CAFÉ

COFFEE
DAY
MARKETING
REPORT

SWATI JAIN (93056)

MANVI GARG (93027)
SUMEET GOEL (93055)
SANKALP GERA (93045)
RUPALI MADAN (93041)
RAHUL SINGHANIA
(93038)
 EXECUTIVE SUMMARY

People at Café Coffee Day believe that “People are hired for what they know but fired for
how they behave”. Café Coffee Day currently owns and operates 213 cafes in all major cities
in India. It is a part of India's largest coffee conglomerate named Coffee Day, Rs. 200cr ISO
9002 certified company.

The USP of the brand is its affordable price and it is the winner of platinum,gold and silver
medals at the India barista championship 2002

Café coffee day has Marketing mix that is a mix of product, price, place and promotion.

PRODUCT

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.They have been trying to capture Indian interest along with classic coffee.

PRICE

Considering that Café Coffee Day know that its major customer lies in the bracket of 15- 60,
it has tried to derive a policy whereby it can satisfy all its customers. From the time it has
been established that there have been only minor changes in the pricing policy except under
situations like change in the taxation policy of the government.

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.

PROMOTION

They do promotion through televison, selling tickets of events, have tie-ups with youth
brands, association with movies etc.

The major players are Café coffee day, Barista and Mocha .The leader is Café coffee day
with market share of 40% and the challenger is Barista with share of 34%.

To maintain its position as a market leader, it has to focus on strategies like maintaining its
strengths, minimizing its own weaknesses and working on the weaknesses that its
challenger has, to excel. These will help it to retain its current customers and expand its
market share.

STRENGTHS

High rated tastes and quality of products-Café Coffee day has a higher ranking than
barista in terms of taste and quality. So there is a huge potential to attract more customers and
retain the existing ones,

Value for money proposition-Cafe Coffee day is considered as an affordable brand, The
strategy has worked well so far and is likely to do well in future also.

Strong youth orientation-Café coffee day has a strong youth orientation and has a huge
potential of becoming one of the country’s largest youth brands. The untapped market share
and potential for growth is enormous.

WEAKNESSES OF CHALLENGER (Barista)

Inconvenient delivery process-Barista delivery process received unanimous customer

complaints. Customers find it inconvenient to go back to the counter and receive the order.

While in the case of café coffee day, they have a flexible delivery process, where they wait
for some time for the customer to pick up the order but if the customer takes too long then the
order is delivered on their table.

Barista is perceived as an expensive brand in which Café coffee day has an advantage so
they should continue to keep their prices reasonable to retain their market share.

Recommendations on the basis of Weaknesses of café coffee day

Café coffee day should clean up the décor at every outlet where unnecessary advertising is
taking place.

Secondly, it should provide promotional space for its partners with use of clever
collaboration and not printed advertisements and posters everywhere.
 The marketing environment consists of Task and Broad environment.

1.) Broad Environment: The broad environment consists of various components Vis
Demographic, socio-cultural, economic, political, natural, technological, and legal and
Government policies.
2.) Task environment: The task environment includes immediate actors involved in
producing, distributing and promoting the offerings. It consists of supplier groups,
distributors, public, labour, intermediaries, and customers.

• Demographic Factors:

As in the case in many other markets, the Cafe Coffee Day industry is being driven to a
large extent by the given factors:

1) Age mix: Consumers with age varying from anywhere between 15-60 years are
responsible for sales in most of the stores. So we found that elderly consumers are
more health conscious and young crowd is more calories conscious and the
preferences vary.
2) Income: Consumers in the higher income group tend to spend more in the product
than what the middle income groups do. As the product is not a necessity but a want,
consumers in middle income group use the product occasionally.

3) Urban and Rural: There is almost no consumption in rural areas and under progress in
semi-urban areas but fully operational in urban areas, as the product is not very cheap
and out of affordability for major segment of the population in semi urban and rural
areas.

4) Occupation: Working executives have a higher purchase potential and also they tend
to hold meetings over coffee and students need places to hang out and spend quality
time. So the product is more famous in these segments.

• Socio-cultural factors:

Because of different social and cultural factors, the tastes and preferences are influenced.
So some consumers may prefer tea over coffee and vegetarian over non-vegetarian food,
so accordingly the company needs to satisfy the customer’s requirements.

• Economic environment:

The given figure gives an idea about India’s growing GDP and per capita income. It
clearly depicts that purchasing power of people has improved, and so have market
opportunities of Cafe Coffee Day. Also the urbanization is expanding and disposable
income of people is increasing.
 Also issues of concern are
inflation and recession. Rise
in general price indices may
effect the purchasing power
of many consumers and thus
effects the market of Cafe
Coffee Day. Recession,
leading to decrease in
economic growth, job losses etc effects the market of Cafe Coffee Day.

• Technological Factors:

Technological developments in the industry have focused on the fresh coffee (espresso
and cappuccino) segment ignoring the soluble coffee segment. However, fresh coffee
developments have failed to address significant issues in both milk-based and filter
varieties.

Milk-based Coffee Equipment Espresso machines must be cleaned regularly to maintain

the output quality .Standard of espresso/cappuccino produced depends on operator
expertise and equipment maintenance; this leads to significant amounts of substandard
coffee being sold at a premium.

