PRODUCT AND BRAND MANAGEMENT

FINAL PROJECT REPORT

(Submitted To- Prof. Jishnu Changkakoti)

Submitted By – Group 6
Kritika Kohli (230101310)
Divyansh Rawat (230103074)
Aman Kumar (230101017)
Ananya Sengar (230103023)
Dev Sagar (230101297)
Utkarsh Tiwari (230103248)
 CAFÉ COFFEE DAY

When it was first founded in 1996, CCD was the largest coffee chain in India. It was well-
known for its vast network, reasonable prices, and "third space" environment for socializing.

Present circumstances:
 The market faces issues such as heightened competition from global chains that
provide high-end experiences and changing consumer expectations that call for
speciality coffee and a health-conscious approach.
 Potential discrepancies in quality: preserving the same level of coffee quality in every
location.
 Crisis of 2019: The founder's suicide in 2019 brought to light substantial debt and
possible financial mismanagement, which affected the brand perception and made it
more challenging to make the required investments.

Even if the business is trying to recover, the 2019 crisis and its fallout still have an impact.

CATEGORY ANALYSIS:

The crisis happened in 2019, so we have done the analysis before and after 2019. In the table
below, we have shown how CCD was before and after 2019.

Aspect Before 2019 (Strong Brand) After 2019

Market share is likely impacted by
The dominant player with the competition and changing consumer
Market most significant number of behaviour because of the crisis.
Position outlets.
"A lot can happen over coffee" - The image was tarnished due to the demise
Brand Social hangout spot, trendy, of the chairman and financial struggles.
Image affordable.
 Expansion slowed, and many
Expansion Aggressive expansion with new underperforming stores were shut down
Strategy outlets opening frequently. due to debt.
Increased competition, changing consumer
Competition from international preferences (delivery culture), economic
chains like Starbucks. slowdown post-Covid.
Challenges

Here are some other data points that show the decline of CCD.

 The net operational revenue in FY20 was 2522 crores; in FY21, it was 853 crores; and
in FY22, it was 582 Crores. Consolidated gross revenue declined by 66.16%, driven by
impetus from Coffee & Multimodal Logistics, mainly due to Covid and liquidity issues
after the demise of our chairman. Net revenues decreased by 32% to Rs.582 Crores in
FY 2021-22, compared with Rs.853 Crores reported in FY 2020-21. (Source – Annual
Report)
 Number of stores went down to 572 in FY2022 from 1752 in FY2019.

COMPETITION ANALYSIS:

For the competition analysis, we have compared CCD with Starbucks and Costa Coffee before
and after 2019. We have seen the current scenario and what it was when CCD was a strong
brand.

CCD

Before 2019 After 2019

CCD needs to develop a new
pricing strategy to beat the
More budget-friendly, value increasing competition.
Price combos.
Possible menu diversification can
Focus on coffee beverages, light be done to have a competitive
Menu snacks, and quick bites. advantage.
CCD needs to broaden its target
Young professionals, students, audience to include families and
Target Audience and social gatherings. delivery customers.
Ambience Casual, comfortable atmosphere CCD should work on the ambience
for socializing. to rejuvenate and position the
brand in a new sense.
 Marketing efforts should change
Marketing Focused on the brand image as a according to the post-Covid
Strategy social hangout spot. landscape.

Starbucks

Before 2019 After 2019

Premium priced, known for high- Starbucks continues to focus on

Price
quality coffee. premium positioning.
Extensive menu with food and
Continued focus on premium
Menu beverage options, seasonal
food and beverage options.
offerings.
Continued focus on upscale
Upscale clientele seeking a
Target Audience clientele, with possible delivery
premium coffee experience.
options.

Modern, trendy ambience with a Continued focus on providing a

Ambience
focus on customer experience. premium in-store experience.

Strong brand image built around Continued focus on brand image

Marketing Strategy premium coffee and a unique and customer experience,
customer experience. possibly with a digital focus.

Costa Coffee

Before 2019 After 2019

Slightly premium compared to need to adapt pricing strategies

Price
CCD. to stay competitive.
Broader menu with sandwiches, Menu adaptations possible,
Menu
salads, pastries. focusing on grab-and-go options.
Professionals seeking a relaxed It might target a wider audience
Target Audience
work environment. for increased footfall.

Upscale, sophisticated Ambience might be adapted for

Ambience
ambience. a more grab-and-go experience.
Marketing strategies might shift
Emphasis on high-quality coffee
Marketing Strategy towards delivery and online
and a relaxed atmosphere.
ordering.
Social Media followers for Cafe Coffee Day, Starbucks, and Costa Coffee.
CONSUMER ANALYSIS:

Factors that made the brand successful before the crisis:

Consumer's perspective:
 First mover advantage: With few options for high-quality coffee, CCD entered the
market early (in 1996).
 Emphasis on affordability: Compared to traditional cafés, it provides a more excellent
selection of coffee at reasonable costs.
 Vast network: Easily accessible for customers, a vast network of cafés has been
established throughout India.
 Experience with the "third space": Offered a cosy and welcoming setting for relaxing,
working, or mingling.
 Brand recognition: Due to intensive marketing and broad distribution, the term
"coffee shop" became synonymous in India.

