1. The document discusses conducting a STEP analysis for Rooibos tea. It provides background on the origins and history of Rooibos tea production in South Africa. 2. An analysis of the social, technological, economic and political factors affecting Rooibos is presented. Growth opportunities for Rooibos in food, cosmetics and pharmaceutical sectors are also discussed. 3. Recommendations are provided for Rooibos to develop its market mix, focusing on product, price, promotion, people and place. Developing co-branding partnerships and leveraging Rooibos' health benefits are emphasized. 4. The influence of consumer behavior on Rooibos

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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.
Primitive methods were employed to harvest and process the plant to produce the tea. Production
today 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 Board
was initiated by the Minister of Agriculture to regulate marketing, stabilize pricing and more
importantly standardize quality.
2. Analysis
2.1. Social Factors affecting Rooibos
Boyd et al. (1990) suggests values, attributes and general behaviour of individuals in a given
society represents the environment.
A desire for a natural lifestyle has resulted in an increasing utilization of complementary and
alternative health remedies. Modern pharmaceuticals are being based on natural herbs and are
being used successfully to treat medical aliments.
The unique properties of Rooibos addresses some of the issues in the global shift to healthier
living. Rooibos is a good source of antioxidants, is the only know source of the antioxidant
aspalathin . 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

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Rooibos in promoting healthier hearts and preventing diabetes. Rooibos is naturally caffeine free
which makes is suitable for children, infants and breastfeeding mothers.
Continued impetus into research on Rooibos especially by the South African government is
required. This will lead to greater understanding of Rooibos for the great good of society.
2.2 Technological Factors affecting Rooibos
Adopting technology should be a standard practice for marketing Rooibos. Technology
introduces stronger, more effective and faster production methods.
Boyd et al (1990) state technological developments has an influence on all marketing
undertakings. Boyd et al (1990) further suggests these marketing undertakings includes
communications by utilizing new media or selling tools, distribution by opening new channels or
modifying operations and monitoring performance of existing outlets as well as looking at
packaging by allowing the use of new materials and designs.
Merging Rooibos, a traditional product with technology is essential to the sustainability of
Rooibos. Technology is an important macro-environmental variable. Adopting technology for
convenience i.e. development of packaging, quicker and easier preparation, palatable taste and
increasing shelf-life, will contribute to consumer benefit and drive sales.
The health benefits of Rooibos is well documented, increasing social media consciousness
through online campaigns i.e. facebook and twitter and dedicated blogs to augment the benefits
to the world market.
2.3 Economic Factors affecting Rooibos
Economic factors are of significant apprehension for Rooibos. Both local and international
economic factors are likely to impact demand, costs, prices and profit. Rooibos is a uniquely
South African product and thus has direct influence on the South African economy. The current
South African rand @ R6.86 (07/10/2010 - http://www.exchangerates.org.uk/Dollars-to-South-
African-Rands-currency-conversion-page.html) negatively affects export revenue. Down the line
this affects demand and production.

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The 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 fully
understand 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 rates
and 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 during
this period focus on developing a robust market mix for the local market is vital.
2.4 Political Factors affecting Rooibos
Rooibos has been fortunate to be operating in the global environment. Rooibos is exported to
first world countries like United States, Germany and Japan. Rooibos future lies in the political
and legislative conditions of these countries.
According to Boyd et al (1990) legislation defines the regulatory environment within which
Rooibos operates. Boyd et al (1990) suggests the political environment presents not only
strategic threats to the business but opportunities as well. Deregulation could possibly open new
markets.
Du Plessis et al (2005) state that in South Africa this environment has become significant to
business. Recent laws promulgated has direct impact on Rooibos examples are Broad Based
Black Economic Empowerment and Female Empowerment. Du Plessis et al. (2005) suggests the
tasks 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 as
being favorable to both employer and employee. The South African government needs to
encourage competition, fair labor practices, taxation which is favorable to producers as well as
supporting previously disadvantaged producers.

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2. Discuss growth opportunities that Rooibos may pursue.
Micheal Porter states that vertical intergration is the combination of technologically distinct
production, distribution, selling and or other economic process and as such it represents a
decision which Rooibos to use internally or administratively rather than market transactions to
attain its economic goals. (Porter 1980)
The emergence of new segments, health benefical foods and cosmetics with pharmaceutical
benefits, the market for Rooibos has improved substantially over the past decade. This inevitably
has opened new opportunities for producers, enabling producers to position Rooibos amongst
other natural ingredients. An example, Rooibos is a good source of antioxidants and is the only
known source of a potent antioxidant aspalatin which could play a role in combating several
lifestyle diseases.
Vertical intergration for Rooibos can reduce the uncertainty of supply and demand and as
pointed out by Porter 1990, hedge Rooibos against price flucuations and attract vertical markets
like the food and cosmetic sectors. It is well documented that significant potential lies in the
foods and cosmetic sectors, this as companies capitalize on the current global consumer appetite
for natural herbal alternatives. The growth and development of the food and cosmetic sectors
improve the Rooibos markets.
In the pharmaceutical sector the shift to herbal alternatives from synthetic medication is
increasing globally. This interest is evident in complimentary alternative medical practices and
traditional medicinal practices. Re-energized and commercially viable practices like traditional
Chinese medication and Indian Ayurvedic treatments are opportunities for Rooibos.
A comprehensive review of Rooibos research was published by the American Botanical Council
in 2003. The research summarises the scientific evidence that Rooibos is a source of Flavonoid
antioxidants and protects against cancer, heart disease and stroke. Extensive anecdotal evidence
suggests that Rooibos has other beneficial effects not yet fully verified or understood. There are
claims 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

