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Tuesday, January 26, 2010

CADBURY(the marketing strategies of Cadbury India Ltd.)

ACKNOWLEDGEMENT

The satisfaction and euphoria that accompany the successful completion of any task is incomplete without the mention of people who made it possible. So I take this as a great opportunity to pen down a few lines about the people to whom my acknowledgement is due.
It is with the deepest sense of gratitude that I wish to place on record my sincere thanks …………………………………………………., my project guide for providing me inspiration, encouragement, guidance, help and valuable suggestions throughout the project.
I would also like to thank all my respondent for giving me their valuable time and information.


…………………..











TABLE OF CONTENTS

Acknowledgement Page No. 1
Part I
Chapter 1 Abstract Page No. 2
Chapter 2 Introduction Page No. 6
Chapter 3 Agency Profile Page No. 19
Part II
Chapter 4 Research Design Page No. 29
Chapter 5 Servicing Analysis & Interpretation Page No. 34
Chapter 6 Data Analysis Page No. 68
Chapter 7 Finding, Conclusion & Suggestion Page No. 81
Part III
Chapter 8 Appendices & Annexure Page No. 86
Chapter 9 Bibliography Page No. 89




PREFACE

The success of any business entity solely depends on how effectively does it utilizes its optimum resources and how soon does it make arrangements for the removal of the customer’s grievances. Moreover, the company should always be ready to make necessary changes according to the requirements in order to attract more customers so as to maintain a substantial growth in the market. The topic given to me was:

“JOURNEY TO ZENITH OF CADBURY”
I have tried to put my best efforts to complete this task on the basis of skill that I have achieved during my studies in the institute.

I have tried to put my maximum effort to get the accurate statistical data. If there is any error or any mistake in collecting the data, please correct it in the best way as I am still learning.










CHAPTER-1
INTRODUCTION

















Introduction
The Cadbury’s Inc has taken the opportunity to offer us a broader view of chocolate category. The Cadbury 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”.






CHAPTER-2
OBJECTIVE












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 analyses:-
(a) SWOT Analysis
(b) PEST Analysis
And also 5 P’s of Marketing:-
• Product
• Price
• Physical Distribution
• Promotion
• Positioning







CHAPTER-3
RESERCH METHODOLOGY








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
Observation Method
The main tool used was, the questionnaire method, 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 and Aligarh.
# To these geographical area questionnaire was given.
# Finally the collected data and information was analyzed and compiled to arrive at data the conclusion and recommendations given.
Sources of secondary
Used to obtain information on , Cadbury and its competitor history, current issues, policies, procedures etc, wherever required.
# Internet
# Magazines
# Newspapers






CHAPTER-4
ABOUT CADBURY









THE LEGEND CALLED CADBURY
1824 – A 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. 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 moduled chocolate bar.
Cadbury today is the market leader in the U.K chocolate confectionary market, employing the most advanced processing technology and management information and control techniques. The company is the confectionary division of Cadbury Schweppes plc which is major force in the confectionary and soft drinks international market.World - wide Cadbury is one of the pre – eminent names in confectionary with impressive range of famous brands.
Quality has been the focus of the Cadbury business from the very beginning as generations have worked to produce chocolate with that very special taste, smoothness and snap, so characteristics of Cadbury’s chocolate.

ORGANIZATIONAL STRUCTURE












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 merely as good as Swiss chocolate 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 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 chocolatiers is an art form depending on recipe traditions, which have grown over the years. Chocolatiers have use their skills to make balanced recipe in which all the ingredients combine to produced chocolate with all the characteristics that enable full delicious taste to be enjoyed by the consumers.
By 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 to 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 20,000 crores ,is the worlds number one non – cola soft drink company having bottling and partnership operations in 14 countries and franchises of its brand in a further 86 countries around the world. Its Hundred Percent subsidiary in India named Cadbury Schweppes Beverage India (private) Limited (CSBIL) started operation in March 1995. The first brand was launched was Crush which was later followed by Canada Dry, Schweppes Tonic Water, Schweppes Bitter Lemon.







CSBIL with its franchise agreement with 19 bottling plants 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


































CHAPTER-5
SWOT AND PEST ANALYSIS OF CADBURY




SWOT ANALYSIS
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. Better market penetration.
5. Second best manufacturing location throughout Cadbury Schweppes.
Weakness
1. Poor technology in India compared to current international technologies (Godiva, Mozart, Fazer, Dint, Naushans, etc...)
2. Ltd. Key products, only one central brand (CDM). Pralines range totally wising in India.
3. “Make in India” tag once the economy opens up wore and imports rush in.
Opportunities
1. Tremendous scope for per capita consumption (160 gms of 8 – 10 kg)
2. Increasing per capita national income resulting in higher disposable income.
3. Growing middle class and growing urban population.
4. Increasing gifts cultures.
5. Substitute to “Mithais” with higher calories/cholesterol.
6. Increasing departmental stores concept – impulse @ at cash counters.
7. Globalization: optimal use of global Cadbury Schweppes.
Threats
a) Major :-
Due to low cost and highest brand equity, it is success in India.
b) Minor :-
Globalization will bring in better brands for upper end of the market (Liest, Monarch, Godiva, etc…).
Conclusion:-
Will lose market share with globalization 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) subsbstitute demand.

