SYNOPSIS

1) PROJECT INFORMATION:
Minor Project
Duration: 9 weeks
Commencement Date: 13/01/2014
Completion date: 07/03/2014

2) PROJECT TITLE- Role of Customer Relationship Management in Business Development
by Organized Coffee Shop Chains: A Comparative Study of Barista and Caf Coffee Day.

3) INTRODUCTION:
Coffee has been only moderately popular in India as compared to Chai (Hindi term for Tea),
however, there has been a sudden change in this trend with coffee becoming more and more
popular in recent times especially among the younger generation. The roadside Tea Shops have
been replaced by hip Organized Coffee Joints like Barista and Cafe Coffee Day. The coffee
industry of India is the sixth largest producer of coffee in the World, accounting for over four per
cent of world coffee production with the bulk of production taking place in its southern states.
There are many new entrants in the segment including Barista, Caf Coffee Day (CCD) and the
like. The key players in organized Coffee Retail are CCD, Barista, Costa Coffee, and Coffee
World. The organized coffee retail business in India is over Rs. 8 billion and the potential for coffee
retail outlets are nearly 3,000.

Barista and Caf Coffee Day are the two Coffee Shop Chains which brought a revolution in the
industry and transformed a mundane commodity into a recreation. They have shown immense
growth since their inception.

Barista was established in February 2000 by the Barista Coffee Company Limited. It is currently
owned by Lavazza. Hence, the name- Barista Lavazza. Barista was the fastest brand to make it on
the list of super brands and is ranked among the top 50 phenomena that changed India. It is seen as
a pioneer of Indian caf culture with its delivery of truly Italian coffee experience in a warm,
friendly and relaxed environment. Presently Barista operates in India, Sri Lanka and the UAE
(catering to 28 cities in India and 2 cities in UAE) with over 160 outlets and generating an annual
turnover of 160 crore.

Its immediate competitor- Caf Coffee Day was established in 1996 and has proliferated into the
largest organized retail caf chain in the country. It is a part of India's largest coffee conglomerate,
the Amalgamated Bean Coffee Trading Company. It is youth favorite hangout place. Caf Coffee
day sources coffee from 5000 acres of coffee estates, the 2nd largest in Asia, that is owned by a
sister concern, and from 11,000 small growers. It is one of Indias leading coffee exporters with
clients across USA, Europe and Japan. As of December 2013, there are 1534 outlets across 28
states of India. Revenues of CCD have touched Rs. 1200 crore.


The success stories of both the Coffee Houses can somewhat be attributed towards its Customer
Relationship Management. However, have they been able to maintain the same aura or have they
ebbed away with the emergence of new competitors? This project attempts to study the importance
of Customer Relationship Management in Business Development by Coffee Shop Chains.

In the first part, it tries to focus on the CRM initiatives of Barista and Caf Coffee Day to retain
the old customers and bring in the new ones.

This would be supported by a survey to know the Customer Satisfaction level in the second part.
Analysis would be made based on the primary data collected which would help in doing a
comparative study of Barista and CCD. At the end, suitable suggestions would be made as to what
else these coffee shop chains can do to retain its existing customers and attract new customers.

4) PROJECT OBJECTIVES:

To study the Customer Relationship Management as a
Business Development Strategy by Organized Coffee
Shop Chains especially Barista and Cafe Coffee Day.
To study the CRM initiatives taken by Barista and Caf
Coffee Day.
To do a comparative study of the CRM initiatives,
policies and processes of Barista and Cafe Coffee day.
To study the impact of the CRM initiatives of Barista
and Cafe Coffee Day on Customer satisfaction, thereby,
contributing to business growth.



















5) LITERATURE REVIEW:

Customer Relationship Management at Cafe Coffee Day

Babasab Patil (2012) in his paper "To Improve Sales at Cafe Coffee Day" has focused
on understanding the importance of Customer Relationship Management in Cafe'
Coffee Day. He found out that age group between 20-25 visits CCD more and 59% of
them visit CCD for refreshment purpose. Therefore, CRM becomes all the more
important in CCD's business development to retain their customers and attract the new
ones. Many of the customers are influenced by CCD's service, price, hospitality,
promos and relaxing environment. 84% of respondents like to spend their special
moments at Cafe' Coffee Day implying success of CCD's Customer Relationship
Management. Although, there is still a large scope of improvement.

