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Entrepreneurship

Submitted To:
Mr. Vimal Jaisawal

Submission Date: Submitted By:


3rd Mar 2011 Himanshu Gaurav
Roll no. 23
MBA(IB)

Institute Of Management Studies


University Of Lucknow
Contents
Executive Summary

Business & Industry Profile

Organization & Insurance

Competition & buying patterns

Business Strategy

SWOT Analysis

Competitive Edge

Sales Strategy

Products & Services

Product Line

Organizational Structure

Marketing Strategies

Promotion Strategies

Positioning Strategies

Pricing

Cost Analysis

Mode of Payment
Executive Summary

The Coffee Brake is a new coffee shop in the Valencia Town. The café will be known
for different flavors of coffee. In addition, light snacks and sandwiches will be
offered to customers. The café establishment will play modern music for ambiance
and provide free wireless internet access for patrons to attract professionals in the
nearby business areas. The mission of Coffee Brake is to provide high quality
products and services in a warm and inviting environment.

The café will serve a variety of coffees, including gourmet blends, nestle and
espresso. Other available beverages, such as soda and juice, will also be available.
The café will also search deli-style sandwiches with the freshest ingredients,
muffins, and other tasty treats.
Business and Industry Profile

Description of the business:

Coffee Brake is determined to become a daily necessity for local coffee addicts, a
place to dream of as you try to escape the daily stresses of life and just a comfortable
place to meet your friends or to read a book, all in one. With the growing demand
for high-quality gourmet & roasted coffee and great service, Coffee brake will
capitalize on its proximity to the Valencia Society to build a core group of repeat
customers. Coffee brake will offer its customers the best prepared coffee in the area
that will be complimented with pastries, biscuits, snaks as well as free books that its
patrons can read to enjoy their visit.

Industry Analysis:

A coffee business provides unbelievably high profit margins, more than most other
types of businesses. It is estimated that a cup of coffee can generate upwards of 50%
in profit. The great thing about a coffee business is that, though cyclical as people
will consume less hot drinks during the summer, it is nevertheless becoming more
common for people to drink coffee even in the summer.

Recent trends have shifted from ordinary coffee to more speciality coffees. This
trend has partly been emphasised by Starbucks, which recently announced a project
to open 40,000 new stores worldwide. There is no doubt that new coffee culture is
brewing and one that bodes well for new entrants in the market.

Coffee consumption has shown a steady 2.5% growth rate in the India over the last
decade. In 1994, total sales of coffee were approximately 7.5 billion with gourmet
coffee representing 33% (or 2.5 billion) of that. The retail coffee industry is
flourishing in the India. At the same time, hot dry summers drive people into cafes
to order iced drinks. Further, coffee has really become a part of the lifestyle in the
high society of India. Its discerning coffee drinkers are in favor of well-prepared,
strong coffee-based beverages, which they can consume in a relaxing environment

Vision Statement:
The perfect cup…

Mission Statement:
To provide a friendly, comfortable atmosphere where the customer can receive
quality food, service and entertainment at a reasonable price.
Keys to Success:
The keys to success will be:

• Store design that will be both visually attractive to customers, and designed
for fast and efficient operations.
• Employee training to insure the best coffee preparation techniques.
• Marketing strategies aimed to build a solid base of loyal customers, as well as
maximizing the sales of high margin products,

Targeted Market and Customers:


My customers will be students, adults, Married peoples (males & females) and
Employed persons.

Location
The Coffee Brake will be located in the :

Gol Market, Mahanagar, Lucknow(U.P.)

Location Criteria:

• 2700 Square feet


• Open and clear road
• In a good society
• Have good location
• Less cost in the form of rent

Competitors

• Main competitors in Lucknow


• Café coffee day
• Barista Lawazza
• The Coffee Shop
• Nescafe
• Royal Café
Competitive advantage

The main competitive advantage of the Coffee Brake is its menu. No other café
offers a full range of food, beverages, and treats to go along with their connectivity.
Coffee Brake will offer only the best quality products and service to its
customers.The Coffee Brake other competitive advantage is its location.

Buying Patterns:
The major reason for the customers to return to a specific coffee bar is a great
tasting coffee, quick service and pleasant atmosphere. Although, as stated before,
coffee consumption is uniform across different income segments, Coffee bar will
price its product offerings competitively. We strongly believe that selling coffee with
a great service in a nice setting will help us build a strong base of loyal clientele.

Business Strategies:
Coffee Brake marketing strategy will be focused at getting new customers, retaining
the existing customers, getting customers to spend more and come back more often.
Establishing a loyal customer base is of a paramount importance since such
customer core will not only generate most of the sales but also will provide favorable
referrals.

