Opening of Caf Coffee Day in Kerala - Research Proposal Example

Research Proposal Contents Contents 2 of the research 3 Introduction 3 Literature Review 3 Research Objective 5 Discussion 6 Gantt chart 8 Consideration of practical issues 8 References 10 Title of the research The title of the research is opening up of Café Coffee Day in Kerala. Introduction Coffee is a commodities market to watch out for going into 2014. According to one commodities expert coffee bean prices should reach historically bottom and it will revive investor interest. On New York ICE Future exchange, prices of coffee have declined from $ 2 per pound and presently it is trading in the range of $ 1.15 to $ 1.20. In India there is a growing demand and even coffee companies like Starbucks Corporation, Café Coffee day have become saturated in the developed economies. In developing economies like India, with increased consumption of commodities and rising wealth companies like Starbucks, Café Coffee day have been trying to increase their market share and it is going to continue until there is a Coffee shop in almost every town or every other town. In India the ready-to-drink tea and coffee market has picked up a great business in the last 5 years. According to some study this market is expected to grow to $ 225 million by 2017. The domestic market is dominated by outlets like Café Coffee Day, Costa Coffee, and Barista etc. and is estimated at $ 110 million. In the past decade, 1,200 cafes have come up across India registering an annual average growth rate of around 40 percent. Literature Review According to Harish Bijoor Consultants (2010), CCD in India has around 70 percent of coffee outlets. Though the coffee consumption demand in India is not very high in India in comparison with other European countries or US but still demand exceeds supply. If CCD in India can add around 1000 cafes over the next two years then it will be virtually invincible. The coffee retail chains have been engaged in a healthy battle for many years. Competitors like Barista have done some radical experiments with food in its outlet with success. Thus CCD has also started focusing on food items in its outlet. CCD has started a coffee centre which caters to coffee connoisseur and business clients looking for internet access. CCD is trying to energize and stratify their brand. The company is trying to overhaul its brand through new cup, crockery designs, coffee machines which produces better brewed coffee, new wall paint and is spreading to other cities (Balasubramanyam, 2011, p. 1). CCD tries to reduce its operational cost to maximize its profitability and hence it concentrates on opening new outlets in cities where it can open a number of outlets. According to research conducted by Mr. S. Ramesh Kumar (2008), CCD presents its coffee with a special coffee experience which arouse a sense of Pleasure seeking within the customers. This fact is reinforced by Ms Richa Agarwal (2009) where she conducted a research where the respondents were asked to consider CCD as a person and describe the features which it associates with that person using the projective technique. The respondents came out with characteristics like fashionable, young, lively, and sophisticated. Even few older people were attracted towards CCD because of young generation orientation of CCD. Loyal customers were delighted because of positive reward associated with product and service (Srinivasan, Archana and Bhagat, 2014, p. 1). The research findings found out many features of CCD. Café Coffee day uses cluster approach to increase the entry barriers for new entrants or competitors in a geographic location. They do this by establishing many outlets in a particular city. The preferences of beverages among South and North Indian are very different. It was found that South Indians prefer coffee while North Indians prefer Tea as part of their culture. CCD has made the age old drink coffee associated with youth markets in metro cities. Hence individuals prefer to go to CCD more often after their home or office. Richa Aggarwal (2009) conducted a research which found that around 80 percent of different CCD outlets was built keeping in mind various customer segment of 15-29 years of age. Another thing which was found that customers were looking more than just having a cup of coffee, they were essentially looking for a good experience. Hence CCD changed their strategy to experience selling from product selling. This strategy put more focus on background elements like lightning, colour and music. Jukeboxes were installed so that the customers could listen to their favourite music (Shankar, Carpenter, and Hamilton, 2012, p. 184). Research found that people prefer table service over self-service and hence table service was started at all CCD outlets instead of self-service. Further it was found that customers prefer to have food along with coffee and thus they began serving light meal light pasta, cookies etc. with coffee. CCD extended their brand to include other eatables like mints, wafers, cookies and other merchandise which were available only in their outlets. CCD has various varieties of café formats like book cafes, sports cafes, lounge cafes, music cafes, garden cafes and highway cafes. These were started to redefine the café experience. According to Ellen Mermelstein (2006), the taste of Americans towards high quality coffee has changed over the years. This is due to many world renowned coffee outlets like Dunkin Donuts, Starbucks etc. If the same trend gets replicated in India, then it is expected that coffee consumption and number of customers are expected to rise for CCD. According to Journal of Foodservice (2007) to increase the footfalls, innovation in coffee flavours are necessary and it should be decided on the basis of consumer preferences in that area. Research Objective Check the feasibility of opening a Café Coffee Day in Calicut, Kerala (India). The research will be done to find the consumer behaviour of people living in Calicut, Kerala towards opening up a Café Coffee Day there. First the research needs to understand the fact that whether there is enough demand in Calicut, Kerala for them to consider opening up the restaurant. The company needs to understand the demand forces working in that area and whether the company will be able to meet that demand. Café Coffee Day needs to make use of their research team to find out the taste preferences since it varies from region to region. The company needs to identify whether the youth living in those areas will be able to identify with it. The