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Cadbury 
 
Category: Case Study Analysis | Word(s): 12213 | Page(s): 49 | View(s): 526 | Rank: 0
 
Introduction

Ask a kid ‘what’s the occasion to eat the chocolate’, and pat will come the reply, nothing but still I want to eat it.

Chocolates as a segment thrive on excitement and innovation. And this segment has huge scope in India for the following few reasons.

Indian’s love sweets.

§ Younger generations of Indian’s are more comfortable with the idea of eating and sharing chocolate.

§ Affluence, and spending power of Indian consumers is increasing day by day.

§ Currently Indian markets offer huge potential as it has 2nd largest population base in the world.

§ Fast expanding large retail format is an added advantage for the chocolate segment, which is expected to further boost their sale.

§ For India chocolates is a new and happening concept, as against almost saturated chocolate market of west.

Presented below are few statistic’s about the various Impulse buying segment products’ and their market share.

§ Snack Foods Market Size : Rs 4500 crore (ET 26/02/07)

(Branded Snack Food Market :Rs 1300 crore( ET 26/02/07))

§ Soft Drinks Market Size : Rs 6000 crore (ET 21/02/07)

§ FMCG Market : Rs 64000 crore ( ET 07/02/07)

§ Chocolate Bar market size : Rs 350 crore

§ Ice cream market size : Rs 1000 crore

§ Carbonated Soft Drink Market size : Rs 5000 crore

Chocolate Market In India

Facts & Figures

ü Chocolate market is estimated to be around 1500 crores (Danielson) growing at 18-20% p.a.

ü Cadbury is the market leader with 72% market share in organized chocolate market.

ü The per capita consumption of chocolate in India is 300 gram compared with 1.9 kilograms in developed markets such as the United Kingdom.

ü Over 70 per cent of the consumption takes place in the urban markets.

ü Margins in the chocolate industry range between 10 -20 %, depending on the price point at which the product is placed.

ü Chocolate sales have risen by 15% in 2007 to reach 36, 000 tones according to one estimate.

ü The chocolate wafer market (Ultra Perk, Perk, Munch etc) is around 35 % of the total chocolate market and has been growing at around 13% annually.

ü As per Euromonitor study, Indian candy market is currently valued at around USED 664 million, with about 70%, in sugar confectionery and the remaining 30%, in chocolate confectionery.

ü Entire Celebrations range market share is 6.5%.

ü The global chocolate market is worth $75 billion annually.

Major Companies Operative in this sector

§ The chocolate market in India has only three big players, Cadbury, Nestle and Amul

§ New brands such as Sweet World, Candice and Chocolates are present in several malls.

§ The largest target segment for Cadbury is youth.

§ Candico India is aiming for 400 locations across malls and multiplexes in the country by 2010.

Companies & Brands

§ Cadbury - Cadbury, 5 Star, Bytes (chocolate snack), Celebration, Dairy Milk, Perk

§ Nestle - Bar One, Kit Kat, Munch, Nestle

§ Amul - Amul ( Chocozoo, Chocomines )

§ Dairy Milk is the market leader

§ 5 Star (heritage brand which came to India in 1969) has a market share of over 14%

External Environment

ü The prices of cocoa and milk, the chief ingredients used in chocolates, have gone up by 50 per cent, while the price of sugar, another important raw material, has come down. The overall input costs have gone up by 20 per cent. If the prices of these commodities keep increasing, companies will be forced to increase the prices. India imports most of its cocoa requirements. The prices of cocoa have risen globally due to unavailability of the commodity.

ü US-based chocolate-maker Hershey’s is mulling a foray into the Indian chocolate market through its joint venture with Godrej

HISTORY



Milk chocolate for eating was first made by Cadbury in 1897 by adding milk powder paste to the dark chocolate recipe of cocoa mass, cocoa butter and sugar. By today's standards this chocolate was not particularly good: it was coarse and dry and not sweet or milky enough for public tastes.

At that time there was a great deal of competition from continental manufacturers, not only the French, but also the Swiss, renowned for their milk chocolate.

Led by George Cadbury Junior, the Bournville experts set out to meet the challenge. A considerable amount of time and money was spent on research and, on new plant which was designed to produce the chocolate in larger quantities.

A recipe was formulated incorporating fresh milk, and production processes were developed to produce a milk chocolate 'not merely as good as, but better than' the imported milk chocolate'. Four years of hard work were invested in the project and in 1905 what was to be Cadbury's top selling brand was launched.

Three names were considered: ‘Jersey’, ‘Highland Milk’ and ‘Dairy Maid’. ‘Dairy Maid’ became Dairy Milk, and finally ‘Cadbury's Dairy Milk’, with its unique flavor and smooth creamy texture; was ready to challenge the Swiss domination on the milk chocolate market.

By 1913 Dairy Milk had become the company's best selling line and in the mid twenties ‘Cadbury's Dairy Milk’ gained its status as the brand leader, a position it has held ever since.

CADBURY SCHWEPPES



Almost 50 years back in 1783 Jacob Schweppes perfected his process for manufacturing carbonated mineral water in Geneva, Switzerland. And almost 10 decades back Cadbury was launched. By 1950’s both Schweppes and Cadbury were household names. They merged in 1969 to form ‘Cadbury Schweppes plc’. Since then they have expanded their business throughout the world by a programmed of organic and acquisition led growth.

Defining the taste of chocolate, Cadbury began its Indian operations as a trading concern in 1947. With brands like Dairy Milk, Gems, 5 Star, Bourn vita and Perk and now additionally with products like Celebrations, Bytes, Chocki, Delite and Temptations, Cadbury has, in the last five decades, become one with the word ‘chocolate’ in India.



CADBURY INDIA LTD.- ‘Life full of Cadbury’

Cadbury India Ltd. (CIL) is the wholly owned subsidiary of the leading global confectionery and beverages major -- Cadbury Schweppes. Cadbury began its operations in India in 1948 by importing chocolates and then re-packing them before distribution in the Indian market.

After 59 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, Kolkota and Chennai). The corporate office is in Mumbai.

From a trading corporation that began operations in India in 1947, CIL has become a market leader in the confectionary segment. Cadbury has a 70 percent market share in chocolates. Some of its brands are Dairy Milk, 5 Star, Gems and Perk


Current Figures:

1. Increased advertising, special pack format, and retail expansion; has lead to boom in chocolate market, maximum rewards of which are being reaped by the oldest player in the segment Cadbury.
2. Over last 2 years, Co’s sales have risen by almost 20% during each year, due to focus on marketing.
3. Large portion of adults across various social segments are seeing chocolate as a wonderful indulgent product eaten at same occasions as mithai.
4. In year 2007 demand increased significantly during the Diwali festival.
5. Cadbury holds 72% share of India’s Rs 12.3bn chocolate market in 2006, as compared to 24.&% of Nestle. – ACNeilson
6. Currently maximum sales are made through ’Kirana stores’. Co expects double sales in larger retail format as compared to that from local ‘kirana store’.

