Professional Documents
Culture Documents
R.ANAND
R.NO: O8931E0027
P. GUNA SHEELA
Assistant Professor
Department of MBA
1
WHAT IS AN INDUSTRY?
Definition:
There are four key industrial economic sectors: the primary sector, largely raw
material extraction industries such as mining and farming; the secondary sector, involving
refining, construction, and manufacturing; the tertiary sector, which deals with services (such
as law and medicine) and distribution of manufactured goods; and the quaternary sector, a
relatively new type of knowledge industry focusing on technological research, design and
development such as computer programming, and biochemistry. A fifth quinary sector has
been proposed encompassing nonprofit activities. The economy is also broadly separated into
public sector and private sector, with industry generally categorized as private. Industries are
also any business or manufacturing.
Industry in the sense of manufacturing became a key sector of production and labour
in European and North American countries during the Industrial Revolution, which upset
previous mercantile and feudal economies through many successive rapid advances in
technology, such as the steel and coal production. It is aided by technological advances, and
has continued to develop into new types and sectors to this day. Industrial countries then
assumed a capitalist economic policy. Railroads and steam-powered ships began speedily
establishing links with previously unreachable world markets, enabling private companies to
develop to then-unheard of size and wealth. Following the Industrial Revolution, perhaps a
third of the world's economic output is derived from manufacturing industries—more than
agriculture's share.
Many developed countries (for example the UK, the U.S., and Canada) and many
developing/semi-developed countries (People's Republic of China, India etc.) depend
significantly on industry. Industries, the countries they reside in, and the economies of those
countries are interlinked in a complex web of interdependence.
“The term industry refers to that part of business activity which is relates to production
processing or fabrication of products”
1
WHAT IS INDUSTRY ANALYSIS?
The Industry Analysis is a powerful combination that brings together the advantages
of analysis. It provides both. It helps you remain fully abreast of the trends in individual
industries. around . It provides an up-to-date and an incisive analysis of what the numbers
speak.
Demand and supply includes production, trade, consumption and in some cases
inventories. Prices includes those in multiple markets and for multiple grades. The financial
performance includes quarterly growth in sales profits and profitability of companies in the
industries. CMIE's share price indices are the most broadbased and comprehensive. They
include sectoral indices. IAS provides these series. The database is available in the form of
long time-series. It provides the basic inputs required by any analyst to perform his/her own
analysis. IA also provides news abstracts relevant for the industries covered.
The IA also provides its own analysis of the individual industries. This includes forecasts and
descriptive analysis of the current trends.
1
OBJECTIVE OF STUDY:
The main objective is to find out the current trend going on in the industry i.e. (about the
product, piece, place and promotion). Other objectives are as follows:
The company's brands (Five Star, Gems, Eclairs, Perk, Dairy Milk) are leaders their
segments. Till the early 90s,Cadbury had a market share of over 80 percent, but its party
was spoiled when Nestle appeared on the scene. The latter has introduced its international
brands in the country (Kit Kat, Lions), and now commands approximately 15 percent
market.share.
The Gujarat Co-operative Milk Marketing Federation (GCMMF) and Central Arecanut
and Cocoa Manufactures and Processors Co-operative(CAMPCO) are the other
companies operating in this segment.
Competition in the segment will get keener as overseas chocolate giants Hershey's and
Mars consolidate to grab a bite of the Indian chocolate pie
They are more pronounced for manufacturing distinct flavors and varieties of chocolates
in various shapes and size. But, these chocolates are usually priced at a higher price than
that available for branded products for the same quantity.
House-wives from elite class usually indulge in this kind of business. They usually
operate in local area and through their contact network. Some home-made chocolate
manufacturers manufacture really attractive GIFT CHOCOLATES.
1
Trends in the Industry :
With socio-economic changes rapidly taking place, the young and not so young
population will lead a new life style and chocolate eating is definitely going to be
widespread and acceptable.
In the industry, both population and family incomes as well as urbanisation are on
the increase.
There has been a significant growth in the middle class, with 5.8 million people
having upgraded to the quoted middle class.
There is quantified data on FMCG usage having increased (NRS-VI & IRS’98
figures)
Thanks to the above reasons the growth in the chocolate market is estimated to be at 22% in
2001. But marketers in the industry are looking forward to a much higher growth rate, as
India’s per capita consumption of chocolates is only 15 Gms. Versus 6 Kg in the west.
INDIA, stands nowhere even near to these countries when compared in terms of Per
CapitaChocolate Consumption. The Indian chocolate industry is extremely fragmented with a
range of products catering to a variety of consumers. We have the bars/slabs, jellies,
lollipops, toffees and sugar candies. Given India's mammoth population, it comes as a
surprise that per capita chocolate consumption.
The country is dismally low - a mere 20 gms per Indian. Compare this to over 7 kgs in
most developed nations. However, Indians swallowed 22,000 tonnes of chocolate last year
and consumption is growing at 10-12 percent annually. The market size of chocolates was
estimated to be around 16,000 tonnes, valued around Rs. 4.16 billion in 1998. Volume growth
which was over 20% pa in the 3 years preceding 1998, slowed down thereafter.
Both chocolate and sugar confectioneries have abysmally low penetration levels, in
fact, even lower than biscuits, which reach 56 per cent of the households. Market growth in
the chocolate segment has hovered between 10 to 20%. In the last five years, the category has
grown by 14-15% on an average and will expect it to continue growing at a similar rate in the
next five years.
1
The market presently has close to 60mn consumers and they are mainly located in the
urban areas. Growth will mainly come through an increase in penetration as income levels
improve.
However, almost all of this consumption is in the cities, and rural India is nearly
‘chocolate-free’. But the fact is that three quarters of Indians live in Rural Areas. “Average
summertime temperatures reach 43 degrees Celsius in India. Chocolate melts at body
temperature of 36 degrees.” Per capita consumption of chocolates in India is minuscule at
20gms in India as compared to around 5-8 kgs and 8-10 kgs respectively in most European
countries. ... Awareness about chocolates is very high in urban areas at over 95%.
Growth of other lifestyle foods such as malted beverages and milk food have actually
declined by 3.7 per cent and 11.7 per cent, however the CHOCOLATES continue to grow at
the rate of 12.6%.
Low priced unit packs, increased distribution reach and new product launches can be
said to have fuelled this growth. The launch of lower-priced, smaller bars of chocolate in the
last two years and positioning of chocolate as a substitute to traditional sweets during
Festivals, have boosted consumption.
This is also because chocolate, which was considered to be an elitist food, has caught
the fancy of buyers looking for a lifestyle item at affordable cost. Till recently, chocolate
consumption had been restricted by low purchasing power in the market.
Chocolates and other cocoa-based snack foods were looked upon as food suitable
only for the well-off. After economic liberalization in 1991, major changes have occurred in
food habits, partly on account of rise in gross domestic product (GDP) growth and higher
purchasing power in the hands of the middle-class representing a third of the total population.
Availability of chocolate products has also exploded. A study had projected that sales
of the Indian chocolate industry would rise from $125/$130 million in 1998 to $175/$180
million by the year 2000 and to $450 million by the year 2005 which ACTUALLY happened
irrespective of various negative factors.
Per capita chocolate consumption continues to be low at about 200g per person, being
mainly consumed in urban areas. In the middle and higher income groups, 70 per cent of
children, 43 per cent of young adults and 16 per cent of adults consume chocolate.
1
HISTORY OF CHOCOLATES
• The word "chocolate" entered the English language from Spanish. [1] How the word came
into Spanish is less certain, and there are multiple competing explanations. Perhaps the
most cited explanation is that "chocolate" comes from Nahuatl, the language of the
Aztecs, from the word "chocolatl", which many sources derived from the Nahuatl word
"xocolatl" (pronounced made up from the words "xococ" meaning sour or bitter,[2] and
"atl" meaning water or drink.[3] However, as William Bright noted the word "chocolatl"
doesn't occur in central Mexican colonial sources making this an unlikely derivation.
Santamaria[5] gives a derivation from the Yucatec Maya word "chokol" meaning hot, and
the Nahuatl "atl" meaning water. More recently Dakin and Wichman derive it from
another Nahuatl term, "chicolatl" from Eastern Nahuatl meaning "beaten drink". They
derive this term from the word for the frothing stick, "chicoli". The word xocoatl means
beverage of maize.[7] The words "cacaua atl" mean drink of cacao. The word "xocolatl"
does not appear in Molina's dictionary
• Chocolate
• Chocolate comes from the fermented, roasted, and ground beans of the cacao or cocoa
tree. The word "Chocolate" comes form the Nahualt language of the Aztecs. The Nahualt
word xocolatl means bitter water. The pre-Columbian peoples of the Americans drank
chocolate mixed with vanilla, chile pepper, and achiote. Europeans sweetened it by
adding sugar and milk and removing the chile pepper. They later created a process to
make solid chocolate creating the modern chocolate bar. Although cocoa is originally
from the Americas, today Western Africa produces almost two-thirds of the world´s
cocoa, with Côte d´Ivoire growing almost half of it. Today, it is one of the almost popular
and recognizable flavors in the world. There are many foods that contain chocolate such
as chocolate bars, candy, ice cream,cookies, cakes, pies, chocolate mousse, and other
desserts.
1
INDUSTRY STRUCTURE
Types of Chocolates: Depending on what is added to (or removed from) the chocolate
liquor, different flavors and varieties of chocolate are produced. Each has a different chemical
make-up, the differences are not solely in the taste.
2. Semi-sweet chocolate is also used primarily in recipes. It has extra cocoa butter and sugar
added. Sweet cooking chocolate is basically the same, with more sugar for taste.
3. Milk chocolate is chocolate liquor with extra cocoa butter, sugar, milk and vanilla added.
This is the most popular form for chocolate. It is primarily an eating chocolate. Cocoa is
chocolate liquor with much of the cocoa butter removed, creating a fine powder. It can pick
up moisture and odors from other products, so you should keep cocoa in a cool, dry place,
tightly covered.
Low-fat cocoa has the most fat removed. It typically has less than ten percent cocoa butter
Remaining.
Medium-fat cocoa has anywhere from ten to twenty-two percent cocoa butter in it. Drinking
or Breakfast cocoa has over twenty-two percent left in it. This is the cocoa used in
chocolate milk powders like Nestle's Quik.
Dutch process cocoa is cocoa which has been specially processed to neutralize the natural
acids in the chocolate. It is slightly darker and has a much different taste than regular cocoa.
Decorator's chocolate or confectioner's chocolate isn't really chocolate at all, but a sort of
chocolate flavored candy used for things such as covering strawberries. It was created to melt
easily and harden quickly, but it isn't chocolate.
