santu

ABC TRADING CO. LTD., CHICKMAGALUR

EXECUTIVE SUMMARY

“A day starts with a cup of coffee everyday”, this statement holds irrespective

of income groups, irrespective of gender, irrespective of age and irrespective of

geographical boundaries.

This Brazilian delicious drink today is part and parcel of an individual’s daily

routine. Now this drink not more only a kitchen made or traditional hotel’s drink.

Coffee drink adopting a new corporate image in changed global scenario.

India produces 70,000 tonnes of coffee every year, with a total coffee

cultivation area of above 5,000 hectares. Domestic demand for coffee has

stagnated at around 6,000 tonnes per annum in the past-few years. One third of the

two third is exported. About three fourth of coffee produced, is consumed in

southern part of the country.

Karnataka where coffee is one of the major commercial crop, carpeting to the

new corporate image to the coffee. A well known Chickmagalur based ABC Trading

Co.ltd., taking initiative to develop coffee industry as a organized sector.

The AMALGAMATED BEAN COFFEE TRADING COMPANY was

established in 1993, when the entire coffee marketing in India was undergoing a

major change. The Government of India had decided to dissolve the coffee board,

the sole marketing agent of coffee domestic and overseas. The coffee growers were

now able to sell their coffee in the open market. Taking advantage of this situation,

the company began exporting coffee and since its incorporation, the company has

achieved phenomenal success.

The first part of this report includes the background of coffee industry in India

and the information regarding the functional department of AMALGAMATED BEEN

COFFEE TRADING COMPANY Ltd. The second part of this report includes the

problem area that is Customers’ opinion and perception towards Coffeeday take-

away coffee/tea.

Department of Management Studies, AMC Engg College 1


This project report has been executed entitling ‘A study on customers’

opinion & perception towards coffee day take-away coffee/tea in Mysore city

“(conducted on behalf of ABC trading company Ltd., Chickmagalur)”.



CHAPTER- I

INDUSTRIAL PROFILE

1.1 GENERAL INTRODUCTION:

Coffee is an important beverage in India, especially to south Indians. In

Tamilnadu. The day starts with a cup of coffee everyday. It is more so in United

States and few other foreign countries. Now coffee has taken a dimension of being

‘anytime drink’ and anywhere drink in the world.

There was a legend that a Muslim saint from India. Baba Budan strapped

some coffee seeds around his waist to smuggle them out of Yeman around 1600

A.D. on his return from a pilgrimage to the holy land. He planted these seeds

around his mountain hut in Chickmagalur in Karnataka. Descendants of these early

plants are believed standing in Coorg, Mysore and Nilgiris hill.

The Dutch, in the17th century are believed to have shipped cuttings from

these plants to Java, Sumatra, Bali, Sulewesi, and other islands of East Asia for

establishing coffee estates. In 1714, the Dutch gave Louis 54 a young and vigorous

coffee plant, which is believed to have spread to French colonies, central and

South America as well as Mexico. Thus, India seems to have played a role in

spreading coffee not only in East Asia, but also throughout the Western

Hemisphere.

Commercial coffee production in India began more than 150 years ago .when

the British established plantation throughout South India. They found the tropical

climate, high attitude, sunny slopes ample rainfall, soil rich in humidity contents and

well drained sub-soil ideal for coffee cultivation. Since then India has been a

consistent producer and exporter of high quality of coffee. Most of India’s exports go

to Western Europe and Japan.

Indian coffee always has been known for its quality .William H Ukers, the well

known authority on coffee, wrote many years ago. “Indian coffee is noted for their



blue colour, cleanliness of beans and fine liquoring qualities. It is mountain grown

and the bean is large. The producers have always taken a stand on quality and

according, Indian coffee has commanded a premium in the European Market”.

India produced both Arabic and Robusta coffee. Arabica is grown at elevation

between 3000 and 6000 feet. Where as Robust is grown at lower elevation. The last

five years coffee production data ranks India 9th in terms of total tonnes

approximately, the same level of Ethiopia, Uganda and Guatemala.

The International Coffee Organization (ICO) categories India’s production

other “Mild Arabica”. Most of the coffee is grown in three states of India viz,

Karnataka, Tamilnadu and Kerala. Karnataka state accounts for nearly 65% of total

production where as Tamilnadu contributes 15% and Kerala 20% approximately.

The provisional coffee growing parts in India are Anaimalai, Bababudan girihills,

Nilgiris, Coorg, Mysore and Chickmagalur.

Coffee is a regulated commodity in India. Indian laws passed during world

war-2 to provide centralized marketing for coffee, which the estates could not sell,

make coffee as a sort of state monopoly. Over the years, this statutory government

control resulted in compulsory pooling of all coffee by the coffee board, an agency

of the government.

Coffee Board is also India’s primary coffee Research Organization focusing

on coffee. In addition, it is responsible for grade designation and the export of only

the finest and most aromatic of India’s hand-picked beans.

1.2 ORIGIN OF THE INDUSTRY

The province of kaffa in Ethiopia is considered the original habitat of coffee

Arabia (Arabica) & central Africa is reckoned to be the home of coffee Canephora

(Robusta).

The first coffee dates back to A.D.575 in Yemen when Persian invasion put

an end to the Ethiopian rule of the Negus Caleb, who conquered the country in 525

A.D. Certainly, the discovery of the beverage resulted in the cultivation of the plant

in Abyssinian & in Arabia but, its progress was slow until the fifteenth & sixteenth



centuries. The Arabians were jealous of their new found lucrative industry, & for a

time successfully prevented its spread to other countries by not permitting any of

the precious berries to leave the country unless they had first been steeped in

boiling water or parched, so as to destroy their powers of germination.

However, it was not possible to watch every avenue of transport, with

thousand of pilgrims journeying to & from Mecca every year & so there would

appear to be some reason to credit the Indian tradition concerning the introduction

of coffee cultivation into Southern India by Baba Budan, a Muslim pilgrim, as early

as 1600A.D. although a better authority gives the date as 1695 A.D.

Indian tradition relates that Bababudan planted his seeds near the hut he built

for himself in Chickmagalur and mountains of Mysore.

The greater parts of the plants cultivated by the natives of Coorg & Mysore

appear to have come from Bababudan importation. It was not until 1840 A.D that

the British began the cultivation of coffee in India. The plantation extends now from

the extreme north of Mysore to Tuticorn.

1.3 GROWTH & DEVELOPMENT OF THE INDUSTRY

A. Growth and Development of the industry in the world

The original architect of the coffee industry are said to be Ethiopians. Before

1200A.D, its consumption had spread along the Red Sea to Aden and Cario. By

1300 A.D. coffee was known to Persia & by 1500A.D. to Turkey. Shortly thereafter,

coffee was being sold to Venice across the Mediterranean Sea. Most pilgrims had

started to cultivate for the first time, in 1729 A.D. Brazil was producing 200,000 bags

annually by 1825 A.D. & three million bags per year by 1850 A.D. i.e. 80 years after

their first plantings. It took another 50 years of Brazils, coffee exports to reach 4

million bags. Soluble coffee was first produced in the USA in 1867. Coffee

cultivation was first developed after 1800 in Brazil.

Parallelly development occurred after 1850 in most Latin American Countries

& has late as 1900 A.D. in Columbia.



Brazil’s coffee history has been complicated by surpluses of coffee in the

1930s & 1960s, equivalent to several year’s crops. These surpluses were caused

due to a large extent by Brazil uncontrolled production & cultivation of coffee.

In the past 20 years the coffee trade from Africa has grown more rapidly than

elsewhere & has contributed seriously to the growing surplus.

The Central American countries have increased their share of world coffee

exports from about 5% in 1900A.D. to about 13% in 1960. This growth had occurred

with mild coffees which command, as a rule much higher prices than Brazilian

coffee as they are more aromatic & favorable. The highest consumption of coffee is

recorded in the US & Europe, where the highest standard of living prevails. In 1962,

Western Europe &the US had about 450 million consumers and the rest of the world

about 2450 million consumers.

B. Growth and Development of the industry in India

Coffee is cultivated commercially in southern states of India viz. Karnataka,

Tamilnadu, Kerala & Andra Pradesh. Coffee is also grown on the limited scale in

some non traditional areas of Orissa, West Bengal Assam and Madhya Pradesh.

Arabica & Robust are the two principle economic species that find extensive

cultivation in India. (Elevation above sea level influences both the variety and quality

of coffee. Arabica grows well at elevations between 900-1200 mts and Robusta

grows luxuriantly at lower elevations (150 mts). Arabica are shade loving & require

more shade than Robusta, under south Indian conditions. Robusta was introduced

from Indo-China at the close of the 19th century for planting in estates at lower

levels).

However, it was not until the late 1820’s that commercial plantations were

opened in South India with British enterprise & investment. The cultivation of coffee

rapidly progressed during the next 40 years. In 1856, there were only 7 British

planters in Mysore. By 1869, their number had increased to 2 owning 8094 hectares

of the total cultivated area of 58670 hectares.



Indian coffee soon established itself as outstanding in quality & became a

commodity second to none in world markets. During 1860’s most of the planted

coffee were Arabica, which apparently inherited the bean qualities of the original

“Mocha” introduced by Baba Budan. Coffee reached its zenith during 1860’s, this

period also witnessed major outbreaks of pests & diseased like the “white

stemborer”, ”leaf rust” & “green-bugs”. During the 1970’s India produced roughly

around 2% of the world coffee. The production, which was only 30,000 tones during

the 30’s, has trebled during 1960’s & was around 1,00,000 tones in 1970’s.

1.4 PRESENT STATE OF THE INDUSTRY IN INDIA

India is the second largest producer after Indonesia, in the Asia & oceanic

segments of coffee production.

Coffee is a stimulating and addictive beverage of thousands of Indian homes

& foreign exchange, as entered has new phase as a free market commodity in

India.

The new phase has put the coffee industry at cross roads. The two crucial

issues confronting the commodity which entered the free market a year ago is to

protect its support base in the domestic market without hurting customers too much

on prices and expanding both production and the export market.

A factor which is causing concern among domestic consumers is that the

steep increase in its price ever since coffee entered the free market.

After 50 years of a controlled market, where domestic prices were effectively

insulted against international prices, the liberalized situation with a spurt in global

demand taking Indian export to a new height has resulted in spiraling domestic

prices.

With free market forces ruling the industry, the coffee scenario is totally

transformed & its future is difficult to comprehend. One thing is certain that if there is

no insulting mechanism sharp changes in the international market are bond to have

an instant & cascading effect on domestic prices.



Some experts on coffee no doubt strongly favor the open market has

benefited to the coffee industry.

There is a strong view that volatility in the global market will have impact

continuously on the domestic market. A favorable export climate for Indian coffee,

especially for Arabica, is bound to bring out whatever stocks are left in the country

resulting in a likely pressure on domestic prices. Higher domestic price, even if they

are to be equal to international prices are bound to affect the domestic demand

which is already stagnating.

The free market is a new turning point for coffee cultivation which has a 400

year history. India producers some of the finest coffees in the world. In fact, it is the

first country outside Africa and Arabica to produce coffee. At present the country

produces about 2 lakh tones of coffee. The Arabica and Robusta varieties,

contributing almost 50% each.



Production of coffee in India since 1950-51(in MT)

Year Arabica % Robusta % Total

1950-51 15,511 82 3,382 18 18,893

1960-61 39,526 58 28,643 42 68,169

1970-71 58,348 53 51,883 47 1,10,231

1980-81 61,262 52 57,384 48 1,15,646

1990-91 78,311 46 91,415 54 1,69,726

1991-92 88,320 49 91,680 51 1,80,000

1992-93 73,120 43 96,275 57 1,69,395

1993-94 98,300 46 1,13,700 54 2,12,000

1994-95 79,000 44 1,01,100 56 1,80,100

1995-96 1,03,250 46 1,19,750 54 2,23,000

1996-97 90,450 44 1,14,550 56 2,05,000

1997-98 99,300 43 1,29,000 57 2,28,300

1998-99 97,000 37 1,68,000 63 2,65,000

1999-2000 1,19,000 41 1,73,000 59 2,92,000

2000-2001 1,04,400 35 1,96,800 65 3,01,200

2001-2002 1,21,050 40 1,39,550 60 3,00,600

2002-2003 1,02,125 37 1,73,150 63 2,75,275

2003-2004 1,06,500 39 1,68,725 61 2,75,225

Source: Coffee Board



Coffee Production by States 2002/2003 (in MT)

Sl.no State Arabica(MT

)

% Robusta(MT) % Total(MT) % to

India

I. Karnataka 85,050

83.3

1,06,250

61.4

1,91,3

00

69.5

II. Kerala 1,175

1.2

63,250

36.5

64,42

5

23.4

III. Tamilnadu 12,225

12.0

3,525

2.0

15,75

0

5.7

IV. Non

traditional

areas

3,475

3.4

125

0.1

3,60

0

1.3

V. Non

conventional

areas

200

0.2

0.0

0.0

20

0

0.1

Total (India) 1,02,125

100.0

1,73,150

100.0

2,75,2

75

100.0




Production of Coffee in Major States/ Districts (Zones) of India (In MT)

Sl.no States/District 2002-2003@ 2003-2004@

Arabica Robusta Total Arabica Robusta Total

1 Karnataka

1.1 Chickmagalur 43,850 31,125 74,975 43,100 28,450 71,550

1.2 Coorg 23,950 68,625 92,575 25,350 67,275 92,625

1.3 Hassan 17,250 6,500 23,750 18,550 6,775 25,325

Sub Total 85,050 1,06,250 1,91,300 87,000 1,02,500 1,89,500

2 Kerala

2.1 Wyanad 75 54,050 54,125 75 54,350 54,425

2.2 Travancore 650 7,650 8,300 300 6,950 7,250

2.3 Nelliampathies 450 1,550 2,000 550 1,550 2,100

Sub Total 1,175 63,250 64,425 925 62,850 63,775

3 Tamilnadu

3.1 Pulneyss 6,475 250 6,750 9,000 200 9,200

3.2 Nilgiris 1,350 2,800 4,150 650 2,775 3,425

3.3 Shevroys

(salem)

