cafe world

7/31/2019 Cafe World

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CAF WORLDSTART UP !

SUBMITTED BY: VIVEK TOSHNIWAL (80303120056)

SUBMITTED TO: MS. KAVITA

UCVC ASSIGNMENT-3


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An executive summary

Now-a-days coffeehouse is very familiar place for people. Every day, thousands of people gothere and seat for hours privately with friends, relatives etc. Seven years before people would nothave thought of spending Rs.50 or more than that for a cup of coffee; But now scenario has

changed and it becomes trend, status symbol and for some people just another shop.

Overall, the industry put the organized cafe market in India at Rs 931 crore, growing at 25% to 30% annually.Thecafe chain giant like Caf Coffee Day, Barista coffee, Costa coffee are responsible for thisrevolution which opens up new market. But these stores mostly restricted to metro cities and tire-1 cities.

There is demand from Tire-2 cities i.e. from sub-urban cities that they want to enjoy the samekind of experience in terms of quality products and sound atmosphere at lower rate. VTcoffeehouse would meet this demand and fill the gap by providing good quality products at

lower rate in pleasant environment. Our coffeehouse would be located at strategically importantplace (i.e. at shrinagar in Nanded) that would give us an edge in the market and also be helpful tomaintain high level of business.

MISSION

To be the most preferred caf chain by providing higher quality experience at affordableprices.

VISION

To be the best coffee caf chain on global platform.

OBJECTIVES

- Caf world would be preferred destination for the people of Nanded. - Achieve 15% net profit margin within the first year.- To be active member of society and establish a mark in the society.

MARKET SEGMENTATION

1) Local Business area-There is lot of people who involved in business. This business area is just 0.5 km awayfrom coffeehouse. In the evening this area gets overcrowded as people come forshopping. If we focus on these merchants and the customers then obviously number offoot fall would increased tremendously.

2) StudentsNanded is famous for 12th coaching classes. Just to the right of our coffeehouse 8 coaching classes


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are present and minimum 1200 students come daily to attend those classes. Also it ishardly 1 Km away from two major colleges. And the number of minimum studentspresent daily in each college is 3000.

3) TouristsIn addition to the population that resides in the city, each year Nanded hosts about 3 million

pilgrims who come to visit the Sachkhand Gurdwara, one of the five holy sites of the Sikhreligion. Most tourists will pass by the same location.

4) Working classNanded is a rapidly growing city, supporting industries such as textiles, sugar, pharmaceuticals, and

chemical. Recently, Special Economic Zone(SEZ) has developed for industrial growth. Other commercialsectors such as insurance, banking, and construction are also flourishing. All these factors played animportant role in increasing the number of working class people.

TARGET MARKET SEGMENT STRATEGY

1) Local business areaAll the prime shops of the city are located in this business area. The local customers fromthis segment mostly become loyal customers to our business. So this segment is veryimportant for continuous and steady growth of business.

We will develop good relationship with these business shops and also we would try to bea part of local business community. It helps in increasing our business network whichwould helpful in making stable customer base.

We will give our discount coupon to some prime shops. These shops would offer thosecoupons to only those customers whose purchase would be beyond certain specific price.

In this way customers going to those shops would come to know about our coffeehouse.Actually, we are giving those coupons to very few customers as compared to the totalcustomers who would come to know about our coffeehouse.

We will also offer coffee service to local restaurants and businesses. Coffee servicebrings in additional revenue and promotes among employees and customers at these businesses.

2) StudentsEvery day minimum 4000 students would be around our coffeehouse. Coffeehouses arevery popular with students- As a better affordable place to hang out with their friends.

To reach students we will give them different discount coupons which would becustomized as per their needs, changing market trends and depending upon any megaevent happening.

Also we will sponsor some students mega events. At the same time we will felicitatethose students who have done well in academics. It would help our business to establishconnect with students and make them our presence felt.


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We would provide them some kind entertainment. Entertainment would be music, gameor celebrating special day etc. It would attract and enrich the students experience incoffeehouse. By attracting students we generate excellent word-of-mouth publicity.

3) TouristsEach year nearly 3 million pilgrims visits Nanded and most will pass by the samelocation of our coffeehouse. Our aim would be to make these tourists visit at least once toour coffeehouse.We will associate with Gurudwara in their social charitable work. It will show that we arehere not only to earn profit but to give back something to society. It would be beneficialfor business in long run.

