Professional Documents
Culture Documents
Coffee Day
PREFACE
Marketing strategies are methods followed by most successful and well known companies to
improve their scope in any market. It is a means by which we determine whether one company is
better than the other or not. Food chains are a growing industry in the modern world with an
increase in the number of working hours of the average working person. Hence, even food chains
need to improve their marketing strategies to appeal to the middle-class consumer.
The main aim of this project is to make the reader understand the various strategies followed by
food companies to improve their scope on the consumer and to add appeal to their brand as a
whole by being creative and unique. Here I am going to talk about the Caf Coffee Day as a
service industry. The Strengths, Weakness, Opportunity and Threats of Caf Coffee Day. The
Environment, Competitors etc of Caf Coffee Day. The service blue print of Caf Coffee Day.
The various techniques followed by Caf Coffee Day have been listed in this project in an easy
and understandable manner.
The contents of this project focus on the marketing strategies and techniques used by Caf
Coffee Day to make it such a global brand with universal appeal.
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TABLE OF CONTENTS
S. No.
1.
Contents
Executive Summary
2.
2.1
2.2
2.3
2.4
2.5
Industry analysis
Current trends in the industry
Roles of technology
Major players
Competition
Tangibility spectrum
6 -13
14
14
14 - 15
16 - 20
20
3.
3.1
3.2
3.3
3.4
3.6
21
21 - 22
23 - 25
26
26 - 27
27
4.
4.1
4.2
4.3
Service Blueprint
Service encounters / moments of truth
Value of blueprinting
Learning form this exercise
28
29
29 - 31
31
5
5.1
5.2
Physical Evidence
Roles of servicescape play in this industry
Aspects of servicescape influencing the service delivery
process
32
32 33
33 34
6.
6.1
6.2
6.3
6.4
6.5
6.6
6.7
7.
7.1
7.2
Wild Card
Pricing
Promotion
Place
People
Process
Positioning
Distribution Process
Industry Section
SWOT Analysis
Porters Five Forces Model
35
35 - 37
37
38
38
38
39
8.
44
9.
Bibliography
45
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Page No.
4-5
40
40 41
42 - 43
4|Page
5|Page
2016
% Change
Colombian Milds
12219
9278
-24.07
Other Milds
22524
20861
-7.38
Brazilian Naturals
28724
30033
4.56
Robustas
34199
34518
0.93
Total
97666
94690
-3.05
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State
Karnataka
Kerala
Tamilnadu
Non-traditional areas
2013
2014
2015
2016
206025
191575
183860
205700
59475
49000
57200
59250
18225
18100
16255
19350
4085
3175
4870
5185
190
150
115
115
288000
262000
262300
289600*
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Value ( In Rs crore)
2012
249029
2007.90
2013
218998
2046.29
2014
197171
2242.64
181225
1944.98
With a view to expand coffee cultivation, Coffee Board has been implementing developmental
programmes for coffee development in North Eastern Region and Non Traditional areas. During
11th Five Year Plan, Coffee Board has proposed to support coffee expansion programme taken
up by the Integrated Tribal Development Agency on 24000 ha. area in Andhra Pradesh and on
850 ha. area in North Eastern Region, which will facilitate export of coffee. As a part of export
promotion, the Coffees from different regions with their logos are promoted including the coffee
from the areas under Integrated Tribal Development Agency, as Araku Coffee. Constant
endeavour is being made by the Government to help the coffee growers to ease their bank debts.
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VISION:
To be the only office for dialogue over a cup of coffee
MISSION:
To be the best Cafe chain by offering a world class coffee experience at affordable prices.
The offerings are designed in such a manner that one cannot be spelt without the other; there are
the hot coffee or cold coffee combinations with delectable desserts and special coffee and eats
combinations for even a group of four friends.
Coffee Day Comprises of the following Sub Brands
1. Coffee Day - Fresh & Ground
2. Caf Coffee Day
3. Coffee Day Vending
4. Coffee Day - Xpress
5. Coffee Day Exports
6. Coffee Day - Perfect
Pioneers of the Caf Concept in India with its first Caf at Brigade Road, Bangalore in 1996.
