OPERATIONS MANAGEMENT

PROJECT

New Product Development

in Beverages Industry

SUBMITTED TO: SUBMITTED BY:

Prof. AMIT KUMAR GUPTA
GROUP 1 Section B
Kaustav Mohpatra (EM01)
Pritam Khan (61)
Raj Singh Bhati (62)
Saloni Bhatia (71)
 INDUSTRY ANALYSIS

Beverages Market in India

Alcoholics Drinks Soft Drinks

Juices
Bottled Sports /
Carbonate
Beer Spirits Wine
Water d Drinks
Energy
Drinks
 ABOUT FV AGRO PVT LTD
Fruit juice & fruit drinks.

Unique position with its advanced technology to manufacture a Juice that

has many different flavours, for customer satisfaction.

An environment-friendly.

Headquarter in Gurugram and branches in major Metros.

Mission:

To be a leading producer of fruit juices based on dedication to nature, corporate

and process hygiene, dynamic leadership and commitment to our partners and
stakeholders.

Vision:

To be Indias Premier Fruit Juice Company, offering nutritious & superior quality
tasting drinks to its consumers. By 2020 we aim to achieve 30% of Market Share,
and while doing it we would be the best in terms of consumer value, customer
service, employee talent, and consistent and predictable growth.

Why this product:

- India currently produces about 50 million tonnes of fruits, which is about

9% of the worlds production of fruits.
- India has a strong raw material base.
- Only about 2 percent of the fruits and vegetables in India are processed
Decision Statement (Research Question)

Whether seasons have different preferences of beverages?

Environment: We have different seasons like summer, winter, Monsoon etc.

Season for research taken:

Summer (April July), winter (Dec Feb) and Monsoon (Aug Oct)

Different type of drinks taken for research are: Tea, Coffee, cold Drink & Lemon
Water

Population: Class size is the population in study having total size of 51

Sample Size: Decided by the group as per interaction and available options in this
research it is taken as 12.

Objective of the Research:

To align choice of the drinks with the seasons and check whether beverages have
same preference in different seasons or not.

Sample Question: What is the best preferred beverages during different seasons
(5- Most preferred 1- Not preferred)

Hypothesis:

H0: All the beverages will have equal preferences in summer among respondents

H1: At least one of the beverages will have different preference in summer among
respondents

Analysis through responses in Summer

Summer Response_Positive Frame

6
5
4
3
2
1
0
Res 1 Res 2 Res 3 Res 4 Res 5 Res 6 Res 7 Res 8 Res 9 Res 10 Res 11 Res 12

Tea Coffee Cold Drink Lemon Water

Chart 1: Response trend for Beverages preference in summer

Cold Lemon
Summer Tea Coffee Drink Water

Res 1 3 2 1 5

Res 2 2 3 5 1

Res 3 3 2 5 1
Res 4 1 2 5 4

Res 5 2 3 4 5

Res 6 3 1 4 5

Res 7 2 3 5 4

Res 8 1 3 5 4

Res 9 1 2 5 4

Res 10 3 2 1 5

Res 11 1 2 5 4

Res 12 3 2 4 5

Avg 2.08 2.25 4.08 3.92

Std Dev 0.90 0.62 1.51 1.44

n 12 12 12 12

CI+ 2.59 2.60 4.93 4.73

CI- 1.57 1.90 3.23 3.10

No of
Res 3 7 3 5

% Data 25% 58% 25% 42%

Test the hypothesis for summer:

Tea & Coffee

Confidence interval range for Tea is from 1.57 to 2.59 whereas mean value of
Coffee preference is 2.25 which is lying within the 95% confidence interval of Tea
responses.

Tea & Cold Drink

Confidence interval range for Tea is from 1.57 to 2.59 whereas mean value of
Cold Drink preference is 4.08 which is notlying within the 95% confidence interval
of Tea responses.

Tea & Lemon Water

Confidence interval range for Tea is from 1.57 to 2.59 whereas mean value of
Lemon Water preference is 3.92 which is notlying within the 95% confidence
interval of Tea responses.

Coffee & Cold Drink

Confidence interval range for Coffee is from 1.90 to 2.60 whereas mean value of
Cold Drink preference is 4.08 which is notlying within the 95% confidence interval
of Coffee responses.

Coffee & Lemon Water

Confidence interval range for Coffee is from 1.90 to 2.60 whereas mean value of
Lemon Water preference is 3.92 which is not lying within the 95% confidence
interval of Coffee responses.

