Case Study about Numi Tea
*For the Introduction and body
(refers to theNumi Tea text )
Numi Tea founders, siblings Ahmed and Reem Rahim, immigrated to the United States when they were young children and grew up in Cleveland, Ohio. Reem became a biomedical engineer, and Ahmed traveled the world as a photographer, settling for a time in Prague where he opened two teashops. In 1999, the two reconnected in Oakland, California, and started Numi Tea in Reem’s apartment.
In recent years, demand for organic and ethically produced products has exploded. At the same time, economic influences have driven affluent and natural foods consumers to large discounters, grocery chains, warehouse clubs, and online shops. “In the positioning of our brand we wanted to target a certain type of customer base, from natural health food stores to fine dining and hotels, to universities and coffee shops,” says Ahmed, Numi’s CEO. “But what I’ve been most surprised about in our growth is the mass market consumer.”
According to Jennifer Mullin, vice president of marketing for Numi, the average Numi consumer is college educated, female, and buys two to three boxes of tea per month—usually green tea. She also buys organic products whenever possible. Until Mullin joined the team, Numi had assumed its customers fit the same profile as its young staff. Mullin’s findings proved that the company needed to put additional energy toward older customers and moms as well as its target college market.
To reach younger consumers, Numi boosts product awareness on college campuses, where people are more inclined to be interested in issues of sustainability, fair-trade, and organics. The big hurdle there is price. Because Numi teas are a premium product, they have a higher price point than conventionally produced teas. And since college students have limited cash, Numi determined that it could access college customers best by getting university food service departments to serve tea as part of prepaid meal plans. The strategy has been a success. Not only do these food service contracts represent huge accounts for Numi, but they also encourage trial by students. Sampling is Numi’s most successful marketing activity for attracting new users, and now students can drink Numi teas essentially for free.
For many organics consumers, the most compelling reason for drinking Numi tea is its health benefits. But while Numi is organic, the company rarely advertises this aspect of its business. Some analysts feel that if “organic” and “natural” become mere marketing buzzwords, a lack of trust may arise among consumers, as some products will inevitably fail to live up to marketers’ claims. With this in mind, Numi believes it is best to educate consumers about the product. “We have an in-house PR team that works with editors of women’s magazines to educate consumers on tea and make sure they understand the healthy properties of tea,” says Jennifer. The team always follows up by sampling at Whole Foods stores, or at events targeted toward environmentally conscious customers.
While Numi is still fairly new, the company is expanding rapidly in the U.S. and enjoying success overseas as well. Whatever the marketing and PR teams do to promote the tea products—store sampling, environmental events, or partnerships with like-minded companies such as Clif Bar—they always keep an eye on the demographic and psychographic profiles of their consumers.
*For the conclusions (refers to the questions below)
1.How will you describe the target market of Numi Tea? Explain
2.What is the marketing mix used by Numi Tea? Discuss the combination.
3.How is Numi Tea differentiated from its industry?Give details.