CUSTOMER PREFERENCE TOWARDS CAFÉ

COFFEE DAY AND BARISTA

A COMPARITIVE STUDY IN BANGALORE

CONTENTS
Chapter -1
 Introduction
 Objectives of the study
 Scope of the study
 Methodology
 Limitations

Chapter 2
Industry Profile

Chapter 3
Company Profile

Chapter 4
Comparative Study

Chapter 5
Data Analysis and Interpretation

Chapter 6
Findings, Suggestions and Conclusion

Annexure
 Questionnaire
 Bibliography

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Chapter -1
INTRODUCTION

 Introduction
 Objectives of the study
 Scope of the study
 Methodology
 Limitations

ATNCC, Shimoga 2
Introduction

The objective of the study is “To compare and study Barista & Café

Coffee Day, identify areas of excellence and areas needing improvement;

and provide suggestions for such improvement”. The aim of this Thesis is

to successfully compare two prominent service sector companies on a

common platform, analyze their working and performance, and highlight

what they are doing well, while providing suggestions and

recommendations for improvement.

Barista and Café Coffee Day were chosen because of their identical

pattern of functioning and growth. They are the only two major players in

the national coffee café industry, and their customers consider both as

interchangeable brands. This is why it is important to study how these

brands differentiate themselves from each other, and attempt to improve

brand loyalty amongst their customers.

For the purpose of this study, I prepared questionnaire, to find out

the relevant primary data pertaining to the functioning and working of

both Barista and Café Coffee Day. The data was collected based on

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information provided by customers visiting Barista and Café Coffee Day

outlets.

Besides the primary data collected with the help of the

questionnaire, I have also collected the relevant secondary data from

various sources like magazines, books and internet and newspapers.

Based on the relevant primary and secondary data, a comparative analysis

has been done so as to find out the areas of excellence and areas of

improvement of both organizations.

The areas of excellence and improvement have been identified

based on factual information, in light of which recommendations and

suggestions have been provided.

This study was conducted in 2011 in Bangalore, India; so the

information is relative to this city.

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OBJECTIVES OF THE STUDY:

 To identify the brand awareness.

 To know the advertisement media they remember the best.

 To find out which coffee shops they prefer and why.

 To find out their personal choice with regard to,

 Taste and Quality of products

 Availability and Delivery of products

 Prices

 Staff Service

 Ambience

 Value for money

SCOPE OF THE STUDY

The research will help both Barista and Café Coffee Day in many

ways to increase their sales and to understand their consumer satisfaction

level. The study will reveal the customer preference towards Taste &

Quality of products, Prices Order/ Delivery time, Order/ Delivery process,

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Performance of staff, Ambience, Availability of products, Value for money

and its Overall performance.

METHODOLOGY

For the purpose of this study, I prepared a questionnaire, to find out

the relevant primary data. The data was collected based on information

provided by the customers visiting Barista and Café Coffee Day outlets.

Besides the primary data collected with the help of the

questionnaire, I have also collected the relevant secondary data from

various sources like magazines, books and Internet and newspapers.

Based on the relevant primary and secondary data, a comparative

analysis has been done so as to find out the areas of excellence and areas

of improvement of both organizations.

The areas of excellence and improvement have been identified

based on factual information, in light of which recommendations and

suggestions have been provided.

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CUSTOMER SURVEY

Survey Methodology

A survey was conducted, consisting of a sample of randomly selected

people. This survey aims to find out how Barista and Café Coffee Day’s

target market, rate their products and services. A copy of the customer

survey is attached in the Annexure.

Characteristics of visit:

The respondents were first asked to describe the characteristics of a

typical visit to a coffee shop. This includes their choice of coffee shop,

frequency of visits, time & money spent on a single visit, average group

size and influential factors affecting their choice.

Comparative Rating:

The survey also asked the customers to rate the following parameters on a

scale of 1-5 (1being the worst, 5 being the best), for both Barista and Café

Coffee Day:

1. Taste & Quality of products.

2. Prices of products.

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3. Order/ Delivery time & Order/ Delivery process.

4. Performance of staff.

5. Ambience.

6. Availability of products.

7. Value for money of products.

8. Overall performance.

LIMITATIONS

o The sampling procedure used being the convenient sampling: the

analysis and findings would lack in accuracy.

o The sample size is not very large owing to time constraint. This

may cause inaccuracy.

o Since the sample is based on cost and time basis the project is

limited in Bangalore only.

o It has been assumed that the respondent have answered sincerely

and correctly.

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 Chapter 2

Industry Profile

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 Industry Profile

Evolution of a Coffee Cafe

The Beginning:

It all began around 1000 A.D. when Arab traders began to cultivate coffee

beans in large plantations. They began to boil the beans creating a drink

they called ‘qahwa’ which translates to ‘that which prevents sleep’. The

drink became widely popular, and the need for coffee beans grew. The

brief timeline for the growth of coffee, cafés and everything related is

given below:

850: First known discovery of coffee berries. Legend of goat herder Kaldi

of Ethiopia, who notices goats are friskier after eating red barriers of a

local shrub. Experiments with the berries himself and begins to feel

happier.

1100s: The first coffee trees are cultivated on the Arabian Peninsula.

Coffee is first roasted and boiled by Arabs making ‘qahwa’.

1475: The world’s first coffee shop opens in Constantinople.

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1554: The first establishment in Constantinople soon becomes widely

popular, and two more cafés are opened.

1654: Coffee enters Europe through the port of Venice. The first Coffee

house opens in Italy.

1652: The first coffee house opens in England. Coffee houses were called

‘penny universities’ (a penny is charged for admission and a cup of

coffee) because a person could visit a café to discuss current affairs and

social issues.

1688: The first Persian coffee house opens. The first coffee house opens

in Vienna. Edward Lloyd’s coffee house opens. It eventually becomes

Lloyd’s of London, the world’s best-known insurance company.

