“Life is like a box of chocolates.

You never know what you're going to get”

Forrest Gump

1
 Chocolate and Cocoa: A Rich History

Chocolate dates back to ancient America when the Mayans, and later the Aztecs,
ground the beans of the Theobroma cacao tree into a bitter beverage, which they
prized for its mystical and medicinal attributes. Chocolate’s name comes from the
Aztec word, xocalatl, which means bitter water. Cortés, the conqueror of the Aztecs,
brought the beans to Europe in the 1500s, where they were used to treat anemia,
fever, gout, hemorrhoids, poor digestion, depression, and heart ailments. Today,
chocolate is usually a highly processed blend of chocolate liquor, cocoa butter (all
fat), cocoa powder, sugar, emulsifiers, and milk—far different from its origins. White
chocolate contains no real chocolate at all—it’s just cocoa fat, sugar, and flavorings.

Chocolate market in India

The size of the chocolate market in India is about 4,000 tonnes and is valued at
Rupees 6500 million (US$ 130 million). Cadbury India has the biggest market share
at 70 per cent while Nestle is the second largest at 20 per cent. Cadbury’s reaches
0.6 million retail outlets.

Confectionary Unit 2002- Growth 2003- Growth

03 04
Sugar Confectionary / gums Tonns 163110 10 176170 8
(Volume)
Sugar Confectionary / gums Rs 16.8 10 18.5 6
(Value) Billion
Chocolates (Volume) Tonns 27000 9 30000 10
Chocolates (Value) Rs 8.5 12 9.4 10
Billion

Chocolates is impulse category

The impulse category is finally driven by visibility and purchasing power of

consumers. Traditionally, this is how products are positioned within the impulse
category. First come soft drinks, which is a major market. They are followed by
biscuits, sugar confectionery, ice creams and salted snacks. In the past, chocolate
companies used to consider only the different brands in the chocolate market as their
competitors. That was a mistake.

In real life, chocolate products are fighting for a share of the consumers' pockets.
They are facing competition not only from chocolates but also other impulse products
such as soft drinks, biscuits, salted snacks and ice-cream. To maintain the share of
the chocolate market in the impulse market, the chocolate industry has to make sure
that it grows in

line with the impulse market or grows faster than that. Since the share of chocolates
in the impulse category is just six per cent, the opportunities are plenty here.

2
Despite the fact that Indians have strong affinity for sweets, the size of domestic
confectionery market is small on account of traditional consumer tastes and habits.
The Chocolate market in India is a niche market penetrated largely in urban areas
and per capita consumption is low as compared to those in developed countries of
the West.

SWOT ANALYSIS of chocolate industry

Strengths

• Customers of chocolates are not price sensitive

The consumer is not price sensitive. But the category is price sensitive. Downgrading
does happen in other FMCG products. Chocolate demand is however more a function
of affordability. Demand growth depends on shifts in income pyramid. When the
economy grows at a lower pace, the upward shift in income pyramid is slower. This
affects the rate at which new consumers are added. But existing consumers, who can
afford the product do not downgrade. When we introduce lower priced products in
smaller sizes, we add to the consumer base. Our existing consumers do not start
buying the smaller chocolates.

Weakness

• Building a direct network of retailers i.e weakness of storage and logistics

Chocolate needs to be distributed directly, unlike other FMCG products like soaps and
detergents, which can be sold through a wholesale network. 90% of our products are
sold directly to retailers. Building such a direct network in for distribution is a
daunting task.

• Chocolates are not viewed as a snack food

Behaviorally, chocolates are still consumed as a chocolate and not as a filler. Perk still
competes with a Dairy Milk and not with biscuits/ other snack foods. India is still far
away from using chocolates as a snack food. The chocolate consumers need to have
an offer that adds value before accepting chocolates as a snack. Because at the end
of the day, how many Indians can afford a snackfood priced at Rs16-17 for 50gms?

Low levels of consumption

Compared to Western countries, chocolate consumption in India is considered to be
on the low side. Whilst per capita chocolate consumption is a buoyant 8 kilograms in
the UK, it stands at a rather modest 165 grams in urban India.

Opportunity

• Huge untapped urban population (middle class population)

3
Chocolate consumption in urban India itself is low. There is a large untapped demand
in urban market alone. Only 60mn people out of the urban middle class population of
about 280mn consume chocolates.

Threats

• Threat from free availability of imported brands

The premium brands, which come through official channels, do not pose a threat to
the chocolate market, as these cater to a small niche market. However there is a lot
of dumping from neighboring countries like Dubai, Nepal, etc of inferior brand of
imported chocolates. These are not only of low quality, but are brought very near to
their expiry dates. Most of the cheap chocolate brands that are available do not meet
Indian Food Regulations. A legislation is required for these brands to conform to
Indian disclosure norms on price, manufacture date, ingredients, etc which has
already been issued.

