BBA Project Report

Thảo Mộc
Submitted by
Syeda Hadia (1701-BBA025)
Monaima Shaikh (1701-BBA014)
Maidah Shaikh (1701-BBA013)
Arisha Chachar (1701-BBA003)
Pashmina Inayat Hussain (1701-BBA018)
Anzela Memon (1701-BBA001)
Supervisor
Assistant Professor Shabina Shaikh
Submitted in partial requirement for the degree of Bachelor of Business
Administration (Honors)
Department of Management Sciences
Faculty of Commerce, Economics and Management Sciences
ISRA UNIVERSITY HYDERABAD
JULY 2020
 ISRA UNVERSITY HYDERABAD
DEPARTMENT OF MANAGEMENT SCIENCES

CERTIFICATE

This is to certify that Ms. Syeda Hadia (1701-BBA025), Ms. Monaima Shaikh (1701-
BBA014), Ms. Maidah Shaikh (1701-BBA013), Ms. Arisha Chachar (1701-BBA003), Ms.
Pashmina Inayat (1701-BBA018), Ms. Anzela Memon (1701-BBA001) student of BBA (hons)
has worked under my supervision for the completion of BBA BUSINESS RESEARCH
PROJECT REPORT on Thảo Mộc as a partial requirement for the award of the degree of
BBA (hons) and that his/her work is satisfactory. This report contain 7% plagiarism.

Chairperson: Dr. Qamar ud din Mahar Supervisor: Assistant professor Shabina Shaikh
Department of Management Sciences Department of Management Sciences
ISRA UNIVERSITY, HYDERABAD ISRA UNIVERSITY, HYDERABAD
 DEDICATION
We would like to dedicate this project to our teachers and parents as they are the one who
motivates us in every aspect of our life.
Table of Contents
Acknowledgment ........................................................................................................................... i

List of Tables ................................................................................................................................ ii

List of Figures .............................................................................................................................. iii

Executive summary..................................................................................................................... iv

Chapter 1 Business Description ................................................................................................... 1

1.1: Introduction of the project ....................................................................................................1

1.2 Objectives .................................................................................................................................2

1.3 Problem Statement .................................................................................................................... 3

1.4 Methodology ............................................................................................................................. 3

1.5: Introduction of the company .................................................................................................... 4

1.6 Mission and slogan ................................................................................................................... 5

1.7 Portfolio .................................................................................................................................... 5

1.8 Core competencies .................................................................................................................... 5

1.9 Location .................................................................................................................................... 6

1.10 Introduction of the Industry .................................................................................................... 6

Chapter 2 Management and Human Resource ...........................................................................8

2.1 Business Management ...............................................................................................................8

2.2 HRM .......................................................................................................................................11

Chapter 3 Supply Chain Management .....................................................................................14

3.1 strategy of supply chain ...........................................................................................................14

3.2 Warehouse and inventory management ...................................................................................17

3.3 Transportation, logistics and tracking .....................................................................................18

3.4 Retailing outlet ........................................................................................................................18

3.5 Slotting, allowances, shelving and POS display ......................................................................18

Chapters 4 Business Marketing .................................................................................................19

4.1 Target Market ..........................................................................................................................23

4.2 Quantitative Result...................................................................................................................23

4.3 Data Analysis ...........................................................................................................................27

4. 4 The customer base...................................................................................................................28

4. 5 Sales and sales promotion .......................................................................................................28

4.6 Sales Promotion Strategies .....................................................................................................28

4.7 Complaint handing strategies ...................................................................................................29

4.8 Competitive Profile ..................................................................................................................30

Chapter 5 Finance Plan ...............................................................................................................32

5.1 Capital Structure ......................................................................................................................32

5.2 Startup Summary .....................................................................................................................33

5.3 Costing .....................................................................................................................................33

5.4 Target per year .........................................................................................................................34

5.5 Breakeven Analysis .................................................................................................................35

5.6 Markup .....................................................................................................................................36

5.7 Financial statements ................................................................................................................37

References .....................................................................................................................................42
 Acknowledgement
We would like to thank Dr. Qamar ud din Mahar, Chairperson Department of Management
Science and Assistant professor Shabina Shaikh, Isra University Hyderabad as without her
guidance and help we would never be able to complete this project.

i
 LIST OF TABLES

Table Description Page No

2.1 Organizational Hierarchy 11

ii
 LIST OF FIGURES

Figures Description Page No

1.1 Core & Side Products 5

1.2 Location 6
2.1 Layout 8
3.1 Supply Chain Strategy 14
3.2 Inbound Logistic 15
3.3 Outbound Logistic 16
3.4 Product Portfolio 18
5.1 Capital Structure 32