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of the anti-allergic and immune boosting effects of Rooibos. There is also a huge future potential
to 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 to
coffee shops daily. Well established coffee shops locally offer Rooibos on their menu. Growth in
this market will be organic. International coffee shops are where opportunities for growth for
Rooibos exist. Starbucks is a US based coffee shop brand. Starbucks has over 10000 coffee
shops 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 brand
associated with Starbucks. Similarily to Starbucks, Tazo Tea uses “new age” marketing to
market its teas’ to consumers.
Tazo Teas’ includes, Chai Tea, Green Tea and Earl Grey amongst 20 or so others and includes a
Vanilla 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 on
the South African plain. From there things get considerably more exciting, uniting with the
tartness of apples and the sweet notes of peach and Tahitian Vanilla, the creamy Rooibos
becomes a cup of tea as indulgent and grand as its beginnings are humble. We should be so
lucky.”
In the marketing description given above Tazo does not leverage the benefits of Rooibos. The
opportunity for Tazo Tea as a Starbucks house brand exist to market Rooibos as an individual tea
as it does Chai Tea, Green Tea and Earl Grey. Selling approximately 4 million cups daily
positioning Rooibos as a healthier option, opportunities for growth exist here as well as with
other well establish coffee shop brands like Seattle Coffee.
INCLUDES COSEMTISC

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3. Make recommendations to Rooibos on developing its Market Mix
3.1. Introduction
For Rooibos to achieve its marketing goals, Rooibos must employ a strategy which includes all
the elements of the marketing. One of the elements of marketing is the marketing mix. The
marketing mix refers to the combination of instruments which will be used in the sales of
Rooibos. The marketing mix concentrates on combining the elements of marketing in a specific
way that will culiminate in continued increasing sales.
3.2. Product
Rooibos 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

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- 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
www.sarooibos.co.za
Rooibos is not a newly found product. Rooibos main purpose will be hat of a tea, however
utilizing its well documented health benefits will support the pitch of motivating potential
customers towards the product and away from traditional competitors like green and camomile
teas.
The segment of current non users of Rooibos is important and market penetration will be key
when this segment is made aware of the benefits Rooibos offers. There is a significant potential
for 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 to
packers who are responsible for branding and distribution.
Rooibos has opportunities to take advantage of it’s herbal status.
3.3. Price
The price of Rooibos has and will be a contentious issue. The price of Rooibos tea is determined
by the comparative price of instant coffee and medium grade black tea.
There however exists huge variance between cost, produce and retail.
3.4. Promotion

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The promotion strategy of Rooibos need not be dissimilar to the strategy used by other teas and
herbal products. Many promotional tool can be employed in order to ensure consumers are made
aware of Rooibos. Rooibos is somewhat well established in the local environment and is well
recognised in Germany, the Netherlands, Japan and the United States.
Using the Rooibos brand, known and recognised for its health benefits will draw new consumers
to 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 health
conscious and lifestyle conscious readership i.e. Womens Health, Mens Health. Television and
radio advertising will also be crucial to creating brand awareness.
The current www.SARooibos.co.za website is user friendly and informative. The website
however should encourage co-branding of packers and producers.
Rooibos distribution is fairly well established. The onus of distribution falls on repackers whom
assume the responsibility of promotion. Recommendations are instore promotion and
3.5. People
An essential ingredient to any brand success is the people behind the brand. Rooibos is uniquely
South African and unique in its properties of health benefits. The people representing Rooibos
must align to this uniquness. Consumers and potential consumers to
3.6. Place
Rooibos is a uniquely African flavor. South Africa is the only place on earth where Rooibos is
grows naturally. This indegenious treasure to the Western Cape region of South Africa makes it
marketable 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 its
from.
3.7. Conclusion

