Marketing Assignment

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Cardiff Metropolitan University
UNIVERSAL BUSINESS SCHOOL
Karjat, Mumbai
MARKETING ASSIGNMENT
Module: Marketing MBA7003
Module Leader: Prof. Sushant Nanda
Name: Chirag Sankeshwari
Student Id: St20095348
Date of Submission: 29th
February 2016

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ABSTRACT 3
INDIAN COFFEE INDUSTRY 3
CAFÉ COFFEE DAY- AN OVERVIEW 4
MARKET SIZE, GROWTH TRENDS & FUTURE PROJECTIONS 6
SEGMENTATION TARGETING & POSITIONING 7
PESTEL ANALYSIS & CRITICAL SUCCESS FACTORS 9
MARKETING MIX 11
SWOT ANALYSIS 13
COMPETITOR ANALYSIS 14
PORTER’S FIVE FORCES MODEL 15
LIMITATIONS 16
CONCLUSION 16
BIBLIOGRAPHY 17
Table of Contents

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ABSTRACT
Café Coffee Day is regarded as one of the best cafe chain outlets in the country which
offers incredible coffee experience at competitive price. CCD encourages a feeling of
togetherness in the consumer’s mind. CCD is considered as a spot for meeting companion
and discussion where Students and working Professionals hangout. Environment and space
engage people to order for more coffee. Inside CCD people feel chilled out and relaxed.
CCD promotes through mouth publicity and going to CCD is considered prestigious. This
research is an endeavor to explain the strategies of marketiers embraced by Café Coffee
Day alongside concentrating on their unique abilities.
INDIAN COFFEE INDUSTRY
India stands in the sixth position in list of largest coffee producers of coffee in the world
and has a share 3.9 percent in the worldwide coffee production. India consumes only 30
per cent of the total coffee production and the remaining is exported. India's coffee export
volume was 286,545 metric tonnes in the year 2014-15 (India Brand Equity Foundation,
2015). In India, per capita coffee consumption is nearly 90 grams considerably low
compared to other coffee exporting countries. This shows there is tremendous potential for
the development of local coffee industry.
The Indian retail coffee market is worth 1700 crore (Business Insider, 2014). The
stakeholders are from domestic as well as international markets. Barista Lavazza, Café
Coffee Day, Costa Coffee, Starbucks and Café Mocha are the counterparts in this industry.
CCD leads in retail cafe chain in the country which is the founding company of Café Coffee
Group. Coffee culture in India initiated by Café Coffee Day. The cafe population is mainly
targeted the young generation with accessible income living in urban communities.

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CAFÉ COFFEE DAY – AN OVERVIEW
Café Coffee Day is known as biggest cafe chain in country possessed by Coffee Day Global
Ltd. CCD was earlier recognized Amalgamated Bean Coffee Company. Coffee produced
in the land of 12,000 acres Coffee Day Global has its own real estates. CCD being Asia’s
major producer which exports Arabica beans to different countries like Japan, Europe &
USA. (India Today, 2015)
On July 11, 1996 V.G. Siddhartha opened its first CCD outlet in Brigade Road, Bangalore.
By 2011, CCD extended over 1000 cafés in several cities all over the country and still
adding extra stores. CCD is an ISO certified company with revenue of 1,150 crore and
1423 plus cafes over 209 cities in India (Café Coffee Day). It has café outlets overseas in
Malaysia, Egypt, Czech Republic, Cairo and Austria.

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THE MARKET SIZE GROWTH TRENDS &
FUTURE PROJECTIONS
The market size of international coffee is worth USD 100 Billion and International Coffee
Organization assumes that coffee industry will have an annual growth of 4.7% from 2015-
2019. Annually 2.5 million bags are added to worldwide coffee production of which 80%
of its extension having a place with rising markets. India is popular for consuming tea.
Excluding South India has watched a low usage of coffee with per capita usage of
110g/year 8 kg in progressing nations.
Market size of café in India is assessed around Rs.6, 700 crore in 2014 & is supposed to
expand to Rs 15, 100 crore at annual growth rate of 15% till 2020. As it can be seen an
increase of 20% organized share from the latest CAGR report , meaning the organized
share increasing from Rs. 1,800 crores that is 27% to 36% from the year 2014 to 2020.
(Investing.com, 2015). Café culture has advanced from past 5 years along various new
cafes has been added in the market with entry of international participants.
Source: http://www.ico.org/monthly_coffee_trade_stats.asp

