Cadbury Gems Repositioning Porters 5 force model Porters Five Force Analysis of Cadbury provides a deep insight into

the various aspects which influence the companys structure and growth. Threat of new entrants The constant change in the market structure, shares and prices, due to the emergence of new chocolate manufacturers, demonstrates a threat for the existing chocolate and confectionery companies like the Perfetti, Parle, Ravalgaon, Nutrine & Parrys, etc. But for a giant like Cadbury such t hreats are of no substantial value since it is such a big and reputed company. In fact Cadbury itself becomes an exceedingly bigger threat for the upcoming companies. Thus there is no question of rising competition and dispersion of the customers across all these new manufacturers. Therefore this factor does not significantly affect the total turnover of Cadbury. Recent reports of US chocolate major Hershey entering the Indian market is not worrying the company because a lot of home work in terms of knowing the Indian consumers, brand building and wide distribution network needs to be done by it. At the same time, the rivals should never be taken for granted as this is an evergreen sector with ample profit margins and with potential initial investments and appropriate market analysis any emerging company can spread its wings to become a huge success. Another threat which could possibly affect sales of the Cadbury is the threat of substitute products or services. Now, if the general eating habits of the consumers are taken into consideration, substitutes would definitely point out at the sweets dominantly omnipresent in the Indian market. Festive seasons witness a big sale in both sweets and chocolates. Advertising and a strong market analysis during such peak periods helps a company in making profits. It should be noticed that even cookies, carob confections, ice creams and the other bakery products like cakes and pastries present themselves as a good substitute for chocolates. In todays health conscious world fruits and other natural products are rising up to become a substitute for chocolates. (Good housekeeping)

Another important force is the - Bargaining power of supplier. It is the pressure that the suppliers can impose on sources for inputs that are needed in order to provide goods or services. Supplier bargaining power is likely to be high when, the market is dominated by a few large suppliers, the switching costs from one supplier to another are high, threat of forward integration by suppliers and the buying industry has low barriers to entry. Cadbury seeks high quality, great value and excellent service from all of its suppliers. Hence, it has formed an Ethical Sourcing Program which is a fundamental element in ensuring that the standards are met at every step in the supply chain. Also, Cadbury is developing a Supplier Diversity Program to enhance its supplier base and ensure that it reflects the markets they serve. Cadbury itself selects such suppliers who deliver the best overall value; value that consists of competitive pricing, technological foresight, customer service excellence and the ongoing achievement of its supply chain and material standards. (C.S-supplier) Some what similar to the above would be another force which is Bargaining power of the buyers. Customers bargaining powers are likely to be high when they buy in large volumes, when they have knowledge about the production cost and most importantly when there are other potentially competitive companies selling the same type of product at reasonable costs. Cadbury faces tough challenge in this aspect as the customers are very well aware of all the above factors. Cadbury has thus designed the overall strategy to maintain its market dominance along with targeting the impulse buyers. (Hinduonnet) The most important force amongst all the Porters 5 forces is the - Rivalry among existing firms. Cadbury currently faces tough competition from the international giants like the Nestle and Hershey's and national giants like the Amul and Campco. The company profit is inversely proportional to the intensity of rivalry. But it is observed that Cadbury has always welcomed strong competition (like that from Nestle from past 7-8 years). Cadbury believes that strong competition increases the market pie. This confidence is very well reflected from

that fact that, despite Nestle launching its famous "Kit Kat" brand, Cadbury India has maintained its market share. Brief history & Company profile Cadbury India Ltd. is a part of the Mondelz International group of companies and is in the business of creating a delicious world - producing delectable chocolate confectionaries, gum and candy products, and popular beverages and foods, that include many of India's most popular and trusted food brands. Cadbury in India began its operations in the year 1948. After 60 years of existence, it has got 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. There are 4 major segments under which the Cadbury operates Chocolate Confectionery, Milk Food Drinks, and Candy and Gum category. Cadbury has maintained its undisputed leadership in the chocolate confectionery segment enjoying over 70% of the total market share. Cadburys Dairy Milk is considered as the Gold Standard for chocolates in India. Cadbury India Ltd. is a subsidiary of the Cadbury Schweppes and employs over 2000 people across the country.

