SUBJECT:- MARKET RESEARCH<br />STUDY ON:- INTRODUCING A COFFEE JOINT<br />NAMESROLL NO.<br />POOJA SATRA86<br />VIDHI SHAH94<br />URVASHI SHARMA96<br />SHIVANI VORA107<br />BACKGROUND OF OUR STUDY<br />India has always been predominantly a tea drinking nation. Coffee had been only moderately popular in some southern states. However, there has been a sudden change in this trend with coffee becoming more and more popular in recent times especially among the youth. Thanks to the new entrants in the segment including Barista, Café Coffee Day (CCD) and others. Cafés are increasingly becoming more than places to sip coffee. A lot many things in life and work happen over a cup these days. India has now become one of the fastest growing coffee markets in the world. It is taking great strides on both counts; making its presence in the world market as well as in the domestic retail arena as more and more Indians prefer the drink.<br />Indian consumers are yet to taste a ‘real’ cup of coffee. The futuristic machines and Barnie’s expertise promise a good cup of coffee. Players such as Barista and Cafe Coffee Day have introduced the coffee culture and, thus, the platform is ready for competition. <br />Especially when reports indicate that 60% of Barista's sales are brewed from teas, smoothies, food items and merchandise. The Cafe Coffee Day earns 70% of its sales come from beverages including coffee.And at Cafe Mocha, coffee sales are up from 14% per cent in 2002(when it first started) to 17%. (2005)If that's not of an enough eye-opener, according to a 2005 research report by the United Nations Food and Agriculture Organisation, India's coffee consumption has been increasing only at 2.2% per annum.<br />PROBLEM OF OUR STUDYrighttop<br />
To introduce a new coffee joint named<br /> ‘CUPPA COFFEE’ at national level with optimal finance.<br />
To test whether the coffee joint named ‘CUPPA COFFEE’ will be accepted by the customers.<br />RESEARCH OBJECTIVES<br />
To find different segments of customers who will accept the products and service of our new joint.
Price at which target market will be ready to accept the products of new joint.
How many minimum customers have to be attracted for its fruitfulity or breakeven point to cost?
Where should we strategically locate our first joint?
The kind of growth expected to be achieved due to its emergence.
How many competitors are present in the market?
To find what additional services customers are looking for in a coffee shop?
What kind of theme should be adopted for the coffee shop that would attract more customers?
METHODOLOGY ADOPTED<br />Descriptive research design<br />
SAMPLING<br />50 samples<br />50 surveys were sent electronically with initial return of 14 within three days of receiving them .A follow up phone call elected another 18 with another 9 being done face to face . In total 41 surveys were returned.<br />
Many customers are not satisfied with the value of money spent on their coffee.
Customers often prefer to visit a coffee shop with friends and colleagues.
Publicity of coffee shops is usually done through word of mouth.
Customers prefer to have a blend of quality, quantity, taste and value for money from the product.
Every competitor in the market has its own theme of execution.
There are many chain stores, nowadays, that have been opening small-sized coffee parlours to provide a neighbourhood coffee experience and lure more people.
Despite their best efforts, the question still haunting many of these players is how long will they be able to sustain these high cost, high turnover business models? How long before they are able to turn a tea drinking nation into coffee lovers?<br />RECOMMENDATIONS<br />
To develop a coffee shop which attracts more number of youth this is the major portion of customers.
To retain the customers at our coffee shop we can start with various coupon systems, credit card or membership offers for regular customers as well as to attract new customers.
Should concentrate more on quality and taste at competitive prices.
Innovative techniques such as digital ordering, Wi-Fi, 24hrs services etc should be introduced to have a competitive edge and also be a step ahead in the market.
rightbottomThe price range to be adopted should be from Rs. 40- Rs.60 as per the customer’s preference.
The location of the coffee shop should be near youth congregating area.
The themes that can be choosed for our coffee shop that is most appropriate are:
Here the environment is going to be where the staff will be dressed like a cow-boy or cow-girl giving a feel of being in Mexico along with where the furniture would be of wood giving a better feeling.
