REQUEST FOR PROPOSALS

FOR MARKET RESEARCH STUDY

ON

COFFEE CONSUMPTION IN INDIA

&
ATTITUDE TOWRADS COFFEE DRINKING -
2009

MARKET INTELLIGENCE & STATISTICAL UNIT

COFFEE BOARD, BANGALORE
 MARKET INTELLIGENCE & STATISTICAL UNIT
COFFEE BOARD, No. 1, Dr B R AMBEDKAR VEEDHI, BANGALORE, 560001

Dear Sir,

Subject: Request for proposals for Market Research Study on Coffee Consumption in
India & Attitude towards coffee drinking – 2009 –Reg

1. You are hereby invited to submit technical and financial proposals for Market Research Study on Coffee Consumption
in India and Attitude towards coffee drinking, in order to estimate the demand for coffee, consumption patterns, habits
and attitudes during the year 2009 which could form the basis for future negotiations and ultimately a contract between
you and Market Intelligence & Statistical Unit

2. The purpose of this assignment is to understand the patterns of domestic consumption and the attitudes towards
coffee consumption. The study would cover the key areas of consumption patterns in both urban and rural India with a
deliverables of penetration, volumes consumed, variety of coffee consumed, share of throat, socio-economic groups,
chicory usage and its awareness. The study also covers on attitude of coffee consumers to understand the image of the
beverage in the minds of consumers with respect to quality, variety, price, additives especially chicory, positive and
negative associations related to consumption as well as drivers and barriers to coffee consumption.

Objectives of Research

(a) To estimate the demand for coffee in India in 2009

(b) Share of coffee in the basket of beverages consumed

(c) To understand current patterns in domestic coffee consumption and the changes from the last studies carried
out by Coffee Board

(d) To understand behaviour related to coffee consumption in cafes

(e) To estimate the Chicory tonnage out of the total coffee market – percentage of chicory in coffee-chicory
blends consumed

(f) To identify potential opportunities for growth

(g) To understand attitude towards coffee drinking

3. The following documents are enclosed to enable you to submit your proposal:

(a) Terms of reference (TOR) (Annexure 1);

(b) Supplementary information for Market Research Agency, including a suggested format of company credentials
(Annexure 2); and

(c) A sample format of the contract for Market Research Agency services under which the service will be
performed (Annexure 3).

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4. The Submission of Proposals: The proposals shall be submitted in two parts, viz., Technical and Financial and should
follow the form given in the "Supplementary Information for Market Research Agency."

The proposals will be received in the office of the Market Intelligence & Statistical Unit, Coffee Board, No.1, Dr B R
Ambedkar Veedhi, Bangalore 560001 upto 3.00 PM on October 5th, 2009.

5. Deciding Award of Contract

Quality and competence of the Market Research Agency service shall be considered as the paramount
requirement.

Negotiations will be held with you only if the technical proposal is acceptable. You must be prepared to furnish the
detailed cost break-up and other clarifications to the proposals submitted by you, as may be required to adjudge the
reasonableness of your price proposals. If the negotiation with you is successful, the award will be made to you. If
negotiations fail, and if it is concluded that a contract with reasonable terms cannot be concluded with you, the process
of selection of Market Research Agency, issue of letter of invitation etc. will be repeated till an agreed contract is
concluded.

6. Please note that the Coffee Board is not bound to select any of the Market Research Agency submitting
proposals.

7. You are requested to hold your proposal valid for 45 days from the date of submission during which period you
will maintain without change, your proposed price. The Coffee Board will make its best efforts to finalize the
agreement within this period.

8. Please note that the cost of preparing a proposal and of negotiating a contract including visits to the Coffee
Board if any is not reimbursable as a direct cost of the assignment.

9. Assuming that the contract can be satisfactorily concluded in October 2009, you will be expected to take-
up/commence with the assignment in November 2009.

10. We wish to remind you that any other firm with which you might be associated with, will not be eligible to
provide any goods or services resulting from or associated with this assignment.

11. Tax Liability

Please note that the remuneration which you receive from this contract will be subject to the normal tax liability
in India. Kindly contact the concerned tax authorities for further information in this regard, if required.

Director of Finance
Coffee Board

Enclosures:

Annexure 1. Terms of Reference.

Annexure 2. Supplementary Information to Market Research Agency.

Annexure 3. Draft contract under which service will be performed.

