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A PROJECT REPORT ON

STRATEGIC MANAGEMENT PLANS OF NESTLE & CADBURY


Submitted By
Mr. !i"#$!% Amb&'(!r
R&'' N&. ) *+,,-
M.C&m Sem I
.Bu"i$e"" M!$!/eme$t0
A1!demi1 Ye!r) 2,*3 4 *+
U$der t#e /uid!$1e &5 PROJECT GUIDE
PROF. 6ELAN7AR
SUBMITTED TO UNIERSITY OF MUMBAI
MULUND COLLEGE OF COMMERCE
S. N ROAD8 MULUND.6EST0
MUMBAI 4 3,,,9,
DECLARATION
I , Vaishnav Ambolkar Roll No. 15003 Student of Mulund olle!e "f ommer#e, S. N Road,
Mulund$%est& '000(0, stud)in! in M. om *art + I hereb) de#lare that I have #om,leted the
,ro-e#t on : STRATEGIC MANAGEMENT PLANS OF NESTLE & CADBURY ; under
the !uidan#e of ,ro-e#t !uide Pr&5. 6ELAN7AR durin! the a#ademi# )ear .01' / 15. 0he
information is true to the best of m) kno1led!e.
D!te )
P'!1e )
Si/$!ture )
CERTIFICATE
I, *R"2. %34AN5AR hereb) #ertif) that
Mr. Vaishnav Ambolkar Roll No6 1500.7 of
Mulund olle!e of ommer#e, S. N Road, Mulund $%est&,
Mumbai + '000(0 of M.om *art + I $8usiness Mana!ement& has #om,leted her ,ro-e#t on
:STRATEGIC MANAGEMENT PLANS OF NESTLE & CADBURY;
durin! the a#ademi# )ear .01' + 15. 0he information submitted is true and ori!inal at the best of
m) kno1led!e.
Pr&<e1t Guide Pri$1i=!'
C&>&rdi$!t&r E?ter$!' Guide
D!te )
A5N"%439:3M3N0
I 1ould like to e;,ress m) sin#ere !ratitude to *rin#i,al of Mu'u$d C&''e/e &5 C&mmer1e Dr.
.Mr".0 P!r%!t#i e$(!te"#8 ourse + oordinator and our ,ro-e#t !uide Pr&5. 6ELAN7AR
for ,rovidin! me an o,,ortunit) to do m) ,ro-e#t 1ork on : STRATEGIC MANAGEMENT
PLANS OF NESTLE & CADBURY ; . I also 1ish to e;,ress m) sin#ere thank to all of them
in no + tea#hin! staff of our #olle!e. I sin#erel) thank to all of them in hel,in! me to #arr)in! out
this ,ro-e#t 1ork. 4ast but not the least , I 1ish to avail m)self of this o,,ortunit), to e;,ress a
sense of !ratitude and love to m) friends and m) beloved ,arents for their mutual su,,ort,
stren!th, hel, and for ever)thin!.
CONTENT
C#!=ter T&=i1 &5 C&$te$t P!/e N&.
* A) Ob<e1ti%e &5 m!(i$/ t#e =r&<e1t
B0 Re"e!r1# Met#&d&'&/y &5 t#e =r&<e1t
C0 NESTLE 4 I$tr&du1ti&$ & @i"t&ry
D0 Mi""i&$ & i"i&$ &5 t#e C&m=!$y
2 S6OT !$!'y"i" &5 NESTLE
- A0 Ob<e1ti%e & "tr!te/ie" &5 t#e 1&m=!$y
B0 S#&rt8& L&$/ term ='!$$i$/ &5 t#e 1&m=!$y
3 A) CADBURY 4 I$tr&du1ti&$ & @i"t&ry
B) Mi""i&$ & i"i&$ &5 t#e C&m=!$y
+ S6OT !$!'y"i" &5 CADBURY
A0 Ob<e1ti%e & "tr!te/ie" &5 t#e 1&m=!$y
B0 S#&rt8& L&$/ term ='!$$i$/ &5 t#e 1&m=!$y
A C&m=!r!ti%e "tudy &5 t#e tB& 1&m=!$ie")
A) M!r(eti$/ met#&d
B0 6&r(i$/ "ty'e
C0 O%er!'' =er5&rm!$1e
Fi$di$/" &5 t#e "tudy
E?e1uti%e Summ!ry
C&$1'u"i&$
Bib'i&/r!=#y
OBJECTIE )
0o anal)<ed mission and vision of t1o #om,anies.
2indin! "ri!in and =istor) of the #om,anies.
%hat ,rodu#t or servi#es this #om,anies ,rovides to the #ustomer.
S%"0 anal)ses of the t1o #om,anies.
2indin! out the short term, medium term, and lon! term ,lannin! ob-e#tive and
Strate!ies of the sele#ted #om,anies.
om,arative studies on the marketin!, 1orkin! st)le, and overall ,erforman#e of the
#om,anies.


RESEARC@ MET@ODOLOGY )
0his ,ro-e#t is totall) based on the se#ondar) information 1hi#h is ,rovided on the offi#ial
1ebsite of the t1o #om,anies.
Some more unoffi#ial 1ebsites of the #om,anies information is added so to !et a a#tual
kno1led!e about 1hat others think about the ,arti#ular t1o #om,anies.
Annual statements on the #om,anies are referred for ,re,arin! this ,ro-e#t.
And some book on strate!i# mana!ement is referred for #om,letion of the ,ro-e#t.
NESTLE )
Nestle S.A. is a S1iss multinational food and bevera!e #om,an) head>uartered in Veve),
S1it<erland. It is the lar!est food #om,an) in the 1orld measured b) revenues.
Nestl?@s ,rodu#ts in#lude bab) food, bottled 1ater, breakfast #ereals, #offee and tea,
#onfe#tioner), dair) ,rodu#ts, i#e #ream, fro<en food,,et foods, and sna#ks. 01ent)/nine of
Nestl?@s brands have annual sales of over =21 billion $about ASB1.1 billion&, in#ludin!
Nes,resso, Nes#af?, 5it5at, Smarties, Nes>uik, Stouffer@s, Vittel, and Ma!!i.
Nestl? has ''C fa#tories, o,erates in 1D' #ountries, and em,lo)s around 333,000 ,eo,le. It is one
of the main shareholders of 4@"real, the 1orld@s lar!est #osmeti#s #om,an).
Nestl? 1as formed in 1D05 b) the mer!er of the An!lo/S1iss Milk om,an), established in
1(77 b) brothers :eor!e *a!e and harles *a!e, and 2arine 4a#t?e =enri Nestl?, founded in
1(77 b) =enri Nestl?. 0he #om,an) !re1 si!nifi#antl) durin! the 2irst %orld %ar and a!ain
follo1in! the Se#ond %orld %ar, e;,andin! its offerin!s be)ond its earl) #ondensed milk and
infant formula ,rodu#ts. 0he #om,an) has made a number of #or,orate a#>uisitions,
in#ludin! rosse E 8la#k1ellin 1D50,2indus in 1D73,4ibb)@s in 1DC1,
Ro1ntree Ma#kintosh in 1D((, and :erber in .00C.
Nestle has a ,rimar) listin! on the SIF S1iss 3;#han!e and is a #onstituent of the S1iss Market
Inde;. It has a se#ondar) listin! on 3urone;t. In .011, Nestl? 1as listed No. 1 in the 2ortune
:lobal 500 as the 1orld@s most ,rofitable #or,oration. %ith a market #a,itali<ation of ASB.33
billion, Nestle ranked No. D in the 20 :lobal 500 .013.
@ISTORY OF NESTLE )
Nestle@s ori!ins date ba#k to 1(77, 1hen t1o se,arate S1iss enter,rises 1ere founded that 1ould
later form the #ore of Nestl?. In the su##eedin! de#ades, the t1o #om,etin! enter,rises
a!!ressivel) e;,anded their businesses throu!hout 3uro,e and the Anited States.
In Au!ust 1(7C, harles $AS #onsul in S1it<erland& and :eor!e *a!e, t1o brothers from 4ee
ount), Illinois, ASA, established the An!lo/S1iss ondensed Milk om,an) in ham,
S1it<erland. 0heir first 8ritish o,eration 1as o,ened at hi,,enham, %iltshire, in 1(C3.
In Se,tember 1(77, in Veve), =enri Nestl? develo,ed a milk/based bab) food, and soon be!an
marketin! it. 0he follo1in! )ear sa1 9aniel *eter be!in seven )ears of 1ork ,erfe#tin! his
invention, the milk #ho#olate manufa#turin! ,ro#ess. Nestl?@s 1as the #ru#ial #oo,eration that
*eter needed to solve the ,roblem of removin! all the 1ater from the milk added to his #ho#olate
and thus ,reventin! the ,rodu#t from develo,in! milde1. =enri Nestle retired in 1(C5 but the
#om,an), under ne1 o1nershi,, retained his name as So#iete 2arine 4a#tee =enri Nestle.
In 1(CC, An!lo/S1iss added milk/based bab) foods to their ,rodu#tsG in the follo1in! )ear, the
Nestl? om,an) added #ondensed milk, su#h that the firms be#ame dire#t and fier#e rivals.
In 1D05, the #om,anies mer!ed to be#ome the Nestl? and An!lo/S1iss ondensed Milk
om,an), retainin! that name until 1D'C, 1hen the name HNestl? Alimentana SA@ 1as taken as a
result of the a#>uisition of 2abri>ue de *roduits Ma!!i SA $founded 1(('& and its holdin!
#om,an), Alimentana SA, of 5em,ttal, S1it<erland. Ma!!i 1as a ma-or manufa#turer of sou,
mi;es and related foodstuffs. 0he #om,an)@s #urrent name 1as ado,ted in 1DCC. 8) the earl)
1D00s, the #om,an) 1as o,eratin! fa#tories in the Anited States, the Anited 5in!dom, :erman),
and S,ain. 0he 2irst %orld %ar #reated demand for dair) ,rodu#ts in the form of !overnment
#ontra#ts, and, b) the end of the 1ar, Nestl?@s ,rodu#tion had more than doubled.
Nestl? felt the effe#ts of the Se#ond %orld %ar immediatel). *rofits dro,,ed from
ASB.0 million in 1D3(, to ASB7 million in 1D3D. 2a#tories 1ere established in develo,in!
#ountries, ,arti#ularl) in 4atin Ameri#a. Ironi#all), the 1ar hel,ed 1ith the introdu#tion of the
#om,an)@s ne1est ,rodu#t, Nes#af? $INestl?@s offeeJ&, 1hi#h be#ame a sta,le drink of the AS
militar). Nestl?@s ,rodu#tion and sales rose in the 1artime e#onom).
After the 1ar, !overnment #ontra#ts dried u,, and #onsumers s1it#hed ba#k to fresh milk.
=o1ever, Nestl?@s mana!ement res,onded >ui#kl), streamlinin! o,erations and redu#in! debt.
0he 1D.0s sa1 Nestl?@s first e;,ansion into ne1 ,rodu#ts, 1ith #ho#olate/manufa#ture be#omin!
the #om,an)@s se#ond most im,ortant a#tivit). 4ouis 9a,,les 1as 3" till 1D3C, 1hen
su##eeded b) Kdouard Muller till his death in 1D'(.
