Cadbury Term Paper 2
Transcript of Cadbury Term Paper 2
ABOUT THE COMPANY
Cadbury, a subsidiary of Cadbury Schweppes is a dominating player in the Indian chocolate market with strong brands like Dairy Milk, Five Star, Perk etc. Dairy milk is in fact the largest chocolate brand in India. Cadbury India Limited, now stands only second to Cadbury UK Limited in sales of Dairy Milk. The company is pushing the gifting segment, through occasion linked gifts. Chocolates contribute to 64% of Cadbury’s turnover. Confectionery sales accounting for 12% of turnover, is contributed largely by Eclairs. Cadbury also has a strong brand Bourn Vita the malted health drink category, which accounts for 24% of turnover.
PROFILE OF CADBURY
Type Confectionery
Founder George Cadbury
Current owner Cadbury plc
Country of origin United Kingdom
Introduced 1905 Related brands Cadbury products
Markets World Website www.cadbury.co.uk
A few facts and figures
We make and sell three kinds of confectionery: chocolate, gum and candy We operate in over 60 countriesJohn Cadbury opened for business in 1824 - making
us nearly 200 years young We work with around 35,000 direct and indirect suppliers We employ around 50,000 people Every day millions of people around he world enjoy our brands
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BUSINESS OPERATION
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Five Company-Owned manufacturing Facilities:
Thane Induri (Pune) Malanpur (Gwalior) Bangalore Baddi (Himachal Pradesh)
4 Sales Offices:
New Delhi Mumbai Kolkata Chennai
Corporate/Head Office:
Mumbai
SALES OBECTIVE
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The common aim and objectives of the corporation such as Cadbury includes the following:
1 Survival
2 Profit maximisationwhich is often taken to be the reason why firms exists and to be the primary objectives in practices most firms have a hierarchy of objectives when a firms survival is threaten it may profit maximise in order to restore its financial health.
3 Growth- which includes Cadbury selling new products or expanding overseas.
4 Diversification- which is the spreading of business risks by reducing dependence on one product.
5 Sales maximisation- which is the increasing of sales
6 Improving the product image-which includes creating a new logo or launching a new brand of product and creating more attractive packaging. For example, Cadbury set out two objectives for the development oftheir chocolate, Fuse. These were:
1. To grow the market for chocolate confectionery
2. To increase Cadbury's share of the snacking sector
When launching a product the company Cadbury’s had to make sure that any new product in the snaking sector must establish points of difference, creating a unique selling proposition (USP) i.e. a product with unique appeal which is not shared by any of its competitors.Referring back to the example of Fuse, Cadbury lost a lot of money testing out the combination of various ingredients and more than 250 were combined before the recipe of the chocolate was finalised. As the products are developed, Cadbury tests them to ensure that consumers are willing to buy them.Cadbury then promotes its products in various ways such as the use of above the line promotion, which is where a product is advertised through consumer media such as television, magazines, newspapers and radio.
STRATEGIC PLAN IN CADBURY
•Setting stretched financial objectives.
•Adopting Value Based Management for major strategic and operational decisions and business systems.
•Creating an outstanding leadership capability within management.
•Sharpening company culture to reflect accountability, aggressiveness and adaptability.
•Aligning our management rewards structure with the interests of employees & shareowners.
CADBURY TODAY
Technologically Advanced
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Customer Oriented Internal Customer Satisfaction
BENEFITS AT CADBURY
Centralization of Data - Flexible Sales & Logistics team
•Forward Integration - Access to secondary (Distributor-to-outlet) sales data every week
•Transparency - Free flow of communication, as well as provides higher-end services
•Efficient Supply Chain – Master Schedule Planning
•Better Forecasting - Effective & faster planning
•Promotions – Need for localized promotions and bursts be tracked easily
BUSINESS MODEL
SALES STRUCTURE
JOB PROFILE
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CADBURY INDIA LTD.
