PROJECT REPORT

ON CADBURY’S SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION 2009-2010 UNDER THE GUIDANCE OF

NEHA VERMA FACULTY, MAIMS
SUBMITTED BY:

Roll no____Batch No.(BBA SEM__Section) MAIMS LOGO Maharaja Agrasen Institute of Management Studies (Size 18, caps) Affiliated to Guru Gobind Singh Indraprastha University, Delhi PSP Area, Plot No. 1, Sector 22, Rohini Delhi 110086 STUDENT UNDERTAKING (On plain paper) This is to certify that I have completed the Project titled”(title of the project)” in “(name of the organization)” under the guidance of “(name of the faculty guide)” in partial fulfillment of the requirement for the award of degree of Bachelor of Business Administration at Maharaja Agrasen Institute of Management Studies, Delhi. This is an original piece of work & I have not submitted it earlier elsewhere.

NAI NA

Name of the Student

CERTIFICATE (In institute’s letter head) This is to certify that the project titled “____________________”

which is my first step in the field of professionalism. has been successfully accomplished only because of timely support of my well wishers.000 people and have direct operations in over 60 countries. Last but not the least. it today has five company-owned manufacturing facilities at Thane. KAKAR (director. I extend my thanks to my project guide Ms.is an academic work done by “__________________” submitted in the partial fulfillment of the requirement for the award of the degree of Bachelor Of Business Administration from Maharaja Agrasen Institute of Management Studies. gum and candy brands. We employ around 50. who directed me at every step in my project work. Induri . constant supervision and encouragement. Despite all efforts. First of all. Cadbury began its operations in 1948 by importing chocolates. under my guidance & direction. MAIMS) for giving me such a wonderful opportunity to widen the horizons of my knowledge. After 60 years of existence. In India. selling our products in almost every country around the world. It is a tribute for there valuation. I would like to express my thanks toDr. friends and parents who have directly or indirectly contributed in making this project a success. NEHA VERMA for her scholarly guidance. Name of the Faculty Guide ACKNOWLEDGEMENT This project work. I would also thank all the staff members of MAIMS. NAINA Cadbury is a leading global confectionery company with an outstanding portfolio of chocolate. I have no doubt that error and obscurities remain that seen to afflict all writing projects and for which I am culpable. I would like to pay my sincere regards and thanks to those. It is due to her personal interest and initiative that the project work is published in the present form. To the best of my knowledge and belief the data & information presented by him/her in the project has not been submitted earlier. Delhi.

hybrids that improve the cocoa yield. Some of the key brands are Cadbury Dairy Milk. Cadbury has maintained its undisputed leadership over the years. We recently entered the gums category with the launch of our worldwide dominant bubble gum brand Bubbaloo. Simply put. In the Milk Food drinks segment our main product isBournvita . Candy and Gum category.the leading Malted Food Drink (MFD) in the country. Our core purpose "creating brands people love" captures the spirit of what we are trying to achieve as a business. Since 1965 Cadbury has also pioneered the development of cocoa cultivation in India.(Pune) and Malanpur (Gwalior). Cadbury enjoys a value market share of over 70% . we have worked with the Kerala Agriculture University to undertake cocoa research and released clones. Chocolate Confectionery. Bubbaloo is sold in 25 countries worldwide. 5 Star. In the Chocolate Confectionery business. The corporate office is in Mumbai.the highest Cadbury brand share in the world! Our flagship brand Cadbury Dairy Milk is considered the "gold standard" for chocolates in India. Our Cocoa team visits farmers and advises them on the cultivation aspects from planting to harvesting. We also conduct farmers meetings & seminars to educate them on Cocoa cultivation aspects.Perk. Our efforts have increased cocoa productivity and touched the lives 5 . Similarly in the medicated candy categoryH alls is the undisputed leader.Éclairs andCelebrations. Kolkota and Chennai). Milk Food Drinks. We collaborate and work as teams to convert products into brands. Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi. Mumbai. The pure taste of CDM defines the chocolate taste for the Indian consumer. For over two decades. we spread happiness! Currently Cadbury India operates in four categories viz.

