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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
ABC TRADING CO. LTD., CHICKMAGALUR
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)”.
Department of Management Studies, AMC Engg College 2
ABC TRADING CO. 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
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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
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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.
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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.
Department of Management Studies, AMC Engg College 6
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 7
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 8
ABC TRADING CO. LTD., CHICKMAGALUR
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
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ABC TRADING CO. LTD., CHICKMAGALUR
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
Source: Coffee Board
Department of Management Studies, AMC Engg College 10
ABC TRADING CO. LTD., CHICKMAGALUR
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
Source: Coffee Board
Department of Management Studies, AMC Engg College 11
ABC TRADING CO. LTD., CHICKMAGALUR
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
Source: Coffee Board
Department of Management Studies, AMC Engg College 12
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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
Source: Coffee Board
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.
Department of Management Studies, AMC Engg College 13
ABC TRADING CO. LTD., CHICKMAGALUR
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
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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
Department of Management Studies, AMC Engg College 15
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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
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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
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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
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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.
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ABC TRADING CO. LTD., CHICKMAGALUR
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
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ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 21
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 22
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 23
ABC TRADING CO. LTD., CHICKMAGALUR
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
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ABC TRADING CO. LTD., CHICKMAGALUR
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
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ABC TRADING CO. LTD., CHICKMAGALUR
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.
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ABC TRADING CO. LTD., CHICKMAGALUR
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
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ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 28
ABC TRADING CO. LTD., CHICKMAGALUR
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.
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ABC TRADING CO. LTD., CHICKMAGALUR
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
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ABC TRADING CO. LTD., CHICKMAGALUR
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
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ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 32
ABC TRADING CO. LTD., CHICKMAGALUR
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.
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ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 34
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 35
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 36
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 37
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 38
ABC TRADING CO. LTD., CHICKMAGALUR
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
M/s AMALGAMATED HOLDINGS LIMITED
Department of Management Studies, AMC Engg College 39
ABC TRADING CO. LTD., CHICKMAGALUR
NO.48, KFC BUILDING, CHURCH STREET, BANGALORE-50001
BALANCE SHEET AS AT 31 ST MARCH 2003
PARTICULARS CURRENT YEAR
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
Department of Management Studies, AMC Engg College 40
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 41
ABC TRADING CO. LTD., CHICKMAGALUR
M/s AMALGAMATED HOLDINGS LIMITED
PARTICULARS CURRENT YEAR
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
Department of Management Studies, AMC Engg College 42
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 43
ABC TRADING CO. LTD., CHICKMAGALUR
M/s. AMALGAMATED HOLDINGS LIMITED
PARTICULARS CURRENT YEAR
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
Department of Management Studies, AMC Engg College 44
ABC TRADING CO. LTD., CHICKMAGALUR
M/s. AMALGAMATED HOLDINGS LIMITED
PARTICULARS CURRENT YEAR
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)
Department of Management Studies, AMC Engg College 45
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 46
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 47
ABC TRADING CO. LTD., CHICKMAGALUR
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.
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ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 49
ABC TRADING CO. LTD., CHICKMAGALUR
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,
Department of Management Studies, AMC Engg College 50
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 51
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 52
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 53
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 54
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 55
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 56
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 57
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 58
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 59
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 60
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 61
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 62
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 63
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 64
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 65
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 66
ABC TRADING CO. LTD., CHICKMAGALUR
2.5 ORGANISATION CHART OF AMALGAMATED HOLDINGS LIMITED.
Department of Management Studies, AMC Engg College 67
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
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 68
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 69
Structure
SystemsStrategy
Shared Values
Skills
Staff
Style
ABC TRADING CO. LTD., CHICKMAGALUR
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.
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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.
Department of Management Studies, AMC Engg College 71
ABC TRADING CO. LTD., CHICKMAGALUR
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.
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ABC TRADING CO. LTD., CHICKMAGALUR
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.
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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.
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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
Department of Management Studies, AMC Engg College 75
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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.
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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.
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Graph No.1
Source: Table No: 1
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Table No. 2:
Preferred beverage in house
a. In House
Sl.
No.Preferred Beverage in house
No of
RespondentsPercentage
1 Coffee 37 37
2 Tea 30 30
3 Milk 33 33
4 Others 0 0
Total 100 100
Source: Primary Data.
