EXECUTIVE SUMMARY

My summer internship project (May June, 2013) as part of the PGDM curriculum at Xavier Institute of Management & Entrepreneurship, Bangalore was done at Cadbury India Ltd., Kochi. The project I had to undertake at Cadbury was Rejuvenating Cadbury Perk in Kerala market. As the title suggests the primary objective of the project is to rejuvenate Cadbury Perk in the Kerala market, considering the major competitor Nestle Munch. In order to fulfil the objective of the project, market research was carried out. As part of market research market immersion techniques were employed to give a customer centric approach to the whole process. One of the major immersion technique engaged were surveys. Two separate surveys were administered; one for the customers

(shopkeepers/wholesalers/retailers), and the other for consumers. The objective of customer survey was to find out various factors that are impeding Cadbury Perk from gaining volume in the Kerala market, considering competitors like Nestle Munch. The objective of the consumer survey was to learn the consumer buying preference for Cadbury Perk and Nestle Munch and the associated reasons for the same. The study is not infallible, there are certain limitations to this study (see page 2) The results of both these surveys are tabulated and analyzed. The major findings from these results are: 1. Consumer demand for Perk is less compared to Munch. 2. The retailer margin for Munch at 12% is more than that of Perk at 10%. 3. The aspect ratio of Munch is better than that of Perk. 4. The plain (card-board) color of the outer boxes of Perk has eroded its visibility at the shops. 5. Nestle Munch has done lot more customization for the local market when it comes to sales promotion. 6. Television and word of mouth are the most influencing medium of advertisements for the purchase decision of chocolates. 7. Munch is crispier than Perk, while Perk is sweeter than Munch. 8. Brand loyalty for both Munch and Perk is not great, which suggests consumers exhibit switch mentality while purchasing both these items.

After considering the findings seven recommendations were proposed, for the company to consider.

OBJECTIVE OF THE STUDY

The main objective of this project is to rejuvenate the product Cadbury Perk in Kerala market.

In order to fulfill this objective market research is conducted, and for the market research various market immersion techniques are employed. One of the major immersion technique employed are surveys. There are two separate surveys for the customers and the consumers.

The customer survey targets the customers (wholesalers/retailers), and the objective of this survey is to find out various factors that are impeding Cadbury Perk from gaining volume in the Kerala market, considering competitors like Nestle Munch.

The consumer survey targets the consumers, and the objective of this survey is to learn the consumer buying preference for Cadbury Perk and Nestle Munch and the associated reasons for the same.

LIMITATIONS OF THE STUDY

In the attempt to make this project authentic and reliable, every possible aspect of the topic was kept in mind. Nevertheless, despite of fact constraints were at play during the formulation of this project. The main limitations are as follows:

Due to limitation of time only few people were selected for the study. So the sample of customers/consumers was not enough to generalize the findings of the study.

For convenience only Rs 5 MRP packs of Cadbury Perk and Nestle Munch are considered for the study. The chance of biased response cant be eliminated though all necessary steps were taken to avoid the same. Official company sales data is not incorporated.

A COMPARISON BETWEEN CADBURY PERK AND NESTLE MUNCH

Details of Cadbury Perk Parent Company Category Launched MRP Net Weight Packing Cadbury India Ltd Chocolates: Chocolate covered wafer 1996; new glucose variant launched in 2009 Rs 5 15 grams (single piece) 1 outer box = 22 pieces 1 case = 24 outer boxes

Details of Nestle Munch Parent Company Category Launched MRP Net Weight Packing Nestle India Chocolates: Chocolate covered wafer 1999 Rs.5 11.5 grams (single piece) 1 outer box = 24 pieces 1 case = 24 outer boxes

METHODOLOGY

Market Immersion

Market immersion techniques are used by companies in order to get closer to customers. A customer centric approach requires the organization to keep the customer at the heart of the organization, so market research must engage customers at each stage of the research process. There are three stages in market research 1) Definition 2) Exploration 3) Distillation Immersion techniques were used in each of these stages of research

Key stages Definition

What it encompasses Planning Designing research address objective Research Primary Secondary research Analysis Interpreting results, communicating the implications, recommending action

Immersion techniques Interviews the (In-depth interview, casual to conversations, the questionnaires)

Exploration

Observation and (In-house, Online research, blogs, forums)

Distillation

Joint interpretation of the the findings.

