MM Final Project Group 8

7/25/2019 MM Final Project Group 8

http://slidepdf.com/reader/full/mm-final-project-group-8 1/15

Marketing

Management

Project Report

Cadbury India- Marketing

Analysis

GROUP 8 (Section F)

Ankit Chowdhury

Atul Kumar Jha

Deepika Mallyk

Kanhaiya KumarMoumita Dey



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Table of Contents

Page No.

1. Executive Summary 2

2. A Brief History 2

3. Value Chain 3

4. Market Analysis 6

5. Product Analysis 7

6. Financial Analysis 10

7. SWOT Analysis 11

8. PEST Analysis 13

9. References 15



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EXECUTIVE SUMMARY

VisionCadbury’s vision is to align with its core purpose and hence, the vision has been defined as: “Life full

of Cadbury and Cadbury full of Life”. Cadbury’s vision is of a peaceful and equitable society which is

free from discrimination and based on the principle of social justice for all. [1]

MissionThe mission statement of Cadbury spells it promise: “Cadbury means quality”. The reputation of the

company is built upon the quality of its products. They believe that their commitment to continuous

improvement will ensure that they deliver their promise. Cadbury always attempts to operate as a

socially responsible business and has established itself as a company of fairness and integrity. [1]

ObjectivesCadbury India Private Limited aims to achieve its mission and vision by laying down its objectives

clearly wherein they want to make a lot of chocolates and improve the quality of their chocolates. In

addition to this they want to achieve an average revenue growth of 20% per year and increase their

earnings by 15% annually. They also want to increase their dividends per share by 7% per year. [1]

Drivers & ChallengesThe major driver for the chocolate industry in India include the belief of the consumers who are

more concerned about their health. In addition to this there are a large variety of applications of the

chocolates wherein they are used across numerous occasions in various seasons and and festivals of

India. The chocolate industry faces numerous challenges are in the form of the prices of the raw

materials and the unstable supply of cocoa to the chocolate industry. The concerns for the chocolate

industry are that the industry is facing a serious threat from the counterfeit market. The consumer

preferences are also very fickle and is again a great concern to the industry. The functional use of

chocolates, the market in the rural areas of the country and the organic and fair trade chocolate are

the few major opportunities for the industry.

CADBURY-A BRIEF HISTORY

GLOBAL VIEW

Cadbury the 2nd largest confectionary product in India took birth in the Bull Street of Birmingham,

England in 1824 by John Cadbury [2]. John was basically a tea and coffee seller and few expensive

chocolate drinks which were bought only by rich customers. The market was also small and was

limited to the sub urban areas of London and had no visibility outside London.

John collaborated with Benjamin in 1824 and formed the “Cadbury Brothers” which was the first

official form of the Cadbury product. In 1847 the duo launched the first ever “Cadbury bar” [3]. The



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different Cadbury bars which we see today in the market owe their existence to this bar.

The company was later taken over by the sons, George and Richard Cadbury in 1861 at a time when

the company was facing severe financial crisis. Both the brothers invested 4000 Pound (current value

600,000 pounds) [3] to expand their product range and increase their customer value. The product

was still very expensive and hence was not affordable by a large group of community.

The brother started aggressively expanding the market from 1867 [3]. They established chocolatefactories in various parts of England. While George looked after production and purchase of raw

materials, Richard was more focussed on the sales and the marketing aspects of the business.

The brothers not only extended the bar segment but also started adding a wide range of products

which included eggs, chocolate milk, roses etc. Soon with the development of milk trays and

advancement in operation technology, the production cost was minimized and Cadbury became

common man’s product.

1900s marked a new beginning in the history of Cadbury. The trademark product of Cadbury i.e.

Dairy Milk was launched in 1905 [2] and it paved the way for the Cadbury to become the leader of

the chocolate bar segment. The company also started its ad campaign in the early 1900s and the

“half milk” logo was also introduced. Cadbury had by now recognized a global brand and had its

presence in other countries as well. From 1900s to 1950s Cadbury launched more than 30 varieties

of chocolate bars and several drinks.

