Cadbury Integrated Marketing Communication

Executive Summaryonal company which manufactures a variety of cocoa products which are known and sold throughout the world. This paper gives an Integrated Marketing Communication plan that is aimed at promoting the forthcoming rollout of a new premium dark chocolate by Cadbury in the Australian market. The paper commences by looking at Cadbury as a whole-its current marketing strategy and positioning in the global confectionary industry before narrowing down to Australia. The marketing and communication plan touches on issues like; the implication of launching the new premium chocolate product in its Australian market, the different sizes and unique packaging together with the specific promotional strategies. The paper also analyzes market competition and how to combat the already launched Rondnoir dark chocolate product by Ferrero’s (a competitor) in October 2009. Various marketing ingredients will also be analyzed and some will be recommended due to their advantages in boosting the new product market position. Finally there is an implementation plan on how the new product will be distributed to the various outlets in order to reach the primary target market of middle to upper class people over the age of 25. Cadbury’s competitive positioning will be based heavily on its reputation in the marketplace with current products. Its comparative taste and quality ingredients will also be a positioning advantage. The new product will be exclusively distributed through all major supermarket chains, gift stores, delicatessens, specialised coffee shop franchises and major department stores.

Introduction

Cadbury is the world leading confectionary company with an excellent portfolio of gum, candies, and of course chocolates. The company is reputed for creating brands like Cadbury, Halls and Trident. The company started back in 1824 by John Cadbury, since then the company has expanded into a multinational. Cadbury’s vision is to be the ‘world’s biggest and best confectionary company’. The company has over 35,000 suppliers (direct and indirect) and employs over 50,000 people globally, it is a complex organisation. The company’s units’ focuses on commercial operations these are in: The US, Britain, Ireland, South America, Middle East and Africa, Europe, Asia and the Pacific region. The business model involves a number of category-led operations: Commercial, Supply Chain management, Science and Technology, Human Resources and Corporate affairs, Strategy, legal and secretariat, Finance and IT. This particular structure is well integrated to deliver the Group’s commercial objectives and global growth.

Consumer analysis

Cadbury marketing strategies and processes are focused towards being the best in performance, while keeping in touch with the regions’ commercial operations. The global confectionary market is large, expanding and with attractive dynamics. Cadbury is estimated to have a retail value of about $141 billion. The main category is chocolate representing more than half of the world’s confectionary market. Globally, the confectionary market is growing at the rate of 5 per cent more than any other packaged foods. Developed markets account for over 67 per cent of the global market. The most popular ranges are: Cadbury Dairy Milk, Eclairs, Halls, Trident, Flake, Clorets, Dentyne, Hollywood, Crème Egg, Stimorol and Bubbaloo.

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Cadbury’s has managed to create the right range that is available to all and for all. Cadbury is a market leader in many markets in one or two categories. In Australia, their strength is in chocolate and candy. Chocolate remains the most popular category with consumers seeking a particular taste in each of the markets.

Cadbury Australia SWOT analysis

Internal environment

• (S)trengths

Cadbury is the largest confectionery company with a market share approximated at 10 per cent. The company also enjoys a strong financial position. In addition, Cadbury is competent in its manufacturing process due to a strong brand name and leadership in innovation. The company’s manufacturing focus on chocolate, candy, and chewing gum has helped the company to understand unique consumer segments. The company’s acquisition strategy since 2003 when it acquired Adams has helped it to expand to new markets.

• (W)eaknesses

Cadbury solely depends on confectioneries and beverages for its revenues while some of its main competitors such as Nestle have diversified their product portfolio. This generates more profits that can be ploughed back and/or invested in R&D. other competitors have even stronger supranational experience, Cadbury on the other side has majorly been strong in Europe. Cadbury must continue to enhance its presence and understanding of emerging markets in order to remain competitive.

External environment

• (T)hreats

Globally, environmental costs are rising especially costs of energy, packaging, cocoa, packaging, transport and sugar. Thus the company should locate its global supply chains at low cost areas. Pressure from competitors especially branded suppliers leads to higher costs of advertising. This is manifested in terms of price wars and aggressive marketing. In addition to this, societal changes due to increased cases of obesty and calorie couonting have also affected the demand for Cadbury products.

• (O)pportunities

The confectionery market is well known for a high the propensity to merge or acquire, this is an opportunity for Cadbury to increase its market share through acquisitions. There are also new markets in highly populated countries such as China and India where demand for confectionary is increasing. In order to survive in the FMCG market, cost minimization is very important. Cadbury has the ability to further reduce costs through outsourcing, increasing supply chain efficiency, and prudent investment in R & D. innovation is important to responding to consumer preferences. This can be achieved by the production of sugar free gums and Cadbury premium chocolate for treats and enjoyment.

Industry Analysis

Cadbury operates three Australian confectionery factories; two are in Melbourne, one in Hobart, Tasmania, and one in Dunedin, New Zealand. The premium chocolate market is quite lucrative in Australia and Cadbury wants to lift its image from just an ‘everyday’ chocolate to one that allows the consumer to spoil themselves and the ones they love. The product can also be used as gifts to impress. The primary target market is middle to upper class people over the age of 25.

Competitor analysis

The new bite-sized chocolates is being introduced to counter the Rondnoir dark chocolate launched by Ferrero in 2009. Since the product is targets middle and upper class consumers who are over 25 years it will feature a variety of fillings and packaged uniquely.

