Professional Documents
Culture Documents
An Analysis
of the
Marketing Strategies
of
CADBURY INDIA
Submitted by
2
TABLE OF CONTENTS
SERIAL TOPIC PAGE
NO. NO.
I Acknowledgement 05
II Figures & Tables 06
III Abstract 07
CHAPTER ONE
1 Introduction 09
1.1 Limitations of the Study 10
1.2 About Cadbury 11
1.3 Cadbury India 12
1.4 Objectives 13
1.5 Corporate Objectives 14
1.6 Marketing Objectives 15
1.7 Stakeholders Objectives 16
1.8 Importance: General (World) 17-18
1.9 Importance: Specific (India) 19-20
2 CHAPTER TWO
Review of Literature 22-24
3 CHAPTER THREE 25
3.1 Theoretical Foundation
3.2 Micro Environment Analysis 26-28
3.3 Macro Environment Analysis 29-30
CHAPTER FIVE
5.1 Findings 78-80
5.2 Conclusion 81
5.3 Recommendations 82
APPENDIX
IV Bibliography 84-85
V Questionnaire 86-88
4
ACKNOWLEDGEMENT
T he satisfaction and euphoria that accompany the successful completion of any task is
incomplete without the mention of people who made it possible. So I take this as a great
opportunity to pen down a few lines about the people to whom my
acknowledgement is due.
It is with the deepest sense of gratitude that I wish to place on record my sincere thanks to
Dr. Shivaji Banerjee, my project guide for providing me inspiration, encouragement,
guidance, help and valuable suggestions throughout the project.
I would also like to thank all my respondents for giving me their valuable time and
information.
And my heartfelt thanks to my parents and friends for their constant support and help
throughout the journey of this project.
This work has indeed been a learning curve for my academic life, in particular, and life in
general.
……………………
Date:
Place: Kolkata
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FIGURES AND TABLES
SERIAL NO. FIGURES PAGE NO.
CHAPTER ONE
1.1 Percentage of population buying each Impulse Category 09
1.2 Revenue and Net profits over past 3 years 14
1.3 Distribution of Confectionary & Chocolate Market 15
1.4 Myriad Data of the Chocolate Industry 18
1.5 India Chocolate Market Share 20
CHAPTER TWO
Nil -
CHAPTER THREE
3.1 Cadbury India’s Market Share in different Segments 2012 34
3.2 Cadbury Brand Segment 36
3.2 Evolution of Cadbury Dairy Milk 38
3.4 PLC of Cadbury Dairy Milk 40
3.5 BCG Matrix 41
3.6 India Distribution Network 43
3.7 Consumer Chocolate purchases 50
3.8 Cadbury Dairy Milk (CDM)- The Real Taste of Life Campaign 52
3.9 CDM- The Real Taste of Life Campaign 53
3.10 CDM- Kuch Meetha Ho Jaaye Campaign 54
3.11 CDM- Pappu Pass Ho Gaya Campaign 55
3.12 CDM- Miss Palampur Campaign 56
3.13 CDM- Shubh Aarambh Campaign 57
3.14 Marketing plan for age 0 to 18 59
3.15 Marketing plan for age 19-35 years 60
3.16 Marketing Plan for Age 36-65 years 61
3.17 Cadbury Offices & Factories in India 65
TABLES
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ABSTRACT
T he journey of Cadbury Dairy Milk started way back in the year 1905 from Bourneville, UK
but it came to the Indian market in 1948. From the time it was introduced in India, Dairy
Milk has been the market leader in the confectionery segment commanding a
30%market share and average daily sales of 1 million bars. The reason that our group chose
Cadbury dairy milk for the brand audit is that it provides us with ample scope to study the
various aspects of branding like communication strategies, innovative ad campaigns,
establishing an emotional connect with consumers, brand repositioning, rebranding etc.
We’ll be studying the evolution of Cadbury dairy Milk by concentrating on the following
aspects:
How dairy milk redefined the chocolate segment from being seen as ‚meant for kids‛
to a thing to be enjoyed by everyone in moments of joy and celebration by targeting
the adult segment.
Dairy Milk has always tried to keep a strong association with milk, with slogans
such as "a glass and a half of full cream milk in every half pound" and
advertisements that feature a glass of milk pouring out and forming the bar.
Its use of innovative and interesting ad campaigns to make chocolate eating a habit
among the consumers, especially the adults.
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CHAPTER ONE
The four major confectionery categories are- chocolate confectionery, sugar confectionery,
gum and cereal bars. The Indian confectionery market reached a value of around $500
million in 2005. India’s chocolate market is dominated by two just companies—Cadbury,
The Indian chocolate market is estimated to be worth Rs. 3.2 billion, with an annual growth
rate of 10 percent. Per Capita Consumption levels are very low in India, as compared to 8.7
kg per year in the U.K. The market therefore offers tremendous potential for growth. In our
analysis we are concentrating on the chocolate industry in general and Cadbury’s in
particular. Cadbury India Limited (CIL), a part of the Cadbury Schweppes Group, is India’s
leading confectionary manufacturer. Cadbury’s Dairy Milk, 5 Star, Éclairs, Perk and Gems
are the largest selling brands in their segments. CIL is estimated to have a 65 percent share
of the Indian chocolate market. In fact the word Cadbury is a classic example of a brand
coming to symbolize a product category.
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1.1 Limitations of the Study
The sample was confined to 100 respondents. So this study cannot be regarded as
“full -proof” one.
There was a fear of reprisal among the employees to reveal their personal feelings
and the result may not reflect the actual satisfactions.
Such a dynamic topic couldn’t be justified in a short time period. A topic so vibrant
and extensive will only be justified if research is conducted over a period of at least
a quarter year.
The findings and conclusions are based on knowledge and experience of the
respondents sometime may subject to bias.
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1.2 About Cadbury
Cadbury was established in Birmingham, England in 1824, by John Cadbury who sold tea,
coffee and drinking chocolate. Cadbury developed the business with his brother Benjamin,
followed by his sons Richard and George. George developed the Bourneville estate, a model
village designed to give the company's workers improved living conditions. Dairy Milk
chocolate, introduced in 1905, used a higher proportion of milk within the recipe compared
with rival products. By 1914, the chocolate was the company's best-selling product.
On 4 August 2011, Kraft Foods announced they would be splitting into two companies
beginning on 1 October 2012. The confectionery business of Kraft became Mondelēz
International, of which Cadbury is a subsidiary.
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1.3 Cadbury India
C adbury India began its operations in India in 1948 by importing chocolates. It now has
manufacturing facilities in Thane, Induri (Pune) and Malanpur (Gwalior), Hyderabad,
Bangalore and Baddi (Himachal Pradesh) and sales offices in New Delhi, Mumbai, Kolkata and
Chennai. The corporate head office is in Mumbai. The head office is presently situated at Pedder
Road, Mumbai, under the name of "Cadbury House".
This monumental structure at Pedder Road has been a landmark for the citizens of Mumbai
since its creation. Since 1965 Cadbury has also pioneered the development of cocoa
cultivation in India. For over two decades, Cadbury has worked with the Kerala Agricultural
University to undertake cocoa research.
Cadbury was incorporated in India on 19 July 1948. Currently, Cadbury India operates in five
categories – Chocolate confectionery, Beverages, Biscuits, Gum and Candy. Some of the key
brands are Cadbury Dairy Milk, Bournvita, 5 Star, Perk, Bourneville, Celebrations, Gems, Halls,
Éclairs, Bubbaloo, Tang and Oreo. Its products include Cadbury Dairy Milk, Dairy Milk Silk,
Bourneville, 5-Star, Temptations, Perk, Gems (a version of M&M's), Eclairs, Bournvita,
Celebrations, Bilkul Cadbury Dairy Milk Shots, Toblerone, Halls, Tang and Oreo.
