The Group President - Marketing of Coffee Day Group speaks about the chain’s focus on giving consumers a deeper experience in the café food space and the continued targetting of the youth TG
Jagadeesh Krishnamurthy | Mumbai | April 27, 2015
Café Coffee Day has carved a niche for itself among the youth TG. The café chain today faces some stiff competition from Starbucks. The other players in the market include Barista Coffee and Costa Coffee. While cafés are great get-together spots, consumption of the fare on the menu do not necessarily translate into high sales compared to quick service restaurants or fine dining places.
In conversation with BestMediaInfo, Bidisha Nagaraj, Group President - Marketing of Coffee Day Group, talks about of the café chain business, the shift from being a coffee company to an experience company and more.
This is your second innings with Café Coffee Day (CCD). How has the market changed since your previous outing? What are the new sets of challenges that you currently face?
In the last five years, there has been a lot of interesting movements in not just the café industry, but in the overall space where consumers have an opportunity to hang out. There have been a lot of changes in the food industry, especially with lots of options for consumers than it was five years back. So, lots of positive changes for the consumers.
When the consumers walk into our cafés today, they are much more informed. While we were pioneers to create the café culture and even cappuccinos, at that time we educated the consumers about the different types of coffees and differentiated experiences. Today, when the consumers walk in, it is very good because that bit of education has been done, and probably they are getting their education from others as well. It is also very good that our core tenet of providing greater value to consumers remain. We haven’t budged on that parameter. We haven’t suddenly become a brand that is out of reach from a value standpoint.
A challenge that we are trying to work hard at, is as a café trying to remain more relevant to the consumers today. Because, what the consumer sought from CCD nine years ago is different from what the youth of today is seeking. And, that’s why when you look at the environment, it is very different from what it was when we started out. So, the biggest challenge is how we stay relevant to our core proposition as far as today’s youth is concerned.
Could you take us through the evolution of CCD’s branding and café experience over the years?
We started off with a cyber café cum coffee shop. Then we realised that our expertise is in the making of coffee. So, we decided to focus only on coffee and figured out experiences and things around coffee. Then we moved to a stage where we realised that coffee is just fuelling conversations, and people are coming to the cafés to hang out, and coffee was just a part of their experience. That’s when we started building on their other experiences. We started looking at creating better experiences across food, reading, furniture, etc. Today, we have hit a milestone, where we are looking at beyond giving them the coffee experience. From a tangible standpoint, we are looking at redefining the café food.
Has your core TG changed over the years?
Our core TG hasn’t changed. It continues to be the youth, spread across age groups of 16-24 years. That hasn’t changed. Therefore, the challenge for us is to stay relevant to that age group.
What are the significant changes that you have observed about this particular TG vis-à-vis the youth of early 2000s?
Internet has played a huge role in changing their expectations from a café, the experience and the service at a café. They are a lot more of, what I would say, low tolerance consumer. If they don’t get what they seek to get, it is very difficult to get them to stick to the brand. Because of the choices available, they are not going to give you a second chance. Today, consumers are not brand conscious as they were many years ago. They are open to experimentation and different formats. Because of that if you look at our cafés, while we have the same brand language, our cafés look different. That’s because the consumer doesn’t like a cookie-cutter kind of approach. They have gone beyond that.
Is the emphasis on this core TG alienating the audience that grew up with your brand?
We are not losing out. Every brand has to anchor at some target audience, and that’s youth for us. We made a brand choice 19 years back that the business that we are in is a business that fulfils the need gap of the youth. Older TGs have different places to hang out, like at work or five star restaurants, but the youth doesn’t have these options.
With so much competition around, how does Café Coffee Day position itself?
We look at ourselves to be beyond just a coffee company, and are an experience company. When people walk into a café, coffee is just a fuel for conversations. If they want just a cup of coffee, they would go to a regular local Udupi joint, but they are coming here for the experience. So, I don’t want to bracket ourselves as a coffee company. We are beyond that. We are a company that offers experiences, and are defining the framework of these experiences. In that definition, we have our café food and comfortable and ergonomically designed furniture that we bring across 210 cities and over 1,400 stores. We are consistent.
What we are very conscious of is that if we have to get the consumer to keep coming every day, we have to be value conscious. You cannot expect a youth to carry copious amounts of money every month. Their entire pocket money is measured and we always want to be a part of that.
What are the marketing and communication challenges that you face while handling close to 1,500 stores across the country?
There are several. One is with the product itself. When we launch a product, it may or may not be relevant for the city because the taste buds are different. And, we try to address that. Chennai customers are very different to a Delhi or Kolkata customer. When we develop new products, we try and take the lowest common denominator that will work across the country. Another important thing is pricing. In bigger cities, there are different types of localities. We believe that we need to address the consumer in that locality, and that’s why we have differentiated pricing. Number three is the way we reach consumers in the top seven cities vis-à-vis others. The tactical solution to what appeals to a Bhopal consumer cannot be the same for a consumer in another city.
Following the first TVC from CCD in December 2012, we haven’t seen the brand on television. What stopped you from going on TV post that?
It is not staying away. We did that campaign not because of any specific challenges, but we believed that after so many years we wanted to remind our consumers about our relevancy in their lives. We wanted to remind them about the brand that we were, and all the different experiences that one can have with us. It was all about the experiences. After that, we have been in mass media. But, that’s restricted to product launches. Right now, we have Summer Slam. Television makes a lot of sense when we go pan-India. With our product launches, again to stay relevant to the consumer and regions, we try and do relevant products to that region. So, it doesn’t make any sense spending money where there is a lot of spill-over to markets where the product is not launched.
What are the challenges in taking CCD’s offline experience online?
Tremendously, as CCD is an offline brand and our youth is mainly on digital. It is imperative that we connect with them and engage with them. So, we use different social medium forms to connect with them. We engage them on Facebook, Twitter, Instagram, Vine, etc.
Could you elaborate a bit more on the on-going ‘Summer Slam’ campaign on the digital front?
We are getting the customers to play a slam game, where they can play a jackpot like game to win offers that can be redeemed at the stores. So, instead of just giving out the offers, we are engaging with the customers.
We would also be doing this interesting offer, called ‘Weather Check’. Depending on the weather in that city on that particular day, one could get a discount for that amount between 12 pm and 2 pm.
What are the milestones in place for CCD in the coming years?
From the milestone standpoint, we are going to continue with our efforts on experience, become absolutely intolerant on bad experiences; our cafés are going to look a lot more different. We are going to provide deeper engagement to the consumer by understanding them a lot better, where we are doing a big initiative through CRM, in hopefully two years, where we will know every single consumer by their name, preference and preferred time of visit. Third and most importantly, we want to give our consumers a deeper experience in the café food space.