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AMITY LONDON BUSINESS SCHOOL

UK RESEARCH REPORT

ONSTARBUCKS IN UK

AND

CAF COFFEE DAY INDIA

BY-

ANKIT MEHRA

MBA 3C

A1808711002


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Table of Content

Sl.no Content Page no.

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5.1

5.2

5.3

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6.1 6.2

6.3

6.4

6.5

6.6

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8.

910 .

Literature review

Objective and Research Methodology

Introduction

Cultural Context and issues India and UK

Detailed Analysis Caf Coffee Day INDIASTP

SWOT Analysis

Porters five forces

5Ps

PESTEL Analysis

Market share and competitor analysis

Detailed analysis Starbucks UK

STPSWOT Analysis

Porters five forces

5Ps

PESTEL Analysis

Market share and competitor analysis

Comparison and Contrast INDIA VS UK

Recommendations for INDIA

Recommendations for UKBibliography

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5

8

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LITERATURE REVIEW

Starbucks is a high-margin brand that serves about 4 million customers per

week (Forbes). Furthermore, the company also currently owns Seattles Best

Coffee and Torrefazione Italia coffee brands. The company is ranking in at

#338 in FORTUNE 500, and its on 240 in FT Global 500.

One of the reasons that Starbucks employees are often so pleasant and

helpful is that Starbucks is a great company to work for, says Starbucks

partner Joy Wilson in The Starbucks Experience. It takes care of employees

with respect. This mind-set trickles down from the executives to the

thousands of baristas worldwide.

The Starbucks name is synonymous with coffee. Each week around forty

million customers visits Starbucks and 18 times per month is the rate ofmost loyal customers who visits their Starbucks. If we talk about employee

turnover rate, its 250 percent lower than the industry level, which is not an

accident.

Caf coffee day.Cafe coffee day is the first caf who pioneered the caf

culture in India by opening its first caf at Brigade road, Bangalore

A smart, simple space that they could call their own for a while. Over cups ofcoffee people can discuss, hold short meetings listen to conversations, or

even have a lot of good fun .It is still the largest organized retail caf chain

in India with cafs across the country. Coffee Day today is totally in tune

with its target audience with the rapport thats very strong just as the deep

red coffee day color.


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Today Caf Coffee Day is at the forefront of the Coffee revolution co-riding

with coffee growers, corporations, suppliers, and planters.

OBJECTIVES AND RESEARCHMETHODOLOGY

Objectives

Products and segmentation of both the markets.. Marketing strategies of both the companies. Detailed analysis of Starbucks in UK and Caf Coffee Day in India.

Methodology

Here project analysis will be made by collecting secondary data fromdifferent websites, journals, etc.

Secondary datas- published and research datas collected fromdifferent websites, journals, newspapers, company research papers.


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Introduction

Starbucks Coffee UK

Starbucks is not just related to a great cup of fresh coffee, but also a betterquality product with excellent customer service and better understanding ofcoffee culture. It has achieved unpredictable achievements in coffee chainindustry.

In United Kingdom Starbucks have around 793 stores.

For making excellent coffee it purchases and roasts the high quality coffeeand sell them with fresh, rich-brewed espresso beverages, different varietiesof coffee related accessories and equipments.

More than quality coffee, Starbucks features a variety of hand-craftedbeverages, a selection of salads and sandwiches.Starbucks merchandise includes exclusive coffee brewers, espressomachines and other items related to coffee and tea.

The total numbers of Starbucks stores are 15,011. Starbucks have theirstores in 44 countries outside of the United States and 1,049 stores are


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company owned operated in Australia, China, Canada, Singapore Germany,U.K. and Thailand

Caf Coffee Day

It is a division of, Amalgamated Bean Coffee Trading Company Ltd. ABCTCLwhich is largest coffee conglomerate in India. Coffee In its own estates of10,000 acres ABCTCL grows coffee. US$250300 million is the land value ofthe plantations. It is the largest producer of Arabica beans in Asia.ABCTCL is one of Indias leading coffee exporters with its clients across USA,Europe, USA and Japan.

First caf of Caf Coffee Day was opened at Brigade Road, and its still one ofthe most happening places in Bangalore.

The First Caf Coffee Day logo was of a bright red cube with a green strokeabove e in Caf Coffee Day.The word Caf was made to focus Caf Coffee Days introduction of Caf

culture in India.SLURRY was the font used for Caf the font looks as though the lettershave congealed or coagulated out of liquid.The currently used logo includes a dialogue box which highlights theconnection between 'conversations' and coffee. "A lot can happen overcoffee is the tagline.


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The business of Caf Coffee Day has grown spectacularly 1,408 storesacross the country, it is the largest chain of coffee stores.They clearly had the most recognizable of all coffee brands and youngpeople People who comes under the bracket of Middle income Group regularly visited their stores.