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SEGMENTATION TARGETING &
POSITIONING
Segmentation
a) Demographic Segmentation
Demographic segmentation is based upon following factors:
Age – 16 to 30 years old
Gender – Males and Females
Income – Medium class & Higher medium class Youth
Profession – Working Professionals, Students, Homemakers & Senior Executives
(Philip Kotler, 2013)
b) Behavioral Segmentation
 Individuals who consider a cup of coffee as precious
 CCD aims not only the youngsters but whoever has a youthful feeling
 A unique place where individuals get refreshed and feel homely
Targeting
The target audience are medium and higher medium class youth. CCD aims Students,
Homemakers, Senior Executives and working professionals who famine to chill out after
work. CCD aims not only youngsters but anybody who has a youthful feeling at
reasonable price. (Café Coffee Day)
Positioning
CCD is linked through coffee lovers who are looking to the high growth trends in
cafes. Café Coffee Day has assumed an imperative part in arousing India to promote
café culture by assigning individuals a pleasant climate from comfortable seating to
arrange the finest varieties of coffee blends, drinks and edibles. A unique spot where
people might go and spend a quality time with their companions. It is better place

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elsewhere from the home and work atmosphere to refresh our minds. (Ideas Make
Market.com, 2012)
PERCEPTUAL MAPPING
High Quality Service
Low Quality Service
Expensive Affordable

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PESTEL ANALYSIS
Political Factors
 Least political intervention
 Easy availability of Coffee beans
 Cost sustainability owing to govt. regulatory.
Economic Factors
 Large coffee consumption in Southern India.
 Fluctuation prices of coffee.
Societal Factors
 Lovers of Coffee get quality assurance attached with the brand name.
 Gossip over coffee as there tagline itself provides a wide scope of activities by
exclaiming, “A lot can happen over coffee”
Technical Factors
 Innovation strategies to promote their brand
 Availability of Wi-Fi and Bluetooth services
Environmental Factors
 Disposal of waste
 Avoid excess plastic usage
Legal Factors
 Being ethical in its processes and rely on delivering constant customer delight
 Complaints coming out from customers end are very few in number.

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CRITICAL SUCCESS FACTORS
Highly rated Taste & Quality:
On the basis of premium quality and taste, Café Coffee Day has maintained its market
share. Banking upon the huge potential of this attribute CCD can increase its share by
offering primary quality product. Producing their own coffee beans following the backward
integration strategy provides a base for future development and extension.
Value for Money Proposition:
Café Coffee Day is projected as a cost effective brand. In market study Café Coffee Day
has valued high for their cost efficiency and worthiness for money.
Strong Youth Orientation:
The Café Coffee Day is mainly focused on youth. In India where major chunk of 40%
population is below the age of 20 years, there is vast potential for Café Coffee Day to
be biggest brands for youth in India. There is tremendous growth for market share in
future.
Excellent Customer Service:
Café Coffee Day firstly stands for decent behavior and service of staff. In service
organization customer service is of great advantage. CCD must struggle to maintain its
favorable position in the market.

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MARKETING MIX
Product
CCD has upgraded its products and services over the years as per the tastes and
preferences of the customer. The countrywide outlets have uniform menu maintaining the
same level of efficiency and quality indicating a sense of perfection, aroma and taste.
Present product offering by Café Coffee Day,
 Beverages
o Hot – Hot Coffee, Hot Tea, Hot Chocolate
o Cold – Cold Coffee, Ice Tea, Frappe, Fruit Slush
 Food – Sandwiches, Samosas, Desserts, Cookies, Ice creams, Cakes
 Merchandise – Coffee Maker, Coffee Mugs, T Shirts, Coffee/Tea Powders
Price
The products at CCD are moderately priced keeping in mind the student population as the
prices offered by its competitors. CCD is looked upon as a ‘value for money’ brand and has
adopted various pricing strategies based on different locations across the country.
Place
CCD acquired a firm expansion strategy. They believe in establishing a coffee shop
wherever it is successful. CCD believes in clustered approach for opening new outlets. It is
important here to understand cannibalization, consumer behavior and changing trends.
Promotion
Café Coffee Day has promoted through various media continuously, like:
 Television: Café Coffee Day held contests in associations with Zee English and
WB channel who frequently air the American classic sitcom 'Friends'. The story of
'Friends' revolve around the lives of lead characters, who mostly hangout in a
coffee shop.
 They had tied up with shows like roadies and Channel [V]‘s Get Gorgeous, etc.
 Tie-ups: CCD also tied up lot of the youth brands like Levis, TVS Scooty Airtel
Friends

