Anshuman Final Project Change

University of
Mumbai
A
Project on
“COMPARATIVE ANALYSIS of
BARISTA & CAFÉ COFFEE DAY”
submitted by:-
ANSHUMAN SURESH KASERA
Roll no. 49
Batch
2009 – 2011
NCRD Sterling Institute of

Management Studies, Nerul
Comparative Analysis of Barista & Café Coffee Day
Certificate
This is to certify the project titled
“COMPARATIVE ANALYSIS OF
BARISTA AND CAFÉ COFEE DAY”
Submitted By
MR. ANSHUMAN SURESH KASERA
To NCRD Sterling Institute of Management Studies is in the
partial fulfillment of Requirements for the award of
Master in Management Studies during the Academic
year 2009 – 11. He has carried out the project under our
supervision and guidance.
(Dr. Maithi) (Prof. Doel

Mukharjee)
Director Project
Guide
2
Acknowledgement
I would like to take this opportunity to thank all who helped me in

the making of this project. This project has helped me to understand
the effects of advertisement on consumer. I would like to thank
Professor Doel Mukharjee, NCRD SIMS for providing me with
relevant guidelines for completion of the project.
Finally this acknowledgement would not be complete without
thanking all my respondents, faculties, and friends who have been
directly or indirectly involved in the project completion.
Anshuman Suresh Kasera

Marketing
MMS- II yr
3
Table of content:
Executive summary:
Retail industry in India
Food & Beverage Market in India
Transition of Cafes
Café Coffee Day
Barista
Effect of foreign players:
Suggestions and Recommendation
Conclusion
Bibliography
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1) Executive Summary
Indian consumer is a very interesting entity. The consumer in India is as
heterogeneous as the country itself is. The urban consumer contrasts with the
rural and the South Indian consumer with the North Indian. Further still, the
consumer in the metros militates with his usage and habit patterns. The Indian
consumer, is therefore very difficult to understand and very difficult to predict.
Tea and Coffee are the favourite drink in India especially tea. A quiet cafe
revolution is sweeping urban India with the explosion of coffee bars. That is
bad news for tea - still the favourite brew for a majority of Indians -, which has
been losing out to coffee in recent years.
India is one of the world's largest exporters of tea and one of its biggest
consumers. However, it is coffee drinking which is increasingly becoming a
statement of young and upwardly mobile Indians. Moreover, coffee bars, an
unheard of concept until a couple of years ago, are suddenly big business.
Coffee is slowly but surely substituting tea. There is also rise in the
consumption of coffee. The specialty coffee movement has gained much of its
momentum through the efforts of companies like Barista, Café Coffee Day
and Starbucks. In India CAFÉ COFFEE DAY and BARISTA are the most
popular and well-known cafés. The college crowd rates them as one of the
coolest hangouts. These companies sell similar product but their
positioning and target audience are very different from each other.
These players not only sell coffee and tea but also food and other
merchandise items. Despite of serving to different audience, these
players compete with themselves. Each player fights for its own share of
market. They try to differentiate themselves by the way of product or price or
promotion. However, they are also facing the competition from the foreign
players like Georgia, Starbucks etc. It would be interesting to see how the
companies differentiate and maintain their share in the market.
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2) Retail Industry In India
Accounting for over 8 per cent of the GDP in the West, retail business is the
largest private industry, ahead even of finance and engineering. Over 50 of
the Fortune 500 and about 25 of the Asian Top 200 companies are retailers.
Today, in some developed countries, retail businesses have shares as large

as 40 per cent of the market. For instance, in Thailand and Brazil the
organized retail business has grown at tremendous pace.
In contrast, the organized retail business in India is very small. This is despite
the fact that India is one of the biggest markets. Retail business contributes
around 10-11 per cent of GDP. It amounts to about $180 billion market and is
six times bigger than Thailand and four-five times bigger than that in South
Korea and Taiwan. India also has the largest number of retailers, about 12
million, though they are mostly small.
The challenges facing the organized retail industry in India:
• Competition from the unorganized sector. Traditional retailing has

established in India for some centuries. Most retail outlets are family-
owned and offering limited products and finance facilities.
• In contrast, players in the organized sector have big expenses to meet.
Organized retailing also has to cope with the middle class psychology
that the bigger and brighter sales outlet is, the more expensive it will
be.
Competition is growing in the retail business and super stores are being set
up, in the rural areas, customers are entirely at the mercy of retailers. With
rising income and changes in life style, demand for better products became
insistent.
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The retail scenario is one of the fastest growing industries in India over the
last couple of years. India retail sector comprises of organized retail and
unorganized retail sector. Traditionally the retail market in India was largely
unorganized; however with changing consumer preferences, organized retail
is gradually becoming popular. Unorganized retailing consists of small and
medium grocery store, medicine stores, subzi mandi, kirana stores, paan
shops etc.
More than 90% of retailing in India fall into the unorganized sector, the
organized sector is largely concentrated in big cities. Organized retail in India
is expected to grow 25-30 per cent yearly and is expected to increase from
Rs35, 000 crore in 2004-05 to Rs109, 000 crore ($24 billion) by 2010. The
total retail market, however, as indicated above will grow 20 per cent annually
from Rs 400,000 crore in 2002 to Rs 800,000 crore by 2011.
Big industrial houses, such as the TATAs, the RPG group, ITC, HLL, realizing
the potential of the retail business, are now scrambling for a place in this
segment. Over the last five years, these groups have set up a number of
chain stores. For instance, West Side by Tatas, Food world by RPG,
Shoppers' Stop (Rahejas), and so on.
Global developments in the retail industry, together with changing demand

patterns of the Indian consumer, have affected the retail industry format in
India too. This can be seen in the emerging Supermarkets, Hypermarkets,
Specialty stores and Malls in India.
The value that retail can add to the economy cannot be underestimated.
However, challenges that lie in implementing the change agenda required to
capture these benefits should also not be underestimated.
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Reason for the increase in the organized retailing in India:
• Rewriting the laws

• Restructuring the tax regime
• Accessing and investing significantly in infrastructure
This level of change is unlikely to be successful if carried out by any one

retailer. A concerted industry-wide effort and a partnership with the
government are required to achieve a number of these goals.
The crucial aspects to Retailing – the front end of manufacturing and

last-mile of supply chain need specialized skills, which will be
individually deliberated at length covering:
• Finance
• Technology
• Supply Chain Management
• Inventory Management
• Success and Survival
• VAT – The Advantage
Most single-format retailers have diversified successfully into multiple formats.

