ASSIGNMENT OF ELECTRONIC BUSINESS

New Business Plan

CHILLOUT BEVERAGE STORE



 

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Delivery on time is our unique feature. We can deliver our producte in
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* Indian Made Foreign Liquor (IMFL)

lcoholic beverage industry is a well developed - Rs 8,200 crores (US
$ 1907 million) industry in India
Major players in the alcoholic
beverages market - United Breweries (UB) Group (Bangalore),
Shaw Wallace (Calcutta), Jagajit Industries (Kapurthala, Punjab),
Mohan Meakins (Solan, Himachal Pradesh), ssociated Breweries
& Distilleries (Mumbai). Per capita beer consumption in India is 0.5
litres; as against 20 litres in China, 100 litres each in US & Germany,
annually.

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^  70 million cases market

^ Market growing at 10-12 % per annum
^ South and west zones account for bulk (> 75 %) of this market
^ Major beer consuming centers - Maharashtra (Mumbai)
^ Karnataka (Bangalore); Tamilnadu (Chennai)

^ Minimum economic size : 5000 kilo litres; 15000 kilo liters for
NRI proposals
^ round 40 units in organized sector, mostly regional players
^ 4 large breweries have 84% of the market
^ Major beer brands (manufacturers) - King Fisher, Kalyani Black
Label (UB Group), Golden Eagle (Mohan Meakins), Haywards
(Shaw Wallace), London Pilsner (ssociated Breweries and
Distilleries)
^ Foreign brands - Stroh¶s, Fosters
^ Beer packed in 650,750 & 1000 ml glass bottles; usage of (330
ml) cans minimal
^ Preference in the Indian market for strong beer
^ Promotions and sponsorships (sports, musical events) to
promote brands
^ States¶ prohibition policies govern trade sales for beer
^ Multi layer trade channel structure
^ Beer sold through the same outlets as IMFL
^ Institutional sales of beer to star hotels, large restaurants, bars/
pubs

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 ^ Import duty on beer - 100 % basic; 10 % surcharge; SD : 4
%
^ Sales taxes - 45%, 5% cess (State subject).
^ Excise Duty - Rs. 4/ Bulk liter in Karnataka (State subject)

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^ Market : 58 million cases

^ Past growth 15 % CGR per annum
^ Brown spirits - particularly whisky, rum & brandy account for
over 75 % of this market
^ South and North share 60% of market
^ Industry in the organized sector - an industrial license is required
to start manufacture
^ Major brands (manufacturers) : Signature, Blue Riband (UB
Group), ristocrat (Jagajit Industries), Smirnoff, Gilbeys Green
Label, Malibu, rcher¶s Peach Schnapps(International Distilleries
India), Passport (Seagram¶s), VT 69, Black & White, Black Dog
(United Distillers India)
^ Preference for brown spirits (molasses flavor) in Indian market
^ Liquor packed in 180, 375, 500, 750 and 1000 ML bottles - glass
and plastic bottles. 180 ML and 750 ML are fast moving
^ Promotions, sponsorships, surrogate advertising (sometimes)
done to build brands
^ Ãpen market : Maharashtra, J&K, Goa, Ãrissa
^ uction market : Uttar Pradesh, Rajasthan, Madhya Pradesh,
Bihar, Punjab, Chandigarh

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 ^ Government Controlled : Tamilnadu, Karnataka, Delhi, Kerala
^ Prohibition States : Gujarat, Manipur, Mizoram, Nagaland
^ There are over 22000 liquor retail outlets spread across the
country
^ Sales tax (ad valorem), Bottling Fee, Liter Fee, Vend Fee, Gallon
age Fee, Privilege Fee, Import/ export Pass duty etc. are some of
them. In Karnataka some of the taxes levied are : Excise Duty :
Liquor from spirits - Rs. 45/- bulk liter; Premium Malt Whisky -
Rs. 60/- bulk/ liter; Liter Fee - Rs. 20/- bulk liter; Sales tax :
60%; cess 5%
^ Import duty on whisky, rum, gin & vodka, liqueur - 230 % +
SD : 4 %

