2009

SuperMarket Business Plan

Submitted by:

Orion Alliance P. Ltd.

Thapathali, Kathmandu, Nepal
SuperMarket Business Plan
Technical & Financial Plan

© Copyright @ 2009
Orion Alliance Consultant P. Ltd.
Thapathali, , Kathmandu, Nepal
Tel: 009771-
Email: orionaso@wlink.com.np

All rights reserved. No part of this document may be reproduced,

stored in retrieval system or transmitted in any form or by any
means, electronic, mechanical, photocopying, recording, or
otherwise without the prior permission of Orion Alliance
Consultant P. Ltd, Kathmandu, Nepal.

Page | 2
 Table of Contents

1.0 Introduction ........................................................................................................ 4

2.0 Frame of the Project ............................................................................................4

2.1 Objectives .........................................................................................................4

2.2 Scope of the Project .........................................................................................5

3.0 Methodology ........................................................................................................ 5

4.0 Project Reporting ...............................................................................................7

5.0 Team Members ...................................................................................................8

6.0 Confidentiality & Ownership of Data ..................................................................8

7.0 Project Schedule .................................................................................................8

8.0 Budget ................................................................................................................. 9

Annexure 1: Market Survey Technical Proposal........................................................10

Annexure 2: Company Profile...................................................................................13

Page | 3
1.0 INTRODUCTION

The promoters of Hotel Everest International P. Ltd, a well established business

group in Nepal is exploring the idea of diversifying from the hospitality industry and
would like to enter into the supermarket business. In this regard, the promoters
would like to develop a detailed business plan to assess the market feasibility of the
project and more importantly, a business plan to enter into the venture.

In this regard, it is looking for professional consulting agencies to undertake the

business plan project and Orion Alliance Consultant, a professional research,
management and marketing consultancy agency would like to express its interest
and this document contains the technical and financial details of the same.

2.0 FRAME OF THE PROJECT

2.1 Objectives

The overall objective of the project is to identify the feasibility of establishing a

grocery supermarket in New Baneshwor, Kathmandu by understanding the
changing household purchase and consumption behavior, market competition and
determining the financial feasibility of the project.

The detailed objectives of the project are:

1. To identify the awareness of department stores and supermarkets, purchase and
consumption habits and image perception of households in the urban area of
Kathmandu and Lalitpur through the market survey.
2. To evaluate the market position of the leading department and supermarkets in
Kathmandu Valley to estimate their traffic volume, business turnover, etc.
3. To make an observation survey of leading department and supermarkets in
Delhi, India to understand the various business models being used.
4. To work with the client and appointed architects and engineers on the
development of the physical infrastructure plan of the project.
5. To develop a business plan that includes :
a. Marketing plan – with inputs from objectives 1, 2 and 3, develop a
market situation analysis, Marketing objective and strategy, 4Ps (Product,
Price, Place and Promotions), Sales strategy and objectives, Marketing
Expenses.
b. Technical Plan – includes floor plan, renovation works Bill of Quantity
(BoQ) summary, renovation costing summary, list of equipments and their
cost for purchase and installation (including brand and supplier). The details
to be included in the Annexure.
Page | 4
 c. Operational plan –includes shelf management, procurement and
inventory management, supplier management, housekeeping, maintenance,
etc.
d. Organization plan – includes legal registration, promoters and their
shareholding, organization structure, job descriptions, administrative and
operational expenses, etc.
e. Financial plan – includes project cost (pre-operating, capital, working
capital), project financing, projected cash flow statement, projected profit and
loss statement, projected balance sheet, loan payback summary, financial
analysis i.e. Return on Investment (ROI), Pay Back Period (PBP), Break Even
Point (BEP), Net Present Value (NVP), Internal Rate of Return (IRR).

