Cadbury Silk_ How We Got People to Pay 10 Times the Price of CDM for CDM _ Warc

6/27/2015 Cadbury Silk: How we got people to pay 10 times the price of CDM for CDM | warc.com

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Warc Prize for Asian Strategy: Shortlisted, 2014

This case study describes how Cadbury launched a new premium brand Silk in India totackle a supply problem and increase its value share of the market, by targeting youngpeople with an indulgent message that reflected their different approach to publicdisplays.

A successful Cadbury Dairy Milk (CDM) campaign had boosted growth in themarket beyond all expectations, creating a supply issue for the company, andCDM's inability to meet demand risked a loss of value market share.Silk's higher price point was to be the answer to this problem, but the product'ssimilarity to standard CDM and its association with 'meetha' (common sweettreats) was a barrier.Silk was reframed as chocolate rather than meetha, targeting young people with amessage of indulgent experiences which disregard what others think; thispositioned came from insights that suggested a difference in opinion about publicdisplays between generations.Silk became the thirdlargest chocolate brand in both the Cadbury portfolio and inIndia, and helped CDM stay at the top of the market.

Cadbury Silk: How we got people to pay 10times the price of CDM for CDM

Zaara Ahmad

Campaign details

Brand owner: Mondelez Foods IndiaLead agency: Ogilvy & MatherBrand: Cadbury SilkCountry: IndiaIndustry ConfectioneryChannels used: Internet display, Internet general, Online video, Outdoor, outofhome, Packagingand design, Pointofpurchase, instore, Print general, unspecified, Sales promotion, Social media,

Television

Media budget: 5 10 million

Executive summary

In 2010, Cadbury India was faced with a unique problem. The immensely successful 'meetha' campaign

for Cadbury's Dairy Milk (CDM) made the brand and the category grow so fast that all of the installed

manufacturing capacity was exhausted. Now, CDM stood to lose share in the growing market it had built!

The way out was to increase value contribution of CDM's business dramatically, till supply constraints get

resolved.

CDM's impending premium offering, CDM Silk, initially planned only as a sheen provider to India's best

loved chocolate, now had to solve a real business issue.

But consumers were unwilling to pay the hefty premium for Silk. CDM, after all, was an affordable treat

for all.

MORE CASE STUDIES ABOUT:

Same Brand: Cadbury

Same Sector: Confectionery

Same Sector and Objective: Brand extension/variant Increase awarenessMaintain price premium

TV ad: Cadbury Silk: How we gotpeople to pay 10 times the priceof CDM for CDM

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This case proves that people saw enough value in CDM Silk to pay 10 times the pricepoint of CDM. It

made Silk the thirdlargest brand in both the Cadbury portfolio and in India, and helped CDM stay at the

top of the market. All within just three years of launch, and all at lower media investments compared to

key benchmarks.

This case illustrates a remarkable victory for marketing over one of its toughest adversaries – the 'price

glass ceiling', beyond which popular brands cannot normally charge a premium.

Market background and cultural context

This story starts with a confession.

There are very few marketing challenges that are selfcreated in a good sort of a way. This story about

Cadbury's Dairy Milk (CDM) and its premium offering, Silk, starts with the inadvertent villain of the piece –

the 'meetha' campaign we did for CDM.

The celebrated 'meetha' campaign for CDM that had started in 2004 (it won a Gold at the IPA awards in

2012, and a special award for the 'best use of insight' for sustained success) was so successful that it not

only grew CDM, but like most culturally pervasive campaigns also made the category grow at an

unexpected speed.

By 2009, Cadbury India had realised that even with their best efforts, they just wouldn't be able to make

as many bars of CDM as India would want.

This may seem like a good problem to have. For marketers of luxury products, it might well be. However,

chocolates are an impulse category. If a person's favourite brand isn't available, they will happily settle

for another one.

In addition, capacity increases in this business take a long time and a lot of money. The 'import and sell'

model was rendered irrelevant due to the low price points of lead SKUs. Which meant that for the

foreseeable future (three to four years), CDM would remain in short supply.

