Aim of this presentation is to analyse challenges, orientation, concepts, SWOT and related issues in respect of Cadbury’s operations in India. A ppt by students of PGDM 2012-14 of Era Business School, New Delhi

1. Cadbury's Dairy Milk Chocolate:
Evolving "Positioning" over Time
A Case Study
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Ajay K Raina Ajay K Raina

2. THE TEAM
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3. Extracts From Case Study
• Traces its iconic rise from a humble origin in UK in
1824.
• Evolution from a competitive local product to a
gold standard across the globe.
• Status of Cadbury Dairy Milk (CDM) chocolates and
Bournvita health drink in India.
• Various campaigns for its chocolates in India.
• The way ahead
– How to reduce single category dependency?
– How to capture larger share impulse spending?
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4. CADBURY INDIA
• Cadbury India is a wholly owned subsidiary of Cadbury
Schweppes .
• Employs nearly 2,000 people across India.
• 2100 Distributors and 4,50,000 retailers.
• Cadbury is mainly into three segments
– Chocolates - Over 70 per cent market share.
- CDM, Fruit & Nut, Crackle, Temptations,
5 Star, Perk & Celebrations Gift boxes.
– Sugar Confectionery –Approx 10 percent market share.
- CDM Eclairs, Gems, Gums and minty Halls.
– Food Drinks –Around 19 per cent
-Bournvita , Drinking Chocolate and Cocoa
powder.
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5. AIM
• Aim of this presentation is to analyse challenges,
orientation, concepts, SWOT and related issues in
respect of Cadbury’s operations in India.
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6. SCOPE OF PRESENTATION
•
•
•
•
•
Marketing Environment and Strategic Analysis.
Brand Building.
Market Challenges and Segmentation.
SWOT Analysis.
Recommendations
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7. PART 1
MARKETING ENVIRONMENT AND
STRATEGIC ANALYSIS
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8. KEY SUCCESS FACTORS
• Fundamental. The biggest strength of Cadbury is its
R & D that helps to form new products or launch a
product that is already being marketed in other
countries.
• India Specific.
– The pioneer advantage.
– A strong endorser brand.
– Right product formulation.
– Presence in all segments.School
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9. STRATEGIC BRAND ANALYSIS
Competitor Analysis
*Strengths and Weaknesses
*Strategies
External Environment Analysis
*PEST
*Strategies.
CADBURY
Organization Analysis
*Vision
* Values and culture
*Brand texture
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Customers Analysis
*Need gap analysis
*Consumer behaviour
Ajay K Raina

10. ORGANIZATION ANALYSIS
• VISION:- “Cadbury in every pocket” and “Superior Shareholder Value”.
• VALUES:- An international company, proud of its long heritage.
- Respectful of the social and natural environment.
- Supportive of their consumers, customers and colleagues .
- Committed to the highest standards of corporate governance and
corporate and social responsibility.
• BRAND TEXTURE:– Associated with romance and sharing, today the richness and smoothness of
Cadbury chocolate is what makes it one of the world's favorite treats.
– Cadbury is a world-renowned name with more than 150 years of chocolate
heritage. Available in over 160 countries, Cadbury is the single largest brand in
chocolate on an international basis.
– Cadbury had realized that chocolates by itself do not satisfy any immediate
needs; so they would have to be associated with human feelings of romance,
magic, love and affection. Emotional attachment factor has lately been
modified to include the rational perspective so as to catalyze increased
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consumption of chocolates within the family.

