cadbury strategic management

8/11/2019 Cadbury Strategic Management

1/26

CHAPTER: 1

HISTORY OF THE CADBURY

Cadbury is a British multinationalconfectionerycompany owned by Mondele

International. It is the second largest confectionery brand in the world

after Wrigley's. Cadbury is headquartered in Uxbridgein Greater Londonand

operates in more than fifty countries worldwide.

Cadbury is best known for its confectionery products including the Dairy

Milkchocolate, the Egg cream, and the Rosesselection box.

Cadbury was established in Birminghamin 1824, by John Cadburywho sold tea,

coffee and drinking chocolate. Cadbury developed the business with his brother

Benjamin, followed by his sons Richard and George. George developed

the Bourneville estate, a model village designed to give the company's workers

improved living conditions. Dairy Milk chocolate, introduced in 1905, used a

higher proportion of milk within the recipe compared with rival products. By

1914, the chocolate was the company's best-selling product.

Cadbury merged with J. S. Fry and Sonsin 1919, and Schweppsin 1969. Cadbury

was a constant constituent of the FTSE 100from the index's 1984 inception until

the company was bought by Kraft Foods in 2010.


2/26

CHAPTER: 1.1

START IN INDIA

Cadbury India began its operations in India in 1948 by importing chocolates. It

now has manufacturing facilities in Thane, Induri (Pune)

andMalanpur(Gwalior), Hyderabad, Bangaloreand Baddi (Himachal Pradesh)

and sales offices inNew Delhi, Mumbai, Kolkataand Chennai. The corporate

head office is in Mumbai. The head office is presently situated at Pedder Roadthe

development of cocoa cultivation in , Mumbai, under the name of "Cadbury

House". This monumental structure at Pedder Road has been a landmark for the

citizens of Mumbai since its creation. Since 1965 Cadbury has also pioneered

India. For over two decades, Cadbury has worked with the Kerala Agricultural

Universityto undertake cocoa research.

Cadbury was incorporated in India on 19 July 1948. Currently, Cadbury India

operates in five categories Chocolate confectionery, Beverages, Biscuits, Gum

and Candy. Some of the key brands are Cadbury Dairy Milk, Bournvita, 5 Star,

Perk, Bournville, Celebrations, Gems, Halls, clairs, Bubbaloo, Tang and Oreo.

Its products include Cadbury Dairy Milk, Dairy Milk Silk, Bourneville, 5-Star,

Temptations, Perk, Gems (a version of M&M's), clairs, Bourn

vita, Celebrations, Bilkul Cadbury Dairy Milk Shots,

Toblerone, Halls, Tangand Oreo.

It is the market leader in the chocolate confectionery business with a market share

of over 70%.

Cadbury India, on 21 April 2014, changed its name to Mondelez India Foods

Limitedbury in Id
http://en.wikipedia.org/wiki/Malanpurhttp://en.wikipedia.org/wiki/Malanpurhttp://en.wikipedia.org/wiki/Malanpurhttp://en.wikipedia.org/wiki/Malanpur


3/26

CHAPTER: 1.2

About the Cadbury

Cadbury India is a food product company with interests in Chocolate

confectionery, Milk Food Drinks, Snacks, And Candy. Cadbury is the market

leader in Chocolate Confectionery business with a market share of over 70%.

Some of the key brands of Cadbury are Cadbury Diary Milk, 5 Star, Perk, Eclairs,

Celebrations, Temptations, and Gems. In Milk Food drinks segment, Cadburys

main productBournvita is the leading Malted Food Drink in the country.

Operates in over 60 countries

35,000 direct and indirect suppliers

187 years old

45,000 people are employed.


4/26


5/26

CHAPTER: 1.3

VISION

GROWTH: Its growth priority is represented by the mantra fewer,

faster, bigger, better.

EFFICIENCY: They maintain a relentless focus on cost and efficiency by

reducing central functions and costs, consolidating their business and

reconfiguring their manufacturing and distribution.

CAPABILITY: Their capability priority ensures they continue to invest

in the right organization and skills to win.

MISSION

To provide customers with a tempting and exquisite taste as

enticing treats means a mouth watering treat which is simply

irresistible.

Cadbury means quality this is the promise of Cadbury. Its

reputation is to built upon quality. Its commitment to continuous

improvement will ensure that promise.


