Cadbury ME Project Report Final

7/31/2019 Cadbury ME Project Report Final

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Managerial Economics:

Project Report on

Cadburys India


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Date: 5th September, 2011

Company Overview

Cadbury India Ltd. is a part of the Kraft Foods Group. Cadbury is a leading

global confectionery company with an outstanding portfolio of chocolate, gum

and candy brands. We employ around 50,000 people and have direct operations

in over 60 countries, selling our products in almost every country around the

world.

In India, Cadbury began its operations in 1948 by importing chocolates. After

60 years of existence, it today has five company-owned manufacturing facilities

at Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi

(Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkota and

Chennai). The corporate office is in Mumbai.

Our core purpose "creating brands people love" captures the spirit of what we

are trying to achieve as a business. We collaborate and work as teams to convert

products into brands. Simply put, we spread happiness!


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Currently Cadbury India operates in four categories viz. Chocolate

Confectionery, Milk Food Drinks, Candy and Gum 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! Our flagship brand Cadbury Dairy

Milk 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 our main product is Bournvita - the leadingMalted Food Drink (MFD) in the country. Similarly in the medicated candy

category Halls is the undisputed leader. We recently entered the gums category

with the launch of our worldwide dominant bubble gum brand Bubbaloo.

Bubbaloo is sold in 25 countries worldwide.

Since 1965 Cadbury has also pioneered the development of cocoa cultivation inIndia. For over two decades, we have worked with the Kerala Agriculture

University to undertake cocoa research and released clones, hybrids that

improve the cocoa yield. Our Cocoa team visits farmers and advises them on the

cultivation aspects from planting to harvesting. We also conduct farmers

meetings & seminars to educate them on Cocoa cultivation aspects. Our efforts

have increased cocoa productivity and touched the lives of thousands offarmers. Hardly surprising then that the Cocoa tree is called the Cadbury tree!

Krafts Global Reach

Annual revenues of $ 49.2 billion.

More than 25% of Global revenue from emerging markets.

Number 1 in global confectionery.
http://www.cadburyindia.com/brands/choco1.asphttp://www.cadburyindia.com/brands/choco2.asphttp://www.cadburyindia.com/brands/choco3.asphttp://www.cadburyindia.com/brands/choco8.asphttp://www.cadburyindia.com/brands/choco4.asphttp://www.cadburyindia.com/brands/bev1.asphttp://www.cadburyindia.com/brands/conf1.asphttp://www.cadburyindia.com/brands/choco1.asphttp://www.cadburyindia.com/brands/choco2.asphttp://www.cadburyindia.com/brands/choco3.asphttp://www.cadburyindia.com/brands/choco8.asphttp://www.cadburyindia.com/brands/choco4.asphttp://www.cadburyindia.com/brands/bev1.asphttp://www.cadburyindia.com/brands/conf1.asp


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Number 1 in global biscuits.

More than 50% of global revenue from snacks and confectionery

Cadburys Brand Portfolio

11 brands with more than $1 billion in revenue

70+ brands with more than $100 million in revenue

40+ brands over 100 years old

80% revenue from #1 share positions

Market Share

Cadbury plc (NYSE:CBY) is confectionery company that makes 7.3% of the

world's chocolate (by dollar volume), 27% of the world's gum, and 7.4% of its

candy.

CBY is less reliant on the holiday season (which includes Halloween and

Christmas) than its competitors Hershey's, Mars, andNestle.Like its confectioner competitors, CBY suffers from rising commodities

prices for ingredients such as corn, sugar, and milk. From 2006 to 2007, CBY

raw material costs increased 10.9%, causing CBY operating margins to decrease

from 14.4% to 13.2%.[2] In response, management says it will reduce 15% of its

manufacturing and distribution centers by 2011 and has divested its Americas

Beverages segment.