4
MARKET SHARE OF VARIOUS PLAYERS IN CHOCOLATE INDUSTRY

2%

7%

Cadbury
22% Nestle
Amul
69%
Others

5
 CADBURY INDIA

Background

Cadbury Schweppes is the No.1 confectionery and third largest soft drinks company
in the world. The origin of the group goes back to over two centuries.
Some of the popular international brands of the company are Cadbury Dairy Milk, Dr
Pepper, Flake, Trebor Basset, Snapple and Motts. The company also has Halls,
Clorets, Trident, Dentyne and Bubbas bubble gum range in its portfolio with
acquisition of Adams in December 2002.

Since 1969, Cadbury Schweppes’ has focused on confectionery and non-alcoholic

beverages. In 2004, 60 per cent of the Group’s net sales came from confectionery
and 40 per cent from beverages. The company employees around 55,000 people in
over 200 countries around the world.

Cadbury in India

Cadbury India is a wholly owned subsidiary of Cadbury Schweppes which has

operated in the country for more than 55 years. It was originally incorporated as a
wholly owned subsidiary of Cadbury Schweppes Overseas Ltd in 1948. The company
today employs nearly 2,000 people across India. Cadbury India is the No. 1
confectionery company with a 70 per cent market share in India. It is a dominating
player in the Indian chocolate market with strong brands like Dairy Milk, Five Star,
Perk, Gems, etc. Dairy milk is the largest chocolate brand in India.

Cadbury is mainly into three segments

Chocolates - Cadbury India is the market leader in the chocolate confectionery

market in India with over 70 per cent market share. The leading brands in this
category are Cadbury’s Dairy Milk, Fruit & Nut, Crackle, Temptations, 5 Star, Perk &
Celebrations Gift boxes. For more than five decades now, Cadbury has enjoyed
leadership position in the Indian chocolate market to the extent that 'Cadbury’ has
become a generic name for chocolate products. Cadbury has leading brands in all the
segments viz bars (Dairy Milk, Crackle, Temptations), count lines (5 star, Milk Treat),
panned confectionery (Gems) and wafer chocolates (Perk), eclairs (Cadburys'
Eclairs), tofees (English Toffee).

Sugar Confectionery – Cadbury Dairy Milk Eclairs is one of the leading brands in
this category. It is amongst the largest éclair brands in the market in terms of value
share. Cadbury also owns Halls (which was acquired as a part of the global
acquisition of the Adams business from Pfizer in 2003). Halls is amongst the largest
brands in its segment of Minty/ Breath freshness brands in India.

Food Drinks – Cadbury’s Bournvita is a leading brand in the brown drinks segment
of milk/ malted food products. Cadbury’s other products include Drinking Chocolate
and Cocoa powder. Overall share in the malted food drinks market is estimated to be
around 19 per cent.

6
The company has recently made a foray into snacking category with Cadbury Bytes,
its sweet snacking brand. The company has been performing well in India. The net
sales of the company have increased from around US$ 131.6 million in 2000 to US$
166.3 million in 2004.

Factors for Success

• Extensive distribution network

Cadbury’s brands are available in over a million outlets across the country. The
distribution network directly covers almost the entire urban population. The company
has invested significantly in building such an extensive network. The company uses
Information Technology to improve its logistics and distribution competitiveness.

Cadbury has improved the distribution quality of its products with the installation of
refrigerators at several outlets. This helps in maintaining product quality in summer,
when sales usually dip due to the fact that the heat affects product quality and
thereby consumption.

• Creation of strong brands

Cadbury owes its success to strong brand equity and resultant consumer preference
that it enjoys in India.
The company has built strong brand equity through consistently high product quality,
relevant, insightful and entertaining communication. Cadbury has developed new
channels for marketing its brands such as Gifting and Snacking. The company places
great emphasis in ensuring display dominance at the point of purchase

• Customisation of products for India

Cadbury India has spent time in understanding the Indian consumers. Leveraging its
55 years of experience in India, the company has customised its products to the
Indian markets. It also offers products at affordable price points so as to increase its
market penetration.

• Leveraging the India Advantages

7
Though, India contributes to less than 5 per cent of the global revenues today, India
is critical to the global strategy of the company

• Managerial Talent

Cadbury has begun recruiting management graduates in India to serve its global
operations.

• Huge market potential

India offers huge market potential and is a priority market for Cadbury. The company
also leverages India as a manufacturing base for producing products for the overseas
market. Cadbury India has 4 company owned factories and as many third party
manufacturing contractors. It also has a wide Sales & Distribution infrastructure
consisting of 33 depots managed by 4 regional sales branches across India.