Filter-based Coffee Equipment Filter coffee must be discarded approximately every 30

minutes leading to inefficiencies. In busy restaurant environments, this policy is often
forgotten which leads to substantial substandard coffee being served to customers. Cafe
Coffee Day challenges contemporary thinking in soluble and roast and ground coffee
technology as well as addressing the problems of milk-based and filter coffee equipment
technologies.

NATURAL ENVIRONMENT:

The quality of coffee in each region, each country may vary dependent on a wide range
of factors, elevation of growth, average rainfall, and variation of soil content,
temperature, humidity and others. All of these create distinct taste and flavour variance
between coffee varietals as well as differentiating one region from the next. And Cafe
Coffee Day does not have a contribution in polluting the atmosphere except for keeping
the air conditioners on all the time.

OPPORTUNITIES FOR THE COMPANY IN

INDUSTRY:

• MARKET DEMAND: Market demand has a

direct impact on the sales; moreover this demand varies
with the consumer for various requirements, as per the taste and flavour preferences.
Coffee acts as an energizer and stress reliever for some people, as the stress level in
an average human being is rising, demand for coffee may rise too.

• CONSUMER: Consumer is the king for every producer. So Customer Relationship

Management, consumer satisfaction, continuous supply of the product, flooding the
stores with new products and creating a brand impact on every consumer are
desirable. The company should tend to entertain the tastes of all consumers by
introducing new products; this could be achieved by using feedbacks and
suggestions.

• INDUSTRY: Repositioning the company’s image and reframing the business

strategies to suit the changing consumer needs. Diversification of the business into
related and unrelated products to tap the potential market. For e.g. as Cafe Coffee
Day has already entered into selling food items such as sandwiches, rolls, pastries,
mineral water etc and it could introduce more products.

• SUPPLIER RELATED FACTORS: E-procurement of the raw material, reducing

the procurement time, relationship management and getting raw material at
reasonable rates.

MICROENVIRONMENT IN THE INDUSTRY:

Microenvironment deals with all the factors internal to the coffee industry. They are
suppliers, distributors, public, labour, intermediaries and consumer.
 Consumers: The growing concern among consumers that they must be provided with
products that have a nutritional value and are not harmful to health. Consumers want
product that fits their particular tastes, often made with natural ingredients, fit the bill.
Many consumers have become more wary of using products containing harsh chemicals
used for colouring. Cafe Coffee Day will work on basic sound science, selecting the best
coffee beans, applying rigorous Standards of
product policy to meet consumer needs.

• Distributors: The major outlets for Cafe Coffee

Day products are company outlets itself. Stores
exist in major cities and multiple stores in most
big locations, malls and in areas where the residents have a good purchasing power.
An online menu is available, so consumers could even decide upon their choices by
knowing about the nutritional contents.
• Intermediaries: Cafe Coffee Day is following the policy of Direct selling, moreover
intermediaries are required for procurement of raw materials, advertising, financial
assistance.
• Public and Share holders: Creating brand awareness, brand impact and brand
loyalty are the major objectives of Cafe Coffee Day. It enjoys the kind of success that
rewards its shareholders.
• Employees: Cafe Coffee Day provides
its employees with clothes and caps,
flexible timings and proper trainings as
to how to behave with costumers,
regarding the accounts and billings and
how to help the consumers to the fullest. Cafe Coffee Day will not use any form of
forced, compulsory or child labour.
• Media: Cafe Coffee Day does not promote itself much on media, but has a plan to
spend 2cr in one year to advertise in newspapers and magazines. 5lacs on tent cards,
danglers and posters and through internet via blogs and cafe coffee day community.

FUTURE PLANS OF CAFE COFFEE DAY:

According to NCEAR Indian households can be divided into three income categories, namely
rich, aspirers, and strivers.

Comparing 2003 with 2013, we observe that aspirers segment is expanding to almost thrice
its size in 2003. So the company’s main focus should be to target more of aspirer’s section
and at the same time the rich should also be focused as they are also expanding though
having a smaller size. To focus on the aspirer’s section Cafe Coffee Day should try to launch
products that are relatively cheap and affordable to this section without compromising on the
quality. Or the company could launch existing products with low quantity that would make
the product cheap. The company could try to launch an online system to help the consumers
i.e. placing orders online and then take away the product in a given specific time, which
would save time, in case the consumer in urgency but at the same time, needs coffee.

SWOT Analysis

• Strength

- Strong brand image

- Strong youth orientation

- Value for money proposition

- Convenient delivery process

- Strong base for expansion and growth

 • Weaknesses

- Ineffective promotion

• Opportunities

- Strong brand recall

- Presence of huge number of outlets

- Pricing

• Threats

- Coffee substitute

- Rise in cost of dairy and coffee products

- Competition from national and international products

MARKET SHARE (CCD – 40%, BARISTA – 34%, MOCHA- 20%, OTHERS-6%)

BARISTA
CAFÉCOFFEEDAY
MOCHA
OTHERS

EFFECTS ON INDUSTRY BECAUSE OF CHANGE IN COMPONENTS OF

MARKETING ENVIRONMENT:

The micro-environment

This environment influences the organization directly. It includes suppliers that deal directly
or indirectly, consumers and customers, and other local stakeholders. Micro tends to suggest
small, but this can be misleading. In this context, micro describes the relationship between
firms and the driving forces that control this relationship. It is a more local relationship, and
the firm may exercise a degree of influence.

