Exploring the Australian Market: Lipton R.T.D. Iced Tea Caroline Bintz Kevin Donohoe Mike Holt Amber Miller Sara Vineyard Quick Lipton Facts Current Global Market Share (2000): 9.5% Flavors: 9 flavors Kroger, Walgreen's, Meijer, etc. Australia at a Glance
Land mass equal to U.S., but population equivalent to the greater Los Angeles area. Majority of population located on the coast Age as of 2004: 0-14 years = 20.1% 15-64 years = 67.2% 65+ years = 12.8% 20% of population born outside of Australia Consumer Behavior The R.T.D. tea market in Australia is of a much smaller scale as compared to that of the United States.
- Australia market 0.4 million liters in 2002 - U.S. market 1,878.3 million liters in 2002 The Australian R.T.D. tea market saw a 37.50 percent decrease in volume sales over the years of 1997-2002; whereas the U.S. experienced a 32.46 percent increase during this same period. The RTD tea market experienced a 55.57% decrease in value sales in Australia from 1997-2002. Forecasted sales for RTD tea in 2005-2007 are only 0.3 million liters per year. Recent trend towards high quality, value-added food products. Consumer spending on non-alcoholic beverages in Australia were $5.17 billion in Australian dollars in 2001. PRODUCT roduct / Place / Price / Promotion
Competition Cadberry Schweppes Australia - Manufacturer of sugar confectionery and soft drink. - Brand Share of market for fruit drinks: 4.7% - Types: Oasis, Passiona, and Sunkist Berrivale Orchards Ltd. - An association of cooperatives producing fruit, fruit juice and other foods. - Brand share of market for fruit drinks: 8.3% - Types: Berry Fresh, El Fresco, and Sunrise roduct / Place / Price / Promotion Labeling & Packaging Australia /New Zealand Standards code states that there are percentages of key ingredients and main ingredients that may cause allergies.
U.S. exporters should ask their Australian importer to ensure that their products comply with Australian Federal and State Government labeling regulations. Australian laws mandate that pre-packaged goods are to be labeled with a true description of the goods in clear contrast to the background graphics, nor may they falsely represent any crucial information pertaining to the product. Cans sold by Coca-Cola; packaged in 10s and 30s. Cans sold by Pepsi; packaged by 24 case. roduct / Place / Price / Promotion Recycling/Packaging Legislation has provided incentive for Australian drink companies to create voluntary waste reduction
plans to meet government waste reduction goals. In accordance with legislation, Unilever Australia has signed the National Packaging Covenant and the Greenhouse Challenge Programs. Unilever Australia has an involved corporate environmental policy which strives to minimize waste, reduce environmental impact from production, conserve energy, and maximize recycling and re-use practices. PLACE roduct / Place / Price / Promotion
Retailers Supermarkets 1.8 supermarkets per 1000 inhabitants Woolworths and Coles/BiLo dominate market with 75% of supermarket sales Trend towards wider product range, larger outlets, longer hours, lower prices Supermarkets account for 2/3 of food sales Convenience stores 7-eleven and Night Owl are major chains 82.6% of sales are done
by independently owned outlets roduct / Place / Price / Promotion Distribution Domestic production options Unilever plant in New South Wales that produces hot tea. PepsiCo Australia in New South Wales produces similar products and has strong presence in category. Coca-Cola Amatil
produces similar products located in Victoria. Importing options China produces/distributes Lipton through Guangdong Lipton Foods Company Thailand produces/distributes Lipton through Serm Suck PCL Indonesia produces/distributes Lipton through Unilever
and Aqua Golden Mississippi Consumer roduct / Place / Price / Promotion Corporate Distribution Aid in Australia Freight on Board Pty Ltd - Freight on Board are able to provide sea, air, customs and logistical solutions to American companies doing business in Australia. Henning Harders Pty Ltd - Henning Harders are international forwarding agents and licensed customs brokers. They handle consignments by air and sea freight - in particular between
Australia and the United States roduct / Place / Price / Promotion US Commercial Services Help US companies find local partners and attorney. IPS: International Partner Service: CS will locate, screen, and assess Australian agents, distributors, licensees, and joint venture partners for IS companies. Golden Key Services: designed to make US company representatives visit to Australia more productive. Provides Market Orientation briefings, market agents, agent/distributors search and screening. http://www.buyusa.gov/australia roduct / Place / Price / Promotion
Corporations Law The entity is registered under automatically as an Australian company, enabling it to conduct business throughout without further registration in individual states or territories Does not require directors to be Australian, but must have a registered office address and a statutory agent responsible to fulfill the requirements of the Corporations Law Every company must be registered for a Australian Business Number under the Goods and Services Tax. You are free to choose between Australian or US law governing your contract. However, if foreign contract agreed upon, without a stipulation of law, Australian courts will apply the law of jurisdiction where the agent of distributor works, that is Australian federal and appropriate state and local law. roduct / Place / Price / Promotion Infrastructure
