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Is Chaat Business gaining momentum? A Case study of Pani Puri
Sales at Davangere City
Dr. Laxmana P1 and Smt. Kavitha S2
Abstract The current study is an effort to study the status of
Pani puri business in Davangere district of Karnataka state. Broad
objective of the study is to examine the functioning of Panipuri
business and level of success in Davangere district. To know socio
economic status of Chaat vendors background information has been
collected along with the financial information such as working
capital required for the business, daily turnover, profitability of
the business and problems faced by the vendors in the district. At
the same time information is collected from customers also to know
the preferences of customer and spending of the customer. Overall
study concluded that Panu puri chaat business has become a bread
earner and livelihood for few families. And it is set to flourish
in the coming days as the craze of the customers towards chaat
items is ever increasing. Key words: socio economic status, working
capital, profitability, turnover, livelihood Introduction Growing
economy and changing life style of consumers have changed Indian
food market drastically. Reports indicate that Indian food market
is set to double by 20253. Study by Mckinsey (2008) on Indian food
market has revealed that food consumption in India is expected to
grow from $155 billion to $ 344 billion4. Study highlighted that
urban consumers consume 10 times more snacks than rural counter
part. Among the regions, western counterparts topped and loved
snacks more followed by northern region counterparts. Organized
Indian snack market is expected to grow at the rate of 15-20% by
year; and caters to the tune of 50% of the market share. However
unorganized sector is worth $1.56 billion and is growing at the
rate of 8%.
1 Chairman, Department of Commerce,Davangere University, India 2
Assistant Professor, Manipal University, Bangalore, India 3 The
times of India, (2008),Indian food market set to double by
2025,29th July, available at last access on 26th, may 2009) 4
Ibid
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Estimated total snack market in India is worth $ 3 billion5.
From the data monitor survey (2008), Indian savory snack market has
grown with CAGR of 4.4%, and grew by 4.5% in 2008. Further, entire
snack market in India is segmented in to 5 types i.e. popcorn
(0.6%), nuts and seeds (3.30%), processed snacks (0.80%), potato
chips (9.30%) and other savory snacks(85.90%). As per the survey,
Japan dominates snack market with market share of 60%, while India
has a share of 12.40% of total Asia specific snack market. Among
the several savory snacks, Pani Puri chaat happens to be one of the
popular snacks in India
With increasing working population across the globe, people have
developed the so called habit of eating outside. Food products
which can be prepared and served quickly have started gaining
importance. In the modern context, such foods are termed as Chaat
or junk foods which are normally served along the street side.
Chaat has become buzz word among teenagers and others as it waters
mouth and is available at affordable price. It is so popular that
it has been tasted in one form or the other by every Indian. It
acts as a substitute for intake of evening snacks. The purpose of
consumption is to enjoy the taste and is not meant to be consumed
as a main meal of the day, rather a food that supplies brief
energy. This is an era research has proved that there is an
increasing trend of consumption of such items and consumers have
started spending more. Though such items are not conducive for
maintaining a balance diet, yet there is demand as it triggers the
taste buds of consumers. These chaats are perceived to be of low
quality and unhygienic. However, mixture of sweet, sour, spiciness,
crispiness and availability of different flavors make the chaats
more popular. Moreover, researcher has found out through
preliminary observation that there is a good opportunity in
Davngere city for street vendors pani puri chaat business and
researcher conducted survey in the month of February 2015 to know
the prominence of pani puri chat business in Davangere city.
Different items under pani puri chaats include Maslala puri,
Sevpuri, Behlpuri, Kachori, Alupuri, Kachori double, Dhaipuri,
Samosa, special pani puri, Mixture. Among the chaats, pani puri is
found to be more popular when compared with other chat items of
pani puri. All these items are prepared by four main ingredients
i.e. pani, puri, sev and masalas. Using these four ingredients
different variants are made available to customers
5 ibid
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Table 1: Varieties of Pani Puri Chaat
Items Number of customers
Panipuri 21
Masala 15
Sev 10
Bhel 10
Kachori 10
Alu 9
kachori.double 8
Dhai puri 8
Samosa 6
Mixture 1
Others 2
Total 100
Source: Survey Data
Chart 1: Varieties of Pani Puri Chaat
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21%
15%
10%10%
10%
9%
8%
8%
6% 1%2%
Customer preference towards itemsPanipuri Masala Sev Bhel
Kachori Alu
k.double dhai puri Samosa Mixture Others
Background Street foods have always been prevalent and through
out the country. As these food items are inexpensive and somewhat
nutritious, play a significant role in catering consumers who feel
hungry in the evening. These consumers however may belong to
different social economic strata and longer commuting distance
between their residence and office gives an opportunity for such
businesses to flourish. Once upon a time Davangere was known as
Manchester of Karnataka as cotton textile mills were booming in
Davangere city. Big players such as Davangere Cotton Mill,
Chandrodaya Mill, Anjaneya Mill etc., were found to be very
productive during 1970s. However, due to internal management
problems and lack of competency, companies could not continue their
business. Of late, Davangere city is known for good educational
institutions and running small businesses. Among the small
businesses, pani puri business is slowly gaining momentum.
