PRESENCE

Barista

came

to India over three years ago, with the vision of ushering in a

`coffee drinking revolution' in the country and redefining `pub hopping'. In just a little
over three years, Barista has created a space in not only the specialty coffee segment,
but in the lives of millions of satisfied customers across the country. At present, the
Barista coffee has 130 Espresso Bars and Espresso Corners in Delhi, Noida, Gurgaon,
Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Chandigarh, Panchkula, Goa,
Pune, Ahmedabad, Lucknow, Kanpur, Shimla, Ludhiana, Baroda, Nagpur and Dehra
Dun making it one of the largest retailers of specialty and gourmet coffees in Asia
While Barista started off with a clear strategy, it tried to spread too fast. As a result, it
spread itself thin. So now they are doing

consolidation instead of expansion, and

taking the business into a different phase. Barista is not on a hyper growth path and
they are readdressing the business at fundamental level. They will be into
consolidation mode for an year.
About 15 Barista stores are in malls, the rest being standalones, 130 in all. By 200506, Barista plans to have over 300 outlets across the country up from 130 at present.
In the past year Barista has expanded through tie-ups with major retail chains and
setting up outlets in their premises. Barista tapped large corporates by setting up
Espresso bars at their premises, similar to the one at ICICIs at Bandra - Kurla
complex in northwest Mumbai. This move was spurred by huge business volumes
generated by its coffee bars in commercial complexes Barista has tie-ups with Planet
M, Crossword and the Taj group of hotels for setting up Espresso corners within their
premises. And along with ABN Amro, Barista has introduced a concept called Ban
caf - a caf in the bank premises.

Instead of quantity and spread, Barista is concentrating on quality and focus; major
step in this is relocation of outlets and exiting non-starters. They are going to exit
unsustainable outlets. From the locations currently, Barista will knock off about 10.
The unviable stores that BCC proposes to shut down will be those from a combination
of metros and SEC B and C towns and cities. Most of these will be standalone stores.
They want ratio of malls to increase against standalones. Barista appears to have its
pulse on the Indian consumer.
The chain proposed to tap Class I towns in markets where it is un-represented, for
example, Central India. By next year, Barista is hopeful of operating through 225
Espresso Bars, against 130 now. For starters, the coffee chain was going to smaller
towns. They are moving the brand into new markets and smaller towns, and
expanding to eastern markets such as Assam, Orissa and West Bengal. Barista plans to
add 20 new stores in this region.
Another change that has taken place at BCC is that for the first time since the coffee
chain began operations in India, it is taking the franchise route to expand operations
instead of company owned ones. According to them the opportunity for growth in
this business is significant and cannot be fulfilled by internal resources alone, so they
decided to add franchising as one of the business formats actually the company wants
to raise money through franchising because its funds have dried up.
The Barista concoctions will soon be available in places such as airlines as well as
some Taj Group of hotels owned by the Tata group. They have already

opened its

first Barista Espresso bar at Taj Delhi. The company is talking to several large hotel
chains to set up shop in their premises, similar to what it is doing in the lobby
restaurants of select Taj hotels. Barista also plans to set up coffee corners and
Espresso bars at the airport lounges managed by the Taj Group of hotels (part of the
Tata group companies).

Through the Taj Group, Tata has also been associated with airline catering. Barista is
in advanced stage of negotiations for in-flight catering with various national and
international airlines.
The company is also talking to a number of petroleum companies, including IBP and
Indian Oil, to open off premises joints. Petrol retails like Indian Oil and Hindustan
Petroleum are converting their retail outlets in metros into convenio stores with
restaurants, cyber cafes and shopping malls. Barista is targeting the same segment.
As part of its overseas expansion plans, the Barista-Tata alliance plans to set shop in
Malaysia, Oman, Dubai, Bahrain, Egypt, some East European countries and parts of
Africa. It plans to set up outlets in South Asia, Middle East and Eastern Europe in the
next few months.

CHAPTER-1
INTRODUCTION

 1.1 Introduction To The Topic

The management process through which goods and services move from concept to the
customer. It includes the coordination of four elements called the 4 P's of marketing:
(1) Identification, selection and development of a product,
(2) Determination of its price,
(3) Selection of a distribution channel to reach the customer's place, and
(4) Development and implementation of a promotional strategy.
For example, new Apple products are developed to include improved applications and
systems, are set at different prices depending on how much capability the customer
desires, and are sold in places where other Apple products are sold. In order to promote
the device, the company featured its debut at tech events and is highly advertised on the
web and on television.

Marketing is based on thinking about the business in terms of customer needs and their
satisfaction. Marketing differs from selling because (in the words of Harvard Business
School's retired professor of marketing Theodore C. Levitt) "Selling concerns itself with
the tricks and techniques of getting people to exchange their cash for your product. It is
not concerned with the values that the exchange is all about. And it does not, as
marketing invariable does, view the entire business process as consisting of a tightly
integrated effort to discover, create, arouse and satisfy customer needs." In other words,
marketing has less to do with getting customers to pay for your product as it does
developing a demand for that product and fulfilling the customer's needs.

General Advantages of Marketing

An obvious advantage of marketing is the promotion of your business; getting the
recognition and attention of your target audience across a wide ranging or specific
market.
Going hand-in-hand with this is the enhanced brand recognition. Over time potential
customers and members of the public will begin to associate your logo and your brand
with your business.
Every business needs to spend money to make money. Investing in marketing is no
different. The most important advantage of marketing is therefore quite simply improving
the businesses profits by boosting sales.
There are five competing concepts under which organizations can choose to operate their
business; the production concept, the product concept, the selling concept, the marketing
concept, and the holistic marketing concept. The four components of holistic marketing
are relationship marketing, internal marketing, integrated marketing, and socially
responsive marketing.
The set of engagements necessary for successful marketing management includes,
capturing marketing insights, connecting with customers, building strong brands, shaping
the market offerings, delivering and communicating value , creating long-term growth,
and developing marketing strategies and plans.

Importance of Marketing

Marketing promotes product awareness to the public

Marketing helps boost product sales
Builds company reputation

1.2 Objectives Of Study

The main objective of the study is to know about the different marketing
strategies adopted by the Barista.

To know about the expectation of the customers.

To know about the position of the company in the market.

To know about the competitors.

To find out the customer satisfaction in industry that means to study whether the
customers are satisfied by the products and services provided or not.

To conduct a study of various services provided by the company providers by

specifying the various factors on the basis of those we can check the satisfaction
level of the customers.

To know and understand various strategies used by the service providers in order
to increase consumer satisfaction.

To identify the customer response towards the industry.

To promote the products and services of the industry.

SWOT analysis of the products and services offered in the company.

To assess competitive strength and policies

To estimate potential buying power

To know customer acceptance

 1.3 Literature Review

Business organizations are constantly seeking ways to enhance their performances in
order to compete actively and aggressively in the market. Profit-seeking organizations
have long recognized the importance of creating value in the products and services they
offer to the customers, all in the common objective to deliver commercial goods
efficiently in order to keep the current customer-base satisfied. Aside from inculcating
loyalty among the members of the clients and customers of a business organization,
companies are likewise aware of the need to widen and extend the reach of the
companys products and services to new markets in order to increase its share on clients
and customers. Strategies, plans and techniques in the areas of operations,
communication and marketing, sales, supply chain, logistics, research and development,
performance measurements as well as social and corporate obligations and responsibility
are continuously improved all for the benefit of the target market. Once companies
become successful in these organizational and managerial areas, sustained economic
development is envisioned. This literature review aims to present a critique of existing,
published literatures that analyse the relationship between marketing strategies and the
firms performance.

