Marketing Management

Origin of Chocolate •The origins of chocolate can be traced back to the ancient Maya and Aztec

Civilization in Central America, who first enjoyed 'chocolat' a much-prized

spicy drink made from roasted cocoa beans.

•Soon 'chocolate' became a fashionable drink enjoyed by the rich in Spain.

•By 1606 chocolate was well established in Italy.

•The secret of chocolate was then taken to France in 1615.

•Gradually the custom of drinking chocolate spread across Europe, reaching

England in the 1650s.

• Up until this point all chocolate recipes were based on plain chocolate . It was

an English doctor, Sir Hans Sloane, who - after travelling in South America -

focused on cocoa and food values, bringing a milk chocolate recipe back to

England.

The original Cadbury Milk Chocolate was prepared to his recipe.

Forms of Chocolate

1. Unsweetened Chocolate 2. Dark chocolate 3. Milk chocolate 4. White chocolate 5. Cocoa powder 6. Compound chocolate 7. Raw chocolate

Need for Chocolate in India

• India has a huge and growing population and a strong interest in chocolate

• Moreover, the International Cocoa Organization expect demand in Asia to grow about 10% this year—a trend some investors see leading prices to climb even further.

• To chocolate producers, India is especially attractive. For one thing, fancy chocolate is an affordable luxury for India's new consumers. For another, the country has a sweet tooth; Indian cuisine has a rich menu of sugary concoctions.

• Chocolate is also an acceptable holiday gift in place of traditional sweets.

Chocolate Market in India

• India is the world’s fastest growing market for chocolates

• Registering 15% annual growth between 2008 to 2012, the Indian chocolate industry is expected to grow at an even higher rate

• Low priced unit packs, increased distribution & reach and product innovations are the essential reasons behind the growth

71%

20%

6% 3%

INDIAN CHOCOLATE MARKET SHARE 2013

CADBURYNESTLEFERREROOTHERS

1948

Operation began in India

1965

Pioneered the development of cocoa cultivation in India

CADBURY IN INDIA

• Began its operation in 1948 by importing chocolates and then

re-packing them before distributing it in the Indian market.

• After 62 years, it is having five companies at Thane, Induri

(Pune), Malanpur (Gwalior), Bangalore, Baddi (Himachal

Pradesh) and 4 sales offices in (New Delhi, Mumbai, Kolkata

and Chennai). The corporate office is in Mumbai.

• Currently Cadbury India operates in three sectors viz. Chocolate

Confectionery, Milk Food Drinks and in the Candy category.

• Cadbury enjoys a value market share of over 70% - the highest

Cadbury brand share in the world.

COMPANY OVERVIEW

Marketing Mix

Product Place Price Promotion

PRODUCT

CHOCOLATE BAR.

MADE FROM REAL DARK CHOCOLATE.

SIMILAR DESIGN WORLDWIDE.

CONTAINS MORE MILK THAN ANY OTHER CHOCOLATE BAR.

AVAILABLE IN 10.5g, 22g, 95g, 165g & OTHER PREMIUM PACKS

SUGAR

COCOA BUTTER

VEGETABLE FAT

CREAM

EMULSIFIERS

COCOA MASS

INGREDIENTS

VARIANTS

PRICE

WEIGHT (gm) PRICE

10.5 5

22 10

40 20

42 CRACKLE 25

95 50

80 FRUIT & NUT 55

165 90

PRICE MENTIONED ABOVE ARE SAME ALL OVER INDIA.

Competitive PRICING.

DUE TO PRICE HIKE IN RAW MATERIAL AND LABOUR COST COMPANY HAD NOT INCREASED THE COST OF PRODUCT BUT REDUCED THE WEIGHT OF PRODUCT.

