Q&A: K Ramakrishnan, president - marketing, Café Coffee Day

Café Coffee Day (CCD) has successfully established its standing in the market as a youth brand. Any plans of expanding that target base to involve an older age-group?

I believe that extremely successful brands are those that most sharply define their target consumers. Our target consumer is from the age-group of 17 to 24, and we like to remain that way. Of course we get people from all age groups in our café, because we have various verticals, like high street verticals, corporate verticals, hospital, highway, in shop, etc, and each one of them has a different demography, but the feel of the brand is the same.  In order to suit a different demography, we might tinker with the offering, but we don’t tinker with what the brand stands for.

Do you perceive the entrance of a player like Starbucks in the fray as a threat?

Surely an iconic brand like Starbucks will come and expand the market. But all the benchmarks in this business so far, have been set by CCD in India. Our knowledge of India is a big enough strength; I don’t think we need to worry about another player entering the market. The bigger threat for the business would be the players in the business getting complacent. When you are competing for mind space, anything is competition; IPL is competition, a great movie is competition, and not necessarily another coffee brand but whatever occupies your mind space.

CCD has not been aggressive on the ATL front over the past two years. How do you explain that?

There is a huge change in the way marketing is being done these days. Ten years ago, marketing was 75% communication, today it has become 25% communication and 75% consumer insight exercise. What matters is how much you understand your consumer and what you convert out of that to present a business opportunity from those insights. For communication, we have two big media, one is the café itself. There are 1270 cafes; you look at it as 1270 billboards. That way, we are as much in ATL as anybody else.

Over 1.2 million fans on Facebook, how are you engaging them?

We are conversation hubs in real life, and that’s what we do on the social network as well. We listen to conversations but we don’t interfere. That helps us to understand current areas of interest, pin points, facilitates instant feedback, gives us an opportunity to right a wrong, and allows us to co-create products with the customers. We are not entertainers, our engagement is in the form of good offerings, good services, and in ensuring an involvement with the customer in co-creation of products.

CCD Lounges (in Bengaluru and Delhi) have gained popularity of late. Any plans of launching such lounges in Mumbai?

We have 33 such lounges in India so far. Delhi has eight; Bengaluru has six, Chennai, Hyderabad, Dehradun, Chandigarh, and Pune have the rest. We started with setting them up at Bengaluru and Delhi at the same time. And once you have created an infrastructure, you have to expand in that city to be able to justify the investment made. In the next few months you’ll find at least two lounges in Mumbai.   These lounges are based on three spokes operation, alternate brewing (making espresso shot in multiple ways), ‘mixology’ (using seemingly dissimilar ingredients to make coffee with interesting flavours), and global cuisine (at the lounge you have a resident kitchen and a chef). 

Do you believe there’s a market in smaller towns as well? If yes, why has CCD not gone into those markets?

There’s as much demand in a small town as there is in a big town. But do we have the ability to reach quality food, quality beverage in time, consistently? No, we don’t. We need a good supply chain, good cold chain, and a good vendor base. At this point, we have plenty of opportunity within the space that we are operating in at present. Therefore, we are going to take expansion into smaller towns a little slow.

How about taking CCD out of India?

We already have some 20 cafes outside India, mostly in Europe. We even have a decent presence in Pakistan, but we believe in the India story. The whole world is coming to explore opportunities in our country; our belief stays in tapping more and more of the domestic market at the moment.