You are on page 1of 12

2011

Caf Coffee Day

Chanakya Kandukuri ( DM-06-003 ) Auroras Business School

Executive Summary
On the process of the study of product and brand management I have chosen Cafe Coffee Day for my study wherein the details of the company, product portfolio, marketing mix, competitive analysis, future trends of the sector, SWOT analysis and my suggestions for the future developments of the company exists.

Table of Contents
Executive Summary................................................................................................................................. 2 Corporate Profile..................................................................................................................................... 3 Mission ................................................................................................................................................ 3 Cafe Coffee Day's Divisions ................................................................................................................. 3 Product Mix ............................................................................................................................................. 4 Marketing Mix ......................................................................................................................................... 5 Positioning: ............................................................................................................................................. 8 Customer Profile: ................................................................................................................................ 8 Market Expansion ................................................................................................................................... 9 CCDs International Expansion Strategy ............................................................................................. 9 Competitive Analysis ............................................................................................................................... 9 Direct Competitors.............................................................................................................................. 9 Indirect Competitors ......................................................................................................................... 10 Global Competitors ........................................................................................................................... 10 Competitive Strategies of CCD .............................................................................................................. 10 SWOT Analysis....................................................................................................................................... 11 Insights Gained...................................................................................................................................... 11 Suggestions ........................................................................................................................................... 12

2|Page

Corporate Profile
Cafe Coffee Day is India's favorite coffee shop, for the young and the young at heart. It is a part of India's largest coffee conglomerate, the Amalgamated Bean Coffee Trading Company. Theres over 10,000 acres of rolling hills with the coffee shrubs making for lovely walks. There are 11,000 small growers who make them who they are. And they are not alone; there are folks in the USA, Europe and Japan that buy coffee from CCD, making them the top coffee exporter from India CCD brought the concept of cafes in India. The first one opened in 1996 on Brigade Road in Bangalore. It's been an exciting journey for CCD, becoming the largest organized retail cafe chain in the country.

Mission
To be the best Cafe chain by offering a world class coffee experience at affordable prices.

Cafe Coffee Day's Divisions


Coffee Day Fresh 'n' Ground, which owns 450 coffee bean and powder retail outlets. Coffee Day Square, a high level coffee bar in Bangalore. Coffee Day Xpress, which runs 900 plus Coffee Day kiosks. Coffee Day Beverages, which runs over 14,000 vending machines. Coffee Day Exports, its exporting wing. Coffee Day Perfect, its (FMCG Packaged Coffee) division. Cafe Emporio: A cafe chain from Czech Republic. Cafe Emporio has 11 cafes in Czech Republic Caf Emporio runs on 2 formats similar to CCDs regular cafs and Lounge & Square set ups. CCD is having 1134 stores till 24/9/2011

Total Outlets in Past 15 years

1 1996

14 2001

213 2005

1134 2011

3|Page

Product Mix
Caf Coffee Day: Product Width Coffees & Teas Refreshing Alternatives Eatables

Hot Coffee Espresso Espresso Americano Macchiato Cappuchino Caf Latte Chococinno Caf Mocha Irish Coffee

Granitas Blood Orange Cool Blue Pineapple Crush Emerald Ice Ruby Surprise

Melting Moments Banana n Walnut Cake Banana Chocolate Mousse Banana Caramel pie Chocolate Doughnut Cookies Marble Cake Pineapple Getaux Chocolate Cake

International Coffee Colombian Juan Valdez Ethiopian Qahwah Kenyan Safari

Smoothies Mango Colada Strawberry Colada

Ice Creams Vanilla Chocolate Seasons Best

Cold Coffee Sweet Mint Cold Sparkle Brandied Banana Tropical Iceberg Iced Eskimo

Cremosas Litchi Ginger Spice Pina Colada

Quick Bites Samosa Puff Pizza Croissant French Fries Kathi Roll

Coffee Add-ons Honey Flavoured Syrups Red Eye

Teas Assam Tea Masala Chai Lemon n Ice Tea

Wraps Biryani Sandwiches Kulcha

4|Page

Whipped Cream Scoop pf Ice cream Chocolate Sauce

Kashmiri Qahwah Apple n Cranberry ice tea

Burger Pasta Masala Sandwich

CCD flow of Generating Money from Beans to Coffee,

Generating Money from Retail Caf Coffee Day Outlets

Marketing Mix Product:


CCD product mix constitutes a wide range of products that appeal primarily to Indian coffee and snack lovers. Products have a decided Indian taste to it be it food or coffee. Most of the eatables have been adopted to meet the Indian taste buds like samosa, masala sandwich, tikka sandwich etc. Thus they have been trying to capture the Indian taste along with classic coffee. The best selling item in summer is frappe, which is coffee and ice cream blended together. The young people favour it. In winter it is cappuccino. Their merchandising includes funky stuff like t-shirts, caps etc.

Price:

5|Page

Considering that CCD knows its major customer lies in the bracket of 15- 29, it has tried to derive a policy whereby it can satisfy all its customers. The price for a cup of coffee ranges from Rs.45 to Rs 80. From the time it first started its operations, there has been only minor changes in the pricing policy of CCD. The changes have been more due to the government taxes than anything else

Place:
The strategy CCD has adapted is to place a cafe in every possible location where some business can be generated. This is a prime factor in determining the success of a retail chain. CCD looks to cater to their target market with strategically located outlets. Their outlets are generally located in High Street/ Family Entertainment Centres, gas stations, near Colleges etc.

Promotion:
CCD is involved in all the areas of serious consumer passion like: Television: CCD held a contest around a very popular programme on Zee English called Friends. All the six lead characters are shown often visiting a coffee shop. They have tied up with Channel [V]s Get Gorgeous contest. Tie-ups: Besides that CCD also tie up lot of the youth brands. So they have a contest going on with Levis, another one with Scooty, Liril, latest one with Airtel Friends. Association with movies: CCD can be seen in movies like Khakhee and Mai Hoon Na Sales Promotion: CCD uses special Cafe Citizen Card for rewarding Cafe Coffee Days customers. It is a loyalty program to gain new customers and retain the existing ones.

Process:
The ordering and delivery process in CCD was earlier based on self- service. But now in most its coffee shops the waiter comes and takes away the order and delivers the order on table.

Physical evidence:
Logo, image, and brand: CCD has used bright red and green colours in its older logo. RED stands for leadership, vitality, passion for coffee. The GREEN stroke harks back the coffee plantations that they own. Cafe is noticeably larger in the logo to denote that CCD pioneered the cafe concept in India way back in 1996.The font looks as

6|Page

though the letters have congealed out of a liquid The word Cafe was made to appear dominant to indicate Cafe Coffee Days introduction of Cafe culture in India. After recognizing the buzz of conversations that invariably accompanied the coffee being served at their tables. CCD introduced a new logo with a Dialogue box in it. This was to highlight the strong connection between Coffee and Conversations. Another indication of the dialogue is the two-way conversation between CCD and its customers Architecture and Decor: Largely wood and granite based interior with young colours of today, like lime green, yellow, orange, and purple predominate. Literature: The literature provided by CCD is indicative of its youthful image. The menus, posters, pamphlets are all designed to attract young and young at heart The Tag Line: "A lot can happen over coffee" became a popular line among youngsters. In a bid to take their coffee chain national in 2000, the management decided to strengthen their brand pull with an appealing tag line. Factors like ambience, food, music, and atmosphere and meeting people were identified as the aspects that were drawing people to their Cafes. Encompassing all these factors in a single line, the sentence "A lot can happen over Coffee, was phrased.

People:
People at Cafe Coffee Day believe that People are hired for what they know but fired for how they behave. Motivation and personal skill are laid emphasize upon. Their employees are like friend to the customer but at the same time they know about the international standards of hygiene and cleanliness and personal grooming.

7|Page

Positioning:
Customer Profile:
60% of the customers who visit the caf are male and 40% are female. 52% of customers who visit the cafes are students.

