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Title of the Project

An Analysis
of the
Marketing Strategies
of
CADBURY INDIA

Submitted by

Name of the Candidate: Hamzah Khan

Registration No: A01-1112-1426-12

Name of the College: St. Xavier’s College (Autonomous)

Name of the Supervisor: Dr. Shivaji Banerjee


DECLARATION

I hereby declare that the project titled


‘An Analysis of the Marketing Strategies of Cadbury India’
submitted by me to the Department of Commerce, St. Xavier’s College
(Autonomous), affiliated to the University of Calcutta,
in partial fulfilment for the award of the Degree in Bachelor of Commerce
with Marketing Specialization,
is a record of project/research done by me and that the Project Report has
not formed sole basis for the award of any
Degree, Diploma, Associateship, Fellowship or any other similar title to me.

An Analysis of the Marketing Strategies of Cadbury India


Hamzah Khan
B.Com (M)
St. Xavier’s College (Autonomous)
30, Mother Teresa Sarani (Park Street)
Kolkata: 700 016

2
TABLE OF CONTENTS
SERIAL TOPIC PAGE
NO. NO.
I Acknowledgement 05
II Figures & Tables 06
III Abstract 07

CHAPTER ONE
1 Introduction 09
1.1 Limitations of the Study 10
1.2 About Cadbury 11
1.3 Cadbury India 12
1.4 Objectives 13
1.5 Corporate Objectives 14
1.6 Marketing Objectives 15
1.7 Stakeholders Objectives 16
1.8 Importance: General (World) 17-18
1.9 Importance: Specific (India) 19-20

2 CHAPTER TWO
Review of Literature 22-24

3 CHAPTER THREE 25
3.1 Theoretical Foundation
3.2 Micro Environment Analysis 26-28
3.3 Macro Environment Analysis 29-30
3.4 SWOT Analysis 31-32

An Analysis of the Marketing Strategies of Cadbury India


3.5 5 C’s Model 33
3.6 Segmentation, Targeting & Positioning 34-35
3.7 Marquee Brand: Dairy Milk 36-39
3.8 Product Life Cycle of Dairy Milk 40
3.9 BCG Matrix 41-42
3.10 Distribution Network 43
3.11 Cadbury & the Worm Controversy 44
3.12 Cadbury’s Fight Back 45-46
3.13 Cadbury sings sweetly again 47
3.14 Consumer Behavior 48
3.15 Impulsive Chocolate Buying behavior & Pricing 49
3.16 Consumer Trends 50
3.17 Review of Past Promotional Programs 51
3.18 Analysis of Communication Process 52-57
3.19 Marketing Strategy 58-61
3.20 Marketing Mix 62-65
3.21 Comparative Objectives Analysis 66

3
CHAPTER FOUR
4 Research Methodology
4.1 Data Collection & Tabulation 68-69
4.2 Sampling Techniques 70-71
4.3 Data Analysis 72
4.4 Survey Results 73-74

CHAPTER FIVE
5.1 Findings 78-80
5.2 Conclusion 81
5.3 Recommendations 82

APPENDIX
IV Bibliography 84-85
V Questionnaire 86-88

An Analysis of the Marketing Strategies of Cadbury India

4
ACKNOWLEDGEMENT

T
he satisfaction and euphoria that accompany the successful completion of any task is
incomplete without the mention of people who made it possible. So I take this as a
great opportunity to pen down a few lines about the people to whom my
acknowledgement is due.
It is with the deepest sense of gratitude that I wish to place on record my sincere thanks to Dr.
Shivaji Banerjee, my project guide for providing me inspiration, encouragement, guidance,
help and valuable suggestions throughout the project.

I would also like to thank all my respondents for giving me their valuable time and
information.

And my heartfelt thanks to my parents and friends for their constant support and help
throughout the journey of this project.

This work has indeed been a learning curve for my academic life, in particular, and life in
general.

……………………

An Analysis of the Marketing Strategies of Cadbury India


[HAMZAH KHAN]

Date:
Place: Kolkata

5
FIGURES AND TABLES
SERIAL NO. FIGURES PAGE NO.

CHAPTER ONE
1.1 Percentage of population buying each Impulse Category 09
1.2 Revenue and Net profits over past 3 years 14
1.3 Distribution of Confectionary & Chocolate Market 15
1.4 Myriad Data of the Chocolate Industry 18
1.5 India Chocolate Market Share 20

CHAPTER TWO
Nil -

CHAPTER THREE
3.1 Cadbury India’s Market Share in different Segments 2012 34
3.2 Cadbury Brand Segment 36
3.2 Evolution of Cadbury Dairy Milk 38
3.4 PLC of Cadbury Dairy Milk 40
3.5 BCG Matrix 41
3.6 India Distribution Network 43
3.7 Consumer Chocolate purchases 50
3.8 Cadbury Dairy Milk (CDM)- The Real Taste of Life Campaign 52
3.9 CDM- The Real Taste of Life Campaign 53
3.10 CDM- Kuch Meetha Ho Jaaye Campaign 54
3.11 CDM- Pappu Pass Ho Gaya Campaign 55
3.12 CDM- Miss Palampur Campaign 56
3.13 CDM- Shubh Aarambh Campaign 57
3.14 Marketing plan for age 0 to 18 59
3.15 Marketing plan for age 19-35 years 60
3.16 Marketing Plan for Age 36-65 years 61
3.17 Cadbury Offices & Factories in India 65

CHAPTER FOUR

An Analysis of the Marketing Strategies of Cadbury India


4.1 Pie chart: The most common consumption reasons of Cadbury 74
4.2 Pie chart: Consumer preferences for chocolates 75
4.3 Word Association cloud 75
4.4 Area Graph: Various occasions of Cadbruy purchase 76
4.5 Bar graphs: Age distribution of Cadbury’s consumers 76

TABLES

3.1 Review of Past Promotional Programmes 51


3.2 Age Distribution of Cadbury Consumers 58
3.3 Price comparison of Cadbury vis-à-vis Nestle 63
3.4 Price range of CDM and its variants 63
3.5 Comparative Analysis of Cadbury & Nestle 66
4.1 Frequency of ratings as given by respondents 73

6
ABSTRACT

T
he journey of Cadbury Dairy Milk started way back in the year 1905 from Bourneville,
UK but it came to the Indian market in 1948. From the time it was introduced in India,
Dairy Milk has been the market leader in the confectionery segment commanding a
30%market share and average daily sales of 1 million bars. The reason that our group chose
Cadbury dairy milk for the brand audit is that it provides us with ample scope to study the
various aspects of branding like communication strategies, innovative ad campaigns,
establishing an emotional connect with consumers, brand repositioning, rebranding etc.
We’ll be studying the evolution of Cadbury dairy Milk by concentrating on the following
aspects:

How dairy milk redefined the chocolate segment from being seen as ‚meant for kids‛
to a thing to be enjoyed by everyone in moments of joy and celebration by targeting
the adult segment.

Dairy Milk has always tried to keep a strong association with milk, with slogans such
as "a glass and a half of full cream milk in every half pound" and advertisements that
feature a glass of milk pouring out and forming the bar.

Its use of innovative and interesting ad campaigns to make chocolate eating a habit
among the consumers, especially the adults.

An Analysis of the Marketing Strategies of Cadbury India

7
CHAPTER
ONE

An Analysis of the Marketing Strategies of Cadbury India


8
1. INTRODUCTION
onfectionery is a unique impulse category because it’s eaten regularly throughout

C
category.
the day rather than specifically at meal times. Confectionery now accounts for 24%
of all food media spend, more than any other food category. According to a survey,
purchase levels for confectionery are significantly higher than any other impulse

Figure 1.1 Percentage of population buying each Impulse Category


Source: Economic Times, 2012

The four major confectionery categories are- chocolate confectionery, sugar confectionery,
gum and cereal bars. The Indian confectionery market reached a value of around $500 million
in 2005. India’s chocolate market is dominated by two just companies—Cadbury, which

An Analysis of the Marketing Strategies of Cadbury India


entered the country 60 years ago and has nearly 60% market share, and Nestlé, which has
about 32%. The two have prospered by luring consumers with attractively packaged chocolate
assortments to replace the traditional dried fruits and sugar confectioneries offered as gifts on
Indian holidays, and by offering lower-priced chocolates, including bite-sized candies costing
less than 3 cents. With growth just starting to kick in, Asia is going to remain a sweet spot for
chocolate makers for years to come.

The Indian chocolate market is estimated to be worth Rs. 3.2 billion, with an annual growth
rate of 10 percent. Per Capita Consumption levels are very low in India, as compared to 8.7
kg per year in the U.K. The market therefore offers tremendous potential for growth. In our
analysis we are concentrating on the chocolate industry in general and Cadbury’s in particular.
Cadbury India Limited (CIL), a part of the Cadbury Schweppes Group, is India’s leading
confectionary manufacturer. Cadbury’s Dairy Milk, 5 Star, Éclairs, Perk and Gems are the
largest selling brands in their segments. CIL is estimated to have a 65 percent share of the
Indian chocolate market. In fact the word Cadbury is a classic example of a brand coming to
symbolize a product category.
9
1.1 Limitations of the Study
The sample was confined to 100 respondents. So this study cannot be regarded as “full
-proof” one.

A decent percentage of consumers of Cadbury are children. Obtaining information


from the under-aged was not an easy task

There was a fear of reprisal among the employees to reveal their personal feelings and
the result may not reflect the actual satisfactions.

Such a dynamic topic couldn’t be justified in a short time period. A topic so vibrant
and extensive will only be justified if research is conducted over a period of at least a
quarter year.

The findings and conclusions are based on knowledge and experience of the
respondents sometime may subject to bias.

An Analysis of the Marketing Strategies of Cadbury India

10
1.2 About Cadbury

adbury is a British multinational confectionery company owned by Mondelēz

C International. It is the second largest confectionery brand in the world after Wrigley's.
Cadbury is headquartered in Uxbridge in Greater London and operates in more than
fifty countries worldwide.

Cadbury was established in Birmingham, England in 1824, by John Cadbury who sold tea,
coffee and drinking chocolate. Cadbury developed the business with his brother Benjamin,
followed by his sons Richard and George. George developed the Bourneville estate, a model
village designed to give the company's workers improved living conditions. Dairy Milk
chocolate, introduced in 1905, used a higher proportion of milk within the recipe compared
with rival products. By 1914, the chocolate was the company's best-selling product.

An Analysis of the Marketing Strategies of Cadbury India


Cadbury merged with J. S. Fry & Sons in 1919, and Schweppes in 1969. Cadbury was a
constant constituent of the FTSE 100 from the index's 1984 inception until the company was
bought by Kraft Foods in 2010.

On 4 August 2011, Kraft Foods announced they would be splitting into two companies
beginning on 1 October 2012. The confectionery business of Kraft became Mondelēz
International, of which Cadbury is a subsidiary.

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1.3 Cadbury India

C
adbury India began its operations in India in 1948 by importing chocolates. It now
has manufacturing facilities in Thane, Induri (Pune) and Malanpur (Gwalior),
Hyderabad, Bangalore and Baddi (Himachal Pradesh) and sales offices in New Delhi,
Mumbai, Kolkata and Chennai. The corporate head office is in Mumbai. The head
office is presently situated at Pedder Road, Mumbai, under the name of "Cadbury House".
This monumental structure at Pedder Road has been a landmark for the citizens of Mumbai
since its creation. Since 1965 Cadbury has also pioneered the development of cocoa
cultivation in India. For over two decades, Cadbury has worked with the Kerala Agricultural
University to undertake cocoa research.