We are a part of the Cadbury PLC. Due to its resistance to temperature. Leading national players are Parry's. the chocolate has become one of the most widely distributed chocolate in the country. Candico and Nutrine. There exists a large unorganized market in the confectionery segment too.of thousands of farmers. world's leading Confectionery Company. Chocolates in India are consumed as indulgence and not as a snack food. Cadbury's Five Star. an overview Chocolate consumption in India is extremely low. . In rural areas. Per capita consumption is around 160gms in the urban areas. compared to 8-10kg in the developed countries. the first count chocolate. Other competing brands such as GCMMF's Badam bar and Nestlé’s Bar One have minor market shares. besides a host of unorganized sector players. Cadbury dominates the chocolate market with about 70% market share. Chocolate consumption in India is extremely low. In the late 80's. Nestle. was launched in 1968. MNC's like Cadbury. it is even lower. Key competition in the chocolate segment is from co-operative owned Amul and Campco. Ravalgaon. Indian chocolate market grew at the rate of 10% pa in 70's and 80's. driven mainly by the children segment. In the early 90's. when the market started stagnating. Its advertisement focused on adults rather than children. are recent entrants in the sugar confectionery market. we are poised in our leap towards quantum growth. Yes. Cadbury repositioned its Dairy Milk to any time product rather than an occasional luxury. high cocoa prices compelled manufacturers to raise product prices and reduce their advertisement budget affecting the volumes significantly. Nestle has emerged as a significant competitor with about 20% market share. Perfetti. Hardly surprising then that the Cocoa tree is called the Cadbury tree! Today. like we said we will continue to spread happiness! INTRODUCTION RELEVANCE OF STUDY Today’s Indian chocolate market.

which created categories like wafer chocolate and spurred growth. common name for a powder derived from the fruit seeds of the cacao tree and for the beverage prepared by mixing the powder with milk. These chocolates positioned as snack food rather than on the indulgence platform compete with biscuits and wafers. and 40 percent fat. Cocoa has a high food value. the fat melts.The launch of wafer chocolates Kit Kat andPerk spurred volume growth in the mid 90's. and Cameroon are the leading African cocoa producers. The beans are then dried in the sun and cleaned in special machines before they are roasted to bring out the chocolate flavor. most of the cocoa butter is removed in the manufacturing process. which is used to make chocolate candy or is filtered to remove the fat and then cooled and ground to produce cocoa powder. The fruit harvest is cured or fermented in a pulpy state for three to nine days. during which the heat kills the seeds and turns them brown. containing as much as 20 percent protein. better known as cocoa beans. such as starch to prevent caking. or potassium bicarbonate to neutralize the natural acids and astringents and make the cocoa easy to dissolve in liquids. During the grinding. Most of the remainder comes from South . Côte d'Ivoire. The enzymes activated by fermentation impart the substances that will give the beans their characteristic chocolate flavor later during roasting. African countries harvest about twothirds of the total world output. The beans are sold in international markets. small percentages of various substances may be added. Nigeria. 40 percent carbohydrate. an alkaloid that is closely related to caffeine. producing a sticky liquid called chocolate liquor. Ghana. is complex. The processing of the cacao seeds. They are then shelled in a crushing machine and ground into chocolate. A strong volume growth was witnessed in the early 90's when Cadbury repositioned chocolates from children to adult consumption. When cocoa is prepared. It is also mildly stimulating because of the presence of Theo bromine. The mid 90's saw the entry of new players like Nestle. After the fat is separated and the residue is ground. Chocolate Manufacturing Cocoa.

The crop is traded on international commodity futures markets. chiefly Brazil and Ecuador. lollipops. The ingredients are blended. usually lighter in colour than sweet chocolate. Viscosity is then adjusted by the addition of more cocoa butter. usually dark in colour is made with chocolate liquor. lecithin (an emulsifier). spices and essential oils. vanillin. frequently going upto 12-15% chocolate liquor and 15-20% whole milk solids. It usually contains at least 10% chocolate liquor and 12% whole milk solids. • Panned varieties. and conched. Confectionery products can be categorized as • Hard boiled sugar candies. Attempts by producing countries to stabilize prices through international agreements have had little success. jellies • Toffees • Chewing candies • Breath freshners. Milk chocolates. • Count lines. and such flavourings as vanilla beans. • Small value added units. Products And Segmentation Chocolate market can be segmented as follows: Large units bars/ slabs. refined (ground to a smooth mass). throat relievers Gum based products are • Chewing gum • . salt. or a combination of both. Types of chocolate Sweet chocolate. sugar.American countries. Milk chocolate is formulated by substituting whole milk solids for a portion of the chocolate liquor used in producing sweet chocolate. Manufacturers usually exceed these values. digestives. are milder in taste because of its lower content of bitter chocolate. Sweet chocolate usually contains at least 25-35% chocolate liquor content. cocoa butter.

Bubble gum Gum based products are • Chewing gum • Bubble gum Chocolates and Confectionery Industry Chocolates Bars/ Slabs Count lines Panned (Gems) .

etc.Eclairs Assorted Sugar confectionery Hard boiled Toffees Soft chew Jelly candies Deposit candies Lollipops Mints. Gum based Chewing gum Sugar coated chewing gum Bubble gum .

panned chocolates.Gum based products are • Chewing gum • Bubble gum Chocolate Segmentation Chocolate market can be segmented into moulded chocolates. count chocolates. Type of chocolates % Share in chocolate market Moulded 37% Count 30% Eclairs 20% Panned 10% Others 3% . éclairs and assorted chocolates.

Truffle. Cadbury Éclairs was launched in 1972. In panned segment. Kit Kat. Panned products include Cadburys' Gems. and Lions in India. Cadbury dominates with over 95% market share. and Nestlé’s Marbles. Cadbury launched a new count bar Picnic. Nestle immediately followed it with the launch of Charge. After Eight. Parle Products launched Melody in 1991. Nestle Premium. Nestle is a recent entrant in the segment. Count lines (5 Star.Moulded chocolates. Its main competitor is Nestle India. like Dairy Milk. Nutties. Gujarat Co-operative Milk Marketing Federation (GCMMF). In 1998. Nestle Milky Bar. and Picnic) are the second largest segment accounting for 30% of the volumes. Both are local manufacturers. It has launched some of its international brands like Quality Street. is the largest segment accounting for more than 1/3rd of the market. Perk. Market Share Moulded segment Count segment Éclairs Cadbury 70% Cadbury 76% . The Count Line segment has been growing at a faster pace during the last three years driven by growth in Perk and Kit Kat volumes. Nutrine's Éclairs has done extremely well in the market. Nestle has identified chocolate and confectionery as one of the thrust areas for growth. which is normally known as Amul and Central Arecanut and Cocoa Manufactures and Processors Co-operative (CAMPCO) are other two significant players. Amul Milk Chocolate. Chocolates Market Share Cadbury is the market leader in all categories with over 65% market share. Éclairs (droplets of hard caramels with soft chocolate fillings) are a low unit priced product.

and easily chewed— are fondants (the basis of chocolate creams) and . milk products. Typical of soft. gelatin. emulsifiers. usually called candy in the United States. processed food based on a sweetener. fats and oils. eggs. when boiled. can be divided into two kinds according to their preparation and based on the fact that sugar. which may be sugar or honey. creamy. or crystalline. goes through different stages from soft to hard in the crystallization process. nuts. or sweets in Great Britain.Cadbury 49% Nestle 23% Nestle 20% Nutrine 37% GCMMF 5% Campco 3% Nestle 12% Others 2% Others 1% Parry's 1% Others 1% Confectionery Confectionery. and chocolate or cocoa. to which are added other ingredients such as flavorings and spices. Confectionery. colorings. candy—smooth. fruits.

