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Introduction to Cadbury
Ever since the Cadbury factory was set up in India in 1947, the term Cadbury has
become synonymous with chocolates. Any brand of chocolate is called Cadbury; its
become a generic name in this industry. And why not? Considering the penchant we Indians
have for sweets, its not surprising that this sweet, smooth, milky and irresistibly delicious
brown bar is the best childhood gift any Indian child could get. Thank God for young John
Cadbury who ventured into the chocolate business over 150 years ago, way back in
England, in 1824.
John Cadbury believed that alcohol was one of the causes of poverty and
deprivation amongst the working class, and by providing tea, coffee, cocoa and chocolate
as an alternative; he felt that he was helping to relieve some of the misery.
By todays standards, the chocolate produced by Cadbury in the late 1800s was not
particularly palatable. Cocoa mass, cocoa butter, sugar and milk powder were mixed
together into a coarse, dry mass. Competition from France and Switzerland forced the
Cadbury experts to improve their recipe, leading to a new formula which incorporated fresh
milk and the development of a new Production process. Dairy milk (Then known as Dairy
Maid) was the result. Cadbury was ready to challenge the swiss domination of the milk
chocolate market.
Dairy milk gradually gained its status as the brand leader, and has held the number
one spot ever since. Long gone is the dry chocolate supplied by john Cadbury in his
Birmingham grocery store. Today more than 250 million bars of dairy milk are produced
and consumed every year.
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Years of chocolate making expertise and a carefully controlled process have given
the Cadbury brands the special taste and smoothness for which they are renowned
throughout the world. And for which we chocolate lovers are eternally grateful!
The origin of the group goes back over two centuries. Some of the most loved
international brands are from the stable of Cadbury Schweppes Cadbury Dairy Milk, Dr
Pepper, Flake, Trebor Basset, Snapple, Motts and with the acquisition of Adams, brands
like - Halls, Clorets, Trident, Dentyne and Bubbas bubble gum range will now be part of
the Groups portfolio. 55,000 people populate the humming offices of Cadbury Schweppes
across the globe.
Cadbury Schweppes is the No.1 confectionery and third largest soft drinks company
in the world. We manufacture, market and distribute branded chocolates, confectionery and
beverages that bring smiles to millions of consumers across 180 countries.
The Core purpose of Cadbury Schweppes is Working better together to create
brands people love.
We are respectful of the social and natural environment in which we operate;
supportive of our consumers, customers and colleagues; proud of our heritage, and
passionate about success.

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Cadbury India Ltd.

Cadbury India began its operations as a trading concern in 1947. The first taste of
chocolate was defined by Cadbury in the Indian sub continent. It has been more than 50
years of calling chocolates Cadbury in India. The company today employs nearly 2000
people across India.
With brands like Dairy Milk, Gems, 5 Star, Bournvita and Perk or newer products
like Celebrations, Bytes, Chocki, Delite and Temptations, there is a Cadbury to suit all
occasions and moods.
Cadburys India Ltd. tries to bring the sweetest of smiles to millions of consumers
through their dearly loved brands distributed through 5.5 lakhs outlets across the country.
Cadbury dominates the Indian chocolate market with a 65% market share. Besides, it has a
4% market share in the organized sugar confectionery market and a 15% market share in
milk/ malted foods segment.

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Cadbury is mainly into three segments

1. Chocolates - Cadbury India is the market leader in the chocolate confectionery market in
India with over 70 per cent market share. The leading brands in this category are Cadburys
Dairy Milk, Fruit & Nut, Crackle, Temptations, 5 Star, Perk & Celebrations Gift boxes. For
more than five decades now, Cadbury has enjoyed leadership position in the Indian
chocolate market to the extent that 'Cadbury has become a generic name for chocolate
products. Cadbury has leading brands in all the segments viz bars (Dairy Milk, Crackle,
Temptations), count lines (5 star, Milk Treat), panned confectionery (Gems) and wafer
chocolates (Perk), clairs (Cadburys' Eclairs), toffees (English Toffee).

2. Sugar Confectionery Cadbury Dairy Milk Eclairs is one of the leading brands in this
category. It is amongst the largest clair brands in the market in terms of value share.
Cadbury also owns Halls (which was acquired as a part of the global acquisition of the
Adams business from Pfizer in 2003). Halls is amongst the largest brands in its segment of
Minty / Breath freshness brands in India.