Categories of Chocolates:
Bars or moulded chocolates (like Dairy Milk, Truffle, Amul Milk Chocolate, Nestle
Premium, and Nestle Milky Bar) comprise the largest segment, accounting for 37% of the
total chocolate market in volume terms. Wafer chocolates such as Kit-Kat and Perk also
1
belong to this segment. Panned chocolates accounts for 10% of the total chocolate market. ...
Wafer chocolates such as Kit-Kat and Perk also belong to this segment.
Form of Consumption :
Pure Chocolates
Toffees
Cakes & Pastries
Malted Beverages
Wafer Biscuits & Baked Biscuits
Chocolate Desserts
Chocolate Manufacturing Process:
Workers cut the fruit of the cacao tree, or pods open and scoop out the beans. These
beans are allowed to ferment and then dry. Then they are cleaned, roasted and hulled. Once
the shells have been removed they are called nibs. Nibs are blended much like coffee beans,
to produce different colors and flavors. Then they are ground up and the cocoa butter is
released. The heat from the grinding process causes this mixture of cocoa butter and finely
ground nibs to melt and form a free flowing substance known as chocolate liquor. From there,
different varieties of chocolate are produced.
What is conching? :
Raw unprocessed chocolate is gritty, grainy and really not suitable for eating. Swiss
chocolate manufacturer Rudolph Lindt discovered a process of rolling and kneading
chocolate that gives it the smoother and richer quality that eating chocolate is known for
today. The name 'conching' comes from the shell-like shape of the rollers used. The longer
chocolate is conched, the more luxurious it will feel on your tongue.
The Indian chocolate market is valued at Rs. 650 crores (i.e. Rs. 6.50 billion) a year.
The Indian chocolate bazaar is estimated to be in the region of 22,000-24,000 tonnes per
annum, and is valued in excess of US$ 80 million.
Chocolate penetration in the country is a little over 4 percent, with India's metros
proving to be the big draw clocking penetration in excess of 15 percent. Next, comes the
relatively smaller cities/towns where consumption lags at about 8 percent. Chocolates are a
luxury in the rural segment, which explains the mere 2 percent penetration in villages.
The market presently has close to 60mn consumers and they are mainly located in the
urban areas.
1
MAJOR PLAYERS
Bars count
Lines wafer panned premium
Cadbury’s dairy milk &
Variants
5-star, milk
Treat perk gems,
Tiffins
Temptation &
Celebrations
Nestle milky bar bar one,
Crunch
Kit kat,
Munch nutties
Amul
Milk chocolate
Fruit ‘n’ nut
Fundoo
Bindaaz
Almond bar
Campco campco bar,
Cream
Krust,
1
Turbo treat
INDUSTRY PERFORMANCE
Production Chocolate Consumption Structure – 2008:
Children - 55%
Adults - 12%
Young adults - 33%
SALES:
Sales of the Indian chocolate industry would rise from $175/$180 million by the year
2000 and to $450 million by the year 2008 Per capita chocolate consumption continues to be
low at about 200g per person, being mainly consumed in urban areas. In the middle and
higher income groups, 70 per cent of children, 43per cent of young adults and 16 per cent of
adults consume chocolate. Sales in Rs. Million
• Low priced unit packs, increased distribution reach and new product launches can be said
to have fuelled this growth. The launch of lower-priced, smaller bars of chocolate in the
1
last two years and positioning of chocolate as a substitute to traditional sweets during
festivals, have boosted consumption.
• This is also because chocolate, which was considered to be an elitist food, has caught the
fancy of buyers looking for a lifestyle item at affordable cost.Till recently, chocolate
consumption had been restricted by low purchasing power in the market. Chocolates and
other cocoa-based snack foods were looked upon as food suitable
COST STRUCTURE
Product Name Quantity Cost:
Milk Powder / Liquid Milk / Cream - 26.23.26.10 15.79 41.42.12.91.19
Dry Fruits - 43.234.0 16.26 7.029.848.4
Edible Oil - 21.674.50 51.72 11.21.0051.4
Glucose-Liquid - 27.061.09 13.17 35.63.94.555.3
Cocoa Beans / Butter/ Powder - 84.78.460 109.95 93.220.66 77
Malt Extract - 86.79.690 20.39 17.69 78.87 9.1
Total - 20.62 19.20 21
1
INDUSTRY PRACTICES
Distribution Of Chocolate:
• Chocolate needs to be distributed directly, unlike other FMCG products like soaps and
detergents, which can be sold through a wholesale network. 90% of chocolate products
are sold directly to retailers.
• Distribution, in the case of chocolates, is a major deterrent to new entrants as the product
has to be kept cool in summer and also has to be adapted to suit local tropical conditions.
• To ensure stability, it has to be install VISI coolers at several outlets. This helps in
maintaining consumption in summer, when sales usually dip due to the fact that the heat
affects product quality and there by off take.
Promotion:
• Typically it is said that chocolates are being eaten when everyone is happy. And this is
something advertising has always portrayed.
• It is found chocolates are eaten under diverseconditions and moods - when people are
anxious, when they are sad, when happy - a whole range ofemotions. Condensing these
views & thoughts, it can be said chocolate is a true soul mate
• Excise duties : Changes in excise levied on malt and chocolate influences end product
prices and thereby volume growth as well as margins.
• Changes in custom duties and foreign exchange fluctuation: As 20% of raw material is
imported changes in custom duties & foreign exchange fluctuations have significant
impact on the final cost ofthe product.
• Competition from MNCs like Nestle as well as imported brands. Increasing competition
puts pressure on advertisement budget and margins. However on the positive side, it helps
in expanding the market.
1
BUYING BEHAVIOUR
Chocolates are consumed as indulgence and not as snack food, as prevalent in western
countries. Almost 75% chocolates are impulse purchases. Chocolates are bought
predominantly by adults and gifted to children. On an average the wholesalers sells
Rs50000/month of Chocolates (all brands included). Also the wholesaler usually deals in all
kinds of FMCG goods, Foodstuff in addition to the chocolates. The items like chocolates are
placed near the counter.
Chocolates are primarily sold through Kirana Stores, Gift stores, Medical Stores, canteens,
Pan-Bidi stores, Bakeries, Sweet Shops etc. This is true for chocolates also. The space
allocated for the chocolates was less when compared to the total area of the shop. For
chocolates, The chocolates category thrives on excitement. It's all about giving the consumer
a choice and taste which they enjoy.
• In most of the cases, various brands of chocolates are kept together. In some of the cases
the chocolates are stocked depending on the manufacturer’s provision.
• The chocolates are kept in GlassJars and boxes – These are provided by the respective
companies along with the product.
• The chocolates are kept there. But in most of the cases chocolates are stocked near the
counter. Ideally the shopkeeper tries to keep chocolates within the reachable (sitting on
the counter)distance.
• Chocolates are kept at or below the eye level. This is to facilitate visibility of the
chocolates for the customer who is visiting the store.
• Medium size retailers sell chocolates of about Rs. 400 – Rs. 800 per week while big
retailers sell chocolate worth Rs1000 or more per week.
1
CHOCOLATE ADVERTISING IN INDIA
Company-wise Ad Spending
The graph shows that Cadbury's India Ltd. tops with 52% share of the advertising pie on
television.
Nestle India Limited grabs the 2nd position with 34% share
Parle Products gets the 3rd position with 8% of the advertising share
CADBURY’S INTERNATIONAL:
Cadbury is a very old trusted name. It all started in Birmingham in England when
John Cadbury started his family grocery shop with side business of cocoa and chocolate
products in around 1824. His two sons, Richard and George, expanded their family business
of cocoa and chocolate. Bournville, a town near Birmingham, was build by them as a part of
expansion of their business. Cadbury family is also known for their contribution in social
reforms and considered as liberals. This family was in the forefront of adult education
movement in England.
1
CADBURY’S INDIA LIMITED
Cadbury was originally incorporated as a wholly owned subsidiary of Cadbury
Schweppes Overseas Ltd (CSOL) in 1948. The company’s original name was Cadbury Fry
(India) Ltd. In 1978,CSOL diluted its equity stake to 40% to comply with FERA guidelines.
In 1982, the name was changed to Hindustan Cocoa Products. CSOL’s shareholding was
increased to 51% in Jan ’83through a preferential rights issue of Rs700mm. The current name
was restored in Dec ’89. In 2001,Cadbury Schweppes made an open offer to acquire the 49%
public holding in the company.The parent holds over 90% of the equity capital after the first
open offer. A second open offer has been made to buyback the balance shareholding, after
which the company would operate as a 100%subsidiary of Cadbury Schweppes Plc Ever
since the Cadbury is in India in 1947, Cadbury chocolates have ruled the hearts of Indians
with their fabulous taste. The company today employs nearly 2000 people across India.
Its one of the oldest and strongest players in the Indian confectionary industry with an
estimated 68 per cent value share and 62 per cent volume share of the total chocolate market.
It has exhibited continuously strong revenue growth of 34 per cent and net profit growth of
24 per cent throughout the 1990’s. Cadbury is known for its exceptional capabilities in
product innovation, distribution and marketing. With brands like Dairy Milk, Gems, 5 Star,
Bournvita, Perk, Celebrations, Bytes, Chocki, Delite and Temptations, there is a Cadbury
offering to suit all occasions and moods. Today, the company reaches millions of loyal
customers through a distribution network of 5.5 lakhs outlets across the country and this
number is increasing everyday. Major objective is to grow shareholder value…over the long
term.
PRICING :
After the roaring success of Nestle’s Munch and Chocostick, Cadbury’s empire struck back
hard. The Rs 5 price point accounts for more than half of all chocolate sales. Nestle had
seized the initiative at this price point, with its launch of Munch, now a roaring success (and
the largest selling product at that price point). Today, Cadbury has four products at this price
point: CDM, Perk, 5 star and Gems — and the five-rupee CDM bar is its single largest-
selling SKU.
“This is a potent price point in India, because the average purchasing power is
abysmally low,” is what industry analyst have to say.
Nestle kicked off one of the biggest success — the liquid chocolate category with its brand
Chocostick priced at Rs.2 — three months ahead of competition. Cadbury did react with
Chocki, priced at Rs 2, expanding the concept of sachetisation to new frontiers. Chocki has
been the single biggest growth driver for Cadbury as well as the entire chocolate category.
The novelty of theformat endeared itself to the existing customer. In less than one year, it
1
constituted nearly 10 per cent of the total chocolate market, split equally between Cadbury
and Nestle.
Chocki, selling at a potent price point of Rs 2, was ideal for smaller towns, especially
since it did not need refrigeration. But Chocki started to cannibalise other higher-priced
chocolates in larger markets. The students of Bombay Scottish (an upmarket school in
Mumbai) are not supposed to eat Chocki, they should not have even heard of the product.