Historically, marketing strategy formulation is viewed as an antecedent to performance

outcomes (Lages 2000). It is the modus operandi that allows an organization to
concentrate its limited resources on the best available opportunities to increase sales and
achieve a sustainable competitive advantage (Michael Baker 2008).
Marketing strategy has been a salient focus of academic inquiry since the 1980s,
according to (Mavondo 2000). There are numerous definitions of marketing strategy in
the literature and such definitions reflect different perspectives (Li et al 2000). A
traditional definition of marketing strategy is a plan for pursuing the firms objectives or
how the company is going to obtain its marketing goals with a specific market segment

(Orville and Walker 2008; Theodosio, Leonidus, 2003; Kotler, Armstrong, 2009) while
Brodrechtova (2008) explains that marketing strategy is a roadmap of how a firm assigns
its resource and relates to its environment and achieves corporate objective in order to
generate economic value and keep the firm ahead of its competitors. In laymen terms it is
to determine the nature, strength, direction, and interaction between the marketing mixelements and the environmental factors in a particular situation (Li et al 2000). According
to Levie (2006), the aim of the development of an organizations marketing strategy
development is to establish, build, defend and maintain its competitive advantage. A
thorough analysis of the newest scientific articles on strategic management and
organisational behaviour indicates that 71% of them analyse company performance as a
dependent variable, 12% of them analyse it as an independent variable while 11% of the
studies analyse performance as a dependent as well as an independent variable (March
and Sutton1997).
Firms performance, on the other hand, is a well established measure in marketing
literature. We measure it through sales volume, profitability and market share for the
current period (current firm performance), and perceived satisfaction with these measures
when considering the previous year. (Past firm performance)

CHAPTER 2
COMPANY PROFILE

 2.1

BARISTA IN INDIA

The first Barista Coffee bar in India was established in September 1999 in Banglore with
the aim of identifying growth opportunities in the coffee business. Increasing disposable
incomes and global trends in coffee indicated immense growth potential in this particular
segment; this espresso bar was mainly used for understanding the market trends and
consumer behavior. After testing the concept and understanding the need of the
consumer, they realized that people in India were looking for a comfortable place to relax
and unwind while sipping delicious coffee It was followed by the opening of second, but
more operative Espresso Bars in February 2000 in New Delhi (Vasant Vihar).
From the very beginning Barista has tried to project itself as a European coffee joint.
More significantly, Barista has been quick to spot a latent need waiting to be tapped:
Coffee lovers seek a complete experience. One that combines intelligent positioning with
the right product mix and carefully designed cafes. In other words, customers seek an
"experiential lifestyle brand". For that purpose the company needed a system that could
not only deliver great coffee and espresso bars, but one with the ability to scale up
operations quickly.
The mission statement of Barista is we are not in the coffee business serving people, but
in the people business, serving coffee. implying, the way of serving the coffee is more
important rather than just selling the product.
Company Performance
Barista Coffee is, perhaps, Indias fastest growing specialty coffee retail chain. It is
focused around building an experiential lifestyle brand and providing its consumers a
comfortable place to relax and spend quality leisure time. Besides witnessing a consistent
increase in the footfalls in each of its stores, the brand has, since inception, been able to
generate a loyal base of consumers.

Awards And Recognition

According to the Hindustan times Barista is the pioneer of coffee bars in the country, it
boasts of consistent quality and a lively atmosphere used as a hangout by the young and
trendy, tourists who wants their fix of caffeine and just about everybody else, it offers
sandwiches & cakes, though it is their biscuits that go best with the coffee. They also
have a generous selection of non-coffee beverages so you dont have to be a coffee lover
to visit Barista.
A huge shot in the arm and validation of the companys efforts has been the recognition
given independently by BBC, The Times of India and Business Standard as the Brand of
the Year in 2002. Barista was also awarded the TOPS award for Specialty Coffee
Excellence by the Specialty Coffee Association of America (SCAA), which recognizes
specialty coffee retailers who differentiate themselves through better business practices.
Recently Barista was also recognized by the HT Food Guide as the best place to have
coffee as well as Caf of the Year award given by The Times Group in the Times Food
Guide.

BARISTAS MARKET SHARES

Barista

Caf Coffee Day

Indian Coffee House

Others

Others

Indian Coffee
House

Barista

Caf Coffee
Day

B
Barista 41%, Caf Coffee Day 35%, Indian Coffee House 8%, Others 16%

Today Baristas market share is around 41% of the whole coffee bar market.
(Market Size Rs. 250 crores)

The company caters to 29,000 customers every day through its 130 espresso bars
and corners across 23 cities including New Delhi, Mumbai, Bangalore,
Hyderabad, Chandigarh, Chennai, Ahmedabad, Pune, Goa, Kolkata among others.

Baristas sales turnover is around 63 Crores (all of India)

100% owned by Sterling Infotech Ltd

 2.2

SEGMENTATION

Demographic Segmentation:
- Age: The main segmented group for Barista is between 19 to 29 years.
- Income: The available segment for Barista is the population belonging to High Income
Group (Upper-Middle & Upper)
- Occupation: Baristas relevant segment is students and young urban professionals.
Geographic Segmentation: The company is primarily interested in Sec-A and B cities,
which include the metros, and cosmopolitan cities like Bangalore, Hyderabad, etc. It also
plans to expand in the southern belt in Kerala and Andhra Pradesh.
Psychographic segmentation: Since Barista is projecting itself, as more than just a place
to have a cup of coffee, its relevant market comprises of people who are sociable,
extroverts, and very brand conscious, upwardly mobile, and gregarious. They enjoy going
out with friends and hanging out at Barista after college or work. Coffee to them is more
than just a beverage; it is a statement and an inherent part of their lifestyle. And Barista is
an ideal place to socialize, finalize business deals and just hang out.
POSITIONING
Coffee in India is still regarded as an expensive product, hence

associated with status.

The general perception is that it is a drink that is consumed outside the house. When
people drink coffee they are looking for more than just the drink, they are looking for an
experience, which they can savor. Barista aims at providing the same. It is positioning
itself as an in place to be (Annexure: DOLE MENTAL MAP FOR CONSUMER
PERCEPTION). It is a popular youth hang out where the world meets It has
achieved its position as the market leader by through the Barista Experience

10

Barista has positioned The Barista Experience by promoting activities like soft adventure
and music. This initiative helps in building communities of like-minded people around its
stores across the country apart from creating a unique profile for the brand. The partners
of The Barista Experience get to tap this audience for the calendar of events lined up
through the year such a World Angling Tournament, Hot air ballooning or a White water
rafting expedition or The Himalayan Mahaseer Fishing. Experts with Barista ensure that
the backend is clean and put all these events together.
It has also managed to differentiate itself from the other players on the following counts:
Color scheme They use Saffron & Brown as their trademark colors as they reflect
maturity, balance and sensibility.
Music played- It is soft & soothing, so as to not hamper conversation or get in the way of
discussions.
Choice of games- Chess and Scrabble are available which again appeal more to the young
executive profile which Barista targets.
Other factors like the seating style, conduct of employees contribute to making the
Barista experience especially memorable to the Guest
The main idea behind this concept is that a unique Barista experience will not only bring
the customer back but also help in word of mouth publicity on which Barista relies very
heavily.

11

 2.3

ENVIORNMENTAL ANALYSIS

Being a part of the service sector operating in the hospitality industry, Barista is under the
influence of several environmental forces internal as well as external.
PORTERS 5 FORCE MODEL

The Porters 5-force model (Developed by and named after Michael Porter) helps identify
the external forces that act upon and influence a companys competitive position &
strategy.

12

These are:
(1) Inter Firm Rivalry: The biggest threat a company faces is from rival firms in the
same industry and product category. They compete for the slice of the same
market share and for the same spot in the consumers perceptual map. For Barista,
rivals include Nescafe & Georgia kiosks, Caf Coffee Day, Qwikys, India Coffee
House and Mocha. To overcome inter firm rivalry; Barista has tried to
differentiate its product offering from the other coffee bars. By way of games, and
a guitar and wi-fi enabled outlets, they have managed to position themselves as
being different and unique as compared to the other coffee joints.
(2) Threat from New Entrants: A firm not only faces competition from existing
companies in the industry but also potential entrants. If a new entrant is
successfully able to grab a foothold in the market, the slice of the pie gets reduced
for all the other companies as well. With new players like Starbucks, Tata Coffee,
Gloria Jean Caf etc poised to make an entry; Barista faces a potential threat from
new entrants into the market. The natural course of action is to establish high
entry barriers, by way of cost leadership, economies of scale, differentiated
personnel etc. Barista has managed to create a kind of an entry barrier by being
the 1st entrant into the market and reaping the benefits of being the first mover. By
the time the new entrants are able to gain a sizeable foothold in the market.
Barista would already by a well-established player.
(3) Threat from substitutes: Substitutes are firms that do not belong to the same
industry per se but address the same consumer need or want. They also attempt to
satisfy the same consumer need as the other firms though through a similar and
not same product offering. For Barista, the substitutes are Amorettos (Juice Bar),
Nirulas, McDonalds, etc which are increasingly becoming youth hangouts.
Barista has, by way of maintaining itself as a mainstream coffee bar and by