BASE MARKET
Base Chocolate
(BC)All drinks
MASS MARKET
All sugar EP Chocki
National Sales Manager (NSM)
Regional Sales Managers (RSM) - East
Managers (RSM) - North
Manager (BSM) – Base Business
Area Sales Managers (ASM)
Manager (BSM) – Base Business
Manager (BSM) – Mass Marke
Regional Sales Managers (RSM) - South
Regional Sales Managers (RSM) - West
Job Description :Area Sales Manger
Current Locations: All India across both Core and Mass Market
Job Title: Area Sales Manager
Purpose: In Cadbury India we work together to create brands people love. You will contribute to this by managing the field force, defining the field action plan and authorizing the field activities, which will deliver the Areas strategy at the point of purchase
Reports toBranch Sales Manager
Business Unit / Location Any location under the 4 branches located at Delhi, Mumbai, Chennai and Kolkata
Department Sales Role Objective: Volume Achievement, Territory development, Business relationship management, networking and People development.
Focus Areas: Sales & distribution management
Ensure Visibility Systems adherence and Hygiene
Developmental projects
People management Team building & motivating
KEY RELATIONSHIP Retail Distributor
Commercial Finance Business Partner at Branch Brand managers & Trade Marketing Manager at Head office
Retail Distributor Sales men
Branch Logistics coordinator at Branch Sales officer & Area Sales executives
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Key Performance Indicators 1. Volume achievement. 2. System Hygiene. 3. New Brand Performances. 4. Innovation / cost effective and replicable. 5. Learning and development initiatives for Sales Officers and Area Sales Executives. 6. Influencing the brand managers to support local initiatives. 7. Liasoning with Branch Logistics and head office logistics to ensure adequate stock.
Values in Action
We have a broad framework of leadership imperatives that demonstrate our values in practice. This framework has been developed further to indicate the kind of behaviours that would help you to succeed in this job and live up to our values. However, these should be treated as broad guidelines and, as we value diversity, you are free to develop your own individual style and approach accordingly.
Accountable
Ensures clarity of purpose and responsibilities for self and others Measures and delivers the required capability building outcomes Takes responsibility for ensuring collaborative and effective working with teams,
notably the customer business team, to deliver results
Aggressive
Focuses on capability building contribution to business success and new value creating opportunities
Has the drive and resilience to succeed, moves quickly to seize opportunities and to counter competitive moves
Responds to challenging goals and takes considered risks where appropriate
Adaptable
Is open-minded, and shows flexibility in approach for different situations, delivers innovation to the customer
Has excellent change management skills, particularly skillful in leading culture shifts towards a consumer focus
Has a customer service orientation, is commercially astute
Obligations
It is expected that you will: Carry out these accountabilities within the operating and process frameworks that
apply to Cadbury India.
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Work together with all your key stakeholders: line and functional. A key part of your performance review each year will be based on input from these stakeholders.
Exemplify the Cadbury India Core Purpose & Values and Leadership Imperatives in practice – this will be a key part of your annual development cycle.
PERSON SPECIFICATIONS
Education
Masters Degree in Business Management from a premier institute. – 2003 / 2004 Batch
Experience
2- 3 years of relevant sales experience in an FMCG company
DISTRIBUTION NETWORK
Channel Partners
Factory
3 Factories at Malanpur, Thane, Induri. Responsible for production of different products
Mother-warehouse
Exists at the Mumbai. Finished products from each of the factories are sent to this warehouse from where
there is direct dispatch to the depots. Depots – Around 24 depots throughout the country with an average of one in each
state. Responsible for dispatches to all the distributors or super stockists of that particular state.
Intermediaries
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FACTORY MOTHER WAREHOUSE DEPOTS
DISTRIBUTOR WAREHOUSE
RETAILER
DIAMOND STORE
SUPER STOCKIST
RETAILER
Distributors and Super Stockists
Points of primary sales Have their own sales people
Retailers
Come in direct contact with the customers responsible for converting secondary sales to tertiary sales. More than 30 lakh retail stores being covered throughout the country.
Classification of Retail Outlets
•Based upon Coverage
•Based on products being sold
•Based on Size
A. Based upon Coverage
Direct vs Indirect
Direct Retailers
–Covered by the distributors or the super-stockists of the Company
–Are visited directly by the representatives of the distributor.
