A 51% subsidiary of the Cadbury Schweppes UK, Cadbury India enjoys leadership position in Chocolate

segment in India. The brand name 'Cadbury' is synonymous with chocolates in India. The company has
leading brands in all segments viz. 5 star (countlines), Dairy Milk (bars), Gems (panned confectionery),
Eclairs (toffees) and Perk (wafer chocolates).

Shareholding Pattern

The share capital of the company is Rs. 35.7

crore and the number of total shares
outstanding amount to 3.57 crore. The face
value per share is Rs.10. The share is currently
trading at Rs. 418, as on May 22, 2001. The
market capitalization of the company is
Rs.1990.52 crore. The parent Cadbury
Schweppes holds 51% stake in the company.

Board of Directors

C Y Pal - Chairman
Matthew Cadbury - Managing Director
Rajiv Wahi - Vice Chairman
Jaithirth Rao - Director
S N Talwar - Director
Rajeev Bakshi - Director
Harsh Mariwala - Director
N V Iyer - Director
David Kappler - Director
B Puri - Executive Director
P Chhaya - Executive Director
J Strydom - Executive Director
G Sridhar - Executive Director
G M Bhat - Executive Director

Business Overview

Cadbury India's main source of revenue is its 70% bite of the 23,000 tonnes Indian chocolate market.
It is also present in the malted food market (Bournvita enjoys a 24 percent share of the 20,000 tonnes
brown drinks market). Of late, the company has ventured into the 120,000 tonnes sugar confectionery
market ('Googly') and has gained about 5% market share there. The revenue break up of its different
business segments is as follows:
Despite the fact that Indians have strong affinity for sweets, the size of domestic confectionery market
is small on account of traditional consumer tastes and habits. The Chocolate market in India is a niche
market penetrated largely in urban areas and per capita consumption is low as compared to those in
developed countries of the West. But future prospects of the chocolate category looks good as the
company plans to move into the arena of snack foods, as it has done in the Western markets.

The market for Malted food drinks is large and is characterized by a few large players. The market can
be broadly segmented into white malted food drinks which dominates in the Southern and the Eastern
parts of the country and Brown Malted food drinks which dominate in the North and the West. Large
brands like Bournvita and Horlicks dominate in Malted food drinks sector and the growth has been
steady in the last five years.

The future mission of Cadbury India is 'A Cadbury in Every Pocket'. The company's business strategy
hinges on following for driving its future growth:

• Increase the width of chocolate consumption, through low price point packs and distribution
focus.
• Increase depth of consumption, targeting regular chocolate consumers through generating
impulse and a dominant presence at Point of Sale.

• Maintain image leadership through a superior marketing mix.

• Be a significant player in the gifting segment, through occasion linked gift packs.

• Build critical mass in the sugar business by introducing value-added sugar confectionery
products.

Future revenue growth will be through increasingly higher volumes rather than price increases. The
management believes that price increase can only be a short term objective. It is volumes, which are
very important to achieve the long-term goal of having a wide consumer base.

The company sees its growth in future in market expansion and new product launches. Increased
reach, new launches, higher marketing spend and intensive promotions - the mix, Cadbury is looking
at to fuel its future growth. The company is also looking for acquisition of brands, and its huge cash
reserves might be utilized for the purpose.
 Performance of segments

Items Sales Value (Rs.Lakhs)

12/1999 12/2000 %Change
Malted Foods 11436.90 13144.75 14.93%
Cocoa Powder and Drinking Chocolates 747.22 723.94 -3.12%
Chocolates, Coated Wafer Biscuits and
38923.60 43245.03 11.10%
Sugar Confectionery.

Products

The company manufactures and sells

• Chocolates
• Sugar confectionery
• Malted foods,
• Cocoa powder,
• Drinking chocolate and malt extract

Established brands of the company in the Chocolate segment includes Dairy Milk, Perk, Crackle, 5 Star,
Eclairs and Gems. The main brands in sugar confectionery category are Googly, Frutus and Gollaum. In
the malted health category, Cadbury has a strong brand in Bournvita. Other food drinks offered by the
company are Cadbury’s Drinking Chocolate and Cadbury’s Cocoa powder. The company is also into the
business of Soft drink and has drinks like Canada Dry and Crush.

SWOT Analysis
Strengths:

Strong brand names like Cadbury Dairy Milk, Five star and Eclairs.
Rich product mix.
Support from the parent Cadbury Schweppes.
Weaknesses:

Lack of launch of new brands in Chocolates segment.

Opportunities:

The Indian market and more specifically the urban areas where the penetration of Chocolates is low
can be developed as a future market through affordability and availability.
Using information and technology to bring efficiency in logistics and distribution.
Threats:

Stiff competition in Confectionery segment.

The company has large exposure to foreign currency exchange rate risk, mainly on account of
imported cocoa beans and cocoa butter in US Dollar and Pound Sterling.
Branding strategies: Cadbury Bourn vita 5 star

Cadburys Bourn vita was launched in the year 1948 that continuously reinventing
itself till date in terms of product, packages, promotion and distribution. The
communication of the brand also changes according to the changing customers
and their preferences. During 1970s, "Goodness that grows with you" was the
campaign which focused upon “good upbringing”. In 1980s, "Brought up right,
Bournvita bright" campaign was used. During 1990s all the brands in the
category, concentrated upon physical benefits, whereas Bourn vita focuses upon
both physical and mental benefits. 'Real Achievers who have grown up on Bourn
vita' was one of the successful campaign.

Branding Strategy:

As a consumer of the product, children will be expecting more taste and as a

customer, mothers will give importance to the nourishment. In order to fulfill the
desires, Cadburys had found a new way of branding strategy. The idea is
combining the two most powerful brands of the company, five star and Bourn
vita. This will further enhance the strength of both the brands, in terms of taste
and energy. These two brands will be grabbing a distinct place in the mind of the
customers. This new variant of Bourn vita 5 Star is positioned as a unique
magical treat that offers the goodness of malt food drink and exciting caramelized
taste. This is one of the new marketing strategies used to boost the presence of
brand.
Dairy milk is also a good brand from Cadburys. Then why they didn’t use that
brand. They would have associated dairy milk, like “Bourn vita dairy milk” by
saying enrichment of the milk. By doing this, they would have got triple
advantage, the brand value of two brands and the milk shakti. I think 5 star brand
name is more catchier, so they decided to do so. Do you know any other brands
did like this before….?