Customer Survey & Consumer Survey Sampling Technique The sampling technique used is simple random sampling. Simple random sampling is a type of probability sampling; it will make sure that every unit in the population has a chance of being selected. The objective is to select n items out the target population of N. The sample size required is 68

Sampling Procedure Questionnaires were distributed to respondents on hand and through Google Forms. Research Procedure The data is collected directly from the respondents using structured questionnaires.

The respondents are divided into two; customers (wholesalers/retailers) and consumers. Two separate surveys are administered for the two groups.

The first survey is targeted at the customers (wholesalers/retailers), it includes open ended questions as well as questions that are to be answered on a Likert scale. The questionnaire test various factors that influences the customers purchase of Cadbury Perk and Nestle Munch, like; margin, consumer demand, service quality, packaging, grammage, advertisement. Moreover, it takes a count on the quantity of purchase of these products, Cadbury Perk and Nestle Munch.

The second survey is targeted at the consumers; it includes multiple-choice questions and questions that are to be answered on a Likert scale. The questionnaire tests various aspects that are crucial in the purchase of chocolates in general, preference of one product over the other (Cadbury Perk and Nestle Munch), and the factors for the preference.

FINDINGS Analysis of the results of Customer Survey The sample size was 72. The respondents were shopkeepers (wholesalers/retailers). The distribution of respondents on the importance of Margin (1-High, 2-Medium, 3Low) on a scale of 1-3 for the purchase of Cadbury Perk & Nestle Munch. o About 97% of the responses rate margin on scale of 1- high and 2 medium

The distribution of respondents on the importance of Consumer Demand on a scale of 1- 3 (1-High, 2-Medium, 3-Low) for the purchase of Cadbury Perk & Nestle Munch. o 80% of the responses rate consumer demand on the highest scale,1

The importance of Service Quality on a scale of 1- 3 (1-High, 2-Medium, 3-Low) for the purchase of Cadbury Perk & Nestle Munch o About 54% of the responses rate service quality on the medium scale, 2

The distribution of respondents for increasing the discount schemes of Cadbury Perk. o More than 91% of the respondents wanted Cadbury Perk to increase its wholesale discount schemes, which is quiet expected.

The distribution of respondents on scaling (1 to 5) the importance of Packaging for the purchase of Cadbury Perk & Nestle Munch. (1-Least important, 2, 3, 4, 5-Very important) o More than 60% of the respondents are neutral towards the importance of Packaging on their purchase decision.

The distribution of respondents on scaling (1 to 5) the importance of Grammage for the purchase of Cadbury Perk & Nestle Munch. (1-Least important, 2, 3, 4, 5Very important) o About 57% of respondents are neutral towards the importance of Grammage on their purchase decision.

The distribution of respondents on scaling (1 to 5) the importance of Advertisements for the purchase of Cadbury Perk & Nestle Munch. (1-Least important, 2, 3, 4, 5-Very important) o 65% of the respondents sight Advertisements as an important factor for their purchase decision, though not very important.

Some of the most recurring and important feedbacks that were gathered from the customers and the sales people of the company in the process of administering the survey are listed below. o o o o o o Consumer demand for Nestle Munch is much more than Cadbury Perk Enquiries from consumers for Perk are less, only if Munch is not available Perk is demanded. The whole-sale discount schemes for Munch are more attractive than that of Perk.

The retailer margin for Munch at 12% is more than that for Perk at 10% The ratio of purchase of Munch: Perk is roughly 9:1, from the responses of the customers. Nestle Munch appears longer than Cadbury Perk, but in fact Perk at 15 grams is bigger than Munch at 11.5 grams. Both Munch and Perk are of the same length, but Munch is slim and the package is designed little lengthier which makes it appear longer

o o o

Shopkeepers state that, earlier, the length and weight for Perk was more, in fact earlier, two (smaller) pieces of Perk was available in a pack of Rs 5 (MRP) Some retailers claim that they get 3 outer boxes free for the purchase of a case of Nestle Munch, whereas Cadbury Perk doesnt offer any schemes in similar lines In order to claim a discount of over 10%* (* wholesale discount scheme active in the first week of June, 2013) shopkeepers have to purchase more than 8 cases of Cadbury Perk, according to the shopkeepers Perk doesnt have that much demand in the market for them to stock 8 cases.

