HUL-OOH Interns Report

Hindustan Unilever Limited

Summer Internship Project Report

On

“CORPORATE ACCOU�TS’ PURCHASE DECISIO� A�ALYSIS BASED O� THE

STUDY OF BEVERAGE VE�DI�G SOLUTIO�S MARKET”

Submitted by:

Abhishek Bhartiya

Under the guidance of

Prof. R.J. Masilamani Mr. Shiv Mohan Bharadwaj

Professor, BIMTECH Territory Sales Officer,

Greater Noida OOH – Foods, Gurgaon,

HUL - Haryana

SUMMER INTERNSHIP PROJECT

BIMTECH PGDM 2008-10 Page 2

ACK�OWLEDGEME�T

No work is a work of an individual. This project is not an exception to it. I owe a sense of

gratitude to the co-operation and support of all those people who have let me understand what

is needed from time to time for completion of this project. It is very difficult to prepare a

project especially when someone is new for this experience. Without any help or guidance it

is not easy to achieve this given task. So I would sincerely like to thank all the patrons of this

project.

I am thankful to Hindustan Unilever Limited (HUL) for having given me an opportunity to

work with them and make the best out of my internship.

I thank my company guide Mr. Shiv Mohan Bharadwaj for having constantly guided and

supported me throughout the training period.

I thank my college, Birla Institute of Management Technology for having given me this

opportunity to put to practice, the theoretical knowledge that I imparted from the program. I

express my deep sense of gratitude to my faculty guide Professor R.J. Masilamani,

BIMTECH, for providing me with essential support and guidelines for the completion of this

project.

My heartfelt gratitude also goes out to the staff and employees at HUL for having co-

operated with me throughout the two months of my internship period.

I take this opportunity to thank my parents and friends who have always stood by me and

offered emotional strength and moral support and encouragement.

Last but not the least, I am thankful to all the customers, who gave their precious time and

insights, without which this the completion of this project would not have been envisaged.

Abhishek Bhartiya,

PGDM – 2008-10

Birla Institute of Management Technology,

Greater Noida.



TABLE OF CO�TE�TS

EXECUTIVE SUMMARY..............................................................................................9

I�TRODUCTIO�…........................................................................................................10

CHAPTER 1:

1.1: Company Profile..........................................................................................................11

1.2: Company History.........................................................................................................12

1.3: Brief Overview of Indian Beverage Industry..............................................................14

CHAPTER 2:

2.1: Objective.............................................................…………………………………....20

2.1.1: Brief Overview of Tea and Coffee Market.........................………………21

2.1.2: Vending Solutions Market...........................................................................21

2.1.3: HUL OOH Division.....................................................................................24

2.1.4: Nestle OOH Division..................................................................................35

2.1.5: Comparative Study of HUL and Nestle Products.......................................35

2.1.6: Distribution Network of HUL OOH Division............................................38

2.2: Sales Lead Generation and Management...................................................................39

2.2.1: Cost Comparison of Vending machines v/s Pantry..................................................40

2.2.2: Results of Sales Lead Generation.............................................................................43

2.3: Research

2.3.1: Statement of Problem...........................................................................................44

2.3.2: Objectives of Research.........................................................................................45

2.3.3: Approach to the Problem......................................................................................46

2.3.4: Questionnaire Development.................................................................................47



2.3.5: Sample Design Process.........................................................................................48

2.3.6: Scaling Technique.................................................................................................48

2.3.7: Analysis Method....................................................................................................49

2.3.8: Analysis of Primary Objective Using SPSS..........................................................49

2.3.9: Analysis of Secondary Objective of Research......................................................54

2.4: Exploring Opportunities for Vending Solutions in Educational Institutes............................59

CHAPTER 3:

3.1: Conclusion............................................................................................…………......61

3.2: Recommendations......................................…............................................................63



LIST OF TABLES:

Table 1: Indian Spirits Industry.

Table 2: Nestle Product Prices.

Table 3: HUL Product Prices.

Table 4: Cost Comparison of Vending machines v/s Pantry.

Table 5: Components obtained from Factor Analysis.

Table 6: Competitor Analysis on the basis of Component 1.

Table 7: Competitor Analysis on the basis of Component 2.

LIST OF GRAPHS:

Graph 1: Vending Solutions Market.

Graph 2: Market share of Major Players.

Graph 3: Comparative prices of Nestle and HUL.

Graph 4: Scores for major Tea Brands from Questionnaire.

Graph 5: Percentage of Respondents ranking a Tea brand no. 1.

Graph 6: Scores for major Coffee brands from Questionnaire.

Graph 7: Percentage of Respondents ranking a Coffee brand no. 1.

Graph 8: Scores for major Vending machine brands from Questionnaire.

Graph 9: Percentage of Respondents ranking a Vending machine brand no. 1.



APPE�DICES:

Appendix 1: Factor Analysis.............................................................................................66

Appendix 2: Estimate of Yearly Revenue from acquired accounts..................................69

Appendix 3: Questionnaire................................................................................................70

Appendix 4: e-brochure as a part of Brand Communication of Nestle.............................73



EXECUTIVE SUMMARY

Hindustan Unilever Limited has been a major player in Indian beverage market, with its

strong brands of tea like TajMahal, Lipton etc. and in coffee with its brand BRU. With its

brand Lipton, HUL marked its entry into vending solutions market a decade earlier.

Out-of-Home as this market is termed was at that time had Nestle as the only major player.

HUL in past decade has grown immensely and is now second largest player in this market.

Assigned in Gurgaon, the main objective was to understand the “Corporate accounts’

purchase decision process” and find out the factors responsible for that. For the fulfilment of

this objective, I first studied the vending solutions market during the process of sales lead

generation and its management. This gave me a firsthand experience of the market, its trends,

and intricacies. Sales lead generation and management resulted in acquisition of four

accounts for the company and sale of five vending machines.

In order to understand the customer decision process, I designed a questionnaire and did a

survey in Gurgaon. The survey revealed some critical facts about the brand image of the

Lipton and BRU brands of HUL. Further, factor analysis of the collected data was done,

which revealed that, customer purchase behaviour can be largely explained by two

components, which were re-christened as, “Lifecycle cost” and “Brand Value”. This research

study holds its importance in the sense that these results can be further utilized by the

company to design basic packages for different types of industries.

Lastly, I also explored opportunities for the company, in educational institutes of Knowledge

Park, Greater Noida, as a result of which, I was able to acquire two accounts in the region.

The survey of the region revealed a very lucrative opportunity for the company to develop its

business in the region, in educational institutes. Recommendations to achieve leadership

position in this region are given.



I�TRODUCTIO�

Hindustan Unilever has its presence in India for last many decades, and with its iconic

brands, and dedication towards serving its consumers with quality products had made it not

only the leading FMCG Company, but also a very well respected one.

HUL being the leader in the FMCG industry, has always been a dream company for

marketers, and having got an opportunity to do summer internship in such a reputed

organization for a marketing student like me proved to be an obvious choice.

Designated in OOH – foods division, I worked in Gurgaon and Greater Noida regions, with

the primary objective of “Corporate accounts’ purchase decision analysis based on the

study of beverage vending solutions market”.

Having got an opportunity to utilise my theoretical knowledge of B2B marketing, with

practical application in field, this topic gave me full scope to understand the market and more

importantly understand the behaviour of the large corporate customers.



CHAPTER 1:

1.1 Company Profile:

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods

Company, touching the lives of two out of three Indians with over 20 distinct categories in

Home & Personal Care Products and Foods & Beverages.

The product range contributed combined volumes of more than 4 million tonnes by quantity

and revenues of nearly Rs. 20,000 crores, in the year ending on March 2009.

HUL is also one of the country's largest exporters; it has been recognised as a Golden Super

Star Trading House by the Government of India. The mission that inspires HUL's 15,000

employees, including 1,300 managers, is to "add vitality to life." HUL meets every day needs

for nutrition, hygiene, and personal care with brands that help people feel good, look good

and get more out of life. It is a mission HUL shares with its parent company, Unilever, which

holds 52.10% of the equity. The rest of the shareholding is distributed among 360,675

individual shareholders and financial institutions.

HUL business is divided into five major segments namely, Soaps & Detergents, Personal care

products, beverages, processed foods, ice creams, and with others which include chemicals

and water. HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely,

Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-

Annapurna, Kwality Wall's – are household names across the country and span many

categories - soaps, detergents, personal products, tea, coffee, branded staples, ice cream and

culinary products. They are manufactured over 37 factories across India. The operations

involve over 2,000 suppliers and associates.

HUL's distribution network, comprising of about 2,500 redistribution stockists, covering 6.3

million retail outlets reaches the entire urban population, and about 250 million rural

consumers.



1.2 Company History:

In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap

bars, embossed with the words "Made in England by Lever Brothers". With this, began an era

of marketing branded Fast Moving Consumer Goods (FMCG). Soon after Sunlight, there was

launch of Lifebuoy soaps in 1895 and other famous brands like Pears, Lux and Vim.

Vanaspati was launched in 1918 and the famous Dalda brand came to market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing

Company, followed by Lever Brothers India Limited (1933) and United Traders Limited

(1935). These three companies merged to form HLL in November 1956; HLL offered 10% of

its equity to the Indian public, being the first among the foreign subsidiaries to do so.

Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed

among about 360,675 individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company

had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was

formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition.

The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in

1972 and in 1977 Lipton Tea (India) Limited was incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold

through an international acquisition of Chesebrough Pond's USA in 1986.

