Principal of marketing

CASE STUDY: COFFEE WARS IN INDIA:

CAFÉ COFFEE DAY 2013
Nidhish patel (x03014)
Vaibhavi patel (x03018)
Shyam sagar (x0321)
Harshal shah (x03026)
Problem Statement:

With the entry of Starbucks, the world's

leading coffee chain company in India's
metropolitan cities with local giant, Tata,
and promises of a national roll out, CCD
management is worried about the future
actions or business decisions to make in
response to the change in market
condition.
 Alternative solutions:
1. CCD should focus on reducing its fixed costs. Cafe Coffee day should start focusing on franchise based
outlets as establishing one's own outlet is a very costly business as that will incur huge initial investments and
fixed cost. With that CCD should concentrate on reducing its other fixed costs (Outsourcing Manpowers) and
other operating costs so that it can generate bigger profit margins.

2. Rather than expanding its business via maximizing retail outlets, CCD should explore and modify its outlet in
which it can have a higher customer base in metropolitan areas. To cope up with the competition with
Starbucks, CCD should focus on opening luxury outlets in the metropolitan cities and the cities where
Starbucks is planning to open its outlet

3. CCD should focus on its marketing activities for that, CCD should start selling its packaged based products
(Coffees) to provision store/retail shops so that it can impact on normal consumers and should remain in the
competitionAnother marketing strategy is to go for an advertising campaign, as Starbucks is not going for any
advertising but uses its brand image and market reputation. If CCD wants to capture the advertisement
segment it should go for a social media campaign which will target its younger customer base which is the
most customer base of coffee drinkers in India.

4. They should clearly focus on increasing its profit margin as Profit margin of Coffee Day is very low. On
turnover of 179 M they are earning profit of merely 0.02 M which is 0.011% of total turnover. 
Recommendation solution
In 2013,CCD has more than 1454 stores in India which is 7
times higher then the next chain that is Barista (180 stores). From
the last three years, although sales of food, beverages and other
items are increasing but due to rise in fixed expenses and
depreciation cost, Net profit is continuously decreasing. To
overcome this scenario CCD should concentrate only on outlets
which are generating higher revenues and  the non performing
oral though they are modifying their brands. Rather than
expanding its business via maximizing retail outlets, CCD should
explore and modify its outlet and services in which it can have a
higher customer base in metropolitan areas