Current position, Growth rates and the future outlook for the Industry

The chocolate market in precedent years has been witnessing tremendous growth in terms of value as well as volume. The governance of market is maintained by large international giants through franchisee and expansion into new markets which is leading to the growth of the chocolates market in India. Indian chocolate industry has registered a growth of 15% per annum from 2008 to 2012 and is projected to grow even at a higher rate in future. The industry has a positive outlook due to phenomenal growth in the confectionery industry, rising per capita income and gifting culture in the country.

the per capita consumption of chocolates is increasing in the country which will continue to flourish the market revenues. It is expected that India chocolate industry will be growing at the CAGR 23% by volume between the years 20132018 and reach at 3,41,609 Tons. The dark chocolates are expected to account for the larger market share when compared to milk and white chocolates in the coming years. The introduction of medicinal and organic ingredients in the manufacturing of chocolates had lead to a new trend and development in the country, which will be adapted by major manufacturers to remain active in the market. Competition levels, competitors in the Industry and their product offerings The Indian chocolate market is getting bigger and better. On one hand there are imported varieties and on the other companies like Cadbury launch their own products of international standards. In India in early 90s market share of Cadbury was 80% but after the Nestle enters to Indian Chocolate industry the Cadburys share reduce to 70%, 15% share is hold by Nestle, 15% by Amul and other companies. The higher competition is between Cadbury and Nestle as Nestle is trying to have tough fight with Cadbury.

Major competitors & Their product offerings

Nestle
o

Milky Bar

o Bar One o Crunch o Kit Kat o Munch o Nutties Amul o Milk Chocolate o Fruit n Nut o Fundoo o Bindaaz

o Almond Bar

Campco o o o Campco Bar Cream Krust Turbo Treat

Marketing Mix Of Cadbury

After segmenting the market and positioning itself to outdo their competitors, it needs to come up with different strategies. The 4 Ps used by Cadbury are: Product: The Company should design and manufacture its products so as to improve the customer experience. Product Success The meaning of Product is anything tangible or intangible that can be offered to the customers for the proposed market segments either in the domestic or international market. It includes packaging, guarantee, quality etc. Every company will compete for customers by satisfying their expectation constantly. But the best company will go beyond the expectations by delivering additional benefits, which they would have never imagined. Cadbury offers a wide variety of products which include:

I. Chocolates: Fruit & Nut, Dairy Milk, Perk, 5 Star, Eclairs, Gems, Temptation, Nutties, Milk Treat. II. Beverages: Drinking Chocolate, Bournvita and Cocoa. III. Snacks: Bytes IV. Candy: Halls V. Gums: Bubbaloo Place: The place means to identify the physical distribution of the product where the product should be available for the customer at the right place, time and quantity. It also consists of roles of channel for distribution.

For the success of any product in the Indian market, the product should be introduced to the retail shelves. Buyers play an important role for its success rather than brand and market shares. With the increase in technology and competitive pressure, it is difficult to retain a unique product for a long period. The brand that gets the greatest number of customers, sells the most products. Proper channels of distribution also play an important role. If the product reaches the market at the right time, only than will the consumer will have access to the products. Increases in distribution and channel cost go together. Marketing cost of Cadbury is 18% of its total cost which is higher as compared to Nestle and Parry. Price: Pricing is the most important part of a marketing mix as it is the only area by which revenue is generated for the company. Price includes the catalog prices, discounts available and different options available for financing etc. Before deciding the price strategy the feasible reactions of the competitors are also have to be taken into consideration. The pricing of the product must consider the appropriate demand-supply equation. The strategy used by Cadbury for satisfying the value that all the customers buy the product is using the expectation they have about how much the production is worth to them.

