Professional Documents
Culture Documents
On
ANALYSIS OF CADBURY CHOCOLATE IN THE
MARKET WITH ITS COMPETITORS
AT
SUBMITTED FOR THE AWARD OF
MASTER OF BUSINESS ADMINISTRATION
TABLE OF CONTENTS
INTRODUCTION
EXECUTIVE SUMMARY
OBJECTIVE OF RESEARCH
RESEARCH METHODOLOGY
CONCLUSION
RECOMMENDATIONS
BIBLIOGRAPHY
QUESTIONNAIRE
Is the outcome of my own work and same has not been submitted to any
university/ institutions for the award of any degree or any professional
diploma.
Date:
)
Sign of candidate
ACKNOWLEDGEMENT
Preface
The Cadburys Indias number one chocolate is able to share with their market
insights based upon unparallel breath of chocolate experience.
The merge in 1969 with Schweppes and the subsequent development of the business
have led to Cadbury Schweppes taking the led in both, the confectionery and soft
drink market Intec UK and becoming a major force in the international market.
Cadbury Schweppes today manufactures product in 60 countries and a trade in
staggering 120.
This project is a sincere effort to look for the market potential in chocolate and
confectionery industry. A descriptive research procedure had been applied to come to
the conclusions of the project. A detailed questionnaire had been prepared and the
responses of the concerned people had been collected for the analysis. The project
later concluded in recommending the market potential of the chocolate and
confectioneries.
EXECUTIVE SUMMARY
TITLE: ANALYSIS OF CADBURY CHOCOLATE IN
THE MARKET WITH ITS COMPETITORS.
Rationale of study:
The Cadburys Inc has taken the opportunity to offer us a broader
view of chocolate category. The Cadburys Indias no.1 Chocolate is
able to share with their market insights
being
Objective:
To analyze the marketing strategies of the company with
Importance:
1) This report is useful for the researchers who are willing to do research on the
Cadbury chocolate and its present competitors in the market.
2) This report shows the problems associated with the Cadbury industry in the
market as it helps in removing these problems.
3) This report can be useful as a secondary data for chocolate industry.
4) This report helps in knowing the current and future scenario of confectionary
industry.
5) This report helps in knowing market position of different confectionary
industry.
Research Methodology:
The research conducted by Exploratory Research this type of research is Qualitative
and Quantitative. Qualitative refers to the characters of the data or process by
which the data are gathered.
The research process consists of a series of closely related activities. Why a
research study has been undertaken. Why a research study has been undertaken,
how the research problem has been defined, in what way and why the hypothesis has
been formulated, what data has been collected and what particular method has
been adopted and a host of similar other question are usually answered when we talk
of research methodology concerning a research problem or study.
Sampling:
The data was to be collected only from the Consumers and Retailers. A questionnaire
was prepared and interviewing with Retailers and Consumers.
A decision has to be taken concerning a sample unit before selecting the number of
samples. It may be geographical as well as individual..
Size of Sample:
This refers the number of items (Outlets) to be selected from the finite universe to
constitute a sample size. The survey was conducted of 50 outlets.
Analysis:
The data was tabulated manually and was also analyzed manually excel was used to
make graphs and pie chart.
26% of people are interested in eating chocolate and 74% are not eating.
The Cadbury brand chocolate 75% of people prefer after that Nestle,
Amul and others are take place.
Most of the people buy chocolate from superstore and after that from
retail or movie mall.
54% people are not aware from this brand while 46% are aware.
Conclusion:
This company project has demonstrated CADBURYS MARKETING AND
COMPETITIVE STRATEGIES that has proved to be extensive through, and of
great benefit to the company in furthering its competitive advantage.
In this project it possible to see the success of Cadburys in its indorse its strong
potential to continue to do well.
Recommendations :
New channels such as gifting, child connectivity and value for money offering
to be the key growth drives.
Grow volume sales at least 20% p.a. over the next years.
INTRODUCTION
The Cadburys Inc has taken the opportunity to offer us a broader view of chocolate
category. The Cadburys Indias no.1 Chocolate is able to share with their market
insights based upon unparalleled breath of chocolate experience.
Cadbury has grown from strength to strength with new technologies being introduced
to make the Cadbury confectionary business, one of the most efficient in the world.
