Marketing Report on Cadbury India ltd

Marketing spread abroad on Cadbury India ltdCadbury India ltd. began its operations in India 1948 by merchandiseing coffee beans. After 62 years of existence in India Cadbury enjoys a value food food commercialise persona of over 70%- the highest Cadbury provoker sh atomic tot 18 in the world. The research looks after the miscellaneous types of analysis such as swearing analysis and fancy up analysis and in addition contains the Marketing mix of various aspects of the organization. A strategic pass is overly recommended to the fraternity to summation its sales and to affix its benefit and the conclusion it concludes the result of the analysis and its result as recommendation.Cadbury India Limited is a fully owned subsidy of Kraft nutrients Inc. with approximately $50 billion, on 2nd February 2010 Kraft foods has sealed its takeover over Cadbury, the combined companionship is the worlds second volumedst food troupe making delicious food intersections for billion s of its consumers in more than 160 countries and employ approximately 140,000 and work up up operations in more than 70 countries.(bbc,2010) In India, it began its operation in the year 1948 by importing drinking deep browns initially. Today the confederacy has five troupe owned manufacturing facilities at Thane, Induri(Pune) and Malanpur (Gwalior), Bangalore and Baddi(Himachal Pradesh) and four sales units spread a thwartwise the country. Presently the social club operates in four categories namely Chocolate confectionary, draw Food Drinks, Candy and apply category. In the chocolate confectionary affair, Cadbury has been the undisputed leader over the years beca recitation of its common key brands wish good Dairy milk, peck, 5 star, etcetera In the Milk food drinks business the companys main crossway is margevita. In the drive offdy portion Halls is the companys product and in the gum fraction the product is Bubbaloo. Today with an leftover portfolio in confe ctionary, snacking and quick meals it is worlds no.1 Confectionary company (Cadbury India Limited n.d., 2010).The Indian Confectionary MarketThe Indian Confectionary Market is estimated at approximately 223500 piles which is valued approximately at Rs. 41 billion. This grocery store sees a steady growth of 11.5% annually. The merchandise stern be segmented into chocolates, sugar boiled confectionary, chewing gums and mints. Cadbury is the undisputed commercialize leader and has a market sh atomic payoff 18 of 68% and Nestle universe its immediate competition has a market sh atomic number 18 of 22%. Cadbury Indias market shargon in hot chocolate based products is 35% with Dairy milk solely accounting for 30% (Pandey 2006, p.212). The new(prenominal) competitors apart from Nestle be confectionary companies man get on Amul, Wrigleys, Lotte, etc however these companies keep back a comparatively small market sh ar.industriousness TrendsSince Chocolate and Confectionary are mainly consumed in the urban areas, because the industry witnesses a 73% skew towards the urban market, 27% towards the farming(prenominal) market. Overall industry growth is estimated at 23% in the chocolate segment and a decline of 19% in the sugar confectionary segment (Cadbury India Limited n.d.). With emerging trends and lifestyle changes, chocolate and confectionary nowadays arent still consumed by children. alone confectionary companies have shifted their focuses to Adults as well this shift explains the reason to the large variety of flavor variants, pack and size variants. According to a consumer research, 42% of adults state they purchased confecti unmatchedry to eat straightaway when on the move, 57% of those functional full time eat chocolate bars while at work and 49% of hatful having nuclear families said that they prefer to manducate on a chocolate bar when relaxing at groundwork (Keynote 1999). Hence due to lifestyle changes the chocolate/ confectionary mark et has experienced a steady growth over the recent years.(confectionary, 2009) spateker Analysis PEST analysis involves assessment of the Political, Economic, Social, and Technological. (Kitchen Proctor 2001).Political According to the Safe Food Guide released by Greenpeace, the food products of Cadbury contained certain genetically modified arranges which turn out to be hazardous to health (Press Trust of India 2007). However, the company escaped out of these political implications when CRISIL gave an AAA rating to the company (Cadbury India Limited 2009), the company also got a clean c run into from the FDA after the worm controversy.Economic many another(prenominal) MNCs and Companies had to bear the wrath of the global street corner. Surprisingly, at the time of global recession the sale of