Barista Vs CCD

Comparative Analysis-Café Coffee Day and Barista
1) Executive Summary
Indian consumer is a very interesting entity. The consumer

in India is as heterogeneous as the country itself is. The
urban consumer contrasts with the rural and the South
Indian consumer with the North Indian. Further still, the
consumer in the metros militates with his usage and habit
patterns. The Indian consumer, is therefore very difficult
to understand and very difficult to predict.
Tea and Coffee are the favourite drink in India especially

tea. A quiet cafe revolution is sweeping urban India with
the explosion of coffee bars. That is bad news for tea - still
the favourite brew for a majority of Indians -, which has
been losing out to coffee in recent years.
India is one of the world's largest exporters of tea and one

of its biggest consumers. However, it is coffee drinking
which is increasingly becoming a statement of young and
upwardly mobile Indians. Moreover, coffee bars, an
unheard of concept until a couple of years ago, are
suddenly big business. Coffee is slowly but surely
substituting tea. There is also rise in the consumption of
coffee. The specialty coffee movement has gained much
of its momentum through the efforts of companies like
Barista, Café Coffee Day and Starbucks.
In India CAFÉ COFFEE DAY and BARISTA are the
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most popular and well-known cafés. The college

crowd rates them as one of the coolest hangouts. These
companies sell similar product but their positioning
and target audience are very different from each
other. These players not only sell coffee and tea but also
food and other merchandise items.
Despite of serving to different audience, these

players compete with themselves. Each player
fights for its own share of market. They try to
differentiate themselves by the way of product or price or
promotion. However, they are also facing the competition
from the foreign players like Georgia, Starbucks etc. It
would be interesting to see how the companies
differentiate and maintain their share in the market.
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2) Retail Industry In India
Accounting for over 8 per cent of the GDP in the West,

retail business is the largest private industry, ahead even
of finance and engineering. Over 50 of the Fortune 500
and about 25 of the Asian Top 200 companies are
retailers.
Today, in some developed countries, retail businesses

have shares as large as 40 per cent of the market. For
instance, in Thailand and Brazil the organized retail
business has grown at tremendous pace.
In contrast, the organized retail business in India is very

small. This is despite the fact that India is one of the
biggest markets. Retail business contributes around 10-11
per cent of GDP. It amounts to about $180 billion market
and is six times bigger than Thailand and four-five times
bigger than that in South Korea and Taiwan. India also has
the largest number of retailers, about 12 million, though
they are mostly small.
The challenges facing the organized retail industry

in India:
• Competition from the unorganized sector. Traditional

retailing has established in India for some centuries.
Most retail outlets are family-owned and offering
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limited products and finance facilities.

• In contrast, players in the organized sector have big
expenses to meet. Organized retailing also has to
cope with the middle class psychology that the
bigger and brighter sales outlet is, the more
expensive it will be.
Competition is growing in the retail business and super

stores are being set up, in the rural areas, customers are
entirely at the mercy of retailers. With rising income and
changes in life style, demand for better products became
insistent.
From a size of only Rs.20,000 crore, the organized retail

industry will grow to Rs 160,000 crore by 2005. The total
retail market, however, as indicated above will grow 20
per cent annually from Rs 400,000 crore in 2000 to Rs
800,000 crore by 2005.
Big industrial houses, such as the TATAs, the RPG group,

ITC, HLL, realizing the potential of the retail business, are
now scrambling for a place in this segment. Over the last
five years, these groups have set up a number of chain
stores. For instance, West Side by Tatas, Food world by
RPG, Shoppers' Stop (Rahejas), and so on.
Global developments in the retail industry, together with

changing demand patterns of the Indian consumer, have
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affected the retail industry format in India too. This can be

seen in the emerging Supermarkets, Hypermarkets,
Specialty stores and Malls in India.
The value that retail can add to the economy cannot be

underestimated. However, challenges that lie in
implementing the change agenda required to capture
these benefits should also not be underestimated.
Reason for the increase in the organized retailing in

India:
• Rewriting the laws

• Restructuring the tax regime
• Accessing and investing significantly in
infrastructure
This level of change is unlikely to be successful if carried

out by any one retailer. A concerted industry-wide effort
and a partnership with the government are required to
achieve a number of these goals.
The crucial aspects to Retailing – the front end of

manufacturing and last-mile of supply chain need
specialized skills, which will be individually
deliberated at length covering:
• Finance
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• Technology
• Supply Chain Management
• Inventory Management
• Success and Survival
• VAT – The Advantage
Most single-format retailers have diversified successfully

into multiple formats. The move towards multi-category
and multi-format outlets is diminishing the scope of
existing retailers to differentiate based on assortment or
location alone.
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3) Food & Beverages Market In India
India ranks first in the world in production of cereals,

livestock population and milk. It is the second largest fruit
and vegetable producer and is among the top five
producers of Rice, Wheat, Groundnuts, Tea, Coffee,
Tobacco, Spices, Sugar, and Oilseeds, yet India’s share in
international food trade is a minuscule 1.5%. Value
addition to foods by processing is a mere 8% of total
production.
Organized food retailing industry is still at infancy stage

with share less than 1 per cent of food retail market size in
India. This is despite the fact that food is the largest
category in consumers spending basket. Indian consumers
are deprived of quality food products, variety and value-
added services at the retail end largely because of the
highly fragmented nature of food retailing. Organized food
retail has the potential to bridge this gap - and herein lies
the opportunity.
The Indian food retail industry is of a highly fragmented

nature and consumers are deprived of quality food
products. Organized food retail has the potential to bridge
this gap.
Organized retailing is also emerging as an important
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gateway for the sale of food products. In Chennai, about