Cadbury was incorporated in India on 19 July 1948. Currently, Cadbury India operates in five
categories – Chocolate confectionery, Beverages, Biscuits, Gum and Candy. Some of the key
brands are Cadbury Dairy Milk, Bournvita, 5 Star, Perk, Bourneville, Celebrations, Gems,
Halls, Éclairs, Bubbaloo, Tang and Oreo. Its products include Cadbury Dairy Milk, Dairy
Milk Silk, Bourneville, 5-Star, Temptations, Perk, Gems (a version of M&M's), Eclairs,
Bournvita, Celebrations, Bilkul Cadbury Dairy Milk Shots, Toblerone, Halls, Tang and Oreo.

It is the market leader in the chocolate confectionery business with a market share of over
70%. Cadbury India, on 21 April 2014, changed its name to Mondelez India Foods Limited.

An Analysis of the Marketing Strategies of Cadbury India

12
1.4 OBJECTIVES

To examine the marketing strategies of Cadbury India

To conduct a SWOT analysis of Cadbury India

To conduct a PEST analysis of Cadbury India

To compare the strategies of Cadbury India vis-à-vis its competitor Nestle

To understand the essence of the 4 P’s of Marketing with respect to the marketing
efforts of Cadbury India

To analyze the impact of Cadbury’s stunning marketing techniques in causing a sea-


change in the Indian psyche.

An Analysis of the Marketing Strategies of Cadbury India

The objectives of the marketing strategies employed by the company are manifold.
They have been segmented into proper heads for our greater understanding.

 Corporate objectives
 Sales objectives
 Advertising objectives

Each of the following are discussed in detail ahead.

13
1.5 Corporate Objectives
 Broadening consumer appeal and extending reach to newer markets

 Sustained growth of market share through aggressive product development

 Striving for international quality in the products and processes

 Focusing on cost competitiveness, productivity and innovative utilization of assets

 Energizing and developing its people

In India, Cadbury India has defined its vision as

“Life full of Cadbury, Cadbury full of life”

India wants to achieve in the next four years what it has in the last 50 years.

An Analysis of the Marketing Strategies of Cadbury India

Figure 1.2 Revenue and Net profits over past 3 years


Source: Cadbury Website

14
1.6 Marketing Objectives:
 Double its turnover—which stood at Rs.1, 0000 crore in 2014—by 2020. This calls
for a growth rate of over 20 percent annually and will be done by setting up new
capacity, and increasing volumes

 Get more people to eat more chocolate, which calls for making it more affordable
and being more innovative

 Could get into new product categories like gums where the global portfolio is
impressive

 Aiming for a larger footprint in the confectionery space

 To be stronger in health drinks

Like most players with near-monopoly shares, Cadbury runs the risk of losing share to new
players like Hershey’s, ITC (with brands like Minto and Candyman) as well as to premium
imported chocolates. But that may not be much of a worry if Cadbury succeeds in growing
the market. They could, for instance, hold a 50 per cent share but of a much larger pie.

An Analysis of the Marketing Strategies of Cadbury India

Figure 1.3 Distribution of Confectionary & Chocolate Market


Source: The Nielsen Company, 2014

15
1.7 Stakeholders Objectives

Consumer centric:

 Appealing to a broader range of consumers is at the heart of the plan.

 Future activities will cover further improvisation of product & packaging to


deliver superior value to the consumers

 Greater innovation in packaging & product presentation across various power


brands

 Product introduction to provide new texture & taste experience to consumers

Suppliers and business partners:

 Continue using Ethical Sourcing Standards when working with suppliers

 Continue to engage in regular dialogue with its suppliers and responds to


their suggestions

An Analysis of the Marketing Strategies of Cadbury India


 Continue evaluating potential suppliers against a set of standards such as
environmental

 Protection and ethical labour practices prior to doing business with them

16
1.8 IMPORTANCE

General: World

T
he chocolates market is estimated at around 33,000 tonnes valued at approximately
Rs8.0 bn.

Cadbury is the leader in Chocolate with 70% share. It has actually become the generic name
for chocolates in India.

Cadbury with its Dairy Milk, Five Star, Milk Treat, Eclairs, Golden, is ruling the roost. In
chocolate-based drinks, it claims nearly 50% of the market. Cadbury India's market share in
cocoa-based products is 35%, with Dairy Milk brand alone accounting for 29%. Perk and
Five Star account for another 20%. Cadbury derives 76% of its revenues from chocolates
and other confectionery sales.

The next closest competitor to Cadbury in this segment is Nestle 22%. Besides that large
foreign brands like Hershey’s and local ones like ITC are trying to tread into Cadbury’s turf.
Imported chocolates are available via modern trade in higher end segments where Cadbury’s
presence is arguably weaker.

To push sales further, chocolate majors have been targeting adult audiences. Chocolates are An Analysis of the Marketing Strategies of Cadbury India
being presented a snack food for the new target audiences. Another strategy sought is the
introduction of smaller editions.

Although the players have resorted to very aggressive promotional drives, there has been
After the worm controversy in October 2003, there was a meltdown in chocolate sales.
Cadbury India appears to be on a recovery path.

17
An Analysis of the Marketing Strategies of Cadbury India

Figures 1.4 Myriad Data of the Chocolate Industry


Source: Millward Brown
18
1.9 IMPORTANCE (Continued…)

Specific: India

I
ndia is the world's fastest growing market for chocolates. Registering 15% annual
growth between 2008 and 2012, the Indian chocolate industry is projected to grow at an
even higher rate in the coming years.

According to Nielsen, the chocolate market in India is valued at Rs 6,600 crore, of which
the premium chocolate market accounts for 11-12 per cent of the category. The size of the
chocolate gifting market is 6 per cent of the category while that of premium chocolate
gifting market is between 1.5-2 per cent of the category.

The Population of India in 2013 is 1.27 billion. The chocolate consumption number comes
around 2, 09,550 ton.
400 Kgs of chocolate consumption is done in India per 3 minutes

Low priced unit packs, increased distribution reach and new product launches can be said to
have fuelled this growth.

An Analysis of the Marketing Strategies of Cadbury India


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 2013-2018 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 led to a new trend and development in the country, which will be adapted by
major manufacturers to remain active in the market.

19
Figure 1.5 India Chocolate Market Share
Source: Economic Times, 3rd May, 2014

In India chocolate consumption was very low in the early 90’s but as the decade advanced the
consumption drastically increased. The late 90’s witnessed a good chocolate market
condition. The chocolate market in India is dominated by two multinational companies –
Cadbury and Nestle. The national companies - Amul and Campco are other candidates in this
race. Cadbury holds more than 67% of the total share of the market. Nestle has emerged by
holding almost 21% of the total share. Apart from chocolate segment, there is also a big
confectionery segment which is flooded by companies like Parry's, Ravalgaon, Candico and
Nutrine. All these are leading national players.
The multinational companies like the Cadbury, Nestle and Perfetti are the new entrants in the
sugar confectionery market. (Management paradise) There are several others which have a
minor share in these two segments. According to statistics, the chocolate consumption in India
is extremely low. If per capita consumption is considered, it comes to only 160gms in the
urban areas. This amount is very low compared to the developed countries where the per
capita consumption is more than 8-10 Kg. Observing this fact it would not be appropriate to
consider the rural areas of India as it will be extremely low. This low consumption is owing
to the notion behind consuming chocolates. Indians eat chocolates as indulgence and not as

An Analysis of the Marketing Strategies of Cadbury India


snack food. The major target population is the children. India has witnessed a slow growth
rate of about 10% pa from the 70’s to the 80’s. But as the century advanced the market
stagnated.
This was the time when Cadbury launched its product- Dairy Milk as an anytime product
rather than an occasional luxury. All the advertisements of Dairy Milk paid a full attention to
adults and not children. And this proved to be the major breakthrough for Cadbury as it tried
to break the conventional ideas of the Indians about chocolate. One of the oldest products of
Cadbury which is still going strong is the Cadbury’s Five Star which was launched in the year
1968 in India. Cadbury’s Five Star is the most resistant chocolate to temperature and hence it
is widely distributed all across the country.
In early 90’s, the Cocoa prices became high due to which the manufacturers were forced to
raise their product prices. But as the new variety of chocolate was launched – the wafer and
the chocolate variety with the brand name Perk, the volume grew significantly. In the late 90’s
new players like Nestle also introduced these wafer chocolates with the name Kit Kat resulting
into the growth of the market.
Dark Chocolate is growing at a rate of 13% globally. But India is still at nascent stage. There
is less than 25% awareness amongst the young age segment.
20
CHAPTER
TWO
21

An Analysis of the Marketing Strategies of Cadbury India


2. REVIEW OF
LITERATURE

Kala Vijay Raghavan, Economic Times Bureau:

The cascading effect of a global takeover has effectively turned this 60-year-old Indian
company into a startup with new shareholders, new product categories and brands,
new leaders, a new identity and culture. New CEO Manu Anand has the unenviable
mandate of managing such unsettling change without taking his eyes off growth. About
5,000 employees of Mondelez India, the almost unrecognisable new avatar of what
was formerly Cadbury India, left their Peddar Road, South Mumbai HQ of over 50
years, and have just moved to a new home in India Bulls Finance Centre, Parel. The
geographical relocation is symbolic of both pain and excitement that many old and
new executives are respectively experiencing as the 60-year-old company emerges out
of two forced, tumble-dryer style makeovers triggered by rapid ownership changes.

Irene Rosenfeld, chairman and CEO, Mondelez International

Mondelez International is the world's largest startup. Mondelez is at the same time
both a 20-month-old baby and a $36-billion global snack giant. And, as it seeks to

An Analysis of the Marketing Strategies of Cadbury India


create a new culture, it has both the assets and burdens of a 100-year-old legacy.
Within 24 months, we moved from Cadbury to Kraft to Mondelez. So, moving from
each would lead to a different focus. There will be new ideas and a different
perspective and a blend of the old and new...a mindset change has to happen.

Mr.S.Gopalakrishnan, MBA, MF.T., M.Sc(Psy.), M.Phil.,(Ph.d),


Department of management studies

The second of the three bars in the Bliss range, here we have the old classic: hazelnut.
The slight difference here is that there are no actual hazelnuts in here, rather a
“roasted hazelnut paste (5%)” mixed in with the chocolate truffle. Unsurprisingly
Cadbury have used a brown theme along with the purple for this particular edition,
and it looks quite nice. Being a big fan of Japanese confectionery I like the cardboard
boxes and elaborate over packaging they tend to use, and it’s nice to see Cadbury
using boxes for these rather than plain foil wrappers. Inside the box is, of course, a
22
foil wrapper though (akin to the kind used in Lindt/Green & Black’s/etc), and then ten
more big truffle chunks for me to devour. It’s nice to eat a hazelnut bar that doesn’t
leave little pieces in my mouth after I was done with it, but it seemed a little lacking in
actual hazelnut taste.

John Bradley, Author of Book: Cadbury’s Purple Reign

The remarkable journey from a shop in Birmingham to becoming the world's largest
confectionary company has been achieved through a unique combination of
business purpose and human values. While many publications have, quite rightly,
highlighted the Quaker origins of the company and the Cadbury's contribution to
the addressing of social injustices, these have perhaps overshadowed the business
and the brand building story that lies at the heart of its success. The Cadbury name
has been associated with chocolate and cocoa since the early 1830's, time when
mass markets were only just emerging. Cadbury became the industry leader through
harnessing the opportunities afforded by the rapid industrialization of the United
Kingdom and the emergence of a consuming class; a situation that bears many
parallels with the changes in India and China today.