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 Executive Summary
Thảo Mộc is simple cafe that offers herbal tea, herbal smoothies, herbal muffins & cookies. Our
main product is organic herbal teas. As we don’t have any such competitor in Hyderabad, so we
come up with this unique idea. It aimed at providing low cost alternative to the medicines &
providing benefits to people such as reducing anxiety & depression & helps in getting better
sleep. Our main purpose to initiate this project is to target those people who have anxiety &
depression; initially our target market will be Hyderabad region.

There are hundreds of ways to market café business, especially in the digital connected word we
live in now. When it comes to health promoting marketing, there are lot of ways to advertise &
promote the products & services but Thảo Mộc planned to promote through more interesting &
exciting campaigns to engage the customers. Our most of the business marketing will be mobile
centric because mobile users are in large number. We promote cafe offers & promotions straight
to their phones through face book, Instagram, E-mail etc.

Thảo Mộc is financed by six partners equally with the worth of rupees 200,000 (per person)
equity is 12 Lac and 1 Million loan amount from the Prime Ministers Kamayab Jawan-Youth
Entrepreneurship Scheme (yes) with the interest 3% per annum, with Grace period of up to 1
year. The total startup capital is 2200,000 In future, the owners will fund the cafe by retained
earnings & through their personal savings too. Expansion of the business will be country wide &
then will expand globally.

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 CHAPTER 1
BUSINESS DESCRIPTION
Our Mission is to create a vibrant café which promotes Health and Happiness with greater
tasting that Refines, Flashes and inspires our Communities.

1.1: INTRODUCTION OF THE PROJECT

Thảo Mộc means herbs in Vietnamese language; it is a relatively small and simple café with the
infusion of variety of products made with dried and fresh herbs. The products we indent to offer
is: herbal cookies, smoothies, teas, and muffins. Our main and core product is organic herbal
teas.

The main idea behind this startup is to come up with something new in the market which helps
society in a better way. By providing herbal teas, cookies, smoothies, teas and muffins. We
intend to reduce anxiety and depression from the society by flavors. The upswing of popularity
of herbal products in past few decades is justifiable for not only their vibrant flavors but also
their uncountable mental and physical health benefits. We aim to enable customers to reap all the
benefits. However, is considered, natural alternative to prescription medicines. Coming up with
this idea that if consumer starts drinking or eating our products which are made up of herbs for
its wonderful taste and aroma. They can gain countless benefits such as reduction in anxiety,
stress, depression and soothing joint pain, overcoming sluggishness, aiding digestion, or sleeping
better etc. As we don’t have any competitor in Hyderabad because we are coming up with

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 something unique in Hyderabad’s market. Our market is segmented on the basis of flavor type
(lavender, thyme, basil, mint, raw material and packaging.

1.2: OUR OBJECTIVES

The objectives of our cafe are,

i. To provide fairly priced, ethnically diverse healthy options.

ii. To provide excellent customer service.
iii. To build a healthy and a comforting environment.

1.3: PROBLEM STATEMENT (PROBLEM/GROWTH)

1.3.1: Background The author Husain took a survey of Pakistan and he founded that out of
55 cases, 54 cases have a depression disorder. (Husain, 2000).

We have identify that most of the people in our society take heavy medicines and anti-depressant
as for to reduce anxiety and depression which in result creates a worse changes in their physical
abilities as well as in their mental health, and majority of the people are still unaware of lost cost
alternatives, so we come up with the new or low cost alternative which reduce the anxiety and
depression in a healthy way i.e. Herbal teas.

1.3.2: Statement How to reduce anxiety and depression in a healthy way? How to spread
awareness among people? How to motivate people to use this alternative?

1.3.3: Literature Review(Rationale) The main objectives of our ideas is to build a

healthy and a comforting environment, and to reduce the depression from the society and to build
a strong market position in our society and also make people to believe in it that the herbal teas
are not only a solution of their depression but it also tastes like a heaven, and we use a
conceptual study because we observe this situation on our daily basis and found it that this is one
of the major problem that people face.

The author (Ravikumar, 2014) has stated that herbal teas are beneficial because they are the
mixture of different roots and leaves of plants; they also help to induce relaxation and strength
the immune system.

