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BARISTA COFFEE CO. LTD.

Prepared by : Group 11 Participants: Pankaj Gupta Pratik Ajmera Sagar Karan Saurabh Prasad

Marketing Management For Prof Joffi Thomas Indian Institute of Management Kozhikode

now a part of Sterling Group  Was quick enough to sense the latent need of customers  Targeted urban youth  Positioned itself as a fine cafe’.Organisation:  Barista Coffee is a coffee retailing chain.  Originally promoted by Java Coffee Company Ltd.. Company has po Decision:  Adoption of franchise model to further expand the chain  To reshape many components of Barista’s marketing strategy  Decisions related to pricing and product mix of Barista .

5 billion in 2002 to Rs. They concentrate on the value segment of the market and their business is driven by volume. . 5.Objective >> CEO’s appointment  To put Barista on growth track  Steer its expansion within country as well as in international market Coffee Market in India:  Two major kinds of Coffee lovers in India  Coffee lovers in Southern India  Intellectuals sharing strong bond with coffee  Coffee consumption grown from 68.000 tons in 2002 to over 80.000 tons in 2005  Non traditional coffee market went up from Rs.5 billion in 2005 Competitive Advantage: Other players in the market have adopted different strategies. 17. Café Coffee Day has an advantage of having backend integration support from parent company in terms of continue supply of coffee grown by its parent company.

a legacy created by it. fun and casual  More stress on experience economy. due to this experience enjoyed by them. they were willing to pay hefty sum for coffee  Had emerged as a strong brand due to intelligent positioning.Challenges Ahead:  It has created the image as a place to chill-out  More importance to experience than coffee vending  Only 45% customers visited Barista for coffee  Cool ambience relaxing. Adoption of Franchise strategy would . Franchising the stores will not serve the purpose as the franchises may not be able to offer the same experience customers are getting now. targeted at the premium customers. he actually pays for the experience enjoyed by him. Barista has been positioned in the niche segment. nicely designed cafes. Barista is positioned as itself as a brand providing that experience to its customers. Revising the prices should be one of the activities however making sure that the Brand Image and/or service level shouldn’t get impacted. perfect ambience and wide product assortments Recommendations: In an experienced economy customer does not pay for the commodity or service he is getting.

Barista should reduce prices. This will result in retaining existing customer base who come to Barista for experience of relaxed and fun hangout. This higher amount will cover . At the same time another major plan in order to furnish the above mentioned strategy should be to reduce the waiting time and queue / line at the counters. Also it should expand its footprints in international market. Barista may instead adopt a differentiate price strategy. this will help attract more customers. Incase Barista goes for franchise model. Lots of food chains like McDonalds and Dominos pizza have set such high standards that every out lets have same look and same quality.mean deteriorating current service levels as maintaining the control required to provide quality services would not possible. taste etc. service quality. At the same time it should try for backward integration with availing the coffee beans at lower prices to increase and / or maintain the margins. Company needs to undertake some promotional activities to attract more targeted customers to its outlets. it should set parameters for ambience. Barista may do so by providing assistance in interiors and training to service staff to be employed at franchise outlets. as customers at Sec A cities have more spending power and keeping in mind the shortage of places to hangout and chill they don’t mind paying little more. this would amount to more foot-fall and due to more footfalls barista might have to adopt strategy of serving more customers in less time. coffee serving. Though choosing Franchise may be a cost-effective way however the strategy or the marketing plan might not work favorably and could prove detrimental.

