Improving marketing strategy of BD tea exporters to the UK

Globalisation is the mainstream of a company in any country on earth, whether small or big. A company has to consider its mission, objectives and strategy to operate its export business globally. "A strategy is a fundamental pattern of present and planned objectives, resource deployments, and interactions of an organisation with markets, competitors and other environmental factors." Walker and Boyd (1999: p8). The above statement clarifies that the Bangladeshi tea exporters have to find out what is the consumer demand at present in the target market, where they are going to operate and how they can make improvement of their strategies. Strategic improvement has to be based on the use of accumulated resources and encompasses activities that will be undertaken in the target market to meet environmental opportunities or threats and achieve a competitive advantage over other strong competitors. Major strategic considerations for an exporter are the markets in which to continue his business. It is called market selection. Also important for consideration are the relative marketing support to be devoted to each sector and market segmentation within an individual country. It is a burning question for Bangladeshi tea exporters: how to improve marketing strategy in the United Kingdom and take an objective view of the marketing strategies and possibilities that can benefit them for their successful export business with the United Kingdom, on a sustained basis. The latest information of the Bangladesh Tea Board shows that Bangladesh tea is mainly exported to the countries such as Afghanistan, Bahrain, Germany, Greece, KSA, Kazakhstan, Kuwait, Oman, Pakistan, Poland, Qatar, the UEA, and the UK. The Bangladeshi brand "Planters Tea" is quite popular in Russia. The latest news from Bangladesh tea market is that Tetley has entered the market with five different brands and the local companies have reacted strongly with their own new brands. The brand "Heritage tea" hit the market with their new morning and afternoon blends. M.M. Isphahani Ltd is the single largest tea trading company in Bangladesh. Since its establishment in the recent times, HRC has internationally established itself as a reliable and quality exporter of Bangladesh Black Tea. It is quite tough to find any difference between Assam tea and Bangladesh CTC tea. Also Bangladesh's Menna black tea with Darjeeling flavour is excellent. Besides, some famous British companies such as Duncan Brothers, Finley etc. have or had their tea gardens in Bangladesh, along with many local companies. Table-1.1 shows here global production of tea in 2006, indicating the list of the countries which are the most tea-producing ones in the world. Bangladesh is the 10th largest tea producer in the world. It exports a variety of tea Best Leaf and Double Chamber tea bags, the laminated pouch; the "stand up" pouch; the food grade jar; the three-layer pouch; the 10 gram easy pack and the "bag-in-bag" tea bag and also organic black tea. It also exports organic green tea to Japan. Table 1: Global Production of Tea 2006 The Bangladeshi tea producing companies in private and public sectors continue to maintain a permanent place in the world renowned super chain store in the UK -- Harrods Limited. As Bangladesh is a member of the Commonwealth of Nations and there is now good trade and investment relationship existing between the UK and Bangladesh, it is a befitting time to find out ways and means to increase the market share of Bangladeshi tea there. The Bangladeshi tea exporters are doing business locally and globally with their full reputation in the competitive market amid many competitors in tea export-import business since its early age. Since 1971, tea has been one of the major lucrative export items of Bangladeshi exporters. Due to globalisation and open market economy, the scenario has, however, changed in recent years. There are new entrants to the world market with low priced tea in a situation where there is also a rapid increase of internal demand. According to the recent information from business sources, the tea exporters from Bangladesh who have been exporting tea to the UK, especially in East London areas, are facing some strategic marketing problems such as lack of proper ideas about their products, in terms of local market demand (product price, quality of products, taste of products, and availability), lack of proper knowledge of competitors' products pricing, long distribution channel, in-appropriate media for promotion etc. As a result, their target market is getting smaller; sales are declining; return on investment is lower and potentially risky. Cravens (1997) defines marketing strategy "as the analysis, strategy development and implementation activities in selecting market target strategies for the product-markets of interest to the organisation, setting marketing objectives, and developing, implementing and managing the marketing program positioning strategies designed to meet the needs of customers in each market target". From this perspective, it can be said that the marketing strategies embrace analyses of the target consumers and markets. The strategies, thus developed, have to be implemented properly. To improve the marketing strategy, Bangladesh tea companies have to find out who their target consumers are, where their potential market exists and which market areas