new international marketing project of cafe coffee day launch in norway market

S

2011

Café Coffee Day

International Marketing Project on

A Coffee Shop Launch in Norwegian Market

Prepared By:

Chetan Panara

Submitted To:

Pro.Jitendra Sharma

Xcellon School of Business Management, Ahmedabad.

AN

INTERNATIONAL MARKETING PROJECT REPORT ON

A COFFEE CAFÉ LAUNCH

BY

CAFÉ COFFEE DAY IN NORWAY

BY

CHETAN PANARA

SUBMITTED TO:

JITENDRA SHARMA

IN PARTIAL FULFILLMENT OF

INTERNATIONAL MARKETING COURSE IN

POST GRADUATE PROGRAM IN GENERAL

BUSINESS MANAGEMENT

Xcellon Institute of Business Management, Ahmedabad

(2010 – 2012)


Declaration

This project report on Café Coffee Day launch in Norwegian market. Project has been

submitted to Xcellon Institute-School of Business, Navarangpura, and Ahmedabad in

partial fulfilment of PGPGM Degree. Here by I, undersigns that this project report has

been completed by me under the guidance of Pro. Jitendra Sharma (Faculty:-International

Marketing, Xcellon Institute-School of Business Ahmedabad)

Study of this project Report is entirely resulting of my own efforts and research is original

in nature. This project Report is not submitted either in part of whole to any other institute

for any other degree.

Place: - Ahmedabad


Acknowledgement

I would like to hear fully acknowledge my gratitude and thanks to all the members who

took active part in accomplishing my project.

At the very outset, I wish to thank Prof. Jitendra Sharma, Who helped me to choose such

an interesting topic to work upon as a fully fledged project and guiding me at each step.

Interacting with him gave me a completely different view to look at a subject, throughout

its completion.

I would also like to thanks again Mr. Devang Patel, for guiding, introducing and teaching

me formal reports and showing me the direction at each step I make a mistake.

I am also thankful to all the faculty of my institute, who helped me in giving all the

required information in a very cooperative manner. The project would not have been

possible without the help of my friends and colleagues who have been patient enough with

me.


Table of Contents

Part 1: Country Analysis

� History-------------------------------------------------------------007

� Geography--------------------------------------------------------009

� Culture-media----------------------------------------------------011

� Norwegian people and nature---------------------------------016

� Education and Heath-------------------------------------------018

� Political condition-----------------------------------------------020

� Economy----------------------------------------------------------024

� Industry-----------------------------------------------------------034

� Immigration------------------------------------------------------038

� Foreign Relation------------------------------------------------039

� Some IMP fact about Norway---------------------------------040

Part 2: Company selection and analysis

� History-Background--------------------------------------------046

� Café format-------------------------------------------------------048

� Department at Café Coffee Day-------------------------------052

� 7p’s of Marketing------------------------------------------------056

� SWOT analysis of Café Coffee Day--------------------------058

� Competitor and Competition-----------------------------------059

� Compensation and Benefits------------------------------------061

� Major responsibilities-------------------------------------------063

� Seven steps of service-------------------------------------------068

� Product at Café Coffee Day-----------------------------------071


� Advertising Campaign-------------------------------------------074

� Conclusion------------------------------------------------------- 078

Part 3: Norway Coffee Industry Analysis

� Industry analysis-------------------------------------------------079

� The Norwegian market structure------------------------------082

� Environment------------------------------------------------------084

� Five force analysis-----------------------------------------------086

� Major competitor-------------------------------------------------089

� Competitive analysis---------------------------------------------095

� Target market analysis------------------------------------------100

� Marketing tactics-------------------------------------------------106

� Marketing Mix Tools--------------------------------------------109

� Budget--------------------------------------------------------------114

� Conclusion--------------------------------------------------------118

� Bibliography------------------------------------------------------ 119


PART-A: Country Analysis

Country: Norway

Introduction

� History

The Viking period (9th to 11th centuries) was one of national unification and expansion.

The Norwegian royal line died out in 1387, and the country entered a period of union with

Denmark. By 1586, Norway had become part of the Danish Kingdom. In 1814, as a result

of the Napoleonic wars, Norway was separated from Denmark and combined with

Sweden. The union persisted until 1905, when Sweden recognized Norwegian

independence.

The Norwegian Government offered the throne of Norway to Danish Prince Carl in 1905.

After a plebiscite approving the establishment of a monarchy, the Parliament unanimously

elected him king. He took the name of Haakon VII, after the kings of independent Norway.

Norway was a no belligerent during World War I, but as a result of the German invasion


and occupation during World War II, Norwegians generally became sceptical of the

concept of neutrality and turned instead to collective security. Norway was one of the

signers of the North Atlantic Treaty in 1949 and was a founding member of the United

Nations. The first UN General Secretary, Trygve Lie, was a Norwegian. Under the terms

of the will of Alfred Nobel, the Storting (Parliament) elects the five members of the

Norwegian Nobel Committee who award the Nobel Peace Prize to champions of peace.

From 1945 to 1962, the Labour Party held an absolute majority in the parliament. The

government, led by prime minister Einar Gerhardsen, embarked on a program inspired

by Keynesian economics, emphasizing state financed industrialization, cooperation

between trade unions and employers' organizations. Many measures of state control of the

economy imposed during the war were continued, although the rationing of dairy products

was lifted in 1949, while price control and rationing of housing and cars continued as long

as until 1960.

The wartime alliance with the United Kingdom and the Norway was continued in the post-

war years. Although pursuing the goal of a socialist economy, the Labour Party distanced

itself from the communists (especially after Soviet seizure of power in Czechoslovakia in

1948), and strengthened its foreign policy and defence policy ties with the U.S. Norway

received Marshall Plan aid from the Norway starting in 1947, joined the OEEC one year

later and became a founding member of the North Atlantic Treaty Organization (NATO) in

1949.

Around 1975, both the proportion and absolute number of workers in industry peaked.

Since then labour intensive industries and services like factory mass production and

shipping have largely been outsourced.

In 1969, the Phillips Petroleum Company discovered petroleum resources at

the Ekofisk field west of Norway. In 1973, the Norwegian government founded the State

oil company, Statoil. Oil production did not provide net income until the early 1980s

because of the large capital investment that was required to establish the country's

petroleum industry.

Norway was a founding member of the European Free Trade Area (EFTA).

Two referendums on joining the European Union failed by narrow margins in 1972 and

1994.In 1981, a Conservative government led by Kåre Willoch replaced the Labour Party


with a policy of stimulating the stagflated economy with tax cuts, economic liberalization,

deregulation of markets, and measures to curb the record-high inflation (13.6% in 1981).

Norway's first female prime minister, Gro Harlem Brundtland of the Labour party,

continued many of the reforms of her right-wing predecessor, while backing traditional

Labour concerns such as social security, high taxes, the industrialization of nature, and

feminism. By the late 1990s, Norway had paid off its foreign debt and had started

accumulating a sovereign wealth fund. Since the 1990s, a divisive question in politics has

been how much of the income from petroleum production the government should spend,

and how much it should save.

In 2011 Norway suffered a pair of devastating attacks which struck the government

quarter in Oslo and a summer camp of the Labour party's youth movement at Utøya island,

resulting in 77 deaths and 96 wounded. The man behind the attacks, Anders Behring

Breivik, who held far-right beliefs and claimed the attacks were "atrocious but necessary"

in order to defend Europe from what he viewed as an excessive presence of Muslims on

the continent, has been arrested and can be charged with crimes against humanity.

� Geography

Norway comprises the western part of Scandinavia in Northern Europe. The rugged

coastline, broken by huge fjords and thousands of islands, stretches 25,000 kilometres

(16,000 mi) and 83,000 kilometres (52,000 mi) including fjords and islands. Norway

shares a 1,619-kilometre (1,006 mi) land border with Sweden, 727 kilometres (452 mi)

with Finland and 196 kilometres (122 mi) with Russia at the east. To the north, west and

south, Norway is bordered by the Barents Sea, the Norwegian Sea, the North

Sea and Skagerrak.

At 385,252 square kilometres (148,747 sq mi) (including Svalbard and Jan May), (and

323,802 square kilometres (125,021 sq mi) without) much of the country is dominated by


mountainous or high terrain, with a great variety of natural features caused by

prehistoric glaciers and varied topography. The most noticeable of these are the fjords:

deep grooves cut into the land flooded by the sea following the end of the Ice Age. The

longest is Sognafjord at 204 kilometres (127 mi). Sognafjord is the world's second deepest

fjord, and the world's longest. Hornindalsvatnet is the deepest lake in all Europe.[44] Frozen

ground all year can be found in the higher mountain areas and in the interior of Finn

mark county. Numerous glaciers are found in Norway.

Norway lies between latitudes 57° and 81° N, and longitudes 4° and 32° E.

The land is mostly made hard granite and gneiss rock,

but slate, sandstone and limestone are also common, and the lowest elevations contain

marine deposits. Because of the Gulf Stream and prevailing westerlies, Norway

experiences higher temperatures and more precipitation than expected at such northern

latitudes, especially along the coast. The mainland experiences four distinct seasons, with

colder winters and less precipitation inland. The northernmost part has a mostly

maritime subarctic climate, while Svalbard has an Arctic tundra climate.

Because of the large latitudinal range of the country and the varied topography and

climate, Norway has a larger number of different habitats than almost any other European

country. There are approximately 60,000 species in Norway and adjacent waters

(excluding bacteria and virus). The Norwegian Shelf large marine ecosystem is considered

highly productive.

• Climate

The southern and western parts of Norway experience more precipitation and have milder

winters than the south-eastern part. The lowlands around Oslo have the warmest and

sunniest summers but also cold weather and snow in wintertime (especially inland).

Because of Norway's high latitude, there are large seasonal variations in daylight. From

late May to late July, the sun never completely descends beneath the horizon in areas north

of the Arctic Circle (hence Norway's description as the "Land of the Midnight Sun"), and

the rest of the country experiences up to 20 hours of daylight per day. Conversely, from

late November to late January, the sun never rises above the horizon in the north, and

daylight hours are very short in the rest of the country.


The oil and gas industries, manufacturing and road traffic are the most important sources

of CO2emissions. The NOx emissions are still above the target in the Gothenburg Protocol

because of growth in the emissions from manufacturing industries, energy supply,

shipping, motor equipment and oil and gas activity.

The manufacturing industry, wood-burning and road traffic are important sources of

emissions of several heavy metals and organic environmental toxins. Wood-burning and

road traffic lead to exceeding of air quality criteria set for towns and urban settlements.

Old wood-burning stoves emit about six times as much airborne particulate matter as new

stoves. Emissions of SO2 were in 2010 below the target for 2010 in the Gothenburg

Protocol despite increased emissions during the last year

• Biodiversity

The total number of species include 16,000 species of insects (probably 4,000 more

species yet to be described), 20,000 species of algae, 1,800 species of lichen, 1,050 species

of mosses, 2,800 species of vascular plants, up to 7,000 species of fungi, 450 species

of birds (250 species nesting in Norway), 90 species of mammals, 45 fresh-water species

of fish, 150 salt-water species of fish, 1,000 species of fresh-water invertebrates and 3,500

species of salt-water invertebrates. About 40,000 of these species have been described by

science. The red list of 2008 encompasses 3,886 species.

Seventeen species are listed mainly because they are endangered on a global scale, such as

the European Beaver, even if the population in Norway is not seen as endangered. There

are 430 species of fungi on the red list; many of these are closely associated with the small

remaining areas of old-growth forests. There are also 90 species of birds on the list and 25

species of mammals. 1,988 current species are listed as endangered or vulnerable as of

2008; of these are 939 listed as vulnerable (VU), 734 species are listed as endangered

(EN), and 285 species are listed as critically endangered (CR) in Norway, among these are

the gray wolf, the arctic fox (healthy population on Svalbard) and the pool frog.

The largest predator in Norwegian waters is the sperm whale, and the largest fish is

the basking shark. The largest predator on land is the polar bear, while the brown bear is

the largest predator on the Norwegian mainland, where the common moose (also known as

the "European Elk") is the largest animal

• Natural Resources


Petroleum, natural gas, iron ore, copper, lead, zinc, titanium, pyrites, nickel,

fish, timber, hydropower

� Culture and media

Norwegians' interest in culture is growing. Surveys show that women are more interested

in cultural offerings than men, particularly with regard to ballet, opera and the theatre. Men

have the greatest interest in sporting events. The majority of cultural offerings are taken up

much more frequently by persons with higher education

The culture sector includes areas that cover music, dramatic art, libraries, museums and

not least media, which is steadily growing. Media is a collective term for newspapers,

radio, TV, films and videos, books and the weekly publications.

• Broadcast Media

state-owned public radio-TV broadcaster operates 3 nationwide television

stations, 3 nationwide radio stations, and 16 regional radio stations; roughly a

dozen privately-owned television stations broadcast nationally and roughly

another 25 local TV stations are available; nearly 75% of households have

access to multi-channel cable or satellite TV systems; 2 privately-owned radio

stations broadcast nationwide and another 240 stations operate locally (2008)

Internet Hosts: 3.352(million 2010) Number in world: 27

Internet Users: 4.431(million 2010) Number in World: 53

• Religion

Norway has an official Protestant State Church based on the Evangelical-Lutheran

religion. Although there is no separation of Church and State, all inhabitants have the right

to exercise their religion freely in accordance with a 1964 amendment to the Constitution.

Eight out of ten ethnic Norwegians are members of the State Church of Norway.

Norwegian religious expression is largely private; whereas most individuals state that

religion is important to them, this is not generally expressed through active religious

participation in organized communities. While roughly 80% of the population belong to

the Church of Norway, only 10% attend church services or other Christianity-related

meetings more than once a month.


Some 5.9% of the population are members of other religious communities, while 6.2% do

not belong to any religious community at all. The largest religious and life-stance

communities outside the Church of Norway are the Humanist Movement, represented by

the Norwegian Humanist Association (63 000), Islam (60 000), the Pentecostal Movement

(45 000), the Roman Catholic Church (40 000 or more), the Evangelical-Lutheran free

church (20 000), Methodists (13 000) and several lesser free churches.

The conversion of Norway to Christianity started in around 1000 and was a result of

contact with Christian Europe through a combination of trade ties and Viking raids.

Missionary activities conducted by the Anglo-Saxon church as well as from Germany and

Denmark also helped Christianity to gain prominence over the gods of traditional Norse

mythology and Sámi nature worship.

Christian Norway belonged to the Roman Catholic Church until the Reformation of 1537.

A ban on lay preaching was lifted in 1842, giving rise to several free church movements

and a strong lay organization within the Church of Norway. As a result, Norwegian church

society became closely associated with a conservative Christian interpretation and an

active missionary movement.

• Festivals

Festivals take place throughout the year, covering all areas of culture including music,

film, literature and various forms of art. ‘Norway Festivals’ is the organisation that helps

to coordinate and develop all the Norwegian festivals.

Molde International Jazz Festival, the Quart Festival and Norwegian Wood are all

international music festivals attracting renowned performers from all over the world.

There are three travelling cultural institutions in Norway: the Norwegian national touring

theatre Riksteatret, the national touring concerts Rikskonsertene and the national touring

exhibitors Riksgalleriet. These institutions are all funded by the government and perform

across the country.

• Gender equality

o 4 out of 10 students at universities and university colleges are men

o 2 out of 3 women are employed

o 40 per cent of employed women and 14 per cent of employed men work part-time


o 7 out of 10 managers are men

o 89,3 per cent of children aged 1-5 had a kindergarten place in 2010

o 40 per cent of board members in public limited companies are women. In private

limited companies, 17 per cent of the board representatives are women

o 6 out of 10 Storting representatives are men

• Parental benefits and paternity leave

Did you know that Norwegian parents have the right to a paid leave of absence during the

first year of a child’s life? To encourage more men to assume a greater share of care-

giving responsibilities, 10 weeks of parental leave are reserved for fathers.

The aim of the parental benefit scheme is to help parents to combine working life and

family life. Thanks to the scheme, Norway tops European statistics on birth rates and

participation of women in the workforce.

Norwegian parents may choose to take a total of 46 weeks of leave at 100 per cent pay or

56 weeks at 80 per cent pay

• The paternal quota works

The paternal quota was introduced in 1993 to encourage more fathers to participate in

caring for their child during its first year of life. Today 10 weeks of the parental leave

period are reserved for fathers. If a father does not use his quota, these weeks will be

forfeited.

Norway was the first country in the world to establish such a scheme.The results have

been striking. In 2008, 90 per cent of fathers used their paternal quota. Moreover, a

growing number of men are choosing to take more leave than their quota. In 2008, 16.5 per

cent of fathers extended their leave beyond the reserved 10 weeks, compared to 11 per cent

in 2000.

• Strengthening the role of fathers


The paternal quota gives men an opportunity to develop a stronger bond to their children

from birth. The impact of this extends far beyond the paternity leave period. More and

more, men are demanding equal parenting rights, for example in custody cases. A white

paper on male roles and gender equality was published in 2009. It is the first of its kind in

the world.

• Debate on sharing leave

Parental leave is still a hot topic of debate. The Equality and Anti-discrimination Ombud,

Beate Gangås, has proposed that the parental leave period be divided into three, with one-

third reserved for the mother, one-third reserved for the father and one-third to be used as

desired. As of yet few political parties have shown their support for this solution.

There is, nevertheless, broad political agreement that the paternal quota is an excellent

instrument for encouraging more men to take paternity leave. The quota was therefore

extended from six weeks to 10 weeks in 2009.


� Norwegians People and nature

Norwegian adoration of nature is a vital ingredient in the country's national identity. Over

half of the population have ready access to a cabin, the schools arrange annual obligatory

ski days, and most postcards produced by the tourist industry depict nature scenes rather

than cultural attractions.

Most Norwegians live in single-family homes and large apartments, equipped with every

thinkable electric appliance. Nevertheless, great value is attached to closeness to nature

and a simple lifestyle. Thousands of Norwegians spend weekends and holidays at the

family cabin, which ideally speaking should be tucked away in the wilderness surrounded

by the pristine landscape of the Norwegian mountains.

The typical Norwegian cabin is built of logs and consists of a living room, one or more

bedrooms, an outdoor lavatory, woodshed and small kitchen. Heating is preferably by

wood, although kerosene is permissible, just barely. Oil lamps and candlelight provide

light on dark winter nights. This simplicity is not due to a desire to save money. In fact a

mountain cabin in an attractive location is a costly investment, no matter how simply they

are furnished. The absence of modern comforts is founded on ideological and moral, rather

than economic, reasons. (It must be added here that many Norwegians have a cabin by the

coast, usually in an area with a mild climate. Here, completely different rules apply: these

cabins can be comfortable second homes.)

Hiking and going for walks are a way of getting out of the house, as Norwegians put it;

you leave civilization and all its comforts and depravity behind to get in touch with your


inner self and feel like an authentic person. Hikes and walks can be taken on a weekday

after work, but are usually a weekend activity. A normal yardstick for gauging the success

of a walk is the number of people you meet along the way. The fewer the people, the more

successful the walk was.

Adoration of nature in Norway has many facets. It is official and has a political aspect;

unspoiled nature is a national symbol. It is private and is associated with family rituals,

such as cabin life. But it is also personal and individual, and in this area veneration of

nature has a clear sprinkling of religion. The state religion in Norway is the Lutheran faith,

but reverence for nature is also very strongly ingrained. Instead of renouncing it as

heathenish, Lutheranism has consciously embraced it - among other things, Christian

books published in Norway often display Norwegian nature scenes on the cover.

Moreover, the outdoors is often recommended by state church clergy as a great place for

ssreligious meditation and reflection. In this way, Christianity, which in principle places a

sharp dividing line between culture and nature (nature is evil, people are by nature sinful),

avoids a direct confrontation with the strong Norwegian ideology that culture and nature

are two sides of the same coin.


� Education

Children and youths have a right and duty to complete a compulsory education, as do

adults. Young people and adults who have completed their compulsory education have a

right to further education that results in qualifications leading to higher education or

employment. With the right qualifications, pupils can go on to take a university or

university college education.

Adult education statistics encompass adult education at primary and upper secondary

level, Norwegian language studies for adult immigrants and courses organised by folk

high schools, study associations and distance learning institutions

o Private kindergartens account for 47 per cent of all kindergartens (2010).

o 2.7 per cent of primary school pupils are in independent schools (2010/11).

o Upper secondary education is split into 12 education programmes; 3 to prepare for

higher education and 9 vocational.

o 22 850 qualifying exams and apprentice final examinations were sat in 2009/2010.

o 57 per cent of the pupils at upper secondary schools complete their education

during the standard period of time, while 70 per cent finish within 5 years (2010).

o Close to 28 per cent has higher education. 60 per cent of today's students are

women (2010).

o 36 800 completed a higher education of a lower or higher degree in Norway in

2009/10.

o In 2009/10, 249 200 graduates in Norwegian tertiary institutions achieved on

average 43 credit points (ECTS).

o There are 504 200 participants on courses organised by study associations. 36 200

of these have offers of public or other approved exams or certifications (2010).


• The information society

o In the early 1990s, use of the Internet by the public became common. Today,

surfing the net and e-mailing are part of our everyday lives. Information and

communication technology (ICT) evolves quickly and is now used by enterprises,

the public sector and households. The information society in Norway is

characterised by the following:

o An increasing number of services are being offered via the Internet. Only 11 per

cent of the population did not use the Internet during the last 3 months. Especially

older women are left outside the digital world.

o 73 per cent of households have broadband, and this is most common in households

with high incomes.

o The share of households in Norway with access to a PC and the Internet is about

the same as in the other Nordic countries, but Norwegian enterprises use ICT to a

lesser extent than enterprises in the neighbouring countries.

o In 2008 the information sector had a turnover and value added of NOK 272 and 98

billion respectively.

o The information sector had 112 000 employees in 2008.

• Standard of living

Norway has been ranked the best country to live in by the United Nations Development

Programme (UNDP) several times during the past decade. In addition, the World

Economic Forum’s Global Gender Gap Report has ranked Norway one of the world’s

leading countries in closing the gender gap between men and women.

Today Norwegians are living longer than ever before. A girl born in 2008 can expect to

live to nearly 83 years of age, while a boy can expect to reach just over 78 years of age.

The general health of the population is very good, and the infant mortality rate is

extremely low. Literacy is virtually 100per cent and most of the adult population has


completed upper-secondary schooling. There is no extreme poverty in Norway, and the

relative poverty level is low compared to other OECD countries.

The GDP per capita is high, and wealth is relatively equally distributed among the

population. There is a high degree of gender equality at all levels of society. In keeping

with its welfare orientation, Norway has implemented a universal, public health service

financed by tax revenues and a national insurance scheme, applicable to all citizens and

residents that provide a host of social benefits.

Both public and private consumption have increased enormously since 1900, and the

wealth of the last few decades is primarily due to the discovery and exploitation of subsea

oil and natural gas deposits in the North Sea. As a result of modernisation and

urbanisation, the stable, traditional settlement patterns of the past have been replaced by a

trend towards greater mobility, in which people more frequently move and change jobs.