MARKET ANALYSIS

Under this segment we present, few opportunities and threats that Cadbury has and will be facing in Indian markets. Along with them we have also covered the current status of Cadbury, and also Indian confectionary market, under the facts.

OPPURTUNITIES

§ India has world’s second largest population

§ The world’s largest under-thirties population.

§ The country is spawning one of the world’s fastest-growing middle-class spenders with surplus incomes.

§ Compared to the West chocolate consumption in India is extremely low. Per capita consumption in urban India is about 160 Gms, as compared to 8 kgs in the UK.

THREATS

§ Chocolates are perceived as a foreign food, trying to mass-market chocolates – a foreign food – would equal the task of selling the proverbial refrigerator to the Eskimo.

§ Traditional substitutes like ‘Mithais’, which are domestically made, are easily available, and they have inexhaustible variety. Traditional sweets are inextricably intertwined with Indian religious, festive and social rituals and occasions, for e.g. In India when a child is born depending on the gender of the child sweets are sent out to friends and relatives, this way the receiving party can know the gender of the child even without any communication.

§ Chocolates are seen as fun and indulgence products.
§ Affluence levels are still very low across the country.

FACTS

ü Cadbury Dairy Milk (CDM) is Cadbury India’s biggest brand and is synonymous with chocolates in India.

ü Cadbury dominates the chocolate market in India with a 70% share of the market.

ü Cadbury Dairy Milk is its largest chocolate brand, which accounts fro a third of every chocolate bar consumed. It alone holds 30% market segment of Cadbury.

ü Approximately 2.7 million Cadbury bars sold each day CDM alone accounts for one million.

ü The size of the chocolate market in India is about 4,000 tonnes and is valued at Rupees 6500 million (US$ 130 million).

ü The category (Confectionary) is largely consumed in urban areas with a 70% skew to urban markets and a 30% to rural markets.

ü Overall industry growth is estimated at 2.5 % in the chocolates.

ü Cadbury has extensive sales network that reaches out to some 500-600,000 outlets directly and 1.5m outlets indirectly.

ü Cadbury has developed the taste of Indian palate for chocolate, over 60 years and this gives them tremendous advantage.

ü Euro monitor predicts that India’s retail market will grow by 28% between 06-10, this in turn will help to boost chocolate sales, because as a product this is more suitable to large retail foray, where displaying and selection is an easier task.

MARKETING MIX

Marketing mix is a combination of marketing tools that are used to satisfy customers and company objectives. Given below is a pictorial representation of the components of marketing mix and their function.




By using variations of these four components one have the ability to reach multiple consumers within your target market? For any product to be a success, right blend of the marketing mix components is very crucial. In the following pages we will have a look at this ‘Marketing mix’ of ‘Cadbury Dairy Milk (CDM)’ that is the flagship product of Cadbury. We will be covering the marketing Mix Cadbury used for CDM in India.

MARKET RESEARCH

Before coming out with any product, companies go in for market research, which is done prior to making and then launching the product, so as to understand what to make and whom to sell it too. As chocolates already existed in Indian market much research was not done about the product scope. However being a big brand in west it had to undertake research to identify whom to target with its product, and where to position its product. These two important components are covered under.

BRAND POSITIONING:

Initially when Cadbury entered Indian markets it was positioned as ‘Meant for kids’. With passage of time the brand positioning has changed to being a product which has emotional bond, and can be used as a medium for expression even amongst adults.

TARGET AUDIENCE:


Target audience of Cadbury’s has changed lot since 1950’s. With time as the brand and products have evolved, the target audience ha expanded to include everybody now.

Time period Age group Coverage

During 80’s 15-25 Urban population
Early 90’s 2-15 Urban
Mid 90’s 25-40 Urban
Late 90’s 15-50 Urban + Rural
Early 00’s 10-50 Urban +Rural
Latest >40 Urban + Rural

60-65 per cent of the consumers are 19 years and under

COMPETITION:

In Indian currently in Chocolate sector there are few players and big brands like Cadbury’s face medium competition. Main Competitors is Nestle, which holds 20% of the Indian Market Share. And second biggest competitor is Amul. Other competitors are in form of other snack options like ‘chips’ and ‘cold drinks’. Apart from this Cadbury does face the
problem of ‘fake duplicates’. This problem is usually seen in rural markets.

IMPULSE BUYING

When you go out sometimes, you might just feel like eating something, its not really hunger but just that you want to have something, so you buy something to eat, that’s called impulse buying.
In Branded Impulse market Chocolate confectionery has just 6% share. This offers huge growth opportunities.

Main categories in this segment are -

ü Ice creams
ü Wafers
ü High quality Biscuits
ü Soft Drinks
ü Chocolates

Now all the chocolate segment players are focusing is on grabbing a bigger share of the confectionary impulse buying segment. And they also seek to increase the share of confectionary in this impulse buying segment.

PRODUCT

The story of Cadbury Dairy Milk started way back in 1905 at Bournville, 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.

PRODUCT MATRIX

Presented below is the Product Matrix we have prepared based on our understanding of the product, and our findings from the customer survey conducted by us.

Sweet Gifts Snacks
Core Product Smoothness, Sweet, Taste, Quality Quality, Packing Quality, Easy to carry
Basic Product Shell Life, Safe Packing, Variety Variety, Shell Life Easy available
Expected Product Availability, Flavors Quantity, Value for money Low calories
Augmented Product Low Calories, Customer Service Personalization, Customer service Customer service

VARIANTS

For Adults and Teens

Ø The variants Fruit & Nut, Crackle and Roast Almond, combine the classic taste of Cadbury Dairy Milk with a variety of ingredients.

For Kids

Ø 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.

FEATURES

§ Cube feature is the most delicious of chocolates, providing consumers with the defining ‘chocolaty taste’.

§ Flavonoids in chocolate function as antioxidants that prevent the build-up of coronary arterial plaque, which is known to contribute to the development of heart disease.

§ Catechins, found in chocolate may also have anti-cancer enzymes; and they also contain heart-healthy benefits from the suppression of platelet aggregation and the reduction of oxidized LDL (the ’’bad’’ cholesterol) blood levels.

§ Cadbury Dairy Milk contains just 45mg of sodium in a 40gm block, whereas its closest competitor Nestlé has 80mg sodium in just 36gm block of chocolate. High level of sodium is harmful to heart, and can cause problem to BP patients.

