3. The Market
3.1. Overview
We plan to launch our product and services in the Indian sub-continent. Indian retail market is in the transition phase from being unorganized to organized retail sector. Since the opening of Indian economy in the start of July 1991, many multinational companies and brands have entered India and have globalized Indian economy. Wall mart and Starbucks would be a latest trend in this sphere. India has a huge emergence of middle class which has learnt to spend money on life style and eating and drinking outside on regular basis. India is on fast-track to becoming a large and globally important consumer economy. The Indian middle class was estimated to be 250 million people in 2007; it will reach 600 million by 2030.1
3.1. Overview
3.1.1. Literature on Fast Food Consumption in India
There has been a major shift in food habits in the metropolitan cities. According to a survey undertaken by the Associated Chambers of Commerce and Industry of India (Assocham) about 86% of households prefer to have instant or fast food due to steep rise in dual income level and standard of living, convenience, and influence of western countries. In a survey, Assocham also claims that Indian food processing market will show fast paced growth in the next five years.
Some of the highlights of the survey results related to our Business plan:
The survey points out that these convenience foods are preferred (86%) mainly by nuclear families where both husband and wife are working or by singles who wish to avoid hotel food or people who do not have time, patience or the expertise to prepare in a traditional method.
According to the survey, metropolitans are the largest consumers of processed food and are going to be the biggest consumers of processed food because of their ever increasing per capita income and lifestyle which is also changing very rapidly.
Consumer spending rate on processed food had increased at an average rate of 7.6%
annually during the years 2008 to 2010 and this was expected to continue as the consumer expense would rise with an average of around 8.6% till the year 2012.
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About 92% of the nuclear family feel that they have less free time than before they had kids, it is now a common fact that they are spending less time in the kitchen, and are turning to takeout, delivered food, and semi-prepared meals to help feed the family at mealtime.
About 72% of bachelors prefer the convenience food because of less cost, time and energy saving, convenience in preparation and consumption in the busy and hectic life.
The very term 'instant” means simple, fast, convenient and affordable food which is easy and fast to prepare besides being hygienic, free from microbial contamination and also convenient to eat, say the bachelors.
Over 65% of working women revealed that the present trend changed the habits to foods which are simple and easy to digest. Hence, the existence of these foods fulfilled all the needs of modern human being.
An article in the Times of India, quotes that organized Indian food industry has reached
$13 billion and will reach $28 billion by 2018.Casual dining and quick service restaurants (QSRs) account for 70% of the organized segment, while pubs, bars, clubs and lounges (PBCL) form 12%, cafes take 8% share leaving the rest with fine-dining and frozen dessert outlets. 2
3.1.2. Difference from Other Beverage Chains in Target Market
In India the beverage sector is either a class market restricted to expensive coffee shops like Barista and Café Coffee Day whose business model is mostly around coffee drinks and the about the experience or on the other hand are the cheap category juice vendors or tea stalls, which are unhygienic and caters only to lower middle class or laborers.
There is a dearth of the middle ground which can cater to all taste and all class. Our chain will fill the gap in the market.
3.1.3. Our Customers
Our product will mainly target the mass market. It will provide affordable, unique and stylish experience to them. Our menu will have catchy names and phrases to create the hype and to
2 http://timesofindia.indiatimes.com/business/india-business/Eating-out-Indians-cook-up-48-billion-food-business/articleshow/20321889.cms?intenttarget=no
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connect with the customers. The menu will be segmented on the basis of different age groups and will also have something for the health conscious people and emerging working class.
3.1.4. Value Propositions Offered to Our Customer
Convenience of ready to go; take away drink concept not widely available across shopping malls.
Affordable.
Hygienic.
Innovative and newly styled drink menu.
Healthy options for health conscious people. Available substitute for carbonated and high sugar drinks.
Trendy and cool concept.
Quenches their thirst and also fulfilling due to edible nature of the drinks.
3.1.5. Size of the Market
The market is enormous with an estimated 267 million middle class people across India and more so in the other countries in the sub-continent. However, we want to highlight the tens of thousands customers that enter daily in the shopping areas where we plan to open our kiosks.
3.1.6. Market Structure
Beverage selling in India has been largely unorganized and limited to juice stalls across the country and tea stalls by local vendors which cater to blue collar workers and make only traditional hot Indian milk tea with some crispy snacks.
Off lately, chains like barista3 and café coffee4 day have organized this sector and have created a unique brand identity and customer segments for them.
Starbucks in joint venture with TATA is a new entry in the game.5 We also saw entry of
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After careful evaluation of the market we conclude that we will be competing in a monopolistic competitive environment.
We offer to our customers something unique and different. Though there are so many substitutes to it but no major direct competition yet.