The merge in 1969 with Schweppes and the subsequent development of the business
have led to Cadbury Schweppes taking the led in both, the confectionary and soft
drink market Intec UK and becoming a major force in the international market.
Cadbury Schweppes today manufactures product in 60 countries and a trade in
staggering 120. The Cadbury story is a fascinating story of a family business that
grew in one of the biggest, most loved chocolate brand in the world. A story that you
will remember as the story of The taste of life.
This project is a sincere effort to look for the market potential in chocolate and
confectionery industry. A descriptive research procedure had been applied to come to
the conclusions of the project. A detailed questionnaire had been prepared and the
responses of the concerned people had been collected for the analysis. The project
later concluded in recommending the market potential of the chocolate and
confectioneries
joint consultation being just one of the introduced by the pioneering Cadbury
Brothers.
1899 In this year the business private limited company Cadbury Brothers Limited.
Progress since the start of the century through the inter war years onward ahs been
rapid. Chocolate has moved being a luxury item to well within the financial reach
of everyone.
1905 Cadbury has many famous brands with one of major success story being
Cadburys Dairy Milk chocolate launched in 1905, today Britains favorite moduled
chocolate bar.
Cadbury today is the market leader in the U.K chocolate confectionary market,
employing the most advanced processing technology and management information
and control techniques. The company is the confectionary division of Cadbury
Schweppes plc which is major force in the confectionary and soft drinks international
market.
World - wide Cadbury is one of the pre eminent names in confectionary with
impressive range of famous brands.
Quality has been the focus of the Cadbury business from the very beginning as
generations have worked to produce chocolate with that very special taste,
smoothness and snap, so characteristics of Cadburys chocolate.
Design Development
Milk chocolate for eating was first made by Cadbury in 1897 by adding milk powder
paste to the dark chocolate recipe of cocoa mass, cocoa butter and sugar. By todays
standards this chocolate was not particularly good as it was very coarse and dry and
was not sweet or milky enough for public tastes.
At that time there was a great deal of competition in the U.K from continental
manufactures, not only the French with their fancy chocolates but also from the
Swiss, who were renowned for their milk chocolate. Led by George Cadbury junior,
the Bourneville experts set out to meet the challenge. A considerable amount of time
and money was spent on research and new plant design to produce the new chocolate
in much large quantities.
A new recipe was formulated fresh milk and new production processes were
developed to produce milk chocolate not as merely as good as but better than the
imported milk chocolate.
Four years of hard work were invested in the project and in 1905 what was to be
Cadburys top selling brand was launched. Three names were considered Jersey
Highland Milk and Dairy Maid. Dairy Maid became Dairy Milk and Cadburys Dairy
Milk with its unique flavor and smooth creamy texture was ready to challenge the
Swiss domination of the milk chocolate market.
By 1913 it had become the companys best selling line and in the mid twenties
Cadburys Dairy Milk gained its status as the brand leader, a position that it has held
ever since. Today more than 250 million bars of Cadburys Dairy Milk are made
every year and sales reach over 100 million Pound in value.
While advertising and label design g-have changed with fashion and considerable
strides have been made in manufacturing technologies, the recipe for Cadburys Dairy
Milk its glass and a half of full cream milk in every half pound produced is still
basically the same as when it was launched.
Chocolate has been enjoyed by successive generation since the manufacturing process
was developed in the Victorian Times. Good chocolatiers is an art form depending on
recipe traditions, which have grown over the years. Chocolatiers have use their skills
to make balanced recipe in which all the ingredients combine to produced chocolate
with all the characteristics that enable full delicious taste to be enjoyed by the
consumers.
By todays standards the first chocolate for eating would have been considered quite
unpalatable. It was the introduction of the Van Houten cocoa press from Holland that
was the major break through in the chocolate production as it provided extra cocoa
butter needed to make a smooth glossy chocolate.
PRODUCT PROFILE
CHOCOLATE & CONFECTIONARY
Dairy Milk
Picnic
Perk
Gems
clairs
Nutties
Temptation
FOOD DRINKS
Ovaltine
Drinking chocolate
Bournvita
Horlicks
within
the
Cadburys
fold.