Future Plans

Cadbury India expects strong growth in India in future. The company plans to
increase the franchise of its existing brands and continue to explore new product
opportunities including adjacent market opportunities. Cadbury India is also looking
for more opportunities in the SAARC region.

8
 Nestle India limited

Nestle India Ltd, 51% subsidiary of Nestle SA , is among the leading branded food
player in the country. It has a broad based presence in the foods sector with leading
market shares in instant coffee, infant foods, milk products and noodles. It has also
strengthened its presence in chocolates, confectioneries and other semi processed
food products during the last few years. The company has launched Dairy Products
like UHT Milk, Butter and Curd and also ventured into the mineral water segment in
2001. Nestle’s leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat,
Munch and Pure Life.

Nestle has a presence in the following categories - Baby Food, Milk products,
Beverages (Coffee, malted beverage), Chocolates & confectionery and other
processed food products.
Category wise turnover breakup and growth

% contribution 2001 2000

to turnover Rs mn Rs mn % yoy
Milk Products 43 8159 7375 10.6%
Beverages 29 5627 4903 14.8%
Culinary Products 14 2764 2310 19.7%
Chocolate & Confectionery 14 2646 2179 21.5%
Total 19197 16768 14.5%

Chocolates & Confectionery

Nestle forayed into chocolates & confectionery in 1990 and has cornered a fourth
share of the chocolate market in the country. The category contributes 14% to Nestle
‘s turnover. It has expanded its products range to all segments of the market The
Kitkat brand is the largest selling chocolate brand in the world. Other brands include
Milky Bar, Marbles, Crunch, Nestle Rich Dark, Bar-One, Munch etc. The sugar
confectionery portfolio consists of Polo, Soothers, Frootos and Milkybar Eclairs. All
sugar confectionery products are sold under the umbrella brand Allen's. Nestle has
also markets some of its imported brands like Quality Street, Lions and After Eight.
New launches such as Nestle Choco Stick and Milky Bar Choo at attractive price
points to woo new consumers. Chocolate confectionery sales registered a strong
21.5% yoy growth in 2001 aided by good volume growth in Munch, Kitkat and Classic
sales. Nestle relaunched Bar-One during the year

9
Chocolates ad spends in TV saw 31% growth in 2005

(24 January, 2006)

Key Findings:

• Chocolates advertising spends in TV grew 31 per cent in 2005 compared to

2004
• Cadbury's India, the highest spender in chocolates in 2005
• Cadbury Dairy Milk chocolate leads chocolates advertising in 2005
• Focus on entertainment + kids channels
• Just 11 per cent of advertising spends used to boost up sales

This week, AdEx India looks at the 'Chocolates' category. Let's look at the advertising
spends in chocolates category across the years 2000-05.

• Growth of 31 per cent in chocolates advertising spends in 2005 compared to

2004.
• 2003, the only year to observe a dip in chocolates advertising on TV.

Let's find out who contributes the maximum advertising in the year 2005 on
television?

10
 • Top fiv espenders constitute 98 per cent of the advertising revenue
• Cadbury's India, the highest spender in 2005

Let's look at top 10 Chocolates brands advertised on television in 2005.

• Top 10 chocolates brands constitute 81 per cent advertising spends

• Cadbury Dairy Milk chocolate at first position with 15 per cent share

11
 • Nestle Munch at second position

Let's find out which type of channels do the chocolates advertisers prefer to spend
on? The pie below shows its advertising share in the year 2005.

• Entertainment channel, the choice of chocolates advertisers

• Kids channel, the second choice

Let's look at the share of sales promotional advertising in this category and the
various type of promotions used.

12
Marketing research is the systematic design, collection, analysis an reporting of data
and findings relevant to a specific marketing situation facing the company.

Marketing research process

Define the problem and research objective

Develop the research plan

Collect the information

Analyze the information

Present the findings in Report

Make decisions

Step 1: Define the problem and the research objectives

The 1st step in research is formulating a research problem. It is most important stage
as poorly defined problems will not yield useful results. Also the marketing
management must be careful not to define the problem too broadly or too narrowly.
In order to identify the research problem, three categories of symptomatic situations,
namely, overt difficulties, latent difficulties and unnoticed opportunities should be
studied. Overt difficulties are hose which are quite apparent and which manifest
themselves. Latent difficulties are those which are not so apparent and which, if not
checked, would soon become evident. Unnoticed opportunities indicate the potential
for growth in a certain area of marketing. Such opportunities are not clearly seen and
dome effort is required to explore them.

Our research problem:

Is there a scope for new brand of chocolates to enter into the chocolate market in
India?

