Marketing project on cofee retailing

7/31/2019 Marketing project on cofee retailing

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INTRODUCTION

The traditionally tea-drinking society of India has been steadily increasing its coffee intake as

the young and middle-class aspire to have more Western tastes. Hot beverages have alwaysbeen 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.

Group networking is embracing the practice of meetings over coffee as professional and

recreational clubs alike gather routinely at coffee shops in Indias major cities to discuss

business and pleasure.

With over 170,000 coffee farms in India, cultivating nearly 900,000 acres of coffee trees,

India is the 5th largest producer of coffee in the world, out of which 75% is exported. The

current market for coffee in India is $ 160 million, making it the second most popular

beverage, growing at an astronomical rate of 40% year-on-year.

Moreover, the concept of coffee chains in India has been positioned around selling a much

loved, cordial and welcoming ambience for youngsters to interact, hangout, spend soothingtime amidst while providing coffee and scrumptious snacks.

Cafs are becoming increasingly popular among young Indian consumers who have more

disposable income than previous generations and who are spending more time socialising

outside of the home environment.

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 cafs, to all sections of society. The

drink has now become more of a concept than merely a drink itself. The last decade witnesses

the growth of numerous coffee pubs in the country. A number of coffee caf owners tried to

westernize the taste in contrast to the filter coffee.

The concept of a caf today is not merely about selling coffee, but about developing a

national brand. Retail cafs now form a multi- crore industry in the country, and have huge

potential for growth locally, and internationally. The Indian market is now home to multiple


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coffee brands including Caf Coffee Day, Barista Lavazza, Java Green, Costa Coffee, and

Gloria Jeans Coffee, but the market is still young. The Coffee Caf industry is currently one

of the biggest and fastest growing sectors in business. The industry consists of a mix of

individual cafs, hotel cafs and retail caf chains.

Individual Cafs:

The main bulk of revenue is earned by small, individual cafes. It is a relatively unorganized

sector. There are millions of such cafs around the world, and they provide customers with a

homely, casual experience. These cafs set themselves apart from retail chain cafs and hotel

cafs because they provide customers with a homely, classic appeal, which cannot be

emulated.

Hotel Cafs:

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 cafs are not

really major players in the coffee caf industry, but rather provide supplementary services to

the hotel industry.

Retail Caf Chains:

The last, and the most organized sector in the coffee caf industry, is the retail caf 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. They

work on developing a recognized brand, consistent to all their outlets, which customers can

easily relate to, wherever they go. They provide customers with a standardized level of

service and quality at each of their outlets.


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Need:

The need for going to coffee outlets would be social needs like recreation and relaxation.

Want:

Want would be to have coffee for satisfying the need for recreation and relaxation.

Demand:

Demand would be going to a specific coffee outlet to have coffee. For example, going to

Starbucks to have Starbucks coffee.

Target Market, Segmentation and Positioning of Barista

Barista follows the psychographic lifestyle segmentation strategy which considers lifestyle,

age group and the income. It has positioned itself as a lifestyle brand, with concentrated

positioning aiming at young students, professionals and working couples. The target age is

about 15-25 years. The premium segment is the domain of the Barista chain. Now Barista is

changing its positioning from a premium retail outlet to that of a hangout or a meeting place

frequented by young people. Company officials say this is because the nature of Barista's

clientele ranges from young college-goers to young professionals Barista is not only

satisfying the coffee need of the customers but what came across during our study was a

major reason why people go to Barista, apart from other reasons, was lifestyle.

Offerings and Brands:

Following are the major players of coffee retailing in India:

CCD: Taking pride in 130 years of coffee growing heritage, CCD is the first chain to enter

retail by incorporating Amalgamated Bean Coffee Trading Company Ltd (ABCTCL) in the

year 1994. Pioneering the caf concept in India in 1996 by opening its first caf at Brigade

Road in Bengaluru, ABCTCL today is one of Asias top 500 companies and aims to be

among the top three coffee retailing companies in the world. It currently operates 1,330

outlets in 185 cities in three formats cafes, lounges and kiosks (as per

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economy/marketing/article3364372.ece?homepage=true&ref=wl_home accessed on

28/04/2012 @21:41 hrs) and plans to scale it up to 2,000 outlets spanning 400 cities by the

end of 2014.

Barista: Barista traces its roots back to the old coffee houses in Italy the hotbeds of poetry,

love, music, writing, revolution and of course, fine coffee. Offering alternative options and

pleasures of coffee to millions, the chain is also revolutionising the coffee drinking

experience in most Indian cities. Barista owns 316 stores and is looking at more than

doubling the numbers by 2015.

