ASSIGNMENT

Topic: Cadbury introduction of Oreo Cream biscuits as a

proactive/reactive diversification strategy from its
mainstream products.


Name: ATHIF ABDUL AZEEZ
MBA BU SEM IV (A)
Subject: Strategic Management
Roll No: 12YACMA038
Faculty Name: K.V.RADHAKRISHNA
Date of Submission: 05-05-2014


Introduction of Cadbury
Cadbury is a confectionery company owned by Kraft
Foods and is the industry's second-largest globally after Mars,
Incorporated. Headquartered in Uxbridge, London, United Kingdom,
the company operates in more than 50 countries worldwide.

The company was known as Cadbury
Schweppes plc from 19692008 until its demerger, in which its global
confectionery business was separated from its US beverage unit (now
called "Dr Pepper Snapple Group").It was also a constant constituent of
the FTSE 100 from the index's 1984 inception until its 2010 Kraft
Foods takeover.


Cadbury India began its operations in India in 1948 by importing
chocolates. It now has manufacturing facilities in Thane, Induri (Pune)
and Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh) and
sales offices Mumbai, Kolkata and Chennai. The corporate head office is
in Mumbai. Since 1965 Cadbury has also pioneered the development of
cocoa cultivation in India. For over two decades, Cadbury has worked
with the Kerala Agricultural University to undertake cocoa
research. Cadbury was incorporated in India on 19 July 1948.
Currently, Cadbury India operates in four categories: chocolate
confectionery, milk food drinks, candy and gum category. It 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). It products
include Cadbury Dairy Milk, 5-star, Perk, Gems, Eclairs, Bournvita,
Celebrations and Bilkul
It is the market leader in Chocolate Confectionery business with a
market share of over 70%.The Brand Trust Report, India Study, 2011
published by Trust Research Advisory ranked Cadbury in the top 100
most trusted brands list.

Cadburys - Marketing Strategies
In order to increase sales Cadburys needs to undertake a range of
marketing activities before deciding upon the best way to encourage
the purchase of its product. When identifying the basic principals
which Cadburys must apply to its marketing will be its basic
objectives because all business must have objectives it allows them to
increase sales and make profit.

Corporate aims are the long term intentions of a business, whereas
corporate objectives are the specific targets required to achieve the
aims.

The common aim and objectives of the corporation such as Cadbury
includes the following:

1 Survival

2 Profit maximisation- which is often taken to be the reason why firms
exists and to be the primary objectives in practices most firms have
a hierarchy of objectives when a firms survival is threaten it may
profit maximise in order to restore its financial health.

3 Growth - This includes Cadbury selling new product or expanding
overseas.

4 Diversification- which is the spreading of business risks

5 Sales maximisation- which is the increasing of sales

6 Improving the product image-which includes creating a new logo or
launching a new brand of product and creating more attractive
packaging.

Cadbury set out two objectives for the development of
their chocolate, Fuse. These were:
1. To grow the market for chocolate confectionery
2. To increase Cadbury's share of the snacking sector

When launching a product the company Cadburys had to
make sure that any new product in the snaking sector must establish
points of difference, creating a unique selling proposition (USP) i.e. a
product with unique appeal which is not shared by any of its
competitors. Referring back to the example of Fuse, Cadbury lost a lot
of money testing out the combination of various ingredients and more
than 250 were combined before the recipe of the chocolate was
finalised. As the products are developed, Cadbury tests them to ensure
that consumers are willing to buy them.

Cadbury then promotes its products in various ways such as the use of
above the line promotion, which is where a product is advertised
through consumer media such as television, magazines, newspapers and
radio.


Introduction to Cadbury OREO
Oreo is a trademark for a popular cookie sandwich by
the Nabisco Division of Kraft Foods. The current design consists of a
sweet, white filling commonly referred to as 'cream', sandwiched
between two circular chocolate or golden cookie pieces.
Over 491 billion Oreo cookies have been sold since they were first
introduced, making them the best-selling cookie of the 20th century. Its
most recent packaging slogan is "Milk's Favorite Cookie", which is a
slight change from the original, "America's Favorite Cookie" (though
some packages in the U.S. still use the original slogan).
The company was first founded on March 6, 1912 in Chelsea, New
York City. Oreo will be celebrating their 100th anniversary on March
6, 2012.

