Consumer Relationship Marketing of Cafe Coffee Day - Case Study Example

Executive Summary Companies with intensifying competition are laying special stress on Customer Relationship Management. Organisations are looking forward to include it in the management thinking process and look towards improving their image in the society. Cafe Coffee Day which has developed into a coffee giant is looking towards exploiting customer relationship to get maximum advantage. The report looks into the manner Cafe Coffee day has been able to work to develop its brand. The report presents a SWOT analysis which helps to dwell on its strategies. The report then presents the target market and the manner in which Cafe Coffee day has collected information about the customer to ensure effective customer relationship. The report then looks into customer relationship and explains the changes that have taken place in coffee shop to ensure customer relation. It then looks into the manner customer relationship has been achieved and the different mechanism which has increased the effectiveness of the consumer relationship. Finally the report presents the manner Cafe Coffee Day will help the customers to get coffee at the same time and also a sense of belonging with the coffee shop. Contents Introduction 3 Purpose of the report 3 About Cafe Coffee Day 4 SWOT Analysis 4 Target Market 7 Strategy to collect data of customers 8 Customer Relationship Strategy 10 In the days before coffee 10 Role of CRM in coffee shop 11 CRM Strategy for Cafe Coffee Day 12 CRM in coffee shop 13 Future of CRM 17 Conclusion 17 References 18 Introduction Companies with intensifying competition are laying special stress on Customer Relationship Management, Corporate Social Responsibility and Ethics. Organisations are looking forward to include it in the management thinking process and look towards improving their image in the society. Cafe Coffee Day can expand its reach and developed their coffee variety be ensuring that they look after the society and environment and include these things in their planning process. This will help to ensure that customers are managed well and retaining them becomes easier. Customer Relation Management will help the coffee shop to develop their strategies for the future. Purpose of the report To identify the SWOT analysis of Cafe Coffee Day To identify the target market and the different segment Cafe Coffee Day is looking to eye To identify the manner in which consumer data in relation to customer relationship marketing is collected To provide the manner in which Cafe Coffee Day builds it customer relationship strategy to gain effectiveness About Cafe Coffee Day Cafe Coffee Day is of the renowned coffee chain which provides freshly made coffee to the consumers. The coffee giant has been able to deliver quality coffee all around the world and has build relations with the customers which has helped them to ensure that their branches grows and quality has always being laid stress upon. The giant has over 1000 cafes in 150 different cities. (Company Website, 2010) The coffee giant has also developed its chain outside India in Germany, Pakistan, Austria, and Australia to name a few. The growing popularity of the chain and the manner it has been able to maintain quality at all its outlet has created a brand name and is helping the coffee giant to capture a good chunk of the coffee market. Customer relationship is an important aspect which has been considered by the coffee giant and has enabled it to grow. SWOT Analysis The SWOT analysis of Cafe Coffee Day will help to understand the manner in which the external and internal environment is affecting the coffee giant. The coffee chain based on the SWOT takes decision regarding the future prospects of the company and define the manner in which it will perform. Strength Growing Preference for coffee: Large market and increasing customer base due to the preference coffee has over other beverages. Variety: Variety of coffee like cold and tea along with ice-cream attracting different segment of customers (Ferrell, 2002) Global Brand: The chain acting as a global brand has empowered the company to be able to market its product widely. (SWOT, 2010) Flexibility: The flexibility nature adopted in the business pattern has allowed them to grow. The ability of the company to mould itself according to the local requirements of the country has provided the ample space Cafe Coffee Day was looking to grow. This has paved the path for the company to be able to market itself. Innovation: Development of new varieties of coffee with an additional feature is attracting many people towards this chain as it has changed traditional coffee into something more refreshing. (Ferrell, 2002) Volatile Customer base: Loyalty of customers in Cafe Coffee Day is low and customers are seen to jump from one coffee outlet to another depending on their ease and comfort level. (SWOT, 2010) Weakness Brand power: Brand power requires marketing the product pushing the cost to rise. To ensure steady supply of customer extra cost has to be incurred in brand promotion. (Ferrell, 2002) Limited shelf life: Once a coffee is prepared it has to be consumed and cannot be stored there by making the product become unfit for consumption after some time. Opportunities Growing Population: Huge potential as there is a upward trend and people are preferring it. There has been a shift in the population towards coffee from tea. Increase in universities: Growth of universities