HOW A FIRM CAN IDENTIFY

DETERMINANTS OF DEMAND AND BUILD

CONSUMER SEGMENT AROUND IT: CASE
OF CAFE COFFEE DAY
INTRODUCTION
Founded in 1996
Amalgamated Beans Coffee Trading Co Ltd.
Pioneer of the coffee culture and the first to
introduce coffee bar concept
First caf in Bangalore
Menu ranges from signature hot and cold coffee to
several exotic international coffees, tea and exciting
merchandise like cookies etc.
INTRO CONTD.
Present in every part of the world which includes
vienna, Austria and many other countries.
Many big investment companies hold stakes in
Amalgamated Bean Coffee Trading Co. Ltd
CHALLENGES FACED IN THE BEGINNING
Positioning coffee in a different way.
Less incentives for workers.
Innovation and creation requires
Right real estate at right price

SCENARIO OF COFFEE MARKET IN INDIA
0%
1%
2%
3%
4%
5%
6%
7%
India RoW
Coffee Consumption growth Coffee Retail Penetration
In India
170
0 1000 2000 3000
Total Cities
Coffee
retail
Penetration
The organized coffee market in India is about Rs 600 crores. This is
approximately 20% of the total domestic coffee consumption (Rs 3,000
crores)
According to Technopak Advisors, the caf market in India is estimated at
$150 million (Rs 678 crore) and growing at 40 per cent over the last five
years.

Market
Share,
0%
CCD,
54%
Barista,
26%
Costa
Coffee,
14%
Others,
6%
Market Share
37% customers are between 20-24, 27 % between 25-29, 52% students,
500-800 daily footfall as per the store size
The group comprises of mainly college going students and young
working professionals


Demographic segregation
27%
66%
7%
Professionals
Students
Others
CCDS KEY TARGET AUDIENCE
Barista/Costa/St
ar Bucks, 20%
Caf Coffee Day,
55%
Others, 25%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Social Class
Social Market Share
CCDs major customer is the middle and upper middle class which forms
55% of the Indian population
CCD offers its products at almost 30% cheaper rates than its major
competitors Barista and Costa Coffee

ECONOMIES OF SCALE
Caf Coffee Day is the vertical integration of its
parent company Amalgamated Bean Coffee
Trading Company
The major raw material Coffee Beans is
manufactured by the parent company hence cutting
costs significantly. This helps in pricing the product
at lower costs as compared to its competitors and
not sacrificing on their margins
They also manufacture their vending machines and
coffee makers.
They focus on 3As: Accessibility, Affordability
and Acceptability
PRODUCT PORTFOLIO
FUTURE PLAN
Hope to grow CCD retail business at about 20% in
2014-15
Hope to do a revenue of Rs.1,200 crore from retail
sales
Revenue of another Rs.350 crore from the
wholesale and export business this year
Indian coffee cafe market will grow from Rs.1,683
crore in 2012 to Rs.2,276 core in 2017.
While India's per capita coffee consumption is
abysmally low at 82 grams.
Tamil Nadu accounts for more than 40 per cent.
The domestic consumption is growing at about 5%
a year...driven largely by consumption through
branded coffee chains.
According to industry experts, the coffee chain
market in India is worth around Rs.1,000 crore and
is growing at a healthy 30 per cent per annum.

INTERPRETATIONS
Pricing strategy: Rs.50 to Rs.200 per cup- To
maintain marginal utility.
Demand for coffee consumption through branded
coffee chains rising- higher supply needed.
Supplementary items like snacks are also having
higher demand.
Complementary items like Tea is not popular in
organized store chains.


INTERPRETATIONS CONTD.
Growth story demonstrates the theory of
determinants of demand:
price
income
related goods prices
tastes
expectations


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