Report on Market Analysis for

Confectionery Industry – Chocolate

By Group – 8, BM – A
Marketing Management – I

B19008 – Anuja Rai

B19013 – D V S Sudhama Battula

B19023 – Kondapuram Vamsi Krishna

B19028 – Munugoti Anurag Sharma

B19036 – Ramapriyan S V

B19039 – Ritwick
Marketing Environment
The confectionery market consists of sale of chocolate and sugar confectionery products.
Sugar Confectionery market in India includes products such as boiled sweets, lollipops,
toffees, nougat and caramel, pastilles, gums, jellies, mints, marshmallows and medicated
lozenges while the chocolate segment consists of all chocolate-based products, including
boxed chocolates, moulded bars and novelties.

The current sales of Indian confectionery market reached $4.7 billion retail value and
expected to grow by 13.5% CAGR between 2019-2024. The current market volume is 586.8
million kilograms.

Macro Environmental Factors

Political & Economic

The incumbent government returned to power in May’19 with a stronger mandate. The
government has previously focused on improving ease of doing business and was expected
to continue to do so. This instigated the companies to register new products and enter new
markets. The companies were making a priority vying the size and future of the business.
However, the sector was disappointed with Budget’19 due to lack of economic stimulus on
the back of global and national economic slowdown owing to persisting trade wars and
weak domestic economic activity.

Growth in India's fast-moving consumer goods (FMCG) sector is declining as lower spending
in urban centres and slowdown in rural growth. Further, value growth in the FMCG space in
the June quarter of 2019 declined to 10% from a year ago. Further, a revised forecast for the
year-end of 2019 estimates all-India FMCG growth in the 9-10% range and food category is
expected to grow 10-11%.

Among the CPI components, inflation of food and beverages eased to 2.33% in July 2019
from 2.37% in June 2019. However, within the food items, the inflation declined for sugar
and confectionery by 2.11%. The annual wholesale price inflation in July, eased to a 25-
month low of 1.08 per cent, indicating manufacturers are losing their power to raise prices
as the slowdown in the broader economy worsens.

In the backdrop of the current slowdown, Hon. Finance Minister on August 23, 2019
announced some measure to arrest the slowdown with governmental support to the
financial sector and regulatory support to auto industry to stimulate demand. Further,
measures are expected in the coming weeks.
Social

India is a land of festivals and the culture of gifting premium confectionery has become a
common trend. With the Raksha Bandhan festival in the middle, chocolate business boomed
and sales of the month of August are expected to be 20-25% higher than the regular
months. With millennial population on the rise, the pressure on companies to become more
socially responsible is high. As a result, companies are following more ethical practices,
sourcing raw materials from suppliers who do not have exploitative employment criteria
etc.

Environmental & Legal

FSSAI modified the existing regulations for food standards in the third quarter of the year.
Some of the key regulations include the ones on advertising and claims, dairy products,
packaging, residues of pesticides, tolerance limits of antibiotics. Food fortification norms
came into force from June 1, compliance of labelling requirement for frozen dessert,
advertising and claims, became applicable from July 1, 2019.

The regulations on labelling and Packaging, in a bid to encourage consumers make healthier
food choices, has made it mandatory to display red colour-coding on front-of-the-pack
labels on packaged food products that have high-fat, high-sugar and high-salt content levels.
Further, it calls for declaring quantity of salt, added sugar, saturated fats and trans-fats and
mentioning serving size, number of servings and per serve percentage contribution of a
particular nutrient to the recommended dietary allowance (RDA). Concerns regarding such
stricter regulations have been raised by MSME sector in the backdrop of increasing health
conscious population.

