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Chocolate Overview

History of chocolate:

The origin of chocolate can be traced back to the ancient Maya and Aztec

civilizations in Central America, who first enjoyed chocolaty a much-

prized spicy drink made from roasted cocoa beans.

Throughout its history, whether as cocoa or drinking chocolate beverage or

confectionary treat, chocolate has been a much sought after food.

The Aztec empire

Chocolate(in the form of a luxury drink) was consumed in large quantitiesby the Aztecs: the drink was described as finely ground, soft, foamy,

reddish, bitter with chili water, aromatic flowers, vanilla and wild bee honey.

The dry climate meant the Aztecs were unable to grow cocoa trees, and had

to obtain supplies of cocoa beans from tribute or trade

Don Cortes

The Spanish invaded Mexico in the 16th century, by this time the Aztecs hadcreated a powerful empire, and the Spanish armies conquered Mexico. Don

Cortes was made captain general and governor of Mexico. When he

returned to Spain in1528 he loaded his galleons with cocoa beans and

equipment for making the chocolate drink. Soon chocolate became a

fashionable drink enjoyed by the rich in Spain.

Chocolate across Europe

An Italian traveler, Francesco carletti, was the first to break the Spanish

monopoly. He had visited Central America and seen how the Indians

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prepared the cocoa beans and how they made the drink, and by 1606

chocolate was well established in Italy.

Drinking chocolate

The secret of chocolate was taken to France in 1615, when Anne, daughter

of Phillip 2 of Spain married king Louis 13 of France. The French court

enthusiastically adopted this new exotic drink, which was considered to have

medicinal benefits as well as being a nourishing food. Gradually the custom

of drinking chocolate spread across Europe, reaching England in the 1650s

First chocolate for eating

Up until this point all chocolate recipes were based on plain chocolate. It

was an English doctor, Sir Hanss Sloane, who- after traveling in south

America- focused on cocoa and food values, bringing a milk chocolate

recipe back to England.

The original Cadbury milk chocolate was prepared to his recipe.

History:The earliest record of chocolate was over fifteen hundred years ago in the

central America rain forests, where the tropical mix of high rain fall

combined with high year round temperatures and humidity provide the ideal

climate for cultivation of the plant from which chocolate is derived, the

cacao tree.

Chocolate is made from the cocoa bean, found in pods growing from thetrunk and lower branches of the cacao tree, Latin name theobroma cacao

meaning food of the gods Cacao was corrupted into the more familiar

cocoa by the early European explorers. The Maya brewed a spicy,

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bittersweet drink by roasting and pounding the seeds of the cacao tree with

maize and capsicum peppers and letting the mixture ferment.

This drink was reserved for use in ceremonies as well as for drinking by the

wealthy and religious elite; they also ate cacao porridge.

The Aztecs, like the Mayans, also enjoyed cacao as a beverage fermented

from the raw beans, which again featured prominently in ritual and as a

luxury available only to the very wealthy. The Aztecs called this drink

chocolat, the Spanish conquistadors found this almost impossible to

pronounce and so corrupted it to the easier chocolat the English further

changed this to chocolate.

The Aztecs regarded chocolate as an aphrodisiac and their emperor,

Montezuma reputedly drank it fifty times a day from a golden goblet and is

quoted as saying of xocolat: the divine drink, which builds up resistance

and fights fatigue. A cup of this precious drink permits a man to walk for a

whole day without food

Chocolate in Europe

Xocolat or chocolat or chocolate as it became known, was brought to Europe

by Cortez, by this time the conquistadors had learned to make the drink

more palatable to European tastes by mixing the ground roasted beans with

sugar and vanilla ( a practice still continued today), thus offsetting the spicy

bitterness of the brew the Aztecs drank.

The first chocolate factories opened in Spain, where the dried fermented

beans brought back from the new world by the Spanish treasure fleets were

roasted and ground, and by the early 17th century chocolate powder from

which the European version of the drink

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was made- was being exported to other parts of Europe. The Spanish kept

the source of the drink- the beans- a secret for many years, so successfully in

fact, that when English buccaneers boarded what they thought was a Spanish

treasurer galleon in 1579, only to find it loaded with what appeared to be dried sheeps droppings, they burned the whole ship in frustration. If only

they had known, chocolate was so expensive at that time, that it was worth

its weight in silver (if not gold), chocolate was treasure indeed!

Within a few years, the cocoa beverage made from the powder produced in

Spain had become popular throughout Europe, in the Spanish Netherlands,

Italy, France, and Germany and in about 1520 it arrived in England.

The first chocolate house in England opened in London in 1657 followed

rapidly by many others. Like the already well established coffee houses, they

were used as clubs where the wealthy and business community met to smoke

a clay pipe of tobacco, conduct business and socialize over a cup of

chocolate.

Back to the Americas

Events went full circle when English colonists carried chocolate (and coffee)

with them to Englands colonies in North America. Destined to become the

United States of America and Canada, they are now the worlds largest

consumers by far of both chocolate and coffee, consuming over half of

the words total production of chocolate alone.

The Quakers

The Quakers were, and still are, a pacifist religious sect, an offshoot of the

puritans of English civil war and pilgrim fathers fame and a history of

chocolate would not be complete without mentioning their part in it. Some

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of the most famous names in chocolate were Quakers, who for centuries held

a virtual monopoly of chocolate making in the English speaking world fry,

Cadbury and row tree are probably the best known.

Its probably before the time of the English civil war between parliament

and King Charles 1st that the Quakers who evolved from the puritans, first

began their historic association with chocolate. Because of their pacifist

religion, they were prohibited from many normal business activities, so as an

industrious people with a strong belief in the work ethic (like the puritans);

they involved themselves in food related businesses and did very well.

Baking was a common occupation for them because bread was regarded asthe biblical staff of life, and bakers in England were the first to add

chocolate to cakes so it would be a natural progression for them to start

making pure chocolate. They were also heavily involved in breakfast cereals

but thats another story.

What is certain is that the fry, row tree and Cadbury families in England

among others, began chocolate making and in fact Joseph fry of fry &sons(founded 1728 in Bristol, England) is credited with producing and selling the

worlds first chocolate bar. Frys have now all but disappeared (taken over

by Cadbury) and row tree have merged Swiss company nestle, to form the

largest chocolate manufacturer in the world. Cadbury have stayed with

chocolate production and are now, if not quite the largest, probably one of

the best-known chocolate makers in the world.

Chocolate as we know it

The first mention of chocolate being eaten in solid form is when bakers in

England began adding cocoa powder to cakes in the mid 1600s. Then in

1828 a Dutch chemist, Johannes van houten, invented a method of extracting

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the bitter tasting fat or cocoa butter from the roasted ground beans, his aim

was to make the drink smoother and more palatable, however he

unknowingly paved the way for solid chocolate as we know it.

Chocolate as we know it today first appeared in 1847 when fry & sons of

Bristol, England mixed sugar with cocoa powder and cocoa butter (made

by the van houten process) to produce the first solid chocolate bar then

in1875 a Swiss manufacturer, Daniel peters, found a way to combine (some

would say improve, some would say ruin) cocoa powder and cocoa butter

with sugar and dried milk powder to produce the first milk chocolate.

How Chocolate is Made ?

The cocoa-bean -- the heart of the sweetest delicacy in the world -- is bitter!

This is why, up to the 18th century some native tribes ate only the sweetish

flesh of the cocoa fruit. They regarded the precious bean as waste or used it,

as was the case among the Aztecs, as a form of currency.

The Varieties

There are two quite different basic classifications of cocoa, under which

practically all varieties can be categorized: Criollo and Forastero cocoas.

The pure variety of the Criollo tree is found mainly in its native Equador and

Venezuela. The seeds are of finer quality than those of the Forastero variety.

They have a particularly fine, mild aroma and are, therefore, used only in theproduction of high-quality chocolate and for blending. However, Criollo

cocoa accounts for only 10% of the world crop. The remaining 90% is

harvested from trees of the Forastero family, with its many hybrids and

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varieties. The main growing area is West Africa. The cocoa tree can flourish

only in the hottest regions of the world.

The Harvest

Immediately after harvesting, the fruit is treated to prevent it from rotting.At

fermentation sites either in the plantation or at, collecting points, the fruit is

opened.

Fermentation

The fermentation process is decisive in the production of high quality raw

cocoa. The technique varies depending on the growing region.

