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“Life is like a box of chocolates. You never know what you're going to get” Forrest Gump

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Chocolate and Cocoa: A Rich History

Chocolate dates back to ancient America when the Mayans, and later the Aztecs, ground the beans of the Theobroma cacao tree into a bitter beverage, which they prized for its mystical and medicinal attributes. Chocolate’s name comes from the Aztec word, xocalatl, which means bitter water. Cortés, the conqueror of the Aztecs, brought the beans to Europe in the 1500s, where they were used to treat anemia, fever, gout, hemorrhoids, poor digestion, depression, and heart ailments. Today, chocolate is usually a highly processed blend of chocolate liquor, cocoa butter (all fat), cocoa powder, sugar, emulsifiers, and milk—far different from its origins. White chocolate contains no real chocolate at all—it’s just cocoa fat, sugar, and flavorings.

Chocolate market in India

The size of the chocolate market in India is about 4,000 tonnes and is valued at Rupees 6500 million (US$ 130 million). Cadbury India has the biggest market share at 70 per cent while Nestle is the second largest at 20 per cent. Cadbury’s reaches 0.6 million retail outlets.

Confectionary Unit 2002-03

Growth 2003-04

Growth

Sugar Confectionary / gums (Volume)

Tonns 163110 10 176170 8

Sugar Confectionary / gums (Value)

Rs Billion

16.8 10 18.5 6

Chocolates (Volume) Tonns 27000 9 30000 10Chocolates (Value) Rs

Billion8.5 12 9.4 10

Chocolates is impulse category

The impulse category is finally driven by visibility and purchasing power of consumers. Traditionally, this is how products are positioned within the impulse category. First come soft drinks, which is a major market. They are followed by biscuits, sugar confectionery, ice creams and salted snacks. In the past, chocolate companies used to consider only the different brands in the chocolate market as their competitors. That was a mistake.

In real life, chocolate products are fighting for a share of the consumers' pockets. They are facing competition not only from chocolates but also other impulse products such as soft drinks, biscuits, salted snacks and ice-cream. To maintain the share of the chocolate market in the impulse market, the chocolate industry has to make sure that it grows in

line with the impulse market or grows faster than that. Since the share of chocolates in the impulse category is just six per cent, the opportunities are plenty here.

Despite the fact that Indians have strong affinity for sweets, the size of domestic confectionery market is small on account of traditional consumer tastes and habits. The Chocolate market in India is a niche market penetrated largely in urban areas

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and per capita consumption is low as compared to those in developed countries of the West.

SWOT ANALYSIS of chocolate industry

Strengths

Customers of chocolates are not price sensitive

The consumer is not price sensitive. But the category is price sensitive. Downgrading does happen in other FMCG products. Chocolate demand is however more a function of affordability. Demand growth depends on shifts in income pyramid. When the economy grows at a lower pace, the upward shift in income pyramid is slower. This affects the rate at which new consumers are added. But existing consumers, who can afford the product do not downgrade. When we introduce lower priced products in smaller sizes, we add to the consumer base. Our existing consumers do not start buying the smaller chocolates.

Weakness

Building a direct network of retailers i.e weakness of storage and logisticsChocolate needs to be distributed directly, unlike other FMCG products like soaps and detergents, which can be sold through a wholesale network. 90% of our products are sold directly to retailers. Building such a direct network in for distribution is a daunting task.

Chocolates are not viewed as a snack foodBehaviorally, chocolates are still consumed as a chocolate and not as a filler. Perk still competes with a Dairy Milk and not with biscuits/ other snack foods. India is still far away from using chocolates as a snack food. The chocolate consumers need to have an offer that adds value before accepting chocolates as a snack. Because at the end of the day, how many Indians can afford a snackfood priced at Rs16-17 for 50gms?

Low levels of consumptionCompared to Western countries, chocolate consumption in India is considered to be on the low side. Whilst per capita chocolate consumption is a buoyant 8 kilograms in the UK, it stands at a rather modest 165 grams in urban India.

Opportunity

Huge untapped urban population (middle class population)Chocolate consumption in urban India itself is low. There is a large untapped demand in urban market alone. Only 60mn people out of the urban middle class population of about 280mn consume chocolates.