6/26

CHAPTER: 1.4

VALUES

Cadburys core purpose is to create brand, people love.

PERFORMANCE: It is passionate about winning in a tough but

fair way. It is ambitious, hardworking and make the most of their

abilities to take risks and act with speed.

QUALITY: Quality and safety is at the heart of all of its activity

products, people, partnerships and performance.

RESPONSIBILITY: It is accountable for its social, economic and

environmental impact. It aims to make business, partners and its

communities better for the future.

RESEARCH AND DEVELOPMENT

Cadbury not only deals with innovation new products and

improved recipes, but also innovative packaging formats and

world-class brand communication.

R & D of Cadbury plays a role in knowing:

Customer insights.

Trends.

Foresights.


7/26

CHAPTER: 1.5

CADBURY DAIRY MILK

Dairy Milk is a brand of chocolate bar made by Cadbury.

Popular in both the United Kingdom and around the world.

Introduced in 1905, but it came to India in 1948.

It today has 5 company-owned manufacturing facilities & 5 sales offices in 5metros. The corporate office is in Mumbai

Dairy milk alone holds 30% value share of the Indian chocolate market

Main marketing strategy used: Advertisements

OBJECTIVES

To become the Worlds Biggest and Best Confectionery Company

To make lots of chocolate & improve the quality of their chocolate

Have loads of stores worldwide.

To be an ongoing company & achieve revenue growth of 20% per year.

Increase earnings by 15% annually & dividends per share by 7% per year.


8/26

ACHIEVEMENTS

2008- SILVER award for the 'Most Effective Use of Advertising.

2008- Cadbury India has been ranked as the 7th Great Place to Work and the No.

1 FMCG company in India.

Cadbury Dairy Milk & Bournvita have been declared a `Consumer Super brand'

for 2006-07.

Cadbury India has been ranked 5th in the FMCG sector, by Business World

magazine in 2007.


9/26

CHAPTER: 2

THE 4 Ps OF CADBURY


10/26

PLACE:

Produced at the chocolate factory in Bourneville in Birmingham.

It is then transported to the stockrooms.

After this Cadbury sells its products to shops

that deal with beverages and confectionery e.g. corner shops, superstores.

They then sell it to the general public.


11/26

Five company-owned manufacturing facilities:

o Thane

o Induri (Pune)

o Malanpur (Gwalior)

o Bangalore

o Baddi (Himachal Pradesh)

4 sales offices:

o New Delhi

o Mumbai

o Kolkota

o Chennai

Corporate/Head office:

o Mumbai


12/26

PRODUCT

Cadbury Dairy Milk is made from Real Chocolate

Its ingredients include cocoa butter

There is a glass and half full cream dairy milk in every 200 grams of Cadburydairy milk chocolate

Cadbury buys 65 million liters of fresh milk each year to make Cadbury dairy

milk chocolate


13/26

PRODUCT

Bars

Cakes & Biscuits

Drinks

Ice Creams & Desserts


14/26

PRICE

Price is the important element of the marketing mix. The price charged for a

chocolate bar can determine whether a consumer will buy it and the level of sales

achieved can determine whether or not Cadbury Schweppes will make a profit.

Adopted competitive pricing strategy for the basic product

Whereas premium pricing on other variants

Cut down on weight but did not increase cost

e.g. 5 Rs pack was of 13gm but now it is 10.5gm


15/26

PROMOTION

THE BIG B FACTOR

The big factor that has pushed up CDM sales is the Amitabh Bachchan campaign.

It helped restore consumers' faith in the quality of the product

A FEW ADVERTISEMENTS

The Real Taste of Life with the girl dancing on the cricket fields.

The message: Dairy Milk is for enjoyment

DURING LATE 90s

Campaign: Khanewalon ko khane ka bahana chahiye.

Target: widening chocolate consumption among the masses


16/26

MORE RECENTLY

Campaign: kuch metha ho jaye.

Target: to associate Cadbury with celebratory occasion.

THEN..

Campaign: pappu pass ho gaya.

Target: encourage those who have pass the exams to celebrate with Dairy Milk.


17/26

CHAPTER: 3

5 CS

COMPANY: Cadbury dairy milk is a brand of chocolate made by Cadbury Plc.

