Foundations of Marketing 5th Edition by Ferrell,William Pride

Exercise 19

Numi Tea Pours It On with Resellers
Tea, one of the oldest beverages in the world, is a growth industry these days. Served hot or cold, brewed in bags or using loose leaves, tea accounts for $10 billion in U.S. sales every year. Although the business is dominated by corporate giants such as Lipton, companies with unique tea products can compete quite effectively by connecting with key resellers.
Numi Tea of Oakland, California, is riding the wave of tea popularity in just this way. Founded in 1999 by the brother-and-sister team Ahmed and Reem Rahim, Numi markets only organic fullleaf teas. Many of its teas are Fair Trade certified, which means the growers in India, China, and South Africa are paid more than the usual market rate for their leaves. For environmental sustainability, Numi's gift boxes and store displays are made from fast-growing bamboo.
Numi's product offerings include tea bags, tea leaf mixtures, herbal teas, and accessories such as teapots and filters. One of its most unusual products is flowering tea. When a hand-sewn bundle of these black, white, or green tea leaves is dropped into boiling water, it releases its fragrant flavor as it expands into a pretty blossom shape. In addition, Numi runs a Tea Garden in downtown Oakland, furnished with eco-friendly materials and featuring Numi's organic teas plus an assortment of cheeses, fruits, and bakery items.
How did Numi bring its sales to a multi-million-dollar boil so quickly From the start, the Rahims recognized that their company's growth depended on building long-term relationships with good wholesalers, retailers, and restaurants. Numi needed to educate resellers (and help them educate their customers) about the advantages of Numi's tea products. To do this, it created training materials for reseller employees and a series of informational tea cards for resellers to give to customers. It also developed colorful product highlight cards and displays for store shelves and restaurant tables, plus eye-catching posters and banners showcasing the brand.
Service is another important element of Numi's marketing strategy. The company has a brand ambassador who visits restaurants, wholesalers, and retailers to introduce new products and promotions, discuss point-of-purchase displays, conduct product demonstrations, and identify new sales opportunities. It also sends out newsletters and e-mails with product and promotion updates.
Rather than using a "one-size-fits-all" approach, Numi adapts its service to the differing needs of its various resellers. For instance, to help upscale restaurants make a good impression on their patrons, Numi provides handsome bamboo tea chests and boxes in which to present tea choices at table-side. Numi also makes glossy presentation folders in which luxury hotels can leave Numi tea bags in guest rooms as a special amenity. In addition, it helps its hotel and restaurant customers create custom menus and inserts that describe Numi's special teas in more detail.
For the convenience of its resellers, Numi offers a number of ordering options. Depending on the size of their order and where they are located, retailers can buy through a local wholesaler, Numi's website, or the wholesaler WorldPantry.com. To make it easy for consumers to find Numi retailers in the United States and Canada, the company's website includes a store locator function.
Careful attention to reseller relationships has helped Numi increase annual revenues beyond $13 million. No wonder it was recently named one of the fast-growing inner-city companies in America. More growth is ahead as the company expands distribution by intensifying its marketing to gourmet grocery stores, quality restaurants, and upscale hotels across North America.
What important concerns might retailers and wholesalers have when making decisions about buying from Numi