company further needs to understand the marketing techniques and financial cost which is to be employed to make their project a success. Café Coffee Day needs to source its raw materials from areas where the transportation cost will be reduced and hence the overall cost structure gets reduced. The company needs to do research on the target market and maintain the ambience of the store accordingly. Research needs to be done on culture of the society so that the company can present its menu accordingly. Discussion Exploratory research is to be conducted for providing various understanding and insights for understanding the market potential of new Café Coffee Day outlet. Exploratory research will be used to develop hypothesis, establish priorities for further research and gaining insights for developing an approach to the problem. Focus Group discussion and Interviews will be conducted on people in Calicut, Kerala. The focus group discussions will be conducted in informal environments which will be qualitative in nature. Again interviews of retail crew of Café Coffee Day will be conducted and it will be both quantitative and qualitative in nature. Under the quantitative method surveys and interview will be conducted to get the quantitative descriptive data. The sampling population should be the youth population who go to schools, colleges or doing post graduate courses and business class people. The Sampling technique which will be used is Stratified sampling. The entire population will be divided into two strata. One group will have such previous experiences of visiting coffee outlets and other who still haven’t visited any such coffee outlets (Merriam, 2009, p. 121). This is because the spending pattern of both the groups will be different. The age group of the sample population will be of 20 to 25 years and working people. Questionnaires need to be put forward regarding their frequency of visit to coffee shop per month, their experience if any of Café Coffee Day, why do they like Café Coffee Day, what additional services do they want in Café Coffee Day to improve their experience, will their average spending increase in case one or more extra services are provided, where do they want Café Coffee day to be present, will their frequency of visiting Café Coffee day increase if they open Café Coffee day in Calicut and will they switch from other coffee shops to Café Coffee Day if one is opened there. The research will include mostly primary data by collecting data from the sample size through list of Questionnaires. Secondary data like journal articles, government sources, internet will also be used to during the research. Once the data is collected it needs to be analysed. From the stratum of inexperienced individuals 60 individuals will be selected and from the stratum of experienced individuals 90 students will be selected randomly. Then they will undergo the questionnaires and their responses will be recorded for future analysis. The scales which will be used may vary from ordinal, interval to nominal scales. This research will use 5 point Likert scale for ensuring accurate and unbiased results. The questions need to be designed to ensure content and construct validity. After all the responses have been gathered a synthesis of attitudinal and behavioural aspects of focussed group discussion is to be done to ensure accurate insights. After setting the actionable priorities the optimal results will be obtained at the end of whole process of Market Research. Gantt chart The Gantt chart is a simpler tool for smaller and simpler projects. The above figure shows the Gantt chart of the research proposal. The sampling of the population is to be done in time 1 while questionnaire is presented to them during time 1 and time 2. After all the data is collected which means the questionnaire is filled up during time 3 and time 4, data analysis is conducted during time 5. After all the research is completed, it will take considerable time in establishing Café Coffee Day and recruiting personnel. The company needs to set up budget for everything like advertisement, promotions, operations etc. Finally in Time 13 the company will start its operations. Consideration of practical issues Café Coffee day needs to make the make the sampling procedure carefully so that they can get the results accurately. Café Coffee day should invest into marketing and promotional activities carefully. The company should take advantage of being the first mover in the industry and try to connect with local customers through their marketing activities. The company should develop products which are popular with the growing middle class of India like Corn Cheese Sandwich and Spinach for vegetarians and Maharaja Crush. Café Coffee day should use the fact that though in India majority of the population are tea drinkers, coffee us used traditionally as the stimulant of choice in the South where they drink filter coffee. Café Coffee day should create a differentiation strategy from other global chains. It should get their pricing strategy right. Further they should aim at enhancing the customer experience (Ferrell and Hartline, 2012, p. 214). They should serve the coffee efficiently; keep the outlet clean and making the customer feel relaxed. They should try to present itself as the new adda of youth. Further the Café Coffee day should look at earning good revenues. The company should look maintain optimum cost structure and earn a revenue of $ 2,000 within first month of operation. The company should look at maintaining annual growth rate of at least 20 percent in the next five years of operations. For the first few years the company should invest heavily into marketing and promotions to earn huge profitability (Barr and McClellan, 2010, p. 152). References Balasubramanyam, K.R. 2011. Cafe Coffee Day - Coffee raj. Available at: http://businesstoday.intoday.in/story/cafe-coffee-day-in-promising-companies-list/1/18661.html. [Accessed on: 15 April. 2014] Barr, M.J. and McClellan, G.S. 2010. Budgets and Financial Management in Higher Education. New Jersey: John Wiley & Sons Ferrell, O.C. and Hartline, M. 2012. Marketing Strategy. London: Cengage Learning. Merriam, S.B. 2009. Qualitative Research: A Guide to Design and Implementation. New Jersey: John Wiley & Sons Shankar, V., Carpenter, G.S. and Hamilton, B.A. 2012. Handbook of Marketing Strategy. Cambridge: Edward Elgar Publishing Srinivasan, R., Archana, S. and Bhagat, K. 2014. The Coffee Day Journey, Cup By Cup. Available at: http://tejas.iimb.ac.in/articles/79.php. [Accessed on: 15 April. 2014] Read More