Customer perception-and-attitude-towards-retail-coffee-chains-–-a-study-in-delhi-w.r.t-barista-ccd-nescafe1

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Mba Marketing Projects Based On Hotel Industry

Mba Marketing Projects Based On Hotel Industry

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  • 2. ACKNOWLEDGEMENTI would not have completed this project without the help, guidance and support ofcertain people who acted as guides and friends along the way. I would like toexpress my deepest and sincere thanks to my faculty guide NAME, for herinvaluable guidance and help. The project could not be complete without hersupport and guidance. I am also thankful to NAME for his help in completing theproject. They acted as a continuous source of inspiration and motivated methroughout the duration of the project helping me a lot in completing this project.
  • 3. INDEX1. Introduction to the topic2. Company profilea. Baristab. Café Coffee Dayc. Nescafe3. Research objective4. Research methodology5. Data analysis6. Future of coffee houses in India7. Conclusion8. Annexure1 – Questionnaire9. Annexure2 – Literature review10. Bibliography
  • 4. INTRODUCTIONToday Coffee has become a lifestyle. Also, it has caught the fancy of todaysgeneration - youth. These were not the typical coffee drinking target customers. Butnow they are a big part of the target base for coffeehouses. And it is fashionable tobe seen at the Coffee Pubs. It is in a way, a lifestyle statement.That is bad news for tea - still the favorite brew for a majority of Indians, which hasbeen losing out to coffee in recent years. India is one of the worlds largest exportersof tea and also one of its biggest consumers. But it is coffee drinking which isincreasingly becoming a statement of young and upwardly mobile Indians.And coffee bars, an unheard of concept till a couple of years ago, are suddenly bigbusiness. Corner bars like these are offering more than just coffee and snacks totheir customers. For many of their regular patrons, a visit to these bars is also a partof the western lifestyle they so much want to identify with.The Coffee retailing sector in India is booming today, with several companies activein the market. Some are local entities, some have come from abroad and have tiedup with local companies, and some seem to prepare themselves for an entry sooneror later. The market growth is expected to be 20 to 30% annually in the next coupleof years.Café Coffee Day (CCD) pioneered the café concept in India in 1996 by opening itsfirst café at Brigade Road in Bangalore. Till about the late 1990’s coffee drinking inIndia was restricted to the intellectual, the South Indian traditionalist and the fivestar coffee shop visitor. As the pure (as opposed to instant coffee) coffee café culturein neighboring international markets grew, the need for a relaxed and fun “hangout”for the emerging urban youth in the country was clearly seen.
  • 5. CoffeehouseA coffeehouse shares some of the characteristics of a bar, and some of thecharacteristics of a restaurant, but it is different from a cafeteria. As the namesuggests, coffeehouses focus on providing coffee and tea as well as light snacks. Thisdiffers from a café, which is an informal restaurant, offering a range of hot meals,and possibly being licensed to serve alcohol. Many coffee houses in the Muslimworld, and in Muslim districts in the West, offer shisha, powdered tobacco smokedthrough a hookah. In establishments where it is tolerated - which may be foundnotably in the Netherlands, especially in Amsterdam - cannabis may be smoked aswell.From a cultural standpoint, coffeehouses largely serve as centers of socialinteraction: the coffeehouse provides social members with a place to congregate,talk, write, read, entertain one another, or pass the time, whether individually or insmall groups.HistorySince the 15th century, the coffeehouse has served as a social gathering place inMiddle Eastern countries where men assemble to drink coffee (usually Arabiccoffee) or tea, listen to music, read books, play chess and backgammon, and perhapshear a recitation from the works of Antar or from Shahnameh. In 1457 the firstcoffeehouse, Kiva Han, was opened in Istanbul, just four years after its conquest bythe Ottomans. Coffeehouses in Mecca soon became a concern as places for politicalgatherings to the imams who banned them, and the drink, for Muslims between1512 and 1524. In 1530 the first coffee house was opened in Damascus, and not longafter there were many coffee houses in Cairo.In the 17th century, coffee appeared for the first time in Europe outside the OttomanEmpire, and coffeehouses were established and quickly became popular. The firstcoffeehouses in Western Europe appeared in Venice, due to the traffics between La
  • 6. Serenissima and the Ottomans; the very first one is recorded in 1645. The firstcoffeehouse in England was set up in Oxford in 1650 by a Jewish man named Jacob.Oxfords Queens Lane Coffee House, established in 1654, is still in existence today.The first coffeehouse in London was opened in 1652 in St Michaels Alley, Cornhill.The proprietor was Pasqua Rosée, the Armenian servant of a trader in Turkishgoods named Daniel Edwards, who imported the coffee and assisted Rosée in settingup the establishment. Boston had its first in 1670. Pasqua Rosée also establishedParis first coffeehouse in 1672 and held a city-wide coffee monopoly untilFrancesca Procopio dei Coltelli opened The Cafe Le Procope [2]in 1686. Thiscoffeehouse still exists today and was a major locus of the French Enlightenment;Voltaire, Rousseau, and Diderot frequented it, and it is arguably the birthplace of theEncyclopédie, the first modern encyclopedia.Though Charles II later tried to suppress the London coffeehouses as "places wherethe disaffected met, and spread scandalous reports concerning the conduct of HisMajesty and his Ministers", the public flocked to them. They were great sociallevellers, open to all men and indifferent to social status, and as a result associatedwith equality and republicanism. More generally, coffee houses became meetingplaces where business could be carried on, news exchanged and the London Gazette(government announcements) read. Lloyds of London had its origins in acoffeehouse run by Edward Lloyd, where underwriters of ship insurance met to dobusiness. By 1739 there were 551 coffeehouses in London; each attracted aparticular clientele divided by occupation or attitude, such as Tories and Whigs, witsand stockjobbers, merchants and lawyers, booksellers and authors, men of fashionor the "cits" of the old city center. According to one French visitor, the Abbé Prévost,coffeehouses, "where you have the right to read all the papers for and against thegovernment," were the "seats of English liberty.The banning of women from coffehouses was not universal, but does appear to havebeen common in Europe. In Germany women frequented them, but in England and
