Business Plan

ORA

Executive Summary:

‘ORA’ will be a unique boutique and bakery catering to the need for innovation and quality in both these fields.

‘ORA’ as a brand will stand for good quality and much needed variety in western wear and delicatessen in

Chandigarh.

It will be the only combination boutique and bakery in the city. Our aim is to build a strong brand and establish a

reputation of style and good taste in the field of ready to wear women’s apparel and impeccable quality and

innovation in baked goods.

Objectives:

Boutique:

Build a strong brand based on quality and variety to attract a loyal client base

To become the number one, most trusted source of stylish, tasteful western clothing for women in

Chandigarh

To maintain margins between roughly 50-100% through close attention to expenses and cost of goods

sold

With fashion products susceptible to seasons and changing trends, keep a fresh stock of clothes and

maintain a high turnover.

Bi-Weekly and monthly changes in stocks and styles:

o Low quantity = Scarce supply (more on this in sales and pricing strategy)

o More Styles = more chances of catering to varied tastes

o Faster turnover = More fashionable clothes (rather than stale styles)

Bakery

To provide consistent good quality products at competitive prices

To cater to the customers in search of good value for money where competitors’ products suffer from the

drawbacks of mass production

To introduce innovation in baked goods through products which are not available in the city, and

therefore create a niche market

To establish a loyal clientele

Mission:

Although the word ‘ORA’ has multiple meanings, the English version of the word stands for ‘beautiful

seacoast’ . It stands for the calm and relaxed character of the seaside; its simple elegance and sophistication;

and the consistency with which it has inspired mankind with visions of boundless beauty.

We want the overall brand personality of ‘ORA’ to be elegant and tasteful yet laid back and relaxed. We want

to be associated with elegance and purity. A blend of sophistication and bohemia; a brand that our patrons

would be proud of.

We envisage ‘ORA’ as a brand that will be associated with quality, exclusivity and good taste in apparel. Our

baked goods will be wholesome, from fresh quality ingredients, rich and flavor and texture. Serving them

exactly how we, ourselves, would like to eat them. We will provide our customers with an amiable,

approachable retail experience.

Clothes-food combination:

We think that the two elements of ‘ORA’ will complement each other. The aroma of coffee or freshly baked

chocolate chip cookies has always had a calming effect on the human psyche. The comforting whiff of fresh

baked goods will enrich the shopping experience of an apparel customer. With very few customers likely to

resist the temptation of a cookie, it may also encourage her to have a bite after having bought her dress.

Although the smell could distract her away from the apparel, ‘ORA’ would have served her either way! At the

same time many shopaholics would agree that a good cup of coffee and a chocolate chip muffin is a time-

tested cure for shopping fatigue. Also, there’s nothing like a nice chocolaty treat to celebrate the triumph of

having found the perfect thing to wear at tonight’s party.

This isn’t the first example of the combination food-clothes store. Many large and popular stores have

combined these two functions of retailing and had a very successful experience.

Marks & Spencer (M&S) is a major British retailer, with over 840 stores in more than 30 countries

around the world. It is the largest clothing retailer in the United Kingdom, as well as being a food

retailer. Both parts of the business were entered into together, from the very onset. Additionally,

both products are housed and displayed more or less together. M&S stores typically feature a

selection of the company's clothing ranges and a food hall.

Selfridges: Founded in 1909, Selfridges is a classic department store and London's second largest

shop after Harrods. This is the flagship store and it's a great place both to eat and shop. The food hall

alone is worth a visit but you could easily lose a couple of hours enraptured in a luxury shopping

experience covering fashion, accessories and stuff for the house.

The presence of food, therefore, instead of hindering the shopping experience, is seen by most customers as an

additional convenience or attraction to a particular store.

Nevertheless, it may be argued that the smell of a spicy crepe or sauté chicken while you shop can hardly be

considered attractive. We cannot agree more. However, the smell of freshly baked chocolate cookies or a nice

cappuccino changes the equation completely. One of the most well known facts regarding chocolate is that it

triggers the excretion of endorphins in the human brain. This is a feel- good chemical – that helps reduce stress

and lead to feelings of euphoria and general well-being. This can only help to heighten the shopping experience.

Keys to success:

‘ORA’ will differentiate itself from competitors through the following:

Quick turnover of apparel stock to ensure agreement with current trends

Provide customers with top notch personalized customer service and an amiable shopping

experience

Concentrate on quality rather than quantity to prevent over-crowding of shelves and better

visibility of product

Introduce new varieties of baked goods which have not been introduced by competitors

Maintain highest standards of quality both in the ingredients used and the end product

Company summary:

‘ORA’ will be set up as a Private limited company with Shumaila Chauhan and Manasi Kumbhat as the directors.

The operations of both the elements of the business will be carried out from (Address of house). The hours of

operation will be from 8.00 am to 8 p.m. on all days except Wednesdays. This timing refers to manufacturing

taking place both at Mohali. The retail operations may continue till later in accordance to footfalls.

The procurement of ingredients for the bakery will be carried out as needed until demand trends are identified.

Procurement of raw materials for the apparel production will be from New Delhi on Wednesdays (days on which

the major markets in Delhi are open), every month.