Drying

After fermentation, the raw cocoa still contains far too much water; in fact

about 60%. Most of this has to be removed. What could be more natural than

to spread the beans out to dry on the sun-soaked ground or on mats? After a

week or so, all but a small percentage of the water has evaporated.

Cleaning

Before the real processing begins, the raw cocoa is thoroughly cleaned by

passing through sieves, and by brushing. Finally, the last vestiges of wood,

jute fibres, sand and even the finest dust are extracted by powerful vacuum

equipment.

Roasting

The subsequent roasting process is primarily designed to develop the

aroma.The entire roasting process, during which the air in the nearly 10 feet

high furnaces reaches a temperature of 130 C, is carried out automatically.

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Crushing and shelling

The roasted beans are now broken into medium sized pieces in the crushing

machine.

Blending

Before grinding, the crushed beans are weighed and blended according to

special recipes.

The secret of every chocolate factory lies in the special mixing ratios, which

it has developed for different types of cocoa.

Grinding

The crushed cocoa beans, which are still fairly coarse are now pre-ground by

special milling equipment and then fed on to rollers where they are ground

into a fine paste. The heat generated by the resulting pressure and friction

causes the cocoa butter (approximately 50% of the bean) contained in the

beans to melt, producing a thick, liquid mixture.

This is dark brown in color with a characteristic, strong odour. Duringcooling it gradually sets: this is the cocoa paste.

At this point the production process divides into two paths, but which soon

join again. A part of the cocoa paste is taken to large presses, which extract

the cocoa butter. The other part passes through various blending and refining

processes, during which some of the cocoa butter is added to it. The two

paths have rejoined.

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CocoaButter

The cocoa butter has important functions. It not only forms part of every

recipe, but it also later gives the chocolate its fine structure, beautiful lustre

and delicate, attractive glaze.

Cocoa Powder

After the cocoa butter has left the press; cocoa cakes are left which still

contain a 10 to 20% proportion of fat depending on the intensity of

compression.

These cakes are crushed again, ground to powder and finely sifted in several

stages and we obtain a dark, strongly aromatic powder, which is excellent

for the preparation of delicious drinks - cocoa. Cocoa paste, cocoa butter,

sugar and milk are the four basic ingredients for making chocolate. By

blending them in accordance with specific recipes the three types of

chocolate are obtained which form the basis of ever product assortment,

namely:

Kneading

In the case of milk chocolate for example, the cocoa paste, cocoa butter,

powdered or condensed milk, sugar and flavouring - maybe vanilla - go into

the mixer, where they are pulverized and kneaded.

Rolling

Depending on the design of the rolling mills, three or five vertically mountedteel rollers rotate in opposite directions. Under heavy pressure they pulverise

the tiny particles of cocoa and sugar down to a size of approx. 30 microns.

(One micron is a thousandth part of a millimeter.)

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Conching

But still the chocolate paste is not smooth enough to satisfy our palates.But

within two or three days all that will have been put right. For during this

period the chocolate paste will be refined to such an extent in the conches

that it will flatter even the most discriminating palate.

Conches (from the Spanish word "conch a", meaning a shell) is the name

given to the troughs in which 100 to 1000 kilograms of chocolate paste at a

time can be heated up to 80 C and, while being constantly stirred, is given a

velvet smoothness by the addition of certain amounts of cocoa butter. A kind

of aeration of the liquid chocolate paste then takes place in the conches: its

bitter taste gradually disappears and the flavor is fully developed. The

chocolate no longer seems sandy, but dissolves meltingly on the tongue.It

has attained the outstanding purity, which gives it its reputation.

Consumption of Chocolates in India

Chocolate consumption in India is extremely low. Per capita consumption is

round 160 gms in the urban areas, compared to 8-10kg in the developed

countries. In rural areas, it is even lower. Chocolates in India are consumed

as indulgence and not as a snack food. A strong volume growth was

witnessed in the early 90s when Cadbury repositioned chocolates from

children to adult consumption. The biggest opportunity is likely to stem

from increasing the consumer base. Leading players like Cadbury and Nestle

have been attempting to do this by value for money offerings, which are

affordable to the masses.

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Cadbury

Process of Manufacturing Cadbury Chocolate:

Milk chocolate for eating was first made by Cadbury in 1897 by adding

milk powder John paste to the dark chocolate recipe of cocoa mass, cocoa

butter and sugar. By today's standards this chocolate was not particularly

good: it was coarse and dry and not sweet or milky enough for public tastes.

There was a great deal of competition from continental manufacturers, not

only the French, but also the Swiss, renowned for their milk chocolate.

Led by George Cadbury Junior, the Bourneville experts set out to meet the

challenge. A considerable amount of time and money was spent on research

and on new plant designed to produce the chocolate in larger quantities.

A recipe was formulated incorporating fresh milk, and production processes

were developed to produce a milk chocolate 'not merely as good as, but

better than' the imported milk chocolate'.

Four years of hard work were invested in the project and in 1905 what wasto be Cadbury's top selling brand was launched.

Three names were considered: Jersey, Highland Milk and Dairy Maid.

Dairy Maid became Dairy Milk, and Cadbury's Dairy Milk,with its unique

flavour and smooth creamy texture, was ready to challenge the Swiss

domination of the milk chocolate market.

By 1913 Dairy Milk had become the company's best selling line and in the

mid twenties Cadbury's Dairy Milk gained its status as the brand leader, a

position it has held ever since.

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Cadbury India

Cadbury began its operations in 1948 by importing chocolates and then re-

packing them before distribution in the Indian market. After 59 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.

Currently Cadbury India operates in three sectors viz. Chocolate

Confectionery, Milk Food Drinks and in the Candy category.In the

Chocolate Confectionery business,Cadbury has maintained its undisputed

leadership over the years. Some of the key brands are Cadbury Dairy Milk ,5

Star , Perk, clairs and Celebrations. Cadbury enjoys a value market share of

over 70% - the highest Cadbury brand share in the world! Their flagship

brand Cadbury Dairy Milk is considered the "gold standard" for chocolates

in India. The pure taste of CDM defines the chocolate taste for the Indian

consumer. In the Milk Food drinks segment their main product is Bournvita- the leading Malted Food Drink (MFD) in the country. Similarly in the

medicated candy category Halls is the undisputed leader.

The Cadbury India Brand Strategy has received consistent support through

simple but imaginative extensions to product categories and distribution. A

good example of this is the development of Bytes Crispy wafers filled with

coca cream in the form of a bagged snack, Bytes is positioned as "The newconcept of sweet snacking". It delivers the taste of chocolate in the form of a

light snack, and thus heralds the entry of Cadbury India into the growing

bagged Snack Market, which has been dominated until now by Salted

Bagged Snack Brands. Byte was first launched in South India in 2003.Since

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1965 Cadbury has also pioneered the development of cocoa cultivation in

India.

For over two decades, it has worked with the Kerala Agriculture University

to undertake cocoa research and released clones, hybrids that improve the

cocoa yield.

Today, Cadbury is poised in its leap towards quantum growth and new

categories of business, namely gums, mints, snacking and gifting. It is a part

of the Cadbury Schweppes Group, world's No.1 Confectionery Company.

Cadbury World Wide

Cadbury is the world's largest confectionery company and have a strong

regional presence in beverages in the Americas and Australia.With origins

stretching back over 200 years, today their products - which include brands

such as Cadbury, Schweppes, Halls, Trident, Dr Pepper, Snapple, Trebor,

Dentyne, Bubblicious and Bassett - are enjoyed in almost every country

around the world. We employ around 60,000 people.

Their heritage starts back in 1783 when Jacob Schweppes perfected his

process for manufacturing carbonated mineral water in Geneva, Switzerland.

And in 1824 John Cadbury opened in Birmingham selling cocoa and

chocolate.

These two great household names merged in 1969 to form Cadbury

Schweppes plc. Since then they have expanded their business throughout the

world by a programme of organic and acquisition led growth.

Concentrating on their core brands in beverages and confectionery since the

1980s, they have strengthened their portfolio through almost fifty

acquisitions, including brand icons such as Mott's, Canada Dry, Halls,

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Trident, Dentyne, Bubblicious, Trebor, Bassett, Dr Pepper, 7 Up and

Snapple.

- It employs 60,000 people in over 200 countries

- Worlds No 1 Confectionery company

- World's No 2 Gums company

- World's No 3 beverage company

Cadbury Chocolates

Dairy Milk

The story of Cadbury Dairy Milk started way back in 1905 at Bourneville,

U.K., but the journey with chocolate lovers in India began in 1948.