Cadbury was earlier acquired by Krafts Food in 2010 with a total valuation of US$18.9 bn. [2] This

acquisition resulted in 75% control over Cadbury by Krafts Food. However this takeover was widely

disputed because of the immense loss of employment due to it and very soon drift started taking

place within the company. Finally in 2012, the company was split in two companies with the

Mondelez international taking control of the Krafts confectionary which included Cadbury as well.

INDIA

Cadbury marked its presence in India in 1948 [2]. In India the company was renamed to Mondelez

India Foods Limited. With headquarter situated at Mumbai, the company established its operating

facilities at six location namely, Thane, Pune, Gwalior, Hyderabad, Bangalore and Himachal Pradesh

with an annual output of 8000 tonnes [2].

Initially the company imported bulk of its raw materials i.e. the cocoa beans from Ghana. But in 1987

Cadbury started cultivating cocoa beans in India as well [3]. 22 nurseries were opened in Kerala

Agriculture University where bulk production of cocoa was undertaken to provide the raw materials

at easy rate to the manufacturing facilities. Cocoa being a cash crop, farmers were widely affected in

season of bad growth. Subsequently Kerala government signed MOU with Cadbury and minimum

support price, minimum bag buy etc. programmes were decided to safeguard the cocoa beans

cultivators.

Currently major products sold in India are Dairy Milk, 5-star, Perk, Temptation, Gems, and

Bourneville.

VALUE CHAIN

1. INBOUND LOGISTICS

Cadbury has two source of raw materials, one through import of beans from Ghana and rest is

grown locally in Kerala Agriculture University and Karnataka nurseries. For imported beans, third



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party merchants buy beans from the Ghana framers and ship them to different countries. Cadbury

India is also dependent on these third party logistics (currently 11 in no) for the import of their raw

materials. Locally grown beans are directly transported to the manufacturing facilities by company

owned and operated logistics.

For milk, refrigerated trucks are used to transfer dairy products to the manufacturer

2. Procurement Cadbury bar segment has two main products, cocoa beans and milk.

Cocoa beans are both imported and grown locally. Ghana is the main source of the cocoa beans and

bulk of the raw material is obtained from here itself. In India, Kerala and Karnataka nurseries aslo

cater to the Cadbury India for the cocoa beans.

Milk is another important raw material used in the manufacture of the chocolate bar. Milk is

obtained from different dairy farms. The milk is kept in silos and transported to various processing

industries where it is pasteurized and homogenised.

3. Operations Cadbury India has six operating facilities in India. They are located at Thane, Pune, Gwalior,

Hyderabad, Bangalore and Himachal Pradesh.

Beans are already segregated from their shell before exporting them to the manufacturing plant. In

the operating plant beans are further refined and separated from bean butter. Other raw materials

like milk and sugar/glucose are also process and pasteurized in the plant which are subsequently

passed through different stations at the assembly line to give the final, packaged Cadbury chocolate

bars.

Cadbury India has separate quality control department at each operating facility and follow stringent

measures to uphold the quality and the standard of the product. Being a milk, hence a perishable

product the role of quality control department becomes more significant.

4. Sales & Marketing

Cadbury has always tried to maintain its brand image through extensive advertisement and

marketing strategy. From “Kya swaad hai zindagi main” to “Kuch meetha ho jae” Cadbury has deeply

impacted and occupied special position as a sweet dish in the Indian family. Cadbury has always

endorsed its products from famous film stars like Amitabh Bacchan, Preity Zinta etc to create the

superior value of their product.

Besides Cadbury has always stressed to make best use of occasion and festive seasons to market

their product. They come up with customized products like Dairy Milk Celebration on various Indianfestivals like, Raksha Bandhan, Diwali, Holi etc. They also try to capture some close to heart

moments to individual like first salary, child birth, marriage proposal, exam success etc. to create an

image that Cadbury is not merely a chocolate bar but a traditional way to celebrate nay special

occasion in the family.

Cadbury India has got four major sales office at New Delhi, Mumbai, Kolkata and Chennai.

