Cafe Coffee Day

AMITY GLOBAL BUSINESS

SCHOOL, HYDERABAD

Service Marketing

Project Report On Café

Coffee Day

A Project Report on Café Coffee Day

Submitted by :- Nandita Sadani

Enrollment No. :- A30601909048

PREFACE

Marketing strategies are methods followed by most successful and well known companies to

improve their scope in any market. It is a means by which we determine whether one company is

better than the other or not. Food chains are a growing industry in the modern world with an

increase in the number of working hours of the average working person. Hence, even food chains

need to improve their marketing strategies to appeal to the middle-class consumer.

The main aim of this project is to make the reader understand the various strategies followed by

food companies to improve their scope on the consumer and to add appeal to their brand as a

whole by being creative and unique. Here I am going to talk about the Café Coffee Day as a

service industry. The Strengths, Weakness, Opportunity and Threats of Café Coffee Day. The

Environment, Competitors etc of Café Coffee Day. The service blue print of Café Coffee Day.

The various techniques followed by Café Coffee Day have been listed in this project in an easy

and understandable manner.

The contents of this project focus on the marketing strategies and techniques used by Café

Coffee Day to make it such a global brand with universal appeal.

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TABLE OF CONTENTS

S. No. Contents Page No.

1. Executive Summary 4 - 5

2.2.12.22.32.42.5

Industry analysisCurrent trends in the industryRoles of technologyMajor playersCompetitionTangibility spectrum

6 -131414

14 - 1516 - 20

20

3.3.13.23.33.43.6

Typical Service OfferingCustomer’s expectationsBundle of benefitsTypical service performance of firmsServices quality dimensionsCustomer‘s involvement in the service delivery

2121 - 2223 - 25

2626 - 27

27

4.4.14.24.3

Service BlueprintService encounters / moments of truthValue of blueprintingLearning form this exercise

2829

29 - 3131

55.15.2

Physical EvidenceRoles of servicescape play in this industryAspects of servicescape influencing the service delivery process

3232 – 3333 – 34

6.6.16.26.36.46.5

Wild CardPricingPromotionPlacePeopleProcess

3535 - 37

37383838

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6.66.7

PositioningDistribution Process

39

7.7.17.2

Industry SectionSWOT AnalysisPorters Five Forces Model

4040 – 4142 - 43

8. Conclusion and Recommendations 44

9. Bibliography 45

1. EXECUTIVE SUMMARY

ANALYSIS OF THE COFFEE BAR INDUSTRY

Coffee has been around in India since the 17th century. However, coffee drinking has

traditionally been largely restricted to domestic consumption, and mostly in the South Indian

states of Tamil Nadu, Karnataka, Kerala and Andhra Pradesh. Coffee has been around in India

since the 17th century. However, coffee drinking has traditionally been largely restricted to

domestic consumption, and mostly in the South Indian states of Tamil Nadu, Karnataka, Kerala

and Andhra Pradesh.

THE 7 P’S OF MARKETING MIX

Product , price , place , promotion , process , people , physical evidence constitute the 7 P’s . All

the P’s are described in detail in the project.

SERVICE BLUEPRINT

Service blueprints need to describe time in a service. This includes the sequence of events of a

service experience, its durations and timings. A blueprint should graphically describe this time

element. A sequence of events - sometimes called use cases or flows - is relatively easy to

blueprint as it can be represented in a linear flow identifying user actions, service responses and

the touch points or interfaces that enable the service relationship. Sequences become challenged

when there are multiple options or directions and when the planned process goes awry.

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SERVICES CAPE

Servicescape may be likened to 'landscape'. It includes facilities exterior (landscape, exterior

design, signage, parking, surrounding environment) and facilities interior (interior design &

decor, equipment, signage, layout, air quality, temperature and ambiance).

Servicescape along with other tangibles like business cards, stationery, billing statements,

reports, employee dress, uniforms, brochures, web pages and virtual servicescape forms the

'Physical Evidence' in marketing of services.

Physical evidence consists of servicescape combined with the tangible elements, so servicescape

is a part of physical evidence.

SWOT Analysis

It tells about the strengths, weakness, opportunities and threats of the industry. The strengths and

weakness are internal and the opportunities and threats are external.

ANALYSIS OF CAFÉ COFFEE DAY

Café Coffee Day pioneered the café concept in India in 1996 with the inauguration of its first

outlet in Bangalore. CCD saw the potential of the youth market and embarked on a dynamic

journey to become the largest organized retail café chain with a distinct brand identity of its own.

Through the assignment, we would Study the marketing Mix adopted by café mocha. Their

target audience and market positioning

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2. INDUSTRY ANALYSIS

In hospitality industry there is much kind of outlets like hotels and resorts, restaurants, bar,

coffee shop these are the place is serving food and beverage here I am going to give my research

about coffee shops which providing like hot and warm coffees and quick bites to the customers. I

did my research work on Indian coffee shop company who having more than 900 café in 91

major cities in India and outside India.

The world coffee production in the coffee year 2009-10 is estimated to be 123.6 million bags

signifying a decline of over 4.5 million bags in the CY 2008-09 when production totaled at 128.2

million bags. This is revealed in a report of International Coffee Organization market report for

January 2010 excluding additional information that has to come from Colombia and Vietnam.

