OFFER ANALYSIS & COMPETITORS OFFER ANALYSIS

Caf Coffee Day

A PROJECT REPORT SUBMITTED AS A PART OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

SUBMITED BY Neha Sharma 11020441167 Marketing (A-60) MBA 2011-13

Under the Guidance of

Project Guide Mr. Komal Chopra Project Mentor Mrs. Swarnali Roy Senior Marketing head Marketing dept swarnali.roy@cafecoffeeday.com 9819318338

SYMBIOSIS INSTITUTE OF MANAGEMENT STUDIES (SIMS) (CONSTIUENT OF SYMBIOSIS INTERNATIONAL UNIVERSITY)

July 2012

EXECUTIVE SUMMARY

This report discusses about the current scenario in food and beverage industry and based on the market research about customer expectations. It will propose offers for the future recommendations. The market size of Caf is going to be US $1 billion 2017 in India. Today the market leader of cafs is Caf Coffee Day with overall of 1320 caf all across India. The competition is increasing day by day and to compete with competitors the best way is to indulge the customers into various activities offered by the cafs. This report takes insights from the customers about the current offers in the market, both in food and beverages. All the fast food chains like McDonalds, KFC, and Pizza hut were visited to gather information about the current offers. Same way all the competitors of Caf coffee day like Barista and Costa Coffee were visited to know about their offers. Customers were also interviewed on the current offers of CCD and they were asked to give a feedback on the past offers. After this a questionnaire was prepared to know about the customer expectations and their desire to visit the caf. Customers were interviewed and insights were taken. The best offers are discounts and combos. These offers save money. In the Indian F&B market where there is a cut throat competition in prices discounts and combos are the best way to attract more and more customers. Innovativeness in terms of food items or activity is another way to engage customers and to maintain the footfall. This report summarizes on proposed offers and gratifications for the customers. These offers are solely based on the customer preferences.

CERTIFICATE

This is to certify that Mr. /Ms Neha Sharma PRN no. 11020441167 has completed his project report on the topic Offer Analysis and Competitors Offer Analysis under my guidance.

Prof. Komal Chopra Signature Date

DECLARATION

I hereby declare that the project entitled Offer Analysis and Guest insight about offers submitted for the MBA Degree is my Original work and the project has not formed the basis for the award of any degree, associate ship, fellowship or any other similar titles.

Neha Sharma Signature of the Student: Place: Pune Date:

ACKNOWLEDGEMENTS

I would like to sincerely thank Mrs. Swarnali Roy, Senior Manager Marketing at CCD Delhi for his guidance and support during the completion of this project. I would like to extend my thanks to Mr. Mohit Panwar, Assistant Manager, CCD Delhi for his untiring patience and small words of encouragement which meant so much for me. I am thankful to Prof Komal Chopra for having given me the guidance and arming me with the necessary tools that saw me through this critical phase of the course. Last but not the least I would like to thank my family and fellow interns at CCD for supporting me throughout the internship.

Table of Content
S. No. 1 2 3 4 5 7 8 Chapter Introduction Objective Methodology Analysis and results Recommendations Bibliography Annexure Pg. No. 1 2 3 5 20 21 22

List of tables
S. Tables No. 1 Table 1: General information of respondents. 2 3 4 5 6 7 8 9 10 11 Table 2: Frequency of visits in a month. Table 3: Offer received by customer from caf in past Pg. No. 5 7 7

Table4: : Attractiveness of offers based on the rating given 8 by customers Table 5: Most preferred beverage and food combos 9 Table 6: Attractiveness of Discounts Table 7: Best Discount offers Table 8: Freebies Table 9: Purchase Linked offers Table 10: Offers on loyalty cards Table 11: CCD offer vouchers as gift/prizes 11 11 12 13 14 15

List of Figures
S. Figures No. 1 Figure 1: General information of respondents. 2 3 4 5 6 7 8 9 10 11 Figure 2: Frequency of visits in a month. Figure 3: Offer received by customer from caf in past Pg. No. 6 7 8

