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Marketing Management

Cadbury India Ltd.

Nikhil Dadlani


Roll No 15

Table of Contents Contents: Introduction Company Overview Cadbury Worldwide Historical Overview History of Chocolates History of Cadbury Inc Manufacturing process Market Share Marketing Strategy Current Strategy Page No 3 3 5 6 6 9 13 15 23 23

Future Strategy
4 Ps Of Marketing SWOT Analyses Conclusion Certificate

28 35 38 39


Company Overview
Cadbury India is a fully owned subsidy of Kraft Foods Inc. The combination of Kraft Foods and Cadbury creates a global powerhouse in snacks, confectionery and quick meals.

With annual revenues of approximately $50 billion, the combined company is the world's second largest food company, making delicious products for billions of consumers in more than 160 countries. They employ approximately 140,000 people and have operations in more than 70 countries.

In India, Cadbury began its operations in 1948 by importing chocolates. After 60 years of existence, it today has five company-owned manufacturing facilities at Thane, Induri (Pune) and Malanpur 3

(Gwalior), Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkota and Chennai). The corporate office is in Mumbai. Their core purpose "make today delicious" captures the spirit of what they are trying to achieve as a business. They make delicious foods you can feel good about. Whether watching your weight or preparing to celebrate, grabbing a quick bite or sitting down to family night, they pour our hearts into creating foods that are wholesome and delicious. Currently, Cadbury India operates in four categories viz. Chocolate Confectionery, Milk Food Drinks, Candy and Gum category. In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over the years. Some of the key brands in India are Cadbury Dairy Milk, 5 Star, Perk, clairs and Celebrations. Cadbury enjoys a value market share of over 70% - the highest Cadbury brand share in the world! Our billion-dollar brand Cadbury Dairy Milk is considered the "gold standard" for chocolates in India. The pure taste of CDM defines the chocolate taste for the Indian consumer. In the Milk Food drinks segment our main product is Bournvita - the leading Malted Food Drink (MFD) in the country. Similarly in the medicated candy category Halls is the undisputed leader. They recently entered the gums category with the launch of our worldwide dominant bubble gum brand Bubbaloo. Bubbaloo is sold in 25 countries worldwide. Since 1965 Cadbury has also pioneered the development of cocoa cultivation in India. For over two decades, they have worked with the Kerala Agriculture University to undertake cocoa research and released clones, hybrids that improve the cocoa yield. Our Cocoa team visits farmers and advise them on the cultivation aspects from planting to harvesting. They also conduct farmers meetings & seminars to educate them on Cocoa cultivation aspects. Their efforts have increased cocoa productivity and touched the lives of thousands of farmers. Hardly surprising then that the Cocoa tree is called the Cadbury tree! Today, as a combined company with an unmatched portfolio in confectionery, snacking and quick

meals, They are poised in our leap towards quantum growth. They are the world's No.1 Confectionery Company. And they will continue to make today delicious!

Cadbury Worldwide
Cadbury India is a fully owned subsidy of Kraft Foods Inc. The combination of Kraft Foods and Cadbury creates a global powerhouse in snacks, confectionery and quick meals. We are currently the world's No.1 confectionery and biscuit company. We are also the worlds second-largest food company with sales in approximately 160 countries. We employ approximately 140,000 people. With an incredible brand portfolio, we contrive to make a delicious difference, today and everyday. Heritage: We have come a long way since J.L Kraft started selling cheese from a horse drawn wagon in 1903. Hard work, imagination and commitment to bring the world its favorite foods has helped us grow into a company that touches more than a billion people in 160 countries. Everyday. One at a time. Some fast facts on the combined company: Our Global Reach

than 50% of global revenue from snacks and confectionery Our Brand Portfolio

Historical Overview

The origins of chocolate can be traced back to the ancient Maya and Aztec civilisations in Central America, who first enjoyed 'chocolatl'; a much-prized spicy drink made from roasted cocoa beans.

Throughout its history, whether as cocoa or drinking chocolate beverage or confectionery treat, chocolate has been a much sought after food.

Because cocoa beans were valuable, they were given as gifts on occasions such as a child coming of age and at religious ceremonies. Merchants often traded cocoa beans for other commodities such as cloth, jade and ceremonial feathers.


(in the form of a luxury drink) was consumed in large quantities

by the Aztecs: the drink was described as 'finely ground, soft, foamy, reddish, bitter with chilli water, aromatic flowers, vanilla and wild bee


The dry climate meant the Aztecs were unable to grow cocoa trees, and had to obtain supplies of cocoa beans from 'tribute' or trade.

The Spanish invaded Mexico in the 16th century, by this time the Aztecs had created a powerful empire, and the Spanish armies conquered Mexico. Don Cortes was made Captain General and Governor of Mexico.