5. Outbound Logistics

The outbound structure of Cadbury includes four components: manufacturer, retailer, wholesaler

and consumer. Outbound logistics takes care of planning, implementing and controlling the physical

flow of the products from the manufacturer to the consumer. Cadbury uses information technology

to improve its logistics and distribution competitiveness. Cadbury has improved its distribution

quality by installation of refrigerated spaces at the outlets. Cadbury sells its products directly to



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retailers and wholesalers. The distribution network of the company encompasses 2110 dealers and

4, 50,000 retailers. Cadbury reaches 0.6 million retail outlets. After the worm fiasco, Cadbury has

insured that that the packaging standards are proper and the integrity and quality of the product is

maintained.

6. HR Management

The human resource management aspect in the Cadbury’s business in India covers the threedimensional management: best practice view, best fit view and best resource view. Best practice

model links the achievement of company’s organizational performance, whatever the condition of

the environment, by following a single bundle of HR policies and practices. Best fit model is based on

the idea that HR strategies flow from business strategy. Whatever the business strategy is, the HR

will fit to that strategy. The HR team strives to create an organizational culture wherein they focus

on a wholesome involvement. All the employees are encouraged and management are encouraged

to participate in work and boost the passion for work in them and, hence, increase their efficiencies.

The rewards and benefits system, the bonus, compensation and PRP policies are all laid out in such a

way that these motivate the employees to attach a great value to the organization.

7. Servicing

Cadbury has tried to ensure that the customer service aspect of the organization is given the highest

importance as, above all, customer is the king. The quick response to the customers’ concerns and

their changing needs and requirements have made sure that Cadbury sells the highest in India. The

introduction of the various products to suit the Indian festive scenario and the various marketing

strategies which have made a big space in the hearts of the Indians also proves that Cadbury wants

to become a part of the Indian culture and is here to stay.

8. Administrative, Finance Infrastructure: The administrative and financial infrastructure of the company ensures that the organization hires

highly capable employees for research and development of the product. The finance department

ensures smooth transaction of monetary resources between the parent company, Mondelez,

International and Cadbury India.

9. Product and Technology Development:

As the chocolate market is saturated, it becomes more and more important for the chocolate

manufacturers to be innovative and keep on developing new products to retain their dominance in

the industry. Apart from being competitive by introducing new products, Cadbury also has to sustain

its existing products’ quality and integrity so that instances similar to the worm instance are not

repeated again. As a part of this policy they have introduced the refrigeration facilities at all the

outlets across their distribution network. Mondelez India’s continuous effort to strive for product

innovation has made them to spend a tremendous amount of money for their research and

development department. Pearl fisher is the design agency that looks after the execution of the

Cadbury pack’s new look. Cadbury is constantly trying to reduce the wastes generated from the

production of chocolate.



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Market Analysis

India’s chocolate consumption has been steadily increasing and the demand has been projected to

touch four billion US Dollars by the end of next year [4]. India's chocolate sales crossed Rs 10,000

crore in 2014, up 24% from a year earlier, according to Euromonitor [4]. On a per capita basis,

Indians consumed roughly 117 gm of chocolate a year, the least among emerging markets. However,the sheer size of the market makes India a profitable proposition. Mondelez India, formerly Cadbury

India, leads the market with 55.5% share in value terms, with five of its brands among India's top 10.

Fig 1: Share Value of top 10 chocolate brands

Fig 2: Growth in chocolate segment (Volume for 2019 is forecast)

Market Share of Different Chocolate Manufacturers

Fig 3: Market share of

chocolate manufacturers in

India

30.6

7.9

6.7

5.6

5.4

4.2

3.1

3

2.4

2

0 5 10 15 20 25 30 35

Cadbury Dairy Milk (Mondolez India)

5 Star (Mondolez India)

Munch (Nestle India)

Kit Kat (Nestle India)

Cadbury Gems (Mondolez India)

Cadbury Perk (Mondolez India)

Cadbury Celebrations (Mondolez India)

Kinder Joy (Ferroro India)

Nestle Premium Milk Chocolate (Nestle…

Ferrero Rocher (Ferrero India)

0

2

4

6

8

10

12

14

16

18

2010 2011 2012 2013 2014 2015 2019

Volume ('000 tonnes)