This Caf was opened as a Cyber Caf (first of its kind) but later, with the burst of cyber cafes it
reverted to its core competency i.e.; Coffee. Essentially a youth oriented brand with majority of
its customers falling in the 15-29 year age bracket .Each caf, depending upon its size attracts
between 400 and 800 customers daily. It is a place where customers come to rejuvenate
themselves and be themselves.
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Key Features
Pioneers of the Caf Concept in India with the its first Caf at Brigade Road, Bangalore
in 1996. This Caf was opened as a Cyber Caf (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 caf, depending upon its size attracts between 400 and 800 customers daily.
1 . Affordable Price
2 . Coffee Winner of Platinum, Gold, Silver and Bronze medals at the India
Barista
Championship 2002
The drink has now become more of a concept than merely a drink itself. The last decade
witnesses the growth of numerous coffee pubs in the country. A number of coffee caf owners
tried to westernize the taste in contrast to the filter coffee.
Now, large retail chains like Qwikys, Barista, and Caf Coffee Day have opened up around the
country. The concept of a caf today is not merely about selling coffee, but about developing a
national brand. Retail cafs now form a multi-crore industry in the country, and have huge
potential for growth locally, and internationally.
The more than US $150 million organized coffee retail business in India is coming into its own,
fed by rising incomes and a fast-food sector that is growing at 40 per cent annually. Coffee
consumption has increased from 55,000 tons to 80,000 tons after decades of stagnation. Industry
sources say the niche coffee retail format is growing at 10-12 per cent a year, with branded
coffee accounting for 53 per cent of sales, unbranded 40 per cent and cafes 7 per cent.
MARKET SIZE IN US
Snapshot: Coffee Shop
Retail Sales Estimates Year End 2016 Coffee Cafes: (beverage retailers with seating) 1,250
locations averaging $550,000 in annual sales = $ 6.12 billion or adults who have visited a
coffeehouse in the past week:
Average weekly spending $5 or under: 41%
Rarely or never purchase food: 49%
Consume the beverage off-premises: 52%
Demographics
Seventy-seven percent of U.S. adults drink coffee daily, and gourmet coffee consumption has
risen in the past five years. According to Scarborough Research, a market research firm that
studies media, lifestyle, and shopping patterns in the United States, in October 2015, 12 percent
of adults have been to a coffee shop in the past month. Although popularity of coffee shops has
recently spread across the nation, the West coast has the most coffee shop patrons. The ideal
ratio of coffee shops to residents in a particular area is 1:10,000
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Marketing Mix
Price Mix
Barista has a Skim Pricing Policy. They began with a higher price, and skimmed the cream for
the market. With the sudden spurt of growth in number of outlets, came the benefits of
economies of scale. Because of this, they have been able to gradually lower their prices, and
appeal to different segments of their target market. Currently, their prices are the lowest they
have ever been, and they can competitively match their prices against Caf Coffee Days prices.
The prices are constantly changing though, and the last 1-year has seen 3 changes (mostly
reductions) in prices. This gradual price reduction meant that Barista could maintain its profitmaximization policy until it could earn large cost savings because of the benefits of high volume.
The main factors that affect their pricing are their cost of goods sold. The costs are quite high
because imports a majority of its products and product. Considering that Barista is trying to
target a market whose age range is between 18 and 60 years, a pricing policy appealing to this
segment is difficult. Extremely low prices act as a deterrent to some customers who might regard
it as an indicator or quality, while very high prices cannot be afforded by most of the youth. But
since Baristas current consumer profile is quite young, their prices are mostly inexpensive, and
at par with their competitors.
Process Mix
The order and delivery process at Barista is based on self- service, where a customer goes up to
the counter to place his order, and goes back to the counter to pick his delivery once it is
prepared.