Worldwide Consumption Rates: Europe Australia Japan Brazil United States Click on the country
or continent for mapped statistics on average annual chocolate consumption and related
nutritional information.
The Top Chocolate Loving Nations are (lbs/yr):
1. Switzerland 22.36
2. Austria 20.13
3. Ireland 19.47
4. Germany 18.04
5. Norway 17.93
Chocolate Consumption Distribution Worldwide:
Not all countries are able to enjoy the sweet taste of chocolate equally. There is a profound dichotomy
between those nations that extract the raw materials and those who indulge in the finished product. As
it is shown in the maps available, all but one of the top twenty countries that consume chocolate are
considered 'well-developed' or 'advanced'. Brazil is the only country involved on the list that actually
considers chocolate to be a natural resource.
The reality exists that the processing and consumption of chocolate products is Western World
dominated. 70% of the worldwide profit from chocolate sales is concentrated in these countries. 80% of
the world chocolate market is accounted for by just six transnational companies, including Nestle, Mars
and Cadbury. Europeans alone consume around 40% of the world's cocoa per year, 85% of which is
imported from West Africa. There have recently been efforts to initiate a fair-trade movement, which
would encourage the purchase of cocoa from developing country producers at a fair price. However,
tariff escalation continues to me a major problem, which acts to drive chocolate comsumers and cocoa
exporters further apart.
1
Quick Chocolate Facts
-in 2001 the sale of all other non-chocolate candy items combined was
$7.6 Billion
2300 calories, 140 grams of fat, 100 milligrams of cholesterol, 370 milligrams of sodium, 270
grams of carbohydrates and 31 grams of protein
The major components of manufactured chocolate are approximately 54% cocoa butter, 11.5%
protein, 9% cellulose, 6% tannic acids and colour, 5% water, 2.6% salts, 1% sugars, 0.2%
caffeine and 10% organic acids and aromas. Depending on an individual chocolate
manufacturers recipes the amount of cocoa mass will range from 7-15% in milk chocolate and
30-70% in dark chocolates.
1
Positive Aspects of Consumption (Is this an oxymoron?!)
Chocolate consumption has been scientifically linked to longer life. A few pieces of chocolate
every month may make your life both sweeter and longer, according to the Harvard School of
Public Health. A survey of healthy 65-year-old men revealed that those who ate sweets
containing chocolate reportedly lived longer. Mortality was lowest among those consuming
chocolate 1-3 times a month and higher among those who indulged in the habit 3 or more times
a week. Surprisingly non-consumers had the highest mortality of all. As with most things in life,
moderation seems to be paramount.
Chocolate is considered a major source of dietary copper, which is required for a healthy
lifestyle. Cocoa and chocolate are also rich in minerals, such as magnesium and iron. Chocolate
is a short term source for energy due to antioxidants and phenolics it contains. This energy
source was even utilized by soldiers during heavy combat situations. A 40 gram chocolate bar
contains the same amount of phenol as a glass of red wine and can be a positive source of
dietary antioxidants. These anti-oxidants have been proven to reduce the risk of developing
cancer or heart disease.
The temperatures in India are much higher than that of the European countries. To prevent
the chocolate from melting and to enable shape retention under such high temperatures the
recipe ofthe chocolate is adapted to the Indian climate. Therefore the milk fat content in
Indian chocolates is lesser than that of European chocolates and hence they taste different.
When a chocolate gets exposed to temperature variances from a hot day to a cold night
(which is very common all across India), the fat expression happens on the surface of the
chocolate.'
This means white spots emerge on the surface of the chocolate. This phenomenon is called
'fatbloom'. It is entirely safe to consume chocolates however the feel and the taste of the
chocolate maynot be the same as is originally intended to.
1
Cocoa beans have antioxidant compounds called flavanols, and scientific research suggests
they do good things to blood vessels. Dark chocolate contains flavanoids, an antioxidant
whichhelps the body by neutralising potentially cell-damaging substances known as
oxygen-free radicals, a normal byproduct of metabolism.
1. TEMPERATURE:
A peculiar problem that hinders the distribution to far-off places is the tendency of chocolates
to melt under even moderate heat. The temperatures can reach as high as 48 degrees in
summers, whereas chocolate starts melting at body temperature (about 37-38 degrees)
.Manufacturers have to takeprecautionary measures to ensure the preservation of chocolates
especially in summer.
India does not have controlled refrigerated distribution. Air-condition supermarkets are rare.
Cadbury loses 1.5 percent of annual sales of Rs. 6.8 billion to heat damage. Companies
revise ingredients to make chocolate withstand heat, and so Indian chocolates are more
resilient to heat than Eurupean chocolates by a factor of 2 degrees. Ironically, the chocolate
market has grown recently because smaller retailers have stuffed fridges and coolers supplied
by the cola companies Coke and Pepsi with chocolates. Nestle and Cadbury have tried to
provide loans for retailers to buy fridges, but to hold down power costs the shopkeepers
switch off the fridges at night. As a result the cocoa fat melts and migrates to the main body
of the chocolate bar. When the cooling is switched on in the morning, the cocoa fat solidifies
and turns white, presenting a bizarre, un-sellable white on black form.
Nestle tried to provide fridges with see-through doors, but was appalled to see its
chocolates sandwiched between dead chicken, butter and vegetables.
1
Small coolers were provided to retailers to keep the chocolate from melting, but that didn't
quite do the trick. Electricity costs money and is not provided in a uniform way, so on
and off the electricity goes and the product may suffer sometimes
3. RAW MATERIALS:
Cocoa is the key raw material and accounts for around 35% of the total material cost
(including packaging) of chocolates. The price of cocoa has been hitting a new high of late.
Cocoa prices are at a near 20-year high at $2358 per ton, up from $900 a year back. India
does not produce cocoa to any noteworthy extent but is a large consumer of chocolates.
Consumption of chocolates and other cocoa-based products, especially among the middle
class, has been growing.
4.TRANSPORTATION:
Chocolate needs to be distributed directly, unlike other FMCG products. 90% of our products
are sold directly to retailers. Building such a direct network in rural areas is a daunting task
since the infrastructure is poor in India in rural areas.
Free availability of imported brands bought through illegal routes pose a threat to the
domestic chocolate industry. Usually, these imported chocolates taste better than domestic
chocolate due to recipe difference. Hence consumers who are willing to spend a little more,
prefer these imported chocolates. However, the premium brands, which come through official
channels, do not pose a threat to the market, as these cater to a small niche market. However
there is a lot of dumping from neighboring countries like Dubai, Nepal, etc of inferior brand
of imported chocolates. These are not only of low quality, but are brought very near to their
expiry dates. Most of the cheap chocolate brands that are available do not meet Indian Food
Regulations.
Good monsoon ensures adequate availability of raw materials, which are mainly agricultural
in nature. Raw material prices have significant influence on margins.
Market growth driven by overall economic growth and urbanization also contributes. An
overall booming economy will consume tonnes of chocolates because consumer spending
increases. Also, the absolute number of consumers in middle class & upper middle class
increases.
1
Rupee depreciation improves export realizations, however it also makes import of raw
material (esp. cocoa) expensive.
The fact that chocolate is not a traditional food, high prices and domestic production
problems will provide the main problems to market growth. As these markets develop, prices
will fall making these products more accessible to the wider population. However the Indian
market is still untapped and provides immense scope for growth, both geographically as well
as product basket wise. Chocolates right now reaches about 70mn to 75mn consumers. It is
estimated that chocolates have a potential market of about 116mn consumers.
Chocolate consumption:
In India is extremely low. Per capita consumption is around 160gms in the urban areas,
compared to 8-10kg in the developed countries. The per capita chocolate consumption in
India is still much below the East Asian standards. Hence per capita consumption hasa
immense scope for improvement. In rural areas, it is even lower. Chocolates in India are
consumed as indulgence and not as a snack food. A strong volume growth was witnessed in
the early 90's when Cadbury repositioned chocolates from children to adult consumption. The
biggest opportunity is likely to stem from increasing the consumer base. Leading players like
Cadbury and Nestle have been attempting to do this by value for money offerings, which are
affordable to the masses. We also believe that the near term opportunity lies in increasing
penetration rather than increasing intensity of consumption.
In the past five years, the chocolate business grown by 14-15% on an average and is
expected to grow further for at least next five years.
But with the launch of lower-priced, smaller bars of chocolate in the last two years and
positioning of chocolate as a substitute to traditional sweets during festivals, have boosted
consumption.
Chocolates which were considered to be an elitist food hit the fancy of masses looking for a
change in life style at affordable cost.
Rural expansion:
Rural market and small town markets are seen as the key to spurring double-digit growth.
Products such as liquid chocolate packs from the existing portfolio are expected to enable
rapid acceptance.
1
conclusion that there’s an immense scope for growth of chocolate industry in India not only
in its offering pattern but also for increment in its total consumption value and size.
Distribution
Will hold the key. Companies need to reach out to smaller towns, where three-fourths of the
population does not even know the product.
3. Merger & Acquisitions: Mergers & Acquisitions with companies that match the product
portfolio & overall growth strategy should be considered which will not only strengthen the
company to establish a stronger hold in the country but also ward off possible competition in
the select category. Such collaborations will also facilitate companies to use each other’s
distribution networks.
They call it 'choco fever'. Chocolate Boutiques are a complete chocoholic experience.
Surrounded on all sides by scrumptious chocolates wrapped neatly in colourful foil and
paper, any one will be gripped by this fever. It’s a world of chocolates where the flavour of
Jamaican rum truffle melts in your mouth even as your hand reaches out greedily for a kiwi-
flavoured concoction or where roasted almonds are a delight to eat while your mind flirts
with hazelnut praline. Manufacturers are finding an increasing number of curious customers
who're pampering their taste-buds to apricot and peach chocolate, strawberry chocolate or
better still wild berry in cognac flavoured chocolate. Manufacturers are now luring their
patrons with chocolates in geometric shapes, animal figurines coloured in metallic hues and
glitter. For the more adventurous, there are also chocolates with pan-supari, cardamom
flavours and liqueur filling. Products like nut-based praline chocolates, some unique flavors
like tamarind and chilli chocolates, and champagne and Jamaican rum truffles are also
demanded in the market. These manufacturers also cater to the older and the health-conscious
choco-lovers, the high.
FIbre, low fat and sugar ones are quite popular. Apart from the festive season, weddings and
baby announcements also see heavy offtake of premium sweet delicacies. For those who are
health conscious there is also a special range of sugar-free and diet chocolates. These are
usually bought by corporates or individuals who want to make a special statement. Extensive
range of Baby chocolates are available which are beautifully wrapped in pinks and blues and
embellished with decorations like baby bottles, satin ribbons, silk flowers, bibs and bows are
also available and are getting very popular in elite classes.