  • 7. France they were banned. Émilie du Châtelet purportedly wore drag to gainentrance to a coffehouse in Paris. In a well-known engraving of a Parisiancoffeehouse of c. 1700, the gentlemen hang their hats on pegs and sit at longcommunal tables strewn with papers and writing implements. Coffeepots areranged at an open fire, with a hanging cauldron of boiling water. The only womanpresent presides, separated in a canopied booth, from which she serves coffee in tallcups.The traditional tale of the origins of Viennese coffeehouses begins with themysterious sacks of green beans left behind when the Turks were defeated in theBattle of Vienna in 1683. All the sacks of coffee were granted to the victorious Polishking Jan III Sobieski, who in turn gave them to one of his officers, Franciszek JerzyKulczycki. Kulczycki began the first coffeehouse in Vienna with the hoard. However,it is now widely accepted that the first coffeehouse was actually opened by anArmenian merchant named Johannes Diodato.In London, coffeehouses preceded the club of the mid-18th century, which skimmedaway some of the more aristocratic clientele. Jonathans Coffee-House in 1698 sawthe listing of stock and commodity prices that evolved into the London StockExchange. Auctions in salesrooms attached to coffeehouses provided the start forthe great auction houses of Sothebys and Christies. In Victorian England, thetemperance movement set up coffeehouses for the working classes, as a place ofrelaxation free of alcohol, an alternative to the public house (pub).Coffee shops in the United States arose from the espresso- and pastry-centeredItalian coffeehouses of the Italian-American immigrant communities in the majorU.S. cities, notably New York Citys Little Italy and Greenwich Village, Bostons NorthEnd, and San Franciscos North Beach. Both Greenwich Village and North Beachwere major haunts of the Beats, who became highly identified with thesecoffeehouses. As the youth culture of the 1960s evolved, non-Italians consciouslycopied these coffeehouses. Before the rise of the Seattle-based Starbucks chain,
  • 8. Seattle and other parts of the Pacific Northwest had a thriving counterculturalcoffeehouse scene; Starbucks standardized and mainstreamed this model.In the United States, from the late 1950s onward, coffeehouses also served as avenue for entertainment, most commonly folk performers. This was likely due to theease at accommodating a lone performer accompanying themself only with a guitar,even with limited floorspace; the political nature of much of 1960s folk music madethe music a natural tie-in with coffeehouses with their above-referenced associationwith political action. A number of well known performers like Joan Baez and BobDylan began their careers performing in coffeehouses. Blues singer LightninHopkins bemoaned his womans inattentiveness to her domestic situation due toher overindulgence in coffeehouse socializing, in his 1969 Coffeehouse Blues.From the 1960s through the mid-1980s, many churches and individuals in theUnited States used the coffeehouse concept for outreach. They were oftenstorefronts and had names like The Gathering Place (Riverside, CA), The Lost Coin(New York City), and Jesus For You (Buffalo, NY). Christian music (guitar-based) wasperformed, coffee and food was provided, and Bible studies were convened aspeople of varying backgrounds gathered in a casual "unchurchy" setting. Thesecoffeehouses usually had a rather short life, about three to five years or so onaverage. An out-of-print book, published by the ministry of David Wilkerson, titled,A Coffeehouse Manual, served as a guide for Christian coffeehouses, including a list ofname suggestions for coffeehouses.FormatCoffeehouses in the United States often sell pastries or other food itemsCafes may have an outdoor section (terrace, pavement or sidewalk cafe) with seats,tables and parasols. This is especially the case with European cafes. Cafes offer amore open public space compared to many of the traditional pubs they havereplaced, which were more male dominated with a focus on drinking alcohol.
  • 9. One of the original uses of the cafe, as a place for information exchange andcommunication, was reintroduced in the 1990s with the Internet cafe or Hotspot(Wi-Fi). The spread of modern style cafes to many places, urban and rural, wenthand in hand with computers. Computers and Internet access in a contemporary-styled venue helps to create a youthful, modern, outward-looking place, comparedto the traditional pubs or old-fashioned diners that they replaced.International variationAmerican coffee shops are also often connected with indie, jazz and acoustic music,and will often have them playing either live or recorded in their shops. Coffeehousesare often gathering places for underage youths who cannot go to bars.In the United Kingdom, traditional coffeehouses as gathering places for youths fellout of favour after the 1960s, but the concept has been revived since the 1990s bychains such as Starbucks, Coffee Republic, Costa Coffee, and Caffè Nero as places forprofessional workers to meet and eat out or simply to buy beverages and snackfoods on their way to and from the workplace.In France, a cafe also serves alcoholic beverages. French cafes often serve simplesnacks such as sandwiches. They may have a restaurant section. A brasserie is a cafethat serves meals, generally single dishes, in a more relaxed setting than arestaurant. A bistro is a cafe / restaurant, especially in Paris.In Australian cities, a traditional European cafe culture is thriving as a result ofsignificant immigration from mainland Europe in the 19th century and 20thcentury. These establishments often cluster along certain streets and with theweather allowing curb side seating much of the year certain areas resemble a largeparty on a Friday or Saturday evening.In Malaysia and Singapore, traditional breakfast and coffee shops are called kopitiams. The word is a portmanteau of the Malay word for coffee (as borrowed andaltered from the Portuguese) and the Hokkien dialect word for shop. Menus typically
  • 10. feature simple offerings: a variety of foods based on egg, toast, and kaya (jam), pluscoffee, tea, and Milo, a malted chocolate drink which is extremely popular inSoutheast Asia and Australasia, particularly Singapore and Malaysia.In parts of the Netherlands where the sale of cannabis is decriminalized, manycannabis shops call themselves coffeeshops.In modern Egypt, Turkey and Syria, coffeehouses attract many men and boys towatch TV or play chess and smoke shisha.a. Barista CoffeeBarista Coffee is a chain of espresso bars in India. Headquartered in Delhi, Baristacurrently has espresso bars across India, Sri Lanka and the Middle East. It wasfounded in 1997, p Led by the dynamic duo of Ravi Deol & the marketing aceSandeep Vyas; Barista was the fastest brand to make it to the list of super brandsand is ranked among the top 50 phenomenons that changed India. Starbuckscorporations decided to enter into an agreement that allowed Barista Coffee to usethe brand for cafes as long as it allowed Starbucks to use the brand "Barista" forbrewing equipment. Italys Lavazza has now acquired Barista.Barista Coffee in India can be easily called the pioneers of ‘coffee culture’ in India.Established in February 2000 to recreate the ambience and experience of the typicalItalian neighborhood Espresso Bars. Barista Coffee aims to provide a comfortableand friendly place for people to relax and unwind over a cup of coffee.Ownership: Barista Coffee Company is owned by Lavazza, Italy’s largest coffeecompany. Lavazza is one of the most important roasters in the world, a leader inItaly with a 46.5% share of the retail market (in value, source: Nielsen). It operatesin over 80 countries, in the Home and Away-from-Home sectors (Foodservice,Vending and Retailing). In 2006 sales totalled USD 1.2 billion.