13

projecting coffee as its main product offering, been able to sustain its market
share against these substitutes
(4) Pressure from suppliers: With increasing bargaining power of suppliers, the firm
is forced to accept their terms and conditions. With a strong supplier, the company
is compelled to accept the price and other terms as dictated by the supplier.
Baristas largest material component is coffee. The supplies are regulated and
monitored by the coffee board. Till the time that Barista was associated with Tata
Coffee, threat from suppliers was not such a major issue. The ideal strategy for
Barista is to maintain strategic relationships with plantation owners and with the
coffee board. They could take over or enter into long-term agreements with coffee
plantations to overcome supply bottlenecks.
(5) Increasing pressures from buyers: With the increasing power of consumer both in terms of bargaining power as well as awareness & exercise of choice, the
firm has to be in a position to respond to consumer needs and strive to satisfy the
consumer in a speedy, reliable and cost effective manner. By differentiating its
product offering, effective positioning and promotion, and cost leadership, Barista
has been able to retain a large share of the consumers mind and recall. It has the
first mover advantage and has emerged as the leader in the coffee bar category.

14

 2.4

SWOT ANALYSIS

Strengths

Well-known brand name

First to enter the market
Market in the growth stage
Positioned as an Italian brand
High quality products
Skilled and committed team
High visibility locations
Collaborations with big stores
Soothing & comforting environment

Weaknesses

Distinct preference for tea

Overtly committed to expansion
Product price too expensive
Unavailability of food
Most outlets are on rent
Not targeting new segments aggressively enough

Opportunities

International market expansion

Launch new products
Huge scope for innovation in existing market
Tie up with Indian Oil Corp. & association with Sterling Infotech
New locations airport, hotels, malls, national highways

Threats

Strong competition
Changing trends

15

Fluctuating coffee prices

Indian customers price sensitivity overrides brand loyalty
Franchisee route of expansion may lead to deterioration of quality

2.5

COMPETITIVE STRATEGY

To counter the threat from external forces and to capitalize on their strengths, Barista
came up with a competitive strategy. The salient features were:

Introduced new low priced beverages.

Price cut resulted in 15% increase in walk-ins.

Barista also provides an informal ambience, games like Pictionary and

scrabble for customers.

Emphasis is on providing a hang out place where young people can sit and
chat without being disturbed.

Only company which offers 100% pure Arabica Coffee.

Encouraging youth by slashing prices.

Introduced the concept of Bank caf (Caf in Bank premises).

Complementary gifts in festive season.

Launched a weekly tabloid - Brew Print in tie-up with India Todays

afternoon newspaper Today for its editorial.

Released Smart Coffee card.

Developing a store-in-store concept by focusing on themes and revenues that

complements coffee such as music, books & arts.

16

Adopting a franchise route for expansion (especially in offshore market such

as U.A.E. and Sri Lanka), setting up Espresso bars in smaller towns at
affordable prices.

Barista is the only Coffee bar, which is open till late night.

Barista's operating principles were spelt out on posters that were witty and thought
provoking. One such statement said, In the olden days, to get a cup of coffee, youd
have to smuggle beans from Arabia at the risk of death. Now, all you need to settle for is
self-service.
ANSOFF MATRIX

When the company wants to go in for a growth strategy, there are 4 alternatives available.
(1) Market penetration: When the company wants to continue to cater to the same
markets with the same product offering but with a stronger and more aggressive
marketing plan, it is called Market Penetration.
(2) Market Development: When the firm wants to expand its markets, but with the
existing product lines itself, it is known as Market Development.

17

(3) Product Development: When the firm wishes to cater to the existing markets but
with a new and different product offering, it is called Product Development
(4) Diversification: When the company wants to enter into new products along with
new product offerings, it is called Diversification. It is the most extreme and risky
of all growth strategies.
As far as Barista is concerned, it is following a mixture of Market Development and
Product Development strategies. It is expanding into newer markets and cities with the
same product range as well as coming up with newer and more innovative offerings for
the existing markets. It has come up with an exclusive concept of a coffee lounge in
South Extension (New Delhi). With this coffee lounge, called Barista Crme, the
company plans to target upmarket clientele. As a result, all the tangible & intangible
product attributes are on the premium side. The serving glasses are larger, the furniture is
of dark wood finish (as against the regular saffron). The air is that of exclusivity and
selectivity. The rationale behind the larger portions is that psychologically, an unfinished
glass of coffee is considered almost as a social statement or a norm so to speak.

18

2.6

MARKETING MIX

As Barista belongs to the service sector, the following 7 Ps are pertinent.

PRICE
7 Ps of SERVICES

PROCESS

PRODUCT
PEOPLE
PLACE
PROMOTION

19

PHYSICAL
EVIDENCE

Product
Anything that can be offered to a market for attention, acquisition, use, or consumption
that might satisfy a need or want is known as a product.
Barista is offering a Service. Barista considers itself not in a coffee business to serve
people but in the peoples business of serving coffee. It promotes the concept of
neighborhood espresso bars. The total number of products in their menu is approximately
50.
Barista the brand is more important than just one product, coffee, and the aim is to deliver
value so that the customer chooses Barista as a cafe and not a place selling a cup of
coffee without any emotion involved.

PRODUCT

TANGIBLE

INTANGIBLE

The
physical
attributes
assembled in an identifiable
form to provide wants
satisfaction to consumers.

The
service,
experience,
uniform, casual ambience
formed with friendly staff,
uniform, games, guitar and
now books form the intangible
products of Barista.

E.g.: Baristas Coffee, Snacks

Among the products offered by Barista their coffee is the most popular one. Coffee alone
contributes around 50% to the revenues earned by Barista. The most popular coffees are
cappuccino, caf latte and caf mocha.

20

Product in Three Levels

AUGMENTED

ACTUAL

CORE

Core Product: It means the fundamental service or benefits that the customer is
really buying.

BARISTA CORE PRODUCT: Experience

Actual Product: A composite of the features and capabilities offered in a product,

quality and durability, design and product styling, packaging and brand name.

BARISTA ACTUAL PRODUCT: Coffee

Augmented Product: It consists of additional consumer services and benefits i.e.

facilities above customer expectations.

BARISTA AUGMENTED PRODUCT: Jukebox, Bookshop, and Guitar

21

BARISTAS NEW RANGE

Barista very recently has taken out their international coffee blend, which includes:

Cuba- the coffees under this are strong aroma based coffee.

Ethiopia under is the coffees are strong.

Brazil- the coffees offered under this is very light coffees.

They have recently introduced close to 12 new flavors of coffee

Espresso Italiano

Mocha Tease

Caribbean Calypso

Flavored Cappuccino (Hazelnut, Irish Cream, Cinnamon, Tiramisu)

Barista is undertaking up market stretch in order to enter the high end of the market, as
all the new variants introduced are priced high.
Example Caribbean Calypso, newly introduced coffee is priced at Rs. 47 (the most
expensive coffee at Barista)
This can also be seen as line filling as they are trying to plug holes to keep out
competitors (Caf Coffee Day recently introduced a whole new range of coffees).
In another change, Barista is diversifying its hot beverages menu and introducing several
specialty teas. Its new tea menu offers a wide range of flavors like:

Assam

Earl Grey

Masala Chai

Darjeeling tea (first flush/green flush/organic)

The reasoning undoubtedly is based on the fact that apart from South India all other parts
of the country are mainly tea-consuming areas, and this step is expected to help the
company expand its client base in the smaller towns of these regions.
It has also taken care of people who are neither coffee or tea drinkers by offering hot
chocolate and smoothies.

22

Product Life Cycle

Stages a product goes through from concept and use to eventual withdrawal from the
marketplace. Product life cycle stages include research and development, introduction,
market development, exploitation, maturation, saturation, and finally decline.

Product Life-Cycle Stages

Product development: A new product idea is found and developed.

Introduction: Slow sales growth as the product is introduced.

Growth: Rapidly increasing market acceptance and profitability.

Maturity: Slowdown in sales growth.

Decline: Sales and profits drop off quickly.