§ Available in various convent unit packs, raging from Rs 1/- to Rs 100/-



Product Variety

Cadbury Lite



Finally a chocolate for the ‘Diabetic’. Later than sooner but, even Cadbury has recognized that there exist a substantial market of products for ‘health conscious’ and ‘health constraints’ consumers. Cadbury Lite is first ‘No sugar added’ product in Cadbury India’s portfolio. It contains no sugar, and uses a sugar substitute to compensate for sugar. Initially this product has been launched in Tamil Nadu and Andhra Pradesh only, to test market it, and it will be introduced around the country in a phased out manner.

40g bar = Rs 28/-

Cadbury 5 Star





Launched in 1969, it has hard cover outside with soft and chewy caramel nougat inside. How successful was this product, can be understood from the fact that during 70’s giving a 5 Star was considered by the young lover’s; as one of the best way’s to profess your love.

It is the second largest brand in Cadbury portfolio after Cadbury Dairy Milk, holding 14 % market share.

It has created and maintained its distinct identity by associating itself with the classic golden color.

Its campaign’s have ranged from ‘Deliciously rich’ in70’s to 'lingering taste of togetherness' & 'Soft and Chewy 5 Star' in the late 80's. Central theme of the campaign’s was always the product format be it the ‘richness’, or the ‘chewy ness’.

It has always continued to innovate, coming out with variations like Cadbury 5 Star Crunchy, which contained rice crappies which made it more crunchy and provided variety for 5 star consumers.

Cadbury Perk




What can you say about a brand that launched few of the most well know faces of Hollywood; not much. Till last count 4 of Hollywood actresses, Priety Zinta, Raageshwari, Gayatri Joshi, and Amrita Rao were all the finds of Cadbury Perk. This was launched as recently as just a decade back, and it was the first informal entry of Cadbury into the casual snacks segment, which was predominantly demented by wafer etc.

Perk had also stretched itself to variants such as Mango, Strawberry and Mint to generate some excitement around the brand.

Its campaign ranged from, “anytime, anywhere” in 90’s to “kanhi bhi, kahi bhi”; signifying its changing positioning. Latest being “Baki sab bhoola de”

As this product contained significantly less chocolate content as compared to 5 Star, and Dairy milk, to make it more value for money, Cadbury introduced more variants in form of Perk XL, and Perk AXLE.

Also to increase sales, smaller variants ‘Perk Minis’ (2003) priced at Rs 2/- were also introduced.



Cadbury Celebrations

As the name suggest, this product has been introduced to celebrate the occasions, ranging from ‘achievement’ to ‘festivals’. It basically contains an assortment of chocolates and comes in different variants like premium and super premium chocolates.

Slowly and steadily this brand is gaining some round in the traditional festivals gifting segment, however it has shown better performance in the corporate gifting segment, where this concept has caught on much better.

Because the production aimed for gifting purpose its campaign has been designed to touch the emotional cord of the customers, by using the tagline “ rishto ko pakne do”. Tohfa campaign was introduced for this product during the last year’s Diwali.

Currently the product is being marketed through 1 lac outlets in city with 1 million plus population. And it is being offered in various variants ranging from Rs 50/- to Rs 200/-

Nestle was first MNC to tap this category with a product called ‘Mithai magic’, about a decade back.

Cadbury Temptations



This product is aimed at those consumers, who prefer the darker and broader variety of internationally flavored chocolates. It has been designed for more discerning chocolate lovers, and it basically niche market product.

As the target market for this product is very specific, it does not require much advertising, and campaigns are launched as and when the need is felt for the same. Currently the product is positioned as “too good to share”.

Cadbury Bytes



Cadbury’s foray into the ever-growing Indian snacks market has been formally marked by the launch of Cadbury Bytes in 2004. Traditionally Indian snacks market has been composed of only salty snacks, and Cadbury saw the untapped potential of sweet snacks, and introduced this product.

As this product was radically opposite of what typical Indian snacks represented, Cadbury leveraged its brand on the same concept, positioning it as the product that sleeked to break the traditional stereotype, by targeting it at the teenagers with the tagline “Snacking ka meetha funda”.

This product has been introduced in 3 variants; regular, coffee, and Caramel. During the course of time the regular variant has emerged to be the most successful of the three.

Similar to all other brands of Cadbury, even the ‘Bytes’ range has been introduced in two price range that of Rs 5/- and Rs 10/-

PACKAGING

§ ‘First ever’ in chocolate packaging in India.]

§ Originally Cadbury Dairy Milk (CDM) was wrapped in Golden Paper and then the paper cover.

§ CDM is now available in new ‘Purity Seal’ packaging which includes aluminum foil enclosed in a sealed poly-flow pack.

§ Larger CDM's are available in poly-coated, heat-sealed aluminum foil wrapped in the branded outer package.

§ For kids across India, the word ‘Cadbury’ is synonymous with chocolates. It’s a classic example of a brand coming to symbolize a product category. But even this doesn’t quite capture the warmth with which people immediately think of Cadbury Dairy Milk at the very mention of the word ‘chocolate’.






PROMOTION

With passage of time the target audience and perception of Cadbury as a product, and a brand has undergone tremendous change, and this has been backed by constantly evolving promotion strategies, based on the changing target audience, and market dynamics.



Brand Values

Cadbury Dairy Milk stands for purity

Purity of emotions, feelings and expressions. Research has shown that not only is the color purple strongly associated with Cadbury's, but also the Cadbury logo itself has the highest recognition of any logo among popular consumer brands. The 'glass and a half ' emblem, the corporate purple and the flowing script have all become synonymous with this outstanding and wonderful brand.

BASIC FEATURES OF PROMOTIONAL STRATEGIES OF Cadbury Chocolates

§ Use of emotional appeals in advertising.

§ Customer surveys as a means to align the advertisements with evolving consideration sets of customers.

§ Packaging as a tool to communicate quality.

§ CDM advertising has always depicted a rich tapestry of human emotions and relationships.



STRATEGIES OVER TIME for CDM

During 80’s

‘Sometimes Cadbury can say it better than words’, campaign aimed at promoting Cadbury as the perfect expression of love’,

Early 90’s

CIL’s marketing communication campaigns for CDM were targeted at kids. The advertisements focused on the relationship between the parents and their children, where parents expressed their love by gifting the child a Dairy Milk. Also CDM emphasized its international identity, communicating that it was the ‘real taste of chocolate’.

Mid 90’s



‘Real taste of life’ campaign was targeted at adults, to expand the chocolate market and increase sales. This campaign created a dramatic shift in the way chocolates were perceived. CDM has increasingly become trapped as a reward or bribe for children and this campaign unshackled the brand by re-positioning it to the ‘free-child’ in every adult.
CDM redefined itself as the perfect expression of spontaneous, shared good feelings, providing the ‘real taste of life’ experience. The strategy paid off: Brand Cadbury grew by over 50% in sales volumes.