The move towards multi-category and multi-format outlets is diminishing the
scope of existing retailers to differentiate based on assortment or location
alone
Facts on Indian Retail sector
• Indian Retail sector is the fifth largest global retail destination.
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• India retail market is dominated by the unorganized sector.
• The top five companies in retail hold a combined market share of

less than 2%.
• The Indian retail market has been ranked by AT Kearney's eighth

annual Global Retail Development Index (GRDI), in 2009 as the most
attractive emerging market for investment in the retail sector.
• Currently the share of retail trade in India's GDP is around 12 per

cent, and is estimated to reach 22 per cent by 2010.
• According to Government of India estimate the retail sector is likely

to grow to a value of Rs. 2,00,000 crore (US$45 billion) and could yield
10 to 15 million retail jobs in the coming five years; currently this
industry employs 8% of the working population.
• India continues to be among the most attractive countries for global

retailers. According to the Department of Industrial Policy and
Promotion, approximately US$ 47.43 million was the amount of
Foreign Direct Investment (FDI) inflow as on September 2009, in
single-brand retail trading.
More than 80% of the retail sector in the country is concentrated in the large
cities. A study reveals that among the more than 20 locations, for organized
retail in India, Mumbai was found to be the most preferred location followed
closely by Bengaluru in the second position.
Key Players in Indian Retail Sector
AV Birla Group has a strong presence in apparel retail and owns

renowned brands like Allen Solly, Louis Phillipe, Trouser Town, Van
Heusen and Peter England. The company has investment plans to the
tune of Rs 8000 – 9000 crores till 2010.
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Trent is a subsidiary of the Tata group; it operates lifestyle retail chain,

book and music retail chain, consumer electronic chain etc. Westside, the
lifestyle retail chain registered a turnover of Rs 3.58 mn in 2006
Landmark Group invested Rs. 300 crores to expand Max chain, and Rs
100 crores on Citymax 3 star hotel chain. Lifestyle International is their
international brand business.
K Raheja Corp Group has a turnover of Rs 6.75 billion which is expected

to cross US$100 million mark by 2010. Segments include books, music
and gifts, apparel, entertainment etc.
Reliance has more than 300 Reliance Fresh stores; they have multiple
formats and their sale is expected to be Rs 90,000 crores ($20 billion) by
2009-10.
Pantaloon Retail has 450 stores across the country and revenue of over
Rs. 20 billion and is expected to touch 30 million by 2010. Segments
include Food & grocery, e-tailing, home solutions, consumer electronics,
entertainment, shoes, books, music & gifts, health & beauty care services.
Future Trends
• Lifestyle International, a division of Landmark Group, plans to have

more than 50 stores across India by 2012–13.
• Shoppers Stop has plans to invest Rs250 crore to open 15 new

supermarkets in the coming three years.
• Pantaloon Retail India (PRIL) plans to invest US$ 77.88 million this
fiscal to add up to existing 2.4 million sq ft retail space. PRIL intends to
set up 155 Big Bazaar stores by 2014, raising its total network to 275
stores.
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• Timex India will open another 52 stores by March 2011 at an

investment of US$ 1.3 million taking its total store count to 120. In the
first six months of the current fiscal ending September 30, 2009, the
company has recorded a net profit of US$ 1.2 million.
• Australia's Retail Food Group is planning to enter the Indian market

in 2010. It has plans to clock US$ 87 million revenue in five years. In
20 years they expect the India operations to be larger than the
Australia operations.
Industry experts predict that the next phase of growth in the retail sector
will emerge from the rural markets. By 2012 the rural retail market is
projected to have a total of more than 50 per cent market share. The
total number of shopping malls is expected to expand at a
compound annual growth rate of over 18.9 per cent by 2015.
According to market research report by RNCOS the Indian organized
retail market is estimated to reach US$ 50 billion by 2011.
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3) Food & Beverages Market In India
India ranks first in the world in production of cereals, livestock population and
milk. It is the second largest fruit and vegetable producer and is among the
top five producers of Rice, Wheat, Groundnuts, Tea, Coffee, Tobacco, Spices,
Sugar, and Oilseeds, yet India’s share in international food trade is a
minuscule 1.5%. Value addition to foods by processing is a mere 8% of total
production.
Organized food retailing industry is still at infancy stage with share less than 1
per cent of food retail market size in India. This is despite the fact that food is
the largest category in consumers spending basket. Indian consumers are
deprived of quality food products, variety and value-added services at the
retail end largely because of the highly fragmented nature of food retailing.
Organized food retail has the potential to bridge this gap - and herein lies the
opportunity.
The Indian food retail industry is of a highly fragmented nature and consumers
are deprived of quality food products. Organized food retail has the potential
to bridge this gap.
Organized retailing is also emerging as an important gateway for the sale of

food products. In Chennai, about 17 per cent of food sales flow through
supermarkets. In the metros, most women have shifted to supermarkets from
street corner grocers. The world of food retailing is witnessing a paradigm
shift that will have long-term implications for the way food retailing evolves in
emerging economies like India.
Retailers are looking to capture a larger share of consumer spending by

expanding their product portfolios. Increasing pressure on financial
performance is also prompting food retailers to look at high-margin categories,
which include non-food products and services. Retailers have also realized
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that they need to become multi-format if they are to expand their customer
base and gain a competitive edge.
Differentiation on the basis of value for money and value-added services will,
however, become increasingly important. Retailers across the world are
experiencing a wave of consolidation that is being driven by the desire for
economies of scale, saturation in domestic markets and the desire for access
to new markets.
In line with international trends, the Indian market has already seen organized
food retailers going multiform and multi-category with an increasing focus on
private labels. Consolidation is likely to be triggered by the entry of leading
Indian corporate and international retailers into the food-retail arena.
The share of spending on at-home food consumption has fallen from 90 per
cent to 80 per cent in the last five years between the top two socio-economic
strata. Significant spending on food and increasing out-of-home food
consumption represent opportunities for food retailers and food-service
companies.
India has the highest number of retail outlets in the world – 12 million outlets
with a total retail space of about 2 billion sq ft. Owing to this fragmentation, the
availability of retail space per capita in India is among the lowest in the world
– 2 sq. ft per capita compared with 19 sq ft in the US. Some 5 million of these
outlets engage in retail of food and food products. The degree of
fragmentation is much higher among food retailers than among nonfood
retailers. The majority of food and food products are retailed through
neighborhood kirana stores.
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The organized food retailing sector in India is on the verge of a boom with
almost all the big corporate houses including Tatas, Reliance, ITC Group,
Lohias-promoted Indo Rama, Mumbai-based RK Hospitality, Kishore Biyani
with his Big Bazaar, RPG group with its hypermarket and supermarket chain
eyeing the sector aggressively.
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4) Transition Of Cafes
Coffee remains in the outer periphery of interest in the minds of consumers.

Other aggressive beverages like tea and the colas of every hue have a
substantially higher degree of interest and of course advertising backing them.
Coffee consumption is down in the last four years. From a level of 55,000 tpa,
the numbers are down at 52,000 tpa today. Per capita consumption hover
around 52 gms. This signifies a measly 10 cups of coffee per Indian per year!
Branded coffee consumption is a small percentage of the total. Only 19 per

cent are branded and the rest is in loose forms. However, a significant
increase in consumption in the branded segment anticipated. This is going to
be spurred by the liquid coffee cafes and of course, the inroads foreign brands
will make in the domestic market soon.
Liquid coffee bars and vending machines are going to spur consumption on in
the country for coffee. These are going to be front-ended efforts that will make
coffee that much more consumer-friendly and will make the beverage
accessible at arms length reach and available at the end of a desire.
It is expected to have 60,000 coffee vending machines in the country in the