1695: The first sign of the French Revolution had its roots in Parisian

cafés where the people’s movement started gathering steam.

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1700s: The Dutch becomes the first to transport and cultivate coffee

commercially. Coffee is smuggled out of the Arab port of Mocha and

transported to Sri Lanka and India for cultivation.

1721: The first coffeehouse opens in Berlin.

1750: One of Europe’s first coffee houses, Café Greco opens in Rome. By

1763 Venice has over 2,000 coffee shops.

1822The prototype of the first espresso machine is created in France.

1885: A process of using natural gas and hot air becomes the most

popular method of roasting coffee.

1905: The first commercial espresso machine is manufactured in Italy.

1908: The invention of the world’s first drip coffeemaker. Melitta Bentz

makes a filter using blotting paper.

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1933: Dr. Ernest Illy develops the first automatic espresso machine. There

is enormous interest from cafés all around Europe.

1945: Achilles Gaggia perfects the espresso machine with a piston that

creates a high-pressure extraction to produce a thick layer of cream.

1980: coffee is now the world’s most popular beverage, which leads to a

boom in retail and hotel cafés. The American retail café Starbucks is born.

1990s: With the growth of the Internet, cyber cafés are born, providing

Internet access and coffee to users.

2000s: With an increased penetration of PCs in homes, cyber café chains

close, and re-immerge as retail coffee café chains.

Interesting facts about coffee & Cafés:

• Coffee was first known in Europe as Arabian Wine.

• Coffee is presently the second most traded commodity in the world. It is

second only to oil.

• Nescafe was invented by Nestle because it had to assist the Brazilian

government to solve its coffee surplus problem.

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The Coffee Café Industry

The Coffee Café industry is currently one of the biggest and fastest

growing sectors in business. The industry consists of a mix of individual

cafés, hotel cafés and retail café chains.

Individual Cafés:

The main bulk of revenue is earned by small, individual cafés, run mostly

by families and friends. It is a relatively unorganized sector. There are

millions of such cafés around the world, and they provide customers with

a homely, casual experience.

The bulk of these cafés are mainly in Europe, where every little town or

village has local cafés, where people gather together for a conversation

over coffee, or just to be alone with their thoughts.

These cafés set themselves apart from retail chain cafés and hotel cafés

because they provide customers with a homely, classic appeal, which

cannot be emulated.

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Hotel Cafés:

Ever since the popularization of coffee, hotels all over the world started

opening 24-hour coffee shops where visitors to the hotel could walk in for

a cup of coffee and some food at any time.

These coffeehouses are extremely important, because they provide

international visitors to the hotel with a universal drink- coffee. Any

customer can walk into any major hotel in the world, and enter the

coffeehouse, and know what to expect. These cafés are not really major

players in the coffee café industry, but rather provide supplementary

services to the hotel industry.

Retail Café Chains:

The last, and the most organized sector in the coffee café industry, is the

retail café chain. Off late, these chains have become extremely popular

and are growing at an ever-increasing pace. These retail chains have work

with an organized structure of man, material and money. The work on

developing a recognized brand consistent to all their outlets, which

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customers can easily relate to, wherever they go. They provide customers

with a standardized level of service and quality at each of their outlets.

Popular Retail Café Chain logos

The vast popularity of these retail chains is shown in the rapid

international growth of brands like Starbucks. Customers can do to any

Starbucks across the world and know exactly what to expect. The main

focus of my project is on two nationally recognized retail café chains:

Barista & Café Coffee Day.

Growth of Café Industry in India

Hot beverages have always been a part of the tradition of India, especially

South India. Coffee took the first seat in South India when the traditional

Brahmin classes brought down the beverage from the ruling British

around the 1930s. During the early years the drink was confined only to

traditional rich Brahmin families who served filter coffee in a ‘davra-

tumbler’. Coffee is no more confined to the rich Brahmin class now,

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though the tradition of serving filter coffee in the ‘davra- tumbler’

continues to this day. In order to spread the drink, coffee houses emerged

at various places in the country, which also served as the opposite places

for lawyers and the educated class to hold discussions ranging from

politics to cinema. It is also believed that many scripts and ideas for films

evolved here. One of the oldest coffee houses in South India is the

Raayars mess, Chennai, which serves first class filter coffee even today.

The mess was established in the 1940s and continues the tradition of

coffee but supplements it with tiffin also. The vintage location of the mess

attracts huge crowds even today early in the mornings, Coffee however

was not the only item on the menu. These places also served food and

other drinks to their customers.

The drink also became famous and as a result even five star hotels began

cashing in on it. Several hotels all over the country started opening coffee-

shops that catered to high- end customers. This showed the popularization

of coffee cafés, to all sections of society. The drink has now become

more of a concept than merely a drink itself. The last decade witnesses the

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growth of numerous coffee pubs in the country. A number of coffee café

owners tried to westernize the taste in contrast to the filter coffee.

Now, large retail chains like Barista and Café Coffee Day have opened up

around the country. The concept of a café today is not merely about

selling coffee, but about developing a national brand. Retail cafés now

form a multi- crore industry in the country, and have huge potential for

growth locally, and internationally.

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 Chapter 3

Company Profile

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 Company Profile

CASE STUDY ON CAFE COFFEE DAY

Corporate Profile

Background, Market Entry & Growth:

It was in the golden soil of Chikmagalur that a traditional family owned a

few acres of coffee estates, which yielded rich coffee beans. Soon

Amalgamated Bean Coffee Trading Company Limited, popularly known

as Coffee Day was formed. With a rich coffee growing tradition since

1875 behind it coupled with the opportunity that arose with the

deregulation of the coffee board in the early nineties, Coffee Day began

exporting coffee to the connoisseurs across USA, Europe & Japan. In the

calendar year 2000, Coffee Day exported more than 27000 tonnes of

coffee valued at US$ 60 m to these countries and, for the second time in

its short career of 7 years retained the position as the largest coffee

exporter of India.

