Brand Management Project on Cadbury Dairy Milk

In partial fulfilment of requirement of the course

Brand Management

Submitted to Prof. Charanpreet Singh & Prof. Govindrajan

On
13/08/2018

By:
Group-9
Charan Tej | Mukul | Prateek | Shaurya| Vidushi
188074 | 188152 | 188181 | 188222 | 188279
Table of Contents

Global Chocolate Industry Overview..................................................................................... 3

Cadbury: Company Overview ................................................................................................ 3

Brand Asset Valuator ............................................................................................................. 4

Questionnaire ........................................................................................................................... 9

Brand Equity .......................................................................................................................... 11

Brand Valuation ..................................................................................................................... 16

Laddering................................................................................................................................ 18

Insights .................................................................................................................................... 19
Global Chocolate Industry Overview
The worldwide market for chocolate is anticipated to grow by more than USD 37 billion in
2019-2023. This study offers product-by-product market assessment (dairy chocolate, dark
chocolate and white chocolate) and geography assessment (Americas, APAC, and EMEA).
The study also analyses the competitive environment of the market and provides data on a few
businesses including Chocoladefabriken Lindt & Sprüngli, Ferrero, Mars, Mondelēz
International, Nestlé, and The Hershey Company.

Cadbury: Company Overview

After Mars and Ferrero, Cadbury is the third largest chocolate brand entirely owned by
Mondelez International. Headquartered in London, it operates globally in over 45 nations. It is
renowned for its product, chocolate Dairy Milk and many other chocolate items.
John Cadbury, who sold coffee, tea and chocolate, began Cadbury in England in 1824. The
firm subsequently moves to create a range of drinking chocolate and cocoa generated in Bridge
Street and sold to high-end consumers owing to high manufacturing costs. In 1947, after John
Cadbury became a partner with his brother Benjamin, the firm was known as' Cadbury
Brothers.'
Major brands include Cadbury Dairy Milk, 5 Star, Cadbury Eclairs, Cadbury, Cadbury Creme
Egg, Cadbury Roses, Marabou, Lacta and Toblerone. Reported revenue of US$8,177 million
in FY2018, which grew 1.8% YoY, and recorded a negative growth of 3.5% during 2014-18.
The segment accounted for 31.5% of the company's revenue in FY2018.

Brand Asset Valuator Model

It is a model which is used to asses a brand’s value on different parameters which covers all
the relevant information. There are four dimensions across which we determine the value of
the brand. These four pillars are:
1. Brand Differentiation
2. Brand Relevance
3. Brand Esteem
4. Brand Knowledge

Methodology
We have prepared a survey with few questions, which was floated and received 93 responses
mostly among the age group of 20-25 years. This survey was used to assess the brand on these
four parameters by linking the questions to these parameters and analysing the answers. We
have given 100% weightage to this questionnaire for BAV model. The method used to analyse
the answers is weighted average that is if the weightage of each question is 50% and 50
respondents correctly answered that question 1 and 40 respondents correctly answered question
2, the result would be the summation of 0.5 multiplied by 50 and 0.5 multiplied by 40 which
equals to 45.

Differentiation
This is seen as first point of measure for any brand. This measure determines how your brand
is seen differently from others and even if it is seen differently or it is in the commoditized
market with zero differentiation. The more it can be differentiated, the better it is for brand.
The following question was used to determine the brand differentiation and this question was
given 100% weightage for brand differentiation. We asked respondents to match the tagline to
the brands and gave one false tag line as well. Out of 93 respondents 88 guessed it correctly
for Kit-Kat, 84 guessed it correctly for Dairy Milk and 77 guessed it correctly for snickers.
There was a large percentage of people who guessed all the taglines correctly, so we can say
that brands are differentiated and the score for dairy milk for differentiation will be 84 out of
93 which is 90.3%.
Relevance
Relevance is a parameter that measures the breadth of the brand appeal to the customers. It tells
us how relevant customers feel about our brand and if they do so, is it convenient, fulfilling to
their needs throughout.
We have selected three questions to measure this parameter. The three questions cover repeat
purchasing which is given 20% weightage, attributes such as price which is given 40%
weightage and as soon as they hear chocolate which brand comes to their mind first, which is
given 40% weightage. Out of 93 respondents 88 bought Dairy milk and out of these 88, 53
would buy it again which shows our brand is relevant to 53 people out of 93. 47 respondents
think about Cadbury dairy Milk first as soon as they hear chocolate and 40 respondents feel
that the price is neutral. This makes our score 45.4 out of 93 which is 48.89%.
Esteem
Esteem tells us about the perceived quality that the customer has of the brand and what impact
will it create in future.
The following two questions were asked to measure the parameter of brand esteem, each of
these questions is given 50% weightage. Their wish to buy the Cadbury Dairy milk in future
and the recommendation to others will give us idea about how much willing are they to do
word of mouth. Out of 93 respondents, 67 feel they will purchase Dairy milk again in future
and 39 plus 33 that is 72 feels that they would surely recommend it to others. This gives us our
Brand esteem score of 69.5 out of 93 which is 74.75 %.
Knowledge
Knowledge is something that will measure the extent to which the consumer knows the brand.
The following two questions were asked to assess brand knowledge parameter; awareness is
given 25% weightage and matching the tagline is given 75% weightage. Out of 93 respondents
84 feel that they know the brand by heart and 84 respondents guessed the tagline of Dairy milk
correctly. This gives us our Brand knowledge score of 84 out of 93 which is 90.3%.
Analysis of Cadbury Dairy Milk
• Brand differentiation is greater than Brand Relevance for Cadbury which is very good
as this shows that customers want to know more about brand and there is space for
growth.
• Brand knowledge is higher than Brand esteem means that customers think that they
already know about the brand which gives the brand less space to tell or educate about
their brand to the customers which can sometimes create a problem.
 PERCENTAGE
Percentage