The procurement will be in accordance to pre-determined designs, after giving due consideration to variation in

sizes for the same design.

Start-up Summary:

‘ORA’ incorporation costs are listed below. The business will start with 2 weeks inventory in apparel. In Bakery,

inventory will be held for a maximum of 2 days.

Fixed Investment Bakery Apparel

Sowing machine 15000

Iron 1500

working table 600

Shelves, hat racks etc 8000

Generator 12500

Bread Machine 6000

Oven 45000

Stand Mixer 3000

Blender 1500

Weighing scale 2000

Stove 8000

Microwave 8000

Refrigerator 45000

Refrigerated counter 48000

Toaster 2500

Water Purifier 13250

Coffee Machine 3403

Miscellaneous 10000

Furniture 8000

Generator 12500

Total 216153 37600

Monthly expenses Bakery Apparel

Wages & Salaries 7000 10000

Advertising 4000 4000

Packaging 2092 1000

Rent 10000 5000

Utilities 10780 1000

Printing (cards, menu) 1000 1000

Cost of Goods Sold 4750 17600

Travel expenses 2600

Insurance

Total 39622 42200

Other expenses will include incorporation expenses and licence fees. Our preliminary estimates of these costs

are about Rs. 25000 in total.

Location and Facilities:

All operations of the business other than retail selling will be carried out at (Mohali address). This is an area of

(500) square feet which will house one tailor. Baking operations will be carried out in the kitchen. This address was

chosen as this will be rent free.

The retail selling will be through stalls and displays in establishments such as clubs and large hotels. Not only will

these establishments have a large and regular footfall, but they also cater primarily to the target customer group

that we would like to attract. Additionally, this method provides the advantage of being able to bring the product

to the customer rather than the customer having to make an effort to look for the product. With this ubiquitous

presence, the brand will be easier to recognise.

We will chart out a structured timetable to ensure our presence at the correct places at the right time, for

example:

We need to be present in spas/sports clubs during the day. Spas and sports clubs are likely to have

greater traffic during the day, as opposed to large hotels

Large hotels are busier during evenings and weekends and we should be available here, all day, on

weekends.

The IT Park is likely to also attract the young urban professional women who are the target customer

base for formal western wear.

Product:

Apparel:

‘ORA’ will provide both formal and casual western wear for the young and middle aged women in Chandigarh.

Accessories with particular dresses and outfits will not only be available but, in most cases, will be displayed along

with the outfit. A bulk (70-80%) of the inventory will be ready-made, carefully sourced from markets in Delhi.

Other ideas and designs that form a part of a particular collection will be manufactured in Mohali in different sizes

and colors, where need be. All accessories will be sourced from the outside.

The emphasis of the production and procurement process will be trends in international fashion. Much of the

workings of the retail fashion industry were summed up by Meryl Streep’s character Miranda Priestly in The Devil

Wears Prada:

“…that sweater is not just blue, it's not turquoise, it's not lapis, it's actually cerulean. You're also blithely unaware of

the fact that in 2002 Oscar de la Renta did a collection of cerulean gowns. And then I think it was Yves St. Laurent,

wasn't it, who showed cerulean military jackets? And then cerulean quickly showed up in the collections of eight

different designers. Then it filtered down through the department stores and then trickled on down into some tragic

Casual Corner where you, no doubt, fished it out of some clearance bin.”

We will strive to hasten the trickle down process and not only introduce high fashion to the city but make it

accessible to those who appreciate it. Although one may criticize this approach as being un-original and ‘knocked-

off’, it is this very approach that forms the foundation of some of the giants in the retail apparel industry like Zara.

Production and procurement will, therefore, be in accordance to the collection concept of fashion as opposed to

inventory turnover. This will ensure fresh stock and variety every month. The remaining stock can be disposed

through a discounted sale 2-3 times a year.

Baked goods:

‘ORA’ will serve a variety of baked goods. The menu will include:

Cookies:

Chocolate chip

Grandma's Oatmeal Cookies

Giant Ginger Cookies

Peanut Butter Cookies

Orange Poppy Seeds Cookie

Pistachio White Chocolate Chip

Muffins:

Banana Crumble Lemon Poppy Seed Blueberry Streusel Peanut Butter & Chocolate Chip Strawberry Ricotta Cappuccino & Chocolate Bailey's Chocolate Chip

The Godfather cake

Lemon pie

Drinks Lemon grass tea Espresso Cappuccino

Bread

Banana bread with ricotta cheese and honey

Herb &Garlic Bread with Aioli

Country Seed Wheat Bread with Humus

Olive Bread with Sundried Tomato Pesto

Cinnabons

Doughnut

Classic:

White Chocolate

Dark Chocolate

Cinnamon

Powdered Sugar

Maple Syrup

Exotic:

Glazed Lemon filled

Karamel Crème Crunch

New York Cheesecake

Choreology

Tiramisu

The last two products deserve special mention as these have not been introduced to Chandigarh in a

noticeable way.