17 per cent of food sales flow through supermarkets. In
the metros, most women have shifted to supermarkets
from street corner grocers. The world of food retailing is
witnessing a paradigm shift that will have long-term
implications for the way food retailing evolves in emerging
economies like India.
Retailers are looking to capture a larger share of

consumer spending by expanding their product portfolios.
Increasing pressure on financial performance is also
prompting food retailers to look at high-margin categories,
which include non-food products and services. Retailers
have also realized that they need to become multi-format
if they are to expand their customer base and gain a
competitive edge.
Differentiation on the basis of value for money and value-

added services will, however, become increasingly
important. Retailers across the world are experiencing a
wave of consolidation that is being driven by the desire for
economies of scale, saturation in domestic markets and
the desire for access to new markets.
In line with international trends, the Indian market has

already seen organized food retailers going multiform and
multi-category with an increasing focus on private labels.
Consolidation is likely to be triggered by the entry of
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leading Indian corporate and international retailers into

the food-retail arena.
The share of spending on at-home food consumption has

fallen from 90 per cent to 80 per cent in the last five years
between the top two socio-economic strata. Significant
spending on food and increasing out-of-home food
consumption represent opportunities for food retailers and
food-service companies.
India has the highest number of retail outlets in the world

– 12 million outlets with a total retail space of about 2
billion sq ft. Owing to this fragmentation, the availability of
retail space per capita in India is among the lowest in the
world – 2 sq. ft per capita compared with 19 sq ft in the
US. Some 5 million of these outlets engage in retail of food
and food products. The degree of fragmentation is much
higher among food retailers than among nonfood retailers.
The majority of food and food products are retailed
through neighborhood kirana stores.
The organized food retailing sector in India is on the verge

of a boom with almost all the big corporate houses
including Tatas, Reliance, ITC Group, Lohias-promoted
Indo Rama, Mumbai-based RK Hospitality, Kishore Biyani
with his Big Bazaar, RPG group with its hypermarket and
supermarket chain eyeing the sector aggressively.
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4) Transition Of Cafes
Coffee remains in the outer periphery of interest in the

minds of consumers. Other aggressive beverages like tea
and the colas of every hue have a substantially higher
degree of interest and of course advertising backing them.
Coffee consumption is down in the last four years. From a
level of 55,000 tpa, the numbers are down at 52,000 tpa
today. Per capita consumption hover around 52 gms. This
signifies a measly 10 cups of coffee per Indian per year!
Branded coffee consumption is a small percentage of the

total. Only 19 per cent are branded and the rest is in loose
forms. However, a significant increase in consumption in
the branded segment anticipated. This is going to be
spurred by the liquid coffee cafes and of course, the
inroads foreign brands will make in the domestic market
soon.
Liquid coffee bars and vending machines are going to spur

consumption on in the country for coffee. These are going
to be front-ended efforts that will make coffee that much
more consumer-friendly and will make the beverage
accessible at arms length reach and available at the end
of a desire.
It is expected to have 60,000 coffee vending machines in
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the country in the next three years and expect to see at

least 4000 Cafes across the country in the next five years.
The market for vending products in India is opening up.

Towards the end of the review period, with organized
retailing coming in, consumers started believing in brand
names. Vending products through machines started not
only for coffee and tea, but also for soft drinks, chocolate
confectionery and magazines, amongst others. The total
strength of vending machines in the country is
approximately about 60,000 machines by the end of 2004,
which includes a large number of unbranded machines
too.
Coffee pubs and cafes mushroom throughout India, with

vending machines also on the rise. Over the review period,
there was a mushrooming of coffee pubs and cafes across
regions, and across the country as a whole. Coffee chains
like Barista, Qwiky's and Cafe Coffee Day (run by
Amalgamated Bean Coffee Trading Co Ltd) have become
hugely popular hangouts for Indian cities' young and
trendy consumers. The cafes and pubs are not just places
where people buy coffee; they also try to sell a certain
lifestyle. The chains, with their glitzy interiors and
designer furniture, are targeted at urban, upper-middle-
class and rich Indians.
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A) Origin
A traditional family owned a few acres of coffee estates,

which yielded the rich coffee beans in the soil of
Chikmagalur, However they soon amalgamated with Bean
Coffee Trading Company Limited, now popularly known as
Coffee Day. The coffee growing tradition was since 1875,
but the opportunity after the deregulation of the coffee
board in the early nineties. Coffee Day began exporting
coffee to the connoisseurs across USA, Europe & Japan. In
the calendar year 2000, Coffee Day exported more than
27000 tonnes of coffee valued at US$ 60 m to these
countries and, for the second time in its short career of 7
years retained the position as the largest coffee exporter
of India.
B) About Coffee Day
Coffee Day has a wide and professional network in the

major coffee growing areas of the country comprising over
50 agents and 50 collecting depots. 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
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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.
Key Features:
• 125 years of coffee growing history

• A fully equipped ISO certified roasting plant with a
70000 tonnes per annum capacity at Hassan
• 5000 acres of self owned Coffee Plantations
• A ready and enviable base of more than 10000 suppliers
• Among the top exporters of coffee in India (Coffee Day
Exports)
Coffee Day Comprises of the following Sub Brands
• Coffee Day - Fresh & Ground

• Café Coffee Day
• Coffee Day – Vending
• Coffee Day – Xpress
• Coffee Day – Exports
• Coffee Day – Perfect
C) Introduction
Café Coffee Day currently owns and operates 169 cafes in

all major cities in India. It is a part of India's largest
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coffee company named Coffee Day, ISO 9002 certified

company. Coffee Day's most unique aspect is that it
grows the coffee it serves in its cafes. Cafe Coffee
Day's vending machines have a special niche in the
market compared to competitors because Cafe Coffee
Day machines offer filter coffee unlike the instant
coffee offered by competitors' brands. Growing from a
coffee exporter to a coffee parlour, café coffee day
has certainly come a long way in this segment.
Key Features:
• 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….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
• At present it operates 169 cafes across 43 cities
• Plans to operate 200 cafes by December 2004
• It is a place where customers come to rejuvenate
themselves and be themselves
D) Marketing Mix
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Every company goes through different phases in the

business. The phase is very similar to that of the product
lifecycle. In order to sustain in the market and to maintain
its market share it is essential for the company to have a
right marketing mix. The company has to have a mix of
proper product that is relevant to the target audience,
proper price, proper reach i.e. the place and relevant
promotion that keeps the target audience interested in the
company.
I) Product
Café Coffee Day’s menu ranges from hot and cold coffees
to several other items. However, the core product is the
coffee. The management believes that trend is changing
towards coffee. So taking this opportunity, the company
also sells coffee powder. Café Coffee Day also believes in
selling other merchandised products.
Core Product:
• Exotic international coffees e.g. Capachinos
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• Food items e.g. Sandwich, Samosas