Right from the stand Cadbury Dairy Milk Chocolate success has been based on 4
factors: Quality
Value for money
Advertising
Amul Chocolates
AMUL CHOCOLATE is made from Sugar, Cocoa Butter, Milk Solids, Chocolate
mass
Composition:
Milk Fat 2%
Sugar 55%
Total Fat 32.33%
(Milk Fat + Cocoa Fat)
Cocoa Solids 7.5%
Milk Solids 20%
Product Specification:
Meets all requirements under the PFA for boiled sugar confectionary.
Gujarat Cooperative Milk Marketing Federation
GCMMF: An Overview
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food
products marketing organisation. It is a state level apex body of milk cooperatives in
Gujarat which aims to provide remunerative returns to the farmers and also serve the
interest of consumers by providing quality products which are good value for money.
Members:
2.36 million
11,333
Cattlefeed manufacturing
Capacity:
Sales Turnover
Rs (million)
US $ (in million)
1994-95
11140
355
1995-96
13790
400
1996-97
15540
450
1997-98
18840
455
1998-99
22192
493
1999-00
22185
493
2000-01
22588
500
2001-02
23365
500
2002-03
27457
575
2003-04
28941
616
Amul Brands
Quality is the essential ingredient in all of our brands and the reason why millions of
people choose Nestl products every day. Our consumers have come to trust in
Nestls commitment to excellence and turn to Nestl brands to maintain nutritional
balance in a fast paced world.
Baby Foods:
Nutrition that suits the needs of your baby.
Dairy Products:
From shelf-stable solutions to chilled dairy.
Breakfast Cereals:
Start your day out healthy with Nestl BreakfastCereals.
Ice Cream:
Discover the world of delicious Nestl Ice Cream.
Prepared Foods:
Preparing well-balanced meals is a snap with Nestl.
Beverages:
Drink to a healthy, active life with Nestl beverages.
Food Services:
Providing food and beverage professionals with a wide range of
solutions.
Bottled Water:
Capturing nature in its purest form.
Petcare:
Nutrition, health and wellness for your pet.
NESTLE INDIA
THE NESTLE India stock has been bubbling with activity in an otherwise listless
equity market.
Till date, the stock has surged 77 per cent from its low of Rs 304 in May 2000 and
now commands a valuation 39 times the expected earnings for 2000. This is steep by
FMCG standards.
The recent surge in the stock is partly driven by the announcement by the parent,
Nestle SA, that it would use the creeping acquisition route to mop up another five per
cent in Nestle India through open-market purchases. But improving the stock's
valuation can also be traced to good financial performance in a market starved of
healthy earnings numbers.
On a comeback trail
The resumption of its coffee exports to Russia and a favourable input price
environment pepped up Nestle India's net profit growth to 28 per cent in the first nine
months of 2000. Sales growth in this period was 10.4 per cent, with domestic sales
rising 9.8 per cent and export sales 13.8 per cent. In reality, the growth in sustainable
net profits was higher than reported as the company took an additional one-time
charge of Rs 14.70 crore in the first nine months of 2000 for provisions against
contingencies.
Unusually, low input prices may have contributed considerably to margin expansion.
Continuing surpluses in global production have pushed both coffee and cocoa prices
(the two key inputs for Nestle India, apart from milk) to historic lows in 2000. While
coffee prices are hovering close to their seven-year lows, cocoa prices recently
bounced off their lowest levels in three decades.
With global agencies forecasting high carry-in stocks for the next season, the soft
input price advantage could be with Nestle for the time being. Does this mean Nestle
India will sustain its healthy earnings performance over the next couple of years?
This will depend on its ability to revive sales growth in its domestic product
categories.
Greener pastures at home
Nestle's 10.4 per cent sales growth in the first nine months of 2000 is partly
magnified by the low base of comparison. The cessation of coffee exports to Russia
due to the economic crisis there, led to a 38 per cent drop in export sales (and a 5 per
cent drop in net sales) for Nestle India in 1999.
Instant coffee exports to Russia resumed this year, but the business remains poor
because realisations have fallen in line with green coffee prices. Since realisations in
the export market are unlikely to look up in the next year, Nestle will continue to look
to its domestic product portfolio to sustain earnings growth.
