Indian Confectionary Market The confectionery industry in India is the largest among the food processing industries.

Despite its vast population, Indias confectionery market is still very small. With a population about five times larger than the US, the volume size of its confectionery market is more than 20 times smaller. The market is dominated by candies and toffees segment followed by chocolate segment

Composition of Indian Confectionary Market

Breath Freshners 5% Chewing Gum 12% Chocolates 16% Others 17%

Candies and Toffees 50%

Source: Industry experts and leading manufacturers estimates, Promars trade interviews extracted from the market for confectionery products in India by National Confectioners Association

Chocolate Market in India Chocolate market is estimated to be around 1500 crores growing at 18-20% per annum. Cadbury is the market leader with 72% market share. Though there is still a large market which is untapped. Owing to the fact that over 70 per cent of the consumption takes place in the urban markets only and the Indian market is predominantly driven by the concept of consuming Sweets, there is a huge potential in this market when compared to the west. The per capita consumption of chocolate in India is 20 gram compared with 7 kilograms in developed markets such as the United Kingdom.

Sales of different types of Chocolates in India

Plain dark 8% Plain White 4%

Source: Euromonitor

Market Share of Chocolate Industry

Amul 4% Others 5%

Nestle 19% FilledWafer 28% Plain Milk 60% Cadbury India 72%

Cadury India Ltd. Overview

Cadbury India Ltd, a part of Krafts food Ltd., operates in five categories Chocolate confectionery, Beverages, Biscuits, Gum and Candy. In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over the years. Some of the key brands are Cadbury Dairy Milk, Bournvita, 5 Star, Perk, Bournville, Celebrations, Gems, Halls, clairs, Bubbaloo, Tang and Oreo. It began its operations in 1948 by importing chocolates. Cadbury India enjoys a value market share of over 70 percent in the chocolate category and their brand Cadbury Dairy Milk (CDM) is considered the "gold standard" for chocolates in India. The pure taste of CDM defines the chocolate taste for the Indian consumer. Since the launch of Cadbury Dairy Milk (CDM) 1948, the word Cadbury has become synonymous with chocolate. CDM remains at the top of the Indian chocolate market not only because of its most delicious, best tasting chocolate but also because of its memorable communication. The chocolate section currently contains the following products: Dairy Milk, 5 Star, Celebrations, Bournville, Perk, gems and the recently launched dairy milk shots. Comsumer Behavior In order to learn about the consumer behavior, two types of researches were used primary and secondary. Primary research included an online survey and direct interviews of the consumers. Secondary research included the data and facts collation from the resources available online.

Demographics Age-wise Profile

Consumer behavior has been derived from the responses of 148 respondents belonging to different age groups.56% of the respondents belonged to the agegroup of 20-35 years and 27 % belonged to more than 35 years while respondents were less than 20 years old. Awareness From the survey, it is evident that all the respondents are aware of the Cadburys chocolates.About 70 % of them are aware because of the ad campaigns of Cadburys and another 18 % have come to know about the Cadburys by word of mouth.

27%

17%

<= 20 20 - 35

56%

>= 35

Source
Ads (70%) W-O-M (18%) Saw in shop (12%) Other (0%)

Frequency Of Purchase Of all the chocolates that Cadburys offers, Dairy Milk is the most sought after with more than half of the consumers purchasing it.60 % of the consumers purchase the chocolates once in a week while 20 % purchase it on a daily basis.This figure is comparatively less for those who purchase it once in a fornight or once in a month.

Consumption

Dairy milk (56%) 5 Star (18%) Gems (8%) Perk (6%) Bournville (4%) Dairy milk silk (4%) Temptations (2%) Celebrations (2%) Weekly (60%) Daily (20%) Monthly (10%)

Frequency

Factors affecting the purchase Advertisements and Attractive packaging are two major factors which are considered by almost 75 % of the consumers while making a purchase. While the ingredients of the chocolate is being considered by a meage 2 % of the consumers. Other factors which affect the purchase of the Cadburys chocolates are occasion, suggestions from friends and use of brand ambassadors.
Factors

Ads (44%) Attractive display (28%) Occasion (14%) Suggestion from frds (8%) Brand Ambassadors (4%) Ingredients (2%)

Brand Loyalty Dairy Milk commands a strong position in the market and demands a strong brand loyalty. About 2/3rd of the consumers do not wish to shift their loyalty when a new chocolate is launched in the market.
Response

No, not at all (60%) I may consider (24%) Cant's say (16%)

Ansoff Matrix To plan the future actions of a company, Ansoff Matrix serves as an important tool to achieve the long term growth through relevant strategies. In case of Cadbury, Ansoff Matrix helps to decide on the launch of a new product, improvement of previous products, deciding how to maximize sales. It helps to focus on the firms present and possible products as well as the markets. The four aspects that Ansoff Matrix shows are Market Penetration, Product Development, Market Development and Diversification. Cadbury can implement these in the following ways: Market Penetration: It is the process of maximising the sales in the existing market through either by gaining competitors customers, improving the product quality or level of service, attracting non-users of the products or convincing current customers to use more of the company's product by advertising, promotion etc. Cadbury is high on market penetration. Chocolates were initially target at children and young kids. Nowadays, Cadbury markets Dairymilk and the target group has changed from children to teens , young generation. This is primarily in the wake of disposable income in the hands of large young population with Pappu Pass ho Gaya campaign..Also, Cadbury celebrations pack has replaced the traditional Mithai ka dabba on the auspicious occasions and celebrations by Cadbury Celebrations pack. Now, targeted at the family audiences with Amitabh Bacchan as Brand Ambassador in Kuch Meetha ho Jaye campaign. Product Development: When a company launches new products in the existing markets,it is said to be in Product Development phase. It is done basically to utilise of excess production capacity, counter competitive entry, maintain the company's reputation as a product innovator, exploit new technology, and to protect overall market share. The example can be the launch of Bournville, a premium dark chocolate aimed at relatively higher earning group that spends on premium chocolates. It is clear from thetag line of the product : You dont buy it you have to earn it.Cadbury recently entered Market Development: When a company launches its product in the new market, it is said to be Market Development. This may entail exploration of new segments of a market, new uses for the company's