3. Food Drinks Cadburys Bournvita is a leading brand in the brown drinks segment of
milk / malted food products. Cadburys other products include Drinking Chocolate and
Cocoa powder. Overall share in the malted food drinks market is estimated to be around 19
per cent.

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The company has recently made a foray into snacking category with Cadbury Bytes, its
sweet snacking brand. The company has been performing well in India. The net sales of the
company have increased from around US$ 166.3 million in 2004 to US$ 193.6 million in
2007.

Changing product mix

Contribution

to

turnover Contribution

1994

2001

Chocolate

59%

65%

Sugar Confectionery

9%

10%

Food Drinks

32%

24%

Vision Statement

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to

turnover

Life full of Cadbury, Cadbury full of life.

Life Full Of Cadbury
Cadbury is present in most happy occasions in the life of consumer.
Cadbury brands excite consumer.
Cadbury is an expression of a consumer's life.
Cadbury Full of Life
Cadbury as a company is vibrant.
Cadbury is a fun and energizing workplace.
Cadbury is robust and alive.

Purpose and Values

Purpose: - Working together to create brands people love

Objective is to:
Grow shareholder valueover the long term

Strategy is to:
Create robust and sustainable regional positions in core categories of confectionery and
beverages through organic growth, acquisition and disposal.

Process:

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We will achieve this by Managing For Value

Managing for Value Process incorporates:

Setting stretched financial objectives.
Adopting Value Based Management for major strategic and operational decisions and
business systems.
Creating an outstanding leadership capability within management.
Sharpening company culture to reflect accountability, aggressiveness and adaptability.
Aligning our management rewards structure with the interests of our shareowners.

Brands Portfolio of Cadburys India Ltd

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Cadbury Dairy Milk-Roast Almond, Double Deck, Fruits&Nuts, Chunky, Perk, 5Star,
Gems, Bournvita, Celebration, Bytes, Chocki, Crackles, Halls, Delite- Delite Mango, Delite
Strawberry, Temptations, Eclairs and Heroes.

Sales and Marketing in Cadburys India Ltd

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Marketing strategy
Cadbury in every pocket Cadburys India Ltd. marketing strategy is aimed at
achieving this vision by growing the market, by appropriate pricing strategy that will create
a mass market and to have offerings in every category to widen the market. 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
principles 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 marketing and sales idea in Cadburys India Ltd. has been to make its brand
presence felt in the pockets of very individual and for every occasion this idea can clearly
seen in their latest Advertisement of Cadburys Dairy milk for every occasion.
Earlier the Cadbury brand were positioned only for kids but in the last few years the
positioning has been not age specific but as a chocolate for every occasion, which can be
understood in the slogan Khane walo ko Khane ka bahana chahiye one of their well
known ads.
The pricing strategy is such that they have introduced specific products to cater to
different markets like Rs 2 chocki at the lower segment to the Celebrations in the premium
segment.

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The success of Cadbury India had been, in large measure, due to:
i) Increasing the Depth of Consumption by increasing the relevance of chocolate in the
consumers life space, creating various new consumption occasion and providing the
consumer with a range of premium chocolate of international quality.
ii) Increasing the Width of Consumption by increasing consumer awareness and also by
providing product which offer a good eating experience at an affordable price.
Cadbury Temptation was a premium chocolate range launched last year in order to
provide the consumer with an international chocolate eating experience.
Cadbury Chocki was launched at Rs2/- to provide consumer with a chocolate taste
at an affordable price and had received tremendous success.
Product such as Cadbury 5 Star, Cadbury Gems and Cadbury Eclair were re
launched aimed at increasing the awareness and relevance of the brand. The Gifting
segment was tapped aggressively with special focus during Raksha Bandhan and Diwali.
Bournvita was re launched in South India. The initial response had been very
encouraging. Riding on the re launch activity in North and West India, the brand achieved
healthy growth for the year.
The common aim and objectives of the corporation such as Cadbury includes the
following:

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1 Survival- For any company, survival is the most important part. To maintain a stable
position in the market.

2 Profit maximization- 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 maximizes in order to restore its financial health.

