STUDY ON BUSINESS MODEL OF DARSHINI HOTEL IN BANGALORE

“A REPORT ON THE BUSINESS MODEL OF DARSHINI HOTELS IN BANGALORE”

An SM Assignment

Christ University Institute of Management,

Bangalore.

SUBMITTED BY:

CHRISTINE-0920233

MANISHA-0920337

RASHMI-0920245

Dharshini hotel business model Page 1


CONTENTS

1. Introduction to the Darshini hotels2. Introduction to Segment A hotels3. Objective of Study4. Research Methodology5. Analysis and Findings6. Conclusion7. Annexure


DARSHINI'S OF BANGALOREAll over the City

It's like the Starbucks or the McDonalds of America or the Tim Horton’s of Canada. The fast food outlets dishing out hot crunchy masala dosa, soft idlis, crispy vade and hot piping coffee are all over Bangalore now. Bangalore literally has thousands of Darshinis under several individual managements serving south Indian vegetarian food. They usually are identified with small round steel tables and diners standing around them eating dosa, idlis, vada's, curd rice, vegetable pulao, rice with sambar, lemon rice, bisibele bath, uppittu, kesaribaath and coffee.

The low-cost and "on the go" breakfast and lunch are a big hit among all class of people and it is hard to find any good quality Darshini that is not overcrowded by the day.

It is well known that the Darshini culture was introduced by one Mr. Prabhakar in 1983. Inspired by the fast food chains abroad, he started the first Darshini called 'Cafe Darshini' in Jayanagar. The success of Café Darshini saw the proliferation of several Darshini’s and the many existing coffee bars renaming themselves into some Darshini. Wikipedia calls Mr. Prabhakar as Darshini Brahma , since he started the concept of Darshini and made the cost of food affordable to the general public. It is estimated that there are over 5000 Darshini's in the city itself. There are several Darshini’s which have maintained a good quality of food using fresh and quality ingredients.

While most of the Darshini’s serve only south Indian vegetarian food, some metamorphosed to Chinese food to suit the Indian palate by introducing everything from the original gobi to the latest mixed-vegetable manchurian, and even they have thrived. One wonders whether it is the name "Darshini" that brings success or the food they serve. Even the entry of multinationals like McDonalds, KFC or Pizza Hut has not been able to shake the popularity of the Darshini’s.

The secret for the success of the Darshinis is the quick tasty bite one gets which is also easy on their wallet. Darshinis also have become popular hangout joints for office goers, college students or for that matter to anyone for a quick bite and a hot cup of Coffee and gossip.

Some of the these fast food joints adhere to strict guidelines from the BMP like the staff wearing head gear and aprons and the hotel cooks wearing caps. Darshinis have also been instructed to install ultraviolet water filters with Bureau of Indian Standards seals, to supply drinking water for their customers. Their Kitchens are to be cleaned with lime wash and colour wash every three months and the process is to be recorded in the inspection book. The guidelines also stipulate that garbage should be stored in a covered dustbin while the vegetables, grains and other provisions as well as the prepared food, should be separately stored. The note adds that tables and chairs in these eateries and hotels should be kept scrupulously clean. Thus one can eat in peace at these Darshinis without the fear of unhygienic food or unclean premises.

Long live the Darshini Culture that has vowed to feed the average man with tasty food without pinching his pocket much. And the credit goes to Bangalore as no other city in India has popularized this model.


INTRODUCTION TO SEGMENT ‘A’ HOTELS

There are primarily 4 segments of these food joints/restaurants-A, B, C, D.

Segment A belongs primarily to the outlets such as Shanti Sagar etc. where one needs to stand and consume food and its for the busy office goers and college goers. Hygiene etc. is pretty ok in these places though drinking water is not recommended as a general rule ex: The Darshini’s of Bangalore etc. These are usually self service type restaurants to lower operating expenses/costs. They also double up in the evenings with a chat corner to serve yummy stuff such as BhelPuri, Masala Puri, PaniPuri etc.

