UNIVERSITY OF MANAGEMENT & TECHNOLOGY

RETAILING & DISTRIBUTION MANAGEMENT

CHAI JUNCTION

2-C 3 Gulberg, Hussain Chowk Lahore

Report Submitted By: M. Faiq Adnan (F2018302001)

Hafiz Junaid Ayub (F2018302003)
Ali Raza (F2018302016)
Wasif Rasheed (F2018302013)
Ahsan Shabbir Khan (F2018302019)

Report Submitted To: Sir Muhammad Jawad

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 TABLE OF CONTENT

CONTENTS Page No
Report Summery ------------------------------------------------------------------ 03
Introduction ------------------------------------------------------------------------ 04
Retail Mix -------------------------------------------------------------------------- 05
 Merchandise assortment ------------------------------------------------- 05
 Marketing / Communication Mix -------------------------------------- 05

 Location ------------------------------------------------------------------- 05

 Price ------------------------------------------------------------------------ 05
06
 Store Design and Display -----------------------------------------------
06
 Customer Service --------------------------------------------------------
Channels ---------------------------------------------------------------------------- 06
Consumer behavior --------------------------------------------------------------- 06
06
 Need recognition ---------------------------------------------------------
06
 Information search --------------------------------------------------------
07
 Evaluation of alternatives -----------------------------------------------
07
 Purchase decision ---------------------------------------------------------
07
 Post –purchase behavior -------------------------------------------------
07
Retail functions -------------------------------------------------------------------- 07
 Market --------------------------------------------------------------------- 07
 Financial ------------------------------------------------------------------- 07

 Location site -------------------------------------------------------------- 08

 Information system ------------------------------------------------------ 08

 HRM ---------------------------------------------------------------------- 08
 SCM
08
------------------------------------------------------------------------ 08
 Customers Relationship -------------------------------------------------
Merchandise management ------------------------------------------------------- 09
Store management ---------------------------------------------------------------- 09
SWOT analysis -------------------------------------------------------------------- 10
Suggestions ------------------------------------------------------------------------ 10
Conclusion ------------------------------------------------------------------------- 11
Report Summary

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The report is prepared for the Chai Junction (a tea house) regarding their retail management after
visiting the restaurant and having discussion with their partners. In this report we have discussed
their retail strategy, retail mix, functions, merchandising and store management. We have also
done their SWOT analysis lastly with conclusion and suggested them some suitable actions that
will be beneficial for them.

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 INTRODUCTION:

This Tea House was introduced by 2 partners who are actually cousins in relation. They
inaugurated Chai Junction on 26th Dec-2018. They start their tea house with a different idea of
adding 30 flavors of tea. They have specialty in Tandoori Chai.
They are also launching different items in their menu which is converting this tea house into a
restaurant. In Ramadan they added karahi in their menu and now they have added an Arabic dish
name “Crepe”.
They are located in the heart of Gulberg, Hussain chowk. In start, they had seating capacity for
only 48 persons and now as they are growing and establishing their business, they have enhanced
their capacity which can manage more than 100 persons.
They have total 20 employees including 4 managers. They have Centralized system.

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 RETAIL MIX:

Retail mix is a marketing plan that responds to a set of varying factors. A retail mix plan targets
strategies to attract customers and influence their purchasing ability. These factors mainly
include the following:
 Merchandise Assortment
 Marketing / Communication Mix
 Location
 Price
 Store Layout and Design
 Customer Service

1. Merchandise assortment:
They are mainly dealing in 3 categories i.e. chai, parathas and fries. The range for these
includes the following:
 30 Flavors of Chai.
 10 Flavors of Paratha.
 4 types of fries and specialty in Poutine fries.
All these items are prepared on the demand of the customers; however, their
ingredients are mixed in the quantity to manage the full day demand and then stored
in the temperature controlled devices like refrigerators in their store.