2,900 0 2,900 4,500 0 4,500

3.4 Anamalais

(coimbatore)

1,500 450 1,950 1,200 275 1,475

Sub Total 12,225 3,525 15,750 15,350 3,250 18,600

4 Non Traditional Areas

4.1 Andra Pradesh & Orissa

3,300 - 3,300 3,000 - 3,000

4.2 North Eastern

Region

175 125 300 175 125 300

Sub Total 3,475 125 3,600 3,175 125 3,300

5 Non Conventional Area

200 - 200 50 0 50

Grand Total

(India)

1,02,125 1,73,150 2,75,275 1,06,500 1,68,725 2,75,225




DOMESTIC CONSUMPTION:

Total Release of Coffee from the Pool in the Internal (Domestic Market From

1981 And Estimated Domestic Consumption From 1991-2000)

(Quantity in MT)

Calendar year Plantation Arab Cherry Robusta Total

1981 21,369 7,217 22,210 50,796

1982 22,718 7,332 23,940 53,990

1983 23,964 1,926 24,219 56,079

1984 31,628 8,137 13,779 53,544

1985 28,170 5,855 20,849 54,544

1986 25,939 6,399 22,083 54,421

1987 26,360 6,948 25,328 58,636

1988 25,487 6,036 24,037 5,560

1989 26,337 6,805 30,186 63,328

1990 22,983 8,587 22,582 54,152

1991 26,500 11,000 17,500 55,000

1992 26,500 11,000 17,500 55,000

1993 22,500 10,000 17,500 50,000

1994 22,500 10,000 17,500 50,000

1995 22,500 10,000 17,500 50,000

1996 22,500 10,000 17,500 50,000

1997 22,500 10,000 17,500 50,000

1998 22,500 10,000 17,500 50,000

1999 25,000 10,000 20,000 55,000

2000 29,000 8,000 23,000 60,000

2001 28,000 6000 30,000 64,000




World Coffee Balance (1000 bags green bean)

Crop Year 2002/2003 2001/2002 2000/2001 1999/2000 1998/1999 1998/1997 1997/1996

Beginning

Stock

28,017.1 31,830.9 28,219.9 32,423.1 31,803.9 34,079.9 36,0

Production 1,19,696 1,10,318 1,16,581 1,13,433 1,08,295 97,391 1,02,7

Robusta 40,633 43,997 46,566 39,453 34,897 33,933 36,4

Arabica 79,063 66,321 70,015 73,980 73,398 63,458 66,32

Exportable

Production

92,251 83,809 90,948 88,294 83,941 74,384 79,08

Imports 1,453.8 1,943.4 1,642.7 1,348.3 1,194.6 872.1 64

Domestic

Use

27,808 26,834.3 25,885 25,386 24,711 23,163 23,86

Exports 90,579.1 89,240.9 88,727.7 93,598.5 84,159.4 77,376.1 81,48

Green 84,640 83,618.8 83,277 88,580.4 79,872.5 73,038.3 77,02

Roasted 686.1 546.7 587.1 672.7 871 552.7 62

Soluble 5,253 5,075.4 4,863.6 4,345.4 3,415.9 3,785.1 3,83

Stocks 30,779.8 28,017.1 31,830.9 28,219.9 32,423.1 31,803.9 34,07

Stocks as %

of use

26.00 24.14 27.77 23.72 19.78 31.63 32


Outlook:

Robusta production is already down in 2002-2003 and Arabica, while still in

sample supply, is like to follow suit in 2003-04. But the key to the market

will be Brazilian Production in 2003-04, which the government estimates at

between 27.7 and 29.7 million bags, 17.5 to 19.5 million less than the

governments figure for 2002-03 of 47.2 million.

The low world prices in recent years are also likely to affect production in

other parts of the world and global output next season could be in a range

of 100 to 105 million bags, depending on weather conditions. However all

production estimates for 2003-04 are highly speculative at present and

could undergo significant revisions as the year progresses. Even if

production turns out to be at the upper end of the range there will be a

shortfall next season.



Rising world coffee stocks in consuming countries are a cap on any attempt

for the market to rally. The roasting industries worldwide are buying the

dips and have become extremely flexible to just use the lowest price in their

baskets. In the end baring any weather calamities, the big international

funds are making the market by just doing long or short.

The prospect for 2004-05 look more promising than for some years as the

likelihood of a significantly smaller Brazilian crop assures relief to coffee

exporters. But some will have to go on fighting to stay in business given

Brazil’s increasing dominance.

In the recent months technical analysts saw more potential to the upside

but constant origin selling kept a lid on futures prices. It seems that there is

not enough industry support to maintain the upside momentum. The fact

that Brazil is far from flooding the market might have disappointed the

buyers who expects that the market will bottom out to very low levels.

Neither the Brazilian coffee growers nor the real seems to allow that to

happen.

Between June-August of 2004 the market will remain comparatively more

volatile than last year. Even if there is frost, analyst point out that the prices

may not soar to that level of mid 1990’s as the current supply-demand

equations has undergone a change. In the absence of any weather related

shocks, the fundamentals will dictate a firmer but slightly better price levels

than the present one. The outlook for an improvement in prices at least 10-

20% over the current price (0 cents/one billion in Arabica & $750/MT in

Robusta ) barring any weather related supply shocks later in the year

appears feasible. Price rise above these levels are difficult to achieve

because of the overall bearish fundamental picture that still continues.

MEASURES PRESENTLY BEING ADOPTED BY THE INDIAN COFFEE

INDUSTRY TO UPGRADE QUALITY

A. Improving Plant Material



The existing breeding programs are, now being reviewed and strategies

aimed at developing new cultivators, both in Arabica and Robusta coffees, are

being formulated. These, in turn, would meet the long term requirement for a

sustainable and internationally competitive coffee industry.

B. Up Gradation of Post Harvest Processing Technology.

Measures such as ‘Selective Picking’, ‘Natural Fermentation’ and ‘Sun

Drying’ are being emphasized to upgrade the quality of Indian coffee.

C. Quality Certification of Curing Factories.

To improve the quality of coffee at the stage of curing, steps are being taken

to encourage the curing factories to come in for international certification, such as

the ISO 9002. Curing standards have also been formulated and adherence to these

organized and systematic steps in curing would enable the factories to apply for the

certificate to the Indian coffee board, thus authenticating their implementation of laid

down standards. The aim of this measure is to help foreign buyers to receive only

high quality coffees.

D. Cupping Culture.

Cupping culture is slowly being introduced. Till such time the marketing of

Indian coffee was by the coffee board, cupping was only being carried out by its

quality department and the farmer was not inclined to check or understand the cup

quality of his produce. However, today, since the marketing is being carried out by

the farmers themselves, they have realized that they should first understand the

quality of their produce, before they could offer it to the market. Cupping culture has

thus, commenced in India

E. “Flavor of India” Cupping Competition.

India has realized that it would be necessary not only to upgrade the quality

of coffee, but also to get these coffee evaluated and checked by an International

Jury of Tasters, there by not only establishing the credibility in the quality of these



coffees but also help the concerned farmers to eventually secure better returns. The

spirit of competition would encourage the coffee farmers to understand their

produces better, to take care for the seed to the cup, the enable them to market

their produce for a better price and in the long run, to establish a relationship with

their buyers. For the first time2002 an India International Coffee festival has been

organized and during this festival “The Flavour of India” cupping competition has

also been launched and will be continued in the year to come. In the near future, the

winning coffees may even be sold through internet auctions.

F. Focus on Special and Specialty Coffee Preparations and Estate Branded

Coffees.

Preparations from distinct plant strains and unique processing techniques

and marketed as ‘Estate Brands’ have been gaining ground over the recent past. It

is an established fact that each plant strain has distinct quality characteristics.

Certain estates cultivating plant materials with unique acceptable cup quality

characteristics have taken to processing them with strict adherence to quality

norms, thereby entering the arena of Specialty Coffees.

G. Focus on Promotion of India Coffee Both in Domestic and Overseas

Markets.

Export promotion, reliable crop forecasting & providing market intelligence

reports to the farmers to enable them to carry out effective export strategies for their

coffee are being implemented. The coffee board is organizing visits of foreign

buyers to India to enable them to see how the Indian coffee industry functions.

Licensing of exports & the presence of efficient & experienced private exporters

houses are definitely the strengths of our coffee industry.

H. Developing a Logo for Indian Coffee.

A logo has been developed for Indian coffee, to improve its visibility as a

distinct coffee in the world market & at the same time, to assure the quality of the



produce, which has been stamped with the logo. Thus the logo would be affixed to

such of those coffees, which confirm to quality norms & specifications providing

proof of a quality product, strengthening the confidence in its purchase by buyers &

helping in promoting the overseas sales of the countries coffees.

I. Coffee Futures Exchange.

For the first time in the annals of Indian coffee history, a coffee futures

exchange has been setup in Bangalore, to enable the farmers & the exports to

hedge their risk & to the streamline the present trading in coffee. The exchange is

trading in both cured (clean) & uncured coffee (parchments & or cherry forms). This

latter step has perhaps made the coffee futures exchange India limited, as the first

exchange in world to trade in an uncured commodity.

J. Review of Quality Standards for Various Types & Grades of Indian Coffee.

Standards & quality norms for each of the types & grades of Indian coffee

have been formulated by the board. Since the commencement of coffee trade in

India & even today, these parameters continue to be accepted. The stringent quality

specifications for Indian coffee are not only clearly defined, but also do not permit

extraneous & foreign matters to be present. Recently, the Indian coffee board has

reviewed the existing quality specifications & their has been a tightening of the

specification for some of the lower grades of the coffee, to help in further upgrading

the quality of these grades. Also seven new super grades are at the top end of the

bracket & are considered super quality grades, with stringent grading & sorting

specifications.

K. Introduction of a Post-Graduate Diploma Course to Generate a new Breed

of Coffee Professional-The Coffee Tasters –to help in Upgrading the Quality

of Indian Coffee



For the first time in the annals of the Indian coffee industry a post graduate

diploma course on various aspects of quality evaluation, covering both the visual

and organoleptic methods, and on the cultural aspects of coffee cultivation have

been introduced as a diploma course at the coffee board. This diploma course has

been structured to train young graduates on coffee quality, which would enable

them to man quality centers at the planting level, at the curing level and at the

exporting level, thus helping in upgrading the quality of Indian coffee. This nine

months course has been well tailored, to help the industry in generating a new

class of trained coffee professionals.

L. Special Area Development Programme.

The coffee board has implemented a special area development Programme

in the north east of India, aimed at stimulating the out put of coffee in this area of

the country .The Programme should help the tribals of this region, by encouraging

the consolidation \ rejuvenation of existing tribal holdings, promoting intensive

cultivation, encouraging expansions of coffee in areas already identify as suitable to

coffee. It would also provide input support, with subsidies for installing estate

processing equipment such as pulpers and hullers, drying yards and warehouses,

besides providing market support.

M. Introduction of a Small Sector Development Scheme.

A small sector development scheme as been introduced by the coffee board,

which provides a 25% subsidy on the total cost of productivity programmes

including replanting, water augmentation and quality upgrading. The scheme is

targeted at growers owning less then ten hectares under coffee board, either

individually or jointly. The small grower sector accounts for about 98% of all coffee

holdings of India.

1.5 FUTURE PLANS OF COFFEE INDUSTRY

A. To Intensify Genetic Research in India



It would be necessary to intensify genetic research to enable the

development of plant strains which are not only brought, free from pest & disease,

but having distinct cup quality characteristics, it would also be essential to evolve

pure Arabica strains, to help in the preparation of specialty coffee. Research would

have to advice the grower not only on the cultural practices to be followed on the

estate, but also on the type & quality of plant strains, which would be viable in a

zone.

B. To Reduce Cost of Production without affecting the Quality of Production

Ways & means of reducing the cost of production by the grower would have

been studied. Training programmes would have to be organized, to educate the

grower on the cost effective management of his estates, without affecting the quality

of his produce.

C. Examining a Shift to Higher Arabica Production.

A recent study on overseas coffee markets, carried out on behalf of the

coffee board, revealed that it would be more advantageous if India is to examine

increasing not only the productivity of coffee, resulting in a reduction in cost of

production, but also to shift cultivation practices to producing more of Arabica

Coffee , rather than Robusta’s. This would help in better unit realization for the

product and at the same time could also help in better and fruitful marketing of the

produce.

D. Innovation Method of Processing Coffee.

In the arena of processing, innovative methods of processing coffee would

have to be developed. The processing technology should be improved,

standardized o ensure quality and to offer unique coffee to the market. Studies

should be carried out to prepare and process Robusta coffees in innovative ways, to

enables an effective marketing of this variety of coffee also.

E. Preparation of Special & Specialty Coffee.



An interesting feature of today’s market is the growing trend for specialty

coffees, with countries such as the U.S & Japan being the forerunners of the

specialty coffee movement. Today, even Europe as join the bandwagon of the

specialty movement. The Specialty Coffee Association of America, Japan & Europe

are now setting the trend for many coffee consuming and producing origins to set

up such an association. Even in India, the culture has commenced, with the

formation of specialty coffee association of India in the year 2001. This association

has been set up by a group of quality conscious farmers, who have as their mission,

not only to upgrade the quality of Indian coffee, but also to bring under umbrella like

minded farmers, who wish to prepare and market estate branded, special and

speciality coffees.

F. Encouraging the Sale of Coffee with a Quality Certificate Including a

Cupping Report.

The coffee farmers in India is being encouraged to market his coffee with a

quality certificate either a self certificate system to be followed or a quality certificate

to be obtained from an accredited laboratory. The importance of a cupping report is

being stressed, as this would help in quality marketing and a better return to the

farmer.