  • 11. Outlets: Barista at present has over 170 Espresso Bars and 7 Barista Crèmes in over29 locations: Delhi, Gurgaon, Bangalore, Hyderabad, Kolkata, Mumbai, Chennai,Pune, Ghaziabad, Noida, Chandigarh, Mohali, Dehradun, Shimla, Mussorie, Jaipur,Kanpur, Lucknow, Bhopal, Indore, Bhubaneshwar, Ahmedabad, Baroda, Cochin,Coimbatore, Manipal, Guwahati etc. making it one of the largest retailers of specialtycoffees in Asia. Barista further has laid international footprints in Sri Lanka (4outlets), Oman and UAE (6 outlets).Ambience: Barista Coffee is not just about drinking coffee but also about the entireexperience. At Barista the ‘Joy of Coffee’ is reflected in the warm ambience, theexotic flavours and the friendly service provided by the brew-masters. To add to theinformal ambience, Barista Espresso Bars offer games like Scrabble, Pictionary andBattleship for the guests. Barista Espresso Bars were the first place where thecustomers were called by their first names to create an atmosphere of informalityand friendliness. Barista in its outlets have Wi-Fi enabled corners for executives-on-the-go. Open seven days a week, most Barista Espresso Bars begin brewing from 10a.m. and are open till late night.Coffee: Barista Coffee places strong emphasis on the quality of coffee beans and theprocess of preparing, rich aromatic coffee. The coffee is created with carefully handpicked mature cherries of the Arabica coffee plant, ensuring a uniform and highquality harvest. This 100% Arabica coffee is sourced from Tata Coffee’s plantationsin Karnataka, India. House blend beans are sourced and roasted in India by TataCoffee. The international coffees such as Costa Rican, Kenyan and Jamaican BlueMountain are sourced from the respective countries and custom roasted in Italy.Food: In an attempt to further enhance the experience at the Barista Espresso bars,it has on offer a delicious snacks and dessert menu. On offer are authentic Italianfood items such as biscottis, paninis, wraps, twisters, puffs, sandwiches and othermunchies to go along with its wide coffee range. To cater to the sweet tooth, Baristaalso offers mountains of ice creams, oodles of chocolate, chunks of crumbly applepies, walnut brownies etc.
  • 12. AwardsBarista – the Super Brand• Barista received the coveted Retail Award, voted by consumers as the Mostadmired retailer of the year 2007: Catering Outlets at the 4th IMAGES RetailAwards (IRA) 2007, felicitating India’s top performing companies and professionalsin the business of retail. • Barista has also been voted Barista has been recognisedby the HT ‘Superbrand’ two years in succession. Food Guide as the best place tohave coffee. It is also the recipient of the ‘Café of the Year’ award given by The TimesGroup – in the Times Food Guide.A huge shot in the arm and validation of the company’s efforts has been therecognition given independently by BBC, The Times of India and Business Standardas the ‘Brand of the Year’ (2002).Barista was also awarded the TOPS award for Specialty Coffee Excellence by theSpecialty Coffee Association of America (SCAA) which recognizes specialty coffeeretailers who differentiate themselves through better business practices.Recently Barista was also recognized by the HT Food Guide as the best place to havecoffee as well as ‘Café of the Year’ award given by The Times Group – in the TimesFood Guide.For the year 2003-05, Barista has been selected as one of the 100 superbrands inthe country and is amongst the youngest brands in the list, to achieve this status.Marketing initiatives: In order to enhance this unique experience, Barista focuseson themes and avenues that complement coffee such as music, books and art.Barista has tied–up with brands such as Planet M and Corner Book Store to openespresso corners in these stores. Here, the Barista ambience has been re-created
  • 13. within the establishments giving the consumers the opportunity to enjoy a cup ofdelicious coffee while browsing through a book, enjoying music or appreciating art.Barista is a comfortable place to spend time with friends, family, strangers, the girlnext door, her neighbours aunt, well, just about anyone. And even if you drop byalone, they have some of the finest beverages to keep you company.To begin with, theres the Barista House Blend - their signature blend of coffee andselect international coffees from some of the most noted coffee growing regions ofthe world. Followed by an extensive list of steaming hot espressos, cappuccinos andlattes made from the finest Arabica beans.To cool things down, they have fruit smoothies and chilled granitas in tropicalflavours. And finally, a refreshing range of cold and frozen coffees that will makeanyone who tries them return for more.Barista traces its roots back to the old coffee houses in Italy - the hotbeds of poetry,love, music, writing, revolution and of course, fine coffee. Drawing inspiration fromthem, they have single-handedly taken on the challenge to open peoples eyes to thesimple pleasures of coffee and revolutionize the coffee drinking experience in everycity that we invade.To live up to this promise, they have employed skilled Italian roastmasters at theirroastery in Venice. Sourced only the finest quality Arabicas. And have had ourespresso bars designed to reflect a warm, friendly and inviting atmosphere. Add tothis, a menu you can ponder over for hours and you have everything you need toescape the pressures of daily life.At last count, the aroma of fine Barista coffee permeated in over 100 espresso barsacross India, Sri Lanka and the Middle East.b. Café Coffee Day
  • 14. Café Coffee Day is a division of Indias largest coffee conglomerate, AmalgamatedBean Coffee Trading Company Ltd. (ABCTCL), popularly known as Coffee Day, a Rs.300 crore ISO 9002 certified company. Coffee Day sources coffee from 5000 acres ofcoffee estates, the 2nd largest in Asia, that is owned by a sister concern and from11,000 small growers. It is one of India’s leading coffee exporters with clients acrossUSA, Europe & Japan.With its roots in the golden soil of Chickmaglur, the home of some of the best IndianCoffees and with the vision of a true entrepreneur nurturing it, Coffee Day has itsbusiness spanning the entire value chain of coffee consumption in India. Its differentdivisions include: Coffee Day Fresh n Ground (which owns 354 Coffee bean andpowder retail outlets), Coffee Day Xpress (which owns 341 Coffee Day Kiosk), CoffeeDay Take away (which owns 7000 Vending Machines), Coffee Day Exports andCoffee Day Perfect (FMCG Packaged Coffee) division.Café Coffee Day (CCD) pioneered the café concept in India in 1996 by opening itsfirst café at Brigade Road in Bangalore. Till about the late 1990’s coffee drinking inIndia was restricted to the intellectual, the South Indian traditionalist and the fivestar coffee shop visitor. As the pure (as opposed to instant coffee) coffee café culturein neighboring international markets grew, the need for a relaxed and fun “hangout”for the emerging urban youth in the country was clearly seen.Recognizing the potential that lay ahead on the horizon, Café Coffee Day embarkedon a dynamic journey to become a large organized retail café chain with a distinctbrand identity of its own. From a handful of cafés in six cites in the first 5 years, CCDhas become India’s largest and premier retail chain of cafes with 498 cafes in 85cities around the country.“Enthused by the success of offering a world-class coffee experience, CCD hasopened a Café in Vienna, Austria and is planning to open other Cafes in the MiddleEast, Eastern Europe, Eurasia, Egypt and South East Asia in the coming months.”
