Comparison of Cadbury India and Cadbury UK

The Cadburys Inc has provided us a broader view of the chocolate category. The Cadbury chocolate is able to share with their market insights based on the unparalleled breadth of chocolate experience.

Cadbury has grown from strength to strength with new technologies being introduced to make the Cadbury confectionery business one of the most efficient in the world. The merge in 1969 with the Schweppes and the subsequent development of the business have led to the Cadbury Schweppes to take the lead in the both confectionery and the soft drink market in United Kingdom and becoming a major force in the international market. Today Cadbury Schweppes manufactures its products in 60 countries.

The Cadbury story is a fascinating story of a family business that grew in one the biggest, most lowed chocolate brand in the world. A story that you will remember as the story of ‘ The RealTaste of Life’.

THE LEGEND CALLED CADBURY

• 1824 – In 1824, John Cadbury opened a grocer’s shop at 93 Bull Street, Birmingham in the 1830’s. Among other things, he sold cocoa and drinking chocolate, which he prepared himself using a pestle and mortar.
• 1831 – The Cadbury manufacturing business was born in 1831, when John Cadbury decided to start producing on a commercial scale and bought a four-storey warehouse in nearby Crooked Lane.
• 1842 – John Cadbury was selling no less than 16 varieties of drinking chocolate and 11 different cocoas! The earliest preserved price list shows that you could buy drinking chocolate in the form of both pressed cakes and powder.
• 1861 – John’s health rapidly declined and he finally retired in 1861, handing over complete control of the business to his sons Richard and George.
• 1866 – The turning point for the Cadbury business was the introduction of a new processing technique, resulting in the 1866 launch of ‘Cadbury Cocoa Essence’, the UK’s first unadulterated cocoa.
• 1879 – The business prospered and the factory was moved to Greenfeild a few miles away from Birmingham known as Bourneville.
• 1897 – When Cadbury started making Cocoa Essence they had lots of cocoa butter left over, so they used it to make bars of chocolate!.
• 1905 – Swiss manufacturers were leading the field in milk chocolate, with much better products than their rivals. In 1904, George Cadbury Junior was given the challenge to develop a milk chocolate bar with more milk than anything else on the market.

(SOURCE : http://www.cadbury.co.uk/the-story)

Cadbury’s Dairy Milk Story

In June 1905, Cadbury made its first Dairy Milk bar, with a higher proportion of milk than previous chocolate bars, and it became the company’s best selling product by 1913. George Cadbury Junior, responsible for the development of the bar, has said “All sorts of names were suggested: Highland Milk, Jersey and Dairy Maid. But when a customer’s daughter suggested Dairy Milk, the name stuck.” Fruit and Nut was introduced as part of the Dairy Milk line in 1928, soon followed by Whole Nut in 1933. By this point, Cadbury’s was the brand leader in the United Kingdom. In 1928, Cadbury’s introduced “The Glass and A Half” slogan to accompany the Dairy Milk bar, to advertise the bar’s higher milk content.

(SOURCES : http://www.cadbury.co.uk/products/Dairy-Milk?c2=1459&p=2360)

Cadbury’s Milk Tray – 1915

Boxes of chocolates had been produced at Cadbury since the 1860s. But they were expensive, sold in small quantities and would only have been bought for very special occasions. Milk Tray was different: a chocolate assortment, affordable enough to be an everyday treat. To start with, the chocolates were sold in 5 1/2 lb boxes, which would be put out in trays to sell to customers, which is where the name originated from. One was Milk Tray and one was Plain Tray. Then, in 1916, Cadbury produced a half-pound box of chocolates, followed by a 1Ib box in 1924. By the mid 1930s it was outselling all its competitors.

(SOURCE : http://www.cadbury.co.uk/Home/the-story/milk-tray-is-launched)

The Cadbury Story

Cadbury’s Success Story

In 1824, the U.K. enterprise founded by John Cadbury had the objective of creating the chocolates that could be recognised as the most highest quality driven chocolates. By 1969, there was a merger between the Cadbury and Schweppes, the soft drink giant. Cadbury brands were already famous all around the world.

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Today more than 120 countries enjoy the products by Cadbury, having over 40 brands in the chocolate confectionery. Cadbury also dominated the market as far as U.K. and Australia and that’s why it have been dubbed as ‘The world’s master chocolate makers’.

The Secret of Cadbury’s Success

The secret behind Cadbury’s continuing success is first there’s a careful selection of finest cocoa beans from the western parts of Africa, adding the quality of hazel nuts from Turkey and fine sheets and natural ingredients available to us anywhere. At last, there’s skillful marketing as Cadbury always takes care in the selection and marketing process of the right range of products.

