CAFÉ COFFEE

DAY

UNDER THE GUIDANCE OF

PROF. M. A. Rajasekhar (Raj)

SUBMITTED BY:

DEEPAK PRAKASH TEJALE (10SBCM0261)

GARGI KUMARI (10SBCM0550)

 ROHIT PANDEY (10SBCM0467)

INTRODUCTION:-

Cafe Coffee Day is a division of India's largest coffee conglomerate, Amalgamated Bean Coffee
Trading Company Ltd. (ABCTCL), popularly known as Coffee Day. This is a Rs. 300 crore ISO 9002
certified company. Its chief customers are in USA,Europe & Japan. Based in Chickmaglur, the
home of some of the best Indian Coffees, Coffee Day has its business spanning the entire gamut
of coffee consumption in India. Its different divisions include:
Coffee Day Fresh n Ground (354 Coffee bean and powder retail outlets)
Coffee Day Xpress (341 Coffee Day Kiosk)
Coffee Day Take away (7000 Vending Machines)
Coffee Day Exports
Café Coffee Day
Coffee Day Perfect (FMCG Packaged Coffee) division
Café Coffee Day (CCD) pioneered the café concept in India in 1996 by opening its first café at
Brigade Road in Bangalore. Till about the late 1990’s coffee drinking in India was restricted to
the intellectual, the South Indian traditionalist and the five star coffee shop visitor. As the pure
(as opposed to instant coffee) coffee café culture in neighboring international markets grew,
the need for a relaxed and fun “hangout” for the emerging urban youth in the country was
clearly seen. Recognizing the potential that lay ahead on the horizon, Café Coffee Day
embarked on a dynamic journey to become a large organized retail café chain with a distinct
brand identity of its own.

Coffee Market in India

Non Traditional coffee Market

Grows 4 % of world coffee
Consumes 30% of coffee produced
Coffee culture unknown until late 1990

CAFÉ COFFEE DAY IN THE PAST 12 YEARS:

1996 2001
cafe coffee day
1st café in 14 cafés in 6 cities

2008
Near Future
607 cafés across
Expanding to
98
Middle East,
cities, and in
POSITIONING:

Café Coffee Day, at its inception in 1996 was the vanguard of a café culture in India. At a time
when the country was growing well economically and young India enjoyed higher spending
power, CCD as it is popularly known, started to set up the first retail chain of coffee bars. It
broke new ground in 1999 when the entire market grew phenomenally with the entry of new
players. From the beginning, it positioned itself as being a coffee bar and has maintained that
positioning for a long time now. For a consumer, CCD represents a “fun place” where one can
go with a whole bunch of friends at any time of the day and have a good time, over coffee. In
2002, Café Coffee Day underwent a rebranding exercise through a change in its logo. The earlier
logo was a simple red square with a white streak running across, and ‘Coffee Day’ written at the
bottom. At this stage, CCD was still perceived as a South Indian coffee joint similar to the
Coffee House in Kolkata, a place where intellectuals meet and spend their time discussing issues.
CCD saw a latent market in youngsters, who were increasingly looking for a place to spend time
with friends and have fun. It then created an umbrella mother brand, Coffee Day and four sub
brands to represent the various activities. The logo then incorporated red, white and green colors,
a larger font and emphasis on the word ‘Café’. According to the company, red signifies
leadership and passion and the white swirl stands for purity of purpose and the feel of coffee.
The new color green endorsed the long heritage of CCD in growing coffee. Café Coffee Day is
known to experiment with different café formats. They have been:
 Music cafés
Books cafés
Highway cafés
Lounge cafés
Garden cafés
Cyber cafés
The most recent addition has been lounge cafes. These cater to a more niche segment than the
general consumer segment of CCD. The age group of 20-29 would be more able to afford a
lounge setting than the group of 15-19.

MARKETING MIX:
Product:
Café Coffee Day product mix constitutes a wide range of products that appeal primarily to
Indian coffee and snack lovers. Products have a decided Indian taste to it – be it food or coffee.
Most of the eatables have been adopted to meet the Indian taste buds like samosa, biryani,
masala sandwich, tikka sandwich etc. Thus they have been trying to capture the Indian taste
along with classic coffee. The best selling item in summer is frappe, which is coffee and ice
cream blended together. The young people favor it. In winter it is cappuccino. Their
merchandising includes funky stuff like t-shirts, caps etc.