Designer chocolates are tailored for customers who're looking at gifting chocolates with a
personalized touch. Embossing of names, logos of companies and personalized message on
the chocolates are fast becoming popular. There are 1,000 varieties of designs to choose from
-- ranging from good luck charms, X'mas figurines and animals -- and nearly 50 kinds of gift
packaging available to suit any particular occasion. From festive occasions to personal
celebrations to corporate gifting, made-to-order chocolates are most sought after. And we are
not talking about the boring old rectangular slabs of cocoa These designer chocolates focus a
1
lot of attention on packaging. The packaging of these products includes materials like
imported mesh, gold foils and brocade, lace and satin-draped boxes being in.
Heavy demand. With the rise in disposable incomes, people do not mind spending on
designer chocolates, most of which costs between Rs 500 and Rs 2,500 per kg. Few chocolate
makers cater only to corporate clients for festive occasions, product launches, new employee
joinings and management training programmes. From logos to company names being
embossed in chocolates of different shapes and colours, these are all in demand.
• Chocolates right now reaches about 70mn to 75mn consumers. It is estimated that
chocolates have a potential market of about 116mn consumers.
• In the past five years, the chocolate business grown by 14-15% on an average and is
expected to grow further for at least next five years.
WEAKNESS :
1. Revamp the product to keep the excitement alive.
2. Companies should look at new avenues, while expanding the reach of its products.
Distribution will hold the key. Companies need to reach out to smaller towns, where
three-fourths of the population does not even know the product.
3. Merger & Acquisitions: Mergers & Acquisitions with companies that match the
product portfolio & overall growth strategy should be considered which will not only
strengthen the company to establish a stronger hold in the country but also ward off
possible competition in the select category. Such collaborations will also facilitate
companies to use each other’s distribution networks.
OPPORTUNITIES:
• In the past, chocolate consumption had been restricted by low purchasing power in the
market.
• Chocolates and other cocoa-based snack foods were looked upon as food suitable only for
elitist consumption till recently.
• But with the launch of lower-priced, smaller bars of chocolate in the last two years and
positioning of chocolate as a substitute to traditional sweets during festivals, have boosted
consumption.
• Chocolates which were considered to be an elitist food hit the fancy of masses looking for
a change in life style at affordable cost.
1
Rural expansion:
Rural market and small town markets are seen as the key to spurring double-digit growth.
Products such as liquid chocolate packs from the existing portfolio are expected to enable
rapid acceptance..
THREATS:
Threat from imported brands:
• The availability of imported brands bought through illegal routes pose a threat to the
domestic chocolate industry.
• Usually, these imported chocolates taste better than domestic chocolate due to recipe
difference. Hence consumers who are willing to spend a little more, prefer these imported
chocolates.
• However, the premium brands, which come through official channels, do not pose a threat
to the market, as these cater to a small niche market.
• However there is a lot of dumping fromneighboring countries like Dubai, Nepal, etc of
inferior brand of imported chocolates. These are notonly of low quality, but are brought
very near to their expiry dates.
• Most of the cheap chocolate brands that are available do not meet Indian Food
Regulations.
Expensive COCOA :
Chocolate Market in India - A Snapshot
1. Chocolate market is estimated to be around 1500 crores (AC Nielson) growing at 18-20%
per annum.
2. Cadbury is the market leader with 72% market share.
3. The per capita consumption of chocolate in India is 300 gram compared with 1.9 kilograms
in developed markets such as the United Kingdom.
4. Over 70 per cent of the consumption takes place in the urban markets.
5. Margins in the chocolate industry range between 10 and 20 per cent, depending on the
price point at which the product is placed.
6. Chocolate sales have risen by 15% in 2007 to reach 36000 tonnes according to one.
estimate. Another estimate puts the figure at 25000 tonnes.
7. The chocolate wafer market (Ulta Perk etc) is around 35 % of the total chocolate market
and has been growing at around 13% annually.
8. As per Euro monitor study, Indian candy market is currently valued at around USD 664
million, with about 70%, or USD 461 million, in sugar confectionery and the remaining 30%,
or USD 203 million, in chocolate confectionery.
9. Entire Celebrations range has a market share is 6.5%.
10. The global chocolate market is worth $75 billion annually.
1
Consumer Trends :
1. Mithai- the traditional Indian sweats is getting substituted by chocolates among upwardly
mobile Indians. Instead of buying sweats on Raksha Bandhan, sisters prefer offering
chocolates to their brothers. This is the reason for sudden spurt in advertisement between July
& Sep by most of the companies
2. The range and variety of chocolates available in malls seems to be growing day by day,
which leads to lot of impulse sales for chocolate companies
3. Chocolates which use to be unaffordable, is now considered mid-priced. Convenience over
Mithai in terms of packaging and shelf life in making both middle class and rich Indians opt
for chocolates
4. Designer chocolates have become status symbols. They are linked to one’s aspiration and
lifestyle and malls are perfect points of sale as people usually are happy and gay at these
destinations
5. Cadbury initial communication for Celebrations was concentrated on occasions like Diwali
and Rakshabandhan. Over the last seven to eight years, the brand emerged as a good gift
proposition for occasions and enabled people to come closer. Research done by Cadbury
suggested that they should extend the plank of occasion-based gifting to social gifting i.e. all-
year-round gifting options
6. Consumers can choose from wide range of chocolates, which initially was limited to Milk
chocolates like DairyMilk and MilkyBar. In past few years we have seen so many SKUs with
almonds, raisins and all sort of nuts. And how can we forget latest 5 star crunchy and Ulta
Perk, which has opened new windows for consumers
7. In past, consumers had negligible inclination for dark chocolates. But now we have seen a
change in the Indian palate, which is increasing the base of this sub-segment
Candy Industry publishes an annual list of the top 100 global confectionery companies,
ranking them by total sales.
The table below is an extract from this list giving the top ten global confectionery
companies that manufacture some form of chocolate by total confectionery sales value in
2005:
Company Total Sales 2009
US$millions
1
COMPETITION:
Chocolates are always referred to as feel-good foods. They are the simple luxuries of life.
However, making chocolates is never simple - especially not with the fierce competition
perceived in the chocolate industry these days. There currently are a good number of
chocolate manufacturers in the American region alone. To get the biggest share in the highly
dense consumer market is the goal of every chocolate manufacturer. But to make that happen,
a series of strict production processes and manufacturing guidelines have be implemented
first.
To make the best-tasting chocolate in the market, the very first step is to find cocoa beans of
the finest quality. However, this feat is not a very simple one. Because aside from locating
which part of the world produces the best cocoa beans, you also have to be assured of a
strong and steady supply of it. Otherwise, the chocolate produced will have varying degrees
of quality and consistency, much to the disappointment of consumers. One of the best places
where top quality cocoa beans are produced is in the Caribbean region, more particularly in
the Dominican Republic. The cocoa beans of Dominican Republic are one of the country's
prime products that are being exported to the rest of the world. The cocoa beans produced in
the Caribbean are meticulously grown, cultivated, and processed to become the best product
for use by chocolate manufacturers.
What's more, big farm owners of the country are expanding further into the global market by
setting up offices in different parts of the world, more particularly in areas where a bulk of
their products are shipped to. There are many Dominican Republic cocoa bean producers
with offices in the U.S., UK, Australia, and some parts of Europe currently.
With offices nearby, it becomes possible for chocolate manufacturers to provide their cocoa
bean farm partners their strict requirements as to what type and grade of cocoa they need.
Some farms also allows for custom cocoa growing, wherein the chocolate manufacturers has
the last say as to how should the crops be handled, cultivated, fermented and shipped. They
can remotely oversee the cocoa bean production right from the day they are sowed into the
soil.
These painstaking initial processes of producing cocoa bean are the primary investment that
chocolate manufacturers can make. Their innovative production lines, state-of-the-art
equipments, and top-secret recipes are only secondary. The quality of the cocoa beans used in
making the chocolates is the first and foremost indication whether their product will hit it big
in the highly saturated chocolate market.
The biggest and probably the most notable development in terms of cocoa bean production
today is the move to go organic. People are eating healthy these days and they are becoming
very picky with the foods that they eat. Chocolates, no matter how tasty and luxurious, are
not considered as a health food. But with the attempt to make organic cocoa beans, more and
more people are realizing the sheer goodness of chocolates. Chocolates are indeed healthy,
especially the dark chocolate versions. However, they have to be eaten in moderation to
achieve the best possible effects.
1
Chocolate Trends 2008:
1
In August, Nestle announced the re-launch of its dark chocolate Black Magic range, stating
that more and more consumers see these chocolate boxes as luxurious treats, rather than an
everyday sugar rush.
Ethical chocolate :
Sales of ethically sourced chocolate have boomed over the course of the year, as consumers
and industry alike start to take more concern over where their favourite sugary treat comes
from.
According to the latest figures from the Fairtrade Labelling Organisation International (FLO),
global sales in fairtrade products increased 37 per cent to €1.1bn (£758m) in 2007, a massive
increase from the year before.
With sales so high, most leading chocolate manufacturers have pledged not to exploit their
cocoa farmers - most of whom are situated in third world countries such as Ghana.
In November, Blommer chocolate established a sustainable cocoa farming programme in the
Ivory Coast.
The 2007 ethical chocolate trend has not only been about sourcing however, as the industry
has invested in new products and innovative marketing techniques over the year.
Only this month, Divine launched new chocolate boxes and Divine after-dinner mints, that
help boost the company sales by 15 per cent this Christmas, while both Sainsbury's and
Morrison's began selling their own brand Fairtrade chocolate in January.
One of the most innovative marketing campaigns was launched by the Dubble Fairtrade
brand, which created a competition to design an on-line chocolate computer game. The
DubbleClick game not only entertained children, it also helped spread the ethical chocolate
word amongst the younger generation
With the entry of multinationals and home companies sprucing up their act, the confectionery
market is booming. McKinsey & Co. has estimated the confectionery industry to touch a
whopping Rs. 6 500 crore by the year 2008.
Till the eighties, the chocolate market was small and the product category itself was fuzzy. In
the eighties, Cadbury’s - the virtual monopolist - had decided to focus its efforts on making
chocolates a distinct category with an identity of its own. And the marketer had sharply
positioned its product at children to do that. Hence, chocolates bore an “Only for kids” tag,
and kept adults at bay.
By the end of the eighties, Cadbury’s still ruled the roost with over 80 percent market share.