Costa Coffee: As part of its overseas expansion, British coffee retail chain Costa Coffee

launched its outlet in New Delhi, becoming the first international coffee chain to start

operations in India in September 2005. It has also been expanding its business through

exclusive franchisee partnership with Devyani International. The chain is currently

operational with 47 outlets and expanding aggressively to tap this potential market.

Coffee World: Coffee World is a premium specialty coffee house that offers a

comprehensive range of hot, iced and ice blended beverages. The brand is known for its

premium quality products and its signature Frappes ice blended coffees. The chain

currently operates 5 outlets -2 in Chennai, 1 in each- Bengaluru, Kolkatta and Hyderabad.

CBTL: The Coffee Bean & Tea Leaf is a California-based coffee chain, owned and operated

by International Coffee & Tea, LLC and opened its first store in India in the last quarter of

2007 opening stores in Rajiv Gandhi International Airport, Hyderabad followed by a store in

Select Citywalk mall, New Delhi in March 2008.

Java Green: Java Green was started in 2003 as a chain of In-Store Cafs within Reliance

WebWorlds. After the formation of ADAG it has expanded into other locations outside

Reliance and operates within a host of retailers, food courts and corporate campuses.

Javagreen is now operational across 10 cities in India with a mix of store in store formats and

independent outlets. We are currently open at over 90 locations in Lucknow, New Delhi,

Chennai, Bangalore, Hyderabad, Kochi, Ahmedabad, Mumbai, Pune, and Kolkatta.

Planet Mocha: Mocha Coffee chain owned by Impresario Entertainment and Hospitality PvtLtd (IEHPL) started operations in 2001 at Churchgate, Mumbai. The brand soon spread to
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other prime Mumbai locations and other Indian cities. The menu has an Arabian style;

however innovative concepts like Mocha Life Shop and Mocha Communities provide this

brand an edge. The communities like MBA (Mocha Bike Association), Mocha Film Club,

Mocha Backpacker Club help bring like-minded people together and allows customer to form

their communities of interest. They are currently present in 7 cities in India with 18 outlets.

Qwikys:

Inspired by the specialty bar concept in the US, Sashi Chimla and Syam, two software

engineers from Silicon Valley set up Qwikys Corporation with a vision to set up coffee pubs

around the globe. They went to Chennai to establish the first Qwikys coffee Pub in October

1999. By 2001, Qwikys had 13 pubs and Islands and 15 Xpress kiosks, in Chennai,

Hyderabad, Bangalore, Delhi and Pondicherry.

BrewBerrys:

Brew Berrys Hospitality Pvt Ltd was formed in 2008 by Hotel Management graduates

Mr. Ankur Gupta & Mr. Ronak Kapatel. A family/self-funded startup by young

professionals, Brewberrys Caf is now one of the leading and fast growing caf chains in

India. The first Brewberrys caf opened in Vadodara, Gujarat. The company was much

focused on attaining the expertise in caf operations as well as business sense from its

first few ventures in Gujarat. The company went ahead with national expansion

drive. Presently they are present in India with about 45 stores in 15 states.

Besides, retail players like Reliance Retail and Shoppers Stop are also retailing coffee

with their multi-products offering outlets like Reliance TimeOut and Desi Caf

respectively.

Product Offerings:

In keeping with the global coffee culture, purveyors in India have been offering the products

in a wide range of variants that include hot coffee, cold coffee, coffee add-ons, powder

coffee, granitas, etc. The chains have also been adopting state-of-the-art store formats and

some even offer wi-fi access to their customers. As a step forward achievement, CCD has


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incorporated formats like music cafs, book cafs, highway cafs, lounge cafs, garden cafs

and cyber cafs targeting a diversified customer profile.

VALUE DELIVERY NETWORK

CCD is unique in its distribution way where coffee beans are cultivated in its farms at

Chikmagalur, and then distributed to the coffee outlets as shown above.

VISION AND MISSION:

Cafe Coffee Day

VISION: To be the only office for dialogue over a cup of coffee.

MISSION: To the best Cafe chain by offering a world class coffee experience at

affordable prices.

Costa Coffee


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VISION: Our vision is to be the best hospitality company that there is - a family of

related hotel, restaurant and leisure club brands recognized by our people, guests and

investors as leaders in each market in which we operate.

MISSION: To serve the best coffee in true Italian style.

Starbucks Coffee

VISION

To establish Starbucks as the most recognized and respected brand in the world,"

"Our mission: to inspire and nurture the human spirit one person, one cup and one

neighborhood at a time."

BCG MATRIX

The current market for coffee in India is $ 160 million, making it the second most popular

beverage, growing at an astronomical rate of 40% year-on-year.


