Cadbury's Dairy Milk Chocolate

Evolving "Positioning" over Time

Purpose of the Case

The ideas to assimilate the relevant concepts at work and analyze in light of the following issues:

To focus on how a brand is evolved to keep a consumer populace growing across age groups and occasions for consumption

To appreciate how brand positioning and communication affect the mindset of both potential and existing consumers

Milk chocolate for eating was first made by Cadbury in 1897 by adding milk powder paste to the dark chocolate recipe of cocoa mass, cocoa butter and sugar. By today's standards this chocolate was not particularly good: it was coarse and dry and not sweet or milky enough for public tastes. There was a great deal of competition from continental manufacturers, not only the French with their fancy chocolates but also the Swiss, renowned for their milk chocolate. Led by George Cadbury Junior, the Bourneville experts formulated a recipe incorporating fresh milk, and production processes were developed to produce a milk chocolate 'not merely as good as, but better than the imported milk chocolate. The business changed from a grocery shop and became a manufacturer of drinking chocolate and cocoa, the start of the Cad bury manufacturing business, as it is known today. Cad bury Ltd. is the confectionery division of Cadbury Schweppes pic, a major force in the international market. By 1913 it had become the company's best-selling line and in the mid-twenties Cadbury's Dairy Milk gained its status as the brand leader, a position it has held ever since.

Enjoyed and recognized by people in over 30 countries around the world, Cadbury's core markets are currently in the UK, Ireland, Australia and New Zealand. The 'glass and a half', corporate purple and flowing script has become synonymous with Cadbury: these design elements have been used to great effect in developing the connotation of goodness that this imagery suggests. In the 1980s another vital attribute - taste - was highlighted. Regardless of national preferences about how chocolate should taste (e.g. dark chocolate is traditionally more popular in Europe whereas Australians prefer creamier milk chocolate) the implication was clear - Cad bury offers taste and texture that appeals to all. In the 1990s further emphasis was laid on 'taste'. The strap line 'Chocolate is Cadbury', which was built upon previous brand values and allowed Cadbury to stake its claim and taking ownership of the word 'chocolate' and the chocolate eating experience.

The Indian Chocolate market is estimated at around 33,000 tones valued at approx. Rs. 8 billion and is growing at almost 11.5%. Cadbury being the market leader has a market share of 68%, Nestle being a distant follower with 22% market share. Out of the total chocolate market the chocolate bars market is estimated at about Rs. 5.5 to 6 billion which effectively means one-fourth of the total confectionery market. The Indian confectionery market is segmented into sugar-boiled confectionery, chocolates, mints and chewing gums. Cadbury India's market share in cocoa based products is 35% with Dairy Milk alone accounting for 30%. Perk and 5 Star account for another 20%. Cadbury derives 76% of its revenue from chocolates and confectionery sales. The biggest strength of Cadbury is its parent company in U.K, which provides all the technological, and Research & Development help to form new products or launch a product that is already being marketed in other countries.

Chocolate consumption in India is very low, per-capita consumption being 160 gms in the urban areas compared to 8-10 kgs per annum in the developed countries. Chocolates in India are consumed as indulgence and not as a snack food. However, a strong volume growth was witnessed in the early 1990s when Cadbury repositioned chocolates from children to adult consumption. The company had shown great resilience when after the worm controversy Cadbury lost its market share in starting

months of 2004 but regained its position soon with due help from great advertising campaigns featuring superstar Amitabh Bachchan.

Major competitors apart from Nestle are the companies in the confectionery industry like Perfetti, Wrigley's, Lotte, etc. and the companies in the food and entertainment industry like Pepsi, Coca-Cola, Haldiram, and Dabur, etc. Nestle India has been deriving its revenue from five product baskets - coffee, milk products, food for infants, chocolate / confectionery and malted beverages and food products.

Cadbury's Dairy Milk (COM), which was launched in India in 1948, enjoys a 30% market share of the Indian chocolates market and is available in multiple pack sizes at strategic price points. Further, the plain milk chocolate is now available in several variants - Fruit and Nut, Crackle, Caramello, to name a few. Cadbury, even though a MNC has made COM a huge brand today but it had to customize its marketing mix to suit the diverse temperature and sociocultural environments. Cadbury's another big brand Boumvita is also the leader in the brown drink (cocoa based) segment.

It would be incomplete to look at Dairy Milk as a brand in isolation. It would be more prudent to look at Dairy Milk as Cadbury's Dairy Milk derives certain brand equity from the name of Cadbury's and remaining from Dairy Milk. In effect, we need to look at Cadbury's as the mother brand while simultaneously looking at Dairy Milk.

Initially, exclusive to Cadbury Dairy Milk as an advertising device, the 'glass and a half' symbol became an integral part of the corporate design for Cadbury in the early 1960s. The icon symbolizes the goodness, quality, freshness and superiority of Cadbury chocolate.

