Business Research Methods

Project Report On Strategy adopted by CCD during the time of recession.

Submitted By
Richa Ritwika Akshay Srinivasan Hariharan N. Dhruv Gupta Rishav Das Aravind. D Pratik Agrawal

Index
1. Introduction..1 2. Tagline..1 3. USP of CCD.1 4. About Merchandise..2 5. Problems Faced By CCD during Recession2 6. International Plans...2 7. Customer...3 8. Promotion...3 9. Brand Strategy in India3 10. Research Data6 11. Youth Behavior...6 12. Key Target Audience.7 13. The Intangible Benefits.9 14. Campaign Mandatory Points...10 15. Current Updates...10 16. Conclusion.11 17. Reference..12

Introduction
Caf Coffee Day, Indias favorite coffee shop where the young at heart unwind. They are a division of Indias largest coffee conglomerate, the Amalgamated Bean Coffee Trading Company Limited (ABCTCL), popularly known as Coffee Day. Its a Rs. 750 crore, ISO 9002 certified company. With Asias second-largest network of coffee estates (10,500 acres) and 11,000 small growers, Coffee Day has a rich and abundant source of coffee. This coffee goes all over the world to clients across the USA, Europe and Japan, making us one of the top coffee exporters in the country. Caf Coffee Day (CCD) pioneered the caf concept in India in 1996 by opening its first caf at Brigade Road in Bangalore. Today, more than a decade later, Caf Coffee Day is the largest organized retail caf chain in India with cafes functioning in every nook and corner of the country. Drawing inspiration from this overwhelming success, Caf Coffee Day today has cafes in Vienna, Austria and Karachi. Whats more, new cafes are planned across Middle East, Eastern Europe, Eurasia, Egypt and South East Asia in the near future.

Cafe Coffee Day Divisions Coffee Day Fresh n Ground. Coffee Day Xpress. Coffee Day Take Away Coffee Day Exports Coffee Day Perfect

Tagline: A lot can happen over coffee

Coffee can prompt you to get into a different kind of mind. You end up having a good time. Coffee can lead you to so many things.

USP of CCD
Firstly, we have the right background of taste for coffee. It is due to the ideal customer positioning and approach that the footfalls have increased. Average footfall per day has been 50,000 to 70,000 customers at our outlets. The number is growing. Secondly, we concentrate on the quality and range of products. We understand coffee much more than anyone itself. We were positioned third at the World Barista Championship in 2003. And, we have been winning the Indian Barista continuously

holding the top position since the last four years. Lastly, our pricing has been kept in mind for the youngsters.

About Merchandise
We have launched our very own brand of merchandise comprising coffee mugs, tshirts, caps and the like. The primary objective is to create and increase the brand awareness and equity as it bears our distinctly coloured logo.

Problems faced by CCD during recession

1. There overseas plans took a major hit because of recession. 2. Footfalls got reduced in the outlets, as people dont have much money in their hands. 3. There revenue took a hit. 4. College fest lose spark as recession hits home

International Plans
Cafe Coffee Day (CCD), the food and beverage arm of Amalgamated Bean Coffee Trading Company (ABCTCL), is steaming a cuppa of international acquisitions. Indias largest cafe chain on Tuesday announced it has bought out Czech Republic based cafe chain Cafe Emporio for Rs 15 crore. Cafe Emporio has 11 outlets with seven of them in Prague, one each in Brno and Olomouc and two in Freeport-Hate. CCD said it is talking acquisition to three other cafe chains in central and Eastern Europe, and has also started looking at cafe chains in West Asia and the Asia-Pacific region. Slovakia and Hungary are two European markets that CCD has a close eye on. In the next 2 to 3 years we plan to have 50 international outlets. Due to the recession our international roll out took a back seat. But now the market has picked up and we are aggressively looking to grow our footprint across emerging markets, said Shweta Shetty, president (international business) at CCD. In the last three months,V G Sidhartha, promoter of the Coffee Day Group, roped in $200 million in funding from global private equity majors New Silk Route, Kohlberg Kravis Roberts and Standard Chartered private Equity. A significant part of the capital raised is being deployed for CCDs expansion in India and overseas markets. So what does this acquisition mean for CCD in India? Well there could be a lot of product interflow from Emporio on to the CCD menu. I really like the hot chocolate

that Emporio serves and Im sure it will be a big hit in our cafes in India. Besides this, whatever product of Emporio that would suit our menus here in India, we would definitely look to incorporate it, Shetty said.