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Annexure - 1
TERMS OF REFERENCE

Market Research Study on Coffee Consumption in India & Attitude towards coffee drinking - 2009

The basic objective of this market research is to understand the patterns of domestic consumption and the
attitudes towards coffee consumption. The study would cover the key areas of consumption patterns in both urban and
rural India with a deliverables of penetration, volumes consumed, variety of coffee consumed, share of throat, socio-
economic groups, chicory usage and its awareness.

The study also covers on attitude of coffee consumers to understand the image of the beverage in the minds of
consumers with respect to quality, variety, price, additives especially chicory, positive and negative associations related
to consumption as well as drivers and barriers to coffee consumption.

Objectives of Research

(h) To estimate the demand for coffee in India in 2009

(i) Share of coffee in the basket of beverages consumed

(j) To understand current patterns in domestic coffee consumption and the changes from the last studies carried
out by Coffee Board

(k) To understand behaviour related to coffee consumption in cafes

(l) To estimate the Chicory tonnage out of the total coffee market – percentage of chicory in coffee-chicory
blends consumed

(m) To identify potential opportunities for growth

(n) To understand attitude towards coffee drinking

Scope of Research

PART I. Coffee Consumption in India - 2009

The key research objectives are:

• To study the beverage consumption habits in general and the coffee consumption habits in particular for the
following markets:
o All India urban (1 lakh plus population strata)
o All India semi-urban towns (Less than 1 lakh population strata)
o All India rural
o In each of the above cities, towns and villages
By socio-economic groups
By age

• Understand beverage consumption patterns by:

o Category i.e. instant vs. filter Coffee
o Location: in home / out of home

• To estimate the total volume of beverages consumed in urban, semi-urban and rural markets

• To estimate the total volume of coffee consumed in urban, semi-urban and rural markets
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• To estimate coffee consumption by:

o Category i.e. instant vs. filter Coffee
o Seasons: Summer vs Winter

• To estimate the Chicory tonnage out of the total coffee market – Chicory is part of coffee consumption in India.
Now Coffee Board desires to understand better on the consumption of chicory in the country.

The broad areas, which the research should cover:

Consumption patterns – Urban India and Rural India

o Penetration
o Volumes consumed
o Type of coffee consumed
o Share of throat

The areas of enquiry related to consumption habits:

• Categories of Beverages consumed.

o Tea
o Coffee
o Milk
o Buttermilk
o Malted drinks
o Soft drinks
o Squash / Juice / Home made drinks etc.
o Other beverages

• Frequency of consumption
o Ever consumed
o Consumed in past 12 months
o Consumed occasionally
o Consumed daily
o Consumed yesterday
o First drink of the day

• Number of times consumed

o In a day
o Yesterday

• Quantity of consumption
o Size of the cup

• Number of cups consumed

o In a day
o Yesterday

• Where consumed
o In home
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o Type of coffee: instant or filter

• Out of home
o Cafes
o Hotels
o Office
o Vending machines
o Others

• Consumption habits specific to coffee consumption

o Type of coffee consumed: filter or instant
o Hot vs. cold coffee
o Roast & Ground (R&G) vs. instant coffee

• Market segmentation by
o Brands
o Blends – Pure coffee & chicory blended
o Instant and Roast & Ground

• Popular coffee brands and their market share

• Estimation of sales volume of coffee (R&G and instant coffee) in supermarkets, neighbourhood roasters and
retail stores

• Analysis and reporting of results in close coordination with Coffee Board

PART II. Attitude towards coffee drinking

The basic objective of the research on attitude of coffee consumers is to understand the image of the beverage in
the minds of consumers with respect to quality, variety, price, additives especially chicory, positive and negative
associations related to consumption as well as drivers and barriers to coffee consumption.

The broad areas, which the research should cover, are as follows:

Consumers habits and preferences

- Quantify
• Consumers
• Non-consumers
• Occasional consumers

But focus is on young consumer of above categories

- Qualify non-consumers
• Reasons not to drink (consumption barriers)
• Beverages consumed
• Opinion about coffee likelihood to consume

- Qualify occasional consumers

• Reason for occasional consumption
• Beverages consumed
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• Opinion about coffee

• Likelihood to increase consumption

- Qualify consumers
• Profile (income, gender, age, etc.)
• How habit started?
o age
o home or out-of-home
• Consumer habits
o reasons to drink coffee (consumption drivers)
o occasion
o place
o type of product
soluble
roast and ground
ready to drink
cold
other
o type of coffee (pure, mixed, etc.)
o consumption of coffee based beverages (cappuccino, shakes, etc.)

