TITLE OF THE PROJECT Name of the Researcher SANTOSH KUMAR MATADIN GUPTA (Bachelor of Management Studies) Academic Year – 2010-2011
Under the Guidance of MS. SUSHMITA MUKERJI
UNIVERSITY OF MUMBAI’S ALKESH DINESH MODY INSTITUTE FOR FINANCIAL AND MANAGEMENT STUDIES
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University of Mumbai’s Alkesh Dinesh Mody Institute For Financial and Management Studies
Certificate
I, Professor MS. SUSHMITA MUKERJI hereby certify that Mr. /Ms. SANTOSH KUMAR MATADIN GUPTA, TYBMS Student of Alkesh Dinesh Mody Institute for Financial and Management Studies, has completed a project titled “CADBURY COMPANY WITH RESPECT TO ITS MARKETING STRATEGY”, in the academic year 2010. The work of the student is original and the information included in the project is true to the best of my Knowledge.
Signature of Guide with Date:-
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Declaration
I, Mr. /Ms. SANTOSH KUMAR MATADIN GUPTA, TYBMS Student of Alkesh Dinesh Mody Institute for Financial and Management Studies, hereby declare that I have completed the project titled “CADBURY COMPANY WITH RESPECT TO ITS MARKETING STRATEGY” during the academic year 2010. The report work is original and the information/data included in the report is true to the best of my Knowledge. Due credit is extended on the work of Literature/Secondary Survey by endorsing it in the Bibliography as per prescribed format.
Signature of the Student with Date
Name of Student
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University of Mumbai’s Alkesh Dinesh Mody Institute For Financial and Management Studies
Name of Student: SANTOSH KUMAR MATADIN GUPTA Roll Number:
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Title of the Project: CADBURY COMPANY WITH RESPECT TO ITS MARKETING STRATEGY
Signature of Student with date:
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1. Executive Summary:Cadbury Schweppes is the world’s largest confectionery company. They manufacture, market and distribute branded chocolates, confectionery and beverages that bring smiles to millions of consumers across 180 countries. With origins stretching back over 200 years, today their products - which include brands such as Cadbury, Schweppes, Halls, Trident, Dr Pepper, Snapple, Trebor, Dentyne, Bubblicious and Bassett - are enjoyed in every country and around the world. Cadbury Schweppes employs over 70,000 people worldwide. The heritage started back in 1783 when Jacob Schweppes perfected his process for manufacturing carbonated mineral water in Geneva, Switzerland. And in 1824 John Cadbury opened a shop in Birmingham selling cocoa and chocolate. Cadbury has been synonymous with chocolate since 1824; the most famous being Cadbury Dairy Milk; first launched in 1905, and still a market leader today. These two great household names merged in 1969 to form Cadbury Schweppes plc. Cadbury is the leader in the UK chocolate market, and is the confectionery division of Cadbury Schweppes plc. Cadbury's Asia-Pacific sales are smaller compared to Europe and US. Asia Pacific sales accounted for only 18 per cent of the group's revenue of $7427 million dollars in 2006. The mature Japan and Australia markets have generated most of the firm's sales in the region but younger, fast-growing markets are becoming more important for the group. Cadbury currently makes around one third of its total Asia Pacific sales from 'emerging markets', of countries like China, India, Malaysia, Singapore etc. Cadbury launched Boost Guarana in 2001 in U.K, a new chocolate bar, which with proven energy stimulation properties. Containing Guarana, a South American plant extract known to native Indians for centuries, the product was launched to meet the consumer need of stimulating the mind and complement a busy lifestyle. Cadbury is planning to launch BOOST GUARANA in the vibrant Singapore chocolate market.
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Contents of Cadbury: Serial. no
Topic
Page. No
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EXECUTIVE SUMMARY
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INTRODUCTION
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INTERSTING FACTS OF CADBURY
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HISTORY OF CADBURY
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PRODUCTS OF CADBURY WHEN THEY LAUNCHED IN MARKET EXPANSION AND GROWTH OF CADBURY
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OVER ALL TURN OVER
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CHALLENGES OF CADBURY
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CADBURY IN THE ENGLAND AND OTHER EUROPEANS COUNTRIES.
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CADBURY ASIA
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CADBURY ADVERTISING TIMELINE THEIR PRODUCTS
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PRODUCTS OF CADBURY
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MEANING OF MARKETING STRATEGY
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MARKETING STRATEGY OF CADBURY
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SWOT ANALYSIS
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5 P’S OF CADBURY
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ADVERTISING THEIR PRODUCTS IN DIFFERENT WAYS SEGMENTATION,TARGETING,POSITIONING
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BRAND AMBASSADOR
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COMPETITORS OF CADBURY
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CONCLUSION
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INTRODUCTION Cadbury is a company with a long history in Australia and a passionate commitment to making everyone feel happy. Check out what we are doing around the world and search for where to buy our products. Find out what our most common queries are, and ask some of your own if you like. Cadbury India can be termed as one of the best performing FMCG companies today. Unlike its peer group, which is more of complete food companies, Cadbury is a very niche player with a dominant position in Indian Chocolate Confectionery market. This makes it different & more successful in comparison with the peer companies. Now is the period of slowdown in the economy, where FMCG companies are the first ones to be hit upon. Reduction in the real income of the consumer has made its direct impact on the top –line growth of the company. Still, Cadbury has been able to drive its bottom- line growth. The reason for the success is the Corporate Governance practiced in the organization. We update its growth, progress, and current valuation in this report. The Cadbury’s Inc has taken the opportunity to offer us a broader view of chocolate category. The Cadbury India’s no.1 Chocolate is able to share with their market insights based upon unparalleled breath of chocolate experience. Cadbury has grown from strength to strength with new technologies being introduced to make the Cadbury confectionary business, one of the most efficient in the world. The merge in 1969 with Schweppes and the subsequent development of the business have led to Cadbury Schweppes taking the led in both, the confectionary and soft drink market Intec UK and becoming a major force in the international market. Cadbury Schweppes today manufactures product in 60 countries and a trade in staggering 120. The Cadbury story is a fascinating story of a family business that grew in one of the biggest, most loved chocolate brand in the world. A story that you will remember as the story of “The taste of life”.
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INTERSTING FACTS OF CADBURY
1) Cadbury was the first company to include pictures instead of printed text on chocolate boxes. 2) George Cadbury didn’t want to take mothers away from their children, so he developed a company rule that women had to leave work when they got married. Each married woman was given a bible and a carnation as wedding gifts. 3) In 1886 Cadbury became one of the first firms to have dining rooms with kitchens and food for sale. 4) A miniature metal animal (elephant, penguin, owl, fox, duck, squirrel, rabbit or turtle) was given away with specially designed cocoa tins in 1934. In the same year, Cadbury's tokens, which came with packs of cocoa, could be redeemed for lamps, kettles and saucepans. 5) So many children joined Cadbury’s Coco cub Club that it had 300,000 members in 1936. 6) Cadbury’s World Visitor Center opened in 1990, welcoming 400,000 visitors in its first year. 7) Cadbury launched a Get Active program in 2003, helping 10,000 teachers get in shape.
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History of Cadbury Cadbury, the global leader in the chocolate confectionery market, began in 1824 when a young Quaker named John Cadbury opened up a shop in Birmingham. John sold coffee, tea, drinking chocolate and cocoa at his shop. Believing that alcohol was a main cause of poverty, John hoped his products might serve as an alternative. He also sold hops and mustard. Like many Quakers John had high quality standards for all of his products. At that time in England, Quakers were prohibited from attending university, since it was affiliated with the established church, and their pacifist beliefs kept them from joining the military. With few opportunities available, Quakers often went into business-related fields and/or devoted their time to missions of social reform. By 1842 John was selling 11 kinds of cocoa and 16 kinds of drinking chocolate. Soon John’s brother Benjamin joined the company to form Cadbury Brothers of Birmingham. The Cadbury brothers opened an office in London and received a Royal Warrant (one of many) as manufacturers of chocolate and cocoa to Queen Victoria in 1854. Six years later the brothers dissolved their partnership because of John’s failing health and the death of his wife. They left the business to John's sons George and Richard. John devoted the rest of his life to social work and died in 1889. George and Richard continued to expand the product line, and by 1864, they were pulling a profit. Cadbury’s Cocoa Essence, which was advertised as "absolutely pure and therefore best," was an all-natural product made with pure cocoa butter and no starchy ingredients. Cocoa Essence was the beginning of chocolate as we know it today. The brothers soon moved their manufacturing operations to a larger facility four miles south of Birmingham. The factory and area became known as Bourneville. With Cadbury’s continued success in chocolate, George and Richard stopped selling tea in 1873. Master confectioner Frederic Kinchella was appointed to share his recipe and production secrets with Cadbury workers. This resulted in Cadbury producing chocolate covered nougats, bonbons delices, pistache, caramels, avelines and more.