Coffee Day has a wide and professional network in the major coffee

growing areas of the country comprising over 48 agents and 50 collecting

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depots. Coffee Day's two curing works at Chikmagalur and Hassan cure

over 70,000 tonnes of coffee per annum, the largest in the country.

Coffee Day has a well-equipped roasting unit catering to the specific

requirement of the consumers. The process is carried out under the control

of experienced personnel to meet highest quality standards. The most

modern technology available is used to maintain consistency and roast the

coffee beans to the demanding specifications of the discerning coffee

consumers.

Coffee Day Comprises of the following Sub Brands

Coffee Day - Fresh & Ground

Café Coffee Day

Coffee Day – Vending

Coffee Day - Xpress

Coffee Day – Exports

Coffee Day - Perfect

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 The Café Coffee Day
Logo
Café Coffee Day currently owns and operates 213 cafes in all major cities
in India. It is a part of India's largest coffee conglomerate named Coffee
Day, ISO 9002 certified company. Coffee Day's most unique aspect is that
it grows the coffee it serves.

Key Features
 Pioneers of the Café Concept in India with its first Café at Brigade
Road, Bangalore in 1996. This Café was opened as a Cyber Café (first
of its kind) but later, with the burst of cyber cafes it reverted to its core
competency…. Coffee.
 Essentially a youth oriented brand with majority of its customers
falling in the 15-29 year age bracket
 Each café, depending upon its size attracts between 400 and 800
customers daily.
 It is a place where customers come to rejuvenate themselves and be
themselves.
 USP of the Brand:
 Affordable Price

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 CAFÉ COFFEE DAY

Café Coffee Day (CCD) pioneered the café concept in India in 1996 by

opening its first café at Brigade Road in Bangalore. Till about the late

1990’s coffee drinking in India was restricted to the intellectual, the South

Indian traditionalist and the five star coffee shop visitor. As the pure (as

opposed to instant coffee) coffee café culture in neighbouring

international markets grew, the need for a relaxed and fun “hangout” for

the emerging urban youth in the country was clearly seen.

Café Coffee Day is a division of India's largest coffee conglomerate,

Amalgamated Bean Coffee Trading Company Ltd. (ABCTCL), popularly

known as Coffee Day, a Rs. 300 crore ISO 9002 certified company.

Coffee Day sources coffee from 5000 acres of coffee estates, the 2nd

largest in Asia, that is owned by a sister concern and from 11,000 small

growers. It is one of India’s leading coffee exporters with clients across

USA, Europe & Japan.

Recognizing the potential that lay ahead on the horizon, Café Coffee Day

embarked on a dynamic journey to become a large organized retail café

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chain with a distinct brand identity of its own. From a handful of cafés in

six cites in the first 5 years, CCD has become India’s largest and premier

retail chain of cafes with 552 cafes in 90 cities around the country.

With its roots in the golden soil of Chickmaglur, the home of some of the

best Indiann Coffees and with the vision of a true entrepreneur nurturing

it, Coffee Day has its business spanning the entire value chain of coffee

consumption in India.

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Our Mission, Vision and Values
We believe in a world of sustainable farming…
The mission of Coffee Day is to provide authentic, affordable coffee to
our customers. And, our vision is to be present in every space where
coffee can be an integral ingredient. We aim to be one of the top three
players, worldwide, in the coffee retail segment. That’s a dream we live
up to, and make real everyday…
Values and Principles The age-old Indian value system has its imprint on
Coffee Day’s value system too. Coffee Day promotes a healthy working
environment, which encourages and fosters a climate of openness, respect
and innovation, along with Integrity, Leadership, Ownership and Trust.
Integrity: Coffee Day respects honesty within and outside the company.
The Group practices ethical business principles in law and spirit, and
strive to bring the best to the consumer.
Leadership is the essence of Coffee Day’s growth. Through continuous
innovation, research, networking and collaboration, the Group strives to
excel and stay ahead of competition.
Ownership Coffee Day drives the sense of ownership for its employees,
providing opportunities for learning, knowledge enhancement and
continuous growth.
Trust A strong foundation of trust encourages our people to deliver their
best. This trust is also extended to reflect in our endearing relationship
with our loyal and growing clientele.

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In all we do, we strive for Respect, Innovation and Excellence…the fuel
that drives our growth.

UTZ Certified, Good Inside

In the tranquil estates in Chikmaglur where our coffee grows, there is

love in the air. Love for our planet. That's why we convert byproducts
like the skin of the coffee cherry into natural manure. Our effluent
treatment plants make sure none of the yucky stuff finds its way back
to the world. We make sure we're harvesting rainwater to reduce the
dependence on supplied water. There's even an integrated pest
management system so we use lesser chemicals. We don't use
mechanized dryers; rather the beans spend some quality time under
the sun, relaxing.

The good folks over at UTZ Kapeh certified us based on an

adherence to an internationally recognized set of criteria for
sustainable agriculture, which demands at its core a commitment to
conservation - of soil, water, forests and wildlife.

All this just so that you can relax with that perfect cup secure in the
knowledge that the coffee in it comes from people who care about the
world.

ATNCC, Shimoga 26
 ORGNIZATIONAL CHART AND A CAREER GROWTH

HEAD - OPERATIONS

REDGIONAL MANAGER

ASSISTANT REGIONAL MANAGER

CITY MANAGER

AREA MANAGER

CAFÉ MANAGER REGIONAL

TRAINER

ASSISTANT MANAGER CITY TRAINER

CAFÉ INCHARGE

TEAM MEMBERS

ATNCC, Shimoga 27
Different formats of café……..

Café Coffee Day has been experimenting with café formats for quite

sometime, CCD has ventured into the following formats:

Music Cafés provide customers with the choice of playing their favourite

music tracks on the Digital Audio Jukeboxes installed at the café! There

are around 85 cafes with such jukeboxes. 32 cafes also provide customers

with the visual treat of watching their favorite music videos by means of

Video Jukeboxes.