2. Marketing / Communication Mix:

Their communication mix includes the following elements:
 Advertising – Through social media, digital marketing.
 Discounts and Promotions – They offer occasional discounts and also they have
MOUs.
 Through Broachers.
 Through Celebrities.

3. Location:
They chose a location in which there are already number of restaurants and food chains
around there surroundings but there was no such tea house. They are unique in their
products. They are situated in the heart of Gulberg and their actual address is 2-C 3
Gulberg, Hussain Chowk Lahore. The Chai Junction is built on the land owned by the
partners.

4. Price:
They are using the market penetration strategy of pricing for their products. They are
selling their products at a price lower than the market. The prices for some of the
products are as follows:

 Tandoori Chai: 220/- per cup with fries.

 Pizza Paratha: 279/-
 Chicken grilled Sandwich: 339/- with fries.
 Savoury Crepe: 249/-

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 5. Store Design and Display:
Store design and display includes the factors like displays, furnishing, lighting, music and
store layout to create a brand specific appeal. They have designed the Chai Junction as
 They have 25% open air seating, 25% totally covered area and 50% area covered
with shed.
 They have decorated their tea house with special lights.
 They have used painted flexes which depicts the traditional culture.
 They have allocated space for live qawali.
 They have carpeted floor.
 They are using the round tables with chairs.
 They are using traditional Pakistani dress (shalwar kameez) as their uniform.
Black color is for senior employees and khaki color is for junior employees.

6. Customer Service:
They are providing the number of services to keep their customers happy and satisfied
which includes the following:
 Live Qawali Arrangement
 Free décor for the special events like birthdays, anniversaries etc.
 Occasionally special offers
 Music on demand
 Gift vouchers
 Waiting area
 Giveaways
 Special rewards for the loyal customers
 Payment through Master/Visa card.
 Issues faced by the customers are communicated by feedback forms and the
Partners review issues for the improvements.

CHANNELS:

They are using the direct channels for the distribution of the items they are offering.
 Accepting orders to dine in.
 They offer Reservation on calls.
 Take away orders on calls.

CONSUMER BHEAVIOR:

I. NEED RECOGNITION:
 When they are hungry. (INTERNAL)
 Through Social media, through environment. (EXTERNAL)

II. INFORMATION SEARCH:

 Personal Source (Friends, and Family)
 Commercial Source (Social media, advertisements)

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III. EVALUATION OF ALTERNATIVES:
 Product quality and Prices.
 They will decide which matter most to me?

IV. PURCHASE DECISION:

 Attitudes of others.
 Unexpected situational factor.

V. POST –PURCHASE BEHAVIOR:

 Satisfied customers.
 Un-satisfied customers.

The consumers perceive Chai Junction as a brand now. They are satisfied with the quality they
are getting along with the low prices. They are not only visiting Chai Junction to satisfy their
hunger needs but also to enjoy the ambiance and customer service. They find Chai Junction as
the best option for this. Consumers are also recommending Chai junction to other friends as well.
If sometimes they do not get what they wanted Chai Junction offers them remedies but this once
in a blue moon that Chai Junction fails to satisfy the customer needs. In short, consumer is
enjoying everything at Chai Junction.
There are two types of consumer behaviors
1) Habitual buying behavior
2) Variety seeking behavior

RETAIL FUNCTIONS:

1. Market:

 Target market (Higher middle class).

 Demographic (Age 20 to 40 years).
 Geographic (Hussain Chowk, Gulberg. Many food chains are located there).

2. FINANCIAL:

 Capital Investment:
They started their business by investing Rs. 18, 60,000/-

 Business Type:
Partnership (2 Partners)

 Debt-Equity Ratio:
Debt: Nil
Equity:100%

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3. LOCATION SITE:

 Chose the location surrounded by many food chains

 Doing the business on their own land.

4. IS:

 They have their customized software to manger orders, and supervise inventory
developed by Orbitek.
 Order takers punch customers order in Tablets and then information is flowed to
the related departments i.e. Kitchen and Accounts.
 After the food is prepared by kitchen, they communicate it through their systems
to waiters to serve it.