  • 15. Cafe FormatsCafé Coffee Day has been experimenting with café formats for quite sometime.Backed by the motivation of providing customers with exciting choices as well asconstantly redefining ‘the café experience’, CCD has ventured into the followingformats:Music Cafés provide customers with the choice of playing their favourite musictracks on the Digital Audio Jukeboxes installed at the café! There are around 85cafes with such jukeboxes. 32 cafes also provide customers with the visual treat ofwatching their favorite music videos by means of Video Jukeboxes.Book Cafés offer the perfect solution to people who think that the coffee experienceis incomplete without browsing through the bestsellers or reading a classic. CCD’sbook corners accentuate the age-old combination of ‘coffee and books’. This excitingconcept has been successfully tested at 15 cafes in 12 cities across India and thenumbers are set to grow exponentially. CCD has tied up with English Book Depot,one of India’s leading book distributors for placement and rotation of readingmaterials appealing to Café Coffee Day’s discerning customers.Highway cafés on the Bangalore – Mysore highway and NH-8, presents the traveleren route not only with good coffee and scrumptious snacks amidst great ambiencebut also with clean restrooms to get rid of that weariness from the road!Lounge cafés at Hauz Khas, Delhi and Southern Avenue, Kolkata(Southern Avenue)and Hyderabad (Jubilee Hills) combines the style and luxury of a lounge with thelively ambience and comfort of a café. With exquisite interiors, exotic menu andthematic music CCD Lounge offers a whole new experience to the connoisseur whileassisting the latter through its team of hostesses who are poise and style incarnateand are looked upon as fashion icons.Garden cafés at M.G Rd, Bangalore and GKII, New Delhi combine the joy ofrejuvenating amidst verdant landscapes and pots of coffee.
  • 16. Cyber cafés at Brigade Rd, Bangalore, Airport, Bangalore and Airport, Delhicombine the urge to surf, not to mention get connected through the internet whileenjoying perfectly brewed cups of coffees, both domestic as well as Internationalblends!Mission statement“To be the best café chain in the world by offering a world class coffee experience ataffordable prices”.Brand associationCCD has emerged as an interactive alternative media for brands to communicatewith the ‘young at heart’.Other media, such as electronic, print and outdoor, offer brand communicationthrough visual and audio modes to a large section of the populace, both relevant andirrelevant. Café Coffee Day offers a much more interactive, targeted communication,sometimes adding even a taste dimension to a brand idea!Various in-café collaterals used to impart visibility to a brand inside a café or to addthe element of interactivity to a campaign are Posters, Tent Cards, Danglers,Leaflets, Brochures, Coasters, Drop boxes, Contest Forms, Stirrers, Standees etc.Over the years, CCD has successfully promoted a number ofbrands/products/events through various innovative tactics and promo ideas.Cashing in on its mass captive audience, we at CCD have entered into tie-ups andpromotions which are well knit with our brand promise and which can be creativelyused to woo the Indian Youth.Customer profile
  • 17. The café is a meeting place for 15-29 year olds, both male and female who areserved the best coffee by friendly and informed staff, in an uplifting and invigoratingambience.Research shows that teen-agers form 25% of our customers while 38% of thecustomers are between 20 and 24years and another 23% belong to the age group of25-29 years. Students and young professional comprise around 72% of ourcustomers.18% of the customers visit the cafes daily while another 44% visit weekly. Each café,depending upon its size attracts between 500 and 800 customers daily, mainlybetween 4pm and 7 pm. Customers describe Café Coffee Day as the place theyfrequent most after “home and workplace/college”. It is a place where they meetfriends and colleagues, in groups of 3 or more; a place where they rejuvenate andare free to be themselves rather than a place to be “seen at” vis a vis other cafes.AwardsCafe Coffee Day: the best Indian Food Services BrandBusiness WorldNovember 8th, 2004Food services top 51. McDonald’s2. pizza hut3. café coffee day4. barista coffee5. domino’s
  • 18. Out of the 3 coffeehouses studied, CCD is visited the most. The mean of CCD visitedis more than Barista and Nescafe.c. NESCAFEThe rich taste of coffee is reflected in its rich history. The beginnings of NESCAFÉcan be traced all the way back to 1930, when the Brazilian government firstapproached Nestlé.NESCAFÉ – a combination of Nestlé and café. NESCAFÉ was first introduced inSwitzerland, on April 1st, 1938. For the first half of the next decade, however, WorldWar II hindered its success in Europe. NESCAFÉ was soon exported to France, GreatBritain and the USA. American forces played a key role in re-launching NESCAFÉ inEurope by virtue of the fact that it was included in their food rations. Its popularitygrew rapidly through the rest of the decade. By the 1950s, coffee had become thebeverage of choice for teenagers, who were flocking to coffee-houses to hear thenew rock ’n’ roll music. In 1965 NESCAFÉ continued to bring the worlds best cup ofcoffee by introducing freeze-dried soluble coffee with the launch of Gold Blend. Onlytwo years later they invented a new technology to capture more aroma and flavourfrom every single coffee bean. In 1994 the full aroma process was invented to makethe unique quality and character of NESCAFÉ even better.Nestlés commitment to sustainability is deeply rooted in the companys core values,which drive the Companys way of doing business. (Nestlé Corporate BusinessPrinciples)The endorsement of these values is made through a whole set of principles that areenforced at every stage of production, by every business or production unit,employee, partner or vendor. (Nestlé Corporate Governance Principles). Thecompanys culture is guided by these principles, which ensure leadership fullycompatible with Nestlés sustainability objectives. (Nestlé Management andLeadership Principles)
  • 19. FMCG major Nestle India, having catapulted its business with the launch of itsprobiotic range of frozen dairy products, is now all set to grow its coffee business.While coffee chains such as Café Coffee Day and Barista target the upper middleclass youth segment, Nestle India through its ‘Cafés’ is going all out to woo themasses.Mr. Martial Rolland, CEO, Nestle India, said, “The idea is to create a sustainablemodel that is scalable through these cafes.They use these outlets as our laboratories to try out new products and gauge thereaction of consumers to the newer variants of coffee.Not deterred by the competition the coffee chains could present, they are pleasedthat there are more players in the competition as it will expose more consumers tocoffee.“The difference between the coffee chains and us is affordability. No one knowscoffee the way we do.”Nestle; however, plans to continue its cafes pan-India under the franchisee model.They are focusing more on product delivery vis-À-vis the ambience. They refuse todivulge the size of the company’s café business.However, according to company officials it was far larger than some of the otherswho claim to have the maximum number of outlets in the country.Nestle has cafés across schools, colleges and offices.Perfect blendAffordability, in fact, is a major criterion for Nestle India as far as products areconcerned. The company’s motto to target the lowest denominator is clear throughthe pricing of its brands in the category as well as the blends used in the products.