Purple and gold were firmly established as the Cadbury corporate house colors by the early 1920s. The two colors had been introduced within the product range at the beginning of the century. It was in 1920 that the purple and gold colors were used in the pack design for the flagship brand Cadbury Dairy Milk. In the aftermath of the worm controversy, the company came out with a new impenetrable packaging. The new double packaging even for the smallest offering, the 13 gm Rs 5 Cadbury Dairy Milk, had the bar wrapped in aluminum foil and enclosed in a polyflow pack, which is sealed on all sides. The larger Cadbury Dairy Milk packs came in poly-coated aluminum foil, which was heat-sealed and then wrapped in the branded outer package. Both these initiatives are country-specific and Cadbury invested nearly Rs 25 crore (Rs 250 million) this year on new machinery for the improved packaging.

Cadbury's uses its name on all its confectionery products (Dairy Milk, Perk, Fruit & Nut, etc). By doing so, it is using its stature in the form of corporate endorsement. The consumers feel reassured because the endorsing company already has an existing platform of visibility, image and equity. This way the company saves on the investment required to build and promote multiple, independent product brands. In order to obtain cost economies, Cad bury has leveraged the strength of the existing brand, Dairy Milk to launch new variants and product lines. It has been extended to several variants such as fruit & nut, crackles, roasted almond, Caramello. etc.

The sugar confectionery segment in India is largely dominated by the unorganized players. Leading national players in this category include Nutrine, Parry's, Ravalgaon, Candico, Parle's, Joyco India and Perfetti. The MNC's such as Joyco and Perfetti have aggressively expanded their presence in the country in the last few years. Sugar confectionery ventures of Cadbury's have not yielded desired

results so far. In the malted food drinks-category too, Bournvita market share has remained stagnant at 14-15% in the last few years, despite the company's efforts and investments in repositioning the brand.

Cadbury Script is an element of visual identity unique to the company, which is based on the signature of William A. Cadbury; the son of Richard Cadbury who was Chairman of Cadbury Brothers. The script logo has been modified over the years having been quite fussy initially. The script is exclusive to the word 'Cadbury'. The logo is prominently present on the pack, sign or other material for the chocolates and the promotion.

Table-1 and Table-2 show the pricing of Dairy Milk vis-a-vis the competitors in the milk chocolate segment:

Cadbury follows a dual price strategy i.e. Premium pricing as well as Penetrative Pricing. Cadburys Dairy Milk charges a premium for its milk chocolate in the range of 15-20% higher than similar chocolates from Nestle, and significantly higher than the Amul Chocolates. Such a price premium Dairy Milk is able to charge is reflective of the Brand Equity that this brand possesses. In consonance with its continuing objective of reaching a wider consumer base, Cadbury's Dairy Milk has introduced small pack sizes of Dairy Milk as well as other chocolates at lower price points. Cadbury Dairy Milk currently has three major price points: Rs.5, Rs.10 and Rs.15 per chocolate. While the Rs.5 variant makes it affordable to all consumers including low affordability segment, it has the Rs.40 and Rs. 65 packs for high usage and gift pack segments.

Cadbury's new global marketing strategy called 'Choose Cadbury' perfectly illustrates how a brand can evolve and how different messages can be communicated without losing the core strength and brand values that are already established. The central message of the 'Choose Cadbury' strategy hinges on the established glass and a half symbol. Is the glass half full or half empty? Cadbury suggests that the

glass is always half full appealing to our emotions; therefore, in choosing Cad bury, consumers are taking a decision to embrace the positive. In this 'Choose Cadbury' campaign, the product ingredient of milk has been elevated from a practical, rational platform to an emotional one Cadbury promises to deliver on optimism, happiness and a feel-good factor. If a brand can do all this, the decision to purchase this brand over all other chocolate brands seems to be logical and inevitable. The 'Choose Cadbury' strapline is a call to action designed to motivate consumers by giving more reasons to remain brand loyal (Cadbury is Chocolate - feels good i.e. positive, uplifting, mood enhancing, providing enjoyment and happiness). At no stage in the evolution of the Cadbury brand has there been as much reliance on taking ownership of the emotional side of eating chocolate as there is now. Owning the emotional territory for chocolate has helped Cadbury to elevate its product in the mind of the consumer. With the 'Choose Cadbury' campaign consumers are being offered both logical and emotional reasons to buy a Cadbury product as a first option on every occasion.

In India, the challenge that Cadbury's faced was how to align their Indian strategy to their international positioning yet ensuring a significant amount of localization. The challenge has been handled with remarkable effectiveness and innovative thinking such as active use of Hindi for most of their campaigns. Even while going for celebrity endorsements, category ownerships or such strategies, the cultural aspects have been well taken into account using visual imagery. Before we delve into an analysis of their positioning strategies, it will make sense to look at the key campaigns launched by Cadbury's Dairy Milk.

