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Bags of Tea Audit Project

Bags of Tea Audit Project. Rebecca Elliott Spring 2010. Supplier is in control of the tea market Strong Brands, Low Private Label. Leading Brand Demographics. Lipton Income: $20,000-$99,999 (pretty even) Household Members: +5 members Age: 35-65+ (pretty even) Race: Caucasian.

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Bags of Tea Audit Project

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  1. Bags of TeaAudit Project • Rebecca Elliott • Spring 2010

  2. Supplier is in control of the tea market • Strong Brands, Low Private Label

  3. Leading Brand Demographics • Lipton • Income: $20,000-$99,999 (pretty even) • Household Members: +5 members • Age: 35-65+ (pretty even) • Race: Caucasian

  4. Private Label Demographics • Private Labels • Income: less $20,000-$49,999 (highest in $20,000) • Household Members: 3-4, +5 (pretty even) • Age: 45-54 (highest) • Race: Caucasian

  5. Importance of Depth • SKUs: 101 • WalMart- Joyce: 59 • Target: 38 • Harps- Weddington: 35 • Walgreens- 6th: 6 • Walgreens- School: 7

  6. Importance of Depth • Does store depth seem to follow a store location’s trade area demographics? • No, Walgreens tend to be more expensive in price compared to Walmart, and they have at least twice as many SKUs.

  7. Importance of Depth • Appropriate Role: Maintain/Grow • Sales Volume: $628,502,000 • Household Penetration: 46.2 • % Item Sold on Deal: 21.2%

  8. Strength of Leading/Competing Brands • Dominate Brand: Litpon • Share of Facings by Manufacturer • WalMart: 55.9% • Target: 41.9% • Harps: 42.5% • Walgreens-6th: 50.0% • Walgreens-School: 50.0%

  9. Strength of Leading/Competing BrandsFacings

  10. Bags of Tea Facings

  11. Strength of Leading/Competing Brands • Gross Margins consistent with your “role” for the category? • Yes

  12. Importance of DepthGross Margins

  13. Bags of Tea GM

  14. Strength of Leading/Competing Brands • SKU found in every store: Lipton Hot or Cold 48 pacK

  15. Private Label Opportunities • Private labels are not very strong in this category. • Stores that carry private labels: • Harps (Best Choice): margins around 60% • Walmart (Great Value): around 45% • Target (Market Pantry): around 40%

  16. Private Label • Private Label SKUs: 10 • Total SKUs: 101 • Private labels make up less than 1% of the total SKUs

  17. Private Label Opportunities • Walmart, Target and Harps carry private label brands, but I would not say they are really committed to them. While Walgreens, doesn’t carry any private labels at all.

  18. Private Label Opportunities • Private Labels are going to have a decreasing presence in this category • Although margins are good, Brand Names have to much power in the category. Lipton takes up half of shelve space. • Tea is an inexpensive product, which means having a private label, known for their low prices, would have little effect on the customers decision. Might as well by a well known tea like Lipton.

  19. Private Label Opportunities • Recommendation for: Walmart • I would recommend that Walmart increase their emphasis on national brands. Although, private label have decent margins, the national brands, especially Lipton, dominate this category. • Because it is such an inexpensive item, buying private labels will not save the customer. Might as well get the well-known brand.

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