It is the market leader in the chocolate confectionery business with a market share of over
70%. Cadbury India, on 21 April 2014, changed its name to Mondelez India Foods Limited.
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1.4 OBJECTIVES
To understand the essence of the 4 P’s of Marketing with respect to the marketing
efforts of Cadbury India
The objectives of the marketing strategies employed by the company are manifold.
They have been segmented into proper heads for our greater understanding.
Corporate objectives
Sales objectives
Advertising objectives
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1.5 Corporate Objectives
Broadening consumer appeal and extending reach to newer markets
Sustained growth of market share through aggressive product development
Striving for international quality in the products and processes
Focusing on cost competitiveness, productivity and innovative utilization of assets
Energizing and developing its people
India wants to achieve in the next four years what it has in the last 50 years.
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1.6 Marketing Objectives:
Double its turnover—which stood at Rs.1, 0000 crore in 2014—by 2020. This calls
for a growth rate of over 20 percent annually and will be done by setting up new
capacity, and increasing volumes
Get more people to eat more chocolate, which calls for making it more affordable and
being more innovative
Could get into new product categories like gums where the global portfolio is
impressive
Like most players with near-monopoly shares, Cadbury runs the risk of losing share to new
players like Hershey’s, ITC (with brands like Minto and Candyman) as well as to premium
imported chocolates. But that may not be much of a worry if Cadbury succeeds in growing the
market. They could, for instance, hold a 50 per cent share but of a much larger pie.
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1.7 Stakeholders Objectives
Consumer centric:
Future activities will cover further improvisation of product & packaging to deliver
superior value to the consumers
Greater innovation in packaging & product presentation across various power brands
Continue to engage in regular dialogue with its suppliers and responds to their
suggestions
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1.8 IMPORTANCE
General: World
T he chocolates market is estimated at around 33,000 tonnes valued at approximately Rs8.0 bn.
Cadbury is the leader in Chocolate with 70% share. It has actually become the generic
name for chocolates in India.
Cadbury with its Dairy Milk, Five Star, Milk Treat, Eclairs, Golden, is ruling the roost. In
chocolate-based drinks, it claims nearly 50% of the market. Cadbury India's market share in
cocoa-based products is 35%, with Dairy Milk brand alone accounting for 29%. Perk and
Five Star account for another 20%. Cadbury derives 76% of its revenues from chocolates
and other confectionery sales.
The next closest competitor to Cadbury in this segment is Nestle 22%. Besides that large
foreign brands like Hershey’s and local ones like ITC are trying to tread into Cadbury’s turf.
Imported chocolates are available via modern trade in higher end segments where Cadbury’s
presence is arguably weaker.
Although the players have resorted to very aggressive promotional drives, there has been
After the worm controversy in October 2003, there was a meltdown in chocolate sales.
Cadbury India appears to be on a recovery path.
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An Analysis of the Marketng Strategies of Cadbury India
Specific: India
I ndia is the world's fastest growing market for chocolates. Registering 15% annual growth
between 2008 and 2012, the Indian chocolate industry is projected to grow at an even
higher rate in the coming years.
According to Nielsen, the chocolate market in India is valued at Rs 6,600 crore, of which
the premium chocolate market accounts for 11-12 per cent of the category. The size of the
chocolate gifting market is 6 per cent of the category while that of premium chocolate
gifting market is between 1.5-2 per cent of the category.
The Population of India in 2013 is 1.27 billion. The chocolate consumption number
comes around 2, 09,550 ton.
400 Kgs of chocolate consumption is done in India per 3 minutes
Low priced unit packs, increased distribution reach and new product launches can be said
to have fuelled this growth.
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Figure 1.5 India Chocolate Market Share
Source: Economic Times, 3rd May, 2014
In India chocolate consumption was very low in the early 90’s but as the decade advanced
the consumption drastically increased. The late 90’s witnessed a good chocolate market
condition. The chocolate market in India is dominated by two multinational companies –
Cadbury and Nestle. The national companies - Amul and Campco are other candidates in
this race. Cadbury holds more than 67% of the total share of the market. Nestle has emerged
by holding almost 21% of the total share. Apart from chocolate segment, there is also a big
confectionery segment which is flooded by companies like Parry's, Ravalgaon, Candico and
Nutrine. All these are leading national players.
The multinational companies like the Cadbury, Nestle and Perfetti are the new entrants in
the sugar confectionery market. (Management paradise) There are several others which have
a minor share in these two segments. According to statistics, the chocolate consumption in
India is extremely low. If per capita consumption is considered, it comes to only 160gms in
the urban areas. This amount is very low compared to the developed countries where the per
capita consumption is more than 8-10 Kg. Observing this fact it would not be appropriate to
consider the rural areas of India as it will be extremely low. This low consumption is owing
to the notion behind consuming chocolates. Indians eat chocolates as indulgence and not as
snack food. The major target population is the children. India has witnessed a slow growth
The cascading effect of a global takeover has effectively turned this 60-year-old Indian
company into a startup with new shareholders, new product categories and brands, new
leaders, a new identity and culture. New CEO Manu Anand has the unenviable mandate
of managing such unsettling change without taking his eyes off growth. About 5,000
employees of Mondelez India, the almost unrecognisable new avatar of what was
formerly Cadbury India, left their Peddar Road, South Mumbai HQ of over 50 years,
and have just moved to a new home in India Bulls Finance Centre, Parel. The
geographical relocation is symbolic of both pain and excitement that many old and new
executives are respectively experiencing as the 60-year-old company emerges out of two
forced, tumble-dryer style makeovers triggered by rapid ownership changes.
Mondelez International is the world's largest startup. Mondelez is at the same time
both a 20-month-old baby and a $36-billion global snack giant. And, as it seeks to
The second of the three bars in the Bliss range, here we have the old classic: hazelnut.
The slight difference here is that there are no actual hazelnuts in here, rather a “roasted
hazelnut paste (5%)” mixed in with the chocolate truffle. Unsurprisingly Cadbury have
used a brown theme along with the purple for this particular edition, and it looks quite
nice. Being a big fan of Japanese confectionery I like the cardboard boxes and elaborate
over packaging they tend to use, and it’s nice to see Cadbury using boxes for these
rather than plain foil wrappers. Inside the box is, of course, a
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foil wrapper though (akin to the kind used in Lindt/Green & Black’s/etc), and then
ten more big truffle chunks for me to devour. It’s nice to eat a hazelnut bar that
doesn’t leave little pieces in my mouth after I was done with it, but it seemed a little
lacking in actual hazelnut taste.
The remarkable journey from a shop in Birmingham to becoming the world's largest
confectionary company has been achieved through a unique combination of business
purpose and human values. While many publications have, quite rightly, highlighted
the Quaker origins of the company and the Cadbury's contribution to the addressing
of social injustices, these have perhaps overshadowed the business and the brand
building story that lies at the heart of its success. The Cadbury name has been
associated with chocolate and cocoa since the early 1830's, time when mass markets
were only just emerging. Cadbury became the industry leader through harnessing the
opportunities afforded by the rapid industrialization of the United Kingdom and the
emergence of a consuming class; a situation that bears many parallels with the
changes in India and China today.
23
Lauro Alfaro, Faculty, Harvard Business School
Cadbury on social media suffers from the classic case of broadcasting and not
engaging the community it built. While it does well in creating many engaging
apps and properties it does little to make an effort to do one to one
communication. Also an energetic brand like Cadbury not being on twitter
actively is a little absurd. We all know brands like that are impulsive and craving
oriented and getting a reminder via twitter while you are on the go could do
wonders for not only its engagement but also have an influence on its sales.
