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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 Magnitude of Effect
Xcellon Institute-School of Business

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A Marketing Strategy template on Cadbury Chocolate

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

implication/impact:
Increase brand awareness Increase brand equity Increase sales

Distribution

5. Driving Force:

implication/impact:
Availability

Xcellon Institute-School of Business

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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)

3. Revenue generation

4. Parents

4.Care of own children

5. Old age

5. After having lunch or dinner as sweet

Xcellon Institute-School of Business

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A Marketing Strategy template on Cadbury Chocolate Product/Service Analysis Product/Service 1. Chocolate 1. Tasty Benefit

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 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

Xcellon Institute-School of Business

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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

India as Sweet friendly nation Number of occasions to celebrate and give gift

Sales Potential:

Share Estimate: 13%

Xcellon Institute-School of Business

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A Marketing Strategy template on Cadbury Chocolate

Research 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 2. Route map for the sales team The KPMG Group The KPMG Group 5o lacs 30 Lacs

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

2. Proctor

Strong brand equity I low market

Low distribution and low quality

3. Amul

Strong brand loyalty of company

still not a national player

Xcellon Institute-School of Business

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A Marketing Strategy template on Cadbury Chocolate

Competitive Price Analysis


Competitor Price Product/Service

Nestle Proctor Amul

High price Low price Same price

Xcellon Institute-School of Business

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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/Advertising Total

Nestle 3 3 4 4 2 4 2 2 4 2 3 33

Amul 3 3 4 4 2 2 4 3 4 3 3 35

Proctor 2 3 3 2 3 3 2 2 2 2 3 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 Dec '09 12 mths 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 Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit 724.75 372.09 352.66 152.53 18.01 199.82 31.09 271.50 502.41 74.20 0.00 576.61 0.00

------------------- in Rs. Cr. ------------------Dec '08 12 mths Dec '07 12 mths Dec '06 12 mths Dec '05 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

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

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

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

586.94 335.55 251.39 123.86 2.92 222.81 19.67 269.59 512.07 69.82 0.00 581.89 0.00

544.77 299.18 245.59 25.58 298.49 151.02 13.14 8.90 173.06 72.34 0.62 246.02 0.00

430.21 265.13 165.08 82.18 253.42 122.08 11.37 11.20 144.65 44.27 0.62 189.54 0.00

395.50 234.88 160.62 29.55 258.21 102.33 10.68 18.40 131.41 53.39 0.00 184.80 0.00

Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses

534.02 22.83 556.85 19.76 0.00

433.56 20.40 453.96 127.93 0.00

370.89 29.91 400.80 -154.78 0.00

275.84 25.96 301.80 -112.26 13.68

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 product portfolio

2. Customize products on the basis of the nations

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

Mission

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

Objectives

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

2. Deliver superior shareholder

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

4. To make lots of chocolate .

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 for its stake holders

4. To increase the consistent cash inflow

Strategy
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 Present Market I New Product/Service 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 1 choices must be made : 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.

Tactics 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.