Figure 4: : Attractiveness of offers based on the rating given 10 by customers Figure 5: Most preferred beverage and food combos 10 Figure 6: Attractiveness of Discounts Figure 7: Best Discount offers Figure 8: Freebies Figure 9: Purchase Linked offers Figure 10: Offers on loyalty cards Figure 11: CCD offer vouchers as gift/prizes 11 12 13 14 15 16

INTRODUCTION Caf Coffee Day (C.C.D.) is Indias largest coffee conglomerate, the Amalgamated Bean Coffee Trading Company Limited (ABCTCL). Popularly known as Coffee Day was formed. Its origin lies in the golden soil of Chikmagalur that a traditional family owned a few acres of coffee estates, which yielded rich coffee beans. V.G.Siddhartha Hegde Founder & Chairman of Amalgamated Bean Coffee Trading Co. His family owns 10,500 acres of coffee plantation farms in Karnataka. Mr. K Ramakrishna is the marketing Head of C.C.D. Important events at CCD: Year Since 1875 Early 1990s Events Rich coffee growing tradition started Opportunity arose with the deregulation of the coffee board in Coffee Day began exporting coffee to the connoisseurs across USA, Europe & Japan C.C.D. was first set-up at Brigade Road in Bangalore Exported more than 27000 tonnes of coffee valued at US$ 60 m to countries like U.S.A., Europe & Japan and, for the second time in its short career of 7 years retained the position as the largest coffee exporter of India. C.C.D. owns & operates 213 cafes in all major cities of India C.C.D. expanded to 595 cafes in 100 cities of India, 3 in Vienna, 2 in Karachi & targets to expand till 950 cafes in a year from 2008 Earning revenue of US$45 million, jobs 5000 employees, owns 1016 cafes in 135 cities

1996 2000

2002 2008

2010

Mission: - To be the best Cafe chain by offering a world class coffee experience at affordable prices. Vision: - To be the only office for dialogue over a cup of coffee.

OBJECTIVE 1. To analyze the customer preferences of various offers with reference to coffee chains in Delhi 2. To understand guest needs and to take guest insight on proposed offers. CCD need to this research to enhance their offers as well as to beat the competition and remain the market leader in this segment of retail market. Since CCD is growing at a very high rate, it is essential to maintain the standard of the caf as well as to retain the customers, for this CCD need to study all the offers that are there in the market and attract their target group and then mould it and implement it according to the customer expectations. The objectives of this study to prepare a set of offers that meet customer expectations as well as increase the footfall in Caf coffee day. The first objective is to analyze the customer preferences of various offers in food and beverage industry. Market research of the current offers in the food and beverage industry, take the customer feedback and then analyze the data to get the information about the satisfaction level of the customer. Based on the research, the information gathered about the customer preferences and expectations prepare a set of offers for the targeted customers. And then order these offers on the basis of customer expectations. In the second objective, customer reviews the proposed offers and order them based on their preferences/likings. This will help to develop a concrete structured offers that can be implemented in Caf coffee day to achieve the objective of increase in footfall as well as to attract more customers and to convert guests to loyal customers.

METHODOLOGY Offer analysis includes all the prospects that customer wants in the offers. It is solely based on customers choice. Exhibit shows the recent trends. Selection of topic is done on the basis of the previous studies that are done in this field. a. Which offer attracts the most to the customers? b. Why it attracts? c. What better can be proposed to the customers Sampling Technique The quest ionnaires were given to the Customers of t he CCD as well as other Cafs customers to do the customer analysis as well. Sample Unit Sample units are nothing but the respondents covered during the process of collecting data for the purpose of research. The sampling units consisted of people who are the customers in the caf. Sample Size The sample size is the total number count of the number of total respondents covered for the research purpose. Total sample size =60 Male 30 Female-30 Sample size selected 60 because the qualitative interaction was with 40 people and remaining 20 was done through quantitative interaction over internet. Hypotheses: H0 Offers are a major driving factor to visit coffee chains In the pilot study, questionnaire administrated to 10 of the respondents. In the questionnaire, there are three open ended questions to know about the name, email id and contact number of the customers. There are twenty seven close ended questions to know about the satisfaction level of the customer in the cafe. A copy of the final questionnaire used is presented as Appendix An on page 17. Primary Data Primary data was collected through the administration of questionnaires to the sample units and conducting a pilot study to ascertain the worth of the questionnaire. Primary data source is the customers of the cafe. The data is been collected from customers of different caf to know about the satisfaction level of customers about the offer that varies from caf to cafe. They filled the survey and the data is compiled. Questionnaire Design
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Questionnaire Administration Scoring Procedure Pilot study Caf Visited Lavazza Barista Coffee Beans & tea Leaf Costa Coffee Caf Coffee Day & Barista and CCD Lounges McD and KFC