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Refreshing
Alternatives
Eatables
Smoothies
Guava
Mango
Grape
Black Coffee
Espresso Italiano
EsperanoTM
Americano
Granitas
Blue Curacao
Lime Ice
Mixed Fruit Tango
Guava Crush
Milk Based
Sandwiches
Paneer Tikka
Cheese & Tomato
Chicken Tikka
Smoked Chicken
Rolls
Kadhai Paneer Roll
Chicken Masala Roll
Dessert Coffees
Latte Bianco
Caffe Borgia
Cold Coffees
Brrrista
Brrrista Frappe
Brrrista Blast
Iced Caffe Mocha
Coffee Add-ons
Various Flavours
Chocolate Fudge
Whipped Cream
Espresso Shot
Ice Cream Scoop
Pastas
Strawberry Freeze
Mocha Freeze
Icepresso
Iced Tea
Lemon
Peach
Assam
English Breakfast
Darjeeling
Earl Grey
Desserts
Walnut Brownie
Mocha Excess
Chocolate Excess
Dark Temptation
Chocolate Mousse
Chocolate Chip Muffin
Almond Raisin Muffin
Apple Cake
Other Drinks
Ginger Fizz
Kinley Water
HOT TEA
People Mix
The people at Barista are characteristically trained to be Pleasant, Polite and Positive. They
ensure you have a quiet, uninterrupted visit and provide an escape from the daily pressures of
life. Their uniforms are in sober shades of brown and orange, and contribute to the overall laidback feeling of the caf.
Promotion Mix
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Sizeable population of executives, students and families in SEC A & Barista category.
High disposable income with people looking for new vistas in leisure and lifestyle
oriented concepts.
High level or organized retail activity.
Rapid socio- economic development.
Level of commercial importance (Industrial cities, state capitals etc.)
Number of educational establishments and opportunities available for employment.
On the basis of the above criteria, they had initially targeted cities like Delhi, Mumbai,
Bangalore, Chennai and Hyderabad. Chandigarh and Ludhiana were later added due to tie- ups
with Planet M and Ebony to set up store-in- stores at their outlets. They are also pursuing an
equally aggressive international business expansion strategy. They have over 50 overseas
locations presently under their consideration .They have already done their groundwork in terms
of getting brand and name registrations in over 30 of these locations.
To facilitate their global expansion, they plan to work with strategic partners, who share the same
vision of expanding and promoting the brand worldwide. Currently they have opened new outlets
in Sri Lanka and Dubai as a part of their international strategy.
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From the above chart one can easily make out that 42% people consider the quality of
services offered by the coffe shop before going to it.
The next important factor considered by customer before choosing a coffee shop is the
ambience. They want the coffee shop to be a cool hangout place where they can hangout
with friends and do some combined studies
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From the chart above one can easily make out the following things regarding to Caf Coffee
Day:1. Customers grade Caf Coffee Day very good when it comes to ambience.
2. Customers grade Caf Coffee Day good when it comes to pricing.
3. Customers grade Caf Coffee Day very good when it comes to service offered.
4. Customers grade Caf Coffee Day very good when it comes to quality of product.
5. Customers grade Caf Coffee Day very good when it comes to Location.
Which simply proves that Caf Coffee Day is one of the best hangout place for the youth who
consider the factors mentioned above while selecting a Coffee Shop.
Refreshing Alternatives
Granitas
Blood Orange
Eatables
Melting Moments
Banana n Walnut Cake
Espresso Americano
Cool Blue
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Pineapple Crush
Cappuchino
Emerald Ice
Chocolate Doughnut
Caf Latte
Ruby Surprise
Cookies
Chococinno
Marble Cake
Caf Mocha
Pineapple Getaux
Irish Coffee
International Coffee
Colombian Juan Valdez
Smoothies
Mango Colada
Chocolate Cake
Ice Creams
Vanilla
Ethiopian Qahwah
Strawberry Colada
Chocolate
Kenyan Safari
Cold Coffee
Sweet Mint
Cremosas
Litchi
Seasons Best
Quick Bites
Samosa
Cold Sparkle
Ginger Spice
Puff
Brandied Banana
Pina Colada
Pizza
Tropical Iceberg
Croissant
Iced Eskimo
French Fries
Kathi Roll
Wraps
Biryani
Sandwiches
Kulcha
Burger
Pasta
Masala Sandwich
Coffee Add-Ons
Honey
Cool Refreshers
Fruit Juices
Flavoured Syrups
Mineral Water
Red Eye
Whipped Cream
Scoop pf Ice cream
Chocolate Sauce
Teas
Assam Tea
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From the above chart one can easily make out that the major competitor to Caf Coffee Day is
Barista. Caf Coffee Day is facing huge competition from Barista as both of the service
providers are targeting the youth segement.