Cadbury dairy milk, Cadbury Celebrations and Cadbury Bourneville have been doing
an awesome job on Social Media, we expect a much better strategy from Perk, which
is also a Cadbury brand. Perk’s Facebook updates are timely, relevant and
witty to some extent but there is a lot more that the brand could do. India
Cadbury
An Analysis of the Marketng Strategies of
24
CHAPTER THREE
An Analysis of the Marketng Strategies of Cadbury India
25
3.THEORETICAL
FOUNDATION
Barriers To Entry
The industry’s main barrier to entry is with respect to advertising. The incumbent firms
have spent millions of rupees to create brand-loyalty with consumers. The cumulative
effects of advertising create an absolute cost advantage for the incumbent firms, thus
26
entrants must overcome not only current advertising efforts, but also the lingering
impact of past marketing campaigns. High sunk costs also act as a barrier to entry.
Sunk costs in this industry include establishing channels of distribution, advertising
expenditures, and initial research and development costs. All these factors create
difficult barriers to entry for a new firm entering the market and an advantage for
successful first movers such as Cadbury and Nestle. But recent happenings like
Ferrero planning to start production in 2009 at a new factory near Mumbai, and
Hershey partnering with domestic confectioner Godrej Industries to distribute
Hershey products have actually changed the equation a lot.
Supplier Power
Industry uses a wide range of raw materials in manufacturing chocolate products, the
main ones being cocoa beans, sugar and other sweeteners (including polyols and
artificial sweeteners such as aspartame), dairy products (including milk), gum base
and fruit and nuts. Cadbury buys its raw materials from suppliers around the world.
No single supplier accounts for more than 10% of their raw material purchases. One
of the methods implemented by Cadbury to minimize the impact of price fluctuations
and ensure security of supply is by entering into forward agreements and long-term
contracts wherever available.
Cadbury imports cocoa beans from West Africa, primarily Ghana, and the Americas.
West Africa accounts for over 60% of world production. They buy cocoa beans and
cocoa butter from a range of suppliers, and try to minimize the effect of cocoa price
movements and secure our future requirements by entering into forward and future
contracts. In order to ensure assured supply of raw material for its chocolates,
Cadbury India Limited has decided to sell cocoa seedlings to coconut farmers in
Tamil Nadu at Rs 4 per seedling. A MoU was signed between Cadbury India and the
Tamil Nadu government to this effect. They purchase most of the sugar at prices
Buyer Power
End consumers have strong buyer power because of the availability of substitutes,
both generic and brand names. It is easy for a consumer to purchase a nearly
identical product for a lower price. This gives consumers a great deal of leverage and
leads Cadbury to spend millions of rupees to create product differentiation via
advertisements and new products to catch up with the evolving trends in the market.
Retail stores have significant buyer power due to their ability to charge high fees for
shelf space, which is important channel of distribution for Cadbury. Cadbury has
worked hard to build strong relationships with these retailers to minimize this affect.
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Substitutes
The current trends in the market suggest that traditional sweets are possible
substitutes for chocolates. This is further stressed by the fact that till a few years
back chocolate was not considered to be a gift item unlike sweets. However, in
recent years this scenario has changed quite rigorously because of an innovative
strategy taken up by Cadbury.
In order to strengthen the special relationship consumers share with chocolates,
Cadbury India launched its all-year-round ‘Cadbury Celebration gifting’ range with
an array of newly designed
Cadbury Celebration packs. The range features a selection of stylish new packs
available in “Nutbutterscotch”, “Caramel”, “Almond Magic”, “Cashew Magic” &
“Raisin Magic”. The range is priced between Rs 145 & Rs. 155 and is available in all
premium retail outlets across major towns in India. There is also a wide selection of
online vendors that offer Cadbury Celebration range for all kinds of occasions.
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3.2 Macro-Environmental Factors
(PEST Analysis):
Political:
The Food Safety and Standard Bill, 2005 with penal provisions requires a review
as the same gives huge powers to the Inspecting Officers to seize food articles
without authorization and may create unwanted confusion to the detriment of the
company
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Economic:
The prices of cocoa and milk, the chief ingredients used in chocolates, have
gone up by 50 per cent, while the price of sugar, another important raw material,
has come down. The overall input costs have gone up by 20 per cent. India
imports most of its cocoa requirements and the prices of cocoa have risen
globally due to unavailability of cocoa. If the prices of these commodities keep
increasing, Cadbury will be forced to increase the prices
Low margins, high volumes, price sensitivity of the industry and competition from
cheaper substitutes leaves little room for price maneuvering.
Social:
In October 2003, seizure of chocolates stock from Pune plant after worms were
found by customers in Dairy Milk packages; Sales dropped by 30 percent
where it was expected to grow by 15 percent owing to the festive season;
Advertisements went off air for a month and half; To regain the lost faith of
customers, Cadbury invested in technology to the tune of Rs.15 crore, roped in
Amitabh Bachchan as the brand ambassador and upped ad spends by 15 percent
“Indianisation” of the brand to increase width of consumption by entering the
Indian mind space
Technological:
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3.4 SWOT ANALYSIS
Strength
Cadbury being a reputed company has its brand name as one of its biggest strengths. It
has been present for over 65 years even before competition could peep-in. Due to its
presence for so many years people tend to associate chocolate with Cadbury. It is almost
as if Cadbury is synonymous with generic category chocolate. Cadbury is a very
profitable organization, generating revenue in billions. Cadbury India Ltd is supported
by its parent company, Mondelez International. A large range of products like -
chocolates, beverages, malted foods etc. are manufactured by Cadbury. These products
are reasonably priced to suit different economic consumer categories. Celebrity
endorsements have increased sales and also added glitter to the brand name. Cadbury
India has the biggest market share at 67 per cent while Nestle is the second largest at 21
per cent. Amul & other holds the rest. In spite of innovation in the chocolate segment,
their basic chocolate, Dairy Milk, still seems to remain the all-time favourite of most
people. Low cost of production due to economic of scale. That means higher profits,
better market penetration with the strong distribution network.
Weaknesses
The scenario of worms being found in Cadbury chocolates lead to a temporary decline
in sales. Also Cadbury offers a limited variety of products as opposed to other leading
competitive brands, e.g. Amul and Nestle that offer an array of products like biscuits,
dairy products, etc. One of the major raw material i.e. Cocoa has to be imported
leading to bunched imports and higher inventory. Also majority of markets in India
are not Air conditioned and hence cannot store chocolates at least during hot summers,
which limits the market access. There is lack of penetration in the rural market where
people tend to dismiss it as a high end product. It is mainly found in urban and semi-
urban areas. The operating profit of the company declined, declining profitability will
adversely affect the operations of the company. Poor technology in India compared to
current international technologies.
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Opportunities
As Cadbury has established itself very well in the Indian market, it can now narrow
down to some popular products and can bring down its own individual Cadbury’s store.
It has capabilities to increase the range of products manufactured. The company can
easily venture into new segments individually or jointly. Another very important
opportunity that can be observed is the introduction of foreign products in India. The
company can focus on targeting urban areas and developing sectors by working on
availability and affordability. The company aims at bringing efficiency in logistics and
distribution. This can very well be achieved by using information technology. Cadbury
can also focus on gaining profits through chewing gum market in India.
Threats
As Cadbury has already faced a worm scandal, its reputation has been put at stake
by the competitors trying to exploit this situation. Cadbury faces a serious threat in
the confectionery segment from companies like Amul, Nestle, etc. As Cadbury
produces chocolates and a few related products, effective management of all the
areas proves to be difficult at times. Trends of purchase may change with the ever-
changing taste preference of consumers. Changing restrictions and rules from
Government quality control boards may result in pressure on the production of the
company & cost increase. Also, Cadbury is exposed to rise in the cost of cocoa
beans, dairy products and other vital ingredients.
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3.5 The 5 C’s Model
Company
Cadbury dairy milk is a brand of chocolate made by Cadbury Plc. unit of Kraft
Foods and sold in several countries around the world. It first went on sale in 1905 in
the United Kingdom. The current parent is Mondelez International.
