INDIAN COFFEE HOUSE

Summary

The conceptThanks primarily to Starbucks, within the past 20 yearsthe coffeehouse hasbecome a familiar feature of India n life. Every day, millions of India ns stop for an espresso-based coffee drink. People who would not have dreamed of spending more than Rs10 for a cup of coffee a few years ago now gladly pay 70 to 100 for their cappuccino, mocha latte or vanilla ice blended drink.

The specialty-coffee business is growing at a healthy pace. During the past 20 years, there has not beena singleyear, despite war and recession,in whichspecialty coffee sales have not grown. In many years the increase has beenin double digits.In addition, nocoffeehouse chains have failed during this time, although the list of casualties in other industries is quite long.

Long term assets:Undercounter RefrigeratorsRs 60000

Service/Prep CounterRs 20000

Ice MachineRs3,500

Large RefrigeratorRs10,000

Milk Coolers (3)Rs50,000

Cash register (2) Point of Sale SystemRs14,000

Espresso MachineRs11,000

Fetco Coffee BrewerRs2,500

Counters/Condiment bar/shelvingRs12,000

Short-term assets:Tables, Chairs, FurnishingsRs12,000

Persian CarpetRs1,000

Lighting FixturesRs2,000

ESPRESSONameDescriptionRegularLarge

EspressoA double shot ofstraight espresso.Rs100 Double

Caffe India noEspresso combined with hot water, a gourmet brewed coffee.Rs100Rs150

CappuccinoEspresso with a smooth topping of milk foam.Rs150Rs350

Caffe LatteEspresso combined with steamed milk, topped with a small amount of velvety milk foam.Rs275Rs325

Caffe MochaA Caffe Latte combined with Ghirardelli chocolate, topped with whipped cream and chocolate shavings.Rs150Rs375

Espresso MacchiatoA straight shot of espresso topped with a spoonful of rich milk foam.Rs175Rs250

Espresso Con PannaA straight shot of espresso topped with a generous dollop of whipped cream.Rs175Rs250

Espresso Latte BreveOur famous latte made even more creamy with half and half.Rs250Rs350

Espresso "Red Eye"Espresso combined with our gourmet coffee of the day to get your day going.Rs200Rs275

COFFEE DRINKSNameDescriptionSmallLarge

The Banana Nut JavaCoffee. Warm milk. Banana, macadamia nut and vanilla syrups. Topped with whipped cream and cinnamon dusting.Rs275Rs375

The Cafe MilanoCoffee. Warm milk. Amaretto and vanilla syrups topped with whipped cream and almonds.Rs275Rs375

FLAVORED ESPRESSO DRINKSAll flavored drinks feature quality Monin and Ghirardelli syrups.

NameDescriptionRegularLarge

Vanilla CappuccinoCappuccino made with vanilla flavored milk foam.Rs250Rs350

Vanilla LatteA Caffe Latte with vanilla essence added.Rs300Rs425

White Chocolate LatteEspresso, white chocolate flavoring and steamed milk topped with velvety foam and white chocolate shavings.Rs300Rs425

The 50/50 LatteEspresso. Vanilla and orange syrups, steamed milk and whipped cream topping.Rs300Rs425

The Raspberry Mocha LatteCoffee. Raspberry and chocolate syrups. Half and half. Whipped cream topping.Rs325Rs450

Chai LatteEspresso. Chai. Steamed milk and whipped cream.Rs300Rs425

HOT COCOA DRINKSAll hot cocoa drinks are Rs275

NameDescription

French Vanilla CocoaHot cocoa with vanilla and whipped cream.

White Chocolate CocoaHot cocoa with white chocolate and whipped cream.

Chocolate Truffle CocoaRich dark hot cocoa with whipped cream topping.

Holiday Spice CocoaRich hot cocoa and holiday spices. Topped with whipped cream.

Peppermint CocoaRich chocolate and refreshing peppermint. Topped with whipped cream.

OvaltineOvaltine Chocolate Malt and milk.

SMOOTHIESAll smoothies are Rs375

NameDescription

The Espresso Chocolate MaltA chocolate malt for grownups.

The Double Dutch Chocolate SmoothieVery chocolatey!

The Mocha SmoothieAn all-time favorite.

The Vanilla SmoothieRich natural vanilla flavor.

50/50 Smoothie (Orange and Vanilla)A 50's favorite.

3.2.2 Teas

ICED TEASClassic India n Iced Tea, just like you remember as a kid.Rs150 Small, Rs175 Medium, Rs200 Large

HOT TEARs150 Regular

Earl Grey English Breakfast Peppermint Herb Apricot Earl Grey Lavender Darjeeling Formosa Oolong Golden Flowers Herbal Herbal Lemon Tropical Green4.0 Market Analysis Summary

INDIAN launches with an exciting new coffeehouse concept in a receptive and steadily growing market segmentthe specialty coffee retail business.

