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Sales & Distribution Coffee
1.
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Assignment Distribution and launch of Coffee product 8/21/2013 Abhijat Dhawal - 80303120011
2.
©Abhijat Dhawal PGDM- 2012-14 About
the company Coffeebean is a coffee distributing and promoting company. Coffeebeanhas a hand in every aspect of the coffee distribution and making process, with business activities ranging from procuring best coffee beans from farmers and marketing of value-added coffee products. We provide value add to coffee by procuring best beans, process beans with standard process and distribution. Product & Service Description PRODUCT DESCRIPTION We have personally researched and sampled each of the following products that we offer to ensure the quality we guarantee. Whole Bean Coffee Espresso coffee Instant Coffee Rost and ground Service Description An important component of our business is not just our products, but our service. In addition to our full service delivery, the following are other important service elements that we will offer to our customers: Ideas to help our customers increase sales through menu development, creative promotions, co-op advertising, and much more. Custom designed marketing material such as printed banners, promotional posters, punch cards, pre-purchased beverage cards, reader boards, etc. Distribute a monthly newsletter featuring the latest coffee trends, new industry equipment, breaking trade news, promotional ideas, new creative recipes, and upcoming events. Samples of the latest product releases - with eye-catching point-of-sale to advertise new items to the end consumer. Routine equipment maintenance and training. Sourcing Wewill purchase coffee beans directly from farmers, from Karnataka. By eliminatingthe broker or "middle man," allows us to operate on high profit margin, while providing our customers with competitive prices.
3.
©Abhijat Dhawal PGDM- 2012-14
Indian Coffee Productivity State/District Post Blossom Forecast 2013-14 Final Estimation 2012-13 Arabica Robusta Total Arabica Robusta Total Karnataka Chikmagalur 41,200 37,360 78,560 37,325 40,300 77,625 Kodagu 24.100 1,10.320 1,34,420 21,300 98,700 1,20,000 Hassan 21.435 14,700 36,135 18,800 13,800 32,600 Sub total 86,735 1,62,380 2,49,115 77,425 1,52,800 2,30,225 Kerala Wayanad 0 59,725 59,725 0 53,475 53,475 Travancore 900 7,250 8,150 975 7,200 8,175 Nelliampathis 1,100 1,575 2,675 1,100 1,450 2,550 Sub total 2,000 68,550 70,550 2,075 62,125 64,200 Tamil Nadu Pulneys 7,210 340 7,550 6,425 255 6,680 Nilgiris 1,800 4,050 5,850 1,625 3,765 5,390 Shevroys (Salem) 3,875 50 3,925 3,450 50 3,500 Anamalais (Coimbatore) 1,300 500 1,800 1,300 500 1,800 Sub total 14,185 4,940 19,125 12,800 4,570 17,370 Non Traditional Areas Andhra Pradesh 7,400 60 7,460 5,890 30 5,920 Orissa 550 0 550 310 0 310 Sub Total 7,950 60 8,010 6,200 30 6,230 North Eastern Region 130 70 200 100 75 175 Grand Total (India) 1,11,000 2,36,000 3,47,000 98,600 2,19,600 3,18,200 Pricing of Coffee Beans Arabica Robusta Exchange Rate Rs./ US $ USCents/lb Rs./kg US Cents/lb Rs./kg 139.72 (138.38) 187.28 (186.43) 98.53 (96.60) 132.07 (130.14) 60.80
4.
©Abhijat Dhawal PGDM- 2012-14 Coffee
Manufacturing Process ROASTING THE BEANS Roasting coffee is considered a chemical process in coffee manufacturing. It’s a technical job. Roasting creates the aroma of the coffee. It changes the acids of the beans through heating. The final result depends upon the experience of the person who manipulates the process. In coffee manufacturing, the roasting takes a little time to finish. It is essential in achieving the “identity” of any coffee brand. The coffee beans do not acquire any flavor. Roasting will turn them from light green to brown. They will release an intense aroma. Roasting will force the hidden oils to come out. The roasting recipe is a great secret formula in coffee manufacturing. It is passed from father to son. The person attending the procedure must be of high responsibility qualities. Different varieties of coffee (Arabica/Robusta) require and different roasting routine. This fact makes an experience roaster a very important person in this business. Roasting time depends on machinery and technology. The process will take approximately up to 20 minutes. Basic roasting steps in coffee manufacturing are: 1. The temperature begins from 100 degrees Celsius (211 Fahrenheit). It will change the coffee beans to yellow. The smell will be like toast. 2. It increases to 180 degrees Celsius (356 Fahrenheit). The coffee beans turn to light brown color. They double in size. The first crack is clearly heard at this point. 3.From this point, further increase of temperature will depend on the flavor recipe followed. It sometimes might rise up to 300 degrees Celsius (572 Fahrenheit). GRINDING THE ROASTED BEANS After the flavor uncovering, coffee beans go to the grinding process. Coffee grinding is a critical step in coffee manufacturing. The proper procedure will lead to improvement of coffee taste. The aroma is naturally preserved. Every type of coffee is ground in a different way. The 5 most used grinds in coffee manufacturing are: 1. COARSE – Particles of coffee look like sea salt (i.e. French press coffee).
