Company overview of Indian coffee business

attach to overview of Indian coffee businessThis case study analyses and discusses the Indian fraternity Caf cocoa daytime, its merchandise Mix and entry mode to the UK. My research aims to explore the caf coffee days background, merchandiseplaceing mix, and the success strategies in India in addition to motley kinds of outside(a) environmental factors and grocery store entry mode to enter in the UK market. The questions of why and how to enter in the UK market be illustrated with different market entry modes. It is found that the UK market is ease to enter for business. I comp ared the companys market mix and UKs marketing environment. I presented some recommendation to the successful Indian organization that minimum international experience for building its charisma in the UK.This case study is illustrates a trusted and well jockeyn coffee house brand Caf java day, and how it is potential for this to venture into one of the largest economy in the European zone , The coupled kingdom. This case study describes the various marketing mix of this organization, the marketing environment of UK and the assertable entry modes.Caf coffee tree Day in IndiaCaf umber Day (CCD) is one of the well established company and heart throb of youths in India. The headquarter is situated in Chikkamagaluru, Karnataka its a division of Amalgamated Bean umber Trading Company Ltd. CCD opened its first coffee shop in the year 1996 on the socially frequented stadium called Brigade Road which is located in the heart of Bangalore, now it has become the biggest retail chain of cafs in India, having more than 1000 cafes in 141 cities. Caf drinking chocolate Day stands out as a unique brand in India and has managed to achieve the tag of Most Trusted Brand ranking it self as minute of arc in a survey for food services conducted in 2008. Nowadays CCD plans to create big worldwide chain by 2012-2013(Caf deep brown Day authorised website 2010). eon expanding the busines s in India, CCDs marketing strategy is to open a caf close to to educational institution and corporate campuses. CCD already placeed to explore European market they made their present to open coffee shops in Vienna. Caf coffee day is having various kinds of formats depending on the target audience.Caf Coffee Day TriviaCDocuments and SettingsRanjeetDesktopccd_table1.JPG (Source website CCD Coffee Day website 2010)Caf Coffee Day FormatsCDocuments and SettingsRanjeetDesktopccd_table2.JPG(Source website CCD Coffee Day website 2010)United KingdomUnited Kingdom has the sixth largest economy in the world and stands uplifted in list of developed countries in the European Union. UK is the home of world famous education institutes and corporate houses. Central Intelligence Agencys cites that the population of UK is 62,348,447 (July 2010), and the real gross domestic product of the country is -5% (2009 est.). The annual report of World Bank declared that United Kingdom is ranked 4 out of 183 economies for ease of doing business. While choosing the UK market Caf Coffee Day postulate to analysis the international marketing environments (CIA world factbook 2010).International Market milieuBrassington Pettit, (2006) argues age taking the decision to pursue international development, the company has to investigate following environmental factors.Socio cultural EnvironmentCultural factorsLanguage FactorsThe UK population speaks various languages according to the realm, Although English is the national language but CCD needs to consider Scot, Scot Gaelic, Welsh, Irish and Cornish languages as well.ReligionCIA world factbook categorized religions in The UK (2001 census)(Source CIA FactBook Website)Social factorsDemographic factors and lifestyle plays very important role. According to MSI various sectors of the fast food market appeal to different age groups as a result the age profile of the UK population is signifi lavt factor change the demand. The urbanization of U K population is 0.5% the annual rate of change from 2005-10 and in year 2010 the population growth rate is 0.563 % (CIA World factbook).Legal EnvironmentThe UK legal organisation has early influences of roman and modern continental practices of law has guidelines for the Acts of Parliament under the Human Rights Act of 1998 which cave in a non binding review of judicial personality accepts compulsory ICJ jurisdiction with reservations (CIA World factbook)International LawsThe United Kingdom comes under European countrys laws and regulations, and Indian and UK participation organization like IFC, ICC etc.Technological EnvironmentThe UK is technologically advanced than the India and having wide range of internet, telephone, and mobile network.Economic EnvironmentThe UK is a leading trading power and financial centre. In India CCD does not have any rules of minimum wages but while entering in United Kingdom, Company needs to give consideration to minimum wage rule, rising prices ra te, unemployment rate and household income .Political EnvironmentPolitical and legal factors plays an imperative role in this industry, these factors sets the rule of competition, operational cost and wages. Following tear downs should consider while entering in the UK.Operational restrictionsDiscriminatory restrictionPhysical actionsMarketing Mix of Caf Coffee DayThe age old marketing mix, consisting of the 4Ps i.e1.Product2.Price3. Place4. advanceHowever