When he returned to Spain in 1528 he loaded his galleons with cocoa beans and equipment for making the chocolate drink. Soon 'chocolate' became a fashionable drink enjoyed by the rich in Spain..

An Italian traveller, Francesco Carletti , was the first to break the Spanish monopoly. He had visited Central America and seen how the Indians prepared the cocoa beans and how they made the drink, and by 1606 chocolate was well established in Italy.

The secret of chocolate was taken to France in 1615, when Anne, daughter of Philip II of Spain, married King Louis XIII of France.

The French court enthusiastically adopted this new exotic drink, which was considered to have medicinal benefits as well as being a nourishing food. Gradually the custom of drinking chocolate spread across Europe, reaching England in the 1650s.

Up until this point all chocolate recipes were based on plain chocolate .

It was an English doctor, Sir Hans Sloane, who after travelling in South America - focused on cocoa and food values, bringing a milk chocolate recipe back to England.

The original Cadbury Milk Chocolate was prepared to his recipe.


Cadbury has been synonymous with chocolate since 1824, when John Cadbury opened his first shop, establishing a flourishing dynasty that today provides the world with many of its favorite brands of chocolate.

Learn about the fascinating history of chocolate: How cacao is the Mayan word for God Food; when and how chocolate was first introduced to Europe; how xocolatl a bitter frothy drink, beloved by Montezuma- made the transaction into food centuries later, how its reputation for heightening pleasure made it the stuff of myth and legend.

Discover the history of Cadbury, from its social pioneering to the perfection of the recipe for Cadbury Dairy Milk; first launched in 1905, and still a market leader today. Find out all there is to know about making chocolate, and amaze yourself with the brand stories and brand timeline that show how many Cadbury brands have been favorites since the early 1900s

When chocolate finally reached England in the 1650s, the high import duties on cocoa beans meant it was a drink only for the wealthy. Chocolate cost the equivalent of 50-75 pence a pound (approximately 400g), when pound sterling was worth considerably more than it is today. Gradually chocolate became more freely available. In 1657, London's first Chocolate House was opened by a Frenchman, who produced the first advertisement for the chocolate drink to be seen in London:

The history of Cadbury as manufacturers of chocolate products in Birmingham dates back to the early part of the 19th century, when John Cadbury opened a shop in the centre of the city, trading as a coffee and tea dealer. Soon a new sideline was introduced - cocoa and drinking chocolate, which he prepared himself using a mortar and pestle. His lifelong involvement with the Temperance Society led him to provide tea, coffee and cocoa as an alternative to alcohol, believed to be one of the causes of so much misery and deprivation amongst working people in Britain at that time.

Fashionable chocolate houses were soon opened where the people could meet friends and enjoy various rich chocolate drinks, many of which were rather bitter to taste, while discussing the serious political, social and business affairs of the day or gossiping

The Cadbury family were closely involved in the evolution of drinking chocolate. From his grocery shop in Birmingham, where he sold mainly tea and coffee, John Cadbury started preparing cocoa and drinking chocolate, using cocoa beans imported from South and Central America and the West Indies. He experimented with a mortar and pestle to produce a range of cocoa and drinking chocolates with added sugar.

By 1831 the cocoa and drinking chocolate side of the business had expanded, so he rented a small factory in Crooked Lane not far from his shop and became a 'manufacturer of drinking chocolate and cocoa'. This was the real foundation of the Cadbury manufacturing


business as it is today. The earliest preserved price list of 1842 shows that John Cadbury sold sixteen lines of drinking chocolate and cocoa in cake and powder forms. Customers would scrape a little off the block and mix it with hot milk or water. A solid chocolate for eating was introduced by John Cadbury in 1849, which by today's standards wouldn't be considered very palatable.

In 1866 George Cadbury (John 's son) brought to England a press developed in Holland by Van Houten. The press changed the face of cocoa and chocolate production, as it was designed to remove some of the cocoa butter, enabling a less rich and more palatable drink to be produced. There was no longer any need to add the various types of flour and Cadbury's new cocoa essence was advertised as 'Absolutely pure...therefore Best'.

Established by Richard and George Cadbury, two Victorian businessmen with great industrial and social vision, Bourneville Village is a story of industrial organization and community planning covering well over a century. It embraces the building of a factory in a pleasant 'green' environment (in stark contrast to the oppressive conditions of the Victorian industrial scene), the enhancement of employees' working conditions and overall quality of life and the creation of a village community with a balanced residential mix (both employees and non-employees).

George Cadbury was a housing reformer interested in improving the living conditions of working people in addition to advancing working practices. Having built some houses for key


workers when the Bourneville factory was built, in 1895 he bought 120 acres near the works and began to build houses in line with the ideals of the embryonic Garden City movement. Motivation for building the Bournville Village was two-fold. George Cadbury wanted to provide affordable housing in pleasant surroundings for wage earners. But as the Bournville factory grew, local land increased in value and was ready to fall into the hands of developers. The last thing the brothers wanted was that their 'factory in a garden' would be hemmed in by monotonous streets.