3 Growth- which includes Cadbury selling new products or expanding overseas.

4 Diversification- which is the spreading of business risks by reducing dependence on one

product.

Their Marketplace
Cadbury operates in the global confectionery market. The market is large, growing
and has attractive dynamics. The global confectionery market is the worlds fourth largest
packaged food market. It represents 9% of that market, and has a value at retail of US$141
billion. Chocolate is the largest category, accounting for over half of the global
confectionery market by value. Gum is the fastest growing confectionery category.

Targets

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Life without targets for a marketing or sales manager is unimaginable so is the case
in Cadburys India ltd. The targets are set at the central office and than it percolates down to
the branch level to each and every sales officer. The targets are set for every Journey
cycle i.e. one journey cycle is equal to 28 days or 4 weeks because of this the sales officer
puts focused and continuous efforts towards completion of this 4 weekly targets and
is always focused behind completion of targets.

Promotions at Cadburys India Ltd.

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Promotions at Cadburys India ltd. are very infrequent excepting at the time of
launch of a product example during the launch of their product Delite which was launched
in two flavors- Mango & Strawberry.
During the initial two months of launch of Delite it was either given as free samples
or the Sales officers would keep stalls at prominent places and offer cups of Delite to
customers. These types of promotions are only during the launch stage of the product to
give customers a feel or taste of the product.
All the promotions are decided at the branch level within the budgets allotted to
them. One of the most common type of promotion carried at the Mumbai-west division is
the buying of the shelf space at the retail outlet. Here Cadburys buy the shelf space at a
retails outlet for a specific period and keep only Cadbury products during that allotted time.

ROLE OF ADVERTISING TO PROMOTE EXPORTS

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Advertising is any paid form of non-personal presentation and promotion of ideas, goods
and services by an identified sponsor. The advertising messages are communicated through
mass media such as newspapers, magazines, satellite TV channels, internet, direct mail, and
so on.
The role of advertising to promote exports can be briefly explained as follows:

1. Product Awareness: It makes the potential customers aware of the product. It

brings to the knowledge of the potential customers regarding the availability of new
and better goods and services. It is not enough to create awareness, but it is more
important to create top of mind (TOM) awareness, so that the customers whenever
think of buying a product, the brand name of exporter should be at the top of the
mind of the customers.

2. Persuasion: The overseas buyer needs not only information about the new goods
and services, but he needs to be persuaded to buy the exporter's products and
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services .This is because ; the buyer is confronted with many competitive messages
of competing brands. Therefore, the role of advertising is not only to inform but also
to persuade the prospect to buy goods and services offered by the exporter.

3. Reputation: Effective advertising can bring in good name to the exporters

brands and also to the firm. People from different countries become familiar with
the name and brands of the exporter through advertising.

4. Information to Intermediaries: Advertising is also undertaken to inform the

intermediaries regarding the product. The intermediaries need to be convinced to

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stock the products and push them in the market to the buyers. Necessary advertising
efforts can be directed at the channel intermediaries.

5. Developing Brand Image:

Proper advertising communication helps to

develop good brand image in the overseas market. Brand image refers to perception
of the brand in the mind of customers. As far as possible, the exporter must develop
a positive image of the brand through effective advertising, which would result in
higher sales.

6. Developing Brand Loyalty: Exporters need to advertise so that the loyal

customers do not switch over to competing brands. The exporter needs to remind
the customers about the availability of the brand. The advertiser has to inform the
consumers about the modifications if any, through advertising.

7. Education: Advertising brings to the knowledge of the present and potential

customers about the various features of the product, such as quality, uses,
advantages, price and such other aspects. This helps the buyers to make a proper
choice of the brands.

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8. Expansion of Markets: Effective advertising is required to stimulate more and

more demand from the buyers. The exporter can also enter into new market areas or
countries through effective advertising.

9. Overcoming Negative Attitudes: Foreign buyers do have a negative attitude

towards Indian goods. They are of the opinion that Indian goods are inferior in
quality or not up to the international standards. Therefore, effective advertising is
required to overcome such negative attitudes on the part of foreign buyers.

