This document provides an overview of Sabar Tea Packers and Process, a leading tea brand in Sabarkantha district, India. It discusses the company's history since 1965, current management structure, and philosophy of building long-lasting relationships and being socially responsible. It also includes sections on the introduction of tea, the characteristics of tea including types and quality, the history of tea, and an overview of the tea industry.

1. A
Report on
Market &Financial
Feasibility of SabarTea
in Ahmedabad
Submitted by:-
Ankit Prajapati
Alpesh Parmar
Submitted to:-
AES PGIBM

2. Preface
As a student of MBA when I acquire all the theoretical knowledge, it
is both necessary and advisable to acquaint the students with the real
situation through, well-planned project in relevant fields. Using all the
theoretical knowledge and applying into the real application the student
learns to develop efficient real world application at the time of project
training. So, the project training is very important for the student for self-development
and self-confident. Also student learns organizational structure,
rules and regulations and management in a real sense, which helps student to
get discipline in life.

3. Acknowledgement
Study of business management is all about gaining knowledge from
the experience one gets from the corporate world. When students get into the
corporate world to gain the knowledge, he is novice. They need
opportunities and of-course help of his /her senior to explore the aspects of
business management.
I was given this opportunity to work by the leading tea brand of
Sabarkantha district. I am obliged to Sabar tea packers and process for
providing me an opportunity to undergo training in this esteemed
organization.
I wish to express my heartfelt gratitude to Mr. Moin Sabugar, assistant
sales manager of tea packers and process & Mr. Vishnu Solanki, accountant
of tea packers and process for their immense help in making my training and
project fruitful.
I would like to thank Dr. A.H. Kalro for giving us the opportunity to
acquaint ourselves with the nuances of the real corporate world & I am
thankful to all faculty members of AES PGIBM for their kind support.
Ankit Prajapati
Alpesh Parmar

4. Table of Content
Sr. No. Particulars Page No.
1 Introduction
a) About the company
b) Introduction to tea
c) What is tea?
d) Characteristics of tea
e) History of tea
f) Types of tea
g) Process
e) Tea industry
2 Marketing Feasibility
a) Introduction
b) Market survey
i. Consumer’s survey
ii. Retailer’s survey
c) Competitors analysis
d) 4P’s of Indian tea industry
e) Five forces model
f) Limitations of the survey
3 Financial Feasibility
a) Introduction
b) Cost Sheet
c) Trading and Profit & loss account
d) Balance Sheet
e) Break even point
f) Evaluation of the project
i. Ratio analysis
4 Suggestion
Conclusion
Bibliography

6. About the company
SABAR TEA PACKERS AND PROCESS
Doulat vilas road, Pologround, Himmatnagar – 383 001, Sabarkantha
Philosophy:
· Build long lasting relationships through trust and fair play towards all
stakeholders.
· Be result oriented. Contribute positively.
· Be progressive and lead from the front. Change with the times.
· Be socially responsible. Return to the society a share of the gains
from commercial enterprise
History:
Sabar tea packers and process started its business in tea industry in
1965 with a vision to be the leader in tea business in India by the sabar
groups founder Mr. Nisarbhai Sabugar. From 1965 when Sabar group used
to sell loose tea, now it sells 100 tons to tea each month.
Growth over the years:
· 1965 the year when Sabar tea packers and process was established,
it initially used to sell loose tea.
· 1970, introduced branded tea in name of ‘Chand sitara’. Daily
sales was 21 kgs.
· 1988, started using poly paper for packaging. Daily sales was 100
kgs.
· 1998 took registered trademark of Sabar Tea
· 1990, small packets of amount Rs. 2, Rs. 5 and Rs. 10 where
introduced.

7. · 1990, started door to door marketing for rural sector.
· 1995, introduced premium segment offering special patti, special
dana and special bhuki.
· 2003, started their business in Panchmahal and various other
districts of north Gujarat.
Management:
The Sabar group is led by Mr. Nisarbhai Sabugar, a highly regarded
tea expert and tea taster, with rich experience in the tea business. He
plays an active role in the tea industry by being an involved member
and leader of various tea associations.
Mr. Rafik Sabugar, Managing Director, a commerce graduate and
also a tea taster with three decades of experience behind him, look
after the Company's Finance and Taxation matters.
Mr. Moin Sabugar, Assistant sales manager, an Mba by
qualification, is a widely travelled professional with rich and varied
experience in the marketing and production of tea. He plays a key role
in developing the Company's sales.