Book Cafés offer the perfect solution to people who think that the coffee

experience is incomplete without browsing through the bestsellers or

reading a classic. CCD’s book corners accentuate the age-old combination

of ‘coffee and books’.

Highway cafés on the Bangalore – Mysore highway and NH-8, presents

the traveler en route not only with good coffee and scrumptious snacks

amidst great ambience but also with clean restrooms to get rid of that

weariness from the road!

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Lounge cafés at Hauz Khas, Delhi and Southern Avenue,

Kolkata(Southern Avenue) and Hyderabad (Jubilee Hills) combines the

style and luxury of a lounge with the lively ambience and comfort of a

café. With exquisite interiors, exotic menu and thematic music CCD

Lounge offers a whole new experience to the connoisseur while assisting

the latter through its team of hostesses who are poise and style incarnate

and are looked upon as fashion icons.

Garden cafés at M.G Rd, Bangalore and GKII, New Delhi combine the

joy of rejuvenating amidst verdant landscapes and pots of coffee.

Cyber cafés at Brigade Rd, Bangalore, Airport, Bangalore and Airport,

Delhi combine the urge to surf, not to mention get connected through the

internet while enjoying perfectly brewed cups of coffees, both domestic as

well as International blends!

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CASE STUDY ON BARISTA

Corporate Profile

Background, Market Entry & Growth:

Barista coffee was establishes in 1999 with the aim of identifying growth

opportunities in the coffee business. Increasing disposable incomes and

global trends in coffee indicate immense growth potential in one

particular segment.

More significantly, they believe they have been quick to spot a latent need

waiting to be trapped: Coffee lovers seek a complete experience. One that

combines intelligent positioning with the right product mix and carefully

designed cafés. In other words, customers seek an “experiential lifestyle

brand”.

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As of today, Barista exists in over 22 cities, and operates over 140 outlets

nationally. In the last 2 years, Barista has opened over 100 outlets in the

country and with a new outlet opening nationally every 14 dates, Barista

is currently experiencing phenomenal growth.

With outlets opening in Sri Lanka and Dubai, Barista is looking at

potential growth opportunities in Asia, making it highly competitive

international brand.

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HISTORY

C850 : First known discovery of coffee berries

1600 : Coffee enters to Europe through the port of Venice

1654 : The first coffee house opens in Italy

1750 : One of Europe’s first Coffee house

1822 : Prototype of 1st espresso machine is created in France

1908 : Invention of the world’s 1st drip coffee maker

Feb, 2000: First Barista Lavazza at Basant Lok, New Delhi

At Barista Lavazza our objective is to provide an authentic Italian

coffee drinking experience in a warm, friendly, no pressure

environment. We began operations in the year 2000 as we felt the

time was right for the Indian consumer to experience a café that

provided a third space, away from work and home, where the guest

could relax and unwind.

Lavazza traces its origins back to 1895, when Luigi Lavazza

purchased a little grocery store, Paissa Olivero, in the old commercial

section of Turin for 26,000 Italian Lire, about US$ 20. In the early

ATNCC, Shimoga 32
 1900's, he invented the concept of the blend - a complex art of

mixing together coffee of different origins to obtain a distinctive taste

and harmonious flavour in the cup. Before the turn of the century, the

name Lavazza evolved into an international powerhouse and the

unofficial ambassador of Italy, being synonymous with all things

Italian - creativity, art, passion and of course, espresso.

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WORLDWIDE

Established in February 2000, Barista Lavazza is noted as a pioneer

of Indian café culture. The Barista Lavazza chain of espresso bars
delivers a truly Italian coffee experience in warm, friendly and
relaxed environment. It aims to provide a comfortable place for
people to unwind over interesting conversations and a cup of coffee.
Barista Lavazza consist of young adults, who are exposed to global
lifestyles and appreciate the authentic flavours and tastes of coffee.
At last count, the Barista Coffee Company Limited has over 200
Barista Lavazza Espresso Bars and Barista Lavazza Crèmes in over
30 cities across India.

Besides the Indian sub-continent, Barista Lavazza also has cafes in

locations across Sri Lanka, Oman and the UAE. Barista is owned by
Lavazza, Italy's largest coffee company. Lavazza, the sixth largest
coffee roaster in the world, has a 46.5% share in the Italian retail
market (value, source: Nielsen) and operates in over 80 countries in
the Home and Away-from-Home sectors (Foodservice, Vending and
Cafes).

ATNCC, Shimoga 34
AWARDS

Barista Lavazza’s pioneering efforts at providing a truly Italian

coffee house experience has received a number of accolades and

recognitions.

Times Food Guide 2008 - Best Coffee Bar Award

The Times Food Guide is a guide for food lovers across the country.

It comprehensively covers food joints in the various metros rating

them according to popularity, ambience, food etc. The award is in

recognition of Barista Lavazza’s popularity among its customers.

IMAGES Retail Award 2007 - 'Most admired retailer of the year:

Catering Outlets’

The Images Retail Awards (IRA) judges companies in the business of

retail in concepts, innovations, designs and consumer recall. Barista

Lavazza has been encouraged by the record number of consumer

votes received in its favor during the selection process.

Super Brand 2006-2007

Super Brands India is a part of the globally recognized Super Brands

UK, which promotes the discipline of brand management and pays

ATNCC, Shimoga 35
 tribute to exceptional brands. Barista Lavazza has been awarded

Super bands for the second consecutive year. And we’re even more

chuffed about it this time because the new survey also included the

opinion of our consumers, along with the panel of judges. And it’s

always great to know our patrons appreciate our efforts to delight

them.

HT Food Guide 2000... – Best Place to have coffee

A leading Food Guide to the best hangout places across India.

Besides these, Barista Lavazza has also received

TOPS award for Specialty Coffee Excellence by the Specialty

Coffee Association of America (SCAA)

which recognizes specialty coffee retailers who differentiate

themselves through better business practices.