• Desserts and
pastries
Supportive
Products:
• Funky Caps @ Rs
60 onwards
• Cool T-Shirts @
Rs 175 onwards
• Bags @ Rs 160
onwards
• Mugs @ Rs 60
onwards
• Coffee Filters @ Rs 95
Coffee Powders:
• Arabica @ Rs 43
• Perfect @ Rs 35
• Charge @ Rs 28
• Dark Forest 200gm @ Rs 80
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New Introductions:
• Reglon Sleeves T-Shirts @ Rs 249

• Marquis pens @ Rs 315 Onwards.
• Shoulder Bags @ Rs 209
• Coffee Mints @ Rs 40
II) Price
Café Coffee Day has positioned as “Value for Money”. The

major target customers are the youngsters. Pricing is a
very sensitive issue for the Indian consumers.
Café Coffee Day believes in mass marketing.
The average spent by the customer is 100-125. Their

coffee starts from as long as 15 Rs. However there
are some outlets where the students are given special
discounts. CCD even set up their outlets in the college
campus. For e.g. Café Coffee Day has opened an
outlet at the NMIMS campus where they are
providing additional 10% discount to the students.
CCD is looking for expansion to more interior places. Here

prices become more complex as the consumer are very
conservative in spending. A cup of coffee at Rs. 35 is
accepted in metro cities but not in small towns. The
decor, ambience and the experience will play a major role
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in pulling the crowds in small cities.
The price of the product has to be kept uniform in

order to maintain the uniformity in all the outlets.
CCD target audience is youngsters. Majority of them are

dependent on their family for their expense. This is one of
the most important reasons for low pricing compared to
other cafes. They believe it in making their product
at an affordable price. Pricing is one of the
important weapons for them to fight against their
competitor.
III) Place
Café Coffee Day outlets are spread across India. However,

there are more number of outlets in the metros and
towns. For e.g. In Mumbai CCD have 37 outlets. In the
past 12 months, Café Coffee Day has also been on an
aggressive drive to expand the number of cafés in the
smaller towns across the country based on research and
invitations received from these places to open more such
cafes there. The company expects to cross the figure
of 200 cafés in 60 cities by December 2004. There
will be an increased focus in cities having populations
from as low as Five Lakh upwards. However, the focus has
not been on just opening more cafés wherever there has
been an opportunity. Café Coffee Day is already the
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largest and most wide spread retail chain of cafes

in India with a current count of 169 cafés in 43
cites.
CCD plans to reach cities like Kolhapur and Nagpur in the

west, Hubli, Belguam and Vizag in the South, Allahabad,
Varanasi, Ambala and Patiala, in the North, Jodhpur and
Mount Abu in Rajasthan and Bhubuneshwar, Ranchi,
Cuttack, Darjeeling, Guwahati and Jamshedupr in the East.
IV) Promotion
In order to stay with the competition and to keep the

audience interested, they undertake lot of promotion
activities. CCD jointly organizes large number of
promotions with the other companies serving the similar
target audience. These cafes have emerged as a new
media vehicle for reaching the right type of the customer.
CCD gets in physical touch with audiences, target loyalty
club members, or advertises in their newsletters. CCD has
also undertaken a promo jointly with TVS scooty. The
promo was done at all the outlets across 43 cities. In this
promo a package of 2 ices blended cold coffee and 1 choc
fantasy for just selling for Rs 82.
Customer Loyalty Programme:
Coffee shops have a high loyalty factor i.e. 60-70%

of customers come in at least once a week. The Cafe
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Citizens Programmed launched along with Net Carrots

Loyalty Services would reward regular customers of Cafe
Coffee Day. Any customer who bills a minimum of Rs 100
on a single bill is automatically eligible for membership to
the Cafe Citizens Programmed. The programmed entitles
members to a 10 percent discount on all food and
beverage bills for a year from the month of membership.
Members will also receive surprise gifts from India times
Shopping when they reach a total billing amount of Rs
2,000, Rs 5,000, and Rs 10,000. Members can track their
total bills spend at any Cafe Coffee Day outlet across the
country. The programme was very successful and they
attracted 1,35,000 citizens.
Smart Card Programme:
Started from 1st Aug, 04; one can enroll into the
program by paying Rs.100/- at any Café Coffee Day
Outlet and get a TEMPORARY CARD immediately after
filling in the enrolment form. With the Card, one can
accumulate Value Points Equivalent To Cash on net
purchases at every transaction made at any of CCD
outlets, provided the card is submitted to the café staff at
the time of placing each order.
The personalized permanent SMART CARD would reach

at ones place in 7 days from the day of enrolment and the
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points would be transferred from temporary card to the

PERMANENT SMART CARD. The points accumulated on
the card would be printed on the bottom of the bill. So it
is very easy to keep track of the points. As soon as
100 points have been accumulated on the card, one
can start redeeming the points. Points can be
redeemed on food, beverage and now even merchandise
like coffee powder, T-shirts, mugs etc except Jukebox
coupons.
Current Promotion:
Oyester Bay
The current promotion is done with the Oyester Bay

Jewellery for the woman’s day. CCD has arranged the
contest, which is arranged for the woman’s day event.
This type of contest attracts the young crowd especially
girls.
Fame Adlabs
CCD is also involved in the promotion with Fame Adlabs.

