CADBURY INDIA LIMITED

A

PROJECT REPORT

ON

“THE INSTITUTIONAL SELLING”

FOR

CADBURY VENDING MACHINE

CADBURY INDIA LIMITED, N.DELHI

Bachelor of Business Administration

SUBMITTED TO : PREPARED BY : GGSIP University MAYUR JAINDelhi. BBA-III SEM.

BLS INSTITUTE OF MANAGEMENT,MOHAN NAGAR, GHAZIABAD

MAYUR JAIN BBA-III SEM.

ACKNOWLEDGEMENT

First of all I would like to extend my vote of thanks to Mr. MARICHI MATHUR

and Mr. DEEPAK MEHROTRA of Cadbury India Limited, who assigned me a very

lively project to work on.

My parents and batchmates were also a source of motivation and inspiration for

me and without whom this task would have been very difficult to accomplish.

I would like to thank Dr. Sudhir Saran, Director of BLS Institute of

Management, Ghaziabad.

Mayur Jain

BBA-III Sem.

GGSIL University.

INDEX

1. COMPANY PROFILE

2. ORGANISATIONAL CHART FOR THE SALES TEAM

3. INTRODUCTION

4. CADBURY VENDING STORY

5. ABOUT THE MARKET LEADER - NESTLE INDIA LIMITED

6. LIMITATIONS OF THE PROJECT

7. RECOMMENDATIONS

COMPANY PROFILE

¨ Incorporation 1948

¨ Corporate Status Public Limited Company

¨ Business Food

¨ Manufacturing Facilities Thane & Pune in Maharashtra

¨ Registered Office Cadbury House, 19, Bhulabhai Desai Road,

Mumbai

¨ Listed on BSE, NSE

In India, the name Cadbury is like a synonym to the word, chocolate. The key

business areas of the company are chocolates, confectioneries & malted food. The

company’s key brands in chocolates are as follows:

CDM & Truffle (bars), Picnic & 5 Star (count lines), Crackles & Gold (moulded

chocolates), Gems (panned confectionery), Perk (wafer chocolates), Cadbury’s Eclairs

(eclairs) and English Toffee & Byte (toffees).

Bournvita is the leading brand in the malted food segment.

The main business areas of the company are Chocolates and sugar

confectioneries. In the chocolate confectionery segment, CIL is the market leader with a

market share of 70% followed by Nestle. Also, Cadbury cultivates its own cocoa beans,

which gives the company an edge over others; as imported cocoa beans are expensive

and also have a different taste.

OUTLOOK

For the company, the thrust areas in the future would be the introduction of IT

enabled services, new product launches, increasing the chain of distribution outlets and

asset modernisation. The business in which Cadbury operates might continue to witness

intense competition, especially in the premium segment due to the entry of large foreign

players and the permission by the government to import chocolates under the Open

General License (OGL).

Even though the turnover of the company’s chocolate & confectionery businesses

is expected to show a moderate growth, a marginal drop in the contribution of these

businesses to the company’s overall revenues is likely over the medium term period due

to higher growth in the malted foods business. Especially, in case of the brown-coloured,

malted beverage like Bournvita, the realisations are expected to increase moderately in

the future.

ORGANISATIONAL CHART FOR THE SALES TEAM

R E TA IL D IS TR IB U TIO N S A L E S M A N A G E R S

P IL O TS

S A L E S O F F IC E R S

S E N IO R S A L E S O F F IC E R

F IE L D S A L E S S U P E R V IS O R S

A R E A S A L E S M A N A G E R S

B R A N C H S A L E S M A N A G E R

B R A N C H M A N A G E R

The Delhi branch looks after the Northern India (Delhi Metro, Punjab, Haryana,

Rajasthan, UP-East/West)

INTRODUCTION

Bournvita is one of the major brand of Cadbury India Limited holding the 2nd

position in its sector (Malted Beverages) with a market share of 12% by volume and 11%

by value. Traditionally it has been positioned as a Healthy and Tasty milk additive for

the younger generation. With such a positioning it has garnered a good market share for

itself.

Malted beverages can be segmented as:

1. White beverages

2. Brown beverages

White beverages account for65% of the total health beverage segment whereas

the share of brown beverages is 35%.

