Marketing Project on Cafe Coffee Day

1. Submitted By
Name: Chirag
Sankeshwari
MARKETING ASSIGNMENT

2.  Indian Coffee Industry
 Café Coffee Day – An Overview
 Market size, Growth trends and Future
projections
 Market Segments, Targeting &
Positioning
 Macro Analysis
 Marketing Mix
 Competitor Analysis
 Distributor Channel Strategy
AGENDA

3. • India is the sixth largest coffee producer in the world and contributes for 3.9 percent
of global coffee production. Of the total coffee production, 70 per cent is exported
and 30 percent is consumed. In 2014–15, India's coffee export volume was 286,545
metric tonnes (India Brand Equity Foundation, 2015). The per capita consumption of
coffee in India is only about 90 grams, considerably low compared to other coffee
exporting nations. This shows the immense potential for the domestic coffee industry
to grow.
• The market size of retail coffee in India is estimated to be approx. 1700 crore. The
coffee industry compromises of players from local as well as international markets.
The main players who constitute this industry are Café Coffee Day, Barista Lavazza,
Starbucks and Costa Coffee.
• Café Coffee Day a parent company of Coffee Day Group is the one of the leading
retail cafe chain in the country. Café Coffee Day pioneered the café culture and first
to launch the coffee bar concept in India. Their portfolio includes Technology Parks &
SEZs, Logistics, Investments, Financial Services and Hospitality. The target population
of the cafe is majorly the young population in the urban cities with disposable
income.
Source:
1. http://www.ibef.org/exports/coffee-industry-in-india.aspx
2. http://www.coffeeday.com/aboutus.html#overview-scroll
Indian Coffee
Industry

4. • Café Coffee Day is largest coffee chain in India owned by Coffee Day Global Limited.
Earlier known as Amalgamated Bean Coffee Trading Company. Coffee day Global Ltd
grows coffee in its own real estates of 12,000 acres. It is Asia’s largest producer
of Arabica beans exporting to the clients across various countries including USA,
Europe and Japan.
• Café Coffee Day started as a retail restaurant in 1996. The first outlet was set up by
V.G. Siddhartha on July 11, 1996 at Brigade Road, Bangalore. It rapidly expanded in
various cities across the country by adding more stores with more than 1000 cafés
across the nation by 2011. The company is well known for being vertical integrated to
cut costs from possessing the plantations, growing the coffee, vending the coffee
machines to making the furniture for the outlets. Cafe Coffee Day has also expanded
overseas with its outlets in Austria (Vienna), Czech Republic, Malaysia & Cairo, Egypt.
• A 1,150 crore ISO 9002 certified company. Over 1423 cafes spread across 209 cities
in India
Source:
1. http://trak.in/tags/business/2015/06/27/cafe-coffee-day-ipo-rs1150-cr/
2. http://www.cafecoffeeday.com/aboutus
Café Coffee Day
An Overview

5. • The Global Coffee Market is around USD
100 Billion and is projected to grow
4.7% annually from 2015 to 2019.
• About 2.5 million bags are being added
to global coffee consumption every year
with around 80% of its growth belonging
to emerging markets.
• India is primarily a tea-drinking nation,
and has witnessed a low consumption of
coffee (exception of South India), with
per capita consumption of 110g/year 8
kg in developed countries.
• Indian Café Market is estimated to be
around Rs.6,700 crore in 2014 and is
projected to grow to Rs15,100 crore by
2020 at a compounded annual growth
rate (CAGR) of 15%.
• The chain café market is approximately
27% of the total organized cafe market
at Rs.1,800 crore in 2014 and is
estimated to grow 36% of the total
organized market by 2020. The chain
cafe market is estimated to grow at a
CAGR of 20%.
Source:
1. http://in.investing.com/analysis/cafe-coffee-day-ipo---very-
hot-coffee-3292
2. http://www.ico.org/monthly_coffee_trade_stats.asp
MARKET SIZE,
GROWTH TRENDS
&
FUTURE
PROJECTIONS

6. TARGETING
• Middle class and upper middle
class youth
• Students, House wives and
youngsters
• People who value a great cup of
coffee
• CCD Seeks to target not just the
youth but
anyone who is "young at heart”.
• Medium Price Band
POSITIONING
• “Third Place" away from the home
and college or workplace for the
young and the young at heart.
• Coffee lovers
• A place for hangout
• Tagline: a lot does happen over
coffee!
SEGMENTATION
Café Coffee Day has its main
consumer base in the age group of
16 – 30 years.
MARKET
SEGMENTS
TARGETING
POSITIONING

