History

Cafe Coffee Day is a division of India's largest coffee conglomerate, Amalgamated Bean Coffee Trading Company Ltd. (ABCTCL), popularly known as Coffee Day. Cafe Coffee Day currently owns and operates 1232 cafes in all major cities in India. This is an ISO 9002 certified company. Its chief customers are in USA, Europe & Japan. Based in Chickmaglur, the home of some of the best Indian Coffees, Coffee Day has its business spanning the entire gamut of coffee consumption in India. Its different divisions include: Coffee Day Fresh n Ground Coffee Day Xpress Coffee Day Take away Coffee Day Exports Caf Coffee Day Coffee Day Perfect (FMCG Packaged Coffee) division

Cafe Coffee Day (CCD) pioneered the cafe concept in India in 1996 by opening its first cafe at Brigade Road in Bangalore. Till about the late 1990s coffee drinking in India was restricted to the intellectual, the South Indian traditionalist and the five star coffee shop visitor. As the pure (as opposed to instant coffee) coffee caf culture in neighboring international markets grew, the need for a relaxed and fun hangout for the emerging urban youth in the country was clearly seen. Recognizing the potential that lay ahead on the horizon, Cafe Coffee Day embarked on a dynamic journey to become a large organized retail cafe chain with a distinct brand identity of its own.

Segmentation Strategy
Cafe Coffee Day has its main consumer base in the age group of 15-29 years. Its customers are mainly middle class and upper middle class youth who are upwardly mobile. From the market, CCD seeks to target not just the youth but anyone who is young at heart. More than 10% of their customers are above 35 years of age.

Positioning
Cafe Coffee Day, at its inception in 1996 was the vanguard of a cafe culture in India. At a time when the country was growing well economically and young India enjoyed higher spending power, CCD as it is popularly known, started to set up the first retail chain of coffee bars. It broke new ground in 1999 when the entire market grew phenomenally with the entry of new

players. From the beginning, it positioned itself as being a coffee bar and has maintained that positioning for a long time now. For a consumer, CCD represents a fun place where one can go with a whole bunch of friends at any time of the day and have a good time, over coffee. In 2002, Cafe Coffee Day underwent a rebranding exercise through a change in its logo. The earlier logo was a simple red square with a white streak running across, and Coffee Day written at the bottom. At this stage, CCD was still perceived as a South Indian coffee joint similar to the Coffee House in Kolkata, a place where intellectuals meet and spend their time discussing issues. CCD saw a latent market in youngsters, who were increasingly looking for a place to spend time with friends and have fun. It then created an umbrella mother brand, Coffee Day and four sub brands to represent the various activities. The logo then incorporated red, white and green colors, a larger font and emphasis on the word Caf. According to the company, red signifies leadership and passion and the white swirl stands for purity of purpose and the feel of coffee. The new color green endorsed the long heritage of CCD in growing coffee. After recognizing the buzz of conversations that invariably accompanied the coffee being served at their tables, Cafe Coffee Day introduced a new logo with a dialogue box in it. This was to highlight the strong connection between coffee and conversations. Another indication of the dialogue is the two-way conversation between Cafe Coffee Day and its customers. Cafe Coffee Day is known to experiment with different cafe formats. They have been: Music cafes Books cafes Highway cafes Lounge cafes Garden cafes Cyber cafes

The most recent addition has been lounge cafes. These cater to a more niche segment than the general consumer segment of CCD. The age group of 20-29 would be more able to afford a lounge setting than the group of 15-19.

Distribution Strategy
Today CCD has the largest network of cafes in India, with over 1232 Company Owned Company Operated cafes across various cities. But they do not follow a franchising strategy. The channel partner has no involvement in the daily operational activities of the Cafe in the retail space. Neither would he have to invest in operational capital equipment or branding or marketing and promotion of Cafe Coffee

Day. CCD opted not to follow forward integration and outsourced its distribution responsibility to other parties in 2003. As its reach spreads across India and it is now exploring smaller towns, CCD would find it more expensive to maintain on its own. The private players would procure raw materials like sugar and paper cups but coffee beans would still come from Bangalore.

