A PROJECT REPORT

ON

A STUDY OF ‘CONCEPT OF PROMOTION MIX AND PROCESS MIX

IN SERVICE SECTOR’ WITH SPECIAL REFERENCE TO VINAYAK

AGENCIES, PUNE

PREPARED BY

ROHAN BAKSHI

T.Y.B.B.A. ‘B’, ROLL NO.05

UNDER THE GUIDANCE OF

PROF. ADITI SAMIR

SUBMITTED TO

THE UNIVERSITY OF PUNE

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DECLARATION

I hereby declare that the project work entitled “A STUDY OF ‘CONCEPT OF

PROMOTION MIX AND PROCESS MIX IN SERVICE SECTOR’ WITH SPECIAL

REFERENCE TO VINAYAK AGENCIES, PUNE” submitted to the University of Pune,

is a record of an original work done by me under the guidance of Prof. Mrs. Aditi Samir,

Visiting Faculty Member, Brihan Maharashtra College of Commerce (BMCC), Pune and this

project work has not performed the basis for the award of any Degree for diploma/fellowship

and similar project if any.

 

 

Rohan Bakshi                                                                    

T.Y.B.B.A., Div- ‘B’

Roll no- 05

25th March, 2012

BMCC, Pune-04.

2

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ACKNOWLEDGEMENT

This is in acknowledgment of Mrs. Bharti Upadhye and Mrs. Aditi Samir, who have

supported me and been my source of inspiration throughout this project.

I would also like to thank the management of Vinayak Agencies Pvt. Ltd., especially Mr.

Aspi Dubash, Senior Marketing Executive, Tata Global Beverages, for their personal

guidance during my internship of 60 days.

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PREFACE

The services sector has been a major and vital force steadily driving growth in the Indian

economy for more than a decade. The economy has successfully navigated the turbulent years of

the recent global economic crisis because of the vitality of this sector in the domestic economy

and its prominent role in India’s external economic interactions.

Service Sector in India today accounts for more than half of India's GDP. According to data for

the financial year 2006-2007, the share of services, industry, and agriculture in India's GDP is

55.1 per cent, 26.4 per cent, and 18.5 per cent respectively. The fact that the service sector now is

accounts for more than half the GDP marks a watershed in the evolution of the Indian economy

and takes it closer to the fundamentals of a developed economy. 

This project talks about the promotion and the distribution services with special references to

Tata Global Beverages.

The Distribution services, being a very critical part of the services are discussed here in this

project. Distribution services sector provides the crucial link between producers and consumers

and hence, the performance of this sector is vital to the functioning of a modern market

economy. Since the distribution margin is a significant fraction of the price of final product, an

efficient and competitive distribution system is likely to reduce distortions in the price structure.

This sector plays an important role in providing consumers with a wide choice of goods and

associated services and consequently, has a strong influence on consumer welfare. Distribution

services also provide producers with the necessary information needed to cater to the pattern of

consumer demand. Therefore, any inefficiency in this services sector is likely to lead to

misallocation of resources and economic costs.

The survey has been done on the promotion and process mix of the Himalayan Mineral water,

which is a variant of Tata Global Beverages, in order to bring out important facts about the

promotion and process mix of the service sector.

The data for the same has been collected with the help of Telephonic Interviews, where the

samples, who were the purchase or store managers of the prominent Business Units such as

Hotels, Fine dines and Corporate were interviewed over the telephone.

The data was further analysed and concluded in the project.

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INDEX

SERIAL

NUMBER

TOPIC PAGE

NUMBER

1 Introduction 1

2 Introduction of Vianyak Agencies 13

3 Introduction of Tata Global Beverages 16

4 Introduction of Himalayan Mineral Water 23

5 Process Layout of Vinayak Agencies 27

6 Research Design of the Research 29

7 Analysis of the Data Collected 31

8 Conclusion 41

9 Appendix 46

10 Questionnaire 48

11 Bibliography 50

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INTRODUCTION

Definition of 'Service Sector'

The portion of the economy that produces intangible goods. According to the U.S. Census

Bureau, the service sector primarily consists of truck transportation, messenger services and

warehousing; information sector services; securities, commodities and other financial

investment services; rental and leasing services; professional, scientific and technical

services; administrative and support services; waste management and remediation; health

care and social assistance; and arts, entertainment and recreation services.

Individuals employed in this sector produce services rather than products. Examples of

service sector jobs include housekeeping, psychotherapy, tax preparation, guided tours,

nursing and teaching. By contrast, individuals employed in the industrial/manufacturing

sector might produce goods such as cars, clothing and toys.

Service Management

Service management is integrated into supply chain management as the intersection between

the actual sales and the customer. The aim of high performance service management is to

optimize the service-intensive supply chains, which are usually more complex than the

typical finished-goods supply chain. Most service-intensive supply chains require larger

inventories and tighter integration with field service and third parties. They also must

accommodate inconsistent and uncertain demand by establishing more advanced information

and product flows. Moreover, all processes must be coordinated across numerous service

locations with large numbers of parts and multiple levels in the supply chain.

Among typical manufacturers, post-sale services (maintenance, repair and parts) comprise

less than 20 percent of revenue. But among the most innovative companies in Service, those

same activities often generate more than 50 percent of the profits.

Indian Economy

India gross domestic product (GDP) means the total value of all the services and goods that

are manufactured within the territory of the nation during the specified period of time. The

Indian economy is the second fastest major growing economy in the whole world with the

growing rate of the GDP at 9.4% in 2006- 2007. The economy of India is the twelfth biggest

in the world for it has the GDP of US$ 1.09 trillion in 2007. 

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Services Sector Growth Rate in India GDP has been very rapid in the last few years. The

Services Sector contributes the most to the Indian GDP. The Growth Rate of the Services

Sector in India GDP has risen due to several reasons and it has also given a major boost to the

Indian economy. 

Service Sector in India

India ranks fifteenth in the services output and it provides employment to around 23% of the

total workforce in the country. The various sectors under the Services Sector in India are

construction, trade, hotels, transport, restaurant, communication and storage, social and

personal services, community, insurance, financing, business services, and real estate. 

