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1. Conduct a STEP analysis for Rooibos.
1.1. Introduction
Over 300 years ago the local people of the mountainous Cedarberg region of the Western Cape were the first to come to the realization that the needle shaped leaves of Rooibos (Red Bush) could be prepared into a palatable liquid drink. The locals found the needle-like leaves of the wild Aspalathus Linearis plant produced an aromatic tasting tea. The tea also yielded health benefits.

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  1. 1. 11. Conduct a STEP analysis for Rooibos.1.1. IntroductionOver 300 years ago the local people of the mountainous Cedarberg region of the Western Capewere the first to come to the realization that the needle shaped leaves of Rooibos (Red Bush)could be prepared into a palatable liquid drink. The locals found the needle-like leaves of thewild Aspalathus Linearis plant produced an aromatic tasting tea. The tea also yielded healthbenefits.Primitive methods were employed to harvest and process the plant to produce the tea. Productiontoday is based on the same principles however producers do employ current technology,mechanization and refining methods using systematic cultivation and austere quality control.The Rooibos market did collapse after the Second World War and the Clanwilliam Tea Co-operative established in 1948 resuscitated the market. In 1954 The Rooibos tea Control Boardwas initiated by the Minister of Agriculture to regulate marketing, stabilize pricing and moreimportantly standardize quality.2. Analysis2.1. Social Factors affecting RooibosBoyd et al. (1990) suggests values, attributes and general behaviour of individuals in a givensociety represents the environment.A desire for a natural lifestyle has resulted in an increasing utilization of complementary andalternative health remedies. Modern pharmaceuticals are being based on natural herbs and arebeing used successfully to treat medical aliments.The unique properties of Rooibos addresses some of the issues in the global shift to healthierliving. Rooibos is a good source of antioxidants, is the only know source of the antioxidantaspalathin . Aspalathin is known to play a significant role in combating several lifestyle diseases.Rooibos has proven cancer fighting properties. Continued research is exploring the role of
  2. 2. 2Rooibos in promoting healthier hearts and preventing diabetes. Rooibos is naturally caffeine freewhich makes is suitable for children, infants and breastfeeding mothers.Continued impetus into research on Rooibos especially by the South African government isrequired. This will lead to greater understanding of Rooibos for the great good of society.2.2 Technological Factors affecting RooibosAdopting technology should be a standard practice for marketing Rooibos. Technologyintroduces stronger, more effective and faster production methods.Boyd et al (1990) state technological developments has an influence on all marketingundertakings. Boyd et al (1990) further suggests these marketing undertakings includescommunications by utilizing new media or selling tools, distribution by opening new channels ormodifying operations and monitoring performance of existing outlets as well as looking atpackaging by allowing the use of new materials and designs.Merging Rooibos, a traditional product with technology is essential to the sustainability ofRooibos. Technology is an important macro-environmental variable. Adopting technology forconvenience i.e. development of packaging, quicker and easier preparation, palatable taste andincreasing shelf-life, will contribute to consumer benefit and drive sales.The health benefits of Rooibos is well documented, increasing social media consciousnessthrough online campaigns i.e. facebook and twitter and dedicated blogs to augment the benefitsto the world market.2.3 Economic Factors affecting RooibosEconomic factors are of significant apprehension for Rooibos. Both local and internationaleconomic factors are likely to impact demand, costs, prices and profit. Rooibos is a uniquelySouth African product and thus has direct influence on the South African economy. The currentSouth African rand @ R6.86 (07/10/2010 - negatively affects export revenue. Down the linethis affects demand and production.
  3. 3. 3The economy is a universal component of the marketing environment states Boyd et al. (1990).Boyd et al (1990) further state that the economy is the most probed, however the ability to fullyunderstand and forecast changes in the economy is restricted. In an uncertain economic climate,Boyd et al (1990) state that population demographics, the rate of economic growth, interest ratesand currency exchange rates are the most likely economic variables to affect marketing activities.Economic factors affecting Rooibos are significantly out of the control of Rooibos. Hence duringthis period focus on developing a robust market mix for the local market is vital.2.4 Political Factors affecting RooibosRooibos has been fortunate to be operating in the global environment. Rooibos is exported tofirst world countries like United States, Germany and Japan. Rooibos future lies in the politicaland legislative conditions of these countries.According to Boyd et al (1990) legislation defines the regulatory environment within whichRooibos operates. Boyd et al (1990) suggests the political environment presents not onlystrategic threats to the business but opportunities as well. Deregulation could possibly open newmarkets.Du Plessis et al (2005) state that in South Africa this environment has become significant tobusiness. Recent laws promulgated has direct impact on Rooibos examples are Broad BasedBlack Economic Empowerment and Female Empowerment. Du Plessis et al. (2005) suggests thetasks of marketing strategies is to study and research both international and local political events.Locally Rooibos requires the political stability of South Africa. Government needs to be seen asbeing favorable to both employer and employee. The South African government needs toencourage competition, fair labor practices, taxation which is favorable to producers as well assupporting previously disadvantaged producers.