The variants Fruit & Nut, Crackle and Roast Almond, combine the classic

taste of Cadbury Dairy Milk with a variety of ingredients and are very

popular amongst teens & adults.Cadbury Dairy Milk has exciting products on offer - Cadbury Dairy Milk

Wowie, chocolate with Disney characters embossed in it, and Cadbury Dairy

Milk 2 in 1, a delightful combination of milk chocolate and white chocolate.

Giving consumers an exciting reason to keep coming back into the fun filled

world of Cadbury. Today, Cadbury Dairy Milk alone holds 30% value share

of the Indian chocolate market.

5 Star

The second largest after Cadbury Dairy Milk with a market share of 14%,

Cadbury 5 Star moves from strength to strength every year by increasing its

user base.

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Launched in 1969 as a bar of chocolate that was hard outside with soft

caramel nougat inside, Cadbury 5 Star has re-invented itself over the years to

keep satisfying the consumers taste for a high quality & different chocolate

eating experience.

One of the key properties that Cadbury 5 Star was associated with was its

classic Gold colour. And through the passage of time, this was one property

that both, the brand and the consumer stuck to as a valuable association.

More recently, to give consumers another reason to come into the Cadbury 5

Star fold, Cadbury 5 Star Crunchy was launched. The same delicious

Cadbury 5 Star was now available with a dash of rice crispies.

Perk

Cadbury launched Perk in 1996. With its light chocolate and wafer

construct, Cadbury Perk targeted the casual snacking space that was

dominated primarily by chips & wafers. With the rise of more value-for-

money brands in the wafer chocolate segment, Cadbury

Perk unveiled two new offerings - Perk XL and XXL. In 2004, with an

added dose of 'Real Cadbury Dairy Milk' and an 'improved wafer', Perk

became even more irresistible

Celebrations

Cadbury Celebrations was aimed at replacing traditional gifting options like

Mithai and dry- fruits during festive seasons.Cadbury Celebrations is available in several assortments: An assortment of

chocolates like 5 Star, Perk, Gems, Dairy Milk and Nutties and rich dry

fruits enrobed in Cadbury dairy milk chocolate in 5 variants, Almond magic,

raisin magic, cashew magic, nut butterscotch and caramels.

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SWOT analysis of Cadbury

Strength

1. Very strong brand equity in India.

2. Due to its 54 years presence in India has deep penetration

2100 distributors; 450,000 retailers, 60 mid urban (22%)

customers.

3. Three sectors; Chocs (70% share), Confec (4%), food drinks

(14% - leader in brown segment).

4. Low cost of production due to economic of scale. That means

higher profits and / or more competitioners. Better market

penetration.

5. Second best manufacturing location throughout Cadbury

Schweppes.

Weakness1. Poor technology in India compared to current international

technologies (Godiva, Mozart, Fazer, Dint, Naushans, etc...)

2. Ltd. Key products, only one central brand (CDM). Pralines range

totally wising in India.

3. Make in India tag once the economy opens up wore and imports

rush in.

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Opportunities

1. Tremendous scope for per capita consumption (160 gms of 8 10

kg)

2. Increasing per capita national income resulting in higher

disposable income.

3. Growing middle class and growing urban population.

4. Increasing gifts cultures.

5. Substitute to Mithais with higher calories/cholesterol.

6. Increasing departmental stores concept impulse @ at cash

counters.

7. Globalisation: optimal use of global Cadbury Schweppes.

Threats

a) Major:-

None. Due to low cost and highest brand equity, it is today in India.

b) Minor:-

Globalization will being in better brands for upper end of the market

(Liest, Monarch, Godiva, etc).

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Marketing Mix of Cadbury

Product

Satisfaction suffices. But delight dazzles the average company will competefor customer by conforming to her expectation consistently. But the winner

will surpass them by constantly exceeding her expectation, delivering to her

door step additional benefits which she would never have imagined possible.

Cadburys offer such product. The wide variety products offered by the

company include:

I. Chocolate & Confectionary

1) Dairy Milk

2) 5 Star

3) Temptation

4) Perk

5) Gems6) Eclairs

7) Celebrations

II. Beverages

1) Bournvita

2) Drinking chocolate

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Pricing

Make no mistake. Second P of marketing is not another name for blindly

lowering prices and relying on this strategy alone to increase sales

dramatically. The strategy used by Cadburys is for matching the value that

customer pays to buy the product with the expectation they have about what

the production is worth to them.

Cadburys has launched various products which cater to all customer

segments. So every customer segment has different price expectation from

the product. Therefore maximizing the returns involves identifying right

price level for each segment, and then progressively moving through them.

Dairy Milk Rs. 22

Perk Rs. 10

5 Star Rs. 10

Friut and Nut Rs. 28

Gems Rs. 10

Temptation Rs. 55

Bournvita (500 gm) Rs. 104

Drinking chocolate Rs. 50

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Physical Distribution Place

BRAND ISNT THE ONLY ANY MORE. Marketers and finance manager

need a new term to evaluate their business:

Distribution Equity. It takes much more time and effort to build, but once

built, distribution equity is much together to erode.

The fundamental axiom of Indian consumer market is this:

You can set up a state-of the-art manufacturing facility, hire the hottest

strategies on the block, swamp prime television with best Ads, but the end of

it all, you would be know of selling your products. The cardinal task beforethe Indian market is managing is to shoe-horn its product on retail shelves.

Buyers are paying for distribution equity not brand equity and market shares.

Why does the company need distribution equity more anything in India?

With technology and competitive pressure slash in it is becoming increasing

difficult for marketers to retain a unique product differentiation for ling

period. In a product and price parity situation, the brand that sells more is theone that reaches the highest number of customers.

India 1 billion people, 155 million household has over 4 million retail

outlets in 5351 urban markets and 552725 villages, spread cross 3.28 million

sq. km. television has already primed and population for consumption, and

the marketer who can get to the to the consumer ahead of competition will

give a hard to overtake lead. But getting their means managing wildlydifferent terrains-climate, language, value system, life style, transport and

communication network.

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And your brand equity isnt going to help when it comes to tackling these

issues. Own distribution network consist of clearing and forwarding (C&F)

agents & distribution stockiest. This network of distribution can either

contact wholesalers and which in turn retailers or the distributors can contactto the retailers directly.

Once the stock product reaches retailers, the prospective customers can have

access to the product.

Cadburys distributes the product in the manner stated above.

Cadburys distribution network has expanded from 1990 distributors last

year to 2100 distributors and 4,50,000 retailers. Beside use of TI tom

improves logistics, Cadbury is also attempting to improve the distribution

quality. To address the issue of product stability, it has installed visi colors at

several outlets. This helps in maintaining consumption in summer when

sales usually drops due to the fact that the heal effects product quality and

thereby off takes.

Looking at the low penetration of the chocolate, a distribution expansion

would itself being incremental volume. The other reason is arch rival Nestle

reaches more than a million retailers.

This increase in distribution is going to be accompanied by reduction in

channel costs. Cadburys marketing costs, at 18% of total costs, is much

higher than Nestls 12% or even pure sugar confectionery major Parrys

11%. The company is looking to reduce this parity level. At Cadbury, they

believe that selling confectionery is it like selling soft drinks.

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Promotion

If an advertisement is to communicate effectively, the receiver must at least

half want it to, and be prepared too take step toward the sender. Effective

advertising is rarely hectoring or loudly explicit. It often both attracts and

generates arm feelings. More often than not, a successful campaign has a

stronger element of the unexpected a quality that good advertising shares

with much worthwhile literature.

To penetrate into the inner recesses of her memory, communication must

first ensure exposure, grab her attention evoke her comprehension, grab her

acceptance and then extract retention competing with thousands of other

units of communication trying to do the same.

Finding showed that the adults felt too conscious to be seen consuming a

product actually meant for children. The strategic response address the

emotional appeal of the band to the child within the adult. Naturally, that

produced just the value vacuum that Cadbury was looking to fill. Thereafter

it was the job of the advertising to communicate customer the wonderfulfeeling that he could experience by re-discoursing the careful, unself

conscious, pleasure seeking child within himself a graft these feeling

onto the Ad campaign like Khane Walon Ko Khane Ka Bahana Chahiye

for CMD and Thodi Si Pet Pooja Kabhi Bhi Kahin Bhi for Perk have

been sure shot winner with the audience.

