Term Project-Tea Stall-Marketing Management

Marketing Management 2 Term Project

GROUP IV Marketing Plan for a Food Stall SYMBIOSIS INSTITUTE OF INTETRNATIONAL BUSINESS MBA- AGRI BUSINESS 2009 – 2011 Submitted to Prof. Deepa S 08.02.2010

Trina Bhagat (09020242005) NItika Singh (09020242022) Rishika Mittal (09020242030) Susrita Sen (09020242036) Avinash Tirkey (09020242044)

INDEX 1. Introduction to marketing plan…………………………………….3 2. Executive summary…………………………………………...…...4 3. Customer Base…………………………………………………..…5 4. Knowing the competitors………………………………………..…6 5. Competitive analysis and marketing strategy…………………...7 6. Product Details……………………………………………………12 7. Action Plan………………………………………………………...13 8. Finance and grants……………………………………………….16 9. Conclusion…………………………………………………………17

INTRODUCTION TO MARKETING PLAN Our objective is to enhance the stall owners business within the limited resources he has. We try to introduce new products and strategies to allure the existing customers and attract new customers. We try to build loyalty among the customers and save the business from the growing competition in the neighbouring areas. It has been observed that the stall attracts maximum crowd as compared to its neighbouring stalls. The stall opens at 4pm and stays till 11pm. It has been observed that the stall offers the maximum varities of products and maintains good personal relations with its customers. The stall offers its products on credit to its regular customers which adds as an additional offering. The customer base is mostly students and executives who take a break from their hectic schedule during the evening. The stall faces a peak time from 4pm to 7pm. Looking at its product offering and tremendous potential to grow, we have choosen to develop a marketing plan for the food stall.

EXECUTIVE SUMMARY Our Marketing Plan is to cover a small Tea Stall outside our college premises. The stall offers various products and it customer base is mostly students and IT professionals. The stall is a major hang out place as it not only offers snacks but also a common place for social networking. People prefer to visit the stall during taking a break from their regular day to day activities. We propose to enhance his existing business utilizing his resources in best way possible and with minimum possible investments. Various improvements in land/area development, sales and marketing, requisution and identing, ingredients and cooking, furniture and provivions etc are suggested. The food stall belongs to a man named Raju and is managed by his family consisting his wife and younger brother. Since it will take some time for Raju to gather financial resouces for improvements, the best time to launch the proposal will be around the months of June-July 2010, as this is the time when a new semester begins in the neighbouring colleges.

CUSTOMER BASE • Students, faculty and staff from Symbiosis International University • Students, faculty and staff from IIIT • Employees of nearing companies eg. MTech, Cognizant etc • Labours from neighbouring construction sites • Drivers of automobiles • Guests and visitors

KNOWING THE COMPETITORS The food stalls around the college area are all competition for Ramu’s stall as most offer food of the same category. Egg roll stall Dabeli Stall Bhutta Stall Chat Stall Maggi Stall Tea-Wada Stall Van-Pav Bhaji Idli Wala Fruit Stall Sugarcane Juice Stall Wada Pav Stall opp Stalls outside Cognizant

COMPETITIVE ANALYSIS AND MARKETING STRATEGY

Our food stall is not an isolated unit in the world and performs within a market full of competitors. To be able to evaluate its position on market and to act accordingly we use the Porter's Five Forces Model. This model helps us define and realize our business and its surroundings and identify threats and opportunities to focus on. We review this model periodically to obtain up-to-date data in this global and turbulent environment. The Porter Model consists of 5 elements which together comprises the environment business operate in. These elements are: suppliers, customers, new entrants, existing competition and the product itself. By assessing every one of these elements we get the whole picture of our food stall within the market and the rating helps us target the key areas. We use the scale of 0-5 to evaluate the power of each element where 0 means no power and 5 very high powers (referring to the number in the brackets).

1) Power of Suppliers Factor • The market is dominated by a few large suppliers • There are no substitutes for the particular input • The supplier’s customers are fragmented, so their bargaining power is low • The switching costs from one supplier to another is high • The buying industry has a higher profitability than the supplying industry • Forward integration provides economies of scale for the supplier • The buying industry hinders the supplying industry in their development • The buying industry has low barriers to entry

2) Power of Customers Factor • • • • •

There is the possibility for the customer integrating backwards The customer knows about the production costs of the product The product is not of strategic importance for the customer Customers could produce the product themselves Customers have low margins and are price sensitive

• Switching to an alternative product is relatively simple and is not related to high costs • The product is undifferentiated and can be replaced by substitutes • The supplying industry operates with high fixed costs • The supplying industry comprises a large number of small operators • They buy large volumes, there is a concentration of buyers

3) Threat of New Entrants Factor • Economies of scale (minimum size requirements for profitable operations) • High initial investments and fixed costs • Brand loyalty of customers • Protected intellectual property like patents, licenses etc • Scarcity of important resources, eg. Qualified expert staff • Distribution channels are controlled by existing players • Existing players have close customer relations, eg. From long term service contracts • High switching costs for customers • Legislation and government action

4) Threat of Substitutes Factor •

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Brand loyalty of customers Close customer relationships Switching costs for customers The relative price for performance of substitutes Current trends

5) Existing Competition Factor • There are many players of about the same size • Players have similar strategies • There is not much differentiation between players and their products • Low market growth rates • Barriers for exit are high (eg. Expensive and highly specialized equipment)