Brand Positioning:

 "A lot can happen over coffee": This statement successfully positioned the
establishment as a place for social contact and connection.
 "India's favourite hangout": cultivated an approachable and relaxed image that
appealed to younger generations.
 Please pay attention to Indian palates: They provide localized coffee selections,
differentiating themselves from global chains.
The state of competition (before versus now):

 Little rivalry: When CCD first started, there were fewer well-known coffee chains than
possible to compete with, which made their offer stand out.
 Weaker competitors: The current rivals didn't have the same degree of marketing
reach, cafe network, or brand awareness during that time.

However, the landscape has changed:

 Heightened competition: Introducing foreign chains such as Starbucks and Costa

Coffee have raised the bar regarding atmosphere, menu selection, and customer
experience.
 Customer preferences are changing. Speciality coffee alternatives, distinctive brewing
techniques, and an emphasis on sustainability are now sought after.

CORE ISSUES IDENTIFIED WITH THE BRAND:

1. Unable to adapt to the changing landscape: Global franchises such as Starbucks

provided a high-end coffee experience, a varied menu, and a contemporary cafe
atmosphere.
2. Outdated Cafe Experience: CCD's cafe ambience and menu may be less enticing than
recent competitors prioritizing a cosy and hip environment.
3. 2019 Debt and Crisis:
 Mismanagement of finances: The founder's suicide letter revealed a large debt load,
pointing to possible problems with budgeting and resource allocation.
 Lender pressure: The debt predicament severely hampered the brand's capacity to
make the required investments and effectively compete.

These elements worked together to produce a vicious cycle:

 Customer base decline
 Diminished revenue
 Brand Image and reputation were decreased due to the founder's demise.

PORTER’S FIVE FORCES MODEL:

S.No Force Description Impact on Competition

1 Threat of New Entrants Medium - Establishing cafés requires a
relatively significant investment.
- Well-known brands are easily
recognized (strong brand
recognition of existing brands)
-Opportunities for new entrants are
 created by the growing coffee
culture, particularly in the
speciality coffee markets.
2 Bargaining Power of Low to - A fragmented market with a wide
Suppliers Moderate range of suppliers of coffee beans.
- Government rules influence prices
for milk and coffee.
- Large coffee chains may have
some negotiating leverage due to
bulk buying.
3 Bargaining Power of High - A wide range of coffee shops and
Buyers brands are available.
-Minimal switching expenses for
clients.
-Consumers have a wide diversity
of choices and are becoming more
price-conscious.
4 Threat of Substitutes High - Tea is widely used as a customary
hot beverage.
- There is a rising demand for other
drinks, such as juices, vitamin
drinks, and flavoured milk.
5 Competitive Rivalry High - Vigorous competition between
global businesses like Starbucks
and Costa Coffee and well-known
domestic players like CCD and
Barista Lavazza.
- Bold marketing approaches with
an emphasis on unique brand
positioning. - Competition from
larger cities may shift to smaller
communities, and online
distribution may become more
prevalent due to saturation.

SWOT ANALYSIS OF CCD INDIA:

Strengths:
 Brand Recognition: CCD has a vast and well-established network of retail locations,
making it a household name in India.
 Affordability: CCD has always positioned itself as a less expensive alternative to
upscale coffee businesses.
 Vertically Integrated Supply Chain: Some control over cost and quality is possible
when coffee farms and roasting facilities are owned.
  Huge Customer Base: Over a lengthy period of operation, a devoted customer base
was developed.

Weaknesses:
 Menu Restrictions: CCD's menu may be perceived as having less diversity in food and
drink selections than other restaurants.
 Inconsistent Quality: Various establishments may have complained about
inconsistent service or coffee quality.
 Damaged Brand Image: The recent incidents involving the founder of CCD may have
affected the company's image.
 Financial Difficulties: Concerns regarding the company's future may arise if its
financial difficulties are made public.

Opportunities:
 Extending Delivery and Takeout: There is a chance to go to a larger audience thanks
to the expanding online meal delivery business.
 Menu Innovation: Adding new food and drink selections to the menu to reflect
changing consumer tastes.
 Put Safety and Hygiene First: Following COVID, establish strict hygiene measures to
win customers' trust.
 Targeting New Customer Segments: Trying to find ways to draw in those who aren't
just students and young professionals.