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)
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Table No: 2(b).
Preferred Beverage in take- away brand.
Sl.
No.Preferred Beverage in take-away
No of
RespondentsPercentage
1 Coffee 57 57
2 Tea 43 43
Total 100 100
Source: Primary Data.
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)
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Table No: 3(a)
Consumption of beverage in house
Sl.
No. Consumption in house
No of
RespondentsPercentage
1 Once 15 15
2 Twice 55 55
3 Thrice 20 20
4 More than three times 10 10
Total 100 100
Source: Primary Data.
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)
Source: Table No: 3(a)
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Table No. 3(b)
Consumption in take-away Brand.
Sl.
No.
Consumption in Take Away No of
RespondentsPercentage
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
Source: Primary Data.
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)
Source: Table No: 3(b)
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Table No. 4
Respondents’ opinion about location of take-away vending
machines with respect to convenience.
Sl.
No.
Located at convenient place No of
RespondentsPercentage
1 Yes 88 88
2 No 12 12
Total 100 100
Source: Primary Data.
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
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Table No. 5
Respondents’ opinion about price.
Sl.
No.
Price per cup No of
RespondentsPercentage
1 Low 5 5
2 Just right 60 60
3 High 35 35
Total 100 100
Source: Primary Data.
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
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Table No. 6
Respondents’ opinion about the Volume of Coffee/Tea served.
Sl.
No.
Volume of Coffee/Tea served No of
RespondentsPercentage
1 Less 4 4
2 Just Right 79 79
3 More 17 17
Total 100 100
Source: Primary Data.
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
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Table No. 7
Respondents’ opinion about the Quality of take-away Cup.
Sl.
No.
Quality of Take-away Cup Number of
RespondentsPercentage
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
Source: Primary Data.
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
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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
Source: Primary Data.
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
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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
Source: Primary Data.
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
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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
Source: Primary Data.
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:
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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
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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
Source: Primary Data.
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
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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
Source: Primary Data
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.
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Graph No. 13
Source: Table No. 13
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5.2 Analysis and Interpretation of Prospective Customers
Table No: 1Occupation of the respondents:
Sl.
No.Occupation
No of
RespondentsPercentage
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
Source: Primary Data.
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
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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.
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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
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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
Source: Primary Data
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.
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00% of the respondents prefer drinking milk more than 3 times in a
day.
Graph No.3:
Source: Table No: 3
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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
Source: Primary Data.
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
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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%
Source: Primary Data
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.
Department of Management Studies, AMC Engg College 100
ABC TRADING CO. LTD., CHICKMAGALUR
Graph No: 5
Source: Table No: 5
Department of Management Studies, AMC Engg College 101
ABC TRADING CO. LTD., CHICKMAGALUR
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%
Source: Primary Data
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)
Source: Table No: 6(a)
Department of Management Studies, AMC Engg College 102
ABC TRADING CO. LTD., CHICKMAGALUR
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%
Source: Primary Data
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)
Source: Table No: 6(b)
Department of Management Studies, AMC Engg College 103
ABC TRADING CO. LTD., CHICKMAGALUR
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%
Source: Primary Data
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.
Department of Management Studies, AMC Engg College 104
ABC TRADING CO. LTD., CHICKMAGALUR
Graph No: 7(a)
Source: Table No: 7(a)
Department of Management Studies, AMC Engg College 105
ABC TRADING CO. LTD., CHICKMAGALUR
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%
Source: Primary Data
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)
Source: Table No: 7(b)
Department of Management Studies, AMC Engg College 106
ABC TRADING CO. LTD., CHICKMAGALUR
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%
Source: Primary Data
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.
Department of Management Studies, AMC Engg College 107
ABC TRADING CO. LTD., CHICKMAGALUR
Graph No: 8
Source: Table No: 8
Department of Management Studies, AMC Engg College 108
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 109
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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%).
Department of Management Studies, AMC Engg College 110
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 111
ABC TRADING CO. LTD., CHICKMAGALUR
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.
Department of Management Studies, AMC Engg College 112
ABC TRADING CO. LTD., CHICKMAGALUR
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 :
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(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
---------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------.
Department of Management Studies, AMC Engg College 114
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 115
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 116
ABC TRADING CO. LTD., CHICKMAGALUR
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
Department of Management Studies, AMC Engg College 117