8. Introduction of tea
Tea is the most popular drink in the world, next to water. Every year,
an astronomical 7, 68,500,000,000 cups of tea are consumed around the
globe. Great Britain, famous for the custom of afternoon tea and for the
introduction of that habit to the world, holds the world record as the largest
importer of tea. It also boasts of the highest consumption of tea per capita in
the world - every British man, woman and child drinks nearly 4 cups of tea
every day!
Tea, made from the tender leaves and buds of a once wild tree has had
a strong influence for centuries on the economy of tea producing, trading
and drinking countries. For a long time, the tea trade had a major impact on
Britain’s economy. Tea is Sri Lanka’s largest foreign exchange earner. In India, tea holds second
place as an export earner and the Indian tea trade employs more people than any other industry.
What is tea?

9. Tea is the most popular non-intoxicating beverage in the world that is
enjoyed by the rich and the poor alike. Tea drinking was quite common in china as
early as the 6th century B.C. over a period of time; the neighbouring countries in
south East Asia such as Japan, Malaysia, and Thailand picked this habit. Western
nations started importing tea from china only in the 17th century.
The British developed India as a sourcing base in the 19th century to reduce their
dependence on China. During the late 19th century and early 20th century, Tea
cultivation become popular in other colonies like SriLanka, Tanzania, Malawi, Kenya,
etc…In the last decade, world production growth decelerate from 3% per annum to 1.5% per annum.
TEA CHARACTERISTICS
Types and Quality
Tea is distinguished as green or black based on its apparent colour.
While Black Tea is manufactured by deliberate fermentation of leaf juice,
Green Tea is manufactured by preventing fermentation. Black Tea has a

10. stronger taste and liquor. Green Tea is light and is perceived to have
pharmaceutical properties.
Black Tea can be of two varieties: leaf and dust. Leaf Tea can also be processes as orthodox or
CTC (Crush, Tear, And Curl), CTC production entails fermentation. CTC gives higher cup page (almost
twice) for the same quantity of Tea and has stronger liquor, while orthodox Tea is light and retain aroma.
Tea quality is measured on the basis of liquor, aroma/flavour, and leaf appearance. Consumers perceive
quality on the attributes of taste, pungency, strength, freshness, color, and packaging.
Value Addition
The most popular form of value addition is branded Tea. This
involves not only the packing of Tea but also blending of other varieties to
maintain consistent taste. To arrive at a blend, expert Tea tasters sample
hundreds of liquor. Convenient drinks like instant Tea (soluble tea
powder), Tea bags (bags dipped in hot water), ready-to-drink Tea (served
in cans), and flavoured Tea (with vanilla or strawberry flavour) are
becoming popular in developing countries like the US and Japan.
Productivity And Quality
The art of plucking, fine-turned over the last 200years, requires two
fresh Tealeaves and bud to be plucked manually. The productivity can be
measured as per unit of labour (man year) and per unit of land (hectare).
Mechanized plucking enhances productivity, but with compromise on
quality, as coarse leaves also gets plucked.
For increased production, some producers allow plucking of coarse
leaves with fresh ones. Ensuring premium quality requires compromise on
productivity. The productivity also depends on the age of Tea bushes,

11. genetic material, irrigation, fertilizer, cultivation, techniques, etc; Old bushes
are re-implanted to improve productivity.
Inconvenient but Healthy Drink
Tea is very inconvenient drink to brew. The tendency to form a
creamy layer of caffeine-tannin adds to the inconvenience. Tea, besides
having properties of fatigue amelioration, is believed to have chemicals
that help in maintaining cholesterol level and in preventing cancer.
History of tea
Tea is nearly 5,000 years old and was
discovered, as legend has it, in 2737 B.C.
by a Chinese Emperor when some
Tealeaves accidentally blew into a pot of
boiling water. In the 1600s, Tea became
popular throughout Europe and the
American colonies. Since Colonial days,

12. Tea has played a role in American culture and customs. Today American
school children learn about the famous Boston Tea Party protesting the
British Tea Tax -- one of the acts leading to the Revolutionary War. During
this century, two major American contributions to the tea industry occurred.
In 1904, iced tea was created at the World's Fair in St. Louis, and in 1908,
Thomas Sullivan of New York developed the concept of tea in a bag. Tea
breaks down into three basic types: Black, Green, and Oolong.
STORY OF TEA began in ancient China over 5,000 years ago. According
to legend, the Shen Nong, an early
emperor was a skilled ruler, creative
scientist, and patron of the arts. His far-sighted
edicts required, among other
things, that all drinking water be boiled
as a hygienic precaution. One summer
day while visiting a distant region of his realm, he and the court stopped to
rest. In accordance with his ruling, the servants began to boil water for the
court to drink. Dried leaves from the near by bush fell into the boiling water,
and a brown liquid was infused into the water. As a scientist, the Emperor
was interested in the new liquid, drank some, and found it very refreshing.
Therefore, according to legend, tea was created.
Tea Story in India
The credit for creating India's vast tea empire goes to the British, who
discovered Tea in India and cultivated and consumed it in enormous

