chocolate

BUILDINGMATHEMATICAL

ABILITY

Sonu(1113183) Ankit Kumar(1113196)Hemant Kumar(1113201)Malika Chauhan(1113202)Karan(1113203)Jatin Khurana(1113209)Vivek Kumar Rai(1113213)B. G. Hanu. Srilekha(1113221)Sudhir Kumar(1113227)Sunita Chaudhary(1113239)

WE ARE VENKIANS

INDIANCHOCOLATE

MARKETANALYSIS

Chocolate market in India is valued at Rs 2,000 crore and is growing at the rate of 18 – 20 per cent per annum.The Indian chocolate market is seen growing at a compounded annual growth rate of 15-20%.

Chocolate consumption is gaining popularity in India due to increasing income and lifestyle. Over 70% of chocolate consumption takes place in the urban areas. Chocolate consumption in the rural areas is negligible in India.

INTRODUCTION

Market SizeVolume – 30,000 tonnesValue - 2,000 croreGrowth – Market growing @ 18% - 20% per annumPer Capita Consumption – 30 grams

MAJOR PLAYERS OF THE INDIAN

CHOCOLATE MARKET

Chocolate market is a highly concentrated market, with Cadbury having 70 per cent and Nestle around 16 per cent. These two companies have been instrumental in building up the chocolate market in India with huge investments in product development, advertising and brand building. Other companies constitute about 14% of the overall market share.

ProductBars or Moulded Chocolates (35% to 40%)

Counts (30%)

Panned Chocolates (Gems) (10%)

The Indian chocolate market segments consists of Bars or Moulded Chocolate Segment like Dairy Milk, Amul, Nestle Premium, and Truffle that account for 35% – 40 % market volume,.Countline Segment comprising of Count Chocolates such as Five Star, Kitkat, Perk, etc. is the next largest segment, accounting for 30 %.Choco-Panned Segment – comprising chocolate forms like Butterscotch, Nutties, Tiffins, etc., accounting to 10 %.and very small market for Sugar-Panned Segment – comprising chocolate forms such as Gems, Chocolate eclairs, etc.

Dark Chocolate: New to the Indian Subcontinent.

New Product Launch – Cadbury Bournville (Dark Chocolate) and Cadbury Silk.

NEW PRODUCT

PROMOTION Television commercials

Print advertisings

Free sampling

Newspapers

Hoardings

GROWTH The consumption is impulse led

and driven largely by convenient price points. As economic growth creates more disposable income with more people the consumption is expected to increase.

CHANNELS OF DISTRIBION

CONDITIONSINFLIANCINGCONSUMERBEHAVIOUR

Taste/Preference – Bars or Molded Chocolates.

Usage Pattern/Occasions – All occasions product.

Buying Pattern – Impulse buying or gifting purpose.

Brand Loyalty – As such no brand loyalty, yet Cadbury is most preferred.

Segments – All age groups, income level and

geographic region, except for people suffering from sugar related diseases.

•Children: 55%, Adults: 12%, Young Adults: 33%

The project was undertaken to understand the perception and behaviour of consumers retail outlet personnel Cadbury and Nestle were the mainly targeted brands.

The sample population includes 60 consumers and 35 retail shops

The consumers were given 2 sections in questionnaire; General section and Nestle and Cadbury comparison. Retail shop personnel were not given questionnaire but interviewed to obtain their insights on the brand perception.

In this study the problem pertains among the variable i.e.; what is general behaviour of consumer and the extent of brand loyalty and influence of one variable of from the data. As the study is related to the study of consumer behaviour and perception toward chocolates so the research design used was descriptive study with use of both qualitative and quantitative design.

FACTS

Cadbury brands are perceived better than Nestle brands

Indian market. Bournville is considered as a luxury product

, Dairy Milk is to enjoy a moment Kit kat is for pleasure to the consumers.

The observations from the consumer questionnaire concluded that Cadbury brands are on the top of the respondents mind. Cadbury is well known brand and perceived as better chocolate brand even after the worm issue that had negative impact on the brand image for long period. Nestle brand is known but not on the top of the mind. Kitkat is a well known brand among other in Nestle.

HISTORY

•Founded in the year 1824.•Founder was John Cadbury.•Head office is in Mumbai, India.•Founded in India on 19 July 1948.•Employees around 2000.•Products - Cadbury dairy milk, 5-star, Perk, Gems, Éclairs •Cadbury is a confectionery company owned by KraftFoods.

•Founded in 1866.•Founder was Henri Nestle.•Headquarters is in Switzerland.•Company operates in 86 countries around the world,•Employees over 2,80,000 people.•Products – MilkyBar,KitKat ,Munch.•Nestle India Ltd • First factory was set up in the year 1961 •At Moga Punjab

PRODUCTS

MARKET SEGMENTATION

GEOGRAPHIC :

•URBAN AREAS: GROWTH WILL MAINLY COME THROUGH AN INCREASE IN PENETRATION AS INCOME LEVELS IMPROVE.

