Coffee parlous in India hooting up Question 1) With coffee being the hot beverage in India. The consumption of coffee in in India is done in south of India The concept of a cafeГ© today is not merely about selling coffee, but about developing a national brand Barista : growth : Barista coffee was establishes in 1999 with the aim of identifying growth opportunities in the coffee business. Increasing disposable incomes and global trends in coffee indicate immense growth potential in one particular segment. Barista exists in over 22 cities, and operates over 140 outlets nationally.
In the last 2 years, Barista has opened over 00 outlets in the country and with a new outlet opening nationally everywhere. Barista has very wide variety of product to offer from Arabian coffee to Brazilian coffee seeds. Not only coffee but also in teas Assam chaw, Adrenaline tea to early grey, and in eatables and sides it has coffee rolls, walnut brownie. It has chocolate chip muffins etc . It has maximum of the items to satisfy a short time hunger. And satisfy the taste buds for all kind. They also merchandise they products like tiramisu flavor , coffee mugs.
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Every month it introduced and focused on a particular type of coffee. The idea was to change customer’s occasional indulgence and make it a habit and educate them about the original coffees. T also developed store-in-store concept by focusing on themes that compliment coffee, such as music, books and art. Barista entered into marketing tie-ups with planet M, crossword and Ebony to set up it Espressos at the corner. It also wanted to enter into co-branded marketing tie-ups with several banks for credit cards. Barista entered home brew segment with freshly grounded coffee.
Barista planned to tie-up with BAN Omar for opening “Bankable”. This concept helps to ‘bank at leisure” enabling customers to visit the bank after banking hours on any day in an informal and friendly environment. T even tied up with BPCS to open coffee kiosks. Baristas adopted a strategy on which it segmented itself to the elite class. This class has high potential because these people associate with anything that is of status symbol. Barista choose this segment contains people with big designations like Doctors, Coo’s and people belonging to elite class.
They like to be in a place which is classy and luxurious like Barista. This segment has high attention. CDC: CafeГ© Coffee Day offered an informal ambiance with bright and eye-catching interiors. Visitors could sip coffee, browse the internet, conduct business meetings or Just while away time with friends. Cafe Coffee Day was well looked as a hangout for college crowd and teenagers. It is youth based . It also displayed young artist panting on walls which attracted young crowd more. In 2001, a new logo was chosen leaving the old one which was bit old fashioned.
The interior were redesigned and new menu was also introduced along with the new crockery. The baseline also changed to “A lot an happen over coffee”. Musical events were organized to attract youth. “CafeГ© jockey’ was introduced which selected children above 1 errs and gave them 1 week training. Cafe Coffee Days also targeted other locations like corporate houses, airport, competitors. Cafe Coffee Day positioned itself as a mass market brand, mint-metros were also added to its list. It targeted the middle class, upper middle class, house wives and students.
The prices are less compared to the other two. This segment has high potential and great buying power and has great market share. Swiss: Swiss treated was that to make their customers make them feel comfortable and have fun. The staff at Swiss was trained to understand body language. They were very frankly with the customers. Swiss objective was to target the “young at heart” that were looking for fun and relaxation. They offered different varieties of coffee. Customers were given a choice of drinks that were not common in India. It had a separate vending area for chocolate products.
Swiss coffee pubs were located at strategic points which were frequented by youth. Swiss pubs were located at intersection of odds in a corner were two side of cafeГ© were made of glasses and faced the road. It even had coffee making machines for sale and also a trainer to teach how to make perfect espresso. It also planned to launch ready to drink coffee sachets. Their prices were based on the real-estate prices in that particular area. Swiss positioned itself as a place were people can come for fun and relaxation it targeted people who having fun and young at heart.
People who were quite interactive and friendly were appointed as staff to make their customers feel comfortable and while away their time. It was a place to hangout. The strategy adopted by Barista would suit the Indian market. Barista came up with uniqueness in its interior with Indian neighborhood. It also offered several services along with serving coffee. Several international varieties of coffees are served in Barista. The ambiance was great. The perfect Italian varieties of coffees were served with brew masters from Italy. They came up with single origin coffees and attracted with the niche set of consumers.
Many varieties of coffees are served in Barista people feel very comfortable. It also serves food items like pastries, sandwiches. People started thinking that Barista has come a status symbol. So they wanted to associate themselves with Barista. It’s planning to go international into many countries. It’s even planning to co brand with several banks for credit cards. People of India always wanted something new and different. So Baristas strategy perfectly suits the Indian market. Question 2) Barista concentrates on youth segment where as Scud’s concentrated on Mass market and Swiss concentrated on the youth in the age group of 18-30. F we see the ambiance and the way service was given in Barista, it is completely different from what is being done by CDC or Swiss. Bright ambiance with music, games like chess to play and even if the customer doesn’t want to drink can come and relax there. This was a strategy because they knew youth would definitely feel awkward to sit for few minutes and go, instead they would order something to drink and they had variants in every month which made the youth to try everything new out there. Scud’s had their own mass targeted market which also had unique ambiance and the main innovation when they adopted internet system inside the cafeГ©.
The customers could use internet inside the cafeГ© without paying more for it and as the target was mass arrest, it attracted many businessmen who could do meetings there where as there was a bell which could be rang by the customers if they are happy. Even though it looked small this idea worked really well for them. These small changes which the players did worked as a potential for them and it did not Just innovate but it also opened a new way of thinking for the other competitors in this particular segment.
The potential of targeting the youth may be that , they will frequently visit the cafeГ© as most of them will be college going and the potential of taking Mass segmenting of Scud’s is that they can easily capture people of all ages which is inefficient in many ways for them so that they will not Just rely on one particular market or target. Question 3) With Cutbacks and other coffee retailers who want to enter into the Indian market, these Indian retailers would have to really concentrate on developing a competitive advantage.
According to me CDC is best equipped to take on the increased level of competition. And CDC is the makers leader in the coffee industry. Comparatively than barista or quiz’s They are not going to be in the same market segment as Cutbacks the latter being more expensive and not so open to the masses. Taking this into consideration they will not greatly be affected by the entry of foreign players, as they would be catering to 2 different segments of coffee drinkers.
Barista on the other hand who are currently catering to the premium section would probably feel the hit more, they would be replaced by Cutbacks and others for people who want a premium coffee experience. They would have to come up with a different strategy now to sustain themselves in the market. Question 4) Yes, intense competition in the coffee retailing business is likely to create or cause a consolidation. Consolidation is nothing but a collaboration with another impasses. This would avoid weak coffee firms from collapsing in the market. Entry of foreign players, this would lead to domestic chains to go for partnerships, strategic tie ups and M&A’s. By combining with other players in the market, they would be able to compensate for any shortcomings that would be existing in each others firm, and work together to be stronger and beat the competition that would be present in the market. According to the case CDC is already gearing up to face competition by consolidating with Alga group, Barista collaborated with Data Coffee after the entrance of Star bucks in the market