Case Study Assignment

case study
Storm in a coffee cup
Does the socio-economic mindset of the marketing manager drive the brand's image? Do trendy brands need trendy mindsets?
Meera Seth
Subhash Nayyar had never expected this. Farzana Mistry, marketing head of the Cuppa Café (CC) business, was suggesting that she would resign. Startled and confused, he told her to hang on while he sat in his huge room and thought. At 52, he had settled in a comfort zone with his ideas and ideology. But the CC business under Farzana Mistry had suddenly whipped up a whole new set of arguments which Minot's traditional tea and coffee business could never have. The CC chain of cafes were doing great under her, and he was not about to upset that. No doubt, last evening's meeting had challenged her ideologies, but Subhash didn't think he was going to replace her. Four months ago, his marketing director, Arun Adlaka, had begun to shake this comfort zone a bit. "CC is yet ordinary. It has to now take off to the 'wow' stage," he had said. "It looks different in every locality, but take Barista and McDonalds, which look the same everywhere. That sameness has a quality of reassurance. You need to work on the CC brand more closely. Right now it means many things in different areas... I cannot sell tea or coffee like that in a nation where the chaiwala also stands for something tangible!" Three years ago, Minot India had spotted opportunity in setting up coffee houses. It tied up with small Udipi-style coffee shops (only the one on Breach Candy was a shoe shop in the old avatar), and assisted them in decor and management. Thus, they now had 10 Cuppa Coffee cafes in Mumbai, each with a history of its own and, hence, each with varying expectations. But all that changed with the standardised new décor, management, processes, etc. All this thanks to Farzana. It was amazing for Minot that the business had gained acceptance in 14 months, for Minot had no experience in retailing. Nor did Farzana, who had slid into her new role from beverage sales management. Farzana rose up in life the hard way, went to B-school, and was a very keen people's person. This is what qualified her for the job - her uncanny ability to connect with people and instantly knows their needs. Add to that the fact that she had been in the beverages business long enough and was great on insights and market pulse; she knew what sold and what did not. Yet her appearance belied her competence. Dressed in non-descript salwar kameez, slightly plump with a hard-core Mumbai accent, she laughed easily and a lot and usually engaged people with great ease. At work, she was very friendly, easy with the staff, slapped backs and urged performance. At home, she had a practising chartered accountant husband and two kids whose 'Tuesday/Thursdays ice candy at Five Gardens' and 'Saturdays at Mc Donald's' schedule was known to all at Minot. Minot's senior management found her honest, sincere and hard working, with no ulterior motives, smart with the market, high on morals and values - in short, a solid, dependable, on-the-go manager. Farzana derived a lot of her cues on coffee house marketing from her own needs, most being functional and some rational. Farzana, a careful spender, sought value and saw her target audience in the same way: intelligent, value seekers who step in and out of cafes to refresh and chat. In her opinion, most people were hard-working souls who took occasional breaks; "Yes, that's what Bombay is about," she had said, and she was the archetypal Bombay gal, not one of those who idled away time at mom's expense and indulged in tiramisu for no reason in the middle of the day. Nor was she a frump; she was a mix of the old and the new, and that was what made her so credible. For example, she loved cars and told her audience once with uncanny frankness that the coolest thing about driving was having a Coke on the dashboard. Thus she picked up cues from the smart ones, loved these little acts of perceived style and applied the affordable formula to look trendy. She was aware that her reality bordered on the boring, so a Coke on the dashboard brought her cheer. The more he thought about it, the more it seemed to Subhash that Farzana's success with the business lay in her ability to separate herself from it, see the business as a means of serving needs, no matter that those needs did not really exist in her orbit. The franchises trusted her and felt comfortable raising issues with her. The overall tone and pace she seemed to have set for the cafes did not make the man on a scooter feel alienated; she had often pointed out that other coffee houses which the common man could afford to stop by for a refreshing breath appeared inhibiting, even overwhelming. He would stand outside the glass walls but never manage to come in. So, the entry barriers at CC were low.