13. quantities between the early 1800's and India's independence from Great
Britain in 1947. The Scottish adventurer, Robert Bruce, discovered Tea
plants growing in Assam in the 1820's.
At this time, no one thought that Tea existed in India; however Major
Bruce discovered the plants growing wild in the jungles controlled by the
tribal chiefs. The British East India Company's other sources to supply the
English consumers of Tea. In 1834, a Tea committee was appointed to
investigate the possibility of cultivating Tea in India. After a thorough
investigation and study of the crop, the first commercial batch of Tea ever
produced outside of China came from Assam in 1839. The first contract for
London brokers issued Indian Teas between 500 and 1,000 chests at that
time.
TYPES OF TEA
The classic definition of Tea is the brew made from the infusion of water
and the leaves of and evergreen plant of the Camellia family.
In the Tea Industry, Tea is defined as the dried processed leaves of Camellia
Sinensis or the Sinensis. Commercially, there are the 3 major varieties of
Camellia Sinensis. The China type, the India (Assam Region) type and the
hybrid type (a cross breed of the China and India types.
Tea breaks into 5 basic types.
· Green Tea
· White Tea
· Oolong Tea

14. · Black Tea
· Scented Tea
Green Tea
Green Tea is nothing more than the leaves of the Camellia Sinensis that
have been processed a certain way. Green Teas, like white Teas, are
closer to taste like fresh leaves or grass than the Black or Oolong. They
are also lower in caffeine and have higher antioxidant properties.
White Tea
White Tea is similar to Green Tea, in that it’s undergone very little
processing and no fermentation. But there is a noticeable difference in
taste.
Oolong Tea
The best way to describe Oolong Tea is that they are somewhere in
between Green and Black Tea. This is because of they are only partially
oxidized during the processing.
Black Tea
They are highest in the Caffeine. Black Tea is the most popular Tea in
the world. It is the Tea most widely used in making Iced Tea and
English Tea.
Scented Tea

15. Scented or Flower Tea is either Green or White Tea that has been infused by
certain flower.
Process
Darjeeling Teas are still manufactured using old industrial techniques
developed in the late 1800's. These traditional methods are collectively
termed as 'Orthodox Production'. By these methods Darjeeling Teas are
produced without 'cut & crush' of tender Tealeaves maintaining the inherent
Darjeeling Tea aroma. Although differing leaf varieties require intricate
variations in processing, the stages undergone are uniform. With the
advancement in technology the Orthodox procedures are gradually being
replaced by highly mechanized methods with their primary focus on yields.
But in Darjeeling hills 'Quality' is the primary focus and it is never
compromised with the quantity. Darjeeling Tea planter is still producing the
finest Teas of the world using these Orthodox methods with utmost attention

16. on the process. Of late, few gardens are changed to Green Tea manufacture
especially during the rainy season thus producing the finest quality of
flavoured Green Teas.
WITHERING
It is the first stage of Tea manufacture. During
withering harvested Tea flush is evenly spread on the
withering troughs, which are normally 4 to 5 feet wide
and 50 to 70 ft long. During the process hot and cold air
is blown through to remove the moisture of fresh leaf to
30-40 percent, which is achieved during 16 to 18 hours
of period. The prime object of withering is to make the
turgid leaf flaccid and prepare the leaf for next stage to
facilitate rolling.
ROLLING
The withered leaf is charged in the rollers, which vary
in size. Normally they are 36" and 48" rollers capable
of rolling 70 to 120 kg of withered leaf. The pressure is
exerted on the leaf in 'open and pressure' sequence.
This operation lasts for 45 minutes. During this process
Tea leaf is twisted as a result of repeated rolling action
and simultaneously leaf tissue ruptures thus forcing out
the cell-sap which spreads as a thin film on the surface
of the leaf. Various enzymes and their substrates come
in contact and enzymatic oxidation starts at this stage. The Green colour of
leaf starts diminishing and brown coppery colour of leaf begins to appear.