Secondary Data- Secondary data source is the internet and academic journal. The data collected is in the form of questionnaire. It is then compiled in the form of tables and after that charts and figures are used to make the study more clear. The data has been analyzed and presented in the form of tables and figures in chapter 4 results. Data collected from websites of Costa coffee, Coffee beans etc. Posters/Hoardings Advertisements on Televisions Newspaper and Magazine advertisements.

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ANALYSIS AND RESULTS Table 1: General Information of Respondents S.No 1 a) b) c) d) 2 a) b) 3 a) b) c) d) e) 4 a) b) c) General Information Age(in years) <18 years 18-25 years 25-35 years >35 years Number Percentage 1 46 13 00 2 76 22 0

Gender Female Male Occupation Student Doctor Engineer Businessman Others Socio Economic Status Students Just started working Already working

30 30 41 0 7 2 11 43 6 11

50 50 69 0 11 3 17 73.85 11.28 14.87

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Age
50 45 40 Number of Customers 35 30 25 20 15 10 5 0 <18 years 18-25 years 25-35 years 1 0 >35 years 46

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Gender
Male Female

50%

50%

Figure1: General information about the respondents Discussion: According to Table 1, majority of the respondents i.e. 76% were are in the Age group of 18-25 years; quite a few of the respondents i.e.22% were in the age group of 25-35 years while the remaining 2% were in the age group of less than 18 years. From the gender perspective, there is equality among males and females. Both are 50%. In terms of occupations, mostly respondents are students that are 69%. Remaining 11% are engineers working and 17% respondents fall into others category.

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Seeing the work experience, most of the respondents i.e. 73% had 0 years of work experience. 15% had a work experience while the remaining 11% had just started working. Table 2: Frequency of visiting Caf in a month Number of times Less than 5 times 5-10 times 10-12 times More than 12 times Number customers 37 17 4 2 of

Frequency of visits in a month

40 Number of Customers 35 30 25

20
15 10 5 0 Less than 5 5-10 times times 10-12 times More than 12 times Number of customers

Number of visits

Figure 2: Frequency of visits in a month Discussion: According to Table 2 and Figure 2, majority of the respondents (61%) visits the caf less than 5 times a month. 28% of respondents visits caf 5-10 times a month. These are regular customers of Caf Coffee Day. 6% of consumers visit caf 10-12 times a month and remaining 3% visits more than 12 times a month. Table 3: Offer received by customer from Caf in past Offer received Yes No Customers 28 32

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Customers

47% 53% Yes No

Figure 3: Offer received by customers in the past Discussion: According to table 3 and figure 3, 47% people said they have received an offer in past whereas majority of respondents that is 53% said no that they havent received any offer from the caf. The possible reasons can be low awareness about the offer may be because of lack of promotional activities. The other possible reason could be low attractiveness about the offer. People might not be interested in such offers.

Table 4: Attractiveness of offers Offer Purchase linked offers buy one get one Combos Discounts Freebies Attractiveness 5 3 1 2 4

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Attractiveness
6

5
Rating 4 3 2 1 0

5 4 3 2 1 Attractiveness Purchase buy one linked get one offers Combos Discounts Freebies

