Presentation Pathway to our Insights Traditions

Presentation

Pathway to our Insights

Traditions of tea Mass market 60 RUR 40 RUR Contemporary tea Economic Up-market Price (Package 25*2 g) 90 RUR

Price Up-market (Package 25*2 g) 90 RUR “Massteige” segment Traditions of tea Mass market Economic 40 RUR Contemporary tea 60 RUR

Price Up-market (Package 25*2 g) 90 RUR “Massteige” segment Traditions of tea Mass market Economic 40 RUR Contemporary tea 60 RUR § Small market share § No strong support § Limited number of customers

Greenfield is the leader in related context requests, while such brands as Riston, Tess & Ahmad are rarely search for by consumers in Moscow & Saint-Petersburg Context requests 5000 4000 3000 2000 Ahmad Greenfield Lipton Aug Jul Jun May Apr Mar Feb Jan 2011 Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan 2010 Nov Oct 0 Dec 1000 Sep 2009 Number of requests 6000

Competitors’ positioning KB: Quality Lipton “Tea can do that” KB: high quality RTB: more than 100 years of experience Ahmad “Tea is our life” KB: outstanding quality RTB: heritage, true English tea KB: Atmosphere Greenfield “Doesn’t change the world. It changes your mood” KB: perfect tea Tess “Watch how tasty! Taste how beautiful!” Dilmah “from the tea bush to the consumer – through one hand” KB: professionals in tea RTB: Ceylon company Twinings “Taste of England since 1706” KB: outstanding quality RTB: the oldest company, true English tea KB: new experience RTB: bright and interesting flavors Maitre “History of love” KB: Sophisticated approach

Major trends Market trends Almost 100% penetration of tea in Russia Market growth is volume number is slow Rising prices stimulate market growth in value Consumption of tea in Russia Do NOT drink Premiumization of market is witnessed in food and beverages category Consumption trends New flavors are becoming more popular Black tea share is steadily declining Tea bags are the most popular format Customers are seeking innovations Do drink tea (>99%)

Consumer portrait development Trends towards a healthy lifestyle Growth in per capita incomes Consumers search for convenient format Russia is very diverse: § Socio-culture is varied § Identity is contradictory

Consumption frequency/occasion How often do you drink tea? 80% 60% 40% 20% 0% < 1 time per day Every day male 2 -3 times per day More female Who do you usually drink tea with? 80% 60% 40% 20% 0% Alone Family male Friends Colleagues Different female • According to our research (base: 109 respondents (60% female, 40% male))

Consumption occasionsmotives Simultaneously with other actions 14% 22% Communication 8% Mood Tradition 3% Health 3% 7% Cheerfulness 3% Coffee substitute 28% Food/ drink 13% Always 0% 20% * According to our research (base: 109 respondents (60% female, 40% male)) 40%

Drinking tea is becoming more "symbolic“: while enjoying their tea, Health benefits most tend to dream, immersed in the sweet memories or simply relax from Package everyday life, both in the company of relatives and friends or alone. Source: 2005 , “May” Tea Recommendations company Variety Smell Brand Priсe Аn average Russian person drinks Taste around 550 cups of tea per year (compared to 160 for coffee) 0% Source: Analytic department RIA 20% 40% 60% 80% 100% «Ros. Business. Consulting» female

Tea brand selection criteria 10% 9% Health benefits 13% Package 8% 9% Recommendations 5% 2% Variety 52% 51% Smell 11% Brand 22% 24% 29% Priсe 71% Taste 87% 0% 50% female 109 respondents 100% male

Consumer portrait They are 20 -45, always on the go, doing several things at the same time. Despite the lack of time they pay great attention to the quality of products they consume, always trying to choose a healthy option. For them a tea bag is an essential part of modern lifestyle, an enhancement and not a compromise between quality and convenience

they are part of a rushing city…

…knowing the value of a true moment …a moment to break from the city bustle and work These are the moments that together form the other part of her life, where there is no place for worries and stress concerning work. Here she can enjoy herself, share her plans and emotions with her family and friends escape from the daily routine.

Her(his) moments…

Daily consumption occasions… Tea/coffee (take away) on the way to work/university Breakfast 7 minutes 20 sec Dinner/meeting with friends Work hours Morning cup of coffee/tea at work (university) 7 minutes 20 sec Lunch(at work /university/in a café) 12 minutes 49 sec Evening cup of tea at home 19 minutes Source: http: //4 vegan. ru/2011/07/foodtime/

Wissotzky tea Key Benefits High quality of Wissotzky tea, lack of artificial color additives and flavorings Natural claims Russian tea tradition is widely acknowledged abroad Russian origin Large variety of herbal and green teas, well known to benefit ones health Health Russian consumers tend to trust wellknow brands, which have been on the market for a long time. Since 1849

Consumer portrait development RTB: Russian origin

Consumer portrait development Russia is very diverse: § Socio-culture is varied § Identity is contradictory RTB: Russian origin ?