The ICO report also states of a significant fall in coffee production in Brazil - by about 14

percent besides production shortfall apprehended in countries like Cote d'Ivoire; Tanzania,

Uganda, Papua New Guinea, Vietnam, Mexico, El Salvador, Equador and Peru. The Colombian

production is unlikely to register worth mentioning increase. The over all world supply of coffee

is likely to be tight in 2010 due to low level of opening stocks as well.

Total world exports of coffee (2008 & 2009)

2008 2009 % Change

Colombian Milds 12219 9278 -24.07

Other Milds 22524 20861 -7.38

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Brazilian Naturals 28724 30033 4.56

Robustas 34199 34518 0.93

Total 97666 94690 -3.05

Source: International Coffee Organization, Coffee Market report, January , 2010

In the export front calendar 2009 closed with a decline of 3 percent at 94.7 million bags from

97.7 million bags in 2008. World consumption however is provisionally estimated at 130

million bags in 2008 from 128 million bags in 2007. Domestic consumption in exporting

countries was up at 36.7 million bags compared with 35.4 million bags in calendar 2007.

The Brazilian Coffee Industry Association expects 4.15 percent increase in world consumption

of coffee.

Indian Coffee Board puts country's coffee production at 2.90 tonne (Post monsoon estimation)

and 3.06 tonne (Post Blossom Estimation) respectively. For the present crop year beginning

October, the board has estimated an output of Arabica at 101,525 tonnes and Robusta 204,755

tonnes. Karnataka leads the country with 2.05 tonne (Post monsoon estimation) and 2.21 tonne

(Post Blossom Estimation) production followed by Kerala and Tamil Nadu. According to ICO

estimate, India produced over 3.1 million bags of 60 kgs each in 2009 compared with 3.3

million bags in 2007.Country's coffee exports during fiscal 2008-09 stood at 1.96 lakh tonne

signifying marked decline from 2.18 lakh tonne in 2007-08.

India's Coffee Production (In tonne)

State2006-07 2007-08 2008-09 2009-10

Karnataka206025 191575 183860 205700

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Kerala59475 49000 57200 59250

Tamilnadu18225 18100 16255 19350

Non-traditional areas

(Andhra Pradesh & Orissa)

4085 3175 4870 5185

North Eastern region190 150 115 115

Total288000 262000 262300 289600*

Post Monsoon estimates *

Source: Federal Ministry of Commerce, Government of India

India accounts for about 4.5 percent of world coffee production and the industry provides

employment to 6 lakh people. Among the coffee growing states, Karnataka accounts for 70

percent of country's total coffee production followed by Kerala (22 percent) and Tamil Nadu (7

percent). Europe accounts for about 70 percent of India's total coffee exports. Of this again, 70

percent is shipped via Suez Canal. Major Indian coffee importing countries include Italy,

Germany, Russian federation, Spain, Belgium, Slovenia, US, Japan, Greece, Netherlands and

France.

India's Exports of Coffee

Year Quantity (In tonne) Value ( In Rs crore)

2006-07 249029 2007.90

2007-08 218998 2046.29

2008-09 197171 2242.64

2009-10 (Upto March 8, 2010 181225 1944.98

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Source: Federal Ministry of Commerce, Government of India

With a view to expand coffee cultivation, Coffee Board has been implementing developmental

programmes for coffee development in North Eastern Region and Non Traditional areas. During

11th Five Year Plan, Coffee Board has proposed to support coffee expansion programme taken

up by the Integrated Tribal Development Agency on 24000 ha. area in Andhra Pradesh and on

850 ha. area in North Eastern Region, which will facilitate export of coffee. As a part of export

promotion, the Coffees from different regions with their logos are promoted including the coffee

from the areas under Integrated Tribal Development Agency, as ‘Araku’ Coffee. Constant

endeavour is being made by the Government to help the coffee growers to ease their bank debts.

CAFÉ COFFEE DAY

India’s favourite coffee shop, where the young at heart unwind.

Café Coffee Day is a part of India's largest coffee conglomerate, Amalgamated Bean Coffee

Trading Company Ltd. (ABCTCL), the first to roll out the ‘coffee bar’ concept in India with its

first café in Bangalore. It’s a Rs. 750 crore, ISO 9002 certified company. With Asia’s second-

largest network of coffee estates (10,500 acres) and 11,000 small growers, making its holder the

largest individual coffee plantation owner in Asia, this in addition to being India's only vertically

integrated coffee company. Coffee Day has a rich and abundant source of coffee. This coffee

goes all over the world to clients across the USA, Europe and Japan, making us one of the top

coffee exporters in the country.

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We all know that Café Coffee Day is one of the most popular hangout places. The coffee joint is

very famous among youngsters. Coffee is one of the favorite beverages and has become more

appealing because of its variety.

Coffee has been around in India since the 17th century. However, coffee drinking has

traditionally been largely restricted to domestic consumption, and mostly in the South Indian

states of Tamil Nadu, Karnataka, Kerala and Andhra Pradesh. Coffee has been around in India

since the 17th century. However, coffee drinking has traditionally been largely restricted to

domestic consumption, and mostly in the South Indian states of Tamil Nadu, Karnataka, Kerala

and Andhra Pradesh.

India ranks sixth as a producer of coffee in the world accounting for 4.5% of the global coffee

production. India has about 170,000 coffee farms cultivating around 900,000 acres of coffee

trees. India is the largest producer and consumer of milk in the world with 98% of milk being

produced in rural India. Coffee consumption in India is growing at 6% per annum compared to

the global 2% plus.