The Oreo cookie was developed and produced by Nabisco in 1912at
its Chelsea factory in New York City. It was commercialized in order to
target the British market, whose biscuits were seen by Nabisco to be
too 'ordinary'. Originally, Oreos were mound-shaped and available in
two flavors; lemon meringue and cream. In the United States, they were
sold for 25 cents a pound in novelty cans with clear glass tops. A newer
design for the cookie was introduced in 1916, and as the cream filling
was by far the more popular of the two available flavors, Nabisco
discontinued production of the lemon meringue filling during the
1920s. The modern-day Oreo design was developed in 1952, perhaps
by William A. Turnier, to include the Nabisco logo.
Oreo is very similar to the Hydrox cookie manufactured by Sunshine,
which was introduced in 1908, leading to speculation that Nabisco
obtained the idea from Sunshine. Having lost market share to Oreo for
years, Hydrox cookies were withdrawn in 1999
The product is distributed in the US
under the Nabisco brand name. In Canada, it is marketed under the
Christie brand name.

The Oreo was originally called the Oreo Biscuit. The name was later
changed to the Oreo Sandwich in 1921. In 1948, the name was changed
again to the Oreo Creme Sandwich. It was then changed to the Oreo
Chocolate Sandwich Cookie in 1974. There are many theories pointing
to the origin of the name 'Oreo', including derivations from the
French word 'Or', meaning gold (as early packaging was gold), or
the Greek word 'Oreo', meaning beautiful, nice or well done Other
theories are that there from cream was 'sandwiched' between the two
Os from cookie, or the word 'just seemed like a nice, melodic
combination of sounds'. A TV spot for the Got Milk? Campaign
showed a false etymology where, when at a board meeting to decide the
name of the cookie, one of the members is asked for his opinion; the
member, who just ate a cookie and does not have any milk to wash it
down responds "I don't know," which is heard by the board member as
"Oreo." "Oreo" is also similar to the Greek root for appetizing as in
orexin or orexigenic (appetite stimulating) or anorexic (loss of
appetite).

Kraft Foods
Kraft Foods Group Inc. is an American grocery manufacturing and
processing conglomerate headquartered in the Chicago suburb of
Northfield, Illinois.
For most of its 100-year existence, Oreo
was America's best loved cookie, but today it is a global brand. Faced
with stagnation in the domestic market, Kraft Foods moved it into
emerging markets where it made some mistakes, learnt from them and
ultimately triumphed. This case study looks at the strategies used to
win over customers in China and India.
On March 6, 2012, the famous cookie brand, Oreo, celebrated its 100th
birthday. From humble beginnings in a Nabisco bakery in New York
City, Oreo has grown to become the bestselling cookie brand of the
21st century generating $1.5 billion in global annual revenues.
Currently owned by Kraft Foods Inc, Oreo is one of the company's
dozen billion dollar brands. Until the mid-1990s, Oreo largely focused
on the US market - as reflected in one of its popular advertising slogans
from the 1980s, "America's Best Loved Cookie". But the dominant
position in the US limited growth opportunities and spurred Kraft to
turn to international markets. With China and India representing
possibly the jewels in the crown of international target markets due to
their sheer size, Oreo was launched in China in 1996.
The China launch was based on the implicit assumption that what made
it successful in its home market would be a winning formula in any
other market. However, after almost a decade in China, Oreo cookies
were not a hit as anticipated, according to Lorna Davis, in charge of the
global biscuit division at Kraft. And the team even considered pulling
Oreo out of the Chinese market altogether.








ANALYSIS
Analysis of about the Cadbury Oreo in the market and about their
proactive\reactive diversification strategy in the market.

Market Analysis
This market analysis is based on a project that is done in Saudi Arabia.
Target Market:
The current target market for the original vanilla filling Oreo is
children. The original Oreo cookies have previously focused on and
promoted the new colours for the crme filling and change the round
shaped cookies into rolls, which would generate new interest amongst
children, who would in turn convince their parents to buy the new
cookie.
Geographic Factor:
This project is done and carried on in Riyadh, the capital and largest
city of Saudi Arabia. Riyadh belongs to the historical regions of Nejd
and Al-Yamama .The population of the city is 4,700,000 of which 60%
are Saudis and 40 % are foreigners. And the density is 3,024 km square.
Demographic Factor:
As world is known for its restrictions and being an Islamic country, the
family lifecycles followed here are usually all family members. Young
single people cannot live separately and independently, fearing for
them young mature boys/girls will live under their families until its
time for them to start up their own families.
And generally Saudi people are well known by their family sizes. Most
of the family sizes are more then 6 or even far more than that. This is
what makes the youth population really high in the kingdom. And it is
something obvious and general that Saudi people are known for their
wealth and considered as rich people and in return earn high incomes.
Behavioural Factor:
As Riyadh is developing, people now are becoming aware of various
new brands which are attracting them to explore and investigate
things. Women here are obsessed about shopping and show a
favourable attitude and interest towards the different brands. They are
also considered as heavy users when it comes to brand loyalty.