–Get benefits and are eligible for the schemes undertaken by the Company, including Cash Discounts (CD), as all the sales to them are on cash basis.
Indirect Retailers
−Ones which are not on the coverage list of the distributor.
−Catered by the wholesalers.
−For the Base Business category the number of such outlets is very low. But for Mass Market products the number is very high.
−Exist more in Class D and Class E places.
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COVERAGE
DIRECT INDIRECT
−Benefit that these retail outlets get is that they do not need to pay in cash always. Can also get sales in credit.
B. Based on products being sold
Groceries
Confectionary Cosmetic Shops Department Stores Variety Stores Kitchenware Stores Plastic Products Shops Paan-wala
C.Based on Size
Diamond Stores
Organized Retail Sector
•Big Stores like Nanz, Big Bazaar, etc.,
•Getting the shelf-space is the main objective of each company here
•Special treatment to such stores in terms of certain discounts and offers due to the bulk buying Economies of scale lead to advantage in terms of the bargaining capacity.
•Direct delivery of products from the depot of the state
TERRITORY MANAGEMENT
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SIZE CLASSIFICATION
DIAMOND
STORES
NORMAL OUTLETS
METHOD OF TERRITORY MANAGEMENT
Outcome
Division of the country into major cities, town, pin codes, metropolitan statistical areas, trading areas
Identifying the urban centers of these geographical units Measuring the capacity of sales in each of these initially through tentative estimation
and then establishing them and using them futures forecasting and suitably redistricting tentative territories
TERRITORY CLASSIFICATION
CITY BASED SALES
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Personal selling and advertising
efforts
Sales force morale
Proper market coveragecoverageEvaluating sales personnel
Control selling
expenses
Basic Geographical unitControl units in
tentative territories
Class A (Top 23towns by
ORG report)
Class B (5 lakhs above business)
Class C (2.5-5 lakhs)
Class D(0.5-2.5 lakhs)
Class E(below 0.5
lakhs)
Class of cities Cities Sales item
CLASS A Bangalore, Hyderabad, Ahmedabad, Pune,Chandigarh,
All base products, Mass market items, all drinks.
CLASS B Lucknow, Bhopal, Nagpur, Coimbatore, Trivandrum, Bhubaneswar, Jaipur, Kochi
All base products, selected drinks, mass market items
CLASS C Allahabad, Nagpur, Guhwati, Surat, Vijayawada
Selected drinks, selected mass market items, all base product
CLASS D Agartala, Srinagar, Ludhiana, Vadodra, Kanpu
Selected drinks, mass market & base products
CLASS E Durgapur, Meerut, Kakinada Limited base products, mass market & drinks
SALES FORECAST
Top-down approach
Uses Quantitative Technique of Forecasting 3-year Moving Average Method is implemented Year divided into 12 periods Seasonality also taken into account Major Emphasis on last year’s data Statistical Tools being used SAP integration Promotional Offers according to Sales Forecast
SALES ADMINISTRATION
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NATIONAL SALES MANAGER
REGIONAL SALES MANAGER
BRANCH SALES MANAGER
AREA SALES MANAGER
SELECTION OF CHANNEL MEMBERS
Distributor / Super Stockists
Key aspects to ponder while selecting for a distributor. Market segment - the distributor must be familiar with your target consumer and
segment. Changes during the product life cycle - different channels can be exploited at different
points in the PLC e.g. Foldaway scooters are now available everywhere. Once they were sold via a few specific stores.
Producer - distributor fit - Is there a match between their polices, strategies, image, and yours? Look for 'synergy'.
Qualification assessment - Establishes the experience and track record of your intermediary.
How much training and support will your distributor require?
Analysis of the distributors & super stockist:
Exclusive Partner –
Cadbury India tries to look for distributors that are exclusive to it. The Company officials feel that if that does not happen then the partner might not be in a position to do justice to Cadbury. But in small places, especially rural areas, it is not possible. So the super stockists appointed there are the ones that do not carry brands of competitors.
