A Research Project Report

On

“COMPARATIVE ANALYSIS OF MARKETING STRATEGY OF NESTLE, AMUL &

CADBURY CHOCOLATES”

Submitted for the Partial Fulfillment of the Requirement of

"MASTER OF BUSINESS ADMINISTRATION"

Session 2017-2018

SUPERVISED BY )
Dr. Vishnu Prakash SUBMITTED BY:
Mishra Shivam Keshari
Associate. Prof. UIM MBA III Sem.
Roll No. 1601170122
(MBA

UNITED INSTITUTE OF MANAGEMENT, NAINI, ALLAHABAD

ACKNOWLEDGEMENT
PREFACE
DECLARATION
 Table Of Content

Chapter Content Page No.

1 OBJECTIVE OF THE STUDY

2 REVIEW OF LITERATURE

3 CHOCOLATE COMPANIES
COMPANIES:- EXPANDING THEIR
HORIZONS IN FMCG MARKET
 LEADING CHOCOLATE
 3.1 COMPANIES S.A
CADBURY, NESTLE
&AMUL
 COMPETITIVE
ANALYSIS OF
 3.2 CADBOURY , NESTLE &
AMUL: AN OVERVIEW
4 PROMOTIONAL STRATEGY AND ITS
IMPLICATION FOR CHOCOLATE
MARKET

5 RESEARCH METHODOLOGY

6 DATA ANALYSIS AND

INTERPRETATION

7 FINDINGS

8 CONCLUSION
9 RECOMMENDATION

10 LIMITATIONS OF STUDY &

BIBLIOGRAPHY
 CHAPTER-1

OBJECTIVES OF THE STUDY

 CHAPTER -2

REVIEW OF LITERATURE
 CHAPTER-3

CHOCOLATE COMPANIES: EXPANDING THEIR HORIZONS IN FMCG MARKET

 CHAPTER-3.1

LEADING CHOCOLATES COMPANIES SUCH AS CADBURY, AMUL & NESTLE:

AN OVERVIEW
 Introduction of FMCG

Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are products that
are sold quickly and at relatively low cost. Though the profit margin made on FMCG products is
relatively small (more so for retailers than the producers/suppliers), they are generally sold in
large quantities; thus, the cumulative profit on such products can be substantial. FMCG is
probably the most classic case of low margin and high volume business.

Introduction to Fast Moving Consumer Products (FMCG)

The Indian FMCG sector is the fourth largest sector in the economy with an estimated size of
Rs.1,300 billion. The sector has seen tremendous average annual growth of about 11% per
annum over the last decade. In India, the scenario is quite different in comparison to developed
nations where the market is dominated by few large players, whereas FMCG market in India is
highly competitive and a significant part of the market includes unorganized players selling
unbranded and unpackaged products. Approximately 12-13 million retail stores exist across
India, the large percentage of which around 9 million are kirana stores. India FMCG sectors’
comprises of few significant characteristics like well connected distribution network, high level
of competition between the organized and unorganized FMCG players, and low operational
cost. In India, FMCG companies have privilege of having easy availability of raw materials,
cheaper labour costs and presence across the entire value chain gives India a competitive
advantage.

Products which have a swift turnover and relatively low cost are known as Fast Moving
Consumer Goods (FMCG). FMCG items are those which generally get replaced within a year.
Examples of FMCG commonly include the range of daily consumed items such as toiletries,
soap, detergents, cosmetics, oral care products, shaving products, packaged food products and
digestives as well as other non-durables such as bulbs, batteries, paper products, glassware and
plastic goods. FMCG may also include pharmaceuticals, consumer electronics, etc. Indian
population is spreading and becoming wealthy day by day, particularly the middle class and the
rural segments, offers immense opportunity which is left untapped to FMCG players. Growth
effect will be seen from product customization in the matured product categories like skin care,
processed and packaged food, and mouth wash etc. In India, many MNCs have made their
presence through their subsidiaries (HUL, Reckitt Benckiser, P&G) and the companies launches
innovative products from their parent’s portfolio in the market regularly to ensure the steady
growth. India is a agriculture based economy and has a varied agro-climatic condition which
offers extended raw material base suitable for many FMCG sub sections like food processing
industries etc. India is one among those countries which has the highest production of livestock,
milk, spices, sugarcane, cashew, and coconut and has the second highest production of wheat,
rice, vegetables and fruits. Similarly, India has an abundant supply of caustic soda and soda ash,
the major raw materials required to manufacture soaps and detergents, which helps companies
manufacturing soaps and detergents to grow and prosper. The easy accessibility and availability
of these raw materials gives India an additional edge over other countries.

Introduction of Chocolate Industry

History:

The Indian Chocolate Industry has come a long way since long years. Ever since 1947 the
Cadbury is in India, Cadbury chocolates have ruled the hearts of Indians with their fabulous
taste. Indian Chocolate Industries Cadbury Company today employs nearly 2000 people across
India. The company is one of the oldest and strongest players in the Indian confectionary
industry with an estimated 68% value share and 62% volume share of the total chocolate
market. It has exhibited continuously strong revenue growth of 34% and net profit growth of
24% throughout the 1990s. The brand of Cadbury is known for its exceptional capabilities in
product innovation, distribution and marketing. With brands like Dairy Milk, Gems, 5 Star,
Bournvita, Perk, Celebrations, Bytes, Chocki, Delite and Temptations, there is a Cadbury offering
to suit all occasions and moods.

