Martketing Plan

Antaram, Inc.

Instructor: Knar Khachatryan

Group members:

Garo Kizrian

Sona Veziryan

Marta Mamyan

Sona Hovsepyan

Garik Gevorgyan

FTMBA1

Yerevan 2016
 Executive Summery

After long discussions and deliberations among our group members we decided to
choose Antaram inc. for creating a marketing plan. Antaram was established in 1989, and it
produces medical herbs and herbal teas.
The plan has an aim to analyze Antaram's current position in marketplace and lead
to success in the future. To implement this goal we included different necessary steps in our
plan.
Step 1. The global trends are represented, to illustrate overall situation and trends in this
sphere
Step 2. 5C and 4P analyses are conducted in order to reveal conditions in which the company
acts and what kind of opportunities it offers.
Step 3. SWOT analysis summarizes the factors which we reveal in the process of observation
and helps as to formulate our suggestions.
Step 4. We have done quantitative analyses to find out the amount of money which company
can afford to spend on the implementation of the plan.
Step 5. Problems are summarized, afterwards the suggestions are made.
 Antaram, Inc.

1. Global Trends in medical tea industry

Tea is the most widely consumed beverage in the world. There are more than
thousand different varieties, the most common of which can be classified as white, green,
oolong and black. Scientists keep exploring the health benefits of drinking tea, such as
reduced risk of cancer, increased brain and muscle health. Green teas, which have less degree
of oxidation, are believed to have the greatest health benefits.
Rising consumer awareness about preventing and curing various diseases leads to
increasing demand towards different types of herbal teas among populations in Japan,
Europe, and the US. As a result of this trend, Tea is now found everywhere including
supermarkets and drug stores. Together with herbal tea market, pharmaceutical products
based on herbs are also under development.
The global tea production market value was around USD 15.4 billion in 2013. While
the ordinary black and green tea segments are growing respectively 3.9% and 11% annually,
herbal teas are growing exponentially (more than 15%)1.
Indonesia, India, China, Sri Lanka and Kenya are rated as the worlds largest tea-
producing countries. Among global leaders are Lipton, Tetley, and Twinings. As for herbal
and organic teas, companies that produce and/or sell high-quality products, are as follows:
A family run Little Red Cup tea company located in Germany, which sells loose leaf
teas to keep the taste and health benefits of the leaves.
Mountain Rose Herbs, which is committed to zero waste during the production period.
Arbor Teas, which is a CarbonFund.org member. It encourages ground shipping and
suggests eco-brewing tips to make a cup of tea a bit greener.
Clipper Teas, which is an award-winning UK-based company that sells its teas in
unbleached tea bags, cutting down on waste.
Paromi Tea, which sells whole leaf teas in cornstarch or in glass jars that keep it fresh
and fragrant2.

1
http://www.prnewswire.com/news-releases/tea-the-future-is-green-and-herbal---global-markets-
competitors-and-opportunities---2013-2018-analysis-and-forecasts-240079191.html
2. Local Market analysis (5Cs, 4Ps)

More than 3200 herbs grow in Armenia, among which 1500 can be used for the
medical purpose (e.g. haw, rosehip and mint). There are also herbs that grow exclusively in
Armenia.
Even though these herbs have been traditionally used in Armenian medicine, but
nowadays most part of buyers prefers imported black and green teas. On the other hand,
Chinese, Indian, Syrian, Russian markets show interest in Armenian herbal teas.
The main reason why Armenian tea has less consumption in a local market is because
of the higher price compared with imported ones. This can be explained by the effect of 20%
VAT on small producers, special paper used for packaging in order to keep the scent and
other the special conditions for providing a high-quality product3.
Below is introduced a marketing plan for one of Armenian herbal tea companies- Antaram,
Inc. with its features, drawbacks and possible suggestions for future.

Five Cs
Company
Antaram was established in 1989, and it produces medical herbs and herbal teas.
(Antaram [an-tha-ram]) is translated from Armenian as Yellow Chaste Weed
or Everlasting (Lat. Helichrysum). Antaram is a unique handmade herbal tea organization,
where all processes are supervised by pharmacists. Numerous Armenian rural families are
involved in a production. During years they have created a wide range of herbal teas, which
are made from collected 50 wild and seven cultivated species of herbs. The herbs are
presented separately and in various herbal bouquets. Their slogan is Enjoy and be healthy.