Proper Storing Capacity –
After the worm infestation incident, the Company has made a point to go in for the partners that can provide proper hygienic storing to the product.
Well-defined Territory –
The areas of the distributors are geographically well defined so that no clash of interests takes place.
Retailers
–Have a much stronger personal relationship with the consumer.
–Hold several other brands and products. A consumer will expect to be exposed to many products.
–Offer credit to the customer.
–Products and services are promoted and merchandised by the retailer.
–Give the final selling to the product.
Products are stocked at different outlets depending upon:
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Type of store –
This not only includes the type of products being sold at the outlet but also the size of the store is kept in consideration. Based on this criterion it is decided as in what all products could be sold at the outlet.
Proper Infrastructure –
Need to analyze the storing capability of the store. A store in Jodhpur cannot store chocolates if there is no provision for cooling.
Proper Storing Capabilities –
Must have a safe and hygienic place to store the products. This clause is kept in mind considering the worm infestation issue.
•As far as the selecting criterion is concerned for the diamond outlets, no condition is laid because at all these stores the bare minimum requirements are automatically met in the process of giving better ambience to the customers.
Channel intermediary Margin
Distributor/stockiest 5-6%
Retail outlet 10-12%
Diamond outlet 12-13%
STEPS IN SALES PROMOTION
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Product choice
Protection from competition
Role of discounts Promotion timing
Choice of market areas
Promotion choice
Step 1 : Promotion Choice
• Trade promotion: The Company will have to offer lucrative trade promotion schemes, in order to push primary sale. These include incentives to stockiest for pushing the sale of chocolates. At the retail level, the following trade promotion measures may be adopted:
• Schemes such as , a certain percent off on the purchase of Rs 5000 or Rs 10,000 worth of chocolates.
• A box of chocolates free with every dozen purchased.
• Shop Displays/Vizzy Coolers –linking them to sales
• Apart from these, WindowShelf space may be purchased outright.
1) Sheet Metal Dispensers: This purple salesperson for Cadbury’s is found in almost every shop stocking their chocolates. Since it is placed on the cash counter, it’s design offers visibility, ease of vending, and protection from the elements. It is also placed in the most appropriate position to cater to the impulse buyers. This‘first’ from CIL has become so popular that is now the standard design for all chocolate manufacturers.
2)Visicoolers: Visibility for chocolates drops in the summer, as they disappear into the refrigerator. In high throughput outlets, the visicooler serves the need for cooling while still maintaining the visibility of the product.
3) Jars: These are provided to small outlets, where they are prominently displayed.
4) Vending machines:
These high visibility machines are provided at busy locations.
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Sheet Metal Dispensers
Visicoolers
JarsVending machines
Presence in Amusement Parks
5)Presence in Amusement Parks: Cadbury’s also maintains a presence in many amusement parks across the country, strengthening the association of its chocolates with ‘fun’ occasions.
Consumer Promotion: Some of the consumer offers that could be introduced are :
1. Free gifts like pen, comics etc., on return chocolate wrapper.
2. Money Savers
3. Chocolates in a toy truck etc.
4. The Company can announce consumer “contests” (with proof of purchase) with attractive prizes, supplemented by an advertisement campaign.
• Bonus packs and increased usage
• Contests :
1. SMS the code to win freebies , movie tickets etc.
2. “AAO SMILE WITH AURO” win a chance 2 spend a day with AURO – The new child sensation.
Get into a contest, a win a personalized invitation for the annual carnival “MITHAAS”, play games , dance and chit chat with AMITABH BACCHAN,DARSHEEL SAFARI,AMIR KHAN,HRITHIK ROSHAN and many more.
Step 2 : Product Choice
Step 3 : Choices Of Market Areas
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Chocolate needs to be distributed directly unlike other FMCG products which can be sold through a wholesale network. 90% of chocolate products are sold directly to retailers
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Cadbury's distribution network used to encompasses 2100 distributors and 450,000 retailersThe company has a total consumer base of over 65 million.Medium size retailers sell chocolates of about Rs. 400 – Rs. 800 per week.