7. Perceptual
Mapping
High Quality
Service
Low Quality Service
Expensive Affordable

8. Economic
Social
Technological
Environmental
• Less bureaucratic hurdles
• Easy sourcing of coffee beans
• Cost control because of Govt. regulations
• Heavy coffee drinkers in South India
• Cheaper sourcing maintain quality
• Targets youth and middle class
• Affordable for a meeting place
• Marketing strategy based around technology
• Provide entertainment over Bluetooth &Wi-Fi
Political
• Limited production/Less pollution
• Use biodegradable plastics
Legal
• Ethical and based on customer delight
• Less consumer complaints and quick
customer service
MACRO
ANALYSIS

9. Critical Success
Factors
• Highly rated Taste & Quality of Products
• Value for Money Proposition
• Strong Youth Orientation
• Strong Brand Image
• Excellent Customer Service
• Strong base for Expansion & Growth

10. Product
•Wide range
•Frappe –
Summer
•Cappuccino -
Winter
•Merchandizing
Price
•Range from
Rs45 to Rs100
•Over the years
only minor
changes in
pricing policy
Place
•All locations
•Strategically
located outlets
•Coffee
machines in
college canteens
•Kiosks in offices
Promotio
n•Channel [V]’s
“Get Gorgeous”
Contest
•Tie up with
youth brands
•Khakee and
Main Hun Na
•Sales Promotion
Process
•Self service to
table service
•Complaints and
feedback
•Response time
People
•“People are hired
for what they
know but fired
for how they
behave”
•Motivation and
personal skills
Physical
Evidence•Logo in
“Dialogue Box”
•Architecture and
décor
•Coffee table
books
•Tag line : “A lot
can happen over
coffee”
MARKETING MIX

11. Threat of
new
entrants
(LOW)
Buyer’s
Power
(HIGH)
Supplier
’s Power
(LOW)
Threat of
Substitute
s
(HIGH)
Industry
Rivalry
(HIGH)
Porter’s
Five Forces
Model

12. Objectives & Issues:-
Threat of new entrants - Medium
•Presence of several established brands/hangout places/fast food joints
•High costs for starting a coffee shop chain
•Government policies promoting FDI (Starbucks)
Buyer’s Power - High
•Low switching cost
•Variety of products
•Variety of services
Supplier’s Power - Low
•Absence of cartelization
•Government regulations on prices of milk and coffee
•Backward integration
Threat of substitutes - High
•Aerated drinks, milk beverages, juice centers and tea shops
•Fast food joints like Pizza Hut, McDonalds etc
•Hangout places like Hukka parlours and Bistro
Industry Rivalry - High
•Local Coffee chains like Barista, Mochas
•Entry of international coffee chains such as Starbucks, Costa Coffee,
Gloria Jeans

13. Direct competitors
• Barista – This is the closest comp of CCD in
the Indian market. They target the same
class of upwardly mobile youth and young
professionals. But barista is always viewed as
a place to unwind after a hard day’s work or
an ideal setting for some business meetings.
• Café mocha-this aims at providing level of
experience to the customer is hard to
imitate. Inspired by morocco and turkey,
mocha offers not just coffee but also
sheeshas from Egypt and gourmet desserts.
Mocha itself calls a coffee shop for the soul.
Competitors
Analysis
Indirect competitors
• Eateries like Mc Donald’s and Haldiram’s
pose competition to cd as they are likely
attraction for customers to be drawn to a
consumer can well understand why he
should spend around RS 45 on a coffee
when he can get a burger and a coffee for
the same price at Mc Donald’s.
• Local tea joints and coffee shops like café
Nescafe – they are smaller places but
nevertheless target the same set of
consumers
Source:
https://www.vetr.com/research/NASDAQ:CCD/posts/73313
49842-IPO-Watch-Indias-Cafe-Coffee-Day
MARKET SHARE – 2014

14. STRENGTHS
• First-mover advantage
• Excellent brand name and visibility
• Largest retail chain of cafes
• ISO 9002 certified company
• Quality, service and taste
• Youth oriented brand
• USP of brand – Highly affordable brand
• Reduction in cost
WEAKNESS
• Lack of individual attention to loyal
customers
• Unavailability of fresh food
• Market penetration of coffee bars is 5%
• Weak brand image and lacks strength to
maintain brand loyalty
OPPORTUNITY
• Fastest growing industries in Asia
• Merchandising
• Tie ups with other companies for
promotion
• Tapping smaller market
• Cheaper varieties of coffee
THREAT
• Competition with Barista, Mochas, Gloria
Jeans, Costa Coffee & Starbucks
• Presence of other ‘Hangout’ locations
• Unorganized market
• Dependent on government commodity
rates
SWOT
ANALYSIS