11. COMPETITOR ANALYSIS
• Chocolate Market. Turnover of Rs. 4500 crore; has
three major market players :– Cadbury with 70% of the market share
– Nestle having 20% of market share
– Amul having a niche market of 7% and remaining 3%
with small players.
• Brown Drink Market. Turn over of 2000 Cr; has
following players:– GlaxoSmithKline Consumer Health Care Ltd – 72%
– Cadbury- 17%.
– Others (Heinz, Amul, HUL, Wockhardt, Nestle) – 11%
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12. NESTLE
• Strengths:
–
–
–
–
–
Market leader in coffee and baby food sector
Well-established distribution network extending to rural areas.
Strong brands in the FMCG sector.
Low cost operations
Large product portfolio.
• Weaknesses:
– Low presence in health drinks: - In comparison to Bournvita,
Horlicks and Boost the market penetration of MILO is very low.
– Low Market Share in chocolates as compared to Cadbury’s.
– Didn’t get the first movers advantage.
– Initially the distribution focus had been on the larger cities and
urban areas, which limited their customer base.
– Product Formulation.
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13. AMUL
• Strengths:
–
–
–
–
–
Strong and extensive distribution and sales network.
Large market penetration in dairy industry
Age old market presence carries a traditional image.
Quality and purity and trust as consumer relationship.
Value for money and low price.
• Weaknesses:
– No focus on the chocolate industry.
– Lack of organizational commitment.
– Amul chocolates have shown a very limited product
differentiation.
– Low retailers margin.
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14. FLANK AND SATELLITES
• Traditionally has maintained flank.
• Meant for pre-empting any moves by a competitor
by launching a brand of its own.
• Tactical brands like All Silk and Crackle.
• Used for the tactical purpose of plugging a gap in
the segment where the threat of entry by a rival
brand is imminent.
• Nestle's successful entry through KitKat in the wafer
segment.
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15. CUSTOMER ANALYSIS
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16. NEED GAP ANALYSIS vis-à-vis
COMPETITORS
 High (24/8K), Middle (18/5K) and Children (PM)
• Retail Price.
– Cadbury’s chocolates are costlier than rival products
like Nestle and Amul.
– Bournvita is cheaper than Complan and Horlicks but at
par with Boost.
• Packaging. Nestle and Glaxo have an edge while Amul
straggles.
• Brand Name. Descending order:– Cadbury, Nestle and Amul in chocolate market;
– Glaxo, Cadbury and Heinz.
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17. CONSUMER BUYING BEHAVIOUR
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•
•
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FMCG; low involvement product.
Variety Seeking Behaviour.
Characterised by lots of brand switching.
Holds 70 % of market share; this variety-seeking
behavior has not affected its sales negatively.
• Wafer chocolates segment - company faces strong
competition from Nestle’s Kit Kat.
• Need to increase brand loyalty for its brands to
deter competition.
• Need to increase consumer’s involvement with
chocolates.
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18. EXTERNAL ENVIRONMENT ANALYSIS
• The Chocolate Industry in India
– growing by nearly 35%
– predominantly urban with coverage of 95%.
• P – Political. Any change in taxation policy, labour
law, environmental law, trade restrictions, tariffs, and
political instability; picture looks stable.
• E – Economic. Economic growth, interest rates, exchange
rates and the inflation rate; reduced weights.
• S – Social factor. Younger nation- open to new launches;
better work force scenario.
• T- Technology. In-house R&D is the strength.K Raina
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19. PORTER'S 5 FORCES MODEL
Substitutes
Substitutes like Ice Creams, potato chips, biscuits,
soft drinks, chewing gum, are a source of threat as
well as opportunity for market expansion.
Suppliers
Major raw material
suppliers are cocoa
producers in Latin
American countries.
Due to negligible
Domestic production in
India, suppliers enjoy
high bargaining power.
Milk supply also
fluctuates, therefore, in
summer months, milk
suppliers gain sufficient
bargaining power.
Competitors
All the major players have
financial muscle to sustain
their brands;
All players following a pull
strategy.
Buyers
Since chocolates do not
satisfy any immediate needs,
it is not a necessary item.
Consumer power is very high
and consumers need to be
persuaded through various
positioning planks
to consume chocolates.
New Entrants
Imminent entry of global majors like Hershey's, Mars
etc. is bound to change the power equation in the
Indian chocolate market.
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20. PART 2 – BRAND BUILDING
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21. THE BRAND CADBURY IN INDIA
• Entry in 1948 - India was a tough nut to crack with its diversifications.
• Major challenge was to get people accustomed to chocolatesprimarily seen as a western taste .
• It decided to use a common platform that is universal to all cultures –
‘The platform of love and affection’. It used emotional appeals to
position its brand as a surrogate to parental affection for their kids.
• The positioning clicked for Cadbury but the brand audit done a few
years later revealed that it had restricted its market to the kids.
• The marketers decided to position the product ‘for the kid in all of us’.
• The communication for the new positioning was ‘The Real Taste of
Life’.
• It portrayed itself as a perfect expression of spontaneous happy,
joyous feelings.
• Cadbury conducts regular audits and tries to reinvent its strategies
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according to the findings of the audits.