Threats:
 Intense Competition: Both domestic and foreign competitors are putting more and
more pressure on the Indian coffee market.
 Shifting Consumer Preferences: There may be a threat from rising speciality coffee
knowledge and changing café culture.
 Economic Downturn: If the economy contracts, consumers on a tight budget may
seek cheaper options.
 Increasing Input Costs: Changes in the price of milk and coffee beans may influence
profitability.

Original and Revised Positioning:

Original Positioning Affordable hangout spot for young India, offering coffee and
Statement light bites in a casual and social atmosphere
Revised Positioning Your familiar cup of comfort, evolving with new flavours and
Statement experiences to brew a brighter tomorrow

PRODUCT STRATEGY:
  Menu diversification: To appeal to a more extensive clientele looking for a whole cafe
experience, include new food options for sandwiches, salads, pastries, and healthy
snacks.
 Put Quality and Consistency First: Impose more stringent quality control procedures
to guarantee uniform taste and service at all locations.
 Speciality Coffee Range: To draw in speciality coffee connoisseurs, launch a high-end
coffee range featuring single-origin beans, brewing techniques, and distinctive flavour
profiles. Ranking among the top 38 coffees worldwide, Indian filter coffee has the
potential to expand the country's coffee offerings while also boosting its popularity in
various parts of the nation.
 Seasonal Menu Options: To create buzz and entice customers to return, create menus
that are only available for a short period and feature seasonal foods and drinks.

Modifications to Packaging:

 Eco-Friendly Packaging: Using sustainable and eco-friendly packaging solutions for

takeout food to appeal to customers who care about the environment. This
packaging may be identical to what Starbucks and other neighbourhood coffee shops
provide. It also makes it easier for users to take their coffees to go.
 Stylish and Attractive Design: Bring the brand's progression into the packaging design
with a sleek, contemporary look. For example, I am swapping out the outdated white
coffee mugs for more excellent, visually appealing ones.

PRICING STRATEGY:

 Value-Based Pricing: Uphold CCD's fundamental advantage of affordability while

highlighting the value of its products and services. This could entail emphasizing high-
quality coffee, fresh food, and a cosy atmosphere. Coffee can be served in various
portions, so customers can drink it as much as they need.
 Price Bundles and Promotions: To attract budget-conscious clients and promote
higher per-visit spending, implement price bundles and promotional offers for food
and beverage combos.
 Flexible Pricing: To accommodate a range of consumer preferences, investigate tiered
pricing alternatives for various coffee sizes and customizations.

BRAND ELEMENTS:

Add:
 Emphasis on hygienic and Uniform Experience: Convey the hygienic measures put in
place to win back customers' trust after the COVID-19 pandemic. Presently, CCD
provides customers with various experiences at various CCDs; this ensures that the
experience is consistent and unaltered.
  Transparency and Sustainability: To appeal to environmentally sensitive customers,
highlight CCD's dedication to sustainable processes and ethical sourcing.

Adjust:
 Redesign the brand image to reflect the improved menu and café experience in a
more contemporary and welcoming way.

Eliminate:
 Negative connections: Focus on the brand's future while maintaining open
communication to address any unfavourable brand connections brought forth by
current occurrences.

PROMOTIONAL STRATEGY:

Communication Strategy:

 Emphasis on Brand Refresh: Use marketing efforts that highlight new menu items,
higher sanitary standards, and a focus on the customer experience to communicate
the brand's evolution and dedication to progress.
 Digital marketing: Use online advertising and social media channels to promote new
products and target niche markets. Modify CCD's Instagram style so that it appeals to
a younger demographic. It has a pink theme right now and doesn't discuss the new
products CCD is developing; postings about those products should also be added.
 Customer Engagement Programs: To encourage return business and foster closer ties
with your clients, put loyalty programs and incentive schemes into place.

Media Strategy:

 To reach a larger audience, use a combination of offline and online channels through
omnichannel marketing. This could involve influencer marketing, social media
campaigns, partnerships with nearby companies, and well-thought-out in-store
promotions.
 Community Engagement: To establish a positive brand image and forge closer ties
with your customers, collaborate with nearby communities, sponsor events, and
participate in social activities. To better serve the target audience, CCD might
collaborate with B-Schools and other institutions to sponsor events.

Promotional Initiatives:

 Events for the Launch of New Menu Items: Plan in-store events to introduce new
menu items, providing free samples and promotions to create buzz.
 Delivery App Partnerships: Work with well-known meal delivery apps to raise brand
awareness and expand your clientele by offering discounts and promotions
 specifically tailored to them. Delivery of beverages ensures that consumers can have
their favourite drinks even at home.