Customers
The prospective customer of dairy milk range from 5 to 60 years of age. Since dairy
milk has a range of product suited for every member of the family. The aim is to
strengthen the brand relationship in the current consumer’s life. The ranges of
customers vary for diary milk. Whereas some buy it as an alternative for sweet
others buy it as a gift item. The consumers mostly buy the product on impulse and
are influenced by taste/flavour and then by company/brand.
Competitors
The main competitors of Dairy milk in India are Nestle, Ferrero Rocher, Amul
chocolates & unbranded chocolate. The high end chocolates (Bourneville and silk)
also face competition also face competition from the imported Swiss chocolates. But
one of the biggest advantages the dairy milk has over its competitors is the brand
loyalty that it has got. The excellent advertising, reach and accessibility have made it
the top of mind brand in the chocolate category.
Climate
The climate for the chocolate industry and dairy milk in particular seems very
attractive in a country like India. With the size of the market being so big along with
Collaborators
As already said Cadbury dairy milk manages a huge range of retailers and whole
sellers who make up the collaborators. Over the years the company has partnered
with various other companies like Adam Philippines in 2001 so that diary milk has a
much wider distribution network in the Philippines.
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3.6 Segmentation, Targeting &
Positioning
Segmentation
For more than six 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).
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Market place for any product is comprised of many different segments of consumers,
each with different needs and wants.
The lifestyle of consumers (i.e. their interests and activities) the benefits
which consumers look for in a product or on the occasions when the product
might be consumed.
Cadbury takes into account all these factors when producing a range of
products. It targets different segments within the market, are as follows: -
Break segment: – Products which are normally consume as a snatched break and
often with tea and coffee, for example Cadbury’s Perk and Oreo Biscuits.
Impulse segment: – These products are often purchase on impulse, eating these and
then. They include product such as Cadbury’s Dairy Milk.
Take home segment: – This describes product that are normally purchased from
supermarkets, taken home consumed at a later stage.
The price of Cadbury dairy milk is reasonable and affordable. So a person
does not need to think much before purchasing it, they can easily buy it any
Cadbury dairy milk will not be much affected by the generation differences.
All types of peoples like to purchase the Cadbury dairy milk when they want
to buy it.
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Segmentation Graph
High Premium
Snack Indulgence
Low Priced
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Targeting
Starting from 1905 the purchasers of dairy milk have changed from children to all age
groups. When Cadbury started its operation in India their main buyers were children and
the youth who brought chocolates to celebrate special occasion. This limited the market
for Cadbury dairy milk. This is a reason that Cadbury came out with the campaign of
(‘kuch meetha ho jaye’) to make dairy milk synonymous with sweet so that it could
target all the age groups. In India it was a mentality that chocolates are for children and
the adults were more inclined towards to the conventional sweets. This campaign
targeted them and saw a change in the target market for the brand. Now the target market
for dairy milk is every member of the family.
Cadbury’s Dairy milk always aimed for the bigger bite of the Indian market. It has
been the market leader in the chocolate category for years.
The main objective of Cadbury’s dairy milk is very clear, reach the audience by
showing them their reflection. Showing small happiness and cheerful moments that
we see in our day to day life is cherished by enjoying a bite of
Cadbury’s Dairy milk and by adding an emotional touch to it, & has won the Indian
audience thoroughly.
They are Positioning Diary milk as a successful alternative to the traditional Indian
sweets in unique way in order to cash in the rich tradition of Indian people
associated with desserts, birthday gifting through Facebook, gifting in schools (15th
August & 26th Jan-13) & on birthdays, gifting in offices on birthday’s & gifting with
marriages invitation card & after marriage ceremony.
Cadbury Dairy Milk excels at positioning. Not only can the chocolate bars have
many different positions based on which segment they are in, but also none of the
positions damper the effects of other positions! Youth see with word Cadbury as a
synonym for chocolate, others see it as synonyms for sweet and love and bliss. In
India it positioned itself as “spontaneous, special, carefree, real moments (‘Mazza aa
gaya’) in the initial stage. But later it tried to position itself as brand that is
synonymous with sweet (‘Kuch meetha ho jaye’). The most recent campaign
(‘Shubh Aarambh’) tries to take forward the initial positioning of dairy milk as an
alternative for the traditional sweet and positions itself as something that is as
auspicious as the sweet which is generally offered as ‘bhog’ to gods.
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3. Marquee Brand:
Cadbury Dairy Milk
2014
C adbury Dairy Milk encapsulates an enormous breath of emotions, from shared values such
as family togetherness, to the personal values of individual enjoyment. It stands for
goodness. A moment of pure magic!
All sorts of names were suggested: Highland Milk, Jersey and Dairy Maid. But when a
customer’s daughter suggested Dairy Milk, the name stuck.’ George Cadbury
Dairy Milk was launched in June 1905. It was sold in unwrapped blocks that could be
broken down into penny bars. Gradually it became more and more successful – Cadbury’s
biggest seller by the beginning of the First World War. And by the early 1920s it had taken
over the UK market. And of course, it’s still with us today. Cadbury Dairy Milk has become
a megabrand, available in many different varieties and all over the world.
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Cadbury Chocolate constantly creates or acquires new products to add to their range of
offerings. Major chocolate brands produced by Cadbury include the bars Dairy Milk, Crunchie,
Caramel, Wispa, Boost, Picnic, Flake, Curly Wurly, Chomp, and Fudge; chocolate Buttons; the
boxed chocolate brand Milk Tray; and the twist-wrapped chocolates Heroes.
Cocoa bean, Sugar & Solid milk (milk powder) prices: Domestic as well as
international prices of key raw material – cocoa, Sugar & Milk has significant
impact on margins. Good monsoon ensures adequate availability of raw materials,
which are mainly agricultural in nature.
-Rupee depreciation improves export realizations; however it also makes import of raw
material (esp. cocoa) expensive.
Excise duties: Changes in excise levied on malt and chocolate influences end product prices
and thereby volume growth as well as margins.
Changes in custom duties and foreign exchange fluctuations, as 20% of raw material are
imported.
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3.8 Product life cycle of CDM
T he product life cycle model helps marketers identify the different stages that the sales and
profits of a product go through during the course of its lifetime. There are five stages to
the product life cycle: introduction, growth, maturity, saturation and decline.
1. Introduction: Sales are slow as the product is not yet known. Costs are high due to heavy
marketing spend to create awareness. Emphasis is on advertising and distribution. The
Cadbury Dairy milk launched by Cadbury in 1905 is an example of a brand at the
introduction stage.
2.Growth: This stage shows growing market acceptance and increasing profits.
Competitors begin to enter the marketplace. The business concentrates on optimizing
product availability. The Cadbury Dairy milk is the market leader in chocolate market with
30 % market share example of brand at growth stage.
3. Maturity: The rate of sales growth slows down as the product has been widely distributed
and sold. The company now focuses on creating brand extensions and promotion offers to boost
sales. New product research is critical to ensure future sales. The Cadbury Dairy Milk Silk
chocolate range is an example of creating brand extensions brand at the maturity stage.
4. Decline: Sales slow down dramatically and profits fall off. The product may be dropped
to make way for new products and the cycle recommences. So far CDM has not reached at
this stage because of extension in maturity stage.
40
3.9 BCG Matrix
B oston Consulting Group Matrix based on product life cycle approach to use the charts,
analyst plot a scattered graph to rank the product on the basis of relative market share &
growth rate. The BCG matrix is used in business to under where to invest, harvest
& divest. This matrix also shows the relationship between cash-generating products & cash-
caters.
1. Star
Products in rapidly growing markets in which the company has high relative market
share. Star products generates the high amount cash but are expensive to support.
They are good investment as have high earning potentials both at present & at future
time. That investment is likely to be needed if the company wants to retain its market
positions, as competitors will be trying to emulate stars.
Cadbury India has two star products Cadbury Dairy Milk Chocolates with 30%
market share in chocolate market & Cadbury Bournvita 16.2 % share in malted foods
category (as per Nielsen data for the quarter ending March-13).