Threats

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Threat from free availability of imported brands

The premium brands, which come through official channels, do not pose a threat to the chocolate market, as these cater to a small niche market. However there is a lot of dumping from neighboring countries like Dubai, Nepal, etc of inferior brand of imported chocolates. These are not only of low quality, but are brought very near to their expiry dates. Most of the cheap chocolate brands that are available do not meet Indian Food Regulations. A legislation is required for these brands to conform to Indian disclosure norms on price, manufacture date, ingredients, etc which has already been issued.

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MARKET SHARE OF VARIOUS PLAYERS IN CHOCOLATE INDUSTRY

Cadbury

Nestle

Amul

Others69%

22%

7%

2%

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CADBURY INDIA

Background

Cadbury Schweppes is the No.1 confectionery and third largest soft drinks company in the world. The origin of the group goes back to over two centuries. Some of the popular international brands of the company are Cadbury Dairy Milk, Dr Pepper, Flake, Trebor Basset, Snapple and Motts. The company also has Halls, Clorets, Trident, Dentyne and Bubbas bubble gum range in its portfolio with acquisition of Adams in December 2002.

Since 1969, Cadbury Schweppes’ has focused on confectionery and non-alcoholic beverages. In 2004, 60 per cent of the Group’s net sales came from confectionery and 40 per cent from beverages. The company employees around 55,000 people in over 200 countries around the world.

Cadbury in India

Cadbury India is a wholly owned subsidiary of Cadbury Schweppes which has operated in the country for more than 55 years. It was originally incorporated as a wholly owned subsidiary of Cadbury Schweppes Overseas Ltd in 1948. The company today employs nearly 2,000 people across India. Cadbury India is the No. 1 confectionery company with a 70 per cent market share in India. It is a dominating player in the Indian chocolate market with strong brands like Dairy Milk, Five Star, Perk, Gems, etc. Dairy milk is the largest chocolate brand in India.

Cadbury is mainly into three segments

Chocolates - Cadbury India is the market leader in the chocolate confectionery market in India with over 70 per cent market share. The leading brands in this category are Cadbury’s Dairy Milk, Fruit & Nut, Crackle, Temptations, 5 Star, Perk & Celebrations Gift boxes. For more than five decades now, Cadbury has enjoyed leadership position in the Indian chocolate market to the extent that 'Cadbury’ has become a generic name for chocolate products. Cadbury has leading brands in all the segments viz bars (Dairy Milk, Crackle, Temptations), count lines (5 star, Milk Treat), panned confectionery (Gems) and wafer chocolates (Perk), eclairs (Cadburys' Eclairs), tofees (English Toffee).

Sugar Confectionery – Cadbury Dairy Milk Eclairs is one of the leading brands in this category. It is amongst the largest éclair brands in the market in terms of value share. Cadbury also owns Halls (which was acquired as a part of the global acquisition of the Adams business from Pfizer in 2003). Halls is amongst the largest brands in its segment of Minty/ Breath freshness brands in India.

Food Drinks – Cadbury’s Bournvita is a leading brand in the brown drinks segment of milk/ malted food products. Cadbury’s other products include Drinking Chocolate and Cocoa powder. Overall share in the malted food drinks market is estimated to be around 19 per cent.

The company has recently made a foray into snacking category with Cadbury Bytes, its sweet snacking brand. The company has been performing well in India. The net

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sales of the company have increased from around US$ 131.6 million in 2000 to US$ 166.3 million in 2004.

Factors for Success

Extensive distribution network

Cadbury’s brands are available in over a million outlets across the country. The distribution network directly covers almost the entire urban population. The company has invested significantly in building such an extensive network. The company uses Information Technology to improve its logistics and distribution competitiveness.

Cadbury has improved the distribution quality of its products with the installation of refrigerators at several outlets. This helps in maintaining product quality in summer, when sales usually dip due to the fact that the heat affects product quality and thereby consumption.

Creation of strong brands

Cadbury owes its success to strong brand equity and resultant consumer preference that it enjoys in India. The company has built strong brand equity through consistently high product quality, relevant, insightful and entertaining communication. Cadbury has developed new channels for marketing its brands such as Gifting and Snacking. The company places great emphasis in ensuring display dominance at the point of purchase

Customisation of products for India

Cadbury India has spent time in understanding the Indian consumers. Leveraging its 55 years of experience in India, the company has customised its products to the Indian markets. It also offers products at affordable price points so as to increase its market penetration.

Leveraging the India Advantages

Though, India contributes to less than 5 per cent of the global revenues today, India is critical to the global strategy of the company

Managerial Talent

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Cadbury has begun recruiting management graduates in India to serve its global operations.