Times Group and Business Standard recognizes Barista Lavazza

as the ‘Brand of the Year’ in 2002.

ATNCC, Shimoga 36
 apter 4

Comparative Study

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The first parameter that respondents were asked to rate was the taste and

the quality of the products available at both Barista and Café Coffee Day.

Essentially these products are Coffees, Other Drinks, eatables and

desserts. Finding out how customers feel about the taste and quality of

products offered, could help both these organizations improve their share,

by adapting and improving their products.

This parameter is especially important, because 28% of the sample stated

Taste & Quality of Coffee/Food as one of the influential factor in

choosing a coffee café.

PARAMETER CAFÉ COFFEE DAY BARISTA

Coffee

4/5 3.5 / 5

INFERENCE: Since coffee is the primary product served by cafés, it is

vital that the taste and quality standards of their coffee are up to the mark,

because it directly affects the cafés performance. Various kinds of coffee

are available, and a detailed list can be found in the product mix of both

Barista and Café Coffee Day.

ATNCC, Shimoga 38
The Coffee at Café Coffee Day seems to have a slight edge over Barista.

This is quite an important fact, considering Café Coffee Day uses its own

brand of Coffee beans, while Barista uses a combination of imported

coffee beans and coffee beans from TATA Coffee.

A large chunk of Barista’s costs are tied up with importing Coffee Beans

and roasting them abroad. Some respondents highlighted the variety of

flavors Café Coffee Day has as an added advantage.

ATNCC, Shimoga 39
PARAMETER CAFÉ COFFEE DAY BARISTA
Other Drinks

3.5 / 5 4/5

INFERENCE: Though cafés main product is coffee, other drinks are also

very popular. Cafés need to focus on providing the right kind of drinks in

the right taste and with a level of quality.

Ratings for the taste and quality of Other Drinks indicate an advantage for

Barista over Café Coffee Day, with ratings of 4/5 and 3.5/5 respectively.

Café Coffee Day should look at different ideas for improving in this area.

ATNCC, Shimoga 40
PARAMETER CAFÉ COFFEE DAY BARISTA
Eatables

3.5 / 5 3.5 / 5

INFERENCE: Café customers usually have a light snack or side order

along with what they are drinking. This provides an opportunity for cafés

to offer these eatables at marginally higher prices, and increase their

revenue. It is important for cafés to provide high quality food, which

allows them to charge a premium.

Respondents rated the eatables available at both Cafés equally, this in

spite of the fact that Barista uses Taj as their national caterers, while Café

Coffee Day has private caterers in each city.

Café Coffee Day got a positive rating with respect to the variety of their
eatables (especially their Indian food), although the quality was often
inconsistent. While, respondents described Barista’s sandwiches as
“tasteless” and “sometimes stale”.
Overall, Barista did not live up to expectations considering they use the
Taj as their national caterers, while Café Coffee Day performed well in
spite of their seeming disadvantage of not having a nationally recognized
caterer.

ATNCC, Shimoga 41
PARAMETER CAFÉ COFFEE DAY BARISTA
Desserts

4/5 4.5 / 5

INFERENCE: Desserts are another valuable source of revenue for a

café. The better the taste and the quality of the desserts, the higher the

premium a café can charge. Desserts, like eatables, have a tendency to

spoil quickly if not stored or distributed properly, so taste and quality is of

paramount importance.

The Desserts category shows a lead for Barista over Café Coffee Day and

this is where Barista’s choice of a single, high quality national caterer

plays to their advantage.

Respondents gave Barista a near- perfect rating (4.5/ 5) because of their

excellent standards and quality of desserts. Café Coffee Day received a

rating of 4/ 5, and this is one area where they need to really concentrate

on, because they are lagging behind Barista.

ATNCC, Shimoga 42
Customer’s perception of prices plays a very important role in a service

sector industry. Because of the intangible nature of a service, prices are

often regarded as an approximate indicator of quality.

Pricing policy affects the cafés revenue directly. The higher the price, the

larger the profit margins, but the lower the price, the higher the market

share. In a retail café chain though, volumes are what count- that’s why

the more competitive the price is, the better for the firm.

The survey asked respondents to rate the prices of both the cafés on a

scale of 1-5, 1 being the cheapest, and 5 being most expensive. This

would directly illustrate whether the customer perceives price to be

inexpensive, affordable or expensive.

ATNCC, Shimoga 43
PARAMETER CAFÉ COFFEE DAY BARISTA
Coffee

3/5 4/5

INFERENCE: Respondents rated Café Coffee Day’s coffee prices as

average affordability with a rating of 3/ 5, while Barista rated as

expensive with a rating of 4/5.

This is strange though, considering the prices of coffee at Barista and

Café Coffee Day are within 8% of each other, and in some of the cases,

Barista’s actual prices were lower than Café Coffee Day’s.

PARAMETER CAFÉ COFFEE DAY BARISTA

ATNCC, Shimoga 44
Other Drinks

3/5 4/5

INFERENCE: The ratings for the prices of Other Drinks followed an

identical pattern to the ratings for Coffee. And in this case, all of Barista’s

Other Drinks were less expensive than Café Coffee Day’s.

Respondents may not be aware of this, because they gave Café Coffee

Day an excellent 3/ 5, and only an average rating of 4/ 5 to Barista.

ATNCC, Shimoga 45
PARAMETER CAFÉ COFFEE DAY BARISTA
Eatables

3/5 4/5

INFERENCE: Although the eatables provided at both cafés are mostly

different, the prices for the common eatables are approximately the same

in both cafés.

Barista received another poor rating of 4/ 5, a whole point behind Café

Coffee Day’s 3/ 5. Again, if the actual prices are used, there is less than a

10% difference in the average prices of eatables at both café chains.

ATNCC, Shimoga 46
PARAMETER CAFÉ COFFEE DAY BARISTA
Desserts

2.5 / 5 3.5 / 5

INFEERENCE: In the Desserts category, although most of the products

were more expensive at Barista, there isn’t a big difference shown in the

ratings of the 2 cafés.