5. HRM:

 Hiring is done by the HR Manager.

 Total number of employees at Chai Junction is 20.
 Chai Junction also arranges training program for supervisors/managers by
COTHAM.

6. SCM:

 Procurement:

I. They are Procuring items through wholesalers and Manufacturers directly.

II. They have their suppliers, who deliver the items to the door step.
III. They also have their own vehicles to purchase from the suppliers who do
not offer delivery.

 STORAGE/WAREHOUSING:

i. They have allocated the space in their facility to manage the stocks.
ii. They stock the inventory for the demand of 2 days as their safety stock.

 Processing:

Items are processed /cooked after receiving orders by the customers.

 Retailing & Distribution:

After processing /cooking of food, they serve it to customers at table or pack it for
take away.

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 7. CUSTOMERS RELATIONSHIP:
They have developed the relationship with customers by offering high quality services at
reasonably low prices. They satisfy the customer needs very efficiently. They are always
willing to build relationships with customers. Customers are also happy with the actions /
behavior of Chai Junction.
MERCHANDISE MANAGEMENT
They have divided their merchandise in the 3 major categories. They plan the demand on daily
basis and maintain the safety stock for the demand of 2 days. After the planning of the demand
they purchase it from their selected suppliers to get the required step to be delivered at the door
step.As they price their products on the strategy of Market Penetration, they have reasonable
prices as compared to the market.
The communication mix includes advertising, digital marketing, promotions and discounts.

STORE MANAGEMENT
They have designed the Chai Junction in a way that they have open air seating along with indoor
seating and area covered with shed as well. They decorates the area with lights having special
effects. They also use painted flexes to depict the traditional culture. They are using the round
tables with chairs. They have carpeted floor. They have allocated space for live qawali.

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 SWOT ANALYSIS:

STRENGTH WEAKNESESS

 Quality with Quantity.  Manual attendance.

 Customers Satisfaction.
 Market Competitive prices.
 Better customer services.
 Cooperative Employees.
 No rent.
 Online System
 Low staff turnover
 Low Staff literacy rate.
 Raw material wastage.
 Poor handling of Crockery.
 Parking Space.
 Security Issues.
 Poor transport for purchasing.
 No home delivery service.

OPPORTUNITIES THREATS

 Loyal customers.  Huge number of new entrants.

 New flavors.  Changing economies.
 Introduction of fast food as well.  High tax rates.
 Open another branch.  Fluctuation in Electricity voltage.
 Partnership with suppliers.

SUGGESTIONS:

1. They should introduce bio-matric system for attendance.

2. They should recruit staff with minimum Bachelor level of education.
3. Wastage of raw material can be eliminated through good communication among the
departments.
4. They have poor mode of transport, they have bikes for their purchasing. They should buy
a Pick-up for this.
5. They must hire Valet Parking service to manage their parking issues.
6. They have security issues; they should contract with some security agencies.
7. They should provide home delivery services.
8. Introduce fast food. As there is a huge gap for the fast food like grilled burgers,
sandwiches and stuffed naan.
9. They should purchase their own Transformer to eliminate the damage caused by the
fluctuations in the electric volts.
10. They should enhance their business by opening new branch.

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CONCLUSION:

Chai junction continually achieving progress due to his efficient Customers services and friendly
environment for families, it was established in Dec, 2018 with two persons at Hussain Chowk.
After detailed review and discussion with them we conclude that their main focus is Different
types of Chai with great taste, after that they enhance their menu, sitting capacity and many more
changes like they built a place for live “QAWALI”, Meanwhile they are also going to Launch
another Outlet in front of Expo Centre Johar Town Lahore, they are very string to build a
relationship with their customers and mostly customers are loyal with them and they visit
multiple time in a week. In winters they are also providing bonfire to make a healthy
environment for their Customers. They are most conscious about quality and healthy food on
best Competitive price which help them to take advantage on multiple food Chains.

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