Customers
Antaram considers all Armenian population above 5 years old as its potential
customers 2.6 million people4. The company produces more than 100 types of herbs, but its

2
http://www.treehugger.com/green-food/8-companies-sell-high-quality-fair-trade-and-organic-teas.html
3
https://hetq.am/arm/print/31812/
4
http://armstat.am/file/doc/99478228.pdf
most popular and bestseller products are Niharik and Thyme. People who consume
Niharik are basically women from young to middle age. As people may use Thyme on
many occasions such as flu, pain in throat, digestion problem and etc, its users are people
who think that health issues are better be solved with traditional methods by using herbs.
The motivation behind purchase is that it is really not expensive and it gives really good
results. Once people use it, it is highly probable that they will recommend it to others.
Consumers buy Niharik mostly from Yerevan City supermarkets, while Thyme and other
herbs are bought from pharmacies. Customers get information about these teas from
Facebook or from their friends and colleagues. They buy Niharik when they see a problem
of losing weight, so they find Niharik helpful to fix this issue, and they buy herbs like
Thyme to drink just like regular tea or when they have some health issues that can be fixed
by these herbs. According to instructions, consumers need to buy Niharik about 3 pockets
per month. Women actually start thinking about losing weight before summer in spring, and
the sales of Niharik usually increase during spring time and during summer.
Antaram is a functional brand, not symbolic. It is targeted to satisfy specific needs of
customers. People buy its product to set basic needs. Sales are highly concentrated in
Yerevan and in other big cities in the county. The overseas consumers are potential for
Antaram when it decides to export its goods. People who buy Antarams product basically
have some knowledge about herbs usefulness for health.

Competitors
Armenian market of tea, within which Antaram operates, consists of both producers
and importers. In Armenia, tea production volume on average equals to 190 tons (2.6mln *
66g5) per year and the import of tea into the country is approximately 385 tons. Within the
tea market, total number of competitors is 41 and the quantity of importers is unavailable
due to lack of data. Some of the well-known and direct competitors are:

5
http://faostat3.fao.org/search/tea/E
Producer Importer

Ancient Herbals VAS Group LLC (imports Genex,

Ar Phyto Pharm Co., Ltd Shere)
Bison 1 Co., Ltd Sovrano LLC (Dilmah)
Lychee Tea Co., Ltd Arova LLC (Riston)
Manana brand under Bio Universal Chaicoff (Roscafe, Tchibo)
LLC Esting LLC (Ahmad Tea)
Mountain Tea brand under ABDA
LLC
ASFPC LLC
King brand under Armen-Hamik
Brothers LLC
Ghazaros
Mega Ararat CJSC

Collaborators
Antaram is collaborating with distributors and suppliers. It is not engaged in
alliances, as the previous experience has shown that being in alliances in this industry is
costly and not effective. Among the distributors are Alpha Pharm, Natali Pharm, Asteria,
Esculap pharmaceutical company, Yerevan City, Levon and Lamara pharmacy and many
other small ones. Antaram is supplied by the rural plant growers and collectors. It also
collaborates with World Vision in terms of a project, where they teach villagers how to
collect quality plants.

Context
Political environment for Antaram Company can be described as a positive. Armenian
government promotes production industry and has trading agreement with EEU which is an
opportunity for Antaram to export its products to EEU countries.
 Moreover, agriculture in Armenia has pronounced as a VAT free sector and also it is
free from different fees like notarial and cadastral expenses. It is estimated that due to this
policy agricultural businesses can save over 8000 drams from each hectare 6. Consequently,
Antaram also benefits, because most of its production costs are from herbs collected from
agricultures.
The government also has a special support program for small and medium sized
business which implements by governmental organization SME DNC. The scope of their
activities is consultation, financial support, trainings, etc7.
The economic environment for Antaram is constant despite overall GDP instability. The
agricultural sphere in Armenia is the only one which has had constant 7 to 11% GDP
increase after international crisis8. This is good for Antaram, because its suppliers suffer less
than other spheres. Besides, as CEO of Antaram insists there is a trend to buy medical herbs
as a substitute of different medications because of financial difficulties: medications have
incomparable high prices.
From different international reports we can see that Armenians have increased tea
consumption from 0.57 to 0.66 grams in 4 years period (2011-2015)9. This can be explained
by changed social attitude to healthy food and overall healthy lifestyle. In past years there is
a huge amount of healthy lifestyle propaganda in Armenia through media, NGOs, etc. And
also as we mentioned above not good social, financial conditions also stimulate to change
medical herbs to medications.
Nowdays technological advancement affords Antaram to use its industrial waste (tea
dust) in capsule tea production, which also can attract donors from international
environmental organizations.
Antaram acts in a common legal environment for cooperatives and also as it produces
medical herbs it needs license from special governmental body which acts within ministry of
healthcare of RA10.