[3]

Management says the divestment will save CBY anestimated $66 million in 2008.[4]
http://www.wikinvest.com/wiki/Confectioneryhttp://www.wikinvest.com/wiki/Chocolatehttp://www.wikinvest.com/wiki/Hershey_Foods_(HSY)http://www.wikinvest.com/wiki/Nestle_(NSRGY)http://www.wikinvest.com/wiki/Commodities_priceshttp://www.wikinvest.com/wiki/Commodities_priceshttp://www.wikinvest.com/wiki/Corn_priceshttp://www.wikinvest.com/wiki/Sugar_priceshttp://www.wikinvest.com/wiki/Dairy_priceshttp://www.wikinvest.com/stock/Cadbury_plc_(CBY)#_note-0http://www.wikinvest.com/stock/Cadbury_plc_(CBY)#_note-1http://www.wikinvest.com/stock/Cadbury_plc_(CBY)#_note-2http://www.wikinvest.com/wiki/Confectioneryhttp://www.wikinvest.com/wiki/Chocolatehttp://www.wikinvest.com/wiki/Hershey_Foods_(HSY)http://www.wikinvest.com/wiki/Nestle_(NSRGY)http://www.wikinvest.com/wiki/Commodities_priceshttp://www.wikinvest.com/wiki/Commodities_priceshttp://www.wikinvest.com/wiki/Corn_priceshttp://www.wikinvest.com/wiki/Sugar_priceshttp://www.wikinvest.com/wiki/Dairy_priceshttp://www.wikinvest.com/stock/Cadbury_plc_(CBY)#_note-0http://www.wikinvest.com/stock/Cadbury_plc_(CBY)#_note-1http://www.wikinvest.com/stock/Cadbury_plc_(CBY)#_note-2


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Market Share[1]

CompetitionCadbury

plc(CBY)

MarsNestle(NSRGY)

Wrigley(WWY)

Hershey(HSY)

Ferrero

Global Confectionery Market 10.1% 8.9% 7.7% 5.5% 5.5% 4.2%

Chocolate 7.3% 14.7% 12.5% -- 8.3% 6.8%

Gum 27.0% -- 0.1% 34.5% 1.3% --

Candy 7.4% 2.8% 2.9% 2.2% 2.7% 1.5%

THE INDUSTRY SCENARIO

Till the eighties, the chocolate market was small and the product category itselfwas fuzzy. In the eighties, Cadburys - the virtual monopolist - had decided tofocus its efforts on making chocolates a distinct category with an identity of itsown. And the marketer had sharply positioned its product at children to do that.Hence, chocolates bore an Only for kids tag, and kept adults at bay.

By the end of the eighties, Cadburys still ruled the roost with over 80 percent

market share. And though several brands - like Amul and Campco - tried tobreak into the market, none of them had succeeded in shaking the leaders grip.In fact, Cadburys had become a brand virtually generic to chocolates. Thenchocolates were used to reward and reinforce positive behaviour and hence werecategorised as a luxury reserved for special occasions. This was, a stark contrastto the west where chocolates were snacked on, eaten as mini meals or just tosuppress pangs of hunger.

But constant working by players like Cadburys (re-launch of Cadburys Dairy

Milk targeting adults and as a casual any-time buy) and Nestle towards
http://www.wikinvest.com/wiki/Cadbury_plc_(CBY)http://www.wikinvest.com/wiki/Cadbury_plc_(CBY)http://www.wikinvest.com/wiki/Cadbury_plc_(CBY)http://www.wikinvest.com/wiki/Nestle_(NSRGY)http://www.wikinvest.com/wiki/Nestle_(NSRGY)http://www.wikinvest.com/wiki/Wm._Wrigley_Jr._Company_(WWY)http://www.wikinvest.com/wiki/Wm._Wrigley_Jr._Company_(WWY)http://www.wikinvest.com/wiki/Hershey_Foods_(HSY)http://www.wikinvest.com/wiki/Hershey_Foods_(HSY)http://www.wikinvest.com/wiki/Cadbury_plc_(CBY)http://www.wikinvest.com/wiki/Cadbury_plc_(CBY)http://www.wikinvest.com/wiki/Cadbury_plc_(CBY)http://www.wikinvest.com/wiki/Nestle_(NSRGY)http://www.wikinvest.com/wiki/Nestle_(NSRGY)http://www.wikinvest.com/wiki/Wm._Wrigley_Jr._Company_(WWY)http://www.wikinvest.com/wiki/Wm._Wrigley_Jr._Company_(WWY)http://www.wikinvest.com/wiki/Hershey_Foods_(HSY)http://www.wikinvest.com/wiki/Hershey_Foods_(HSY)