and offices making a huge market to cater to. This is added by the inflow of foreign students and companies which has fuelled demand for coffee. Improving the brand image: Cafe Coffee Day needs to realize the importance of it and based on the solid market structure developed by Cafe Coffee Day they can market their products well and create a brand name. (SWOT, 2010) Threats Health issue: Health issue surrounding the beverage industry like caffeine content, obesity acting as a threat High distribution cost: Especially the cost of distributing coffee and ensuring quality has increased its cost. Threats from other brands: Cafe Coffee Day faces threats from other brands like Barista that has increased their market share and have products matching to those of Cafe Coffee Day. (Ferrell, 2002) Target Market The target market for Cafe Coffee Day is people in the age bracket from 15 to 45. Cafe Coffee Day has defined a target market for itself by concentrating on age groups consumes coffee and spends time at coffee junctions. The target market for Cafe Coffee Day has further being divided into two where the core target customers are students in the age bracket 15 to 24 as their strength is growing due to increase in universities and the other category is the working segment constituting of 24+ age group. The chain is looking to locate its stores near colleges, universities and hostels so that it can attract maximum customers. Demographic: The population of Australia is around 22.4 million people. This presents a huge opportunity for Cafe Coffee Day as it can cater to 49.4% of the entire population 11.07 million. (Statistics, 2010) This thus helps to identify the target market better as Cafe Coffee Day will look towards people in the working age group giving a huge market to cater to. This thereby presents a bright future and prospects for the company to grow in the future. Psychographic: This will help to identify the target market based on attitude and personality formation. This will be achieved by eyeing the people in age group 15 to 45 as they have the potential to repeat their purchase. Also this will help Cafe Coffee Day to ensure a better strategy for this group in regard to promotion. Geographic: The geographic factor makes Australia an important hub due to growing population. Cafe Coffee Day thus will concentrate to eye major cities like Sydney, Melbourne, Perth, and Brisbane and so on presenting a huge market to cater to. Based on the target market the market strategy will be as follows Year 1: Cafe Coffee Day will look to increase their market size through penetration. The company will look to target their primary customers in the age group 5 to 45 as they have good potential which is seen by their percentage share in population. Year 2: Cafe Coffee Day will look towards growth by targeting new development. For this the company will target their urban customers in the age group 5 to 45 as it is a growing segment and has huge potential Year 3: Cafe Coffee Day will look here to consolidate their market share by increased market penetration. The company will target both section of customer and look to instigate repeat purchase at the same time get new customers. Strategy to collect data of consumer Strategy related to consumer will be collected through the different stores to understand customer perception about the product. This will act as primary data. Secondary data will be collected from books, magazines, internet and newspaper which will help to understand the consumer perception and develop customer relationship strategy. Perception about the coffee chain and the quality of its product will be established by asking the frequent visitors their views. This will help to understand the areas Cafe Coffee Day needs to work on. This will also help to highlight the different areas of consumer relationship and will guide the management to take steps which will help to improve their relationship. On the secondary front data regarding the customer will be collected through magazines, internet and blogs which will help to increase the relationship as certain aspect which the customer is not willing to disclose will be collected through this medium. This will help Cafe Coffee Day to take the requisite steps to improve customer relationship. Cafe Coffee Day can look towards by ensuring that they provide coupons to customers who visit their stores. This will also act as a marketing strategy and help to build a good reputation. Having coupons which can be redeemed will help to collect information about consumers as customers who redeem those will have to provide their necessary details. This will help Cafe Coffee Day understand the perception of the customers and will help to identify their intentions while redeeming the coupons. This strategy will help to collect details about the customers and will act as a guide for future development of the chain. (Lee & Yen, 2010) Cafe Coffee Day can also look forward towards online surveys. This will act as a primary data collection method and will provide Cafe Coffee Day with a proper evaluation about the customer requirements and their desires. (Fisher, 2010) Collecting data based on surveys will provide real inputs and will help Cafe Coffee day. The chain can here design a questionnaire and make it in such a manner that customers filling those are provided an incentive and they visit the chains. This will help Cafe Coffee Day garner better data as the intention of the customers filling the surveys can