MARKETING STRATEGIES OF CADBURY INDIA LIMITED.pdf

PROJECT REPORT 2007

MARKETING STRATEGIES OF CADBURY INDIA LIMITED

.

Submitted for the partial fulfillment of the requirement for the award of MASTER OF BUSINESS ADMINISTRATION

SUBMITTED TO MR. SUNIL V. DESHPANDE

SUBMITTED BY ATUL KUMAR CHAUBEY

ASSO. DEAN

Roll No. : 0615270024

MIMT GR. NOIDA

M.B.A. 3RD SEM.

CERTIFICATE

This is to certify that the project titled “Marketing Strategies of Cadbury India Limited” is a bonafide work carried out by Mr. Krishan Kant in partial fulfillment of the requirement for the award of Bachelor of Business Administration approved by the C.C.S. University under our guidance and direction.

Internal Guide : Dr. Alok Gupta

External Guide : Ms. Smita Sharma

Acknowledgment I am thankful to Ms. Smita Sharma (Brand Manager : New Delhi Branch of Cadbury) for providing me important information essential for the successful completion of the project. I am also extend heartiest thanks to __________ (Internal Guide) who initiated this interesting project and helped us solve all the difficulties confronted at various stages.

Atul Kumar Chaubey

INDEX S. NO. 1.

CONTENTS Executive Summary

2.

Introduction

3.

Company Profile

4.

Objective of the project

5.

Research Methodology

6.

Data analysis and Findings

7.

Conclusion

8.

Suggestion

9.

Bibliography

10.

Questionnaire

EXECUTIVE SUMMARY The Cadbury‟s India‟s number one chocolate is able to share with their market insights based upon unparallel breath of chocolate experience.

The merge in 1969 with Schweppes and the subsequent development of the business have led to Cadbury Schweppes taking the led in both, the confectionery and soft drink market intech UK and becoming a major force in the international market. Cadbury Schweppes today manufactures product in 60 countries and a trade in staggering 120. This project is a sincere effort to look for the market potential in chocolate and confectionery industry.

A descriptive research

procedure had been applied to come to the conclusions of the project. A detailed questionnaire had been prepared and the responses of the concerned people had been collected for the analysis. The project later concluded in recommending the market potential of the chocolate and confectioneries.

INTRODUCTION The Cadbury‟s Inc has taken the opportunity to offer us a broader view of chocolate category. The Cadbury‟s India‟s no.1 Chocolate is able to share with their market insights based upon unparalleled breath of chocolate experience. Cadbury has grown from strength to strength with new technologies being introduced to make the Cadbury confectionary business, one of the most efficient in the world. The merge in 1969 with Schweppes and the subsequent development of the business have led to Cadbury Schweppes taking the led in both, the confectionary and soft drink market intech UK and becoming a major force in the international market. Cadbury Schweppes today manufactures product in 60 countries and a trade in staggering 120. The Cadbury story is a fascinating story of a family business that grew in one of the biggest, most loved chocolate brand in the world. A story that you will remember as the story of “The taste of life”.

OBJECTIVE OF THE PROJECT

My main objective of the study on this project is to demonstrate the marketing strategies of Cadbury India Ltd. And to arrive at my findings, I have done few analysis:(a) SWOT Analysis (b) PEST Analysis And also 5 P‟s of Marketing:-



Product



Price



Physical Distribution



Promotion



Positioning

RESEARCH METHODOLOGY Achieving accuracy in any research requires in depth study regarding the subject. As the prime objective of the project is to compare Cadbury with the existing competitors in the market and the impact of Nestle on Cadbury, the research methodology adopted is basically based on primary data via which the most recent and accurate piece of first hand information could be collected. Secondary data has been used to support primary data wherever needed. Primary data was collected using the following techniques Questionnaire Method Direct Interview Method and Observation Method The main tool used was, the questionnaire method. Further direct interview method, where a face to face formal interview was taken. Lastly

observation

method

has

been

continuous

with

the

questionnaire method, as one continuously observes the surrounding environment he works in. Procedure of research methodology # Target geographic area was Delhi. NCR. #

To

these

geographical

area

questionnaire

was

given,

the

questionnaire was a combination of both open ended and closed ended questions. # The date during which questionnaires were filled was between six week.

# Some dealers were also interviewed to know their prospective. Interviews with the honour of retailer of Cadbury were also conducted. # Finally the collected data and information was analyzed and compiled to arrive at the conclusion and recommendations given. Sources of secondary data Used to obtain information on, Cadbury and its competitor history, current issues, policies, procedures etc, wherever required. # Internet # Magazines # Newspapers

The legend called Cadbury 1824 – A once business was opened in 1824 by a young Quaker, John Cadbury, in Bull street Birmingham was to be the foundation of Cadbury Limited, now one of the world‟s largest producer of chocolate. 1831 – By this year the business had changed from a grocery shop and John Cadbury had become a manufacturer of drinking chocolate and cocoa. This was the start of Cadbury manufacturing business as it is known today. A larger factory in Bridge Street Birmingham was rented in 1847, John Cadbury was joined by his brother Birmingham and the business became Cadbury Brother of Birmingham. 1861 – John Cadbury resigned his business and handed over to his sons, Richard, 25 and George, 21 who after 5 difficult years almost shut down the business to take up other vocation. Fortunately for generation of chocolate lovers, they didn‟t. 1866 – Saw a turning point for the company with the introduction of a process for pressing the cocoa butter from the coca beans. This not only enabled Cadbury Brothers to produce pure coca essence, but the plentiful supply of coca butter remaining was also used to make new kind of eating chocolate. The essence was advertised as „Absolutely pure, therefore best‟. 1879 – Business prospered from this time and Cadbury Brother outgrew the Bridge Street factory, moving in 1879 to a „Greenfield‟ site some miles from the center of Birmingham which came to call Bourneville. The opening of the Cadbury factory in a garden also heralded a new era in industrial relations and employee welfare with joint consultation being just one of the introduced by the pioneering Cadbury Brothers.

