ESTABLISHMENT OF BUSINESS ENTERPRISE

SUBMITTED TO: - SUBMITTED BY:-

Prof.Amitabha maheshwari Bhoopendra Singh Chauhan

MBA (int.) 5th SEM

 May 2021 [THE COFFEE CITY]

DECLARATION

I , BHOOPENDRA CHAUHAN student of MBA(INT.) 5th Semester of Prestige

Institute of Management GWALIOR, hereby declare that the Project Report On THE
COFFEE CITY is submitted by me in the line of partial fulfillment of course objectives

for the Masters of Business Administration (INT) Degree.

I assure that this project is the result of my own efforts and that any other institute for
the award of any degree or diploma has not submitted it.

BHOOPENDRA CHAUHAN

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CERTIFICATE

This is to certify that, BHOOPENDRA CHAUHAN student of MBA (INT) 5th

Semester of Prestige Institute of Management GWALIOR, has successfully
completed his project. He has prepared this Project Report on THE COFFEE CITY
under my direct supervision and guidance.

Prof.Amitabha maheshwari

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ACKNOWLEDGEMENT

I BHOOPENDRA CHAUHAN express my sincere gratitude to Prof.Amitabha

maheshwari for giving me the opportunity to work under his guidance on the project.

I am grateful to my Director Dr. S. S. Bhakar.

I am also thankful to other staff that guided and helped me very kindly at each and
every step whenever I required.

I also acknowledge & convey thanks to the library staff, computer department of
PIMG for their kind and valuable support.

(BHOOPENDRA SINGH

CHAUHAN)

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 May 2021 [THE COFFEE CITY]

THE COFFEE CITY

THE COFFEE CITY is a small coffee shop which service GWALIOR
snack food and MP coffee in an alley of a street in GWALIOR. THE COFFEE CITY is a locally
owned GWALIOR snack food and coffee outlet that will be positioned as a famous restaurant
through our creative approach to the company's image and detail presentation. THE COFFEE
CITY will provide a combination of excellent food and drink at value pricing, with fun packaging
and atmosphere. THE COFFEE CITY is the answer to a nice and good place of demand for snack-
type fast food and coffee. THE COFFEE CITY is a place to dream of as you try to escape the daily
stresses of life and just a comfortable place to meet your friends, chatting, or want to share your
feeling to others, all in one. With the growing demand for high-quality snack food, coffee and great
service, THE COFFEE CITY will capitalize on its proximity to the middle class including White-
color labor, younger and student in GWALIOR first and other big city after to build a core group of
repeat customers. THE COFFEE CITY will offer its customers the best snack food and other
drinks in the area, as well as music about GWALIOR that its patrons can heard to enjoy their visit.

It’s a nice place for ones who come to talk with friends, family; or just to enjoy hours of quiet and
peace. And especially if you indulge in coffee and GWALIOR snack food, THE COFFEE CITY is
really an idea place with many famous kinds of coffee such as: Pink coffee, Dragon eye, Palace
coffee, Queen coffee, Honey coffee, Jasmine coffee, Pomelo coffee, Chrysanthemum coffee... all
from high quality coffee and some GWALIOR snack food such as: cheese sandwich, garlic bread,
peanut butter bread Customer will be satisfied with its fresh air, antique style and courteous service.
Besides THE COFFEE CITY also has a kiosk of fast coffee and food. It’s for ones who are busy
and don’t have much time. And you don’t have to wait too long for your order.

The company will operate a 50 m2 with 3 floor restaurant in GWALIOR district. The shop is
expected to grow sales revenue from 1.2 lakhs in first year and growing to about 2.6 lakhs in the
second year and continuing to more than 7.5 lakhs in the year after that. As THE COFFEE CITY
will strive to maintain a more than a half gross profit margin and reasonable operating
expenses, investing return on the shop to expand market share.