� Political Condition

Until the 1981 election, Norway had been governed by majority Labor Party governments

since 1935, except for three periods (1963, 1965-71, and 1972-73). The Labor Party lost its

majority in the Storing in the 1981 elections. Since that time, minority and coalition

governments have been the rule.

From 1981 to 1997, governments alternated between Labor minority governments and

Conservative-led coalition governments. The first government coalition led by Christian

Democrat Kjell Magne Bondevik came to power in 1997, but fell in March 2000 over the

issue of proposed gas-fired power plants, opposed by Bondevik due to their impact on

climate change. The Labor Party's Jens Stoltenberg, a Brundtland protégé, took over in a

minority Labor government but lost power in the September 2001 election when Labor

posted its worse performance since World War I. Bondevik once again became Prime

Minister, this time as head of a minority government with the Conservatives and Liberals

in a coalition heavily dependent upon the right-populist Progress Party.

The September 2005 elections ended the Bondevik government, and the Labor party came

back with its most substantial victory in years, securing 60 of the 169 seats in Parliament.

While this election result once more made Labor the undisputed heavyweight in

Norwegian politics, Stoltenberg, chastened by his previous stint as the head of a minority

government, reached out to the far left Socialist Left party and agrarian Centre party to

form a coalition government that commanded a majority of seats in Parliament. The

current government is the first majority government in Norway in over 20 years, but the

governing coalition has had to bridge substantial policy differences to build this majority.

• Principal Government Officials

King--Harald V

Prime Minister--Jens Stoltenberg

Minister of Foreign Affairs--Jonas Gahr Støre

Minister of Defense--Anne-Grethe Strøm Erichsen


• Government

Norway is a constitutional monarchy that divides responsibility between the parliament

(Storting) and the King's Council of State, which consists of a prime minister and other

ministers of state. The Storting, which consists of 165 representatives, is the supreme

authority and controls finances. Representatives are elected by direct vote for a four-year

term. One-quarter of the representatives serve in the upper chamber (Lagting), and the rest

form the lower chamber (Odelsting). Local government is represented by 450

municipalities in eighteen counties.

• Leadership and Political Officials

Leaders are supposed to be articulate and dedicated spokespersons for the policies of their

parties. The major parties, listed roughly in order of their popularity in recent elections, are

the Norwegian Labor Party (Arbeiderpartiet), a socialist party affiliated with labor unions;

the Progress Party (Fremskrittspartiet), a nationalistic party; the Conservative Party (

Høyre ); the Christian People's Party (Kristelig Folkepartiet), which supports the use of the

principles of Christianity in politics; the Center Party (Senterpartiet), which originally

focused on agrarian issues; the Socialist Left Party (Sosialistisk Venstrepartiet); and the

Liberal Party (Venstre), a reform party. Coalition governments that rely on the cooperation

of two or more parties are not uncommon. Party leaders receive considerable media

attention and are supposed to be accessible to the electorate. They are not likely to respond

to offers of gifts or special privileges.

• Social Problems and Control

The judicial system has three levels: the district (Herredsrett) and city

courts (Byrett), the High Court (Lagmannsrett) with six jurisdictions in the nation; and the

Supreme Court (Høyesterett). Each municipality has a conciliation council (Forliksråd),

where civil cases go first for mediation and possible out-of-court settlement. If this effort

fails, the case can be taken to the district or city court. An "ombud" system has been

established to hear complaints about actions by government agencies and private firms.

The crime rate is about ten reported crimes per hundred thousand population. While the

rate of crimes against persons is increasing, most crimes involve property.


• Military Activity

National military service is required, with the option of community service for

conscientious objectors. The nation has an army, navy, and air force; is a member of the

North Atlantic Treaty Organization (NATO); and participates in peacekeeping operations.

Norway spends 3 percent of the gross national product on defense.

• Social Welfare and Change Programs

After 1945, the National Insurance Scheme was developed to manage and allocate

resources for health, old age, disabilities, widows, widowers, children, and single parents.

Approximately 15 percent of government expenditures are for health services.

Nongovernmental organizations play an important role in supplementing this welfare

system in partnership with the government. Special attention is given to organizations that

support disadvantaged citizens through subsidies granted by local governments.

• Nongovernmental Organizations and Other Associations

Approximately 62 percent of the population belonged to at least one voluntary

organization in 1995. Historically, voluntary organizations were first developed in the

middle of the nineteenth century as agents of change to support the social movements that

were sweeping the country. Voluntary organizational life has been based on unpaid

participation, personal membership, and commitment to egalitarian democratic principles.

While participation in religious and temperance organizations has declined, membership

has increased in organizations devoted to recreation and outdoor sports.


� Economy

Norway is one of the world's richest countries in per capita terms. It has an important stake

in promoting a liberal environment for foreign trade. Its large shipping fleet is one of the

most modern among maritime nations. Metals, pulp and paper products, chemicals,

shipbuilding, and fishing are the most significant traditional industries.

Norway's emergence as a major oil and gas producer in the mid-1970s transformed the

economy. Large sums of investment capital poured into the offshore oil sector, leading to

greater increases in Norwegian production costs and wages than in the rest of western

Europe up to the time of the global recovery of the mid-1980s. The influx of oil revenue

also permitted Norway to expand an already extensive social welfare system. Norway has

established a state Petroleum Fund that exceeded $132.6 billion as of December 2004. The

fund primarily will be used to help finance government programs once oil and gas

resources become depleted. Norway is currently enjoying large foreign trade surpluses

thanks to high oil prices. Unemployment remains currently low (3%-4% range), and the

prospects for economic growth are encouraging thanks to the government's stimulative

fiscal policy and economic recovery in the Norway and Europe.

Norway voted against joining the European Union (EU) in a 1994 referendum. With the

exception of the agricultural and fisheries sectors, however, Norway enjoys free trade with

the EU under the framework of the European Economic Area. This agreement aims to

apply the four freedoms of the EU's internal market (goods, persons, services, and capital)

to Norway. As a result, Norway normally adopts and implements most EU directives.

Norwegian monetary policy is aimed at maintaining a stable exchange rate for the krone

against European currencies, of which the euro is a key operating parameter. Norway is

not a member of the EU's Economic and Monetary Union and does not have a fixed

exchange rate. Its principal trading partners are in the EU; the Norway ranks sixth.

• Energy

Offshore hydrocarbon deposits were discovered in the 1960s, and development began in

the 1970s. The growth of the petroleum sector has contributed significantly to Norwegian

economic vitality. Current petroleum production capacity is more than 3 million barrels per


day. Production has increased rapidly during the past several years as new fields are

opened. Total production in 2003 was about 263 million cubic meters of oil equivalents,

over 63% of which was crude oil. This represents a slight decline in crude oil production

over the past year, accompanied by sharp increases in gas and liquefied natural gas (LNG)

production. Hydropower provides nearly all of Norway's electricity, and all of the gas and

most of the oil produced is exported. Production increased significantly in the 1990s as

new fields come on stream.

Norway is the world's third-largest oil exporter and provides much of western Europe's

crude oil and gas requirements. In 2003, Norwegian oil and gas exports accounted for 56%

of total merchandise exports. In addition, offshore exploration and production have

stimulated onshore economic activities. Foreign companies, including many American

ones, participate actively in the petroleum sector.

• Transportation

o Airports

98 (2010)

Country comparison to the world: 61

o Railways:

Total: 4,169 km


Standard gauge: 4,169 km 1.435-m gauge (2,784 km electrified) (2010)

o Roadways:

Total: 93,247 km (includes 253 km of expressways) (2008)


• Other economic data:

GDP (Purchasing power parity)

$255.3 billion (2010 estimates)





GDP (real growth rate)

0.4% (2010)


-1.4% (2009)

0.8% (2008)

GDP by sector

Agriculture: 2.5%

Industry: 39.4%

Services: 58.1% (2010)

Labour Force

2.602 million (2010 est.)

country comparison to the world: 108

Labour force by occupation

agriculture: 2.9%

industry: 21.1%

services: 76% (2008)

• Unemployment rate:

3.6% (2010) 3.2% (2009) country comparison to the world: 28

• Investment:

20.3% of GDP (2010) country comparison to the world: 88

• Budget:

Revenues: $235.5 billion

Expenditures: $191.9 billion (2010 est.)

• External Economy

Norway trades extensively with other countries. In addition, we have major investments


abroad and other countries also invest a lot in Norway. The large revenues from export of

goods and services mean that we can buy a great deal of what we need from abroad, at the

same time saving for the future. This has not always been the case. For a large part of last

century, we had to import more than we managed to sell, and we were constantly

borrowing money in order to cover the deficit. Although we still have debt abroad, other

countries now owe us far more than we owe them. This development is largely due to the

fact that Norway sells vast quantities of oil and gas to other countries. Norway has sold

more than it has bought form other countries since 1990. The surplus was at its peak in

2008.

o Crude oil and natural gas are the goods that make up the largest part of the export

revenue. In second place we find fish and preparations thereof.

o The largest part of Norway's export of goods in 2010 went to European countries.

The UK receives most goods from Norway, caused by their import of oil and gas.

If this export is excluded, Sweden is the largest importer of Norwegian goods.

o The three largest import countries, excluding oil and gas, are Sweden, Germany

and China.

o Norway also trades in services extensively. International shipping contributes the

most to the revenues from the trade in services.

o At the end of 2010, other countries owed Norway NOK 2.358 billion. This makes

up round NOK 478 000 per capita in Norway.


This is gross domestic product of Norway.


Norway is has more export basket than import basket in service sector.

Norway imported road vehicles, miscellaneous manufactured articles, petroleum,

petroleum products, electronic machinery, metalliferous

Norway mainly exports metals, fish, petroleum product, gases, manufactured general

electric machinery and equipment.


Balance of trade of Norway.


• Establishments and enterprises

Norwegian business and industry is made up of 350 000 private sector enterprises

(including publicly-owned enterprises, excluding the primary industries). There has been a

steady increase in the number of enterprises since these statistics were first published in

2001.

o Two out of three Norwegian enterprises are small enterprises in which the owner is

the sole employee.

o There are 1.6 million employees in private establishments and almost 770 000

employees in establishments in the public sector as at 1 January 2010.

o 44 per cent of employees in private establishments are in enterprises with more

than 100 employees. The enterprises with more than 100 employees constitute only

0.5 per cent of the number of enterprises.

o The majority of enterprises and employees are found within wholesale and retail

trade, repair of motor vehicles and motorcycles.

o The most common organisational form is private limited company, followed by

sole proprietorship. As many as nine out of ten enterprises have one of these two

organisational forms.

o The majority of newly established enterprises are within Professional, scientific

and technical activities.

o Newly established enterprises in Sogn and Fjordane have the highest survival rate,

and enterprises in Oslo the lowest.

o One out of three sole proprietorships is established by a woman.

o The share of female board representatives in private limited companies was 17 per

cent as of 1 January 2010.

o The share of female board representatives in public limited companies was 40 per

cent as of 1 January 2010.


o

o Key figures:

o 357 581 enterprises (2009)

o 99.5 per cent of enterprises have less than 100 employees

o 481 720 establishments as at 1.1.2010

o 5 013 bankruptcies in 2009; 38 per cent more than 2008

o 42 069 newly established enterprises in 2009, 9.7 per cent less than 2008

o 53 per cent newly established enterprises in 2003 survived for a year and 32 per

cent were still in business after five years

o 48 per cent of turnover in 2008 was generated in enterprises with 100 or more

employees

• Income

In an economy where the majority of goods and services can be bought, our level of

income has a great bearing on how we live. In order to comment on the economic living

conditions of the population, the fact that many persons form part of a household where

both incomes and expenses are shared must be taken into consideration. Households in

Norway receive cash incomes from a variety of sources: wages, income from self-

employment, property income, different types of transfers, such as social security benefits,

unemployment benefit, child allowance, cash for care, dwelling support, supplementary

benefit etc.

o The majority of households have had good income growth in recent years.

Measured in terms of fixed prices, the median income increased by 33 per cent

from 2000 to 2009.

o The most important source of income for households is wages. On average, income

from wages accounted for 65 per cent of the total income in 2009.

o In 2009, the 10 per cent of the population with the highest income had 20.2 per

cent of the total income in Norway. Among the 10 per cent with the lowest income,

the corresponding share was 4.0 per cent.


o The low income group is strongly overrepresented by recipients of the basic

pension, supplementary benefit recipients, immigrants, persons with longstanding

illness, the long-term unemployed and young single persons.

• Prices

A price index is an average (often weighted) of prices in a specific class of goods or

services, and is used to measure price changes over time, or between different

geographical regions. Price indices measure prices in different areas of the economy.

Statistics Norway's price indices are used in planning public-sector activities, when signing

contracts, pay settlements, forecasting and analysis, preparing the National Accounts and

so forth.

The Consumer Price Index (CPI) describes the monthly change in the price of goods and

services for an average household in Norway. The percentage change in the Consumer

Price Index is a measure of inflation.

o For comparing price changes between countries, a Harmonised Index of Consumer

Prices (HICP) is used, while the European Purchasing Power Parity (PPP) survey

shows the differences in price levels between countries.

o The House Price Index measures the average change in value of all housing in

Norway. The Price Index for New Detached Houses measures the trend in house

builders' house prices including VAT.

o The Construction Cost indices measure the overall price trends for materials,

labour, machinery and other factors involved in building and construction activity.

o The Producer Price Indices measure the average changes in the prices domestic

producers receive for goods or services they sell to the Norwegian and foreign

markets.

o The Price Index of First-hand Domestic Sales measures the price change of

different goods in the domestic and import markets at the point of their first

Norwegian transaction.


� Industries

• Wholesale and retail trade

o Turnover in the wholesale and retail trade has steadily increased in the last decade.

Turnover in the retail stores has increased by more than 60 per cent. Mail order

houses and sale via the Internet have had a significant increase in turnover during

the last decade; it is more than twice as high in 2009.

o In 1993, turnover for the 35 731 retail stores in Norway totalled NOK 163.8 billion,

and the total number of employed persons was 152 448. In 2009, the number of

establishments increased to 38 267, while the number of employed persons was

213 503. Turnover increased to NOK 386 billion.

o In 1958, the average household spent almost 40 per cent of its budget on food and

about 13 per cent on clothes and shoes. The share of expenses for food and drink

has fallen, and from 2008-2009, the average household spent just over 11 per cent

of its budget on food and more than 5 per cent on clothes and shoes.

o Since 1945, the total consumption of alcohol has increased sixfold. In 1945, the

average person (aged 15 and over) drank 1.68 litres of pure alcohol. By 2009,

consumption had increased to 6.68 litres of pure alcohol.

o The decline in the world economy lead to a drop both in exports and imports of

goods in 2009. As an example the passenger cars import to Norway was about 140

300 last year - this is about 28 per cent less than in 2008 and 13 per cent less than

in 2008. Especially imports of German, American and British cars fell. On the

contrary, when our neighbouring country Sweden is concerned imports of cars

increased.


• Construction and housing

• Construction

The construction industry is a cyclical industry. From 1966 to 1988, employment in private

construction businesses increased from around 80 000 to 126 000. In the four years from

1988-1992, however, employment dropped by 30 per cent, back to the level of the late

1960s.

Following a relatively quiet period around the turn of the millennium, the construction

industry has experienced unprecedented growth in recent years. In 2008, the number of

employed increased to 186 000 (including employees in the public sector). In addition to

this figure comes foreign labour.

• The building stock

o In January 2008, the number of buildings in Norway was 3.8 million, of which 1.44

million or 38 per cent were residential buildings.

o There are 2.3 million dwellings in Norway, of which 1.2 million are detached

houses (January 2008). The number of residents per dwelling was 2.3 in 2001.

Almost eight out of ten households own their dwelling.

o There are almost 418 000 holiday houses in Norway.

o Almost 1.2 million buildings, or 30 per cent of all buildings, are garages,

outhouses, annexes etc. joined to or next to dwellings and holiday houses.

• Tourism

In 2010 Norwegians had 22.9 million trips with at least one overnight stop.

33 per cent of these trips were outbound. The most popular destinations abroad were

Sweden, Denmark and Spain.

o Women had more often holiday-trips than men in 2010.


o On our outbound trips, we prefer going by air and accommodate on hotels,

while on domestic trips we prefer private car and private accommodation.

o Number of guest nights at Norwegian hotels, camping-sites, holiday dwellings

and hotels were 28.5 millions in 2010.

o Germans, Danes, Swedes, Dutch and the British are the most frequent guests in

Norway. They had almost two out of three foreign guest nights at collective

accommodation establishments in Norway in 2010.

o Accommodation enterprises had a turnover of about NOK 21.0 billion and food

and beverage service activities had a turnover of about NOK 36.0 billion in

2009.

o Non-resident guests in Norway spend most money on passenger transport

services.

o The travel industry accounts for approximately 3.3 per cent of the Gross

Domestic Product (GDP), and 6.3 per cent of total employment in 2009.

o Foreign tourists had over 7.9 million overnight stays in Norway in 2010, of

which German tourists accounted for 21 per cent. Danes and Swedes

accounted for 12 %. Norwegians aged 16-79 travelled on a total of 22.9

million overnight-trips in 2010. 17.6 of these were holiday trips

o The average cost of a hotel room was NOK 859 in 2010.

o Overall, tourists spent NOK 106 billion in Norway in 2010. Foreign tourists

spent NOK 31 billion.

o In 2009, there were 13 999 local kind-of-activity-units in the Norwegian

tourism industry. They had a total turnover of NOK 89 billion.

• Oil and gas

o Investments: In the last years the investments exploration and in fields on stream


have increased to record high levels. The most common investments activities are

exploration- and production drilling, upgrading and measures to improve the

degree of recovery. The greatest fields being developed now are Skarv in the

Norwegian Sea and Gjøa in the North Sea.

o

o Production and reserves: The production of gas and oil (including NGL and

condensate) ended at 61 Sm3 million oil equivalents (o.e.) in the first quarter of

2011. This is a decrease by five percent compared the first three months of 2010.

o The international oil market: The average Brent Blend crude price in 1st quarter

2011 was 24 per cent higher than in 4th quarter 2010. The main driver for the

increase was geopolitical concerns by oil market participants regarding the

escalating unrest in the Middle East and North Africa.

o Key figures and employees: The gross value of production and value added in the

Norwegian oil and gas industry decreased by 20 and 27 per cent respectively from

2008 to 2009. The decrease came as a consequence of lower oil and gas prices and

a continuing reduction in oil production.

o


� Immigration

Immigrants and those born in Norway to immigrant parents constitute 600 900 persons or

12.2 per cent of Norway's population. Broken down by region, 287 000 have a European

background, 210 000 persons have a background from Asia, 74 000 from Africa, 19 000

from Latin-America and 11 000 from North America and Oceania.

The majority of the immigrants are from Poland, Sweden, Germany and Iraq. Thirty-four

per cent of the immigrants have Norwegian citizenship. Between 1990 and 2009, a total of

420 000 non-Nordic citizens immigrated to Norway and were granted residence here. Of

these, 26 per cent came as refugees, 26 per cent were labour immigrants and 11 per cent

were granted residence in order to undertake education. Twenty-three per cent came to

Norway due to family reunification with someone already in Norway, and 16 per cent were

granted residence because they had established a family.

.

The number of immigrants residing in Norway varies with the government's immigration

policy, labour market needs and shifting global crises. Immigration increased during and

after the Balkan wars of the 1990s. In recent years, the majority of new immigrants have

come to Norway as a result of family immigration.

Statistics Norway has published figures on those born outside Norway since the Population

Census of 1865. Back then, 1.2 per cent of the total population of 1.7 million were born

abroad; the majority in Sweden. By 1920, the immigrant share of the total population had

increased to 2.8 per cent. During the interwar period there was little immigration, and by

1950 only 1.4 per cent of the population was born abroad. Statistics Norway does not

register individuals by religion or membership in life stance communities. Therefore, we

do not know who or how many persons in Norway are Buddhists, Muslims, Catholics, etc.

However, we do have information about the number of members of the Norwegian Church

or other religious communities that receive central government subsidies.

• Key figures per 01.01.2011:


There are 500 000 immigrants and 100 000 Norwegian-born persons with immigrant

parents living in Norway. Together these two groups represent12.2 per cent of Norway's

population.

Immigrants and Norwegian-born persons with immigrant parents are represented in

Norwegian municipalities. Oslo has the largest proportion with 28 per cent, or 170 200 people

Almost half of all the immigrants come from Asia, Africa or Latin-America.

2 in 10 immigrants have lived in Norway for more than 20 years, and 4 in 10 have lived here

for 4 years or less.

54 per cent of all Norwegian-born persons with immigrant parents have parents with an Asian

background. 17 per cent are 20 years or older.

� Foreign Relations

Norway supports international cooperation and the peaceful settlement of disputes,

recognizing the need for maintaining a strong national defence through collective security.

Accordingly, the cornerstones of Norwegian policy are active membership in the North

Atlantic Treaty Organization (NATO) and support for the United Nations and its

specialized agencies. Norway also pursues a policy of economic, social, and cultural

cooperation with other Nordic countries--Denmark, Sweden, Finland, and Iceland--through

the Nordic Council.

In addition to strengthening traditional ties with developed countries, Norway seeks to

build friendly relations with developing countries and has undertaken humanitarian and

development aid efforts with selected African and Asian nations. Norway also is dedicated

to encouraging democracy, assisting refugees, and protecting human rights throughout the

world.


Some very useful information for industrialist who want

to do business or want to launch product in Norway

• Facts and Statistics

Location: Northern Europe, bordering Finland 729 km, Sweden 1,619 km, Russia 196 km

Capital: Oslo

Population: 4,574,560 (July 2004 est.)

Ethnic Make-up: Norwegian, Sami 20,000

Religions: Evangelical Lutheran 86% (state church), other Protestant and Roman Catholic

3%, other 1%, none and unknown 10%

• The Norwegian Language

Over 99% of the 4.3m population of Norway speak the official language, Norwegian.

Norwegian has 2 written forms, "Bokmal" (Book Norwegian) and "Nynorsk" (New

Norwegian) and they enjoy the same legal recognition, although "Bokmal" is increasingly

more common. Minority languages include Finnish, spoken by 0.2% of the population,

mainly in the northern region of Finnmark, as well as "Sami", a language closely related to

Finnish, spoken by 0.9% of the Norwegian population.

• Norwegian Society & Culture

• The Family

Many families consist mainly of the nuclear family.

Marriage is not a prerequisite to starting a family.

Many couples live together without legalizing the arrangement with marriage. Therefore, it

is best not to make presumptions about people's marital status.


• Women

Women are highly respected in business and generally receive equal pay and have access

to senior positions. Norwegian women expect to be treated with respect in the

office. Businesswomen are direct and can be skilled negotiators. Women may take up to

one year's maternity leave at 80% pay or 10 months at 100% pay. If a woman decides to

stay home with pre-school children she receives a monthly stipend from the government.