Respondents rated Café coffee Day’s Desserts as cheaper and Barista’s as

averagely affordable.

ATNCC, Shimoga 47
The availability of products is essential to ensure customer order

fulfillment. If a customer desires a product, it should be made available to

him when and where he desires it. People visit cafés primarily because

they serve coffee and eatables. These are their basic products, without

which the café itself would cease to exist. That’s why it is essential for

cafés to make sure the food and drinks they have on their menu are

available to customers when they place their order.

For the purpose of this survey, respondents were asked to rate the

availability of the coffee, drinks, eatables/ snack and desserts of their

choice; on a scale of 1-5 (1 indicating that the product is never available,

5 indicating that the product is always available).

ATNCC, Shimoga 48
PARAMETER CAFÉ COFFEE DAY BARISTA
The Coffee of

Your Choice
4/5 4.5 / 5

INFERENCE: Making the coffee of choice available to the customer

poses a different sort of problem to cafés. While a plain black coffee or

milk- based coffee is always available, the flavored coffees, which are not

ordered very often, may be unavailable due to insufficient supply caused

by varied demand. Considering coffee is their core product, both cafés

performed exceptionally well. Barista was marginally ahead of Café

Coffee Day, with ratings of 4.5/ 5 and 4/ 5 respectively.

ATNCC, Shimoga 49
PARAMETER CAFÉ COFFEE DAY BARISTA
The Drinks of

Your Choice
4/5 4/5

INFERENCE: The other drinks available at cafés like cool drinks, cold

coffees and ice teas; depend a lot on various artificial and fruit based

flavors/ syrups. These might not be available to the café due to seasonal

factors or supply factors. The availability of the café to overcome these

factors would directly reflect on their rating.

Both cafés once again, performed brilliantly, with ratings of 4/ 5 each.

This shows that both Barista and Café Coffee Day make sure that the

various drinks they offer are almost always available to customer, despite

the obvious problems.

ATNCC, Shimoga 50
PARAMETER CAFÉ COFFEE DAY BARISTA
The eatables/snacks

Of Your choice
4/5 4/5

INFERENCE: Eatables at cafés provide a much more obvious problem.

They cannot be stored for very long, and because of that, supply must be

short and frequent, often causing demand supply gaps. Barista performed

above average with a 3.5/ 5 rating, and some respondents complained that

a lot of the eatables were often stale or unavailable. Café Coffee Day on

the other hand, did very well. The eatables they offer are almost always

available, and they earned an excellent rating of 4/5.

ATNCC, Shimoga 51
PARAMETER CAFÉ COFFEE DAY BARISTA
The Desserts of

Your Choice
4/5 4/5

INFERENCE: The desserts also a large source of revenue, because they

are usually accompanied by a high profit margin. Both Barista and Café

Coffee Day performed at par with a rating of 4 / 5.

ATNCC, Shimoga 52
 Chapter 5

Data Analysis and Interpretation

ATNCC, Shimoga 53
 Data Analysis and Interpretation

Brand Awareness
TABLE – 1
No. of Percentage
Sl. No. Brand Awareness Respondents
1 Café Coffee Day 25 50
2 Barista 25 50
TOTAL 50 100

GRAPH – 1

INFERENCE: The graph shows the respondents brand awareness of the coffee
outlets. They both received an equal importance in the survey. 100% of the
respondents are aware of both the brands.

Age Group Visiting Coffee Shops

ATNCC, Shimoga 54
 TABLE - 2
Sl. No. Age Group No. of Respondents Percentage
1 Below 14 Yrs 2 4
2 15 - 18 Yrs 9 19
3 19 - 25 Yrs 24 48
4 25 & above 15 29
TOTAL 50 100

GRAPH - 2

INFERENCE: It can be observed that 48% of the visitors to coffee day’s are
between the age group of 19 - 25 yrs, 29% are above 25 yrs, and 19% are
between 15 – 18 yrs of age. Whereas just 4% of the visitors are below 14 yrs
who visit the coffee outlets.

ATNCC, Shimoga 55
 Preference of Coffee Shops
TABLE - 3
No. of
Sl. No. Preference of coffee shops Respondents Percentage
1 Café Coffee Day 26 51
2 Barista 24 49
Total 50 100

GRAPH - 3

INFERENCE: The Graph shows which coffee shop the respondents usually
preferred to visit. They both received almost an equal preference in the survey,
with 49% of the respondents choosing Barista and the remaining 51% choosing
Café Coffee Day, indicating there is no clear winner in terms of actual visits to
the outlets.
This can be analyzed in relation to the comparative rating respondents give both
outlets, to help us identify which areas both the chains are doing well in, where
they need to improve and where the opportunity for growth exists.

ATNCC, Shimoga 56
 Frequency of Visit

TABLE - 4

Sl. No. Frequency of visit No. of Respondents Percentage

1 Almost Daily 0 0
2 2-3 times a week 20 41
3 2-3 times a month 22 44
4 Not Often 8 15
Total 50 100

GRAPH - 4

INFERENCE: The Graph indicates how often the respondents visited a coffee
shop. Considering the age- group for the sample, it’s quite evident that they
have enough free time to visit cafés regularly. Out of those surveyed, 41% said
they visited a coffee shop 2-3 times a week, and 44% visited a coffee shop 2-3
times a month. This is great opportunity for Barista and Café Coffee Day to
attract regulars with loyalty programs.