Dame Elizabeth Cadbury was involved in the planning of Bourneville with her husband, George. Her memoirs tell us how these plans became reality:

"When I first came to Birmingham and we were living at Wood Brooke, morning after morning I would walk across the fields and farmland between our home and the Works planning how a village could be developed, where the roads should run and the type of cottages and buildings.

Gradually this dream became reality, houses arose and many of the first tenants being men in Mr Cadbury's Adult School Class - which met every Sunday morning at 8.00am in Bristol Street - who had previously lived in the centre of the city and had never had a garden. Also workers in the factory became tenants.


They too enjoyed their homes in the healthy surroundings, cultivating their gardens, rewarded in many instances by splendid crops of apples from the belt of apple trees which each tenant found at the bottom of his garden."

The consequent availability of cocoa butter led to the development of the smooth creamy chocolate we know today.

Manufacturing process
Cadbury makes a variety of chocolates for different purposes but the two main types are Cadbury Dairy Milk, milk chocolate and Cadbury Bourneville plain chocolate.

The taste and texture of Cadbury chocolate are based on long traditions of expertise in recipe and processing unique to Cadbury. Techniques are improving all the time and new technology enables the whole process to be finely tuned to match evolving tastes and preferences.

Production starts at the Chirk cocoa factory, where the highest quality cocoa beans are processed to produce cocoa mass containing 55% cocoa butter plus extracted cocoa butter, the basis for all chocolate products.


When plain chocolate is made the 'mass' goes straight to the Bourneville factory in Birmingham while the 'mass' for milk chocolate production is taken to the Cadbury milk factory at Marl brook, Herefordshire, in the heart of English dairy country.

At the milk processing factory fresh liquid full cream milk is cooked with sugar and condensed to a thick liquid. Cocoa mass is added, making a rich creamy chocolate liquid, which is then evaporated to make milk chocolate crumb. As these ingredients are cooked together the very special rich creamy taste of Cadbury chocolate is produced. 95,000 tonnes of crumb a year are produced at Marl brook to be made into chocolate at the Cadbury chocolate factories at Bourneville, Birmingham and Somerdale, Bristol.

On arrival at the chocolate factory the crumb is pulverized by heavy rollers and mixed with additional cocoa butter and special chocolate flavorings. The amount of cocoa butter added depends on the consistency of the chocolate required: thick chocolate is needed for molded bars, while a thinner consistency is used for assortments and covered bars.

In the UK up to 5% vegetable fat is added to compensate for variations in cocoa butter, allowing the melting properties of the chocolate to be controlled to a precise standard, and preserving the full taste and texture of the chocolate. Cadbury use carefully selected vegetable oils similar in nature to cocoa butter: African Shea, Indian Sal and Malaysian Palm oils are all part of the recipe.


Both milk and plain chocolate, which has had sugar and cocoa butter added to the mass before pulverizing, undergo the same final special production stages, producing the famous smoothness, gloss and snap of Cadbury chocolate.

Market Share
Todays Indian chocolate market, an overview
Chocolate consumption in India is extremely low. Cadbury dominates the chocolate market with about 70% market share. Nestle has emerged as a significant competitor with about 20% market share. Key competition in the chocolate segment is from co-operative owned Amul and Campco, besides a host of unorganized sector players. There exists a large unorganized market in the confectionery segment too. Leading national players are Parry's, Ravalgaon, Candico and Nutrine. MNC's like Cadbury, Nestle, Perfetti, are recent entrants in the sugar confectionery market. Other competing brands such as GCMMF's Badam bar and Nestls Bar One have minor market shares.

Chocolate consumption in India is extremely low. Per capita consumption is around 160gms in the urban areas, compared to 8-10kg in the developed countries. In rural areas, it is even lower. Chocolates in India are consumed as indulgence and not as a snack food. Indian chocolate market grew at the rate of 10% pa in 70's and 80's, driven mainly by the children segment. In the late 80's, when the market started stagnating, Cadbury repositioned its Dairy Milk to any time product rather


than an occasional luxury. Its advertisement focused on adults rather than children. Cadbury's Five Star, the first count chocolate, was launched in 1968. Due to its resistance to temperature, the chocolate has become one of the most widely distributed chocolate in the country.

In the early 90's, high cocoa prices compelled manufacturers to raise product prices and reduce their advertisement budget affecting the volumes significantly. The launch of wafer chocolates Kit Kat and Perk spurred volume growth in the mid 90's. These chocolates positioned as snack food rather than on the indulgence platform compete with biscuits and wafers. A strong volume growth was witnessed in the early 90's when Cadbury repositioned chocolates from children to adult consumption. The mid 90's saw the entry of new players like Nestle, which created categories like wafer chocolate and spurred growth.