And in a fastgrowing market, that spelt two clear and present dangers:

The brand stood to lose share (and other brands which were not capacity constrained would,

ironically, grow faster and gain share from the brand that had started it all!)

The competition stood to gain traction with the consumer.

Indexed and simply put, in 2010 the market was consuming 100 units. CDM was, by now, operating at

100% capacity and was selling 34 units. The market CAGR for the previous three years was 30%. At the

same CAGR over the next three years, the market would need 220 units in 2013, and CDM, because of

its inability to supply more, would shrink to become a 15% valueshare brand.

Marketing and communications couldn't manufacture more chocolate. But they could create perceived

and, maybe this time, real value.

In response to the Lindts and the Ferreros, CDM was preparing its own premium chocolate – CDM Silk.

But now, Silk had to play a far bigger role than providing sheen to the brand. It had to deliver numbers

big enough to allow CDM to hold value share.

But here's the big problem that communications had to solve:



People have a mental pricepoint association with any brand that they regularly use. CDM cost Rs 510,

and those price points also contributed to almost 70% of all unit sales of chocolates in India.

When tested, consumers were reluctant to pay such a premium for what was for them still a CDM

chocolate. (Source: Synovate Research.)

Firstly, dropping prices drastically was not feasible, and secondly it defeated the very purpose of this

launch.

The task remained unchanged. Only now we knew how difficult it was going to be.

Objectives

Marketing objective

Get the Indian consumer to pay 10 times more for the same brand, albeit through a different product

experience.

Communication objective

Make the hand that reaches out habitually for a bar of chocolate, now reach out for the highpremium

CDM Silk.

Communications tasks

Build awareness for the new subbrand, Silk

In impulse categories, popularity and engagement are critical to consumption. Silk needed to be

both popular and engaging

Create 'premium' association for Silk to pull it away from CDM.

CDM also needed continual support in the media. Hence CDM Silk's media investments had to be

judicious, and had to deliver better than the benchmark ROI.

Insight and strategic thinking

We started with what was really special about Silk.

Product tests showed that, devoid of the price point, our consumers loved the immersive experience that

the buttery, luscious, melty nature of Silk provided.

But we realised that merely a superior product experience would not be enough to make consumers shell

out a premium for something they viewed as the same brand.

The specialness of a product, more often than not, is not tangibly discernible, and is driven by the mind

of the consumer rather than the actual experience itself (eg how many people can actually distinguish

fine wine from the cheaper stuff?)



So if we had to get consumers to make the tenfold price jump, we would have to weave an impression of

desirability around the brand and create the perception of exclusivity.

To do so, we first needed to be cognisant of the unique positioning of chocolate in India at that point.

The success of CDM's campaign had resulted in chocolate (and therefore CDM) becoming synonymous

with 'meetha' (the traditional sweet) and, as a result, it was no longer viewed as special.

And so, for Silk to be coveted enough to successfully warrant a steep premium, it would need to be

contextually reframed.

The reframe

The transformation from 'meetha' to chocolate lay in the semiotics, and so we had to dial up the codes

associated with premium chocolate. Therefore, Silk was to be an 'immersive experience, in an intimate,

indulgent moment'.

This would have helped demonstrate the specialness of the chocolate, however the target needed to be

emotionally engaged as well.

We fell back on our understanding of our target audience – the young, urban consumer. Due to the India

growth story, these youngsters had never had so much disposable income. Though this money wasn't

enough to buy them bigticket items, it still allowed them to dabble in the little luxuries in life, and they

loved their moment or two of indulgence.

But in a traditional society like India's an indulgence was usually a private affair – unless, of course, it had

societal sanctions through occasions like marriages, gettogethers etc. But the young person was

changing, and wanted to flaunt their modern values. It was now good to be seen having a good time.

This helped us put together the final piece of strategy.

CDM Silk was to be an 'immersive experience, in an intimate, indulgent moment, with sweet disregard to

how others would think'.

Implementation, including creative and media development

The transformation from meetha to chocolate, from CDM to CDM Silk, was in the semiotics.

In order to showcase the chocolate attributes of Silk, we depicted the special way we all indulge – with

reckless abandon and without a care as to who's watching.



We also used the media of digital and print to bring alive the brand thought.

Performance against objectives

The way things happened – a summary

The way things happened in some detail, with evidences

The sustained campaign built salience for the brand:

Despite being in the market for only three years, Silk created salience that was far greater

than its competitors. (Source: TNS Brand Tracks and Third Eye Qual Research.)

"I sing 'kiss me, close your eyes... and miss me' in my shower" (Source: Third Eye Quals)

(Source: TNS Tracks)

Despite being in the market for only three years, Silk created salience that was far greater than its



competitors.

It led to popularity and engagement:

More than 3.2 million fans on Facebook – 1 million more than its closest global competitor,

Galaxy

A million likes on YouTube for its videos – built completely organically, without promotion

#BidForSilk trended at #1 on Twitter – first in India, then the world

Spontaneous awareness at 40% is higher than all other brands except CDM and Five Star –

decadesold chocolate brands in India that have become institutions.

It built 'premium chocolate' credentials for the subbrand – an absolutely crucial image parameter

that was needed to influence attitude and behaviour, especially for a popular brand

It built preference:

Despite its price, Silk garnered a massive proportion of followers

For a young premium brand in an impulse category, these numbers are nothing short of

impressive.

It led to better consumption rates for CDM Silk, even than for other mass brands



It created India's thirdlargest brand within three years of its launch, again at a price point that was

x10 the median price of a chocolate in India. The campaign ended up creating a US$90m brand

within three years.

The big one. It didn't just prevent CDM from losing significant share due to short supplies; it

marginally took up CDM's already extraordinary share in India.

It did all this at lower media investments, and delivered higher media returns compared to relevant

benchmarks.

All data below is from Absolut Data – a data analytics firm commissioned by Kraft India to work out the



ROI for the Silk marketing mix:

It sold more kg per GRP than the benchmark

CDM Silk media coefficients:

(Volume contribution per unit of significant variable – for media, it is kg per GRP)

(Mediaeffectiveness benchmark: under 49 – low; 49 to 91 – moderate; above 91 – high)

Its effectiveness per GRP was higher than the benchmarks, and higher than that achieved by other star

chocolate brands in the Cadbury portfolio.

Its effectiveness was higher than that of other chocolate brands in the portfolio in other growing markets.

It created a demand for CDM Silk that was so elastic that the more the company ramped up Silk's

distribution, the more it would sell.

CDM Silk driver's elasticity

Measured as the potential of % change in volume for every 1% change in support



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(Benchmark: up to 0.3 – low; 0.3 to 0.7 – moderate; 0.7 to 1 – high; above 1 – very high)

Lessons learned

In a category like food, one assumes that a fantastictasting product is enough to make it sell – how

could consumers not respond to an overpowering sense like taste?

For example, Coke was naively of the same belief when it launched 'new Coke' a few decades ago. Blind

testings showed that people generally preferred this new drink to the original, but the company severely

underestimated the nation's sentimental attachment to the iconic American brand, and what ensued was

one of the biggest marketing blunders ever.

This is because the consumer's relationship with a food product goes beyond their tastebuds. It is rooted

in their belief in the product, rather than the actual product itself. The utility they derive from a product is

as good as the utility they think they will get from it.

So, if you are made to believe that you're eating the world's finest grilledcheese sandwich, in your reality

you probably are.

Simply put, we taste with our brain and not with our tongue.

Operating on this principle, we used semiotics to engineer a degree of desirability for Silk so great that

people were more than willing to pay a tenfold premium for the same brand.

Thus, by controlling the associations surrounding a product or by creating new ones altogether, it is

possible to induce the desired reaction from a target audience without having to make any actual

changes, such as in the price or by tweaking the product.

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Cadbury Silk_ How We Got People to Pay 10 Times the Price of CDM for CDM _ Warc

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