Barista & Product Life Cycle

Barista lies in the Growth Stage. Reasons being that

Indians still prefer tea to coffee.

Coffee is a fashion drink in India unlike tea. According to a recent survey, coffee
as a beverage has a status image (as it is considered expensive) in all zones and it
appeals most to the youth.

Also as Barista caters to SEC A & SEC B segment therefore the masses are left
untouched because of its pricing which quiet high for masses.

23

PLC of BARISTA
Profit

Baris
ta

Introduction

Growth

Maturity

24

Decline

Time

Pricing

In April, Barista had already cut prices by 30% - 35%. Yogesh Samat, CEO
Barista says that this cut was basically a price correction aimed at cashing in on
the on setting coffee season. In addition, they say that their main agenda is to
make Barista more accessible.
In continuation of the stated strategy of making its offerings more reasonably
priced, Barista has very recently slashed menu prices by 5% - 7%. This is
applicable however only in the cities of Delhi and Mumbai.

They had started out with the Skimming strategy, with now a shift towards Market
Penetration Pricing.

They also undertake outlet-based pricing. Also, another strategy is customizing

stores to suit localities.

With their Target Audience ranging from young college goers to young
Professionals, affordability is an important issue for them.

Banks on international coffee blends at affordable prices. The objective is to

democratize the coffee movement and provide premium coffee at affordable
prices.

Introduced new low priced beverages. This also led to 15% increase in their
overall walk-ins.

25

Promotion
The objective behind all the promotion strategies of Barista is to continuously tap the
customers indulgence for exclusive original coffees and convert the indulgence into
habit. These promotion events will enable the company to educate customers about the
original coffees.
They do not believe in releasing any aggressive advertising campaign for the original
coffees, as these events will serve as a platform to advertise through word of mouth
experience.
They have a large consumer base. It is not correct to say they will not use mass media.
Theyve already started using mass media to build relevance around the brand. Today,
consumers come to Barista to sit back, relax and enjoy, and have a good cup of coffee,
and there are a lot of things that you can do in Barista. For example, a lot of people are
meeting each other in Barista. So the checklist is to build relevance around the brand. At
the moment, Barista is building the brand and doing the communication, both within the
store as well as outside the store through mass media. Theyve done advertising in almost
all national newspapers. They have even launched their summer campaign through our
summer chillers, and this was advertised.
The main objective behind all the promotion is to associate with the brand and have
the consumers coming in to Barista.
ADVERTISING ACCOUNT
Rediffusion has bagged the Barista outdoors-advertising contract. Mumbai-based
Aloknanda & Co earlier handled the contract.

26

Barista's indoor campaigns, such as posters, menus and collaterals, would continue to be
with Aloknanda & Co.
Barista has earmarked close to Rs. 5 crore for advertising, up by nearly 25 per cent over
last year. Among the various aspects of Barista's campaign, Rediffusion will also look at
customization of stores, customer communications, promotions and highlighting of
certain products.

27

Barista promotes itself in a lot of ways like:

Tie ups

Barista Experience

Affinity card

SMS

Smart card

Games

Guitar

Juke box

Wi Fi enabled outlets

Festival bonanzas

TIE UPS
Today - Barista Coffee has launched a tabloid 'Brew Print' in Ties up with 'Today' for
editorial content. To meet the evolving social and intellectual needs of consumers, Barista
has planned to nationally rollout Brew Print, a coffee table newspaper at all Barista
Espresso Bars.
The take-away weekly tabloid is meant for consumers visiting any of outlets of Barista in
the country. The tabloid 'Brew Print' interactive stories, poetry section, music notes,
horoscopes- is designed to be read in 20 minutes keeping in mind the typical customer of
Barista, described by the company as 'inherent multi-taskers.' "A good cup of coffee and
something equally good to read, a perfect recipe, which establishes the age-old
romance of coffee and reading,"

Lacoste - Barista has tied up with Lacoste India in all the major metros and some minimetros. The strategy is to target younger audiences, which have a penchant for the "finer

28

things in life." On purchase of a Barista coffee worth Rs. 150, consumers can avail of a
Lacoste gift voucher worth Rs. 500 and a Lacoste calendar.
Taj Group of Hotels- Barista has tied up with Taj (TATA) group of hotels to open up
espresso bars in their premises and has opened its first Barista Espresso bar at Taj Mahal
Hotel, New Delhi. The Taj group of Hotels will supply food items such as cookies,
sandwiches and pastries to Barista outlets. So far, Barista has been outsourcing food
items from various suppliers. Barista also plans to set up coffee corners and espresso bars
at the airport lounges managed by the Taj Group of hotels (part of the Tata group
companies).
Planet M, Crossword And ABN Amro- In order to take off experience to another plane
and cultivate avenues and interests that compliment coffee, Barista has gone into
marketing alliances with brands like planet M, crossword to open espresso corners at
these stores. At ABN Amro, Barista has introduced a concept called Ban caf - a caf in
the bank premises.
MTV and In match modeling - In a bid to leverage its brand equity, Barista has entered
into two tie-ups. It joined hands with MTV for the AIDS supporting Music Summit.
Also, at a more local level, it has tied up with In match modeling
TATA Indicom In a tie up with TATA Indicom, Barista has started to make its outlets
Wife enabled Hot Spots, where customers will be able to connect with the Internet.
SONY - Barista ties up with Sony Music for 'live' music band named Ocean. Barista
will have live music evenings at various outlets this winter as the company presents
'Oceans,' the music band that will perform live till 14 December 2003. . Under this
association Sony Music would endorse CDs and music cassettes of their recent acts,
which will be used as the lucky draw prizes for the participants. It is believed that at
Barista music, art and theatre is central to the Barista experience."

29

People
Employees are the essence of all the organization. They are the ones who are directly
involved with the customer. Therefore its very important to satisfy the internal customers
i.e. the Employees so that they can meet the needs of their customers. The training given
to Employees at Barista is unique as compared to their competitors.
The way your Employees Feel is the way your customer will feel
Baristas Competitive Edge:

The people that are hired by Barista are from the hospitality industry unlike Mac
Donalds, which hires untrained graduates.

The Employees are trained in such a way that they are very friendly, polite and
helpful to customers.

Even if a customer does not order anything he has the right to sit in the coffee bar
for as long as he wants and the Employees cannot ask them to leave.

Safe environment for women in Barista because of glass frontage and never
disturbing staff.

30

Physical Evidence
Barista is a place where the world meets. It boggles the mind to see the kind of people
sitting there, what they're doing there, etc. A lot of them actually come alone as well. This
is actually one of those places with people coming in alone because they are comfortable
with themselves
The music is not too loud and encourages conversation, and the person behind the
counter is non-intrusive and friendly. Any consumer knows that even in a crowded
espresso bar, at Barista, you will have your share of privacy
The type of environment in a Barista is very youth oriented. That is, the furniture, the
games, guitar, jute box, TV, the whole of the ambience is catering to its target market.

31

PROCESS
Since Barista is a consumer centric organization it is extremely service oriented and pays
a lot of heed to customer feedback. Therefore all feedback attainted from the customers is
given a lot of importance. As a part of their process, they attend to customers complaints
as soon as its obtained. Minor problems that customers complain about such as service
related problems are solved on the spot. Bigger problems are forwarded to upper
management, as they need special attention. Also, Barista is preparing its staff personnel
by training them on a special 3 weeks training programme to achieve efficiency and
customer satisfaction

CUSTOMER SATISFACTION

32

Customer satisfaction the focal point of most of the marketing strategies in the present
context. In a buyers market where the customer is the Rex, business begins and ends
with the customer. The customer is the kingpin of any economy that permits survival,
growth, profitability, liquidity and the image of an organization. When so much emphasis
is laid on customer, the foundation of this Rex i his or her satisfaction and delight. Every
marketer and hence, manufacturer has to meet the expected level of satisfaction. It is not
only maintaining but expanding or enhancing it at any rate. If the king is happy, every
subject will be happy irrespective of his or her role. Hence, this chapter is designed to
learn the details of various dimensions of consumer satisfaction which is a positive mark
of consumer behaviour.
What is Satisfaction?
Satisfaction is the evaluation of an emotion. Satisfaction is the outcome of the interaction
between the expectations of a consumer and the performance of the product or service.
Satisfaction is the reward a consumer gets for the sacrifice he or she makes. Customer
satisfaction is an emotional and sentimental issue. It is a feeling of satisfaction over the
job well done in the past. Consumer satisfaction is the customers perception that a
vendor has met his expectations fully, efficiently and promptly. That is, customer
satisfaction is the summary of the opinions of the customer about the vendor. Right from
the pre-marketing to post installation service and complaint management, the customer
comes in contact with different. departments and functions of vendororganisation andthe opinion he forms about the supplier is the sum total of his experience and perception
he has while coming in contact with different sections of vendor unit.
A customer finally chooses a vendor who provides him more value for his money and
with whose product or service is quite satiated or happy. Higher the level of satisfaction.
better is the emotional and sentimental attachment to that brand and more intense is the
relationship between the customer and the vendor. It is not only a matter of product or
service. What is more is that consumer expects good deal of guidance in solving his

33

problems that crop up at any time. In case his problem or problems are solved by the
vendor, it is the vendor who creates a committed and loyal customer who is instrumental
in creating new customers.

