CADBURY

INTRODUCTION
Cadbury began its operation in 1948 by importing chocolates and then re-packing
them before distributing it in the Indian market. After 62 years, it is having five companies at
Thane, Induri (Pune), Malanpur (Gwalior), Bangalore, Baddi (Himachal Pradesh) and 4
sales offices in (New Delhi, Mumbai, Kolkata 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! Cadbury is 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 our main product is Bourn vita - the leading Malted
Food Drink (MFD) in the country. Similarly in the medicated candy category Halls is the
undisputed leader.

CADBURY INDIA
A subsidiary of Mondelez International, the $32 billion global snacking major formed
in October last year after Kraft Foods decided to split its business. Cadbury controls over
67% share in the Rs 5,562 crore chocolates segment in India, followed by Nestle with 21%
share and Ferrero with 6% share, industry insiders said quoting data from market research
agency Nielsen. Last year, sales of Ferrero India and Nestle's chocolate segment grew 30%
and 6%, respectively.
The chocolate industry in India works at different levels that include chocolate giants
like Cadbury's Dairy Milk, Nestle etc., small chocolate manufacturers, chocolate retailers,
chocolate importers and people who make chocolates at home. Cadbury India operates in five
categories Chocolate confectionery, Beverages, Biscuits, Gum and Candy.
In the Chocolate Confectionery business, Cadbury has maintained its undisputed
leadership over the years. Some of the key brands are Cadbury Dairy Milk, Bournvita, 5 Star,
Perk, Bournville, Celebrations, Gems, Halls, Eclairs, Bubbaloo, Tang and Oreo. In India,
Cadbury began its operations in 1948 by importing chocolates. After over 60 years of
existence, it today has six company-owned manufacturing facilities at Thane, Induri (Pune)
and Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh) Hyderabad and 4 sales
offices (New Delhi, Mumbai, Kolkata and Chennai). The corporate office is in Mumbai.
Cadbury India enjoys a value market share of over 67 percent in the chocolate category and
our brand Cadbury Dairy Milk (CDM) 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 main product is Bournvita - the leading Malted Food
Drink (MFD) in the country. Similarly in the medicated candy category Halls is the
undisputed leader. Cadbury recently entered the biscuits category with the launch of the
Worlds No 1 biscuit brand Oreo. Toblerone, the legendary triangular Swiss chocolate, is over
a century-old brand and prides itself on being the only triangular chocolate.
The launch of Toblerone in India is in line with the business objective of growing and
leading the premium gifting chocolate market with Gift like no one else as the brand theme.

VISION

The governing objective for Cadbury India is to deliver Superior Shareholder value.

Cadbury in every pocket.

Sustain growth of Cadburys market through aggressive product development.

Focusing on cost competitiveness & productivity in operations and innovative

utilization of assets.

Investing to develop people.

MISSION

To provide customers with a tempting and exquisite taste as enticing treats means a
mouthwatering treat which is simply irresistible.

Cadbury means quality this is the promise of Cadbury. Its reputation is to build
upon quality. Its commitment to continuous improvement will ensure that promise.

CADBURY INDIAS MARKET SHARE IN DIFFERENT SEGMENTS

For more than six 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).

Brands in fact influence consumer behavior in a number of ways:

Reassurance: - A brand is a stamp of authenticity. It adds value by promising replicability
and helps to establish repeat purchase patterns. In a foreign country, people seek the
reassurance of familiar brands, even though they are presumably traveling to find new
experiences! This is why tourists and travellers around the world feel comfortable on eating
at McDonalds.
Value Expression: CDM choose brands that reflect the individual values that we possess as
individuals. They do this to communicate the desired signals in the highly social environment
we inhabit.

CHOCOLATE BRANDS OF CADBURY INDIA:-

 MARKET SCENARIO
Cadbury is a Market leader with 67% market share in chocolate Industry with
30% contribution by Dairy milk.

