CUBO Ice Tea

Anubha Garg

(12BSPHH010168)

Kashish Manchanda (12BSPHH010451) Palak Bhel Pooja Patel (12BSPHH010669) (12BSPHH010705)

The Product
Iced Tea is a chilled drink of sweetened tea without milk, typically flavoured with lemon. This form of tea has proven to be one of the healthiest drinks available. Iced tea is rich in vitamins, minerals and anti-oxidants that keep a check on calories. Iced tea not only refreshes you but research has found that it has immense health benefits. Iced tea has proven to be one of the healthiest drinks available. Not only does it revive you on a hot day, but also add to keeping you healthy. Improving health is a multifaceted process.

The Indian Iced tea Market

The Indian Tea Market is one of the largest markets in the world. According to an Assocham study (2013), India is worlds largest consumer, second largest producer and fourth largest exporter of tea and accounts for nearly 30 per cent of global output. Despite having such high demand, things are more difficult with most of the branded tea retail market in India being highly unorganized and being catered through 2.5 million grocery/kirana outlets. The segmentation under Iced Tea Market is as follows: 1. RTD- Ready to drink 2. Powder based 3. Syrup Based This segment is still at a very nascent stage as the concept of Ice tea is new to Indians. Hot is what symbolises tea in India. Indians from ages are habituated to have tea as a hot beverage.

Changing Consumer Preferences

The key driving factor of ice tea in the Indian market is growing numbers of busy and health conscious consumers. As compared to ice coffee and other hot beverages, ice tea has comparatively low caffeine content. People who like to watch and count calories also tend to enjoy it over other beverages. Also, while tea drinking is an entrenched habit among the Indian consumers, the youth in India are looking at more contemporary formats and healthy offerings. Ice Tea ticks both the boxes and it can get the youth into the tea category.

Changing Lifestyles:
Since more and more Indians are switching towards having a western lifestyle, Ready to eat/drink beverages/food form an integral part of their lives. Hence, this can prove to be a driver to the growth of Iced Tea segment.

Urban Vs Rural: The Gap

As more number of people in India still live in Villages, (70 % of Indias population lives in villages), the product such as Iced Tea, targeted at the urban hedonic consumer, might face serious problems if steps to appeal the rural masses are not taken.

Target market
The target segment of Iced Tea makers in India comprises of young, busy and health conscious consumers, typically in the age range of 16-29 years. According to IKON Marketing Consultants, the vending ice tea market merely around Rs 32 crore.

Competitors
1. Nestea- Joint venture between coca-cola and nestle Nestea Peach Nestea Lemon

Nestea Apple 2. Lipton Hindustan Unilever Limited (HUL) and PepsiCo India under a 50:50 joint venture have launched this product since 2011. Green Tea in Mint & Lemon flavour Black Tea in Lemon flavour

3. Tata Tion- Iced tea from tata

Price
We price the ice tea bottle at Rs. 35. While pricing the product, the target group will be mid to high income group segment keeping in mind the competitors pricing. There will be different prices for different sizes of the product.

Distribution Channel
1. We are planning to launch CUBO ICE TEA product in metro cities first and then after seeing the scope of growth in other cities we will enter later. We are targeting metro cities like: Delhi Mumbai Bangalore 2. We will have 3 regional offices in respective cities.

3. Our production unit will be in Delhi from their product will be transferred to regional sales offices. 4. These sales offices will have their own vans from there the product will be distributed to small retailers.

Outbound logistics

Packaging

Transportation

Wholesaler

Grocery Store

Customer

Distribution strategy: Intensive Cubo tea Distribution Channel

Products are sent to the C&F Agents of the company from its Manufacturing Unit. Later it flows from the Manufacturing Unit to Distributor and Super Stockist. The Distributor is responsible to manage the availability of products in his area Super Stockist supplies the goods to the Re-Distributor who is in charge of managing the availability outside the region of the Distributor. The Distributor and Re-Distributor, then supplies the products to Wholesaler and Retail in their respective region or area.

Selection of Distributors
The Criteria followed are: 1. Capital Investment Depends on both present and future capital investments by distributors Amount vary from Area-wise to marketwise 2. Relevant experience Prior experience in FMCG sector is preferred to save on training expenses Distributor should not be dealing in Competitors product Should handle entire range of products (Both fast and slow moving SKUs) 3. Infrastructure Godowns / Storage space with appropriate refrigeration as per product needs Delivery vehicles Salesmen 4. Companys discretion based on markets served .