Late 90’s

‘Khaanein waallon ko khaanein ka bahana chahiye’ featuring Cyrus Broacha, CDM aimed to substantially increase penetration levels, this campaign was aimed at popularizing consumption in a social context, especially in more traditional settings like weddings.
In tandem with this campaign, another award winning ‘Kuchh khaas hai...’campaign was launched The media strategy was to let the two co-exist towards a common vision: A Cadbury in every pocket. The brand penetrated into smaller towns and sales volumes grew by 40%

Early 00’s

‘Jab Pappu pass ho jaye kuchh meetha ho jaye’, this campaign focused on promoting Cadbury as a sweet to celebrate occasion of students passing the exam. In India joyous occasions are always celebrated and commemorated with the sharing of sweets. Based on this Cadbury’s marketing campaign aimed at multiplying the occasion for consumption, in order to compete with local sweets.When Pappu finally passes his friends pass out chocolates – the addition of another joyous occasion to be celebrated with CDM. This campaign proved to be a very large success, as the catch line became a part of street language, which helped Cadbury to expand its user base and also contributed in strengthening consumer affinity with the brand proposition of celebrating joyous occasions with CDM.

Toady it has become a phrase to express happiness irrespective of the occasion, and with the line, everybody instantly recalls the brand. This strategy has immensely helped in increasing brand recall of Cadbury and also connecting with younger audience, by using their language. bagged a Bronze Lion at the prestigious Cannes Advertising Festival 2006 for 'Best use of internet and new media

Latest

“Kuch meetha ho jaye” the latest campaign which features Amitabh Bachchan, targets all the audience and aims to promote Cadbury, as a product to satisfy your sweet cravings. Normally in India if older generation feels a craving for sweet, they would seek out some type of ‘Mithai’, this latest Ad campaign aims to promote Cadbury as a substitute to that ‘Mithai’ for the older generation.
The Campaign shows that how convenient it is to get a Cadbury, and at the same time by using 60 year old Amitabh Bachchan it aims to connect with its target audience which is mainly the older generation.



Latest Promotions for other brands:

Cadbury Celebration

During last year Diwali, Cadbury came out with the ‘Tohfa campaign’. This campaign was consciously designed in such a manner so as to keep away from the ‘gifting for festival’ segment; because this product was facing dip in non-festive seasons. The core message of the ad is that ‘Chocolates speak volume about a person’s taste, and therefore go a long way in strengthening relationships.’

Cadbury Bytes

After launch this product was advertised heavily to create awareness and reach out to the segment it was designed for. This product was aimed at the younger age-group of 15-25 yrs, and hence the campaigns were designed so as to interest them. The ad campaigns were designed to communicate the uniqueness of the product, and emphasis how it’s different from the herd. The tagline ‘Har snack namkeen nahi hota’ caught on very quickly and made the brand recall very high.

Cadbury Perk

This product has been in the market for almost a decade now, and we can clearly see the change in its positioning strategy reflected in its ad campaign’s. When introduced the product was promoted as a snack to satisfy ‘hunger pangs’ quickly. With time the campaign’s chance to be

Unique Advertising Media used

TVC, print advertisements, radio jingles are all tried and tested media of advertising; but the major drawbacks of these are that none of them can reach out to the customer when he/she is actually going to make the purchase of the product. Hence to improve their customer connects, and make sure that the customer never forgets the option of Cadbury; the company has come out with innovative advertising media’s. Few of these media’s are mentioned below.
v Metal Dispensers: This can be called as the purple salesperson for Cadbury’s. It can be found in almost every shop stocking their chocolates. Since it is placed on the cash counter, its design offers visibility, ease of vending, and protection from the elements. It is also placed in the most appropriate position to cater to the impulse buyers.
v Refrigerator (Visicoolers): During summers product spoilage is high, so they are stored in refrigerators, this decreases the product visibility, hence Cadbury came out with their own refrigerators, so as to help maintain visibility while maintaining their product quality.
v Jars: These are provided to small outlets, where they are prominently displayed. These have been very successfully used in rural areas, and smaller towns, where usage of Jars to store product is still very prevalent.
v Vending machines: These high visibility machines are provided at busy locations, and places like college’s and other impulse buying locations.

Advertisement Trends (AdEx - division of TAM Media Research)

§ Chocolate advertising rose by 30 per cent during January-November 2007 compared to January-November 2006

§ Maximum chocolate advertising was during Raksha Bandhan across 2005 and 2006 and January-November 2007

§ As expected chocolate advertising skewed towards kids channels and regional (General Entertainment Channel) GEC took the second position

§ Cadbury India Ltd rules chocolate advertising on television

§ 17 per cent more advertising during third quarter 2007 (Raksha Bandhan festival) compared to first quarter 2007

§ Regional GEC took the second place with a 21 per cent share ad volumes of chocolates, followed by Hindi movie with 13 per cent share during January-November 200

§ Among regional GEC, maximum advertising of chocolates was on Malayalam and Bengali channels

§ Cadbury India Ltd was way ahead of its peers with 66 per cent share followed by Nestle India Ltd and Parle Products Pvt Ltd during January-November 2007

§ During January-November 2007 the number of new chocolate brands advertised decreased to seven from 12 during 2006

§ Nestle Munch Pop Chocolate led the chart of new chocolate brands advertised on television during January-November 2007



OTHER STRATEGIES

Enhanced reach, affordability and visibility by advertising and promoting at new avenues like

Ø Malls
Ø Multiplexes
Ø College Cafeterias and Restaurants.

The interactive campaign

Under “Pappu pass ho gaya” campaign, Cadbury had a tie-up with Reliance India Mobile service and allowed students to check their exam results using their mobile service and encouraged those who passed their examinations to celebrate with Cadbury Dairy Milk.
This campaign also bagged a bronze Lion at the prestigious Cannes Advertising Festival 2006 for best use of internet and new media.

Vintage packs

In 2005 Cadbury Dairy Milk celebrated 100 years of its existence. To commemorate the occasion, limited edition vintage packs of CDM were launched in India. These packs contained the following chocolates of Cadbury Dairy Milk

Ø Pink Cadbury (Strawberry Flavor) 1905

Ø Cadbury Dairy Milk Chocolate 1915

Ø Cadbury Dairy Milk Chocolate 1935

Ø Cadbury Dairy Milk Chocolate 1961

Ø Cadbury Dairy Milk Chocolate 1980

Launched 3 direct websites

§ cadburyinida.com
§ bournvita.com
§ cadburygift.com
Visibility is created every where to promote Cadbury products near schools and other places.

