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CHAPTER I
Introduction
Starbucks started operations in 1971 at the Pike Place Market in Seattle. Original
owners were Jerry Baldwin and Gordon Bowker, where their initial aim is to set up a store
and bring high quality whole-bean coffee to Seattle instead of offering coffee by the cup. In
year 1982, the company changed its direction after the recruitment of Howard Schultz as
director of retail operations and marketing of Starbucks. Schultz utilized the ability of
Starbucks and opened a new coffeehouse in Seattle; adapt the Italy espresso bar concept with
varieties of brewed coffee for Seattle coffee lovers. The test was a great success, but the
owner decided not to expand the concept, and this disagreement caused Schultz to leave the
company in 1985 and start his own coffee-bar company, II Giornale by year 1986 with his
partner Dave Olsen. The next year, 1987, II Giornale decided take over Starbucks with total
USD3.8million cost. Schultz had great plans for expansion, with the based of 11 stores in
1987, Starbucks opened 15 new stores in 1988 and 20 in 1989, total of 165 stores in year
1992. The same year, Starbucks listed on NASDAQ and the IPO raised USD29million for
Starbucks and by the closing bell the companys market capitalization stood at
USD273million. The growth was estimated 200% per year increasing after 5 years after
Schultz and company bought over. In order to go further steps of expansion, Starbucks
formed more strategic partnerships to gain from their targeted customer, such as United
Airlines flight, Host Marriot, Aramark group, Kraft, tobacco giant Philip Moris, and many
others. In 1996, Starbucks opened its first store outside US and Canada in Tokyo, this was
achieved through joint venture with Sazabu Inc. Starbucks now operates about 1,200
international outlets, there are 850 Starbucks located in Fourteen Asian and Pacific, which
are:- Japan, Singapore, Philippines, Thailand, Malaysia, South Korea, Beijing, Shanghai,
Hong Kong, Macau, Australia, New Zealand, Taiwan, and Indonesia.

Starbucks vision

is to establish the company as most recognized and respected brand in the world. The core
value of Starbuck is actually relationship, it creates a great working environment and treat
each other with respect and dignity. Schultz and company strongly believe relationship is
essential to motivate the whole company to build a trustful, and long terms relationship with
customer and business partners.

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Situational Analysis
General Environmental Analysis
Economic view
China market recovered rapidly after Asian financial crisis in 1997, considered
the fastest growing market in the world in terms of gigantic population and the overall
rising economic growth. Foreign investment increase drastically after China entering
the World Trade Organization, which occurred because of cheap labour rates and
manufacturing costs, the fast developing economy attracted investors from various
industries in worldwide. And these factors had created a good Starbucks supplier
network in China and generate more high-income potential customers for Starbucks.
The demand of China domestic market is inestimable during that period, and the
stable economic environment promises investor like Starbucks a bright future.
Social view
Globalization on Chinas economic development affect the young generation
of Chinese customers have been the most susceptible to the western trend. Because of
the rigid government legislation, which allowed Chinese people to have only one
child, and it caused the purchasing power increased for those young married couples
and willing to spend more money on recreational issue. The change of culture
influences many aspect of peoples life. Nowadays, more Chinese is pursuing high
quality of living environment; the increasingly wealthy Chinese people are willing to
pay more for new experiences and better products of service. These social facts
created a good potential market for Starbucks.
Political view
China market was slowly opened to foreign trade and investment after year
1978, Deng XiaoPing controlled the country. Under his rein, China abandoned the old
planning and slowly moving towards globally. In 2001, China started to share the
same rules as global market after entering the World Trade Organization (WTO), it
also makes the internal policy more transparent in order to protect the interest of
foreign investors. It also helps in reducing government intervention in privately
owned business and attracting more foreign investment to the country. All these
development supplied great opportunities for foreign investors.

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Industry Analysis
Economic view
Tea, consist more than 40 percent of total market value, leading the China beverage market.
The competition of both tea and coffee is fierce as both can be substitute to each other. It
faces competition from mainland and also foreign investor, many direct foreign competitors
looking the opportunity and penetrates into China market, such as Seattle Coffee Chain, Ding
Haom and even McDonalds is entering coffee business, the amount is increasing from year
to year. Compare to year 1999, there is a increased of 73 percent in China Food and Beverage
industry in 2002, estimated 20 percent growth average from year 1999 to 2002.