be identified and will help them gather relevant information. Cafe Coffee Day thus by using both the primary and secondary methods can gather useful information which will help them develop their marketing strategies and strategies to ensure that their relationship with the customers improves. Customer Relationship Strategy Customer Relationship Management is “a business strategy of engaging customer and developing a relationship with him which is based on trust and loyalty”. (Brown, 2009) This definition highlights and covers various aspect of customer relationship management. Loyalty here is “the inclination of the customer to purchase the same product over and over again as the attitude matches with his requirements”. (Brown, 2009) This will ensure that customer have trust and will ensure steady sale. In the days before coffee The cafe coffee shop has undergone tremendous change and this has being due to the change in customer relation. The coffee shop has “transformed itself from a coffee to a luxury item with special attention being laid to quality, ambience, furniture, floors and comfort level of the customers”. (Sims, 2010) This has transformed the way the coffee shop presents them. It has also ensured that “the long lines in front of coffee shop are done away with and the different varieties being offered present a lot of opportunity”. (Sims, 2010) The transformation has brought about changes in the way customers are looked upon. This change has improved the work culture and also ensured that the coffee shop that relies on customer satisfaction is able to sustain. Role of CRM in coffee shop Customer relationship focuses on customers. This makes it a vital part of the coffee industry. Cafe Coffee Day needs to ensure that “they organize and analyze customer data to understand the customer preference so that coffee which is demanded highly can be marketed accordingly”. (Krishna, 2010) The value of this can be magnified by storing the data centrally. This will allow easy accessible to all and makes it easy for the coffee shop to gather vital information. Customer Relationship Management will also help to improve “the sales and marketing function, the billing and expense function, the project management efficiency and better management of the human resources”. (Krishna, 2010) This will thus help the coffee shop to improve their services thereby making it more productive both for the management and the customers. CRM Strategy for Cafe Coffee Day Cafe Coffee day has been looking to improve their relationship with their customers and is using every measure to ensure that they get maximum benefit for their efforts. The chain has ensured a strong network and marketing of their products which has ensured that it is able to deliver proper services and ensure maximum satisfaction. Cafe Coffee day to improve the customer relationship strategy has ensured that they have backward integration in their supply chain. This has enabled Cafe Coffee day to get coffee beans from the same place and ensure consistency in taste along all outlets. This has helped Cafe Coffee day to ensure that they have the same taste and customer gets the same feel as the ambience has also been designed in the same manner to give the same feel. (Goud & Madhurkar, 2010) Doing so has ensured that Cafe Coffee Day is able to be consistent and ensure maximum customer satisfaction which has helped to build customer relationship. Cafe Coffee Day to improve customer satisfaction has also ensured that the food items are purchased locally. This has helped them to ensure that the taste matches with the local requirements. This has added to their advantage as Cafe Coffee Day has been able to ensure that satisfaction remains high. (Goud & Madhurkar, 2010) This strategy has helped Cafe Coffee Day get a good bargain for the products and ensured that their customer relationship strategy pays them rich dividends. Cafe Coffee day has also been able to improve customer relationship strategy because of the large number of coffee shops available worldwide. This is making customer associate with the brand easily and giving them brand recognition. Cafe Coffee Day due to this has been able to understand customers better and devise strategies which meet their needs. The business model of Cafe Coffee Day has also ensured that customer satisfaction remains high. Cafe Coffee Day has ensured that customers can sit, relax, chat, enjoy, and have fun at the same time relish coffee. This has attracted many youngsters to the outlets as it provides the necessary ambience and time for leisure. (Goud & Madhurkar, 2010) This has helped in a long way to build customer relationship strategy and has helped Cafe Coffee Day deliver better strategies. Cafe Coffee Day has further been able to develop their customer relationship strategy through various marketing mechanism and different mediums to develop their chain as a global brand. CRM in coffee shop Cafe Coffee Day can develop customers “who are loyal by developing a program which has a link with the mobile and the customers get a plastic card which is accessible through mobile so that the customer can pay the bill via that mode and at the same time receive updates and free gifts”. (Butcher, 2009) This will help the coffee shop to ensure that frequent visitors are given something in exchange. It will make Cafe Coffee Day realize the potential of the market. The growth of the telecommunication network will ensure that payment is received directly in the banks and