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Cadbury manufactured its first milk chocolate in 1897. Two years later the Bourneville factory employed 2,600 people and Cadbury was incorporated as a limited company. During World War I, more than 2,000 of Cadbury’s male employees joined the Armed Forces. Cadbury supported the war effort, sending warm clothing, books and chocolate to the soldiers. Cadbury supplemented the government allowances to the dependants of their workers. When the workers returned, they were able to return to work, take educational courses, and injured or ill employees were looked after in convalescent homes. During this period trade overseas increased, and Cadbury opened its first overseas factory near Hobart, Tasmania. The next year Cadbury merged with JS Fry & Sons, a past market leader in chocolate. Cadbury supported the war effort during World War II by converting parts of its factory into workrooms to manufacture equipment like milling machines for rifle factories and parts like pilot seats for Defiant fighter planes. Workers plowed football fields to grow crops, and the Cadbury St. John’s Ambulance unit helped people during air raids. Chocolate was considered essential for the Armed Forces and civilians. Rationing finally ended in 1949. In 1969 Cadbury merged with Schweppes to form Cadbury Schweppes. Schweppes was a well-known British brand that manufactured carbonated mineral water and soft drinks. The merged companies would go on to acquire Sunkist, Canada Dry, Typhoo Tea and more. Schweppes Beverages was created, and the manufacture of Cadbury confectionery brands was licensed to Hershey. Today Cadbury Schweppes is the largest confectionery company in the world, employing more than 70,000 employees. In 2006 the company had over $15 billion in overall sales. In March of 2007, Cadbury Schweppes announced that it intends to separate its confectionery and beverage businesses. With almost 200 years in the business, Cadbury Schweppes will continue to prosper in the coming decades.
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PRODUCTS OF CADBURY WHEN THEY LAUNCHED IN MARKET
Cadbury Product Timeline
SERIAL.NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
YEARS 1865 1875 1897 1905 1908 1915 1920 1923 1929 1938 1948 1968 1960 1970 1983 1985 1987 1992 1996 2001
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2007
PRODUCTS Cadbury Cocoa Essence Cadbury Easter Eggs Cadbury Milk Chocolate Cadbury Dairy Milk Cadbury Bourneville Chocolate Cadbury Milk Tray Cadbury Flake Cadbury Crème Eggs Cadbury Crunchie Cadbury Roses Cadbury Fudge Cadbury Picnic Cadbury Buttons Cadbury Curly Wurly Cadbury Wispa Cadbury Boost Cadbury Twirl Cadbury Timeout Cadbury Fuse Cadbury Brunch bar, Dream & Snowflake Cadbury Schweppes
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EXPANSION AND GROWTH OF CADBURY
THE LEGEND CALLED CADBURY
1824 – A business was opened in 1824 by a young Quaker, John Cadbury, in Bull street Birmingham was to be the foundation of Cadbury Limited, now one of the world’s largest producer of chocolate. 1831 – By this year the business had changed from a grocery shop and John Cadbury had become a manufacturer of drinking chocolate and cocoa. This was the start of Cadbury manufacturing business as it is known today. A larger factory in Bridge Street Birmingham was rented in 1847, John Cadbury was joined by his brother Birmingham and the business became Cadbury Brother of Birmingham. 1861 – John Cadbury resigned his business and handed over to his sons, Richard, 25 and George, 21 who after 5 difficult years almost shut down the business to take up other vocation. Fortunately for generation of chocolate lovers, they didn’t. 1866 – Saw a turning point for the company with the introduction of a process for pressing the cocoa butter from the coca beans. This not only enabled Cadbury Brothers to produce pure coca essence, but the plentiful supply of coca butter remaining was also used to make new kind of eating chocolate. The essence was advertised as ‘Absolutely pure, therefore best’. 1879 – Business prospered from this time and Cadbury Brother outgrew the Bridge Street factory, moving in 1879 to a ‘Greenfield’ site some miles from the center of Birmingham which came to call Bourneville. The opening of the Cadbury factory in a garden also heralded a new era in industrial relations and employee welfare with joint consultation being just one of the introduced by the pioneering Cadbury Brothers. 12
1899 – In this year the business private limited company – Cadbury Brothers Limited progress since the start of the century. Chocolate has moved being a “luxury” item to well within the financial reach of everyone. 1905 – Cadbury has many famous brands with one of major success story being Cadbury’s Dairy Milk chocolate launched in 1905, today Britain’s favorite module chocolate bar. Cadbury today is the market leader in the U.K chocolate confectionary market, employing the most advanced processing technology and management information and control techniques. The company is the confectionary division of Cadbury Schweppes plc which is major force in the confectionary and soft drinks international market. World - wide Cadbury is one of the pre – eminent names in confectionary with impressive range of famous brands. Quality has been the focus of the Cadbury business from the very beginning as generations have worked to produce chocolate with that very special taste, smoothness and snap, so characteristics of Cadbury’s chocolate.
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OVER ALL TURN OVER The confectionary industry in India is in its growth stage. This marketing Research data from the industry shows that the industry has been making impressive growth in the Indian economy. The confectionary industry is divided into the flowing specific industrial sectors: Chocolate, Hard-boiled candies, Éclairs and toffees, Chewing gums, Lollipops, Bubble gums, and Mints and lozenges (Laura, 2008).
The total confectionary market is valued at about 41 billion Indian Rupees. It has a total turnover of about 223500 tones of confectionary produced every year. This is a huge overall turnover which is equal to that of established markets. Most the confectionary are consumed in the urban areas. The urban market constitutes about 73 percent of the total market. This is a skewed market share compared to the rural market which accounts for about 27% of the total market.
This market data shows that the rural market has not been well tapped into. With more than 50 percent of the Indians living in the rural areas, it means that there is a high potential in the rural market (Cadbury, 2008).On the product share of the market, hard boiled candy accounts for about 18% of the market, Éclairs and Toffees has about 18% of the market share, while gums and mints and lozenges are at par accounting for 13 percent of the market share each.
However chocolate has recorded the highest market growth rate recording about 23 percent growth rate. This is a higher growth rate compared to other markets in the world. However the overall sugar confectionary segment in the Indian market has been declining with a total decline of about 19 percent recorded in 2007 (Laura, 2008).
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Cadbury with a number of products including Daily Milk, Perk, Gems, 5 Star, Celebration, Bytes, Dairy Milk Éclairs, Éclairs Crunch, Mr. Pops and Halls is the leading player in the chocolate segment, Éclairs segment, Lollipops, and the Mints Segment (Cadbury, 2008).
Cadbury is also the leading player in the milk beverage segment which is valued at 16.1 billion Rupees. This segment has an annual turnover of about 63,000 tones and has been growing at a rate of 10.1 percent. Here Cadbury is the main player with Cadbury Bournvitta and Cadbury Bournvitta 5 Star Magic (Cadbury, 2008).
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CHALLENGES OF CADBURY Cadbury challenges commuters with 'Eyebrow Language'
Cadbury is capitalizing on the success of its global "Eyebrows" campaign with a Canadian print and OOH campaign called "Eyebrow Language." Targeting the younger end of the adult demographic, the campaign's creative is based on the "Eyebrows" TV spot, in which two kids with crazy eyebrows pose for a photo. The "Eyebrow Language" creative, made exclusively for the Canadian market, features ‘brows in different shapes that readers can translate into letters and words. Depending on the medium, the message either offers the reader a chance to win a prize or, in the print ads, to participate in a stunt executed at a specific time and location. On Monday, the decoded newspaper ad invited readers, hundreds of whom showed up, to a sidewalk at College Park in Toronto, where they were to twirl, clap and yell "chocolate" to win a prize. The media buy, handled by Cossette with creative by The Hive, are focused on Toronto and Vancouver, and include daily commuter newspapers, a billboard at YongeDundas Square in Toronto, transit ads in both cities and an online banner buy. Launched last week, the commuter-paper ads are running three days a week for four weeks, changing each time, as are the OOH ads.
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"We really wanted to make sure this had high impact with the consumer," Nina Purewal, brand manager, Cadbury Dairy Milk, tells MiC. "This is a very engaging promotion and, as you can see as you go through the elements, once [people] have committed to the promotion and decoding the messages, they're really committed. It's really all about high engagement." The campaign has also taken over the Dairy Milk website, which opens to a secret eyebrow message and Eyebrow Language decoder overlay. The site also includes extra phrases to decode and a ringtone of the song from the ad to download. Visitors can also watch the original "Eyebrows" ad that first aired in Canada Sept. 14.
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Cadbury in the England and other Europeans Countries.
Cadbury Schweppes faced opposition to the deal in several countries. Cadbury Schweppes is to keep control of its soft drinks brands in most of Europe instead of selling them to Coca-Cola, following concerns about delays in winning approval from European regulators. Under the original £1.14bn deal, announced in December last year, Coca-Cola was to buy all of Cadbury's drink brands except those in the US, France and South Africa. Cadbury has now abandoned plans to sell the brands in another 20 European markets, fearful that such a move would be blocked by competition watchdogs. The countries where Cadbury Schweppes will now retain control include Belgium, Norway, Spain, Switzerland, The Netherlands and Germany which was reportedly ready to reject the plan later this week. The companies still hope to receive approval for the sale in the UK and Ireland and 98 other countries worldwide. Cadbury chief executive John Sunderland said both companies had researched potential regulatory hurdles in 20 countries before announcing their plans in December. However, they now faced lengthy and complex regulatory resistance against the deal in some European countries which would "probably result in unacceptable delay". The delays have also forced the companies to revise their aim of having the entire sale completed by the middle of this year. Instead, they now expect the deal to be finalised by July only in about half the countries which have already given their approval or where regulatory clearance is not required.
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CADBURY ASIA Its contents of two countries they are INDIA & PAKISATAN
CADBURY INDIA In India, Cadbury began its operations in 1948 by importing chocolates. After 60 years of existence, it today has five company-owned manufacturing facilities at Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkata and Chennai). The corporate office is in Mumbai Currently Cadbury India operates in four categories viz. Chocolate Confectionery, Milk Food Drinks, Candy and Gum category. In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over the years. Some of the key brands are Cadbury Dairy Milk, 5 Star, Perk, Éclairs and Celebrations. Cadbury enjoys a value market share of over 70% - the highest Cadbury brand share in the world! Our flagship brand Cadbury Dairy Milk is considered the "gold standard" for chocolates in India.
Cadbury’s Dairy Milk started in Bourneville in the UK in 1905, but the journey with true chocoholics started in India 43 years later. Cadbury’s has been the number one market leader in chocolate sales for years. Cadbury’s has claimed that it has been the source of every Indian’s moment of happiness, joy and celebration – whether this is true, it’s doubtful. To this day, ‘Cadbury Dairy Milk’ alone has a 30% value share in the Indian chocolate market.
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In the early 90’s, indulgent chocolates were only seen as a child’s heavenly dream only rewarded for good behaviour, or perhaps even for a bribe. However, in the mid 90’s a new campaign was released, (‘The Real Taste of Life’) re-defining the outlook from “just for kids” to the “kids in all of us”. This new campaign brought out the forgotten child in every adult, flushing back memories of the very first moment they tasted chocolate. Cadbury Dairy Milk soon became the ideal expression of “’spontaneity’” and “’shared good feels’”.
The company was founded by Jacob Schweppes in 1783. Cadbury Schweppes is headquartered in London. Cadbury Schweppes is the No.1 confectionery and third largest soft drinks company in the world. We manufacture, market and distribute branded chocolates, confectionery and beverages that bring smiles to millions of consumers across 180 countries Cadbury India began its operations as a trading concern in 1947.
The first taste of chocolate was defined by Cadbury in the Indian sub continent. It has been more than 50 years of calling chocolates “Cadbury” in India. The company today employs nearly 2000 people across India. We work together to create brands people love. We believe wholeheartedly that the way to create brands people love is through our people. If you desire to work with the world’s number 1 confectionery company we’ve got great opportunities in store for you. You will typically start your career with us in a function in one of our many businesses. You will then be able to choose whether to develop your career as a generalist or specialist. Whichever path you choose, you will be encouraged to gain experience of different businesses, brands and people.
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Product and Services: Cadbury Schweppes Public Limited Company operates as a beverage and confectionary company worldwide. The company’s beverage products include carbonated water, apple juice, quinine-based carbonated drink, carbonated soft drink, non-carbonated soft drink, and tomato-based drink under Dr.Pepper, Schweppes, 7 Up, Snapple, Mott's, Hawaiian Punch, Clamato, and Schweppes Tonic Water brand names. Its confectionary products comprise cocoa powder, sugar confectionery, cough drop, chewing gum, milk chocolate bar, sugar-coated gum, and breath freshener, which are marketed under Cadbury, Bassett’s, Maynards, Halls, , Dentyne, Cadbury Dairy Milk, Chiclets, Clorets, Stimorol, Trident, Bubblicious, and Sour Patch Kids brand names. Cadbury Schweppes sells its products through direct sales force, third party bottlers, independent distributors, and other independent companies.
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CADBURY PAKISTAN Confectionery and Chocolate industry of Pakistan in 2009 is an analysis of branded (domestically produced) confectionery and chocolate market of Pakistan. The article reveals close estimates of sales turn over of major active players in the industry. It also examines contemporary trends in the local confectionery and chocolate market, with an emphasis on providing some useful information about the structure, norms, challenges and competitive landscape of the industry. Before proceeding to our core topic, it would not be unwise to have a look at the snapshot of country’s socio-economic indicators. Despite Pakistan’s confectionery and chocolate industry has enjoyed an emerging and growing trend in the recent past yet its size and growth pattern has been far inconsequential compared to other countries of Asia-pacific region. The industry has grown with an average annual rate of 6.5 to 7.5 % during 2002-2008. Domestic brands dominate the market accounting for more than 85% of total value sales of the industry. The industry as a whole can be divided between two broader sectors namely organized sector (branded segment) and un-organized sectors (generic segment). The branded segment is more of monopolistic in nature where there are nine prominent, active players in the competitive landscape of this sector. The branded confectionery and chocolate market is highly price elastic and growing with the bulk of sales concentrated in mid-price range products. Urban markets account for the major share and also for a higher penetration rate.
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The industry has faced “coin-barrier” issue in sugar confectionery products at least three times during last three decades when all key players unanimously agreed to increase their products’ price due to escalating prices of raw materials (first from 25 paisa to 50 paisain mid 80’s, than 50 paisa to Rs. 1 – in mid 90’s and lastly from Rs.1 to Rs.2-in late 2008) whereby the active players of the industry were compelled to raise their prices not less than any thing but 100% because next jump to coin / price denomination was such that they had no way out. It would be interesting for the readers to learn that such moves however have always been proved to be a “bitter pill” for the industry as it brought immense resistance from consumers and trade. In some of the cases decline in sales as a reaction of price increase was so huge that it forced to leading brands to take their decision back yet they were not able to retrieve their original volumes again. Mitchell’s Milk Toffees and Kidco 4ever are classic examples. To avoid and defer this situation (up to last extend) pro-active companies in Pakistani confectionery industry adopt three kinds of strategies, without reducing or with slightly reducing trade margins. Namely reduce the no. of units per pack, unit size, and packaging ( in an endeavour to reduce cost) Compromising in product quality by reducing qty and/or quality of expensive raw material by using close substitute that is available relatively at cheaper price as a replacement of expensive raw materials.
Distribution and Selling strategy: About (70-80) % sugar confectionery and chocolate sales generate through wholesale channel depending upon the nature of product and strategies of manufacturing companies. Almost all but precisely Hilal and B.P rely much on wholesale channel to generate bulk chunk of their total sales. To support their sales through this channel they advertise heavily on electronic media to create brand pull for their brands and subsequently it force retailers to buy these brands from whole sale. The underlying reason behind limited coverage in retail sector by these two companies is they do not have premium priced items that could yield sufficient revenues to make retail distribution viable for their distribution partners so they do a limited coverage in retail sector. Since these companies themselves do not emphasize on retail penetration so their distributors also take an escape route and adopt the way of easy selling through WS. However there are companies like Cadbury, Candyland, Mitchell’s and
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Mayfair that are fully aware of the importance of retail penetration .Hence these companies pay due importance and attention to retail coverage and subsequently allocate resources for retail sector. As stated earlier the emphasis of Hilal and B.P has always been on building consumer pull through mass media advertising (mostly through television) and pushing their brands through wide-spread network of distributors and wholesalers throughout the nation.
This combination of “Push & Pull “ has proved to be a successful tool in their cases because the nature of their brands also support this strategy as they produce products of mass market with as low price as Rs.1 , 2 and beyond. Because of this pricing strategy their products are equally popular in rural and urban towns among middle and lower middle class. B.P and Hilal having this advantage enjoy the benefits of a wide-spread distribution network in 300+ towns and over 350 distributors nation wide (as they have more than one distributors in some towns). They always try to adopt cost leadership strategy and generate revenues through high volumes of sales. Frequent launches, re-launches, re-introduction of old brands with slight modifications, withdrawals, adjustments in packaging, product designing and even recipe change are a common phenomenon in the brands of these two major companies. Contrary to this Cadbury’s , Candyland and Mitchell’s believe on establishing brands and brand equity and therefore protraction of quality up to last possible extend remains their top priority. Until mid 80’s chocolates was supposed to be the product of upper and upper middle class segment. In 1983 Mitchell’s Jubilee was launched first time in Pakistani market at Rs.3.50 per bar. Due to its attractive packaging, quality, affordable price and an intact media support the brand received un-matched reception and became a success story in Pakistani industry. The brand is still very popular among masses and available in three different price points at Rs.2, Rs.5 and Rs.10. In early 2000 Cadbury’s introduced quality products with affordable price. The launch of Dairy Milk (Rs.5/-), 5 Star (Rs.5/-), Velvet (Rs.5/-) and Perk (Rs.3) with attractive dispensing-chillers was the turning and revolutionary point for making chocolates the choice for every one. The role of Cadbury’s for expansion of chocolate market in Pakistan will always be written in golden words.