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Innovation at Cadburys India Ltd

Most of the companies in India supply goods to the target market in a normal truck
or simple vehicle but Cadburys India Ltd. is planning to come up with a Venturer
Simulator, the specialty of the brand will be that it will be painted throughout by the
different brands of Cadburys India ltd.. The simulator is much more than just a vehicle for
transporting brands but it will also be an extremely effective as a marketing tool which can
be themed to reflect a corporate style, branding or special concept.
With high profile graphics and theming, a simulator crates unique visibility,
awareness and media coverage for corporate identity or PR campaigns. Its potential has
already been recognized by many leading companies like Coca-cola, Pepsi, Disney World
and many more but Cadburys India Ltd. will be first in its category to do something like
this.

Competition
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Cadbury has been losing market share, but continues to dominate the chocolate
market with about 65% market share. Nestle has emerged as a significant competitor with
about 24% market share. Other national players in segment include co-operative owned
Amul and Campco, besides a host of unorganized sector players. The unorganized players
largely dominate the sugar confectionery segment. Leading national players in this category
include Nutrine, Parry's, Ravalgaon, Candico, Parles, Joyco India and Perfetti. The MNCs
such as Joyco and Perfetti have aggressively expanded their presence in the country in the
last few years.

Distribution Management

When we talk about distribution management, we talk about the flow of raw
material from the supplier to the manufacturer and than from the manufacturer to the
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distributor and than from the distributor to the retailer flowing to the final customer as
shown in the following diagram.

Cadbury in India

Cadbury India is a wholly owned subsidiary of Cadbury Schweppes which has

operated in the country for more than 55 years. It was originally incorporated as a wholly
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owned subsidiary of Cadbury Schweppes Overseas Ltd in 1948. The company today
employs nearly 2,000 people across India. Cadbury India is the No. 1 confectionery
company with a 70 per cent market share in India. It is a dominating player in the Indian
chocolate market with strong brands like Dairy Milk, Five Star, Perk, Gems, etc. Dairy milk
is the largest chocolate brand in India.

Company Overview

They are currently the worlds biggest confectionery company with a number one or
number two position in 20 of the 50 largest confectionery markets across the globe.

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They create chocolate, gum and candy brands people love - brands like Cadbury,
Trident and Halls.

Their heritage starts back in 1824 when John Cadbury opened a shop in
Birmingham selling cocoa and chocolate. Since then they have expanded their business
throughout the world by a programme of organic and acquisition led growth. On 7 May
2008, the separation of their confectionery and Americas Beverages businesses was
completed creating Cadbury place with a vision to be the world's BIGGEST and BEST
confectionery company.

A few facts and figures

* They make and sell three kinds of confectionery: chocolate, gum and candy
*They operate in over 60 countries
*John Cadbury opened for business in 1824 making them nearly 200years young
*They work with around 35,000 direct and indirect suppliers
* They employ around 50,000 people
*Every day millions of people around the world enjoy their brands

Worms found in chocolate packet

On October 2003, just a month before Diwali, the Food and Drug Administration
Commissioner received complaints about infestation in two bars of Cadbury Dairy Milk,
Cadbury Indias flagship brand with over 70% market share. He ordered an enquiry and
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went directly to the media with a statement. Over the following 3-week period, resultant
adverse media coverage touched close to 1000 clips in print and 120 on TV news channels.
In India, where Cadbury is synonymous with chocolate, the companys reputation and
credibility was under intense scrutiny. Sales volumes came down drastically in the first 10
weeks, which was the festival season; retailer stocking and display dropped, employee
morale especially that of the sales team was shaken. The challenge was to restore
confidence in the key stakeholders (consumers, trade and employees, particularly the
sales team) and build back credibility for the corporate brand through the same channels
(the media) that had questioned it.

In defense, Cadbury issued a statement that the infestation was not possible at the
manufacturing stage and poor storage at the retailers was the most likely cause of the
reported case of worms. But the FDA didnt buy that. FDA commissioner, Uttam
Khobragade told CNBC-TV18, It was presumed that worms got into it at the storage level,

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but then what about the packing packaging was not proper or airtight, either ways its a
manufacturing defect with unhygienic conditions or improper packaging.
That was followed by allegations and counter-allegations between Cadbury and
FDA. The heat of negative publicity melted Cadburys sales by 30 per cent, at a time when
it sees a festive spike of 15 per cent.
For the first time, Cadburys advertising went off air for a month and a half after
Diwali, following the controversy. Consumers seemed to ignore their chocolate cravings.

