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Caffe caffeday

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case study on segmentation

case study on segmentation

Published in: Business, Technology

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  • 1. Pitch CMO Summit 2011: Cafe coffeeDay – A great hang-out According to an estimate, per capita consumption of coffee inIndia is 82 grams per person per year compared to USA where the per capita consumption is four kg.Thus, India offers a huge growth opportunity for coffee market in India.The ChallengeBut the challenge here was to cater to the taste and mood of today‟s vibrating customers. “The majorchallenge is that consumers‟ taste is getting ephemeral. So, a brand has to keep introducing new tasteand change faster than the consumers do today,” says K Ramakrishnan, President, Marketing, CaféCoffee Day (CCD).Also, the challenge for CCD was to meet consumers‟ diverse expectations as they are not uni-dimensional in their approach, as Ramakrishnan says, “Youth today are doing multiple things at the sametime. They are surrounded by music, romance, sports, and career challenges and so many other thingssimultaneously.”The StrategySo, CCD looked at business in two ways. First, from a perspective of selling coffee and second,becoming a hangout place for different occasions. Rather than being a product or aservice, it aimed to become part of consumers‟ life.The cafe chain designed its strategy on the basis of consumer insight that “youth today are increasinglylooking for nearby hangouts amidst their hectic work schedules and changing lifestyle. Also, they lovefreedom and are bold while expressing their opinions.” So, CCD offered them hangouts where they canspend leisure time.Other insight was that today‟s generation is more confident and believes in what it thinks. “Earlier, peoplewere from the „I-we-us generation‟ which believed in belonging to a family or a society or a group. In1980s and 1990s, this started to change as a new breed of generation came claiming „I am a stargeneration‟. From this, today‟s generation has moved on to „I am what I am generation‟,” says Ramki,adding, “They say they don‟t need to belong to any defined order. So, if a brand wants to talk to them,they should talk in the way they would like to listen.”The ImplementationSo, CCD did not go for a particular positioning. It was left to consumers on how they would like to see thecoffee chain. For example, CCD is a dating parlour for some folks. It is a place where some interviews areheld. It is also a place where one can wait for somebody. As a result, the CCD outlets mean differentthings to different people. “CCD offered consumer to decide what they thought of a CCD outlet. The
  • 2. objective here is to endear consumer, make them a partner and make them join the CCD group,” saysRamakrishnan.The chain also felt that engaging with customers was more important than just informing them amidst adeluge of information. Therefore, instead of going for „brand communication‟, CCD went for „brandconversation‟. The brand used social media as a platform to reach out to fans and start conversation withthem. At the same time, it utilised the platform to become a symbol of collective individualism whichtoday‟s youth practice. It played a catalyst on its Facebook page to engage consumers in meaningfulconversation where they could express their opinion on the brand. The CCD philosophy, according toRamakrishnan, is “Don‟t talk at consumers. Talk with them. Be part of the group that your consumersare.”Realising that there was no possibility of typecasting, the chain did a lot of co-creation in terms of itsproduct development through consumer engagement on social media platform. “If their (customers‟) tasteis ephemeral, then changes in your offerings have to be swifter, faster and you should keep it moving on.So, conversation with millions of our fans help us to decide what our next menu will be,” saysRamakrishnan.CCD also handled its social media campaign very cautiously. While it remained open to receiveconsumers‟ criticism, it believed in being fair to them by addressing their concerns in a very constructiveway. “If you are fair, your fans and consumers will definitely be giving you a chance. They don‟t post aproblem saying solve it now, here and immediately. They get out of hand when you don‟t respond to it,”says Ramakrishnan, adding, “Consumers are always ready to give yet another chance to a brand if it issincere about solving an issue.”ResultsCCD has not only realised the potential of the market in the country but also created a new coffee culturein India. It is the success of CCD that has pushed the international players like Starbucks to foray into theIndian market. With its 1,180 cafes, and a million fans on its Facebook page, CCD has itself become aplace for branding and marketing. Having gone for expansion with its operational efficiency basis trainingmechanism, supervisory mechanism and audit mechanism, the chain aims to reach to a number of 2000cafes by 2014.