In recent times, as with other FMCG companies, Nestle India's topline growth in the
domestic market was unimpressive, at around 8 per cent in 1999 and 9.8 per cent in
the first nine months of 2000. In the domestic market, Nestle India has traditionally
derived its revenues from five product baskets -- coffee (Nescafe Select, Sunrise);
milk products (Milkmaid condensed milk and ready mixes, Coffeemate coffee
creamer, Everyday Dairy Whitener); weaning foods for infants (Cerelac, Nestum,
Lactogen); chocolates/confectionery and malted beverages (Milo, KitKat, Charge,
Munch, Polo); and food products (Maggi noodles, soups).
unorganised segment. However, both these segments are quite crowded with feature
listed and unlisted players which have considerable financial muscle.
In the liquid milk segment, Nestle will be up against the formidable Amul, apart from
a host of private dairies with established clientele.
In the bottled water market, the market leader, Bisleri (of Parle Products), has had to
contend with competition from scores of me-too brands, apart from Pepsi's Aquafina,
Coca-Cola's Kinley. Going forward, competition is only likely to increase, with
Britannia planning to launch more bottled water brands from its foreign collaborator
Danone's portfolio (Evian, one of the largest bottled water brands, is already on shop
shelves).
Striving for niches
Nestle India has already launched two bottled water brands in the domestic market -the internationally renowned Perrier, followed recently by its sparkling mineral water
brand, San Pellegrino (reputed to be sourced from the Swiss Alps).
However, both products are for upmarket consumers. The premium pricing suggests
that the products will remain niche products with relatively small target markets. Pure
Life, the mass market bottled water brand to be launched shortly, will determine the
success or failure of Nestle's bottled water foray.
Nestle India has also shied away from the mass market for liquid milk in plastic
pouches, and instead restricted itself to ultra heat treated (UHT) milk in Tetrapacks.
The product is priced at a substantial premium to the other local brands.
Investment outlook: Nestle's new product forays are into extremely competitive
markets and investments in the new businesses are likely to be high over the next few
years.
In this respect, the advantage of soft input prices, high cash flows available from the
stable businesses (such as weaning cereals and coffee) and the financial might of the
parent, Nestle SA, will stand Nestle India in good stead.
The royalty to the parent should ensure that Nestle India continues to enjoy
ungrudging access to the parent's product portfolio. In many respects, in India Nestle
is pitted against its key adversaries worldwide -- Groupe Danone and Unilever. In the
foods business at the global level, both companies are considerably smaller than
Nestle SA.
But marketing prowess, rather than size is likely to determine the success of Nestle
India's new product forays in the next couple of years. Since the high growth rates of
this are partly on account of the low base of last year, the growth rates are likely to
reach more moderate levels next year. The stock continues to be a good investment
option for investors with a three-year horizon. But since the recent uptrend is partly
on account of factors unrelated to the fundamentals, there could be some downside to
the stock in the near-term.
To study about the customer taste and preference in the confectionary item.
To find out the market share of the different competitors in the chocolate
industry.
And also to find out the satisfaction level of customer about their product.
RESEARCH METHODOLOGY
Achieving accuracy in any research requires in depth study regarding the subject. As
the prime objective of the project is to compare Cadbury with the existing
competitors in the market and the impact of Nestle on Cadbury, the research
methodology adopted is basically based on primary data via which the most recent
and accurate piece of first hand information could be collected. Secondary data has
been used to support primary data wherever needed.
Primary data was collected using the following techniques
Questionnaire Method
Direct Interview Method and
Observation Method
The main tool used was, the questionnaire method. Further direct interview method,
where a face to face formal interview was taken. Lastly observation method has been
continuous with the questionnaire method, as one continuously observes the
surrounding environment he works in.
ORGANIZATIONAL STRUCTURE
MANAGING
DIRE
CTOR
GENERAL
MAN
AGER
VICE PRESIDENT
MARKETING
MANUFACTU SALES
R
I
FINANCE
DISTRIBUTIO
N
Cadbury Schweppes
Cadbury Schweppes plc, a global beverage and confectionary giant with annual sale
of Rs 20,000 crores,is the worlds number one non cola soft drink company having
bottling and partnership operations in 14 countries and franchises of its brand in a
further 86 countries around the world. Its Hundred Percent subsidiary in India named
Cadbury Schweppes Beverage India (private) Limited (CSBIL) started operation in
March 1995. The first brand was launched was crush which was later followed by
Canada Dry, Schweppes Tonic Water, Schweppes Bitter Lemon.
