Report on

CAF COFFEE DAY

(SUB : SERVICE MARKETING )

SUBMITTED BY

SAJAL SINGH (2012IPG-103)

ABVIndian Institute of Information Technology & Management, Gwalior

26 November, 2016

pg. 1

CAF COFFEE DAY

1. profile/history/background
Caf Coffee Day (abbreviated as CCD) is an Indian caf chain owned by Coffee Day Global
Limited, a subsidiary of Coffee Day Enterprises Limited
Caf Coffee Day was started as a retail restaurant arm of CGL in 1996. The first CCD outlet was
set up on July 11, 1996, at brigade Bengaluru , Karnataka . It rapidly expanded across various
cities in India adding more stores with more than 1000 cafs open across the nation by 2011.
In 2010, it was announced that a consortium led by kohalberg would invest 10 billion
(US$150 million) in Coffee Day Resorts, owned by the company. The same year, the logo was
changed to the current logo, which the company stated was to showcase the chain as a place to
talk. This was done with major changes in the layout of the stores, including the addition of
lounges and a total revamp of the
The company is known for being vertical integrated to cut costs: from owning the
plantations, growing the coffee, making the coffee machines to making the furniture for the
outlets

Indias favourite coffee shop, where the young at heart unwind.

Caf Coffee Day is a part of India's largest coffee conglomerate, Amalgamated Bean Coffee
Trading Company Ltd. (ABCTCL), the first to roll out the coffee bar concept in India with its
first caf in Bangalore. Its a Rs. 750 crore, ISO 9002 certified company. With Asias secondlargest network of coffee estates (10,500 acres) and 11,000 small growers, making its holder the
largest individual coffee plantation owner in Asia, this in addition to being India's only vertically
integrated coffee company. Coffee Day has a rich and abundant source of coffee. This coffee
goes all over the world to clients across the USA, Europe and Japan, making us one of the top
coffee exporters in the country.

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We all know that Caf Coffee Day is one of the most popular hangout places. The coffee joint is
very famous among youngsters. Coffee is one of the favorite beverages and has become more
appealing because of its variety.

Coffee has been around in India since the 17th century. However, coffee drinking has
traditionally been largely restricted to domestic consumption, and mostly in the South Indian
states of Tamil Nadu, Karnataka, Kerala and Andhra Pradesh. Coffee has been around in India
since the 17th century. However, coffee drinking has traditionally been largely restricted to
domestic consumption, and mostly in the South Indian states of Tamil Nadu, Karnataka, Kerala
and Andhra Pradesh.

India ranks sixth as a producer of coffee in the world accounting for 4.5% of the global coffee
production. India has about 170,000 coffee farms cultivating around 900,000 acres of coffee
trees. India is the largest producer and consumer of milk in the world with 98% of milk being
produced in rural India. Coffee consumption in India is growing at 6% per annum compared to
the global 2% plus.

Caf Coffee Days menu ranges from signature hot and cold coffees to several exotic
international coffees, tea, food, desserts and pastries. In addition, exciting merchandise such as
coffee powders, cookies, mugs, coffee filters, etc. is available at the cafs.

It was in the golden soil of Chikmagalur that a traditional family owned a few acres of coffee
estates, which yielded rich coffee beans. Soon Amalgamated Bean Coffee Trading Company
Limited, popularly known as Coffee Day was formed. With a rich coffee growing tradition since
1875 behind it coupled with the opportunity that arose with the deregulation of the coffee board
in the early nineties, Coffee Day began exporting coffee to the connoisseurs across USA, Europe
& Japan.

pg. 3

Caf Coffee Day (CCD) pioneered the caf concept in India in 1996 by opening its first caf at
Brigade Road in Bangalore. Today, more than a decade later, Caf Coffee Day is the largest
organized retail caf chain in India with cafes functioning in every nook and corner of the
country. Drawing inspiration from this overwhelming success, Caf Coffee Day today has cafes
in Vienna, Austria and Karachi. Whats more, new cafes are planned across Middle East, Eastern
Europe, Eurasia, Egypt and South East Asia in the near future.

