Customer Satisfaction Survey at Café Coffee Day: Navin

Navin
Harshal
Saatvik
Rahul
Sandeep
Abhishek
CUSTOMER SATISFACTION SURVEY

AT CAF COFFEE DAY
A PROJECT ON BUSINESS
RESEARCH METHODS
Abhishek BV
Roll No. 55
Harshal Chichghare Roll No.73
Rahul Gollamudi Roll No.75
Navin Babu E S Roll No.81
S Saatvik
Roll No.96
Sandeep RajBhushan Roll No.97
Group 3 Section B
Agenda
INTRODUCTION
COMPANY BACKGROUND
LIVE BUSINESS PROBLEM
APPROACH
MANAGEMENT DECISION PROBLEM
RESEARCH PROBLEM
RESEARCH OBJECTIVES
RESEARCH SUB-OBJECTIVES
HYPOTHESES
RESEARCH METHODOLOGY
QUESTIONNAIRE
DATA ANALYSIS
INTERPRETATION
CONCLUSION
REFERENCES
INTRODUCTION
This study intends to determine an improved marketing strategy for Coffee

Day Xpress based on customer feedback
Why Measure Customer Satisfaction?
Understand the expectations of the customers
It is important to make a product that the customer wants available
when he/she wants it.
Customer retention
Delighted customers are profitable. It's widely accepted that it is at
least five times more profitable to sell to an existing customer than
to find a new customer. More important, the difference between
satisfied customers and very satisfied customers can make a big
difference in customer repeat business and profits.
INTRODUCTION
Assess performance, assign priorities and allocate resources

By conducting a representative survey of customers at Coffee Day
Xpress, it is possible to identify the products and brands that sell well
and bring in more profits compared to growing or stagnant ones.
By doing this, it becomes easier to assign priorities to the products
during sales and marketing and thus, resource allocation can be done
efficiently, in terms of advertising budget, aggressive selling, franchisee
benefits and retailer incentives .
Increase customer orientation in the company.

The satisfaction surveys help keep a finger on the pulse of the customer
and thus, aligns the companys working in tune with the customers
needs which ultimately proves beneficial to both parties
To highlight the publicly perceived strengths and weaknesses of

the brands
Satisfaction surveys can be designed to specifically ask the customers
to point out what they think are the defining attributes of a particular
product or service. This way, every brand under the umbrella can be
categorized according to its own strengths and weaknesses as
perceived by the customers. This will help in assessing the longevity of
a product and also helps in pushing for improvements from within the
company towards this product.
To understand how the company stands against its competitors in

the market
Customer satisfaction surveys can include comparative ranking, where
the customer indicates his/her preference for a particular brand over
another. A similar kind of exercise will help Coffee Day Xpress gauge
how the customer views the brand in comparison to other competing
brands like Barista and Costa Coffee.
COMPANY BACKGROUND
Cafe Coffee Day
Business: Cafes
Revenues: Rs 510 crore (approx.)
Presence: 918 outlets in 139 cities (excluding four in Vienna and two in
Karachi)
Plans: 2,000 stores in India in four years; 100 abroad in three years
Coffee Day Express
Business: Grab & Go kiosks selling coffee, beverages, quick eats. Spotted
at malls, corporate premises, airports, railway stations
Presence: 999 outlets Plans: 1,200 by end of fiscal 2011
Coffee Day Beverages
Business: Coffee vending machines

Presence: 14,000 Plans: To expand number of installations to 18,000
COMPANY BACKGROUND
The caf market in India is estimated at $150 million (Rs 678

crore). It has been growing at 40 per cent over the last five years.
Caf Coffee Day is the clear market leader in this segment both by
retail footprint and revenue. Caf Coffee Day plans to extend its
footprint further by doubling the number of its cafs to 2,000 by
2014. International chains like Gloria Jeans, Coffee Bean & Tea Leaf
and Illy Caf have entered the Indian market recently and have a
limited footprint.
Coffee day currently enjoys a market share of 60%, followed by