0he end of %orld %ar II 1as the be!innin! of a d)nami# ,hase for Nestl?. :ro1th a##elerated
and numerous #om,anies 1ere a#>uired. In 1D'C Nestl? mer!ed 1ith Ma!!i,a manufa#turer of
seasonin!s and sou,s.
rosse E 8la#k1ell follo1ed in 1D50, as did 2indus $1D73&, 4ibb)@s $1DC1&
and Stouffer@s $1DC3&.9iversifi#ation #ame 1ith a shareholdin! in 4@"real in 1DC'. In 1DCC,
Nestl? made its se#ond venture outside the food industr), b) a#>uirin! Al#on 4aboratories In#.
In the 1D(0s, Nestl?@s im,roved bottom line allo1ed the #om,an) to laun#h a ne1 round of
a#>uisitions. arnation 1as a#>uired for B3 billion in 1D(' and brou!ht the eva,orated
milk brand, as 1ell as offee/Mate and 2riskies to Nestle.
0he #onfe#tioner) #om,an) Ro1ntree Ma#kintosh 1as a#>uired in 1D(( for B'.5 billion, 1hi#h
brou!ht brands su#h as 5it 5at, Smarties and Aero.
0he first half of the 1DD0s ,roved to be favourable for Nestl?. 0rade barriers #rumbled, and
1orld markets develo,ed into more or less inte!rated tradin! areas. Sin#e 1DD7, there have been
various a#>uisitions, in#ludin! San *elle!rino $1DDC&, S,illers *etfoods $1DD(&, and Ralston
*urina $.00.&. 0here 1ere t1o ma-or a#>uisitions in North Ameri#a, both in .00. + in Lune,
Nestl? mer!ed its A.S. i#e #ream business into 9re)er@s, and in Au!ust a ASB..7 billion
a#>uisition 1as announ#ed of hef Ameri#a, the #reator of =ot *o#kets. In the same time/frame,
Nestl? #ame #lose to ,ur#hasin! the i#oni# Ameri#an #om,an) =ershe)@s, one of its fier#est
#onfe#tioner) #om,etitors, althou!h the deal eventuall) fell throu!h. Another re#ent ,ur#hase
in#luded the Lenn) rai!1ei!ht/loss ,ro!ram, for ASB700 million.
In 9e#ember .005, Nestl? bou!ht the :reek #om,an) 9elta I#e ream for M.'0 million. In
Lanuar) .007, it took full o1nershi, of 9re)er@s, thus be#omin! the 1orld@s lar!est i#e #ream
maker, 1ith a 1C.5N market share.
In November .007, Nestl? ,ur#hased the Medi#al Nutrition division of Novartis *harma#euti#al
for ASB..5 billion, also a#>uirin!, in .00C, the milk/flavourin! ,rodu#t kno1n as "valtine.
In A,ril .00C, returnin! to its roots, Nestl? bou!ht AS bab)/food manufa#turer :erber for
B5.5 billion.
In 9e#ember .00C, Nestl? entered into a strate!i# ,artnershi, 1ith a 8el!ian #ho#olate maker,
*ierre Mar#olini.
Nestl? a!reed to sell its #ontrollin! stake in Al#on to Novartis on ' Lanuar) .010. 0he sale 1as
to form ,art of a broader ASB3D.3 billion offer, b) Novartis, for full a#>uisition of the 1orld@s
lar!est e)e/#are #om,an).
"n 1 Mar#h .010, Nestl? #on#luded the ,ur#hase of 5raft 2oodsOs North Ameri#an fro<en ,i<<a
business for B3.C billion.
In Lul) .011, Nestl? SA a!reed to bu) 70 ,er#ent of =su 2u hi International 4td. for about B1.C
billion. "n .3 A,ril .01., Nestl? a!reed to a#>uire *fi<er In#.Os infant/nutrition unit for B11.D
billion. 8efore the a#>uisition, there 1as a Obiddin! 1arO bet1een the three shareholders
Nestl?, Mead Lohnson Nutrition and 9anone. 3a#h of the #om,anies held a share, 1ith Nestl?
holdin! the bi!!est share $1CN& $Lohnson held 15N, 9anone 13N&.
As of .( Ma) .013, Nestl? has announ#ed that it 1ill e;,and RE9 in its resear#h #enter
in Sin!a,ore. %ith a ,rimar) fo#us on health and nutrition, Nestl? is investin! B'.3 million in its
Sin!a,ore #enter, #reatin! .0 -obs for e;,erts in related RE9 fields. In .013 Nestl? Ni!eria
su##essfull) ,ioneered and im,lemented the use of #om,ressed natural !as as a fuel sour#e to
,o1er their 2lo1er!ate fa#tor).
Ne"t'eC" Mi""i&$ )
Nestle is the 1orldOs leadin! nutrition, health and 1ellness #om,an). "ur mission of P:ood
2ood, :ood 4ifeP is to ,rovide #onsumers 1ith the best tastin!, most nutritious #hoi#es in a 1ide
ran!e of food and bevera!e #ate!ories and eatin! o##asions, from mornin! to ni!ht.
Ne"t'eC" i"i&$ )
0o be a leadin!, #om,etitive, Nutrition, =ealth and %ellness om,an) deliverin! im,roved
shareholder value b) bein! a ,referred #or,orate #iti<en, ,referred em,lo)er, ,referred su,,lier
sellin! ,referred ,rodu#ts.
*eo,le understand that food is a sour#e of nourishment and satisfa#tion, but also ,leasure, health,
ha,,iness and ,ea#e of mind. 0he) are in#reasin!l) a1are that their food and bevera!e #hoi#es
#an im,a#t their >ualit) of life and affe#t the lives of others.
Innovation has been at the heart of #om,an) sin#e its be!innin!. 3ver sin#e =enri Nestl?
invented 2arine 4a#t?e to alleviate infant mortalit), the) have been dedi#ated to enhan#e ,eo,le@s
lives.
3a#h da) Nesltle strive to make their ,rodu#ts tastier and healthier #hoi#es that hel, #onsumers
#are for themselves and their families. 0his 1ould not be ,ossible 1ithout their
unmat#hed RE9 #a,abilit), nutrition s#ien#e and ,assion for >ualit) in ever)thin! the) do.
Nestle have the lar!est RE9 net1ork of an) food #om,an) in the 1orld, 1ith 3' RE9 fa#ilities,
and over 5,000 ,eo,le involved in RE9.
8ehind ever) one of Nestl?@s ,rodu#ts there is a team of s#ientists, en!ineers, nutritionists,
desi!ners, re!ulator) s,e#ialists and #onsumer #are re,resentatives dedi#ated to earn our
#onsumers@ trust 1ith safe ,rodu#ts of the hi!hest >ualit)6 at Nestl?, safet) and >ualit) are non/
ne!otiable.
S6OT A$!'y"i" )
Stre$/t# )
Anmat#hed ,rodu#t and brand ,ortfolio. 0he business offers one of the 1idest ,ortfolio
of food and bre1er) ,rodu#ts in its se#tor. It also o,erates .D brands that earn more than
B1 billion in annual revenues. %ith more than (,000 ,rodu#ts it is hard for an) other
#or,orate to #om,ete a!ainst Nestl?.
RE9 #a,abilities. Nestl? invested more than B. billion in RE9 in .011. It@s introdu#in!
ne1 and redesi!ned ,rodu#ts ever) )ear, stren!thenin! firm@s #om,etitive advanta!e.
9istribution #hannels and !eo!ra,hi# ,resen#e. Nestl? runs in more than 100 #ountries
and has e;tensive distribution #hannel all over the 1orld, 1hi#h su,,orts its o,erations
!loball).
om,eten#) in mer!ers and a#>uisitions. "ver the )ears Nestl? has been formin!
su##essful ,artnershi,s and a#>uirin! other #om,anies in order to !ro1 and maintain its
leadershi, in the market.
8rand re,utation valued at BC billion. Nestl? is kno1n almost ever)1here and has a
re,utable brand for its ,rodu#ts that are used b) millions ever) da).
6e!($e""e" )
Inabilit) to ,rovide #onsistent >ualit) in food ,rodu#ts. Nestl? has been re#allin! man)
,rodu#ts from trade due to food #ontamination or ,oor >ualit) su,,lies. 0his does not
onl) hurt firm@s sales but its ima!e as 1ell as the business is unable to #ontrol >ualit) of
the ,rodu#ts.
%eak im,lementation of SR. 0he #om,an) has announ#ed and is involved in man)
,ro!rams that aim to make #om,an) more e#o/friendl) and im,rovin! the 1orkin!
#onditions of its su,,liers. Still, Nestl? re#eives a lot #riti#ism over the effe#tiveness of
its ,ro!rams.
O==&rtu$itie" )
In#reasin! demand for healthier food ,rodu#ts. 0he trend of bu)in! and #onsumin! onl)
health) food ,rodu#ts is a ma-or shift in #onsumer tastes and o,ens u, an immense
market for #om,anies. urrentl), Nestl? tries to introdu#e more health) food ,rodu#ts in
res,onse to the trend.
A#>uirin! startu,s s,e#iali<in! in ,rodu#in! 1ell/bein! ,rodu#ts. Man) ne1 startu,s are
formin! and introdu#in! ne1 ,rodu#ts for 1ell/bein! or revolutioni<in! the 1a)s those
,rodu#ts are made. Startu,s are #hea, and #an easil) be a#>uired. Nestl? is fo#usin! on
,rovidin! more 1ell/bein! ,rodu#ts and this is a !reat o,,ortunit) to e;,and its ,ortfolio.
3stablishin! ne1 -oint ventures. Nestle is alread) involved in man) su##essful
,artnershi,s 1ith ma-or 1orld #om,anies like 0he o#a/ola om,an) and ol!ate/
*almolive.
T#re!t" )
2ood #ontamination. Althou!h it is Nestle@s res,onsibilit) to run thorou!h >ualit) #he#ks
of its ,rodu#ts, the #om,an) had been re,ortedl) ,rovidin! #ontaminated food or other
,rodu#ts to the market. Su#h a#tions hurt #om,an)@s re,utation and result in losses.
0rend to1ards health) eatin!. Nestl? is a ma-or su,,lier of #ho#olate and #ho#olate
drinks that have hi!h level of #alories and due to #han!in! #ustomer habits, 1ill
e;,erien#e de#line in demand.
:ro1th of ,rivate labels. 0he !ro1in! number of su,ermarkets and other retailers are
introdu#in! their o1n label ,rodu#ts that #ost less and #an easil) #om,ete 1ith Nestl?@s
,rodu#t ,ortfolio.
Risin! ra1 food ,ri#es. %ith an overall !ro1th of 1orld e#onom) and ,o,ulation, the
demand for ra1 food 1ill rise. 0he result of that 1ill be hi!her material #osts and
s>uee<ed mar!in for Nestl?.
Ob<e1ti%e" &5 Ne"t'e )
Nestl?@s ob-e#tives are to be re#o!nised as the 1orld leader in Nutrition, =ealth and %ellness,
trusted b) all its stakeholders, and to be the referen#e for finan#ial ,erforman#e in its industr).
0he) believe that leadershi, is not -ust about si<e, it is also about their behaviour. 0he) re#o!nise
trust is earned onl) over a lon! ,eriods of time b) #onsistentl) deliverin! on their ,romises.