White beverages: Horlicks, Viva (Smithkline Beecham), Complan (Heinz)

Brown beverages: Bournvita (Cadbury), Boost (Smithkline Beecham), Milo

(Nestle), Maltova (Smithkline Beecham )

Traditionally positioned as milk substitutes/additives, malted beverages had a

strong market in the milk deficit southern and eastern regions of India. Demand for white

drinks declined in the 1980s when Operation Flood undertaken by National Dairy

Development Board, made milk available in all parts of the country. With a view to

revive demand for the brands, malted foods were repositioned as strength and energy

drinks with a nutritional thrust.

Advertisement and positioning play a major role in initiating new brand trials or

switches. Most health drinks earlier focused on children as the target segment, but

gradually the positioning has been extended to health drinks for the entire family. Players

such as Smithkline Consumer, Cadbury and Heinz have targeted different consumer

segments such as Junior brands for infants, separate formulations for expecting mothers,

extra protein enriched variants positioned on health benefit, etc.

To extend the success story of Bournvita, Cadbury is trying to increase its

volumes by going into the market the other way round where it would also sell the

product indirectly as a raw material for the vending machines. It has ventured into the

business of installing vending machines for beverages at corporate offices, fast-food

outlets, entertainment centres, cafetarias, canteens etc. By this the company is also eyeing

the market share of its arch-rival Nestle, which is already a dominant player in the

vending business.

To offer more variety to the consumers Cadbury has also added another beverage

to its vending machines - CHOCOLAIT (Hot chocolate drink having the luxurious taste

of Dairy Milk - the flagship brand of Cadbury).

CADBURY VENDING STORY

CONCEPT

Bournvita is one of the major brand of Cadbury. It is also a leading brand in its

category of Malted Beverages with a market share of 12% (by volume) and is at the 2nd

spot just after Smithkline Beecham’s Horlicks. It is directly sold to the customers as a

healthy drink.

Cadbury has launched the hot beverage vending machines which will offer

Bournvita as one of the product. The company has ventured into this business to give

leverage to the turnover of Bournvita. The companies which are already in the vending

business are Nestle (Nescafe coffee and tea), Hindustan Lever Limited (Bru-Instant

Coffee) and TATA Tea (TATA-Tetley tea).

In the vending business the machines are generally installed at public places such

as Restaurants, Cafes, Railway platforms, Airports, Entertainment Centres, Cinema halls,

offices etc. The main idea behind this is to increase the turnover of the product by

making the people to buy it as a raw material for the vending machines. This way

through indirect selling the company can increase its market share.

PRODUCTS

The two beverages offered by the vending machine of Cadbury are :

¨ BOURNVITA

¨ CHOCOLAIT

BOURNVITA - Bournvita is primarily positioned as a healthy beverage. It is

enriched with RDA balanced formula provides complete nutrition, keeping a person fresh

and energetic throughout the day. A cup of Bournvita served by the vending machine is

the perfect balance between Total Health and Rich Taste, served HOT.

CHOCOLAIT - The Chocolait is added for the pure chocolate lovers who can

now savour the delicious taste of Cadbury’s chocolate. It has a rich luxurious taste of

Cadbury Dairy Milk in a cup, served HOT.

Both the above drinks are healthy and tasty drinks with no side effects of

addiction, craving for caffeine etc.

VENDING MACHINE

The vending machine installed by Cadbury is procured from KRISHMAK India

Ltd., Bangalore, which is one of the leading names involved in the manufacturing of all

types of vending machines. The machine is a digital machine with LCD display,

compactly designed, easy to operate, that can fit anywhere and requires no operator. It is

designed to dispense a cup of hot beverage at the touch of a button. Hence it relieves the

person from the bindings of office and canteen timings and gets him a cup of delicious

drink without the hassles of stirring, boiling and even adding sugar and milk.

To ensure high hygienic standards, the machine has a foodgrade water tank,

disposable cups and provision of cleaning mixing bowls and tubs automatically.

Technical Specifications -

DIMENSIONS( in mm.) - 430*415*580

WEIGHT - 30 KG

WATER TANK - 5 LITRES

PREMIX CAPACITY - 1.2 kgs. of each premix.