Competition in the Industry

To analyze the current scenario of the industry, we have categorized the market players into
three categories viz. chocolate confectioners, sugar confectioners, and gum confectioners.
The other key stakeholders in this market are the retailers, both major supermarkets and
the smaller convenience stores, and the suppliers. Suppliers and providers of machinery
would normally be considered under this category, but for the sake of our analysis we have
only taken suppliers of raw materials used on a recurring basis as they have continual
impact on the supply chain. The machinery for manufacturing and packaging would be
considered as fixed cost and hence those suppliers will not have as much of an impact as,
say cocoa farmers, sugar suppliers etc.
Buyer power

Across the globe, conventionally, the buyers of confectionery are usually big brand retailers,
such as Costco, Walmart, Whole Foods etc. With robust and well-established distribution
systems, these multinational retailers as well as hypermarkets and supermarkets have
significant buyer power. However, in India, smaller convenience and kirana stores are the
major buyers and account for more than 75% of the value in 2018.

The buyer power is commensurate with the size of the buyer and hence these small buyers
cannot exert a lot of influence on the market players. But when all the small buyers are
considered collectively, their buyer power increases significantly and this acts as a balance
to mitigate the power of market players.

With evolving tastes of the society, manufacturers look to diversify their product range to
sugar-free products, organic products without additives, products with vitamins such as
energy bars etc. create new horizons for the market players to explore. On the flipside, this
also gives the buyers a variety of products to display at their stores, with confectionery only
being a small part of their offering. The switching costs are therefore low and buyer power is
increased. However, sales of these chocolates are driven by consumer demand and
preferences which are massively influenced by branding and this enhances the negotiating
position of the players vis-à-vis the buyers.

While it is not predominantly the case in India, there are also occasions of large retailers
integrating backwards and offering privately labelled confectionery. A classic example of
this is Kirkland Signature, which is owned by Costco, a retail giant. Of late, in India, the big
supermarket chains such as Big Bazaar, Reliance Fresh etc. have their own privately labeled
products in case of groceries but not in the chocolate confectionery market. But this only
shows that certain buyers have the option to employ this strategy, and by extension
increase buyer power.

Considering all the factors discussed above, buyer power is moderate.

Supplier Power

As mentioned earlier, suppliers of machinery will not be considered for this analysis as they
do not transact with the market players on a regular basis. Only suppliers of key raw
materials such as sugar, cocoa beans and its derivatives will be considered. Sugar suppliers’
power is reasonably small when compared to the supplier power of cocoa suppliers. The
market players have a global supply chain and source their primary raw material, cocoa,
from across the world. The primary level suppliers are usually individual farmers whose
power is low; however, the transactions happen through commodity markets where the
supplier power collectively increases

Cocoa beans of the highest quality are produced in Côte d'Ivoire, Ghana, Indonesia, and
Brazil and these have the highest demand. Therefore, the suppliers in these nations have
significant supplier power. On the other hand, not all manufacturers prefer the highest
quality cocoa and therefore they can also source cocoa beans from other regions and
nations such as Peru, Mexico, Cameroon etc. Clearly, substitutes exist and hence supplier
power is reduced.

Commodity markets are also regulated by laws and the international trade is regulated by
Fair Trade standards thus ensuring that the farmers get a fair price for their produce. It also
ensures that work conditions are not exploitative. With the purchasing power of millennials
increasing, the companies are actively looking to procure raw materials from suppliers who
follow ethical practices to pander to more socially responsible consumers. This also
increases the supplier power.

Climatic conditions are another major influencing factor as the output of the harvest
depends on it. Erratic scenarios such as El Nino are disadvantageous to the farmers and thus
reduce supplier power.

In toto, the supplier power is judged to be moderate.

New entrants

The production of chocolate confectionery involves, roasting cocoa beans, grinding them,
molding the chocolate, packaging etc. To produce this for the mass market involves the
usage of industrial grade machinery and production facilities. In a nutshell, the process of
manufacturing profitably for the mass market is capital intensive. Moreover, sales are driven
by consumer preferences which is in turn dependent on brand recognition and presence.
Due to well established tastes of consumers, market players focus on existing product lines
and ranges as opposed to innovating and developing new products.

As discussed earlier, some of the leading retailers have integrated backwards and have
launched their own product lines. While some of these are direct competitors to existing
players, some of them such as desserts fall under the category of substitutes. Nevertheless,
the possibility of new entrants and threats still exists.

As governments make the standards and regulations more stringent, the operational costs
to adhere to standards increases significantly thus preventing new entrants in the mass
markets.