The author(Pinto, 2013) has stated that the herbal teas are underrated but they have a million of
benefits in which one of those is metabolizing and circulating the blood, he mainly focus on the
health benefits and reaching around the different sites.

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 1.4: METHODOLOGY

1.4.1: Description of Methodology We’ve used both the qualitative & quantitative
research for collecting our data.

i. Qualitative Research In Qualitative research, “Thảo Mộc” conducted market research

through semi-structured Interview tool.
ii. Semi-structured Interview-The reason to select: It is the most flexible tool that combines
an open-ended question with the opportunity to explore further responses. The benefits of
choosing the Semi-structure Interview is that people aren’t bound to the specific responses &
we generalize the questions to encourage people to say whatever they want. “Thảo Mộc”
team has grouped the people into two (2), the user & non-users. Because we’ve observed that
it’s not much difficult for the peoples (who use green teas) to switch on herbal teas as
compared to non-users because most of the time they doesn’t like the taste of herbs at all &
these aren’t the part of their diet.
iii. Quantitative Research: In Quantitative Research, “Thảo Mộc” conducted market research
through survey tool.
iv. The reason to select the survey: Because it is the appropriate way to ask questions to the
people about what they think about our business idea.For our project idea we’ve chosen
exploratory method as well because the problems exist but effective solution isn’t given by
researchers & we’re the only providers who come up with the new & better solution.

1.4.2: Design of Study

(http://www.pbs.gov.pk/sites/default/files/bwpsr/sindh/HYDERABAD_SUMMARY.pdf, 2018)

For collecting our survey sample we’ve selected “Yamane formula” that’s particularly designed
for calculating the sample size.
For the validity of qualitative research we’ll use Respondent validity/member check technique &
for quantitative research we’ll use Adaptive survey.

• To determine the sample size:

N= N n= sample size

1+N (e)2 N= population size

E= acceptable sampling error (i.e. 5%)

• Population of Hyderabad = 2,201,079

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 = 2,201,079 = 400

1+ 2,201,079 (0.05)2

1.4.3: Data analysis by using “Yamane formula” we’ve come to conclusion that 400
participant filled out our sample survey. This Data is analyzed through statistical analysis. MS
excel will be used & we represent the data through pie charts.

1.5: INTRODUCTION OF THE COMPANY

1.5.1: Type of Business

“Thảo Mộc” is a partnership business, which consists of six partners. Each partner is working
partner and has equal rights in business. Each partner has invested equal amount of capital in
business and receives equal ratio of profit / loss. Each partner is equally liable to business and is
responsible to carry out business related activities & operations.

1.5.2: Management and Ownership

i. Chief Executive Officer or President Syeda Hadia who works as CEO of “Thảo Mộc” has
responsibility for the overall success of organization. She can play a key role in success of
Thảo Mộc.
ii. Chief Manager: Pashmina Inayat who works as a chief manager has a responsibility to
look after every aspect our business and establish coordination with staff with skills in the
field of managing task and communication skills.
iii. Manager Finance Maidah Shaikh who works as a manager finance of “Thảo Mộc” has a
responsibility of directing all aspects of accounting operations, overseeing all transaction
related to journal ledger, receivables, payables, and payroll and financial reporting. She can
play an important role in strategic guidance around capital financing.
iv. Manager HR Arisha Chachar who works as a manager HR for our project has a
responsibility of recruiting and staffing and responsible for developing organizational
departmental planning, and also play important role in employee safety, welfare, wellness,
and health.
v. Manager Marketing Anzela Memon who works as a manager marketing has responsibility
of marketing strategies such as developing a pricing & advertising strategy and evaluating
competitors.
vi. Manager External Affairs and Sales Monaima Shaikh who works as a sales manager has
responsibility to help and monitor the consumer and the personnel; she’s also responsible for
coordinating with the clients and the trainers.

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 Ownership: The “Thảo Mộc” has six owners. It’s a partnership base business with all partners
related to equal investments, debts and profits.

1.6: MISSION AND SLOGAN

Mission statement:

“Our mission is to create a vibrant café which promotes health and happiness with greater tasting
that Refines, Flashes and inspires our communities.”

Slogan:

“The Hub for Healthy Lifestyle”

1.7: PORTFOLIO

Herbal Teas
Herbal Smoothies
Herbal Cookies
Herbal Muffins
Fig No: 1.1 Core and Side Products

1.8: CORE COMPETENCIES

i. First herbal café in Hyderabad.
ii. High quality of products.
iii. Offer versatile flavoring of teas.
iv. Organic products.
v. Tangible resources
vi. Herbal products such as herbal teas, herbal smoothies, herbal cookies and herbal muffins
which reduce the anxiety depression in our society.
vii. Intangible resources: Knowledge, logo and unique business name “Thảo Mộc”.

