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COFFEE PARLOURS IN INDIA- HOTTING UP
PREPARED BY:Group 8
ABHISHEK.BANSALRAGHAVENDRA
MISKINKRITIKA PRABHAKAR
SURAJIT GOGOINIRAJ R
VAIBHAV MISRA
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OVERVIEW OF THE INDIAN COFFEE INDUSTRY
5th largest coffee producer in the world (3%
of the world production)
Avg. coffee consumption in India is 10 cups
per person p.a.
People in North India prefer instant coffee in
contrast with people in south who prefer filter
coffee
Late 90s saw an emergence in coffee
chains
In 2002, café < 200 with sales of $10mn
Major players : Café Coffee Day, Barista,
Qwiky’s
Starbucks is trying to enter the Indian
market
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GROWTH DRIVERS :
•Increased exposure to International Lifestyle
• Rise of the Demographic class
• Spending more time outside their homes
• Target segment is expected to be 300 mn
by 2010
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Barista
Came to India as a late entrant.
With 105 branches in 18 cities and annual sales of Rs.
650 million.
Recreated typical Italian neighbourhood espresso
bars in India.
Rapid innovation of their product offerings and focus
on a particular product.
Strategic tie-ups.
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Café Coffee Day
Started in 1996.
50 outlets in 9 cities by 2002, with an annual sales
of Rs. 100 million.
CCD provided a relaxing ambience with eye-
catching crockery and bright décor.
Mainly to attract teenagers, business meetings
etc.
promoted their paraphernalia such as caps, T-
shirts, and coffee mugs.
Paintings on the walls are a source of attraction.
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QWIKY'S
Started in 1999.
With 21 outlets in 5 cities and an annual sales of
Rs. 43 million in the year 2002.
It positioned itself as a place to hang out and
spend time leisurely.
The staff at Qwiky’s was trained to understand
body language.
Their customers were offered different varieties of
coffee including frothy or intense, icy or piping hot,
and aromatic and exotic coffee.
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SWOT analysis:-Strengths:- Quality products Claim to sell the best coffeeLarge Number of outletIn house sourcing of coffee beansEspresso-Highest selling coffeeLow set up costs.
Weaknesses:-
Expensive coffeeSelf service for the customersQuality of food- Stale breads
Opportunities:- Expanding coffee market Unrestricted operating hours (MVU) Other markets (domestic and coin vending) Scope for innovation in existing market.Large Untapped MarketTie-ups with other companies for promotion
Threats:- Imitation products Entry of Foreign players like Georgia, Starbucks Large unorganized market
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Café Coffee Day
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Café Coffee Day
SWOT Analysis
STRENGTH:Quality Products.India's largest retail chain of cafes.In house sourcing of coffee beans.RS.300 crores ISO 9002 certified company.
WEAKNESS Price of Products. Presence is negligible in small cities.Limited Target Audience.Follow the competitor strategy
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Café Coffee Day
OPPORTUNITIES:Market is growing very fast.Most of Indian market is untargeted.Indian culture is changing.
THREATS:Barista.Foreign competitors are ready to launch.Local coffee vendors.
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SWOT ANALYSISStrengths● Product diversification● Company operated retail stores,International stores (no franchise)● Good relationships with suppliers● Industry market leader● Product is the last socially acceptedaddiction● Widespread and consistent● Strong financial foundation
Weaknesses● Size● Lack of internal focus (too much focus onexpansion)● Ever increasing number of competitors in agrowing market● Self cannibalization● Cross functional management● Product pricing (expensive)
Opportunities● Expansion into retail operations● Technological advances● New distribution channels (delivery)● New products● Distribution agreements● Brand extension● Emerging international markets● Continued domestic expansion/dominationof segment
Threats● Competition (restaurants, street carts,supermarkets, other coffee shops, othercaffeine based products)● Coffee price volatility in developingcountries● Consumer trends toward more healthy waysand away from caffeine● Alienation of younger, domestic marketsegments
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SWOT OF QWIKY’S
Strengths – Positioned as a “fun” brandPerceived as a premium brandHigh quality
WeaknessReal-estate based pricingLow availabilityLow marketing communicationPlace advantage of existing players
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OppurtunitiesExpand into other territoriesSell Qwiky’s merchandiseOffer more food items
ThreatsInternational playersOther established players
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QUESTION NO 1
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Barista’s Stratergies
Lifestyle brand with Italian neighborhood
Brew masters from Italy to create blend
Alliance with Tata
Make customer’s occasional indulgence into a
habit
Store-in-store concept with specific themes
Branded merchandising
Home brew segment – fresh coffee
Tie ups with ABN Amro and BPCL
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CCD’S STRATEGIES
Informal ambienceCool hang out for college crowd and teenagersRevamp in 2001“A lot can happen over coffee”Café jockey Main target – commercial and residential clusters in metrosAlso targeted corporate houses, mall, airportPrice 20% lower than competitorsMass market brand
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QWIKY’S STRATEGIES
Make customers feel comfortable & have fun
Staff trained to understand body language
Targets “young at heart” customers
Customers were given choice of drink not
common in India
Strategic point frequented by youth
Prices based on real-estate prices of the area
Ready to drink coffee sachets
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Strategy suitable for Indian market
Barista’s strategy suitableUniqueness in interiors with Indian neighborhoodServed international varieties of coffeeIndian coffee with Italian brew mastersAlso serves “good” foodBarista – a status symbolInternational expansion plansCo-branding with banks for credit cardsNew and different
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QUESTION NO 2
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Barista’s segmentation strategy
Targeted the elite class
High potential
Spending capacity high
MDs, doctors, SW engineers, Managers
Prefer being in luxurious and classy places like
Barista
High potential segment
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CCD’s segmentation strategy
Positioned for the mass market
Targeted middle class, students and
house wives
Prices are much lesser than competitors
The segment has great market share
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Qwiky’s segmentation strategy
Targeted “young at heart” people
Positioned as a place to relax and have
fun
Friendly staff ensured that customers are
comfortable
Place to hang out
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QUESTION NO 3
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Starbucks v\s barista
Barista is competitively better placed to face the
competition from star bucks.
Barista is the leader in the coffee retailing business.
The value added services and ambience offered in
Barista helps it, maintain its growth.
Star bucks are an international player and it may
give tough competition to the local players.
But Barista with its ambience and services would
maintain its growth.
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QUESTION NO 4
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Intense competence in coffee business may cause consolidation
The coffee retailing business in India is highly
growing. It may cause intense competition between the
players.
Consolidation may take place to create their strong
presence in the Indian market and expand their chain
globally and become an international player.
Many international players are lining up big
expansion plans in India.
So to give the international players a tough
competition, local players may merge to create their
impact
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thanlyou
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