The Services Sector contributes the most to the Indian GDP. The Sector of Services in India

has the biggest share in the country's GDP for it accounts for around 53.8% in 2005. The

contribution of the Services Sector in India GDP has increased a lot in the last few years. The

Services Sector contributed only 15% to the Indian GDP in 1950. Further the Indian Services

Sector's share in the country's GDP has increased from 43.695 in 1990- 1991 to around

51.16% in 1998- 1999. This shows that the Services Sector in India accounts for over half of

the country's GDP.

 The contribution of the Services Sector has increased very rapidly in the India GDP for many

foreign consumers have shown interest in the country's service exports. This is due to the fact

that India has a large pool of highly skilled, low cost, and educated workers in the country.

This has made sure that the services that are available in the country are of the best quality.

The foreign companies seeing this have started outsourcing their work to India specially in

the area of business services which includes business process outsourcing and information

technology services. This has given a major boost to the Services Sector in India, which in its

turn has made the sector contribute more to the India GDP. The Services Sector in India must

be given boost. Services Sector Growth Rate in India GDP registered a significant growth

over the past few years. The Indian government must take steps in order to ensure that

Services Sector Growth Rate in India GDP continues to rise. For this will ensure the growth

and prosperity of the country's economy.

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Service Marketing Mix

The service marketing mix is also known as an extended marketing mix and is an integral

part of a service blueprint design. The service marketing mix consists of 7 P’s as compared to

the 4 P’s of a product marketing mix.

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The product marketing mix consists of the 4 P’s which are as following:

Product Mix, 

Pricing Mix,

Promotion Mix, and

Place Mix.

They are explained as under:

Product mix: The product mix of a company, which is generally defined as the total

composite of products offered by a particular organization, consists of both product

lines and individual products.

Pricing Mix: It is the value of the product determined by the producers. Price mix

includes the decisions as to: Price level to be adopted; discount to be offered; and,

terms of credit to be allowed to customers.

Promotion Mix: It is the communication link between sellers and buyers for the

purpose of influencing, informing, or persuading a potential buyer's purchasing

decision.

Place Mix: It refers to providing the product at a place which is convenient for

consumers to access.

The extended service marketing mix places 3 further P’s which include the following:

People Mix,

Process Mix, and

Physical Evidence Mix.

They are explained as under:

People Mix: In case of service marketing, people can make or break an organization.

Thus many companies nowadays are involved into specially getting their staff trained

in interpersonal skills and customer service with a focus towards customer

satisfaction. 

Process Mix: Service process is the way in which a service is delivered to the end

customer.

Physical Evidence Mix: Services are intangible in nature. However, to create a better

customer experience tangible elements are also delivered with the service.

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Since Vinayak Agencies are in the distribution of TATA GLOBAL BEVERAGES, it is very

important to discuss the PROMOTION MIX and the PROCESS MIX of TATA GLOBAL

BEVERAGES undertaken by the agency as well as on a national level.

Thus it is very important here to discuss the the two very important components of services

marketing mix:

Promotion mix, and

Process mix.

They are explained as under:

Promotion Mix  – Promotions has become a critical factor in the service marketing

mix. Services are easy to be duplicated and hence it is generally the brand which sets

a service apart from its counterpart. One will find a lot of banks and telecom

companies promoting themselves rigorously. It is because competition in this service

sector is generally high and promotions are necessary to survive. Thus banks, IT

companies, and dotcoms place themselves above the rest by advertising or

promotions.

Process Mix  – Service process is the way in which a service is delivered to the end

customer. Let’s take the example of two very good companies – McDonalds and

FedEx. Both the companies thrive on their quick service and the reason they can do

that is their confidence on their processes. On top of it, the demand of these services is

such that they have to deliver optimally without a loss in quality. Thus the process of

a service company in delivering its product is of utmost importance. It is also a critical

component in the service blueprint, wherein before establishing the service, the

company defines exactly what should be the process of the service product reaching

the end customer.

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Promotion Mix

No matter how wonderful ones product, no matter how unique ones service, the world is

unlikely to beat a path to ones door unprompted. One needs to carry out promotional activity

to attract the right sort of business, in the right quantity, at the right time and to distinguish

itself from the competition.

Promotion is not just about advertising a business, nor is it just about selling. It's about

pulling together a range of techniques, in the most cost-effective way one can, to initiate,

increase and maintain awareness of what one offers to the customers.

When deciding how to properly utilize the Marketing Promotion Mix to meet the marketing

objectives, it is important to consider the relative strengths and weaknesses of each

component of the mix. One should balance the various parts of the mix to not only create an

integrated approach to the marketing communications but also devote enough resources for

each component to be successful.

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Here are the Components of Promotional mix:

Reaches large, geographically dispersed audiences, often with high

frequency; Low cost per exposure, though overall costs are high; Consumers perceive

advertised goods as more legitimate; Dramatizes company/brand; Builds brand image; may

stimulate short-term sales; Impersonal, one-way communication; Expensive.

Most effective tool for building buyers’ preferences, convictions, and

actions; Personal interaction allows for feedback and adjustments; Relationship-oriented;

Buyers are more attentive; Sales force represents a long-term commitment; Most expensive

of the promotional tools.

May be targeted at the trade or ultimate consumer; Makes use of a

variety of formats: premiums, coupons, contests, etc.; Attracts attention, offers strong

purchase incentives, dramatizes offers, boosts sagging sales; Stimulates quick response;

Short-lived; Not effective at building long-term brand preferences.

Highly credible; Very believable; Many forms: news stories, news

features, events and sponsorships, etc.; Reaches many prospects missed via other forms of

promotion; Dramatizes company or product; Often the most under used element in the

promotional mix; Relatively inexpensive (certainly not 'free' as many people think--there are

costs involved).

Many forms: Telephone marketing, direct mail, online marketing, etc.;

Four distinctive characteristics: Nonpublic, Immediate, Customized, Interactive; Well-suited

to highly-targeted marketing efforts.

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Service Product Life Cycle:

When deciding upon your unique marketing communications mix, one should also consider

the Product Life Cycle. Here are some general guideline as to how and when to emphasize

different parts of the mix according to the stages of a typical product life cycle:

Pre-Introduction: Light advertising, pre-introduction publicity.

