Abstract:
To remain Ceylon tea competitive among the global tea exporters, focus is essential with strategies that address
different consumer preferences for tea. Upgrading the value of existing products is vertical diversification. The
objective of this study was to examine the possibilities to increase profits through application of branding and
promotion as vertical diversification strategies and to identify their significance towards profit maximization of the
industry. Forty five tea exporters categorized according to average export volume by Sri Lanka Tea board were
selected by stratified random sampling method and a questionnaire based field survey was carried out for the
purpose. Chi squar test for association and Wilcoxon signed rank test were used to analyze data. Single brand for all
destinations and separate brands for different destinations were identified as prominent branding strategies.
Seventy seven percent involved in brand maintenance and it included 50% single brand while the remaining 50% in
multiple branding. Thirty nine percent maintained their own brands, 15% maintained both own and private brands
together while 46% of firms engaged in providing materials for different private brands. X2test for association
revealed that brand maintenance significantly associates over profit (X2= 4.183, P-Value = 0.041). Advertising
through social websites, maintenance of own websites, trade fair participation and establishment of sales outlets in
abroad were studied for the means of promotion. Sixty percent of the sample advertised in social websites, and 44% of
firms had at least one sales outlet abroad while 86% maintained own websites for promotion. Advertising through
social websites and establishment of sales outlets abroad were significantly associated with profit. (Chi-Sq = 4.036, P-Value = 0.045 and Chi-Sq = 5.137, P-Value = 0.023).