CSBIL with its franchise agreement with 19 bottles throughout India proposes to be a
household name. It has a policy for FOBOs (Franchise owned bottling operations
unlike Coke and Pepsi which prefer COBO,s (Company owned bottling operations).
In FOBO the beverages company only supplies the concentrate and the marketing
support to build brand equity. The other aspects like machinery, bottling line, land
and distribution is the responsibility of the bottler. As its CEO Mr. Ashok Jain says,
we are the software, they are the hardware.
Impulse segment these products are often purchase on impulse, eating these
and then. They include product such as Cadburys Dairy Milk.
Take home segment this describes product that are normally purchased in
supermarkets, taken home consumed at a later stage.
The Diagnosis
Today, The Real Taste of Life campaign, which served
Up chocolate in general, and COM in particular, into the consciousness of adult, has
already become a classic of advertising and marketing. By 1993, Cadbury was
desperately seeking growth for the brand With a market share of 70%, trying to
win away customers from competitors in this stagnant market wouldnt help. They
had to find new customers, people whod never bought chocolate before. Or, they had
to increase consumption levels. The obvious solution, in a peculiar predicament.
Despite low penetration, both the brand and the category were displaying symptoms
of age: faltering growth, high recognition, and lack of excitement. The market
research revealed the cause of the graying: chocolate wasnt a snack in India. In
mature markets, chocolate straddle a continuum, from boutique product packaged
raw indulgence to a casual food. So, Cadbury whipped up a growth solution that
involved associating the brand with snacking and functionally, which inevitably go
together with high consumption rates in the Western markets.
The next step: identify the barriers preventing consumers from chocolate as a snack.
A battery of test, both quantitative and qualitative, comparing chocolate consumption
to a basket of competitive products revealed an unmistakable answer.
The Tests
Despite the Need To Clear The residual memory of CDMs former association,
caution prevented a big break with the past, forcing Cadbury to experiment with a
combination of continuity and change. The process entailed understanding the
foundation of the brand, since it was these that would support the new structure. Out
went the caring - and - sharing element, but the family context stayed. Cadbury had
two pillars, so it made sense to change one.
Chocolate should be eaten whenever you feel like. It was an impulse item, so why
shouldnt it be sold as one?. The first of the two commercial focused on
functionality, purging the emotional element.
Is the storyline, The father watches TV, engrossed, gnawing away at a bar of CDM.
The children enter, followed by the mother-but, by that time, the father has completed
the distinctly un paternal act of devouring the entire bar. The children are shocked,
where upon the produces another bar for them-only to eat that up too. Finally, the
mother brings another bar out of her bag. The last shot more CDM bars strew around
casually.
The second commercial conveyed the same message, depicting four member of a
family doing their own thing on a Sunday afternoon, each casually munching away
on chocolates. The less than subtle message: eating chocolates just an everyday
affair, without special occasion or relationship coming into play. Despite their
strategic intent, both ads failed on pre airing tests.
Why for stators, children were outraged at the idea of a parent consuming chocolate,
while adults were down right angry at the notion of the father depriving his children
of chocolate bar. Just as important, consumer rejected the idea that chocolate-eating
could be equated with mechanical activities like combing ones hair. After all,
chocolates were about feelings. There had to be magic, romance, love and emotion.
These elements had been ripped away from the advertising. It was sans emotion.
Even as the ad failed, however, they generated a valuable byproduct, in the form of a
new insight, into adult behavior. Using transactional analysis on response,
Cadburys found that adult as parents behave very differently from adults as adults.
People forbid their children from having chips, but gorge themselves. The
implication:The moment the adult was shown in the context of his role as a parent, all his
cognitive preconception about the product would come to the fore. Hed think about
the reasons why, and the block would automatically come up. Tap child-ego state
within the adult, stimulating desire, spontaneity, and the craving for instant
gratification.
The Prescription
The crucial question that Cadbury was confronted with: what strategy should it
deploy to rejuvenate COM in a way that would appeal to the child lurking within the
adult? To inject a modern flavor into COM, they chose to create a new brand identity,
borrowing a leaf from marketing guru David Aaker, who decrees that brand identity
should establish a relationship between the brand and the customer by generating
value proposition involving functional, emotional, or self-expressive benefits.
a definite yearning to be free child. Therein lay the opportunity for both unshackling
consumption and creating all-new association for CDM.