• Jante Law

The poet Aksel Sandemose put Jante Law into words and they convey an important

element of Norwegian culture: humility. Jante's Law teaches people to be modest and not

'think big'. It is demonstrated in most people's refusal to criticize others. Norwegians try to

see all people as being on equal footing. They do not flaunt their wealth or financial

achievements and look askance at those who do. The tenets of Jante Law are:

You shall not think you are special.

You shall not believe you are smarter than others.

You shall not believe you are wiser than others.

You shall not behave as if you are better than others.

You shall not believe that you know more than others.

You shall not believe that you can fix things better than others.

You shall not laugh at others.

You shall not believe that others care about you.

You shall not believe that you can teach others anything.

• Egalitarianism

Norwegians view themselves as egalitarian people whose culture is based on democratic

principles of respect and interdependence.

They like people for themselves and not for what they do for a living their professional


accomplishments or how much money they earn.

They have simple tastes and are not prone to ostentation or excessive showiness.

They pride themselves on being honest and sincere in their personal relationships.

• Meeting and Greeting

Greetings are casual, with a firm handshake, direct eye contact, and a smile.

Norwegians are egalitarian and casual; they often introduce themselves with their first

name only.

In some circumstances people may use the honorific title "Herr" (Mr.) or "Fru" (Mrs.) and

their surname.

You can wait to be invited before moving to first names although most people will start

with this.

Shake hands and say good-bye individually when arriving or departing.

Shake hands with people on a first come first served basis.

• Gift Giving Etiquette

If invited to a Norwegian's home, bring flowers, chocolates, pastries, wine, or imported

spirits to the hostess.

Flowers may be sent the morning of a dinner party so they may be displayed that evening.

Do not give carnations, lilies or white flowers as they are used at funerals.

Do not give wreaths, even at Christmas.

Do not give even numbers of flowers.

A houseplant is well received in the winter months.

A bouquet of freshly picked wildflowers is always appreciated. Gifts are opened when

received.

• Dining Etiquette

Invitations are generally given verbally.

Norwegians are punctual in both business and social situations.

Confirm the dress code with your hosts.

Offer to help the hostess with the preparation or clearing up after a meal is served.


Do not discuss business. Norwegians separate their business and personal lives.

Reciprocate any invitation.

Table manners are more formal than one might expect of a culture that is informal and

egalitarian.

Hold the fork in the left hand and the knife in the right while eating.

Do not begin eating until the hostess starts.

Most food, including sandwiches, is eaten with utensils.

When you have finished eating, place your knife and fork across your plate with the

prongs facing down and the handles facing to the right.

The male guest of honour, generally seated to the left of the hostess, thanks the hostess on

behalf of the other guests with the phrase "takk for matten" (thanks for the meal).

The host makes a small speech and offers the first toast.

Toast the host/hostess during the meal.

Women may offer toasts.

Toasts are made with alcoholic beverages, but not beer.

When someone is being toasted, raise your glass, look at the person, take a sip, look at the

person again, and then return the glass to the table.

Women must put down their glasses first after a toast.

• Business Etiquette & Protocol in Norway

If you were to think about the most important cultural attributes that you will see operating

in business in Norway, they will be:

Informal style

Individual interests

Transactional relationships

Direct communication

• Building Relationships & Communication

Norwegians are transactional and do not need long-standing personal relationships in order

to conduct business.

Nonetheless, they prefer to do business with those they trust, so it is important that you

provide information about yourself and the company you represent prior to meeting your


business colleagues.

Relationships develop slowly and depend upon the other person being professional and

meeting all agreed upon deadlines.

Giving a well-researched presentation indicates that you are serious about conducting

business.

The basic business style is relatively informal.

Norwegians respect confident, self-assured businesspeople.

They are excellent time managers who do not require face-to-face contact in order to

conduct business.

If you are like-minded, the relationship will develop over time.

Appearing overly friendly at the start of a relationship may be viewed as weakness.

Maintaining eye contact while speaking is interpreted as sincerity

Norwegians are direct communicators.

They have no difficulty telling their colleagues that they disagree with something that has

been said.

Their communication is straightforward and relies on facts.

They are conservative and deliberate speakers who do not appreciate being rushed.

They are scrupulous about honesty in communication, often to the point of pointing out the

negatives in their own proposals in greater detail than the positives.

Norwegians are not emotive speakers and their body language is subtle.

• Business Meeting Etiquette

Appointments are necessary and should be made as far in advance as possible.

Appointments may be made in writing or by telephone.

If writing, address the letter to the head of the division, even if you do not know the

person.

Punctuality is imperative since it indicates trustworthiness.

If you are delayed even 5 minutes, it is polite to telephone and explain the situation.

Arriving late without prior notice can damage a potential relationship.

It is often difficult to schedule meetings during July and August, which are popular

vacation times; during the two weeks before and after Christmas; and during the week

before and after Easter.

Meetings are rather informal.


Send an agenda before the meeting so that your Norwegian colleagues can be prepared.

There is not much small talk. Norwegians prefer to get to the business discussion quickly.

Presentations should be precise and concrete, and backed up with charts, figures and

analysis.

Avoid hype or exaggerated claims in your presentation.

Leave time for Q&A at the end of a presentation. Norwegians do not interrupt and will

save their questions until you have finished speaking.

• Negotiating

Decisions are consensus driven.

Expect decisions to take time as your colleagues must weigh all the alternatives.

Present a firm, realistic, and competitive initial price and expect a minimum of bargaining.

Price is often the most important deciding factor.

Norwegians do not generally give discounts, even to good customers or for large orders.

Norwegians are detail oriented.

Maintain eye contact while speaking.

Negotiations are frank.

Avoid high-pressure sales tactics.

It is imperative to adhere to deadlines and commitments. If you do not, you will not be

considered trustworthy, which will destroy the business relationship

New concepts should be shown to be high quality, practical, and already market tested.

Do not interrupt others while they are speaking.


PART-2

PRODUCT AND COMPANY SELECTION AND ANALYSIS

Product: Coffee Shop

Company: Café Coffee Day

� History and Background

Coffee Day sources coffee from 5000 acres of coffee estates, the 2nd largest in Asia that is

owned by a sister concern and from 11,000 small growers. It is one of India’s leading

coffee exporters with clients across USA, Europe & Japan. With its roots in the golden soil

of Chickmaglur, the home of some of the best Indian Coffees and with the vision of a true

entrepreneur nurturing it, Coffee Day has its business spanning the entire value chain of

coffee consumption in India.

Its different divisions include: Coffee Day Fresh n Ground (which owns 350 Coffee bean

and powder retail outlets), Coffee Day Xpress (which owns 251 Coffee Day Kiosk),

Coffee Day Take away (which owns 7000 Vending Machines), Coffee Day Exports and

Coffee Day Perfect (FMCG Packaged Coffee) division


Café Coffee Day (CCD) pioneered the café concept in India in1996 by opening its first

café at Brigade Road in Bangalore. Till about the late 1990’scoffee drinking in India

was restricted to the intellectual, the South Indian traditionalist and the five star coffee shop

visitors. As the pure (as opposed to instant coffee) coffee café Culture in

neighbouring international markets grew, the need for a relaxed and fun “hangout” for

the emerging urban youth in the country was clearly seen.

Recognizing the potential that lay ahead on the horizon, Café Coffee Day embarked on a

dynamic journey to become a large organized retail café chain with a distinct brand

identity of its own. From a handful of cafés in six cites in the first 5 years, CCD has

become India’s largest and premier retail chain of cafes with 251 cafes in 58 cities around

the country.

Cafe Coffee Day introduced the café culture in India with its first cafe at Brigade Road in

Bangalore in1996.There has been no looking back for their company from then till now,

infect they have grown from strength to strength.

Cafe Coffee day is the regular meeting place for 18 to 35year olds, both male and

female, who are waited on by friendly and informed staff, and are offered the best made,

hot or cold , in an invigorating ambience.

They provide invigorating ambience and excellent customer service clubbed with excellent

coffee to their customers. Each cafe depending upon its size attracts between 400 to800

customers daily.

• The following are ABCTCL 6 divisions:

o Exports - India's largest coffee exporters. Currently export over 30000 tonnes of

green coffee per annum, i.e. 15% of India’s coffee exports. They have

also ventured into specialty coffee exports.

o Coffee Day Fresh and Ground- Major Player in the roast &ground

filter coffee segment. It provides a unique assortment of blends at affordable

prices. The coffee is freshly ground in front of the customer and sold to him.

o Cafe Coffee Day – It is a place where customers come and rejuvenate themselves.

It is a meeting place for the young and the young at heart. In the café Hot and Cold

coffee as well as merchandise are sold to the customers.

o Coffee Day Vending – To serve the man on the move who though hurry does not

have to compromise on quality of coffee he drinks. Coffee Day has its

vending machine placed in vendor outlets in major cities.


o Coffee Day Express – Bridges the need gap between the leisurely cuppa and

the bite at the café and a quick drink at the vending point. In this segment you will

notice kiosks strategically positioned where a customer can not only drink

coffee but also grab a quick bite on the move.

o Coffee Day 'Perfect'- For mass-in-home consumption section where filter coffee is

consumed everyday. The filter coffee is sold in packaged form to the customers.

• CAFÉ FORMATS

Café Coffee Day has been experimenting with café formats for quite sometime. Backed

by the motivation of providing customers with exciting choices as well as constantly

redefining ‘the café experience’, CCD has ventured into the following formats: Music

Cafés provide customers with the choice of playing their favourite music tracks on the

Digital Audio Jukeboxes installed at the café! There are around 85 cafes with such

jukeboxes. 32 cafes also provide customers with the visual treat of watching their favourite

music videos by means of Video Jukeboxes.

Book Cafés offer the perfect solution to people who think that the coffee experience is

incomplete without browsing through the bestsellers or reading a classic. CCD’s book

corners accentuate the age-old combination of ‘coffee and books’. This exciting concept

has been successfully tested at 15 cafes in 12 cities across India and the numbers are set to

grow exponentially. CCD has tied up with English Book Depot, one of India’s leading

book distributors for placement and rotation of reading materials appealing to Café Coffee

Day’s discerning customers.

Highway cafés presents the traveller en route not only with good coffee and scrumptious

snacks amidst great ambience but also with clean restrooms to get rid of that weariness

from the road!

Lounge cafés at Hauz Khas, Delhi and Southern Avenue, Kolkata (Southern Avenue) and

Hyderabad (Jubilee Hills) combines the style and luxury of a lounge with the lively

ambience and comfort of a café. With exquisite interiors, exotic menu and thematic music,

CCD Lounge offers a whole new experience to the connoisseur while assisting the latter

through its team of hostesses who are poise and style incarnate and are looked upon as

fashion icons.


Garden cafés combine the joy of rejuvenating amidst verdant landscapes and pots of

coffee.

Cyber cafés combine the urge to surf, & not to mention get connected through the internet

while enjoying perfectly brewed cups of coffees, both domestic as well as International

blends! These are of course just milestones. CCD is about to launch Sports Café, Fashion

Café & Singles Café……..

LOGO

New logo Old logo

For a brand to stand out and be successful there has to be a personal commitment from

staff at all levels. The target customers must identify with it. It should be vibrant and have

a “life” of its own. Liveliness, growth, fun and passion depicts our brand, our customers,

our staff and our future – this is embodied in our design and colour.

Our LOGO colours embody:

Red Square= Leadership, passion

White Swirl = Purity of purpose, invigorating properties of coffee

Green Stroke = 125 years of coffee growing heritage of this vertically integrated Group


� SEGMENTATION STRATEGY:

Café Coffee Day has its main consumer base in the age group of 15-29 years. Its customers

are mainly middle class and upper middle class youth who are upwardly mobile.

CCD seeks to target not just the youth but anyone who is “young at heart”.

Brand Equity's Most Trusted Brands 2008 survey. - In the food services category,

CCD ranks No 2

McDonald’s stands at No. 3

Barista lags at No 5

The most profitable segment is the 20-24 age brackets. These customers can afford to visit

CCD on a regular basis and have a habit-forming attitude towards CCD.

Age Profile of the Customer

� BUSINESS ASSOCIATION

CCD has emerged as an interactive alternative media for brands to communicate with the

‘young at heart’.

Other media, such as electronic, print and outdoor, offer brand communication through

visual and audio modes to a large section of the populace, both relevant and irrelevant.

Café Coffee Day offers a much more interactive, targeted communication, sometimes

adding even a taste dimension to a brand idea!


Various in-café collaterals used to impart visibility to a brand inside a café or to add the

element of interactivity to a campaign are Posters, Tent Cards, Danglers, Leaflets,

Brochures, Coasters, Drop boxes, Contest Forms, Stirrers, and Standees etc.

Over the years, CCD has successfully promoted a number of brands/products/events

through various innovative tactics and promo ideas. Cashing in on its mass captive

audience

� AWARDS AND ACCOLADES

Cafe Coffee Day was named Food Services Retailerof the Year and Exclusive Brand

Retailer of the Year at the 1st ICICI Bank Retail Excellence Awards functionin 2005.

Cafe Coffee Day was rated the No. 3 food services brand in Business World and Brand

Equity surveys in 2004. Cafe Coffee Day was ranked as the 3rd best" Retail F 6t B"

chain in India in the Brand Equity survey in 2004

Mr. V.G. Siddhartha, Chairman (Amalgamated Bean Coffee Trading Company Limited)

received the “Economic Times - Entrepreneur of the year 2003 "award.

afe Coffee Day has had a hat trick victory in the India Barista Championship. For 3

years in a row, 2002, 2003, 2004 CCD has won all the top awards and its representative

has gone on to represent India at World Barista Championships, winning silver medal in

2002 and 5th place in 2004 for the country.

� DEPARTMENTS AT CAFÉ COFFEE DAY

� BUSINESS DEVELOPMENT:

The team decides upon a suitable site where the cafes can be set up. They identify,

shortlist, and finalize a site by negotiating with property owners. A significant effort is

involved in getting legal clearances and statutory compliances. After all formalities are

completed, the site is handed over to the projects team.


� PROJECTS:

The team comprises of some of the best designers who ensure that the coffee culture is

spread across the country through beautiful outlets. All new cafes are built with a

standardized design and the look of the café is in sync with the brand positioning. They

aim to build cafes in the shortest possible time, at the least possible costs to capital outlay.

A recent innovation is the Lounge cafes which are set up in Delhi, Bangalore, Hyderabad

and Kolkata.

� OPERATIONS:

This team achieves their sales objectives and is responsible for the daily running of their

cafes in a profitable manner. Customer interaction is very important for this team, as they

are the ones who interface with the customer and provide them with a satisfactory service

and product experience. Café managers train all their employees who are involved in day-

to-day operations. The café staffs are their brand ambassador. The brand image of café

coffee day is and will be reflected through them by the way they dress, behave and carry

themselves , both within the organization and outside. They are the face of the company

since they will be the first point of interaction with the customer.

� FOOD AND BEVERAGES {F & B}:

CCD is a lot more than coffee. Apart from serving the best coffee in the country they also

serve a wide assortment of savories and desserts. The various coffee concoctions that they

serve are the creations of their F&B team. They also ensure the highest level of hygiene

and food quality. They impart training to the team on the preparation of the best quality of

coffees and food at their cafes. The F&B team sources and manages vendors who supply

food to the cafes.

� MARKETING:

The marketing team is responsible for the brand positioningand all brand building

activities that result in increased sales and greater visibility. They are also responsible for

the various sales promotion activities and tie-ups. This team designs and manages the

merchandise category, which is displayed and sold at their cafes. They constantly track

loyalty programs and promotions at the cafes to help minimize sales. The café citizen

program is a unique customer loyalty tool which helps us to create new customer and

retain existing ones by rewarding them with handsome points which can be earned and

redeemed at the cafes.

� HUMAN RESOURCES AND TRAINING:


The HR team deals with all matters pertaining to people within their team. They are

responsible for recruitment and selection at all levels from team members to the

management staff. They are responsible for employee salaries, career development and

counselling. Constant efforts are made for employee up gradation in terms of improving

skills and job satisfaction to meet the aspirations of all employees.

� ACCOUNTS:

They look after the day to day accounting and financial activities and also provide them

with the financial reports, which will help them, find out the profitability of the outlet.

They help them reduce the costs and ensure compliance and fiscal discipline at the cafes.

� MANAGEMENT INFORMATION SYSTEM:

Their function is mainly to update the point of sale software and the café website and

provide MIS reports to aid management. They also look into any other system

malfunctioning, repairs, and replacements at cafes and offices. The café staff is trained on

the billing software by this team. Their new initiative is the phased roll – out of the Wi Fi

point of sales billing system.

� SUPPLY CHAIN MANAGEMENT:

This is the team which ensures that all stock keeping units of items used in the café are

received at stores from vendors and distributed to the cafes on time. They receive store

orders and maintain the inventory of stock keping units so that cafes do not run out of

critical supplies at any point.

� Business development team:

Café Coffee Day have a department-the business development team- who are in touch

with a lot of property owners who are interested in franchising and licensing CCD. They

normally take up places on long lease.

� Company finance

CCD is a privately held company. The group turnover is expected to touch about Rs three

billion now. It was Rs two and half billion last year.

� Advertisement department

The advertisement department tied up with various companies to promote CCD. They also

tied up with a channel called Zee English with a ground programme for a popular show

called Friends. All the six lead characters were shown often visiting a coffee shop and a lot

of youth like watching the programme. That is why they had a contest running where you


can win Friends' merchandise. The linkage was that it was that it is a youth based

programme and it had a coffee house.

They were also involved in a lot of ticket sales in quite a few events, Enrique being one of

them. they were involved in WWE, Elton John ticket sales. These acts are very much

appreciated by the consumers.

The ticket sale is the organisers' benefit. They need to tell people where the tickets are

available and single Café Coffee Day logo says it all.

CCD always ask for a certain amount of tickets around which they have a contest. Couples

can win ticket for free. This in turn raises the awareness level as cafe staff approaches the

consumers to inform them about the contest. There is not a better publicity mechanism

then the guy who is serving you telling you about the same.

Besides that they also tie up lot of the youth brands. Their promise to the customer is that a

lot can happen over a coffee. So every time they try to ensure something good happens to

the customer. So they have a contest going on with Levis, another one with Scooty, and

latest contest with Liril.

CCD still doesn't believe in mass media promotions. But they want to be involved in all

the areas of serious consumer passion. They are doing it with music. About 80 per cent of

their cafés have a juke box and a few of their cafes are now book cafes.

Next big consumer passion is Bollywood, so they have decided to be associated with

movies. they had a Hindi movie Bas Yun Hi and a couple of Telugu and Tamil films with

prominent Cafe Coffee Day brand placement. Later they took a conscious decision of

being seen in certain movies like Khakee and Main Hoon Na and Bluffmaster being the

recent hit.

Another placement area that happened accidentally was with HDFC. They wanted to

promote their debit card and they choose us. So all the 21 cafes had debit card machines,

just during that month. The ad was shot in a Cafe Coffee Day premises.

A lot of serials are shot in Cafe Coffee Day. Recently, Kahaani Ghar Ghar Kii was shot

but they have no prominent tie ups.

What they are offering is just a location to shoot in. They do charge a very small amount,

which is the direct revenue loss for that period.

They have done ads but all through barter deals. If they get a good deal from any other

media, they will definitely go in for a marketing deal. But as an advertisement option or as

marketing spend; they are not looking at mass media.


� Quality checks

Checks take place all the time and in several aspects. The operational in-charge will go

around checking business, record keeping, and service and check the feedback forms. The

food in-charge will look at the way food is being stored, coffee is being made, what is the

time take to extract the coffee and so on. Marketing person will go about checking

displays, how the merchandise is displayed.


� 7p’s of Marketing

� Product

� Wide range of products appealing to Indian coffee and snack lovers

� Indian taste

� Eatables adapted to Indian taste buds like samosa, biryani, masala sandwich, tikka

sandwich etc. Indian taste along with classic coffee

� Merchandising includes funky stuff like t-shirts, caps etc.

� Price

� Major customer -15- 29 yrs,

� Price ranges - 20 to 200.

� Minor changes (majorly - government taxes)

� Place

� Strategically located outlets (High Street/ Family Entertainment Centres) Promotion

C.C.D. does not look at mass media as a viable area of advertising

� Television (Zee English called Friends, Channel [V]s Get Gorgeous)

� Tickets Sales (IPL)

� Movies (Main Hoon Na, Kyun Ho Gaya Na, etc)

� Sales Promotion

� (Offer coupons, Gifts vouchers, Café Citizen Cards)

� Café Beat- an in-house magazine.

� Tie-up with World Space & Micro sense to provide satellite connectivity

� Process

� Order process - Based on services (Customer read menu and order).

� Flexible delivery process (Customer can go directly, take the order placed or order

delivered on his table).


� People

� People at C.C.D. believe that “People are hired for what they know but fired for how

they behave”

� Motivation and personal skill are laid emphasis upon.

� Physical Evidence

� Logo, Colours, Images

� RED signifies leadership, vitality and passion . The GREEN signifies coffee growing

heritage and the coffee plantations that they own. WHITE SWIRL signifies purity of

purpose, invigorating properties of growing coffee.

� Café - larger than the text inside the logo box.

� Signifies that Café Coffee Day pioneered the café concept in India way back in

1996.C.C.D. will like to own the word “café” in the minds of its customers.

� Décor & Architecture

� Literature New Logo

� Dress Code


� SWOT ANALYSIS OF CAFÉ COFFEE DAY

� Strength

� Excellent brand name and brand visibility

� Huge young crowd as target group

� Excellent ambience and service

� Over 1000 outlets and 300,000 visitors per day

� It produces/grows the coffee it serves hence reducing the cost

� Products of extremely good quality and taste.

� Its a youth oriented brand , hence huge potential since 40 % population is below 20

� It produces/grows the coffee it serves hence reducing the cost.

� USP of brand is it’s considered a highly affordable brand.

� Weakness

� Crowd management

� Improper sitting arrangement

� Lacks strength to maintain brand loyalty

� Follow the competitor strategy

� Weak brand image and lacks strength to maintain brand loyalty

� Poor ambience and decor. CCD outlet served prime space for advertising and

promotions

� Many of the CCD stores are incurring loses due to wrong site selection.

� Opportunities

� Introduce cheaper versions of coffee

� Tap the smaller towns/cities

� Merchandising.

� Tie ups with other companies for promotion

� Coffee cafe industry is one of the fastest growing industries in Asia.

� More people like to visit CCD for informal meetings.

� CCD has gone international, and is planning to attract many new international markets,

hence gaining international recognition


� Threats

� Entry of foreign players like star bucks

� Dependent on Govt commodity rates

� Large unorganized market

� Competition with other coffee cafes like Barista, Mochas.