0hese ob-e#tives and behaviour are en#a,sulated in the sim,le ,hrase, I:ood 2ood, :ood 4ifeJ,
a ,hrase that sums u, their #or,orate ambition. 0he Nestl? Roadma, is intended to #reate
ali!nment for their ,eo,le behind a #ohesive set of strate!i# ,riorities that 1ill a##elerate the
a#hievement of their ob-e#tives. 0hese ob-e#tives demand from their ,eo,le a blend of lon!/term
ins,iration needed to build for the future and short/term entre,reneurial a#tions, deliverin! the
ne#essar) level of ,erforman#e. 0he) are seekin! to a#hieve leadershi, and earn that trust b)
satisf)in! the e;,e#tations of #onsumers, 1hose dail) #hoi#es drive their ,erforman#es, of
shareholders, of the #ommunities in 1hi#h the) o,erate and of so#iet) as a 1hole. 0he) believe
that it is onl) ,ossible to #reate lon!/term sustainable value for their shareholders of their
behaviour, strate!ies and o,erations are also #reatin! value for the #ommunities 1here the)
o,erate, for their business ,artner and also for their #onsumers, and the) #all this reatin!
Shared Value. 0he) are no1 investin! for the future to ensure the finan#ial and environmental
sustainabilit) of their a#tions and o,erations in #a,a#it), te#hnolo!ies, #a,abilities, in ,eo,le, in
brands, in RE9. 0heir aims to meet toda)@s needs 1ithout #om,romisin! the abilit) of the future
!enerations to meet their needs, and to do so in a 1a) 1hi#h 1ill ensure ,rofitable !ro1th )ear
after )ear and a hi!h level of returns for their shareholders and so#iet) at a lar!e over the lon!/
term.
S#&rt Term & L&$/ term ='!$$i$/ &5 Ne"t'e )
Nestl? des#ribes itself as a food, nutrition, health, and 1ellness #om,an). 0he) believe
stren!thenin! their leadershi, in this market is the ke) element of their #or,orate strate!). 0his
market is #hara#terised as one in 1hi#h the #onsumer@s ,rimar) motivation for a ,ur#hase is the
#laims made b) the ,rodu#t based on nutritional #ontent. In order to reinfor#e their #om,etitive
advanta!e, Nestl? #reated Nutrition as an autonomous !lobal business unit 1ithin the
or!anisation, and #har!e it 1ith the o,erational and ,rofit and loss res,onsibilit) for the #laim/
based business ,erforman#e b) offerin! #onsumers trusted, s#ien#e based nutrition ,rodu#ts and
servi#es. 0he or,orate %ellness Anit 1as desi!ned to inte!rate nutritional value/added in their
food and bevera!e businesses. 0his unit 1ill drive the nutrition, health and 1ellness or!anisation
a#ross all their food and bevera!e businesses. It en#om,asses a ma-or #ommuni#ation effort, both
internall) and e;ternall), and strives to #losel) ali!n Nestl?@s s#ientifi# and RE9 e;,ertise 1ith
#onsumer benefits. 0his unit is res,onsible for #oordinatin! hori<ontal, #ross/business ,ro-e#t
that address #urrent #ustomer #on#erns as 1ell as anti#i,atin! future #onsumer trends. Nestl?
business/level strate!) is inte!rated #ost leadershi, or differentiation 1ith 1ide ran!e of ,rodu#ts
and lo1 #ost o,erators. Nestl? strate!i# leadershi, is to for#e the business to be#ome more
effi#ient, to #reate a re!ional manufa#turin! net1ork, inte!rate the #om,an)@s business on a
!lobal s#ale and to redu#e marketin! e;,enditures b) e;,loitin! the s)ner!ies bet1een brands.
0heir strate!) to develo, RE9 net1ork b) im,rovin! e;istin! ,rodu#ts and #reatin! tomorro1@s
nourihsments, t1o third of #om,an)@s RE9 a#tivities are dedi#ated to renovatin! e;istin!
,rodu#ts, the remainin! third is reserved for radi#al ,rodu#t innovations, im,rove on o,erational
level and a number of or!anisational #han!es.
Nestl?@s ob-e#tives are to be re#o!nised as the 1orld leader in Nutrition, =ealth and
%ellness, trusted b) all its stakeholders, and to be the referen#e for finan#ial ,erforman#e in its
industr). 0he) believe that leadershi, is not -ust about si<e, it is also about their behaviour. 0he)
re#o!nise trust is earned onl) over a lon! ,eriods of time b) #onsistentl) deliverin! on their
,romises. 0hese ob-e#tives and behaviour are en#a,sulated in the sim,le ,hrase, I:ood 2ood,
:ood 4ifeJ, a ,hrase that sums u, their #or,orate ambition. 0he Nestl? Roadma, is intended to
#reate ali!nment for their ,eo,le behind a #ohesive set of strate!i# ,riorities that 1ill a##elerate
the a#hievement of their ob-e#tives. 0hese ob-e#tives demand from their ,eo,le a blend of lon!/
term ins,iration needed to build for the future and short/term entre,reneurial a#tions, deliverin!
the ne#essar) level of ,erforman#e. 0he) are seekin! to a#hieve leadershi, and earn that trust b)
satisf)in! the e;,e#tations of #onsumers, 1hose dail) #hoi#es drive their ,erforman#es, of
shareholders, of the #ommunities in 1hi#h the) o,erate and of so#iet) as a 1hole. 0he) believe
that it is onl) ,ossible to #reate lon!/term sustainable value for their shareholders of their
behaviour, strate!ies and o,erations are also #reatin! value for the #ommunities 1here the)
o,erate, for their business ,artner and also for their #onsumers, and the) #all this reatin!
Shared Value. 0he) are no1 investin! for the future to ensure the finan#ial and environmental
sustainabilit) of their a#tions and o,erations in #a,a#it), te#hnolo!ies, #a,abilities, in ,eo,le, in
brands, in RE9. 0heir aims to meet toda)@s needs 1ithout #om,romisin! the abilit) of the future
!enerations to meet their needs, and to do so in a 1a) 1hi#h 1ill ensure ,rofitable !ro1th )ear
after )ear and a hi!h level of returns for their shareholders and so#iet) at a lar!e over the lon!/
term.
Nestl? des#ribes itself as a food, nutrition, health, and 1ellness #om,an). 0he) believe
stren!thenin! their leadershi, in this market is the ke) element of their #or,orate strate!). 0his
market is #hara#terised as one in 1hi#h the #onsumer@s ,rimar) motivation for a ,ur#hase is the
#laims made b) the ,rodu#t based on nutritional #ontent. In order to reinfor#e their #om,etitive
advanta!e, Nestl? #reated Nutrition as an autonomous !lobal business unit 1ithin the
or!anisation, and #har!e it 1ith the o,erational and ,rofit and loss res,onsibilit) for the #laim/
based business ,erforman#e b) offerin! #onsumers trusted, s#ien#e based nutrition ,rodu#ts and
servi#es. 0he or,orate %ellness Anit 1as desi!ned to inte!rate nutritional value/added in their
food and bevera!e businesses. 0his unit 1ill drive the nutrition, health and 1ellness or!anisation
a#ross all their food and bevera!e businesses. It en#om,asses a ma-or #ommuni#ation effort, both
internall) and e;ternall), and strives to #losel) ali!n Nestl?@s s#ientifi# and RE9 e;,ertise 1ith
#onsumer benefits. 0his unit is res,onsible for #oordinatin! hori<ontal, #ross/business ,ro-e#t
that address #urrent #ustomer #on#erns as 1ell as anti#i,atin! future #onsumer trends.Nestl?
business/level strate!) is inte!rated #ost leadershi, or differentiation 1ith 1ide ran!e of ,rodu#ts
and lo1 #ost o,erators. Nestl? strate!i# leadershi, is to for#e the business to be#ome more
effi#ient, to #reate a re!ional manufa#turin! net1ork, inte!rate the #om,an)@s business on a
!lobal s#ale and to redu#e marketin! e;,enditures b) e;,loitin! the s)ner!ies bet1een brands.
0heir strate!) to develo, RE9 net1ork b) im,rovin! e;istin! ,rodu#ts and #reatin! tomorro1@s
nourihsments, t1o third of #om,an)@s RE9 a#tivities are dedi#ated to renovatin! e;istin!
,rodu#ts, the remainin! third is reserved for radi#al ,rodu#t innovations, im,rove on o,erational
level and a number of or!anisational #han!es.
CADBURY )
adbur) is a 8ritish multinational #onfe#tioner) #om,an) o1ned b) MondelQ< International. It
is the se#ond lar!est #onfe#tioner) brand in the 1orld after%ri!le)Os. adbur) is head>uartered
in A;brid!e in :reater 4ondon and o,erates in more than fift) #ountries 1orld1ide.
adbur) is best kno1n for its #onfe#tioner) ,rodu#ts in#ludin! the 9air) Milk #ho#olate,
the reme 3!!, and the Roses sele#tion bo;.
adbur) 1as established in 8irmin!ham in 1(.', b) Lohn adbur) 1ho sold tea, #offee and
drinkin! #ho#olate. adbur) develo,ed the business 1ith his brother 8en-amin, follo1ed b) his
sons Ri#hard and :eor!e. :eor!e develo,ed the 8ournville estate, a model villa!e desi!ned to
!ive the #om,an)Os 1orkers im,roved livin! #onditions. 9air) Milk #ho#olate, introdu#ed in
1D05, used a hi!her ,ro,ortion of milk 1ithin the re#i,e #om,ared 1ith rival ,rodu#ts. 8) 1D1',
the #ho#olate 1as the #om,an)Os best/sellin! ,rodu#t.
adbur) mer!ed 1ith L. S. 2r) E Sons in 1D1D, and S#h1e,,es in 1D7D. adbur) 1as a #onstant
#onstituent of the 20S3 100 from the inde;Os 1D(' in#e,tion until the #om,an) 1as bou!ht b)
5raft 2oods in .010.
@i"t&ry )
adbur), the !lobal leader in the #ho#olate #onfe#tioner) market, be!an in 1(.' 1hen a )oun!
Ruaker named Lohn adbur) o,ened u, a sho, in 8irmin!ham. Lohn sold #offee, tea, drinkin!
#ho#olate and #o#oa at his sho,. 8elievin! that al#ohol 1as a main #ause of ,overt), Lohn ho,ed
his ,rodu#ts mi!ht serve as an alternative. =e also sold ho,s and mustard. 4ike man) Ruakers
Lohn had hi!h >ualit) standards for all of his ,rodu#ts.
At that time in 3n!land, Ruakers 1ere ,rohibited from attendin! universit), sin#e it 1as
affiliated 1ith the established #hur#h, and their ,a#ifist beliefs ke,t them from -oinin! the
militar). %ith fe1 o,,ortunities available, Ruakers often 1ent into business/related fields andSor
devoted their time to missions of so#ial reform.
8) 1('. Lohn 1as sellin! 11 kinds of #o#oa and 17 kinds of drinkin! #ho#olate. Soon Lohn@s
brother 8en-amin -oined the #om,an) to form adbur) 8rothers of 8irmin!ham. 0he adbur)
brothers o,ened an offi#e in 4ondon and re#eived a Ro)al %arrant $one of man)& as
manufa#turers of #ho#olate and #o#oa to Rueen Vi#toria in 1(5'. Si; )ears later the brothers
dissolved their ,artnershi, be#ause of Lohn@s failin! health and the death of his 1ife. 0he) left
the business to LohnOs sons :eor!e and Ri#hard. Lohn devoted the rest of his life to so#ial 1ork
and died in 1((D.