15. Easy accessibility
There is a Cafe Coffee Day outlet in every major city in India and are easily
accessible.
Rural area locations
Customers in the smaller communities also enjoy good quality coffee and
snacks at affordable costs because the Cafe has set up outlets in the rural areas
in India.
Distributors
The coffee produced on the Cafe’s farms, are distributed through wholesalers
and retailers to customers who wish to use the coffee at home.
Distribution Channel
Strategy

16. CHIKMAGALUR
Outlets
Bangalore South India
Head Distributor
New Delhi North India
Head Distributor
Local Warehouse Local Warehouse
Outlets Outlets Outlets Outlets Outlets

17.  Main difficulties was to find the accuracy of data
 Research is restricted to the secondary data collection
 Observations were time consuming
 Data for present scenario was unavailable
Limitations

18. BIBLIOGRAPHY
1. Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha (2013). Marketing Management: A South Asian Perspective 14th Edition, Dorling Kindersley
(India) Pvt. Ltd.
2. Isita Lahiri, Sujit Kumar Ghosh (2012). Principles of Marketing and E – Commerce. Dorling Kindersley (India) Pvt. Ltd.
3. V S Ramaswamy, S Namakumari (2013). Marketing Management: Global Perspective 5th Edition, McGraw-Hill Education (India) Pvt. Ltd.
4. Leon G. Schiffman, Leslie Laser Kanuk, S. Ramesh Kumar (2010). 10th Edition, Consumer Behavior, Dorling Kindersley (India) Pvt. Ltd.
5. Warren J. Keegan, Naval K. Bhargava (2011). Global Marketing Management 7th Edition, Dorling Kindersley (India) Pvt. Ltd.
6. Cooper, D.R. and Schindler, P.S. (2011) Business research methods, 9th Edition, New Delhi:
7. Tata McGraw Hill Education Private Limited.
8. Saunders, M., Lewis, P. and Thornhill, A. (2011) Research methods for business students, 5th Edition, Noida: Dorling Kindersley (India) Pvt. Ltd.
9. Brewing Fresh Formulations (A Case Study Of Café Coffee Day) Published by Indian Streams Research Journal Vol. 3, Issue. 8 (September 2013)
10.Coffee Experience and Drivers of Satisfaction, Loyalty in a Coffee outlet- With special reference to "café coffee day.“ Published by Journal of Contemporary
Management Research Vol. 5, Issue 2 (September 2011)
11.Effect of Brand Personality Congruence on Brand Loyalty in CCD Outlets – A Structural Equation Modelling Approach Published by Mediterranean Journal of
Social Sciences Vol. 6, No. 6 S2 (November 2015)
12.A Study on Consumer Attitude Towards Café Coffee Day Published by Reflections Journal of Management Vol. 5 (January 2016)
13.India Food FOODS, BEVERAGES & INGREDIENTS DIGEST June / July 2010
14.http://www.ibef.org/exports/coffee-industry-in-india.aspx
15.http://trak.in/tags/business/2015/06/27/cafe-coffee-day-ipo-rs1150-cr/
16.http://www.cafecoffeeday.com/aboutus
17.http://www.wevio.com/research-and-analysis-articles/global-coffee-industry-facts-statistics-of-2014-2015/
18.http://www.india-briefing.com/news/indias-coffee-industry-9367.html/
19.http://in.investing.com/analysis/cafe-coffee-day-ipo---very-hot-coffee-3292
20.http://ipocentral.in/cafe-coffee-day-ipo-review-eligible-for-conglomerate-discount/
21.http://www.coffeeday.com/aboutus.html#overview-scroll
22.http://www.indianotes.com/Analysis/Cafe-Coffee-Day-IPO--Very-Hot-Coffee/197812/240/IO
23.http://businesstoday.intoday.in/story/cafe-coffee-day-in-promising-companies-list/1/18661.html
24.http://www.ico.org/monthly_coffee_trade_stats.asp
25.https://www.vetr.com/research/NASDAQ:CCD/posts/7331349842-IPO-Watch-Indias-Cafe-Coffee-Day

19. THANK YOU
a Lot can happen over coffee…