Romanesco Coffee plans to enter the Indian coffee market, which is currently dominated by Nescafe. They will target the South Indian market where coffee consumption is highest. The company will establish coffee factories and distribution centers in key cities. Coffee will be sold through distributors and retailers with margins of 8% and 5% respectively. In the first few years, Romanesco will focus on select cities and try to differentiate their coffee based on quality, taste and new flavors. Their goal is to gain market share from Nescafe by providing a quality alternative.

1. THE CASE OF
ROMANESQUE COFFEE
Abhijeet Prabhu (P13038)
Anant Sharma (P14050)
Anuj Vengurlekar (M14113)
Bhavesh Rathod (M14084)
Dhananjay Surte (M14106)
Kakoli Laha (P14026)
Shrikant Wankhede (M14119)

2. Source: National Sample Survey Office’s (NSSO’s) consumption studies for urban areas, 2013
0
2
4
6
8
10
12
14
16 Consumption of Coffee in Different States (Rs./ Month)
Region % Consumption
North 25%
West 13%
South 60%
East 2%
Coffee Statistics

3. CFAs in Navi Mumbai; Chandigarh, Gurgaon;
Bangalore, Vellore, Hyderabad, Kochi
End Consumer
End Consumer
Retailer (70%) / Wholesaler
(30%)
End Consumer
Modern Trade Retailer (20%,
approx. 500 in number)
E-commerce Retailer –
Amazon, Big Basket (3%)
Manufacturing Plant at
Haridwar
Distribution Model Overview
Distributor (77%)

4. Plan of action for West Region
• Navi Mumbai CFA will cater to metros and mini metros Mumbai, Pune, Nagpur, Nashik, Ahemdabad,
Ahmednagar, Ajmer, Surat, Jaipur, Jodhpur etc.
• CFA will cater to General Trade + 500 Modern Trade Outlets + Ecommerce Retailers
• For General Trade, there will be 1 Distributor per city
• 40 major cities in Western Region, hence 40 Distributors
• 1 lakh population 200 Retailers
• Ex. Mumbai’s population is 120 lakhs, and hence there are 24000 Retailers

5. Plan of Action for North Region
• Chandigarh and Gurgaon CFA will cater to metros and mini metros Delhi, NCR, Agra, Indore, Kanpur,
Lucknow, Patna and Chandigarh etc.
• Ex. 12 cities in Delhi-Haryana Region, hence 12 Distributors
• Ex. Delhi’s population is 100 lakhs, hence there are 20000 Retailers
Plan of Action for South Region
• Vellore, Hyderabad, Kochi CFA will cater to metros and mini metros Bangalore, Chennai, Hyderabad,
Kochi, Thiruvananthapuram, Coimbatore, Madurai, Visakhapatnam, Ooty, Kolam, Vijayavada etc.
• Ex. 18 cities in Karnataka, hence 18 Distributors
• Ex. Bangalore’s population is 40 lakhs, hence there are 8000 retailers

6. Operations
• Margins: 8 % margin to retailers and 5% margin to distributors
• Wholesalers will get approximately 2% margin as per standard norms
• Credit Terms to Distributors/ Retailers: 5% Payment on Spot and remainder of the
money after sale of coffee
• Logistics: Should currently use 3rd party logistics and purchase own vehicles within
the next 5 – 10 years, For ex. Future Supply Chain Solutions (FSCS) is 3rd Party
Logistics Supplier for HUL
• In next 5-10 years it should build plants in the south (TN, Karnataka) and then
move onto west of India (Goa, Maharashtra)

7. Terms of Operations
• Storage Policy :The Distribution/ Storage Centers must be equipped with
adequate refrigeration and air-conditioning. Distributer has to bear all the
charges pertaining to storage
• Return Policy : The stock is to be returned if it passes the expiry date or found to
be damaged. Replenishment will be done in cash bi annually.
• Credit Policy: Retailers/Distributers will have to pay an advance payment of 25%
on order. A credit period of 2 to 3 weeks will be given for the remaining amount.

8. Market Segmentation
Target market consists of basically coffee drinkers, especially people whom are in the need of
instant coffee that stimulates body within a day. Due to its convenience, it is a quick solution
for people who want to enjoy it at home, work or College; accordingly, it targets each of
them in different ways. Especially for target segments of working individuals or students, it
aims to awake them in the mornings, sober up in the afternoons, or again keeping awake in
the late evenings. Moreover, geographically, it addresses more south side rather than north
side in terms of habituality. Besides, another target can be assumed which contains the
middle-aged and elderly people who get into the habit of drinking

9. Market Segmentation
Geographic Wise: Northern, Western. Southern And Eastern
• Southern Segment consumes the most amount of coffee and prefers hard and roasted coffee
• Northern region: Instant coffee consumed in higher quantity
Demographic:
Age wise and occupation wise
1. 15yrs-23yrs(Students)
2. 23yrs-31yrs (College student and new employee)
3. 31yrs- 61yrs (Employee and businessman)
4. 61yrs – and above (Retired and who are mostly habituated)
Psychographic
1. Social Class: Middle class,Upper midle, lower upper and upper upper class
2. Personality: Ambitious,Compuslive, outgoing, inspired

10. 1)Occupation: StudentsAge: 15-23
Lifestyle: Busy Denstiy: Urban
Personality: Ambitious, outgoing Occasion: Seasonal (at exam times)
User Status: Potential user, regular user, first-time user
User rate: Light user Loyalty Status: Medium
2)Occupation: ProfessionalsAge: 23-31
Lifestyle: Western Denstiy: Urban
Personality: Inspired, outgoing Occasion: In the mornings
User Status: Regular user User rate: Medium user
Loyalty Status: None, medium, strong
3)Occupation: ManagersAge: 46-60
Family Life Cycle: Married w/children
Lifestyle: Hard-worker Denstiy: Urban
Personality: Ambitious Occasion: Regular
User Status: Regular user User Rate: Heavy user

11. Coverage Plan
• Each City will have one distributor
• For mega cities there will be more than one distributor
• Each distributor will have number of Sales Representatives based on
the population of the city
• In Mumbai, there are 24,000 retail outlets & each SR can do 210
outlets in a week, so theoretically number of SR required would be
115.