one could also meet it normal social responsibilities of mingling with people and some little merry making after the normal chores at office and work. . we also need to keep in mind that overlooking this Young Segment would result in more competition in the market and Barista should also look forward to tap this market.for the higher operational and rental expenses at Sec A cities. adapt stores to the consumers’ lifestyle. even if the stores cannibalize one another business. and blanket areas completely. customers at Sec B cities don’t have such spending capacities and as operational cost is less there it is justified to have different prices over there. However. As customers do spend more time at Barista cafés. Also we should understand that coffee is not a youngsters beverage. Coffee is a lifestyle and transforming this lifestyle into one of the first five needs and wants in a human’s life could totally change the way the Marketing is perceived. one after the other. shorten customer lines at individual stores. The company’s approach should cut down on delivery and management cost. and increases foot traffic for all the stores in an area. they will be happy with the food items being available at café. Alternatively it may develop its own food products Marketing Plan should include strategy which is fairly simple: increase the perception of high quality of a commodity product. The other strategy that it should also employ is to forge a relationship with people. To generate more revenue and in turn to earn better margins Barista should include more products in its offerings. People should understand that Barista could be one of the places where by spending a little amount of money. It can strengthen its tie-up with food chains to provide good quality food as it had done with Taj Hotels in the past.

and long-term associations. to carry out a promotion campaign to ensure that their target market is well aware of their current low prices. RECOMMENDATION & SUGGESTIONS Barista • Barista has an extremely strong brand image. Barista and Café Coffee Day have almost identical pricing. enterprise-wide energy on moving beyond a transactional mind-set as they develop trust-based. • That’s why my first recommendation for Barista is. mutually beneficial. and their own employees. • Another backlash of having such a strong traditional café brand image is that customers have very high expectations of the taste . This would help change customer perception and turn Barista into an affordable brand. specific. but Barista is still perceived as the more expensive brand. multifaceted manner. alliance partners. specifically with four key constituencies: customers. researchers at Booz Allen Hamilton and Northwestern University’s Kellogg School of Management surveyed 113 executives at a representative sample of Fortune 1000 companies and found that winning companies define and deploy relationships in a consistent. suppliers. top-performing companies focus extraordinary.Research indicates that relationships are indeed central to the sustained. superior performance of many of the world’s most successful companies. Connecting with the customers is highly essential in a business life that of Coffee Parlors. but they need to work hard on improving their customer perception of being and expensive brand. In late 2001. Although some companies will dub any concluded business deal a relationship.

they are not living up to expectations. Barista needs to work hard at this aspect. and slowdown in expansion Increased costs . and adjust store locations for optimum profits Motivate the employees and make them feel attached to the company: match the pay scale with the workload. especially for coffee and eatables products. Recommended action Focus on domestic market: achieve saturation.& quality of products. Barista should also look at the Taj. so that a café attendant delivers the coffee to the table. and either improve the taste & quality of eatable.because as of now. but it can go a long way in improving customer satisfaction. and a program of Potential related problem Decreased profits due to cannibalization of stores. install a reward for performance program to improve employee motivation.  This is especially important considering the international expansion Barista is undertaking. This may seem insignificant. their national suppliers for eatables and desserts. • My second recommendation is for Barista to look at its coffee beans suppliers and coffee brewing process to ensure that it is the best it can be. On a smaller note: the Barista delivery process should change. and losing customers to Café Coffee Day. or look at another supplier.

the “Corporate Ambassador Award” (an award for the best employee with regard to customer interaction and company support) Strengthen the training Increased costs program. run advertisement campaign (“it’s not your parent’s Barista”). and expand into colleges and universities Extend the contracts with coffee suppliers. Need to develop new products as coffee is not a teenager’s favorite drink. foster more local Younger generations may not be willing to pay a premium for a commodity. rather show how they have elevated the “experience” above a commodity Remind consumers of community involvement (Barista). and promote the commitments to origins program Reduce the perception of a bully by not adopting techniques to keep competition out. Increased costs Increased perception of large size corporation taking advantage of producers Reduced aggressiveness may result in reduced performance on a commodity market and loss of market share Increased perception of a large corporation spreading over the world “like a virus” . and set an annual training program to include all key employees from across the world in Seattle. set an online training center for all employees Appeal to the younger generations.

public service and give back to the community Expand and enhance the existing network by targeting new markets and diversification Risk of losing focus on the core business. Increased perception of a large corporation spreading over the world “like a virus” Increased costs Open up all levels to easy communication Compensate the reduction in advertisement By investing the same in realizing price strategy & quality Customer Loyalty and branding might get affected .