Price:

Considering that Café Coffee Day knows its major customer lies in the bracket of 15- 29, it has
tried to derive a policy whereby it can satisfy all its customers. The price for a cup of coffee
ranges from Rs.45 to Rs 80. From the time it first started its operations, there has been only
minor changes in the pricing policy of Café Coffee Day. The changes have been more due to the
government taxes than anything else.
Place:
The strategy CCD has adapted is to place a cafe in every possible location where some business
can be generated. This is a prime factor in determining the success of a retail chain. Café Coffee
Day looks to cater to their target market with strategically located outlets.

Their outlets are generally located in High Street/ Family Entertainment Centers, gas stations,
near Colleges etc.

Promotion:
CCD is involved in all the areas of serious consumer passion like:

Television: Café Coffee Day held a contest around a very popular program on Zee English called
Friends. All the six lead characters are shown often visiting a coffee shop. They have tied up
with Channel [V]‘s Get Gorgeous contest.

Tie-ups: Besides that Café Coffee Day also tie up lot of the youth brands. So they have a contest
going on with Levis, another one with Scooty, Liril, latest one with AirtelFriends.

Association with movies: CCD can be seen in movies like Khakhee and Mai Hoon Na

Sales Promotion: Cafe Coffee Day uses special ‘Café Citizen Card’ for rewarding Café Coffee
Day’s customers. It is a loyalty program to gain new customers and retain the existing ones.

Process:
The ordering and delivery process in CCD was earlier based on self- service. But now in most its
coffee shops the waiter comes and takes away the order and delivers the order on table.
Physical evidence:
a) Logo, image, brand: Café Coffee Day has used bright red and green colors in its logo. RED
stands for leadership, vitality, passion for coffee. The GREEN stroke harks back the coffee
plantations that they own. Cafe is noticeably larger in the logo to denote that Café Coffee Day
pioneered the cafe concept in India way back in 1996.The font looks as though the letters have
congealed out of a liquid.

b) Architecture and Decor: Largely wood and granite based interior with young colors of today,
like lime green, yellow, orange, and purple predominate.

c) Literature: The literature provided by Café Coffee Day is indicative of its youthful image. The
menus, posters, pamphlets are all designed to attract young and young at heart

People: People at Café Coffee Day believe that “People are hired for what they know but fired
for how they behave”. Motivation and personal skill are laid emphasize upon. Their employees
are like friend to the customer but at the same time they know about the international standards
of hygiene and cleanliness and personal grooming.

ADVERTISING, SALES PROMOTION AND SEGMENTATION

STRATEGY

Café Coffee Day does not look at mass media as a viable area of advertising or marketing spend.
CCD is advertised through barter deals with other brands for ground events

BELOW-THE-LINE ACTIVITIES:

2003- Levi’s launched a new range of Low Rise jeans through a campaign
called ‘6” below’. CCD displayed POPs of Levi’s in all its outlets during the
 Campaign.
2004- The launch of Liril Orange soap by HLL was conducted in Café Coffee
Day.
2004- TVS Scooty tied up with CCD for events in the coffee bars and at malls
on Valentine’s Day in February.
2004- CCD was the official ground partner for the Channel V Get Gorgeous
Contest

IN-FILM ADVERTISEMENTS:

Some Telegu and Tamil films with prominent brand placement Hindi films- It started with Bas
Yun Hi and then conscious advertisement decisions were made for Khakee, Main Hoon Na,
Kyun Ho Gaya Na and Mujhse Shaadi Karoge. All these movies were targeted at young movie-
goers, teenagers and people looking for light-hearted entertainment. These are much the same
kind of people who are likely to visit Café Coffee Day. Serials like Kahani Ghar Ghar Kii, but
there are no important tie-ups with such entities.

SALES PROMOTIONS:

Merchandising- Every CCD stocks merchandise ranging from coffee mugs, T-shirts,
caps, bags, coffee filters, mints, different flavors of coffee powders, tea and cream,
wafers and biscotti’s. It also merchandises promotional materials for other brands it
associates with. When some brands are conducting events for which passes are
distributed or movie premiere tickets are given out, CCD is an important hub for these
activities as most of the target market.
CCD’s Guide to Active Holidays- It is a travel guide focusing on adventure sports and is
available in the CCD outlets, for people seeking escapade from monotonous life.
Café Beat- An in-house magazine which gives the entire low-down on what’s happening
in CCD outlets across the world. It describes experiences of customers, celebrations in
CCDs, and covers youth-centric topics like movies, music, travel, lifestyle, e-dating,
books and careers. Around 38% of CCD goers read Café Beat and some carry it back
with them.
 CCD has now tied up with World Space and Micro sense to provide satellite connectivity
in its outlets.

