COFFEE PARLOURS IN INDIAHOTTING UP

ABHISHEK.BANSAL RAGHAVENDRA MISKIN KRITIKA PRABHAKAR SURAJIT GOGOI NIRAJ R VAIBHAV MISRA

PREPARED BY: Group 8

OVERVIEW OF THE INDIAN COFFEE INDUSTRY
ü 5th largest coffee producer in the world (3% of the world production) ü Avg. coffee consumption in India is 10 cups per person p.a. ü People in North India prefer instant coffee in contrast with people in south who prefer filter coffee ü Late 90s saw an emergence in coffee chains ü In 2002, café < 200 with sales of $10mn

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

Barista
ü Came to India as a late entrant. ü With 105 branches in 18 cities and annual sales of Rs. 650 million. ü Recreated typical Italian neighbourhood espresso bars in India. ü Rapid innovation of their product offerings and focus on a particular product. ü Strategic tie-ups.

Café Coffee Day

ü Started in 1996. ü 50 outlets in 9 cities by 2002, with an annual sales of Rs. 100 million. ü CCD provided a relaxing ambience with eyecatching crockery and bright décor. ü Mainly to attract teenagers, business meetings etc. ü promoted their paraphernalia such as caps, Tshirts, and coffee mugs. ü

QWIKY'S

ü Started in 1999. ü With 21 outlets in 5 cities and an annual sales of Rs. 43 million in the year 2002. ü It positioned itself as a place to hang out and spend time leisurely. ü The staff at Qwiky’s was trained to understand body language. ü Their customers were offered different varieties of coffee including frothy or intense, icy or piping hot, and aromatic and exotic coffee.

SWOT analysis:Strengths:Weaknesses:Quality products   Expensive coffee Claim to sell the best coffee Self service for the customers Large Number of outlet Quality of food - Stale breads In house sourcing of coffee beans Espresso - Highest selling coffee Low set up costs .

Opportunities:Threats:    Expanding coffee market Imitation products Unrestricted operating hours (MVU) Entry of Foreign players like Georgia, Other markets (domestic and coin Starbucks vending) Large unorganized market Scope for innovation in existing market. Large Untapped Market Tie-ups with other companies for promotion

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

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.

Café Coffee Day

Strengths ● Product diversification ● Company operated retail stores , International stores ( no franchise ) ● Good relationships with suppliers ● Industry market leader ● Product is the last socially accepted addiction ● Widespread and consistent ● Strong financial foundation Opportunities ● Expansion into retail operations ● Technological advances ● New distribution channels (delivery) ● New products ● Distribution agreements ● Brand extension ● Emerging international markets ● Continued domestic expansion/domination of segment

SWOT ANALYSIS

Weaknesses ● Size ● Lack of internal focus ( too much focus on expansion ) ● Ever increasing number of competitors in a growing market ● Self cannibalization ● Cross functional management ● Product pricing ( expensive ) Threats ● Competition (restaurants, street carts, supermarkets, other coffee shops, other caffeine based products) ● Coffee price volatility in developing countries ● Consumer trends toward more healthy ways and away from caffeine ● Alienation of younger, domestic market segments

SWOT OF QWIKY’S Strengths –
Positioned as a “fun” brand Perceived as a premium brand High quality

Weakness
Real-estate based pricing Low availability Low marketing communication

Oppurtunities
Expand into other territories Sell Qwiky’s merchandise Offer more food items

Threats
International players Other established players

QUESTION NO 1

Barista’s Stratergies
ü Lifestyle brand with Italian neighborhood ü Brew masters from Italy to create blend ü Alliance with Tata ü Make customer’s occasional indulgence into a habit ü Store-in-store concept with specific themes ü Branded merchandising ü Home brew segment – fresh coffee

CCD’S

STRATEGIES

ü Informal ambience ü Cool hang out for college crowd and teenagers ü Revamp in 2001 ü “A lot can happen over coffee” ü Café jockey ü Main target – commercial and residential clusters in metros ü Also targeted corporate houses, mall, airport

QWIKY’S STRATEGIES
ü Make customers feel comfortable & have fun ü Staff trained to understand body language ü Targets “young at heart” customers ü Customers were given choice of drink not common in India ü Strategic point frequented by youth ü Prices based on real-estate prices of the area ü Ready to drink coffee sachets

Strategy suitable for Indian market

ü Barista’s strategy suitable ü Uniqueness in interiors with Indian neighborhood ü Served international varieties of coffee ü Indian coffee with Italian brew masters ü Also serves “good” food ü Barista – a status symbol ü International expansion plans ü Co-branding with banks for credit cards ü New and different

QUESTION NO 2

Barista’s segmentation strategy

ü Targeted the elite class ü High potential ü Spending capacity high ü MDs, doctors, SW engineers, Managers ü Prefer being in luxurious and classy places like Barista ü High potential segment

CCD’s segmentation strategy

ü Positioned for the mass market ü Targeted middle class, students and house wives ü Prices are much lesser than competitors ü The segment has great market share

Qwiky’s segmentation strategy

ü Targeted “young at heart” people ü Positioned as a place to relax and have fun ü Friendly staff ensured that customers are comfortable ü Place to hang out

QUESTION NO 3

Starbucks

v\s

barista

ü Barista is competitively better placed to face the competition from star bucks. ü Barista is the leader in the coffee retailing business. ü The value added services and ambience offered in Barista helps it, maintain its growth. ü Star bucks are an international player and it may give tough competition to the local players. ü But Barista with its ambience and services would

QUESTION NO 4

Intense competence in coffee business may cause consolidation
ü The coffee retailing business in India is highly growing. It may cause intense competition between the players. ü Consolidation may take place to create their strong presence in the Indian market and expand their chain globally and become an international player. ü Many international players are lining up big expansion plans in India. ü So to give the international players a tough competition,

thanlyou

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