The pamphlets are being distributed indicating the current
movie shown and the movies to follow. Also it shows the
special offer for some lucky customer to get the coffee
free.
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Magazine
CCD also has private magazine distributed free to their

customers. It includes ads and advertises about the
promotions to follow.
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V) Tie-Ups
CCD jointly organizes large number of promotions with the

other companies serving the similar target audience.
EBD Book Café:
EBD is book café has

joint ventures with CCD.
EBD Book Café believes
that by selling books
from within the
espresso bars like CCD
and other such co-locations that have a footfall of over
100 plus customers in a day will help them to achieve
growth in book sales. One can find one’s favorite
books at such cafes starting from fiction, non-
fiction, religion,
cookery,
management,
lifestyle, art & craft,
children books and
much more. EBD
Book Café are in
collaboration with
Café Coffee Day have existing outlets in Ludhiana,
Jaipur, New Delhi and Kanpur and are in discussion to
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open more such outlets in, Mumbai and Ahmedabad. The

CCD bookshops are in the same premises though not
necessarily inside the outlet.
Himalaya with CCD:
To drive usage of honey, Himalaya Drugs is developing

daily diet products and looking at marketing them by
tying-up with leading consumer brands. It has tied up
with Cafe Coffee Day, to create four dishes; Honey
Cappuccino, Honey milk shake, Rich Chocolate Cake
and ice cream topped with honey and nuts. The Cafe
Coffee Day partnership is unique. It provided a platform to
reach out to the target audience in a relaxed environment
where they could experience innovative uses of honey.
The association with Cafe Coffee Day across 100 outlets in
seven cities was not only to expand the category, but also
towards creating touch points to experience the goodness
of Himalaya Forest Honey
Levi’s:
CCD has also tied-up with Levis where CCD will

promote Levis product in their cafes. Levi’s recently
launched their latest range of apparel, Levi’s 501, through
CCD as part of their annual laterals like Wall visuals, Tent
cards, Posters and Door stickers. There is also a special
Levi’s Drink.
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Movie launches:
Apart form product launches, the company also does a

number of tie-ups with the movie industry in the same
manner. For instance, there was Damdaar coffee
that was sold during the launch of the movie DUM.
There was also the Damdaar contest wherein the
prizes were movie tickets, posters, CDs, and
cassettes. In addition, the winners get a chance to
meet and have a coffee with the stars of the movie.
The latest movie promotion was done for the movie

“Mujhse Shaadi Karogi” which said ‘Bill a
Shagun amount of Rs 301/- and you can enter
the Mujhse Shaadi Karogi Contest’ and in the
contest form there were questions like “Who will win
Priyanka?” or “How will you say Mujhse Shaadi Karogi
to the person you love?” etc.
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E) Ambience and Surrounding
“First Impression is
the Last Impression”.
This is true in this
business. The first thing
that the customers come
across is the surrounding
and the ambience of the
store.
To further brighten the

vibrant atmosphere of the cafés, there has been a greater
thrust on providing more value added services such as
video juke boxes, cosy sofa seating, and exciting round
the year promotions. Trading Co. Ltd had gone in for an
image change and revamping of interiors in the last
quarter of 2001.
Café interiors at the

company's 169 outlets
are being given a whole,
new look. In a change
from the largely wood
and granite based
interiors, there is more of
steel and lots more
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colour. The young colours of today, lime green, yellow,

orange, and purple will predominate. The crockery will
also sport these colours. The larger cafes will also have
lounge areas and a few beanbags.
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F) International Presence
Café Coffee Day, the premier retail chain of cafés in

India announced major developments within the
company including its dynamic plan to expand the
chain into the overseas markets. After having
established itself firmly in the domestic market offering a
world-class food and coffee experience to over 25 million
customers annually across the country, the chain has
already started setting up the infrastructure at 10 cities
where it has targeted to open at least 50 cafes by
December 2004.
The entire international offering will be based on the

successful Indian brand/model in which Café Coffee Day
has gathered a lot of rich experience in coffee café
retailing. As with the domestic cafés, the
international cafés will also be trendy, offering
attractive prices, and the coffees served will be
made from the premium quality coffee beans.
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G) Future Strategy
Spreading Wide:
CCD is planning to increase its reach by going to the small

towns. To achieve the mission of being a number 1 player
in coffee category they cannot ignore these small towns.
CCD plans to open 45 more cafes in the next three
months. The Company is focusing on the southern states
of the country such as Tamil Nadu, Karnataka, Andhra
Pradesh and Kerala, and the western region, starting with
various markets in the state of Maharashtra.
To widen the scope of target audience, CCD is planning to

open some special cafés. These cafes would serve to
the different target audience. However, they have
aggressive competition from the Barista and other
cafes. According to the management, they have a
greater threat from the foreign players.
Expensive Cafes:
The major target group of CCD is the youngsters.

However, the company wants to widen its target group.
Café Coffee Day is planning to come up with a
different type of café, which will be having different
environment all together. Even the merchandise will be
different from that of the original CCD cafes. The coffees
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and the merchandise would be much more expensive and

of a better quality. These cafes are mainly targeted to
people with high-income group and status oriented
people.
International Coffee Flavours:
CCD is planning to start soon with the international

coffee at all the outlets. They have already done
the test marketing in certain outlet of Bangalore.
Adding the new flavour would increase the choice for
the customer.
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H) Its All In the Mind
CCD holds a distinct position in the minds of the target

customer. Most of the customers are loyal and visit
the same outlet. CCD is very aggressive in terms of the
marketing activity in order to maintain the market share.
Major customers are youths. Focusing on the target group,
tie-ups are done with other companies in order to keep the
audience interested. They are planning to tie-ups with
the cinema theaters, shopping malls.
Coffee Café Day is the most popular hang out place

for the youngsters. CCD is perceived as energetic and
trendy organization. The crowd is very lively. Most of the
consumers are frequent visitors. Many of the people
also have their loyalty card “I visit here twice a
week. It’s a good place to hang out with friends.
CCD has the wide variety of coffee that suit to the

consumers needs. The ambience is very clean, well-lighted
and airy. Most of the outlets also have large parking space
and good seating arrangements. There is a young feel to
it. The prices are very reasonable (compared to
Barista, not our local Udipi) too and an average
coffee would cost about Rs. 40. They also have
attractive T-shirts sporting Coffee day labels, cups, etc for
sale, which are manufactured by Coffee day.
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The food at CCD is at the affordable price. Customers