:eor!e and Ri#hard #ontinued to e;,and the ,rodu#t line, and b) 1(7', the) 1ere ,ullin! a
,rofit. adbur)@s o#oa 3ssen#e, 1hi#h 1as advertised as Pabsolutel) ,ure and therefore best,P
1as an all/natural ,rodu#t made 1ith ,ure #o#oa butter and no star#h) in!redients. o#oa
3ssen#e 1as the be!innin! of #ho#olate as 1e kno1 it toda). 0he brothers soon moved their
manufa#turin! o,erations to a lar!er fa#ilit) four miles south of 8irmin!ham. 0he fa#tor) and
area be#ame kno1n as 8ournville.
%ith adbur)@s #ontinued su##ess in #ho#olate, :eor!e and Ri#hard sto,,ed sellin! tea in 1(C3.
Master #onfe#tioner 2rederi# 5in#helman 1as a,,ointed to share his re#i,e and ,rodu#tion
se#rets 1ith adbur) 1orkers. 0his resulted in adbur) ,rodu#in! #ho#olate #overed nou!ats,
bonbons deli#es, ,ista#he, #aramels, avelines and more. adbur) manufa#tured its first milk
#ho#olate in 1(DC. 01o )ears later the 8ournville fa#tor) em,lo)ed .,700 ,eo,le and adbur)
1as in#or,orated as a limited #om,an).
9urin! %orld %ar I, more than .,000 of adbur)@s male em,lo)ees -oined the Armed 2or#es.
adbur) su,,orted the 1ar effort, sendin! 1arm #lothin!, books and #ho#olate to the soldiers.
adbur) su,,lemented the !overnment allo1an#es to the de,endants of their 1orkers. %hen the
1orkers returned, the) 1ere able to return to 1ork, take edu#ational #ourses, and in-ured or ill
em,lo)ees 1ere looked after in #onvales#ent homes. 9urin! this ,eriod trade overseas in#reased,
and adbur) o,ened its first overseas fa#tor) near =obart, 0asmania. 0he ne;t )ear adbur)
mer!ed 1ith LS 2r) E Sons, a ,ast market leader in #ho#olate.
adbur) su,,orted the 1ar effort durin! %orld %ar II b) #onvertin! ,arts of its fa#tor) into
1orkrooms to manufa#ture e>ui,ment like millin! ma#hines for rifle fa#tories and ,arts like ,ilot
seats for 9efiant fi!hter ,lanes. %orkers ,lo1ed football fields to !ro1 #ro,s, and the adbur)
St. Lohn@s Ambulan#e unit hel,ed ,eo,le durin! air raids. ho#olate 1as #onsidered essential for
the Armed 2or#es and #ivilians. Rationin! finall) ended in 1D'D.
In 1D7D adbur) mer!ed 1ith S#h1e,,es to form adbur) S#h1e,,es. S#h1e,,es 1as a 1ell/
kno1n 8ritish brand that manufa#tured #arbonated mineral 1ater and soft drinks. 0he mer!ed
#om,anies 1ould !o on to a#>uire Sunkist, anada 9r), 0),hoo 0ea and more. S#h1e,,es
8evera!es 1as #reated, and the manufa#ture of adbur) #onfe#tioner) brands 1as li#ensed to
=ershe).
0oda) adbur) S#h1e,,es is the lar!est #onfe#tioner) #om,an) in the 1orld, em,lo)in! more
than C0,000 em,lo)ees. In .007 the #om,an) had over B15 billion in overall sales. In Mar#h of
.00C, adbur) S#he1e,,es announ#ed that it intends to se,arate its #onfe#tioner) and bevera!e
businesses. %ith almost .00 )ears in the business, adbur) S#h1e,,es 1ill #ontinue to ,ros,er
in the #omin! de#ades.
Mi""i&$ )
At adbur) S#h1e,,es, #ore ,ur,ose is P%orkin! to!ether to #reate brands ,eo,le loveP.
0he #ore ,ur,ose #a,tures the s,irit of 1hat 1e are tr)in! to a#hieve as a business.
%e #ollaborate and 1ork as teams to #onvert ,rodu#ts into brands.
i"i&$ )
0o ali!n 1ith #ore ,ur,ose, adbur) India has defined its Vision as P4ife 2ull "f
adbur) and adbur) 2ull of 4ifeP.
adbur) India 1ill ,arti#i,ate in man) s,a#es of #onsumer life throu!h a #a#he of
,rodu#t offerin!s / be it #ho#olates or sna#ks or !um.
0he) believe that 1ork and fun #an #o/e;ist beautifull). 0herefore at adbur) India, itOs
all about 1ork hard, ,la) harder. %e brin! moments of deli!ht to our #onsumers
ever)da) and ever) time. 0herefore, 1e stron!l) believe that the ,eo,le 1ho #reate these
,rodu#ts should also have fun 1hile doin! so.
S6OT !$!'y"i" &5 C!dbury
Stre$/t# )
6&r'd 'e!der + adbur) is the 1orld@s leader in #ho#olates. 5no1n to have the best
manufa#turin! and a 1ide distribution #hannel, adbur) has a ,resen#e in .00 or more #ountries.
P&Ber#&u"e br!$d" !$d Pr&du1t" + adbur) has man) stron! brands in its ,rodu#t ,ortfolio
su#h as dair) milk, 8ournvita, oreo, five star and others. 0he ,rodu#t are hi!h >ualit) ,rodu#ts
and some of them are #ash #o1s for adbur).
Br!$d $!me8 br!$d eDuity !$d Br!$d '&y!'ty + adbur) ,rodu#ts are blessed 1ith a fantasti#
brand lo)alt). 9ue to its marketin! and stron! brandin! over the )ears, the brand e>uit) of
adbur) is also hi!h and hen#e adbur) is #omfortable #har!in! a ,remium for its ,rodu#t
be#ause of the hi!h brand e>uit). 2inall) some brand names 1ithin the adbur) famil) are
kno1n 1orld 1ide and are desired b) man).
P&"iti&$i$/ !" /i5t + 0he smartest ta#ti# that adbur) has done over the )ears 1ith ,rodu#ts like
dair) milk and #elebrations is that these #ho#olates are ,ositioned for !iftin!. In fa#t the re#ent
bournville, has a #om,lete fo#us on the !iftin! ,osition. 9ue to this smart strate!) adbur) has
safel) differentiated itself from ma-orit) of its #om,etitors.
Pr&m&ti&$" + %ith an ama<in! ta! line of Iku#h meetha ho -a)eJ alon! 1ith fantasti# A04 and
804 a#tivities, adbur) has one of the stron!est ,romotions in the fm#! industr). 0his further
im,arts stren!th to adbur) be#ause it ,rovides e;#ellent brand re#all.
I$di!$ 1&$$e1t + adbur) is one of the fe1 brands 1hi#h #onne#ts so 1ell 1ith the Indian
dias,ora. 2or Indians, famil), friends and love are all im,ortant ,arts of their life. And adbur)
has al1a)s fo#used on emotional marketin! to #onne#t 1ith the Indian audien#e.
P'!1eme$t !$d di"tributi&$ + adbur) has a su,erb distribution strate!) in ,la#e and like all
2M: #om,anies, it uses the strate!) of breakin! the bulk. 9istributin! to .00 #ountries 1ith a
variet) of more than '0 variants is not a small feat. And #adbur) has been a#hievin! the same for
the ,ast man) )ears. It is kno1n to have one of the best 2M: distribution #hannels in India.
6e!($e""e" )
As mentioned ,reviousl), a brand like adbur) is e;,e#ted to have man) stren!ths and
fe1 1eaknesses, and the same is the #ase. adbur)@s 1eakness is its rural distribution
#onsiderin! India has su#h a 1ide rural dias,ora 1hi#h #an be #overed.
At the same time, A fe1 #ases here and there have ha,,ened based on the >ualit) of the ,rodu#t
1here #o#kroa#hes or other rodents 1ere found in the #ho#olate. It is ine;#usable for a brand like
adbur) to sho1 su#h i!noran#e be#ause su#h infe#ted #ho#olates should not leave >ualit)
#ontrol at all. 0hus >ualit) #ontrol needs to be stren!thened.
O==&rtu$itie" )
Rur!' m!r(et" + %hat is a 1eakness #an be#ome an o,,ortunit). *enetratin! rural markets and
distribution in rural markets #an be a lar!e o,,ortunit) for adbur). It is ,resent in forei!n
#ountries and a rural ,resen#e is mu#h needed for adbur) 1hi#h 1ill boost the brands ,resen#e
and turnover.
NeB T!"te" + Indian #onsumers have a s1eet tooth and the) fre>uentl) like to eat small
#ho#olates as 1ell as #ho#olate bars. "n to, of it, there are various flavors 1hi#h #onsumers like.
0hus, ne1 tastes and ne1 flavors are an o,,ortunit) 1hi#h adbur) #an !enerate re!ularl).
T#re!t" )
C&"t !$d =ri1e i$1re!"e > %ith an in#rease in fuel #ost as 1ell as #ost of trans,ortation,
distribution #ost has !one u,. At the same time, the #ost of ,ro#urement and manufa#turin! is
hi!h as 1ell. 0hus, over the )ears, the #onstant in#rease in #ostin! and thereb) ,ri#in! of the
,rodu#t is a threat to adbur) as it #reates a !a, for other #om,anies to enter.
@e!'t# 1&$"1i&u"$e"" &$ t#e ri"e > =ealth #ons#iousness is on the rise amon!st the Indian
,o,ulation. Man) ,eo,le ,refer drinkin! health -ui#es as 1ell as fruits rather than havin!
#ho#olates. 3ver) 1eek )ou 1ill see arti#les on ne1s ,a,ers as 1ell as on blo!s 1hi#h advi#e
a!ainst eatin! #ho#olate and ,ro,a!ate the benefits of sta)in! health). At the same time, man)
,arents have sto,,ed !ivin! #ho#olates to their kids lookin! at the adverse affe#ts.
De1re!"i$/ im=&rt!$1e &5 5e"ti%!'" > adbur) has s,ent )ears to !et the ,osition of a !ift on
festivals and o##asions. %hat ha,,ens 1hen the im,ortan#e of these festivals dro,sT 0he bu)in!
of #ho#olates also dro,s.
Ri"i$/ dem!$d &5 =e&='e8 /r&Bi$/ =ur1#!"i$/ =&Ber > No1ada)s, if )ou !ift a #ho#olate to
#hildren, the) are likel) to demand a to) #ar, a bi#)#le or for a )oun! adult, a #om,uter. 0hus,
1ith a rise in ,ur#hasin! ,o1er, the demands of !ifts also have !one u, in value and -ust a
#ho#olate 1ill not suffi#e. 0his is also a threat for adbur).
Ob<e1ti%e" )
0o develo, differentiated ,rodu#t, 1hile e;,loitin! a smart variet), to a#hieve their ,rofitable
!ro1th in #onfe#tioner) and bevera!es.
Another ob-e#tive is to further take advanta!e of te#hnolo!) in order to in#rease !ro1th, >ualit)
and ,rodu#tivit).