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1.9: LOCATION
2ndfloor, Boulevard Mall Hyderabad

Fig No: 1.2: Location

1.10: INTRODUCTION OF THE INDUSTRY

1.10.1: Size of the Industry (Memon, 2016)

Our product comes in food industry in which our country Pakistan is the 2 ndlargest industry after
textiles. Because it has a wide range of food items most rapidly growing items are bakery items,
sugar, biscuits and fruit juices etc. It is also changing according to lifestyle and traditional eating
habits. As Pakistani dishes are of different varieties and are made up of flavored spices and herbs
many fast food chains are opened as some people prefer healthy food and some are fast food
lovers so it can be beneficial for both types of people that are why food industry is successful in
Pakistan.

1.10.2: Evolution of Industry

Food industry in Pakistan is transforming and developing every day many new items are
introducing with a new way of thinking and people of Pakistan love to eat and they also
appreciate if anything new is introduced to them in fact “Pakistanis” spend their 40% of
household income on food and that’s the reason of various international food chains are willing
to open their franchises in Pakistan. Although there were many problems in start of food industry
like no availability of skilled workers and lack of capital but then they worked on these problems
and now we can see our food sector is growing day by day its growth rate has been estimated at
7.46 percent per annum. Due to this quick growing demand Pakistan is becoming the second
fastest growth sector in food.

1.10.3: The Trend-Where the Industry Is To Be Expected In 5 To 10 Years

This industry will be more successful and will on its high peak in 5 to 10 years because the food
industry has managed to generate profitability and is well received by the local masses as well

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and food consumption has been increased radically because people prefer convenience with good
taste and healthy food.

1.10.4: Key Players in the Industry

There are many key players in food industry for example Ms Donald’s, Pizza hut, Shan foods&
K&NS.

i. Mc Donald’s:(Kamal, 2014)

Mc Donald’s opened there 1st franchise in Pakistan in 1998 in Lahore. It is a successful family
restaurant with excellent quality service where children can enjoy their food with fun.

ii. Pizza Hut:

It is the biggest pizza restaurant in Pakistan. Which is popular for its great taste and variety of
deals with great menu with flavorful spices which are attractive for people and they love to eat?

iii. Shan Foods:

It is one of the most popular brands in Pakistan which offers a variety of recipe mixes like
Biryani masala, korma masala, Chat masala and red chili powder masala.

iv. K&NS:

K&NS is a brand which offers ready to cook chicken products with their unique tastes which
mostly kids love to eat.

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 CHAPTER 2
MANAGEMENT & HUMAN RESOURCE
2.1: BUSINESS MANAGEMENT
2.1.1: Layout of Thảo Mộc

Fig No: 2.1 Layout

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 2.1.2: process of ordering and delivering items

Customer Customer Payment is Barista makes

wait in a line places an made Take away No a drink
order

Customer Customer leaves

a store
enter in a Yes
store

Order in
process

Customer
leaves a store

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 2.1.3: Steps of ordering and delivering items

i. Customer enter in a store

The first step of our café is to interact with the customer when they enter into the café.

ii. Customer wait in a line

The second step shows that the customer makes a quo and wait for their order.

iii. Customer place an order

The third step is that customer places their order, basically what they prefer to drink or eat.

iv. Payment is made

The forth step is that customer forward towards the cashier counter and pay their bill.

v. Take away

The fifth step is the option or alternative for the customers whether they want to take away or
dining. If yes so they can place their order so that the barista make their order and after that they
can exist the café.

vi. Barista makes a drink

The sixth step is for those who prefer to sit and enjoy their drink in the café.

vii. Customer leaves a store

The seventh and the last step show that the customer leaves the store in the satisfactory
condition.

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 2.2: HUMAN RESOURCE MANAGEMENT

2.2.1: Organizational Hierarchy

CEO

Finance
Cheif Manager HR Manager Manager Marketing Manager Manager External
Affairs and sales

NAME DESIGNATION QUALIFICATION

Syeda Hadia CEO Business Graduate
Management specialization
Pashmina Inayat Chief Manager Business Graduate with
Management specialization
Arisha Chachar HR Manager Business Graduate with HR
specialization
Maidah Kamran Finance Manager Business Graduate with
Finance specialization
Anzela Memon Marketing Manager Business Graduate with
marketing specialization
Monaima Shaikh Manager External Affairs and Business Graduate with
sales marketing specialization
Table 2.1 Organization Hierarchy

2.2.2: Roles and Responsibilities of Members (Job Description)

1. Chief Executive officer (CEO)

i. To manage the overall operations and resources of the company.