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Challenges: The most common challenges to this industry are soaring prices of raw material, high excise and import duties on raw material, high entry barrier because of strong monopolistic competition and influx of cheap imported brand through gray-Channels.
Cadbury Advertising Timeline their products:1867 Cadbury Cocoa Essence began advertising. They highlighted the purity of the product with the slogan ‘Absolutely pure, therefore best’. 1900 Cadbury gained the help of a popular artist Cecil Aldin to create a series of posters and press adverts to advertise their products. 1920s-30s Cadbury promoted their products through the war by creating the ‘Chocolate Mystery Man’ character. He gave out free gifts, but only if he could be found. 1928 Cadbury Dairy Milk poster campaigns began using the iconic ‘glass and half’ slogan and image to stress its high milk content. 1930s Cadbury’s status as the nation’s favorite brand becomes the most important feature of the company’s advertising. 1938 150,000 people went on the factory tour every year. It began in 1902 to link people more closely with Cadbury.
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1939 During the 2nd World War Cadbury Dairy Milk disappeared. Cocoa and chocolate was under government restriction and only rationed chocolate was sold. 1951 ‘The Bournville Story’, a film promoting Cadbury, was made and shown cinemas around the country. 1955 Cadbury Drinking Chocolate was one of the very first ads on commercial television in this year. 1957 Cadbury commissioned thirteen one-minute films shown as TV adverts. These ads described the harvesting of the Cadbury chocolate ingredient. 1959/60 Flake TV advertising began; it used the iconic theme of a woman sensually enjoying a bar of chocolate on her own. 1970-1974 Memorable television ads raised the sales of Cadbury Fruit & Nut and Whole Nuts by 73% . 1983 The Wispa Bar launched including televised ad campaigns featuring comedians and comic actors talking about the new bar. 1990 Cadbury World opened a £10 million replacement for factory tours. 350,000 people visited in the first year. 1996 Cadbury began a £10 million annual sponsorship of Coronation Street, reaching an audience of eighteen million people.
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2007 The Cadbury ‘Gorilla’ ad premiered, immediately becoming one of the most popular adverts in recent year. 2008 Cadbury and Schweppes demerged, splitting its confectionery and drinks business. 2009 Kraft made a surprise proposal to take Cadbury over for £10.2bn.
PRODUCTS OF CADBURY Past product of Cadbury 1) Amazin’ Raisin:Milk and plain chocolate covered nougatine and caramel bar with raisins1971-1978 were the glory days of the Amazin’ Raisin bar. Who can forget the cockney knees-up of a TV jingle: ‘It’s amazin’ what raisins can do/Full of goodness and it’s all for you/It’s got two kinds of chocolate and caramel too/And it’s got raisins and they’re good for you’. Try mentioning it to raisin fans of a certain age and see them come over all wistful.
2) Aztec:Milk and chocolate nougatine and caramel – a feast of a bar. Hugely popular when it hit the shops in 1967, Aztec made a big impact, with displays including a life-size cardboard Aztec warrior in 100,000 shops, and a lavish TV ad filmed at a real Aztec temple in Mexico. Alas, like its namesake, this mighty bar was conquered in the early 70s, making just a brief reappearance in 2000 – will its like ever be seen again?
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3) Boost Coconut& Boost Peanut:Milk chocolate covered bar with a toasted coconut and caramel centre. (19851994).Caramel and peanut bar covered in milk chocolate. (1989-1994) Launched in 1985, the mighty Boost evolved over time with various versions on sale including Coconut Boost and Peanut Boost. 2003 even saw a Boost featuring the caffeine-rich Guarana berry appearing on the shelves, as well as a Boost Glucose for extra energy. Vic Reeves and Bob Mortimer’s much-loved Lone Ranger ad (complete with surreal strap line ‘it’s slightly rippled with a flat underside’) was a classic of its time. Five Boys Milk Chocolate.
4) Milk chocolate bar:Launched in 1902 it was once the most famous chocolate bar in the world, with its five pictures of a five-year-old lad called Lindsay Poulton showing emotions from Desperation (no chocolate), to Realization (finding out he’s got Fry’s Chocolate). Apparently at the photo session, Lindsay wasn’t looking miserable enough for the first photo, so his father (the photographer) tied a cloth soaked in nasty smelling ammonia round his neck to achieve the ‘Desperation’ face! The bar was retired in 1976. 5) Fry’s Five Centers Five assorted fruit flavored crèmes. If you’ve tried Fry’s Chocolate Crème, imagine a bar like that but with five different flavored fillings: raspberry, lime, vanilla, coffee and orange. You’re imaging Fry’s Five Centers, which launched in 1934 but went to the great conveyor belt in the sky in 1992. Fuse Raisins, peanuts, crispy cereal and fudge pieces fused in delicious Cadbury milk chocolate.
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Fuse exploded into the UK marketplace on ‘Tuesday’ 24th September 1996. It was a chocolate bar with a difference – instead of having a chocolate coating on the outside; the yummy ingredients were suspended right the way through it. 40 million bars were sold in the first week, and within eight weeks it was the UK’s favorite’s confectionery. Alas, ten years later and Fuse fizzled off the shelves, but it’s fondly remembered to this day.
6) Inspirations:Textured fruit flavored centers covered in milk, white and dark chocolate. Inspirations launched in 1989, in a carton with sliding drawers. Initially highly successful, it was retired in 1998. 7) Lucky Numbers:In 1958 Cadbury launched a new assortment of chewy sweets, some covered in chocolate and some not. These Lucky Numbers each had an individual number on the wrapper, hence the name. The brand was retired in 1968. 8) Milk Tray Bar:Eight Milk Tray Chocolates, in a bar. Imagine a box of Milk Tray Chocolates. Now imagine picking eight of the most popular chocolates – keeping their distinctive shapes – and putting them in a bar! The Milk Tray Bar had a cult following back in the 1970s and people still reminisce about it to this day. It was originally launched in 1947 and was a favorite through to 1981. 9) Skippy:Milk chocolate with caramel and wafer centre launched in 1960.
29
‘It’s got a crunch in the biscuit and a munch in the middle’. A classic 1960s TV ad for Skippy shows a Swinging London couple getting off their scooter and going into a trendy coffee bar to pick up their Skippy.
TODAYS PRODUCTS OF CADBURY 1) Cadbury Celebration Cake with Buttons:Make your celebrations really special with a delicious chocolates treat. From the indulgent Flake Celebration Cake to the Cadbury Buttons Party Cake. Cadbury's ranges of Party Cakes are perfect for any special occasion. 2) Cadbury Hot Choc Chunks:Cadbury Dairy Milk unveils a yummy invention which heralds a new dawn for hot chocolate lovers: Hot Choc Chunks!. The chunks of real chocolate melt into milk to make a smooth delicious creamy treat! Cadbury Hot Choc Chunks is now Fair-trade certified. 3) Cadbury Clusters:Cadbury Clusters are tasty treats of crunchy flakes and juicy raisins tumbled in scrumptious Cadbury milk chocolate. They're wonderfully odd look odd, taste wonderful! Whether you fancy a daytime nibble to cheer you up, a little bit of evening indulgence or a bag to share with friends –Cadbury Clusters are ideal! Launched in 2009, they're now available across the UK.