1899 – In this year the business private limited company – Cadbury Brothers Limited. Progress since the start of the century through the inter – war years onward ahs been rapid. Chocolate has moved being a “luxury” item to well within the financial reach of everyone. 1905 – Cadbury has many famous brands with one of major success story being Cadbury‟s Dairy Milk chocolate launched in 1905, today Britain‟s favorite modules chocolate bar. Cadbury

today

is

the

market

leader

in

the

U.K

chocolate

confectionary market, employing the most advanced processing technology and management information and control techniques. The company is the confectionary division of Cadbury Schweppes plc which

is

major

force

in

the

confectionary

and

soft

drinks

international market. World - wide Cadbury is one of the pre – eminent names in confectionary with impressive range of famous brands. Quality has been the focus of the Cadbury business from the very beginning as generations have worked to produce chocolate with that very special taste, smoothness and snap, so characteristics of Cadbury‟s chocolate.

ORGANIZATIONAL STRUCTURE

MANAGING DIRECTOR

GENERAL MANAGER

VICE PRESIDENT

MARKET ING

MANUFACT URING

SALES

FINANCE

DISTRIBUTI ON

Design Development Milk chocolate for eating was first made by Cadbury in 1897 by adding milk powder paste to the dark chocolate recipe of cocoa mass, cocoa butter and sugar. By today‟s standards this chocolate was not particularly good as it was very coarse and dry and was not sweet or milky enough for public tastes. At that time there was a great deal of competition in the U.K from continental manufactures, not only the French with their fancy chocolates but also from the Swiss, who were renowned for their milk chocolate. Led by George Cadbury junior, the Bourneville experts set out to meet the challenge. A considerable amount of time and money was spent on research and new plant design to produce the new chocolate in much large quantities. A new recipe was formulated fresh milk and new production processes were developed to produce milk – chocolate not as merely as good as but better than the imported milk chocolate. Four years of hard work were invested in the project and in 1905 what was to be Cadbury‟s top selling brand was launched. Three names were considered Jersey Highland Milk and Dairy Maid. Dairy Maid became Dairy Milk and Cadbury‟s Dairy Milk with its unique flavor and smooth creamy texture was ready to challenge the Swiss domination of the milk chocolate market. By 1913 it had become the company‟s best selling line and in the mid twenties Cadbury‟s Dairy Milk gained its status as the brand leader, a position that it has held ever since. Today more than 250 million bars of Cadbury‟s Dairy Milk are made every year and sales reach over 100 million Pound in value. While advertising and label design g-have changed with fashion and considerable strides have been made in manufacturing technologies,

the recipe for Cadbury‟s Dairy Milk its „glass and a half of full cream milk in every half pound produced‟ is still basically the same as when it was launched. Cadbury’s Dairy Milk Story Chocolate has been enjoyed by successive generation since the manufacturing process was developed in the Victorian Times. Good chocolate‟s is an art form depending on recipe traditions, which have grown over the years. Chocolatiers have use their skills to make balanced recipe in which all the ingredients combine to produced chocolate with all the characteristics that enable full delicious taste to be enjoyed by the consumers. By today‟s standards the first chocolate for eating would have been considered quite unpalatable. It was the introduction of the Van Houten cocoa press from Holland that was the major break through in the chocolate production as it provided extra cocoa butter needed to make a smooth glossy chocolate. Cadbury’s Milk Tray – 1915 Milk Tray has maintained its popularity in the changing world since the milk chocolate assortment made with the famous Cadbury‟s Dairy Milk chocolate was first introduced in 1915. The name „tray‟ derived from the way in which the original assortment was delivered to the shops. Originally Milk Tray was packed in five and as half pound boxes, arranged on trays from which it was sold loose o customers. The half pound deep – lidded box with the traditional purple background and gold script was introduced in 1916, followed by one pound box in 1924. With its stylish, without frills presentation Milk Tray was the assortment for everyday, not just special occasion and it represented the best buy in the chocolate for millions of people. The pack design

has been regularly updated and the assortment itself has changed in line with consumers taste and preferences. By the end mid – thirties the Cadbury‟s Milk Tray assortment outsold all its competitions and today it is still one of the most popular boxes of chocolates in this country. Cadbury Schweppes Cadbury Schweppes plc, a global beverage and confectionary giant with annual sale of Rs 20,ooo crores, is the worlds number one non – cola soft drink company having bottling and partnership operations in 14 countries and franchises of its brand in a further 86 countries around the world. Its Hundred Percent subsidiary in India named Cadbury Schweppes Beverage India (private) Limited (CSBIL) started operation in March 1995. The first brand was launched was crush which was later followed by Canada Dry, Schweppes Tonic Water, Schweppes Bitter Lemon.

CSBIL with its franchise agreement with 19 bottles throughout India proposes to be a household name. It has a policy for FOBOs (Franchise owned bottling operations unlike Coke and Pepsi which prefer COBO,s (Company owned bottling operations). In FOBO the beverages company only supplies the concentrate and the marketing support to build brand equity. The other aspects like machinery, bottling line, land and distribution is the responsibility of the bottler. As its CEO Mr. Ashok Jain says, “we are the software, they are the hardware”.

PRODUCT PROFILE CHOCOLATE & CONFECTIONARY

Dairy Milk

Fruit & Nut

Picnic

Perk

Gems

Éclairs

Nutties

Temptation

FOOD DRINKS Ovaltine Drinking chocolate Bournvita Horlicks

SWOT Strength 1. Very strong brand equity in India. 2. Due to its 54 years presence in India – has deep penetration – 2100 distributors; 450,000 retailers, 60 mid urban (22%) customers. 3. Three sectors; Chocs (70% share), Confec (4%), food drinks (14% - leader in brown segment). 4. Low cost of production due to economic of scale. That means higher profits and / or more co petitioners. Better market penetration. 5. Second best manufacturing location throughout Cadbury Schweppes. Weakness 1. Poor technology in India compared to current international technologies (Godiva, Mozart, Frazer, Dint, Naushans, etc...) 2. Ltd. Key products, only one central brand (CDM). Pralines range totally wising in India. 3. “Make in India” tag once the economy opens up wore and imports rush in. Opportunities 1. Tremendous scope for per capita consumption (160 gms of 8 – 10 kg) 2. Increasing per capita national income resulting in higher disposable income.