Today, the company reaches millions of loyal customers through a distribution network of 5.5
lakhs outlets across the country and this number is increasing every day. In 1946 the Cadbury’s
manufacturing operations started in Mumbai, which was subsequently transferred to Thane. In
1964, Induri Farm at Talegaon, near Pune was set up with a view to promote modern methods
as well as improve milk yield. In 1981-82, a new chocolate manufacturing unit was set up in the
same location in Talegaon. The company, way back in 1964, pioneered cocoa farming in India to
reduce dependence on imported cocoa beans. The parent company provided cocoa seeds and
clonal materials free of cost for the first 8 years of operations. Cocoa farming is done in
Karnataka, Kerala and Tamil Nadu. In 1977, the company also took steps to promote higher
production of milk by setting up a subsidiary Induri Farms Ltd., near Pune.

In 1989, the company set up a new plant at Malanpur, MP, to derive benefits available to the
backward area. In 1995, Cadbury expanded Malanpur plant in a major way. The Malanpur plant
has modernized facilities for Gems, Eclairs, and Perk etc. Cadbury operates as the third party
operations at Phalton, Warana and Nashik in Maharashtra. These factories churn out close to
8,000 tonnes of chocolate annually.

In response to rising demand in the chocolate industry and reduce dependency on imports,
Indian cocoa producers have planned to increase domestic cocoa production by 60% in the next
four years. The Indian market is thought to be worth some 15bn rupee (?0.25bn) and has been
hailed as offering great potential for Western chocolate manufacturers as the market is still in
its early stages.

Chocolate consumption is gaining popularity in India due to increasing prosperity coupled with
a shift in food habits, pushing up the country's cocoa imports. Firms across the country have
announced plans to step-up domestic production from 10,000 tonnes to 16,000 tonnes,
according to Reuters. To secure good quality raw material in the long term, private players like
Cadbury India are encouraging cocoa cultivation, the news agency said. Cocoa requirement is
growing around 15% annually and will reach about 30,000 tonnes in the next 5 years.

Brief Introduction:

Indian Chocolate Industry as today is dominated by two companies, both multinationals. The
market leader is Cadbury with a lion's share of 70%. The company's brands like Five Star, Gems,
Eclairs, Perk, Dairy Milk are leaders in their segments. Until early 90's, Cadbury had a market
share of over 80 %, but its party was spoiled when Nestle appeared on the scene. The other one
has introduced its international brands in the country (Kit Kat, Lions), and now commands
approximately 15% market share. The two companies operating in the segment are Gujarat Co-
operative Milk Marketing Federation (GCMMF) and Central Arecanut and Cocoa Manufactures
and Processors Co-operation (CAMPCO). Competition in the segment will soonly get keener as
overseas chocolate giants Hershey's and Mars consolidate to grab a bite of the Indian chocolate
pie.

The UK based confectionery giant, Cadbury is a dominant player in the Indian chocolate market
and the company expects the energy glucose variant of its popular Perk brand to be singularly
responsible for adding five per cent annually to the size of the company’s market share.

Market capitalization:

The Indian candy market is currently valued at around $664 million, with about 70% share ($
461 million) in sugar confectionery and the remaining 30% ($ 203 million) in chocolate
confectionery. Indian Chocolate Industry is estimated at US$ 400 million and growing at 18%
per annum. Cadbury has over 70 % share in this market, and recorded a turnover of over US$
37m in 2008.
Size of Industry:

The size of the market for chocolates in India was estimated at 30,000 tonnes in 2008. Bars of
moulded chocolates like amul, milk chocolate, dairy milk, truffle, nestle premium, and nestle
milky bar comprise the largest segment, accounting for 37% of the total market in terms of
volume. The chocolate market in India has a production volume of 30,800 tonnes. The
chocolate segment is characterized by high volumes, huge expenses on advertising, low
margins, and price sensitivity. The count segment is the next biggest segment, accounting for
30% of the total chocolate market. The count segment has been growing at a faster pace during
the last three years driven by growth in perk and kitkat volumes. Wafer chocolates such as
kitkat and perk also belong to this segment. Panned chocolates accounts for 10% of the total
market. The chocolate market today is primarily dominated by Cadbury and Nestle, together
accounting for 90% of the market.

Major Players:

 Cadbury’s India Limited

 Nestle India
 Amul Milk Chocolate
 Gujarat Co-operative Milk Marketing Federation
 Cocoa Manufactures and Processors Co-operative (CAMPCO)
 Bars Count Lines Wafer Panned Premium
 Cadbury’s Dairy Milk & Variants
 5-Star, Milk
 Treat Perk Gems
 Tiffins Temptation & Celebrations
 Nestle Milky Bar & Bar One.
Latest development:

 Chocolate-lovers may soon find their chocolate dearer if the problems plaguing the
industry continue. Raw material costs have risen by more than 20 % in the last few
years. Although retail prices have not increased, a rise in input costs will force the
manufacturers to consider a price hike. The Bigger players in the country such as
Cadbury, which leads the Rs 2,500 crore chocolate markets in India with a share of 72%,
will find it easier to absorb the surge in input costs as it has products at various price
points in the market, said industry experts. Cadbury may also opt for a price hike, albeit
marginal, if the current trend continues. Indian Chocolate Industry’s Margin range
between 10 and 20%, depending on the price point at which the product is placed. The
input costs in India are under check owing to the 24% decline in the prices of sugar.
 The World’s leading manufacturer of high quality cocoa and chocolate products Barry
Callebaut, has announced the opening of its first, state-of the art, Chocolate Academy in
Mumbai, India in July 2007.
 According to the analysis of the international market intelligence provider Euro monitor,
the relatively small Indian chocolate market with volumes of about 55,000 metric
tonnes of chocolate and compound per year is expected to grow on average per year by
around 17.8% between 2008 and 2012.
 Ferrero the Italian confectionery giant of $8 billion has planned up for a new production
facility in Maharashtra with an investment of over $125 million to whip up some of its
popular brands that include Rocher and Kinder.