Highly sophisticated transportation and telecommunication systems: Road System: 490,000 miles of paved roads; 65% of freight is shipped along these roads. Rail Road System: 24,000 miles of railroads; preferred mode of transportation from Eastern ports (privatized in 1999) Air Transport: Serviced by most international carriers, providing access routes from regional centers to major cities. Sea Transport: 83% of exports and 70% of imports; mainly dealing in bulk commodities. Telecommunications system: land-based telephone lines provide access to 97% of all households. Telstra, Optus, Primus, AAPT, Orange, and Vodafone are the dominant carriers. Has one of the one of the highest mobile phone user rates in the world (over 10 million subscribers)
Telstra, Vodafone, and Orange are the major providers. Rapid development because of introduction of fully digitalized network. PRICE roduct / Place / Price / Promotion Price Current market prices for beverages (in Australian dollars)
Coke 1.25L = $1.43 Gatorade 600mL = $1.97 Just Juice 1L = $1.67 RTD Pop Tops Juice 250mL = $.465 Australia has experienced positive economic growth in recent years: A free-market economy that is highly involved in the world market Much of the recent growth has been attributed to strong domestic demand: consumption 4% in recent years. Capital spending and consumer spending appear to remain positive in the upcoming future due to the governments recent budget and tax cuts. Exchange Rate = 1.5419 Australian dollars : 1 US dollar roduct / Place / Price / Promotion
Price control As Australia is a free-market economy, there is little formal price control. The national regulator, the Australian Competition and Consumer Commission (ACCC), has the power under the Prices Surveillance Act of 1983 and the Trade Practices Act of 1974, to investigate, vet or monitor the prices charged by businesses. The ACCC was also active in the implementation of the Goods and Services Tax (GST), serving as a watchdog to ensure that resulting price increases by the private sector are not excessive. State governments have the power to control prices, but in recent decades have rarely done so. Goods and Services Tax (GST) shifted Australias tax mix away from income taxes, in July 2000.
set at ten percent on most goods and services PROMOTION roduct / Place / Price / Promotion Media Availability Television: 97% of population own a TV, only 25% with cable TV marketers can ideally reach 93% of population Cost for 30 second, Primetime slot, (6:00PM-12:30PM) is $4,620 Adults 18+ watch the most primetime TV Only 20% time used for paid
advertisements can be from outside Australia Radio: 97% of households and automobiles have radios Radio marketers have the potential to reach 98% population Cost for 30 second, Primetime slot, (5:30AM9:00AM) is $600 roduct / Place / Price / Promotion Media Availability (cont.) Newspapers: 2 national daily papers accept advertising
Combined circulation of 225,000 The Australian 1 page cost US$ 8,690 The Australian Financial Review 1 page cost US$ 4,775 Magazines: 600 national consumer magazines accept advertising Australia Womens Weekly Avg. Issue Audience 3,571,000 1 page cost of US$ 14,900
New Idea Avg. Issue Audience 2,694,000 1 page cost of US$ 11,720 roduct / Place / Price / Promotion Alternative Media Cinema Outdoor transit Direct marketing - Australians prefer promotional material to be sent through direct mail. - Duty is levied on catalogs, circulars, and all advertising matter introduced into
Australia Internet - Low trust in internet safety Telemarketing - Code of Practice restrictions instated June 2003 Ad trolley In store radio NOTE: Lipton in the United States currently uses Network TV, Spot TV, syndicated TV, Cable TV network roduct / Place / Price / Promotion Sponsorship Opportunity Common Wealth
Games 2006 Melbourne Fanatical following of sport Television audience expected to be in excess of one billion people 71 member countries Language of games is English roduct / Place / Price / Promotion Possible Roadblocks Language in Australia: Colloquialisms + idioms make Australian English unique
Spot on means right on, prang is a fender bender, crook is someone who is unwell, bloke is a guy, mate is a friend (male) Gday, goodonya, shell be right, mate, bloody Shorten words for everyday conversation Uni, kindy, telly, footy, barby To avoid offensive slang, use standard English Dialect: Accent is far more nasal and less clipped than British English accent
Imported commercials require voice-overs Mid-Atlantic accent Inappropriate Gestures: winking at women, yawning without covering mouth roduct / Place / Price / Promotion Possible Roadblocks (cont.) UK cultural influence Tea preference Metric System Difference in
seasons due to location relative to Equator Liquid Conversion Chart: 2 fl oz 60 ml cup 4 fl oz 120 ml cup
8 fl oz 240 ml 1 cup 16 fl oz 480 ml 1 pint Thank You!
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