NO. OF SELECTIONS - TWO

DISPENSING RATE - 8-10 CUPS / MIN

INITIAL STARTUP TIME - 10 MINS.

POWER SUPPLY - 230 V/AC

MAXIMUM LOAD - 2.2 KW

POWER CONSUMP. - 0.9 UNITS/HR ( AT PEAK OUTPUT)

COST - Rs. 16,400/-

In addition to these it has option of vending half cups of each drink.

PRICE

Premix Costing -

ELEMENT BOURNVITA CHOCOLAIT

Purchase price/kg.(Rs.) 187 192

Cups per kg. 50 63

Grams per cup of premix 20 16

Water 110 ml 110 ml

Premix Cost/cup (Rs.) 3.74 3.04

Cost of paper cup(optional) 0.85 0.85

Cost of Vending Machine and rentals -

Though the cost of the machine is Rs.16,400/-, the vending machine is installed at

the corporate offices absolutely free of cost. The company will just have to pay the

rentals for operating the machine at Rs. 1000/- per month.

MARKETING STRATEGY

The company is a new player in the hot beverage vending business, hence it needs

to offer some concessions to the companies in order to penetrate into the market. The

following points should be mentioned to describe the policy adopted by the company -

1) The company is not itself involved in the purchasing and installing of the

machines. Rather the machine is purchased and installed by the authorised

distributors of the company. The marketing of the machines at the

corporate offices is look after by the company.

2) Similarly, the premixes are also sold to the customers through the distributors.

Hence, the distributor will purchase the machine and will invoice the

premixes to the customer.

3) In order to ensure that the distributors get a proper return, the company

installs the machines in only those offices where the consumption is

expected to be more than 50 cups per day (both the drinks combined).

4) For the first 20 machines installed at the offices, on a promotional basis, the

rental fees of Rs.1000 per month has been waived off.

5) The company shall also run first 100 cups of Bournvita and Chocolait each as

a free sample at the offices to promote awareness in the employees.

6) Prompt service and delivery of premix will be provided at the site.

ABOUT THE MARKET LEADER - NESTLE INDIA LIMITED

VENDING MACHINE USED - AUTOVEND

DIMENSIONS( in mm.) - 435*420*575

WEIGHT - 28 KG

WATER TANK - 5 LITRES

PREMIX CAPACITY -

COFFEE 1.4 KG ( 120 DRINKS)

TEA 1.4 KG (140 DRINKS)

NO. OF SELECTIONS - TWO

DISPENSING RATE - 8-10 CUPS / MIN

INITIAL STARTUP TIME - 6 MINS.

POWER SUPPLY - 230 V/AC

MAXIMUM LOAD - 2.2 KW

COST - RS. 17,000/-

COSTING OF PREMIXES

TEA

COST /KG - RS. 88/-

NO. OF CUPS/KG - 90-100

COST/CUP - RS. 0.88 - 0.97

COFFEE

COST/KG - RS.160/-

NO. OF CUPS - 70-80

COST/CUP - RS. 2 - 2.28

LIMITATIONS OF THE PROJECT

¨ HALF-HEARTED APPROACH -

The project of installation of vending machines by the company was a half-hearted

project. It was not seen as a full fledged part of the business. Hence there were very

limited resources allotted for the sake of the project.

¨ MONOPOLY OF NESTLE -

Nestle India Limited has almost a monopolistic presence in the market. They are in

this business much before Cadbury entered into it. At those Corporate offices which

have a vending machine, about 95% of the time it had to be of Nestle’s. Hence the

entry barrier in this business is very high.

¨ POSITIONING OF THE PRODUCT -

The main beverage under consideration is Bournvita. It is positioned in the market as

a health beverage, specially for growing kids. Hence, this positioning was not

relevant to achieve the objective of the project.

¨ LOW LEVEL OF CONFIDENCE -

Due to the absence of any potential USP in the product, the confidence level

of the person in charge was quite low. They were very sceptical about installing the

vending machines in somewhat less-potential offices.

¨ LACK IN COMMUNICATION WITH THE PERSON IN CHARGE -

We were supposed to report to the Market Development Manager who was in charge

of this project. But he looked after so many other units such as NCDs ( New Channel

Development ) etc. that there was not enough communication with him.