Dr. Saumya Tiwari, Head of Research. AFAQs

Considering that the luxury chocolate gifting market in India is still at a


nascent stage, Cadbury may have seized the right moment to launch Glow.
Positioned as a round-the-year gifting option, the new product
differentiates itself from Cadbury's Celebrations that is associated with

An Analysis of the Marketing Strategies of Cadbury India


festive occasions. Crafted in Bratislava (Slovakia), Glow Pralines (a
technical term used for chocolates which have a liquid filling) has a liquid
centre made of Hazelnut crème and cocoa filling covered with a milk
chocolate smooth shell. The product comes in a golden box that has
chocolate pieces encased with a purple outside cover, which has the
Cadbury Glow logo and branding. Our experts feel that Cadbury Glow
has arrived in India just at the right time when the luxury chocolate gifting
market needs the push that too from a category leader like Cadbury. Most
of the options available in this category are still largely "duty-free"
brands. It's absolutely the right time for Cadbury to enter this segment.

23
Lauro Alfaro, Faculty, Harvard Business School

The explosion of Chocolates in recent decades is rapidly transforming the global


landscape of confectionary production. But are the emerging clusters of
multinational production the rule or the exception? What drives the growth of
Cadbury many times over its competitors?
Using a unique worldwide distribution network that reports detailed location,
ownership, and operation information for factories situated globally, a spatially
continuous index of production, marketing and distribution of the patterns and
determinants underlying the global economic geography of the firm adds greatly to
bastion of the giant Cadbury.

Rajiv Dingra Founder & CEO of WATConsult

Cadbury on social media suffers from the classic case of broadcasting and not
engaging the community it built. While it does well in creating many engaging apps
and properties it does little to make an effort to do one to one communication. Also
an energetic brand like Cadbury not being on twitter actively is a little absurd. We
all know brands like that are impulsive and craving oriented and getting a reminder
via twitter while you are on the go could do wonders for not only its engagement
but also have an influence on its sales.
Cadbury dairy milk, Cadbury Celebrations and Cadbury Bourneville have been
doing an awesome job on Social Media, we expect a much better strategy from Perk,
which is also a Cadbury brand. Perk’s Facebook updates are timely, relevant and
witty to some extent but there is a lot more that the brand could do.

An Analysis of the Marketing Strategies of Cadbury India

24
CHAPTER
THREE
25

An Analysis of the Marketing Strategies of Cadbury India


3. THEORETICAL
FOUNDATION

3.1 Micro-Environmental Analysis

An Analysis of the Marketing Strategies of Cadbury India


Market Concentration & Competition
The chocolate industry is highly concentrated. Cadbury and Nestle together account
for 90% of the retail sales with Cadbury being the market leader. Competition in this
industry is fierce, especially between Cadbury and Nestle. Both Cadbury and Nestle
have rival products in every segment (Cadbury’s Dairy Milk, 5 Star, Perk vs. Nestlé’s
Classic, bar-one, munch, etc.)

Barriers To Entry

The industry’s main barrier to entry is with respect to advertising. The incumbent firms
have spent millions of rupees to create brand-loyalty with consumers. The cumulative
effects of advertising create an absolute cost advantage for the incumbent firms, thus

26
entrants must overcome not only current advertising efforts, but also the lingering
impact of past marketing campaigns. High sunk costs also act as a barrier to entry.
Sunk costs in this industry include establishing channels of distribution, advertising
expenditures, and initial research and development costs. All these factors create
difficult barriers to entry for a new firm entering the market and an advantage for
successful first movers such as Cadbury and Nestle. But recent happenings like
Ferrero planning to start production in 2009 at a new factory near Mumbai, and
Hershey partnering with domestic confectioner Godrej Industries to distribute Hershey
products have actually changed the equation a lot.

Supplier Power

Industry uses a wide range of raw materials in manufacturing chocolate products, the
main ones being cocoa beans, sugar and other sweeteners (including polyols and
artificial sweeteners such as aspartame), dairy products (including milk), gum base
and fruit and nuts. Cadbury buys its raw materials from suppliers around the world.
No single supplier accounts for more than 10% of their raw material purchases. One
of the methods implemented by Cadbury to minimize the impact of price fluctuations
and ensure security of supply is by entering into forward agreements and long-term
contracts wherever available.
Cadbury imports cocoa beans from West Africa, primarily Ghana, and the Americas.
West Africa accounts for over 60% of world production. They buy cocoa beans and
cocoa butter from a range of suppliers, and try to minimize the effect of cocoa price
movements and secure our future requirements by entering into forward and future
contracts. In order to ensure assured supply of raw material for its chocolates, Cadbury
India Limited has decided to sell cocoa seedlings to coconut farmers in Tamil Nadu at
Rs 4 per seedling. A MoU was signed between Cadbury India and the Tamil Nadu
government to this effect. They purchase most of the sugar at prices essentially set by

An Analysis of the Marketing Strategies of Cadbury India


national government through quotas and duties. So far no difficulty has been
experienced in obtaining adequate supplies of sugar for their operations, and they do
not anticipate any future difficulties, given the many available sources.

Buyer Power

End consumers have strong buyer power because of the availability of substitutes,
both generic and brand names. It is easy for a consumer to purchase a nearly identical
product for a lower price. This gives consumers a great deal of leverage and leads
Cadbury to spend millions of rupees to create product differentiation via
advertisements and new products to catch up with the evolving trends in the market.
Retail stores have significant buyer power due to their ability to charge high fees for
shelf space, which is important channel of distribution for Cadbury. Cadbury has
worked hard to build strong relationships with these retailers to minimize this affect.

27
Substitutes

The current trends in the market suggest that traditional sweets are possible substitutes
for chocolates. This is further stressed by the fact that till a few years back chocolate
was not considered to be a gift item unlike sweets. However, in recent years this
scenario has changed quite rigorously because of an innovative strategy taken up by
Cadbury.
In order to strengthen the special relationship consumers share with chocolates,
Cadbury India launched its all-year-round ‘Cadbury Celebration gifting’ range with
an array of newly designed
Cadbury Celebration packs. The range features a selection of stylish new packs
available in “Nutbutterscotch”, “Caramel”, “Almond Magic”, “Cashew Magic” &
“Raisin Magic”. The range is priced between Rs 145 & Rs. 155 and is available in all
premium retail outlets across major towns in India. There is also a wide selection of
online vendors that offer Cadbury Celebration range for all kinds of occasions.

An Analysis of the Marketing Strategies of Cadbury India

28
3.2 Macro-Environmental Factors
(PEST Analysis):

Political:

 Liberalization measures prompted by WTO affecting sales by way of

An Analysis of the Marketing Strategies of Cadbury India


competition from imports; Direct imports from Cadbury Schweppes by dollar
stores might erode market share

 Change in government policies has allowed entry of foreign players; US-based


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

 “Too good to share” Kashmir ad campaign for ‘Temptations’ (2002) lead to a


major controversy; Political parties staged rallies outside its offices and
newspaper editorials lambasted the company for its insensitivity. The Ad
campaign was withdrawn and a public apology was issued

 The Food Safety and Standard Bill, 2005 with penal provisions requires a review
as the same gives huge powers to the Inspecting Officers to seize food articles
without authorization and may create unwanted confusion to the detriment of the
company

29
Economic:

 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. India imports
most of its cocoa requirements and the prices of cocoa have risen globally due to
unavailability of cocoa. If the prices of these commodities keep increasing,
Cadbury will be forced to increase the prices

 Low margins, high volumes, price sensitivity of the industry and competition
from cheaper substitutes leaves little room for price maneuvering.

Social:

 In October 2003, seizure of chocolates stock from Pune plant after worms were
found by customers in Dairy Milk packages; Sales dropped by 30 percent where
it was expected to grow by 15 percent owing to the festive season;
Advertisements went off air for a month and half; To regain the lost faith of
customers, Cadbury invested in technology to the tune of Rs.15 crore, roped in
Amitabh Bachchan as the brand ambassador and upped ad spends by 15 percent

 “Indianisation” of the brand to increase width of consumption by entering the


Indian mind space

 Making Cadbury a part of Indian customs and traditions – positioning chocolates


as a substitute to sweets

Technological:

 Adoption of JDA software’s space and category management solution resulted in An Analysis of the Marketing Strategies of Cadbury India
93.75% reduction in planning and processing time and increase in productivity

 e-Commerce has not picked up that well - not much turnover through this route –
future growth prospects of this channel

30
3.4 SWOT ANALYSIS

Strength

Cadbury being a reputed company has its brand name as one of its biggest strengths.
It has been present for over 65 years even before competition could peep-in. Due to
its presence for so many years people tend to associate chocolate with Cadbury. It is
almost as if Cadbury is synonymous with generic category chocolate. Cadbury is a
very profitable organization, generating revenue in billions. Cadbury India Ltd is
supported by its parent company, Mondelez International. A large range of products
like - chocolates, beverages, malted foods etc. are manufactured by Cadbury. These
products are reasonably priced to suit different economic consumer categories.
Celebrity endorsements have increased sales and also added glitter to the brand name.
Cadbury India has the biggest market share at 67 per cent while Nestle is the second
largest at 21 per cent. Amul & other holds the rest. In spite of innovation in the
chocolate segment, their basic chocolate, Dairy Milk, still seems to remain the all-time
favourite of most people. Low cost of production due to economic of scale. That means
higher profits, better market penetration with the strong distribution network.

An Analysis of the Marketing Strategies of Cadbury India


Weaknesses

The scenario of worms being found in Cadbury chocolates lead to a temporary


decline in sales. Also Cadbury offers a limited variety of products as opposed to
other leading competitive brands, e.g. Amul and Nestle that offer an array of
products like biscuits, dairy products, etc. One of the major raw material i.e. Cocoa
has to be imported leading to bunched imports and higher inventory. Also majority
of markets in India are not Air conditioned and hence cannot store chocolates at
least during hot summers, which limits the market access. There is lack of
penetration in the rural market where people tend to dismiss it as a high end product.
It is mainly found in urban and semi-urban areas. The operating profit of the
company declined, declining profitability will adversely affect the operations of the
company. Poor technology in India compared to current international technologies.

31
Opportunities

As Cadbury has established itself very well in the Indian market, it can now narrow
down to some popular products and can bring down its own individual Cadbury’s
store. It has capabilities to increase the range of products manufactured. The company
can easily venture into new segments individually or jointly. Another very important
opportunity that can be observed is the introduction of foreign products in India. The
company can focus on targeting urban areas and developing sectors by working on
availability and affordability. The company aims at bringing efficiency in logistics and
distribution. This can very well be achieved by using information technology. Cadbury
can also focus on gaining profits through chewing gum market in India.

Threats

As Cadbury has already faced a worm scandal, its reputation has been put at stake
by the competitors trying to exploit this situation. Cadbury faces a serious threat in
the confectionery segment from companies like Amul, Nestle, etc. As Cadbury
produces chocolates and a few related products, effective management of all the
areas proves to be difficult at times. Trends of purchase may change with the ever-
changing taste preference of consumers. Changing restrictions and rules from
Government quality control boards may result in pressure on the production of the
company & cost increase. Also, Cadbury is exposed to rise in the cost of cocoa
beans, dairy products and other vital ingredients.

An Analysis of the Marketing Strategies of Cadbury India

32
3.5 The 5 C’s Model

Company

Cadbury dairy milk is a brand of chocolate made by Cadbury Plc. unit of Kraft Foods
and sold in several countries around the world. It first went on sale in 1905 in the
United Kingdom. The current parent is Mondelez International.