Customer
Young at heart. The 15-35 years of age group which is meeting to get refreshed, or for chat or reading or for that sake dating. People who want to have a good time and good break.

Promotion
We want to add to the excitement of our customer by offering exciting and adventurous associations. In 2003 we launched the Treasure Hunt. It was a stupendous success. Then, we had some activities, exciting and adventurous in spirit, with Levis and Airtel. These are all youngster-related activities since we have loyal and regular customers, and so we keep doing these in-house activities. Then, we have a Caf Coffee Day Citizen Card, by which we send invites and other interesting information to the customer. Recently we have tied up with CHannel [V] for the Get gorgeous hunt.

Promotion through Fun Stuff

There are various contest & offers for the frequent flyers like City Hopper coupon from the CCD at departure terminal, which entitles you to a 15% discount anywhere in India except your city of origin.

Brand Strategy in India

CCD- an established brand image in India
Cafe Coffee Day (CCD) has an established brand image in India and ranks No 2 in the Brand Equitys Most Trusted Brands 2008 survey - in the food services category. Rival Barista is at No 5. CCD has been able to make a connection with the Indian consumers, predominantly among the youth. CCD is the market leader in India and was awarded the 'Exclusive Brand Retailer of the Year' by ICICI Bank in its Retail Excellence Awards 2005 for the organized retail sector.

CCDs wide network - the anytime, anywhere cafe

CCD has been able to make its brand presence felt through the sheer number of stores. CCD has 1016 cafes at present and it has ambitious plans to launch more cafes in the near future. CCD also has three cafes in Vienna, and two in Karachi, Pakistan. Lagging behind CCD in the Indian market, Barista has about 400 cafs, Java Green (around 150 cafs) and Mocha (around 100 cafs). The Indian organized sector has potential for around 5,000 cafs.

Innovative formats to woo new customers

CCDs experiment with various formats (like cafes, garden cafes, lounge cafes and Xpress Cafes) depending on the target audience has been fairly successful. CCD has targeted different catchments area like high streets, malls (30 of CCDs 620 cafes are located in malls), multiplexes, offices, educational premises, and railway stations. Rising disposable incomes have made unique lasting experiences more valuable to the consumer. Therefore, CCD is all set to add more formats to its portfolio like the book cafes, movie cafes and sports cafes. During the afternoons, when the footfalls are less, CCD is planning to tie-up with publishers and producers for organizing book launches and having movie festivals. The plan includes selling books in the cafe premises where authors can also read excerpts and sign autographs for book lovers. A Cafe Coffee Day pick of the month will also be organized. CCD also tied up with BPCL petrol pumps to have outlets in their premises. CCD has even adapted its formats to be present in educational institutions and corporate campuses either in the form of detailed Cafes or its economical model of CCD express. As per the new strategy, around 15% of the stores will be based on the new formats while the remaining ones will follow the vanilla format.

Reinforcing brand image with the cluster approach strategy

Ever since its entry in India, CCD created an entry barrier for competition with as many as four CCD cafes dotting a single street. The cluster/blanket strategy aimed at getting consumers habituated to the brand. Within the Mumbai suburb of Bandra, for instance, CCD has six outlets. At another location it has six cafs within a span of half-a-kilometre. The latent need in the market countered the cannibalization of footfalls as was evident from the four successful cafes at its single catchments area at Indira Nagar in Bangalore. The strategy also made operations easier with supplies management and quick replenishment whenever one cafe ran out of stock. Having one manager for a set of cafes improved efficiencies and reduced costs.