12. Costing Plan
Plan Per Outlet Per Month
Quantity 10 gm 250 gm 500 gm 1 kg
Price per SKU 10 230 450 880
No. of SKU 10 4 4 1
Total 100 920 1,800 880
Total Sale 3,700
Total Sale in Mumbai 8,88,00,000

13. Coverage Plan
SD Area
No. of
Distributors
No. of
SSO
No. of
SR
Cost per
SSO
Cost of
SSO
Cost per
SR
Cost of SR Total Cost
Expected
Business
Cost %
Mumbai
(Central)
1 3 40 15,000 45,000 7,000 2,80,000 3,25,000 2,73,00,000
Mumbai
(Harbour)
1 3 37 15,000 45,000 7,000 2,59,000 3,04,000 2,55,36,000
Mumbai
(Western)
1 3 38 15,000 45,000 7,000 2,66,000 3,11,000 2,61,24,000
Total Cost of Two ASMs 70,000
10,10,000 7,89,60,000 1.279
• This plan will be implemented over the period of four years

14. POSM Costing
POSM for Mumbai for One Year
Tools No. required Cost per shop Frequency Total Cost
Poster 24,000 2.5 3 1,80,000
Dangler 24,000 4 3 2,88,000
Banner 4,000 11 2 88,000
Stickers 12,000 5 2 1,20,000
6,76,000

15. PJP & MJP
• Permanent Journey Plan (PJP) & Monthly Journey Plan (NJP) will be
worked out once the distributors are finalized.
• There would be 25 days of working (21-Fixed & 4-Flexxible)
• One monthly meeting is essential for review purpose.

16. Market Visibility
• The online connection – Increasing the brand visibility by campaigns
conducted online
• Demos at college events and festivals
• Placement of the product in the store
• Sampling at various locations in the metros

17. SKU’s and Pricing
• SKU’s on offering by competitors – Nescafe and Bru :

18. • Pouch packets cost 20-30 rs less than jars
• Mr. Ajay should preferably keep the sku’s lesser in number
• Introduction of premium and non-premium variants can be done –
where the premium variant can be priced competitively with the likes
of Nescafe Gold and the non – premium variant can be targeted at
the masses

19. Incentive Scheme For SR
• According to Lines & Bills per day
• According to Target Achievement
• 100% achievement-750rs
• 99% achievement- 450rs
• 97% achievement- 150rs
• According to Eco
• 100% achievement- 750rs
No of Bills Amount
0-12 0rs
13-18 25rs
19-23 40rs
24 & above 60rs
No of lines Amount
0-50 0rs
51-65 20rs
66-80 35rs
81-95 50rs
96 & above 65rs

20. Competition Quarterly and Yearly
 There would be a competition among the employees for a extra
incentive for 2000rs which would last for a quarter. In which 4
parameters would be measured
 Eco
 Bill
 Lines
 Value achievement
 Then whoever tops the quarter in all 4 parameters would receive the money
and this would boost all the SR to increase their performance
• This same competition would be carried out for an year in which out
of four quarters whoever tops maximum time would receive 15000rs
as a reward

21. Competitors in the Market

22. Top Coffee brands in India
• Nescafe
• Tata Coffee
• BRU

23. MAJOR COFFEE PLAYERS IN INDIA

24. MARKET SHARE IN INDIA
34%
40%
20%
4% 2%
Barista CCD
Mocha Qwicky
Georgia

25. CREATING A NEW ENTRY POINT
1. Pilot-testing Bru World Café in Mumbai
with four outlets
2. Roast green coffee beans in partnership
with the Tatas.
3.
franchise agreement with Domino's pizza
chain

26. CREATING A NEW ENTRY POINT
deals with leading oil companies like HP,BP Indian
oil for setting up cafes in gas stations across India.
4.
5. Java Green from the Reliance Group
began life as a cyber café in 2003

27. Nescafe (NESTLE)

28. Product Line
Nescafe
Classic Sunrise
Sunrise
Premium
Cappuccino
Gold
Taster’s
Choice

29. Product Sizes
Nescafe
10 gm
Satchets
200 gm Jars 500 gm Jars 1 Kg Jars

31. Distribution Network
• The average landing price per KG for Nestle distributors is Rs 2000/-
• On an average Nestle offers 8 % margin to retailers and 5% margin to
distributors
• The contribution of wholesale in Nestle is high at 30%
• It follows Distributor Loyalty Contract (A Nestle distributor can sell only
Nestle products)
• Tie-ups with all super market chains like Big Bazaar, Reliance Fresh etc.
• Fascinating Marketing campaigns and near to perfect at customer
satisfaction yielding to brand recall and loyalty

32. Our Blueprint ahead to tackle NESTLE
• Be a follower for 1-2 years
• Price your product bit higher than NESTLE Classic and match prices for the
premium NESTLE products
• Start with 6 cities (Metros) and then push yourself into the mini-metros and
tier-2 cities
• Try having parallel distributor chains to NESTLE in the cities you choose to cater
to
• Give better margins to super markets you cater to for gaining entry into the
market
• Concentrate on quality and taste more than just quantity, try bringing in new
variants of flavors to enhance customer engagement