PRODUCT DETAILS The following are the products and prices available at the food stall: Chai (Tea)...…………………………………….……………………..Rs. 5 Samosa…...…………………………………………………………...Rs. 6 Bhajia..………...………………………………….……………Rs. 10/plate Bhajiya Pav…...………………………………….……………………Rs. 7 Wada……………………...……………………….…………………..Rs. 6 Wada Pav………………….………………..………………...………Rs. 7 Anda Burji (Scrambeled Eggs)......…….……….…………………Rs. 10 Cigarettes (ITC)…………………………………………………....variable Parle G…………………………...………………….………..Rs. 5/packet Mentos……………...……………………………….…………………..50p Centre Fresh……………………..………………….…………..…….Rs. 1 Local Toffee…………….……………………………...…………..variable Saunf………………………………………………….…………...…….50p Gutkha…………………………...…………………….…………...variable We suggest to introduce maggi as another product offering. As per our observation in neighbouring food stalls, a plate of masala maggi is sold at Rs. 15. Various varieties of maggi is sold as well, like egg maggi and vegetable maggi which are priced at Rs. 25 and Rs. 20 respectively. We also suggest introducing hot coffee as none of the neighboring stalls offer the product and as the customer base is mostly that of students and executives, the product will be well accepted. The price may range from Rs. 5 – Rs. 10.

ACTION PLAN Land /area development • Section leveling (since the area has been dug up owing to various activities of the municipal corporation) • Section demarcation( it is essential to ensure customers feel at home and there is reduced encroachment) • Land cleanliness and hygiene ( a clean and hygienic environment would promote better sales) • Regular water sprinkling ( this would the area to free of loose soil and dust settling on food and ingredients) • Procurement of canopy from used promotional campaign of companies (E.g. Airtel, Vodafone) to provide shade and a better ambience to customers.

Sales and Marketing •

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Promote cash discounts on bulk orders Promote free home and office delivery Use of hygienic gear like plastic gloves and aprons to positively influence customer attitudes and perceptions. Develop a concealed cooking facility to achieve sales through a non merchandising effect, since merchandising effect through open air public cooking is not their strength. Analyze sales patterns to be able to provide more value to customers through use of bundling and package deals Analyze average customer spending to identify sales S.K.U.s of concern and opportunity. Phased roll out of coffee mugs for hot beverages instead of regular glasses to induce mark up.

Requisition and Indenting • Teach them and help implement E.O.Q.( Economic Order Quantity ) and aid them in making it a habitual Purchase and Requisition criteria. • Help them understand opportunity loss, and cash flow decisions, for them to be able better decide on “Buying v/s leasing decisions.” • Help them develop credit relations with suppliers to facilitate cash flow and businesses continuity

Ingredients and cooking • Use of quality cooking oil and display of information to communicate the same to the customers. • To ensure and assign proper Mis-en-Place duties (Opening Duties). and closing duties to achieve minimum wait time in customer service delivery. • Usage of commercial high capacity gas ranges with multiple burners with L.P.G. fuel requirements instead of kerosene burners which have an lower heat output to ensure faster cooking and heating, thereby considerably reducing customer wait time and service temperatures. Renovation & Refurbishment of stall Functionally- provision of extra storage space and work space beneath the main working space of the mobile vehicle • Aesthetics- lighting, painting and finish of stall • Curtains over the tyres and storage area •

Furniture and provisions • Seating arrangement increased on sales through preliminary leasing • Provision of dustbins • Provision of a cashier’s desk to take care of all O.T.C. transactions while the rest of the staff takes care of operations to reduce losses due to pilferage and increase both the top line and bottom line. • Use of tea and coffee canisters instead kettles at cashiers desk to ensure speedy dispensing of the fastest selling S.K.U. • Moreover efforts should be made to have a faster customer turnover consuming the lower priced S.K.U. to ensure further sales are not hindered due to lack of seating. • Use of aesthetic lighting by use of C.F.L.s to attract attention. • Name for the stall on a board/banner or on the mobile vehicle to initiate a branding exercise • Setting up a menu board: To provide anchor functionality with which people readily identify the products offered along with their prices. Implementation of batch processing and standard operating procedures through use of standard recipes to increase consistency in taste, output and cooking time. This also helps in budgeting well for demand without reduction in quality or taste.

Layout for the stalls seating arrangement

Main Road

The Wall Shelf space around mobile vehicle for standby customers Separate Tea and Cashiers desk Main Cooking area and shelf for displaying products with storage space below Plastic Stools

Canopy to prov

Dustbins to prevent littering around the stall Concealed washing area

FINANCE AND GRANTS Raising Finances 1. Savings from daily sale 2. Lending from friends and family Resource Allocation 1. Prioritizing activities based on their cost and tentative impact on sales Maintaining Cash Flow 1. Determining EOQ of various raw materials like potatoes, oil, spices, onions etc. to ensure smooth business continuity without bottlenecks in funding. Credit Understanding with Suppliers 1. Developing cordial business relation with

CONCLUSION STRENGHTS • • • • • • •

Wide variety of products Easily affordable rates Customer retention due to good PR skills Strategic location Minimal service time Movable Minimum operation time

WEAKNESS • • • • •

No proper infrastructure Lack of manpower Hygiene concerns of the customer No proper record of transactions Illegal encroachment susceptible to police raids

OPPORTUNITIES • Expand the product line • Home delivery service • Customer preference to eat outside without traveling too far instead of eating within premises • Opportunity to provide bundle deals (mini meals) THREATS • • • •

Stiff competition Police raids against encroachment of area Low entry barrier Low customer loyalty