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Cadbury 
 
Category: Case Study Analysis | Word(s): 1985 | Page(s): 8 | View(s): 394 | Rank: 0
 
Introduction
Today the share of promotions in the marketing budget of a typical consumer products' company is continually on the rise. They may be preferred because good promotional exercises provide the facility to carry out controlled activity on a focused target group and unlike mass media advertising, it directly addresses and involves the consumer.

There are other reasons that abet their popularity, they are: -
? Consumer promotions produce results
? The results occur quickly
? The results are measurable
? Consumer promotions are relatively easy and in expensive to implement
Different marketing activities affect various aspects of consumer buying process. Consumer promotions generally hit directly at the decision and purchasing stages of the buying process. Thus, they affect behaviour directly producing immediate results. Consumer promotions can thus be defined as "Marketing and communication activities that change the price / value relationships of a product or service, thereby generating immediate sales and altering long term brand value". Various types of consumer promotions are coupons, contests, sampling, cross promotions, bonus back, freebies, etc.
Brand managers have, thus, a plethora of choices when opting for a consumer promotion. How they actually go about choosing it is critical in determining the extent of success the promotion would achieve. To design an effective promotion, the brand manager must understand what is it that puts that gleam in the consumer's eye without distorting its brand equity.

Promotions must be synergistically linked to the brand attitude. Promotions or below-the-line-marketing is spreading like craze.
Though there is a considerable change in the presentation and approach. Companies are throwing just about anything to boost their branding and sales. From tangible to intangible, everything is being effectively exploited. The next most effective and result oriented strategy is Give-away. Considering the influence of the housewife in the day-to-day buying decisions, this strategy is yielding outstanding results. Besides, considering the rising influence of children in the buying decisions this strategy surely yields results. Creativity and innovation is the key to this form of promotions. Specialized Give-aways make excellent premiums.
Consumer Promotion by Cadbury's
Cadbury had embarked on a strategy which involves increased consumption of its products through enhanced reach, affordability and visibility, which it feels, can be attained by creating new markets, widening the depth of its distribution network and working towards a comprehensive portfolio with brands across all price segments.
On the distribution front, the company increased the number of its distribution outlets from the present 4 lakh to 5 lakh by the year 2000. To attain the objectives of affordability, over the past two years, Cadbury has been changing its product portfolio from pure chocolate items to confectionery, which includes caramel, nuts, raisins and wafers.

The aim is to bring down the price line and enter other markets than the purely urban ones. In line with this, it launched Googly in early 1997, and followed it up with products like Mocka and English Toffee. The strategy of the company has been to launch one major product and follow it up with smaller products, for instance, the launch of Picnic was followed by Cadbury Gold and a couple of sugar confectionery launches.
Intense competition from Nestle is one of the reasons Cadbury has re-worked its product range and made efforts to enter the mass product segment. In 1998, the company moved into smaller sized versions of Diary Milk and Perk and found to its delight that the introduction of economy priced models led to more people eating chocolate. In the same year, small packs increased chocolate volumes of Cadbury by 19 per cent and market. Nestle, with a 20 per cent share in the chocolates market responded with Munch, a chocolate brand came to counter Picnic.
Cadbury Dairy Milk chocolate was first introduced in the early 1900s, it made an immediate impact quickly becoming the market leader. The success story has continued. It is still the top selling chocolate brand in the country and the Cadbury Mega Brand's broad family of products today has an international retail value approaching US$ 1 billion. As an international brand, Cadbury Dairy Milk carries the same distinctive image all over the world. Wherever you buy a bar of Cadbury Dairy Milk, the pack design will be exactly the same, only the language will be different.
The first two additions to the Cadbury Megabrand family were Fruit & Nut in 1928 followed by WholeNut in 1933. The family has since been extended and there are now 10 varieties of Cadbury Dairy Milk bars in the range. In India Cadbury dairy milk is the most loveable one for kids as well as grown ups available in various sizes and prices.

Advertising highly influences consumers due to its brand ambassador Amitabh, jingles and also concentrates on emotional advertisements. Nestlé's liquid paste format Chocostick, priced at Rs 2 a unit, has been a runaway success and Cadbury countered Nestlé's Chocostick with a similar offering - Chocki. The mass market is categorized by Rs 5-10 price points, and according to industry data, this segment accounts for 70 per cent of overall chocolate sales in the domestic market. Urban penetration of chocolates among adults is just about 15 per cent in India, according to industry estimates.
Cadbury Heroes was launched in September 1999 meant for everyone, Tiny little bits of fun for everyone to share. A mix of Cadbury bars packed in a tub format that is ideal for informal everyday sharing. Consumers love to rummage and scrimmage in the tub to find their favourites. Includes Cadbury Dairy Milk, Cadbury Dairy Milk with Caramel, Cadbury Dairy Milk Whole Nut, Twirl, Time Out, Dream, Fudge, Crunchie, Picnic, Nuts About Caramel. Consumers love the brand - it's perceived as more fun, up-to-date and great for younger people.
It was launched in September 1999 in UK with the "People Magnet" campaign that features famous heroes being attracted to the tub. In 2002, a new campaign was introduced which showed adults in everyday situations sharing Heroes and having a "Tiny little bit of fun.
The brand also features as part of Cadbury's sponsorship of Coronation Street, where people play jokes on each other, whilst they share the tub of Heroes. Cadbury Picnic - crispy and chewy caramel covered in whole raisins, peanuts and Cadbury milk chocolate. It was launched in 1958 under Fry's name and re-launched in 1999. 'On the go' chocolate snack.