G. Buyer-Seller Meets \Cupping Session at International Conferences.

To promote Indian coffee, it would be essential to organize buyer\seller meets

on an annual basis, if not on a bi-annual basis, which would bring together the

buyer & the seller, there by fostering relationship, besides improving the visibility

and marketing for Indian coffee. Participation in cupping session held in

international meets would also improve the visibility of Indian coffee, besides

enhancing the value of a product.

Today, with a vision of quality and the determination to implement measures

to upgrade the coffee industry, Indian coffee is poised on a journey to a tasteful

success. We do have the unique privilege and opportunity to saver the exotic



Flavour of our life and the lives of million others around the globe, with our unique,

aromatic coffees. We invite friends and buyers of our coffee to visit our coffee

plantations and our bustling colorful country, to understand our expectation and to

enjoy coffee taste of India.



CHAPTER – II

PROFILE OF THE ORGANISATION

2.1 ORIGIN OF THE ORGANISATION:

Centuries ago, when coffee drinking was discovered, little did the world know

that some of the best coffees in the world will be grown in a scenic place like

Chickmagalur which is situated in the heart of Malnad region of Karnataka state,

India. It is the golden soil of Chickmagalur, that coffee was first grown, families

settled there owned the estates. Soon, Amalgamated Bean Coffee Trading

Company ltd., popularly known as ABC was formed. With over 120 years of rich,

coffee growing tradition ABC produces the coffee for connoisseurs across the world.

The AMALAMATED BEAN COFFEE TRADING COMPANY was established

in 1993, when the entire coffee marketing in India was undergoing a major change.

The Government of India had decided to dissolve the coffee board, the sole

Marketing agent of coffee domestic and overseas. The coffee growers were now

able to sell their coffee in the open market. Taking advantage of this situation, the

Company began exporting coffee and since its incorporation, the company has

achieved phenomenal success.

2.2 GROWTH AND DEVELOPMENT OF THE ORGANIZATION

Within a span of 6 years, Amalgamated Bean Coffee Trading Company

became one of the largest exporters of coffee. ABC began exporting coffee to the

connoisseurs across USA, Europe and Japan. In the calendar year 1999, ABC

exported more than 27,000 tonnes valued at $60M to these countries and for the

first time in its short career of 6 years attends the position as largest coffee exporter

from India.

ABC has a wide and professional network in the major coffee growing areas

of the country comprising over 50 agents and 50 collecting depots. ABC owns two



Curing works at Chickmagalur and Hassan cures over 60,000 tonnes of coffee per

annum.

Inspired by rich heritage in coffee growing and the impressive success in the

export sectors, ABC has ventured into the domestic market with a filter coffee brand

COFFEE DAY". Its main objective being to promote coffee consumption and

popularize the beverage, the company has succeeded in carving out a niche for

themselves. This has been possible due to their innovative promotions of coffee and

distinct projection of the company brand.

Inspired by the impressive export performance, ABC then ventured into the

domestic market by offering filter coffee brand - II Coffee Day Rich filter coffee

powder. Coffee Day is marketed through ABC's exclusively designed coffee shops

called" Coffee Point Outlets". At the end of the first year of it operations, its sales

accounted to Rs.10 crores and by then it had opened 40 outlets in Bangalore and

Chennai. In the second year it doubled its sales to Rs. 20 crores and had 90 outlets

owned center by then solely or on franchise basis. These ultra modern outlets are

designed to carry on ambience that it’s rich as the coffee itself.

DIVISIONS OF THE COMPANY

The divisions of ABC Coffee Trading Company have been given below:

a) Coffee Day Exports

b) Fresh N Ground

c) Cafe Coffee Day

d) Coffee Day - Take away

e) Coffee Day Express

A. Coffee day exports:

Since 1999 ABC exports have been India's largest coffee exporters and

currently exports over 30,000 tonnes of green coffee per annum, accounting for 15

% of India's coffee exports, ABC began exporting coffee to the connoisseur across



USA, Europe and Japan. In the calendar year 2000, ABC exported more then

27,000 tonnes of coffee valued at US $ 60M to these countries and the for the

second time in its short career of 7 years retained position as the largest coffee

exporter of India. ABC customers include large roasts, food and beverage MNC's

and cafe chains in the US, South America, Europe, Japan and the Middle East.

B. Fresh N Ground:

In 5 years since its inception, this division has replaced well entranced local

players in the business of retailing roast and ground branded coffee. About Rs. 25

crores have been invested in this business. There are currently 260 such retail.

Outlets in south Indian (Karnataka, Tamilnadu, Kerala , Andhra Pradesh) catering to

1,20,000 customers every week, fresh N Ground will soon be seen in may other

cities beyond south India and there will be 600 fresh N ground by march 2005.

C. Cafe Coffee Day:

Cafe coffee day, the cafe division of the Rs. 200 crores Amalgamated Bean

Coffee trading co. Ltd., had gone in for revamping of interiors in the last quarter of

2001. Cafe interiors at the companies 74 outlet are being given a whole new look.

The flag ship outlet at Brigade road, Bangalore has been renovated and now sports

a trendy new look. In a change from the largely wood and granite base interiors,

there is more of steel and lots more colour, the young colour of today, lime green,

yellow, orange and purple will predominate, the crockery will also sport these colors.

The larger cafes will also have lounge areas and a few bean bags, cafe coffee day

will also have music events in order to pip up the ambience and focus on its key

clientele the youth.

D. Coffee day - take away

Now the Man-on-the move, the travelers and the coffee grower who is in a

hurry does not have to compromise on the quality of coffee he drinks, just because



he is in a hurry, coffee day will place more than 3,000 vending machines at high

traffic zone serving fresh filter coffee by March 2005.

E. Coffee day express

Amalgamated Bean Coffee Trading (ABCTL) announced the national launch

of its concept of retailing food and beverages through the kiosk route ABCTL's sixth

and latest division Coffee Day Xpress has set up some 43 kiosks at Petrol Pumps,

Corporate Canteens, Hospitals, Mails, Airport and Theaters in the four metros and

Bangalore & Hyderabad. The objective is to increase the number of outlets to 600

by 2004-2005 this was one segment which could be spun off and grown as some

thing in between the premium Coffee Cafe lifestyle Consumer and the mass user of

ABCTL's Vending Machines Outlets, The concept of 7sq. ft. kiosk was broached to

and welcome by the oil PSUs like HPCL and BPCL which were keen on developing

their non-fuel business. Out of the 43 kiosks setup by the Coffee Day Xpress, 25

company -owned operations house sprung up on HPCL and BPCL and RPO's

(retail petrol outlets) and 8 internal kiosks (48 sq. ft. each) have come up as

franchisee operations in the corporate office of IBM in Bangalore, GE in Hyderabad,

ING-VYSYA in Bangalore, The Medical Transcription company Heartland,

Bangalore, Airtel in Delhi, Hughes and Transworld in Mumbai. By the end of this

fiscal, franchise - kiosks to come up at 20 other corporate offices.

The coffee Day advantages

For lovers of fine filter coffee, Coffee Day is brand that has no substitute

renowned for its aroma and flavor. Coffee day has grown to be India's largest

selling brand of fresh filter coffee powder. Amalgamated Bean Coffee Trading

Company Ltd., the name behind coffee day take away is one of the largest producer

and exporter of coffee in the country with over 5,000 acres of coffee plantation and

state of the art curing capacity of 70,000 tones. It has the distinction of exporting

more than 13 % of Indian coffee. The company has been responsible for

transforming coffee retailing with over 300 coffee day Fresh in Ground outlet, it

caters to over 1,20,000 customer every weeks, taking the filter coffee experience



forward. It has launched the highly successful cafe coffee day chain which is stated

to grow to 200 cafes soon, expanding its beverages portfolio. The company has

also launched superior Assam teas under the tea day brand. Through its coffee day

take away vending machine initiative the company will deliver what consumer has

been missing till now - authentic filter coffee and fine tea made available

conveniently.

2.3 PRESENT STATUS OF THE ORGANIZATION

Coffee Day is marketed in exclusive coffee shops called coffee points. These

coffee points are located in the states of Karnataka, Tamilnadu, Kerala and Andhra

Pradesh. There are more than 336 coffee point outlets located in major cities of

Karnataka, Tamilnadu, Kerala, Andhra Pradesh and Pondicherry. They have been

set up in ultra modern style with a rich ambience where in coffee connoisseurs can

buy any of the exquisite blends of coffee on offer.

As an extension of the coffee selling activity and to enhance the strong brand

image, ABC has set up a chain of coffee parlours" Cafe Coffee Day" product mix of

9 blends has been finalized after a extensive testing at a state of the art coffee

laboratory, which is headed by the country’s foremost cup taster.

Cafe Outlets:

Here fresh brewed Indian as well as international blends of coffee are made

available. The real coffee connoisseurs taste the best of international coffee and

also experience the information explosion by surfing the Internet on the compiler

terminals. Presently there are 110 such cafes in operation in allover India.

The company owns over 2,000 acres of prime coffee growing land. The family

and relatives of the company's director’s own 5,000 acres of coffee estates, a large

quantity of ABC's coffee is procured from these plantations enabling the company to

maintain large stocks of quality coffee. It also owns estates in Kerala and

Tamilnadu.



The Amalgamated Bean Coffee Trading is one player in the market who is

capitalizing on innovations and giving a modern and elite brand image to its Brand

“Coffee Day”.

The company is based in Chickmagalur and has marketing offices in

Bangalore and Chennai. Retailing of filter coffee powder has largely been in the

unorganized sector, which comprises of around 73 % of the total market. Despite

branded coffees entering the market as early as 1930's the neighborhood roaster

grinders who offered fresh coffee ground at the counter has always been favorite

even today. Small roaster grinders have a band of loyal customers who have been

buying coffee from them for years. This is the unorganized sector. Amalgamated

Bean Coffee Trading is positioning itself in between extremes and large corporate in

the same segment. A few players are trying to make themselves like Cothas, Leo

and Narasus. Incorporating the advantages of small roaster in terms of direct selling

from neighborhood outlets as well using financial strengths to build a brand with

logos in the same way corporate do.

Promise:

To promise value for money to our customer through quality products and

value added services.

Quality policy:

We are committed to quality and we shall strive continuously to provide

products, which consistently meet the needs of our customers and establish a value

added relationship, ensuring total customer satisfaction.

Future plans:

ABC has plans of setting up cafes in the other countries in the near future.

ABC is thinking of introducing BEEN COFFEE, which means that the coffee

seeds will be roasted in front of the customers and the coffee will be made in front



of the customers. So from been coffee the customers will get fresh coffee at an

affordable price.

ABC's future plans include setting up of cafe's and coffee point outlets in all

the coffee consuming cities in the country. It also plans to set up beverage division

and express division.

Amalgamated Bean Coffee apart from having home delivery, coffee day club

membership, Jazz evenings and Art galleries at coffee day cyber café, there are

plans to set up filter coffee vending machines and especially coffee parlors allover

the community to promote the rich exquisite blends. ABC wants to improve its

service in a short period of time.

Within a short span of time Amalgamate bean Coffee trading has entered

many a home and heart with the exceptional coffee blends. Also Amalgamated

Bean Coffee Trading Ltd. is making an attempt to understand the customer’s needs

and trying to fulfill them within a short period of time. So here is a pot full of best

coffee from Amalgamated Bean Coffee Trading Ltd. that gives the world nothing

less than the finest in coffee. ABC is trying to give their customers the complete

coffee experience by providing them different blends of different taste.

ABC is thinking to provide the region specific blends, because the customers

of different region like coffee of different taste. So ABC is thinking of providing it.

ABC is thinking of opening its outlets 365 days in a year.



STUDY OF FUNCTIONAL DEPARTMENTS OF THE ORGANISATION

2.4.1 MARKETING AND SALES DEPARTMENT

MARKETING DEPARTMENT STRUCTURES

Senior General

Senior Manager Senior Product Market Research

Manager Manager

Duties of Senior General Manager

He will formulate the policies & Strategies

Setting the target

Duties of Senior Manager

Meeting the objectives

Planning

Plans for each month

Decisions on Sales Promotions

Senior Product Manager

Senior Product Manager is the brand manager for tea and packaged coffee.



Market Research Manager:

Market Research Manger will look after towards market research activities,

he also co-ordinates to Andhra Pradesh.

Duties of Senior Manger of Marketing Department:

To achieve the maximum sales with the minimum cost.

To reduce the cost

To provide training

To motivate the employees

To bring out promotional activities

Implementation of promotional activities

Daily visits to shops

The Indian market is divided into two sectors namely organized and

unorganized sector. Organized sector consists of a 27 % of the coffee market and

unorganized sectors nearly 73 % of the coffee market. The organized sector is

dominated by the companies. Like Hindustan Lever limited, Nestle and Consolidate

Coffee with their instant coffee and filter coffee brands.

PRODUCT:

The product of the ABC, viz. 'filter coffee' is being marketed under its brand

name coffee day. The company follows strict quality control procedures through

every step of its process. The seeds of only the best quality are taken and they are

roasted and then transported to the godown where the beans are powdered. The

coffee powder is weighed, accurately packed and sealed in a clean plastic pack.

Coffee day is available at all its outlets in variety of blends either pure coffee or pure

blend or chicory blend.

PRICE:

The pricing strategy adopted by the company is one in which it tries to

penetrate the market by pricing the product economically. The different blend is



priced in such a way that it is ranged from a mere Rs. 100 to Rs. 145 per kg and

consumer gets a Chance to test and like his favorite flavor.