THE INDUSTRY SCENARIO

With the entry of multinationals and home companies sprucing up their act, the confectionery
market is booming. McKinsey & Co. has estimated the confectionery industry to touch a
whopping Rs. 6 500 crore by the year 2008.Till the eighties, the chocolate market was small and
the product category itself was fuzzy. In the eighties, Cadbury’s - the virtual monopolist - had
decided to focus its efforts on making chocolates a distinct category with an identity of its own.
And the marketer had sharply positioned its product at children to do that. Hence, chocolates
bore an “Only for kids” tag, and kept adults at bay. By the end of the eighties, Cadbury’s still
ruled the roost with over 80 percent market share. And though several brands - like Amul and
Campco - tried to break into the market, none of them had succeeded in shaking the leader’s
grip. In fact, Cadbury’s had become a brand virtually generic to chocolates. Then chocolates
were used to reward and reinforce positive behavior and hence were categorized as a luxury
reserved for special occasions. This was, a stark contrast to the west where chocolates were
snacked on, eaten as minimeals or just to suppress pangs of hunger. But constant working by
players like Cadbury’s (re-launch of Cadbury’s DairyMilk targeting adults and as a casual any-
time buy) and Nestle towards exploding the myth that chocolates are meant for children only,
has resulted in the segment booming.
Trends in the Industry

 With socio-economic changes rapidly taking place, the young and not so young
population will lead a new life style and chocolate eating is definitely going to be
widespread and acceptable.
 In the industry, both population and family incomes as well as urbanization are on the
increase.
 There has been a significant growth in the middle class, with 5.8 million people having
upgraded to the quoted middle class.
 There is quantified data on FMCG usage having increased (NRS-VI &
IRS’98figures)Thanks to the above reasons the growth in the chocolate market is
estimated to be at
 22% in 2001. But marketers in the industry are looking forward to a much higher growth
rate, as India’s per capita consumption of chocolates is only 15Gms. Versus 6 Kg in the
west.

The Indian Chocolate market can be sliced into four parts.

1. Moulded Chocolate Segment -comprising slab chocolates like Dairymilk chocolates, etc.
These are made by pouring the ingredients into moulds.

2. Countline Segment -comprising bars like 5 star, Bar One, Perk, KitKat, etc. These have
ingredients other then chocolate and are usually Bar shaped, making for chunky bites.

3. Choco-Panned Segment -comprising chocolate forms like Butterscotch, Nutties, Tiffins, etc.
Panned variety has different cores/centers which are covered with a layer of chocolate.

4. Sugar-Panned Segment -comprising chocolate forms such as Gems, Chocolate eclairs, etc.
These generally have a sugar coating on the outside.
 COMPANY PROFILE

History

•Started business in 1948 in India. The company was incorporated as Cadbury-Fry (India)
Pvt. Ltd.

•Founder: John Cadbury in Birmingham, UK in 1824

•Current MD: Mr. Rajiv Bakshi

•Turnover: 450 Cr.

•No. of offices: 4 Staff Strength – 2000 approx. 1.Branch Manager is responsible for the
entire Branch Function 2.Promotional Materials – Network ad, Media, POS Materials like
posters, danglers, dispensers etc. 3.Target – All age groups 4.Distribution: Through C&F
Agents → Re-distributors → Retailers →consumers

 Godown: 1 in Delhi
 Office: 1 in Delhi
 Avg. No. of calls per day by S.O.: 35Sales Reporting – weekly basis
 5. Sales Kit: Daily call report, product folder, price list, calculator, etc.
 6. Organisational Structure:
 7. Key products: Cadbury’s Dairy Milk, 5 Star, Fruit & Nut, Bournvita etc.,Perk

COMPANY BACKGROUND

In 1930 R Hudson and Company finally joined with Cadbury. This gave the flourishing local firm
a direct link with one of the greatest in international chocolate manufacturing and marketing.
Over the years the company has-been involved with many other long standing brands and
entrepreneurs –names such as Fry – a chocolate brand dating back to 1756, and of course
Schweppes which is still part of the Cadbury group internationally although not in New Zealand.
In 1969 Cadbury Fry and Schweppes merged internationally with the NewZealand Company
becoming known as Cadbury Schweppes Hudson Limited in 1973.In 1986 Cadbury Schweppes
Hudson merged with Cadbury Schweppes Australia. The result was a truly international
operation with both the NewZealand and Australian companies supplying each other. Cadbury
Schweppes
Australia is a fully owned subsidiary of Cadbury Schweppes plc, the United Kingdom based
parent company. Most recently, in 1990 Cadbury required the Griffins confectionery business,
and sold the Hudson biscuit operation in a reciprocal agreement. The Griffins business dates
back to before the turn of the century. George Griffin established the company when he
opened a small confectionery business at Nelson. Finally, in 1991 we became known as Cadbury
Confectionery Ltd, and can now boast dominance in New Zealand’s chocolate and sugar
confectionery markets. With manufacturing bases in both Dunedin and Auckland, as well as
sales offices in Wellington and Christchurch, the Company employs nearly 1,000 in total. The
Cadbury group has also flourished internationally. Cadbury Schweppes plc – the parent
company – has manufacturing facilities in 20 countries and its famous brands are bought and
enjoyed in more than 110 countries around the world. Cadbury is one of the world’s leading
chocolate makers and is number one in England and Australia as well as in New Zealand.

PRODUCTION

Cadbury India’s first manufacturing facility was set up at Thane (Mumbai) in1966. Today, the
factory has grown manifold and manufactures a range of products that include Cadbury Dairy
Milk, 5 Star, Nutties, Gems and Bournvita. The factory employs about 750 people and houses
the R&D and engineering development facilities of the company. In a move towards backward
integration, Cadbury bought Induri Diary farm in Pune in 1964. Recently, a major investment
program resulted in the installation of modern moulding, crumb and chocolate making
facilities. Today, the Induri Factory manufactures intermediate products like milk crumb and
arange finished chocolates. In 1989, the company began operations in their newest and most
modern plant at malanpur. Equipped with state-of-the-art technology and backed by constant
investment, this unit manufactures Eclairs, Gems, Perk and Picnic.