Whirl with the new launched temptations with the slogan Too To Sharethe communication resolves around the reluctance of a person whos got

their hand on a bar of temptation to let anyone else to have a bite.

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As well as outdoor and radio ads, ad agency contract has created

communication for cinemas and even ATM machines for the brand.

All ICICI s ATM a message flashes on the screen as soon as customer

insert his ATM card. It tells the customer that this would be good time to get

out of her temptation since he/she is bound to be alone. Something familiar

is planned for phone-book as well. In cinemas, Cadbury has a message on-

screen just before the lights are dimmed to give them a chance to get their

temptations. There will also be after dinner sampling in restaurants to

begin with, 30 catteries in Mumbai have been selected.

The next round of activity will include the wafer-chocolate Perk and the

Picnic bar, which has faced problems with its taste, because of the peanut it

contains. Milk treat has also been launched in a module bar form, just in

time of Diwali gifting market. clairs has got potential for much wide

distribution, in a small sweets that airlines, hostels, and up market retail

outlet offer to guest and customers.

Ad spend in 2000 was about 14% of sales and the management said thatplans to maintain as spend at this level in the current year also.

Ad since any discussion today would be incomplete without mention e

word, the management plans to tap this new channel of marketing. Beside

three company website (i.e. www.cadburyindia .com, wwww.bourvita.com,

www.cadburygift.com that the company has launched, it had also entered

into various marketing relationship with other portals, specially targeted

during festivals and events such as Valentines day , etc.

Its a combination of spiffing up its key brand, researching and improving

the newer products that havent taken off, supported with high ad spends

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that Cadbury hopes will see it emerges stronger after the current slowdown,

as well as expand the market.

Positioning

In the 1970s consumers were ready to pay more for more, and luxury

goods flourished. In the 1980s, consumers began to demand more for

same, and the discounting era grew strong. Todays consumer demanding

more for less, and the winner will be that super value marketers. Some

of todays most successful companies recognize those customers are more

educated and able to recognize true customer value

Positioning is simply concentrating on an idea or even a word defines

that company in the mind of the consumer. It is more efficient to market one

successful concept to one large group of people than 50 product or service

ideas to 50 separate group repositioning is a must when customer attitude

have changed and product have strayed away from the consumers long

standing perception of them

Cadburys is an anchor in sea of confectionary products. As a variety of

competitive claims assails her senses, today customer uses complicated

decision making process to assess the alternative before making a purchase.

Since Cadburys is more clearly associated with a particular set of attributes

in terms of benefits and prices, the quicker becomes her search process.

Positioning of individual product:

1) CDM: is and always remain flagship brand. The punch by the

company for advertising this product life. Real taste of Life, itself

defines the positioning of the product. The chocolate is meant for all

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age groups. It symbolizes fun, enjoyment, good items. It has goodness

of milk, taste and appetite appeal.

2) 5 star: although positioned internationally as an energy bar, 5 star was

positioned on an emotional platform in India during the late 1980s.

Symbolizing togetherness, 5 star was originally targeted at teenagers.

In June 1994, the company reworked the strategy for 5 star to make it

a source of energy. In fact, before the launch of Perk, 5 stars energy

bar positioning made it a snacking chocolate.

3) clairs: competing in the chewable toffees segment. clairs was re-

launched during the mid-nineties with a new name, Dairy Milk

clairs.

4) Gems: broadcasting Gems, though, didnt prove to be feasible

proposition for Cadbury. Targeted at children under 12 years with

Gems Bond advertising. Cadbury decided to too teenagers with the

Smart Very Smart campaign. But now, the company is retargeting

children with its animated commercial. Gems are the best brand tospeak to children. Colorful chocolate buttons appeal most to children

and that is why Cadbury is re-targeting children.

5) Crackle: it was the first Cadburys chocolate to have crunch in it. It

was targeted as a funky chocolate to add spark to life.26

6) Perk: in September, 1995, Cadbury preempted the launch of Nestls

Kit-Kat by rushing a new brand, Perk into the market. Positioned

much further on the functional scale than 5 star, Perk was meant to be

light snack-product for subduing the first pangs of hunger.

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7) Bournvita: positioned as tasty health drink. While its competitors

concentrated only on health aspect, Bournvita combined the nutritious

value with taste.

Segmentation

Market place for any product is comprised of many different segments of

consumers, each with different needs and wants. Markets segmentation can

be defined in a number of ways such as:

Demographic variables (e.g. Consumers are groups, gender, material

states income etc)

The lifestyle of consumers (i.e. their interests and activities) the

benefits which consumers look for in a product or on the occasions

when the product might be consumed.

Cadbury takes into account all these factors when producing a range

of products. It targets different segments within the market, such as

the.

Break segment products which are normally consume as a snatched

break and often with tea and coffee, for example Cadburys Perk and

snack range.

Impulse segment these products are often purchase on impulse,

eating these and then. They include product such as Cadburys Dairy

Milk.

Take home segment this describes product that are normally

purchased in supermarkets, taken home consumed at a later stage.

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Cadbury New Launch

Cadbury Bournville Fine Dark Chocolate now in India

Globally, dark chocolate is the fastest growing segment within theconfectionary category. It is loved by millions of consumers because of the

rich taste and intrinsic health and well-being benefits . The launch of

Cadbury Bournville Fine Dark Chocolatein India is timely, as it will cater to

the evolving consumer preferences and serve as a treat for consumers

looking for a moment of sheer indulgence.

Made from the finest ingredients, each individually presented CadburyBournville Fine Dark Chocolate is an irresistible in-the-mouth delight

specially created to savour the Indian palate. And with 44% cocoa from the

worlds finest Ghana beans and an ever so smooth texture, each little chunk

is dark and undeniably good.

A natural source of anti-oxidants,Cadbury Bournville Fine Dark Chocolate

just makes you feel good about giving in to your chocolate cravings. DarkChocolate acts as a mood-booster; by boosting serotonin and endorphin

levels that generate the feel-good factor. This more than a perfect bar of dark

chocolate turns the simple act of eating it into a form of art. It demands a

certain ritual, where, in a way, each of its steps offers a tribute to every stage

of your journey.

Speaking on the launch, Anand Kripalu, Managing Director Indian Sub-Continent, Cadbury Ltd. said This launch is our commitment to innovation

and to meet the ever-changing consumer needs in our market. The dark

chocolate category will grow strongly in the coming years because of its

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sophisticated taste and health benefits, and Bournville is our special offering

to capture this opportunity.

The Cadbury Bournville Fine Dark Chocolate will appear on shelves in

modern retail outlets across major cities in the country. Cadbury Bournville

Fine Dark Chocolate will be available in four different variants Rich Cocoa

(80g), Almond, Hazelnut and Raisin & Nut (90g each) and will retail at Rs.

75.

Cadbury launches 'CADBURY LITE'

Cadbury India Limited, India's leading confectionery company today

announced the launch of a new offering ' Cadbury Lite ' to satiate the craving

for 'Something Meetha'. This special offering from Cadbury is sure to bring

joy to millions of people, who can now enjoy the authentic taste of milk

chocolate with `No added sugar'.

Cadbury Lite is the first 'No added sugar' product in the Cadbury India

portfolio and will mark the company's foray in catering to specific dietary

needs of consumers.Cadbury Lite contains a sugar substitute called Maltitol, which ensures the

product has a low glycemic index.

Commenting on the launch, Anand Kripalu, Managing Director Cadbury

India, said, "As India's most loved confectionery brand, Cadbury has

touched the heart of every Indian for over 59 years. We are now delighted to

offer this special addition that delivers the great Cadbury chocolate taste,while caring for the special dietary needs of people"

Cadbury Lite is currently being launched in Tamil Nadu and Andhra Pradesh

markets and will roll out to the other states in a phased manner. The 40g bar

is priced at Rs. 28.

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Cadbury's Brand Management Strategies

"Typically, we always talk about chocolates being eaten when everyone is

happy. And this is something advertising has always mirrored. But we found

that chocolates are eaten under diverse conditions and moods - when people

are anxious, when they are sad, when happy - a whole range of emotions.

Now if you take a distillation of this thought, chocolate is a true soulmate.

Someone who is with you through the ups and downs of life, helping you

bounce back. And that's what Cadbury's Dairy Milk (CDM) is - a special

friend. This is the thought that we have captured through different human-

relationship plots. We are just showing the way CDM features in theconsumer's life."

In March 2002, India's number one chocolate company Cadbury India Ltd.