Research objectives:
• Are there any unnoticed opportunities existing in chocolate market in India i.e.
is there any demand/need of consumers whcich is not being fulfilled by
existing brands.
• To see whether the new brand will be able tosustain its position against the
market leader & other competitors
• Will the consumers accept the new brand

Step 2: Develop the research plan

Designing a research plan calls for decisions on data sources, choice of research
design, research approaches, research instruments, sampling plan and contact
methods.

13
 Research
Plan

Research
Data Research Research Sampling Contact
Approache
Sources Design Instrument Plan Methods
s

• Data Sources
The researcher can gather both secondary and primary data. Secondary data are
data that were collected earlier whereas primary data are data freshly gathered for a
specific purpose or for a specific research project.

Data Sources

Secondary Data Primary Data

In our market research we have used both secondary as well as primary data but our
main focus is on primary data.

• Choice of Research Design

Research design is the plan, structure and strategy of investigation conceived so as
to obtain answers to research questions and to control variance. A research design
specifies the methods and procedures for constructing a particular study. Broadly
speaking the research design can be grouped into three categories- exploratory
research, descriptive research and causal research.
An exploratory research focuses on generation of new ideas and is generally based
on secondary data and is a preliminary investigation. A descriptive study is

14
undertaken when the researcher wants to know the characteristics of certain group
and is well structured. A causal research is undertaken when the researcher is
interested in knowing the cause and effect relationship between two or more
variables.

Research design

Exploratory design Descriptive design Causal design

Cross sectional

Surveys

In this research we have undertaken descriptive studies in which a cross sectional

study was conducted through means of a survey.

• Research Approaches

Primary data can be collected in five ways: through observations, focus groups,
surveys, behavioral data and experiments.

15
 Research
Approaches

Behavioral
Observations Focus groups Surveys data
Experiments

In this research we have used surveys as our research approaches since it is best
suited for descriptive research and helps immensely in understanding the people’s
knowledge, preferences and satisfaction.

• Research Instruments
Marketing researches have a choice of three main research instruments:
questionnaires, psychological tools and mechanical devices.

Research Instruments

Questionnaires Psychological tools Mechanical devices

We will discuss in detail the format of the structured non-disguised questionnaire

later in this report.

• Sampling Plan

16
After deciding on the research approach and instruments, the marketing researcher
must design a sampling plan. This calls for three decisions regarding sampling unit,
sample size and sampling procedure.

Sampling Plan

Sampling unit
Sample size Sampling procedure
100 consumers + 22
Target market of 5-60 retailers
i.e. sample design
people

Non- probability
sampling

Quota Sample

Sampling Unit: Who is to be surveyed? In our research we have taken the whole
target market as our sampling unit out of which samples would be selected and
surveyed. The target market of chocolates is right from children to old people.

Sample Size: How many people are to be surveyed? Our sample size is 100
respondents (consumers) with approximately equal number of males and females.
Also we surveyed 22 retailers

Sampling Procedure: How should the respondents be chosen? We have decided to

base our sample respondents on basis of quota sample in which a total of 100
respondents are to be covered with the following inter related controls:

Age Group Male Female Total

5-10 & 11-15 12.5 12.5 25
16-20 12.5 12.5 25
21-35 12.5 12.5 25
35- 50 6.25 6.25 12.5
50 & above 6.25 6.25 12.5
Total 50 50 100

The above figures are in percentages and are an approximate estimation done before
the survey was conducted so as to understand the average distribution of
respondents across the various age groups.

• Contact methods

17
Once the sampling plan has been determined, the marketing researcher must decide
how the subject should be contacted: mail, telephone, personal or online interview.

Contact methods

Telephone Personal
Mail
Mail Survey
Survey Telephone interview Online interview
interview interview

Intercept
interview

In our survey we have made use of three forms of contact methods: Personal
interview, online survey and telephonic survey.

Step 3: Collect the information

Our research group collected the information over a period of 15 days and from
various locations such as malls, residential complexes, colleges and schools and also
retailers.

Step 4: Analyze the information

After the process of gathering information was completed we tabulated the data and
developed frequency distributions and extracted the findings from the survey.

Step 5: Present the findings

Finally we prepared a project report on our survey and along with the findings we
also presented our recommendations.
Step 6: Make the decision

18
 MARKET SURVEY FOR CHOCLATES
QUESTIONNAIRE FOR CONSUMERS

Name: ____________________________________________Gender:
_____________

Age group: Family Size:

 5-10 yrs 3 members

 11-15 yrs 4 members
 16-20 yrs more than 4 members
 21- 30 yrs
 31-40 yrs
 40 yrs & above

Place of residence:
____________________________________________________

Social Class:
_________________________________________________________

Occupation:
__________________________________________________________

Location of
work/college/school:__________________________________________

Monthly spending on clothes, eating out, hanging with friends etc

_____________

In one word describe a foodstuff that says “Sharing your joy with people
you love”
_____________________________________________________________
________

What do you normally prefer to eat as a sweet item

___________________________

Do you like chocolates?

