Cadbury’s

Cadbury’s-A Media posturing Case

Presented by:-

Jasoda Goyal(15)

Deepti Vyas(52)8th December 2004

A one-man business, opened in 1824 by a John Cadbury John Cadbury, in Bull Street Birmingham, is the foundation of Cadbury Limited, now one of the world's largest chocolate producers. By 1831 the business had changed from a grocery shop and John Cadbury had become a manufacturer of drinking chocolate and cocoa, the start of the Cadbury manufacturing business as it is known today.

SWOT Analyses

Strengths:• Strong brand names like Cadbury Dairy Milk, Five star and Éclairs.•Rich product mix.

Weaknesses:

Lack of launch of new brand 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.

•Exposure to foreign currency exchange rate risk, on account of imported cocoa beans and cocoa butter

Business overview

Problem

•A niche market penetrated largely in urban areas.

•Per capita consumption is low as compared to those in developed countries of the West.

Products

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

Introduction

Cadbury Dairy Milk chocolate was first introduced in the early 1900s.

Till then, It is still the top selling chocolate brand in the country and the Cadbury Mega Brand's broad family of products today has an international retail value approaching Rs.4500crores.

Cont…

• Cadbury Dairy Milk, Fruit & Nut and Whole Nut are the best loved varieties of the Cadbury Mega brand.

• Cadbury Dairy Milk is enjoyed in over 30 countries

Cont…

• The company supplies 650,000 retailers directly and indirectly and is India's leading chocolate company .

• Selling more than a million bars there every day .

• Cadbury dominates the Indian chocolate market with a 65% market share.

Cont…

• It has a 4% market share in the organized sugar confectionery market .

• A15% market share in milk/ malted foods segment.

• For more than five decades now, Cadbury has enjoyed leadership position in the Indian chocolate market to the extent that 'Cadbury’ has become a generic name for chocolate products.

Criteria

• Cocoa bean prices.

• Excise duties. • Changes in custom duties and foreign

exchange.

• Competition from MNCs like Nestle as well as imported brands.

Criteria

• The confectionery giant Cadbury has denied that there is an infestation in its Indian products.

Criteria

• Perk registered a decline during 2001.

• The falling share of chocolates in the total amount spent on an average by a consumer on impulse products.

Alternatives• Sustained volume growth holds the key to

the company's earnings prospects.• Cadbury India should source its cocoa

requirements through forward purchases.• The potential of the sugar confectionery

business can be seen from the fact that despite a hefty price hike, volumes grew by 5 per cent last year.

• Expand the share of chocolates in impulse buying (which is currently about 6%) to 8%.

Alternative

A major successful new product development launch :

• A coffee based sugar confectionery product Mocka.

• Launch of Temptations in the premium segment.

• Chocki a chocolate confectionery for children.

Strategy• 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.

• Consumers will be exposed to the Cadbury message on a continual basis.

Contd..

• Increasing the consumer base by focusing on affordability and availability.

• Changing consumer perception and eating habits by creating new reasons for consumption.

Strategy

• 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

Cadbury Milk Treat   

• Cadbury targets kids with Milk Treat. 

• Milk Treat, a product constituting four wafers with a butterscotch flavored cream enrobed in milky white chocolate.

• The product benefit has been defined as `the goodness of milk married to the fun of chocolate'.

Cont…• Milk Treat has currently been rolled out only in

Kerala and Bangalore. • Milk Treat competes with Nestlé's Milky Bar in

terms of the target segment.• Milk Treat is priced at Rs 10 for 26 gm and the

price of Milky Bar is Rs 13 for a 40 gm bar. • The company expects Milk Treat to corner a five

to seven per cent market share nationally.

Cadbury Perk

• Its strategy to offer value-for-money products to the consumer.

• The new product Perk Slims has four wafers instead of the earlier three and is therefore a lighter eat.

• The real chocolate content is cued through the master-branding icon on the pack.

Cont…

• The story and the character reinforces the brand personality of a warm perky, naughty accessible, Indian girl next door.

• Perk was first launch in 1995.

• The brand was made available in three flavor variants such as Mint, Strawberry and Mango.

• Perk competes with Nestlé's Kit-Kat.

5 Star

• 5 star fills all the gaps CDM leaves with in a relatively similar demographic framework.

• It is mainly positioned in rural area.

• 5 star is not burdened with carrying forward the brand image.

• It is responsible for penetrating all the places CDM left.

Contd….

• In the sub category of an chocolate bar it is by far a leader.

• It is responsible only for generating significant revenue.

• Presence with sporadic bursts in visibility where and when demand necessary.

65%

29%

6%

Cadbury Nestle Others

Market Overview

Bibliography

• Cadburyindia.com

• Foolonthehill.com

• Economictimes

• Case study

• Business today

THANKS