SWOT analysis Opportunities Threats Weaknesses Score Search for convenience Russian origin Strengths Rising income +3 0 0 High quality +3 +3 Interesting tastes +3 No one knows Brand name Tea from Israel Healthy 100% lifestyle penetration Score Brand loyalty Established competitors +2 +2 +2 +9 +3 +2 +2 +2 +15 +3 0 +2 +2 +2 +12 -2 0 0 -3 -3 -3 -11 0 0 -3 -3 -6 +1 0 -3 -3 -4 +8 +6 +4 +3 -3 -3 +15

SWOT analysis Opportunities Threats Weaknesses Score Search for convenience Russian origin Strengths Rising income +3 0 0 High quality +3 +3 Interesting tastes +3 No one knows Brand name Tea from Israel Healthy 100% lifestyle penetration Score Brand loyalty Established competitors +2 +2 +2 +9 +3 +2 +2 +2 +15 +3 0 +2 +2 +2 +12 -2 0 0 -3 -3 -3 -11 0 0 -3 -3 -6 +1 0 -3 -3 -4 +8 +6 +4 +3 -3 -3 +15

Our Insight

Insight #1 Insight #2 We don’t drink tea just for the tea itself, but for the moment and it’s symbolic value…a moment to dream and relax, share our thoughts and enjoy the company of friends or relatives People believe that leaf tea is better than the tea that comes in tea bags. However tea bags are often chosen for their convenience, and are thought of as a necessary compromise between quality and ease of use. Consumers may use teabags at work while buying leaf tea for home use

Positioning of premium label tea based on the quality of the product that comes in a convenient package. One product that makes any compromise unnecessary. A great solution for those who choose tea bags for work and leaf tea for home. Combining the convenience of a tea bag with the quality of a real leaf tea.

Our Concept

Brand story In 1824 future founder of Wissotzky company Kolonimus Wissotzky was born… …He had a dealer’s eye and very soon became a successful merchant. Wissotzky enjoyed exploring new places and had a passion for discovering the life around him…places…people…stories…impre ssions He liked to keep his thoughts, impressions and ideas on paper. . .

Brand story One day Wissotzky was browsing through his sketches and noticed that tea was somehow present in most of them His collection was full sketches of people drinking tea, his notes whether describing a person or an occasion often included remarks on how he or she held a cup of tea, recalled the memories of the warmth that a cup of tea had on a particular day … tea seemed to be part of the most experiences…if not the very heart of it Soon after Wissotzky founded his Tea company. Throughout the following years his vision of business was to deliver the very best experiences that a cup of tea can possibly provide…

Delivering experiences since 1824 A lot has changes since 1824 but not the way we see our business. We believe that moments spent with a cup of delicious tea are timeless and so is their value. 2000 s

issotzky oments

Our sample communication ideas

“Senses 360 degrees” communication campaign moto Hear • Radio teasers: “…boiling kettle, laughter…what makes a perfect cup of tea? ” Taste • Teabag insertions in magazines • Degustation via HORECA Smell • Teasers in magazines prior to pages with teabag insertions • Individually “Translating the moment smell, scented pages in magazines” Interact • Interactive ads, revealing the whole picture when held over a hot cup, or when warmed by means of breath • Photo contests “Create your Wissotzky moment!” See • POSM, special installations in shops (lexample: life size teabag trees ) • TV, Press

What makes your moment? Customers have to hold the picture over a steaming cup or warm it with their breath to reveal the whole picture. Such interactive ads are to be placed in cafes or in magazines

What makes your moment?

Internet activity: Share your Wissotzky moment Consumers add their photos representing their experiences associated with Wissozky tea, and viewing them “enjoying the moment”

Criteria: possibility to realize in Russian market Market niche Competitors Market trends Market niche available in “Masstiege” and upper price segments with emotional ad message Differentiation in positioning Proposing original KB Premiumization → “Masstiege” and upper segments Search for new flavors → accent on smell and taste Search for convenience → tea bag format Consumer behavior trends Growth potential Diverse culture → avoiding “Russian tea” concept Various occasions for drinking → “Moments idea” Taste and smell criteria → accenting in promo Growth in value but not in volume affected choice of price segment

Criteria: values & connection with mother brand We do not reject values of the past. Natural claims Health However, we change the focus of consumers attention to the new values, that are closer to their personality and apply to a larger audience Since 1849 Russian origin Our Brand story doesn’t contradict with what is known about Wissotzky company in Russia though develops the existing story and dwells on the moments that support the main message Create your Wissotzky moment! As a result: Wissotzky company doesn’t have to undergo serious changes in the matter of values, the new brand image will become the natural development of the existing one

Criteria: resources Journals POS materials Ho. Re. Ca Budget ways of promotion No need to spend money on the change of packaging design/brand name etc. Clear focus on the target with no dissipation of resources

Drinking tea is all about the moment…

A moment of…

Indulgence

Harmony

Inspiration

Well-being

Serenity

Sophistication

A moment …

…to dream

… to hold

…to share

…or leave all to oneself

Experience a moment of

Beauty

…a true

…Wissotzky moment

…Every tea bag is a moment captured

…waiting to be released

…create your moment

…choose your Wissotzky tea

Exquisite nature: modern sophistication. Ideal choice for selfindulgence, qualitysensitive consumers Asian flavor: for nonconformists & more creative consumers, searching for intense and unconventional taste Quality & tradition: ideal for everyone who seeks traditional taste of high-quality black tea Black Label Tea

Classic: Tradition and convenience meet together to provide the best of classic black tea. Fruit Passion: For those who prefer exciting fruit flavors. Fruit Tea Green tea: Green tea for those who like to take care of their health and enjoy green tea’s rejuvenating qualities.

Magic Garden: A wide range of herbal infusions. Ideal for consumers searching for fragrant kaffein free drink. Red Tea: Four unique flavors with hints of sweet and sour. Ideal choice for those who seek unique experience. Gift Boxes: A great opportunity to share one’s emotions and share unique moments with your friends, coleagues or family Gift boxes

Create the Wissotzky Moment!