3. Growing

middle

class

and

growing

urban

population. 4. Increasing gifts cultures. 5. Substitute to “Mithais” with higher calories/cholesterol. 6. Increasing departmental stores concept – impulse @ at cash counters. 7. Globalization: optimal use of global Cadbury Schweppes. Threats

a) Major :None. Due to low cost and highest brand equity, it is today in India. b) Minor :Globalization will being in better brands for upper end of the market (Liest, Monarch, Godiva, etc…). Conclusion:Will lose market share with globalization (a la Maruti) but will remain brand leader.

Pest Analysis P: since the budget range is decontrolled, no political effects are envisaged. E:

1) increasing per capita income resulting in higher disposable income 2) Growing middle class/urban population – increase in demand 3) Low cost of production – better penetration

S:

1) Per capita consumption expected to increase – fashion 2) Increasing gifts culture – increase in demand 3) Lower cholesterol than “mithais” (sweet meat) –

substitute demand T: Will have to reinforce technology to international levels once India is a “free” economy

4 P‟S Of Marketing PRODUCT Satisfaction suffices. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. But the winner will surpass them by constantly exceeding her expectation, delivering to her door step additional benefits which she would never have imagined possible. Cadbury‟s offer such product. The wide variety products offered by the company include:

I. Chocolate & Confectionary 1) Dairy Milk 2) Fruit & Nut

3) 5 Star 4) Break 5) Perk 6) Gems 7) Eclairs 8) Nutties 9) Temptation 10) Milk Treat II. Beverages III. Food Drinks 1) Bournvita 2) Drinking chocolate 3) Cocoa

Pricing Make no mistake. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. The strategy used by Cadbury‟s is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them. Cadbury‟s has launched various products which cater to all customer segments. So every customer segment has different price expectation from the product. Therefore maximizing the returns involves identifying right price level for each segment, and then progressively moving through them. Dairy Milk

Rs. 15

Perk

Rs. 10

5 Star

Rs. 10

Friut and Nut

Rs. 22

Gems

Rs. 10

Break

Rs. 5

Nutties

Rs. 18

Bournvita (500 gm)

Rs. 104

Drinking chocolate

Rs. 50

Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE. Marketers and finance manager need a new term to evaluate their business:

Distribution Equity. It takes much more time and effort to build, but once built, distribution equity is much together to erode. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility, hire the hottest strategies on the block, swamp prime television with best Ads, but the end of it all, you would be know of selling your products. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves. Buyers are paying for distribution equity not brand equity and market shares. Why does the company need distribution equity more anything in India? With technology and competitive pressure slash in it is becoming increasing difficult for marketers to retain a unique

product

differentiation for ling period. In a product and price parity situation,

the

brand

that

sells more is the one that reaches the highest number of customers. India – 1 billion people, 155 million household has over 4 million retail outlets in 5351 urban markets and 552725 villages, spread cross 3.28 million sq. km. television has already primed and population for consumption, and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. But getting their means managing wildly different terrainsclimate,

language,

value

system,

life

style,

transport

and

communication network. And your brand equity isn‟t going to help when it comes to tackling these issues.

Own

distribution

network

consist

of

clearing

and

forwarding (C&F) agents & distribution stockiest. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. Once the stock product reaches retailers, the prospective customers can have access to the product. Cadbury‟s distributes the product in the manner stated above. Cadbury‟s distribution network has expanded from 1990 distributors last year to 2100 distributors and 4,50,000 retailers. Beside use of TI tom improves logistics, Cadbury is also attempting to improve the distribution quality. To address the issue of product stability, it has installed visi colors at several outlets. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heal effects product quality and thereby off takes. Looking at the low penetration of the chocolate, a distribution expansion would itself being incremental volume. The other reason is arch rival Nestle reaches more than a million retailers. This increase in distribution is going to be accompanied by reduction in channel costs. Cadbury‟s marketing costs, at 18% of total costs, is much higher than Nestlé‟s 12% or even pure sugar confectionery major Parry‟s 11%. The company is looking to reduce this parity level. At Cadbury, they believe that selling confectionery is it like selling soft drinks.

Promotion If an advertisement is to communicate effectively, the receiver must at least half want it to, and be prepared too take step toward the sender. Effective advertising is rarely hectoring or loudly explicit…. It often both attracts and generates arm feelings. More often than not, a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. To penetrate into the inner recesses of her memory, communication must

first

ensure

exposure,

grab

her

attention

evoke

her

comprehension, grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. The strategic response address the emotional appeal of the band to the child within the adult.

Naturally, that produced just the value vacuum

that Cadbury was looking to fill. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful, unself conscious, pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “Khane Walon Ko Khane Ka Bahana Chahiye” for CMD and “Thodi Si Pet Pooja – Kabhi Bhi Kahin Bhi” for Perk have been sure shot winner with the audience. Whirl with the new launched temptations with the slogan “Too To Share” the communication resolves around the reluctance of a person who‟s got their hand on a bar of temptation to let anyone else to have a bite. As well as outdoor and radio ads, ad agency contract has created communication for cinemas and even ATM machines for the brand.

All ICICI‟ s ATM a message flashes on the screen as soon as customer insert his ATM card. It tells the customer that this would be good time to get out of her temptation since he/she is bound to be alone. Something familiar is planned for phone-book as well. In cinemas, Cadbury has a message on-screen just before the lights are dimmed to give them a chance to get their temptations. There will also be after dinner sampling in restaurants – to begin with, 30 catteries in Mumbai have been selected. The next round of activity will include the wafer-chocolate Perk and the Picnic bar, which has faced problems with its taste, because of the peanut it contains. Milk treat has also been launched in a module bar form, just in time of Diwali gifting market. Éclairs has got potential for much wide distribution, in a small sweets that airlines, hostels, and up market retail outlet offer to guest and customers. Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as spend at this level in the current year also. Ad since any discussion today would be incomplete without mention „e‟ word, the management plans to tap this new channel of marketing. Beside three company website (i.e. www.cadburyindia .com, wwww.bourvita.com, www.cadburygift.com that the company has launched, it had also entered into various marketing relationship with other portals, specially targeted during festivals and events such as Valentines day , etc…. It‟s a combination of spiffing up its key brand, researching and improving the newer products that haven‟t taken off, supported with high ad – spends that Cadbury hopes will see it emerges stronger after the current slowdown, as well as expand the market.