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Stars:

The cafe market in India is presently pegged at Rs 5,000 crore in which Cafe Coffee Day has

the largest market share of 60 per cent as of now, followed by Barista with 30% market share.

Question Marks:


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Coffee outlets like Costa Coffe, Java Green, Mocha and CBTL have entered the coffee

retailing quite late. The market growth rate is high but the market share of each of these

players is relatively small.

CORPORATE AND DIVISION STRATEGIC PLANNING:

TATA

Consumer Products

Casa Decor Infiniti Retail Landmark Tata Ceramics Tata Global Beverage Titan Trent Westland

Industries

Mr. Bean, Mysore Gold, Coorg Pure, Tata Cafe and Tata Kaapi

Mr. Bean Junction, a unique first-of-its-kind coffee outlet, was launched in December 2005

where a customer can walk in and choose from a variety of coffee bean blends, sticking to the

traditional type of blend just the way he or she likes it, or choosing something different toassuage the sameness, all freshly ground in front of the customer. A freshly brewed coffee,

where different types are available from a filter coffee to a cappuccino, is a must have for

anyone who wants to put their feet up, lighten their mood or even while they are waiting for

their coffee to get ground. In fact, they even have an option of tasting the blends they have

chosen, all for only Rs10. Branded coffee is also available in a polypack form.

Mr. Bean Junction offers everything under one roof: fresh and ground, freshly brewed coffee

and branded coffee, and the experience in this warm and enriching ambience is value for

money. A database stores the preference of the customers, and ensures that their favourite

blend is all ready for them as soon as they walk into the outlet.


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ANSOFF MATRIX:

Assessing Growth opportunities for CCD

1. Market Penetration Strategy:

CCD being the first coffee retail chain has penetrated deep into the Indian markets by

following 3 As: Accessibility, Affordability and Acceptability. They launched a

campaign- Launch 25 caf a month Never be more than 5 minutes away from a

CCD.

2. Market Development Strategy:

CCD opened its first cafe in Pakistan's commercial capital of Karachi, famous for its

designer outlets and vibrant cafe-culture andplans to open four more cafes in Karachi

and expand into Lahore and Islamabad.

3. Product-Development:

CCD brings in seasonal menus for its customers based on the events currently in

trend. For example, they have special drinks during IPL, Cricket World-cup and

Football World-cup, etc.


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4. Diversification Strategy:

Caf Coffee Day sells various young and trendy merchandise through its stores, like

Caps, T-shirts, Bags, Mugs, Coffee Filters, Coffee Powders, Coffee Mints and Pens.

SWOT ANALYSIS

Strength: Products of extremely good quality and taste.

It is a youth oriented brand, hence huge potential since 40 % population is

below 20.

It produces/grows the coffee it serves hence reducing the cost.

USP of brand is its considered a highly affordable brand.

Weakness: Weak brand image and lacks strength to maintain brand loyalty.

Poor ambience and decor. CCD outlet served prime space for advertising and

promotions.

Many of the CCD stores are incurring losses due to wrong site selection.

Opportunities: Coffee cafe industry is one of the fastest growing industries in Asia.

More people like to visit CCD for informal meetings.

CCD has gone international, and is planning to attract many new international

markets, hence gaining international recognition.

Threats: Competition with other coffee cafes like Barista, Mochas.

Other hukka palours are also gaining lot of attention and preferred by young

generation to hang around which in turn is attracting the market captivated by

CCD.

Threats from international giants like Starbucks, Dunkin Donuts, etc.
http://www.marketing91.com/brand-loyalty/http://www.marketing91.com/brand-loyalty/


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MONITORING SATISFACTION (CONTACT

RECENT CUSTOMER)

For monitoring the customer satisfaction of caf coffee day customers, we recently

contacted one of the customer ofcaf coffee day Name Priyanka Bhutani,following

is her experience of visiting at CCD

Immediate service as soon as she reached the coffee outlet.

According to her If you think of coffee, CCD is the first thing that comes to

your mind A coffee with good Taste

It is the good place for recreation, refreshment and revival .

A place with nice ambiance and dcor and good atmosphere to hang out with

friends

So this was the experience of one of the customer ofCaf Coffe Day

CUSTOMER RELATIONSHIP MANAGEMENT

Barista Lavazza


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Barista Lavazza, the coffee retail chain, completed 13 years of its operations in India. As it

entered the 'teens', it launched a campaign to celebrate its 13th birthday. The campaign pays

tribute to the consumers, who have made it possible for the brand to reach this milestone.

The 'Bean13' activation invites customers to share their stories on experiences when they

were 13. It is being carried out on digital media through social networking sites such as

Facebook, wherein consumers can post interesting stories about when they were 13 on the

website. On-ground, the campaign involves story boards put up at Barista Lavazza and

Barista Lavazza Crme stores, where consumers can write their stories. The entries will form

a part of a contest, wherein winners will be rewarded with Barista Lavazza gift hampers.

