Situation Analysis

Industry Trends
Standard chocolate continued to characterize chocolate confectionery in 2019.
Demand for premium chocolate remained negligible and availability was limited to
modern retailers.

Sales of chocolates are high during the winter season, especially from November to
February, as the cold climate ensures that the products remain fit for consumption,
whereas in summer products cannot survive the heat and melt without cold storage
facilities. Hence, manufacturers play a key role in driving sales as they provide a
cold storage infrastructure, such as in-store refrigerators, to retailers, which help
them to stock, display and sell their products.

Heavy investments in promotional campaigns and distribution operations by local

manufacturers are positively influencing sales of chocolates, which are available at an
affordable price point.

Industry Consumption
Around 13.4 Billion PKR sales of confectionaries are made every year, out of
which approximately 57% are of chocolates.
Mondelez Pakistan continued to lead chocolate confectionery in 2019. The
company’s best-selling Cadbury Dairy Milk brand is the oldest locally-produced
milk chocolate in the country and continues to enjoy first-mover advantage whilst
enjoying massive consumer loyalty due to consistent marketing support, wide
distribution and its high product quality.
Ismail Industries has a wide product portfolio with a range of brands in chocolate
confectionery. The company is the leading domestic manufacturer of chocolate
products and enjoys massive consumer support due its immense brand equity.
 Market Share

11%

25%
Cadbury
64% Ismail Industry
Others

Figure 1: Market share of chocolate companies in Pakistan

Premium brands remain small with very low market share as cheaper
alternatives are present in the market. Consumers are highly price sensitive
and cheaper alternatives are readily available from smaller players.
Market Growth Rate
The market for chocolates is increasing by an average of 0.25% each year.
The market for chocolate has been observed to increase from 6% to 7.5% in
the year 2012-2018.
Since Cadbury provides mediocre to low priced products to it customers, it is
penetrating in the rural market of Pakistan by targeting low income earners
who want to taste something sweet. Same strategy is being used by Ismail
Industries, having famous products such as Now, Sonnet, Paradise, etc.

SWOT Analysis
Like every company, Cadbury has its own strengths and weaknesses in its
internal environment while opportunities and threats await it in the broader
external environment.
First, we’ll discuss its strengths and weaknesses and later on we’ll discuss the
opportunities and threats.
Strengths
 This food brand has high brand equity and it is top of the chocolate
brands across the world.
 The strong brand name makes it popular and it gains the loyalty of the
customers.
 It is also the strong and amazing parent brand for the Kraft foods,
which attract the attention of the kids and families.
 The brand has huge number of employees, which is up to 71,000.
 It has maintained very successful marketing and advertising campaigns
across the world.
 It offers wide variety of products to its clients.
 It has strong and effective R&D department and innovation have been
made in its products.
 Cadbury is well-known and premium quality brand, which is known
for the quality of its food products.
 Cadbury has maintained its strong and efficient distribution network
and it carried out the operations in the countries like UK, US,
Australia, Pakistan and various other countries, a total of 160.
 Cadbury introduced its amazing and popular brand, ‘Dairy Milk’,
which is widely sold in the market.

Cadbury has many strong brands in its product portfolio such as dairy
milk, Bournvita, Oreo, five star and others. The product are high quality
products and some of them are cash cows for Cadbury.
Cadbury products are blessed with a fantastic brand loyalty. Due to its
marketing and strong branding over the years, the brand equity of Cadbury
is also high and hence Cadbury is comfortable charging a premium for its
product because of the high brand equity. Finally, some brand names within
the Cadbury family are known worldwide and are desired by many. The
smartest tactic that Cadbury has done over the years with products like dairy
milk and celebrations is that these chocolates are positioned for gifting. In
fact, the recent Bourneville, has a complete focus on the gifting position.
Due to this smart strategy Cadbury has safely differentiated itself from
majority of its competitors.
Weaknesses
As mentioned previously, a brand like Cadbury is expected to have many
strengths and few weaknesses, and the same is the case. Cadbury’s weakness
is its rural distribution considering Pakistan has such a wide rural spread
which can be covered.
At the same time, A few cases here and there have happened based on the
quality of the product where cockroaches or other rodents were found in the
chocolate. It is inexcusable for a brand like Cadbury to show such ignorance
because such infected chocolates should not leave quality control at all.
Thus, quality control needs to be strengthened.
Opportunities
What is a weakness can become an opportunity. Penetrating rural markets
and distribution in rural markets can be a large opportunity for Cadbury. It
is present in foreign countries and a rural presence is much needed for
Cadbury which will boost the brands presence and turnover.
Pakistani consumers have a sweet tooth and they frequently like to eat small
chocolates as well as chocolate bars. On top of it, there are various flavors
which consumers like. Thus, new tastes and new flavors are an opportunity
which Cadbury can generate regularly.
Threats
 People have become much conscious about health due to increasing
side effects of chocolate. They are therefore consuming fewer
chocolates so it becomes threat for them.
 The rate of the raw material is consistently increasing.
 Due to inflation, the sale of the products is reduced.
 Various other competitors are present in market and they are great
threat for this food brand.
With an increase in fuel cost as well as cost of transportation, distribution
cost has gone up. At the same time, the cost of procurement and
manufacturing is high as well. Thus, over the years, the constant increase in
costing and thereby pricing of the product is a threat to Cadbury as it creates
a gap for other companies to enter.