17. FERMENTATION
Rolled leaf is put on fermentation racks specially
made of tiles, cement or aluminum. Fermentation rooms
are kept clean and cold. In Darjeeling fermentation is
carried out at low temperature. In hot season the air is kept
humid with the help of humidifiers with less than 200c
hygrometric difference Optimum fermentation is adjudged
by the subjective assessment of the Tea maker.
Fermentation period varies from 2 to 3 hrs depending on
the type of leaf, degree of wither, temperature, availability of oxygen and
fermenting ability of the Tea flush. The time of fermentation is reckoned
from the time at which rolling begins. Fermentation is a very sensitive
process. Even 5 minutes time delay in adjusting the correct fermentation
period is likely to deteriorate flavour appreciably. During fermentation the
leaf changes colour and becomes dark coppery. A typical aroma develops at
this stage. The term 'Fermentation' is a misnomer and, in fact, it is an
oxidative process. Oxidation of catechin / Polyphenols by the enzyme
Polyphenolic oxidize is the main reaction of the process that imparts 'Tea
character' to the Black Tea
FIRING / DRYING:
Fermented leaf is loaded onto the dryer, which
comprises perforated moving trays. The dryer inlet
temperature is maintained at 200 to 2400F. Thickness of
spread, speed of trays and volume of air blown through are
regulated meticulously so as to achieve the correct drying.
Low exhaust temperature often produces stewed Teas
while high temperature in the initial stages is apt to
casehardening of Teas. The whole process of drying is
completed within 20 to 30 minutes. The moisture content
of the final product in Darjeeling Teas is kept at 2 to 3 percent. Darjeeling
Teas are normally fired at high temperature, which is considered essential
for squeezing the correct balance of volatile flavoured compounds in high
quality Teas. During the drying process enzymes responsible for
fermentation are inactivated and even after the Tea is dry the maturation

18. process continues and Tea attains the mellowness a desirable character of
Darjeeling Teas.
SORTING & GRADING:
The bulk Tea is sorted on mechanically oscillated
sieves. The sieve size decreases gradually from top to
bottom. Thus the bigger size Teas are retained on the top
while the broken leaves fall towards the floor.
TEA INDUSTRY
India is the country with the most tea consumption in the world - an
average of 6,75,000 metric tons per year. China is second, and consumes about 463,000 metric tons
per year. India's total tea production is about 840 million kg (mkg); about 15
mkg is imported. About 180 mkg is exported. About 680 mkg is consumed
in India. Of this, we feel 300 mkg is sold as packet tea and the rest as loose
tea.

19. According to the report, the tea industry in the country accounts for 31
per cent of global tea production. It is the second largest employer in the
country, giving employment to more than 1.2 million workers on a
permanent basis, in addition to one million labourers on a casual basis. An
estimated 10 million people in the country depend on the tea industry for
their livelihood and 51 per cent of the workforce comprises women. The
majority of women are employed to pluck tea - the most labour-intensive
part of tea production

20. Introduction
Market feasibility projects the practical viability of a venture with
respect to different factors affecting the market.
Market feasibility includes determining the proper market for the
product and the different ways for the promotion of the product, it includes
market research, market segmentation, customer relation, and all the other
factors related with the market. It also includes deciding on the mediums for
promoting the product in the market.

21. Market survey
We used the questionnaire method for collecting the data from
consumers and retailers. The questionnaire for consumer and that of the
retailer are as follows:
QUESTIONNAIRE FOR CONSUMERS
1. Personal Detail:
a. Name: _____________________________________________
b. Age: ______ c. Monthly income: _______
d. Family members: _____

22. 2. How often do you drink in a day?
a. One time [ ] b. Two time [ ] c. Three or more time [ ]
3. How much tea do you purchase in a month?
a. 250gms [ ] b. 500gms [ ] c. 1kg or more [ ]
4. Do you purchase same quantity of tea in all seasons?
Yes [ ] No [ ]
If No, please specify the reason
_____________________________________________________
_____________________________________________________
5. Which type of taste do you prefer in tea?
a. Strong [ ] b. Light [ ]
6. Why do you drink tea?
a. Freshness [ ] b. Habit [ ]
Other _____________________________
7. From which place do you purchase tea?
a. Retailer [ ]
b. Supermarket[ ]
c. Company’s outlet[ ]
d. Other [ ]
8. Do you prefer branded tea?
Yes [ ] No [ ]
If No, please specify the reason
_____________________________________________________
_____________________________________________________
NOTE: Proceed further only if answer of Q.8 is Yes
9. Which tea brand are you using currently?
a. Waghbakri [ ] b. Tata Tea [ ]
c. Brooke Bond [ ] d. Other brands [ ]