Types of Offers

Figure 4: Attractiveness of offers based on the rating given by customers Discussion: According to table 4 and figure 4, the attractiveness of offers depends on the rating given by the customers. Here 1 refers to most attractive offer and 5 refer to least attractive offer. According to the survey, Combos are the most attractive offers followed by discounts then BOGOs and then freebies and at last Purchase linked offers. The customers were provided with certain conditions under which they have ranked these offers. Table 5: Most preferred beverage and food combos Drink Cappuccino Caf Frappe Caf Latte Devil's own Kepi Nirvana Cool Blue Choc frappe Food Tandoori chicken Sandwich Smoked chicken Sandwich Tandoori paneer sandwich Chilli cheese toast Spinach 'N' Corn cheese sandwich chicken 65 Sandwich No. of customers 21 15 7 4 6 5 2 No. of Customers2 15 13 11 10 4 7

16

Drinks
25 No. of customers 20 15 10 5 0 21 15 7 6 5 2 No. of customers

Drinks

16 14 12 10 8 6 4 2 0

15
13

Food
11 10 7 4

No. of Customers

TandoorI Smoked Tandoori Chilli chicken chicken paneer cheese Sandwich Sandwich sandwich toast Food Items

Spinach chicken 'N' Corn 65 cheese Sandwich sandwich

Figure 5: Preferences of Beverages and Food Discussion: According to table 5 and figure 5, 35% people preferred to have cappuccino in their combos and 25% people would like to have caf frappe in their combos. 25% people would like to have Tandoori chicken sandwich in their combos. 23% customers would like to have smoked chicken sandwich in their combos whereas 20% customers (approx) want tandoori paneer sandwich. Preferred price band for combos are Rs 90-100 and 100-110, though it mostly depends on the types of product in the combos. The dominance is of items that are already the highest selling items in the CCD.

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Table 6: Attractiveness of Discounts Discounts 10-20% 20-30% 30-40% 40-50% 50-60% 60-70% 70-80% 80-90% 90-100% No. of customers 5 7 17 20 9 0 0 2 0

Discounts
25 No. of customers 20 15 10 5 0 5 7 17 20

9
2 No. of customers

Percentage of discounts

Figure 6: Attractiveness of discounts Discussion: According to table6 and figure 6, Minimum discount offered was 10%. 35% people will visit the caf for sure if they will get a discount between 40-50%. 30% people will visit the caf for sure if they will get a discount in the range of 30-40% Discount more than 50% works as delight for customers. Table 7: Best discount offers Type Flat discount- 15% off, 20% off, 30% off minimum billing purchased on the spot discounts(%age off of the total purchase) Number Customers 38 3 19 of

18

Best discount offers

40 35 30 25 20 15 10 5 0 38 No. of customers

19

3 Number of Customers

Types of discount offers

Figure 7: Best Discount offers Discussion: According to table 7 and figure 7, 63% preferred flat discount, they are evergreen. Customers interested in 15%, 20% discounts. Customers do not want to get bound in minimum billing purchased. 32% customers preferred on the spot discounts. They work as delights for customers. Minimum discount offered was 10%.

Table 8: Freebies Type Coupons Coffee Mugs t-shirts others(different types of coffee packets) Number of Customers 13 28 17 3

19

25

21
20

Number of Customers

15 10

13 9 7

10

Keyrings

Wrist bands

earings notepads

rings

Types of freebies

Figure 8: Freebies Discussion: According to table 8 and figure 8, 35% customers want CCD key rings as freebies. 21% customers preferred to have CCD rings as freebies. 16% customers preferred to have CCD sports wristbands and 15% customers preferred to have CCD earrings as freebies though it is female oriented choice. 12% customers want CCD notepads as freebies. Table 9: Purchase linked offers Purchase linked offers Coupons Coffee mugs t-shirts Different types of coffee packets No. of customers 13 28 17 3

20

30 25 No. of customers 20 15 10 5 0 Coupons

28

17 13

Coffee Mugs

t-shirts

others(different types of coffee packets)

Purchase linked

Figure 9: Purchase linked offers Discussion: According to table 9 and figure 9, 50% customers preferred to have deserts as purchased linked complimentary. Coffee mugs are the biggest attraction to customers. T-shirts and coupons are their secondary choices. T-shirts are mostly preferred by the regular customers. Coupons are evergreen attraction. Discounts attract everyone. Table 10: Offers on Loyalty Cards Offers Cash Back Discount from card Offers on card Number of customers 17 33 11