Social view
Tea is a tradition beverage in China. Some conservative groups in China
believe that it will be difficult to develop Coffee market and replace Tea. But, the
change of culture have made the difference, an expanding group of wealthy and
young people who an enthusiastic about chasing taste and fashion. This Petty
Bourgeoisie group not only drink coffee but require highquality coffee. They
are the typical consumers of foreign brands and it is also the target customer of
Starbucks. To them, coffee means only Starbucks and equal quality assurance.

Political view
Although government function strained by law frame of the WTO, foreign
investors is still facing the unexpected difficulties to apply special government
investment license, in some small cities, bribery is necessary to get the license. The
Sixteenth Communist Conference further ensured that the opening policy will
continue to protect the interest of foreign investor. In terms of leadership changes and
province leaders, who normally held their position until age seventy, were replaced
earlier than usual to maintain the competitiveness and make sure the decision made is
matched with the global requirements.

Market Analysis

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After reviewed the findings above, potential customers were classified into two
groups, which were wealthy and young people group and bourgeois group. Wealthy and
young people group Age (18~28), who are enthusiastic about chasing taste and fashion,
and with high purchasing power.
Bourgeois group Age (25~40), whom required a comfortable space with relaxed
atmosphere beyond home and office, for business discussion or chitchat. With such
requirement, high quality products and store environment is the keys to remain customers
loyalty.
China market covers a wide geographical area, the unbalanced distribution of income
define the potential market, as the sixty percent civilian wealth in the cities is owned by nine
percent of the population, the social unbalance issue become a criteria when select the store
location. In choosing locations, Starbucks chose the most expensive locations to maximize
brand share, one of the promotion strategies to attract the bourgeois group customers. To
make Starbucks coffee convenience goods in China, Starbucks applied the same strategy as in
US, the coexistence of several Starbucks branches in the same area, which stimulates
consumption.

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SWOT Analysis
Strengths
The main strengths of Starbucks come from the companys brand image as well as
the high visibility that the company has in various markets. Additionally, Starbucks also has
experienced and competent workforce that ensures that quality services are offered to the
customers. The existing relationship with supplies of coffee beans also means that
Starbucks is able to get quality coffee all year round.
Weakness
Even though there are a few weaknesses, the main weakness can be argued to come
from the companys overreliance on its CEO since its inception implying that the company
might struggle if the CEO was to leave Starbucks.
Opportunities
One of the major opportunities for the company is that there exist various high
potential markets that the company can expand its operations into.
Threats
The ever increasing number of the competitors in what can be described as an
already overcrowded market can be argued to be one of the major threats to Starbucks.

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Marketing Assessment Plan
From the PESTLE as well as Porters five forces analysis, it is evident that Starbucks
has to develop effective marketing strategies in order for the company to be successful in the
various markets that it operates in. The following are the proposed marketing strategies that
should be adopted by the Starbucks during the next three years;

Segmenting the market

Starbucks needs to segment the market into various markets in order to ensure that

the needs of each segment are met. It is only after the company has segmented the market
that it can be able to developed different products that can appeal to different segments.

Product Differentiation
The production differentiation strategy that has been adopted by Starbucks as

discussed by Thompson, Shah and Tomas (2006) should be further developed in order for
the company to ensure that different products are available fro different types of customers.
In addition, may be Starbucks could consider developing new products that could be
retailed by major retailers. For example, Starbucks could enter into agreements with major
retailers like Wal-Mart to retail Starbucks sandwiches.

Customer Service
In order for Starbucks to be successful, the company has ensure that the customer

service is friendly at all times in order to ensure that the customers are always satisfied
which will in the long run result to repeat purchase as well as loyal customers. In order to
ensure that that the customers are satisfied, Starbucks should establish feedback collection
mechanism that would
Three Year Strategic Proposal
Provide customers with the chance to explain their views about the companys offering as
well as what could be done in order to ensure that what the company offers appeals to the
customers.