The key ingredients in Cadbury’s success is the selection of the right product, partners, marketing team and strategies, promotion techniques, and finally the employees. Success is based on 3 factors : Quality, Advertising, Value for Money.

ORGANISATIONAL STRUCTURE

Product Profile

Cadbury have a wide range of product line with more than 40 brands of chocolate confectioneries.

The products can be filtered as:

• Christmas Treat
• Bars
• Boxes, tins and bags
• Drinks
• Halloween Treat

Cadbury’s Market Segment

Market place for any product consists of many different segments of customers, each having needs and wants different from each other. The market segments can be defined in numerous ways :

• Demographic Variables (gender, marital status etc)
• Lifestyle of consumers (daily activities, hobbies), the benefits that the customers look for in a product or an occasion on which the product may be consumed.

Cadbury takes in account all the major segments while manufacturing and designing new product range. The company has targetted numerous segments in the same market such as :

• Snatched Break Segment – It refers to the breaks that the consumers use to consume products like chocolates, biscuits etc with tea or coffee. Example Cadbury Perk
• Impulse Segment – The products which are bought without thinking on the spot, no planning is done before the product or the service is bought from the market place. This includes chocolates like Cadbury Dairy Milk.

Cadbury United Kingdom

Market Size

“The six months ended 30 June, Cadbury’s underlying pre-tax profits jumped by 11 per cent to £262m at constant currency. Its total sales jumped by 4 per cent to £2.77bn” Todd Stitzer, chief executive of Cadbury said.

The chocolate tablet confectionery market is CDM market, representing 17%, £ 731 million.

The CDM brand is worth approximately £360 million in the UK.

500 million bars are made each year, in the UK.

By 2007 Cadburys held over 10% of the £731 million UK confectionery market share with 23 types of CDM .

(SOURCE : Leatherhead Food Research, 2009, Cadbury,n.d.)

Gorilla is a British Advertisement Campaign launched by Cadbury Schweppes in 2007 to promote Cadbury Dairy Milk brand chocolate. The 90-second television and cinema advertisement, which formed the centre piece of the GBP 6.2 million campaign, was created and directed by Juan Cabral and starred actor Garon Michael. The campaign itself, which comprised appearances on billboards, print newspapers and magazines, television and cinema spots, event sponsorships and an internet presence, was handled by advertising agency Fallon London.

Threats

Competitive pressures from other branded suppliers (national and global). Aggressive price and promotion activity by competitors – possible price wars in developed markets.

Brands in competition

Value Share

DM (C/Kraft)

[50%-60%]

Galaxy (Mars)

[10%-20%]

Excellence (Lindt)

[5%-10%]

Aero (Nestle)

[5%-10%]

Milka (Kraft)

[0%-5%]

There is a threat of change of the current external environment which is likely to alter the nature of the market. For example change in the taxing regime, Government laws regulating the industry, and other factors which are likely to impact negatively on the industry (SOURCE:Cadbury, 2008).

There exists no brand loyalty in the chocolate market and consumers frequently shift their brands.

Raised health and ethical concerns.

Opportunities

The confectionery market is characterized by a high degree of merger and acquisition activity in recent years. Opportunities exist to increase share through targeted acquisitions.

There is a lot of potential for growth and a huge population who do not eat chocolates even today that can be converted as new users.

Recommendations

Dairy Milk should emphasis on cocoa-butter not milk-butter as the latter melts at higher temperatures and thus building perception of quality.

Price also needs to become more affordable.

Promotional strategies also need to be revised especially in Cadbury UK so as to gain attraction of customers above other famous brands.

People in UK focus more on the packaging and the ingredients and less on the taste. So Cadbury here should make strategies to attract customers by being effective in this area.

Cadbury India is well established and is a leading brand so it should continue with their effective style of advertisements and other promotional schemes.

One new product launch every year might be profitable.

(SOURCE: http://www.marketingmagazine.co.uk/)

Market Scanning

This implies scanning internal and external environment. internal environment consists of 4p’s, external implies scanning environment within which company operates. Analysing 4p’s of Cadbury in comparison with close rival companies

Marketing Mix Elements

Product

Range of fair trade chocolates, Chocolate bar that are made up of more milk, biscuits, ice cream, beverages etc Chocolate and candy bars, baking chocolate, lollipops, cookies, cocoa mix, ice cream toppings etc Chocolates, cereals, The company uses its name to endorse /nestle Easy Whip, fair trade Kit Kat M & M’s, Fair trade Mars, Snickers, Orbit, Extra.