The macro-environment

This includes all factors that can influence and organization, but that are out of their direct
control. A company does not generally influence any laws (although it is accepted that they
could lobby or be part of a trade organization). It is continuously changing, and the company
needs to be flexible to adapt. There may be aggressive competition and rivalry in a market.
Globalization means that there is always the threat of substitute products and new entrants.
The wider environment is also ever changing, and the marketer needs to compensate for
changes in culture, politics, economics and technology.

PROFILE AND STRATEGIES OF MAIN PLAYERS

1. Café Coffee Day: Café Coffee Day is a division of India's largest coffee
conglomerate, Amalgamated Bean Coffee Trading Company Ltd. (ABCTCL),
popularly known as Coffee Day, a Rs. 750 crore ISO 9002 certified company. Coffee
Day sources coffee from 5000 acres of coffee estates, the 2nd largest in Asia, that is
owned by a sister concern and from 11,000 small growers. It is one of India’s leading
coffee exporters with clients across USA, Europe & Japan.

Its strategies:

• Concentration on young crowd.

• Introducing gifts section i.e. birthday or occasional gifts, which can also be seen
displayed inside the stores .

• Merchandises: Caps, bags, t-shirts, coffee filters, mints also available at stores.

• Café Beat magazine which reaches more than a million smart, receptive and upwardly
mobile youth of India every month. It is one of the most widely read YOUTH
magazines in the country.

2. Mocha: When Mocha opened its doors at Churchgate (Mumbai) in December 2001 it
was a small and homely coffee shop. Right outside Berry’s restaurant, the first Mocha
boasted an eclectic Indo-Tibetan theme and fresh worldly coffee. Time went by and
the people came and coffee brewed. When the tables fell short but the coffee didn’t
they take it as a sign. It was time to grow. By August 2002 Mocha had extended to the
entire premises of Berry’s restaurant and by December of the same year, Mocha,
Bandra was christened. With 13 operational outlets across the country and our own
central kitchen, Mocha stands for the coolest coffee shop in the country with its own
sense of style. It has proven that a coffee shop chain doesn’t need to look like the
cubicles in an office. Every shop can have its own wild and intense flavour.
Everything from a wall to a cup can have its own sense of expression and identity.
That diversity and variety in every outlet enriches rather than confuses. And makes it
a coffee shop people love to visit once more.
Its strategies:

• Formation of committees: Mocha believes we are not just a restaurant but a

community centre. Communities are just not restricted to geography, but also
communities of likeminded people who share a common passion. Mocha
endeavours to provide a platform for communities of likeminded people, to
congregate & discuss their passions over steaming cups of coffee.

• Mocha life shop: Mocha provides to its consumers music, it be from the past and
even contemporary music. Anything that gives them that feeling which good
music always does. That’s mocha musica.Mocha living provides consumes by
varied ambience, they don’t have a standard theme for furniture and they keep
anything that they like which attracts a lot of costumers. Starting off with a better
take away service. Beautiful lamps and hookahs that make the consumer’s
experience at mocha much better.

3. Barista: Barista is owned by Lavazza, Italy’s largest coffee company. Established in

February 2000, Barista Lavazza is noted as a pioneer of Indian café culture. The
 Barista Lavazza chain of espresso bars delivers a truly Italian coffee experience in
warm, friendly and relaxed environments. It aims to provide a comfortable place for
people to unwind over interesting conversations and a cup of coffee. Currently there
are Barista Lavazza Espresso Bars and Barista Crème Lavazza’s in over 30 cities in
India.

Its Strategies:

• Focus on increasing outlets in south india and open outlets in gulf regions and
bangladesh.

• Focus on food sales as its beverages have already become popular and they
should increase the menu.

• Barista Lavazza will continue their association with eDynamic for end-to-end
Web branding, customer acquisition & engagement solution.

CONCLUSION

Café Coffee Day got a high rating in the market survey, for the Taste & Quality of their
products. If they work on this aspect, there is huge potential for them to attract customers,
just based on the taste and quality of products. This is also helped by the fact that they grow
their own coffee beans, and this provides an important base for future expansion and growth.
Café Coffee Day is projected as an “affordable” brand and always has been, extremely youth-
oriented.
Both Barista and Café Coffee Day have under performed or not lived up to potential in
certain areas. The areas are weaknesses, which need to be improved Barista is perceieved as
an expensive brand and it has an average taste and quality of products. The Café Coffee Day
brand, although clearly a youth- oriented brand, lacks the power and strength expected to
maintain brand loyalty..
Café Coffee Day would do better to provide promotional space for its partners with the use of
clever collaborations, and not printed advertisements and posters everywhere. While CCD
moved from strength to strength, Barista lost its initial advantage due to ever changing
ownership and lack of focus.