Case Study: Lipton and Kai Shii

Competitors in the iced-tea market

Author: Parag Agarwal

Date: 25/11/2002

Tutorial Group: 7

Tutor: Ms Gillian Scott

1. Executive Summary

Unilever Bestfoods, USA and Shin Shii, Taiwan are competitors in the rapidly growing iced-tea market with their brands Lipton (in alliance with Pepsi) and Kai Shii respectively. Unilever has also introduced an instant hot-tea can by the name of Brooke Bond’s PG Tips. Kai Shii is about to be launched in the US market. The following study evaluates various market segmentation strategies, potential consumer target segments, and factors to forecast demand that were used or could have been used by these two companies. The main reference for this report was Chapter 3 of the textbook ‘Principles of Marketing’ by Kotler et al.
The main results of the analysis are as follows: • Both companies’ SWOT analysis reveals that they are dominant and successful in their home markets. • Kai Shii would require a great amount of effort to market itself and bridge the cultural divide and varying tastes and perceptions between Taiwanese and American consumers. • Behavioural (seeking convenience, health conscious), demographic (age groups) and geographic factors largely influence the market segmentation. • Pricing amongst competitors in the same product category plays a vital role compared to pricing amongst for example, carbonated soft drinks etc. • Future demand for the iced tea market or any other segment is based on the growth rate of current market segment bases such as age, income and nationality.
Both companies require different approaches to their marketing strategies. The following are the recommendations: