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1 http://www.scribd.

com/doc/17695120/Cadbury-Fuse-marketing-project Per capita confectionery consumption in the UK is among the highest in the world, exceeded only by Ireland and Denmark. Chocolate confectionery accounts for around 70% of sales value in the UK market, with sales of sweets (sugar confectionery) at around 30%.

Historically, the chocolate confectionery market has been characterised by the dominance of a number of well established brands, such as Cadbury Dairy Milk, Mars Bar and Kit Kat.

Cadbury

Cadbury plc is a confectionery and beverage company with its headquarters in London, United Kingdom, and is the world's largest confectionery manufacturer. Cadbury plc manufactures chocolates and sweets such as the popular Dairy Milk, as well as a limited range of beverages in Australia. The firm was formerly known as Cadbury Schweppes plc before demerging in May 2008. With a history stretching back over 200 years, today Cadbury Schweppes employs around 54,000 people and its brands are enjoyed in almost every country around the world. They are also the world's third largest soft drinks company. Throughout history chocolate has been associated with romance and sharing. Today the richness and smoothness of Cadbury chocolate is what makes it one of the world's favorite treats. Cadbury has two targets for its products - trade customers who stock the product and consumers who buy it. 2

This project revolves around the chocolate bar called FUSE launched by Cadbury in 1996 in the UK.

Fuse

Fuse was a chocolate bar produced by Cadbury Schweppes in the UK. The product was unusual for being a solid bar of chocolate containing suspended within it nuts, raisins, crisp cereal and fudge pieces rather than having these ingredients simply coated with chocolate. The bar tested very well in research, with 82% rating it as excellent or very good and 83% proposing to purchase it regularly. Fuse was the subject of a large marketing campaign leading to a national rollout of the product on "FuseDay" - Tuesday 24 September 1996. The unusually large marketing campaign was the subject of a documentary by TV Choice Ltd - The Marketing Mix at Cadbury's (1998). Its launch is still glorified by its makers as their most successful launch campaign ever.

4 Over 250 ingredients were tried and tested before the final recipe was agreed. In the first three months of its launch, 70 million Fuse bars were purchased. Sadly, it was discontinued in 2006.

PRODUCT

The development of strong brands has always been a feature of the confectionery market. The market for chocolate bars is highly competitive. There are a small number of large firms in the industry - Mars, Cadbury, Nestl and Suchard being the most well known. Many of the brands in the market have been in existence for a long time and have a high amount of brand loyalty. Openings for new products therefore are limited. There are many examples of products that have been launched and which have been withdrawn because they could not sustain long-term sales success. The market for certain types of chocolate bar has changed in recent years. The growth of the so - called 'count-line bar' (shaped like Mars bars) became popular as people ate chocolate on the go as opposed to sitting down in a room with a traditional bar of chocolate. Companies had to respond to these changes. Rowntree (now owned by Nestl) changed the shape of their Aero bar and Cadbury brought out a rival bar called Wispa. Both of these were designed to exploit this growing market. The market is still changing but using chocolate as a snack as opposed to sharing a bar amongst a family or giving chocolate as a gift is still a growing part of that market. The 'Fuse' concept was developed after market research identified the growth of snacking and a definite gap in the market for a more chocolaty snack. A number of ingredients were devised and tested following a survey which 4

5 questioned consumers about their snacking habits and preferences. A research and development team was then asked to develop a number of product recipes which addressed the needs expressed by consumers. Not all products successfully emerge from the product development phase. Research and development involves combining various ingredients to develop potential new products. Considerable development time was spent on Fuse, carefully engineering the ingredients in order to deliver the right balance of chocolate, food elements and texture. More than 250 ingredients were tried and tested in various combinations before the recipe was finalised. Any new product in the snacking sector must establish points of difference from existing products within the market - thus creating a unique selling proposition (USP) i.e. a product with unique appeal which is not shared by any of its competitors. Whereas other confectionery snacking products focus primarily upon ingredients, with chocolate used only to coat the bar, the product developers decided to use Cadbury chocolate to ''fuse'' together a number of popular snacking ingredients such as raisins, peanuts, crisp cereal and fudge pieces. Fuse was targeted at the general, already chocolate consuming customers and also specifically at people between the age group of 20 to 45. This age group is considered to be always on the go. The chunky Fuse was the perfect chocolate snack for such consumers. Due to this chunky nature Fuse could be stored for a long period of time and also used as snacks on outings and picnics.

Fuse Bar which they described as "A fusion of Milk Chocolate, Raisins, Peanuts, Crispy Cereal and Fudge pieces", were discontinued in 2006. In the eyes of Cadbury's their Fuse Bars were never little more than an experiment, a barometer to gauge the trends of the confectionary market. The Bar itself is typically Milk Chocolate brown in colour and are rectangular in shape and are sold in a plastic wrapper which is predominantly Purple in

6 colour. The weight of the Bars are 49g and are adequately sized, just slightly smaller than a standard sized Mars or Snicker Bar. the texture is quite brittle and crunchy and the Chocolate quickly melts in your mouth. Initial taste is of Peanuts which works brilliantly when combined with the Milk Chocolate and this Bar is packed full of Peanuts with a rich , creamy smell. Inside the Bar there are Raisins and also bits of Cereal but the taste of these is drowned out by the taste of the Peanuts whilst the Cereal gives the Fuse Bar its crunch.

THE NUTRITIONAL INFORMATION

Each 49g Fuse Bar will provide you with the following: Energy - 240 calories Protein - 3.5g Carbohydrate - 28.9g Fat - 12.1g The product is suitable for Vegetarians but does contain Nuts so is not suitable for anyone with a Nut allergy. The product also contains Egg and Soya.

PRICE

Generally used pricing strategies: Based price- This is a price that is nearly the same as the competition has charged. Loss leader - price is below the true cost of the product to encourage consumers to buy product. Penetration or destruction price - This is a low price to encourage loyalty and to gain market share. Later the price is raised Cost plus price - Cost of product plus a mark up of profit. Psychological price - This is when a price is set at e.g. 6.99 rather than 7.00 so it encourages people to think it is cheaper.

Their pricing strategy

The Fuse went for base pricing since it was also being used by their competitors. It was a market oriented strategy, so they set the R.R.P. at 33p. They did this because if they priced it too high then no one would buy it since they could purchase other chocolate bars for less. They couldn't set it too low because they have an oligopolistic market. This means there are only a few dominant competitors in the market. Hence, if they priced it too low, for example 20p they would be selling

8 at a price less than the rest but then the other companies would also have to lower their prices because of which the overall the prices of chocolates would fall and the profits of all the companies would go down. So Cadbury priced the chocolate bar appropriately but not too low so Cadbury still earns a fair bit of profit.

The price would never really change throughout the life cycle of the product since there are lots of other brands which are also selling their products of the same category at similar prices.

Different people have different level of sensitivities when it comes to prices. Some people prefer to buy without caring about the fact that they could get a better deal and some other always want to land up with the best deal. This logic applies to Fuse just a tiny bit because people don't look for the best buy on a chocolate bar because it is an impulse buy. An impulse buy is just when you walk in a shop and buy something quickly without much thought before the purchase. This means that large quantities of Fuse should be sold for the company to break even. The firms will then in turn use flow production and benefit from economies of scale. This will help them by saving money and time because they will be buying and making in bulk. From my findings I have seen that Fuse has under charged people for their chocolate bars. Fuse could have increased the price ands still got the same amount of sales because not many people care how much their chocolate bar costs since most of these purchases are impulse purchases. So a slight increase in price could have been more beneficial since Fuse has to sell a lot to breakeven, even though Cadbury have very good economies of scale.

Place

This is where the product is sold, how it gets to the consumer and how it gets to that place of purchase. There are 4 types of places where you buy products:

Retailer: Wholesaler:

This is a businessman who sells to a consumer. A wholesaler is a firm that buys from a factory in bulk and breaks it down to sell to retailers.

Agent:

This is somebody that puts buyers and sellers together.

Producer:

This makes the product. In this case, the producing company is Cadbury.

Also there are vending machines which Cadbury uses quite a lot.

The channels of distribution

These paths were targeted by Cadburys to Extend Fuse Bars into the market.

10 Types of retailers : Independent (newsagents etc.) -sole traders mainly Supermarkets Specialist multiples Variety chain stores Franchised chains. Mail order and internet. Chocolate bars are sold in most of these above mentioned places. Specific chocolate stalls or chocolate counters are normally located in areas near the checkout points since buying chocolates are normally impulse purchases. So they are stacked at such places wherein people could just grab one while buying another product. Mostly, they are kept in huge boxes with some kind of promotion campaign linked to it (for eg. Cheap discounts) , so it could attract attention of consumers while they are shopping or paying their bills or waiting in long queues. The Place factor doesnt only concern the shops but also the place where the chocolates are stored. Most people are going to look around the normal eye level which is about 4 to 6 ft from the ground. Hence that could be an ideal height to place the Fuse bars on the shelves. This works very well as Fuse is an impulse buy so consumers would just quickly look at the selections and would prefer to look at a comfortable level without stretching upwards or downwards to find Fuse.

Cadburys overall strategy on the Place factor would be, it is not of that importance where exactly it is sold in the sense that Fuse will sell where it has to and wont where it doesnt have scope to do so but they have targeted all leading supermarkets and big chain stores and aimed at as many promotions as possible using big boxes of chocolates stored near the checkout areas to attract impulse 10

11 purchasing. Secondly, they have also used the concept of eye level shelves to a great extent so that the consumers dont miss it.

Promotion

Companies like Cadbury promote mainly either by persuading consumers to buy the products or by explaining what the product is all about or go for both. In the Fuses case the strategies theyve adopted are awareness and persuasion. In recent years, product launching has become an art which can make or break a product. A successful launch makes potential customers aware of the new product and keen to try it. Before consumers could try the product, however, it was important for Cadbury to gain the support of its trade customers. Retailers had to view it as helpful in encouraging customers to visit their shops. If the product had failed to interest retailers and distributors, the costs of investment would not have been met and they would not have stocked the product. Cadbury conducted one-to-one briefings with over 70 key trade customers. This helped Cadbury build awareness and commitment to the launch and obtain significant orders for in-store displays and merchandising ahead of the launch date. The trade commitment was reflected in high levels of display support in store during the launch. Traditionally, new confectionery products are initially launched in one region of the country, in order to gauge the product's success, before moving on to other regions over a period of time. The commitment to the success of Fuse

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12 was so great, however, that it was Cadbury's first completely national launch for 20 years. Having a catchy 'hook' for a new launch helps to make consumers notice the product. Cadbury and its trade customers managed the first availability of Fuse around one day, Tuesday 24th September, aptly christened 'Fuseday'. Public relations (PR) support was substantial. It told the story of Fuse, explained that it had taken five years to develop, involved an investment of 10 million, the development of a new plant at Somerdale near Bristol and 4 million in advertising costs. The TV campaign and PR campaign were so successful that Cadbury was under pressure to meet repeat orders postlaunch! Many advertising and promotional campaigns were carried out post launch. These also included the traditional TV ads along with ads in magazines and billboards. It was also a topic of discussion amongst people because in later years fuse also developed high online presence. Lately, a lot of emphasis has been given to consumption of healthy foods or in other words natural foods. Ive come across many graphs and charts which depicts the average consumption of healthy foods by individuals. This could have been bad for the Fuse bar as the graph could increase awareness of the fact that a healthy option is important which could result in the pressure groups against unhealthy foods to increase in number. The pressure groups could then target chocolates as chocolates are seen as an unhealthy food that young people use to substitute healthy food. During the early days there was a strong, albeit short lived advertising campaign that launched the Fuse Bar into prominence but this soon fizzled away and Fuse Bars never quite made it as a household name like so many

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13 of the other Cadbury brands and instead they were relegated to the back of the shelves. Even after a decade later they recorded low sales and showed little signs of improvement. This finally led to the discontinuation of the product.

PACKAGING

Proper packing not only helps to protect and preserve the product in transit, but also helps to sell the product in the market. The terms packaging and packing are used interchangeably. However, there is a difference between the two terms. Packing refers to protective covering used for transportation of goods, whereas, packaging refers to the containers in which products reach the ultimate consumer. The type of packing differs from product to product, depending upon its physical properties, the distance of transportation, specifications of the importer, etc. The packaging achieved impact by using bright, fiery colours for the product name and contrasting them against the deep and instantly recognisable 13

14 'Cadbury purple', which communicated the manufacturer's heritage. The first thing that hits you when you spot a Fuse Bar on the shelf is the distinctive Cadbury's Purple coloured wrapper.The wrapper it must be said is quite attractive but not overly eye-catching. It is a plastic wrapper as opposed to the more common foil. Although it would seem the foil wrappers are predominantly used on only the most popular bars in Cadburys range. The colours were also used in a gun powder style to suggest an explosive taste. The vibrancy of the design aimed to differentiate it from other products in the sector so that it would have an immediate point-of-sale impact both onshelf and in store display units.

The word "Fuse" is written across the front of the wrapper in large Orange capital letters and above this there is the Cadbury's logo. Also across the front of the wrapper there is a white line which weaves itself between the letters within the word "Fuse." Closer inspection reveals that this is actually a wire, complete with a plug on the end. The white line is actually a Fuse wire and there are sparks coming off it. The reverse of the wrapper clearly contains the ingredients and nutritional information as you would expect, as well as the bar code and best before date. There is also a customer satisfaction guarantee tucked away under the flap at the back. Three different packaging formats were developed in order to maximise the various multi-purchase opportunities available. The key pack size was the single bar, designed to entice trial and to encourage repeat purchase. The 'treat size' and the multi-packs were aimed at families.

PACKAGING CONSIDERATIONS

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15 1). Containers big containers are used for shipping bulk items. 2).The weight of each package should not be very high since it can affect the chocolates and also as it may attract more dock handling and freight charges.

Conclusion

Concept of a on-the-go chocolate bar was an interesting idea. But Fuse wasnt the first in this category. Similar products, that were described as chunky were already available in the markets aiming at the same consumers with similar pricing strategies. In fact, Cadbury itself already had a product named Picnic which was very similar to Fuse, the only difference being omission of caramel in the later. The Marketing strategies were very well thought of. Especially the Pre-launching phase and the marketing researches were done quite accurately. Customer needs were pinpointed before development of Fuse. Cadbury had gone ahead with careful planning and some amount of risk when it came to launching of Fuse. The campaign was overly expensive and targeted all forms of media. Due to this the consumers were already aware of the product and were waiting for Fuse to be launched. It was the biggest ever marketing launch for a confectionery snack ever seen in the UK. The launch recorded a phenomenon success and sold like hot cakes in the initial years. But later due to poor planning and inadequate market analysis, the Fuse ship started sinking and the product was pulled from the market before things became worse. According to the numerous blogs that Ive gone through, people all across UK are still puzzled as to why Fuse was discontinued. Fuse was loved by chocolate consumers and its peanuty taste was refreshing to most. If this lapse in the market analysis was handled better there wouldnt have been a need to implement such drastic measures such as discontinuation of the product

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Bibliography

Internet Sources www.cadbury.co.uk http://www.chocolatereview.co.uk www.cadburyschweppes.com www.wikipedia.org

Special Thanks to our marketing professor Mr. Maccario.

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