  • 20. India is predominantly a tea drinking country. Therefore, the harsh and strongflavour of coffee is not preferred by most people. So, the blends they use in theirbrands are also very specific to consumer tastes.New productBased on consumer insight, the company has just launched its new product ‘NescafeMild’, targeted specifically at the mass market of tea drinkers.Their long heritage in the country helps them understand people better. Also withthe understanding of coffee that they have acquired globally, they want to leveragetheir expertise here as well.Cold coffee categoryThe company is also examining several possible segment forays under coffee,however, moving away from hot to the cold category.Though the market for products such as cold coffee is still very small in India,experiences from their Café outlets have made them realise the growing demand forit. They are examining possibilities of launching such products in India.In fact, the coffee market in India in itself is rather small with great opportunity forgrowth. And, as a company, they focus more to grow their coffee business here.RESEARCH OBJECTIVE – “Customer Perception and Attitude towards retail coffeechains – a study in Delhi, w.r.t Barista, CCD, Nescafe”SUB OBJECTIVES:1. Preference in choice of Coffee chain2. Factor affecting the customer choice of coffee chains
  • 21. 3. Comparative analysis between different coffee chainsThis research project will include the following issues-Identifying the factors that influence the customer the most (factors such ascoffee taste, ambiance, affordability, etc.)Customers purchasing behavior and attitude towards coffee houses (in termsof which coffee-house they visit, for what purpose they visit a coffee-house,on what occasions they prefer to visit a coffee-house, who influence therepreference, how much they spend etc.)Identifying the most popular coffeehouse.RESEARCH METHODOLOGYWhile making a study we very often look for what type of research methodology isto be used in this type of study. For implementation of a proper researchmethodology we have to first understand the meaning of research.Research is a scientific as well as systematic process, which includes defining andredefining the problem to develop hypothesis, to collect and define theinformation/data, to analysis the information and bring out the results.The first step in research after defining the research problem and objectives is datacollection. The word data means any raw information, which is either quantitativeor qualitative in nature, which is of practical or theoretical use. The task of datacollection begins after a research problem has been defined and research designchalked out. While deciding about the method of data collection, the researchershould keep in mind that there are two types of data primary and secondary.1. Primary data: -This is those, which are collected afresh and for the first Time,and thus happen to be original in character. There are many ways of data collectionof primary data like questionnaire, observation method, interview method, throughschedules, pantry Reports, distributors audit, consumer panel etc.
  • 22. 2. Secondary data: -These are those data, which are not collected afresh and areused earlier also and thus they cannot be considered as original in character. Thereare many ways of data collection of secondary data like publications of the state andcentral govt., website, journals, companies reports, reports prepared by researchers,reports of various associations connected with business, Industries, banks etc. Forthis project secondary data was taken from company’s reports and websites.This project is a survey project. In this project first the secondary data will becollected through websites, magazines and journals. Based on this information aquestionnaire will be designed for the target respondents. The primary datacollected through this fieldwork will be analyzed and used to generate results.Target respondent – the target respondent are the people who have visited any ofthe coffeehouses in Delhi.RESEARCH DESIGN –Type of research: Descriptive researchSources of data: Primary Data & Secondary DataPrimary Data - QuestionnaireSecondary Data – magazines, Websites, JournalsData collection method: Survey MethodSurvey instrument: QuestionnaireMethod of communication: Personal interviewSampling technique: Convenient sampling
  • 23. Sample size: 50Sample unit: People who visit coffee houses in DelhiArea of survey: DelhiDATA ANALYSISN Minimum Maximum Mean Std. DeviationBARISTA 50 1.00 3.00 1.9200 .77828CCD 50 1.00 3.00 2.2800 .72955NESCAFE 50 1.00 3.00 1.8000 .88063Valid N(listwise)50
  • 24. Descriptive StatisticsN Minimum Maximum Mean Std. Deviationvariety ofcoffee50 2.00 4.00 3.3200 .68333taste of coffee 50 3.00 4.00 3.6600 .47852quality ofcoffee50 3.00 4.00 3.6400 .48487price of coffee 50 1.00 4.00 2.4400 .97227ambience ofoutlet50 2.00 4.00 3.1800 .69076Customer 50 1.00 4.00 3.0200 .62237Coffee house visited the mostnescafeccdbarista2520151050Coffee house visited the mostFrequency
  • 25. servicelocation ofoutlet50 1.00 4.00 2.6000 1.01015offers,discounts,coupons etc50 1.00 4.00 2.1000 1.01519side ordermenu50 1.00 4.00 2.4800 .88617time forservice50 1.00 4.00 2.7800 .97499Valid N(listwise)50While visiting a coffee house, taste of coffee is the most important factor forchoosing the coffee house, because it has the maximum mean of 3.66Descriptive StatisticsN Minimum Maximum Mean Std. DeviationB_variety 50 2.00 4.00 3.2600 .69429C_variety 50 2.00 4.00 3.3600 .59796N_variety 50 1.00 4.00 2.2000 .96890Valid N(listwise)50Out of the variety of coffee offered by Barista, CCD and Nescafe, CCD has goodvariety than others, which has a mean of 3.36Descriptive StatisticsN Minimum Maximum Mean Std. DeviationB_taste 50 2.00 4.00 3.3000 .58029C_taste 50 2.00 4.00 3.3800 .63535
  • 26. N_taste 50 1.00 4.00 2.6400 .92051Valid N(listwise)50The taste of coffee of CCD has a mean of 3.38, which means than taste of coffeeoffered by CCD is better than other coffee houses.The following table shows that the mean quality of coffee offered by Barista is morethan the other 2 coffee houses; this means that Barista offers the best quality incoffeeDescriptive StatisticsN Minimum Maximum Mean Std. DeviationB_quality 50 2.00 4.00 3.3600 .63116C_quality 50 1.00 4.00 3.3000 .73540N_quality 50 1.00 4.00 2.4600 .95212Valid N(listwise)50Descriptive StatisticsN Minimum Maximum Mean Std. DeviationB_price 50 1.00 4.00 2.1800 .74751C_price 50 2.00 4.00 2.7400 .56460N_price 50 2.00 4.00 3.1400 .75620Valid N 50
  • 27. (listwise)The price offered by Nescafe is the most economic, which can be seen by the meanwhich is more than the other two coffee houses.Descriptive StatisticsN Minimum Maximum Mean Std. DeviationB_ambience 50 2.00 4.00 2.9000 .70711C_ambience 50 2.00 4.00 3.2200 .58169N_ambience 50 1.00 4.00 2.4800 .86284Valid N(listwise)50The ambience of CCD is better than the other two coffee houses. The mean ofambience is 3.22Descriptive StatisticsN Minimum Maximum Mean Std. DeviationB_cust.ser 50 1.00 4.00 2.7000 .64681C_cust.ser 50 2.00 4.00 2.9200 .72393N_cust.ser 50 1.00 4.00 2.2800 .72955Valid N(listwise)50The customer service offered by CCD is better than the customer service offered byother two coffee houses.