Since the very early years, HUL has vigorously responded to the stimulus of economic

growth. The growth process has been accompanied by judicious diversification, always in

line with Indian opinions and aspirations. The liberalisation of the Indian economy, started in

1991, clearly marked an inflexion in HUL's and the Group's growth curve. Removal of the

regulatory framework allowed the company to explore every single product and opportunity

segment, without any constraints on production capacity. Simultaneously, deregulation

permitted alliances, acquisitions and mergers. In one of the most visible and talked about

events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged

with HUL, effective from April 1, 1993. In 1995, HUL and yet another Tata company,

Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited, to market Lakme,



the market-leading cosmetics and other products of both the companies. Subsequently in

1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture

to the company. HUL formed a 50:50 joint venture with the US-based Kimberly Clark

Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex

Sanitary Pads. HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL),

and its factory represents the largest manufacturing investment in the Himalayan kingdom.

The UNL factory manufactures HUL's products like Soaps, Detergents and Personal Products

both for the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods

and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods,

with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the

UB Group and the Dollops Ice cream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation

companies of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke Bond

India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling

greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed

BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the company

entered into a strategic alliance with the Kwality Ice cream Group families and in 1995 the

Milk food 100% Ice cream marketing and distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal

restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998.

The two companies had significant overlaps in Personal Products, Speciality Chemicals and

Exports businesses, besides a common distribution system since 1993 for Personal Products.

The two also had a common management pool and a technology base. The amalgamation was

done to ensure for the Group, benefits from scale economies both in domestic and export

markets and enable it to fund investments required for aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in

Modern Foods to HUL, thereby beginning the divestment of government equity in public

sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic

extension of the company's wheat business.



In 2002, HUL acquired the government's remaining stake in Modern Foods. In 2003, HUL

acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam Group of

Companies, a leader in value added Marine Products exports.

1.3 Brief overview of Indian Beverage Industry:

The beverage sector in the country covers fruit drinks in tetra packs, mineral water, alcoholic

drinks, soft drinks, coffee and tea. Few major factors that drive the beverage market in India

are convenience of a ready-to-drink concept, easy availability, high thirst factor and high

disposable incomes. While it is difficult to estimate the size of the sector because each sector

itself provides a dedicated range of customers, the industry estimates it as Rs. 10,000-crore

segment for fruit drinks and the soft drinks alone. Experts state that the market is growing at

over 30% annually.

Since beverages are indispensable, companies are looking at novel packaging concepts to

woo customers.

In terms of flavour the demand is more for light and nutritional versions with better taste.

Types of beverage: -

• Alcoholic beverages

• Non-Alcoholic beverages

• Soft drinks

• Fruit juice

• Hot beverages

• Others



Alcoholic Beverages: -

• Whiskey

• Rum

• Brandy

• Beer

• Vodka

• Gin

• Wine

In the last few years Indian liquor industry has seen some major Mergers & Acquisitions,

which has consolidated the whole industry. The consolidation wave, spanning both the IMFL

and beer segments, has seen merger of companies, and acquisition of brands, manufacturing

facilities and bottling units. Liquor industry has even shown a robust growth in midst global

slowdown, which seemingly had no effect on it. The Indian Made Foreign Liquor (IMFL)

market in India constitutes 31% of the total liquor market in India. The rest is accounted for

by country liquor. However, there is a discernible shift in consumption from country liquor

towards IMFL.

SPIRITS INDUSTRY 322 MILLION CASES

IMFL 100 MIL. CASES

FY 2004-06 VOL GROWTH 9%

2009 EXPTD. GROWTH 10%-11%

COU�TRY LIQUOR 222 MIL. CASES

FY 2004-06 VOL GROWTH 7%

2009 EXPTD. GROWTH 5%-6%

WHISKEY

IMFL Share: 59.5%

Exptd. Growth: 10%

Major Brands:

McDowell No.1,

Royal Stag,

8PM, Bagpiper,

Director’s Special,

Royal Challenge

RUM

IMFL Share: 17.6%

Exptd. Growth: 8.9%

Major Brands:

Bacardi, Old Monk,

McDowell,

Celebration,

Old Admiral

BRANDY

IMFL Share: 1.2%

Exptd. Growth: 30%

Major Brands:

McDowell No.1,

Honey Bee,

Old Admiral,

Golconda

VODKA

IMFLShare:18.2

%

Exptd.

Growth:30%

Major Brands:

Smirnoff,

Romanov,

White Mischief,

Magic Moments,

Alcazar

GIN

IMFL Share: 3.5%

Exptd. Growth: 0-1%

Major Brands:

Blue Riband, Carew,

Haywards’, Aristocrat,

Contessa

Table - 1



The IMFL segment is growing at 9-10% as against 6-7% growth in country liquor, in terms

of volume.

Another booming market in liquor industry is wine market, according to a recent

knowledge paper 'Processed Food and Agribusiness Opportunities for Investment in India'

jointly conducted by FICCI and KPMG, the wine industry in India has shown robust growth

potential. The Euro 46 million (Rs 309.73 crore) market has grown over 25% per annum over

the last three years. The government has introduced special wine policies to encourage grape

cultivation and wineries in the states. For example, Maharashtra has taken initiatives such as

an excise holiday for wine markets till 2011, sales tax concessions, and fixed licence fees for

10 years and creation of a wine institute and grape board for quality control.

The industry is estimated to report a 60% CAGR over financial years 2006-2010 and 24%

CAGR over the financial year 2010-15, to Euro 355 million (Rs 2390.3,2 crore) and Euro1.06

billion (Rs 7,148.8 crore) respectively.

In the recent past, the sector has attracted a lot of interest in investment in India. While

foreign companies are trying to tap the growing Indian wine market, a leading liquor group in

India, the UB Group, is planning to launch its wines in overseas markets like the UK, France,

Australia and New Zealand. Key players in the Indian wine industry are Flamingo Wines,

Grover, Indage, Mandala Valley, ND Wines, Renaissance Wines, Sankalp Wines, Sula,

Vinicola and Vintage Wines.

India is also one of the world's fastest-growing beer markets with per capita consumption

rising from a very low base. Favourable demographics, rapid economic growth, rising

disposable incomes and increasing social acceptance of alcohol consumption are key growth

drivers. The Indian beer market is poised to grow at a 14.3 % CAGR over the next three

years. The supply side is highly consolidated with United Breweries and SABMiller being the

dominant players. In keeping with Indian consumer tastes, about 61% of the beer consumed

in India is 'strong beer', i.e. beer with alcohol content above 5%. Mild beer accounts for the

remaining 39%. The strong beer segment is also the faster growing of the two and this is

likely to continue, in keeping with Indian tastes.

Some major players in Indian beer industry are Mohan Meakin (Golden Eagle brand),

SABMiller (Haywards, Royal Challenge Premium and Knock Out brands) and United

Breweries (Kingfisher Premium, Kingfisher Strong, Zingaro and Sandpiper brands).



Non-Alcoholic Beverages: -

Non-alcoholic beverages are broadly classified into carbonated drinks, non-carbonated drinks

and hot beverages such as health drinks, tea and coffee. The non-carbonated segment is

estimated at $155 million (Rs 785 crore) out of which fruit juices and fruit-based drinks

account for $60 million (Rs 303.8crore). The market size of organised carbonated drinks is

estimated at $119 million (Rs 602.68 crore) whereas the hot beverages market is at US $333

million (Rs1686.49crore), according to a recent report “The Indian Food Industry

Opportunities Abound” conducted by the Federation of Indian Chambers of Commerce and

Industry (FICCI) in association with Technopak. According to the report, the Indian market

for functional beverages was valued at $111.45 million (Rs 564.44 crore) as of 2007 and is

expected to reach a value of $345 million (Rs 1747.26 crore) in the year 2014. Functional

beverages are primarily classified into sports drinks, energy drinks, fortified fruit juices, and

soya enhanced beverages.

In this sector enhanced fruit beverages would remain the fastest growing segment and the

prime revenue earner during the Period 2008-2014, the report pointed out.

The soft drinks industry is the third largest packaged food industry after tea and biscuits in

India. The soft drinks industry's total export earnings are estimated to be over Euro 1250

million (Rs 8416.63 crore) per annum, according to Cygnus Agro Processed Food. Beverages

such as colas, lemonade, squash and fruit punch are among the most common types of soft

drinks. There are more than 100 plants across India. These provide direct or indirect

employment to over 1, 25,000 employees and contribute over Euro 215 million annually to

excise duty, sales tax and other related taxes.

In India, consumption of soft drinks is higher in the urban areas than in the rural areas,

however, this is slowly changing, a FICCI-KPMG report says. It is learnt that convenience

and natural taste together with health-consciousness has played an important role in the

growth of packaged fruit juices. The fruit drink market has grown at 20-25%, of this the

exotic fruit juices segment has grown at 40% last year. Cola sales have fallen dramatically

after health concerns and this seem to have benefited the fruit beverage industry. Tetra Packs

have offered a solution to provide fruit juice practically fresh and preservative free. These

factors have resulted in an increased consumption of juices. Industry estimates state a 25%

compounded annual growth in the juices segment in between 2007-10.



Hot beverages include health drinks such as white beverages (Horlicks, Complan etc) and

brown beverages (E.g.: ‘Boost’) in addition to usual tea and coffee.

The total size of this market is estimated at US$ 333 million by value and 85,000

tonnes by volume. White beverages account for 65% of the market and brown beverages

constitute the remaining 35%. India is the largest producer of tea in the world accounting for

28 per cent of the total global production, at 857 million kgs. Tea production in India has

been growing at 1.2% per annum and India is the fourth largest exporter of tea in the world

with estimated exports of US$ 5 million in 2002-03. India is also the sixth largest producer of

coffee accounting for 4.5% of the total production in the world. Nearly 75% of India’s

production is exported and coffee exports stood at US$ 5.2 million in 2005-06. Apart from

the major tea players in the country like Brooke Bond, Lipton, Tata tea to name a few, now

Metro Cash and Carry India, the international leader in self-service wholesale, is also offering

its range of premium teabags under its H-Line and HORECA select brands to cater to the

table and kitchen needs of the hospitality industry.