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2. Cash Cows
Products in slow growth, or even static, market in which they have relatively high
market share are called as Cash Cows. They require little promotion although under
investment can turn them into dogs so they should not be taken for granted. The
company’s objective is likely to be hold this position in order to obtain maximum
return on investment (ROI).
Cadbury India has two cash cow products Perk & Gums.
3. Dogs
Dogs are in stagnant or slow-growing markets have relatively low market share.
One company’s dog can become another’s cash cow or even a star if they are
operating in different markets or market segments.
4. Question mark
Products in this quadrant are in rapid growing market but hold a relatively
low market share. Cadbury India has two dogs Toblerone & Bourneville.
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3.10 Distribution Network in India
C adbury’s brands are available in over a million outlets across the country. Cadbury is also
focusing intensively on achieving distribution equity. Though it takes much more time
and effort to build, but once built, distribution equity is hard to erode.
With technology and competitive pressure slash in it is becoming increasing difficult for
marketers to retain a unique product differentiation for long period. In a product and price
parity situation, the brand that sells more is the one that reaches the highest number of
customers.
To tap this huge potential Cadbury's distribution channels include the manufacturing
warehouses where the chocolate production takes place. This is followed by wholesaler &
then followed by retailer.
Due to 65 years of presence in India - has deep penetration- 2,500 distributors; 550,000
retailers, 60 mid urban (22%) customers. The modern trade is handled separately.
43
3.11 Cadbury & the Worm
Controversy
The controversy created an deep adverse impact on the company with their sales not only
drastically dipping down, but at the same time allowing the competitors to establish their
foothold and taking maximum advantage of Cadbury’s misfortune.
The controversy, and the adverse publicity received in several countries, set back its plan of
outsourcing model which would have resulted in significant revenue generation, several
The "worms’ controversy" came at the worst time….the next few months were the peak
season of Diwali, Eid & Christmas. Cadbury sells almost 1,000 tonnes of chocolates during
Diwali. In that year, the sales during festival season dropped by 30 per cent. The company
saw its value share melt from 73 per cent in October 2003 to 69.4 per cent in January 2004.
In May, however, it inched up to 71 per cent. CDM sales volumes declined from 68 per cent
in October ’03 to 64 per cent in January 2004
Clearly, the worm controversy took a toll on Cadbury's bottom-line. For the year ended
December 2003, its net profit fell 37 per cent to Rs 45.6 crore (Rs 456 million) as compared
with a 21 per cent increase in the previous year.
However, Cadbury’s reiterated that all through the 55 years of leadership in India that it has
remained synonymous with chocolates and has remained committed to high quality and
consumer satisfaction.
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3.12 Cadbury’s Fight- Back
'Project Vishwas'-“Steps to ensure quality & regain the
confidence”
Following the controversy over infestation in its chocolates, Cadbury India Ltd
unveiled 'Project Vishwas', a plan involving distribution and retail channels to ensure
the quality of its products.
The company's team of quality control managers, along with around 300 sales staff,
checked over 50,000 retail outlets in Maharashtra and replaced all questionable
stocks with immediate effect.
The Vishwas programme was intended to build awareness among retailers on storage
requirements for chocolates, provide assistance in improving storage conditions and
strengthen packaging of the company's range of products.
Cadbury reduced the number of chocolates in its bulk packets to 22 bars from the
present 60 bars. These helped stockists display and sell the products "safely and
hygienically" 190,000 retailers in key states were covered under this awareness
programme.
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The BIG ‘B’ Factor
The big factor that has pushed up CDM sales is the Amitabh Bachchan campaign. It
helped restore consumers' faith in the quality of the product. In early January, Cadbury
appointed Amitabh Bachchan as its brand ambassador for a period of two years.
The company believed that the reputation he has built up over the last three decades
complements their own, which was built over a period of 50 years. Yet, the entire
credit of recovery could not be attributed to the brand mascot.
The packaging was changed to include a sealed plastic wrapper inside the
outside foil. Cadbury’s launched a new 'purity-sealed' packaging for its
flagship product, Cadbury Dairy Milk. The packaging is in response to
foreign bodies, notably worms, being found in its products. Over the next few
weeks Cadbury will work towards introducing either a heat-sealed or a flow-
pack packaging that offers a high level of resistance to infestation from
improper storage.
New advertising & promotion campaigns were in place which accounted for
an Ad spend of nearly Rs 40 crore (Rs 400 million) Cadbury invested nearly
Rs 25 crore (Rs 250 million) this year on new machinery for the improved
packaging.
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3.13 Cadbury Singing Sweetly Again
A ll is well that ends well. And for Cadbury’s India, nothing can be sweeter than Regaining
Back the Consumer Confidence. Thanks to quick action taken to recover the damage
done by the worm controversy like Operation Vishwas, adopting new
packaging & massive advertising with Mr. Amitabh Bachchan as their brand ambassador,
Cadbury’s regained its market share.
Among other things, it changed the wrappers for its Cadbury Dairy Milk brand and
introduced better coolers.
The consultancy firm will also look at the sourcing of direct and indirect materials like
renegotiating with suppliers for longer term contracts and vendor management. Other costs
(indirect expenses) like travel costs and hotels were also being studied.
In other words, Cadbury is trying to reduce the cost per stock keeping unit (SKUs, or
packs).The aim was to improve efficiencies.
47
3.14 Consumer Behavior
Behavioral Factors
Decision: The decision is taken by the children and youngsters. They play an
important role in taking the decision of when to buy the Cadbury dairy milk.
Occasions: For purchasing the Cadbury dairy milk no special occasions are
required. People can easily purchase it on regular basis. Occasionally such as
Diwali, Rakshabandhan, the sales of Dairy Milk increases.
Reassurance
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3.15 Impulsive Chocolate
Buying Behavior and Pricing
I mpulsive behaviour occurs when the consumer is looking for immediate hedonic benefits. It
is commonly associated with urges to smoke, drink, overspend or overeat. 'Impulsive
behaviour' is defined by 'Consumers experiencing an irresistible urge to consume', which
they might even regret later.
To discuss the growth of the market at the higher end of the spectrum in recent years in
chocolate category with this argument. The product offerings on the higher end are of rich
Even though chocolate buying behaviour is impulsive, research suggests that the relative
accessibility of inputs such as costs versus the benefits of impulsiveness influences
impulsive behaviour. Impulsiveness is unaffected by cost highlighting arguments which
explains the ineffectiveness of advertisements discouraging cigarettes, alcohol, etc.
When the benefit of impulsiveness was the pleasure of yielding to temptation, the
advertisements, that 'triggered the desire' or 'highlighted the benefits of giving in to the
temptation' appealed most to the hedonic individuals. However, the prudent personalities
give more value to the cost than the benefits. Thus, the benefits are relatively non-influential
in judgment. Thus, advertisements that justify the cost of impulsiveness can help provoke
impulsiveness in such consumers
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3.16 Consumer Trends
C hocolates are consumed as indulgence and not as snack food, as prevalent in western
countries. Almost 75% chocolates are impulse purchases. Chocolates are bought predominantly
by adults and gifted to children. The wholesaler usually deals in all kinds of FMCG goods,
Foodstuff in addition to the chocolates. The items like chocolates are
placed near the counter. Chocolates are primarily sold through Kirana Stores, Gift stores,
Medical Stores, canteens, Pan-Bidi stores, Bakeries, Sweet Shops, Super market etc.
The range and variety of chocolates available in malls seems to be growing day by
day, which leads to lot of impulse sales for chocolate companies - Chocolates which
use to be unaffordable, is now considered mid-priced.
(Source: AMA)
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3.17 Review of Past
Promotional Programs
The details of all the past & present promotional programs are explained below:
5
1
3.18 Analysis of Communication
Process
“Real Taste of Life”
Through the ad, they wanted to convey the message that there is a child in each one of us
and they wanted to appeal to that child, since children loved eating chocolates. The ad was
meant to create a particular image in the eyes of the customer and successfully communicate
what the product conveyed.
