International Marketing Strategy for Cafe Coffee Day (CCD) in the UK

This report presents an international marketing plan for Cafe Coffee Day (CCD), focusing on its potential entry into the United Kingdom market. It begins with an executive summary and a table of contents, followed by an introduction outlining CCD's background and its current expansion plans. A comprehensive SWOT analysis evaluates the brand's strengths, weaknesses, opportunities, and threats within the UK market, highlighting the competitive landscape dominated by Starbucks and Costa Coffee. The report details the target market, segmentation, and positioning strategy, focusing on young adults aged 25-35. It also explores product, pricing, distribution, and promotion strategies, adapting them to the UK consumer preferences. The report identifies potential problems and proposes solutions, including rebranding and risk assessment. Finally, it concludes with recommendations, a timeline for implementation, and a list of references.

Running head: INTERNATIONAL MARKETING STRATEGY FOR CCD
International marketing strategy for CCD

1INTERNATIONAL MARKETING STRATEGY FOR CCD
Executive summary (ES to provide a thorough overview of the entirety of the report including recommendations)
The main purpose of this paper is to present an international marketing plan for the renowned
coffee brand, Cafe Coffee Day, which comes under the banner of Coffee Day Global Enterprises.
The company is one of the most beloved coffee chains in India, with branches in different parts
of the world. At present, CCD is planning to enter the United Kingdom market. The following
report conducts a detailed analysis of the foreign industry, along with recommendations for
branding and marketing in the new market. Recommendations include changes in product, a
renovation of the product and pricing strategies, a rebranding of the company and calculation of
risks involved, so as to reduce the obstacles involved in international marketing.

2INTERNATIONAL MARKETING STRATEGY FOR CCD
Table of contents
Introduction......................................................................................................................................3
SWOT analysis of CCD...................................................................................................................3
Target market and segmentation and positioning strategy..............................................................6
Product strategy...............................................................................................................................8
Pricing strategies............................................................................................................................10
Distribution strategies....................................................................................................................10
Promotion and branding strategies................................................................................................11
Problem identification and solutions.............................................................................................12
Conclusion and recommendations and timeline............................................................................14
References......................................................................................................................................16

3INTERNATIONAL MARKETING STRATEGY FOR CCD
Introduction
Café Coffee Day, which is often abbreviated as CCD, is owned by the Coffee Day Global
Enterprises and is one of the most well known and beloved coffee brands in a number of Asian
countries, especially in India. The brand has more than 1500 outlets spread out across 28 states in
India. As a matter of fact, the brand also has a presence in countries like Nepal, Malaysia,
Austria and the Czech Republic(Cafecoffeeday.com 2018). For the young generations in India,
Café Coffee Day is probably the largest and most powerful youth aggregator and is well known
for its freshly brewed coffee and tasty snacks and beverages. The company in India largely
focuses on the young, rich generations of India and is now planning to enter the market in the
United Kingdom. In 2008, a survey by Brand Equity showed that Café Coffee Day consisted of
the most established brand image in the food and beverages of India(Cafecoffeeday.com 2018).
The main purpose of this report is to prepare a marketing plan for café coffee day in an
international market, namely the United Kingdom. The paper will undertake a detailed analysis
of the UK market and a competitive analysis to understand the proposed marketing strategy for
café coffee day.
SWOT analysis of CCD
Strengths
 Its reputation as a youth aggregator. In India and in the countries where CCD has
established itself as a front runner in the business, the brand has always been associated
with the younger generation. In other words, it is the ideal place for young people to get
together, relax over a cup of coffee and spend some leisurely time together.

4INTERNATIONAL MARKETING STRATEGY FOR CCD
 A wide range of food items and beverages that cater to different age groups and
categories, with exceptional customer service (Raghu 2013).
 It provides a fine blend of affordability and comfort which instantly appeals to the target
market. The brand, despite its popularity, has ensured that a moderate to high pricing
strategy is followed. Since the target market for the company is the younger generation, it
is expected that they might belong to low income categories or might even be in school.
As such, the products sold by CCD are affordable and yet of top quality.
 CCD has a favourable reputation of providing freshly brewed coffee to its customers,
thus inculcating a culture of recreation and leisure over a cup of coffee.
 A skilled workforce with access to technological resources necessary for smooth
operations.
Weaknesses
 The brand has lost some of its charm in its native countries, owing to lack of variation in
the ambience and the products provided to customers.
 CCD has also suffered losses in the past owing to wrongful selection of outlet locations.
A repetition of that in the UK could affect the brand’s market position.
Opportunities
 The coffee industry in the UK grew by at least 7.3 per cent in the year 2017 alone. At
least 1215 new outlets for coffee stores were opened in different parts of the UK. Some
of the branded chains reported a growth of 10.5 per cent in the profits reeled in the last
financial year (Statista 2018). The rapidly growing numbers provide CCD with immense