EXECUTIVE SUMMARY

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THE COFFEE CITY’S OBJECTIVE

 THE COFFEE CITY wants to establish a large regular
customer base, and will therefore concentrate its business
and marketing on local residents, which will be the
dominant target market.
 To establish a presence as a successful local snack food and
coffee outlets and gain a market share in GWALIOR's food
industry
 To expand into a number of outlets by year three, and sell
the franchise to neighboring metropolitan cities, such as GWALIOR, Bhopal, Indore
 THE COFFEE CITY might become one of the best chain snack food and coffee shop in with
highest quality and services.

MISSION
 Product mission: Provide customers finest quality drinks and food, make suit all customer,
down to smallest details.
 Community mission: Provide customers really relax and happy time beside friends and
family… also give customers knowledge of culinary culture.
 Economic mission: Operate and grow at a profitable rate.

KEYS TO SUCCESS
 Location: in center of culture and tourist, convenient accessing.
 Products: variety of quality drinks and food suit everyone, clean equipment.
 Servers: cheerful, skilled, professional, articulate.

GROWTH PROGRAM AND RISK ANALYSIS

 Expansion

With the mission to provide for customer a new way to drink coffee and eat snack food, THE
COFFEE CITY want to become one of the best snack food and coffee restaurant chain in
GWALIOR
After one to two years, THE COFFEE CITY shop might expand its business with other shop in
.
After 7 years, THE COFFEE CITY hope that we will become one of the most favorite restaurant
brand name in MP having more than 10 campuses in MP

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 Risk analysis

Because we open food and coffee restaurant in GWALIOR, where is surrounded by many coffee
and snack food kiosk. Thus we must give many policies
to competitive with other. However, with the better
management process and policies, we believe that we can
gain the customers form market.

In this part we will focus on analyzing on macro

elements that can affect to our business.

Firstly, THE COFFEE CITY can be influence by the economic crisis in Indian. Because our
segment will be middle class including white color worker, younger, with the job related to office,
so they can be affected by crisis, declining their income, and they do not have enough financial to
buy food and drinks in our restaurant. In our perspective, economic system has business cycle rage
from 1.5 to two years; it is easy for a recession period appear again. Because of that reason, the
board of manager always predicts what happen in the future and giving the best policy.

Secondly, it is the financial problem. The mission of THE COFFEE CITY will be a chain of snack
food and coffee restaurant in the 5 years; therefore, we must collect the financial from other
sources, financial intermediaries like banks, investor, and funds. As a result, if something happened
to our sources, the restaurant will not have enough money to increase business activities and open
new shops.

COMPANY SUMMARY

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THE COFFEE CITY SUMMARY

THE COFFEE CITY, a small business, sells snack food and coffee, other beverages, in 50 square
metre in GWALIOR district. THE COFFEE CITY’s major investors are who cumulatively over
80% share of the shop. The start-up loss of shop is assumed in the amount of 14 LAKHS
estimated .

COMPANY OWNERSHIP

THE COFFEE CITY is registered as business of household in mp and will be Limited Liability
Corporation after two years. rohit owns 33%, his friends, srishti and nandni hold approximately
22% each as well as sumit, aman account for nearly 10% in THE COFFEE CITY.

START-UP SUMMARY

Start-up Requirements
Start-up Expenses
Kitchen and Fixtures 10,00,000
Furniture and Interior 15,00,000
Legal 3,00,000
Rent 6,00,000
Marketing expenses 10,00,000
Contingencies 5,00,000
Total Start-up Expense 49,00,000
Start-up Assets
Cash Required 35,00,000
Start-up Inventory 10,00,000
Other Current Assets -
Long-term Assets -
Total Assets 45,00,000
Total Requirement 94,00,000

Start – up expense is 10 lakhs which includes:

- Legal expenses for obtaining licenses: 3 lakhs
- Rent expense: 6 lakhs per months
- Decoration expense: 2.5 lakhs
- Marketing expense: 10 lakhs
- Contingencies fees: 5 lakhs
The required start – up assets:
- Operating capital in the total amount of 3.5 lakhs which includes employee’s and manager’s
salaries (wages in 2 first months).
- Start – up inventory 10 lakhs for the first month including: Coffee, sugar, flour, coffee
filters, oil, meat, vegetable, vinegar, beverages, etc: 7 lakhs
- Retail supplies (napkins, coffee bags, cleaning, etc.) 1lakhs
- Office supplies: 2 lakhs
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Funding for the restaurant comes from two major sources – Owner’s investment and banks loans.
Three major owners Rohit chauhan, Srishti chauhan, Nandni chauhan have contributed 49 lakhs, 35
lakhs and 10 lakhs respectively. All others contribute 13
lakhs, which brings the total investments to 94 lakhs
million. The remaining 20 lakhs needed to cover the
start –up expenses and assets came from bank loan:
one-year loan in the amount of 20 lakhs. Loan was

secured through State Bank.