Company-owned stores instead of franchises to not dilute brand value

A crucial part of CCDs business strategy is that all its outlets are company-owned. None of CCDs outlets is a franchise. While self-owned cafs are more expensive in the short term, the company believes that a too-hasty switch to the franchisee model may cost it its brand value. Besides, self-owned cafs mean greater control on product quality, service and training.

Lower pricing and no-segmentation approach

Though competitor Barista had the first mover advantage, CCD brand pitch aimed at the young and the young at heart and lower price offering (lower by 30%-40 % when compared to similar offerings at Barista) helped it overcome and leave Barista behind. The age group from 18 to 29 (and above 29 also) flocked CCD cafes while the brand Barista lost out due to constant change in management. Barista changed ownership from Turner Morrison to Tata Coffee to Sivasankaran to Lavazza further destroying brand equity.

From a largely south Indian retail chain to a national brand

While CCD was among the first coffee cafs to start operations in India, it was the last to go national (by end of 2001). Till the late 90s, India was restricted to the intellectual, the South Indian traditionalist and the five star coffee shop visitors. CCD faced a huge challenge from being recognized primarily as a south Indian brand. North India was not primarily a coffee drinking market compared to the south. Even the south Indians loved pure filter coffee instead of instant coffee). Besides, India was always known to be a chai country (Tea-drinking nation). Another problem was logistics. Transporting fresh roasted coffee from its estates in Chikmagalur to faraway places like Mussourie in the north and Jamshedpur in the east was a nightmare.

Co-branding
CCD never opted for mass media advertising and believed the chains 1016 stores would speak for the brand. The retail chain has involved itself successfully with cobranding activities with reputed brands like Levis, Apple iPod and Airtel. This made sense as these brands also targeted the audience, CCD targeted. CCD was first seen in an ad when the brand appeared in a co branded TV commercial for one of Yamahas motorbikes. CCD also promoted its brand via barter deals (in-film promotion deals). E.g. the brand was placed smartly in two Bollywood movies starring Indias topmost actors like Amitabh Bachchan, former Miss Worlds Aishwarya Rai & Priyanka Chopra and Salman Khan. The movies chosen had a target audience that matched with that of the consumers at Cafe Coffee Day. Shooting a few scenes in the caf helped prominent Cafe Coffee Day brand

placement. CCD also got into a barter deal with Enrique Iglesias, Elton John concerts and WWE (and also HDFC bank where the ad was shot in the cafe).

Reinvigorating the brand and taking it to the next level

Consumers, especially the youth, are no longer just a target audience, but partners that brand must connect with. Various in-caf collaterals (like Posters, Tent Cards, Danglers, Leaflets, Brochures, Coasters, Drop boxes, Contest Forms, Stirrers, Standees etc.) to impart brand visibility and to add the element of interactivity to a campaign are available inside the caf. In 2002, CCD launched a 12-page tabloid Caf Beat with articles on fashion, general interest and news about the chain. The tabloid was published monthly and circulated at all cafs. New uniforms were designed by students from the National Institute of Fashion Technology (NIFT).

Projecting a feeling of togetherness

In August 2008, CCD announced that leading international brand consultant Landor will help it to reinvigorate its brand and take it to the next level. Only the brand name and logo saying A lot can happen over coffee will remain the same. CCD will now focus more on projecting a feeling of togetherness (friendship, romance or office meeting in an informal environment) and celebration which are critical core values. Accordingly the cafe ambience, the look and feel inside is set to be changed.

Silent brew masters special employee program

As a socially conscious brand, CCD successfully employed (with training and orientation) about 25 physically impaired (deaf and mute candidates referred to as silent brew masters) across Mumbai, Bangalore and Hyderabad with the help of NGO, Enable India.

Research Data
In-house Research Data
Research shows that while our customers come to us for our products, a substantial amount of our customers come to Hang out with friends. The caf is also the venue for business meetings (13%), celebrating special occasions (10%) or just plain Time Pass (17%).