And though several brands - like Amul and Campco - tried to break into the market, none of
them had succeeded in shaking the leader’s grip. In fact, Cadbury’s had become a brand
1
virtually generic to chocolates. Then chocolates were used to reward and reinforce positive
behaviour and hence were categorised as a luxury reserved for special occasions. This was, a
stark contrast to the west where chocolates were snacked on, eaten as mini meals or just to
suppress pangs of hunger.
But constant working by players like Cadbury’s (re-launch of Cadbury’s Dairy Milk targeting
adults and as a casual any-time buy) and Nestle towards exploding the myth that chocolates
are meant for children only, has resulted in the segment booming.
OBJECTIVES:
1
• To increase to the fullest the employee’s job satisfaction and self-actualization.
IMPORTANCE:
HR VISION:
Lead and Facilitate continuous Change towards organizational Excellence ; create a learning
And vibrant organization with High sense of pride amongst its Members .
1
SINCE INCEPTION:
Common uniform
Open office
Common Canteen
Open Office – Easy accessibility, Speedy
Communication and decision making
Morning Meetings
Morning Exercises
Management Committee Meetings – every Tuesday
Single unaffiliated Union
Excellent Industrial Relations scenario – no
past 5 yrs.
1
HR INITIATIVES
Improve the performance Appraisal system - it’s process, skill & usage
Introduce a Potential Appraisal System
Improvements in internal & external Training & it’s effective utilisation. Training
need identification
Systematic career plannining, Job Rotation, Empowerment, Job enrichment
Periodic communication meeting at various level; Roll out of Vision
Raise cost consciousness for cost control and reduction
Exposure on Brand Strategy to all non- marketing staff
Retention of Talent
The introduction of newly appointed employees to their jobs, to their fellow workers and to
the organization.
SUCCESSION PLANNING:
1
Competency Mapping to identify Individual Training NeedsTechnical Training on
latest Technologies abroad at SMC, Japan
APPRAISAL:
REWARD:
CAREER DESIGN:
It is defined as the process of deciding on the content of a job in terms of its duties and
responsibilities on the methods to be used in carrying out the job, in terms of techniques,
1
systems and procedures and on the relationships that should exist between the job holder and
his superiors, subordinates and colleagues.
retention is a process in which the employees are encouraged to remain with the
organization for the maximum period of time or until the completion of the project. Employee
retention is beneficial for the organization as well as the employee.
Employee Welfare
Residential Colonies for Employees – Chakkarpur & Bhondsi
Hospitalisation Reimbursement – on actuals without Ceiling
Vehicle Loans
Household Equipment Loans
House Building Advance
Annual Advance
FUTURE CHALLENGES:
Competency mapping
1
Build a learnng organisation
Customised training
Internal communication
Union alignment
They Are
NESTLE
CARDBURY
COMPANY PROFILE :
History :
1
Avg. No. of calls per day by S.O.: 35
Sales Reporting – weekly basis
Sales Kit: Daily call report, product folder, price list, calculator, etc.
Organisational Structure:
Key products: Cadbury’s Dairy Milk, 5 Star, Fruit & Nut, Bournvita etc., Perk
COMPANY BACKGROUND:
In 1930 R Hudson and Company finally joined with Cadbury. This gave the flourishing local
firm a direct link with one of the greatest in international chocolate manufacturing and
marketing. Over the years the company has been involved with many other long standing
brands and entrepreneurs – names such as Fry – a chocolate brand dating back to 1756, and
of course Schweppes which is still part of the Cadbury group internationally although not in
New Zealand.
In 1969 Cadbury Fry and Schweppes merged internationally with the New Zealand Company
becoming known as Cadbury Schweppes Hudson Limited in 1973.
In 1986 Cadbury Schweppes Hudson merged with Cadbury Schweppes Australia. The result
was a truly international operation with both the New Zealand and Australian companies
supplying each other. Cadbury Schweppes Australia is a fully owned subsidiary of Cadbury
Schweppes plc, the United Kingdom based parent company.
Most recently, in 1990 Cadbury required the Griffins confectionery business, and sold the
Hudson biscuit operation in a reciprocal agreement. The Griffins business dates back to
before the turn of the century. George Griffin established the company when he opened a
small confectionery business at Nelson.
Finally, in 1991 we became known as Cadbury Confectionery Ltd, and can now boast
dominance in New Zealand’s chocolate and sugar confectionery markets. With
manufacturing bases in both Dunedin and Auckland, as well as sales offices in Wellington
and Christchurch, the Company employs nearly 1,000 in total.
The Cadbury group has also flourished internationally. Cadbury Schweppes plc – the parent
company – has manufacturing facilities in 20 countries and its famous brands are bought and
enjoyed in more than 110 countries around the world. Cadbury is one of the world’s leading
chocolate makers and is number one in England and Australia as well as in New Zealand.
PRODUCTION :
Cadbury India’s first manufacturing facility was set up at Thane (Mumbai) in 1966. Today,
the factory has grown manifold and manufactures a range of products that include Cadbury
Dairy Milk, 5 Star, Nutties, Gems and Bournvita. The factory employs about 750 people and
houses the R&D and engineering development facilities of the company.
In a move towards backward integration, Cadbury bought Induri Diary farm in Pune in 1964.
Recently, a major investment program resulted in the installation of modern moulding, crumb
1
and chocolate making facilities. Today, the Induri Factory manufactures intermediate
products like milk crumb and a range finished chocolates.
In 1989, the company began operations in their newest and most modern plant at malanpur.
Equipped with state-of-the-art technology and backed by constant investment, this unit
manufactures Eclairs, Gems, Perk and Picnic.
VISION:
Broadening our consumer appeal and extending their reach to newer markets
Developing a successful new product which will stand the test of time and gain a
permanent place in a company’s product portfolio is not easy. Much quoted figures estimate
that it takes in the region of 58 new product ideas to end up with one successful new product
and some people put the initial figure as high as 100. The majority of ideas fail early in the
process – well before they reach the consumer. A further significant proportion fail to move
from the test market into national distribution. With the tremendous investment required for
totally new products, it is essential that the whole project is carefully researched. In fact, it
may take several years for a new product to grow from concept stage to national distribution.
The search for a new product usually beings with an evaluation of the opportunities or gaps in
the market.
Successful new brands are targeted as far as possible to avoid taking market share
from a company’s existing brands. A new sector must be created in the market or the new
product must attack competitors’ brands.
1
Successful new product development is essentially team work involving research and
development, marketing and sales, market research, production, engineering and finance. At
Cadbury, in common with most companies, the marketing role is fulfilled by the
Product/Brand Manager whose function is to coordinate and mastermind the project through
from the initial brief to national launch, until the largest sales tonnage has been achieved. The
initial impetus for embarking on a New Product Development project can be:
The need for market extension abroad, particularly into Asia Pacific, and the demise of trade
barriers.
However, products cannot be simply transferred from one market to another without review
and possible adaptation to suit differing expectations and cultures.
1
CRACKLE 105 GM Rs. 38.00 OT 2.0 Rs. 345.50
1
PERK LITE STRAWBARRY 28 GM Rs. 10.00 CS 19.125 Rs. 182.00
The slogans of advertising are the tools of sales promotion are so important which couples the
customer to purchase the product. Now we are going to discuss all these things one by one
about Cadbury.
Following are a few advertising slogans used by Cadbury for introducing the product to the
customers:-
All these slogans used by Cadbury are beautifully prepared because they can compel the
consumer to buy the product to some extent.
Now we will discuss them in details with the help of which we can easily understand how
these slogans can leave these impression on the customer.
1
The Real Taste of Life :
This slogan was prepared for the first chocolate introduce by the Cadbury first time in India.
The chocolate was ‘Dairy Milk’. This slogan says that there are many types of products
present in the market, they have different taste but Dairy Milk is the best and the true taste of
the life. This slogan also stands for the victory. On electronic media, the advertisement shows
that a cricketer wins the match and after that he and his girl friend eats this product.
Therefore, this stands for victory of any body eats this product will definitely win in his life.
When Cadbury introduced its next chocolate named ‘Perk’ this slogan were used. This
explains that if anybody is hungry and he do not have any thing to eat accept this Perk then he
can have this. This shows that Perk is so good chocolate which can be used as a substitute of
food and is a complete food.
Later on Cadbury came out with new slogan on television; the advertisement shows that few
students are on hunger strike. But they had the chocolate. This shows that nobody can control
himself/herself if this product of Cadbury is lying in front of that person. This means that
Cadbury product is so good that nobody can leave it.
This slogan was used for ‘Bournvita’. Bournvita is full of proteins, vitamins, minerals and all
those necessary things which are useful for our body and mind. Therefore, this slogan stood
best for Bournvita. TAN KI SHAKTI, means the energy to the body. If anybody here this
product, he /she will remain active for whole day. That person will look healthy, active and
will look smart.
When Eclairs toffee came in the market, this slogan was used. Eclairs is a toffee filled with
chocolate. It means that instead of having chocolate you can have eclairs toffee too. It a
person does not want to have 12 pieces of chocolate, can have one or two eclairs toffee.
Nowadays new chocolate has been introduced by the Cadbury and this slogans going on
creating demand for this new product. In this ad we can see that one chocolate falls on a car
and damages the car. This chocolate is so strong due to lots of nuts, caramel etc. etc. present
in this chocolate. This also shows that this is for adventurous people who love thrills,
adventure etc.
1
Cadbury Schweppes pick the world number 3 soda market has aggfed to sell most of its soft
drinks business outside the US to Coca Co. for $ 1.85 billions to finance a head on battle with
Coke in the No. 1 soda makers home market.
The agreements included the Schwoers Dr. Pepper chanda dry and crush brands and
exude South Africa and France the pact which was dependent on regulatory approval was
likely to be concealed in mid 1999 Cadbury said.
The more will allow Cadbury to expand it Dr. Peeper business in US where it derives two-
thirds of its soft drinks sales and was a 15 per cent market share at the same time it get
Cadbury out of markets where it is growing at a slower pace. The shares rose as much as 70.5
per cent or 7.5 per cent or 7.5 per cent 1002.
“This sort out the places where Cadbury’s systems weren’t strong enough to compete with
Coca-Cola,” said Mr. David long an analyst a Henderson Croshtwaite, “they were fighting
with proper for this.
Manufacture
Stockiest/Distributor
Semi-wholesaler
Retailer
User
1
• Business reputation and business standing.
• Business capacity and salesmanship.
• Expertise and previous experience in the line.
• Financial capacity and willingness to invest in the line.
• Credit worthiness.
• Capacity to offer to customers :
Despite intensifying competition for target share and a stream of new products,
pitted against each other, the price line of popular brands of chocolate had move
upward over the past one year.
Prices of key brands like Nestle’s Kitkat and Cadbury’s Dairy Milk have rose by 25
per cent each between November 2001 and November 2002.