8) %orkin! to!ether 1ith !lobal su,,l) #hain adbur) have a #om,etitive advanta!e 1hile
attainin! their ethi#al and #ost/redu#tion !oals.
8) #om,etin! on >ualit) this !ives adbur)s a AS* that allo1s them to la) an em,hasis on total
#onsumer and #ustomer ,er#eived value.
As adbur) have a hi!hl) motivated :lobal S#ien#e E 0e#hnolo!) 0eam that is admired
internall) and e;ternall) for deliverin! su,erior results.
Str!te/ie" )
9evelo, differentiated ,rodu#t innovations, 1hile e;,loitin! Smart Variet), to a#hieve
our ,rofitable !ro1th in #onfe#tioner) and bevera!es.
Sour#e, develo, and s)ner!isti#all) levera!e te#hnolo!ies, kno1led!e and best/in/#lass
#a,abilities to drive !ame/#han!in! innovations for !ro1th, >ualit) and ,rodu#tivit).
%orkin! to!ether 1ith :lobal Su,,l) hain, lead the resour#in!, develo,ment and
e;e#ution of ,ro!rams to drive #om,etitive advanta!e 1hile attainin! our 2uel 2or
:ro1th and #ost/redu#tion !oals.
9rive >ualit) as a sustainable #om,etitive advanta!e, 1ith em,hasis on total #onsumer
and #ustomer ,er#eived value.
8uild a hi!hl) motivated :lobal S#ien#e E 0e#hnolo!) 0eam that is admired internall)
and e;ternall) for deliverin! su,erior results.
S#&rt term & L&$/ term ='!$$i$/ &5 C!dbury )
Short/term strate!ies hel, a business to fo#us mainl) on the four *s6 *rodu#t, ,ri#e, ,la#e and
,romotion 1hi#h are vital to all businesses, as these four features are the main thin!s 1hi#h hel,
a business to a#hieve ob-e#tives if the) are used #orre#tl). "n the other 1e have lon!/term
strate!ies 1hi#h are used to ,lan the future a#tions of a business, this #an in#lude ,rodu#in!
tables su#h as a Ansoff matri; 1hi#h hel,s a business to de#ide on man) thin!s su#h as, 1hether
to laun#h a ne1 ,rodu#t or to im,rove ,revious ,rodu#ts, overall makin! the ri!ht de#isions on
1hi#h t),e of strate!) to use is vital, es,e#iall) in the #ase of adbur)s as it hel,s to de#ide ho1
to laun#h a ne1 #ereal bar, to ensure that the) rea#h ma;imum sales. 0hrou!hout the ne;t fe1
,a!es I 1ill dis#uss ,ossible short/term and lon!/term strate!ies 1hi#h adbur)s #ould use,
indi#atin! 1hi#h t),e of strate!) in ea#h #ase 1ould be the most useful to hel, them a#hieve
su##ess 1ith there ne1 ,rodu#t. Ansoff Matri;
An ansoff matri; #an be used to identif) and sho1 various t),es of !ro1th strate!ies, man) firms
su#h as adbur)s #ould benefit from the use of an ansoff matri; as it hel,s to fo#us on the firmOs
,resent and ,ossible ,rodu#ts as 1ell as the markets. 0he main thin! in ansoff matri; hel,s to
identif) is ,ossible 1a)s for a business to !ro1G this #an in#lude im,rovin! ,revious ,rodu#ts or
,rodu#in! ne1 ,rodu#ts.
adbur) 9air) Milk has laun#hed some ver) #reative advertisements in India over the )ears.
More than innovative, the ads have been ver) relevant to the Indian ethos. 0he Hshubh aarambh@
ads 1hi#h #a,tured the Indian tradition of havin! somethin! s1eet before an im,ortant o##asion
or Hku#h meetha ho -a)e@ 1hi#h asso#iated adbur) 9air) Milk 1ith #elebrator) o##asions.
Re#entl), adbur) 9air) Milk has been airin! the Hmeethe mein ku#h meetha ho -a)e@ #am,ai!ns
1hi#h have found a lot of favour 1ith the audien#e. 0he ads, in t),i#al adbur) st)le, are ver)
heart1armin! and #reative.
If 1e look throu!h the )ears, 1e #an #learl) see that adbur) is doin! ever)thin! ,ossible to
maintain a stron! hold on the Indian #ho#olate market. %hile it remains a dominant leader 1ith
over C0N of the market share, this has eroded over the )ears as #om,etitors like Nestle, Amul
and AM*" have made stron! fora)s. 0here 1as a time before and durin! the earl) D0s 1hen
adbur)@s en-o)ed an even hi!her market share. 0his 1as the time 1hen #ho#olates 1ere ver)
#learl) ,ositioned for #hildren. =o1ever, 1ith the entr) of !lobal !iant Nestle, t1o thin!s
ha,,ened. 2irstl), there 1as a sudden s,urt of #om,etition for adbur). 8ut more im,ortantl),
the market be!an to !ro1 at a faster ,a#e. adbur) sei<ed this o,,ortunit) and started #reatin!
advertisements that 1ere tar!eted to1ards the Hkids in all of us@. 0his 1as a ver) smart move as
the) alread) had the #hildren@s se!ment all tied u,. Moreover, the #hildren of the D0s have no1
!ro1n u,, and adbur) still offers them reasons to eat 9air) Milk.
=en#e, 1hile their market share has eroded b) a fe1 ,oints, adbur) has si!nifi#antl) im,roved
its revenues in absolute terms b) evolvin! a lon! term advertisin! ,lan and one that is ver)
relevant to the Indian #onte;t. %ith ,redominantl) Indian themes, s,e#ial moments $remember
the !irl dan#in! on the #ri#ket field& and soulful musi#, adbur) has reall) mana!ed to #onne#t
1ith the audien#e. 0he re#ent Hmeethe mein ku#h meetha ho -a)e@ #am,ai!n is sim,l) a
#ontinuation of this strate!) to e;,and the market. In #on#lusion, adbur) 9air) Milk has
mana!ed to take a sim,le #ho#olate bar and #reate numerous asso#iations 1ith it over the )ears.
It has built u, different audien#es over the )ears, and to ever) audien#e it offers a different
meanin! but one that is ver) relevant.
0o en#oura!e the #onsumers adbur) uses man) strate!ies. Some of them are as follo1s6
"n 3ver) =and 3ver)1here6 0he #ustomers demand fla1less servi#es from the salesmen and
the) have to deliver that to the #ustomers. adbur) is the market leader in #onfe#tioner) and
#ho#olates. 0heir sales team ,la)s an im,ortant role in the su##ess. 0he) re!ularl) #ondu#t
surve)s of #onsumer@s #hoi#e and re>uirements. 0he) deliver the ,rodu#ts not onl) in the su,er
markets but also in the small sho,s, so that ever) se!ment of the #ustomers #an easil) !et their
,rodu#ts. 0he) also ,rovide sellin! te#hni>ues.
:ro1in! 1ith 3mer!in! Markets6 Revenue of the #om,an) !ro1s 1ith the emer!in! markets.
0he) #ontinuousl) modif) the ,rodu#ts to fulfill the re>uirement of all se!ments of #onsumers.
0his strate!) leads them to a !ro1th of above .0N annuall) for the ,ast three )ears.
A stron! foundation6 Sin#e 1D'(, adbur) is servin! their ,rodu#ts in India and the) have
#reated a ver) stron! tradition and leadershi, ,osition. 0he) are the number one #ho#olate brand
1ith a share of about C0N. 0oda) onl) one third of the ,o,ulation bu)s the #ho#olate so adbur)
is #hallen!ed to introdu#e the ,leasure of adbur) to man) ,eo,les.
:ro1in! 1ith the market6 0o attra#t the broader ran!e of #onsumers is the main tar!et the
adbur). 0he) #reated a base ran!e of their a##e,table #ho#olate brands at more reasonable and
affordable ,ri#e. 0he) also introdu#ed the !ift ran!e ,rodu#ts for the #ustomers se!ments 1ith
hi!h/in#ome !rou,.
2un#tional advanta!e6 adbur) 8ournvita 1as laun#hed in India in 1D'( and it al1a)s re>uired
,rovidin! nutrition that hel,s in the develo,ment and !ro1th. 0oda) the natural !oodness of
milk, #ho#olate and malt is ,re,ared 1ith vitamins A, 81, 83, 87, 81. and , ,lus ,rotein, iron,
#al#ium, man!anese, <in#, and foli# a#id. It is also kno1n as Ia #u, of #onfiden#eJ.
Affordable lu;ur)6 adbur) has in#reased their ,resen#e in the #and) in the form of halls and
adbur) dair) milk 3#lairs. 3#lairs be#ame more ,o,ular in the markets 1ith a hotter #limate.
0he #onsumers find the deli#ious taste of #ho#olate in the middle that easil) melts in the mouth
and not in the hot #limate. It is also an affordable #ho#olate for ever)one. 0he ne1 3#lairs
run#h is 1ith more #ris,) #aramel shell for hot #limati# #onditions.
In the branded im,ulse market, the share of #ho#olate in 7.7N and adbur)@s share in the
im,ulse se!ment is '.(N fa#tor like #han!in! attitude, hi!her dis,osable in#ome, a lar!e )outh
,o,ulation, and lo1 ,enetration of #ho#olate $..N of urban ,o,ulation& ,oint to1ards a bi!
o,,ortunit) of in#reasin! the share of #ho#olate in the branded im,ulse amon! the #ostl)
alternative in the branded im,ulse market.
It a,,ears that #om,an) is likel) to ,la) the value !ame to e;,and the market en#oura!ed b) the
re#ent su##ess of its lo1 ,ri#ed Hvalue for man) ,a#ks@. Various measures are undertaken in all
areas of o,eration to #reate value for the future. Ne1 #hannel of marketin! su#h as !iftin! and
#hild #onne#tivit) and lo1 end value for mone) ,rodu#t for e;,andin! the #onsumer base have
been identified.
In terms of manufa#turin! mana!ement fo#us is on o,timi<in! manufa#turin! effi#ien#ies and
#reatin! a 1orld #lass manufa#turin! lo#ation for 9M and K#lairs. 0he #om,an) is toda) the
se#ond best manufa#turin! lo#ation of adbur)@s S#h1e,,es in the 1orld.
3ffi#ient sour#in! of ke) ra1 material i.e. #o#a throu!h for1ard ,ur#hase of im,orts, hi!her lo#al
#onsum,tion b) enterin! lon! term #ontra#t 1ith farmer and undertakin! efforts in e;,andin!
lo#al #o#a area develo,in!. 0he initiatives in the terms of develo,ment a lon! term domesti#
#o#a a sour#in! base 1ould field ma;imum !ains 1hen #ommodit) ,ri#es start movin! u,.
Ase of it to im,rove lo!isti#s and distribution #om,etitiveness
Atili<in! mass media to #reate and maintain brands.
3;,and the #onsumer base. 0he #om,an) has added ( million ne1 #onsumer in
the #urrent )ear and ho1 has #onsumer base of 70 million althou!h the !ro1th
in absolute numbers is lo1er than tar!eted, the #om,an) has been able to
in#rease the 1idth of its #onsumer base throu!h laun#h of lo1 ,ri#ed ,rodu#ts.