COMPANY LOCATION AND FACILITIES

THE COFFEE CITY locations will range in size from 50

meter square and will seat from 15 – 25 guests each floor. Our first location will be on the larger
end of this range. The location will feature its own originality in merchandise display and other
brand building attributes. We will equip the outlet with modern furniture and aim for cleanliness
and an open feeling.
The space selection be chosen based upon the following criteria:
- Community size: minimum of 800,000 people within a radius of 8 kilometers.
- Tourist destination.
- Easy access.
- Large percentage of teenagers in the community.
All of these qualities are consistent with THE COFFEE CITYs' goal of providing a top quality fast
food experience. We want "word-of-mouth" to be our best form of marketing, where our customers
value our brand as something exciting and cannot wait to tell their friends and neighbors.

PRODUCTS

THE COFFEE CITY will offer its customer the best tasting coffee and snack food in the area.
This will be achieved by using high – quality ingredients and strictly
following preparation guidelines. The store layout, menu listings and
marketing activities will be focused on maximizing the sales of the
higher margin food and drinks.
 PRODUCT DESCRIPTION
 Frappuccino.
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 Caramel Macchiato.
 Café Mocha.
 Americano.
 Turkish coffee.
 Cafe Cubano.
 Café Latte.
 Irish Coffee
- Cheese sandwich
- Peanut butter bread
- Garlic bread
- French fries

 COMPETITIVE COMPARISON

THE COFFEE CITY has several advantages over its leading competitors:
- Unique "fusion" concept of dipping sauce.
- We expect a high degree of enthusiasm and offer a fun store with friendly staff, that reflects
the company's youthful and energetic culture.
- Supporting merchandise items that support the company's brand building.
- Food is made 100% fresh, compared to most food outlets that use frozen.
- Our dipping sauce is also made fresh without preservatives.
- Our innovative packaging will be more entertaining than our competitors; a single cone with
a cup reserved for dipping sauce.

 SALE LITERATURE

THE COFFEE CITY will use advertising and sales programs to get the word out to customers.
- 2,000 color brochures to be distributed throughout destination shopping mall and facilities:
in-store, cinemas, area eateries, information during the grand opening in January 2021.
- Half page magazine reviews in MP lifestyle magazines that advertise the presence of the
outlet.

 SOURCING

THE COFFEE CITY has a legal contract with the best supplies. That will be warranted the quality
and quantity of goods which will be used to serve customers. We use the coffee from a company in
Delhi, which was exported in many countries in the world with the excellent quality. We also use
the foods, fruits which are provide by Metro Cash and Carry, and beverages as well. Thus, with

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many big suppliers, the customer can believe that they will be served with the best product and
services. That also ensure the stable for the shop, we will not pay more attention about the quality
and the stable of supply.

 SALE PROGRAMS

Each opening of THE COFFEE CITY will have, more or less, the same marketing mix as the
others. Below are the programs that we will develop to open each location.
Grand Opening
Each new outlet will have outdoor signage as soon as possible. We want the signage to be
supported by banners before the opening.
Point of Purchase
We will sell gift certificates, announce future job openings, and possibly mention franchise
opportunities.
Direct Mail Piece
A stand-alone piece, folded, will be produced in full color on heavy weight paper. Inside will be all
the important details of THE COFFEE CITY, explanation of our menu, prices, house of operation
and a locator map.