Cadbury chocolates had gvirtuoso up by 7% in countries same India, Britain and South Africa. Cadburys CEO Todd Stitzer was confident that he would be able to chance upon the 2009 sal es target and he also quoted that since the recession has given boot out to the stay-at-home culture, people prefer to buy chocolates and confectionary asthese are low-priced luxuries and act as a mood enhancers in bad propagation (Press Trust of India 2009) (Appendix 1).Social Cadbury India set up non-formal schools for the children of migrant workers in Baddi, the company also tied up with Bharti and Walmart to support education considers of poor children. The Sarvam course of study catered to the victims of the Asian Tsunami in 2004 (Cadbury India Limited 2005b). These are just a few ways in which the company proves itself to be a socially ethical organization.Technological The pappu pass ho gaya ad campaign proved to be an instant hit with the masses, however in 2005 the companys task was to increase Dairy Milks guest franchise. The main idea was that children should celebrate the joy of exhalation their exams with a Cadbury Dairy Milk, this rasetually led to the tie - up with Reliance vane world, wherein students across 66 examination venires in the country could access their results on R-world through Reliance mobiles. If they passed a message congratulating them on their hour of enthrall from Dairy Milk was displayed. This was an extremely innovative way of using engineering and various market confabulations. This exertion was awarded the Bronze Lion at the Cannes Media awards in 2005 (Cadbury India Limited 2006)Table SWOT AnalysisStrengthsWeaknessesStrong market military positionWide geographical presenceRobust revenue growthDeclining favorableness return recallOpportunitiesThreatsInorganic growthDemerger of Americas beverages business change magnitude health dispositionIndustry consolidationIncreased competition from privy labels change magnitude distri justor costsSource( Datamonitor,2009)Strengths -1. Strong brand equity in India2. due to 54 years of presence in India has deep penetration- 2100 distributors 450,000 retailers, 6 0 mid urban (22%) customers .3. low cost of production due to scotchal of scale. That means higher salary, better market penetration.4. Second best manufacturing place throughout Cadbury Schweppes.5. Strong global market positionThe companys Indian business has a leading presence in chocolate with 71% market share. The company acquires leading market share in Thailand in gum and candy, at 63% and 31% respectively. In Malaysia, it has a number one market share in chocolate at 29%, and in gum it has a number two position with a 19% market share. In Australia as well the company has a number one position in chocolate (53% market share)6. Wide geographic presenceThe company operates along with its subsidiaries in the UK, the eurozone, the US, central and southern America, Australia and other parts of Asia pacific. Wide geographical presence enables the company to cater to change markets and thus reduce its business risk.(anonymous, 2010 )Weakness -1. Poor technology in India compa red to current international technologies (Godiva, Mozart, fazer,dint,naushans,etc..)2. ltd. Key products, only one central brand (CDM). Pralines range totally wising in india3.Make in India tag once the frugality opens up wore and imports rush in4. Declining salaryabilityThe operating profit of the company declined at a rate of 13.3% compared with 2006 to reach 788 million pounds during FY2007. Declining profitability leave alone adversely affect the operations of the company. (Anonymous, 2010)Opportunities -1. Tremendous scope for per capita using up (160gms of 8-10kg)2. Increasing per capita national in commence resulting in higher disposable income.3. Growing middle offprint and growing urban population4. Increasing gifts cultures5. Increasing health consciousnessConsumers are increasingly advised of the risks thinkd with obesity and poor dietary habits. The companys health (including products like sugar-free and fat-free products, and medicated candy) sub- category, acc ounted for around 30% of confectionary revenue in 2007. The company thus is well positioned to benefit from the rising demand for healthy foods worldwide. (Anonymous, 2010 )Threats-1. Industry consolidation2. Increasing scattering costsHigher fuel prices are likely to have a direct impact on the companys distribution cost and may directly affect its margins.3. Increased competition from esoteric labelsPrivate-label goods generally lower priced products sold under a stores ownname, are a constant threat to other brands goods, especially during times ofeconomic weakness with increasing popularity of these toffee-nosed labels