Introduction: Heavy use of advertising, public relations for awareness, sales

promotion for trial.

Growth: Advertising, public relations, branding and brand marketing, personal

selling for distribution.

Maturity: Advertising decreases, sales promotion, personal selling, reminder &

persuasion.

Decline: Advertising and public relations decrease, limited sales promotion, personal

selling for distribution.

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Challenges faced by the Service Industry in the promotion

It is a challenging task to manage a service or product industry. These challenges however

are different and unique for each industry. Some of the challenges that are faced while

managing, growing and making profit from a service industry are discussed below, these

factors do not readily apply to the product industry. 

Services are intangible and so customers cannot see or hold them before they buy it.

Buyers are therefore uncertain about the quality of service and feel they are taking a

risk. The buyer is unable to conceptualize and evaluate a service from beforehand.

From the seller's perspective he finds it challenging to promote, control quality and

set the price of the service he is provide. Unlike products the intangible nature of

service causes difficulties to both client and the firm.

Defining and improving quality in the service industry is a major challenge. Unlike

products very often services are produced and consumed simultaneously. As a result

service quality management faces challenges that the product industry never ever

comes across. In the product industry the manufacturer gets ample opportunity to test

his products before they reach the market. In case of a quality issue the problem is

taken care of during the quality check and customer satisfaction is taken care of.

However during service production the customer is right in front. To guarantee

customer satisfaction in this scenario is a major challenge.

In case of the service industry the customer first needs to develop trust in the service

organization before he buys their services. The client often gives more importance to

the amount of faith he has on the service organization than the services being offered

and their value proposition.

Service industry faces competition not only from fellow service industry but also from

their clients who often question themselves whether or not they should engage a

service at all!

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Most of the product companies have dedicated sales staff while in the service industry

the service deliverers often do the selling. Coordinating marketing, operations and

human resource efforts is a tedious task.

Passion works for the service industry. More the passion, spirit and desire among the

service staff more is the revenue generation and success generated every day. There is

a direct correlation between staff passion and financial success and similarly lack of

passion leads to failure in the service industry. Staffs need to be constantly motivated

and efforts have to make to sustain employee commitment.

While testing new services is a constant challenge communicating about these

services simultaneously is also not easy.

Setting prices does not come easily for service industry.

Standardization versus personalization is another major issue the service industry has

to face.

One needs to consider the strategies that will ensure that one’s team can deliver a consistent

level of service to all the customers at all times. In a service industry busy periods and quiet

periods are often unavoidable, and encouraging staff to follow routines helps to ensure that

whatever the pressures, a level of service will be maintained.

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Process Mix

It refers to the systems used to assist the organization in delivering the service.

Process is another element of the extended marketing mix, or 7P's.There are a number of

perceptions of the concept of process within the business and marketing literature. Some see

processes as a means to achieve an outcome, for example - to achieve a 30% market share a

company implements a marketing planning process.

Another view is that marketing has a number of processes that integrate together to create an

overall marketing process, for example - telemarketing and Internet marketing can be

integrated. A further view is that marketing processes are used to control the marketing mix,

i.e. processes that measure the achievement marketing objectives. All views are

understandable, but not particularly customer focused.

For the purposes of the marketing mix, process is an element of service that sees the customer

experiencing an organisation's offering. It's best viewed as something that your customer

participates in at different points in time. Here are some examples to help your build a picture

of marketing process, from the customer's point of view.

Going on a cruise - from the moment that you arrive at the dockside, you are greeted; your

baggage is taken to your room. You have two weeks of services from restaurants and evening

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entertainment, to casinos and shopping. Finally, you arrive at your destination, and your

baggage is delivered to you. This is a highly focused marketing process.

Booking a flight on the Internet - the process begins with you visiting an airline's website.

You enter details of your flights and book them. Your ticket/booking reference arrives by e-

mail or post. You catch your flight on time, and arrive refreshed at your destination. This is

all part of the marketing process.

At each stage of the process, markets:

Deliver value through all elements of the marketing mix. Process, physical evidence and

people enhance services.

Feedback can be taken and the mix can be altered.

Customers are retained, and other serves or products are extended and marked to them.

The process itself can be tailored to the needs of different individuals, experiencing a similar

service at the same time.

Processes essentially have inputs, throughputs and outputs (or outcomes). Marketing adds

value to each of the stages. Take a look at the lesson on value chain analysis to consider a

series of processes at work.

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VINAYAK AGENCIES

Vinayak Agencies was established by Mr. Bankim Sanghvi, in the year 1996 and by the time

it came with full force into the market, Vinayak Agencies had lost five years it the year 2001.

But Mr. Bankim Sanghvi never took this delay in the establishment of Vinayak Agencies and

and the entry in the market negatively or as a bad omen.

In fact, it was his hard work, patience and entrepreneur like qualities that pushed him through

this gap and made him pursue his dream.

Mr. Bankim Sanghvi got graduated from the University of Mumbai in the year 1984. It was

after twelve years in 1996 that he could arrange the resources to establish his firm and with

the establishment of the firm, the establishment of his own dream.

Vinayak Agencies was established with the motive of bringing an efficient distribution

system in the Fast Moving Consumer Goods (FMCG) Industries.

Today Vinayak Agencies are a well established and one of the major firms in Pune region

who are in the distribution of the products of six major brands under the head of foods and

beverages like:

Tata Global Beverages,

Dabur India Ltd.,

Kellogg’s,

Ching’s Secret (Capital Foods Ltd. India) Ltd,

Smith And Jones Ltd., and

Dukes India Ltd.

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Vinayak Agencies are the leading Stockists of the Fast Moving Consumer Goods (FMCG) in

Pune region.

They make the products available to various Wholesalers, Retailers and Hotels like:

Taj Group,

Oberoi Group,

Intercontinental,

ITC Group,

Le Meridian Hotels,

The Leela Group, etc.

They give special attention to the promotion of the products and the distribution process of

the products.