Youth Behavior
Strong Voice in household purchases

Make consumption related decisions in company of friends Consumption areas: Personal clothing & accessories, food, entertainment, consumer durables

Influencers: Peer group, workmates. Tech Savvy Access to large amount of money to spend Likes to seen at the right place Socially Active Hangs out at cafes/malls Looking for a good lifestyle Looking for a multiplicity of experiences Aspiration led purchases Seeks 'feel-good factor' and expression of identity through choice of brands consumed. But is also value conscious.

Spending Power: Rs 7,000-40,000 p.m.

KEY TARGET AUDIENCE

Major chunk of CCD customers falls within the age group of 20 to 30 which accounts for 57% of the overall percentage.

The group comprises of mainly college going students and young working professionals.

Sex Ratio & Marital Status

There is a definite skew towards singles: 66% singles, 27% married & 7% others.

Group Sizes
Maximum foot-falls are in groups of size varying from 3 to 5people followed by people coming in groups of 2, a major part of which are couples.

THE INTANGIBLE BENEFITS

Research shows Caf Coffee Day to be perceived as the home away from home. The distinctly segmented Target Group is with friends & colleagues (key reference groups)

Relaxed and in a receptive mood, having a good timehaving fun!

CAMPAIGN MANDATORY POINTS

50 % of the total invoiced amount to be paid before the start of the promo, rest to be paid half way through the campaign All expenditure incurred on designing , creating and logistics of collaterals are to be borne the third party The collaterals to be sent directly to the cafes. Please share with us the soft copies of the collaterals to be displayed in CCD for approval by CCD before sending for print All collaterals to be displayed in CCD would need to carry a CCD logo on them All Collaterals are to reach the cafes at least 2 3 days prior to start of promo so that there is enough reaction time at the cafes Taxes extra as applicable

Current Updates
Mumbai, March 05, 2010: Indias largest caf chain Caf Coffee Day (CCD) continues its leadership as an iconic retail brand whose dynamism and popularity have won it respect and admiration from both consumers and rivals. In a latest of a series of honours, the chain was conferred with the title of the Most Admired F&B Retailer of the Year: Cafes, Juice Bars and Parlours at the glittering third annual Coca Cola Golden Spoon Awards ceremony in Mumbai last night. CCD won in the same category at the 2009 Coca Cola Golden Spoon Awards as well. Caf Coffee Day fought off competition from four other finalists in the above mentioned category: Barista, Jus Booster Juice, Costa Coffee and Baskin Robbins. The Coca Cola Golden Spoon Awards -- IMAGES awards for excellence in food retailing, were part of the ongoing annual food industry conclave Food Forum India at The Renaissance, Mumbai. Incepted in 2008 by the IMAGES Group, Food Forum India is Indias largest gathering of food manufacturers, marketers, retailers and support organisations in India, and includes an exhibition, conferences and the awards ceremony. Year 2010 marks the third year for both Food Forum India and the Coca Cola Golden Spoon Awards. During fiscal 2009-10, Caf Coffee Day has taken its retail presence to 882 outlets across the country, which is a growth of nearly 16 per cent over the previous fiscal

year. The chain was ranked as the most likely winner by the industry due to its continuous and significant marketing initiatives through the year. Besides CCD, 12 other food & grocery retailers, F&B brands and professionals received trophies in recognition of their achievements in the past year at the awards ceremony.

Conclusion
During the recession time Caf Coffee Day became more aggressive by promoting CCD through co-branding, sponsoring the events, fun activities for their frequent flyer customers like City Hopper coupon which is a discount coupon. They also gave 2 chocolate cookies free with one cup of hot/cold coffee. According to the local environment they started providing the specialty of that city definitely with quality like samosa for Lucknow city and idly sambhar at Mysore Road CCD. So with these offers customers got attracted to CCD and these are some of the ways with which Caf Coffee Day sustained during recession.

Surely A Lot Can Happen Over Coffee.!!!

References
1. Ernst & Young Study Yousumerism 2008 & 2. Bates 141 study -3 generations, 1 big market 2008) 3. www.cafecoffeeday.com 4. http://strat.in/2009/06/what-is-ccd-as-a-brand-up-to/ 5. http://www.casestudyinc.com/coffee-day-brand-strategy-india 6. http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4300