Price list:

Coffee Blend Price 1kg (in Rs)

1. Pure Coffee

Coffee day P.B. Pure

Coffee day Plantation “A”

152.00

152.00

Chicory Blend

1. Coffee day premium (Coffee 90% Chicory 10%) 140.00

2. Coffee day Ultra rich (Coffee 80% Chicory 20%) 140.00

3. Coffee day P.B. rich (Coffee 80% Chicory 20%) 128.00

4. Coffee day strong (Coffee 70% Chicory 30%) 118.00

5. Coffee day Bright (Coffee 65% Chicory 35%) 108.00

6. Chicory 50.00

Price list of other brands

Brands Price list

1. Nescafe (for 200grams=125) 625.00

2. Bru (for 200 grams = 122) 610.00

3. Green label 128.00

4. Cothas (for 200 grams = 26.20) 131.00

5. Padma 120.00

6. Venkateshwara 120.00

7. Bayar’s 100.00

8. Balaji 100.00

9. Coorg 140.00

10. Kwality 120.00

11. Deccan gold premium 110.00

12. Star coffee ultra rich 130.00



DISTRIBUTION:

The distribution of coffee is very efficient in respect of this company. The

coffee beans are transported from the estates to the roast house, where coffee is

dried, processed and roasted, and then it is transported to the marketing and

branch offices in Bangalore and Chennai respectively. Then it is distributed to the

various retail outlets by the distribution division. The shelf life of the product is less

than 3 days owing to the demand for the product and the sensible inventory control

of the company, which sees to it, the retailers are not glutted with the product, The

distribution system of the company sees to it that the goods are delivered in time

and no delay occurs since this would lead to problems.

At present the ABC has 336 outlets, 50 % are franchisee and 50 % are

company owned outlets. Services and prices are alike. Franchisee will be settled on

the bases of their back ground, previous experience, business knowledge, financial

status and place, etc.

PROMOTION:

The company does not indulge in large - scale visual media promotion

techniques. Since its market is restricted to only southern states of Karnataka, it

includes advertisement in local newspapers, outdoors advertising like posters,

banners, coupon offer, etc.

The ABC trading company Ltd organizes a 'motor cycle' rally called 'coffee

500' every year, which is a very popular event and many teams from the country

come over to participate in the event.

The company also sponsors art exhibitions which helps it to create on elite

image. This also enhances the chance of positioning the brand above the ordinary

unorganized brands.

The company gives away small and colorful handouts, which contain recipes

of coffee for preparing cakes, milkshakes, and other delicious eatables. In total they

have got 20 different recipes, which they display in their coffee points. They keep

launching recipes on a monthly basis



The company conducts various schemes like membership cards before

being member of the company, they have to pay Rs. 5 to Rs.10. Once they become

the member they can purchase up to 2 kg in a month. The company also provided

lucky draw scheme, membership schemes, free gifts, free sugar and kitchen

articles. Above these promotional schemes helped to achieve brand loyalty and

customer satisfaction.

Home to Home Campaign:

When a new outlet is opened in any area in the city, then coffee day people

will do home to home campaign. They will go to every home and give them 'leaf let'.

If anyone who brings the leaf let to the outlet will get 'free gifts'. This is made with

the intention that out of targeted customers, 50 % - 60 % come to shops, about 90%

of them buy Coffee powder along with the gift they get. At that time if they buy 250

grams another 250 grams will be given free. Latest scheme is that if any body

purchases 500 gram of coffee powder 500 grams sugar will be given free.

Customer’s attitude:

70 % of customers are towards the brand loyalty, 30 % of the customers are

looking towards schemes. In outlets, they are also selling filters. It is to make the

Customers to aware about how to prepare best coffee.

Usually in each outlet, they will keep the suggestion slip, from this, they can

know the opinions of the customers towards their products.

Whenever there is scheme there is a more interaction between marketing

and Sales department. Finally they have the better coordination. They will keep the

target based on the previous month achievements.



Figure showing effects of new schemes in different outlets in Bangalore City (i.e. 500 of

gram Sugar for 500 gram of coffee purchase)

Shop- wise Before in kg’s After in kg’s

Shop no.1 12.9 13.2

Shop no.2 9.8 9.9

Shop no.3 28.3 24.4

Shop no.4. 4.5 5.6

Shop no.5 23.5 23.8

Shop no.6 23.5 23.8

Shop no.7 9.3 9.2

Shop no.8 17.6 17.9

Shop no.9 9.2 9.1

Shop no.10 9.5 9.2

Shop no.11 20.3 24.1

Source: primary data



2.4.2 FINANCE DEPARTMENT

Organization chart of Finance Department

Senior Manager

Manager

Karnataka Tamilnadu Andra Pradesh Kerala

Executive Manager Manager

Junior

Executive Chennai Madurai Coimbatore

Manager Executive Executive

Junior

Executive

Executive



Duties & Responsibilities of Finance Manager

To look after accounts and finance

Daily cash collection

To look after Bank Deposits

Issuing credit note to franchisee

Reimbursement of sales tax

Billing and checking the rates

Look after outstanding statement of the franchisee

To prepare P&L A/C and Balance Sheet

To look after cash flows

Duties & Responsibilities of Executive

They will look after the payments and expenditure regarding supplies and

they will prepare bank reconciliation statement.

Look after shop sales entry collection

Look after franchisee sales collection entries

Look after petty cash expenses

Collection Mechanism

Usually ABC will assign one person in each area to look after regarding cash

collection.

Credit Policy Adopted

For franchisee, they will allow the credit period of 7 days in Bangalore. In

upcountry it will get extended up to 15 days.

Inventory Management

The department will check maximum, minimum and re-order level for better

inventory management.

Fund Flow and Cash Flow will be done monthly by a department. Income Tax

will be paid as the companies act. Sales tax will be paid regularly.

M/S AMALGAMATED HOLDINGS LIMITED



NO.48, KFC BUILDING, CHURCH STREET, BANGALORE-50001

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 ST MARCH 2003

PARTICULARS CURRENT YEAR

31.03.2003

RS.

PREVIOUS YEAR

31.03.2002

RS.

INCOME

Sale of coffee, Tea and Allied Products

Other Income

Closing Stock

209,065,160

230,194

13,998,687

187,294,736

254,183

8,896,958

Total 223,294,041 196,445,877

EXPENDITURE

Opening Stock

Purchase of coffee, Tea, Chicory &

Filters

Consumables

Coffee Beverage Expenses

Grinding & Roasting Charges

Employees Cost

Administration & Establishment

Expenses

Packing Materials

Rent, Rates & Taxes

Financial Charges

General Expenses

Transportation Expenses

8,896,958

100,087,034

219,493

5,388

3,688,100

38,150,993

11,168,926

6,293,246

14,618,572

5,825,392

527,197

3,643,527

816,677

6,440,075

91,580,825

461,896

405,112

3,448,543

34,851,511

10,807,773

4,917,577

11,203,269

6,239,728

461,756

2,949,183

6,250,944



Advertisement & Business Promotion

Expenses

Brokerage & Commission

Franchisee Expenses

Auditors Remuneration

Depreciation Written Off

Deferred Revenue Expenditure Written

Off

Provision for Loss in M/S CoffeeLab

Ltd

(Current Year)

6,785,987

5,761,153

554,000

4,593,754

15,702,710

1,824,952

5,251808

4,001,834

520,925

3,396,373

12,146,855

Total 229,164,059 205,335,987

M/s AMALGAMATED HOLDINGS LIMITED



PARTICULARS

CURRENT YEAR

31.03.2003

RS. RS.

PREVIOUS YEAR

31.03.2002

RS. RS.

CURRENT ASSETS

Current Assets, Loans & Advances

Sundry Debtors

Cash & Bank Balances and Bank

Deposits

Closing Stock

Loans, Advances & Deposits

Less: Current Liabilities &

Provisions

5,762,968

4,247,653

13,998,687

36,538,896

60,548,204

113,679,312

3,888,358

4,514,617

8,896,958

34,671,105

51,971,038

83,918,606

NET CURRENT ASSETS (53,131,108) (31,947,568)

MICELLANEOUS EXPENDITURE 21,723,150 23,202,440

PROFIT & LOSS ACCOUNT 39,364,080 24,202,259

Total 37,364,080 37,865,188




NO.48, KFC BUILDING, CHURCH STREET, BANGALORE-50001

BALANCE SHEET AS AT 31 ST MARCH 2003


31.03.2003

RS. RS.

PREVIOUS YEAR

31.03.2002

RS. RS.

SOURCES OF FUND

Share Capital

RESERVES AND SURPLUS

Secured Loans

Unsecured Loans

2,400,700

30,760,812

3,890,000

34,650,812

2,400,700

32,854,488

2,610,000

35,464,488

Total 37,051,512 37,865,188

APPLICATION OF FUND

FIXED ASSETS

Gross Block

Less: Depreciation Block

40,330,884

11,247,994

28,649,797

6,654,240

Net Fixed Assets 29,082,890 21,995,557



INVESTMENTS

(Non-trade-Unquoted)

national Saving Certificate

In Subsidiary Companies

Shares of M/s Coffee Lab (p)

Ltd 49,994@10/-each

(previous year 40,000 shares

@ RS .10/-each)

Less: Provision for Loss in

Coffee Lab Ltd

12,500

499,940

499,940

12,500

400,000

12,500 412,500





31.03.2003

RS.

PREVIOUS YEAR

31.03.2002

RS.

INCOME

Other Income

Membership & Subscription

Fee

Interest on Fixed Deposit

Other Income

Expenditure written back

_

30,236

172,245

27,713

230,194

101,520

_

72,663

80,000

254,183-

EXPENCES

Employees Cost

Salaries & Wages

Providend Fund

Employees State Insurance

Staff welfare expenses

Staff expenses

reimbursement

Employees House Rent

Training Expenses

Gratuity

30,177,415

3,726,303

1,355,072

1,619,521

6,000

102,987

311,031

852,664

38,150,993

29,780,099

2,223,654

762,237

1,058,39

75,130

130,150

287,815

534,027

34,851,511

ADMINISTRATION &

ESTABLISHMENT

EXPENSES

Professional & Consultation

charges

550,977 716,362



Electricity & Water Charges

Conveyance

Printing & Stationary

Postage, Telephone &

Telegraph

Books & Periodicals

Security Charges

Lab Expenses

Traveling Expenses

Vehicle Maintenance

Stock Verification Charges

Office & Shops Maintenance

1,563,510

2,846,264

1,102,037

1,426,500

22,129

487,474

_

1,262,439

569,114

229,359

1,109,123

11,168,926

1,293,293

2,037,650

1,513,353

1,367,746

19,746

411,095

19,064

1,132,917

618,382

9,985

1,668,180

10,807,773

RENT,RATES & TAXES

Sales Tax

Insurance

Entry Tax

Office & Shops Rent

5,374,453

152,897

56,204

9,035,018

14,618,572

3,571,010

192,854

148,381

7,291,024

11,203,269

FINANCIAL CHARGES

Bank Charges

Interest on Cash Credit –

Bank

Interest on Franchise Deposit

210,359

5,137,424

477,609

5,825,392

322,222

5,599,976

317,530

6,239,728

GENERAL EXPENSES

ISO 9000 Expenses

Donation

Exhibition Expenses

Sales Meet Expenses

Other General Expenses

15,700

_

_

3,180

508,317

527,197

112,690

5,000

44,883

31,224

267,939

461,756



M/s. AMALGAMATED HOLDINGS LIMITED


31.03.2003

RS.

PREVIOUS YEAR

31.03.2002

RS.

MICELLANEOUS

EXPENDITURE

(to the extent not written off

or adjusted)

Deferred Revenue

Expenditure (Advertisement)

Opening Balance

Add : Additions during the

year

Less : Written Off during the

year

23,202,440

14,223,420

37,425,860

15,702,710

21,723,150

22,045,655

13,303,640

35,349,295

12,146,855

23,202,440



M/s. AMALGAMATED HOLDINGS LIMITED


31.03.2003

RS.

PREVIOUS YEAR

31.03.2002

RS.

Profit Before Taxation and

Prior Period Item

(5,870,018) (8,890,110)

Profit /(Loss)After Tax

Before Prior Period Item

(5,870,018) (8,890,110)

Prior Period Items

Provision for Loss in M/s

CoffeeLab Limited

(previous year)

796,467

8,495,336

12,420

Profit /(Loss) After Tax and

Prior Period Item

(15,161,821) (8,902,530)

Net Profit /(Loss) Brought

Down

(24,202,259) (15,299,729)

Net Profit /(Loss) Carried

Forward

(39,3647,080) (24,202,259)



2.4.3 HRM DEPARTMENT

Organization chart of HRM Department

Senior Manager

Manager

Karnataka Tamilnadu Andra Pradesh Kerala

Executive Manager Manager

Executive Chennai Madurai Coimbatore

Junior Manager Executive Executive

Executive

Junior

Executive

Executive



Duties of Senior Executive

Manpower Planning, recruitment, selection.

Training and development of linemen.

Measurement / assessment of individual and group behavior.

Salary and wages administration incentives.

Full and final settlement, calculation of gratuity, PF, ESI (Employee State

Insurance).

To look after appointment letters.

To look after labors Act and Factories Act.

Labour Laws

Other activities.

Duties of Executive

Maintenance of records.

To look after attendance, stationary, payments office maintenance.

Maintaining employee's personal file.

Look for manager correspondence.

Preparing letters.

Preparing credit notes.

Preparing franchises letters.

Preparing the entire correspondence letter.

Call handling.

Handling shop indents.

Job Analysis

Procurement is the first operative functions of Human Resources

Department, which can be sub divided into various sub functions like human

resource planning, recruitment, and selection. First of all the management will



determine the kind of Personnel required for a job and the number of persons to be

employed. The department will find out right jobs in right time.

In addition establishment of the scientific standard in advance is essential to

compare the applicants with the jobs and to select the suitable personnel. This

standard stipulates the minimum acceptable qualification skill and qualities required

for adequate job performance. Stipulating the standard requires the knowledge

regarding job design, job duties and responsibilities.