Vinayak Agencies sells the products under the head of ‘TATA GLOBAL BEVERAGES’ to

the following:

Wholesalers,

Retailers, and

Institutional Customers,

The distribution of other products of Vinayak Agencies is carried out through the wholesalers

only.

Location of Vinayak Agencies in Pune

20

The above Arial View shows the location of Vinayak Agencies and its Warehouse.

The address of Vinayak Agencies is as following:

N. M. Thakkar House,

E-56/57A, Market Yard, Pune – 411037

Tel No.: 020-30522919 / 20 / 21

Fax No.: 020-24264287

E-Mail Address: palpin369@hotmail.com

TATA GLOBAL BEVERAGES

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Tata Global Beverages is today an integrated beverage business that has set out on a journey

to become a global leader in branded ‘good for you’ beverages through innovation, strategic

acquisition and organic growth. With over 200 years of history in the beverage market and a

heritage of innovation and development, Tata Global Beverages has successfully evolved

from a predominantly domestic Indian tea farming company to become a marketing and

brand focused global organization with a portfolio of strong brands.

Formerly known as Tata Tea, the business diversified and expanded significantly over the last

decade. Tata Global Beverages now employs around 3,000 people with a significant presence

in over 40 countries worldwide. It recently opened its new corporate headquarters, located in

the UK (Uxbridge, West London). The group is now making strong strides towards its

mission of life-enhancing sustainable hydration with the recent JV agreement with PepsiCo in

the area of non-carbonated ready-to-drink beverages, focused on health and enhanced

wellness and the acquisition of a stake in Activate, a performance beverage and bottled water

company in the United States.

Areas of business

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With innovation and excellence at the heart of everything it does, Tata Global Beverages has

a stable of leading global and regional brands.

Tata Tea : Tata Tea is officially a ‘super brand’ in India, where it is the second-most

trusted hot beverage brand, thanks to national and regional brands – Tata Tea

Premium, Kanan Devan, Chakra Gold, Agni, Gemini, Life and Tata Tea Gold.

Tetley : Acquired by Tata in 2000, Tetley is currently enjoyed in 70 countries

worldwide and in close to 11 million UK homes. Tetley is a true leader in black tea,

decaffeinated and redbush, with fast growing green tea and innovative tea infusions

too. Currently market leader in the UK and Canada, the brand's strong innovation

agenda includes the first launch of Extra Strong tea for a fuller flavour and Infusions,

a liquid ‘Real Brew’ tea mix for water.

Good Earth : One of the first American herbal tea companies and a leader in specialty

teas, Good Earth produces and markets fruit, medicinal, red, green, black, white and

organic teas. Today, its premium teas and coffees, all with ‘green’ packaging are

enjoyed across the US, Canada and the UK.

Vitax : A part of the Tata Global Beverages’ portfolio since 2007, this is a well-

established fruit and herbal tea brand in Poland

Jemca : This is a market leading tea brand in the Czech Republic with a growing

range of fruit and herbal, black and green teas

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Tata Coffee : The well-known brands here include Mr Bean, Mysore Gold, Coorg

Pure, Tata Cafe and Tata Kaapi. The coffees are grown on 19 estates in the southern

states of India and produce about 10,000 tonnes of natural shade grown Arabica and

Robusta coffees.

Eight O’clock Coffee : This is the best-selling whole-bean coffee in the United States

and the third-largest coffee brand by volume in the country.

Grand : Joining the Tata family in 2009, Grand is one of Russia’s leading umbrella

beverage brands – known for its consistent quality, good value coffee, tea, cocoa,

chocolate, green tea and iced tea products – all made using natural, environmentally

friendly ingredients.

Himalayan Water : A brand that has been a part of Tata since 2007. The water is

sourced directly from an underground aquifer located about 120 metres below the

earth's surface in the Shivalik range of the Himalayas, and is bottled at the source. To

know more, visitwww.himalayanmineralwater.com

T!on : A new ‘good for you’ cold beverage launched in India in 2008

SUKK : This is a brand new ‘jelly drink’ concept launched in the UK in 2010 To

know more, visit www.thecleverjellycompany.com

T4KIDZ : This caffeine-free hot beverage, specially blended for kids by Tetley in the

UK, was launched in March 2010

Market of Tata Global Beverages

Tata Global Beverages Ltd’s sales growth in the September quarter improved to 12% from

6.5% seen in the three months ended June, chiefly due to faster growth in India.

The group’s annual turnover is US$1.5 billion (FY 2009/10) and it is the second-largest

player in tea in the world.

Its global expansion is highlighted by the fact that over 65 per cent of the consolidated

revenue originates from markets outside of India.

The group maintains a strong focus on consumer brands; more than 90 per cent of turnover is

delivered by its branded products.

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Over five years ago, nearly all the group’s turnover came from tea interests, but now the

figure is nearer 71 per cent, underpinning its successful diversification strategy and giving it a

leadership position in the ‘good for you’ beverage space.

But commodity inflation continued to cast a shadow over results, while tight cost controls,

lower interest costs and exceptional items contributed to the high profit growth.

Consolidated revenue rose 12.1% year-on-year to Rs. 1,630 crore, but operating profit margin

slipped by 59 basis points. One basis point is one-hundredth of a percentage point.

Input costs rose by 17.4%, and margins would have fallen further, but for slower increase in

employee costs, advertising and other expenses.

The company has been restructuring operations, which helped contain costs.

Lower loan levels have slashed interest payments, while exceptional items of expenditure

fell to Rs. 10.5 crore from Rs. 32.4 crore in the year-ago period.

As a result, net profit nearly doubled to Rs. 78.3 crore. Operating profit rose by just 4.7%,

indicating the extent of influence of non-operating factors in the company’s profit growth.

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Varying Strengths of Tata Global Beverages

Tata Global Beverages’ sales growth is healthy, but not uniform across markets.

US

Canada and Australia

UK and Africa

Europe and Middle East

South Asia

-15 -10 -5 0 5 10 15 20 25 30

Varying Strength

Varying Strength

Country Varying Strength (in %age)

US 30%

Canada and Australia -12.4%

UK and Africa 4.5%

Europe and Middle East 6.7%

South Asia 14.7

TOTAL 100%

Tata Global Beverages has done well in its home market in India, as market share rose over

the June quarter, with a volume share of 19.7% in the 12-month period till September

compared with 18.6% as of 30 June. A combination of price hikes and promotions

contributed to the sales growth of 14%.