Customers
The prospective customer of dairy milk range from 5 to 60 years of age. Since dairy
milk has a range of product suited for every member of the family. The aim is to
strengthen the brand relationship in the current consumer’s life. The ranges of
customers vary for diary milk. Whereas some buy it as an alternative for sweet others
buy it as a gift item. The consumers mostly buy the product on impulse and are
influenced by taste/flavour and then by company/brand.
Competitors

The main competitors of Dairy milk in India are Nestle, Ferrero Rocher, Amul
chocolates & unbranded chocolate. The high end chocolates (Bourneville and silk)
also face competition also face competition from the imported Swiss chocolates. But
one of the biggest advantages the dairy milk has over its competitors is the brand
loyalty that it has got. The excellent advertising, reach and accessibility have made it
the top of mind brand in the chocolate category.

Climate

The climate for the chocolate industry and dairy milk in particular seems very
attractive in a country like India. With the size of the market being so big along with

An Analysis of the Marketing Strategies of Cadbury India


encouraging category growth the prospects look very good. Since the product is not
seasonal and the margin is also good makes the climate for the industry even better.
With new innovations coming up in terms of product and packaging the market is still
on a growth curve.

Collaborators
As already said Cadbury dairy milk manages a huge range of retailers and whole
sellers who make up the collaborators. Over the years the company has partnered with
various other companies like Adam Philippines in 2001 so that diary milk has a much
wider distribution network in the Philippines.

33
3.6 Segmentation, Targeting &
Positioning

Segmentation

For more than six decades now, Cadbury has enjoyed leadership position in the Indian
chocolate market to the extent that 'Cadbury’ has become a generic name for chocolate
products. Cadbury has leading brands in all the segments viz bars (Dairy Milk,
Crackle, Temptations), count lines (5 star, Milk Treat).

An Analysis of the Marketing Strategies of Cadbury India

Figure: 3.1 Cadbury India’s Market Share in different Segments 2012


(Source: Business today)

34
Market place for any product is comprised of many different segments of consumers,
each with different needs and wants.

Market segmentation can be defined in a number of ways such as:

 Demographic variables: - (e.g. Consumers age groups, gender, material states


income nb etc…).Current Population of India - India, with 1,270,272,105 (1.27
billion) people is the second most populous country in the world. With the
population growth rate at 1.58%, India is predicted to have more than 1.53
billion people by the end of 2030. More than 50% of India's current population
is below the age of 25 and over 65% below the age of 35.

 Geography: - About 72.2% of the population lives in some 638,000 villages


and the rest 27.8% in about 5,480 towns and urban agglomerations. So India
is the biggest market for Chocolate in terms of population.

The lifestyle of consumers (i.e. their interests and activities) the benefits which
consumers look for in a product or on the occasions when the product might
be consumed.

Cadbury takes into account all these factors when producing a range of
products. It targets different segments within the market, are as follows: -

 Break segment: – Products which are normally consume as a snatched break


and often with tea and coffee, for example Cadbury’s Perk and Oreo Biscuits.

 Impulse segment: – These products are often purchase on impulse, eating


these and then. They include product such as Cadbury’s Dairy Milk.

An Analysis of the Marketing Strategies of Cadbury India


 Take home segment: – This describes product that are normally purchased
from supermarkets, taken home consumed at a later stage.
The price of Cadbury dairy milk is reasonable and affordable. So a person does
not need to think much before purchasing it, they can easily buy it any time
when they want to buy. The income of a person does not play any important
role in it.

Cadbury dairy milk will not be much affected by the generation differences.
All types of peoples like to purchase the Cadbury dairy milk when they want
to buy it.

35
Segmentation Graph
High Premium

Snack Indulgence

An Analysis of the Marketing Strategies of Cadbury India

Low Priced

Figure 3.2 Cadbury Brand Segment


(Source: Company website)

36
Targeting

Starting from 1905 the purchasers of dairy milk have changed from children to all age
groups. When Cadbury started its operation in India their main buyers were children
and the youth who brought chocolates to celebrate special occasion. This limited the
market for Cadbury dairy milk. This is a reason that Cadbury came out with the
campaign of (‘kuch meetha ho jaye’) to make dairy milk synonymous with sweet so
that it could target all the age groups. In India it was a mentality that chocolates are
for children and the adults were more inclined towards to the conventional sweets.
This campaign targeted them and saw a change in the target market for the brand. Now
the target market for dairy milk is every member of the family.

Cadbury’s Dairy milk always aimed for the bigger bite of the Indian market. It has
been the market leader in the chocolate category for years.
The main objective of Cadbury’s dairy milk is very clear, reach the audience by
showing them their reflection. Showing small happiness and cheerful moments that
we see in our day to day life is cherished by enjoying a bite of

Cadbury’s Dairy milk and by adding an emotional touch to it, & has won the Indian
audience thoroughly.
They are Positioning Diary milk as a successful alternative to the traditional Indian
sweets in unique way in order to cash in the rich tradition of Indian people associated
with desserts, birthday gifting through Facebook, gifting in schools (15th August &
26th Jan-13) & on birthdays, gifting in offices on birthday’s & gifting with marriages
invitation card & after marriage ceremony.

An Analysis of the Marketing Strategies of Cadbury India


Positioning

Cadbury Dairy Milk excels at positioning. Not only can the chocolate bars have many
different positions based on which segment they are in, but also none of the positions
damper the effects of other positions! Youth see with word Cadbury as a synonym for
chocolate, others see it as synonyms for sweet and love and bliss. In India it positioned
itself as “spontaneous, special, carefree, real moments (‘Mazza aa gaya’) in the initial
stage. But later it tried to position itself as brand that is synonymous with sweet (‘Kuch
meetha ho jaye’). The most recent campaign (‘Shubh Aarambh’) tries to take forward
the initial positioning of dairy milk as an alternative for the traditional sweet and
positions itself as something that is as auspicious as the sweet which is generally
offered as ‘bhog’ to gods.

37
3. Marquee Brand:
Cadbury Dairy Milk

2014

Figure 3.3 Evolution of Cadbury Dairy Milk

C
adbury Dairy Milk encapsulates an enormous breath of emotions, from shared values
such as family togetherness, to the personal values of individual enjoyment. It stands
for goodness. A moment of pure magic!

An Analysis of the Marketing Strategies of Cadbury India


Cadbury Dairy Milk (CDM) entered the Indian market in 1948, and since then for consumers
across India, the word Cadbury has become synonymous with chocolate. CDM remains at the
top of the Indian chocolate market not only because of its most delicious, best tasting
chocolate but also because of its memorable communication.
Cadbury’s own milk chocolate bar, made by adding milk powder paste to the dark chocolate
recipe of cocoa mass, cocoa butter and sugar, was launched in 1897. But it did not attract a
lot of interest. Swiss manufacturers were leading the field in milk chocolate, with much better
products than their rivals. So in 1904 George Cadbury was tasked with developing a milk
chocolate bar that was to have more milk than anything else on the market.

All sorts of names were suggested: Highland Milk, Jersey and Dairy Maid. But when a
customer’s daughter suggested Dairy Milk, the name stuck.’ George Cadbury
Dairy Milk was launched in June 1905. It was sold in unwrapped blocks that could be broken
down into penny bars. Gradually it became more and more successful – Cadbury’s biggest
seller by the beginning of the First World War. And by the early 1920s it had taken over the
UK market. And of course, it’s still with us today. Cadbury Dairy Milk has become a
megabrand, available in many different varieties and all over the world.

38
Cadbury Chocolate constantly creates or acquires new products to add to their range of
offerings. Major chocolate brands produced by Cadbury include the bars Dairy Milk,
Crunchie, Caramel, Wispa, Boost, Picnic, Flake, Curly Wurly, Chomp, and Fudge; chocolate
Buttons; the boxed chocolate brand Milk Tray; and the twist-wrapped chocolates Heroes.

Earnings sensitivity factors:-

 Cocoa bean, Sugar & Solid milk (milk powder) prices: Domestic as well as
international prices of key raw material – cocoa, Sugar & Milk has significant impact
on margins. Good monsoon ensures adequate availability of raw materials, which are
mainly agricultural in nature.

 -Rupee depreciation improves export realizations; however it also makes import of


raw material (esp. cocoa) expensive.

 Excise duties: Changes in excise levied on malt and chocolate influences end product
prices and thereby volume growth as well as margins.

 Changes in custom duties and foreign exchange fluctuations, as 20% of raw material
are imported.

 Competition from MNCs like Nestle as well as imported brands. Increasing


competition puts pressure on advertisement budget and margins. However on the
positive side, it helps in expanding the market.

An Analysis of the Marketing Strategies of Cadbury India

39
3.8 Product life cycle of CDM

T he product life cycle model helps marketers identify the different stages that the sales
and profits of a product go through during the course of its lifetime. There are five
stages to the product life cycle: introduction, growth, maturity, saturation and decline.

1. Introduction: Sales are slow as the product is not yet known. Costs are high due to heavy
marketing spend to create awareness. Emphasis is on advertising and distribution. The
Cadbury Dairy milk launched by Cadbury in 1905 is an example of a brand at the introduction
stage.

2. Growth: This stage shows growing market acceptance and increasing profits. Competitors
begin to enter the marketplace. The business concentrates on optimizing product availability.
The Cadbury Dairy milk is the market leader in chocolate market with 30 % market share
example of brand at growth stage.

3. Maturity: The rate of sales growth slows down as the product has been widely distributed
and sold. The company now focuses on creating brand extensions and promotion offers to
boost sales. New product research is critical to ensure future sales. The Cadbury Dairy Milk
Silk chocolate range is an example of creating brand extensions brand at the maturity stage.

4. Decline: Sales slow down dramatically and profits fall off. The product may be dropped to
make way for new products and the cycle recommences. So far CDM has not reached at this
stage because of extension in maturity stage.

An Analysis of the Marketing Strategies of Cadbury India

Figure 3.4 PLC of Cadbury Dairy milk


Source: Ipsos Indica Research, 2014

40
3.9 BCG Matrix

B oston Consulting Group Matrix based on product life cycle approach to use the charts,
analyst plot a scattered graph to rank the product on the basis of relative market share
& growth rate. The BCG matrix is used in business to under where to invest, harvest
& divest. This matrix also shows the relationship between cash-generating products & cash-
caters.

1. Star

Products in rapidly growing markets in which the company has high relative market
share. Star products generates the high amount cash but are expensive to support. They
are good investment as have high earning potentials both at present & at future time.
That investment is likely to be needed if the company wants to retain its market
positions, as competitors will be trying to emulate stars.

Cadbury India has two star products Cadbury Dairy Milk Chocolates with 30% market
share in chocolate market & Cadbury Bournvita 16.2 % share in malted foods category
(as per Nielsen data for the quarter ending March-13).

An Analysis of the Marketing Strategies of Cadbury India

Figure 3.5 BCG Matrix

41
2. Cash Cows

Products in slow growth, or even static, market in which they have relatively high
market share are called as Cash Cows. They require little promotion although under
investment can turn them into dogs so they should not be taken for granted. The
company’s objective is likely to be hold this position in order to obtain maximum
return on investment (ROI).

Cadbury India has two cash cow products Perk & Gums.

3. Dogs

Dogs are in stagnant or slow-growing markets have relatively low market share. One
company’s dog can become another’s cash cow or even a star if they are operating in
different markets or market segments.

Cadbury India has three dogs 5 Star, GEMS & Eclairs.

4. Question mark

Products in this quadrant are in rapid growing market but hold a relatively low
market share. Cadbury India has two dogs Toblerone & Bourneville.

An Analysis of the Marketing Strategies of Cadbury India

42
3.10 Distribution Network in India

adbury’s brands are available in over a million outlets across the country. Cadbury is

C also focusing intensively on achieving distribution equity. Though it takes much more
time and effort to build, but once built, distribution equity is hard to erode.

With technology and competitive pressure slash in it is becoming increasing difficult for
marketers to retain a unique product differentiation for long period. In a product and price
parity situation, the brand that sells more is the one that reaches the highest number of
customers.