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Promotion Strategy
Promotion can be defined as an activity that is aimed at raising the awareness of a

particular product or brand. As discussed by Thompson, Shah and Tomas (2006), Starbucks
has adopted various promotion strategies throughout the years in order to ensure that
potential customers are aware of the companys service offering. From that perspective,
Starbucks has to keep on implementing various promotion strategies in order to ensure that
the companys brand image is enhanced. In addition, the various promotion strategies
adapted by Starbucks ensures that the company manages to position its coffee as the
ultimate coffee in the market.
In conclusion, during the next three years, Starbucks should implement marketing
strategies that would help enhance the Starbucks brand in markets where the company has
already established presence while in new the new markets, the marketing strategies should
aim at positioning Starbucks as the ultimate place where one can enjoy a cup of coffee.

Financial Plan
From the figures given by Thompson & Shah (unknown), with the exception of year
2009, the net revenue of Starbucks has been consistently on the increase since year 2005.
Furthermore, financial figures posted by Starbucks (2012) indicated that the companys net
revenues increased in the fiscal year 2010 with an 8.4% increase. Moreover, the income from
the various international markets has also been on the increase over the years with the
exception of year 2009 implying that the company is on the right path. On a wider
perspective, the increased revenues means that the company has also been increasing its
market share something that will help the company retain its market leadership position in
the sector.
Three Year Strategic Proposal
From that perspective, Starbucks financial objectives for the next three financial years should
aim at continuing the trend of increasing sales revenues with a target of 20% increase per
year while at the same time; the company should also aim at increasing gross profit with 15%
increase every year for the next three years
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CAF COFFEE DAY

Origin
A traditional family owned a few acres of coffee estates, which yielded the rich coffee beans
in the soil of Chikmagalur, However they soon amalgamated with Bean Coffee Trading
Company Limited, now popularly known as Coffee Day. The coffee growing tradition was
since 1875, but the opportunity after the deregulation of the coffee board in the early nineties.
Coffee Day began exporting coffee to the connoisseurs across USA, Europe & Japan. In the
calendar year 2000, Coffee Day exported more than 27000 tonnes of coffee valued at US$ 60
m to these countries and, for the second time in its short career of 7 years retained the
position as the largest coffee exporter of India.

About Coffee Day

Coffee Day has a wide and professional network in the major coffee growing areas of the
country comprising over 50 agents and 50 collecting depots. Coffee Day's two curing works
at Chikmagalur and Hassan cure over 70,000 tonnes of coffee per annum, the largest in the
country. 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.
Key Features:

125 years of coffee growing history

A fully equipped ISO certified roasting plant with a 70000 tonnes per annum capacity at
Hassan

5000 acres of self owned Coffee Plantations

A ready and enviable base of more than 10000 suppliers

Among the top exporters of coffee in India (Coffee Day Exports)

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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

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Caf Coffee Day currently owns and operates 169 cafes in all major cities in
India. It is a part of India's largest coffee company named Coffee Day, ISO 9002
certified company. Coffee Day's most unique aspect is that it grows the coffee it
serves in its cafes. Cafe Coffee Day's vending machines have a special niche in
the market compared to competitors because Cafe Coffee Day machines offer
filter coffee unlike the instant coffee offered by competitors' brands. Growing
from a coffee exporter to a coffee parlour, caf coffee day has certainly come a
long way in this segment.

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Marketing Mix
Every company goes through different phases in the business. The phase is very similar to
that of the product lifecycle. In order to sustain in the market and to maintain its market share
it is essential for the company to have a right marketing mix. The company has to have a mix
of proper product that is relevant to the target audience, proper price, proper reach i.e. the
place and relevant promotion that keeps the target audience interested in the company.
Product
Caf Coffee Days menu ranges from hot and cold coffees to several other items. However,
the core product is the coffee. The management believes that trend is changing towards
coffee. So taking this opportunity, the company also sells coffee powder. Caf Coffee Day
also believes in selling other merchandised products.
Core Product:

Exotic international coffees e.g. Capachinos

Food items e.g. Sandwich, Samosas

Desserts and pastries

Supportive Products:

Funky Caps @ Rs 60 onwards

Cool T-Shirts @ Rs 175 onwards

Bags @ Rs 160 onwards

Mugs @ Rs 60 onwards

Coffee Filters @ Rs 95
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Coffee Powders:

Arabica @ Rs 43

Perfect @ Rs 35

Charge @ Rs 28

Dark Forest 200gm @ Rs 80

Product Mix

Coffees & Teas

Refreshing

Eatables

Alternatives

Coffee with Milk

Cappuccino

Smoothies
Guava

Sandwiches
Paneer Tikka

Caffe Mocha

Mango

Cheese & Tomato

Caffe Latte

Grape

Chicken Tikka
Smoked Chicken

Black Coffee

Granitas

Rolls

Espresso Italiano

Blue Curacao

Kadhai Paneer Roll

EsperanoTM

Lime Ice

Chicken Masala Roll

Americano

Mixed Fruit Tango

Guava Crush

Dessert Coffees

Milk Based

Pastas

Latte Bianco

Strawberry Freeze

Tangy Tomato Pasta

Caffe Borgia

Mocha Freeze

Creamy Chicken Pastas

Icepresso

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Cold Coffees

Iced Tea

HOT TEA

Brrrista

Lemon

Assam

Brrrista Frappe

Peach

English Breakfast

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Brrrista Blast

Darjeeling

Iced Caffe Mocha

Earl Grey

Coffee Add-ons

Other Drinks

Desserts

Various Flavours

Ginger Fizz

Walnut Brownie

Chocolate Fudge

Kinley Water

Mocha Excess

Whipped Cream

Chocolate Excess

Espresso Shot

Dark Temptation

Ice Cream Scoop

Chocolate Mousse
Chocolate Chip Muffin
Almond Raisin Muffin
Apple Cake

People Mix

The people at Barista are characteristically trained to be Pleasant, Polite and Positive. They
ensure you have a quiet, uninterrupted visit and provide an escape from the daily pressures of
life. Their uniforms are in sober shades of brown and orange, and contribute to the overall
laid-back feeling of the caf.
Promotion Mix

According to research, over 65% of Baristas customers are in the 15- 30 age- group. The
majority of these are students and young urban professionals. Barista positions itself as a
brand for anyone who loves coffee. Their products, services
and outlets are more like the traditional European cafs, where people would meet for the
love of coffee, and for an intellectual appealing time. They position their outlets as a place
where the world meets, and they look to appeal to anyone in the 14- 60 age group that
loves good coffee and looks for a nice quiet time.
a
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Logo, Colors, Images:

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Barista, since the beginning has looked to use colors in its caf interiors, logos and images; to
project a warm, earth glow, synonymous with coffee. Barista uses shades of Orange &
Brown to good effect to promote its laid- back atmosphere. The logo is a combination of
Brown, Orange and Light Yellow; with the word Barista written in an upward curve, and
the word Coffee underneath. A simple logo that perfectly expresses Baristas brand image:
A traditional caf for coffee lovers.
b Dcor and Architecture:
Baristas internal dcor and architecture expresses the simplicity you would normally
associate with traditional cafs. The furniture is made of light shades of wood, and there are
comfortable sofas in bigger cafs. The walls are shades of orange, with various photographs
of the love for coffee spread around each outlet.
c

Literature:

The literature provided by Barista is indicative of its brand image. The menus, posters,
pamphlets are all traditionally designed, with a classic and simple look. One aspect of
particular note is their magazine, which is privately circulated in the cafs. The magazine
encourages customers write, draw, make etc anything creative; and this is then published in
the magazine. The magazine not only provides an avenue for advertising, but also an
opportunity for Barista to express its brand image Barista currently carries out mass
promotion campaigns. This is mainly in the form of promotions in the Press, TV and Radio
Medias. At present, they do not rely heavily on advertising, but rely more on sponsorships
and strategic alliances with other corporations. Barista also takes part in various sales
promotion activities to help increase sales at their outlets.
d Sponsorships:

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Barista sponsors various events and festivals, which provides them valuable promotion
directed at strategic markets. The sponsorships are mainly in kind, although major events are
sponsored in cash also.
e

Sales Promotion:

Barista uses a special Barista Coffee Card for its sales promotion activities. The Barista
Coffee Card entitles you to one complimentary hot beverage when you are done sipping
seven. It is available to all Barista coffee
regulars. No membership fees, no references
required. Fill out the card and you are a
member. As a Coffee Card holder, you earn
one stamp on the card every time you
purchase a beverage. Simply present the card
to the cashier when you place your order at
any of their outlets. Once you have collected
seven stamps, you can hand over the card to
receive your complimentary hot beverage. Barista hopes this card can help drive sales
growth, and increase customer retention
f) Collaborations:
Barista has entered into special collaborations and alliances with various partners for co marketing brands. For example, Barista entered into a deal with Leo Mattel toys to provide
the popular board game Scrabble at every Barista outlet across the country .This is an ideal
alliance for both the organizations, because it provides Leo Mattel with an important avenue
for promoting their product, and it provides Baristas customers an added attraction for spend
more time at Barista outlets .Barista has also entered into partnerships with various movies,
for promotions through Barista, and recently, they tied up with Star World for its Absolutely
Everybody campaign.
Place

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This is a prime factor in determining the success of a retail chain. However, Barista Coffee
has adopted a top down approach, wherein they first identify the cities and then decide on
precise locations within its limits .While selecting a city Barista has devoted substantial
management time and effort in zeroing in on the cities where they are now situated. The
selection of the cities was based on the following criteria.

Sizeable population of executives, students and families in SEC A & Barista category.

High disposable income with people looking for new vistas in leisure and lifestyle
oriented concepts.

High level or organized retail activity.

Rapid socio- economic development.

Level of commercial importance (Industrial cities, state capitals etc.)

Number of educational establishments and opportunities available for employment.

On the basis of the above criteria, they had initially targeted cities like Delhi, Mumbai,
Bangalore, Chennai and Hyderabad. Chandigarh and Ludhiana were later added due to tieups with Planet M and Ebony to set up store-in- stores at their outlets. They are also
pursuing an equally aggressive international business expansion strategy. They have over 50
overseas locations presently under their consideration .They have already done their
groundwork in terms of getting brand and name registrations in over 30 of these locations.
To facilitate their global expansion, they plan to work with strategic partners, who share the
same vision of expanding and promoting the brand worldwide. Currently they have opened
new outlets in Sri Lanka and Dubai as a part of their international strategy.

New Introductions:

Reglon Sleeves T-Shirts @ Rs 249

Marquis pens @ Rs 315 Onwards.

Shoulder Bags @ Rs 209

Coffee Mints @ Rs 40
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Price

Caf Coffee Day has positioned as Value for Money. The major target customers are the
youngsters. Pricing is a very sensitive issue for the Indian consumers.
Caf Coffee Day believes in mass marketing.
The average spent by the customer is 100-125. Their coffee starts from as long as 15 Rs.
However there are some outlets where the students are given special discounts. CCD even set
up their outlets in the college campus. For e.g. Caf Coffee Day has opened an outlet at the
NMIMS campus where they are providing additional 10% discount to the students.
CCD is looking for expansion to more interior places. Here prices become more complex as
the consumer are very conservative in spend. A cup of coffee at Rs. 35 is accepted in metro
cities but not in small towns. The decor, ambience and the experience will play a major role
in pulling the crowds in small cities.
The price of the product has to be kept uniform in order to maintain the uniformity in all the
outlets.
CCD target audience is youngsters. Majority of them are dependent on their family for their
expense. This is one of the most important reasons for low pricing compared to other cafes.
They believe it in making their product at an affordable price. Pricing is one of the important
weapons for them to fight against their competitor.

Place

Caf Coffee Day outlets are spread across India. However, there are more number of outlets
in the metros and towns. For e.g. In Mumbai CCD have 37 outlets. In the past 12 months,
Caf Coffee Day has also been on an aggressive drive to expand the number of cafs in the
smaller towns across the country based on research and invitations received from these places
to open more such cafes there. The company expects to cross the figure of 200 cafs in 60
cities by December 2004. There will be an increased focus in cities having populations from
as low as Five Lakh upwards. However, the focus has not been on just opening more cafs
wherever there has been an opportunity. Caf Coffee Day is already the largest and most wide
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spread retail chain of cafes in India with a current count of 169 cafs in 43 cites.
CCD plans to reach cities like Kolhapur and Nagpur in the west, Hubli, Belgaum and Vizag
in the South, Allahabad, Varanasi, Ambala and Patiala, in the North, Jodhpur and Mount Abu
in Rajasthan and Bhubaneswar, Ranchi, Cuttack, Darjeeling, Guwahati and Jamshedpur in the
East.
Promotion
In order to stay with the competition and to keep the audience interested, they undertake lot
of promotion activities. CCD jointly organizes large number of promotions with the other
companies serving the similar target audience. These cafes have emerged as a new media
vehicle for reaching the right type of the customer. CCD gets in physical touch with
audiences, target loyalty club members, or advertises in their newsletters. CCD has also
undertaken a promo jointly with TVS scooty. The promo was done at all the outlets across 43
cities. In this promo a package of 2 ices blended cold coffee and 1 choc fantasy for just
selling for Rs 82.