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Chocolates are kept at or below the eye levelThis is to facilitate visibility of the chocolates for the customer who is visiting the store.Big retailers sell chocolate worth Rs1000 or more per week.
Step 4 : Promotion , Timing , Duration and Frequency
TIMING :
1. High at the time of festivals.
2. When the goodwill got hampered.
DURATION:
Depends on the basis of brand image.
FREQUENCY :
Depends when larger percentage of consumer are exposed to the promotional offer.
• The girl dancing on cricket ground : Way to express the happiness
• 'Khanewalon Ko Khane Ka Bahana Chahiye‘ : Social acceptance amongst adults, showcasing collective and shared moments.
• 'Kuch Meetha Ho Jaaye‘ : Celebratory occasions
• "Pappu Pass Ho Gaya“ : Use of street language to express joy in a moment of achievement / success.
The recent ad saying “ Din hai suhana aj pehli tarikh hai” gave a reason for middle income group to celebrate one more event with Dairy milk
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manufacturer
distributor/stockist
semi-wholesaler
retaileruser
Step 5 : Role of discounts , terms and conditions,Sales contest
1) 360-degree campaign with mix of television, consumer contact activities, etc.
2) Tie up with leading coffee chain Café Coffee Day for direct sampling
3) Product sampling for first two months across 25 towns
4) Raageshwari started advertising features of mischievous, bubbly teenagers getting out of their 'stuck and hungry'
Strategy behind this add were
1) cover all the mischievous teenagers and rest other crowd will follow them.
2) If hungry than eat perk rather than having other things
3) To compete the chips & wafers
Promotion Mantra
1)Anytime, Anywhere
2)Thodi Si Pet Pooja
3)Kabhi Bhi Kaise Bhi
4)Baaki Sab Bhoola De
5)Bored Ho To Muh Chalao
6)Take It Lightly
Sales contest
1. Bubbaloo, one of the world's leading bubble gum brands came now with exciting new variant Bubbaloo Blueberry.
2. A television commercial will be on air across channels. Popular children magazines like Chandamama and Bal Bhaskar will feature 'Go Blue with Bubbaloo' contests.
3. Contest will invite readers to take their own pictures in a whacky manner and send it back to the address given.
4. The wackiest ones will win prizes and their photographs will get published in the magazines.
5. Jumpstarting the season, the FM station presents the interactive Cadbury Celebration's Bandhan contest from Aug 13-17, 2007 celebrating the special bond between brothers and sisters
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Then the worms crawled in
PROJECT VISHWAS
• New imported machinery
• Packing cost 15% higher
• Roped in Big B
- Resulted Customer Satisfaction
Step 6 : Protection from the competitors
• Cadbury has extended its marketing strategy to the internet space for the very first time. They have launched an innovative & interactive website www.meethamoments.com wherein one can send meetha messages to your loved ones. It allows you to send personalized e- greetings and view the latest commercials and listen to the radio spots from Cadbury.
• Cadbury has entered into a strategic alliance with Facebook and Orkut to further promote the core message of the brand.
• Cadbury has created a Facebook application that urges all Facebook members to extend an invitation to fulfill wishes of their near & dear ones this Diwali.
• Features: The feature of Cadbury dairy milk is such which is not so easy for the competitors to copy it. It has an unique type of feature.
• Customization: Cadbury dairy milk does have a customized product because they have a good brand element due to which they are able to sale the product easily in the market. They have produced wowie for childrens , celebrations for gifts , and also variety in cashew nuts, egg, eggless etc.
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style performance
customization
features
duration
reliability
• Performance: There are mainly four types of performance levels- low, average , high or superior. Cadbury dairy milk has the highest level of performance quality.
• Durability: The durability of the Cadbury dairy milk is very good. The product is able to survive under the stressful or natural conditions. But it should be taken care of refrigeration
• Reliability: Cadbury dairy milk mainly has a reliable product. They were quite sure about the not malfunction or fail of their product within a specified time period.
• Style: It refers to the products look and feel to the buyers. In Cadbury dairy milk there are different styles of packing and taste but then also there is no need to pay an extra money.
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