Despite economic downturns in recent years the specialty coffee business has been a bright spot. While literally hundreds of businesses in many categories are facing poor sales, negative balance sheets and even bankruptcy, coffee chains continue to show strong growth.

It's clear that Indian's love for good coffee continues during good times and bad.

Mumbai: The Perfect Launch MarketBy launching INDIAN in the Mumbai market we maximize our potential for success due to several factors:

The highly affluent local population

Year-round tourist activity

Ever-changing upscale student population

Excellent auto and pedestrian traffic by our location

Low media costs

High number of local special events

Prime site location

INDIAN islocated at what is arguably one of the best locations for a coffeehouse in Mumbaiin the heart of the tourist and business district, adjacent to fine dining and shopping, next to the historicEgyptian Theatre and just steps from the busiest intersection in town.

INDIAN Coffee has all the ingredients necessary for immediate success.

4.1 Market Segmentation

Indiascustomer base in Mumbai is comprised of five target groups.

1. Affluent local residents

2. Tourists

3. Local business people

4. Students

5. Travelerspassing through

These groups are all potentially strong customer segments. The benefit ofthis mix of customersis thatit helps maintain consistent business throughout the year. For example, while tourism is strong all year long in Mumbai, it peaks during the summer months. Conversely, the student population is not as strong during the summer as it is from September through June of each year.

The other customer segments (local residents, local business and pass-through traffic on US 66) provide a consistent foundation all year long.

Also, by appealing to several market segments, INDIAN does not become overly dependent on any single consumer group. For example, several local coffeehouses with primarily student customers do poorly during the non-school months. They must also market themselves anew each year to the incoming students. INDIAN will avoid these peaks and valleys in business with a mix of customers.

Affluent locals. Within five miles of INDIAN are 200,000 of the most affluent people in India . Homes in adjacentNiceburg sell for $1 million to $50 million. Key influencers, trendsetters, artists, writers andcelebrities have homes in Mumbai.

Tourists. More than 5,000,000 tourists visit Mumbai every year. Most will pass by the INDIAN location. Tourist come to "India 's Riviera" for the beaches, shopping, dining and nearby vineyards.

Local business people. INDIAN is located on the corner of'A' Street andFirst Avenuein the heart of the prime downtown business district. It'sacross fromtheexclusive, chic,Descarte (ISpend, Therefore IAm)department store, and one block from the number one shopping destination in Mumbai, Lucre Galerie.'A' Street andFrist Avenueare the two most heavily traveled streets in Mumbai.

Students. Mumbai is home to a major branch of the State Universityas well as dozens of other schools, including many prestigious private schools and academies. Mumbai High School is less than a mile from Dark Roast Java.

Travelers on US 66. One of the state's two major north/south routes passes through Mumbai. According toDeptof Transportation,more than 35 million auto trips will pass throughthecity. Many of these travelers will stop for a meal, to refuel and have a cup of coffee. US66 is also a heavily traveled commuter route toShorewood andBeachey Headto the south. 4.2 Target Market Segment Strategy

Overall, our strategy is to maintain a constantly high customer count by leveraging our appealto five groups of potential customers.

Local Residents. Approximately 200,000 people live within five miles of our INDIAN location. The most affluent of these live even closer, within three miles. It is a short 5 minute drive to INDIAN for most of our potential local customers. Excellent public parking is available within 100 yards.

Local customers form the loyal core of our business. We will reach out to them through local marketing, involvement in the Chamber of Commerce, support of local charitable organizations and sponsorship of events and youth sports teams.

Tourists. Mumbaihas excellentyear-round tourist activity. About 5 million people will visit the area during the next year. While hotels are virtually sold out during the summer months, tourism all year is exceptionally strong. This is due in large part to the temperate climate, weekend or day-trip visitors from the greaterOntopolis area and an unusually large number of special events (e.g. film festivals, concerts, art shows) scheduled throughout the year.

With a troubled economyand fears of terrorism, more people are opting for the relatively inexpensive, easy and safe short trip to Mumbai for recreation. And, according to the Chamber of Commerce, 90% of alltourists visiting Mumbai will pass by the INDIAN location.

We will target these potential customerswith ads in local tourism guides.

Local businesses. Many local businesses, both private and government, are within two blocks of Dark Roast Java. Lucre Galerie, the prime shopping center of Mumbai, is one block away. The county courthouse istwo blocks away. INDIAN is in the heart of the shopping and dining area.

Because much of the employee parking is out of the immediate area with shuttle service to downtown, most people stay near their place of employment during breakfast, lunch and for after-work relaxing. A significant number of these local business people find INDIAN an inviting and convenient destination.

We also offercoffee service tolocal restaurants, night spots and businesses. Coffee service brings in additional revenue and promotes INDIAN among employees at these businesses.

We will alsoreachbusiness customers through Chamber of Commerce activitiesandby personally visiting the shops and businessesto distributediscount coupons and menus.