Job Description:

It defines the appropriate and authorized content of jobs. The ABC provides

wing information in job description.

Job identification: jobs title, location, code, department and unit.

Job summary: Brief job contents, its authority, responsibility, hazards etc

Conditions of work, location of work, working hours.

Job specification:

A Job specification is a statement of the minimum acceptable human

qualities necessary to perform a job properly. Company while designing job

specification includes education, experience, training, responsibilities, and

communication skills. Etc

Recruitment:

Once the required number and kind of human resources are determined, the

Company will find the places where required human resources are / will be available

and also find the means of attracting them before selecting suitable candidates for

job.

Objectives of Recruitment

To attract people with multidimensional skill and experience that suit the

present and future organizational strategies.



To infuse fresh blood at all levels of the organization.

To develop an organizational culture that attracts competent people to the

Company.

To head hunt people whose skills fit the company values.

To search for talent globally and not just within the company.

The ABC will consider following factors while formulating recruitment policy.

Personnel policies of other competing organization.

Organization's personnel policies.

Selection criteria and preference.

Recruitment cost.

Source of Recruitment

The sources of recruitment are broadly divided into internal and external

sources. Internal sources are sources inside organizational pursuit. External

sources outside organizational pursuits.

Present, Temporary or Casual Employees:

The company will find this source to full the vacancies relating to the lower

level owning to availability of suitable candidates. Usually it will be for shop

assistance level.

External Source:

External sources are those sources which are outside the company

pursuits. Organization searches for the required candidates from these sources due

to following reasons.

The suitable candidates with skill, knowledge talent, etc are generally

available.

Expertise, excellence and experience in other organization can be easily

brought into the organization.



Latest knowledge, skill innovative or creative talent can also be flowed into

the organization.

External source include:

a) Campus recruitment.

b) Private employment agencies / consultants.

Campus Recruitment:

Usually in ABC coffee day, cafe division conducts the Campus interview and

selects the candidates and it will rotate the candidates to other divisions.

Private Employment Agencies / Consultants:

Usually private agencies will perform the recruitment functions on behalf of a

client company by charging fees.

The ABC coffee day will consult employment agencies for recruiting

Executive managerial level.

Selections Procedure

After recruiting obvious guiding policy in selection is the intention to choose

the best qualified and suitable job candidates for each unfilled job. The objective of

the selection decision is to choose the individual who can most successfully perform

the job from the pool of qualified candidates.

Steps in Selection Process:

1) Job Analysis: It is the basis for selecting the right candidate. ABC will finalize

the job analysis, jobs description, job specification.

2) Recruitment: In this step the company will stimulate the people to apply for jobs.

3) Application Form: The ABC coffee day has its own application forms will be

different for the shop - assistance level, Executive level and Managerial level. It

contains information like personnel back ground information, education attainments,



work experiences, salary, personal details etc., usually in the case of ABC coffee

day people applying for shop assistance level will fill up the application form in

coffee day it self, people applying for Executive and managerial level will fill up

application form in the concerned employment agencies.

4) Written Examinations: The Company will conduct written examination for the

qualified candidates after they are screened on the basis of the application form for

shop assistance level. Written test will be conducted for 15 marks to test the general

knowledge of a candidate. The minimum qualification for shop assistance level is

SSLC and PUG.

5) Interview: The interview is to solicit necessary information from the prospective

applications and to assess the applicants’ suitability for the job. For shop assistance

level interview will be conducted and they are asked about their previous

experience. For managerial level, interviews will be conducted by Senior General

Manager and General Manager. For Executive level, it will be through employment

agencies as per the company requirement and qualification required for that

Department.

6) Employment: After the first and final interview the company has to intimate its

decision to the successful as well as unsuccessful candidates, the company will

issue 3 kinds of appointment letter, they are.

Trainee letter for 1 year

Promotion letter for 1 year

Confirmation letter

This activity is usually done by senior Executive in the company.

Performance Appraisal:

Performance appraisal is a method of evaluating the behavior of employees

in the work spot, normally both the quantitative and qualitative aspects of job

performance. Performance here refer to degree of accomplishment of the tasks that

make upon individual's job. Performance is always measured in terms of results and

not efforts. It is a continuous process in the ABC coffee day.



Shop Assistance Level:

For the Shop assistance level the company will make performance appraisal

on the Basis of shop maintenance, record and file maintenance, time management.

Executive level:

The people who were in the Executive level the performance appraisal will be

done on the basis of their target, depending on how they handle the shop

assistance and how they behave with their peer and manager.

Manager Level:

The people who are in the managerial level the performance appraisal will

be done on the basis of decision making and new scheme implementation. It will

depend on their department.

Eg: In case of production department the appraisal will be done on the basis of

quality control.

Training:

Organization and individual should develop and progress simultaneously for

their survival and attainment of mutual goals. Employee training is the important

subsystem of human resource development. After employee is selected, placed and

introduced they have to provide them training facilities.

Training improves, changes, moulds the employees knowledge, skill,

behavior and attitude towards the requirement of the jobs and organization

.

Importance of training:

Training is the one of the important technique of human resources

development. No organization can get a candidate who exactly matches with the job

and the organization requirements. Hence, training is important to develop the

employee and make suitable to the job.



The ABC coffee day has started their training Programme in the July 2003.

They are conducting training Programme in all of the three state viz. Karnataka,

Chennai, Hyderabad for people who are in shop assistance level Executive level

and management level.

Shop assistant level:

People who are in the shop assistance level will be provided with the

information like how to tackle the customer, how to behave with the customer about

company profile, product range and company policy.

Supervisors:

People who are in Executive level will be trained about how to keep customer

relationship and about sales, time management, leadership quality, it is a sort of

participative Programme.

Managerial level:

The manager will be trained about how to accept the changes, brand

awareness, strategies management.

Shop assistance level:

Training the no. of participants for shop assistance are 85 in Karnataka, till it

has not been started in other States.

Executive level:

Training the no. of participants for Executive level in case of Karnataka is 18,

Hyderabad its 12, in Chennai 14, the duration is for 2 months.

Managerial Levels:

Including 3 states the no. of participants are 12, it is for 3 months duration.



Benefits to the company:

Improves the morale of the work force

Helps to create a better corporate image

Faster authenticity, openness and trust

Helps to prepare guidelines for work

Organization gets more effective decision making and problem solving

Develops a sense of responsibility to the organization for being

Compete and knowledgeable.

Creates an appropriate climate for growth through communication.

Benefits to individual:

Helps the individual in making better decision and effective problem solving

Aids in encouraging and achieving self - development and self confidence

Helps a person handle stress tension frustration and conflict

Increases job satisfaction and recognition

Moves a person toward personal goal while improving interactive skills

Helps eliminate fear in attempting new tasks

Training methods

The ABC coffee day is providing off the job training method. Under this

method of training, the trainee is separated from the job situation and his attention is

focused upon learning the material related to his future job performance he can

concentrate on learning the job rather than spending his time in performing it. In the

off line job method ABC coffee have under taken two', method they are,

Role Playing:

This method of training involves action, doing practice, the participants play

the role of certain characters. This method in mostly used for developing inter

personal interaction and relations. In ABC coffee day for shop assistants training will

be conducted through role-play. They will give a small case study regarding how to



handle the customer. The customer feed back will be obtained through

observations.

Lecture method:

The instructor organizes the material and gives it to a group of trainees in the

form of lecture. People who are in the management level and Executive level will be

trained with the help of lecture method. Feed back will be obtained based on their

performance.

For Executive level the feed back will be obtained through conducting test and

based on their performance in the Programme, like how co-operative they are, on

the bases of their performance they will be issued certificate. The Executive who

performed well will be employed to take care of the shop assistance it is like

delegation of authority.

Promotion:

Promotion is advancement of an employee to a better job, better in terms of

greater responsibility, more prestige or status. Usually in ABC coffee day that to in

Fresh and ground division promotion will be done by Senior General Manager and

General Manger.

Basis of promotion:

Organization adopt different basis of promotion depending upon their nature

size etc., ABC coffee day will follow seniority cum merit.

The people who are in the Executive level will be promoted to managerial and

they will be transferred to inter branch. Promotion will not be given in the same

office.

Basis for Transfer:

It is a mobility of employees in order to place the right employees in the right

job. It will be done by the General Manager. It will be done in the month of April and



some times depending upon their requirements. For shop assistance level, internal

transfer will be made, designation will not be changed it will be done on monthly

basis. It is like rotation transfer, it is initiated to increase the versatility of employees.

Absenteeism:

Employees presence at work place during scheduled times are highly

essential for smooth running of the production process, in a particular, organization

in general. If they are absent continuously then disciplinary action will be taken by

management.

They will issue the warning letter, before they are giving suspension letter. Then if

they are absent they will be given suspension letter and salary will be shown as a

loss of pay.

Welfare and recreational facilities

Medical facility: It will be included in the salary itself HRA for other staffs: this

is Rs. 5001- for bachelors and Rs. 1000/- for married For Managers: Rs. 10001- for

bachelors Rs. 2000/- for married.

Loan facility:

6 months back they were providing loan, but now they are providing only

monthly advance i.e. up to Rs. 500/- to Rs. 600/-.

Company vehicles:

Company provides vehicle facility, two-wheeler for Executive level and four-

wheeler for Senior General Manager and for General Manager.

Cultural activities will be conducted once in a year i.e. ABC day. It is usually in

the month of Nov - Dec. Morning meeting will be held and evening it followed by

cultural activity. Company also provides gratuity, P.F., E.S.I., and pension scheme.



Leave:

Company will provide leave in the following ways

10 days - casual leave

10 days - sick leave

12 days - festival leave

Uniforms:

Company will also provide two pairs of uniforms for production assistance.

For shop assistance two pair and for the office boys two pair.



2.4.4 PRODUCTION DEPARTMENT

Introduction to Coffee:

Botanical evidence indicated that coffee Arabica originates on the plateaus

'of central Ethiopia, several feet above sea level where it still grows wild. By about

6000AD coffee found its way to the southern tip of the Arabian Peninsula to what is

now called Yemen two principal variety of coffee are Arabica and Robust. The

province of coffee in Ethiopia is considered to be the original habitat of Arabica.

Central Africa is reckoned to be the home of robust. According to a legend, Arabica

coffee was introduced to bring seven seeds from Yemen, Presumably Mokka coffee

have raised seed longs on his hermitage (Dattatreya Peeta) on the hills of near

Chickmagalur, However it was not until the late 1820s that commercial plantation

Were opened in south Indian, with British enterprises and investments the coffee

cultivation grew rapidly in the next 40 years.

The two types of coffee:

1. Arabica: Under natural condition Arabica grows like a small tree but looks like a

bush when plant growth is regulated through training.

2. Robusta: It is a bigger bush than Arabica. The natural coffee trees are small oval

berries and are about the colour and size of a small cheery, inside the skin and the

pulp are nested two coffee beans with twin flat sides together. Each tree can

produce between one to twelve pounds of coffee per year depends on soil, climate

and the other factors. The plants propagate either from seed or from cuttings

Types of Beans

Pea Berry:

It is abnormal single oval, bean present within the coffee berry as against the

normal flat bean which is usually found.

Flat Beans:

A or B here represents the size and grade. Pea berry is not superior to flat

berry in quality. Since pea berry is round it roasts much faster than flat berry.



Harvesting and Preparation:

Coffee berries do not riper uniformly the same branch may simultaneously

display ripe red berries. Conscientious growers grow over the tree again and again

selecting only ripe berries.

Once coffee is picked it can be prepared either by a dry method which

produces what is called natural coffee or the wet method. Which produces what is

termed as washed coffee.

DEPARTMENT STRUCTURE

Senior General Manager

Manager

Production Supervisors Stores Supervisors 10 assistant Boys

Duties of Production Supervisors

He will take care of inventory management

Issuing indent to coffee producing unit

Receiving the indent based on specification

Looks after packaging and dispatch with batch No. blended No. on the

Packet

Duties of store supervisors

Take care of grinding and mixing

Machine maintenance

Allocation of batch number



Packaging on the basis of batch wise

Controlling

Usually production and store supervisor will report to the production

manager, production manager in turn will report it to the general manager. The

assistants will do manual work. They will report it to the production supervisor.

Method of Processing:

There are two method of processing

- Wet method

- Dry method

Under the wet method outer skin of the coffee will be removed and it will be put into

the water for 8 to 10 hours. Then it will be dried in the sundry. It's called polpling. It

can also be called as washed coffee. Only in India it is called plantation coffee. In

other country it is called as parchment coffee. Under the dry method it will be dried

as it is.

Curing:

The ABC owns two large curing plants in Hassan and Chickmagalur with a

capacity to cure over 60,000 tones of coffee per annum. The ABC has an extensive

network of agents and collecting deposits to ensure efficient procurement and timely

export. It has got 50 agents. The coffee processing familiarly known as coffee

curing in India. The coffee curing industry has a history of more than 150 years. The

first coffee curing works was established in Mangalore in the year 1848.

Subsequently coffee curing works was established in Telicherry and Calicut. Erst

while curing works not only processed coffee but had multifarious activities. They

were acting as agents to traders. In short coffee curing works which funneld coffee

from thousands of coffee estates and prepared raw beans into marketable product.

being the ideal link between the growers and buyers this system continued till the

centralized coffee pooling system was introduced.



Curing capacity:

Curing capacity was fixed for each unit taking into consideration. The drying

city, milling capacity and storage capacity. This was the first step to avoid

detieriation in quality.

Curing process:

Segregation of coffee:

To attain consistency in the quality of coffee. Segregation would be made

region wise. Further processing would take place as per this segregation thus

ensuring consistent quality and homogenous.