5.
©Abhijat Dhawal PGDM- 2012-14 2.
MEDIUM – Like sand in a beach (i.e. Filter coffee). 3. FINE – Like table salt (i.e. Espresso in mocha pot). 4. EXTRA FINE – Like castor sugar (i.e. Espresso from steam machine). 5. TURKISH – Like fine powder (i.e. Turkish style coffee). Usually there is a procedure of selecting same sizes of beans. This will avoid problems in the final texture of the coffee. The grinding should be done in small quantities. PACKING THE GROUND COFFEE Coffee packaging must follow the soonest possible the phases grinding. Keeping the ground coffee fresh on shelves is a serious factor for a successful coffee manufacturing business. The main enemy of fresh ground coffee is oxygen. The correct package must take into consideration this factor seriously. Coffee staling will be subject not only to oxygen contact but also on moisture and sunlight. The most usual package options are: BULK COFFEE – In cans or foil type bags ranging in different weight options (i.e. 250gm.). SINGLE SERVE – Ground coffee sealed in a small filter paper which makes 1 cup of coffee (i.e. Coffee pods, Keuring K-Cups, Tassimo). Technology To streamline the efficiency of our distribution methods, weplan to use the latest in cutting edge technology - not only in the warehouse - but also in the trade. All of our drivers/sales representatives will be equipped with Thinque MSP handhelds and software. Thinque MSP applications will reduce field expenses, decrease day's sales outstanding, and increase worker efficiency. Features can be used in or out of the warehouse and include managing returns and collections; adjusting item price, profit or margin; applying promotional items to an account; streamlining orders; tracking inventory; reducing out-of-stocks; and providing sales history reports. All information recorded in the handheld is available in real time to be viewed by management in the office. Market Analysis Summary
6.
©Abhijat Dhawal PGDM- 2012-14 Coffee
is the second largest commodity market next to oil, and growth is expected to continue at a strong pace for the foreseeable future. The specialty beverage industry is growing at an equally strong pace, with sales growth in some categories projected to grow at rates of 40% per year. This growth offers excellent opportunities for new companies to enter this market, and we are excited about the possibilities of what The Coffee Warehouse can accomplish in the Spokane and Northern Idaho market. Market Segmentation Consumers who enjoy coffee products purchase drinks at restaurants, coffee houses, sports venues, drive-thru espresso stands, and even inside other retail establishments that might feature Industry Analysis The coffee and specialty beverage industry is pulverized, with hundreds of manufacturers, brokers, suppliers and retailers. Unlike the beer/soda industry, with large companies such as Anheuser Busch, Pepsi and Coca Cola controlling most of the market, the coffee and specialty beverage industry does not have large national chains with market control. In an open industry growing at such a strong rate, The Coffee Warehouse is in position to capitalize on the customer's need for quality product, exceptional service, and an effective partner to success.Indian coffee market is of Rs 511crores. Distribution Patterns The following flow chart illustrates the overall industry surrounding the distribution patterns of coffee and specialty beverages. (The Coffee Warehouse falls into the level highlighted in yellow). Several manufacturers are represented by master distributors and/or brokers who in turn provide the product to direct distributors and other wholesale suppliers. Other manufacturers allow distributors and suppliers to purchase product direct - depending on the quantity of product being purchased. Product is then distributed or sold through cash and carry wholesale stores to retail businesses as illustrated below.
7.