It appealed to the child in every adult and Cadbury Dairy Milk became the perfect
expression of 'spontaneity' and 'shared good feelings' In every adult there is a child let that
child express itself give in to temptation and satisfy his or her desire to sink teeth into a
smooth creamy delicious chocolate This approach appears to be unique to Cadbury.
52
Why they communicated:
They wanted to re-create the image of a child in the eyes of the adults, remind them of
their childhood days and create an image that Cadbury essentially stood for childhood and
stimulate them to buy chocolate so as to make them remember the childhood days.
What was achieved- A change in Consumer mind-set that chocolates were mostly for kids
and young people. Through the campaign, adults realized they could and should enjoy
chocolates as well.
Communication objective:
Through the ad, it was aimed at widening the chocolate consumption among the masses
and making sure the product reached a wider group of people, based on age, sex etc.
The ad reflected the fact that Cadbury could be available and eaten by all groups of people.
In the ad, an elderly lady, middle-aged man, newly married bride, young guy and a child are
all seen enjoying Cadbury, which showed that all people, irrespective of their sex and age
could enjoy it.
The ad was meant to stimulate purchase intentions and enable the reach of Cadbury to
a wider audience.
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“Kuch Meetha Ho Jaaye”
Communication Objective
The ad was meant to portray Cadbury as something which can be had on all celebratory
occasions. It projected chocolates as a substitute to mithai (sweets) and cheered people to
have chocolate on every joyous occasion.
The basic depiction was that the ad showed that chocolate can be showed as being enjoyed
during Diwali and any other celebratory occasions.
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“Pappu Pass Ho Gaya”
Communication Objective:
The ad targeted youngsters and has become part of street language. It has been adopted by
consumers to express joy in a moment of achievement/success. The ad showed association
with little joys of life. The campaign urged people to celebrate every little moment of
happiness in their life with a chocolate.
What was communicated:
The ad was meant to reach out to youngsters and encourage them to buy chocolates.
What was achieved- Enabling Cadbury to be portrayed as a product which can be had by
youngsters to celebrate their successes.
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“Miss Palampur”
Communication Objective:
The ad targeted the rural parts of India. It focused on Adults and values, like Sacred Cow
campaigns aimed at rural India did fare well. Campaigns aimed at rural India did fare well.
The share of Cadbury increased by more than 20% in rural India. The share of Cadbury
increased by more than 20% in rural India. The brand further strengthened its positions with
the core audience. The brand further strengthened its positions with the core audience.
Enabled Cadbury to be shown as a product which can be enjoyed in rural areas too.
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“Shubh Aarambh”
Communication Objective:
The ad was specifically aimed at indicating a shift from the notion of celebrating
happy occasions with chocolate to the happy occasions with chocolate to the concept of
anticipating concept of something good after consuming the chocolate, a substitute for
mithai. The campaign is aimed at consumers across sectors, and is supposed to have a
balanced appeal across all tiers.
The ad was meant for the core group, i.e. consumers in the age group of 15-35 years. The ad
was established to remind consumers about the utility of Cadbury
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3.19 Marketing Strategy
C adbury India Limited is always on the lookout of attractive and growing markets. It
believes in creating high barriers for any new entrant to enter the market. The objective is to
earn attractive and resilient returns on its investment faster and create its monopoly in the
market. We will be using market penetration as the growth strategy where
the business focuses on selling existing products into existing markets. It seeks to maintain
or increase the market share of current products, secure dominance of growth markets,
restructure a mature market by driving out competitors, and, increase usage by existing
customers.
The Mithai market by some estimates is almost Rs 18,000-Rs 20,000 crore in size and a
large part of this market is unorganized. We would like to target that segment.
Hospitality is another segment that is growing at a consistent rate.
Chocolates in the corporate gifting segment is the new trend, with variety of gift-packaging
and customization in branding. Chocolates have become a premium gifting option.
India, with 1,270,272,105 (1.27 billion) people is the second most populous country in the
world, while China is on the top with over 1,360,044,605 (1.36 billion) people. The figures
show that India represents almost 17.31% of the world's population, which means one out of
six people on this planet live in India. Although, the crown of the world's most populous
country is on China's head for decades, India is all set to take the numero uno position by
2030. With the population growth rate at 1.58%, India is predicted to have more than 1.53
billion people by the end of 2030.
More than 50% of India's current population is below the age of 25 and over 65% below the
age of 35. About 72.2% of the population lives in some 638,000 villages and the rest 27.8%
in about 5,480 towns and urban agglomerations.
In this project, I will be targeting the first three groups covering 94.7 % of population.
The detail marketing strategy is given in below for all the age groups.
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Marketing Plan for Age group 0 to 18
T he total population in this age group is 0.483 billion & we believe that the 50% population is
studying in school the numbers comes around 0.241 billion.
Child connectivity & gifting segment also being attempted as a new growth segment
for the company.
We would like to target this age group by gifting the chocolates in schools. We have
traditions of distributing sweets to all school students after Flag hosting on 15th August
(Independence Day) & 26th January (Republic Day). We propose, Cadbury to tie up with
bigger chain of school for distribution of Dairy Milk Chocolate (Institutional Sales) on 15th
Aug & 26th Jan. Chocolates have become a premium gifting option.
The chocolates have health benefits compared to Indian traditional sweets. CDM has more
nutritional value for children's than any other sweet.
The below graph shows the scenario if we are able to get 1 % market share in total
population at the rate of Rs. 20 per unit of this age group then company can increase its
sales by 48 million INR & if we consider the best case of getting 6% market share then
company can increase the market share by 290 million INR.
This target can be achieved by doing the tie-ups with bigger schools like DAV Schools (700
schools across India), so that market share in this segment will be captured at faster rate.
In future this can be extended to gifting chocolates on Birthday’s & Children's day.
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Marketing Plan for Age group 19 to 35
T he total population in this age group is 0.343 billion. This segment can be targeted in many
ways. Research shows that the best way to catch this population on internet (on Facebook).
India has 78 million active users who access Facebook (DNA
News).Most of the people wishes birthday to their friends & family member on
Facebook every day.
It can proposed for Cadbury to tie up with Facebook & launch the online chocolate gifting
programme on Facebook. In the application one week before birthday Facebook will give
the reminder. By using this application one can delight your dear one by choosing the
perfect Chocolate & delivering it on Birthday with one’s birthday message for him or her.
Customers can choose the best Chocolate gift they want to send it across India. Cadbury
will take great care in delivering those Chocolate gifts across India (Through distribution
network). Through these gifts, we deliver the emotions and heartfelt love that we send.
Select the Chocolate, Gift wrapping & Birthday message for your friend & place the order
online. The order will be received in district distributor system; same will be packed &
dispatched by Courier at the delivery address.
The below graph shows the scenario if we are able to get 1 % market share in total
population at the rate of Rs. 55 per unit of this age group then company can increase its
sales by 189 million INR & if we consider the best case of getting 6% market share then
company can increase the market share by 1,132 million INR.
Figure 3.15 CDM Marketing Plan for Age 19-35 years An Analysis of the Marketng Strategies of Cadbury India
60
Marketing Plan for Age group 36 to 60
T he total population in this age group is 0.381 billion. This is majorly working population of
India.
This segment can be targeted in many ways. Chocolates in the corporate gifting segment
(gifting on Birthday at office) is the new trend, with variety of gift-packaging and
customization in branding. Chocolates have become a premium gifting option.
The below graph shows the scenario if Cadbury is able to get 1 % market share in total
population at the rate of Rs. 100 per unit of this age group then company can increase its
sales by 381 million INR & if we consider the best case of getting 6% market share then
company can increase the market share by 2,286 million INR.