SWOT Analysis
Strength
High quality
Reasonable price
Best taste
Good location
Weaknesses
Load shedding
No brand
Unawareness
Opportunity
No direct competitor in the same area
Job opportunity for locals
The initiator in the selective area
Caters
Threat
Economic condition
Political instability
Local restaurants

Competitive Edge
Coffee bar will position itself as unique coffee bar where its patrons can not only
enjoy a cup of perfectly brewed coffee but also spend their time in an ambient
environment. Comfortable sofas and chairs, dimmed light and quiet relaxing music
will help the customers to relax from the daily stresses and will differentiate Coffee
Bar from incumbent competitors.
Focus on the quality of product and as well as customer satisfaction.
Warranties:
If the customer has a complaint, everything will be done to satisfy them. If that does
not work, the customer will be given their order free of charge.

Sales Strategy:
Coffee Bar baristas will handle the sales transactions. To speed up the customer
service, at least two employees will be servicing clients--while one employee will be
preparing the customer's order, the other one will be taking care of the sales
transaction.
In order to build up its client base, Coffee Bar will use banners and fliers, utilize
customer referrals and cross-promotions with other businesses in the community.
At the same time, customer retention programs will be used to make sure the
customers are coming back and spending more at the coffee bar.
Products and Services
Coffee Bar will offer its customers the best tasting coffee beverages in the area. This
will be achieved by using high-quality ingredients and strictly following preparation
guidelines. The store layout, menu listings and marketing activities will be focused
on maximizing the sales of higher margin. Along with the espresso drinks, brewed
coffee and teas, as well as some refreshment beverages, will be sold in the coffee bar.
Coffee bar will also offer its clients pastries, small salads and sandwiches. For the
gourmet clientele that prefers to prepare its coffee at home, Coffee bar will also be
selling coffee beans.

Product Description

Coffee Brake will offer high quality coffee, tea, hot coca, and cappuccino, at a very
reasonable price.

We will also sell homemade cookies, brownies, and doughnuts, also reasonably
priced.

Features

All drinks will be made with filtered water and the highest quality ingredients we
can get.

Frozen drinks will have caramel or chocolate syrup drizzled in the glass and over the
drink. Cappuccino and hot coca will have whipped cream toppings as well as the
option for candy sprinkles. Cookies will have the option of a chocolate or caramel
dip and sprinkles.

We will offer designer flavored cream and five kinds of sweeten, i.e. sugar, honey
Equal, Splenda, and Sweet-n-Low. Cream and sweetener is at no extra charge.

Uniqueness
The menu offerings will be supplemented by free books and magazines that
customers can read inside the coffee bar.
Product Line

Hot Coffee
Cappuccino Coffee
Dry Cappuccino
Black Coffee
Icy Coffee
Cold Coffee
Russian Coffee
Freeze dried coffee
Russian Tea
Green Tea
Simple Tea
Cold Tea
Cakes & Pasties
Snaks & Biscuits
Beverages

Organizational Structure

Our organizational structure will be a simple pyramid style with the owners putting
in as much work as the employees.

Management Team:

It’s a partnership project. There are five persons who will manage all the
responsibilities of the coffee bar.

Staffing:

We will hire two persons for home free delivery and two waitress, these will be
recruited from the local community.
Labor Market Issues:

In this area there are many students looking for work, part time or full time, we
want to fill their needs.

Regulatory Issues:

Somewhere in India have regulations regarding food service establishments. We


have already obtained the appropriate business permits.

Marketing Strategies
Indian coffee consumption has shown steady growth, with gourmet coffee having
the strongest growth. Coffee drinkers in the Lucknow are among the most
demanding ones. They favor well-brewed gourmet coffee drinks and demand great
service. Coffee bar will strive to build a loyal customer base by offering a great
tasting coffee in a relaxing environment of its coffee bar located at their location.
Market Segmentation:
Coffee bar will focus its marketing activities on reaching the University students and
faculty, people working in offices located close to the coffee bar and on sophisticated
teenagers. Our market research shows that these are the customer groups that are
most likely to buy gourmet coffee products.

Target market

The customer will be between 18 to 55 years old. The income level is between
Rs300000 and Rs1000,000 per year.
Total population of Lucknow= More then 5 million
Targetted population= more then 2 million

Economic Profile:
Middle Class
Upper Middle Class
Privileged Class

Age Groups:
Teenagers 16 - 19 years Young
Adults 19 – 25 years
AdultS 25 – 50 years
Mature 50 and above
Professional Classification:
Students
Young Professionals
Mature Professionals
Retired

Target Market Segment Strategy:


Coffee Bar will cater to people who want to get their daily cup of great-tasting coffee
in a relaxing atmosphere. Such customers vary in age, although our location close to
the colleges & schools (Montford school & IT college is nearby) means that most of
our clientele will be students and faculty. Our market research shows that these are
discerning customers that gravitate towards better tasting coffee. Furthermore, a lot
of college students consider coffee bars to be a convenient studying or meeting
location, where they can read or meet with peers without the necessity to pay cover
charges. For us, this will provide a unique possibility for building a loyal client base.

