CADBURY DAIRY MILK: NEW PRODUCT DEVELOPMENT

INTRODUCTION
The global chocolate market is estimated to be around $106 Billion in terms of retail
market value. India is the worlds fastest growing market for chocolates, having registered an
annual growth of 15% between 2008 and 2012. Currently, the Indian chocolate market is
worth around Rs.5,562 crore.
Cadbury India a subsidiary of Mondelez International, the $32 billion global
snacking major formed in October 2012, after Kraft Foods decided to split its business.
Cadbury controls over 67% share in the Indian chocolate market, according to market
research agency Nielsen. Some of the key brands are Cadbury Dairy Milk, Bournvita, 5 Star,
Bournville, Celebrations, Gems and Oreo.
In 1948, Cadbury began its operations in India by importing chocolates. Today, it has
six company-owned manufacturing facilities at Thane, Induri (Pune), Malanpur (Gwalior),
Bangalore and Baddi (Himachal Pradesh), and 4 sales offices at New Delhi, Mumbai,
Kolkata and Chennai. The corporate office is in Mumbai.
Cadbury Dairy Milk is considered the gold standard for chocolates in India. The
pure taste of CDM defines the chocolate taste for the Indian consumer.
In Milk Food drinks segment, main product is Bournvita the leading malted food
drink in the country. Similarly in medicated candy category Halls is the undisputed leader.
Cadbury recently entered the biscuits category with the launch of the Worlds No. 1 biscuit
brand Oreo.

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CADBURYS MARKET SEGMENT

Market place for any product is comprised of many different segments of consumers,
each with different needs and wants. Market segmentation can be defined in a number of
ways such as:

Demographic variables: With the population growth at 1.58%, India is predicted to

have more than 1.53 billion people by 2030. More than 50% of Indias current

population is below the age of 25 and over 65% below the age of 35.
Geography: 27.8% of Indias population lives in about 5,840 towns and urban
agglomerations. So India is the biggest market for chocolate in terms of population.
Cadbury targets different segments within the market, as follows:
Break Segment: Products which are normally consumed as a snatched break
and often with tea and coffee, for e.g. Cadburys Perk and Oreo biscuits.
Impulse Segment: These products are often purchased on impulse, eating
these and then, for e.g. Cadbury Dairy Milk.
Take Home Segment: This describes product that are normally purchased
from supermarkets, taken home consumed at a later stage. The price of
Cadbury dairy milk is reasonable and affordable. So a person does not need to
think much before purchasing it, they can easily buy it any time when they
want to buy. The income of a person does not play any important role in it.

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FINANCIAL ANALYSIS
Cadbury India, whose revenue growth has consistently outperformed the economy
over the past few years, experienced the first hints of a slowdown in 2012, incidentally its
first year under new parent Mondelez International. Its revenues increased 20.8% to Rs.
4,065 crore, the lowest growth rate since 2006 and a sharp deceleration from the 34.4%
growth recorded in 2011. Profit after tax increased by 2.1% to Rs. 303.4 crore. This
slowdown will be seen as a small setback to Mondelez International's plans to rev up growth
in emerging markets.

Cadbury India experienced a slowdown in sales and profit in 2012, despite launching
legendary Swiss triangular chocolate brand Toblerone, as consumers cut back on
discretionary products, many even trading pricier chocolates with lower priced candies and
confectionery.
Cadbury India had launched products such as Silk and Bournville, and entered the
biscuits segment in the past two years, which drove the growth, The availability of foreign
brands such as Ferrero Rocher and Lindt in the premium segment could be hampering growth
in that category."

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PRODUCT LIFE CYCLE OF CDM

The product life cycle model helps marketers identify the different stages that the
sales and profits of a product go through during the course of its lifetime. There are five
stages to the product life cycle: introduction, growth, maturity, saturation and decline.

Introduction: Sales are slow as the product is not yet known. Costs are high due to
heavy marketing spend to create awareness. Emphasis is on advertising and
distribution. The Cadbury Dairy milk launched by Cadbury in 1905 is an example of a

brand at the introduction stage.

Growth: This stage shows growing market acceptance and increasing profits.
Competitors begin to enter the marketplace. The business concentrates on optimising
product availability. The Cadbury Dairy milk is the market leader in chocolate market

with 30% market share example of brand at growth stage.