The possible ways of approaching all the above strategy are new geographical markets, new
product dimensions or packaging, new distribution channels, and, different pricing policies to
attract different customers or create new market segments.
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3.20 Marketing Mix
Product
C adbury India Limited (CIL) confectionary products include Dairy Milk, 5 Star, Eclairs,
Perk, Halls, Bytes and Gems which are the largest selling brands in their segments.
Cadbury’s Dairy Milk (CDM) is its flagship brand, having a market share of 30% and
average daily sales of 1 million bars. It also introduced ‘Cadbury Celebrations’ range with
an array of newly designed Cadbury Celebration packs for various festivals.
Its closest competitor Nestle, comes second with a market share of 22% and comparatively
less diversified products in chocolates. Its products are Kit-Kat, Munch, Milky-bar, Charge,
Classic, and Polo. Kit-Kat is their premium brand in chocolates. In Nestle, the
diversification and revenues across other segment like snacks, coffee, milk products, infant
food, and beverages is higher.
While Cadbury gets 76% of its revenues from Chocolates and Nestle a much lower
Pricing
T he price charged for a chocolate bar can determine whether a consumer will buy it and
the level of sales achieved can determine whether or not Cadbury will make a profit.
Price is also affected by factors such as the state of the economy, what
competitors are charging, the stage reached in the products life cycle and above all what
price the Indian market will bear. Cadbury products are in the range of Rs10 to Rs 20 and
has also introduced the ‘Cadbury Celebration gifting’ ranges available in “Nut
butterscotch”, “Caramel”, “Almond Magic”, “Cashew Magic” & “Raisin Magic”. The range
is priced between Rs 145 & Rs. 155.
62
The entire Cadbury Celebrations line notched a 25% growth in sales for the fiscal year ending
March 2007. It has many variations: The basic range is priced between Rs 60 and Rs
100. The panned/gift range is Rs 145-155. Cadbury’s Heroes is Rs 50-Rs 100. The Rich Dry
Fruit collection will be in the region of Rs 200-500. The entire line is distributed nationwide
at 175,000 outlets and the panned or gift line is sold at 100,000 outlets across one-million-
plus population towns and cities.
CADBURY NESTLE
PRODUCT PRICE PRODUCT PRICE
Dairy Milk 5, 10, 20, 30 Kit Kat 5, 10, 20
5 Star 5-10 Bar One 5-10
Perk 5-10 Munch 5-10
Celebrations 60-150 Dairy Box 50
Temptations 30 Kit Kat Dark 35
Table 3.3 Price comparison of Cadbury vis-à-vis Nestle
Table 3.4 Price range of Cadbury Dairy Milk and its variants
Source: Self survey
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Promotion
Promotion Strategies:
Use of emotional appeals in advertising
Customer surveys as a means to align the advertisements with evolving sets of
customers.
Packaging as a tool to communicate quality
Till the mid-nineties, Cadbury’s marketing communication campaigns for CDM were
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Place
C adbury India has manufacturing locations at Thane, Pune, Himachal Pradesh, Gwalior and
Bangalore and has Cocoa operations at Cochin. Cadbury's distribution network reaches
out to six lakh outlets each for its confectionery and chocolate brands.
Chocolates need to get retailed at larger and better outlets while all the products below Rs 3
need a different distribution network. Chocolate needs to be distributed directly, unlike other
FMCG products like soaps and detergents, which can be sold through a wholesale network.
90% of chocolate products are sold directly to retailers. Distribution, in the case of
chocolates, is a major deterrent to new entrants as the product has to be kept cool in summer
and also has to be adapted to suit local tropical conditions. Cadbury's distribution network
used to encompasses 2100 distributors and 450,000 retailers.
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3.20 Compartive Objectives Analysis
Advertising Leverage further the Cadbury label, To create focus on nutrition,
Objectives which is what the company has been wellness and fitness and the
doing with aggressive advertising increasing health consciousness
and promotions amongst the urban population
66
CHAPTER FOUR
An Analysis of the Marketng Strategies of Cadbury India
67
4. RESEACRH
METHODOLOGY
A
An Analysis of the Marketng Strategies of Cadbury India
chieving accuracy in any research requires in depth study regarding the subject. As the
prime objective of the project is analyze the marketing strategies of Cadbury, the research
methodology adopted is basically based on primary data via which the most recent and accurate
piece of firsthand information could be collected. Secondary data has been
used to support primary data wherever needed.
Questionnaire Method
Physical
Virtual (Online)
Observation Method
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The main tool used was, the questionnaire method, observation method has been
continuous with the questionnaire method, as one continuously observes the surrounding
environment one works in.
Target geographic area was Kolkata .To the above mentioned geographical area
questionnaire was given. Finally the collected data and information was analyzed
and compiled to arrive at data the conclusion and recommendations given.
Used to obtain information about Cadbury and its competitor history, current issues,
policies, procedures etc, wherever required.
Internet
Magazines
Newspapers
The vast gamut of internet provided access to wide knowledge base, which added to
the content of this project substantially.
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4.2 Sampling Techniques
Data Scrutiny:
The data is analyzed on the basis of suitable tables by using mathematical techniques.
The technique that I have used is bar technique.
Survey design:
An Analysis of the Marketng Strategies of Cadbury India
The study is a cross sectional study because the data were collected at a single point
of time. For the purpose of present study a related sample of population was selected
on the basis of convenience.
A sample of 100 people was taken on the basis of convenience. The actual
consumers were contacted on the basis of random sampling.
Also the indirect competitors of Cadbury – the sweet sellers (Mithaiwalas) were
survey to add quality to the data obtained.
70
Some data was also obtained through online surveys using Google Docs and Forms
Research Period:
Research Instrument:
71
4.3 Data analysis
The data collected through survey was analyzed with help of simple percentages. Tabular
and graphic methods, which included pie charts and bar graphs, were used to analyze data.
Microsoft Excel was extensively used in the preparation of the data in to meaningful
coherent and simple information graphics:
Bar Graphs
Pie Charts
Line curves
Tools of Analysis:
To determine the level of satisfaction for the various categories combined mean is used.
72
4.4 Survey Results
T he survey was carried out by in order to find out the reach and popularity of Cadburys in
India. The chocolate consumers were asked questions like the chocolate brand that they
normally eat, and the features that they look for in a chocolate etc. The chocolate
consumers had ranked Cadburys as the best chocolate brand and a few consider Nestle as a
good chocolate brand. It was also observed that Cadburys is facing strong competition from
foreign brands. This could be due to the fact that the respondents of our survey were mostly
the well to do population from the middle, upper-middle and upper class of people
We had 100 respondents to our survey. Most of the respondents were from the 18-25 and 26-
50 age groups. Most of the respondents spent more than 100 rupees on chocolates in a
month. Almost 70% people rated Dairy Milk the most consumed chocolate closely followed
by 5 star and Perk. Also the reason why Dairy Milk was preferred was because of the taste.
66% people preferred to gift celebrations for many occasions as against 23% who prefer
gifting foreign chocolates.
Thus I understood better the chocolate market in India. Cadbury’s has a very good market
share currently but will have to constantly revamp their strategies in order to compete with
the foreign brands.
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Figure 4.1:
18%
22%
Self Consumption
Gif
29%
31% For Children
Festival
74
Figure 4.2
Pie chart depicting consumer preferences for chocolates
CONSUMER PREFRENCES
Cadbury Nestle Amul Others
9% 1%
18%
72%
Figure 4.3
Word cloud showing most commonly used adjectives people associate with Cadbury
75
Figure 4.4
Area Graph depicting the various occasions of Cadbruy purchase
40
20
9 22 23 31
0 15
Before Express Occasions of Purchase of Cadbury
good work Celebrate
Feelings Gifing
Casual
Figure 4.5
Bar graphs showing age distribution of Cadbury’s consumers
25
20
15
10
0
Below 10 years 10-17 years 18-25 years 25-50 years 50+ years
Series 1
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CHAPTER FIVE
After going extensively through resources, news and other literature, I found the following
reasons as the fundamental pillars for the robust growth and expansion of Cadbury in its
efforts to garner larger share of the market pie
India occupies a high profile position in the global organization, with advocates in
regional and global headquarters. Global management has allowed the local
operation a high degree of flexibility in growing the business, understanding that
asset utilization may be lower and returns slower to arrive, but expecting volume
share to compensate for lower margins in the long run.
