ENTREPRENEURSHIP

DEVELOPMENT(BBA432)
CIA - III

APRIL 13, 2022

SUBMITTED BY – JAISHINI SIVARAM (2023259)
SUBMITTED TO – DR. LAKSHMI PRIYA K
 Executive Summary of VENDO by Vendo Vendors Pvt Ltd.

About VENDO

VENDO is an app-based smart vending machine that aims to remove the Human Resource
aspect of the business. Primarily aimed at the younger generation, our machines are
strategically placed in areas with high student foothold, who according to our research are
the most likely market group to purchase packaged food. Additionally, partnerships with
educational institutions will help the brand skip a majority of marketing campaigns as
news tend to spread fast in colleges.

Business Problem and Solutions

Many colleges have canteens, few don’t. VENDO acts to serve members in both these
situations by taking orders and payments via an app, especially those who want a quick snack
without spending much. Therefore, VENDOs prove to be the perfect platform for such
students to get what they want without the hassle.

Additionally, Vending machines have various stereotypes associated with them, the primary
one being that they do not work properly after the customer deposits their cash. Therefore,
VENDOs have been designed to operate only via an app, taking orders, payments and
cancellations from the same which leaves no room for conflict in terms of payment. This,
along with the fact that each VENDO is equipped with a camera and a barcode reader that
scans all the dispersed items will reduce any logistical issues that might be encountered by
traditional vending machines. The combination of all said factors makes each VENDO
unique from your regular vending machine.

Unique Selling Proposition (USP)

Technology based and reliable source for FMCG food products.

Target Market

Students (Refer Expansion Plan for further details)

Market Analysis

Supplier Market

Vending Machine

The current supplier market of vending machines in the South Indian region is dominated by
Vedekin Tech and Peoplenet Access Ltd. After further analysis, the supply of smart vending
machines, which are required for the making of a VENDO are supplied by the latter which
limits the firm’s options to acquire them at competing prices. The average price of a smart
vending machine is Rs. 2,00,000 (Rupees Two Lakh). However, one must note that this is the
price for a fully equipped smart vending machine, which is not required for the company as
we must make modifications and customizations to the received product. Therefore, it is
reasonable to assume an average cost of Rs. 1,75,000 (Rupees One Lakh Seventy-Five
Thousand) for the acquisition and transportation of a non-modified vending machine. Add to
that another Rs. 20,000 – Rs. 25,000 for modifications and the company can produce a
VENDO for Rs. 2,00,000 (Rupees Two Lakh)

Restocking

The FMCG sector in India is one with a very strong supply chain. Years of development and
the hegemony of giants such as ITC and HUL have led to a highly efficient and effective
supply system, especially for consumer eatery products which have experienced a huge boom
in the 21st century. Therefore, VENDO will not have any problems in securing suppliers for
our products. Additionally, the efficient supply chain will lower our per transaction cost,
making it easier for the company to order less quantities more frequently (Reduced Economic
Order Quantity)

Competition

VENDO currently does not have any direct competition in the market (Bangalore). However,
there are a few vending machine suppliers who have installed their products in certain
locations. All these vending machines act as a secondary business for the firm (such as Argo)
or have multiple complaints of not working properly (such as the little known Meezu vending
machines).
Industry Analysis (via PESTEL Model)

Political Environment Analysis

The government has continually pushed for skill development in urban areas. While there
currently exists no policy directly promoting the use of vending machines, ‘Make in India’
has proved to be a huge boost to the entire manufacturing sector (especially to software
operated machinery like VENDOs) which one can only predict will continue in the future.

Economic Environment Analysis

The Indian economy, especially in urban areas such as Bangalore has a high per capita
income. Therefore, the students in such areas will be able to reasonably afford FMCG
products which are cheap by urban standards. Additionally, the usage of efficient machinery
will further promote economic spending from the company’s part.

Social Environment Analysis

As previously mentioned, the high per capita per income comes with a busy lifestyle. In such
a city, convenience matters enough for residents to spend on immediately available FMCG
products. Additionally, the nation has seen a huge boom for FMCG product demand since
2010, which will only grow with time.

Technological Environment Analysis

Technology plays a huge role in VENDO’s business model. With the available technology,
VENDO will perform better than India’s expectations on vending machines but (as
mentioned later in expansion plans) will get better with more time in the market. However,
the firm also faces threat of obsolete technology in case of new entries into the market but
will make sufficient contingency plans for it.