2.2 Scope of the Project

The various stakeholders in the project shall share the following roles and
responsibilities:
1. The client shall appoint a project coordinator to coordinate the requirements of
the project.
2. The consultants shall conduct the market survey in the household segment,
competitor segment and observation in key supermarkets of Delhi, India and
prepare a market survey report and a presentation on the findings.
3. The client shall appoint an architect to develop detailed floor plans, provide BoQ
and their estimated cost for all renovation works.
4. The consultant in consultation with the appointed architect shall provide the
client with a list of equipments and their specifications required for the project.
The consultant shall also provide the client with prospective brands available
and their costing. It shall be the final decision of the client to approve the list of
equipments to be used in the project.
5. Prepare a Business Plan which will include the following components: Executive
Summary, Marketing Plan, Management Plan, Technical Plan and Financial Plan.
6. The consultants shall use authentic primary and secondary data from reliable
sources as deemed necessary.
7. The consultants shall make a formal presentation to the management team of
Civil Homes on the Business Plan.
8. The consultants shall provide the client with four hard copies of the reports and
one digital copy in CDROM.

3.0 METHODOLOGY

Case Study: At the first stage of the project, the team of consultants will make a
visit to Delhi, India for an observation study of the leading supermarkets namely Big

Page | 5
Bazzar, xxx, xxx to evaluate the various types of large retail store formats being
used. Formats of large retail stores of India are going to be referred to as a case-
study due to the close cultural, purchase and consumption similarities between
Nepal and India. The team of consultants shall also review successful retail store
formats across the globe. It is suggested that the Architect should also be appointed
at this stage and should be a part of the observation team.

Market Survey: the market survey will consist of two components, household
survey and competitor survey. The household survey will identify household
purchase and consumption habits, needs and wants while the competitor survey will
identify customer traffic volume, strengths and weaknesses, etc (Please refer to
Annexure 1 for details of the market survey). The findings of the survey will be
crucial for the project management team to understand customer needs and wants
and develop appropriate project and marketing plans.

Technical Plan: based on the observation study and discussions thereof on the
various large retail store formats, the architect will start working on the floor plan in
close consultation with Orion and the client. The architect is to present alternative
concept plans with estimates on cost to Orion and client before even starting to
work on the detailed plans and costing. Orion and the client shall review the
alternative concept plans and approve one final plan on which the architect will
then develop details.

With the approved floor plans, the architect team and Orion in consultation with the
client shall work on the furnishing and equipments requirements, supplier
identification and their estimated costing. Meanwhile, the architect shall provide
Orion with a detailed Bill of Quantities for renovation works and their estimated
costs.

Operational Plan: Orion shall develop floor management strategies, definte

service standards, shelf management policies and procedures, procurement and
inventory management policies and procedures, supplier identification and selection
policies and procedures, housekeeping and maintenance systems based on the
case study of the large retail store formats in India and abroad and further
discussions with the client.

Page | 6
Figure 1: Methodology

Project cost: the total cost of the project, in terms of pre-operating cost, capital
expenditure and working capital will be derived from the marketing plan,
operational plan, technical plan and organization plan.

Financial Plan: after the initial project cost is derived, Orion will work on the
financial analysis and may make further changes to the project cost by revision in
various cost components to review the various costing options available.

4.0 PROJECT REPORTING

Orion will report to the client on a fortnightly basis on the progress of the project.
Further, Orion, architect team and the client will have a meeting minimum on a
fortnightly basis while adhoc meetings may be held to discuss the details of project.

Page | 7
5.0 TEAM MEMBERS

The Project Coordinator for the project is Mr. GauravMan Sherchan and the core
team of the project are as follows:
Sn Name Specialization
.
1 Anand Tuladhar Lead Consultant
2 GauravMan Sherchan Research Consultant
3 Ms. Shareen Research Executive
Tuladhar
4 Lila Aacharya Field Manager
5 Shyam Karki Chartered Accountant

6.0 Confidentiality & Ownership of Data

The report shall be sole property of the client and Orion Alliance Consultant P. Ltd,
Thapathali shall not disclose any information contained in the report to any other
party without prior written approval of the client.

7.0 Project Schedule

The entire project will be completed within three months of awarding the contract to
Orion. It should however be noted that the architect appointed by the client shall
also have to adhere to the project schedule for the timely completion of the project.