Recall and Trends

- Beverage consumption
• which beverage do people think of when thirsty or when they want to drink (share of mind)?
• Which beverage do people actually drink? (share of Throat)
• Positive associations with Coffee
• Negative associations with Coffee
• Most liked and disliked beverages
o how do they compare with coffee, if not coffee?

- Consumption trends
• Which beverages do people plan to drink more and less in future?
o Reasons to drink more Coffee
o Reasons to drink less Coffee
o Beverages that will replace Coffee

- Coffee quality
• What makes the coffee good?
o Taste
o Aroma
o Color
o Strength
o Temperature
o Other
• Is coffee pure?
o Yes
o No; what is it mixed with?
• Is pure coffee better?
• What do you like in the coffee you drink?
• What do you dislike in the coffee you drink?

• Pure vs chicory mixed coffees

o Probe the consumer attitudes towards chicory vs pure coffee
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• Price and quality sensitivity – willingness to pay for quality

• Preferred type of coffee and drinking occasion
• Coffee and health ( Do traditional / modern medicine interface with coffee drinking?)
• Brand loyalty – willingness to change brands (Quality induced? Price induced)
• Sensitivity to advertising
• Other attitudinal factors (parents opinion about coffee drinking by children – coffee initiation at home?).

Sample size and centres of study proposed

Independently for two parts of the study

1. No. of samples: Urban – 6000

Rural – 1000
2. Coverage:
Urban – Socio Economic class A,B,C in all 4 zones – North, East, West, South
Urban – Socio Economic class D and E in South zone only
Rural – Socio Economic classes R1 and R2

Urban centres cover both large and small towns as listed in item No. 3. While Rural consumption survey
only in the South and rural coverage includes villages with population greater than 2000 and also less than 2000 in
the districts.

3. Survey centres
URBAN
North - Delhi, Kanpur, Ajmer, Ludhiana
East – Calcutta, Guwahati
West – Mumbai, Pune, Gwalior
South – Chennai, Madurai, Tanjore, Rasipuram, Bangalore, Udipi, Hubli, Chikmagalur, Hyderabad,
Vijayawada, Warangal, Siddipet, Cochin, Trivandrum, Calicut

RURAL (DISTRICTS/ TALUKS)

Tamil Nadu - Chennai, Madurai, Tanjore, Rasipuram
Karnataka - Bangalore, Udipi, Hubli, Chikmagalur
Andhra Pradesh - Hyderabad, Vijayawada, Warangal, Siddipet
Kerala - Cochin, Trivandrum, Calicut

Note: The earlier coffee consumption study reports with reference to the years 2005 & 2008 and Attitude towards
coffee drinking with reference to the year 2007 are available with Coffee Board. Interested market research agencies
may purchase these reports by paying Rs. 500/- for each report from Ag. Economist, Coffee Board, No. 1., Dr.
Ambedkar Veedhi, Bangalore-560001.
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Annexure - 2

SUPPLEMENTARY INFORMATION FOR MARKET RESEARCH AGENCY

Proposals

1. Proposals should include the following information:

(a) Technical Proposals

(i) Market Research Agency credentials (F-2).
(ii) Any comments or suggestions of the Market Research Agency on the Terms of Reference (TOR).
(iii) A description of the manner in which Market Research Agency would plan to execute the work. Work
plan time schedule in Form F-3 and approach or methodology proposed for carrying out the required
work.
(b) Financial Proposals

The financial proposals should include the Schedule of Price Bid in Form F - 4.

2. Two copies of the proposals should be submitted to the Ag. Economist, Coffee Board, No 1, Dr B R
Ambedkar Veedhi, Bangalore 560 001.

3. Contract Negotiations
The aim of the negotiations is to reach an agreement on all points with the Market Research Agency and initial
a draft contract by the conclusion of negotiations. Negotiations commence with a discussion of Market
Research Agency proposal, the proposed work plan, and any suggestions you may have made to improve the
Terms of Reference. Agreement will then be reached on the final Terms of Reference and the bar chart, which
will indicate periods in months and reporting schedule. Once these matters have been agreed, financial
negotiations will take place.

4. Terms of Payment

• 30% on submission of inception report

• 40% on submission of draft final report

• 30% on submission of final report and approval thereof.