(CIL), launched a new advertisement campaign for its flagship chocolate

brand, Cadbury's Dairy Milk (CDM). The campaign featured a television

(TV) commercial that was significantly different from the company's earlier

commercials for the brand. It featured Cyrus Broacha1 interviewing collegestudents and asking why they liked to eat CDM. This was followed by

college students 'singing' their excuses for eating CDM. Just as the

commercial seems all set to end with the students and Cyrus singing the

famous CDM theme, 'Khane Walon Ko Khane Ka Bahaana Chaahiye' (those

who want to eat, will find excuses), a student comes up and questions Cyrus,

'Kyon Chaahiye?'

(Why does one need an excuse to eat CDM)? The advertisement aimed at

conveying the idea that no specific occasion is required for consuming

CDM. This was a significant departure from CIL's strategy of appealing to

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adults in India, who sought a rational justification for indulging in chocolate

consumption.

A source at CIL's advertising agency, O&M, explained, "The format

(excuses campaign) was not giving the brand a chance to explore. And the

formatting was having a marginal negative impact, especially among the

youth, who still form some 70-80% of CDM's audience.

Today, CDM is competing with colas, snacks and burgers. And there is a

feeling that perhaps these products are speaking a lingo that is closer to the

youth, and that CDM might not be connecting with the youth as well. Hence

the change in format." Even as company watchers were analyzing this shift,CIL launched another campaign for CDM, which completely did away with

the 'Khaanewaalon Ko...' campaign.

The TV commercials that were a part of this campaign featured the tagline,

'Saath Rahe Har Pal' (accompany you every moment). Many people in

corporate circles wondered why CIL had abandoned its carefully built up

and highly successful four-year-old "excuses" campaign. Few analysts feltthat the company had been forced to reposition the CDM brand due to the

severe competition from posed by archival Nestle India.

Others were commented that CIL was only trying to infuse fresh life into

CDM and give it a contemporary image. However, this radical shift was

necessitated not by external circumstances but by series of changes that had

taken place within the company.Background Note

CIL and the Cadbury's brand are synonymous with chocolate in the minds of

Indian consumers. A part of the leading US-based global confectionery and

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beverages major, the Cadbury Schweppes group, CIL has been the leader in

the Indian chocolate market for many decades.

The company began manufacturing operations in Mumbai in 1946. CIL was

initially incorporated as a wholly owned subsidiary of Cadbury Schweppes

in 1948 and was called Cadbury Fry (India) Ltd. The first product to be

launched in the country was the globally successful brand, CDM.

In the early 1960s, CIL shifted its manufacturing base to a plant in Thane,

Maharashtra. The plant, which expanded substantially over the years,

manufactured a range of CIL products.

The company's R&D and engineering development divisions were also

located in Thane. In the 1960s, CIL launched a range of products such as

Crackle, 5 Star, Gems, Tiffins, Nutties, Butterscotch and Caramels.

Most of these products became instant successes and led to rapid growth in

chocolate consumption in India. Following this, the company launched

Cadbury's Eclairs in 1972, priced at 25 paise.

Eclairs, Cadbury chocolate, was a runaway success, despite being pricedhigher than the available sugar confectioneries in the market at that time. In

1978, Cadbury Schweppes had to dilute 60% of its equity in Cadbury Fry to

comply with FERA guidelines.4 Cadbury Schweppes's stake in CIL was

further diluted to 40% in 1999...

Reinventing The Brands Ceaselessly

CIL launched a number of new products in 1998, such as Picnic (a chocolate

bar with wafer, peanuts, raisins and caramel), Byte (a strawberry flavoured

candy), English Toffee (a chewy toffee) and Cadbury Gold (a CDM with a

soft center). While Picnic was promoted as a 'solid, filling and ingredient-

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packed' chocolate, Cadbury Gold was promoted through an 'emotional'

appeal.

The advertisement featured a woman by a poolside eating a bar of Cadbury

Gold and fantasizing about being in the men's changing room, with the men

running desperately to cover themselves. The commercial ended with the

woman smiled in a self-chiding but mischievous manner.

This advertisement aimed at changing the existing brand image in the

consumer's mind (of family values and wholesomeness), by emphasizing

self-indulgence and mood-upliftment. Cadbury Gold thus tried to add a new

dimension to traditional CIL brand values of family values andwholesomeness.

Much to the company's dismay, these new products failed to click with the

consumers, largely because of their taste. During that same period (the late

1990s) Nestle's range of snack-substituting chocolates such as Charge, Nuts,

KitKat orange and Crunch, ate into the share of most of CIL's new launches

(Picnic and Cadbury Gold were eventually discontinued)...A Change in Focus

Puri changed CIL's vision statement from 'A Cadbury in every pocket' to

'Life full of Cadbury and Cadbury full of life.' As a result, the company

shifted its focus from launching new brands to rejuvenating and

strengthening the existing brands (CDM, 5-Star, Perk, Gems and Eclairs). In

addition, CIL planned to extend its reach to semi-urban and rural markets.Puri said, "Small towns present tremendous opportunities." CIL also decided

to sell its products through 'non-traditional' outlets like music stores (such as

MusicWorld), malls, renowned bookstores and popular apparel outlets (such

as Pantaloons and Wills Sport boutiques)...

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Nestle

Nestle India

Nestle India is a subsidiary of Nestle S.A. of Switzerland. The companyinsists on honesty, integrity and fairness in all aspects of its business and

expects the same in its relationships.

Nestle India- Presence across India

Beginning with its first investment in Moga in 1961, Nestls regular and

substantial investments established that it was here to stay. In 1967, Nestl

set up its next factory at Choladi (Tamil Nadu) as a pilot plant to process the

tea grown in the area into soluble tea.

The Nanjangud factory (Karnataka), became operational in 1989, the

Samalkha factory (Haryana), in 1993 and in 1995 and 1997, Nestl

commissioned two factories in Goa at Ponda and Bicholim respectively.

Nestl India is now putting up the 7th factory at Pant Nagar in Uttaranchal.

Nestles Story

Nestl was founded in 1867 on the shores of Lake Geneva in Vevey,

Switzerland and its first product was Farine Lacte Nestl, an infant cereal

specially formulated by Henri Nestl to provide and improve infant

nutrition. From its first historic merger with the Anglo-Swiss Condensed

Milk Company in 1905, Nestl has grown to become the worlds largest and

most diversified food Company, and is about twice the size of its nearest

competitor in the food and beverage sector.

Nestls trademark of birds in a nest, derived from Henri Nestls personal

coat of arms, evokes the values upon which he founded his Company.

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Namely, the values of security, maternity and affection, nature and

nourishment, family and tradition. Today, it is not only the central element

of Nestls corporate identity but serves to define the Companys products,

responsibilities, business practices, ethics and goals.

In 2004, Nestl had around 247,000 employees worldwide, operated 500

factories in approx. 100 countries and offered over 8,000 products to

millions of consumers universally. The Companys transparent business

practices, pioneering environment policy and respect for the fundamental

values of different cultures have earned it an enviable place in the countries

it operates in. Nestls activities contribute to and nurture the sustainableeconomic development of people, communities and nations. Above all,

Nestl is dedicated to bringing the joy of Good Food, Good Life to people

throughout their lives, throughout the world.

Nestle Chocolates

Nestle Kit Kat

Are crisp wafer fingers covered with choco layer. Nestle Kit Kat has a

unique finger format with a breaking' ritual attached to it.

Nestle Kit Kat is one of the most successful brands in the world and every

year over 12 billion Nestle Kit Kat fingers are consumed around the globe.

Nestle Munch

Nestle Munch is wafer layer covered with delicious choco layer. NestleMunch is so crisp, light and irresistible that you just can't stop Munching.'

Nestle Munch is the largest selling SKU in the category!

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Nestle MilkyBar

Nestle MilkyBar is a delicious milky treat, which kids love. Relaunched in

January 2006 with a Calcium Rich recipe, Nestle MilkyBar is a favorite with

parents to treat their kids with.

Nestle Bar-One

Is a luscious nougat and caramel with delicious choco layer. Nestle Bar-One

constantly reminds you that it is Time for Action'.

Nestle Milk Chocolate

Nestle Milk Chocolate is a milk chocolate with a delicious taste. Kids justlove it!

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SWOT Analysis of Nestle

Strengths

1) Parent support - Nestle India has a strong support from its parent

company, which is the worlds largest processed food and beverage

company, with a presence in almost every country. The company has

access to the parents hugely successful global folio of products and

brands.

2) Brand strength - In India, Nestle has some very strong brands like

Nescafe, Maggi and Cerelac. These brands are almost generic to their

product categories.

3) Product innovation - The Company has been continuously introducing

new products for its Indian patrons on a frequent basis, thus

expanding its product offerings.

4) Operated factories in 77 countries (all six continents), a truly global

company.5) Considered the innovation leader in the global food and nutrition

sector(3500 scientist in company R&D network)

6) Low cost operators (beat the competition by producing low cost

products, edging ahead with low operating costs)

Weaknesses

1) Exports The companys exports stood at Rs 2,571 m at the end of

2003 (11% of revenues) and continue to grow at a decent pace. But a

major portion of this comprises of Coffee (around 67% of the exports

were that of Nescafe instant to Russia). This constitutes a big chunk of

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the total exports to a single location. Historically, Russia has been a

very volatile market for Nestle, and its overall performance takes a hit

often due to this factor.

2) Supply chain -The Company has a complex supply chain management

and the main issue for Nestle India is traceability. The food industry

requires high standards of hygiene, quality of edible inputs and

personnel. The fragmented nature of the Indian market place

complicates things more.

3) Some of their product were positioned as too scientific, and

consumers didnt quite understand (i.e. LC-1 was a food and not a

drug)

Opportunities

1) Expansion - The Company has the potential to expand to smaller

towns and other geographies. Existing markets are not fully tapped

and the company can increase presence by penetrating further. With

India's demographic profile changing in favor of the consuming class,

the per capita consumption of most FMCG products is likely to grow.

Nestle will have the inherent advantage of this trend.

2) Product offerings - The Company has the option to expand its product

folio by introducing more brands which its parents are famed for like

breakfast cereals, Smarties Chocolates, Carnation, etc.

3) Global hub - Since manufacturing of some products is cheaper in

India than in other South East Asian countries, Nestle India could

become an export hub for the parent in certain product categories.

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4) Health-based products are becoming more popular in the world,

including in the United States

5) Unaffected by current economic conditions (its share of the UK

confectionery market rise to 15.6 per cent with a 0.5 per cent growth

this year)

Threats

1) Competition - The Company faces immense competition from the

organized as well as the unorganized sectors. Off late, to liberalize its

trade and investment policies to enable the country to better function

in the globalised economy, the Indian Government has reduced the

import duty of food segments thus intensifying the battle.

2) Changing consumer trends - Trend of increased consumer spends on

consumer durables resulting in lower spending on FMCG products. In

the past 2-3 years, the performance of the FMCG sector has been

lackluster, despite the economy growing at a decent pace. Although,

off late the situation has been improving, the dependence on monsoon

is very high.

3) Sectoral woes - Rising prices of raw materials and fuels, and inturn,

increasing packaging and manufacturing costs. But the companies

may not be able to pass on the full burden of these onto the customers.

4) Some markets they are entering are already mature.

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Marketing Mix Of Nestle

Product

Nestl is a famous group of companies. It is well known for its rendered

services in food sector.

Good nutrition is essential from the very beginning. That's why Nestl

strives to provide the best for everyone. Nestl has recognized the special

nutritional requirements which start from infants and covers the range to all

age groups.

They add specific nutrients to milk and encourage children to consumenutritious products with different flavors, colors and shapes. For small

children, and families Nestl offers smaller sizes and portion able packs.

Teens like lots of affordable enjoyment, with big portions and a succession

of tastes and textures, particularly when they are buying the products

themselves. They also favor ready-to-drink beverages, and here they can

offer them a choice of refreshing teas or milk-based drinksGood tasting lighter meals and healthier milks formulated specifically for

adults are examples of how Nestl caters to these needs. Nestl Clinical

Nutrition has a range of good tasting products to help them do it. Nestl milk

and dairy products are recognized throughout the world.

Pricing

Nestl has its own set of techniques for setting the prices of the product. It

does not primarily focus on the competitors pricing strategies. It emphasizes

on the market demand of the product. Nowadays market is going through

tough recession, so they set their prices keeping in view the purchasing

power of the customers.Moreover the prices of the products are also

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subjected to the type of consumer product. If the product is a daily use then

it can have a minimum price to attract the customer towards your product.

Thus the company cannot influence much on the prices.

Price Structure

General: The prices of Nestls products are within the customers buying

power. Nestl also give discounts to their regular customers. Nestl has set

prices in such a way that it offers the most quality products with acceptable

prices. Its prices are very much comparable with its competitors. It also

considers the fact that Indian market is not as much economically viable as

the other foreign markets. So it keeps in mind all the below line factors

while setting the prices of the products.

Place

Selection of place is also a very pivotal step in the success of the

organization. The place must be right where the customer wants to be, it

must be easy assessable and approachable to the customer. Nestl makes it

sure that its product is available at every corner of the country regardless of

rural or urban areas. Nestls main focus is to make the product within the

access of every consumer so that the consumer should have no difficulty in

getting the product. It also helps Nestl to compete with the competitors

more effectively as by this it can make the product available to maximums

number of target customers. Nestle is catering the market of Gujrat in very

effective manner by providing its products in each and every corner whichstarts from the city and covers the rural areas specially its product.

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Middlemen and distribution channels

In Nestl the distributions role within its marketing mix is to take the

product to its target market.Today executives have come to realize their

customers' satisfaction - or dissatisfaction - was linked to the performance of

their supply chain. Bernard Teiling, assistant vice president of business

process integration for Nestl S.A., which is based in Vevey, Switzerland,

says supply chain management (SCM) is "both a source of competitive

advantage and a lever for profit margin." Even though the complexity and

the cost of SCM have continually increased over the last two decades,

companies must be proficient in this process. "If you are not good at SCM,someone else will be," says Teiling.Nestl defines SCM as the two-way

management of the flow of goods, services and information from suppliers

to manufacturers, wholesalers, distributors, stores -- to the end user. SCM is

especially critical for the food industry because of the ease of

spoilage.Teiling feels a consumer products company remains profitable only

if it has the right product at the right price in the right place at the right time.

However, getting these stars to line up only happens when "the entire supply

chain works as one."

Seen that way, SCM becomes a branding issue. When Nestl places its logo

on a product, the logo represents "a seal of quality." Protecting that quality

makes Nestl responsible for its entire supply chain. Teiling says consumers

don't care if a supplier or distributor had a problem. "If something goes

wrong in the supply chain, it ruins things for the consumer," says the Nestl

executive.Even though Nestl feels responsible for every link in the supply

chain, it outsources many of those activities. "No one company can claim to

do everything from A to Z in the food industry. Today that's impossible,"

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says Teiling. For example, Nestl does no farming. And the world's largest

food company sells almost nothing directly to consumers.With the arrival of

the Internet, companies today want to manage their supply chains through

"an efficient interface with an eMarketplace." Many different exchanges aredeveloping. Teiling describes them "as a tremendous opportunity for Nestl

to work effectively to create new levels of performance."

Nestl is using all the three levels of channel to ensure that its product

should readily available to all its users throughout the country. Like it is

using a zero level channel for distributing its product to its customers. It uses

mostly the 3-level channel. For example in case of milk products, it uses 3-level channel to penetrate into the as there is enough competition. On other

hand, in case of mineral water such as Ava is uses zero level channel as it

supplies the jumbo bottles of Ava directly to hotels.

Promotion

Nestl sets its promotional budget on annually basis. Nestl is well aware of

the importance of the effectiveness of the promotional program. It designsits promotional program using all the available promotional tools.

Advertisements

Advertisement plays very important role in promoting the image and name

of the company. Because you can give your massage and persuade the

person (person may be Customer, client etc) to buy your product, therefore

effective advertisement plays important role in the success of product.They

give full-page coverage in newspaper and also made advertisement in the

television. Also providing advertisements on online facility through creating

Web Page of their Nestl, giving all required information about the products.

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They also advertise in weekly newspapers and magazinesThe budgets for

various consumer products vary depending on the sale and demand of the

product. Like on milk Nestl has 75% of sales out of the total sales. So

similarly it spends more on promotional activities of milk.