However, with increasing focus on premium products among young consumers, a

completely new market has opened up in the form of “artisanal” chocolates. The scale of
production is small but the margins in these products are reasonably high. The economy is
also in the stage of growth and hence will invite and encourage new players in the market.

As a whole, the threat of new players to established players is low in the mass market, but
the threat is relatively high in the premium segment.
Threat of substitutes

Majority of the end consumers purchase chocolate-based confectionery for casual snacking
purposes. Substitutes include other desserts, savory snacks, fruits etc.

In case of these substitutes, the savory snacks such as chips and namkeen have lower value
per square foot as they take up lot of shelf space owing to packets being filled with Nitrogen
and therefore retailers and store owners prefer stocking confectionery as they take up
lesser space. In a similar way, fruits are perishable and hence require expensive display units
with refrigeration. This reduces the risk of substitution. However, the sales are driven by
consumer demand and as consumers switch to healthier alternatives, retailers may switch
as well. Moreover, some times, confectionery products are purchased as gifts. For this
purpose, a wide variety of substitutes exist.

Overall, the threat from substitutes is moderate.

Degree of rivalry

Major players in this market have extremely diverse and varied product ranges. This results
in cross competition between products and cannibalization. Moreover, switching costs are
very low for consumers and hence the rivalry is enhanced. Players have to fight tooth and
nail for market share. The top players in this market are Mondelez, Nestle, Ferrero, and
Mars.

The demand for chocolates is very price sensitive and with the challengers and niche players
also offering chocolates at low prices, it only intensifies the degree of competition in the
market. Companies like Mondelez, Mars, and Ferrero are seeking to expand their
distribution network and it would further increase the degree of rivalry.

However, as mentioned earlier, sales are significantly driven by brand recognition and
presence. Therefore, the degree of rivalry can be assessed to be moderate.

Product analysis

The following sections goes into detail about chocolate as a product, the
competition that exists, and the strategies that are followed by market players.

Competition among chocolate confectioners

The current chocolate market concentration in India is shown in Figure 1. The top major
international players like Mondelez, Nestlé, Ferrero, Mars, Hershey and Lindt &
Sprüngli constitute about 75% market share in India, while the others accounting for the
remainder with local players. Amul is having a share of around 1% in the year 2019. This
shows the monopolized nature of market. The top three players in the market are more or
less the same from quite a long time (Tab.1). The major reason for this being the huge
advantage of the global brand name that these players have and the kind of money they
could pump in the business to reap the benefits of economies of scale and retain their
markets. In spite of these advantages the market concentration of the top three players has
been consistently decreasing, where the primary reasons being:

1. Concentration of other international players on Indian markets, eyeing on the vast

potential India has in terms of growth.

2. Local players like Amul, ITC are paving unique ways to penetrate into the markets.

Company’s share since past few years is considered in analysing the firm's performance.
Even though Mondelez arrived in India late, the way it entered the market by acquiring the
Cadbury has transformed it into a market leader (Tab.2).

The major players have a variety of offerings for the consumers. Mondelez’s product range
includes Dairy Milk, Dairy Milk Silk, Perk, Celebrations, Five Star etc. Nestle offers KitKat,
Munch, Milky Bar, Festive Creations etc. The two niche players Ferrero and Mars have
Kinder Joy, Ferrero Rocher, and Snickers, Twix, and Boomer respectively.

We could bucket the firms into following categories-

A. Market Leader

B. Market Challenger

C. Niche Player

D. New Entrant

When we compare the products of Mondelez with those of Nestle we find a one-to-one
product competing with each other. For example, Celebrations vs Festive creations, Milky
Bar vs dairy milk, Five-star vs Bar One, Munch vs Perk. Apart from these, Nestle has products
like Kit-Kat, Classic etc. This shows that Nestle may have less market share but in terms of
product portfolio it is in no way inferior to Cadbury. This diverse product portfolio presents
Nestle as a strong market challenger to Cadbury. There were some ad wars between Nestle
and Cadbury i.e. between the Munch and Perk. This shows how fiercely they compete with
each other in spite of the disparity in market share.