We will do extensive advertising to draw their attention towards our coffeehouse. We

will make sure that every time they see or hear about us by posters, banners or radio. Itwould make an impression on them and finally most of them will visit to ourcoffeehouse.

4) Working classThe number of people in this class is increasing rapidly; so we cant take risk of ignoringthis group. We have to take conscious effort so they can be part of our customer base.

We will advertise our wide range of products and their quality, ambience of ourcoffeehouse. We would specially offer some strong favors of coffee and variety of

cookies to attract the working class people. Also it would be good place for them to relaxin a pleasant environment with a cup of coffee.

COMPETITORS- Popular coffee shops like CCD, Barista coffee, Costa coffee are not present in Nanded

city.- Currently, some local restaurants are present in market which offers coffee. But coffee is

not their main productIt is mostly treated as supplementary product to breakfast dish orto their main course. Also they dont offer any variation in coffee.

MARKET OPPORTUNITY AND ISSUESOpportunities

- As we know, there is no such stiff competition in the market to our business; we have agreater opportunity to expand our business and to prove ourselves.


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- We need to enter into the market aggressively by using all the resources we have. Itincludes extensive advertising, best products, best services etc. Because the success ofthis coffeehouse would define the future path.

- In future, we can open 1 or 2 more shops in this city seeing the performance of firstcoffee shop. These shops will take care of remaining areas in the city.

- The success stories of these coffee shops in Nanded city would definitely inspire us toopen new shops in other suburban cities (Tire-2 cities). On this business model if weexpand our business it would be large chain of COFFEE DESIRE.

- The life style of youth is changing and they like to spend time on lounging.- We can also sell merchandise (like coffee cup) through stores.

Issues

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The substitute products like juice, lassi may hamper our business. So considering thisthreat, we will add some of these products into our menu.- Ice cream parlors like Dinshaws may divert our customers in the absence of other coffee

shops.- A challenge to convince people that it is worth to spend money in our coffeehouse. They

would get value for money.- Consumers are more health conscious and likely trends towards healthy drinks. - Threat of new entrants and costs.

POSITIONING- Research shows the following statics about the customers who visits coffeehouses. 37%

of the customers are between 20 and 24years. 27% of the customers are between the agegroup of 25-29 years.

- In our case the statics would remain more or less same. So we have to consider them asmain target customers and need to establish a brand CAF WORLD within them.

- So that customers can rely on this brand for quality food, good service, and a place whichwill rejuvenate them.

- The Caf World logo and tag line convey the message very beautifully to our customers.


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Picture 1: THE CAF WORLD LOGO- In the logo a cup of coffee and brown colored coffee beans are used to show the quality

of coffee. The light yellowish arrow with red boarder, below the coffee cup shows therapid growth of caf world. At the same the direction of arrow is towards the halfhemisphere having a map of world on its outer side. This indicates the expansion of CafWorld coffeehouse into the different parts of world to become a global leader.

- Tagline- A place where world meets and tweets is written on arrow. This message CafWorld will pass to their target segment customers.

MARKETING MIX

PRODUCT MIX

COFFEES & TEAS REFRESHING ALTERNATIVES EATABLESHot coffe Granitas & Smoothies SandwichesCappucino Blood Orange Panner tikka

Caffee Mocha Emerald Ice Cheese &tomatoCaffee latte Pineapple Crush Chicken tikkaMacchiato Mango Colado Smoked chickenEspresso Americano Strawberry ColadoIrish CofffeeChococcinoIrish Cofffee


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Filter CoffeeCold Coffee & CoffeeAdd-ons

Cool Refreshers Quick Bites

Sweet Mint Fruit juices SamosaCold Sparkle Lassi Puff

Tropical Iceberg Mineral water PizzaIced Eskimo French FriesHoney WrapsWhipped Cream BiryaniScoop pf Ice cream CookiesChocolate Sauce BurgerTeas Cremosas Ice creams & cakesAssam Tea Litchi VanillaMasala Chai Ginger Spice ChocolateLemon n Ice tea Pina Colado Seasons BestDarjeeling Chai Chocolate cake

Lemon Iced tea Pineapple cake

- We will try our best to offer customized products to our customers as per thererequirements.

- We will have check on product quality all time. The food in-charge will look at the wayfood is being stored, coffee is being made, what is the time take to extract the coffee andso on.