Competitors
As aforementioned, Cadbury’s biggest competitor in Pakistan is probably
Companies of Ismail Industries. On the other hand, Nestle, Hershey’s and
Lindt might be very big competitors of Cadbury in rest of the world, but in
Pakistan they are pretty insignificant, a very niche group of people buy their
products as they are very expensive. For example, a dairy milk costs around
10Rs-500Rs in general (depending on the bar size), whereas, a normal bar of
Lindt costs around 1000Rs.

Marketing Mix for Cadbury

Product
Quality and Varients
Dairy milk is known for its consistency in taste and also the plethora of
falvours it has to offer. This has been the most appreciable thing about dairy
milk has a brand that it has never compromised on taste and uality which is
reflected throughout its history of almost 200 years. The quality of product
can be observed form its market share and from the fact that cadbury was
the offical confectioner of the British crown in the 19th century. The company
and brand has grown a lot and is presently not only praised for its taste but
also the vast range of chocolates it has to offer. Though the actual taste of
chocolate remains consitent but each varient of Dairy Milk has its own
constitiuents offering a wide range of flavours to its customers. Some of
these varients are illustrated as below
Dairy milk’s various product items are divided according to their flavors and
are evenly marketed, however some variants receive special recognition
when comes to their marketing. Three of these variants specifically are Dairy
Milk Silk, Bubbly and Marvellous Creations. The reason Silk Bubbly and
Marvellous Creations have a separate marketing approach is due to the fact
that their texture varies from other forms of dairy milk, Silk is especially
considered as a premium variant of Dairy milk.
Dairy Milk Silk
Dairy Milk Silk receives special recognition because of its unique selling
proposition (usp) of having a silky texture unlike any other chocoloate as
also portrayed in its advertisement campaign. Also Dairy Milk Silk uses
subliminal messaging in its advertising, it is usually advertised promoting
feelings of love and affection for one another and is positioned being a
perfect gift for a loved one as illustrated:
Dairy Milk Bubbly
Dairy Milk Bubbly is another unique type of chocolate bar launched in
August 2012 and has become a signature chocolate of Dairy Milk as it has a
distinct appearance and texture from any of its competitors.

This new aerated offering comes in a unique soft mold, which melts in your
mouth, and appears as chocolate bubbles. Bubbly offers a smoother, lighter
and creamier taste than the regular chocolate bar.
Dairy Milk Marvellous Creations
Launched in 2015, Marvellous Creations broke the mold with its uniquely
shaped blocks and out-of-the-ordinary ingredients. This became an ideal
family sharing treat. The ingredients that make this chocolate bar unique is
the addition of popping jelly with the chocolate bar giving a blend of candy
and chocolate.

