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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