Probably one of the most memorable campaigns for the brand was one, which featured a camel called Calvin, which was singing a song about the 'chew' of the bar. The 1994 campaign, was a spoof of a washing powder ad and showed lots of the ingredients being poured over a housewife, saying that there were so many ingredients in the bar that it wasn't possible to fit them all into one ad.
The Australian advertising campaign positions Picnic as 'deliciously ugly!' In India, it launched with great anticipations from the part of consumers but it was a failure as they didn't accept it like any other product from the house of Cadbury. Cadbury Creme Egg was introduced by Cadbury brothers in the early 1920's Positioning. There have been 5 major Cadbury Creme Egg campaigns. "Shopkeeper" campaign of the 70's in which a boy asks for 6000 Cadbury Creme Eggs "Irresistibly" campaign showing characters prepared to do something unusual for a Cadbury Crème Egg.
The first TV Advertising campaign to feature the "How Do You Eat Yours," theme was achieved through the zodiac signs. The Flake bar was originally launched in 1920 after in 1930 Flake 99 ice cream accompaniment was launched and in 2001 Snowflake (a crumbly white chocolate Flake centre covered in milk chocolate).

A variety of different sizes of multi-packs, Flake cakes and Ice cream cornets are now also widely available. The company claims that the chocolate indulgence, its crumbly texture means that it forces people to stop what they are doing and devote their full attention to eating it. The advertising always features a woman who is choosing to enjoy her Flake moment in a unique, and dramatically indulgent way.
It is the most popular personal gift assortment in the market. It is love with a lighter touch, a spontaneous token of affection. It has been supported by arguably the most famous advertising character in British TV history, the Milk Tray Man, who was featured on TV from 1967 to 2000. It re-launched this in 2003 to bring it up-to-date as the light-hearted token of affection for the 21st Century. For the first time, the Special Edition will contain a mix of milk, white and dark chocolates in one delicious selection. The new tag line for Milk Tray is "Now with extra mmm and ahh!"
Contests of various kinds constitutes widely used sales promotion tool. Consumer contests take a variety of forms like family contest, quiz contest, beauty contest, suggesting a logo, etc. To get vast masses of consumers interested in the brand and induce them to buy, it is the central idea in all consumer contests.

Cadbury announced fabulous prizes around the world economy class air tickets for two adults and two children plus Rs 1 lakh in prize money. There were other prizes too, Ambassador cars, TV, Videos, Refrigerators, Cameras. The participants had to submit a minimum number of Cadbury's wrappers and coin a jingle to participate in the contest. The campaign not only helped to increase the sales of Cadbury's, it also helped them to counter the competition from Amul, who introduced new flavours and improved packaging.
Promotion on the Internet is emerging as the new trend. Manufacturers like Cadbury run promotions on specific sites that attract audience who are interested in promotions and contests. Sites like Contest2win.com and Hungama.com are examples were they run online contests offering exiting prizes.


Website:
http://www.cadburyindia.com/

Introduction:
Cadbury India Ltd. is a 51% subsidiary of UK based Cadbury Scwepps plc. The company is a market leader in the chocolates segment and also has a presence in confectioneries through its Eclairs and Googly brands. The company has revamped its image in the recent past and has become aggressive in new brand launches. The managing director Mr. Rajiv Bakshi has been responsible for the change in the culture of the company to a more proactive and aggressive company than before. The parent has launched the "managing for Value" initiative which was implemented by the company leading to a higher focus on profitability. Cadbury has a over 71% share in the chocolates market and it competes with Nestle and Amul. Small pack sizes and innovative campaigns like "A Cadbury in every pocket" focus on increase in consumption in lower income categories. In future, penetration gains will come from introduction of economy brand variants and by increasing distribution reach. The company also has a 15% share in the malted beverages segment through its "Bournvita" brand

Major line of Business:
Chocolates and Confectionery Products

Select Products and Services:
Chocolates and Confectionery are the main lines of business. The popular chocolate brands of the company are Cadbury Dairy Milk, Gems, Perk, Picnic, 5 Star and Relish. In chocolates the company competes primarily with Nestle and in confectioneries with Parry's and Parle.

Key Differentiating Factors:
Is the market leader in chocolates. Under the leadership of Rajiv Bakshi has become aggressive in new launches. At this moment , Cadbury has a presence primarily in metros, "A" and "B" category towns. Unlike most FMCG companies that are aggressively targeting rural consumption, Cadbury will focus more on lower income households in urban and semi-urban towns.

Financial Statistics:
1999 Sales: Rs. 4.2 billion
PAT: Rs.260 million

Personnel Highlights:
NA

Opportunities:
Marketing, Brand Management, Corporate Finance, HRD,
 
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