Popular flavours in tea are - Cardamom, Lemon, Earl Grey, English breakfast,

Masala, Ginger, Darjeeling, Assam Tea and Green Tea. With increasing awareness about the

health benefits of tea in terms of its anti-oxidant qualities, consumption of various varieties of

tea is expected to increase even more.

India is the sixth prime producer of coffee in the world after Brazil, Vietnam,

Columbia, Indonesia and Ethiopia. The country accounts for around 4.5% of the global coffee

production. Much of all production takes place in the southern states of the country in hilly

regions of Karnataka, Andhra Pradesh, Orissa and North Eastern region (Assam, Nagaland

and Arunachal Pradesh. India is famed for its Monsoon Malabar variety.

Coffee is a much preferred drink in Tamil Nadu and Karnataka. Coffee bars like Cafe Coffee

Day and Barista are thronged with enthusiasm along with the traditional filter coffee serving

outlets.

As this project looks into the market of tea/coffee based beverage vending machines,

usually referred to as “Out-Of-Home (OOH)”, further studies have been restricted mainly to

non-alcoholic tea/coffee based beverages.

Companies already in food & beverages industry have taken on this market real fast, which

makes it highly competitive and rapidly growing at the same time. As the major customer

base for the companies include corporate, and various branch offices, institutes, canteens,

cafe’s, hospitals etc. market is perennial, and with extremely good growth rate.



This strategy of installing vending machines in organizations, offices, institutes etc. give

companies huge consumer base, which earlier was scattered and was being served by various

retailers and roadside “chaiwallas” with no guarantee of being served by a particular

company’s products always. By installing vending machines in offices, companies, and

institutes, food & beverage companies are consolidating their consumer base, as on an

average 2 out 4 times a consumer will consume a particular company’s product only. This

step has also helped in brand building for companies as their vending machines will

substantially increase brand visibility and brand recall of their products.

Major Companies in this market are as follows: -

- HUL

- Nestle’

- Cafe’ Coffee Day (ACBCL)

- Georgia

- Godrej

- Fresh n Honest (Barista) etc.



CHAPTER 2:

2.1 OBJECTIVE:

The main objective of this project lies in studying and understanding the market for beverage

vending machines, analysing the latest and emerging trends. This project aims at studying

marketing strategies of major players also. This is relatively a new emerging market with lot

of growth opportunities for food & beverage companies, which is why all major FMCG

players in foods and beverages business are already vying for a sizeable chunk of the market

share, few of these major players are Nestle, HUL, Georgia, CCD, Godrej etc.

This project also probes the purchase decision behaviour of corporate customers, which

forms majority of the customer base. Customer purchase behaviour analysis will provide

valuable insight to the company for deciding its sales and promotional strategy, and hence

will give it a competitive edge. This project also deals in creation of database of potential

customers for the company and in process generate sales leads and closure of deals. With

increased competition, HUL OOH division has also started focussing on institutional

customers, with special stress on schools, colleges and other educational institutes; this

project explores opportunities in this area also.

In order to simplify the project objectives, I have divided it into following sub headings: -

• Study and analysis of beverages vending solutions market.

• Sales lead generation and Management.

• Corporate customers’ purchase decision analysis.

• Exploring opportunities for vending solutions in educational institutes.



2.1.1 BRIEF OVERVIEW OF TEA A�D COFFEE MARKET:

Non-alcoholic and non-carbonated beverages market of India comprises mainly of tea and

coffee, with some other beverages like health drinks (Complan, Horlicks etc.). Overall hot

beverages market stands at US $333 million. Most of the market is captured by tea and

coffee. Geographically, tea is widely consumed in the North, East and West of India, and is

popular with a wide variety of social classes and consumer age groups. Black standard tea

constitutes nearly 80% of value sales. In 2007, tea constitutes 70% of retail volume sales,

compared to coffee and other hot drinks with 4% and 26% shares respectively. Unilever

(Brooke Bond and Lipton) is the clear leader, holding over 30% of the market share, while

Tata Tea trails it with almost 20%. The remainder of the market is far more fragmented and

shared between numerous small players. Loose tea comprises of 45% market and is a

formidable challenge to the Indian packaged tea segment, because of its lower prices.

Consumers in different parts of the country have heterogeneous taste. Dust tea is very popular

in the south. In the western states like Gujarat, good quality loose tea is preferred whereas in

Maharashtra, consumers provide a large market to packet as well as unbranded tea. The

eastern states of West Bengal and Orissa consume CTC broken. Among the northern states,

CTC fanning is liked in Rajasthan and CTC broken in others states of the North. The Central

India is predominantly a dust market.

Coffee consumption in India, by and large is an urban phenomenon with an urban and

rural divide of 71% and 29% respectively. Among the type of coffee consumed it was almost

equally divided between instant (soluble) and filter (Roast and ground) coffee, though the

proportion of instant coffee is very high in northern India.

2.1.2 VE�DI�G SOLUTIO�S MARKET:

Beverage vending solutions market in India is roughly 15 years old, which marked the entry

of Nescafe’ in the market. In next some years, other players like HUL, CCD, Barista etc.

entered in this market.

In order to have a better understanding of the vending solutions market we first need to study,

that why a vending machine is preferred by corporate houses and other institutes and

organizations.



Following are some of the reasons which are responsible for growth of this market.

• Cost savings

Each of the vended beverages contain exactly the same amount of ingredients. This

reduces the "heaped-teaspoon-effect" where your tin of ingredients can disappear oh

so quickly! It is found that the biggest saving comes from the reduction in the need for

fresh milk as the machine holds powdered milk. The powered mixes are great and can

add a really good creamy froth on beverages.

• Drink choice

Modern vending machines are not only compact but can offer 8 or more choices that

can include anything from an espresso to a Regular Tea, flavored teas cafe latte,

moccachino, chocachino, cappuccino and yes, a plain white or black coffee too.

Drinks can be selected with or without sugar and milk too, allowing an incredible

choice of beverages. It's great to offer clients and staff real choices.

• Convenience

There is no waiting for the kettle to boil when you have a vending machine. It remains

on and ready for the moment you press the button. So be it late in night or early in the

morning, it can vend a hot cup of beverage anytime and also fast. This also adds value

in the office environment where getting a quick cup of tea/coffee, means exactly that.

• Hygiene

As the vending machine holds all the ingredients inside airtight canisters, there are no

messy containers left out on kitchen or pause area tables to attract ants or

cockroaches. The machines have automatic rinsing cycles and hot water is flushed

through the dispensing pipes and mixing bowls to keep them clean.

• Reliability

Modern machines are robust and will vend cup after cup without interruption. Only

thing is needed to be done is to keep them clean and empty the waste containers and

replace a few rubber seals every now and then, after all they are exposed to heat and

water.



Nestle’ being the first one in this market certainly holds a strong position, with HUL being

the second in market of vending solutions. Experts estimate vending solutions market to be

somewhere around 79000 installations so far, and with a very high growth rate. As more and

more companies are expanding their operations in the country, office spaces are increasing

greatly. Also growth in the number of educational institutes, and overall infrastructure

development (airports, complexes, malls etc.) provide immense opportunities for the vending

solutions business to grow. So far the picture for major players in vending solutions is as

follows:

Graph – 1

Nestle’ is the market leader, with around 38% market share. On second position it is HUL

OOH division with 30% market share. Then there are other players like CCD, Georgia etc.

Graph - 2

Nestle HUL CCD Georgia Godrej FHCL

No. of installations 30000 23000 12000 5000 4800 2300

0

10000

20000

30000

40000

Inst

all

ati

on

s

Vending machine installations

38%

30%

15%

7%6%

3% 1%

Market share of major players

Nestle HUL CCD Georgia Godrej FHCL Others



2.1.3 HUL OUT-OF-HOME DIVISIO�:

OOH is an arm of HUL that caters to the on-premise F&B requirements, using state-of-the-

art vending machines, with branded product mixes enabling people to sip their favourite

beverages when outside the comfort of their homes. So whether one is at work, or at mall /

multiplex, or in a college cafeteria, or simply waiting at the airport / railway station, they can

enjoy their favourite drink at the push of a button.

OOH division also supplies products directly to the caterers, confectionary manufacturers,

ship chandlers and others to meet their bulk requirements.

Product Portfolio:

OOH F&B services are again sub divided as vending solutions and non-vending solutions.

a) Vending Solutions:

Lipton Cardamom Tea: - A classic blend of Sri Lankan and Indian teas with natural

cardamom flavours, which is a rewarding treat with its delicious taste and cardamom aroma.

Lipton Hot Lemon Tea: - Delightfully refreshing lemon flavour- A whole new way to

experience black tea.



Malt Tea: - Lipton malt combines tea with malt to create a delicious drink, which is also full

of energy.

TajMahal Tea Bags: - The selection of the finest teas to create a robust, full bodies brew with

a lingering aroma.

Darjeeling Tea: - Considered as the “champagne of teas”.

Assam Tea: - A full body tea, which us a great combination of strength, taste and aroma.



BRU Hot Coffee: - A complete cup of hot coffee with a rich feel to keep you refreshed and

energized round the clock.

BRU Cappuccino: - Creamy, frothy and irresistible cup of coffee.

Fresh Bean Coffee: - 100% purest form of highly aromatic coffee.

Choco Almond Coffee: - Discover bliss in a tasty blend of delicious chocolate and a finest

coffee with a hint of almond. A taste exotic enough to delight connoisseurs’.

Lipton Ice lemon Tea: - Natural refreshing tea with a dash of a delicious fruit flavour. A

natural source of anti-oxidants.



BRU frapuchino: - Chocolaty and indulging frothy chilled coffee drink. The right cup to beat

the heat.

