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SCOPE OF THE STUDY

As learning is a human activity and is as natural, as breathing. Despite of the fact that learning is all pervasive in our lives, psychologists do not agree on how learning takes place. How individuals learn is a matter of interest to marketers. They want to teach consumers in their roles as their roles as consumers. They want consumers to learn about their products, product attributes, potential consumers benefit, how to use, maintain or even dispose of the product and new ways of behaving that will satisfy not only the consumer’s needs, but the marketer’s objectives.

The scope of my study restricts itself to the analysis of marketing strategies and the subsequent change in consumer preferences, perception and consumption of Cadbury Chocolates.

There are many other brands of chocolates available but my study is limited to Cadbury India leaving behind the others. The scope of my study is also restricts itself to Kolkata region only.

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Introduction

Confectionery is a unique impulse category because it’s eaten regularlythroughout the day rather than specifically at meal times. Confectionery nowaccounts for 24% of all food media spend, more than any other food category.According to a survey, purchase levels for confectionery are significantly higherthan any other impulse category

(Refer Fig1). Fig1: % Population buying each Impulse Category

The four major confectionery categories are- chocolate confectionery, sugarconfectionery, gum and cereal bars. The Indian confectionery market reached avalue of around $500 million in 2005. India’s chocolate market is dominated bytwo just companies—Cadbury, which entered the country 60 years ago and hasnearly 60% market share, and Nestlé, which has about 32%. The two haveprospered by luring consumers with attractively packaged chocolateassortments to replace the traditional dried fruits and sugar confectioneriesoffered as gifts on Indian holidays, and by offering lower-priced chocolates,including bite-sized candies costing less than 3 cents. With growth just startingto kick in, Asia is going to remain a sweet spot for chocolate makers for years tocome.

The Indian chocolate market is estimated to be worth Rs. 3.2 billion, with anannual growth rate of 10 percent. Per Capita Consumption levels are very low inIndia, as compared to 8.7 kg per year in the U.K. The market therefore offerstremendous potential for growth. In our analysis we are concentrating on thechocolate industry in general and Cadbury’s in particular. Cadbury India Limited(CIL), a part of the Cadbury Schweppes Group, is India’s leading confectionarymanufacturer. Cadbury’s Dairy Milk, 5 Star, Éclairs, Perk and Gems are thelargest selling brands in their segments. CIL is estimated to have a 65 percentshare of the Indian chocolate market. In fact the word Cadbury is a classicexample of a brand coming to symbolize a productcategory. 2

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About Cadbury

Cadbury is a British multinational confectionery company owned by MondelēzInternational. It is the second largest confectionery brand in the world afterWrigley's. Cadbury is headquartered in Uxbridge in Greater London and operatesin more than fifty countries worldwide.

Cadbury was established in Birmingham, England in 1824, by John Cadbury whosold tea, coffee and drinking chocolate. Cadbury developed the business with hisbrother Benjamin, followed by his sons Richard and George. George developedthe Bourneville estate, a model village designed to give the company's workersimproved living conditions. Dairy Milk chocolate, introduced in 1905, used ahigher proportion of milk within the recipe compared with rival products. By1914, the chocolate was the company's best-selling product.

Cadbury merged with J. S. Fry & Sons in 1919, and Schweppes in 1969. Cadburywas a constant constituent of the FTSE 100 from the index's 1984 inception untilthe company was bought by Kraft Foods in 2010.

About Cadbury India

Cadbury India began its operations in India in 1948 by importing chocolates. Itnow has manufacturing facilities in Thane, Induri (Pune) and Malanpur (Gwalior),Hyderabad, Bangalore and Baddi (Himachal Pradesh) and sales offices in NewDelhi, Mumbai, Kolkata and Chennai. The corporate head office is in Mumbai.The head office is presently situated at Pedder Road, Mumbai, under the nameof "Cadbury House". This monumental structure at Pedder Road has been alandmark for the citizens of Mumbai since its creation. Since 1965 Cadbury hasalso pioneered the development of cocoa cultivation in India. For over twodecades, Cadbury has worked with the Kerala Agricultural University toundertake cocoa research.