Events such as Diwali and Valentine Day were great success for gifts

Cadbury India has tied up with leading coffee chain Café Coffee Day for direct sampling of the product in top cities



In 2003 with BPL Mobile and E cube Cadbury launched SMS enabled chocolate vending machine.

BRAND AMBASSDOR

Today there is fierce competition n, and life is very fast paced, to market any product you get just 10 seconds, if you make an impact you might have a potential customer or else nobody is going to look at you. And at such times having a ‘Right’ Brand Ambassador is what can give you the edge over your competitors. This is a brief description about the brand ambassador of ‘Cadbury Dairy milk’, and why was he chosen.

Amitabh Bachchan:



The superstar of Indian cinema, he needs no introduction, his work and popularity speaks for him. He has a huge fan following, and anything that he endorses is sure to be a success.
Cadbury had appointed him its brand ambassador for a period of two years, in 2004 now his contract has been renewed for another 2 years.

Why him:

A question arises, that chocolates is perceived as a product which ‘kids’ or at the most’ young people’ consume then how does a 60 year old Amitabh Bachchan fit the image of ‘Right’ brand ambassador?
Well the answer lies in the question itself, this perception of chocolate being a product for young is what Cadbury is seeing to change.

· Hence a 60 year old Brand ambassador, to target the 60 year old audience.

· Plus the company believes that the reputation Mr. Bachchan has built up over the last three decades complements their own, which was built over a period of 50 years.

· And as a bonus he will appeal everybody right from 6 to 60 years of age.

Preity Zinta:


Another one of the biggies of Bollywood. A name that brings to mind the image of young and bubbly girl, whose ‘perk’ factor is unequaled by anybody else’s.

Why her:

This question has the most obvious answer. Preity Zinta is the most perfect brand ambassador Cadbury could find for its ‘Perk’ brand, as the actress embodied the very character of the chocolate, as best as any individual could. Perk = peppy+ crunchy. Preity = peppy, and bubbly.

· She’s the perfect example of product matching, celebrity image and temperament. So masses made easy association, needed at time of launch.

· She is associated with all the characteristics that the brand associates it with. Her ‘Bubbly’ image has endeared her to the ‘Perk’ customers, allowing them to instantly identify her with the brand, and the brand with her.

CONCLUSION
Cadbury’s strategy to attract consumers is somewhat unique because, instead of focusing on the product, it seeks to tap into emotions normally associated with chocolates. They have also adapted their strategies to the unique demands of the Indian retail sector. The strategy has clearly proved successful, as they have been able to build and maintain a leadership position in the market with many loyal customers.

PLACE


Once a product is made it has to be made available to the customers, at their convenience. This is done by distribution process. Cadbury has always aimed to be present in a variety of locations and occasions in the consumer's life space - which requires constant application to extend its reach. Covered below are the basic features and the setup of the distribution chain of CDM.

BASIC FEATURES OF DISTRIBUTION CHAIN OF CHOCLATE SECTOR

ü Number of retailers: High

ü Retailers Investment in form of Capital: Low

ü Retailer Investment in form of Working Capital: Low

ü Retailers sale: Low

ü Manufacturer retailer relationship: Low

Cadbury has embarked on a strategy which involves increased consumption of its products through, which it feels can be attained by creating new markets, widening the depth of its distribution network and working towards a comprehensive portfolio with brands across all price segments.

DISTRIBUTION SET UP

Company—wholesaler – Stockiest – sub-stockiest -- Retail Outlets

DISTRIBUTION STRATEGIES

§ Cadbury currently reaches 0.6 million retail outlets, as per estimated figures.

§ Penetrate into smaller towns through Regional Distributors:- Sub-stockists.

§ Growth has come from new channels of Chocolate distribution centers in

Ø Railway stations,
Ø Malls,
Ø Gifting mix, etc.
Ø Vending Machines, which have been a vital part of sales and distribution network internationally and have a high growth area.



PRICE

Any product is made, then promoted and them made available to public at place of their convenience to generate ‘Profits’.

Out of the 4 P’s of Marketing Mix, ‘price’, is the only P which gets in money, rest all 3 P’s drain the money out of the company. Hence having this P right is what will be very crucial for the company. Covered below are the strategies and features of this 4th P of CDM.

BASIC STRUCTURE

§ Per unit (pack) value (Rs): Low

§ Volume: High

§ Per unit Margin (Rs): Low

§ Seasonality: Low

SMALL IS BEAUTIFUL

Small has indeed proved to be beautiful for Cadbury. The company, has found exceptional success in the launch of small packs of Cadbury Dairy Milk chocolate,

PRICE HISTORY

Initially when CDM was introduced in Indian market, it was priced at Rs 15/- per pack, because the market and audience was quite small, and also the chocolates were imported and re-packaged in India, which added to their cost.

Then CDM, was launched in packs of 26 gms priced at Rs 10/- in 1990’s, this increased the market base of CDM, and helped to increase market penetration.

In 1998 Cadbury came out with Rs 5/- packs of CDM, which greatly improved the market penetration e priced and lead to more people eating chocolate. These small packs increased the chocolate volumes of Cadbury by 19%, and market share by almost 2%.

Now Cadbury has introduced CDM in Extremely economical Rs1/- and Rs2/- packs. This will help it get down to the rural masses.


OTHERS

§ Cadbury India (CIL) ranks 3rd in Cadbury Schweppes (CS) in terms of profit (PBIT). U.K., Australia, Canada are ahead of India. Currently CIL is focusing on the following points to become the internal leader.

§ Double digit growth in turnover

§ Doubling profit every 4 years.

§ Lower Factory & Administration costs, which it has achieved and will continue improving.

§ Reduced interest costs by 0.5% by superior management of operating funds

§ Tight control over capital expenditure & working capital efficiencies

Raw Material

Cocoa constitutes 35% (+) of Raw material cost (incl. packing costs). Judicious procurement of cocoa is critical for the business. 50% of total requirement is imported, while balance 50% procured domestically. Domestic cocoa market is becoming competitive. Cocoa price is sensitive to -

ü International prices

ü Local availability

ü Import policy & Duty Structure

Domestically Cadbury has created its Cocoa suppliers in Kerala, by distributing Coca seeds amongst kerala’s farmers. This initiative of the Company has been whole heartedly supported by the government, as has proved to be mutually beneficial to both the company as well as the farmers, who in some places of Kerala are getting total yield of just Rs/-11000, in a year.

COMPETITION

Just like any other company in any other sector, Cadbury too faces competition in the chocolate sector. From our survey we could identify two major competitions is in form, the global player ‘Nestle’ and the Indian player ‘Amul’.