Proactive Strategies
Mission Statement:
We want our consumers to regard us as their primary snack food. We
want our customers to know that we have their wants and needs in
mind along with working to create products that will cater to their
health conscious lifestyles.
Marketing Objectives:
Maintain demand of customers
Introduce new sandwiches
Create Awareness through effective media
Attract more customers
Retain current customers
Stay ahead of competitors
Reduction or elimination of other supply chain inefficiencies
To achieve superior consumer exposure
Establishment of regional marketing specialists
To reinforce and reaffirm the Oreo cookie brand position.
Tagline:
Twist, lick, dunk
Positioning:
The Oreo has long been the best-selling sandwich in the whole world.
Whenever the name of Oreo comes into the minds of consumers, the
1st thing that jogs their memory is twisting it, licking the middle
portion and dunking the chocolate sandwich into the milk. Beside kids,
it also emotionally attracts adults as their childhood memories are
connected to Oreo. Though couple of adults have a negative
positioning about the Oreo sandwich and the association but in the
point of view of kids, Oreo is strongly and highly positioned.
Current Strategies
Oreo, by observing its product lines and what it has been offering the
past years, we can realize that they are adopting the Product
Development Strategy. Product development means offering new or
improved products for present markets. In this manner Oreo can find
different ways to satisfy




Suggested Marketing Mix
Product:
Develop new sandwiches which contain less calories, less fat, less
cocoa powder and less salt.
Customers have been complaining about the packaging for the past
years. And in order to overcome this issue, the package should be given
a new look to attract more customers.
The labeling should be clear and nutritional information should be
specific and not hypothetical such as May contain milk protein!!!
Price:
Maintain their current prices.
Maintain a fixed price for all specific products overall the world
market.
Place:
Oreo should improve their market existence. Example: In Hail-Al-
Wazarat, the cold stores Bagalas dont have Oreo products.
Nabisco Arabia Inc. should improve their Import/Export channels.
They should also import the extra features of Oreo products ( Oreo
cereal, cakes, and ice creams ) into the kingdom.
Promotion:
Their promotions havent shown much about their organizations. TV
commercials were for a short time and ever since they havent shown
any other particular promotions.
They should get in contact with Advertising Agencies for better
improved commercials.
Their websites provide less information about the whole organization
( Internal/External).
Redesign the website ( http://www.nabiscoworld.com/oreo/) and
provide more corporate information.
Aim for different promotional Medias such as Bill boards, Flyers, etc.

Reactive Strategy
If their current marketing mix is resulting with unsatisfactory
outputs they should consider the suggested marketing mix.
A future forecast plan for the entrance of competitors into the
market, price inflation, and changes in the external marketing
environment.
Technology plays a vital role and directly affects businesses. To
increase sales and to provide quality products, Oreo may take the
advantage of the latest equipment available.
Oreo factory should have high density voltage stabilizer in case,
anything goes wrong with the electricity.
If current promotions through TV commercials are not giving
them much satisfying sales, they should go for flyers pamphlets
and maybe newspapers.

Decision To Launch Oreo Under The Cadbury Brand In
India
The food manufacture says that the decision to launch Oreo under the
Cadbury brand in India was made locally because the Cadbury brand
has stronger brand equity in the region that the Kraft brand, which is
not so well known.
A spokeswoman for Kraft did not rule out the possibility that Oreo or
other Kraft snack products could launch under the Cadbury brand
elsewhere but says there are no plans at present to replicate it in other
regions.
Kraft says the Cadbury brand will never be applied to Oreo in the UK
or regions where the Kraft brand is just as strong as Cadbury.