1. Star: - Products in rapidly growing markets in which the company has high relative market
share. Star products generates the high amount cash but are expensive to support. They are
good

investment

as

have

high

earning

potentials

both

at

present

& at future time. That investment is likely to be needed if the company wants to retain its
market positions, as competitors will be trying to emulate stars. Cadbury India has two star
products Cadbury Dairy Milk Chocolates with 30% market share in chocolate market &
Cadbury Bournvita 16.2 % share in malted foods category (as per Nielsen data for the quarter
ending March-13). Figure: 11.0 BCG Matrix Cadbury Chocolate India
2. Cash Cows: - Products in slow growth, or even static, market in which they have
relatively high market share are called as Cash Cows. They require little promotion although
under investment can turn them into dogs so they should not be taken for granted. The
companys objective is likely to be hold this position in order to obtain maximum return on
investment (ROI). Cadbury India has two cash cow products Perk & Gums.
3. Dogs: - Dogs are in stagnant or slow-growing markets have relatively low market Share.
One companys dog can become anothers cash cow or even a star if they are operating in
different markets or market segments. Cadbury India has three dogs 5 Star, GEMS & Eclairs.

4. Question mark: - Products in this quadrant are in rapid growing market but hold a
relatively low market share. Cadbury India has two dogs Toblerone & Bournville.

4Ps and STP

PRODUCT
The product Diary Milk is a chocolate bar that is made from real dark chocolate. The design
of the chocolate is nearly same throughout the world with slight changes that are made
according to the different regions. The amount of milk content in dairy milk is the highest as
compared to other competitors. The components that are used in making the chocolate are
sugar, cocoa butter, vegetable fats, cocoa mass and emulsifiers. The various variants of dairy
milk are Wowie, Crackle, Fruit and Nut, Crunchie, Temptations (roasted almond, rum raisins
and raisin apricot), Bournville and Silk.

PRICE

Low costing for basic product - From Rs. 5 to Rs. 20

Moderate price of variants- priced between Rs 35 to RS 60

Premium segment (premium pricing strategy) Cadbury Dairy Milk Silk, a brand
priced at Rs. 60 for 60 grams Rs. 150 for 160 grams available in Milk chocolate, Roast
Almond and Fruit & Nut variants.

 PHYSICAL DISTRIBUTION

Presence

Available in 33 countries

India among Cadbury's top 12 global markets

Distribution network in India

Four sales offices

2500 distributors

5,50,000 retailers

Non retail chain.

PROMOTION
The details of all the past & present promotional programs are explained below:

MARKETING ENVIRONMENT OF CADBURY

MICRO ENVIRONMENTAL ANALYSIS:
(1)MARKET CONCENTRATION & COMPETITION
The chocolate industry is highly concentrated. Cadbury and Nestle together account for
90% of the retail sales with Cadbury being the market leader. Competition in this
industry is fierce, especially between Cadbury and Nestle. Both Cadbury and Nestle
have rival products in every segment (Cadburys Dairy Milk, 5 Star, Perk vs. Nestl's
Classic, bar-one, munch, etc.)
(2) BARRIERS TO ENTRY
The industrys main barrier to entry is with respect to advertising. The incumbent
firms have spent millions of rupees to create brand-loyalty with consumers. The
cumulative effects of advertising create an absolute cost advantage for the incumbent
firms, thus entrants must overcome not only current advertising efforts, but also the

lingering impact of past marketing campaigns. High sunk costs also act as a barrier to
entry.
(3) SUPPLIER POWER
Industry uses a wide range of raw materials in manufacturing chocolate products, the
main ones being cocoa beans, sugar and other sweeteners (including polyols and
artificial sweeteners such as aspartame), dairy products (including milk), gum base and
fruit and nuts. Cadbury buys its raw materials from suppliers around the world.
No single supplier accounts for more than 10% of their raw material purchases.
(4) BUYER POWER
End consumers have strong buyer power because of the availability of substitutes, both
generic and brand names. It is easy for a consumer to purchase a nearly identical
product for a lower price. This gives consumers a great deal of leverage and leads
Cadbury to

spend millions of rupees to create product differentiation via

advertisements and new products to catch up with the evolving trends in the market.
(5) SUBSTITUTES
The current trends in the market suggest that traditional sweets are possible substitutes
for chocolates. In order to strengthen the special relationship consumers share with
chocolates, Cadbury India launched its all-year-round Cadbury Celebration gifting
range with an array of newly designed Cadbury Celebration packs.

MACRO ENVIRONMENTAL ANALYSIS:

(1)POLITICAL:
Liberalization measures prompted by WTO affecting sales by way of competition from
imports; Direct imports from Cadbury Schweppes by dollar stores might erode market
share.
Change in government policies has allowed entry of foreign players; US-based
chocolate-maker Hershey's is mulling a foray into the Indian chocolate market through
its joint venture with Godrej.