After interacting with pani-puri vendors in Davangere city it
has been found that there are around 128 chat vendors. Majority of
the vendors are coming from local Davangere city and a few are from
interior Rajastan. These vendors are from a very poor family, and
chaat business is the main source of income and livelihood. Being
lowly educated, they belong to macro sized families in the range of
3-6 members and have settled in Davangere for more than 6
years.
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Table 2: Educational background of Pani Puri Chaat Verndors
Educational background
No. of vendors
Illiterate 4
1st 5th standard 28
5th -10th standard 74
10-15th standard 22
15th and above standard 0
Total 128 Source: Survey Data
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Chart 2: Educational background of Pani Puri Chaat Vendors
Illiterate3%
1st 5th standard
22%
5th -10th standard
58%
10-15th standard17%
15th and above
standard0%
Educational backgroung of vendors
Table 3: Family Size of Pani Puri Chaat Vendors
Size of the family
Number of Members in the family
below 3 members 5 3-6 members 71 6-9 members 51
9 and above 1 Total 128
Source: Survey Data
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Chart 3: Family Size of Pani Puri Chaat Vendors
Table 4: Residential Status of Pani Puri Chaat Vendors at
Davangere
Resident of Davangere
No of vendors
Less than 2 years 11
2-4 years 21
4-6years 29
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More than 6 years 67
Total 128 Source: Survey Data
Chart 4: Residential Status of Pani Puri Chaat Vendors at
Davangere
Further, initial survey feed back reveals that 80% of the
vendors are undertaking chaat business on full time while 20%
consider this part time business. Along with the chat business,
part time vendors are found to engage themselves in businesses such
as running milk parlors, news paper agencies, vegetables vending
etc., they work in a group, which consists of minimum of 2-3
members who normally belongs to same family. Outdoor activities are
executed by men, who are involved in procuring ingredients from the
near by markets such as new Davangere market and old Davangere city
market. However, indoor activities such as preparing sev, puri,
pani, masala items are done by men or women at home. Chat vendors
residence are normally located 1 or 2 kilo meters away from their
place of business, so that they can come in time (4.30PM) and go
late night (11.00PM). Vendors are in the age group of 30-40 years
and these people actively participate in purchase, preparation and
distribution of chaat items. During daytime, preparations such as
pani, puri and masalas are done at home. As these chaat items are
popular through out the week, chaat vendors witness no holidays. In
case of emergency holidays are availed by internal adjustment.
Table 5: Type of work and Pani Puri Chaat Vendors
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Type of work
Number of vendors
Full time 103
Part time 25
Total 128 Source: Survey Data
Chart 5: Type of work and Pani Puri Chaat Vendors
Table 6: Age details of Pani Puri Chaat Vendors
Age of the vendors
Number of vendors
10-20 0
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20-30 49 30-40 63 40 and above 16
Total 128 Source: Survey Data
Chart 6: Age details of Pani Puri Chaat Vendors
Investment and Profit Chaats vendors are found to be wide spread
in prominent areas of Davangere. They are seen in places such as
Ram & Co circle, gundi chowtry, mandi pet, PB Road, PJ
extension, anjaneya lay out, old market Road, New market road, Moti
circle, lawyer road, MCC colony, SS layout, dental college road
etc., Such business are started using own personal finance or
raising funds from private money lenders. It was also observed that
majority of the chaat vendors are mobile and invested on an average
of Rs. 15,000-Rs. 20,000 as set up cost. This cost includes
ingredient carrier (mobile), plates, cups spoons, stools, stove,
bucket, polythene bags and vessels etc. However, working capital is
ranging from Rs 1,000-Rs 2,000 per day. Working capital is used for
procuring vegetables and provisions. Daily turnover is in the range
of Rs.2, 000 to Rs.3, 000. Mobile chaat vendors generally tend to
earn a profit of 10-15% on their investment. The unit profit varies
from Rs. 2 to Rs.3.