©Abhijat Dhawal PGDM- 2012-14 Freight
expense We will procure raw coffee beans from Karnataka and Indian Railways is used to transport the product to manufacturing unit is Hyderabad. Detail of transportation is given below PARCEL RATES PREMIER PARCEL RATES SCALE- P Weight of the Parcels Distance slabs 1- 10 11- 20 21-30 31- 40 41- 50 51- 60 61- 70 71- 80 81- 90 91-100 Kgs. Kgs. Kgs. Kgs. Kgs. Kgs. Kgs. Kgs. Kgs. Kgs. (Kilometres) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) 1 2 3 4 5 6 7 8 9 10 11 501 - 510 7.85 15.70 23.55 31.40 39.25 47.10 54.95 62.80 70.65 78.50 Distribution Network 1. Company will have C&F in Hyderabad, Chennai and Delhi 2. From Hyderabad Company will distribute the coffee packets in bulk to each part of AP with the help of delivery truck. Replenishment will be done at every 15 days. 3. Replenishment to C& F will be done on monthly basic. Competition & Buying Patterns There is no much intense competition in the industry. Most importantly, there is room for new business that understands the need for high-quality service and sales support - in addition to product at competitive prices.
8.
©Abhijat Dhawal PGDM- 2012-14 In
this industry, customers choose their suppliers based on available product, price, and service - though most often, it is the service that suffers most. While one supplier may offer the product at the right price, they do not provide the level of service that the customer demands. By positioning ourselves in the market with in-demand, quality product at competitive prices, with a consistent high level of customer service - we are confident that we will see customers and their business continue to increase Sales and Marketing The unique aspects of our business include individual product selection, quality assurance, and high-quality full service distribution. Our strategy is to focus 100% of our efforts on good quality service. By focusing all of our effort and energy on this particular area, we expect to quickly develop and maintain a leadership position. The Coffebeanwill offer the best, most highly personalized service in the marketplace. Being a small, owner-operated company, we intend to use this to our advantage to be absolutely certain that every one of our customers receive excellent service. We will go out of our way to make sure that our customers know that they truly matter to us. Sales reps and in-house personnel who deal with customers will be carefully trained and given wide latitude for insuring that customers are always satisfied. Marketing Strategy Our basic marketing strategy is to work with customers on a one-to-one basis to ensure their supply needs are being met and help develop unique marketing programs for each of them. We intend to prioritize customer service and make it a key component of our marketing programs. We believe that providing our customers with what they want, when and how they want it, is the key to repeat business and positive word-of-mouth advertising. Because we want to develop close working relationships with our customers, we want to establish accounts in as personable a way as possible. It is for this reason that we will overwhelmingly emphasize in-person sales calls to build accounts. We will closely integrate all of our marketing and sales efforts to project a consistent image of our company and a consistent positioning of our products and services. We will build this image around our name "The Coffeebean." and emphasize to customers the high-quality service that is behind this name. To support our marketing initiatives and product knowledge, we will attend as many area conventions and trade shows as possible to ensure we are offering the most up-to-date market trend information.
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©Abhijat Dhawal PGDM- 2012-14 IMC
Budget Particular Details Cost in Rs Website Hosting – 5000 20000 Designing – 15000 Phone application Hosting – 5000 15000 Designing – 10000 Offline events Events – 50,000 200000 Promotions – 1,50,000 Consulting-50,000 120000 Events-60,000 Promotions-10,000 Total 355000 Distribution Strategy of Distributor to retailer We will operate two delivery trucks with a third vehicle for special deliveries between scheduled delivery days. Deliveries will be made Monday through Friday, and will be strategically routed to minimize travel time and fuel costs - while maximizing production. On average, we will service 20-30 accounts per day, with deliveries to each account twice a week. As the number of accounts increase, the need for additional delivery trucks will continue to be evaluated. With each additional delivery truck, routes will be restructured to maintain maximum efficiency. Sales Strategy Phoned Orders: Customers can easily phone orders into our office, up until 2:30 p.m. of the afternoon prior to their scheduled delivery day. Faxed Orders: Customers can fax in a completed product order sheet, with the same deadline as phoned orders. Tel-Sell: Customers may choose to have a representative from the office call them the day prior to their scheduled delivery to check product quantities and assist them in placing their order. We understand the hectic schedule of a small business, so if a customer fails to call or fax their weekly order, they will receive a courtesy call from our office to verify that an order is not needed.