34

FACTORS INFLUENCING CUSTOMER SATISFACTION

The factors that influence the consumer satisfaction can be lumped into broad categories.
There are human and product factors. Instead, we can also call them as vendor behaviour
and vendors product and service performance.
For the sake of convince these two sets of factors can be configured very well.

o
o
o
o
o
o
o

FACTORS AFFECTING CONSUMER SATISFACTION

HUMAN FACTORS
PRODUCT FACTORS
Response
o Performance
Service
o Efficiency
Commitment adherence
o Technology
Complaint management system
o Maintenance requirement
Customer importance
o Life span
Orientation
o Price
Attitude
o Appearance
o Customer friendly features
o Quality
o Trouble free operation

The Vendors product and service performance

The Vendor Behaviour
The vendor behaviour deals with the behaviours of management and employees of the
vendor. The vendors response. service and complaint handling are the factors more
dependent on the attitude and skill of the human resources available with the vendor,
This is dependent on the capabilities of the vendor and the skill of his employees. It
speaks of engineering and technology developed or acquired by the vendor. The quality
system being followed by the vendor and its effectiveness has a hearing on the trouble
free operation and lesser maintenance requirement of the product.

35

There are two aspects of the product that worry a customer after the product has come
into operations namely, efficiency and performance and its maintenance requirements. If
a particular product is having frequent breakdowns of is requiring expert attention more
frequently. It becomes a source of irritation for the customer in addition to financial loss
Again, if the equipment is not operating efficiently and consuming higher resources, it is
a source of worry and headache or the customer. It is observed that in a customers
segment, many customers are able to tolerate slight inefficiency but will not beyond a
limit and get totally detached with the vendor if the product needs high level of
maintenance. En core segment, equipment efficiency is as important as its availability.
Too much maintenance may offer availability of the equipment and it may derail the
economic calculations of the customer. This speaks of the importance of effective
complaint management system and service.
Measurement of Customer Satisfaction
Every customer has the options and there are competition waiting to spoil and exploit the
situation in todays globalised economy featured by highest degree of competition. The
interested parties can leverage small amount of dissatisfaction by feeding exaggerated
information about a vendor to the prospective unsuspecting customer. That is it is
necessary that the supplier has the information and feedback on the image he enjoys in
the minds of customers. To evaluate the image the supplier enjoys, he needs information.
He needs to know what comes to the mind of customer on remembering the supplier. Is
supplier efficient? innovator? modern? quality supplier? reliable 7 or untrustworthy? Is
lie keeping commitments? Is he different from his competitors and so on 7 It is. therefore,
essential for the supplier to measure customer satisfaction and take appropriate actions to
maintain and improve it. A successful business house needs quantitative measures. One
such measurement is that of consumer satisfaction. The measurement of consumer
satisfaction provides a supplies with the quantitative feed hack. In case such
measurement is done at regular intervals as is done in case of other business parameters

36

like turnover and profits, the supplier gets feedback as to whether his efforts have
produced positive results or there is need for corrective action.
Types of Information and Feedback
Measurement of customer satisfaction can provide the detailed information and feedback
in respect of business, customers, supplier, competition and performance related.
1.

Business Related: The business related information and feedback is in respect of:
its business from and provide information on how much customer centric it is:

I provides quantitative information on : (i) How many customers have

been lost (ii) How much business has been lost? (How much business
volume and profit, customer decay has been caused?

Satisfied customer acts as an extended marketing arm of the supplier.

A customer is unsatisfied when the supplier has either not come up his
expectation or honoured his commitment.

Due to human psychology, an unsatisfied customer is more likely to

speak often on the subject than a satisfied customer. It is rightly said that a
single unsatisfied customer can used the effect of five satisfied customers.

Only a portion of unsatisfied customers complain while the rest simply

switch to other competitors. They are lost simply without the knowledge
of supplier.

Loss of customer is loss of an opportunity and profitability.

37

Customers satisfaction channelises the organisation resources to bridge

the gap between the supplier and customer.

2.

Customer Related: The customer related information and feed back relaSes to the
variables like:

The number of customers lost.

The type of customers lost.

The reasons for the loss of customers.

The possible preventive measure to avoid customers loss.

The value assignment by the customers to supplied product and service

rendered.

The customer decisionmaking variables and weightage given to

each variable.

3.

The customers needs and requirements.

To make the supplier organisation more customer centric organisation

Supplier Related: The supplier related information and feedback is related to:

Suppliers strengths and weakness as compared to his competitors.

Suppliers core competitors as perceived by the market for future

growth and prosperity of the supplier.

To regain the position lost by knowing the exact position.

38

4)

Suppliers market standing and image.

The customers perception of supplier

Success rate of the supplier in keeping customers satisfied.

Competitor Related: Measurement of customer satisfaction provides competitor

related information and feedback on:

The business lost to the competitors its extent and impact.

The strengths and weaknesses of different players or competition

The studying of competitors- the gap between the actuals and bench
marking.

5)

Performance Related: The information and feedback related performance is to do

with:

Opportunities open for improvement with the existing programme,

product and services.

The details of actual cost of customerturnover.

The level of performance as perceived by the customers.

The sharpenes of companys competitive edge and its improvement for

better future.

Customer Satisfaction Measurement Methods

39

The methods of measurement of consumer satisfaction should cover the basic areas
namely, identification of customer needs, customer value fixing on factors, suppliers and
competitors, benchmark, variations on deviations between the customers expectation
and suppliers achievement and the variation between suppliers achievement and the
bench mark. There are number of direct and indirect methods of measure customer
satisfaction having their own sets of merits and demerits.
The direct Methods:
The most commonly used direct methods are- front line agencies, onetoone meeting.
complaint or appreciation letter, customer meet and customer survey.
The Indirect Methods:
The indirect methods that are most important ones, are two namely, customers complaints
and customer loyalty.
Measures of Customer Satisfaction
There are basically three measures of consumer satisfaction which are outlined as under:
1)

Customer satisfaction index: Customer Satisfaction index (CSI) is the measure of

overall satisfaction the customer is getting from the supplier in meeting his
expectations. This measure is expressed in the ratio of two variables and can be
CSI: Total marks obtained by the supplier based on customer feedback: Total
marks expected by the customer for supplier to obtain CSI helps the supplier to
trace how much he is able to come closer to meet the customers needs and
expectations. It is a performance measuring parameter by the organisations for
measuring the workforce effectiveness. Companies can also use this index for the
overall monitoring of their progress in becoming customer-centric.

40

2)

Excellence indexlCompetitive index: This is the measure of. standing of supplier

in comparison to individual best targets- bench marks- against different activities.
This also indicates the gap. which a supplier has to cover to excellence. It is
defined as:
El/Cl total marks obtained by the supplier based on customer feedback: Total
marks based on benchmark for excellence.
Like CSI. the companies can use El for overall monitoring of its progress in
actioning excellence. This factor has more relevance than CSI as it indicates
competitive edge the company has or lacks as the case may be. The business
growth or differentiality and, hence, customers preference that company can have
in the market depend on this factor. CSI is after all an expectation of the customer,
but EI/CI is a reality and it can have a definite bearing on CSI. It can actually
drive the business direction and growth of the company in the future.

3.