coming out there also find the food interesting
especially veg. wraps and the chicken ciabatta
(Italian sandwich). However they don’t like pizzas.
Sometimes, the food smells a bit stale. The deserts are
the most preferred by the youngster’s especially
chocolaty cakes and apple pie. The employees are
very friendly. They maintain a good relation with their
customers. At CCD employees are very helpful and serve
the customers, which differentiate them from other cafes.
CCD coffees are much cheaper than that of cafes. This is
one of the main reasons for attracting the young college
crowd. CCD is also very well spread.
Many customers believe CCD move with the

competitor. Wherever Baristas opens its outlet, CCD
comes with the outlet.
One will not find more of working class or management

people. It’s not the good place to have a business talks.
The place is very noisy which makes them difficult
to concentrate. Even the seats are much closed
arranged thus does not maintains secrecy.
The music at CCD is very loud and trendy that is

suited for the young crowd. There are also some
people who believe that CCD is cheap and it does not suit
their status.
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The other problem that customer feels is the practice of

having a TV set that is perpetually on MTV or Channel V or
something and something loud and jing-bang going
on.....It would be much better to have some soft music.
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I) SWOT Analysis
Strength:
• Large Number of outlet.

• In house sourcing of coffee beans.
• Tie Ups with good companies.
Weakness:
• Limited Target Audience.

• Follow the competitor strategy.
• Quality of food- Stale breads.
• Loud and Hard Music.
• Improper sitting arrangement.
Opportunity:
• Large Untapped Market

• Tie-ups with other companies for promotion.
Threat:
• Entry of Foreign players like Georgia, Starbucks etc.

• Large unorganized market.
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J) Outlets Visited
I) Carter Road CCD:
The Store was started store started on 12 Sept

2003. This is one of the most premiums and the
biggest of the CCD outlet with the capacity of 130
seat and 25 tables spread over more than 1200 sq.
feet. The location of the store has also played an
important role. The store is located just opposite the
beach at the Carter road, which is one of the
favourite freaky places for the youngsters. The store
has indoor as well as the outdoor space. Being one of the
most important outlets for CCD, it also has a jukebox so
that the customers are entertained and can choose the
song they like to hear.
CCD working hours is normally from morning 9 to

11:30 nights. However, the outlet at Carter road Working
Hours are from-Morning 9 to Night 1.30 as their daytime
customers mainly includes youngsters, students, and
families in the late night. However the peak timings are
from- 6-8, 10-11 pm. The staff members include 2 Branch
Manger and 12 male employees, and 4 female employees.
CCD also follows the pattern of shifts i.e. 4 staff
member in the morning and 14 in the evening.
Normally the footfall at the Carter Road branch are
35
325 / per day. However it may vary substantially during

the holidays and during other occasions. The Average
spend by the customer is Rs 100. The footfalls and
the average spending however vary. This branch has more
footfalls and also the average spending is more compared
to the other stores.
The outlet has Unique Machine – LaMarzotco

(Asconia) which itself cost approximately 5 lac Rs.
Customer Profile:
• 37% lies in the age group 20 and 24
• 27% 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
Customer Average Average Time

Timing
Profile Money Spend Spend
Students 5-9pm Rs. 100 1-2 Hr
36
Families 9-11pm Rs. 200 30 min
II) Lokhandwala CCD:
The Store at
Lokhandwala is also
a good revenue
earner for the
company. The store is
located just outside the
Lokhandwala and
situated just opposite to
Barista. This store is also an important store due to the
location and also the target customers. Lokhandwala is
on of the most famous place for shopping. This store
is not as big as that of the outlet at Carter Road. It has a
sitting capacity of 95 people. This store also has
indoor as well as the outdoor space but has more of the
outdoor spacing.
The working hours

at Lokhandwala
outlet is 9 am to 12
pm.
The peak timings

are
• 7-9p.m.(Working
Crowd)
37
• 10:30 p.m.- 11.30 p.m. (Families)
The USP of this store is its large parking space. Customers

come to the outlet after shopping from Lokhandwala to
have a coffee. The music is not appropriate which makes
some of the customers annoyed. The Machine used in
this outlet is Asttoria, which cost around 3.5 lac.
The store sells lot of other products like T-Shirts

and cups, which also do good business. However, the
goods are not properly displayed. The staff at the outlet
was efficient courteous and very helpful. There is a good
customer service from the staff and helps the customer in
making the decisions. The staff strength is 11 and is
divided into 3 shifts that include 1 store manager.
Customer Profile:
• Foot fall- around 115 per day

• The average spend: Rs.125-150/customer–1-3 p.m.
• Comprises primarily of youth from the 18-30 yrs age
group
• Attracts a lot of people from the film industry
38
A) Introduction
“Barista” (which means “bartender’’ in English) is

an Italian coffee chain shop. Barista traces its roots
back to the old coffee houses in Italy- the hotbeds of
poetry, love, music, writing, revolution, and of course, fine
coffee.
Barista Coffee was established with the aim of identifying

growth opportunities in the coffee business. Increasing
disposable incomes and global trends in coffee
indicate immense growth potential in this particular
segment.
More significantly, they have been quick to spot a latent

need waiting to be tapped: Coffee lovers seek a
complete experience. One that combines intelligent
positioning with the right product mix and carefully
designed cafes. In other words, they seek an
"Experiential lifestyle brand".
As one might imagine, tapping into this need

requires a company that can not only deliver great
coffee and espresso bars, but one with the ability to
scale up operations quickly. At Barista, they have gone
to great lengths to establish this.
39
Barista started its operations with its first outlet at