23. 10.Since how many years are you using this brand of tea?
______________________
11.Which factor inspires you to purchase this brand?
Please rank in your order of preference
a. Price [ ]
b. Quality [ ]
c. Free gift [ ]
d. Packaging [ ]
e. Advertisement [ ]
f. Reference groups [ ]
12.Do you know about Sabar Tea?
a. Yes [ ] No [ ]
13.Would you desire to purchase Sabar Tea if you are provided more
information about this product?
a. Yes [ ] b. No [ ]
14.Do you inspire to purchase the brand in which brand ambassador is
your favorite actor or actress?
a. Yes [ ] b. No [ ]
15.According to you what is the most important feature of tea?
Please rank in your order of preference
a. Color [ ]
b. Taste [ ]
16.Do you think those brands are very good which brand’s
advertisements come in television?
Yes [ ] No [ ]
QUESTIONNAIRE FOR RETAILERS
1. Personal Detail:
a. Name of the shop: _________________________________
b. Location: ________________

24. 2. Which is the segment that you prefer to sell the most?
a. Royal segment [ ] b. Premium segment [ ]
c. Middle segment [ ] d. Economy segment [ ]
3. Which brand sells the most in the most preferred segment?
________________________________________________________
4. Which size packet sells the most?
a. 100g. [ ]
b. 250g. [ ]
c. 500g. [ ]
d. 1kg. [ ]
5. According to you who can be the competitors of Sabar Tea in the
most preferred segment?
_________________________________________________________________
_
6. What is the response of customers when advertisement of new tea
product comes in any media?
a. Demand for product [ ]
b. Ask for suggestion [ ]
c. Try to get more information [ ]
d. Not ask anything [ ]
7. Do you think advertisement is important to sell any product more? If
No, then why?
a. Yes [ ] b. No [ ]
IF No, then please specify the reason
________________________________________

25. 8. What is customers’ response when you put some new product near
cash counter or entrance?
a. Demand for product [ ]
b. Ask for suggestion [ ]
c. Try to get more information [ ]
d. Not ask anything [ ]
9. Do you think attractive packaging attracts the customer more?
a. Yes [ ] b. No [ ]
10.Do you think sometimes packaging attracts the customer but people
not buy the product because of price?
a. Yes [ ]
b. No [ ]

26. 11.If company offers you attractive commission or discount will you
willing to sell Sabar Tea?
a. Yes [ ]
b. No [ ]
12.Would you like to give any suggestion for promotion activities of
Sabar Tea?
_________________________________________________________________
_
_________________________________________________________________
____________________________________________

27. Research Findings
Customer
1. How often do you consume tea per month?
60%
5%
35% One time
Two time
Three or more times
One time 60%
Two time 35%
Three or more time 5%
2. How much tea do you purchase in a month?
25%
35%
40%
1 Kg.
500 gm
250 gm
1 Kg
500 gm
250 gm

28. 3. Which type of taste do you prefer in tea?
, 30%
70%
70%
60%
50%
40%
30%
20%
10%
0%
Strong
Light
4. Why do you drink tea?
60%
40%
0%
Freshness
Habit
Other
5. From where do you buy tea?
Strong 70%
Light 30%
Freshness 60%
Habit 40%
Other 0%

29. 60%
15%
0%
25%
Retailer
Supermarket
Company's
outlet
6. Which tea brand you are using currently?
70%
10%
10%
10% Waghbakri
Brooke bond
Tata tea
Other Local
brand
7. Which factor inspires you to purchase a brand?
The factors are ranked in order of preference
1. Quality
2. Price
3. Free gifts
4. Advertisement
5. Packing
6. Reference groups
Retailer 60%
Supermarket 25%
Company’s outlets 15%
Waghbakri 70%
Brooke Bond 10%
Tata Tea 10%
Other Local
10%
brands

30. Retailer
1. Which is the segment that you prefer to sell the most?
70
60
50
40
30
20
10
0
Royal Premium Middle Economy
2. Which brand sells the most in the most preferred segment?

31. 68%
12%
10%
10%
Waghbakri
Brooke bond
Tata tea
Other Local
brand
3. Which size packet sells the most?
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
%
100gm 250gm 500gm 1kg
packet size
4. Do you think advertisement is important to sell any product more?

32. 70%
30%
70%
60%
50%
40%
30%
20%
10%
0%
Yes No
Advt.
5. What is the response of customers when advertisement of new tea
product comes in any media?
15%
30% Demand for product
40%
15%
Not ask anything
Try to get more
information
Ask your suggestion
6. What is customers’ response when you put some new product near
cash counter or entrance?

33. 27%
30% Demand for product
18%
25%
Not ask anything
Try to get more
information
Ask your suggestion
7. Do you think attractive packaging attracts the customer more?
60%
40%
60%
50%
40%
30%
20%
10%
0%
Yes No
Advt.