Yet, for all this, what Arun had seen was disharmony. "If one café differs from the other significantly, then there is no branding to bind the two," he had said. "The cafes vacillate between mass image and premium image. In Dadar they are mass, in Breach Candy and at the malls they are premium, and the Café in Andheri swings between the two! I attribute these differences to the fact that most of these were erstwhile small lunch homes and Udipis have a small exposure to retailing refreshments but are far removed from café habits. They are a mixed bag; therefore, you have to have a brand manager (BM) to pull up the dissonance and deliver uniformity."

Arun felt Minot needed to groom itself in modern services, as it was distanced through its main commodity business. Yes, Minot did brand its tea and coffee, but retailing was different. "My take is," he said, "it's time for us to hire a BM who can give CC the necessary facelift: emotionally, rationally and functionally. Right now we are all over the place. Besides, we have only Barista and Coffee Day to go by. There is some Starbucks experience to study too, but then, this is India. The Starbucks model may not be right for our mixed bag of cultures and SECs. For example, do we even know if our cafes should be premium only in demeanour, or can they have a mix depending on locality? And if so, how do we do this without eroding brand equity? We must encourage Farzana to hire a BM."

Arun, in fact, had another subtle doubt. A doubt he was unable to vocalise sensibly. He told Subhash: "Without any offence to Farzana, we need a young street runner kind of BM, someone more with the young segment who understands bars and cafes and recreation habits from their youthful perspective. Face it, we appreciate youth but we are unable to forecast its drives. It's a fact, Subhash, that our perspective is limited by our core business. We need a BM to drive the image to an extent, a BM who is young and 'with it'." Farzana was delighted. Of course, she said. CC was old enough to have a BM.

And that was how Tanya Vazir was hired. Tanya, a 28-year old account planner, understood value as much as the premium end of the market. She was very friendly, she had seen coffee houses globally, knew her brew, was a caffeine addict (black, no sugar), wore business suits with natural make-up and was dating her ex-creative director - a fact she expressed candidly. In her 'get to know me' chat with the CEO and Farzana, she mentioned her fitness regime which included an hour at the gym 'to burn the calories gained on lager'. A very matter-of-fact lady, she had a distinct way with words. Her English was some odd accent, not easy to place, and had oodles of confidence - an attribute Farzana felt Minot needed urgently for the café business.

In the course of their chats, Farzana learnt that Tanya was brought up in a middle-class convent, grew up with a single mom and a brother who joined the army later. Their aunt in the US had paid for their education while mom went back to nursing college. Both aunt and mom instilled in her confidence and self esteem. Her mother was a nurse in Dubai and Tanya lived with and looked after her brother, who had been incapacitated in a war.

Farzana looked at Tanya, this confident, business-suit wearing, lager drinking 28-year old. Only eight years her junior. She party-hopped on weekends, was seen on Page 3 thanks entirely to her savvy boyfriend, and was better known for her work with street children. Tanya, with this incomprehensible mix, waved away her Page 3 appearances with: "It's a great opportunity to see the other side of India. I have only used it as a wand to change the make-up of my brand management!"

Within the first few weeks as Tanya was finding her feet, a promo that Farzana was proposing ran into trouble with the franchisees. Farzana had proposed that a 'chess game' contest be launched at outlets to increase consumer engagement and enhance positioning of an 'open, intelligent and fun' image of CC. But franchisees saw it as a waste of time. The tables would be covered for too long and only a coffee would sell per person in two hours of table cover - 40 minutes gone and all they give the winner is a 20 per cent off on chocolate cake, and that means no margin there as well.

Tanya was silent through the interactions, watching and assimilating as Farzana explained painstakingly: "Look at Barista, since that's where you want to get! They have Sudoko challenges that help attract 18-25, college goers with high disposable incomes. The younger the crowd, the more the buzz, the higher the sale of snacks, and older people will be magnetised as well. Isn't that what we need to do with this chess promo?" But the franchisees didn't see that, arguing it was too much time investment and low sales.

Tanya was startled. If Farzana was so democratic, the promo was never going to take off, she knew. Sixteen months into the business and the franchisees were non-starters. Yes, she realised that they were ex-small restaurant owners... they never had to promote their business in the past. People just came, ate, burped and left. To have promos to sell just coffee was not making sense to them. 'What has been done so far to upgrade their business sense, their market sense and their feel for target audiences?' she wondered.