SEGMENTATION STRATEGY:
Café Coffee Day has its main consumer base in the age group of 15-29 years. Its customers are
mainly middle class and upper middle class youth who are upwardly mobile. From the market,
CCD seeks to target not just the youth but anyone who is “young at heart”. More than 10% of
their customers are above 35 years of age. The evidence of the connect CCD has been able to
make, particularly among the youth, comes from the findings of Brand Equity's Most Trusted
Brands 2008 survey. In the food services category, CCD ranks No 2, while McDonald’s stands at
No. 3 and Barista lags at No 5. The graph below indicates official figures for the type of
consumers of CCD. We can clearly see that its most profitable segment is the 20-24 age brackets.
These customers can afford to visit CCD on a regular basis and have a habit-forming attitude
towards CCD.
PRODUCT ANALYSIS
Café Coffee Day has different café formats across different cites. They can be categorized into
Music Cafés, Book Cafés, Highway cafés, Lounge cafés, Garden cafes, and Cyber cafés. Every
format has a different feel to it. Also, Café Coffee Day changes or makes fresh additions to its
menu from time to time. This includes having specialty coffees from different countries, exotic
desserts and pina coladas. Since the target consumer is of an age where one constantly seeks
change, this makes sure that the consumer does not get bored with a repetitive style and seeks
new places to go to. Café Coffee Day has changed its interiors twice since inception. First,
during its rebranding in 2002, where it brought in big photographic wall mounts of coffee
experiences, and yellow chairs and marble tables. In 2006, it again changed its decor to cane
chairs to give the outlets a more causal feel. Café Coffee Day has hence constantly reinvented its
look to keep up with the ever-changing wants of its consumers.

GENERIC COMPETITION
DIRECT COMPETITORS:

Barista- This is the closest competitor to Café Coffee Day in the Indian market. They
target the same class of upwardly mobile youth and young professionals. But Barista is
often 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 a level of experience to the consumer this is hard to
imitate. Inspired by Morocco and Turkey, Mocha offers not just coffee but also sheeshas
from Egypt and gourmet desserts. Mocha calls itself ‘a coffee shop for the soul’.
Qwicky- Based mainly in Bangalore, Qwicky has a strong local hold in South India.
INDIRECT COMPETITORS:

Eateries like McDonald’s and Haldiram’s pose competition to CCD as they are likely
attractions for a consumer to be drawn to. A consumer can well contemplate why he
should spend around Rs. 45 on a coffee when he can get a burger and a coffee for the
same price at McDonald’s.
Local tea joints and coffee shops like Café Nescafe- They are smaller places but
nevertheless target the same set of consumers. Hence, CCD has to consider the threat a
shop like this could pose to it.

GLOBAL COMPETITORS:

Starbucks is planning to enter India shortly and would be stiff competition for even an
established brand like CCD.
Coffee bars in the market of the other country that Café Coffee Day is entering is also be
a factor CCD will have to plan for before entering a market
DISTRIBUTION STRATEGY
Today CCD has the largest network of cafes in India, with over 607 ‘Company Owned Company
Operated’ cafes across 98 cities. But they do not follow a franchising strategy. The channel
partner has no involvement in the daily operational activities of the Café in the retail space.
Neither would he have to invest in operational capital equipment or branding or marketing and
promotion of Café Coffee Day. CCD opted not to follow forward integration and outsourced its
distribution responsibility to other parties in 2003. As its reach spreads across India and it is now
exploring smaller towns, CCD would find it more expensive to maintain on its own. The private
players would procure raw materials like sugar and paper cups but coffee beans would still come
from Bangalore.

COMPETITIVE STRATEGIES OF CAFE COFFEE DAY

Café Coffee Day which follows a backward integration of the value chain procures coffee
beans from its base in Bangalore. This gives it a high sense of quality assurance and
guaranteed supply across its outlets as the same raw material is used in all outlets. But
Barista is a combination of imported coffee beans and beans from Tata coffee. This is a
relative disadvantage because if there is a discrepancy in the quality or supply, Barista
would have to consider alternatives and probably look for another supplier.
Similarly, the food items available in Café Coffee Day are obtained from local suppliers
whereas Barista’s food is catered by the Taj caterers. Café Coffee Day would hence, have
a lower-cost advantage.
The brand strength of Café Coffee Day in comparison to Qwicky’s and Café Nescafe is
far greater and its reach is on a countrywide scale. A consumer travelling across cities
would not find it too difficult to seek a Café Coffee Day outlet instead of deciding on
trying a Qwicky’s, which he is not accustomed to.
Café Coffee Day has an advantage of top-of-mind recall for coffee-shop-goers in India,
especially because it set the café ball rolling in the country.
 It is a place where a lot of young people can meet, chat, have fun and let their hair down,
rather than sit and sip a cup of coffee in prim and proper serenity. This is one of the main
factors for why it is chosen over places like Barista or Mocha.