34. 8. If company offers you attractive commission or discount will you
willing to sell Sabar Tea?
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
Yes No
Competitors’ analysis
68%
12%
10%
10%
Waghbakri
Brooke bond
Tata tea
Other Local
brand
The graph above shows the preference of various brands by the
retailers. The consumer preference is also quite similar to the retailers’
preference. About 68% of the retailers prefer to sell waghbakri, 10% of them

35. prefer brooke bond, 10% of them prefer Tata tea, and the rest prefer other
local brands.
From the graph above it can be said that brooke bond, Tata tea & the
local brands are the competitors of Sabar Tea. The reason for that is Sabar
Tea is going to start its business in Ahmedabad and it can straight away
compete with the market leader. Waghbakri is the market leader in
Ahmedabad. Thus the competition of Sabar Tea now is with less popular
brands.
Waghbakri has a lot of loyal customers, thus it would take time to win
the Waghbakri customers.
Sabar Tea will have intense competition from brooke bond, Tata tea &
the local brands because if we remove the 68% waghbakri share, the there is
only 32% left and there are many firms who fall in this sector.

36. Four P’s of Indian Tea Industry
Marketing mix is the set of marketing tools that the firm uses to
pursue its marketing objectives in the target market. The four basic elements
of marketing together make up a marketing mix, these four elements are the
4 P’s. These four P’s of marketing are product, price, place, and promotion.
Marketing is likely to be a success if this four P’s are mixed properly.
MARKETING MIX ELEMENTS IN TEA INDUSTRY
A) Product

37. Brand loyalty in the Tea Industry is not a thing of the past, but
manufacturers can no longer depend on a large, stable base of die-hard
consumers to support their products. Consumers used to be “true to their tea
usage” no matter what. But now, because of fierce competition for market
share, the Tea Industry is over segmented, and the products differ so slightly
that consumers are confused. Now competition is not only from the coffee
industry but also from the soft drink industry. Pepsi and Lipton jointly
introduced a tea based soft drink. This situation creates enormous problems
for Tea Industry, and thus competitors in the Tea Industry continually seek
to differentiate their products. Therefore manufactures have to constantly
come with product innovation like Flavored Tea, Iced Tea, Herbal Tea and
Tea Pills.
B) Price
Price of any product affects the demand of that product, and it applies
to the tea also. Price competition is now the norm in the industry, and more
than 50 percent of tea purchases are made due to pricing. As the number of
firms in the tea industry is increasing, the pricing policy of each firms
becomes extremely crucial.
Fluctuating demand for tea in different season makes pricing even
more important. During summer the tea sales is much lower compared to
that in winter or rainy season. Export of Asian tea to European countries is
high since decades. This contributes to reduction in supply for domestic
market.
C) Place
The marketers use the distribution channels to display or deliver the
physical product or services to the buyer or user. There are physical

38. distribution channel and service distribution channel they include
warehouses, transportation vehicles, and various trade channels such as
distributors wholesalers and retailers. So, the following is the distribution
channel of the Tea Industry in private selling.
DISTRIBUTION CHANNEL
D) Promotion
Sellers
Brokers
Agents
Whole-sellers
Retailers
Buyers
Advertising and promotion are the most important tools used by Tea
manufacturers to distinguish their products.
The first Tea advertisement for Tea appeared in
the London weekly mercurius politicus of the
September 1658. Since then advertising is one of the
must. Price competitors in the industry rely upon

39. endorsements by famous people and reminder advertising to create and
reinforce the image they want their products to have. Emotional appeals and
identification tactics are used to increase brand loyalty.
The promotion of Tea in India is based on two themes
- Tea is good for health
- Tea is beverage for the youth.
The Tea Board of India has been guide to realize this and has launched a
campaign “PIYO MORE CHAI” in association with the industry to
encourage the domestic consumption by focusing on its “Miraculous”
properties. It will also highlight that drinking tea keeps one healthy and
lowers the risk of heart diseases, cancer.
But since advertising costs are so high, they are monitored closely,
and promotions are encouraged and subsidized by the manufacturer.

40. Five Forces Model
The five forces model of competition given by Professor Michael
Porter helps to discover what the main sources of competitive pressure are
and how strong each competitive force is.
1) Threat from existing competitors
The rivalry among the competing sellers for this industry in
Ahmedabad is high. There are so many companies in this industry
including major ones like Waghbakri and Tata tea. There are many
local companies that sell unbranded tea.
The major threat to a new firm is the threat from the existing
competitors. Waghbakri holds 70% of the market share and Tata tea is
the largest tea producing company in India. Other local low prices,
unbranded tea also exists which may affect Sabar tea.
2) Threat from new entrants