The main emphasis of production will be on quality and richness in taste. Production will take place on a small

scale everyday to avoid wastage and ensure fresh products. The products will be sold both loose as well as in

packets (e.g. Cookies, muffins and doughnuts)

We will be introducing the ‘take home and finish your meal’ concept for the first time in Chandigarh. This is an

approach where certain baked goods like cinnabons, doughnuts and certain muffins can be packaged plain i.e.

without any frosting, icing or toppings. The latter will be provided in small cups or separate containers. The

idea is for the customer to be able to participate in the process of creating his treat. Additionally, it allows for

proper customization where the customer can use extra chocolate if he so desires, or decorate the muffins

according to his or her fancy. This is likely to prove very popular with the kids and will differentiate us,

successfully, from the competition.

The Business Insights report on Innovation and Market Drivers in Bakery and Cereal1 mentions:

“Foods and beverages continue to become customized, with food and drinks being tailored to fit consumer’s lifestyles. Flavors, colors, functional, and health ingredients are often used as brands try to maximize the appeal of their product and appeal to consumers by targeting a specific need. Bakery and cereal manufacturers can capitalize on this trend by providing consumers with product formats which they can personalize to provide them with the additional health, indulgent or ethical benefits they require.”

1 http://www.globalbusinessinsights.com/content/rbcg0202m.pdf

Competitive comparison:

We will offer our customers distinct advantages vis-à-vis our competitors. The main competitors in apparel

include:

Just casuals, Sector 9: This is an established store in a main market in Chandigarh. It offers western

casual wear for both women and men, sourced mainly from the markets in Delhi. Much of their stock

consists of cotton shirts and t-shirts. Priced at around Rs. 300-350. Clientele base is mainly young

college going students shopping on a budget. Given the small number of local competitors, the store

enjoys a large share of the market. However, the target audience is the students on a budget looking

for everyday wear. They have little consideration for exclusivity or quality. Moreover, clothes here are

plain and behind trend.

Edge, sector 10: This is a large store situated opposite Mount view hotel and offers a distinct location

advantage. The clothes on offer here are trendy and target the segment of the school/college going

crowd that spends more money. The clothes are sourced from markets in Bangkok. The interiors are

done very well. The theme of the store is punk/rock, both in terms of interiors as well as apparel. This

is a slightly more expensive store with t-shirts for Rs. 500 and dresses significantly more. The quality

of clothes, however, in some cases is dubious. It serves a significantly younger market and again, does

not follow trends in fashion. Additionally, the over-bearing punk/rock theme serves only the

customers that are fond of the same.

Micky Chhabra, sector 10: This is a designer store offering the same location advantage as Edge. It

offers western wear for the same target group as ‘ORA’. Clothes can be classified as trendy, more or

less. Pricing is reasonable with skirts for Rs. 800 and dresses for Rs.1500-2000. This store, however,

gives the impression of stocking the entire inventory on its shelf. The shelves also displayed winter

wear in May. It’s very hard to differentiate old from new, good from bad. It also requires a lot of

patience and time and overall offers a poor shopping experience.

Outlets in Sector 17: Esprit, Wills Lifestyle and Tommy Hilfiger. These are large chains which dominate

a large portion of western wear for women in Chandigarh. However, like most major chains in small

cities, the stock is stale and not exclusive. The change in stock is not quick and the clothes lack in

design or customization as the same clothes are sold all over the country. The main selling point here

is the brand name which is often enough justification for many customers to favour the outlet.

The difference in ‘ORA’:

Our belief is that fashion, like food, goes bad quick. Our small scale of production will allow us to respond

quickly to changes in fashion trends.

Continuous research into the developments in international fashion will ensure our products are not only

differentiated from that of our competitors’, but also far superior.

The ready-made apparel from Delhi markets will also be chosen carefully in accordance to current trends.

The ready made garments will be branded appropriately. This is not done at the competitors’ outlets,

where tags are either left half torn or as they are. This will impart an identity to ‘ORA’ products, a

necessity for proper brand building.

Personal attention to customers and their needs will not only heighten shopping experience but personal

relation with the customer base will increase loyalty.

Short inventory periods and close connections with clientele will allow for better customization of the

product.

The main competitors in the bakery function of ‘ORA’ are:

Nik Bakers: This is a very well established chain of eateries in Chandigarh with a loyal client base and

specialization in all baked goods. Additionally, it boasts an owner who is a trained chef from Australia, the

USP of Nik Bakers. Branches are located in every major sector in the city and are very easily accessible.

The large scale of production allows the pricing of the products to be competitive as well. Although this

chain continues to be quite popular, it offers no personal attention and the interiors of the branches

resemble a cafeteria where the turnover is fast (as opposed to laid back and relaxed). Additionally, over a

period cakes and desserts have become more expensive. There has been a sharp deterioration in the

quality of goods, according to many loyal patrons that we spoke to.

Monicas, Sector 8: This is a small bakery which has established a name for itself in cakes. Relatively small

scale of operations (guess) and reasonably priced. It does not serve cookies, muffins etc.

Coffee chain outlets, Barista, Café coffee day and Costa: These are well established brands quite easily

accessible to most. Ambience here is laid back and quality of coffee is good. Client base isn’t loyal and

tends to choose any coffee outlet in the vicinity due to convenience. Service is not personal, products are

often not fresh. Variety of baked goods is limited and customization isn’t possible (they don’t take orders

etc.)