Three weeks later, the CEO called Tanya to assess her feelings on the brand and to allow for brand management to work independently. "I have to be candid and please do not take offence," said Tanya. "One, I do not get any sense of brand ownership by the franchisees. Two, our own vision for the brand is low. I didn't think we wanted to be like Barista! I came with the vision that CC had to be a class by itself!

Farzana smiled and said: "I agree Tanya, but they are small businessmen and it will take them time to assimilate all this. Their heritage does not let them dream big or aspire for the higher; hence, they are tight-fisted and laid back." Tanya swung around to face the CEO: "In this business, there is no time for mercy or teaching. Others are swinging and we are still cajoling and pleading. This does not make sense. Let's admit we picked up franchisees who were convenient for business but inconvenient for strategy. And anyway, 'small beginnings' is no excuse. Shedding an old mindset is not impossible! This is a business where you spend recklessly to achieve the optimum result. This is not a food and drinks business, but an indulgence business. The stakes are different and so are the ploys. The franchisee has to promote indulgence. Indulgence is the consumer trigger! How can you sell indulgence to a consumer if you don't believe in it yourself?

"This business is not about sales and top line. This business is first about building a name and a desire in the consumer's head. He must see your neon lights and walk in as if mesmerised. He does not have to want a coffee at that point, you see? A coffee shop is not there to serve a need, dammit, it is there to create a desire! You beckon, you attract, and the consumer should walk in and throw himself at your feet."

Farzana cleared her throat and said "Tanya, that will take time...," but before she could say more, Tanya slapped the table and said: "The market does not wait! The youth do not wait! You are thinking of a business that caters to pontification and planning. Coffee shops are impulse, darling! It's for adventure, reckless indulgence! That's why we throw in a Black Forest and not bean sprouts! Cuppa Café has to celebrate coffee drinking like a ritual!"

Farzana was now a tad bit annoyed. Shaking her head, she said: "Let's get this right, Tanya. Cuppa Café is a stop between shopping, walking, working, eating, living. It is that!" The CEO began to say something, but Arun gestured for him to listen to their arguments. Presently, Tanya said: "Tell me Farzana, when you were in college and got bored, what did you do?" Farzana smiled easily and said: "Oh I read a book or went for a walk..."

There you are!" said Tanya dramatically. "When today's young get bored, they do neither. They play video games like Counter Strike or go mall hopping, eat, or browse like wild on the Net. Or they stand together and stare at life because life is unfolding slower than their mind imagines! Today's young are far too different Farzana. Those who don't understand their drives fall by the wayside. The cafes you have in mind are for the tired in body, whereas these young are tired in the mind, tired of the pace!"

"Isn't that a very restricted view of the business?" asked Farzana. "Yes, the young have money and time and want some fun, but that is not the only segment we are catering to."

Tanya felt they were getting lost in the debate. Promos had their place in the marketing arsenal, but not before putting in place a strategy, she felt. The debate carried on:

Tanya: I'd rather make the place fun with guitars and sudoko sheets anyway.

Farzana: That costs money and I can't see that the franchises will pay for it.

Tanya: Then we must take a price increase on the coffee. For the young, fun is drinking a latte and eating a Black Forest, strumming an odd guitar.

Farzana: A collegian will spend Rs 40 on a coffee and Rs 35 on a piece of cake for a little pointless fun?

Tanya: But shouldn't fun be pointless? You may think it's pointless, but for him to sit there with his gal and sip coffee, talking about music albums, is heaven! Besides, most people go to coffee bars to be around cool people. The fact that some of that 'cool' is rubbing off is a big high at any age, not just at 20! It gives them a sense of achievement through association.

Farzana: But the Rs 40 is not making any sense. The franchisees will not be convinced.

Tanya: Farzana, you have to be convinced before you can convince others. Just go beyond the price to what the product is. Cuppa Coffee is more than coffee at Rs 40. It's not at all about the price line; that's the point you miss. It's about an image of fun. Coffee bars are great cults. Starbucks have their own music label and they play their music again and again; and consumers buy it because they buy into the piece of information that says music is cool! The coffee is the smallest part of an experience called Starbucks. It is the experience of bonding, of coolness, of indulgence, of luxury, even defiance. Now, what if we create a Cuppa Coffee band and enroll cool youngsters to cut music, which we will play again and again at all our cafes?