Chocolate Segmentation
Chocolate market can be segmented into moulded chocolates, count chocolates, panned chocolates, clairs and assorted chocolates.

Type of chocolates Moulded Count

% Share in chocolate market 37% 30%


Eclairs Panned Others

20% 10% 3%

Others Panned 3% 10%


Eclairs 20% Count 30%

Moulded 37%

Count Eclairs Panned Others

Moulded chocolates, like Dairy Milk, Truffle, Amul Milk Chocolate, Nestle Premium, Nestle Milky Bar, is the largest segment accounting for more than 1/3rd of the market.


Count lines (5 Star, Perk, Kit Kat, and Picnic) are the second largest segment accounting for 30% of the volumes. The Count Line segment has been growing at a faster pace during the last three years driven by growth in Perk and Kit Kat volumes. Panned products include Cadburys' Gems, Nutties, and Nestls Marbles. In panned segment, Cadbury dominates with over 95% market share.

clairs (droplets of hard caramels with soft chocolate fillings) are a low unit priced product. Cadbury clairs was launched in 1972. Parle Products launched Melody in 1991. Nestle is a recent entrant in the segment. Nutrine's clairs has done extremely well in the market.

Chocolates Market Share

Cadbury is the market leader in all categories with over 65% market share. Its main competitor is Nestle India. Nestle has identified chocolate and confectionery as one of the thrust areas for growth. It has launched some of its international brands like Quality Street, After Eight, and Lions in India. In 1998, Cadbury launched a new count bar Picnic. Nestle immediately followed it with the launch of Charge. Gujarat Co-operative Milk Marketing Federation (GCMMF), which is normally known as Amul and Central Arecanut and Cocoa Manufactures and Processors Co-operative (CAMPCO) are other two significant players. Both are local manufacturers.

Market Share


Moulded segment Cadbury Nestle GCMMF Others 70% 23% 5% 2%

Count segment Cadbury Nestle Campco Others 76% 20% 3% 1%

clairs Cadbury Nutrine Nestle Parry's Others 49% 37% 12% 1% 1%

Confectionery, processed food based on a sweetener, which may be sugar or honey, to which are added other ingredients such as flavorings and spices, nuts, fruits, fats and oils, gelatin, emulsifiers, colorings, eggs, milk products, and chocolate or cocoa. Confectionery, usually called candy in the United States, or sweets in Great Britain, can be divided into two kinds according to their preparation and based on the fact that sugar, when boiled, goes through different stages from soft to hard in the crystallization process. Typical of soft, or crystalline, candysmooth, creamy, and easily chewedare fondants (the basis of chocolate creams) and fudge; typical hard, noncrystalline candies are toffees and caramels. Other favorite confections include nougats, marshmallows, the various forms of chocolate (bars or molded pieces, sometimes filled), pastes and marzipan, cotton candy (spun sugar), popcorn, licorice, and chewing gum.

Records show that confectionery was used as an offering to the gods of ancient Egypt. Honey was used as the sweetener until the introduction of sugar in medieval Europe. Among the oldest types of candies are licorice and ginger from the Far East and marzipan from Europe. Candy-making did not begin on a large scale until the early 19th century, when with the development of special candymaking machinery it became a British specialty. In the U.S. the candy industry began to grow rapidly during the mid-19th century with the invention of improved machinery and a cheaper process for


powdering sugar. In 1911 the first candy bars were sold in baseball parks; by 1960 candy bars made up almost half of U.S. confectionery production. By the 1980s annual world production of confectionery totaled many millions of kilograms.

Confectionery Market Share

The confectionery market is highly fragmented with several players with strong regional presence. Leading national players are Nutrine, Parry's, Parle, Cadbury, Nestle, Ravalgon, Candico, Perfetti, Wrigleys and Joyco India. The entire market can be divided into 7 major categories, namely Hard Boiled Candies(HBC), Toffees, Eclairs, Chewing Gum, Bubble Gum, Mints and Lozenges. While HBCs form 51% of the entire market, 18% is formed by toffees and 18% by chewing gum & bubble gum collectively. Eclairs form just 5% of the entire market. Mints and Lozenges form 4% and 3% of the market respectively.

Nutrine with a strong base in southern India has emerged as the reigning number one player in the sugar confectionery market with 24% share. Over last one year or so it has launched various products in the sugar confectionery market. It is the market leader in hard-boiled confectionery as well as toffees. It has share of 37% in eclairs market and is reigning at second position behind Cadbury's. Nutrine gets around 50% of its turnover from southern India, 20% from Eastern region and rest equally from westerns and northern region. Its biggest brand is Mahalacto followed by Asay and Kokonaka respectively. Total tonnage sold by Nutrine in the confectionery market is around 36650 tonnes.