The difference in ‘ORA’:

The gap in the baked goods market in Chandigarh is variety and consistent quality. Through ‘ORA’ we will strive to

fill both. For example, a simple product like the doughnut, popular globally, has not made an appearance in the

city. With Nik bakers the only provider, the quality is poor and choice in flavors are limited.

Although the city has a colossal sweet tooth and a whetted appetite for chocolate in particular, it lacks quality

delicatessen.

‘ORA’ will allow patrons to customize their purchases through the unique ‘finish it off – at home’ option. This is a

one-of-its-kind approach to retailing baked goods where customers are allowed to take plain doughnuts or muffins

home along with little packets of different toppings. They can then decorate these at home, and eat them freshly

heated and decorated. This is very popular among the younger demographic and is viewed as a fun family activity

as well.

It will also cater to the more sophisticated palette through products like the banana bread with ricotta cheese. This

is a market that has not yet been served in Chandigarh and carries immense potential.

The Business Insights report states that:

“…there is significant activity in very premium artisanal bakery – as more affluent consumers turn away from industrially produced bread and purchase high end bread as a treat, fostering a new wave of premiumization in in-store bakery as it tries to compete.”

Conclusion: All-in-all, with ‘ORA’ we would like to create an ambience of ease and comfort. A sense of natural

goodness, bohemia, sophistication and most importantly, good taste. A brand associated with quality and

exclusivity which come with good value for money.

Sales Literature:

‘ORA’ will use a targeted advertising and sales promotion programme to create awareness and popularize the

brand. A large portion of this awareness programme will be through pamphlets. These will be carefully designed,

with the help of an artist, and printed in tasteful colors on handmade/recycles paper. This will convey a sense of

quality that is associated with all thins handmade. It will attract the correct clientele who place a large premium on

quality and exclusivity rather than those who are looking for a good bargain.

These flyers will be placed strategically at locations which are frequented by our target customers. These

include high end salons like Tresemme and Habibs.

Flyers could be circulated in offices at the IT park and at schools and colleges.

Extensive online advertisements on Facebook.

Advantage will be taken of the extensive network of friends and family that exists in the city, to spread

the word through word of mouth and email.

Printed schedules could be made available with every purchase to enable the customer to return.

Very select products will be displayed at these venues for sale (on payment of a price or commission).

A small card attached to the garment will provide information and assurance regarding quality of

product. This method is often very useful and employed by many major brands.2

With every sale, a few bits of information will be included in the take-away bag which could include:

o Details of our philosophy

o Handy menu card for bakery function (again designed and printed on handmade paper)

o A small pack of 2 cookies as a sample, which serves as a pleasant surprise and helps in building

consumer satisfaction.

o This may also earn a patron for the bakery function of “ORA”

Sourcing:

‘ORA’ will source its merchandise from the following sources:

Janpath, New Delhi: Janpath market is a haven for budget travelers and for those preferring the hippie look. There

are numerous silver and inexpensive jewelery stores and they are not only popular with the foreign visitors but

also the local crowd. Prices are low and even lower for bulk purchases. It often offers the clothes that are met for

large European chains like Zara and Mango, which are export surplus. Often, this stock is the same that is being

offered in the showrooms of these brands, the world over.

Sarojini nagar market, New Delhi: Sarojini Nagar Market is for those who want fashionable clothes at reasonable

prices. Even before the latest couture designs hit the boutiques, their cheaper version appears here. One of the

major attractions of the Sarojni Nagar Market of Delhi, India is that it provides even branded goods at cheap

2 Massimo Dutti Jeans: Perfectly made with solid quality and style. The best 100% comfort that you will find. Constructed from the highest materials available.

Haeftling ( Big German brand): Haeftling was born behind bars and was founded in 2003 as the first brand in Jail wear. Haeftling gets its inspiration from prison life and is just a bit tougher than those brands on the outside. The garments are highly functional and have a classic and timeless cut. Only high grade rugged fabrics are used in manufacturing. Haeftling collaborates with correctional institutions throughout all of Europe and thereby creates meaningful work. The Philosophy: Haeftling is a commitment to real life with its ups as well as its downs. Haeftling believes in the good of mankind. Everyone has a right to get a second chance. Ultimately it is crucial to be honest with yourself. That is the Haeftling conviction. DO GOOD. BE GOOD.

prices. This is so because export surplus garments as well as rejected export clothing comes to this market at throw

away prices. It also offers cheap accessories.

Paharganj market, New Delhi: At this market offers things like flowy linen pyjamas, harem pants, keffiyehs and

kurtas. Certain shops sell only leather accessories. Also available is beaded jewelry in bright neon colors and

metallic hues. They tend to add a retro look an outfit and are quite chic. There is a bewildering array of colorful

silver, bead, shell, laq, stone and wooden jewelry here. Makeshift stalls also stock ethnic handmade bags and

purses. Sometimes these would be replaced by other handicrafts such as small brass statues, key-rings, wall

decorations etc. Cost of jewelry and apparel is low.

Lajpat nagar market, New Delhi: Lajpat Nagar is located in South Delhi between the well-known areas of Greater

Kailash and South Extension. This is one of the most popular commercial areas of Delhi where a large number of

shops are located ranging from the small local ones to the large branded showrooms. It has an extensive dress

materials markets and offers all kinds of prints and textures of cloth. Also available are a wide variety of

embellishments for garments such as sequins and lace. It offers quick dyeing facilities at very reasonable prices.