The Elixir
Having decided to barter the distinctly use selfish values of sharing and caring for the
suspiciously self-centered one of self-expression, Cadburys people insisted that the
rejuvenate be enriched with compensation and equally enduring positive values:
universal truths, enduring human values, and universal moment of joy. To translate
the brief into the commercial, they decide to simply portray occasion of childlike-but
not childish-behavior from adults, without explicitly identifying adults as the target
customer.
They left the connection to be made by the customer In the process they were able
to get viewer involvement and high levels of empathy. Nowhere did they actually say,
youre an adult, you can eat it. Because nobody wants to be told. Thus it was that,
the montage of the child in the man-the old man kicking the football; the pregnant
woman carving a chocolate; young girl breaking into a spirit; the young man tossing a
bar of chocolate at his sweet-heart departing in a bus-was created.
That the consumption had to be liked before it could penetrate the cultural resistance
to chocolate consumption by adults was obvious. Taking a contrition stance, Cadbury
decided to test the commercial being devised by O&Ms creative team not for the tire
battery of likeability, comprehension, credibility and behavior modification but
only for the first two. If asked upfront, the consumer was hardly likely to consider
the dramatically-different idea credible. Nor was there much chance of her
announcing an immediate change in behavior. But why likeability and
comprehension? Simple: the first was meant to be the vehicle on which the daring
idea-that adults should enjoy chocolate-would ride into the consumers psyche.
In other words, the commercial was meant to make him smile at first-and only then
realize the import once of the message, which is where the comprehension had to be
tested. What was clear in this case was that likeability would have to include
identification and feeling warmth.
And finally, with the launch of the new colloquial advertising campaign Khaannein
Wallon Khaannein Ka Bahana Chahiya featuring MTV VJ Cyrus Broacha, Cadbury
India aimed to substantially increase penetration level of the chocolate category in
the next few years.
The New campaign is worth noting as it clearly differ from the earlier one in terms of
rectifying the consumer perception about chocolate being an up market impulse
driven product. The attempt now is to change the image, to make chocolate eating a
regular habit.
The current estimated penetration level of the chocolate category is 19% in the urban
market. The objective behind tne new communication on Cadbury Dairy Milk is to
make the chocolate category more socially and culturally relevant and drive
penetration in the process.
The new campaign has been launched in tandem with the old ar@@ Winning Kuch
Khass Hai campaign and the media strategy is to let the two co exist towards a
common vision providing a Cadbury in every pocket.
From a treat for kids, chocolate are now being positioned near meal substitutes,
thanks to the initiative taken by the Cadbury India during early nineties. The market
itself has become more broad based, in the sense adults are an important target
segment now. The reposting of Cadburys Dairy Milk in 1994 as the real taste of life
(through the Slice of Life and Cricket commercial by Ogilvy and Mather) grew the
entire milk chocolate by 20%, and gave the Cadburys range 5 Star, Gems, clairs,
Fruit & Nut, Crackle, Nutties, Butterscotch & Tiffns a new lease of life. In other
words, it
facilitated the repositioning of Cadburys sub brands in the basket. Some o the
strategic clicked, while other did not quite take off.
The company is pushing the gifting segment, through occasion linked gifts.
Chocolates contribute to 64% of Cadburys turnover. Confectionary sales accounting
41.8% to Rs. 520 million. Reduced material and energy cost and tioter control over
working capital over working capital and capital expenditure enabled the company to
improve the profitability. Company added 8 million new consumers and saw its
outlets grow to 4.5 lakhs and consumer to 60 million.In the food segment, Britannia is
the leader brand with 21% among those who expressed an opinion saying that they
like advertising for the brand Cadbury was clearly No.2 with 18% to which CDM
throw in its weight with 13% and pork with 4%. For the Chowlate company, Khane
Walo Lo, Khane Ka Bhanna and the Karwa Cauth, Sports are clear winners.
Tied for the brand place are Amul, Parle and south based Arun Le Gram with 5%
each. Disappointment among bid brands Kissan and Maggi and Kwality Walls (1%)
each.
Contributing to turnover
1998
2003
Chocolate
59%
64%
Sugar Confecting
9%
12%
Food Drink
32%
24%
69.2%
Sugar Confectionary
4.0%
Food Drink
14.2%
SWOT ANALYSIS
Strength
1.Very strong brand equity in India.
