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PROJECT PROPOSAL
Akshay Jadhao,
Indian Institute of Management, Kozhikode
PROJECT PROPOSAL
RESEARCH QUESTION: To check the feasibility of opening a Caf Coffee Day (CCD) in
Kunnamangalam, Calicut, Kerala (India)
INTRODUCTION
As per the research done by KPMG (KPMG Report on Consumer Market, 2005) on the
consumer markets in India, greatest potential for growth opportunity in the organized retail
sector is in the food and beverage sector. Its projected that food and beverage retailing will
grow at 9.2 percent over the next five years against a total GDP growth rate of around 7
percent.
An important factor to be considered is the changing pattern of spending by the Indian
consumer. There is growth in the disposable incomes and as a result the markets are changing
fast and are leading to more urbanization kind of lifestyles. India as a market is more relevant
because of the demographic advantage it has over other economies. As a result here young
working populations drive personal consumption. The rise in coffee drinking is part of the
transition to more branded consumption in India, and is led by the growth of branded coffee
caf chains such as Barista, Caf Coffee Day and Qwikys.
STRATEGIC CHANGES IN POSITIONING
As per research done by Harish Bijoor Consultants (Balasubramanyam, 2010), in India CCD
are having about 70% of all coffee outlets. But according to Bijoor though the consumption
demand in India is not very high as compared to US or European countries, but it still
exceeds the supply. In his words, If CCD can add another 1,000 cafs in India over the next
three years, it is going to be invincible and will see partnership opportunities in overseas
markets coming its way (Balasubramanyam, 2010)
Healthy battle has been brewed among the coffee retails in India. The main competitor
Barista has started radical experiments with food in its outlet with success. So CCD has also
turned its focus towards more food items in its outlet .CCD started as a coffee center which
will provide both well-brewed coffee and Internet access .Now it is trying to energize and
stratify its brand. The branding overhaulnew logo, new cup and crockery designs, new wall
paint and, even, coffee machines that produce better brewed coffeeis starting in Bangalore
and will soon spread to other cities. As a strategy to reduce operational cost and maximize
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profit, CCD concentrates on opening its new outlets only in cities where it can open a number
of outlets.
SYNTHESIS AND APPLICATION (Research done on CCD)
As per the research conducted by Mr S. Ramesh Kumar in his book Consumer Behaviour
and Branding: Concepts, Readings And Cases-The Indian Context, CCD projects coffee
with the special coffee experience in the luxurious outlets which arouse the sense of
Pleasure seeking. This is reinforced by the research conducted by Ms Richa Agarwal
(Agrawal Richa, 2009) which asked the respondents to consider CCD as a person and come
up with the various characteristics they associate with that person using the projective
technique. They came up with characteristics like young, fashionable, sophisticated,
lively. Even some older people are attracted towards CCD because of CCDs young
generation orientation (youth element) .Loyal customers are delighted by positive reward
associated with product and service. The research findings can be classified under the
following heads:
Entry Barrier: CCD uses cluster approach to raise the entry barriers for the competitors or
new entrants in a particular geographic region. It is done by setting up many outlets in a
particular city. This supports our research objective of opening another CCD in
Kunnamangalam, Calicut as there are already other CCDs established here.
Culture Diversity Advantage: The beverage preferences of North Indians and South Indians
is very different. It was observed that North Indians prefer Tea while South Indians coffee as
it part of their culture. Thus, this reinforces our research objective of studying the feasibility
of opening a CCD in the city of Calicut in South India.
Success secret: CCD has the strongest point that even if coffee is a old age drink CCD has
marketed itself successfully in youth markets of metro cities and associated itself with
relaxation and socialising. Thats why people prefer this place more often after their home or
office. This would be continued in the new CCD also, for which this research is conducted.
Also, other findings of the research conducted (Agrawal Richa, 2009) included that the
highest footfalls (more than 80%) at various CCD outlets came from the customers belonging
to the demographic breakup of 15-29 years. Thus they realised the need to appeal to the
Another key finding of the survey was that people preferred table service over self-service
and thus table service was introduced at all CCD outlets instead of self-service. Also,
customers preferred food along with their coffee, so they also began to serve light meal
reparations, such as pasta and biryani as accompaniments with coffee. They extended the
CCD brand to cookies, wafers, mints, and other merchandise which were available only at
their outlets They also have a variety of caf formats such as lounge cafs, garden cafs,
music cafs, book cafs, highway cafs, cyber cafs and sports cafs . These were mainly
introduced to redefine the caf experience. These options will also be considered in the
research and will be incorporated in the new CCD according to the preferences of the
demographics.
From the article by Ellen Mermelstein (Mermelstein & abu-shalback, 2006) we see that how
the taste of Americans towards high quality coffee has evolved over the years. This could be
attributed to so many world renowned coffee outlets like Starbucks, Dunkin Donuts Inc. If
this trend replicates in India then coffee consumption and number of customers are expected
to grow for CCD. This would further increase our market and thus support our research
objective.
From the article in Journal of Foodservice (Moskowitz & Katz, 2007), we find that
innovation in coffee flavours in necessary to increase footfalls (and hence feasibility of
opening a new outlet), and they should be decided based on the preferences of the consumers
of that area.