2. characterstics
Caf Coffee Days menu ranges from signature hot and cold coffees to several exotic
international coffees, tea, food, desserts and pastries. In addition, exciting merchandise such as
coffee powders, cookies, mugs, coffee filters, etc. is available at the cafs.
The offerings are designed in such a manner that one cannot be spelt without the other; there are
the hot coffee or cold coffee combinations with delectable desserts and special coffee and eats
combinations for even a group of four friends.
Coffee Day Comprises of the following Sub Brands

Coffee Day - Fresh & Ground

Caf Coffee Day

Coffee Day Vending

Coffee Day - Xpress

Coffee Day Exports

Coffee Day - Perfect

Pioneers of the Caf Concept in India with its first Caf at Brigade Road, Bangalore in 1996.
This Caf was opened as a Cyber Caf (first of its kind) but later, with the burst of cyber cafes it
reverted to its core competency i.e.; Coffee. Essentially a youth oriented brand with majority of
its customers falling in the 15-29 year age bracket .Each caf, depending upon its size attracts
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between 400 and 800 customers daily. It is a place where customers come to rejuvenate
themselves and be themselves.

Key Features

Pioneers of the Caf Concept in India with the its first Caf at Brigade Road, Bangalore
in 1996. This Caf was opened as a Cyber Caf (first of its kind) but later, with the burst
of cyber cafes it reverted to its core competency Coffee.

Essentially a youth oriented brand with majority of its customers falling in the 15- 29
year age bracket

Each caf, depending upon its size attracts between 400 and 800 customers daily.

It is a place where customers come to rejuvenate themselves and be themselves.

3. driving side
1. Highly rated Taste & Quality of products: Caf Coffee Day got a high rating in the market
survey, for the Taste & Quality of their products. If they work on this aspect, there is huge
potential for them to attract customers, just based on the taste and quality of products. This is
also helped by the fact that they grow their own coffee beans, and this provides an important
base for future expansion and growth. Caf Coffee Day even won the Barista Coffee- Making
Championship for the Best Coffee.
2. Value for money proposition: Caf Coffee Day is projected as an affordable brand. This
strategy has worked extremely well so far, and Caf Coffee Day got a high rating, both for their
prices and for their value for money, in the market survey.
3. Strong youth orientation: The Caf Coffee Day brand is, and always has been, extremely
youth- oriented. In a country where over 40% of the population is under the age of 20, there is
huge potential for Caf Coffee Day to become one of the countrys largest youth brands. The
untapped market share and potential for growth is enormous.
USP of the Brand:
1 .Affordable Price
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2 .Coffee Winner of Platinum, Gold, Silver and Bronze medals at the India

Barista

Championship 2002

4.service quality gap :

The five gaps that organizations should measure, manage and minimize:
Gap 1 is the distance between what customers expect and what managers think they
expect Clearly servey research is a key way to narrow this gap.
Gap 2 is between management perception and the actual specification of the customer
experience - Managers need to make sure the organization is defining the level of service they
believe is needed.
Gap 3 is from the experience specification to the delivery of the experience - Managers
need to audit the customer experience that their organization currently delivers in order to make
sure it lives up to the spec.
Gap 4 is the gap between the delivery of the customer experience and what is
communicated to customers - All too often organizations exaggerate what will be provided to
customers, or discuss the best case rather than the likely case, raising customer expectations and
harming customer perceptions.
Finally, Gap 5 is the gap between a customer's perception of the experience and the
customer's expectation of the service - Customers' expectations have been shaped by word of
mouth, their personal needs and their own past experiences. Routine transactional survey after
delivering the customer experience are important for an organization to measure customer
perceptions of service.
Caf Coffee Day have under performed or not lived up to potential in certain areas. The
areas are weaknesses, which need to be improved upon, as that both can eliminate any
disadvantage that may have, and improve customer satisfaction we can use service quality model
1. Weak brand image: The Caf Coffee Day brand, although clearly a youth- oriented brand,
lacks the power and strength expected to maintain brand loyalty. The brand doesnt project a
clear image to customers about what Caf Coffee Day is all about. This could prove as a
deterrent during future national and international expansion.
2. Inefficient human resources: According to the market survey, Caf Coffee Days staff
received only an average rating for their behavior and service. Caf Coffee Day needs to work
hard at this aspect, especially considering they are a service sector organization that is looking at
large expansion.
3. Ambience & Dcor: The Ambience & Dcor of Caf Coffee Day outlets received a belowaverage rating from respondents of the market survey. A lot of respondents did not like the fact
that Caf Coffee Day outlets and literature served as prime space for a lot of advertising and
promotions. They felt as if the cafs had been hijacked just for advertising .