Huge market potential

India offers huge market potential and is a priority market for Cadbury. The company also leverages India as a manufacturing base for producing products for the overseas market. Cadbury India has 4 company owned factories and as many third party manufacturing contractors. It also has a wide Sales & Distribution infrastructure consisting of 33 depots managed by 4 regional sales branches across India.

Future Plans

Cadbury India expects strong growth in India in future. The company plans to increase the franchise of its existing brands and continue to explore new product opportunities including adjacent market opportunities. Cadbury India is also looking for more opportunities in the SAARC region.

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Nestle India limited

Nestle India Ltd, 51% subsidiary of Nestle SA , is among the leading branded food player in the country. It has a broad based presence in the foods sector with leading market shares in instant coffee, infant foods, milk products and noodles. It has also strengthened its presence in chocolates, confectioneries and other semi processed food products during the last few years. The company has launched Dairy Products like UHT Milk, Butter and Curd and also ventured into the mineral water segment in 2001. Nestle’s leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and Pure Life.

Nestle has a presence in the following categories - Baby Food, Milk products, Beverages (Coffee, malted beverage), Chocolates & confectionery and other processed food products. Category wise turnover breakup and growth

% contributionto turnover

2001Rs mn

2000Rs mn % yoy

Milk Products 43 8159 7375 10.6%

Beverages 29 5627 4903 14.8%

Culinary Products 14 2764 2310 19.7%

Chocolate & Confectionery 14 2646 2179 21.5%

Total 19197 16768 14.5%

Chocolates & ConfectioneryNestle forayed into chocolates & confectionery in 1990 and has cornered a fourth share of the chocolate market in the country. The category contributes 14% to Nestle ‘s turnover. It has expanded its products range to all segments of the market The Kitkat brand is the largest selling chocolate brand in the world. Other brands include Milky Bar, Marbles, Crunch, Nestle Rich Dark, Bar-One, Munch etc. The sugar confectionery portfolio consists of Polo, Soothers, Frootos and Milkybar Eclairs. All sugar confectionery products are sold under the umbrella brand Allen's. Nestle has also markets some of its imported brands like Quality Street, Lions and After Eight. New launches such as Nestle Choco Stick and Milky Bar Choo at attractive price points to woo new consumers. Chocolate confectionery sales registered a strong 21.5% yoy growth in 2001 aided by good volume growth in Munch, Kitkat and Classic sales. Nestle relaunched Bar-One during the year

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Chocolates ad spends in TV saw 31% growth in 2005

(24 January, 2006)

Key Findings:

Chocolates advertising spends in TV grew 31 per cent in 2005 compared to 2004

Cadbury's India, the highest spender in chocolates in 2005 Cadbury Dairy Milk chocolate leads chocolates advertising in 2005 Focus on entertainment + kids channels Just 11 per cent of advertising spends used to boost up sales

This week, AdEx India looks at the 'Chocolates' category. Let's look at the advertising spends in chocolates category across the years 2000-05.

Growth of 31 per cent in chocolates advertising spends in 2005 compared to

2004. 2003, the only year to observe a dip in chocolates advertising on TV.

Let's find out who contributes the maximum advertising in the year 2005 on television?

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Top fiv espenders constitute 98 per cent of the advertising revenue Cadbury's India, the highest spender in 2005

Let's look at top 10 Chocolates brands advertised on television in 2005.

Top 10 chocolates brands constitute 81 per cent advertising spends Cadbury Dairy Milk chocolate at first position with 15 per cent share

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Nestle Munch at second position

Let's find out which type of channels do the chocolates advertisers prefer to spend on? The pie below shows its advertising share in the year 2005.

Entertainment channel, the choice of chocolates advertisers Kids channel, the second choice

Let's look at the share of sales promotional advertising in this category and the various type of promotions used.

Marketing research is the systematic design, collection, analysis an reporting of data and findings relevant to a specific marketing situation facing the company.

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Marketing research process

Define the problem and research objective

Develop the research plan

Collect the information

Analyze the information

Present the findings in Report

Make decisions

Step 1: Define the problem and the research objectivesThe 1st step in research is formulating a research problem. It is most important stage as poorly defined problems will not yield useful results. Also the marketing management must be careful not to define the problem too broadly or too narrowly. In order to identify the research problem, three categories of symptomatic situations, namely, overt difficulties, latent difficulties and unnoticed opportunities should be studied. Overt difficulties are hose which are quite apparent and which manifest themselves. Latent difficulties are those which are not so apparent and which, if not checked, would soon become evident. Unnoticed opportunities indicate the potential for growth in a certain area of marketing. Such opportunities are not clearly seen and dome effort is required to explore them.

