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A
PROJECT REPORT ON
TO CHECK OUT THE FEASIBLITY OF SUMUL TEA
STALL
UNDER TAKEN AT
SURAT DISTRICT CO-OPERATIVE MILK UNIONLTD. 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
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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.
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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 tobe 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
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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.
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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
&preference for tacking tea & 100 sample size for knowingconsumption 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:
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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 priceof 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.
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- 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 THEADVERTISEMENT.
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.
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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
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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)
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Fixed Cost Rupee
s
Tea stall Laurie (4x 4) 20,000
Municipal tax(Advance) 3,650Burner (with two burner) 1,200
Dustbin 150
Hand Glows, Apron & Caps 150
Glasses & Dishes (24) 300
Other Vessels(kettle ,pan
etc)
1,800
Exps. of paints 500
Total fixed cost 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.145C.P Rs.135
Net Profit Rs. 10
Cost of Milk Packet S.P Rs.11
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(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 40Cardamom 54
Municipals tax(Daily) 10
Wages of worker 20
Wage of tea maker 40
Total variable cost 1198
Estimated Yearly Demand (per tea stall)
YearlyDemand
No. of cuttingsconsumed
(In Rs.)
Baroda bridge 2,14,440
Athwalines 1,36,800
Rander 1,14,600
Pandesara 1,60,320
Station road 99,360
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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 Bridge23,760 5,360 1,207 30.327
Athwalines14,760 3,420 770 18,950
Rander 14,040 2,870 645 17,555
Pandesara15,840 4,010 902 20,752
Sumul road15,840 2,480 559 18,879
Total1, 06,463
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Break even point = 27,750 * 5
= Rs. 1, 38,750
Monthly Profit = 1,06,463/12
= Rs. 8,872
Daily Profit = 8,872/30
= Rs. 296
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
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FINANCIAL FEASIBILITY
Proposed Trading and P&L a/c of SUMUL Tea Stalls forthe 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.
pouch*Rs.1)
84,240 5,10,530
Total 5,10,530
Debit
Net Purchase
Tea Powder(Rs.135/-) 2,44,890
Sugar (Rs.19.50/-) 1,59,179
Gross Profit 1,06,461
Total 5,10,530
Credit
Gross Profit 1,06,461
Total 1,06,461
Debit
Dep. Of Laurie 5,000
Dep. Of Burner 480
Hand glows, Apron & Cap 1,200
Exps. Of tea glasses and other vessels 2,400Exps. Of Paint 4,000
Municipal Tax (3650*5) 18,250
Net Profit 75,131
Total 1,06,461
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Balance Sheet of Sumul Tea Stalls as on 30-9-2008
LABILITY Rs ASSETA
Capital 2,00,000 Laurie 1,00,000
Net profit 75,131 5% dep. 5,000 95,000
Burner 9,600
5% dep. 480 8,120
Dustbin 1,200
Vessels 14,400
Cash 156,411
Total 2,75,131 Total 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
CasesValid Missing Total
N
Percen
t N
Percen
t N Percent
income *
frequency180
100.0
%0 .0% 180 100.0%
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Income * frequency Cross tabulation
Inference:
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
Frequency Total
1-3 4-6 7-9
more
than 9 5 1-3
inco
me
not earning Count23 8 1 1 0
% within
income69.7% 24.2% 3.0% 3.0% .0% 100.0
below2000 Count 1 1 0 0 1% within
income33.3% 33.3% .0% .0% 33.3% 100.0
2000-5000 Count 29 14 3 3 0% within
income59.2% 28.6% 6.1% 6.1% .0% 100.0
5001-10000 Count 17 38 4 3 0% within
income27.4% 61.3% 6.5% 4.8% .0% 100.0
10001-
15000
Count8 10 5 0 1
% within
income33.3% 41.7% 20.8% .0% 4.2% 100.0
above
15000
Count6 3 0 0 0
% within
income66.7% 33.3% .0% .0% .0% 100.0
Total Count 84 74 13 7 2 1% within
income46.7% 41.1% 7.2% 3.9% 1.1% 100.0
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cup drinkers. While income group below 2000 they hardly visit tea
stall. 59.2% of people who lies in the income group between 2000-
5000 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
Value df
Asymp.
Sig. (2-sided)
Pearson Chi-
Square
64.539
(a)20 .000
N of Valid
Cases180
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:
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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 ofselecting tea stall.
Taste
Scale Frequency Percent
Very Unimportant 11
Unimportant 4 2
Nutral 4 2
Important 107 59
Very Important 64 36
Total 180 100.0
Taste
1%2%2%
59%
36%
VeryUnimportanatUnimportanat
Nutral
Importanat
Vary Importanat
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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
N Mean
Std.
Deviation
Std.
Error
Mean
Taste 180 4.28 .645 .048
One-Sample Test
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Test Value = 4.0
t Df
Sig.
(2-tailed)
Mean
Differen
ce
95%
Confidence
Interval of the
Difference
Lower Upper
Taste 5.890 179 .000 .283 .19 .38
Inference:
Here the test is performed at 95% significance level and the p-valuecomes 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: - As I have done a project on To check out the
feasibility of SUMULs tea stall in Surat. For that I have undertaken two
surveys:
(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.
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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.
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