CCD Case

S RAMESH KUMAR AND ERIC MINJ
EXPLORING BRAND ASSOCIATIONS IN THE INDIAN CONTEXT:

CAFÉ COFFEE DAY
India has traditionally been a tea drinking nation. The association of youth culture and coffee drinking opened up
exciting avenues for the café market that earlier used to have lower priced offerings from udupi (small restaurants)
cafés. The organized café market—which was branded and professionally managed in terms of its marketing
efforts—in India was worth INR 93,100 million (INR 53 was equivalent to USD 1, in January 2013), and was
growing at 25–30% annually.** According to K Ramakrishnan, Chief Marketing Officer, Café Coffee Day (CCD),
“A café brand truly provides an opportunity for a completely sensorial experience.”*** Sensorial experience was
vital to a café brand. Brand associations formed an important part of the pre -consumption, consumption, and post-
consumption sensorial experience. CCD had a striking lead in the market. With brands such as Barista Lavazza,
Gloria Jean’s Coffees, and Au Bon Pain in the fray, the challenge for CCD was to strengthen its strategic brand
associations, taking several considerations into account. How should the brand differentiate itself from its
competitors? What were the dominant associations of the brand, and how could it use these associations? How did
loyal consumers of the brand perceive the brand? How did the brand’s associations have an impact on the brand’s
strategy on associations, especially at a crucial point in time when the category of cafés was developing in the
emerging market, with the likes of Starbucks poised for entry into the Indian context? How could the brand develop
unique associations and communicate these to its consumers?
CAFÉ COFFEE DAY IN A FIRST OF ITS KIND COMPETITIVE CONTEXT

Ramesh Kumar had been teaching marketing-related subjects for two and a half decades. His academic interests
included studying the Indian marketing context and analyzing text-bookish concepts and finding out how these
concepts could be used to find insights in a specific marketing context. He believed that practitioners could obtain
triggers from conceptual aspects that could be used for purposes of marketing strategy. The café context in the
Indian context presented very interesting challenges for the CCD chain of cafes. CCD was the pioneering brand and
the leader in this industry. The brand had created great deal of awareness about the elitist cafes with its premium
quality coffees and the unique ambience that encouraged groups of youngsters to meet and relax. For almost a
decade, the brand did not require a highly differentiated marketing mix approach as there was little competition. In
fact, the concept of cafes was introduced to India by the CCD chain of cafes. There have been several brands of
cafes that entered the Indian context. Starbucks, Barista, and Costa were these brands. Although CCD had a
significant lead in terms of brand familiarity, its locations, and the loyal customer base, the international brands were
aiming at the target segment that was readily available to CCD before the entry of the brands. Besides, the brand Bru
(from Unilever India) that was well-known to consumers for four decades had been opening cafes in certain
geographical regions. The context was a unique one in which almost two decades after market liberalization, the
Indian context had a brand of cafes (CCD) that had to defend itself to sustain the brand it had built over a decade.
Such a competitive situation (involving a café brand that had a monopoly in the market) was the first of its kind in
the Indian context. CCD’s brand strategy was therefore to build a differentiation that would provide a significant
advantage for the pioneering brand. The distribution (the place aspect of the marketing mix reflected in this context
by the locations where CCD was present) was the major advantage that CCD had over its competitors. However, the
other brands too, given their historical marketing prowess were likely to catch up with CCD on distribution in the
foreseeable future. The product offering (the P concerning product in the marketing mix) was unlikely to be a
significant differentiator as all the brands were likely to provide similar offerings over time. With CCDs ownership
**
Bapna, A., “One black coffee please,” The Economic Times, March 14, 2012.
***
Ibid.
S Ramesh Kumar, Professor of Marketing and Eric Minj, Relationship Manager at Akamai Technologies, Bangalore prepared this case for class
discussion. This case is not intended to serve as an endorsement, source of primary data, or to show effective or inefficient handling of decision
or business processes.
Exploring Brand Associations in the Indian Context: Café Coffee Day Page 2 of 11
of coffee estates, the brand may have an edge over the other brands in some aspects of pricing (another P of the
marketing mix). Finally, even CCD, the pioneering brand launched its TV advertisement only after a decade or so
(the other P related to promotion in the marketing mix elements). Given the marketing mix elements, Kumar felt that
the brand associations of CCD were something that would matter to the brand in the long run. Given the vibrant and
fashionable target segment , brand associations were likely to pose interesting challenges to CCD because (1) there
was a symbolic appeal that was ingrained in the brand (fashionable and vibrant youngsters spending time in the
cafes), (2) such an association was generic to the category of cafes itself and hence as a pioneering brand, CCD had
to take the lead to create an association that would be exclusive to its brand, and (3) given the consistency of brand
positioning required for a brand, CCD had to come up with an analysis of brand associations that would enable it to
use its current brand associations that were present among consumers and also make use of these associations to
create unique associations that would provide long-term advantages. The dominant part of the brand strategy of
CCD therefore was dependent on how well it would be able to devise its brand associations. Most successful brands
in diverse categories of products or services were the ones that had created and nurtured unique brand associations:
the present context provided the right timing and had created an opportunity for CCD to pursue such a strategy,
especially when the brand had been present long enough in the Indian context to have loyal followers.
THE INDIAN COFFEE RETAIL MARKET