Knorr Tomato Soup: - Jitna Tasty! Utna Healthy!

b) �on-Vending Solutions:

OOH division also deals with large customers for their non-vending requirements & help

them choose from a wide basket of HUL products.

It also offer bulk packs for the factories / Caterers / Ship chandlers to provide greater value.

OOH division is currently supplying BRU instant coffee to almost all the leading

confectionary manufacturers in the country for their confectionery requirements.

Besides this OOH division also provides services to choose products from their Food or

Home & Personal care basket to gift to patrons and customers. It has supplied products like

TajMahal packet Tea, Lifebouy hand wash, Lakme skincare range etc. to pharmaceutical

companies at attractive prices for gifting it to doctors.



Services:

• Wide Coverage: - The service infrastructure of OOH covers over 300 concessionaries

across 100 plus towns with over 600 dedicated skilled technicians to facilitate 24/7

technical support and assistance.

• Strong resourcing: - Our trained and well equipped technical, sales and support teams

are fully geared to meet all your services and maintenance requirements. We also

have a wide footprint to support national deals, keeping pace with the growth

aspirations of our clients as they expand into new regions.

• World Class Research: - We have a global Unilever research centre, at Bangalore

which has world class research facilities which give us an edge in product and

technical innovation.

• Safety: - Hot water auto flush feature in machines for auto cleaning of mixing units at

regular intervals. Also temperature lock feature in machines is provided to ensure that

drinks don’t get dispensed below a minimum specified temperature.

• Hygiene: - Easily detachable machine parts to facilitate cleaning. Also the machine

has an intrusion resistant design so as to have minimum possibility of external

impurities getting inside.

• Quality: - All machines undergo strict internal quality checks and audits. All products

are microbiologically tested, and are safe for consumption.

• Consistency: - The DC motors in the machine are better suited to handle voltage

fluctuations. Patented canister design for smooth and consistent flow of premixes.

• External Audit: - For regular monitoring and better control we have engaged an

independent agency to conduct external audits and MIS reports to generate unbiased

feedback. The agency also provides elaborate demonstrations for the operators to

uplift the safety and hygiene standards at sites.



Vending Machines:

1. Fresh Bean Coffee Machine:

Features: -

• Option of 4 ingredients in the nature of coffee beans, dairy whitener, soup etc.

• Providing 10 drinks option including 6 options of fresh bean coffee.

• Dispensing rate – 2 cup/min of 100 ml.

• Temperature interlocking.

• Water Source – On-line / Bubble top.

Specifications: -

Dimensions

Height – 665 mm

Length – 410 mm

Depth – 560 mm

Weight 50 Kg

Power Supply 230 Volts/50 Hz

Absorbed Power 2000 Watts

Pre- mix canister cap. 1 Kg

Coffee Bean canister cap 1 Kg



Products : - This machine is capable of dispensing 10 beverages, with 6 fresh bean coffee

beverages. It has options of dispensing Espresso, Americano, Latte normal sugar, Latte low

sugar, Cappuccino low sugar, Cappuccino normal sugar, Cardamom tea, Tea bag tea, Black

tea, and another option of extra sugar for beverages.

2. High Speed Hot Machine:

Features: -

• Options of 5 ingredients in nature of coffee, dairy whitener, soup etc.

• Option of simultaneous dispensing of any 3 drinks.

• Option of cappuccino.

• Staggered dispensing option for dairy whitener.

• Dispensing rate – 15 cups/min. Of 100 ml each. (approx. 250 cups non-stop)

• Temperature Interlocking.

• Auto cleaning.

• Water Source – Built in tank/Online.



Specifications: -

Dimensions

Height – 890 mm

Length – 440 mm

Depth – 585 mm

Weight 60 Kg



Pre- mix canister cap. 1.2 Kg

Products: - This machine has five options along with cappuccino, it dispenses cardamom tea,

Tea bag tea, soup, and hot water for black tea.

3. �ew 4 Lane U cup Machine:

Features: -

• Option of 4 ingredients in nature of coffee, tea, soup etc.

• Staggered dispensing option for tea bag.

• Temperature interlocking.

• Auto cleaning.



• Water Source – Bubble top/Online.

Specifications: -

Dimensions

Height – 650 mm

Length – 325 mm

Depth – 590 mm

Weight 25 Kg



Pre- mix canister cap. 1 Kg

Products: - This machine can be used to dispense four beverages, in terms of coffee, tea bag

tea, black tea, and any other hot beverage of choice e.g. soup, cardamom tea etc. This

machine has also facility of half cup dispensing option, so as to control wastage.

4. Smart Card Machine:

Features: -

• Option of 4 ingredients in nature of coffee, tea, soup etc.

• Post or Pre – paid option through smart card.

• Option of consumption data downloading to PC for MIS processing.



• Temperature Interlocking.

• Staggered dispensing option for tea bag.

• Auto cleaning.

• Water Source – Built-in tank/bubble top.

Specifications: -

Dimensions

Height – 645 mm

Length – 445 mm

Depth – 545mm

Weight 35 Kg



Pre- mix canister cap. 1.2 Kg

Products: - This machine is specifically designed for educational institutes and canteens

where students and employees are provided with smart card facility, post or pre-paid, as per

their requirements. This machine can dispense four beverages, usual tea, coffee, and any

other two hot beverages of choice.

5. Lipton Ice Tea Machine:



Features: -

• Option of 2 ingredients in nature of ice tea and cold coffee.

• Dispensing rate:

- 3 cups/min (200 ml each)

- Approx 200 cups non-stop.

• Auto Cleaning.

• Water Source – Online/Bubble top.

Specifications: -

Dimensions

Height – 790 mm

Length – 360 mm

Depth – 780 mm

Weight 70 Kg



Initial cooling time 4 Hrs.

Products: - This machine dispenses refreshing cool drinks to chill the summer heat.

Consumers can enjoy Lipton hot lemon or take fresh sip of BRU frapuchino.

A Lipton Vending Machine is the most advanced of its kind. Features like Microprocessor

controlled water temperature, inbuilt Digital Counter, Hardware Lock and Auto-Flush system

helps to maintain a low failure rate. It is also hygienic and insect proof, which also

contributes to its durability. Flexibility in cup offerings – full and half; is another attribute

that makes the Lipton Vending Machine stand out as the most convenient vending machine.

The technologically superior equipment has been put through intense stress tests so that it can

withstand the demanding local market.

Lipton Vending Machine is fitted with any of four different types of filters: - single,

double, triple and resin filter. This makes sure that the best and safest quality of water goes

into the vended Lipton cup. The filter thus enhances the quality of water, taste of the

beverage and also increases equipment life.



2.1.4 �ESTLÉ OUT-OF-HOME DIVISIO�:

Nestle’ is market leader in beverage vending solutions market with 38% market share. It has

following product portfolio in the market: -

TEA

Nestea tea bags, Everyday instant tea premix ( cardamom flavor), Everyday instant tea premix (plain

tea), Nestea lemon tea, Everyday dairy whitener, Everyday sugar free dairy whitener.

COFFEE

Nescafe’ coffee premix, Nescafe’ low sugar, Cappuccino & Mocchacino premixes.

SOUP

Maggi tomato Soup.

2.1.5 COMPARATIVE STUDY OF �ESTLE A�D HUL PRODUCTS:

• �estle’ Product prices:

Product �ame Rate Specification

Nescafe Coffee Premix 185.00 1 Kg

Nescafe Low Sugar Premix 200.00 1 Kg

Nescafe Classic coffee 535.00 Per 500 gm

Everyday Whitener Premix 112.00 1 Kg

Everyday Dairy Whitener Poly 180.00 1 Kg

Badam Milk Premix 220.00 1 Kg

Nestea Lemon / Peach Premix 98.00 Per 500 gm



Nestea Cardamom Tea Premix 190.00 1 Kg

Maggie Hot Cup Soup Tomato 375.00 1 Kg

Tea Bags 0.70 Per Bag

Creamer 3Gm 101.83 Per Case

Paper cup 150 ml 0.45 Per cup

Plastic cup 150 ml 0.50 Per cup

Sugar Powder 43.50 1 Kg

Sugar Cube [Economy Pack] 42.00 1 Kg

Table - 2

• Lipton Product prices:

Product name Rate (Rs.) Specification

TajMahal Tea Bags 0.76 Per bag

Lipton Dairy whitener Normal 130 1 Kg

Lipton Dairy Whitener without

Sugar

230 1 Kg

Lipton Dairy Whitener Diet 225 1 Kg

Lipton Premium Cardamom Tea 210 1 Kg

Lipton Hot Lemon Tea 170 1 Kg

BRU Coffee Regular 190 1 Kg

BRU Coffee Flavoured

( Chocó Almond )

195 1 Kg

BRU Coffee Diet 280 1 Kg

Knorr Tomato soup 400 1 Kg

Regular paper Cups 0.50 Per cup

Lipton plastic cups 0.55 Per cup

Table - 3



On analysis of the quoted prices of Nestle and HUL products it was found that, Nestle has

smartly put prices of basic and major products like dairy whitener, regular coffee, tea bags,

cups etc. low as compared to HUL, and that too with more room for negotiations as learned

from market experience. This gives Nestle more space to play on price front during

negotiations with customers. More details are shown below in the bar graph

Graph – 3

Following are the details of the above shown graph:

S.No. Product HUL

Price/cup

Nestle

Price/cup

1 Dairy whitener normal 1.3 1.12

2 cardamom tea 2.63 2.37

3 coffee regular 2.38 2.31

4 tomato soup 2.41 2.2

5 tea bags 0.76 0.7

6 coffee diet 1.68 2.5

7 Dairy whitener diet 1.25 1.8

8 lemon tea 1.7 2.8

1 2 3 4 5 6 7 8

HUL 1.3 2.63 2.38 2.41 0.76 1.68 1.25 1.7

Nestle 1.12 2.37 2.31 2.2 0.7 2.5 1.8 2.8

0

0.5

1

1.5

2

2.5

3

Pri

ce/c

up

Comparative prices of HUL and Nestle



2.1.6 DISTRIBUTIO� �ETWORK OF HUL OOH DIVISIO�:

Fig.1

OOH division has a very basic distribution network, with materials coming directly from

factory to depot and from there to distributors. From distributors it directly goes to customers.