Ferrero India products in chocolate confectionery suggests that they are targeting more
profitable niche markets of children and premium customers with their two flagship
products kinder joy and Ferrero Rocher.

Mars India in spite of having a small bucket of products, has a very unique type of products
with product innovation like bounty and snickers. Its flagship offering snickers have created
a unique customer segment for itself and the market leader Cadbury had to retaliate this
with a recent launch new product named Cadbury fuse.
ITC has recently entered into the chocolate confectionery business with a premium product
named Fabelle and is targeting to become a strong contented in this market.

With the above analysis we conclude the following:

A. Market Leader: Mondelez

B. Market Challenger: Nestle

C. Niche Player: Ferrero and Mars

D. New Entrant: ITC

Marketing strategies

Cadbury

Cadbury has targeted people from all age groups, income levels, religion, and social class
through its products specifically designed to provide optimum value offering to the
consumer groups. For example, Cadbury Temptations and Bournville are meant for high
income households while Cadbury Silk is positioned for younger generation who are high
consumers of chocolate. The brand focused to tap into the emotions of the consumers
which are normally associated with celebratory desserts. The campaigns such as “Kuch
Meetha Hojaye”, “Choose Cadbury”, “Joy Deliveries” have positioned the company as a
symbol of good times, which is meant for special moments in life. The product launches
have been strategically coincidental with Mother’s Day, Christmas, Diwali etc. creating a link
between their brand and these occasions.

Mondelez had been dominating the market through its extensive channels of distribution
making it possible for the consumers to buy their products from pop & moms store to high-
end departmental stores. The two major verticals in this segment are through traditional
grocery stores and modern grocery stores like supermarkets and convenience stores. With
the rise in disposable incomes in the rural areas, Mondelez has shifted its focus to
distribution strategies to achieve maximum penetration in these regions. With the
expansion of the fleet of refrigerated trucks, database of retail stores in rural areas and
supply of the display refrigerators, Mondelez aims to double the number of villages it
currently serves. With the increase of the e-commerce in the country, Mondelez has
established a strategic partnership with Amazon.in, to set up India’s first virtual Chocolate &
Sweet Store.
Nestle

Being the main competitor of Mondelez, Nestlé describes itself as a food, nutrition, health,
and wellness company. The company often stresses on the energy giving aspects of
chocolate, or on the other features of the chocolate - taste in the case of Nestle Crunch, as a
light snack in the case of Nestle Bar One. The company sees their products as healthy snacks
and promotes this through campaigns such as “Have a break, have a kitkat”. Numerous
market researches show that 60% of the purchases are impulsive buys. Nestle views the use
of the wafer in their main products as a point of differentiator. Being a global leader in food
and beverages segment, it is currently trying to leverage its experience to increase its
market share hoping to achieve it through introduction of new products and expansion into
rural territories.

ITC

Diversified conglomerate ITC ventured into chocolate confectionery for the first time in the
year 2016 through a premium brand of chocolates named Fabelle after offering and
experimenting with the same in their premium hotels. The brand is aimed for high end
consumers who enjoys premium chocolates, and also as presents during festivities. It aims
to obtain 10% of its food business revenue from the chocolate business. Although premium
chocolate segment is growing at a significant pace, it launched the chocolates at an
affordable price with smaller packaging. With the kind of strong distribution network which
it already boasts of, it will be a serious contender in the market.

Consumer Behavior

We collected data from primary sources. The questionnaire contained close-ended

questions to capture the demographics and preferences of consumers residing across India.
Currently, the sample size is 74.

Limitations of the research:

- Our sample size of 74 respondents residing in India may not be adequate.