Soft drinks Industry overview

Global sales of soft drinks exceed 327 billion liters and are valued at
more than US $393 billion annually. North merica, Europe and Japan
are the most mature markets for global soft drinks. Coco Cola and
PepsiCo Inc has significant control over the global soft drinks market
and both have similar business organizations and processes
worldwide. Soft drink consumption has a market share of 46.8%
within the non-alcoholic drink industry; clearly, the soft drink industry
is lucrative with a potential for high profits. Coca-Cola is king of the
soft drink-empire and boasts a global market share of around 50%,
followed by PepsiCo at about 21%, and Cadbury Schweppes at 7%.´
side from these major players, smaller companies such as Cott
Corporation and National Beverage Company make up the remaining
market share.
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The carbonates category was valued at INR 79,360.7m ($1,923.1m)
in 2008, representing a CGR of 1.1% since 2003. By the end of
2013, the carbonates category will be worth INR 85,212.2m
($2,064.9m), with an expected CGR of 1.4% between 2008 and
2013.
The ease of entry and exit does not cause competitive pressure on the
major soft drink companies. It would be very difficult for a new
company to enter this industry because they would not be able to
compete with the established brand names, distribution channels, and
high capital investment. Likewise, leaving this industry would be
difficult with the significant loss of money from the fixed costs,
binding contracts with distribution channels, and advertisements used
to create the strong brand images.

Competitorǯs analysis

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Products/Services : Highland Prince, XXX Fighter Rum, Party Vodka,
lcohol Beverages, Green Berry, lcohol Beverages lcohol
Beverages, lcohol - Beverage, lcohol - Spirits, spirits alcohol, wine,
vodka, Liquor, Scotch Blended Whisky, Neutral lcohol, Spirits,
lcoholic Beverage, Brandy.

  

Products/Services : Senate Royale Whisky, Mansion House Whisky,
Senate Whisky, Shot Whisky, Classic Whisky, Royal Choice Whisky,
Hott Silk Whisky, Castle Club Whisky, Brandy, Courrier Napoleon
Brandy, Savoy Club Rum, Vodka.
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6 ñ
Products/Services: Whisky, Rum, Brandy, Vodka, lcoholic Beverage,
Liquor, lcohol.

ñ

Products/Services: lcoholic Beverages, Whisky, Brandy, Rum, Vodka.

6  ñ

Products/Services: Beer from malt, alcohol strengths ranging from 5
to 8% v/v, whisky, rum, gin, brandy, vodka.

 6! !"ñ"

Products/Services: Soft Drinks, Soft Drink Concentrates, Mango Drink,
Club Soda, Packaged Drinking Water.

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Products/Services: Fruit Drinks, Carbonated Soft Drinks, Bottled
Water.

 #
Engaged in supplying and exporting drinks such as soft drinks,
nutritious soft drinks, flavored soft drinks, tasty fruit juice and health
fruit drinks.

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Deals in exporting and manufacturing of alcoholic beverages such as
aromatic alcoholic beverages, wines, aloe Vera drinks, aloe Vera
health drinks, aloe Vera refreshing health drinks and red wines.

These are few of the companies in India that offer the alcoholic and
soft drinks beverages in the market but one thing that we have
advantages over these companies is that all these companies have
specialized in one type of beverages whether it is alcoholic or non
alcoholic beverages. nd we are providing both of these together so
there will be a great potential for our company to get a bigger slice of
cake in this competitive market.

The major triggers of e-commerce in India were:

* Saves time and efforts
* Convenience of shopping at home
* Wide variety / range of products are available
* Good discounts / lower prices
* Get detailed information of the product
* uou can compare various models / brands

nd some of the major barriers at present were:

* Not sure of product quality
* Cannot bargain/Negotiate
* Not sure of security of transactions / Credit card misuse
* Need to touch and feel the product
* Significant discounts are not there
* Have to wait for delivery

So by utilizing the triggers of e-commerce and reducing the barriers
of e-commerce we can run our business successfully. Before starting

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our business we are working on those barriers so that it will become
easy for we people to carry on our business. Since we are delivering
the branded products so it already eliminates the barriers related to
product quality. Secondly we start with aim to get the faith of people
on our business so at first we try to cover a small area by which
people have not wait too much for their orders. nd there is also no
need to touch and feel the beverages products like clothes, cars,
electronics items etc.

arketing Strategies and Sales

Marketing strategy is a process that can allow an organization to

concentrate its limited resources on the greatest opportunities to
increase sales and achieve a sustainable competitive advantage where
Competitive advantage is the strategic advantage one business entity
has over its rival entities within its competitive industry. chieving
competitive advantage strengthens and positions a business better
within the business environment. Marketing strategy involves careful
scanning of the internal and external environments. Internal
environmental factors include the marketing mix, plus performance
analysis and strategic constraints. External environmental factors
include customer analysis, competitor analysis, target market
analysis, as well as evaluation of any elements of the technological,
economic, cultural or political/legal environment likely to impact
success.