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








CHAPTER-6
AN INSIGHT ON 5 P’S OF MARKETING (CADBURY)







5 P’S Of Marketing
1 - PRODUCT
The average company will compete for customer by conforming to his expectation consistently. But the winner will surpass them by constantly exceeding his expectation, delivering to his door step additional benefits which he would never have imagined . 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) Bourn vita
2) Drinking chocolate
3) Cocoa

2 - 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





3 - Physical Distribution – “Place”
Distribution Equity:It takes much more time and effort to build, but once built, distribution equity is hard 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 should know how to sell your products. The cardinal task before the Indian market in 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 in India? With technology and competitive pressure slash in it is becoming increasing difficult for marketers to retain a unique product differentiation for long 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 terrains-climate, 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 to 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 heat affects 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.

4 - Promotion
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 customer memory, communication must first ensure exposure, grab his attention evoke his comprehension, grab his 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 addresses 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, unselfish conscious, pleasure – seeking child within him – and 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 inserts his ATM card. It tells the customer that this would be good time to get out of his 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.










5 - 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 sell it to teenagers with the ‘Smart 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 of 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.












CHAPTER-7
MARKET SEGMENT AND MARKETING STRATEGIES OF CADBURY












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 age 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 (transformation)
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 1990s?
It Stand First Among Second coming. And it wasn’t so much a re-launch 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 CDM 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 CDM 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.
The first commercial 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 unpaternal 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, and 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 has 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 CDM in a way that would appeal to the child lurking within the adult? To inject a modern flavor into CDM, 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 was to mould his 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 Breakthrough
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 his 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.”




Thodi Se Pet Puja, Khabi Bhi Kahin Bhi!



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 on bringing out the child in the man . 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.

















Kya Swaad Hai Zindagi Ka!

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 O & M was 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 in 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 one 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”.
















Thodi Se Pet Puja, Khabi Bhi, Kahin Bhi!

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 broader 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 of 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 bornvita 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 brown 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 brown 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 flagship brand Dairy Milk.
Net profit rose sharply by 41.8% to Rs. 520 million. Reduced material and energy cost and tighter 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 perk with 4%. For the Chocolate Company, Khane Walo Lo Ko 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









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, multinutrition value of milk along with the pinch 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 upgraded from brands such as Cadbury’s to premium international offering such as Tolerance, Lindit and Hersheys. Roughly 5%of the total domestic consumption expected to grow to some 10%. This segment is too good to miss out on.
ThePreviousCadbury’s range available in India did not offer consumer an option to upgrade to international 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 development. 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 improve logistic and distribution competitiveness
• 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 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
Contributing to turnover 1994 Contributing to turnover 2000
Chocolate 59% 64%
Sugar Confectionary 9% 12%
Food Drink 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






CHAPTER-8
CADBURY SUCCESS STORY




















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 these 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 could help promote core consumption opportunities.
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 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 company is dependent on a single category chocolates to drive growth. Effect in expanding confection any portfolio have also not yielded desired results. The management has declared its intention to focus only on 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 claims which have supported growth in the past. While new launched such as milk chocolate and Perk slims have been doing well, 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 Which 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 has 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 brands Positioning Nestle’s brands Positioning
Cadbury Dairy Milk


Fruit n Nut
Creamy bar
Roast Almond
Crackle
Bournvita
“The Real Taste of Life”


Position as adults as an impulse any time purchase – self expression values attached Classic Milk Chocolate


Bar One Positioned as an affordable enriched milk chocolate

Positioned as Trendy, Cool, any time snack.
5 Star / Perk/Break Perk – Positioned as Snacking consumption “Thodi si Pet Pooja”
5 Star Energy bar Reach for the Stars. KitKat Positioned as a snacking consumption “Have a Break, Have a Kit Kat”










CHAPTER-9
DATA ANALYSIS










FINDINGS AND SURVEY

1. Do you eat chocolates?













2. Which brand of chocolates do you use?










3. Where do you buy chocolates from?












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













5. Which cadbury’s product do you usually prefer or use?




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














CHAPTER-10
RECOMMENDATIONS
RECOMMENDATIONS
• Maintain dominance in chocolate, confectionery and market leadership in brown drinks.
• New channels such as gifting, child connectivity and value for money offering to be the key growth drives.
• Grow volume of 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.








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 possible to see the success of Cadbury’s in its indorse its strong potential to continue to do well.



















CHAPTER-11
BIBLIOGRAPHY



















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







ANNEXURE

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

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