 Very much
 Okay okay
 Not much
 Not at all

How many times you buy chocolates?

 Once every day

 2- 3 times a week
 Once a week
 On special occasions only

19
  Others, plz specify
What does chocolates signify to you?
________________________________________

Where do you normally buy chocolates from?

 Your local kirana shops

 Supermarkets like Big Bazaar

Rate your preferences in choice of chocolates on a scale of 1-5 (5 being

highest rank)

 Taste
 Sweetness
 Price
 Calories
 Brand of the chocolate
 Packaging
 Ingredients/ flavours

Which brand of chocolates you prefer?

 Nestle
 Cadbury’s
 Amul
 Foreign brands like Hershey’s
 Any other, plz specify
_______________________________________________

Why do you prefer that particular brand?

____________________________________________________________________
____________________________________________________________________
________

Is there anything that you feel is lacking in your preferred brand of

chocolates? If yes, plz describe
________________________________________________________________
____________________________________________________________________
____

Do you think that the present choices available in chocolates are costly? If
yes, what will be your ideal price range?

Would you prefer to switch to chocolates of another brand if it is cheaper

than your preferred brand without any change in quality & taste?
____________________________________________________________________
____________________________________________________________________
________

20
If you were given a chance to prepare a new variety of chocolates what
would you make? i.e any new flavours or ingredients that you wish for in
chocolates.

MARKET SURVEY FOR CHOCOLATES

QUESTIONNAIRE FOR RETAILERS

Name of the
shop:________________________________________________________

Location:_____________________________________________________
__________

Which brands of chocolates does the shop sell?

_____________________________________________________________
_____________________________________________________________
______________________

Highest sales of which brand of chocolates ( i.e. how many in 1 day)

____________________________________________________________________
____

What are customers preferences in the choice of chocolates?

 Taste
 Sweetness
 Price
 Calories
 Brand of the chocolate
 Packaging
 Ingredients/ flavours

Sales of chocolates are highest during which period?

_____________________________________________________________
___________

Are there any customer complaints about the existing brands of chocolates?
_____________________________________________________________
___________

Has the demand for chocolates risen in the past few years?
____________________________________________________________________
____

21
 Analysis of the questionnaire

Our questionnaire is a structured non-disguised questionnaire containing both open

ended and close ended questions. Let is now understand the significance of the
various questions asked in the questionnaire and what information we hoped to
collect through each of the question.

QUESTIONNAIRE FOR CONSUMERS

Name: _______________________________________Gender: _____________

This question would help to achieve the conditions of sample of surveying 50% males
and 50% females.

Age group:

 5-10 yrs
 11-15 yrs
 16-20 yrs
 21- 30 yrs
 31-40 yrs
 40 yrs & above

This question would help us to understand the buying preferences and the demands
of consumers as per the age structure.

Place of residence:
____________________________________________________
Occupation:
__________________________________________________________
Monthly spending on clothes, eating out, hanging with friends etc
_____________
Location of
work/college/school:__________________________________________

These questions were included so as to understand the correlation between the

occupation, lifestyle, social class and the influence of social environment i.e friends
and family.

In one word describe a foodstuff that says “Sharing your joy with people
you love”
_____________________________________________________________
________
(Word association question)
Through this question we wanted to know whether the consumers perceived
chocolates as a symbol of love, togetherness and happiness.

What do you normally prefer to eat as a sweet item

___________________________
(Completely unstructured question)
Through this question we wanted to estimate the proportion of population who
preferred chocolates as their main sweet item.

22
Do you like chocolates?
(Like scale question)
 Very much
 Okay okay
 Not much
 Not at all
This question helps to understand the level of like and dislike for chocolates amongst
the target population.

How many times you buy chocolates?

(Multiple choice question)
 Once every day
 2- 3 times a week
 Once a week
 On special occasions only
 Others, plz specify

This helps us to understand the buying pattern and schedule.

What do chocolates signify to you?

________________________________________
(Unstructured question)
This question was designed to have an insight into the customers mind to understand
the emotions which he associates with chocolates.

Where do you normally buy chocolates from?

(Dichotomous Question)
 Your local kirana shops
 Supermarkets like Big Bazaar

This question would help us to understand which of the distribution channel is more
effective and preferred by the consumers.

Rate your preferences in choice of chocolates on a scale of 1-5 (5 being

highest rank)
(Importance scale)
 Taste
 Sweetness
 Price
 Calories
 Brand of the chocolate
 Packaging
 Ingredients/ flavours

This question was designed so that we can understand the customers’ scale of
importance to the different attributes of chocolates.