Promotional themes

Nowadays a lot of companies are using certain promotional themes to

promote their product better than their competitors. For example, in case of

milk is uses the theme of Khalis creating a view that its milk is closest to

pureness. Similarly is uses the promotional theme for Nestl Pure life for

mineral waterIt also uses other below line activities to promote its product

like by using the following techniques:

Prizes

Door to selling

Free sampling

Positioning

Nestle will position their product as a high quality product consumer

focused. Messages like They knows your taste better than us, Nestle

chocolates now at your door step; Add additional flavors to your life

will help us portray our picture clearly and distinctly. Nestle will position

their product against the competitors and gain competitive advantage

through our efficient promotional methods, using innovations, and by

reaching closer to our target market through the arrangement of events like

BASANT, VALENTINE DAY and etc. In short consumers will view us as a

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product providing highly quality, in terms of taste, customer focused and, at

the same time reasonably priced as compared to others.

Market segmentation

It is really a big market and it is always difficult to segment the big market.

There are many uses for segmentation. Nestls strategies about their

marketing are in the form of marketing segmentation. They have

implemented their strategies by doing segmentation. Secondly they have

made their distribution plans, network and methods very strong. Marketing

channels and strategies about pricing and positioning are also in main focus.

Needs Based Segmentation

Milk Pack has made different sizes of tetra packs which can match the needs

of buyers, ranging from 0.25 liters to 1.5 liter. Buyers can buy according to

there need between these quantities.

Product Segmentation

Manufacturers diversify products within each needs base to appeal to buyerswith different tastes and wealth.

Customer Segmentation

Customers are segmented based on their needs and product preferences.

Segments grow or shrink over time as a product improve, become outdated

or tastes changes.

Global Segmentation

Insurance firms and medical and legal practices also use product

segmentation, and sometimes attempt to cover all the product space.

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In-store Display Segmentation

Nestle have also segmented Milk Pack on the bases of In- Store display

segmentation. In this type of segmentation the company have given different

shelves in bib stores and also given the chillers to some of the agent having

the Milk Pack sticker upon them but in Pakistan unfortunately the shop

keepers are not using the shelves properly and they have put other brand

products on those shelves. Drug stores, grocery stores, book stores, and other

retail outlets use segmentation in order to keep like products close to each

other within the store, making shopping convenient and cross selling more

profitable.

Nestle New Launch

Nestle Kit Kat Chunky

Kit Kat Chunky, a favorite around the world, is now in India. It comes in

two delicious variants - Kit Kat Chunky Choko and Kit Kat Chunky

Hazelnut made from cocoa beans from Africa and real hazelnut paste from

Turkey.

Its easy to open tear away packaging has been launched for the first time

in the Indian market. Each bar has three portions for you to enjoy one

delicious chunk at a time.

Have a Break, Have a Kit Kat Chunky

Nestle's Munch Pop Choc

New Nestl Munch Pop Choc consists of little wafer cubes covered in

delicious chocolate. The perfect combination of crunchy wafer and a

delicious chocolate coating in bite sized cubes makes it a delightful treat and

is targeted at the chocolate nibbling space. Munch Pop Choc offers great

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value-for-money. Priced at an affordable Rs 10, it is available in major

towns cities including Delhi, Mumbai, Kolkata, Bangalore, Chennai and

Hyderabad.

Nestle Milkybar Choo

Milkybar Choo- the tasty chewy MILKYBAR - now has power of

Calcium! Outdoor champions, grab one now. Also available in yummy

Strawberry and Choko flavours!!

mm, mm, mmmmmmmmm...................

Nestle's Brand Management Strategies

"Nestle is a brand in its own right. For consumers, relevance of Nestle as a

company comes first of all through contact with products that are branded

Nestle. If we want to be perceived as the world's leading food company, we

have to offer consumers an increasing amount of products that they can

identify as Nestle's."

In mid-1988, Nestle SA (Nestle), the world's largest consumer packagedfoods company based in Switzerland, acquired Rowntree Mackintosh PLC

(Rowntree), in the largest ever acquisition deal of a British company during

that time.

Rowntree was the world's fourth largest manufacturer of chocolates and

confectionery products, with well-known brands like Kit Kat, After Eight,

Smarties and Rolo.

The deal attracted considerable attention all over the world since several bids

to acquire Rowntree were rejected. Rowntree claimed that the bids were too

low for its valuable, well-recognized brands.

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In the end, Rowntree was acquired by Nestle for 2.5 billion, two and a half

times the pre-bid price and eight times the net asset value of the company.

This acquisition made Nestle the largest chocolate manufacturer in the

world.

Analysts felt that Nestle had paid 2.5 billion because of Rowntree's brands,

not its past financial performance. Industry observers wondered how Nestle

would manage Rowntree's brands.

Rowntree followed a "one product, one brand" policy. The brands were

simply Kit Kat, After Eight, Smarties and Rolo, Rowntree was never

mentioned.Moreover, Rowntree's brands were not strongly managed European brands.

In fact, according to an analyst, Kit Kat was one of the worst cases of an

over-localized brand of a company across Europe.

Background Note

In the mid-1860s, Henri Nestle (Henri), a merchant, chemist, and innovator

experimented with various combinations of cow's milk, wheat flour andsugar. The resulting product was meant to be a source of infant nutrition for

mothers who were unable to breast-feed their children.

In 1867, his formula saved the life of a prematurely born infant. Later that

year, production of the formula, named Farine Lactee Nestle, began in

Vevey, and the Nestle Company was formed. Henri wanted to develop his

own brands and decided to avoid the easier route of becoming a privatelabel. He also wanted to make his company a global company.

Within a few months of establishing his company, Henri began to sell his

products in many European countries. In the initial years, Henri restructured

the organization to facilitate research, improve product quality, and develop

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new products. In 1875, Daniel Peter, Henri's friend and neighbor, developed

milk chocolate.

He soon became the world's leading chocolate maker. Later, his company

was acquired by Nestle. In 1905, Nestle merged with Anglo-Swiss

Condensed Milk Company, a manufacturer of milk-based infant food.

During World War I, there was a huge demand for dairy products and Nestle

capitalized on this opportunity by executing military contracts of various

countries involved in the war.

In 1938, after eight years of research, Nestle discovered a soluble powderthat revolutionized coffee drinking around the world. The product was

launched under the brand name Nescafe and became an instant success.

The end of the World War II marked the beginning of a new phase of growth

for Nestle. The company added many new products. In its effort to expand

its operations further, Nestle merged or acquired several companies. In 1947,

Nestle expanded into culinary products by merging with Alimentana, aSwiss company that produced and sold Maggi soups, spices and other food

products in many countries...

Nestle's Branding Strategy

The Nestle brand itself had played a key role in the company's globalization

efforts. In 1996, about 40% of the total revenues were generated from

products covered by the Nestle corporate brand. Nestle's logo was animportant part of the company's corporate identity. The 'nest' was a graphic

translation of Henri Nestle's name, which meant "little nest."...

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Internationalizing the "Kit Kat" Brand

When Nestle acquired Rowntree's brands in 1988, the major challenge

before the company was managing them. Rowntree had a "one product, one

brand" policy. The brands Kit Kat, After Eights, Smarties and Rolo were

marketed with no mention of Rowntree. Rowntree's brands were not

strongly managed European brands. Before the 1980s, 'country managers'

outside the UK in several European countries managed Rowntree's business.

They were free to run their units provided business objectives were met. The

orientation at Rowntree was short-term just to meet annual business

objectives and country managers added nothing to the overall organization.

Even though Kit Kat was a leading brand in UK, it was ignored outside the

country. In the early 1980s, Rowntree established Rowntree Continental

Europe, which handled business responsibilities outside the UK in Europe.

However, this did not benefit Kit Kat, which was launched in Europe by

Rowntree Continental Europe as a multi-local brand...

Divesting Non-Strategic Brands

The success of the Kit Kat brand inspired Nestle to think and act 'glocally'

i.e. establishing global as well as local brand identity. Nestle had taken a

similar approach to several other acquired sub-brands.

Moreover, Nestle introduced the Kit Kat brand in several other countries

across the globe. Nestle's brand management strategy included the

divestment of non-strategic brands. In February 1999, Nestle negotiated thesale of its Findus brand of frozen food to EQT Scandinavia BV..