In 1911 the first candy bars were sold in baseball parks.fudge. . popcorn. In the U. confectionery production. Confectionery Market Share The confectionery market is highly fragmented with several players with strong regional presence. licorice. Parry's. the various forms of chocolate (bars or molded pieces. Records show that confectionery was used as an offering to the gods of ancient Egypt. Other favorite confections include nougats. cotton candy (spun sugar). Candy-making did not begin on a large scale until the early 19th century.S. and chewing gum. Cadbury. marshmallows. when with the development of special candy-making machinery it became a British specialty. typical hard. by 1960 candy bars made up almost half of U. noncrystalline candies are toffees and caramels.S. Honey was used as the sweetener until the introduction of sugar in medieval Europe. Leading national players are Nutrine. Parle. sometimes filled). Among the oldest types of candies are licorice and ginger from the Far East and marzipan from Europe. By the 1980s annual world production of confectionery totaled many millions of kilograms. pastes and marzipan. the candy industry began to grow rapidly during the mid-19th century with the invention of improved machinery and a cheaper process for powdering sugar.

It is the market leader in hard-boiled confectionery as well as toffees. Chewing Gum. Poppins. Bubble Gum.The company has brands like LactoKing. Eclairs form just 5% of the entire market. Coconut Punch. Nutrine gets around 50% of its turnover from southern India. Toffees. Mango Bite and Kismi Toffee bar. Total tonnage sold by Nutrine in the confectionery market is around 36650 tonnes. Nutrine with a strong base in southern India has emerged as the reigning number one player in the sugar confectionery market with 24% share. The entire market can be divided into 7 major categories. Over last one year or so it has launched various products in the sugar confectionery market. Madras Cafe.Nestle. It is number two in both HBC and Toffee market with 30% and 21% market share respectively Parry's has emerged as the third largest player in the market with 13% market share and a tonnage of 14500 tonnes. Candico. Wrigleys and Joyco India. in its portfolio. namely Hard Boiled Candies(HBC). Besides this the company also has brands like Rola Cola. Perfetti. 20% from Eastern region and rest equally from westerns and northern region. Parle has strong presence in orange candies (hard boiled) supported by its Melody toffees. It has share of 37% in eclairs market and is reigning at second position behind Cadbury's. Ravalgon.It has market share of 16% in the total confectionery market with a tonnage of 16800 tonnes. While HBCs form 51% of the entire market. Mints and Lozenges form 4% and 3% of the market respectively. Coffy Bite etc. The second largest player. Mints and Lozenges. Its biggest brand isMahalacto followed byAsay andKokonaka respectively. Peppermint etc. Though in the over . 18% is formed by toffees and 18% by chewing gum & bubble gum collectively. in its portfolio. Eclairs.

It continues to be one of the biggest brands. Cadbury has also launched Mocka. Cadbury has been one of the leaders with Cadbury eclairs with chocolate inside. it is at par with Parle in toffees market with 21% share. UK. The product is sold under license from Trebor Bassett. a hardboiled sweet in late 1996. Googly was extended nationally in early 1997. a coffee based sugar confectionery. fizzy candy. Cadbury made a foray into the sugar confectionery segment with Googly.Googly the tangy. Market shares in sugar confectionery market . Cadbury took the market by surprise and marked the entry of Trebor into the fast growing Indian market. It was the most successful in 1972 when it was launched because of its initial introductory price of 25 paise and was instant hit.all confectionery market it is at number three.

Market share (%)Major brands Nutrine 24 .