Segment B belongs to the places such as ShanthiSagar where one gets to sit and consume food. Hygiene and food quality is better and service is also much better. These would also have a chat corner serving the same stuff as above and in most cases, serving PavBhaji etc.

Segment C belongs to the places such as Tandoor, Samarkhand, Angeethi, 3 quarter Chinese, Bamboo Shoots, etc.

Segment D belongs to the 5 star restaurants and the 7-star restaurants such as the Taj, The Oberoi, The Leela Palace etc. where the upmarket people typically frequent.

Some of the Famous Darshini’s:

These are some of the top vegetarian fast food restaurants across Bangalore that stands as a testament to the city’s ever growing Darshini culture.

Adigas

It is one of South India's most popular chain of vegetarian eat outs.This chain of vegetarian restaurants / fast food joints was commenced by a second generation entrepreneur and an engineering graduate, K N Vasudev Adiga in the year 1994. Adiga’s is an offshoot of the famous “Brahmin’s Coffee Bar” at Basavangudi - Bangalore which was started in the year 1965 by his father, the visionary – late Sri K V. Nageshwar Adiga, alias Nagesh Rao.From dawn to late night seven days a week, 365 days a year several thousands of people step in and step out to quench their thirst and feed their hunger at Adiga's. It serves authentic South Indian food and also multi-cuisine vegetarian food, viz., North Indian, Tandoori, Chinese, Chats and Pav Bhaji, Juice/ice Creams etc. Adiga's cuisine weaves a culinary magic and is undoubtedly the best in Bangalore city.


Mavalli Tiffin Room (MTR)

The Mavalli Tiffin Room, restaurant, (commonly known as MTR) was founded by Mr. Parampalli Yajnanarayana Maiya and his brothers in the year 1924. Since the 1970s, MTR has expanded and diversified, with MTR Department Stores opened next to the restaurant, and an outlet opened in Chennai. Currently the brand MTR represents two separate entities; the MTR restaurant business and MTR Foods, the pre-packaged food business. MTR Foods Private Limited is amongst the top five processed food manufacturers in India. wide range of products include ready-to-eat curries and rice, ready-to-cook gravies, frozen foods, ice cream, instant snack and dessert mixes, spices and a variety of accompaniments like pickle and papad. Various outlets in Bangalore: Lalbagh Road, Hebbal Main Road, Rajajinagar, Kumara Krupa Road. Namma MTR, in Bangalore, is a unique retail chain that allows its customers to experience the wide MTR range.

Kamat Hotels

If you are in the mood for veg fast food Kamat is the place to go. From rava idlies to sumptuous vada sambar, you name it Kamat serves the best. The first Kamat restaurant was established in Hubli in 1948. It was a hard task in those days, to set up a chain of hotels and restaurants in the absence of any institutional finance, but under the leadership of Late Shri RP Kamat, the family persevered, undaunted by any impediments. Today Kamat Group is a chain of hundred odd vegetarian restaurants and hotels spread over Kanrnataka. They serve a delectable range of south Indian and north indian dishes, chinese, chats, ice creams and fruit juices.

New Shanthi Sagar

New Shanthi Sagar, a pure vegetarian restaurant has over 50 outlets across the city. It has established itself as one of the premier vegetarian restaurants in the city. Mornings and afternoons always bring in hordes of office-goers who drop by for their share of South Indian meals. Family crowd is usually seen in the air-conditioned space upstairs. However, to experience a typical South Indian food joint it is best to opt for the ground floor with self-service option. Plus, this section is economical as compared to the dining hall upstairs. New Shanthi Sagar is popular for its pure vegetarian South Indian food. However, North Indian food, Jain food and Chinese food are also available.