combined with the depth of their penetration in local markets, Cadbury may see the erosion of its market share in certain geographies and is likely to face a bigger challenge from these private labels in future. (Anonymous, 2010 )Marketing Mix4 PS of Marketing1- harvest-homeThe average company will compete for customer by conforming to his expectation consist ently, but the winner will surpass them by forever and a day exceeding his expectation, delivering to his door step additional benefits which he would never have imagined. Cadburys offer such product. The wide variety products offered by the company intromit-Chocolate ConfectionaryDairy MilkFruit Nut5 unityBreak hearGemsclairsNuttiesTemptationMilk TreatFood DrinksBourn vitaDrinking chocolateCocoa2. Price-Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. The strategy used by Cadbury is for matching the value that customer pays to buy the product with the expectation they have close to what the production is worth to them .Cadburys has launched various products which cater to all customer segments. So e very customer segment has different price expectation from the product. and because maximizing the returns involves identifying right price direct for each segment and then progressively m oving through them.Dairy milk Rs. 15Perk Rs.105 Star Rs.10Fruit and Nut Rs.22Gems Rs.10Break Rs.5Nutties Rs.18Bournvita(500gm) Rs.104Drinking chocolate Rs.50PLACE-Distribution Equity It takes much(prenominal) more time and effort to build, but once built, distribution equity is hard to erode.The fundamental byword of Indian consumer market is thisYou can set up a state-of-the-art manufacturing facility, hire the hottest strategies on the block, swamp prime television with best Ads, but the end of it all, you should know how to sell your products. The cardinal task forwards the Indian market in managing is to shoe-horn its product on retail shelves. Buyers are paid for distribution equity not brand equity and market shares.why does the company need distribution equity more in India?In a product and price parity situation, the brand that sells more is the one that reaches the highest number of customers.India 1 billion people, 155 million household has over 4 million retail outl ets in 5351 urban markets and 552725 villages, spread cross 3.28 million sq. km. television has already primed and population for consumption, and the marketer who can get to the consumer ahead of competition will give a hard-to-overtake lead. entirely getting their means managing wildly different terrains-climate, language, value system, life style, canalise and communication internet and your brand equity isnt dismission to help when it comes to tackling these grapples. bear distribution network consist of clearing and forwarding (cf) agents distribution stockiest. This network of distribution can either contact to the retailers directly.Once the stock product reaches retailers, the prospective customers can have access to the product.Cadburys distributes the product in the personal manner stated above.Cadburys distribution network has expanded from 1990 distributors last year to 2100 distributors and 4,50,000 retailers. Beside use of TI to improve logistics, Cadbury is als o attempting to improve the distribution quality. To address the issue of product stability, it has installed visi colors at several outlets. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heat affects product quality and thereby off takes. The increase in distribution is going to be accompanied by reduction in channel costs. (Anonymous, 2010 ) forward motion-Effective advertising is rarely hectoring or loudly explicit..,it often both attracts and generates arm feelings. More often than not, a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature.To penetrate into the inner recesses of customer memory, communication must firstborn ensure exposure, grab his acceptance and then extract retension competing with thousands of other units of communication trying to do the same.Thereafter it was the job of the advertising to communicate customer the wonderful fe eling that he could experience by re-discoursing the careful, unselfish conscious, pleasure- pursuit child within him and graft these feeling into Ad campaign like Khane Walon Ko Khane Ka Bahana Chahiye for CMD and Thodi Si Pet Pooja Kabhi Bhi Kahin Bhi for perk have been sure cracking winner with the audience.The next round of activity will include the wafer-chocolate Perk and the Picnic bar, which has faced troubles with its sagaciousness, because of the peanut it contains. Milk treat has also been launched in a module bar form, just in time of Diwali gifting market. clairs has got latent for much wide distribution, in a small sweetlys that airlines, hostels, and up market retail outlet offer to guest and customers.Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as spend at this aim in the current year also.Its a combination of spiffing up its key brands, researching and improving the newer products that havent taken off, back up wi th high ad-spends that Cadbury hopes will see it emerges stronger after the current slowdown, as well as expand the market. (Anonymous, 2010 )Critical analysis of Marketing mix-Product is a output of the company, Being a market leader the level of expectation from the company is at a very high level and thus it is measurable for the company to maintain its Products quality, shelf life and freshness of the product are the most important factors for the company. Product is the life of the company and is the most important factor.In 2003 Cadbury India had to face the plight of the worms controversy. After receiving complaints from various states across the nation, the Food and Drug Administration of India took action against the firm, confirmed reports of worms cosmos found in Dairy Milk chocolates. The FDA officials werent certain if the manufacturing was to be unsaved for the infestation but they were sure that there was some problem in the packaging, meanwhile the company assure d the FDA that it will change the packaging and come up with a tamper-proof seal packing (Kamdar 2003). Shortly after, the company came up with the purity sealed packaging and stored the chocolates in cool dispenser units to prevent melt down of chocolates. The companys GM for marketing Mr. Sanjay Purohit in a press conference stated that We have regained 90 percent of the sales levels (Mathur 2004).Pricing is also an important factor, Factors like competition, internal costs, and the positioning and corporate objective of the company need to be taken into consideration by a company before determine a product. Premium pricing(relative to the competing brands) with special emphasis on taste and quality is recommended. The premium pricing does not suggest that the offering is do unaffordable to the target consumer. A high price would accompany a look for for a better taste and quality. Therefore, the brands, taste quality needs to discharge the high price.As seen in the table be low nestle and Cadburys are pitted against each other and Amul is the cheapest brand in the marketConsidering the above, a premium pricing strategy, with the assurance of good quality and better taste, in a market that is not high on price sensibility may prove to be a success.Cadbury dairy milk is priced at Rs.15/- for 40 gmsNestls Milk chocolate at Rs.13/- for 40 gmsAmul is priced at Rs.10/- for 40 gms(Kevin jacob,2007)Place Positioning is simply concentrating on an idea or- even a word defines that company in the mind of the consumer. It is more high-octane to market one successful concept to one large crowd of people than 50 product or service ideas to 50 separate group repositioning is a must when customer attitude have changed and product have strayed away from the consumers long standing perception of themCadburys is an strand in sea of confectionary products. as a variety of competitive claims assails her senses, like a shot customer uses complicated decision making pr ocess to assess the ersatz before making a purchase. Since cadburys is more clearly associated with a specific set of attributes in terms of benefits and prices, the quicker becomes its search process.Promotional activities like Dil ko jab khushi choo jaaye, kuch meetha ho jaayeIn the early 90s, chocolates were perceived as being meant for boors. However in the mid 90s, Cadbury repositioned itself, and shifted its focus, became a chocolate for the kid in all of us. This communication is aimed at all age groups from Children to the spring chicken and even Adults.The main objective behind this commercial was to make people realize that every little or big happy moment was to be celebrated with a Dairy milk. The communication also aimed at making chocolate consumption a habit (Pandey 2006, p.215).The audiences were expected to make Dairy milk a part of their lives. Every moment of delight like passing the exams, meeting a celebrity, winning a enlivened of cards, etc was meant to be cherished and celebrated by eating Dairy milk. This chocolate was meant to be a Celebration of Life and its happiness.The commercial was a simple, sweet and effective piece of communication. It had a very simple approach of celebrating joyful moments of life with Cadbury. The feelings, expressions, emotions portrayed by the actors in the commercial were enough to hit the emotional chord of the audiences.The ad was simple and direct in its capability and visual presentation. The emotions