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ii. To make major cooperative decision.
iii. To develop and implement overall organization.
iv. Overseeing the success of the organization to reach company goal.

2. Chief Manager

i. To plan and divide the task of group to individually.

ii. To supervise the employees.
iii. To provide the guideline to the staff.
iv. Set objective for the HR team.
v. Support and suggest improvements to the entire recruitment process.

3. HR Manager

i. Recruiting and staffing.

ii. Organizational departmental planning.
iii. Employee safety, welfare, wellness, and health.
iv. Employee development needs assessment, and training.

4. Manager Finance

i. Reveal and analysis financial record and produce economic statements.

ii. Put together finance and control charges.
iii. Offer recommendation and course of traders.
iv. Manipulate bank account.

5. Marketing Manager

i. Developing a pricing strategy that maximizes profit and market share but consider customer
satisfaction.
ii. Identifying new customer.
iii. Supporting sales and lead generation efforts.
iv. Compiling lists describing our organization’s offerings.
v. Developing and managing advertising campaigns.

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 vi. Evaluating and maintaining marketing efforts.
vii. Communicating the marketing plan.
viii. Evaluating competitors.
ix. Building brand awareness and positioning.
x. Researching demand for the organization’s products and service.
xi. Handling social media, public relation efforts. And content marketing.

6. Manager External Affairs and Sales

i. Help and monitor the consumer and the personnel.

ii. Coordination with the client and the trainers.
iii. Overlook the best of products and provision of offerings.
iv. Speaking and handling the ability and modern customers and customers.

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 CHAPTER 3
SUPPLY CHAIN MANAGEMENT
3.1: Strategy of supply chain

• Supplier • Inbound • Storage & • Out bound • After sales

logistic logistic
warehouse

Fig No: 3.1 supply chain strategy

i. Supplier Thảo Mộc will be getting all the raw material from different local markets & all the
procurement process will be done through proper contracts.
ii. Inbound logistics we’ll make direct purchase the finest herbs in reasonable prices from local
suppliers across Pakistan.

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iii. Storage & warehouse All the dried ingredients (such as herbs & other spices) will keep in
small warehouse within the premises of café & perishable products (such as milk & brown
sugar) will store in cold storage.
iv. Out bound logistic Once we get the customer order, the process of preparation will start.
We’ll try to deliver the product within maximum 30 minutes. And the delivery of finished
product will be done without any intermediaries, through our personal logistics.
v. After sales If delivery time exceed we’ll give complementary product along with your order.
Thảo Mộc will also offer the feedback card for your suggestions.

3.1.1: Inbound logistic

1

2
5
.

3
4
.

.
Fig No: 3.2 Inbound logistic

Steps

i. Sourcing At the initial stage, Thảo Mộc will acquire its raw material from local supplier,
without any intermediaries.
ii. Order placement The order placement takes place either through Emails or phone calls. And
a record of these orders will also be mention& maintain in our records.

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 iii. Supplier As mentioned above, suppliers will be from local markets & from different cities of
Pakistan.
iv. Transportation Thảo Mộc will use its own vehicles to reduce transportation cost.
v. Receiving Date of receiving an order will be pre-determined according to the contract with
concerned supplier.

3.1.2: Out bound logistic

1
.

2
. 3
.

6
. 5
.

4
.

Fig No: 3.3 outbound logistic

Steps

i. Customer Order Thảo Mộc categorize the customer orders on the basis of customer assess
ability & their preferences. The orders of take away & dine in will be taken at the counter,
while the home delivery orders will receive through phone calls.
ii. Order Transmission Home delivery customers will transmit their order through phone calls.
While the person who take orders at the counter will transmit them to the chef or barista by
himself.
iii. Order Processing As the chef or barista receive the order, the order processing will take
place.

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iv. Order Selection The order selection will be done on the basis of first come first serve.
v. Transportation Thảo Mộc will use its own personal transportation for home delivery. No
contract transportation will use.
vi. Customer Delivery Thảo Mộc will try to deliver the product within maximum 30 minutes.