Positioning In the 1970s consumers were ready to pay “more for more”, and luxury goods flourished. In the 1980s, consumers began to demand “more for same”, and the discounting era grew strong. Today‟s consumer demanding “more for less”, and the winner will be that super value marketers…. Some of today‟s most successful companies recognize those customers are more educated and able to recognize true customer value… Positioning is simply concentrating on an idea – or – even a word defines that company in the mind of the consumer. It is more efficient to market one successful concept to one large group of people than 50 product or service ideas to 50 separate group… repositioning is a must when customer attitude have changed and product have strayed away from the consumer‟s long standing perception of them… Cadbury‟s is an anchor in sea of confectionary products. As a variety of competitive claims assails her senses, today customer uses complicated decision making process to assess the alternative before making a purchase. Since Cadbury‟s is more clearly associated with a particular set of attributes in terms of benefits and prices, the quicker becomes her search process. Positioning of individual product: 1) CMD: is and always remain flagship brand. The punch by the company for advertising this product life. „Real taste of Life‟, itself defines the positioning of the product. The chocolate is meant for all age groups. It symbolizes fun, enjoyment, good items. It has goodness of milk, taste and appetite appeal. 2) 5 star: although positioned internationally as an energy bar, 5 star was positioned on an emotional platform in India during

the late 1980s. Symbolizing togetherness, 5 star was originally targeted at teenagers. In June 1994, the company reworked the strategy for 5 star to make it a source of energy. In fact, before the launch of Perk, 5 star‟s energy bar positioning made it a snacking chocolate. 3) Éclairs: competing in the chewable toffees segment. Éclairs was re-launched during the mid-nineties with a new name, Dairy Milk Éclairs. 4) Gems: broadcasting Gems, though, didn‟t prove to be feasible proposition for Cadbury. Targeted at children under 12 years with

„Gems

Bond‟ advertising. Cadbury decided to too teenagers with „Smart

the Very

Smart‟ campaign. But now, the company is retargeting children with its animated commercial. “Gems are the best brand to speak to children. Colorful chocolate buttons appeal most to children and that is why Cadbury is re-targeting children.” 5) Crackle: it was the first Cadbury‟s chocolate to have crunch in it. It was targeted as a funky chocolate to add spark to life. 6) Perk: in September, 1995, Cadbury preempted the launch of Nestlé‟s Kit-Kat by rushing a new brand, Perk into the market. Positioned much further on the functional scale than 5 star, Perk was meant to be light snack-product for subduing the first pangs of hunger.

7) Bournvita: positioned as tasty health drink. While its competitors concentrated only on health aspect, Bournvita combined the nutritious value with taste. Cadbury’s Market Segment Market place for any product is comprised of many different segments of consumers, each with different needs and wants. Markets segmentation can be defined in a number of ways such as:  Demographic variables (e.g. Consumers are groups, gender, material states income etc…)  The lifestyle of consumers (i.e. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed.  Cadbury takes into account all these factors when producing a range of products. It targets different segments within the market, such as the.  Break segment – products which are normally consume as a snatched break and often with tea and coffee, for example Cadbury‟s Perk and snack range.  Impulse segment – these products are often purchase on impulse, eating these and then. They include product such as Cadbury‟s Dairy Milk.  Take home segment – this describes product that are normally purchased in supermarkets, taken home consumed at a later stage.

The Real Taste of Rejuvenation It was the market – leader, but sales inched along. It focused firmly on its target segment, but the real buyer lay beyond. For seven long years, Cadbury‟s Dairy Milk chocolate suffered stagnancy even as other consumer products boomed. Just how

did the company

rejuvenate an old brand to create the marketing megs-hit of the 199s? It Stand First Among Second coming. And it wasn‟t so much a relaunch as it was a process of rejuvenation. Over a period of 12 months, starting February, 1994, the Rs. 314 crore confectionery makers Cadbury embarked on the most outrageous repositioning exercise

in

the

recent

history

of

Indian

marketing.

For,

it

systematically dismantled the franchise that the company had built over 30 years of its flagship brand, Cadbury‟s Dairy Milk (CDM)Cadbury‟s

Milk

chocolate

until

1986-destroying

the

very

fundamental of generic association that had made million of Indians refer to a bar of a chocolate as a “Cadbury”. More proof of the chocolate is in the eating: two years into process, CDM‟s market share at 25%, with sale rising by an average 40% per annum. The Diagnosis

Today, The Real Taste of Life campaign, which served Up

chocolate

in

general,

and

COM

in

particular,

into

the

consciousness of adult, has already become a classic of advertising and marketing. By 1993, Cadbury was desperately seeking growth for the brand… “With a market share of 70%, trying to win away customers from competitors in this stagnant market wouldn‟t help. They had to find new customers, people who‟d never bought chocolate before. Or, they had to increase consumption levels”. The obvious solution, in a peculiar predicament. Despite low penetration, both the brand and the category were displaying symptoms of age: faltering growth, high recognition, and lack of excitement. The market research revealed the cause of the graying: chocolate wasn‟t a snack in India. “In mature markets, chocolate straddle a continuum, from boutique product – packaged raw indulgence – to a casual food”. So, Cadbury whipped up a growth solution that involved associating the brand with snacking and functionally, which inevitably go together with high consumption rates in the Western markets. The next step: identify the barriers preventing consumers from chocolate as a snack. A battery of test, both quantitative and qualitative, comparing chocolate consumption to a basket of competitive products revealed an unmistakable answer.