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4) Cadbury Picnic:Crispy wafer and chewy caramel covered in peanuts, raisins and Cadbury milk chocolate. Picnic's been going since 1958 and you'll still find its nobly goodness in a shop near you. Probably one of the most memorable campaigns for the brand was one which featured a camel called Calvin which was singing a song about the 'chew' of the bar. In Australia it's marketed as being 'deliciously ugly'! How rude! 5) Dairy milk:The story of Cadbury Dairy Milk started way back in 1905 at Bourneville, U.K., but the journey with chocolate lovers in India began in 1948.The pure taste of Cadbury Dairy Milk is the taste most Indians crave for when they think of Cadbury Dairy Milk. The variants Fruit & Nut, Crackle and Roast Almond, combine the classic taste of Cadbury Dairy Milk with a variety of ingredients and are very popular amongst teens & adults. Recently, Cadbury Dairy Milk Desserts was launched, specifically to cater to the urge for 'something sweet' after meals. Cadbury Dairy Milk has exciting products on offer - Cadbury Dairy Milk Wowie, chocolate with Disney characters embossed in it, and Cadbury Dairy Milk 2 in 1, a delightful combination of milk chocolate and white chocolate. Giving consumers an exciting reason to keep coming back into the fun filled world of Cadbury. 6) Gems:Launched in 1968, Cadbury Gems has captured the fancy of children for more than 4 decades now. Supported by a number of popular TVCs since the Eighties, Gems is uniquely positioned because of its chocolate taste, colorful buttons and multiplicity. The taste and fun associated with eating Cadbury Gems and the joy of sharing it with friends has also made the brand a source of nostalgia for older consumers. Simply put, eating Gems brings happiness, fun and mischief to a kid's world. Which is why, Cadbury Gems has always had
31
Fun and Masti as the proposition in all its communication. Gems, available in a Pouch and a Carton, are also available in a Re. 1 pouch. A gem has continuously been relevant and exciting for consumers with salient messaging, contemporary packaging graphics, pack innovations and consumer promotions. In December 2000, the Gems Tube Pack with a flip-top was launched, which became an instant hit with kids. In succeeding years, the Tube Pack has continued to excite kids with different ball games on its flip-top. 7) BOURNIVITA:Cadbury was incorporated in India on July 19th, 1948 as a private limited company under the name of Cadbury-Fry (India). Cadbury Bournvita was launched during the same year. It is among the oldest brands in0 the Malt Based Food / Malt Food category with a rich heritage and has always been known to provide the best nutrition to aid growth and all round development. Throughout its history, Cadbury Bournvita has continuously re-invented itself in terms of product, packaging, promotion & distribution. The Cadbury lineage and rich brand heritage has helped the brand maintain its leadership position and image over the last 50 years. 8) CADBURY ECLAIRS:Éclairs was first discovered by a local confectionery firm in London, England in the 1960s. The firm then became part of Cadbury in 1971making Cadbury Éclairs the second largest brand in the company. The experience of eating a Cadbury Dairy Milk Éclair is truly unique because of its creamy caramel exterior and rich Cadbury Dairy Milk chocolate at the center. In 2006 Cadbury Dairy Milk Éclairs launched crunchy Éclairs with a hard caramel outside and delicious Cadbury Dairy Milk chocolate inside called Cadbury Dairy Milk Éclairs Crunch.
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CADBURY TOMMORROW The Cadbury new product department may not be staffed by mysterious elves or people who wave magic wands but it’s every bit as magical. We employ the very best new product people in the business and they spend all their working hours inventing, experimenting and playing with chocolate, and coming up with all sorts of weird and wonderful ideas. A great many of these ideas will never go further than someone’s desk; but the most delicious will end up on the shelves of your local shop. Our new product teams come from many different backgrounds. Some of them are master chocolates, some come from a professional catering background, and others are scientists. But they’ve all got something in common; a love and understanding of chocolate that borders on obsession.
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MARKETING STRATEGIES
Meaning:•
The marketing strategy is the means of achieving the corporate objectives.
•
It gives messages to the stakeholders, or publics. It says:
"This is where we are going", and
"When we will get there", and
"This is our stance".
Types of Marketing Strategy:-
34
•
One of the most fundamental issues which a company must decide on is the type of
marketing strategy, or approach, that they will adopt. •
There are three basic marketing strategies which any company can follow:
Undifferentiated marketing
Differentiated marketing
Concentrated marketing.
Undifferentiated Marketing: •
Here there is a standard, unchanged product and a standard, unchanged marketing effort.
•
This strategy can reduce costs (e.g. marketing, production) but will encounter wastage in promotional activity and possibly in distribution.
Differentiated Marketing •
Here the company segments its markets and offers modified products to different segments.
•
The marketing mix elements will also be modified to suit the requirements of the chosen segments.
Concentrated Marketing •
Here the total marketing effort is aimed at one market segment.
35
•
This strategy is really aimed at the exploitation of a limited market area and tends to be used by those companies who have highly specialised products. It is "niche marketing" by another name.
It is common for organisations with a diverse product range to use a combination of
all three strategies for different parts of their product mix
Marketing Strategies of Cadburys In order to increase sales Cadburys needs to undertake range of marketing activities before deciding upon the best way to encourage the purchase of its product. When identifying the basic principals which Cadburys must apply to its marketing will be its basic objectives because all business must have objectives it allows them to increase sales and make profit. Corporate aims are the long term intentions of a business, whereas corporate objectives are the specific targets required to achieve the aims. The common aim and objectives of the corporation such as Cadbury includes the following: 1. Survival 2. Profit maximization- which is often taken to be the reason why firms Exists and to be the primary objectives in practices most firms have hierarchy of objectives when a firms survival is threaten it may Profit maximized in order to restore its financial health. 3. Growth- which includes Cadbury selling new products or expanding Overseas.
36
4. Diversification- which is the spreading of business risks by reducing dependence on one product. 5. Sales maximization- which is the increasing of sales 6 Improving the product image-which includes creating a new logo or launching a new brand of product and creating more attractive packaging.
For example, Cadbury set out two objectives for the development of their chocolate, Fuse. These were: 1. To grow the market for chocolate confectionery 2. To increase Cadbury's share of the snacking sector
When launching a product the company Cadbury’s had to make sure that any new product in the snaking sector must establish point’s of difference, creating a unique selling proposition (USP) i.e. a product with unique appeal which is not shared by any of its competitors. Referring back to the example of Fuse, Cadbury lost a lot of money testing out the combination of various ingredients and more than 250were combined before the recipe of the chocolate was finalized. As the products are developed, Cadbury tests them to ensure that consumers are willing to buy them. Cadbury then promotes its products in various ways such as the use of above the line promotion, which is where a product is advertised through consumer media such as television, magazines, newspapers and radio.
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CADBURY INDIA TARGETS THE ADULT SEGMENT WITH CADBURYS DAIRY MILK:Cadbury India uses emotional appeals in advertising. The advertisements focused on the relationship between the parents and their children, where parents expressed their love by gifting the child a Dairy Milk.
CADBURY INDIA WANTS TO GET IN ROOT OF OUR TRADITION:If you can recall advertise which is now being frequently played in our radio station and TV channels “Mitha hai khana aaj Pehli Tarikh Hai”. Means Cadbury marketing strategy
in
India
wants
to
get
in
root
of
our
tradition.
Earlier if you can remember when we have first day of salary we bring some sweets to our home. Still most of family follows this tradition so; Cadbury has targeted this area now by its own creative marketing style...
38
When you get pass what you do? (We will have common answer "paide khilao", give sweets to all to express happiness) .. Remember the advertise "PAPPU PASS HO GAYA" Now Cadbury wants our traditional sweets to its "Cadbury Chocolates" Another one example of Cadbury marketing strategy... What you bring on Rakshabandhan? What you bring on Diwali? Again common answer "Mithai","sweets”, What Cadbury wants? Cadbury want us to replace this "mithai" with "Cadbury celebration chocolates". Their slogan is "kuch mitha ho Jaye" means when you want to eat sweets go for Cadbury :). In College campus it is deep routed now.. People used to bet for dairy milks, 5-stars. Cadbury has linked its brand with Friendship day, valentine day, mother’s day, father’s day and many other days. Cadbury has also entered into a strategic alliance with Face book and Orkut to further promote the core message of the brand. Cadbury’s has created a Facebook application that urges all Face book members to send invitation to their near & dear ones for what they wish to have this Diwali. This innovative marketing tool revolves around the central theme of the Diwali Celebrations Ad Campaign, ‘Iss Diwali Aap Kise Khush Karengey?’ Cadbury’s has extended its marketing strategy to the internet space and has launched an innovative & interactive website www.meethamoments.com wherein one can experience the meetha thought via sending of personalized e-greetings to their friends & family. It also allows visitors to view the latest commercials, listen to the radio spots from Cadbury and also find a link onto other internet applications.
39
Future Strategy In the branded impulse market, the share of chocolate in 6.6% and Cadbury’s share in the impulse segment is 4.8% factor like changing attitude, higher disposable income, a large youth population, and low penetration of chocolate (22% of urban population) point towards a big opportunity of increasing the share of chocolate in the branded impulse among the costly alternative in the branded impulse market.
It appears that company is likely to play the value game to expand the market encouraged by the
recent
success
of
its
low
priced
‘value
for
many
packs’.
Various measures are undertaken in all areas of operation to create value for the future. New channel of marketing such as gifting and child connectivity and low end value for money
product
for
expanding
the
consumer
base
have
been
identified.
In terms of manufacturing management focus is on optimizing manufacturing efficiencies and creating a world class manufacturing location for CDM (Cadbury Dairy Milk) and Éclairs. The company is today the second best manufacturing location of Cadbury’s Schweppes in the world.
Efficient sourcing of key raw material i.e. coca through forward purchase of imports, higher
40
local consumption by entering long term contract with farmer and undertaking efforts in expanding local coca area development. The initiatives in the terms of development a long term domestic coca a sourcing base would field maximum gains when commodity prices start moving up.
• Use of it to improve logistic and distribution competitiveness. • Utilizing mass media to create and maintain brands.
• Expand the consumer base. The company has added 8 million new consumer in the current year and how has consumer base of 60 million although the growth in absolute numbers is lower than targeted, the company has been able to increase the width of its consumer base through launch of low priced products.