will also make it easy for the customers. Receiving regular feedbacks and gifts will make the customer look for it. It will also make the customer come back to Cafe Coffee Day ensuring proper customer relationship. This will further add as a greater advantage as the decision support system designed by Cafe Coffee Day will act as a medium to find the prospective customer. Cafe Coffee Day by using the data base from the decision support system can identify the prospective customers and thereby ensure that their efforts are in the right direction. Cafe Coffee Day can also improve their customer relation by “ensuring regular feedbacks from them”. (David, 2008) This can be done by developing their shops. Cafe Coffee Day needs to see that “customer provide regular feedback as this will help to work on the areas which will help to improve the relation with the customers”. (David, 2008) Cafe Coffee Day can implement this by ensuring that their coffee outlets are “accessible and offer free internet wireless access so that more customer pour in and they are able to provide feedback by using the technology” (David, 2008) thereby ensuring that customer relationship with the coffee chain strengthens. Cafe Coffee Day to promote their relationship with the customer can make use of the latest technology and ensure that there is rapid growth. Cafe Coffee Day can make “use of you tube and customers by using it can visualize the satisfaction and rating of other customers who have visited their coffee shop thereby enhancing the performance”. (CRM, 2010) This will act as a boost as the penetration level of internet will help Cafe Coffee Day to reach far flung areas. Cafe Coffee Day will be able to deliver on the promises and will be able to expand it to other markets as customers by reading the blogs and watching the videos ascertain themselves regarding the potential and quality the coffee shop provides to the customer and the satisfaction derived. This experience can further be enhanced by “loading short movies made by Cafe Coffee Day on you tube which will show the ambience, variety, service, and pleasure the customer gets and also the different loyalty programs and services they can avail”. (CRM, 2010) This will act as a boost to the coffee shop and provide them with wider opportunity to deal with and also give a larger customer base. Customer relationship strategy will help the coffee giant to improve their performance and ensure that they are able to deliver better services. The methodology to develop customer relationship is based on the following which will help to improve the brand image. Television: Cafe Coffee day has tied up with television through various programmes which helps to promote the store at the same time improve customer relationship. Cafe Coffee Day has tied up with Channel V, Zee English and other music channels to improve its popularity. (Toshowe & Stanley, 2005) This is building a strong consumer relationship as they are finding it easy to associate with the product. Ticket sales promotion: Cafe Coffee Day has been involved in the ticket sales of various programmes and events. This has given them additional popularity and has helped to build customer relationship. The promotion f different events like WWF, Elton John and Bryan Adams have added to the popularity and ensured a mechanism to build customer relation. (Toshowe & Stanley, 2005) Tie Up’s: Cafe Coffee Day has tie up’s with different brands and products which helps to promote the stores by providing free coupons. Cafe Coffee Day has tied up with Levis, Scooty, Liril and various other products to ensure that customers visit the coffee shop which is helping in customer relationship. (Toshowe & Stanley, 2005) Association with movies: Cafe Coffee Day has also been associated with various movies as a media partner. Also many scenes have been shot at various coffee shop which has increased the popularity and enabled the coffee giant to improve their popularity (Toshowe & Stanley, 2005) thereby strengthening their relation whit customers. Sales Promotion: Technique: Cafe Coffee Day has resorted to different loyalty programs and techniques to push sales. (Toshowe & Stanley, 2005) This has made them increase their share in the market and also by providing proper services the coffee giant has been able to increase customer relationship. Future of CRM Customer relationship management is going to gain prominence in coming years. With competition intensifying and companies looking for ways to capture and retain the customer this will hold prime importance. Companies will be lying stress on the fact that maintaining healthy relation with the customer is stressed upon. Cafe Coffee Day and other providers will also ensure that technology and strategies are crafted to ensure loyalty and delivering on the promises to ensure satisfaction for the customers. Conclusion Cafe Coffee Day on the basis of the different techniques and mechanism develop proper customer relationship technique. This will help Cafe Coffee Day to work on important aspects. It will also create customers for the future as ensure that they remain loyal. Proper usage of customer relationship technique will help to Cafe Coffee Day to deliver quality service. This will help to manage the customer better and will act as a medium to gain advantage for the future. Thus, using VRM techniques will benefit Cafe Coffee Day and will be able to develop a big market for the future. 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