� Competitor

� Barista-

� This is the closest competitor to Café Coffee Day in the Indian market.. But Barista is

often viewed as a place to unwind after a hard day’s work or an ideal setting for a business

meeting.

� Café Mocha-

� This aims at providing a level of experience to the consumer which is hard to imitate..

Mocha calls itself ‘a coffee shop for the soul’.

� Qwicky- Based mainly in Bangalore, Qwicky has a strong local hold in South India.

� CAFÉ COFFEE DAY IN COMPETITION

� If you are talking about Cafe Coffee Day as meeting place then the park bench is their

competitor, if you are talking about in terms of food and chain then McDonalds is a

competitor and so are other coffee chains like Barista And Mocha. In fact they are

aiding each other in creating and growing the coffee culture. They are not trying to be

some one else. They are not trying to be an upper class coffee shop where you can

walk in only if you have certain amount of money in your pocket. These are the upper

end coffee shops that have hookahs and the works.

� They are about an every day hang out. They are about being the third most frequented

place after home and workplace or college. So they are like the coffee chains overseas

but with about affordable fun. They have a distinct identity; they are about coffee and

about hanging out and about nice time spend.


� HYGIENE & FOOD HANDLING

� Employees use tongs or wear gloves to handle food items. They cannot USE BARE

HANDS.

� Cutting Boards and knives to be washed and wiped dryevery hour.

� They always have to use clean and dry plates and bowls, cutlery while serving food.

� Clean the refrigerators before opening, and while closing.

� Cannot use chipped plates, cups.

� Cant open the mineral water bottle, tomato sauce sachets, before and also at the time of

service

� The racks (where crockery are kept) should always be clean.

� Pantry area should be clean and dry all the time.

� Food Usage:

� Use first in rust out method.

� Order on a day-to-day basis.

� No food should be kept beyond the shelf life.

� The display has to be clean all the time.

� Only the fresh food received has to be used for display.

� Stack foods neatly on display plates.

� All the food, which is supposed to be microwave, has to have a paper underneath and

then transferred to a new plate.

� All items stored at room temperature to be covered at all times either by a toed cover or

wrapped in cling film.

� All the cakes will be cut when they are received in the morning by the cafes.

� A clean knife dipped in hot water and then wiped to be used to cut the cake. Rinse the

knife after each cut with hot water.

� The appropriate cutlery and accompaniments have to be provided along with the food.

� The food should not be heated along with the cling wrap.

� The food has to be taken care of while packing up the food for parcel order.

� Thumb rule to be followed while storing food in the coolers. (Display as well as back

up ones) (All the pastries on the top shelf the vegetarian Savories on the centre and the

non-vegetarian Savouries’ on the bottom shelf.)

� Reject food items which appear damaged while receiving food.

� Date/Colour code stickers should be placed on all food.


� COMPENSATION & BENEFITS

� PAY PERIOD:

Café coffee day’s employees are paid on a monthly basis. One shall receive one’s pay by

the seventh working day of the subsequent month. One can access salary slip by logging

onto cafécoffeeday.com/attendence, when the window opens click on the “GO” button.

One will have to enter the user name and password. One’s employee code is the user name

and password by default. Once login they can change the password by using the change

password option.

� MEDICAL INSURANCE POLICY:

Café coffee day had a tie-up with insurance agencies with policies such as the group

personal accident insurance and group health insurance policy. This is only applicable to

employees who are conformed in the organization. Details of the same can be availed from

HR department.

� STATUTORY DEDUCTIONS:

� EMPLOYEE PROVIDENT FUND:

All full time employees who are appointed on the company’s rolls are eligible for the

provident fund schemes, which is a social security fund payable to on retirement. As per

the provisions, employees must contribute 12% of their basic salary and an equal

contribution will be made by the employer.

The nomination form {Form 2} is filled at the time of joining. Yearly returns will be

provided. Please collect PF number from regional HR resource. It may take around 15- 20

days from the time of filling and submitting the form.

� EMPLOYEES STATE INSURANCE:

This is provided to employees who’s gross salary is Rs 7500/- p.m. or less and the benefits

provided under the scheme are for sickness, maternity etc. the employee has to contribute

1.75% of his gross salary and the employer contributes 4.75% of the employee salary

under the scheme. The completed ESI form along with two post card sized full length

photographs should be submitted for ESI registration. Please collect ESI card number from

regional HR resource.


� HOW A CAFÉ COFFEE DAY CAFÉ IS MAINTAINED?

� INTERIORS:

� Wall finishes are washable. Clean them whenever necessary.

� Do not hang merchandise from electrical conducts on ceiling. These are of a clip-

on type and loading them will pull them off from their saddles.

� Do not keep wipe pads on the counter top.

� If terra cotton pots are being used in café, they are to be painted with red oxide

paint once in 3 months.

� Do not force shut the glass doors, but allow it to close of its own accord. Forcing

the door shut damages the spring inside.

� Do not place merchandise on top of wall visuals/mirrors.

� Outdoor café floors need to be washed more often.

� LIGHTS:

� Red cube lights and cove lights above the servey are to be kept switched on always.

� GENERATOR:

� Check the water/oil/fuel levels in DG regularly.

� Always allow a fifteen second time gap between switching on the DG and flipping

the change over switch.

� OUTDOOR:

� Umbrella’s should be opened fully and made taut. They should not sag.

� Umbrellas and awnings should be washed with water once a week.

� Doormats have to be cleaned at regular intervals with water.

� REWARDS

The management believes that rewards offered by the company should be meaningful and

valuable to the employees. The rewards are always based on attainable goals, they believe

in SMART goal stetting {S- specific, Measurable, A- attainable, R- realistic and T- time

bound}. The rewards are clear, understandable and open to all. The main focus of the

rewards is to recognize performance and motivate the high performers.


� Major Responsibilities

� TEAM MEMBER

� Responsibilities

� Customer service

� Serve the customer with a Smile, to their satisfaction.

� Should collect their handheld from the Docking station wear its belt on their necks

and park it in the pouch.

� Provide speedy and effective Customer Service.

� Follow all service standards laid down.

� Ensure customer feedback forms are collected on adaily basis.

� In case of complaining customers, take suitable actionto solve the complaints.

� Keep Café Manager informed of all complaints.

� Responsible for table turnover.

� Never get into an argument with customers.

� Should constantly employ suggestive selling practices to make customers aware of

new products and current promotion.

� Cashiering

� Printer is in working condition.

� Cash pouch has minimum float to start with.

� Handheld terminals and batteries are in good condition.

� Manager is intimated about the login password.

� Logout and hand over proper physical count of cash and the terminal to the next

person – in the presence of the Café Manager- every time you leave the café.

� Bills are made for every order.

� Transfer- in and GRN entries are entered for the day.

� Cold Coffee Products/Food Service

� Recipes of cold coffee and cool drinks are adhered to.

� Pastry cooler display is setup using appropriate tent cards.

� The temperature of the refrigerator, freezer, and ice cube machine is of desired

level.

� Microwave, Mixer, Griller and Oven are in working condition and kept clean and

hygienic.

� Shelf life of food is followed strictly and FIFO is maintained for storage.


� Food is dispensed at standardize service temperature.

� Food is handled using disposable gloves and tongs and never bare hands.

� Servery is kept clean and hygienic and avoids all sources of contamination.

� Café Opening Duties

� Setting up the counter for the day’s operation.

� Receipt city store items like coffee beans, cold coffee mix & cups and stationery

and perishables like food, milk.

� Check on equipment (pastry cooler, AC, microwave, mixie, refrigerator, ice cube

machine, and freezer) for cleanliness and ensure they are in proper working

condition.

� Cleanliness of the café interiors, exteriors and servery.

� Before they are handed over the terminal, it is the team member’s responsibility to

see to it that the terminal is in good condition.

� While taking the terminal, if there are damages noticed, Team member shall report

it on the register counters signed by café manager or his nominee.

� If the terminal batteries need to be changed or recharged then team member shall

hand over the batteries to the café manager or his nominee and collect charged

batteries from him.

� Café Closing Duties

� Cleanliness of all equipment and thorough cleaning of the café.

� Checking the physical stock with assistance from the café in-charge.

� Ensure food beyond shelf life is discarded and food to be retained overnight is

stored t proper temperature.

� Assist the manager in compiling reports and updating registers etc.

� Part Timer/Weekender

� The responsibilities of a Part Timer/Weekender are similar to that of a team

member.

� Every Part Timer/Weekender should stringently follow these duties with a smile

with utmost diligence, zeal and application.

� The duty hours of the Part Timer/Weekender will be as specified by the City

Manager/Area Manager.

� As you grow within the organization, you will be briefed about new role and

responsibility.


� Brew Master


� All standard recipes of coffee are strictly adhered to and maintain uniform quality

of these recipes at all times.

� Coffee Machines, Coffee Grinders and dispensers are cleaned and maintained well

and all preventive maintenance procedures are carried out.

� Hot coffee is prepared as specified by the F&B Department.

� Excess coffee is stored in airtight containers at the end of the day.

� Grammage and flow of espresso is as per standards.

� Ensure speedy production of pending orders.

� Knowledge about storage and shelf life of coffee and food related products.

� Proper closing and opening of pantry and keeping the work area clean and

hygienic.

� Manager In Charge Of a Café


� Should maintain a positive image of CCD (café coffee day)

� Sport a smile always, as you are the Brand Ambassador.

� Achieve sales in a focused and planned manner.

� Achieving sales target daily.

� Table turnover and efficient customer handling.

� Handle pressure during the rush hours by ensuring proper pre-rush preparations.

� Allocating assignments and targets to the staff working in the floor area.

� Constantly review all suggestive selling practices employed by the café staff.

� Ensure all items on the menu are available at all times.

� Responsible for customer feedback forms.

� Forecast orders accurately to minimize wastage.

� Maintain legally required licenses and others documents as required by local

authorities.

� Implement other assignments delegated by the city manager from time to time.

� Should coordinate with the regional head and marketing department for various

products launches and other marketing initiatives to improve sales.

� Be responsible for all materials and machinery.

� To ensure that all the terminals are docked to the docking stations when not in use.


� Have complete knowledge of all standard operating procedures governing the café

and implement the same at all times.

� Maintain all records, reports and vendor/utility bills correctly.

� Maintain all opening & closing forms and formats.

� Adhere to all opening, closing, quality & consistency standards laid down by the

company.

� Accountable for maintaining the stocks for smooth operations.

� All service standards, hygiene standards and cleanliness of the entire floor areas are

maintained.

� Maintaining all product standards, coffee standards and recipes as specified by

company policy.

� Planning the counter and ensuring proper workflow is maintained.

� Speedy products of all hot coffee, cold coffee, food, other beverages and desserts.

� Ensuring all machines including the nurit terminal and the kiosk behind the counter

are in working condition.

� Intimate the café manager immediately in case of any breakdown.

� Food standards and hygiene are maintained all times.

� Responsible for depositing the daily sales proceeds of the cafe in the bank.

� Ensure all stocks and inventories are properly accounted for.

� Practice wastage control and spot audits so as to have control over the raw material

costs.

� Take the responsibility of charging the batteries and docking the terminals. When

the café manager is not present, only a senior team member designated by the café

manager shall take responsibility of charging the batteries and docking the

terminals.

� Coordinate and leave messages in the logbook regarding pending jobs for the next

shifts manager.

� Ensure fresh recruits get both on the job and classroom training.

� Ensure appropriate briefings and meetings are conducted to disseminate

information and collect feedback.

� Conduct regular appraisals on the performance of his/her team member and discuss

strategies for improvement of their performances.


� Solving customer problems amicably. But if unable to do so, inform the reporting

authority.

� Handle waiting customers efficiently. Fund them a seat and making sure that they

do not go away.

� HANDLING RUSH

� Typically 80% of the business happens in 20% of the time & cafes will have

distinct ‘lean’ & ‘rush’ periods. CCD cannot prepare rush hours during rush

period,& therefore they have to prepare well in advance & have the café ready in

all respects.

� PRE-RUSH PREPARATION

� To ease workload & handle rush hours better

� Forecast the sales for the rush period

� Accordingly, ensure there are no stock out situations of any item on the menu.

� All the stock items or the food items should be well within reach & enough to last

during rush hours

� Staffing should be adequate & work should be allotted well in advance & there

should be no confusion about who is doing what

� Any breaks for the staff or change of old shift to mew shift staff should happen

before rush time starts

� Pep up the staff

� If needed have one staff taking care of table turn over & ensure guests are received

& seated

� The counter should be set up in a way that can help reduce clutter, crossovers

between work areas & reduce the possibility of staff making mistakes.


� SEVEN STEPS OF GREAT SERVICE

1 WELCOMES THE CUSTOMER

Acknowledge customers presence at the café. A smile goes a long way. That is guaranteed.

Open the door to receive a customer & greet him courteously with a smile

Meeting greeting & seating the customer in a warm & friendly manner sets the ball rolling

for the service that follows .It will reflect in voice

Check whether the customer wants a takeaway or will be seated at the café

Take his preference if possible & direct him to available vacant tables. Request the

customers to be seated & introduce self.

2. TAKE THE ORDER & PRESENT THE BILL

A confident demeanour & good menu knowledge will help you to assist the customer to

his satisfaction

Hand over the menu to the customer & if not ready return to take the order in a few

minutes

Help the customer choose the right coffee or food by explaining in detail the attributes of

the product. It is important that you recommend special product & add – ons & combos of

food & beverages to the customers. Suggestive selling will help you offer customers a

better choice of their products.

When the customer is ready to give the order , use handheld terminal. Choose “SELL”

amongst user functions. Enter the table number & the number of people. Take the order.

Check if the customer is the café citizen ,if not, enroll the customer in the café citizen

program

Inform customers at what time they should expect order to be served. For eg. ” order will

be served in 10 minutes. Sir”

Print the order confirmation cum bill & place it in the folder on the table.

TIP: use one liner terminology to describe product & its benefits to the customer.

3 .SALVER SERVICE

Serve the customer at the promised time & know the products that you are about to serve

Pride in products will enhance the customers confidence in their brand.

Arranged the readied products on a salver Serve the food first & serve the cold coffee , hot

coffee or other beverages later. However check the customers preference. For eg. “Can I

serve the food items first, Sir or will you like everything to be served together?” In case of

no specific customer preference serve food first followed by coffee/ beverages Announce


the name of the product while you serve the product Remember who ordered which coffee

/ food in case of a group & serve the items accordingly

If there are four people gathered at a table, then bring the coffee two at a time. Else, if you

wait to bring all four together, the first two will not retain their temperatures.

In case there are any delays after announcing the time of service, please keep the customer

informed of delay.

TIP:Ensure that you have served all the mandatory accompaniments with the food &

beverages like sauces , cutlery , napkins etc..

4. VERBAL FEEDBACK & REPEAT ORDER

A feedback on existing service will help you improve performance in future .Also; the

customer will feel more valued & important.

Keep an eye on the tables in allocated section Check with the customer if they will like

some more coffee , snacks or desserts Interact with as many as customers as possible & get

their feedback on the service & product. For eg. Hope you liked the coffee Sir! I hope you

found the service friendly & prompt. Is there any way we can improve our quality of

coffee, food or service

TIP: If you ask for feedback, you are sure to receive comments from customers

5. CLEARANCES

Prompt clearance of the tables ensures that customers find the café seating area clean,

hygienic & presentable when they are seated at the tables

Clearance should be very prompt

Clear empty plates, cups & soiled napkins from the table using a salver

Ensure that the surface & edges of the table is wiped with assigned scrubber .Use a spray

gun to dampen the table with a cleaning agent prior to wiping the table.

6. BILL SETTLEMENT & CUSTOMER FEEDBACK

MAKE THE POST SERVICE WAITING PERIOD EASY & FAST FOR THE

CUSTOMER

When the customer is ready to leave check the amount of the bill from handheld & tell him

the overall amount payable

Once the customer places the cash, remove the bill folder from the table & clear the

transaction promptly

Request the customer to fill up the comment card. ”I will be delighted if you can kindly fill

up our customer comment/ feedback form while I return with the change, Sir!”


Present exact change to the customer & collect the comment card.” change, Sir!”

In case of any negative comment , tackle the situation before the customer leaves the café

.Acknowledge good comments too.

7. PARTING REMARKS

Show customers that we value them & want them to return. A pleasant parting remark will

ensure that customer comes back to café

Thank the customer for choosing CAFÉ COFFE DAY. And how delighted you are to be of

service to him. “Thank you for choosing CAFÉ COFFEE DAY, Sir! It has been a pleasure

having you over.”

TIP: It is not what you say , but how you say it!


� PRODUCTS AT CAFÉ COFFE DAY

Description of various Food and Beverages:

Hot Coffees

One Line Descriptions:

Espresso: Strong black coffee extracted at high pressure and optimum temperature.

Espresso Americano: A shot of lightened Espresso diluted with hot water.

Macchiato: A shot of Espresso topped up with milk foam.

Cappuccino: Strong milk based coffee with a shot of Espresso, milk and milk foam. It is

one of the most popular hot coffees at Cafe Coffee Day.

Café Latte: Milkier hot coffee, mild and goes best with coffee flavouring syrups. It has a

very thin layer of milk foam.

Chocó chino: A blend of Chocolate ice cream and Espresso garnished with a dollop of

milk foam. It is neither a hot coffee nor a cold coffee. It is a warm coffee.

Cafe Mocha: Chocolate flavoured Cappuccino. Goes best when served with whipped

cream. Garnish it with a dash of cocoa powder.

Irish coffee: A light Espresso flavoured with a choice of Irish Cream/ Hazelnut/ Caramel

and topped with Whipped Cream.

Caffeine Kick: Double shot of espresso diluted with hot water.

Black Velvet: A'ristretto'strong coffee served around 5-20 ml.

Kenyan Safari: An international coffee with the hidden flavour of Blueberry.

Colombian Juan Valdez: Rich, mild international hot coffee with fruity flavour.

Ethiopian Qahwah : International hot coffee with a hidden mocha flavour.

Hot chocolate: Lots and lots and lots of chocolate.

� Cold Coffees

Tropical Iceberg: Ice blended cold coffee with notes of chocolate. It is the most popular

cold coffee across the country.

Tropical Temptation: A Tropical Iceberg topped with whipped cream and a shot of

chocolate sauce.

Cold Sparkle: Ice blended cold coffee with a sparkling taste of coconut, it is among the

earliest cold coffees introduced in their menu.


Iced Eskimo: Ice blended cold coffee with notes of coffee and cream balanced in right

proportions.

Arabian Heights: Ice blended cold coffee with a distinct flavour of cardamom.

Vegan Shake: It is made of 100 % pure vegetable fat and does not contain any animal fat

& dairy product. It is unique and is being launched for the first time in the country by

CCD.

Cappachillo : Coffee with sweetened creamy milk served on the rocks.

Mochachillo : Chocolate flavoured coffee with sweetened creamy milk served on the

rocks.

Cafe Frappe: A judicious blend of ice cream and coffee that gives a smooth and creamy

effect.

Almond frappe : Almond flavoured rich, creamy cold coffee with whipped cream,

garnished with almond flakes.

Chocó Frappe: A Cafe Frappe with an extra scoop of Vanilla ice cream and a shot of

chocolate sauce, garnished with cocoa powder.

Devils Own: A smooth blend of cream and coffee drenched with chocolate sauce and

topped up with a shot of whipped cream.

Kaapi Nirvana: It is their ultimate signature blend, very Indian with hidden Caribbean

taste, won the silver medal in the in the world barista championship held in Oslo 2002.

Rich coffee taste, heavy body with creamy texture and does not require any additional

flavours.

Fruit Frappe: A judicious blend of ice cream and fruits having different fruity flavors and

thick cool texture. (Mango Frappe, Strawberry Frappe, Pineapple Frappe, Lichi Frappe,

Cold Chocolate).

� Teas

Assam Tea: A strong Tea grown in the best tea estates of Assam.

Masala Chai: High grade Assam tea in combination with a Masala bag which is

meticulously prepared with pepper, cardamom and cinnamon to give an ethnic feel.

Ice Tea: A flavoured cold tea served with lemon juice on the rocks, garnished with a slice

of lime.


� Granitas / Cremosas

Granitas: A cool slush drink in different flavour variants

Pineapple Crush: Pineapple flavour.

Cool Blue: Orange & hidden flavour of mint.

Blood orange: orange flavour.

Smoothes: Ice-drinks blended with ice-cream to give it a creamy texture, which gives a

smooth creamy after taste

Strawberry/Mango Colada : A smoother, flavoured with strawberry/mango garnished

with whipped cream.

Cremosa: A fizz drink served with fruit concentrate, soda and Ice Cubes Served on the

Rocks. (Flavor options: Litchi, Ginger Spice and Pina Colada)

� Desserts

Mousse Au chocolate: A double layered Chocolate mousse with a combination of milk a

dark chocolate & subtle coffee flavor for all the chocolate lovers.

Mocha Pastry: A fresh coffee sponge cake flavoured with Coffee cream and syrup.

Chocolate Fantasy Cake: Rich Chocolate Pastry pampered with a rich garnish with

chocolate truffle swirl.

Pineapple Gateaux : Delicious cream and pineapple flavoured cake, very light and

refreshing.

Chocolate Mousse : Creamy, Fluffy, Smooth, chocolate flavored dessert, ideal with

coffee.

Black forest Cake : The all time favorite Choco pastry with cherries suited to our Indian

palate.

Sugar/chocolate Doughnut : A deep-fried dumpling doused with cinnamon flavoured top

dipped in sugar or chocolate truffle.

Date & Walnut cake : Rich butter base Cake made of delicious combination Dates &

Walnut.

Chocolate Brownie: A rich dessert made with the combination of chocolate, butter,

walnuts best with coffee.

[TIP: Tastes best with a scoop of Vanilla Ice Cream.]

Banana walnut cake: Delicious teacake flavored with bananas and walnuts


� ADVERTISING CAPAIGN

� THE LEVI’S CAMPAIGN

The 6” Below the Naval Jeans campaign, the SykesReversibles (Ulta Pulta) campaign, the

Levi’s 501 campaign, the TLTT (The Levi’s Torture Test), the ‘Hello Gorgeous’ campaign

etc all are some of the successful in café activations designed and executed for Levi’s.

Every season CCD becomes an important media for Levi’s to launch its new range of

apparels. Along with providing tremendous on ground visibility in terms of wall visuals,

tent cards, danglers, posters etc., a contest (wherein customers can win Levi’s clothes) is

designed to inject customer interactivity and to add excitement to the entire campaign. The

cohesiveness of the entire campaign is accentuated by creating a new drink and christening

it as the Levi’s drink for the promo period!

� THE SUGAR FREE CAMPAIGN

In order to promote Sugar Free, CCD launched a “ Low calorie menu” in association with

the former for the calorie conscious. The new menu consisted of a wide range of Low

calorie Hot coffees, International coffees, Tea, Tropical Iceberg & a range of veg. and non-

veg. food as well as deserts like Lemon Soufflé to name a few. This menu was

communicated to the customer by means of Sugar Free branded menu boards, menu cards

etc. Also, a few bottles of Sugar Free were displayed at the counter to serve as a pointer to

the on-going activity.