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Ãnce a thorough environmental scan is complete, a strategic plan can
be constructed to identify business alternatives, establish challenging
goals, determine the optimal marketing mix to attain these goals, and
detail implementation.  final step in developing a marketing strategy
is to create a plan to monitor progress and a set of contingencies if
problems arise in the implementation of the plan.

Strategies based on market dominance - In this scheme, firms are

classified based on their market share or dominance of an industry.
Typically there are four types of market dominance strategies:
Y"eader†through chill out beverages have the great opportunity to
be the market leader as non of its competitors have this great
mix of product which we provided i.e. it¶s all one stop solution for
beverages.
$"Challenger†chill out beverages does not follow that strategy as
we want to be best in our field since we not only look for B2B
business but also the B2C business i.e. with home delivery
facility even if the minimal order quantity is demanded from the
customers. So we give challenge to other to follow the challenger
strategies.
%"Follower†N
&" ichesȄas our business is basically focus on small area at its very
early stage. So chill out beverages focus on particular segment
of customers besides the B2B customers.


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 Porter generic strategies - strategy have the dimensions of
strategic scope and strategic strength. Strategic scope refers to
the market penetration while strategic strength refers to the
firm¶s sustainable competitive advantage.
Y"  ''†it¶s quite difficult to have a
product differentiation strategy for our company as we are
not manufacturing the beverages.
$"# †this could be our edge over other
business as we are not going to have any intermediaries for
our B2B and B2C customers. nd we directly procuring the
beverages from manufacturer and supplying to our
customers. So we can surpass more margins to our B2B
customers and profits to our B2C customer with ease of
shopping and ordering facility from their home and own
working places.
%"
  †first thing concerns with the value in the
mind of customers is price. So we gives more margin to our
customers it leads to value creation. Besides that facility for
the ease of ordering, payment, delivery time, and home
delivery is all helpful for our business to create value for our
customers.

arket Segmentation, argeting & cositioning strategy

Market segmentation is the division of a market into different groups
of customers with distinctly similar needs and product/service
requirements. Ãr to put it another way, market segmentation is the
division of a mass market into identi¿able and distinct groups or
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segments, each of which have common characteristics and needs and
display similar responses to marketing actions. The purpose of market
segmentation is to leverage scarce resources; in other words, to
ensure that the elements of the marketing mix, price, distribution,
products and promotion, are designed to meet particular needs of
different customer groups.

argeting
What is target? This is the real goal/objective in market that marketer
want to reach.

What percent of the population uses the product at all?

What percent uses your brand?
How does that compare to competing brands?
What is the demographic profile of the product category?
Which media reach the users of this category?
cositioning
Positioning is an essential component -- and skill - in good marketing.
Perceptual maps are used to determine the position of a product,
firm, person, service or idea. Positioning maps or perceptual maps
can be simple, yet very effective marketing tools. It¶s all about getting
a favorable image in the mind of customer compare to the nearest
competing product.

s we have already mentioned previously the consumption pattern of

beverages of the Indian consumers. So briefly we have a look on the
customers of our business.

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croduct/Service Strategy
s it was already mentioned the product and services which chill out
beverages offers to the customers. In the near future we are
concentrating basically on these two types of beverages. However our
company also plans to extend their product line by including other

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beverages of alcoholic and non- alcoholic. Mainly plans to introduce
the fruit, milk, coffee, tea and other herbal juices.

This is our long term strategy in order to me the biggest market

player with huge presence physically as well as most recognized
online player in that industry.  list of our product and services is
mentioned in this plan.

Pricing Strategy
Since its nothing like charging a skimming price in this industry as
people are well aware of the prices of soft drinks but not very much of
alcoholic beverages. Since we are offering these products to our
customer without any intermediaries so it¶s a great edge for our
business to provide the products at their own place at the same
market price and we also make good money by that i.e. the margin
we give to the other intermediaries. We can also provide the products
at lower price than market for few products. Ãne thing is that for B2B
customers we work like that but for B2C customer mainly are of upper
class which urge for the home delivery. So they are also ready to give
the extra charge for that as they are basically business class people
with very busy time schedule, so it is not easy for them to go market
and purchase these all things.

Distribution Channel
From the figure given below clearly shows how we are going to
distribute our products to our customers. We are in direct contact
with the beverages manufacturer for supply of their products. Since

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we are more concentrating towards our B2C customers so we apply
the rule of attack from both and try to get more in touch with the
customer. s a customer can directly purchase the products by
making their order online directly to chill out beverages without any
difficulty. We have our employees for home delivery of ordered
products throughout the possible regions. We have also four
warehouses to cater the bigger picture of the market with quick
supply to their final destinations. Since our SCM and e-SCM both are
so strong which provide the extreme support for the exchange of
goods and services with information.

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