Barista with 25% and the rest with 15%. Coffee day is owned by
Amalgamated Bean Coffee trading Co. known as ABC. Its overall
revenues stood at Rs.850 Cr, out of which Rs.630 Cr was
contributed by Caf Business owned by it. In caf business it sells
in two different formats
LIVE BUSINESS PROBLEM
Indias per capita coffee consumption, at a nascent 75-80 gm stage, is set

to see a push from coffee retail chains that are looking at rapid expansion
in the face of 35-40 per cent annual growth. Growing youth spending,
lack of alternative hang-outs, and a growing number of office complexes
will drive this market. The homegrown Caf Coffee Day (CCD), Italian
Barista Lavazza and Costa have around 1,250 cafes across India. According
to industry estimates, there is scope for another 5,000 outlets close to
offices, colleges and malls.
CCDs revenue split essentially comprises of beverages and Food. While

beverages contribute nearly 60-65% to the top line, Food &
merchandise cumulatively contribute around 35-40%. The competition in
the caf business has become even more intense with the entry of players
like Barista & Costa. The core business of these players has remained
coffee based products and will continue to do so although diversification
is one of the routes adopted for improving top line growth. Hence there is a
need to measure the current level of customer satisfaction, analyze brand
preferences and pinpoint areas for further improvement.
MANAGEMENT DECISION
PROBLEM
To determine an improved
marketing strategy for Coffee
Day based on customer
feedback.
RESEARCH PROBLEM
Measure customer satisfaction using
a survey based on marketing mix
components, on the Coffee line of
Coffee Day Xpress.
RESEARCH OBJECTIVES
RESEARCH OBJECTIVES
Product/Service:
Analysis of customer perception of the variety and
quality of coffee beverages on offer at the outlets
Measurement of the satisfaction of customers with
attitude of the staff
Price:
Determining the willingness of the customers to pay
the prices as per the rate card
RESEARCH
Place/Distribution:
OBJECTIVES
Verify the availability of products as and when demanded

at the outlets.
Analysis of customer perception of convenience of outlets
location
Promotion:
Quantification of customers attitude towards promotional
schemes and incentives
Research Sub-objectives:
Measure current level of customer satisfaction (overall)

Gap analysis to identify key areas for improvement
Competitor analysis
Identify customer perception towards the brand as a whole.
HYPOTHESES
HYPOTHESIS 1:
H0 (Null Hypothesis): The current level of satisfaction is below
average
H1 (alternate Hypothesis): The customers of Coffee Day Xpress are
satisfied with the current offerings in coffee.
HYPOTHESIS 2:
H0 (Null Hypothesis): Satisfaction is not affected by the marketing
mix components.
H1 (Alternate Hypothesis): Satisfaction is a function of the
marketing mix components.
HYPOTHESIS 3:
H0( (Null Hypothesis): The customer perceive the brands to be
inferior/similar to competing brands.
H1 (Alternate Hypothesis): The customers perceive the brand to be
better than competing brands.
Sources of data:
Primary Questionnaires
Secondary Websites and newspaper/magazine articles
Sampling Design
Sample Size: 103
Sampling type: Convenience/Judgment Sampling
Research Design
Descriptive Research: To determine the current customer
satisfaction level and the areas for improvement
Techniques of Data Analysis

Multiple Regression to identify the relationship between
customer satisfaction and each element of marketing mix.
T-Test for competitor analysis and satisfaction level
FACTOR ANALYSIS to determine underlying factors of
customer satisfaction
Questionnaire
Data Analysis Survey

Results
Product/Service:
Analysis of customer perception of the variety and
quality of coffee beverages on offer at the outlets
From the survey results, we see that the average rating that the customers
have given to
Variety = 2.54/5.00
Quality = 2.75/5.00
Here, 3/5 signifies a neutral opinion.
Therefore, the results show quite a significant level of dissatisfaction
amongst customers.
Also, we try to determine the weightage that the customers have given
these two factors.
From the results, we see that the average weightage (out of 100) given to
these 2 factors are:
Variety = 16.24
Quality = 19.30
Both these values are above the neutral value of 14.29 which is obtained
by assigning equal weightage to all 7 factors under consideration.
Price:
Determining the willingness of the
customers to pay the prices as per the rate
card
The survey results show that the customers have assigned a

weightage of 16.48% to Price as a deciding factor, which is a
significant number and above the neutral 14.29%.
Also, it is observed that the customers have rated price at an
average value of 3.35/5.00.
This is the 2nd highest rating given to any factor only next to
promotions (3.55).
This shows that the customers not only consider price as a
significant decision factor but have also rated Cafe Coffee Day
favourably in this regard.
The values show that customers are on average, willing to pay the
prices as per the rate card.
Place/Distribution:
Verify the availability of products as and when demanded at
the outlets.
Analysis of customer perception of convenience of outlets
location
The survey results show that the customers have given an