Note: All payments shall be made on submission of pre-receipted bills by the Market Research Agency in duplicate
for respective stages.

“The work is to be completed as per agreed time frame of Five (5) months from the date of inception. If the
study is not completed within the time frame, penalty for delay shall be charged at the rate of 0.5% of the
contract value per week to maximum 5% for the period of delay. In case of delay beyond 10 weeks for non-
completion of contract, Coffee Board shall retain right to cancel the contract and all payments made till that
day shall liable to be refunded and the agency will be black listed”.
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5. Force Majeure
The successful bidder shall not be liable for liquidated damages, or termination for default if and to the extent
that it’s delay in performance or other failure to perform its obligations under the Contract is the result of an
event of Force Majeure.

If a Force Majeure situation (Such events may include, but are not restricted to, acts of the Coffee Board, in its
capacity as a buyer, wars or revolutions, terrorist attacks, fires, floods, epidemics, quarantine restrictions and
freight embargoes) arises, the bidder shall promptly notify the Coffee Board, in writing of such condition and
the cause thereof. Unless otherwise directed by the Coffee Board, in writing, the bidder shall continue to
perform its obligations under the Contract as far as is reasonably practical, and shall seek all reasonable
alternative means for performance not prevented by the Force Majeure event.

6. Review of Reports
A review committee constituted for this purpose by the Board will review all outputs/reports of Market
Research Agency (inception, progress, intermediate and draft final and final report) and suggest any
modifications/changes considered necessary within reasonable period.
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FORM NO.F-1

From To
The Director of Finance
Coffee Board
——— No 1, Dr B R Ambedkar Veedhi
——— Bangalore 560 001
———

Sir:

Submission of proposals for Market Research Study on Coffee Consumption in India

and Attitude towards coffee drinking - 2009 – reg

I/We, ———————————, a professional Market Research Agency herewith enclose Technical and
Financial Proposal for selection as Market Research Agency for Market Research Study on Coffee Consumption in
India and attitude towards coffee drinking – 2009.

We undertake that, in competing for (and, if the award is made to us, in executing) the above contract, we will
strictly observe the laws against fraud and corruption in force in India namely “Prevention of Corruption Act 1988”.

We hereby certify that we have taken steps to ensure that no person acting for us or on our behalf will
engage in bribery.

Yours faithfully,

Signature: —————

Full name —————

and address: —————

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FORM F-2

Market Research Agency Profile

(To be submitted by agencies on their letter heads)

i. Background
a. Name of the Market Research agency

b. Full address of the Head office

Tel. Nos. ------------------, Fax No. ------------------, E – mail ---------------------

c. Address of the Bangalore Office

Tel. Nos. ------------------, Fax No. ------------------, E – mail ---------------------

d. Year of Establishment
Legal status of agencies (Proprietor/Partnership/Private Ltd./Public Ltd.)

ii. Infrastructure facility

a. No. of regional offices and their location
b. No. of persons working (separately for different offices)
c. Any other.

iii. Services offered

iv. Clients - List of clients presently serving (public sectors/private sectors)

v. Expertise and capabilities

a. Leading research projects carried out by the company in recent three years on similar lines (Note:Please attach
certificates from the employer by way of documentary proof where ever appropriate).
b. Sector expertise related to Coffee
c. Nation wide field work capabilities
d. Data entry checks and quality bench marks adopted for field surveys.

vi. Past experience in market research studies with Coffee Board, please attach copy of appointment

Certification:

I/we hereby certify that all the particulars given above are correct and true to the best of my knowledge.

Date:
[Signature of Key Person] Day/Month/Year

Full name of Key Person:______________________________________

Designation __________________________________

Address_____________________________________

Tel. Nos. ------------------, Fax No. ------------------, E – mail ---------------------

Note:
1. If needed, you may use separate sheets for explaining the above points.

