GODREJ & BOYCE MFG. CO. LTD.
Project on Potential of Tea/Coffee Vending Machines Vipan Kumar 6/28/2010
This report provides survey results from respondents regarding the vending machines. Specifically, this research identifies the various things related to vending machines like market share analysis, satisfaction level of the customers and their preference for the vending machines
Acknowledgement This report incorporates the contribution of many people and without their support this work would not have come in completion. So I would like to extend my immense indebtness to all of them who have guided and motivated me throughout my project. I sincerely thank to all of them for their valuable contribution without which this project report would have not reached its goals.
I am indeed grateful to Mr. Lok Pati Mishra, for his valuable support & guidance throughout the research project. I would also like to thank Mr.Vikram Walia who gave me this opportunity to undertake the training in Godrej’s Prima department.
Last, but not the least, I would like to express my faith in the Almighty who has given me strength at every phase of life to stand and excel.
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Table of contents
Introduction
5
Executive summary
6
Objective
6
SWOT Analysis
11
Methodology
12
Questionnaire
13
Findings and Analysis
14
Recommendations/Suggestions
19
Limitations of the Project
21
Conclusion
22
Bibliography
23
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Project Topic “Potential of Tea/coffee Vending Machines in Chandigarh, Mohali & IT Park Region” Submitted By: Vipan Kumar IGSM Greater Noida 1/5/2010 – 30/6/2010 Contact No. 09654739396 4
A STUDY ON THE POTENTIAL OF VENDING MACHINES AT GODREJ & BOYCE MANUFACTURING CO. LIMITED
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Introduction Godrej Group is one of the largest conglomerates based in Mumbai, India, involved in various industries that include appliances, precision equipment, machine tools, furniture, healthcare, interior solutions, office equipment, food-processing, security, materials handling and industrial storage solutions, construction and information technology. Its products include security Systems and Safes, Typewriters and Word processors, Rocket Launchers, Refrigerators and Furniture, Outsourcing Services, Machine Tools and Process Equipment, Cosmetics and Detergents, Engineering Workstations, Medical Diagnostics and Aerospace Equipment, Edible Oils and Chemical, Mosquito Repellents, Car perfumes, Chicken and Agri-products, Material Handling Equipments Like FORKLIFT Trucks, Stackers, Tyre handlers, Sweeping machines, access equipments etc. The Group is headed by Mr. Adi Godrej & Mr. Jamshyd Godrej. Traditionally, Vikhroli, a suburb to the Northeast of Mumbai has been Godrej's manufacturing base, but increasingly the group have moved significant production facilities away from Mumbai. The Godrej group also owns vast land in Vikhroli, occupying 3500 acres (14 sq km) of land on both sides of the Vikhroli section of the LBS marg. That makes the Godrej group the biggest private land owner in Mumbai by far . Such vast land can, in theory, be used to create at least 1500 acres of residential floor space, which, at very modest rates (Rs.10000/sq ft), can be sold for USD 16 billion . Thus, the Godrej group is sitting on an invisible cash pile that is envy of other Indian conglomerates.
Godrej, with a reputation for quality and trust built over a period of 100 years has set new standards in the world of vending machines with its innovative designs and passion for quality. Godrej Prima vending machines are designed to give the most reliable vending experience and aim at providing comfort and enhanced efficiency by maintaining a true hygienic environment. The varieties available in their newly launched Vending machines are: Tea, Coffee, Espresso, Cappuccino, Simple Coffee, Mocha, Hot Chocolate, Tomato soup.
Vending Machine: A machine that dispenses small articles such as food, drinks, or cigarettes when a Coin, bill, or token is inserted.
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Executive Summary
This report provides survey results from 50 respondents regarding the vending machines. Specifically, this research identifies the various things related to vending machines like market share analysis, satisfaction level of the customers and their preference for the vending machines The results indicate that companies post recession, are more cost conscious than before. It was also found that companies prefer vending machines rather than hand made Tea/coffee. Results also indicate the preference of the customers towards the various flavours like Ginger tea, Cardamom tea, Masala Tea, Cappuccino, Hot Chocolate, Espresso, Simple Coffee, Tomato Soup, Vegetable Soup etc.From here we can know our which brands are more liked by the customers This report also contains the information about how the companies rate the taste of their present vending machine
Objective
To find out the potential of tea/coffee Vending Machines.
To find out the market share of various players in the industry.
To find whether companies are cost conscious.
To know the satisfaction level of the customers from their present vendor.