Our research problem:Is there a scope for new brand of chocolates to enter into the chocolate market in India?

Research objectives: Are there any unnoticed opportunities existing in chocolate market in India i.e.

is there any demand/need of consumers whcich is not being fulfilled by existing brands.

To see whether the new brand will be able tosustain its position against the market leader & other competitors

Will the consumers accept the new brand

Step 2: Develop the research planDesigning a research plan calls for decisions on data sources, choice of research design, research approaches, research instruments, sampling plan and contact methods.

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Data Sources The researcher can gather both secondary and primary data. Secondary data are data that were collected earlier whereas primary data are data freshly gathered for a specific purpose or for a specific research project.

In our market research we have used both secondary as well as primary data but our main focus is on primary data.

Choice of Research Design Research design is the plan, structure and strategy of investigation conceived so as to obtain answers to research questions and to control variance. A research design specifies the methods and procedures for constructing a particular study. Broadly speaking the research design can be grouped into three categories- exploratory research, descriptive research and causal research. An exploratory research focuses on generation of new ideas and is generally based on secondary data and is a preliminary investigation. A descriptive study is undertaken when the researcher wants to know the characteristics of certain group

Research Plan

Data Sources

Research Design

Research Approache

s

Research Instrument

Sampling Plan

Contact Methods

Data Sources

Secondary Data Primary Data

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and is well structured. A causal research is undertaken when the researcher is interested in knowing the cause and effect relationship between two or more variables.

In this research we have undertaken descriptive studies in which a cross sectional study was conducted through means of a survey.

Research Approaches

Primary data can be collected in five ways: through observations, focus groups, surveys, behavioral data and experiments.

Research design

Exploratory design Descriptive design Causal design

Cross sectional

Surveys

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In this research we have used surveys as our research approaches since it is best suited for descriptive research and helps immensely in understanding the people’s knowledge, preferences and satisfaction.

Research Instruments Marketing researches have a choice of three main research instruments: questionnaires, psychological tools and mechanical devices.

We will discuss in detail the format of the structured non-disguised questionnaire later in this report.

Sampling Plan

Research Approaches

Observations Focus groups Surveys Behavioral data

Experiments

Research Instruments

Questionnaires Psychological tools Mechanical devices

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After deciding on the research approach and instruments, the marketing researcher must design a sampling plan. This calls for three decisions regarding sampling unit, sample size and sampling procedure.

Sampling Unit: Who is to be surveyed? In our research we have taken the whole target market as our sampling unit out of which samples would be selected and surveyed. The target market of chocolates is right from children to old people.

Sample Size: How many people are to be surveyed? Our sample size is 100 respondents (consumers) with approximately equal number of males and females. Also we surveyed 22 retailers

Sampling Procedure: How should the respondents be chosen? We have decided to base our sample respondents on basis of quota sample in which a total of 100 respondents are to be covered with the following inter related controls:

Age Group Male

Female

Total

5-10 & 11-15 12.5 12.5 2516-20 12.5 12.5 2521-35 12.5 12.5 2535- 50 6.25 6.25 12.550 & above 6.25 6.25 12.5Total 50 50 100

The above figures are in percentages and are an approximate estimation done before the survey was conducted so as to understand the average distribution of respondents across the various age groups.

Contact methods

Sampling Plan

Sampling unit

Target market of 5-60 people

Sample size100 consumers + 22 retailers

Sampling procedure i.e. sample design

Non- probability sampling

Quota Sample

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Once the sampling plan has been determined, the marketing researcher must decide how the subject should be contacted: mail, telephone, personal or online interview.

In our survey we have made use of three forms of contact methods: Personal interview, online survey and telephonic survey.

Step 3: Collect the informationOur research group collected the information over a period of 15 days and from various locations such as malls, residential complexes, colleges and schools and also retailers.

Step 4: Analyze the informationAfter the process of gathering information was completed we tabulated the data and developed frequency distributions and extracted the findings from the survey.