Caf Coffee Day is known to experiment with different caf formats. They have been: Music cafs Books cafs Highway cafs Lounge cafs Garden cafs Cyber cafes
8|Page

Market Expansion
CCD plans to take the total number of cafes to to 2,000 by 2014. In October 2009, CCD announced that it will increase its international presence from the current six outlets in Vienna and Pakistan to a total of 50 stores across Europe and Middle East in two years time Recently, CCD entered a tie-up with the Ginger hotels of the Taj. This caters to business executives and is on a Smart basics platform. The outlet would be open to all, and not just the hotel's guests. The aim is to increase footfalls in Ginger and increase the reach of CCD. This way, CCD can reach out to another set of consumers, apart from the young crowd it has mainly catered to.

CCDs International Expansion Strategy


In June, 2010 CCD chain acquired Emporio for Rs 15 Crore. Emporio is a Czech Republic-based cafe chain present at 11 locations. CCD plans to co-brand the chain as Cafe Coffee Day Emporio and later transition it to Caf Coffee Day. CCD is also present in Vienna. The company wants to expand in the East European region, West Asia and the Asia-Pacific region

Competitive Analysis
Direct Competitors
Barista: This is the closest competitor to Caf Coffee Day in the Indian market. They target the same class of upwardly mobile youth and young professionals. But Barista is often viewed as a place to unwind after a hard days work or an ideal setting for some business meetings. Cafe Mocha: This aims at providing a level of experience to the consumer which is hard to imitate. Inspired by Morocco and Turkey, Mocha offers not just coffee but also sheeshas from Egypt and gourmet desserts. Mocha calls itself a coffee shop for the soul. Recent entrants in the Indian market include Gloria Jeans, Coffee Bean & Tea Leaf and Illy Cafe

9|Page

Indirect Competitors
Eateries like McDonalds and Haldirams pose competition to CCD as they are likely attractions for a consumer to be drawn to. Consumer can well contemplate why he should spend around Rs. 45 on a coffee when he cans get a burger and a coffee for the same price at McDonalds. Local tea joints and coffee shops like Caf Nescafe, They are smaller places but nevertheless target the same set of consumers. Hence, CCD has to consider the threat a shop like this could pose to it.

Global Competitors
Starbucks is planning to enter India shortly and would be stiff competition for even an established brand like CCD. Coffee bars in the market of the other country that Cafe Coffee Day is entering is also be a factor CCD will have to plan for before entering a market

Competitive Strategies of CCD


Cafe Coffee Day which follows a backward integration of the value chain procures coffee beans from its base in Bangalore. This gives it a high sense of quality assurance and guaranteed supply across its outlets as the same raw material is used in all outlets. But Barista is a combination of imported coffee beans and beans from Tata coffee. This is a relative disadvantage because if there is a discrepancy in the quality or supply, Barista would have to consider alternatives and probably look for another supplier. Similarly, the food items available in Cafe Coffee Day are obtained from local suppliers whereas Baristas food is catered by the Taj caterers. Cafe Coffee Day would hence, have a lower-cost advantage.

10 | P a g e

SWOT Analysis

Insights Gained
In Terms of Advertising to create Brand Awareness: o CCD does not advertise itself via traditional media ads o Physical presence is sufficient to create brand awareness o CCD advertises ABCs other offerings such as The Serai Resorts. CCDs growth story closely resembles Starbucks. While others are building coffee business, CCD is building real estate/meeting-point business where coffee is just a by-product. They wish to have a caf in any location where some business can be generated

11 | P a g e

Suggestions
Focus needs to be on product innovation and experience to meet rising customer expectations. With time, the rural market will be ready for CCDs entry. It will have to create the same cafe culture craze it managed to do so well in the cities to a people unaccustomed to it CCDs No-alcohol policy will have to change to be successful in the European and American markets. o As is evinced by the Starbucks Liquors range, which has been enormously successful. CCDs strength lies in it being able to provide quality matching its competitors for relatively cheaper prices. This is due to: o The ABC group has complete control from production of Coffee in its fields of Chikmagalur, Karnataka to its 1134 outlets around the world. It cannot afford to let that advantage slip

12 | P a g e