A PROJECT REPORT ON TO CHECK OUT THE FEASIBLITY OF SUMUL TEA STALL UNDER TAKEN AT SURAT DISTRICT CO-OPERATIVE MILK

UNION LTD. SURAT SUBMITTED BY: PATEL SACHIN B. (06 MBA 41) GUIDED BY: ANIL SARAOGI MBA PROGRAM (YEAR 2006-2008) SHRIMAD RAJCHANDRA INSTITUTE OF MANAGEMENT AND COMPUTER APPLICATIONS

SYNOPSIS:
I have Marketing specialization with the subject of study of to check out the feasibility of SUMUL tea stall in Surat City. My project period is from 21st May 2007 to 18th July 2007. For this survey, exploratory research design is used. Primary data is collected from the tea hawkers and survey of customer who drink tea at tea stalls in Surat city. Secondary data is collected from previous reports. Sample size is 180 Customer who drink tea at tea stalls and 100 tea hawkers. Research instrument is Questionnaire based. Contact method is personal interview. Surat District Co-operative Milk Producers Union Ltd, popularly known as SUMUL, has the highest sale of milk in Surat city. It holds the all India distinction of giving the highest price for the milk procured from the farmer. Beside milk supply, SUMUL also has a range of milk products, which includes Ghee, Paneer, Flavored Milk, Sweets, Shrikhand, White Butter, Condensed Dahi, Matho Sweet Cream, & other products like Tea powder, Sugar. My project is all about checking the feasibility of SUMUL tea stall. Initially we did survey about milk consumption pattern of tea hawkers. In it I found the type of milk that is being used and also demand of tea in different areas of Surat in different season. We did the survey about consumers taste and preference for tea.

Findings
Along with the Good Taste, Cleanliness & Hygiene and Gathering Place are also the attributes which can generate a great demand. Thus, SUMUL should emphasize on these two parameters. Different areas of People have different kind of Taste and Preference and SUMUL should provide the blends according to it, like level of thickness, sweetness and strong ness. People of Varachha and Pandesara prefer the thick, sweet and strong tea. On the other hand people of Athwalines prefer medium tea. I found that people who are in the age group between 1825, about 60% drink tea just for sake of time pass only, as age increase people become habitual of drinking tea in the age group of 26-41 56 people out of 92 are habitual. People who belong to the income group below 2000 dont visit tea stall I found only 3 people out of 180 who drinks tea at tea stall. 72% of respondence have given weighted to good

relationship with wanders.68% of respondent have given more emphasis on cleanly ness and Hygiene. Respondents havent found price as an important factor according to data 82% people have given unimportance to price.

 I found one interesting result from cross tabulation of headache and effect that people who drink tea for relaxation if they do not drink it they feel sleepy. 92.2% habitual persons get headache if they do not drink tea. And also 88.1% of habitual respondents drink more tea under stress. 79% of respondents dont prefer to drink any other thing accept tea at tea stall.

Recommendations: 1. SUMUL should take an amount (say Rs. 300) per year as a token. So that it can recover its capital expenditure quickly. 2. To get exact location and to be very nearer to road. Sumul should give its tea stalls to the other people and even present tea stall owners to open the stalls at an exact location. 3. SUMUL also can call present Tea stall owners selling tea near by roads and use their expertise in tea business. 4. The very practical problem as shown in likely barriers is that SUMUL Tea stall in the premises of milk agents may disturb the milk agents regular business. (I.e. selling of other milk products). From, analysis of customer characteristics say that most of the customers of Tea are male and generally the milk products selling into the shop like Milk, Buttermilk, Curd, Ghee etc. are to be bought by Female. SO, A CROWD OF MEN ON A TEA STALL IN FRONT OF THE SHOP MAY HASITATE THE WOMEN TO VISIT THAT SHOP. 5. In the canteen of SUMUL Dairy, Tea was prepared from the other and of tea powder and not of SUMULs. Such things may harm

SUMUL Dairy reputation. So, we recommend Mkt. manager for that and immediately notice given to the canteen owner to use SUMUL Tea.

RESEARCH METHODOLOGY
1 Problem Definition:
The problem definition is to Check out the feasibility of Sumul tea stall in Surat city. For that I have done survey on consumer taste & preference for tea. & consumption pattern of tea hookers

2 Research Objectives:
To know demographic profile of people and frequency of tea consumption. To search out attributes and taste that consumers prefer. To learn extent to which people are habitual to tea consumption and its implication. To know the probable selling and essentiability of other products. To know the level of satisfaction.

Research Design:
Here the descriptive research design has been used because here we want to know taste & preference of people for taking tea. Here for that project of feasibility I have also done exploratory research

for knowing seasonal demand of tea in different area.