Cold Drink & Lemon Water

Confidence interval range for Cold Drink is from 3.23 to 4.93 whereas mean value
of Coffee preference is 3.92 which is lying within the 95% confidence interval of
Tea responses.

Results shows that we should reject the Null hypothesis.

Analysis through responses in Winter

Winter Response_Positive Frame

6

0
Res 1 Res 2 Res 3 Res 4 Res 5 Res 6 Res 7 Res 8 Res 9 Res 10 Res 11 Res 12

Tea Coffee Cold Drink Lemon Water

Chart 2: Response trend for Beverages preference in winter

Cold Lemon
Winter Tea Coffee Drink Water

Res 1 5 3 1 2

Res 2 5 3 4 2

Res 3 3 5 2 1

Res 4 5 4 3 2

Res 5 4 3 2 1

Res 6 3 2 1 5

Res 7 4 5 3 2

Res 8 5 3 2 1

Res 9 3 5 2 1

Res 10 5 3 2 1
Res 11 3 4 5 1

Res 12 2 5 4 3

Avg
Score 3.92 3.75 2.58 1.83

Std
Dev 1.08 1.06 1.24 1.19

n 12 12 12 12

CI+ 4.53 4.35 3.28 2.51

CI- 3.30 3.15 1.88 1.16

No of
Res 2 2 7 4

% Data 17% 17% 58% 33%

Test the hypothesis for winter:

Tea & Coffee

Confidence interval range for Tea is from 3.30 to 4.53 whereas mean value of
Coffee preference is 3.75 which is lying within the 95% confidence interval of Tea
responses.

Tea & Cold Drink

Confidence interval range for Tea is from 3.30 to 4.53 whereas mean value of
Cold Drink preference is 1.88 which is not lying within the 95% confidence interval
of Tea responses.

Tea & Lemon Water

Confidence interval range for Tea is from 3.30 to 4.53 whereas mean value of
Lemon Water preference is 1.83 which is not lying within the 95% confidence
interval of Tea responses.

Coffee & Cold Drink

Confidence interval range for Coffee is from 3.15 to 4.35 whereas mean value of
Cold Drink preference is 1.88 which is not lying within the 95% confidence interval
of Coffee responses.

Coffee & Lemon Water

Confidence interval range for Coffee is from 3.15 to 4.35 whereas mean value of
Lemon Water preference is 1.83 which is not lying within the 95% confidence
interval of Coffee responses.

Cold Drink & Lemon Water

Confidence interval range for Cold Drink is from 1.88 to 3.28 whereas mean value
of Coffee preference is 1.83 which is notlying within the 95% confidence interval
of Tea responses.

Results shows that we should reject the Null hypothesis.

Analysis through responses in Monsoon

Monsoon Response_Positive Frame

6

0
Res 1 Res 2 Res 3 Res 4 Res 5 Res 6 Res 7 Res 8 Res 9 Res 10 Res 11 Res 12

Tea Coffee Cold Drink Lemon Water

Chart 3: Response trend for Beverages preference in monsoon

Cold Lemon
Monsoon Tea Coffee Drink Water

Res 1 3 5 2 4

Res 2 5 2 4 1

Res 3 2 5 4 3

Res 4 5 4 3 2

Res 5 4 3 2 1

Res 6 3 2 1 5

Res 7 4 5 3 2

Res 8 5 3 2 1

Res 9 3 5 2 4

Res 10 4 5 3 2

Res 11 3 4 5 1

Res 12 2 5 4 3

Avg
Score 3.58 4.00 2.92 2.42

Std Dev 1.08 1.21 1.16 1.38

n 12 12 12 12

CI+ 4.20 4.68 3.58 3.20

CI- 2.97 3.32 2.26 1.64

No of Res 7 2 3 5

% Data 58% 17% 25% 42%

Test the hypothesis for Monsoon:

Tea & Coffee

Confidence interval range for Tea is from 2.97 to 4.20 whereas mean value of
Coffee preference is 4.00 which is lying within the 95% confidence interval of Tea
responses.

Tea & Cold Drink

Confidence interval range for Tea is from 2.97 to 4.20 whereas mean value of
Cold Drink preference is 2.92 which is not lying within the 95% confidence interval
of Tea responses.

Tea & Lemon Water

Confidence interval range for Tea is from 2.97 to 4.20 whereas mean value of
Lemon Water preference is 2.42 which is not lying within the 95% confidence
interval of Tea responses.

Coffee & Cold Drink

Confidence interval range for Coffee is from 3.32 to 4.68 whereas mean value of
Cold Drink preference is 2.92 which is not lying within the 95% confidence interval
of Coffee responses.