The second largest player, Parle has strong presence in orange candies (hard boiled) supported by its Melody toffees, Mango Bite and Kismi Toffee bar. Besides this the company also has brands like Rola Cola, Poppins, Peppermint etc. in its portfolio.It has market share of 16% in the total 20

confectionery market with a tonnage of 16800 tonnes. It is number two in both HBC and Toffee market with 30% and 21% market share respectively.

Parry's has emerged as the third largest player in the market with 13% market share and a tonnage of 14500 tonnes.The company has brands like LactoKing, Coconut Punch, Madras Cafe, Coffy Bite etc. in its portfolio. Though in the over all confectionery market it is at number three, it is at par with Parle in toffees market with 21% share.

Cadbury has been one of the leaders with Cadbury eclairs with chocolate inside. It was the most successful in 1972 when it was launched because of its initial introductory price of 25 paise and was instant hit. It continues to be one of the biggest brands. Cadbury made a foray into the sugar confectionery segment with Googly, a hardboiled sweet in late 1996.Googly the tangy, fizzy candy, Cadbury took the market by surprise and marked the entry of Trebor into the fast growing Indian market. The product is sold under license from Trebor Bassett, UK. Googly was extended nationally in early 1997. Cadbury has also launched Mocka, a coffee based sugar confectionery.

Market shares in sugar confectionery market


Market share (%)

Major brands Mahalacto, Kokonaka, HoneyFab, Aam Ras, Chuma- Chuma, Gulkand, Funda, Gum Yum, Ole,


24 Nutrine Eclairs,SuperStar, Caramella, Wild Coffy, Dishum, Aasay,Naturo, Fruit Bar Melody, Mango bite, Kismi, Poppins, Rola cola,


16 LuxDairy, Peppermint, Rosemint



Coffy Bite, Lacto king, Coconut punch, Caramilk,


Madras Cafe, Soft-Spot, Flavoured Candy, Mango, Sunshine, Shakti, Pineapple Googly, Mocka, English toffee, Frutus, Gollum, Cadbury's 11 Eclairs, Pops. Polo, Allen's Splash, Soothers, Toffo Butter, Nestle 8 Fruit Rings, Fox's Pan pasand, Mango mood, Coffee break, Hi-soft, Ravalgaon 7 Supreme, Cherries, Juicy

Company Dabur P&G Warner Lambert

Market Share 3% 2.5% 2.5%

Major brands Hajmola Vicks Halls, Chiclets, Clorets

Anti-cold/OTC brands such as Halls, Vicks, Clorets, etc are increasingly being sold on the fun positioning rather than for their medicinal properties, competing directly with other confectionery brands. Halls and Vicks are available in various flavours.


Others 21%

Nutrine 24%

Ravalgaon 7%
Nestle 8% Cadbury's 11% Parle's 16% Parry's 13%

Nutrine Nestle

Parle's Ravalgaon

Parry's Others


Cadburys Current Marketing Strategies

Cadbury India began its operations in 1948 by importing chocolates and then re-packing them before distribution in the Indian market. After 59 years of existence, it today has five company-owned manufacturing facilities at Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkata and Chennai). The corporate office is in Mumbai. Currently Cadbury India operates in three sectors viz. Chocolate Confectionery, Milk Food Drinks and in the Candy category.


Branding Strategy:
Cadburys strategy to attract consumers is unique in a sense. Instead of focusing on the product, it seeks to tap into emotions normally associated with chocolates. They have also adapted their strategies to the unique demands of the Indian retail sector. The strategy has clearly proved successful, as they have been able to build and maintain a leadership position in the market with many loyal customers.

Marketing Strategy:
In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over the years. Some of the key brands are Cadbury Dairy Milk, 5 Star, Perk, clairs and Celebrations. Cadbury enjoys a value market share of over 70% - the highest Cadbury brand share in the world. The flagship brand Cadbury Dairy Milk is considered the "gold standard" for chocolates in India. The Cadbury India Brand Strategy has received consistent support through simple but imaginative extensions to product categories and distribution. The diversified product categories enable them to reach out to different customer segments thus broadening their reach. While the usual brands in the lite category are stocked at most of the mom and pop stores, and groceries, the premium brands are sold at premium food stores and modern trade formats to achieve differential visibility.

Supplier Strategy:
Since 1965 Cadbury has also pioneered the development of cocoa cultivation in India. For over two decades, they have worked with the Kerala Agriculture University to undertake cocoa research and released clones, hybrids that improve the cocoa yield. Their Cocoa team visits farmers and advises 24

them on the cultivation aspects from planting to harvesting. They also conduct farmers meetings & seminars to educate them on Cocoa cultivation aspects. Their efforts have increased cocoa productivity and touched the lives of thousands of farmers.