“Cadbury’s Was Caught In Its Own Trap” How? The company had, over decades, created a context of chocolate consumption that was now chocking growth possibilities. “The baggage of the past was so overpowering that people didn‟t get influenced by minor shifts in the message”. In fact, the behavioral and attitudinal patterns conveyed by the communication to build the brand were proving restrictive. For, Cadbury had, using the traditional demographic variables of age, socio-economic groups, and usage intensity, positioned COM as a product that elders – typically, parents – bought for children – typically, their own. But admittedly – enduring values of love and sharing, parental affection, and reward that Cadbury had labored to associate with the brand, which had helped it forge a relationship with customers, had relegated it to being a special – occasion item, ruling out increased individual consumption. After all, special occasion item, ruling out increased individual consumption. After all, special occasion were meant to be a rare. A typical Ad would show parents bringing home chocolate for their child. It would never, ever, show the child, or the parent, buying it for himself or herself. The punch line – Sometimes Cadbury’s Can Say It Better Than Words, and Nothing But The Best Will Do – reinforced the notion, with an unwelcome side – effect: adults, as research showed, felt distinctly guilty and embarrassed about eating chocolate, whether alone or socially. “Not only were adults not indulging in chocolates, but they were also actively curtailing child consumption” solution? Forget children as the core consumer. Universalize the product, targeting the parents. The Tests

Despite the Need To Clear The residual memory of CDM‟s former association, caution prevented a big break with the past, forcing Cadbury to experiment with a combination of continuity and change. The process entailed understanding the foundation of the brand, since it was these that would support the new structure”. Out went the caring - and - sharing element, but the family context stayed. “Cadbury had two pillars, so it made sense to change one”. Chocolate should be eaten whenever you feel like. It was an impulse item, so why shouldn‟t it be sold as one?”. The first of the two commercial focused on functionality, purging the emotional element. Is the storyline, The father watches TV, engrossed, gnawing away at a bar of CDM. The children enter, followed by the mother-but, by that time, the father has completed the distinctly un paternal act of devouring the entire bar. The children are shocked, where upon the produces another bar for them-only to eat that up too. Finally, the mother brings another bar out of her bag. The last shot more CDM bars strew around casually. The second commercial conveyed the same message, depicting four member of a family doing their own thing on a Sunday afternoon, each casually munching away on chocolates. The less than – subtle message: eating chocolate‟s just an everyday affair, without special occasion or relationship coming into play. Despite their strategic intent, both ads failed on pre – airing tests. Why for stators, children were outraged at the idea of a parent consuming chocolate, while adults were down right angry at the notion of the father depriving his children of chocolate bar. Just as important, consumer rejected the idea that chocolate-eating could be equated with mechanical activities like combing one‟s hair. After all, chocolates were about feelings. There had to be magic, romance, love and emotion. These elements had been ripped away from the advertising. It was sans emotion”.

“Parent Are Different From Adults” Even as the ad failed, however, they generated a valuable byproduct, in the form of a new insight, into adult behavior. “Using transactional analysis on response, Cadbury‟s found that adult as parents behave very differently from adults as adults. People forbid their children from having chips, but gorge themselves. “The implication”:“The moment the adult was shown in the context of his role as a parent, all his cognitive preconception about the product would come to the fore. He‟d think about the reasons why, and the block would automatically come up”. Tap child-ego state within the adult, stimulating desire, spontaneity, and the craving for instant gratification. The Prescription The crucial question that Cadbury was confronted with: what strategy should it deploy to rejuvenate COM in a way that would appeal to the child lurking within the adult? To inject a modern flavor into COM, they chose to create a new brand identity, borrowing a leaf from marketing guru David Aaker, who decrees that brand identity should establish a relationship between the brand and the customer by generating value proposition involving functional, emotional, or self-expressive benefits.

“The Ads Had To Be Linkable” “The consumer will always tell what his current belief system is, not what it should be Cadbury‟s job to mould has habits and behavior in a way that would increase consumption for product and brand”. “Impulse Drives Chocolate Sales”

One of the tools Cadbury‟s used was Jean – Neal Kapferer‟s Brand Prism model to examine whether contemporary value systems offered a peg on which the brand could be judge. The study disclosed,

interlaid,

a

distinct

shift

from

collectivism

to

individualism, with the pre – 1990‟s sacrosanct values of filial and family love being overshadowed by the manifestation of a larger need for self – expression. “There was a definite yearning to be free child”. Therein lay the opportunity for both unshackling consumption and creating all-new association for CDM. The Elixir Having decided to barter the distinctly use selfish values of sharing and caring for the suspiciously self-centered one of self-expression, Cadbury‟s people insisted that the rejuvenate be enriched with compensation – and equally enduring – positive values: universal truths, enduring human values, and universal moment of joy. To translate the brief into the commercial, they decide to simply portray occasion of childlike-but not childish-behavior from adults, without explicitly identifying adults as the target customer. “They left the connection to be made by the customer” “In the process they were able to get viewer involvement and high levels of empathy. Nowhere did they actually say, you‟re an adult, you can eat it. Because nobody wants to be told”. Thus it was that, the montage of the child in the man-the old man kicking the football; the pregnant woman carving a chocolate; young girl breaking into a spirit; the young man tossing a bar of chocolate at his sweet-heart departing in a bus-was created. That the consumption had to be liked before it could penetrate the cultural resistance to chocolate consumption by adults was obvious. Taking a contrition stance, Cadbury decided to test the commercial being devised by O&M‟s creative team not for the tire battery of likeability, comprehension, credibility and behavior modification –

but only for the first two. “If asked upfront, the consumer was hardly likely to consider the dramatically-different idea credible. Nor was there much chance of her announcing an immediate change in behavior”. But why likeability and comprehension? Simple: the first was meant to be the vehicle on which the daring idea-that adults should enjoy chocolate-would ride into the consumer‟s psyche. In other words, the commercial was meant to make him smile at first-and only then realize the import once of the message, which is where the comprehension had to be tested. “What was clear in this case was that likeability would have to include identification and feeling warmth.”

T Th hooddii SSee PPeett P Puujjaa,, K Kh haabbii B Bh hii K Kaah hiin nB Bh hii!!

The Real Taste of Life Campaign The very first ad in the campaign in 94 was „block – Buster‟. It depicted the essence of one and a half glass of milk pouring in to a boy Dairy Milk unique glass and half in to a chunk icon shows the glass and a half of full cream milk flowing in to the chunk of dairy milk conveying the deliciousness and taste appeal of the gooey, creamy, smooth chocolate inside the pack that children like. The mnemonic of 1 ½ glass reached to consumer through every magazines, poster, T.V, newspaper.