The organized coffee market in India was estimated to be worth around INR 6 billion (2010).1 With changing
lifestyles, growing disposable incomes, increasing urbanization, and a higher frequency of get-togethers becoming a
part of the lifestyle of the country’s youth, the potential for cafés in India had opened up. One of the major drivers of
the India coffee market was urbanization. Urbanization led to the increase in demand for “ready-to-drink coffee” as
one of the alternatives to the other beverages popular among the youth, in turn fuelling the growth of retail coffee
chains. This trend was supported by the 25% growth in the Indian non-carbonated ready-to-drink market.2 One of
the prime reasons for the steady growth of retail coffee chains had been ascribed as the transformation of coffee
drinking into a style statement.
The prominent brands in the Indian café market were CCD, and international coffee chains such as Barista Lavazza,
and Costa Coffee. Other coffee retail chains such as Starbucks were looking to tap the market potential. There were
about 1,800 retail outlets of the various leading coffee retail chains in India. CCD had 1,350 outlets and Barista
Lavazza had the next largest number of café outlets (318).3 As of 2010, CCD had the largest market share (about
60%) in India. With Asia's second largest network of coffee estates (10,500 acres) together with 11,000 small
growers, CCD exported coffee to the United States, Europe, and Japan.4 CCD had 1,174 outlets in India, and a
presence in Karachi, Prague, and Vienna.5, 6
CONSUMER PROFILE OF THE READY-TO-DRINK COFFEE (RETAIL) MARKET

The favorable demographics in India created an ideal consumer base for the café outlets. More than 50% of the
Indian population was under the age of 25 years, and thus, constituted a huge consumer base for quick service
restaurants, fast food chains, and coffee outlets. The typical characteristics of this consumer base were:
Those in the 15–25 years age group typically were in the habit of eating out.
Their average spending at coffee retail shops was approximately INR 200.
Their busy work/study schedule supported the integration of coffee into their lifestyle.
The proliferation of the culture of “hanging out” and the rising frequencies of get-togethers and parties made this
segment of consumers an ideal target market for retail coffee chains.7
1
“Coffee Market: India,” Research on India Report, Overview Section, March 2011.
2
“RTD: India,” Euromonitor International: Country Sector Briefing, January 2011.
3
Malviya, S., “Starbucks eyes big bucks from India,” The Economic Times, October 20, 2012.
4
“Café Coffee Day: Company & mission,” http://www.cafecoffeeday.com/company-mission.php?mnid=3&lmids=3, accessed on February 8,
2012.
5
Mohapatra, D., “Café Coffee Day looks beyond South India,” Business Standard, July 20, 2010, http://www.business-
standard.com/india/news/cafe-coffee-day-looks-beyond-south-india/401863/, accessed on February 8, 2012.
6
Balasubramanyam, K. R., “Café Coffee Day: Coffee Raj,” Business Today, October 2, 2011, http://businesstoday.intoday.in/story/cafe-coffee-
day-in-promising-companies-list/1/18661.html, accessed on October 12, 2012.
7
“Coffee Market: India,” Research on India Report, Drivers & Challenges Section, March 2011.
COMPETITIVE LANDSCAPE
The Amalgamated Bean Coffee Trading Co. Ltd. (ABCTCL), which operated the CCD outlets, had been the leader
among the chains of cafés/coffee bars. Its business accounted for 37% of the sales value of the café/coffee bar chains
in 2010. Barista Lavazza, Java Green, and Costa Coffee were also among the top five brands in terms of sales value
in 2010. CCD owned 54% share of the category’s sales value (of the chains), closely followed by Barista Lavazza.
Both chains diversified their offerings to increase transaction sales per outlet. In 2010, The Coffee Bean & Tea Leaf
expanded its outlet presence in India.8 Hindustan Unilever Ltd. launched Bru World Café in 2011.
CAFÉ COFFEE DAY