New Delhi in Feb 2000. The Company was promoted by
Amit Judge’s Turner Morrison Group BARISTA Coffee
Company Ltd - in which Tata Coffee Ltd holds 34.3 per
cent stake Ventured into India.
Barista Coffee Company Limited has been recently

listed among the top 100 brands in India by Super
Brands India; the Indian Division of the globally
renowned Super brands ltd. Barista was selected out of
711 leading Indian brands across 98 categories. Barista
has its operations spread over 153 outlets across India. At
present, Barista had, he said, over 120 espresso
bars and corners in the four metros and 14 cities of
India, with 35 being added over the last 12 months,
out of which 10 had been relocated.
40
B) Barista –Marketing Mix
Barista continued to maintain its focus on quality

by sourcing only Arabica beans and using the best
international espresso machines, supplied by the Italy-
based LaCimbali.
Barista was, working towards becoming the number

one in terms of parameters likes brand-imagery,
brand-dominance, customer-loyalty and turnover.
The strategy for fulfilling its mission over the next decade
would be by leveraging its strong position in the Indian
market to grow further in an Asian context.
I) Product
Barista cafes also have a good number of product mixes.

The menu ranges from variety of coffees and pastries.
Barista also sells other items like mugs, Coffee beans, T-
Shirts, Coffee Kettles.
Core Product:
• Coffees
• Cakes and Pastries
• Coffee Beans
Supporting Products:
41
• Coffee Mugs in Orange and Blue which cost Rs 55 and Rs

99
• T-Shirts which cost Rs 150
Coffee and Coffee beans are also considered as the core

product for Barista. The company has also tested
marketed coffee beans through its outlets in Mumbai and
Delhi. Barista claims that they sell a best coffee bean.
Barista has started with a new concept by the name

Barista Merchandise. Barista Merchandise is available
at selected Barista espresso bars in Delhi, Mumbai,
Kolkata, Chennai, Hyderabad and Bangalore. The
Barista merchandise are the different types of beans that
customer can take home and have the coffee of his own
taste. Some of the Barista Merchandise includes
• The French Press

• Barista House Blend
Barista is also diversifying its hot beverages menu

and introducing several specialty teas. The
reasoning undoubtedly is based on the fact that
apart from South India, all other parts of the
country are mainly tea-consuming areas, and this
step is expected to help the company expand its
client base in the smaller towns of these regions.
42
II) Price
Barista holds the perception of being an expensive

cafe. However, Barista was the first organization to start
the concept of the organized cafes in India. Initially
Barista started with Skimmed pricing policy. Barista
segmented the market according to the income and age.
Due to the entrance of new players, Barista was

finding difficult to maintain the market share. First
and foremost, Barista re-defined the target market
customer. They even planned to change their tagline.
"Where the world meets” And so when company looked at
this positioning and they looked at the pricing - the
strategy being that if we lower the pricing.
Apart from this, Barista has also introduced new

low-priced beverages. The officials say these price
cuts have resulted in 15-per cent walk-ins at
Barista's outlets during the last few months. Barista
decided to alter their strategy in order to retain
their market. After studying the market, Barista found
that competitors were fighting against them against the
pricing. They decided to reduce their pricing. It was not
done from a perspective of acquisition. With reduction in
the prices, there had been a 47 per cent increase in
footfalls over the subsequent three months. December
2003 had, seen Barista experiencing a 21 per cent
43
per-store increase in footfalls over the previous

December, with the number of footfalls for the year
totalling 14 million.
III)
Place
Barista started its first outlet at Bangalore and from

there it has started spreading its wings especially after
price reduction. Now they are even planning to focus on
raising the bar of coffee experience. Barista already has
presence in all the metros and has a presence in all
the highly populated regions like Mumbai, Delhi,
Bangalore and many more places.
Barista is seeking to expand through the franchisee route

model and plans to enter B-class towns in the country and
middle-class localities in the metros such as North and
East Delhi. By 2005-06, Barista plans to have over
300 outlets across the country up from 153.
IV) Promotion
Barista did not initially believed in any kind of promotion

but in order to keep their customers interested they
started building the brand by communication both within
the store as well as outside the store through mass media.
It under takes various promotion activities during
44
the festival or during occasions like Valentines Day.

Barista has done advertising in almost all national
newspapers. Barista has launched summer campaign
through summer chillers, and was advertised through
different channels.
Sony:
Barista Coffee has tied up with Sony Music. Under

this association, Sony Music would endorse CDs and music
cassettes of their recent acts, which will be used as the
lucky draw prizes for the participants. Consumers buying
food, beverage and merchandise for Rs 110/-and above
during specified hours of the performance, will be entitled
to participate in the lucky draw. The prizes will be given
away in a couple of draws during the performance.
45
V) Tie-Up
Barista with Taj Group:
Barista Coffee, a leading coffee bar chain, has tied

up with Taj group of Hotels for setting up exclusive
Barista expresso bars at the Taj hotels in metro
cities. The first such bar would be at the Emperor Lounge
at the Taj Mahal hotel in New Delhi followed by a Barista
Bar at the Sea Lounge at the Taj Mahal Hotel in Mumbai.
This would be followed by similar bars at Taj Mahal hotels
in Calcutta, Chennai and Bangalore. Barista also will be
housed at the coffee shops of all major Taj Hotels in the
country.
Barista with Tata Teleservice:
Barista has also tied up with Tata Teleservice. This

tie-up was primarily done in order to provide
consumers' access to the Internet. The objective
being, today if you look at Barista consumers, a fair
number of them come to Barista to discuss business over
a cup of coffee. Moreover, it is easier for them to meet at
Barista, discuss business and send the information across.
It is going to be focused primarily on work, towards the
busy executive who is traveling and has dropped by for
46
coffee or the small office segment who might just want to

work out of Barista.
Lacoste with Barista:
Lacoste India has decided to tie-up with coffee outlet

chain Barista in all the major metros and some mini-
metros. The strategy is to target younger audiences,
which have a penchant for the "finer things in life".
The customer segment of Barista is very different from the
ones who visit a regular coffee shop.
Elle-18:
Barista is jointly tied up with Elle 18 to promote their

product. Elle-18 is launching a collection of coffee
colored lipsticks and has named it after Barista’s
beverages! Therefore, they are working with Elle 18,
which is a youthful brand. Moreover, they both will grow
with this association. For Elle 18, the objective is to build a
platform for their range of coffee colored lipsticks and for
them, the objective is to associate with the brand and
have their consumers coming in to Barista.
CBC Book shop:
Barista has tie-up with CBC bookshop, which has book

corner at eight Barista outlets in six cities. Barista’s
bookshops are right inside the café. Barista prefers best
47
sellers and classic, besides books on management,

lifestyle, sports, health, religion, children and even
cookery. Some of the outlets also stock activity books,
comics, CD-ROMs and crayons.
Other tie-ups:
Barista has tie-ups with Planet M, Crossword and the