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3.5 CUSTOMERS
DELIVERY
INVOLVEMENT
IN
THE
SERVICE
In Caf Coffee Day service Customer involvement in the service delivery does not exist as
everything is done by the staff. From taking the order till delivery of the order, whole process is
taken care by the staff.
4. SERVICE BLUEPRINT
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5. PHYSICAL EVIDENCE
1. Dcor & Architecture
Caf Coffee Day had gone in for image change and revamping of interiors in the last quarter of
2001. Caf interiors have been given a whole, new look. In a change from the largely wood and
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2. Literature
The literature provided by Caf Coffee Day is indicative of its youthful image. The menus,
posters, pamphlets are all designed to attract young and young at heart. They also have their
magazine called as Caf Beat, which is published monthly at their Bangalore head office and
distributed throughout the branches.
3. Dress Code
The dress code is black dress with the logo of Caf Coffee Day on one side. This is also is one of
the evidences.
Below diagram shows the importance of Servicescape / Physical Evidence in terms of coffee
retailing industry:
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From the chart given above one can easily make out the the following anayses:When it comes to giving highest priority, majority of the people would look for Quality,
ambience and physical evidence. Where as the other factors do not affect much.
Therefore it clearly proves that better services backed up by good servicescape is one of the
most important aspect in terms of attracting customers, when it comes to Coffee Retail
Industry or any fast food retailing business.
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6. Wild Card
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From the pie diagram above one can easily make out the consumer is ready to spend Rs . 100
200. So from this one can make out that Caf Coffee Day need to keep the prices low inorder to
cater the current segement.
6.2 Promotion
Caf Coffee Day does not believe in mass media promotions. But they are involved in all the
areas of serious consumer passion.
Through television
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Caf Coffee Day held a contest around a very popular programme on Zee English called
Friends. All the six lead characters are shown often visiting a coffee shop and a lot of youth like
watching the programme. That is why they had a contest running where customers could win
Friends' merchandise. The linkage was that it is a youth based programme and it had a coffee
house.
They have tied up with Channel [V]'s Get Gorgeous contest. The reason being that a lot of their
young consumers are interested in careers. Modeling is a career that a lot of youngsters are
interested in and this was an excellent platform. They have also done promotion for History
Channel, where they have run promotion for Hollywood Heroes. They had asked a few question
and a lucky winner won a trip to Hollywood.
Ticket sales
Caf Coffee Day is involved in ticket sales in quite a few events, Enrique being one of them.
They were involved in WWE, Elton John, and Bryan Adams ticket sales. These acts are very
much appreciated by their consumers. It helps both the organizers as well as Caf Coffee Day.
Organizers need to tell people where the tickets are available and single Caf Coffee Day logo
says it all. From Caf Coffee Days point of view, they always ask for a certain amount of tickets
around which they have a contest. Couples can win ticket for free. This in turn raises the
awareness level as cafe staff approaches the consumers to inform them about the contest. There
is not a better publicity mechanism then the person who is serving you telling you about the
same.
Caf coffee day has been associated with a pool of movies to broadcast it self .Its main intention
is to increase the visibility rate within the crowd who are a part of the audiences. They have been
a part of movies like:
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Sales Promotion
Caf coffee day has been a very promising initiator than compared to its competitors for sales
promotion like:
Giving away Gifts during occasions e.g. valentine day
Offering Coupons
Caf Citizen card which allows regular members to avail discounts upto 20% and become
a member after a purchase amount of upto 2000 Rs.