Vision

The governing objective for Cadbury India is to deliver:

•Superior Shareholder Value

•Cadbury in every pocket

The company believes this requires:

•Broadening our consumer appeal and extending their reach to newer markets

•Sustained growth of their market share through aggressive product development

•Striving for international quality in their products and processes

•Focusing on cost competitiveness and productivity in their operations and innovative

utilisation of their assets

•Investing to develop people

Finding a Market Winner

Developing a successful new product which will stand the test of time and gain a permanent
place in a company’s product portfolio is not easy. Much quoted figures estimate that it takes in
the region of 58 new product ideas to end up with one successful new product and some
people put the initial figure as high as 100. The majority of ideas fail early in the process – well
before they reach the consumer. A further significant proportion fail to move from the test
market into national distribution. With the tremendous investment required for totally new
products, it is essential that the whole project is carefully researched. In fact, it may take
several years for a new product to grow from concept stage to national distribution. The search
for a new product usually beings with an evaluation of the opportunities or gaps in the market.
Successful new brands are targeted as far as possible to avoid taking market share from a
company’s existing brands. A new sector must be created in the market or the new product
must attack competitors’ brands. Successful new product development is essentially team work
involving research and development, marketing and sales, market research, production,
engineering and finance. At Cadbury, in common with most companies, the marketing role is
fulfilled by the Product/Brand Manager whose function is to coordinate and mastermind the
project through from the initial brief to national launch, until the largest sales tonnage has been
achieved. The initial impetus for embarking on a New Product Development project can be:

•Changes in consumer lifestyles

•Technology developments where new processing techniques have been devised

•The need for market extension abroad, particularly into Asia Pacific, and the demise of trade
barriers

However, products cannot be simply transferred from one market to another without review
and possible adaptation to suit differing expectations and cultures. Whether the product
strategy is:

•Existing product improvement

•New product development within the current range of activity

•Production diversification

Sales sheet summary of Cadbury India Ltd.

ADVERTISING & SALES PROMOTION

As we have discussed the importance of Advertising and Sales promotion in introduction, so

we know how much advertising aim sales promotion are important. The slogans of advertising
are the tools of sales promotion are so important which couples the customer to purchase the
product. Now we are going to discuss all these things one by one about Cadbury. Following are
a few advertising slogans used by Cadbury for introducing the product to the customers:-

• ‘TASTE LIKE THIS FEELS’ & ‘KUCH MEETHA HO JAYE’ (DAIRY MILK)

• ‘JIYO LIGHTUM, LIGHT’ (PERK)

•’WHEN EVER ON HUNGER STRIKE’ (PERK)

•’TAN KI SHAKTI, MAN KI SHAKTI’(BOURNVITA)

•’KAR DE DIL PE JAADU’ (ECLAIRS)

All these slogans used by Cadbury are beautifully prepared because they can compel the
consumer to buy the product to some extent.

Now we will discuss them in details with the help of which we can easily understand how these
slogans can leave these impression on the customer.
  TASTE LIKE THIS FEELS’ (DAIRY MILK)

The new creative platform will launch (2 April 2K16) with an experiential activation at Westfield
shopping centre in central London. According to the Diary Milk brand, all three ads will use a
different metaphor to evoke the feeling of eating the chocolate under the banner ‘Tastes like
this feels’.

 JIYO LIGHTUM, LIGHT’ (PERK)

Mondelez India Foods Private Limited (formerly Cadbury India Ltd.), today launched a new TVC
for their popular chocolate brand Cadbury Perk. The brand has signed up the young and
vivacious Bollywood actor Alia Bhatt as its ambassador. In the TVC, Alia is seen in a playful and
mischievous avatar, bringing to life Perk’s new ‘Jiyo Lightum Light’ campaign

 ’TAN KI SHAKTI, MAN KI SHAKTI’(BOURNVITA)

This slogan was used for ‘Bournvita’. Bournvita is full of proteins, vitamins, minerals and all
those necessary things which are useful for our body and mind. Therefore, this slogan stood
best for Bournvita. TAN KI SHAKTI, means the energy to the body. If anybody here this product,
he /she will remain active for whole day. That person will look healthy, active and will look
smart

DISTRIBUTION SYSTEM ADOPTED BY CADBURY

Cadbury Schweppes pick the world number 3 soda market has aggfed to sell most of its soft
drinks business outside the US to Coca Co. for $ 1.85 billions to finance a head on battle with
Coke in the No. 1 soda makers home market. The agreements included the Schwoers Dr.
Pepper chanda dry and crush brands and exude South Africa and France the pact which was
dependent on regulatory approval was likely to be concealed in mid 1999 Cadbury said. The
more will allow Cadbury to expand it Dr. Peeper business in US where it derives two-thirds of its
soft drinks sales and was a 15 per cent market share at the same time it get Cadbury out of
markets where it is growing at a slower pace. The shares rose as much as 70.5 per cent or 7.5
per cent or 7.5 per cent 1002.“This sort out the places where Cadbury’s systems weren’t strong
enough to compete with Coca-Cola,” said Mr. David long an analyst a Henderson Crosthwaite,
“they were fighting with proper for this
 Patterns of distribution channels and types of distribution intermediaries

Manufacture

Stockiest/Distributor

Semi-wholesaler

Retailer

Users

PRICING POLICIES ADOPTED BY CADBURY

Despite intensifying competition for target share and a stream of new products. Pitted against
each other, the price line of a popular brand of chocolate had move upward over the past one
year.