Table 7: Investment details of Pani Puri Chaat vendors
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Investment (set up cost)
Number of chaat vendors
Rs.5000- Rs.10000 12
Rs.10000- Rs.15000 31
Rs.15000- Rs.20000 74
Rs.20000- Rs.25000 9
More than Rs.25000 2
Total 128 Source: Survey Data
Chart 7: Investment details of Pani Puri Chaat vendors
Table 8: Working capital Details of Pani Puri Chaat vendors
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Working capital per day
Number of Chaat vendors
Rs.1000-Rs.2000 84
Rs.2000- Rs.3000 25
Rs.3000- Rs.4000 18
Rs.4000- Rs.5000 1
> Rs.5000 0 Total 128
Source: Survey Data
Chart 8: Working Details of Pani Puri Chaat vendors
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Table 9: Daily Turnover of Pani Puri Chaat vendors
Daily turnover
Number of Chaat vendors
Less than Rs. 1000 5
Rs.1000- Rs.2000 38
Rs.2000- Rs.3000 66
Rs.3000- Rs.4000 12
Rs.4000 and above 7
Total 128 Source: Survey Data
Chart 9: Daily Turnover of Pani Puri Chaat Vendors
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Table 10: Pani Puri Chaat Vendors Profit Margin Details
Profit Margin per annum
Number of Chaat vendors
Less than 10% 1
10%-15% 79 15%-20% 23 20%-25% 20 More than 25% 5
Total 128 Source: Survey Data
Chart 10: Pani Puri Chaat Vendors Profit Margin Details
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Table 11: Type of Vending Shop
Type of shop
Number of vendors
Mobile 101 Non Mobile 27 Total 128
Source: Survey Data
Chart 11: Type of Vending Shop
Ingredients Required ingredients to prepare pani puri chaats
includes, puri, boiled potato, green lentils, tamarind chutney,
masala items, pudina water, sweet water, Black pepper powder, Black
Salt , clove powder , Cumin powder , Lemon juice masala paste etc.,
these ingredients vary based on the choice of the customers.
However, the base item/ingredient remains to be the same across all
the items of pani puri chaat that is masala.
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Operational Activities Chaat providers are expected to focus on
quality and varieties to attract customer. It is found that minimum
of 3 people are required to execute the task of preparation and
distribution of chaat to customers. One is required to take the
orders, 2nd one is required for preparing the chaat , 3rd one for
serving ,cleaning and washing the plates. Waiting time observed is
1-5 minutes. Normally pani puri chaat business starts from 5.30 PM
till 11.00PM. On an average vendors cater to 50-75 customers per
day. Very few vendors were found providing catering services.
Procurement of vegetables, Masalas and puris for the day is
prepared in the morning. On demand of the customers parcel services
are also provided. The ratio of spot/parcel order is in the range
of 10:2. Non-mobile vendors are found to occupy space 150 -250 sq
feet by paying rent in the range of Rs. 500-Rs. 800.
Chart 12: Frequency of Catering
How often catering is provided
Number of vendors
Daily 0 Weekly 30 Fortnightly 45 Monthly and more than that
53
Total 128 Source: Survey Data
Chart 12: Frequency of Catering
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Table 13: Spot and Parcel Order of Pani Puri Chaat
Shops Spot order/
Parcel
Market Road 10:2
Mandi pet 10:1
Ram & co Circle 10:3
Gundi choultry 10:3
Source: Survey Data
Table 14: Daily Visitors to Pani Puri Chaat Shops
Daily customers
Number of vendors
Less than 25 3
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25-50 27 50-75 58 75-100 38 More than 100 2
Total 128 Source: Survey Data
Chart 14: Daily Visitors to Pani Puri Chaat Shops
Consumer Profile Many of the customers go for pani puri rather
than any other chat items. Individual chaat consumers are very few
however most prefer to go with family members or friends. It is
observed that target consumers belong to the age group of 18-30 and
most of them come from middle class. Irrespective of occupation,
all classes prefer chaats. During weekdays, it is found that
working people dominate chaat centers while weekends family members
are found dominating. It is observed that weekend business is more
when compared to week days. And found that 25% of business comes
from weekends. On an average consumers are found to spend
Rs.100-Rs.200 every month and their frequency of visit is
restricted to once in fortnight at least and it is also observed
that many of the customers try new items.