41. Threat of new entrant applies only to the existing firms. Since
Sabar Tea is thinking to establish it in Ahmedabad, it is a new entrant.
Thus, for Sabar Tea there is no threat of new entrant. Infact Sabar Tea
is a threat to the existing players.
However, if there is much delay by Sabar Tea. Then each
company which enters the market before Sabar Tea is a threat because
it will increase the competition for Sabar Tea.
3)Threat from substitute products
The main substitute product for tea is coffee. However, cold
beverages, fruit juices and milk are also substitutes of tea. Here the
threat from such substitute products is very high for tea industry.
Coffee is the main substitute for tea, it serves the same purpose
as tea. However the price and choice of the consumer are the main
reasons for the purchase of tea or coffee.
The prices of cold beverages have fallen down and are available
at most of the stores. The promotional strategies and their impact are
also quite stronger in compare of tea.
4) Bargaining power of consumer and supplier
Profits depend on bargaining power of suppliers and consumers. In
Ahmedabad the consumption of tea is very high and thus there is very
high demand among consumers, thus the bargaining power of
consumer is less.

42. Tea is produced in selected eastern states and few parts of
Karnataka. Despite of the fact that India is the second largest tea
producer after China, the bargaining power of suppliers of tea leaves
is more than that of the consumers. One reason for that is increasing
exports to European markets. Second is that production is limited.
Limitations of the survey
· Out of the whole research and analysis, only few major tea brands
could be highlighted, leaving aside a medium and small scale Tea
brands.
· Data is mostly primary data so some time-collected data may be
limited.
· As only few hundreds of people data is to be taken the final analysis
can or cannot give satisfactory results.
· The limitation in this report could be of language, because all people
are not fluent in English, so the questionnaire in English was to be
explained in Gujarati to get proper response and it can happen that the
meaning of the question may change to the responded persons so
accurate data results can’t be determined.

44. Introduction
Financial feasibility projects whether the project or business would be
financially viable for investment or not.
All the expenses and the revenues of the firm are estimated. And on
the basis of this estimated figures various financial statements are prepared.
And evaluation of the project is made by capital budgeting and ratio
analysis.

45. Profit and loss a/c
Particulars Q1 Q2 Q3 Q4
Incomes
Sales 1440000 1600000 1760000 1920000
Add:
Closing stock-opening stock 80000 160000 240000 320000
Total (A) 1520000 1760000 2000000 2240000
Expenses
Purchase 800000 880000 960000 1040000
Electric charges 8000 8000 8000 8000
Telephone charges 2000 2000 2000 2000
Stationary 2000 2000 2000 2000
Tea labour 50000 50000 50000 50000
Rent on shop 10000 10000 10000 10000
Rent on warehouse 20000 20000 20000 20000
Salary 32000 32000 32000 32000
Packaging expense 60000 60000 60000 60000
Depreciation 50000 50000 50000 50000
Advertising expense 3000 3000 3000 3000
Travelling expense 5000 5000 5000 5000
Sales tax(12%) 172800 192000 211200 230400
Total(B) 1214800 1314000 1413200 1512400

46. Profit (A - B) 305200 446000 586800 727600
Less: Tax @ 35% + Surcharge 2.5% + 120554 176170 231786 287402
NPAT 184646 269830 355014 440198
Balance sheet
Particulars Q 1 Q 2 Q 3 Q 4
Sources of fund
Ownweship capital 2000000 2184646 2454476 2809490
Profit and loss a/c 184646 269830 355014 440198
Total 2184646 2454476 2809490 3249688
Application of fund
Fixed assets 600000 550000 500000 450000
50000 550000 50000 500000 50000 450000 50000 400000
Current assets (A)
Cash on hand 18000 16000 14000 12000
Bank 1216646 1618476 1705490 1797688
Closing stock 80000 240000 480000 800000
Debtors 480000 320000 480000 640000
1794646 2194476 2679490 3249688
Less : Current Liabilities
(B)
Creditors 160000 1634646 240000 1954476 320000 2359490 400000 2849688
(A) - (B)
Total 2184646 2454476 2809490 3249688

47. Break even analysis
Particulars Q1 Q2 Q3 Q4
Sales 1440000 1600000 1760000 1920000
Less : Variable cost
Raw material consumed 720000 800000 880000 960000
Advertising expense 3000 3000 3000 3000
Travelling expense 5000 5000 5000 5000
Electric charges 8000 8000 8000 8000
Telephone charges 2000 2000 2000 2000
Sales tax 172800 192000 211200 230400
Tea labour 45000 50000 50000 50000
Packaging expense 54000 60000 60000 60000
Contribution 430200 480000 540800 601600
P/V ratio (%) (A) 29.875 30 30.72727 31.33333
Fixed cost
Rent on shop 10000 10000 10000 10000
Rent on warehouse 20000 20000 20000 20000
Salary 32000 32000 32000 32000
Stationary 2000 2000 2000 2000
Depreciation 50000 50000 50000 50000
Totot fixed cost (B) 114000 114000 114000 114000
Bep (Sales) (B/A) 381590 380000 371005.9 363829.8

