The country’s largest coffee retail chain Cafe Coffee Day is looking to expand to 2000 outlets by 2015. The cafe chain remains undeterred and undisturbed by competition, confident about its knowledge of the Indian market. It knows to how play the game right. Customer engagement through the digital medium has become a strong component of its marketing strategy. K Ramakrishnan, President, Marketing at Cafe Coffee Day spoke to Rashi Bisaria of Pitch about how observing the youth and following conversations have kept them ahead in the game.
How has Cafe Coffee Day fared on social media?
We have been one of the few brands who have been at the fore front as far as using social media is concerned in India. From among brands which have had a good fan following on social media and growth rate we are in the front. Our stress is on social media. We ensure that our base in social media keeps growing. We use it for 3 different things.
Social media keeps us on our toes. People on social platforms are unsparing. Secondly we use it to communicate with a whole lot of people at one go about a new outlet, new offerings etc. The third is that Cafe Coffee day serves as a non-intrusive hangout for people where they can have conversations. That’s what people do in the virtual world, they have freewheeling conversations and we don’t interrupt those conversations unless something is going out of hand. When we follow these conversations, we come to know what the hot topics are currently and how we can capture a bit of their fancy and imagination. The fourth is that we use social media to co-create offerings. There is a strong involvement of the consumer in co-creating the brand itself.
How does co-creation work?
For example, the playlist of songs that we play in the cafes are co-created which means that the fans suggest the songs and that’s what we play. We have incorporated the co-creation process in our product development process itself. Brands usually conduct surveys among target groups and then introduce a bunch of concepts. In our case we have integrated social fully into this process. In the first step, the trend analysis comes from social media, the concept is chosen on social media and then we choose the one which is attracting more number of people. We then create prototypes of physical products. When we have physical products we invite these people from the online space. Once they taste they give their feedback on social and they feel they have created the brand itself. This co-creation has given us good results in terms of the products we have launched. There’s another example. Our customers had been telling us that our desserts were great but very heavy but they needed some options to satisfy a quick sugar rush which was not that heavy. That led to the launch of dessert shots. Customers asked us about cookie based drinks and we came up with the Oreo based drink. Both these have been big hits. This is how co-creation has worked for us. It’s a process we follow to create the best offerings for the customers.
Can you cite a campaign on social media that has been a huge success?
When we touched 1000 cafes in India we decided to celebrate on a large scale. The process of celebration was quite interesting. We decided to have celebrations across all our cafes at the same time involving the customers. We set a date and excitement was generated on social media. The event went viral. People participated by posting their comments online. We were very proud of this campaign. Our effort and time investment are substantial in the social space.
Online Shopping has become a rage of late and CCD has also started selling products and coffee online. What prompted this move and has it paid off?
Coffee penetration in India is abysmally low. The consumption is 82 gms per person per year while in a country like the US it is 4 kgs. Category growth can happen only when coffee finds its way into homes. When people like our coffee in cafes why shouldn’t they buy it there or online? That was one reason why we started selling online. Secondly, we have several products that appeal to the youth. We have coffee powder and filter fresh coffee, which is an instant way of making coffee but is not instant coffee. We also have coffee machines, French presses etc . We want to promote the category especially in the homes and that’s why we started selling online.
How do other brands benefit from Cafe Coffee Day?
We are the largest physical aggregators of youth in India. There are many brands that want to speak with this aggregation. So they want to talk to our consumers and our consumers also get some kind of change. This helps in creating a different ambience for them. These are typically brands that will add value to our consumers. It’s a symbiotic and cooperative relationship. Movie companies use our cafes to reach out to our audiences. We also have some star visits from people and in turn we can promote our products. So it helps both the parties.
How do you keep track of the changing preferences of youth?
We operate in the domain of observation. Young people working at our cafes give feedback. A certain number of consumer observations are logged every month and they need not be related to our products also. They are general observations about youth trends. These insights help us.
How are you planning to expand to smaller towns and increase the number of outlets?
Lack of penetration is not a function of demand. It’s a lack of the function of supply. We need an infrastructure to maintain a regular supply of fresh food and beverage in every town of India and that is lacking at the moment. We have decided to introduce a new offer every quarter. We are currently at 1430 outlets and we want to be 2000 outlets by the end of 2015.
What has been the response to the Cafe Coffee Day Application?
We haven’t focused on it too much. We just made some social announcements about it . But we are happy with the response so far. People use the App for four functions:1. location of nearest cafe 2. Menu. 3. Deals through the app 4. Hangout options.
How do you deal with competition?
Its best to keep track of consumers more than competition. The moment you start navigating around competition you’ll be changing yourself every month. Competition is only going to grow the category and if the category grows we’ll only be happy about it.