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Rising input costs remain a key concern for the company. Both coffee and tea prices have

come off their highs seen so far in 2011, but are still expensive compared with a year ago.

Ability to raise prices is constrained by the effect it could have on demand in both developed

and developing markets. In markets such as India, competition from both large and local

brands also makes it difficult to fully pass on cost hikes.

Input costs also make growing the business a bigger strain on the balance sheet, as working

capital needs rise. Compared with a year ago, Tata Global Beverages’ net working capital has

risen 27%. The company’s balance sheet position is, however, comfortable, with debt

of Rs. 1,088 crore and Rs. 1,596 crore in cash.

The benefits of lower interest costs and exceptional items are likely to taper off. Exchange

rate volatility is another risk, given the company’s presence in many countries. Sales growth

is healthy, but not uniform across markets, and levels seen in the September quarter may not

sustain.

The stock hit a 52-week low of Rs. 81 in October, but has recovered to around Rs. 90. If tea

and coffee prices remain soft, margins should improve in the next quarter. If the company can

grow sales by 8-10%, along with improving margins, it should lead to healthier operating

profit growth.

27

28

HIMALAYAN MINERAL WATER

Himalayan natural mineral water, one of the nature’s finest offerings, is now brought to you

from the house of TATA. What makes this water unique is that it spends 20 years getting

naturally purified as it gathers the benefits of organic materials like passing through layers of

rock, sand and clay high ups in the Himalayas.

The source:

The water is sourced from an aquifer beneath the surface and bottled at source, completely

untouched and uncontaminated by the human hands.

Natural Purification:

Purified by natural filters in the form of sand, rocks, and clay, the water is pure and 100%

bacteria free

Mineral Content:

Himalayan Natural Mineral Water contains a plethora of natural minerals such as

magnesium, potassium, bicarbonates, and chlorides, fluorides, sulphates, and silica that

impart their goodness when the water is consumed.

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The company claims the qualities of Himalayan Natural Mineral Water are different and

better than the other packaged drinking water brands.

These qualities that make Himalayan Natural Mineral Water a preferred choice are as

following:

Himalayan Other packaged drinking water

brands

Pristine water from the Himalayas.

The catchment area has no human

activity and is pollution free.

Municipal water, open air wells,

and shallow bore wells in high

human activity zones.

Every drop travels through layers of

rock, sand, and clay for a period of

20 years. These layers act as natural

filters and keep the water pure and

100% bacteria free.

The water is treated through various

physical and chemical processes

(UV Purification, Reverse Osmosis,

Ozonification, Carbon filtration,

etc.).

Bottled at the water source at

Dhaulakua, Himachal Pradesh.

Multiple facilities close to the

market.

Naturally enriched with vital

minerals without diluting the taste

and feel.

No naturally present minerals.

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The Source

The Purification Process

The Bottling Plant

Mineral Content

Competitors of Himalayan Mineral Water

Himalayan mineral water being one of the major Mineral Water brands has many

competitors. They are discussed below:

Evian Mineral Water, and

Perrier Mineral Water,

They are explained as under:

Perrier Mineral Water :

Perrier is a brand of bottled mineral water made from a spring in Vergèze in

the Gard département of France. The spring is naturally carbonated. Both the water and

31

natural carbon dioxide gas are captured independently and in the bottling process, the carbon

dioxide gas is added so that the level of carbonation in bottled Perrier is the same as the water

of the Vergèze spring. Perrier is available in Europe in one liter, 75 cl, and 500 ml bottles,

and in 33 cl cans. Most Perrier bottles are green and all have a distinctive 'teardrop' shape. It

is one of the most commonly available bottled waters in France. In August 2001, the

company introduced a new bottling format using polyethylene terephthalate to offer Perrier in

plastic, a change that took 11 years to decide which material would best help retain both the

water's flavor and its purported "50 million bubbles."

Evian Mineral Water:

Evian, is a French brand of mineral water coming from several sources near Évian-les-Bains,

on the south shore of Lake Geneva.Today, Evian is owned by Danone Group,

a French multinational company. In addition to the mineral water, Danone Group uses the

Evian name for a line of organic skin care products as well as a luxury resort in France.

32

PROCESS LAYOUT OF THE VINAYAK AGENCIES

The process layout of Vinayak Agencies is explained with the help of the following diagram:

33

Ware house of Vinayak Agencies

Vinayak Agencies

Various Marketing Executives

In-house Delivery Centre Various Business

Groups

Ord

ers

an

d Fe

edba

ck

Catalogues and samp

les

Appoints

Communicates orders / feedback

Sends requirement

Dispatch of

order

Delivery

Process Layout

The process of the distribution and delivery mechanism of Vinayak Agencies with the help of

the diagram can be explained as:

The first step is taken by the Vinayak Agencies by appointing various Marketing

Executives for the distribution and sale of Tata Global Beverages in Pune.

These Marketing Executives approach various business units such as the prominent

Premium Hotels, corporate, Airlines, and Fine dines and Clubs.

The Marketing Executives communicates the various services of the Vinayak

Agencies and the price quotations along with the sample of the Himalayan Mineral

Water and Tata Tea to the Business Units.

The Business Units give their response and places their orders through the Marketing

Executives to the Vinayak Agencies.

The Marketing Executives in turn communicates the response and the order to the

Company Office in Market Yard.

The Agencies further sends the requirement to the warehouse of the agency. The

warehouse manager further does the following task:

a) Checking the stock for the required goods

b) Quality check

34

c) Quantity check

d) Packaging of the order

e) Dispatching to the In-house delivery centre

The order is dispatched to the In-house delivery centre. This centre ensures the safe

delivery of the goods to the choice of place of the various Business Units.

RESEARCH DESIGN

Objectives of the Research

There are various objectives of the research, they are as following:

To establish various Promotion Mix and the Process mix of the two products,

To bring out the various point of views of both Corporate Buyers and Individual

Customers,

To extend the Knowledge of Readers, and

To bring out Relative Information from the research.

