the fact TWG will face
difficulty in marketing the brand and developing brand equity in Pakistan.

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PESTEL analysis (culture consideration)
Political The political environment of Pakistan is not at all stable and the government has
failed to develop effective policies to manage the corruption and constant attacks of
terrorist. The government imposes heavy taxes on all commodities and highly in
depth when compared to other countries.
Economic The economy has very slow growth and the net loss of the country has increased.
The inflation rate is high which affects the employment rate and the disposable
income. The majority of the population are still below the poverty lines which is
the reason that they have less disposable income. Tea is one of the major imports
of the country as the tea is one of the cultural aspects in Pakistan. The economy is
dependent on foreign direct investment for economic and infrastructural growth.
The currency has a highly depreciated value in the global market so cheap labors
are available.
Social The society greets guests with tea as an option of beverages and majority of them
drinks tea at least once a day. However, the society at large is conservative and
depends on the loose local tea brands for supplying tea to them.
Environmenta
l
The government in Pakistan has not been able to implement policies to effectively
manage the environmental laws and most of the companies are not following the
environmental laws. This reflects the ineffectiveness of the environmental laws.
Legal Legal position of the country is not at all strong due to the increase in corruption
within the government. There is increase in concerns regarding the development of
effective laws to facilitate foreign trade and domestic infrastructure.
(Table 4: Haggard and Kaufman 2018)

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Unique Value Proposition
The unique value proposition of the TWG is providing the consumers with high
quality luxury tea with attractive packaging and providing them with a blissful experience of
belonging to elite class of tea lovers (Twgtea.com 2018). The organization welcomes all
high-income professionals to try out the products and makes the tea drinking a luxury
experience. The products have been branded as exclusive and has a symbolic value attached
to it. The organization while making an expansion into a foreign market have always
introduced a product that is the signature tea of that country (Adner et al. 2017). Moreover,
the brand uses innovation and creativity to develop new flavors and types of teas along with
unique food made from tea.
Research Method
It is key to use a research design that will be appropriate for the goal of the study. A
mixed research design will be used to collect data from the Pakistan market. The primary data
will be collected through quantitative and qualitative questionnaires (Bell, Bryman and
Harley 2018). The quantitative data will be collected using surveys conducted through out
different regions in Pakistan. The survey questionnaire will be fully structured to facilitate in
gathering relevant data. On the other hand, the qualitative data will be collected through semi
structured interviews to gather in depth data about the consumer perception (Morse 2016).
The study will use explanatory research design to collect the given data in the market and
develop strategies based on the analysis of both qualitative and the quantitative data.

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Sampling is the method of choosing samples from overall population especially in
case of market research where the target population is huge. Sampling reduces the cost and
time of conducting the research. The process of sampling starts with the identification of the
target population and in this research, the population of Pakistan are the target consumers
(Onwuegbuzie and Collins 2017). The next part is the identification of the sampling frame
which will consist of the high-income professionals in the country and the last part is the
sample size. The sample size will be 200 respondents for the survey questionnaire and 10
respondents for the interview questionnaire. However, due to lack of infrastructure in the
foreign market, the market research will be handed over to a market research bureau.
However, the questionnaire will be initially developed in Singapore and pilot testing
will be conducted in the Singapore market to check whether the questionnaire is leading or
not and whether the desired answers are obtained or not. This will consist of distributing the
questionnaire to the local consumers to gain their perception on the questionnaire and the
products offered by the organization (Mertens 2014). This will facilitate in examining the
validity and reliability of the questionnaire