CCD offering infrastructure, facilities, staffs, and the process from ordering the product to delivering it. This is the reason makes us to consider People, Physical evidence and Process (Brassington Pettit, 2006, P. 1063).ProductsFood(Source official website of CCD)Beverages(Source official website of CCD)Caf Coffee Day is offering various ranges of products, some of them already exist in UK market. The Caf Coffee Day adopts a product managing hindsight to distinguish each of its unique cafe which are exhibited under an umbr ella of products and those can be different as per the spot. For example we can introduce Masala Chai and Kashmiri Qahwah to Indian populated area.PriceWhile considering the price mix for UK market, CCD needs to consider various factors which can play the vital role to influence the pricing strategy.Factors Affects on the Pricing StrategyCompany and Product factorsCorporate and Marketing objectivesThe short term tactical use of pricing such as discounts, product offers, ex. McDonalds use Big Mac with fry and CokeFirm and Product poseAvailable resourcesMarketing and Product developmentMarket FactorsConsumers perception of the product, associated expectations and the average spending abilityIdentifying the objectives of the existing, their upcomingstrategies and unqiue selling pointEnvironmental FactorsGovernment influences and constraintsLevel of pomposityCaf coffee day can apply a variety of strategies, combination of affordable prices and understand consumers need in addition t o estimate the competition from the major companies like Starbucks and Costa Coffee and their strength and weakness as well. Business in the UK is governed by Government regulations and inflation plays an important role running them. It is important for CCD to analyze all the important factors which i have mentioned above to integrate and coordinate pricing policies to grow in the UK (Doole Lowe, 2008, P. 383-4).PlaceStrategic locations of the outlets help to attract the target market by means of which Caf Coffee day is sustaining its business, for ex. in India their outlets are commonly situated climb up to family entertainment centers, educational institutes and high street. CCD can apply the same strategy in addition to it can open the outlets in city center and near to corporate offices.PromotionCaf Coffee Day use promotion mix in India like ties up with youth brand Levies and association in movies except as a freshly company in the UK it needs to go with more options of prom otions. The customer is most likely to build his/her expectations by grasping the talk messages marketing the service a business service is likely to deliver (Brassington Pettit, 2006, P. 1069). The Promotion criteria use a variety of communication and motivation techniques with adequate focus on the need to generate curiosity which ultimately helps the customer purchase the new product with trust (Lilly Walters1997).Following possible channels of advertising can aid CCD to realize its existence in the market.T.V.RadioPrint AdvertisingInternet AdvertisingSales Promotion (Student Concession)PeopleThe nature of Services provided depends on the various interactions between people, including Caf Coffee Days staff and the regular customer. The staff plays vital role to deliver the quality service, people in CCD knows People are hired for what they know but fired for how they behave. Caf Coffee Day believes that staff is the real face of any company so they can stress on intensive sta ff training to cope with customers.Physical evidenceBrassington Pettit have mentioned Physical evidence comprises the tangible elements that support the service delivery, and offer clues about the positioning of the service product or give the customer something solid to take away with them to symbolized the intangible benefit they have received(2006, P.1070). Caf Coffee Day is well alive(predicate) about the physical evidences it can be categorized byBrand Image, Logo Caf Coffee Day logo has bright red and green tint which gives it a distinct appeal. Red color represents leadership, vitality and the zest for drinking coffee, whereas the strokes in green instantiates the heritage of producing coffeeArchitecture and Dcor Caf Coffee Day is exploitation lots of young color of today like limegreen, yellow, orange and purple and lots of steel instead of wood.Literature A youth object lesson image is indicated by the literature provided by Caf Coffee Day. Thecolorful hardbound menus, placards, leaflets are all designed o appeal the younger generation who are able to emphasize with it.ProcessesIn India earlier Caf Coffee Day opted on self serving system but nowadays in most of the outlets the server comes and takes away the order and delivers it to the particular table. While considering the UK market it can be vary according to the location for an example CCD can choose to go with self service with an outlet on Sauchihall street in Glasgow to alleviate the service provision in heavy rush and to avoid the appointment of an additional staff for servicing, thereby saving cost in process execution.Entry Mode to United KingdomOnce the company decided to enter in the UK market, it mustinessiness evaluate various options on how to create an entry into the market. Different factors influence the choice of entry into the market. Brassington Pettit (2006, P.1131-2) state six main factors are as to a