Haryana region has 16 distributors, with service part, taken care by Eureka Forbes for all

customers.

As far as sales lead generation and acquisition of accounts is concerned, that is done

by HUL OOH division’s personnel, and later those accounts are allotted to distributors

depending on their size and capability of handling an account. Then distributor’s technician

team would install the machine.

On an average per month a distributor sells 5-6 tonnes of material, the largest distributor in

the region has a sale of 15-18 tonnes of premix. On an average a distributor has 8% to 12%

margin in products given by the company.

FACTORY

DEPOT DEPOT

Distributor Distributor Distributor Distributor

Customer Customer Customer Customer



2.2 SALES LEAD GE�ERATIO� A�D MA�AGEME�T:

Sales lead generation through cold calling and generating market information was a major

part of my project. All of the interns were allotted different regions where they have to

generate sales lead. Before this a brief overview of the industry, market scenario,

competitors, prices etc. was given by the industry guide. On an average I had to do around 10

cold callings in a day. These sales lead were initially forwarded to prospective officers, who

then would follow up on the leads, although after a week of initial study of the market, sales

lead generation as well as their follow up, meeting with the customers and subsequent closure

of the deals was handled independently by interns. Overall I visited more than 350

prospective client locations.

Sales lead generation and subsequent closure of deals are done in following three steps: -

1. Cold calling

2. Meeting respective administration/human resource heads & Negotiations

3. Installation of Lipton vending machine

The task of installing a vending machine gets accomplished at times in one

meeting only otherwise it takes on an average four to five rounds of negotiations. The

respective company representative is made acquainted with the benefit; his organization will

get with the installation of Lipton vending machines. For this, a comprehensive cost-benefit

analysis has to be presented to him to convert the prospect into key account of HUL.

Once an order is placed, the Lipton crew along with the distributor installs the Lipton

Vending Machine. Proper and regular technical support is provided for machine

management. The Lipton team also trains respective organization’s staff for a smooth

operation of the Lipton Vending Machine, which will help maximize the overall experience

of the machine. The installation process is divided into 5 stages:

1) Pre-delivery inspection at the establishment by the manufacturer’s technician.

2) Pre-installation Survey at the establishment by the installation crew. The crew shall

check the location for Water Source, Electrical Wiring and Fittings, Earthing, Tank

and machine placement- accordingly an estimation of cost shall be provided.



3) All electrical, plumbing and water requirement are addressed before actual

installation.

4) After all the necessary checks are made, qualified technicians install the Lipton

Vending Machine.

5) Training of the machine handling personnel to ensure smooth functioning and easy

daily maintenance of the Lipton Vending Machine.

Price plays a major role in decision making process for any customer, who is ordering a

vending machine for its organization, and this prompted me to formulate a comprehensive

cost sheet comparison between Pantry and vending machines, this will give a hands on

information to sales personnel in showing the cost benefit of vending machines over pantry

system of an organization.

2.2.1 COST COMPARISO� OF VE�DI�G MACHI�ES V/S PA�TRY:

In order to make a valid point in favour of vending machines for customers, a cost-benefit

analysis has to be done for them, which could actually show them that how this offer is more

economical to their organizations. A similar cost – benefit analysis is shown below: -

S.�o. �o. of

employees

Overall daily

consumption

(no. of cups)

daily

consumption

Of tea

(no. of cups)

daily

consumption

of coffee

(no. of cups)

Monthly

Cost in

pantry

(Rs.)

Monthly

Cost in

vending

machine

(Rs.)

Rent

(Rs.)

Total billing

in vending

machine

(Rs.)

1. 20 - 40 60 35 25 5750 3246.25

800 4248.75

2. 50 - 100 170 100 70 16250 9192.5

800 10195

3. 100 - 200 300 170 130 29000 16262.5

0 16465

4. 200 - 400 600 350 250 57500 32462.5

0 32665

5. 500 - 1000 1000 600 400 95000 54000

0 54202.5

6. 1500 - 3000 3500 2000 1500 337500 189625

0 189827.5

Table – 4



As clearly shown in the above table, cost benefit for the organizations is quantified in terms

of the no. of employees in the organization, which gives us approximate daily consumption of

the beverages in the company. As most of the companies and organizations outsource pantry

to a third party, I have taken in the price of per cup beverage usually charged by these pantry

owners.

Following is one example of the calculation for the above results: -

Cost per cup of tea charged by a canteen or pantry = Rs. 3/-

Cost per cup of regular coffee charged by a canteen or pantry = Rs. 5/-

Cost / cup of tea bag tea, from Lipton vending machine = Rs. 2.06/-

Cost / cup of regular BRU coffee from Lipton vending machine = Rs. 2.31/-

Now, for any Lipton vending machine maximum power absorption is 2500 watts, assuming

that an office or an organization usually opens for 9 hours a day. Power cost of a vending

machine can be calculated as follows: -

Commercial rate for 1 unit of electricity = Rs. 9/- per KWH

Power consumption by a Lipton vending machine = 2500 watts * 9 hrs /day = Rs. 22.5/day

As per the company policy, a customer has to pay a monthly rent for the machine, which is

given below:

• 2 and 3 lanes vending machines rent = Rs. 800/- per month

• 4 and 6 lanes vending machines rent = Rs. 1400/- per month

In case monthly consumption of pre-mixes of an organization, equals or exceeds 70 Kgs.

They are exempted from paying any rent.

For convenience above calculations are done for a 3 lanes vending machine.



Taking one example: -

In case of an organization with employee strength of 200 to 400 employees, on an average

daily consumption of tea/coffee is taken as 600 cups, with 2 cups/employee per day.

As in India, tea consumption on average is higher than coffee and that too especially in

northern part, the divide between tea and coffee consumption is around 60:40.

Total working days for any organization are taken on an average as 25 days.

Cost calculations for Pantry: -

Total monthly cost for tea = 350 cups * 3/- * 25 = Rs. 26,250/-

Total monthly cost for coffee = 250 cups * 5/- * 25 = Rs. 31,250/-

Overall monthly cost from pantry = Rs. 57,500/-

Cost calculations for Lipton vending machine: -

On an average, 1 Kg. of Lipton dairy whitener gives 100 cups of tea, while 1 Kg. of BRU

coffee pre-mix gives 80 cups of instant coffee therefore,

Overall monthly consumption of dairy whitener on the basis of current situation is

(350*25)/100 = 87.5 Kg.

Overall monthly consumption of BRU instant coffee pre-mix on the basis of current situation

is, (250*25)/100 = 62.5 Kg.

Since the total consumption is 150 kg. , way above 70 Kg. this organization is not charged

any rent.

Total monthly cost for tea = 350 cups * 2.06/- * 25 = Rs. 18,025/-

Total monthly cost for coffee = 250 cups * 2.31/- * 25 = Rs. 14,437.4/-

Monthly electricity bill from vending machine = 2500 watts * 9hrs * Rs.9/- = Rs. 202.5/-



Overall monthly cost from Lipton vending machine = Rs. 32,665/-

Thus from the above illustration of detailed cost comparison of pantry v/s vending machine,

customers can be easily shown the economic benefits of vending machines.

2.2.2 RESULTS OF SALES LEAD GE�ERATIO�:

As stated earlier, Sales lead generation and subsequent management of clients was done

individually by interns. I intensely covered Udyog Vihar Ph- IV & V, DLF office spaces in

Kendriya Vihar, and commercial complexes in sector 53, in Gurgaon. Apart from that as a

part of my third project objective, I covered Knowledge park institutional areas in Greater

Noida also.



2.3 RESEARCH:

2.3.1 STATEME�T OF PROBLEM:

Background to the Problem: -

Hindustan Unilever Limited is the Indian FMCG conglomerate, selling Food, Beverages,

Home and Personal Care brands in about 100 countries worldwide. Out-Of-Home (OOH) is

an arm of HUL that caters to the on-premise food & beverages requirements, using state-of-

the-art vending machines, with branded product mixes. These vending machines can be

installed at offices, commercial complex, mall / multiplex, college cafeteria, airport / railway

station, etc. So far OOH division has done more than 23000 installations spread over more

than 100 towns and catering almost 2 billion cups of beverages annually. HUL offering has

well known brands like Brooke Bond TajMahal & Lipton for tea and relatively new brands

like BRU for coffee and Knorr for soups. Thus with these products OOH provides a full

basket of offerings to its customers.

Despite of competent product offerings and having one of the wide spread distribution

networks, OOH division is a distant second to market leader Nestle’ in this segment. On top

of this, it is facing fierce competition from other big and small players, ranging from Cafe

Coffee Day (CCD) to Amazon and Barista’s Fresh & Honest.

Nestle is ruling the roost with its dominant market leadership position, and not only that,

from the market experience it was clear that they also grab more number of larger accounts

than HUL. CCD also poses a major threat to HUL’s position because of its wide acceptability

as an indigenous coffee brand, with high brand visibility and brand recall due to its nation

wide array of cafes and coffee day express kiosks. With 12000+ installations CCD is at third

position in the market.

Georgia being a Coca cola brand has a partnership agreement with McDonalds

resulting into a nationwide exclusive footprint in McDonalds restaurants, further they have

also entered into an agreement with Nirula’s fast food chain, for providing them with their

beverage vending solutions. FHCL although new in this market and having done only 5000

installations enjoy high brand loyalty, with its customers, ranging from blue chip corporate

clients like Microsoft, Google to Sabarimala Temple & Saibaba ashram.



