64961938 cafe coffee day final report

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Café Coffee Day – Final Project Report on:

“Promotional Strategies For Cafes in Malls (Mall Activations)”

SIP project report submitted in partial fulfillment of the requirements for the PGDM

Programme

By: Amit Kumar Singh (Roll no. : 11009)

Project Supervisors:

MR.ARUN P (Marketing Manager, Café Coffee Day)

International School Of Business & Media, Pune (2010-12).



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Acknowledgements

The completion of the project would not have been possible without the kind help and support of

some people who helped me complete my assignment and helped in ensuring that any form of

hindrance faced was countered with, effectively.

My deepest respects to my Company Project Guide, Mr. Arun P(Marketing Manager, Café

Coffee Day) whose expertise and knowledge helped me enhance my own knowledge in all major

aspects of business.

I would also like to thank Mr.K.Ramakrisnan (Marketing Head, Cafe Coffee Day) without whose

co-operation and support nothing would have been possible.

Lastly I would like to thank all the customers of Café Coffee Day who provided the necessary

feedback and suggestions required to complete my surveys.



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Executive Summary

I was involved with one project during my two month internship with Café Coffee Day, Kolkata

Regional Office. I was asked to work on one projects namely “Promotional Strategies For Cafes

In Malls (Mall Activations)”. The timeline for the project was Two month.

For my project on “Promotional Strategies For Cafes In Malls (Mall Activations)”, the research

and Data Collection was done mainly through survey conducted on facebook as I was asked not

to do a questionnaire inside the malls by my project guide.

The Projects were done keeping in mind that Café Coffee Day is a youth oriented enterprise and

that attracting and satisfying also attracting more young and vibrant people in one of its primary

objectives.



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Introduction

Today Café Chains like Café Coffee Day, Barista, Costa Coffee, etc. are in popular demand in

India mainly because of the ambience these Cafes provide to their consumers and also because of

an increase in the number of coffee drinkers in the country. A culture of coffee drinking which

originated from the south has been spreading throughout the country mainly after the inception

of such Cafes.

Today‟s youth love their music and like socializing with friends and loved ones. Taking

this into account, the Café Chains in the country provide just what the youth wants. If one walksinto any Café, one can notice the trendy design, lavish seating, and light music playing in the

background. Such is the sort of ambience the youth normally prefer. It sort of has a soothing

effect which enables them to converse freely and share their experiences.

However, with increasing popularity of such Café chains, more and more players are entering the

market with better products and services, hence making it difficult for the existing players to

retain or create new customers.

By Doing the “Promotional Activities” wherein the customer gets discounts and other benefits,

one can bring the customer closer to the Café and increase brand loyalty.



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Objectives of the Study

The objective of the project on “Promotional Strategies For Cafes In Malls” is “To study Café

Coffee Day, identify areas of excellence and areas needing improvement; and provide

suggestions for such improvement”. The aim of this Thesis is to successfully compare two

prominent service sector companies on a common platform, analyze their working and

performance, and highlight what they are doing well, while providing suggestions and

recommendations for improvement.

QSR(quick snack restaurants), other eating outlets in malls and Café Coffee Day werechosen because of their identical pattern of functioning and growth. They are the only major

player or competitor for café coffee day in malls and their customers consider both as

interchangeable brands. This is why it is important to study how these brands differentiate

themselves from each other, and attempt to improve brand loyalty amongst their customers.



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Concepts/Models used

Project: “Promotional Strategies For Cafes In Malls (Mall Activations)”:

Organizations need to retain existing customers while targeting non-customers. Measuring

customer satisfaction provides an indication of how successful the organization is at providing

products and/or services to the marketplace.

Customer satisfaction is measured at the individual level, but it is almost always reported at an

aggregate level. It can be, and often is, measured along various dimensions. A hotel, for

example, might ask customers to rate their experience with its front desk and check-in service,

with the room, with the amenities in the room, with the restaurants, and so on. Additionally, in a

holistic sense, the hotel might ask about overall satisfaction “with your stay”

As research on consumption experiences grows, evidence suggests that consumers purchase

goods and services for a combination of two types of benefits: hedonic and utilitarian. Hedonic

benefits are associated with the sensory and experiential attributes of the product. Utilitarian

benefits of a product are associated with the more instrumental and functional attributes of theproduct .

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the

state of satisfaction will vary from person to person and product/service to product/service. The

state of satisfaction depends on a number of both psychological and physical variables which

correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction

can also vary depending on other options the customer may have and other products against

which the customer can compare the organization's products.