next three years and expect to see at least 4000 Cafes across the country in
the next five years.
The market for vending products in India is opening up. Towards the end of
the review period, with organized retailing coming in, consumers started
believing in brand names. Vending products through machines started not
only for coffee and tea, but also for soft drinks, chocolate confectionery and
magazines, amongst others. The total strength of vending machines in the
country is approximately about 60,000 machines by the end of 2004, which
includes a large number of unbranded machines too.
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Coffee pubs and cafes mushroom throughout India, with vending machines
also on the rise. Over the review period, there was a mushrooming of coffee
pubs and cafes across regions, and across the country as a whole. Coffee
chains like Barista, Qwiky's and Cafe Coffee Day (run by Amalgamated Bean
Coffee Trading Co Ltd) have become hugely popular hangouts for Indian
cities' young and trendy consumers. The cafes and pubs are not just places
where people buy coffee; they also try to sell a certain lifestyle. The chains,
with their glitzy interiors and designer furniture, are targeted at urban, upper-
middle-class and rich Indians.
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Comparative Analysis-Café Coffee Day and Barista
A) Origin
A traditional family owned a few acres of coffee estates, which yielded the rich
coffee beans in the soil of Chikmagalur, However they soon amalgamated
with Bean Coffee Trading Company Limited, now popularly known as Coffee
Day. The coffee growing tradition was since 1875, but the opportunity after
the deregulation of the coffee board in the early nineties. Coffee Day began
exporting coffee to the connoisseurs across USA, Europe & Japan. In the
calendar year 2000, Coffee Day exported more than 27000 tonnes of coffee
valued at US$ 60 m to these countries and, for the second time in its short
career of 7 years retained the position as the largest coffee exporter of India.
B) About Coffee Day
Coffee Day has a wide and professional network in the major coffee growing
areas of the country comprising over 50 agents and 50 collecting depots.
Coffee Day's two curing works at Chikmagalur and Hassan cure over 70,000
tonnes of coffee per annum, the largest in the country. Coffee Day has a well-
equipped roasting unit catering to the specific requirement of the consumers.
The process is carried out under the control of experienced personnel to meet
highest quality standards. The most modern technology available is used to
maintain consistency and roast the coffee beans to the demanding
specifications of the discerning coffee consumers.
Key Features:
• 125 years of coffee growing history

• A fully equipped ISO certified roasting plant with a 70000 tonnes per
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annum capacity at Hassan

• 5000 acres of self owned Coffee Plantations
• A ready and enviable base of more than 10000 suppliers
• Among the top exporters of coffee in India (Coffee Day Exports)
Coffee Day Comprises of the following Sub Brands
• Coffee Day - Fresh & Ground

• Café Coffee Day
• Coffee Day – Vending
• Coffee Day – Xpress
• Coffee Day – Exports
• Coffee Day – Perfect
C) Introduction
Café Coffee Day currently owns and operates 169 cafes in all major cities in
India. It is a part of India's largest coffee company named Coffee Day,
ISO 9002 certified company. Coffee Day's most unique aspect is that it
grows the coffee it serves in its cafes. Cafe Coffee Day's vending
machines have a special niche in the market compared to competitors
because Cafe Coffee Day machines offer filter coffee unlike the instant
coffee offered by competitors' brands. Growing from a coffee exporter to
a coffee parlour, café coffee day has certainly come a long way in this
segment.
Key Features:
• Pioneers of the Café Concept in India with its first Café at Brigade
Road, Bangalore in 1996. This Café was opened as a Cyber Café (first
of its kind) but later, with the burst of cyber cafes it reverted to its core
competency….Coffee
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• Essentially a youth oriented brand with majority of its customers falling in

the 15-29 year age bracket
• Each café, depending upon its size attracts between 400 and 800
customers daily
• At present it operates 169 cafes across 43 cities
• Plans to operate 200 cafes by December 2004
• It is a place where customers come to rejuvenate themselves and be
themselves
D) Marketing Mix
Every company goes through different phases in the business. The phase is
very similar to that of the product lifecycle. In order to sustain in the market
and to maintain its market share it is essential for the company to have a right
marketing mix. The company has to have a mix of proper product that is
relevant to the target audience, proper price, proper reach i.e. the place and
relevant promotion that keeps the target audience interested in the company.
I) Product
Café Coffee Day’s menu ranges from hot and cold coffees to several other
items. However, the core product is the coffee. The management believes
that trend is changing towards coffee. So taking this opportunity, the company
also sells coffee powder. Café Coffee Day also believes in selling other
merchandised products.
Core Product:
• Exotic international coffees e.g. Capachinos

• Food items e.g. Sandwich, Samosas
• Desserts and pastries
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Supportive Products:
• Funky Caps @ Rs 60 onwards
• Cool T-Shirts @ Rs 175

onwards
• Bags @ Rs 160 onwards
• Mugs @ Rs 60 onwards
• Coffee Filters @ Rs 95
Coffee Powders:
• Arabica @ Rs 43
• Perfect @ Rs 35
• Charge @ Rs 28
• Dark Forest 200gm @ Rs 80
New Introductions:
• Reglon Sleeves T-Shirts @ Rs 249

• Marquis pens @ Rs 315 Onwards.
• Shoulder Bags @ Rs 209
• Coffee Mints @ Rs 40
II) Price
Café Coffee Day has positioned as “Value for Money”. The major target
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customers are the youngsters. Pricing is a very sensitive issue for the Indian
consumers.
Café Coffee Day believes in mass marketing.
The average spent by the customer is 100-125. Their coffee starts from as
long as 15 Rs. However there are some outlets where the students are given
special discounts. CCD even set up their outlets in the college campus. For
e.g. Café Coffee Day has opened an outlet at the NMIMS campus where
they are providing additional 10% discount to the students.
CCD is looking for expansion to more interior places. Here prices become
more complex as the consumer are very conservative in spending. A cup of
coffee at Rs. 35 is accepted in metro cities but not in small towns. The
decor, ambience and the experience will play a major role in pulling the
crowds in small cities.
The price of the product has to be kept uniform in order to maintain the
uniformity in all the outlets.
CCD target audience is youngsters. Majority of them are dependent on their

family for their expense. This is one of the most important reasons for low
pricing compared to other cafes. They believe it in making their product at
an affordable price. Pricing is one of the important weapons for them to
fight against their competitor.
III) Place
Café Coffee Day outlets are spread across India. However, there are more
number of outlets in the metros and towns. For e.g. In Mumbai CCD have 37
outlets. In the past 12 months, Café Coffee Day has also been on an
aggressive drive to expand the number of cafés in the smaller towns across
the country based on research and invitations received from these places to
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open more such cafes there. The company expects to cross the figure of
200 cafés in 60 cities by December 2004. There will be an increased focus
in cities having populations from as low as Five Lakh upwards. However, the
focus has not been on just opening more cafés wherever there has been an
opportunity. Café Coffee Day is already the largest and most wide spread
retail chain of cafes in India with a current count of 169 cafés in 43 cites.
CCD plans to reach cities like Kolhapur and Nagpur in the west, Hubli,
Belguam and Vizag in the South, Allahabad, Varanasi, Ambala and Patiala, in
the North, Jodhpur and Mount Abu in Rajasthan and Bhubuneshwar, Ranchi,
Cuttack, Darjeeling, Guwahati and Jamshedupr in the East.
IV) Promotion
In order to stay with the competition and to keep the audience interested, they
undertake lot of promotion activities. CCD jointly organizes large number of
promotions with the other companies serving the similar target audience.
These cafes have emerged as a new media vehicle for reaching the right type
of the customer. CCD gets in physical touch with audiences, target loyalty
club members, or advertises in their newsletters. CCD has also undertaken a
promo jointly with TVS scooty. The promo was done at all the outlets across
43 cities. In this promo a package of 2 ices blended cold coffee and 1 choc
fantasy for just selling for Rs 82.
Customer Loyalty Programme:
Coffee shops have a high loyalty factor i.e. 60-70% of customers come
in at least once a week. The Cafe Citizens Programmed launched along with
Net Carrots Loyalty Services would reward regular customers of Cafe Coffee
Day. Any customer who bills a minimum of Rs 100 on a single bill is
automatically eligible for membership to the Cafe Citizens Programmed. The
programmed entitles members to a 10 percent discount on all food and
beverage bills for a year from the month of membership. Members will also
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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. Members can track their total
bills spend at any Cafe Coffee Day outlet across the country. The programme
was very successful and they attracted 1,35,000 citizens.
Smart Card Programme:

Started from 1st Aug, 04; one can enroll into the program by paying
Rs.100/- at any Café Coffee Day Outlet and get a TEMPORARY CARD
immediately after filling in the enrolment form. With the Card, one can
accumulate Value Points Equivalent To Cash on net purchases at every
transaction made at any of CCD outlets, provided the card is submitted to the
café staff at the time of placing each order.
The personalized permanent SMART CARD would reach at ones place in 7

days from the day of enrolment and the points would be transferred from
temporary card to the PERMANENT SMART CARD. The points accumulated
on the card would be printed on the bottom of the bill. So it is very easy to
keep track of the points. As soon as 100 points have been accumulated
on the card, one can start redeeming the points. Points can be redeemed
on food, beverage and now even merchandise like coffee powder, T-shirts,
mugs etc except Jukebox coupons.
Current Promotion:
Oyester Bay
The current promotion is done with the Oyester Bay Jewellery for the
woman’s day. CCD has arranged the contest, which is arranged for the
woman’s day event. This type of contest attracts the young crowd especially
girls.
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Fame Adlabs
CCD is also involved in the promotion with Fame Adlabs. The pamphlets are
being distributed indicating the current movie shown and the movies to follow.
Also it shows the special offer for some lucky customer to get the coffee free.
Magazine
CCD also has private magazine distributed free to their customers. It includes
ads and advertises about the promotions to follow.
V) Tie-Ups
CCD jointly organizes large number of promotions with the other companies
serving the similar target audience.
EBD Book Café:
EBD is book café has joint ventures with

CCD. EBD Book Café believes that by
selling books from within the espresso
bars like CCD and other such co-locations
that have a footfall of over 100 plus customers in a day will help them to
achieve growth in book sales. One can find one’s favorite books at such
cafes starting from fiction, non-fiction, religion, cookery, management,
lifestyle, art & craft, children books and
much more. EBD Book Café are in
collaboration with Café Coffee Day
have existing outlets in Ludhiana,
Jaipur, New Delhi and Kanpur and are
in discussion to open more such outlets
in, Mumbai and Ahmedabad. The CCD
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bookshops are in the same premises though not necessarily inside the outlet.
Himalaya with CCD:
To drive usage of honey, Himalaya Drugs is developing daily diet products

and looking at marketing them by tying-up with leading consumer brands. It
has tied up with Cafe Coffee Day, to create four dishes; Honey
Cappuccino, Honey milk shake, Rich Chocolate Cake and ice cream
topped with honey and nuts. The Cafe Coffee Day partnership is unique. It
provided a platform to reach out to the target audience in a relaxed
environment where they could experience innovative uses of honey. The
association with Cafe Coffee Day across 100 outlets in seven cities was not
only to expand the category, but also towards creating touch points to
experience the goodness of Himalaya Forest Honey
Levi’s:
CCD has also tied-up with Levis where CCD will promote Levis product
in their cafes. Levi’s recently launched their latest range of apparel, Levi’s
501, through CCD as part of their annual laterals like Wall visuals, Tent cards,
Posters and Door stickers. There is also a special Levi’s Drink.
Movie launches:
Apart form product launches, the company also does a number of tie-ups with
the movie industry in the same manner. For instance, there was
Damdaar coffee that was sold during the launch of the movie DUM.
There was also the Damdaar contest wherein the prizes were movie
tickets, posters, CDs, and cassettes. In addition, the winners get a
chance to meet and have a coffee with the stars of the movie.
The latest movie promotion was done for the movie “Mujhse Shaadi
Karogi” which said ‘Bill a Shagun amount of Rs 301/- and you can
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enter the Mujhse Shaadi Karogi Contest’ and in the contest form
there were questions like “Who will win Priyanka?” or “How will you say
Mujhse Shaadi Karogi to the person you love?” etc.
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E) Ambience and Surrounding
“First Impression is the Last

Impression”. This is true in this
business. The first thing that the
customers come across is the
surrounding and the ambience of
the store.
To further brighten the vibrant

atmosphere of the cafés, there
has been a greater thrust on
providing more value added
services such as video juke boxes, cosy sofa seating, and exciting round the
year promotions. Trading Co. Ltd had gone in for an image change and
revamping of interiors in the last quarter of 2001.
Café interiors at the company's

169 outlets are being given a
whole, new look. In a change
from the largely wood and granite
based interiors, there is more of
steel and lots more colour. The
young colours of today, lime
green, yellow, orange, and purple
will predominate. The crockery
will also sport these colours. The
larger cafes will also have lounge
areas and a few beanbags.
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F) International Presence
Café Coffee Day, the premier retail chain of cafés in India announced
major developments within the company including its dynamic plan to
expand the chain into the overseas markets. After having established itself
firmly in the domestic market offering a world-class food and coffee
experience to over 25 million customers annually across the country, the
chain has already started setting up the infrastructure at 10 cities where it has
targeted to open at least 50 cafes by December 2004.
The entire international offering will be based on the successful Indian

brand/model in which Café Coffee Day has gathered a lot of rich experience
in coffee café retailing. As with the domestic cafés, the international cafés
will also be trendy, offering attractive prices, and the coffees served will
be made from the premium quality coffee beans.
24
G) Future Strategy
Spreading Wide:
CCD is planning to increase its reach by going to the small towns. To achieve
the mission of being a number 1 player in coffee category they cannot ignore
these small towns. CCD plans to open 45 more cafes in the next three
months. The Company is focusing on the southern states of the country such
as Tamil Nadu, Karnataka, Andhra Pradesh and Kerala, and the western
region, starting with various markets in the state of Maharashtra.
To widen the scope of target audience, CCD is planning to open some special
cafés. These cafes would serve to the different target audience.
However, they have aggressive competition from the Barista and other
cafes. According to the management, they have a greater threat from the
foreign players.
Expensive Cafes:
The major target group of CCD is the youngsters. However, the company
wants to widen its target group. Café Coffee Day is planning to come up
with a different type of café, which will be having different environment
all together. Even the merchandise will be different from that of the original
CCD cafes. The coffees and the merchandise would be much more expensive
and of a better quality. These cafes are mainly targeted to people with
high-income group and status oriented people.
International Coffee Flavours:
CCD is planning to start soon with the international coffee at all the
outlets. They have already done the test marketing in certain outlet
of Bangalore. Adding the new flavour would increase the choice for the
25
customer.
26
H) Its All In the Mind
CCD holds a distinct position in the minds of the target customer. Most of the
customers are loyal and visit the same outlet. CCD is very aggressive in
terms of the marketing activity in order to maintain the market share. Major
customers are youths. Focusing on the target group, tie-ups are done with
other companies in order to keep the audience interested. They are planning
to tie-ups with the cinema theaters, shopping malls.
Coffee Café Day is the most popular hang out place for the youngsters.
CCD is perceived as energetic and trendy organization. The crowd is very
lively. Most of the consumers are frequent visitors. Many of the people also
have their loyalty card “I visit here twice a week. It’s a good place to
hang out with friends.
CCD has the wide variety of coffee that suit to the consumers needs. The
ambience is very clean, well-lighted and airy. Most of the outlets also have
large parking space and good seating arrangements. There is a young feel to
it. The prices are very reasonable (compared to Barista, not our local
Udipi) too and an average coffee would cost about Rs. 40. They also have
attractive T-shirts sporting Coffee day labels, cups, etc for sale, which are
manufactured by Coffee day.
The food at CCD is at the affordable price. Customers coming out there
also find the food interesting especially veg. wraps and the chicken
ciabatta (Italian sandwich). However they don’t like pizzas. Sometimes, the
food smells a bit stale. The deserts are the most preferred by the
youngster’s especially chocolaty cakes and apple pie. The employees
are very friendly. They maintain a good relation with their customers. At CCD
employees are very helpful and serve the customers, which differentiate them
from other cafes. CCD coffees are much cheaper than that of cafes. This is
27
one of the main reasons for attracting the young college crowd. CCD is also
very well spread.
Many customers believe CCD move with the competitor. Wherever

Baristas opens its outlet, CCD comes with the outlet.
One will not find more of working class or management people. It’s not the
good place to have a business talks. The place is very noisy which makes
them difficult to concentrate. Even the seats are much closed arranged
thus does not maintains secrecy.
The music at CCD is very loud and trendy that is suited for the young
crowd. There are also some people who believe that CCD is cheap and it
does not suit their status.
The other problem that customer feels is the practice of having a TV set that
is perpetually on MTV or Channel V or something and something loud and
jing-bang going on.....It would be much better to have some soft music.
28
I) SWOT Analysis
Strength:
• Large Number of outlet.

