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COFFEE
(MARKETING & FINANCE)
GROUP MEMBERS
Kavitha Ananth
23
Tejas Mehta
33
Nimitha Poojary
42
Pooja Sabnani
44
Susan Sequeira
48
ACKNOWLEDGEMENT
SR.NO TOPICS
1. INTRODUCTION
2. COFFEE MARKETING
3. ICO
11. CONCLUSION
INTRODUCTION
Indian coffee has a unique historic flavor too! It all began with a long,
arduous journey around four hundred years ago... When the legendary
saint bababudan brought seven magical beans from distant Yemen and
planted them in the chandragiri hills of Karnataka. The sensations of aroma,
flavor, body and acidity that you enjoy with each coffee experience is
rooted in these mystical beginnings.
It is often said, the Indian coffee grower pours his life into the crop. Is it any
wonder then that India has consistently produced and exported a
remarkable variety of high-quality coffees for over one hundred and fifty
years?
GROWING CONDITIONS
India cultivates all of its coffee under a well-defined two-tier mixed shade
Coffee plantations in India are essential spice worlds too: a wide variety of
spices and fruit crops like pepper, cardamom, vanilla, orange and banana
grow alongside coffee plants.
India's coffee growing regions have diverse climatic conditions, which are
well suited for cultivation of different varieties of coffee. Some regions with
high elevations are ideally suited for growing Arabicas of mild quality while
those with warm humid conditions are best suited for Robustas.
MAP OF INDIA SHOWING THE VARIOUS
REGIONS OF COFFEE PRODUCTION
COFFEE GROWING REGIONS IN INDIA
VARIETIES
India offers several varieties of specialty coffees that are popular in the
west. Continuous research by Indian scientists has helped identity better
strains that will make finer coffees with added flavor profiles, in both
Arabica and Robusta varieties.
MONSOONED COFFEE
MAIN GRADES:
MONSOONED MALABAR AA
MONSOONED BASANALLY
MONSOONED ROBUSTA AA
This coffee is a premium coffee that represents the best quality coffee from
India. The beans are very large, uniform blush green in color with a clean
polished appearance. In cup, the coffee exhibits full aroma, medium to
good body, good acidity and fine flavor with a hint of spice Arabica
plantation coffee (washed coffee) grown in the Mysore, Coorg, Biligiris and
Shevaroys regions.
ROBUSTA KAAPI ROYALE
The beans appear to be bold, round with pointed ends and gray to bluish
gray in color. This cup ensures full body, soft, smooth and mellow flavor.
PRODUCTION AREA:
Only one fifth of the coffee bean produced in India every year is
consumed in the domestic markets, while rest of it is exported.
Most of the exports are to Russian federation, Germany, Italy and us.
Till recently, the coffee board directed coffee sales in India. Coffee growers
with a total coffee cultivation area of above 10 hectares were required to
sell a minimum of 30% of their production to the coffee board. This quota
system has now been abolished to encourage exports and now growers can
export 100% of their produce in order to boost the coffee consumption the
coffee industry has started emphasizing on three channels of distribution,
namely cafe chains, vending machines and ready to drink products.
MAJOR PLAYERS
NESTLÉ
BROOKE BOND (LEVER)
TATA TEA
COFFEE BOARD OF INDIA
Till 1995, the coffee board had a monopolistic control over the marketing
of coffee in India. However, the winds of liberalization swept the Indian
coffee industry and since 1995, marketing of coffee is strictly a private
sector activity. In fact the coffee board went through a massive down-
sizing and two- thirds of its employees were retired under a voluntary
retirement scheme.
The coffee board conducts basic and applied research on coffee and can
boast of 75 glorious years in coffee research. The central coffee research
institute in the chickmagalur district, Karnataka state has been in the
forefront of coffee research over the years and continues to remain one of
the premier institutes of the world as far as coffee research is concerned
The board also has a vast extension network spread over the three main
producing states of Karnataka, Kerala and Tamil Nadu, as well as in the
non-traditional areas of Andhra Pradesh, Orissa and the seven north-
eastern states. The extension set up provides the day- to- day link with the
grower community and this wing facilitates the transfer of technology from
lab to land.
The board also encourages the consumption of coffee in India and abroad.
Towards this end, the board participates in food and beverage exhibitions
abroad. The board also runs 14 India coffee houses in the country. The
India coffee house brand of coffee powder is well known in India for its
quality and aroma.
