CAF WORLD

START UP !
SUBMITTED BY: VIVEK TOSHNIWAL (80303120056) SUBMITTED TO: MS. KAVITA UCVC ASSIGNMENT-3

An executive summary Now-a-days coffeehouse is very familiar place for people. Every day, thousands of people go there and seat for hours privately with friends, relatives etc. Seven years before people would not have 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.

The

cafe chain giant like Caf Coffee Day, Barista coffee, Costa coffee are responsible for this

revolution which opens up new market. But these stores mostly restricted to metro cities and tire1 cities. There is demand from Tire-2 cities i.e. from sub-urban cities that they want to enjoy the same kind of experience in terms of quality products and sound atmosphere at lower rate. VT coffeehouse 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 important place (i.e. at shrinagar in Nanded) that would give us an edge in the market and also be helpful to maintain high level of business. MISSION To be the most preferred caf chain by providing higher quality experience at affordable prices. 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 areaThere is lot of people who involved in business. This business area is just 0.5 km away from coffeehouse. In the evening this area gets overcrowded as people come for shopping. If we focus on these merchants and the customers then obviously number of foot fall would increased tremendously. 2) Students Nanded is famous for 12th coaching classes. Just to the right of our coffeehouse 8 coaching classes

are present and minimum 1200 students come daily to attend those classes. Also it is hardly 1 Km away from two major colleges. And the number of minimum students present daily in each college is 3000. 3) Tourists
In 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 Sikh religion. Most tourists will pass by the same location.

4) Working class
Nanded 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 commercial sectors such as insurance, banking, and construction are also flourishing. All these factors played an important role in increasing the number of working class people.

TARGET MARKET SEGMENT STRATEGY 1) Local business area All the prime shops of the city are located in this business area. The local customers from this segment mostly become loyal customers to our business. So this segment is very important for continuous and steady growth of business. We will develop good relationship with these business shops and also we would try to be a part of local business community. It helps in increasing our business network which would helpful in making stable customer base. We will give our discount coupon to some prime shops. These shops would offer those coupons 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 total customers who would come to know about our coffeehouse. We will also offer coffee service to local restaurants and businesses. Coffee service brings in additional revenue and promotes among employees and customers at these businesses. 2) Students Every day minimum 4000 students would be around our coffeehouse. Coffeehouses are very 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 be customized as per their needs, changing market trends and depending upon any mega event happening. Also we will sponsor some students mega events. At the same time we will felicitate those students who have done well in academics. It would help our business to establish connect with students and make them our presence felt.

We would provide them some kind entertainment. Entertainment would be music, game or celebrating special day etc. It would attract and enrich the students experience in coffeehouse. By attracting students we generate excellent word-of-mouth publicity. 3) Tourists Each year nearly 3 million pilgrims visits Nanded and most will pass by the same location of our coffeehouse. Our aim would be to make these tourists visit at least once to our coffeehouse. We will associate with Gurudwara in their social charitable work. It will show that we are here not only to earn profit but to give back something to society. It would be beneficial for 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. It would make an impression on them and finally most of them will visit to our coffeehouse. 4) Working class The number of people in this class is increasing rapidly; so we cant take risk of ignoring this 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 our coffeehouse. 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 relax in 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 product It is mostly treated as supplementary product to breakfast dish or to their main course. Also they dont offer any variation in coffee. MARKET OPPORTUNITY AND ISSUES Opportunities - As we know, there is no such stiff competition in the market to our business; we have a greater opportunity to expand our business and to prove ourselves.

We need to enter into the market aggressively by using all the resources we have. It includes extensive advertising, best products, best services etc. Because the success of this coffeehouse would define the future path. In future, we can open 1 or 2 more shops in this city seeing the performance of first coffee 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 to open new shops in other suburban cities (Tire-2 cities). On this business model if we expand 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 - The substitute products like juice, lassi may hamper our business. So considering this threat, 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 age group of 25-29 years. In our case the statics would remain more or less same. So we have to consider them as main 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 which will rejuvenate them. The Caf World logo and tag line convey the message very beautifully to our customers.

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 the rapid growth of caf world. At the same the direction of arrow is towards the half hemisphere having a map of world on its outer side. This indicates the expansion of Caf World 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 Caf World will pass to their target segment customers.

MARKETING MIX PRODUCT MIX COFFEES & TEAS Hot coffe Cappucino Caffee Mocha Caffee latte Macchiato Espresso Americano Irish Cofffee Chococcino Irish Cofffee REFRESHING ALTERNATIVES Granitas & Smoothies Blood Orange Emerald Ice Pineapple Crush Mango Colado Strawberry Colado EATABLES Sandwiches Panner tikka Cheese &tomato Chicken tikka Smoked chicken

Filter Coffee Cold Coffee & Coffee Add-ons Sweet Mint Cold Sparkle Tropical Iceberg Iced Eskimo Honey Whipped Cream Scoop pf Ice cream Chocolate Sauce Teas Assam Tea Masala Chai Lemon n Ice tea Darjeeling Chai Lemon Iced tea -

Cool Refreshers Fruit juices Lassi Mineral water

Quick Bites Samosa Puff Pizza French Fries Wraps Biryani Cookies Burger Ice creams & cakes Vanilla Chocolate Seasons Best Chocolate cake Pineapple cake

Cremosas Litchi Ginger Spice Pina Colado

We will try our best to offer customized products to our customers as per there requirements. We will have check on product quality all time. The food in-charge will look at the way food is being stored, coffee is being made, what is the time take to extract the coffee and so on. The serving size of a product is a measure, not only of quantity, but also of value for Money.

PRICE It will be first coffeehouse in Nanded city and our major target age group is 16- 35, we should 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.

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 holder customers would also receive surprise gifts, along with special offers and invitations time- 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 aggressive marketing. 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 Tie-ups

(ex. Facebook )

We will become a part of the local community. It would create opportunities to establish 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 the street. Also we can do this sampling activity at colleges, nearby local business area.

Startup Cost

Equipments/ Accessories
Under counter Refrigerator Espresso Machine Large Refrigerator Ice Machine Fetco Coffee Brewer

Service counter Air conditioner

Tables, Chairs, Furnishings Lighting Fixtures

Other accessories Total -

Cost 60,000 1,16,990 25,000 2,500 50,000 15000 40,000 2,00,000 1,00,000 5,00,000 11,59,420

We will take shop on lease. The rent of that shop would be Rs. 7,000 per month. And also we have to put give deposit money to shop owner i.e. Rs. 2,00,000 Money required during starting of business is approximately Rs.15,00,000 Estimated Total Revenue Other than coffee and juices all other things are outsourced. If on an average cost of coffee is On an average daily customer for coffee Rs. 40 150

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

Total number of coffees sold= 150*30= 4500 For a cup of coffee, no. of coffee beans required=49 In 1 kg, no.of coffee beans = 8,800 Avg. Price of 1 kg. coffee bean= Rs.312 Coffee beans required =220500/8800= 25 kg Cost of coffee bean= 25*312= Rs. 7800 The profit margin on outsource product is marginal. The other products would add another Rs.1,00,000 The toat revenue for first month would be = Rs. 2,80,000 As 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.