Kinjal Saraiya a 3 batch 2013-15

1. • Name: Kinjal Saraiya
• Division: A
• Roll No.: 3
• Batch of the candidate: 2013-15
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2. INTERNATIONAL
Every day, more than half of the adult population drinks coffee.
According to the latest National Coffee Drinking Study from the National Coffee Association,
According to a National Coffee Association Annual Drinking Trends Survey, specialty coffee consumption has risen from
9% in 2000 to 16% in 2004.
While fast food chains are growing at a rate of 2 percent each year, coffee shop chains grow more than 10 percent
annually.
NATIONAL
The Indian cafe market in 2012 : $230 million and is expected to grow at a CAGR of 13-14% by 2017 (according to
management consultancy firm Technopak).
According to recently published report ‘India Coffee Shops / Café Market Forecast & Opportunities, 2017’, it is expected
to grow threefold in the next five years to become Rs. 5600 Crore market by 2017.
Current coffee industry : Rs. 1,000 crore -- one of the fastest growing organized retail segment.
Rising per capita income, increased literacy and rapid urbanization have caused rapid growth and change in demand
patterns.
More than 1,200 cafes have sprung up across India in the past decade, clocking an average annual growth of around 40%.
Age-Group drinking coffee each day 2010 (%) Increased from (%)
(in years)
18-24 40 31
25-39 54 44
GENERIC VIEW OF THE MARKET
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3. MAJOR COFFEE PLAYERS IN INDIACOMPARITIVE ANALYSIS
Major competitors in Pune
1. Café Coffee Day (CCD)
2. Barista
3. Costa Coffee
4. Coffee Bean
5. Gloria Jean’s
6. Java Coffee
6015
25
Market Shares (in%)
CCD
Barista
Others
Major competitors all over
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4. Segmentation:
• Social class, lifestyle or
personality characteristics.
• Starbucks focuses heavily on
charity and the arts, and is
making significant efforts to
be a socially and
environmentally responsible
company.
Psychographic
segmentation
• Shopping malls.
• Locations that provide
convenient access for both
pedestrians and drivers.
• Upscale locations.
• Near offices.
• Near college campuses.
Geographic
segmentation
• Age
• Gender
• Income
• Ethnic background, and
family life cycle
Demographic
segmentation
In addition, by introducing
other non-coffee
products, they aimed to
have wider target market
i.e. non-coffee drinkers.
Connoisseurs, highly
educated relatively
affluent, well
travelled and
technologically savvy.
Targeting: Positioning
A specialty premium coffee retailer selling a
wide variety of coffees and other
beverages, both hot and cold, together with
snacks and sandwiches .
A place college students can hang out, study,
write papers, and meet people." 4

5. Business Overview
Location: Hinjawadi , IT Village of Pune located on the NH4 bypass
around the city.
Marketing Strategy:
• “Perfect Cup of Coffee” .
• “Third Place” – for everyone to go to between home and work.
• “Customer Satisfaction” .
• “Brand Marketing” – “word-of-mouth” advertising.
• “Local Social Media Marketing”- a valuable tool for kiosk marketing.
Start-up costs:
TOTAL START-UP COSTS : Rs.13,277,000.
(Kindly refer the attached word file for detailed costs start up
costs.xlsx.docx)start up costs.xlsx.docx
Gross margin for the Kiosk will be about 85%, with operating income
averaging 2.5% of net sales. 5

6. • The company needs to be aware of unavoidable factors in both the micro and macro
environments.
• WEAKNESS: High pricing
We might need to come up with promotional offers at the initial stages till we
communicate our differential advantage to the target market.
• THREAT: Competition
Being a late entrant, we need to pay special attention to wards acquiring the market
share.
In order for the Company to stay at the top:
 it has to maintain its innovative skills
 continue offering new differentiated products
 adhere to its ethical values towards the environment
CONCLUSION:
• Starbucks operates in a business environment which requires excellent brand identity and
reputation to create trust with its internal and external stakeholders.
• The kiosk at the Hinjawadi will surely prove to be a success and is expected to reach the
break-even very soon.
• It will be a new experience for all the people bored of their monotonous coffee-stops. 6

7. Appendix 1:
Start up costs:
• Legal expenses: Rs.75,000.
• Marketing promotion expenses: Rs.2,20,000.
• Insurance (general liability, workers' compensation and property casualty) coverage at a total premium of
Rs.1,32,000.
• Pre-paid rent expenses for one month at Rs.100 per square feet in the total amount of Rs.2,40,000.
• Premises remodeling in the amount of Rs.5,50,000.
• Other start-up expenses including stationery Rs.30,000 and phone and utility deposits Rs.1,30,000.
• The required start-up assets of Rs.80,00,000.
• Start-up inventory of Rs.9,00,000 which includes:
– Coffee beans
– Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc.
– Retail supplies (napkins, coffee bags, cleaning, etc.)
– Office supplies
• Equipment for the total amount of Rs.30,00,000.
– Espresso machine
– Coffee maker
– Coffee grinder
– Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.) -
– Storage hardware (bins, utensil rack, shelves, food case)
– Counter area equipment (counter top, sink, ice machine, etc.)
– Serving area equipment (plates, glasses, flatware)
– Store equipment (cash register, ventilation, signage)
– Office equipment (PC, fax/printer, phone)
– Other miscellaneous expenses
• TOTAL START-UP COSTS : Rs.13,277,000.
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