Work done by Parasuraman, Zeithaml and Berry between 1985 and 1988 provides the basis for

the measurement of customer satisfaction with a service by using the gap between the customer's

expectation of performance and their perceived experience of performance. This provides the

measurer with a satisfaction "gap" which is objective and quantitative in nature. Work done by



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Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap"

described by Parasuraman, Zeithaml and Berry as two different measures (perception andexpectation of performance) into a single measurement of performance according to expectation.

The usual measures of customer satisfaction involve a survey with a set of statements using a

Likert Technique or scale. The customer is asked to evaluate each statement and in term of their

perception and expectation of performance of the organization being measured. Their satisfaction

is generally measured on a five-point scale.

Customer satisfaction data can also be collected on a 10-point scale.

Regardless of the scale used, the objective is to measure customers‟ perceived satisfaction with

their experience of a firm‟s offerings. It is essential for firms to effectively manage customer

satisfaction. To be able do this, we need accurate measurement of satisfaction

http://en.wikipedia.org/wiki/Sample_survey

http://en.wikipedia.org/wiki/Likert_scale


http://en.wikipedia.org/wiki/File:Customer-satisfaction-scale.png


http://en.wikipedia.org/wiki/Sample_survey



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Industry details

THE COFFEE CAFÉ INDUSTRY

The beginning:

It all began around 1000 A.D. when Arab traders began to cultivate coffee beans in large

plantations. They began to boil the beans creating a drink they called „qahwa‟ which translates to

‘that which prevents sleep’. The drink became widely popular, and the need for coffee beans

grew.

First known discovery of coffee berries.

Legend of goat herder Kaldi of Ethiopia, who notices goats are friskier after eating red

barriers of a local shrub. Experiments with the berries himself and begins to feel happier.The

first coffee trees are cultivated on the Arabian Peninsula.

Interesting facts about Coffee & Cafés:

• Coffee was first known in Europe as Arabian Wine.

• Coffee is presently the second most traded commodity in the world. It is second only to oil.

• Nescafe was invented by Nestle because it had to assist the Brazilian government to solve its

coffee surplus problem.

Coffee is now the world‟s most popular beverage, which leads to a boom in retail and hotel

cafés. The American retail café Starbucks in born.

The Coffee Café Industry

The Coffee Café industry is currently one of the biggest and fastest growing sectors in business.

The industry consists of a mix of individual cafés, hotel cafés and retail café chains.



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Individual Cafés:

The main bulk of revenue is earned by small, individual cafés, run mostly by families and

friends. It is a relatively unorganized sector. There are millions of such cafés around the world,

and they provide customers with a homely, casual experience.

The bulk of these cafés are mainly in Europe, where every little town or village has local cafés,

where people gather together for a conversation over coffee, or just to be alone with their

thoughts.

These cafés have been the birthplace and sanctuary for various creative minds,revolutionaries and thinkers of our time. The most recent example is the author J.K. Rowling,

who has written most of the Harry Potter series of books, sitting at her local café. These cafés set

themselves apart from retail chain cafés and hotel cafés because they provide customers with a

homely, classic appeal, which cannot be emulated.

Hotel Cafés:

Ever since the popularization of coffee, hotels all over the world started opening 24-hour

coffee shops where visitors to the hotel could walk in for a cup of coffee and some food at any

time.

These coffeehouses are extremely important, because they provide international visitors

to the hotel with a universal drink- coffee. Any customer can walk into any major hotel in the

world, and enter the coffeehouse, and know what to expect. These cafés are not really major

players in the coffee café industry, but rather provide supplementary services to the hotel

industry.

Retail Café Chains:

The last, and the most organized sector in the coffee café industry, is the retail café chain. Off

late, these chains have become extremely popular and are growing at an ever-increasing pace.

These retail chains have work with an organized structure of man, material and money. The work



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on developing a recognized brand consistent to all their outlets, which customers can easily

relate to, wherever they go. They provide customers with a standardized level of service andquality at each of their outlets. The vast popularity of these retail chains is shown in the rapid

international growth of brands like Starbucks. Customers can do to any Starbucks across the

world and know exactly what to expect. The main focus of my project is increase the number

of walk-ins per day in cafes in malls and eventually increase the sales in Café Coffee Day

Growth of Café Industry in India

Hot beverages have always been a part of the tradition of India, especially South India.