Remedy:
A focused and intense communications program was implemented over the next six months
to rebuild credibility and restore confidence among the key stakeholders. The results:

In media, the key message that infestation was a storage-linked problem, not
manufacturing related, found widespread acceptance. Across the board, media carried
Cadburys point-of-view on the issue.

Sales volumes climbed back to almost to pre-crisis levels eight weeks after the
launch of new packaging a concrete step taken by the company to minimize the
incidence of infestation. This reflected consumer confidence in the brand and the
company.

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There was significant upward movement in ratings amongst consumers on

parameters like companys image, responsiveness of company and behavioral
parameters like intention to buy Cadbury chocolates.

The last two helped to restore faith in the corporate brand among the trade and employees.

Marketing Challenges and Objectives

The incident came close on the heels of a cola controversy where a scientific
laboratory declared colas unsafe due to high levels of pesticide. The jury was still out on
that issue and so this incident acquired political overtones with parties decrying Cadbury as
an irresponsible MNC. Andrea Dawson- Shepherd, Global Corporate Communication
Counsel, Cadbury Schweppes called it the worst worm infestation-related crisis anywhere
in the world.

The immediate objective was to get the following key messages across:

Infestation could never occur at the manufacturing stage

The problem was storage linked; this without alienating trade channels

Cadbury Dairy Milk continued to be safe for consumption

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The challenge was to restore confidence in the key stakeholders (trade and employees,
particularly salespersons) and build back credibility for the corporate brand through the
same channels (the media) that questioned it.
Strategy:
It was decided from the start to address the issue head-on and take whatever steps were
necessary to restore confidence. Having historically maintained a low profile with the
media and let its brands and its performance speak for it, the company began to cultivate
relationships with the media and turn it into an ally and a credible, independent endorser to
rebuild stakeholder confidence.

Phase 1: Presenting Cadburys view (October-December 2003)

The day the crisis broke, the agency set up a media desk to ensure that no media query
went unanswered. From Day 1 every story carried Cadburys point of view.At the first

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media briefing organised by the agency, the Cadburys Managing Director addressed
consumer concerns with the following key messages:

Infestation is a storage linked problem.

It is safe to eat Cadbury chocolates.

Consumers must exercise the same care in purchasing a chocolate as they would
when buying any food item.

At a second media briefing about two weeks after the first incident was reported, Cadbury
announced significant steps to restore consumer confidence. Called Project Vishwas
(Trust), this entailed:

A retail monitoring and education program undertaken on a war footing to address

storage problems.

Significant packaging changes to reduce dependency on storage conditions as

much as possible to be launched within two months.
An Editorial Outreach program with 31 media editors across 5 most affected cities was

orchestrated by the agency to get senior Cadbury spokespeople to share their version of
events in one-on-one meetings. The trade, and consumers, were reached nationally through
a press ad Facts about Cadbury, released in 55 publications in 11 languages. It presented
facts about Cadbury manufacturing and storage and highlighted corrective steps being
taken by the company. This was a public statement of the corporate stand on the issue. The
trade was supported with posters and leaflets to help them share Cadbury point-of-view
with their customers. A response cell with a toll free number and an e-mail id were put in
place to give trade a means to directly contact the company with any issues they facedreinforcing the companys commitment to quality. From the beginning, a series of town hall
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meetings were held with senior managers addressing employees to ensure they were
updated on the proactive actions being taken by Cadbury to manage media, help trade and
ensure future occurrences of such incidents were kept to the minimum. Regular email
updates from the MD were also used to communicate the companys point of view and to
ensure consistency of messaging since employees are the companys ambassadors.