ATNCC, Shimoga 57
 Spending Habits
TABLE - 5
No. of
Sl. No. Spending Habits Respondents Percentage
1 0-25 Rupees 0 0
2 25-75 Rupees 23 47
3 75-125 Rupees 21 42
4 Over 125 Rupees 6 11
TOTAL 50 100

GRAPH - 5

INFERENCE: The Graph illustrates how much money the respondents usually
spend at coffee shops. While the majority of respondents spent between Rs.25
& Rs.75, a high percentage also spent between Rs. 75 & Rs. 125. A low
percentage of groups spent over Rs.125.
Time They Spend in a Single Visit
TABLE – 6

ATNCC, Shimoga 58
 Sl. No. Length of visit No. of Respondents Percentage
1 Less than ½ hour 0 0
2 ½ - 1 hour 19 37
3 1 – 2 hours 24 48
4 Over 2 hours 7 15
TOTAL 50 100

GRAPH – 6

INFERENCE: The survey also asked the respondents how much time they
would usually spend on a single visit to a coffee shop. The Graph shows that
48% of them would spend between 1 hour and 2 hours, 37% would spend
between ½ hour to 1 hour, and 15% would spend over 2 hours.

Average Group Size

TABLE - 7

Sl. No. Average Group Size No. of Respondents Percentage

ATNCC, Shimoga 59
 1 Alone 0 0
2 With 1 person 11 22
3 2 - 4 people 26 52
4 More than 4 people 13 26
TOTAL 50 100

GRAPH – 7

INFERENCE: Another important factor to consider is the size of the groups

that go to these cafés. The Graph shows that 52% of the respondents visit café
in groups of 2-4 people, 26% with more than 4 people. This would indicate that
they are usually accompanied with common friends, who have similar tastes,
and buying patterns. The remaining 22% visit with just 1 person.

ATNCC, Shimoga 60
 Single Most Factor to Choose a Coffee Shop

TABLE - 8

Sl. No. Deciding Factor No. of Respondents Percentage

1 People/Service 0 0
2 Taste of coffee/food 14 28
3 Value for money 6 12
4 Ambience/Experience 11 22
5 Place to spend time 19 38
TOTAL 50 100
GRAPH – 8

INFERENCE: When asked about the most important factor that contributed to
their choice of coffee shop, 38% of respondents said it’s a place to spend time,
and 28% respondents selected taste of coffee/ food, and 22% the
ambience/experience. Only 12% of them choose value for money as their most
important factor. This would indicate a clear shift of consumer focus from price
factors to service factors.

ATNCC, Shimoga 61
 Most Effective Media to Reach the Audience
TABLE – 9

Sl. No. Effective Media No. of Respondents Percentage

1 Café beats(magazine) 7 14
2 Advertisement 26 52
3 Newspaper 12 25
4 e-mail 5 9
5 Direct Mail 0 0
TOTAL 50 100

GRAPH – 9

INFERENCE: Survey asked the respondents the effective media to

communicate to them. 52% said that advertisement is the most effective media
to reach them, 25% mentioned newspaper, 14% said café beats and only 9%
mentioned the electronic mail.

ATNCC, Shimoga 62
 Chapter 6

FINDINGS, SUGGESTIONS AND CONCLUSION

ATNCC, Shimoga 63
 FINDINGS, SUGGESTIONS AND CONCLUSION

The main findings of the study are,

CAFE COFFEE DAY

Highly rated Taste & Quality of products:

Café Coffee Day got a high rating in the market survey, for the Taste &

Quality of their products. If they work on this aspect, there is huge

potential for them to attract customers, just based on the taste and quality

of products. This is also helped by the fact that they grow their own coffee

beans, and this provides an important base for future expansion and

growth.

Value for money proposition:

Café Coffee Day is projected as an “affordable” brand. This strategy has

worked extremely well so far, and Café Coffee Day got a high rating, both

for their prices and for their value for money, in the market survey.

ATNCC, Shimoga 64
Strong youth orientation:

The Café Coffee Day brand is, and always has been, extremely youth-

oriented. In a country where over 40% of the population is under the age

of 20, there is huge potential for Café Coffee Day to become one of the

country’s largest youth brands. The untapped market share and potential

for growth is enormous.

BARISTA

Strong Brand Image:

Barista has a strong and clear brand image. Their customers can easily

identify and relate to the Barista brand. This helps increase and maintain

brand loyalty.

Excellent Human Resource:

According to the survey, Barista received an excellent rating for the

service and behavior of their staff. This is a huge advantage, especially in

a service organization. Barista must strive to keep this advantage.

Ambience & Décor:

Another significant area of excellence is the kind of ambience and décor

Barista cafés have. Respondents to the survey, including those who chose

ATNCC, Shimoga 65
Café Coffee Day as their choice of café, gave Barista a near perfect rating

for their Ambience & Décor.

Strong base for expansion & growth:

Barista have worked hard on heir brand image and human resources, and

have a strong base for future expansion and growth.

ATNCC, Shimoga 66
SUGGESTIONS

Both Barista and Café Coffee Day have under performed or not lived up

to potential in certain areas. The areas are weaknesses, which need to be

improved upon, as that both can eliminate any disadvantage that may

have, and improve customer satisfaction. The main areas needing

improvement, based on the Market Survey, have been identified as

follows:

Café Coffee Day

1. Weak brand image:

The Café Coffee Day brand, although clearly a youth- oriented brand,

lacks the power and strength expected to maintain brand loyalty. The

brand doesn’t project a clear image to customers about what Café Coffee

Day is all about. This could prove as a deterrent during future national and

international expansion.

2. Inefficient human resources:

According to the market survey, Café Coffee Day’s staff received only an

average rating for their behavior and service. Café Coffee Day needs to

ATNCC, Shimoga 67
work hard at this aspect, especially considering they are a service sector

organization that is looking at large expansion.

3. Ambience & Décor:

The Ambience & Décor of Café Coffee Day outlets received a below-

average rating from respondents of the market survey. A lot of

respondents did not like the fact that Café Coffee Day outlets and

literature served as prime space for a lot of advertising and promotions.

They felt as if the café’s had been hijacked just for advertising.

Barista

1. Average taste & quality of products:

According to the market survey, other than their Dessert, Barista got only

an average rating for the taste & quality of their products. Considering

their strong brand image of being the coffee lover’s traditional café, they

have not performed up to expectations in this area.