While Godrej is relatively a smaller player its tendency towards selling of vending machines

rather than renting them makes the situation tougher for other players. With such current

market situation now, company faces following challenges.

Management challenges: -

• How to increase the customer base?

• How to further strengthen its Brand image?

• What steps should be taken to gain a competitive edge?

In order to find out answers to these questions, market research was conducted with the

objective of understanding customers’ purchase decision process and factors that affects her

decision. Also what is the perception of customers, as far as major beverage brands are

concerned.

Market Research: -

This is essentially an institutional or B2B market, where a company’s customers are

HR/Admin. Managers, Purchase officers, Cafe managers, and Canteen /cafeteria owners.

These are the people who have the authority to make decision on behalf of company’s

employees, institute’s students and faculty etc. on the basis of factors such as price, brand

image, product offering etc.

Geographical area of Research: -

The geographical area of research was taken as Udyog Vihar Ph- IV & V, DLF office spaces

in Kendriya Vihar, and commercial complexes in sector 53, in Gurgaon.

2.3.2 OBJECTIVES OF RESEARCH:

Primary Objective of Research: -

• In order to better understand their (customer) purchase behaviour this research was

carried out. It aims to find out the major factors which shapes a customer’s purchase

decision regarding a beverage vending machine, on the basis of market study and

experience of company officials following factors were researched:



Consumer (employee) preference, Overall cost/cup of a beverage, Brand image of the

service provider, ease of operation, After sales-service & Maintanence.

Secondary Objective of Research: -

• To study the brand image perception of competing tea & coffee brands among

customers.

• To study the brand image perception of competing beverage vending solutions.

Outcome: -

• Identification of major factors which affect customers’ purchase decision, and

formulation of customized offerings on the basis of those factors.

• Insight into the mind of customers, as to what extent brand image matters, and how

various brands fared against each other?

• Formulation of steps to strengthen HUL’s brand image in various beverage segments

depending on the above stated outcome.

2.3.3 APPROACH TO THE PROBLEM:

The research problem basically deals with puchase behaviour analysis of customers’ for a

beverages vending solution. Since the problem is well defined we need not perform

exploratory research instead conclusive research would be a better technique as it would

allow us to perform a survey for getting deep insights about their purchase behaviour

analysis. Thus for these problems descriptive research will be used. It will be further utilized

to reduce the number of factors or characteristics which influenced purchase behaviour. The

survey would provide with proper and reliable primary data.

Assumptions: -

Dependent Variable: Purchase decision

Independent variables: Consumer (employee) preference, Overall cost/cup of a beverage,

Brand image of the service provider, ease of operation, After sales-service, & Maintanence.



Research design: -

The field-work was carried out in a planned and systematic way in which the first step was to

determine the information that was needed to carry out the Desciptive Research.

Information �eeded: -

Customers : -

As far as purchase decision for a beverage vending machine is concerned, information

regarding the authority responsible for the decision making, no. of employees, wheather any

machine is already installed or not, per day consumption, type of vending machine installed,

etc. all this information was gathered so as to get a better understanding of the market

practices, and extraction of major factors which can be responsible for purchase decision of

customer.

2.3.4 QUESTIO��AIRE DEVELOPME�T:

On the basis of the above gathered information, factors were decided which might influence a

customers’ purchase decision. Before starting the full scale survey a pilot survey or pre-

testing was also conducted.

Pre Testing: -

A pretest was conducted on a sample of 10 customers to test the suitability of the questions,

and their effectiveness in order to extract required factors. Also this test was done to find out

the comfort and accepance level of customers with the questionnaire. This lead to the

modification in some of the questions and elimination of some irrelevant ones.

Target Population: -

Primarily focus is on Offices spanning over different industries like Banking ,software,

consultancy, Manufacturing, BPO,export houses etc. consuming Tea /coffee during their

office hours.



2.3.5 SAMPLE DESIG� PROCESS: -

Sampling Frame: -

As explained earlier, our customer base comprises of HR/admin. managers of coporates,

purchase officers, cafe managers etc. Thus sampling frame was taken so as to cover this

population as much as possible, also this process was done in continuation with sales lead

generation for the company, in order to find out any prospective client for the company. This

research was done in three phases each covering one region.

1. Udyog Vihar Phase – IV & V,

2. Kendriya Vihar, DLF office spaces,

3. Commercial complexes in Sector 53.

Sampling Technique: -

A mix of Cluster and Convenience sampling was used, as in case of some small

manufacturing firms in Udyog Vihar areas are not considered because of less number of

employees. Also major stress was on researching commercial complexes and corporate

offices.

Sample Size: -

A total sample size of 100 respondents was considered. The sample size was determined on

the basis of time and money constraints.

This was followed by the data collection on the field in accordance to the above mentioned

plan.

2.3.6 SCALI�G TECH�IQUE:

Scaling techniques used in this design are Interval and Ordinal scales. To understand the

most important factors influencing the purchase decision behaviour of customers,

respondents were asked to rate their choices on an interval scale of 1 to 10. Earlier in pilot

survey five point likert scale was adopted, but on pre-testing it was found that respondents

were not comfortable with the scale and also they had less range to rate their choices,

therefore a ten point interval scale was chosen for a broader array of responses.



Further for the realisation of second objective of this research, an ordinal scale is used, where

respondents are asked to rank their preferences from 1 to 5 out of given choices. Once these

responses were taken, weightages are assigned to the ranks, and a total score for each brand is

calculated to get a clear picture, of their respective brand images according to the customer.

2.3.7 A�ALYSIS METHOD:

Once the data collection was over, analysis of the data is done. As stated earlier also, this

research has two main objectives, identifying critical factors responsible for purchase

decision and finding out current status of brand image of major players in the market, as per

the customer. To evaluate the critical factors, Factor Analysis is employed using which we

get the critical factors which contribute most to purchase decision of a customer. This is done

using SPSS software. Further brand image perceptions were evaluated by assigning

weightages and calculating cummulative scores for individual brands.

2.3.8 A�ALYSIS FOR PRIMARY OBJECTIVE USI�G SPSS: -

To start with, in the beginning of the research, we had six major factors considered usually by

a customer to reach her purchase decision. However by utilizing factor analysis there has been

a reduction in the number of factors, which are most critical and immediate for HUL OOH

division to work upon and utilize them to gain competitive edge in delivering better solutions

to the customers.

Details of factor analysis: -

Results: -

On conducting factor analysis of the collected data following results were obtained: -

• KMO measure of sampling adequacy = 0.712

• Bartlett’s Test of Sphericity = 498.500 (chi-square value)

Both of these results corroborate the reliability of the data and its suitability for factor analysis,

for further details of factor analysis, please refer appendix 1.



The six factors on analysis have been further reduced to two critical components:

S. �o. Component 1 Component 2

1. Overall cost of cup/beverage Consumer Preference

2. Ease of operation Brand Image

3. Lower maintenance After Sales-service

Table – 5

As shown above in Table -1, six factors have been reduced to two critical components, each

having some individual factors clubbed under them. Component 1 has under it, overall cost of

cup/beverage, ease of operation, and lesser maintenance. Component 2, covers consumer

preferences, Brand image, and after sales-service. These two components have been renamed

incorporating all the factors under them and further analysis & interpretation is put forth:

• Component 1: This component covers overall cost and convenience factors responsible

for shaping purchase decision of customers. Thus, this component is named as

“Lifecycle Cost”.

• Component 2: This component looks into the brand perceptions, consumer preferences

and choices, and after sales support. If looked deeper into the cluster of these factors,

they are three major parts forming overall brand value of an offering. Thus this factor

can aptly be named as “Brand Value”.

From the above analysis it is very clear that, a customer weighs any offering on these two

basic components, covering all of the major factors namely, Consumer (employee)

preferences, Overall cost/cup of a beverage, Brand image of the service provider, ease of

operation, After sales-service & Maintanence.

These two components can also be classified as pre-sales and post-sales purchase decision

components, “Lifecycle Cost” would be a pre-sales purchase decision factor and

component 2, i.e. “Brand Value” would be post-sales purchase decision factor.



This market is not just about selling vending machines, but it also includes revenue

generation from the customers for a long-term basis, through sales of the pre-mixes used in

the vending machines. This makes componenet 2 even more important as it determines a

company’s capability of retaining its customers. A minimal or almost zero rent is not revenue

generator for the company, but it is the sales of pre-mixes that generates revenue.

Effectiveness of a company in delivering component 2 will decide whether a customer

experiences a post-purchase remorse or post-purchase satisfaction from the product.

Thus it can be concluded that while making a sales pitch of the product to the customer,

component 1, “Lifecycle Cost” should be highlighted, and for permanent retention of

customers continous efforts should be made on strenghtening the factors in component 2 i.e.

“Brand Value”.

Competitor analysis on basis of factor analysis: -

• Component 1:

S. �o. Component 1

“Lifecycle

Cost”

�ESTLE HUL

1. Overall cost of

cup/beverage

Competitive pricing is

done so as to stand against

smaller and low cost palyers

like Amazon, FHCL etc.

Prices are more as compared

to Nestle’ and in case of small

low cost producers, like

Amazon FHCL etc., it

is difficult to compete.

2. Ease of

operation

Not a differentiating factor HUL provides an array

of vending machines, for

special needs of customers like

Smart card operated machine,

For educational institutes like

NIIT, Educomp, etc.

These machines can be used

to download data for MIS



purposes also. These machines also

offer convenience of half and full cup.

3. Lower

maintenance

Market survey reveals that

Nestle products, are very

low

on maintanence needs.

Although not a

differentiating factor.