Since early 1990s, Cadburys ran various advertising campaigns of Cadburys primarily television-led campaigns to re-position Cadbury's Dairy Milk (COM) depending upon changing marketing requirements. Some of the campaigns of Cadbury's were:

Campaign 1: Kuch khas hai zindagi mein, kya swaad hai zindagi ka

This campaign came at a time when Cad bury got stuck in a mindset trap, where it was perceived as something meant for kids, something which was seen as indulgent product and something, which wasn't meant for the elders. This led to brand stagnation and what was required was to break free of this mould and establish COM as something that could be enjoyed by people across age barriers.

The jingle stated 'kuch khos hai zindagi mein, kya swaad hai zindagi ka'. The ad launched Cadbury's Dairy Milk (COM) as a brand for both the kids and the adults, something that could be savored by people across age barriers. The ad demonstrated the consumption of chocolates in moments of excitement, joy and fun by people including the kids, teenagers and even elders. The message being delivered was- "Dairy Milk is for the joyous moments, and can be enjoyed by people across age groups". Be it the teenager dancing on a winning cricket shot, or a grandfatherly figure kicking a football, the message can be said to have been delivered with perfection.

Campaign 2: Khaane walon ko khaane ka bahana chahiye

The previous campaign enforced the idea of chocolate consumption across age groups but the sales again stagnated and then came the 'khaane walon ko khaane ka bahana chahiye' campaign. The advertisement was communicated to the Indian mindset as simple yet subtle message. The message was "You don't need a special reason to eat a COM". On the other hand, the visual imagery of a wedding celebration connected the chocolate with such events and this was the first step at moving the brand beyond individual celebrations towards event-level celebrations. This positioning helped in establishing COM as a popular household name as people started associating with its name, across the big town-small town divide, across age barriers, across income anomalies and across barriers of culture. By including popular MTV bakra fame VJ Cyrus Broacha, the brand continued the association with fun and joy, while projecting the chocolate as a product for all age groups and celebrations.

Campaign 3: Saath rahe har pal

This short campaign of 'Saath rahe har pal' had two back-to-beck ads enforcing the image of a friend who was there to see you through good and bad times. The idea behind these campaigns was to position COM as someone you could rely on to be your friend when the chips are down. It was a shift in positioning strategy by not focusing on increasing the category itself but positioning it to be a friend for both good and bad times, a real companion.

Campaign 4: Kuch Meetha Ho Jaaye

The new communication from Cadburys Dairy Milk has extended the core promise of happiness to yet another 'moment of joy' in one's life, with the tag-line, ‘Kuch meetha ho jaye'. The communication aimed to turn chocolate consumption into a habit. In spite of a pronounced sweet tooth, chocolates don't figure in our consideration set on an everyday basis. Cadbury wanted to make chocolates and Cadbury's Dairy Milk an intrinsic part of the consumer's life. Such a strategy makes economic rationale too. Against a Chocolate Market of Rs. 350-400 crores, the Indian sweet market is estimated at Rs. 11,000 crores. By using Amitabh Bachchan in a humorous setting, the message being delivered is to consider Dairy Milk as a 'sweet' and not just a chocolate. The sweets are an important part of the Indian Culture and Dairy Milk wants to be a consideration for the sweets, as a gift or a normal purchase. Once again, the campaign continues to stress the relevance of the product to all age groups as well as the central theme of joy and celebration. Such a category ownership stance that they have taken has the potential to provide big benefits to the company.

The new campaign introduces Cadbury Dairy Milk Desserts with Tirarnisu and Kalakand flavored creme centre. The ad focuses on its mouth-watering taste to compliment every meal as the headline and subhead double up to make a good, witty feel to the brand.

In 2005, Cadbury tied up with Mobile2win for their first-ever wireless activity in India. The idea was to create hype and excitement around the re-launch of Cadbury Bytes (a bagged snack with wafers and chocolate, hugely popular as an alternative snack) and felt that the SMS promotion would not only bring in interactivity with the desired TG (kids and teens in Southern India) but also reach out to a large no. of people in the most cost effective manner. It was a pull activity, which was linked to the TVC's broadcast on Cartoon Network & Sun Network in the South. At the end of the TVC there was a 5 sec tag, which said SMS BYTES to 8558, and you could win one of the 2 Sony play stations, T-shirts and 1000 VCDs, in turn receiving an overwhelming response.

Today, India is the second largest market for Cadbury's Dairy Milk in the world. Marketing in Cadbury had been about reshaping consumer habits, about breaking sociocultural barriers, about emotions The Indian success saga has been designated as the "Blueprint for success" for all international markets to emulate.

Questions

1. What does Cadbury India need to do to position their CDM brand and its brand extensions if they want to garner significant volume growth and reduce dependence on a single category:--Chocolates - to drive growth?

2. How can the company increase share of chocolates in the total amount spent on an average by a consumer on these impulse products?