Step 5: Present the findingsFinally we prepared a project report on our survey and along with the findings we also presented our recommendations. Step 6: Make the decision

Contact methods

Mail Survey Telephone interviewPersonal interview

Online interview

Intercept interview

Mail SurveyTelephone interview

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MARKET SURVEY FOR CHOCLATESQUESTIONNAIRE FOR CONSUMERS

Name: ____________________________________________Gender: _____________

Age group: Family Size:

5-10 yrs 3 members 11-15 yrs 4 members 16-20 yrs more than 4 members 21- 30 yrs 31-40 yrs 40 yrs & above

Place of residence: ____________________________________________________

Social Class: _________________________________________________________

Occupation: __________________________________________________________

Location of work/college/school:__________________________________________

Monthly spending on clothes, eating out, hanging with friends etc _____________

In one word describe a foodstuff that says “Sharing your joy with people you love”_____________________________________________________________________

What do you normally prefer to eat as a sweet item ___________________________

Do you like chocolates?

Very much Okay okay Not much Not at all

How many times you buy chocolates?

Once every day 2- 3 times a week Once a week On special occasions only Others, plz specify

What does chocolates signify to you? ________________________________________

Where do you normally buy chocolates from?

Your local kirana shops Supermarkets like Big Bazaar

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Rate your preferences in choice of chocolates on a scale of 1-5 (5 being highest rank)

Taste Sweetness Price Calories Brand of the chocolate Packaging Ingredients/ flavours

Which brand of chocolates you prefer?

Nestle Cadbury’s Amul Foreign brands like Hershey’s Any other, plz specify _______________________________________________

Why do you prefer that particular brand?________________________________________________________________________________________________________________________________________________

Is there anything that you feel is lacking in your preferred brand of chocolates? If yes, plz describe ________________________________________________________________________________________________________________________________________

Do you think that the present choices available in chocolates are costly? If yes, what will be your ideal price range?

Would you prefer to switch to chocolates of another brand if it is cheaper than your preferred brand without any change in quality & taste?________________________________________________________________________________________________________________________________________________

If you were given a chance to prepare a new variety of chocolates what would you make? i.e any new flavours or ingredients that you wish for in chocolates.

MARKET SURVEY FOR CHOCOLATESQUESTIONNAIRE FOR RETAILERS

Name of the shop:________________________________________________________

Location:_______________________________________________________________

Which brands of chocolates does the shop sell?________________________________________________________________________________________________________________________________________________

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Highest sales of which brand of chocolates ( i.e. how many in 1 day)________________________________________________________________________

What are customers preferences in the choice of chocolates? Taste Sweetness Price Calories Brand of the chocolate Packaging Ingredients/ flavours

Sales of chocolates are highest during which period?________________________________________________________________________

Are there any customer complaints about the existing brands of chocolates?________________________________________________________________________

Has the demand for chocolates risen in the past few years?________________________________________________________________________

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Analysis of the questionnaire

Our questionnaire is a structured non-disguised questionnaire containing both open ended and close ended questions. Let is now understand the significance of the various questions asked in the questionnaire and what information we hoped to collect through each of the question.

QUESTIONNAIRE FOR CONSUMERS

Name: _______________________________________Gender: _____________

This question would help to achieve the conditions of sample of surveying 50% males and 50% females.

Age group:

5-10 yrs 11-15 yrs 16-20 yrs 21- 30 yrs 31-40 yrs 40 yrs & above

This question would help us to understand the buying preferences and the demands of consumers as per the age structure.

Place of residence: ____________________________________________________Occupation: __________________________________________________________Monthly spending on clothes, eating out, hanging with friends etc _____________Location of work/college/school:__________________________________________

These questions were included so as to understand the correlation between the occupation, lifestyle, social class and the influence of social environment i.e friends and family.

In one word describe a foodstuff that says “Sharing your joy with people you love”_____________________________________________________________________(Word association question)Through this question we wanted to know whether the consumers perceived chocolates as a symbol of love, togetherness and happiness.

What do you normally prefer to eat as a sweet item ___________________________(Completely unstructured question) Through this question we wanted to estimate the proportion of population who preferred chocolates as their main sweet item.

Do you like chocolates? (Like scale question)

Very much Okay okay Not much

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Not at allThis question helps to understand the level of like and dislike for chocolates amongst the target population.

How many times you buy chocolates? (Multiple choice question)

Once every day 2- 3 times a week Once a week On special occasions only Others, plz specify

This helps us to understand the buying pattern and schedule.

What do chocolates signify to you? ________________________________________(Unstructured question)This question was designed to have an insight into the customers mind to understand the emotions which he associates with chocolates.

