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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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Bags of tea audit project

Bags of TeaAudit Project

  • Rebecca Elliott

  • Spring 2010

Bags of tea audit project

  • Supplier is in control of the tea market

    • Strong Brands, Low Private Label

Leading brand demographics

Leading Brand Demographics

  • Lipton

  • Income: $20,000-$99,999 (pretty even)

  • Household Members: +5 members

  • Age: 35-65+ (pretty even)

  • Race: Caucasian

Private label demographics

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

Importance of depth

Importance of Depth

  • SKUs: 101

  • WalMart- Joyce: 59

  • Target: 38

  • Harps- Weddington: 35

  • Walgreens- 6th: 6

  • Walgreens- School: 7

Importance of depth1

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.

Importance of depth2

Importance of Depth

  • Appropriate Role: Maintain/Grow

  • Sales Volume: $628,502,000

  • Household Penetration: 46.2

  • % Item Sold on Deal: 21.2%

Strength of leading competing brands

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%

Strength of leading competing brands facings

Strength of Leading/Competing BrandsFacings

Bags of tea audit project

Bags of Tea Facings

Strength of leading competing brands1

Strength of Leading/Competing Brands

  • Gross Margins consistent with your “role” for the category?

    • Yes

Importance of depth gross margins

Importance of DepthGross Margins

Bags of tea audit project

Bags of Tea GM

Strength of leading competing brands2

Strength of Leading/Competing Brands

  • SKU found in every store: Lipton Hot or Cold 48 pacK

Private label opportunities

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%

Private label

Private Label

  • Private Label SKUs: 10

  • Total SKUs: 101

  • Private labels make up less than 1% of the total SKUs

Private label opportunities1

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.

Private label opportunities2

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.

Private label opportunities3

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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