6
http://report.gov.am/
7
http://smednc.am/
8
http://armstat.am/
9
http://faostat3.fao.org/
10
http://moh.am/
Four Ps
Product
Antaram's tea line of product includes over a hundred different varieties of teas with
varying flavors and health benefits. This wide range allows the company to offer customers
specific teas for specific situations.
The company believes that their consumers have a good idea about their situations or
diseases and they can know which products are good for them through the information and
the indications mentioned on each box with its ingredients, this ensures their consumers
which products are the best for their conditions and meet their expectations.
The products have a traditional, bright and simple design with the actual picture of
the herbs that have been used to prepare each product. Some types of teas contain seven tea
bags and others thirty. Each tea bag should be steep in 500ml of poor boiled water, which
can be used for more than once.
Antaram has been successful in creating an image that their products are unique by its
quality. It ensures constant and continuous innovation in the product, and it keeps on
coming up with newer and more improved medical benefits.

Price
For every company one of the most important marketing and overall business
decisions is pricing. Companies can have different pricing objectives, and it is important to
identify a precise objective to find the most optimal price. We would like to demonstrate
Antarams competitive cooperation regarding price and quality in order to clarify its pricing
objective and strategy.
 We can see from the matrix that Antaram has a higher price and higher quality compared
with its straight competitors. For the similar products, Antaram's price is 1200 AMD,
Makaryans price is 990 AMD, Ar Phito Pharm's is 860, and Gevorgyan's is 560 AMD. From
our observations we can conclude that Antaram has two main pricing objectives. First one is
the maximization of a unit profit margin, because the company anticipates that the sales
volume will be lower. And the second pricing objective is quality leadership, which is as
follows: they use high price to signal about quality.
And the strategy of pricing has characteristics from "competition pricing" as the company
tends to price their product 10-15% higher than competitors and "premium" pricing as their
quality is also higher, but it is not pure "premium", because the products are not luxury.
The company has 20% to 30% profit margin in the price of products and its major costs
are herbs buying expense, wage expense, packaging, taxies and distribution.

Place
Antaram is distributed mainly in Yerevan with a population of approximately 1.2
million people, and in several cities of Armenia in smaller amounts. Its teas are sold mainly
in Yerevan City supermarket chains, in Halep markets and in pharmacies like Alpha Pharm,
Natalie Pharm, Levon & Lamara, Arpharmacia and Asteria. In case of absence of a product
the customer can always order one from Antarams warehouse. Although the product is
remedial and its main vendors are pharmacies, but it also has demand as a tea sold in
markets, which means that only Yerevan City supermarket chains are not enough to spread
awareness among potential customers.
Besides, Antaram also represents its product line during different international and
local professional expos. For example, recently it participated in Lady EXPO 2016 (26-28
November) organized by Logos Expo Center.

Promotion
Antaram promotes its products through its web-page, Facebook account, Facebook
ads and through occasional expos. Their product is well promoted by their social capital, as
Antaram is operating since 1989 and has gained loyal customers.
 From promotional channels we would prefer online ones as Antarams promotional
budget is not large and internet advertisement is the cheapest.
There is some degree of seasonality in drinking herbal teas, for instance after the New
Year the overall sales decrease and only the sale portion of the detox and anti-allergic teas
increase. Another pattern of seasonality is the fact that when the apricots ripen the sales go
down because with the consumption of fruits or almost all illnesses moderate. That is why
we suggest doing promotions exactly at that time.
The overall portion of promotions in the market is low. The producers think that in
case of active promotional campaigns the competitors will also implement this strategy.