Café Coffee Day’s menu ranges from signature hot and cold coffees to several exotic

international coffees, tea, food, desserts and pastries. In addition, exciting merchandise such as

coffee powders, cookies, mugs, coffee filters, etc. is available at the cafés.

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. 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

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available is used to maintain consistency and roast the coffee beans to the demanding

specifications of the discerning coffee consumers.

Café Coffee Day (CCD) pioneered the café concept in India in 1996 by opening its first café at

Brigade Road in Bangalore. Today, more than a decade later, Café Coffee Day is the largest

organized retail café chain in India with cafes functioning in every nook and corner of the

country. Drawing inspiration from this overwhelming success, Café Coffee Day today has cafes

in Vienna, Austria and Karachi. What’s more, new cafes are planned across Middle East, Eastern

Europe, Eurasia, Egypt and South East Asia in the near future.

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 brand identity, CCD planned to give all its

existing outlets a new look by the end of 2009. Cafés would be redesigned to suit different

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

university campus or neighborhood. The change plan included new smart menu, furniture design,

among others.

VISION:

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

MISSION:

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

The offerings are designed in such a manner that one cannot be spelt without the other; there are

the hot coffee or cold coffee combinations with delectable desserts and special coffee and eats

combinations for even a group of four friends.

Coffee Day Comprises of the following Sub Brands

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1. Coffee Day - Fresh & Ground

2. Café Coffee Day

3. Coffee Day – Vending

4. Coffee Day - Xpress

5. Coffee Day – Exports

6. Coffee Day - Perfect

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 i.e.; 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.

Key Features

Pioneers of the Café Concept in India with the 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:

1 . Affordable Price

2 . Coffee – Winner of Platinum, Gold, Silver and Bronze medals at the India Barista

Championship 2002

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2.1 CURRENT TREND IN INDUSTRY

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. 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.

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 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 Qwikys, 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.

The more than US $150 million organized coffee retail business in India is coming into its own,

fed by rising incomes and a fast-food sector that is growing at 40 per cent annually. Coffee

consumption has increased from 55,000 tons to 80,000 tons after decades of stagnation. Industry

sources say the niche coffee retail format is growing at 10-12 per cent a year, with branded

coffee accounting for 53 per cent of sales, unbranded 40 per cent and cafes 7 per cent.

MARKET SIZE IN US

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Snapshot: Coffee Shop

Retail Sales Estimates Year End 2009 Coffee Cafes: (beverage retailers with seating) 1,250

locations averaging $550,000 in annual sales = $ 6.12 billion or adults who have visited a

coffeehouse in the past week:

Average weekly spending $5 or under: 41%

Rarely or never purchase food: 49%

Consume the beverage off-premises: 52%

Demographics

Seventy-seven percent of U.S. adults drink coffee daily, and gourmet coffee consumption has

risen in the past five years. According to Scarborough Research, a market research firm that

studies media, lifestyle, and shopping patterns in the United States, in October 2008, 12 percent

of adults have been to a coffee shop in the past month. Although popularity of coffee shops has

recently spread across the nation, the West coast has the most coffee shop patrons. The ideal

ratio of coffee shops to residents in a particular area is 1:10,000

2.2 ROLE OF TECHNOLOGY

Technology plays a major role in Café Coffee Day because all the work like billing, stock

maintenance, inventory control, etc is done with the help of computers.

For making the coffee and tea they require machines, which give an edge to the service provider

over local players like the small tea stall or coffee stall.

2.3 MAJOR PLAYERS IN THE INDUSTRY

Following are the major players in coffee shop industry:

A. Barista Lavazza

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One of India's largest franchised chains of coffee bars, the Barista Lavazza coffee

company operates around 205 outlets across India – 15 crème lounges and the rest

espresso coffee bars.

It plans to open 300 new stores over the next three years and has begun aggressively

marketing its products outside Indian borders into neighboring countries. Considered

the Starbucks of the East, Barista offers many of the same menu items like espresso,

lattes, cappuccino and various pastries, in addition to basic coffee. Despite being

Indian, Barista sticks closely to its Italian roots by serving Italian coffees exclusively.

B. Costa Coffee

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.

The chain is currently operational with 36 outlets and expanding aggressively to

tap this potential market.

C. Café Mocha

It was started by a Mumbai based entrepreneur Riyaz Amlani, who has a long

experience in the hotels and restaurants business. This store is strikingly different

from others, they love being over-the-top and thus it’s a place that either you love

it too much or find it ’Over the top’. Studying the marketing Mix adopted by café

mocha. Owned by Impresario Entertainment & Hospitality Pvt. Ltd.

Mocha opened its doors at Churchgate (Mumbai) in December 2001

15 operational outlets across the country and its own central kitchen

Future plans for Singapore, Dubai and New York and Chicago.

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Retail players like Reliance Retail and Shoppers Stop are also retailing coffee with their multi-

products offering outlets like Reliance Timeout and Desi Café respectively.

2.4 COMPETITION

Barista is the major competitor

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”. 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

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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.

Marketing Mix

Price Mix

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 Café Coffee Day’s 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. 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. But since Barista’s current consumer profile is quite young, their prices are mostly inexpensive, and at par with their competitors.

Process Mix

The order and delivery process at Barista is based on self- service, where a customer goes up to the counter to place his order, and goes back to the counter to pick his delivery once it is prepared.

