BACKGROUND "When the people of west can sell their burgers worldwide, when the Italians can market
their pizza” So can we sell AMCHI “vada pao” says the managing director Mr Dheeraj gupta, being Inspired by the fastfood burger chain McDonald's, Gupta decided to sell Mumbai's favorite and poor man's food as a brand. He came up with the idea of branded VADA PAV,he initially started experimenting at the local stations based upon the response ,Gupta has changed the rules of business by introducing automation, packaging, a larger size, different cheese, round bread (otherwise the pav is square) and flat patties instead of round. and has grown from one outlet outside a suburban local station, to fifty two in the city. Jumbo king's value proposition is the”HYGIENE” factor which other makers of the vada pav lacked. The name JUMBO KING is derived from the size of the snack, which is slightly bigger than the usual vada pav and packaging,
COMPONY VISION: Jumbo King is run like the Western style fast food giants and it has processes and systems in place. They have functional areas of operations, business development, franchisee relations and marketing. Operations looks into store running, logistics and training. The head office at Jumbo King is the Support Centre, which supports the franchisee network and their staff to run the stores as per the guidelines laid down by the franchising system of Jumbo King. The company has a turnover of Rs 8 crore (under $2 million). The company has plans to open outlets in Pune and Surat, besides other places in Mumbai. It’s is eyeing a turnover of Rs 22-25 crore and 120 outlets this year. Jumboking
plans to open 250 Stores this fiscal year
COMPONY PROFILE (MARKETING):
Marketing looks after the media, promotions, branding etc.
Jumbo King followed an exclusive franchisee model with networking an d stringent quality control. With a one-time investment of Rs 15-18 lakh, the franchisee can acheive an annual revenue of nearly Rs 40 lakh, and can break even in the first three to four months. Jumbo King is not setting up any company-owned stores as the franchisee stores tend to break-even faster, To strengthen its supply chain and other logistics such as central kitchens in major cities, the company has partnered with potato suppliers from Uttar Pradesh to procure the tuber at a constant price of Rs 7.30 per kg throughout the-year as it requires 60,000 kg of potato per month (7.20 lakh kg per annum) for
its Mumbai operations alone. Mr Gupta says that the brand has a long way to go, though it has the pioneer advantage there are many business coming up in this business the recent addition is the GOLI. But jumbo king being first in queue for certain has some advantages .Mr Dheeraj believes that the real competition is not from the local brands but the international food chains and has further expansion plans in Mumbai, delhi and ahmedabad. FINANCE:
From one outlet in 1990, Jumbo King reached 45 by early this year. It is targeting 250 this year, and has already forayed to Gujarat from its home state of Maharashtra. The initial investment was Rs. 200,000 ($4,300). Now, the company plans to pump in Rs. 75 crore ($16.1 million) over the next three years. The money will come from private equity. The margins are barely 10% to 12%"Currently it is into 100% franchising," he says. "In the future, the ratio will be 70% franchisees and 30% company-owned outlets." Jumbo King gets 10% of sales from franchisees as its fee.
. This includes the multinational chains; the Udipi restaurants that dot Indian cities, serving similar fare but without common ownership; and even the low-price Indian Railways catering service, which has outlets at stations. To that extent, the Jumbo pav and McDonald's compete with one another." United Pizza's Khwaja sees it another way. "The real competitor for Jumbo King is not McDonald's but the man selling vada pav on the roadside. They must turn each of them into a Jumbo King franchisee." Jumbo King's next challenge is getting the money together for expansion. Gupta will need funds because he is changing his model. Both models have worked in India. Explains CEO Singh: "Café Coffee Day is a chain of company-owned stores and Jumbo King is into franchising. But at the bottom of it, both are a bunch of young guys trying to create a big brand." Gupta says finding private-equity funds won't be a problem. But what will make or break the chain is this, according to Khwaja: "Indian fast-food chains have not caught on because of the mind-set of Indian entrepreneurs. They under-invest and expect quick profits. Indians typically like to have complete ownership of their
business, and so we end up having small companies. In the chain-food business one needs to have long-term vision and large investments." "The absence of Indian fast-food chains is not because of differences in taste or food habits," says Bidisha Nagaraj, Café Coffee Day's president of marketing. "The entry barrier is not so much the palate as the investment that is required. Rentals themselves are a huge cost. If one is looking at a chain of 100 outlets, it can be a huge amount for a small entrepreneur to invest." "Jumbo King has a great product and a great concept," she adds. "What it needs to do is to work on its distribution model. It needs to look at being present in places like cinema halls, food courts of shopping malls, railways stations and airports. As there is only one product, they can also look at backward integration to bring about more economies of scale." Jumbo King may sell just vada pav. But, in terms of management strategies and decisions, it has a lot on its plate.
