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Chetanas Bachelor of Management Studies

Subject : Strategic Management


: Caf Coffee Day

Group no. 3

Submitted to: Prof. Prasanna Sant


Gaurav Babel Prince Pandey Vaibhav Goregaonkar Karthik Nadar Girija Hirve Akshaya Surve

Roll no. 2103 2143 2118 2138 2123 2158

Caf Coffee Day is a division of India's largest coffee conglomerate, Amalgamated Bean Coffee Trading Company Ltd. (ABCTCL). ABCTCL grows coffee in its own estates of 10,000 acres (4047 ha). The land value of the plantations is US$250300 million. It is the largest producer of Arabica beans in Asia. Apart from this, the group also sources coffee from 11,000 small growers. ABCTCL is one of Indias leading coffee exporters with clients across USA, Europe and Japan. A 750 crore ISO 9002 certified company. First to launch the coffee bar concept in India. 1319 outlets all over India and still counting..

History :
It was in the golden soil of Chikmagalur that a traditional family owned a few acres of coffee estates, which yielded rich coffee beans. Soon Amalgamated Bean Coffee Trading Company Limited, popularly known as Coffee Day was formed. With a rich coffee growing tradition since 1875 behind it coupled with the opportunity that arose with the deregulation of the coffee board in the early nineties, Coffee Day began exporting coffee to the connoisseurs across USA, Europe & Japan. In the calendar year 2000, Coffee Day exported more than 27000 tonnes of coffee valued at US$ 60 m to these countries and, for the second time in its short career of 7 years retained the position as the largest coffee exporter of India. Coffee Day has a wide and professional network in the major coffee growing areas of the country comprising over 48 agents and 50 collecting depots. Coffee Day's two curing works at Chikmagalur and Hassan cure over 70,000 tons of coffee per annum, the largest in the country. Coffee Day has a well-equipped roasting unit catering to the specific requirement of the

consumers. The process is carried out under the control of experienced personnel to meet highest quality standards. The most modern technology available is used to maintain consistency and roast the coffee beans to the demanding specifications of the discerning coffee consumers. The first CCD outlet was set up on July 11, 1996, at Brigade Road, Bangalore, Karnataka. It was founded by V.G. Siddhartha.

Mission statement :
To be the best Caf chain by offering a world class coffee experience at affordable price.

Vision statement :
To be the only office for dialogue over a cup of coffee.

Important events :

Competitors :
Barista: Originally known as Barista, this coffeehouse chain in India was taken over by
Lavazza in 2007 and since then is known as Barista Lavazza. Barista was the fastest brand to make it to the list of Super brands and is ranked among the top 50 phenomena that changed India. With a menu that ranges over Mojitos, frappes, Lemonades, Ice teas, cold and hot coffee, sandwiches and wraps, salads, breakfast items, pastas, pizzas, soups, indulgent cakes, muffins, juices and snacks; one does have a tough time categorizing it as just another coffee shop. Costa Coffee: The second largest after Starbucks, Costa Coffee has about 1700 stores across 28 countries. Though it doesn't come as close to Starbucks in terms of numbers, it does better than other competitors. Opened in 1971 in UK by Italian brothers Sergio and Bruno Costa, it specializes in Italian coffee. Their biggest branch is in Dubai and can house about 320 people at one time.

Starbucks: With over 19,555 stores in 58 countries, no one serves bigger! The second
largest coffee house has about 1700 stores! Almost a household name for coffee lovers all over, Starbucks is all determined to have your eyes opened. Based in Seattle, Washington, Starbucks began with selling high quality coffee beans and equipments but now serves a wide range of products which include brewed coffee, espresso based hot drinks, hot and cold drinks, coffee beans, snacks, pastries, sandwiches and items that include mugs and tumblers. To know the impact, it is estimated that Starbucks sells close to 4 billion cups of coffee every year.

Market share:
Caf Coffee Day have a market share of 60%, while its biggest competitor Barista has a market share of 25%. Remaining 15% share is of other competitors.

