Cadbury Is A Leading Global Confectionery Company Marketing Essay

Introduction

Cadbury is a leading global confectionery company with an outstanding portfolio of chocolate, gum and candy brands. The company employs around 50,000 people and has direct operations in over 60 countries, selling their products in almost every country around the world. The company creates brands people love, brands like Cadbury, Trident and Halls. The company heritage starts back in 1824 when John Cadbury opened a shop in Birmingham selling cocoa and chocolate. Since then Cadbury have expanded the business throughout the world by a program of organic and acquisition leg growth. On 7 May 2008, the separation of Cadbury confectionery and Americas Beverages business was completed creating Cadbury plc with a vision to be the world’s Biggest and Best confectionery company.

Mission Statement

“Cadbury means quality” this is the company promise. The company reputation is built upon quality; the company commitment to continuous improvement will ensure that the company promise is delivered. Cadbury has established itself as a company of fairness and integrity, which always attempts to operate as a socially responsible business.

Value

Performance

Cadbury is passionate about winning. The company competes in a tough but fair way. The company is striving, hardworking and makes the most of the abilities. The company is prepared to take risks and act with speed.

Quality

Cadbury put quality and safety at the heart of all of the activities such as product, people, partnerships and performance.

Respect

Cadbury genuinely care for the business and the colleagues which like listen, understand and respond. The company is open, friendly and welcoming. The company embraces new ideas and diverse customs and cultures.

Integrity

Cadbury always strive to do the right thing. The company does the business with honesty; openness and being straight forward characterize the way.

Responsibility

Cadbury take accountability for the social, economic and environmental impact. In this way the company aims to make the business, partners and communities better for the future.

Cadbury Business Principles are the code of conduct of the company and also take account of global and local cultural and legal standards. They confirm the company commitment to the highest standards of ethics and business conduct. The core purpose of the company is creating brands people love. The core purpose captures the spirit of what the company is trying to achieve as a business.

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Market Share

By participant, the market is relatively fragmented, with the five largest confectionery companies accounting for around 40% of the market. There are a large number of companies which participate in the markets only a regional or local basis. Cadbury compete against multinational, regional and national companies.

The graph shows that Cadbury is the second highest of the total confectionery in the market share. Halls is the largest brands in candy of Cadbury. Cadbury have number one and number two confectionery market position in 20 of the world’s 50 largest confectionery markets by retail sales value.

Financial statement

The graph shows the financial situation of Cadbury from 2006 to 2009. As we can see in the graph, the revenue is reached ¿¡5975 million is year 2009 which is slightly increase about 5% from year 2008. In operating income, year 2009 is the highest compare to previous year which is ¿¡507 million. Last but not least, year 2009 having 9% of the operating margin which is slightly increase from year 2008. As a conclusion, In year 2009, the performance is pretty well compare to the previous year due to there a keep increase since year 2006 to 2009.

PESTLE implication

Political

The political deals with government influence. The main laws that will affect Cadbury’s are the consumer protection law. These are the laws and the recent changes in food labeling. The food labeling shouldn’t be too influence as Cadbury’s has label all their goods properly to begin with. Change in manufacturing law will also greatly influence Cadbury’s as the company may have to change the way to product the cereal. This could lead to the introduction of new mechanical equipment being required or more thorough checks on the current equipment. If new equipment is required if could prove to be very expensive.

The Weight and Measures Act, this act should not affect Cadbury’s since the company have all the equipment and scales used should already be at that of the highest standard.

The Trade Description Act, this again should not affect Cadbury’s due to all the labeling on the products should be correct and thorough giving all the ingredients.

The Sale of Good Act, these state that Cadbury’s should not mislead the consumer. These are currently three conditions. If the government was to introduce a few more it could prove to affect Cadbury’s.

Economic

The state of the economy is the main factor. It the country was to go into recession the consumer spending would also drop due to the unemployment. The recession would bring down the sales of a lot of goods mainly the expensive things, which are not necessity. The current economy is well. The interest rates are low and consumer spending is very high. Other economic factor that could affect Cadbury’s launching a product would be a rise in inflation. This is a rise in price over time.

Social

If the population size decreased then Cadbury’s be less people to buy the products therefore less profit. · If peoples lifestyles changed. For example, nowadays more people wanting to get fit and lose weight, then they will stop eating chocolate and spend their money on gym memberships and others. This means that Cadburys profits will decrease.

Technological

An increase in capital expenditure will affect Cadbury’s. For example, more up to date equipment would mean that the goods where produced quicker and cheaper but would also result in job losses. In research and development, keep developing new products to keep up with competition and customer needs.