Cadbury has introduced various products for different customer segments so that every customer segment has different expectations of price from the product. Therefore maximizing the returns includes maintaining right price level for each segment and then increasing moving through them. Promotion: Where and when can you get across your marketing message to your target market? Effective advertising attracts and generates supporting feelings for any business. To reach out to the consumers, communication plays an important. For the marketing of any product, advertisement and promotions are the best means of communication about the product to the end user. Cadbury does its promotions

through Televisions, consumer contact activity, etc. Some of the most famous marketing campaigns of Cadbury are: Khane Walon Ko Khane Ka Bahana Chahiye for Cadbury Dairy Milk Thodi Si Pet Pooja Kabhi Bhi Kahin Bhi for Perk Cadbury gives special promotional offers during festivals like Diwali, Holi, etc. and special occasions like Valentines Day. It continuously introduces new products to maintain its brand and to expand its market share.

Marketing Strategy of Cadbury To encourage the consumers Cadbury uses many strategies. Some of them are as follows:

On Every Hand Everywhere: The customers demand flawless services from the salesmen and they have to deliver that to the customers. Cadbury is the market leader in confectionery and chocolates. Their sales team plays an important role in the success. They regularly conduct surveys of consumers choice and requirements. They deliver the products not only in the super markets but also in the small shops, so that every segment of the customers can easily get their products. They also provide selling techniques.

Growing with Emerging Markets: Revenue of the company grows with the emerging markets. They continuously modify the products to fulfill the requirement of all segments of consumers. This strategy leads them to a growth of above 20% annually for the past three years.

A strong foundation: Since 1948, Cadbury is serving their products in India and they have created a very strong tradition and leadership position. They are the number one chocolate brand with a share of about 70%. Today only one third of the population buys the chocolate so Cadbury is challenged to introduce the pleasure of Cadbury to many peoples. Growing with the market: To attract the broader range of consumers is the main target the Cadbury. They created a base range of their acceptable chocolate brands at more reasonable and affordable price. They also introduced

the gift range products for the customers segments with high-income group. Functional advantage: Cadbury Bournvita was launched in India in 1948 and it always required providing nutrition that helps in the development and growth. Today the natural goodness of milk, chocolate and malt is prepared with vitamins A, B1, B3, B6, B12 and C, plus protein, iron, calcium, manganese, zinc, and folic acid. It is also known as a cup of confidence. Affordable luxury: Cadbury has increased their presence in the candy in the form of halls and Cadbury dairy milk Eclairs. Eclairs became more popular in the markets with a hotter climate. The consumers find the delicious taste of chocolate in the middle that easily melts in the mouth and not in the hot climate. It is also an affordable chocolate for everyone. The new Eclairs Crunch is with more crispy caramel shell for hot climatic conditions.

Volume led growth strategy Cadbury has followed a well-planned strategy of fuelling volume growth by introducing smaller unit packs at lower price points. Simultaneously, the company seems to have astutely juggled with the larger pack sizes and raised prices to a degree higher than what appears at face. The strategy has driven volumes in the last two years and we expect the volume growth to continue in the next two years.

Market Segments Break segment some products are consumed during short breaks with coffee and tea, for example snack range and Perk. Desire segment under this segment products are purchase on desire, for example Cadburys Dairy Milk, temptation etc. Take home segment this segment express the products that are purchased from supermarkets and taken home for consumption, for example Bournvita.