Phase 2: Packaging change (January- March 2004)

The new purity sealed packaging was launched in January 2004. By investing up
to Rs 15 crore (Rs 150 million) on imported machinery, Cadburys revamped the packaging
of Dairy Milk. The metallic poly-flow, was costlier by 10-15 per cent, but Cadbury didnt
hike the pack price. This entailed double wrapping for maximum protection to reducing the
possibility of infestation. This was a big step involving investment of millions of dollars
and getting on stream a production process in 8 weeks that would normally take about six
months. To communicate these significant changes the company was making, Cadbury
brought in a brand ambassador to reinforce the credibility that the company had
demonstrated through its actions. Amitabh Bachchan, a legendary Indian film star, was
chosen, as he embodied the values of Cadbury as a brand and connected with all of India
mothers, teenagers, children, media persons and trader partners.
A media conference was organized in Mumbai to launch the new packaging. And
this was followed with press conferences in cities worst affected by the crisis Pune and
Nagpur in Maharashtra and Cochin in Kerala. In these conferences, media persons were
encouraged to compare the old and new packs with an innovative comparison kit and
experience the significant changes in packaging first hand. An audio visual with a message

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from Amitabh Bachchan, was beamed to build credibility and excitement. Given that much
of the damage had come from television coverage, a video news release with packaging
shots and factory shots was given to television channels to control the visual messaging.
Simultaneously, senior Cadbury spokespersons had one-on-ones with the Editors of the
Outreach program initiated in November 2003.
Another audio visual with a message from the star was used in a series of sales
conferences to enthuse and reassure salespersons. And this helped to rebuild confidence in
the salespersons to go and sell the product more convincingly and confidently to the trade.
The announcement of the new pack was done through a testimonial advertisement on TV
called Sincerity. It consciously addressed the problem head-on, with the superstar talking
straight into camera about how before doing the ad he first convinced himself about the
quality of Cadbury chocolates by visiting the factory. Consumers respected the brand for
not skirting the issue but acknowledging it and giving a solution to the problem this was
Public Relations using a TV Commercial to get key messages across!

Results:

Media Coverage: The media relationship effort clearly helped in making media
accept that the infestation was genuinely caused by storage-linked problems. From the

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start, all media reports carried the Cadburys point-of-view. Bad news automatically
gets great coverage. However, the agency helped Cadbury get a total of 378 clips in
over 11 languages covering the new packaging, and its benefits, in January 2004. The
Business Today clip is a typical representation of the changed media perception and a
better understanding of the problem over a three month period.

Sales: Sales volumes, which declined drastically between week 1 and week 10 of
crisis, climbed back almost to the pre-incident levels by week. within 8 weeks of
introduction of new packaging and communication. This is a clear reflection of
restoration of consumer and hence trade confidence in the corporate brand.

Image: There was significant upward movement in ratings amongst consumers on

parameters like company image, responsiveness of company and behavioural
parameters like intention to buy Cadbury chocolates. While the new product
introduction and advertising had their role to play in the changing consumer
perceptions, the medias positive coverage and the trades positive pre-disposition
played a huge part in helping Cadbury regain its reputation in the market.

Role of Public relations

PR concerns the total communications of your total organization/group of
organizations. It is unlike advertising, where you are sharing skills of planning, creative and
media buying teams with an out-sourced agency. PR calls for a very intimate understanding

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of the total inner workings of your organisation at all levels workers to Board levels. It
requires the integration of knowledge and communications. It is not a part time job for a
Marketing Services Manager. If it is to work and serve the larger objective, the PR
department should be independent, servicing others like production, personnel, marketing,
finance, corporate agendas. Therefore, the PR Head should be part of the top management
team reporting directly to the CEO. He also needs to share everyones confidences.
The PR department of Cadburys played a very effective role in managing the
reputation and keeping up the goodwill of the company.

Factors for Success

1. Extensive distribution network

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Cadburys brands are available in over a million outlets across the country. The
distribution network directly covers almost the entire urban population. The
company has invested significantly in building such an extensive network. The
company uses Information Technology to improve its logistics and distribution
competitiveness. Cadbury has improved the distribution quality of its products with
the installation of refrigerators at several outlets. This helps in maintaining product
quality in summer, when sales usually dip due to the fact that the heat affects
product quality and thereby consumption.

2. Creation of strong brands

Cadbury owes its success to strong brand equity and resultant consumer preference
that it enjoys in India.
consistently

high

The company has built strong brand equity through

product

quality,

relevant,

insightful

and

entertaining

communication. Cadbury has developed new channels for marketing its brands such
as Gifting and Snacking. The company places great emphasis in ensuring display
dominance at the point of purchase

3. Customization of products for India

Cadbury India has spent time in understanding the Indian consumers. Leveraging its
55 years of experience in India, the company has customized its products to the

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Indian markets. It also offers products at affordable price points so as to increase its
market penetration.

