CADBURY INDIA

PRESENTATION BY GROUP 8MANASI SAKPAL- 43ANAGHA SAWANT – 44AAKASH SHAH – 45FATIMA SHAH – 46MOHSINA SHAIKH – 47NITESH SHIROLKAR - 48

INTRODUCTION

• CADBURY IS A LEADING GLOBAL CONFECTIONARY COMPANY.

• IT OPERATES IN OVER 60 COUNTRIES.• CADBURY SELLS ITS PRODUCTS ( CANDY,

GUMS, CHOCOLATES) IN ALMOST EVERY COUNTRY.

• IT IS A BRITISH COMPANY WITH ITS HEADQUARTERS IN LONDON.

HISTORY• Cadbury is a very old trusted name. It

all started in Birmingham in England when John

Cadbury started his family grocery shop with side business of cocoa and chocolate products in around 1824. His two sons, Richard and George, expanded their family business of cocoa and chocolate. Bournville, a town near Birmingham, was build by them as a part of expansion of their business.

MARKETING OBJECTIVES

• GROW SHAREHOLDER VALUE…OVER THE LONG TERM

• CADBURY IN EVERY POCKET• MARKETING STRATEGY IS AIMED AT

ACHIEVING THIS VISION BY GROWING THE MARKET, BY APPROPRIATE PRICING STRATEGY THAT WILL CREATE A MASS MARKET AND TO HAVE OFFERINGS IN EVERY CATEGORY TO WIDEN THE MARKET

TARGET MARKET • THE TARGETTED MARKET IS

DIFFERENTIATED AS FOLLOWS: METRO CITIES: 15% SMALL TOWNS: 8% RURAL AREAS : 2%

CADBURY CATERS TO OVER 60 MILLION CONSUMERS IN INDIA

MARKET SEGMENTATION

• MARKET SEGMENTATION IS THE PROCESS IN MARKETING OF GROUPING A MARKET (I.E. CUSTOMERS) INTO SMALLER SUBGROUPS. THESE MARKETS ARE OFTEN TERMED NICHE MARKETS OR SPECIALTY MARKETS

• THE PURPOSE OF SEGMENTATION IS TO IDENTIFY AND TARGET PRIME CUSTOMER GROUPS (EG THE 20% THAT ACCOUNT FOR 80% OF YOUR SALES) SO THAT YOU GET THE MAXIMUM RETURN FROM A LIMITED MARKETING BUDGET

GEOGRAPHIC SEGMENTATION

• THE MARKET PRESENTLY HAS CLOSE TO 60MN CONSUMERS AND THEY ARE MAINLY LOCATED IN THE URBAN AREAS

• HOWEVER, ALMOST ALL OF THIS CONSUMPTION IS IN THE CITIES, AND RURAL INDIA IS NEARLY ‘CHOCOLATE-FREE’.

• THE FACT IS THAT THREE QUARTERS OF INDIANS LIVE IN RURAL AREAS. “AVERAGE SUMMERTIME TEMPERATURES REACH 43 DEGREES CELSIUS IN INDIA. CHOCOLATE MELTS AT BODY TEMPERATURE OF 36 DEGREES.”

DEMOGRAPHIC SEGMENTATION

AGE- • CHILDREN - 55%• ADULTS - 12%• YOUNG ADULTS - 33%

• INCOME LEVEL- IN THE MIDDLE AND HIGHER INCOME GROUPS

MARKETING MIX

• THE TOOLS AVAILABLE TO A BUSINESS TO GAIN THE REACTION IT IS SEEKING FROM ITS TARGET MARKET IN RELATION TO ITS MARKETING OBJECTIVES. IT IS THE GENERALLY ACCEPTED AS THE USE AND SPECIFICATION OF THE “FOUR P’S” DESCRIBING THE STRATEGIC POSITION OF A PRODUCT IN THE MARKETPLACE.

• PRODUCT• PRICE• PLACE• PROMOTION

PRODUCT

• PRODUCT VARIANTS • CURRENTLY CADBURY INDIA OPERATES IN

FOUR CATEGORIES VIZ. CHOCOLATE CONFECTIONERY, MILK FOOD DRINKS, CANDY AND GUM CATEGORY

• CADBURY DAIRY MILK, 5 STAR, PERK, ÉCLAIRS AND CELEBRATIONS

• CANDY CATEGORY HALLS• BUBBLE GUM BRAND: BUBBALOO• BOURNVITA - THE LEADING MALTED FOOD

DRINK (MFD)

PRODUCT INNOVATIONS 5 STAR:•CONSUMER FEEDBACK SUGGESTED THAT THE OLD 5 STAR WAS TOO CHEWY SO IT WAS MADE SOFTER AND CRUNCHY

PERK:•PERK WAS MADE MUCH LIGHTER AND THE SIZE OF THE BAR INCREASED TO MATCH NESTLE’S MUNCH. PERK HAD BEEN UNDER FIRE FROM NESTLE’S DEADLY DUO OF KITKAT AND MUNCH, BUT AFTER THE RELAUNCH, ITS MARKETSHARE IS TWO PER CENT MORE THAN KITKAT’S. AND, THE FIVE-YEAR-OLD BRAND IS NOW ALMOST AS BIG AS THE DECADES-OLD 5 STAR IN SIZE, BOTH IN THE REGION OF RS 50-55 CRORE.