Cadbury reigns over the Indian Chocolate market as undisputed leader having over 30% share in Indian chocolate market. And over 70%+ share in organized chocolate market of Indies as per AC Neilson survey.

In Snacks segment currently Cadbury is into the ‘Sweet snacks’ segment which has very few player in form of Cadbury and Nestle only. Apart from sweet snacks, major competitors in snacks segment are chips like lays etc, and other unorganized segment players, as this segment is major held by unorganized players only.

Apart from these two in chocolate segment Cadbury faces competition from other products like biscuits, ice-creams, and cold drinks, because as we have already seen that chocolate is a impulse buying product, and all the products in this segment are vying for a larger share f this segment as it contributes significantly to sales and revenue.

Let us first look at the core competitors of Cadbury Chocolates that is Nestle and Amul.



About Nestlé – ‘Health bhi, wealth bhi’

Switzerland-based Nestlé S.A. manufactures a wide variety of food products from chocolate to frozen dinners to pet food. In addition, Nestlé is one of the most prominent bottled water companies in the world, and also produces personal and health care products. Nestlé SA, employs 247,000 people and reported sales of over $80.7 billion in 2006. The company also owns 26 percent of L'Oreal.

Controversies

Nestle has been involved in various controversies ranging from aggressive marketing of infant formula in countries where potable water is scarce, to being involved in child and forced labor problem. These controversies have from time to time, and still continue to affect adversely the sale of Nestle products in certain parts of the world.



NESTLE INDIA COMPANY HISTORY

Presented below is a brief history of Nestle India in relation to its confectionary business,

1959

ü On 28th March, the Company was incorporated at New Delhi. Nestle Alimentana S.A. promoted The company through a wholly owned subsidiary, Nestle Holdings Ltd., Nassau, Bahama Islands.

1989

ü The name of the company was changed from `Food Specialties Ltd to `Nestle India Ltd.' on 24th March.

1990

ü During the year company entered into chocolate business by introducing Nestle premium chocolates.

1994

ü Launched POLO

1995

ü During the year company launched Kit Kat manufactures at the new factory at Ponda, Goa.

1997

ü After the success of Kit Kat and Polo, Nestle India has launches its first product in the hard boiled sugar confectionery market, Allen's Splash.

2004

ü Nestle India in June, signed Rani Mukherjee as brand ambassador for its chocolate brand Nestle Munch and the advertising campaign with her was launched.

NESTLE INDIA

Nestle as a company has always focused on health and wellness platform, and keeping this in mind they have designed d all their product ranging from kids nutrition (Cerelac) to chocolates (Kitkat).

Chocolate Profile

Presented below is a brief overview of the chocolate profile of Nestle India

General:

Nestle Chocolates are much lighter and easier on calorie content, as compared to the other plain chocolates like Cadbury, etc; due to wafer content. This lightness has been the USP of Nestle chocolates, which has endeared it to the health conscious chocolate lovers across the country.

Kit Kat – “Have a break have a Kitkat’


The four-finger bar, with its unique crispness has been the brand ambassador for Nestle India. This wafer-based chocolate has been designed to just satisfy the hunger pangs, and be used as a snack product.
“Have a break have a kitkat” signifies the lightness of the chocolate, signifying that it’s not meant to satisfy whole appetite; just cater to your snack time needs.
Kit Kat is meant to be as light sweet wafer snack, as against Cadbury chocolates which are heavier. Cadbury introduced ‘Perk’ to beat competition.

Kit Kat Lite



To further focus on this segment of health conscious people only, Nestle introduced this product. It was a two-finger wafer bar, with 50% less sugar, designed specifically for the calorie conscious. This product has been specifically developed for India.
It is available in two-finger format at MRP of Rs 7/- in major metros.

Nestle Milk Chocolate


Similar to the Cadbury Dairy Milk, this is plain chocolate variant of Nestle. This contains milk, as the name suggests. As Nestle always focuses on healthy eating, the chocolates have been enriched with milk, to provide higher nutrition content. This product has found special favor with kids.

Munch – ‘ Can’t stop Munching’



Was introduced in 1999 to counter ‘Picnic’ from Cadbury. This product on introduction lead to some serious cannibalization of the Kitkat market, due to which Nestle was forced to take immediate price revision measures to ensure that both the products catered to different segments.
Hence Cadbury introduced ‘Perk’ to beat kitkat comp, because now more and more customer is becoming health conscious.

Kit Kat Chunky



Nestlé has always focuses on healthy eating, and hence they consciously stayed way from the heavier variety of plain chocolates, but this type of chocolate has huge market in India. Hence to expand horizon’s Nestlé introduced this new product in Indian markets.
The new Kitkat chunky is mainly meant for younger population who want more filling variety of chocolate.

Munch Pop Chocs



Indian snack market is very large, and has numerous players; but there is one area that had no competition, that is of ‘Sweet snacks’.
Hence Nestle saw the opportunity and immediately grabbed it by introducing ‘Munch Pop Chocs’ for snacking, to combine the sweet eating habits of Indians with the snacking idea.
As ‘Munch pop Chocs’ was launched. Cadbury came out with ‘Cadbury bytes’ which has been designed on similar lines.

Nestle Bar-one



This product of Nestle is on similar lines as the 5 Star of Cadbury. Bar-one has caramel nougat with a choco layer. Although quite similar to Cadbury’s 5 Star, Bar-one of Nestle has not met with much success.
It has been relaunched with more spunkier and trendy packing, and a fresher look. Its tagline reads ‘Time for Action’.

MARKET LEADERSHIP

In wafer based chocolate segment Nestle has always been the market leader wit products like ‘Kitkat’ and ‘Munch’.

Whereas in case of plain chocolate Cadbury has maintained undisputed leadership over tee years with a market share as high as 70% as against 20% of its next closest competitor Nestle.

In case of sugar boiled confectionary both Cadbury and Nestle are almost at par in respect to market share.

FINANCIAL DATA

Presented below are few key financial figures of Nestle India, from which we can observe that the company has been growing at a steady rate.

Key Figures CY04 CY05 CY06E CY07E

Net Sales (Rs m) 22,276 24,769 27,553 31,178
EBITDA (Rs m) 4,510 5,220 5,593 6,506
PAT (Rs m) 2,809 3,293 3,655 4,529
PAT Growth (%) (2.5) 17.2 11.0 23.9
EPS (Rs) 29.1 34.1 37.9 47.0
PER (x) 38.8 33.1 29.8 24.1
EV / EBITDA (x) 24.2 20.6 19.3 16.3
EV / Sales (x) 4.6 4.1 3.7 3.2
RoE (%) 85.9 99.5 102.9 118.0
RoCE (%) 56.3 65.0 65.2 72.7

Category-wise sales

Categories Volume (tons) Value (Rs m)

Q1 CY06 Var % Q1 CY06 Var%
Milk Products
and Nutrition 26,004 2.7 3,193 8.1
Beverages 5,525 (13.9) 1,472 0.3
Prepared Dishes 16,917 16.1 1,320 21.2
Chocolate & Confectionery 8,332 20.0 1,226 17.5

Total 56,778 6.6 7,211 10.0

Observations

ü Growth in Kitkat and Munch, were the key drivers of growth for confectionary during Q1CY06.