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 Sales Promotion: Café Coffee Day uses exceptional ‘Café Citizen Card’ for
rewarding Café Coffee Day’s customers. It has also tie-up with 'Freecharge' to
distribute coupons for complementary coffees over orders.
People
Well trained and groomed staff to provide best serviced to the customers. Hygiene,
behavior, professionalism and taste are given utmost importance.
Process
CCD has adopted a self-service model for ordering and payment. This may have a negative
impact on customers. They keep the preparation of food and beverage open to the
customers so that they have a real-time experience of the menu options.
Physical Evidence
The brand has gained credibility for finding and filling a much required gap, which is a
location for spending quality time in the rapidly moving urban lifestyle. The communication
from the company through its tagline – “A lot can happen over a Coffee” provides the scope
for spending quality time with people which can be for any reason. A major network effect
aided with loyal customer base has helped Café Coffee Day retain customers as it has
become synonymous with having coffee outside.

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SWOT ANALYSIS
Strengths
 Café Coffee Day is India’s biggest retail chain
 CCD has made amazing brand name and brand perception
 Company has got ISO 9002 certification for being standard & assuring quality
 More than 1000 outlets & 3,00,000 plus guests visit CCD throughout the country
 Brand is mainly focused on young generation
 CCD has been rated high in taste, quality & service
 Expenses are reduced
 “Highly affordable brand” is the USP of the brand
Weakness
 Poor brand identity and lacks personal attention to the trustworthy customers
 Fresh food are inaccessible
 Coffee hubs have market penetration of 5%
 Café market is highly competitive
Opportunities
 Asia’s fastest developing commercial ventures
 Association with various organizations for advertising &promotions
 To publicize about brand
 Exploiting small businesses
 Low priced coffee varieties
Threats
 Rivalry with Starbucks, Costa Coffee Barista, Cafe Mocha & Gloria Jeans
 Existence of other Socializing areas
 Market does not come under body or union
 Reliant on government merchandise rates

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COMPETITOR ANALYSIS
Direct competitors
• Barista – The nearest rival of Café Coffee Day in the Indian market is Barista. The
main target audience of barista are young business professionals and young
individuals. Barista is a perfect location for business meetings or a spot to chill out
after a having stressful day.
• Café mocha – Trust building is main focus which provides level of experience to the
customer is hard to imitate. Café mocha is spurred by morocco and turkey just not
offers coffee but delivers sheeshas from Egypt and even gourmet delights. As mocha
names as “a coffee shop for the soul”.
Indirect competitors
• Tough competition to Mc Donald’s and Haldiram’s from CCD as they attract customers
to understand the reason behind spending RS 45 on a coffee instead McDonald’s
offers a burger and a coffee at the same price.
• Domestic tea pack joints and cafes similar to Nescafe – they are smaller hubs but
they attract the same customers.

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Source: https://www.vetr.com/research/NASDAQ:CCD/posts/7331349842-IPO-Watch-Indias-Cafe-
Coffee-Day
PORTERS FIVE FORCES MODEL
Threat of new Entrants – Medium
 Many famous food joints/entertainment places/brands are present
 High possibility of expansion
 FDI strategies backed by government
Buyer’s Power – High
 Minimum trading cost
 Variety of products available
 Collection of amenities
Supplier’s Power – Low
 Absence of packaged cartels
 Government policies on coffee & milk prices
 Unified backtracking
Threat of substitutes – High
 Aired drinks, Milk refreshments, Juice bars & tea pack shops
 Food joints for having snacks are McDonalds and Pizza Hut
 Places for socializing are Bistro & Hukka parlours
Industry Rivalry – High
 Domestic rivalries are Cafe Mocha and Barista,
 International cafe chains like Costa Coffee, Gloria Jeans & Starbucks entered the
market

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LIMITATIONS
 It was a challenge to find accurate data
 Limited data available for secondary research
 Lot of time was involved
 Information for current scenario was hard to gather
 Inadequate to gather competitors data
CONCLUSION
In recent study Cafe Coffee Day has rated high for taste & quality of products. Working
on this facet in future will be immense potential to fascinate consumers based on quality and
taste of products. This is likely to be truth that coffee beans are yield in their own farms
which is imperative foundation for upcoming extension and growth. It gives intense rivalry
to competitors by fulfilling eminent café experience of consumers. CCD has worthiness for
money and is youth centric. “A lot can happen over coffee” message has heartened the
young generation especially who consume CCD products at a great extent.

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BIBLIOGRAPHY
Books
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4. Nadir, H. and Gunay, N. (2013). An empirical study to diagnose the outcomes of customers
experiences in trendy coffee shops, Journal of Business Economics and Management, 14(1),
pp.22-53.

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