SWOT analysis for Antaram

Strengths Weaknesses

1. Professional staff and specialized pharmacist- 1. Weak financial position

doctors 2. Weak distribution chain
2. High quality of products 3. Not good brand name and logo
3. Developed supply chain 4. Unattractive and inconvenient
4. Strong ongoing relationship with international packaging
social-oriented organizations, like World Vision 5. Poor promotion

Opportunities Threats

1. Gaining new market shares: 1. New entries

Armenian marzes (regions) and 2. Illegal competition possibility from
external market of Georgia and big pharmacy distribution chains
Iran 3. Probable tax law changes related
2. Attracting donors as an eco friendly and socially to agricultural sphere
important company
3. More availability of newer technologies that help
optimize production process
 Quantitative Analysis
Facts about the awareness of Antaram
To find out the level of awareness of Antaram we conducted an online survey. 200
people answered the questions if they are familiar with Antaram, have they ever tried it. It
turned out that only 20% knows Antaram, which is bad for a company that exists so many
years and only 5% of respondents has ever tried it.
Likelihood of recommending
To disclose consumers attitude towards Antaram's product we conducted another
survey within a consumer sample of 48 people. We tried to collect objective data, so the
people were chosen randomly. Samples more than 30 behave under central limit theorem
and can provide an approximate information about research. After data collection we
calculated Net promotion score, which is illustrated below:
Not at all likely (Detractors) - 25% = 12
Passives - 8, 33% = 4
Promoters - 66, 6% = 32
Net promotion score = Promoters (%) - Detractors (%) = 66,6% - 25% = 41.6%
Usually, when this score is higher than 50%, it is considered as excellent, but we can
see that in our case it is lower. 41, 6% is a good value, but it is apparent that the company has
work to do with this. Due to Fred Reichheld's loyalty theorem 5% increase in NPS will
cause an increase of profit from 25% to 95%. It is obvious that this can be an opportunity for
Antaram.
We also asked detractors and promoters their opinion and cause of their attitude.
Most of detractors were unsatisfied with quality of teas with pockets. And Promoters were
mostly satisfied with medical effect of teas.

CLV: To anticipate how much money the company can spend on marketing purposes, we
decided to calculate customer lifetime value for Antaram's average product.
CLV = GG x
d= 6,5 - Information from RA central bank
 GG = 550*20%*10 = 1100 where 550 is the average price for product, 20% is the profit
margin, 10 is the average quantity of used boxes of tea.
To calculate retention rate, we can fairly assume that it is highly probable that
promoters and passive ones will return to buy Antaram's product but detractors will not.
So r = 36/48*100= 75% = 0.75.
Now we can calculate CLV which is:
CLV= 1100x = 2620 AMD
We can conclude that the company can spend on acquisition of one customer not
more than 2620 drams.

3. Main Problems and Suggestions

After familiarizing ourselves with the packaging, marketing, website, logo and slogan
of the company, we understood where the problems lay that prevents larger success of
Antaram. Below are a few of the issues we found.
Logo: The company logo is a red cross, which is not located in a uniform location on
the tea boxes; some are on the bottom of the box, while some might appear on the
front or side. This prevents customers from recognizing the different teas offered by
Antaram. The logo is simple and not impressive, nor is it associated with the company
or the purpose of its teas.
We have prepared a new logo for the company, which tells more about the type of activity
that Antaram does.
1- To create a perception among the customers that it is a hot tea product.
2-Instead of the using the Armenian flag colors, which is at the close to the Colombian,
Venezuelan, Mauritius, Ecuador flags colors. So we decided to put the symbol of Armenia
which is the Ararat Mountain.
3-We decided to keep the cross, which indicates that the product has medical effect by
locating it in the cup.
4-We decided to add the date of establishment to create an image of trustworthiness in the
customers.
5-we decided to locate the Antaram leaves behind two letters.