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exploding the myth that chocolates are meant for children only, has resulted inthe segment booming.

Trends in the Industry:

With socio-economic changes rapidly taking place, the young and not soyoung population will lead a new life style and chocolate eating isdefinitely going to be widespread and acceptable.

In the industry, both population and family incomes as well asurbanization are on the increase.

There has been a significant growth in the middle class, with 5.8 millionpeople having upgraded to the quoted middle class.

There is quantified data on FMCG usage having increased (NRS-VI &IRS98 figures)

Marketers in the industry are looking forward to a much higher growth rate, asIndias per capita consumption of chocolates is only 15 Gms. Versus 6 Kg in thewest.

The Indian Chocolate market can be sliced into four parts.

1. Moulded Chocolate Segment - comprising slab chocolates like Dairy milkchocolates, etc. These are made by pouring the ingredients into moulds.

2. Countline Segment - comprising bars like 5 star, Bar One, Perk, Kit Kat,etc. These have ingredients other then chocolate and are usually Barshaped, making for chunky bites.

3. Choco-Panned Segment - comprising chocolate forms like Butterscotch,Nutties, Tiffins, etc. Panned variety has different cores/centers which arecovered with a layer of chocolate.

4. Sugar-Panned Segment - comprising chocolate forms such as Gems,Chocolate eclairs, etc. These generally have a sugar coating on theoutside.


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Cadbury Products, product group and product range

Astros

Boost Bournville Brunch Bar

Cake Bars Caramilk Caramello Koala Cherry Ripe Chews Chomp
http://en.wikipedia.org/wiki/Astros_(chocolate)http://en.wikipedia.org/wiki/Boost_(chocolate)http://en.wikipedia.org/wiki/Bournville_(chocolate_bar)http://en.wikipedia.org/wiki/Brunch_Barhttp://en.wikipedia.org/wiki/Cadbury_Caramilkhttp://en.wikipedia.org/wiki/Caramello_Koalahttp://en.wikipedia.org/wiki/Cherry_Ripe_(chocolate_bar)http://en.wikipedia.org/wiki/Chomp_(chocolate_bar)http://en.wikipedia.org/wiki/Astros_(chocolate)http://en.wikipedia.org/wiki/Boost_(chocolate)http://en.wikipedia.org/wiki/Bournville_(chocolate_bar)http://en.wikipedia.org/wiki/Brunch_Barhttp://en.wikipedia.org/wiki/Cadbury_Caramilkhttp://en.wikipedia.org/wiki/Caramello_Koalahttp://en.wikipedia.org/wiki/Cherry_Ripe_(chocolate_bar)http://en.wikipedia.org/wiki/Chomp_(chocolate_bar)


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Clusters Creme Egg Crispy Crunch Crunchie

Curly Wurly Dairy Milk

Dairy Milk (original) Dairy Milk Apricot Crumble Crunch

Dairy Mily Caramel Whip Dairy Milk Cashew Dairy Milk Chocettes

Dairy Milk Chocos Dairy Milk Clinkers Dairy Milk Coconut Rough Dairy Milk Cookies Dairy Milk Crackle Dairy Milk Cranberry and Granola Dairy Milk with Creme Egg Dairy Milk Crispies