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Growing Market.. Falling Margin

Incorporated in 1959 as Food Specialities Ltd., Nestle India Ltd. (NIL) is

promoted by Nestle Alimentana-Switzerland, which presently owns 51%

equity stake in it. Nil is one of the top players in the processed food and

beverages industry and the largest producer of instant coffee with a 49%

market share. Its market dominance apart from instant coffee is spread over

processed milk products (condensed milk, milk powders and dessert mix),

infant foods and processed and culinary products (instant noodles, sauces,

soups etc.).Established in 1860, its Swiss parent Nestle, S.A. with ownership

and a clutch of topsellng global brands (Kit-Kat, Polo, Nescafe, Nido,Maggi, Perrier etc.) is one of the largest and most profitable players in the

processed food and beverage industry. with sales at US$ 47.7 billion, it

ranks 39th in the Fortune 500 list towering over its competitors like,

Kelloggs, Conagra, Groupe-Danone, Kraft-General Foods and others.

Increasing market dominance: NIL's portfolio comprising over 65 products,

marketed through a representative-network in 3000 towns and 570000outlets, is manufactured at five state-of-the-art manufacturing plants in

India.While its Moga unit produces milk products, infant milkfood, weaning

cereals, culinary products and beverages, the Choladi unit was set up to

produce tea in 1967. The third plant at nanjangud was set up in 1989 to

manufacture instant coffee and health beverages. Its other two plants are

located at Samalkha in Haryana and Ponda in Goa. It is currently setting up

another plant at Bicholim, Goa to manufacture culinary products. The gamut

of operations of NIL could be broadly classified into four categories.

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Direct Competition

At present there are two major players Nestle and Cadbury in the Indian

Chocolate market. Campco initially tried to break into market but failed.

Brief profile of the same has been entailed below:

Cadburys India Ltd.

Cadburys India Ltd, has been in India since 1948. Its brands: Dairy Milk, 5

Star, Gems and Chocolate Eclairs are the households names in India today.

In all the segments i.e. moulded chocolates, count chocolates and panned

chocolates, it is undoubtedly the market leader. Cadburys has its

manufacturing units at Thane (Mumbai), Malanpur, Indori (near Pune),

Mithuri and Kolapur. It has a strong distribution network with about 500

distributors in North India and more than 3 lac retail outlets being serviced

all over India.In 1997, Cadbury planned to pump in Rs.80-crore to up

production capacity at a couple of Cadburys factories. This cash is exactly

double of whats been invested in 1996.The Company launched Perk, a

wafer enrobed chocolate in 1995. This was reactionary to the launch of KitKat and has been able to counter competition.

Cadburys Dairy Milk (CDM) - The Flagship brand

CDM, the oldest of Cadburys brands was launched in 1956. In the early

90s, a rise in the prices of cocoa, increase in the excise duty and a fall in the

demand inspired the idea of repositioning.

Two years in the process after relaunch Cadburys Dairy Milks market

share stood at 25 percent with sales rising by an average 40 percent per

annum. Besides CDM Cadburys has a number of endorser brands such as

FruitnNut, Nut Milk etc. Even though contribution of these brands to the

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companys bottom-line is very small, they are required in order to make a

complete portfolio of offering.The Company developed a concentration

strategy on CDM, Five Star, Cadbury Gems, Cadburys Eclairs, Perk and

the latest of its offering Picnic (which has drawn a good response in themarket).The Company has also identified sugar confectionery, as a growth

sector. Its first offering Googly.

Nestle India Ltd.

Nestle India Ltd. has been in India for more than 35 years now. The worlds

largest marketer of chocolates (became world number one when it acquired

Rowntree Macintosh of the UK) - Nestle, made its foray in the Indian

chocolate Industry in November 1990. It launched three products - the milk

chocolate, the bitter chocolate and Crackle (a crunchy chocolate) - in the

slabs category and Bar One in count lines. Cadburys was quick to react, and

launched a whole host of products in succession: All Silk milk chocolate,

Creamy Bar, and a new version of 5 Star.Nestle, in the beginning did not

have its own manufacturing facility. It had an alliance with Campco tomanufacture chocolates. Later, in 1995 a state-of-art manufacturing plant

was set up at Ponda, Goa at a cost of Rs. 50 crores. This unit took care of the

entire Kit Kat production. However, the production tie-up with Campco still

continued.

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Data Collection

a) Sampling Design

It is true that it is very difficult to do research with whole universe. As we

know that it is not feasible to go with population survey because of the

numerous Doctors and their scattered location. So for this purpose sample

size has to be determined well in advanced and selection of the sample also

has to be scientific so that it represents the whole universe.

So far as this research is concerned, the sample size is 100.

b) Instrument

Taking into consideration research instrument selected by us is questionnaire

because it gives more flexibility in terms of data and it has been asked to the

responder personally and has an idea of getting an important unknown data

that can be collected through their behavior.

c) Mode Of Data Collection

Data collection mode is personal visit and filling up of the questionnaire.

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Data Analysis

Que1. Do you eat chocolate?

Analysis & interpretation:

Chocolate is a product which is like by the all age group of people.

According to the survey 74% of people says yes they eat chocolate and 26%

say no they are not eatingchocolate. May be the reason behind that is they

are not eating chocolate on daily or weakly basis or may be they are eating

any other brand of chocolate.

55

No

26%

Yes

74%


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Que2. Which brand of chocolate do you prefer?

PREFERENCE OF DATA

Cadbury

64%

Nestle

36%Cadbury

Nestle

Analysis & Interpretation:

There are many brands available in the market. But the market leaders in

India are basically two brands like Cadbury & Nestle. According to survey

64% of the market is captured by the Cadbury and only 36% of the market is

covered by the Nestle. To capture the market the company should do more

advertising and sales distribution. And also should maintain quality of the

product compare to the competitors.

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Que3. Which sub-brand you have purchased?

NESTLE

3%3%

5%

33%

56%

KITKAT

MUNCH

MILKY BAR

BAR ONE

MILK CHOCOLATE

CADBURY

14%

5%2%

62%17%

DAIRY MILK

5 STAR

PERK

CELEBRATIONS

TEMPTATIONS


In this survey nestle is having five sub-brands like kitkat, Munch, Milkybar,

Barone,milk chocolates and their consumption are like kitkat 33% ,munch

56 ,milky bar 3% ,bare one 5% ,and milk chocolate 3%. And if we talk aboutCadbury the sub-brand of the Cadbury is dairymilk, 5 star, perk, celebration

and Temptation and their consumption are like dairy milk 62%, 5 star 17%,

perk 14%, celebration 2% and Temptation 5%. According to the survey the

highest selling product is Cadbury.

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Que4. Rank the sub-brands of chocolates according to your preference?

(1 for most preferred)

NESTLE

RANKING SUB BRAND

3%

3%

50%

11%

33%

KIT KAT

MUNCH

MILKY BAR

BAR ONE

MILKY CHOCOLATE

CADBURY

RANKING SUB BRAND

33%

3%

11%

6%

47%

DAIRY MILK

5 STAR

PERK

CELEBRATIONS

TEMPTATIONS

Analysis & Interpretation

In this survey I found that the most selling product is Munch the sub-brand

of Nestle the Munch has capture the 50% of the market as compared to the

Cadbury product the highest selling product of Cadbury is Dairy milk which

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captured the market stake of 47% which is as compared to Much 20%less

which is a good sigh for Nestle and the less consumption of the Nestle

product is Milk bar & Milk Chocolate the market share is only 3% and in

Cadbury less selling product are Celebration and Temptation the reasonbehind this is they are too Costly to consume. And it can only use

occasionally.

Que5. How much importance do you give to the following factors when

you purchase a chocolate? (Tick in the desired column)

IMPORTANCE

0

20

40

60

80

100

120

Very

Important

Important Normal Least

Important

Taste/ Flavour

Price

Packaging

Quantity


Whenever we are consuming any food product our main focus in on the

quality and price in India there is more concentrating on the quality of

59

Taste/ Flavour Price Packaging Quantity

Very Important 88 1 12 81

Important 9 3 6 12

Normal 2 96 4 6

Least Important 1 0 78 1


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product rather than other parameters of the product in this survey I found

that the basic concentration of the consumer is on taste 88% says that they

purchase if they like the taste of the product. 96% says if normal price would

be there a taste is good than price dose not matter.78% of the consumer saysthat if they are getting best quality product at nominal price than the

Packaging is least important.78% says that they are mainly seeing the

quality of the product if the product is qualitative than they are ready to pay

any price for that product.

Que6. Which form of a chocolate do you like?

FORM OF CHOCOLATES

6%

18%

29%

47%

HARD

CRUNCHY

NUTTIES

CHEW

Analysis & interpretation:

Every person have there own taste and preferences towards the eatable

product in chocolates there are four varieties available in the ma

Documents

Industry Overvie1