A Marketing Strategy template on Cadbury Chocolate

A Template of marketing strategyAn overview for

Submitted toProf. Jitendra Sharma

Prepared by: Chetan Panara Vishal Soni Jay Akhani

Xcellon Institute-School of Business

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A Marketing Strategy template on Cadbury Chocolate

Xcellon Institute-School of Business

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A Marketing Strategy template on Cadbury Chocolate

OVERVIEW OF MARKET ANALYSIS*

CHARACTERISTICS SALES POTENTIAL SHARE ESTIMATE PROFIT FROM SERVING

Driving Forces and Implications for the Company in Order of

Xcellon Institute-School of Business

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A Marketing Strategy template on Cadbury Chocolate

Magnitude of Effect

1. Driving Force: Advertisement

implication/impact: Increase in sales

2. Driving Force: Chocolate as desire

implication/impact: Create needs

3. Driving Force: Brand Name

implication/impact: Top of the mind recall

4. Driving Force: Brand ambassadors awareness

implication/impact: Increase brand Increase brand equity Increase sales

5. Driving Force: Distribution Availability

implication/impact:

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A Marketing Strategy template on Cadbury Chocolate

Market Analysis We have already completed the first level of analysis in identifying the driving forces that lead to changes in our industry. The next step is to analyze individual consumers (individuals, and organizations) and to set out our primary and secondary segments or target markets. Customer Need Analysis Key Customer Groups 1. Children Customer Needs 1. Desire for Chocolate

2. Youth

2. Gift

3. B2B (Distributer, Wholesaler, Retailer and All type of channel members) 4. Parents

3. Revenue generation

4.Care of own children

5. Old age or dinner as sweet

5. After having lunch

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A Marketing Strategy template on Cadbury Chocolate

Product/Service Analysis Product/Service 1. Chocolate Benefit 1. Tasty

2. Satisfactory

3. Healthy (In some cases)

Target Segments on Order of Priority Now match the needs of the customer segments with the benefits of the product /service. Prime Market: Youth Secondary Market: Child Tertiary Market: Entire family Peripheral Market: Replacement of sweet

Describe the characteristic of the target groups in a little more detail in order to understand the scope of the markets: Target Group: Primary Market Characteristics: Influence by advertisement Fashion-trend Increased Use of chocolate as gift
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A Marketing Strategy template on Cadbury Chocolate

Sales Potential: Biggest Market Second highest population India has highest number of youth in the world with 45% population will be youth by 2050 Increase of chocolate average consumption by 8 times per head in last 7 years

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A Marketing Strategy template on Cadbury Chocolate

Share Estimate: According to us share of this segment should be around 45% in total sales

Target Group: Secondary Market: Characteristics: Increased influence on purchase over the period of time Emotion bonding with family Sales Potential: Chocolate was and will be always a first desire for any children so there will be no doubt on the sales potential of this segment Share Estimate: 25%

Target Market: Tertiary Market: Family Characteristics: To fulfill childrens need To show care for children to the world and to increase their image in the public places

Sales Potential: Biggest say on spending of income Control over the income Share Estimate: 17% Target Market: Peripheral Market Characteristics: Positioning from company as sweet replacer Use as gift instead of sweets on occasions like Diwali, Rakshabandhan, etc Sales Potential: India as Sweet friendly nation Number of occasions to celebrate and give gift Share Estimate: 13%

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A Marketing Strategy template on Cadbury Chocolate

Resear ch Information is not always available from secondary sources but only from primary sources. A list of needs with cost estimates may identify gaps. Information Needed Source Cost 1. Choice of brand ambassador The KPMG Group 2. Route map for the sales team Lacs The KPMG Group 5o lacs 30

Competitive Analysis The first step is to identify the competition and analyze their strengths and weakness. Competitor 1. Nestle Low customer base Strength Strong brand equity in high class market Weakness High price,

2. Proctor distribution and low Quality

Strong brand equity I low market

Low

3. Amul national player

Strong brand loyalty of company

still not a

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A Marketing Strategy template on Cadbury Chocolate

Xcellon Institute-School of Business

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A Marketing Strategy template on Cadbury Chocolate

Competitive Price Analysis Competitor Nestle Proctor Amul Price Product/Service High price Low price Same price

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A Marketing Strategy template on Cadbury Chocolate

Competitive Analysis

Key Success Factor Product/Service Offering Product Service Product/Service Quality Cost Management Marketing Skills Marketing Effort Technology Sales Force Distribution Pricing Manufacturing Financial Strength Location Promotion/Advertis ing Total