To tap this huge potential Cadbury's distribution channels include the manufacturing
warehouses where the chocolate production takes place. This is followed by wholesaler &
then followed by retailer.
Due to 65 years of presence in India - has deep penetration- 2,500 distributors; 550,000
retailers, 60 mid urban (22%) customers. The modern trade is handled separately.

A schematic representation of the entire distribution channel is given here:-

An Analysis of the Marketing Strategies of Cadbury India

Figure 3.6 India Distribution Network


`` Source: Cadbury Website

43
3.11 Cadbury & the Worm
Controversy

he discovery of worms in some samples of Cadbury’s Chocolate in early October 2003

T created one of the biggest controversies in India against a Multi-National reputed for
being a benchmark of quality.

The controversy created an 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 Cadbury’s 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

An Analysis of the Marketing Strategies of Cadbury India


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 tonnes 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, Cadbury’s reiterated that all through the 55 years of leadership in India that it has
remained synonymous with chocolates and has remained committed to high quality and
consumer satisfaction.

44
3.12 Cadbury’s 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.

An Analysis of the Marketing Strategies of Cadbury India

45
 The BIG ‘B’ Factor

The big factor that has pushed up CDM sales is the Amitabh Bachchan campaign. It
helped restore consumers' faith in the quality of the product. In early January, Cadbury
appointed Amitabh Bachchan as its brand ambassador for a period of two years.

The company believed that the reputation he has built up over the last three decades
complements their own, which was built over a period of 50 years. Yet, the entire
credit of recovery could not be attributed to the brand mascot.

An Analysis of the Marketing Strategies of Cadbury India


Incisive action taken by the company also helped. Some of which were:

 Responded to consumers concern over the issue rapidly. Also, the


communication campaign worked effectively in giving out the central
message.

 The packaging was changed to include a sealed plastic wrapper inside the
outside foil. Cadbury’s launched a new 'purity-sealed' packaging for its
flagship product, Cadbury Dairy Milk. The packaging is in response to foreign
bodies, notably worms, being found in its products. Over the next few weeks
Cadbury will work towards introducing either a heat-sealed or a flow-pack
packaging that offers a high level of resistance to infestation from improper
storage.

 New advertising & promotion campaigns were in place which accounted for
an Ad spend of nearly Rs 40 crore (Rs 400 million) Cadbury invested nearly
Rs 25 crore (Rs 250 million) this year on new machinery for the improved
packaging.

46
3.13 Cadbury Singing Sweetly Again

ll is well that ends well. And for Cadbury’s India, nothing can be sweeter than

A Regaining Back the Consumer Confidence. Thanks to quick action taken to recover
the damage done by the worm controversy like Operation Vishwas, adopting new
packaging & massive advertising with Mr. Amitabh Bachchan as their brand ambassador,
Cadbury’s regained its market share.

Cadbury India appointed management consultancy firm AT Kearney to draw up a strategy to


control costs in several areas, including sourcing of raw materials and packaging. This was
partly an outcome of the worms’ controversy more than a year ago.

Among other things, it changed the wrappers for its Cadbury Dairy Milk brand and introduced
better coolers.

The consultancy firm will also look at the sourcing of direct and indirect materials like
renegotiating with suppliers for longer term contracts and vendor management. Other costs
(indirect expenses) like travel costs and hotels were also being studied.
In other words, Cadbury is trying to reduce the cost per stock keeping unit (SKUs, or
packs).The aim was to improve efficiencies.

An Analysis of the Marketing Strategies of Cadbury India

47
3.14 Consumer Behavior
Behavioral Factors

Decision: The decision is taken by the children and youngsters. They play an
important role in taking the decision of when to buy the Cadbury dairy milk.

Occasions: For purchasing the Cadbury dairy milk no special occasions are
required. People can easily purchase it on regular basis. Occasionally such as
Diwali, Rakshabandhan, the sales of Dairy Milk increases.

Psychographic: The psychology of how consumers think, feel, reason, and


select between different alternatives (e.g., brands, products, and retailers). The
psychology of how the consumer is influenced by his or her environment (e.g.,
culture, family, signs, media). Here Cadbury wins the race & Cadbury become
a part of lifestyle as a loyal brand.

Brands’ Role in Consumer Behavior:

Reassurance

A brand is a stamp of authenticity. It adds value by promising ‘replicability’


and helps to establish repeat purchase patterns. In a foreign country, people
seek the reassurance of familiar brands, even though they are presumably
traveling to find new experiences! This is why tourists and travelers around
the world feel comfortable on eating at McDonald’s.

Value Expression An Analysis of the Marketing Strategies of Cadbury India

We choose brands that reflect the individual values that we possess as


individuals. We do this to communicate the desired signals in the highly social
environment we inhabit.

48
3.15 Impulsive Chocolate Buying
Behavior and Pricing

I mpulsive behaviour occurs when the consumer is looking for immediate hedonic benefits.
It is commonly associated with urges to smoke, drink, overspend or overeat. 'Impulsive
behaviour' is defined by 'Consumers experiencing an irresistible urge to consume', which
they might even regret later.

Whether an individual focuses on cost or the benefit of impulsiveness depends on the chronic
values of the consumer, which forms the core of its personality. Hedonic personalities will
focus selectively on the benefits than the cost of impulsiveness and are considerable
uninfluenced by the costs. Hence, such individuals become insensitive to price aspect when
their hedonic urge is driving the purchase decision.

To discuss the growth of the market at the higher end of the spectrum in recent years in
chocolate category with this argument. The product offerings on the higher end are of rich

An Analysis of the Marketing Strategies of Cadbury India


chocolate (e.g. Dairy Milk Silk) based products (associated with taste and pleasure) instead
of wafer-based offerings (which serve as a snack). This shows that brands command a better
premium when an impulsive urge rather than functional benefits are the prime motivators for
purchase.

Even though chocolate buying behaviour is impulsive, research suggests that the relative
accessibility of inputs such as costs versus the benefits of impulsiveness influences impulsive
behaviour. Impulsiveness is unaffected by cost highlighting arguments which explains the
ineffectiveness of advertisements discouraging cigarettes, alcohol, etc.
When the benefit of impulsiveness was the pleasure of yielding to temptation, the
advertisements, that 'triggered the desire' or 'highlighted the benefits of giving in to the
temptation' appealed most to the hedonic individuals. However, the prudent personalities give
more value to the cost than the benefits. Thus, the benefits are relatively non-influential in
judgment. Thus, advertisements that justify the cost of impulsiveness can help provoke
impulsiveness in such consumers

49
3.16 Consumer Trends

C
hocolates are consumed as indulgence and not as snack food, as prevalent in western
countries. Almost 75% chocolates are impulse purchases. Chocolates are bought
predominantly by adults and gifted to children. The wholesaler usually deals in all
kinds of FMCG goods, Foodstuff in addition to the chocolates. The items like chocolates are
placed near the counter. Chocolates are primarily sold through Kirana Stores, Gift stores,
Medical Stores, canteens, Pan-Bidi stores, Bakeries, Sweet Shops, Super market etc.

-Mithai- the traditional Indian sweats is getting expensive and substituted by


chocolates among upwardly mobile Indians. Instead of buying sweets on Raksha
Bandhan, Diwali, people prefer to buy chocolates.

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.

Designer chocolates have become status symbols.


This clearly means that the three main factors like demand for products, conducive
regulations and customized talent are abundant in India.

Traditionally, chocolates were always targeted at children. But stagnancy in growth


rates made the companies re-think their strategies. Cadbury was the first chocolate
company that took the market by storm by repositioning brands at adults, as opposed
to children.

An Analysis of the Marketing Strategies of Cadbury India


The majority of consumers are buying chocolates from Super market & discounted stores.
The details summary from where the consumers are buying is shown in the below graph.

Figure 3.7 Consumer Chocolate purchases

(Source: AMA)

50
3.17 Review of Past Promotional
Programs
The details of all the past & present promotional programs are explained below:

CAMPAIGN TARGET SHIFT OVER PROMO


THE YEARS MECHANISMS
Real Taste of Life Child in adult From just for kids TVC, Print,
to the kid in every Hoardings
adult
Khanewalon ko Wider masses Appeal to a wider TVC, Print,
khane ka bahana mass based on age, Hoardings
chahiye gender, etc.
Pappu Pass Ho Youngsters TVC, Hoardings
Gaya
Miss Palampur Rural masses Shift to smaller TVC, Hoardings
packs
Kuch Meetha Ho Conversion of sweet This was an TVC, Print,
Jaaye consumers to innovative idea and Hoardings, Social
chocolate for special Cadbury went Media
occassions ahead with the
‘Celebrations’
packs with these
ads
Khane ke baad Targeting the habit of From converting TVC, Print,
Meethe mein Kuch Indians to have sweet consumers on Hoardings, Social
Meetha Ho Jaaye desserts after meals special occasions Media
Cadbury now tried

An Analysis of the Marketing Strategies of Cadbury India


to sweet
consumption for
dessert to chocolate
as well
Shubh Aarambh Targeting the belief Converting yet TVC, Print,
of Indians that another segment of Hoardings, Social
anything begun by sweet consumers Media
having something i.e. before the start
sweet provides good of any work
luck

Table 3.1 Review of Past Promotional Programmes


Source: Scrutiny of Cadbury Paper

51
3.18 Analysis of Communication
Process
 “Real Taste of Life”

Figure:3.8 Cadbury Dairy Milk- The Real Taste of Life Campaign


Source: Cadbury India Website

An Analysis of the Marketing Strategies of Cadbury India


Communication Objective:

Through the ad, they wanted to convey the message that there is a child in each one of us and
they wanted to appeal to that child, since children loved eating chocolates. The ad was meant
to create a particular image in the eyes of the customer and successfully communicate what
the product conveyed.

It appealed to the child in every adult and Cadbury Dairy Milk became the perfect expression
of 'spontaneity' and 'shared good feelings' In every adult there is a child let that child express
itself give in to temptation and satisfy his or her desire to sink teeth into a smooth creamy
delicious chocolate This approach appears to be unique to Cadbury.

What was communicated:


The Real Taste of Life was launched in the 1990 s. It was an attempt to capture the child-like
spontaneity in every adult. From the depiction of an old man offering his wife a Dairy Milk
chocolate to the dancing girl in crowded stadium, it all reflected the impulsiveness and the
spontaneity of the child in the adult.
52
Why they communicated:

They wanted to re-create the image of a child in the eyes of the adults, remind them of their
childhood days and create an image that Cadbury essentially stood for childhood and
stimulate them to buy chocolate so as to make them remember the childhood days.
What was achieved- A change in Consumer mind-set that chocolates were mostly for kids and
young people. Through the campaign, adults realized they could and should enjoy chocolates
as well.

 “Khanewalon ko khane ka bahana chahiye”

Figure:3.9 Cadbury Dairy Milk- The Real Taste of Life Campaign


Source: Cadbury India Website

Communication objective:

Through the ad, it was aimed at widening the chocolate consumption among the masses and
making sure the product reached a wider group of people, based on age, sex etc.

An Analysis of the Marketing Strategies of Cadbury India


What was communicated:

The ad reflected the fact that Cadbury could be available and eaten by all groups of people.
In the ad, an elderly lady, middle-aged man, newly married bride, young guy and a child are
all seen enjoying Cadbury, which showed that all people, irrespective of their sex and age
could enjoy it.

Why they communicated:

The ad was meant to stimulate purchase intentions and enable the reach of Cadbury to a
wider audience.

What was achieved:


A widening of audience, which meant a wider market for the product.