  • 28. Descriptive StatisticsN Minimum Maximum Mean Std. DeviationB_location 50 1.00 4.00 2.5200 .86284C_location 50 1.00 4.00 2.9200 .87691N_location 50 1.00 4.00 2.5400 .78792Valid N(listwise)50The location of coffee house outlet of CCD is better than the other two coffee houses.Descriptive StatisticsN Minimum Maximum Mean Std. DeviationB_offer 50 1.00 3.00 1.8400 .71027C_offer 50 1.00 4.00 1.9800 .71400N_offer 50 1.00 4.00 2.1600 .97646Valid N(listwise)50The discounts, offers and coupons offered by Nescafe is better in comparison to theother two coffee houses.Descriptive StatisticsN Minimum Maximum Mean Std. DeviationB_menu 50 1.00 4.00 2.4600 .86213C_menu 50 1.00 4.00 2.6400 .87505
  • 29. N_menu 50 1.00 4.00 2.8200 1.00793Valid N(listwise)50The side menu of Nescafe is better than the other two coffee houses. It includesMaggi noodle which is the hot favorite in kids and youngsters.Descriptive StatisticsN Minimum Maximum Mean Std. DeviationB_time 50 1.00 4.00 2.7600 .77090C_time 50 1.00 4.00 2.7400 .89921N_time 50 1.00 4.00 2.6000 .80812Valid N(listwise)50Barista is better in time taken to serve the consumer. It has a mean of 2.76 which ishigher than the mean of other two coffee houses.Descriptive StatisticsN Minimum Maximum Mean Std. Deviationexe_b 50 2.00 4.00 3.1800 .66055exe_c 50 2.00 4.00 3.4600 .54248exe_n 50 1.00 4.00 2.7000 .76265Valid N(listwise)50The experience was enjoyed most in the settings of CCD, followed by Barista andNescafe respectively. The mean is 3.46
  • 30. The total of Ranking of the 3 coffee houses is as under:Descriptive StatisticsN Minimum Maximum Sum Mean Std. DeviationBARISTA 50 1.00 3.00 96.00 1.9200 .77828CCD 50 1.00 3.00 114.00 2.2800 .72955NESCAFE 50 1.00 3.00 90.00 1.8000 .88063Valid N(listwise)50Barista – 96CCD - 114Nescafe - 90The results show that CCD is ranked the first, followed by Barista as second, andNescafe is third in ranking.The result in the table below shows that, the decision making for visiting a coffeehouse is highly influenced by peer group or friends.Descriptive StatisticsN Minimum Maximum Mean Std. DeviationOwn instinct 50 1.00 4.00 3.2000 .75593Family 50 2.00 4.00 3.0800 .72393Friends 50 2.00 4.00 3.4000 .57143Work group 50 1.00 4.00 2.8600 .85738
  • 31. Valid N(listwise)50The table below shows that the reason to visit a coffee house is usually forrefreshment or get together with friends. 19 respondents voted for bothrefreshments and get together with friends.reason.visitFrequency % Valid Percent Cumulative Percentrefreshment 19 38.0 38.0 38.0get together 19 38.0 38.0 76.0Dating 5 10.0 10.0 86.0Work 7 14.0 14.0 100.0Total 50 100.0 100.0
  • 32. HYPOTHESIS TESTINGHypothesis 1: youngsters feel that friends are very important while making adecision to visit a coffee house.youngster, elder * friends CrosstabulationFriends TotallessimportantimportantVeryimportantyoungster 1 Count 2 13 17 32% withinyoungster, elder6.3% 40.6% 53.1% 100.0%elder 2 Count 0 13 5 18% withinyoungster, elder.0% 72.2% 27.8% 100.0%Total Count 2 26 22 50% withinyoungster, elder4.0% 52.0% 44.0% 100.0%Chi-Square TestsValue df Asymp. Sig. (2-sided)Pearson Chi-Square 5.019(a) 2 .081
  • 33. Likelihood Ratio 5.716 2 .057Linear-by-LinearAssociation1.287 1 .257N of Valid Cases 50a 2 cells (33.3%) have expected count less than 5. The minimum expected count is.72.By doing cross tabulation, we can find that 53% of the youngster feel that friendsare very important while making a decision to visit a coffee house, while only 27%of the elder feel that friends are very important while making a decision to visit acoffee house.The significance level in chi-square tests is more than .05.Hypothesis 2: Females give more important to their family’s decision while visiting acoffee house.gender * family CrosstabulationFamily Totallessimportant importantveryimportantgender Male Count 11 12 10 33% withingender33.3% 36.4% 30.3% 100.0%Female Count 0 12 5 17% withingender.0% 70.6% 29.4% 100.0%Total Count 11 24 15 50% withingender22.0% 48.0% 30.0% 100.0%
  • 34. The importance level of family, for females as well as males, while visiting a coffeehouse is almost the same at 30.3% and 29.4%, proves the hypothesis to be false.Hypothesis 3:Younger people visit a coffee house for a get together with their friendsyoungster, elder * reason.visit Crosstabulationreason.visit Totalrefreshment get together dating workyoungster, elder1.00 Count10 18 3 1 32% within youngster,elder31.3% 56.3% 9.4% 3.1% 100.0%2.00 Count 9 1 2 6 18% within youngster,elder50.0% 5.6% 11.1% 33.3% 100.0%Total Count 19 19 5 7 50% within youngster,elder38.0% 38.0% 10.0% 14.0% 100.0%Chi-Square TestsValue dfAsymp. Sig.(2-sided)Pearson Chi-Square 16.400(a) 3 .001Likelihood Ratio 18.748 3 .000Linear-by-LinearAssociation2.045 1 .153N of Valid Cases50a 4 cells (50.0%) have expected count less than 5. The minimum expected count is 1.80.The above cross tabulation between age class and reason for visit shows that 56% ofthe younger people visit a coffee house for a get together with their friends.FUTURE OF COFFEE HOUSES IN INDIAThe biggest players in India are CCD and Barista.Most of the coffee houses do their Branding via the following attributes-
  • 35. 1. Experience2. Customer service3. Variety/ Variants of Coffee4. Taste5. Preparation - in terms of hot/coldCCD plans to set up highway cafes and drive through cafes to attract customers.These cafes would be set up at various petrol pumps and the company is seeking tieups with all leading petroleum companies in this regard. This will increase theirbrand image and increase of Point of Sales.Nescafe outlets in select cities are positioned on the lines of its Nescafe brands`taste that gets you going theme. Café Nescafe’s offer beverages priced ascompetitively as Rs 10.Future1. With increase in FDI, we will see more global players in India. Gloria Jeans wasalso in news. Players like Starbucks may enter in India in coming few years.2. Other FMCG giants such as Hindustan Lever and Tata Coffee will sooner or laterventure into the coffee chain businessIn this industry, the tangible differentiators are very few. It’s only the intangible asmentioned above creates a difference.Concepts like Sensory Branding by Martin Lindstorm work here as coffee chains cancover the aspect of smell, sight, sound (music inside the store), taste and touch ofthe furniture inside.CONCLUSION
  • 36. Cafe Coffee Day: - This has been positioned for younger generations usually collegegoers and young people. With outlets strategically positioned near colleges,software companies and places where they can target customers. On analysis it canbe seen that majority of the customers are of 18-30 age group. People prefer coffeeday location for treats.Barista Coffee: - Positioned for Executive class of customers who prefer premiumtaste but not too high prices. Barista coffee customers are particular about taste anda peaceful atmosphere. Usually these outlets have dim lighting and exclusivetreatment.Nescafe: - Positioned for youngsters who like to have a sip of coffee and have a chatwith their friends at a really low price. The main emphasis is on the quality of coffeeand not on the ambience. They mainly target the mass population. With the sidemenu as tempting as Maggi Noodles, they are a hot favorite among young couples.ANNEXURE – 1QUESTIONNAIREPlease tick the relevant answerQ1. How frequently do you visit a coffee house?i. Every day ______________ii. Alternate day ______________iii. Weekly ______________iv. Fortnightly ______________Q2. Out of the 3 coffee houses, which one do you visit the most?i. Barista _______________ii. CCD _______________