Branding
Branding refers to any name, sign or symbol used to distinguish a certain
product from other similar products offered by other vendors, but usually
product gains the status of a brand when it also gains considerable
recognition.
Dairy Milk chocolates were branded in 1904 when George Cadbury Jr. was
given a challenge to develop a chocolate bar with more milk than other
chocolates. Cadbury initially produced cocoa and made chocolates with the
left over batter, however this challenge Cadbury started manufacturing
chocolate bars and interestingly named their chocolate bars ‘Dairy Milk’
upon the suggestion of a customer’s daughter.
The logo of Dairy Milk which is characterized by ‘one and a half glass of
milk’ is the symbolic representation of their key ingredient (milk). The
phrase was originally used to explain the amount of milk in every half-pound
chocolate bar.
Tagline
Dairy Milk’s tagline has changed over the times and even varies according to
the geographic region it is sold in. Some of the taglines used by Dairy Milk
are listed as following
 Pure Happiness Pure Cadyburyness
  A glass and a half full of joy
 Tastes Like This Feels
 There’s a glass and half in everyone
 Kush Meetha Ho Jaye
The most notable of these taglines used is the most recent and current
tagline of Dairy Milk ‘Kuch Meetha Ho Jaye’ as it has been especially used by
Cadbury Pakistan to target the market of this region. The reason behind this
tagline is to target the youth as it is highlighted by the fact that youngsters
usually are not a fan of the traditional mithai (or this is what is perceived by
Cadbury) and so Cadbury have tried to substitute mithai with Dairy Milk as
a perfect replacement to celebrate every happy moment with the touch of
sweetness.

Packaging
Cadbury began making milk chocolate bars in the late 1890s, packing them
in decorated boxes for sale. It was initially sold in large unwrapped blocks
that could be broken down into penny bars. As demand for easier-to-handle
candy grew, a continental-style parcel wrap consisting of a pale mauve
background with red script became its go-to packaging design. Dairy Milk
moved to using a purple and gold wrapper, the same style that would stick
with the brand permanently. With changing times Dairy Milk from just a
paper wrapper in the 20s, to a layer of silver foil in the 30s, eventually
progressing through the 60s and 70s to a layer of eye-catching gold foil.
Dairy Milk bars changed to a full-color plastic wrapper in 2009 to ensure
freshness, the first radical change in its packaging style in decades.
Regarding this change in packaging, Matthew Williams, Cadbury marketing
director at Mondelez International commented that, the move was born out
of a need to make the chocolate’s packaging less “traditional”.
He added: “We noticed during our research that customers felt there was a
disconnection between the fun and inclusive brand they were seeing on TV
and what they were seeing on packs. The last redesign we did was in 2008
and what we’ve tried to do now is arrive at a design that better expressed our
brand personality of being generous but is also more own able for us.”
 In 2013 it introduced an innovative style of packaging by allowing customers
to customize their own packaging.

One interesting aspect of the packaging is the signature purple color of Dairy
Milk which ironically was selected because it was the favorite of the
Monarch of England at that time, Queen Victoria. There was a recent legal
issue on Cadbury’s use of this purple color Pantone 2685C, as it was claimed
by Nestle to be the trademark of their chocolate, however even after these
issues Cadbury still uses this color.

Price
Dairy Milk have used a number of pricing techniques with respect to their
products. The three types of pricing techniques usually observed in case of
dairy milk are discussed below:
Economy Pricing: Cadbury dairy milk is offered in different sizes and is
priced accordingly just so as to cater to different customer segments.
Economy pricing offers low price to customers, such pricing is used to target
mass customers and dairy milk does so with its chocolates ranges from PKR
10 to more than 500 depend on the size of the bar and the variant.
Premium Pricing: Premium pricing is also used by Cadbury in case of Dairy
Milk Silk as it is kind of the magnum opus of the brand and hence is
premium priced with its standard size bar priced around PKR 500.
Bundle Pricing: Bundle pricing is a pricing tactic used to offer a bundle of
products at a collective price lower than the aggregate of individual prices of
products. Cadbury uses this techniques usually around festive occasions and
is more common is other countries other than Pakistan.
A basic idea of the price list of Dairy Milk products can be seen through the
following demonstration, however it does not include all the products on
offer:

Promotion
Dairy Milk is promoted in a number of ways through print and digital media.
It uses mass marketing and targets customers of all ages and genders. Dairy
Milk uses both ATL and BTL activities for its promotion.
ATL Marketing
ATL activities includes print ads and television ads (mostly used). Also with
the increase in internet usage and especially social media sites Dairy Milk
also has adopted this marketing trend and uses social media platforms to
post their ads along with other promotional material.
BTL Marketing
In addition to the traditional ATL activities Dairy Milk has also used BTL
approach for a more specific targeting to build their PR (public relations).
One such example is the marketing activity used by Dairy Milk at the launch
of their Marvellous Creations chocolate bar.
Another aspect of Dairy Milk’s promotional strategy is to target festive
occasions such Eid and other celebrations such as Valentine day. Both these
occasion have been a main focus of the brand and are highlighted through
specially made packaging for these events. Dairy Milk have recently added
social marketing to its strategies and demonstrated this form of marketing
by providing its customers the choice to donate their eidi through their
network for charity purposes.