In order to identify which attributes affect a consumers judgement process, we will be using
components of cue valuation and cue integration which are defined by researchers of social
psychology as: Cue valuation, how one interprets and uses the cues for judgment, and b)
cue integration, how one combines these interpreted cues for judgment (Park 1974)
These can be used for data analysis, once the data has been collected.
Consider an example attributes of coffee; say if you have a scale which rates the service
quality and proximity to office/home on a scale of 5 ranging from extremely important to
extremely unimportant, then the relation can either be compensatory i.e. an extreme of one
attribute may make up for the deficiency of other or the relation can be non-compensatory
such that the deficiency of one attribute may be sufficient to reject the product/brand. Similar
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The reason behind dividing the population based on work experience was based on the
following assumption
1. Both groups will have different spending and consumption pattern
2. The prior experience will be different for both the groups
We analyzed the population and found out that the ratio of fresher to work experience
students is 25:40. So the sample that well be taking will be having proportionate number
of fresher and work experience students.
4. Sampling size: 150 students (a convenient number chosen so that there will be
enough responses to do the data analysis)
5. Execution of Sampling process:
From the stratum of fresher we will be selecting 60 students and from the stratum
consisting of work experience students 90 students will be randomly selected. Generate a
between 1- 10. If the random number is an odd one we will consider the student from
PGP13 and if the random number is an even one then PGP14 database will be referred.
Again generate a random number between 1- 320. Find the student having the same roll
number as the random number and check his/her experience. If the work experience is
more than 1 year put him/her in the stratum of work experienced student, else in the
fresher stratum. The process will continue until the quota of 90 for work experience
students and 60 for fresher is achieved.
Measurement and scaling
The scales used vary from nominal, ordinal to interval scales. We have used balanced and
odd scales in case of the 5-point Likert scale to ensure unbiased and accurate results.
The questions have been designed to ensure construct and content validity.
Environment:
1. Comfortable in AC room
2. Seated in circular seating
The order of seating counter clockwise: 1.Akshay, 2.Manikandan, 3.Heeral, 4. Kavya
, 5.Vardhan
3. Minutes of meeting noted
Moderator:
1. Name: Nila Lohita
2. Pre-determined questions are asked
3. Moderator also took the role of taking the MOM.
Interview
MOM: (9.15 pm 22-01-2010)
Moderator: Hello everyone. Im Mr. Neil. We are here to discuss about young peoples
preference for multiplex in your lovely city of Calicut. So the results will be used by CCD to
see the attractiveness of the shop outlet in Calicut. You are selected as you guys fall under the
age group of 20-25 and you are all working people and most importantly residents of Calicut.
So your views are going to give good inputs on the subject matter. My role here is to guide
the discussion. Please refer to each other by their first name.
Moderator asked the following questions:
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1.
2.
How many of you have visited a CCD before, please raise your hands?
Response: All hands rose.
3. How do you rate your experience of going to the CCD in Calicut on a scale of 5?
Response: Akshay-4, Manikandan-4, Heeral-2, Kavya-4.5 ,Vardhan-4
4. Why do you rate so low Heeral?
Response:
5. Can you elaborate further on why CCD doesnt work for you Heeral?
Response:
CCD charges exhorbitant price. About 5 to 10 times what you pay for snacks or filter
coffee. Its also very far from hostel. As I dont own a vehicle have to hire an auto to
go to city. So cant go to city for CCD exclusively.One of the CCDs is near a
hospital. I dont like the location.
6.
Good crowd
Clean
7. Do you want any more services that should be provided in CCD than what you got so
far?
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Parking space
karaoke
8. Will your average spending increase if one or more extra services are provided?
Response: all raised hands.
9. How many of you think the CCDs in Calicut is too far for their comfort?
Response: all raised hands.
10. Would your frequency of going to CCD increase if CCD outlet is opened in
Kunnamangalam, raise hands?
Response: all raised hands.
11. Where would you want your CCD to be , in kunnamangalam?
Response: (in order of seating)
No preference
12. Last question, would you switch to CCD from other coffee shops if you have one here
in Kunnamangalam?
Response: 5 out of 5 hands rose.
Finally a synthesis of the behavioural and attitudinal aspects of FGD is to be done to get the
accurate insights. After setting the actionable priorities we can obtain the optimal result at the
end of whole process of Market Research on the basis of data obtained from FGD.
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REFERENCES
1) KPMG Ltd., Consumer Market:Consumer markets in India- Next big thing?,2005, p1-21
2) Balasubramanyam K. R., Business Today, 5/16/2010, Vol. 19 Issue 10, p38-47
3) S. Ramesh Kumar (IIM, Bangalore), Consumer Behaviour And Branding: Concepts,
Readings And Cases-The Indian Context, Pearson Publication, p76-77, p124
4) Agrawal Richa, Marketing Review(Caf Coffee Day), Fall2009, Vol. 9 Issue 3, p251-271,
21p
5) Mermelstein, Ellen; abu-shalback zid, Linda. Marketing Management, May/Jun2006, Vol.
15 Issue 3, p4-4
6) Moskowitz, Howard; Katz, Rachel; Krieger, Bert; Cappuccio, Roberto. Journal of
Foodservice, Feb2007, Vol. 18 Issue 1, p7-22, 16p
7) Park C. Whan, Journal of Marketing Research (JMR), May78, Vol. 15 Issue 2, p243-249,
7p
8) Naresh Malhotra, Marketing Research (An applied orientation), Pearson Publication, e/6,
p109
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