Introduction

Cadbury plc, formerly known as Cadbury-Schweppes plc, before it demerged from its Americas Beverages
manufacturing business in 2008 (Peston, 2008), is the worlds leading confectionery manufacturer and
distributor. Cadbury plc operates in over 60 countries, works with over 35,000 direct and indirect
suppliers and employs around 50,000 people (Cadbury India Ltd., 2008).
(i) Cadburys Vision Statement
According to CEO Todd Stitzer, Cadburys vision statement is outlined in its Vision In Action (VIA) plan
(refer to Appendix A), that covers the companys plans for the next 4 years.
Our objective is to deliver superior shareholder returns by realizing our vision to the be
the worlds biggest and best confectionery company. We are currently the biggest, and
we have an enduring commitment to become the undisputed best. At the heart of our plan
is our performance scorecard, delivered through our priorities, sustainability
commitments and culture (Cadbury plc, 2008).
Cadbury plans to deliver superior shareholder returns (Cadbury plc, 2008) by measuring its financial
progress in the areas of growth, efficiency, capabilities and sustainability from 2008 to 2011 (Cadbury plc,
2008).
(ii) Cadburys Mission Statement
Cadburys mission statement outlines its overall business objective and its commitment to its customers.
Our core purpose Working together to create brands people love captures the spirit of what we are
trying to achieve as a business. We collaborate and work as teams to convert products into brands.
Simply put, we spread happiness! (Cadbury plc, 2008)
Furthermore, Cadbury stresses the importance that it places on quality. Apart from its mission statement,
it also references the slogan, Cadbury means quality as an integral part of its businesss activities
(Superbrands, 2008).
Lastly, Cadbury also aims to put A Cadbury in every pocket (Karvy Research, n.d.) by targeting current
consumers and encouraging them to make impulse purchases and by maintaining a superior marketing
mix (Karvy Research, n.d.).

Cadbury India Ltd, as the Indian subsidiary of this confectionery giant, also utilizes the same mission and
vision statements of its parent firm when operating in the Indian market, albeit with different business
strategies and approaches. Since Cadburys activities vary from country to country, this report will simply
examine the activities of Cadbury India Ltd in the Indian market, one of the fastest growing
confectioneries markets in the world (Financial Express, 2008).
Products offered by Cadbury India Ltd.
Cadbury plc manufactures and sells three different kinds of confectionery: chocolate, candy and chewing
gum (Cadbury India Ltd., 2008), but in the Indian market, its product line is split up into the chocolate
confectionery, milk food drinks, candy and gums categories (Cadbury India Ltd., 2008).
This report will examine two different products offered to the Indian market by Cadbury India: Cadbury
Dairy Milk (chocolate category) and Cadbury Bournvita (milk drinks category).
(a) Cadbury Dairy Milk
(i) Pricing
Cadbury India enjoys controlling 70% of the confectionery market in India, of which 30% is directly due
to the success of its Dairy Milk product, which averages sales of around 1 million bars per day (Cadbury
Dairy Milk, 2008; Marketing Communications, 2008). Cadbury Dairy Milk bars are Cadbury Indias cash
cow in the countrys 4000 tonne, Rs. 6.50 billion (around 1.6 billion CAD) chocolate market (Gupta,
2003), as such, has been designated its flagship brand (Cadbury India Ltd., 2008; Chatterjee, 2000).
Part of Cadbury Dairy Milks success lies in its shared history with Indias identity (it was first sold in
1948, one year after the country was made independent from the British Empire) (Cadbury Dairy Milk,
2008) but also in the fact that it is priced relatively cheaply (Chatterjee, 2006) and is relatively affordable
by the Indian masses. Even its smallest Dairy Milk bar, the 13 gram version, is priced at Rs. 5 (about 0.13
CAD), affordable by many middle-class Indians as an occasional treat, but not affordable for those who
buy from the less-then-3-rupee (Rs. 3) segment of the market (Chatterjee, 2006). Its history of operating
in the country and its average level pricing of chocolate bars, has made the Cadbury dairy Milk bar
synonymous with high quality, affordable pure milk chocolate for many Indian customers (Cadbury Dairy
Milk, 2008).
(ii) Consumer segments served and advertising/promotional strategies used
Cadbury India Ltd continuously markets Dairy Milk as a relatively inexpensive treat, towards market
segments divided by age, income, technological knowledge and health-consciousness.
In the 1990s, the company stated promoting the chocolate for the kid in everyone, in an attempt to
appeal to adults as well as children (Cadbury Dairy Milk, 2008).