Lokhandwala CCD:
The Store at Lokhandwala is also a good revenue earner
for the company. The store is located just outside the
Lokhandwala and situated just opposite to Star Bucks. This
store is also an important store due to the location and also
the target customers. Lokhandwala is on of the most
famous place for shopping. This store is not as big as that
of the outlet at Carter Road. It has a sitting capacity of 95
people. This store also has indoor as well as the outdoor
space but has more of the outdoor spacing.
The working hours at Lokhandwala outlet is 9 am to 12 pm.

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The peak timings are

7-9p.m.(Working Crowd)

10:30 p.m.- 11.30 p.m. (Families)

The USP of this store is its large parking space.

Customers come to the outlet after shopping from
Lokhandwala to have a coffee. The music is not
appropriate which makes some of the customers
annoyed. The Machine used in this outlet is Asttoria, which cost around 3.5 lac. The
store sells lot of other products like T-Shirts and cups, which also do good business.
However, the goods are not properly displayed. The staff at the outlet was efficient courteous
and very helpful. There is a good customer service from the staff and helps the customer in
making the decisions. The staff strength is 11 and is divided into 3 shifts that include 1
store manager.
Customer Profile:

Foot fall- around 115 per day

The average spend: Rs.125-150/customer1-3 p.m.

Comprises primarily of youth from the 18-30 yrs age group

Future Strategy
The management at the Star Bucks outlets thinks that their positioning is very different from
that of CCD. They think that the people going to CCD are young college students. The target
audience for the Star Bucks are young managers and middle level mangers and also family.
However there is a treat to them in terms of the share of the young college going crowd,
which forms a main target audience for the CCD and comparatively small part for Star
Bucks. In order to maintain the share the managers of Star Bucks thinks that they would need
to increase their presence and also have to tap the other untapped market. The company is
also planning to tie-up with other companies in order to increase the promotion activities that
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would keep the crowd interesting. They also are planning to organize the festivals of the
college or sponsor prizes in the festival.
Increase in outlet:
As part of its marketing strategy, the company is planning to promote international coffee
blends first through 40 Star Bucks stores in Mumbai, Delhi and Bangalore. With the move,
the company also hopes to expand the number of Star Bucks Espresso Bars on an average
rate of two to three per month as well.
International expansion:
Star Bucks is also looking for the international expansion. They are planning to expand in the
Kuwait market. Star Bucks is also planning to expand its presence in the other Asian
countries like Sri Lanka, Dubai.
Promotional Activity:
As part of its marketing strategy, Star Bucks Coffee Company Ltd is planning to launch a
host of consumer promotions at its outlets in 2004. For the purpose, the company is currently
in talks with many entertainment, consumer goods and music companies, which include the
US-based Bose Corporation, Swatch and International Travel House.

Improvement in the Services:

Initially Star Bucks had a system of self-serving. Indian consumers are not comfortable with
this concept. However in some of the outlets they have started serving the customers.
Informative Staff:
The staff should be qualified as they will be dealing with intelligent people. The staff should
be friendly but should not try to educate the customer who is already aware of the things.

