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CASE STUDY
Barista Coffee Company Limited
PGP/17/322
PGP/17/332
PGP/17/342
PGP/17/352
PGP/17/355
PGP/17/335
PGP/17/364
JITHIN JACOB
PEEYUSH PATIL
ROHIT DHALL
TANVI MANGLIK
VENU MERH
PRIYA YADAV
PURBA TRIPATHY
Target segment:
* People who generally have dislike/aversion towards the loud atmosphere of
coffee hubs.
* During the first half of the day, students community formed the majority of
customers
* Professionals were expected to visit in the afternoon or the early evening
* Family and friends came in the night
* 23 % of the surveyed customer were less than age of 20
* 46 % of them were in the age group between 20 to 35 yrs
Benefits/Points of difference:
* Places where young crowd can hang around comfortably
* Filled the gap between five star coffee shop and corner coffee stars
* Caf ambience is used as a differentiator. Muted music and dcor projects
itself as a place of coffee lovers
* Scrabble board, Books, music to engage customers. Thus offering experiential
coffee
* Maintaining baristas and customers relationship on an equal level
* Letting the customer hang around for a long time
Unlike other coffee outlets that have positioned themselves as coffee hubs,
Barista positioned itself as fine cafes and as experiential cafes. It is not just a
coffee outlet but awhole premiumexperience customers want to enjoy. Giving it
to franchise might dilute the quality and the standard of experience Barista wants
to offer.
Barista offered wholesome experience to the customers creating an exclusive
ambience with music and dcor, well-furnished shops with soothing and light
colors. It was more of a fine caf than just a coffee hub. One of Baristas major
strengths was the relationship it maintained with its consumers, suppliers and
employees. The relationship between employees and customers is also one of
Baristas highlight. All of this cannot be compromised as it is of high importance
for the brand. Hence they should not adopt the franchise model.
3. Should Barista go for price reduction of its product line or should it continue
with its premium pricing strategy?
Ans.: Since Barista is positioned as a fine caf and it is projected as an experiential
coffee, it should not reduce its price. The price was already slashed in 2003 to
make it affordable to consumers. Barista earns its maximum revenue from SEC A
and SEC B income groups consisting mostly of professionals, working couples and
families. These target groups generally prefer the exclusivity of the coffee
experience to the affordability.
While reduction in price might make Barista more affordable to the students and
certain consumers in the Tier 2 cities, it will also lead to moving away of the
original consumers to other premium offerings.
Also differential pricing is not an option as it will lead to loss of standardization
and inconsistency in Barista.
Another strategy that can be used is pricing the food in Barista cafes at lower
prices. This can lead to increase in revenue from food purchase. As of now, food
accounts of only 30% of the revenue and coffee for 70%. Hence if the food is
priced lower, it will lead to increase in revenue.
Caffe Mocha
Blue Curacao
Peach/Lemon
Iced tea
Chicken Tikka
Savoy Cake
Tier I city
Tier I prices
Tier II city
price(current) (proposed)
price(proposed)
Rs. 40
Rs. 34.00
Rs. 30.00
Rs. 45
Rs. 38.25
Rs. 33.75
Rs. 40
Rs. 60
Rs. 410
Rs. 34.00
Rs. 51.00
Rs. 348.50
Rs. 30.00
Rs. 45.00
Rs. 307.50
Also, in the short run, in order to capture more market, Barista should
introduce more Indian snacks like Samosa, Vada Pav etc. that are not
usually served by its rivals. This would not only Indianize their products, but
also improve their revenue mix. This would help target those people who
are reluctant or cynical about trying out their products. Once, Barista has
captured adequate market share, they should remove the snacks that are
less preferred from their menu and hence, prevent their brand dilution.
In the shorter run, introducing newer snacks will not lead to loss of brand
exclusivity as Barista is an established brand with tremendous amount of
brand recall ability amongst customers. Hence, people will always recognize
Barista with Coffee ( in Tier I cities where it is widely known) with tid-bits
here and there as add ons. However, they will have to be incorporated in
the Tier II cities to generate demand in the beginning.