Advertising Strategy:
Television, the print media and posters have been the main media of communication for Cadburys advertisements. However, with their understanding of the peculiarities of the Indian market, Cadbury has also explored many new ways of getting their message across to the consumers. Sheet Metal Dispensers: This purple salesperson for Cadburys is found in almost every shop stocking their chocolates. Since it is placed on the cash counter, its design offers visibility, ease of vending, and protection from the elements. It is also placed in the most appropriate position to cater to the impulse buyers. This first from Cadbury has become so popular that is now the standard design for all chocolate manufacturers. Visicoolers: Visibility for chocolates drops in the summer, as they disappear into the refrigerator. In high throughput outlets, the visicooler serves the need for cooling while still maintaining the visibility of the product. Jars: These are provided to small outlets, where they are prominently displayed. Vending machines: These high visibility machines are provided at busy locations. Presence in Amusement Parks: Cadburys also maintains a presence in many amusement parks across the country, strengthening the association of its chocolates with fun occasions.

Competitor strategy - Nestle

Nestl describes itself as a food, nutrition, health, and wellness company. Recently they created Nestl Nutrition, a global business organization designed to strengthen the focus on their core nutrition business. They believe strengthening their leadership in this market is the key element of their corporate strategy. This market is characterized as one in which the consumers primary


motivation for a purchase is the claims made by the product based on nutritional content. Cadburys biggest competitor, Nestle, often stresses the energy giving aspects of chocolate (for example, in advertising for Nestle Charge), or on other attributes of the chocolate - taste in the case of Nestle Crunch, as a light snack in the case of Nestle Bar One. Nestle specifically targets children in the advertising for Milkybar, its white chocolate, again emphasizing its energy giving properties. To counter Milkybar, Cadbury has the Dairy Treat - where it targets mothers by trying to convey the message that its product is full of the goodness of milk, and so equivalent to consuming milk itself. Bar One chocolate has been re-launched in new tastes, packaging and pack sizes. And another variant of KitKat - white chocolate - has just been rolled out. Cadburys Perk parallel in Nestle Munch Pop in the snacking arena has also taken well. In Nestle India per se, out of its various businesses, the revenues from chocolate segment are just 15% of its total revenues. The focus primarily has been in the growing Indian processed foods sector, though it comes second in the chocolate segment with a market share of 20%.


Future Strategies
Opening up of Caf Cadbury: In the UK, Cadbury Schweppes has opened up its first Caf Cadbury in Bath. There is a lively buzzing caf on the first floor, and a relaxed, indulgent lounge on the second floor. The ground floor features a retail shop with premium chocolates and merchandise. The concept is modern, contemporary and simple, the ambience warm and friendly. Cadbury should replicate the model in India soon.

Large foreign brands are entering the Indian market. The $5 billion global brand Hersheys has inked a joint venture with Godrej Beverages & Foods, to create a new company, Godrej Hershey Foods & Beverages (GHFB) . GHFB s mandate isn t too different from Cadbury s and Cadbury runs the risk of losing market share to such new players as well as to premium imported chocolates. The game plan is to leverage further the Cadbury label with aggressive advertising and promotions. Cadbury needs to succeed in growing the market. It has to stick to its low price points even as input costs keep increasing. Price hikes could erode volumes.

Cadbury wants to double its turnover by 2010, which calls for a growth rate of over 20 percent annually. It could get into new product categories like gums where the global portfolio is impressive.

Cadbury can introduce an Energy bar in the Indian market to target the health and sports conscious people. Cadbury Schweppes has already launched Boost Guarana, a new chocolate countline bar which the company claims is the first mainstream chocolate bar sold in UK with proven energy stimulation properties. There is scope for introducing the same in India. 27

Cadbury India wants to enhance its share of chocolate confectionery from 6% to 8% in impulse category. There is good scope to further widen its reach in the target urban population. Penetration in small towns needs to be increased. This can be addressed through new and unconventional channels with highly focused servicing areas.

Cadbury can take up E-commerce initiatives like direct websites (B2C) and push B2B through Distributors orking portal, Information Management and better W

Capital Management. This will unlock lot of cash which can be ploughed back to

grow the business.

