Beyond Just Coffee and hangouts!

IIPM conceptualized the grand final of Dare ‘10 — the most prestigious of international B-school student quizzes

Analysts believe that the bid to make CCD a complete food and beverage player in the Indian market smells suspiciously of an effort to become a me-too McDonald’s. And though these are early days yet, if the plan works, CCD’s potential may well expand much beyond the Rs.450 crore domestic coffee market to encompass the limitless potential of India’s food market. However, brand watchers say that in the process CCD may well make some unpromising compromises with its ‘coffee hangout’ brand identity. “Not at all,” disagrees Alok, reasoning that whatever the changes in product portfolio, CCD will always have a coffee focus. “There will always be formats within our brand that will allow consumers to continue flirting with coffee viz. Coffee Day Square.”

This detailed segmentation of the market is where CCD really scores over competition. While the augmented food menu would be available at mostly the flagship CCD stores; other formats like Coffee Day Express, Coffee Day Square and the soon-to-be-launched Coffee Day Lounge will largely retain their coffee focus, where 80% of the portfolio will revolve around coffee. This, believes Alok, will allow the brand to keep their coffee positioning alive even as they offer Rajma Chawal to hungry consumers. “Coffee Day Square is for the premium single-origin coffee and Coffee Lounge would be for corporate guys who want privacy in official meetings,” explains Alok.

With over 10,000 acres of coffee estate spread in key coffee producing zones like Chikmagalur (Karnataka) and Araku Valley (A.P.); and 805 stores spread across India, CCD is already the market leader in the coffee chain segment and growing fastest at 30% per annum. In contrast, Barista has only 400 stores and neo-entrant Costa Coffee has 200 stores. To sharpen its edge, CCD is now sharpening its flank by planning to take its store-tally up to 1,000 stores by end-2009, including 15 Coffee Day Squares and 10 Coffee Express stores. At a time when other players are finding it difficult to cope up with the expensive real estate market, Coffee Express (with its small drive-in format) is growing at almost 25% per annum. Small surprise that CCD is proving to be a cash cow, contributing almost half of ABC’s total turnover as of today. Add to that Alok Gupta’s latest ambition to do a McDonald’s within CCD (with a carefully crafted positioning strategy to boot) and one can almost taste (pun intended!) the nature of success to come...

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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“Competition is not restricted to urban markets alone...”

4Ps B&M: Which is CK’s strongest product category?
RV: Hair wash is our strongest business in terms of current size. We’ve four brands – Chik, Nyle, Meera and Karthika and together they constitute 25% (in volume) of the Indian shampoo market.

4Ps B&M: What about distribution strength?
RV: CK has a direct coverage of around 5,50,000 outlets and our brands have a presence in about three million outlets. Our focus on distribution at present is to beef up our presence in markets with population in excess of 5,00,000. Here, we’re intensifying the distribution by as much as 50% to cover more outlets to make our brands available to larger number of people to get maximum mileage for our marketing investments.

4Ps B&M: How do you tackle competition against cash-rich FMCG players in the urban market?
RV: Competition from other FMCG players is not restricted to urban markets alone but exists in rural markets as well and strategies to take on competition are not sensitive to urban versus rural. The essentials of the strategy to take on any competition are understanding the needs of consumers in terms of product propositions, developing products which perform better than your competitors and communicate these effectively and above all building relationships with consumers over time so that they remain excited.

4Ps B&M: Can you describe the clear positioning of ChiK Satin Shampoo?
RV: The objective of Chik Satin brand is to focus on the bottle consumer whose shampoo needs are very different from that of existing Chik consumers. To this end, the launch of Chik Satin came with a completely new marketing mix – new formulation with higher conditioning levels, new packaging looking premium to the existing portfolio, advertising focussing on the new Indian women looking for confidence to take on the world (with a brand line of Khule Baal, Khuli Duniya) and focus on the metro and urban markets in terms of distribution. We are aiming to develop newer consumer segments and improve brand imagery for reassuring existing users.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
Management guru Arindam Chaudhuri’s latest blockbuster book, Discover The Diamond In You
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“Our focus is to grow in India”

Ramesh Ramanathan,

MD, MHRIL

4Ps B&M: How has your company fared in the last year?
RR: We were able to turnaround quickly despite the recession. As a company we focus on domestic tourism where by and large the lifestyles of people have changed. We did cut on our costs last year, but at the same time built our infrastructure in terms of sales and went for a lot of Below the line (BTL)activities. Our income grew at a CAGR of 43%.

4Ps B&M: Did you alter your strategy to counter slowdown?
RR: Our strategy to go forward has been three fold. The first being to roll out our services in tier II and Tier III cities to record a pan India presence. Secondly we attempted to be present across age and income groups and thirdly we have set up our own hospitality school so that we have our own trained manpower.

4Ps B&M: What are your future plans?
RR: We want people to relate holidays with Club Mahindra and thus our focus is to grow in India. Currently we are in the process of buying lands and building resorts. We are also looking into related services like a web based travel agency. We have also introduced the concept of Home stays, which gives foreign tourists a feel of true India.

Neha Saraiya.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
Management guru Arindam Chaudhuri’s latest blockbuster book, Discover The Diamond In You
IIPM fights meltdown, places 2300 students By Education Mail Bureau
Delhi/ NCR B- Schools get better By Swati Sharma
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IIPM - Admission Procedure
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