ü Chocolate and confectionery growth was primarily led by the 20% yoy climb in volumes while realizations slid 2.1% yoy due to greater sales of lower-priced units. In chocolates and confectionery,

ü Nestlé is following a strategy of introducing low-priced units and increasing penetration of products. This is expected to have led to higher volume growth and lower realizations
Special focus on Brands where Nestle beat Cadbury

Nestle Munch



Munch is the second largest brand in the chocolate based confectionery segment in India. It is also the largest selling SKU in the industry. Munch was launched by Nestle to counter the brand Picnic from Cadbury. But now Munch survived and Picnic is dead.

Positioning:
Munch is positioned as a tasty brand Munch was launched by Nestle as a price warrior. The brand is positioned based on its taste. Munch uses the tagline " Can't Stop Munching" to promote its taste as the USP.

Price:
At Rs 5, the brand became a blockbuster success cannibalizing Kit Kat and forcing Perk to launch a low priced variant.
This was also prime factor behind the brand's success. Rs 5 always enthused the customers to make that impulse purchase.

Product:
Munch is an any time consumption product. The product is a wafer layer covered with delicious chocolayer. The product quality was just right for the price. The wafer layer parents made the parent’s feel that their kids are not eating too much chocolate.

Promotion:
In 2004, the brand roped in the Bollywood actress Rani Mukharjee as the brand ambassador. The brand is promoted heavily across the visual media

.

Innovation:
Munch is brand which has been innovating to keep the excitement going. Munch earlier had come out with a Coconut variant .
Another major innovative variant was the Munch Pop Chocs. Pop Chocs are chocolaty nibbles in the form of wafer cubes.

Brand Ritual:
Like Kit Kat, Munch is also trying to create a Brand Ritual. The ad asks the customers to Take a Munch Pop Chocs, Twist it and Pop it into the mouth.
Amul



Amul (Anand Milk Union Limited),
Was formed in 1946, is a dairy cooperative movement in India. It is a brand name managed by an apex cooperative organization, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.6 million milk producers in Gujarat, India It is based in Anand town of Gujarat and has been a sterling example of a co-operative organization's success in the long term. The Amul Pattern has established itself as a uniquely appropriate model for rural development. Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world. It is also the world's biggest vegetarian cheese brand

Amul's product range includes milk powders, milk, butter, ghee, cheese, curd, chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, basundi, Nutramul brand and others. In January 2006, Amul plans to launch India's first sports drink Stamina, which will be competing with Coca Cola's Powerade and PepsiCo's Gatorade

Amul is the largest food brand in India and world's Largest Pouched Milk Brand with an annual turnover of US $1050 million (2006-07). Currently Amul has 2.6 million producer members with milk collection average of 10.16 million litres per day. Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries. Its bid to enter Japanese market in 1994 had not succeeded, but now it has fresh plans of flooding the Japanese markets. Other potential markets being considered include Sri Lanka.

Dr Verghese Kurien, the chairman of the GCMMF, is recognized as the man behind the success of Amul.

Amul, The ‘Priceless’



The brand name derived from the Sanskrit Word ‘Amoolya’ which means ‘priceless’, Amul has almost conquered the Indian market with its ‘Utterly Delicious’ products like Amul Butter / Ghee / Cheese, Amulspray, Amul Chocolates & Ice Creams, Nutramul, Amul Shakti etc. Amul

After the worms controversy of Cadbury, the Amul’s Echlairs and Fruit & Nut Chocolates, manufactured by Gujarat Cooperative Milk Marketing Federation, are no doubt a major hit in the market !

Amul Chocos

Amul has launched pure milk chocolate bars, the Badam bar chocolates which are completely made of Badam and the Fruit & Nut chocolate bars.

Fruit & Nut Chocolates

“First Impression is the Best Impression” – this Fruit & Nut Bar is packaged in a pleasant dark ink blue color (a trademark color for all bar chocolates?) on the upper half and a nice-looking yellow color at the bottom shining wrapper with colorful prints of nuts and dry fruits which makes its appearance very special and catchy!

Nutty

As the name suggests, the chocolate is rich in dry fruits and crusty nuts which makes eating this crispy and crunchy choco bar a very delightful experience.

Creamy

Rich in chocolate cream, jus’ running your already mouth-watering tongue on this yummy chocolate flavor itself is exceptionally enjoyable! The chocolate bar is entirely made of chocolate flavor without wafers, but the nuts and fruits make it very crunchy and youthful!

Ingredients

This Completely Choco Bar is made up of sugar, cocoa butter, milk solids, chocolate mass, cocoa mass and permitted preservatives and has been carefully manufactured meeting all the requirements under the PFA for Boiled sugar confectionary.
Current Strategy

Amul is reworking its strategy in the chocolate category to push its chocolate product sales. Although, the company has maintained a chocolate portfolio for more than 20 years, it has always been recognized as a dairy major only, and has never posed a threat to market leaders such as Cadbury and Nestle. Now, with a new product portfolio, the home-grown foods giant is planning to create a space for itself.

§ Identify the market gaps and try and fill them, by introducing variants like, sugar free and Choco Zoo, both of which have been appreciated by the consumers.

§ Now Amul intends to concentrate on the niche segment when it comes to the chocolate range, by focusing on shape-based chocolate segment. Amul has the potential to be the leader in this segment.
§
In the overall category, Amul has a market share of roughly 10 per cent compared with 70 per cent share of the market leader, Cadbury.

OTHER COMPETITORS



Cadbury faces competition in chocolate segment from these 3 major competitors. But apart from being a Chocolate, as we have seen earlier Cadbury is also a snack, and it competes in the ‘Impulse buying’ segment, with various other products like ‘Chips’, ‘Ice-creams’, ‘Cold drinks’, and other snacks.

We have been able to identify that as snacks Cadbury faces competition from mainly chips, and other salty snacks. Traditionally Indians have associated Snacks with Salty, hence altering this perception, and making the consumers more open to the idea of sweet snacking is a formidable task.

In the snacks segment we found that chocolates do not directly compete with chips as snacks, but Cadbury Bytes is in direct competition of the other salty chips available in the market. These are mainly ‘Lays’, ‘Bingo’, and other unorganized sector players.