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Its All In The Mind
Star Bucks is a place where the world meets. People come to Star Bucks to
have a meet or to relax. A lot of them actually come alone as well. This is
actually one of those places with people coming in alone because they are
comfortable with themselves. It is a place where people are meeting each other
in an environment, which is fulfilling social and intellectual needs.
The employees at the Star Bucks are also energetic. They help the customer in making
decisions for their purchase. Some of the customers at the Star Bucks think that they should
be personally served rather than self-serving. When the person wants to orders for some
thing customer has to go to the counter order the requirements, pay bill and the employee
takes the name of the customer. When ever the order gets ready the employee shouts on the
top of the voice calling for the customer to take the order. This actually unpleased the
customer as the customer gets disturbed every time the employee calls for some person.
Product:
During the time of discussion I found two types of customers, one who visits regularly and
other who visits rarely. The customers who come rarely are not actually the coffee lovers.
They just come there to do some time pass. They have no complains about the product. But
the customers who are coffee lovers are not satisfied by the product they serve. There are
some customers who actually complain about the quality of the product. Coffees are not
really that good. The bread is dry; the amount of filling has reduced in quantity etc. Their
desserts fortunately have not suffered and are still pretty good. Customers not only come
there to have a coffee or have a sandwich. They actually come there to have an experience.
They find prestigious when they visit to the Star Bucks. As major target audience are youths,
young managers and middle level management people who come to discuss their business.
The young students visit there as they feel the sense of maturity. The people who are status
oriented would prefer visiting Star Bucks rather than CCD. Their targets are youth, young
executives and nucleus families. Star Bucks also claims that intelligent people come here
Someone who is intelligent and appreciates the good things in life. claim by Star Bucks.
There are many customers who come there, as they perceive themselves as intelligent people.
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For business people toting Laptops they can hook up to the net free of cost or catch up on the
news business magazines and newspapers are available at every outlet. They also come to
Star Bucks, as its a good relaxing place where they can discuss about their clients.
There are people who also come alone. They find Star Bucks is the place where they can just
have a coffee and think deep, as there is no one to disturb them.

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INDUSTRY ANALYSIS
In hospitality industry there is much kind of outlets like hotels and resorts, restaurants, bar,
coffee shop these are the place is serving food and beverage here I am going to give my
research about coffee shops which providing like hot and warm coffees and quick bites to the
customers. I did my research work on Indian coffee shop company who having more than
900 caf in 91 major cities in India and outside India.
The world coffee production in the coffee year 2009-10 is estimated to be 123.6 million bags
signifying a decline of over 4.5 million bags in the CY 2008-09 when production totaled at
128.2 million bags. This is revealed in a report of International Coffee Organization market
report for January 2010 excluding additional information that has to come from Colombia
and Vietnam. The ICO report also states of a significant fall in coffee production in Brazil by about 14 percent besides production shortfall apprehended in countries like Cote d'Ivoire;
Tanzania, Uganda, Papua New Guinea, Vietnam, Mexico, El Salvador, Equador and Peru.
The Colombian production is unlikely to register worth mentioning increase. The over all
world supply of coffee is likely to be tight in 2010 due to low level of opening stocks as well.
Total world exports of coffee (2008 & 2009)

Colombian Milds

2008
12219

2009
9278

% Change
-24.07

Other Milds

22524

20861

-7.38

Brazilian Naturals

28724

30033

4.56

Robustas

34199

34518

0.93

Total

97666

94690

-3.05

Source: International Coffee Organization, Coffee Market report, January , 2010

In the export front calendar 2009 closed with a decline of 3 percent at 94.7 million bags from
97.7 million bags in 2008. World consumption however is provisionally estimated at 130

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Project on CCD VS STAR BUCKS

million bags in 2008 from 128 million bags in 2007. Domestic consumption in exporting
countries was up at 36.7 million bags compared with 35.4 million bags in calendar 2007.
The Brazilian Coffee Industry Association expects 4.15 percent increase in world
consumption of coffee.
Indian Coffee Board puts country's coffee production at 2.90 tonne (Post monsoon
estimation) and 3.06 tonne (Post Blossom Estimation) respectively. For the present crop
year beginning October, the board has estimated an output of Arabica at 101,525 tonnes and
Robusta 204,755 tonnes. Karnataka leads the country with 2.05 tonne (Post monsoon
estimation) and 2.21 tonne (Post Blossom Estimation) production followed by Kerala and
Tamil Nadu. According to ICO estimate, India produced over 3.1 million bags of 60 kgs
each in 2009 compared with 3.3 million bags in 2007.Country's coffee exports during fiscal
2008-09 stood at 1.96 lakh tonne signifying marked decline from 2.18 lakh tonne in 200708.
India's Coffee Production (In tonne)
State
Karnataka
Kerala
Tamilnadu
Non-traditional