Terms of Operations
Team will visit the retailers once in a week on different days. Sales force is complimented by a weekly visit to the district by the sales executive of the company Idea is to supplement the lags in the distribution by wholesaler and in certain specific cases to push extra stock in the market.

Company policies
1. Credit Policy
Distributors are termed as Cash Distributors because the company charges the distributors before the stock is delivered Company has connected the distributor online and the transactions happen online The distributor sells goods on credit; the period of credit ranges from 1-2 week The wholesaler allows discount of 1% on cash payment (policy followed by the wholesaler).

2. Stock Policy As per the company regulations the distributor is supposed to maintain a stock of 3 weeks which in monetary terms equals to Rs. 30 lakh for the distributor. Stock is formalized by the company; the dealer can negotiate on 3-4 end days, the stock policy is formed for the month Distributor to push in slow moving SKUs clubs them with fast moving SKUs for the retailers

Company DUMPS significantly on the distributors; the distributor has to manage the supply by the company.

3. Lead period
Lead periods in providing stocks to the dealers differs from the SKU and quantity ordered Some SKUs like dairy products are delivered correspondingly with taking order but some are sent from the warehouses A higher quantity ordered has to be replenished from the warehouse

4. Return Policy
Company follows a policy of return when the product has past its expiry date, damaged or has a defect Replenishment is done with cash and happens at the end of every six months.

5. Return on Investment
Company does not give any guarantee to the distributor.

6. Storage policy
Distributor maintains Cold Storages and Deep Freezers for the storage of the products Distributor has to bear all expenses pertaining to Infrastructure requirements

7. Sales Force
The remuneration and all other expenses for sales force are borne by the distributor.

Incentives - Schemes
Specific schemes which spread over 2 ~ 3 months Encourage specific target achievements Targets are given as indexed growth rates based on weights For e.g. 10% growth for distributor having sales of Rs. 20000 will different from distributor having sales of Rs. 1 lakh Prizes in form of additional margins Certificate of acknowledgement for achieving the target.

Target setting
Target setting is a result of negotiation between Distributor and Company Mid month targets for next month are set around 5th-10th of that month Targets are set for Sales officers, ASMs and branch managers which are driven down the hierarchy Distributors can negotiate this targets in range of +/-10% by end of month Confirmed sales are set as weekly targets.

Training
1. 2. 3. 4. 5. Training programs for C&F agents which includes modules on: Nestle Quality System Good Warehousing Practices (GWP) Good Distribution Practices Major aspects of the training program are; Stacking as per norms Good Warehousing practices Accounting Handling of Bad goods Temperature control for chocolates and dairy products .

Logistics Structure
Logistics comprise of Road Transportation through Container trucks Distribution from point of Distributor warehouse to Retailer shops / Modern trade shops is handled by Distributor Distributor has fleet of mix of transport vehicles right from refrigerated vans to small tempos to supply to Pan shops Company is connected to Distributor / Super Stockist through SAP for online order booking and processing Stock in Transit module is installed at Distributors network systems or tracking the supply of goods

Promotions
1. Personal selling with the help of sales representatives, visiting dealers at the grocery store. 2. Sales promotion activities such as discount coupons, scratch cards, samples, etc. 3. Online advertising using facebook page and YouTube add. 4. Outdoor advertising using billboards. 5. Putting up stalls in front of trade fairs, exhibitions and grocery stores. 6. Distributing free samples on events like college fests 7. Point of purchase advertising using display on refrigerators.

Margins
We take a gross profit of 70%. And give 18% margin to whole sellers and 12% margin to retailers.

Conclusion
Cubo ice tea is a product targeted towards the young, health conscious and the persons whose age is between 16-29 years. We follow competitive pricing wherein we price our product based on what the competitors price. The major competitors are Nestle, Lipton and Tata Tion. We are focusing on the major cities like Delhi, Mumbai and Bangalore and the main distribution happens from Delhi. The selection of distributors is based on Capital Investment, Relevant experience and infrastructure. The company has various policies like credit, lead, stock, return, etc and the company and their employees have to follow it. The target is set as a result of the negation between the distributors and the company. The promotions are done through Personal Selling, Sales Promotion, advertising, etc.