S Activity Month 1 Month 2 Month 3

n
1 Delhi, India Visit
2 Instrument Design
3 Pilot testing & Field briefing
4 Market survey field work
5 Coding & Data Entry
6 Table Analysis
7 Conceptual Floor Plan
8 Floor Plan Finalization
9 Detailed floor plan & BoQ
1 Furniture’s & Equipment
0 selection
1 Financing Projections &
1 Analysis
1 Report writing
2

Page | 8
1 Submission of Report
3

8.0BUDGET

The total cost of the project is NRP 4,87,500 (Nepali Rupees Four Hundred Eighty
Seven Thousand Five Hundred Only), exclusive of VAT 13%.

Sn Particulars Rate Unit Amou

nt
1 Research Consultant Time Cost
a. Lead Consultant 5000 12 60000
b. Research Consultant 4000 15 60000
c. Research Executive 2500 20 50000
Subtotal Research Consultant 17000
Time Cost 0
2 Financial Consultant Time Cost 10000
0
3 Field Cost
a. Field Officer 800 20 16000
b. Systems Analyst 1000 10 10000
c. Field Supervisor 700 40 28000
d. Field Interviewer 500 165 82500
e. Coding and data entry 400 20 8000
f. Local transpiration 5000
g. Questionnaire printing 5000
h. Miscellaneous expenses 20000
Field Cost 17450
0
4 Other operational Expenses
a. Transportation to Delhi, India 19000 2 38000
b. Printing and stationery 5000
Sub-total Other operational 43000
Expenses
Total Exclusive of VAT 13% 48750
0

Terms of Payment:
• 40% on awarding of contract.
• 40% on submission of final draft report.
• 20% on submission of final report.

Page | 9
 Annexure 1: Market Survey Technical Proposal

1. Objectives

The overall objectives of the survey is to identify the awareness, purchase and
consumption habits and image perceptions of the SEC A & B households with regard
to household grocery purchases in the urban areas of Kathmandu and Lalitpur. The
survey aims to understand consumer behavior and their needs and wants with a
view to understanding the market feasibility of starting a supermarket in New
Baneshwor Everest Hotel premises. The survey will also include a survey of the
leading department stores in various locations across the Kathmandu and Lalitpur.

2. Information Areas

The information areas to be covered in the market survey are as below but is should
however be noted that a more detailed information area will be worked on in
consultation with the client before drafting the research instrument.

Sn Particulars
1 Demographic details
2 Awareness
3 Purchase & consumption
Habits
4 Image perception
5 Competitor review
6 Traffic volume
Details
Gender, Age, Ethnicity, Respondents Education &
Occupation, CWE Education & Occupation, Household
members, Monthly Personal Income, Monthly Household
Income
Top of Mind & Spontaneous awareness of Department
Stores
Person purchasing, incidence of shopping in different
retail store formats, frequency of purchase by type of
store, location/s of purchase, reasons for choice of
location/s of purchase, Monthly household expenses in
grocery & vegetable purchases, major items consumed,
etc
Important considerations when shopping, image
perception on types of retail store formats, factors
important in a supermarket
Year of establishment, location, coverage, floor space,
departments, business volume, strengths and
weaknesses, etc.
Estimate of traffic volume and value projections

Page | 10
 3. Methodology

The total sample will be grouped into a cluster of five households per cluster (160
clusters). The sample will be segmented into two basic geographic segments,
primary target segment which encompasses the area encircling the supermarket
and second, the larger area which is Kathmandu and Lalitpur.

The research instruments will be developed by Orion and the final draft shall be
submitted to the client for approval. The questionnaire will be translated to Nepal.
Orion shall conduct a field briefing and pretest the Nepali final draft questionnaire
will be pretested among a group of 50 households. Based on the feedback from the
pretest, the questionnaire shall be edited and implemented in the field.

The household survey will be conducted using a semi-structured interviewer

administered questionnaire. The total 160 clusters will be appointed one starting
point in a street junction and the interviewer will conduct interviews in five SEC A &
B households using the right hand rule. The main purchaser of the household will be
identified and the interviewer shall take the interview with the respective person.