3.2: WAREHOUSE & INVENTORY MANAGEMENT

3.2.1: Location

2nd floor, Boulevard Mall Hyderabad

3.2.2: Procurement

We will purchase raw material from local suppliers and will store it in a cold storage. Meanwhile
when we will assume that stock is not much left then we will purchase it again in a maximum
quantity.

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3.2.3: Inventory management

We will not hire any manager for managing inventory & raw material. As we all will be
responsible for managing each and every thing in warehouse taking in consideration which
products are less in stock and how much we need to purchase. So we will make sure to put our
best efforts in handling inventory and making sure that none of the product gets wasted/
perished. We will efficiently work on this.

3.3: Transportation, Logistic & Tracking

At the initial time of our business we purchased the second-hand bike for the home delivering
service for our customer. We take the order from our customer by the mobile phone and in-
person.

3.4: Retailing 0utlets

At the start-up of our cafeteria we don’t open our outlet but in future we will open our outlet in
different areas.

3.5: Slotting Allowances, Shelving & POS Display

We offer the different products and these products are following:

Herbal Teas
Herbal Smoothies
Herbal cookies
Herbal Muffins
Fig No: 3.4 Product Portfolio

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 CHAPTER 4
BUSINESS MARKETING
Our product
Menu card

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 4.1: TARGET MARKET

This business idea’s focuses mainly on Hyderabad initially, targeting low to high income people
of Hyderabad.

i. Size: out of 153 responses from both men and women, 56.2% fall in the age bracket of 18-
25 years old which shows that the youngsters are more willing to try this new idea.
ii. Stability: As the survey has conducted 72.5% shows that the majority of the people agree
on it that the herbal tea will be the remedy to reduce the depression and 70.6% shows that
everyone has a taste of herbal teas. It means people are willing to taste the upcoming
product, in that way the demand of herbal products is high and it will automatically
increases the stability of the business because eventually it will increase the profit in the
future.
iii. Potential: As the survey has conducted which shows that the 87.6% people are agree on it
that still the depression increases day by day and because of this 72.5% people are in favor
of this business idea also 75.2% are taste conscious and 61.4% are also prefer different
flavors in herbal products, 43.8% drink normal teas two times in a day which is quite
favorable for this idea. Which means that this business will have a potential to run in the
future and the main focus is to provide healthy products for those who are health conscious.
iv. Accessibility: 88.2% shows that they want herbal café in the premises of the Hyderabad and
87.6% people believe in it that this idea will be welcome in the Hyderabad café, which
shows that this café will be definitely accessible for all because this café will open in the
commercial area which is Boulevard Mall, Hyderabad.

4.2: QUANTITATIVE RESULTS:

The survey has been conducted comprised of close ended questions to measure the risk and
uncertainty of this business and received 153 responses of the 10 questions in which the one
question is related to the demographic of the customers and the rest of it related to the main idea
of a business.

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4.2.1: Studies that we conducted

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 4.3: DATA ANALYSIS

i. Risk/uncertainty and ambiguity 35.9% people visit a café yearly it might be a risk for this
idea but we are coming with the solution to give them a facility of a delivery, they can order
their favorite products at a reasonable price. As there are no direct competitors of this
business, the uncertainty related to business acceptance will also be low.
ii. How and why did you identify them? By conducting the research based survey, the
business idea has identified the potential target market which will further help to identify
potential growth of this business and the obtained data will help the availability of the
business.

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 4.4: THE CUSTOMER BASE

This business idea includes all the genders, whose are looking for a relaxing environment and
prefers to live a healthy life style.

4.5: SALES & SALES PROMOTION

Our promotion tools,

i. Advertising
ii. Sales Promotion
iii. Public Relations
iv. Social media Marketing
v. Test marketing

4.6: SALES PROMOTION STRATEGIES

i. Go social

Promoting business on social media is a very cost effective. In the era of digitalization people all
around us use social media Instagram is the king where Facebook is the queen of sales promotion
platforms.

ii. Website

Having a website of the business shows the authentication of the business and moreover, it easily
gathers a great number of customers. By Search engine optimization we can easily reach to a
good market of our customers.

iii. Email Marketing

Sending newsletters through emails are these days in trend and is a very affective and cost-
effective sales promotion strategy.

iv. Local Bloggers and Influencers

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 In the time when Instagram is playing a part of sales promotion queen through that gathering
local bloggers and influencers and sending them our PR package is the best way, we can promote
our sales.