Students. The area has more than 30,000 students in several schools, including nearby City College and State University. Students, most of whom are under the drinking age, have few places they can go to meet their friends. Coffeehouses have proven to be very popular with studentseven high school studentsas an "in" place to go that's also affordable.

To reach students we offer special student discount cards, pass out free coffee coupons at student events and offer entertainment on weekends.

Students represent an excellent customer segment for several reasons:

Students bring an energy and youth to the coffeehouse

By attracting students we generate excellent word-of-mouth

Students represent a large base of potential part-time employees

Often under the drinking age, students need an affordableplace to hang out with their friendsStrategic Assumptions: People want a better-tasting coffee drink

Coffee drinkers want a more inviting coffeehouse environment

Coffee drinks are considered an affordable luxury

The coffeehouse industry is largely unaffected by the economy and world events

INDIAN offers several unique advantages over all other coffeehouses

5.1 Competitive Edge

Our competitive edge,compared tothe other coffeehouses in the greater Mumbai area includes the following:

Asignificantly higher quality, better tasting coffee product.

Ourcurrent location can arguably be considered the best in the marketin the heart of the downtown shopping, dining, entertainment and cultural district in Mumbai and adjacent to the historicEgyptian Theatre.

An ambiance superior to all other coffeehouses in the area with upscale "Cote d'Azur" look. It features stained glass decorations, art glasswork, Mediterranean Riviera style furnishings and outdoor dining.

The only coffeehouse downtown to provide regular weekendevening entertainment.

Awider variety of popular drinks than our competitors, including flavored coffee drinks, tea, chai, cocoa, juice and Italian sodas. We have several drink options for people who don't drink coffee: tea, cocoa, juice and smoothies.

Our Internet website will include sales of whole coffee beans, tea, chocolates, gift items andgift baskets.

5.2 Marketing Strategy

Other coffeehouses rely almost entirely on word-of-mouth marketing to generate business. We will engage in an ongoing aggressive marketing program that will help us establish profitability quickly and set the stage for continual growth.

Our strategy will be to position INDIAN as the "Lexus" of coffeehouses, offering a high quality product andsuperb servicein a superior environment.

5.2.1 Launch Marketing

Most coffeehouse chains do little or no marketing and advertising. For example, Starbucks' philosophy is that their ubiquity in the marketplace is all they need to sustain and grow their customer base. They spend less than 1% of gross revenues on advertising, and when they do spend, it is usuallyto introduce a new product.

The retail coffee industry is a sales-oriented business with historically very little experience in marketing and advertising. This is likely why little is done. As yet, the major players have not been taken over by sophisticated companies like Pepsico, where marketing is viewed as essential to gaining market share.

An element of our differentiation from other coffeehouse chainswill beour use of advertising and marketing to gain awareness, build customer traffic and establish a strong brand image. We intend to create immediate customer awareness and not wait for word-of-mouth. We are also building customer traffic immediately with an aggressive Launch Marketing Plan.

WebsiteOur websiteis fully e-commerce functional and could easily become a significant revenue source.

We will eventually sell the following items online:

Whole coffee beans, tea

Gift baskets

Gift items

Furnishings

And in a first for any coffeehouse in the world, we will also sell a catalog ofglass artworkrepresentative of our store decor. We will act as the sales agent for a number of participatingstained glass, and art glassartisans.

The website also markets INDIAN with:

A monthly newsletter

Interesting information about the coffee industry

A map to our store

Store hours

Special events

Coffee recipes

Most of these functions are already up and running.

LocationThe location of the first INDIAN in Mumbai is a prototype of future sites. Our second site on busyShoreline Road inMount Hillwill feature our flagship store. It will belocated just off theOak Patch Road and Highway 66 exit, across from theMount HillInn and The Junction Restaurant.It is by far the best location in Mount Hillone of India 's most affluent cities.

We will build INDIAN coffeehouses in the best locations possible, as this is the key element in a successful operation.

Site selection criteria include:

High traffic location

Small or mid-size affluent market

Year-round tourist activity

Nearby (within 5 miles) student population

Outside dining

Other sites that meet these criteria include Newburg, Springfield, Bayview, Shorewood, Orchard Valley, Beachey Head, and Capital City.

Exceptions will be made for some sites if they are deemed to be potentially very profitable.

Sitesin other statesmight include Utah, New Mexico, Oregon, Washington, Montana, Idaho, Colorado, etc. Plans are to locate INDIAN coffeehouses in the Western states for efficiency of supply and management.

Outside DiningThe coffeehouse/cafe experience is indelibly linked to its European origins, where al fresco dining is a way of life. India ns have embraced sidewalk dining. It is one of the fastest growing additions to the India n dining scene.

Sidewalk dining also provides an excellent way for prospective customers to see and "check out" the coffeehouse for the first time.

Chart: Sales by Year

1 unit = Rs 2,00,000

Chart: Break-even Analysis

Conclusion

Finally, taking into consideration all the aspects , statistics and future growth of the company I would like you to send me a feedback on the same with proper justification and changes for the same

Thank You

Team A

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