Bench marking: Benchmarking refers to the practice of looking to corporations

worldwide for the best practice methods followed by them and incorporating the
same suitably at the time of formulating the action plan for course of correction
based on the result of the survey. These are the companies most preferred by the
customers. A company becomes most preferred because of an attribute or bunch
of attributes. For instance, company X may he known for engineering skill,
while company Y for the service it provides. The importance of this is that there
are the highest standards achieved by different companies in different segments
but if the company wants to become globally competitive and excel then it most
set its large on exceeding these parameters. Benchmarking also helps in
assessing the gap between the company and the best in the fied. This acts mirror
to the supplier to judge his own performance in comprises to that of others in the
field.

Sources of Customer Dissatisfaction

41

Every organisation wants that its class of customers is to be one which is satisfied. That
is, consumer expectations are marked by product and service quality. However, all
customers can not be satisfied in toto. However, it is important to know as to why the
customer dissatisfaction prevails. It is obviously on account of discrepant expectations
and realisations. It is equally true that the nature of expectations is ambiguous. These
situations of ambiguity occur in different ways. These can be:
1)

Lack of experience with the existing product: Thus, when a customer is going in
for CD writer, he may not be having exact picture in mind as to what to expect.
This happens because it is his first experience or encounter in buying CD writer.

2)

The product in question may be new or an innovation: The customer may he

marketing for the first time on on-line say online banking or undergoing laser
eyesurgery.

3)

Variation in quality of service: In case of tailors all dont cut and stitch the same
style or way nor the same tailor performs the same way at different times.

4)

Absence of service while making purchasedecision: For instance while placing

orders over the telephone for in home teleshopping. the service may not be
physically preseIt.

5)

Expectations built up due to comparisons: It is usual that a product is udged in

comparison with some standard or criterian, say discription on a leaflet or use of a
similar product by ones friend or neighbour or ones own experience with a
similar product.

Level of Consumer Dissatisfaction

The levels of dissatisfaction are four as explained by experts.

42

1)

General level dissatisfaction: This kind of dissatisfaction is associated with

consumption system itself. Thus, dissatisfaction may be with the demand and
supply or LISC of goods and services. Here, dissatisfaction occurs due to the non
availability of goods and services at all places shopping system or say
dissatisfied with the choice possibilities-purchase system.

2)

Category level dissatisfaction: In such case, certain product classes may be the
cause of dissatisfaction for the customer. Say, Mr. X may be dissatisfied with
washing machines, packaged tours microwave ovens.

3)

Brand level dissatisfaction: The customer has dissatisfy over a certain brands of
manufacturer, retailers and so on. Thus, a person has dissatisfaction with say.
Shudda Salt of Nirma company. Another may not be happy with Nike shoes.

4)

Specific level dissatisfaction: This can happen with reference to services and
offers of units selling products. Mr Z may be dissatisfied with the repair service
extended to him in case of his home appliance.

Inhibiting and Facilitating Factors of Consumer Satisfaction

It pays to know and understand the dimensions of satisfaction and dissatisfaction. A
distinction between facilitators and inhibitions is quite essential because satisfaction may
have more than one dimension. Thus, too high a price may deter consumers (inhibition)
whereas a reasonable price may not stimulate them enough to purchase or accept the
product. In other case, it is unfriendly salesman who may putoff prospective buyer
while a friendly salesperson may not act as a sufficient reason for buying. However, the
manufacturers or the producers have to dispose of inhibitions and encourage facilitating
factors for the good of all.
Similarly, the presence of inhibiting and facilitating factors can influence consumer
satisfaction. Likewise, inhibiting factors cause dissatisfaction and removal of the same

43

may prevent dissatisfaction but may not create satisfaction. Facilitating factors cause
satisfaction only when inhibition is not there. The role of inhibition and facilitation is
very clear from the following diagram.

(- NEGATIVE)

(+ POSITIVE)

INHIBITION

FACILITATION

DISSATISFACTION

SATISFACTION
ZERO POINT

ROLE OF INHIBITION AND FACILITATION

A good example of dissatisfaction caused by inhibition can be that of public transport
system in any metros of India. Generally, the daily commuters are dissatisfied if their
expected bus on a particular route is late or if no vacant seats are available. However, if
this is taken for granted if the right on time and manage to get the seats. Hence, the
priority of public-transport management is to remove or do away with inhibition and not
the creation of facilitation. Take another example of airpassengers. The inconvenience
and discomfort is caused to these passengers when the staff resorts to flash strikes or go
in for goslow--tactics. These inhibition factors are causes of dissatisfaction for the
passengers. Here, facilitating factors like providing snacks or lunch at the airport is not
compensating the inhibition caused by the delay in flights. Therefore, the management in

44

above cases is to make all efforts to remove inhibiting factors so that facilitating factors
may result into positive effect.

45

Ways of Enhancing Customer Satisfaction

In the presentday business world, markets are changing their colours very fast whereby
consumer needs and expectations undergo a sudden change. This volatility of market
conditions makes the producers and marketers to keep their valuable customers by adding
value by offering products and services the way they want it. The intelligence lies is
offering a unique product to every individual customer goes in a big way in adding value
to the customer decision making process in a situation. Where the customer is to select
and choose from both large and astonishing number of options, features, price structures
and delivery modes.
It goes without saying that consumer satisfaction is a continuous process which does not
begin or end with a purchase. On the contrary, it encompasses the entire ownership
experience from selecting a product, to purchase, through after care to repeat purchase.
Very definitely, there are three phases in the customer satisfaction process namely, pre
sales, during sales and after sales periods. The customer expectations and their experience
will in combine determine the level of satisfaction. Following is the period wise
expectations.

Presale Period:

During this period, the customers expectations are developed through various
information sources like advertising word of mouth and the like. Hence, the availability
of clear and useful information on the following points is very much expected. * The
product or service. * Quality of product or service. * Core benefits or merits of products.
* Product price. * Product availability or stores outlet. * The ways to get the product or
source.

46

II

During the sales period:

It is the period when the customer is engaged in experiencing on how to deal with
enquiries and sale of products. The customer is interested in * an opportunity to inspect
the products * having an attractive sales environment * Courteous and appealing service.
* Reasonable and dependable delivery * Enhancing quality of goods or services * Prompt
redressal in case of compliant * Liberty to choose the products without undue pressure.

III.

The after sales period:

This is the period when the customer has started using the product. This expcritions
during this period are: * Support service or advice pronsion if called for .* Prompt
replacement or refund, if necessary * A simple and smooth complaint forward procedure
* Efficient repair and maintenance service * Efficient and effective consumer follow up
process.
It is evident from the above elucidation that customer satisfaction stretches beyond core
product or service offering. Hence, the marketers are to start by attempting to understand
the elements that together decide the consumer satisfaction levels only then, list the
elements in proper and logical sequence so as to identify as to what is to be done to
increase customer satisfaction level. This is possible only when the marketers design a
system that facilitates interaction with their customers. These interactions will prove
equally important as the quality of the core product or service offered by the company in
the long run. The steps that are to be taken to enhance consumer satisfaction can be:
1)

Conduct Regular Research: Regular research is a must to keep track of the

changing levels of customer satisfaction. It is market research that gives excellent

47

clues to the firm about what the present and prospective customers think of
marketers product, product competition. History is full of evidences where the
biggest companies were thrown to the winds as they totally forgotten the
customers. Thus, Colgate Pamolive having engaged highest market share upto
l970s, did not bother about consumers. Suddenly in 1980s and 1990, the
competitors made their way. Again, in 2000s has come back by remembering its
customers. What is true of Colgate is true of Ford Motor company. Regular
researches enable the marketers to keep at best of changing consumer levels. That
is why, automobile makes are mailing customer satisfaction surveys form to their
new buyers once after two months they bought the car and after eighteen months
again, they can get similar like levels of satisfaction from dealers at definite time
interval. The point is, dont sell to forget the customer.
2)

Customer Feedback: Most of the companies are endowing their customers to

give feed back and using this data as the means of maintaining their contact and
dialogue. This feed hack is about the company products and the extended
services. This goes on records nicely analysed and helps in solving the problems
faced by the consumers right in time. The feedback forms are sent to the
customers asking relevant questions as to the products/s bought, the quality of
service rendered and so on. Once the feedback is analysed. it helps in framing
marketing strategies.