21

35 30 25 20 15 17

33

No. of customers

11 10

5
0 Cash Back Discount Offers on card fromm card

Offers on card

Figure 10: Offers on loyalty cards Discussion: According to table 10 and figure 10, 55% customers are interested in getting a discount from loyalty card. 25% people like cash back option in card. These are mostly regular customers. Customers like offers on card as they make them feel delighted. Table 11: CCD offer vouchers as gift/prizes Offer Vouchers Yes No Number of Customers 51 9

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CCD vouchers
60 No. of customers 50 40 30 20 10 0 Yes Customer response No 9 Number of Customers 51

Figure 11: CCD vouchers as gift/prizes Discussion: According to table 11 and figure 11, 85% customers are interested in getting CCD voucher as gift vouchers. Customers like to receive these vouchers from malls or in college fests/ Quizzes. 15% customers said no because they think CCD vouchers are not attractive. Very less discounts. Gratifications: Gratifications are the important marketing tool used to attract customers. To gratify the customers, his expectation should be met. Here is the list of gratification based on the customer preferences. 1. Spend Rs 25 extra get a chance to win holiday package for 2 people 2. Spend Rs 25 extra get a chance to meet the celebrity 3. Spend Rs 25 extra get a chance to meet the cricketer 4. Spend Rs 25 extra get a chance to win IPL tickets(front rows) 5. Spend Rs 25 extra get a chance to win a mobile phone/iphone 6. Spend Rs 25 extra and get a chance to win a gold coin free 7. Spend Rs 25 extra and get a chance to win a DigiCam. 8. Spend Rs 25 extra get a chance to win Air conditioner 9. Spend Rs 25 extra get a chance to win tablet 10. Spend Rs 25 extra get a chance to win laptops 11. Spend Rs 25 extra get a chance to win a Kitchen item 12. Spend Rs 25 extra get a chance to win a Cash of Rs 10 lakhs 13. Spend Rs 25 extra get a chance to win an autographed mug. 14. Spend Rs 25 extra and get a chance to win a gift voucher worth Rs 10000 of top apparel brand. 15. Spend Rs 25 extra and get a chance to win a gift voucher worth Rs 10000 of Addidas/Reebok/Puma
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16. Spend Rs 25 extra get a chance to win a car 17. Spend Rs 25 extra get a chance to win a bike/Scooty 18. Spend Rs 25 extra get a chance to win a watch 19. Spend Rs 25 extra get a chance to go to Disney land/Excel world 20. Spend Rs 25 extra get a chance to win a pendant from tanishq/geetanjali The choices of customers in the above mentioned gratifications are:

Watch Fast Track FCUK Timex

AC LG Hitachi Panasonic

Digi Cam Nikon Canon Sony

Television Sony Samsung

Autographs International Celebs Sachin Tendulkar Amitabh Bachchan

Celebrity ShahRukh Khan Katrina Kaif Shahid Kapoor Priyanka chopra

Cricketor Sachin Tendulkar Yuvraj MS dhoni Virat Kohli

Holiday Package International Switzerland, Pari s, London National Ooty, Shimla, M anali

Television Sony Samsung

Mobile phones Blackberry Samsung Note , galaxy, wave Apple Nokia

Phone Apple Dell Sony

Tablet Apple Samsung

Apparel Brands Zara Levis Shoppers stop Provogue

Bike Men Karizma, HD ,Pulsar Women Honda Pleasure, Sc ooty pep and Activa

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PART 2: COMPETITORS OFFERS

Direct Costa Coffee Lavazza Barista Coffee Beans & tea leaf Mocha Indian Caf house Java Green Gloria Jeans Starbucks(Upcoming) Dunkin donuts

Indirect Subway KFC McDonalds Nirulas Pizza Hut

Small Coffee Craze Downtown cafe

Recent offers by competitors:

CCD Caf moments Card is latest in CCD. Provide benefit to customers in terms of cash back and beverage free. Also keep them updated about the recent offers. Value added combos;

Costa Coffee Buy one chocolate box of Rs 300 and get the other one in Rs 100. Buy-One-Get-One Free offer on beverages on purchases made at Costa Coffee Outlets on Citibank Debit cards on Wednesdays. 20% off on Beverages on purchases made at Costa Coffee Outlets on Citibank Debit Cards on all days.