Can work as a differntiating factor

for HUL, as features like

Microprocessor controlled water

temperature, inbuilt Digital Counter,

Hardware Lock, Auto-Flush system

reduces maintenance.

Although now most companies follow

these standards.

Table – 6

• Component 2:

S. �o. Component 2

“Brand Value”

�ESTLE HUL

1. Consumer Preference In case of coffee, certainly, a

differentiating factor for

Nestle’ as it enjoys market

leadership and strong brand

loyalty in coffee market. But

in case of tea brands, Nestea

has a lower brand image as

compared to HUL.

HUL with its strong

brand of Taj mahal in

tea enjoys similar

position, as that of

Nestle in coffee

market. With recent

revamping of its

coffee brand BRU,

company is trying to

create strong

consumer base in

coffee market also.

2. Brand Image Nestle being one of the oldest

companies in beverages

segment, with its iconic

brand Nescafe, and with the

first mover advantage in

HUL with its Lipton

and BRU brands in

vending solutions

market enjoys limited

brand awareness as



vending solutions market

enjoys strong brand

recognition and preference

over its competitors.

It also strenghtens its brand

by regular brand

communication with its

corporate clients, in form of

e-brochures etc.

compared to Nestle’

and even CCD. Thus

this is one of the

prime area of

improvement for

OOH division.

3. After Sales-service Not a differentiating factor,

as all companies promise

regular after sales-service

support. It is the promptness

and effectiveness of service

that matters.

HUL claim to have a

strong after sales

support to its

customers, with its

fortnightly audits, and

expansive distributor

network it provides

service to its

customers. On market

survey it was found

that there is enough

room of improvement

for OOH division in

this, as this can be a

strong differentiating

factor for company.

Table – 7



2.3.9 A�ALYSIS OF SECO�DARY OBJECTIVES OF RESEARCH: -

As stated earlier secondary research objective was to gain insight in customers’ mind, and

understand their perceptions about brand image of major players in the market. For this

purpose respondents were asked to rank brands of their choice from 1 to 5, 1 being highest,

later their responses were given weights accordingly.

This objective can further be divided into three parts: -

1. Brand image of the company/product for its tea.

2. Brand image of the company/product for its coffee.

3. Brand image of the company/product for its vending machines.

The ranks from 1 to 5 were later given weights from 5 to 1 respectively, rank 1 was allotted 5

as weight, rank 2 was allotted 4, and so on. Further cumulative score for each brand for

particular question was calculated and corresponding interpretations are made.

Respondents were asked to rank major brands of tea from 1 to 5. Major players like Nestle’,

HUL’s Brooke bond TajMahal, and other players like Georgia and CCD were included, with

fifth option for any brand other than these according customer. Analysis of the collected data

is as follows:

Graph – 4

As shown above, it is very clear that HUL’s Brooke Bond TajMahal, enjoy distinct brand

leadership, when it comes to branded teas.

NestleBrooke bond

Tajmahalgeorgia CCD Others

Cumulative score 368 483 284 134 83

0

100

200

300

400

500

600

Cu

mu

. S

core

Brands (Tea)



TajMahal being an iconic brand adds great value to the OOH division’s offering. Nestle’

holds second position behind HUL, followed by Georgia and CCD. Some respondents named

other tea brands like Goodricke, Red label, Tata tea etc. among the given brand names as

their favourites.

Graph – 5

The above graph shows the percentage of respondents who ranked particular companies, no.1

in the questionnaire. 83% respondents ranked HUL’ s Brooke Bond TajMahal as their

preferred no. 1 brand of tea, as opposed to just 17% of respondents claiming Nestle’ to be

their preferred choice of brand. No other brand of tea was ranked no.1.

Graph – 6

17%

83%

0%

Brand Image (Tea)

Nestle

HUL

others

Nestle Brooke bond BRU georgia CCD

Cumulative score 449 309 266 375

0

50

100

150

200

250

300

350

400

450

500

Cu

mu

. S

core

Brands (Coffee)



The above graph shows the relative position of major coffee brands, as far as their brand

image is concerned. With clear demarcation Nestle’ enjoys leadership position when it comes

to instant coffee. Customers out and out ranked Nestle’ as their favourite, which is certainly

because of its strong hold on the Indian coffee market for so long. Nestle’ with its strong

distribution, excellent product quality, and high brand loyalty is extremely difficult

competitor to be replaced from its no. 1 position. On the second position comes CCD,

customers ranked CCD second when it comes to brands of coffee. It may look surprising

initially, but if delve further, it can be easily understood that in brewing coffee culture, CCD

has created a strong position, through its cafe all over the country. People recognize CCD as

an indigenous coffee company. And this has certainly helped CCD in capturing much

customer base in beverage vending machines market also. With its new and technologically

advanced products like fresh bean coffee machine and fresh milk coffee machines, CCD

forced market leaders like Nestle’ and HUL also to launch their own versions of these

advanced machines. In coming times CCD is certainly going to be a major threat for market

leaders. On the third position in overall ranking comes BRU, which certainly is worrying sign

for HUL, although in recent times company has revamped BRU brand in terms of its

communication. BRU has now been positioned as a brand for youth; also this communication

is made tangible by company, by launching new products like BRU cappuccino in three

different flavours. But still much ground is needed to be covered by company.

On distant fourth position is Georgia, although daughter of a strong brand like Coke, Georgia,

it seems has not been able to create enough required brand image in minds of customers.

Although brand visibility of Georgia is very good as it has a partnership agreements with

McDonalds’ and Nirula’s fast food chains. But company is not able to leverage this position.

Graph – 7

58%

9%

0%

33%

Brand Image (coffee)

Nestle HUL Georgia CCD



Above graph shows the percentage of respondents, who ranked particular coffee brand as

having no. 1 brand image. HUL’s position in coffee brands has traditionally always been 2nd

or 3rd; here this thing has come out very clearly. Merely 9% of respondents ranked HUL’s

coffee brand BRU as no.1 brand, while on the other hand Nestle’ clearly steals the show with

58% of respondents ranking it no. 1 over other brands. On the second position it is, CCD with

33% of respondents ranking it no.1.

Graph – 8

It is clear from the above graph, that Nestle the market leader, and the first mover in this

market, is enjoying clear leadership position, when it comes to brand image of vending

machines. Nescafe’ and Nestle’ vending machines were the first ones to cater to the

customers in this market. The red and black colour combination of Nescafe’ machine is easily

recognizable and with high recall. This with regular corporate communication in form of e-

brochures, and letter to the customers, Nestle’ has build a strong brand image.

On the second position comes HUL’s Lipton brand of vending machines. Although a late

entrant in the market, HUL has quickly gained ground, and stands at strong 23000 plus

installations, but still a distant second behind market leader Nestle’.

Nestle Lipton/BRU georgia CCD Others

Cumulative score 473 360 274 307 67

0

50

100

150

200

250

300

350

400

450

500

Cu

mu

. S

core

Brands (vending machines)



To gain competitive edge and leadership position, HUL OOH needs to build its brand

especially in coffee beverages against its competitors Nestle’ and CCD. With around 800

cafes’ in 108 cities all across country, 853 cafe day express kiosks and 12000 plus vending

installations, CCD has emerged as a strong competitor to major players like Nestle’ and

HUL. On distant fourth is Georgia, with other brands like fresh n honest, Amazon etc. on

fifth position as far as brand image of vending machines is concerned.

Graph – 9

The above graph clearly emphasises the strong leadership position of Nestle’, when it comes

to beverage vending solutions, with a whopping 83% respondents claiming it to be having

best brand image among all other competitors, while HUL’s Lipton and CCD were ranked

no.1 by 9% and 8% respondents respectively.

83%

9%

0%

8%

Brand image (vending machines)

Nestle HUL Georgia CCD



2.4 EXPLORI�G OPPORTU�ITIES FOR VE�DI�G SOLUTIO�S I�

EDUCATIO�AL I�STITUTES:

As a part of my project, I also studied the greater Noida region for exploring opportunities

especially in educational institutes. Greater Noida Authority has developed Knowledge Park

–I, II, III, IV & V as part of developing institutional area in Greater Noida. As of now there

are somewhere around 52 operational educational institutes in the region, further Greater

Noida authority has issued another institutional scheme for sale of large educational plots, on

15.01.09, which makes this market even more lucrative.

So far most of the educational institutes are running on the pantry system which most of the

time is outsourced to a contractor.

In terms of beverages an educational institute has the following pattern of consumption:

• For students living in Hostel during breakfast and evening snack time.

• Faculty and staff of institutes are served beverages twice a day from the institute.

• Canteen in the premises of college serves beverages on the choice of consumers, be it

students, faculty or staff.

Canteen owners are mostly using their pantry system to fulfil beverage demands of the

institutes; however a general survey of the region revealed that this trend is changing and

canteen owners understand the cost benefits of vending machines. Although their awareness

level is low as far as vending machines are concerned, since most of the colleges and

institutes are new, so are their canteen contractors.

Institutes in the region are in variety, ranging from engineering institutes to medical

colleges, management institutes, Law as well as B.Ed and M.Ed. institutes.

This brings in vast variety of students from all parts of the country, and thus demand for

various beverages like tea, coffee, and other variants is sufficient.

On an average a typical educational institute has a student strength of 400 to 500, and

accordingly faculty strength of 100 to 150. This makes the whole offering a very lucrative

one for vending machine players.



Nescafe has already started making its imprint in these institutes, with some big clients in the

form of Galgotia institute and others. Smaller players like Amazon etc. are also not behind in

this race of capturing market.



CHAPTER 3:

3.1 CO�CLUSIO�S:

On the basis of this project following conclusions are made: -

• Indian Beverages vending solutions market along with US $ 333 million hot

beverages market is expected to grow at a healthy annual rate of around 20%. As

more offices, educational institutes, and malls, are coming up, the vending solutions

market can expect good times ahead. With total number of 30,000 installations, Nestle

is the market leader in vending solutions market, with a market share of 38%, with

HUL at second position having market share of 30% and CCD at third position with

15% market share.