An outer box of Perk contains 22 pieces priced at Rs 110 (MRP), while an outer box of Munch contains 24 pieces priced at Rs 120 (MRP). Customers generally have a feeling that they are getting lesser number of Perk compared to Munch for the purchase of an outer box, even though the price is proportionately less for Cadbury Perk.

o o o

Generally, wholesalers do not purchase less than an outer box. The plain color of Cadbury Perk outer box erodes visibility in the shops Nestle Munch has done lot more customization for the local market when it comes to sales promotion.

Analysis of the results of Consumer Survey The sample size is 83. The respondents are consumers. Various aspects of purchasing pattern and preference of chocolates are recorded in this questionnaire. About 45% of the respondents purchase chocolates on a weekly basis. The distribution of responses, on rating various factors which are important in the purchase of chocolates. (1 - Very important, 2, 3, 4, 5 - Least important) o o o o o More than 75% of the respondents rate taste as a very important factor on their purchase decision of chocolates. The responses for packing are somewhat spread out from very important to least important. Around 65% of the responses are rating brand image from very important to important About 47% of respondents rate quantity/size as an important, though not a very important factor on the purchase decision of chocolates About 65% of respondents rate availability as very important to important factor The survey suggests that Television and Word of Mouth are the most influencing media of advertisements for the respondents, in the purchase of chocolates The distribution of brand preference (Nestle Munch & Cadbury Perk) o 57% of the respondents prefer Nestle Munch and 43% of the respondents prefer Cadbury Perk. Almost 74% of the respondents purchase both these chocolates, Munch & Perk for self-consumption, and Rs.5 pack is the most popular package of consumption for both the products. Around 63% of the respondents purchase these chocolate-coated wafers from food stores 72% of the respondents who prefer Perk to Munch do so because Perk is sweeter than Munch. While 49% of the respondents who prefer Munch to Perk do so because Munch is crispier than Perk, and 36% of the respondents who prefer Munch to Perk do so because Munch is not as sweet as Perk. 47% of the respondents who prefer Perk are loyal to the brand, while only 28% of respondents who prefer Munch are loyal to it. More than 50% of the respondents are not loyal to both Munch and Perk.

RECOMMENDATIONS

A. As a pull strategy Cadbury perk can rope in a celebrity (sport-stars, film-stars, etc.) as its brand ambassador, like what Nestle Munch did with Virat Kohli. The glucose tag appended to Perk has created an image of an energy-chocolate snack. As television is the most influential medium of advertisement, the presence of a brand ambassador in television commercials can create more pull demand. This can, to an extend augment consumer demand. This is a suggested ATL activity.

B. The retailer margin for Perk should be increased to at least 12% (on par with Munch) from 10%. In addition to that the wholesale discount schemes for Perk should be little more attractive keeping the fact tight that Munch is the market leader in chocolate coated wafers.

C. An outer box of Cadbury Perk should be re-structured to contain 24 pieces (like Munch); it will ensure that 2 additional pieces are sold as shopkeepers do not purchase less than an outer box. Moreover, the outer boxes should be colored

attractively with the same blue color of the Perk pack, which will boost visibility

D. Cadbury Perk should re-design its package to enhance the aspect ratio, which will bring in a positive consumer outlook. Likewise, Perk can reduce the weight by 2 3 grams, at same time increase the length slightly; this will ensure lesser cost of production.

E. The wafer can be made a little crispier. F. Perk can be clubbed along with Dairy Milk, Cadburys top performing product. Discount schemes for Dairy Milk can be reduced; the reduction in margin for customers can be compensated by giving Perk for the equivalent reduced margin. In order to implement this, Cadbury must attack Nestle Munch. Shops which are about to finish off on their stock of Munch should be targeted; the Cadbury sales-personnel should approach these shops before the Munch sales-person does so. The shopkeeper should be persuaded to purchase more of Dairy Milk (as it has got good consumer demand), which will automatically pile up the Perk stock in the shop. So when the Nestle sales-person comes to take the order for Munch, the shopkeeper will order less of Munch as he/she is short of money (because he/she invested more in purchasing Dairy Milk). When the consumer who exhibits switch mentality comes to buy any 9

of these chocolates from this shop, he/she will buy Perk as it is more visible on the shelves of the shop.

G. Customization for the local market is another suggested activity. Pamphlets, hoardings, advertisements in regional newspapers/magazines/channels for Perk in association with regional festivals/special occasions in the local market will have a positive impact on the sales. This can be extended to among the sale force of the company, like, a sale-personnel who achieves x% more than the target for Perk will be rewarded in line with something particular to the festival, and if possible this can be widened to normal occasions also.

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