1. Due to its 54 years presence in India has deep penetration 2100
distributors; 450,000 retailers, 60 mid urban (22%) customers.
2. Three sectors; Chocs (70% share), Confec (4%), food drinks (14% - leader
in brown segment).
3. Low cost of production due to economic of scale. That means higher
profits and / or more competitioners. Better market penetration.
4. Second best manufacturing location throughout Cadbury Schweppes.
Weakness
1. Poor technology in India compared to current international technologies
(Godiva, Mozart, Fazer, Dint, Naushans, etc...)
2. Ltd. Key products, only one central brand (CDM). Pralines range totally
wising in India.
3.Make in India tag once the economy opens up wore and imports rush in.
Opportunities
1. Tremendous scope for per capita consumption (160 gms of 8 10 kg)
2. Increasing per capita national income resulting in higher disposable
income.
3. Growing middle class and growing urban population.
4. Increasing gifts cultures.
5. Substitute to Mithais with higher calories/cholesterol.
Threats
a] Major :None. Due to low cost and highest brand equity, it is today in India.
b] Minor :Globalization will being in better brands for upper end of the market (Liest,
Monarch, Godiva, etc).
PEST ANALYSIS
Will lose market share with globalization (a la Maruti) but will remain brand leader.
S:
T:
envisaged.
5 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:
I. 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
PRICING
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
Rs. 15
Perk
Rs. 10
5 Star
Rs. 10
Rs. 22
Gems
Rs. 10
Break
Rs. 5
Nutties
Rs. 18
Rs. 104
Drinking chocolate
Rs. 50
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. 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.
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.
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 re-discoursing 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,
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 on-screen 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,
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
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.
5. chocolate buttons appeal most to children and that is why Cadbury is retargeting children.
6. Crackle: it was the first Cadburys chocolate to have crunch in it. It was
targeted as a funky chocolate to add spark to life.
7. 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.
Bournvita: positioned as tasty health drink. While its competitors concentrated only
on health aspect, Bournvita combined the nutritious value with taste.
IV. 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
V. Beverages
VI. Food Drinks
1) Bournvita
2)
Drinking
chocolate
3) Cocoa
The outlook
The Cadbury management has cut down on its growth target by setting a 10%
average volume target for next 3 years (as against previous growth) coupled with in
factionary price increases, this could translate into top line growth of 14 15%. This
target also appears difficult to achieve given the consumer slowdown and the fact that
the companys consumer slow down and the fact that company is dependent on a
single category chocolates to drive growth. Effect it expanding confection any
portfolio have also not yielded desired results. The management has declared its
intention to focus only in clairs (which forms a major position of its 4% share in the
confectionary segment) for the time being in this category.
In chocolates too ones remain on the 2-3 key brands as CDM, perk in E claims which
have supported growth in the past. While new launched such as milk @ and Perk
slims have been doing will, the management expects that dairy milk would continue
to be the central driving force in Cadburys growth and that all other brands would
remain peripheral to this central brand.
Positioning
Nestles brands
Positioning
Cadbury Dairy
Milk
Positioned as an
affordable
enriched milk
chocolate
Fruit n Nut
Position as
adults as an
impulse any
time purchase
self expression
values attached
Bar One
Positioned as
Trendy, Cool,
any time snack.
Perk
Positioned as
Snacking
consumption
Thodi si Pet
Pooja
KitKat
Positioned as a
snacking
consumption
Have a Break,
Have a Kit Kat
Creamy bar
Roast Almond
Crackle
Bournvita
5 Star /
Perk/Break
5 Star Energy
bar Reach for
the Stars.
26% of people are interested in eating chocolate and 74% are not eating.
The Cadbury brand chocolate 75% of people prefer after that Nestle,
Amul and others are take place.
Most of the people buy chocolate from superstore and after that from
retail or movie mall.
54% people are not aware from this brand while 46% are aware.
Yes
26%
No
74%
75
60
65
30
Cadbury's
Nestle
Amul
Others
Movie Halls
17%
Super stores
32%
Restaurants
10%
Retail stores
35%
No
54%
Yes
46%
80
70
80
60
35
24
40
40
20
0
Dairy Milk
5 Star
Perk
Temptation
Yes
91%
CONCLUSION
This company project has demonstrated CADBURY CHOCOLATE MARKETING
STRATEGY WITH ITS MAIN COMPETITORS that has proved to be extensive
through, and of great benefit to the company in furthering its competitive advantage.