Cadbury was incorporated in India on 19 July 1948. Currently, Cadbury Indiaoperates in five categories – Chocolate confectionery, Beverages, Biscuits, Gumand Candy. Some of the key brands are Cadbury Dairy Milk, Bournvita, 5 Star,Perk, Bournville, Celebrations, Gems, Halls, Éclairs, Bubbaloo, Tang and Oreo. Itsproducts include Cadbury Dairy Milk, Dairy Milk Silk, Bournville, 5-Star,Temptations, Perk, Gems (a version of M&M's), Eclairs, Bournvita, Celebrations,Bilkul Cadbury Dairy Milk Shots, Toblerone, Halls, Tang and Oreo.It is the market leader in the chocolate confectionery business with a marketshare of over 70%. Cadbury India, on 21 April 2014, changed its name toMondelez India Foods Limited. 3

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Objectives of the Project

To examine the marketing strategiesTo conduct a SWOT analysis of Cadbury IndiaTo conduct a PEST analysis of Cadbury IndiaTo understand the essence of the 4 P’s of Marketing with respect to the marketing efforts of Cadbury India

To analyze the impact of Cadbury’s stunning marketing techniques in causing a sea-change in the Indian psyche.

AimBy conducting research to evaluate marketing strategies of Cadbury India by using proper theories.

The objectives of the marketing strategies employed by the company are manifold. They have been segmented into proper heads for our greater understanding.

• Corporate objectives

• Sales objectives

• Advertising objectives

Each of the following are discussed in detail ahead.

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Corporate Objectives

Broadening consumer appeal and extending reach to newer markets Sustained growth of market share through aggressive product development Striving for international quality in the products and processes Focusing on cost competitiveness, productivity and innovative utilization of

assets Energizing and developing its people

In India, Cadbury India has defined its vision as

"Life full of Cadbury, Cadbury full of life"

India wants to achieve in the next four years what it has in the last 50 years.

Marketing Objectives:

• Double its turnover—which stood at Rs.1, 0000 crore in 2014—by 2020. Thiscalls for a growth rate of over 20 percent annually and will be done bysetting up new capacity, and increasing volumes

• Get more people to eat more chocolate, which calls for making it moreaffordable and being more innovative

• Could get into new product categories like gums where the global portfoliois impressive

• Aiming for a larger footprint in theconfectionery space

• To be stronger in health drinks

Like most players with near-monopolyshares, Cadbury runs the risk of losing shareto new players like Hershey’s, ITC (with brandslike Minto and Candyman) as well as topremium imported chocolates. But that may

not be much of a worry if Cadbury succeedsin growing the market. They could, forinstance, hold a 50 per cent share but of amuch larger pie.

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Advertising Objective

Leverage further the Cadbury label, which is what the company has been doing with aggressive advertising and promotions (these costs account for 12-13 per cent of sales, with 30 percent of that spend being below the line).

Consumer focus:

• Appealing to a broader range of consumers is at the heart of the plan.• Future activities will cover further improvisation of product & packaging to

deliver superior value to the consumers• Greater innovation in packaging & product presentation across various

power brands• Product introduction to provide new texture & taste experience to

consumers

Suppliers and business partners:

• Continue using Ethical Sourcing Standards when working with suppliers

• Continue to engage in regular dialogue with its suppliers and responds to their suggestions

• Continue evaluating potential suppliers against a set of standards such as environmental

• protection and ethical labour practices prior to doing business with them

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Analysis of Overall Objectives ofCadbury V/S its Competitor (Nestle)

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Situation Analysis

The chocolates market is estimated at around 33,000 tonnes valued at approximately Rs 8.0 bn.

Cadbury is the leader in Chocolate with 70% share. It hasactually become the generic name for chocolates in India.

Cadbury with its Dairy Milk, Five Star, Milk Treat, Eclairs,Golden, is ruling the roost. In chocolate-based drinks, itclaims

nearly 50% of the market. Cadbury India's market share incocoa-based products is 35%, with Dairy Milk brand aloneaccounting for 29%. Perk and Five Star account for another20%. Cadbury derives 76% of its revenues from chocolatesand other confectionery sales.

The next closest competitor to Cadbury in this segment isNestle 22%. Besides that large foreign brands like Hershey’s and local ones like ITC are trying to tread into Cadbury’s turf. Imported chocolates are available via modern trade in higher endsegments where Cadbury’s presence is arguably weaker.

To push sales further, chocolate majors have been Targeting adult audiences. Chocolates are being presented as snack food for the new target audiences. Another strategy sought is the introduction of smaller editions.

Although the players have resorted to very aggressivepromotional drives, there has been stagnation in the market from time to time perhaps, due to increase in cocoa prices.

After the worm controversy in October 2003, there was ameltdown in chocolate sales. Cadbury India appears to be on a recovery path.

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Chocolate Market in India

India is the world's fastest growing market for chocolates. Registering 15%

annual growth between 2008 and 2012, the Indian chocolate industry is

projected to grow at an even higher rate in the coming years

Currently, the Indian chocolate market is worth around Rs 5,562 crore.