YesNo<br />SECONDARY DATA <br />INTERVIEW S <br />Friday, 27 September, 2002, 12:44 GMT 13:44 UK India's coffee bar revolutionCoffee is the new drink for IndiansBy Sanjeev Srivastava BBC reporter in Bombay A quiet cafe revolution is sweeping urban India with the proliferation of Italian-style corner coffee bars. Tea drinking nations like Britain and Japan have been converted to coffee drinking, and Indian consumers are seeking similar lifestyles right0Ravi DeolBarista coffee bar That is bad news for tea - still the favourite brew for a majority of Indians - which has been losing out to coffee in recent years. India is one of the world's largest exporters of tea and also one of its biggest consumers. But it is coffee drinking which is increasingly becoming a statement of young and upwardly mobile Indians. And coffee bars, an unheard of concept till a couple of years ago, are suddenly big business. Coffee culture Such is the demand for coffee bars, that the Barista chain - which opened its first cafe only last year in Delhi - is now opening a new outlet every 10 days. Taking its inspiration from Italian corner coffee bars and the US coffee chain Starbucks, Barista and other Indian chains are also trying to educate customers about the virtues and finer points to coffee drinking. rightbottomIndia's tea has fallen from fashion"
Consumers are converging, they're thinking alike, they're aspiring for similar products,"
said Ravi Deol, Barista's chief executive. "
Tea drinking nations like Britain and Japan have been converted to coffee drinking, and Indian consumers are seeking similar lifestyles."
Corner bars like these are offering more than just coffee and snacks to their customers. For many of their regular patrons, a visit to these bars is also a part of the western lifestyle they so much want to identify with. Youth appeal Now tea is being forced to fend-off the competition and tone up its own marketing muscle. Cha Bar - Delhi's newest hangout for the young and happening - is making an effort to look fashionable and chic to the younger generation. Indian tea companies are also worried as tea sales in the domestic market have begun to stagnate. Some of them have even begun to introduce western distribution concepts like vending machines to popularise the traditional Indian drink. Over the past few years, 50,000 vending machines have been introduced and this number is likely to double in the next few years. But as tea and coffee battle it out in swank big city restaurants and bars, the most significant volume of tea is drunk by villagers, villagers in small shacks along the roadside. As long as these roadside stalls continue to do thriving business, tea will have a safe future in India. <br />Introducing a coffee culture in a country largely dominated by tea drinkers ... of services and expects the same in India,"
<br />Coffee culture has grown by leaps and bounds in the country and cafes have become a hotspot for the young and old alike. With more and more outlets of Mocha, Cafe Coffee Day and Barista opening, the competition in the coffee space is getting tougher. In the midst of this, Mocha, which opened its first outlet in India in December 2000, is looking at going international, the first stop being Dubai after which Singapore follows.Now, with the foreign direct investment (FDI) allowed in the real estate of the retail sector, there will be better scope for companies like Mocha to improve and expand.Mocha CEO Riyaaz Amlani spoke to Indian television.com's Hetal Adesara on the sidelines of the just concluded KSA Retail Summit in Delhi, about Mocha's future plans, the competition and the growing coffee culture in India.Excerpts:How did the concept of Mocha originate and what about others operating in the same segment?If you believe in yourself and your ideas, there is nothing that can stop you. There is always room for originality. If you come up with a concept that is truly original, implement and execute it well. It will definitely work.When we started out with our first outlet in December 2000, there were no other players in the coffee space. We were aware of the big boys like Starbucks and other American companies, however. We definitely didn’t want to do a cut and paste job of replicating in India what Starbucks, for example, does abroad. We wanted to do something different and wanted our place to be a culture hub, which is conducive to social interactions. So, I’d say we are different from the other players like Café Coffee Day and Barista, which are somewhat based on the Starbucks model. What would you say is the differentiating factor between the other players and Mocha?Ours is a fully service restaurant, we’re not just a self-servicing model. We have a wider offering and larger number of footprints. Our average footprints are 3,500 square feet for each outlet. The average number of people who walk in are approximately 800 per day per outlet. In terms of coffee also, we have more variety than just the entry level coffee. How would the number of footfalls that you get per outlet per day compare with those of the competition?I don’t consider others competition. I believe they are partners in increasing and spreading the coffee culture in India. We definitely don’t consider them competition also because they are catering to people who want to spend 15-20 minutes, while we cater to people who want to spend an hour or so. It is a different segment within the coffee market that we target.Because we have a larger footprint concept, we definitely see two to three times more traffic than the other players. Considering the likes of Barista, Café Coffee Day and Mocha are partnering in pushing the coffee culture in India, what kind of growth do you predict?Well, it will increase but not exponentially. We are pretty much reaching a point of market saturation with the levels of infiltrations of Café Coffee Days and Baristas. I don’t see room for more players at this point in time with the coffee concept. And, there is definitely going to be a shakedown and at the end of the day, only two or three brands will survive. When do you think this shakedown is going to happen?The shakedown is likely to happen when all the big global players like Costa Coffee will enter the market. I personally feel that Café Coffee Day is pretty well placed to counter that kind of competition. I’m not too sure of the other players. When do you see the big guns from abroad entering the Indian market?It really depends on the foreign direct investment (FDI) norms and whether the players are given a level playing field or not. But there is going to be a shakedown, that is for sure. 