2006-07

2007-08

2008-09

2009-10

206025

191575

183860

205700

59475

49000

57200

59250

18225

18100

16255

19350

3175

4870

5185

190

150

115

115

288000

262000

262300

289600*

areas

(Andhra Pradesh & Orissa) 4085

North Eastern region
Total

Post

Monsoon

Source: Federal Ministry of Commerce, Government of India

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estimates *

Project on CCD VS STAR BUCKS

India accounts for about 4.5 percent of world coffee production and the industry provides
employment to 6 lakh people. Among the coffee growing states, Karnataka accounts for 70
percent of country's total coffee production followed by Kerala (22 percent) and Tamil
Nadu (7 percent). Europe accounts for about 70 percent of India's total coffee exports. Of
this again, 70 percent is shipped via Suez Canal. Major Indian coffee importing countries
include Italy, Germany, Russian federation, Spain, Belgium, Slovenia, US, Japan, Greece,
Netherlands and France.
India's Exports of Coffee
Year

Quantity (In tonne)

Value ( In Rs crore)

2006-07

249029

2007.90

2007-08

218998

2046.29

2008-09

197171

2242.64

2009-10 (Upto March 8, 2010

181225

1944.98

Source: Federal Ministry of Commerce, Government of India

With a view to expand coffee cultivation, Coffee Board has been implementing
developmental programmes for coffee development in North Eastern Region and Non
Traditional areas. During 11th Five Year Plan, Coffee Board has proposed to support coffee
expansion programme taken up by the Integrated Tribal Development Agency on 24000 ha.
area in Andhra Pradesh and on 850 ha. area in North Eastern Region, which will facilitate
export of coffee. As a part of export promotion, the Coffees from different regions with their
logos are promoted including the coffee from the areas under Integrated Tribal Development
Agency, as Araku Coffee. Constant endeavour is being made by the Government to help the
coffee growers to ease their bank debts
TYPICAL SERVICE OFFERING
CUSTOMERS EXPECTATIONS
When a customer visits a coffee shop they expect a good experience. They want the service
provider to provide them with the best services they have. From the chart given below we can
easily make out that the customers gives high preference to the quality of services and they
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Project on CCD VS STAR BUCKS

give least preference to the pricing. The major reason behind customer giving least preference
to the price is because they want a good experience which is beyond price.
From the above chart one can easily make out that 42% people consider the quality of
services offered by the coffe shop before going to it.
The next important factor considered by customer before choosing a coffee shop is the
ambience. They want the coffee shop to be a cool hangout place where they can
hangout with friends and do some combined studies
BUNDLE OF BENEFITS
Following are the benefits that a customer can get from Caf Coffee Day:
1. Benefits through pricing of products
Considering that Cafe Coffee Day is trying to target a market whose age range is
between 15 and 60 years, a pricing policy appealing to this segment is difficult. The
pricing is extremely low and act as a deterrent to some customers who might regard it
as an indicator or quality, while very high prices cannot be afforded by most of the
youth. But since Cafe Coffee Days current consumer profile is quite young, their
prices are mostly inexpensive, and at par with their competitors.

2. Benefits through different product line

They are Coffee Day's most unique aspect is that it grows the coffee it serves in its
cafes. 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. The coffee beans are supplied to all
the cafs from Chikmagalur. The eatables at Caf Coffee Day are catered by different
vendors: example: ice creams are catered by Cream Bell, Milk by Amul and samosas
by Patsiers Gallery. Caf Coffee Day also sells merchandise through its stores. 5 per
cent of the revenue comes from sale of merchandise. Caf Coffee Day product Mix
constitutes a wide range of products that appeal primarily to Indian coffee and snack
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Project on CCD VS STAR BUCKS

lovers. Products have a decided Indian taste to it - be it food or coffee. Most of the
eatables have been adopted to meet the Indian taste buds like samosa, biryani, masala
sandwich, tikka sandwich etc. Thus they have been trying to capture the Indian taste
along with classic coffee. 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.
3. Benefits through Location
Cafe Coffee Day looks to cater to their target market with strategically located outlets.
Their outlets are generally located at High Street/ Family Entertainment Centers.
Considering their generic appeal, there are Cafe Coffee Day outlets in and around
Malls, Cinemas, Colleges, and Offices etc. This endorses their brand image of a caf
that appeals to coffee lovers of all ages.
4. Benefits through People
The people at Cafe Coffee Day are characteristically trained to be Pleasant, Polite and
Positive.

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