Environmental Environment Analysis

Vending machines are highly environmental. With the current input of about one and a half
fridge, the firm is able to operate a business unit that would usually demand a reasonably
sized plot, lighting, maintenance and human resource when it takes the form of a shop.

Legal Environment Analysis

Currently, VENDOs will be placed only inside colleges and schools which bypasses the
chance of illegal occupation of public land (further discussed in expansion plan).
Marketing Plan

VENDO is a product designed for the fast paced and technological life of urban dwellers,
therefore, the brand has chosen to follow more contemporary styles of market than traditional
ones.

Marketing Mix

Social Media Marketing

As known, students are highly active on social media. Therefore, an Instagram and Facebook
page dedicated to the brand will do most of the publicity required for the brand. Additionally
the firm will establish a discord server to receive complaints and encourage discussions.

App Marketing

The VENDO app will have a personalized notification system (to the likes of Swiggy and
Zomato) which will send messages in local language (typed out in English). Additionally, a
referral provides 20% discount for all involved parties on their next purchase which will help
increase word of mouth marketing.

Word of Mouth Marketing

Word spreads fast in educational institutions, especially in small colleges. VENDO will bank
on this exact phenomenon, which will do most of the marketing for the company as the entire
local target market will be aware (sentiments on the brand aside) within the first few weeks of
establishment.
Financial Plan

VENDO is a highly capital based venture. Therefore, most of the establishment cost will be
setting up VENDOs while operational cost will lean towards maintenance of the machine.

Breakdown of Establishment Costs

Particular Cost (Rs.)

Company Establishment 3,000
VENDO (per piece) 2,00,000
Transportation (per location) 2,000

Expense Breakdown (Year 1)

Particular Amount per VENDO Total (10 VENDOs)

Rent 10,000 1,00,000
Maintenance Cost 20,000 2,00,000
Marketing 24,000 2,40,000
Human Resource 12,000 1,20,000

Revenue Breakdown (Year 1)

Particular Amount per VENDO Total (10 VENDOs)

Sales 1,20,000 12,00,000

Financial Predictions

Particular – Year Year 1 Year 2 Year 3

Number of VENDOs 10 16 30
Revenue 12,00,000 19,20,000 36,00,000
Operational Cost 4,60,000 7,36,000 13,80,000
Profit 7,40,000 11,84,000 10,20,000
Reserve for Growth 3,00,000 4,00,000 5,00,000
(Growth Includes R&D)
Operational Plan

The operations of VENDO follow a simple manner, as in:

• Sales are monitored daily by core team through app database

• Restocking happens the next morning after the stock has been depleted.

The app-based sales system of the brand makes it very easy for the core team to control when
and where to deploy resources.

Additionally, the business works in a sector with low operational costs and transactions,
thereby leaving time for the core team to work on capital allotment.

Restocking Plan

• VENDO delivers notification when an item is delivered.

• Restock notification is sent to team when the depleted resources are enough to prompt
a restocking (as in not only one item is depleted).
• Restocker takes note of the new configuration of restocking, which will be updated by
team post restocking.

Decision Plan

• Team is focused mostly on acquiring new venues for VENDO

• Continuous restocking notification will help team understand the demand for
products, leading them to order them more.

Human Resource Plan

The brand does not require large human capital for operational purposes, but managerial.
Therefore, the firm mostly consists of managerial personnel who take decisions on expansion
and restocking, while also working on the manual restocking part in the beginning before
hiring part time employees for restocking.

(Being a highly capital-intensive firm, there is no need for a higher-level human resource
plan than this)

(Being a start-up, the only employees in the firm are the promoters as no others are required.)
Expansion Plan

• Importing vending machines from other nations, which will prove to be a huge
technological boost for the brand. These ‘nevVENDOs’ (pronounced ‘New
VENDOs’) will be placed in non-educational locations (discussed further) that attract
a higher class of customers.
• Expanding to office spaces. This will solve VENDOs biggest problem until date –
Vandalism. Additionally, office spaces can include even higher grade of VENDOs
(previously discussed and will be discussed further) which provide newer range of
products.
• Hot Food VENDOs – VENDO will expand into providing instant Pizzas, Cup
Noodles and Coffees which will only be possible with the execution of the first point.
• VENDO wallet. A wallet for in the app will make transactions easier and also act as a
short-term source of funds for the firm.