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| IIITA's e-Magazine |
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 Oct-Dec 2007 Vol 4 Issue 15 |
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Cascading |
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| CASE STUDY ON CAFÉ COFFEE DAY |
Cafe Coffee Day has opened its 100th outlet in Delhi. Barista is planning to increase the number of its outlet from the present 130 to 200 by March 2004. Star Bucks is thinking of entering the Indian market. Reliance is setting up Java green coffee outlet s in each of its Web World stores. Coca Cola is planning to launch its Georgia Brand of coffee & tea through vending machines across the country by 2004.
Liquid coffee retailing is catching up with consumers & corporate alike. The activity in this sector has greatly increased in the past few years.
There are two kinds of liquid coffee retailing modes – coffee parlors & vending machines. Coffee retailing through vending machines is not a new concept and has been in the market from the early 1990’s. The vending machines business is dominated by two established players, Brooke Band & Nestle. Each of them has 15,000 machines spread across the country. Tata Coffee is a smaller player with 3,500 machines. Vending machines are targeted at travelers & consumers who are on the move. Another niche category within this segment is fresh roasted & ground (R&G) coffee vending machine dominated by Fresh & Honest with 900 units. With increased urbanization & consumers spending more time outdoors, coffee retailing through vending machines is gaining importance. A new entrant in this market is Café Coffee Day which is aggressively increasing its presence in the market.
A recent trend in the liquid coffee retailing segment is the emergence of coffee parlors. The key players in this segment are Café Coffee Day & Barista. Both of them have a national presence & have plans to enter the outside market (barista has already has an outlet in Colombo)
Analysts attribute various reasons to the success of coffee bars. Demographic & income shift are key reasons for the popularity of coffee bars. Due to urbanization consumers are exposed to western culture & want to replicate it. Further with the increase in income levels of consumers are spending more not just to satisfy the functional needs but also their lifestyle needs. The young generation customers who seek variety are also major patrons of the coffee bars.
These coffee bars are also becoming media vehicles for companies in other businesses. Popular comic strip, Garfield is being launched in India not through bookstores but Barista coffee bar chain. Elle 18 plans to offer the product in a package of specially designed Elle 18/Barista coffee mugs. These products would be promoted through the in-stores activities like scrolier cards, menu cards & shade cards. Special contests will be organized with prizes such as free coffee for two months.
Café Coffee Day (CCD) also ran special promos on occasions like Valentine’s Day & Christmas. Companies like Wrangler, Archie’s, & Weekender turned up on their own to give away prizes during the events. Hindi movies & TV serials have also used CCD has been designing special drinks for products like Levi’s 6 “Below Jeans.
Qwiky’ s , another coffee bar chain has sold on bartered in store space to Cadbury, Airtel, Warner Brother ESPN, Epson Printers& Royal Enfield, among others.
QUESTIONS:
1. What environmental factor are responsible for the popularity of liquid coffee retailing?
2. What prompted marketers to use coffee parlors as media vehicles?
3. How can coffee parlors chains benefit from running promos of the other companies as their stores?
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