53
“Kuch Meetha Ho Jaaye”

Figure: 3.10 Cadbury Dairy Milk- Kuch Meetha Ho Jaaye Campaign


Source: Cadbury India Website

Communication Objective

The ad was meant to portray Cadbury as something which can be had on all celebratory
occasions. It projected chocolates as a substitute to mithai (sweets) and cheered people to have
chocolate on every joyous occasion.

What was communicated

The basic depiction was that the ad showed that chocolate can be showed as being enjoyed
during Diwali and any other celebratory occasions.

Why they communicated:

An Analysis of the Marketing Strategies of Cadbury India


The idea was mainly to develop preferences among people for chocolates to sweets and
stimulate the demand for chocolates in festive and joyous occasions.

What was achieved:


Depiction of chocolate as a substitute to sweets and the fact that it can be enjoyed in joyous
occasions too.

54
 “Pappu Pass Ho Gaya”

Figure: 3.11 Cadbury Dairy Milk- Pappu Pass Ho Gaya Campaign


Source: Cadbury India Website

Communication Objective:

The ad targeted youngsters and has become part of street language. It has been adopted by
consumers to express joy in a moment of achievement/success. The ad showed association
with little joys of life. The campaign urged people to celebrate every little moment of
happiness in their life with a chocolate.
What was communicated:

An Analysis of the Marketing Strategies of Cadbury India


The ad showed the coming out of results and the passing of a person called Pappu, who had
failed repeatedly. All youngsters were seen having chocolate to enjoy their moment of
success. Thus, it predominantly targeted youngsters.

Why they communicated:

The ad was meant to reach out to youngsters and encourage them to buy chocolates.
What was achieved- Enabling Cadbury to be portrayed as a product which can be had by
youngsters to celebrate their successes.

55
 “Miss Palampur”

Figure: 3.12 Cadbury Dairy Milk- Miss Palampur Campaign


Source: Cadbury India Website

Communication Objective:

The ad targeted the rural parts of India. It focused on Adults and values, like Sacred Cow
campaigns aimed at rural India did fare well. Campaigns aimed at rural India did fare well.
The share of Cadbury increased by more than 20% in rural India. The share of Cadbury
increased by more than 20% in rural India. The brand further strengthened its positions with
the core audience. The brand further strengthened its positions with the core audience.

What was communicated:

An Analysis of the Marketing Strategies of Cadbury India


It shows a villager enjoying the success of his cow becoming Miss Palampur. The entire
village joins in the celebration, with all having chocolates.
Why they communicated- The ad was meant to increase the reach of the product to rural areas
and develop preferences for chocolates in the rural areas.

What was achieved:

Enabled Cadbury to be shown as a product which can be enjoyed in rural areas too.

56
 “Shubh Aarambh”

Figure: 3.13 Cadbury Dairy Milk- Shubh Aarambh Campaign


Source: Cadbury India Website

Communication Objective:

The ad was specifically aimed at indicating a shift from the notion of celebrating happy
occasions with chocolate to the happy occasions with chocolate to the concept of
anticipating concept of something good after consuming the chocolate, a substitute for
mithai. The campaign is aimed at consumers across sectors, and is supposed to have a
balanced appeal across all tiers.

What was communicated:

An Analysis of the Marketing Strategies of Cadbury India


The ad depicted the starting if friendship over having Cadbury and how a bonding
developed over it.

Why they communicated:

The ad was meant for the core group, i.e. consumers in the age group of 15-35 years. The ad
was established to remind consumers about the utility of Cadbury

What was achieved:


Enabled Cadbury to re-establish itself in the eyes of the core target customers. 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.

57
3.19 Marketing Strategy

C
adbury India Limited is always on the lookout of attractive and growing markets. It
believes in creating high barriers for any new entrant to enter the market. The
objective is to earn attractive and resilient returns on its investment faster and create
its monopoly in the market. We will be using market penetration as the growth strategy where
the business focuses on selling existing products into existing markets. It seeks to maintain or
increase the market share of current products, secure dominance of growth markets,
restructure a mature market by driving out competitors, and, increase usage by existing
customers.
The Mithai market by some estimates is almost Rs 18,000-Rs 20,000 crore in size and a large
part of this market is unorganized. We would like to target that segment.
Hospitality is another segment that is growing at a consistent rate.

Chocolates in the corporate gifting segment is the new trend, with variety of gift-packaging
and customization in branding. Chocolates have become a premium gifting option.

India, with 1,270,272,105 (1.27 billion) people is the second most populous country in the
world, while China is on the top with over 1,360,044,605 (1.36 billion) people. The figures
show that India represents almost 17.31% of the world's population, which means one out of
six people on this planet live in India. Although, the crown of the world's most populous
country is on China's head for decades, India is all set to take the numero uno position by
2030. With the population growth rate at 1.58%, India is predicted to have more than 1.53
billion people by the end of 2030.

More than 50% of India's current population is below the age of 25 and over 65% below the
age of 35. About 72.2% of the population lives in some 638,000 villages and the rest 27.8%
in about 5,480 towns and urban agglomerations.

An Analysis of the Marketing Strategies of Cadbury India


Sr. No Age Group Population Population in
Percentage Billion
1 0-18 years 38% 0.48
2 19-35 years 27% 0.34
3 36-65 years 30% 0.38
4 66 above 5.3% 0.07
Total 1.27

Table 3.2 Age Distribution of Cadbury Consumer


Source: Indian Marketing Journal

In this project, I will be targeting the first three groups covering 94.7 % of population.

The detail marketing strategy is given in below for all the age groups.

58
Marketing Plan for Age group 0 to 18

T he total population in this age group is 0.483 billion & we believe that the 50%
population is studying in school the numbers comes around 0.241 billion.
Child connectivity & gifting segment also being attempted as a new growth segment
for the company.
We would like to target this age group by gifting the chocolates in schools. We have traditions
of distributing sweets to all school students after Flag hosting on 15th August (Independence
Day) & 26th January (Republic Day). We propose, Cadbury to tie up with bigger chain of
school for distribution of Dairy Milk Chocolate (Institutional Sales) on 15th Aug & 26th Jan.
Chocolates have become a premium gifting option.
The chocolates have health benefits compared to Indian traditional sweets. CDM has more
nutritional value for children's than any other sweet.

The below graph shows the scenario if we are able to get 1 % market share in total population
at the rate of Rs. 20 per unit of this age group then company can increase its sales by 48
million INR & if we consider the best case of getting 6% market share then company can
increase the market share by 290 million INR.

An Analysis of the Marketing Strategies of Cadbury India


Figure 3.14 CDM Marketing plan for age 0 to 18 years
Source: Indian Marketing Journal

This target can be achieved by doing the tie-ups with bigger schools like DAV Schools (700
schools across India), so that market share in this segment will be captured at faster rate.

In future this can be extended to gifting chocolates on Birthday’s & Children's day.

59
Marketing Plan for Age group 19 to 35

T he total population in this age group is 0.343 billion. This segment can be targeted in
many ways. Research shows that the best way to catch this population on internet (on
Facebook). India has 78 million active users who access Facebook (DNA
News).Most of the people wishes birthday to their friends & family member on Facebook
every day.

It can proposed for Cadbury to tie up with Facebook & launch the online chocolate gifting
programme on Facebook. In the application one week before birthday Facebook will give the
reminder. By using this application one can delight your dear one by choosing the perfect
Chocolate & delivering it on Birthday with one’s birthday message for him or her.

Customers can choose the best Chocolate gift they want to send it across India. Cadbury will
take great care in delivering those Chocolate gifts across India (Through distribution
network). Through these gifts, we deliver the emotions and heartfelt love that we send.
Select the Chocolate, Gift wrapping & Birthday message for your friend & place the order
online. The order will be received in district distributor system; same will be packed &
dispatched by Courier at the delivery address.

The below graph shows the scenario if we are able to get 1 % market share in total population
at the rate of Rs. 55 per unit of this age group then company can increase its sales by 189
million INR & if we consider the best case of getting 6% market share then company can
increase the market share by 1,132 million INR.

Figure 3.15 CDM Marketing Plan for Age 19-35 years An Analysis of the Marketing Strategies of Cadbury India

Source: Indian Marketing Journal

In future this can be extended to gifting chocolates on Valentine's Day, International Women's
Day, Mother's Day, Father's Day & Friendship Day.

60
Marketing Plan for Age group 36 to 60

T he total population in this age group is 0.381 billion. This is majorly working
population of India.

This segment can be targeted in many ways. Chocolates in the corporate gifting segment
(gifting on Birthday at office) is the new trend, with variety of gift-packaging and
customization in branding. Chocolates have become a premium gifting option.

Hospitality is another segment that is growing at a consistent rate.


This population can be targeted on marriages (with wedding invitation card & after marriage
gift), on festivals, special occasions & many more occasions.

The below graph shows the scenario if Cadbury is able to get 1 % market share in total
population at the rate of Rs. 100 per unit of this age group then company can increase its sales
by 381 million INR & if we consider the best case of getting 6% market share then company
can increase the market share by 2,286 million INR.

Figure3.16 CDM Marketing plan for age 36-65 years

An Analysis of the Marketing Strategies of Cadbury India


Source Indian Marketing Journal

Cadbury is focusing on new channels & institutional sale as a means to growth.

The possible ways of approaching all the above strategy are new geographical markets, new
product dimensions or packaging, new distribution channels, and, different pricing policies to
attract different customers or create new market segments.

61
3.20 Marketing Mix

Product

C
adbury India Limited (CIL) confectionary products include Dairy Milk, 5 Star, Eclairs,
Perk, Halls, Bytes and Gems which are the largest selling brands in their segments.
Cadbury’s Dairy Milk (CDM) is its flagship brand, having a market share of 30% and
average daily sales of 1 million bars. It also introduced ‘Cadbury Celebrations’ range with an
array of newly designed Cadbury Celebration packs for various festivals.

Its closest competitor Nestle, comes second with a market share of 22% and comparatively
less diversified products in chocolates. Its products are Kit-Kat, Munch, Milky-bar, Charge,
Classic, and Polo. Kit-Kat is their premium brand in chocolates. In Nestle, the diversification
and revenues across other segment like snacks, coffee, milk products, infant food, and
beverages is higher.

An Analysis of the Marketing Strategies of Cadbury India


While Cadbury gets 76% of its revenues from Chocolates and Nestle a much lower proportion
we observe that Cadbury’s primary focus is in the Chocolate segment. It no doubt has an edge
in the premium chocolate segment. Cadbury is considering diversifying into other segments
too.

Pricing

T he price charged for a chocolate bar can determine whether a consumer will buy it
and the level of sales achieved can determine whether or not Cadbury will make a
profit. Price is also affected by factors such as the state of the economy, what
competitors are charging, the stage reached in the products life cycle and above all what
price the Indian market will bear. Cadbury products are in the range of Rs10 to Rs 20 and
has also introduced the ‘Cadbury Celebration gifting’ ranges available in “Nut
butterscotch”, “Caramel”, “Almond Magic”, “Cashew Magic” & “Raisin Magic”. The range
is priced between Rs 145 & Rs. 155.
62
The entire Cadbury Celebrations line notched a 25% growth in sales for the fiscal year
ending March 2007. It has many variations: The basic range is priced between Rs 60 and Rs
100. The panned/gift range is Rs 145-155. Cadbury’s Heroes is Rs 50-Rs 100. The Rich Dry
Fruit collection will be in the region of Rs 200-500. The entire line is distributed nationwide
at 175,000 outlets and the panned or gift line is sold at 100,000 outlets across one-million-
plus population towns and cities.