Product failure-

Cadbury And The Worm Controversy

The discovery of worms in some samples of Cadburys Chocolate in early October 2003 created one of the biggest controversies in India against a Multi National reputed for being a benchmark of QUALITY. The controversy created a deep adverse impact on the company with their sales not only drastically dipping down, but at the same time allowing the competitors to establish their foothold and taking maximum advantage of Cadburys misfortune. The controversy, and the adverse publicity received in several countries, set back its plan of outsourcing model which would have resulted in significant revenue generation, several months back. The "worms controversy" came at the worst time.the next few months were the peak season of Diwali, Eid & Christmas. Cadbury sells almost 1,000 tones of chocolates during Diwali. In that year, the sales during festival season dropped by 30 per cent. The company saw its value share melt from 73 per cent in October 2003 to 69.4 per cent in January 2004. In May, however, it inched up to 71 per cent. CDM sales volumes declined from 68 per cent in October 03 to 64 per cent in January 2004 Clearly, the worm controversy took a toll on Cadbury's bottom-line. For the year ended December 2003, its net profit fell 37 per cent to Rs 45.6 crore (Rs 456 million) as compared with a 21 per cent increase in the previous year. However, Cadburys reiterated that all through the 55 years of leadership in India, that it has remained synonymous with chocolates and have remained committed to high quality and consumer satisfaction."

CABDBURYS FIGHT-BACK

'Project Vishwas' Steps to ensure quality & regain the confidence Following the controversy over infestation in its chocolates, Cadbury India Ltd unveiled 'Project Vishwas', a plan involving distribution and retail channels to ensure the quality of its products. The company's team of quality control managers, along with around 300 sales staff, checked over 50,000 retail outlets in Maharashtra and replaced all questionable stocks with immediate effect. The Vishwas programme was intended to build awareness among retailers on storage requirements for chocolates, provide assistance in improving storage conditions and strengthen packaging of the company's range of products. Cadbury reduced the number of chocolates in its bulk packets to 22 bars from the present 60 bars. These helped stockists display and sell the products "safely and hygienically" 190,000 retailers in key states were covered under this awareness programme.

Initially positioning of Cadbury gems Cadbury gems was originally positioned as a brand catering only to young kids as it had lot of success with that positioning. Gems used to be children chocalate and appealed kids so far

Repositioning of Cadbury gems Cadbury has successfully re position its other product in past example being Cadbury dairy milk it had different positioning at different times as CDM( Cadbury Dairy milk) is for the kid in you, CDM is a substitute for Indian sweets `Kuch Meetha Ho Jaaye all these campaign has been very successful. Cadbury after their successful up gradation of chocolate brands to adults, tried to do the same with their Gems brand. Whatever be the reason, increasing sales or market expansion, the move is indeed brave. The brand has the tagline Raho Umarless, can be translated into Be Ageless. The concept of the brand may be to encourage even adults to enjoy the life irrespective of age Though the concept is good, but ad could not reflect its intended position. The reason for targeting adults, sales might have attained maturity level which forced the company to target new segment to boost its sales. Another view could be the market expansion.

Repositioning as a failure The repositioning of Cadbury gems has failed to create any impact. One of the reasons for the failure of the re-positioning can be attributed to the concept of the campaign itself. The Raho Umarless ads unlike the other Cadbury ads failed to connect with the target consumers. This is because the ads for

Cadbury chocolates showed adults behaving like adults which earned their empathy, while, Gems ads had shown adults behaving like kids which apparently did not register well with target consumers. It might probably have made only the children laugh. However, it failed to win over the hearts of its target consumers. Another reason to the failure is that the campaign could not provide any convincing reason as to why adults should buy Gems. Elements like why should and when to buy as in Cadbury chocolate campaigns is missing in Gems campaign. Conclusion It looks like Cadburys has to go back to the basics and work out a re -positioning strategy for Gems from scratch. However, it would be really good for the company to ask themselves this fundamental question do we need to re-position Gems brand? Well Cadbury is a great company and made an effort to attract new segment. But time will decide and we are going to witness whether it is a great effort or poor and ineffective effort. Let us wish and hope cadbury gems will drive adults into its way. The right approach would have been that while repositioning, the brand should have concentrated on building salience and should have concentrated on finer details as to why to buy and when to? These elements are simply missing in the campaign.