In-house research:
Research shows that while the customers go to them for products, a substantial amount of their customers go there to hang out with friends The caf is also venue for business meetings (13%), celebrating special occassions (10%) or just plain timepass (17%).

Sex ratio and marital status:

Among the customers who visit Caf coffee day 52% are females and 48% are males. They are further classified into three categories. They are married, singles and others. There is a definite skew towards singles ,i.e., 69%. Married people are 28% and others are 3%.

Group sizes:
Maximum foot-falls are in group size varying from 3 to 5 people followed by people coming in groups of 2, a major part of which are couples. Group of 2 to 5 people have great share of 54% followed by group of twos- 21%, followed by singles- 18% and more than five- 7%.

a) Grows the coffee it serves in its cafes. Well-equipped roasting unit. The eatables catered by different vendors. Ice creams Cream Bell.

b) c)

Milk Amul. Snacks from local vendors. Sells merchandise trough its stores. Enjoys trust for quality, hygiene and consistency of food.


Affordable prices. Price range starts from Rs. 52 onwards. Only minor changes in the pricing policy due to changes in Government taxes.

Physical evidence:
Logo :
- Large font- Emphasis on the word Caf

- Red signifies Leadership and Passion - Swirl for purity of purpose and the feel of coffee Architecture and Dcor uses bright colours and interiors according to the youth. Designing of pamphlets posters and menu to attract the youth.

Ordering and delivery earlier was self service and now most of the coffee shops have waiters to take order and deliver at the table.

Emphasis on motivation and personal skills of the people. Friendly waiters and services. Employees follow international standards of hygiene, cleanliness and personal grooming. Reward schemes like employee of the month.

Prime factor for success- Located at every possible location where business can be generated. Caters to target market with strategically placed outlet.

Positioning and brand image

India leading coffee chain Caf Coffee Day has unveiled its strategy to strengthen its leadership position with an all new brand identity that syncs with its vision to be the friendly and stylish social hub Created by Landor Associates, a global brand consulting firm and developed from in-depth dialogue with customers, coffee lovers and stakeholders, the new change entails an all new 'smart' menu, changes in furniture design and placement, new uniforms, new cutlery and total caf rebranding, the company said

The company, which posted a turnover of around Rs 750 crore this year, is working towards revenues of $1 billion by 2015. The company has witnessed a 25 per cent year-on-year growth, Gupta added POSITIONING AND BRAND IMAGE Brought caf culture to India For the youth: Young (AT HEART) customers, young and friendly staff Highest distribution network Target middle and upper middle class Age group 15-29 Companies address needs by putting forth a value proposition, a set of benefits that they offer to customers to satisfy their needs. The intangible value proposition is made physical by an offering, which can be a combination of products, services information and experiences.

Original logo
The First Caf Coffee Day logo was a bright red cube with a green stroke above 'e' in 'Caf Coffee Day'. The word 'Caf' was made to appear dominant to indicate Caf Coffee Day's introduction of 'Caf culture' in India. The font used for 'Caf' is called SLURRY - the font looks as though the letters have congealed or coagulated out of liquid. The current logo includes a dialogue box which highlights the connection between 'coffee' and 'conversations.' This logo also reflects their current tag line, "A lot can happen over coffee."

Cafe formats:
CAF FORMATS Different caf formats: Music cafes, Books cafes, Highway cafes, Garden cafes. Cyber cafes Latest addition: Lounge cafes The company's lounge is a more premium format compared to its cafes. In the lounges, the beverage is paired over gourmet cuisine and not just over fast food. The cuisine in the lounge will be European-styled and enable consumers to customise their food items like bread, pizza, etc. High streets, premium malls and airports are the type of locations the company is identifying to set up the new lounge outlets.