The chain is also giving a free scratch card to all consumers with bill amount exceeding Rs

250. The scratch cards give assured prizes, ranging from coffee vouchers to free international

and domestic holidays. The campaign aims to take consumers down the memory lane and

make them recall all the fun and frolic attached with entering their 'teenage' phase.

It is being carried out at all Barista Lavazza stores across 25 cities in the country, including

outlets at Colaba in Mumbai, Camac Street in Kolkata, Defence Colony in New Delhi, The

Great India Place mall in Noida, Shipra Mall in Ghaziabad, Mantri mall in Bengaluru, Rosy

Tower in Chennai, Western Mall in Ludhiana, Banjara Hills in Hyderabad, and Metropolitan

mall.

Barista started a loyalty programme, 'Bean-o-holic, even as the modern retailers in FMCG

and apparel space and quick service restaurants (QSR) already use such cards to boost their

sales. The cards, like any other loyalty card programme, are aimed at customer acquisition

and retaining them.


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ABN AMRO and Barista Coffee Company have jointly launched a credit card the "ABN

AMRO Barista credit card", which would help Barista customers avail discounts at its outlets.

For every Rs 100 purchase at Barista outlets the card owners can earn points, which they can

use for availing discounts on purchase of other beverages.

PEST ANALYSIS

FACTORS INFLUENCING CONSUMER BEHAVIOUR IN COFFEE RETAILING

Cultural Factors:

India was pre-dominantly a male oriented society, where only the males were educated and

allowed to work. However, with the changing times, society recognised the importance of

educating the females and subsequently the females now constitute a substantial part of theworking population and are empowered with more freedom.

Females are now allowed to hang out and coffee outlets have proved to be a great place

serving their purpose.

Social Factors

Reference groups


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Primary groups such as family, friends, co-workers, neighbours, play a major role in

influencing consumers decision for visiting a particular coffee outlet. Most of the

coffee outlets are targeted to the youth population where the drive to conform to

certain groups is high.

Roles and Status

Roles and Status people also influence the choice of particular coffee outlets. For

example, the chairman or top level managers and executives would prefer going to

cafes in hotels rather than visiting a particular coffee outlet.

Personal Factors

Age and Stage in the Life Cycle

Preferences in recreation are often related to age and family life cycle stage. Youth

would go to coffee outlets more frequently as compared to married people.

Occupation and Economic Circumstances

Occupation would also influence consumer behaviour. If the occupation requires

meetings to be held between few people, they would prefer coffee outlets. But if the

numbers of people are more, they would prefer holding meetings in hotels rather than

in coffee outlets.

Economic circumstances would also influence consumer behaviour. Different coffee

outlets target people with different incomes. For example, people with higher income

would preffer going to Barista or Costa Coffee whereas people with lower incomes,

would prefer going to CCD or local coffee outlets.

Lifestyle and Values

The youth population of today is becoming highly brand conscious. They like to

associate themselves with brands with which they conform. For example, people who

are money-constrained would go to coffee shops which offer lower prices.


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Psychological factors

Motivation

Today when the world has become a global village, there is a strong need for

balancing the work-life of people. This drives up the need for recreation. Coffee

outlets are becoming the most preferred place for spending time with family and

socialising with friends and colleagues because they provide the perfect atmosphere

and cosy ambience over a cup of coffee and snacks, comfortable seating and many

other facilities like Wi-fi connections, books, magazines, music, board games and

musical instruments,etc.

BUYING DECISION PROCESS

Problem Recognition

Spending time with family and socialising with friends and colleagues would create

an internal stimulus for recreation.

Information Search

Sources of information for Coffee outlets would be-

1. Personal: Family, friends, neighbours, colleagues, etc.

2. Commercial: Advertising through billboards, magazines, newspapers, television,

brochures, internet, etc.

Evaluation of Alternatives

Coffee outlets would be evaluated on the basis of ambience, atmosphere, cleanliness,

price, location, quality, service, taste, etc.

Purchase Decision


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After the consumer has evaluated the alternatives he would have already made up his

mind for a particular outlet. In executing the purchase intentions the consumer would

consider the factors important according to him, like deciding to go to a coffee outlet

based on the price or brand (i.e., CCD, Barista, Costa Coffee, Java Green, Mochas

etc), location of the shop (which area is the shop located) and the timing of visit

(afternoon, evening or night).

Post Purchase Behaviour

Repeat Consumers: If the experience of visiting a particular coffee outlet satisfies or

delights the customer, then there are chances of him visiting that outlet again.