Sukh Sagar

Sukh Sagar is one of the oldest and most loved vegetarian restaurant chains in Bangalore. The chain was founded in the year 1962 by Mr. Suresh Poojary. The renowned brand spread across 20 branches in the city has an extensive menu featuring multiple cuisines. There’s a wide range of dishes available in North Indian, Jain and Chinese cuisine too. The regular paneer dishes,


noodles, manchurian, raita, soups, salads, biryani and pulao are available. Out of these their Peas biryani and Mushroom spring roll are a must have. To wind up your meal at Sukh Sagar, there is a scrumptious choice of Indian sweets too like Jalebi, Rasgulla, Cham-cham, Mysore pak and the likes.

OBJECTIVES:

Primary objective:

1. To understand the business model of Type ‘A ‘ segment.

Secondary objectives:

2. To understand the pricing strategies & revenue of fast food hotels

3. Customer profile.

4. Locations of fast foods

5. Understand the supply chain

6. Understanding the demand and supply strategy with respect to external price fluctuations (Inflation)

7. Infrastructure

8. Pay structure of employees, employee profile

9. To understand the resource management

10. To understand time management (fast service)

11. To find out the turnover of fast food restaurants.

12. To understand Inventory system (replenishment of perishable and non perishable stocks)

13. Maintenance (hygiene).

14. Cost

15. To understand service time (customers peak time)


RESEARCH METHODOLOGY

SCOPE

The study pertains to understanding the business model of the Darshini hotels in Bangalore.

It revolves around understanding their target market, pricing strategies, revenue generation,

unique propositions, and their resource management.

TYPE OF RESEARCH:

Exploratory research, Primary data collection, Interview method(unstructured)

SOURCES OF DATA:

Primary data: - Unstructured interview was conducted to collect responses from the

owners/managers of the Darshini hotels.

SAMPLING TECHNIQUE:

Random sampling method was used. Convenient sampling.

SAMPLE DESIGN:

Sampling unit: owners/managers of Darshini hotels

Sample size: 4

Sampling procedure: random selection

Sampling media: at the respective locations.

LIMITATION OF THE STUDY:

Acquiring permission from managers to conduct study.

Since the number of Darshini hotels in bangalore is very large in number conducting the

study of all the hotels would be impractical as the time and cost involved would be high

hence the sample of four hotels were taken into consideration.

Apprehensive on revealing the information about the profit and revenue generation.

Analysis and Findings


1. Anna Kuteera – It is a 45 year old hotel business, located in Banshankari,3rd stage,katriguppe. It has another branch located in the city market premises.

2. Udupi Upahar – It is a 20 year old hotel, located in Banshankari,3rd stage.3. SLV – It is a 35 year old hotel, located in Gandhi bazaar.There are 6 branches.4. Adigas- It is a 16 year old hotel, located in Gandhi bazaar.

1. Anna Kuteera

Target Market: Whoever wants fast service. Whoever wants fresh food. Convenience.

Pricing Strategy: Not based on competition, based on quality vis-à-vis quantity. Per unit pricing is done by adding 10% more to the cost price (i.e. CP + 10% of CP= SP)

Managing food inflation: Speculates for a while during price fluctuation time (approx 2 months) and pricing is done accordingly .

Revenue generation: did not reveal information.

Management of Supply and Demand: perishable goods like vegetables and fruits purchased on daily basis, vegetables like potato and onions are bought on weekly.

- They prepare a fixed amount on per day basis and when stock finishes they close the counter accordingly even if there is demand for it.( ex: fixed amount of dosa is prepared every day and when dosa gets over they don’t prepare extra instead they close the counter)

Time management: trained work force to handle each sub units like juice, snacks, meals, Chinese etc.

Peak hours: Breakfast hours, lunch hours, snack hours, dinner.

Reasoning behind the locations: Own land ( area was developing so went in)

Future plan of action: No plans ( no desire to expand)

Labor management: High attrition rate. Critical labor management.

2. Udupi Upahar

Target Market: Labour class, which includes professionals


Pricing Strategy: Competitive pricing

- Its opposite to Anna kuteera and pricing is done based on competition with Anna kuteera.