Maturity: The rate of sales growth slows down as the product has been widely
distributed and sold. The company now focuses on creating brand extensions and
promotion offers to boost sales. New product research is critical to ensure future sales.
The Cadbury Dairy Milk Silk chocolate range is an example of creating brand

extensions brand at the maturity stage.

Decline: Sales slow down dramatically and profits fall off. The product may be
dropped to make way for new products and the cycle recommences. So far CDM has
not reached at this stage because of extension in maturity stage.

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MARKETING PLAN OF CDM

Marketing Objectives:
Over the years Cadbury dairy milk has positioned itself as an all-time favourite
chocolate that is meant for all irrespective of the age, class and gender. It has been always
marketed as a chocolate having the contemporary taste but which is affordable, with several
variants to select from and over the time it has been trying to position itself as an alternative
to the traditional Indian sweet. Whereas the corporate strategies are cantered towards
ensuring profitable growth in the market and grow shareholder value over the long term the
marketing strategies are more particular which can be stated as follows:Increase sales & profit of Cadbury diary milk.
Positioning diary milk as a successful alternative to the traditional Indian sweets in order to
cash in the rich tradition of Indian people associated with desserts.
Sustain market share over the year through product innovation in product development and
packaging the variants Fruit & Nut, Crackle and Roast Almond, combine the taste of Cadbury
Dairy Milk with a variety of ingredients and are very popular amongst teens & adults.
The Dairy Milk Brand is marketed using market penetration strategy. As there is huge
competition in the industry therefore the brand is marketed at low profit margin in order to
win market share & to maximise profit by increase the sale volume.
The marketing strategy use to market the product is fair enough because this attracts
the right people at right time & probably at right place. This strategy takes into account all the
factors that are essential in promoting the brand like this & it pays close attention to the
market demand & customer expectation. The expenditure on the marketing of the brand also
seems to be fair enough to by comparing it with the competitors. In our view some more
efforts are required to promote the brand like some sort of unique promotion techniques to be
used in order to make marketing strategy more successful. But on the whole the strategy is
good & working nicely.

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Financial Objectives:
Cadbury India experienced a slowdown in sales and profit in 2012, despite launching
legendary Swiss triangular chocolate brand Toblerone, as consumers cut back on
discretionary products, many even trading pricier chocolates with lower priced candies and
confectionery.
Cadbury India had launched products such as Silk and Bournville, and entered the
biscuits segment in the past two years, which drove the growth, The availability of foreign
brands such as Ferrero Rocher and Lindt in the premium segment could be hampering growth
in that category."
The growth rate of sales & PAT was decreasing in the 2012-13 period. This was
mainly due to competition that it faced because of foreign brands entering into India. But in
recent past Cadbury has been successful in increasing its growth rate. This is mainly due to
increase in market size.

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SEGMENTATION, TARGETING AND POSOTIONING OF

CADBURY DAIRY MILK
Dairy Milk chocolate bars have been in existence since 1905. Their packaging has
changed, although their promotions remain somewhat constant but the positioning has
evolved over the years. Their actual Diary Milk chocolate has not been altered over time
except for when being sold to different regions Indians like creamier chocolate than do those
from England so Dairy Milk in India contains more of a milk content.

Segmentation: The segmentation of the market for dairy milk is based on three
things. The first one being based geography. Geographically, Dairy Milk bars are
segmented by consumer preferences in the area and are sold more predominantly in
regions which consume more snack/junk food. The other type of segmentation is
catering to the impulse purchasers. These types of consumers form a major chunk of
the consumer base that the product caters to. Dairy Milks are often stocked in
convenience stores and the check-out aisles of supermarkets due to impulse
purchasers who are buying the chocolate for purchase and consumption now. The
other segment is the gift segment. Giving away chocolates as gifts is a trend that is
fast catching up in India Cadbury dairy milk wants to cash in on that. The latest
segment that Cadbury dairy milk is catering to is the dessert segment. The tradition of
having a dessert after meal is present in every civilization and this is a huge segment.
The latest drive of dairy milk is to become the national dessert of the country. As far
as segmenting the market on income there are different variants of dairy milk
(Bournville and silk) targeted towards the higher class (Premium Segment) who are

ready to pay the premium for extra dark chocolate.