Sampling

The samples have been taken to conduct the research work. They are:

35

Luxury Hotels,

Corporate,

Fine dines,

Departmental Stores, and

Clubs.

Collection of Data

The data collected is primary and first hand. The data was collected by conducting telephonic

interviews with the Purchase Manager of the various business units. The Secondary data will

also by the collections from the already published or documented sources such as price lists

of the products, catalogues and leaflets of the products and the articles posted on the website

of the company and various other web sites.

Sample Size: 30

Sample Conducted On: The sample was conducted on the various Hotel groups and Fine

Dining Chains in Pune.

Sample Collection Method: Telephonic Interview.

36

ANALYSIS OF THE DATA COLLECTED

1. Which natural Mineral Water are you using?

USAGE

Himalayan Mineral Water

Evian Mineral Water

MINERAL WATER NUMBERS PERCENTAGE

Himalayan Mineral Water 4 13.33%

Evian Mineral Water 0 0%

Perrier Mineral Water 1 3.33%

Others 25 83.33%

TOTAL 30 100%

From the research conducted, the analysis about the usage of the different mineral water and

packaged drinking water demanded by the various three star plus hotels that can be drawn is

37

that most of the major hotels and restaurants demand the various normal packaged drinking

water rather than the mineral water.

The facts are supported by the statistics shown above with the help of pie diagram that clearly

states that around 13.33% of the sample of the research demand the Himalayan Mineral

Water by their respective distributors and 3.33% of the hotels included in the research go for

Perrier Mineral Water and none of the major hotels in Pune demand Evian Mineral Water.

In contrast to above statistics 83.33% of the hotels included in the research are heavily

demanding the packaged drinking water.

2. Did your business unit ever use Himalayan Mineral Water?

Use Of Himalayan Mineral Water

Yes

No

Present Usage of Hi-malayan Mineral Wa-

ter

Still Us-ing

Left Us-ing

USE OF HIMALAYAN

MINERAL WATER

NUMBER PERCENTAGE

Yes 15 50%

No 15 50%

TOTAL 30 100%

PRESENT USAGE OF

HIMALAYAN MINERAL

WATER

NUMBER PERCENTAGE

Still Using 4 26.66%

Left Using 11 73.33%

TOTAL 15 100%

38

The research shows that half of the sample taken has demanded the Himalayan Mineral

Water from the respective distributors of Tata Global Beverages. But only few of such hotels

have continued with the same i.e. out of the 15 business units that have used the Himalayan

Mineral Water in the past, only 26.66% of them are still demanding the same and the rest

have terminated their contracts with the distributors of Tata Global Beverages. This is evident

from the pie diagram on the right. This also further establishes the fact that the various

distributors of Tata Global Beverages are reaching out to various prominent hotels and

restaurants in Pune city to carry out the most effective way of promoting the Himalayan

Mineral Water i.e. personal selling and distributing free samples.

3. In case your business unit have used Himalayan Mineral Water in

the past, please mention the reason for the shift.

Reasons of ths Change from Himalayan Mineral WaterExpensiveTaste not liked by the customersNo response from the distributor

Reasons of the change

from Himalayan

Mineral Water

Numbers Percentage

Expensive 3 27.27%

Taste not liked by the

customers

4 36.36%

No response from the

distributor

4 36.36%

TOTAL 11 100%

But the two major factors responsible for the shift that can be drawn from the research are the

price of Himalayan Mineral Water and the taste of the water. The customers of the major

Hotels and restaurants in Pune are not ready to pay 25 INR for a bottle of 1 litre. They are

satisfied by paying 14 to 18 INR a bottle of 1 litre of normal Packaged Drinking Water. Thus

the Hotels give this as a major reason for the shift. They simply say ‘THE HIMALAYAN

39

MINERAL WATER IS VERY EXPENSIVE’. The second major reason being the taste not

liked by the customers also holds a majority in the research. Water, which is such an

important commodity for the existence of mankind, is not accepted in other form and taste.

the satisfaction that the Water provides is the sole requirement of the customers. The

customers are reluctant to make any changes in the taste and preference of the Water. The

customers are not used to the taste of direct spring water, that most of the Mineral Water

brands are providing. They are used to the processed water that tastes completely different on

the tongue and thus the Himalayan Mineral Water makes them uncomfortable and they are

left unsatisfied.

4. Does your business unit avails any kind of discounts from your

distributor on the Packaged Mineral Water?

Discounts

Yes No

40

AVAILING

DISCOUNTS

NUMBERS PERCENTAGE

Yes 27 90%

No 3 10%

TOTAL 30 100%

The above pie chart shows that 90% of the business units taken for sample avail some

or the other kind of discounts and wavers extended by their respective distributors of

drinking water.

This also highlights a trend that has established its roots in the service market and i.e.

the technique of attracting customers of various segments, be it the business units or

the individual customers by extending discounts or wavers in the process of the

service.

5. Which kind of promotion did your distributors do?

Promotion Strategy

Free SamplesCorporate DiscountFree DeliveryOthers

PROMOTION

STRATEGIES

NUMBERS PERCENTAGE

Free Samples 0 0%

Corporate Discounts 12 40%

Free Delivery 18 60%

Others 0 0%

TOTAL 30 100%

41

It has been observed that promotion of the service has become the need of the hour. It

is the era where the sale of the product or service depends to a great extent on the

promotion strategies used by the companies.

It is evident from the research that most of the distributors of the Mineral Water and

the normal Packaged Drinking Water are going for two kinds of major promotion

strategies i.e. the corporate discounts or the early bird discounts and free delivery.

Around 60% of the business units were given some kind of early bird and corporate

discounts by the distributors. The rest were given free delivery for life time by the

distributors.

6. What is the credit policy you get for the Packaged Mineral Water

from the distributor?