Sampling Design: Here non-probability random sampling has been used. Sample Size: The sample size is 180 respondents for taste for tacking tea & 100 sample size for knowing

&preference

consumption pattern of milk for tae hawkers,& seas ional demand of tea in different area. Sampling Unit: The sampling unit comprises the customers of the tea stalls across all age groups & tea hawkers. Choice of Survey Method: Here for our research, we have selected the personal interview method. Research instrument: Questionnaire was used for the purpose of the data collection as the research instrument. Questionnaire consisted of closed & open ended questions including rating scalls. Pre-testing: It is necessary to check the questionnaire before actual research is done. Therefore pre-testing is done. In this case, pre-testing was done for 20 respondents, and on the basis of feed back, questionnaire was fine-tuned. A. Sampling Plan:

Sampling Design and Sampling Method: In this study, non-probability sampling design has been used and the sampling method employed is random Sampling. I. Define the Target population -Element: Potential Customer of Tea Hawkers comes -Sampling Unit: tea drinkers. -Extent: Surat city -Time: From 21st may.2007 to 18th July. 2007 ii. Select sampling techniques: Non-probability convinces sampling. iii. Execution of sampling process: We have collected data from visiting tea stalls by conducting interview of Customer who comes for taking tea tae hawkers.

3(A) MARKRTING FEASIBILITY: Pricing:

The study of customer characteristics says that high price of tea do not affect their consumption or we can say they do not bother the prices. Because of co-operative nature SUMUL is going to charge the reasonable prices from them. Secondly, in order to be more competitive SUMUL has kept its prices according to the market rates i.e. Rs.3 per cutting. - SUMUL is going to sell its tea powder at the rate of Rs.145per kg. And its cost will be Rs.135.

- The selling price of Sugar is Rs.20 and its cost price is s.19.50. - Presently SUMUL is selling its milk Amul-Shakti at Rs.10 and Amul-Gold at Rs.11 respectively. From both the type of milk SUMUL gets the profit of Rs.0.35 from milk agents per pouch.

Promotional Tool:
Out of numbers of promotional tools SUMUL is going for the Publicity tool. It means SUMUL wants to gain publicity through word of mouth. SUMUL wants People to talk about the Tea Stalls as news. However publicity is not within the control of the company and therefore company should give the advertisement. Advertisement once will be resulted in more publicity. Thus, IN ORDER TO GAIN PUBLICITY SUMUL SHOULD GIVE THE ADVERTISEMENT.

Place: Municipal Law:

Application has to be given to the Town-planning commission Department on the Letter-pad of Sumul Dairy. After analyzing the business and objective if it is found to be acceptable then Town-planning Department send a letter to the Zone-office of a particular zone.

 Land-Asst.

Dept.

of

Zone

office

will

analyses

the

Application and Business SUMUL Dairy (has need) to give a List of location to the Zone-office. If it is feasible and does not the warm the public interest then the permission is to be given 67 lands-Assets Department. After that permission has to be taken from Health Department and co-operative has to convince then that there will be no wastage or pollution. The next step is that the officers from zone officer will come to examine the place and the premise i.e. Laurie and make sure that whether it is made in compliances of municipal law or not. If everything seems to be positive then permission will be given.

Criteria:
4 4 feet Laurie not exceed than the Sumul has to open all the tea stalls under its own responsibility. It can not directly appoint any person to run the business independently. In future if any problem arises then only and only Sumul will be responsible for that.

3. (B) How to Design the product and service most effectively given the needs of the

target

Market

&

the

competitive

Environment?
As SUMUL is a popular and repeated brand it will launch with a unique style. The tea makes will be in a dress and hand glows. The Laurie will have an attractive painting of popular shepherd photo & SUMUL tag. Cleanliness / Hygiene will attract the customers. The Cups are having a tag of SUMUL therefore, other people may attract towards SUMUL tea following the other consumers.

3. (C) Why People should drink SUMUL tea?

Variety of flavors Brand name Quality assurance because each product used is branded and of good quality

4. FINANCIAL FEASIBILITY
Cost Structure
SUMUL is launching SUMUL TEA STALLS. SUMUL itself will be incurring all the fixed expenses to start a new tea stall. It will also provide all the necessary equipments to SUMULs Tea Stall Agents. SUMUL is also not going to collect any commission from Tea stall agents for using its brand name.