CCD was the pioneer in bringing the concept of cafés to India. The Bangalore-based retail chain started its
operations in 1996. Its mission was: “To be the best cafe chain by offering a world class coffee experience at
affordable prices.”9 The retail chain had aggressively expanded in the last decade and was geared up to educate the
Indian consumer about the nascent Indian café market. 10 With a huge Web presence and a fan subscription of over
1.3 million, CCD was poised to cater to the younger segment of the consumer base and attempted to become an
Indian mass value brand. The CCD product list covered a wide range of beverages and eatables designed to appeal
to Indian coffee and snack lovers. The prices of the CCD products had been set comparatively low (as compared to
some of the other café chains) in order to satisfy all its customers. CCD outlets were generally located near the high
street of towns and cities, entertainment centres, and gas stations, as well as near educational institutes such as
colleges, which gave an indication about their target consumer.11, 12, 13 Their tag line, “A lot can happen over
coffee”, signified the excitement, thrill, and romantic nature of youthful lifestyles. The targeted segments could be
observed to be working professionals who were over 29 years old as well as students between the ages of 15 and 29
years looking for a place to meet friends and hang out.14 Across the nation, CCD had an average footfall of over 500
daily, with 80% of its visitors in the 15–29 years age group.
BARISTA LAVAZZA
Barista, the flagship brand of Barista Coffee Company Ltd., was a significant brand in the Indian specialist coffee
shop format. The company was acquired by Luigi Lavazza S.P.A. in 2007.15 In comparison to the other leading
coffee retails chains, Barista Lavazza used premium positioning. In contrast to the CCD business model of licensing
franchises, Barista Lavazza operated with a network of company-owned stores. Barista Lavazza was the second
largest player in the café/coffee bar category in terms of sales value in 2010. Its market share was around 21.9% in
the category of specialist coffee chains in India. Barista Lavazza served as a major promoter of the café culture in
India since 2000. The brand promised “a truly Italian coffee experience in warm, friendly and relaxed
environment.”16 With over 300 outlets across 30 cities in India, Barista Lavazza proposed “to provide a comfortable
place for people to unwind over interesting conversations and a cup of coffee.” Barista Lavazza’s targeted segment
consisted of young adults (21–30 years old), who supported and followed global lifestyles and appreciated “the
authentic flavours and tastes of coffee”. 17 Barista Lavazza covered a diverse variety of coffee/beverages, ranging
from premium international coffees to mocktails. Their menu included a diverse variety of eatables as well, to
increase the transaction value per sale.
8
“Café/Bars in India”, Euromonitor International Report, July 2011.
9
“Café Coffee Day: Company & mission,” http://www.cafecoffeeday.com/company-mission.php?mnid=3&lmids=3, accessed on February 8,
2012.
10
“India’s largest coffee chain prepares to take on Starbucks,” Knowledge@Wharton Today, February 22, 2012,
http://knowledgetoday.wharton.upenn.edu/2012/02/indias-largest-coffee-chain-prepares-to-take-on-starbucks, accessed on March 15, 2012.
11
“Café Coffee Day: Our Café,” http://www.cafecoffeeday.com/our-cafe.php?mnid=1&pcid=1#, accessed on February 12, 2012.
12
“Café Coffee Day: Locate an Outlet in your City,” http://www.cafecoffeeday.com/locate-an-outlet.php?mnid=1, accessed on February 12,
2012.
13
“About us: Café Coffee Day business development,” http://newsites.cafecoffeeday.com/aboutus.htm, accessed on February 12, 2012.
14
“News: Café Coffee Day business development,” http://newsites.cafecoffeeday.com/news.htm, accessed on February 12, 2012.
15
“Barista Coffee Co. Ltd.: Consumer foodservice,” Euromonitor International Report, July 2011.
16
“Barista Lavazza: Company,” http://www.barista.co.in/users/company.aspx, accessed on February 12, 2012.
17
“Barista Lavazza: Corporate profile,” http://www.barista.co.in/users/mediacenter.aspx, accessed on February 12, 2012.
METHODOLOGY
The purpose of the case study was to enable CCD to differentiate itself from the other specialty coffee retail chains,
and to strengthen its brand associations among its loyal consumers, especially while the category of cafés was new
in the Indian market—the concept of coffee cafés was about a decade old in the country. The primary direction of
the case study was to ascertain in detail the associations across three segments of consumers—loyal customers of
CCD, loyal customers of Barista Lavazza, and prospective loyal customers of cafés who had visited a café only once
or twice and had liked the brand experience, but were not yet loyal to any café when the study was conducted.
The loyal customers that comprised the first two segments of consumers were defined as the consumers of a brand
who had made a minimum of five visits to the brand’s café in the last 6 months; the first set of respondents was
associated with the CCD brand and the second set of respondents was associated with the Barista Lavazza cafés.
Brand associations as a dimension of competitive strategy was suggested by papers on brand associations.18, 19
Though CCD’s target segment consisted of consumers in the age group of 15–29 years, the study included
respondents in the age group of 22–30 years in order to cover the target segment of CCD’s dominant competitor,
Barista Lavazza.
A total of 105 respondents were chosen for the study, 35 each for the three categories of respondents. The study was
carried out through personally administered questionnaires. The data was collected by a professional agency in March
2012. The list of associations was scored by the respondents on a 5-point Likert scale, with 1 indicating a low response
and 5 indicating a high response. The items reflected in the questionnaire were developed in the form of associations.
Prior to the study, the authors interviewed three loyal consumers of cafés to understand the type of associations
that could be relevant to cafés/coffee bars, and the findings were incorporated into the questionnaire that was used.
Exhibit 1 provides the responses of the non-loyal respondents—those who were not loyal to any café brand at the
time of filling in the questionnaire, but had liked the café experience based on their one or two earlier visits—about
cafés in general. Exhibit 2 provides the responses of the loyal consumers of the CCD brand, and Exhibit 3 provides
the responses of the respondents who were loyal to the Barista Lavazza brand. Exhibit 4 depicts the appearance of a
typical CCD outlet.
Ramesh Kumar had to decide on how CCD should analyze the associations that were obtained from the research
survey. The associations should (1) reflect the current perception among the consumers of CCD (both loyal to its
brand and other consumers who may have tried the café category), (2) reflect associations of the closest competitor,
(3) be useful in developing a useful brand strategy for CCD (specifically, a brand equity strategy that would have
brand associations as a strong differentiator among the other brands of cafes), and (4) the CCD associations should
ensure that its brand borrows, but does not use the generic associations that are connected with the category of cafes.
The applications of brand equity theories and consensual maps seemed to be an interesting combination, both from
the viewpoint of Ramesh Kumar’s interests and the practical reality that was associated with CCD.
18
John, D. R., Loken, B., Kim, K., and Monga, A. B., “Brand concept maps: A methodology for identifying brand association networks,” Journal
of Marketing Research, 2006, Vol. XLIII, 549–563.
19
Till, B. D., Baack, D., and Waterman, B., “Strategic brand association maps: Developing brand insight,” Journal of Product & Brand
Management, 2011, Vol. 20(2), 92–100.
Exhibit 1
Non-loyal respondents’ responses related to the associations of coffee cafés in general
Q List of Associations Average
1 It is an expensive brand of coffee. 4.23
2 The brand’s customers are young and highly aspirational. 3.85