In the washed coffee, outer skin will be removed and will be sent for

polishing. Then it will go for grading. The Indian coffee is sold depending upon the

size of the bean. Grading standards attained by the Indian coffee industry is

recognized allover the world as one of the best. It is not mechanical grading of

coffee by size, weight and colour, but eliminates the defective by manually sorting

producing the perfect grades. The large curing sector in India is like a departmental

store offering variety at one place. Coffee board has set up different standard for a

“A" grade coffee sieving size to be 6.65 mm.

Roasting over view:

The chemistry of coffee roasting is a complex and still not completely

understood. This is owing to the variety of beans as well as to the complexity of the

coffee essence, which still defies chemist’s best effort to duplicate it in the

laboratory.

Roasting is an important process in which the bean loses a great deal of its

moisture. Moisture content in coffee plays a vital role in preparing quality coffee.

The significance of maintaining optimum moisture content is recognized and due

importance is given. Infact Indian coffee is processed at optimum moisture level of

10 % to 10.5 % for washed coffees and 11 % for unwashed / natural coffee which



will eliminate the fear of aflotoxins and mould formation- For instance, which means

weights less after roasting than before. Before roasting the moisture is 10 to 12 %

but after roasting it comes down to 4 t0 5 %.

Roasting is simple theory the beans must be heated, kept moving so that

they do not burn or roast unevenly and cooled or quenched. Coffee that is not

roasted long enough or hot enough to br1ng out the oil has pasty, nutty or bread like

flavour, Coffee roasted too long or at too high a temperature is then bodied burnt

and industrial flavored. Coffee roasted too long and at too low temperature has a

baked flavour.

The ABC owns roasting unit in Hassan. It has got 3 imported machines which

can roast 500 kg per hour.

Most roasting equipment uses a roasting drum, above the heat source

usually a gas flame, the drum rotates, tumbling the beans to ensuring an even

roast. The air temperature insides usually controlled at about 500 degree F. The

precise temperature depends on the intentions and philosophy of operator,

eventually snapping or cracking noise will be heard when the interiors temperature

of the bean reaches 400 degree F. The oil suddenly begins developing this process

called Pryolysis and it is marked by darkening in the colour of the bean.

Blending:

` After roasting it will be blend as per the customer specification, which is

called blending.

All the branches depending upon their sales target, they will prepare

projection ands send it to the head office in the Bangalore. From the head office

they will send it to Hassan i.e. during the month being once in two days will send it

to all the branches through online indent on the bags they will mention the .

- Brand Name

- Batch number

- Quantity

- Destination



ABC has ISO 9002 certification. So they can trace back very easily if the

have any complaints.

After roasting they will send it to head office in Bangalore. In Bangalore they

will take 200 gram sample and send it to coffee lab's for analysis once it gets

approved in the lab, it will be sent to outlets in the state according to batch wise,

blend wise, FIFO for distributing within Karnataka. It will be grind here only. Or else

some of the outlets have grinding machines.

ABC has owned grinding machines and instuitions packing will be done here

on, for domestic use, packing will be doe in different outlets in Bangalore city.

Types of Blends:

Coffee day is available at all its outlets in variety blends either pure coffee or

pure blend or chicory blends.

Pure

4 Coffee day O.B. pure Coffee day Plantation “A”

Pure Blends

Coffee day supreme

Coffee day Break

Coffee day Fiesta

Coffee day D.B. Selection

Chicory Blends

Coffee day ultra rich

Coffee day strong

Coffee day bright



Quality System:

The ABC will order only for sample from the supplier and then onces there

are to approved bulk quantity will be ordered.

Tea:

ABC in the last Feb 2002 were selling tea under their brand name for which

they were receiving the packets from the Cochin, Now usually it will from Assam

and Darjeeling.

Method of handling:

It will be handed over in the inner cover called LDPF and outer cover HDPF

head office they will send it in the LDPF cover.

Vendor appraisal:

It will be done in the basis of negotiating price and natural quality and

specification.

Purchase requisition

Purchase order

Incoming material

Checking of the materials

Yearly once they will make vendor appraisal

Working Hours:

The production department has got two shifts, they are

8.00 to 4.30: In this period they will do grinding.

9.30 to 6.00: This period they will do packing.



2.4.5 MIS DEPARTMENT

STRUCTURE OF MIS DEPARTMENT

Senior general manager

Manager

Karnataka Chennai Coimbatore Madurai Hyderabad Kerala

Senior Executive junior Executive Executive Executive

Executive Executive

Junior Executive

Executive

Executive

Executive

Duties & Responsibilities of Manager

Updating of Sales

Generating & submission of Reports



Developing the Software as per the Requirements

Implementation & Support

Maintenance of Hardware & Network

General presentation of Work to the Head Office, as well as to the Outside

Visitors

Maintenance of Server & Backups

Duties & Responsibility of Senior Executive

Development of the Software

Implementation & Supporting as per the requirements of the Head Of MIS

Department

Working Process

Management Information System is one of important department in the

organization. Usually incase of ABC sales supervisors will collect information

through shop wise & blend wise regarding sales & stock of each day to and

submitted to the MIS department, and then it is stored & classified & submitted to

the Accounting Department. There is better co-ordination between Sales

Department, Finance Department & MIS Department.

Production Department will look after Inventory & provide information to the

MIS Department. In each of Outlet there is One Vending Machine. Their will be

reading in the machine & which is submitted to MIS Department by Sales

Supervisors.

Safety of Information:

HOD of MIS & HOD of Finance Department by using user name &

Password, they will get the information target wise, Shop wise, Blend wise. This

system is maintained in the organization for safety of information.

Comparison of sales is done once in a month, monthly report will be given in

figures, and graphical presentation will be done only during meetings. Sales reviews

meetings are done using power point. Presentations using LCD projector.

After analyzing, the department will generate two types of reports they are

Daily report ( branch wise and shop wise )

Target report



2.5 ORGANISATION CHART OF AMALGAMATED HOLDINGS LIMITED.


CEO

Sales Manager

Adm in / KRManager

Finance Manager

Production Manager

Product planning Manager

EDP/MIS Manager

RM Karnataka

Shops / Franchisee

INstitutions

RM Karnataka

Shops / Franchisee

INstitutions

RM Coimbatore

Shops / Franchisee

RM Madurai

Shops / Franchisee

RM Andra

Shops / Franchisee

RM Kerala

Tamilnadu

Bangalore

Hyderabad

Kerala

Chennai

Madurai

Coimbatore

Chennai

Madurai

Coimbatore

Tamilnadu

Bangalore

Andra Pradesh

Kerala

Tamilnadu

Bangalore

Andra Pradesh

Kerala

Andra Pradesh

Kerala

Chennai

Tamilnadu

Bangalore

Tamilnadu

Bangalore

Madurai

Coimbatore

Tamilnadu

Karnataka

Andra Pradesh

Chennai

Karnataka

Coimbatore

Madurai

Kerala

Hyderabad

Managing Director


2.6 McKINSEY’s 7S MODEL:

The entire profile of the organization, which has been presented from chapter

3.1 to chapter 3.5 above, is in accordance with McKinley’s Seven S Model.

McKinsey’s Seven S Model states that,

There are seven basic dimensions which represent the core of managerial

activities. These are the “levers” which executives use to influence complex and

large organizations. Obviously, there was a concerted effort on the part of the

originators of the model to coin the managerial variables with words beginning with

the letter S so as to increase the communication power of the model.

The Seven S’s are:

1. Strategy: the company is trying to get competitive edge with its pricing

strategy and differentiated products (beverage with different brands). They

are also improving their consumer base by providing ‘vending machine’ in

nook and corner of the major cities.

2. Structure: The company is following democratic way of administration i.e.

the information flows in vertical direction. But the decision is taken by the top

level management.

3. System: The company is well systematized with having quality control

system, vendor rating system, information system etc., and the like, the

company also uses performance appraisal system to have good relation with

employees and to check their performance

4. Style: The management of the company is task oriented. The decision is

taken by the management will be task oriented and for this they receive the

feedback from the employees.

5. Staff: The people in the organization are hard working united and work

towards the improvement of the organization.

6. Skills: The company is having highly skilled manpower. These skills are

enhanced through various training programmes.

7. Shared values: the company is having the common goal of achieving their

vision. Various branches share the information with each other and with the

top level.



Source: McKinsey 7-S Framework (p.10) from “In Search of

Excellence: Lessons from America’s Best-Run Companies” by Thomas

J. Peters and Robert H. Waterman.


Structure

SystemsStrategy

Shared Values

Skills

Staff

Style


SECTION B

CHAPTER-III

DESIGN OF THE STUDY

3.1 Statement of the problem

The problem area chosen by researcher for the present study is:

“A study on customers’ Opinion and Perception towards take-away coffee/tea

in Mysore city” (Conducted on behalf M/s ABC Coffee Holding Limited,

Chickmagalur).

3.2 Need for the Study:

Only one third of the coffee produced in India is consumed in the domestic

market and more than two third is exported. Filter coffee has been a part of tradition

culture of South India. Which is less popular in tea drinking northern region. Pure

Instant Coffee is mainly consumed in North India. Also urban consumers who are

not daily drinkers of coffee prefer pure instant coffee.

Today, Machine Vended coffee and dip tea is catching slowly in many cities.

But still due to many reasons it is not able to match with manually prepared one.

There are many areas, which has to be given serious thought. The customers’

opinion and perception towards machine vended coffee and dip tea becomes very

vital to improve the offerings.

ABC Trading co. ltd., a leading player in this segment s well aware of the

importance of feedback from customers. Also the company wanted to know the

impact of its revised pricing strategy on the buying decision. Hence, the above

study.

3.3 Objectives of the study

The objectives of the study are:

1) To analyze the prospective customers’ perception with respect to take-away

coffee/tea in Mysore city.

2) To analyze the existing customers’ opinion with respect to take-away coffee/tea

in Mysore city.

3) To know the impact of present pricing strategy on the buying decision.



4) To findout the most preferred media for providing more information to the

customers on take-away coffee/tea.

3.4 Scope of the Study

This study is undertaken to influence management’s information and its

analysis planning implementation and control of program’s to satisfy the customer

and organizational goals.

This study covers the entire city of Mysore and the scope gets restricted only

to the customers of the Mysore city. A sample size of 200 customers is selected for

the study. From that 100 respondents are prospective customers and other 100

respondents are existing customers. This customer’s opinions and suggestions are

asked in order to improve the marketing of take away coffee/tea.

3.5 operational definitions

Consumer perception:

Perception can be defined as the process by which an individual selects,

organizes, and interprets stimuli into a meaningful and coherent picture of the world.

It can be described as “how we see the world around us.” Two individuals may be

exposed to the same stimuli under the same apparent conditions, but how each

person recognizes, selects, organizes, and interprets them is a highly individual

process based on each person’s own needs, values, and expectations.

3.6 Research design

Research design is the basic framework, which provides guideline for the

rest of the research process. It is map or blueprint according to which the research

has to be conducted. The research design specifies the method of data collection

and data analysis.

The search for facts may be through either

A) Arbitrary (or Unscientific) Method

B) Scientific Method.

Arbitrary Method of seeking answers to questions consists of imagination,

opinion, blind belief or impression.

Scientific Method is a systematic rational approach to seeking method rather

than by arbitrary method. Then only we may get verifiable and accurate facts.



Hence, research is a systematic and logical study of an issue or problems or

phenomenon through scientific method.

The procedure and plan for collection and analysis of the information can be

attained once the problem is formulated and the objectives of the investigation are

listed.

The research design selected for this research is descriptive research

design. Descriptive research design is the one that simply describes something

such demographic characteristics of consumers who use the product. The

descriptive study is typical concerned with determine frequency with something

occurs or how the variable vary together.

Much of the marketing research is concerned with the description of the

marketing mix elements such as product, price, promotion, place, physical

evidence, process, and people.

3.7 Limitations of the Study

Despite of all the efforts to make the analysis more comprehensive and

scientific, a study of present kind is bound to have certain limitations. Researcher

humbly requests the respondent to submit them at this stage.

The present study is an attempt made to understand the perception, attitude,

and opinion of the customers about Take away Coffee/Tea. The present study is an

empirical work presented in a descriptive manner. Since the objective of the study

may be a kind of analysis. No attempt has been made to provide more

comprehensive conceptual analysis. Due to the respondents biased information an

attempt can be made to know communication process and thinking of customers.

The respondents may give biased information.

The research has been conducted in very limited period of time.

Bias and unwillingness of respondents to answer the questions have

affected the study.

The area of research is restricted only to few areas of Mysore city. And

hence the outcomes are applicable to the selected areas such as

Yadavgiri, Kuvempunagar, Vivekanadanagar, Ghokulam, Nazarbad,

Kalidasa Road, Devraj Urs Road and other.



CHAPTER -IV

METHODOLOGY OF DATA COLLECTION

4.1 sources of data

Data are facts, figures another relevant materials, past and present, serving

as bases for study and analyses. The data serves as the bases for analysis.

Without an analysis of factual data no specific inference can be drawn on the

questions under study. Inferences based on imagination or guesswork cannot

provide correct answers to research questions. The relevance, adequacy and

reliability of data determine the quality of the findings of a study. For the purpose of

this present study data from two sources collected namely

4.1.1 Secondary data

These are the sources including those data which are collected from some

earlier research work and which are used in the study by researcher.

Sources of secondary data

Newspaper.

Journals/Magazines.

Textbooks.

Signed articles of expert on status of coffee.

Various Websites, etc

The details of sources of secondary data are given at the end of the report in

appendix in detail.

4.1.2 Primary data

Primary data are original sources from which the researcher directly collects

data that have not been previously collected. In primary data plays important role in

study at this kind. The researcher has collected primary data through personal

interview method with the help of a well-structured questionnaire. In this study there

are two questionnaires

1. For Prospective Customers.

2. For Existing Customers.

Both the questionnaires consist of 15 questions each. Researcher has

personally met all the respondents to get the primary data.