Coffee took the first seat in South India when the traditional Brahmin classes brought down the

beverage from the ruling British around the 1930s. During the early years the drink was confined

only to traditional rich Brahmin families who served filter coffee in a „davra- tumbler‟. Coffee is

no more confined to the rich Brahmin class now, though the tradition of serving filter coffee in

the „davra- tumbler‟ continues to this day. In order to spread the drink, coffee houses emerged at

various places in the country, which also served as the opposite places for lawyers and the

educated class to hold discussions ranging from politics to cinema. It is also believed that many

scripts and ideas for films evolved here. One of the oldest coffee houses in South India is the

Raayars mess, Chennai, which serves first class filter coffee even today. The mess was

established in the 1940s and continues the tradition of coffee but supplements it with Tiffin also.

The vintage location of the mess attracts huge crowds even today early in the mornings, Coffee

however was not the only item on the menu. These places also served food and other drinks to

their customers. The drink also became famous and as a result even five star hotels began

cashing in on it.

Several hotels all over the country started opening coffee- shops that catered to high- end

customers. This showed the popularization of coffee cafés, to all sections of society.



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The drink has now become more of a concept than merely a drink itself. The last decade

witnesses the growth of numerous coffee pubs in the country. A number of coffee café ownerstried to westernize the taste in contrast to the filter coffee.

Now, large retail chains like Qwikys, Barista, and Café Coffee Day have opened up around the

country. The concept of a café today is not merely about selling coffee, but about developing a

national brand. Retail cafés now form a multi- crore industry in the country, and have huge

potential for growth locally, and internationally.



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CAFÉ COFFEE DAY

Corporate Profile

It was in the golden soil of Chikmagalur that a traditional family owned a few acres of coffee

estates, which yielded rich coffee beans. Soon Amalgamated Bean Coffee Trading Company

Limited, popularly known as Coffee Day was formed. With a rich coffee growing tradition since

1875 behind it coupled with the opportunity that arose with 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 tones 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.

Coffee Day has a wide and professional network in the major coffee growing areas of the

country comprising over 48 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.



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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

Café Coffee Day currently owns and operates over 1090 cafes in all major cities in India. It is a

part of India's largest coffee conglomerate named Coffee Day, ISO 9002 certified company.

Coffee Day's most unique aspect is that it grows the coffee it serves.

Key Features

• Pioneers of the Café Concept in India with the 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.

• 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.

• It is a place where customers come to rejuvenate themselves and be themselves.

• USP of the Brand:

Affordable Price



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Quality Coffee – Winner of Platinum, Gold, Silver and Bronze medals at the India Barista

Championship 2002.

Product Sources:

Coffee Day's most unique aspect is that it grows the coffee it serves in its cafes. 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. The coffeebeans are supplied to all the cafés from Chikmagalur.

The eatables at Café Coffee Day are catered by different vendors: example: ice creams

are catered by Cream Bell, Milk by Amul and samosa‟s by Patsiers Gallery.

Café Coffee Day also sells merchandise through its stores. 5 per cent of the revenue comes from

sale of merchandise.

Quality standards:

Café Coffee Day has a check on quality all the time and in several aspects. The operational in-

charge will go around checking business, record keeping service and check the feedback forms.

The food in-charge will look at the way food is being stored, coffee is being made, what is the

time take to extract the coffee and so on. Marketing person will go about checking displays, how

the merchandise are displayed

Serving Size:The serving size of a product is a measure, not only of quantity, but also of value

for money. The average serving size for Café Coffee Day‟s main product categories is



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Product Serving Size

Hot Coffee 210 ml

Cold Coffee 350 ml

Smoothies 350 ml

Granitas 350 ml

Merchandising:

At Café Coffee Day merchandise started more as a sentimental thing than as a revenue

stream. They wanted to reward coffee lovers and they started selling mugs. People wanted to

wear something that reminded them of the cafe so they designed T-shirts and sold thousands of

those.

But soon it has become a serious business. 5 per cent of their revenue comes from the

merchandising.

Café Coffee Day sells various young and trendy merchandise through its stores:

Caps

T-Shirts

Bags

Mugs

Coffee Filters

Coffee Powders

Coffee Mints

Pens



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Process:

The order process at Café Coffee Day is based on self-service, where the customer goes

to the counter to place his order. Whereas they have a flexible delivery process, where they wait

for some time for the customer to pick up the order but if the customer takes too long then the

order is delivered on his table.

Positioning:

Consumer Profile:

Research shows that 37% of the customers are between 20 and 24years. 27% of the

customers are between the age group of 25-29 years. 60% of the customers who visit the café are

male and 40% are female. 52% of customers who visit the cafes are students.

