Cadbury Dairy Milk Chocolate

An
Individual Report
On

Performance Analysis of
Cadbury Dairy Milk Chocolate

“In partial fulfillment for the Requirement of the subject of

Business communication-II”

Submitted To:
Mrs. Kavita Trivedi, faculty
S.K. collage of business management, H.N.G.U. Patan

Submitted By:
Dave Nishant
B.com SEM-4
Roll no: - 8
Academy year: 2020-21

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Preface

This report has been prepared as a part of the assignment of the

‘Business communication-ii’ subject of B.com SEM-4. I selected the topic
of the performance analysis of Cadbury Dairy Milk Chocolate. All the
parameters and factors affecting the Cadbury Dairy Milk Chocolate are
discussed in this report. This report expresses various factors affecting
the Cadbury Dairy Milk Chocolate.

Date: 02-03-2020
Place: Patan
Dave Nishant

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 Cadbury Dairy Milk Chocolate

Acknowledgement

I am obliged to our worthy teacher, Mrs. Kavita Trivedi, faculty, S.K.

collage of business management, H.N.G.U. Patan for inspiring us to
prepare performance analysis of Cadbury Dairy Milk Chocolate.

Date: 02-03-2020
Place: Patan
Dave Nishant

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Executive summery
Market

- The global chocolate market is estimated to be around $106 billion.

(Retail Market Value).

- 100 tons – of chocolate are consumed every second.

- Currently, the Indian chocolate market is worth around Rs 5,562 crore.

- India chocolate industry will be growing at the CAGR 23% by volume between
the years 2013-2018 and reach at 3,41,609 Tons.

Driver & Challenges

Drivers Challenges

- Increase in disposable income - Rise in Cocoa prices

- Attractive pricing - Lack of government initiative

- Rising income levels - High entry barriers

Trends

- Experts feel that premium chocolates are replacing traditional Indian “mithai” and
thus they are no longer a category just for a category just for kids.

Segments

- Moulded Chocolate Segment - Count line Segment

- Choco-Panned Segment - Sugar-Panned Segment

Competition

Cadbury India Ltd (67%) Nestle (21%)

Ferrero Rocher (6%) Amul (3%)

Others (3%)
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INDEX

1 Global Market Summary

2 Cadbury India

3 The Cadbury Logo

About Cadbury Dairy Milk

4
Chocolate (CDM)
Cadbury India distribution
5 network India
Success Factors of Cadbury
6 India Limited
Review of Past Promotional
7
Programs
Impulsive Chocolate Buying
8 Behaviour and Pricing

9 Conclusion

10 Bibliography

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Global Market Summary

Market Growth:-
• The global chocolate market is estimated to be around $106 billion.
• 100 tons – of chocolate are consumed every second.

Although the global market is still dominated by Western Europe and North America,
emerging markets clearly represent the future. The BRIC countries (Brazil, Russia, India and
China) accounted for 55% of global confectionery retail growth in 2011.

According to trade analyst figures, current hotspots include India (annual growth rate
15%), China (9%), Russia (6%) and Mexico (3.8%).

Men's love of chocolate is on par with women's preference for the treat: A UK study
by research group Mintel revealed 91% of all women admit to eating chocolate – with the
men not far behind at more than 87%.

There are a number of trends within the chocolate industry that are driving growth;
and product innovation in 2010-11 brought a 16% increase in new product releases over
2009. Increasing disposable incomes as well as changing public sentiments regarding health
and our global community is the driving forces behind this growth in innovation.

In Asia, chocolate hasn't traditionally been the sweet of choice, market analysis firm
Euro monitor International reports. Right now, Indians eat only 165 grams (less than 6
ounces) of chocolate a year. The Chinese eat only 99 grams (3.5 ounces).

The per-capita consumption in India of chocolates has increased from 40gm in 2005 to 150-
165 gm now and there is a lot of scope to grow even further.

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Cadbury India

Cadbury India — a subsidiary of Mondelez International, the $32 billion global snacking
major formed in October last year after Kraft Foods decided to split its business.

Cadbury controls over 67% share in the Rs 5,562 crore chocolates segment in India,
followed by Nestle with 21% share and Ferrero with 6% share, industry insiders said quoting
data from market research agency Nielsen. Last year, sales of Ferrero India and Nestle's
chocolate segment grew 30% and 6%, respectively. The chocolate industry in India works at
different levels that include chocolate giants like Cadbury's Dairy Milk, Nestle etc., small
chocolate manufacturers, chocolate retailers, chocolate importers and people who make
chocolates at home.

Cadbury India operates in five categories – Chocolate confectionery, Beverages,

Biscuits, Gum and Candy. In the Chocolate Confectionery business, Cadbury has maintained
its undisputed leadership over the years. Some of the key brands are Cadbury Dairy Milk,
Bournvita, 5 Star, Perk, Bournville, Celebrations, Gems, Halls, Eclairs, Bubbaloo, Tang and
Oreo.

In India, Cadbury began its operations in 1948 by importing chocolates. After over 60
years of existence, it today has six company-owned manufacturing facilities at Thane, Induri
(Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh) Hyderabad and 4
sales offices (New Delhi, Mumbai, Kolkata and Chennai). The corporate office is in Mumbai.