MARKET ANALYSIS SUMMARY

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MARKET SEGMENTS
With our products and services, we will focus our marketing activities on reaching people in middle
class or who working in offices located close to the restaurant and on busy man who have not
enough time to go out and have a meal by delivery. Our market research shows that these are the
customer groups that are most likely to buy restaurant products which can be easily take on the
way. We will cater to people who want to get their daily cup of great-tasting coffee in a relaxing
atmosphere. It shows that these are discerning customers that gravitate towards better tasting coffee
and food. Furthermore, a lot of officer considers coffee shop to be a convenient meeting location,
where they can have conversation or meet with peers and partners without the necessity to pay
cover charges. For us, this will provide a unique possibility for building a loyal client base.

General trend toward quality among GWALIOR consumers definitely plays an important role in
the recent growth in gourmet food and coffee. Additionally, such factors as desire for small
indulgencies, for something more exotic and unique, provide a good selling opportunity for
restaurant.

Sales
Young
Officer
Tourist
Other

TARGET MARKET SEGMENT STRATEGY

THE COFFEE CITY intends to cater to the bulk of teenagers and youngsters in GWALIOR. We
have chosen this group for several important reasons. It is our goal to be "the extraordinary snack
food place" and we believe that the age group from 15 to 25 is the primary age where brand
building efforts could take place. They are on limited or fixed incomes and seek a value/price
relationship that will not stretch their budgets.

Our secondary target is between the ages of 25 and 37, which are a heavy lounge/restaurant user
group. They are more flexible in budgets and seek more than a value/price relationship.

MARKET NEEDS

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General trend toward quality among mp consumers definitely plays an important role in the recent
growth in gourmet coffee and snack food. Additionally, such factors as desire for small
indulgencies, for something more exotic and unique, provide a good selling opportunity for
restaurant.
A recent Consumer Trend and Analysis by Euromonitor identified the following needs among our
target markets. Our core group:
- Wants variety and flavor in its food, preferably something fried
- Looks for speed of service
- Wants an entertaining and fun experience
- Insists upon a clean, friendly, and attractive environment
- Adopts a global lifestyle
- Is computer literate
- Enjoys eating out
- Has an active lifestyle
- Comes from various ethnic backgrounds

INDUSTRY ANALYSIS

In the World, GWALIOR tend to be one of the biggest

exporter coffee and which the special taste of GWALIOR’s
coffee, we are going to account for a high segment in the
market’s coffee share. In MP, coffee is the most popular of
drinks of consumers and this tendency continues to develop
more significantly. Hot drinks in GWALIOR saw strong
growth in total volume terms in 2009. Of all the hot drinks products, coffee continues to be the
most popular in GWALIOR in terms of total volume sales. Coffee is a traditional drink among
northern residents in GWALIOR. Other hot drinks enjoy the strongest total volume growth in 2009
due to increasingly health conscious consumers in mp. According to some survey, there are 37
percent of adults in the age from 18 to 24 drink coffee, up from 31 percent the prior year. In the
future coffee continues grow with high speed in coffee market. GWALIOR coffee consumption has
shown steady growth, with gourmet coffee and snack food having the strongest growth. Coffee
drinkers in the MP are among the most demanding ones. They favor well-brewed gourmet coffee
drinks and demand great service. We will strive to build a loyal customer base by offering a great
tasting coffee in a relaxing environment of its restaurant.

COMPETITON

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We direct competitors will be other coffee shop located in MP. These include "dalgona" coffee
shop and other coffee shop. "Taste of home” will
definitely be one of the major competitors because of
its strong financial position and established marketing
and operational practices. However, despite of
“entrenched market position, many customers favor
smaller, independent establishments that offer cozy
atmosphere and good coffee at affordable prices. We
estimate that “approximately fifty-five percent market share in that neighborhood with the
remaining market share split among other establishments. Let know more about them: " is all about
great coffee. Whether that's in their coffee shops throughout GWALIOR, a pack you've bought at
the supermarket or a cup you've had in a leading hotel or restaurant. They strive to serve the perfect
cup, every cup. Their difference is a lifestyle brand they believe in serving people rich experiences,
based around coffee. Those rich experiences come from doing everything really well. As a proudly
consumer brand, the philosophy is about combining the best of the fast paced international world
with the traditional charm and traditions of mp.