The Food Safety and Standard Bill, 2005 with penal provisions requires a review as the
same gives huge powers to the Inspecting Officers to seize food articles without
authorization and may create unwanted confusion to the detriment of the company.
(2)ECONOMIC:
The prices of cocoa and milk, the chief ingredients used in chocolates, have gone up by
50 percent, if the prices of these commodities keep increasing, Cadbury will be forced
to increase the prices.
Low margins, high volumes, price sensitivity of the industry and competition from
cheaper substitutes leave little room for price maneuvering.
In October 2003, seizure of chocolates stock from Pune plant after worms were found
by customers in Dairy Milk packages; Sales dropped by 30 percent.
(3)SOCIAL:
Statistics in the last few years have shown that obesity has increased; this therefore
means that the demand for chocolate will have fallen as more people will want a
healthier option rather than a chocolate bar.
Due to fashion and taste people change their minds every month to want the rich and
the famous eat and wear.Although chocolate is not directly involved, it will still affect
the choice people make on which brand consumers will buy.
Adverts and promotions can also affect the way people spend their money, if there is a
famous actress on a Cadburys advert then people are more likely to want to buy that
product if they think someone the admire is consuming it.
(4)TECHNOLOGICAL:
Adoption of JDA softwares space and category management solution resulted in
93.75% reduction in planning and processing time and increase in productivity. ECommerce has not picked up that well - not much turnover through this route future
growth prospects of this channel.

COMMUNICATION STRATEGY
Cadbury was the one having 70 % market shares in chocolate industry. Out of which
30% was the Dairy Milk alone. This is because of constant re-invention of the brand &
bombarding communication towards the consumers consistently to maintain the top position
in mind recall in confectionery segment.
Dairy Milk was awarded as No.1most trusted brand in Mumbai 2005 for the edition
of Brand Equitys most trusted Brand Survey. Dairy Milk targeted all the aspects as possible
to get into the heart of all the people, o fall age groups.
For this they communicated with people through different Ads &Campaigns. Let us
see few of them below: Khane walo KO Khane ka Bahana Chahiye Pappu Paas Ho Gaya
Shubh Aarambh

was one of successful campaigns of Dairy Milk. This means Auspicious

Beginning. With this campaign they said that for whatever you start, start it with Dairy Milk
and it will be successful. For this they chose the best to advertise: Amitabh Bacchhan.
CADBURY INDIA DISTRIBUTION NETWORK INDIA
Cadburys brands are available in over a million outlets across the country. Cadbury is
also focusing intensively on achieving distribution equity. Though it takes much more time
and effort to build, but once built, distribution equity is hard to erode. With technology and
competitive pressure slash in it is becoming increasing difficult for marketers to retain a
unique product differentiation for long period.
In a product and price parity situation, the brand that sells more is the one that
reaches the highest number of customers. To tap this huge potential Cadbury's distribution
channels include the manufacturing warehouses where the chocolate production takes place.
This is followed by wholesaler & then followed by retailer. Due to 65 years of presence in
India - has deep penetration- 2,500 distributors; 550,000 retailers, 60 mid urban (22%)
customers. The modern trade is handled separately. A schematic representation of the entire
distribution channel is given here:-

Distribution network in India

Four sales offices

2500 distributors

5,50,000 retailers

Business Operations

CHANNEL DESIGN
Distribution Structure: No. of Levels
Selection Criteria for channel Partner

SELECTION OF CHANNEL PARTNERS

CHANNEL MEMBER MANAGEMENT

Rewards: Monetary and Non-Monetary

Target Setting & Monitoring

Training & Capacity Building

Cash Flow

MONETARY BENEFITS

General Trade Distributor Margin is around 4.75% and 1% is activity based(completion

of Monthly Sales Target)
Modern Trade Distributor Margin is around 4.5% and 0.5%
Super

Stockiest

Margin

MODERN TRADE MARGIN

is

around

2%

and

1%

of

market

value

Big Bazaar has a direct account with Cadbury and there are separate margins fixed for
these chains overall India by both of them mutually

TARGET SETTING & MONITORING

Monthly Targets set Separately General & Modern Trade Distribution

Incentives only after surpassing Targets

Targets Sets as on data are:

General Trade: 80-90 Lakhs
Modern Trade: 10 Lakhs

Monitoring Done byAnalysing Invoices generated by the distributors & through

companys Salesforce

CASH FLOW