Mr. Karak Business Plan

Introduction

The UAE is a very peculiar beverage market. Despite living in a perpetually hot climate of the Middle East, its residents have taken a liking to a variety of hot beverages, including various teas and coffees that used to pass through its ports and borders at some point in history.

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Chai Karak is one of such beverages. It combines the noble and exquisite taste of the finest black teas with an exotic mixture of Indian spices, which give the drink a strong flavor coupled with a delicate, milky appearance (Dubash). It quickly became one of the most popular drinks in the country. Distributing high-quality Karak presents a fine business opportunity, as the market still has room to expand and grow. The purpose of this business presentation is to make a case for Mr. Karak’s business model and describe how it will claim its market share.

Terms and Definitions

  • Masala Chai – another name for Chai Karak;
  • Karak – means “Hard” or “Strong” in Hindi;
  • Asli Chai Karak – Karak with saffron and various other ingredients.

Business Idea

The proposed business idea involves purchasing and deploying several mobile cafes made in trucks, in order to service drivers and travelers along major highways. This will be cheaper and more effective than constructing stationary kiosks serving drinks. The trucks would be able to relocate to advantageous spots while providing a similar quantity and quality of the product. In addition, the truck will carry deployable seats, tables, and umbrellas in order to provide a sitting area to rest and chill.

History of the Product

Karak became popular in the Middle East in the 1960s, when large amounts of Indian migrants traveled to the UAE in order to find employment in the development of its oil reserves (Machoul, “Interview”). The local population enjoyed the hot, creamy drink, and soon started producing it on its own, adding a few modifications to the formula based on preference for spices and tastes. Ever since it was known as Chai Karak. The product continues to evolve based on the changes of preference. For example, to appease the Millenials, variations of the classic Chai Karak started to appear, in milkshake and ice cream forms.

History of the Company

Mr. Karak is a small company founded by two Danish brothers, Simon and Adrian Nelbom, in 2014 (Machoul, “Interview”). The company originally started in Kuwait, which was a Blue Sea market, as Karak was not very widespread in this region.

The company managed to claim a fair share of the market, building its shop on the same street as Vol. 1 Coffee – a famous Kuwaiti coffee brand (Makhoul, “Mr. Karak is Now Open”). This choice ensured a steady influx of potential customers, some of which became curious about Masala Chai. The brothers have traveled to India and experimented with local and imported spices, in order to create their own famous Karak flavors.

What Makes Mr. Karak’s Products Special?

There are several advantages that Mr. Karak’s products have over the local brands in the UAE. First is the unique mix of local and imported spices, which make the beverage taste unique and different from everyone else, as the majority of the UAE competitors use only local spices to cut costs. In addition, Mr. Karak has several special offers, such as the Karak shake and Karak ice cream. These unique products combine the delicious taste of milkshake and ice cream with the exotic and spicy flavor of Karak, creating the ultimate refreshing experience.

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Services and Distribution Locations

In addition to providing beverages, the mobile service spots deployed by Mr. Karak will offer places of rest and relaxation for individuals and families wanting to take a short reprieve from a hot and tiresome road trip. For those drivers who are in a hurry and do not want to waste time getting out of the car, Karak can be served through the window, like in a drive-through restaurant. In addition, Mr. Karak will equip all of their mobile spots with audio devices in order to play pleasant music and cater to the atmosphere of roadside romance.

The main distribution locations for our mobile Karak platforms would be the Abu Dhabi – Dubai highway, Dubai – Sharjah highway, and Sharjah – Ras-Al-Khaimah highway. These are the three major transportation arteries in the UAE, meaning a high influx of potential customers. During holidays, it would be possible to relocate the trucks inside the city centers and provide Karak to citizens and visitors in large public spaces.

Vision and Mission

The company’s main vision statement is as follows:

  • To deliver a perfect Chai Karak that inspires perfection and fuels passion in everyone.

The purpose of the company, according to its owners, is not to simply focus on

sales generation, but rather on the quality of service and on brightening the day of its customers. If these goals are accomplished, then sales ought to increase as well, as grateful customers will make sure to tell their friends about Mr. Karak.

The company’s mission statement, thus, is as follows:

  • We make our niche within the hustle and bustle of everyday life so that the tempting whiff of our freshly brewed Chai Karak inspires you to stop, sip, and buy again.

List of Products

Our products include various flavored Karak beverages as well as a few side-products that allow us to diversify our offerings without diverting too far away from the main idea of the company. The list of our products is as follows:

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  • Asli Chai Karak. Our original brand that comes with a variety of flavors, such as ginger, chili pepper, saffron, cardamom, and carcade flower petals.
  • Karak Shake. A milkshake with Karak flavor. Since milk is also used to create regular Karak, the addition of a milkshake does not compromise the taste.
  • Karak Ice Cream. One of the favorite treats for the Millenials, who enjoy their ice cream with a plethora of different flavors.
  • Soft drinks, mineral water, regular tea, and coffee. For those who do not like Karak or do not feel like drinking it at the moment.

Market Segment and Size

The UAE presents a solid marketing opportunity for small businesses such as Mr. Karak. The company is aiming for the soft drinks and beverage sectors, which is currently being dominated by teas, coffees, and various soft drinks. Nevertheless, Karak is also popular in the UAE, meaning that the population will not be unfamiliar with the product. Market sizes are very difficult to estimate, as many individuals purchase beverages on a whim, meaning that exposure will be the main driving factor behind sales.

The total number of citizens in the country is approaching 10 million, 2 million of which are Indian immigrants (Memon). Thus, roughly 27% of the entire population of the UAE are potential customers, for whom Karak is a familiar national beverage. Natives have taken a liking to Karak as well, meaning that the entire country is a potential market.

The mobility of Mr. Karak’s trucks enables the company to be present anywhere it needs to be, reaching out to different cities and The population is very tight-knit and conglomerated in large cities, such as Dubai, Abu Dhabi, Sharjah, and Ras-Al-Khaimah, meaning that it would be possible to reach out for many potential customers during holidays. In addition, a large proportion of UAE citizens possesses personal transport and makes regular trips between the four cities mentioned in the business plan.

The target populations for the advertising campaign are the Emirati, Indians, and Millenials. The natives may be attracted to buy Chai Karak because of its status above the average drinks, such as tea and coffee, as the beverage requires spices to make, effectively making it a premium drink. Indians might be attracted to Mr. Karak’s products due to the familiarity with the beverage as well as due to specific spices brought directly from India.

The catchphrase “Tastes just like home” can be used as a slogan to promote Mr. Karak among immigrants. The Millenials can be attracted by the novelty of other Karak products, such as milkshakes and ice creams. Overall, the company has a solid foundation to work on, and the general benevolence and predisposition towards the product make it likely for Mr. Karak to succeed in its expansion into the UAE.

Works Cited

Dubash, Ashish. “Savour Oman’s Favorite Tea.” Times of Oman. 2017. Web.

Makhoul, Mark. “Mr. Karak is Now Open.Two-Forty-Eighth-AM. 2017. Web.

—. “Interview: Simon and Adrian Neblom of Mr. Karak.Two-Forty-Eighth-AM. 2015. Web.

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Memon, Noor A. “Tea: A Common Man’s Drink.Food Journal, 2013. Web.

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