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The Cadbury Logo

Brand names act as a simple perceptual cue that identifies a product as one people are
familiar with or one they associate with particular attributes or features (Achenreiner and
John 2003). The famous Cadbury white/purple script logo is unique and original, yet simple,
familiar and somehow approachable (Figure 4.0). There is some element of a guarantee about
the product created by the signature logo. In fact, in Australia, Cadbury is regularly voted as
the most trusted brand in the country (Bradley, 2008). The appetising visual of two glasses
pouring milk into the signature is also well known and provides a pictorial heuristic for the
perceived benefit of “a glass and a half of full cream dairy milk”.

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About Cadbury Dairy Milk Chocolate

(CDM)

Cadbury 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!

Cadbury Dairy Milk (CDM) entered the Indian market in 1948, and since then for
consumers across India, the word Cadbury has become synonymous with chocolate. CDM
remains at the top of the Indian chocolate market not only because of its most delicious, best
tasting chocolate but also because of its memorable communication.

Cadbury’s own milk chocolate bar, made by adding milk powder paste to the dark
chocolate recipe of cocoa mass, cocoa butter and sugar, was launched in 1897. But it did not
attract a lot of interest. Swiss manufacturers were leading the field in milk chocolate, with
much better products than their rivals. So in 1904 George Cadbury was tasked with
developing a milk chocolate bar that was to have more milk than anything else on the market.

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 India distribution network India

Cadbury’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.

A schematic representation of the entire distribution channel is given here:-

CADBURYS INDIA
LIMITED

CNF in each district CNF CNF CNF CNF

DIS DIS DIS

Distributors

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RET
RET RET
RET RET
RET Retailers

Success Factors of Cadbury India Limited

1. Global management processes:-
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.
2. Local management processes:-
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.
3. Customized business models:-
Local management has set up systems to test and develop products from the ground
up with specialized interlinked cells that execute innovation and market testing hand-
in-hand. Cadbury India is known as a key product innovator. Besides Dairy Milk, the
entire Cadbury product portfolio in India has been developed locally to suit Indian
consumer tastes. Packaging, marketing and distribution have all been tailored to local
market conditions.
4. 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.
5. Subtle reengineering of raw material mix led to cost savings:-

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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
recipe by using less of costlier cocoa and more of milk and sugar.

Review of Past Promotional Programs

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Promo
Campaign Target Shift over the years
Mechanisms
From just for kids to
Real Taste of Life Child in adult the kid in every
adult
Appeal to a wider
Khanewalon ko
mass based on TVC, Print,
khane ka bahana Wider masses
age, Hoardings
chahiye
gender, etc.
Pappu Pass Ho
Youngsters TVC, Hoardings
Gaya
Shift to smaller
Miss Palampur Rural masses TVC, Hoardings
packs
Conversion of This was an
sweet innovative idea and
TVC, Print,
Kuch Meetha Ho consumers Cadbury went ahead
Hoardings,
Jaaye to chocolate for with the
Social Media
special ‘Celebrations’ packs
occassions with these ads
From converting
sweet consumers
Targeting the on special
Khane ke baad
habit of Indians occasions TVC, Print,
Meethe mein
to have desserts Cadbury now tried Hoardings,
Kuch Meetha Ho
after to sweet Social Media
Jaaye
meals consumption
for dessert to
chocolate as well

Targeting the
belief Converting yet
of Indians that another segment of TVC, Print,
Shubh Aarambh anything begun by sweet consumers i.e. Hoardings,
having something before the start of Social Media
sweet provides any work
good luck

Impulsive Chocolate Buying Behaviour and Pricing

♦ Buying Behaviour

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Impulsive 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.

Whether an individual focuses on cost or the benefit of impulsiveness depends on the

chronic values of the consumer, which forms the core of its personality. Hedonic personalities
will focus selectively on the benefits than the cost of impulsiveness and are considerable
uninfluenced by the costs. Hence, such individuals become insensitive to price aspect when
their hedonic urge is driving the purchase decision.

Let us explain 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 chocolate (e.g. Dairy Milk Silk) based products (associated with taste and pleasure)
instead of wafer-based offerings (which serve as a snack). This shows that brands command
a better premium when an impulsive urge rather than functional benefits are the prime
motivators for purchase.

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.

♦ Pricing

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Segments Product Pack size Rate

Value Dairy Milk 9.2 Gram Rs. 5

Value Dairy Milk Shots 18.6 Gram Rs. 10

Value Dairy Milk 17 Gram Rs. 10

Value Dairy Milk 38 Gram Rs. 22

Mid-Tier Dairy Milk Crackle 42 Gram Rs. 35

Mid-Tier Dairy Milk Roast Almond 42 Gram Rs. 35

Mid-Tier Dairy Milk Fruit & Nut 42 Gram Rs. 35

Premium Dairy Milk Silk 60 Gram Rs. 55

Premium Dairy Milk Silk Fruit & Nut 60 Gram Rs. 55

Premium Dairy Milk Orange Peel 60 Gram Rs. 55

Super Premium Dairy Milk Silk 145 Gram Rs. 125

Super Premium Dairy Milk Silk Fruit & Nut 145 Gram Rs. 125

Super Premium Dairy Milk Orange Peel 145 Gram Rs. 125

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Conclusion

The 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.

Bibliography
References: -
• www.google.com
• www.wikipedia.com
• www.cadburyindia.com
• www.economicstimes.com
• www.thehindu.com
• www.youtube.com
• http://www.mondelezinternational.com/in/en/home/index.aspx

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