Café Coffee Day's Preemptive Marketing Strategy

A

CASE STUDY

ON

CAFÉ COFFEE DAY'S PREEMPTIVE

MARKETING STRATEGY

SUBMITTED TO: - DR. RAVIKESH SRIVASTAVA

Presented By

Sweta Agarwal(91059)

FMG 18 A

India is said to be one of the world's largest exporters of tea and even one of its biggest consumers. However, it is coffee drinking which is increasingly becoming a statement of young Indians. Moreover, coffee which was not in picture until a few years ago, has gradually become a driving business. Coffee is slowly but surely substituting tea. There is also rise in the consumption of coffee. This coffee movement has got much of its momentum due to the efforts of companies like Café Coffee Day and Barista.

Café Coffee Day pioneered the café concept in India way back in 1996 by opening its first café at Brigade Road in Bangalore. Recognizing the immense potential in this they tried to establish a brand identity of their own. From a handful of cafes in six cities in first five years it has now become a premier and the largest retail café chain in India by establishing around 802 cafes in 105 cities around the country. This figure is no less and as per the news it is planning to have about 900 outlets by end of FY09 i.e 73% growth (at the beginning of FY08 they had 520 outlets)

Cafe Coffee Day is a division of India's largest coffee conglomerate, Amalgamated Bean Coffee Trading Company Ltd. (ABCTCL), popularly known as Coffee Day, A Rs. 750 crore ISO 9002 certified company. Coffee Day sources coffee from 5000 acres of coffee estates, the 2nd largest in Asia, that is owned by a sister concern and from 11,000 small growers. It is one of India's leading coffee exporters with clients across USA, Europe & Japan.

With its roots in the golden soil of Chickmaglur, the home of some of the best Indian Coffees, Coffee Day has its business spanning the entire value chain of coffee consumption in India.Its different divisions include: Coffee Day Fresh n Ground (which owns 400 Coffee bean and powder retail outlets), Coffee Day Xpress (which owns 895 Coffee Day Kiosk), Coffee Day Take away (which owns 12000 Vending Machines), Coffee Day Exports and Coffee Day Perfect (FMCG Packaged Coffee) division.

Over the years CCD has positioned itself not only as a sophisticated place to drink coffee but also a cool place to hangout and enjoy with friends. That is what punch line of CCD defines that "A lot can happen over coffee". CCD offers an experience and service mainly to attract young crowd. 80% of CCD's consumers are in the 15-29 age group. Bidisha Nagaraj, president, marketing at Cafe Coffee Day, India's largest retail cafe chain, says modern coffee shops are "positioned as a social hub and aimed at consumers who are young and young at heart". Each café, depending upon its size attracts between 400 and 800 customers daily. One of Cafe Coffee Day's main competitors, Italian-owned Barista, has only 200 cafes in 31 cities and is planning to add another 300 in the next three years.

In 2002 CCD had only 35 outlets compared to Barista's 85, but gradually it expanded to about 802 outlets, whereas Barista has only 200 outlets in India. Now-a-days we hardly find any mall which doesn't have a CCD.

In recent moves, CCD has segmented the market as per the behaviour of the customers; book cafe, music cafes, garden cafes, lounge cafes, highway cafes, cyber cafes and onboard cafe for budget carriers like Air Deccan and GoAir.

Youngsters, primary target group of CCD wants to have value for money and CCD offers them that . "From a marketing stand point, the success has come by focusing on the 3As: accessibility, affordability and acceptability ,"