Unit of Kraft Foods and sold in several countries around the world. It first time

went on sale in 1905 in the United Kingdom. The current parent is Mondelez

International.

CUSTOMERS: The prospective customer of dairy milk range from 5 to 60

years age. Since dairy milk has a range of product suited for every member of the

family. The aim is to strengthen the brand in the current consumers life. The

ranges of customers vary for dairy milk. Whereas some buy it as an alternative for

sweet others buy it as a gift item. The consumers mostly buy the product on

impulse and are influenced by taste/flavor and then by company/brand.


18/26

COMPETITORS: The main competitors of Dairy Milk in India are Nestle,

Ferrero Rocher, Amul chocolates and unbranded chocolates. The high end

chocolates also face competition from the imported Swiss chocolates. But one of

the biggest advantages the diary milk has over its competitors is the brand loyalty

that it has got. The excellent advertising, reach and accessibility have made it the

top of mind brand in the chocolate category.

CLIMATE: The climate for the chocolate industry and dairy milk in particular

seems very attractive in a country like India. With the size of the market being so

big along with encouraging category growth the prospects look very good. Sincethe product is not seasonal and the margin is also good makes the climate for the

industry even better. With new innovations coming up in terms of product and

packaging the market is still on a growth curve.

COLLABORATORS: Cadbury dairy milk manages huge range of retailers and

whole sellers who make up the collaborators. Over the years the company has

partnered with various other companies like Adam Philippines in 2001 so that

dairy milk has a much wider distribution network in the Philippines.


19/26


20/26


21/26

Opportunities

Increase share through targeted acquisition

Increases acceptance of Globalization in sector.

Innovative un captured market

The chocolate market has seen one of the greatest increases in the recent times.

There is a lot of potential for growth and a huge population who do not eat

chocolates even today that can be converted as new users.

Threats

Cut throat comp : Nestle Amul

Entry of international brands

Obsession with calories

Negative publicity and controversies

There exist no brand loyalty in the chocolate market and consumers frequently

shift their brands.

New brands are coming and existing brands are introducing new variants to add

up to an already overcrowded market.

PEST ANALYSIS

POLITICAL

Political decisions can affect Cadburys these can be either advantages or

disadvantages, if taxes increase, therefore consumers decrease and sales of


22/26

stock decrease. However if taxes decrease the likelihood is consumers will

buy more.

The Government is very concerned about obesity. Heart problems are costing the

NHS more each year.

ECONOMICAL

If the minimum wage was brought down, this would mean more money

for Cadburys but would also result in low sales from the consumers.

The interest rates can have an affect on Cadburys. If the interest rates were high

then Cadbury would notwant to borrow as much money for expansion.

SOCIAL

Trend in snackingincrease in people eating on thego

Local residents with small businesses near Cadburys World would benefit

from the money that is being brought in by visitors.

More people are health consciouswill read ingredient content.

TECHNOLOGICAL

Better equipment

Cost of machinery

New machinery

Maintenance


23/26

MARKET SEGMENTATION


24/26

Demographic segment:

Region

Countries

Climate

Behavioral segment


25/26

Age

Gender

Family Life cycle

Income

Occasions: For purchasing the Cadbury dairy milk no special occasions are

required. People can easily purchase it on regular basis. Occasionally such as

Diwali, Raksha Bandhan, the sales of Dairy Milk increases.

Psychographic segment: The psychology of what consumers think, feel, reason

and select between different alternatives. The psychology of how the consumer is

influenced by his or her environment like culture, family, signs, media.

Attitude Toward The Product

Life Style

Geographic segment: About 72.2% of the population lives in some 6,38,000

villages and the rest 27.8% in about 5,480 towns and urban agglomerations. So

India is the biggest market for Chocolate in terms of population.

Occasions

Benefits

Usage rate


26/26

MARKETING STRATEGY

Brand Building

Innovative & Attractive

Packaging

Introducing New Products

Market Positioning.

CONCLUSION

There is an immense scope for chocolate industry in India

Indian chocolate industry is unique mix with extreme consumption patterns,

attitudes, beliefs, income level and spending

Understanding consumer preferences and demands is the key to growth

Pricing, quality , flavors and pack size are some of the important factors

Economical distribution using proper supply chain management is necessity

Brand loyalty should be maintained.

cadbury strategic management

Documents