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Cultural context and Issues India and UK

Caf Coffee day in India is more focused at Value for Money which catersits target market.The low per capita consumption and increasing income levels are the factorsfor the growth of coffee Industry in India.

In UK, people have high standard of living and to maintain that they cannotafford to compromise on anything, whether its quality of Coffee, ambience ofthe place or leisure.

Starbucks is mainly adult-focused. Urban areas are its target market, wherepeople are willing to go the extra mile to purchase costly gourmet coffee.

Unlike in Indias Caf Coffee Day, Starbucks have a strategy of opening anew store in a area where a store already exists, it applies this strategy toavoid long line ups and crowdie atmosphere.

In India people like spicy and tangy food (snacks) so the cafs (caf coffeeday) offers people samosas, tangy wraps and rolls.Here in UK people usually do not prefer spicy and tangy food so to cater theneed of the people in UK, cafes here (starbucks) offers non spicy Perfect

Porridge, Pastrami & Emmental Sandwich and other sandwiches includingham tuna etc. ,croissants and much more.


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Detailed Analysis

CAF COFFEE DAY

STP

Segment Nice place for coffee and

snacksA good hangout place

Target Group Youth in the lower and middleclass people

Positioning Youths favorite coffee shop

SWOT Analysis

Strengths Excellent brand visibility and brand name

Large number of young crowd as target group

Good service

Around 1000 outlets across India and 300,000 visitors per day

Its the producer of its own coffee thus reducing the cost.

Weakness

High competition in this sector

Opportunity

Introduction of cheaper versions of coffee

Tapping the smaller towns/cities


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Merchandising

They can tie up with other companies for promotion

Threats

Entry of foreign players in the Indian market

Dependent on Government commodity rates

Large unorganized market.

Porter's Five Forces Analysis

Threat of new entrants Costa Coffee

Barista

Bargaining power of customers: Comparison in price with competitors

Variety of products offered Service provided

Bargaining power of Suppliers: local suppliers are contact for supply of food items

Believes in backward integration

Its own coffee plantation base in Bangalore

Threat of substitutes:- Costa coffees ice tea.

Coffee offered by its competitors.

Cold drinks served in stadium.

Competition within industry :- Barista who targets same youth


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Coke and Pepsi

5 Ps of Caf Coffee Day

Price: Caf Coffee Day segments lower and middle class people so the price

for a cup of coffee ranges from Rs.17 to Rs.99.

Product:

Let it be food or coffee, products here are according to Indian taste.

Most of the eatables are made according to Indian taste buds like

samosa, masala sandwich, tikka sandwich etc.

The best selling item in summer is frappe, which is coffee with a blend

of coffee.

In winter it is cappuccino.

Coffees and teas Refreshing alternatives Eatables

Coffee Granitas Melting moments

Espresso

Espresso AmericanoMacchiato

Cappuccino

Caf Latte

ChococinnoCaf Mocha

Irish Coffee

Blood Orange

Cool BluePineapple Crush

Emerald Ice

Ruby Surprise

Banana n Walnut Cake

Banana Chocolate MousseBanana Caramel pie

Chocolate Doughnut

Cookies

Marble CakePineapple Getaux

Chocolate Cake

International coffees Smoothies Ice creams

Colombian Juan ValdezEthiopian Qahwah

Kenyan Safari

Mango ColadaStrawberry Colada

VanillaChocolate

Seasons Best

Cold Coffee Quick Bites


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Sweet Mint

Cold SparkleBrandied Banana

Tropical Iceberg

Iced Eskimo

Samosa

PuffPizza

Croissant

French Fries

Kathi RollWraps

Masala Sandwich

Promotion:CCD is involved in -

Television: CCD held a contest around a very popular programme on Zee

English called Friends.

Get Gorgeous contest which comes on Channel [V] advertises caf coffeeday.

Movies Assosiation: CCD can be seen in movies like Khakhee and Mai Hoon

Na

Sales Promotion: CCD uses special Cafe Citizen Card for rewarding Cafe

Coffee Days customers. By this program new customers are gained and

existing ones are retained.


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Based out of South India where there is high political stability andgreater respect for the customer

Less of red tapism Easy sourcing of coffee beans Rules and regulations according to Indian market

Economic

Heavy coffee drinkers in South India Cheaper sourcing maintain Quality

Social

Since it targets the middle class and is affordable so it acts as a goodmeeting place.

Technological

They provide entertainment over Bluetooth and marketing strategyalso based around technology.

Associations with different e-comers portals

Environmental

Effective water conservation. Limited production Use biodegradable plastics

Legal

Since its ethical and based on customer delight so there are fairly lessnumber of consumer complaints and quick customer service.

Caf Coffee Day

Human Resource Management;


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With the boost in the number of their retail outlets, C.C.D concentratesmainly on the quality and quantity of their human resource so as tomeet up with the set standards.