Kokonaka. Vicks. Market shares in sugar confectionery market Anti-cold/OTC brands such as Halls. Eclairs. Gum Yum.Naturo.40 million . Pops. Mango. Poppins. HoneyFab. etc are increasingly being sold on the fun positioning rather than for their medicinal properties. Rola cola. Googly was extended nationally in early 1997. competing directly with other confectionery brands. Kismi. Fox's Ravalgaon 7 Pan pasand. Flavoured Candy. Allen's Splash. Caramella. Dishum.60 million for the quarter ended 17 June 2001. Rosemint Parry's 13 Coffy Bite. Nutrine Eclairs. Fruit Bar Parle's 16 Melody. Coconut punch.SuperStar. Funda. Shakti. Mango mood. Ole. Hisoft. Clorets. Supreme. Aam Ras. Fruit Rings. UK.206. Juicy license from Trebor Bassett.80 million for JQ01 to Rs 1. LuxDairy. a coffee based sugar confectionery. Coffee break. Peppermint.Chuma. Financial Analysis Cadbury India net profit at Rs 190 million. Pineapple Cadbury's 11 Googly. Caramilk. Chuma. Gollum. Sunshine. Mocka. Soothers. Madras Cafe. Mumbai: Cadbury India Ltd has posted a net profit of Rs 190 million for the quarter ended 16 June 2002 as compared to Rs 93. Gulkand. Toffo Butter. Lacto king. Halls and Vicks are available in various flavours. The total income has increased from Rs 1. Frutus. Wild Coffy. English toffee. Soft-Spot.363.Mahalacto. Aasay. Cherries. Mango bite. Cadbury has also launched Mocka. Nestle 8 Polo.

which measured about 27.) Detailed Quarterly Period ending (months) 28-Dec-2003 (12) 29-Dec-2002 (12) 31-Dec-2001 (12) Net sales .70 million is on account of the profit on sale of excess immovable property at Thane. The company says it has struck an agreement with Kalpataru Properties.520 square metres. while three other facilities are run through arrangements with third parties. with a view of earning some funds. it plans to reduce manufacturing and supplychain costs. Cadbury India has three factories.70 million (corresponding quarter last fiscal: Rs 21. The deal helped Cadbury unlock the value of its investments and helped it to shore up its bottomline. “As a future strategy.for JQ02. the company undertook cost-cutting exercises over the past one year. Cadbury had sold the land near its factory at Thane for Rs 11 crore early this year.90 million) out of which Rs 107. Cadbury India had offered a voluntary retirement scheme to 29 employees in order to bring down costs. The other income for the current quarter is at Rs 127. Cadbury India has already made an application for delisting. Cadbury Schweppes recently hiked its stake in the Indian company to 90 per cent by buying out around 39 per cent of the public shareholding. To overcome the negative impact of sluggishness in the fast-moving consumer goods market on its performance. Brief Financials (in Rs. which it operates on its own. Maharashtra.” During the past few months. Thane. for selling the land. say analysts. Mn. Recently Cadbury India also refurbished its old office block in Mumbai and is now planning to lease out the extra space available after the renovation.

34 1175.0 0.13 Equity capital 357.45 13.10 357.77 PAT 456.73 P/E range (x) 0.69 2860.08 5683.0.98 Total Income 7391.0 .21 595.10 357.01 1108.34 Other Income 93.00 2.11 6846.10 EPS (Rs.78 20.00 6.40 Gross Block 3267.71 70.) 2.) 12.58 6258.32 11.55 OPBDIT 1098.67 DPS (Rs.0.03 6272.78 89.) 99.36 16.0 .47 2690.02 5163.32 Cost of goods sold 6293.7298.50 727.43 6858.0 .00 BV (Rs.

0.9 17. in past years? .03 Operating margin (% of OI) 14. 5. The study of pricing of Cadbury different products and which techniques they use to maximize the profit. The place Cadbury has in market.0. We have done a comparison of Cadbury by its competitors. What are the difficulties. We have studied the ongoing battle in the confinery market. We study the how Cadbury increase their profit by introducing new product 3.0 . 4. which Cadbury faces.1 17.7 Net margin (% of OI) Objective of the project 1. 2.04 0. 6.0 Debt / Equity (x) 0.03 0.

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