3 YEAR PLAN:

Driver Contribution to Sales Growth

New Customer Attract new customers through:
Acquisition (20%)
* Modernized brand image and cafe experience.
* Focus on hygiene and safety.
* Social media marketing and influencer partnerships.
* Targeting new customer segments (families, working
professionals).
Increased Usage by Encourage repeat visits through:
Existing Users
* Loyalty programs and reward schemes.
(40%)
* New menu offerings and seasonal promotions.
* Improved in-store experience and service quality.
* Mobile app for ordering and contactless payment.
New Products & Launch new offerings to cater to diverse preferences:
Variants (30%)
* Specialty coffee range with single-origin beans and brewing
methods.
* Wider food menu with healthy and gourmet options.
* Seasonal beverages and limited time offer.
* Eco-friendly takeaway packaging.
Price Optimization Maintain affordability as a core value proposition.
(10%)
* Introduce value-based pricing and price bundles.
* Consider tiered pricing for different coffee sizes and
customizations.

Explanation:

 Bringing in brand-new clients is anticipated to account for 20% of the revenue

growth at CCD. This will include taking a multifaceted approach that includes
rebranding the company, highlighting safety and cleanliness, using social media
marketing, and focusing on client demographics other than their typical young adult
audience.
  Existing customers are expected to raise their usage by 40% of the rise. A user-
friendly mobile app, additional menu items, enhanced service quality, and loyalty
programmes can all encourage return business and increased per-visit expenditure.
 The introduction of new items and variants is expected to account for 30% of the
growth. Sales can be increased by adding seasonal beverages, adding more food
options, and introducing a speciality coffee line. These actions will satisfy a larger
variety of consumer tastes.
 It is expected that price optimisation measures will account for 10% of the growth.
Although affordability is still a key feature, revenue can be increased without
upsetting the core clientele by using tiered price alternatives and value-based pricing
bundles.

Assumptions:

 Starting Sales (Year 0): ₹ 924Cr (Based on publicly available financial data for FY 23)
 Average Transaction Value (ATV): ₹ 175 (CCD Menu Considered)
 Gross Profit Margin: 60% (Estimated based on cafe industry benchmarks)
 Marketing & Promotional Spend: 5% of annual revenue (Industry standard for
restaurant chains)

Year 1: Focus on brand relaunch campaign, social media marketing, influencer partnerships,
and in-store promotions to attract new customers and showcase the revamped brand
identity.

S.No Year 1
1 Sales Growth Target 20%
2 Projected Sales 1,108.80
3 Average Transactions 6.34
4 Gross Profit 665.28
5 Marketing & Promotional Spend 55.44

Year 2: Expand on digital marketing efforts, explore online advertising, and leverage
customer data for targeted promotions. Maintain a presence on social media and continue
influencer collaborations.

S.No Year 2
1 Sales Growth Target 25%
2 Projected Sales 1,386.00
 3 Average Transactions 7.92
4 Gross Profit 831.60
5 Marketing & Promotional Spend 69.30

Year 3: Integrate loyalty program marketing, mobile app promotion, and explore strategic
partnerships with food delivery apps and local businesses to further incentivize customer
engagement and sales growth.

S. No Year 3
1 Sales Growth Target 30%
2 Projected Sales 1,801.80
3 Average Transactions 10.30
4 Gross Profit 1,081.08
5 Marketing & Promotional Spend 90.09

EXPECTED OUTCOME OF THE RELAUNCH STRATEGY:

The expected outcomes of CCD's relaunch can be categorized into short-term (Year 1) and
long-term (Year 2 & 3) benefits:

Short-Term Outcomes (Year 1):

• Enhanced Customer Acquisition & Brand recognition: The marketing and relaunch
campaign need to raise brand recognition and draw in new clients who are
interested in the updated CCD experience.
• Better Customer Perception & Brand Image: By emphasising safety, hygiene, and
a contemporary brand identity, businesses can enhance consumer perception and
restore their reputation.
• Growth in Sales & Transactions: To encourage customer visits and boost sales
from both new and existing customers, consider implementing new menu
offerings, incentives, and a loyalty programme.
• Enhanced Customer Engagement: You may increase customer loyalty and
engagement by leveraging influencer marketing, social media, and mobile apps.

Long-Term Outcomes (Year 2 & 3):

• Sustainable Sales Growth & Market Share: In the Indian coffee market, persistent
sales growth and a larger market share can be attained through ongoing
marketing initiatives, product innovation, and a focus on customer experience.
• Enhanced Customer Loyalty and Advocacy: By fostering customer advocacy and
brand loyalty through well-thought-out loyalty programmes and an emphasis on
 customer satisfaction, CCD may be promoted via social media and word-of-
mouth.
• Profitability & Financial Sustainability: CCD can increase profitability and provide
a financially stable future as sales increase and operational effectiveness rises.
• Market Leadership & Brand Differentiation: CCD may become a leader in the
changing Indian coffee culture by successfully differentiating itself through a
distinctive brand experience, premium offers, and innovation.