18% of the customers visit the cafes daily while another 44% visit weekly. Each café, depending

upon its size attracts between 500 and 800 customers daily, mainly between

4pm and 7 pm. Customers describe Café Coffee Day as the place they frequent most after “home

and workplace/college”. It is a place where they meet friends and colleagues, in groups of 3 or

more. The prices here are perceived to be reasonable and it is a place where customers come to

rejuvenate themselves and be themselves rather than a place to be “seen at” vis a vis other cafes.

Brand Image

Café Coffee Day is a regular meeting place for 15 to 29 years old, both male and female,

who are waited on by friendly and informed staff, and are offered the best made coffee, hot or

cold, beverages and food in an invigorating ambience. It is urban youngster‟s favorite “hangout”.



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Its customers are mostly young college students and young professionals. It is for those who are

young or young at heart.

Products:

Café Coffee Day product mix constitutes a wide range of products that appeal primarily

to Indian coffee and snack lovers. products have a decided Indian taste to it - be it food or coffee.

Most of the eatables have been adopted to meet the Indian taste buds like samosa, biryani,

masala sandwich, tikka sandwich etc. Thus they have been trying to capture the Indian taste

along with classic coffee. The best selling item in summer is frappe, which is coffee and ice

cream blended together. The young people favor it. In winter it is cappuccino. Their

merchandising includes funky stuff like t-shirts, caps etc.

Prices:

Considering that Café Coffee Day knows its major customer lies in the bracket of 15- 29,

it has tried to derive a policy whereby it can satisfy all its customers. The From the time it first

started its operations, there has been only minor changes in the pricing policy of Café Coffee

Day. The changes have been more due to the government taxes than any thing else.

People:

People at Café Coffee Day believe that “People are hired for what they know but fired

for how they behave”. Motivation and personal skill are laid emphasize upon.



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Physical Evidence:

a) Logo, Colors, Images:

Café Coffee Days logo is a Dialogue box in red and white. It symbolizes what Café Coffee Day

is all about- having a chat and relaxing and enjoying in the company of friends over a cup of

coffee.

Décor & Architecture:

Café Coffee Day had gone in for image change and revamping of interiors in the last

quarter of 2001. Café interiors have been given a whole, new look. In a change from the largely

wood and granite based interiors, there is more of steel and lots more color now. The young

colors of today, lime green, yellow, orange, and purple predominate.



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Literature:

The literature provided by Café Coffee Day is indicative of its youthful image. The

menus, posters, pamphlets are all designed to attract young and young at heart. They also have

their magazine called as „Café Beat‟, which is published monthly at their Bangalore head of fice

and distributed throughout the branches.

Locations:

Café Coffee Day looks to cater to their target market with strategically located outlets.

Their outlets are generally located in High Street/ Family Entertainment Centers.

Considering their generic appeal, there are Barista outlets located in and around Malls,

Cinemas, Colleges, Offices, etc. This endorses their brand image of a café that appeals to coffee

lovers of all ages.

Promotion:

Café Coffee Day does not believe in mass media promotions. But they are involved in all

the areas of serious consumer passion.

Through television:

Café Coffee Day held a contest around a very popular programmed on Zee English called

Friends. All the six lead characters are shown often visiting a coffee shop and a lot of youth like

watching the programmed. That is why they had a contest running where customers could win

Friends' merchandise. The linkage was that it is a youth based Programmed and it had a coffee

house.



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They have tied up with Channel [V]'s Get Gorgeous contest. The reason being that a lot

of their young consumers are interested in careers. Modeling is a career that a lot of youngstersare interested in and this was an excellent platform. They have also done promotion for History

Channel, where they have run promotion for Hollywood Heroes.

They had asked a few question and a lucky winner won a trip to Hollywood.

Social Media:

CCD also communicates with its customers and potential customers using Facebook and Twitter.

Methodology used

For the project on “Promotional Strategy For Cafes In Malls”, I was given approximately 10000

coupons to be distributed with help of a promoter outside or within the malls and the idea was

put forward by me to simply increase the walk-ins in the café to eventually increase the sales.

The data was collected based on information provided by:

1. The management of the organization.

2. Customers visiting QSR‟s and Café Coffee Day outlets.

Besides the primary data collected with the help of the survey on facebook, I have also collected

the relevant secondary data from various sources like magazines, books and Internet and

newspapers. Based on the relevant primary and secondary data, a comparative analysis has been

done so as to find out the areas of excellence and areas of improvement of both organizations.

The areas of excellence and improvement have been identified based on factual information, in

light of which recommendations and suggestions have been provided for the overall

improvement of the organizations in the future. This Thesis was conducted in 2011 in Kolkata,

India; so the information is relative to this city.