Table 15: Average sales in a week (Week days and weekends)
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Shops Average sales per day,
per shop
(Monday Saturday)
Average sales on
weekend, per shop
(Sunday)
Market Road 75 (plates) 100(plates)
Mandi pet 50(plates) 75(plates)
Ram & co Circle 90(plates) 120(plates)
Gundi choultry 100(plates) 130(plates)
Source: Survey Data
Table 16: Daily Spending of the customers on Pani Puri Chaat
Amount
Number of
customers
Less than 100 10 100-150 80 150-200 80 more than 200 10 Total
100
Source: Survey Data
Chart 16: Daily Spending of the customers on Pani Puri Chaat
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Inventory Maintenance Most of the business require inventory for
their operations and pani puri is not exceptional. This business of
pani puri calls for inventories such as sev, Puri, maslals and
vegetables. The survey feed back has prompted us that vegetables
are procured once in a week and leafy vegetables are procured daily
basis and stocked in refrigerators. Special care is taken for
inventory such as sev and puri to stock them under air proof
polythene bags to maintain crispiness and crunchiness. These
factors are vital for delivering quality chaats to customers. Other
ingredients procured on monthly basis. Strategies It is found that
each vendor has unique and distinct strategy to attract customers.
Prices are found to vary among vendors. However, the variation
observed is small and is in the range of Rs.2- Rs.4 and spot orders
are more than parcel orders. By buying ingredients in bulk and
through better negotiations, vendors are able to control cost and
improve profit margin. Some vendors stand tall themselves from
others by providing quick services, thereby reducing waiting period
while others back on hygiene perspective. Even size of the puri and
stuff that goes into puri becomes discerning factor for some of the
chaat vendors. Some vendors even try new assortments to attract
customers. Welcoming guests providing seating arrangements, extra
pooris for kids and loyal customers, forgoing changes are some of
the strategies adopted by smart vendors. And also pani is given as
complementary for the entire customer. Vendors are also found to
target prominent places of public and book their places to cater to
customers.
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Table 17: Rate Details of Pani Puri Items at different places at
Davangere
Items Price at
Market
Road
Price at
Mandi
pet
Price at
Ram &
co Circle
Price at
Gundi
choultry
Price at
Nituvalli
Pani Puri 5 5 7 6 6
Masala Puri 7 7 10 10 10
Sev Puri 8 8 12 10 10
Alu Puri 8 8 10 10 10
Dahi Puri 8 8 10 10 10
Tamoto Puri 8 8 10 9 9
Kachori (single) 7 10 12 11 11
Kachori (double) 14 - - - -
Bhale puri 8 9 12 9 9
Mixure 12 11 12 10 10
Source: Survey Data
Competition Competition is all pervasive, and hence pani puri
vendors are not spared. Other small busines such as mirchi, vada,
mandakki (pava), samosa, chips, rajstani chaats, dosas ,idlis gobi
manchuri specials, fish fries, omelets, noodles etc.,. Are also
into the business of providing brief supply of energy during
evening time. As hunger can be met in different ways all generic
businesses eye on the valet of customer. However, it is learnt that
competition is not so stiff between the players of Pani Puri.
Simple reason is that two same vendors do not converge at the same
location. It may be a lobby to send the other similar vendor to
different locations so that their businesses are not hampered.
Some Problems faced by Pani Puri Chaat Vendors Unavoidable Roll
calls: Local area police demand unceremoniously each day
commission/haftha from chaat vendors.
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Biting Competition: Now-a-days many mirchi-mandakki shops are
coming-up in Davangere and the items are available at cheaper rates
than pani-puri items. Many people are tempted to purchase and eat
mirchi mandakki than pani puri chaats. Problem of Nomads: Mobile
chaat vendors are not allowed to keep their mobile tripods/easels
in front of any shops. Since people jam their places and
shopkeepers feel like their places get polluted, mobile chaat
vendors always forced to search for new places to run their
business. Conclusion From the above discussion it can be concluded
that pani puri chaat businesses has become a bread earner and
livelihood for few families. It is set to flourish in the coming
days as the craze of the customers towards chaat items is ever
increasing. As working women population is on the rise,
affordability of the family has increased giving an opportunity for
such businesses to flourish. Moreover, chaat business can be
enabled with low investment and low skills. Though quality and
hygiene factors are of at most importance, pani puri businesses in
Davangere is yet to realize these aspects in totality. Meanwhile
variants are many; it can be targeted for all segments of the
population. As evenings are some sort of get together for youths
and working population, it has become a trend to hang around chaat
centers. References: Guptha, R. (2008), Indian food market set to
double by 2025 The times of India, 29th July, p. 5. Makgosa, R. and
Mabalane, N. (2011) Fast food purchase behaviors in Botswana- an
exploratory study, Indian Journal of Marketing, 41, pp. 23-30. Pani
Puri, http://www.eatoutzone.com/PaniPuri.htm (Accessed 4
February,2015) Street Food in India,
http://www.bharatonline.com/travel-tips/street-food.html( (Accessed
2 February,2015)
Appendix: Research data through questionnaire Phase 1 (for
vendor) Name: Sex: Age: Education: Address of the shop: 1. Items
prepared by vendors?