Dairy Milk with Crunchie Dairy Milk Crunchie Rocks

Dairy Milk Desserts - Berry Pannacotta Dairy Milk Desserts - Boysenberry Shortcake

Dairy Milk Desserts - Crme Brulee Dairy Milk Desserts - Furge Brownie Dairy Milk Desserts - Lemon Cheesecake Dairy Milk Desserts - Tiramisu Dairy Milk Double Choc Dairy Milk Duo Dairy Milk Flake Bites Dairy Milk Fruit & Nut Dairy Milk Energy Dairy Milk Energy - Scroggin Dairy Milk Shortcake Biscuit

Dairy Milk Snack Dairy Milk Snack - Strawberries & Cream
http://en.wikipedia.org/wiki/Cadbury_Clustershttp://en.wikipedia.org/wiki/Cadbury_Creme_Egghttp://en.wikipedia.org/wiki/Crispy_Crunchhttp://en.wikipedia.org/wiki/Cadbury_Crunchiehttp://en.wikipedia.org/wiki/Cadbury_Curly_Wurlyhttp://en.wikipedia.org/wiki/Cadbury_Dairy_Milkhttp://en.wikipedia.org/wiki/Cadbury_Clustershttp://en.wikipedia.org/wiki/Cadbury_Creme_Egghttp://en.wikipedia.org/wiki/Crispy_Crunchhttp://en.wikipedia.org/wiki/Cadbury_Crunchiehttp://en.wikipedia.org/wiki/Cadbury_Curly_Wurlyhttp://en.wikipedia.org/wiki/Cadbury_Dairy_Milk


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Dairy Milk Tasters Dairy Milk Three Wishes Dairy Milk Tiffin

Double Decker

Dream Flake

Freddo Fudge

Peanuts Perky Nana Pinky

Beverages

Bournvita Cocoa

Orange Crush (Canada) Cool Ridge - spring water (Australia)

Export Cola (Australia) Highlights - low calorie hot chocolate

Highlights Espresso

Baking

Bournville Cocoa Cooking Chocolate

Others

Bytes (India) [1] Cadbury Dairy Milk Ice Cream - Chocolate chip ice cream

Cake Bars Chocolate Gateau
http://en.wikipedia.org/wiki/Double_Decker_(chocolate_bar)http://en.wikipedia.org/wiki/Cadbury_Dreamhttp://en.wikipedia.org/wiki/Cadbury_Flakehttp://en.wikipedia.org/wiki/Freddohttp://en.wikipedia.org/wiki/Cadbury_Fudgehttp://en.wikipedia.org/wiki/Bournvitahttp://en.wikipedia.org/wiki/Hot_chocolatehttp://en.wikipedia.org/wiki/Orange_Crushhttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Export_Colahttp://en.wikipedia.org/wiki/List_of_Cadbury_products#cite_note-0http://en.wikipedia.org/wiki/Double_Decker_(chocolate_bar)http://en.wikipedia.org/wiki/Cadbury_Dreamhttp://en.wikipedia.org/wiki/Cadbury_Flakehttp://en.wikipedia.org/wiki/Freddohttp://en.wikipedia.org/wiki/Cadbury_Fudgehttp://en.wikipedia.org/wiki/Bournvitahttp://en.wikipedia.org/wiki/Hot_chocolatehttp://en.wikipedia.org/wiki/Orange_Crushhttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Export_Colahttp://en.wikipedia.org/wiki/List_of_Cadbury_products#cite_note-0


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Business Model

Cadbury has spent the last five years transforming the company into a focused

confectionery business. With distinct strength across product categories,

developed and emerging markets, strong brands, talented people and clear

values, Cadbury has a business model that is unique to Cadbury.

Cadbury is well-placed to deliver superior performance, supported by clear

opportunities: the global confectionery category has been growing solidly;

the strength and breadth of our market positions, across different

geographies and categories, help us to capture this growth and deliver

high returns;

the unexploited potential of our business is significant; and

we have the strategy and management to deliver against our plans.We believe that Cadbury will benefit from our focus as a pure-play

confectionery business.