  • 37. iii. Nescafe _______________Q3. How important are the following factors while visiting the coffee housesFactors VeryimportantImportant LessimportantNotimportantVariety of coffeeTaste of coffeeQuality of coffeePriceAmbianceCustomer serviceLocationOffer/disc./couponsSide order menuTime for servingQ4. Rate the following coffee houses on the following factors on a scale of 1 – 4 (1-poor, 2-fair, 3-good, 4-excellent)Factors Barista CCD NescafeVariety of coffeeTaste of coffeeQuality of coffeePriceAmbianceCustomer serviceLocationOffer/disc./couponsSide order menuTime for serving
  • 38. Q5. Rate your experience with the following coffee-chains on the following scaleVery satisfied Satisfied Less satisfied Not satisfiedBaristaCCDNescafeQ6. Rank the following coffee chains in order of preference. 3 being most preferred,1 being less preferredi. Barista _______________ii. CCD _______________iii. Nescafe _______________Q7. How important are the following in your decision making for visiting a coffeehouseVeryimportantImportant Less important Not importantYour owninstinctFamilyFriendsWork groupQ8. Your reason to visit a coffee house is-i. Refreshment __________ii. Get together with friends __________iii. Date __________iv. Work __________PERSONAL INFORMATIONAge: less than 20 _________
  • 39. 21 – 30 _________31 – 45 _________46 and above _________Household Income: less than 2 lakh _________2-6 lakh _________6-10 lakh _________10 lakh and above _________Gender: Male _________Female _________ANNEXURE– 2LITERATURE REVIEW -1STORM IN THE COFFEE CUPIn the late 1990s, a silent cafe revolution was sweeping urban India. Coffee drinkingwas increasingly becoming a statement of the young and upwardly mobile Indians.Coffee bars, an unheard concept till a couple of years ago, had suddenly become bigbusiness and coffee bars like Barista, Cafe Coffee Day (CCD) and Qwikys hadbecome quite popular.Though being a late entrant, Barista took elite India by storm. With 105 branches in18 cities and annual sales of Rs. 650 million, Barista was clearly the leader in thecoffee retailing business in 2002. What made Barista different from others was theambience at its outlets.Barista recreated the ambience and experience of the typical Italian neighborhoodespresso bars in India. The interiors were bright, trendy and comfortable. One couldplay chess, read books, listen to music, enjoy the arts, surf the Net and sip an
  • 40. Espresso Italiano, or Iced Cafe Mocha. CCD, which was started in 1996, had opened50 outlets in 9 cities by 2002, with annual sales of Rs. 100 million.CCD also provided a relaxing ambience with eye-catching crockery and bright décor.The paintings on the wall were made by young artists, with the objective ofpromoting young talent. CCD outlets also promoted their paraphernalia such ascaps, T-shirts, and coffee mugs.With 21 outlets in 5 cities and annual sales of Rs. 43 million in the year 2002,Qwikys was also a strong contender in the growing coffee business. It positioneditself as a place to hang out and spend time leisurely. One could order an Espresso,Cappuccino, Lattes, Mochas, Panini et al. One could even choose between frothy orintense, icy or piping hot, and aromatic and exotic coffee. It also had books andmagazines outlets and a casual wear under the Qwikys brand.Though CCD was the first to enter the coffee retailing business in India, it failed toleverage on the first mover advantage. By 2002, Barista, which entered the marketin 2000, and Qwiky’s, which entered in 1999, had 105 and 21 branches respectively.CCD had only 50 branches. According to company sources, the reason for its slowgrowth was the time taken to complete the back-end operations of its retail outlets.Analysts felt that Barista and Qwikys also experienced similar problems but theygrew faster than CCD because they realized that running cafe is a hospitalitybusiness and one needs to create the right ambiance and experience and back it upwith strong logistics.In 2002, competition in the coffee retailing business was beginning to heat up withall the three players looking for opportunities for growth.Barista was opening a store every nine days and it also seemed to be better placedthan its competitors due to the strong support of Tata Coffee, which had a 34.3%stake in Barista. However, analysts felt that it wouldnt be easy for Barista tomaintain its leadership position in future. By 2002, Barista had spent Rs 600 million
  • 41. to establish its chain of 105 stores and in the process had accumulated losses.Though its operating profit was 17% of the sales, it was not expected to turn blacksoon because of its rapid expansion plans. Also as Barista imported everything fromchairs to coffee machines to coffee beans, any depreciation in the value of the IndianRupee would make imports costlier and squeeze its margins further.A NOTE ON THE COFFEE INDUSTRY IN INDIAIndia ranks 5th among the top 10 countries of the world accounting for 3 % of thetotal world coffee production and exporting 80 % of the total produce.It is also the fifth largest coffee producer. Being a traditional tea consuming country,the average coffee consumption in India was quite low at 10 cups per personannually (Refer Table I). People in the Northern region preferred instant coffee incontrast to the people in the south, who preferred traditional filter coffee.Coffee, a household beverage confined to South India became quite popular in thelate 1990s. The late 1990s saw the emergence of coffee chains. Moreover, there wasa transition from the conventional and out dated coffee house to a moresophisticated and trendy coffee bars. In the late 1990s, non-traditional coffeeretailing outlets like coffee bar chains, coffee vending machines, and specialty coffeepowder shops offered exciting growth opportunities. They constituted 50 % of salesin the Indian Coffee Industry. The growth of these specialty and gourmet coffeeshops was a result of the economic and demographic changes, higher disposableincomes, increasing number of workingwomen, and increasing awareness andexposure to global trends. ( REVIEW – 2Branded coffee houses a rage in India
  • 42. Anuradha Shenoy in Mumbai | July 16, 2005Go to any of the mushrooming coffee bars and what do you find? The menu displaysnot just a range of coffees, but an ever increasing list of soft drink concoctions andother beverages mingling with snacks and mini-meals.Strange? Maybe. With more than 500 coffee cafes in the country, up from 175 in2002, coffee was the most happening beverage. And the players, from Barista CoffeeCo to Bangalore-based Cafe Coffee Day, were opening outlets practically everyweekend.So far so good. Today, at Barista Coffee Co, coffee sales are much less than its otherofferings.Sixty per cent of its sales are brewed from teas, smoothies, food items andmerchandise. At Bangalore-headquartered Cafe Coffee Day, 70 per cent of its salescome from beverages including coffee. At Cafe Mocha, coffee sales are up from 3 percent three years ago when it first started to 17 per cent today.What does all this mean? Coffee sales have not really stirred the storm they wereexpected to be. But this has not deterred the coffee cafes from stretching theirbrands.Internationally, coffee sales are virtually stagnant, moving ahead at 0.5 per cent.According to a 2005 research report by the United Nations Food and AgricultureOrganization, Indias coffee consumption has been chugging along at 2.2 per centper annum.With consumption pegged at 70,000 tones, branded coffee accounts for 53 per cent,unbranded 40 per cent, with cafes constituting 7 per cent. Industry estimates pegthe annual growth rate of the coffeehouse segment at a half percent clip.