HEROES:•PACKAGING INNOVATION HAS PLAYED A VITAL ROLE IN REVAMPING OF VARIOUS CADBURY’S BRANDS.HEROES BRAND IS SIMPLY A MULTI-PACK WITH MINIATURES OF ALL ITS MOST POPULAR BRANDS IN A SINGLEOUTER CASE.

PACKAGING•

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.

• CADBURY INVESTED NEARLY RS 25 CRORE (RS 250 MILLION) THIS YEAR ON NEW MACHINERY FOR THE IMPROVED PACKAGING.

PRICE

• THE RS 5 PRICE POINT ACCOUNTS FOR MORE THAN HALF OF ALL CHOCOLATE SALES

• TODAY, CADBURY HAS FOUR PRODUCTS AT THIS PRICE POINT: CDM, PERK, 5 STAR AND GEMS.

• “ THIS IS A POTENT PRICE POINT IN INDIA, BECAUSE THE AVERAGE PURCHASING POWER IS ABYSMALLY LOW”, IS WHAT INDUSTRY ANALYST HAVE TO SAY.

VOLUME LED GROWTH STRATEGY

• CADBURY HAS FOLLOWED A WELL-PLANNED STRATEGY OF FUELLING VOLUME GROWTH BY INTRODUCING SMALLER UNIT PACKS AT LOWER PRICE POINTS. SIMULTANEOUSLY, THE COMPANY SEEMS TO HAVE ASTUTELY JUGGLED WITH THE LARGER PACK SIZES AND RAISED PRICES TO A DEGREE HIGHER THAN WHAT APPEARS AT FACE.

EARNINGS SENSITIVITY FACTORS

• COCOA BEAN PRICES: DOMESTIC AS WELL AS INTERNATIONAL PRICES OF KEY RAW MATERIAL - COCOA HAVE SIGNIFICANT IMPACT ON MARGINS.

• 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 FLUCTUATION: AS 20% OF RAW MATERIAL IS IMPORTED, CHANGES IN CUSTOM DUTIES & FOREIGN EXCHANGE FLUCTUATIONS HAVE SIGNIFICANT IMPACT ON THE FINAL COST OF THE PRODUCT.

• 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.

PLACE

• PLANT LOCATIONS• IN INDIA, CADBURY BEGAN ITS OPERATIONS IN

1948 BY IMPORTING CHOCOLATES. AFTER 60 YEARS OF EXISTENCE, IT TODAY HAS FIVE COMPANY-OWNED MANUFACTURING FACILITIES AT THANE, INDURI (PUNE) AND MALANPUR (GWALIOR), BANGALORE AND BADDI (HIMACHAL PRADESH) AND 4 SALES OFFICES (NEW DELHI, MUMBAI, KOLKOTA AND CHENNAI). THE CORPORATE OFFICE IS IN MUMBAI.THESE FACTORIES CHURN OUT CLOSE TO 8,000 TONNES OF CHOCOLATE ANNUALLY

DISTRIBUTION• 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. • CADBURY'S DISTRIBUTION NETWORK USED TO

ENCOMPASSES 2100 DISTRIBUTORS AND 450,000 RETAILERS

• 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

NATURE OF RETAIL OUTLET

• CHOCOLATES ARE PRIMARILY SOLD THROUGH KIRANA STORES, GIFT STORES, MEDICAL STORES, CANTEENS,

• PAN-BIDI STORES, BAKERIES, SWEET SHOPS ETC. THIS IS TRUE FOR CHOCOLATES ALSO. THE SPACE ALLOCATED FOR

• THE CHOCOLATES WAS LESS WHEN COMPARED TO THE TOTAL AREA OF THE SHOP SPACE ALLOCATED FOR CADBURY BRANDS CHOCOLATES, OCCUPIED MORE THAN NESTLE BRANDS.

PROMOTION• ADVERTISEMENTS• THE ADVERTISEMENT AIMED AT CONVEYING THE IDEA THAT NO

SPECIFIC OCCASION IS REQUIRED FOR CONSUMING CDM

• CELEBRITIES ENDORSEMENTS• CADBURY ROPED IN PREITY ZINTA FOR ITS PERK BRAND. PREITY

ZINTA’S ANGELIC DIMPLES LAID THE FOUNDATION FOR WHAT WOULD BECOME THE INDIAN TEENAGER’S FAVORITE SNACK. AFTER THIS CAMPAIGN, PERK’S SALE SURGED

• THE BIG ‘B’ FACTOR• THE BIG FACTOR THAT HAS PUSHED UP CDM SALES IS THE

AMITABH BACHCHAN CAMPAIGN. CADBURY APPOINTED AMITABH BACHCHAN AS ITS BRAND AMBASSADOR

CHOCOLATE ADS SHIFT FOCUS FROM KIDS TO YOUTH

• INDIAN CHOCOLATE MARKET WAS ALMOST TOTALLY DEPENDED ON PURCHASES OF KIDS.

• WHILE CADBURY IS TRYING TO SELL INDULGENCE TO ADULTS, KIT KAT IS SELLING 'RITUALISTIC' BREAK TO TEENAGERS/ YOUNG ADULTS.

• THIS IS REFLECTED IN THE CHANGING ADVERTISING PATTERNS ACROSS DIFFERENT CHANNELS.

CONCLUSION ACCORDING TO OUR RESEARCH WE CAN SAY THAT THE SALES

WOULD BETTER EVEN MORE IF FOLLOWING ASPECTS ARE TAKEN INTO CONSIDERATION:

1) PACKAGING OF THE PRODUCT2) DISTRIBUTION