4. Leveraging the India Advantages

Though, India contributes to less than 5 per cent of the global revenues today, India
is critical to the global strategy of the company

5. Managerial Talent
Cadbury has begun recruiting management graduates in India to serve its global
operations.

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6. Huge market potential

India offers huge market potential and is a priority market for Cadbury. The
company also leverages India as a manufacturing base for producing products for
the overseas market. Cadbury India has 4 company owned factories and as many
third party manufacturing contractors. It also has a wide Sales & Distribution
infrastructure consisting of 33 depots managed by 4 regional sales branches across
India.

Cadbury's won the battle of worms

Three years back, Cadbury's found itself in the eye of a storm, when a few instances
of worms in its Dairy Milk bars were reported in Maharashtra. In less than two weeks, the
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company launched a PR campaign for the trade. And three months later, came an ad
campaign featuring big B and a revamped poly-flow packaging.
Marketing and communications experts brought together by AICAR and the
Subhash Ghoshal Foundation say that Cadbury moved quickly to bear the cost of damage.
And thanks to its equity with the consumers, Cadbury's won back consumer
confidence, with hit on sales notwithstanding.
In October 2003, just a month before Diwali, customers in Mumbai complained
about finding worms in Cadbury Dairy Milk chocolates. Quick to respond, the Maharashtra
Food and Drug Administration seized the chocolate stocks manufactured at Cadbury's Pune
plant.
In defence, Cadbury issued a statement that the infestation was not possible at the
manufacturing stage and poor storage at the retailers was the most likely cause of the
reported case of worms.
But the FDA didn't buy that. FDA commissioner, Uttam Khobragade told CNBCTV18, "It was presumed that worms got into it at the storage level, but then what about the
packing - packaging was not proper or airtight, either ways it's a manufacturing defect with
unhygienic conditions or improper packaging."
That was followed by allegations and counter-allegations between Cadbury and
FDA. The heat of negative publicity melted Cadbury's sales by 30 per cent, at a time when
it sees a festive spike of 15 per cent.
For the first time, Cadbury's advertising went off air for a month and a half after
Diwali, following the controversy. Consumers seemed to ignore their chocolate cravings.
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As a brand under fire, in October itself, Cadbury's launched project 'Vishwas' - a

education initiative covering 190,000 retailers in key states. But what the company did in
January 2004 is what really helped de-worm the brand.
By investing up to Rs 15 crore (Rs 150 million) on imported machinery, Cadbury's
revamped the packaging of Dairy Milk. The metallic poly-flow, was costlier by 10-15 per
cent, but Cadbury didn't hike the pack price.
Bharat Puri, managing director, Cadbury's India says, "While we're talking about
a few bars of the 30 million we sell every month - we believe that to be a responsible
company, consumers need to have complete faith in products. So even if it calls for
substantial investment and change, one must not let the consumers confidence erode."
Simultaneously, Cadbury's roped in brand ambassador Amitabh Bachchan to do
some heavy duty endorsement putting his personal equity on the line for the brand.
The company upped ad spends for the Jan-March quarter by over 15 per cent. The
recovery began in May 2004, and by June, Cadbury's claimed that consumer confidence
was back.
These experts believe that the reason for Cadbury's success was that it took
crisis head-on. And the consumers were more forgiving, because the brand enjoyed an
emotional equity in India.
Santosh Desai, former president, McCann-Erickson says, "The nature of the
relationship that Cadbury's has built with the consumer is responsible for latitude the
consumers are giving it.

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"They are seeing it as a lapse, not a breach of trust - this difference is key. What
Cadbury's set out to deliver, it goofed up once but it seemed to be very sincere in its intent
to get things right."
Even so, other experts felt Cadbury's was itself to blame for the worm crisis.
Mahnaz Curmally, PR counsel, explains, "Cadbury's had known for a long time that
packaging needed change, so in a sense, they waited for something to happen before they
made that change and perhaps in hindsight, they could have made that change voluntarily."
Cadbury's could be case study of a sweet recovery from a crisis. It continues to lead
the Indian chocolate market with over 70 per cent marketshare. However, the experts feel
that today's constantly changing environment should keep the company on guard.

