Cafe Coffee Day

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1) Executive Summary

Indian consumer is a very interesting entity. The consumer in India is as heterogeneous as the country itself is. The urban consumer contrasts with the rural and the South Indian consumer with the North Indian. Further still, the consumer in the metros militates with his usage and habit patterns. The Indian consumer, is therefore very difficult to understand and very difficult to predict. Tea and Coffee are the favourite drink in India especially tea. A quiet cafe revolution is sweeping urban India with the explosion of coffee bars. That is bad news for tea - still the favourite brew for a majority of Indians -, which has been losing out to coffee in recent years. India is one of the world's largest exporters of tea and one of its biggest consumers. However, it is coffee drinking which is increasingly becoming a statement of young and upwardly mobile Indians. Moreover, coffee bars, an unheard of concept until a couple of years ago, are suddenly big business. Coffee is slowly but surely substituting tea. There is also rise in the consumption of coffee. The specialty coffee movement has gained much of its momentum through the efforts of companies like Barista, Café Coffee Day and Starbucks. In India CAFÉ COFFEE DAY and BARISTA are the most popular and well-known cafés. The college crowd rates them as one of the coolest hangouts. These companies sell similar product but their positioning and target audience are very different from each other. These players not only sell coffee and tea but also food and other merchandise items. Despite of serving to different audience, these players compete with themselves. Each player fights for its own share of market. They try to differentiate themselves by the way of product or price or promotion. However, they are also facing the competition from the foreign players like Georgia, Starbucks etc. It would be interesting to see how the companies differentiate and maintain their share in the market. 2) Retail Industry In India

Accounting for over 8 per cent of the GDP in the West, retail business is the largest private industry, ahead even of finance and engineering. Over 50 of the Fortune 500 and about 25 of the Asian Top 200 companies are retailers. Today, in some developed countries, retail businesses have shares as large as 40 per cent of the market. For instance, in Thailand and Brazil the organized retail business has grown at tremendous pace. In contrast, the organized retail business in India is very small. This is despite the fact that India is one of the biggest markets. Retail business contributes around 10-11 per cent of GDP. It amounts to about $180 billion market and is six times bigger than Thailand and four-five times bigger than that in South Korea and Taiwan. India also has the largest number of retailers, about 12 million, though they are mostly small. The challenges facing the organized retail industry in India: • Competition from the unorganized sector. Traditional retailing has established in India for some centuries. Most retail outlets are family-owned and offering limited products and finance facilities. • In contrast, players in the organized sector have big expenses to meet. Organized retailing also has to cope with the middle class psychology that the bigger and brighter sales outlet is, the more expensive it will be. Competition is growing in the retail business and super stores are being set up, in the rural areas, customers are entirely at the mercy of retailers. With rising income and changes in life style, demand for better products became insistent. From a size of only Rs.20,000 crore, the organized retail industry will grow to Rs 160,000 crore by 2005. The total retail market, however, as indicated above will grow 20 per cent annually from Rs 400,000 crore in 2000 to Rs 800,000 crore by 2005. Big industrial houses, such as the TATAs, the RPG group, ITC, HLL, realizing the potential of the retail business, are now scrambling...
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