The second ad was montage of vignettes from every day lives of young and old which focused on showing a series of emotions. The ad created a being out the child in the man created to bring out the child in the. The old man kicking the football, the pregnant women craving chocolate, young girls breaking into a spirit, the young man tossing a bar chocolate at his sweet heart departing into a bus. The common refrain linking them was the adult in a free child mode – spottiness, impulsive and carefree. The ad was protested among adult‟s trough focus groups. The ad received an overwhelming response. It was high on likeability, evoked a great degree of empathy and identification consumers‟ response were those me…… “Feel like that…….”. “Every feels like this”…….. Brand usage was perceived to cut across all age groups and accessions. Consumers described dairy milk as “… of all ages” “Eat, when ever you feel like it…you do not have to wait for an occasion.” Dairy Milk had successfully enabled the free child in the consumer subsequent adverting used the same communication strategy.

K Kyyaa SSw waaaadd H Haaii ZZiin nddaaggii K Kaa!! The next ad featured an on going match in the field. Think of a match India batting against Pakistan. The score, 6 runs to win with 1 ball left and India wins the match. The ad shows a girl dancing with jubilation on the cricket field when her hubby hits the winning stroke. The award winning campaign, designed by Ogilvy and matter, were intended to rid the Indian chocolates eater of that guilt complex. The advertisement suggested, through not in so many words, that it was ok to be seen including in a chocolate in public.

You could relate the sweetness of success of chocolate. The ad draws attention to the actual eats experience. The fourth in this series was the girl with on her hands. The ad focused on showing how the girl relishes the Dairy Milk when she has mehandi on her hands. The idea behind this advertisement was to show the nature of chocolate as an impulse – driven product. Post campaign saw a great turn around. Dairy Milk transformed in to a young full brand full of zest. It came to be recognized as an expression of spontaneity and in pulse. The campaign succeeded I softening attitude towards chocolate and lifting then out of the ream of kiddies / special occasion only. It embraced a wide range emotion all build around them that chocolate means different things to different people at different times, but most importantly chocolate is Cadbury. The New Campaign And finally, with the launch of the new colloquial advertising campaign „Khaannein Wallon Khaannein Ka Bahana Chahiya featuring

MTV

VJ

Cyrus

Broacha,

Cadbury

India

aimed

to

„substantially‟ increase penetration level of the chocolate category in the next few years.‟

The new campaign is worth noting as it clearly differ from the earlier one in terms of rectifying the consumer perception about chocolate being an up market impulse – driven product. The attempt now is to change the image, to make chocolate eating a regular habit. The current estimated penetration level of the chocolate category is 19%

in

the

urban

market.

The

objective

behind

tne

new

communication on Cadbury Dairy Milk is to make the chocolate category more socially and culturally relevant and drive penetration in the process. The new campaign has been launched in tandem with the old ar@@ Winning „Kuch Khass Hai‟ campaign and the media strategy is to let the two co – exist towards a common vision “providing a Cadbury in every pocket”.

T Th hooddii SSee PPeett PPu ujjaa,, K Kh haabbii B Bh hii,, K Kaah hiin nB Bh hii!!

Chocolate Market Share The Indian chocolate market is getting bigger and better. While on one hand, the premium segment (composing imported varieties) is opening up on the other, companies like Cadbury India are launching indigenous product made to international standards. Of the 20,000 tonne chocolate market worth about Rs. 400 crore, Cadbury account for about 70% followed by Nestle, with a share of around 20%. Amul has about 5% of the market, with minor player taking the rest. The battle, though, is between Cadbury and Nestle. Though with a much smaller portfolio, Nestle is putting up a tough fight.

From a treat for kids, chocolate are now being positioned near meal substitutes, thanks to the initiative taken by the Cadbury India during early nineties. The market itself has become more broad based, in the sense adults are an important target segment now. The reposting of Cadbury‟s Dairy Milk in 1994 as the „real taste of life (through the Slice of Life and Cricket commercial by Ogilvy and Mather) grew the entire milk chocolate by 20%, and gave the Cadbury‟s range – 5 Star, Gems, Éclairs, Fruit & Nut, Crackle, Nutties, Butterscotch & Tiffns – a new lease of life. In other words, it facilitated the repositioning of Cadbury‟s sub brands in the basket. Some o the strategic clicked, while other did not quite take off.

The company is pushing the gifting segment, through occasion linked gifts. Chocolates contribute to 64% of Cadbury‟s turnover. Confectionary sales accounting for 12% of turnover is contributed largely by Éclairs. The company attempted expanding its confectionary

product

portfolio,

with

launch

of

sugar

based

confectionary goodly and fruits, without much success. Cadbury also has a strong brand vita in the malted health drink category which account for 24% of turnover. There exists an even larger unorganized market in the confectionary segment. Cadbury has 4% of the market share in this segment. Leading national players are nutrine, Pary‟s Ravalgoan, Candico, Parle, Joyoco India and Perfetti, the MNCs such as Joyco and Perfetti have aggressively expanded their presence in the country in the last few years. Malted food drinks category consists of white drink and down drink. White drinks accounts for almost two third market of the 82,000 for market south and east are large market for drinks, accounting for largest proportion of all India‟s sale. Cadbury‟s Bourn Vita is leader in the down drink coca based segment in the white drink segment Smith Kline‟s Horlicks in the Nestle Milo , GCMMF nitramul and other Smith Kline brand Boost, Maltova and Viva Cadbury bold 14% market share in food drinks segment. Despite tough market condition and increased competition Cadbury managed to record a double digit (11%) top line growth in 2000. The company achieved a volume growth of 5.2%. This was achieved through innovative marketing strategies and focused advertising campaign foe flagship brand Dairy Milk. Net profit rose sharply by 41.8% to Rs. 520 million. Reduced material and energy cost and tioter control over working capital over working capital and capital expenditure enabled the company to improve the profitability. Company added 8 million new consumers and saw its outlets grow to

4.5 lakhs and consumer to 60 million.In the food segment, Britannia is the leader brand with 21% among those who expressed an opinion saying that they like advertising for the brand Cadbury was clearly No.2 with 18% to which CDM throw in its weight with 13% and pork with 4%. For the Chowlate company, Khane Walo Lo, Khane Ka Bhanna and the Karwa Cauth, Sports are clear winners. Tied for the brand place are Amul, Parle and south based Arun Le Gram with 5% each. Disappointment among bid brands Kissan and Maggi and Kwality Walls (1%) each.