4 PS Of Marketing
PRODUCT Satisfaction suffices. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. But the winner will surpass them by constantly exceeding her expectation, delivering to her door step additional benefits which she would never have imagined possible. Cadburys offer such product. The wide variety products offered by the company include: 25I. Chocolate & Confectionary 1) Dairy Milk 2) Fruit & Nut 3) 5 Star 4) Break 5) Perk 6) Gems 7) Eclairs 8) Nutties 9) Temptation 10) Milk Treat II. Beverages III. Food Drinks

1) Bournvita 2) Drinking chocolate


3) Cocoa 26

Make no mistake. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. The strategy used by Cadburys is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them. Cadburys has launched various products which cater to all customer segments. So every customer segment has different price expectation from the product. Therefore maximizing the returns involves identifying right price level for each segment, and then progressively moving through them. Dairy Milk Perk 5 Star Friut and Nut Gems Break Nutties Bournvita (500 gm) Drinking chocolate PLACE Physical Distribution Rs. 15 Rs. 10 Rs. 10 Rs. 22 Rs. 10 Rs. 5 Rs. 18 Rs. 104 Rs. 50 27 BRAND ISNT THE ONLY ANY MORE. Marketers and finance manager need a new term to evaluate their business: Distribution Equity. It takes much more time and effort to build, but once built, distribution equity is much together to erode. The fundamental axiom of Indian consumer market is this: You can set up a state-of the-art manufacturing facility, hire the hottest strategies on the block, swamp prime television with best Ads, but the end of it all, you would be know of selling your


products. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves. Buyers are paying for distribution equity not brand equity and market shares. Why does the company need distribution equity more anything in India? With technology and competitive pressure slash in it is becoming increasing difficult for marketers to retain a unique product differentiation for ling period. In a product and price parity situation, the brand that sells more is the one that reaches the highest number of customers. India 1 billion people, 155 million household has over 4 million retail outlets in 5351 urban markets and 552725 villages, spread cross 3.28 million sq. km. 28 television has already primed and population for consumption, and the marketer who can get to the to the consumer ahead of competition will give a hard to overtake lead. But getting their means managing wildly different terrains-climate, language, value system, life style, transport and communication network. And your brand equity isnt going to help when it comes to tackling these issues. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. Once the stock product reaches retailers, the prospective customers can have access to the product. Cadburys distributes the product in the manner stated above. Cadburys distribution network has expanded from 1990 distributors last year to 2100 distributors and 4,50,000 retailers. Beside use of TI tom improves logistics, Cadbury is also attempting to improve the distribution quality. To address the issue of product stability, it has installed visi colors at several outlets. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heal effects product quality and thereby off takes.


Looking at the low penetration of the chocolate, a distribution expansion would itself being incremental volume. The other reason is arch rival Nestle reaches more than a million retailers. 29 This increase in distribution is going to be accompanied by reduction in channel costs. Cadburys marketing costs, at 18% of total costs, is much higher than Nestls 12% or even pure sugar confectionery major Parrys 11%. The company is looking to reduce this parity level. At Cadbury, they believe that selling confectionery is it like selling soft drinks. 30 31 PROMOTION If an advertisement is to communicate effectively, the receiver must at least half want it to, and be prepared too take step toward the sender. Effective advertising is rarely hectoring or loudly explicit.... It often both attracts and generates arm feelings. More often than not, a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. To penetrate into the inner recesses of her memory, communication must first ensure exposure, grab her attention evoke her comprehension, grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. The strategic response address the emotional appeal of the band to the child within the adult. Naturally, that produced just the value vacuum that Cadbury was looking to fill. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by rediscoursing the careful, unself conscious, pleasure seeking child within himself a graft these feeling onto the Ad campaign like Khane Walon Ko Khane Ka Bahana Chahiye for CMD and Thodi Si Pet Pooja Kabhi Bhi Kahin Bhi for Perk have been sure shot winner with the


audience. Whirl with the new launched temptations with the slogan Too To Share the communication resolves around the reluctance of a person whos got their hand on a bar of temptation to let anyone else to have a bite. As well as outdoor and radio ads, 32 ad agency contract has created communication for cinemas and even ATM machines for the brand. All ICICI s ATM a message flashes on the screen as soon as customer insert his ATM card. It tells the customer that this would be good time to get out of her temptation since he/she is bound to be alone. Something familiar is planned for phone-book as well. In cinemas, Cadbury has a message onscreen just before the lights are dimmed to give them a chance to get their temptations. There will also be after dinner sampling in restaurants to begin with, 30 catteries in Mumbai have been selected. The next round of activity will include the wafer-chocolate Perk and the Picnic bar, which has faced problems with its taste, because of the peanut it contains. Milk treat has also been launched in a module bar form, just in time of Diwali gifting market. clairs has got potential for much wide distribution, in a small sweets that airlines, hostels, and up market retail outlet offer to guest and customers. Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as spend at this level in the current year also. Ad since any discussion today would be incomplete without mention e word, the management plans to tap this new channel of marketing. Beside three company website (i.e. www.cadburyindia .com,, that the company has launched, it had also entered into various marketing relationship with other portals, specially targeted during festivals and events such as Valentines day , etc.... 33