Barista Get loyalty card at Rs 250 and get 5% extra on the billing Buy one Cappuccino, get another absolutely Free* Just swipe with your Kotak Credit Card and get 100% off on another cappuccino.

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Food Offers: McDonalds: KFC: Online discount coupons Value added combos Online customer involvement McDonalds Burger Fries Coke Combos , Starts from Rs 55 ( 12 pm to 3 PM ). New customized Indian flavor of French fries . Value added combos. Mexican Spicy Burger Softy for Rs. 25

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RECOMMENDATIONS These are the following proposed offers: 1. COMBOS Tandoori Paneer Sandwich/Tandoori chicken & Lemon Ice Tea Caf Frappe with sandwiches(veg & non-veg) Caf Latte with Tandoori chicken/ Tandoori Smoked Chicken/ Tandoori Paneer Sandwich. Caf Latte with Chilli Cheese toast. Caf latte with Spinach N Corn cheese sandwich. Caf latte with Chicken 65 sandwich. 2. Buy one drink and you get choose other drink of the less or same price free 3. Buy a mug and design it, best mug will get the prices weekly/monthly 4. On the spot discounts of 10-15% to the customers. 5. Birthday offers- flat 30-40% off. 6. Cash back of 5% and Discounts of 10% both on CMCs. 7. Special discounts on anniversaries. 8. Monthly gifts to customer who spent the most in the caf for that month.(On selected cafs) 9. Spend for Rs 200 and get a gift voucher of Rs 50 with which you can buy merchandise from the following. 10. Coffee Flavor Identification

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BIBLIOGRAPHY 1. Author: Viveat Susan Pinto, Business standard, http://www.businessstandard.com/india/news/as-starbucks-launch-nears-rival-coffee-chains-getactive/480437/ 2. India Coffee Shops / Cafs Market Set to Cross US $1 Billion by 2017 Says TechSci Research, http://www.pr.com/press-release/425552 3. Author: Palllvi Shrivastava, http://pitchonnet.com/blog/2012/07/02/biscuits-seduceyouth-with-coffee-twist-a-cracker-move/ 4. Offers and site references, http://www.cafecoffeeday.com 5. Offers and site references, http://www.costacoffee.co.in 6. Offers and site references, http://www.barista.co.in

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ANNEXURE

Questionnaire: 1. Name. 2. Age a. Less than 18 years b. 18-25 years c. 25-35 years d. 35 years and above 3. Gender a. Male b. Female 4. Occupation a. Student b. Doctor c. Engineer d. Businessmen e. Others. 5. Contact number.. 6. Email id 7. How many times do you visit caf in a month? a. Less than 5 times b. 5-10 times c. 10-15 times d. 15 times or more 8. Have you ever received any offer in the caf? a. Yes b. No 9. Which offer do you like the most in the caf and why? 10. Please rate these offers based on attractiveness where 1 being most attractive and 5 being the least attractive. a. Purchase linked offers b. Buy one get one c. Freebies d. Combos e. Discounts 11. From the given food and beverage items, choose your favorite items. Food items: a. Tandoori Chicken Sandwich
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b. Tandoori Smoked Sandwich c. Tandoori Paneer Sandwich d. Chilly Cheese Toast e. Spinach N Corn Cheese Sandwich f. Chicken 65 Sandwich 12. What percentage of discount confirms your visit to the caf? 13. Which discount offer looks more attractive from the following? a. Flat discounts- 15%,20%, 30% off b. Minimum billing purchase c. On the spot discounts(%age off of the total billing) 14. What type of freebies you want to take away to your home? a. Key rings b. Wrist Bands c. Earrings d. Notepads e. Rings 15. What purchase linked offers attract you the most? a. Coupons b. Coffee mugs c. T-shirts d. Others(different types of coffee packets) 16. Would you like to receive CCD vouchers as gift/prize vouchers? a. Yes b. No 17. What types of offers would you like to receive on loyalty cards? a. Cash Back b. Discount from card c. Offers on card

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