- The accuracy of the collected data cannot be judged to represent the actual market
scenario in case the respondents might not have been telling the truth.
Frequency of purchase

Understanding frequency of purchase is important to determine success of a company in

the market. Our data shows that only about 10% of the consumers buy chocolates more
than once a week and majority of the consumers (about 40%) buy chocolates only once a
month.
Preferred brand

Cadbury, owned by Mondelez is the preferred choice of most of the consumers (57%).
Nestle, Hershey and Lindt are the other preferred choices of about 10-12% consumers. The
list ends with other brands like Ferrero, Mars, Godiva and Amul each being picked by 1-4%
of the consumers.
Location

About 4% of the consumers opt to buy their chocolates online and the rest of them are
almost equally divided between large supermarkets (46.8%) and the local kirana shops
(49.4%).
Size of product

Medium size packs of chocolates (50-60 grams) are the preferred size of about 32%
consumers while 50% of the consumers prefer buying the smaller packs (10-20 grams). The
larger packs (more than 120 grams) are preferred by only 12% of the consumers. Gift packs
are chosen by about 4% consumers.
Type of chocolate

Milk chocolates are preferred by most consumers (58%). It is followed by dark chocolate
chosen by 52% of the consumers while white chocolate was chosen by just 16%.
Reason of purchase

80% consumers chose casual consumption as one of their main reasons of buying
chocolates. About 35% of them consider it a mood enhancer while about 25% buy them to
give as gifts. Around 18% of consumers also buy chocolates for special occasions.
Factors affecting consumer’s purchase

Taste was the most important factor influencing consumers’ choice closely followed by
brand. Price and availability were the next two important influencing factors. Sugar content
was ranked last followed by packaging indicating that consumers are least concerned about
the sugar content or the packaging of chocolates.
Brand/Variant Loyalty

Around 50% of the respondents are likely to try new brands or variants while about 28%
chose to stay loyal to their preferred brands.
Segmentation Targeting and Positioning
Segmentation

The chocolate market in India has been segmented by the above-mentioned companies
based on the following factors.

Demographic:

Age variability is a key determinant of chocolate cravings and consumption. It is well

established that higher consumption activity is observed amongst the younger consumers.
Some researchers have also looked at gender-based differences in chocolate consumption.
Higher incidence of chocolate cravings and consumption among women has been observed
in comparison with men. Further, when one looked at the manifestation of guilt after
consumption of chocolates, women exhibited higher guilt compared to men. Taste was also
found to be a key determinant of choice of chocolates among women compared to men.
(How Sweetness / bitterness of chocolates affect various genders)

Economic:

In India, an emerging economy with rising purchasing power and aspirations, young
consumers tend to spend more on fulfilling their indulgence over and above satisfying
necessities. So, segmenting the markets in terms of high, middle, and low income would be
a viable way as there is huge income disparity in the country. Chocolates have been viewed
as a premium product and is used by the affluent to reward themselves.

Geographical:

Though chocolate is a low involvement category, researches have demonstrated that country
of origin has a significant effect even on such products. In emerging economies such as India
the chocolate brand’s country of origin i.e. whether it is a foreign brand or Indian brand has
affected the consumers’ purchasing decisions significantly. It is found that foreign brands that
adopted an aggressive marketing strategy were better recognized by the consumers and were
more likely to be consumed by them compared to the local brands. It is also found that those
who consume chocolates of foreign brands tend to be higher consumers of chocolates. These
groups also bought chocolates for gifting purposes and self-indulgence was found to be higher
among those who consumed foreign brands compared to those who consumed Indian brands.

Thus, with international trade, exposure to international brands, and global travel, there are
major lifestyle changes taking place in emerging economies. All these findings support the
necessity of exploring the possibility of behavioral segments.

A brief segmentation based on behavior is done on the basis of survey conducted by us with a
sample of 220 people is as follows:

Abundant National (Cluster I): Nearly 70% of the consumers buy consumer chocolates once or
more than once a week. However, this group buys and eats more national (62%) than foreign
chocolates. Among the consumers, 83% said that they buy 1–3 chocolate units at one time.
One of the prime reasons for purchase by the group seemed to be for gifting during occasions
or festivals. Forty percent of the group also said that they buy chocolates as rewards and gifts
for their own selves; 42% stated that they eat chocolates in lieu of a sweet or desert; and 50%
remarked that they eat chocolates as a snack item. Most of them stated that they get
chocolates as gifts from others.

Advertisement Reach: Television commercials, word of mouth, and point of sale promotions
are the major sources of information and influence the product and brand that they will
ultimately buy.