Product Mix

Coffees & Teas RefreshingAlternatives

Eatables

Coffee with Milk Smoothies SandwichesCappuccinoCaffe MochaCaffe Latte

GuavaMangoGrape

Paneer TikkaCheese & TomatoChicken TikkaSmoked Chicken

Black Coffee Granitas RollsEspresso ItalianoEsperanoTMAmericano

Blue CuracaoLime IceMixed Fruit Tango

Kadhai Paneer RollChicken Masala Roll

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Guava CrushDessert Coffees Milk Based Pastas

Latte BiancoCaffe Borgia

Strawberry FreezeMocha FreezeIcepresso

Tangy Tomato PastaCreamy Chicken Pastas

Cold Coffees Iced Tea HOT TEA

BrrristaBrrrista FrappeBrrrista BlastIced Caffe Mocha

LemonPeach

AssamEnglish BreakfastDarjeelingEarl Grey

Coffee Add-ons Other Drinks DessertsVarious FlavoursChocolate FudgeWhipped CreamEspresso ShotIce Cream Scoop

Ginger FizzKinley Water

Walnut BrownieMocha ExcessChocolate ExcessDark TemptationChocolate MousseChocolate Chip MuffinAlmond Raisin MuffinApple Cake

People Mix

The people at Barista are characteristically trained to be Pleasant, Polite and Positive. They ensure you have a quiet, uninterrupted visit and provide an escape from the daily pressures of life. Their uniforms are in sober shades of brown and orange, and contribute to the overall laid-back feeling of the café.

Promotion Mix

According to research, over 65% of Barista’s customers are in the 15- 30 age- group. The majority of these are students and young urban professionals. Barista positions itself as a brand for anyone who loves coffee. Their products, servicesand outlets are more like the traditional European cafés, where people would meet for the love of coffee, and for an intellectual appealing time. They position their outlets as a place “where the world meets”, and they look to appeal to anyone in the 14- 60 age group that loves good coffee and looks for a nice quiet time.

a) Logo, Colors, Images:

Barista, since the beginning has looked to use colors in its café interiors, logos and images; to project a “warm, earth glow, synonymous with coffee”. Barista uses shades of Orange & Brown

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to good effect to promote its “laid- back” atmosphere. The logo is a combination of Brown, Orange and Light Yellow; with the word “Barista” written in an upward curve, and the word “Coffee” underneath. A simple logo that perfectly expresses Barista’s brand image: A traditional café for coffee lovers.

b) Décor and Architecture:

Barista’s internal décor and architecture expresses the simplicity you would normally associate with traditional cafés. The furniture is made of light shades of wood, and there are comfortable sofas in bigger cafés. The walls are shades of orange, with various photographs of the love for coffee spread around each outlet.

c) Literature:

The literature provided by Barista is indicative of its brand image. The menus, posters, pamphlets are all traditionally designed, with a classic and simple look. One aspect of particular note is their magazine, which is privately circulated in the cafés. The magazine encourages customers write, draw, make etc anything creative; and this is then published in the magazine. The magazine not only provides an avenue for advertising, but also an opportunity for Barista to express its brand image Barista currently carries out mass promotion campaigns. This is mainly in the form of promotions in the Press, TV and Radio Medias. At present, they do not rely heavily on advertising, but rely more on sponsorships and strategic alliances with other corporations. Barista also takes part in various sales promotion activities to help increase sales at their outlets.

d) Sponsorships:

Barista sponsors various events and festivals, which provides them valuable promotion directed at strategic markets. The sponsorships are mainly in kind, although major events are sponsored in cash also.

e) Sales Promotion:

Barista uses a special “Barista Coffee Card” for its sales promotion activities. The Barista Coffee Card entitles you to one complimentary hot beverage when you are done sipping seven. It is available to all Barista coffee regulars. No membership fees, no references required. Fill out the card and you are a member. As a Coffee Card holder, you earn one stamp on the card every time you purchase a beverage. Simply present the card to the cashier when you place your order at any of their outlets. Once you have collected seven stamps, you can hand over the card to receive your complimentary hot beverage. Barista hopes this card can help drive sales growth, and increase customer retention

f) Collaborations:

Barista has entered into special collaborations and alliances with various partners for co - marketing brands. For example, Barista entered into a deal with Leo Mattel toys to provide the popular board game Scrabble at every Barista outlet across the country .This is an ideal alliance

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for both the organizations, because it provides Leo Mattel with an important avenue for promoting their product, and it provides Barista’s customers an added attraction for spending more time at Barista outlets .Barista has also entered into partnerships with various movies, for promotions through Barista, and recently, they tied up with Star World for its “Absolutely Everybody” campaign.

Place

This is a prime factor in determining the success of a retail chain. However, Barista Coffee has adopted a top down approach, wherein they first identify the cities and then decide on precise locations within its limits .While selecting a city Barista has devoted substantial management time and effort in zeroing in on the cities where they are now situated. The selection of the cities was based on the following criteria.

Sizeable population of executives, students and families in SEC A & Barista category. High disposable income with people looking for new vistas in leisure and lifestyle

oriented concepts. High level or organized retail activity. Rapid socio- economic development. Level of commercial importance (Industrial cities, state capitals etc.) Number of educational establishments and opportunities available for employment.

On the basis of the above criteria, they had initially targeted cities like Delhi, Mumbai, Bangalore, Chennai and Hyderabad. Chandigarh and Ludhiana were later added due to tie- ups with ‘Planet M’ and ‘Ebony’ to set up store-in- stores at their outlets. They are also pursuing an equally aggressive international business expansion strategy. They have over 50 overseas locations presently under their consideration .They have already done their groundwork in terms of getting brand and name registrations in over 30 of these locations. To facilitate their global expansion, they plan to work with strategic partners, who share the same vision of expanding and promoting the brand worldwide. Currently they have opened new outlets in Sri Lanka and Dubai as a part of their international strategy.