As a measure of quality control in the field work, the following standard practices
shall be adopted:
i. A total of 15 field interviewers grouped into five members per team shall be
deployed. Each team shall have one supervisor.
ii. Only 100% complete questionnaires shall be accepted and the field supervisor shall
conduct accompanied checks and back checks for 33% of the interviews.
iii. 100% of the questionnaires shall be checked for completeness and ensure the
questionnaires have been correctly coded.

The filled up questionnaire shall be duly coded and entered into the database and
analyzed using SPSS, professional analysis software.

Page | 11
4. Area of Coverage

The survey will be conducted in the urban areas of Kathmandu and Lalitpur with
broadly two geographical segments. The first will be within the immediate market
area of New Baneshwor and the second will be the remaining area of Kathmandu
and Lalitpur.

Figure 2: Sample Coverage

Proposed
Location
of Supermarket

5. Sample Size

The total sample size for the household survey is 800 interviews in SEC A and B
households while the competitor survey will cover all the key department stores
within the geographic coverage of the survey.

Page | 12
 Annexure 2: Company Profile

Orion Alliance Consultant P. Ltd, is a new generation fast growing independent

market and social research organization offering full service marketing and social
research, management and marketing consulting, project development with full
service research office is located at Thapathali, Kathmandu.

The company was established by a group of professionals having years of

experiences in research and consultancy services. Now, Orion Alliance has an
adequate set up (human resource as well as other infrastructural) to conduct any
type of research and consultancy services throughout the country with its own set
up. And further it also has a partner concern in India to carry out the same type of
services all over the South Asia.

We strive to be strategic thinkers who work in partnership with you to produce

creative, value added, practical, and profitable solutions within organization
constraints. Understanding the target segment is the focal point of success of any
project or organization. Through meaningful research and technical inputs, we
provide Better Informed Decisions.

Our Mission: “To help you make better-informed decisions and contribute to the
development of the society at large.”

OUR SERVICES:

Social Research
- Knowledge, Attitude and Practices (KAP) studies
- Program Evaluation (Baseline and End line studies).

Marketing Research
- Consumer research
- Distribution research
- Media & advertising research
- Business-to-business / Industrial products Research

CONSULTING
We also further provide consulting services in the field of management, marketing,
ICT and project development though our experienced staff. As per our mission, all
our consulting services will be based on information integrated with experience.
- Project Development / Business Plan / Feasibility Study
- Management consulting
- Marketing consulting

Page | 13
We develop marketing plans and further help the client in implementing the same.
We also take up ad-hoc marketing initiatives.

Others:
- Rappotuering
- Translations
- Transcriptions
- Proposal writing
- Report writing

Financial Consultants:
Shyam Kakri & Co
Old Baneshwor, Kathmandu, Nepal

Consultants Associated with Orion Associates:

o G.P Gorkhali : Environment Economist and Urban Planning
o Dr. Renuka Joshi : Sociologist
o Dr. Noora Shrestha : Health Specialist
o Narendra Rasaili : Forestry
o Krishna Lal Poudel : Agricultural Economist
o Dr. Sushil Shakya : HIV/AIDS expert
o Laxmi Bhattarai : Family Health Expert
o Dr. Chola Chalise : Economist
o Kedra Man Joshi : Socio-economist
o Mr. Salil Devkota : Environment/Eco Tourism
o Dr. Gyanendra Tuladhar : Tourism Expert
o Dr. Dandapani Poudel : Economist (Financial Sector)

International Associates:
- FACTS Worldwide India (A Group Company of MORI, UK)

We use senior consultants on a need basis and at any time, we have the capacity to
mobilize up to 100 experienced interviewers across Nepal.

Undergoing Projects:
1. Feasibility Study for Apartments and Trade Center, Civil Housing
2. Tourism Snap Survey, Nepal Tourism Board (NTB)
3. Fund Management and Communication Manual, Sabera Foundation India, Kolkota

Page | 14