Its a combination of spiffing up its key brand, researching and improving the newer products that havent taken off, supported with high ad spends that Cadbury hopes will see it emerges stronger after the current slowdown, as well as expand the market. POSITIONING In the 1970s consumers were ready to pay more for more, and luxury goods flourished. In the 1980s, consumers began to demand more for same, and the discounting era grew strong. Todays consumer demanding more for less, and the winner will be that super value marketers.... Some of todays most successful companies recognize those customers are more educated and able to recognize true customer value... Positioning is simply concentrating on an idea or even a word defines that company in the mind of the consumer. It is more efficient to market one successful concept to one large group of people than 50 product or service ideas to 50 separate group... repositioning is a must when customer attitude have changed and product have strayed away from the consumers long standing perception of them... Cadburys is an anchor in sea of confectionary products. As a variety of competitive claims assails her senses, today customer uses complicated decision making process to assess the alternative before making a purchase. Since Cadburys is more clearly associated with a particular set of attributes in terms of benefits and prices, the quicker becomes her search process. Positioning of individual product: 1) CMD: is and always remain flagship brand. The punch by the company for advertising this product life. Real taste of Life, itself defines the positioning of the product. The chocolate is meant for all age groups. It symbolizes fun, enjoyment, good items. It has goodness of milk, taste and appetite appeal. 2) 5 star: although positioned internationally as an energy bar, 5 star was positioned on an emotional platform in India during the late 1980s. Symbolizing togetherness, 5 star was originally targeted at


teenagers. In June 1994, the company reworked the strategy for 5 star to make it a source of energy. In fact, before the launch of Perk, 5 stars energy bar positioning made it a snacking chocolate. 3)clairs: competing in the chewable toffees segment. clairs was re-launched during the midnineties with a new name, Dairy Milk clairs. 4) Gems: broadcasting Gems, though, didnt prove to be feasible proposition for Cadbury. Targeted at children under 12 years with Gems Bond advertising. Cadbury decided to too teenagers with the Smart V ery Smart campaign. But now, the company is retargeting

children with its animated commercial. Gems are the best brand to speak to children. Colorful chocolate buttons appeal most to children and that is why Cadbury is re-targeting children. 35 5) Crackle: it was the first Cadburys chocolate to have crunch in it. It was targeted as a funky chocolate to add spark to life. 6) Perk: in September, 1995, Cadbury preempted the launch of Nestls Kit-Kat by rushing a new

brand, Perk into the market. Positioned much further on the functional scale than 5 star, Perk was meant to be light snack-product for subduing the first pangs of hunger. 7) Bournvita: positioned as tasty health drink. While its competitors concentrated only on health aspect, Bournvita combined the nutritious value with taste.


Very strong Brand Equity in India. Due to its 55 years presence in india has deep penetration 2100

distributors , 4,50,000 retailers, 60 mid urban (22%) customers.

Three sectors Chocolates (70% share) , Food Drinks (14%

share; leader in brown segment share) , Confectionery (4% share)

Low cost of production due to economic of scale. That means

higher profits , better penetration in market.

Out of Cadbury Worldwide, Cadbury has its second best

manufacturing location in india.


Weaknesses Poor technologies in india as compared to current international


Limited Key Products. Only one central brand. (Cadbury Dairy

Milk,5 Star) .

The recent 20% reduction in the quantity leading to the

disappointment consumers.

Usage of palm oil as an ingredient in the manufacturing of the

new products which is unhealthy.

The relaunched Cadbury Silk is overpriced .



o New Markets : Significant opportunities exist to expand into

emerging market of India where population is growing.

o Consumer Wealth : Consumer Wealth is Increasing and

demand for confectionery is rising.

o Innovation is key driver. To respond to changes in consumer

tastes and preferences - healthier snacks with lower calories need to be developed. R&D and product launches have led to sugar-free & center filled chewing gum varieties and Cadbury premium indulgence treat. Low-fat, organic and natural confectionery demand appears strong.

o Increasing gift cultures , Substituting to Mithais with

higher calories/cholesterol.



o Social changes - Rising obesity and consumers obsession

with calories counting. Nutrition and healthier lifestyles affecting demand for core Cadbury products

o Competitive pressures from branded suppliers (national and

international) . Aggressive price and promotion activity by competitors. Price wars in developed markets.

o Globalization will bring in better brands for upper end of

the market.

o There is an increasingly demanding cost environment

particularly for energy , transport ,packaging and sugar.

Conclusion :
Cadburys strategy to attract consumers is somewhat unique in a sense, instead of focusing on a product , it seeks to tap on emotions normally associated with chocolates . They have also adapted their strategies to the unique demands of the indian retail sector . The strategies have clearly proved successful as they have been able to build and maintain a leadership position in market with many loyal customers.


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