The Cadbury India team is all-Indian and has a deep understanding of local market
dynamics. The business is set in a way that highlights localization across all facets –
driving the belief that the only way to succeed in India is by developing localized
business models. For example, the company tailored the chocolate formula in India
to prevent melting in the country’s open-air high frequency store environment.
Royalty Structure:
Royalty to Cadbury Schweppes is around 1 per cent of the turnover. But with that, the
company gets unlimited access to latest technology, new products and so on. They can
also introduce new products from the parent, if it is suitable for Indian market.
Cadbury has reduced its dependence on cocoa, thus lowering its exposure to volatile raw
material prices as well as cutting costs. It appears that they have subtly altered its
78
recipe by using less of costlier cocoa and more of milk and sugar. Cadbury's launch
of Perk has also contributed significantly in reducing the proportion of cocoa in the
overall raw material mix.
Brand Building:
Since its inception, Cadbury in India has stayed ahead thanks to their constant
marketing initiatives, that have at all points in time understood the needs of and
opportunities in a changing nation but Nestle had stood firm in second position
resulting from their responsibilities and providing quality products. Amul an Indian
company has been able to create brand quality and thus selling their product through
their name.
The '60s was a decade which saw the launch of brands that are etched in the hearts of
generations of Indians - Tiffins, Nut Butterscotch, Caramels, Crackle, 5 Star and
Gems. It was a strategy that introduced consumers to a variety of tastes and product
forms leading to a rapid increase in chocolate consumption.
Cadbury's Eclairs was launched in 1972, at the then princely sum of 0.25p and was
an instant hit. It continues to be one of the biggest brands in the Cadbury portfolio
and offers the lowest price point at which consumers can experience the real taste of
chocolate. But as compared to other companies the price are very high because of
lack of competition.
In the years that followed, Cadbury invested in technology and made an impact
In the 90's Cadbury realized both the scope and the need to expand the market.
Hitherto perceived only as a children's product, Cadbury 'universalized' the chocolate
market. The multi-award winning advertising campaign - 'The Real Taste of Life' -
was launched, capturing the childlike spontaneity in every adult.
Moulded chocolate and éclairs also showed satisfactory growth. This has also
helped in improving the infrastructure and distribution reach of the company in
chocolate and confectionery segment.
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Cadbury 5 Star with its “Energizing Bar” campaign targeted the youth, offering them
a mind and body charge. While pre-empting competition, Cadbury Perk - the light
chocolate snack - pushed chocolates into the wider area of snacking by promising
'Thodi Si Pet Pooja Kabhi Bhi Kahin Bhi' (anytime, anywhere) and has introduced
new flavours like ‘Mint Hint’, ‘Mango Tango’, Very Strawberry’. It has also
introduced various new chocolates like Gollum and Fruits in recent years.
Constant diversification:
Faced with rapidly changing markets and increased competition, Cadbury launched
Truffle to hit the high ground of great tasting chocolate. This was followed by Picnic
in 1998, which with its unique, multi-ingredient construct promises to take
chocolates straight into the realm of snacks. With the introduction of Gollum and
Fruits Cadbury has taken the market by surprise.
Commitment of expansion:
With the launch of Trebor Googly, the tangy, fizzy candy, Cadbury took the market
by surprise and marked the entry of Trebor into the fast growing Indian sugar
confectionery market. The extension of Googly to a Mint flavour reinforces
Cadbury's commitment to establish the Trebor name as a strong player in the value
added sugar confectionery market.
Repositioning:
Cadburys has been repositioning its products for children to adults and for
celebrative occasions. A repositioning campaign was arranged for dairy milk that
showed adults doing unconventional things (like a lady breaking into a jig in the
middle of the overflowing Cricket (stadium) driving home the message that adults
could enjoy chocolate as well.
Information technology:
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5.2 CONCLUSION
T he Indian Chocolate Industry is a unique mix with extreme consumption patterns, attitudes,
beliefs, income level and spending. Understanding the consumer demands and
maintaining the quality will be essential. Pricing is the key for Cadbury’s to make
their product reach to every consumer houses. Right pricing will make or break the product
Success. There’s also an immense scope for growth of chocolate industry in India,
geographically as well as in the product offering. So we think that bringing online
sales(through Facebook) & increasing the institutional sales(in unique way) would bring
prosperity and increase the sales of Cadbury’s as a whole again resulting in the goodwill of
the company.
Cadbury has indeed emerged as the Market Leader in the Chocolate industry. And as a
leader embraces the characteristic of group preference over oneself, Cadbury has practically
applied this principle. The marketing strategies of Cadbury has not only increased the share
of Cadbury in the Market pie, but also it has increased the very shape of the pie itself.
Cadbury hit the consumer at the place which is the key aspect of a consumer – his mind.
Rather than employing conventional or short cut sales promotion strategies, Cadbury played
the long run by aiming at the consumer mindset rather than the consumer wallets. And
indeed it paid off.
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5.3 RECOMMENDATIONS
Maintain dominance in chocolate segment.
Medias such as the internet (Facebook, Google+ etc.) and the radio enable large
amount of cheap advertisement. Internet is a good place to sell goods, even
confectionary ones. Provides a new consumer group with access to Cadbury and
allows even larger sales due to a larger overall consumer group. (Business studies)
Many new players are trying to enter Indian market so it should formulate
new strategies so as not to lose market share.
New channels such as gifting, child connectivity and value for money offering to
be the key growth drives.
Grow volume sales at least 20% p.a. over the next years.
One new major product from International portfolio should be launch in India
every year.
FDI will bring in many new products and competitors so Cadbury will have to
maintain their strong market distribution channel so as not to lose market share.
They need to maintain high standards and should be careful that there
product remains sterile. And is not effected by insects.
They should bring many more flavours of Dairy Milk with focus on
Health conscious market segment i.e. low sugar chocolate bars
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APPENDIX
BIBLIOGRAPHY
WEBSITES
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(n.d.). Retrieved from Cadbury India: cadburyindia.com
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QUESTIONNAIRE
1. Name:
2. Age Group: [ ] Below 10 years [ ] 10-17 years
4. Which name comes to your mind, when you hear the word ‘Chocolate’?
[ ] 0-3 [ ] 3-7
[ ] 8-14 [ ] 15+
6. Do you like to consume Cadbury’s product? An Analysis of the Marketng Strategies of Cadbury India
[ ] Yes [ ] No
7. If ‘Yes’, to question no.3, then which product of Cadbury do you like the most?
9. Name the Cadbury’s product which comes to your mind for purchase on the
following occasions:
v. Casual consumption
10. On a scale of 1 to 5, 1 being not important and 5 being very important, when
purchasing chocolate, how important are following factors to you?
1 2 3 4 5
Price
Taste
Packaging
Availability
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Brand Ambassador
[ ] Yes [ ] No [ ] Maybe
13. Do you believe that now people have become more health conscious that the
need for chocolate has declined?
[ ] Yes [ ] No [ ] Maybe
14. Do you think sugar free Cadbury chocolates should be introduced to attract
health conscious people?
[ ] Yes [ ] No [ ] Maybe
15. Do feel uncertain about the quality and hygiene of the products of Cadbury?
[ ] Yes [ ] No [ ] At times
16. If not Cadbury, then which company’s chocolate will you prefer?
17. What do you think is the difference among Cadbury and its competitors An Analysis of the Marketng Strategies of Cadbury India
[ ] Others ___________
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