Where do you normally buy chocolates from?(Dichotomous Question)

Your local kirana shops Supermarkets like Big Bazaar

This question would help us to understand which of the distribution channel is more effective and preferred by the consumers.

Rate your preferences in choice of chocolates on a scale of 1-5 (5 being highest rank)(Importance scale)

Taste Sweetness Price Calories Brand of the chocolate Packaging Ingredients/ flavours

This question was designed so that we can understand the customers’ scale of importance to the different attributes of chocolates.

Which brand of chocolates you prefer?(Multiple choice question)

Nestle Cadbury’s Amul Foreign brands like Hershey’s Any other, plz specify _______________________________________________

The simple purpose of this question was to find out the customers preferred brand of chocolates.

Why do you prefer that particular brand?(Completely unstructured questions)

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________________________________________________________________________________________________________________________________________________

Is there anything that you feel is lacking in your preferred brand of chocolates? If yes, plz describe ________________________________________________________________________________________________________________________________________

These questions would help us to find out the reasons behind the customers preference of a particular brand of chocolates and also to find out if the customers felt something lacking in the existing varieties of chocolates.

Do you think that the present choices available in chocolates are costly? If yes, what will be your ideal price range?

Would you prefer to switch to chocolates of another brand if it is cheaper than your preferred brand without any change in quality & taste?(Intention to buy scale)________________________________________________________________________________________________________________________________________________

These questions were formed so as to take the customers opinion regarding the prices of the existing brands of chocolates and also their ideal price range. As well as to find out the customers intention to buy in case of a new brand of chocolate if it is priced cheaper.

If you were given a chance to prepare a new variety of chocolates what would you make? i.e any new flavours or ingredients that you wish for in chocolates.________________________________________________________________________________________________________________________________________________

This is the most important question for the survey which helps us to fulfill the research objective of uncovering hidden opportunities i.e. to find out the demands of customers in terms of ingredients and flavours of chocolates which are not available in the existing brands.

QUESTIONNAIRE FOR RETAILERS

Name of the shop: ________________________________________________________

Location: _______________________________________________________________

These 2 questions will help us to form a relationship between the chocolate sales of the retail unit and its location i.e. geographical segmentation.

Which brands of chocolates does the shop sell?________________________________________________________________________________________________________________________________________________

Highest sales of which brand of chocolates ( i.e. how many in 1 day)________________________________________________________________________

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These questions are formed to find out the different brands of chocolates stocked by the retailer and also to find which brand has the highest sales.

What are customers preferences in the choice of chocolates? Taste Sweetness Price Calories Brand of the chocolate Packaging Ingredients/ flavours

This helps us to get the retailers point of view to the importance given to the various attributes of chocolates by consumers.

Sales of chocolates are highest during which period?________________________________________________________________________

This question helps to understand the buying pattern of consumers.

Has the demand for chocolates risen in the past few years?

This question helps us in answering the question as to whether the market for chocolates has increased or not.

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Sample Size: 122 respondents 100 consumers – 82% 22 retailers – 18%

SAMPLE SIZE

Consumers 82%

Retailers 18%

Consumers

Retailers

100 Consumers:46% males 54% females

CONSUMERS

Males 46%

Females54%

Males

Females

Age Group5-10 & 11-15: 26 respondents

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16-20: 28 respondents21-30: 24 respondents35- 50: 11 respondents50 & above: 11 respondents

AGE GROUP

26%

28%24%

11%11% 5-10 & 11-15

16-20

21-30

35- 50

50 & above

Age group: 5-10 & 11-15 years : 26 respondentsMales: 16 respondentsFemales: 10 respondents

AGE GROUP: 5-10 & 11-15

Males62%

Females38%

Males

Females

Age group: 16-20 years : 28 respondentsMales: 15 respondentsFemales: 13 respondents

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AGE GROUP : 16 - 20

Males, 15, 54%

Females, 13, 46%

Males

Females

Age group: 21-30 years: 24 respondentsMales: 12 respondentsFemales: 12 respondents

AGE GROUP: 21-30

Males , 12, 50%

Females, 12, 50%

Males

Females

Age group: 35- 50 years: 11 respondentsMales: 2 respondentsFemales: 9 respondents

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AGE GROUP: 35- 50

Males, 2, 18%

Females, 9, 82%

Males

Females

Age group: 50 years & above: 11 respondentsMales: 2 respondentsFemales: 9 respondents