• In house sourcing of coffee beans.
• Tie Ups with good companies.
Weakness:
• Limited Target Audience.

• Follow the competitor strategy.
• Quality of food- Stale breads.
• Loud and Hard Music.
• Improper sitting arrangement.
Opportunity:
• Large Untapped Market

• Tie-ups with other companies for promotion.
Threat:
• Entry of Foreign players like Georgia, Starbucks etc.

• Large unorganized market.
29
J) Outlets Visited
I) Carter Road CCD:
The Store was started store started on 12 Sept 2003. This is one of the
most premiums and the biggest of the CCD outlet with the capacity of
130 seat and 25 tables spread over more than 1200 sq. feet. The location
of the store has also played an important role. The store is located just
opposite the beach at the Carter road, which is one of the favourite
freaky places for the youngsters. The store has indoor as well as the
outdoor space. Being one of the most important outlets for CCD, it also has a
jukebox so that the customers are entertained and can choose the song they
like to hear.
CCD working hours is normally from morning 9 to 11:30 nights.

However, the outlet at Carter road Working Hours are from-Morning 9 to Night
1.30 as their daytime customers mainly includes youngsters, students, and
families in the late night. However the peak timings are from- 6-8, 10-11 pm.
The staff members include 2 Branch Manger and 12 male employees, and 4
female employees. CCD also follows the pattern of shifts i.e. 4 staff
member in the morning and 14 in the evening.
Normally the footfall at the Carter Road branch are 325 / per day.
However it may vary substantially during the holidays and during other
occasions. The Average spend by the customer is Rs 200. The footfalls
and the average spending however vary. This branch has more footfalls and
also the average spending is more compared to the other stores.
The outlet has Unique Machine – LaMarzotco (Asconia) which itself cost
approximately 7 lac Rs.
30
Customer Profile:
• 35% lies in the age group 20 and 24
• 29% between the age group of 25-29 years
• 55% of the customers who visit the café are male and 45% are
female
• 52% of customers who visit the cafes are students

• 23% of the customers visit the cafes daily while another 57% visit
weekly
Customer Average Average Time

Timing
Profile Money Spend Spend
Students 5-9pm Rs. 175 1-2 Hr
Families 9-11pm Rs. 300 30 min
31
II) Lokhandwala CCD:
The Store at Lokhandwala is

also a good revenue earner for
the company. The store is
located just outside the
Lokhandwala and situated just
opposite to Barista. This store is
also an important store due to
the location and also the target
customers. Lokhandwala is on
of the most famous place for
shopping. This store is not as big as that of the outlet at Carter Road. It has
a sitting capacity of 95 people. This store also has indoor as well as the
outdoor space but has more of the outdoor spacing.
The working hours at

Lokhandwala outlet is 9 am to
12 pm.
The peak timings are
• 7-9p.m.(Working Crowd)
• 10:30 p.m.-11.30 p.m.
(Families)
The USP of this store is its large

parking space. Customers come to the outlet after shopping from
Lokhandwala to have a coffee. The music is not appropriate which makes
some of the customers annoyed. The Machine used in this outlet is
Asttoria, which cost around 3.5 lac.
32
The store sells lot of other products like T-Shirts and cups, which also
do good business. However, the goods are not properly displayed. The staff
at the outlet was efficient courteous and very helpful. There is a good
customer service from the staff and helps the customer in making the
decisions. The staff strength is 11 and is divided into 3 shifts that include
1 store manager.
Customer Profile:
• Foot fall- around 115 per day

• The average spend: Rs.125-150/customer–1-3 p.m.
• Comprises primarily of youth from the 18-30 yrs age group
• Attracts a lot of people from the film industry
33
A) Introduction
“Barista” (which means “bartender’’ in English) is an Italian coffee chain

shop. Barista traces its roots back to the old coffee houses in Italy- the
hotbeds of poetry, love, music, writing, revolution, and of course, fine coffee.
Barista Coffee was established with the aim of identifying growth opportunities
in the coffee business. Increasing disposable incomes and global trends
in coffee indicate immense growth potential in this particular segment.
More significantly, they have been quick to spot a latent need waiting to be
tapped: Coffee lovers seek a complete experience. One that combines
intelligent positioning with the right product mix and carefully designed
cafes. In other words, they seek an "Experiential lifestyle brand".
As one might imagine, tapping into this need requires a company that
can not only deliver great coffee and espresso bars, but one with the
ability to scale up operations quickly. At Barista, they have gone to great
lengths to establish this.
Barista started its operations with its first outlet at New Delhi in Feb
2000. The Company was promoted by Amit Judge’s Turner Morrison Group
BARISTA Coffee Company Ltd - in which Tata Coffee Ltd holds 34.3 per
cent stake Ventured into India. Barista Coffee Company Limited has
been recently listed among the top 100 brands in India by Super Brands
India; the Indian Division of the globally renowned Super brands ltd. Barista
was selected out of 711 leading Indian brands across 98 categories. Barista
has its operations spread over 153 outlets across India. At present, Barista
had, he said, over 120 espresso bars and corners in the four metros and
14 cities of India, with 35 being added over the last 12 months, out of
which 10 had been relocated.
34
B) Barista –Marketing Mix
Barista continued to maintain its focus on quality by sourcing only Arabica

beans and using the best international espresso machines, supplied by the
Italy-based LaCimbali.
Barista was, working towards becoming the number one in terms of

parameters likes brand-imagery, brand-dominance, customer-loyalty
and turnover. The strategy for fulfilling its mission over the next decade
would be by leveraging its strong position in the Indian market to grow further
in an Asian context.
I) Product
Barista cafes also have a good number of product mixes. The menu ranges
from variety of coffees and pastries. Barista also sells other items like mugs,
Coffee beans, T-Shirts, Coffee Kettles.
Core Product:
• Coffees
• Cakes and Pastries
• Coffee Beans
Supporting Products:
• Coffee Mugs in Orange and Blue which cost Rs 55 and Rs 99

• T-Shirts which cost Rs 150
Coffee and Coffee beans are also considered as the core product for Barista.
The company has also tested marketed coffee beans through its outlets in
Mumbai and Delhi. Barista claims that they sell a best coffee bean.
35
Barista has started with a new concept by the name Barista Merchandise.
Barista Merchandise is available at selected Barista espresso bars in
Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore. The Barista
merchandise are the different types of beans that customer can take home
and have the coffee of his own taste. Some of the Barista Merchandise
includes
• The French Press

• Barista House Blend
Barista is also diversifying its hot beverages menu and introducing

several specialty teas. The reasoning undoubtedly is based on the fact
that apart from South India, all other parts of the country are mainly tea-
consuming areas, and this step is expected to help the company expand
its client base in the smaller towns of these regions.
II) Price
Barista holds the perception of being an expensive cafe. However,