¨ POOR PLANNING RIGHT FROM THE BEGINNING -

Due to the lack in communication with the person in charge and other trainees

involved in the same project, the project took off in a very haphazard manner. Due to

this proper allotment of areas was not done, which resulted in repetitions of calls at

the same offices. This all gave rise to unhealthy competition between the trainees.

¨ POTENTIAL AREAS WERE NOT ALLOTTED -

We were only told to work within the geographical boundaries of Delhi. Due to this

the major potential area like Noida, Gurgaon and Faridabad were ignored. These

three cities are homes to large corporate offices and MNCs.

¨ INEFFICIENT DISTRIBUTOR -

Whatever money was involved in the purchasing the machines and sale of premixes

was that of the distributor. The distributor appointed by the company didn’t have

enough sources to purchase the machines which can be timely supplied to the

customer when they wanted. The distributor was willing to purchase the machine

only when there was a potential confirmed order. The purchase and arrival of

machine takes at least 10-12 days. Due to this we were not able to carry out sampling

an demonstrations at various offices.

¨ WRONG TIMING OF THE PROJECT -

This project was carried out in a full-fledged manner when the mercury in the capital

was recording temperatures of more than 41-42 °C. When we used to tell the

Administrator about the hot beverage vending machine, their response was very

gloomy right from the beginning. At most of the places we got to hear that they

won’t be able to provide the minimum consumption level in such climatic conditions.

¨ ECONOMIC RECESSION -

The ongoing recession faced by the business is also one of the reasons due to which

there were few takers for the machine. Most of the companies were facing a decline

in their net profits and were resorting to stringent cost-cutting measures.

RECOMMENDATIONS

¨ TAKE IT UP AS A FULL-FLEDGED PROJECT -

The project of installation of vending machines by the company should be taken a

full-fledged project as there is immense potential in the business.. Hence adequate

sources should be allotted for making the project successful.

¨ LOOSEN THE CONDITIONS -

As the entry barriers are too tall due to monopolistic presence of Nestle the company

should loosen the conditions. The minimum consumption level should be brought

down to 25-30 cups in the beginning and after the company get enough market

presence, it should raise the limits.

¨ TARGET AT THE YOUNGER GENERATION -

As Bournvita is positioned in the market as a health beverage, specially for growing

people the company should target at those offices where there are more of younger

staff. The younger generation is moving away from the addiction of tea and hence

Bournvita can serve as a very healthy alternative.

¨ REGULAR MEETINGS WITH THE INCHARGE -

Regular meetings and feedback sessions should be called with the incharge so

that he can he can solve the problems in time and can arrange for the resources as and

when required.

¨ PROCURE EXTENDED VERSION OF THE MACHINES -

Some of the offices have the policy of providing only a couple of cups of tea to their

employees. Any additional facility comes at a cost. Hence Cadbury should also try to

procure such machines in which there is a provision of getting the beverage only on

the insertion of some token or coins.

¨ PROPER ALLOTMENT OF AREAS AMONG THE SALES PERSONS -

All the areas which are being targeted should be properly divided among all the sales

persons. Then they should be given the targets to increase accountability. In this way

the work would be done in a systematic manner and no areas are left out due to

confusion.

¨ MOVE TO POTENTIAL CITIES -

The company should also allow the sales persons to move into cities such as Noida,

Gurgaon and Faridabad which are homes to large corporate offices and MNCs. Such

offices generally have a young, energetic, health-conscious staff who look for better

alternatives for tea and coffee to get rid of their addiction.

¨ APPOINT A NEW DISTRIBUTOR -

The company should also appoint a new distributor for this project or give this

project to a more potential distributor, who can afford to hold enough inventory of

machines and the premixes. This is very important because ultimately main purpose

of all the marketing efforts is to increase the turnover through the distributors.

¨ RE-LAUNCH IT AT A PROPER TIME -

The project should have been launched just before the start of the monsoons when the

temperature goes down and the consumption of hot beverages go up. Thus the

company should re-launch the project in the month of July-August.

¨ RE-CALIBERATE THE MACHINE -

The cost per cup of the machine is slightly higher than that of tea and coffee due

to more quantity per cup and Bournvita and Drinking Chocolate being premium category

products.