The board has for long years worked on the quality of Indian coffee. The
board runs two quality control laboratories in Bangalore and Hassan, which
control and advise the industry on quality issues. The labs are equipped
with the best roasting and brewing machines. The best cup- tasters and
quality evaluators keep a strict vigil on the pre and post harvest processes
with a view to ensure that the quality of Indian coffee is maintained.
Economic & market intelligence unit the board has an economic & market
intelligence unit functioning from its head office at Bangalore. The unit
undertakes various activities related to market information & intelligence,
market research studies, crop forecasting and coffee economics aspects.
The unit also undertakes studies on research related to the coffee trade
including WTO issues. Notable publications include the daily market
intelligence report, a comprehensive database on coffee (bimonthly) and
market intelligence report (quarterly). The periodical reports that are
already completed included coffee consumption in urban India 2001 and
coffee consumption in India 2003. The unit is currently coordinates a study
on logistics and competitiveness of coffee producing countries (India,
Vietnam & Brazil) and a manual on coffee retailing. The unit also in the
process of implementing a project on price risk management for coffee
growers.
COFFEE MARKETING
ORGANISATION)
The international coffee organization was established in London in
1963. It makes a practical contribution to the world coffee economy by:
Producers
Coffee Board
Till 1995, the coffee board had a monopolistic control over the
marketing of coffee in India. However, the winds of liberalization swept the
Indian coffee industry and since 1995, marketing of coffee is strictly a
private sector activity. In fact the coffee board went through a massive
down- sizing and two- thirds of its employees were retired under a
voluntary retirement scheme.
Producers
Auction
Exporters
Domestic Export
Market
After liberalization, producer started to sell their product in domestic
and international (export) market on auction basis and role of coffee board
was shifted from marketing to research, extension & promotion.
FOR COFFEE
From the above case study we conclude that proper market analysis by
expert is needed and suitable marketing strategies are to be executed
to strive in market.
FINANCIAL ASSISTANCE IN EXPORTING
COFFEE
Export finance refers to the finance of the goods from the home
country to the importers port. The export financing begins with as soon as
export order is received and accepted. The exporter needs finance for
transportation, taxes, documentation, insurance, packing, clearing and
forwarding and payment of freight. Most of the export trade is carried out
on credit basis. It takes 3 to 6 months to realize the export bills. Meantime
the exporter has to execute further orders for which additional working
capital is required. The export finance mechanism and institutional support
are vital for the promotion for international business. India is the first
among the developing countries to design an integrated export financing
scheme. The various agencies involved in provision of finance are RBI, EXIM
bank, commercial banks, ECGC and other financial institutions.
EXPORT FINANCE IN INDIA:
The nature of export finance may be short term or long term credit.
Short term credit facility is extended for a period from 30 days to 180 days
which is granted by commercial banks. The long term finance is provided
for a period from 5years to 2o years which is provide by EXIM, ECGC and
IDBI bank. The irrevocable letter of credit is generally used in export of
coffee.
Replanting loan.
Interest subsidy.
Expansion subsidy.
The tribal coffee growers are given 4% interest on intensive
cultivation loan, replanting loan, extensive cultivation loan, and special
purpose loan.
GROWERS:
Replanting.
Water augmentation.
Quality up gradation.
Pollution abatement measures.
OBJECTIVES:
SUBSIDY COMPONENT:
ELIGIBILITY:
An applicant can avail subsidy benefit for one or more than one
component of the scheme provided the grower gives undertaking of
the sources of finance.
Tata kaapi is a mixture of instant coffee and chicory and is the third
player in the instant coffee – chicory segment. This brand attempts to strike
a balance between tradition and modernity. A blend of tradition and
lifestyle imagery has been used to project this brand. Innovative marketing
has been the hallmark of this brand, with everything larger than life and
beyond ordinary. This brand has also entered the Guinness book of world
records with the world's largest coffee mug.
BUSINESS PLAN
Marketing plan
Tata coffee prepares green Arabica coffee beans grown in India for
exportation to American, and sells to wholesalers on the Indian market.
Tata coffee prepares the top five percent for quality standards of all Arabica
beans on the market. Tata coffee' customers seeks this product as it
provides them with a point of differentiation. In the past six years, demand
for the coffee has exceeded the amount, TATA COFFEE is able to supply and
has been forced to refuse requests for larger shipments. TATA COFFEE has
positive indicators from current importers that the additional amount of
beans produced will be sold.