Much of our raw material in terms of textiles will be sourced from this market.

Ingredients for the bakery function: These will be sourced locally in the case of perishable ingredients like milk,

eggs, flour sugar etc. The relatively rare ingredients or expensive ones like chocolate chips etc. will be sourced

from New Delhi.

We will also work to solidify our relationships with sales representatives and vendors so that we may achieve

decreased cost of goods.

Future products:

Our first priority is to build a strong brand and a loyal client base. With increased sales, we will open a point of

contact in a major sector in Chandigarh and establish a bakery cum boutique; a place where our customers will

come to for a relaxed ambience and personalized service. This may be in a market like Sector 10 and 11 or in a

mall. The establishment of a strong brand is often an unsaid pre-requisite to be able to lease floor space in a mall.

We will expand into the line which attracts the most demand, whether that is stitched apparel designed in-house

or readymade garments sourced from New Delhi. We will expand into accessories like bags and shoes, design and

manufacturing as well as sourcing from the outside.

In the bakery function, along with the establishment of a bakery-cum-boutique, we will look into manufacturing

many ingredients which are sourced from outside India such as cream cheese etc. This can be supplied at

competitive prices to large commercial establishments like hotels and restaurants.

Market analysis:

Target market:

The characteristics of the primary target audience of ‘ORA’ (fashion segment) will be:

Young women who are in college or seniors in high schools

They frequent clubs and bars over weekends and prefer to wear a new outfit each time

Women who often socialize with friends and relatives on weekends in restaurants and

clubs

Women who frequent high society parties, where exclusivity of outfit plays an

important role

Young urban professional women, who wear western clothes to work aged between

25-35

Women in the age group of 15-35 living in posh neighborhoods like sector 8,9,10 etc.

This woman looks for bargains and is unlikely to spend money on something that’s not worth it. However,

when she sees quality and style, she recognizes it and is willing to pay a premium for it. Additionally, it is

important to her that her wardrobe is not a product of the wholesale mass production concept employed

at many retailers and she values the exclusivity and personal attention to each garment she owns.

She loves to shop. She is aware of international fashion trends. She reads Femina and Vogue and

watches HBO, Star World, AXN and Ftv and makes sure she’s aware of what’s in and what’s not. She

aspires to be as well dressed as the celebrities she sees and reads about. However, she does not blindly

follow trends and makes a discerning judgment on which trend is suitable for her. At the end of the day,

she cares deeply about the way she looks, carries herself and she considers her wardrobe to also serve

the function of a consistent and trustworthy confidence booster.

Analysis:

Although initially a laid back and easy going city, the pace of life in Chandigarh has undergone a considerable

change over the past few years. With increasing connectivity to the country and the world at large, life in

Chandigarh has become a fast and busy one.

The population of the city consists of two distinct groups among others: The student community of Punjab

University and the retired officers of the Indian Defense Services.

It is the former segment that we will target.

Chandigarh is responsible for the birth of the word 'GERI' which basically means patrolling or moving around in an

area. This word got its meaning from the youth of the city studying in the various city colleges and the University

located in the northern part of the city. Whenever the students get a time-out from their lecture and busy

schedule, they along with their friends go around the various city colleges and Punjab University to check out the

crowd and flaunt their ride!

This segment hangs around, with a steam of eating joints, chic clothes, and latest western and Indian music. Style

and ‘cool-ness’ is quite important to them. It is this characteristic that led to the city being picked for the launch of

the Tommy Hilfiger brand in Chandigarh.

’ We regard Chandigarh as the seventh metro of India after Delhi, Mumbai, Kolkata, Chennai, Bangalore and

Hyderabad. Although cities like Pune and Ahmadabad are much bigger than Chandigarh, for us Chandigarh has an

importance of its own. Over the years, it has emerged as one of the biggest markets in India for premium brands

of apparel. You will be surprised to know that while Ahmadabad is five times bigger than Chandigarh, we sell three

times more premium brands of apparel here than we do in Ahmadabad. There is a lot of affluence in Chandigarh.

The city also has a very large segment of young population who are fashion conscious, like to wear the best and

the latest and are willing to experiment. People are willing to experiment and try out new things.’

- Darshan Mehta, President, Arvind Brands Ltd3.

Additionally there has been an increase in the level of sophistication in the tastes of the youth with shows like

Splitsvilla and Roadies which are followed closely nationwide and particularly in Chandigarh – since some

contestants are often from the city. These shows have served to heighten the level of fashion consciousness and

refine tastes in this segment.

It can no longer be argued that the youth does not have adequate spending power. The Indian youth spend almost

the same amount annually on apparel and accessories as the elders in their household, revealed the IMAGES-AC

Neilson Study on The Indian Wallet & Brand Share. The report also revealed that North Indian guardians spoil

their wards with the highest levels of pocket money. The report also suggests that young men tend to spend

almost thrice as much on gifts as young women. Also, while average annual credit card payments are around Rs

62,220, for young adults the average is around Rs 1.21 lakh, even higher for women.4

Our other main target, therefore, will be the women aged 21-35.