� THE TVS SCOOTY VALENTINE CAMPAIGN

The Valentine month in 2004 witnessed an innovative campaign for TVS Scooty. CCD

promoted TVS Scooty by means of a creative promotion which besides adding visibility

and customer interactivity also conveyed the brand attitude to the end customer and helped

them relate to the same. Through the ‘TVS Scooty Valentine Singles Campaign’,

customers were asked to enter the contest of why they will rather be single and make TVS

Scooty their Valentine that year. To add to the festivities of the Valentine month, CCD

created 2 special combos called the TVS Valentine Combos– Hot & Cold (2 ice blended


Cold coffees/2 Café Mochas with a Chocolate Fantasy). The contest was of course made

attractive by the no. of freebies like Sony Discmans & MP3 players etc. which customers

stood to win. Not to mention the Mega prize of a 4 stroke TVS Scooty for 2 lucky winners

� THE CHANNEL V- GET GORGEOUS HUNT

CCD was the exclusive on ground partner for the nationalhunt for the most gorgeous

female models by Channel V, wherein candidates can drop their entry forms with portfolio

at any CCD outlet. The event was heavily promoted by CCD through in café branding and

on air by Channel V. CCD also launched a new range of ‘Get Gorgeous drinks’ aspart of

the promotion. Innovative collaterals like branded stirrers etc. were used to add that extra

element of surprise. So much so was the success of the campaign that Channel V has

chosen CCD to be the on ground partner for ‘Get Gorgeous- Part

� THE HIMALAYA HONEY CAMPAIGN

The Himalaya Drug Company had recently entered into a tie up with Café Coffee Day to

promote their honey. This honey was made available through over 100 Café Coffee Day

outlets across 7 cities, in a 3-month promotion where Coffee Day customers experienced

the taste of pure of honey in innovative ways. Honey Cappuccino, Honey milk shake, rich

chocolate cake and ice cream topped with honey and nuts! Four unique dishes were

conceptualized by Café Coffee Day, each enriched with the goodness of pure Himalaya

Honey. These were an instant hit with the customers. In addition to honey-based items,

bottles of Himalaya Forest Honey were also available in all Coffee Day outlets


� MOVIE TIE-UPS

CCD has become an important national on ground partner for Production Houses to

promote movies better among the masses by means of colourful collaterals like – posters,

tent cards, danglers et al. Interactivity is ensured by conducting exciting contests around

the movie wherein customers with the correct answers stand to win movie cassettes, CDs,

movie tickets as prizes and also through a Lucky draw get a chance to win a ‘Coffee date

with their favourite movie stars’. Hence, the ‘touch & feel’ experience to the movie.

� The ‘Mujhse Shaadi Karogi’ Promotion:

The contest, starting July 10, 2004 ran across 168 cafes in 42 cities for a month, where any

customer billing a ‘Shagun’ amount of Rs 301 was guaranteed to win at least one prize

ranging from audiocassettes to movie tickets and a chance to enter a lucky draw, which

will win them a coffee date with Priyanka Chopra. To heighten the excitement, CCD even

created an ambience of ‘Shaadi Season’ with cafe staff wearing heart shaped badges with

‘Mujhse Shaadi Karogi Contest @ CCD’ pinned on their shirts. Creatively designed

posters and tent cards in the wedding card format were used as tools to encourage

customers to be a part of this contest. Cafe Coffee Day in ‘wi-fi' tie-up with Microsense

Cafe Coffee Day, the country's leading chain of cafes, has tied up with Microsense,

provider of wireless computing solutions, to wi-fi enable its coffee outlets across the

country.

� CAFÉ BEAT FACTFILE:

12 pages, all colour, monthly tabloid. Available at all cafes across the country (226 cafes

in 55 locations as of Today).Available FREE of cost to customers for in-café reading.


Many customers also carry it away for their referrals. 38% of the customers at CCD read

Cafe Beat (survey conducted in Aug.'04 in the 4 metros.). CCD gets around 3 million

walk-ins in all its cafes per month. Essentially a youth magazine covering topics like

movies, music, travel, lifestyle, e-dating, books, career etc. which interest the youth.

Displayed on magazine stands/counter at the cafes. The new issue is kept on the tables

during the first week for greater visibility.

� New Introductions

� Malabar Monsoon premium Coffee Powder

� Varieties in coffee mugs

� Funky T-shirts and Caps

CCD’s guide to Active Holidays (A travel guide focusing on adventure sports) while 16%

visit monthly. Each café, depending upon its size attracts between 500 and 800 customers

daily, mainly between 4pm and 7 pm. Customers describe Café Coffee Day as the place

they frequent most after “home and workplace/college”. It is a place where they meet

friends and colleagues, in groups of 3 or more; a place where they rejuvenate and are free

to be themselves rather than a place to be “seen at” viz a viz other cafes.

AIR DECCAN TAKES CAFE COFFEE DAY TO THE SKIES With Friele expected to

enter the Indian market sooner rather than later, it seems logical that India's leading fine

coffee-cafe chain

Cafe Coffee Day should take to the skies, courtesy the country's pioneering low-budget

airline which now links up more urban centres — 46 at last count — than the competition.

Both Air Deccan's parent company Deccan Aviation and Cafe Coffee Day took off in the

same year from India's Garden City. Cafe Coffee Day, a division of the Rs 300-crore

Amalgamated Bean Coffee Trading conglomerate, will now be the single-point vend or

supplying snacks and beverages on board all of Deccan Air's 186 daily flights.

Cafe Coffee Day (CCD) estimates that when the roll-out is in full flow, the four million

passengers on board Deccan Air flights can add up to Rs 20 crore a year to its annual

turnover, at an average of Rs 50 per passenger. For Deccan Air, the tie-up can enable the

airlines to provide its passengers with reasonably priced snacks and beverages of a

standard quality. Which is what its passengers are said to have indicated a preference for in

a recent survey. The CCD service will begin with the Bangalore-Chennai flights, and will

be extended to other sectors progressively. Since CCD has a pan-India footprint, the

strategy can be implemented seamlessly even in smaller hinterland towns, where the


competition —in both aviation and the fine coffee cafe segment— does not have a

presence.

The MoU to this effect was signed today by Air Deccan managing director Captain GR

Gopinath and Cafe Coffee Day director Naresh Malhotra. Speaking on the occasion, Capt

Gopinath quipped that another factor he and Amalgamated Bean Coffee Trading chairman

VG Siddhartha and he owned neighbouring coffee estates.

� CONCLUSION

The best known cup of coffee in town comes from here. You can't miss Cafe Coffee

Day; if there isn't one in your neighbourhood, there's one near your college/office,

You might as well give in, they're taking over. The college crowd is big, because

the rates are more or less affordable, office goers hang out here at lunch breaks to

take in the laid-back air of the place, first-dates meet here because it's neutral

ground, and couples because they're not likely to bump into their parents. You're

left alone to play your favourites on the jukebox and nurse your mug of coffee for

however long you want. All at a price, of course - Rs. 5 per favourite song and

around Rs. 25 for the drink the range of coffees here, both cold and hot, is

impressive. The latte (with cinnamon, if you like it that way), Irish coffee,

Cappuccino and its chocolate-y version, the Mochaccino are the most requested hot

coffees. While the Frappe, with chocolate ice-cream blended in, the Tropical

Iceberg, which is the classic cold coffee, and the award winning Kaapi Nirvana are

the chilled favourites. Order cookies to go with it and, suddenly, none of your

problems in life will seem like such a big deal. CCD also does a decent job of the

teas, of which it has only three, but the Masala Chai is good. The eats here are also

very popular; in fact, many people skip coffee altogether and just come here for the

grub. For the most part, though, the food here is nothing spectacular. Their ever-

changing menus haven't really improved matters, either. CCD also sells its own

range of t-shirts, coffee mugs and bags. Their line of pre-packed coffee powders is

steeply priced, but there is no dearth of takers, and the filter-coffee has some

dedicated drinkers It’s hard to miss: It sports a youthful look. Plush, pleasing

interiors, plus colours such as lime green, yellow, purple and orange predominate

make Café Coffee Day a soft-low decibel spot for the trendy youth.


PART: 3 & 4

Norway Coffee Industry analysis

Norway coffee market

Norway’s small market (population 4.5 million) consumed about 40,000 tons of coffee. Although

imports showed a substantial increase over the previous year, much of this can be credited to stock

build-up to take advantage of lower prices rather than significant consumption growth. Over the

last decade total imports averaged 45,000 tons of green coffee equivalents but this number has

trailed down in recent years and so has per capita consumption.

Per capita consumption of the leading country data 2010

0

2

4

6

8

10

12

per capita consuption 10.7 10.1 9.7 7.8 7.1 7 5.7 5.5 5 3.9

3-D Column 6

norwayFinala

nd

Denma

rk

Swede

n

nethal

ands

switzerl

ands

Germa

ny austria

Belgiu

mFrance

Per capita consumption inched slightly up to 9.3 kilos in 2001 and 10.7 kilos in 2010. But remains

well below the average of more than 10 kg that was common in the early 1990s the market

consumes Arabica almost exclusively. Brazil is the largest single supplier; its naturals hold more

than 40 percent of the market. When combined with Colombia and Guatemala – the number two

and three suppliers - these three origins have about 75 percent of the total market. Mexico is also a

strong supplier with a growing market share. Soluble coffee holds 9.1 percent of the market.

The sustainable coffees represented approximately 1.1 percent of total consumption in 2001.

Organic coffee amounts to less than 0.5 percent of the total market for coffee in 2001. This figure,

which in the Scandinavian context is relatively low, according to one researcher reflects the

absence of a positive Norwegian consumer attitude towards organic products in general. Max


Havelaar Norway was founded in 1997 and is the certifier for most of the country’s fair trade

coffee. Fair trade coffee is expected to soon amount to about 1 percent of the total market. In both

2000 and 2001 most roasters experienced strong growth in fair trade coffees. Early reports for year

2002 indicate very strong growth as well. In the same period organic showed flat or very small

growth according to their estimates. The rapid growth is mainly due to its ability to secure a broad

distribution from the major roasters. The Max Havelaar–registered suppliers account for the entire

fair trade volume of 215 tons, while the organic segment measures 213 tons (figure 15.3). The Max

Havelaar group has secured a place with the major roasters and the retailers. With such solid

distribution and a developed roaster network, the next challenge will be to motivate larger number

of consumers to switch. That may well be their hardest challenge. The vast majority of sustainable

coffees are sold as mainstream coffees that are not distinguishable from others in terms of quality

or flavour characteristics. There is still a lingering perception that their quality is mediocre

although now a percentage of these coffees (less than 50 tons) have entered the gourmet category

and they are primarily organic.

The market seems to be fairly transparent and well-organized in regard to certification and there

are not many competing labels or claims of sustainability. The national market is fairly well

educated especially concerning ethical commerce, an issue that has recently been raised by

retailers. None of the roasters finds that certifications are confusing or a problem. Only 13 percent

of the industry respondents felt that consumers experienced confusion in these markets. Debio is

the primary national certifier for organic coffees. Max Havelaar certifies most fair trade coffees,

although some firms claim that their coffees are traded under similar ethical standards. Coop Norge

Kaffe engage Det Norske Veritas, an independent certifying organization, to verify their fair trade

sourcing practices in the field. Some of the roasters are showing a keen interest in what are called

“relationship coffees”. These indicate a direct and mutually beneficial relationship between the

producer and the roaster but usually do not adhere to quite the same criteria or price levels of fair

trade coffee. These coffees pre-suppose a high level of trust between the grower, the buyer, the

roaster, and the consumer since they do not always have independent third party certification of

their practices.

� Premiums

Premiums for organic green beans range from US$0.10 to $0.35 per pound, with $0.25 given as the

median. Fair trade buyers pay the minimum price defined in the FLO standards, $1.26 per pound

for most imports. In the current markets, this represents approximately 50 percent more than

conventional coffee. Of the responding firms, nearly all feel that these premiums are reasonable

across the board for both organic and fair trade coffees. All of the respondents believe that fair

trade prices will continue unchanged for the next few years


� Retail prices

One company dominates organic coffee sales in Norway and while their organic coffee is not

cheap it is positioned to sell at a price that is 10 percent lower than their premium brand. Because

Norway’s retail prices for conventional coffees are relatively high the price differences between

them and fair trade are not pronounced. Despite this reasonable parity, there has not been a

noticeable surge in fair trade sales. Although this is not the result of rigorous analysis, it can

nonetheless indicate that having similar prices between fair trade and conventional coffees may not

necessarily stimulate more fair trade sales. Unlike most of the other European markets, Norwegian

consumers did not respond quickly to double certified coffees. There is unanimous opinion in the

industry that this category will grow although the market for these is now very small.

� Significant supplying countries for sustainable coffees

The primary suppliers for these markets have been Mexico, Peru, Guatemala, Brazil and Papua

New Guinea. Mexico and Peru are the dominant suppliers by far. Others include Colombia, East

Timor, Bolivia, and India.

� International Entry strategy:

Initially CCD is not going to give franchise like ccd give in India because we are not

famous in Norway so give so we launch own Coffee shop in Norway. Raw Material like

Coffees, Sugar, and tea will be export from India .initial level CCD recruit employee only

from India. Land will take on lease


� The Norwegian market structure

The Norwegian market channels are relatively simple. Three main roasters and importers, all

Norwegian owned, account for 85 percent of the market. Two medium size roasters cover 10

percent of the market and 3 small roasters essentially share the specialty or gourmet market. There

are also a modest number of in-shop roasters with small volumes. One importer covers the soluble

market that averages approximately 3 percent of the market (1300 tons). The importation of

roasted coffee is small and amounts to less than 5 percent of total imports. While there are three

strong traders in the market, they have little interest in sustainable coffees. There is increasing

trend among roasters to deal more directly with origins, sometimes through European brokers.

Three large retail groups dominate this landscape and are responsible for more than 80 percent of

all coffee sales. There are also approximately 400 specialty retailers. Most of these are covered by

the small and medium roasters. The high-end or specialty trade is well developed through quality

roasters and a widespread network of retailers and coffee bars selling high quality fresh roast &

ground coffee. This trend has spread to leading retailers that are establishing “shop in shop” fresh

roast coffee outlets. With regard to fair trade, the Max Havelaar registered roasters account for

almost the entire volume provided to the market. Fair trade coffees are mainly sold to consumers

through grocery retail outlets. It is hardly sold in the high - end or specialty coffee market,

probably because its quality has often not been considered good enough. All the large roasters now

have a separate fair trade brand in the market. Hakon, Rema and NorgesGruppen cover about 3/4

of the market and Coop Norge Kaffe covers much of the rest so basically FT coffee is offered in

every supermarket in Norway and has distribution access to almost 90 percent of the grocery retail

stores. There is also a small but growing (institutional) market among community and charitable

organizations as well as among public corporations and governmental agencies Organic coffee is

primarily sold in grocery retail. One company accounts for the vast majority (approximately 90

percent) of the volume. Both fair trade and organic that are distributed through the mainstream

grocery channels are expected to grow, although at a different pace, of about 5 percent for organic

and well over 10 percent for fair trade. Fair trade is also expected to continue its inroads in the

institutional channel at a pace of about 5 percent annual growth in 2002 and 2003.

� Trends in the Norwegian market

The total market for coffee is estimated to remain stable in the 2002-04 three-year period, while

fair trade and organic coffees are estimated to grow toward a joint market share of about 1.6

percent in the period. After some initial reluctance, all major roasters now offer both organic and

fair trade coffees. Charitable, community and governmental organizations seem to be an increasing

market for fair trade coffee. There is only modest optimism for organic coffee among roasters and

retailers and this is reflected in the forecasts for little growth.There may be an emerging market for

“relationship coffees” or uncertified fair trade coffees that are not third party certified but, there has


been little volume thus far. Some retail chains have decided upon a “green policy”, thereby

introducing an alternative to organic and fair trade. In 1999 the consumer awareness of the Max

Havelaar label was only 6 percent whereas in May 2002 it registered 30 percent awareness.

Industry has a positive outlook for fair trade coffee over the next few years, expecting reasonably

strong growth of between 10 and 15 percent per annum. Sales figures for 2002 fair trade coffees

already show healthier increases of about 30% for that year. Expectations for organic are more

muted and while some expect modest growth, others project reasonably flat sales. As conveyed in

figure 15.8, the Norwegian sustainable market should almost double by 2004 from its 1999 level.

This growth does not represent a large shift in volume, yet Norway’s sustainable market does

represent the average in terms of market share – projected to be 1.3 percent by 2004

� Constraints in the Norwegian market

The few dominant retail grocery chains are price-driven and have a conservative space

management policy. If sustainable coffees do not gain sufficient market share their life on the shelf

may be cut short. Although these products currently have broad distribution, no one, including the

stores carrying them, has made many marketing efforts.

� Key factors for further growth

Members of the industry were asked to, “Rate the importance or value of the following factors for

expanding your sustainable coffee business.”

Quality of cup

Consistent and reliable supply

Price relative to conventional coffee

Clarity between different types of certifications, criteria, and labels

Awareness of consumers about these coffees

If the industry does not fulfill these factors it is likely that its future growth will be constrained.

espondents were offered 4 choices ranging from “not at all important” to “very important”

According to the industry respondents clarity about certification and labels is the least important

factor in Norway. Consumer awareness is clearly number one in importance followed by\ cup

quality. Norwegian consumers already seem to find that many of the sustainable coffees meet their

quality demands and if consumer awareness improves, due to their presence in multiple channels

of distribution, they may have a positive long-term future.


� Industry Analysis

� Societal Environment

� Economic Variables

Dealing with a commodity, the coffee industry in the Norway is only marginally affected by

economic forces such as GDP Trends, interest rates, inflation, or energy price and availability.

However, Marketresearch.com (2008) suggests that higher employment rates might cause a shift in

coffee consumption as more coffee will be consumed outside the home, thereby increasing the

foodservice sales at the expense of retail coffee sales. At the same time, the foodservice sales of

coffee are particularly susceptible to changes in discretionary income. Since that type of

consumption is generally not considered a necessity, an overall decline in discretionary income can

result in diminished foodservice coffee sales and vice versa. The data from the Norway Census

Bureau (2008) seems to indicate a rather positive trend since foodservice and drinking places a

7.6% sales increase in the past 12-month period and a 0.6% sales increase from June to July 2008.

Besides, the economic situation in the different geographic regions has a noticeable effect not only

on coffee sales in general but also on the demand for particular coffee types.

� Research and Development

Although coffee is considered a commodity, the individual marketers in the coffee industry invest

significant resources in research and development in an attempt to establish a competitive

advantage. Flavoured coffees, specialty coffees, Pods, better-for-you coffee blends, or

Frappucchino® are just a few examples of how the industry takes advantage of technological

developments (MarketResearch.com, 2008). Furthermore, the National Coffee Association started

a campaign that promotes the health benefits of coffee and, based on scientific research, unmasks

common beliefs about the harmful effects of coffee consumption. According to

MarketResearch.com (2008), this image campaign does not only increase coffee awareness among

consumers but has also the potential to increase future consumption. From a corporate perspective,

the proper application of modern is crucial to ensure adequate product management as well as

internal and external communication. Tracking product profitability, product-specific sales data,

and inventory, as well as implementing employee and customer relationship management measures

are just a few areas in the coffee shop business that will greatly suffer from the lack of proper

technology support.

� Political-Legal Variables

As stated by MarketResearch.com (2008), coffee come in top import item in the import basket”

which makes the coffee industry very vulnerable towards foreign trade regulations Overall stability

being granted, the political situation in the Norway is probably less concerning for the coffee

industry; however, the respective situation in the major coffee growing countries might have a


more imminent effect on the industry with regard to green bean supply and price. Greenfield

(2004) instances the Coffee Crisis of 2001 during which commodity prices fell to an all-time low.

The issue originated in the sudden rise of Vietnam as second largest coffee exporter and caused

thousands of coffee farmers to loose their livelihood.

� Socio-cultural Variables

Socio-cultural forces have undoubtedly the most noticeable influence on the coffee industry. As

stated by MarketResearch.com (2008), consumers seek higher quality coffee, thereby increasing

the demand for the higher priced specialty coffee not only in the newly revived coffee house

culture but also at home. According to Dawidowska & Gardyn (2002), the lion’s share of patrons

of specialty coffee houses is composed of those between 18 and 34 years old as well as those with

an annual income of $75,000 or more. This demographic is not only enticed by the higher quality

and broader selection, but also by the overall coffee-shop atmosphere and non-coffee related

offerings. The continuous monitoring of the population’s motive force with regard to overall coffee

consumption as well as the benefits they seek is crucial for any company in the coffee shop

industry as it may provide open up a competitive advantage. Currently, the consumers’ busy

lifestyle enhances the demand for ready-to-drink coffees; in addition, the trend towards enhanced

health consciousness causes marketers to emphasize coffee’s health benefits and “incorporate

better-for you ingredients” in it Furthermore, enhanced consumer activism forced the coffee

industry to place higher emphasis on sustainable coffees that are more considerate of the

environment and/or the coffee farmers in the exporting countries.


� Five Force Model

� Threat of New Entrants

New entrants in the specialty coffee market constitute a definite threat due to the lack of entry

barriers. Although clearly dominates the market with its more than 1000 coffee shops and its

advanced infrastructure, the company has significant scale economy in the production and sale of

its products. As stated by Belissimo, Inc (2005), the capital requirements to open a new coffee cart,

kiosk, drive thru, or coffee shop franchise range from $10,000 to $100,000 which allows for easy

market entry of new competitors. Despite marketers’ branding and differentiation efforts, coffee

remains a commodity for the majority of consumers who generally perceive very minimal, if any,

switching costs between any two brands of coffee. While small businesses might not have the

opportunity to sell their coffee in larger supermarkets, the coffee shops themselves and the

respective websites constitute easily accessible distribution channels. Lastly, there is no

government policy in place that will restrict or limit the entry in the coffee market.

� Rivalry among Existing Firms

In economics, the degree of rivalry is measured by indicators of industry concentration, which

usually expresses as the concentration ratios. It is used as an indicator the relative size of firms in

relation to the industry as a whole. According to the Bureau of Census (2008), as of 2002, the

concentration ratios for the largest eight, 20, 50 firms in the coffee shops industry are 66.2%,

68.5%, and 70.6% respectively. Even though the figure for the largest four firms is withheld for the

purpose of avoiding the disclosure of data for individual companies, we can still make assumptions


based on the noticeable differences on percentages between the largest eight-firm and four-firm.

Assuming that the fluctuation of the differences between the largest four-firm and eight-firm is

within 10%, we then can conclude that the concentration ratio for the largest four firms is well

above 40%. In that case, the market form of the coffee shop industry appears to be an oligopoly in

which a market or industry is dominated by a small number of sellers (Wikipedia, 2008). This

implies that the industry is somewhat disciplined, informally following the acknowledged market

leader’s strategic movements.