CADBURY NESTLE
PRODUCT PRICE PRODUCT PRICE
Dairy Milk 5, 10, 20, 30 Kit Kat 5, 10, 20
5 Star 5-10 Bar One 5-10
Perk 5-10 Munch 5-10
Celebrations 60-150 Dairy Box 50
Temptations 30 Kit Kat Dark 35

Table 3.3 Price comparison of Cadbury vis-à-vis Nestle


Source: Self survey

SEGMENTS PRODUCT PACK SIZE RATE


Value Dairy Milk 9.2 Gram Rs. 5
Value Dairy Milk Shots 18.6 Gram Rs. 10
Value Dairy Milk 17 Gram Rs. 10
Value Dairy Milk 38 Gram Rs. 22
Mid-Tier Dairy Milk 42 Gram Rs. 35
Crackle
Mid-Tier Dairy Milk Roast 42 Gram Rs. 35
Almond

An Analysis of the Marketing Strategies of Cadbury India


Mid-Tier Dairy Milk Fruit 42 Gram Rs. 35
& Nut
Premium Dairy Milk Silk 60 Gram Rs. 55
Premium Dairy Milk Silk 60 Gram Rs. 55
Fruit & Nut
Premium Dairy Milk 60 Gram Rs. 55
Orange Peel
Super Premium Dairy Milk Silk 145 Gram Rs. 125
Super Premium Dairy Milk Silk 145 Gram Rs. 125
Fruit & Nut
Super Premium Dairy Milk 145 Gram Rs. 125
Orange Peel

Table 3.4 Price range of Cadbury Dairy Milk and its variants
Source: Self survey

63
Promotion

T
he basic purpose of promotion and advertising by Cadbury is to make Cadbury
synonymous with chocolate and -
 Educate the market
 Build brand awareness
 Increase consumption
 Encourage seasonal purchases

Promotion Strategies:
 Use of emotional appeals in advertising
 Customer surveys as a means to align the advertisements with evolving

An Analysis of the Marketing Strategies of Cadbury India


sets of customers.
 Packaging as a tool to communicate quality
Till the mid-nineties, Cadbury’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.
However, Cadbury changed its tack and the communication campaigns were targeted at
adults, to expand the chocolate market and increase sales.

64
Place

C
adbury India has manufacturing locations at Thane, Pune, Himachal Pradesh, Gwalior
and Bangalore and has Cocoa operations at Cochin. Cadbury's distribution network reaches
out to six lakh outlets each for its confectionery and chocolate brands. Chocolates need to
get retailed at larger and better outlets while all the products below Rs 3 need a different
distribution network. Chocolate needs to be distributed directly, unlike other FMCG
products like soaps and detergents, which can be sold through a wholesale network. 90% of
chocolate products are sold directly to retailers. Distribution, in the case of chocolates, is a
major deterrent to new entrants as the product has to be kept cool in summer and also has to
be adapted to suit local tropical conditions. Cadbury's distribution network used to
encompasses 2100 distributors and 450,000 retailers.

Figure 3.17 Cadbury Offices & Factories in India


Source: Cadbury India

An Analysis of the Marketing Strategies of Cadbury India


The company has a total consumer base of over 65 million. Besides use of IT to improve
distribution logistics, Cadbury is also attempting to improve distribution quality. To address
the issues of product stability, it has installed VISI coolers at several outlets. This helps in
maintaining consumption in summer, when sales usually dip due to the fact that the heat
affects product quality and thereby off take. To avoid cannibalization of its higher priced
products from lower priced ones, Cadbury is setting up two separate distribution channels –
one for Core business & other for Mass markets, with different stockists, wholesalers and
retailers. One set will be dedicated to Cadbury’s high-end products and traditional chocolates.
The other will cater to the mass market brands namely Chocki, Halls, Eclairs et al — all
products priced below Rs 3. But today, Cadbury's distribution network reaches out to six lakh
outlets each for its chocolate & confectionery brands (i.e. total reaching12 lakh outlets).

65
3.20 Compartive Objectives Analysis

Objectives Cadbury India Nestle

Corporate  Broadening consumer appeal and  Constant focus on innovation and


Objectives extending reach to newer markets renovation and providing greater
value to consumers
 Sustained growth of market share
through aggressive product  Striving for the low cost operation
development by pursuing and accelerating
industrial restructuring and aiming
 Striving for international quality in for manufacturing efficiency
the products and processes
 Regaining an impulsive distribution
 Focusing on the cost culture
competitiveness, productivity and
innovative utilization of assets

 Energizing and developing it people

Marketing  Setting up new capacity and  Distribution through innovative


Objectives increasing volumes consumer promotions and trade
offerings and supporting key price
 Get more people to eat more points
chocolate, which calls for making it
more affordable and being more  Maintain the trust of customers on
innovative Nestle products that comes from a
quality image that has been built
 Could get into new product
over a century
categories like gums where the
global portfolio is impressive

An Analysis of the Marketing Strategies of Cadbury India


Aiming for larger footprint in the
confectionary space

Advertising  Leverage further the Cadbury label,  To create focus on nutrition,


Objectives which is what the company has been wellness and fitness and the
doing with aggressive advertising increasing health consciousness
and promotions amongst the urban population

Table 3.5 Comparative Analysis of Cadbury & Nestle


Source: Inder Science

66
CHAPTER
FOUR
67

An Analysis of the Marketing Strategies of Cadbury India


4. RESEACRH
METHODOLOGY

4.1 Data Collection & Tabulation

A
chieving accuracy in any research requires in depth study regarding the subject. As

An Analysis of the Marketing Strategies of Cadbury India


the prime objective of the project is analyze the marketing strategies of Cadbury, the
research methodology adopted is basically based on primary data via which the most
recent and accurate piece of firsthand information could be collected. Secondary data has been
used to support primary data wherever needed.

 Sources of Primary data

Questionnaire Method

 Physical

 Virtual (Online)

Observation Method

68
The main tool used was, the questionnaire method, observation method has been continuous
with the questionnaire method, as one continuously observes the surrounding environment
one works in.

 Procedure of research methodology

Target geographic area was Kolkata .To the above mentioned geographical area
questionnaire was given. Finally the collected data and information was analyzed
and compiled to arrive at data the conclusion and recommendations given.

 Sources of secondary data

Used to obtain information about Cadbury and its competitor history, current issues,
policies, procedures etc, wherever required.

Internet

Magazines

Newspapers

An Analysis of the Marketing Strategies of Cadbury India

 Procedure of research methodology

Compilation of information was done through continuously referring to the above


mentioned secondary sources.
Various newspapers, magazines were referred to, in the process. Clippings were
obtained and incorporated in this project. The proper citations have been mentioned
as and when necessary.

The vast gamut of internet provided access to wide knowledge base, which added to
the content of this project substantially.

69
4.2 Sampling Techniques

Data Scrutiny:

The data is analyzed on the basis of suitable tables by using mathematical techniques.
The technique that I have used is bar technique.

Survey design:

An Analysis of the Marketing Strategies of Cadbury India


The study is a cross sectional study because the data were collected at a single point
of time. For the purpose of present study a related sample of population was selected
on the basis of convenience.

Sample Size and Design:

A sample of 100 people was taken on the basis of convenience. The actual consumers
were contacted on the basis of random sampling.

Also the indirect competitors of Cadbury – the sweet sellers (Mithaiwalas) were
survey to add quality to the data obtained.

70
Some data was also obtained through online surveys using Google Docs and Forms

Research Period:

Research work was carried over a period of 21 days.

Research Instrument:

This work is carried out through self-administered questionnaires. The questions


included were open ended, dichotomous and offered multiple choices.

An Analysis of the Marketing Strategies of Cadbury India

71
4.3 Data analysis
The data collected through survey was analyzed with help of simple percentages. Tabular and
graphic methods, which included pie charts and bar graphs, were used to analyze data.

Microsoft Excel was extensively used in the preparation of the data in to meaningful
coherent and simple information graphics:

 Bar Graphs

 Pie Charts

 Line curves

Tools of Analysis:

The simple percentage analysis is used for calculating the percentage of satisfaction
level in the total respondents.

Likert Scale is employed to capture the relative ratings of comparative parameters


like price, taste, packaging etc.

To determine the level of satisfaction for the various categories combined mean is used. An Analysis of the Marketing Strategies of Cadbury India
Since Likert scale is used to find out the satisfaction level the value of combined mean
shows the level of satisfaction from 1 to 5 and 2.5 is the middle point. Higher the value of
mean shows higher satisfaction level and lower the value of mean shows lower satisfaction
level.

72
4.4 Survey Results

T he survey was carried out by in order to find out the reach and popularity of Cadburys
in India. The chocolate consumers were asked questions like the chocolate brand that
they normally eat, and the features that they look for in a chocolate etc. The chocolate
consumers had ranked Cadburys as the best chocolate brand and a few consider Nestle as a
good chocolate brand. It was also observed that Cadburys is facing strong competition from
foreign brands. This could be due to the fact that the respondents of our survey were mostly
the well to do population from the middle, upper-middle and upper class of people

We had 100 respondents to our survey. Most of the respondents were from the 18-25 and 26-
50 age groups. Most of the respondents spent more than 100 rupees on chocolates in a month.
Almost 70% people rated Dairy Milk the most consumed chocolate closely followed by 5 star
and Perk. Also the reason why Dairy Milk was preferred was because of the taste. 66% people
preferred to gift celebrations for many occasions as against 23% who prefer gifting foreign
chocolates.

Thus I understood better the chocolate market in India. Cadbury’s has a very good market
share currently but will have to constantly revamp their strategies in order to compete with
the foreign brands.

Table 4.1 The frequency of ratings as given by the respondents

Particulars Highly Satisfied Neutral Dissatisfied Highly


satisfied dissatisfied
Price 22 53 20 3 2

An Analysis of the Marketing Strategies of Cadbury India


Quality 38 42 18 1 1
Taste 44 29 14 8 5
Available 26 44 17 9 4
Package 40 39 14 3 4
Advertisement 40 35 14 5 6

73
Figure 4.1:

An Analysis of the Marketing Strategies of Cadbury India


Pie chart depicting the most common consumption reasons of Cadbury

Reasons for Consumption of


Cadbury Products

18% 22%
Self Consumption
Gift
29%
31% For Children
Festival

74
Figure 4.2
Pie chart depicting consumer preferences for chocolates

CONSUMER PREFRENCES
Cadbury Nestle Amul Others

9% 1%

18%

72%

Figure 4.3
Word cloud showing most commonly used adjectives people associate with Cadbury

An Analysis of the Marketing Strategies of Cadbury India

75
Figure 4.4
Area Graph depicting the various occasions of Cadbruy purchase

Occasions of Purchase of Cadbury

40

20
9 22
23 31
0 15
Before
Express Occasions of Purchase of Cadbury
good work Celebrate
Feelings Gifting
Casual

Occasions of Purchase of Cadbury

Figure 4.5
Bar graphs showing age distribution of Cadbury’s consumers

Age Distribution of Cadbury Consumers

An Analysis of the Marketing Strategies of Cadbury India


30

25

20

15

10

0
Below 10 years 10-17 years 18-25 years 25-50 years 50+ years

Series 1

76
CHAPTER
FIVE
77

An Analysis of the Marketing Strategies of Cadbury India


5.1 FINDINGS

After going extensively through resources, news and other literature, I found the following
reasons as the fundamental pillars for the robust growth and expansion of Cadbury in its
efforts to garner larger share of the market pie

Global management processes:

India occupies a high profile position in the global organization, with advocates in
regional and global headquarters. Global management has allowed the local operation
a high degree of flexibility in growing the business, understanding that asset utilization
may be lower and returns slower to arrive, but expecting volume share to compensate
for lower margins in the long run.

