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    ABOUT CAF COFFEE DAY

    Caf Coffee Day is a division of India's largest coffee conglomerate,AmalgamatedBean Coffee Trading Company Ltd. (ABCTCL), popularly known as Coffee

    Day. Thisis a Rs. 300 crore ISO 9002 certified company. Its chief customers are inUSA,Europe & Japan. Based in Chickmaglur, the home of some of the bestIndianCoffees, Coffee Day has its business spanning the entire gamut of coffeeconsumption 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 Caf Coffee Day Coffee Day Perfect (FMCG Packaged Coffee) division

    Caf Coffee Day (CCD) pioneered the caf concept in India in 1996 byopening itsfirst caf at Brigade Road in Bangalore. Till about the late 1990s coffeedrinking inIndia was restricted to the intellectual, the South Indian traditionalist andthe five

    star coffee shop visitor. As the pure (as opposed to instant coffee) coffeecafculture in neighbouring international markets grew, the need for a relaxedand funhangout for the emerging urban youth in the country was clearly seen.Recognizing the potential that lay ahead on the horizon, Caf Coffee Dayembarkedon a dynamic journey to become a large organized retail caf chain with adistinctbrand identity of its own.

    POSITIONING

    Caf Coffee Day, at its inception in 1996 was the vanguard of a cafculture in India.At a time when the country was growing well economically and youngIndia enjoyedhigher spending power, CCD as it is popularly known, started to set up thefirstretail chain of coffee bars. It broke new ground in 1999 when the entire

    marketgrew phenomenally with the entry of new players.

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    From the beginning, it positioned itself as being a coffee bar and hasmaintainedthat positioning for a long time now. For a consumer, CCD represents afun placewhere one can go with a whole bunch of friends at any time of the day

    and have agood time, over coffee.In 2002, Caf Coffee Day underwent a rebranding exercise through achange in itslogo. The earlier logo was a simple red square with a white streak runningacross,and Coffee Day written at the bottom. At this stage, CCD was stillperceived as aSouth Indian coffee joint similar to the Coffee House in Kolkata, a placewhereintellectuals meet and spend their time discussing issues. CCD saw alatent marketin youngsters, who were increasingly looking for a place to spend timewith friendsand have fun. It then created an umbrella mother brand, Coffee Day andfour subbrandsto represent the various activities. The logo then incorporated red, whiteandgreen colours, a larger font and emphasis on the word Caf. According tothecompany, red signifies leadership and passion and the white swirl stands

    for purityof purpose and the feel of coffee. The new colour green endorsed the longheritageof CCD in growing coffee.

    Caf Coffee Day is known to experiment with different caf formats. Theyhavebeen: Music cafs Books cafs Highway cafs

    Lounge cafs Garden cafs Cyber cafs

    The most recent addition has been lounge cafes. These cater to a morenichesegment than the general consumer segment of CCD. The age group of20-29 wouldbe more able to afford a lounge setting than the group of 15-19.

    ADVERTISING, SALES PROMOTION AND SEGMENTATION

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    STRATEGY

    Caf Coffee Day does not look at mass media as a viable area ofadvertising ormarketing spend. CCD is advertised through barter deals with other

    brands forground events

    BELOW-THE-LINE ACTIVITIES: 2003- Levis launched a new range of Low Rise jeans through acampaigncalled 6 below. CCD displayed POPs of Levis in all its outlets during thecampaign. 2004- The launch of Liril Orange soap by HLL was conducted in CafCoffeeDay. 2004- TVS Scooty tied up with CCD for events in the coffee bars and atmallson Valentines Day in February. 2004- CCD was the official ground partner for the Channel V GetGorgeousContest

    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 andMujhse Shaadi Karoge.

    All these movies were targeted at young movie-goers, teenagers andpeople lookingfor light-hearted entertainment. These are much the same kind of peoplewho arelikely to visit Caf Coffee Day. Serials like Kahani Ghar Ghar Kii, but there are no important tie-ups withsuchentities.

    SALES PROMOTIONS: Merchandising- Every CCD stocks merchandise ranging from coffeemugs, Tshirts,caps, bags, coffee filters, mints, different flavours of coffee powders,tea and cream, wafers and biscottis. It also merchandises promotionalmaterials for other brands it associates with. When some brands areconducting events for which passes are distributed or movie premiereticketsare given out, CCD is an important hub for these activities as most of thetarget market.

    CCDs Guide to Active Holidays- It is a travel guide focusing on adventure

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    sports and is available in the CCD outlets, for people seeking escapadefrommonotonous life. Caf Beat- An in-house magazine which gives the entire low-down onwhats

    happening in CCD outlets across the world. It describes experiences ofcustomers, celebrations in CCDs, and covers youth-centric topics likemovies,music, travel, lifestyle, e-dating, books and careers. Around 38% of CCDgoers read Caf Beat and some carry it back with them. CCD has now tied up with WorldSpace and Microsense to providesatelliteconnectivity in its outlets.

    SEGMENTATION STRATEGY:Caf Coffee Day has its main consumer base in the age group of 15-29years. Itscustomers are mainly middle class and upper middle class youth who areupwardlymobile. From the market, CCD seeks to target not just the youth butanyone who isyoung at heart.