Taj group of hotels for setting up Espresso corners
within their premises. Moreover, along with ABN Amro,
Barista has introduced a concept called Ban café - a café
in the bank premises.
C) Ambience And Surrounding
The colour shades that they have used are

terracotta; it is warm
- it is orange. The
background has a
dark Orange colour.
Orange colour
signifies of a style
and friendly
ambience of its own.
In order to match the

colour combination of
the surrounding even
48
the uniform of employees are orange in colour. The place

invites the customers to spend time. However, the focus
would, continue to be to recreate the ambience of
the typical Italian neighbourhood espresso bars
in India so as to provide a comfortable place for
people to relax and experience “the joy of coffee”.
The ambience of the location and the quality of
coffee would, continue to be the key factors while
growing the chain.
It has lots of board games for any one to indulge in, like
chess, word scramblers, and a guitar to pluck some
chords.
Music:
The music is not too loud and encourages

conversation, and the person behind the counter is
non-intrusive and friendly.
Barista is also planning to organize live music.

Listening to live music, while sipping a warm cup of coffee,
next to your beloved can make an evening a perfect
memory to cherish. In order to gift its customers with this
tranquilizing experience, Barista is buzzing with live music
this winter spate. Barista presents 'Oceans', the music
band that will perform live at various Barista
49
outlets.
Sitting Arrangement:
Barista is a place for relaxes. Even in a crowded espresso

bar, at Barista, one will have his share of privacy. The
seats are arranged at a certain distance to have a
privacy of talks as their major customers come
there to discuss the business or to relax and chat.
50
D) International Presence
The company operates over 130 coffee joints

including four in Dubai and Colombo. Barista had
chalked out aggressive strategies for expansions
into Europe and West Asia.
Barista has already started its operation in both Sri

Lanka and Dubai and doing very well. They are talking
terms with a few potential partners in Kuwait. Barista
owns and manages all its outlets in India but
operates through franchisees in other countries.
51
E) Future Strategy
The management at the Barista outlets thinks that their

positioning is very different from that of CCD. They think
that the people going to CCD are young college students.
The target audience for the Barista are young
managers and middle level mangers and also
family. However there is a treat to them in terms of the
share of the young college going crowd, which forms a
main target audience for the CCD and comparatively small
part for Barista. In order to maintain the share the
managers of Barista thinks that they would need to
increase their presence and also have to tap the other
untapped market. The company is also planning to
tie-up with other companies in order to increase the
promotion activities that would keep the crowd
interesting. They also are planning to organize the
festivals of the college or sponsor prizes in the
festival.
Increase in outlet:
As part of its marketing strategy, the company is

planning to promote international coffee blends
first through 40 Barista stores in Mumbai, Delhi and
Bangalore. With the move, the company also hopes to
expand the number of Barista Espresso Bars on an
52
average rate of two to three per month as well.
International expansion:
Barista is also looking for the international

expansion. They are planning to expand in the
Kuwait market. Barista is also planning to expand its
presence in the other Asian countries like Sri Lanka,
Dubai.
Promotional Activity:
As part of its marketing strategy, Barista Coffee

Company Ltd is planning to launch a host of
consumer promotions at its outlets in 2004. For the
purpose, the company is currently in talks with many
entertainment, consumer goods and music companies,
which include the US-based Bose Corporation, Swatch and
International Travel House.
Improvement in the Services:
Initially Barista had a system of self-serving. Indian

consumers are not comfortable with this concept.
However in some of the outlets they have started
serving the customers.
Informative Staff:
The staff should be qualified as they will be dealing
53
with intelligent people. The staff should be friendly but

should not try to educate the customer who is already
aware of the things.
54
F) Its All In The Mind
Barista is a place where the world meets. People come to

Barista to have a meet or to relax. A lot of them
actually come alone as well. This is actually one of
those places with people coming in alone because
they are comfortable with themselves. It is a place
where people are meeting each other in an
environment, which is fulfilling social and intellectual
needs.
The employees at the Barista are also energetic.

They help the customer in making decisions for their
purchase. Some of the customers at the Barista think
that they should be personally served rather than
self-serving. When the person wants to orders for some
thing customer has to go to the counter order the
requirements, pay bill and the employee takes the name
of the customer. When ever the order gets ready the
employee shouts on the top of the voice calling for the
customer to take the order. This actually unpleased the
customer as the customer gets disturbed every time the
employee calls for some person.
Product:
During the time of discussion I found two types of
55
customers, one who visits regularly and other who

visits rarely. The customers who come rarely are not
actually the coffee lovers. They just come there to do
some time pass. They have no complains about the
product.
But the customers who are coffee lovers are not satisfied
by the product they serve. There are some customers who
actually complain about the quality of the product. Coffees
are not really that good. The bread is dry; the amount of
filling has reduced in quantity etc. Their desserts
fortunately have not suffered and are still pretty good.
Customers not only come there to have a coffee or have a

sandwich. They actually come there to have an
experience. They find prestigious when they visit to
the Barista. As major target audience are youths, young
managers
and middle level management people who come to

discuss their business.
The young students visit there as they feel the

sense of maturity. The people who are status oriented
would prefer visiting Barista rather than CCD. Their targets
are youth, young executives and nucleus families. Barista
also claims that intelligent people come here “Someone
who is intelligent and appreciates the good things in life.”
56
claim by Barista. There are many customers who come

there, as they perceive themselves as intelligent people.
For business people toting Laptops they can hook

up to the net free of cost or catch up on the news
business magazines and newspapers are available
at every outlet. They also come to Barista, as it’s a good
relaxing place where they can discuss about their clients.
There are people who also come alone. They find