- The serving size of a product is a measure, not only of quantity, but also of value forMoney.

PRICE

- It will be first coffeehouse in Nanded city and our major target age group is 16- 35, weshould set affordable price so it can satisfy all our

- The price for a cup of would be from Rs 25 to Rs 80.- In this price range customers would have better options and can easily choose any one of

the coffee as per their requirement.

PROMOTION- It would be done using mass media which includes local newspapers and local TV

channels.- Local newspapers for advertising are Lokmat, Sakal, Dainik Bhaskar, Times Of India,

Lokmat times.- Hoardings of CAF WORLD would be placed on prime locations of city.- We will also promote it on internet. On internet we would create our own web page. This

web page will give information about the available and new products, discount schemes,special offers, special day celebration etc.


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- Also we will promote it through social media. For example by creating facebook page. - Besides that we will tie up with various organizations and local brands.- Organizations like Mitra Mandal which continuously organize various events for youth,

celebrate almost every festival in Nanded.- We would promote it through SMS.- We will offer special CAF WORLD CARD. The members having this card would

entitle for some discount (initially 5%, then 10%) on the bill. These card holdercustomers would also receive surprise gifts, along with special offers and invitationstime- to- time.

PLACE- It will situate in one of the prime locations of the city.- The target customers will be continuously roaming around the coffeehouse. - High traffic location-

Year round tourist activity- It will be easier for suppliers to supply the raw material and product. - The city is connected by road, train and air route.

MARKETING STRATEGY

The marketing strategy will be used to position Caf Word as a best coffeehouse which

providing high quality of experience at affordable prices. As a beginner we will do aggressivemarketing. It will help us to establish in the market. It will be done by using following ways:

- Advertising through local and regional media Newspapers (ex. Lokmat, Sakal, Times Of India) Magazines (ex. India today, Mumbai Chofer) Radio channels (ex. National radio channel, Radio mirchi)

- Advertising through internet On own website- We can also sell the products online along with advertising.

Whole coffee beans, tea Gift baskets Gift items Furnishings

Social media (ex. Facebook )- Tie-ups


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We will become a part of the local community. It would create opportunities toestablish contacts with important people and also helpful to promote our brand. Active role in local business community Active role in charitable works Sponsoring the events and sports competitions Local suppliers

- In the beginning we will distribute samples at coffeehouse or to passenger-by on thestreet. Also we can do this sampling activity at colleges, nearby local business area.

Startup Cost

Equipments/ Accessories CostUnder counter Refrigerator 60,000Espresso Machine 1,16,990Large Refrigerator 25,000Ice Machine 2,500Fetco Coffee Brewer 50,000Service counter 15000Air conditioner 40,000Tables, Chairs, Furnishings 2,00,000Lighting Fixtures 1,00,000Other accessories 5,00,000

Total 11,59,420

- We will take shop on lease. The rent of that shop would be Rs. 7,000 per month. And alsowe have to put give deposit money to shop owner i.e. Rs. 2,00,000

- Money required during starting of business is approximately Rs.15,00,000Estimated Total Revenue

Other than coffee and juices all other things are outsourced.

If on an average cost of coffee is Rs. 40On an average daily customer for coffee 150

Monthly revenue from coffee = 40*150*30= 1,80,000


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Total number of coffees sold= 150*30= 4500For a cup of coffee, no. of coffee beans required=49

In 1 kg, no.of coffee beans = 8,800Avg. Price of 1 kg. coffee bean= Rs.312

Coffee beans required =220500/8800= 25 kg

Cost of coffee bean= 25*312= Rs. 7800The profit margin on outsource product is marginal. The other products would addanother Rs.1,00,000

The toat revenue for first month would be = Rs. 2,80,000As we come to know from above cost calculation of beans; that raw material cost is low.So obviously profit magine would always be higher. However cost of roasting (of beans)is not taken into the calculation.

Review and Control- Daily sales would be analyzed- Quarterly reports would be outsourced to respective consulting agencies. - And further action would be taken accordingly.- A team of 6 members would be selected through an interview.- This team would be further divided into team 1 and team2 each consisting of 3 members - Team 1 would take care of management part while Team 2 would take care of other part.

Contingency plan- I would change my business from servicing to selling. I would plant and sell coffee

beans.- I would sell the company to the available buyer at maximum bargain.

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