Confectionery growth

The confectionery market has been growing around 5% p.a., with revenues

growing in low single digits in developed markets and in double digits in

emerging markets. Brand loyalty, a high level of impulse sales and limited

private label penetration mean that confectionery is also a profitable market for

companies with strong brands and effective routes to market.

Cadburys robust business model

Cadburys growth potential is underpinned by its robust business model. It has

strong brands and strong competitive positions in the three major confectionery


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categories: chocolate, gum and candy. More importantly, it has a strong

presence in faster growing categories such as gum.

It has strong leadership positions in nearly half of the worlds largest markets. It

has the largest confectionery business in the growing emerging markets with a

10.7% share: a stronger position than that of key global competitors.

In summary, our growth ambitions are underpinned by our favourable category

and geographic exposure. Despite near-term economic uncertainty, we continue

to believe that in the long-term, confectionery will remain resilient and that by

holding or growing our market share we will continue to deliver a strong

performance. Our firm intention is to continue to outperform the market byincreasing our focus on the highest return areas and reducing the complexity

which is evident in many parts of our business.

Our vision is to be the worlds biggest and best confectionery company.

Following the acquisition of Wrigley by Mars, we are now the second biggest

confectionery business by revenue. However, with significant scale in key

markets and a strong global presence, we remain a strong business partner to ourcustomers and suppliers. We continue to reinforce our positions in key markets

and maintain our number one position outside the US.

While we have every reason to aspire to being the biggest in the long-term, we

will focus on being the best in the short-term. Developing our capabilities is a

key priority of the business plan, and our progress is evident.

Deliver superior shareholder returns

Our governing objective is to deliver superior shareholder returns. Our VIA plan

has created a clear roadmap and focuses the energy and efforts of our teams

around the world. We have an advantaged confectionery business which has

significant under-exploited potential in terms of both revenue and returns. We

believe that a balanced delivery of strong growth in revenue and margins,


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coupled with an increased focus on disciplined capital allocation will allow us to

deliver superior returns for our shareholders.

Sale revenue, price range, quantity

Cadbury India Dec '09 Dec '08 Dec '07 Dec '06 Dec '05

12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 2,045.08 1,751.24 1,441.92 1,149.97 1,006.02

Excise Duty 110.71 162.65 148.45 91.73 126.24

Net Sales 1,934.37 1,588.59 1,293.47 1,058.24 879.78

Other Income 12.67 25.07 7.68 8.71 17.87

Stock Adjustments -16.28 51.32 17.29 -2.54 10.44

Total Income 1,930.76 1,664.98 1,318.44 1,064.41 908.09

Expenditure

Raw Materials 832.28 732.53 563.06 441.53 246.22

Power & Fuel Cost 37.25 29.7 25.3 20.83 19.62

Employee Cost 150.62 130.22 107.36 93.93 94.38

Other Manufacturing Expenses 6.52 96.01 76.61 57.63 138.85

Selling and Admin Expenses 0 2.45 323.54 266.54 0

Miscellaneous Expenses 624.19 430.46 43.13 35.88 292.11

Total Expenses 1,650.86 1,421.37 1,139.00 916.34 791.18

Reported Net Profit 188.63 165.78 117.65 68.81 45.95


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Cadbury India Dec 2009

Finished

Products _____In Rs. Cr._____

Product Name Unit Production Sales

Quantity Quantity

Cocoa Powder - 1,09,338.00 1,37,334.00

Biscuits - 8,92,22,616.00 9,81,68,814.00

Chocolate - 1,72,33,596.00 1,28,09,887.00

Gum - NA 66,601.00

Hard BoiledConfectionery &Gums

- NA 2,09,739.00

Malted Food- 6,16,72,060.00 7,34,47,117.00

Source : Asian CERC

Cadbury India

Raw Materials _____In Rs. Cr._____ Dec 2009

Product Name Unit Quantity Value

Cocoa Beans ThousandsKgs

15,096 233.53

Milk(Powder/Liquid/Condensed)