Place of Purchase: The source or place of purchase varied from a mom-and-pop store to a
supermarket.

Conservative Patriot (Cluster II): 74% of the segment buys national chocolate brands. The
frequency of chocolate purchase is lower compared to the innovators, with 57% buying
chocolates between a fortnight and a month; 23% of the group buys chocolates in gift packs;
33% buy one unit; and 34% buy two to three units at one time. The group cited the reason for
purchase as gifts during festivals and special occasions. However, unlike the earlier group, they
do not buy chocolates as self-gifts. They do not often get chocolates as gifts from others.

Advertisement Reach: Their major information source was television commercials, followed
by recommendations (word of mouth) followed by point of sale displays and promotions .

Place of Purchase: They usually buy chocolates from the neighborhood mom-and-pop stores
as well as from supermarkets and department stores.

Global Seekers (Cluster III): 59% of this cluster prefers to have foreign chocolates. The
consumers in this group are heavy chocolate consumers; 76% of them said that they buy
chocolate once or more than once a week. They also said that at one time they buy one to
three units for consumption (67%). Many of them eat chocolates as snacks and as a sweet or
dessert, and buy chocolate as gifts for others as well as for themselves.

Advertisement Reach: Word of mouth and point of sale promotions and displays are the
major source of information.

Place of Purchase: They buy chocolate from duty-free shops as well as from foreign trips and
supermarkets; the frequency of purchase from local neighborhood shops is low compared to
other groups.

Targeting
Cadbury:

Initially Cadbury's target group in India is the kids of the age group of 5 to 10. The kids of this
age group are most inclined towards the chocolates than any other sugar-based confectionery
since it satisfies most of the needs of the kids. Kraft has acquired Cadbury and formed
Mondelez as a chocolate business unit. Since Cadbury has strong brand presence, Mondelez is
selling the products under the same brand. After this take-over, Kraft is targeting children as
well as consumers of various ages. It has created advertising strategies aiming people from
broader segments. Consequently, Cadbury chocolates have increased their percentage of
consumption across consumers of all ages, sexes, cultures, educational backgrounds and
regions. It is now branding itself as a symbol celebration for people across all the ages and
even people with relatively modest income. However, there is some differentiation targeting
as a variety of Cadbury products are available to cater for the individual needs of different
groups of customers. For example, a family block (350g) is available for families. And it also
launched products with smaller units like 10g Five star at INR 5 and 13.5g Perk at INR 5 for
rural market who spend relatively low amount on chocolates but have strong urge to have the
experience.

Nestle

Nestle has targeted people from different age groups through multiple products but have
mostly focused on age group of 15-35 who want to indulge in chocolate and who view
chocolate as a snacking item. Nestle earlier targeted children between age groups of 5-10
years with milky bar but now targets pre-teens with recent ads. They also tried to target
people who are in a relationship irrespective of age group with the new product Alpino. With
different price points for almost all of their products and making them available across the
country they are targeting people from all income groups. However, with the loss of the
market share to Ferrero Rocher, nestle is in process of introducing new premium brands in the
Indian market.

ITC

ITC entered the market aiming for high income group consumers who enjoys premium
chocolates, and can afford a price of Rs 450 per serving regularly. With the success of Fabelle
in the market, ITC is set to launch the products from retail outlets.

Positioning
Cadbury:

Cadbury has maintained its position as a leader over the years in the Chocolate Confectionery.
Some of the key brands of Cadbury in India are Bourneville, Cadbury Dairy Milk, 5 Star, Perk, ,
Celebrations.

Cadbury Dairy Milk is for the kid in you: Cadbury Dairy Milk has maintained a good fan
following among kids in its early days. To appeal among the other older age groups, it has
repositioned itself through its "Real Taste of Life" campaign (1994). This campaign successfully
helped to position Cadbury Dairy Milk (“CDM”) as the chocolate that awakened the little child
in every grown-up.

Cadbury Dairy Milk is for all occasions: With the introduction of the Rs. 5 pack in 1998, CDM
became more affordable and accessible for the masses. The positioning of ''Khaane Waalon ko
khaane ka Bahana Chhayie'' made the consumption of CDM into a joyful social occasion.