2. Perceived as an expensive brand:

Customer perceptions of Barista’s prices and value for money are quite

negative. Even though the prices of Barista and Café Coffee Day are

almost identical, Barista is still perceived as the more expensive brand.

ATNCC, Shimoga 68
3. Inconvenient delivery process:

On a smaller note, Barista’s self- service delivery process received almost

unanimous complaints from respondents of the market survey. They found

it inconvenient to go back to the counter just to receive their order.

ATNCC, Shimoga 69
CONCLUSION

Café Coffee Day

1) Café Coffee Day has done extremely well so far to project itself as an

affordable youth oriented brand. But there are still certain areas where

their brand needs to be much stronger.

2) With regard to the physical evidence associated with the brand, Café

Coffee Day needs to do a lot of work if they hope to catch up with

Barista. Café Coffee Day should clean up the décor at every outlet,

wherever unnecessary advertising is taking place.

3) Café Coffee Day would do better to provide promotional space for its

partners with the use of clever collaborations, and not printed

advertisements and posters everywhere.

4) Café Coffee Day looks at its current recruitment, selection and most

importantly, its current training policies. Customers are not happy with the

ATNCC, Shimoga 70
behavior and service of the staff, and Café Coffee Day is lagging far

behind Barista is this aspect.

Barista

1) Barista has an extremely strong brand image, but they need to work

hard on improving their customer perception of being an expensive brand.

Barista and Café Coffee Day have almost identical pricing, but Barista is

still perceived as the more expensive brand.

Barista should carry out a promotion campaign to ensure that their target

market is well aware of their current low prices. This would help change

customer perception and turn Barista into an affordable brand.

2) Another backlash of having such a strong traditional café brand image

is that customers have very high expectations of the taste & quality of

products. Barista needs to work hard at this aspect, especially for coffee

and eatables products.

3) Barista need to look at its coffee beans suppliers and coffee brewing

process to ensure that it is the best it can be.

ATNCC, Shimoga 71
This is especially important considering the international expansion

Barista is undertaking. Barista should also look at the Taj, their national

suppliers for eatables and desserts, and either improve the taste & quality

of eatable, or look at another supplier because as of now, they are not

living up to expectations, and losing customers to Café Coffee Day.

4) Barista delivery process should change, so that a café attendant delivers

the coffee to the table. This may seem insignificant, but it can go a long

way in improving customer satisfaction.

ATNCC, Shimoga 72
 QUESTIONNAIRE

Dear Sir/Madam,

I am Mohammed Irfan .C, Studying in Final year BBM at ATNCC,

Shimoga. As per the part of my curriculum, I am doing my project work

titled “CUSTOMER PREFERENCE TOWARDS CAFÉ COFFEE DAY

AND BARISTA – A COMPARITIVE STUDY IN BANGALORE”. I would

be grateful if you can give your views to the following questions to make

this project successful.

1. Name: ________________________________

2. Profession: ________________________________

3. Age (yrs):
(10 - 14) (15 – 18)
(19 – 25) (25 & above)

4. Sex:
Male Female

ATNCC, Shimoga 73
5. House Hold income level:
(12000 – 15000) pm (15001 – 25000) pm

(25001 – above) pm

6. What Coffee Shops are you aware of?

Café Coffee Day Barista
Others (Please Specify) ___________________________
7. What Coffee Shop do you usually go to?
Café Coffee Day Barista
Others (Please Specify) ______________________
8. How often do you visit a Coffee Shop?
Almost Daily 2-3 times a week

2-3 times a month Not often

9. How much money do you usually spend at a Coffee Shop?

0-25 Rupees 25-75 Rupees
75-125 Rupees Over 125 Rupees

10.How much time do you usually spend at a Coffee Shop?

Less than 1/2 hour 1/2- 1 hour
1-2 hours Over 2 hours

ATNCC, Shimoga 74
11.How many people do you usually go with?
Alone With 1 person
2-4 people More than 4 people
12.What is the single most important factor for you to choose a Coffee
Shop?
Taste of coffee/food People/ Service

Value for money Ambience/Experience

13.What is the most effective way to reach you)

Café beats (magazine) Advertisement

Direct Mail Newspaper

e-mail

Others (Please Specify) ___________________________

ATNCC, Shimoga 75
 14.Please rate the following, according to your personal choice, for both
Barista and Café Coffee Day:

Cafe Coffee Day Barista

1) Taste and Quality of products: (1=Bad and 5= Excellent)

Coffee 1 2 3 4 5 1 2 3 4 5

Other Drinks 1 2 3 4 5 1 2 3 4 5

Eatables 1 2 3 4 5 1 2 3 4 5

Desserts 1 2 3 4 5 1 2 3 4 5

Your comments:

2) Prices: (1=Cheap and 5=Expensive)

Coffee 1 2 3 4 5 1 2 3 4 5

Other Drinks 1 2 3 4 5 1 2 3 4 5

Eatables 1 2 3 4 5 1 2 3 4 5

Desserts 1 2 3 4 5 1 2 3 4 5

Your Comments:

ATNCC, Shimoga 76
3) Availability: (How often are the following products available)

(1=Rarely and 5=Always)

The coffee of 1 2 3 4 5 1 2 3 4 5 your choice

The drinks of 1 2 3 4 5 1 2 3 4 5 your choice

The eatables/snacks 1 2 3 4 5 1 2 3 4 5 of your choice

The desserts of 1 2 3 4 5 1 2 3 4 5 your choice

Your Comments:

15.Which Coffee Shop do you prefer? Why?

16.What don’t you like about the other Coffee Shop?

Thank You for Your Cooperation!

ATNCC, Shimoga 77
 BIBLIOGRAPHY

Books

Name Author
Research Methodology Kothari C.R.
Marketing Management Kotler Philip

Websites

www.google.com

www.answer.com

www.barista.co.in

www.coffeeboard.org

www.cafecofeeday.com

ATNCC, Shimoga 78