Prices of key brands like Nestle’s Kitkat and Cadbury’s Dairy Milk have rose by 25 per cent each
between November 2001 and November 2002.Brands such as Cadbury’s Eclairs, where the unit
prices is lower, have seen a sharpener price hike .A major portion of the price revision occurred
in the last part of 2001 and in the first quarter of 2002.A sharp rise in cocoa prices and rupee
and depreciation escalation in input costs for chocolate manufacturers in the last leg of fiscal
2001-98.Whole cocoa, prices have receded from their high after September 2001,rupee
depreciation and the higher incidence depreciation and the higher incidence of excise duties
has kept the price line of chocolates. The cost of cocoa, the key input, accounts for around 45
per cent of the manufacturing costs for chocolates production. Domestic cocoa production
(estimated at 4500) to 5000 tonnes for the current year) has been stagnant and takes are of
less than a third of domestic requirements of chocolate and malted food manufacturers.
Manufacturers such as Cadbury and Nestle India import over half of this cocoa requirements.
International cocoa prices moved up from 140 cents per kg in January 2001 to peak at 190 cents
per kg in September 2001, prompting a round or price increase in chocolates in the last part of
2001.Subsequently cocoa prices have receded to around 150-160 cents per kg an dare expected
to rule at these levels in the near term. However, rupee depreciation of around 17 per cent
since September 2001 is likely to have offset the impact of this on production costs. The
reclassification of the wafer-coated chocolates, making them chargeable to an excise duty of 18
per cent, against 8 per cent earlier, is also likely to contribute to price escalation. The excise
authorities have recently passed an order on Nestle, directing it to pay excise dues at the higher
rate of 18 per cent. The matter is now under appeal. Maximum Retail Price - based excise
duties, which have been introduced on chocolates in the latest budget could also add to the
production cost especially in the premium categories. Though cocoa prices have extended to
rule relatively soft. The price line for chocolates appears unlikely to come down in the near
future.

FACTORS INFLUENCING PRICING OF CADBURY

Internal Factors

•Corporate and marketing objectives of the firm.

•The image sought by the firm through pricing.

•The characteristics of the product.

•Price elasticity of demand of the product.

•The stage of the product on the product life cycle.

•Use pattern and turn around rate of the product.

•Cost of manufacturing and marketing.

•Extent of distinctiveness of the product and extent of production differentiation practiced by

the firm.

•Other elements of the marketing mix of the firm and their interaction with pricing.

•Composition of the product line of the firm.

External Factors

•Market characteristics.

•Buyer’s behavior in respect of the given product.

•Bargaining power of major customers.

•Competitors pricing policy.

•Government controls regulations on pricing.

•Other relevant legal aspects.

•Societal (or social) considerations.

•Understanding, if any reached with price cartels.

Cadbury objective of pricing

•Profit maximization in the short-term.

•Profit optimization in the long-term.

•A minimum return (or target return) on investment.

•A minimum return on sales turnover.

•Targets sales volume.

•Target market share.

•Deeper penetration of the market.

•Entering new markets.

•Target profit on the entire product line irrespective of profit level in individual products.

•Keeping competition out, or keeping it under check.

•Fast turn around and early cash recovery.

•Stabilizing prices and margins in the market.

 NESTLE INDIA LIMITED

HISTORICAL HIGHLIGHTS

Incorporated in 1959 as Food specialties, Nest India (NIL) was promoted by Nestle Alimantana,
Switzerland, which presently holds 51% equity stake in the company. Manufacturing in India
began with the start up of the Moga Factory in 1962. Nestle's first unit at Moga, Punjab is
manufacturing:

•Milk products

•Infant milk formulae

•Weaning cereals

•Culinary products

•Beverages It is the main manufacturing unit of Nestle India Limited. The second factory at
Choladi, Tamil Nadu to produce beverages i.e. 100% EOU for instant tea wasset up in 1967.The
third plant in Nanjangud, Karnataka was set up in 1989 to produce

•Instant Coffee

•Health Beverages the fourth plant at Samalkha, Haryana, was set u in 1993, to produce

•Weaning cereals

•Culinary products

•Health beverages

•Milk products the fifth plant at Ponda, Goa was set up in 1994 to produce:

•Wafers

•Waffles the sixth plant at Bicholine, Goa commenced construction for manufacture of a range
of culinary products and this was expected to be commissioned in the latter part of 1996.Nestle
India, the largest food company in the country is continuously looking at new niches in the
market place for its various products. In milk products Nestle has made a considerable mark.
For instance, the company was the first to introduce a Dairy Whitener with its product
‘Everyday'. And till today that product is a brand leader despite the presence of a host of other
brands in the field. IN the case of Milkmaid condensed milk, Nestle relaunched the product as
desert maker and has seen the sales graph climbing since. In baby foods, Nestle has made its
strong hold with Lactogen and Cerelac.Nestle is also popular in pure ghee segment. Its Everyday
pure ghee has

Gained a quite satisfactory market share, Nestle has also entered into fitness food products.
Nestle today is a household name. Nestle extended the product line in coffee by bringing in
Dolco, and then Sunrise. In 1990, NIL entered the chocolate business introducing Nestle
Premium chocolate. Nestle's products are sold under brand names such as a Milkmaid,
Everyday, Cerelac, Nescafe, Maggi, Lactogen, Eclairs etc. It launched the world famous Kitkat
chocolates in 1995. During the year 1996 Milo the world’s largest selling chocolate energy food
drink was launched. According to the chart shown, we can easily known as to which product
were launched in which year:

Launch year Product's Name

1962 Milkmaid
1964 Nescafe
1968 Lactogen
1972 Ricory
1974 Maggi, Cuber, Cerelac
1978 Nestum
1982 Nespray, Lactogen
1983 Sunrise, Maggi Noodles (Chicken Masala)
1985 Maggi Sauces - Tomato & Hot & Sweet
1986 Everyday Dairy Whitener
1987 Cerelac - Wheat Apple, Wheat Orange, Maggi Sauces, ChilliGarlc, Masala
Chilli
1989 Everyday Ghee, Maggi Soups - Tomato, Chicken, Mushroom, Taster’s
Choice-Leaf Tea. Sunrise Extra (originally Ricory),Nestogen 2, Sunrise
Premium (Originally Sunrise), Cerelac -Wheat vegetable
1990 Nestle Chocolate - Premium Milk, Milky bar and Crunch
1991 Nestle Eclairs, Bar-One, Maggi Soups – Mixed Vegetable, Chicken Noodles,
Nestogen
1992 Everyday Gold (originally Nespray)
1993 Maggi Super Seasoning (Originally Maggi Cubes) - Chicken, Vegetarian
Lemon Malasa, Nestle Bonus, Polo, Bar-one-Roasted Peanut, Taster's Choice
- Dust Tea, Contamina -Snack Pressing
1994 Cerelac-Wheat Soya, Milkmaid Desert Mixes - Custard Powder, Gulab
Jamun, Shahi Rabri, Kesar Kulfi, MaggiTonite's Special - Butter Chicken
Gravy Sauce, KarahiPaneer Gragvy Sauce, Pizza Sauce Topping, Nescafe Pre-
Mix, Everyday Pre-mix

1995 Nestle Bonus - Chocolate, Nestle Kitkat, Toffo - Coffee, Elacichi, Milk, Polo-
Paan
1996 Nestle Milo, Milkmaid Dessert Mixes – Kalakand, MaggiPickles - Lime, Lime
Sweet, Mango, Mango Punjabi, Mixed, Maggi Dosa Mixes - Masala Plain,
Sambhar, Maggi Soups -Chicken Sweet Corn, Hot & Sour and Rasam, Polo -
Spearmint, Cerelac - Rice, Taser's Choice - Tea Bags.
1997 Mithai Magic, Splash Candy, Butter Scotch Candy, Toffee-Elaichoo, Koffees,
Polo-Fruit Rings, Extra Strong, Maggi RichSoups, Nestea, leaf/Dust Tea,
Nescafe 3-in-1, TeamateCreamer, Maggi Pickles, Variants, Maggi Macroni
Snack, Cerelac - Wheat Banaa, Wheat Honey
1998 Maggi- Tamarina Sauce, Nestle Allan's Soother's, SunriseEclairs
2002 Nestle- Dahi & Imli Sauce

MORE THAN A MOUTHFUL - CHOCOLATE INDUSTRY

The Indian chocolate market is getting bigger and better. While on one hand, the premium
segment (comprising imported varieties) is opening up, on the other, companies like Cadbury
India are launching indigenous products made to international standards. Of the 20,000-tonne
chocolates market worth about Rs. 400 crores, Cadbury accounts for about 70 percent, followed
by Nestle, with a share of around 20 percent. Amul has five per cent of the market, with minor
players taking the rest. The battle, though, is between Cadbury and Nestle. Though much smaller
portfolios, Nestle is putting up a touch fight.

5 Star
Although positioned internationally as energy bar, 5 Star was positioned on an emotional
platform in India during the late 1980s. Symbolizing togetherness, 5Star was originally targeted
at teenagers. In June 1994, the company reworked the strategy for 5 Star to make it a source of
energy. In fact, before the launch of Perk, 5 Star's energy bar positioning made it a snacking
chocolate, with Nestle pitchign Bar One (launched in 1993) against it with the punchline 'for
those in between times'. Cadbury will be launching a new campaign for 5 Star shortly. They
would like to further 5 Star's equity in the functional or snacking direction. It is very nebulous
one though.
.

Gems
Broadcasting Gems, though, did not prove to be a feasible proposition for Cadbury. Targeted at
children under 12 years with the 'Gems Bond' advertising, Cadbury decided to woo teenagers
with the 'Smart'. Very smart campaign. But now, the company is re-targeting children with its
animated commercial. Gems is the best brand to speak to children. Colorful chocolate buttons
appeal most to children and that is why we are re-targeting children. While Cadbury has
successfully relaunched a host of its sub-brand, it has not been able to pay attention to brands
like Mr. Pops lillipop. As you grow and add more brands, the ability to spend on brands becomes
lower. Therefore we have selected a few critical brands to do a paper job.

POLO

POLO is one of Nestle's key strategic confectionery brands worldwide, and represents Nestle's
first entry into the large 50,000 tonne p.a. (organized sector) Indian Sugar confectionery market.

Eclairs

Competing in the chewable toffees segment, Eclairs was relaunched during the mid-nineties with
a new name, Dairy Milk Eclairs. According to RajivBakshi, Managing Director (designate),
Cadbury India Ltd, growth in this segment is very high. It is worth over 4000 tonnes now. Nestle
also apresence here with Nestle's Eclairs

NESTLÉ KITKAT

Nestlé Kitkat NESTLÉ KITKAT are delicious crisp wafer fingers covered with chocolayer. Our
special tropicalized recipe ensures that NESTLÉ KITKAT is preserved even in warmer climates.
NESTLÉ MILKYBAR

Nestlé Milkybar NESTLÉ MILKYBAR is a delicious milky treat which kids love. With its
Calcium Rich recipe, NESTLÉ MILKYBAR is a favourite with parents to treat their kids with.

NESTLÉ MUNCH

Nestlé Munch Extremely popular in India, NESTLÉ MUNCH is wafer layer covered with
delicious chocolayer. A crispy light irresistible snack!

