Barista Coffee Company Ltd.
1) Positioning of Barista
Target segment: * Customers from section A and section B who generally have aversion towards the loud atmosphere of coffee hubs * Students community formed the majority of customers during the first half of the day * Professionals were expected to visit in the afternoon or the early evening * Family and friends came in the night * 23 % of the surveyed customer were less than age of 20 * 46 % of them were in the age group between 20 to 35 yrs
Benefits/Points of difference: * Places where young crowd can hang around comfortably * Filled the gap between five star coffee shop and corner coffee stars * Café ambience is used as a differentiator. Muted music and décor projects itself as a place of coffee lovers * Scrabble board, Books, music to engage customers. Thus offering experiential coffee * Maintaining baristas and customers relationship on an equal level * Letting the customer hang around for a long time
2) Reasons for adopting franchising strategy * Can open new outlets with no investments * In 2003, suffered losses of 21.4 crore. Therefore, needs to reduce the expenses * In franchising , cost of operating will be substantially lower * Currently, its real estate cost from 20 % of the total sales. This can be reduced through franchising * New stores can be opened in tier 2 at lower costs
3. Should Barista go for price reduction of its product line or should it continue with its premium pricing strategy?
Ans: Going by the facts mentioned in the case, Café Coffee day had a clear advantage in terms of affordable prices and was able to reach out to more number of the customers because of that. But the target audience for CCD is primarily youth while for Barista, it was young couples, professionals and families. Thus going by the difference in customers of the two, price of Barista should not be changed from the current prices. Also since it had established
Target segment: * Customers from section A and section B who generally have aversion towards the loud atmosphere of coffee hubs * Students community formed the majority of customers during the first half of the day * Professionals were expected to visit in the afternoon or the early evening * Family and friends came in the night * 23 % of the surveyed customer were less than age of 20 * 46 % of them were in the age group between 20 to 35 yrs
Benefits/Points of difference: * Places where young crowd can hang around comfortably * Filled the gap between five star coffee shop and corner coffee stars * Café ambience is used as a differentiator. Muted music and décor projects itself as a place of coffee lovers * Scrabble board, Books, music to engage customers. Thus offering experiential coffee * Maintaining baristas and customers relationship on an equal level * Letting the customer hang around for a long time
2) Reasons for adopting franchising strategy * Can open new outlets with no investments * In 2003, suffered losses of 21.4 crore. Therefore, needs to reduce the expenses * In franchising , cost of operating will be substantially lower * Currently, its real estate cost from 20 % of the total sales. This can be reduced through franchising * New stores can be opened in tier 2 at lower costs
3. Should Barista go for price reduction of its product line or should it continue with its premium pricing strategy?
Ans: Going by the facts mentioned in the case, Café Coffee day had a clear advantage in terms of affordable prices and was able to reach out to more number of the customers because of that. But the target audience for CCD is primarily youth while for Barista, it was young couples, professionals and families. Thus going by the difference in customers of the two, price of Barista should not be changed from the current prices. Also since it had established