AGE GROUP: 50 & above

Males, 2, 18%

Females, 9, 82%

Males

Females

OCCUPATIONStudent: 53%Service & Business: 25%Housewife: 14%Retired: 8%

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OCCUPATION

53%25%

14%8%

Student

Service &Business

Housewife

Retired

Correlation between age group, location and monthly spending

Age group: 5-10 & 11-15

AGE GROUP: 5-15 & MONTHLY SPENDING

5, 19%

6, 23%

6, 23%

9, 35%0-50

50-100

100-500

500 and above

Location of Residence:Gandhinagar South: 2Munshi Nagar: 11Kankairaiya Lake: 6Geeta Mandir: 2Nirma University: 3Thaltej: 2

Age Group: 16-20

30


7, 25%

5, 18%12, 43%

4, 14%

100-500

500-1000

1000-5000

5000 & above


Location of college/ work:Gandhinagar South: 0Munshi Nagar: 12Kankairaiya Lake: 4Geeta Mandir: 2Nirma University: 10Thaltej: 0

Age Group: 21-35

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1, 4%

11, 45%

9, 38%

3, 13%

100-500

500-1000

1000-5000

5000 & above


Location of college/ work:Gandhinagar South: 4Munshi Nagar: 6Kankairaiya Lake: 2Geeta Mandir: 2Nirma University:9 Thaltej: 1

Age Group: 35 & above

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AGE GROUP: 35 & above & MONTHLY SPENDING

2, 9%

7, 32%

7, 32%

6, 27%

100-500

500-1000

1000-5000

5000 & above


Location of college/ work:Gandhinagar South: 0Munshi Nagar: 3Kankairaiya Lake: 0Geeta Mandir: 4Nirma University: 2Thaltej: 0

Normally prefer as a sweet item Chocolates: 53%Ice creams: 11%Traditional Sweets: 28%Cake: 6%

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PREFERENCE AS A SWEET ITEM

54%

11%

29%

6% Chocolates

Ice creams

Traditional Sweets

Cake

Do you like chocolates?Very much: 59%Okay Okay: 28%Not much: 11%Not at all: 2%

LIKE AND DISLIKE OF CHOCOLATES

59%28%

11%2%

Very much

Okay Okay

Not much

Not at all

How many times do you buy chocolates? Once every day: 33%2-3 times a week: 30%Once a week: 12%Special occasions: 25%

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BUYING PATTERN

Once every day33%

2-3 times a week30%

Once a week12%

Special occasions

25% Once every day

2-3 times a week

Once a week

Special occasions

Where do you normally buy chocolates from? Kirana shop: 79%Supermarkets: 9%Both: 12%

PREFFERED DISTRIBUTION CHANNEL

79%

9%

12%

Kirana shop

Supermarkets

Both

Which are the top attributes a consumer looks for while making his decision?

28% respondents said taste was the most important factor of selection27% respondents said brand was the most important factor of selection25% respondents said ingredients/ flavours was the most important factor of selection20% respondents said packaging was the most important factor of selection

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PREFERENCES

Taste28%

Brand27%

Ingredients25%

Packaging20%

Taste

Brand

Ingredients

Packaging

On an average the scale of preference was as follows: 1st priority: Taste2nd priority: Brand3rd priority: Packaging4th priority: Flavours5th priority: Sweetness/less sweet6th priority: Calories7th priority: Price

Which brand of chocolates you prefer? Cadbury’s: 57%Nestle & Cadbury: 18%Cadbury & Foreign Brands: 10%Only Foreign Brands: 9%Amul: 2%Nestle: 2%Nestle & Foreign Brands: 2%

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MARKET LEADER

57%18%

10%

9%

2%

2%

2% Cadbury’s

Nestle & Cadbury

Cadbury & ForeignBrands

Only Foreign Brands

Amul

Nestle

Nestle & ForeignBrands

Why do you prefer your choice of brand?Majority of the respondents said that they liked a particular brand of their choice especially Cadbury because of taste, quality and most importantly brand name and packaging.

Is there anything lacking according to you in your preferred brand? (amongst the existing varieties)

No: 84%Yes:16%

SATISFACTION GRAPH

No84%

Yes16%

No

Yes

The respondents who replied yes, have stated the following attributes as lacking in the existing varieties of chocolates:

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Lack of chocolates in attractive shapes High price Not enough crunchier Not good as compared to foreign brands

Are the present choices available in chocolates, costly? If yes, what will be your ideal price range?