  • 43. Despite these figures, if coffee houses are extending their network, according toSunalini Menon, chief executive of CoffeeLab, which provides evaluative services forcoffee manufacturers, it is because they provide more than just coffee."They are a venue to socialise, finalise business deals, conduct interviews, listen tomusic and read in," she says.According to Cafe Mochas CEO, Dharmesh Karmorkar, call centres have been one ofthe growth triggers. "Before the advent of night-time work enterprises, a coffeehouses customer was limited to individuals who worked daytime hours. Now, inaddition, we have an entire group of professionals who work a night-time shift."There is also the issue of small town individuals moving away from their families tolarger cities for career opportunities that were not present before."This individualistic culture promotes the need for a venue to socialise with othersof their age who share their interests," he adds.Baristas COO, Brotin Banerjee relies on the power of the youth and their increasingdisposable income."Several Indian students begin working at a very young age, sometimes right afterhigh school. They have the purchasing power," he says.Thats why with a Rs 20-crore (Rs 200 million) outlay, Barista is hoping to be aninternational brand. Plans underway include 35-40 Baristas in Nepal, Malaysia,Indonesia, Turkey, Iran and Bahrain.Its strategy will centre around targeting college students in the age range of 16-20to "catch them young" and induce "lifetime loyalty". Barista also plans to start"platforms on the go" in partnership with petroleum companies to cater toconsumers travelling between cities.
  • 44. Its current tally is 122 stores, which include Barista espresso bars, shop-in-shopsand corner stores.Also, from 230 stores, Cafe Coffee Days senior general manager Sudipta Senguptaplans to add an additional 270 stores in the next three years."We will incorporate health foods like herb breads, sunflower seeds, multigrainbreads and bran sandwiches. We will also introduce a premium coffee and offermerchandise such as filters, mugs, and message T-shirts," she says.In a bid to take coffee to the masses, the new outlets will be in towns, which have apopulation of one lakh and above.While Barista and Cafe Coffee day are targeting mass-based consumption, CafeMocha, with only nine franchise outlets, is focusing on imported coffees and anupmarket clientele.It wants to push its stores from nine to 65 in the next three years. There are plans toopen franchised stores in Indonesia, Singapore, Sri Lanka and two in the MiddleEast.In addition, the chain plans to invest Rs 3 crore (Rs 30 million) in human resourcedevelopment and Rs 8 crore (Rs 80 million) on the development of new menu itemsevery year.Explains Karmorkar, "Were focusing primarily on knowledge building andmanagement and the expertise that our chefs and staff bring to the table."Clearly, despite coffee consumption stagnating, coffee houses are finding it lucrativeto add value activities -- book clubs, film clubs, social activities, merchandise, food --as the main plug. Drink to that!(
  • 45. LITERATURE REVIEW – 3An Indian sector on the upswing: coffee shopsBy M. A. WinterDate of posting: 13-11-07The Coffee retailing sector in India is booming today, with several companies activein the market. Some are local entities, some have come from abroad and have tiedup with local companies, and some seem to prepare themselves for an entry sooneror later. The market growth is expected to be 20 to 30% annually in the next coupleof years.The first foreign coffee retailer who arrived was Costa Coffee, a chain of coffee shopsowned by leisure and hotel group Whitbread Plc from UK. Costa Coffee, togetherwith the Devjani Group as the first franchisee, opened the first outlet at Delhi’sConnaught Place in 2005. Now, two years later, Costa operates already a total of 34stores. Besides Delhi, Costa is present in cities like Mumbai, Agra, Jaipur andLucknow. The plan is to have 200 stores by the end of 2010, a spokesperson ofWhitbread Plc told Corp from the US is another well known coffee chain, a big player in manymarkets around the world. For India, there were plans to enter the market with apartner. Now it seems that these earlier plans have been modified. In July, thecompany has put on hold its earlier plans to enter India by the end of 2007, withoutgiving a reason. Speculation was on that the government might not have allowed thejoint venture with an Indian partner based in Indonesia on behalf of the foreigndirect investment regulation for single-brand retailing. Now, a few days back,Starbucks has agreed a multi-country deal with its North-American partner PepsiCoby which PepsiCo would sell the Starbucks ready-to-drink beverages in
  • 46. international markets, including those countries that do not have Starbucks outlets,like India. Basically, the agreement provides Starbucks the option to bring at least apart of its product portfolio very quickly to Indian retail shelves.Almost in the same time when Starbucks was making and pushing its plans for India,Lavazza from Italy, in Italian eyes the mother country of all coffee drinkers, rushedahead and took over coffee chain Barista and Fresh & Honest for an amount ofreportedly Rs 480 crore from Chennai-based Sterling Infotech Group in May thisyear. Some media reported that Amalgamated Bean Coffee Trading Ltd (ABCTL),which owns India’s biggest coffee-cafe chain Cafe Coffee Day, was also interested tobuy Barista, but there was no confirmation. Barista is a major player in the premiumsector of the Indian sub-continent, with 150 cafés in Asia, of which 132 are in Indiaalone.By far the biggest player in the market already is Cafe Coffee Day, a coffee chainwhich is part of the Amalgamated Bean company. Run by venture capitalist V. G.Siddhartha, Cafe Coffee Day operates 483 outlets at present, mainly in India, but alsosome in Pakistan and two recently opened in Vienna, Austria. They plan to have atotal of over 2,000 outlets over the next four-and-half years, their CEO has saidearlier. Cafe Coffee Day has raised equity capital from Sequoia Capital to finance itsrapid expansion. Media reported an amount of US$ 35 million, and an additionaltarget amount of US$ 50 million which would be currently sought. ABCTL isexecuting an interesting business model, as it is involved in the coffee business rightfrom growing, processing and selling in different forms and formats like export ofgreen coffee, selling of packed coffee, and selling of hot coffee in various retailoutlets and vending machines. (
  • 47. 2. Nescafe.com3.