average rating of 3.01 with regards to the availability of
products when demanded.
This is a fairly neutral opinion, as shown in the pie chart
below.
With regards to the convenience of the outlets, the survey
throws up a figure of an average weightage of 14.17
assigned to this factor, which is below the neutral value of
14.29.
Also, the average rating assigned by the customers to
convenience is fairly low, at only 2.69. The customers
dissatisfaction is reflected in the chart below
Promotion:
Quantification of customers attitude towards promotional
schemes and incentives
The survey shows that the customers have assigned only
a lowly 8.37% weightage to promotion as a deciding
factor.
However, the price factor for CCD was given a good rating
of 3.35/5.00
FACTOR ANALYSIS
Factor analysis
Factor Analysis
Factor Analysis
This shows that there are four
underlying factors affecting customer
satisfaction:
Factor 1: Variety, Quality, Flavor,
Attitude, Taste and Service or
PRODUCT/SERVICE
Factor 2: Convenience, Availability
or PLACE
Factor3: New Product, Promotion,
Advertising or PROMOTION
Factor 4: PRICE
T-Test for Customer

Satisfaction
Applying One tailed t-test on the sample with a test value of 3.18, we can
conclude that customer satisfaction is slightly below average level.
Hence there is significant scope for CCD to improve upon the same.
We will try to explain the same with a comparative analysis
COMPARATIVE STUDY
COMPARATIVE STUDY
Paired 2-sample t-test for comparative analysis shows

that CCD and its major competitor in the market, Barista
differ in the following parameters:
CCD scores better in quality of coffee based
beverages, convenience of location, pricewillingness
Barista scores better in quality on non-coffee
beverages, ambience
Customers are indifferent between CCD and
Barista in terms of staff attitude and availability
of demanded products
MULTIVARIATE REGRESSION
Multivariate regression to determine the model for
Customer Satisfaction based on the various marketing mix
parameters gives the following results:
The model is explained significantly by factors 1,2, 3
which pertain to PRODUCT/SERVICE, PLACE AND PRICE.
Factor 4 is insignificant
There is medium degree of association between the
variables, as shown by the value of R and R^2
CONCLUSION
We see that Barista has scored significantly better than
CCD in terms of non-coffee beverages and ambience
This shows that CCD should concentrate on the non-coffee
beverages like hot and cold tea, fruit beverages and icecream based beverages where Barista is currently preferred
by customers.
Coffee Days average ratings of the variable are quite low,
which signifies a scope for improvement.
CCD scores low on factors of Variety, Quality, Attitude,
Promotions and Convenience, despite the apparent
superiority to Barista.
CCD should concentrate on introducing more variants in its coffee line,

which is hugely popular. At the same time, they can look at
introducing and heavily promoting their other beverages
CCD should look at launching a premium segment Caf chain, like
the Lavazza by Barista, which provides more refined drinks albeit at
higher price
CCD should look at expanding by having outlets in a little
unconventional areas away from the usual heavy traffic roads,
college-nearby and near-workplace locations. They have started
towards this by having outlets in malls but the activity has to be more
aggressive
CCD should invest in training its Caf staff on manners, service and
waitering. This is important for an in-caf experience and any bad
experience will lead to loss of customers
CCD should look at product bundles so customers can avail additional
benefits.
CCD should look at entering semi-rural and semi-urban areas where
there is a large growing nouveau rich population
CCD has recently started taking up institutional contracts. This activity
should be spruced up.
REFERENCES
Caf Coffee Day executives at Community Center, East of
Kailash: Mr.Asif Ansari, Marketing Manager, Caf Coffee Day
Caf Coffee Day website: www.cafecoffeeday.com
Marketing Research 6th edition, by Malhotra and Dash
Search Engines www.google.com and similar sites
THANK YOU

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Navin

CUSTOMER SATISFACTION SURVEY

This study intends to determine an improved marketing strategy for Coffee

Assess performance, assign priorities and allocate resources

Increase customer orientation in the company.

To highlight the publicly perceived strengths and weaknesses of

To understand how the company stands against its competitors in

Cafe Coffee Day

Coffee Day Express

Coffee Day Beverages

Business: Coffee vending machines

The caf market in India is estimated at $150 million (Rs 678

Coffee day currently enjoys a market share of 60%, followed by

LIVE BUSINESS PROBLEM

Indias per capita coffee consumption, at a nascent 75-80 gm stage, is set

CCDs revenue split essentially comprises of beverages and Food. While

Verify the availability of products as and when demanded

Measure current level of customer satisfaction (overall)

Techniques of Data Analysis

Data Analysis Survey

The survey results show that the customers have assigned a

The survey results show that the customers have given an

T-Test for Customer

Paired 2-sample t-test for comparative analysis shows

CCD should concentrate on introducing more variants in its coffee line,

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