Companies are changing ways in which they transact their business, shifting paradigms from traditional methods that involved targeting local markets to newer methods, which aim at reaching international markets. A well-known example of an internationally based company is Unilever Company which has subsidiaries running its activities in almost every country of the world. Due to this reason, Unilever has developed a number of mechanisms through which it carries out its business. This report will however not concentrate on Unilever as a whole entity, but it will rather focus on Lipton, one of its subsidiaries based in Turkey. The report will offer an analysis of the company’s local and international marketing strategies, it will highlight its financial reports, implications of business transactions and it will offer conclusive ideas and recommendations.
The report will analyze some of the ways in which Lipton has managed to deal with both local and international markets, and how it has dealt with issues emerging in both. A highlight of the company’s financial reports and what they entail has also been provided in this paper; moreover, the implications of the company’s business transactions are discussed in the paper.
The world is gradually growing into a diversified market place where either locally produced or imported/exported products can be sold. With the continued diversification of goods and services, companies have had to change the ways in which they brand their products and sell them in a market full of other competitors. In order to impact either local or international market, companies have to be innovative regarding the ways in which they strategize their business activities, including accessing raw materials, their transportation, production, distribution and sale of the final goods. Due to these reasons, organizations have come up with various marketing approaches to the sale of their goods to consumers. This report will analyze one of the world’s largest companies, Unilever, while focusing on one of its products, Lipton. The aim of this report is to analyze the marketing approaches adopted by Lipton in ensuring that the company achieves maximum sales and thus maximum profits. Moreover, the report will evaluate some of the trends implemented by Lipton in order to ensure that it is not only a successful locally-based product but also an internationally recognized one.
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Lipton, a subsidiary of Unilever, a multinational company that deals with consumer goods, has grown from a small chain of London-based supermarkets to what it has now become a globally recognized product. Lipton specializes in tea production and sale and has managed to conduct its activities in various countries including Turkey. Emerging from Sir Thomas Lipton’s vision of packaging and shipping tea at low costs to his consumers, Lipton became a successful product in the United States thus, giving birth to a newly globally recognized product. Years after its successful emergence and survival in the market, Lipton was slowly acquired by Unilever through a series of transactions. To begin with, Unilever initially bought Lipton’s USA and Canada- based companies in 1938 and in 1972 Unilever finally acquired the remainder of the global Lipton from Allied Suppliers. A series of other transfers and partnerships later emerged, such as the 1991 joint venture with PepsiCo for the purpose of producing ready-made (canned and bottled) tea in North America. This first joint venture was referred to as the Pepsi Lipton Partnership. Moreover, in 2003 a second joint venture (Pepsi-Lipton International (PLI)) saw a partnership agreement that covered markets that were not in the United States, but in the rest of the world. Such markets that were targeted outside the United States, including those in Turkey, will be analyzed in this report.
The old saying “charity begins at home” is perhaps one of the most seriously taken by businesses and organizations wishing to have a successful long-life business operations. For this reason, the phrase that charity begins at home comes to serve companies with the idea that for a company to be successful in new markets, it must first make an impact at home for the product to grow. Lipton has done a lot of local marketing in Turkey to ensure that the product remains relevant and influential in the country. Turkey is ranked fourth in the world in terms of largest tea markets and consumers and fifth in terms of the world’s largest producers. It is important to state that Lipton is doing everything in its power to ensure that both tea consumers and producers in Turkey are satisfied with the company’s business transaction on their soil. In order to achieve this, Lipton has made a number of innovative and calculated moves aimed at reaching out to both consumers and producers. These moves include a series of advertisements, campaigns, joint ventures with the Turkish government and other private and public organizations such as hospitals. The nature of such an approach in the market has been described as competitively aggressive by many market researchers (Mayrhofer, 2012).
To begin with, Lipton has targeted tea producers by working hand in hand with Rainforest Alliance to ensure that measures put in place are directed at bettering environmental, social and economic impacts of tea production. This move is aimed at gaining the favor of tea producers by ensuring that their source of livelihood is protected for future revenue generation. Moreover, Lipton Turkey is working hand in hand with local growers with an aim to train future growers. Through this given initiative, approximately 15,000 Turkish tea growers will obtain one-to-one training before becoming Rainforest Alliance (RA) certified. In addition to that, Lipton Turkey cooperates with Regional Chamber of Agriculture (RCA) in order to establish a soil analysis laboratory to help advice tea growers on the best soil practices to use to ensure quality tea production. The results of the impact of Unilever’s Lipton in Turkey have tremendous impact on improving the lives of more than 60,000 indirectly and directly affected participants ranging from social and economic to even health impacts including the initiative to target women suffering from joint and back pain (Cetinkaya, Kambu& Nakamura, 2014).
