Luso Tea case study

: a natural brand extension in the ice-tea category

Abstract

The focus of this dissertation is to understand and assess the Luso brand extension Luso Tea by analyzing the reasons behind it, the process that lead to the launch, the desired positioning and the according consumers’ perceptions regarding the brand. Luso is a company of Portuguese origins owned by Sociedade Central das Cervejas e Bebidas, the Portuguese Op-co from the Heineken Group. With over 160 years of existence, Luso is known for its homonymous natural mineral water, still-water brand leader in Portugal. However, this market was facing challenges and profitability was decreasing to concerning levels. The company decided to venture into new, more profitable categories, which would allow leveraging the awareness and expertise of the Luso brand. The decision was made to launch Luso Tea, an ice-tea made with Luso water and with a more natural and healthy positioning when compared to other ice-teas, allowing the company the opportunity to enter the soft-drinks market. The product was launched in April 2014, starting the brand’s journey into new categories. The research methods chosen include a Literature Review to collect important theoretical concepts for the study, a Case Study with Teaching Note for in-class discussion and a Market Research, consisting of an in-depth interview to understand the company’s side of this brand extension process and an exploratory market visit and online Survey to gather the reactions and opinions of the consumers. The main conclusions reached were that Luso launched the brand extension Luso Tea in order to apply the brand’s expertise and strength to enter more profitable, but still closely fit categories. Luso Tea seems to be well received and perceived in line with the desired positioning, but established ice-tea brands are not allowing great sales. Additionally, the company should consider including Stevia, the natural sweetener used in the formulation of Luso Tea in the future communication, as this shows to have a positive effect on the consumer perception of flavor and quality of ingredients.

Date of Award	2015
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Pedro Celeste (Supervisor)