Promotion :
Through SMS Valentine day promotion, &quote Caf Coffee Day Luv Zone" Through Television Held a contest around a very popular program on Zee English called Friends. They have tied up with Channel [V]& Get Gorgeous contest. Ticket sales: They were involved in WWE, Elton John, and Bryan Adams ticket sales

PROMOTION Tie-ups Liril, Airtel Friends. HDFC wanted to promote their debit card and they choose Caf Coffee Day. So 21 cafes have debit card machines. Association with movies Bas YunHi Khakee Main HoonNaa Socha Na Tha MujhseShaadiKarogi

Sales Promotion: Special 'Caf Citizen Card' PROMOTION 1) 2003- Levis launched a new range of low Rise Jeans through a campaign called '6' below' CCD displayed pop of levis in all its outlets during the campaign 2) 2004- they launched of Liril orange soap by HLL was conducted in cafe coffee day 3) 2004- TVS scooty tied up with CCD for events in the coffee bars and malls on valentines day in february 4) 2004- CCD was the official ground partners for the channel v get gorgeous contest.

RE-BRANDING: Earlier perceived as a place where intellectual meet Positioned itself as a coffee bar and has maintained that position for a long time now. CCD saw a latent market in youngsters For youngsters- CCD a fun place where one can go anytime of the day and have fun with friends. In 2002 CCD underwent a rebranding exercise. CCD spent INR 1.5 billion to redesign existing cafes (2009). RE-BRANDING OLD LOGO NEW LOGO Caf Coffee Day, the leading coffee chain has recently enhanced the customer-caf relationship with new brand initiatives. The changes includes an all new menu for in-house and take away dining, changes in ultra comfort furniture design and seating, new uniforms, cutlery, and total caf rebranding.

RE-BRANDING OLD LOGO NEW LOGO: The First Caf Coffee Day logo was a bright red cube with a green stroke above e in Caf Coffee Day. The word Caf was made to appear dominant to indicate Caf Coffee Days introduction of Caf culture in India. The font used for Caf is called S LURRY the font looks as though the letters have congealed or coagulated out of liquid. The current logo includes a

dialogue box which highlights the connection between 'coffee' and 'conversations.' This logo also reflects their current tag line, "A lot can happen over coffee."

SWOT Analysis:
Products are of extremely good quality and taste. Its youth oriented brand, hence huge potential since 40% of the population is below 20. It produces the coffee it serves hence reducing the cost. USP of brand is its considered a highly affordable brand.

The store ownership of the company might hinder in their expansion policies. Price of the products is relatively higher than Java Green and McDonalds. CCD cafes are small in size. Many of the CCD stores are incurring losses due to wrong site selection (National Highways).

Coffee caf industry is one of the fastest growing industries in Asia. Many 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. Changing lifestyle of youth, they like to spend time lounging. New products.

Competition with other coffee cafes like Costa Coffee, Barista and Mochas. Customer trends towards more healthy ways and away from caffeine. International players like Starbucks. New entrants and costs.

Competitive strategies:
CAFE Coffee Day (CCD) wants to become a global brand after its success in India. By 2012-13, CCD plans to be a big global chain both with organic growth and acquisitions. By the end of this year it will have 900 cafes and 2,500 by 2012-13. CCD already has its cafes in Austria and Pakistan and wants to set up cafes in Poland, Russia, Hungary, Dubai, Kuwait, China and Saudi Arabia. The company has received investment from Darby Templeton and Deutsche Bank to the tune of $100 million for expanding its network. In August 2008, CCD announced that leading international brand consultant Landor will help it to reinvigorate its brand and take it to the next level. Only the brand name and logo saying 'A lot can happen over coffee' will remain the same. CCD will now focus more on projecting a feeling of togetherness (friendship, romance or office meeting in an informal environment) and celebration which are critical core values. Accordingly the cafe ambience, the look and feel inside will be changed.

Values of Caf Coffee Day:

PRIDE- I take pride in my work and in my organization. RESPECT- I respect my customers, my subordinates, my peer and my superiors. INTEGRITY- I will show the highest level of integrity towards my work and my company under all circumstances. SELF-DISCIPLINE- I will imbibe and practice self-discipline in all my daily activities. MOTIVATION- I will always be motivated to give the best for my organization, my team and my customers.