lower placeSpeed How quickly a company wants to penetrate into a mar ket?Cost How much is the initial investment required to enter into the UK market? flexibility How flexible is the company to adapt to the requirements of the changing market?Risk factors Competitive and Political riskPayback period The pressure from within the organization to piddle a quick return on any orthogonal market investment How fast the organization operates to achieve break even on investments from foreign shores and also generate profits on the long run.Long-term profit objectives long term strategic plan and opportunitiesWhile entering in the United Kingdom, Caf Coffee Day can use different entry modes for its all business divisions.Direct ExportDirect exporting means that the Caf Coffee Day would produce FMCG products in India and then foray into a foreign venture thereby exporting it to the new found market i.e. (UK) customer without involving intermediary parties. The nourish company Amalgamated Bean Coffee Trading Company Ltd is one of the biggest exporters of gre en coffee from India since 1999. The company having expertness in export, it go out help Caf Coffee Day to send overseas its FMCG products like Coffee day, Caf Beat.AdvantagesIts sellers responsibility to find customers, negotiate with them and process their orders.Seller maintains complete control by selling finished his own export department and sales forceIt helps to build up clear presence in the marketDisadvantagesTransportation cost will be highDependency on Buyer (Porters 5 forces Bargaining power of Buyer )It might creates lack of control over marketing and sales by delegating to agentsFranchisingCaf Coffee Day can consider Franchising for its Caf Coffee Day express and lounge which would mean that CCD is ready to grant the rights to use the multitude of marketing avenues like brand usage, trademarks and usage of products, and a franchisee mode of operation is put in place to make the local anaesthetic entities run the operations under the measure of CCD.AdvantagesIt can generate franchise feeIt creates Opportunities to build a broadermarket operationDisadvantagesIt may create quality control and protecting brand equity enigmaWholly-owned SubsidiariesCaf Coffee Day can also be concerned about wholly-owned Subsidiaries for express and lounge division. One of the most expensive methods of market entry is using wholly owned subsidiary. It requires long term commitment from the perplexity and resources (Doole and Lowe, 2008, P. 250). This entry method can facilitate Caf Coffee Day plans to create the big global chain by 2012-13, at the time of entering in the UK will send clear message about the companys agenda.AdvantagesWholly own subsidiary will serve control of core competency and manufacturing method to a competitorThe entry mode will assist to realize learning curve and location economiesDisadvantagesThe entry mode will make CCD to bear full cost of establishing its own subsidiaryCaf Coffee Day needs to study British culture, consumers and compe titionsCaf Coffee Day will have to face UK politics and lawsSales SubsidiariesCaf Coffee Day can think about sales subsidiaries while selling its coffee vending machines in the United Kingdom. Sales subsidiaries play no role in manufacturing the products apart from taking accountability for marketing, selling and distributing it (Brassington Pettit, 2006, P. 1138).AdvantagesCCD can recruit local as well as transfer staff from IndiaIt can build up closeness to the customerTransferred staff can have good expertise in the product and management knowledgeRecruiting local staff will help CCD to acquire local contacts and knowledgeDisadvantagesCCD needs to give product and management training to local staffTransportation cost of vending machine can be highTransferred staff needs local knowledge and contacts, and expatriates cost can be highManufacturing SubsidiariesCCD can also deliberate to establish manufacturing subsidiaries to reduce the import tariff. They can accumulate existing pr oducts in the local market or developing better products as per requirements (Brassington Pettit, 2006, P. 1139).AdvantagesUK government is keen to attract inward investment, it can offer incentives and grants to set up in key regionThis entry mode for CCD helps to reduce transportation cost in addition to CCD can export the machines to other European countries.DisadvantagesThis kind of operation needs to start from scratch or acquire manufacturing unitCCD needs to calculate long-term plan before investing resourcesRecommendationsWhile considering Caf Coffee Day, its Business divisions and the United Kingdom as a potential European market I would like to present some recommendations.While studying marketing i come to know that there is no immediate or best solution for entering into a foreign market.Caf Coffee Day should calculate all the facts and figures regarding United Kingdom.Caf Coffee Day needs to consider franchising, direct export, wholly-owned subsidiaries, sales and manu facturing subsidiaries with their pros and cons.World Banks reports for doing business in the United Kingdom is positive but as a new foreign company in the market, Caf Coffee Day should consider to go with low investment and long term strategic goals.Caf Coffee Day must consider all the regulations, international laws, and culture and target customers in addition to existing competitors as well.