v. Partner/listed on food app

Apps like Food panda is the most used Apps currently in Pakistan. And according to Google
Food panda is the top food delivery app and it delivers beverages and coffees too. Get listed with
food panda will defiantly give us a leverage.

vi. Social Paying/Word of mouth

Word of mouth plays a big role in sales promotion. And according to Seth Godin,
“Ideas that spread win” delivering the best we can help us creating our image In front of
customers which will eventually create a good word of mouth.
4.7: COMPLAINTS HANDLING STRATEGIES:
i. Respond Instantly
To have a good reputation in the marketing we should respond to the complaints instantly 24/7
services of complain handling.
ii. Accountability
“Admit the mistake if you made it” a simple and effective approach which we’ll be implying in
our business.
iii. Be Humorous
Complains can be an opportunity to create a good will gesture if tackled wisely. We’ll be using
this strategy to create a bond between the customer and business.
iv. Tackle Angry and Irrational Customers with Respectful and Calm Responses
We’ll be using strategy of “take 10 seconds to answer” don’t answer to an angry customer with
anger that will create a huge fuss rather than treat every customer in every situation with respect
and calmness.

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SWOT Analysis of Thảo Mộc

STRENGTH WEAKNESS
1. Herbal products 1. Challenges to retain
customers
2. No direct competitors
2. lack of reputation and brand
3. Health related benefits image
3. lack of retail outlet

OPPORTUNITIES THERATS
1.Pioneers in hyderbad 1. possible new entrants.
2. expand an outlet 2. Hygine and quality safety.
3. widen the varity of 3. possibilty of herbs pricing
product. increses in future.

4.8: COMPETITIVE PROFILE

Thảo Mộc

Advantage Disadvantage
Herbal products lack of retail outlet
Health related benefits
Safe environment
Pioneer in Hyderabad
High quality product
Reasonable price
Home delivery service

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Mc Donald’s

Advantage Disadvantage
Self-service criteria McDonald's has been slow to react to
customers' changing tastes and needs
Friendly environment Unhealthy food menu
Higher pricing

Black and brown bakery

Advantage Disadvantage
Good brand image price is too high
Have retail outlet no sitting arrangement

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 CHAPTER 5
FINANCIAL PLAN
5.1: CAPITAL STRUCTURE
Thảo Mộc is initially financed with the Total capital of 22 Lac which consists of 12 Lac as
equity (2 Lac investments by each partner) and the rest 10 Lac as Debt. The proportion of loan
will acquire through the “Prime Minister’s Kamyab Jawan- Youth Entrepreneurship
Scheme (YES)” with interest rate 3% per annum, with Grace period of up to 1 year.

Capital Sturcture
of
Thảo Mộc
Equity
30%
Debt

70%

Fig No: 5.1 capital structure

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5.2: STARTUP SUMMARY

Investment 2,200,000
Investment by each partner 200,000
Loan amount 1,000,000
Startup expenses
Loan processing 30,000
Renovation & Interior Décor 300,000
Advertising expense 150,000
Legal documents 25,000

Total expenses 505,000

Startup asset
Kitchen equipments & appliances 500,000
Supplies 100,000
Security deposit 140,000
Herbs 50,000
Total asset 790,000
Cash in Hand 905,000

5.3: COSTING

Product Cost per cup

Herbal Tea with milk 20
Herbal Tea without milk 12
Herbal Cookies 25
Herbal Muffins 30
Herbal Smoothies 70

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5.4: TARGETS PER YEAR

Products Quantity Price Revenue Cost CGS

Herbal tea 50 115 5,750 20 1,000

with milk
Herbal tea 20 100 2,000 12 240
without milk
Herbal 25 75 1,875 25 625
cookies
Herbal 40 130 5,200 30 1,200
Muffins
Herbal 30 230 6,900 70 2,100
Smoothies
Total 21725 5165
*30 *30
Total per 651,750 154,950
month
*12 *12
Total per 7,821,000 1,859,400
year

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5.5: BREAKEVEN ANALYSIS

Expenses per Month Amount

COGS expense 154,950

Rent expense 70,000

Electricity expense 50,000

Gas expense 7,000

Supplies expense 70,000

Herbs 30,000

Depreciation Expense of kitchen equipments & 5,000

appliances

Marketing Expense 10,000

Total Expenses 396,950

➔ To cover up the monthly expenses of Rs. 396,950 the revenue of exact amount of Rs.
396,950 will be require reaching breakeven point.

