Café coffee day, the 1,200-strong largest Café chain in India is targeting the youth segment and growing the market in the north to expand its business.

Though café culture is slowly catching on, coffee consumption is still very low in India in comparison to tea intake. What are you doing to promote it?
Cafés are acting as facilitators for coffee consumption. We are trying to ensure a good experience for our consumers, which they can take home, and that is how café culture will grow. If they don’t like the experience they are not going to take it home, and that’s where we are focusing on with our more than 1,200 cafés. Through the cafés we are trying to promote a coffee-drinking culture among people who are young at heart, and like to experiment with their tastes. We are also the second-largest exporter of coffee from India, which is the fifth-largest coffee producer in the world. So this whole ecosystem we have created over the years is what will perpetuate café culture in the country.

What’s the marketing strategy you are following to woo consumers and promote your Café Coffee Day chain?

We are the largest aggregators of youth in the country. We don’t do TV or press ads. Our 1,200 cafés are our billboards, and the biggest communicators of our USP. Besides, we use the digital medium aggressively to reach out to our target audience, which is the youth. We have a big presence in social media with over 1.1 million fans on Facebook. The residence time per person in our cafés is about 45 minutes to an hour. So during that time there’s also an opportunity to communicate with them subtly. The look and feel of the place, the service that you offer, the ambience, those are the things we use to communicate what CCD stands for.

What coffee-related products you offer to create the right environment?
In coffee we have premium offerings like French Press. And then we have lots of coffee powders. One that we have recently launched, about seven months ago, is called Drizzle. Here you have to just pour hot water over the coffee powder to prepare it, and it’s quite close to instant coffee.

Starbucks has announced plans to launch its India operations, Lavazza and Costa Coffee are getting aggressive by the day. How does CCD react to this growing competition?

Yes, there will be competition. But the Indian market is big, with a lot of untapped opportunities still. We would like the industry to grow and more players will help achieve that. Competition will create new benchmarks, and there will probably be new learnings for us. So far, most industry benchmarks have been set by us.

As in-home coffee consumption grows, that will be a big market to tap. What are your plans to boost retail of roasted coffee and beans?

We have been growing coffee since 1860. Our coffee is entirely grown in our fields. Some of the best people in the coffee industry are working with us. So we have the expertise in that space as well. As far as the growth strategy is concerned, there are two areas in India to look at. One is the coffee-shadow region, which is North India, and the coffee-strong region in the South. In the coffee-shadow region we are trying to promote coffee culture through our cafés and vending machines, which are driving out-of-home consumption. Besides, we have another subsidiary – Fresh & Ground – which looks after the retailing business of coffee beans. The major retailing market exists in the South, where in-house coffee consumption is high. As in the South, we hope that in-house coffee consumption will grow in the North in the future. And then we will have a strong retail opportunity there as well.

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Source : IIPM Editorial, 2012

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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What is the general scenario with respect to succession planning in the advertising industry?
It depends upon individual agencies. The truth is that the advertising and marketing environment is changing rapidly. So frankly, one can plan three years ahead. Anything beyond that is probably not practical. If you look at major global networks, there is a huge question mark on how the industry will evolve. Should the new chairman be from the traditional advertising space? Should he be from digital space? Should he have certain special skills? Or should we look for someone who just has damn good management talent? Therefore, because of the rapid change in the media environment, for anybody to be able to forecast the width of exact skill sets that would be needed for the next line of leadership is a challenge. Even if you look like a company like Pepsi which has a very strong management bench, they’ve revealed that they are looking for someone from a totally unrelated industry. Having said that, succession planning is important. One should certainly have a plan with an understanding of where the environment is headed. It is important to have contenders for succession. It’s fluid who will succeed Sir Martin Sorrell at WPP. It’s fluid who will replace Maurice Levy at Publicis. And that just reflects into structures.

Do you think this sort of a scenario is justifiable or should there be much more planning going into it?
In a stable environment, you work with firm plans. In fluid environments, you work with scenarios. And clearly, today we’re working in a fluid environment. Look at the amount of change that has happened over the last five years. We couldn’t have forecasted the magnitude of change that was about to come. Each one of us does our best to forecast it. But we realise that beyond three years, such forecasting isn’t very productive.

Does such an environment create a kind of uncertainty for people who have been loyal to a particular agency and have been expecting to end up at the top?
No. It rather creates opportunities. The only thing is the possibility of future shocks. Now the future shock is here and that fundamentally changes the nature of how you manage people and how you plan for them.

So if a top executive quits from an agency, do you think there is ample talent to replace him?
I think so. The talent might not have been life long at that ad agency. He might not be the senior most person, but is definitely a person who is more suited for the job.
 
The quality of people coming in to the advertising industry has dramatically changed over time. The level of commitment is not the same as it used to be. Do you think this is true? If yes, what impact has it had on succession planning?
A number of changes have taken place. What has happened is that as I said, the media environment has become a lot more complex. So if you look at a CEO of what has now become a brand agency, if he had very strong training in building brands and particularly training in building brands through TVCs and good team management skills, I think he would be a prime candidate for an ad agency. Today, when agencies are searching for how to provide services full circle to the clients, it is not that clear that the guy who has managed to build brands through television advertising is the right candidate to handle the width of such responsibilities. The compensation environment is far less fixed. New skill sets have to be built. So even if you acquire talent in two areas, four other areas are still left. So you need higher management caliber talent.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned Links

IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

IIPM Proves Its Mettle Once Again....
Arindam Chaudhuri on Internet.....
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
Planman Technologies
IIPM Contact Info

IIPM History
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IIPM Infrastructure
IIPM Info

IIPM: Selection Process
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