Word of Mouth: If the consumers is delighted by the experience of a particular coffee

shop, then there is a high that he would take his friends, neighbours, colleagues, peers

etc., to the same shop, or may recommend it to them.

If the consumer is satisfied, he may or may not talk about his experience and if he is

dissatisfied, he would communicate a negative image about the brand to the society.

IDENTIFYING MARKETS, SEGMENTS AND TARGETS

COSTA COFFEE

Market Segmentation

Economic Profile

Middle Class

Upper Middle Class

Privileged Class


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Age Groups

Teenagers 16 - 19 years

Young Adults 18 - 25 years

Adults 2550 years

Mature 50 and above

Professional Classification

Students

Young Professionals

Mature Professionals

Retired

Marital and Familial Status

Single

Single with Dependants

Married

Married with Children

Married with Dependants

Target Market

Economic Profile

Upper Middle Class

Privileged Class

Age Groups

Young Adults 18 - 25 years

Adults 2550 years

Mature 50 and above


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Professional Classification

Students

Young Professionals

Mature Professionals

Retired

Marital and Familial Status

Single

Single with Dependants

Married

Married with Children

Married with Dependants

Market Positioning

The positioning strategy to be employed by Costa is in keeping with their global positioning-

i.e. they are the ITALIAN COFFEE MASTERS. The quality of their coffee is better than the

competitors- it tastes better; it is more hygienic and totally unique. The image of Costa is thatit has the BEST and most UNIQUE coffee. The secondary or underlying positions of Costa-

globally and for the upcoming market in Pakistan are the Highest Standard of Luxury, The

Best Service and a Reputation For Excellence.

MARKET LEADER-CAFE COFFEE DAY (60%)

MARKET CHALLENGER-BARISTA (30%)

Marketing Strategies:

Cafe Coffee Day-

CCD has become the largest youth aggregator, and from a marketing stand point, the

success has come by focussing on 3 As: Accessibility, Affordability and

Acceptability.

It has positioned itself as a meeting place for 15-29 year olds.

It has marketing associations with youth-oriented brands like Levis, TVS, Airtel, etc.

All the stores are well lit and respectable, yet informal.


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CCD has also tied up with IPL teams such as Kolkata Knight Riders and Chennai

Super Kings for selling their merchandise.

It has even tied up with WorldSpace and Microsense to enable its cafes with satellite

radio and Wi-Fi, respectively. 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 cafs

Lounge cafs

Merchandising- Every CCD stocks merchandise ranging from coffee mugs, Tshirts,

caps, bags, coffee filters, mints, different flavours of coffee powders, tea and cream,

wafers and biscottis. It also merchandises promotional materials for other brands it

associates with. When some brands are conducting events for which passes are

distributed or movie premiere tickets are given out, CCD is an important hub for these

activities as most of the target market.

CCDs Guide to Active Holidays- It is a travel guide focusing on adventure sports and

is available in the CCD outlets, for people seeking escapade from monotonous life.

Caf Beat- An in-house magazine which gives the entire low-down on whats

happening in CCD outlets across the world. It describes experiences of customers,

celebrations in CCDs, and covers youth-centric topics like movies, music, travel,

lifestyle, e-dating, books and careers.

Caf 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.

Caf Coffee Day has an advantage of top-of-mind recall for coffee-shop-goers in

India, especially because it set the caf ball rolling in the country.


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The food items available in Caf Coffee Day are obtained from local suppliers

whereas Baristas food is catered by the Taj caterers. Caf Coffee Day would henc e,

have a lower-cost advantage.

SINCE STARBUCKS is about to make an entry into the Indian market, Coffee CafeDay (CCD) is trying best to maintain grip on its market share. They have recently

launched the Coffee Day WakeCup, a single serve coffee brewing system.

Barista-

Barista Lavazza started out with no publicity, the espresso bars were the

advertisements. The posters, tent cards and ambient graphics inside each espresso bar

did all the talking, in a tone of voice that was witty, warm and welcoming. The rest

happened through word-of-mouth, creating a group of loyalists along the way, for

whom Barista Lavazza today is more than just a habit

Barista Lavazza has also created activities around special days like Valentines Day.

Additionally it had organised in-store events like the Friendship Jam which involved

exciting contests and activities for an entire week. Occasional live music

performances, tarot card readings, handwriting analysis sessions, makeovers and

caricature artists also happen to enhance the overall guest experience.

In addition to autonomous programs, Barista Lavazza has also been linked with big

brand names to improve visitor experience with appropriate & valuable offerings.

Lately, new product placement plans have also permitted Barista Lavazza Espresso

Bars to feature in commercials and films.