22. BRAND IDENTITY
• Brand identity is a unique set of brand associations
that the brand strategist aspires to create or
maintain. These associations represent what the
brand stands for and imply a promise to customers
from the organization members.
• Gold promise.
• Joyful, Light-hearted, Carefree.
• Functional Benefit: Taste and contented
• Emotional Benefit: Happiness
• Self-Expressive Benefit: Being yourself; liberation
• Being a big time spender on advertisements,
Cadbury has, time and again, addressed this issue.
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23. BRAND POSITIONING
Positioning is the space occupied by Cadbury in the minds of the target audience
For whom?
*Kids, teens, mums, adults,
mature adults.
*(FOR EVERYBODY)
Why?
*Offers rich taste
*Kya swad hai zindagi main
CADBURY
When?
*All purpose consumable.
*Gifts, Light snack
Against whom?
*Competitors like
Nestle, Amul
*Substitutes like
Chips, Biscuits.
Idea of positioning Cadbury is toEra Business School
occupy a distinct space, which is differentiable, yet powerful.
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24. Basis of positioning
• Product based positioning.
– Kya swad hai zindagi main.
– Thodi si pet puja kabhi bhi kahi bhi
• Strong corporate brand.
– Consumers know they can trust a chocolate bar that
carries Cadbury branding.
– Symbiotic with some brands such as Dairy Milk.
– Distant relationship e.g. Crunchie.
– Positioning of the umbrella brand Cadbury is such that
it signifies trust to a great extent because of which the
brand has a massive fan following.
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25. ANALYSIS OF POSITIONING
• Cadbury’s main strength comes from it ability to market CDM
products after altering the theme and functionality of the
product as the time demands, through advertisements.
• Although this has allowed it to control more of the market
than its closest competitors, the reasons for its success may
also lie in the fact that many Indians still view its chocolates
as luxury products and not as household goods.
• This contradicts Cadbury’s assertion that its leadership is
maintained by a “superior marketing mix”.
• Cadbury India may have misinterpreted the popularity of
CDM as a sign that the Indian public has accepted it as a
household product. In fact, the booming economy and the
increasing affluence of the burgeoning middle class have
promoted the use of status symbols, where the regular
consumption of so-called luxury chocolates such as CDM is
viewed as fashionable.
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26. BRAND PERSONALITY
• A product's brand personality is a description of its
characteristics in relation to the target market for the
product.
• It assists marketers to develop suitable advertising and
promotional campaigns for the product.
– Cadbury’s Dairy Milk – The Rebel Leader; Brand Personality of
youthful exuberance and rebelliousness
– 5 Star – The champion companion; Male personality and reliability
– Perk – The girl next door; Brand personality of a warm, perky,
naughty accessible, Indian girl next door
– Milk Treat – Children’s Superhero; For kids and School going
children
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27. PART 3 - MARKETING CHALLENGES
AND
SEGMENTATION
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28. MARKETING CHALLENGES….
• Pre 1990s.
– Perceived to be western products.
– Consumed as indulgence and not as a snack food.
– Only for kids; brand stagnation.
– Negative associations.
• 1990s.
– Nestle; Kit Kat.
– Ferrero, Lindt, Ritter brands.
– Communication barriers with middle/bottom rung
clientele.
• 2000s.
– Worm controversy.Business School
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29. …MARKETING CHALLENGES….
• Chocolate penetration was only 5% in 2000 and
now it hovers around just 22% of the consumers.
• Comparatively, cookies, considered to have only
modest penetration, have reached 56% of Indian
households.
• Per capita consumption is estimated to be just over
180g for chocolate in India where as it is as high as
12 Kgs in USA.
• Despite a healthy growth potential, this is still a very
small market with sales concentrated primarily in
urban areas and better-off rural areas.
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30. …..MARKETING CHALLENGES….
• The urban market is brand conscious; the rural
market is price conscious.
• Emergence of small players in boiled sugar
candy segment.
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31. ….MARKETING CHALLENGES
• Current.
– How to retain urban customers with markets opening up
globally.
– How to expand marginal customer base.
– Small operators and sweets manufacturers (e.g. Haldi
Ram) coming up with own range of chocolates.
– How to expand market that is actually a miniscule as
compared to global trends.
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32. CHALLENGES : BOURNVITA
• Malted health beverage market has fared well as far
as beverages for kids are concerned.
• Market is still plagued by low levels of consumer
awareness in some specific sectors.
• Rural reach for such products is also low due to
premium pricing.
• Consumers in such markets have a conservative
mind-set and prefer traditional foods that are
home-made over processed packaged foods.
• Very little product improvement witnessed in this
category.
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33. MARKET SEGMENTATION
• CDM aims to be a relatively inexpensive treat.
• Focus on following market segments, as divided by :– Demographic Variables.
• Age- 1990s : Single point focus on kids and parental love shifted to adult
consumers.
• Income - “Real taste of life” campaign (2008) attempted to absorb low
income customers
–
–
–
–
–
Lifestyle Variables- affluent class to low income group.
Break Segment – Short break during work, eg Perk or snacks range.
Impulse Segment – At the spur of the moment .
Take home segment – Gifts and festival packs.
Technological knowledge – It has tried to tap into the potential
market of younger generation internet users by offering contests
and hosting competitions online.
– Health-consciousness - Bournville Dark Chocolate bar, similar to the
Dairy Milk bar, targets the health-conscious market segment of the
chocolate market.
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34. PRICING STRATEGY
• Dual for chocolates; differentiated for health drink.
• Chocolates.
– Premium pricing (higher than that of competitors but based
on brand name) ;as also
– Penetrative pricing (small packs at a very low price).
– The smallest CDM, priced at Rs. 5, is affordable by many
middle-class Indians as an occasional treat, but not
affordable for those who buy from the ‘less-than-3-Rupee’
segment of the market.
• Health Drink.
– Limited to a small difference between glass/plastic jars and
poly bags.
– Lacks penetrative power since even small packs are also
expensive.
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35. EFFICACY OF MARKET SEGMENTATION…..
• Overall effective.
• It allows them to target all three major market
segments that cater for children/adults, health
conscious and technologically-savvy consumers, but it
does not serve those segments of the market that have
been divided by income levels.
• Although Dairy Milk is affordable to the upper and
middle-income consumers who view it as a mid-priced
item, lower income consumers who buy from the lessthan-3-rupee range of chocolate cannot afford to buy
Cadbury Dairy Milk regularly.
• Feasibility of further price reduction without affecting
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quality of the product, is beyond the scope K Raina ppt.