Im,rovin! distribution >ualit) b) addressin! issues of ,rodu#t stabilit) b)
installation of #oolers at several outlets. 0his 1ould be reall) effe#tive in
maintainin! #onsum,tion in summer, 1hen sales usuall) di, due to the fa#t that
the heat effe#ts ,rodu#t >ualit) and thereb) #onsum,tion.
0he above are some ste,s bein! taken internall) to im,rove future o,eration and
,rofitabilit). At the same time the mana!ement is also a1are of e;ternal #han!es
takin! ,la#e in the #om,etitive environment and is takin! ste,s to remain
#om,etitive in the future environment of free im,orts, lo1er barrier to trade and
the advent of all !lobal ,la)ers in to the #ountr). 0he mana!ement is not undul)
#on#erned about the hu!e delu!e of im,orted #ho#olate brands in the market
,la#e.
It is of the vie1 that si<e of this im,orted ,remium market is look small to threaten its o1n
volumes or sales in fa#t, the #om,an) looks at the tree im,ortant as an o,,ortunit), 1here it
#ould o,timall) use the !lobal adbur) S#h1e,,es ,ortfolio. 0he #om,an) 1ould be able to not
onl) ,rovide !reater variet), but it 1ould also be more #ost effe#tive to test market ne1 ,rodu#t
as 1ell as im,rove s,eed of res,onse to #han!e in #onsumer ,referen#e throu!h im,orts. 0he
onl) #on#erns that the #om,an) has in this re!ard is the #urrent hi!h level of duties, 1hi#h limit
the o,,ortunit) to laun#h value for mone) ,rodu#ts.
C&m=!r!ti%e "tudy &5 t#e tB& 1&m=!$ie" )
0he Indian #ho#olate market is !ettin! bi!!er and better. "n one hand there are im,orted
varieties and on the other #om,anies like adbur) laun#h their o1n ,rodu#ts of international
standards. In India in earl) D0@s market share of adbur) 1as (0N but after the Nestle enters to
Indian ho#olate industr) the adbur)@s share redu#e to C0N, 15N share is hold b) Nestle, 15N
b) Amul and other #om,anies. 0he hi!her #om,etition is bet1een adbur) and Nestle as Nestle
is tr)in! to have tou!h fi!ht 1ith adbur).
Nestle 1as #onne#ted 1ith India sin#e 1D1.. 0he) set u, first manufa#turin! unit in 1D71 in
India and then the) o,en total C manufa#turin! units in India u, to .007. 0he) 1ere
manufa#turin! Milk *rodu#ts and Nutrition, 8evera!es, ookin! Aids. 0he) laun#hed there
*remium Milk ho#olate, Milk) 8ar, run#h and 8ar "ne in India a!ainst the #om,etition of
adbur) 9air) Milk and 5 Star. $Nestle India 4td., n.d.&
5it 5at 1as 4aun#h in India in 1DD5 and it be#omes the 1orld@s most ,o,ular #ho#olate 1ithin a
short time of its laun#h and it 1as a##ordin! to the tar!et of the Nestle. A!ainst the #om,etition
of 5it 5at adbur) laun#h it@s *erk, to safe!uard its brand. 5it 5at and *erk 1as a ne1 ,rodu#t
se!ment in the form of 1afer #ho#olates as an)time sna#ks.
5it 5at sells 1as more than the *erk in the outlets 1here both 1ere available. 0here 1as a ne#k
to ne#k #om,etition bet1een both the ,rodu#ts. It 1as also said threat it 1as dan!erous for the
mother ,rodu#ts of adbur) 9air) Milk.
adbur) and Nestle have ,roved in ,ra#ti#al that #ho#olates are the most inevitable indul!en#e
of all times. In the realm of advertisin!, the business of #ho#olate marketin! stands at a fi!ure of
Rs.1'5 #rore. And 1ith that kind of mone), the s,a#e be#omes all the more interestin! to 1at#h
out for, more so for the marketers.
If 1e #ontinue to let the numbers do the talkin! for sometime, 1e 1ill !et to kno1 some dark
#ho#olat) fa#ts, like, adbur) leads the Indian ho#olate market 1ith a C0N share of the #ho#o/
,ie, 1hile Nestle o##u,ies onl) .5N of the #ho#o #hunk. Interestin!l), even 1ith less than half
of the former@s share, Nestle a,,ears as the se#ond leader in the entire arena and hen#e be#omes
the se#ond ,ivotal ,la)er in the market. 8ut that@s not the reason 1h) the) be#ome this issue@s
anointed marketers at 1ar. In fa#t the) have attained the status for bein! a!!ressive marketers of
their res,e#tive #ho#olate variants for a #onsistentl) lon! duration 1ithout fail. An atta#k from
one side has rarel) !one unnoti#ed and not bein! retaliated 1ith utmost valour from the
#ounter,art. So let@s look at the events based on the '*s of marketin! that lead to the #ulmination
of this 1ar, if at all, it has rea#hed to one.
PRODUCT
0he ver) first element of the '*s of Marketin! + H*rodu#t@ + is nothin! less than 1ea,ons for the
#om,anies. :oin! b) that lo!i#, adbur)@s armour) #om,rises of 9air) Milk $their fla!shi,
,rodu#t&, 9air) Milk 2ruit E Nuts, 9air) Milk Roasted Almonds, 9air) Milk ra#kles, 5/Star, 5/
Star run#h), *erk, :ems, Shots, 3#lairs, elebrations, 8ournville, and a ne1 entrant, 9air)
Milk Silk. And the artiller) at Nestle@s side in#ludes 5it 5at, Mun#h, 8ar "ne, Milk)bar E
Milk)bar hoo. 8ut if )ou think that the latter hasn@t been able to ,ut u, a fi!ht #onsiderin! the
number of metals in its fob, 1e 1ould su!!est )ou to not !o b) the numbers -ust on this one. 0o
battle the e;istin! variants in the market is an on!oin! task but the real fi!ht is 1hen )ou have to
oust a ne1 entrant, 1hi#h in this #ase 1as adbur)@s 9air) Milk Silk.
Silk entered the #ho#o fra) durin! 2ebruar) last )ear and 1ithin si; months, Nestle 1ent on to
revam, 8ar "ne, 1hi#h 1as advertised after a hiatus of si; )ears. And interestin!l), 8ar "ne
bein! a #aramel formulation, Nestle tar!eted adbur) 5/Star 1ith this ,rodu#t rather than Silk to
unsettle adbur), 1hi#h had -ust !one throu!h some ma-or #am,ai!ns to ,romote Silk, a little
more. ommentin! on this strate!), Nanda 5ishore Sethuraman, Marketin! =ead, 8harti AFA
Investment Mana!er sa)s, IIt 1as a !ood move b) Nestle to laun#h the 8ar "ne #ho#olate as
a!ainst 5/Star. 8ar "ne has been in the market for 1a) too lon!, but has almost been for!otten.J
8ut then, the strikin! truth here is that for Nestle@s ,rodu#ts there is no over ar#hin! brand
identit) as #om,ared to adbur)@s. 0hus 1hile ,eo,le remember 5 star as a adbur) ,rodu#t, not
man) reali<e that 8ar "ne is a Nestle ,rodu#t. And for this, as Sethuraman adds, INestle@s
#ho#olate #ate!or) #ommuni#ation re>uires rethinkin!.J
PRICE
Needless to sa), in India, ,ri#e matters the most and it has al1a)s been the de#idin! fa#tor for
man) marketer@s fate in this market. 8ut the ,ri#e 1ar bet1een adbur) and Nestle in India first
s,arked off in .00. 1hen Nestle introdu#ed ho#osti#k for Rs.. and as a re-oinder, adbur)
introdu#ed ho#ki at the same ,ri#e. 0oda), both the ,la)ers have !ot almost all of their ,rodu#ts
at lo1 to hi!h but similar ,ri#e ,oints. 8ut as of Ma), .011, Nestle is set to hike ,ri#es of 5it 5at
bars from Rs.5 and 10 to Rs.C and 1' res,e#tivel). Interestin!l), this move is ver) different from
1hat the #om,an) had attem,ted in the ,ast 1hen it introdu#ed variants of 5it 5at 1ith redu#ed
>ualit) at e;istin! ,ri#es. 8ut the e;,eriment turned out to be a killer for the #om,an). 0he
volumes re!istered shar, fall for#in! Nestle to #han!e their de#ision.
8ut then industr) e;,erts like Ashok 4alla, *resident, 9i!ital, 3uro RS: India, feel that a ,ri#e
,oint drives #ho#olate #onsum,tion to a lar!e e;tent in ever) market. So, a #onsumer looks for
#onvenien#e 1hen he is ,a)in! for a #ho#olate, irres,e#tive of obs#ure si<es of a #ho#olate. 2or
e;am,le, a #onsumer 1ould al1a)s ,refer to ,a) Rs.5 instead of Rs.7 -ust to avoid a
#umbersome transa#tion at the retail store. It ma) be a different ball !ame alto!ether on#e ,ri#es
#ross Rs.30 mark, but 1ithin that ran!e, #ertainl), Nestle must be a little more a##ommodative
like adbur), 1hi#h has a ver) #onvenient ,ri#es for all its ,rodu#ts belo1 Rs.30.
PLACE
If )ou #an@t ,la#e the si!nifi#an#e of ,la#e in the marketin! rei!n, )ou 1ill soon start feelin! out
of ,la#e. In this #ase, both adbur) and Nestle en-o) a 1ell knit distribution net1ork 1hi#h falls
in ,la#e for them all the time. 8ut 1ho !ets the ed!eT %ell, Ramesh 0ahiliani, a 8rand
onsultant, believes, INestle has a stron! distribution net1ork and that@s the mus#le ,o1er it
al1a)s had.J 8ut 4alla feels that 1hile adbur) #ho#olates have a tro,i#ali<ed formulation,
Nestle loses out on that bit and thus be#omes diffi#ult to distribute, sto#k and store.
PROMOTION
More often than not, the last bits are the most inte!ral ones. 0he 'th H*@ of Marketin! +
*romotion + is no e;#e,tion either. If it looks like a one sided vi#tor) so far, this ,arti#ular area
#han!es the !ame #om,letel). Nestle mi!ht have lost out on various #ounts but 1hen it #omes to
,romotin! the brand, both have been e>uall) !uerilla/like in the 1arfare. If adbur) has #ome u,
1ith IMeetha hai 5hana aa- *ehli 0areekh =aiJ, Nestle Mun#h retorted 1ith a 1itt), I5hao bina
tareekh dekheJ #am,ai!nG if adbur) 9air) Milk $9M& has travelled far and 1ide from I5u#h
khaas hai hum sabhi meinJ to I*a,,u ,aas ho !a)aJ to IShubh AarambhJ to IMeethe mein k)a
haiJ, Nestle Mun#h has so-ourned from Ian@t sto, mun#hin!J 1ith Rani Mukher-ee to IMera
#run#h mahaanJ 1ith 8o;in! #ham, Vi-endra Sin!h.
ADERTISING & SALES PROMOTION
As 1e have dis#ussed the im,ortan#e of Advertisin! and Sales ,romotion in introdu#tion, so 1e
kno1 ho1 mu#h advertisin! aim sales ,romotion are im,ortant.