5INTERNATIONAL MARKETING STRATEGY FOR CCD
opportunity for growth in UK. With favourable branding and advertising, CCD is likely
to perform well in the market.
 In the past two years, the UK has witnessed several adverse economic changes. Yet, the
coffee industry has reported a steady and consistent growth in the past few months. In the
past year, the UK reported a growth of 4.5 % in GDP (Statista 2018). The consumer
buying power is another important economic factor that must be taken into consideration.
Despite the economic crisis last year, the consumer buying power has reported an
increase in the past few months. Moreover, customers in UK are looking for cheaper
alternatives to Costa Coffee and Starbucks, since the country is undergoing an economic
recession.
Threats
 The major threat that CCD would have to face in UK is competition from large
international brands like Starbucks and Costa Coffee. Costa Coffee has more than two
thousand outlets in UK; CCD thus would have to devise a robust marketing strategy that
allows it compete in the same league as these branded chains.
 There is a growing awareness of the adverse health impacts of coffee. For example, there
have been numerous studies on the impacts of excessive coffee consumption on sleep
patterns (Jain et al. 2017). Factors like these could affect the customer buying decision at
CCD.
 The threat of new entrants in the coffee industry of UK is relatively high. As mentioned
earlier, the coffee brewing industry in UK is growing at a rapid rate and is expected to
register higher rates of development in the upcoming years. Moreover, a large number
ofpeople in UK belong to the cafe culture (Tucker 2017). The capital investments

6INTERNATIONAL MARKETING STRATEGY FOR CCD
required for starting a business in this industry is also low, since the availability of
technology and resources makes it possible to launch new brands. As a result, a large
number of local brands have entered the market which could affect the profitability of
CCD.
Target market and segmentation and positioning strategy
The target market for CCD in the new UK market will be young men and women
between the ages twenty five to thirty five belonging to middle and upper middle classes.
However, it must be remembered that beverage preferences are usually independent of age and
gender. Yet, CCD in all its countries have followed a youth oriented marketing strategy so as to
build a stable and loyal customer base in UK (Mishra 2013).
Market segmentation may be defined as the process of segmenting or dividing the market
of buyers into distinct groups on the basis of common characteristics, needs and behaviour of the
consumers. The main purpose of market segmentation is to help the company gain better insight
into the minds of the customers so as to identify the unique needs of each customer group (Hess
and Doe 2013). While entering the UK market, CCD will have to segment or break down its
target market into different groups so that they can cater to individual needs in an efficient
manner.
A combination of demographic and psychographic segmentation strategy will be
used. Demographic market segmentation strategy may be defined as the process of dividing the
market into various groups based on gender, age, sex, ethnicity and other such attributes. Based
on the demographic segmentation strategy, the main focus of the CCD marketing strategy would
be young men and women in UK between the ages of 19 and 32. This is also commonly known

7INTERNATIONAL MARKETING STRATEGY FOR CCD
as the millennial generation.It is expected that young men and women between these ages would
be independent, equipped with some money of their own and might even be working. In the UK,
as of 2017, there are at least twelve million people belonging to this age group. However, in
2017, the census also showed that it was the older baby boomer generation that dominated a
large portion of the UK population. CCD will focus on this particular generation and would thus
have to include products and develop their pricing strategies accordingly.
Following the geographic segmentation strategies, the CCD products will be marketed
mainly in the urban locations of UK, where college students are more likely to visit. CCD will
also follow a psychographic market segmentation strategy. Psychographic segmentation refers to
the process of dividing the market into various groups based on the different personality traits
like attitude, lifestyle, interests, values and so on – all of which have an impact on the customer
buying decision (Ciribeli and Miquelito 2015). It is expected that the younger generations in the
UK, especially people belonging to the millennial generations, would be college graduates who
are working and thus have some money to spend. People belonging to these groups would prefer
to socialise and meet and interact with likeminded people over a cup of coffee. As a result, CCD
would establish itself in central locations or near colleges and universities, where youngsters can
spend their leisure time.
It is important to understand the positioning strategy for the brand in the UK market.
The brand will be positioned in the market as an affordable coffee shop for the youth of UK. The
target market for the company would be the younger generation, preferably college going
students and young working professionals. As such, the company would need to portray itself as
s young, lively, vibrant brand meant for the younger population. Additionally, since a majority of

8INTERNATIONAL MARKETING STRATEGY FOR CCD
High price
Great taste
Low price
Not so great taste
Starbucks
Costa
Coffee
CCD
the younger population prefer to drink tea, a few appealing tea related beverages would have to
be introduced which appeal to younger markets (Ludwig et al. 2014).
(Figure: Positioning map)
Product strategy
In India, an organized product strategy was followed by CCD, where a range of products
along with beverages were offered to the customers. These products were mainly Indian in taste,
since it was assumed that this would appeal to Indian audiences. However, the food tastes and
preferences in the UK are very different from that in India, and thus a few changes would have to
be made as part of the product strategy so as to lure in the target population in the country. In the
product strategy of CCD, there are different divisions providing a range of services. For
example, CCD has Fresh ‘n’ Ground, which produces freshly ground coffee bean and powder to