36. ….. EFFICACY OF MARKET SEGMENTATION
• Indian consumers seem to be satisfied with CDM as
its marketing promotes it as an occasional
indulgence, despite popular opinion that it is a
relatively expensive luxury product.
• This restrained marketing has allowed the chocolate
to slowly become a measure of quality for many
Indians, as CDM is their “Gold Standard” for
chocolate, where the “pure taste of CDM defines
the chocolate taste for the Indian consumer”.
• In fact, Cadbury Dairy Milk was voted one of the
India’s most trusted brands in a poll conducted in
2005.
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37. DISTRIBUTION SYSTEM
• Indian retail sector is composed of 97% “family-run,
street corner stores” and the remaining 3% consisting
of malls and shopping complexes.
• Therefore, Cadbury India Ltd. produces its products in
factories spread geographically across India, but also
sells its products through a chain of over 450,000
retailers spread across India. The efforts of these
retailers are augmented by the support of 2100
distributor locations and 27 depots.
• Almost 3100 locations are directly supplied by Cadbury
India Ltd distributors at least thrice a month.
• These distribution networks give Cadbury India its
competitive edge in Business School
India’s massive consumer market.
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38. Era Business School
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39. SWOT ANALYSIS
• Strengths.
- Cadbury is the largest global confectionery
supplier, with 9.9% of global market share.
- Very strong brand equity in India.
- Sound network of 2100 distributors; 4.5 Lac
retailers.
- Strong manufacturing competence, established
brand name and leader in innovation.
- Better market penetration.
- Advantage that it is totally focused on chocolate,
candy, chewing gum; It has a unique understanding
of consumer in these segments.
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- Huge advertisement budgets.

40. SWOT ANALYSIS
• Weaknesses.
-The company is dependent on the confectionery
and beverage market, whereas other competitors
e.g. Nestle have a more diverse product portfolio,
where profits can be used to invest in other areas of
the business and R&D.
-The technology being used in India is not at par
with that being used elsewhere, notably, Europe.
- Not been able to capture ‘below Rs 3/-’ market.
- Losses during transit. School
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41. SWOT ANALYSIS
• Opportunities.
-Tremendous scope for per capita consumption (180
gms v/s 12 Kg).
- Increasing per capita national income resulting in
higher disposable income.
-Growing middle class and growing urban population.
- Increasing gifts cultures.
- Substitute to “Mithais” with higher calories/
cholesterol.
-Increasing departmental stores concept – impulse @
at cash counters.
- Globalization: optimal use of global Cadbury
Schweppes.
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42. • Threats
SWOT ANALYSIS
- There is an increasingly demanding cost environment,
particularly for energy, transport, packaging and sugar.
- Aggressive price and promotion activity by
competitors - possible price wars in developed markets.
- Social changes - Rising obesity and consumers
obsession with calories counting.
- Globalization - there are chances of more and more
MNCs entering the Indian market.
- Local substitutes.
- FDI entries now allowed.
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43. PART 5 - RECOMMENDATIONS
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44. RECOMMENDATIONS….
• Cadbury’s major problems are linked to the need for
very responsive distribution network due to the
perishable nature of its products. Costs go up and
problems like the worm episode arise.
• Indian consumers mainly consume sweets during some
festivals. It must come up with innovative offerings for
its chocolates to suit the need during such occasions.
e.g.: Come up with shapes similar to Indian Sweets and
package it innovatively reflecting the festival colors.
• Start exploring newer distribution channels like E-tailing
where high value chocolates are sold in specialized
packs.
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45. …..RECOMMENDATIONS
• Despite Amul’s longer history in India, its chocolates are
viewed as being local and not luxurious, justifying a
lower price tag. Cadbury India must maintain its current
marketing strategy but slowly start to promote Dairy
Milk as a household good so that consumers spend
their rising disposable incomes on it and boost its sales.
• A huge part of population is still uncovered; potential
must be tapped.
• Product innovation in malt drink and boiled sugar
confectionaries will reduce dependence on CDM.
• Acquisitions and mergers mode must be exploited.
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46. THANK YOU
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