A STUDY ON MARKETING STRATEGIES AND ACTIVITIES OF COSTA COFFEE

COSTA COFFEE

SANYA ZAIDI

A REPORT

ON

A STUDY ON MARKETING STRATEGIES AND ACTIVITIES OF COSTA COFFEE

BYSANYA ZAIDI
MARKETING INTERN

DEVYANI INTERNATIONAL LIMITED (COSTA COFFEE)

JAMIA HAMDARD UNIVERSITY

TO WHOMSOEVER IT MAY CONCERN This is to certify that the project report titled A study on Marketing

Strategies and Activities of Costa Coffee carried out by Ms. Sanya Zaidi, D/o (Late) Mr. S.M Jafar Zaidi has been accomplished under my guidance & supervision as a duly registered MBA student of the Jamia Hamdard

University. This project is for being the submitted of by the him Master in of the partial fulfilment of the from

requirements

award

Business

Administration

Jamia Hamdard University. His summer internship for the represents award of his the original degree work of and Master is of worthy of

consideration Administration.

Business

___________________________________

Mrs. Nudrat Moini

Date:

DECLARATION

I,

"Sanya Zaidi done for

hereby declare by me

that the and has

work presented not been

herein or

is

genuine submitted data

work

originally the

published Any

elsewhere

requirement

of

degree

programme.

literature,

or works done by others and cited within this dissertation has been given due acknowledgement and listed in the reference section.

_______________________

Sanya Zaidi

ACKNOWLEDGEMENT

At the successful completion of my summer training, I would like to forward my heart-felt gratitude towards all the members of this esteemed organization. My special thanks to: Mr. Virag Joshi- The President and CEO of Devyani International Ltd group. He was the source of inspiration and sincerity for me throughout the course of my project. Mr. Nitin Tyagi- Assistant Marketing Manager, Costa Coffee, Devyani International Ltd., Delhi. Being my company guide, he provided me with an opportunity to work under him for 14 weeks where I learned the working of coffee industry in a practical way. Mrs. Nudrat Moini- Faculty, FMIT, Jamia Hamdard University under whom I had spent my 14 weeks. She helped me to bring my creative self to the shelf by giving me suggestions and clearing my doubts. She had supported me throughout my course of my project. Also, I take this opportunity to thank Ms. Disha Saxena, Marketing Manager, Costa Coffee, Devyani International Ltd., Delhi who helped me with my project modules and the analysis. Moreover, probably this is an opportunity to pay thanks and regards to all my teachers. I will be grateful forever and will always remember them for the kind assistance, encouragement, guidance and support given to me.

SYNOPSIS

The project basically aims at understanding how the marketing strategies and activities are carried out in a business like COSTA COFFEE. The report also includes the analysis of the coffee industry, competitor analysis and the customer profiling of Costa Coffee. With the help of these analyses, future strategies for Costa Coffee can be formulated. It begins with an overview of the parent company RJ Corp which is the channel partner to some of the biggest and the most reputed brands. RJ Corp Limited operates as a subsidiary of Jaipuria Group. Today, RJ Corporation is the channel partner to some of the biggest and the most reputed brands of the world like Pizza Hut, Pepsi, KFC, Costa Coffee, Cream Bell, Cryobanks, DPS and Disney. It explains how RJ Corp started and how it soon tied up with the reputed brands and how its associate company Devyani International Limited (DIL) came into being. DIL is a key associate company of RJ Corp and it owns and operates 100 plus Pizza Hut and KFC restaurants in India, Nepal and Nigeria. DIL also owns and operates 98 plus Costa Coffee stores in India. It has the master franchisee for Costa Coffee. DIL has also launched food court at the domestic airport, Delhi. Costa India is a part of RJ corporate group. Costas USP lies in their excellent range of Coffee and Coffee-based drinks, apart from the other popular non-coffee beverages. This coupled with the well decorated, beautiful and unique interiors give Costa customers a relaxed environment to savour their coffee. Analysis of the coffee industry and the Costa Coffees competitors is done as its a vital part in formulating future strategies and finding out the opportunities and threats for the company. Through the analysis it was found out that consumption of coffee in the non-Southern regions is growing thanks to the increasing no. of outlets by coffee chains. Coffee chains have identified these states as the potential areas to increase the consumption growth in the future. Since the coffee industry is growing at 40% each year and India has the potential for 5000 outlets there is still scope for different brands to take over the market.

High growth of the coffee industry is attributed to the fact that government of India has provided some export promotion schemes and other subsidies, increasing trend of eating out, growing young population, rising demand for ready to drink and instant coffee, favourable demographics and growing disposable income.

Then the report takes on the market study and the competitors analysis part. Costas market study is explained which describes that Costa is targeting very high end customers; it is targeting

that market where it can find viable options like in big corporate offices. Elite class is the target group for Costa. Competitor analysis aims at an in-depth comparison of Costa Coffee with its competitors with the help of key success variables which will help in identifying the opportunities and threats. Major players in the Coffee industry are CCD, Barista, Coffee Bean and Tea Leaf and Mocha. The key industry success variables like variety, ambience, taste and quality etc. have been identified through focus group study by some industry experts for the Coffee industry. A survey was done in which a sample size of 180 customers of different coffee shops ranked these variables on a scale of 1-5 on the basis of the experiences of the customers in different stores. Unbiased response was needed so different customers were surveyed at different places. After that on the basis of the response of the customers, the strong points and the weak points could be easily gauged. Weak points being the high prices and poor brand recall. Then the survey also had one more aspect which was to analyze the customer profile of Costa Coffee and other stores. It was observed that people from the age group 26-30years were the major contributors of the revenue for Costa Coffee. Then the report moves on and explains the different marketing activities followed by the company like campaigns for March and April. Each explains why and how each campaigns objective is different and how it is implemented through the communication of that campaign. LSM i.e. Local Store Marketing Activities explains how in-store promotional activities take place. Minute details are analyzed from menu-boards to Toblerone. All those activities that increase the sales of particular store of Costa are known as local store marketing activities. Effective local marketing is very important to the success of the stores. In a business like this minute things are taken care of and this report contains those aspects.

TABLE OF CONTENTS

Contents No.
Chapter-1 INTRODUCTION

Page

1.1 1.2

THEORETICAL BACKGROUND INDUSTRY PROFILE Pestel Analysis

1-19

1.3 1.4 1.5 1.6

COMPANY PROFILE MISSION VISION SWOT ANALYSIS

22-24 24

Chapter-2 Chapter-3 Chapter-4

LITERATURE REVIEW RESEARCH OBJECTIVES RESEARCH METHODOLOGY TOOLS USED FOR ANALYSIS