pg. 6

5. caf coffee days 7 p`s

5.1 Pricing
Considering that Caf Coffee Day knows its major customer lies in the bracket of 15- 29, it has
tried to derive a policy whereby it can satisfy all its customers. The price for a cup of coffee
ranges from Rs.20 to Rs.200. From the time it first started its operations, there has been only
minor changes in the pricing policy of Caf Coffee Day. The changes have been more due to the
government taxes than any thing else.
From the pie diagram above one can easily make out the consumer is ready to spend Rs . 100
200. So from this one can make out that Caf Coffee Day need to keep the prices low inorder to
cater the current segement.

5.2 Promotion
Caf Coffee Day does not believe in mass media promotions. But they are involved in all the
areas of serious consumer passion.

Through television

Caf Coffee Day held a contest around a very popular programme on Zee English called
Friends. All the six lead characters are shown often visiting a coffee shop and a lot of youth like
watching the programme. That is why they had a contest running where customers could win
Friends' merchandise. The linkage was that it is a youth based programme and it had a coffee
house.

They have tied up with Channel [V]'s Get Gorgeous contest. The reason being that a lot of their
young consumers are interested in careers. Modeling is a career that a lot of youngsters are
interested in and this was an excellent platform. They have also done promotion for History

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Channel, where they have run promotion for Hollywood Heroes. They had asked a few question
and a lucky winner won a trip to Hollywood.

Ticket sales

Caf Coffee Day is involved in ticket sales in quite a few events, Enrique being one of them.
They were involved in WWE, Elton John, and Bryan Adams ticket sales. These acts are very
much appreciated by their consumers. It helps both the organizers as well as Caf Coffee Day.
Organizers need to tell people where the tickets are available and single Caf Coffee Day logo
says it all. From Caf Coffee Days point of view, they always ask for a certain amount of tickets
around which they have a contest. Couples can win ticket for free. This in turn raises the
awareness level as cafe staff approaches the consumers to inform them about the contest. There
is not a better publicity mechanism then the person who is serving you telling you about the
same.

Association with movies

Caf coffee day has been associated with a pool of movies to broadcast it self .Its main intention
is to increase the visibility rate within the crowd who are a part of the audiences. They have been
a part of various Bollywood movies .

Sales Promotion

Caf coffee day has been a very promising initiator than compared to its competitors for sales
promotion like:

Giving away Gifts during occasions e.g. valentine day

Offering Coupons

pg. 8

 Caf Citizen card which allows regular members to avail discounts upto 20% and become
a member after a purchase amount of upto 2000 Rs.
Sugar free campaign which was mainly done to spread awareness of staying healthy and
fit by using the sugar free sachets
Discounts during festive times to members

5.3 Place
Caf Coffee Day looks to cater to their target market with strategically located outlets. Their
outlets are generally located in High Street/ Family Entertainment Centers. Considering their
generic appeal, there are Barista outlets located in and around Malls, Cinemas, Colleges, Offices,
etc. This endorses their brand image of a caf that appeals to coffee lovers of all ages.

5.4 People
People at Caf Coffee Day believe that People are hired for what they know but fired for how
they behave. Motivation and personal skill are laid emphasize upon.

5.5 Process

The order process at Caf Coffee Day is based on services, where the customer can read the
menu and order. Whereas they have a flexible delivery process, where the customer can go
directly and take what they have ordered for or the order is delivered on his table.

5.6 Positioning

Research shows that 37% of the customers are between 20 and 24years. 27% of the customers
are between the age group of 25-29 years. 60% of the customers who visit the caf are male and
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40% are female. 52% of customers who visit the cafes are students.18% of the customers visit
the cafes daily while another 44% visit weekly. Each caf, depending upon its size attracts
between 500 and 800 customers daily, mainly between 4pm and 7 pm. Customers describe Caf
Coffee Day as the place they frequent most after home and workplace/college. It is a place
where they meet friends and colleagues, in groups of 3 or more. The prices here are perceived to
be reasonable and it is a place where customers come to rejuvenate themselves and be
themselves rather than a place to be seen at vis a vis other cafes.