Managing food inflation: Fixed price. whether its loss or profit

Revenue generation: 50k to 60k anually

Management of Supply and Demand: The raw materials are procured once in 2 days.

Time management: Every sub-unit is handled by a different team, and so, service is fast.

Peak hours: Morning 8 to 10am, afternoon 1 to 2pm and dinner time.

Reasoning behind the locations: This business has been there since the past 20years.

Future plan of action: No plans

Labour management: High attrition rate and critical labour management.

3. SLV

Target Market: School kids and family.

Pricing Strategy: No competitive pricing. Pricing is based on the prices of inputs like sugar,vegetables..etc

Managing food inflation : checking for 2 to 3 months and then pricing accordingly.

Revenue generation: 10lakhs per month including slv fast food and E&D 2.

Pay structure: 3.5k – 4k per employee.

Management of Supply and Demand: They also follow the same strategy of procuring the raw materials on a daily basis.

Time management: There are enough employees to serve the customers, hence quality service is maintained. Their USP is customer service.

Peak hours: Breakfast hours, lunch hours, snack hours, dinner. It is seasonal like During rainy season the customer walk-in is less in number as compared to summer season.

Keeping in tune with the law: 22-27 departments get inspected on a regular basis.

Future plan of action: Yes, plans are there to expand

Labour management; High attrition rate.


4. Adigas :

Target Market: school, college going and families

Pricing Strategy: based on food quality.

Managing food inflation: Speculate and price accordingly.

Revenue generation: Did not reveal any information.

Management of Supply and Demand: routine buying of perishables and non-pershiables.

Time management: There are sufficient number of employees to take care of the customers in each section, like dosa, tea, parcel, Chinese, rice baths, etc.

Peak hours: Morning 8 to 10am, afternoon 1 to 3pm and dinner time.

Reasoning behind the locations: based on the residential, commercial and institutional areas.

Future plan of action: plans for expansion.

Labour management; High attrition rate .

Conclusion


Darshini hotels are those self-serve hotels where one needs to stand and consume their food. Basic amenities are provided like drinking water. Such hotels serve breakfast items, lunch, snacks and dinner. They also have a chat corner serving items like pav bhaji, masala puri, bhel puri, etc. Each section is handled by different trained employees. These hotels target people who want fresh food in the quickest possible time. These include the busy office goers, school/college going children, professionals. The menu is affordably priced.

Pricing strategy is usually done based on competition, quality and price of input materials. When it comes to price fluctuations, there is little that they can do except speculating and monitoring it and act accordingly.

Coming to inventory, they buy the stock on a daily basis and there is no fixed supplier. They visit wholesale markets and 2 to 3 suppliers, based on the quality and price, they procure raw materials.

Peak hours remain the same everywhere (morning, noon and dinner time).

While few owners have opened hotels on their own land, there are others who acquire and strategically locate themselves. It is more like tradition, that these hotels exist. On an average, these hotels have been existing since the past 30 years, and continue to hold patronage as most of these hotels have loyal customers. They cater to all those residents in and around it.

Labor management is critical and attrition rate is very high in these types of hotels. It could be because the pay structure is not lucrative enough.

Around 25 government departments are involved in inspecting, certification, tax payments, hygiene, maintenance, quality maintenance, etc and these hotels need to comply with the standards, violation of which will lead to penalties and sometimes close down of hotels.

These hotels have been popular and successful, since its inception, owing to the quality of food, overall hygiene, taste of food served to cater to various palates, loyal customer base, and the ambience.

Annexure:


Questionnaire

1. Whom are you targeting?

2. How do you price your items on the menu?

3. How do you manage the price fluctuations?

4. What is the revenue generated per week/month/year?

5. How do you procure the supplies(raw materials)?

6. How do you manage to provide fast service?

7. Peak hours? Is it seasonal? Demand?

8. What makes you decide to for a particular location?

9. Where are you going next? Future plans?


Documents

STUDY ON BUSINESS MODEL OF DARSHINI HOTEL IN BANGALORE