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TATA STARBUCKS

MARKET ANALYSIS-LAUNCH OF COFFEE KIOSK IN PUNE

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COFFEE INDUSTRY

85 g6 Kg

Indian View

•Growth rate 40% over last 5 years•Café market in India $150 million (INR 678 crore)•Coffee retailers cover 170 out of 3000 in India(2011 reports)•The instant coffee segment share 74.7%(2009)-led the market•Café industry is currently one of the biggest and fastest growing•Organized Market INR 600 crore (20% of total domestic coffee consumption-INR 3000 crores)

Image source: http://www.casestudyinc.com/coffee-day-brand-strategy-india

Market trends

•Expected growth in coffee consumption,predominantly in the instant coffee segment•Rural markets and semi urban markets-drive consumption

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ESTABLISHING

COMPETITIVE

ADVANTAGE

“More than a cup of coffee”

Identify itself with customers societal endeavors

Positioning strategy: Where people can indulge in

conversations with a cup of coffee

Target Customers-Young age group 16 to 38

COMPETITION

Major competitor :Market Experience

Customer/Supplier loyaltyStrong Positioning

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SWOT Analysis-Coffee industry India

Strengths Weakness

Opportunities

Threats

•High Brand Visibility•Ethical and Environmental practices•Excellent Marketing and Positioning skills•Tata as a cultural fit for Starbucks will help building core competencies of each other

•India is a huge and potential market , so is Pune•Young population•English speaking population•Growing middle class and increasing spending power of population

•India-Tea based culture•Homegrown brands dominate the retail coffee market•Increasing health consciousness•Visiting cafes is not a frequent habit among Indian’s

•Image of luxury coffee outlets•High cost of coffee•Certain rigid and standards policies at outlets•Aimed at out-of-home coffee consumption-affect TATA-Barista alliance

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DAVID AAKER’s- DIMENSIONS OF MARKET FORCES

1. Market Size

2. Market Growth Rate

3. Market Profitability

4. Industry Cost Structure

5. Distribution Channel

6. Market Trends

Larger population in the age group 25-34 (Refer Exhibit 1 & 2)Limited coffee houses in Pune(Refer Exhibit 3)In few years Revenue > Cost ,hence profitabilityWith effective pricing policy 20% lower than BaristaDistribution Channel(Exhibit 4) increase in per capita income, evolving retail chain , increased performance

Why??it will

work in PUNE…

Note : Kindly click on the hyperlinks to refer to the Exhibits

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The primary target market for starbucks coffee company Pune should be the young both male and female from the age 16-38.

The market is well educated and come from middle class to upper middle class population and out of home coffee deinking culture is catching up.

The international appeal of Starbucks will add upon to the culture

The highly trained baristas of Starbucks, its technologies and processes will surely act as Key success factors of the company.

Besides its alliance with Tata coffee to source high quality Arabica coffee

Thus considering all the factors from analysis it is concluded that we should go ahead with the business plan.

CONCLUSION

THANK YOU

Pune per capita income higher than India'sTNN Aug 5, 2008, 03.58am IST

PUNE: The Information Technology (IT) and Bio-Technology (BT) sectors have driven Pune's booming economy to a high per capita income of Rs 46,000 per annum, which is 50 per cent higher than the country's.The claim has been made in the Pune Municipal Corporation's (PMC) Environment Status Report (ESR) for 2007-08, which was tabled before the General Body on Thursday.

Exhibit 1 :Extract from TOI ,PuneDetails : Increase in per capita income of Pune

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Exhibit 2 :Census detailsDetails : Demographically suitable for coffee kiosk

Exhibit 3 :Map overviewDetails : Coffee houses in Pune

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Exhibit 4 :Distribution Network –Starbucks IndiaDetails : Distribution Network

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