2.5TANGIBILITY SPECTRUM

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3. TYPICAL SERVICE OFFERING

3.1 CUSTOMER’S EXPECTATIONS

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When a customer visits a coffee shop they expect a good experience. They want the service provider to provide them with the best services they have. From the chart given below we can easily make out that the customers gives high preference to the quality of services and they give least preference to the pricing. The major reason behind customer giving least preference to the price is because they want a good experience which is beyond price.

From the above chart one can easily make out that 42% people consider the quality of services offered by the coffe shop before going to it.

The next important factor considered by customer before choosing a coffee shop is the ambience. They want the coffee shop to be a cool hangout place where they can hangout with friends and do some combined studies

RATING TO CAFÉ COFFEE DAY BY THE CUSTOMER ARE SHOWN IN THE CHART BELOW

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From the chart above one can easily make out the following things regarding to Café Coffee Day:-

1. Customers grade Café Coffee Day very good when it comes to ambience.2. Customers grade Café Coffee Day good when it comes to pricing.3. Customers grade Café Coffee Day very good when it comes to service offered.4. Customers grade Café Coffee Day very good when it comes to quality of product.5. Customers grade Café Coffee Day very good when it comes to Location.

Which simply proves that Café Coffee Day is one of the best hangout place for the youth who consider the factors mentioned above while selecting a Coffee Shop.

3.2 BUNDLE OF BENEFITS

Following are the benefits that a customer can get from Café Coffee Day:

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1. Benefits through pricing of products

Considering that Cafe Coffee Day is trying to target a market whose age range is between

15 and 60 years, a pricing policy appealing to this segment is difficult. The pricing is

extremely low and 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. But

since Cafe Coffee Day’s current consumer profile is quite young, their prices are mostly

inexpensive, and at par with their competitors.

2. Benefits through different product line

They are Coffee Day's most unique aspect is that it grows the coffee it serves in its cafes.

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. The coffee beans are supplied to all the cafés from Chikmagalur. The

eatables at Café Coffee Day are catered by different vendors: example: ice creams are

catered by Cream Bell, Milk by Amul and samosa’s by Patsiers Gallery. Café Coffee Day

also sells merchandise through its stores. 5 per cent of the revenue comes from sale of

merchandise. Café Coffee Day 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, biryani, 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

favor it. In winter it is cappuccino. Their merchandising includes funky stuff like t-shirts,

caps etc.

Coffee and Tea Refreshing Alternatives Eatables

Hot Coffee Granitas Melting Moments

Espresso Blood Orange Banana n’ Walnut Cake

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Espresso Americano

Macchiato

Cappuchino

Café Latte

Chococinno

Café Mocha

Irish Coffee

Cool Blue

Pineapple Crush

Emerald Ice

Ruby Surprise

Banana Chocolate Mousse

Banana Caramel pie

Chocolate Doughnut

Cookies

Marble Cake

Pineapple Getaux

Chocolate Cake

International Coffee Smoothies Ice Creams

Colombian Juan Valdez

Ethiopian Qahwah

Kenyan Safari

Mango Colada

Strawberry Colada

Vanilla

Chocolate

Seasons Best

Cold Coffee Cremosas Quick Bites

Sweet Mint

Cold Sparkle

Brandied Banana

Tropical Iceberg

Iced Eskimo

Litchi

Ginger Spice

Pina Colada

Samosa

Puff

Pizza

Croissant

French Fries

Kathi Roll

Wraps

Biryani

Sandwiches

Kulcha

Burger

Pasta

Masala Sandwich

Coffee Add-Ons Cool Refreshers

Honey

Flavoured Syrups

Red Eye

Whipped Cream

Scoop pf Ice cream

Fruit Juices

Mineral Water

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Chocolate Sauce

Teas

Assam Tea

Masala Chai

Lemon ‘n Ice Tea

Kashmiri Qahwah

Apple n Cranberry ice tea

3. Benefits through Location

Cafe Coffee Day 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 Cafe Coffee Day outlets in and around Malls,

Cinemas, Colleges, and Offices etc. This endorses their brand image of a café that

appeals to coffee lovers of all ages.

4. Benefits through People

The people at Cafe Coffee Day are characteristically trained to be Pleasant, Polite and

Positive.

3.3 TYPICAL SERVICE PERFORMANCE OF FIRMS

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From the above chart one can easily make out that the major competitor to Café Coffee Day is Barista. Café Coffee Day is facing huge competition from Barista as both of the service providers are targeting the youth segement.

3.4 SERVICES QUALITY DIMENSIONS

Reliability

It is the ability to perform the promised service dependably and accurately. Each and every

coffee shop (local one or International brand) promises best taste in terms of Coffee. These

promises should me met accordingly in each and every aspect like quality & quantity.

Assurance

Assurance positioning would have to be backed up by evidence of the knowledge and

thoughtfulness of administrators, faculty and staff and their ability to inspire trust and

confidence.

It includes the knowledge and courtesy of employees and their ability to convey trust and

confidence. The employees at Café Coffee Day are well trained to tackle problems without

causing harm to customers.

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Tangibility

It talks about the furniture, menus, the interiors etc i.e. Physical facilities, equipment &

appearance of personnel.

