A Brand management presentation

IIPM-PGP/FW.2009-2011 SECTION-B1 Rachita Revankar 52

Introduction
y Barista Coffee is a chain of espresso bars in India,

headquartered in Delhi

y Founded in 1997 by Amit Judge

y Fastest brand to make it to the list of super brand's and is

ranked among the top 50 phenomenon's that changed India

About Barista
Barista Coffee is a chain of espresso bars in India, headquartered in Delhi. Barista currently has espresso bars across India, Sri Lanka and the Middle East. It was founded in 1997 by Amit Judge and was part of his group of companies. He sold part of the equity to first Tata Coffee.

About Barista
Then after he and Tata Coffee fell apart, Sterling then bought over the firm.

In 2007, Sterling divested all their stake to Lavazza.

Barista Coffee Company is currently owned by Lavazza, Italys largest coffee company. Barista was the fastest brand to make it to the list of super brand's and is ranked among the top 50 phenomenon's that changed India.

Pricing
y Barista has a Skim Pricing Policy. They began with a higher price,

and skimmed the cream for the market.

y With the sudden spurt of growth in number of outlets, came the

benefits of economies of scale.

y Because of this, they have been able to gradually lower their prices,

and appeal to different segments of their target market.

y Currently, their prices are the lowest they have ever been, and they

can competitively match their prices against Caf Coffee Days prices.

Pricing
y The prices are constantly changing though, and the last 1-year

has seen 3 changes (mostly reductions) in prices.

y This gradual price reduction meant that Barista could maintain

its profit- maximization policy until it could earn large cost savings because of the benefits of high volume.

y The main factors that affect their pricing are their cost of goods

sold. The costs are quite high because imports a majority of its products and product- sources.

Process

y The order and delivery process at Barista is based on self-

service, where a customer goes up to the counter to place his order, and goes back to the counter to pick his delivery once it is prepared.

Positioning
y Consumer Profile:
y According to research, over 65% of Baristas customers are in the

15- 30 age- group.

y The majority of these are students and young urban

professionals.

Brand Image
y Barista positions itself as a brand for anyone who loves coffee. y Their products, services and outlets are more like the traditional

European cafs, where people would meet for the love of coffee, and for an intellectual appealing time.
y They position their outlets as a place where the world meets, y And they look to appeal to anyone in the 14- 60 age group that loves

good coffee and looks for a nice quiet time.

Products
y Baristas product mix constitutes a wide range of products that

appeal primarily to traditional coffee lovers.

y Their products themselves are traditional products with traditional

names.
y Food items like croissant, pastas, and sandwiches are

complimentary to their coffee, and project a very classic image of Barista.

y Their merchandising also consists of primarily coffee related

products like coffee beans, coffee machines, etc.

VALUATION USING MULTIPLE EARNING METHOD

 NET PROFIT: 25 CRORES  MULTIPLYING FACTOR: 10  BRAND EQUITY: 250 CRORES

FACTORS

WEIGHTED RATING SCORE

WEIGHTED SCORE

a VOLUME BUSINESS OF PRODUCT RANK IN THE MARKET TOP THREE LESS THAN THREE MARKET SHARE PERCIEVED VALUE PROFITABLITY MARKETING EXPENSETO TOTAL SALES STATUS OF PRODUCT ON LIFE CYCLE SCOPE OF LIFE EXTENSION TOTAL 10 15 10 5 15 15 15 15 10 10 100

(b)1

4 9

(a*b) 36

13

65

12 13 4 8 4 4

60 65 4 24 4 12 270

VALUATION USING RKS MODEL

INDEX SCORE = TOTAL WEIGHTED SCORE * 100 500

270 * 100 =54 % 500

VALUATION USING RKS MODEL

y CALCULATION OF BRAND EQUITY y NET SALES*INDEX SCORE y 80 CRORE*54 %=43.2 CRORE

THANK YOU