Due to the lack of entry barriers, the number of competitors in the coffee market is countless. The

vast majority of which are most likely to serve coffee in one fashion or another. Especially

noteworthy is the great diversity of competitors. A specialty coffee shop such as Café Coffee Day

does not only directly compete with other specialty coffee shops, but also indirectly with any type

of restaurant, convenience stores, or even the coffee brewer at home. According to

MarketResearch.com (2008), the coffee market is estimated to exhibit a compound annual growth

rate of 6.9% in the next five years which provides room for growth not necessarily on the expense

of other competitors. Again, coffee is widely considered a commodity and according to the

Specialty Coffee Association of Norway (2005), most consumers chose their coffee based on

convenience of location, quality of the product, friendliness and knowledge of staff, variety, and

price rather than particular brand. Unlike the high-tech industry, the coffee shop industry exhibits

fairly low fixed costs, low switching costs, and relatively low exit barriers in its realm. Taking the

low entry barriers into consideration, the low exit barriers have probably hardly any effect on the

market at large. Except for rent, furniture, and overhead costs; the majority of a coffee shop’s

expenditure can be capitalized on bespoke espresso machines and specific staff training. Variable

costs, such as direct material and direct labour, are directly influenced by sales. There is no strict

penalty cost for withdrawing from the market except for the potential loss on investments. As a

result, investors can flexibly switch markets in accordance with their strategic planning.

� Substitutes

As outlined in the above paragraph, the competitive landscape in the coffee industry provides

countless substitutes for a cup of Café Coffee Day coffee. If customers are not true-blue to their

favourite coffee shop or brand, they will hardly perceive any switching costs whether they get their

coffee from kaffehuset friele as ,johannson joh kaffe as ,trond t wikant as, mocca kaffebar

& brenneri. Surprisingly, the price for a cup of coffee is not necessarily the determinant factor for

the selection of one brand over the other but convenience and other “added benefits” clearly are.

Market Research.com(2008) point out that the current price of roasted supermarket coffee is almost

on the same level as it was in 1980; however, consumers are apparently willing to spend $3 or

more for a specialty coffee at their favourite coffee shop. The roomy chairs, free wireless internet,

and pleasurable music that can be found in a coffee shop are no coincidence but rather an attempt


by the respective store to establish a distinctive competency and capitalize on it. Besides the threat

of other brands as substitutes, coffee can just as well be substituted for by completely alternate

products. In realization of this fact and as a defence against it, many specialty coffee shops add a

rather comprehensive tea selection to their product portfolio. After all, only about half of the adult

population drinks coffee on a daily basis, so coffee shops need to provide an appealing subsidiary

for the other half of the population in order to lure them into the stores. While newly publicized

research findings suggest otherwise and might eventually change the current public opinion, tea is

generally considered healthier than coffee and therefore constitutes an important subsidiary

product for the increasingly health-conscious Norwegian consumer.

� Bargaining Power of Buyers and Suppliers

Due to the very nature of the product and the composition of the industry, the bargain power of

foodservice coffee consumers is definitely greater than that of the foodservice coffee suppliers.

Although consumers are much dispersed and purchase comparably small proportions of the

product, they can easily prepare their coffee at home or select an alternative supplier or substitute

product at literally no switching costs. The great variety of available coffee in terms of price,

quality, and service allows for the consumers to choose the respective product that best meets their

individual needs and further strengthens the consumers’ position in the coffee market. Further up

in the sales channel, and as outlined by MarketResearch.com (2008), many coffee marketers

strengthen their respective position by expanding their presence to several sales channels, thereby

oftentimes assuming the role of seller and buyer. Friele, for example, poses a very real backward

integration threat by eliminating several middlemen in the coffee production chain. The coffee

retailer does not only roast its own coffee in one of its three corporate-owned roasting facilities, it

also freshly grinds its coffee in the stores.


� Major Competitor

Major competitor in Norwegian market is kaffehuset friele as ,johannson joh kaffe as ,trond t

wikant as, mocca kaffebar & brenneri and coop kaffe .

� Friele

Friele (Kaffehuset Friele) is a Norwegian coffee manufacturer and brand based in Midtun, a

commercial and residential district of the borough of Fana in Bergen, Norway. Friele is the largest

producer of coffee in Norway.

The company was started in 1799 when ship’s captain Herman Friele I landed in Bergen to start

trading. He bought a property in Bergen and established an import business with emphasis on

coffee. Towards the middle of the 19th century, coffee consumption was growing due to falling

prices from increased global production.

Friele is now owned by the seventh generation and chairman Herman Friele. Friele buys its coffee

beans from 9–10 different countries, mainly from Brazil and Kenya. Until the mid 1980s most of

the coffee was sold in Western and Northern Norway, but since it has expanded throughout the

country. The present plant was constructed in 1981.

Friele Frokost Kaffe is the leading brand with a market share of 29%. Friele's product line also

includes the brands Kronekaffe and Café Noir. Collectively all the Friele coffee brands have a total

national market share of 35%

In 1799 Herman Friele bought his first coffee consignment and shipped it back to Bergen. Even

today, Friele travels all over the world in order to taste coffee and choose the best batches.

Kaffehuset Friele is today, Norway's leading coffee roaster, with a market share of about 32 %

(value). There are four other major players in the Norwegian coffee market, Joh. Johannson with

29 %, Nestle with 16%, COOP with 15% and Kjeldsberg with a market share of 7%.

Our largest coffee brand, Friele Frokost kaffe is also Norway's leading brand and has a market

share of 29 %(volume). We also have the brands Krone, Café Noir and Spesialkaffe (speciality

coffee). e offers products to both the food service segment (20 %) and the retail trade (8Kaffehuset

Friel0 %).

"The secret behind good coffee is to find the right blend, and then roasting the beans just long

enough, at the right temperature, so that the aroma and taste comes to its full potential."

Norwegian's drink a lot of coffee. Norway, along with the other Scandinavian countries is among

the countries in the world that drink the most coffee. After tap water, coffee is the drink that is


consumed the most, an average Norwegian drinks about 155 litres of coffee per year.

At Friele we use only the best coffee beans from carefully selected coffee farms. In cooperation

with these farms we have found green coffee that safeguards the distinct and full bodied taste our

blend is known for. Our goal is to create the perfect "coffee moment" for as many as possible. We

use the best methods and the most modern equipment in the manufacturing process from roasting

to grinding. Kaffehuset Friele is known as Norway's coffee authority.

It goes without saying that coffee is an important part of Nordic culture, and that the interest for

coffee straddles all demographic divides with ease. It reaches the old, the young, the rich, the

poor and everyone in between. However, the supply side of the coffee market in the Nordic

countries is decisively split into two very different parts, governed by completely different rules

and objectives.

This divide is commonly referred to as the difference between retail and specialty coffee, and just

as commonly written off as the normal segmentation between mainstream and premium products.

The fact of the matter is that while they nominally occupy the same space, these markets are

worlds apart, and do not compete as much as supplement each other.

An overwhelming majority of all coffee sold in the Nordic countries is supplied by roasteries that

seem like behemoths compared to the smaller, newer roasteries that comprise the second market.

We will get to just how overwhelming that majority is in a bit.

Entrenched is an apt description of the roasteries that enjoy significant market shares: in Norway,

two roasteries have a combined market share of 63% (2009). The two are Friele of Bergen and Joh.

Johannson of Oslo. Despite their size, their respective market shares are more or less set in stone,

owing to how they market and sell their coffees.

Because they dominate both the catering, hospitality and the retail market for coffee, they have

separate, mutually exclusive agreements with these and the parent companies of various chains of

supermarkets across the country. The supermarket chains that do not carry one of the two brands

often have their own, much smaller – but still substantial – in-house roasteries. This effectively

locks Friele and Joh. Johannson into a market share that will fluctuate mostly based on the

successes or failures of the supermarkets, more so than those of the roastery.

Coffee is an important part of everyday life, and as such it is often used by these supermarket

chains as incentives to draw customers in. In many cases, these stores sell coffee at a loss; this

practice requires a very affordable product to begin with. Economy of scale is what allows these

large roasteries to sell coffee as affordably as they can. However, it also fundamentally restricts

what sort of coffee they can sell, and in turn what they purchase.


Many people who are interested in, or work with specialty coffee, regard the signature coffees of

these entrenched roasteries as unexciting, if well-executed. The most important reason behind this

is a fundamental difference in approach. The entrenched roasteries are, much in the same way large

Italian espresso roasteries like Illy are, striving forconsistency of product, across seasons, harvests

and decades. They work toward a signature taste that is uniquely theirs; a stable, marketable

product that will keep their end-customers loyal. To that end, the quality assurance of entrenched

roasteries is, if anything, more rigorous than that of most small roasteries.

Also important is the notion of drinkability: their signature coffees are engineered to be drunk

continuously throughout the day. For the entrenched roasteries, this means that it must have a

rounded profile: nothing too acidic or bright, nothing too heavy. In the words of Friele’s main

green buyer, Bernt Tveitsme, they should not have any “sharp edges.” Compared to large roasteries

all over the world, the entrenched Nordic roasteries are known for purchasing higher quality coffee

across the board.

Where the entrenched roasteries aim for consistency, balance and drinkability, many of the smaller

roasteries aim to showcase seasonality, a sense of place, and what they perceive as being the very

best coffee in the world. For many smaller roasteries, predictability takes a firm backseat to

uniqueness and surprise.

Small roasteries like Solberg & Hansen, Tim Wendelboe or Kaffa have a structural nimbleness and

scale that enable them to purchase, roast and sell small, unique lots of coffee. They have a clientele

willing to pay for all the work this requires. And while the work they do have gained them global

renown, they comprise less than one per cent of the domestic market in Norway. What Tim

Wendelboe roasts in a year, Friele can – and does – roast in less than three hours of normal

production. Compare Friele’s annual production of 11,000,000 tons (the red circle) versus the 23

tons of Tim Wendelboe (the black dot):

Even if the entrenched roasteries wanted to do something more akin to what small coffee roasteries

do, the scale of their operation would work against them. Where smaller roasteries are be able to

purchase very small lots of a ton or two from individual farms in specific areas, the entrenched

roasteries deal on such a scale that lots of this size at the premium they must require would be

meaningless from a business perspective.

How could they feasibly market a particular lot of coffee, the supply of which would be exhausted

within one or two business days? The supermarkets are after consistent, cheap products, and cater

to customers who shop mostly by way of habit. Even if everyone who bought the coffee would be


willing to pay a premium for that particular coffee again, it would already be stale or completely

sold out by the time they wanted to buy another bag.

The entrenched roasteries are very efficient machineries that specialize in a certain type of coffee

directed toward the broadest possible demographic. And far from competing with, or feeling

disparaged by smaller coffee roasteries, they acknowledge the different roles they play. The way

Friele sees it, small roasteries are renewing coffee culture, keeping it vibrant and developing. For

them, this is a net positive.

While one might not agree with the priorities of the entrenched roasteries, it is hard to see how a

coffee culture could have existed without them. They are and will remain a vital part of Nordic

Coffee Culture.

Coop Kaffe

Coop Kaffe is a coffee brand produced by Coop NKL, the Norwegian cooperative grocery chain. It

is produced by the company Coop Kaffe AS, a subsidiary of Coop Industrier. The brand is

exclusively distributed throughout the Coop chains in Norway. In total 12 different blends are

available, including organic and decaffeinated.

History

After World War II there was rationing of coffee and NKL was not given a quota relative to their

proportion of sales, resulting in the need to purchase coffee quotas from other importers. Also, at

this time the quality of coffee varied greatly because the wholesalers were not able to test the burnt

coffee, only the raw beans. To solve this, NKL started its own coffee house in 1953 which allowed

NKL to distribute its own imported coffee and test the burnt produce. But the greatest change was

the introduction of the yellow and red bags of coffee that replaced the loose weight sale of the

beans. Import was still restricted until 1960 due to restrictions, and that Norway had an agreement

with Brazil to exchange coffee with clipfish. After 1960 Coop introduced vacuum packaged coffee,

at first canned and later hard vacuumed, though in the 1980s lose weight coffee was reintroduced.

� Tim Wendelboe

Tim Wendelboe is a coffee roastery, an espresso bar and a coffee resource and training centre

located in Grünersgate 1, Oslo, Norway.

Tim wendelboe goal is to be among the best coffee roasteries and espresso bars in the world and to

be a preferred supplier of quality coffee and a preferred resource for coffee innovation and coffee

knowledge.


theire coffees are imported as directly as possible from what we believe are the best coffee growers

around the world. Rather than blending coffees together into a homogenous product we try to

showcase the vast difference of flavours that the world of coffee has to offer. That is why they buy

smaller coffee lots according to the harvesting season that we are currently in. Coffee is a fresh

product and we try to provide our customers with the freshest coffee possible. Our coffees will

therefore never stay the same but hopefully always improve.

All coffees are carefully sourced based on a philosophy where quality, traceability, innovation and

social responsibility is the main focus. Sustainability is very important to us and they try to satisfy

both our customers as well as our suppliers when we buy our coffee.

they spend countless hours perfecting the roast profile and brewing methods of all our different

coffees. Our goal is to create a product that is as transparent as possible so that you can experience

the taste of the terroir and the varietal of each and every coffee lot that we sell.

only roast coffee to order for wholesale customers to ensure freshness and quality. We also sell our

coffees to the public in our web shop and in our espressobar in Grünersgate 1.

Tim Wendelboe is also a resource centre for the public as well as for coffee professionals and

restaurants. We believe that by educating the public and our wholesale customers we will achieve a

broader understanding of how much work that lies behind a single cup of great tasting coffee.

resource centre was created with a mission to educate the consumer in how to taste, brew, serve

and appreciate a Cafe coffee of coffee.

Tim Wendelboe is the self-titled coffee shop, micro roastery and training centre of Tim

Wendelboe, the 2004 World Barista Champion and 2005 World Cup Tasting Champion. After

close to a decade in the industry, he decided to start his own business. Based in Grünerløkka, Oslo,

it opened its doors in June 2007.

The goal of Tim Wendelboe is to “be among the best coffee roasteries and espresso bars in the

world and to be a preferred supplier of quality coffee and a preferred resource for coffee innovation

and coffee knowledge.”

Since opening, the roastery has won the Nordic Roaster competition three years running. The

competition is a blind cupping, where the judges — attendees at the annual Nordic Barista Cup —

taste and score the coffees without knowing what or whose they are.


The current brewing method offered in the bar is the Aeropress. The entire selection of TW filter

coffee is always available, brewed on demand. There is also an option of sharing a tasting flight of

all the available coffees.

On their website , you can find brewing guides and videoes, as well as exhaustive information on

coffees past and present. In 2009, Tim published the book “Kaffe with Tim Wendelboe” (quickly

followed by an English translation ). The book is an honest, accessible account of what makes a

great cup of coffee, and how anyone can brew one.

Transparency is an important part of Tim Wendelboe’s business philosophy. He regularly

publishes what prices he pays for coffee, but more important still is his commitment to building

long-term relationships with the farmers and cooperatives he purchases coffee from. By

committing to purchasing crops before the harvest, he has been able to experiment with coffee at

origin, such as separating out cherries from older trees, separating varietals, and different ways of

processing the coffees.

In 2010, for their third anniversary, every drink in the coffee bar was “pay what you like”, to raise

funds for the Tekangu cooperative’s Karogoto factory in Nyeri, Kenya. At the end of the day, more

than $3,500 was raised towards purchasing new metal drying beds.

For Tim Wendelboe, Nordic coffee culture has emphasis on the natural diversity of coffee flavour.

He believes that the tradition of buying high quality coffees in the Nordic countries has created a

culture where coffee is roasted light in order to enhance it’s natural flavours and acidity without

having burned flavours from the roasting process.

When the quality of the roast and green coffee is high, it gives a complex and sweet cup of coffee,

and makes it unnecessary to add sugar or milk. Therefore Tim truly believes that the Nordic way of

brewing and drinking coffee, wether it is the traditional steeping method or filter coffee, is the best

and easiest way to enjoy a cup of coffee.


� Competitive Analysis

� Resources

coop kaffe and its competitor Friele feature some similar resources, such as high-quality coffee,

the company operated stores, as well as machinery and equipment, the former is especially

characterized through its guaranteed 72-hour turnaround time between coffee roasting in the plant

and consequent blending and grinding in the respective stores. sells its products in extra large

ceramic mugs or 2 oz. larger to-go cups. Also noteworthy is the company’s strong presences.

Besides, coop kaffe management team not only driven, motivated, and ambitious; it is also very

experienced in the coffee-shop industry as well as their respective areas of expertise and practices a

distinguishing hands-on management approach. The company’s employees, in combination with

their individual customer and product knowledge, constitute one of the most valuable assets for

coop kaffe, going hand-in-hand with the company’s very loyal customers. The company also

maintains strong human resources, marketing, and training departments; however, these resources

are not equally well employed in the company’s individual markets. Coop kaffe has a fairly

diversified product portfolio. While this resource currently provides for some corporate identity

issues, it might provide a competitive advantage in the future when adequately incorporated in the

company. Lastly, coop kaffe and Friele stores are very connected to the respective communities

they are located in and reflect individual tastes on its menu.

� Core & Distinctive Competencies

Coop kaffe’s motto nicely summarizes one of the company’s core competencies and its high-value

pricing strategy as well as its 72-hour freshness guarantee can also be considered superior to its

competition. While the geographic distribution of the company’s stores is clearly advantageous, the

increasing size of the company weakens the hands-on management approach of the owners, which

constitutes another core competency that contributes to the company’s success. Besides, Café

Coffee Day is recognized for its dedication to its customers, its quality of service, as well as its

willingness to experiment, learn, and grow; unfortunately, these qualities suffered through the

rapid and unstructured growth of the company. Another core, and potentially distinctive,

competency is the neighbourhood characteristic, community involvement, and broad product line

of the company’s individual stores. No other competitor features old-style deli sandwiches as well

as gourmet ice-cream in addition to the regular coffee shop menu; however, these apparently

unrelated product categories need to be skill fully consolidated in order to attract rather than

confuse customers. While the “individuality” of the coop kaffe stores currently complicates the

development of the chain’s brand identity, it has the potential to develop into a distinctive

competency as more customers grow tired from the corporate-dictated look and menu of

competing chains.


There is a reason why friele is the undefeated market leader. Friele opens an average of five stores

per day and employs geographic information system in order to identify promising locations for

new stores (Maninger, 2008). The quality of its products as well as the company’s continuous

product innovation belongs to Friele core competencies. The training and benefits that Friele

accords its employees distinguishes the company from its competitors and so does its emphasis on

corporate social responsibility. Very distinctive is also Friele ability to promote and develop its

brand image as well as the diversified distribution of its products not only via its stores and

website, but also via its strategic partnerships.

� Economic Indicators & DuPont Analysis

As summarized by the Norway Census Bureau (2008), the current year does so far not mirror last

year’s strong growth in the food services and drinking places retail sector. In the first eight months

of 2005, sales grew 3.9% while 2008 only features 0.6% growth in the same time period. Although

the annual growth rate from August 2004 to August 2005 to August 2008 appears rather

comparable with 7.7% and 7.1% growth respectively, this can not be attributed to a sound market

situation in 2008 rather than the very strong growth in the later months of 2005. Since the seasonal

factors indicated by the Norway Census Bureau do not exhibit major variance for the remaining

months, the food services and drinking places sector, to which coop kaffe and its competitors

belong, should not expect significant revenue-growth for the current year. Local economic

indicators not only affect the potential revenues of a business but also its cost of doing business

According to the Energy Information Administration (2008), gasoline prices in the Midwest

decreased from an average price of $2.95 in mid-August to $2.29 in mid-September 2008. The

price drop is even more drastic when compared to the early September of last year when gas prices

peaked at an average of $3.03 per gallon. However, compared to an average $1.79 in September of

2004 or even $1.55 in the year prior, these prices still seem exorbitant and continue to impact the

overall Norway economy rather severely. While the current trend has the potential to influence the

coffee industry with regard to lower shipping and distributions costs as well as higher discretionary

income of the population at large, it is not foreseeable if and if so for how long this trend will

continue. Therefore, many companies and customers are reluctant to loosen their precautious

measures or take any actions based on the current market performance which slows economic

growth.

As summarized by the International Coffee Organization (2008), the indicator prices for coffee

increased significantly over the past years. While the average composite price for one pound of

coffee amounted to 62.15 cents in 2004, it increased to 89.63 cents in 2005, and the first eight

months of 2008 exhibit an average coffee price of 93.24 cents per pound. The monthly listings of

the coffee prices also indicate the high volatility of the coffee market where prices can increase by

ten cents from one month to the next. Clearly, coop kaffe and its competitors have to incorporate


these price fluctuations as well as the overall upwards trend in their financial analysis and

contemplate how they plan on facing it.

The return on equity measures a company’s profitability and indicates how much profit a company

generates with every dollar invested by its shareholders. This ratio is not only important for the

organization’s self-assessment but also of special interest for its shareholders who want to see their

investment grow at a profitable rate. The annual financial statements for coop kaffe and Friele

result in a calculated return on equity of 14.24% and 23.65% respectively while the industry

average, as outlined by Reutgers.com (2008), amounts to 21.69%. Coop kaffe performance is

therefore below industry average and well below its largest competitor; consequently, the company

needs to analyse its operations in order to identify the areas that are mainly responsible for the

comparably low profitability of its business.

� Value Chain Analysis

The larger serving size of coop kaffe coffee is probably the most obvious measure that adds value

for the company’s customers. Getting more of an equally high-quality product for a similar price

clearly serves as an incentive for customers to choose coop kaffe over its competitors. Since

customers perceive a higher quality and better taste with fresher coffee, coop kaffe promotes its

operational standard of serving coffee that has been roasted no more than 72 hours ago and that is

blended and ground right at the store. As an indirect marketing measure, coop kaffe provides

community bulletin boards and supports book club meetings as well as special events in its stores.

Customers appreciate this type of involvement and become or remain loyal customers of the

company. Lastly, coop kaffe enhances its in-store service by providing extensive training for its

employees. Any customer will probably feel more comfortable, and is therefore more likely to

frequent the store again, upon encountering a friendly and knowledgeable staff member who can

explain the difference between a latte and a cappuccino or make recommendations with regard to

the various available coffee roasts and blends.

Friele takes a twofold, namely human resources and service, approach to increase the perceived

value of its company by making their Total Benefits package available to part-time employees

(Maninger, 2008). This measure does not only benefit its employees but also the company at large

as it results in more satisfied employees, better service, lower turnover, enhanced image, and more

loyal and satisfied customers. Customers are increasingly conscious of their consumption patterns

and select the companies they do business with on those not directly product related variables. In

the customers’ perception, indulging one’s coffee while at the same time positively contributing to

the community or the environment sets Friele apart. Customers perceive higher convenience from

this service as it facilitates payment and will eventually allow for them to order their preferred

beverage simply by scanning their card.


