ITC Interrobang Case Competition

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‘Cracking the Coffee Code’
IIM Kozhikode
Team Prodigy: Abhishek Anand & Nikhil Todkar

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Executive Summary:
Coffee ispopularhotbeverage inIndiaalongsidetea.Availability of freshcoffeeatanaffordable
price isdrivingfactorfor highamountof coffee consumptioninsouthIndia.However,inpastdecade
or two there hasbeengrowthinthe coffee consumptiontootherpartsof India,largelyurban
centres. Accordingto IndiaFoodForum, Indiancoffee retail marketisexpectedtoreach$ 855
millionin2025. Indiabeingworldsixthlargestproducerof coffeeconsumersmerely~90 gm per
yearindicates huge possibilityof highmarketgrowthforanyfairlygoodproductenteredatcurrent
marketscenario.
Our productofferingswillbe concentratedtowards bachelors,busy workingcouples,coffee
connoisseurswhoare readyto adoptand are largelylocatedinurbansettings comprisingof 3% of
Indianpopulation.Southernandnorthernregionsof Indiaare targeteddifferentlyduringforthe
productlaunchprocess.
We developedaninnovative designforSunbeanGourmetcoffeetoenhance extensivereachof
coffee.Newdesignwill be helpfulfordrawingthe exact amount of coffee at a time.Ease of not
measuringeverytime will giveenhance coffeetaste andboostthe visionof instantcoffee thereby
sales.A designprototype is attached in Catiaformat alongwiththisfile.
Nevertheless, switchingcostsof consumersare low justneedingtochange,the product brand
loyaltyisprevalent andishigh forcompetitor’sproducts.Totargetthissettingwe are goingleverage
brand image of ITC and will positionourSunbeanproductas Bold,vigorous and deeptasting as
opposedtoromanticvibe createdbyrivalsaroundthe product. Overall positioningstrategywillbe
More for Lessin shortrun and will be diversifiedto More for More as productofferingsincrease.
Multichannel distributionstrategyfavorsintensive distributionstrategy – puttingourofferingsall
overthe transactionplaces,be itonline channels(Social media,Blogs, YouTube advertisements,etc.)
or offline stores.
Innovative marketing strategies alongwithcommercial advertisementsontelevisionandradio,
include,personalizedemail createdwithourexistingdatabase,remarketing,eventmarketing
strategiestoattract earlyadopters. Financialsare attachedwhichreflectuponcostsincludingall the
innovative marketingcostsandgeneral +packagingcosts,the breakevenprojectionof ouranalysisis
7,62,055 unitsof 100gm coffee.
Key consumer insights:
Dependingonthe keyconsumerresponseof 100+ consumersthroughQuestionnairesurvey,
Telephonicinterviewandpersonal interview. Taste preference of the coffee buyer wasfoundoutto
be mediumandstrong. Most of the respondents liketohave acoffee withadate or havinga
conversationwithfamily &friends orinoffice. Around73% of the respondentbelieve coffeemaking
processiseasy,takesno more time thantea, howevermostof themalsoagreedto try the coffee in
searchof betterproductofferingintermsof marketingpersuasion andtaste.Mostof the consumer
wouldlike tohave coffee forrelaxationfollowedbytaste andrefreshment.Afteranalysingthe