0 to 10 10 to 20 20 to 30 30 to 40 40 to 50 50 to 600

2

4

6

8

10

12

14

Credit Policy given by the Distributors

Credit Policy given by the Dis-tributors

42

Credit policy of the

distributor

Numbers

0 to 10 Days 5

10 to 20 Days 4

20 to 30 Days 2

30 to 40 Days 14

40 to 50 Days 2

50 to 60 Days 1

TOTAL 28

Credit policy is the time taken by the business units / hotels and restaurants to clear their

pending amount of the previous stock received in a given time period. The credit policy is

decided by the distributor. It can vary from one day to sixty days. The business units which

avail the credit policy from their distributors vary from one day to sixty days. 10.71% of the

business units avail 40 to 60 days of credit policy, 57.14% of business units avail 20 to 40

days of credit policy, and 32.14% of the business units avail 0 to 20 days of credit policy. Out

of this 14.28% of business units clear their bills immediately. There are some business units

who do not want to disclose the credit policy of their distributors.

7. How would you rate the delivery efficiency of your distributor on

the scale of 10?

Delivery Efficiency Of The Distributor

Not SatisfiedJust SatisfactoryEfficient

DELIVERY

EFFICIENCY OF THE

DISTRIBUTORS

NUMBERS PERCENTAGE

Not Satisfied 11 36.66%

Just Satisfactory 17 56.66%

Efficient 2 6.66%

TOTAL 30 100%

43

More than half of the business units taken for sample are averagely satisfied with their

respective distributors. They have marked their efficiency between 5 and 8 on the

scale of 10, which is Just Satisfactory according to the survey and 36.66% of the

sample have marked the efficiency between 1 and 4 on the scale of 10.

This clearly states the fact that somewhere or the other, the distributors of Water is

lacking the quality of serving efficiently. They are not being able to keep their clients

happy and satisfied which is the key to the successful service industry.

Only 6.66% of the business units have marked the efficiency of their distributors as 9

or 10 on the scale of 10. This is a contrasting figure to the shocking 57%, who are not

completely satisfied.

8. If your business unit has never used Himalayan Mineral Water,

Please mention the reason of not at all choosing the brand.

Reasons for not choosing Himalayan Mineral Water

No brand awarenessThe cost factor

Reasons for not choosing

Himalayan Mineral Water

Numbers Percentage

No brand awareness 5 33.33%

The cost factor 10 66.66%

TOTAL 15 100%

44

The first reason – the cost factor. They consider Himalayan Mineral Water to be expensive

and they are convinced that their clientele will not approve of the brand with high prices and

will not accept it.

The second reason – no brand awareness. The business units are not aware of the brand called

Himalayan Mineral Water. This shows the lack of adequate promotion and advertisement of

the brand.

The Tata Global Beverages are not being able to reach to their potential customers as far as

their brand Himalayan Mineral Water is concerned. In this particular research, 16.66% of the

business units are not aware of the brand.

9. Are you and your customer satisfied with the Natural Mineral

Water you purchase?

Customer Satisfaction

SatisfiedNot Satisfied

CUSTOMER

SATISFACTION

NUMBERS PERCENTAGE

Satisfied 29 96.66%

Not Satisfied 1 3.33%

TOTAL 30 100%

45

The survey indicates that almost all the customers of the business units who finally

consume the Packaged Water are satisfied. This also brings out the fact that most of

the customers of the hotels and the restaurants go for normal Packaged Drinking

Water instead of the Mineral Water. It is because of this reason that the hotels and

restaurants are not demanding the various brands of Mineral Water. The customer

satisfaction is 100% in those business units who use Himalayan Mineral Water and

the customers who use Perrier Mineral Water are not satisfied. But in contrast to this

maximum customers of maximum business units in Pune are more or less satisfied

with the normal Packaged Drinking Water.

10.Please give your suggestions. Your suggestions are valuable.

Out of the sample taken, only 50% had suggestions or comments for the Himalayan

Mineral Water.

And out of those business units, only 6.66%, i.e. 1 of the business group is completely

satisfied with the services of the distributors of Himalayan Mineral Water and the

quality of water. Rest all the business units have given negative comments and

suggestions for improvement.

After analysing and understanding the sample, the following suggestions could be

drawn, they are explained as under:

46

Decrease in Price: This is the suggestion given by 46.66% of the sample.

Improvement in Taste: This is the suggestion given by 6.66% of the sample

Improvement in the Promotional Strategies: This is the suggestion given by

20% of the sample.

Service Delivery: This is the suggestion given by 6.66% of the sample

CONCLUSION

From the research it is very well highlighted that the use of Himalayan Mineral Water is very

less as compared to the Regular Mineral Waters.

The reasons for the same can be concluded as the following:

High Price,

Poor Distribution Channels,

Poor Promotional Strategies, and

The Difference in the Taste.

The less use of the Mineral Water, as in the case of The Himalayan Mineral Water is also

evident from the fact that very few Business Units are placing orders for The Natural mineral

Water Brands.

As far as the Promotion of the delivery and efficiency is concerned, The Himalayan Mineral

Water takes complete care of it, just as the other brands.

The Promotion strategies that The Himalayan Mineral Water does are as following:

Free Sample Distribution,

Free Delivery,

Delivery Convenience,

Various Discounts, and

47

Credit policies.

Such Promotional Strategies are being used exclusively to Promote Himalayan Mineral

Water.

This also brings out the fact that the Physical Goods Industries make a lot of use of the

Service Industries in order to grow, sell and expand. In this case, Vinayak Agencies are

providing distribution services to Tata Global Beverages.

The delivery efficiency which is an integral part of the Distribution and Process Mix plays an

importance.

There are many Business Units who are turning down the use of the products due to the

inefficient and ineffective delivery services.

Thus the importance of the delivery can also be concluded from this product.

Lastly, the overall satisfactions, not of the Business Units but the Customers who ultimately

consume the products are not satisfied.

The overall of the customers are very low as far as The Himalayan Mineral Water is

concerned.

The satisfaction level of the customers who consume The Regular Drinking Water is very

high. It is very close to 100%.

The factors which are considered while checking the satisfaction levels are as following:

The Price,

The Taste of the Water,

The Availability,

The Variants (various bottles of different capacities), and

The Packaging of the Mineral Water.