DEMOGRAPHIC : Age Group –(3 years to 18 years)

(18 years to 25 years) (25 + years)

BEHAVIOURAL:Purchase Occasions- Diwali, Rakhsha Bandhan, New Year etc.

&

SWOT

OPPORTUNITIES

Increasing per capita national income resulting in higher disposable income.Growing middle class and growing urban population.Increasing gifts cultures.Substitute to “Mithais”

WEAKNESS

Little penetration in the rural sector.Poor technology in India compared to current international technologies.Limited Key products, only one central brand (CDM).

STRENGTHS

Distribution NetworkMarket ShareAggressive Marketing Very strong brand equity in India.Better market penetration.

THREATS

Rise in the cost of chocolate and dairy products.Entry of many foreign players in the Indian Confectionary market, which are giving higher margins to the retailers.Changing consumer trends.

SWOT

OPPORTUNITIES

Low penetration, consumption.Launch of brands from international portfolio.Growth in international & emerging markets

WEAKNESS

Raw material supply – volatile prices.Chocolates - comparatively small business unitLack of penetration of chocolates in the rural market.

STRENGTHS

Strong distribution network.Strong R&D

THREATS

Foreign imports.There exists no brand loyalty in the chocolate market and consumers frequently shift their brands.Changing consumer trends.

MARKETING MIX

PRODUCT : •Cadbury India Limited (CIL) confectionary products include Dairy Milk, 5 Star, Eclairs, Perk, Halls, Bytes and Gems which are the largest selling brands in their segments.PRICING : •Cadbury’s has launched various products which cater to all customer segments. •So every customer segment has different price expectation from the product.•Therefore maximizing the returns involves identifying right price level for each segment, and then progressively moving through them.• e.g. : Dairy Milk Rs.5, Perk Rs. 10, 5 Star Rs. 5 & Rs. 10, Fruit and Nut Rs. 22, Gems Rs. 5 & 10, Break Rs. 5, Nutties Rs. 18.

PRODUCT : •Nestle products are Kit-Kat, Munch, Milky-bar, Charge, Classic, Polo. Kit-Kat is their premium brand in chocolates.

PRICING : Nestle sets prices of their products according to the market demand as low as possible because nestle is the trend setter in the market.•In line with Cadbury’s offerings Incentive schemes – eg. Maha munch give more value for the same price Priced at key price points like Rs.5

MARKETING MIX.

Physical Distribution – “Place”•Cadbury's distribution network used to encompasses 2100 distributors and 450,000 retailers.

PROMOTION :•Celebrities endorsements.•The big factor that has pushed up cdm sales is the Amitabh Bachchan campaign. Cadbury appointed Amitabh Bachchan as its brand ambassador.•Cadbury product are marketed aggressively in the market.

Physical Distribution – “Place”•General FMCG distribution structure.Strong coverage in urban areas, developing in rural.•New Regional Sales Offices to increase width and penetration and focus in rural areas.

PROMOTION :•Brand ambassador- Rani Mukherjee for munch ( targeting youth)•ADVERTISING - Decreased dependence on children’s TV channels over recent years 33% of total industry spend but near equal spend on each brand with rival offerings from Cadbury.

Direct Competition

Cadbury captures 70% of market share

In Cadbury Dairy Milk accounts for maximum share

Five star come at 2nd place

Nestle captures 16% of market share.

In Nestle Munch accounts for maximum share

Kit Kat comes at 2nd place

Challenges for future growth

Government policies in terms of licensing, duties, movement of agricultural commodities etc. Also affect the introduction of products, time lag for a product launches, taxes, excise, etc all influence the business.

Rupee depreciation improves export realizations, however it also makes import of raw material (esp. Cocoa) expensive.

Threat from foreign brands.

Inflationary pressures on raw material prices

Lack of government initiative – high excise and import duties

High entry barriers due to duopolistic market

Price-sensitive consumer.

AWARENESS

Aware Of Cadbury

98% Yes2% No

Source Of Awareness

70% AD’s18% W,O,M12% Saw in shop

Aware Of Nestle90% approx10% No

Source Of Awareness

60% AD’s30% Saw in Shops10% Suggestions

Consumption

CADBURY Dairy milk 56% 5 Star 18% Gems 8% Perk 6% Bournville 4% Dairy Milk Silk 4% Temptations 2% Celebrations 2%

NESTLE KIT KAT 40% MUNCH 33% MILKYBAR 11% Bar One 9% Milk Chocolates 7%