Nestle 3 3 4 4 2 4 2 2 4 2 3

Amul 3 3 4 4 2 2 4 3 4 3 3

Proctor 2 3 3 2 3 3 2 2 2 2 3

33

35

27

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Organizational Analysis This is the internal situation analysis. We need to know our internal strengths and weaknesses and where we stand in terms of being able to compete effectively in the marketplace. We also need to know our capacity to take advantage of opportunities. To start with, a listing of the past five years performance provides the sketch of the past successes. Evaluators

Balance Sheet of Cadbury India

------------------- in Rs. Cr. ------------------Dec '09 12 mths Dec '08 12 mths 32.18 32.18 0.00 0.00 432.22 0.00 464.40 32.02 9.68 41.70 506.10 Dec '08 12 mths 586.94 335.55 251.39 123.86 2.92 222.81 Dec '07 12 mths 33.20 33.20 0.00 0.00 372.94 0.00 406.14 1.28 7.48 8.76 414.90 Dec '07 12 mths 544.77 299.18 245.59 25.58 298.49 151.02 Dec '06 12 mths 34.36 34.36 0.00 0.00 357.73 0.00 392.09 3.26 6.75 10.01 402.10 Dec '06 12 mths 430.21 265.13 165.08 82.18 253.42 122.08 Dec '05 12 mths 35.71 35.71 0.00 0.00 398.10 0.00 433.81 3.71 4.51 8.22 442.03 Dec '05 12 mths 395.50 234.88 160.62 29.55 258.21 102.33

Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities

31.07 31.07 0.00 0.00 499.73 0.00 530.80 2.28 9.89 12.17 542.97 Dec '09 12 mths

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories

724.75 372.09 352.66 152.53 18.01 199.82

Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses

31.09 271.50 502.41 74.20 0.00 576.61 0.00 534.02 22.83 556.85 19.76 0.00

19.67 269.59 512.07 69.82 0.00 581.89 0.00 433.56 20.40 453.96 127.93 0.00

13.14 8.90 173.06 72.34 0.62 246.02 0.00 370.89 29.91 400.80 -154.78 0.00

11.37 11.20 144.65 44.27 0.62 189.54 0.00 275.84 25.96 301.80 -112.26 13.68

10.68 18.40 131.41 53.39 0.00 184.80 0.00 205.09 13.41 218.50 -33.70 27.35

S.W.O.T. Analysis The quickest way to get to a qualitative assessment of the company is via the strength, weakness, opportunity and threat analysis (S.W.O.T.). Strengths Maintain a stable growth of a company, With its brand name, Cadbury could counterattack the competitors. Keep up with the financial strength by increasing its sales and profit. Acquisition rules in UK, reduce its dependence on the UK market. Overall, Cadbury has been successful through the new products (development) it has to offer. Weakness Weak position in the US market. Lack of distribution network. Total French production of chocolate bars and confectionary has slowed down in more recent years, partly due to the economic slump. Consumption of chocolate products, fall in demand due to the gloomy economic situation. Sales of milk chocolate bars, which account for 24 per cent by volume of total sales of chocolate bars, decreased by 3.7 per cent.

Opportunities Through its confectionary product line, to build viable positions in prioritized markets. Cadbury has other opportunities to have market development in Russia and China. This company is also at the same time distributing its products via the internet Develop Gourmet Line. Besides developing the Low Calorie line of chocolates and sweets, they also offer the Sugar Free sweets line. Therefore in order to get the product into a new foreign market, France, Cadbury would have good opportunities in store for them. Threats

The company should take note of the changes in the consumers buying trend. Price wars would occur between its competitors like Mars, Hershey and Nestle. There would be seasonal sales slumps all year round which will reflect to an increase in cost of the raw materials needed. Cadbury would then have to be prepared for growth of small local gourmet chocolates and regional candy manufacturers. Also to be aware of the cost of packaging materials as it has increased over time. Increase Marketing and Promotion globally by marketing products in emerging markets.

Identification of the Companys Competitive Advantage Competitive Advantages (current) Innovation is at the heart of creating brands people love. Cadburys investment in technology of taste, flavor, packaging, process development and nutrition has never been greater. Cadbury is supporting our brands with innovative approaches to marketing and advertising. Scale of production Distribution channel Loyal base of customers

Competitive Advantages (to be developed) Segmentation on the basis of income of the people in terms of branding Packaging Availability in the rural areas

Issues that the Organization Needs to Address Based on the Situation Analysis

1. Create product on the basis of the competitors 2. Customize products on the basis of product portfolio the nations

3. Highest R&D player but still need to be consistent as Nestle.

Missio n Cadbury's means quality: this is our promise. Our reputation is built upon quality: Our commitment to continuous improvement will ensure that our promise is delivered

Objecti ves

Overall Company Objectives: 1. Grow shareholder valueover the long term superior shareholder returns

2. Deliver

3. To deliver superior shareholder returns by chocolate realizing our vision to the worlds biggest and best confectionery company. .