    PRODUCT ANALYSISCaf Coffee Day has different caf formats across different cites. They canbe

    categorized into Music Cafs, Book Cafs, Highway cafs, Lounge cafs,Gardencafs, and Cyber cafs. Every format has a different feel to it.Also, Caf Coffee Day changes or makes fresh additions to its menu fromtime totime. This includes having specialty coffees from different countries,exotic dessertsand pina coladas. Since the target consumer is of an age where oneconstantlyseeks change, this makes sure that the consumer does not get bored witha

    repetitive style and seeks new places to go to.Caf Coffee Day has changed its interiors twice since inception. First,during itsrebranding in 2002, where it brought in big photographic wall mounts ofcoffeeexperiences, and yellow chairs and marble tables. In 2006, it againchanged itsdcor to cane chairs to give the outlets a more causal feel. Caf CoffeeDay hashence constantly reinvented its look to keep up with the ever-changing

    wants of itsconsumers.

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    GENERIC COMPETITIONDIRECT COMPETITORS: Barista- This is the closest competitor to Caf Coffee Day in the Indianmarket. They target the same class of upwardly mobile youth and young

    professionals. But Barista is often viewed as a place to unwind after a harddays work or an ideal setting for some business meetings. Caf Mocha- This aims at providing a level of experience to theconsumerwhich is hard to imitate. Inspired by Morocco and Turkey, Mocha offers notjust coffee but also sheeshas from Egypt and gourmet desserts. Mochacallsitself a coffee shop for the soul.

    Java Green: Javagreen was started in 2003 as a chain of In-Store Cafswithin Reliance WebWorlds. After the formation of ADAG it has expandedinto other locations outside Reliance and operates over 100 cafesoperating within a host of retailers, food courts and corporate campuses.Among the big guys this seems to have the weakest patronage and lacksthe spark(read clear positioning, promotion or good products)

    INDIRECT COMPETITORS:

    Eateries like McDonalds and Haldirams pose competition to CCD as they

    arelikely attractions for a consumer to be drawn to. A consumer can wellcontemplate why he should spend around Rs. 45 on a coffee when he cangeta burger and a coffee for the same price at McDonalds. Local tea joints and coffee shops like Caf Nescafe- They are smallerplacesbut nevertheless target the same set of consumers. Hence, CCD has toconsider the threat a shop like this could pose to it.GLOBAL COMPETITORS: Starbucks is planning to enter India shortly and would be stiff

    competition foreven an established brand like CCD. Coffee bars in the market of the other country that Caf Coffee Day isentering is also be a factor CCD will have to plan for before entering amarket.

    DISTRIBUTION STRATEGYToday CCD has the largest network of cafes in India, with over 607CompanyOwned Company Operated cafes across 98 cities. But they do not follow a

    franchising strategy. The channel partner has no involvement in the daily

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    operational activities of the Caf in the retail space. Neither would hehave to investin operational capital equipment or branding or marketing and promotionof CafCoffee Day.

    CCD opted not to follow forward integration and outsourced its distributionresponsibility to other parties in 2003. As its reach spreads across Indiaand it isnow exploring smaller towns, CCD would find it more expensive tomaintain on itsown. The private players would procure raw materials like sugar andpaper cups butcoffee beans would still come from Bangalore.

    COMPETITIVE STRATEGIES OF CAF COFFEE DAY Caf Coffee Day which follows a backward integration of the value chainprocures coffee beans from its base in Bangalore. This gives it a highsense ofquality assurance and guaranteed supply across its outlets as the samerawmaterial is used in all outlets. But Barista is a combination of importedcoffee beansand beans from Tata coffee. This is a relative disadvantage because ifthere is adiscrepancy in the quality or supply, Barista would have to consideralternatives and

    probably look for another supplier. Similarly, the food items available in Caf Coffee Day are obtained fromlocalsuppliers whereas Baristas food is catered by the Taj caterers. CafCoffee Daywould hence, have a lower-cost advantage. The brand strength of Caf Coffee Day in comparison to Qwickys andCafNescafe is far greater and its reach is on a countrywide scale. A consumertravelling10

    across cities would not find it too difficult to seek a Caf Coffee Day outletinstead ofdeciding on trying a Qwickys, which he is not accustomed to. Caf Coffee Day has an advantage of top-of-mind recall for coffee-shop-goersin India, especially because it set the caf ball rolling in the country. It is a place where a lot of young people can meet, chat, have fun and lettheir hair down, rather than sit and sip a cup of coffee in prim and properserenity.This is one of the main factors for why it is chosen over places like Barista

    or Mocha.MARKET EXPANSION

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    Recently, Caf Coffee Day entered a tie-up with the Ginger hotels of theTaj. Thiscaters to business executives and is on a Smart basics platform. Theoutlet wouldbe open to all, and not just the hotel's guests. The aim is to increase

    footfalls inGinger and increase the reach of Caf Coffee Day. This way, CCD canreach out toanother set of consumers, apart from the young crowd it has mainly

    catered to.