Cadbury’s Temptation

Cadbury’s Health Drink

Cadbury’s Creamy Bar

Cadbury’s fruits and nuts

Cadbury’s Fruit & Nut

New Launch Cadbury target kids with Milk Treat: - It is a product that talks directly to the target consumer. The product benefits have been defined as “The goodness of milk to the fun of chocolate”. it combines both good health, multinational value of milk along with the values of fun and excitement.

The

kinds

formally

associate with Cadbury chocolate offering. Temptation :- It is aimed at the niche “international chocolate “ segment of the chocolate market a segment how upgrade from brands such

as

Cadbury‟s

international Tolerance, Roughly

to

offering Lindit

5%of

the

and total

premium such

as

Hersheys. domestic

consumption expected to grow to some 10%. This segment is too good to miss out on. The Previous Cadbury‟s range available in India did not

offer

upgrade

consumer to

an

international

option

to

chocolate

within the Cadbury‟s fold. Temptation is an attempt to lug niche, priced Rs. 30.

Future Strategy In the branded impulse market, the share of chocolate in 6.6% and Cadbury‟s share in the impulse segment is 4.8% factor like changing attitude, higher disposable income, a large youth population, and low penetration of chocolate (22% of urban population) point towards a big opportunity of increasing the share of chocolate in the branded impulse among the costly alternative in the branded impulse market. It appears that company is likely to play the value game to expand the market encouraged by the recent success of its low priced „value for many packs‟. Various measures are undertaken in all areas of operation to create value for the future. New channel of marketing such as gifting and child connectivity and low end value for money product for expanding the consumer base have been identified. In terms of manufacturing management focus is on optimizing manufacturing efficiencies and creating a world class manufacturing location for CDM and Éclairs. The company is today the second best manufacturing location of Cadbury‟s Schweppes in the world. Efficient sourcing of key raw material i.e. coca through forward purchase of imports, higher local consumption by entering long term contract with farmer and undertaking efforts in expanding local coca area developing. The initiatives in the terms of development a long term domestic coca a sourcing base would field maximum gains when commodity prices start moving up. 

Use

of

it

to

competitiveness

improve

logistic

and

distribution



Utilizing mass media to create and maintain brands.



Expand the consumer base. The company has added 8 million new consumer in the current year and how has consumer base of 60 million although the growth in absolute numbers is lower than targeted, the company has been able to increase the width of its consumer base through launch of low priced products.



Improving distribution quality by addressing issues of product stability by installation of visi coolers at several outlets. This would be really effective in maintaining consumption in summer, when sales usually dip due to the fact that the heat effects product quality and thereby consumption.



The above are some steps being taken internally to improve future operation and profitability. At the same time the management is also aware of external changes taking place in the competitive environment and is taking steps to remain competitive in the future environment of free imports, lower barrier to trade and the advent of all global players in to the country. The management is not unduly concerned about the huge deluge of imported chocolate brands in the market place.

It is of the view that size of this imported premium market is look small to threaten its own volumes or sales in fact, the company looks at the tree important as an opportunity, where it could optimally use the global Cadbury Schweppes portfolio. The company would be able to not only provide greater variety, but it would also be more cost effective to test market new product as well as improve speed of response to change in consumer preference through imports. The

only concerns that the company has in this regard is the current high level of duties, which limit the opportunity to launch value for money products. Changing Product Mix

Chocolate Sugar Confecting Food Drink

Contributing to

Contributing to

turnover 1994

turnover 2000

59%

64%

9%

12%

32%

24%

Current Market Share Chocolate

69.2%

Sugar Confectionary

4.0%

Food Drink

14.2%

Expanding Distribution Reach 2001 + Distribution 450000 Retail Outlet 60 Million Consumers

RECOMMENDATIONS 

Maintain dominance in chocolate, confectionery and market leadership in blown drinks.



New channels such as gifting, child connectivity and value for money offering to be the key growth drives.



Grow volume sales at least 20% p.a. over the next years.



Achieve the goal of best manufacturing location in Cadbury Schweppes world for Dairy Milk and Éclairs.



One new major product launch every year.

The Cadbury Story Cadbury’s success story In 1984, John Cadbury founded U.K. company with one aim:- to create the highest quality chocolate. By1969, when Cadbury merged with the soft drink giant. Schweppes, Cadbury brands were already famous all around world. Today Cadbury‟s production are enjoyed in 120 countries, with 40 chocolate confectionary brands, Cadbury dominated markets as far as the U.K. and Australia that‟s why Cadbury have been dubbed “The world‟s master chocolate makers”. The secret of Cadbury’s success What is the secret of Cadbury‟s continuing success first there‟s the careful selection of the finest coca beans from west Africa, as well as tasty hazel nuts from Turkey and the fine sheet and choicest natural ingredient available to us anywhere. Finally there‟s skillful marketing Cadbury always takes extreme care in selecting and marketing the right range of product in every cause. The right product, the right partners, the right marketing, the promotional back up and the right employees. These are the ingredients in Cadbury‟s latest recipes for success.

Right from the stand Cadbury Dairy Milk Chocolate success has been based on 4 factors: Quality

 Value for money  Advertising

Case Study Prior to deciding on the communication strategy for Cadbury Dairy Milk it was important to understand the habits and mindset towards chocolates. A large scale usage and attitude study was conducted among adults. The research revealed that: Adults were primarily purchasers, and not consumers of chocolates. However, as for most children‟s product, they exercised a strong influence on the children‟s consumption behavior. Adults acted as gatekeepers of sorts when it came to food items. Considering the advertising history, it came as no surprise that chocolate were

perceived as “kiddy” product and certainly not part of the repertoire for products consumed socially. Chocolate consumption among adults evoked feeling of self indulgence and guilt. Chocolates seemed to offer virtually no significant positive and certainly no overt psychogenic benefits. Food and nutritive values associated with chocolates were low. And, in fact they were categorized as a hazard, being responsible for obesity, dental and respiratory problems. Brands images were undifferentiated and the category had low saliency, “can do without”. Purchase was almost always planned and triggered by motives ranging from celebration, bribing and reward to gifting.