Barista Lavazza considers increasing consumer experience by concentrating on

numerous touch-pointsthe design of the store, the rank of its service, the value of its

goods and quality of its product. The brand frequently revives its store appearance and

set of choices to carry on with varying consumers style. Barista Lavazza moreover

focuses on themes and paths that harmonize coffee, for example songs, art and books,

whereas some outlets also put forward Wi-Fi connectivity to the Internet.

They provide various board games to their consumers and also guitars and other

merchandises. Barista Lavazza offers few of the finest loyalty programmes for its

consumers.
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COMPETITIVE FORCES

Potential Entrants

The Singapore based coffee club Ltd and Starbucks, which is the world leader

in the coffee retailing market and is one of the strongest brands in the world is

planning to enter the Indian market very soon.

Coke has launched its coffee product which is named Georgia gold and it isavailable across all McDonald's restaurants in India.

There are many local chains which have opened and many more are expected

to open up soon.

Buyers

The potential buyers are teens i.e. students, working professionals and old

couples in the cities.


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The volumes of customers coming into these outlets are very large as the

target segment for such outlets is the young generation.

The buyers knowledge about the product is large and they are well informed

as to the choices that they make as many choices are available for the buyers.

Suppliers

The production done in these outlets are not outsourced but are done by

resources owned by the companies themselves, most of the companies own

coffee plantations. For example, caf coffee day grows its own coffee.

In case of Barista coffee parlour, earlier coffee was made with high quality

Arabic beans and Baristas from Italy were invited to create blends. Due to

strategic alliance with Tata Coffee in 2001, coffee beans are provided by Tata

coffee as well.

Threat of substitute products

Substitution is very low in this business as the main focus of the producers is

not economy but more towards the quality of the product produced.

The core-competency of these companies is their ambience and dcor that is

the lifestyle they provide , these lifestyle needs of the consumers are also been

satisfied by other fast food joints like Mc Donalds, Pizza Hut, etc.

BRAND EQUITY

Brand Awareness

CCD is one of the top recognised restaurants for a evening hang outs by the people

especially the youngsters. CCD is recognised as the South Indian Brand because of the

customer preference of the coffee is huge in South India.

Taste & Quality of Products:

CCD is known for the Taste & Quality of their products. If they work on this aspect,

there is a 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.


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Value for Money proposition:

CCD is projected as an affordable brand. This strategy has worked extremely well

so far.

Strong Youth Orientation:

CCD is and has always been a youth oriented brand. In a country where over 40% of

the population is under the age of 20, there is a huge potential for CCD to become one

of the countrys largest youth brands. The untapped market share and potential for

growth is enormous.

Brand Value

CCDs wide network- the anytime, anywhere cafe.

CCD has made a connection with the Indian Consumers, predominantly among the

youth.

Collective fun over coffee

Hangout place

Social hub

Brand Recall

The logo colors signify:

Red- Leadership, passion

White Swirl- Purity of purpose, invigorating properties of coffee

Green Stroke- 125 years of coffee growing heritage of this vertically integrated group.

In October 2009, CCD unveiled a new brand logo, a Dialogue Box, to weave the concept of

Power of dialogue. In accordance with this new identity, CCD planned to give all its

existing outlets a new look by the end of 2009. These cafes were redesigned to suit different

environments such as books, music, garden and cyber cafes, suitable for corporate offices,

university campus or neighbourhood.


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POINTS OF PARITY (Barista)

Barista Lavazza was priced at premium, however it reduced its prices facing

competition from other coffee outlets and now has competitive prices.

It provides various loyalty programmes like other retail outlets.

It also has its own merchandises which its consumers can buy just like that of CCD.

POINTS OF DIFFERENCE (Barista)

Differentiation Strategy

In the case of coffee palours, the differentiators identified on the basis of the study are as

follows

Ambience and Dcor

Quality of staff Service

Food

Presentation

Cleanliness

Price

Wide product range

Quality of products

Customer relationships

Barista opted for the differentiation strategy to gain a competitive advantage over its

competitors. The most important attribute of Barista is ambience. This is the actual

uniqueness in a broad market consisting of various coffee players. Barista did realize that the

consumers were not just looking for a place to have a cup of coffee but were looking for a

place to hang around and relax. Thus, they decided to create a place where the consumers

would feel at home. The ambience inside is comforting and casual which is one of the major

reason of its success. They created a coffee bar with a typical Italian environment where

people could get together over a cup of coffee and enjoy themselves in a comfortable and

relaxing environment. It offers customers a very interactive social environment by providing

newspapers, magazines, a guitar, games and television on, music playing as well as message

boards to pen down your thoughts. Some stores 24 also have an outlet of Corner Bookstore

(they joined hands in November 2003) which sells all varieties of books. Moreover, most of


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the people feel that its ambience and aroma of coffee which is a major driving force. It has

games like scrabble, dictionary etc and books available to keep one engaged. People can also

play guitar which is kept against the corner wall. It also has magazines and newspaper which

can be read while sitting there and a take away newspaper which is quite popular.