Which brand of chocolates you prefer?

(Multiple choice question)
 Nestle

23
  Cadbury’s
 Amul
 Foreign brands like Hershey’s
 Any other, plz specify
_______________________________________________

The simple purpose of this question was to find out the customers preferred brand of
chocolates.

Why do you prefer that particular brand?

(Completely unstructured questions)
____________________________________________________________________
____________________________________________________________________
________

Is there anything that you feel is lacking in your preferred brand of

chocolates? If yes, plz describe
________________________________________________________________
____________________________________________________________________
____

These questions would help us to find out the reasons behind the customers
preference of a particular brand of chocolates and also to find out if the customers
felt something lacking in the existing varieties of chocolates.

Do you think that the present choices available in chocolates are costly? If
yes, what will be your ideal price range?

Would you prefer to switch to chocolates of another brand if it is cheaper

than your preferred brand without any change in quality & taste?
(Intention to buy scale)
____________________________________________________________________
____________________________________________________________________
________

These questions were formed so as to take the customers opinion regarding the
prices of the existing brands of chocolates and also their ideal price range. As well as
to find out the customers intention to buy in case of a new brand of chocolate if it is
priced cheaper.

If you were given a chance to prepare a new variety of chocolates what

would you make? i.e any new flavours or ingredients that you wish for in
chocolates.
_____________________________________________________________
_____________________________________________________________
______________________

This is the most important question for the survey which helps us to fulfill the
research objective of uncovering hidden opportunities i.e. to find out the demands of
customers in terms of ingredients and flavours of chocolates which are not available
in the existing brands.

24
QUESTIONNAIRE FOR RETAILERS

Name of the shop:

________________________________________________________

Location:
_____________________________________________________________
__

These 2 questions will help us to form a relationship between the chocolate sales of
the retail unit and its location i.e. geographical segmentation.

Which brands of chocolates does the shop sell?

_____________________________________________________________
_____________________________________________________________
______________________

Highest sales of which brand of chocolates ( i.e. how many in 1 day)

____________________________________________________________________
____

These questions are formed to find out the different brands of chocolates stocked by
the retailer and also to find which brand has the highest sales.

What are customers preferences in the choice of chocolates?

 Taste
 Sweetness
 Price
 Calories
 Brand of the chocolate
 Packaging
 Ingredients/ flavours

This helps us to get the retailers point of view to the importance given to the various
attributes of chocolates by consumers.

Sales of chocolates are highest during which period?

_____________________________________________________________
___________

This question helps to understand the buying pattern of consumers.

Has the demand for chocolates risen in the past few years?

This question helps us in answering the question as to whether the market for
chocolates has increased or not.

25
Sample Size: 122 respondents
100 consumers – 82%
22 retailers – 18%

SAMPLE SIZE

Retailers
18%

Consumers
Retailers

Consumers
82%

100 Consumers:
46% males
54% females

CONSUMERS

Males
46% Males
Females
Females
54%

Age Group

26
5-10 & 11-15: 26 respondents
16-20: 28 respondents
21-30: 24 respondents
35- 50: 11 respondents
50 & above: 11 respondents

AGE GROUP

11% 26% 5-10 & 11-15

11%
16-20
21-30
35- 50
24%
28% 50 & above

Age group: 5-10 & 11-15 years : 26 respondents

Males: 16 respondents
Females: 10 respondents

AGE GROUP: 5-10 & 11-15

Females
38%
Males
Females
Males
62%

Age group: 16-20 years : 28 respondents

Males: 15 respondents
Females: 13 respondents

27
 AGE GROUP : 16 - 20

Females,
Males
13, 46% Males, 15,
54% Females

Age group: 21-30 years: 24 respondents

Males: 12 respondents
Females: 12 respondents

AGE GROUP: 21-30

Females, Males , 12, Males

12, 50% 50% Females

Age group: 35- 50 years: 11 respondents

Males: 2 respondents
Females: 9 respondents

28
 AGE GROUP: 35- 50

Males, 2,
18%

Males
Females

Females, 9,
82%

Age group: 50 years & above: 11 respondents

Males: 2 respondents
Females: 9 respondents

AGE GROUP: 50 & above

Males, 2,
18%

Males
Females

Females, 9,
82%

OCCUPATION
Student: 53%
Service & Business: 25%
Housewife: 14%
Retired: 8%

29
 OCCUPATION

Student
8%
14%
Service &
Business
53% Housewife
25%
Retired

Correlation between age group, location and monthly spending

Age group: 5-10 & 11-15

AGE GROUP: 5-15 & MONTHLY SPENDING

5, 19%

9, 35%
0-50
50-100
100-500
6, 23% 500 and above

6, 23%

Location of Residence:
Gandhinagar South: 2
Munshi Nagar: 11
Kankairaiya Lake: 6
Geeta Mandir: 2
Nirma University: 3
Thaltej: 2