0he slo!ans of advertisin! are the tools of sales ,romotion are so im,ortant 1hi#h #ou,les the
#ustomer to ,ur#hase the ,rodu#t. No1 1e are !oin! to dis#uss all these thin!s one b) one about
adbur).
2ollo1in! are a fe1 advertisin! slo!ans used b) adbur) for introdu#in! the ,rodu#t to the
#ustomers6/
0=3 R3A4 0AS03 "2 4I23 $9AIRU MI45 &
0="9I SI *30 *""LA 5A8=I 8=I 5A=I 8=I $*3R5&
%=3N 3V3R "N =AN:3R S0RI53 $*3R5&
0AN 5I S=A50I, MAN 5I S=A50I $8"ARNVI0A&
5A= VA9A =I S"4I9 $*INI&
U3= =""4A03 5=A3 AA* IN=3 5=A3 $34AIRS&
All these slo!ans used b) adbur) are beautifull) ,re,ared be#ause the) #an #om,el the
#onsumer to bu) the ,rodu#t to some e;tent.
No1 1e 1ill dis#uss them in details 1ith the hel, of 1hi#h 1e #an easil) understand ho1 these
slo!ans #an leave these im,ression on the #ustomer.
T#e Re!' T!"te &5 Li5e
0his slo!an 1as ,re,ared for the first #ho#olate introdu#e b) the adbur) first time in India. 0he
#ho#olate 1as H9air) Milk@. 0his slo!an sa)s that there are man) t),es of ,rodu#ts ,resent in the
market, the) have different taste but 9air) Milk is the best and the true taste of the life. 0his
slo!an also stands for the vi#tor). "n ele#troni# media, the advertisement sho1s that a #ri#keter
1ins the mat#h and after that he and his !irl friend eats this ,rodu#t. 0herefore, this stands for
vi#tor) of an) bod) eats this ,rodu#t 1ill definitel) 1in in his life.
T#&di Si Pet P&&<! 7!b#i B#i 7!#i B#i
%hen adbur) introdu#ed its ne;t #ho#olate named H*erk@ this slo!an 1ere used. 0his e;,lains
that if an)bod) is hun!r) and he do not have an) thin! to eat a##e,t this *erk then he #an have
this. 0his sho1s that *erk is so !ood #ho#olate 1hi#h #an be used as a substitute of food and is a
#om,lete food.
6#e$e%er &$ @u$/er Stri(e
4ater on adbur) #ame out 1ith ne1 slo!an on televisionG the advertisement sho1s that fe1
students are on hun!er strike. 8ut the) had the #ho#olate. 0his sho1s that nobod) #an #ontrol
himselfSherself if this ,rodu#t of adbur) is l)in! in front of that ,erson. 0his means that
adbur) ,rodu#t is so !ood that nobod) #an leave it.
T!$ 7i S#!(ti8 M!$ 7i S#!(ti
0his slo!an 1as used for H8ournvita@. 8ournvita is full of ,roteins, vitamins, minerals and all
those ne#essar) thin!s 1hi#h are useful for our bod) and mind. 0herefore, this slo!an stood best
for 8ournvita. 0AN 5I S=A50I, means the ener!) to the bod). If an)bod) here this ,rodu#t,
he Sshe 1ill remain a#tive for 1hole da). 0hat ,erson 1ill look health), a#tive and 1ill look
smart.
YE@ C@OCOLATE 7@AIN8 AAP IN@E 7@AIN
%hen 3#lairs toffee #ame in the market, this slo!an 1as used. 3#lairs is a toffee filled 1ith
#ho#olate. It means that instead of havin! #ho#olate )ou #an have e#lairs toffee too. It a ,erson
does not 1ant to have 1. ,ie#es of #ho#olate, #an have one or t1o e#lairs toffee.
7UC@ EADA @I SOLID
No1ada)s ne1 #ho#olate has been introdu#ed b) the adbur) and this slo!ans !oin! on #reatin!
demand for this ne1 ,rodu#t. In this ad 1e #an see that one #ho#olate falls on a #ar and dama!es
the #ar. 0his #ho#olate is so stron! due to lots of nuts, #aramel et#. et#. ,resent in this #ho#olate.
0his also sho1s that this is for adventurous ,eo,le 1ho love thrills, adventure et#.
DISTRIBUTION SYSTEM ADOPTED BY CADBURY
adbur) S#h1e,,es ,i#k the 1orld number 3 soda market has a!!fed to sell most of its soft
drinks business outside the AS to o#a o. for B 1.(5 billions to finan#e a head on battle 1ith
oke in the No. 1 soda makers home market.
0he a!reements in#luded the S#h1oers 9r. *e,,er #handa dr) and #rush brands and e;ude South
Afri#a and 2ran#e the ,a#t 1hi#h 1as de,endent on re!ulator) a,,roval 1as likel) to be
#on#ealed in mid 1DDD adbur) said.
0he more 1ill allo1 adbur) to e;,and it 9r. *ee,er business in AS 1here it derives t1o/thirds
of its soft drinks sales and 1as a 15 ,er #ent market share at the same time it !et adbur) out of
markets 1here it is !ro1in! at a slo1er ,a#e. 0he shares rose as mu#h as C0.5 ,er #ent or C.5 ,er
#ent or C.5 ,er #ent 100..
I0his sort out the ,la#es 1here adbur)@s s)stems 1eren@t stron! enou!h to #om,ete 1ith o#a/
ola,J said Mr. 9avid lon! an anal)st a =enderson rosht1aite, Ithe) 1ere fi!htin! 1ith ,ro,er
for this.
M!i$ "te=" i$%&'%ed i$ De%e'&=i$/ t#e 1#!$$e' de"i/$
2ormulation of #hannel ob-e#tives.
Identifi#ation of #hannel fun#tions.
Anal)sin! the ,rodu#t #hara#teristi#s and linkin! #hannel desi!n to the ,rodu#t.
3valuation of the distribution environment in#ludin! le!al as,e#ts
3valuation of #om,etitors #hannel ,atterns.
3valuation of #om,an) resour#es and mat#hin! the #hannel desi!n to the resour#es.
9evelo,ment of alternative #hannel desi!ns and selation of the one that suits the firm
most.
Fu!'itie" t#!t C!dbury m!$!/eme$t '&&( 5&r B#i'e "e'e1ti$/ de!'er"
8usiness re,utation and business standin!.
8usiness #a,a#it) and salesmanshi,.
3;,ertise and ,revious e;,erien#e in the line.
2inan#ial #a,a#it) and 1illin!ness to invest in the line.
redit 1orthiness.
a,a#it) to offer to #ustomers 6
Re>uired assortments of ,rodu#ts.
Re>uired servi#es.
a,a#it) and 1illin!ness to e;tend #redit to #ustomers.
a,a#it) to ,rovide 6
$1& Stora!e fa#ilities.
$.& Sho1rooms,
$3& Sho,s,
$'& Servi#e 1orksho,s,
$5& Salesmen and
$7& Servi#e men #ommensurate 1ith e;,e#ted business
So#ial status
:ood relation 1ith6 onsumer, es,e#iall), bulk #onsumers, and sub dealers.
PRICING POLICIES ADOPTED BY CADBURY
9es,ite intensif)in! #om,etition for tar!et share and a stream of ne1 ,rodu#ts, ,itted a!ainst
ea#h other, the ,ri#e line of ,o,ular brands of #ho#olate had move u,1ard over the ,ast one )ear.
*ri#es of ke) brands like Nestle@s 5itkat and adbur)@s 9air) Milk have rose b) .5 ,er #ent ea#h
bet1een November .001 and November .00..
8rands su#h as adbur)@s 3#lairs, 1here the unit ,ri#es is lo1er, have seen a shar,ener ,ri#e
hike.
A ma-or ,ortion of the ,ri#e revision o##urred in the last ,art of .001 and in the first >uarter of
.00..
A shar, rise in #o#oa ,ri#es and ru,ee and de,re#iation es#alation in in,ut #osts for #ho#olate
manufa#turers in the last le! of fis#al .001/D(.
%hole #o#oa, ,ri#es have re#eded from their hi!h after Se,tember .001, ru,ee de,re#iation and
the hi!her in#iden#e de,re#iation and the hi!her in#iden#e of e;#ise duties has ke,t the ,ri#e line
of #ho#olates.
0he #ost of #o#oa, the ke) in,ut, a##ounts for around '5 ,er #ent of the manufa#turin! #osts for
#ho#olates ,rodu#tion.
9omesti# #o#oa ,rodu#tion $estimated at '500& to 5000 tonnes for the #urrent )ear& has
been sta!nant and takes are of less than a third of domesti# re>uirements of #ho#olate and malted
food manufa#turers. Manufa#turers su#h as adbur) and Nestle India im,ort over half of this
#o#oa re>uirements.
International #o#oa ,ri#es moved u, from 1'0 #ents ,er k! in Lanuar) .001 to ,eak at 1D0 #ents
,er k! in Se,tember .001, ,rom,tin! a round or ,ri#e in#rease in #ho#olates in the last ,art of
.001.
Subse>uentl) #o#oa ,ri#es have re#eded to around 150/170 #ents ,er k! and are e;,e#ted to rule
at these levels in the near term. =o1ever, ru,ee de,re#iation of around 1C ,er #ent sin#e
Se,tember .001 is likel) to have offset the im,a#t of this on ,rodu#tion #osts.
0he re#lassifi#ation of the 1afer/#oated #ho#olates, makin! them #har!eable to an e;#ise dut) of
1( ,er #ent, a!ainst ( ,er #ent earlier, is also likel) to #ontribute to ,ri#e es#alation.
0he e;#ise authorities have re#entl) ,assed an order on Nestle, dire#tin! it to ,a) e;#ise dues at
the hi!her rate of 1( ,er #ent. 0he matter is no1 under a,,eal.
Ma;imum Retail *ri#e / based e;#ise duties, 1hi#h have been introdu#ed on #ho#olates in the
latest bud!et #ould also add to the ,rodu#tion #ost es,e#iall) in the ,remium #ate!ories.
0hou!h #o#oa ,ri#es have e;tended to rule relativel) soft. 0he ,ri#e line for #ho#olates a,,ears
unlikel) to #ome do1n in the near future.
FACTORS INFLUENCING PRICING OF CADBURY
I$ter$!' F!1t&r"
or,orate and marketin! ob-e#tives of the firm.
0he ima!e sou!ht b) the firm throu!h ,ri#in!.
0he #hara#teristi#s of the ,rodu#t.
*ri#e elasti#it) of demand of the ,rodu#t.
0he sta!e of the ,rodu#t on the ,rodu#t life #)#le.
Ase ,attern and turn around rate of the ,rodu#t.
ost of manufa#turin! and marketin!.
3;tent of distin#tiveness of the ,rodu#t and e;tent of ,rodu#tion differentiation ,ra#ti#ed
b) the firm.
"ther elements of the marketin! mi; of the firm and their intera#tion 1ith ,ri#in!.
om,osition of the ,rodu#t line of the firm.
E?ter$!' F!1t&r"
Market #hara#teristi#s.
8u)er@s behavior in res,e#t of the !iven ,rodu#t.
8ar!ainin! ,o1er of ma-or #ustomers.
om,etitors ,ri#in! ,oli#).
:overnment #ontrols re!ulations on ,ri#in!.
"ther relevant le!al as,e#ts.
So#ietal $or so#ial& #onsiderations.