• Place 
• Sold through network of whole sellers, retailers
• Retail outlets like convenience store, grocery chains, brokers, whole seller and retailers
• Only on stores and supermarket
• Retailers and whole sellers
• Price
• Affordable + high quality indulgence
• Prefer to stay with one price policy
• Low prices compared to other chocolates
• Affordable
• Promotion
• TV, Internet, outdoor, radio, emotional appeals in ads
• Brand extension, acquiring famous brands
• Extensive promotional tools, constant product supply
• Intensive ads campaign worth of £600 million.

The company stands better in terms of range of products as it offers more products than other confectionery company. Many brand under Cadbury have been certified as fair trade while only few chocolates have been certified as fair trade for rival companies. With regards to place the company needs to develop direct relationship with supermarkets, grocery chains as what competitor Hershey is pursuing. In terms of price, the company is considered to be slightly expensive than Nestle. The company also lags behind than Mars Inc. in regard to promotion.

Source: Best Global Confectionery Company, Corporate Watch (2010)

Cadbury India

Cadbury began its operations in India in 1948 by importing chocolates. After 60 years of existence, it today has five company-owned manufacturing facilities an 4 sales offices. The corporate office is in Mumbai.

Market Size

The chocolate market for India is growing rapidly. The market size has grown larger in the recent years. Of the 20 tonnes of the market for chocolate accounting for around 400 crores, out of which Cadbury’s share is 70% which is followed by Nestle accounting for about 20 %, then Amul having 5% and rest with the minors. The major competition is between the Cadbury and Nestle.

At present, the existing Cadbury Dairy Milk has a market share of 35 per cent.”We already have 70 per cent of the Rs 2,000-crore (Rs 20-billion) chocolate market in India and now with the retail environment changing, Silk will help us tap into a wider audience,” says Cadbury’s executive director, marketing and international business, Sanjay Purohit.

Threats

• There may be a threat of entry of other products in the market which will increase the level of competition in the market. There are other companies which are likely to introduce the same products in the market once there is success of the initial product.(Cadbury, 2008).
• Social changes like rising obesity and consumers obsession with calories counting.( Department of Health, 2005)
• Globalisation may bring in better brands for upper end of the market and it may loose market share but will remain brand leader.

Opportunities

• Increasing gifts cultures in India.
• Substitute to “Mithais” with higher calories/cholesterol.
• To respond to changes in consumer tastes and preferences – healthier snacks with lower calories need to be developed.
• Internet usage in India has been growing at a very high rate and majority of the urban population is connected to the interest. Since there is not company that is currently using online sales, the company will look into using this strategy to boosts its sales (Laura, 2008).
• Brand ambassador Amitabh Bachchan for advertising there new products. As Cadbury became a part of Kraft’s Foods, its distribution network is increased.

Positioning

• Cadbury dairy milk made position of its product chocolate not only in the minds of consumers but also in the market. It uses various promotional techniques to make position in the minds of customers.
• Cadbury have good quality, more features like unique taste, design, logo and other attributes as compared to its competitors.
• Cadbury dairy milk is superior in quality, continuous improvements. Its price is reasonable and affordable by all customers.
• Good use of advertising is used especially the use of slogans to position a positive concept in customer’s minds.
• Cadbury’s reputation is built upon quality; a commitment to continuous improvement will ensure that this promise continues to be delivered.
• The company’s punch line for advertising Cadbury dairy milk “REAL TASTE OF LIFE” itself depicts how well the product is positioned in the market. The product shows the purity of milk, taste.

PEST Analysis

• P: There are no restrictions on the pricing of the products by the political institutions that is the pricing of the product is decontrolled.
• E: 1) There has been an increase in the per capita income depicting high disposable income. 2) There has been an increase in demand due to the growth of the middle class. 3) Better penetration due to low production costs.
• S: 1) Increased demand due to increasing gift culture. 2) Increased substitute demand against the Indian Mithais.
• T: The company has fulfilled the international standards.

DATA ANALYSIS AND FINDINGS

Data was tabulated manually and was also analysed manually. Excel was used to make graphs and pie charts.

Simple average method was used to compute the data and to get to the answers of the questions :

• 26 % of the people are not interested in eating the chocolates and 74 & are eating chocolates.
• 60 % people prefer the Cadbury brand chocolates after that of Nestle, Mars, Lindt etc.

Most of the people buy chocolates from the super stores and after that from retail outlets and movie halls.

54 % of the people are not aware of any brand campaign GORILLA whereas 46% are aware. This shows that the company needs to advertise more in the market.

Dairy Milk is the most consumed chocolate product from Cadbury. 90% shows that the Cadbury brand chocolates are easily available in the market.