30
Age Group: 16-20

AGE GROUP: 16-20 & MONTHLY SPENDING

4, 14%
7, 25%

100-500
500-1000
1000-5000
5000 & above
5, 18%
12, 43%

Location of Residence:
Gandhinagar South: 1
Munshi Nagar: 12
Kankairaiya Lake: 8
Geeta Mandir: 1
Nirma University: 3
Thaltej: 3

Location of college/ work:

Gandhinagar South: 0
Munshi Nagar: 12
Kankairaiya Lake: 4
Geeta Mandir: 2
Nirma University: 10
Thaltej: 0

Age Group: 21-35

31
 AGE GROUP: 21-35 & MONTHLY SPENDING

3, 13% 1, 4%

100-500
500-1000
11, 45% 1000-5000
9, 38% 5000 & above

Location of Residence:
Gandhinagar South: 5
Munshi Nagar: 8
Kankairaiya Lake: 4
Geeta Mandir: 1
Nirma University: 4
Thaltej: 2

Location of college/ work:

Gandhinagar South: 4
Munshi Nagar: 6
Kankairaiya Lake: 2
Geeta Mandir: 2
Nirma University:9
Thaltej: 1

Age Group: 35 & above

32
 AGE GROUP: 35 & above & MONTHLY
SPENDING

2, 9%
6, 27%
100-500
500-1000
7, 32%
1000-5000
5000 & above

7, 32%

Location of Residence:
Gandhinagar South: 2
Munshi Nagar: 8
Kankairaiya Lake: 1
Geeta Mandir: 7
Nirma University: 4
Thaltej: 0

Location of college/ work:

Gandhinagar South: 0
Munshi Nagar: 3
Kankairaiya Lake: 0
Geeta Mandir: 4
Nirma University: 2
Thaltej: 0

• Normally prefer as a sweet item

Chocolates: 53%
Ice creams: 11%
Traditional Sweets: 28%
Cake: 6%

33
 PREFERENCE AS A SWEET ITEM

6% Chocolates
29% Ice creams
54% Traditional Sweets
11% Cake

• Do you like chocolates?

Very much: 59%
Okay Okay: 28%
Not much: 11%
Not at all: 2%

LIKE AND DISLIKE OF CHOCOLATES

2%
11%

Very much
Okay Okay
28% Not much
59%
Not at all

• How many times do you buy chocolates?

Once every day: 33%
2-3 times a week: 30%
Once a week: 12%
Special occasions: 25%

34
 BUYING PATTERN

Special
occasions Once every
25% day Once every day
33%
2-3 times a week
Once a Once a week
week
Special occasions
12%
2-3 times a
week
30%

• Where do you normally buy chocolates from?

Kirana shop: 79%
Supermarkets: 9%
Both: 12%

PREFFERED DISTRIBUTION
CHANNEL

12%

9%
Kirana shop
Supermarkets
Both

79%

• Which are the top attributes a consumer looks for while making his
decision?
28% respondents said taste was the most important factor of selection
27% respondents said brand was the most important factor of selection
25% respondents said ingredients/ flavours was the most important factor of
selection
20% respondents said packaging was the most important factor of selection

35
 PREFERENCES

Packaging
Taste
20%
28% Taste
Brand
Ingredients
Ingredients
Packaging
25% Brand
27%

On an average the scale of preference was as follows:

1st priority: Taste
2nd priority: Brand
3rd priority: Packaging
4th priority: Flavours
5th priority: Sweetness/less sweet
6th priority: Calories
7th priority: Price

• Which brand of chocolates you prefer?

Cadbury’s: 57%
Nestle & Cadbury: 18%
Cadbury & Foreign Brands: 10%
Only Foreign Brands: 9%
Amul: 2%
Nestle: 2%
Nestle & Foreign Brands: 2%

36
 MARKET LEADER
2% Cadbury’s

2%
Nestle & Cadbury
2%
9% Cadbury & Foreign
Brands
10%
Only Foreign Brands

57%
18% Amul

Nestle

Nestle & Foreign

Brands

• Why do you prefer your choice of brand?

Majority of the respondents said that they liked a particular brand of their choice
especially Cadbury because of taste, quality and most importantly brand name and
packaging.

• Is there anything lacking according to you in your preferred brand?