3)

Add Value through Sound pricing: Perhaps pricing is very sensitive area of
marketing mix. This p has to be handled with utmost care and caution. It is the
price and pricing which will establish shortterm and longterm relation with
the customer. Customers compare product cruelty vis a vis the price. They
patronize those producers and marketers at which the high quality is maintained at
competitive prices. That is, they stay with you, in case your quality and price
standards are a perfect match as compared to your competition. What strategy or

48

method you follow is not important. What is more important is, that it adds value
to the customer.
4)

Create Distribution Equity: Shrewd marketers have realised that with greater
availability of goods which are close substitutes to competing brands, having
good distribution supply chain can actually prove to be the differentiating factor
in deciding customer value satisfaction and loyalty too. While it is easier for
companies to match product technologies and prices, it will not be easier to
duplicate an effective distribution system offering a valuechain of quality
services at the same time. Today, the companies are out to enhance customer
satisfaction and value by increasing their distribution equity by monitoring and
sustaining the quality of their product till it reaches the door step of a customer.
Thus, Videocon International has built its own fleet of carriers to move electronic
products dust free. HLL conducts two transit tests to ensure that products reach
the outlet infact and is stored securely in warehouse. Reliance petrol bunks on
highways of India provide not only diesel, petrol and parts but also supply
purified and cooled water with backed up bathroom and toilet facilities. Of late,
they are having restaurant facilities too. As the market gets tougher by brands, it is
the strong distributing equity that will determine the consumer satisfaction in the
long run.

5.

Plan Consumer Benefiting Promotions: The promotions that deliver value to

customers well help in building customer support and hence, satisfaction. The
promotions must match the needs of different types of customers. The overall
impact should be to attack and cover maximum number of customers. For those
who are brand switchers, bargain deals lure them. In case of regular buyers lower
prices in general and seasons off will work wonders. Offer lesser prices to win
their confidence that in the days of inflation you are really helping them. The
prospective customers who are postponing the purchases as is the case with
consumer durables grant them different types of discounts and relates and also

49

zero interest installment purchases. For encouraging new brand or product, give it
as a sample. Whenever it is possible in case of consumer non durables- along with
established brand. This serves two purposes of communication and the
introduction of new product. Salespromotion modes will help a lot. Since we
too are to woo consumers, consumer promotions play significant role.
6.

Develop Customer Satisfaction Oriented Culture: Every organisation should

strive to make customer satisfaction its work culture. Development of such a
culture should percolate from the top management through its initiative, thinking,
direction and action. The development of this workculture should not remain
only a lofty objective. The management has to train the employees, develop skills,
change their level of knowledge and attitude. The organisation is to ensure that its
systems on quality, performance, services and complaint redressal are designed to
achieve excellence and consumer satisfaction. System have as much role to play
is development of organisational culture as human being and their habits. In fact,
systems are to organisation what habits are to human beings.

7.

Effective Complaint Management: In spite of best efforts of the supplier in

ensuring that he supplies quality goods and provides efficient service and puts the
customer on top of his priority list, he may frustrate the customer by not coming
up to his expectatiom,. resulting in complaints. A compliant is a positive
indication that though the customer is Linsatised. he may continue to remain with
the supplier. The vendor must welcome complaints. Complaints are like early
warning systems and indicate customer dissatisfaction. If not handled properly. or
given due attention or discouraged, it may lead to loss of customer himself or
herself. If handled properly, they result in enhanced customer satisfaction and
loyalty. It may als and to the mutual understanding existing and may further
strengthen the relationship bond between the vendor and the customer. Customer
complaints bring benefits or merits to the supplier in the forms of reliable
feedback, deficiency identification, source of identifying generic defects bring

50

home customer needs and preceptions and above all a source of market trend and
behaviour. Fast and comprehensive resolution of complaints helps in growth of
business and custoier retention. It adds value to the image of the company. The
company should develop and use good complaint management system. Good
complaint management system is one which is singlewindow system,
responsive, maintains spare sorting and classifying complexes. Follow up of
complaint redressed has a time schedule, analytical base.

51

CHAPTER-3
RESEARCH
METHODOLOGY

52

STATEMENT ABOUT THE PROBLEM

The project title MARKETING STRATEGIES AND CUSTOMER

SATISFACTION

AT BARISTA describes the different strategies adopted by BARISTA to retain their

customers.
As we all know that customers are the basic requirement for running a business. Since
this is the competitive era and there is no monopoly in any sector except some industries
like nuclear power industry. So every industry wants to retain their customers. In my
project I am going to find out the different strategies adopted by the food chain to retain
their customers.

SCOPE OF THE STUDY

As the target/sample in my study is service providers as well as customers and I have

collected the data as responses from them. As the overall data consists of 500 samples
which is actually very less in respect of the huge base of the food chain industry so the
study can be done further to view the true picture. The scope of the study is that by
analyzing the responses of the customers it is quite easy to understand the current market
structure of the food chain industry market and also helps in understanding the buying
behavior of customers i.e. their preferences, taste, analyzing main reasons for visiting or
non-visiting in a particular chain. This study can also be extended to various levels like
testing of new products, services, business trends and sales forecasting etc.

SIGNIFICANCE OF THE STUDY:-

The significance of the study is that:It ascertains the position of a company in a specific industry
It indicates the present and future trends of the industry and thus points out how
the companys affairs are to be managed.

53

It helps in the development and introduction of new products and services

The distribution(home delivery ) of marketable goods
The size, nature and organizations of the sales
The demand creation activities
It helps in assessing and enhancing the effectiveness of sales management
It can reduce the risk involved in marketing decisions.

RESEARCH METHODOLOGY
There are a lot of research methodologies. Some of them are as follows: Panel research
Market survey
Research through internet
Conjoint analysis
Multi-dimensional scaling
Qualitative research
But the research methodology chosen by me is Survey Method.
The purpose of the methodology section in the report making is to describe
research process that is followed while doing the main portion. This would
however include the research design, sampling, procedure and data collection
method. The methodology followed by the researcher (myself), during the
preparation of the report will be:
Primary data
Secondary data

54

Primary data:
Primary data is the data which is collected by the investigator himself for a specific study.
The primary data is generally original in nature. An investigator has to visit the market to
get the primary data.

Secondary data:When an investigator uses the data that has bee already collected by others is called
secondary data. The secondary data are collected from journals, reports, newspapers,
internet, books, magazines and various other sources.
About The Research Methodology
Data sources

Primary and secondary sources both

Research approach

Survey method

Research instrument

Questionnaire

Type of questions

Open ended

Sample size

100 samples (approx)

Mode of collection of data

Respondents to be chosen randomly

Duration of the project

2 months (approx)

55

LIMITATIONS OF THE STUDY

1. Though utmost care will be taken yet chances of biasness couldnt be avoided.
2. The no. of people to be contacted for this research is very small. This can be a very
big limitation and the results maynt be very authentic but to a very extent can give
the general idea.
3. The Domain in which the survey is conducted is not big enough to cover all the
category of customers.
4. Since the study is undertaken for a short period, so time is biggest constraints.

56

CHAPTER 4
DATA ANALYSIS &
INTERPRETATION

57

Q1. HOW OFTEN DO YOU VISIT BARISTA?

Interpretation- Most of the customers visit Barista 2-3 times in a month. 27%
respondents visit 2-3 times a week. 6% remaining customers visit Barista either almost
daily or not often. This data shows that in Delhi most of the customers visit Barista only
on holidays.

58

Q2. HOW MANY PEOPLE DO YOU USUALLY GO WITH?

Interpretation- Most of the customers visit with one person, It shows that in Delhi
customers are not spending too much money on food chain. Only 8% are going with
more than two persons.

59

Q3. HOW MUCH TIME DO YOU SPEND AT BARISTA?

Interpretation- As we can see that 73% of customers spends more than 30mins at
Barista. It shows that the internal ambience of Barista is excellent which is one of its
major marketing strategies to sustain in present competitive scenario.

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Q4. HOW MUCH MONEY DO YOU USUALLY SPEND AT BARISTA?

Interpretation- Most of the customers in Delhi when they visit Barista, they are bound
to spend at least some money due to its specialty in beverages. It shows that the
beverages served at Barista are very delicious.

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Q5. HOW MUCH TIME BARISTA TAKE TO SERVE MENU CARD?