3 This place is for everyday coffee lovers. 2.53
4 The people who visit this place are tech savvy and possess the latest gadgets. 3.33
5 The aroma of this brand of coffee is very pleasant. 3.63
6 This brand is meant to dissociate the coffee drinking habit from being a mundane activity. 3.03
7 The coffee is priced competitively. 2.33
8 The people who drink this brand of coffee are professionals and are sophisticated. 3.38
9 The brand’s café is a place to hang out. 3.9
10 The brand’s café is the perfect place to enjoy solitude. 2.7
11 The brand projects a sophisticated image. 3.8
12 It is a trend to drink the brand’s coffee. 3.63
13 The brand’s coffee makes one feel proud about drinking coffee. 3.08
14 The brand reminds me of my friends and the times we spent together. 3.45
15 The brand’s café is a place for recreation, appropriate for one to enjoy and have fun. 3.63
16 The brand’s café is a place to spend time with friends. 3.9
17 The prices are reasonable and affordable. 2.48
18 The customers are urban people who follow the latest fashion. 3.58
19 This brand is meant for highly recognised people. 3.1
20 The brand has the authentic colour of coffee. 3.28
21 Consuming this brand of coffee makes one feel refreshed and energised. 3.43
22 The brand uses quality ingredients. 3.48
23 The brand’s café is a place to meet new people. 2.55
24 The decor of this brand’s café reminds people of luxury. 3.25
25 The strength of this brand’s coffee is appropriate and has a lasting effect. 3.30
Exhibit 1 (Continued)