Promotion Strategy
Coffee Bar will use several ways to reach new customers. We will leverage
universities, community organizations, print ad, internet advertising and word of
mouth.
1. Advertising--We'll be developing our core positioning message: "On-Site
Roasted Coffee, Made to Order." to differentiate our service from the competition.
2. Postcards—Coffee Bar will employ targeted mailings to our customer base.
These postcards will announce Grand Opening Specials.
3. Internet Advertising--As customers come in, they will be asked if they wish to
sign up on our internet mailing list. Special promotions will be available only
through Internet "coupons."
4. Media—Coffee Bar will work with local media on several different "story of
interest" venues.
Marketing Plan
We will build our marketing plan around the four P's of marketing. They are:
Price - The Coffee Brake will be known for its competitive prices for food and
Internet service.
Product - The Coffee Brake will offer a wide variety of food, beverages, and treats.
Only the highest quality items will be sold.
Place - The Coffee Brake will be located in the Gol Market, Mahanagar. A great
place for food, fun, and entertainment.
Promotion - The Coffee Brake will be promoted in a variety of ways.

Marketing Programs
The programs Coffee Bar will initiate are depicted on the following graphs. These
programs support the soft needs and product offerings listed in the Marketing
Strategy section, and have been transliterated into "Vision Focus" and "Customer
Focus" programs.
Vision Focus

1. Community Involvement
o Community Reinvestment
2. Relaxing Environment
o Product Offerings
o Speakers and Entertainment
3. Welcoming Environment
o Vision Communication

Positioning Statement
For the community who needs a place to seek, have fun, relax, and enjoy quality
beverages, Coffee Bar is a place to feel welcome, special, informed, and energized.
Coffee Bar meets the needs of this market. Unlike the other coffee shops in the
metro area, Coffee Bar has character and a purpose.
For the neighborhood, Coffee Bar brings a positive message with a community
centered focus. This is a place where all are welcomed and embraced with a warm
greeting and hot coffee. The look and feel of the shop will ensure that anyone who
walks through the door feels right at home. We want our customers to learn about
coffee, and experience quality first hand.

Pricing:

We have to take 30% profit of from each cup.

We have done extensive research regarding pricing for the Coffee. We have polled
local and regional cafes, as well as look at national statistics on coffee and sandwich
pricing. Through menu analysis, we have planned menu pricing accordingly. All
prices take into consideration the cost of material, 25% for food and 45% for
beverages.

Coffee will be sold in three sizes, with prices ranging from Rs.40 to 100. Flavors will
be available at an additional charges.

Chocolate and Pineapple cakes will be sold by the half slice. Prices range from Rs.25
to 45. Whole cakes will be available for purchase in a price range of Rs.250 to 1000.

Sandwiches will be sold for various prices, depending on the meat chosen. A veggie
sandwich will be the lowest priced sandwich at Rs.35.

All soft
Products Price drinks and
Hot Coffee 40 juices will
be sold for
Black Coffee 30 different
prices.
Roasted Coffee 110
Cappuccino Coffee 70 Cost
Dry Cappuccino Coffee 80
Russian Coffee 100
Icy Coffee 90
Cream Coffee 50
Cold Coffee 80
Dried Freeze Coffee 120
Normal Tea 15
Green Tea 50
Russian Tea 70
Cold Tea 60
Analysis:
For one day which exhibited on 3rd March 2011.

Purchase:

Prices
Raw material
Milk 490

Coffee 343

Cream 110

Sugar 120

Mineral water 90

Tea bags 110

Dry milk 175

Disposable cups 300

Disposable plates 100

Disposable sticks 40

Machine rent 3000

Other expenses 530

cakes 960

Marketing Expense 700

Total 7068

Sale:
Hot Coffee 4000
Cream Coffee 4350

Tea 435

Almond Cake 375

Pineapple Cake 425

Chocolate Cake 510

Total 10095

Difference:

Total Earning 10095


Total Expense (7068)
Profit 3027

Feedback

The Coffee Brake will use two methods to measure customer satisfaction. They
include:

Comment Cards:

With each purchase, customers will receive comment cards to fill out. The cards will
have questions about quality, speed of service, attitude of the employees, and overall
satisfaction from the experience.

Personal Interviews:

On a daily basis, we will stop and speak with customers to ask them about our food,
drinks, and service. We will give out 25% off coupons to people who give us "honest"
answers.

Mode Of Payment

Bank Loans- 60% of the capital

Self Financed-40% of the capital