All these various strategies show the brand awareness of Cadbury to adopt to
various marketing trends and increasing their arsenal of marketing
strategies.

Placement
Placement refers to the company’s approach in distributing their product
and making it available and accessible for their customers. For this purpose
there are two broad categories of distribution that is through intermediaries
or disintermediation (without intermediaries). Cadbury uses a detailed
network of intermediaries which starts with the transfers of product from
the company to carrying and forwarding agent (C & F agent) which stores the
product in warehouses. These products are then transferred to distributors
which further sell it to retailers and then finally to end customers.
Though the distribution channel seems long but Cadbury ensures that its
product is widely distributed and easily accessible to its customers as it is
apparent by its availability in vast geographical areas and in more than 200
countries worldwide.

3 product levels for Cadbury Dairy milk

A product is anything that can be offered to consumers to satisfy a
requirement. When there is no requirement, the purpose of the business is
to create a requirement.
Cadbury Dairy milk is one such product.
Every product has 3 levels according to which the customers attach value to
it. In simple terms the three levels are the need, the want and the demand.
To explain it further, need is fulfilling by the core product, want is fulfilled
by the actual product and demand is created and then fulfilled by the
augmented product. These three types of product levels are known to all
marketers and they always strive to give this complete package to their
customers to completely satisfy their needs and wants. A basic idea of these
three levels has been illustrated by Philip Kotler in the following diagram:
Daily Milk Core Benefit:
The core benefit of any product is the intangible value that the customers
attach to it.
Dairymilk satisfy customers’ sweet tooth, hunger pangs and the craving for
chocolate. In addition, it is best suited for happy occasions like birthdays and
weddings to replace the traditional “meetha” with chocolate in a fashionable
way.
Dairymilk Actual Product:
The actual product is the tangible product that the customers can touch, see,
hear, taste or smell.
In order to deliver the core benefit to the customers, Cadbury came up with
the actual product of Daily Milk. The actual product is the chocolate itself.
It’s a milk chocolate with a distinct taste and design with pieces cut into
wedges that could be broken with ease.
Product detail:

1. Brand name : Dairy milk

2. Plain Features: milk chocolate
3. Quality : medium to good
4. Design : chocolate bar cut into wedges
5. Packaging : purple wrapping showing brand name and ingredients
at the back
Dairy Milk Augmented product:
Augmented product is taking the same tangible product to the next level in a
way that it appears different and better than the previous product.
The chocolate market is saturated with so many other competitors offering
different variations of chocolates. As dairy milk reached its product
maturity, Cadbury had to do something to retain its market share that was
being claimed by competitors such as Mars and Snickers.
Cadbury decided to take its actual product to the next level by introducing
Dairy Milk Silk as an augmented product, with a silky, smooth, rich
chocolaty taste offering it in different flavors such as fruits and nuts, roasted
almond and orange peel.
The augmented product was successfully launched and perceived in the
minds of the customers as a high-end product very different than the regular
Dairy Milk and is now being sold as a premium price compared to the
original Dairy milk.

Customer relationship management (CRM)

Concept of CRM
CRM is business strategy that applies to every organization .it means
working with customers such that they receive great service and are
motivated to return again and again to do more business with the company.
Why choose this?

 Its has good name in Fmcg sector.

  Company started in early 1900s and is still a good revenue generating
company.
 Its gives message to live life with happiness.
 Very close to customers.
Importance of crm in any company
 To understand the need of customers.
 Stand in market for long term.
 Touch the customers through technology
 Deliver a strategy for implementation in market.
Analytical CRM of Cadbury
 Cadbury only focus on customer satisfaction.
 Every time through its ad and from its products ,touch the customer
emotion
Strategy
 To produce a product that won’t hurt any customer
 For example: Maggi has been banned in India since its ingredients
were injurious to health.
 Every time tries to launch a good product and motivate the customer
to buy or taste its product through advertisement.
 To make a brand ambassador so that people can believe and trust the
brand name.