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5.6: MARK UP

Product Selling Cost per Calculation Markup

Price per product (pure profit)
product In percentage
Herbal Tea with Milk 115 20 (115-20)/20*100 475%
Herbal Tea without Milk 100 12 (100-12)/12*100 733%
Herbal Cookies 75 25 (75-25)/25*100 200%
Herbal Muffins 130 30 (130-30)/30*100 333%
Herbal Smoothies 230 70 (230-70)/70*100 229%

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5.7: FINANCIAL STATEMENTS

Thảo Mộc
Income Statement
For the Year Ended 2021 2022 2023
Revenue 7,821,000 8,603,100 9,893,565
Less COGS (1,859,400) (2,045,340) (2,352,141)
Gross Profit 5,961,600 6,557,760 7,541,424
Less Expenses
Rent 840,000 840,000 840,000
Electricity expense 600,000 600,000 660,000
Gas Expense 84,000 84,000 84,000
Supplies 840,000 850,000 977,500
Herbs 360,000 360,000 414,000
Marketing Expense 120,000 120,000 120,000
Kitchen Equipment & 500,000 --------- ---------
appliances
Depreciation Expenses 60,000 66,000 80,000
Total Expenses (3404,000) (2,920,000) (3,175,500)
EBIT 2,557,600 3,637,760 4,365,924
Less Interest Expense (30,000) (30,000) (30,000)
EBT 2,527,600 3,607,760 4,335,924
Less Tax Amount (771,900) (1,041,940) (1,890,777.2)
Disposable Income 1,755,700 2,565,820 2,445,146.8

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 Thảo Mộc
Statement of Changes In Owner’s Equity
For The Year Ended In 2021
Beginning Capital at Dec 31, 2020 0
Add: Owner’s investment 2,200,000
Disposable Income 1,755,700
Subtotal 3,955,700
Less: Drawings (970,000)
Owner’s equity at Dec 31, 2021 2,985,700

Thảo Mộc
Statement of Changes In Owner’s Equity
For The Year Ended In 2022
Beginning Capital at Dec 31, 2021 2,985,700
Add: Owner’s investment 0
Disposable Income 2,565,820
Subtotal 5,551,520
Less: Drawings 2,500,520
Owner’s equity at Dec 31, 2022 3,051,000

38
 Thảo Mộc
Statement of Changes In Owner’s Equity
For The Year Ended In 2023
Beginning Capital at Dec 31, 2022 3,051,000
Add: Owner’s investment 0
Disposable Income 2,445,146.8
Subtotal 5,496,146.8
Less: Drawings 2274646.8
Owner’s equity at Dec 31, 2023 3,221,500

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 Thảo Mộc
Balance Sheet
Period 2021 2022 2023
ASSETS:
Current assets
Cash 5810,100 7986,640 10,589,281
Security Deposit 140,000 140,000 140,000
Supplies 840,000 850,000 977,500
Herbs 360,000 360,000 414,000
Renovation 300,000 300,000 300,000
Documents 25,000 25,000 25,000
Total Current Assets 7,475,100 9,661,640 12,445,781
Fixed Assets
Kitchen Equipment & 500,000 500,000 500,000
appliances (60,000) (66,000) (80,000)
Less: Acc. Depreciation 440,000 434,000 420,000
Expense
Total Fixed Assets
Total Assets 7915,100 10,095,640 12,865,781
LIABILITIES & EQUITY:
Total Current Liabilities 30,000 30,000 30,000
Total Long term Liabilities 00 00 00
Owner’s equity 2,985,700 3,051,000 3,221,500
Retained earnings 4,899,400 7,014,640 9,614,281
Total Equity & Liability 7,915,100 10,095,640 12,865,781

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 Thảo Mộc

Cash Flow Statement

Period 2021 2022 2023

Cash at the Beginning of Year 905,000 5,810,100 7,986,640
1. Cash flow from Financing Activities

Capital Investment 2,200,000 00 00

Less Drawings (970,000) (2,500,520) (2,274,646.8)
Net cash flow from Financing activities 1,230,000 -2,500,520 -2,274,646.8
2. Cash flow from Investing Activities

Purchase of Kitchen appliances & Equipment (500,000) 00 00

Net cash flow from Investing Activities -500,000 00 00
3. Cash flow from Operational Activities

Revenue 7,821,000 8,603,100 9,893,565

Less Expenses (3,645,900) (3,925,940) (5,016,277.2)
Net cash flow from Operational Activities 4,175,100 4,677,160 4,877,287.8
Cash at the End of Year 5810,100 7,986,640 1,0589,281

41
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