This has been very successful in attracting customers, especially their target market of

teenagers, youngsters, professionals and families. They have promoted themselves as a fine

caf and not as a coffee pub that Caf Coffee Day is or Qwiky's did. Thus, the experience of

having a coffee at a Barista is definitely different than having it at any other coffee parlour.

PRODUCT LEVELS: CUSTOMER VALUE HIERARCHY

Core Benefit: Recreation, spending time with family and socialising with friends and

colleagues.

Basic Product: Coffee shops should have table, chairs, coffee and snacks

Expected Product: Consumers expect the ambience of the coffee shops, to be cosy and

relaxing. It should have a variety of coffees, good quality of snacks with good services, Wi-fi

facility, charging points, etc.

Augmented Product: Coffee shops provide loyalty programmes like loyalty cards eg. Ccd

barista.

Potential Product: Coffee Shops providing home delivery service, to deliver coffee.

PRODUCT MIX OF BARISTA

Coffees & Teas

Refreshing

Alternatives Eatables

Coffee with Milk Smoothies Sandwiches


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Cappuccino

Caffe Mocha

Caffe Latte

Guava

Mango

Grape

Paneer Tikka

Cheese & Tomato

Chicken Tikka

Smoked Chicken

Black Coffee

Espresso Italiano

EsperanoTM

Americano

Granitas

Blue Curacao

Lime Ice

Mixed Fruit Tango

Guava Crush

Rolls

Kadhai Paneer Roll

Chicken Masala Roll

Dessert Coffees

Latte Bianco

Caffe Borgia

Milk Based

Strawberry Freeze

Mocha Freeze

Icepresso

Pastas

Tangy Tomato Pasta

Creamy Chicken Pasta

Cold Coffees

BrrristaTM

Brrrista FrappeTM

Brrrista BlastTM

Iced Caffe Mocha

Iced Tea

Lemon

Peach

Other Food

BBQChicken Croissant

Coffee Add-ons

Various Flavours

Chocolate Fudge

Whipped Cream

Espresso Shot

Ice Cream Scoop

Other Drinks

Ginger Fizz

Kinley Water

Desserts

Walnut Brownie

Mocha Excess

Chocolate Excess

Dark Temptation

Chocolate Mousse

Chocolate Chip Muffin

Almond Raisin Muffin

Apple Cake

Teas

Assam

English Breakfast

Darjeeling


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Earl Grey

Brand Extension

Coffee shops are expanding their market through brand extension. There is always a fierce

competition between Barista Lavazza and Cafe Coffee Day. CCD launches its mineral water,

cookies, chips, t-shirts, mugs etc. Barista is adding a new range of beverages and eatables,

mugs, jewel sippers, candles and soft toys etc.

CHARACTERISTICS OF SERVICE INDUSTRY (COFFEE RETAILING)

Example of Barista

1. Intangibility:

As services are intangible it is very necessary to tangibilize the intangible. Various

coffee outlets owners do this by adapting the following number of marketing tools.

Place: Barista looks to cater to their target market with strategically located

outlets. Their outlets are generally located at High Street/ Family Entertainment

Centers. Considering their generic appeal, there are Barista outlets in and around

Malls, Cinemas, Colleges, and Offices etc. this endorses their brand image of a

caf that

Dcor and Architecture: Baristas internal dcor and architecture expresses the

simplicity you would normally associate with traditional cafs. The furniture is

made of light shades of wood, and there are comfortable sofas in bigger cafs. The

walls are shades of orange, with various photographs of the love for coffee spreadaround each outlet.
http://en.wikipedia.org/wiki/Cafe_Coffee_Dayhttp://en.wikipedia.org/wiki/Cafe_Coffee_Day


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Prices: Considering that Barista is trying to target a market whose age range is

between 18 and 60 years, a pricing policy appealing to this segment is difficult.

Extremely low prices act as a deterrent to some customers who might regard it as an

indicator or quality, while very high prices cannot be afforded by most of the youth.

Logo, Colors, Images: Barista, since the beginning has looked to use colors in its caf

interiors, logos and images; to project a warm, earth glow, synonymous withcoffee.

Barista uses shades of Orange & Brown to good effect to promote its laid- back

atmosphere.