5.7 physical evidence Caf Coffee Day had gone in for image change and revamping of
interiors in the last quarter of 2001. Caf interiors have been given a whole, new look. In a
change from the largely wood and granite based interiors, there is more of steel and lots more
colour now. The young colours of today, lime green, yellow, orange, and purple predominate.
Caf Coffee Day looks to cater to their target market with strategically located outlets. Their
outlets are generally located in High Street/ Family Entertainment Centers. Considering their
generic appeal, there are Barista outlets located in and around Malls, Cinemas, Colleges, Offices,
etc. This endorses their brand image of a caf that appeals to coffee lovers of all ages.

6.service marketing triangle

The service triangle outlines all the relationships that exist between the company, the
employees and the customers. Furthermore, it also outlines the importance of systems in
a services industry and how these systems help achieve customer satisfaction .

pg. 10

 External Marketing : "Setting the Promise"

Marketing to END-USERS.
Involves

pricing

strategy,

promotional

activities,

and

all

communication

with customers.
Performed to capture the attention of the market, and interest in the service.
CCD does effective marketing by all chanel ,tv association with movies etc Caf coffee day has
been associated with a pool of movies to broadcast it self .Its main intention is to increase the
visibility rate within the crowd who are a part of the audiences. They have been a part of various
Bollywood movies .

Interactive Marketing : (Moment of Truth, Service Encounter)

This refers to the decisive moment of interaction between the front-office
employees and customers.

pg. 11

 This step is of utmost importance, because if the employee falters at this level, all
prior efforts made towards establishing a relationship with the customer, would be
wasted.
Caf coffee day has been a very promising initiator than compared to its competitors for sales
promotion like:

Giving away Gifts during occasions e.g. valentine day

Offering Coupons
Loyalty card to customer for proud association .

Internal Marketing : "Enabling the Promise"

Marketing to EMPLOYEES.
Involves training, motivational, and teamwork programs, and all communication
with employees.
Performed to enable employees to perform the service effectively, and keep up
the promise made to the customer.
Viewing employees as internal customers, viewing jobs as internal products and then
endeavoring to offer products that satisfy the needs and wants of these internal customers while
addressing the objectives of the organization .
CCD offer discount and other benefit to customer to increase market penetration like
Caf Citizen card which allows regular members to avail discounts upto 20% and become a
member after a purchase amount of upto 2000 Rs.
Discounts during festive times to members

7. service communication
pg. 12

CCD Ensure that its employees understand the specific way they want their store run
and their customers served. They haveIntroduce a typical service strategy from start to
finish. This should cover everything from greeting customers to issuing the final bill.
Employees who understand standard operating procedures are better able to communicate
with one another in the process of service delivery. They inform about current offer,
discount available to customer . they describe the quality of product to new customer
and its features .
Inner-staff Communication
Create Nonverbal Cues
Develop Internal Shorthand
Encourage Interactive Communication
CCD employees use digital platform, social media , telephone to
communicate with customer about service offering .

8. service encounter

When the customer first enters the restaurant he can find AD posters on the front glass of
the Cafe Coffee Day.

After entering into Cafe Coffee Day, customer is guided by an employee, where he is
provided with a menu card for the order. Here customer can feel the ambience and the
dcor of the restaurant. After giving an order to the employee, employee passes the order
to the front section of the kitchen. The employees in the front section would pass the
order to back-end kitchen where the order is prepaid. Parallely, employee would update
the billing machine. The prepaid order is then served to the customer.
After availing the services and the products of Cafe Coffee Day, customer would ask for
Bill. Employee would then give the updated bill to the customer.

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 Customer will pay the bill either through cash or through credit/debit card. After payment
is done the database of Cafe Coffee Day gets updated.
After payment of the bill the customer leaves the restaurant.

service recovery

9.

is the process for resolving Failures that maintains the

perception of quality
Service Recovery Paradox: Can Service Recovery increase satisfaction with service to
levels above normal service? A Service Failure represents an expectation not met,
for a customer this is like a BROKEN PROMISE .