They have a clear intension of keeping well trained employees who canprovide constant service at every store.

People are hired for what they know but fired for how they behave.People of CCD believes this.

. More emphasis is given on personal skills and motivation

Caf coffee Day

COMPETITIVE ANALYSISIn India, caf coffee day suffers a lot of competition; it results in carryingout new marketing strategies and different ways to fight competition. Thefollowing are the current figures showing the market share of companies inIndia.


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30%Caf Coffee Day26%Barist23%Costa coffee12% Mocha

9%Others

EXPENSIVE

COSTA COFFEE

MOCHA BARISTA

LOW HIGH

QUALITY QUALITY

CAF COFFEE DAY

OTHERES

INEXPENSIVE

Detailed analysis

Starbucks Coffee UK


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STPS

Segment People can sit back and relaxA great cup of coffee withgood atmosphere andfacilities.

Target Group Middle and Higher incomegroup

Positioning A highly reputed brandName says it all

SWOT Analysis

Strength:

Strong brand name and image associated with high quality. Healthy financial performance People admire the atmosphere of Starbucks High-skilled management team High technology High quality products with new innovations.

Weakness: Products with high price Clusters of stores with aggressive expansion

Opportunities: Large consumer group Launching new products extension Lifestyle Selling more whole coffee beans and equipments


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Threats:

Competitors Lack of ownership of coffee farms Global crisis Intellectual-property violation

Porter's Five Forces Analysis

The threat of entry:

Nothing can make much of a problem for Starbucks as they have avery large share of the London market that will be relatively immuneto the threat of new entrants.

It would not be easier for the new entrants to offer great quality ofcoffee at a competitive price

The power of buyers:

Starbucks has low switching costs between the suppliers. Starbucks is associated with a great quality of coffee for elite and loyal

customers.

The power of suppliers:

Starbucks being the most famous specialty coffee shop chain in UKand still expanding need for Suppliers increases.

It would not be unwise to say that Suppliers need Starbucks.

The threat of substitutes: Just as a bald head reduces the need for hair gel. Starbucks example would be, if an alternative to coffee is offered to a

customer, he would rather switch from coffee to tea. This is the powerof Brand


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Competitive rivalry: Starbucks is free from any competitive rivals that are of similar size to

them as a result there are no rivals in the market that would beconsidered in balance with them.

5PS

Price:

Starbucks prices matches with its competitors but, it assures quality.

Starbucks is an attractive combination of features, high quality,excellent service and other attractive attributes.

Product:

Starbucks is known for care in selection of high quality coffee beansand expertise in roast.

It takes care of strict economical, environmental, and qualitystandards of its coffee beans.

Starbucks differentiates its coffee and related products dependingupon its innovation and competence.

Coffees and teas ReferishingAlternatives

Eatables

Coffee Cool lime with real lime Muffins and donutsVanilla spice Latte Berry Hibiscus Skinny ginger muffinCafe Americano Chocolate Beverages All butter croissant

Flat white Classic Hot chocolate Cinnamon swirlCaf Latte Vanilla spice hotchocolate

Skinny blueberry muffin

Caf Mocha Starbucks signature hotchocolate

Triple Belgian Muffin

Cappuccino SandwichesCaramel Macchiato Gluten free tuna Nicoise

roll


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Espresso Free York egg mayoEspresso con panna Roasted chicken egg

mayoIced Caf Americano Bistro boxesFlavoured Latte chicken with red pesto

pastaIced Caramel Macchiato Tune with mint peaSkinny Flavoured LattePlace:

Starbucks site its stores at that place where the access of itssegmented customers are more.eg Oxford Street, Chelsea.

In order to relieve long customer lines and improve service, Starbucksgenerally opens a new store near the existing one.

The Starbucks strategy for expansion is by entering new marketswhere the opportunity exists, in UK itself there are more than 750

stores.

Sale promotion

Starbucks loyalty scheme is simple Pre-paid the card with 5and for free shots syrups and whipped cream.If you then buy enough coffee you will earn 15 stars, which will helpyou get a voucher for a free coffee home delivery.

People: It provides dental, vision and medical coverage to all employees, even

including part-timers. . The purpose is to instill in its partners a sense of purpose, loyalty,

enthusiasm and commitment.


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Physical Evidence:

Logo, Colors, Images: In a lot of ways, shes a muse always inspiring and pursuing us

ahead.

She is a storyteller who is carrying Starbucks, and remembering thepast.

Any other people who look at her, it means something different toeveryone.