4. To make lots of

5. Improve the quality of their chocolate

Marketing Objectives: 1. To have offerings in every category to widen the market

2. Cadbury in every pocket

3. Marketing strategy is aimed at achieving this vision by growing the market

4. Profitability Objective

Financial Objectives: 1. To achieve the higher ROE in every financial year 2. To provide maximum benefits to the share holder

3. To become most transparent financial company consistent cash inflow for its stake holders

4. To increase the

Strate gy The first thing to do is to analyze the options and decide where the strategy is heading. In a general way, there are four directions: Current Product/Service New Product/Service I

Present Market

II

New Market

III

IV

Penetrations (Risk/opportunities in Quadrant I) Cadburys was to use market penetration for their product, I feel this would not help at all as the current product they have out in the market which is the Brunchbar, is not doing very well and people would not buy it, so I feel this would be the worst option to choose. Product Development (Risk/opportunities in Quadrant II) Cadburys was to use product development for their product; I feel this could possibly be successful, although after the failure of their previous product people may not buy their new product. Market Development (Risk/opportunities in Quadrant III) Cadburys was to use market development; I feel that again there could possibly be a chance of success, as they may have aimed their previous product at the wrong market, although people from the new market may also not be keen to buy

their product. Diversification (Risk/opportunities in Quadrant III) It is clear that if Cadburys was to use diversification and aim a new product at a new market, there would be a high chance of success as long as the new product was to meet customer needs, which can be done through extensive market research to help gather an idea of people who would regularly purchase their product

The Choices Marketing strategies are statements of the direction of the companys marketing effort. Four choices must be made1: 1. The chosen market and target segments. Youth Child Entire Family Replacement of Sweet

2. The market position and value provided to the selected market. 3. Advertisement related to all target segment Use of holistic communication strategy The distribution channels to be used to reach the market.

Distribution Chocolate needs to be distributed directly, unlike other fmcg products like soaps and Detergents, which can be sold through wholesale network. 90% of chocolate products are sold Directly to retailers. Cadbury's distribution network used to encompasses 2100 distributors and 450,000 retailers To avoid cannibalization of its higher priced products from lower priced ones, Cadbury is Setting up two separate distribution channels one for core business & other for mass markets 4. A list of the activities to be undertaken in order to support the direction taken. Trade promotions Retailers connection program Advertisements to achieve the sales

Statement of Investments Needed to Implement the Strategy 1. Capital funds R&D: 500 Cr. Next 5 year Advertisement o TVCs: 20 Cr. Next year o Print: 10 Cr. Next year o Radio: 2 Cr. Next Year Sponsorship of the events:3 Cr. Next Year Distribution channel member:120 Cr. Next year entire India (incentives, promotional offer etc.)

2. Human

capital R&D Team: 30 people Advertisement: 10 people Events Teams: 10 people Distribution Channel: 2000 people

3. Expenses Transportation: 50 Cr. TA, DA, HRA and other perks: 30 Cr. Miscellaneous Expenses: 20 Cr.

Organizational Structure to Carry Out Strategy

Action Needed to Create a Market Strategy Supported Culture 1. Advertisement according to the keeping cultural aspect in mind 2. Signing brand ambassador as per the mind spaces of the Indian consumer.

3. Target the rural market of the segment as 70% of the population still live the rural area.

Tacti cs Tactics have traditionally been summarized by four variables: price, promotion, product and place (4 Ps). The following is a good start in developing tactics. Product/Service: A price competitive edge while the distribution strategies will ensure that the products reach the final consumers. Product description This marketing strategy will be offering a particular product in the market. It is specifically offering white chocolate in the Indian market. The main brand that is to be introduced in the market is Cadburys Dream which is mainly targeted for the adult female population. The product will be offered in 45 gm packages, 100 gm and 200 gm packages. These will be the most important sized packages that the product will be sold in. it will be sold in whole sale and retail. Pricing strategies Since the product is being offered for the first time in the market, the company will use price penetration strategy where it will use low prices strategy to penetrate the market. However this will be combined with cost plus pricing since it will have to operate at a profit market. However the initial price set up will be based on the low prices to penetrate the market. The product will be offered at Rupee 2 per 45 gm size bar. Distribution strategies To ensure that the products reach the intended consumer, the company will use the current existing distribution changing. It will sell the product in wholesale to intermediary wholesales who will in return sell to the retailers. To reduce on the cost of operation, retailers and distributors will be expected to obtain the product directly from the company store to reduce the cost of production. However the company will establish a number of stores on all provinces to take the product close to the retailers. Taking the product near to the consumer will be the main pillar for the success of the distribution marketing strategy.