The distribution of coffee beans start from their roasting plant at chikmagalur. The coffee beans are sent to the main offices of north and south India on monthly basis. The outlets contact the Head Distributors on weekly basis. As far as other eatables are concerned, the inventory is checked on daily basis and orders are placed according to the requirement. Caf Coffee Day uses its own store vehicle (small van) for transportation needs.

Generic Competition
Direct Competitors:
Barista- This is the closest competitor to Caf Coffee Day in the Indian market. They target the same class of upwardly mobile youth and young professionals. But Barista is often viewed as a place to unwind after a hard days work or an ideal setting for some business meetings. Caf Mocha- This aims at providing a level of experience to the consumer which is hard to imitate. Inspired by Morocco and Turkey, Mocha offers not just coffee but also sheeshas from Egypt and gourmet desserts. Mocha calls itself a coffee shop for the soul. Qwicky- Based mainly in Bangalore, Qwicky has a strong local hold in South India.

Indirect Competitors:
Eateries like McDonalds and Haldirams pose competition to CCD as they are likely attractions for a consumer to be drawn to. A consumer can well contemplate why he should spend around Rs. 45 on a coffee when he can get a burger and a coffee for the same price at McDonalds. Local tea joints and coffee shops like Caf Nescafe- They are smaller places but nevertheless target the same set of consumers. Hence, CCD has to consider the threat a shop like this could pose to it.

Global Competitors:
Starbucks is planning to enter India shortly and would be stiff competition for even an established brand like CCD.

Competitive Strategies of Cafe Coffee Day

Caf Coffee Day which follows a backward integration of the value chain procures coffee beans from its base in Bangalore. This gives it a high sense of quality assurance and guaranteed supply across its outlets as the same raw material is used in all outlets. But Barista is a combination of imported coffee beans and beans from Tata coffee. This is a relative disadvantage because if there is a discrepancy in the quality or supply, Barista would have to consider alternatives and probably look for another supplier. Similarly, the food items available in Caf Coffee Day are obtained from local suppliers whereas Baristas food is catered by the Taj caterers. Caf Coffee Day would hence, have a lower-cost advantage. The brand strength of Caf Coffee Day in comparison to Qwickys and Caf Nescafe is far greater and its reach is on a countrywide scale. A consumer travelling across cities would not find it too difficult to seek a Caf Coffee Day outlet instead of deciding on trying a Qwickys, which he is not accustomed to. Caf Coffee Day has an advantage of top-of-mind recall for coffee-shop-goers in India, especially because it set the caf ball rolling in the country. It is a place where a lot of young people can meet, chat, have fun and let their hair down, rather than sit and sip a cup of coffee in prim and proper serenity. This is one of the main factors for why it is chosen over places like Barista or Mocha.

SWOT Analysis
Strength:
Products of extremely good quality and taste. Its a youth oriented brand , hence huge potential since 40 % population is below 20

It produces/grows the coffee it serves hence reducing the cost. USP of brand is its considered a highly affordable brand

Weakness:
Weak brand image and lacks strength to maintain brand loyalty Poor ambience and decor. CCD outlet served prime space for advertising and promotions Many of the CCD stores are incurring loses due to wrong site selection.

Opportunities:
Coffee cafe industry is one of the fastest growing industry in Asia. More people like to visit CCD for informal meetings . CCD has gone international, and is planning to attract many new international markets, hence gaining international recognition

Threats:
Competition with other coffee cafes like Barista, Mochas. Other hukka palours like Sheshas , Koylas, U Turn are also gaining lot of attention and preferred by young generation.

Conclusion:
Cafe Coffee Day is now looking at more cafe formats to try in new outlets. They are planning on having sports cafes, singles cafes and fashion cafes. Also, CCD is planning on opening more lounge cafes across the country. Like CCD entered a tie-up with the Ginger hotels of the Taj so that it caters to business executives, it can also try and find consumer segments which it did not earlier think of catering to.