Anderstandin!, if an) rea#hed 1ith ,ri#e #artels.
C!dbury &b<e1ti%e &5 =ri1i$/
*rofit ma;imi<ation in the short/term.
*rofit o,timi<ation in the lon!/term.
A minimum return $or tar!et return& on investment.
A minimum return on sales turnover.
0ar!ets sales volume.
0ar!et market share.
9ee,er ,enetration of the market.
3nterin! ne1 markets.
0ar!et ,rofit on the entire ,rodu#t line irres,e#tive of ,rofit level in individual ,rodu#ts.
5ee,in! #om,etition out, or kee,in! it under #he#k.
2ast turn around and earl) #ash re#over).
Stabili<in! ,ri#es and mar!ins in the market.
0he Indian #ho#olate market is !ettin! bi!!er and better. %hile on one hand, the ,remium
se!ment $#om,risin! im,orted varieties& is o,enin! u,, on the other, #om,anies like adbur)
India are laun#hin! indi!enous ,rodu#ts made to international standards. "f the .0,000/tonne
#ho#olates market 1orth about Rs. '00 #rores, adbur) a##ounts for about C0 ,er#ent, follo1ed
b) Nestle, 1ith a share of around .0 ,er#ent. Amul has five ,er #ent of the market, 1ith minor
,la)ers takin! the rest. 0he battle, thou!h, is bet1een adbur) and Nestle. 0hou!h mu#h smaller
,ortfolios, Nestle is ,uttin! u, a tou#h fi!ht.
+ St!r
Althou!h ,ositioned internationall) as ener!) bar, 5 Star 1as ,ositioned on an emotional
,latform in India durin! the late 1D(0s. S)mbolisin! to!etherness, 5 Star 1as ori!inall) tar!eted
at teena!ers. In Lune 1DD', the #om,an) re1orked the strate!) for 5 Star to make it a sour#e of
ener!). In fa#t, before the laun#h of *erk, 5 StarOs ener!) bar ,ositionin! made it a sna#kin!
#ho#olate, 1ith Nestle ,it#hi!n 8ar "ne $laun#hed in 1DD3& a!ainst it 1ith the ,un#hline Ofor
those in bet1een timesO. adbur) 1ill be laun#hin! a ne1 #am,ai!n for 5 Star shortl). 0he)
1ould like to further 5 StarOs e>uit) in the fun#tional or sna#kin! dire#tion. It is ver) nebulous
one thou!h.
E1'!ir"
om,etin! in the #he1able toffees se!ment, 3#lairs 1as relaun#hed durin! the mid/nineties 1ith
a ne1 name, 9air) Milk 3#lairs. A##ordin! to Ra-iv 8akshi, Mana!in! 9ire#tor $desi!nate&,
adbur) India 4td, !ro1th in this se!ment is ver) hi!h. It is 1orth over '000 tonnes no1. Nestle
also a ,resen#e here 1ith NestleOs 3#lairs.
Gem"
8road#astin! :ems, thou!h, did not ,rove to be a feasible ,ro,osition for adbur). 0ar!eted at
#hildren under 1. )ears 1ith the O:ems 8ondO advertisin!, adbur) de#ided to 1oo teena!ers
1ith the OSmartO. Ver) smart #am,ai!n. 8ut no1, the #om,an) is re/tar!etin! #hildren 1ith its
animated #ommer#ial. :ems is the best brand to s,eak to #hildren. olorful #ho#olate buttons
a,,eal most to #hildren and that is 1h) 1e are re/tar!etin! #hildren.
%hile adbur) has su##essfull) relaun#hed a host of its sub/brand, it has not been able to ,a)
attention to brands like Mr. *o,s lilli,o,. As )ou !ro1 and add more brands, the abilit) to s,end
on brands be#omes lo1er. 0herefore 1e have sele#ted a fe1 #riti#al brands to do a ,a,er -ob.
POLO
*"4" is one of NestleOs ke) strate!i# #onfe#tioner) brands 1orld1ide, and re,resents NestleOs
first entr) into the lar!e 50,000 tonne ,.a. $or!ani<ed se#tor& Indian Su!ar #onfe#tioner) market.
GRO6ING MAR7ETS & FALLING MARGINS
In#or,orated in 1D5D as 2ood S,e#ialities 4td., Nestle India 4td. $NI4& is ,romoted b) Nestle
Alimentana/S1it<erland, 1hi#h ,resentl) o1ns 51N e>uit) stake in it. Nil is one of the to,
,la)ers in the ,ro#essed food and bevera!es industr) and the lar!est ,rodu#er of instant #offee
1ith a 'DN market share. Its market dominan#e a,art from instant #offee is s,read over
,ro#essed milk ,rodu#ts $#ondensed milk, milk ,o1ders and dessert mi;&, infant foods and
,ro#essed and #ulinar) ,rodu#ts $instant noodles, sau#es, sou,s et#.&.
3stablished in 1(70, its S1iss ,arent Nestle, S.A. 1ith o1nershi, and a #lut#h of to,selln!
!lobal brands $5it/5at, *olo, Nes#afe, Nido, Ma!!i, *errier et#.& is one of the lar!est and most
,rofitable ,la)ers in the ,ro#essed food and bevera!e industr). 1ith sales at ASB 'C.C billion, it
ranks 3D
th
in the 2ortune 500 list to1erin! over its #om,etitors like, 5ello!!s, ona!ra, :rou,e/
9anone, 5raft/:eneral 2oods and others.
In#reasin! market dominan#e6 NI4Os ,ortfolio #om,risin! over 75 ,rodu#ts, marketed throu!h a
re,resentative/net1ork in 3000 to1ns and 5C0000 outlets, is manufa#tured at five state/of/the/art
manufa#turin! ,lants in India.
%hile its Mo!a unit ,rodu#es milk ,rodu#ts, infant milkfood, 1eanin! #ereals, #ulinar) ,rodu#ts
and bevera!es, the holadi unit 1as set u, to ,rodu#e tea in 1D7C. 0he third ,lant at nan-an!ud
1as set u, in 1D(D to manufa#ture instant #offee and health bevera!es. Its other t1o ,lants are
lo#ated at Samalkha in =ar)ana and *onda in :oa. It is #urrentl) settin! u, another ,lant at
8i#holim, :oa to manufa#ture #ulinar) ,rodu#ts. 0he !amut of o,erations of NI4 #ould be
broadl) #lassified into four #ate!ories.

Dire1t C&m=etiti&$
At ,resent there are three ma-or ,la)ers Nestle, adbur)@s and Amul in the Indian ho#olate
market. am,#o initiall) tried to break into market but failed. 8rief ,rofile of the same has been
entailed belo16
C!dburyC" I$di! Ltd.
adbur)@s India 4td, has been in India sin#e 1D'(. Its brands6 9air) Milk, 5 Star, :ems and
ho#olate 3#lairs are the households names in India toda). In all the se!ments i.e. moulded
#ho#olates, #ount #ho#olates and ,anned #ho#olates, it is undoubtedl) the market leader.
adbur)@s has its manufa#turin! units at 0hane $Mumbai&, Malan,ur, Indori $near *une&, Mithuri
and 5ola,ur. It has a stron! distribution net1ork 1ith about 500 distributors in North India and
more than 3 la# retail outlets bein! servi#ed all over India.
In 1DDC, adbur) ,lanned to ,um, in Rs.(0/#rore to u, ,rodu#tion #a,a#it) at a #ou,le of
adbur)@s fa#tories. 0his #ash is e;a#tl) double of 1hat@s been invested in 1DD7.
0he om,an) laun#hed *erk, a 1afer enrobed #ho#olate in 1DD5. 0his 1as rea#tionar) to the
laun#h of 5it 5at and has been able to #ounter #om,etition.
C!dburyC" D!iry Mi'( .CDM0 > T#e F'!/"#i= br!$d
9M, the oldest of adbur)@s brands 1as laun#hed in 1D57. In the earl) D0s, a rise in the ,ri#es
of #o#oa, in#rease in the e;#ise dut) and a fall in the demand ins,ired the idea of re,ositionin!.
01o )ears in the ,ro#ess after relaun#h adbur)@s 9air) Milk@s market share stood at .5 ,er#ent
1ith sales risin! b) an avera!e '0 ,er#ent ,er annum.
8esides 9M adbur)@s has a number of endorser brands su#h as 2ruit@n@Nut, Nut Milk et#.
3ven thou!h #ontribution of these brands to the #om,an)@s bottom/line is ver) small, the) are
re>uired in order to make a #om,lete ,ortfolio of offerin!.
0he om,an) develo,ed a #on#entration strate!) on 9M, 2ive Star, adbur)@ :ems,
adbur)@s 3#lairs, *erk and the latest of its offerin! *i#ni# $1hi#h has dra1n a !ood res,onse in
the market&.
0he om,an) has also identified su!ar #onfe#tioner), as a !ro1th se#tor. Its first offerin!
:oo!l).
Ne"t'e I$di! Ltd.
Nestle India 4td. has been in India for more than 35 )ears no1. 0he 1orld@s lar!est marketer of
#ho#olates $be#ame 1orld number one 1hen it a#>uired Ro1ntree Ma#intosh of the A5& /
Nestle, made its fora) in the Indian #ho#olate Industr) in November 1DD0. It laun#hed three
,rodu#ts / the milk #ho#olate, the bitter #ho#olate and ra#kle $a #run#h) #ho#olate& / in the
slabs #ate!or) and 8ar "ne in #ount lines.
adbur)@s 1as >ui#k to rea#t, and laun#hed a 1hole host of ,rodu#ts in su##ession6 All Silk milk
#ho#olate, ream) 8ar, and a ne1 version of 5 Star.
Nestle, in the be!innin! did not have its o1n manufa#turin! fa#ilit). It had an allian#e 1ith
am,#o to manufa#ture #ho#olates. 4ater, in 1DD5 a state/of/art manufa#turin! ,lant 1as set u,
at *onda, :oa at a #ost of Rs. 50 #rores. 0his unit took #are of the entire 5it 5at ,rodu#tion.
=o1ever, the ,rodu#tion tie/u, 1ith am,#o still #ontinued.
L!u$1# &5 7it 7!t
5it 5at, one of 1orld@s most ,o,ular #ho#olate, 1as laun#hed in India in 1DD5. %ithin months of
its laun#h, it fulfilled ever) tar!et Nestle had set. Its laun#h 1as a##om,anied b) the laun#h of
adbur)@s *erk in order to #ounter 5it 5at and safe!uard the fla!shi, brand + 9M. 5it 5at has
been able to define a ne1 se!ment in the industr) in the form of the 1afer enrobed an) time
sna#k.
5it 5at outsells *erk in the outlets 1here both are available. In the #ru#ial markets of 8omba)
and 9elhi both are runnin! ne#k/and/ne#k. It has even said to have threatened the mother brand,
adbur) 9air) Milk.
NESTLEC" NeB L!u$1#e"
Br!$d L!u$1#
Allen S,lash Sele#ted ities
$Su!ar andies&
After 3i!ht Mints 9elhi E Mumbai
4ion %afer 8ars 9elhi E Mumbai
Future Out'&&(
2o#us 1ill be on #ho#olates and #onfe#tioner) follo1ed b) #ulinar) ,rodu#ts 1hi#h in#lude the
Ma!!i ran!e and #offee.