Cafe Coffee Day 2011

Chanakya Kandukuri( DM-06-003 )Aurora’s Business School

Café Coffee Day

Executive SummaryOn 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 ContentsExecutive 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

CCD’s 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

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Corporate ProfileCafe 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.

There’s 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.

MissionTo 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 Café Emporio runs on 2 formats similar to CCD’s regular cafés and

Lounge & Square set ups.

CCD is having 1134 stores till 24/9/2011

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1 14 213 11341996 2001 2005 2011

Total Outlets in Past 15 years

Product MixCafé Coffee Day: Product Width

Coffees & Teas Refreshing Alternatives Eatables

Hot Coffee Granitas Melting Moments

Espresso Blood Orange Banana n’ Walnut Cake

Espresso Americano Cool Blue Banana Chocolate Mousse

Macchiato Pineapple Crush Banana Caramel pie

Cappuchino Emerald Ice Chocolate Doughnut

Café Latte Ruby Surprise Cookies

Chococinno Marble Cake

Café Mocha Pineapple Getaux

Irish Coffee Chocolate Cake

International Coffee Smoothies Ice Creams

Colombian Juan Valdez Mango Colada Vanilla

Ethiopian Qahwah Strawberry Colada Chocolate

Kenyan Safari Seasons Best

Cold Coffee Cremosas Quick Bites

Sweet Mint Litchi Samosa

Cold Sparkle Ginger Spice Puff

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Brandied Banana Pina Colada Pizza

Tropical Iceberg Croissant

Iced Eskimo French Fries

Kathi Roll

Coffee Add-ons Teas Wraps

Honey Assam Tea Biryani

Flavoured Syrups Masala Chai Sandwiches

Red Eye Lemon ‘n Ice Tea Kulcha

Whipped Cream Kashmiri Qahwah Burger

Scoop pf Ice cream Apple n Cranberry ice tea Pasta

Chocolate Sauce Masala Sandwich

CCD flow of Generating Money from Beans to Coffee,

Generating Money from Retail Café Coffee Day Outlets

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Marketing MixProduct:

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:

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 Day’s

customers. It is a loyalty program to gain new customers and retain the existing ones.

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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

though the letters have congealed out of a liquid The word ‘Cafe’ was made to appear

dominant to indicate Cafe Coffee Day’s 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.

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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.

Positioning:

Customer Profile:

60% of the customers who visit the café are male and 40% are female. 52% of customers who

visit the cafes are students.

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Café Coffee Day is known to experiment with different café formats. They have been:

Music cafés

Books cafés

Highway cafés

Lounge cafés

Garden cafés

Cyber cafes

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.

CCD’s 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 Café 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

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Competitive Analysis

Direct CompetitorsBarista: This is the closest competitor to Café 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 day’s 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

Indirect CompetitorsEateries like McDonald’s and Haldiram’s 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 McDonald’s.

Local tea joints and coffee shops like Café 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 CompetitorsStarbucks 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

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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 Barista’s food is catered by the Taj caterers. Cafe Coffee Day

would hence, have a lower-cost advantage.

SWOT Analysis

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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 ABC’s other offerings such as The Serai Resorts.

CCD’s 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 café in any location

where some business can be generated

Suggestions

Focus needs to be on product innovation and experience to meet rising customer

expectations.

With time, the rural market will be ready for CCD’s 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

CCD’s 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.

CCD’s 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

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