MARKET EXPANSION:

Recently, Café Coffee Day entered a tie-up with the Ginger hotels of the Taj. This caters to
business executives and is on a Smart basics’ platform. The outlet would be open to all, and not
just the hotel's guests. The aim is to increase footfalls in Ginger and increase the reach of Café
Coffee Day. This way, CCD can reach out to another set of consumers, apart from the young
crowd it has mainly catered to.

Music Cafes: One can feel the fragrance of Coffee with their choice of music or video with the
help of Audio/Video Jukeboxes.

Book Cafes: Coffee experience will not be complete without a book, with a reading material;
one can enjoy the taste of coffee.

Highway Cafes: It is at NH-8, the Bangalore-Mysore Highway, and great ambience with snacks.

Lounge Cafes: The lounge format serves coffee-based products and other beverages. Including
the lounge format and a large chain of coffee bars the luxury of at Hauz Khas at Delhi and
southern avenue at Kolkata, Jubilee Hills at Hyderabad

Garden Cafe: At M.G.Road, Bangalore and also at GKII at New Delhi, available in the form of
pot coffee.
Lifestyle Cafés Café Coffee:

 Café Coffee Day has 760 cafés in 115 cities in India.

 Café coffee day has 6 cafés abroad, 4 in Vienna, 2 in Karachi
 Around 250,000 people visit the cafés everyday

This newly opened exclusive lounge also indulges in the art of brewing techniques
complemented by the right kind of food. Siphon, Pour-Over, French Press are the three different
types of brew that are included in the revamped menu as the range of distinct blends of coffee.
Commenting on the revamped menu, Ramachander Raman, head, Food and Beverages of Cafe
Coffee Day said, “We have introduced these new brewing techniques for those who want to
indulge in the enjoyment of tasting and brewing coffee.”

He also adds that unlike Cappuccino and Espresso, the coffee made out of these brewing
techniques is unique and is prepared easily. The coffee powder is finer and the aroma after
brewing is strong and truly exotic. He also recommends coffee without adding milk. “I would
recommend drinking black coffee prepared out of these techniques as the taste is strong and one
can differentiate between the brewing techniques. Among these techniques the easy one is the
Pour-Over. Similar to our tea bags, the coffee powder in these bags drips into the cup giving a
flavorful concoction. All the three techniques can be easily used by home-makers but the coffee
granules have to be finer to brew using these filters.” The menu also includes another brewing
technique called mix logy. A blend of flavors with coffee and unique spices gives you lip-
smacking Caffeine that quenches your thirst in this scorching heat. The lounge gives you a
totally relaxing and engaging experience that you can share with your dear-ones.

SUCCESS OF CAFÉ COFFEE DAY:

From where it stands today, with 595 cafés across 100 cities in India, three in Vienna, and two in
Karachi, this means opening more than one café a day -- and not just in India. Siddhartha has
strong global ambitions: He wants 50 of these cafés to be located outside India.

While this might appear to be a tall order, CCD's investors feel otherwise. They see enough
potential in the coffee retail market for CCD to ramp up even faster. According to Naresh
Malhotra, formerly CCD's chief executive officer and now a director at the venture capital firm
Sequoia Capital: "This space has enough potential for Coffee Day to open a café every 200 yards
in the country, within five minutes' walking distance of one another." Sequoia invested $20
million in ABC, one of India's largest integrated coffee conglomerates, two years ago.

Industry analysts estimate that fewer than 1,000 cafés make up India's organized space, but they
put the potential at around 5,000. The largest player after Coffee Day, Barista, has about 200
cafés. Java Green (around 75 cafés) and Mocha (around 25 cafés) are further behind. Venu
Madhav, head of operations at Café Coffee Day, has started quietly thinking about a farther-out
café target number for his team: 2,000.

The Coffee Day story is not just in its numbers, though. Coffee Day has been a pioneer.
According to Harish Bijoor, a visiting professor at the Indian School of Business (ISB) at
Hyderabad and CEO of Harish Bijoor Consults, "Coffee Day has brought about a paradigm shift
in the café space in India." Subroto Bagchi, co-founder of the IT and R&D services company
MindTree Consulting, and author of the book, The High Performance Entrepreneur, adds: "Café
Coffee Day has redefined the coffee experience; it has been a trendsetter in the café space.
Siddhartha has raised the coffee from a brew to an experience."