Brands such as Cadbury’s Eclairs, where the unit prices is lower, have seen a
sharpener price hike.
A major portion of the price revision occurred in the last part of 2001 and in the
first quarter of 2002.
A sharp rise in cocoa prices and rupee and depreciation escalation in input costs for
chocolate manufacturers in the last leg of fiscal 2001-98.
Whole cocoa, prices have receded from their high after September 2001, rupee
depreciation and the higher incidence depreciation and the higher incidence of excise
duties has kept the price line of chocolates.
The cost of cocoa, the key input, accounts for around 45 per cent of the manufacturing
costs for chocolates production.
Domestic cocoa production (estimated at 4500) to 5000 tonnes for the current year)
has been stagnant and takes are of less than a third of domestic requirements of
chocolate and malted food manufacturers. Manufacturers such as Cadbury and Nestle
India import over half of this cocoa requirements.
International cocoa prices moved up from 140 cents per kg in January 2001 to peak at
190 cents per kg in September 2001, prompting a round or price increase in
chocolates in the last part of 2001.
1
Subsequently cocoa prices have receded to around 150-160 cents per kg and are
expected to rule at these levels in the near term. However, rupee depreciation of
around 17 per cent since September 2001 is likely to have offset the impact of this on
production costs.
The reclassification of the wafer-coated chocolates, making them chargeable to an
excise duty of 18 per cent, against 8 per cent earlier, is also likely to contribute to
price escalation.
The excise authorities have recently passed an order on Nestle, directing it to pay
excise dues at the higher rate of 18 per cent. The matter is now under appeal.
Maximum Retail Price - based excise duties, which have been introduced on
chocolates in the latest budget could also add to the production cost especially in the
premium categories.
Though cocoa prices have extended to rule relatively soft. The price line for
chocolates appears unlikely to come down in the near future.
Internal Factors :
External Factors :
• Market characteristics.
• Buyer’s behavior in respect of the given product.
• Bargaining power of major customers.
• Competitors pricing policy.
• Government controls regulations on pricing.
• Other relevant legal aspects.
• Societal (or social) considerations.
• Understanding, if any reached with price cartels.
1
• A minimum return (or target return) on investment.
• A minimum return on sales turnover.
• Targets sales volume.
• Target market share.
• Deeper penetration of the market.
• Entering new markets.
• Target profit on the entire product line irrespective of profit level in individual
• Products.
• Keeping competition out, or keeping it under check.
• Fast turn around and early cash recovery.
• Stabilizing prices and margins in the market.
HISTORICAL HIGHLIGHTS :
Milk products
Infant milk formulae
Weaning cereals
Culinary products
Beverages
It is the main manufacturing unit of Nestle India Limited. The second factory at Choladi,
Tamil Nadu to produce beverages i.e. 100% EOU for instant tea was set up in 1967.
Instant Coffee
Health Beverages
1
The fourth plant at Samalkha, Haryana, was set u in 1993, to produce :
Weaning cereals
Culinary products
Health beverages
Milk products
Wafers
Waffles
The sixth plant at Bicholine, Goa commenced construction for manufacture of a range of
culinary products and this was expected to be commissioned in the latter part of 1996.
Nestle India, the largest food company in the country is continuously looking at new niches
in the market place for its various products.
In milk products Nestle has made a considerable mark. For instance, the company was the
first to introduce a Dairy Whitener with its product 'Everyday'. And till today that product is a
brand leader despite the presence of a host of other brands in the field. IN the case of
Milkmaid condensed milk, Nestle relaunched the product as desert maker and has seen the
sales graph climbing since.
In baby foods, Nestle has made its strong hold with Lactogen and Cerelac. Nestle is also
popular in pure ghee segment. Its Everyday pure ghee has gained a quite satisfactory market
share, Nestle has also entered into fitness food products. Nestle today is a household name.
Nestle extended the product line in coffee by bringing in Dolco, and then Sunrise.
In 1990, NIL entered the chocolate business introducing Nestle Premium chocolate. Nestle's
products are sold under brand names such as a Milkmaid, Everyday, Cerelac, Nescafe,
Maggi, Lactogen, Eclairs etc. It launched the world famous Kitkat chocolates in 1995. During
the year 1996 Milo the world's largest selling chocolate energy food drink was launched.
According to the chart shown, we can easily known as to which product were launched in
which year:
1962 Milkmaid
1
1964 Nescafe
1968 Lactogen
1972 Ricory
1978 Nestum
1987 Cerelac - Wheat Apple, Wheat Orange, Maggi Sauces, Chilli Garlc, Masala Chilli
1989 Everyday Ghee, Maggi Soups - Tomato, Chicken, Mushroom, Taster's Choice-Leaf
Tea. Sunrise Extra (originally Ricory), Nestogen 2, Sunrise Premium (Originally
Sunrise), Cerelac - Wheat vegetable
1991 Nestle Eclairs, Bar-One, Maggi Soups – Mixed Vegetable, Chicken Noodles,
Nestogen I
1993 Maggi Super Seasoning (Originally Maggi Cubes) - Chicken, Vegetarian Lemon
Malasa, Nestle Bonus, Polo, Bar-one-Roasted Peanut, Taster's Choice - Dust Tea,
Contamina - Snack Pressing
1994 Cerelac - Wheat Soya, Milkmaid Desert Mixes - Custard Powder, Gulab Jamun,
Shahi Rabri, Kesar Kulfi, Maggi Tonite's Special - Butter Chicken Gravy Sauce,
Karahi Paneer Gragvy Sauce, Pizza Sauce Topping, Nescafe Pre-Mix, Everyday
Pre-mix
1995 Nestle Bonus - Chocolate, Nestle Kitkat, Toffo - Coffee, Elacichi, Milk, Polo-Paan
1996 Nestle Milo, Milkmaid Dessert Mixes – Kalakand, Maggi Pickles - Lime, Lime
Sweet, Mango, Mango Punjabi, Mixed, Maggi Dosa Mixes - Masala Plain,
Sambhar, Maggi Soups - Chicken Sweet Corn, Hot & Sour and Rasam, Polo -
Spearmint, Cerelac - Rice, Taser's Choice - Tea Bags.
1997 Mithai Magic, Splash Candy, Butter Scotch Candy, Toffee-Elaichoo, Koffees,
Polo-Fruit Rings, Extra Strong, Maggi Rich Soups, Nestea, leaf/Dust Tea, Nescafe
3-in-1, Teamate Creamer, Maggi Pickles, Variants, Maggi Macroni Snack, Cerelac
- Wheat Banaa, Wheat Honey
1
MORE THAN A MOUTHFUL - CHOCOLATE INDUSTRY :
The Indian chocolate market is getting bigger and better. While on one hand, the premium
segment (comprising imported varieties) is opening up, on the other, companies like Cadbury
India are launching indigenous products made to international standards. Of the 20,000-tonne
chocolates market worth about Rs. 400 crores, Cadbury accounts for about 70 percent,
followed by Nestle, with a share of around 20 percent. Amul has five per cent of the market,
with minor players taking the rest. The battle, though, is between Cadbury and Nestle.
Though much smaller portfolios, Nestle is putting up a touch fight.
5 STAR:
ECLAIRS:
Competing in the chewable toffees segment, Eclairs was relaunched during the mid-nineties
with a new name, Dairy Milk Eclairs. According to Rajiv Bakshi, Managing Director
(designate), Cadbury India Ltd, growth in this segment is very high. It is worth over 4000
tonnes now. Nestle also a presence here with Nestle's Eclairs.
1
GEMS:
Broadcasting Gems, though, did not prove to be a feasible proposition for Cadbury. Targeted
at children under 12 years with the 'Gems Bond' advertising, Cadbury decided to woo
teenagers with the 'Smart'. Very smart campaign. But now, the company is re-targeting
children with its animated commercial. Gems is the best brand to speak to children. Colorful
chocolate buttons appeal most to children and that is why we are re-targeting children.
While Cadbury has successfully relaunched a host of its sub-brand, it has not been able to pay
attention to brands like Mr. Pops lillipop. As you grow and add more brands, the ability to
spend on brands becomes lower. Therefore we have selected a few critical brands to do a
paper job.
POLO:
POLO is one of Nestle's key strategic confectionery brands worldwide, and represents
Nestle's first entry into the large 50,000 tonne p.a. (organized sector) Indian Sugar
confectionery market.
ON TEAMATE:
It consists of an ORG synopsis, its analysis and a report on the various studies present within
the organization to come out with facts and hypotheses which may be helpful in facilitating
the launch of Teamate.
Sagar
Amulya
Milkfood
Sapan D. Special
Anikspray
EDW
Amul WMP
North :
Sagar
Amulya
Sapan D Special
1
East :
Amulya
Milkfood
Sagar
West :
Amulya
Indana
EDW
Amul WMP
South :
Amulya
Sagar
Sapan Special
North :
Milkfood
Amul WMP
Anikspray
EDW
East :
Sapan D Special
Anikspray
Indana
EDW
West :
Anikspray
Span D Special
South :
EDW
1
Brands Dominant (outlet wise distribution i.e. major % of sales coming from a particular
kind of outlet):
Groceries
Milkfood
Indana
Anikspray
Span D Special
General Stores
Amul WMP
Amulya
Sagar
Chemist
Sagar
Amul WMP
Grocer
EDW
Sapan D Special
Amulya
Anikspray
General Stores
EDW
Amulya
Amul WMP
Anikspray
Chemist
EDW
Amulya
Sapan D Special
Amul WMP
1
Outlet wise Distribution
Sagar
Amulya
Milkfood
General Stores
Sagar
Amulya
Chemists
Sagar
Amulya
Sapan D Special
Declining Brands
Grocers
Anikspray
EDW
General Stores
Indana
Anikspray
EDW
Amul WMP
Chemists
Indana
Anikspray
East
South
North
West
1
South
West
East
North (declining)
DIRECT COMPETITION
At present there are three major players Nestle, Cadbury’s and Amul in the Indian Chocolate
market. Campco initially tried to break into market but failed. Brief profile of the same has
been entailed below:
Cadbury’s India Ltd, has been in India since 1948. Its brands: Dairy Milk, 5 Star, Gems and
Chocolate Eclairs are the households names in India today. In all the segments i.e. moulded
chocolates, count chocolates and panned chocolates, it is undoubtedly the market leader.
Cadbury’s has its manufacturing units at Thane (Mumbai), Malanpur, Indori (near Pune),
Mithuri and Kolapur. It has a strong distribution network with about 500 distributors in North
India and more than 3 lac retail outlets being serviced all over India.
The Company launched Perk, a wafer enrobed chocolate in 1995. This was reactionary to the
launch of Kit Kat and has been able to counter competition.