  4. 4. 42. Discuss growth opportunities that Rooibos may pursue.Micheal Porter states that vertical intergration is the combination of technologically distinctproduction, distribution, selling and or other economic process and as such it represents adecision which Rooibos to use internally or administratively rather than market transactions toattain its economic goals. (Porter 1980)The emergence of new segments, health benefical foods and cosmetics with pharmaceuticalbenefits, the market for Rooibos has improved substantially over the past decade. This inevitablyhas opened new opportunities for producers, enabling producers to position Rooibos amongstother natural ingredients. An example, Rooibos is a good source of antioxidants and is the onlyknown source of a potent antioxidant aspalatin which could play a role in combating severallifestyle diseases.Vertical intergration for Rooibos can reduce the uncertainty of supply and demand and aspointed out by Porter 1990, hedge Rooibos against price flucuations and attract vertical marketslike the food and cosmetic sectors. It is well documented that significant potential lies in thefoods and cosmetic sectors, this as companies capitalize on the current global consumer appetitefor natural herbal alternatives. The growth and development of the food and cosmetic sectorsimprove the Rooibos markets.In the pharmaceutical sector the shift to herbal alternatives from synthetic medication isincreasing globally. This interest is evident in complimentary alternative medical practices andtraditional medicinal practices. Re-energized and commercially viable practices like traditionalChinese medication and Indian Ayurvedic treatments are opportunities for Rooibos.A comprehensive review of Rooibos research was published by the American Botanical Councilin 2003. The research summarises the scientific evidence that Rooibos is a source of Flavonoidantioxidants and protects against cancer, heart disease and stroke. Extensive anecdotal evidencesuggests that Rooibos has other beneficial effects not yet fully verified or understood. There areclaims that bathing in lukewarm Rooibos is an effective way to treat conditions such as eczema,rashes and sunburns. Therefore researches are now also working towards a better understanding
  5. 5. 5of the anti-allergic and immune boosting effects of Rooibos. There is also a huge future potentialto explore the potential of Rooibos in the fight against HIV.Coffee has long been the brew of choice. The flovor and aroma induces flocks of consumers tocoffee shops daily. Well established coffee shops locally offer Rooibos on their menu. Growth inthis market will be organic. International coffee shops are where opportunities for growth forRooibos exist. Starbucks is a US based coffee shop brand. Starbucks has over 10000 coffeeshops in more than 30 countries. The main objective of Starbucks is to establish Starbucks as the“most recognised and respected brand in the whole world.” Tazo Tea is the in tea house brandassociated with Starbucks. Similarily to Starbucks, Tazo Tea uses “new age” marketing tomarket its teas’ to consumers.Tazo Teas’ includes, Chai Tea, Green Tea and Earl Grey amongst 20 or so others and includes aVanilla Rooibos Blend.Vanilla Rooibos is described a lush and indulgent blend of Rooibos, Tahitian, vanilla, cinnamon,apples and peaches. The Rooibos in Tazo Vanilla Rooibos begins life as an unassuming bush onthe South African plain. From there things get considerably more exciting, uniting with thetartness of apples and the sweet notes of peach and Tahitian Vanilla, the creamy Rooibosbecomes a cup of tea as indulgent and grand as its beginnings are humble. We should be solucky.”In the marketing description given above Tazo does not leverage the benefits of Rooibos. Theopportunity for Tazo Tea as a Starbucks house brand exist to market Rooibos as an individual teaas it does Chai Tea, Green Tea and Earl Grey. Selling approximately 4 million cups dailypositioning Rooibos as a healthier option, opportunities for growth exist here as well as withother well establish coffee shop brands like Seattle Coffee.INCLUDES COSEMTISC
  6. 6. 63. Make recommendations to Rooibos on developing its Market Mix3.1. IntroductionFor Rooibos to achieve its marketing goals, Rooibos must employ a strategy which includes allthe elements of the marketing. One of the elements of marketing is the marketing mix. Themarketing mix refers to the combination of instruments which will be used in the sales ofRooibos. The marketing mix concentrates on combining the elements of marketing in a specificway that will culiminate in continued increasing sales.3.2. ProductRooibos Facts - Rooibos is not a tea, but a herb. The rooibos tea is derived from the dried Rooibos leaves is a herbal infusion. - Rooibos has a distinctive colour, flavor and aroma, which differentiates it from other teas. - Rooibos is a pure and natural product, and contains no colourants, additives, or preservatives - Rooibos has no kilojules - Rooibos is available as a plain or flavoured tea as loose leaves or in tea bags - Rooibos has numerous cosmetic and health applications