Empathy

Caring, individualized attention the firm provides to their customers. The mission of Café

Coffee Day is “To be the best Cafe chain by offering a world class coffee experience

at affordable prices”. This statement proves that they want to serve the target market i.e. the

youth with full services that they want at an affordable price.

Responsiveness

Willingness to help customers and provide prompt service. Employees in Café Coffee Day

are not quick to respond to the queries of their customer since the working staff is less in

number. But still they somehow manage to respond to customers as per their demand.

3.5 CUSTOMER‘S INVOLVEMENT IN THE SERVICE DELIVERY

In Café Coffee Day service Customer involvement in the service delivery does not exist as everything is done by the staff. From taking the order till delivery of the order, whole process is taken care by the staff.

4. SERVICE BLUEPRINT

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4.1 SERVICE ENCOUNTERS / MOMENTS OF TRUTH

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When the customer first enters the restaurant he can find AD posters on the front glass of

the Cafe Coffee Day.

After entering into Cafe Coffee Day, customer is guided by an employee, where he is

provided with a menu card for the order. Here customer can feel the ambience and the

décor of the restaurant. After giving an order to the employee, employee passes the order

to the front section of the kitchen. The employees in the front section would pass the

order to back-end kitchen where the order is prepaid. Parallely, employee would update

the billing machine. The prepaid order is then served to the customer.

After availing the services and the products of Cafe Coffee Day, customer would ask for

Bill. Employee would then give the updated bill to the customer.

Customer will pay the bill either through cash or through credit/debit card. After payment

is done the database of Cafe Coffee Day gets updated.

After payment of the bill the customer leaves the restaurant.

4.2 VALUE OF BLUEPRINTING

Following are the uses or advantages of having a blueprint for a service:

Providing a Platform for Innovation

First and foremost, service blueprinting provides a common platform for everyone – customers,

employees, and managers – to participate in the service innovation process. Blueprinting

provides a common point of discussion for new service development or service improvement (a

picture is worth a thousand words). The service blueprint gives employees an overview of the

entire service process so they can gain insight as to how their roles fit into the integrated whole.

This reinforces the notion that the total service is greater than the sum of its parts. This benefit of

a clearer organizational vision is realized by virtually every firm that utilizes blueprinting.

Recognizing Roles and Interdependencies

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The process of blueprinting and the document itself generate insights into various role and

relational interdependencies throughout the entire organization. The customer’s actions and

interactions are highlighted, revealing points at which he or she experiences quality. The

blueprint reveals all of the touch-points that are critical in meeting customer needs and helps in

identifying likely points of service failure.

Utilizing the visual language of service blueprints puts everyone involved in the service design

process on the same page, creating more communication efficiency and informational precision

during the typically “fuzzy front end” of the service development process.

Facilitating Both Strategic and Tactical Innovations

Service blueprints can be modified to suit any level of analysis desired. The methodology has

been used to improve macro- and micro-level processes, facilitate strategic and tactical decision-

making, as well as design complex and simple services with high and low levels of divergence.

Managers at all levels respond favorably to service blueprinting when they are introduced to it in

workshops and seminars.

Transferring and Storing Innovation Knowledge

Service blueprints can be printed out or be stored electronically and made available to everyone

involved. Blueprints being developed can be posted on a collaborative website, providing all

participating parties with access to an editable form of the document. Suggestions and edits can

be posted, which can then be further discussed, blogged about, incorporated or nixed. In fact, a

great deal of the entire blueprinting process can be done remotely, or virtually.

Designing the Moments of Truth

Blueprinting promotes a conscious decision on what consumers see and which employees should

be in contact at each moment of truth.

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In many services it is relatively easy to decide which elements of the service should be provided

in view of the customer and which elements should be performed behind the scenes, or

backstage. For instance, at a hotel, housekeeping may provide turn down service in the presence

of a customer, but the laundry is clearly a housekeeping activity best performed backstage.

Clarifying Competitive Positioning

Service blueprinting allows firms to clarify competitive positioning by facilitating the

comparison of the desired service and actual service, or company and competitor processes.

Mapping dual processes for the identification of key service quality gaps is a highly useful

application of blueprinting. This is not surprising, given firms’ continuous efforts to position

their service offerings correctly in the highly competitive global marketplace.

Understanding the Ideal Service Experience

We also perceive service blueprinting as being applicable within the realm of market research in

understanding and designing ideal service experiences. For instance, brands undergoing

repositioning often seek information regarding customer perceptions of what an “ideal” brand

within a given product or service category would look like. Customers are asked to identify

where such a brand would be positioned along key attributes or dimensions. For services, it is

often useful to have customers identify the ideal service process for a given service category.

Service blueprinting can help market researchers overcome the limitations inherent in asking

customers to describe such a service by using words alone. The service blueprint can provide a

means for service brand managers and service designers to view and compare the customer’s

ideal service, the firm’s actual existing service, and any number of competitors’ service

offerings.

4.3 LEARNING FORM THIS EXERCISE

This exercise has helped me to understand the whole process about how the work is carried in a coffee service provider. I was able to understand the importance of service blueprint. Because of this exercise I was able to understand the concept of service blueprint in detail.

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5. PHYSICAL EVIDENCE

1. Décor & Architecture

Café Coffee Day had gone in for image change and revamping of interiors in the last quarter of

2001. Café interiors have been given a whole, new look. In a change from the largely wood and

granite based interiors, there is more of steel and lots more colour now. The young colours of

today, lime green, yellow, orange, and purple predominate. These colours are unified and used in

all the outlets and stores of Café Coffee Day.