It is no news that the women’s apparel market in India is large. It was estimated to be as much as Rs. 37000 crores

and has enjoyed a healthy growth rate of 14% in the past five years. With the growing affluence of working women

and increasing exposure to international fashion trends and general broadening of the mindset of the Indian

society at large, this market is set to grow even further. At a CAGR of over 17%, the women’s apparel market is

likely to cross Rs. 61000 crores by 2010. Branded women apparel market is projected to rise at a rate close to 25%

and surpass Rs. 18,000 crore by 2010. Western wear, along with lingerie, will emerge as the fastest growing

segment5.

In Bakery too, the market in India has been booming. Bakery products have become popular among different cross sections of population in recent years due to increased demand for convenient foods. The Bakery industry in India is the largest of the food industries with an annual turnover of about Rs 3000 Crores

6.

Here, our target market is:

Children aged 1-13

With this age group unlikely to place any importance on brand, our strategy will be to ensure that their

guardians are repeatedly assured of the good quality of ingredients and the ‘home-made’ advantages of

‘ORA’ products.

Additionally, to build a reputation and make products more appealing to this age group, ‘ORA’ baked

goods will be made more appealing to the young eye using colorful sprinkles and generous use of

chocolate

Sophisticated connoisseurs of good food

Much of the population of Chandigarh is well travelled. Having been to major cities of the west and having

tried various delicatessens abroad, similar products in their home city will be appreciated. No competitor

3 http://www.tribuneindia.com/2003/20030716/cth2.htm

4 http://www.thehindubusinessline.com/bline/2007/07/03/stories/2007070352080500.htm 5 http://www.just-style.com/store/productprint.aspx?id=66540

6 http://www.fnbnews.com/article/detnews.asp?articleid=21020&sectionid=32

caters to this market segment yet. Additionally, channels like NDTV good times and Discovery Travel and

Living have created a significant deal of awareness regarding varieties of foods from the world over.

Despite this, none of the coffee chains offer any such products. Additionally, this segment is likely to

appreciate the brand value of ‘ORA’ products.

Gaps in the market:

As mentioned in the Competitive comparison section, the existing outlets servicing the market suffer from the

following drawbacks:

Garments lack in quality as much of the stock is sourced from markets outside. These are not

standardized or branded.

Given the large quantity of garments stored on shelves, the existing outlets do not cater to the need for

exclusivity.

The garments are usually out of fashion and are not updated according to changing trends. Stock on

shelves is renewed on the basis of inventory turnover rather than trends.

There are assistants that are present to provide different sizes, but provide no other service. There is

absolutely no personal attention given to customers as the salespeople present in the outlets are

employees rather than owners. They have limited knowledge of the product and a limited incentive to

help the customer.

None of the outlets provide the advantage of customization- where customers can provide feedback and

register their demand and expect to find this catered to within a short period of time.

Residents have often resorted to shopping from Delhi in search of better designs, style, customer service

and exclusivity.

There has been a sharp deterioration in the quality of baked goods provided by once popular outlets.

There is little choice in the variety of goods offered by competitors.

How ‘ORA’ will fill the gap:

Continuing innovation in the field of baked goods

Consistently delivering on our promise of quality

Create a strong clientele following through creating of a recognizable and appreciated brand

Providing good quality garments which are in accordance to the prevailing trends in fashion

Constantly researching developments to ensure we follow trends and produce garments accordingly

Paying special attention to customer service

Customizing products according to our patrons’ needs

Providing an agreeable and friendly atmosphere to shop

Strategy:

As mentioned above, our strategy in fashion will have heavy emphasis on style and trend. This will mean

that each new collection and stock will be relatively short lived. This will not only help us keep pace with

changing trends but will also help us provide a larger variety of clothes in a number of designs.

By reducing the quantity of garments of each kind of style, we will not only reduce our exposure to any

particular collection but also create an artificial scarcity. With exclusivity often just as valuable as the

design of the garment, this will allow us to maintain higher margins on these items.

“When Zara opened its first store on Regent Street, shoppers are said to have browsed without shopping,

thinking that they would come back to buy during a sale. Then the store assistant explained that the styles

are changed every week and the styles liked buy the customer would very likely not be available later.

Subsequently, Regent Street became one of Zara’s most profitable stores and more stores opened in the

UK.”

The additional advantage of lower quantities is that there is less to be disposed off at discounts during

season end sales.

Another integral part of our strategy is customer service and customer relations. With the owners being

well travelled and well educated young women, they will take a personal interest on each customer’s

needs without being over-bearing. The customer will learn to trust them in terms of quality of the

product. This will enable ‘ORA’ to forge a lasting relationship with the customer.

“The fact is that most women form relationships with every person, place or thing they encounter,

including brands and products. For example, Chico’s is a women’s clothing store that has had great

success, having branded themselves as a “girlfriend” to women. They wrap each purchase with a ribbon,

as if it were a gift. Chico’s has tapped into women’s desire to feel welcomed, understood, and appreciated.

Women have reciprocated with undying loyalty and served as the cheapest word-of-mouth advertising7.”