The Population of India in 2013 is 1.27 billion. The chocolate consumption

number comes around 2,09,550 ton.

400 Kgs of chocolate consumption in India per minutes.

Low priced unit packs, increased distribution reach and new product

launches can be said to have fuelled this growth.

The industry has a positive outlook due to phenomenal growth in the

confectionery industry, rising per capita income and gifting culture in the

country. The per capita consumption of chocolates is increasing in the

country which will continue to flourish the market revenues. It is expected

that India chocolate industry will be growing at the CAGR 23% by volume

between the years 2013-2018 and reach at 3,41,609 Tons. The dark

chocolates are expected to account for the larger market share when

compared to milk and white chocolates in the coming years. The

introduction of medicinal and organic ingredients in the manufacturing of

chocolates had lead to a new trend and development in the country, which

will be adapted by major manufacturers to remain active in the market.

Source:

Economic Times

3rd May, 2014

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Chocolate Market in India

In India chocolate consumption was very low in the early 90’s but as the decade

advanced the consumption drastically increased. The late 90’s witnessed a good

chocolate market condition. The chocolate market in India is dominated by two

multinational companies – Cadbury and Nestle. The national companies - Amul

and Campco are other candidates in this race. Cadbury holds more than 67% of

the total share of the market. Nestle has emerged by holding almost 21% of the

total share. Apart from chocolate segment, there is also a big confectionery

segment which is flooded by companies like Parry's, Ravalgaon, Candico and

Nutrine. All these are leading national players.

The multinational companies like the Cadbury, Nestle and Perfetti are the new

entrants in the sugar confectionery market. (Management paradise) There are

several others which have a minor share in these two segments. According to

statistics, the chocolate consumption in India is extremely low. If per capita

consumption is considered, it comes to only 160gms in the urban areas. This

amount is very low compared to the developed countries where the per capita

consumption is more than 8-10 Kg. Observing this fact it would not be

appropriate to consider the rural areas of India as it will be extremely low. This

low consumption is owing to the notion behind consuming chocolates. Indians

eat chocolates as indulgence and not as snack food. The major target population

is the children. India has witnessed a slow growth rate of about 10% pa from the

70’s to the 80’s. But as the century advanced the market stagnated.

This was the time when Cadbury launched its product- Dairy Milk as an anytime

product rather than an occasional luxury. All the advertisements of Dairy Milk

paid a full attention to adults and not children. And this proved to be the major

breakthrough for Cadbury as it tried to break the conventional ideas of the

Indians about chocolate. One of the oldest products of Cadbury which is still

going strong is the Cadbury’s Five Star which was launched in the year 1968 in

India. Cadbury’s Five Star is the most resistant chocolate to temperature and

hence it is widely distributed all across the country.

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Chocolate Market in India

In early 90’s, the Cocoa prices became high due to which the manufacturers were

forced to raise their product prices. But as the new variety of chocolate was

launched – the wafer and the chocolate variety with the brand name Perk, the

volume grew significantly. In the late 90’s new players like Nestle also introduced

these wafer chocolates with the name Kit Kat resulting into the growth of the

market.

Dark Chocolate is growing at a rate of 13% globally. But India is still at nascent

stage. There is less than 25% awareness amongst the young age segment.

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RESEARCH METHODOLOGY

Achieving accuracy in any research requires in depth study regarding the subject. As the prime objective of the project is analyze the marketing strategies of Cadbury, the research methodology adopted is basically based on primary data via which the most recent and accurate piece of first hand information could be collected. Secondary data has been used to support primary data wherever needed.

Primary data was collected using the following techniques

• Questionnaire Method

• Observation Method

The main tool used was, the questionnaire method, observation method has been continuous with the questionnaire method, as one continuously observes the surrounding environment he works in.

Procedure of research methodology

Target geographic area was KolkataTo the above mentioned geographical area questionnaire was given.

Finally the collected data and information was analyzed and compiled to arrive at data the conclusion and recommendations given.

Sources of secondary

Used to obtain information on , Cadbury and its competitor history, current issues, policies, procedures etc, wherever required.

• Internet

• Magazines

• Newspapers

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RESEARCH METHODOLOGY

Data Analysis:

The data is analyzed on the basis of suitable tables by using mathematical techniques. The technique that I have used is bar technique.

Survey design:

The study is a cross sectional study because the data were collected at a single point of time. For the purpose of present study a related sample of population was selected on the basis of convenience.

Sample Size and Design:

A sample of 100 people was taken on the basis of convenience. The actual consumers were contacted on the basis of random sampling.

Research Period:

Research work is carried for 3 weeks.