2. Literature

The literature provided by Café Coffee Day is indicative of its youthful image. The menus,

posters, pamphlets are all designed to attract young and young at heart. They also have their

magazine called as ‘Café Beat’, which is published monthly at their Bangalore head office and

distributed throughout the branches.

3. Dress Code

The dress code is black dress with the logo of Café Coffee Day on one side. This is also is one of

the evidences.

5.1 ROLES OF SERVICESCAPE PLAY IN THIS INDUSTRY

“The environment in which the service is assembled and in which the seller and customer interact, combined with tangible commodities that facilitate performance or communication of the service”- Servicescape

By Booms and Bitner

A servicescape is not a passive setting & it plays an important role in service transactions. An evaluation of the roles they have in service encounters will reveal how important it is to design an appropriate servicescape.

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Below diagram shows the importance of Servicescape / Physical Evidence in terms of coffee retailing industry:

From the chart given above one can easily make out the the following anayses:-

When it comes to giving highest priority, majority of the people would look for Quality, ambience and physical evidence. Where as the other factors do not affect much.

Therefore it clearly proves that better services backed up by good servicescape is one of the most important aspect in terms of attracting customers, when it comes to Coffee Retail Industry or any fast food retailing business.

5.2 ASPECTS OF SERVICESCAPE INFLUENCING THE SERVICE DELIVERY PROCESS

From customer Point of view:-

A. Exterior and Interior Design

B. Ambience

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C. Food(quality, quantity & variety )

From the service providers point of view:-

1. Logo, Colors, Images

Café Coffee Day has used bright red and green colors in its logo. RED stands for leadership and

vitality. It also stands for passion (… for coffee). The WHITE SWIRL signifies purity of

purpose, invigorating properties of growing coffee. The GREEN stroke harks back to their coffee

growing heritage and the coffee plantations that they own. It signifies 125 years of coffee

growing heritage of this vertically integrated group. Café is noticeably larger than the rest of the

text inside the logo box. This denotes that Café Coffee Day pioneered the café concept in India

way back in 1996. Café Coffee Day would like to own the word “café” in the minds of its

customers.

When one thinks of a café it’s got to be Café Coffee Day. The font used for “Café” is called

SLURRY. The font looks as though the letters have congealed out of a liquid. It gives the

impression that the word is still forming itself and evolving into something new and something

better constantly. This is the characteristic of Café Coffee Day’s customers and this is the

characteristic that the brand too wants to adopt. The upward SWIRL inside the logo box stands

for the invigorating and uplifting nature of coffee and the ambience at Café Coffee Day.

2. Décor & Architecture

Café Coffee Day had gone in for image change and revamping of interiors in the last quarter of

2001. Café interiors have been given a whole, new look. In a change from the largely wood and

granite based interiors, there is more of steel and lots more colour now. The young colours of

today, lime green, yellow, orange, and purple predominate. These colours are unified and used in

all the outlets and stores of Café Coffee Day.

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6. Wild Card

6.1 Pricing

Considering that Café Coffee Day 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.20 to Rs.200. From the time it first started its operations, there has been only

minor changes in the pricing policy of Café Coffee Day. The changes have been more due to the

government taxes than any thing else.

From the pie diagram above one can easily make out the consumer is ready to spend Rs . 100 –

200. So from this one can make out that Café Coffee Day need to keep the prices low inorder to

cater the current segement.

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6.2 Promotion

Café Coffee Day does not believe in mass media promotions. But they are involved in all

the areas of serious consumer passion.

Through television

Café Coffee Day 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 and a lot of youth like watching

the programme. That is why they had a contest running where customers could win Friends'

merchandise. The linkage was that it is a youth based programme and it had a coffee house.

They have tied up with Channel [V]'s Get Gorgeous contest. The reason being that a lot of their

young consumers are interested in careers. Modeling is a career that a lot of youngsters are

interested in and this was an excellent platform. They have also done promotion for History

Channel, where they have run promotion for Hollywood Heroes. They had asked a few question

and a lucky winner won a trip to Hollywood.

• Ticket sales

Café Coffee Day is involved in ticket sales in quite a few events, Enrique being one of them.

They were involved in WWE, Elton John, and Bryan Adams ticket sales. These acts are very

much appreciated by their consumers. It helps both the organizers as well as Café Coffee Day.

Organizers need to tell people where the tickets are available and single Café Coffee Day logo

says it all. From Café Coffee Day’s point of view, they always ask for a certain amount of tickets

around which they have a contest. Couples can win ticket for free. This in turn raises the

awareness level as cafe staff approaches the consumers to inform them about the contest. There

is not a better publicity mechanism then the person who is serving you telling you about the

same.

• Association with movies

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Café coffee day has been associated with a pool of movies to broadcast it self .Its main intention

is to increase the visibility rate within the crowd who are a part of the audiences. They have been

a part of movies like:

Bas Yun Hi

Khakee

Main Hoon Na

Kyun Ho Gaya Na

Mujhse Shaadi Karoge

Lucky

Socha Na Tha

And a lot of Telegu & Tamil movies

• Sales Promotion

Café coffee day has been a very promising initiator than compared to its competitors for sales

promotion like:

Giving away Gifts during occasions e.g. valentine day

Offering Coupons

Café Citizen card which allows regular members to avail discounts upto 20% and become

a member after a purchase amount of upto 2000 Rs.