In order to appeal to potential lower-income customers in the villages of India, further marketing in the
form of the Real taste of life campaign (Cadbury Dairy Milk, 2008) attempted to absorb these customers
into its market share. By using opinion leaders from Bollywood and using extensive advertising in
newspapers, television, magazines and massive billboards across the country, Cadbury managed to
capture the attention of the nation and cement its market share superiority in India (Cadbury Dairy Milk,
2008; Marketing Communications, 2008).
Nowadays, Cadburys is trying to tap into the potential market of younger generation Internet users by
offering contests and hosting competitions online, the most notable being its Pappu Pass Ho Gaya
(Pappu Passed!) joint venture operation with Reliance India Mobile, a branch of Indias largest network
service provider, which allowed students across the country to check their examination grades online and
celebrate with Cadburys Dairy Milk if they did well (Cadbury Dairy Milk, 2008).
Furthermore, Cadbury India continuously develops new versions of its Dairy Milk brand in order to keep
its adult and children consumers satisfied and interested. Variations include the Fruit & Nut and Crackle
& Roast Almond variations (Cadbury Dairy Milk, 2008) which are meant for snacking, as well as the
Cadbury Dairy Milk Desserts, to cater to the urge for something sweet after meals (Cadbury Dairy Milk,
2008). The Cadbury Bournville Dark Chocolate bar, similar to the Dairy Milk bar, targets the healthconscious market segment of the chocolate market, who wish to enjoy the taste of dark chocolate but also
its health benefits (Financial Express, 2008). Lastly, Cadbury Dairy Milk Wowie, with Disney characters
embossed on each chocolate square (Cadbury Dairy Milk, 2008) clearly targets the child segment of its
market. Cadburys market segmentation is quite effective because it allows them to target all three major
market segments: children, adults and technologically-savvy consumers, but it does not serve those
segments of the market that have been divided by income levels. Although Dairy Milk is affordable to the
upper and middle-income consumers who view it as a mid-priced item (Kochhar, 2007), lower income
consumers who buy from the less-than-3-rupee range of chocolate cannot afford to buy Cadbury Dairy
Milk regularly. Cadbury will need to address the needs of this market segment in order to boost its sales of
Dairy Milk.
Indian consumers seem to be satisfied with Cadbury Dairy Milk as its marketing promotes it as an
occasional indulgence, despite popular opinion that it is a relatively expensive luxury product (Cadbury
India Ltd. Analysts Meet, 1999). This restrained marketing has allowed the chocolate to slowly become a
measure of quality for many Indians, as Cadbury Dairy Milk is their Gold Standard for chocolate, where
the pure taste of Cadbury Dairy Milk defines the chocolate taste for the Indian consumer (Cadbury India
Ltd., 2008). In fact, Cadbury Dairy Milk was voted one of the Indias most trusted brands in a poll
conducted in 2005 (Cadbury Dairy Milk, 2008).
(iii) Product Positioning

Cadbury India Ltds main sources of competition come from Amul, Indias own dairy company and Nestle
India, Nestles subsidiary in India. As seen in Appendix B, Cadbury India controls around 70% (Cadbury
India Ltd., 2008) of the chocolate market, whereas Amul controls around 2% (Dobhal, n.d.) and Nestle
India around 27% (Nestle to expand, 2008).
As mentioned earlier, Cadburys main strength comes from it ability to market Dairy Milk products
through altering the theme and functionality of the product as the time demands (Cadbury India Ltd
Analysts Meet, 1999). Although this has allowed it to control more of the market than its closest
competitors, the reasons for its success may also lie in the fact that many Indians still view its chocolates
as luxury products (Cadbury India Ltd Analysts Meet, 1999) and not as household goods. This contradicts
Cadburys assertion that its leadership is maintained by a superior marketing mix (Karvy Research,
n.d.). Cadbury India may have misinterpreted the popularity of Dairy Milk as a sign that the Indian public
has accepted it as a household product. In fact, the booming economy and the increasing affluence of the
burgeoning middle class (Basu, 2004) has promoted the use of status symbols, where the regular
consumption of so-called luxury chocolates such as Cadbury Dairy Milk is viewed as fashionable
(Kochhar, 2007). Despite Amuls longer history in India, its chocolates are viewed as being local and not
luxurious, justifying a lower price tag (Chansarkar et al., 2006). Cadbury India must maintain its current
marketing strategy but slowly start to promote Dairy Milk as a household good so that consumers spend
their rising disposable incomes on it and boost its sales (Rai, 2006).
Amuls origins as a community welfare program in Gujarat, one of Indias most industrialized states, to
becoming a national enterprise (Amul, 2008) spanned the decades during which newly-independent
India forged its identity, thus becoming an integral part of Indias identity and giving its marketing
strategy a new source of authority. Cadbury simply cannot match this kind of national endorsement, so by
at least promoting the fact that it has been operating in India for almost as long as Amul, it can try to be
Indian too. This, in combination with the longest running advertising campaign that Amul is famous for
gives it a brand awareness boost.
Moreover, Amuls reputation for credibility, safety and consumer satisfaction was only reinforced when
Cadbury Indias Chinese-made products were found to be contaminated with worms and melamine (Sinn
and Karimi, 2008). The Gold Standard (Cadbury Dairy Milk, 2008) was no longer gold, nor was it a
standard anymore, as peoples confidence in its safety was shattered. In order to position its products as
safe and affordable treats once again, Cadbury India should make attempts to be even more sensitive to
consumer demands. Customer satisfaction must be given the utmost importance, even if the company has
to run at a loss for a few months, as this will eventually allow it to negate some of the extensive damage
that this negative publicity has to the firms reputation. The new extra-layer packaging of chocolate that is
now being used in the manufacture of Dairy Milk is a good first step to take in reclaiming some of the
publics trust (Vivek, 2004).

Lastly, Amuls innovative ideas will be the bane of Cadbury. Their release of diabetic friendly chocolate
and chocolates catering to different ethnic flavours (Janve and Dogra, 2007) as well as chocolates for
festive seasons allow them to rapidly sway consumers over to their products. This accounts for their
soaring annual market growth rates of 18% annually (Indian Express, 1999).
In comparison to Nestle India however, Cadbury Indias longer track history gives it a competitive edge.
Cadbury has more of a brand recognition power than Nestle has, and it uses this extensively to promote
Cadbury Dairy Milk all over the country. Nestle still has to break into the Indian market; one way to do
this would be to follow Amuls lead and develop and market products that meet specific ethnic needs, such
as chocolates for Diwali and Rakshabandan (two different Indian festivals) (Kochhar, 2007) , concepts
that Cadbury India has yet to explore.
Cadbury India must counter this threat that Nestle and Amul pose, namely, the production of chocolates
specifically for the festive seasons of India. By doing so, Cadbury will be able to position its chocolates as
chocolate specifically designed for India, endearing it to the consumers and boosting its sales.