NESTLÉ MILK CHOCOLATE

Nestlé Milk Chocolates NESTLÉ Milk Chocolate is a milk chocolate with a delicious taste for
you to savour.

NESTLÉ BAR-ONE

Nestlé Bar-One NESTLÉ BAR-ONE has a luscious nougat and caramel core covered with a
delicious chocolayer.
 AMUL / GCMMF

Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat, India. Formed in
1948, it is a brand managed by a cooperative body, the Gujarat Co-operative Milk Marketing
Federation Ltd. (GCMMF), which today is jointly owned by 3.6 million milk producers in
Gujarat. Amul is actually the abbreviated form of Anand Milk Union Limited.

Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) is India's largest food product
marketing organisation with annual turnover (2016-17) US$ 4.1 billion. Its daily milk
procurement is approx 18 million lit per day from 18,549 village milk cooperative societies, 18
member unions covering 33 districts, and 3.6 million milk producer members.

The white revolution was spearheaded by Tribhuvandas Patel under the guidance of Sardar Patel
and Verghese Kurien. As a result, Kaira District Milk Union Limited was born in 1946.
Tribhuvan das became the founding chairman of the organization which he led till his last day of
his life. He hired Dr. Kurien three years after the white revolution. He convinced Dr.Kurien to
stay and help with the mission.

Amul spurred India's White Revolution, which made the country the world's largest producer of
milk and milk products In the process Amul became the largest food brand in India and has
ventured into markets overseas.

Dr Verghese Kurien, founder-chairman of the GCMMF for more than 30 years (1973–2006), is
credited with the success of Amul. Amul products are now available in more than 60 countries in
the world.
History
Amul-cooperative registered on 14 December 1946 as a response to the exploitation of marginal
milk producers by traders or agents of the only existing dairy, the Polson dairy, in the small city
distances to deliver milk, which often went sour in summer, to Polsn. The prices of milk were
arbitrarily determined. Government had given monopoly rights to Polson to collect milk from
Kaira and supply it to Bombay city.

Angered by the unfair trade practices, the farmers of Kaira approached Sardar Vallabhbhai Patel
under the leadership of local farmer leader Tribhuvandas K. Patel. He advised them to form a
cooperative and supply milk directly to the Bombay Milk Scheme instead of Polson (who did the
same but gave them low prices). He sent Morarji Desai to organize the farmers. In 1946, the milk
farmers of the area went on a strike which led to the setting up of the cooperative to collect and
process milk. Milk collection was decentralized, as most producers were marginal farmers who
could deliver, at most, 1–2 litres of milk per day. Cooperatives were formed for each village, too.

The cooperative was further developed and managed by Dr.Verghese Kurien with H.M. Dalaya.
Dalaya's innovation of making skim milk powder from buffalo milk (for the first time in the
world) and a little later, with Kurien's help, making it on a commercial scale, led to the first
modern dairy of the cooperative at Anand, which would compete against established players in
the market. Kurien's brother-in-law K.M. Philip sensitized Kurien to the needs of attending to the

finer points of marketing, including the creation and popularization of a brand. This led to the
search for an attractive brand name. In a brainstorming session, a chemist who worked in the
dairy laboratory suggested Amul, which came from the Sanskrit word "amulya", which means
"priceless" and "denoted and symbolised the pride of swadeshi production."

The trio's (T. K. Patel, Kurien and Dalaya's) success at the cooperative's dairy soon spread to
Anand's neighbourhood in Gujarat. Within a short span, five unions in other districts – Mehsana,
Banaskantha, Baroda, Sabarkantha and Surat – were set up. To combine forces and expand the
market while saving on advertising and avoid competing against each other, the GCMMF, an
apex marketing body of these district cooperatives, was set up in 1973. The Kaira Union, which
had the brand name Amul with it since 1955, transferred it to GCMMF

In 1999, it was awarded the "Best of all" Rajiv Gandhi National Quality Award.

Technological developments at Amul have subsequently spread to other parts of India.

The GCMMF is the largest food products marketing organisation of India. It is the apex
organisation of the dairy cooperatives of Gujarat. It is the exclusive marketing organisation for
products under the brand name of Amul and Sagar. Over the last five and a half decades, dairy
cooperatives in Gujarat have created an economic network that links more than 3.1 million
village milk products with millions of consumers in India. Gujarat Cooperative Milk Marketing
Federation Ltd.

GCMMF - An Overview

Year of Establishment 1973

Members 18 District Cooperative Milk Producers'

Unions

No. of Producer Members 3.6 Million

No. of Village Societies 18,549

Total Milk handling capacity per day 30 Million litres per day
Milk Collection (Total - 2016-17) 6.44 billion litres

Milk collection (Daily Average 2016-17) 17.65 million litres

Cattle feed manufacturing Capacity 7800 Mts. per day
Sales Turnover -(2016-17) Rs. 27043 Crores (US $ 4.1 Billion)

Head Office:

Gujarat Cooperative Milk Marketing Federation Ltd.