Sugar free campaign which was mainly done to spread awareness of staying healthy and

fit by using the sugar free sachets

Discounts during festive times to members

6.3 Place

Café Coffee Day looks to cater to their target market with strategically located outlets. Their

outlets are generally located in High Street/ Family Entertainment Centers. Considering their

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generic appeal, there are Barista outlets located in and around Malls, Cinemas, Colleges, Offices,

etc. This endorses their brand image of a café that appeals to coffee lovers of all ages.

6.4 People

People at Café 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.

6.5 Process

The order process at Café Coffee Day is based on services, where the customer can read the

menu and order. Whereas they have a flexible delivery process, where the customer can go

directly and take what they have ordered for or the order is delivered on his table.

6.6 Positioning

Research shows that 37% of the customers are between 20 and 24years. 27% of the customers

are between the age group of 25-29 years. 60% of the customers who visit the café are male and

40% are female. 52% of customers who visit the cafes are students.18% of the customers’ visit

the cafes daily while another 44% visit weekly. Each café, depending upon its size attracts

between 500 and 800 customers daily, mainly between 4pm and 7 pm. Customers describe Café

Coffee Day as the place they frequent most after “home and workplace/college”. It is a place

where they meet friends and colleagues, in groups of 3 or more. The prices here are perceived to

be reasonable and it is a place where customers come to rejuvenate themselves and be

themselves rather than a place to be “seen at” vis a vis other cafes.

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6.7 DISTRIBUTION PROCESS

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7. INDUSTRY SECTION

FUTURE PLANS:-

1. Serving to the Air Deccan Consumers in air.

2. Planning to open cafes in Middle East, Eastern Europe, Egypt and South East Asia in

coming month.

3. In June, 2010 Cafe Coffee Day chain acquired Emporio for Rs 15 crore. Emporio is a

Czech Republic-based café chain present at 11 locations. CCD plans to co-brand the

chain as Café 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.

4. Cafe Coffee Day has around 821 outlets in 115 cities in India. CCD plans to take the total

number of cafes to 1,000 by March 2010 and double it 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.

7.1 SWOT ANALYSIS

Strengths

Products of extremely good quality and taste.

Its a youth oriented brand , hence huge potential since 40 % population is below 20

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

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USP of brand is its considered a highly affordable brand.

India's largest retail chain of cafes.

ISO 9002 certified company.

Weakness

Weak brand image and lacks strength to maintain brand loyalty.

Poor ambience and decor. Café Coffee Day outlet served prime space for advertising and

promotions.

Many of the Café Coffee Day stores are incurring loses due to wrong site selection.

Opportunities

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

More people like to visit Café Coffee Day for informal meetings.

Café Coffee Day 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.

International Brands like Gloria Jeans, Coffee Bean & Tea Leaf and Illy Café.

Other hukka parlours are also gaining lot of attention and preferred by young generation to hang

around which in turn is attracting the market captivated by Café Coffee Day.

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7.2 PORTER’S FIVE FORCES MODEL

Threat of new entrants

Threat of new entrants is high. As more and more international brands are looking towards India

as the new target Market. E.g.:-

Gloria Jeans

Star Bucks

Illy Café

Coffee Bean

Bargaining power of customers

Bargaining power of customers is high as more and more Cafes are coming. So Café Coffee Day

needs to keep the prices as per customers. The price should satisfy the customer and attract them.

Below mentioned are three factors to be considered:-

Price comparison

Variety of products

Service provided

Bargaining power of Suppliers

Bargaining power of suppliers is very low as Café Coffee Day manufactures its own coffee bean.

More over the food items they buy from local suppliers are easily available and they can easily

43 | P a g e


change the suppliers as and when they want. Below are few factors mentioned regarding the

bargaining power of suppliers:-

Food items obtained from local suppliers

Follows backward integration

Coffee beans from its base in Bangalore

Threat of substitutes

Threat from substitutes is very high. As there are Hukka Parlours, Other fruit juice joints are

becoming the new junction for youth. E.g.:-

Ice tea offered by Costa coffee

Coffee offered by other competitors

Cold drinks served in stadium

Competition within industry

Competition within the industry is very high. As there are number of old players like Barista,

Café Mocha, and Minerva are well established players in the market. Barista is also targeting the

same market segment i.e.; youth.

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8. CONCLUSION AND RECOMMENDATIONS

From the project we can conclude the following:-

That Café Coffee day is planning to go international.

The other major things regarding service marketing is that customers give top priority to

the quality of the services / products and ambience.

The major competitor of Café Coffee Day is undoubtedly Barista as both of the service

providers cater to same market segment India as they find India new target market.

Recommendations:-

1. To improve the interiors and décor.

2. To have more and more tie-ups.

3. Only 50 % or less than 50 % people find Café Coffee Day quality of service, ambience,

pricing and location to be very good which proves that still Café Coffee Day need to do lot of

homework in order to satisfy its customers.

4. It should introduce a feedback form system in order to know about the customers satisfaction

level.

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9. BIBLIOGRAPHY

Sites Referred:-

shttp://www.casestudyinc.com/coffee-day-brand-strategy-india

http://www.pr-inside.com/india-food-and-drink-report-q-r2164244.htm

http://en.wikipedia.org/wiki/Marketing

http://www.cafecoffeeday.com/

http://www.barista.co.in/users/index.aspx

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Cafe Coffee Day

Business

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threats of caf coffee

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caf mocha

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