ThousandsKgs

39,487 133.55

Sugar & Liquid Glucose ThousandsKgs

46,075 87.51

Other Raw Materials NotReported

NA 65.07

Malt Extract ThousandsKgs

13,855 42.28

Edible Oil Thousands

Kgs

3,864 37.33


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Dry Fruits ThousandsKgs

862 18.04

Total 617.31

Source : Asian CERC

FACTORS INFLUENCING PRICING OF CADBURY

Internal Factors

Corporate and marketing objectives of the firm. The image sought by the firm through pricing. The characteristics of the product. Price elasticity of demand of the product. The stage of the product on the product life cycle. Use pattern and turn around rate of the product. Cost of manufacturing and marketing. Extent of distinctiveness of the product and extent of production

differentiation practiced by the firm.

Other elements of the marketing mix of the firm and their interaction withpricing. Composition of the product line of the firm.

External Factors

Market characteristics. Buyers behaviour in respect of the given product. Bargaining power of major customers.

Competitors pricing policy. Government controls regulations on pricing. Other relevant legal aspects. Societal (or social) considerations. Understanding, if any reached with price cartels.

Cadbury objective of pricing

Profit maximization in the short-term.

Profit optimization in the long-term. A minimum return (or target return) on investment.


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A minimum return on sales turnover. Targets sales volume. Target market share. Deeper penetration of the market. Entering new markets. Target profit on the entire product line irrespective of profit level in

individual products. Keeping competition out, or keeping it under check. Fast turn around and early cash recovery. Stabilizing prices and margins in the market.

Competition

At present there are three major players Nestle, Cadburys and Amul in the

Indian Chocolate market. Campco initially tried to break into market but failed.

Brief profile of the same has been entailed below:

Cadburys India Ltd.

Cadburys India Ltd, has been in India since 1948. Its brands: Dairy Milk, 5

Star, Gems and Chocolate Eclairs are the households names in India today. In

all the segments i.e. moulded chocolates, count chocolates and panned

chocolates, it is undoubtedly the market leader.

Cadburys has its manufacturing units at Thane (Mumbai), Malanpur, Indori

(near Pune), Mithuri and Kolapur. It has a strong distribution network with

about 500 distributors in North India and more than 3 lac retail outlets being

serviced all over India.

In 1997, Cadbury planned to pump in Rs.80-crore to up production capacity at a

couple of Cadburys factories. This cash is exactly double of whats been

invested in 1996.

The Company launched Perk, a wafer enrobed chocolate in 1995. This was

reactionary to the launch of Kit Kat and has been able to counter competition.


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Cadburys Dairy Milk (CDM) - The Flagship brand

CDM, the oldest of Cadburys brands was launched in 1956. In the early 90s, a

rise in the prices of cocoa, increase in the excise duty and a fall in the demand

inspired the idea of repositioning. Two years in the process after relaunch

Cadburys Dairy Milks market share stood at 25 percent with sales rising by an

average 40 percent per annum.

Besides CDM Cadburys has a number of endorser brands such as FruitnNut,

Nut Milk etc. Even though contribution of these brands to the companys

bottom-line is very small, they are required in order to make a complete

portfolio of offering.

The Company developed a concentration strategy on CDM, Five Star, Cadbury

Gems, Cadburys Eclairs, Perk and the latest of its offering Picnic (which has

drawn a good response in the market).

The Company has also identified sugar confectionery, as a growth sector. Its

first offering Googly.

Nestle India Ltd.

Nestle India Ltd. has been in India for more than 35 years now. The worlds

largest marketer of chocolates (became world number one when it acquired

Rowntree Macintosh of the UK) - Nestle, made its foray in the Indian chocolateIndustry in November 1990. It launched three products - the milk chocolate, the

bitter chocolate and Crackle (a crunchy chocolate) - in the slabs category and

Bar One in count lines.