48. Evaluation of project
Ratio analysis
Name of ratio Q1 Q2 Q3 Q4
A. Revenue statement ratio
Net profit ratio 12.82 16.86 20.17 22.92
Operating ratio 63.33 57 51.82 47.5
Expense ratio 28.81 27.13 25.75 27.60
Stock turnover 2.25 2 1.125
B. Balance sheet ratio
Current ratio 11.22 9.14 8.37 8.12
Liquid ratio 10.72 8.14 6.87 6.12
Quick ratio 7.72 6.81 5.37 4.52
Proprietary ratio 85.3 81.08 78.43 76.98
C. Composite ratios
Return on capital employed 9.23 12.35 14.46 15.67
Debtors turnover 40 24 32 40
Creditors turnover 24 32 40 46
Fixed asset turnover 2.62 3.2 3.91 4.8
Total asset turnover 0.61 0.59 0.56 0.53

49. Suggestions
BY RETAILERS :
· Company should do advertisement and also do display as people are
attracted towards it The retailers want that the margin should be
increased as they get only 2-3 Rs. as profit which is much less than
what they get from other companies.
· The price must be decreased because people may prefer other
products like Tata Tea or Wagh bakri at the same price.
· The company can offer some gifts or discounts to increase awareness
and to increase sales.
· Sample must be distributed free of cost to the people so that they can
taste it and than only they can know the taste of Sabar Tea.

50. BY CUSTOMERS:
· Company should do advertisement of the product in newspapers and
on television so that more and more people know about the product.
· Company should give free samples to the people.
· Different schemes at a regular interval must be put so that people can
be attracted towards the tea in order to avail benefit of the scheme.
· People prefer home delivery service.
SUGGESTION BY US:
· In the Ahmedabad market the number of loyal customers are much
more for Waghbakri and thus company should do advertisement in
such a manner that people should be made believed that Sabar Tea has
same quality as of Waghbakri.
· The distribution channel must be made in such a manner that the
retailers don’t face any problems in the availability of the tea.
· Different promotional activity is required to instigate sales in different
seasons.

51. · Quality and price are the most preferred factor affecting sales in
middle segment, thus if good quality tea is provided at reasonable
price then Sabar Tea will surely get many customers.
· The return on capital employed increases with increase in sales thus
prime focus should be on how to increase sales.

52. Conclusion
From the following report and the recommendations we can conclude that
consumption of tea is very high in Ahmedabad, thus chances of a new firm’s success in tea business in
Ahmedabad are very good. Thus Sabar Tea should enter the Ahmedabad market. But one of the facts is that as
Sabar Tea has its establishment and business in Sabarkantha and thus no one is aware of the tea brand Sabar.
This can be advantageous too. Sabar Tea can create the image as its want, it can create image of premium or
middle segment. But sales are more in middle segment and competition is also high in middle segment.
Most of the customers purchase tea from the retailers, thus initially Sabar
Tea have to give them good margin. One more popular avenue of retailing is through super markets. Many people
now prefer to purchase tea with rest of the good together. Thus sales through supermarkets should also be taken
into consideration.
Price and quality are the two factors that have a major impact on sales. Moreover if Sabar Tea is made
available at the same price as Wagh bakri or Tata tea people may not prefer to choose Sabar tea. Thus Sabar tea
need to be launched at a price lower than the competitors and the quality of the products also have to good.
As the ratio analysis suggests Sabar tea will be successful but a good awareness campaign is required.
Advertisement and sales promotion have to be aggressive. Different promotion activities during summer will be
more beneficial. Because during summer sales are lower compared to winter and monsoon.
Thus the final conclusion from us is that Sabar Tea has to advertise on a
large basis to gain higher market share in the competitive Ahmedabad tea industry.
Bibliography
BOOKS
· Philip Kotler, Marketing Management, 11th Edition 2003
(Tata McGraw Hill) Pp 328-336.

53. MAGAZINES & JOURNALS
· Times Food Processing Journal, June-July 2005, pp 47-48
· Contemtory Tea Time, June-August 2005, Vol xiv No. 2, pp 6-52
WEBSITE LINKS
· www.teauction.com
· www.thehindubusinessline.com
· www.timesb2b.com
· www.indiateaportal.com
· www.tea.com
· www.teaindustry.com
· www.qualiteas.com
· www.indianindustry.com/teacoffee