How I plan to take advantages of competitor weak points?

We can serve snack food include coffee for customers who not have enough time to enjoy in our
shop. More than that, we are sure that the price of our products will always lower than other with
high quality and best service. Beside that we will offer its customers the best prepared coffee in the
area that will be complimented with snack food, as well as free books that its patrons can read to
enjoy their visit. We will make its best effort to create a unique place where customers can socialize
with each other in a comfortable and relaxing environment while enjoying the best brewed coffee
and snack food in town. We will be in the business of helping our customers to relieve their daily
stresses by providing piece of mind through great ambience, convenient location, friendly customer
service, and products of consistently high quality.

Our marketing strategy will be focused at getting new customers, retaining the existing customers,
getting customers to spend more and come back more often. Establishing a loyal customer base is
of a paramount importance since such customer core will not only generate most of the sales but
also will provide favorable referrals.

STRATEGY SUMMARY

COMPETITIVE EDGE

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- Store design that will connect nature with customers, and designed for fast and efficient
operations.
- Employee training to insure the best coffee preparation techniques.
- Marketing strategies aimed to build a solid base of loyal customers, as well as maximizing
the sales of products.
- Same price with competitor but higher quality.
- Profession services.
- Friendly space
- Many different and special way to make a fantastic taste for the foot and drink
- Fresh food daily
We will position itself as unique coffee shop where its patrons can not only enjoy a cup of perfectly
brewed coffee but also spend their time in an ambient environment. Comfortable sofas and chairs,
dimmed light and quiet relaxing music will help the customers to relax from the daily stresses and
will differentiate our bar from incumbent competitors. The major reason for the customers to return
to a specific coffee shop is a great tasting coffee and food, quick service and pleasant atmosphere.
Although, as stated before, coffee consumption is uniform across different income segments, we
will price its product offerings competitively. We strongly believe that selling coffee with a great
service in a nice setting will help us build a strong base of loyal clientele.

We will handle the sales transactions.

To speed up the customer service, at
least two employees will be servicing
clients while one employee will be
preparing the customer's order, the
other one will be taking care of the
sales transaction. All sales data
logged on the computerized point-of-
sale terminal will be later analyzed for marketing purposes.

In order to build up its client base, we will use banners and fliers; utilize customer referrals and
cross-promotions with other businesses in the community. At the same time, customer retention
programs will be used to make sure the customers are coming back and spending more at the coffee
shop

MARKETING STRATEGY

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We will have professional marketing strategy to account for the customer share in the market. In
our marketing, we will focus on three marketing campaigns together.

I. Online Marketing
II. Viral Marketing
III. Traditional Marketing

 Online Marketing
- Websites and Forum

We will create and support for our websites and forum, ensuring that they often provide useful
information for our customers. The content of web covers the information of coffee, the coffee
market, especially coffee and food, steps to have a cup of excellent food and coffee. That also will
be a channel for everyone to update news about daily life: work and entertainments… And
specially, our websites can communicate with customer as social networks. In that, other people
can update their view, events in your daily life. It’s is called “My coffee city” function.

- http://thecoffeecity.com.in
- http://thecoffeecity.com.in/forum

Moreover, marketing department attacks on social network as a channel to promotion THE

COFFEE CITY. Which are Facebook, Yahoo Plus!, Twittler!, Year1! Youtube! …. We want to
create communications customers of our shop on the internet.

 Viral marketing

Another marketing campaign that will be used is the viral marketing and viral advertising. At the
previous part, we has said about a communication of the Coffee shop, so
with the viral marketing our manager apply marketing techniques that
use shop’s pre-existing social networks customer on the internet to
produce increases in brand awareness or to achieve other marketing
objectives through self-replicating viral processes, analogous to the
spread of pathological and computer viruses. It can be word-of-mouth
delivered or enhanced by the network effects of the Internet. With this
campaign maketers may take the form of video clips, interactive Flash
games, advergames, ebooks, brandable software, images to update to shop’s websites, blog, forum
and even text messenger though email.