4.2 Sampling Plan

Sampling techniques may be classified as non-probability and probability

techniques; non-probability sampling techniques rely on the researcher judgment.

Consequently, they do not permit an objective evaluation of the precision of the

sample results and the estimates obtained are not statistically predictable to the

population. The commonly used non-probability sampling techniques include

convenience sampling, judgment sampling, quota sampling and snowball sampling.

In probability sampling techniques, sampling units are selected by chance,

each sampling unit has a non-zero chance of being selected and the researcher can

pre specify every potential sample of a given size that could be drown from the

population as well as the probability of selecting each sample.

It is also possible to determine the precession of the sample estimates and

inferences and make projection to the target population. Probability sampling

techniques include simple random sampling, systematic sampling, stratified

sampling, cluster sampling, sequential sampling and double sampling. The choice

between probability and non-probability sampling should be based on the nature of

research, degree of error tolerance, relative magnitude of sampling and non-

probability sampling errors, variability in the population and statistical and

operational considerations.

4.3 Sampling Size

The sample size of the present study is as follows:

It is clear from the above analysis of sampling that the present research is of

convenience sampling in nature.

Since the company was interested in studying the main areas of Mysore city.

The researcher has carried his survey in the main areas of Mysore City.

The sample size is 200 from this 100 for prospective customers and another

100 for existing customers.



4.4 Field Work

Once the researcher has finalized the research designing steps must collect

data this is called fieldwork. Fieldwork is the most expensive of all the steps in

research the most common problem faced during the field works are:

Not at home

Not co-operating

Respondent bias

Interviewers bias

Mental stress

In this research, the researcher has taken fieldwork through questionnaire.

The researcher explained the purpose of conducting the survey and gave them a

questionnaire to know their opinion regarding survey.

4.5 Tools and Techniques of Data Collections:

The questionnaire is one of the data collection instrument. Constructing and

implementing questionnaire is one of the most interesting and challenging tasks of

conducting a market research. The problem facing the market research is to look

deep into the process of human communication and thinking. A researcher is

motivated to construct questionnaire he needs is not available in secondary source

questionnaire design is also becomes important and necessary when he observes

that unless the information during discussion or otherwise is noted down its basic

form will be destroyed. The questionnaire is the backbone for obtaining information

during a personal interview, telephone survey.

The researcher has used both structured closed & structured open-ended

questionnaire for data collection. Because these type of questionnaires are helpful

in extracting different opinions about the product.

Primary data in the present research plays a very vital role, conclusion and

recommendation in this research are completely based on data analysis and



interpretation. The primary data collected from the respondents has been classified

and tabulated by using statistical tools.

Analysis is purely based on classified and tabulated data analysis in the form

of theory has been interpreted just below the tables since the researcher is

completely aware of the limitations of advance statistical tools. Such as analysis of

variance, ANOVA, chi-square, multivariate analysis and other advanced statistical

tools. Researcher has simply analyzed the primary data with help of percentile

analysis and other simple methods of statistics to make the reade5rs understand

the analysis.

The analyzed data have been represented diagrammatically or graphically

whenever required. Bar charts, pie diagrams, multiple bar diagrams etc.

Data classification, tabulation, analysis and interpretation have been followed

by summary of findings.



CHAPTER- V

Analysis and Interpretation of DATA

5.1 Analysis and Interpretation of Existing Customers

Table No. 1:

Occupation of the respondents:

Sl.

No.Occupation

No of

RespondentsPercentage

1 Government employee 5 5

2 Private Employee 30 30

3 Business men 30 30

4 Student 35 35

5 Others 0 0

Total 100 100

Source: Primary Data.

Findings:

It is clear from the above table that 35% of the respondents are students,

30% of respondents are private employees, 30% are businessmen and 5% are

government employees. Others are neglected amount.



Graph No.1

Source: Table No: 1



Table No. 2:

Preferred beverage in house

a. In House

Sl.

No.Preferred Beverage in house

No of


1 Coffee 37 37

2 Tea 30 30

3 Milk 33 33

4 Others 0 0

Total 100 100


Findings:

It is clear from the above table that 37% of the respondents prefer coffee,

33% prefer milk and 30% prefer tea in the house.

Graph No. 2(a)

Source: Table No: 2(a)



Table No: 2(b).

Preferred Beverage in take- away brand.

Sl.

No.Preferred Beverage in take-away

No of


1 Coffee 57 57

2 Tea 43 43

Total 100 100


Findings:

It is clear from the above table that 57% of the respondents prefer take-away

coffee followed by 43% preferring coffeday tea.

Graph No. 2(b)

Source: Table No: 2(b)



Table No: 3(a)

Consumption of beverage in house

Sl.

No. Consumption in house

No of


1 Once 15 15

2 Twice 55 55

3 Thrice 20 20

4 More than three times 10 10

Total 100 100


Findings:

It is clear from the above table that 55% of the respondents consume twice in

a day, 20% consume thrice in a day, 15% of the respondents consume only

once.10% of them consume more than three times in a day.

Graph No. 3(a)




Table No. 3(b)

Consumption in take-away Brand.

Sl.

No.

Consumption in Take Away No of


1 Occasionally 68 68

2 Once in a day 23 23

3 Twice in a day 9 9

4 More than two times in a day 0 0

Total 100 100


Findings:

It is clear from the above table that maximum of 68% of the respondents

consume occasionally, followed by 23% of the respondent consume once in a

day .9% of the respondents consume twice in a day. None of them consume Take-

away beverage more than two times a day.

Graph No.3 (b)




Table No. 4

Respondents’ opinion about location of take-away vending

machines with respect to convenience.

Sl.

No.

Located at convenient place No of


1 Yes 88 88

2 No 12 12

Total 100 100


Findings:

It is clear from the above table that maximum of 88% of the respondents

have said that location of vending machine is at the right place and 12% of the

respondents have said that it is not at the right place.

Graph No.4

Source: Table No: 4



Table No. 5

Respondents’ opinion about price.

Sl.

No.

Price per cup No of


1 Low 5 5

2 Just right 60 60

3 High 35 35

Total 100 100


Findings:

It is clear from the above table that about 60% of the respondents feel the

price is just right, 35% of the respondents feel price is high and 5% of the

respondents feel price is low.

Graph No.5

Source: Table No: 5



Table No. 6

Respondents’ opinion about the Volume of Coffee/Tea served.

Sl.

No.

Volume of Coffee/Tea served No of


1 Less 4 4

2 Just Right 79 79

3 More 17 17

Total 100 100


Findings:

It is clear from the above table that about 79% of the respondents feel the

volume of coffee/tea served through the cup is just right, followed by 17% of the

respondents feel it is more and about 4% of the respondents feel it is less.

Graph No.6

Source: Table No: 6



Table No. 7

Respondents’ opinion about the Quality of take-away Cup.

Sl.

No.

Quality of Take-away Cup Number of


1 Very Good 7 7

2 Good 72 72

3 Satisfactory 20 20

4 Poor 1 1

5 Very poor 0 0

Total 100 100


Findings:

About 72% of the respondents feel that quality of take-away cup is good,

20% of the respondents feel that it is satisfactory. About 7% of the respondents feel

that quality of take away cup is very good and about 1% of the respondents feel

quality of take-away cup is poor.

Graph No.7

Source: Table No.7



Table No. 8

Respondents’ opinion on what they want their take-away beverage

to have more.

Sl.

No.

Beverage with more Percentag

e

No of

Respondents

1 Aroma 18 18

2 Thick ness/mouth feel 28 28

3 After taste 51 51

4 It is ok 3 3

Total 100 100


Findings:

It is clear from the above table that about 51% of the respondents want their

beverage to have more after taste followed by 28% of the respondents want their

beverage to have more mouth feel/thickness and 18% of the respondents want their

beverage to have more aroma. About 3% of the respondents feel that the beverage

is okay.

Graph No.8

Source: Table No. 8



Table No. 9

Respondent’s opinion about how they want the cup to be.

Sl.

No.

Refreshing/ preppy Percentag

e

No of

Respondents

1 Yes 82 82

2 No 18 18

Total 100 100


Findings:

It is clear from the above table that 82% of the respondents want their cup to

be refreshing/preppy and 18% of the respondents don’t want their cup to be

refreshing/preppy.

Graph No.9

Source: Table No: 9



Table No. 10Respondents opinion about the maintenance of the place where vending

machine are located.

Sl.

No.

Maintenance Percentag

e

No of

Respondents

1 Yes 94 94

2 No 6 6

Total 100 100


Findings:

It can be observed from the above table that 94% of the respondents have

said that the place where vending machines are located is neatly maintained

and 6% of the respondents have said that the places are not cleanly

maintained.

Graph No.10

Source: Table No.10:



Table No.11 Likelihood of respondents recommending take-away coffee/tea to their neighbors/friends.Sl. No. Recommendation No. of respondents Percentage

1 Yes 98 98%

2 No 2 2%

Total 100 100%

Source: Primary Data

Findings:

It is clear from the above table that 98% of the respondents will recommend

their friends/neighbors to taste takeaway coffee/tea and about 2% of the

respondents do not recommend their friends/neighbors to taste take-away

coffee/tea.

Graph No: 11

Source: Table No. 11



Table No. 12

Respondents overall rating of take-away coffee/tea.

Sl.

No.

Overall Rating Percentag

e

No of

Respondents

1 Excellent 7 7

2 Good 58 58

3 Satisfactory 35 35

4 Poor 0 0

5 Very poor 0 0

Total 100 100


Findings:

It is clear from the above table that 58% of the respondents have rated take-

away coffee/tea as good, 35% of the respondents have rated take-away coffee/tea

as satisfactory. About 7% of the respondents have rated take-away coffee/tea as

excellent and other ratings are neglected.

Graph No.12

Source: Table No: 12



Table No. 13

Table showing the suggestion from the respondents.

Sl. No. Suggestions No. of respondents Percentage

1 Reduce Price 27 27

2 Improve Service 4 4

3 No suggestion 28 28

4 Make use of cow milk 2 2

5 OK 18 18

6 Stronger 06 06

7 Improve taste 12 12

8 Cleanliness 02 02

9 Increase No. of vending

machines

01 01

Total 100 100


Findings:

It is clear from the above table that:

About 28% of the respondents have not given suggestion.

About 27% of the respondents suggested to reduce the price.

About 18% of the respondents have said that the drink is OK.

About 12% of the respondents have said to improve the taste.

About 06% of the respondents suggested that the drink should be stronger.

About 04% of the respondents suggested to improve the service.

About 02% of the respondents suggested to make use of cow’s milk instead of

milk powder and 02% of the respondents have suggested to maintain

cleanliness.

About 01% of the respondents have suggested to increase the number of

vending machines.



Graph No. 13

Source: Table No. 13



5.2 Analysis and Interpretation of Prospective Customers

Table No: 1Occupation of the respondents:

Sl.

No.Occupation

No of


1 Government employee 14 14

2 Private Employee 34 34

3 Business men 30 30

4 Student 21 21

5 Others 01 01

Total 100 100


Findings:

It is clear from the above table that 34% of the respondents are private

employees, followed by 30% of the respondents are businessmen. About 29% of

the respondents are students, 14% of the respondents are government employees

and 01% of the respondents are others.

Graph No.1:

Source: Table No. 1



Table No.2

Preferred beverage of the respondents:

Sl.

No.

Preferred

Beverage

Morning Noon Evening Night No. of

respondents

Percent

age

1 Coffee 21 11 16 02 50 50%

2 Tea 10 13 14 03 40 40%

3 Milk 03 00 00 07 10 10%

4 Any other 00 00 00 00 00 00%

Total 34 24 30 12 100 100

Source: Primary data

Findings:

It is clear from the above table that:

1. 50% of the respondents prefer coffee. Among 50% of the respondents

preferring coffee,

42% of the respondents prefer coffee in the morning.

22% of the respondents prefer in the noon.

32% of the respondents prefer in the evening.

4% of the respondents prefer in the night.

2. 40% of the respondents prefer Tea. Among 40% of the respondents preferring

Tea,

25% of the respondents prefer Tea in the morning.

32.5% of the respondents prefer Tea in the noon.

35% of the respondents prefer Tea in the evening.

7.5% of the respondents prefer Tea in the night.

3. 10% of the respondents prefer milk. Among 10% of the respondents preferring

milk

30%of the respondents prefer milk in the morning.

00% of the respondents prefer milk in the noon.



00% of the respondents prefer milk in the evening

70% of the respondents prefer milk in the night.

Graph No: 2

Source: Table No. 2



Table No: 3

No. of times the beverage is consumed per day.

Sl.

No

Beverage Once Twice Thrice More than

3 Times

No. of

respondents

percentage

1 Coffee 3 11 17 19 50 50

2 Tea 01 02 18 19 40 40

3 Milk 03 07 00 00 10 10

4 Any other 00 00 00 00 00 00

Total 100 100


Findings:

It is clear from the previous table that 50% of the respondents prefer coffee,

40% of the respondents prefer tea and 10% of the respondents prefer milk. Others

are neglected.

Among the 50% of the respondents preferring coffee:

6% of the respondents prefer drinking coffee once in a day.

22% of the respondents prefer drinking coffee twice in a day.

34% % of the respondents prefer drinking coffee thrice in a day.

38% % of the respondents prefer drinking coffee Mores than three

times in a day.

Among the 40% of the respondents preferring Tea:

2.5% of the respondents prefer drinking tea once in a day.

5% of the respondents prefer drinking tea twice in a day.

45% of the respondents prefer drinking tea thrice in a day.

47.5% of the respondents prefer drinking tea more than three times in

a day.

Among the 10% of the respondents preferring milk:

30% of the respondents prefer drinking milk once in a day.

70% of the respondents prefer drinking milk twice in a day.

00% of the respondents prefer drinking milk thrice in a day.



00% of the respondents prefer drinking milk more than 3 times in a

day.

Graph No.3:

Source: Table No: 3



Table No: 4

Respondents preference with respect to preparation of beverage.