• Improving distribution quality by addressing issues of product stability by installation of visit coolers at several outlets. This would be really effective in maintaining consumption in summer, when sales usually dip due to the fact that the heat effects product quality and thereby consumption.
• The above are some steps being taken internally to improve future operation and profitability. At the same time the management is also aware of external changes taking place in the competitive environment and is taking steps to remain competitive in the future environment of free imports, lower barrier to trade and the advent of all global players in to the country. The management is not unduly concerned about the huge deluge of imported chocolate brands in the market place.
It is of the view that size of this imported premium market is small to threaten its own volumes or sales in fact, the company looks at the tree important as an opportunity, where it
41
could optimally use the global Cadbury Schweppes portfolio. The company would be able to not only provide greater variety, but it would also be more cost effective to test market new product as well as improve speed of response to change in consumer preference through imports. The only concerns that the company has in this regard is the current high level of duties, which limit the opportunity to launch value for money products.
SWOTS ANALAYSIS OF CADBURY
1) Strengths:• The company has an already large established business in the Indian market. Since1824, the company has established itself as a world leader in the confectionary market. It has operated in India since 1948. In India it has about 70% of the confectionary market. In line with its vision, the company has been striving to Bethe world leader in the confectionary industry. Through innovation and strategic marketing, the company has acquired about 10% of the world confectionary market (Laura, 2008). • The company has good market reputation. With strong brands in the market, the company is well positioned in the market. In the Indian market Cadburys has strived to build a good market reputation. This has worked positively for its products. It is on this good reputation
42
that the market can embark on introducing the new brand in the market. Cadbury India was ranked the 5th most respected Indian company by Business world magazine in 2007 (Laura, 2008). • The target market is also quite large. With the female population marketing more than 56 percent of the Indian population, there is a wide target market for the product. The Indian chocolate market has been recording growth in the recent past and there are future prospects of growth. Therefore the target market is slowly expanding (Cadbury, 2008).
2) Weakness:• The target population is quiet large and there are fears the demand for the product may outdo the capacity of the company to satisfy the demands of the market. It is still not clearly established the rate of growth of the product in the market but there are expectation that the product will record a high growth rate. This means that the company will need to increase its production capacity in order to match the rate of growth of the market (Laura, 2008).
• The company has not been able to establish a distribution network in the country that matches the demands of the market. In this case the company has not established a distribution network to the interior due to infrastructural development issues (Cadbury, 2008). • Banking on the success of the other brands in the market may have negative effects on the introduction of the new brand in the market since the products will be targeting different markets (Cadbury, 2008).
3) Opportunities:-
43
• There company is introducing the brand in a less competitive market. This is unique opportunity for the company. A more competitive market becomes difficult to introduce a new brand because there are already other companies’ which are likely to bring in competition (Cadbury, 2008).
• The company can introduce the product in the market in unique way. With the growing importance of beauty shows, the company can host beauty competition in order to help the target market identify with the product. This will introduce the product in the market in unique way. The company can also host other events like sports or engage in corporate social responsibility activities like girl child education to help the target market identify with the product more (Laura, 2008).
• The company can use a wide range of marketing strategies which will lead to the overall growth of the product in the market. The Indian advertising market has been growing at a rapid rate which means there will be an array of opportunities for the growth of the market. There are many advertising strategies for the company in the Indian market (Cadbury, 2008).
4) Threats • There is threat of entry of other products in the market. In this case there are threats of entry of new products in the market which will increase the level of competition in the market. There are other companies which are likely to introduce the same products in the market once there is success of the initial product (Cadbury, 2008). • There is a threat of change of the current external environment which is likely to alter the nature of the market. For example change in the taxing regime, Government laws regulating the industry, and other factors which are likely to impact negatively on the industry (Cadbury, 2008).
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5 P’S Of Cadbury
1 - PRODUCT The average company will compete for customer by conforming to his expectation consistently. But the winner will surpass them by constantly exceeding his expectation, delivering to his door step additional benefits which he would never have imagined. Cadbury’s offer such product. The wide variety products offered by the company include: I. Chocolate & Confectionary 1) Dairy Milk 2) Fruit & Nut 3) 5 Star 4) Break 5) Perk
45
6) Gems 7) Éclairs 8) Nutties 9) Temptation 10) Milk Treat
II. Beverages III. Food Drinks 1) Bourn vita 2) Drinking chocolate 3) Cocoa
2 – Pricing Make no mistake. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. The strategy used by Cadbury’s is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them. Cadbury’s has launched various products which cater to all customer segments. So every customer segment has different price expectation from the product. Therefore maximizing the returns involves identifying right price level for each segment, and then progressively moving through them. Dairy Milk Rs. 15 Perk Rs. 10
46
5 Star Rs. 10 Fruit and Nut Rs. 22 Gems Rs. 10 Break Rs. 5 Nutties Rs. 18 Bournvita (500 gm) Rs. 104 Drinking chocolate Rs. 50.
3 - Physical Distribution – “Place” Distribution Equity: It takes much more time and effort to build, but once built, distribution equity is hard to erode. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility, hire the hottest strategies on the block, swamp prime television with best Ads, but the end of it all, you should know how to sell your products. The cardinal task before the Indian market in managing is to shoe-horn its product on retail shelves. Buyers are paying for distribution equity not brand equity and market shares. India – 1 billion people, 155 million household has over 4 million retail outlets in 5351 urban markets and 552725 villages, spread cross 3.28 million sq. km. television has already primed and population for consumption, and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. But getting their means managing wildly different terrains-climate, language, value system, life style, transport and communication network. And your brand equity isn’t going to help when it comes to tackling these issues. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. Once the stock product reaches retailers, the prospective customers can have access to the 47
product. Cadbury’s distributes the product in the manner stated above.
Cadbury’s
distribution network has expanded from 1990 distributors last year to 2100 distributors and 4,50,000 retailers. Beside use of TI to improve logistics, Cadbury is also attempting to improve the distribution quality. To address the issue of product stability, it has installed visit colors at several outlets. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heat affects product quality and thereby off takes. Looking at the low penetration of the chocolate, a distribution expansion would itself being incremental volume. The other reason is arch rival Nestle reaches more than a million retailers. This increase in distribution is going to be accompanied by reduction in channel costs. Cadbury’s marketing costs, at 18% of total costs, is much higher than Nestlé’s 12% or even pure sugar confectionery major Parry’s 11%. The company is looking to reduce this parity level. At Cadbury, they believe that selling confectionery is it like selling soft drinks.
4 - Promotion Effective advertising is rarely hectoring or loudly explicit…. It often both attracts and generates arm feelings. More often than not, a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. To penetrate into the inner recesses of customer memory, communication must first ensure exposure, grab his attention evoke his comprehension, grab his acceptance and then extract retention competing with thousands of other units of communication trying to do the same. Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. The strategic response addresses the emotional appeal of the band to the child within the adult. Naturally, that produced just the value vacuum that Cadbury was looking to fill. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful, unselfish conscious, pleasure – seeking child within him – and graft these feeling onto the Ad campaign like “Khane Walon Ko Khane Ka Bahana Chahiye” for CMD and “Thodi Si Pet Pooja – Kabhi Bhi Kahin Bhi” for Perk have been sure shot winner with the audience. 48
Whirl with the new launched temptations with the slogan “Too To Share” the communication resolves around the reluctance of a person who’s got their hand on a bar of temptation to let anyone else to have a bite. As well as outdoor and radio ads, ad agency contract has created communication for cinemas and even ATM machines for the brand.
All ICICI’s ATM a message flashes on the screen as soon as customer inserts his ATM card. It tells the customer that this would be good time to get out of his temptation since he/she is bound to be alone. Something familiar is planned for phone-book as well. In cinemas, Cadbury has a message on-screen just before the lights are dimmed to give them a chance to get their temptations. There will also be after dinner sampling in restaurants – to begin with, 30 catteries in Mumbai have been selected. The next round of activity will include the wafer-chocolate Perk and the Picnic bar, which has faced problems with its taste, because of the peanut it contains. Milk treat has also been launched in a module bar form, just in time of Diwali gifting market. Éclairs has got potential for much wide distribution, in a small sweets that airlines, hostels, and up market retail outlet offer to guest and customers. Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as spend
at
this
level
in
the
current
year
also.
Ad since any discussion today would be incomplete without mention ‘e’ word, the management plans to tap this new channel of marketing. Beside three company website (i.e.www.cadburyindia.com, wwww.bourvita.com, www.cadburygift.com) that the company has launched, it had also entered into various marketing relationship with other portals, specially targeted during festivals and events such as Valentines Day, etc…. It’s a combination of stiffing up its key brand, researching and improving the newer products that haven’t taken off, supported with high ad – spends that Cadbury hopes will see it
49
emerges stronger after the current slowdown, as well as expand the market.