Cadbury Dairy Milk is a substitute for Indian sweets: The “Kuch Meetha Ho Jaaye” campaign
was launched in 2004 to seek to increase the consumption of CDM by making it synonymous
with traditional Indian sweets (“Mithai”).
Cadbury Dairy Milk as a dessert: Cadbury aimed to introduce the thought of having a CDM as
a post-dinner “meetha” (dessert). With its new campaign “Khaane Ke Baad Meethe Mein Kuch
Meetha Ho Jaaye'”, In 2010 the “Shubh Aarambh” campaign was launched, with the idea of
drawing parallels with the Indian custom of consuming something sweet before embarking on
something new. With “Shubh Aarambh”, Cadbury took the Dairy Milk journey a step further
into the hearts of its million lovers.

Cadbury GEMs the kid in you: The 2011 campaign "Raho Umarless" celebrates the kid in all of
us. The ad talks about two friends unabashedly exchanging the gifts that they get when they
buy a Cadbury GEMS pack.

Cadbury Fuse: In a mature and crowded confectionery market, Fuse is both a snacking
contline and a chocolate bar. Developed to bolster Cadbury’s position against the consumer
trend towards snacking, its target market is the 16-to-34 age group. Cadbury positioned it as
the perfect indulgent chocolate bar that brightens up dull moments in one’s busy day.
Five Star: Initially, 5-Star denoted togetherness, hunger, energy, and soft chew. However, in
2006, Cadbury has repositioned the 5 Star as a product that allows its consumers a few
moments for themselves in their busy lives. The tagline, “Jo khaye kho jaye” have been
consistent with the tagline.

Perk: It is a brand that believes in bringing fun into the mundane and triggers the quirky side in
everyone. The qualities of Perk, youth, fun, and mischief are brought to light by the "Jiyo
Lightum Light" campaign. Perk engages with consumers who believe in taking life lightly.

Nestle:

Nestle being the follower in the industry not only had head on fight with the market leader
Cadbury in some segments but also launched new products and created new segments in
Indian market.

Nestle Festive Creations as a gift pack: With 5 different variants and 3 different price points in
the range of middle-class consumer nestle festive creations is positioned as an artistic gift pack
for the traditional festive occasions.

KitKat as a snack in a break: With its tagline “Have a break have a KitKat” it is positioned to
align with breaks and as a dessert snack with a unique “finger-tablet” shape with 12 shareable
cubes is positioned as an irresistible snack.

Munch with Munchification: Over the years munch has been positioned as a light chocolate
with wafer and in the recent years have been facing stiff competition from Cadbury’s perk.

Barone: This soft and malty caramel and nougat filling chocolate has been positioned as a high
energy chocolate. However, the chocolate was launched and positioned as a snack way earlier
than the time the Indian consumers started treating chocolates as snacks.

Milky Bar: Milky Bar was the first white chocolate in India with 8% of the milk content in the
recipe. The product led to creation of a new segment in Indian market. Positioning of Milky bar
as a healthy chocolate worked well with parents & children.
ITC:

Fabelle: ITC has positioned Fabelle as a Luxury brand with premium ingredients and highly
decorative packaging. It has not only positioned the product as a premium chocolate but also
as an exquisite chocolate hampers/packs for special occasions and festivals.

Recommended Strategy
Situational Analysis

• Numerous premium products were launched in the market during 2018 and 2019 period and
category players are working hard to gain value share with the innovation and penetration in
new segments.
• Nearly 30% of the population lies between 10 -24 and there is growing trend of health
consciousness among this age group. Consumers are concerned with various health risks
including diabetes, obesity, blood pressure, asthma, and other heart diseases.
• The customers are becoming more inclined towards buying premium and healthy chocolates.
• Further, with introduction of new regulations on labelling and packaging for increasing the
awareness among customers regarding what they are consuming, food and beverages
companies are introducing more healthy products.
• Mondelez is working towards products with 30% less sugar content while Nestle aiming for the
zero-sugar chocolate.
• A recent shift in the consumers choice to dark chocolate, milk bars and fortified energy bars
with high protein content are on demand.
• The Indian protein bar market was at 1.54 million USD market value in 2018, and is estimated
to reach 3.05 million USD by 2024, with a CAGR of 12.36%.
• Plant based protein bars are also gaining popularity among vegetarian consumers and
consumers suffering from allergies. Region-wise, South India dominates the India nutrition bars
market, and the region is expected to maintain its dominance in the near future.