Barista was the first organization to start the concept of the organized cafes in
India. Initially Barista started with Skimmed pricing policy. Barista
segmented the market according to the income and age.
Due to the entrance of new players, Barista was finding difficult to

maintain the market share. First and foremost, Barista re-defined the target
market customer. They even planned to change their tagline. "Where the
world meets” And so when company looked at this positioning and they
looked at the pricing - the strategy being that if we lower the pricing.
Apart from this, Barista has also introduced new low-priced beverages.
The officials say these price cuts have resulted in 15-per cent walk-ins at
Barista's outlets during the last few months. Barista decided to alter
their strategy in order to retain their market. After studying the market,
36
Barista found that competitors were fighting against them against the pricing.
They decided to reduce their pricing. It was not done from a perspective of
acquisition. With reduction in the prices, there had been a 47 per cent
increase in footfalls over the subsequent three months. December 2003 had,
seen Barista experiencing a 21 per cent per-store increase in footfalls
over the previous December, with the number of footfalls for the year
totalling 14 million.
III)
Place
Barista started its first outlet at Bangalore and from there it has started
spreading its wings especially after price reduction. Now they are even
planning to focus on raising the bar of coffee experience. Barista already has
presence in all the metros and has a presence in all the highly populated
regions like Mumbai, Delhi, Bangalore and many more places.
Barista is seeking to expand through the franchisee route model and plans to
enter B-class towns in the country and middle-class localities in the metros
such as North and East Delhi. By 2012, Barista plans to have over 300
outlets across the country up from 153. Barista Coffee Company plans to
increase the number of outlets to 300 from the existing 225 by 2012.
Currently, the company has around 225 Barista Lavazza Espresso Bars and
Barista Lavazza Cremes in over 30 cities across India.
IV) Promotion
Barista did not initially believed in any kind of promotion but in order to keep
their customers interested they started building the brand by communication
both within the store as well as outside the store through mass media. It
under takes various promotion activities during the festival or during
37
occasions like Valentines Day. Barista has done advertising in almost all
national newspapers. Barista has launched summer campaign through
summer chillers, and was advertised through different channels.
Sony:
Barista Coffee has tied up with Sony Music. Under this association, Sony
Music would endorse CDs and music cassettes of their recent acts, which will
be used as the lucky draw prizes for the participants. Consumers buying food,
beverage and merchandise for Rs 110/-and above during specified hours of
the performance, will be entitled to participate in the lucky draw. The prizes
will be given away in a couple of draws during the performance.
V) Tie-Up
Barista with Taj Group:
Barista Coffee, a leading coffee bar chain, has tied up with Taj group of
Hotels for setting up exclusive Barista expresso bars at the Taj hotels in
metro cities. The first such bar would be at the Emperor Lounge at the Taj
Mahal hotel in New Delhi followed by a Barista Bar at the Sea Lounge at the
Taj Mahal Hotel in Mumbai. This would be followed by similar bars at Taj
Mahal hotels in Calcutta, Chennai and Bangalore. Barista also will be housed
at the coffee shops of all major Taj Hotels in the country.
Barista with Tata Teleservice:
Barista has also tied up with Tata Teleservice. This tie-up was primarily
done in order to provide consumers' access to the Internet. The objective
being, today if you look at Barista consumers, a fair number of them come to
Barista to discuss business over a cup of coffee. Moreover, it is easier for
38
them to meet at Barista, discuss business and send the information across. It
is going to be focused primarily on work, towards the busy executive who is
traveling and has dropped by for coffee or the small office segment who might
just want to work out of Barista.
Lacoste with Barista:
Lacoste India has decided to tie-up with coffee outlet chain Barista in all the
major metros and some mini-metros. The strategy is to target younger
audiences, which have a penchant for the "finer things in life". The
customer segment of Barista is very different from the ones who visit a regular
coffee shop.
Elle-18:
Barista is jointly tied up with Elle 18 to promote their product. Elle-18 is

launching a collection of coffee colored lipsticks and has named it after
Barista’s beverages! Therefore, they are working with Elle 18, which is a
youthful brand. Moreover, they both will grow with this association. For Elle
18, the objective is to build a platform for their range of coffee colored lipsticks
and for them, the objective is to associate with the brand and have their
consumers coming in to Barista.
CBC Book shop:
Barista has tie-up with CBC bookshop, which has book corner at eight Barista
outlets in six cities. Barista’s bookshops are right inside the café. Barista
prefers best sellers and classic, besides books on management, lifestyle,
sports, health, religion, children and even cookery. Some of the outlets also
stock activity books, comics, CD-ROMs and crayons.
Other tie-ups:
Barista has tie-ups with Planet M, Crossword and the Taj group of hotels
39
for setting up Espresso corners within their premises. Moreover, along with
ABN Amro, Barista has introduced a concept called Ban café - a café in the
bank premises.
C) Ambience And Surrounding
The colour shades that they have used are terracotta; it is warm - it is
orange. The background has
a dark Orange colour. Orange
colour signifies of a style and
friendly ambience of its own.
In order to match the colour

combination of the surrounding
even the uniform of employees
are orange in colour. The place
invites the customers to spend
time. However, the focus would, continue to be to recreate the ambience
of the typical Italian neighbourhood espresso bars in India so as to
provide a comfortable place for people to relax and experience “the joy
of coffee”. The ambience of the location and the quality of coffee would,
continue to be the key factors
while growing the chain.
It has lots of board games for

any one to indulge in, like
chess, word scramblers, and a
guitar to pluck some chords.
Music:
The music is not too loud and

encourages conversation, and the person behind the counter is non-
40
intrusive and friendly.
Barista is also planning to organize live music. Listening to live music,

while sipping a warm cup of coffee, next to your beloved can make an
evening a perfect memory to cherish. In order to gift its customers with this
tranquilizing experience, Barista is buzzing with live music this winter spate.
Barista presents 'Oceans', the music band that will perform live at
various Barista outlets.
Sitting Arrangement:
Barista is a place for relaxes. Even in a crowded espresso bar, at Barista, one
will have his share of privacy. The seats are arranged at a certain distance
to have a privacy of talks as their major customers come there to
discuss the business or to relax and chat.
D) International Presence
The company operates over 130 coffee joints including four in Dubai
and Colombo. Barista had chalked out aggressive strategies for
expansions into Europe and West Asia.
Barista has already started its operation in both Sri Lanka and Dubai
and doing very well. They are talking terms with a few potential partners in
Kuwait. Barista owns and manages all its outlets in India but operates
through franchisees in other countries.
E) Future Strategy
The management at the Barista outlets thinks that their positioning is very
different from that of CCD. They think that the people going to CCD are young
college students. The target audience for the Barista are young managers
and middle level mangers and also family. However there is a treat to them
41
in terms of the share of the young college going crowd, which forms a main
target audience for the CCD and comparatively small part for Barista. In order
to maintain the share the managers of Barista thinks that they would need to
increase their presence and also have to tap the other untapped market. The
company is also planning to tie-up with other companies in order to
increase the promotion activities that would keep the crowd interesting.
They also are planning to organize the festivals of the college or
sponsor prizes in the festival.
Increase in outlet:
As part of its marketing strategy, the company is planning to promote

international coffee blends first through 40 Barista stores in Mumbai,
Delhi and Bangalore. With the move, the company also hopes to expand the
number of Barista Espresso Bars on an average rate of two to three per
month as well.
International expansion:
Barista is also looking for the international expansion. They are

