Technological factors: The IT systems have become more efficient, more powerful and cost effective every day. The company should be proactive in adapting these changes for better resource string management and cost decrease.
Political factors: There is an increased consciousness about the necessity to develop Indian alternatives to organized american junk food in political circles. With get-togethers like Shiv Sena starting their own Vada pav chains and campaigning for the product (http://ibnlive. in. com/news/shiv-senas--shiv-vada-pav-for-marathi-manoos/78945-37. html). The political environment is beneficial for the merchandise as it presents Indian culture and ethos and also likes popular support from various political organizations.
Economic: Since food is a basic requirement of life, economic factors generally have little effect on food consumption routine. Since the company's product is a mass market product available at affordable charges for middle and lower income groups. The entire economic situation will not cause much change in ingestion. But one financial factor that that is essential for the procedures is Inflation and price volatility. These have a primary impact on the margins of the company and also cause the company to change the purchase price and number offered frequently, which can result in consumer dissatisfaction. The entire year on year inflation for 2009 was 11. 49% (http://www. economywatch. com/indianeconomy/india-inflation. html) with entire sales price index hovering around 12. 92% at June 19. (http://www. businessweek. com/news/2010-07-01/india-food-inflation-drops-to-8-month-low-manufacturing-slows. html). The high inflation rates prevailing for recent years is a concern for the business which it has to element in for future planning.
Social: The expansion of globalization in India has resulted in change in lifestyle, preferences and choices in metropolitan customer. The rise in throw-away income and adaption of fast life style influenced by west has led to transfer of consumer towards fast food joint. . There has been a rise in the number of global fast food joints beginning franchises in India. The buyer is more uncovered and hence more receptive to different likes from different cuisines
PORTERS FIVE Pushes MODEL
Threat of new entrants:
Entry hurdle is very low
The capital required to set up is relatively less.
Initial scale of operation do not need to be large.
Licensing
Shop & establishment license - approximately Rs. 100.
Police certificate & FIR NOC - about Rs. 900.
Food license - Rs. 300 - Rs. 500.
License from local expert - Around Rs. 500.
Health permit - approximately Rs. 50.
Since land requirements are low, option of location is high.
Raw materials
Easily available - Pav or the Indian bread, potato, etc.
Procurement cost is less.
Need for prepared recycleables are low.
No intermediaries as immediate service to customers.
Exit hurdle is also low
Capital investment in property is very low.
No requirement for vertical integration.
Easy geographical mobility.
Bargaining electric power of suppliers: limited opportunity for bargaining at supplier's aspect.
Raw material used is mundane and universally available.
There are large numbers of suppliers.
Switching cost is very low.
Threat of substitutes: is medium to high
Product to product substitution amounts from medium to high depending on the geographical location and tastes preferences. Low in Mumbai area but high elsewhere.
Potential substitutes: low in Mumbai area, but relatively saturated in the areas.
E. g. : Dosas, Mc Donald Burger, Chhole Bature, . Paranthas
Bargaining electric power of Customers:
There are many small and unorganized players already existent.
Distributed nature of potential buyers and absence of bulk purchase since it is a retail section.
Cost of switching between brands is very low because of profusion of the opponents.
Competitive rivalry:
Market Framework:
The segment is almost a 100 % pure competitive market. The existing market already has large number of unorganized rivals (such as highways aspect and marginal sellers) with similar offerings. Hence Differentiation is of utmost importance. You will find relatively few players in the organized fast food sector, a few of the dominant ones being Mc Donald's, Dominos, Pizza hut, CCD, Nirula's etc, however the no of such players serving Indian food is suprisingly low especially when it involves an area product such as Vada Paav. However there are many unorganized players for e. g. : the road side suppliers in Mumbai sell around 1. 5 lakh Vada Paav and related items per day. The present market show of customer shelling out for junk food is 2. 6 % which is expected to expand with the changes in the culinary likes and preferences of Indians.
Market Carry out:
The strategies followed by competition are reactive. The unorganized retailers lack technology and use undifferentiated placement. Little if any importance is given to advertising and development of the product. The differentiating factor between the present sellers of Vada Pave is the purchase price factor which is stable and hence not really a visible one. The fragmented mother nature of the market makes it challenging for the suppliers to adopt and follow a suffered strategy.
Market Performance: India's Fast food industry keeps growing for a price of 40% season on year. The multinational section catering the junk food industry is $ 6 billion in well worth2. However there is a strong existence of unorganized players operating in localized areas For e. g. : the road side distributors in Mumbai sell around 1. 5 lakh Vada Paav and related items per day1.