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Godrej Vending Machines It Offers: TEA, COFFEE, LEMON TEA, CAPPUCCINO, WHITENER, TOMATO SOUP, TEA W/O SUGAR (TEA BAG), CLASSIC COFFEE
Two canister vending Machine (2 CVM)
Dimensions
Height – 642 mm Width – 230 mm Depth – 420 mm
Weight
16 KG
Power Supply
230 V /50 Hz /15 A
Beverage Varient
2 Options Settable (Tea / Coffee)
Option of 2 ingredients options they give Staggered dispensing option for tea bag Dispensing rate - 5 cups/min (90 ml each) Water source - on line / bubble top on m/c
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Four Canister Vending Machine
Dimensions
Height – 632 mm Width – 300 mm Depth – 473 mm
Weight
19.4 KG
Power Supply
230 V /50 Hz /15 A
Beverage Varient
8 Options Settable (Tea / Coffee)
Option of 4 ingredients options they give Staggered dispensing option for tea bag Dispensing rate - 5 cups/min (90 ml each) Water source - on line / bubble top on m/c /Pump
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Data Sheet The data sheet below is the database of the companies where I personally visited .It contains the name of the company, contact person, Contact no., no. of persons in the company, current vending m/c they are using & the number of cups
S.No.
Account's name
Contact person
Contact No.
No. of persons
Current M/C
No.of Cups
1
Hindustan Times
Mr. Gautam
9888340671
250
Ultimate
2
PTC News
M. Kiti Singh
9878665524
35-40
No M/C
750 50
3
Wonder Systems
Kulvinder singh
9814012597
50
No M/C
110
CCD
1110
4
Connect
Vikas Bhandari
9877012630
500
5
Spray House
Rajenda Kumar
0172-3029860
45
6
Tynor orthotics
Rohit Shama
9216908121
70
Lipton
170
7
Vodafone
Anil Kumar
9815679844
600
Lipton
1700
8
Competent
Paan Singh
9876079844
300
Ultimate
600
9
Softage
Rajesh Kumar
9888030013
56
Ultimate
150
10
Net Solutions
Pawan Kochar
9874657373
37
Nescafe
100
100
11
Aakash Institute
Shilpa
0172-4333800
15
No M/C
50
12
Altruist Technologies
Sunil Sandeyar
9814178787
109
Lipton
300
13
Spanco
Pardeep Kumar
9653227384
15
Lipton
40
14
More
Parmod kothari
0172-6620006
25
Nescafe
100
15
Next Gen venturi
Aman Bir
9988736086
35
No M/C
75
16
Altas cospo
Lakshmi Narayan
0172-39349222
50
No M/C
125
17
Heron Health
Manohar singh
0172-4690100
50
Sindhi
160
18
Hyundai
Harpreet Singh
0172-6605000
30
Sipra
60
19
Ericsson
Sukhdev Bhayana
0172-4603100
400
Lipton
900
20
Hero Mindmine
Ramanpreet Singh
9855555998
21
Infosys Technologies
Manmohan singh
22
Gold Finch Mobile sol.
Miss Gunjan
23
Infomatrix software (P) Ltd.
SS Sodhi
9872947778
24
Global Voice
Ashish Nagrath
25
IIFT
Shivam Gupta
26
Rimwea Career foum Ltd.
Namrata
Ultimate
180
1000
50
Lipton
4000
25
No M/C
100
15
Sindhi
35
9815411990
10
No M/C
30
9888999178
9
No M/C
30
0172-5049245
17
No M/C
50
0172-4619191
20
No M/C
75
20
Nescafe
60
27
Great West Alliace
28
Weat Highlande (P) Ltd.
Sunny Rampaul
29
Visa Pro Consultants
Ashutosh Arora
0172-4003739
10
No M/C
30
30
Sahara India Paivar
Narendra Sharma
0172-2645380
10
No M/C
45
31
Reliance Capital Ltd.
Sukhdev Singh
20
Nescafe
60
32
Srei PNB Paidas
Ambar Supta
0172-3017201
12
No M/C
50
33
Amtek Energy Power (P) Ltd
Pallavi
0172-2605899
50-60
Nescafe
160
34
Sushil Fianance Services
Sucheta
0172-4202111
10
No M/C
20
35
New Horizon
Arun Sharma
12
No M/C
29
10
9915999633
9855225332
9464424702
36
Austrich
Geet deep singh
9317510082
20
No M/C
40
37
Hastings Sahsi Buttar
Ashish Gaur
38
Morph Academy
Ajay Sharma
0172-5018004
9417726869
10
No M/C
34
18
No M/C
39
Angel Matrix
Neha
0172-6535111
40
20
No M/C
50
40
Reliance comm. (P) Ltd
Manpreet Singh
41
VLCC Institute
Gargi Kapoor
9317572200
50
Nescafe
200
9317006823
10
No M/C
42
Alpha IT world
Deepak Anmol
60
0172-3018001
20
No M/C
43
Kuoni Academy
Seema
45
0172-4347110
10
No M/C
34
44
ESM India
Rahul Chauhan
45
Antares
Baljit Singh
0172-3291305
12
No M/C
35
10
No M/C
46
Competent Synergies Ltd.