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Co-branding will compliment Rooibos product value. Rooibos outweights most other equivalent
product offerings and hence will attact new consumers. The different variations of Rooibos are
aimed to appeal to many different consumers. The niche of Rooibos is its history and needs to
communicated effectively as suggested. This will ensure Rooibos success and grow it’s market
share.
4. Discuss the influence of consumer behaviour on the purchase of Rooibos.
4.1. Introduction
The consumer market buys goods and services for personal consumption. Consumers vary
tremendously in age, income, education, taste and other factors. Marketers must understand how
consumers transfor marketing and other inputs into the buying responses. Consumer behaviour is
influenced by the buyers characteristics and the buyers decision process. Buyers charactistics
include four major factors:
- cultural
- social
- personal
- psychological
A persons buying behaviour is the result of the complex interplay of all these factors. Many of
these factors cannot be controlled by marketers, but they are userful in understanding the
consumers 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

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- when a consumer will purchase Rooibos
- why a consumer purchases Rooibos
- how much a consumer is willing to spend on his/her purchase of Rooibos
Cultural factors play an important role on the influence of consumer behaviour on the purchase
of 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 consumer
products that are uniquely South African than Rooibos. Rooibos is further benefitted by the
tradition of the brew. The knowledge and the perceptions associated with Rooibos make Rooibos
culturally acceptable.
The health and naturally infused Rooibos makes the socio-cultural factors influencing the
purchase of Rooibos elementary. The family decision making where grpceries are concerned are
usually done by the female parent and or spouse. The inherent maternal instinct for wanting the
best for her family makes the purchase decision towards Rooibos an easy one. The buyer of
Rooibos is normally the information gatherer, the influencer, the decision maker, user and
expectedly the purchaser as well.
Personal factors will play a limited role in the consumer behaviour of Rooibos. The appeal of
Rooibos to this factor is all inclusive. Rooibos in all it’s forms, tea, cooldrinks, lotions and
creams, tonics is attractive to all age groups and lifestyles. Market mix factors here in terms of
the product, affordability, value for money, convience and promotion will dictate Rooibos
success.
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 is
known to relieve fever, asthma, insomnia, colic in infants and skin disorders. Rooibos extracts
are 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 of
consumers are met by Rooibos.

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5. Develop a Segmentation Strategy for Rooibos
5.1. Introduction
We live in a global community. As global citizens, people are becoming increasingly aware of
resources available to them to lead a healthier lifestyle. Rooibos needs to target this growing
consumer market which places emphasis on healthy living. There exists variety and varients of
teas, each with its own unique customer benefits. Tea competes in a competitive and challenging
sector. It is recommended focus on finding new matrkets rather than existing markets to increase
the popularity of Rooibos.
Market segmentation assists marketers in analyzing the needs of specific customer segments and
the 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 Environment
Rooibos marketing environment is complex. This is due to Rooibos being a product of the thirds
world. Consumers of the first world has acceptance challenges. Rooibos has to compete against
established products like green tea, chamomile etc.
To compete successfully Rooibos must provide it consumers with greater value and satisfaction
than its competitors. This involves finding out what aspects of satisfaction most matter to
consumers and then positioning itself to meet this satisfaction.

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5.3. The need for Segmentation
Within markets not all customers are the same. Consumers have different tastes and want
different aspects from a product. As a result, particular markets can usually be further divided
into segments. Each segment consists of people with similar needs and requirements. Rooibos
needs to develop strategies that are closely aimed at satisfying each consumer group.
Through segmentation Rooibos can identify market opportunities and meet its marketing
objectives. Segmentation gives Rooibos a better understanding of its customers, the type of
product they require and the variation thereof.
5.4. Select a market for Rooibos
The market for Rooibos is the lifestyle market. Consumes in this market place value healthier
living.
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

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- a prodct which promotes healthy skin and a health nervous system
- a beverage which can be consumed by people suffering wit kidney stones
5.5 Basis for segmenting the market
Demographic segmentation for Rooibosis vital for its’ long term sustainability. Demographic
segmentation matches consumer wants and needs of different gropus of consumers. It is on the 5
common segmentation strategies and aims to determine specific niches and segments custom
tailored promotion.
Benefit segmentation for Rooibos is absed on differences in specific benefits different groups of
consumers look for in a product. Similar to demographic segmentation it is aimed to detine
specific niches and requires tailored promotion
5.6. Segmentation descriptors
The benefit of Rooibos has mass appeal, mass segmentation for consumption. However Rooibos
needs to targeted to purchase deciders, age and genders. This leads to segments that are
homogenous within a group but hetrogenous between different segments.
5.7. Profile and analyse homogenous segments
This 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. The
information 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 will
determine if the segment is different from other potential segments and how Rooibos will
respond to its market mix. The profile will also indicate if the market segment is profitable to
pursue.
5.7. Identifing the determining dimension

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A determining dimension is the dimension that will eventually determine the consumers decision
to 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. The
uniquness of Rooibos makes this simple for marketers. Rooibos can deliver health benefits and
can compete against other products targeting the same market. Rooibos will have the competitive
advantage in this segment.
5.8 Name and select target markets
The final step of the segmentation strategy will be to identify the individual segments.
Use table 6.4.