2. Inseparability:

As services are produced and consumed simultaneously. In coffee outlets also the

consumers who visit a particular outlet would only get the experience of having the

coffee at a particular coffee outlet. Here the presence of both the consumer as well as

service provider here the coffee or other snacks provider at the outlets should be

present.

3. Variability:

Services are highly variable they would differ from one coffee outlet to other. For

example, Service at Barista in Mumbai would be different as compared to Service at

Barista in Ahmedabad. And to ensure that consumers have the same experience at all

the outlets, Barista undertakes the following measures-

Quality Sources:

Barista has a check on the quality of its products every 14 days. Barista also

incorporates TQM at its headquarters in Delhi. Since Delhi is the base for all its

distribution, quality control measures are adopted there to avoid any poor quality

products being distributed.

Traning and development of human resource:


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Baristas boom in growth has sparked of a greater need for more and more human

resources. This poses a challenge for Barista to ensure that their employees all across

the country are well trained and provide consistent service at every outlet. Barista has

a Training & Development policy, which basically consists of two parts, Induction

Training and Refresher Training.

4. Perishability

As services cannot be stored they are perishable. Because of perishables nature of

services coffee outlets provide the following offers in their service:

Reserving the table at the time of special occasions such as birthdays, anniversaries

etc.

Waiting lounge is made this is generally used during the vacations of students because

at that time the outlets are filled with students.

Using of price incentives along with coffee

Adding new varieties of snacks and flavours in coffee during the peak seasons when

the demand is more.

Differential pricing for different customers.

Launching of loyalty programmes.

SERVICE QUALITY MODEL:

Under coffee retailing there can be following gap:

Gap between perceived service and expected service:

Under this gap the owner of the coffee outlet might think that the consumer wish to goto a coffee outlets that have got good ambiance, chilling and relaxation atmosphere

only, but this may ultimately raise the consumers expectation that a particular outlet

might also provide tasty and good quality coffee along with such good ambiance and

atmosphere but this may not be the actual case. Here the consumer would find a gap

between consumers expected services and actually perceived services.

CONSUMER BUYING BEHAVIOUR


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Consumer buying behaviour for visiting to a coffee outlet could be of high

involvement and few differences between the brand that is could be complex

buying behaviour or dissonance reducing buying behaviour

PRICING STRATEGY ADOPTED BY BARISTA

Barista has a Skim Pricing Policy. They began with a higher price, and skimmed the cream

for the market. With the sudden spurt of growth in number of outlets, came the benefits of

economies of scale. Because of this, they have been able to gradually lower their prices, and

appeal to different segments of their target market. Currently, their prices are the lowest they

have ever been, and they can competitively match their prices against Caf Coffee Days

prices. The prices are constantly changing though, and the last 1-year has seen 3 changes

(mostly reductions) in prices. This gradual price reduction meant that Barista could maintain

its profit- maximization policy until it could earn large cost savings because of the benefits of

high volume. The main factors that affect their pricing are their cost of goods sold. The costs

are quite high because imports a majority of its products and product- sources.

INTERNATIONAL MARKET

Example: StarBucks

Which Markets to Enter?

StarBucks decides which markets to enter based on the following:

Market size


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Market conditions for its products in the country

Deciding on the local partner for its business

Eagerness among the younger generation to imitate western lifestyles made these

countries attractive markets for Starbucks.

How to Enter?

Joint Venture

A significant example here of strategic choice when it comes to evaluating the options for

growth. Starbucks has opted to enter into a strategic alliance with Tata Group as it attempts to

establish a position in the Indian market.

On 31 January 2012, Starbucks announced its objective to open 50 outlets in India by the end

of 2012, through a 50-50 joint venture with Tata Global Beverages. The two partners will

invest a total of $80million initially.

STARBUCKS PREVIOUS ATTEMPTS TO ENTER INDIA

Starbucks, famous for making coffee drinking fashionable in the US, had tried to enter India

by striking an alliance with Kishore Biyani's Future Group three years ago, but these plans

were rejected by the Foreign Investment Promotion Board, or FIPB, the government body

that regulates inflow of foreign money into India's factories, shops and mines.

Organised coffee retailing is a niche but growing segment in India. Industry officials said the

size of the segment, which is dominated by unlisted companies, is around Rs 500-600 crore

Until a year ago, Starbucks were reviving its plans for India and began talks with Shyam and

Hari Bhartia-controlled Jubilant Group for a possible alliance.

Jubilant Foodworks, part of Delhi-based Jubilant Group, is the India franchisee for Domino's,

the pizza chain. The group's flagship is Jubilant Organosys, a leading contract manufacturer

of pharmaceutical products. However this too also did not work out and finally Starbucks

Coffee signed a Memorandum of Understanding with Tata Coffee in January 2011.


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Documents

Marketing project on cofee retailing