Coffee & Lemon Water

Confidence interval range for Coffee is from 3.32 to 4.68 whereas mean value of
Lemon Water preference is 2.42 which is not lying within the 95% confidence
interval of Coffee responses.

Cold Drink & Lemon Water

Confidence interval range for Cold Drink is from 2.26 to 3.58 whereas mean value
of Coffee preference is 2.42 which is lying within the 95% confidence interval of
Tea responses.

Results shows that we should reject the Null hypothesis.

Conclusion

As per responses received from sample it is observed through hypothesis testing

that beverages within the season not having equal preference across sample
respondents.

FACTORS DRIVING DEMAND FOR OUR PRODUCT

1) Changing age profile- A relatively larger share of young population which
has the ability to spend on processed foods

2) Increase in income- The middle and upper middle income groups growing at a
faster rate than in developed countries resulting in higher spending on food

3) Social changes- Increasing number of working women

4) Life style factors- Increasing health consciousness and need for convenience
fruit drink

5) Availability of Organized Retail outlets- These provide the much needed

forward linkages
 TARGET MARKET
Primary Market

Kids Fond of Fruit Juice (fond of mango, strawberry)

Teens More experimental

Youth Experimental and more buying power

Working People

Housewives

Elderly people

Secondary Market

Travel Industry

Airlines, Railways and Local Transport Systems

Recreational

Movie Theatres, Malls, Amusement Parks.

School, Colleges Hotels, Restaurants, Bars etc.

SEGMENTATION
Market segmentation is the process in marketing of dividing a market into distinct
subsets (segments) that behave in the same way or have similar needs

Variables Used for Segmentation

1) Geographic variables
2) Demographic variables
3) Psychographic variables
4) Behavioural variables
 QUESTIOANIRE

Consumer Preferences for Fruit Based Drinks

Respondent sample

1* Which of the following drinks you drink the most? Tick the top two
preferences
1. Cola based drinks
2. Fruit based drinks

2* On what occasions you prefer to drink these drinks?

When I am thirsty while travelling or eating outside.
3* When you think of fruit based juices / soft drinks which brands come
to your mind? Please list as many brands as you remember, each one
separated from the other by a comma.
Fruity, Appy, Maa, Real, B Naturals, Galla, Lmn, Maaza, Slice,
Tropicana
4* For which all brands of fruit based juices/ soft drinks, you have seen
advertisements recently. You could have seen the advertisements
anywhere, that is, TV, newspapers, magazines, hoardings radio etc.
Appy, Fruity, Nimboos, Limca
5* Which of these products have you purchased and consumed in the
last week? Tick all applicable
1. Chocolates / Wafers
2. Fruit based drinks / soft drinks
3. Biscuits

6* Which of the fruit drink brands have you tried? Tick all applicable
1. Maaza
2. Frooti
3. Slice
4. Maa
5. Galla
6. Appy
7. LMN
8. Minute Maid
9. Real

Tropicana

Be Natural
7* Which of these brands have you purchased and consumed in the last
week? Tick all applicable
1. Maaza
2. Slice
3. Appy
4. LMN

8* Please name 5 fruit drinks / soft drinks brands in the decreasing

order of quantity consumed by you. Please separate each brand
name with a comma.
Maaza, Slice, Fruity, Appy, Galla
 9* Which of the brands you tried in the last 1 month or so, and now you
are frequently consuming them? Tick all applicable
1. Galla
2.

10* What made you try these brands in the first place? Select the most
appropriate option.
I keep trying whatever new drink comes to the market
11* Please rank the following fruit drink flavors [Rank 1 : most liked to
Rank 8 : least liked] : Mango, Apple, Litchi, Guava, Lemon, Grapes,
Orange, Pineapple.
e.g. 4, 1, 2, 8, 6, 7, 3
1,2,4,3,5,8,6,7
12* Please mention the name of your most favorite fruit drink brand?
Appy
13* Why is this brand you most favorite? Select the most appropriate
reason
Taste
14* What all brands you disliked/discontinued drinking after trying them
once-twice? Tick all applicable
1. LMN

15* What was the main reason that you discontinued drinking these
brands?
I didnt liked the taste very much
16* What are the months in which you are most likely to drink fruit
juices? Tick all applicable
1. March
2. April
3. May
4. June
5. July