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repurchase habitof the consumer, the chunkformationincase of Latte was the majorreasonfor
overturn.
The primaryresearchdimensionincludesunderstandingthe coffeecategory andthe consumer
need.The habitof havinga coffee inIndiaisprominently seenintier1andtier 2 cities.Consumption
habitsof the coffee drinker.The perceptionof the brandinthe consumereyesandthe patternof
purchase are the reasonsforsuccessof a productin thiscategory.Understandingthe consumerpain
points,barriertopurchase and decisioncriteriaof the consumerwillgive inputsforbettermentof
productstrategy.
Customer buying process:
Key challenges for the Sunbean:
 Creatinga newhabit(firstlytargeted forthe consumerwhowantstotryout somethingnew)
 Awareness(Increasingvisibilityonthe varioussocial mediaplatform)
 Loyalty(Tomake the consumerbrandloyal bylaunchingaloyaltyprogramschemesthrough
variouschannelslike –Online quizzingbasedonthe particularSunbeanbrand,Multipack
buying)
Which Customers to Target?
We will targetmiddle classanduppermiddle class(incomewise),populationhavingfastpacedlife
style (workingclassespeciallyworkingcouple).Paretoprinciple canbe appliedtosuggestthatmost
of thispopulationresidesintier1 and2 cities.Customercoffeedrinkinghabitsare different
accordingto the geography,whichiscapturedasper our product offeringasfollows:
Sunbean Beaten Caffe
Since the productofferingincludesthe drinkinghabitsprevalentinNorthIndia,we will targetall the
Tier2 cityof the NorthIndia(Srinagar,Jammu,Amritsar,Jalandhar,Chandigarh,Ludhiana,
Dehradun,Meerut,Moradabad,Ghaziabad,Moradabad,Bareilly,Faridabad,Bikaner,Jaipur,
Jodhpur,Kota,Gwalior,Agra,Aligarh,Lucknow,Kanpur,Allahabad,Varanasi,Gorakhpur,Patna,
Guwahati,Dhanbad,Ranchi,Jamshedpur,Asansol,Jabalpur,Bhopal,Indore,Vadodara,Ahmedabad,
Jamnagar,Rajkot,Bhavnagar,Surat, Nashik,Pune,Kolhapur,Solapur,Aurangabad,Amravati,
Nagpur,Bhilai,Raipur,Cuttack,Bhubaneshwar ) while targetingTier1 cityof the all overthe
country (Bangalore,Chennai,Delhi,Hyderabad, Kolkata, Mumbai,Ahmedabad,Pune).Ourtarget
age groupwill consistof majorly the workingpopulationorthe peoplehavingveryfastpacedlife
style andwant toenjoythe somethingwhichgiveshimasense of relaxationandrelief inaquick
span of time with age range of (20-45). Thisage range will coverbachelors,workingcouplesaswell
as college goingstudents.
Sunbean Gourmet coffee
Consideringthe southernmarketiscoffee maturedforcoffee powdermore thanthe northernone,
we will launchSunbeanGourmetcoffeeinall tier1citiesandtier2 citiesinsouthernIndia(Belgaum,
Hubli,Mangalore,Warangal,Vishakhapatnam, Vijayawada,Guntur,Kozhikode,Kochi,
Thiruvananthapuram,Madurai,Trippur,Salem, Puducherry,Coimbatore,Tiruchirappalli,
Awareness Evaluation Decision Use Advocacy

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Puducherry).We will targetthe similarage groupsinbothsouthernandnorthernmarkets. Ourmain
pointof differentiationisthe productqualityandsmartpackagingtechnique,andpositioningit
appropriately.Sinceitistailormade tosuitthe taste budof bybringingtwoexquisiteblendsto
appeal tocoffee connoisseursof Southernpartof Indiahence itwill bringthe change inhabitof the
regularcoffee drinker.
Innovative Product Packaging
 Prototype detailsisattachedinCATIA File
Positioning:
Rich qualityPoorquality
Highprice
Low price BRU
Nescafe
Sunbean
beaten

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Above mentionedpositionhastobe achievedbyourproductwhichgive differentiatedoffering.
 Both BRU and Nescafe haspositionedtheirofferingsasthe arousesthe romanticside of a
person,moreover,theircoffeesbringcare andhappinessintothe livesof people
 Sunbeanbeatentargetsthe ultra-workaholicsegmentof the market(Bachelors,working
couplesintier1, 2 cities) whoare relativelyyoungerandare early adopters.Segmentwants
to taste deepwild coffee togettothe work.
Sunbeanbeatencoffeehastopositionitself as, “Bold,vigorousand deeptasting”.The reasonsare:
 We needtotargetbrand switcherswhoare willingtotrydeepcoffee taste
 It capturesthe want of consumersaccordingto the surveydone byMaxwell house
 It differentiatedthe marketsegmentfromitscompetitors
 Youngergenerationisable todigressfromtraditional coffeepreparingprocedure,mightbe
more openmindedtoadoptto the change
 Psychographic:Consumersoptingforinstantcoffee believe quickpreparationwhoprepare
at theirowntime and convenience,shouldgetafeel of deepinvigorating coffee
Positioning statement:
Madeforyou who is busy to be at workearly morning,battling with life full of responsibilities,ITC
comesup withSunbean Beaten Caffe.Itofferspre-mixed (Phentihui) coffeeready to go into hotmilk.
It will give you bold,deep and invigorating tasteto kick-startyourwork.
Overall positioning strategy
In shortrun, the overall positioningstrategyforSunbeanbeatencaffe oughttobe More for Less.
Our claimfor winningvaluepropositionistooffermore forlessandwill have todelivertopersuade
customerstofetchour product forthe first try.Initiallyitmighthamperthe coststructure or bottom
line.