Packaging problems: The overall appearance of the packaging is not eye catching.
There is no tasteful design on the box, which can draw customers attention toward
this specific product. The tea bags themselves are not easy to use; they need to be
steeped several times in a tea kettle or tea cup, however, they do not have a string
attached that will make it easy to access from hot water. Each tea, depending on its
benefit, requires different number of tea bags to be used in order to see the full result.
For example, the weight loss one recommends to drink 20 days before any results will
be apparent, however, the box itself contains only 8. This would require the customer
to purchase a total of 3 boxes to complete the course. The number of tea bags in the
box is not enough for proper use. There has been a lot of research conducted on tea
bags made out of paper; although it might be financially beneficial to use paper, with
its natural moisture removing tendencies, it is drying the tea leaves from many of
their benefits.
 We decided to locate the logo in the front of the box, at the left-upper corner which
should be located for all products constantly.
As we read about the steps of preparation of the tea we saw that they lost a lot of the
product as a dust while the granulation process which we think that this dust (waste)
can be beneficial for the company if they use them in the preparation of the capsules.

Mission, vision and core values: Operating within this long 28 years Antaram has
not formulated clear mission, vision and core values. All these are important for
communicating with the customers clearly and concisely, so the customers knew
what to expect from the company. The mission we suggest is: Our mission is to
provide genuine organic herbal teas and medical herbs by creating healthy lifestyle
 solutions for everyday life challenges. We suggest Antaram to use this vision: With
all of our company initiatives we strive to spread the culture of medical tea drinking
and create more health concerned society. And the core values are: Product safety,
quality, scientific approach, excellence, love for Mother Nature, satisfied customers
and employees.
Lack of accessibility: Antaram is distributed mainly in Yerevan and in several cities of
Armenia in much smaller amounts. Its teas are sold in Yerevan City supermarket
chains, in Haleb markets and in pharmacies like Alpha Pharm and Natalie Pharm. In
case of absence of a product the customer can always order one from Antarams
warehouse. Although the product is remedial and its main vendors are pharmacies,
but it also has demand as a tea sold in markets, which means that only Yerevan City
and Haleb are not enough to spread awareness among potential customers.
Another problem for accessibility is the bargaining power of distributors (like the
abovementioned pharmacies) who also import substitutes. They will refuse to resell
Antarams products if it starts to actively advertise itself and become a big competitor.
1. This is why we offer Antaram to diversify its distribution chain and collaborate
with online shopping companies like buy.am, which will post their product line in
its menu and distribute their products within Armenia.
2. Besides, in order to be available for customers from abroad, Antaram can offer
online sales for international shipment via post (1kg=17 box * 60 gram) for 2100
AMD via surface transfer or 3600 AMD via airplane.
3. A more long-term strategy is exporting Antarams products to the neighboring
countries- Georgia and Iran, which are considered to consume huge amount of tea
(1.07kg and 95g in comparison with Armenia 66g).
Awareness and Advertising: Even though the company offers more than 120 different
varieties of tea, only a few more famous types like the detox tea Niharik are
advertised and offered in the market. Antaram promotes its products through its web-
page, Facebook page and through infrequent local professional expos. This is
connected with a short budget, which constricts the full success of the company.
1. Therefore, we suggest having advertising via radio and newspapers, which are both
cheap and accessible to broader range of people, especially older people.
2. Furthermore, in order to attract more tea lovers and turn them into loyal customers,
we suggest Antaram to prepare an informative online quiz on their webpage (e.g. to
discover the persons plant personality). After answering several interactive questions,
test results will show which type of tea is the best for the specific person and give
more information about the health benefits of that tea (for viewing a sample quiz,
please follow the link http://www.traditionalmedicinals.com/plant-personality-quiz/).
Nowadays technological advancement affords Antaram to use its industrial waste (tea
dust) in capsule tea production, which also can attract donors from international
environmental organizations.
ACBA Credit Agricole Bank organizes annual competition among entrepreneurs,
which is called Organic Production Certification. After this, together with NABU
(Nature and Biodiversity Conservation Union, Germany) they certify the companies
that meet their standards.
As we have discussed previously Antaram has serious problems with its financial
position which restricts to produce more and expand its market share. The company
is also needs to develop intensively, which is to obtain new, more productive
technology, but needed money is unavailable (for example 80.000$ to buy machinery,
which will improve pockets quality). To solve this problem we offer to collaborate
with organizations which will be presented below. We are sure that these
organizations can be really helpful for Antaram.
References

http://ecopreneurist.com/
http://greenlane.am/home/
http://recp.am/
http://www.ebrd.com/work-with-us/advice-for-small-businesses/armenia-overview.html