Cadbury India, the Indian arm of British confectionery giant Cadbury Schweppes, has seen
a surge in its chocolate sales. This, after the melt-down in sales in the wake of the worm
controversy last year.
Last October, when worms were found in bars of the flagship brand Cadbury Dairy Milk
(CDM) in certain shops in Kerala and Maharashtra, the company saw its value share melt
from 73 per cent in October 2003 to 69.4 per cent in January 2004. In May, however, it
inched up to 71 per cent.

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CDM sales volumes declined from 68 per cent in October to 64 per cent in January 2004. It
edged up to 65.9 per cent in May 2004. Says a Cadbury India executive: "The big factor
that has pushed up CDM sales is the Amitabh Bachchan campaign. It helped restore
consumers' faith in the quality of the product."
CDM contributes about 30 per cent to Cadbury India's turnover, which stood at Rs 729.81
crore in the year ended December 2003. The Rs 2,000-crore chocolate market witnessed a
growth of 4 per cent in 2003, according to AC Nielsen ORG Marg retail audit data.

Sanjay Purohit, executive director of Cadbury India, would not give the entire credit to the
brand mascot. He claims that it was the astute action taken by the company which helped.

Strategies To Overcome The Problem

Advertising:
The company began its multi-pronged campaign on key print, broadcast and
electronic media to regain its lost credibility and almost re-established the category.

Message Strategy:
It decided to convey that the root of the problem was as the distribution end, that
any food item could face similar infestation, and yet Cadbury would take initiatives
to check the problem.

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Public Relationship Campaign

The company launched project vishwas, a three pronged program that addressed the
trade consumers, media and employees. The project incorporated the following measures:

1. For Trade:

A retail monitoring and education program was launched that performed quality
checks at over 50,000 retail outlets and educated 1,90,000 wholesalers and retailers
regarding storage requirements.

A press ad regarding facts about Cadbury was also published nationally in 55 trade
publications informing channel memebers about remedial measures being taken by
the company.

Posters and leaflets on the issue were also distributed to retailers, encouraging them
to share them with customers.

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Cadbury also linked the trade with response cell through a toll free number and an
email id to let them contact the company directly.

2. For Media:

The media was also explained the companys point of view given updates about
actions initiated by the company and encouraged to share them with consumers.

The company instituted a media desk and diligently answered every media query
friendly or not. The companys managing director urged media to assure consumers
that Cadbury was safe to eat, but that consumers exercise the usual care in
purchasing a chocolate that they exercise in purchasing a food item.

Furthermore, it also promised to implement packaging changes within two months

to ensure against poor storage. Cadburys MD and key spokespersons had one to
one sessions with 31 media editors as part of an outreach program initiated in
November 2003.

3. For Employees:

Through were also briefed about actions taken through meetings with senior
managers and email updates from the MD.

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Conclusion
Through timely and consistent marketing communications Cadbury succeeded in
solving a daunting business crisis. With a 360 degree communication approach that targeted
various audiences Cadbury could quickly control and offset the negative word of mouth it
had received.
By integrating a variety of tools like press release and conferences, consumer, point
of purchase communication, packaging initiatives, email communication and the like, all
focussing on the same problem, Cadbury could communicate a unified message and get
audiences to appreciate the efforts it had taken to minimize instances of future occurrences.
The success of the Cadbury brand can be seen in how its image is continually
maintained over time. Identifying brand values, and matching these to consumer lifestyles
in specific market segments can help develop a clear advertising message. In previous
advertising messages quality and taste were emphasized. Cadbury is now building on this
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through its 'Choose Cadbury' strategy to underline the feeling a premium brand can bring to
its customers. The Cadbury brand has proven itself to be a leader in a highly volatile and
competitive market because it has successfully established, nurtured and developed its
umbrella brand and growing portfolio of products.

BIBLIOGRAPHY
BOOKS REFERRED

BOOK NAME
MARKETING MANAGEMENT BY PHILIP KOTLER

WEBSITES
www.cadburysindia.com
www.cadbury.com
www.cadburydairymilk.com
www.cadburyltd.com
www.wikipedia.com
www.google.co.in

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