products and services, or new geographical areas in order to entice new customers. Recently Cadbury ventured into Latin American Confectionary Market. Diversification: Diversification strategy is distinct in the sense that when a company diversifies, it essentially moves out of its current products and markets into new areas. Diversification is a high-risk strategy as it involves taking a step into a territory where the parameters are unknown to the company. The risks of diversification can be minimised by moving into related markets. Cadbury needs to diversify into the emerging markets with new product suited to that market. Cadbury has been low on Diversification. Cadbury is going full circle by starting Cadbury Cafe in UK from where and what they started with. BCG Matrix BCG Growth-Share Matrix happens to be one of many of BCG's strategic concepts the organisation developed in the late 1970s. It is a management tool that serves four distinct purposes it can be used to classify product portfolio in four business types based on Stars, Cash Cows, Question Marks and Dogs.The BCG Growth Matrix share is based on two dimensional variables: relative market share and market growth. They often are pointers to healthiness of a business.
Stars

Stars are leaders in high growth markets. They tend to/should generate large amounts of cash but also use a lot of cash because of growth market conditions. Cash product for Cadbury can be 5 Star. Since years, it has captured the fantasy of children. It continues to capture the imaginations of complete family primarily targeting the young consumers. Cash Cow These products are said to have high profitability, and require low investment for the fact that they are market leaders in a low-growth market. This viewpoint is captured by the founders themselves. The cash cows fund their own growth. A product from Cadbury that tends to be promoted in a way that it has become a Cash Cow is Bournvita. Question Marks Question Marks have not achieved a dominant market position, and hence do not generate much cash. They tend to use a lot of cash because of growth market conditions. Temptations is a product that is presently consuming large resources. It is as of now an entrant into the race marred by greater no. of competitors. Dogs Dogs often have little future and are big cash drainers on the company as they generate very little cash by virtue of their low market share in a highly low growth market. Gems has not been able to capture the imagination of Indian Consumer as its other products have done so far.

PORTER FIVE FORCES ANALYSIS AND APPLICABILITY TO CADBURY Porter developed his Five Forces analysis in framework of business strategy

The threat of the entry of new competitors-LOW Group opinion on Cadbury: As a product Cadbury has established itself as a brand that it has become very difficult for any of other chocolate maker to enter into this market which is evident from its market leadership. Fear of threat of new entrant for Cadbury is low. Moreover, its distribution network is so strong that it is easily available in even remotest part of country. Customer loyalty is further strengthened by unique advertisement which associates customers sentiments with product. Economies of Scale are achieved by large scale selling. The threat of substitute products or services-MODEATE Group opinion on Cadbury: Though India still has one of the lowest per capita consumption of chocolate as compared to other countries the challenge lies ahead of Cadbury is to convert Indian taste for sweets to taste for chocolate. Alternate product could be from other players. Thus the challenge is to maintain the quality, as well as to make chocolate nutritious as it is perceived as unhealthy by most of parents. The bargaining power of customers (buyers)-LOW Group opinion on Cadbury: As the business enjoys the market leadership, therefore it almost operates in monopoly market where the price is not influenced by customer making the product inelastic. Moreover, the customer doesnt have too much choice as far as quality is concerned. They have been successful in retaining customer through pull market strategy. Business volume is boosted by launching 5 Rs pack, chocolate ladoo/shot and launching of celebrations for festive purpose .Presnce cross premium category lie silk and Bourneville. The bargaining power of suppliers-Moderate Group opinion on Cadbury: To ensure uninterrupted supply of essential element of chocolate which is cocoa has supported the cocoa farming and making it profitable for farmers across 4 southern states. They provide subsidized seeds, tech knowhow, and frequent meeting with farmers to resolve related issues. Though this seems good but regional concentration of suppliers is not good for their business, they should look for alternative sites in order to diversify their suppliers. Any turmoil among farming community or across southern regions can impact the business.

SWOT analysis
Strengths
Strong brand Large Target Market Adapts easily, repositions quickly as seen from its varying advertising campaigns through the years, associating with masses, adults, celebratory occasions, children, togetherness, achievement etc

Weaknesses
Long term product storage and quality deterioration Health and safety concerns - 2006 salmonella scare, 2007 - labeling error, damaged the brand Strong presence only in US, UK and India, needs to expand among other countries

Opportunities
Expansion into global markets Continuous growing market for chocolates Untapped rural market Sugar-free category Move production and operations

to

low

cost

countries

Threats
Intense competition from branded and local manufacturers Substitutes such as sweets Rising raw material prices Difficulty in diversifying in salted snacks as Cadbury is associated with sweetness Rising obesity and health consciousness makes the consumers move to healthy foods, away from Cadbury