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 Traditional marketing

We continue advertise on other channel to increase our share in the market. Those are newspaper
and magazines. That marketing campaign cannot gain success without promotion strategy. With
promotion strategy, promotion girl team in buildings in the city, creating events for clubs in MP
Fan club

1. Discount and presents to customers on special days (Valentine’s Day, Women’s Day,
Birthday)
2. Loyalty Customer Card
3. Golden hour discount
4. Dish of the Day
5. Free delivery
With the Loyalty Customer Card, the customer will be serve with higher value, and they will
received discount daily with 5% for each bills and 50% for his or her birthday.

Moreover, we also bring for customer better services by having golden hour discount. Because
the mission of THE COFFEE CITY is the best product for all customers, so the cakes and food will
be only used in just one day. In the end of the day, although the quality of cakes and food still are
very good, but we will not buy in tomorrow, so they will be sales off from 15 – 17 o’clock and after
21o’clock. This action will release the inventory in one day.

Dish of the Day- Although THE COFFEE CITY has many dish, cakes … But each day, we will
serve customer with one special dish, it will be make better, selling with lower price any easy to
take away. With one dish for one day, one moths we serve 30 dish each day, the customer THE
COFFEE CITY focusing is students, pupils, they are the potential customer in the future for THE
COFFEE CITY.

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MANAGEMENT SUMMARY

Customer Relationship Management

In order to having winning marketing strategy, THE COFFEE CITY has a Customer relationship
management system (CRMs) and Information System to support for CRMs. With CRMs, manager
can manage the information of customer, we will collect the information about email, telephone,
age, sex, birthday, hobby … Using that system, Director can interact with customer, serve more
additional value. We can present my love with loyal customer by sending a postcard for those in
their birthday. Besides, we can also plan events which base on the hobby of customers … Our
CRMs will be provided by corporation having
reputation in the market.

Management

THE COFFEE CITY is majority- owned by board of

management, who are studying Business
Administration from State University. Priyanka is worked for several years as a sales manager.
munnendra has many experiences in running a restaurant, previously, she opened and manage a
small restaurant with high profit in several years. Nguyen has work for two years as an independent
consultant, after that, she has done a job for her family corporation. Tushar is working for his
corporation as a manager and he has experience in tourist and hotel area. Tushar, for the last three
years he has worked as a manager of restaurant, a successful restaurant in GWALIOR district.
Under the management of priyanka, the restaurant has consistently increased sales while
maintaining a lower than average level of operating expense.

However, because of investor’s other commitments they will not be involved into daily
management decisions at THE COFFEE CITY. Thus a professional manager will be hired who will
oversee all the coffee operating. One full time baristas will be in charge on coffee preparation and
one chef as well. Five peoples will be hired to fulfill the staffing needs. In the second and third
when the shop begins to open more spaces, more employee will be hired to handle the increased
sales volume.

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 Management Director

A full-time manager will be hired to oversee the daily operations at THE COFFEE CITY. The
candidate has had at least one year in managerial in management. This management director’s
responsibilities will include managing the staff, ordering inventory, dealing with suppliers,
developing a marketing strategy and perform other daily managerial duties. We believe that our
candidate has the right experience for this role. A profit-sharing arrangement for the manager may
be considered based on the first year operational results.

 Management Consultant

Despite the owner’s and management’s experience in the restaurant and coffee industry, THE
COFFEE CITY will retain the consulting services from a company in this field. The consultants
will help developing the business idea, business development and handle problem. Consultants will
be primarily used for market research, customer satisfaction survey and to provide additional input
the evaluation of the business opportunities.

 Management System After 3 years

After 3 years, with about 4 shops, we divided management system into local management
departments.

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Conclusion

THE COFFEE CITY will be provided fulfill financial start up in the first year with an small ad
from Bank. In the year after that, the board of manger hopes that it will increase significantly in
revenues and opening other shop in places in Gwalior. At that time, the owner would continue to
invest more money in the Shop, and making more loans on others banks to capture the developing
of the shop. After 3 years, THE COFFEE CITY will be registered as a corporation with stronger
financial power. The following tables show the financial situation from the first year when shop
was opened to the third year.

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