Fixed Cost:
(For starting one Tea Stall)

Fixed Cost Tea stall Laurie (4x 4) Municipal tax(Advance) Burner (with two burner) Dustbin Hand Glows, Apron & Caps Glasses & Dishes (24) Other Vessels(kettle ,pan etc) Exps. of paints Total fixed cost

Rupee s 20,000 3,650 1,200 150 150 300 1,800 500 27,750

Variable Cost:
Cost of 1kg of Sugar S.P Rs.20 C.P Rs.19.50 Net Profit 0.50 paisa Cost of 1kg of Tea S.P Rs.145 C.P Rs.135 Net Profit Rs. 10 Cost of Milk Packet S.P Rs.11

(500ml each)

C.P Rs.10.65 Net Profit

0.35 paisa (milk agent) for SUMUL pft is Rs.1 (Expenses incurred for making 600 cuttings)

Variable Cost

Rupee

s Milk (64 packets) 682 Tea (1.5 kg) 217 Sugar (6.75 kg) 135 Ginger 40 Cardamom 54 Municipals tax(Daily) 10 Wages of worker 20 Wage of tea maker 40 Total variable cost 1198

Estimated Yearly Demand (per tea stall)

Yearly Demand Baroda bridge Athwalines Rander Pandesara Station road No. of cuttings consumed (In Rs.) 2,14,440 1,36,800 1,14,600 1,60,320 99,360

Yearly expected profit (For SUMUL)

Break even point (SUMUL)

Area

No. of Pouches Milk consume d (pft Rs.1)

Total consumptio n of tea (pft Rs.10)

Total Consumptio n of sugar (pft Rs.0.50)

Profit (In Rs.)

Baroda Bridge Athwalines Rander Pandesara Sumul road Total

23,760 14,760 14,040 15,840 15,840

5,360 3,420 2,870 4,010 2,480

1,207 770 645 902 559

30.327 18,950 17,555 20,752 18,879

1, 06,463

 Break even point Monthly Profit Daily Profit

27,750 * 5 1, 38,750 8,872

= Rs. = Rs. = = Rs. 296

= 1,06,463/12 8,872/30

3 Months Profit = 88728* 3 =Rs.26616 Difference(32000-26616 )=Rs.5384 Days = 5384/296 = 18Day aprox.

B.E.P =1 Yr+3months+18 days =473days

FINANCIAL FEASIBILITY
Proposed Trading and P&L a/c of SUMUL Tea Stalls for the year ended on 30-9-2008 Credit Rs. Rs.

Net Sales Tea Powder(1814kg.*Rs.145) 2,63,030 Sugar(8163kg*Rs.20) 1,63,260 Profit on Milk (84240No. 84,240 pouch*Rs.1) Total Debit Net Purchase Tea Powder(Rs.135/-) Sugar (Rs.19.50/-) Gross Profit Total Credit Gross Profit Total Debit Dep. Of Laurie Dep. Of Burner Hand glows, Apron & Cap Exps. Of tea glasses and other vessels Exps. Of Paint Municipal Tax (3650*5) Net Profit Total

5,10,530 5,10,530

2,44,890 1,59,179 1,06,461 5,10,530

1,06,461 1,06,461

5,000 480 1,200 2,400 4,000 18,250 75,131 1,06,461

Balance Sheet of Sumul Tea Stalls as on 30-9-2008

LABILITY Rs ASSETA

Capital Net profit

2,00,000 75,131

Total

2,75,131

Laurie 5% dep. Burner 5% dep. Dustbin Vessels Cash Total

1,00,000 5,000 9,600 480

95,000 8,120 1,200 14,400 156,411 2,75,131

5. Data analysis & interpretation. 1. Drinking frequency of tea & Income. Purpose:
- To know which income group people usually come to Drink tea at a tea stall. Case Processing Summary Cases Missing Percen N 0 t .0% N

Valid Percen N income * frequency 180 t 100.0 %

Total Percent

180 100.0%

Income * frequency Cross tabulation

Frequency more 1-3 inco not earning me % within below2000 income Count % within income Count % within Count 23 69.7% 1 33.3% 29 59.2% 17 27.4% 8 33.3% 6 66.7% 84 46.7% 4-6 8 24.2% 1 33.3% 14 28.6% 38 61.3% 10 41.7% 3 33.3% 74 41.1% 7-9 1 3.0% 0 .0% 3 6.1% 4 6.5% 5 20.8% 0 .0% 13 7.2% than 9 1 3.0% 0 .0% 3 6.1% 3 4.8% 0 .0% 0 .0% 7 3.9% 5 0 .0% 1 33.3% 0 .0% 0 .0% 1 4.2% 0 .0% 2 1.1%

Total 1-3 33 100.0% 3 100.0% 49 100.0% 62 100.0% 24 100.0% 9 100.0% 180 100.0%

2000-5000

income 5001-10000 Count % within 1000115000 % within above 15000 % within Total income Count % within income Inference: income Count income Count