We analyzed the chips major’s strategy in brief and were able to find out that on introduction of Cadbury Bytes, Lays came out with no major change in marketing strategy. Because they did not perceive Cadbury to be as a real threat. And Bingo was introduced later than Cadbury, to combat this introduction Cadbury focused on increasing their visibility through more advertisements, and promotional campaign.

Currently only Cadbury Byte is the real introduction of Cadbury in the Snacks segment, and for this product Cadbury seeks to tap into the, ‘Ignored’ sweet snackers segment, so as to garner better sales. In this segment, Cadbury faces main competition from ‘Nestle Pop Chocs’. And to tackle this competition Cadbury has focused on more targeted and specialized marketing programs.

EYE OF STROM for Cadbury

In October 2003, just a month before Diwali, customers in Mumbai complained about finding worms in Cadbury Dairy Milk chocolates. Cadbury's found itself in the eye of a storm, which seem to be quite big.

EFFECT

The heat of negative publicity melted Cadbury's sales by 30 per cent, at a time when it sees a festive spike of 15 per cent.

Cadbury's advertising went off air for a month and a half after Diwali, following the controversy.

Consumers seemed to ignore their chocolate cravings.

DAMAGE CONTROL

Immediate Measures:

Cadbury issued a statement that the infestation was not possible at the manufacturing stage and poor storage at the retailers was the most likely cause of the reported case of worms.

Cadbury moved quickly to bear the cost of damage.

In October itself, within 2 weeks of the incident occurring, Cadbury's launched project 'Vishwas' - a education initiative covering 190,000 retailers in key states.

Further Measures:

Cadbury revamped the packaging of Cadbury Dairy Milk, by investing up to Rs 15 crore (Rs 150 million) on imported machinery. The metallic poly-flow was costlier by 10-15 per cent, but Cadbury didn't hike the pack price.

The company upped ad spends for the Jan-March quarter by over 15 per cent. It roped in brand ambassador Amitabh Bachchan to do some heavy duty endorsement putting his personal equity on the line for the brand.

RECOVERY

ü The recovery began in May 2004.

ü By June, Cadbury's claimed that consumer confidence was back.

STRATEGIES USED

· Cadbury’s took crisis head-on, and did not try to act or make the problem look insignificant.

· The nature of the relationship that Cadbury's has built with the consumer helped it, because customers saw it as a lapse, not a breach of trust - this difference is key. What Cadbury's set out to deliver, it goofed up once but it seemed to be very sincere in its intent to get things right."

· “One must not let the consumers confidence erodes." Working on this principles; substantial investment and changes were made, to maintain consumers complete faith in the company. The company was sure that it wanted to maintain customer confidence, whatever maybe the cost for doing so.

· The company’s repackaging exercise, which used a combination of packaging technologies, was unprecedented in the category. With the redesigned packaging in place, the company decided to communicate the measures it had taken to safeguard quality standards. To add credibility to its pitch, Cadbury took recourse to Bachchan’s deep baritone. The commercial had done wonders to consumer confidence.

· Cadbury's had a sweet recovery from a crisis, and continues to lead the Indian chocolate market with over 70 per cent market share.

CONCLUSION

Cadbury Dairy Milk is one of the most famous product in the Indian market. From being a product meant for kids, it has evolved tremendously to become a product that’s accepted across all age groups. The company has achieved the right marketing mix for CDM, and the results are for all to see.

Today chocolates mean Cadbury Dairy Milk in India, that’s how successful the product has been made. And after studying the strategies of CDM, we have noticed that the main ingredient of the unprecedented success that Cadbury has achieved in Indian market is ‘Constant change and up gradation’.

Constantly evolving promotional strategies, covering wider markets through better distribution, and making the product more and more economical, has made the product such a big success.

So to the success of Cadbury. “Kuch meetha ho jaye”.

Consumer Trends

§ ‘Mithai’ the traditional Indian sweats is getting substituted by chocolates among upwardly mobile Indians. Instead of buying sweats on Raksha Bandhan, sisters prefer offering chocolates to their brothers. This is the reason for sudden spurt in advertisement between July & Sep by most of the companies

§ The range and variety of chocolates available in malls seems to be growing day by day, which leads to lot of impulse sales for chocolate companies.

§ Chocolates which use to be unaffordable, is now considered mid-priced. Convenience over Mithai in terms of packaging and shelf life in making both middle class and rich Indians opt for chocolates

§ Designer chocolates have become status symbols. They are linked to one’s aspiration and lifestyle and malls are perfect points of sale as people usually are happy and gay at these destinations

§ Cadbury initial communication for Celebrations was concentrated on occasions like Diwali and Raksha bandhan. Over the last seven to eight years, the brand emerged as a good gift proposition for occasions and enabled people to come closer. Research done by Cadbury suggested that they should extend the plank of occasion-based gifting to social gifting i.e. all-year-round gifting options

§ Consumers can choose from wide range of chocolates, which initially was limited to Milk chocolates like DairyMilk and MilkyBar. In past few years we have seen so many SKUs with almonds, raisins and all sort of nuts. And how can we forget latest 5 star crunchy and Ulta Perk, which has opened new windows for consumers

§ In past, consumers had negligible inclination for dark chocolates. But now we have seen a change in the Indian palate, which is increasing the base of this sub-segment

§ Chocolate sales have risen by 15% in 2007, clearly indicating that Mithai is losing flavor with the Indian consumer while; chocolate is capturing consumer taste.

§ Hundreds of mall sprouting across India, mithai shops are conspicuous by their absence in many of them.

§ Up to a few years ago, Nestle and Cadbury were the only brands available. While the two leading brands are doing better than before, new brands such as Sweet World, Candico and Chocolates are present in several malls.

§ The manager at one of the leading food and grocery store having outlets in several malls said they had wanted to stock mithai during the Diwali season but decided against due to quality control and how to keep mithai fresh.

§ Mithai is made from milk, lentils, flour, ghee and other ingredients. It cannot be packaged like other foodstuffs and different types of mithai have different shelf life. But the interesting thing was that few customers asked them if they stocked mithai. On the contrary, they had chocolates in Diwali gift packages, which were lapped up by consumers. Thereby hangs a tale.

Finding from Customer Survey

1. The following message’s have been perceived from the advertising campaign of CIL.
Ø Dairy Milk as a celebration medium
Ø Celebrate everyday happening with Dairy milk
Ø Cadbury Dairy milk as a sweet.

2. Based on the customer survey we found that the brand Image of CIL has been defined by the customers using following words.
Ø Reliable/ trustworthy Co 51
Ø Innovative products 45
Ø Hi-class/ Premium product 35
Ø Wide range of product 27
Ø International Brand 38
Ø Popular Company 36
 
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