Integrated Marketing Communication plan (IMC)

Integrated Marketing Communications is defined as, the use of different media channels to optimize the effectiveness of marketing communications programmes (Schultz et al., 1993). For Cadbury, brand communications is a reflection of implied values and the company’s image consistently. The use of IMC has gathered popularity because of the observation that marketing communication offers the “only sustainable competitive advantage of marketing organizations” (Schultz et al., 1993, pp. 47). Since the organzation has various forms of communication at its disposal, any of these can be used, the end goal being to influence the behavior of targeted segment (Shimp 1997, pp. 13). As Percy et al. posited that “people generally look at all marketing communications as advertising” (2001: v). Increased brand marketing has made the advertising medium less important as compared to the brand personality.

Indeed, marketing strategists have argued that placing a paid-for ad in a mass medium has less impact than a well integrated product placement in a high-profile sporting event sponsorship deal or even a movie. Integrated advertising programmes utilize the different qualities of media in a communications blitz that is carefully designed to project consistent brand values irrespective of the communication source encountered by the consumer. The use of marketing communications (especially information technologies) has been linked with the growth of global business. Global brands are now crossing borders and are resonating with consumers of more countries. Mass media, above-the-line (ATL) advertising is regarded as a key strategic constituent of marketing communications. It is the type of communication that if used well can transform the fortunes of companies, create new brands and revolutionize the entire markets. Although most managers are still holding onto this view, there is a strong case for advertising from an integrated perspective with the recognition of the fact that brand communications leads in the practical enhancement of integrated creative implementations and media strategies.

Market target

The primary target market is middle to upper class people over the age of 25. Its competitive positioning will be based heavily on Cadbury’s reputation in the marketplace with current products.

• Point of difference

The bite-sized chocolates will feature a variety of fillings and boxed uniquely. It will be upmarket from Cadbury’s current ‘Milk Tray’ boxed chocolate range.

• Positioning Strategy

The entire positioning strategy can be summarized as follows;

The lovers of chocolate are now able to enjoy a premium taste that has been carefully designed to give the highest level of satisfaction that no other chocolate has ever reached. This is not just chocolate, it is an instant message to lovers with a sweet ‘I love you’ on their tongue.

Communication Objectives

Product awareness: To achieve a minimum 25% trial rate within the aggregate target market within the first 12 months of the launch.

Interest: To achieve a re-purchase cycle of not less than one month among a minimum of 50% of those who have trialled the product.

Market penetration: Achieve an average 1% market share of the category segment nationally within the first 12 months of launch.

Evaluation: Out of the 40% of consumers who are interested in the new premium dark chocolate, a survey questionnaire is prepared for them to compare it to Ferrero’s Rondnoir dark chocolate.

Trial: After evaluating the new premium dark chocolate, consumers should select it over other premium chocolates at least 20% of the time because of the unique packaging.

Adoption: the new premium dark chocolate should have an adoption of 75%, which will mean the consumer will buy the premium chocolate and will have given a positive feedback.

Communication Mix elements

Cadbury’s introduction of the new dark chocolate will involve the use of both push and pull promotional strategies in order to create and increase brand awareness. This is because the new premium chocolate is at the introductory stage of the product life cycle. Along the same line, it is believed that if we can package our products so as to be something like a gift can lead to a better market position of our new premium dark chocolate.

The distribution channels will include supermarket chains, gift stores, and delicatessens as well as specialized coffee shop franchises and or not limited to major departmental stores.

The feedback found from the large consumer market should be tested and the research elements applied to other point of contact like the letterhead, logistics, packaging and several others in order to complete the integrated marketing communication cycle. The IMC involves integrating all promotional tools in order to achieve harmony. They all should speak together with one voice.

The direct mail, sales and advertising departments within the company can help each other via data integration. To achieve this, a marketing information system should be put up in place to collect and share data that is relevant across the different company departments (Axis, 2009).

Advertising

It is important to note that this campaign may need bulk of marketing money on creation and creation of adverts and may necessitate a large budgetary allocation for this campaign.

In order to reach clients during the campaign, considerations are to be given to both the online and offline campaigns and more is to be allocated to the offline marketing. TV and Radio adverts are to be structured to give an impression of satisfaction to the consumer and should give them a very good reason to leave their current brands and consider taking a ride on the new premium chocolate made by Cadbury (Global, 2004)

References

General managerial texts on advertising and promotion

Pickton, D. and Broderick, A. (2003) Integrated Marketing

Communications. London: Pitman Publishing.

Shimp, T.A. (1997) Advertising, Promotion and Integrated Aspects of

Marketing Communications. Florida and Texas: Dryden Press.

Managerial introductions to advertising

Jones, J.P. (1999) The Advertising Business. New York: Sage.

Wilmshurst, J. and Mackay, A. (1999) The Fundamentals of

Advertising. Oxford: Butterworth Heinemann, ISBA.

Cultural and historical studies on advertising

McFall, L. (2004) Advertising: A Cultural Economy. London: Sage.

Nava, M., Blake, A., MacRury, I. and Richards, B. (eds) Buy This

Book. London: Routledge.

Studies of consumption

McCracken, G. (1990) Culture and Consumption: New Approaches to

the Symbolic Character of Consumer Goods and Activities.

Bloomington, IN; Indiana University Press.

Szmigin, I. (2003) Understanding The Consumer. London: Sage.

Studies of marketing and signification

Barthes, R. (2000) Mythologies (Translation Jonathan Cape, 1972).

London: Vintage.

Umiker-Sebeok, J. (ed.) (1997) Marketing and Semiotics. Amsterdam:

Mouton de Gruyter.

Jobber, (2006), Principles and Practices of Marketing, 3rd Edition