Yes: 45%No: 55%

PRICES: HIGH OR LOW

No55%

Yes45% No

Yes

Ideal price range:

Quantity

Existing prices

Ideal price range

40 gm Rs 18-20 Rs 12-1523 gm Rs10 Rs 6-815 gm Rs 5-7 Rs 3-5

Would you prefer to switch to another brand?Yes: 53%No: 43%Indifferent: 4%

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PRICE SENSITIVITY OF CONSUMERS

No43%

Yes53%

Indifferent4%

No

Yes

Indifferent

New flavours/ ingredients

98% of respondents said that they wanted a healthier, less sweet and lesser calories chocolates which even diabetic people can eat.Only 2% said that they wanted chocolates to be more sweeter.

54% of the respondents said that they wanted new flavours such as: Vanilla- 10%Butterscotch- 9%Blackforest- 2%Strawberry- 10%Coffee-5%Mint-4%Elaichi-1%Swiss flavour- 1%Cake flavours-1%Kesar-2%Caramel 5%Bitter cocoa-2%Ice cream chunks in between of chocolate balls

28% of respondents said that they want an abundant of nuts and dry fruits like cashews, almonds, pistachios, anjeer, walnuts and so on.

27% of the respondents said that they want fresh fruits/ fruit flavoured chocolates like:Litchi- 1%Orange-2%Mango-6%Fresh pineapple-3%

DATA ANALYSIS OF RETAILERS

Which brand of chocolates does shop sell?22% of retailers stock cadbury’s

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19% or retailers stock Nestle13% of retailers stock Amul3% of retailers stock imported brands.

Which brand has the highest sales?

HIGHEST SALES

Cadbury's, 19, 86%

Nestle, 3, 14%

Cadbury's

Nestle

When is the sale of chocolates the highest?

Festivals, 19, 86%

All Time, 3, 14%

Festivals

All Time

Sales are normally higher duringFestivalsSpecial occasions like X mas, valentines day, friendship day

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LIMITATIONS OF THE RESEARCH

Large size of target populationThe target population of chocolates is each and every person with teeth right from children to old people. Our sample size of 100 thus cannot be said to be the correct representation of the target market.

FragmentationChocolates are not sold in exclusive shops but in simple retail shops which number 1 million in India. Thus it is very difficult to estimate the sales and buying pattern of consumers in general.

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FINDINGS

In the age group of 16-20 and 21-30, the average monthly spend is not influenced by the place of residence/ social class but rather on, where a person studies/works i.e by the social circle of his friends and colleagues.

The consumers by and large are satisfied with the present choices available in chocolates i.e. there are no complaints of consumers as regards to existing varieties of chocolates

However there are many new wants and demands of consumers in terms of new flavours and ingredients of chocolates which the present brands of chocolates have not introduced into the Indian markets.

There is a substantially low margin of difference in terms of people who are sensitive to price of chocolates and hence it cannot be proved conclusively that introducing a chocolate at a lesser price than the prevailing price will lead to capturing of market share.

Consumers attach more value to the brand of the chocolates as well as the packaging i.e. the quality of the chocolates.

79% of chocolate sales happen through kirana shops i.e. mom and pop shops which says that chocolate is a commodity which has to be available to the consumer when and where he wants it. The sales of chocolates largely depend on its availability to the consumer at his convenience.

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RECOMMENDATIONS

There is a lot of demand for chocolates the consumers and yet a lot of it remains untapped by the existing brands. So introducing a new brand/ player in the chocolate market is certainly a feasible idea to a fair extent.

However since the present varieties of chocolates in terms of flavours & ingredients are suiting the consumer needs, the new brand must seek to cater to the untapped demands of consumers by introducing new flavours/ ingredients.

Also, from the above analysis we can see that there is no sufficient proof to show that customers are price sensitive. Thus introducing a cheaper variety of chocolates may not necessarily help in capturing substantial market share. However for the price sensitive consumers, a lower end version of chocolates can be introduced.

Brand is a very important criterion of purchasing for the consumers. Hence instead of trying to compete with huge brands like Cadbury’s and nestle, the new brand should try to position itself in a new demand market.

Also it should try to develop and introduce healthier, less calorific chocolates that are projected not just a sweet item/dessert but as a complete wholesome snack.

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Bibliography

www.indiainfoline.com www.ibef.org Marketing Management – Philip Kotler

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