For

an

impulse

product

category such as chocolates, this was likely to limit market growth. This conditioning and social learning about chocolates

was

restricting

consumption among adults as well as driving them to restrict children‟s consumption. There was evidence to suggest the need for shifting focus from child as chocolates

consumers

to

adult‟s

communication, hitherto, had always addressed adults as purchasers rather than consumers. Communication had positioned

chocolates

for

specific

situations,

thus

imposing

boundaries for the growth of the market. Emphasis on casual everyday

situation

opportunities.

could

help

promote

core

consumption

For low involvement product categories like chocolates which offer emotional and sensory benefits, it is suggested that communication is most effective with repeated likeable ads promising unique and authentic emotional benefit a shift from portraying everyday moments as an opposed to special ones. The radical change however was focus on bringing out the spontaneity in adults. And, finally CDM a symbol of manipulation was henceforth to symbolize fun, enjoyment and good times. The mnemonic of a glass and half milk was to reinforce the goodness of milk and cue physiological benefits. The only variation was in the Rituals, where communication had shifted from, and special occasion to every moment. 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.

Nutties

Roast Almond

Picnic

The Outlook The Cadbury management has cut down on its growth target by setting a 10% average volume target for next 3 years (as against previous growth) coupled with in factionary price increases, this could translate into top line growth of 14 –15%. This target also appears difficult to achieve given the consumer slowdown and the fact that the company‟s consumer slow down and the fact that company is dependent on a single category chocolates to drive growth. Effect it expanding confection any portfolio have also not yielded desired results. The management has declared its intention to focus only in Éclairs (which forms a major position of its 4% share in the confectionary segment) for the time being in this category. In chocolates too ones remain on the 2-3 key brands as CDM, perk in E claims which have supported growth in the past. While new launched such as milk @ and Perk slims have been doing will, the management expects that dairy milk would continue to be the central driving force in Cadbury‟s growth and that all other brands would remain peripheral to this central brand.

Few Concerns Come To Mind With a market share of 70% in the chocolate category and with the free availability of international brands that you see in the market today, it is only natural that Cadbury‟s market share will move down from here marinating a 70% market share in a closed environment may have been easy, but it certainly won‟t be easy in liberalized environment of free imports. And whatever be the anomalies of taxation or low, the consumer is surely going to have a wider choice. And it is going to be shared with other brands too in future. There is additional challenge of Cadbury‟s brand just aiming market share when the consumer has a wide portfolio of brand to choose from. While there would be new chocolates launch towards the end of the year, the company has ruled out a real big chocolates launch in the current year. And it is too early yet to comment on the long term response to the new launch temptations. They say chocolates are mostly am impulse purchase. Therefore consumer would prefer smaller, low cost packs to bigger higher priced ones. The growth trend of the brands therefore clearly indicates that the only brand that has grown is the one that gas received tremendous marketing and advertising support Dairy Milk withdraw support for any brand and growth loses momentum. In such scenario, for how long and how many brands can the company continuously support?

POSITION OF THE VARIOUS BRANDS IN THE MARKET HAS BEEN LISTED BELOW Cadburys

Positioning

brands

Nestle’s

Positioning

brands

Cadbury

“The Real

Classic Milk

Positioned as an

Dairy Milk

Taste of Life”

Chocolate

affordable enriched milk chocolate

Fruit n Nut Creamy bar

Position as adults as an time

Almond

purchase –

Bournvita

Positioned as Trendy, Cool, any time snack.

impulse any

Roast

Crackle

Bar One

self expression values attached

5 Star /

Perk –

Perk/Break

Positioned as

snacking

Snacking

consumption

consumption

“Have a Break,

“Thodi si Pet

Have a Kit Kat”

Pooja”

KitKat

Positioned as a

5 Star Energy bar Reach for the Stars.

DATA ANALYSIS AND FINDINGS

Data was tabulated manually and was also analysed manually. Excel was used to make graphs had pie charts. Main technique used were : Modal value was used to analyse the questions, which has 2 or more choices as their answers. Simple average were used to get answer to questions

FINDINGS AND SURVEY 1. Do you eat chocolates? Yes 26%

No 74%

2. Which brand of chocolates do you use? 75

80

65

60

70 60 50 40

30

30 20 10 0 Cadbury's

Nestle

Amul

Others

3. Where do you buy chocolates from?

Movie Halls 17%

Others 6%

Restaurants 10% Retail stores 35%

Super stores 32%

4. Are you aware of any campaign of the above brands?

No 54%

Yes 46%

4. Which Cadbury’s product do you usually prefer or use?

80 70

80 60

35

24

40

40 20 0 Dairy Milk

Fruit & Nut

Temptation

6. Do you think Cadbury’s chocolate is easily available in market ? No 9%

Yes 91%

CONCLUSION This company project has demonstrated “CADBURY’S MARKETING AND COMPETITIVE STRATEGIES” that has proved to be extensive through, and of great benefit to the company in furthering its competitive advantage. In this project it is possible to see the success of Cadbury‟s in it‟s indorse its strong potential to continue to do well.

Bibliography 

A L Ries (1996), “Focus” Harper Collins Publishers Ltd.



David A. Aaker (1991), “Managing Brand Equity”, The Free Press.



David A. Aaker (1996) “Building Strong Brands”, The Free Press.



Philip Kotler (Eighth Edition) “Marketing Management”, Prentice Hall of India Ltd.



Advertising and marketing Magazine



The Economic Times – “Brand Equity”



Company Literature



Market survey and questionnaires



Web site: www.cadburyindia.com



Web site: www.Cadbury.uk.com



Business World



Business Today

QUESTIONNAIRE 1. Do you eat chocolates?  Yes

 No

2. Which brand of chocolates do you use?  Cadbury’s  Nestle  Amul  Others

3. Where do you buy chocolates from?  Super stores  Retail Stores  Restaurants  Movie Halls  Others

4. Are you aware of any campaign of the above brands?  Yes

 No

5. Which Cadbury’s product do you usually prefer or use?  Dairy Milk

 5 Star

 Fruit & Nut

 Perk

 Temptation

6. Do you think Cadbury’s chocolate is easily available in market ?

 Yes

 No

7. Describe Cadbury’s Chocolate in one word? ______________________________________________________ 8. Your comments on Cadbury’s products? ______________________________________________________