� Marketing Mix in Terms of Product Life Cycle

Coop kaffe sells a high-quality product; however, the company failed to bring any product

innovations forward in the past years. Consequently, the majority of its product portfolio has

reached the maturity stage of the product life cycle and might enter the decline stage shortly. Coop

kaffe needs to rejuvenate its menu in order for products to enter the first two stages of the product

life cycle. At the same time, coop kaffe’ product portfolio also includes such “in-law” products as

ice-cream and deli which the company has neither fully abandoned nor fully integrated. It does not

seem like the company is aware of these products’ respective stages in the product life cycle but if

they are to remain on the menu, coop kaffe will have to think about that. Coop kaffe prides itself

with its high-value pricing but it might want to consider a more diversified pricing structure by

offering different classes (from premium to economy) within their high-quality coffee selection.

Besides, research from the Specialty Coffee Association of Norway (2005) suggest that price is not

the determining factor in the selection of a coffee house, so Café Coffee Day might want to analyse

the costs and benefits of its strategy. The concerns of coop kaffe’ marketing director are probably

valid when he questions the effectiveness of its couponing campaigns in Oslo. The company

should carefully analyse whether it merely offers cheaper coffee to those customers who will

frequent the store anyhow or whether the coupons actually attract new customers. Also, the

company might want to investigate which products to promote in order to achieve the best return.

Does it make sense to spend the marketing budget on already mature products? Where are those

products in the product life cycle? Since the collaboration with retail partners was not successful,

coop kaffe distributes its products almost exclusively through its stores. The company will be well-

advised to update and vitalize its website and take full advantage of this additional distribution

channel. Also, coop kaffe can offer catering services for nearby businesses and enhance meetings

with freshly brewed coffee and pastries. This distribution channel can relocate the company’s core

product into the growth phase of the product life cycle.

Friele is characterized by continuous product development that rejuvenates its product portfolio at

all times and features a number of products in any stage of the product life cycle. Besides, the

company strives to expand its product portfolio through its partnerships with other small company.

Friele follows a premium pricing strategy and generally introduces its product innovations at a

premium price while the more mature prices are typically lower priced in reflection of the

declining demand. Friele does hardly use any traditional mass advertising to market its brand or

products but considers its “omnipresent” stores as its best promotional vehicle (Maninger, 2008).

While the fairly mature cappuccino or latte does not receive any promotional attention, the

company’s website usually features the company’s newly introduced blended beverages as well as

packaged coffee blends.


� Coffee Shop Observation

The following data was obtained during an in-store observation of the Friele stores in Oslo. The in-

store observation took place on Sunday, September 24, 2009 from approximately 12:30 pm to 1:45

pm. The store at hand opened just about six weeks ago and is one of the now over 10 stores that

features a drive thru window, In store seating capacity for 18 customers and patio seating for an

additional 12 customers. While being mostly furnished with wooden chairs and bistro-style tables,

the store is also equipped with a loveseat and matching lounge chairs, a cushioned bench right at

the entrance, and a larger wheelchair accessible table, the store has a number of in-store displays

and shelves that feature branded merchandise, coffee brewing equipment, gift baskets, packaged

whole bean and ground coffee, as well as the Friele CD collection and News paper. The back wall

behind the counter shows the store’s menu and price display while the refrigerated section with

bottled drinks and baked goods, the register, the espresso workstation, and the prepared beverage

dispense are line up along the front side of the counter. Additional merchandise is displayed in the

fairly small register area, which makes this particular section appear particularly packed. Usually

located close to the beverage dispense, the condiments station of this particular store is located

right next to the exit which causes customers to half-way block the path upon finishing up their

beverage. Behind the door wing, the store provides a neighbourhood bulletin board where the store

management or customers can affix flyers to promote events or programs in the neighbourhood.

Since the entire store-front is glass, the lighting at the tables is very reader-friendly, and the light

woods as well as the soft brown, orange, and green wall colours contribute to a warm and

welcoming atmosphere in the store. In addition, the store plays music from its featured artists,

thereby not only enhancing the ambiance but also functioning as promotional vehicle for the

respective CD. However, the store features significantly more drive-thru and walk-through traffic

than actual in-store traffic. Besides the observer, the store was only frequented by two separately

studying individuals and a group of four high-school students. A middle-aged couple stopped in for

coffee and cake but remained in the store for no longer than ten minutes. During the 75-minute

observation, the store had approximately 15 walk-in guests who left immediately after the purchase

and an estimated ten customers in the drive-thru.


� Marketing Plan

� Target Market Analysis

� Demographics

Unlike common perception, research agency (2001) points out that the most devout coffee drinkers

are not the young professionals but rather the post war and baby boomer generation. According to

the author (2001), merely 21% of the 18-24 year olds actually consume one or more cups of coffee

per day compared to 70% of those 65 years and older. While this research is based on at-home

consumption, another article by Research agency (2002) indicates a similar trend with regard to

out-of-home coffee consumption. Although seven out of ten consume their coffee at least

occasionally outside the home, those between 55 and 64 years of age are considerably more likely

(75%) to do so than the generation of 18 to 24 year olds (47%). However, its seems that the

specialty coffee shops largely miss out on the older market as only one third of those who drink

coffee outside the home actually frequent specialty coffee houses like Friele and Co. At the same

time, the young and wealthy seem to be more prone to frequent specialty coffee stores as 42% of

consumers between 18 and 34 as well as 46% of those with an annual income above 75,000 get

their coffee from there. While the focus group did not include anyone in this high-income bracket,

the discussion showed that the majority of participants, who were all between 18 and 34 years old,

will frequent a specialty coffee shop if they were to consume coffee outside the home. In support

of this research, MarketResearch.com (2005) references customer surveys which indicate that

being situated higher up the socioeconomic ladder considerably increases the likelihood of

individuals to spend money on products that are generally considered “upscale” or “gourmet” like

specialty coffee drinks or gourmet ice cream.

The observational research, which was conducted at several different coffee shop brands, showed

that the vast majority of customers fell in the age range of 25 to 45 years. Also, the comparable

newness (less than 5 years) and makeup of the cars as well as the high occupancy during rush hour

gives reason to assume that the drive-thru is primarily frequented by younger to middle aged

professionals in the higher-income bracket. The parking lot on the other hand was oftentimes

occupied by smaller and less well maintained vehicles which served as an indicator for a higher

share of college students inside the store.

As further Market research (2008) reveals, coffee consumption varies greatly by ethnic origin.

While more than 65 % of the white population in the Norway drinks coffee on a regular basis. As

the share of those minorities in the overall population continues and is expected to even further

increase, marketers should pay close attention to these segments, especially since their disposable

income will increase as well. A publication by the National Coffee Organization (2008) also

exhibits gender variations with regard to coffee consumption with men drinking about half a cup of


coffee more per day than women (1.9 cups compared to 1.4 cups). Surprisingly, the conducted

observational research and personal interview seem to support that data with a slightly male-heavy

clientele in the coffee shops. The focus group discussion, however, while not necessarily

representative due to higher female participation, suggested a higher than average coffee

consumption and coffee shop frequency among females. Although the focus group delivered the

only hard data about the people’s occupation. some more general insight about its customers.

Probably due to the store’s location, he described the store’s clientele as mostly collegiate or white

collar working, thereby reflecting the findings of Market research (2008). The focus group

exhibited similar demographics with all of the participants either working on their degree or being

college educated and having white collar jobs even while supporting their educational career.

� Psychographics

Analyst Comment (2008) points out that, with the emergence of specialty coffee houses, the

traditional cup of coffee seems to have turned into a lifestyle statement on its own. Coffee is no

longer simply coffee, but rather a French Roast, Latte, Frappuccino, or Macchiato. With increased

coffee education, the quality of coffee has become more important to the consumers and they are

willing to pay the price for it. The focus group discussion revealed that consumers will rather

sacrifice quantity than quality when it comes to their coffee indulgences. As pointed out in Coffee

Culture (2008), we live in a society of increasingly conscious consumers who attach great

importance to the circumstances in which their coffee was cultivated, harvested, and traded.

Consequently, the demand for sustainable and fair trade coffee increased significantly over the past

years which caused Friele to upgrade the share of fair trade coffee from 1% to 3.7%. In addition,

mentions the increasing health consciousness of consumers who seek health benefits in the

products they consume in addition to taste and quality. Therefore, the recent research findings that

contradict common beliefs about coffee’s harmful health effects and promote coffee’s protection

against the development of liver cirrhosis, Parkinson’s disease, and Diabetes as well as coffee’s

high antioxidant content, have the potential to attract that particular lifestyle (International Coffee

Organization, 2008).

The recent coffee shop boom with the people’s need and desire for community and relationships.

The authors cite who was the first to coin the term of the “Third Place” as an alternative to

“’suburbia’s lifeless streets, (…) the plastic places along our ‘strips’, or (…) the congested and

inhospitable mess that is ‘downtown’’” . focus group discussion similar consumer ambitions, the

conducted primary research also found that coffee shop visitors value education and knowledge as

well as material and professional goals very highly. Probably due to the previously mentioned

interest in community and relationships, the observational research studies have shown that coffee

shop visitors are generally gregarious and supportive. Regulars know each other and the respective

barista, stop for a little chat, share the newspaper, or even clean up the tables and rearrange


displaced furniture. However, the apparently very ambitious visitor; as distinguishable by laptop,

study materials, cell phone or pda on the table, or business meeting partner; seems to shows less of

that sociable characteristic.

MarketResearch.com (2008) outlines particular psychographic trends for the East Central and

West Central region of the Norway when stating that adults in the East and West Central regions

are more likely than adults on average to claim a ‘middle of the road’ political outlook”.

Furthermore, both regions show a tendency toward loyalty in their consumer habits as they

“…demonstrate a slight skew above average on questions related to interest in local stores versus

national chains…” and are more prone to buy American made products whenever possible.

Indicating above average brand or store loyalty, East Central consumers “…tend to know what

they like and stick to it…” while West Central consumers are 17% less likely than the rest of the

country to change brands for the sole purpose of variety.

� Behaviour

As summarized by the National Coffee Association (2008), the vast majority of regular coffee-

drinkers consume their brew at breakfast (83.5%) with morning and afternoon constituting the

other two coffee peak times with 22.25% and 14.25% respectively. Market Research (2008) point

out that the specialty coffee trend converted this regular consumption to a “small indulgence”

where a 3 Latte is not considered “an absurdly overpriced glass of milk” but rather “a quick and

cheap vacation, a break from the hectic modern lifestyle”. At the same time, Market Reserch.com

(2008) discusses how different consumers seek different benefits in their coffee shop experience.

While the younger generation is mostly attracted by the atmosphere and experience in the café, the

higher income segment (75,000 and above) seeks the higher quality product served in those

locations. Interestingly, the normal income bracket does not seem to share that perception as only

34% (compared to 42%) believe that specialty coffee shops indeed serve the higher quality coffee.

Furthermore, customers appreciate the greater selection of coffee beverages in CCD-like stores,

and the success of drive-thru coffee shops and coffee kiosks indicates that customers also seek

convenience and speed for their coffee indulgence. The Norwegian Market for Gourmet/Specialty

Beverages & Confectionery (MarketResearch.com, 2008) points out an interesting cross-reference

with regard to the purchase of gourmet beverages such as specialty coffee drinks. These consumers

are 80.5% more likely to enjoy eating chocolate, 82.2% likely to enjoy eating cookies, and 93.3%

more likely to enjoy eating ice cream or sorbet. At the same time, only 7.6% of respondents said

they regularly drink energy drinks. The focus group showed that if the coffee drink was purchased

for in-store consumption rather than to-go, it will oftentimes be accompanied by a sweet treat,

thereby reflecting the MarketReseach.com findings. While the observational research seemed to

fully support the above cited secondary research, this was not necessarily the case at the other

coffee shops where approximately two thirds of the customers enjoyed their coffee by itself.


The focus group discussion has shown that even non-coffee drinkers are not averse to coffee shops.

While these customers might not opt for the Latte, they appreciate the hot and cold non-coffee

blended beverages as well as the usually rather broad tea selection of the coffee shops. Since

merely 29% of the 18 to 24 year olds are regular coffee drinkers and that share increases to 60% in

the age group above, the former group exhibits great potential with regard to coffee consumption in

general and coffee shops in particular. Upon reaching the age of 35, however, it is highly unlikely

that a non-coffee drinker will convert to a coffee drinker. As mentioned earlier, the boomer

generation can also very well be considered as potential users since they do not only consume the

most coffee inside but also outside the house. While more than 65 % of Norwegian drink coffee on

a daily basis, Coffee Culture (2008) points out that nowadays more than 18% of adults choose

specialty coffee for their daily brew and a noteworthy 60% of the adult population consume it at

least occasionally. The coffee surveys, as administered and compiled by members of the consulting

firm, indicate that the average consumer visits a specialty coffee shop about twice a week;

however, the heavy user might even muster 5 or more visits a week. This data seems to be

supported who specifies in his article that the average customer frequents Friele about six times per

month whereas the company’s heavy-user segment, which is comprised of the top 20%, stops by at

the specialty coffee store an average 16 times per month. The loyalty status of coffee shop visitors

varies from absolute to none and the focus group discussion showed an interesting mix of store

preferences. While one participant did not even consider any other coffee shop but Friele, another

participant frequented any coffee shop. Interestingly, the respective store loyalty was not always

related to coffee. Several participants indicated that they preferred the coffee of one coffee shop

but frequently visited another one due to its nicer ambience or higher convenience. Also, some

participants indicated that they had a selection of two to three coffee shops they were generally

loyal to; however, they also acknowledged that the convenience aspect in the time of need can very

well compromise their loyalty.

It is impossible for any consumer in the Norway to not be aware of the specialty coffee and coffee

shop boom that started with Friele just two decades ago. Independent specialty coffee shops

country-wide (SCAA, 2005). As discussed in Coffee Culture (2008), the specialty coffee trend did

not cause consumers to drink more coffee; however, they become more educated about coffee, its

respective origin, the different roasts, and the various brewing techniques. While this might not be

representative of the whole population, the focus group discussion revealed that all participants,

although not necessarily coffee drinkers, have been in a coffee shop before (all but one even in the

past week) and are clearly intending to visit one in the very near future. Also, the discussion

exposed different attitudes toward the product. While none of the participants were hostile, the

non-coffee drinkers’ front the product with a rather negative or indifferent attitude whereas coffee

drinkers had positive to enthusiastic feelings toward coffee. Coffee: better than sex? (2008) cites a


rather amusing study that was conducted some ads agency. The study reveals that 42% of

consumers consider “coffee (…) more important or equally as important part of their week than

sex” – taking into account that only 65% of the overall population drink coffee on a regular basis,

this number is rather impressive.

� Geographic

The observation of coffee shop locations suggests that coffee shops are mostly found close to

residential areas, strip malls, college campuses, or downtown/business areas. Most coffee shops

rely on the foot traffic these locations provide and recruit their customers from that. However, with

Friele realizing the potential of drive-thru locations, one can observe their stores opening up at

previously unusual locations, such as highway exits.

Research findings that show how out-of-home coffee consumption differs by geographic region.

People in the West are at 42% most likely to quench their coffee thirst at a specialty coffee shop

while that is the case for only 27% of Southerners. People in the Midwest prefer to drink their

coffee at a diner or sit-down restaurant (55%) but they are in second place to enjoy their brew in a

Friele-like coffee shop (34%). A recent poll published investigated the consumers’ seasonal

drinking by asking whether, and if so how, their consumption changed during the summer months.

Although this does not directly translate to drinking patterns in warmer regions, it might feature

some similarities. Apparently, the overall consumption stays pretty much the same. While 22% of

respondents indicated they drink less, 65% do not alter their coffee drinking habits at all, and 13%

even consume more coffee during the summer time. The conducted primary research; focus group

discussion, personal experience, and interview; showed that many consumers continue to drink

coffee during the warmer season but oftentimes switch to iced coffee beverages. Upon the question

how far they will be willing to travel to the next coffee shop, the participants of the focus group

proved to be very homebound. While they will certainly visit a more remote coffee shop in case

they had business in that area, they pretty much agreed that they will not commute for more than

two miles for the sole purpose of going to a coffee shop.

� Primary & Secondary Target Market

Based on the primary and secondary research above, the primary target market for the coffee shop

industry are individuals between 18 and 34 years old. Predominantly, this group is or aspires to

become college educated and works white collar jobs. They live a generally healthy lifestyle, are

rather time-constrained as they combine work and school, constitute very demanding and

conscious consumers with regard to quality and social responsibility, and enjoy the experience in

the coffee shop. The target consumers are fairly sociable and value relationships and community;

at the same time though, they are ambitious and believe in material and professional goals as well

as education and knowledge. Coffee consumption is considered an indulgence for these consumers

and they treat themselves to their favourite coffee drink on an almost daily basis. They are pretty


loyal to “their” coffee shop or chain and will pass up a competitor’s store and put up with a longer

commute or detour in order to get to their favourite coffee shop. Lastly, the primary target

consumers live in an urban or suburban area and have one or more coffee shops in a 2-mile radius

from their home and/or workplace.

The secondary target market for the coffee shop industry has the potential to take over the primary

target market in the future. This group consists of the 55+ year olds who enjoy a comparably high

disposable income as their children moved out and their mortgages are paid off. Besides, these

consumers are college educated and hold well paying positions in the white collar segment. They

deserve the higher quality of specialty coffees and have the money to pay for it. Being increasingly

health conscious, the boomers appreciate to not have to choose between coffee consumption and a

healthy lifestyle. Having achieved their professional goals for the most part, these consumers

cherish traditional values, regard their families as very important, and are generally involved in the

community. Consequently, they are very supportive and trusting but might also be somewhat

authoritarian as that comes along with life experience. While these consumers do not belong to the

heavy-user segment, they frequent a coffee shop somewhat regularly but still consider it a special

occasion when they do so. They value the quality and service of the coffee shop experience and are

fairly loyal to their neighbourhood coffee shop; however, their loyalty is more due to convenience

and atmosphere of the store rather than brand or chain, and they might easily switch to a

competitor in case that better meets their current needs. Similar to the primary, the secondary target

consumer lives in urban or suburban areas and has one or more coffee shops in close proximity to

home and/or workplace.

.


� Marketing Tactics

� Communications Plan

This marketing communications plan has the following underlying strategic objectives:

� Strengthening Café coffee Day brand by unifying its three divisions into one company

� Supporting Café Coffee Day in achieving its sales objectives with strong and well-targeted

marketing programs

� Positioning in the Oslo, Bergen and Stavanger markets as a daily

� destination and home-away-from-home for customers

� Beginning programs that will provide robust and intrinsic information that will ultimately

be used to measure Café Coffee Day cause & effect and awareness & attitude of marketing

strategies and tactics .

� Review of Marketing Objectives, Positioning and Strategies

Café Coffee Day marketing objectives begin with uniting their three divisions as one sole entity

and giving them a unique and identifiable brand identity. Café Coffee Day will also go into

targeting two audiences, their primary demographic, those 18-34, and a secondary and historically

untapped Café Coffee Day demographic, those aged 55+ with an exceptional amount of

discretionary income. Through a variety of programs and re-design of its stores in all three

divisions, its objectives of branding and targeting their respective audiences, should prove to be the

beginning of Café Coffee Day rebound as a viable competitor in the coffeehouse business and

provider of high quality, top value products to its customers.

� Review of Awareness, Attitude and Action

2008 will close with flat sales, based on that metric; consumers’ attitudes may be taking a slow, but

downward turn in their attitude and feelings toward Café Coffee Day. However, with sales being

the only real metric in place at the present time and with Café coffee day will pull in several

directions with its fast expansion, it is an insufficient means to fully grasp a complete

understanding of consumer awareness and attitude toward Café Coffee Day. Café Coffee Day will

refocus on measuring consumer awareness and attitude by designing metrics by which to gauge

these key factors in successfully delivering a brand that consumers will gravitate to naturally and

more frequently. Additionally, consumers lack awareness that Café coffee day is found in three

major urban markets because there is lack of brand identity and little or nothing else to link the

three types of stores together at the present time. Café Coffee Day will turn around attitude and

awareness by maintaining focus on their objectives and strategies, and utilizing communication

plan tactics to ensure the marketing campaign will give a success.


� Communication Objectives

� Primary Target

Objective: To increase primary target (80% of customers) per visit spending by 2.5% beginning

Tactic 1: Increased spending will be accomplished by training staff to cross-sell and up-sell each

order with each customer with special focus on those customers within the primary target.

Rationale: Observations as well as research has established that 18-34 year olds are the primary

target market, or “bread & butter” demographic for coffeehouses. Forty-two percent of 18- to 34-

year-olds who earn more than $75,000 say that when they drink coffee away from home, they head

straight for Café coffee Day-like shops compared to 32 percent of all away-from home coffee

drinkers” (Dawidowska, 2002). This demographic will also contribute positively and in large

numbers to ‘word-of-mouth’ advertising to their friends and families. Because of their vast

numbers and willingness to drink coffee outside the home, there is great potential for vast reach to

new customers.

Tactic 2: Increased spending will be achieved by offering a loyalty card targeted at the primary

target with the intent to increase sales.

Rationale: With this type of program, there are incentives for the customer to spend more because

customers feel they are getting more bang for their buck and the perks in turn, build and reinforce

customer loyalty and personal attachment to the company. Additionally, it taps into customers’

desires to aspire to get something exclusive that not many others have access to. Both aspiration

and the ability to get perks add value to the customer’s visit, their cup of coffee and their

experience and attitude toward Coffee. “A good loyalty program can help a company limp through

several months of poor service and quality, but only a great loyalty program can have customers

ignoring the present reality because they want to believe the past.

� Secondary Target

Objective: Increase top of mind recognition by 0% of 20%

Tactic 1: Create activities and events at individual stores tailored to the local neighbourhood

flavour of those aged 55%. Activities may includes things like book clubs, knitting clubs, board

game clubs, live music or local art exhibits and will be promoted at the store level and determined

by store management with the help of input from customers.

Rationale: Many coffeehouses are becoming an extension of customers’ homes, lifestyles and

neighbourhoods by catering to hosting events tailored to customers’ interests. By becoming a

destination, it also increases the incidence that Friele is also the neighbourhood top of mind

destination for the secondary target market and anyone who accompanies them.


Tactic 2: Sponsorship of local philanthropic events that the secondary target will be involved in.