'The shakedown is likely to happen when all the big global players like Costa Coffee will enter the market' How strong a presence does Mocha have in India today and what is the growth strategy going to be this year?We are present in four cities namely Delhi, Mumbai, Hyderabad and Ahmedabad. By the end of the year, we want to make our presence felt in Bangalore, Chennai, Kolkata, Pune and Chandigarh. Our growth strategy would be to strengthen presence in the existing cities and at the same time create awareness of our brand across the country. So how are you going about creating that national awareness? What we are doing is, is getting into a city and creating a lot of hype there around the brand. So, for example, in Mumbai, it will generate that buzz for us in nearby cities like Pune. Similarly, in Delhi we would do the same for nearby cities like Chandigarh. So we will be creating a buzz in opinion leading cities. Mumbai is the biggest opinion leading city and then comes Delhi. Will you be looking at advertising too as a vehicle to create awareness?No. We are not looking at advertising. I feel that it can be destructive in the case of F&B (food & beverages), unless you’re a single product where you need to increase the market size of your product. In that case, advertising can help. We have a variety of offerings. Are you looking at having a presence in the international market too? Yes. We have signed a deal in Dubai and are looking at opening three outlets there, which will be operational by September this year. And beyond Dubai? Right now we are looking at a place where we can fly to within three hours. Dubai is again a hub and lots of travel happens. It is also the right place to create a buzz around something new. Though nothing has been finalized till now, we are looking at opening an outlet in Singapore too this year. What sort of investments has been made considering the fact that Mocha is in a expansion mode?There is an average investment of about Rs 6.5 million per outlet. Over the next 18 months or so, what sort of investment are you looking at making in Mocha?We are growing via the franchisee route, so the investments are largely done by our franchisees. Right now, we are looking at investing in a strong management team to provide better support to the franchisees. We are going to be utilizing the funds to create a better management team and infrastructure in the markets that we are in. What sorts of revenue are you drawing in at present, and what's the sort of jump that you have witnessed over the past few years?At the end of the 2005 financial year (ending 31, March, 2006), we should draw around Rs 190 million in terms of revenue. In terms of group revenue, we closed FY 2004 at Rs 80 million. We have been growing year on year at this rate. Do you think you will be able to maintain this more than double digit growth year or year, or do you see the growth plateauing off?For us, yes because we are still nascent. We see this kind of growth for the next three to four years. Are there any immediate plans for changing or extending your model?We will be looking at an extension of our model for malls because right now Mocha is not a mall model. So, we will be creating a special model to be present in malls. And what would that model be?That model will have a limited offering and space. There won’t be a kitchen and it won't be a full service restaurant. Since it will be a brand extension, we will be going by another name, which will be Mocha Express. We’d be doing our pilot project in Mumbai for Mocha Express by the end of this year. After having done that, we’d evaluate how well that does and then decide if we want to scale on that or not.<br /> ARTICLES<br />BUSINESS LINE (THE HINDU GROUP) POSITIVE OUTLOOK FOR COFFEE DEMAND <br />G. K. Nair <br />Kochi, Sept. 18 If the current trend is any indication, the long-term outlook for coffee demand is bright mainly due to growth in specialised segments in mature markets and entry of new consumers in emerging markets.<br />This is evident from the upward revision, despite the economic recession, of world consumption figures for 2008 which confirms that the market has expanded at a healthy rate since the beginning of the decade, says the International Coffee Organisation (ICO).<br />World consumption in 2008 has been revised upward from 128.4 million bags (of 60-kg) to 130 million bags, indicating continued dynamism in the growth rate. <br />From 2000 to 2008, annual world consumption rose at an average rate of 2.4 per cent. The result in 2008 was mainly due to the increase in domestic consumption in exporting countries, in particular, Brazil, Indonesia and Mexico. Consumption also increased in Germany, Italy and UK, but a decrease has been observed in some importing countries such as France, the Netherlands and the Russian Federation. <br />In fact, with regard to 2009, there are no indications so far that the world economic crisis has had a significant impact on consumption.<br />This assessment is reinforced by the performance of exports in July 2009, which totalled 7.8 million bags, bringing the cumulative total for the first 10 months of the coffee year (October 2008 – July 2009) to 82.3 million bags compared to 80.2 million bags for the same period in 2007-08, an increase of 2.6 per cent, the latest ICO report said.