BRAND KNOWLEDGE 90.30%

BRAND ESTEEM 74.75%

BRAND RELEVANCE 48.90%

BRAND DIFFERENTIATION 90.30%

Questionnaire
Brand Equity
Brand equity is one of the metrics of brand valuation. It is the sub component of it. Brand
equity refers to the “ mental association” of the consumers with respect to the brand. It is the
mental map in the minds of the consumers in terms of Thoughts, feelings, perceptions, images,
beliefs and attitudes.
In order to measure these attributes, it is essential for us to understand what and how the
consumers think, feel and know about our brand.

Awareness

Image loyalty

Brand
Perceived
Equity
Preference
Quality

brand
association

Awareness: The first foremost metric that is used in assessing the brand equity is “Awareness”
the awareness can be further split into three sub categories as mentioned below.

Top of
mind
Unaided
Awareness
awareness
Aided
Awareness
In the survey we conducted, we have assessed these parameters by asking question to the
participants to name the brand when it comes to chocolate. More than 48% of 88 responses
recalled Cadbury as a brand without any aid. Which means Cadbury is in the top of mind in
majority of the consumers. Which means that the consumers are not only aware of the brand
but also have Cadbury as brand in the minds. This also means that the most important factor of

brand equity is also fulfilled. The Next big brand which is on TOM is Nestle (which also
includes its products) with around 10%. There is a very good brand awareness and also the
brand is in top of mind.

Loyalty: This is one more metric where the brand equity is measured. We have asked the
consumers whether they have tried Cadbury chocolate or not for which 95% of them have
tired Cadbury dairy milk chocolate. Of which, 80% of the consumers are repeat purchasers

which indicates that there is brand loyalty existing in the consumers. There is great customer
loyalty to the brand.
Preference: There exists many competitors in the market. Brand equity is also defined on what
the consumers are preferring over other brands when it comes to our product category. This is
also captured through our survey where the top competing brands are given. 82% of the
consumers prefer Cadbury dairy milk over others. The next competitor is kitkat by nestle.
However, the preference for Dairy milk.

Brand Association: The Cadbury wanted to communicate that Cadbury is brand of celebration
and cherishing memories with sweetness. The tag line “ kuch meeta ho jaayen”. In the survey
above almost all the participants in the survey associated with the communication that Cadbury
wants.
Perceived quality: The perception of overall quality of the product in the mind of the
consumers. 42% of the participants recommends the product to others that they are satisfied
with the over all product attributes. The perceived quality is on the higher side when it comes
to Cadbury dairy milk as a brand.
Brand image: This is the extension of perceived quality of the brand. Brand image tells us on
how a consumer is perceiving the brand when he thinks about it. It maybe but not necessarily
restricted to quality of the brand. It can also be the value or respect or the ranking of the brand
in the mind of the consumer.

Keller’ Brand Equity Model: This is also known as Brand equity pyramid. Brand equity
pyramid tells where the brand stands in the minds of the consumers. A good brand equity
indicates that the consumers likes the brand much and the brand can assume that the consumers
stays with them in the era of competition. Picture below describes the typical framework model

to assess the brand equity.

Let’s try and understand the implications of the brand Cadbury dairy milk from the consumers
perspective and analyse the information that is described in the previous section.
Brand Identity/ Salience: It is high brand awareness. The product category is impulsive
purchased. However, if the product is available when the consumer people buy it.
Performance: Our product is perceived of good quality, The brand is perceived reliable and
Affordable
Imagery: People perceived to have Fun experience and a “Feel good" brand
Judgement: People judge Good reputation, Superior quality, Value for money, Attractive
packaging
Feelings: Consumers relate Cadbury to Happiness, Family orientation, Excitement and
Warmth
Resonance: Loyal customer base, Customer connection toward brand are the resonance
features of Cadbury dairy milk.