2. COFFEE BOARD reserves the rights to verify the facts given by the agency, with the authorities, if so required.
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FORM F-3

WORK PLAN TIME SCHEDULE

A. Activities

Sl. Item Monthwise Program

No. 1st 2nd 3rd 4th 5th

B. Compilation and submission of reports

1. Inception report – within 15 days of awarding contract

2. Periodical Monthly Status report

3. Draft report – within 5 months of inception of study

4. Approved final report along with summary of findings

5. Data set
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FORM F-4

SCHEDULE OF PRICE BID

___________________________________________________________________________________
ITEMS AMOUNT
In figures Rs. In words
___________________________________________________________________________________

1. Market Research Agency Services for the study

Total cost of the study

2. Applicable Tax @ ……………..%

Signature of Market Research Agency key person

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Annexure – 3

Draft Letter of Contract for Market Research Agency for Study on Coffee Consumption in India and Attitude
towards coffee drinking - 2009

Subject: Proposals for Market Research Study on Coffee Consumption in India and Attitude towards coffee
drinking - 2009

(Name of Market Research Agency & Key person)

We herewith confirm your proposal for Market Research Study on Coffee Consumption in India is accepted
specified in the attached Terms of Reference.

For administrative purposes Director of Finance & Ag. Economist, Coffee Board has been assigned to administer
the assignment and to provide you with all relevant information needed to carry out the assignment. In the event of
termination, the Market Research Agency shall be paid for the services rendered for carrying out the assignment to the
date of termination, and will provide the Ag. Economist with any reports or parts thereof, or any other information and
documentation gathered under this Contract prior to the date of termination.

This Contract, it'

s meaning and interpretation and the relations between the parties shall be governed by the laws
of the Union of India.

Set out below are the terms and conditions under which you have agreed to carry out the assignment. The services
to be performed, the estimated time to be spent, and the reports to be submitted will be in accordance with the attached
Terms of Reference.

This Contract will become effective upon confirmation of this letter by you and will terminate on submission of
final report of the study within four months of this agreement.

Payments for the services will not exceed an amount of ________________.

Payment Terms: are as follows

• 30% on submission of inception report

• 40% on submission of draft final report

• 30% on submission of final report and approved thereof.

The above fee includes all the costs related to carrying out the services, including overhead and any taxes.

“The work is to be completed as per agreed time frame of Five (5) months from the date of inception. If the study
is not completed within the time frame, penalty for delay shall be charged at the rate of 0.5% of the contract value per
week to maximum 5% for the period of delay. In case of delay beyond 10 weeks for non-completion of contract, Coffee
Board shall retain right to cancel the contract and all payments made till that day shall liable to be refunded and the
agency will be black listed”.

The successful bidder shall not be liable for liquidated damages, or termination for default if and to the extent
that it’s delay in performance or other failure to perform its obligations under the Contract is the result of an event of
Force Majeure. If a Force Majeure situation (Such events may include, but are not restricted to, acts of the Coffee
Board, in its capacity as a buyer, wars or revolutions, terrorist attacks, fires, floods, epidemics, quarantine restrictions
and freight embargoes) arises, the bidder shall promptly notify the Coffee Board, in writing of such condition and the
cause thereof. Unless otherwise directed by the Coffee Board, in writing, the bidder shall continue to perform its
obligations under the Contract as far as is reasonably practical, and shall seek all reasonable alternative means for
performance not prevented by the Force Majeure event.
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You shall indemnify and hold harmless, the Coffee Board, against any and all claims, demands, and/or
judgements of any nature brought against you arising out of the services under this Contract. The obligation under this
paragraph shall survive the termination of this Contract.

All materials produced or acquired under the terms of this Contract written, graphic, film, magnetic tape or
otherwise shall remain the property of the Coffee Board. The Coffee Board retains the exclusive right to publish or
disseminate reports arising from such materials. The rights and duties provided for in this paragraph shall continue,
notwithstanding the termination of this Contract or the execution of it'
s other provisions.

You will carry out the assignment in accordance with the highest standard of professional and ethical competence
and integrity, having due regard to the nature and purpose of the assignment, and will conduct yourself in a manner
consistent herewith.

You shall pay the taxes, duties fees, levies and other impositions levied under the Applicable law and the Coffee
Board shall perform such duties, in regard to the deduction of such tax, as may be lawfully imposed.

You will also agree that all knowledge and information not within the public domain which may be acquired
during the carrying out of this Contract, shall be, for all time and for all purpose, regarded as strictly confidential and
held in confidence, and shall not be directly or indirectly disclosed to any person whatsoever, except with the written
permission of Chairman, Coffee Board.

Any dispute arising out of the Contract, which cannot be amicably settled between the parties, shall be referred to
adjudication/arbitration in accordance with Arbitration & Conciliation Act 1996.

Read and Agreed:

Place: (Signature & Name of Market Research Agency Key Person)

Date:

(Signature & Name of Director of Finance, Coffee Board)