Research Instrument:

This work is carried out through self-administered questionnaires. The questions included were open ended, dichotomous and offered multiple choices.

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THE WORM CONTROVERSY

In India chocolate consumption was very low in the early 90’s but as the

decade advanced the consumption drastically increased. The late 90’s

witnessed a good chocolate market condition. The chocolate market in

India is dominated by two multinational companies – Cadbury and Nestle.

The national companies - Amul and Campco are other candidates in this

race. Cadbury holds more than 67% of the total share of the market. Nestle

has emerged by holding almost 21% of the total share. Apart from

chocolate segment, there is also a big confectionery segment which is

flooded by companies like Parry's, Ravalgaon, Candico and Nutrine. All

these are leading national players. The multinational companies like the

Cadbury, Nestle and Perfetti are the new entrants in the sugar

confectionery market. (Management paradise) There are several others

which have a minor share in these two segments. According to statistics,

the chocolate consumpt Cadbury & the Worm Controversy

The discovery of worms in some samples of Cadbury’s Chocolate in early

October 2003 created one of the biggest controversies in India against a

Multi-National reputed for being a benchmark of quality.

The controversy created an deep adverse impact on the company with their

sales not only drastically dipping down, but at the same time allowing the

competitors to establish their foothold and taking maximum advantage of

Cadbury’s misfortune.

The controversy, and the adverse publicity received in several countries, set

back its plan of outsourcing model which would have resulted in significant

revenue generation, several months back.

The "worms’ controversy" came at the worst time….the next few months

were the peak season of Diwali, Eid & Christmas. Cadbury sells almost

1,000 tonnes of chocolates during Diwali. In that year, the sales during

festival season dropped by 30 per cent. The company saw its value share

melt from 73 per cent in October 2003 to 69.4 per cent in January 2004.

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THE WORM CONTROVERSY

In May, however, it inched up to 71 per cent. CDM sales volumes declined

from 68 per cent in October ’03 to 64 per cent in January 2004

Clearly, the worm controversy took a toll on Cadbury's bottom-line. For the

year ended

December 2003, its net profit fell 37 per cent to Rs 45.6 crore (Rs 456

million) as compared with a 21 per cent increase in the previous year.

However, Cadbury’s reiterated that all through the 55 years of leadership in India that it has remained synonymous with chocolates and has remained committed to high quality and consumer satisfaction.

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KILLINNG THE WORMS

Cadbury’s Fight- Back:-

'Project Vishwas'-“Steps to ensure quality & regain the confidence”

Following the controversy over infestation in its chocolates, Cadbury India

Ltd unveiled 'Project Vishwas', a plan involving distribution and retail

channels to ensure the quality of its products.

The company's team of quality control managers, along with around 300

sales staff, checked over 50,000 retail outlets in Maharashtra and replaced

all questionable stocks with immediate effect.

The Vishwas programme was intended to build awareness among retailers

on storage requirements for chocolates, provide assistance in improving

storage conditions and strengthen packaging of the company's range of

products.

Cadbury reduced the number of chocolates in its bulk packets to 22 bars from the present 60 bars. These helped stockists display and sell the products "safely and hygienically" 190,000 retailers in key states were covered under this awareness programme.

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THE BIG B Factor

The BIG ‘B’ Factor

The big factor that has pushed up CDM sales is the Amitabh Bachchan

campaign. It helped restore consumers' faith in the quality of the product.

In early January, Cadbury appointed Amitabh Bachchan as its brand

ambassador for a period of two years.

The company believed that the reputation he has built up over the last

three decades complements their own, which was built over a period of 50

years. Yet, the entire credit of recovery could not be attributed to the brand

mascot.

Incisive action taken by the company also helped. Some of which were:

1. Responded to consumers concern over the issue rapidly. Also, the

communication campaign worked effectively in giving out the central

message.

2. The packaging was changed to include a sealed plastic wrapper inside

the outside foil. Cadbury’s launched a new 'purity-sealed' packaging for its

flagship product, Cadbury Dairy Milk. The packaging is in response to

foreign bodies, notably worms, being found in its products. Over the next

few weeks Cadbury will work towards introducing either a heat-sealed or a

flow-pack packaging that offers a high level of resistance to infestation from

improper storage.

3. New advertising & promotion campaigns were in place which accounted

for an Ad spend of nearly Rs 40 crore (Rs 400 million) Cadbury invested

nearly Rs 25 crore (Rs 250 million) this year on new machinery for the

improved packaging.

Cadbury Singing Sweetly Again:-

All is well that ends well. And for Cadbury’s India, nothing can be sweeter

than Regaining Back the Consumer Confidence.