CDM, the oldest of Cadbury’s brands was launched in 1956. In the early 90s, a rise in the
prices of cocoa, increase in the excise duty and a fall in the demand inspired the idea of
repositioning. Two years in the process after relaunch Cadbury’s Dairy Milk’s market share
stood at 25 percent with sales rising by an average 40 percent per annum.
Besides CDM Cadbury’s has a number of endorser brands such as Fruit’n’Nut, Nut Milk etc.
Even though contribution of these brands to the company’s bottom-line is very small, they are
required in order to make a complete portfolio of offering.
The Company developed a concentration strategy on CDM, Five Star, Cadbury’ Gems,
Cadbury’s Eclairs, Perk and the latest of its offering Picnic (which has drawn a good response
in the market).
The Company has also identified sugar confectionery, as a growth sector. Its first offering
Googly.
1
Nestle India Ltd. has been in India for more than 35 years now. The world’s largest marketer
of chocolates (became world number one when it acquired Rowntree Macintosh of the UK) -
Nestle, made its foray in the Indian chocolate Industry in November 1990. It launched three
products - the milk chocolate, the bitter chocolate and Crackle (a crunchy chocolate) - in the
slabs category and Bar One in count lines.
Cadbury’s was quick to react, and launched a whole host of products in succession: All Silk
milk chocolate, Creamy Bar, and a new version of 5 Star.
Nestle, in the beginning did not have its own manufacturing facility. It had an alliance with
Campco to manufacture chocolates. Later, in 1995 a state-of-art manufacturing plant was set
up at Ponda, Goa at a cost of Rs. 50 crores. This unit took care of the entire Kit Kat
production. However, the production tie-up with Campco still continued.
Kit Kat, one of world’s most popular chocolate, was launched in India in 1995. Within
months of its launch, it fulfilled every target Nestle had set. Its launch was accompanied by
the launch of Cadbury’s Perk in order to counter Kit Kat and safeguard the flagship brand –
CDM. Kit Kat has been able to define a new segment in the industry in the form of the wafer
enrobed any time snack.
Kit Kat outsells Perk in the outlets where both are available. In the crucial markets of
Bombay and Delhi both are running neck-and-neck. It has even said to have threatened the
mother brand, Cadbury Dairy Milk.
Brand Launch
(Sugar Candies)
Future Outlook
Focus will be on chocolates and confectionery followed by culinary products which include
the Maggi range and coffee.
Amul
1
Gujarat Cooperative Milk Marketing Federation (GCMMF) launched the Amul Chocolate
way back in 1974. With its milk chocolates, Badam Bar, Crunch and Fruit n Nut has a market
share of about 5 %.
Due to lack of focus and with multinationals spending huge amounts on advertisements its
market share has been falling.
GCMMF is involved in a large number of products, of which chocolates constitutes just 1-2
%. The company is not concentrating much on its chocolate business. As of now,
Amul chocolates are not on company’s focus.
Interestingly, Kaira District Cooperative Milk Producers Ltd. (KDCMPL) - the manufacturer
of Amul chocolate - is selling whatever it produces. Limited capacity is also a reason for the
share it has.
The only other organized player in the market is Campco, which has an insignificant share of
the market. It is supplying its production to Nestle. Apart from this Campco did come up with
its new brands like Treat. But crunch of resources grossly effected the pace of the company
and is hardly to be heard of today.
IMPORTED BRANDS
Considering the high growth potential, various multinationals wanted to set up facilities in
India (Mars being one of them). However, shortage of cocoa, seasonality in demand, and the
absence of a proper cold chain deterred them from investing in India. The government also
moved the import of chocolates from special item list to open general license category. The
duty structure was also reduced. This resulted in making import of foreign brands easier and
price competitive.
Due the above, Mars Inc.-the US giant, who had decided to set up facilities in 1995(the site
for which was also selected), decided to postpone its investment plans.
An alternate strategy was formulated to import Mars chocolate brands into India through
Sarura Business (I) Ltd. Sarura, which came into existence about an year ago, imports Mars
brands and sells through its own distribution network. Highlights of the strategy being
followed are mentioned below:
1
Imports Mars brands every 40 days, after careful demand analysis. Takes 20 to 22 days to
reach India.
Duty Structure
Customs Duty 40 %
Special Duty(Surcharge) 3%
The import duty on finished product is expected to come down to 20-25 percent in a phased
manner.
Distribution Logistics
The company has its operations being controlled from Delhi. A typical FMCG distribution
chain is being utilised. This includes-
Distributors
Consumers
In Delhi, the company reaches the retailers and the wholesalers on its own. It operates about 3
vans, and each retailer is serviced twice a month.A soft launch has been done in North India.
The following States have been covered in the first phase (including the distribution chain):
Assam
- Guwahati 1 Distributors
1
Other Areas
Nestle has also recently launched its foreign brands by importing them into India. These
include Lion and After Eights.
The future of this segment is highly dependent on extraneous factors like, government
policies regarding import of chocolates and the duties structure therein. Any movement can
make these players price competitive. In December 1997, a no. of products reaching expiry
are said to have been dumped into India due to favourable import policy (this is when foreign
brand imports like Sarura’s products came into the market).
INDIRECT COMPETITION
Since the target audience includes, consumers of not only chocolates but also of biscuits and
confectionery, it faces indirect competition from these product categories. Also, other
confectionery products like toffees, candies etc have proved to be indirect competition
(however would be limited since we are targeting small kids segment).
AMUL(GCMMF) :
Amul was set up in 1946 and its full form is Anand Milk- producers Union Ltd. The Brand
Amul is a movement in dairy cooperative in India. The management of the brand name is
done by the Gujarat Co- operative Milk Marketing Federation Ltd (GCMMF) which is a
cooperative organization.
Location
1
Amul is located in the town Anand which is in the state of Gujarat and it has set up itself as a
model for development in the rural areas. For Amul Brand has started the Revolution White
of India which has helped to make the country the biggest manufacturer of milk and its by
products in the whole world. Amul has around 2.6 million producer members and the total
capacity for handling milk is around 10.16 million liters every day. The brand's capacity for
milk drying is around 594 Mts. each day and its capacity for cattle feed manufacturing is
about 2640 Mts. each day.
Product Portfolio
Amul is the biggest brand in the pouched milk sector in the world and in India it is the biggest
food brand. Amul's range of products includes milk, ghee, milk powders, curd, ice cream,
paneer, cream, chocolate, cheese, butter, and shrikhand.
Brand Umbrella
The various brands of Amul's bread spreads are Amul Lite, Amul Butter, and Delicious Table
Margarine.
• The Brand Amul's milk drinks are sold under various names such as Amul
Kool, Amul Kool Cafe, Kool Koko, Amul Kool Chocolate Milk, and Amul Masti
Spiced Buttermilk.
• Amul's powder milk are sold under many names like Amulya Dairy Whitener,
Sugar Tea Coffee Whitener, Sugar Skimmed Milk Powder, and Amul Instant Full
Cream Milk Powder.
• The brand's cheese are also sold under various names such as Gouda Cheese,
Amul Cheese Spreads, and Amul Emmental Cheese.
• Amul Brand's desserts are sold under many names like Amul Basundi, Amul
Lassee, Gulab Jamun Mix, Amul Shrikhand, and Amul Ice Creams.
Business Markets
Amul exports its products to various countries such as USA, Australia, Mauritius, China,
Hong Kong, Singapore, UAE, and Bangladesh.
Awards
The Food Brand Amul has received various awards such as the Ramkrishna Bajaj National
Quality Award in 2003, Award International Cio 1000 for Resourcefulness, and also the
Rajiv Gandhi National Quality Award in 1999.
Company Financials
1
Year Rs (million) US $ (in million)
1999-00 22185 493
2000-01 22588 500
2001-02 23365 500
2002-03 27457 575
2003-04 28941 616
2004-05 29225 672
2005-06 37736 850
2006-07 42778 1050
2007-08 52554 1325
2008-09 67113 1504
LIABILITIES
200,000 shares@Rs.1000 200.00 200.00 200.00 200.00 500.00 500.00
Paid up Share Capital
80,000 shares @Rs.1000 69.20 80.00 80.10 130.00 200.00 200.00
Reserves and Other Funds
Reserve Fund 16.65 18.62 21.98 42.43 83.09 115.62
General Fund 19.96 20.18 20.90 72.37 157.75 225.04
Grant from NDDB under 1.04 1.04 1.04 1.04 0.01 2.04
Operation Flood
Grant from NDDB for 243.52 300.76 314.86 321.08 177.03 150.92
Gandhinagar dairy Project.
1
Export Turnover Allowance 0.04 0.04 0.04 0.00 0.00 0.00
281.20 340.64 358.82 436.92 417.88 493.62
Loans and Advances
Cash Credit 9.41 36.46 52.45
From NDDB under Operation 3.75 3.75 3.73 3.70 3.51 0.00
Flood
From NDDB for Gandhinagar 610.77 817.31 546.42 579.63 547.33 555.06
dairy Project
614.53 821.06 559.56 583.33 587.30 607.51
Current Liabilities&Provisions
Sundry Creditors 574.99 310.83 212.62 271.82
Outstanding against purchases 728.37 496.80 1185.78 1365.78
Outstanding against expenses 81.53 65.42 106.20 116.15
1290.81 1025.89
Deposits 7.59 9.84 11.90 50.25 70.70 108.71
Provision for Income Tax 32.38 32.38 32.38 51.58
Provision for dividend 5.54 9.06 9.61 14.10 21.90 30.00
For education Fund 0.16 0.30 0.30 0.30 0.30 0.30
Carried to General & Reserve 2.19 4.08 71.88 63.44
fund
1432.90 929.02 1630.67 1933.42 1383.71 1164.90
Total 2,397.67 2,170.41 2629.15 3083.68 2588.89 2466.03
1
NESTLE BALANCE SHEET
Dec ' 08 Dec ' 07 Dec ' 06 Dec ' 05 Dec ' 04
Sources of funds
Owner's fund
Equity share capital 32.18 33.20 34.36 35.71 35.71
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 432.22 372.94 357.73 398.10 360.28
Loan funds
Secured loans 32.02 1.28 3.26 3.71 0.77
Unsecured loans 9.68 7.48 6.75 4.51 6.27
Total 506.11 414.90 402.10 442.03 403.03
Uses of funds
Fixed assets
Gross block 586.94 544.77 430.21 395.50 349.69
Less : revaluation reserve - - - - -
Less : accumulated depreciation 335.55 299.18 265.13 234.88 203.76
Net block 251.39 245.59 165.08 160.62 145.93
Capital work-in-progress 123.86 25.58 82.18 29.55 21.41
Investments 2.92 298.49 253.42 258.21 232.30
Interpetation: The Balance sheet income in march 2005 was 403.14 it increased in the
succeding years 2006, 2007,2008&2009 as 442,402,414,506 this increasing performance
shows that financial operation are incresed in wide as it can be related with productivity and
sales, the company has increased share in market due to rigid competitors.