Finally, the problem that we have observed with competitors in the apparel business is that although the

market segment they cater to is aged 15-25 and trendy, the store assistants are not so. The cashier is

often a ‘pot-bellied uncle’ ready to money and send off the customer without as much as a smile. One

would not expect or bother to converse with the assistant with the bored face and drab clothing, let alone

ask them about the garments or for advice on how to wear it. The youth, international exposure and

education of the owners will serve as an additional USP of ‘ORA’ and we will capitalise on this as a part of

the strategy.

While the customer services and USP elements of our business strategy is going to stand us in good stead

in both the fashion and bakery elements of the business, in eatery items, the best strategy is quality. We

will provide consistency and variety in our products.

Our foray into more sophisticated products like ricotta cheese will provide us with the first mover’s

advantage in a potentially large market. This is also true of other products like cinnabons and doughnuts.

Additionally, ‘ORA’ will introduce the new and unique concept of ‘finish-it-yourself’ which will give the

customer of having participated in making his own treat. This will prove popular among the kids and

teenagers, particularly with doughnut toppings and cinnabon frosting. It will also enable the products to

last longer and will encourage ‘buy-to-keep’ purchasing by customers.

7 Venus Goes Shopping: Tips to Get Women to Love Your Brand; Judy Carter. (http://www.myarticlearchive.com/articles/6/029.htm)

Pricing strategy:

Pricing of readymade garments will be such as to allow a margin of 80-100% considering the cost is about

Rs. 100-150 for each tshirt.

House designed garments will be sold at a margin of about 100-150%. The price should cover the cost and

margin as well as carry a certain premium for exclusivity and design of the garment

Accessories will have a considerably lower margin, ~40-50%

All ‘ORA’ fashion products can be exchanged for full value or vouchers within 14 days of sale. This will

maintain customer trust and help in customer retention and loyalty.

Pricing of baked goods will be in accordance to market practices allowing a margin of between 50-100%.

Baked goods and all eatables generally have large margins. We will price products to include a small

premium for brand value but enough to ensure customers get value for money

Expansion strategy:

We envisage the brand growing in 3 distinct stages which we classify under introduction, establishment and

the expansion of the brand in the city of Chandigarh.

In the INTRODUCTION PHASE:

The expenditure will be kept to a bare minimum. The only expenditure will be on advertising/printing, utilities

and transportation. This phase will last about 3 months.

1. We constantly supervise the tailor and the bakery helper to establish certain standards in terms of

quality.

2. We focus on spreading awareness of the products on offer at ‘ORA’

We establish tie-ups with hotels, clubs and exhibitions.

Stalls will be put up in Panchkula and IT Park to establish demand patterns there. These

areas are presently untapped and therefore posses large potential.

3. Strengthen our understanding of the customer and demand patterns.

Feedback forms are circulated to customers who visit the stalls.

Relationships are forged with customers and feedback is sought through conversation.

Database of customers is built up with email and postal addresses of customers.

The ESTABLISHMENT PHASE:

After the proper introduction of the brand, we establish the brand. This will be conditional on the profit potential

assessed during the introduction phase.

If the feedback on ‘ORA’ products is positive and we identify an opportunity to expand the customer base

through the establishment of a shop which will provide additional space for the bakery function, and on-

location consumption of the bakery products, i.e. coffee shop atmosphere.

If the customers for the apparel function find additional value in having a permanent point of contact in

a market place, instead of make-shift stalls.

If the demand patterns identified requires a scaling up of production of both/either of the bakery or

apparel functions of ‘ORA’. This scale of production is not likely to be possible from Mohali.

If sales figures and the corresponding profit numbers justify a scaling up of operations

The second phase, where an ‘ORA’ outlet will be established, will involve the lease of a commercial property on

rent for the establishment of a shop. The location of this shop will be dictated by the demand patterns identified in

stage one and the profile of the existing customers of ‘ORA’. The sectors that are most likely to be favored are

Sector 7, 8, 9, 10.

In this phase there will be additional expenditures incurred on an annual as well as monthly basis.

Rent (monthly)

Licenses: Food adulteration, shop and establishment, fire safety, sales tax, pollution control (in case of

generator).

Labour/wages: An additional sales boy/girl will be required at the shop

Raw materials: With an increase in the scale of production, there will be an increase in raw material costs.

Utilities: Electricity consumed will be more expensive with an additional Rs. 5 per unit of electricity

consumed.

Additional expenditure on equipment, refrigerated transportation to and from the shop.

This phase is likely to take 12-18 months to be completed. By the end of this phase, ‘ORA’ will have a strong base

of loyal customers who spend time at the coffee shop and look to the brand for latest in style and clothes.

The EXPANSION PHASE:

With the establishment of a loyal customer base for ‘ORA’ products, expansion into various other avenues will be

looked at. This will include:

Franchising options: Provided there is no compromise in quality

Product diversification: In the bakery function this will be in the form of:

-extending café menu to include lunch

-Production of products like mascarpone cheese, cream cheese on a large scale for supply to larger

establishments

In apparel, this diversification will be:

- Shoes, bags, jewelry and belts (through identification of leather/metal workers and craftsmen in the

vicinity of Chandigarh)

-Home ware items like table linen, glass decoration items etc (through identification of local craftsmen)

This phase will be ongoing and will only be initiated provided the increase in scale of production and the product

diversification allow for the maintenance of quality and durability.