17* How do you buy the fruit drink you want to drink? Tick the most
 common approach
As and when I want to drink [from school/college canteen,
confectionery shop, grocery store, etc.]
18* Which of the packs you most commonly buy when you are
alone/with friends (on-the-spot consumption)? Tick any one
200-300ml glass bottle
19* Select the average frequency of consumption of drinks? Tick any one
3-4 times a week
20* Which of the packs you most commonly buy for storage and future
consumption? Tick any one
200-300ml glass bottle
21* How frequently you purchase the drinks for storage & future
consumption? Tick the most common option
Once a month
22* You have visited a grocery store and it has the following brands
stacked up in the refrigerator. You are there to purchase WEEKLY
supplies of drinks/juices etc. What all will you buy? Tick all applicable
1. Coca cola / Pepsi
2. sprite / mountain dew / 7up
3. Maaza
4. Appy
5. Minute maid
6. TION

23* Identify TWO fruits that you eat the most?

1. Mango
2. Banana

24* You visited a super store for your WEEKLY eating/drinking

requirements. The store has following items stacked up. Please select
the items that you will buy? Tick all applicable
1. Maaza
2. Frooti
3. Slice
 4. TION
5. Apple
6. Mango
7. Guava
8. Banana

25* You will always BUY carbonated drinks as your first choice and fruits
drinks as next?
No
26* Please mention your age in years
25
27* Please select your occupation
College student
28* If you are a school student OR a college student, tick the months in
which your school/college has holidays and therefore remains
closed?
July
29* Select the TWO most common activities you do during these
holidays?
1. Hanging out with friends : going out to movies, eating joints,
marketplaces, shopping, etc.
2. Staying at home : Reading / Playing indoor games / Watching TV etc.

30* On an average, during these holidays how many times you go out
partying/shopping/movies/eating with friends/family in a week?
More than 3 times but not everyday
31* these holidays, what time of the day you normally go out with
friends/family to these places? Select the most appropriate option
6pm-9pm
32* While hanging out with family/friends, you [Tick the most
appropriate option]
Tend to try an altogether different dish than what you have
previously eaten
33* While eating out with friends, what kind of drinks you prefer? Tick
the most appropriate option
Fresh Fruit Juice
34* While hanging out with family/friends, you normally [Tick the most
appropriate option]
Order your favorite drink for yourself and let others decide on their
own
35* What do you do when your first choice of drink is not available at the
store/eating joint? Tick the most appropriate option
You check availability of your 2nd / 3rd choice

PLANNING MODEL
The SC model was formulated as a tactical planning problem over an one-
year time horizon, which was divided in 12 monthly periods. The time
horizon coincides with the business cycle that last from harvest to harvest.
During this cycle, many decisions have to be made along the SC to decide
from where and how much fresh fruit to acquire for processing. These
decisions, which have to be taken for each final product, depend on
customer demands, quality and fruit availability at own farms, amount and
quality of fruit offered by external suppliers, production cost at own farms,
cost of purchased fruit, distances from farms to processing plants, yield of
processing at packaging and juice plants, etc.
Most of these parameters are also depending on whether the time period
considered is or not within the harvest period. Despite the harvest last from
January to May, each fruit variety has a different harvest starting date and
duration. Model parameters include cost of each variety of raw material,
selling prices of each product in different markets, fruit production for each
farm and fruit variety, distances (among farms, processing plants and
markets), packaging and juice plant capacities, demands for each product
and market, etc.

For the sake of simplicity, in Figure 1, single blocks are used to represent
farms, packaging and processing plants. It includes 16 own farms for fresh
fruit production and 4 packaging and 2 concentrated juice plants. There are
also 1 external supplier of fresh fruit from farms, 1 of fruit from packaging
plants and 1 of fruit from cold storage chambers.
MAJOR COMPETITION ANALYSIS
 STRENGTHS & WEAKNESS OF COMPETITOR

PRODUCT LIFE CYCLE

Our product lie in Introduction Period of PLC

Low sales

High costs per customer

Negative profits

Innovator customers

Few competitors
Objective: To create awareness of product

Offer a basic product

Price at cost-plus

Awareness dealers and early adopters

Induce trial via heavy sales promotion

PLACE
Fruits such as Orange, Apple, Pineapple etc would be purchased from Kullu.

Mango would be purchased from Hazira and Dahej.

Retail & wholesale network of India

Expanding its reach in the food-service industry by securing placements in

hospitals, airlines, railways, hotels and restaurant
 PRICE
As a new comer our pricing strategy is to introduce our products in the
market at lower prices so as to create huge demand in the market and then
compete with other competitors.

Our product will be lie on penetration strategy with high quality & low price

For introducing new product

Price low to capture market share

Expect to make profit in volume