have to be covered. It is essential to put in place a strategic plan that needs to be developed or changed, if required, and their proper implementation. Bangladeshi tea exporters to the UK, need to decide which strategy has to be applied there in a form, that is distinctive among competitors in order to reap the best of the competitive advantage here. Bangladesh tea exporters had a captive market in some countries to export tea. The scenario about tea export business has changed these days. The reasons behind this change are open market economy, emergence of new entrants with low priced tea to the global market and rapid increase of domestic demand. Export of Bangladesh tea was 9.09 million kilograms (kgs), in volume terms, in the year, 2005, which was 30.66 per cent lower than that of the previous year at 13.11 million kg. Export earnings were then worth Taka 742.62 million against Taka 934.04 million in the previous year. The volume of export in the year, 2007 rose markedly when it was 10,798 million kg. In volume terms, Bangladesh's export earnings totalled $14,532 million (Tk 12.530 million) in 2007 which were more than double of that of the previous year at $6.69 million (Tk 469.59 million). Out of the exported quantity, 6.57 million kgs was sold to Pakistan alone. The Government of Pakistan allowed duty-free entry of 10.00 million kgs of tea per year from Bangladesh since October 2002 and offered to increase the quota up to 15.00 million kgs. Tea exported to the United Kingdom was 11 million kgs in fiscal year (FY) 2006-07 and it increased to 24 million kgs the next year and in value terms, stood at $2,150 million in FY 2007-08. This reflected that there was more effective and efficient influence of the Bangladeshi tea exporters to expand their business in the UK. The 10 years' export statement in table No-02 shows, from a business point of view, the possibilities for increasing tea exports, if all relevant strategies are rightly developed and implemented. Table 2: Bangladeshi tea Export last 10 years A good organisational design matches people and work responsibilities in a way that suits best the needs for accomplishing a firm's marketing strategy. Deciding how to assemble properly people into organisational units and assigning responsibilities to different mixed components that make up marketing strategy, do impact the marketing performance. Organisational structures and processes must be matched to the needs for businesses and marketing strategies that are to be developed and implemented in effective ways. The marketing organisation has to be flexible to respond to the changing conditions and strategic needs. Organisational design also needs to be evaluated on a regular basis to assess its adequacy and to identify the necessary changes. Restructuring and reengineering of many organisations during the last decade led to many changes in the structure of marketing units. The reasons why some improvements are required, have been discussed here. It shows which sectors are the most important ones and do need to be developed. It has sought to illustrate how existing marketing strategies can be developed and implemented by the Bangladeshi tea exporters in the UK. The marketing strategies of most Bangladeshi tea exporters should be more oriented towards long-term market share than making short-term profits, in order to exploit new environmental opportunities and to facilitate faster market adaptation. Among the people, who are consuming Bangladeshi tea and other different brands in the UK, only a small proportion of such tea users -- 15 per cent of the sample population -- prefer other brand; almost half of the people covered under the sample survey like the UK-renowned brands. Although there is a large area that do, and can potentially, cover Bangladeshi tea in the UK market, Bangladeshi brands are covering 35 per cent of total survey areas. The consumers of Bangladeshi tea consider that these are comparatively cheap and also are of standard quality; almost 60 per cent of such consumers gave a positive response, in terms of preference for the Bangladeshi tea. The rest 40 per cent of them think still negatively about it. There is a large number of tea consumers who consider that Bangladeshi tea is comparatively positive in pricing and quality. About 55 per cent of those covered under the sample survey think that Bangladesh teas a good value- for-money choice. It can, thus, be said that there is a great opportunity for the Bangladesh tea to achieve a golden status in the target market and attract the attention of more customers in the United Kingdom. From this perspective, Bangladesh can develop a strategic plan and implement it to become a market leader in the UK region. Bangladeshi tea's position in domestic and foreign market shows bright prospects. If a proper policy can be operationalised, this will, in the long term, enable Bangladesh to exploit the large opportunities for the Bangladesh tea industry. Domestically Bangladesh tea is now very popular and this image can also help attract more foreign customers. To evaluate the future growth of Bangladesh's tea export business in the UK, the government of Bangladesh needs the support of adequate marketing strategic resources for both drawing up appropriate action plans and implementing the same. Such resources will enable it to perform the job smoothly. The writer can be reached at e-mail: mirlondoner@hotmail.co.uk