9INTERNATIONAL MARKETING STRATEGY FOR CCD
all its outlets. Coffee Day Square and Lounge is a slightly more expensive service that CCD
offers to some of the outlets. These are premium coffee bars which contain a number of high
priced products that are not available at other outlets(Cafe Coffee Day – India's favourite Coffee
Shop & hangout place 2018). At all other outlets of CCD, a range of products would be available
including sandwiches, hot dogs, mini pizzas, pastries, light snacks and so on. As far as beverages
are concerned, CCD serves a range of both hot and cold beverages which include espressos,
cappuccinos, frappes, cold coffee, smoothies and even granitas. The most popular item in the
CCD product range is the frappe (a fine blend of ice cream and cold coffee), and the company
has thus proceeded to introduce a variety of frappes for the customers to choose from. It is
expected that new and interesting products like these will appeal to the target audience, the
younger generations in UK.
However, as the SWOT analysis shows, there is a growing concern about the health
impacts of coffee consumption amongst the younger generations in the UK. As a result, a
majority of the population has turned to healthier alternatives like tea or green tea (Ludwig et al.
2014). CCD should also thus include a number of tea related beverages like green tea, iced tea,
flavoured teas and so on. Also, since CCD is essentially an Indian brand, introducing traditional
Indian flavours in tea beverages could be considered a smart move. A large number of people in
the UK consider India to be something exotic and glorious. Introducing flavours like Darjeeling
tea could prove to be beneficial for the company. It would also function as their unique selling
proposition or USP, which sets it apart from other brands like Costa Coffee or Starbucks which
prefer to stick to mainstream flavours.

10INTERNATIONAL MARKETING STRATEGY FOR CCD
Pricing strategies
Since the company will be targeting customers belonging to the younger generations
between the ages of 19 and 32, it is important to develop a pricing strategy that would cater to all
customer groups. The SWOT analysis shows that brands like Costa Coffee and Starbucks are
proving to be too costly for a number of customers in the UK. As such, introducing products
with a moderate pricing strategy would ensure that CCD appeals to the right target audience. It
would also give the company an edge over the other brands in the same industry (Davcik and
Sharma 2015). The average price of coffee in the UK is approximately 4 pounds. The varieties of
coffee like latte, frappes and mochas would cost more. Thus, the pricing strategy of CCD would
be moderate to high (McCarthy 2018). An average cappuccino would cost around 2 pounds, with
additional charges for extra add-ons like cream. Frappes and cold coffees would be priced
higher, at approximately 3 pounds. Sandwiches and other snacks would be priced at moderate
rates like 1.5 to 2 pounds. Since the tea related beverages would be exclusively reserved for the
UK audience, these would be priced higher at 4 pounds per cup. The company would also have a
range of merchandise like cookies, biscuits, juices or flavoured waters which could be purchased
and consumed on the go.
Distribution strategies
As far as the entry mode is concerned in the UK, a franchising system will be used. CCD
comes under the banner of Coffee Day Global Enterprises, an Indian company. In the United
Kingdom, the corporation run would still remain under the same parent company and would be a
franchise of the same. This is cost effective and would involve less political risks (Kotabe and
Helsen 2014). The parent company would also be able to retain control over its franchises in a

11INTERNATIONAL MARKETING STRATEGY FOR CCD
foreign market. CCD has a very aggressive distribution strategy in the countries it is currently
operating in. In most major countries of India, there are at least ten to twelve outlets which are all
centrally located and easily accessible. The same policy will be followed in the UK as well. The
initial location for CCD will be London, which is one of the most popular cities in the UK.
Gradually, the company will expand into the other cities as well. CCD will mainly focus on the
urban locations, because college going students and working men and women between the ages
of 19 and 32 are the target audience. Also, a number of outlets would be opened up near the
colleges and universities and in densely populated areas so that it can lure in the target audience.
Promotion and branding strategies
CCD would have to devise strong marketing strategies in the foreign market. For that, the
cultural differences would have to be taken into account. CCD would have to remember that the
culture and values are very different in India than in the UK. As a matter of fact, the marketing
strategies followed by CCD in Thailand and Malaysia would not be applicable in UK (Pongsiri
2013). The people in UK have a very different set of expectations from coffee stores than in
India. For instance in the UK, cafes are mainly places where customers can relax or meet and
interact with other people over a cup of coffee. Similarly, CCD could introduce a number of new
flavours which are in accordance with the tastes and preferences of the people of UK (Srivastava
2015). Social media is another major means of communicating with the customers. Online
marketing would be one an integral aspect of CCD’s international marketing strategy. Various
strategies like click through rates and other metrics could be used to evaluate customer
expectations and needs.