Barista is the place where they can just have a
coffee and think deep, as there is no one to disturb
them.
57
G) SWOT Analysis
Strength:
• Claim to sell the best coffee

• Large Number of outlet
• In house sourcing of coffee beans
• Espresso-Highest selling coffee
Weakness:
• Expensive coffee
• Self service for the customers
• Quality of food- Stale breads
Opportunity:
• Large Untapped Market

• Tie-ups with other companies for promotion
Threat:
• Entry of Foreign players like Georgia, Starbucks etc

• Large unorganized market
58
H) About the Visit
I) Barista at Bandra
The outlet at
Bandra has a
capacity of 48
with 16 circular
tables and 2
side tables. The
approximately
area of the
store is 800
sq.ft. The
outlet is very
big as the other outlet of the Barista. This outlet
being at a very busy area, there is no ambience for the
customers to sit outside. Even the parking space is not
sufficient.
As the outlet is located at one of the busier area of

Bandra, the working time for this outlet is from 9 in
the morning to 1.30 in the night. However the outlet is
located just opposite the National College, the peak time
is during the afternoon dominated by students who are
small spenders, shoppers & young executives in the
evening and families in the night who are more than
59
average spenders frequent in evenings & night.
They come to Barista to relax and discuss about their

business. The outlet has the staff capacity of 9 out of
which 2 people stay from morning to evening. Footfall
varies form 250-300 per day; however it varies
widely during the festival time. The average spend
per customer is Rs.120 per customer.
Customer Profile:
Customer Average Average Time

Timing
Profile Money Spend
Spend
Students 10 am-9pm Rs. 0 - 50 0.5 - 2 hrs
Executives 7 pm-12pm Rs. 180 30 - 45 min
Sales:
• Only 35 % sales revenue is from foodstuff
• Balance from coffee and other beverages
60
II) Barista at Santacruz
The Santacruz outlet has the capacity of 48 people with 14

circular tables and 2 side tables. The size is 1000 sq.
ft.appox. The outlet is located at the residential place.
Majority of the customers are corporate and families.
The working hours are from 9 am to 12.30 am, however

the peak timings are from 6 to 11. The total staff strength
is 7 during the week days and 8 during weekends. The
outlet is not the biggest contributor as it is located at a
residential area and even the footfall is very less
compared to that of the other stores (100 customers). The
average spent per customer is also low i.e. 60-70 Rs a
visit.
The machine used by them are One M31 Dosatron by La

Cimbali (operates from 9 am to 1:30 am) and one slush
machine Hugoleni by Hugo Leni. The outlet has Guitar (not
properly maintained) and chess & scrabble boards for
entertainment.
Customer Profile:
Customer Average
Timing Average Time
Profile Money Spend Spend
Students 10 am-9pm Rs. 0 - 50 0.5 – 1.5 hrs
61
Executives /
7 pm-12pm Rs. 140 30 - 45 min
Families
Sales:
• 40 % spend on food stuff / 60 % on beverages
• Sales revenues approx. Rs 7000 / day
62

Barista Vs CCD

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Barista Vs CCD

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Comparative Analysis-Café Coffee Day and Barista

Indian consumer is a very interesting entity. The consumer

Tea and Coffee are the favourite drink in India especially

India is one of the world's largest exporters of tea and one

In India CAFÉ COFFEE DAY and BARISTA are the

most popular and well-known cafés. The college

Despite of serving to different audience, these

2) Retail Industry In India

Accounting for over 8 per cent of the GDP in the West,

Today, in some developed countries, retail businesses

In contrast, the organized retail business in India is very

The challenges facing the organized retail industry

• Competition from the unorganized sector. Traditional

limited products and finance facilities.

Competition is growing in the retail business and super

From a size of only Rs.20,000 crore, the organized retail

Big industrial houses, such as the TATAs, the RPG group,

Global developments in the retail industry, together with

affected the retail industry format in India too. This can be

The value that retail can add to the economy cannot be

Reason for the increase in the organized retailing in

• Rewriting the laws

This level of change is unlikely to be successful if carried

The crucial aspects to Retailing – the front end of

Most single-format retailers have diversified successfully

3) Food & Beverages Market In India

India ranks first in the world in production of cereals,

Organized food retailing industry is still at infancy stage

The Indian food retail industry is of a highly fragmented

Organized retailing is also emerging as an important

gateway for the sale of food products. In Chennai, about

Retailers are looking to capture a larger share of

Differentiation on the basis of value for money and value-

In line with international trends, the Indian market has

leading Indian corporate and international retailers into

The share of spending on at-home food consumption has

India has the highest number of retail outlets in the world

The organized food retailing sector in India is on the verge

Coffee remains in the outer periphery of interest in the

Branded coffee consumption is a small percentage of the

Liquid coffee bars and vending machines are going to spur

It is expected to have 60,000 coffee vending machines in

the country in the next three years and expect to see at

The market for vending products in India is opening up.

Coffee pubs and cafes mushroom throughout India, with

A traditional family owned a few acres of coffee estates,

B) About Coffee Day

Coffee Day has a wide and professional network in the

meet highest quality standards. The most modern

• 125 years of coffee growing history

Coffee Day Comprises of the following Sub Brands

• Coffee Day - Fresh & Ground

Café Coffee Day currently owns and operates 169 cafes in

coffee company named Coffee Day, ISO 9002 certified

• Pioneers of the Café Concept in India with its

Every company goes through different phases in the

• Exotic international coffees e.g. Capachinos

• Food items e.g. Sandwich, Samosas

• Reglon Sleeves T-Shirts @ Rs 249

Café Coffee Day has positioned as “Value for Money”. The

Café Coffee Day believes in mass marketing.

The average spent by the customer is 100-125. Their