Segmentation, Targeting & Positioning For Relaunch Of X Tea
STP is a mechanism used to introduce a new business to a new sector of clients. A series of strategic business decisions are taken here.
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Table of Contents


Market Situation

It is important to understand the current market situation  to re launch  tea as a new product. Let us assume that the brand of the re launch tea is X.

At present there are about 9  players  in the market  and its very tough and competitive. There is a very tight competition in the market for the product.   A SWOT Analysis has to be conducted to identify the strengths, weaknesses, opportunities and threats in the existing market.

  • Laojee
  • Lipton
  • Watawala
  • Dilmah
  • Halpe
  • Kotagala
  • Zesta
  • Meh
  • Stuarts Tea

Substitute Competitives

  • Coffee
  • Green Tea
  • Ice tea

A market analysis has  to be conducted in order to understand the preferred brand  of the consumers  and identify the customer preference and the income level of the consumers  for the brand.


According to Philip Kotler, “ Market segmentation” is the sub dividing of market into homogenous sub sections of customers, where any sub section may conceivably be selected as a market target to be reached with a distinct marketing mix”.

The market is segmented on the basis of the following need, characteristic, behavior , requirements and market mix.

  • Geographic segmentation
  • Demographic segmentation
  • Psychographic segmentation
  • Behavioral segmentation
Segmentation BaseVariablesExamples
Geographic SegmentationRegionIsland wide
 CityMajor and small towns  & rural areas
 DensityUrban , Suburban & rural
Demographic SegmentationAge10-20,21-30,31-40,41-50,51-60, 61+
 SexMale / Female
 Marital StatusMarried, Single , Living together, widowed, divorced
 IncomeUnder 10k, 20K, 30K,50K, above 50K
 EducationSchool goes, undergraduates, graduates
 OccupationManagers, Professionals, Military , unemployed and employed, students
Psychographic SegmentationSocial ClassLower, Middle, Upper
Behavioral Segmentation BenefitsAvailability , Quality
Table 01: Segmentation base categorization

Target Market

The target market of X Tea includes all sections of the society and will cover lower, middle & upper class  irrespective of age.

Product Positioning

According to Philip Kotler,  product positioningthe act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market”.

To position the product in the consumer mind, the below positioning strategies can be used .

  • To promote distinct features of the product.
  • To launch position strategy

An affordable price will be charged from the consumer to  provide a quality product , so that it would create a good position in the mind and will lead to a great promotion . Focus would be on quality instead of quantity.


The product is  made up of tea plant ,with a smell and a tangy  taste with health standards. The packing size would come up in different sizes. It will be very attractive and readily available in the market





The price of the X TEA are given below according to the different sizes.

Size                 Price

500grms          250/-

200grms          150/-

100grms          70/-

50grms            40/-

Positioning of the product Price against the Quality

Quality wise our position will be strong because of:

  • Good quality
  • Special taste
  • Disposable packing
  • Availability
  • Size variety

To position the tea in the consumer mind  advertising has to be carried out  using Newspapers, Press, radios, TV, outdoor advertising, Cinema, Internet  and magazines.


Evan .T .“What is market segmentation”, [online] available at:

Kotler, P., 2003. Marketing Management. 11th ed ed. Englewoods Cliffs,NJ: Prentice-Hall.
Fuchs, C. & Diamantopoulos, A., 2010. Evaluating the Effectiveness of Brand-Positioning Strategies from a Consumer Perspective. European Journal of Marketing, 44(11/12), pp. 1763-1786

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