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• The survey was conducted in the Cafes in Malls in Kolkata only.

• This had to be done without the knowledge of the Café team.

• The target age group was 16-45.

• This survey was conducted in the month of April and May.

• It was conducted only on peak hours(11 am to 2 pm and 5pm to 8 pm).



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Interpretations and conclusions/summary

Customer Connect in any form of business is very essential. From the survey conducted to

measure “Customer Expectations” it is evident that more and more people are starting to

experience the atmosphere provided by the Cafes. Moreover, we even see that where Café

Coffee Day has an edge over its competitor Barista when it comes to Ambience, Service and

Pricing, it does need to work on its Core Product, where Barista wins.

By Measuring Customer Expectations one can not only improve oneself but also come up with

new innovative and fresh ideas so as to increase customer satisfaction hence increasing Caféfootfall even more.

Café Coffee Day is projected as an “affordable” brand. This strategy has worked extremely well

so far, and Café Coffee Day got a high rating, both for their prices and for their value for money,

in the market survey.

The Café Coffee Day brand is, and always has been, extremely youth- oriented. Ina country

where over 40% of the population is under the age of 20, there is huge potential for Café Coffee

Day to become one of the country‟s largest youth brands. The untapped market share and

potential for growth is enormous.



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Recommendations

As far as customer Satisfaction is concerned Café Coffee Day is doing quite well. However, it

has to counter stiff competition from competitors and new entrants.

For Café Coffee Day:

• More range in food products

• Eggless pastries, momos wanted in menu.

• Magazines , newspapers and puzzles on table.

• Make seating less congested.

• Deduction in prices of some items.

• TV shows only DD1 in some cafes.

• Install coolers for outside seating.

Café Coffee Day has done extremely well so far to project itself as unaffordable youth-

oriented brand. But there are still certain areas where their brand needs to be much stronger.

With regard to the physical evidence associated with the brand, Café Coffee Day needs to do

a lot of work if they hope to catch up with Barista. My first recommendation for Café Coffee

Day is to clean up the décor at every outlet, wherever unnecessary advertising is taking place.

Although it might be an important source of revenue, long-term customer perception of the brandisn‟t very positive. Café Coffee Day would do better to provide promotional space for its

partners with the use of clever collaborations, and not printed advertisements and posters

everywhere. My second recommendation is that Café Coffee Day looks at its current

recruitment, selection and most importantly, its current training policies. Customers are not



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happy with the behavior and service of the staff, and Café Coffee Day is lagging far behind

Barista is this aspect.

For Barista:

• Lower prices for all products.

• Lower wait time

• Quicker service.

• Open more outlets.

• Want better music.

• Bring more variety in food

• Want More Indian food in menu.

• Keep environment a few feet outside cafes also clean.



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Limitations of the Study

For the project on “Promotional Strategies For Cafes In Malls”, I was not allowed to interact

with the Café team and also the customers inside the cafe at any point of time during the survey

i.e. my interactions were limited to just my friends online and also people going into the mall and

not the customers sitting in the café and also coming out of the malls and to the people in the

Regional office , Kolkata.

The study was conducted only for Cafes in Malls in Kolkata i.e. for the Cafes in the city only.



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Scope for future improvements

The Café Business is a booming one with an ever increasing customer base. If the existing

players play it right, they would without doubt manage to create a healthy market for themselves

creating a sort of barrier for new entrants.

Although a high rating has been received by both Café Coffee Day and Barista in most of the

parameters, both have to work on “pricing”. Moreover they need to keep updating their Cafes as

time passes. Café Coffee Day already has a separate department for digital marketing which has

been working on digital menus and other related aspects.

The Seating in the Cafes is good, but not as good as the prices they charge. Moreover cleanliness

of the Cafes is also important.

A lot of respondents did not like the fact that Café Coffee Day outlets and literature served as

prime space for allot of advertising and promotions. They felt as if the café‟s had been hijacked

just for advertising. This has to be taken care of.

The Café Coffee Day brand, although clearly a youth- oriented brand, lacks the power andstrength expected to maintain brand loyalty. The brand doesn‟t project a clear image to

customers about what Café Coffee Day is all about.

This could prove as a deterrent during future national and international expansion. If it does work

on these aspects, it will without doubt become on of the best Café chains in the world.



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Appendices



Bibliography

www.cafecoffeeday.com

www.barista.co.in

www.google.com

Philip Kotler,” Marketing Management

http://www.google.com/



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