Battle Field Smelling The Coffee

Posted: December 22, 2010 in Brand management

Cafe Coffee Day is ramping up fast to meet its biggest challenge: the entry of Starbucks

Instead of giving interviews, The Coffee Day Chairman; namely V G Siddhartha wants his brand to do the talking. Approach him for a meeting and the standard response is: he is more focused on building his business. The secret recipe for his success is its strategy which is all about a keen focus on the consumer and his wants, needs, desires and aspirations at the front-end, and a matching delivery in terms of quality and brand experience at the back end.

Last month, Café Coffee day opened its 1000th café. It has also been able to outsmart Indian peers such as Barista, which has gone through multiple ownership changes since its launch in 2000, and global players such as Costa Coffee and Gloria Jeans.

However, Siddhartha may be facing the biggest challenge of his career in its 14th year of operation, as Starbucks is planning to enter India next year. The global retailer is in the final stages of discussions to select an Indian partner to roll out cafes in India. That would create a new battle field smelling the coffee. As a result of this, the Coffee Day Group is feverishly putting together a global plan for marketing and communications. It has also been building its network at a steady pace and has now reached an average of opening a café once every three days. And it is likely that the average will be once a day, pretty soon. And not a single of its 1020 cafes is franchised out.

After establishing its growing network in India, Café Coffee Days is brewing an active overseas expansion plan. It has set up cafes in Vienna, Austria, Karachi and has plans to spread its presence across West Asia, Eastern Europe, Eurasia, Egypt and South East Asia in the near future. In fact, Café Coffee Day recently acquired a chain of cafes in Czech Republic as part of this global expansion.

Competition will come and competition will go, but the brand stays forever…”

Harish Bijoor, a noted brand consultant and who has had a long stint in the coffee industry believes that companies must not be obsessed with competition from outside. “Competition will come and competition will go, but the brand stays forever. I do believe the company needs to set for itself very high standards. Standards those are higher than what one witnesses today. This will insulate it from every type of competition,” he says.

According to him, Café Coffee Day has the ability to put Starbucks into a corner of a niche. “It has the ability of emerging the mass cafe brand, pushing Starbucks into a niche in a country where true-blue brand success is measured in mass,” he says.

When a brand is able to connect with its target group, it builds an umbilical brand connect. According to brand experts, Café Coffee Day has been able to build such an umbilical brand connect in a relatively short period of time. When such a connect exists, brands can milk margins and more. The coffee chain’s strength is its ability to manage prices even when the going is tough.

The brand positioning of Café Coffee Day is all about being a common man’s not-so- common coffee, industry analysts say. “The brand is in the street, and not on the high street alone. It is accessible by all,” Bijoor says.

“I do believe India is a crucible market for the best of innovation and the best of service delivery. What works here, will work everywhere else,” notes Bijoor.

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