Targeting: Starting from 1905 the purchasers of dairy milk have changed from
children to all age groups. When Cadbury started its operation in India their main
buyers were children and the youth who brought chocolates to celebrate special
occasion. This limited the market for Cadbury dairy milk. This is a reason that
Cadbury came out with the campaign of (kuch meetha ho jaye) to make dairy milk
synonymous with sweet so that it could target all the age groups. In India it was a
mentality that chocolates are for children and the adults were more inclined towards
to the conventional sweets. This campaign targeted them and saw a change in the

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target market for the brand. Now the target market for dairy milk is every member of
the family.
Cadburys Dairy milk always aimed for the bigger bite of the Indian market. It has
been the market leader in the chocolate category for years. The main objective of
Cadburys dairy milk is very clear, reach the audience by showing them their reflection.
Showing small happiness and cheerful moments that we see in our day to day life is
cherished by enjoying a bite of Cadburys Dairy milk and by adding an emotional touch
to it, & has won the Indian audience thoroughly.
Diary milk is being positioned as a successful alternative to the traditional Indian
sweets in unique way in order to cash in the rich tradition of Indian people associated
with desserts, birthday gifting through Facebook, gifting in schools (15 th August & 26
Jan-13) & on birthdays, gifting in offices on birthdays & gifting with marriages
invitation card & after marriage ceremony.
Positioning: Cadbury Dairy Milk excels at positioning. Not only can the chocolate
bars have many different positions based on which segment they are in, but also none
of the positions damper the effects of other positions! Youth see with word Cadbury
as a synonym for chocolate, others see it as synonyms for sweet and love and bliss. In
India it positioned itself as spontaneous, special, carefree, real moments (Mazza aa
gaya) in the initial stage. But later it tried to position itself as brand that is
synonymous with sweet (Kuch meetha ho jaye). The most recent campaign (Shubh
Aarambh) tries to take forward the initial positioning of dairy milk as an alternative
for the traditional sweet and positions itself as something that is as auspicious as the
sweet which is generally offered as bhog to gods.

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MARKETING MIX OF CADBURY DAIRY MILK

Product: The product Diary Milk is a chocolate bar that is made from real dark chocolate.
The design of the chocolate is nearly same throughout the world with slight changes that are
made according to the different regions. The amount of milk content in dairy milk is the
highest as compared to other competitors. The components that are used in making the
chocolate are sugar, cocoa butter, vegetable fats, cocoa mass and emulsifiers. The various
variants of dairy milk are Wowie, Crackle, Fruit and Nut, Crunchie, Temptations (roasted
almond, rum raisins and raisin apricot), Bournville and Silk.
Price: Cadbury Dairy Milk has always adopted a competitive pricing strategy for the basic
product whereas has gone for premium pricing on the other variants. The price list is given as
follows:

Place: The company has five company owned manufacturing capacities in Thane, Induri
(Pune), Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh). The sale offices are
located in the metros and the head office is located in Mumbai. The distribution structure is
such that Cadbury dairy milk chocolates are sold directly to the retailers and the whole
sellers. Cadburys distribution network used to encompass 2100 whole sellers and 450,000
retailers.

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Promotion: The media mix for any campaign for diary milk comprises of TV, radio, print
and Internet. The advertisements are used to create and emotional bonding with the
consumers and hence are high on the emotional content. The print media is for making the
consumers more knowledgeable about the brand and digital media is used for more targeted
two way communication. Over the years dairy milk has concentrated heavily on TV
advertising but lately there is a shift towards digital media. The promotions have been done
keeping in mind to increase brand loyalty and to encourage repeat purchases at the same time
increasing market share. Apart from the mass media the other strategies include making dairy
milk a visible brand in the market and encouraging free samples through competitions to gain
trust and familiarity among the target audience.

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CONCLUSION
The Indian Chocolate Industry is a unique mix with extreme consumption patterns,
attitudes, beliefs, income level and spending. Understanding the consumer demands and
maintaining the quality will be essential. Pricing is the key for Cadburys to make their
product reach to every consumer houses. Right pricing will make or break the product
Success. Theres also an immense scope for growth of chocolate industry in India,
geographically as well as in the product offering. So we think that bringing online
sales(through Facebook) & increasing the institutional sales(in unique way) would bring
prosperity and increase the sales of Cadburys as a whole again resulting in the goodwill of
the company.

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