When the product launched earlier this year Kraft said it was
leveraging the combined strength of Kraft Foods global scale and
expertise and Cadburys strong track record in India.It also said that
the launch is part of Krafts long-term strategy to introduce its wider
food portfolio into India.
Kraft bought Cadbury in January 2010 as part of a 11.9bn deal
designed to exploit synergies between the two companies portfolios
and global strengths. In the first full quarter after the acquisition, Kraft
reported that Cadbury accounted for 90% of the gains made by the
company.
In April 2011, Oreo announced its special edition Oreo cookies with
blue cream in promotion of the 2011 3D computer animated film Rio.
The promotion included stickers inside each package of cookies. Two
types of contests were also announced: first, by completing an album of
stickers, consumers could win three movie passes and medium snack
bar combos; second, by finding winning stickers in packages with
prizes, including a trip to Rio de Janeiro, backpacks, cinema passes for a
year, and 3D glasses. The promotion ended May 30, 2011, and was
available in Ecuador, Peru, and Colombia
Oreo, the latest offering from Cadbury Indias stable after it was
acquired by Kraft Foods, has taken on the task of bringing parents and
children together in an increasingly busy and stressed life. Cadbury
India has launched Oreo-Time initiative, as a part of which a fully
branded 'Oreotogetherness' Bus will travel across nine cities including
New Delhi, Mumbai, Bangalore, Ahmedabad, Pune, Lucknow,
Hyderabad, Kolkata and Mysore. The campaign was launched in the
capital yesterday with Cadbury Indias Director Snacking & Strategy,
Chandramouli Venkatesan flagging off the bus.
Oreo is sold with the slogan, Milks favorite cookie while in the
past, it used to be Americas favorite cookie.
Indian cookie connoisseurs influenced by the American fancy have been
munching the imported version thus far, but will now get to dunk into
their milk or coffee the version supplied by Jalandhar-based Mrs
Bectors Food Specialities, who now makes them for Cadbury India,
which has launched the global brand here.
Market researcher Nielsen says Indias biscuit category is growing at
17% annually.
Kraft has competition waiting, thanks to rivals that thought ahead.
Britannia Industries has its Pure Magic and ITCs Sunfeast has a brand
extension called Dark Fantasy that pretty much sit in the category in
which Oreo is a household name in many countries.
A large packet of Oreos cost around R50 at imported rates but can now
be had in packets that cost R5, 10 or 20, Cadbury officials said. The
Indian supplier has played a major role in bringing down costs.
Oreo also marks a pioneering foray into the biscuit segment for
Cadbury India, so far known more for its milk chocolates and health
drinks such as Bournvita.
While Oreo is a Kraft product, it will be promoted as a Cadbury brand
in India.
In the case of Indian biscuit market, it can be easily said that the
deciding factors are the threat of intense segment rivalry due to the
existing competition between Britannia, Parle, ITC and other small
players like Dukes etc. the other or secondary factor in our case is the
buyers growing bargaining power, as the prices are competitive and
margins and the choice for consumers is high due to the intense
competition. In case of OREO, it is still facing huge problems with
respect to the market penetration due to the existing rivalry and the
other threat can be easily seen as the OREO biscuits changed its price
to those magical figures of Rs.5, 10, 20 for the Indian consumer and due
to competition and clearly defining the buyers power.

Oreo is focusing on the households, which are heavy consumers of
cream biscuits. In other words, the brands primary target audience are
the 10 million households that contribute 70 per cent of cream and
biscuit sales. While the rest 30 per cent is consumed by households
which are not a heavy consumer of cream biscuits. These households
are not in the focus lens of Oreo. Oreo cookies Twist, Lick and Dunk
ritual also seems in sync with the Indian habit of dunking biscuits in tea
and milk. Oreo is also relying on strong distribution push to make its
presence felt. The brand is focusing both on modern and retail trade.
Oreo is following more of a Frontal Attack by attacking its competitors
directly and trying to take its slice of market share. The other attack
being followed is Encirclement Attacks by actually filing a copyright
infringement against Britannia with respect to Treat-O







CONCUSION
To sum up, I understood that the proactive strategy was implemented
before the Oreo was introduced in the market and in India it was done
by Cadbury and other place it is done by the Kraft Foods. In new India,
the spread of the western culture in India is incomplete without the
flavors, spices, taste of these countries. We all have these food products
and will continue doing the same. We are also finding something new
about these food products all the time especially all the foodies. Oreo
sandwich has remained as an icon. Millions of people can recall
childhood memories with dunking Oreos in milk, and spark that
emotional experience to life by hearing the famous jingle or watching a
commercial. Oreo Sandwiches have touched peoples heart of different
ages, lifestyles, and characteristics in a way or another. Oreo was
capable to show its customers that it is one of a kind when it comes to
taste, flavour and experience. Though the food industry is an edgy
market, but yet no competitors were capable to pinch the undisclosed
ingredients of Oreo Sandwich Cookies.









Bibliography
http://www.marketingweek.co.uk/kraft-leverages-
cadbury-brand-for-oreos-in-india/3028136.article
http://www.investoo.co.uk/kraft-foods-experiences-40-
india-growth/
http://en.wikipedia.org/wiki/Cadbury
http://en.wikipedia.org/wiki/Kraft_Foods
http://www.scribd.com/doc/209912278/Oreo-Case-Study
http://www.oreo.com/wonderfilled/
http://www.scribd.com/doc/62003270/OREO
http://www.slideshare.net/AmitNayyar2/28443502-
marketresearchonoreo