SWOT ANALYSIS (S)
Positive Points Reasonable Price : The Jumbo King Vada Pav comes at a reasonable price. At Rs. 5/- for one, it is slightly costlier than its counterpart available on the street. But, you don?t mind paying the extra rupee as long as you get a better quality vada pav. Cleanliness : The place (JK Andheri East) was clean. At least I found it clean on the outside. The people who serve are in aprons, caps and wear gloves. Location : Most of the outlets are located outside railway stations. Weary office goers, after a tiring day at work flock to these outlets just before entering the battlezone (a.k.a railway platform). Brand Name : Works every time. I have seen (and know a few) people who had never eaten a vada pav in their life and always used to lecture us on the unhygienic food, eat the the JK outlet. WEAKNESSES:
The company has a fully automated central kitchen and a modern bakery providing world-class quality products. Thus you are in the restaurant business without the headaches of manufacturing. The company has very good purchasing power, which enables it to source raw materials at prices much lower than any individual restaurant. The company helps the franchisee in recruiting well-trained staff and provides continuous training to help them implement the quality, service and cleanliness standards. The highlight of the franchising model is that any franchisee adhering to the company’s standards can build multiple stores and increase his income many times over. MANAGEMENT PROFILE: Dheeraj Gupta is Founder CEO of Jumbo King Foods. Instead of joining his family business, he decided to set up his own venture. He borrowed Rs. 500,000 from his brother and setup Manali foods to export packaged Indian sweets. However, the business couldn’t take off due to low margins and low shelf life of products. Inspired by fast food burger chain McDonald’s, he decided to sell Vada Pav as a brand. Jumbo king began its jouney on August 23, 2001 from a seed capital of INR 200,000 and currently has a turnover of over INR 200 Million. He holds a degree in finance from Symbiosis, Pune.
DEWANG NERALLA co-founded Financial Technologies along with Jignesh Shah. He drives the strategy and vision of the FT architecture, are software products and related standards for FT’s technologies. Dewang is responsible for introducing new technology architecture and designing components and protocols to deliver cutting-edge technology. Along with the role of chief strategy officer, he constantly looks after emerging technology applications in the financial markets, market opportunities, and strategic partnerships. His current interest lies in taking up the challenge to work on mobile-based payment in lieu of credit card and ensuring that this concept is well accepted by the masses.
Marketing Executive Jumbo King Foods Pvt Ltd Job Function : Hotel/Restaurant, Marketing/MR/Media Planning, Sales/Business Development Specialization : Direct/Commission Sales, Host/Hostess, Operations, Direct marketing, Market Research, Marketing Strategy Industry : Catering/Food Services/Restaurant, Entertainment/Media, Hotel/Travel/Tourism/Airlines/Hospitality Qualification : School & Graduation - B.A., B.Com, B.Pharm, B.Plan, B.Sc, BBA, BCA, Diploma, B.Ed, BHM Experience : 0 - 2 Level : Entry Level/Fresher Location : MAHARASHTRA (Mumbai) Key Skills : Open to Travelling, Pleasing Personality, Good Communication Skills JOB DESCRIPTION : Key Role will be as follows:- Conduct surveys, talk to customers - Gather information - Analyse data including recognizing needs, complaints resolution and achievement of quality service standards. - Able to identify improvement opportunities on a continual basis. Freshers(HSC pass) can apply Candidate should be open to travel at all locations within Mumbai If interested then walkin with an updated copy of your resume at our office directly at the address mentioned below:Jumboking Foods Pvt Ltd A-43, Virwani Ind Estate, 1st Floor, Nr W.E. Highway, Goregaon (E) Mumbai- 400063 Tel: 022 28710308,28710269 COMPANY DESCRIPTION : Jumbo King began its journey to brand the Vada Pav on 23rd August 2001. Inspired by western models and applying it to Indian food, Jumbo King believes that the common man has the constitutional right to get hygienic food at an affordable price!
Fast Food Retail Chain Territory: Nationwide Training Provided: Initial Franchisee Certification Programme for 2 days and then continuous upgradation Marketing Support: Branding,Promotions, Tie-ups, various Marketing activities to keep desired sales level. Agreement Term: Initial Terms 9 years, to be renewed every 3rd year of operation.
Number Of Units: Presently 45 Franchisee Units Outside Country: Plan to operate internationally in future Investment Required: 5, 00,000.00 to 1, 00,00,000.00 Business Established: 2001 Franchising Commenced: 2004 Qualifications Required: Business Experience of 4 to 5 years; preferably in food and beverage industry; Time commitment of 10/12 hours in a week; Minimum graduate, with knowledge of Local and English Language.