Arati Rao
Nov 22, 2012

Live Issue: Are our café chains differentiated enough?

As the competition heats up in the café space , Arati Rao poses the question to branding and marketing experts

Live Issue: Are our café  chains differentiated enough?

"Been to Starbucks yet?” is the hottest conversation starter in Mumbai, with the entry of the giant into the country. That brings to mind another question: how differentiated are the many coffee chains that exist here already?

Lulu Raghavan, country director, Landor Associates, says, “They are fairly differentiated in terms of the product offering, ambience and type of person who hangs out. So in a sense, there is a self-selection of the kind of brand that is right for different consumers. If you’re the typical Café Coffee Day (CCD) customer who loves her green apple soda and catches up with friends after college in a vibrant and ‘buzzy’ atmosphere, then you’re not going necessarily going be attracted to a more sophisticated and peaceful café where you’re expected to know your espressos from your lattes.”
Dheeraj Sinha, head of planning for South and South East Asia, Grey, disagrees, “I think the effort has been more on building relevance through the right product mix and building access. As a result, there hasn’t been much focus on differentiation.”

Harish Bijoor, brand-strategy specialist and chief executive officer of Harish Bijoor Consults, recalls the genesis of the coffee shop culture in India. It started in November 1996 with VG Siddhartha’s first CCD outlet on Brigade Road in Bangalore, he recounts. “The pioneer set the pace, and everyone who came in after the first CCD aspired to copy first and then innovate. The first to attempt differentiation was Barista. In came lifestyle as a point of differentiation. Barista brought in the guitar, the Pictionary board and lots more. Others followed. Some focused on food, others focused on ambience and yet others focused on the brews on offer. In the bargain, as of today we have cafés which are largely undifferentiated. There are small differences, but the differences are not large enough to be noticed. Not large enough to form part of a differentiated retail brand proposition,” he explains.

On how CCD has differentiated itself, besides its three formats (the basic café, CCD Lounge, and CCD Square which cater to different segments), K Ramakrishnan, president - marketing, Café Coffee Day, says, “We stand for being a conversation hub, so our visual identity talks entirely about that. The survival of a big player in the café space is fundamentally dependent on the number of locations, the service, the pricing and the nature of our product. That’s where we score better than others.”

As modern retail itself becomes more dynamic, there is a brew for success. Ashish Mishra, head - Water Interbrand, explains, “As per the Interbrand Best Retail Brands study, there are clear pointers to what will build value for a chain in the new marketplace. Brands that tell a story clearly and uniquely, brands that integrate relevant formats, brands that detail, brands that use an omni-channel strategy, brands that leverage design to orchestrate a relevant and rich experience, brands that are anticipating trends and not just following - these are the kind of brands that are likely to build a valuable retail chain brand.”

The future could see things getting even more interesting. Bijoor predicts, “Cafés will need to build communities of their own. Every café will need to be run not as a national or international brand of repute into which people walk in, but as a local coffee shop that first understands its local community, makes relevant offerings to them, and nurtures them.”

 

  

MARKETER

K Ramakrishnan, president - marketing, Café Coffee Day

“The differentiation will come from location, service, pricing and quality and consistency of the products. Fundamentally, we are in food and beverage retail. Other factors like Wi-Fi can play a part, but won’t supersede these factors.”

 

  

BRANDING AND DESIGN

Ashish Mishra, head – Water Interbrand

“Barista in the beginning had a few attempts through music, message boards, games etc. but gradually they fell into the trap of sameness. CCD has a younger targeting and seems relatively unique but could do a lot better on various other counts of the experience. Costa scores well on authenticity and is possibly somewhat differentiated on that parameter of brand strength.”

 

  

BRANDING AND DESIGN

Lulu Raghavan, country director, Landor Associates

“In the future, there will be an increased emphasis on differentiation as consumers will have plenty of choices. We will see lots more innovation in the beverages and foods menu. We will see more events-based experiences (book readings, coffee tastings, games etc.) being offered. And the coffee chains will start thinking much more seriously about how to reward their loyal customers. We might even see fair trade and organic become a significant differentiator for café brands in India.”

 

  

PLANNER

Dheeraj Sinha, head of planning for South and South East Asia, Grey

“I think apart from the quality of the product and availability of choice, service will come to play a big role. Unfortunately, in most categories in India, including the service sector, we still have a long way to go when comes to service delivery. However, as we get past the issues of fixing distribution and reach and have an exciting menu on the table, it’s the quality of service and ambience which is going to play a big role. As it’s argued, the coffee shop is more about the conversation than the coffee itself.”

 

  

BRAND STRATEGIST

Harish Bijoor, brand-strategy specialist and chief executive officer, Harish Bijoor Consults

“Starbucks is today the global leader with 18,000-plus cafés, and all of India has a total of 2135 cafés to date. Therefore, these are early days. Players are still plucking the low hanging fruit of opportunity in India today. Differentiation and segmentation of café offerings will emerge when the low-hanging fruit dry up, and when one is forced to reach higher.”

Source:
Campaign India
Tags

Related Articles

Just Published

3 hours ago

Cannes Lions 2020 cancelled: Indian adland reacts

Some believe learnings will be missed while some call for work to be celebrated with an online event

5 hours ago

Cannes Lions not to be held in 2020

Festival scheduled to return in June 2021

6 hours ago

Weekend Wrap: 3 April 2020

In the news: ASCI, Media Mantra, Ogilvy, The BlueBeans, Ventes Avenues

7 hours ago

Vivo India salutes the heroes who wear capes

Watch the film conceptualised by Dentsu Impact here