Sree Rama Rao (20110) in his paper "Cafe Coffee Day" has explained few CRM
initiatives taken up by Cafe Coffee Day- The company has taken the initiative of
retailing coffee and tea through vending machines, at locations of convenience to the
customer. The coffee day vending machines offer authentic filter coffee and special
Assam tea. It has launched a customer loyalty program in its cafes across the country.
The caf citizens program rewards regular customers of CCD, who bill a minimum
amount of Rs 100 on a single visit. The program entitles members to a 10 percent
discount on all food and beverage bills a year, from the mouth of membership.
Members also receive surprise gifts from India times shopping when they reach a total
billing amount of Rs 2,000, Rs 5,000 and Rs 10,000. These initiatives have delighted
the customers. This has in turn helped CCD to fulfill its aim of attracting 500-800
customers daily.

Customer Relationship Management of Hotels and Food Chain Industry

Ahmad, Tauseef; Jawabreh, Omar A. A.; Al Afeef, Mahmoud Irsheid; Almomani,
Alaa (2012) in their paper Impact of Customer Relationship Management of Hotel (a
Case Study Umaid Bhwan) have focused on the impact of CRM on hotels
customers. They have also focused on the factors that influence the Customer
Relationship Management of hotels in India, especially Umaid Bhwan. They found
out that the impact of implementing Customer Relationship Management to increase
the customer trust in Umaid Bhwan hotel is average. Good skills of employees help in
managing customer relationship in hotel industry. Customers feel confident dealing
with Umaid Bhwan hotel. The information hotel provides is accurate and the hotel
always exerts good efforts to fulfill its promise. All this makes for good Customer
Relationship Management, thereby, leading to Customer Satisfaction.


Andrea Mcllroy and Shirley Barnett (2000) in their paper Building Customer
Relationships: do discount cards work have tried to identify the relationship between
Customer Relationship Management, Customer Satisfaction and Customer Retention.
They have also tried to understand if loyalty schemes and discount cards work in
building effective customer relationship. A New Zealand hotel case study is presented
which describes customer reactions to a discount card promotion. It was found that
customers who bought the card were highly satisfied, but their commitment towards
the company was low. However, in order to succeed they need to develop loyalty
programmes for customers support to the company.

Customer Relationship Management for Coffee Shop Chains

Pratima Shukla, Preyal Desai and Nikunj Thakkar (2013) in their research paper "The
Impact of Service Quality on Customer Loyalty towards Organized Coffee Retailers in
Ahmedabad" have studied the importance of CRM for Organized Coffee Retailers,
particularly focusing on the factor- Service Quality. They observed that in keeping
with the global coffee culture, purveyors in India have been offering the products in a
wide range of variants that include hot coffee, cold coffee, coffee add ons, powder
coffee etc. The chains have also adopted state-of-the-art store formats and some even
offer Wi-Fi access to their customers. As a step forward, CCD has incorporated
formats like music cafs, book cafs, highway cafs, lounge cafs, garden cafs and
cyber cafs targeting a diversified customer profile. These cafs are increasingly
filling in a sorely felt gap by becoming a meeting place for people in the age group of
1529. India, with its huge young population flooded with disposable income, offers
an exciting and ideal market to coffee retailers. They found that majority of the
customers of CCD and Barista were satisfied on dimensions like Physical Aspects,
Personal Interaction and Policy. Further, Barista should focus on all the dimensions to
increase the satisfaction to increase the loyalty of their customers.



6) METHODOLOGY TO BE ADOPTED
Research Problem
Nowadays, companies are vying with each other to
garner bigger market share. For this, they are using
Customer Relationship Management as a strategic
tool for Business Development. However, few CRM
Strategies cannot guarantee success in retaining old
customers and bringing in the new ones. This project
aims to study the CRM initiatives taken up by
Organized Coffee Shop Chains in general and Barista
and CCD in particular and its impact on Customer
Satisfaction.


Research Design
Exploratory Research will be used to study the
Customer Relationship Management initiatives taken
up by Barista and Caf Coffee Day to increase
Customer Satisfaction.
Descriptive Research will be adopted to gather
feedback from customers of Barista and CCD.


Data Collection
Primary Data will be collected in a structured
questionnaire from the customers to meet the
objectives of the project. Secondary Data collected
from websites, research papers and such other
sources will be referred.

Sampling
Sample Design- Non Probability convenience
sampling will be used.
Sample Size- The sample size will be approximately
60 customers each of Barista and Caf Coffee Day
giving a total sample size of approximately 120.
Sampling Area- The area of research will be various
branches of Barista and Caf Coffee Day in Delhi.



Submitted to Submitted by

Prof. Ramesh Kumar Bagla Geetanjali Khanna