Legal

More legislation in place to make sure that the workplace is safe and the worker is better protected. Expensive costs to Cadburys to implement

Environment

Cadbury launched a corporate social responsibility Web site called DearCadbury.com, which provides consumers information on ethical sourcing, responsible consumption and the environment. The site features Cadbury’s 2007/08 Corporate Responsibility and Sustainability report, which revealed that the company has reduced carbon emissions almost 4 % to date; Cadbury is aiming for a 10 % reduction by 2010. As part of Cadbury’s “Purple Goes Green” program, the company committed to a 50 % absolute reduction in carbon emissions by 2020. Cadbury also reported that it has met its 2007 goal of reducing water use by 10 %

Competitor’s situation and SWOT analysis

Cadbury’s major competitors are Thorntons, Lindt, Lindor, Nestle, Master food (Mars) and others. They are competing directly with Cadbury. Nestle is one of the Cadbury’s main competitor in the market.

Nestle is one of the world’s largest food manufacturer, Nestlé’s headquarters in Switzerland and based in 200 countries worldwide. It is renowned as the world’s leading nutrition and health based company. Nestle grows is product line through innovation as well as renovation and maintains a balance on its geo-environmental activities and product lines. They have 253,000 employees around the world.

Cadbury’s SWOT

Strengths

The largest global confectionery supplier, with 9.9% of global market share.

High financial strength

Strong manufacturing competence, established brand name and leader in innovation.

Advantage that it is totally focused on chocolate, candy, chewing gum, unique understanding of consumer in these segment.

Successfully grown through its acquisition strategy.

Weakness

The company is dependent on the confectionery and beverage market.

Other competitors have greater international experience.

Opportunities

Expand into new markets.

Increase share through targeted acquisitions.

Key to survival within the FMCG market is increasing efficiency and reducing costs.

Innovation Is key driver.

Threat

Worldwide, there is an increasingly demanding cost environment, particularly for energy, transport, packaging and sugar.

Competitive pressure from other branded suppliers.

Social changes.

Nestlé’s SWOT

Strengths

Globally recognized as one of the largest and powerful food producer, covering almost every country.

Quality is a vital element regarding nestle products.

Strong internal growth and emphasis on innovation internally.

Powerful brand positioning in the consumers mind.

The decentralized culture in the organization encourages employees.

Weakness

The immense diversification portfolio of the firm makes it impossible to run every division smoothly.

Retailers do not get set high margin to increase more in sales.

Transportation as well as storage problem.

Opportunities

Invest in snacks that would further diversify its product.

Provide incentives to the retailers to increase sales volume.

Open café that would exclusively provide Nestle products.

Middle class share in most of the economies are growing much larger.

Threats

Pollution of product should be regarded strictly.

The company has not so pretty history with the FDA.

Tough market with a tougher competitor for gaining market share.

Market is quite mature and the competitors specialize in a certain product that can hit hard on Nestle.

In comparison of Cadbury’s SWOT and Nestlé’s SWOT,

Market objective

Financial objective

Specific

Growth of revenue in UK

Increase total confectionery share gain

Measureable

To growth 5% of revenue compare to previous years

Growth in global market share and increase share in the UK by 50 bps

Achievable

Carry out a number of advertisements in the market and online.

Realistic

Timely

Marketing strategy

Product

Cadbury dairy milk is made from real chocolate. The ingredients for the chocolate are cocoa butter and there is a glass and half full cream daily milk in every 200 grams of Cadbury daily milk chocolate. Cadbury purchase 65 million liters of fresh milk each year to make Cadbury daily milk chocolate.

Price

Price is very important in the marketing mix. The price changed for a chocolate bar can be affect whether a consumer will buy it and the level of sales can determine whether or not Cadbury Schweppes will make a profit. Price is also can be affected by factors such as the state of economy, what competitor are doing. The stage reached in product life cycle and above all what price the market will accept. Form the marketing point of view this is what matters.

Place

Cadbury products are produced at the chocolate factory in Bourneville in Birmingham. After the chocolate is produced, it will go through all quality check and transported to the stockrooms. The following, Cadbury sells the products to shops that deal with beverage and confectionery such as convenient store, super store, petrol station, and others. This kind of distributions can make consumer easy to find the product. Cadbury produces chocolate for more than 200 countries so that they have a chance to enjoy it as well and make profit. Because of this, Cadbury have a wide range of consumer around the world.

Promotion

The purpose of promotion is to communicate directly with potential or existing customer, in order to encourage them to purchase dairy milk and recommend it to others. There is various ways to promote the product such as TV advertisement, banner on the internet, magazine and newspapers.

Forecast and Implication

3-years forecast and budget

2009

2010

2011

2012

Sales

5975

6273.75

6587.44

6916.81

Cost

3210

3370.5

3539.03

3715.98

Profit

509

534.45

561.17

589.23