Raj Kumar
30
0172-5002888
15
Ultimate
34
47
SLR Infotech
Harminder Chawla
48
Netmax Technologies
Navdeep Mangal
1072-2615059
30
No M/C
65
30
No M/C
49
Firebox Animation Studio
60
16
No M/C
50
9023492466
9888070008 0172-4607660
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“SWOT Analysis” Strengths
High quality and safe food products at affordable prices. Strong and well differentiated brands with leading market shares. Strong equity with consumers as a Company with high quality brands. Ongoing product innovation and renovation, to convert consumer insights. Well diversified product portfolio. Efficient supply chain. Customized solutions. Branded Products. Distribution structure that allows wide reach and coverage in the target markets. Hygienic & safe solutions. Integrated and advanced Information Systems.
Weakness
Complex supply chain configuration. Ability to pass through cost increases in price point Stock Keeping Units.
Opportunities
Potential for expansion in the smaller towns and other geographies. Development of modern retail formats. Potential for growth through increased penetration. Growing trend for `Out of Home' consumption. Growing per capita income.
Threat
Competitive environment with diverse players. People attraction and retention. Rising prices of commodities and fuels.
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Research Methodology A very semantic methodology is proposed for the project which shall cover the aspects of primary and secondary data analysis. The research work being done here is exploratory in nature. The key features of the methodology are:Primary Data Sources: One-to one interaction with 50 people is sought to get their purview on the various question being asked to them. Secondary Data Sources: To keep pace with the existing manta I seek to consult various existing data also in the related areas so that a comprehensive study is formulated. The sources to be used include books, journals, researches, internet and even academicians in the related areas. The required information about Godrej will be taken from their website so that accurate information will be gathered which helps in strengthening of the project.
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Vending Godrej provides direct vending solutions to deliver quality products & services. In this regard your valuable information & time is required to help us provide you better vending solution. Kindly help us to fill this form.
1. 2. 3. 4.
5.
6. 7. 8.
Company (Name & Address) Contact person Designation Phone / Mobile No. E-mail Address Total no. of employees / Sitting staff do you have………. How many vending m/c do you have………., for how long you are using it……. Is the vending m/c rental or purchased………, If rental, what is the rent per month….. What is the average consumption of beverages in your office Tea Coffee Soup Others Flavours you use (Tick)Tea Coffee Soups Plain Cappuccino Tomato Ginger Hot Chocolate Vegetable Cardamom Espresso Others Masala Simple How Tea & Coffee are served (Tick) On Table Self service Both No. of pantry boys do you have….. How do you rate taste & quality of your present tea/coffee/soup. Please tick Just OK Good Very good Fantastic Tea Coffee Soup
9. Who is your present vendor/dealer? …….. 10. Are you satisfied with your dealer’s services Yes No If no kindly specify the reason……………
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Composition of 2CVM & 4 CVM vending machines prevailing in the market
As evident from the graph drawn above, 4 CVM machines occupy the major pie. This also shows that companies just not offer only tea & coffee but other flavours also.
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“Tea / Coffee Served to the employees”
We can see from this chart that majority of the companies are serving the tea/coffee to their employees on the table. This thing concludes that most of the companies are cost conscious & provides tea/coffee 2-3 times a day. After that they charge a price for it.
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“Market Share Analysis of Vending Machine”
From this chart we can say that Nescafe is still the market leader in vending solutions followed by HUL’s Lipton. Godrej’s market share is quite less as compared to Nescafe & Lipton, the reason can be that Godrej has only recently entered in Vending Business, but it is growing at a fast rate. The share of others like Tata, Georgia & other local brands like Ultimate, Sipra, and Sindhi etc constitute 22% of the market share.
17
“Level of Satisfaction with Dealer’s services”
Though quite a good number of customers are satisfied with the services of their present vendor but still there are customers who are not satisfied with the service. So we should focus on these customers & strive to give them best services so as to make them our loyal customers.
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“Feedback from the Market”
As we can see from the graph that still large share of market for vending M/C’s is untapped. 50% of the corporates surveyed are interested in installing the vending m/c in their respective premises. So the future is bright for the vending business.