1
AMUL(GCMMF) BALANCE SHEET
Dec ' 08 Dec ' 07 Dec ' 06 Dec ' 05 Dec ' 04
Sources of funds
Owner's fund
Equity share capital 96.42 96.42 96.42 96.42 96.42
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 376.93 322.01 292.47 257.72 222.99
Loan funds
Secured loans 0.82 2.87 16.27 14.30 7.91
Unsecured loans - - - - -
Total 474.17 421.30 405.16 368.44 327.31
Uses of funds
Fixed assets
Gross block 1,404.85 1,179.77 1,058.27 942.40 838.16
Less : revaluation reserve - - - - -
Less : accumulated depreciation 651.85 577.96 516.48 468.63 440.94
Net block 752.99 601.81 541.80 473.77 397.22
Capital work-in-progress 109.17 73.70 38.24 22.83 34.09
Investments 34.90 94.40 77.77 104.43 154.86
Interpretation: The Balance sheet income in march 2004 was 327.14 it increased in the
succeding years 2006, 2007,2008&2009 as 368,405,421,474 this increasing
performance shows that financial operation are increased in wide as it can be related
with productivity and sales, the company has increased share in market due to rigid
competitors
1
COMPETITION
1
Dairy
Dec '08 Dec '08 Mar '09 Mar '09 Mar '09
Sources Of Funds
Total Share Capital 96.42 42.06 23.89 18.20 68.90
Equity Share Capital 96.42 42.06 23.89 18.20 28.90
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 40.00
Reserves 376.93 718.82 800.65 13.86 533.32
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Networth 473.35 760.88 824.54 32.06 602.22
Secured Loans 0.82 0.00 2.20 60.24 2,449.84
Unsecured Loans 0.00 0.00 22.97 30.56 525.00
Total Debt 0.82 0.00 25.17 90.80 2,974.84
Total Liabilities 474.17 760.88 849.71 122.86 3,577.06
Nestle GlaxoSmith Britannia Kwality Rei Agro
Con Dairy
Application Of Funds
Gross Block 1,404.85 539.47 511.50 21.38 426.13
Less: Accum. 651.85 329.24 233.67 12.53 77.47
Depreciation
Net Block 753.00 210.23 277.83 8.85 348.66
Capital Work in Progress 109.17 16.33 6.02 0.22 26.98
Investments 34.90 0.00 423.10 0.00 110.79
Inventories 434.91 277.17 253.63 33.52 2,310.08
Sundry Debtors 45.59 43.25 49.61 156.70 589.16
Cash and Bank Balance 12.66 20.48 40.56 0.30 9.97
Total Current Assets 493.16 340.90 343.80 190.52 2,909.21
Loans and Advances 162.67 73.61 209.61 21.63 468.77
Fixed Deposits 181.03 450.50 0.24 1.70 7.88
Total CA, Loans & 836.86 865.01 553.65 213.85 3,385.86
Advances
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 582.44 268.24 290.06 93.17 255.45
Provisions 677.32 62.45 147.48 6.89 39.78
Total CL & Provisions 1,259.76 330.69 437.54 100.06 295.23
Net Current Assets -422.90 534.32 116.11 113.79 3,090.63
Miscellaneous Expenses 0.00 0.00 26.64 0.00 0.00
Total Assets 474.17 760.88 849.70 122.86 3,577.06
1
Contingent Liabilities 84.90 72.85 162.96 46.82 4.63
Book Value (Rs) 49.09 180.92 345.14 17.62 19.45
1
AWARENESS - PURCHASE PREFERENCE
90
80
70
60
50
40
30
20
10
0
t M s t l r s'
ic u D d a kr u at e
n
k
a h
c yr el
t
n N C n Kt e m
ic ' ar i P A S O re n
ur u
b
s
e
P n K 5 r B N
ti b a C d
ur n B a
gi C
F er
o
F
Purchase preference
90
80
80
70
70
60 60
50 50
40
40
30
30
20
20
10
0 10
t
l
u r a M cin tu s kr hc e 's let
m ta0 Kt D c N dn e n n ry s
S i C i ' a P ur O u e
A 5 KAdvertising
P n Word r r b N PackagingDealer
of CMouth
Attractive Shop Display
Family, f riends, relatives
it B a d
B a
ru ng C
F i
er
o
F
1
What influenced you to buy the selected brand?
PURCHASE BEHAVIOUR
70
60
90 No
50 10%
80
40
70
30 60
50
20
40
10 Yes
30 90%
0 20
Occasion led As a gif t Casual Purchase Energy Snack
10
0
Spouse Friends Parents Children Relatives
IMPULSE DRIVEN
1
Yes
10%
No
90%
No
24%
Yes
76%
1
IMPORTANCE OF ATTRIBUTES - PERCEPTUAL MAPS
700
600
500
400
300
200
100
0
Taste Quality Price Flavo ur Packag in g Ad d-o ns Brand
Imag e
Attributes 1 2 3 4 5
1
PRODUCT RELATED
90
80
70
60
50
40
30
20
10
0
ci t M s t kr l r k 's
n u D d a u at e
n a h
c yr let
ci N C n Kt e m er n u s
' ar i P A S O ur e
P n K 5 r B b N
it b a C d
ur n B a
ig C
F er
o
F
70
60
50
40
30
20
10
0
15/25 g m s 35/40 g m s 80 g m s S up er s av er- 200 g m s
105 g m s
PRICE RELATED
1
Below Rs. 10/ -
14%
High
Expensiv
e…
Cheap
Reasonab 5%
ly OK
76%
1
Yes
No 52%
48%
Price sensitivity (Elasticity). If price of your favourite brand is reduced, you will buy
more of it
Price sensitivity. If the favourite brand is few Rs. expensive would you go for it?
No
14%
Yes
86%
1
ADVERTISING/PROMOTION RELATED
80
70
60
50
40
30
20
10
0
Perk KitKat CDM Picnic Amul 5 Star
250
200
150
Drop the idea
19%
Go to another
0
retailer
29%
Perk KitKat CDM Picnic Amul 5 Star
1
If your want to buy a wafer chocolate, say KitKat and if it is not available, you would
settle for a Bar/Moulded chocolate say 5 Star or CDM
No
33%
Yes
67%
1
No
24%
Yes
76%
Are you happy with the kind of chocolate brand available in India
1
FINDINGS
Marketing
o Growth of other lifestyle foods such as malted beverages and milk food have actually
o declined by 3.7 per cent and 11.7 per cent, however the CHOCOLATES continue to
grow at the rate of 12.6%.
o Medium size retailers sell chocolates of about Rs. 400 – Rs. 800 per week while big
retailers sell chocolate worth Rs1000 or more per week.
o The temperatures in India are much higher than that of the European countries. To
prevent the chocolate from melting and to enable shape retention under such high
temperatures the recipe ofthe chocolate is adapted to the Indian climate. Therefore the
milk fat content in Indian chocolates is lesser than that of European chocolates and hence
they taste different.
o Successful new brands are targeted as far as possible to avoid taking market share
from a company’s existing brands.
o Sales of the Indian chocolate industry would rise from $175/$180 million by the year
2000 and to $450 million by the year 2008 Per capita chocolate consumption continues to
be low at about 200g per person, being mainly consumed in urban areas
o By the end of the eighties, Cadbury’s still ruled the roost with over 80 percent market
share. And though several brands - like Amul and Campco - tried to break into the
market, none of them had succeeded in shaking the leader’s grip.
1
Improve the performance Appraisal system - it’s process, skill & usage
Introduce a Potential Appraisal System
Improvements in internal & external Training & it’s effective utilisation. Training
need identification
Realigning organisation culture
Performance linked reward and recognition system
Career planning & promotion policy
Revised recruitment policy
Competency mapping
Financials
The Balance sheet income in march 2005 was 2,397.67 it IS FLUCTUATING in
the succeding years 2006, 2007,2008&2009 as 2,170,2629,3083,588,2466 this
UNSTABLED performance shows that financial operation are incresed in wide as
it can be related with productivity and sales, the company has DECREASED share
in market due to rigid competitors
The Balance sheet income in march 2005 was 403.14 it increased in the succeding
years 2006, 2007,2008&2009 as 442,402,414,506 this increasing performance
shows that financial operation are incresed in wide as it can be related with
productivity and sales, the company has increased share in market due to rigid
competitors.
1
SUGGESTIONS
With cocoa prices being traded, both physically and in futures market, chocolate
makers are not the only consumers of cocoa. Investor demand, as a result, increased
the pressure on cocoa supply, thus driving up the prices.
The chocolate makers are pointing fingers on alleged ’speculative buying’ on the part
of hedge funds (who employ extremely aggressive and unhedged positions and
strategies – see the article on hedge funds below).
Another reason may be that due to uncertainties in the global stock markets, hedge
funds have turned to agricultural commodities, for instance, cocoa and others.
It may appear that this conundrum on soaring cocoa prices isn’t because of an
imbalance between demand/supply. So there might be no apparent reason for the
rising chocolate/cocoa prices.
Other commodites such as sugar, oil and milk may have risen thereby increasing
chocolate prices and therefore, everyone is shifting blame on cocoa producers.
Yes, Cadbury did make some considerable effort to pursue practices of 'fair trading'
with peasant producers. Nonetheless, it was all too easy to prove that Cadbury the
family, and Cadbury the firm, fell short of the human perfection which both their
political critics, and indeed subsequent historians, have chosen to demand of them.
I think it follows from this, and from the subsequent behavior of Cadbury on the Gold
Coast, that they were indeed morally better -- far better -- than most capitalists.
The Cadbury family, as witness their bountiful good works and their well-intentioned
construction of Bournville, a model suburb for their workers in Birmingham, were
solid, good and worthy citizens and employers.
1
CONCLUSION
In fact, Cadbury’s had become a brand virtually generic to chocolates. Then chocolates
were used to reward and reinforce positive behaviour and hence were categorised as a luxury
reserved for special occasions. This was, a stark contrast to the west where chocolates were
But constant working by players like Cadbury’s (re-launch of Cadbury’s Dairy Milk targeting
adults and as a casual any-time buy) and Nestle towards exploding the myth that chocolates
are meant for children only, has resulted in the segment booming.
1
BIBLOGRAPHY
www.moneycontrol.com
www.moneyrediff.com
www.scribd.com
www.yahoofinance.com
www.cardburyltd.com