Limitations of the Research Conducted

There few limitations which were faced while conducting the research. These limitations of

the research conducted are stated below:

Telephonic Barriers,

48

High Cost,

Language Barriers,

High Time Consumption,

Absence of Natural Expressions, and

Difficulty in Making the Interviewee Understand the Cause of the Research

These limitations which were faced while conducting the research are explained in detail

below:

Telephonic barriers:

The Telephonic Barriers which were faced while conducting the research are listed

below:

a) Low Network Connectivity,

b) Background Noise,

c) Distortion, and

d) Call Drop.

Such Telephonic Barriers had created a major limitation while conducting the

research as it was becoming difficult to talk to the interviewee.

High Cost:

The call rates have come down in the past decades to a gradual extent, but this does

not make the Telephonic interview any less costly.

As compared to the other modes of data collection, this comes out to be a very

expensive affair. This is also one of the major limitations of conducting Telephonic

Interviews.

Language Barrier:

49

Language becomes a barrier especially when the two persons on the phone line

cannot understand or communicate in one common language known to both of them

and the inability of the person to make the person understand his or her side of the

story makes it difficult to conduct a telephonic interview.

High Time Consumption:

The telephonic interview demands the interviewer to explain the purpose and

objective of the research and the meaning of each and every question in the

questionnaire in order to get an accurate analysis of the questionnaire. This takes time

and this makes it a time consuming method. This also is one of the major drawbacks

of conducting telephonic interviews.

Absence of Natural Expressions:

It is rightly said that “Action speaks louder than words”. Thus the Physical

Expressions and actions play a very major role in collecting data. The interviewer in

case of the face-to-face interview has this advantage of analysing the data with the

help of words as well as the expressions of the interviewee.

Difficulty in Making the Interviewee Understand the Cause of the Research:

In telephonic interview, sometimes it is very difficult to make the interviewee

understand the cause of the research. Sometimes it is very difficult to make the

interviewee understand as to why is he or she being interviewed. This was a major

limitation which was faced while conducting the research

50

Recommendations for Further Research

There are few recommendations which have been made as they need to be kept in mind

while conducting further research to avoid the limitations while conducting the research:

The interview should be conducted in person and not telephonically. The interview

should be conducted face-to-face. This gives scope of more accurate results with the

help of the body language and expressions of the interviewer.

The data collection method should be improvised, so that it comes out to be as cost

efficient as possible. The telephonic interview comes out to be expensive and thus, a

better and cost efficient method must be selected.

The collection of data should be collected in as less time as possible, as analysing the

data consumes a lot of time. Therefore the collection of data should consume less

time.

The previous literature reviews of the current topic of research should be taken into

account and should be used for collecting the secondary data for conducting the

research.

The questionnaire should be designed or should be made very easy so that the

interviewee can understand it easily and can give a proper opinion of his own,

especially when one is conducting a survey on such topic where the important people

are to be interviewed, such as the managers or owners of the big and prominent five

star Hotels and restaurants. These people do not have time for such surveys, thus the

questions should be as compact and easy as possible.

51

APPENDIX

Date:

To,

Dear Sir/Madam,

Thank you for expressing an interest in our Brand Himalayan Natural Mineral Water. Furthermore to the meeting with you we are forwarding a brief write up about our company ( TATA Tea) giving you nuances of the processes and an overview about our brands.

You would be happy to note that Himalayan Natural Mineral Water has been declared by the CSE study to be the safest bottled water in India.

Himalayan Natural Mineral Water also happens to be the only Natural Mineral Water in India. Never processed, treated or altered in any manner, We have a considerable presence in the Hotel, Airlines, Hospitality chains, Multiplexes & Fine dining segment all across India. As a very special case we are giving you our quote with a special price which is as under:

Product Packaging Price per

bottle

Vat (12.5 M.R.P

Himalayan Natural Mineral Water 1 L 1x12 18.18 2.27 25.00

Himalayan Natural Mineral Water 500 ml 1x30 10.90 1.36 15.00

Himalayan Natural Mineral Water 200 ml 1x48 07.27 0.91 10.00

Scheme: On purchase of 12 cases of 1 L, 2 cases free.

Commercial terms: 15 days from submission of Invoice.

Suppliers Name: Vinayak Agencies 41030811, OR ROHAN 9765290206.

Looking forward to a mutually beneficial and long term association with you.

52

Thanking you,

From,

Tata Tea Ltd.

Aspi.N.Dubash

9223583682

QUESTIONNAIRE

NAME:

NAME OF THE BUSINESS UNIT:

DESIGNATION OF THE INTERVIEWEE:

1. Which Natural Mineral Water are you using?

a) Himalayan Mineral Water

b) Evian Mineral Water

c) Perrier Mineral Water

d) Mention if any other: ___________________

2. Did your business unit ever use Himalayan Mineral Water? This question has to be

taken up by the person if he or she has chosen option (b), (c) and (d) in question 1.

a) Yes

b) No

3. In case your business unit have used Himalayan Mineral Water in the past, please

mention the reason for the shift:

_____________________________________________________________________

_____________________________________________________________________

4. Does your business unit avails any kind of Discounts from your Distributor on the

Packaged Mineral Water?

a) Yes

53

b) No

5. Which kind of Promotion did your Distributors do??

a) Free Samples

b) Early Bird Discounts / Corporate Discounts

c) Free Delivery

d) Mention if any other :

_____________________________________________________________________

_____________________________________________________________________

6. What is the Credit Policy you get for the Packaged Mineral Water from the

Distributor?

_____________________________________________________________________

_____________________________________________________________________

7. How would you rate the delivery efficiency of your distributor on the scale of 10?

_________________

1 2 3 4 5 6 7 8 9 10

1- 4 not satisfied

5- 8 just satisfied

9- 10 efficient

8. Please mention the reason of not using The Himalayan Mineral Water?

_____________________________________________________________________

_____________________________________________________________________

9. Are you and your customer satisfied with the Natural Mineral Water you purchase?

a) Yes

b) No

10. Please give your suggestions:

54

_____________________________________________________________________

_____________________________________________________________________

Your suggestions are valuable.

Thank you for your time.

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56