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Recommendations / Suggestions Godrej have competition in coffee and tea, with Nestle, HUL,Georgia, Cafe Coffee Day. Tata is another player which has recently entered this Vending Business. There will of course be a number of players entering this segment soon. But the key factor really is technology and the service mechanism. What we offer our clients is a service solution where we give them a machine and also maintain it. The machines must be programmed to provide data that can be very critical for the companies we deal with as the machine can tell us which product is moving faster and what the consumption pattern is like. So we are in that sense providing comprehensive solutions to our clients. “In order to have a loyal customer base we have to make our brands relevant to our consumers in their lives. Where, when, how, with whom they drink – all of these aspects matter. We should communicate our brands in the right way and make our products available at an arm’s reach. The challenge facing the tea and coffee industry is how we make them a relevant beverage for the rapidly going-out-of-home segment. Tea and coffee as a beverage continues to dominate the in-home consumption, with a penetration of nearly 90 per cent. However, due to lifestyle changes more and more people are spending time out of home and is not exactly seen as a beverage on the move. This is the main area that we should address by developing both superior formats and value. In India, 90 per cent of all hot beverages are consumed at home. Out-of-home consumption in India is very low, which means there is a lot of potential for this market to grow. Godrej, thus, should intend to make all efforts to encourage out-of-home-consumption by offering good quality tea and coffee at affordable prices. To increase this out-of-home-consumption of tea and coffee the company should have plans up its sleeve, which would include 'customizing' tea and making it acceptable to all regions alike. Hence, for North Indians it should offer masala chai with lots of elaichi and milk, while Mumbaiites may be able to even get cutting chai (a product available in the city alone) comprising a small amount, about two sips, of tea. If people in eastern India like flavoured tea, less milk and light tea leaves, Godrej can customize it to match their tastes. Similarly, for cosmopolitan cities like Mumbai and New Delhi, Hul should plan to install single tea-vending machines, which would offer varieties such as masala, cardamom and so on. As a growth strategy, Godrej should plan to populate smaller towns with his vending machines. Speaking about the market dynamics of the different segments, "The price per cup (Rs 3-4) is not a major issue at public places and hotel installations. The daily volume is also high in these places." 20
The most critical aspect is the after sales service as vending machines operate 24 hours. "In the case of hotels the machines have to be up and running 24X7 and the premix delivery is also crucial. The real challenge is catering to the hotels in small towns. Reaching the installations in small towns fast is a challenge, and keeping it running 24X7 is a challenge, and thus Godrej must meets this challenge with its nationwide service network and also by providing substitute machines in case of breakdown. Another important thing which I think can really work in favour of Godrej vending is that the beverage circuit parts are made up of food grade material.Godrej is the first one in the industry which is providing food grade material in its machines. So Godrej should focus more on this feature for selling vending machines These are some of the recommendations which I think would really make a positive mark on the current scenario of the Vending machine business prevailing in the Indian Economy.
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Limitations of the Project The main limitations of the study are:
The numbers of respondents are limited. As the sample size is less so the responses can be biased. Results may vary from person to person as perception of each individual is different from one another. Sometimes information provided by respondents may be unavailable due to personal problems. Information provided by respondents may be inaccurate. The research had to be completed within a small span of time. This has limited the researcher from choosing a satisfactory number of samples.
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Learning The business is confident of growing its Tea & Coffee business through innovation coupled with an aggressive marketing and rural distribution drive.Out-of-home has been identified as an important channel to drive growth. The current initiatives have helped to establish a strong presence in this segment. Distribution width has been increased with the coverage of Hot Tea Shops and an increased number of vending machines. The domestic coffee business achieved excellent growth in volumes and profits. Expresso, an innovative coffee pre- mix, which delivers a creamy, frothy coffee cup, has also been launched. In order to strengthen its share in the premium segment of the roasted and ground coffee market, a new product, Hot Chocolate, was launched. This product contains 90% premium coffee and 10% chicory, and delivers a superior cup. The pace of innovation was maintained in distribution- related cold chain activity. This resulted in substantial reduction in supply chain costs. Mobile vending continues to receive meticulous attention as it will provide the impetus for further growth in the future. The Business will continue to focus on accelerated growth of the impulse segment, through more focused brands and deliver affordable products through appropriate innovation. This will provide the platform for a stronger performance in the years ahead.
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Bibliography
Books Marketing Management by Phillip Kotler
Websites www.google.co.in www.godrej.com www.scribd.com www.managementparadise.com
Magazines Business World
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