“A lot can happen over coffee” holds true not only for the customers of Café Coffee Day.

While it took six years for CCD to open 35 outlets, the Starbucks-Tata alliance is planning to score a half-century in a little more than a year. The 24-outlet business is nearing the half-line mark in the race for 2013. But the real question is: Are CCDs and Starbucks running the same race?

The criterion is: How deep a hole do they dig in the pockets of the customers?

Well, if you plan to allocate Rs. X of your monthly budget in spending time with your spouse or partner in a coffee shop, you will end up seeing yourself holding a branded coffee mug 20 per cent lesser if you choose Starbucks over CCD.

One can say that these two players are in a weight-lifting competition under different weight categories.

Also, Starbucks is currently present only in Mumbai and the NCR whereas the number of CCD outlets is marching towards the 1,500 mark in 28 states across India. With CCD’s subsidised prices at educational institutions, it has a wider reach which it achieves due to economies of scale. Take-away kiosks in offices is another example of the same. A new entrant into India like Starbucks will not be able to target this segment (not, at least, in the near future) as it focuses on the premium market.

Interestingly, the CCD Lounge outlets seem to be targeting the same market segment. So, if I were the CEO of CCD, I would focus my marketing strategy on attracting the potential customers of Starbucks to my CCD Lounge as they are the ones who go to a coffee shop for the “experience”.

With as many as 80 items on the menu, CCD Lounge does know the Indian customer as compared to Starbucks with 30 items.

At present, there are only 33 premium segment CCD Lounges and this will be overtaken by Starbucks by the end of 2013. CCD should hence work on expanding and promoting CCD lounge outlets.

The market presence of the classic CCD will help in promoting the CCD Lounge outlets. Bangalore and the NCR have the taste of the CCD Lounges and hence the strategy would be to focus on other Tier I cities like Mumbai and Chennai in Stage I. If CCD can open 30 more Lounge outlets in these two cities by mid-2014 and promote the already existing Lounges, it can be a good counter measure for the entry of Starbucks.

One way of promotion would be to increase the visibility of ‘Café citizen card’ (which will give the customers a 10 per cent discount on every visit) through all the 1,500 CCD outlets. Increasing the number of “loyal” customers is the key criteria. Also, playing the “experience” card will have to be the primary task of marketing.

Although the analysis reveals that the profits each Lounge makes can be huge, the harvest reaped here is much bigger as we try to attract the customers of Starbucks to the Lounges.

Some experts may say that the entry of Starbucks will not affect CCD. But in a country like India “more is good”. Hence, opening more stores is the mantra to success.

As the economists promise a growth in urbanisation and spending power of Indians, “a lot more can happen over coffee”.