Farzana: Tanya, you are already packaging the brand without developing it... we are only 16 months old.

Tanya: And I am saying we are sixteen months old and we have not yet got an image! OK, let us look at what a coffee bar does for the consumer. It is association with cool, bonding with peers, a place to sit, relax, indulge - as Starbucks put it, the third place outside of home and office. It is, in short, one of the forms of new luxury... paying a super premium for a conventional commodity, for the experience factor. People are willing to pay this amount for the Cuppa Coffee experience. And that is why Starbucks costs $4! And that is why I would pay more to shop from a Target vs a Wal-Mart. That is why a Coke tastes better at Rs 30 from PVR. Farzana, this is the new lifestyle and a price increase is not a sin!

"Neither am I positioning CC for only the young. I may be 25 and I may love rock, but that does not mean that whenever I stop for a coffee I want to be reminded that the marketer knows I am 25 and love rock! There is a lot more to me than being 25 and a rock fan. I have my needs for quiet moments where I like to see my coffee, hear the sugar cube drop in and look at spaces around me that are tidy and orderly. I don't want to walk into a place that is overcrowded - and don't expect me to like it because I am 25! I don't want to walk into a restaurant where chairs are overflowing with jackets and shopping bags and people shouting... why do marketers think that, at 25, I have no bone that wants elegance and quiet?

Farzana: Then you should go to a 5-star hotel and use their coffee shop, maybe?

Tanya: Now you are making music! Very good. But at 25 I also do not want to pay Rs 275 for a cup of coffee and sit in an environment that is dreary and reminds you of silent zones. I am talking of a coffee shop that has the serenity of a 5-star coffee shop with the price levels of a Barista with a plus for the difference they make!

Subhash could see that both women came from completely different worlds. The worlds had similar objects, but both envisioned and experienced them differently. In the world of Farzana, for instance, objects were used only if they had a context in one's life. In the world of Tanya, all objects had to be experienced, known and felt - then choices were made. Farzana chose based on perceived knowledge, while Tanya made choices based on experiential knowledge. Why, even the process of converting data into information depended on assumption and secondary knowledge in one and primary knowledge in the other.

When the two ladies left the room, Arun sighed. The CEO looked at him from under his eyes and said: "I don't know about you, but I think I just got a whiff of a segment I didn't know existed!" And Arun said: "Today we are talking positioning, competition, etc. CC needs a different mover and shaker... and that person cannot be Farzana. She has to go not because she is ineffective or incompetent; she has to go because the brand just changed!"

Subhash was quick to thunder, "No! We are going to see more of these times. They have to learn to coexist; it's their lot. For example, take Lifebuoy. It is a lovely brand, plain speaking. It does not promise more than it can deliver and has a nice homely jingle. Farzana would do wonders with that brand - imagine the kind of solid values she would infuse the brand with like honesty, integrity and responsibility. Give that to Tanya and she will drive all the integrity out from it. She will try to create a lifestyle brand out of Lifebuoy. She may create an extension called Lifebuoy Luxury and give it an image like Lux! Equally, a brand like Louis Vitton will be wrecked in the hands of Farzana, as long as she does not learn to walk the world of luxury brands. But the point is, a Lifebuoy will coexist with a Louis Vitton, and so will Farzana and Tanya. Both skills are very critical, but the question remains: how can both find common ground?"

But Arun was worried: "Will the two of them work well together? Imagine, you and I are eight years apart in age and so are they... so why do their differences rankle?" Subhash grinned and said: "Because you and I both belong to a world where our socio-economic mindsets are not in conflict. Both of us come from a period of scarcity to one of inadequacy, that's the only difference we have known. But between Farzana and Tanya, even eight years is heaven and earth. Let's say it's the difference between caution and economic freedom that's really the genesis. The whole mindset is different Arun...

"The young live the present moment more fully, without anxiety for the future. For them, the future depends on experiencing the present completely. Therefore, Tanya's lot know their kind. She is comfortable dealing with them; she knows them as people. Therefore, she knows how to target them. Farzana's lot does not know them, or perhaps she thinks she knows them. It's secondary data. Brand management is 99 per cent what you are and 1 per cent of secondary data, no?"