5 – Positioning In the 1970s consumers were ready to pay “more for more”, and luxury goods flourished. In the 1980s, consumers began to demand “more for same”, and the discounting era grew strong. Today’s consumer demanding “more for less”, and the winner will be that super value marketers…. Some of today’s most successful companies recognize those customers are more
educated
and
able
to
recognize
true
customer
value…
Positioning is simply concentrating on an idea – or – even a word defines that company in the mind of the consumer. It is more efficient to market one successful concept to one large group of people than 50 product or service ideas to 50 separate group… repositioning is a must when customer attitude have changed and product have strayed away from the consumer’s
long
standing
perception
of
them…
Cadbury’s is an anchor in sea of confectionary products. As a variety of competitive claims assails her senses, today customer uses complicated decision making process to assess the alternative before making a purchase. Since Cadbury’s is more clearly associated with a particular set of attributes in terms of benefits and prices, the quicker becomes her search process.
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Positioning of individual product: 1) CMD: is and always remain flagship brand. The punch by the company for advertising this product life. ‘Real taste of Life’, itself defines the positioning of the product. The chocolate is meant for all age groups. It symbolizes fun, enjoyment, good items. It has goodness of milk, taste and appetite appeal. 2) 5 star: although positioned internationally as an energy bar, 5 stars were positioned on an emotional platform in India during the late 1980s. Symbolizing togetherness, 5 stars was originally targeted at teenagers. In June 1994, the company reworked the strategy for 5 stars to make it a source of energy. In fact, before the launch of Perk, 5 star’s energy bar positioning made it a snacking chocolate. 3) Éclairs: competing in the chewable toffees segment. Éclairs was re-launched during the mid-nineties with a new name, Dairy Milk Éclairs. 4) Gems: broadcasting Gems, though, didn’t prove to be feasible proposition for Cadbury. Targeted at children less than 12 years with ‘Gems Bond’ advertising. Cadbury decided to sell it to teenagers with the ‘Smart Very Smart’ campaign. But now, the company is retargeting children with its animated commercial. “Gems are the best brand to speak to children. Colorful chocolate buttons appeal most to children and that is why Cadbury is retargeting children.” 5) Crackle: it was the first Cadbury’s chocolate to have crunch in it. It was targeted as a funky chocolate to add spark to life.
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6) Perk: in September, 1995, Cadbury preempted the launch of Nestlé’s Kit-Kat by rushing a new brand, Perk into the market. Positioned much further on the functional scale of 5 stars, Perk was meant to be light snack-product for subduing the first pangs of hunger. 7) Bournvita: positioned as tasty health drink. While its competitors concentrated only on health with
aspect,
Bournvita
combined
the
nutritious
value taste.
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ADVERTISING THERIR PRODUCTS IN DIFFERENT WAYS The sales of product in the market depend upon advertising which is one of the factors that boosts the sales of the product in the market. Advertising can be in the form of print advertising, banner advertising, advertising on Television, radio advertising and of course advertisement on Internet. Over the last several years internet has emerged as a strong and successful platform for advertising a product by using different ways and methods to attract the attention of the customers. There are various ways to capture the thought process, which runs in the minds of the customers, and it is done on a regular basis through the medium of advertising. The purpose of running an advertising campaign is to generate the interest of new customers into the product, and to sustain the interest of regular customers in the product, so that there mind remains focused on the brand name and image of the product. Thus the advertisement of the same product can be seen simultaneously at many different places. Cadbury's advertisement can be seen during the late evening hours when different soap opera are broadcasted. Then on switching on the laptop to check the emails received during the day, the advertisement of Cadbury can be seen again, but of course, this time the form of advertisement i.e. size of advertisement is small, it looks like a teaser and the medium is different, here internet playing an important role. At weekend while going through the shopping mall the same advertisement of Cadbury can be seen highlighted in big posters and banners, giving more prominence to brand name, the product name and in order
53
to attract the customer's attention, theme of the advertisement also been a part of the poster, which also gets highlighted. Different brand names, different products and different ways of promoting the product. For Example:When Sun feast biscuits were initially launched, there was an aggressive advertisement campaign that was been done for the Sun feast biscuits by putting stalls at different places, where maximum number of customers come regularly, like for instance there was a stall of Sun feast biscuit at an exhibition which was been held on a ground, where there were number of different stalls and at the end when the customers are about to leave the exhibition there are different food stalls and refreshment stalls. Amongst the various different stalls in the exhibition, one stall was that of Sun feast biscuits and there were sizable number of customers, who were keen and eager to know more about Sun feast biscuits and some were even purchasing the biscuits. A few days later the same stall was seen at a shopping mall and now the number of customers were more than before. The reason being advertisements of Sun feast biscuits been shown on TV. Later on Shah Rukh was roped in for the advertisement of Sun feast biscuits and now Sun feast is a known to a large number of customers. Thus initially for any brand name it is important to gauge and know the customer's reaction, their opinion and views, and then slowly introducing the product in the market for the customers on a regular basis. So advertising here also plays a major role, banners and dangles must be attractive at the time of initial launch of the product. While advertising on the internet there are many customers, who visit the Cybercafe and obviously they also comes across the advertisements. So there are different ways to grab the attention of these customers. Many times prominent websites like MSN, Yahoo and
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other big names related to websites are roped in and then there is a different format which is used to make sure that the customers make a note of the advertisement and pay attention to the product details. Like for instance there is a Contest which is been conducted wherein the customer will have to fill in the small form which requires his Full Name, mobile number, Address and email ID. Once these details are filled in the customer has to make sure that he has given the correct answer to the question and then submit the form. This is where Cybercafe customers are concerned. Many a times during movies and during cricket matches there are online contests, which are conducted where the customer has to select the right answer by clicking on one of the four different options provided to him i.e. A, B,C and D and then SMS the right answer on the given mobile number. There are mobile compaines who have conducted these kind of contests, recently MicroMax has done this contest during cricket matches. Thus customers are always there, each individual customer has his own purchasing capacity, but when it comes to decision making by the customer with respect to brand names many times advertising plays an important factor in the process of purchasing the product. This happens at the time when the customer makes a final decision. Many brand names re-launch their products in the market depending upon the previous reaction received and upon the fact that what were the additional features that were required in the product because of which sales dropped. It is important that the customer knows about different brand names irrespective of the fact, which product, he buys at the end of the day. This is where advertising and promoting a product in the market plays a dominant role. Media Advertising- Use of available media channels, meaning cinema, TV, radio, press and the internet. In other words the Cadbury should focus on the media through which it reaches its primary target market-young people of age 16- 35. During the pre launch campaign Cadbury should not address the controversy; however it should make it clear that
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the product is not suitable for age below 15 and not advisable for pregnant women. This way the competition will keep their mouth shut and their will be no post launch negativism in Singapore. This will be done a month before the launch.
Segmentation, Targeting, and Positioning
Segmentation, targeting, and positioning together comprise a three stage process. We first (1) determine which kinds of customers exist, then (2) select which ones we are best off trying to serve and, finally, (3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.
Segmentation:It involves finding out what kinds of consumers with different needs exist. In the auto market, for example, some consumers demand speed and performance, while others are much more concerned about roominess and safety. In general, it holds true that “You can’t be all things to all people,” and experience has demonstrated that firms that specialize in meeting the needs of one group of consumers over another tend to be more profitable. Generically, there are three approaches to marketing. In the undifferentiated strategy, all consumers are treated as the same, with firms not making any specific efforts to satisfy particular groups. This may work when the product is a standard one where one competitor really can’t offer much that another one can’t. Usually, this is the case only for commodities. In the concentrated strategy, one firm chooses to focus on one of several segments that exist while leaving other segments to competitors. For example, Southwest Airlines focuses on price sensitive consumers who will forego meals and assigned seating for low prices. In contrast, most airlines follow the differentiated strategy: They offer high
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priced tickets to those who are inflexible in that they cannot tell in advance when they need to fly and find it impractical to stay over a Saturday. These travelers—usually business travelers—pay high fares but can only fill the planes up partially.
Targeting:In the next step, we decide to target one or more segments. Our choice should generally depend on several factors. First, how well are existing segments served by other manufacturers? It will be more difficult to appeal to a segment that is already well served than to one whose needs are not currently being served well. Secondly, how large is the segment, and how can we expect it to grow? (Note that a downside to a large, rapidly growing segment is that it tends to attract competition). Thirdly, do we have strengths as a company that will help us appeal particularly to one group of consumers? Firms may already have an established reputation. While McDonald’s has a great reputation for fast, consistent quality, family friendly food, it would be difficult to convince consumers that McDonald’s now offers gourmet food. Thus, McD’s would probably be better off targeting families in search of consistent quality food in nice, clean restaurants.