  7. 7. 7 - Rooibos is graded according to colour and floavor - Rooibos ages well and can be store for long periods without deterioration in quality, flavor and taste is not a newly found product. Rooibos main purpose will be hat of a tea, howeverutilizing its well documented health benefits will support the pitch of motivating potentialcustomers towards the product and away from traditional competitors like green and camomileteas.The segment of current non users of Rooibos is important and market penetration will be keywhen this segment is made aware of the benefits Rooibos offers. There is a significant potentialfor growth in this segment. - Rooibos is a good source of antioxidants - Rooibos is naturally caffine free - Rooibos has proven cancer fighting properties - Rooibos plays a role in promoting a health heart and in preventing diabetes.The product can be continued to be supplied in different grades as Super, Choice and Standard topackers who are responsible for branding and distribution.Rooibos has opportunities to take advantage of it’s herbal status.3.3. PriceThe price of Rooibos has and will be a contentious issue. The price of Rooibos tea is determinedby the comparative price of instant coffee and medium grade black tea.There however exists huge variance between cost, produce and retail.3.4. Promotion
  8. 8. 8The promotion strategy of Rooibos need not be dissimilar to the strategy used by other teas andherbal products. Many promotional tool can be employed in order to ensure consumers are madeaware of Rooibos. Rooibos is somewhat well established in the local environment and is wellrecognised in Germany, the Netherlands, Japan and the United States.Using the Rooibos brand, known and recognised for its health benefits will draw new consumersto the tea and cosmetic range. Existing consumers will be enticed to the added product range.Rooibos will employ mass media advertising, placing adverts in magazines with healthconscious and lifestyle conscious readership i.e. Womens Health, Mens Health. Television andradio advertising will also be crucial to creating brand awareness.The current website is user friendly and informative. The websitehowever should encourage co-branding of packers and producers.Rooibos distribution is fairly well established. The onus of distribution falls on repackers whomassume the responsibility of promotion. Recommendations are instore promotion and3.5. PeopleAn essential ingredient to any brand success is the people behind the brand. Rooibos is uniquelySouth African and unique in its properties of health benefits. The people representing Rooibosmust align to this uniquness. Consumers and potential consumers to3.6. PlaceRooibos is a uniquely African flavor. South Africa is the only place on earth where Rooibos isgrows naturally. This indegenious treasure to the Western Cape region of South Africa makes itmarketable as such to the international market. To achieve this success in international markets,Rooibos must employ it uniqueness to its product and what makes it more attractive in where itsfrom.3.7. Conclusion
  9. 9. 9Co-branding will compliment Rooibos product value. Rooibos outweights most other equivalentproduct offerings and hence will attact new consumers. The different variations of Rooibos areaimed to appeal to many different consumers. The niche of Rooibos is its history and needs tocommunicated effectively as suggested. This will ensure Rooibos success and grow it’s marketshare.4. Discuss the influence of consumer behaviour on the purchase of Rooibos.4.1. IntroductionThe consumer market buys goods and services for personal consumption. Consumers varytremendously in age, income, education, taste and other factors. Marketers must understand howconsumers transfor marketing and other inputs into the buying responses. Consumer behaviour isinfluenced by the buyers characteristics and the buyers decision process. Buyers charactisticsinclude four major factors: - cultural - social - personal - psychologicalA persons buying behaviour is the result of the complex interplay of all these factors. Many ofthese factors cannot be controlled by marketers, but they are userful in understanding theconsumers that marketers are trying to influence.Studying the influence of consumer behaviour on the purchase of Rooibos will answer; - who will purchase Rooibos - where a consumer will purchase Rooibos
  10. 10. 10 - when a consumer will purchase Rooibos - why a consumer purchases Rooibos - how much a consumer is willing to spend on his/her purchase of RooibosCultural factors play an important role on the influence of consumer behaviour on the purchaseof Rooibos. Culturally as South Africans there is a shift towards buying South African.Campaign. Campaigns like the Proudly South African. There are not many other consumerproducts that are uniquely South African than Rooibos. Rooibos is further benefitted by thetradition of the brew. The knowledge and the perceptions associated with Rooibos make Rooibosculturally acceptable.The health and naturally infused Rooibos makes the socio-cultural factors influencing thepurchase of Rooibos elementary. The family decision making where grpceries are concerned areusually done by the female parent and or spouse. The inherent maternal instinct for wanting thebest for her family makes the purchase decision towards Rooibos an easy one. The buyer ofRooibos is normally the information gatherer, the influencer, the decision maker, user andexpectedly the purchaser as well.Personal factors will play a limited role in the consumer behaviour of Rooibos. The appeal ofRooibos to this factor is all inclusive. Rooibos in all it’s forms, tea, cooldrinks, lotions andcreams, tonics is attractive to all age groups and lifestyles. Market mix factors here in terms ofthe product, affordability, value for money, convience and promotion will dictate Rooibossuccess.Finally and most significantly psychological factors will have the effect on consumer behaviour.Motivation personality and perception with regards to the benefits derived from Rooibos.Rooibos has anti-carcinogenic and anti-mutagenic properties. Consumption of Rooibos tea isknown to relieve fever, asthma, insomnia, colic in infants and skin disorders. Rooibos extractsare used in ointments against eczema. Rooibos is also known to prevent cardiovascular diseases,some cancers and strokes. According to Maslows Hierarchy of Needs the psychological needs ofconsumers are met by Rooibos.