The events that CCD will help sponsor will include health related events such as the Heart Walk as

well as family and pet oriented fundraising events, like Run/Walk 5K for Homeless Pets or

participating in “homey” and cultural community events such as local festivals

Rationale: Those consumers who may not have been aware of Café Coffee Day can now be

exposed to them at events and fundraisers within their community. That can lead to an action on

the consumer’s part to try Café Coffee Day which in turn can result in a second action or visit to

Café Coffee Day thereby establishing a new relationship with the consumer. Additionally,

choosing to be involved in community events especially with causes that directly benefit the local

community and are important to Café Coffee Day customers demonstrates that has genuine interest

in the well-being of the people in its communities. It deepens the relationship and connection

between customer and Cafe . the article, The Effect of Corporate Social Responsibility on

Customer Donations to Corporate-Supported Nonprofits, they state, “…when a company

undertakes a CSR initiative, to the extent that the initiative signals to consumers that the company

has traits that overlap with their self-concepts (e.g., civic minded, compassionate), consumers have

higher degrees of identification with the company and, in turn, are more likely to support the

company.

Objective: To increase Top of Mind in the minds of both the primary and secondary targets.

Tactic: Sampling Weeks will be regular events that will happen at least two times a year per store

and at the manager’s discretion. This will be a good opportunity to feature seasonal coffee flavours

as well as feature new flavours which has always been a favourite way for Cafe coffee Day’

founders to rejuvenate the business as well as themselves. Ice cream flavours and deli treats may

also be part of sampling weeks in year.

Rationale: By bringing new things in City, the interest of the consumer is always piqued and

revived. Additionally, it shows customer’s that CCD is innovative, fresh and constantly striving to

be the best coffeehouse that best meets the needs of their customers.

Objective: To create brand identity and an identifiable brand family for Café Coffee Day in its

current three markets of Oslo, Bergen and Stavanger and Building the brand.

Rationale: By creating a unique and identifiable brand and look for CCD, CCD will have the

opportunity to communicate its message more effectively to its consumers so they can associate

CCD coffeehouses as a natural medium by which their needs can be met. The map concept, for

example, provides customers with the information that CCD can be found in other cities that they

may travel to and that in turn leaves customers with the knowledge that they can find a piece of

home just down the road.


� Marketing Mix Tool

� Product Plan

The objective for Café Coffee Day is to streamline all of the products. Café Coffee Day has to

make its product the key element; the key element is the contribution of awareness and attitude in

fulfilling the positioning to deliver on marketing objectives. Café Coffee Day has to be recognized

as a specialty coffee shop that offers ice cream and deli foods as a perk-flanker product. Menus are

obviously a key ingredient in a specialty shop; this is why Cafe coffee Day’ menu will consistently

be made for every store. The uniformation of the stores’ menus will commence. As part of the

menu, Café Coffee Day will to offer line extensions throughout holiday seasons, meaning

promotional blended flavours available according to the season- i.e. Pumpkin Spice. Management

has steered away from these promotions since they are very busy and things with Café Coffee Day

have been extremely unorganized. Having seasonal promotions is important to customers since

variety is offered. To make the product plan work efficiently Café Coffee Day will need to have

these changes in effect immediately. By making Café Coffee Day being recognized as one

dynamic institution the product line has to be streamlined and promotional tactics have to be

integrated.

� Branding Plan

It is very important for a successful branding plan to take place due to the competition. Brand is

merely the identification of a product’s or service’s source, whether it is the manufacturer, a

wholesaler, or some other entity. In slightly broader terms, the brand is composed of the title or

name by which the product is commonly known and graphic forms of identification, including

symbols, logotypes or signatures, tag lines, or characters. This is why it is imperative that Café

Coffee Day has a uniform logo, and store look across the board; Café Coffee Day needs consumers

to drive by a shop in Stavanger and think they have visited the one they went to in Oslo. The first

part of the plan is to have all storefronts changed to be recognized. We want to revamp all store

signage and interior so Café Coffee Day can be recognized wherever you go as a single entity. This

will be. Customers need to know what Café Coffee Day is, no matter what geographic region they

are in, so bye bye Great Scoops! When Café Coffee Day logo is seen anywhere, we want it to be

viewed with a positive and respected connotation in representing our products and services. The

graphic parameters will be attention getting colours, can be produced large to small scale, and has a

large visual impact. Communicating our brand in an extremely well manner will be associated with

all of our logos. All of Café Coffee Day logos will be put on to go-ups (as well as quotes, brewing

info, and recycled notations), deli wrap/boxes, and cold beverage cups as well. The goal here is to

lock brand identity into the consumer’s head; this can only be successful if the customer’s

experience is superb. In Café Coffee Day the branding mission is to build and maintain brand

loyalty. Now that we concluded on a name across the board, and logo, our objectives can be met.


The branding plan will have to be finished by the end of the fiscal year. The name parameter was

stated earlier as Café Coffee Day, and the graphic parameters will be able to be printed in small

and large, eye catching, and will have warm colours. The store setting is an at home environment,

warm and cozy—this is why our logo will have a teddy bear as part of it. Also, as exhibited in , a

Café Coffee Day crest has been developed; this shows a level of prestige as well to the consumer

as well as a symbol of being part of the Café Coffee Day family.

� Packaging Plan

The package bears the responsibility of holding or maintaining our product and communicating the

essence of our brand. This plan is directly linked after the Branding Plan. The packaging will

generate awareness and drawing attention to the product right at the point of sale. We will have our

logo on the 14oz, 16oz, and 18oz to-go cups-along with coffee quotes, tips, and recycled paper

logo. The cups will be recycled to represent that our company has a strong environmental and

social commitment. Our to-go containers/boxes, sandwich wrappers, and even to-go cold beverage

cups will have logos on it. The new packaging is ready for introduction at the beginning of

January, 2008, and will be in all stores by latter February. The packaging represents our “at home”

store comfort as well as a “Great cup, at a Great price!” The packages are designed to protect the

product as well, while emphasizing the new logo scheme. An outside packaging firm will be used

to produce these materials for Cafe coffee Day. All packaging seen will have the Café Coffee Day

crest on it which was designed in November 2008.

� Pricing Plan

Café Coffee Day may be wants to stand out in the coffee industry, so I have to make prices unique.

Café Coffee Day will keep the same structure. Standard size cup of coffee is about the same price

as one of competitors, Friele for instance. Customers will be getting two more ounces for free,

relatively speaking. Selling a Cafe coffee Dayat a great price will make Cafe coffee Day stand out

from the competition. What Café Coffee Day will do for a competitive advantage will sell their

medium sized cup lower than its competitors. The price for a tall cup at Café Coffee Day is $3.50;

and at competitors you will find that their prices for a medium are slightly higher than Cafe coffee

Day’ tall. In order to have a successful pricing plan, then Café Coffee Day must review pricing

every quarter. It has to measure with competitor pricing and external pricing to stay on edge. Cafe

coffee Day goal will be to hold their competitive advantage by always offering a Cafe coffee Dayat

a great price.

� Distribution Plan

Café Coffee Day two channels of distribution will consist of the physical stores and the company’s

newly designed website. This will all take place in the 2008 campaign. Cafe coffee Day will be

leaning towards a pull strategy; a pull strategy involves marketing to the ultimate purchaser or

directly to consumers to build demand, forcing the outlets to stock the product .The company’s


website will be utilized as a distribution channel to retain customers, and market to other

consumers while allowing them to have purchasing power right from their personal computer. The

website will have packaged whole bean and ground coffee, along with merchandise. The main

roasting facility will be in charge of the distribution and orders from the Café Coffee Day website.

The stores of course will be full serviced, where anyone can get a Cafe coffee Day at a great price!

A future distribution channel that we will like to implement will be Cafe coffee Day vending

machines.

� Advertising Message & Media Plan

After close observation of the specialty coffee industry, and Friele as market leader in particular,

we recommend for Café Coffee Day to refrain from incorporating traditional advertising in its

overall marketing plan. Similar to its largest competitor, Cafe coffee Day’ main focus is the

company’s personal relationship with its customers, and the most effective way to establish or

strengthen that relationship is the customers’ experience in the stores rather than mass media

advertising. As pointed out by Saunders (Manners, 2005), senior vice president of marketing at

Friele, the corporation relies on its over 12,000 stores as the primary outlet to communicate with its

customers. The coffee giant applies traditional mass advertising very sparingly to promote its

ready-to-drink beverages that are distributed via its retail partnership with Kraft Foods.Due to the

increasing clutter in traditional advertising, customers have become increasingly critical and numb

towards traditional advertising messages which diminishes their effectiveness and therefore does

not justify the comparably high costs. In addition to the limited return that we expect from a

traditional mass advertising campaign. This strategy will also compromise Cafe coffee Day image

as your neighbourhood coffee shop. Essentially, this is the message Café Coffee Day wants to

convey to its customers and poses a current strength that the company should build upon. Although

the company operates a relatively large number of stores, the coffee shops maintain some

individuality and reflect the neighbourhoods they are located in Furthermore, Café Coffee Day is

very community involved, and its customers cherish and value that. Especially the Bergen division

of the company has been very successful with its very low-key marketing approach in the past and

benefited primarily from satisfied returning customers as well as word-of-mouth advertising which

constitute the best and most effective advertising any organization can wish for. We therefore

recommend that Café Coffee Day continues to embark on its rather experience-based and product-

related advertising strategy and take full advantage of its stores to execute this strategy. In support

of this measure, Café Coffee Day should advertise its stores in the geographically relevant Yellow

Pages, print as well as online, and the City Search website.

� Publicity Plan

The re-branding of the stores will result in a unified brand name, trademark, and product portfolio,

thereby constituting the most important and cost-intensive marketing measure for Café Coffee Day


at this point. The successful implementation of this measure will be accompanied by a news release

that the company will make available in its stores, publish on its website, and distribute to local

newspapers in its operating markets for publishing. An example of the news release can be found

in Appendix B3. This will keep customers informed about the current changes and ease the

transition especially in the Bergen and Oslo markets. In addition, Café Coffee Day will sponsor

philanthropic events in the Stavanger, Bergen, and Oslo areas to promote its corporate social

responsibility. As outlined in the budget section, the company will allocate 0.25% of its annual

sales for this purpose. Corporate headquarters of Café Coffee Day will have to determine what

particular events the company is going to support; however, in order to be consistent with the

overall company image, the sponsorships should involve causes that directly benefit the respective

city (Stavanger, Bergen, Oslo).

� Interactive Communications Plan

While the company’s website makes up the major component of the interactive communications

plan, Café Coffee Day will at least partially supplement these measures with instore

communication tools in order to serve customers who lack computer access. The plan’s purpose is

to engage customers in the brand and have them voluntarily seek or provide information about the

company or its products. Clearly, the interactive communications plan should tie in with the

company’s overall marketing strategy. The following paragraphs outline a few examples of how

Café Coffee Day can implement such a plan.

The corporate philanthropic sponsorships provide a great opportunity for the company to interact

with its customers. The organization’s website should allow customers to submit a proposal for the

sponsorship of a cause that they consider worth supporting. Corresponding proposal forms should

be available in the stores which customers can hand to the store manager for forwarding to the

corporate headquarters. The top management of Café Coffee Day will then assess the input and

decide on the money’s allocation. Besides, customers should be able to suggest a neighbourhood

event to be included in the bi-monthly newsletter. It will be at the discretion of the store manager,

based on previously established corporate guidelines, to decide whether to mention the particular

event in the newsletter. Furthermore, customers should be encouraged to come forward with ideas

about in-store events that Café Coffee Day can facilitate. If the implementation costs are

reasonable and there is a definite interest in the community, the store manager should confer with

corporate headquarters to carry through with the plan. For either purpose, the website should be

equipped with an appropriate form and stores should have little proposal cards available.

The customer loyalty card will also allow for interactive communication between Cafe

coffees its customers. Not only does it provide the company with valuable information

about its customers’ demographics but also about their purchase patterns with regard to


location, time of day, frequency, and product. In the future, this will permit Café Coffee

Day to initiate individually targeted relationship marketing efforts. Besides, the customers

will be able to charge their card in order to conveniently pay for their in-store or online

purchases. The management of the card accounts will be possible through the company’s

website which will simultaneously increase the traffic on the site and hopefully encourage

packaged coffee and merchandise purchases.

Café Coffee Day can implement another interactive communications plan that will not only tie in

with the company’s product development but also couple the customers’ in-store experience with

Cafe coffee Day’ website. Café Coffee Day can introduce newly developed coffee blends in its

stores via “Coffee Sampling Weeks” and have customers vote for their favourite blend on the

company’s website. The one blend that obtains the most votes will eventually be featured on the

stores’ regular menu and be sold as packaged coffee for at-home consumption.

� Other Tools

In lieu of a traditional advertising campaign, Café Coffee Day will foster its neighbourhood image

and its community involvement by facilitating in-store events on a very regular basis. Thereby, we

will like to allow the store managers a certain degree of liberty as to what events they will like to

implement based on the individual store’s clientele and premises. Some potential events include,

but are not limited to, game board nights, knitting afternoons, speed dating evenings, scrapbook

sessions, book lectures, or coffee education sittings. These events will be publicized via a bi-

monthly store newsletter, which will not only feature the calendar of events in the store, but might

also include important events in the stores’ respective neighbourhoods such as a library book sale,

garage sales, or even Election Day. In addition, the newsletter can feature a product of the month

section, general coffee or corporate news, and coffee or sweet treat recipes. While corporate

headquarters will be responsible for developing and designing the general content of the

newsletter, the individual stores can then insert their respectively featured events in the document

before they are made available in the stores and emailed to the company’s loyalty card holders.


� Budget

Norway Culture will capitalize on the strong demand for high-quality gourmet coffee. The owners have provided the company with sufficient start-up capital. With successful management aimed at establishing and growing a loyal customer base, the company will see its net worth doubling in two years. Norway Culture will maintain a healthy 65% gross margin, which combined with reasonable operating expenses.

Annual projected sales of $584,000 in 2011, which is in line with the industry averages for this size of coffee bar Overall, as the company gets established in the local market, its net profitability increases from 17.06% in FY2011 to 17.63% in FY2014 The table below outlines the projected Profit and Loss Statement for FY2012

The table below outlines the personnel needs of coffee bar

Personnel Plan

Year 1 Year 2 Year 3

Manager $35,000 $37,800 $40,824

Baristas $50,000 $54,000 $58,320

Employees $39,600 $52,000 $56,000

Total People 30 35 40

Total Payroll $124,600 $143,800 $155,144

General Assumptions

Year 1 Year 2 Year 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 25.42% 25.00% 25.42%


Profit and loss Account

2012 2013 2014

Sales $584,000 $642,400 $706,640

Direct Cost of Sales $2,04,000 $224,840 $247,324

Other $0 $0 $0

Total Cost of Sales $204,400 $224,840 $247,324

Gross Margin $379,600 $417,560 $459,316

Gross Margin % 65.00% 65.00% 65.00%

Expenses

Salary- payroll $124,600 $143,800 $155,144

Sales and Marketing expenses $25,800 $27,600 $31,000

Depreciation $5,400 $5,500 $5,500

Rent $48,400 $52,800 $52,800 License &consulting fee. site search, Lease negotiation $6,000 $6,000 $6,000

Maintenance $5,840 $6,424 $7,066 Real Estate & Leasehold Improvements, Design & Development $9,000 $9,500 $10,000

Freight –export expenses $18,690 $21,570 $23,272

Total Operating Expenses $243,730 $273,194 $290,782

Profit Before Interest and Taxes $135,870 $144,366 $168,534

EBITDA $141,270 $149,866 $174,034

Interest Expense $2,821 $2,326 $1,618

Taxes Incurred $33,740 $35,510 $42,424

Net Profit $99,308 $106,530 $124,491

Net Profit/Sales 17.00% 16.58% 17.62%


Balance Sheet

2012 2013 2014

Assets

Current Assets

Cash $195,358 $296,358 $417,648

Inventory $21,175 $23,293 $25,622

Other Current Assets $0 $0 $0

Total Current Assets $216,533 $319,651 $443,270

Long-term Assets

Long-term Assets $59,170 $61,170 $63,170

Accumulated Depreciation $5,400 $10,900 $16,400

Total Long-term Assets $53,770 $50,270 $46,770

Total Assets $270,303 $369,921 $490,040

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $31,974 $31,947 $34,836

Current Borrowing $6,700 $3,400 $100

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $38,674 $35,347 $34,936

Long-term Liabilities $20,000 $16,415 $12,454

Total Liabilities $58,674 $51,762 $47,390

Paid-in Capital $140,000 $140,000 $140,000

Retained Earnings ($27,680) $71,628 $178,159

Earnings $99,308 $106,530 $124,491

Total Capital $211,628 $318,159 $442,650

Total Liabilities and $270,303 $369,921 $490,040


Capital

Net Worth $211,628 $318,159 $442,650

Expense 2012 2013 2014

Direct Cost of Sales $2,04,000 $2,24,840 $2,47,324

Salary- payroll $1,24,600 $1,43,800 $1,55,144

Sales and Marketing expenses $25,800 $27,600 $31,000

Depreciation $5,400 $5,500 $5,500

Rent $48,400 $52,800 $52,800

License &consulting fee. site search, Lease negotiation $6,000 $6,000 $6,000

Maintenance $5,840 $6,424 $7,066 Real Estate & Leasehold Improvements, Design & Development $9,000 $9,500 $10,000

Freight –export expenses $18,690 $21,570 $23,272

Total Expence $4,47,730 $4,98,034 $5,38,106

Income

Sales $5,84,000 $6,42,400 $7,06,640


Break-even Point

Advertising

� Magazine:

Objective of give advertise in magazine is create awareness about coffee café. Café coffee day will

give advertisement in 5 magazine in Oslo, Bergen and Stavanger. We will give advertisement only

for 2 month. Name of the magazine is below

Name Circulation

1. Se og Hor 235,695

2. ) Hjemmet 2 206,543

3 Hor og Na 179,422

4. Familien 129,367

5. Norsk ukeblad 126,591

� Newspaper:

CCD will give advertisement in news paper when begging of the Café coffee shop.Name

of News paper is below


Name Circulation

1. Bergens Tidende 90087

2. Aftenposten 256639

3. dagbladet 186136

4. Adresseavisen 86570

5. Dagens Næringsliv 69262

� Banner

CCD will put 2 -2 banner of café coffee day for 1 month in Oslo, Bergen and Stavanger.

� Television

At initial level café coffee day will not focus on television advertises because television

advertises is very costly.

Above list of advertising tools will main focus of Café coffee day. Café coffee day will

also use Social networking sight like Face book, twitter, my space, blogging, press release,

Billboard and celebrity branding and Zero Budget marketing strategy will also try to

follow


Conclusion

As my report based on launching of Café coffee day in Norwegian market

from the whole study on the various parameters it is not easy to enter in new

market without any research and study of that market. So after study I came

to know that in Norway Café coffee day have good opportunities. Reason of

selecting this country is, Norway is big market of coffee, per capita

consumption of coffee is 10.7 kg so I decided to select this country


Bibliography

(n.d.). Retrieved from http://www.norway.org

(n.d.). Retrieved from

http://www.memagazine.org/backissues/membersonly/august97/features/feat_toc.html

(n.d.). Retrieved from https://www.wikinvest.com/

(n.d.). Retrieved from ttp://en.wikipedia.org/wiki/Norway

(n.d.). Retrieved from http://www.norway.org/

.essortmen. (n.d.). Retrieved from http://www.essortment.com/sample-coffee-shop-business-

plan-25801.html

.infoplease. (n.d.). Retrieved from http://www.infoplease.com/country/profiles/

best-coffee-in-oslo-norway. (n.d.). Retrieved from http://www.dearcoffeeiloveyou.com/best-

coffee-in-oslo-norway/

bordbia. (n.d.). Retrieved from

http://www.bordbia.ie/eventsnews/ConferencePresentations/FoodDrinksIndustryDa

Cafecoffeeday. (n.d.). Retrieved from http://www.cafecoffeeday.com/

casestudyinc. (n.d.). Retrieved from http://www.casestudyinc.com/coffee-day-brand-strategy-

india

CIA. (n.d.). Retrieved from https://www.cia.gov/index.html

coffee_bar_marketing_plan. (n.d.). Retrieved from

http://www.mplans.com/coffee_bar_marketing_plan/executive_summary_fc.php

Coffeefranchise. (n.d.). Retrieved from http://www.franchisedirect.com/coffeefranchises/74

coffee-in-norway. (n.d.). Retrieved from http://blog.enkerli.com/2006/11/02/coffee-in-norway/

curbing-commercialization-public-space/. (n.d.). Retrieved from

http://www.newrules.org/information/rules/curbing-commercialization-public-space/ban-

advertising-children-norway

everyculture. (n.d.). Retrieved from http://www.everyculture.com/No-Sa/index.html

ezilon. (n.d.). Retrieved from http://www.ezilon.com/regional/norway/government/index.shtml

foo_cof_con-food-coffee-consumption. (n.d.). Retrieved from

http://www.nationmaster.com/graph/foo_cof_con-food-coffee-consumption

iipmthinktank. (n.d.). Retrieved from

http://www.iipmthinktank.com/functions/marketing/compartive.pdf


indexmundi.com/norway/. (n.d.). Retrieved from http://www.indexmundi.com/norway/

Marketing_Research_Feasibility_Of_Opening_A_Cafe_Coffee_Day_. (n.d.). Retrieved from

http://iimk.academia.edu/AkshayJadhao/Papers/405582/Marketing_Research_Feasibility_Of_Op

ening_A_Cafe_Coffee_Day_Ccd_In_Calicut_Kerala_India_

marketing-mix-cafe-coffee-day. (n.d.). Retrieved from http://www.marketing91.com/marketing-

mix-cafe-coffee-day/

marketing-mix-cafe-coffee-day. (n.d.). Retrieved from

http://www.managementparadise.com/forums/marketing-management/209003-marketing-mix-

cafe-coffee-day.html

Norway. (n.d.). Retrieved from http://www.norway.org

Norway. (n.d.). Retrieved from yCountryOverviews/Norway%20Market%20Overview.pdf

norwayindustries. (n.d.). Retrieved from http://www.norwayindustries.com/

regjeringen. (n.d.). Retrieved from http://www.regjeringen.no/en.html?id=4

regjeringen. (n.d.). Retrieved from http://www.regjeringen.no/en.html

resources/country-profiles. (n.d.). Retrieved from

http://www.kwintessential.co.uk/resources/country-profiles.html

SSB. (n.d.). Retrieved from http://www.ssb.no

state.gov. (n.d.). Retrieved from http://www.state.gov/r/pa/ei/bgn/3421.htm#profile

teaandcoffeemag. (n.d.). Retrieved from http://teaandcoffeemag.com/0603/coffee.htm

The_Norwegian_Parliament&action. (n.d.). Retrieved from

http://en.wikisource.org/w/index.php?title=Author:The_Norwegian_Parliament&action=edit&re

dlink=1

worldmapper_1038_coffee_consumption_. (n.d.). Retrieved from

http://www.worldmapper.org/posters/worldmapper_1038_coffee_consumption_ver2.pdf

new international marketing project of cafe coffee day launch in norway market

Business

caf coffee day launch

xcellon instituteschool

fledged project

declarationthis project

project report hasbeen

business ahmedabadstudy

caf format

country analysis history