Management summary:

Given the small scale of operations in the introduction phase, we will need to hire:

One tailor working from 8 am to 6pm on all days except Wednesday.

One helper in the kitchen, working mainly in the afternoon for 3-4 hours a day. To help in mechanical

work like kneading, cleaning etc

In bakery, care will be taken to ensure complete secrecy of recipes to retain exclusivity. It is therefore,

essential that the kitchen helper is a part time worker.

The tailor will be provided with a midday meal and tea twice a day. It is essential that he feels comfortable

in his work environment as the quality of stitching is essential to the success of ‘ORA’.

The workload of retailing, supervision and the bakery will be divided between Shumaila and Manasi in

such a way as to ensure the presence of at least one person with the tailor at all times. Any mistake in this

function of the venture could lead to immense wastage of materials and time.

Organizational structure: Shumaila Chauhan and Manasi Kumbhat will be the directors of ‘ORA’ Pvt.

Ltd. Given the small scale of operations, there will be frequent and continuous interaction between

directors and the tailor and bakery helper. Decision will be taken by the directors in line with the objective

of the company.

Employee compensation: The tailor will be paid Rs. 10000 per month. This can be revised upwards

based on profits. He will be made aware of the direct linkage of his work with his compensation. He will

work on all days of the week, with a half day on some Wednesdays. He will benefit from one day of paid

holiday on his main religious holiday and one weeks paid leave after 12 months of employment.

The part time worker will be paid of Rs. 7000 per month. His work will be called for as needed on a daily

basis.

Financials:

Investments and expenditure:

At incorporation, the company’s fixed assets are listed below. Monthly expenses are also listed below. These do

not include insurance expenses.

Fixed Investment Bakery Apparel

Sowing machine 15000

Iron 1500

working table 600

Shelves, hat racks etc 8000

Generator 12500

Bread Machine 6000

Oven 45000

Stand Mixer 3000

Blender 1500

Weighing scale 2000

Stove 8000

Microwave 8000

Refrigerator 45000

Refrigerated counter 48000

Toaster 2500

Water Purifier 13250

Coffee Machine 3403

Miscellaneous 10000

Furniture 8000

Generator 12500

Total 216153 37600

Monthly expenses Bakery Apparel

Wages & Salaries 7000 10000

Advertising 4000 4000

Packaging 2092 1000

Rent 10000 5000

Utilities 10780 1000

Printing (cards, menu) 1000 1000

Cost of Goods Sold 4750 17600

Travel expenses 2600

Insurance

Total 39622 42200

Other expenses will include incorporation expenses and licence fees. Our preliminary estimates of these costs

are about Rs. 25000 in total.

With the above expenses, we assume a first month sale of Rs. 19000 in baked goods and Rs. 17500 (40% of stocked

value). This conservative estimate indicates a loss of Rs. 33,500 (Rs. 18000 in apparel and Rs. 15500 in baked

goods) in the first month. This loss in the first month of operation is attributable to the following:

1. Labour in both the apparel and bakery functions is not being put to optimum use 2. Advertising is heavy in the first few months in order to spread awareness of the brand. 3. We are assuming that we will not be able to recover the full amount of rent since brand is new and

awareness of the products might be low for people to buy in their first visit. 4. Sales estimates have deliberately been kept on the conservative side. 5. Costs from spoilage in baked goods will initially be high but analysis will be done daily and weekly and

changes in the operation strategy will be made accordingly. 6. Ingredients and raw material costs for both functions of the venture have been taken at retail rates. Bulk

buying will definitely bring down costs.

The next exhibit shows the increase in total sales of both the functions of ‘ORA’ at different rates per month. In the

apparel industry, branded women’s apparel is expected to grow rapidly at approximately 25% per annum. We

expect a healthy growth rate in the apparel function of the business within the first few months of operation due

to the uniqueness of the product offered and the large gap existing amongst the competitors.

The bakery function will require a certain amount of advertising and will have a relatively lower rate of growth in

sales in the initial phases.

0

50000

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Expenses Fixed investment

Apparel Bakery

However, the retail food sector has been booming in the country for the past few years. With Baked goods

comprising the largest segment of the retail food industry, growth prospects are promising.

“The Indian food retail sector is growing at 30%. The baked product industry has been dominated by the

unorganised sector but with the evolution of the retail landscape this segment too is undergoing change. We

believe that the Indian baked foods segment will grow rapidly.8”

With the innovative products on offer, spread of word of mouth, innovative advertising and development of a

reputation for fresh hand-made produce, we expect a healthy rate of growth in this function as well.

In the initial phases, a doubling i.e. 100% growth in total sales can be expected. However, for the purpose of

illustration we have assumed conservative figures of 10, 20 and 50% increase in total sales.

Breakeven analysis:

The breakeven chart below shows the required sales per day to break-even within the first 3, 6, 9, 12 and 18

months of operation. The calculations have been made with a fixed investment of Rs. 241,253, and Rs. 82000 in

monthly expenses.

8 http://www.fnbnews.com/article/detnews.asp?articleid=21020&sectionid=32

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80000

100000

Month 1 Month 2 Month 3

10%

20%

50%

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3m 6m 9m 12m 18m

Reqd. sales per day to breakeven