(amongst the existing varieties)
No: 84%
Yes:16%

SATISFACTION GRAPH

Yes
16%

No
Yes

No
84%

37
The respondents who replied yes, have stated the following attributes as lacking in
the existing varieties of chocolates:
• Lack of chocolates in attractive shapes
• High price
• Not enough crunchier
• Not good as compared to foreign brands

• Are the present choices available in chocolates, costly? If yes, what

will be your ideal price range?
Yes: 45%
No: 55%

PRICES: HIGH OR LOW

Yes
45% No
No
Yes
55%

Ideal price range:

Quantity Existing prices Ideal price

range
40 gm Rs 18-20 Rs 12-15
23 gm Rs10 Rs 6-8
15 gm Rs 5-7 Rs 3-5

• Would you prefer to switch to another brand?

Yes: 53%
No: 43%
Indifferent: 4%

38
 PRICE SENSITIVITY OF CONSUMERS

Indifferent
4%
No No
43%
Yes
Yes
53% Indifferent

• New flavours/ ingredients

98% of respondents said that they wanted a healthier, less sweet and lesser calories
chocolates which even diabetic people can eat.
Only 2% said that they wanted chocolates to be more sweeter.

54% of the respondents said that they wanted new flavours such as:
Vanilla- 10%
Butterscotch- 9%
Blackforest- 2%
Strawberry- 10%
Coffee-5%
Mint-4%
Elaichi-1%
Swiss flavour- 1%
Cake flavours-1%
Kesar-2%
Caramel 5%
Bitter cocoa-2%
Ice cream chunks in between of chocolate balls

28% of respondents said that they want an abundant of nuts and dry fruits like
cashews, almonds, pistachios, anjeer, walnuts and so on.

27% of the respondents said that they want fresh fruits/ fruit flavoured chocolates
like:
Litchi- 1%
Orange-2%
Mango-6%
Fresh pineapple-3%

DATA ANALYSIS OF RETAILERS

• Which brand of chocolates does shop sell?

39
22% of retailers stock cadbury’s
19% or retailers stock Nestle
13% of retailers stock Amul
3% of retailers stock imported brands.

• Which brand has the highest sales?

HIGHEST SALES

Nestle, 3, 14%

Cadbury's
Nestle
Cadbury's, 19,
86%

• When is the sale of chocolates the highest?

All Time, 3,
14%

Festivals
All Time

Festivals, 19,
86%

Sales are normally higher during

Festivals
Special occasions like X mas, valentines day, friendship day

40
 LIMITATIONS OF THE RESEARCH

• Large size of target population

The target population of chocolates is each and every person with teeth right from
children to old people. Our sample size of 100 thus cannot be said to be the correct
representation of the target market.

• Fragmentation
Chocolates are not sold in exclusive shops but in simple retail shops which number 1
million in India. Thus it is very difficult to estimate the sales and buying pattern of
consumers in general.

41
 FINDINGS

• In the age group of 16-20 and 21-30, the average monthly spend is not
influenced by the place of residence/ social class but rather on, where a
person studies/works i.e by the social circle of his friends and colleagues.

• The consumers by and large are satisfied with the present choices available in
chocolates i.e. there are no complaints of consumers as regards to existing
varieties of chocolates

• However there are many new wants and demands of consumers in terms of
new flavours and ingredients of chocolates which the present brands of
chocolates have not introduced into the Indian markets.

• There is a substantially low margin of difference in terms of people who are

sensitive to price of chocolates and hence it cannot be proved conclusively
that introducing a chocolate at a lesser price than the prevailing price will lead
to capturing of market share.

• Consumers attach more value to the brand of the chocolates as well as the
packaging i.e. the quality of the chocolates.

• 79% of chocolate sales happen through kirana shops i.e. mom and pop shops
which says that chocolate is a commodity which has to be available to the
consumer when and where he wants it. The sales of chocolates largely depend
on its availability to the consumer at his convenience.

42
 RECOMMENDATIONS

• There is a lot of demand for chocolates the consumers and yet a lot of it
remains untapped by the existing brands. So introducing a new brand/ player
in the chocolate market is certainly a feasible idea to a fair extent.

• However since the present varieties of chocolates in terms of flavours &

ingredients are suiting the consumer needs, the new brand must seek to cater
to the untapped demands of consumers by introducing new flavours/
ingredients.

• Also, from the above analysis we can see that there is no sufficient proof to
show that customers are price sensitive. Thus introducing a cheaper variety of
chocolates may not necessarily help in capturing substantial market share.
However for the price sensitive consumers, a lower end version of chocolates
can be introduced.

• Brand is a very important criterion of purchasing for the consumers. Hence

instead of trying to compete with huge brands like Cadbury’s and nestle, the
new brand should try to position itself in a new demand market.

• Also it should try to develop and introduce healthier, less calorific chocolates
that are projected not just a sweet item/dessert but as a complete wholesome
snack.

43
 Bibliography

• www.indiainfoline.com
• www.ibef.org
• Marketing Management – Philip Kotler

44