Coffee consumption in India has experienced a robust growth during the last decade with the establishment of cafes and other commercial buildings. The major reasons for this growth can be attributed to the increase in disposable income of the middle class and the urbanisation of society. Thus, it is observed that a trend of café culture is emerging in the country. According to research reports by CARE, it is estimated that domestic coffee consumption is to grow at a CAGR of six per cent during the year 2012-15.
Competitors
Café Coffee Day faces direct competition from Barista, Café Mocha, Costa Coffee, Beyond Coffee, Gloria Jean’s, Minerva Coffee Shop and indirect competition from McDonalds and Haldirams. But a new global competitor Starbucks has entered into the premium segment of the café market which has already opened 22 outlets across the country within 20 months of its opening. It plans to open 50 outlets by the end of 2013.
Product: Starbucks has Indian food items or snacks in their menu taking care of Indian eating habits. Café Coffee Day should go ahead and revise their menu. The menu has been the same for long. New food items should be introduced taking care of the interests of the target segment. They should also offer coffee in different cup sizes. They should take care in personalisation of the coffee as in take inputs from the customer and prepare the coffee according to their requirements. It is rated highly in terms of taste and quality of products according to research reports. As they grow their beans, they have huge potential to attract customers based on taste and quality. They should also open counters for buying products such as mugs, coffee beans, personalized gift items and instant photographs of the customers.
Price: Cafe Coffee Day kiosks should be promoted under a different brand name so that the CCD brand name doesn’t get diluted. Prices should be similar to those at similar kiosk-operating vendors such as Nescafe and local players
Cafe Coffee Day cafes should continue to price products based on their current pricing strategy, targeting the middle and upper middle classes
CCD Lounge should be positioned as a premium brand, directly competing with Starbucks, not only in terms of ambience and positioning, but also in terms of the 'theatre & romance' and the pricing of the food and beverages
Place: If CCD has to maintain or expand its share in the premium segment; it has to strategically choose locations where it can cater to this segment. Even, if it does not open CCD lounge at premium location, but simply plans to open a Café Coffee Day store, it should carefully chose the locations as wrong sites may dilute the brand image. Favourable sites are international airports, malls with high-end brands, hotels, corporate campuses, educational institutions. Even these options should be well researched and planned before opening.
Promotion: CCD is considered to be value for money and has a strong youth orientation. But it has a weak brand image. Due to its wide distribution of outlets and wrong selection of sites, the brand image has been diluted. Thus the primary task is to develop a clear brand image which is possible with appropriate promotional activities. CCD can opt for a brand ambassador to which the youth segment can relate to. The brand ambassador should have such personality that would connect the brand image with the young audience.
Recommendations
Café Coffee Day should provide promotional space for its partners with the use of clever collaborations, and not printed advertisements and posters everywhere.
The main focus should be on the customer experience, so the ambience and décor should be revamped to enhance the premium stature of the store.
Customer engagement should be stressed upon. Card games, Wifi and other group involvement activities should be made available.
To improve the quality of service, CCD should look upon the recruitment, selection and training policies of the staff.
( Kanika Orea and Aviral Roy are pursuing PGP in management from IIM Ahmedabad.)