EG. 5 RS PACK WAS OF 13gm BUT NOW IT IS 10.5gm

PLACE

Business Operations

Five company-owned manufacturing facilities:

Thane

Induri (Pune)

Malanpur (Gwalior)

Bangalore

Baddi (Himachal Pradesh)

4 sales offices: New Delhi

Mumbai

Kolkota

Chennai

Corporate/Head office: Mumbai

THESE FACTORIES

CHURN OUT CLOSE TO 8,000

TONNES OF CHOCOLATE ANNUALLY

WHOLESELLERRETAILER

DISTRIBUTION

CDM ARE SOLD DIRECTLY TO WHOLESELLER AND RETAILERS.

CADBURY'S DISTRIBUTION NETWORK USED TO ENCOMPASSES 2100 DISTRIBUTORS AND 450,000 RETAILERS.

PROMOTION

Strong brands are very important in the chocolate confectionery market.

Almost 80% of chocolate purchases are made on impulse.

The media mix for the campaign comprises TV, outdoor, Internet and radio.

Use of emotional appeals in advertising.

Concentrated more on TV. Advertisement.

• The ‘Real Taste of Life’ with the girl dancing on the cricket field

• The message: ‘Dairy Milk is for enjoyment’

Ad Campaigns & Evident Cultural Shift

During late 90’s

• Campaign: ‘Khanewalon ko khane ka bahana chahiye’.

• Target: Widening chocolate consumption among the masses

More recently

• Campaign: ‘Kuch meetha ho jaye’.• Target: To associate Cadbury with celebratory

occasion.

• Campaign: ‘Pappu pass ho gaya’

• Target: Encourage those who have passed their exams to celebrate with Dairy Milk.

• Campaign: ‘Aaj pehli taarikh hai’

• Target: To celebrate pay day / salary day

• Campaign: ‘Shubh Aarambh’

• Target: To have Dairy Milk before an important task

Reasons for Cultural Shift

• Change in the preference of consumers, wherein the

tradition of gifting sweets is gradually getting

replaced by chocolates

• Rising income levels & rapid developments in rural

markets

Cadbury appointed Amitabh Bachchan as its brand

ambassador.

The Big factor that has pushed up CDM sales is the

Amitabh Bachchan campaign.

THE BIG ‘B’ FACTOR

AchievementsMajor Achievements of Cadbury• Worlds No 1 Confectionery company• World's No 2 Gums company.• World's No 3 Beverage company.• Cadbury Dairy Milk & Bournvita have been declared a "Consumer

Superbrand" for 2006-07 by Superbrands India.• Cadbury India has been ranked 5th in the FMCG sector, in a survey on

India's most respected companies by sector conducted by Business World magazine in 2007.

• Cadbury India has been ranked as the 7th Great Place to Work and the No. 1 FMCG company in India in 2008, by the Great Place to Work Institute.

• Asian Marketing Effectiveness Awards 2008 for Bournvita Folk/Fusion campaign - GOLD award for the "Best Insights and Strategic Thinking" and SILVER award for the 'Most Effective Use of Advertising'.

COMPETITIVE ASSESMENT

• Food feuds keep share markets as well as consumers perennially interested. At first, it was the cola giants that attacked each other using their ad campaigns as daggers, and now the battlefield is fast becoming accustomed to the chocolate giants – Cadbury and Nestle.

• These are both global brands which have been competing neck and neck over market share for decades. However, their approach to advertising was never as direct as it has become in the last three years.

• Taking a lesson out of the cola giants’ battlebook, Nestle is waging nothing short of a public war against Cadbury through its ad campaigns.

• Cadbury has, without a doubt, always been seen as the market leader. It leads the pack in the Rs. 4,000-crore branded chocolate sector in India

• Even though several brands such as Amul and Campco tried to break into the market, none of them succeeded in shaking Cadbury’s grip.

• Nestle is the only real competition Cadbury has had in its long run as market leader.

Threats & Substitutes of Cadbury

• Competition- Cut-throat competition from rival brands like Nestle, Amul and international chocolate brands

• The current trends in the market suggest that traditional sweets are possible substitutes for chocolates. In order to strengthen the special relationship consumers share with chocolates

• New entrance and individual players ( rise in sale of homemade chocolates)

• Preference and availability of other substitutes ( sweets and desserts) such as pastries, cookies, biscuits, cakes, etc.