While the competitiveness of the Sri Lanka’s tea is declining in the global market, it is very important for Sri Lankan tea to evidently identify the reasons for declining competitiveness and how Sri Lanka can face this challenge fulfilling the demand of global market. The Sri Lankan tea industry has lost its market leadership position in the global market. With declining production, increasing cost of production, low farm productivity and price competition in the international market, Sri Lankan tea industry has lost its competitive advantage. Secondary data and primary data have been used for this study. 53 interviews have been conducted for this study in Sri Lanka and in India. Despite the fact that Sri Lanka is one of the major producers of tea, the local tea industry does not earn enough to be viable. Global consumers are paying more than ten times the price received by the Sri Lankan producers. The value addition is taking place in the consuming countries and the economic benefits of higher price for value added tea products go to the consuming countries. In this context the viability of the Sri Lankan tea industry makes it imperative to adopt production of value-added tea products, promoting local brands in the global market and marketing the products in the international market. The government should also provide further supports to this tea industry to be uplifted in the country.
The objective of this paper is to analyze present trend of Sri Lankan tea industry and to identify problems in international marketing of tea. Qualitative methodology was adopted in this study. Checklist was prepared and researchers interviewed twenty six experts from tea exporting and marketing companies in Sri Lanka. Any strategy that will enhance the competitiveness in terms of sustaining competitive advantage globally is held up by high cost of production. Therefore, it is recommended that Sri Lanka needs to follow one of the best international entry modes to market tea internationally by having international organizations in tea marketing and exporting companies. This will help the industry improve the profitability and thus, protect people working in the plantation and Sri Lanka will get economic benefits. It is favorable for Sri Lanka having properly designed product, promotion, pricing and distribution strategies in accordance with the needs of international tea market are imperative for Sri Lankan tea industry to face the marketing challenges prevailing in the international tea market, which will assist Sri Lankan tea industry in competing intensively with other tea exporting or re exporting countries. Sri Lankan government may also extend massive support to the industry to convert export companies into international marketing oriented firms.
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