displayed brought out the life and depth of the commercial. The brand also shifted its characterization from being only for kids to being a chocolate for all age groups. The punch line became extremely popular with the masses and people began to associate the chocolate to every happy moment.Strategic recommendation-Cadbury India is a very experienced player in its field and is going well on its business in India but a bit of concern is its pricing of the confectionary products which is a bit hi gh as compared to its competitors this is a place where the company is facing challenges from its competitors, The company also vouched this problem and in 2008 started a class home grown supply where it started the production of cocoa in India. (Business India intelligence,2009)Cadbury is also hoping to change its dependence on imported cocoa. A 30% import duty on cocoa beans, which are mostly grown in Ghana and the os coast markets that are also less politically stable than India- has led Cadbury seek to source more beans domestically. In a venture called the Cadbury cocoa partnership (which also operates in Ghana, Indonesia and the Caribbean), it hopes to persuade 20% of Indian coconut palm farmers to include cocoa trees in their plantations. It is pursuing this name and address by giving farmers saplings and providing technical expertise. Last year 5m cocoa saplings were position another 7.5m in 2009, ultimately making India self-sufficient in cocoa production by 2015. Thus , it is hoped, can be achieved with a little prisonbreak as possible.One of the advantages of cocoa seedlings is that they can grow alongside coconut palms in southern India and do not require the clearing of forests for plantation. Although this programme is not being exposed as it could have been used.(Business india intelligence,2009)Recommendation-The recommendation for the company is to work on the cocoa production in India as in India major group is farmers but they are not aware of the benefits of this cultivation, if the company promotes the cultivation and get good production from India then this can result in resuming the issue of high price of the products like chocolates, snacks etc. the company then can control its prices and could be competitive with its competitors which is its biggest problem in the market and also the company can Increase its profits by the use of this practice as the company has to pay 30% duty on imports of the cocoa from other countries like Gha na and Ivory coast and if they can get the same crop from the domestic voice than they can get a good return on their Profit sharing ratio. (Business india intelligence,2009)To meet the increasing demand of cocoa seeds increasing number of farmers are taking cocoa cultivation as an inter crop along with the coconut to double their incomes .The industrys graph is slated to shoot up as the demand for cocoa seeds has sharply rised in India and in foreign markets as well for exports. Tamil nadu and the southern regions of India have the most favorable surroundings for the cultivation of cocoa. The present production of India is around 10,000 tons meeting only half of the total demand of around 20,000 tons. (jaya kumar,2008)Indias Cocoa Development board is also understood to have undertaken a similar initiative to increase the production to 16,000 tons in two years time. Indias annual consumption of the beans is about 20,000 tons and more than 40 percent of its total want is still me t through imports .(jose roy,2009)According to Cadburys India forecast, cocoa demand is growing around 15 percent annually and will reach about 30,000 tons in the next 5 years. Industry observers said India through public- private partnership was attempting a cocoa revolution once again in the country to become a bellwether state of the beans in the region. (jose roy,2009)Conclusion-This makeup demonstrates Cadbury Indias hold in the Indian market and shows its position in the Indian market it also describes the various analysis like SWOT and PEST which describes various features about the company and the marketing mix which shows its marketing abilities and its strategies, the recommendations are also given to improve its position in the Indian market and to increase its profits. The Chocolate industry remained unaffected by the recent economic changes in the world and since Cadbury is the market leader its growth rate, marketing strategies are ever changing keeping the current in dustry trends in mind. All Cadbury commercials also have been extremely effective and popular with the masses.This report all the way states the companys hold and experience in the target industry and gives suggestions though which it can indorse its strong potential to continue to do well.