It also helps the company for building its future planning and targeting the customers
for more satisfaction through its innovative product.
In this project it possible to see the success of Cadburys in its indorse its strong
potential to continue to do well and also gives the ways to maintain its market
potential.
RECOMMENDATIONS
New channels such as gifting, child connectivity and value for money offering
to be the key growth drives.
Grow volume sales at least 20% p.a. over the next years.
market share will move down from here marinating a 70% market share in a closed
environment may have been easy, but it certainly wont be easy in liberalized
environment of free imports. And whatever be the anomalies of taxation or low, the
consumer is surely going to have a wider choice. And it is going to be shared with
other brands too in future. There is additional challenge of Cadburys brand just
aiming market share when the consumer has a wide portfolio of brand to choose
from.
While there would be new chocolates launch towards the end of the year, the
company has ruled out a real big chocolates launch in the current year. And it is too
early yet to comment on the long term response to the new launch temptations. They
say chocolates are mostly am impulse purchase. Therefore consumer would prefer
smaller, low cost packs to bigger higher priced ones.
The growth trend of the brands therefore clearly indicates that the only brand that has
grown is the one that gas received tremendous marketing and advertising support
Dairy Milk withdraw support for any brand and growth loses momentum. In such
scenario, for how long and how many brands can the company continuously support?
FUTURE STRATEGY
In the branded impulse market, the share of chocolate in 6.6% and Cadburys share in
the impulse segment is 4.8% factor like changing attitude, higher disposable income,
a large youth population, and low penetration of chocolate (22% of urban population)
point towards a big opportunity of increasing the share of chocolate in the branded
impulse among the costly alternative in the branded impulse market.
It appears that company is likely to play the value game to expand the market
encouraged by the recent success of its low priced value for many packs.
Various measures are undertaken in all areas of operation to create value for the
future.
New channel of marketing such as gifting and child connectivity and low end value
for money product for expanding the consumer base have been identified.
In terms of manufacturing management focus is on optimizing manufacturing
efficiencies and creating a world class manufacturing location for CDM and clairs.
The company is today the second best manufacturing location of Cadburys
Schweppes in the world.
Efficient sourcing of key raw material i.e. coca through forward purchase of imports,
higher local consumption by entering long term
contract with farmer and undertaking efforts in expanding local coca area developing.
The initiatives in the terms of development a long term domestic coca a sourcing base
would field maximum gains when commodity prices start moving up.
million new
consumer in the current year and how has consumer base of 60 million
although the growth in absolute numbers is lower than targeted, the company
has been able to increase the width of its consumer base through launch of
low
priced products.
The above are some steps being taken internally to improve future operation
and profitability. At the same time the management is also aware of external
changes taking place in the competitive environment and is taking steps to
remain competitive in the future environment of free imports, lower
barrier to trade and the advent of all global players in to the country. The
management is not unduly concerned about the huge deluge of imported
chocolate brands in the market place.
It is of the view that size of this imported premium market is look small to
threaten its own volumes or sales in fact, the company looks at the tree
important as an opportunity, where it could optimally use the global Cadbury
Schweppes portfolio. The company would be able to not only provide greater
variety, but it would also be more cost effective to test market new product as
well as improve speed of response to change in consumer preference through
imports. The only concerns that the company has in this regard is the current
high level of duties, which limit the opportunity to launch value for money
products.
BIBLIOGRAPHY
Company Literature
Business World
QUESTIONNAIRE
1. Do you eat chocolates?
Yes
No
2. Which brand of chocolates do you use?
Cadburys
Nestle
Amul
Others
3. Where do you buy chocolates from?
Super stores
Retail Stores
Restaurants
Movie Halls
Others
4. Are you aware of any campaign of the above brands?
Yes
No
5. Which cadburys product do you usually prefer or use?
Dairy Milk
5 Star
Fruit & Nut
Perk
Temptation
6. Do you think Cadburys chocolate is easily available in market ?
Yes
No
7. Describe Cadburys Chocolate in one word?
______________________________________________________
8. Your comments on Cadburys products?
______________________________________________________