  11. 11. 115. Develop a Segmentation Strategy for Rooibos5.1. IntroductionWe live in a global community. As global citizens, people are becoming increasingly aware ofresources available to them to lead a healthier lifestyle. Rooibos needs to target this growingconsumer market which places emphasis on healthy living. There exists variety and varients ofteas, each with its own unique customer benefits. Tea competes in a competitive and challengingsector. It is recommended focus on finding new matrkets rather than existing markets to increasethe popularity of Rooibos.Market segmentation assists marketers in analyzing the needs of specific customer segments andthe resulting information allows marketing campaigns to be focused on these identified needs.This information will allow Rooibos to focus marketing efforts and will result in efficient,effective and profitable marketing and sales efforts.5.2. The External EnvironmentRooibos marketing environment is complex. This is due to Rooibos being a product of the thirdsworld. Consumers of the first world has acceptance challenges. Rooibos has to compete againstestablished products like green tea, chamomile etc.To compete successfully Rooibos must provide it consumers with greater value and satisfactionthan its competitors. This involves finding out what aspects of satisfaction most matter toconsumers and then positioning itself to meet this satisfaction.
  12. 12. 125.3. The need for SegmentationWithin markets not all customers are the same. Consumers have different tastes and wantdifferent aspects from a product. As a result, particular markets can usually be further dividedinto segments. Each segment consists of people with similar needs and requirements. Rooibosneeds to develop strategies that are closely aimed at satisfying each consumer group.Through segmentation Rooibos can identify market opportunities and meet its marketingobjectives. Segmentation gives Rooibos a better understanding of its customers, the type ofproduct they require and the variation thereof.5.4. Select a market for RooibosThe market for Rooibos is the lifestyle market. Consumes in this market place value healthierliving.The potential need in this market which Rooibos offer - pure natural ingredients and no additives, preservatives or colorants - a caffeine free drink - relief from stomach and indigestive problems - anti-spasmodic properties - safe drink for nursing and pregnant women - management of allergies i.e. hay fever, asthma and eczema - relief from skin irratators - a soothing drink for people on a calorie restricted diet - a product which is high in anti-oxidants - supplemenatary daily requirement for calcium manganses
  13. 13. 13 - a prodct which promotes healthy skin and a health nervous system - a beverage which can be consumed by people suffering wit kidney stones5.5 Basis for segmenting the marketDemographic segmentation for Rooibosis vital for its’ long term sustainability. Demographicsegmentation matches consumer wants and needs of different gropus of consumers. It is on the 5common segmentation strategies and aims to determine specific niches and segments customtailored promotion.Benefit segmentation for Rooibos is absed on differences in specific benefits different groups ofconsumers look for in a product. Similar to demographic segmentation it is aimed to detinespecific niches and requires tailored promotion5.6. Segmentation descriptorsThe benefit of Rooibos has mass appeal, mass segmentation for consumption. However Rooibosneeds to targeted to purchase deciders, age and genders. This leads to segments that arehomogenous within a group but hetrogenous between different segments.5.7. Profile and analyse homogenous segmentsThis will enable Rooibos to determine the segments size, expected growth, purchase frequency,current brand usuafe, brand loyality as well as long term sales and profit potential. Theinformation gathered here can ben used to rank potential market segments by profit opportunity,risk consistency with Rooibos’s mission and objectives. Once profiles the criteria of substantial,identifiable, accessible and responsive must again be considered. The profile generated here willdetermine if the segment is different from other potential segments and how Rooibos willrespond to its market mix. The profile will also indicate if the market segment is profitable topursue.5.7. Identifing the determining dimension
  14. 14. 14A determining dimension is the dimension that will eventually determine the consumers decisionto buy Rooibos or not. A determining dimension is related to Rooibos’s competitive advantage.It is crucial for a determining dimension to be identified for each potential segment. Theuniquness of Rooibos makes this simple for marketers. Rooibos can deliver health benefits andcan compete against other products targeting the same market. Rooibos will have the competitiveadvantage in this segment.5.8 Name and select target marketsThe final step of the segmentation strategy will be to identify the individual segments.Use table 6.4.