The Vending solutions market has witnessed tough competition in cities like Gurgaon,

Pune, and Delhi etc. with much of office space, organizational centres, and

institutional areas.

In NCR region itself HUL has somewhere around 5000 installations, and a market

share of around 20%. Here also Nestle is market leader with around 39% market

share. It can be concluded that, Nestle because of its first mover advantage and

continuous brand building initiatives has been able to secure such a strong position.

As far as HUL’s Lipton brand is concerned, it was seen that although Lipton has a

strong brand image when it comes to tea brands, but in case of vending solutions it

does not enjoy that much strong brand image.

• Research revealed some interesting facts about the customer purchase decision

behaviour. On factor analysis of collected data, six major factors were divided into

two major components. Component 1 consisting of overall cost of cup/beverage, ease

of operation, and lesser maintenance. Component 2, covers consumer preferences,

Brand image, and after sales-service. These two components have been renamed as:

Component 1: “Lifecycle Cost”

Component 2: “Brand Value”

These Components show how a customer weighs any offering of vending machines,

Component 1, “Lifecycle Cost” is mainly pre-sales concern where in the very first

meeting a customer evaluates an offer on the basis of, overall cost/cup of beverage



along with the maintenance cost and ease of operation of machine. Once these factors

are above certain criteria of customer, she will evaluate the “Brand value” of the

offering in terms of brand image of the company, consumer preferences in terms of

beverages and company, and finally after sale-service of the service provider.

• Further secondary objectives of the research were, to quantitatively evaluate the brand

image of companies for a customer. For this, specific questions were put in the

questionnaire. These questions were to be ranked and later appropriately weighed.

This analysis of collected data revealed that, in case of tea, HUL’s Brooke Bond

Lipton brand has highest brand value among customers, with Nestle on second

position. In case of Coffee, Nestle is way ahead of HUL, even CCD has a better brand

image than HUL among customers, and this can be attributed to two major factors: -

1. Nestle being the one of the oldest player in coffee market and with iconic brands

like Nescafe’ certainly has a strong brand image. This has also been strengthened over

the years by continuous brand communications also.

2. As for CCD, they are mainly known as indigenous cafe’ company and this has

certainly enhanced their brand image in coffee market.

In case of Vending machines, again Nestle has best brand image with HUL’s Lipton

and CCD being close second and third respectively.

Thus this can be concluded that HUL needs to further increase brand building efforts

for its coffee as well as vending machines brand.

• On survey of Greater Noida, it was found that market for vending machines has

immense opportunities in educational institutes, with already existing institutes as

well as new ones coming up. Company with first mover advantage in this market will

have a strong impact in long-term, as it will provide competitive edge over other

players.



3.2 RECOMME�DATIO�S:

On the basis of this project, and experience gained during this period of internship, following

are some recommendations which, if implemented can benefit the OOH division: -

Database Creation of the end customer: -

• As of now, a central database containing information like, the number of vending

machines billed, quantity of ready-mix sold to distributor etc. is regularly maintained

by the company, but a central database for the end-customer, is not maintained by the

company. This data with little details is maintained individually by distributors for the

accounts each of them is handling. It is not that, no such data made or kept by

company executives, but it is done in a very fragmented way, which at the end of the

day is of no use, as no analysis can be done with fragmented data. Thus first and

foremost a relevant database creation for the region has to be done with all basic

details about the customer like organization, concerned authority (HR/Admin.

manager) details with e-mail address and contact numbers, vending machine details if

any, no. of employees, approx. consumption etc. This database will not only provide

some relevant information about the market dynamics in terms of market share of

major players, their specific areas of operation, trends in market etc. but also provide

company sales executives as well as distributors with information of customers which

needed to be serviced and which can be contacted in future for feedbacks on service

and for further lead generation. This information will prove to be very helpful in

making strategies for future as well.

�ew working methodology for Sales force: -

• Distribution always emerges out as a key strength for any FMCG company, and more

so in case, when company is in foods and beverages market, catering primarily to

institutional and corporate customers. A far reached distribution leads to customer

convenience and hence increasing the entry barrier for the competitors. In Gurgaon

region, company has 16 distributors with no well defined territories. Account

acquisition is primarily the responsibility of company sales force and not distributor

sales force. And hence the allotment of customers to distributors is done by sales



officers of the company. Company sales force has not clearly divided the regions in

and around Gurgaon which comprises of Faridabad and Manesar as well. Immediate

step to channelize the efforts of sales force and boosting sales would be to divide the

whole market on the basis of geography and sales potential, and then allotment of

these regions among the front sales force, along with attachment of a sales officer

with particular distributors. This step would bring out following changes; firstly, there

would be required ground coverage in terms of potential customers as well as

geographically, which as of now is not being done properly. Secondly, this will bring

about the clarity in terms of targets for each of the company salesmen as well as

distributors. Thirdly, this will make it easier to check the performance of the sales

force and distributors on both sales and service front.

Route Planning: -

• In order to increase the market share in this market, a company has to gain as much

ground as possible and that too with limited workforce, and as quickly as possible. To

achieve this, proper analysis of the market is required, in terms of opportunities

available in the market. That can only be done by making a relevant and up to date

database as stated above, further this database must be used to decide the route plans

for each sales personnel. By fixing the route plans and regular updating of data, it will

be easier and reliable for the company to keep a check on the market as well as

working of its personnel. Route planning will also bring down the redundancy of

efforts by sales personnel and much ground can be covered in lesser time. To gain

positive results, this should be done in advance at the starting of the month, and

regular weekly checks should be made in order to find out any changes in the plan if

required.

Development of basic packages for different customers: -

• As pointed out in the analysis of the research, customer in this market behaves in a

certain way.

Component 1, “Lifecycle Cost” is the first one which a customer is concerned with

and further his decision is also affected by component 2 i.e. “Brand Value”. A plan

should be charted out on the basis of these findings and some other basic information,



like type of industry, size of the firm or organization, types of consumers (students,

employees, their age, preferences) etc. It will provide company with a basic offering

or package for different type of clients, in different sectors, which can be easily

customized to specific needs of a particular client.

Brand Communications: -

• HUL enjoys a strong brand image in the market as far as tea is concerned with its

brand Brooke Bond Lipton. But in case of coffee its brand BRU lacks similar

strength. This must be improved as it plays an important factor in shaping a

customer’s decision and as more and more coffee culture is brewing in the country,

especially in the northern part (South India already has more coffee drinkers than tea)

it becomes very important for the company to strengthen their coffee brand BRU.

Although in order to revamp its brand image company is already spending enough

marketing budget, to position BRU as a brand for youth, but this company effort can

only be realised for OOH division, if they capitalize on this marketing by increasing

their brand communications with their existing as well as potential customers. A good

thing here would be to follow the leader Nestle’ which is very prompt in brand

communications with its clients. They regularly keep their clients updated about new

products and developments of the company which could be beneficial for the

customer in the form of e-brochures, articles on net etc. apart from regular updating of

their website.

For sample of e-brochure please refer to appendix-4.

Enhance focus on educational institutes: -

• As a part of third objective of project, I surveyed the institutional area of Greater

Noida, and found that it provides immense opportunities for the company to grab

major market share. In order to do this OOH division has to take the first mover

advantage with the customers, as the area is relatively new in its development and

much ground is needed to be covered. Also with announcement of sale of new

institutional plots by Greater Noida authority, this region is going to be even more

lucrative for vending solutions in future.

So, without wasting any time OOH division should focus on this region, and cover as

much market as possible.



APPE�DIX - 3

Questionnaire

Name of the organisation: -

Contact Person: -

No. Of Employees: -

Tea/coffee vending machine with details: -

To what extent following factors affect/affected your purchase decision for beverage vending

machine (Rate the following on the scale of 1 to 10, 1 being lowest and 10 being highest): -

1. Consumer (employees) preferences and choices.

1 2 3 4 5 6 7 8 9 10

2. Which is more important?

a. Cost only.

b. Brand only.

c. Part brand Part cost.

3. Overall Cost per cup of a beverage incurred.

1 2 3 4 5 6 7 8 9 10



4. Brand image of the service provider (Company).

1 2 3 4 5 6 7 8 9 10

5. Ease of operation of vending machine.

1 2 3 4 5 6 7 8 9 10

6. After-sales service by the vendor.

1 2 3 4 5 6 7 8 9 10

7. Lesser maintenance.

1 2 3 4 5 6 7 8 9 10

8. The current machine vendor was the only one to approach you.

Yes / No.

(Rank the following questions from Q.9 to Q.11 on scale of 1 to 5, 1 being the highest rank

and 5 being the lowest.)

9. Which company according to you has a better brand image for its Tea?

a. Nestle.

b. Brooke Bond TajMahal.

c. Georgia.

d. CCD.

e. Any other ( )

10. Which company according to you has a better brand image for its Coffee?

a. Nestle.

b. Brooke Bond BRU.

c. Georgia.



d. CCD

e. Any other ( )

11. Which company according to you has a better brand image for its Vending machines?

a. Nestle.

b. Lipton/BRU.

c. Georgia.

d. CCD.

e. Any other ( )

12. Any other factor which influenced your purchase decision.



REFRE�CES

1. Marketing Research – Naresh Malhotra

2. Statistics – Ken Black

3. http://www.hulfnbservices.com

4. http://www.nestle.in

5. http://www.cafecoffeeday.com

6. http://www.fresh-honest.com

7. http://www.godrejcp.com

8. http://www.ibef.org

9. http://www.answers.com

10. http://www.teaboard.gov.in

11. http://www.indiacoffee.org

12. http://www.scribd.com

Documents

HUL-OOH Interns Report