Sl.

No.

Preparation Percentag

e

No of

Respondents

1 Machine Vended 13 13

2 Manually prepared 87 87

Total 100 100


Findings:

It is clear from the above table that 87% of the respondents like the beverage

to be manually prepared and the remaining 13% of the respondents like the

beverage to be machine vended.

Graph No. 4

Source: Table No: 4



Table No.5:

Ranking allotted by the respondents.

Sl. No. Parameter I Rank II Rank III Rank IV Rank

NOR % NOR % NOR % NOR %

1 Easy to get 09 09% 22 22% 16 16% 53 53%

2 Economical 40 40% 31 31% 11 11% 17 17%

3 Hygienic 23 23% 26 26% 37 37% 14 14%

4 Refreshing 28 28% 21 21% 36 36% 17 17%

Total 100 100% 100 100% 100 100% 100 100%


Findings:

It is clear from the above table that 40% have ranked I for economical, 28%

have raked I for refreshing, 23% have ranked I for hygienic, and 9% have ranked I

for easy to get.

It is clear from the above table that 31% have ranked II for economical,26%

have raked II for hygienic, 22% have ranked II for easy to get and 21% have

ranked II for refreshing.

It is clear from the above table that 37% have ranked III for hygienic, 36%

have raked III for refreshing, 16% have ranked III for easy to get and 11% have

ranked III for economical.

It is clear from the above table that 53% have ranked IV for easy to get, 17%

have raked IV for refreshing,17% have ranked IV for economical and 14% have

ranked IV for hygienic.



Graph No: 5

Source: Table No: 5



Table No: 6

Respondents awareness about the brand

Sl. No. Heard of Take-away No. of respondents Percentage

1 Yes 59 59%

2 No 41 41%

Total 100 100%


Findings:

It is clear from the above table that out of 100 respondents about 59% of the

respondents have heard about take-away coffee/tea and remaining 41% of

respondents have not heard of take-away coffee/tea.

Graph No: 6(a)




Table No: 6(b)

No. of respondents who have tasted take-away coffee/tea.

Sl. No. Tasted No. of respondents Percentage

1 Yes 48. 81.35%

2 No 11 18.65%

3 Total 59 100%


Findings:

It is clear from the previous table about 59% of the respondents have heard

of take-away coffee/tea of which 81.35% of the respondents have tasted take-away

coffee/tea and remaining 18.65% of respondents have not tasted take-away

coffee/tea.

Graph No: 6(b)




Table No.7

From the previous table it is clear that about 48 respondents have tasted take-

away coffee/tea

Table No: 7(a)

Respondents satisfaction and dissatisfaction towards take-away’s coffee/tea quality/taste,

price and location.

Sl.

No.

Parameter Satisfied Percentage Not

Satisfied

Percentage No of

respondents

Total %

1 Quality/

Taste

46 95.83% 02 4.17% 48 100%

2 Price 09 18.75% 39 81.25% 48 100%

3 Location 40 83.33% 08 16.67% 48 100%


Findings:

It is clear from the above table that out of 48 respondents who have tasted

and heard of take-away coffee/tea, about 95.83% of the respondents have satisfied

with the quality/taste of take-away coffee/tea and remaining 4.17% of respondents

have not satisfied with the quality/taste of take-away coffee/tea.

Out of 48 respondents who have tasted and heard of take-away coffee/tea

about 18.75% of respondents have satisfied with the price of take-away coffee/tea

and remaining 81.25% of respondents have not satisfied with the price of take-away

coffee/tea.

Out of 48 respondents who have tasted and heard of take-away coffee/tea

about 83.33% of respondents have satisfied with the location of vending machines

in the city and remaining 16.67% of the respondents have not satisfied with the

location of vending machines in the city.



Graph No: 7(a)




Table No. 7(b)

No. of respondents who will continue to drink take-away coffee/tea in future.

Sl. No. Continuation No. of respondents Percentage

1 Yes 35 72.92%

2 No 13 27.08%

Total 48 100%


Findings:

It is clear from the previous table that about 48 respondents who have tasted

and heard of take-away coffee/tea, of which about 72.92% of respondents will

continue to drink take-away coffee/tea in future and remaining 27.08% of

respondents will not continue to drink take-away coffee/tea in future.

Graph No: 7(b)




Table No. 8

The media from which the respondents would like to have more information

on take-away coffee/tea.

Sl. No. Media No. of respondents Percentage

1 TV. 44 44%

2 Radio 00 00%

3 Newspaper 40 40%

4 Magazines 15 15%

5 Hoarding 01 01%

6 Others 00 00%

Total 100 100%


Findings:

It is clear from the above table that about 44% of respondents would like to

have more information about take-away coffee/tea from TV, 40% of respondents

would like to have more information about take-away coffee/tea from Newspaper,

about 15% of the respondents would like to have more information about take-away

coffee/tea from magazines and about 1% of the respondents would like to have

more information about take-away coffee/tea from hoarding and none of the

respondents would like to have more information from radio.



Graph No: 8

Source: Table No: 8



CHAPTER-VI

Summary of Findings

The summaries of findings are based on the previous chapter viz.

Classification, tabulation, analysis and interpretation of data. Researcher would like

to mention only important findings of the study.

6.1 Summary of findings of Existing customers.

1. Among the existing customers the majority are students (about 35%) followed by

businessmen (30%) and private employees (30%).

2. Coffee is the most preferred beverage in the house (about 33%) followed by milk

(33%) and tea (30%).

Even within the take-away beverage, majority of them (57%) prefer coffee.

3. About 55% of customers consume beverage twice a day in the house where as

with respect to take-away beverage majority of them (68%) drink occasionally.

4. With respect to location of take-away vending machines many (about 88%) feel

that the machines are located at convenient place and also about 94% of

customers feel that the place is cleanly maintained.

5. About 60% of the respondents feel that the price of take-away beverage is just

right. However, about 35% of the respondents have indicated that the prices are

high.

6. Majority of the customers are comfortable with the quality of the take-away cup

(72% say it is good) and also with the volume of coffee/tea served (79% feel it is

just right).

7. About 51% of the customers want take-away beverage to have more After Taste

quality, 28% want thickness/mouth feel and about 18% want more Aroma only

3% have indicated that no change is required.

8. About 82% of respondents want their beverage to be more refreshing/ preppy.

9. About 98% of respondents indicated that they would recommend take-away

coffee/tea to their friends/neighbors.



10.The overall rating of take-away coffee/tea is encouraging. About 58% feel it is

good, 35% feel it is satisfactory and about 7% feel it is excellent.

11.About 28% of respondents did not give any suggestions. While 27% said to

reduce price,15% said it is O.K, 12% said to improve taste, 4% said to make it

stronger and few others mentioned about service, cleanliness, usage of cow milk

etc.

6.2 Summary of findings of prospective customers.

1 .Here again the most preferred beverage is coffee and majority of them would like

to have in the morning.

2. Most of the coffee lovers consume coffee thrice or more than 3 times a day

3. About 87% of the customers want manually prepared coffee/tea as against 13%

who prefer machine vended coffee.

4. The parameter which most (40%) of them consider first while making a choice on

particular brand is economical, which is followed by hygienic, refreshing and easy to

get.

5. About 41% of prospective customers have not even heard of take-away

coffee/tea. Among the prospective customers who have heard about take-away,

48% have tasted once or thrice.

6. Among those who have tasted majority of them (95.83%) are satisfied with

quality/taste while about 81.25% of respondents are not happy with price.

7. Among the prospective customer who have tasted take-away beverage, 72.92%

have indicated that they will continue drinking the same i.e. they are likely to be

converted to regular customer.

8. The most preferred media to give information on take-away coffee/tea is TV

(44%) followed by Newspaper (40%), magazines (15%) and Hoardings (1%).



6.3 SUGGESTIONS & CONCLUSIONS

Recommendations:

Researcher suggests the following recommendations based on primary data

analysis interpretation & summary findings to M/s ABC trading company. Ltd.,

Chikmagalur.

It is very clear from the findings that majority of them prefer manually prepared

beverage. So the biggest challenge before the company is to make its beverage

close to manually prepared one. For this the very composition/ingredients of the

beverage may have to be changed.

Most of the customers drink take-away coffee occasionally. The company

needs to really work on this area and increase the frequency of consumption.

The company should try to make their customers drink take-away beverage

atleast once in a day. One probable strategy for achieving this is to position the

brand as “an ideal beverage after the morning or evening walk”.

As Students, Businessmen and Private employees are major customers of take-

away beverage, the ideal location of vending machines would be near colleges,

commercial complex, private organization etc.

The Company really needs to rethink on its pricing. For a highly price sensitive

country like India, beverage with such a price will only make it an occasional

drink. It is very clear from findings that among the prospective customers about

81.25% are not happy with price.

As preferred by the existing customers the company must provide more after

taste quality beverage. Also it need to consider Mouthfeel and Aroma part of

beverage.

The Company must promote the brand heavily may be in terms having more

hoardings, banners etc and improve its brand awareness. From the findings it is

clear that 41% of prospective customers have not even heard of take-away.

Without awareness attitudes cannot be developed.

The Company should slowly start advertising in TV’s as TV was found to be the

most preferred media.



Conclusions:

The Corporate Exposure and Learning gave a very good exposure in terms

of understanding the company in detail knowing its activities and also the specific

roles played by each functional department.

It is really interesting to note that AMALGAMATED BEAN COFFEE Trading

Company is the only Karnataka based company who are into machine vended

beverages. The company is doing well and growing phenomenally. Apart from

understanding more on the company /product details the researcher had an

opportunity to work on a problem area and present the findings to the company.

The problem that was taken for the study was on “customers’ opinion perception

towards coffeeday take-away coffee/tea in Mysore City”.

Based on the findings and experience the researcher had while conducting

the survey few suggestions like reduction of price, improving service and etc was

presented to the company.

The researcher feels of having contributed to the company by conducting the

study and providing them with the necessary information.



Questionnaire for existing customer:

01 Name :

02 Address :-----------------------------------------------------------------------------

---------------------------------------------------

--------------------------------------------------.

03 Occupation :

(a) Government Employee (b) Private Employee

(c) Businessman (d) Student

(e) Mention if any

------------------------------

04 Preferred beverage :

In house : (a) Coffee (b) Tea

(c) Milk (d) Mention if any

Take-away brand : (a) Coffee (b) Tea

05 Consumption of the beverage :

HOUSE TAKE AWAY

Once in a day Occasionally

Twice in a day Once in a day

Thrice in a day Twice in a day

More than 3 times in a day More than two times in a day

06 Is the take-away vending machine located at a convenient place for you :

(a) YES (b) NO

07 Price per take away cup is :



(a) Low (b) Just right (c) High

08 volume of coffee/ tea served through cup :

(a) Smaller (b) Just right (c) Bigger

09 Quality of the take away cup :

(a) Very good (b) Good (c) Satisfactory (d) Poor (e) Very poor

10 You want your take away cup to have more :

(a) Aroma (b) Thickness / Mouth feel (c) After taste (d) any other

11 Do you want your cup to be more refreshing / preppy?

(a) YES (b) NO

12 Is the place where you drink take away coffee / tea is neatly

maintained :

(a) YES (b) NO

13 Do you recommend your friends / neighbors to taste take away coffee /

tea.

(a) YES (b) NO

14 Overall , how do you rate take away coffee / tea :

(a) Excellent (b) Good (c) Satisfactory (d) Poor (e) Very Poor

15 Any other suggestions

---------------------------------------------------------------------------------------------

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Questionnaire for prospective customer :

01 Name :

02 Address :-----------------------------------------------------------------------------

----------------------------------------------------------------------------.

03 Occupation :

(a) Government Employee (b) Private Employee

(c) Businessman (d) Student

(f) Mention if any

------------------------------

04 Preferred beverage :

Morning Noon Evening Night

Coffee

Tea

Milk

Any other

05 How many times / day you drink the beverage :

Once Twice Thrice More than 3

times

Coffee

Tea

Milk

Any other

06 You like your beverage to be :

(a) Machine Vended (b) Manually Prepared



07 Rank the following - 1 to 4

(a) Beverage should be easy to make / get .

(b) Beverage should be economical .

(c) Beverage should be hygienic .

(d) Beverage should be refreshing .

08 Have you heard / tasted take away coffee / tea :

YES NO

Heard

Tasted

09 If you have tasted take away coffee / tea , answer the following :

(i)

Satisfactory Not

satisfactory

Quality / taste

Price

Location of vending machines

(ii) Do you continue to drink take away coffee/tea in future

(a) YES (b) NO

10 Through which media you would like to have more information on take away

Coffee / tea :

(a) TV (b) Radio (c) News Paper (d) Magazines (e) Hoardings

(f) Any other , please mention

Weekly Report on CEL



Name of the student: Maruthi.C.M.

Organization : ABC Trading Co. Ltd.,

Name of the Guide : Mr.Karunakaran.K.

Faculty Member,

Dept. of Management Studies,

AMC College of Engineering, Bangalore.

Date : From 20th June 2005 to 28th August 2005

From To Work/Training undertaken During the

Week

20/06/05 26/06/05 Reported for Corporate Exposure and

Learning Programme and collection of

information regarding the coffee industry.

27/06/05 03/07/05 Collecting the information of industrial

background for the study.

04/07/05 10/07/05 Visiting finance and production

department.

11/07/05 17/07/05 Visiting HR department and MIS

department.

18/07/05 24/07/05 Visiting Marketing department.

25/07/05 31/07/05 Secondary data collection and

Questionnaire preparation.

01/08/05 07/08/05 Fieldwork.

08/08/05 14/08/05 Fieldwork.

15/08/05 21/08/05 Fieldwork.

22/08/05 28/08/05 Finalization of CEL programme and

preparation of draft report

Signature of the Faculty Guide Signature of the External Guide