Service Recovery best done in service sequence and not done later

Service Recovery best done by the groups involved in the Service Failure

Service Recovery best to exceed service expectation in some way

Cost of Service Recovery may be lower than cost to replace customer

Caf Coffee Day has done extremely well so far to project itself as an affordable youthoriented brand. But there are still certain areas where their brand needs to be much
stronger and help them in service recovery.
With regard to the physical evidence associated with the brand, Caf Coffee Day needs
to do a lot of work if they hope to catch up with Barista. My first recommendation for
Caf Coffee Day is to clean up the dcor at every outlet, wherever unnecessary
advertising is taking place.
Although it might be an important source of revenue, long-term customer perception of
the brand isnt very positive.
Caf Coffee Day would do better to provide promotional space for its partners with the
use of clever collaborations, and not printed advertisements and posters everywhere.

pg. 14

 My second recommendation is that Caf Coffee Day looks at its current recruitment,
selection and most importantly, its current training policies.

10. marketing mix

Caf Coffee Day has a well-equipped roasting unit catering to the specific requirement of
the consumers. The process is carried out under the control of experienced personnel to
meet highest quality standards. The most modern technology available is used to maintain
consistency and roast the coffee beans to the demanding specifications of the discerning
coffee consumers.
Essentially a youth oriented brand with majority of its customers falling in the 15- 29
year age bracket. Each caf, depending upon its size attracts between 400 and 800
customers daily.
USP of the Brand:
Affordable Price
PRODUCT: Caf Coffee Day product mix constitutes a wide range of products like
samosa, biryani, masala sandwich, tikka sandwich etc. The best selling item in summer is
frappe, which is coffee and ice cream blended together. The young people favor it. In
winter it is cappuccino. Their merchandising includes funky stuff like t-shirts, caps etc.

Serving Size: The serving size of a product is a measure, not only of quantity, but also
of value for money
PRODUCT
Hot coffee
Cold coffee
Smoothies

granitas

SERVING SIZE
210 ml
350 ml
350 ml
350 ml

PRICE: Considering that Caf Coffee Day knows its major customer lies in the bracket
of 15- 29,it has tried to derive a policy whereby it can satisfy all its customers. The price
for a cup of coffee ranges from Rs.45 to Rs 80. From the time it first started its
operations, there has been only minor changes in the pricing policy of Caf Coffee Day.
The changes have been more due to the government taxes than any thing else
pg. 15

PLACE: The strategy CCD has adapted is to place a cafe in every possible location where
some business can be generated. This is a prime factor in determining the success of a
retail chain. Caf Coffee Day looks to cater to their target market with strategically
located outlets. Their outlets are generally located in High Street/ Family Entertainment
Centers, gas stations, near Colleges etc.
PROMOTION: Caf Coffee Day involved in all the areas of serious consumer passion
like: Television: Caf Coffee Day held a contest around a very popular programme on
Zee English called Friends. All the six lead characters are shown often visiting a coffee
shop. They have tied up with Channel [V]s Get Gorgeous contest. Tie-ups: Besides that
Caf Coffee Day also tie up lot of the youth brands. So they have a contest going on with
Levis, another one with Scooty, Liril, latest one with Airtel Friends. Association with
movies: CCD can be seen in movies like Khakhee and Mai Hoon Na Sales Promotion:
Caf Coffee Day uses special Caf Citizen Card for rewarding Caf Coffee Days
customers. It is a loyalty program to gain new customers and retain the existing ones.
PEOPLE Motivation and personal skill are laid emphasize upon. Their employees are
like friend to the customer but at the same time they know about the international
standards of hygiene and cleanliness and personal grooming .

11. STP analysis

Coffee a sunrise industry
>Growing young population and promotion of coffee culture
Segmentation: segment by city wise like metro , one tier, two tier, three tier cities and
also segment by coffee wise in metro high quality coffee can be serviced because people
have high disposable income in metro.

Target audience Major chunk of CCD customers falls within the age group of 20 to 30
which accounts for 57% of the overall percentage.

The group comprises of mainly college going students and young working professionals
There is a definite skew towards singles: 66% singles, 27% married & 7% others.
Middle class and upper middle class youth
CCD seeks to target not just the youth but anyone who is young at heart.
Medium Price Brand

pg. 16

Positioning :

Third Place" away from the home and college or workplace for the

young and the young at heart.

Fun Place , mall etc

The group comprises of mainly college

going students and young working
professionals

pg. 17