Coffee has been a growing industry for the past five years. The most
notable growth has been in the American market where imports have
increased almost one-hundred percent and the market price has nearly
doubled. There is a constant struggle within this market to produce the
best coffee and serve one or more niches within the larger market. Indian
coffee producers and exporters have made great efforts to improve
agricultural techniques, processing methods, and distribution in order to
better serve this growing market. Demand for Indian coffee is currently
greater than supply.
By providing the finest species of coffee, TATA COFFEE has taken the
first step towards a differentiated product. To further distinguish its coffee,
TATA COFFEE adheres to higher quality standards. It is grown in the
mountains surrounding. TATA COFFEE has assumed the position of a
specialized provider of this exceptional coffee. The customers, American
and Indian specialty roasters, recognize TATA COFFEE for it stability to
provide the type of beans they require to produce award winning coffee.
TATA COFFEE has been in business for six years. The business has
been well received and marketing will be key to elevate the business to the
next level. The basic market need is a source of high-quality Arabica coffee
beans that exceeds the quality of almost every other bean on the market.
DEMOGRAPHICS:
The majority of companies have been in business for over five years.
BEHAVIOR FACTORS:
Some of the clients are wholesalers who will sell to the roasters
Other clients are wholesalers and roasters, buying the beans in bulk,
roasting themselves, and then selling the finished product to the
retailer.
Fresh product.
Coffee is the second largest commodity market and India has remained the
second largest producer of coffee in the world for two centuries. Imports of
Arabica coffee in the United States have increased ninety-four percent in
the past five years and consumption of coffee within India has seen similar
increases. In addition, demand for green coffee is above the market
clearing level, and market price and crop yield estimates are at an all time
high.
Coffee has been a growing industry for the past five years. The most
notable growth has been in the American market where imports have
increased almost 100% and the market price has nearly doubled. The
number of specialty roasters has increased from a handful of well-known
companies to thousands of independent entities. There is a constant
struggle within this market to produce the best coffee and serve one or
more niches within the larger market. Indian coffee producers and
exporters have made great efforts to improve agricultural techniques,
processing methods, and distribution in order to better serve this growing
market. Demand for Indian coffee is currently greater than supply.
The following SWOT analysis captures the key strength and weaknesses
within the company, and describes the opportunities and threats facing
Tata coffee.
2.2.1 STRENGTHS:
2.2.2 WEAKNESSES:
2.2.4 THREATS:
2.3 COMPETITION:
The customers are willing to pay more for TATA COFFEE' product
because they are familiar with the company and trust in the quality of the
beans. There are approximately 150 exporters of green Arabica beans in
India. Market contributions of individual exporters are held in strict
confidence and are not available to the public.
TATA COFFEE marketing strategy will include the use of targeted print
media advertising and direct selling to importers in the United States, as
well as a website. TATA COFFEE will capitalize on existing relationships with
importers who have stated their willingness to contact. TATA COFFEE has
positioned themselves as a differentiated provider of the highest-quality
Arabica beans. The primary goal of the marketing efforts will be to
communicate this to existing and potential customers.
3.1 MISSION:
3.5 POSITIONING:
TATA COFFEE will position itself as the high-end Arabica coffee bean
distributor in north and South America. TATA COFFEE will only sell the
highest quality and freshest quality bean, recognizing that coffee is
traditionally a commodity. TATA COFFEE will leverage its competitive edges
to achieve the desired positioning. TATA COFFEE competitive edge comes
from the advantage of having established relationships with American
importers, and Indian coffee growers, green coffee brokers and wholesalers.
TATA COFFEE has received affirmation of the demand for its product in the
form of requests from importers for larger product shipments. TATA
COFFEE is a superior product offering because of the larger average size of
the bean and because it purchases from growers who rely on the use of
chemicals and pesticides less than two percent of the time. In addition,
prompt preparation and shipment provides importers with a product that is
up to one month fresher than beans sold by many exporters.
3.6 STRATEGIES:
4.0 FINANCIALS:
TATA COFFEE will be responsible for the marketing activities. Tata will
conduct a performance assessment after the campaign is over to attempt
to determine if it merits repeating.
5.2 CONTINGENCY PLANNING:
From the above case study we conclude that proper market analysis by
expert is needed and suitable marketing strategies are to be executed
to strive in market.
CONCLUSION
WEBLIOGRAPHY
www.google.com
www.yahoo.com
www.ico.com
www.coffeeboard.com