<br />According to the ICO, although average monthly prices in August were higher than in July, the prices of all four groups seemed to be on a downward trend as the new crop year approaches in a number of countries. The fall may, however, be limited because the low level of opening stocks in exporting countries means that the supply/demand balance will remain tight.<br />The Colombian export performance in recent months continues to reflect the impact of adverse weather conditions that will probably bring production in 2008-09 down to around 10 million bags. Indian exports from January 1 to September 9, 2009, showed a decline of 32,800 tonnes at 1,36,262 tonnes as against 1,69,062 tonnes in the corresponding period last year.<br />On the other hand, Vietnam exported 1 million bags in July, bringing its total exports for the first 10 months of coffee year 2008-09 to15.7 million bags, significantly higher than in the same period of the previous year.<br />The monthly average of the ICO composite indicator price increased by4 per cent, from 112.9 US cents per lb in July to 117.45 US cents per lb in August. However, despite the level reached in August, a closer observation of daily price movements would appear to indicate a downward trend in the near term. <br />Unlike the Colombian Milds group which fell by 1 per cent, the other three groups recorded price increases in August. In the case of the Other Milds and Brazilian Naturals groups, prices rose by 6.3 per cent and 8.4 per cent respectively. In the case of Robustas, there was only a slight increase in prices (+0.93 per cent).<br />During the last week of August, the value of the US dollar rose against the currencies of some coffee exporting countries, particularly the Mexican peso, the Colombian peso, the Indian rupee, the Indonesian rupee and the CFA franc. In the case of importing countries, however, the value of the US dollar was slightly down against the euro during the last two weeks of August.<br />On the basis of the information provided by members, the latest figures for crop year 2008-09 indicate total production of around 126.7 million bags, the report said. This figure does not take into account a possible upward revision of the production figure for Vietnam, currently estimated at 16 million bags, which has exported more than 15.7 million bags in the last 10 months of the coffee year. <br />On the other hand, the figure for Colombian production could be subject to a further downward revision since its cumulative exports for the last 10 months of coffee year 2008-09 total 7.7 million bags compared to 10 million bags for the same period in the previous coffee year.<br />New falls in production have been recorded in Honduras, El Salvador, Costa Rica and Guatemala. The Brazilian authorities have just released a third estimate of the 2008-09 crop, which indicates an estimated total production of 39 million bags, comprising 28.4 million bags of Arabicas and 10.6 million bags of Robustas. The new estimate is slightly smaller, by only 70,000 bags, than the one released in May<br />CUP OF PLENTY FORECAST FOR COFFEE CROP <br />Vishwanath Kulkarni <br />Bangalore June 18 India’s coffee output for 2009-10 is forecast to be a record high of 3.06 lakh tonnes on the back of timely pre-monsoon showers in key growing areas of Karnataka that account for over two-third of the country’s produce.<br />BERRY BORER FEAR <br />However, Coffee Board officials said lurking fears of berry borer infestation and the possibility of heavy rains in July and August, which affected the output in the previous two years, could impact the estimates. <br />The post-blossom or initial forecast by Coffee Board comes on the back of one of the lowest ever crop harvested in the current coffee year (October 2008-September 2009) pegged at 2.62 lakh tonnes. <br />Forecast for the forthcoming crop included 2.04 lakh tonnes of robustas and 1.01 lakh tonnes of arabicas. In the recently ended harvest, India produced 1.82 lakh tonnes of robustas and 79,500 tonnes of arabicas, which were 5 per cent lower than the post-monsoon forecast of 2.76 lakh tonnes. <br />KARNATAKA’S SHARE <br />The board’s in its blossom estimates had forecast a crop-size of 2.93 lakh tonnes for 2008-09.<br />Of the additional 44,000 tonnes of coffee that’s expected to be produced in 2009-10, Karnataka would account for a lion’s share of 38,000 tonnes with the rest coming from Kerala and Tamil Nadu. <br />Karnataka is likely to produce 2.21 lakh tonnes as against 1.83 lakh tonnes in 08-09. Arabica output in Karnataka is pegged at 79,720 tonnes, higher than the country’s 08-09 output of 79,500 tonnes, while robusta output is forecast at 1.41 lakh tonnes (1.22 lakh tonnes in 2008-09). <br />Output in Kerala, that pre-dominantly grows robustas, is forecast to be at 59,550 tonnes, marginally higher than 08-09’s 55,775 tonnes. Tamil Nadu that grows more of arabicas is expected to produce about 3,300 tonnes extra at 19,550 tonnes. <br />Non-traditional areas such as Andhra Pradesh, Orissa and North Eastern States could see a marginal increase in output at 5,725 tonnes. <br />OPTIMISM REFLECTED <br />The Board’s initial estimate reflects the optimism shared by large growers and exporters such as Tata Coffee and others. “We expect the coffee crop to bounce back next year,” the Tata Coffee managing director, Mr M.H. Ashraff, had said recently.<br />At present, the coffee berry is the size of pepper. Though coffee in about 800 hectares in Chikmagalur and Kodagu has been affected by hailstorm, it is unlikely to have an impact on the overall output. However, the berry-borer that has infested some 13,000 hectares mainly in Karnataka seemed to be a cause of concern for the growers.<br />