The cafe scene has contributed greatly to the changing urban landscape in India and today consumers are spoilt for choices for their daily brew. One brand at the forefront of this scene is Cafe Coffee Day. K Ramakrishnan, President – Marketing, Cafe Coffee Day, shares its expansion plans and how the brand remains relevant by listening to the youth and co-creating products with the help of social media
Q] You are back with your second TVC campaign.How are you looking to build on the earlier proposition of ‘Sit Down’?
A study done last year showed us that in the top seven metros, only 46% of people in the age group of 17 to 35 years and among Sec A and B had ever been to a cafe. There were many reasons why the rest had not been to a cafe, which ranged from ‘it’s frivolous’, ‘too expensive’ and ‘not having products which can be consumed all-day’. We tried to cover the first few perceptions in our first campaign ‘Sit Down’ last year. Any-day consumption is a product development idea and from there we created products which can be consumed throughout the day, like chilli cheese toast, egg wrap and crunchy frappe. These products have been successful so far, and we needed to take it to a larger audience. That’s why our new TVCs highlight them.
Q] Have you been able to correct the perception that cafes are expensive?
It is a slow process, but there has been a positive move. It was written about and discussed on socialmedia. It definitely built the walk-ins in our cafes for sure but there is still a long way to go.
Q] Besides CCD cafés, the brand has extended into the premium segment with the Lounge and Square. Does your communication vary for all three formats?
Communication for Lounge and Square is restricted to regional activation and localised store marketing from within the café itself or through direct means and word-of-mouth. We don’t do upselling in our outlets. Mass media is meant to attract a larger audience for the mainstay cafe. This is where the differentiation comes in. The Lounge is for people looking for something different, the offering is different but they are consumers who consume both offerings but for different needs. If they want to network they would prefer a Lounge, to make an impression they would take guests to the Square and they might opt for a café when they want to casually hang out with friends. We are very clear that the consumer has to come and decide what best suits them.
Q] You are very close to touching the milestone of 4 million fans on Facebook. How have you managed to be proactive on social media?
The most important thing we have done on social media is the concept of co-creation and all our products have been created with inputs from this platform. For instance, when it came to improving our menu, we brainstormed on some ideas based on inputs from social media. We then created concepts and put them to vote on social media. Post this, we filtered the votes till we finally came down to the final product. We then invite some of our social media fans to come and experience the product, taste it and give their feedback. After this we formulise the product, get it into production and launch it in the cafes. We have factored in social media into our marketing plans almost entirely as a part of co-creating a brand itself.
Besides this, social media is an effective listening tool. We take in what is discussed about our brand and cafés, very seriously. We also use this medium as a means to communicate what is new, and to understand what are the interests and trending topics of discussion among our clients. With staff in over 1,500 locations, there’s a possibility of a let-down and you get to know of this immediately; so social media really helps us be on our toes constantly.
Q] What will be your focus going ahead — small-formatstores or large-format stores?
Typically, a café is anywhere between 700–1,000 sq ft, a Lounge a little over 1,250 sq ft, and for a Square, we look for a little over 1,500 sq ft. Our strategy and our way forward will be driven more by consumers rather than competition, so we are not looking at somebody and changing anything. We are at 1,550 cafés and want to reach 2,000 before the end of 2015.This number will be a mix of small and large stores, a combination of Cafes, Lounges and Squares.
Q] With increased competition frominternational giants, what are you doing to stand out in this coffee chain clutter?
We are continuing to do what we have always done — be a brand that is accessible to everyone and represent every segment in the market. We are reaching people who consumer coffee on the go through our Coffee Day Xpress format, the youth through our regular cafes, corporates through the Lounge and aficionados through the Square. We would like to take credit for most of the change in coffee consumption that has happened in India. However, we believe that the entry of more players will grow the market and as we continue to provide great products and services to our consumers, we will continue to grow with the category too.
Q] Will metros drive your expansion plans or will the focus shift to smaller cities?
We are present in nearly 220 towns, though a large number of our stores are in the top 10 cities. We believe that there is still a lot of room in the larger cities. The per capita consumption of coffee in India is 82 g compared to 4 kg in the US and 4.8 kg in Brazil, so from a coffee perspective there is plenty of room to grow. From a town perspective, all the brands put together have not crossed 230 towns. My sense is that India has about 5,500 towns, but today people neither have the time or energy to travel distances or to hang out in coffee shops; so our stores should be present close to the customer at all times, just down the street or “at a street’s length”.
Q] What challenges do you face currently and how are you tackling them?
Like any retail business, real estate is a big challenge, especially getting the right spot at the right price. As we open around 20 cafés a month, we have to get people to work, train them and provide them with growth opportunities, which is very challenging. Inflow of customers and walk-ins through the day is a concern as there are parts of the day when the cafe is full but others when it is empty. While we want to expand and the consumers want us to be present in all kinds of towns, we need to have the right supply chain infrastructure to be able to deliver high quality beverages and food day in and day out to various cities.
Q] Can you share a memorable experience while working with CCD?
We were talking to a few youngsters in a CCD café about the changes we were implementing and the response we got was, ‘Who gave you the authority to change our brand?’ The reaction shocked us — we realised that this brand is actually owned by the youth of India and they are the ones who will shape and drive change. We also learnt how careful we must be when it comes to the brand and its communication, because it reflects the tastes and preferences of the youth.
Feedback: simran.sabherwal@exchange4media.com