Positioning:The term “positioning” is widely used within the marketing and advertising communities today, and its meaning has expanded beyond the narrow definitions of Trout and Ries. Positioning is often used nowadays as a broad synonym for marketing strategy. However, the terms “positioning” and “marketing strategy” should not be used interchangeably. Rather, positioning should be thought of as an element of strategy, a component of strategy, not as the strategy itself. The term “positioning” is, and should be, intimately connected to the concept of “target market.” That is, a brand’s positioning defines the target audience. For example, an airline might position itself against other airlines, which defines the target audience as airline travelers. Or, it might position itself against all modes of transportation between two
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destinations, which then defines the target audience as all travelers between those two markets. The second positioning reaches out to a much larger target audience.
Segmentation of Cadbury: Right now Cadbury’s new advertisement campaign is doing the rounds over the television. “Meetha hai khana,aaj pehli tareek hai” is the tagline that the chocolate-giant has come out with. It tries to bring forth the excitement, which lies in the minds of the general public as they wait for the first date of each month on the calendar. The monthly salary stashed in their hands enables them to celebrate and rejoice by spending it on Cadbury’s Dairy Milk. Cadbury’s Dairy Milk has come out with such memorable ad-campaigns, which settled into the hearts of everyone. The story starts with “Once upon a time in 1948…” when Cadbury entered the Indian market. It originated from a town in the United Kingdom, Bournville (also the name of its recently launched high-end chocolate) in 1905. As the Cadbury’s official web site suggests, its journey in India has been an eventful one. In the early 1990s, it tried to cater to the sweet tooth of the children. Those days they steered the market and took control over the company’s major market share. However, the strategy changed by letting out the secret that “everyone has a child inside “ and thus everyone craves for the taste of chocolate. Cadbury strategies went through a considerable change. It now catered from children to adults and from chocolate to mithai. As the tagline goes “Khane walon ko kahne ka bahana chahiye”. The hole-in-one for the company was when it identified sweets to be a very integral part of the Indian culture. It made sure that the festive and jubilant moods of the society that had paved the way for kilos and kilos of mithai, now made way for a large number of Cadbury’s. 58
Meetha did to Cadbury’s what thanda had done for Coco-Cola. Both helped them crawl their ways through into hearts of the rural population of the country, which had an untapped and astounding potential. The advertisement campaign of Amitabh Bachchan, dressed up as a villager, proudly announcing that his “daughter-figure” won beauty contests for cattle, brought out the laughs and struck a chord with the same segment of people. Later came the campaigns of “Pappu paas ho gaya” acknowledged the market potential for college-going youth. The treats for passing exams were now a Cadbury instead of a mithai.With Kuch Meetha Ho Jaye, we knew Cadbury’s was now a desert craving as well as a popular gift-item for festivals such as Raksha Bandhan and Diwali. Cadbury’s also diversified its range of products with Wowie(with Disney characters for kids),Crackle, Fruit and Nut(variations of the Dairy Milk),Bournvita(health drink)Deserts,Perk(wafer ingredient) and éclairs(toffee segment). Cadbury’s today holds 30 per cent markets share in the confectionaries industry and sells around 1 million bars a day.
Targeting of Cadbury Cadbury is looking to attract millions of new customers by shifting its strategy to focus on low-income consumers. The British candy maker, which has been in India for more than 60 years and dominates the chocolate market, is making candy affordable to this massive untapped segment with products such as Cadbury Dairy Milk Shots--pea-sized chocolates, sold two to a package, for two rupees, or about four U.S. cents. These chocolates are encased in a sugar shell to protect them from the heat. "We seek to reach out to all of those consumers that are away from the cities and to sell [small] piece products at low price points," stated Cadbury chief executive Todd Stitzer. …
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Positioning of Cadbury Cadbury India has unveiled a new campaign that continues with the brand's 'Kucch Meetha Ho Jaye' positioning. Created by Ogilvy & Mather, the campaign revolves around the theme of 'Pay Day', which is associated with happiness by most people. Brand positioning is the aspect of the brand actively communicated to the target audience, specifically, its competitive advantage, values and imagery. It is strongly related to the perception and image of the product. When devising a positioning strategy for a product, marketers must establish a unique and distinctive image of that product in the mind of the consumer. This will differentiate a company’s product from its competitors.
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Amitabh Bachchan is Cadbury brand ambassador
Cadbury India Ltd has announced that mega star Amitabh Bachchan will be the company's new brand ambassador. He will endorse and promote Cadbury chocolates for a period of two years. As brand ambassador, he will play a key role in brand and product communication on television, in print and outdoor media. Cadbury has launched a strengthened, new 'purity sealed' packaging for Cadbury Dairy Milk. The new packaging for 13g (Rs 5) is double wrapped for maximum protection. The chocolate is wrapped in aluminum foil and enclosed in a poly flow pack, which is completely sealed on all sides. In the second phase, the larger Cadbury Dairy Milk packs will come in poly-coated aluminium foil, which will be heat-sealed and then wrapped in the branded outer package. Both these steps are a 'first ever' in chocolate packaging in India. "Over the last few months, we have had some cases of infestation due to improper storage conditions. As a company committed to ensuring that our consumers enjoy a pristine bar of chocolate each time, we decided to take steps to reduce dependency on storage conditions to the extent possible," said Bharat Puri, managing director, Cadbury India Ltd. "Cadbury will do everything it can to ensure that every bar of chocolate that a consumer buys comes full of goodness and rich taste."
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Commenting on Amitabh Bachchan as brand ambassador for Cadbury chocolates, Puri said, "There is a perfect fit between Amitabh Bachchan and Cadbury chocolates - their timelessness, and the love and trust they both share with the people across India, makes this an ideal partnership. Moreover, Mr Bachchan has a universal appeal that extends to everyone from 6 to 60, just as our chocolates do.
We believe his endorsement of Cadbury Dairy Milk will go a long way towards our objective of increasing chocolate consumption among all ages of consumers." Amitabh Bachchan said, "Most of you may not know this, but I have been a brand ambassador for Cadbury for the last 55 years. Only, now it is official. Bringing smiles, spreading happiness and joy amongst millions of people in India is what Cadbury and I shall be continuously working towards." The new 13g (Rs 5) Cadbury Dairy Milk packaging is currently available only in Maharashtra and the national rollout will take place over the next three weeks. New packaging for the larger bars of Cadbury Dairy Milk, Fruit & Nut, Crackle, Bournville, Caramello, and Double Deck will be completed in six weeks.
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Cadbury’s, Nestle lose market share to imported chocolates
COMPETITORS OF CADBURY There are no many competitors in the confectionary industry that Cadbury is Competing with. Cadbury is a market leader in the industry. The other competitorsare small compared to Cadbury and therefore the level of competition is expected tobe a bit low. Sales of imported chocolate brands, such as Mars and Snickers, have outpaced those of Cadbury's and Nestle's locally made chocolate in modern retail outlets, according to top retailers. As a result, these companies will lose their pricing clout. Imported chocolates are not only in demand but also offer bigger margins as compared with the locally made brands to retailers. Cadbury is already at loggerheads with the Future Group, the country's largest retailer, on the deals and margins it offers. Seeing the increase in competition, Cadbury India is also looking at introducing more sophisticated forms of chocolates from its global portfolio to boost consumption and retain market share.
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In our stores, the sales of imported chocolates are double the sales of domestic brands. Their sales are growing at triple digits. Imported brands offer newer chocolate formats to consumers, resulting in their higher demand," said Sadashiv Naik, CEO, Food Bazaar, Future Group. Echoing this view, vice-president (marketing) of Spencer's Retail Samar Singh Sheikhawat said, "Sales of imported chocolates has become equal in value to that of the domestic brands put together. Whereas the imported chocolates sales are growing at 100 per cent, made-in-India brands are growing at around 25 to 30 per cent." Anand Kripalu, managing director, Cadbury India, said, "The competition in the chocolate market has increased significantly. In spite of this, we have been able to hold on to our 70 plus per cent market share. We would look at introducing newer products to boost the consumption of chocolate in India. Chocolates are not consumed on daily basis, so we would look at positioning them for everyday consumption from being consumed only on select occasions."
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Conclusion:Over the last year, the Cadbury Chocolates brand has moved from being perceived as a Choclates for “younger person” to choice their Choclates for fun, enjoyment and love as well as for the “Elder person” also professionals. This has been made possible not just by new packaging but by a completere positioning strategy which changed the image of the brand and the perception of who can and should enjoy it. This company project has demonstrated “CADBURY’S COMPANY AND RESPECT TO ITS MARKETING STRATEGY” that has proved to be extensive through and of great benefit to the company in furthering its competitive advantages. In this project it possible to see the success of Cadbury’s in it’s indorse its strong potential to continue to do well.
RECOMMENDATIONS:• Maintain dominance in chocolate, confectionery and market leadership in brown drinks. • New channels such as gifting, child connectivity and value for money offering to be the key growth drives. • Grow volume of sales at least 20% p.a. over the next years. • Achieve the goal of best manufacturing location in Cadbury Schweppes world for Dairy Milk and Éclairs. • One new major product launch every year.
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Bibliography:1) www.slideshare.com. 2) www.cadburyworld.com. 3) www.docstoc.com.
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