PESTEL Analysis

Political

Rules and regulations according to the UK industry. The level of Political stability within UK. Greater public accountability

Economic

Customers buying power Local currency exchange rates Economic environment of the locations where Starbucks operates Level of taxation


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Social Consumer spend more and more money on Coffee Customers also visit to sit down and relax

Technological

Coffee machines are also available for home usage which are betterand cheap

Environmental

Rules and regulations for the Local Environmental countries producing coffee beans faces problems in the country

(natural disaster)

Environmental issues in a global level and Global warming

Legal

policies and regulations about caffeine production and consumption byhealth authorities

Trade regulations and introduction of tougher customs Industries licensing regulations

The Value System

Human Resource Management;

All employees are equal for Starbucks. Bonuses like health care coverage, free coffees are given to its

employes. Employees of Starbucks undergoes a 24 hour training period before

dealing with customers.


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Competitor Analysis of Starbucks

The following are the share of companies in the coffee industry in UK.35% Starbucks

20% Local Coffee Outlets14% Internet Cyber Cafes13% Caffe Nero10% Costa Coffee8% Coffee Republic.

EXPENSIVE

STARBUCKS

COSTA COFFEELOW HIGH QUALITY

QUALITYCAF NERO

COFFEE REPUBLIC

INDEPENDENT COFFEE SHOPS

INEXPENSIVE

Comparison and Contrast INDIA VS UK

1. Brand Image


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Caf coffee Day in India has a good brand image in its target market, who ismiddle class and strong youth orientation. The mentality of this targetmarket is value for money and thus there is a good brand Image in theireyes, unlike the upper middle class and the elite who does not have apositive brand image about the company. Caf coffee days brand loyalty is

weak and not up to the mark. The brand doesnt project a clear image tocustomers about what Caf Coffee Day is all about

Starbucks UK has a very good brand image in the market as it caters to thepublic who can sit with a great cup of coffee with great ambience withleisure.

2.Value for money Proposition

Caf coffee day leads the table in this proposition as there prices starts from

RS 17 which is not even a pound (0.20 pence).The mentality of large part ofIndia is getting the value for the money .Starbucks do not compromise on the quality of coffee in relation to its priceand this is the reason for Starbucks success.

3. Ambience and Dcor

In Starbucks, this is what the customers likes the most. They just sit with acup of great quality coffee with leisure with a soothing environment and justrelax.

Caf Coffee Days outlets are very loud and youth oriented with the use ofbright shades of Red and yellow.

4. Highly rated taste and Quality of product.

Starbucks has the highly rated taste and quality of product and the best partis that it has same prices with its competitors such as Caf Nero CostaCoffee etc. Thus it comparatively represents a combination of features, high

quality and excellent service

Caf Coffee Day has an average rating for the quality but as far as taste isconcerned it is that they have not performed up to the expectations ofgeneral public.

5. Inefficient human resources:


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Caf Coffee Days staff has only an average rating for their behavior andservice. Motivation and personal skills are laid emphases upon. Althoughthey are high on Corporate Social Responsibility by employing handicappedpeople

Starbucks manages its staff very well and thats the reason that theemployment turnover is very less in the company. It provides Medical,dental, and vision coverage to its employees even part timers to bring in thecommitment, enthusiasm and loyalty, what it benefits out of this is reducedrecruiting and training costs.

6. Advertisements

The things which we can see in the CCD stores are lots of advertisements

and promotions all over just seems like it has been hijacked by just theadvertising, just the opposite of Starbucks UK.

Starbucks do not advertise, infect it only picks one or two charity or events

that reaches the community it serves.


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Recommendations for India

The Coffee Coffee Day made extremely well for the moment to projectitself like accessible youth directed brand. But there are alwayscertain areas where the brand must be much stronger.

My strong recommendation for the Caf Coffee Day is that, they mustrehabilitate the decoration, where that uselesspublicity/advertisements occurs.

Caf Coffee Day would do better if it uses clever collaborations, andnot just printed posters and advertisements all around.

Recommendations for Starbucks for UK

Starbucks in UK is at such a position that it can sustain the downfall oftaking the risk. While the customers are waiting for the order, aninteresting non elevator type of music can be played, to give a moresoothing effect.

Between the order taking counter and the delivery desk or somewherean LED television can be put up to advertise products with lessdemand.

Exclusively new range of products can be offered in the market, t hecompany must not stop innovating and taking risks. Starbucks shouldinnovate such items that can be had with any drink, any time in a daythat will not only make current customers happy but draw in newmore customers as well.


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BIBLIOGRAPHY

http://starbucks.co.uk/

http://www.studymode.com/subjects/starbucks-4-p's-of-marketing-page1.html

http://www.managementparadise.com/forums/principles-management-p-o-m/208074-swot-analysis-starbucks-corporation.html

Book Setting up and managing your own coffee bar by JohnRichardson

http://www.marketing91.com/swot-cafe-coffee-day/

http://www.marketing91.com/marketing-mix-cafe-coffee-day/

http://www.cafecoffeeday.com

Weekly Magzine The World February 14 2013

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