a) Panipuri b) Masalapuri c) Sevpuri d) Bhelpuri e) Kachori f)
Alupuri
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g) Kachori double h) Dhaipuri i) Samosa j) Mixture k) others
_______________
2. Which one sold more? Rate the above items? 1st, 2nd, 3rd,
basis
a) Panipuri b) Masalapuri c) Sevpuri d) Bhelpuri e) Kachori f)
Alupuri g) Kachori double h) Dhaipuri i) Samosa j) Mixture k)
others _______________
3. What is the initial investment?
a) 5 10 K b) 10 15 K c) 15 20 K d) 20 25 K f) 25K >
4. Daily turnover?
a) 25%
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7. Job of vendor full time or part time?
a) Full time b) Part time If part time please mention what other
occupation u do in day time ____________________
8. Details of the inventory stock?
a) Puri b) Sev c) Chat masalas d) Vegetables e) Others
9. What are the precautionary measures do you take for your
inventories to keep in
taste? a) ------------------------ b)
----------------------------- c) ________________________ d)
________________________ e) __________________________
10. Whether do you buy the things or you only prepare which is
required for pani puri preparation?
If you buy please mention the name of the things and from where
_________________________________ How often do u buy items which is
required for chat _______________ If u prepare please mention the
name of the things____________________________--
11. How many Number of customers daily visit to shop?
a) < 25 b) 25 50 c) 50 75 d) 75 100 e) > 100
12. What is the ratio of existing & new customers?
a) 1:1 5:1 b) 5:1 10:1 c) 10: 1 15:1 d)15:1 20:1
e) >20:1
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13. What is the community of vendor? ________________--
14. You are from which place? ______________
15. What made you to start this business?
___________________
a) Less investment b) interest c) support from somebody b)
Other__________
16. What are the unique strategies used by the vendor to sell
their items?
a) Taste difference b) Quantity c) Cleanliness d) others
1._________ 2.___________ 3._____________
17. Business started individually or partnership? If in
partnership, then with whom
18. Vendor has only one shop or more than one, If so, where is
the location & why? Please mention the location of the
shop__________ What is the reason for choosing this place?
_____________ If you have more than one shop, please mention the
name of the streets______________ and why that particular place is
chosen___________________
19. Did they choose any other place before starting their
business?
a) Yes b) No
If yes in which place you were having your shop ___________
Reasons for changing the shop __________________
20. Do they provide catering service, If so how frequently you
get order & for what are
the items he gets usually?
a) Daily b) Weekly c) Fortnight d) Monthly
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Please mention the name of the items you get order usually for
catering ________________________
21. When is the rest day for vendor?
22. What is the ratio of on spot order and parcel?
23. What is your daily working capital?
a) 1000 2000 b) 2000 3000 c) 3000 4000 d) 4000 5000 e)
>5000
24. Working Times ___________________
25. Number of employees in the shop?
a) Service___________ b) Service______________ c) Service
________________ d) Service______________ d)
Service___________________
Phase -2 (For customers) 1) Please mention your name : Age:
_________ Sex: ____________ Occupation: _____________ 2) Which
items do you like most? ___________ And why? __________ Please give
rankings for below items as per your preference a) Panipuri b)
Masalapuri c) Sevpuri d) Bhelpuri e) Kachori f) Alupuri g) Kachori
double h) Dhaipuri i) Samosa j) Mixture k) others
_______________
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3) What is your average waiting time to get your ordered item
______________ 4) Please mention your frequency of visit to chat?
a) Daily b) weekly c) fortnightly d) monthly e) Occasionally 5)
Please mention your monthly expenditure for chat (PP)? a) 1000 6)
How often do you offer new items? a) Daily b) weekly c) fortnightly
d) monthly e) Occasionally 7) Please mention(tick) your opinion
about services a) Clean b) taste c) quality d) others
___________________ 8) What more do you expect from the vendor?
_________________________