Salience Performance Imagery Judgement Feelings Resonance

• Impulse • Good •Fun • Good • Hapiness • Loyal

purchase vs. quality experience reputation • Family customer
take home • Reliable • "Feel good" • Superior orientation base
• High brand brand quality • Excitement • Customer
Awareness • Affordable • Value for • Warmth connection
• High money toward
Recognition • Attractive brand
packaging
Brand Valuation
In the financial statement of Mondelez International as per the Sec Filings, revenue through
Cadbury’s division is not mentioned. Hence following steps are taken in calculation of Brand
Value and the related assumption are specified as and when required.

Step 1
The revenue of Mondelez International from Chocolate category is USD 8.17 Billion, which
is 31.52% of the total revenue of Mondelez International in the year 2018.

Source: Mondelez International Annual Report, 2018

Step 2
As per the 2016 statistics, Cadbury chocolate generated more than USD 3 Billion in revenues.

Source: Mondelez International Cadbury Fact Sheet, 2017

In 2016, the total revenues from chocolate category were reported to be USD 7.74 Billion
Source: Mondelez International Annual Report, 2016
Hence the chocolate revenue from Cadbury (USD 3 Billion) comprise of 38.76% of the total
chocolate revenue (USD 7.74 Billion) of Mondelez International in the year 2016.

Step 3
Assuming that the share of revenue in chocolate category of Mondelez International from
Cadbury remains at 38.76% in the year 2018 as well, the revenue of Cadbury Chocolate in the
year 2018 should be USD 3.17 Billion.

Step 4
In India, Dairy Milk accounts for 63% of the revenues of Cadbury chocolate. As mentioned in
the article, it is the highest share in the world, hence we can assume that Dairy Milk comprise
of 50% of the total sales of Cadbury chocolate in the global market. Hence the global revenue
of Dairy Milk should be USD 1.585 Billion (50% of USD 3.17 Billion).

Source: Bloomberg Quint

Step 5
The approximate profit margins should be around 13% for Cadbury Dairy Milk. This is
assumed on the basis of
(i) Cadbury had profit margin of 12% in the year 2008. The data is taken from the
annual report of Cadbury in 2009 as it was a listed company in 2009
(ii) Mondelez International had a profit margin of 14.57% in the financial year 2018
(iii) Average Profit Margin in chocolate industry is around 11% to 14% as found out
through secondary research
Hence the profit on Cadbury Dairy Milk should approximately be USD 206 Million

Step 6
Mondelez International had an average P/E ratio of around 25 for the last one year. Also,
Cadbury was acquired by Kraft’s food in the year 2010 and was valued at Euro 11.5 Billion
when the profit was Euro 398 Million giving a P/E ratio of 28.89. It is safe to assume that the
current P/E ratio for Cadbury Dairy Milk would be around 30 and hence the value of Cadbury
Dairy Milk comes out to be USD 6.18 Billion.

Laddering
Laddering a basically a technique that is commonly used for studying the relationship between
the product and the consumers. It lays out the knowledge the customer has about the product
in order to measure the perceived quality of the product. It basically involves a one to one
interview with the customers and tries to find out how customers link the product to themselves.
The main question where the technique is focused is “why is this relevant to you” or “how can
you relate to this”

Steps that were involved in the laddering process:

Step 1: They were asked about whether they consume chocolate. If yes, how often do they
consume the chocolate, is there any specific place where they go to buy chocolate?
Step 2: Respondents were asked about the various chocolate brands they are aware of. By the
order in which they name the brands, we can know about the top of mind chocolate brands for
them.
Step 3: Then they were asked about the brands they eat most often, this question combined
with the step 2 gave us insights about whether the brand which they are aware of the most is
the brand they consume the most of not.
Step 4: They were asked about when they consumed which chocolate, do they stick to one
chocolate or frequently change the chocolate
Step 5: This process was repeated until value was obtained and respondents could not be
probed any further
Insights
1. All the respondents consumed chocolate, the frequency of consumption may vary
though.
2. There is no favourite place to buy regular chocolate, they are willing to buy it from
anywhere. So the presence of dairy milk in both traditional and modern retail is a
positive.
3. Dairy Milk was the top of mind brand for many, however some people know dairy milk
as “Cadbury”, which shows that there is a low scope of dairy milk to diversify in other
categories and the other chocolates from Cadbury like five star are not as popular.
4. The chocolate respondents buy, depends a lot on the occasion. They prefer the regular
dairy milk for day to day consumption or satisfaction of random chocolate cravings but
high end chocolates such as Bourneville and Ferrero Rocher were commonly purchased
for gifting purpose or for important occasions. (A few loyalists stuck to dairy milk by
buying Dairy milk silk at those occasions)
5. For consumption with friends, Kit Kat was more preferred brand as the design of the
chocolate is made for sharing whereas dairy milk is preferred for individual
consumption.
6. There is not much decision making involved for many people and the product is
purchased only on impulse.