Local management processes:

The Cadbury India team is all-Indian and has a deep understanding of local market
dynamics. The business is set in a way that highlights localization across all facets –
driving the belief that the only way to succeed in India is by developing localized
business models. For example, the company tailored the chocolate formula in India to
prevent melting in the country’s open-air high frequency store environment.

Customized business models:

An Analysis of the Marketing Strategies of Cadbury India


Local management has set up systems to test and develop products from the ground
up with specialized interlinked cells that execute innovation and market testing hand-
in-hand. Cadbury India is known as a key product innovator. Besides Dairy Milk, the
entire Cadbury product portfolio in India has been developed locally to suit Indian
consumer tastes. Packaging, marketing and distribution have all been tailored to local
market conditions.

Royalty Structure:

Royalty to Cadbury Schweppes is around 1 per cent of the turnover. But with that, the
company gets unlimited access to latest technology, new products and so on. They can
also introduce new products from the parent, if it is suitable for Indian market.

Subtle reengineering of raw material mix led to cost savings:

Cadbury has reduced its dependence on cocoa, thus lowering its exposure to volatile
raw material prices as well as cutting costs. It appears that they have subtly altered its
78
recipe by using less of costlier cocoa and more of milk and sugar. Cadbury's launch
of Perk has also contributed significantly in reducing the proportion of cocoa in the
overall raw material mix.

Brand Building:

Since its inception, Cadbury in India has stayed ahead thanks to their constant
marketing initiatives, that have at all points in time understood the needs of and
opportunities in a changing nation but Nestle had stood firm in second position
resulting from their responsibilities and providing quality products. Amul an Indian
company has been able to create brand quality and thus selling their product through
their name.

Wide variety of brands:

The '60s was a decade which saw the launch of brands that are etched in the hearts of
generations of Indians - Tiffins, Nut Butterscotch, Caramels, Crackle, 5 Star and
Gems. It was a strategy that introduced consumers to a variety of tastes and product
forms leading to a rapid increase in chocolate consumption.

Quality products at low price:

Cadbury's Eclairs was launched in 1972, at the then princely sum of 0.25p and was an
instant hit. It continues to be one of the biggest brands in the Cadbury portfolio and
offers the lowest price point at which consumers can experience the real taste of
chocolate. But as compared to other companies the price are very high because of lack
of competition.

Innovative & attractive packaging:

In the years that followed, Cadbury invested in technology and made an impact

An Analysis of the Marketing Strategies of Cadbury India


through innovative packaging. This decade experienced a continuous growth in
volumes as Cadbury launched a flurry of brands with different pack sizes, at various
price points. The now ubiquitous Sheet Metal Dispenser seen on cash counters of
thousands of shops for dispensing chocolates was an innovation that helped brand the
colour purple in the minds of the Indian consumer.

Timely expansion of market:

In the 90's Cadbury realized both the scope and the need to expand the market. Hitherto
perceived only as a children's product, Cadbury 'universalized' the chocolate market.
The multi-award winning advertising campaign - 'The Real Taste of Life' - was
launched, capturing the childlike spontaneity in every adult.
Moulded chocolate and éclairs also showed satisfactory growth. This has also helped
in improving the infrastructure and distribution reach of the company in chocolate
and confectionery segment.

Introducing new products:

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Cadbury 5 Star with its “Energizing Bar” campaign targeted the youth, offering them
a mind and body charge. While pre-empting competition, Cadbury Perk - the light
chocolate snack - pushed chocolates into the wider area of snacking by promising
'Thodi Si Pet Pooja Kabhi Bhi Kahin Bhi' (anytime, anywhere) and has introduced
new flavours like ‘Mint Hint’, ‘Mango Tango’, Very Strawberry’. It has also
introduced various new chocolates like Gollum and Fruits in recent years.

Constant diversification:

Faced with rapidly changing markets and increased competition, Cadbury launched
Truffle to hit the high ground of great tasting chocolate. This was followed by Picnic
in 1998, which with its unique, multi-ingredient construct promises to take chocolates
straight into the realm of snacks. With the introduction of Gollum and Fruits Cadbury
has taken the market by surprise.
Commitment of expansion:

With the launch of Trebor Googly, the tangy, fizzy candy, Cadbury took the market
by surprise and marked the entry of Trebor into the fast growing Indian sugar
confectionery market. The extension of Googly to a Mint flavour reinforces Cadbury's
commitment to establish the Trebor name as a strong player in the value added sugar
confectionery market.

Repositioning:

Cadburys has been repositioning its products for children to adults and for celebrative
occasions. A repositioning campaign was arranged for dairy milk that showed adults
doing unconventional things (like a lady breaking into a jig in the middle of the
overflowing Cricket (stadium) driving home the message that adults could enjoy
chocolate as well.

Information technology:

An Analysis of the Marketing Strategies of Cadbury India


At Cadbury India they believe that effective communication n and availability of
information 'at the right time and the right place' is critical for an edge in business. In
order to achieve this they realised the importance of and have in place, an effective IT
infrastructure.

Through IT investment, they aim to

 Remain competitive in the fast changing environment.

 Incorporate best practices in the business processes.

 Arrive at uniform software and business practices globally within


Cadbury Schweppes.

 Achieve flexibility of systems to keep pace with changing


environments.

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5.2 CONCLUSION

T
he Indian Chocolate Industry is a unique mix with extreme consumption patterns,
attitudes, beliefs, income level and spending. Understanding the consumer demands
and maintaining the quality will be essential. Pricing is the key for Cadbury’s to make
their product reach to every consumer houses. Right pricing will make or break the product
Success. There’s also an immense scope for growth of chocolate industry in India,
geographically as well as in the product offering. So we think that bringing online
sales(through Facebook) & increasing the institutional sales(in unique way) would bring
prosperity and increase the sales of Cadbury’s as a whole again resulting in the goodwill of
the company.

Cadbury has indeed emerged as the Market Leader in the Chocolate industry. And as a leader
embraces the characteristic of group preference over oneself, Cadbury has practically applied
this principle. The marketing strategies of Cadbury has not only increased the share of
Cadbury in the Market pie, but also it has increased the very shape of the pie itself.

Cadbury hit the consumer at the place which is the key aspect of a consumer – his mind.
Rather than employing conventional or short cut sales promotion strategies, Cadbury played
the long run by aiming at the consumer mindset rather than the consumer wallets. And indeed
it paid off.

The stunning marketing efforts is nothing short of an exceptional, out-of-the-box spectacle.


In it, lies valuable teachings for any firm aiming to take a toll in the industry, in general, and

An Analysis of the Marketing Strategies of Cadbury India


a marketer, in particular.

In the end I conclude by reaffirming the adage:


“Business has only two functions – Innovation & Marketing”
And Cadbury has personified the maxim in letter as well as in spirit.

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5.3 RECOMMENDATIONS
Maintain dominance in chocolate segment.

Medias such as the internet (Facebook, Google+ etc.) and the radio enable large
amount of cheap advertisement. Internet is a good place to sell goods, even
confectionary ones. Provides a new consumer group with access to Cadbury and
allows even larger sales due to a larger overall consumer group. (Business studies)

Many new players are trying to enter Indian market so it should formulate new
strategies so as not to lose market share.

New channels such as gifting, child connectivity and value for money offering to be
the key growth drives.

Grow volume sales at least 20% p.a. over the next years.

One new major product from International portfolio should be launch in India every
year.

FDI will bring in many new products and competitors so Cadbury will have to
maintain their strong market distribution channel so as not to lose market share.

They need to maintain high standards and should be careful that there product
remains sterile. And is not effected by insects.

They should bring many more flavours of Dairy Milk with focus on Health
conscious market segment i.e. low sugar chocolate bars

An Analysis of the Marketing Strategies of Cadbury India

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APPENDIX
BIBLIOGRAPHY
83

An Analysis of the Marketing Strategies of Cadbury India


The following sources were referred to extensively during the entire course of this research
project

BOOKS & JOURNALS

 A History of Cadbury's Sweet Success. (May 2010). London Times.

 Afoakawa, E. (2010). Chocolate Science & Technology. Wiley Blackwell.

 Anonymous. (2014). Innovative Marketing Case Studies. Journal of Marketing


Research.

 Bradley, J. (2008). Cadbury's Purple Reign. John Wiley and Sons.

 Company Profile for Cadbury PLC. (October 2008).

 Decision Sciences. (2009).

 Hamdan, A. (n.d.). Psychology and Marketing. Wiley Publications.

An Analysis of the Marketing Strategies of Cadbury India


 Jones, G. (1984). Multinational Chocolate: Cadbury Overseas. Business.

 Manoj, D. (2012). Scrutiny of Cadbury. The Marketing Journal.

 Reshaping the Cadbury Experience. (2011). Cambridge University Press.

 Review, H. B. (2010).

WEBSITES

84
 (n.d.). Retrieved from Cadbury India: cadburyindia.com

 (n.d.). Retrieved from Mondelez International: mondelezinternational.com

 (n.d.). Retrieved from The Economic Times: etnow.com

 (n.d.). Retrieved from Online Journals: Indianjournalofmarkerting.com

 (n.d.). Retrieved from Inder Science: inderscience.com

 (n.d.). Retrieved from American Management Association: ama.org

 (n.d.). Retrieved from Google Forms: google.com/forms

An Analysis of the Marketing Strategies of Cadbury India

85
QUESTIONNAIRE

1. Name:

2. Age Group: [ ] Below 10 years [ ] 10-17 years


[ ] 18-25 years [ ] 26-50 years
[ ] 50+ years

3. Gender: [ ] Male [ ] Female

4. Which name comes to your mind, when you hear the word ‘Chocolate’?

5. How many bars of Chocolates do you consume per week?

[ ] 0-3 [ ] 3-7

[ ] 8-14 [ ] 15+

6. Do you like to consume Cadbury’s product? An Analysis of the Marketing Strategies of Cadbury India

[ ] Yes [ ] No

7. If ‘Yes’, to question no.3, then which product of Cadbury do you like the most?

[ ] Dairy Milk &


[ ] Five Star
[ ] Perk
[ ] Silk
86
[ ] Gems
[ ] Others

8. For what purpose do you purchase Cadbury’s product?

[ ] Self Consumption [ ] Gift


[ ] Festivals [ ] For Children

9. Name the Cadbury’s product which comes to your mind for purchase on the
following occasions:

i. Before a good work:

ii. To express feelings:

iii. To celebrate an occasion:

iv. As premium gift:

v. Casual consumption

10. On a scale of 1 to 5, 1 being not important and 5 being very important, when
purchasing chocolate, how important are following factors to you?

An Analysis of the Marketing Strategies of Cadbury India


1 2 3 4 5
Price
Taste
Packaging
Availability
Brand Ambassador

11. On a scale of 1 to 5, how would you rate Cadbury Dairy milk on following
attributes?

1 2 3 4 5
Price
Taste
Packaging
Availability
87
Brand Ambassador

12. Do you think Cadbury Chocolates is a commodity consumed by children only?

[ ] Yes [ ] No [ ] Maybe

13. Do you believe that now people have become more health conscious that the need
for chocolate has declined?

[ ] Yes [ ] No [ ] Maybe

14. Do you think sugar free Cadbury chocolates should be introduced to attract health
conscious people?

[ ] Yes [ ] No [ ] Maybe

15. Do feel uncertain about the quality and hygiene of the products of Cadbury?

[ ] Yes [ ] No [ ] At times

16. If not Cadbury, then which company’s chocolate will you prefer?

[ ] Amul [ ] Nestle [ ] Others

17. What do you think is the difference among Cadbury and its competitors An Analysis of the Marketing Strategies of Cadbury India

[ ] Taste [ ] Quality [ ] Packaging

[ ] Distribution [ ] Promotion[ ] Goodwill

[ ] Others

18. Suggest a new tagline for Cadbury.

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