Cookieman entered India in year 2000 and set up shop in Chennai at the Spencer’s Plaza Shopping Mall. The company wanted to learn its lessons early through the conservative Chennai consumer. Relying only on direct marketing initiatives and not investing in mass media promotions, Cookieman positioned itself in Chennai with several USPs like freshly baked cookies, unique auto bake oven and an owner-operated fanchisee model that would ensure consistency in quality control.
Why Shopping Malls? John Lynch, Director, Cookieman, said, “We are looking to set up our mother shops (owner-operated franchisees), in high-traffic zones. Shopping Malls would command footfalls to the tune of 10,000 over the weekdays and 20,000-25,000 over the weekends and moreover an enclosed space like a shopping mall would set off the aroma of the freshly baked cookies as well.”
So does this provide a platform for impulse purchase? “Yes, it’s a strong factor but not all of the purchase is impulse based though it accounts for 50 per cent, the rest is planned purchase of which 30 per cent of our sales happen through corporate gifting and supplying to the bakeries of five star hotel chains.”
Remarking on the progress of Cookieman, Lynch said, “We started out in 2000 and we now have shops in Chennai and Bangalore, with the second shop in Bangalore opened recently in the Forum Shopping Mall in Koramangala. So far we have consolidated our position, got through the learning curve and we expect our progress to be much quicker now with the explosion of Shopping Malls in the country coinciding well with our expansion plans. We hope to open up 50 stores in India in the next five years. By the end of September 2004, we hope to have our mother shops in Delhi and Hyderabad. We have plans to expand to 50 shops in India in the next five years.”
What is the difference between the Australian and Indian markets? “Though there are more similarities than differences, one thing that stands out is the difference in the number of shopping malls, which are the spaces we target to reach our end consumer. That scenario, of course, is now changing. One more aspect is that all our Australian shops are stand-alone, owner-operated franchisee outlets. In India, owing to the initial lack of shopping malls, we came up with an alternative strategy and have set up satellite shops and sales points. In this three-tier model, the mother shops bakes the cookies for both the satellite shops and sales points, which are located in shopping zones.”
Speaking about marketing initiatives, Lynch said, “There will be no mass media promotions. We rely on our directing marketing initiatives and look at targeting specific segments with promotions and events. For instance, we have our yearly Christmas event with the Santa house and we did it last year at Spencer’s Plaza. The money used for the promotions is taken from a promotional pool, which is an exclusive money pool, and which has, during the initial phase, 5 per cent of the net sales revenue of a particular cookieman franchisee with equal contribution pooled from the Cookieman Company.”
Cookieman targets the premium segment and talking about the pricing strategy, Lynch remarked, “The pricing of the product goes with the branding of the product and its attributes like unique preparation, freshness and great taste.” The overall Cookieman franchiser group sales is to the tune of Rs 3 crore with the mother shop at Spencer’s contributing to Rs 1.3 crore of the overall sales.
Cookieman India is a joint venture subsidiary of the Australian Cookieman. Starting off with a regional presence, the company is now all set to go national with a 50-store expansion plan in India. The $50 million Australian company has also explored new markets like South Korea and China.