planning to expand in the Kuwait market. Barista is also planning to
expand its presence in the other Asian countries like Sri Lanka, Dubai.
Promotional Activity:
As part of its marketing strategy, Barista Coffee Company Ltd is

planning to launch a host of consumer promotions at its outlets in 2004.
For the purpose, the company is currently in talks with many entertainment,
consumer goods and music companies, which include the US-based Bose
Corporation, Swatch and International Travel House.
Improvement in the Services:
Initially Barista had a system of self-serving. Indian consumers are not
42
comfortable with this concept. However in some of the outlets they have
started serving the customers.
Informative Staff:
The staff should be qualified as they will be dealing with intelligent

people. The staff should be friendly but should not try to educate the
customer who is already aware of the things.
F) Its All In The Mind
Barista is a place where the world meets. People come to Barista to have a
meet or to relax. A lot of them actually come alone as well. This is
actually one of those places with people coming in alone because they
are comfortable with themselves. It is a place where people are meeting
each other in an environment, which is fulfilling social and intellectual
needs.
The employees at the Barista are also energetic. They help the customer
in making decisions for their purchase. Some of the customers at the
Barista think that they should be personally served rather than self-
serving. When the person wants to orders for some thing customer has to go
to the counter order the requirements, pay bill and the employee takes the
name of the customer. When ever the order gets ready the employee shouts
on the top of the voice calling for the customer to take the order. This actually
unpleased the customer as the customer gets disturbed every time the
employee calls for some person.
Product:
During the time of discussion I found two types of customers, one who
visits regularly and other who visits rarely. The customers who come
rarely are not actually the coffee lovers. They just come there to do some time
43
pass. They have no complains about the product.
But the customers who are coffee lovers are not satisfied by the product they
serve. There are some customers who actually complain about the quality of
the product. Coffees are not really that good. The bread is dry; the amount of
filling has reduced in quantity etc. Their desserts fortunately have not suffered
and are still pretty good.
Customers not only come there to have a coffee or have a sandwich. They
actually come there to have an experience. They find prestigious when
they visit to the Barista. As major target audience are youths, young
managers
and middle level management people who come to discuss their business.
The young students visit there as they feel the sense of maturity. The
people who are status oriented would prefer visiting Barista rather than CCD.
Their targets are youth, young executives and nucleus families. Barista also
claims that intelligent people come here “Someone who is intelligent and
appreciates the good things in life.” claim by Barista. There are many
customers who come there, as they perceive themselves as intelligent people.
For business people toting Laptops they can hook up to the net free of
cost or catch up on the news business magazines and newspapers are
available at every outlet. They also come to Barista, as it’s a good relaxing
place where they can discuss about their clients.
There are people who also come alone. They find Barista is the place
where they can just have a coffee and think deep, as there is no one to
disturb them.
44
G) SWOT Analysis
Strength:
• Claim to sell the best coffee

• Large Number of outlet
• In house sourcing of coffee beans
• Espresso-Highest selling coffee
Weakness:
• Expensive coffee
• Self service for the customers
• Quality of food- Stale breads
Opportunity:
• Large Untapped Market

• Tie-ups with other companies for promotion
Threat:
• Entry of Foreign players like Georgia, Starbucks etc

• Large unorganized market
45
H) About the Visit
I) Barista at Bandra
The outlet at Bandra

has a capacity of 48
with 16 circular tables
and 2 side tables. The
approximately area of
the store is 800 sq.ft.
The outlet is very big
as the other outlet of
the Barista. This outlet
being at a very busy
area, there is no
ambience for the
customers to sit
outside. Even the parking space is not sufficient.
As the outlet is located at one of the busier area of Bandra, the working time
for this outlet is from 9 in the morning to 1.30 in the night. However the
outlet is located just opposite the National College, the peak time is during the
afternoon dominated by students who are small spenders, shoppers & young
executives in the evening and families in the night who are more than average
spenders frequent in evenings & night.
They come to Barista to relax and discuss about their business. The outlet
has the staff capacity of 9 out of which 2 people stay from morning to evening.
Footfall varies form 250-300 per day; however it varies widely during the
festival time. The average spend per customer is Rs.120 per customer.
46
Customer Profile:
Customer Average Average Time

Timing
Profile Money Spend
Spend
Students 10 am-9pm Rs. 0 - 50 0.5 - 2 hrs
Executives 7 pm-12pm Rs. 180 30 - 45 min

Sales:
• Only 35 % sales revenue is from foodstuff
• Balance from coffee and other beverages
II) Barista at Santacruz
The Santacruz outlet has the capacity of 48 people with 14 circular tables and
2 side tables. The size is 1000 sq. ft.appox. The outlet is located at the
residential place. Majority of the customers are corporate and families.
The working hours are from 9 am to 12.30 am, however the peak timings are
from 6 to 11. The total staff strength is 7 during the week days and 8 during
weekends. The outlet is not the biggest contributor as it is located at a
residential area and even the footfall is very less compared to that of the other
stores (100 customers). The average spent per customer is also low i.e. 60-70
Rs a visit.
The machine used by them are One M31 Dosatron by La Cimbali (operates
from 9 am to 1:30 am) and one slush machine Hugoleni by Hugo Leni. The
outlet has Guitar (not properly maintained) and chess & scrabble boards for
47
entertainment.
Customer Profile:
Customer Average
Timing Average Time
Profile Money Spend Spend
Students 10 am-9pm Rs. 0 - 50 0.5 – 1.5 hrs
Executives /
7 pm-12pm Rs. 140 30 - 45 min
Families
Sales:
• 40 % spend on food stuff / 60 % on beverages
• Sales revenues approx. Rs 7000 / day
48
7) Effects of foreign Players
The potential of growth in liquid coffee retailing is huge as coffee consumption

in the country is considerably low. In the North, coffee consumption is
eight grams per persons as compared to 40 gm in the South.
After attempts by Barista, Coffee Day and Qwicky's to provide Indian

consumers the foreign players have finally decide to enter Indian markets.
Café Coffee Day and Barista dominate Indian café market. The entry of
foreign player is a treat for these players to maintain their market share. The
foreign player would also target the similar segment of target market thus
causing the problem for the local players. There is a tendency of Indian
customers to visit once and if they get satisfied than they turn to be loyal
customers.
I) StarBucks
49
Starbucks is one of the fastest growing brands in the world, after entrepreneur
Howard Schultz bought the chain 15 years ago. Starbucks Coffee - with its
5,689 outlets in 28 countries - has grown in sales at an average of 20%
annually to $2.6bn in '02.
The Starbucks Corporation is reviving its plans for entering India. The
company is expected to actively scout for prime real estate in metro markets
in the next few months, and plans to open its first store in the next 12-14
months. Starbucks has identified Delhi, Mumbai, and Chennai as the
potential entry points for the chain in India. Starbucks is presently working on
the franchisee model.
The Starbucks target audience is the hip, urban, on-the-go caffeine addict,
and the chain that originated in Seattle has got mega-plans for India.
Starbucks has pinpointed high-potential localities like a few in South Mumbai
and Bandra. In keeping with its international strategy, Starbucks will only open
shop in the best of prime locations. The company's practice is to acquire real
estate at a premium over market price, in order to squeeze out competition,
and it is planning to do the same in India.
II) Georgia
Coca-Cola India found a good market for the hot beverages. They announced
the launch of low-price ready-to-drink coffee and tea in a bid to capture a
larger share of the domestic beverages market.
The drinks will be marketed under the brand name Georgia and sold through
a large number of retail outlets all over India. According to them, it is time to
take the product from the class market to the mass market. Hot tea and coffee
form the biggest combination in India's burgeoning beverage market. Georgia
has launched two types of cafes, one where normal tea and coffees will be
sold and would be priced at 3 –4 Rs per cup; the other is Georgia Gold, which
is for the premium segment. Georgia Gold has also merged with Mc-Donald’s.
50
More and More foreign players would enter into this segment. The company
will have to differentiate their product from the others in terms of price, flavour,
ambience and also target audience.
8) Suggestions and Recommendation
Pricing:
Indian consumers are highly price sensitive. Pricing will play very important
role. In order to sustain the competition it will be very important to have a
proper pricing strategy in place. Over pricing the products would actually limit
the scope of target audience. While under pricing would actually degrade their
brand value. In either of the cases there will be a loss for the company, as
they will loose their customers.
Promotion and Advertising:
Promotions have a deep impact on the Indian consumers. The consumers