Product

• Cadbury does not have a protein bar with low calorie content product marketed as a healthy
snack in the Indian market. Cadbury fuse which is high in proteins is being marketed as hunger
snack / energy bar but not as healthy snack similar to its rival Mars’ Snickers.
• Other players in the chocolate-based protein bars include Max protein, Trekk-protein bar,
whey protein, yoga bar, MB protein bar.
• From the data in table-3 we can conclude that there is a gap in the Cadbury’s product portfolio
which the company can fulfill by introducing a new product marketed towards the growing
need for healthy snack in the fast-paced life of the Indian youth.

Customer Targets

• Young Individuals (male & Female) who are fitness enthusiasts in the age group of 15-32 and
have a sweet tooth but are concerned about the calorie intake.
• They often feel guilty after having a normal chocolate and restrict themselves to the taste of a
Cadbury
• People from the older generation who have diabetes and gastronomical problems for whom
high protein and high fiber content diet is suggested.
 • Individuals with a fast-paced lifestyle who want a healthy snack to munch on in their busy
schedule but also want to maintain their physique.
• Individuals who despise the existing products because of excessive sweetness in their
perception and wish to consume light sweet products.
• Individuals on a ketogenic diet.

Product/service features

• A product with high protein and fiber content, that still tastes good with no added sugar and
natural sweetness
• Chocolate bars with zero sugar content using Saccharine, Aspartame, or more recently
developed sweeteners from plants such as Stevia.
• Creamy color packaging with nuts, cereals and clear nutritional content. The focus on low/zero
sugar should be very prominent on the packaging.
• Positioned as something which is nutritious and at the same time tasty.
• The variants could include additional features such as nuts, fruits, dry fruits, pumpkin seeds
and “super seeds”

Place

• The product will initially be limited to Metros and Tier1 cities in high to middle class income
areas as the purchasing power is high in these regions and these regions see higher growth of
fitness enthusiasts in recent times.
• The product must be introduced near gyms and health centers as these places are in proximity
with the target consumers.
• Cadbury should also focus on stocking these products in under graduate colleges’ cafeterias as
it provides the company with a captive market.

Pricing

• Initially premium priced at single point for 100 gm bar MRP 60/- and based on response tap
into different price points.
• An alternative would be to start low with penetrative pricing and gradually increase the price
after capturing a good part of the market share.

Promotion

• The easiest way to capture consumers and get them hooked is to offer sample trials in gyms
and fitness centers. This would ensure further word of mouth publicity as well.
• Garnering recommendations by Doctors, pediatricians, trainers, nutritionist, health
ambassadors etc. Promotions by pediatricians could lead this product into becoming a healthy
alternative for very young growing children with their protein needs. This is an entirely new
segment that isn’t targeted by any chocolate company.
• The promotion campaign should also involve advertisements showcasing the healthy nature of
the bar, probably showing a celebrity who is also fitness oriented.
• No usage of Cadbury or Mondelez but acquire a new company an existing player
• An alternative of the above strategy is that product must be sold under a completely different
brand that is dissociated from Cadbury because of its association with high sugar and high
calorie indulgence products.
Exhibits

Fig. 1

Tab. 1

Tab. 2
Fig. 2

Fig. 3

Fig. 4
Fig. 5

Fig. 6
Fig. 7

Fig. 8
 Fig .9

Max
Fuse Snickers protein
Calories 527 477.0 385.1
Fat 33.0g 23.9 14.6
Sugar 42.0g 51.1 5.8
Protein 7.9g 6.8 29.9
Fiber 2.9g 1.7 7.5

Tab. 3