Sugar free campaign which was mainly done to spread awareness of staying healthy and
fit by using the sugar free sachets
Discounts during festive times to members
6.3 Place
Caf Coffee Day looks to cater to their target market with strategically located outlets. Their
outlets are generally located in High Street/ Family Entertainment Centers. Considering their
generic appeal, there are Barista outlets located in and around Malls, Cinemas, Colleges, Offices,
etc. This endorses their brand image of a caf that appeals to coffee lovers of all ages.
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6.5 Process
The order process at Caf Coffee Day is based on services, where the customer can read the
menu and order. Whereas they have a flexible delivery process, where the customer can go
directly and take what they have ordered for or the order is delivered on his table.
6.6 Positioning
Research shows that 37% of the customers are between 20 and 24years. 27% of the customers
are between the age group of 25-29 years. 60% of the customers who visit the caf are male and
40% are female. 52% of customers who visit the cafes are students.18% of the customers visit
the cafes daily while another 44% visit weekly. Each caf, depending upon its size attracts
between 500 and 800 customers daily, mainly between 4pm and 7 pm. Customers describe Caf
Coffee Day as the place they frequent most after home and workplace/college. It is a place
where they meet friends and colleagues, in groups of 3 or more. The prices here are perceived to
be reasonable and it is a place where customers come to rejuvenate themselves and be
themselves rather than a place to be seen at vis a vis other cafes.
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7. INDUSTRY SECTION
FUTURE PLANS:-
3. In June, 2010 Cafe Coffee Day chain acquired Emporio for Rs 15 crore. Emporio is a
Czech Republic-based caf chain present at 11 locations. CCD plans to co-brand the
chain as Caf Coffee Day Emporio and later transition it to Caf Coffee Day. CCD is also
present in Vienna. The company wants to expand in the East European region, West Asia
and the Asia-Pacific region.
4. Cafe Coffee Day has around 821 outlets in 115 cities in India. CCD plans to take the total
number of cafes to 1,000 by March 2010 and double it to 2,000 by 2014. In October
2016, CCD announced that it will increase its international presence from the current six
outlets in Vienna and Pakistan to a total of 50 stores across Europe and Middle East in
two years time.
Its a youth oriented brand , hence huge potential since 40 % population is below 20
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Weakness
Poor ambience and decor. Caf Coffee Day outlet served prime space for advertising and
promotions.
Many of the Caf Coffee Day stores are incurring loses due to wrong site selection.
Opportunities
More people like to visit Caf Coffee Day for informal meetings.
Caf Coffee Day has gone international, and is planning to attract many new international
markets, hence gaining international recognition
Threats
International Brands like Gloria Jeans, Coffee Bean & Tea Leaf and Illy Caf.
Other hukka parlours are also gaining lot of attention and preferred by young generation to hang
around which in turn is attracting the market captivated by Caf Coffee Day.
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Gloria Jeans
Star Bucks
Illy Caf
Coffee Bean
Price comparison
Variety of products
Service provided
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Threat of substitutes
Threat from substitutes is very high. As there are Hukka Parlours, Other fruit juice joints are
becoming the new junction for youth. E.g.: Ice tea offered by Costa coffee
Coffee offered by other competitors
Cold drinks served in stadium
Competition within industry
Competition within the industry is very high. As there are number of old players like Barista,
Caf Mocha, and Minerva are well established players in the market. Barista is also targeting the
same market segment i.e.; youth.
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9. BIBLIOGRAPHY
Sites Referred:shttp://www.casestudyinc.com/coffee-day-brand-strategy-india
http://www.pr-inside.com/india-food-and-drink-report-q-r2164244.htm
http://en.wikipedia.org/wiki/Coffee
http://www.cafecoffeeday.com/
http://www.barista.co.in/users/index.aspx
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