Amul Dairy Road,
P B No.10, Anand - 388 001,
Gujarat, India.
Phone: +91-2692-258506, 258507, 258508, 258509
Fax: +91-2692-240208
Email: gcmmf@amul.coopHistory

AMUL Members Union

1. Kaira District Cooperative Milk Producers' Union Ltd., Anand

2. Mehsana District Cooperative Milk Producers' Union Ltd, Mehsana

3. Sabarkantha District Cooperative Milk Producers' Union Ltd., Himatnagar

4. Banaskantha District Cooperative Milk Producers' Union Ltd., Palanpur

5. Surat District Cooperative Milk Producers' Union Ltd., Surat

6. Baroda District Cooperative Milk Producers' Union Ltd., Vadodara

7. Panchmahal District Cooperative Milk Producers' Union Ltd., Godhra

8. Valsad District Cooperative Milk Producers' Union Ltd., Valsad

9. Bharuch District Cooperative Milk Producers' Union Ltd., Bharuch

10.Ahmedabad District Cooperative Milk Producers' Union Ltd.,Ahmedabad

11. Rajkot District Cooperative Milk Producers' Union Ltd., Rajkot

12. Gandhinagar District Cooperative Milk Producers'Union Ltd., Gandhinagar

13. Surendranagar District Cooperative Milk Producers' Union Ltd., Surendranagar

14. Amreli District Cooperative Milk Producers Union Ltd., Amreli

15. Bhavnagar District Cooperative Milk Producers Union Ltd., Bhavnagar

16. Kutch District Cooperative Milk Producers' Union Ltd., Anjar

17. Junagadh District Cooperative Milk Producers' Union Limited,Junagadh

18. Porbandar District Cooperative Milk Producers’ Union Ltd, Porbandar

Advertising
In 1966, Amul hired Sylvester daCunha, then managing director of the advertising agency AS to
design an ad campaign for Amul Butter. daCunha designed a campaign as series of hoardings
with topical ads, relating to day-to-day issues. It was popular and earned a Guinness world
record for the longest running ad campaign in the world. In the 1980s, cartoon artist Kumar
Morey and script writer Bharat Dabholkar had been involved with sketching the Amul ads; the
latter rejected the trend of using celebrities in advertisement campaigns. Dabholkar credited
chairman Verghese Kurien with creating a free atmosphere that fostered the development of the
ads.

Despite encountering political pressure on several occasions, daCunha's agency has made it a
policy of not backing down. Some of the more controversial Amul ads include one commenting
on the Naxalite uprising in West Bengal, on the Indian Airlines employees strike, and one
depicting the Amul girl wearing a Gandhi cap.
In 2013, Amul tweeted a picture featuring the Amul butter girl, implying that 'freedom of choice'
died in '2013', in opposition to the Supreme Court of India overruling the judgment of Delhi
High Court and criminalising homosexuality again.

On 17 October 2016, Amul butter girl celebrated 50 years when she first appeared in the topical
ad titled "Thoroughbread". The Ad showed a jockey holding a slice of bread during the horse
race season in 1966.The impish Amul missy had appeared for the first time even before that,
with Eustace Fernandez showed her offering bed-time prayers with a wink and a lick of lips,
saying "Give us this day our daily bread: with Amul butter". But the topical hits started flowing
in since 1966.

Products Line Of AMUL

 Amul Milk
 Bread Spreads
 Cheese
 UHT Milk
 Beverage Range
 Amul PRO
 Ice Cream
 Paneer
 Dahi
 Ghee
 Milk Powders
 Mithai Range
 Mithai Mate
 Chocolates
 Lactose Free Milk
 Fresh Cream
 Amul Sour Cream
 Pouch Butter Milk
 Amul Cattle Feed
 Recipes
 Happy Treats
Amul Chocolates

 Milk Chocolate
 Dark Chocolate
 Fruit & Nut Chocolate
 Tropical Orange Chocolate
 Sugar Free Chocolates

Milk Chocolate

 Amul Chocolates are made with goodness of rich creamy milk and delicious cocoa.
 For better mouthfeel, finest particle size (approx. 20 micron) is achieved through world class refiner.
 Finest particle size (approx. 20 micron) is achieved through world class refiner.
 Indulge in the exquisite taste of rich milk chocolate


Fruit & Nut Chocolate

 Crunchy Almonds. Handpicked juicy raisins.

 Studded in smooth texture of dark chocolate.
 With 55% cocoa, Amul Fruit 'N' Nut Chocolate is a classic combination,
 celebrated for decades, relished even today.

Tropical Orange Chocolate

  Amul Tropical Orange is truly an unforgettable taste with sensation with orange extracts from Netherlands
infused in intense dark chocolate made from the finest cocoa beans.
 Made from Finest Cocoa Beans,
 Natural Source of Antioxidants

Dark Chocolate

 Amul dark chocolate is made with finest ingredients and delicious cocoa.
 For better mouthfeel, finest particle size (approx. 20 micron) is achieved through world class refiner.
 Indulge in the exquisite taste of rich dark chocolate

Sugar Free Chocolates

 It's rich. It's smooth.

 It's delicious. Minus the sugar.
 Presenting, Amul Sugar Free Dark Chocolate. Put your guilt behind and surrender to the great chocolate
indulgence, without the fear of putting on calories.
 CHAPTER – 3.2

COMPETITIVE ANALYSIS OF CADBURY , NESTLE & AMUL

The Chocolate industry is one the fastest growing sectors in the FMCG industry with a
CAGR of18-20 percent The sector is dominated by two MNCs- Cadbury and Nestle, which
together account for more than 95 percent of the market share. Our topic of study in this report is
the long forgotten and currently neglected brand of one of the most celebrated corporations of
the world- Amul Chocolates The rise and fall story of Amul Chocolates is unique. From being
the market leader at the time of its launch in the 1970s, it is currently languishing at a 2 percent
share in the sector. At the same time other offerings from Amul like Ice-Creams, Fresh Milk,
Butter, and Ghee have gained immense popularity and are leaders in their respective segments
 CHAPTER-4

PROMOTIONAL STRATEGY AND ITS IMPLICATION FOR CHOCOLATE MARKET

 CHAPTER-5

RESEARCH METHODOLOGY
 CHAPTER-6

DATA ANALYSIS AND INTERPRETATION

CHAPTER-7

FINDINGS
CHAPTER-8

CONCLUSION
 CHAPTER-9

RECOMMENDATION
 CHAPTER-10

LIMITATIONS OF STUDY &

BIBLIOGRAPHY