Interpretation- The graph shows that most of the customers get menu card with in 10
minutes. It shows that excellent service marketing by Barista.

62

Q6. HOW MUCH TIME BARISTA TAKE TO SERVE THE ORDER?

Interpretation- Most of the customers are getting their ordered food in 15-20 minutes
which shows the promptness of service of Barista.

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Q7. WHAT IS THE MOST IMPORTANT FACTOR FOR YOU TO CHOOSE

BARISTA?

Interpretation- Most of the customers likes taste of food and Beverages at Barista. So it
is an Important factor for food chain to survive in competitive market.

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Q8. WHICH ITEM DO YOU LIKE MOST IN THE MENU OF BARISTA?

Interpretation- Most of the customers likes the taste of coffee of Barista. It shows that in
Delhi people like coffee than any other drink.

65

Q9. WHICH PART OF STAFF SERVICE PROVIDED BY BARISTA YOU LIKE

MOST?

\
Interpretation- Most of the customers in Delhi wants a well mannered staff at food
chain. So psychology of customers in Delhi is that they are very pleased with mannered
staff.

66

Q10. HOW WOULD YOU RATE THE VALUE FOR THE PRICE PAID AT
BARISTA?

Interpretation- Most of the customers are well satisfied with the value for price paid at
Barista.

67

Q11. WHICH PART OF AMBIENCE DO YOU LIKE MOST AT BARISTA?

Interpretation- Most of the customers likes furniture and decoration at Barista. So

internal ambience is an important factor for a food chain.

68

Q12. HOW WOULD YOU RATE THE OVERALL PERFORMANCE OF

BARISTA?

Interpretation- The graph shows that Barista is going to grab maximum customer
satisfaction by providing various services.

69

CHAPTER 5
FINDINGS
&
CONLUSIONS

70

 5.1 FINDINGS
The FIA has released more information about its court of appeals decision to reject
Barista appeal against Daniel Ricciardos disqualification from the Australian Grand Prix.

After a hearing took place on Monday, it was confirmed on Tuesday morning that the
stewards initial decision had been upheld after the team was adjudged to have exceeded
the maximum allowed fuel flow of 100kg/h on Ricciardos car. Despite finishing second
on track, the Australian driver was excluded five hours later.

Barista stringently denied that it had done anything wrong, claiming that the problem lay
with the FIAs measurements. The team had instead opted to use its own fuel flow meter,
which apparently proved that Ricciardo had remained under the limit during the race.

Interestingly, the FIAs full report suggests that even Red Bulls own measurements
showed that the car exceeded the limit despite the team arguing the opposite.

The FIA [says] that the appellants [Red Bull] own estimation of its car #3s fuel flow
rate in Melbourne also showed that the car exceeded the the fuel flow limit during the
Australian Grand Prix, one part of the report reads.

Furthermore, the information supplied by Barista was far from reliable.

The appellants measurement method is not based on physical means but purely on a
software model that depends on input data, which cannot be checked by the FIA.

71

The appellants data do not show all the relevant variables, and the four variables shown
by the Appellant in order to validate its measurement method are not even equal.
Despite its highly vocal argument heading into the hearing, Barista has accepted the
decision of the FIA and decided to move on from the matter, turning focus to this
weekends Chinese Grand Prix.

5.2

CONCLUSION

We hereby conclude that Barista is the market leader among all the other coffee houses.
Our research shows that it is still in the growth stage, since India consists of a majority of
tea drinkers. Barista is trying major schemes to attract consumers by lowering their prices
and by offering new coffees in their menu and has so far met with a fair degree of
success.

72

CHAPTER 6
SUGGESTIONS
&
RECOMMENDATIONS

73

5.2

RECOMMENDATIONS
They should start loyalty cards schemes so that after a certain number of
purchases the customer can get incentives. This would promote customer loyalty
(as the old customers are getting rewards for continued patronage) and new
customers would like to avail of these privileges and hence, would frequently visit
the outlet.

They should start outlets, kiosks and vending machines on the lines of
Georgia, that are open for 24 hours at places at call centers and offices with night
shift. Coffee is a popular beverage with the night shift professionals and with an
ambience like Baristas it also gives them a place to hangout and socialize on their
coffee break times (since it is not possible to venture outside for a social outing at
that time of the day)

Their range of quick bites, comprising sandwiches, pastries and rolls, is not
that popular. The variety is also minimal. This particular range of products needs
some revamping and image building. Also, the products need to be altered slightly
with respect to the Indian taste (like McDonalds has successfully managed to do).
Currently, the food items have a slightly European inclination as far taste is
concened.

They should undertake in establishing more personal contact like sending

customers personal greetings etc so that they have a feeling of belongingness
towards Barista. Pizza Hut and Dominos maintains a database of the birthdays
and anniversaries of their regular customers; and sends them a gift voucher that
entitles them to a discount on their next visit to the outlet. This not only enables
building a lasting relationship with the customer but also results in favourable
word of mouth publicity and increased visits to the outlet.

74

They can enter into contracts & agreements with coffee plantation owners, so
as to overcome supply bottlenecks. Backward integration of this sort brings the
company closer to the source of supply and becomes an effective competitive
strategy for the company. It helps in ironing out potential long term fluctuations in
supply. Besides, it is an effective entry barrier to overcome the threat of new
entrants.

Similar contracts can be entered into with real estate firms and agents so that
competition can be thwarted. Caf Coffee Day undertakes a similar strategy
wherein it enters into a contract with real estate agents and property dealers to
overcome space restrictions and setting up new premises.

Strategic alliances can be entered into with schools and colleges where the
target population (below 19 29 year olds with high disposable income) is high.
They can target upmarket schools and set up stands in their cafes, and canteens.
They could truncate their product line for the school and instead of offering the
entire range, could focus only a select few popular items like caf latte, iced
coffee, sandwiches and muffins. This is a low cost way to reach the target
customer without expanding too much on the product range and attracting
customers from areas where the target population is abundant.

75

BIBLIOGRAPHY

Aaker, David, Building Strong Brands ,The Free Press, Printed in the United
States Of America, Year 1996. 91

Aaker, David, Strategic Brand Management ,Prentice Hall, Printed in the

United States Of America, Year 1989. Crainer,Stuart, The Real Power Of
Brands ,PITMAN Publishing, Printed in Great Britain, Year 1995.

Kothari,C.R., Research Methodology ,WISHWA PRAKASHAN Publishing,

Printed in India,Bangalore, Year 1998.

Kotler,Philip, Marketing Management,Ninth Edition , Prentice Hall, Printed in

India, Year 1999.

Toshowe, Stanley, The Marketing Review Caf Retail, The India chapter,
Volume86,Number 336 ,Jan2005,page-36.

www.cafecoffeeday.com - Search engines Case Study

www.barista.co.in- Search engines Case Study

76

ANNEXURE
QUESTIONNAIRE
Personal Detail
Name
Age
Occupation
Email-id
Postal Address
Contact No.
Q1. How often do you visit Barista?
Almost daily

2-3 times a week

2-3 times a month

Not Often

Q2. How many people do you usually go with?

Alone

With one Person

With two Person

More than two Person

Q3. How much time do you spend at Barista?

Less than 30 min

30-60 min

60-90 min

more than 90 min

Q4. How much money do you usually spend at Barista?

50-100 Rs.

100-150 Rs.

150-200 Rs.

More than 200 Rs.

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Q5. How much time Barista take to serve menu card?

Less than 3 min

3-5 min

5-10 min

more then 10 min

Q6. How much time Barista take to serve the order?

Less than 10 min

10-15 min

15-20 min

more than 20 min

Q7. What is the most important factor for you to choose Barista?
Taste of Food & Beverages

People service

Value for money

Ambience

Q8. Which item do you like most in the menu of Barista?

Coffee

Other Drinks

Eatables

Desserts

78

Q9. Which part of service provided by Barista you like most?

Behavior of staff

Manners of staff

Helpfulness of staff

Courtesy of staff

Q10. How would you rate the value for the price paid at Barista?
Excellent

Good

Average

Poor

Q11. Which part of ambience do you like most at Barista?

Furniture & Decor

Color & Lighting

Comfort and Feel

Other entertainment

Music etc.)

Q12. How would you rate the overall performance of Barista?

Excellent

Good

Average

Poor

79

(TV,