CONSUMER BEHAVIOUR ANALYSIS
NEED RECOGNITION
The need to buy Vada Pav (a no-frills meal) can be related to the next factors:
Hunger as a basic need
Cultural preferences designed by local cuisine
Personal preference for hygienic food products credited to high levels of awareness
Quick on the go food for fast-paced metropolitan life
Passive knowledge through tips by acquaintances and press coverage
Value for money desired from the product
SEARCH FOR INFORMATION
Environmental affects are significant in shaping the consumer's decision making process.
They are mainly
Recommendations from the friends and acquaintances
Preference for the neighborhood cuisine.
Preference for the food which facilitates fast paced life.
All these factors become stimuli and person grows contact with the Jumbo Ruler Vada Pav brand.
This coverage is strengthened by endemic coverage in main stream media and also the proper location of Jumbo King Vada Pav retailers at active locations such as railways channels, bus depots and office complexes.
The understanding of the product offering is facilitated by the high acceptance of Vada Pav as an easy meal across Mumbai. There exists very low inertia on the part of consumers and they show a high propensity to establish a romantic relationship with Jumbo King Vada Pav as a brand.
The acceptance of the brand is extremely high because the Jumbo Ruler Vada Pav offers a distinctive value proposition of a popular fast food item like Vada Pav being offered in hygienic conditions. This creates customer delight as Vada Pav is associated with distributors having poor expectations of health. This further facilitates the cementing of customer marriage with the brand.
The success of Jumbo Ruler Vada Pav as a brand has been the because of the fact that they have been able to keep high criteria of the initial value proposition they provide to customers. In the thoughts of customers the product offering is retained as customer affiliates the brand with quality and high levels of quality.
The seek out information is commonly generally unaggressive and revolves around recollections of the nice experience narrated by acquaintances as well as newspapers articles within the chain due to its novel offering.
However in instances of repeat buyers which will make up for the majority of the consumers, the energetic search component consists of gathering information about the location of outlet stores in new locations as well as new enhancements to the menu.
SOURCES OF INFORMATION
Sources of information are generally non internet entrepreneur dominated stimuli as explained previously and professional dominated stimuli is limited in its range.
In recent years the brand has generated itself in web space through internet sites giving details about the product and locations.
PRE-PURCHASE EVALUATION
The two major types of alternatives were evaluated
Established junk food chains like McDonalds, KFC, etc.
Local street distributors of fast food
The following evaluative conditions were used for evaluating alternatives across the two categories mentioned above.
Hygiene
Value for money
Preference for regional cuisine
Convenience
Quick service
Easy availability
Portability of food item
Past experience
The above mentioned evaluative requirements are in the descending order of personal preferences. The brand alternatives were likened as per these criteria and it is extremely interesting to notice that almost all of the consumers got a very high desire for the cleanliness factor and therefore local road food vendors experienced an unfavorable consumer perception. This impression in consumers head is accentuated by recent outbreak of food poisoning related conditions which are common across Mumbai especially during the monsoons.
Also established junk food chains like McDonalds tend to credit score low on the value for money standards by the majority of the consumers. Thus we see that the Jumbo Ruler Vada Pav has succeeded in creating a distinctive product offering exploiting the synergy between your two key factors between cleanliness and affordability.
On interviewing consumers we deducted that the buyer decision had not been a purely a lexicographic rule but there's a strong heuristic aspect mixed up in form of a strong cultural desire for regional cuisine portrayed by the interviewees. The scope of preference for a local delicacies can be gauged from the fact that consumers equated the merchandise offering of Jumbo King Vada Pav favorably with high quality section offerings of proven food chains. Thus we can conclude that certain hygiene factors do play a crucial role in the purchase decision but it is also strongly influenced by the intangible factor such as cultural preferences.
PURCHASE
Purchas decision can be classified on the basis of two segments
Regular consumers
Irregular consumers
Regular consumers viewed a curiosity to try out new product offerings that have been prominently communicated via in store promotions. However they generally tended to buy their preferred offering more.
Irregular consumer on the other side tended to choose entry way offering and expressed unwillingness to try out higher priced products primarily.
CONSUMPTION
Consumption tended to be immediate for almost all of the consumers although consumption was generally after moving out of the store instead of conventional model of consuming in the store such such as KFC and Pizza Hut.
Very low ratio of consumers tended to postpone the consumption generally in the situations where in fact the purchase has been designed for the family.
This is one of the deficiencies of the model Jumbo Ruler Vada Pav as it isn't associated as a location for family outing and other chains such as McDonalds, Pizza Hut etc. score over it.
Since it is an easy food category product the maintenance or endurance of it does not enter into the picture.
POST Intake EVALUATION
Expectations associated with the product are primarily hygiene, affordability and good service. These objectives are generally matched by perceived performance. Therefore a high percentage of repeat customers can be found for the merchandise. However a few of the offerings weren't accepted enthusiastically by the consumers especially the hybrid offerings such as Spanish Vada Pav. These offerings therefore were discontinued by the Jumbo Ruler Vada Pav.