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In longrun,positioningstrategyhastobe changedbecause itmightbe difficulttosustain.The long
run positioningstrategywillbe More forMore for premiumproductsandMore for lessforlesser
affordable customer.Structure alignedwithgivingaddedpremiumvalue tothe consumerasadded
price quote.
Marketing Channels
ITC can channel SunbeanBeatenCaffeusingmultichannelapproachasfollows:
Multichannel distributionsystemisfollowedbyeverylarge firmnowadays. Multichannel distribution
systemfavors intensive distributionstrategy – a strategywhere we will stockthe productinas
manyappropriate outletsaspossible.Beingadailyconsumedproductitshouldbe available where
and whenconsumerswantsit.Fewadvantagesbeing:
 ITC facinglarge urban andsemi-urbanmarketwhichiscomplex andrecall valueislesser
 Witheach newchannel Sunbeanwillexpanditssalesandmarketcoverage andwill give
opportunitytotailorthe Coffee accordingtothe customerneeds quickly
Marketing Strategy
Commercial Ads
We will runcommercial adon the televisionplatformand we will name thiscampaignas“Dinki
dumdarShuruaat”,alsoon the online platformof YouTube.
Innovative marketing strategies:
Content Marketing
Usingthe You tube channel – Dice media& TVFwhose majoraudience isyouthandthe outgoing
and separatingthemonthe geographywise forthe distributionprocess.
Email marketing –
Digital marketingstrategymayseemoutof fashionbutiseffective asever.Relyingonourdatabase
of clients, whichwill giveinsightaboutage,residence,previouspurchase of products,etc. Highly
personalizedmarketingcampaigncanbe usedto letuserfeel likethe email hasbeenwrittenforhim
individually.Marketingautomationcanbe a bighelp.
ITC SunbeanBeatenCaffe multichannel approach
To consumers via
Online business
partners
Big/Giant retailers
Urban (tier 1) consumers
Distributors
Retailers
Tier2 cityconsumers

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Remarketing
Justdon’tblindlypersuade customersratherthemthroughthe conventional funnel.Incase of no
purchase we can try exchange the contactsand be sure nurture the relationshipwithcustomervia
Newsletters.
Event sponsorships and mall marketing
Eventmarketingisuseful forcreatingproduct awareness,gettingthose earlyadoptersbygenerating
leads.Eventssponsorshipisaplatformwhere youcanassociate yourproduct withotheralready
establishedproducts. We will targeteventlikeMarathons,College festivals we will share the coffee
makingproceduresusingFacebooklive,creatingcustomerinterests.
Mall marketingwill be achievedtoitsfull potentialbyhavingindependenteventsbusydays
congregatinghuge crowdbycarrying outcontestsand entertainmenteventsmoreover,we cangift
our offeringinfree sachetstoall the participatingcrowdandperformarecipe rightthere.
Other aspects
Social mediamarketing,preparingFAQbeforehand,optimizingwebsitespeed,havingwell
positionedwebsite searchengineswillgive usbase of traffictocommunicate ournew innovative
marketingstrategies.
Financials:(INR- Approx.)
BREAK EVEN ANALYSIS(*takingindustryaverage considerationforcosts)
COSTS
COGS (25% of sellingprice) (includingrentals,salarieswages) 26671929.82
InnovatingPackagingcost(15 % of COGS) 4000789.474
Marketing Costs
Cost of Samples(Mall,Businesspark) 2,60,00,000
Rental cost + Attendantsalaryformall space/day 15,000
Cost of Online promotion=YouTube + Facebook 1,50,00,000
Cost of TV ad between8PM-11PM= 100,000 (Fornon-newschannel) &50,000
(forNC) 1,00,00,000
Cost of sponsorshipduring Marathon& fests 1,00,00,000
Cost of digital marketing(notFB& YouTube) 50,00,000
Cost of CreatingCommercial Ad 1,00,00,000
Distributioncost As itis
Total costs 106687719.3
Revenue 106687719.3
Sellingprice 140 per100 gm
Breakevensales required 762055.1378
***(Detailsof financialsisattachedinexcel sheet)
***(Detailsof productprototype isattachedinCATIA format)