While targeting the consumers, Lipton uses a series of local advertisements in newspapers, magazines, television, radio and even on the internet to make their products well known. Lipton`s official website in Turkey (http://www.lipton.com.tr/) offers details of activities carried out in the country, but majorly, the website is targeted at improving the company-consumer interaction through sale of goods, maps to nearest shops and receiving orders and customer feedback. Lipton Turkey has a variety of products for sale. These products served in Turkish markets include ready-made tea, canned tea and packaged tea that will be added to water. Majority of the products sold in the market are comprised of products that are manufactured from locally harvested tea. The harvested tea is processed, packaged and distributed to various stores where it is later sold to consumers. Lipton tea products that are sold in Turkey include: Lipton Alps Tea, Lipton Apple and Cinnamon tea, Lipton Citrus and Orange Bottom tea, Lipton Forest Fruit, Lipton Lemon and Ginger tea to mention a few. In order to attract more customers, Lipton has had to diversify its tea products to include, but not limited to, the ones mentioned above. This move is aimed at trying to ensure that any tea enthusiast hoping to taste Turkish tea can be provided with a wide range of products to choose from. Local consumers are able to make an informed decision on the type of tea they would wish to have and suit their mood if they try various products that can be found on the shelves (Unilever, 2015).
In order to boost locally generated revenue, Lipton has targeted international markets by exporting some of its Turkish products to other nations. Turkey, ranked fifth in terms of the world’s largest tea producers, stands to have a lot of market for its products, especially in countries that do not have their own locally produced tea. According to some of Turkish residents living away from home, Lipton’s Turkey-based company campaign aimed at exporting their products has been welcomed as a way of helping them rekindle memories that remind them of home (Beard, Ochoa, Childers, Bauchan& Shepard, 2013).
Implications of Local and International Marketing
Lipton’s Turkey activities on both local and international markets have had their fair share of implications either on the company or individuals directly or indirectly associated with the company. Perhaps one of the greatest impacts that Lipton has had in both cases is that the company has been a major employer. Lipton Turkey has helped in provision of numerous jobs to those who work for it and those who have been certified with the help of the education initiatives supported by Lipton. It is estimated that around 60,000 Turkish citizens are directly and indirectly impacted by Lipton’s activities in the country. By working with organizations such as Rainforest Alliance and Regional Chamber of Agriculture, Lipton has been able to create a foundation using which it can educate and certify individuals equipped with necessary skills for employment. The government further plays a role of registering and monitoring these individuals to ensure that they practice in order with the country’s regulations either locally or internationally (Smith, 2009).
Another impact Lipton has had on both local and international markets is that the company’s huge resources have generated wealth that allows the company to trade its shares in the stock markets. Lipton has targeted new shareholders to participate in its revenue generating activities by selling some of its stocks to all interested buyers. While in turn creating wealth for the company, which can be used to promote sales and distributions, research, advertisement, purchase equipment, pay workers and expand and acquire old and new company assets, the shareholders can enjoy the annual profits generated by Lipton’s activities. Increasing the company’s overall asset base in local and international markets ensures that tea produced in Turkey remains a strong brand to reckon with (Pękal, Biesaga, &Pyrzynska, 2013).
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Lipton actively aims at sharing some of its approved financial reports with its shareholders. Such a move is targeted at ensuring all legalities are adhered to including the fact that all financial information regarding the company that is compiled for public viewing and use is released to the public after approval. Such reports that are released to the public include consolidated financial reports, balance sheets, and shareholders’ equity and income statements. Annual financial reports help maintain the company’s credibility in declaration of its wealth. Shareholders are able to analyze the reports and make informed decisions on whether or not to continue investing in the company, and also whether the company’s activities are in order with the memorandum of the understanding signed. According to Unilever, Lipton has contributed up to 3 billion pounds in sales (Unilever, 2015). Lipton sells its tea to countries in Europe, Middle East, Asia, and North America. Part of these sales is from Turkey. Investors earn good dividends from the performance of Lipton.
The aim of Lipton Turkey is to remain a relevant brand to both its local consumers and international buyers. In order to achieve this, Lipton has employed ways to ensure that as a brand name, Lipton tea remains to be a global force reaching areas that could only have been a dream years before. The first approach taken by the company is conducting an extensive research on the changing trends in the new market. Changing trends include processing, packaging, advertising, diversification, emerging markets and emerging competition. Lipton understands that whatever may prove to be successful today may become obsolete in a couple of years especially with the increasing changes in technology. The company has invested a lot of funds in creating a research team that will cover any area, both strong and weak, in its running (Yildirim, 2014).
Perhaps one of the major innovations that Lipton has made in the past years is the introduction of different flavors of its ready-made products. The wide range of products has been made possible through an extensive research done of flavor addition, packaging, target market and advertising. Lipton, after launching the new flavored products to the market, carried out a major campaign geared towards creating public awareness of the new products. Such campaigns on social media, television and on the website served as a competitive advantage to Lipton against some of its competitors who only engaged in selling tea in its traditional format (without any additional flavor) (Karak&Bhagat, 2010).
Conclusion and Recommendations
It is evident that Unilever has ensured its international success, based on activities of Lipton, one of its subsidiaries based in Turkey. Aimed at tea production in Turkey, Lipton has not only proven to be a local economic power hub, creating employment and generating revenue, but also an international challenger for its Turkish produced tea and global shares. Lipton Turkey has become a company that benefits a large workforce in Turkey, promoting local tea to international and local consumers. Moreover, citizens have benefited from the program initiated by Lipton Turkey, thus, benefiting the government in generating revenue.
Nevertheless, this report would like to offer room for recommendations and further research to be carried out on Lipton’s activities in Turkey. For example, the report would like to recommend that Lipton work hand in hand not only with tea producers, but also with other agricultural participants in the country to ensure that the overall Turkish agricultural sector grows as well. Furthermore, the report recommends that more research should be conducted on the environmental impacts of large and small scale tea productions in the country and how they impact nature conservation.