Cadburys was quick to react, and launched a whole host of products in

succession: All Silk milk chocolate, Creamy Bar, and a new version of 5 Star.


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Nestle, in the beginning did not have its own manufacturing facility. It had an

alliance with Campco to manufacture chocolates. Later, in 1995 a state-of-art

manufacturing plant was set up at Ponda, Goa at a cost of Rs. 50 crores. This

unit took care of the entire Kit Kat production. However, the production tie-up

with Campco still continued.

Launch of Kit Kat

Kit Kat, one of worlds most popular chocolate, was launched in India in 1995.

Within months of its launch, it fulfilled every target Nestle had set. Its launch

was accompanied by the launch of Cadburys Perk in order to counter Kit Kat

and safeguard the flagship brand CDM. Kit Kat has been able to define a new

segment in the industry in the form of the wafer enrobed any time snack.

Kit Kat outsells Perk in the outlets where both are available. In the crucial

markets of Bombay and Delhi both are running neck-and-neck. It has even said

to have threatened the mother brand, Cadbury Dairy Milk.

NESTLEs New Launches

Brand Launch

Allen Splash Selected Cities

(Sugar Candies)

After Eight Mints Delhi & Mumbai

Lion Wafer Bars Delhi & Mumbai

Future Outlook

Focus will be on chocolates and confectionery followed by culinary products

which include the Maggi range and coffee.

Amul


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Gujarat Cooperative Milk Marketing Federation (GCMMF) launched the Amul

Chocolate way back in 1974. With its milk chocolates, Badam Bar, Crunch and

Fruit n Nut has a market share of about 5 %.

Due to lack of focus and with multinationals spending huge amounts on

advertisements its market share has been falling.

GCMMF is involved in a large number of products, of which chocolates

constitutes just 1-2 %. The company is not concentrating much on its chocolate

business. As of now, Amul chocolates are not on companys focus.

Interestingly, Kaira District Cooperative Milk Producers Ltd. (KDCMPL) - the

manufacturer of Amul chocolate - is selling whatever it produces. Limited

capacity is also a reason for the share it has.

However, Amuls memorable advertising campaign positioning it as a A Gift

for Someone You Love, saw the sales graph rising. Amuls sales grew by 39%

then. Ever since, Amul has maintained a low profile.

It can further be seen that Amul (SEE FINDINGS).Other Domestic Players

The only other organized player in the market is Campco, which has an

insignificant share of the market. It is supplying its production to Nestle. Apart

from this Campco did come up with its new brands like Treat. But crunch of

resources grossly effected the pace of the company and is hardly to be heard of

today.

IMPORTED BRANDS

Considering the high growth potential, various multinationals wanted to set up

facilities in India (Mars being one of them). However, shortage of cocoa,

seasonality in demand, and the absence of a proper cold chain deterred them

from investing in India. The government also moved the import of chocolates


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from special item list to open general license category. The duty structure was

also reduced. This resulted in making import of foreign brands easier and price

competitive.

Due the above, Mars Inc.-the US giant, who had decided to set up facilities in

1995(the site for which was also selected), decided to postpone its investment

plans.

An alternate strategy was formulated to import Mars chocolate brands into India

through Sarura Business (I) Ltd. Sarura imports Mars brands and sells through

its own distribution network.

References:

1. www.cadburyindia.com

2. www.kraftfoodscompany.com

3. http://www.moneycontrol.com/financials/cadburyindia/4. http://en.wikipedia.org/wiki/Cadbury
http://www.cadburyindia.com/http://www.kraftfoodscompany.com/http://www.moneycontrol.com/financials/cadburyindia/http://www.cadburyindia.com/http://www.kraftfoodscompany.com/http://www.moneycontrol.com/financials/cadburyindia/

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Cadbury ME Project Report Final