would also increase their consumption to take the advantage of the promotion
schemes. Promotion should be design properly to keep the target customer
interested. The promotion should not degrade the value of brand. The
company also needs to tie up with other companies whose target audience
51
match with theirs Like CCD with Levis, Barista with Archies etc.
Merchandising:
Indian consumers’ likes having more choice of before they actually make their
selection of buying. Different type of coffees and food items need to be
introduced in order to provide customers with more choice. Even new flavours
of coffee beans should be introduced.
Expansion:
Each and every player wants to have a wider expansion in order to have more
reached. The companies should open the outlets only where they find the
potential. They should conduct detail study before taking a decision for
opening an outlet. For e.g. CCD follows the strategy of following the
competition. They open the outlet wherever Barista opens it. This has proved
successful. This is a big risk as opening an outlet requires huge investment
and it may result in a huge loss.
52
9) Conclusion
Taking its inspiration from Italian corner coffee bars and the US coffee
chain Starbucks, Barista and other Indian chains are also trying to
educate customers about the virtues and finer points to coffee drinking.
Consumers are converging; they are thinking alike, they are aspiring for
similar products. Tea drinking nations like Britain and Japan have been
converted to coffee drinking, and Indian consumers are seeking similar
lifestyles.
Corner bars like these are offering more than just coffee and snacks to their
customers. For many of their regular patrons, a visit to these bars is also a
part of the western lifestyle they so much want to identify with. However, as
tea and coffee battle it out in big city restaurants and bars, the most
significant volume of tea is drunk by villagers in small shacks along the
roadside. As long as these roadside stalls continue to do thriving
business, tea will have a safe future in India.
Indian Market is slowly getting converted into organized market. Many players
would be coming and would be fighting for their share. As India being a
major consumption of hot beverages, it would be interesting to keep the
track of what actually transpires in the market in the near future.
When both CCD and Barista started business they did face a bit of a difficulty,
as the Indian market had been dominated by tea-drinkers till that time. When
such café were launched, people had to be educated about the different
types of coffee, as no one knew the distinctions between a latte,
cappuccino or frappe! So it took time for Indians to develop a taste for the
different flavours.
53
The cafe market in India is currently worth over Rs 5,000 crore, in which Cafe
Coffee Day (CCD) is a major player with a 60 per cent market share, followed
by Barista with 30 per cent.`
CCD and Barista are in one business but their strategies are very different.
Both are targeting to different class of audience but they are competing with
each other. Barista form very beginning has target to classes and not masses.
It is a premium class brand. But now they are changing their strategy and they
are planning to target masses but still upper class and in terms of prices they
are not at par with CCD.
CCD is a price warrior for Barista. CCD has set up at least half a dozen
outlets in Delhi and Mumbai, right next door to barista and is hoping to lure
barista’s customers with a cheaper menu. And may be because of this
Barista has suffered huge losses in the year 2002. Among 153 outlets, close
to 40 make huge losses and another 10-20 barely break-even. The reason
being, they were growing at a very fast rate. At present their all outlets are
owned and they have now decided to move to a franchising model to cut
capital expenditure. If one look at the pricing aspect CCD is cheaper and
better but if one wants high quality and does not mind paying little more
for that, then Barista is just the right choice.
In India the market is huge and there is space for everyone as long as
one is focused on a particular segment and caters to it. And if one live
up to the promises one make, give good quality coffee at an affordable
price and provide excitement to their respective customers then there is
no competition at all!
There is a huge potential for the market to grow in the near future. We want to
take advantage of this and make certain corrections in our strategy by
adopting the consolidation method. Increasing the number of outlets would
also be a part of the consolidation phase.
54
10) Bibliography
Books, Newspapers, Magazines:
• Philip Kotler, “Marketing Management”, 11th Edition

• Retail Biz
• N.Kumar, “Marketing Management”, 1st Edition
• Business Line
• Business today
Web sites:
• www.retailyatra.com
• www.indiainfoline.com
• www.cafecoffeeday.com
• www.agencyfaqs.com
• www.barista.co.in
• www.barista.com
• www.google.com
55

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University of

NCRD Sterling Institute of

This is to certify the project titled

(Dr. Maithi) (Prof. Doel

I would like to take this opportunity to thank all who helped me in

Anshuman Suresh Kasera

2) Retail Industry In India

Today, in some developed countries, retail businesses have shares as large

The challenges facing the organized retail industry in India:

• Competition from the unorganized sector. Traditional retailing has

Global developments in the retail industry, together with changing demand

Reason for the increase in the organized retailing in India:

• Rewriting the laws

This level of change is unlikely to be successful if carried out by any one

The crucial aspects to Retailing – the front end of manufacturing and

Most single-format retailers have diversified successfully into multiple formats.

Facts on Indian Retail sector

• Indian Retail sector is the fifth largest global retail destination.

• India retail market is dominated by the unorganized sector.

• The top five companies in retail hold a combined market share of

• The Indian retail market has been ranked by AT Kearney's eighth

• Currently the share of retail trade in India's GDP is around 12 per

• According to Government of India estimate the retail sector is likely

• India continues to be among the most attractive countries for global

Key Players in Indian Retail Sector

AV Birla Group has a strong presence in apparel retail and owns

Trent is a subsidiary of the Tata group; it operates lifestyle retail chain,

K Raheja Corp Group has a turnover of Rs 6.75 billion which is expected

• Lifestyle International, a division of Landmark Group, plans to have

• Shoppers Stop has plans to invest Rs250 crore to open 15 new

• Timex India will open another 52 stores by March 2011 at an

• Australia's Retail Food Group is planning to enter the Indian market

3) Food & Beverages Market In India

Organized retailing is also emerging as an important gateway for the sale of

Retailers are looking to capture a larger share of consumer spending by

Coffee remains in the outer periphery of interest in the minds of consumers.

Branded coffee consumption is a small percentage of the total. Only 19 per

It is expected to have 60,000 coffee vending machines in the country in the

B) About Coffee Day

• 125 years of coffee growing history

annum capacity at Hassan

Coffee Day Comprises of the following Sub Brands

• Coffee Day - Fresh & Ground

• Essentially a youth oriented brand with majority of its customers falling in

• Exotic international coffees e.g. Capachinos

• Funky Caps @ Rs 60 onwards

• Cool T-Shirts @ Rs 175

• Reglon Sleeves T-Shirts @ Rs 249

Café Coffee Day believes in mass marketing.

CCD target audience is youngsters. Majority of them are dependent on their

Customer Loyalty Programme:

Smart Card Programme:

The personalized permanent SMART CARD would reach at ones place in 7

EBD Book Café:

EBD is book café has joint ventures with

Himalaya with CCD:

To drive usage of honey, Himalaya Drugs is developing daily diet products

E) Ambience and Surrounding

“First Impression is the Last