HINDUSTAN TIMES BUILDINGCONNAUGHT PLACE

I visited Hindustan Times office and met Mr. Tripathi who takes care of the Cafeteria.

He directed me to Mr. Singh who has the contract of the Cafeteria for the entire

Hindustan Times office. Mr. Singh was happy with his own stuff in the Cafeteria and

was not interested in making space for any additional thing. He has his own mindset that

people only look for lunch and bread-pakora or samosa in the Cafeteria and chocolates

was a kid dish thing to keep, but when I visited him again I was able to change his mind

for chocolates.

The next time I visited Mr. Singh I was able to take the order but the non

availability of the visi-coolers again stopped Mr. Singh to give the order.

ORIENT CRAFTNOIDA SECT-57

I visited Orient Craft which is the No.1 Export House, as the work is done 24 hours so

the chocolates can really help the employees to reduce their stress, but out their the

female strength didn’t exist and all the work force was the labour which can not afford a

chocolate everyday. Another thing that there is no pantry for the employees only a

kitchen from where the boy serves the tea, that also only to the superiors.

I met

Mr. Vineet Sharma ( Sr. Merchandiser ) I gave him the idea of sending chocolates to

their clients, and taking Bournvita in the office for energy as a health drink in place of a

cold drink.Though he didn’t placed an order at the very moment but did show the interest

and promised to starty with it, the next month.

ORION DIALOGEAST OF KAILSH

I visited Orion Dialog a leading domestic call centre with all the youngsters working day

and night. I met Ms. Shikha, the senior HR in the organization and gave her the

presentation of the entire idea of keeping chocolates in the pantry. Although it was a very

small one but chocolates did not require a large space, and serving Bournvita to the

employees who are working in the night as a health drink as an incentive in kind to

motivate the employees. Ms.Shikha was quite convinced about the idea so she asked me

to take an appointment later and meet her again, as she would consult with the directors.

I met her again then she asked me to take an appointment directly with the

director, which I did and got an appointment with Ms.Tina Sapra, I gave her the

presentation and she was quite impressed by the idea and agreed to take chocolates for

the pantry and small training program’s which they have often. Ms. Tina Sapra agrees to

take chocolates for the Cafeteria when they shift their organization to a bigger area.

PEC LTD.CONNAUGHT PLACE

I visited PEC ltd. and met Mr. S.S.Negi ( Dy.Mgr ), he gave me a blunt answer that they

don’t have any pantry and no trend of chocolates in the office as chocolates have calories

and are very sweet and not for a diabetic patient. I requested him to take out some time

and have a look at my presentation, he permitted me to do the same and soon after the

presentation, he went to meet his boss. He came back after ten minutes with a positive

reply and placed an order to be delivered as soon as possible.

JAYPEE VASANT CONTINENTAL

VASANT VIHAR

I visited five star hotel Jaypee Vasant Continental and met Mr. Rakesh Dua (Purchase)

who was very good to me, although they were not keeping Cadbury chocolates in their

hotel, as I gave him the reasons to keep Cadbury in place of Nestle he took the proposal

from me and asked me to come later with an appointment. When I visited the next time

he made me meet Mr. Pramod Gupta (V.P materials) whom I gave the presentation of

Cadburys and he asked me to call back later.

When I called up Mr. Pramod Gupta he gave me the order of drinking chocolate at that

very moment, but it was something really bad that our distributor could not supply it in

the evening, he supplied it in the morning. Mr. Pramod Gupta was interested in keeping

Cadbury chocolates in the mini bars as well but after getting the proposal passed by the

management.

COMPARE INFOBASE

JANAKPURI

I visited Compare InfoBase in Janakpuri and met Ms. Smriti Vashisht ( Dy.

Mgr.)finance.

She was quite amazed why a chocolate company executive has taken up an appointment

with her. As I met her, I gave her my presentation of the entire idea of chocolates which I

had in my mind. According to me, she was quite impressed by the idea but she never

showed any sign of interest and asked me to call up later. When I called up later she gave

me an appointment and asked me to meet her, in the meeting she cleared few of her

doubts and then finally was ready to take Cadbury chocolates for the office as well as for

the gifts, which they give to their clients.