26 One feels westernised while drinking the coffee associated with this brand. 3.35
27 The brand’s café is a place to have formal meetings. 2.95
28 This brand stands for quality coffee that guarantees satisfaction. 3.5
29 The entire setting of this brand’s café such as its interiors, lighting, decor, etc. creates excitement. 3.5
30 A large variety of beverages is available at this brand’s café. 3.33
31 The interiors of this brand’s café make one feel relaxed. 3.58
32 The brand highlights one’s status. 3.53
Source: Field survey conducted by the authors in March 2012.

Note: The scores were marked on a scale of 1–5. A higher score reflected a higher magnitude of the response.
Exhibit 2
Responses of the first set of loyal respondents related to Café Coffee Day’s associations


17 The prices are reasonable and affordable. 3.60


Exhibit 3
Responses of the second set of loyal respondents related to Barista Lavazza’s associations



17 The price is reasonable and affordable. 3.74



Exhibit 4
A typical Café Coffee Day outlet
Source: Personal photograph taken by the authors.
i
The authors would like to thank K. Ramakrishnan, Chief Marketing Officer, Café Coffee Day and Devauti, Manager (Public Relations), Café
Coffee Day for their support during the preparation of this case. They would also like to thank Prof. Dinesh Kumar, Chairperson (Research &
Publications), Indian Institute of Management Bangalore for the financial assistance provided for the preparation of this case.

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S RAMESH KUMAR AND ERIC MINJ

EXPLORING BRAND ASSOCIATIONS IN THE INDIAN CONTEXT:

CAFÉ COFFEE DAY IN A FIRST OF ITS KIND COMPETITIVE CONTEXT

THE INDIAN COFFEE RETAIL MARKET

CONSUMER PROFILE OF THE READY-TO-DRINK COFFEE (RETAIL) MARKET

CAFÉ COFFEE DAY

Q List of Associations Average

1 It is an expensive brand of coffee. 4.23

2 The brand’s customers are young and highly aspirational. 3.85

Q List of Associations Average

Source: Field survey conducted by the authors in March 2012.

Q List of Associations Average

1 It is an expensive brand of coffee. 2.31

7 The coffee is priced competitively. 3.29

20 The brand has the authentic colour of coffee. 3.71

Q List of Associations Average

32 The brand highlights one’s status. 3.57

Source: Field survey conducted by the authors in March 2012.

Q List of Associations Average

7 The coffee is priced competitively. 3.14

9 The brand’s café is a place to hang out. 3.26

Q List of Associations Average

30 A large variety of beverages is available at this brand’s café. 3.31

Source: Field survey conducted by the authors in March 2012.

Source: Personal photograph taken by the authors.

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