In the above cross-tabulation, we have tried to find inter-relationship between the frequency of tea and Income. It can be clearly seen from the chart that respondents who are not earning drink tea comparatively less in quantity i.e. 69.7% are fall in to category of 1to 3

cup drinkers. While income group below 2000 they hardly visit tea stall. 59.2% of people who lies in the income group between 20005000 used to drink tea around 1 to 3 cups per day. Respondence that lies between the incomes groups of 5001-10000 are more frequent visitors of tea stall. Respondents who have income more than 10000 used to drink tea lesser in quantity at tea stall. Chi-Square Tests: Null Hypothesis (H0): There is no association between the drinking frequency of tea at tea stall and Income. Alternative Hypothesis (H1): There is some association between

the drinking frequency of tea at tea stall and Income. Significant Level: 0.05 Chi-Square Tests Asymp. Sig. Pearson Square N of Cases Value Chi- 64.539 (a) Valid 180 df 20 sided) .000 (2-

Inference: Here the value of Pearson chi-Square is 0.000, since the significant value is less than 0.05. So the null hypothesis is rejected and we can say that there is some association between drinking frequency of tea at tea stall and Income. Explanation of Pearsons Chi-square:

The Chi-square test is carried out at 95% confidence level (0.05 significance level). The Pearson Chi-square value comes out as 0.00, which is less than significance level of 0.05; it means there is significant association between drinking frequency of tea & income.

Rate the factors or attributes do you consider as important for selecting tea stall for drinking tea. Purpose:-which are the factors or attributes SUMUL has to consider
to be very important at the time of opening new tea stall.

2. Respondents opinion about Taste at the time of selecting tea stall. Taste

Scale Very Unimportant Unimportant Nutral Important Very Important Total

Frequency 1 4 4 107 64 180

Percent 1 2 2 59 36 100.0

Taste 2% 1% 2% 36%
Very Unimportanat Unimportanat Nutral

59%

Importanat Vary Importanat

From the above chart it is been observe that 59% & 36% of the respondents have given more importance to taste at the time of selecting tea stall. So it can be helpful for SUMUL to attract customers. One Sample T-Test: Null Hypothesis (HO): There is no significant difference between calculated mean and hypothesized mean (4.00), in other words, we hypothesize that the customer are agree with the statement that they are not given more importance to taste. H0: ST < 4 Alternative Hypothesis (H1): There is significant difference between calculated mean and hypothesized mean (4.00),in other words, we hypothesize that the customer are agree with the statement that they are given more importance to taste. H0: ST > 4 Statistical Test: one sample t-test is chosen because the measurement of data is interval in nature. Significance level: 0.05

T-Test
One-Sample Statistics Std. Std. Taste N 180 Mean 4.28 Deviation .645 Error Mean .048

One-Sample Test

Test Value = 4.0 Mean Differen Sig. t Taste Inference: 5.890 Df 179 (2-tailed) .000 .283 ce

95% Confidence Interval of the Difference Lower .19 Upper .38

Here the test is performed at 95% significance level and the p-value comes out as 0.000 which is less than 0.05, it means that the null hypothesis H0 is rejected and alternative hypothesis is accepted and it can be said that there is significant difference between calculated mean and hypothesized. Here we can say that when selecting tea stall that time taste consider as important attributes.

6. CONCLUSION: surveys:

As I have done a project on To check out the

feasibility of SUMULs tea stall in Surat. For that I have undertaken two

(1) To know the milk consumption pattern of tea hawkers. (2) Consumers taste and preferences for tea. From that I conclude that the demographic profile of customers highly influence their taste and preference for tea. Like, (1) Different areas of people have different kind of taste and preferences and SUMUL should provide blends according to it, i.e.

Varachha people prefer thick, strong and sweet tea whereas Athwalines people prefer light and medium tea. (2) Different age groups have different impact on the taste and preferences, i.e. 18-25 years of people drink tea only for time pass, whereas 26-41 years of people are habitual people and they drink more frequently, so SUMUL should concentrate on this age group. (3) The below 2000 income group usually do like to have tea at tea stall. From the findings I conclude that following points are very important on which SUMUL should concentrate more, i.e. (1) 72% of respondents give more importance to good relationships, 68% give emphasis cleanly and hygiene, 82% do not give importance to price, 95% give more importance to taste. (2) Habitual class people suffer from headache if they do not drink tea and who drink for relaxation if they do not drink tea then they feel sleepy, under stress 92.2% habitual people drink more tea. So there is an opportunity for SUMUL to take the advantage and reach to their needs. (3) Another conclusion is that SUMUL has no need to sell other products on stalls.