Value (Rs '0000)

62%

18%

6%

3% 3% 8%

Market Share

Cadbury

Nestle

Mars

Ferrero

Amul

Others

http://economictimes.indiatimes.com/topic/chocolate

http://economictimes.indiatimes.com/topic/Cadbury%20India





http://economictimes.indiatimes.com/topic/chocolate



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Product

Analysis

4-P AnalysisThe 4 P’s of Mondelez India are discussed below briefly

1. ProductMondelez India has got very popular products across different segments viz. chocolate

confectionary, candy, and drinking chocolate products. In the chocolate category, the company is

the undisputed leader with brands like Cadbury Dairy Milk, 5- Star, Perk, Bournville and Choclairs.

While Bournvita has significant market share in milk additives segment, Halls is popular as a mouth

freshener.

2.

PricingMondelez India has adopted different pricing strategy for different products. Some brands like 5-

Star, Perk and Chocolairs are available at low prices. Cadbury Dairy Milk is available in different

variants, the premium ones like Dairy Milk Silk, Dairy Milk Fruit and Nut are priced higher than the

basic product. Cadbury Celebrations has achieved a position of gifting and sells high volume even at

higher prices

3. PlaceThe distribution of Cadbury is fantastic and widespread. It is present strongly in all urban areas as

well as A, B and C category towns. Cadbury’s distribution channel includes the manufacturing

warehouses where the production of chocolates takes place. This is followed by retailers and

wholesalers. In the 65 years, Cadbury has deep penetration, 2500 distributors, 5, 50,000 retailers,

22% mid-urban customers.

The entire distribution channel can be represented as below:

CNF- Cost Freight DIS- Distributors (Wholesalers) RET- Retailers

Fig 5: Distribution Network of Cadbury India

CADBURY INDIALIMITED

CNF CNF CNF

DIS DIS DIS

RET

RET

RET



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Fig 4: 4-P Analysis of Cadbury India

4. PromotionMondelez India promotes its brands through various media like TV commercials, print, social media

and hoardings. A review of the past promotional campaign shows how the company is targeting all

age-groups as well as leveraging Indian traditions. Some of the most popular campaigns are “Kuchh

meetha ho jaye” which aims to replace consumption of sweets on special occasions with chocolates;

“Khane ke baad meethe me kuchh meetha ho jaye” targets the habits of Indians to have desserts

after meal. Besides advertisements, Cadbury has a dedicated website.

Product Mix:Product Mix refers to the variety of the product line that the company offers. Cadbury India, offers a

wide variety of products in terms of chocolate bars, Bags and boxes, beverages and biscuits.

Fig 5: Product mix



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Product Depth:Product line depth refers to the number of products in a company's specific product line. Cadbury

has the deepest product line in the chocolate industry. It has utmost variety in the chocolate bars

segment in terms plain milk chocolate, dark chocolate, fruit and nuts and various other flavours. It

offers Diary Milk, Diary Milk Silk, Temptations, Bourneville, Gems etc.

Fig 6: Dairy Milk- Product Depth

Fig 7: Dairy Milk Silk Product Depth Fig 8: Temptations Product Depth

Dairy

Milk

Dairy MilkShots

(8gm, Rs2)Dairy Milk(12gm, Rs

5)

Dairy Milk(23gm, Rs

10)

Dairy Milk(40gm, Rs

20)RoastedAlmonds(42gm, Rs

30)

Crackle(42gm,Rs 30)

Fruit andNut

(44gm, Rs

30)

Dairy MilkSilk

Dairy Milk Silk

Plain Chocolate(60gm, Rs 60)

Roasted Almonds

(60gm, Rs 60)

Fruit and Nut(60gm, Rs 60)

Orange Peel(60gm, Rs 60)

Temptations

Rum and Raisins(72gm, Rs 65)

RoastedAlmonds (72gm,

Rs 65)

Hazelnut (72gm,Rs 65)

Apricot (72gm,Rs 65)

Cashewnut(72gm, Rs 65)



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Fig 9: Bourneville Product Depth Fig 1o: Product Depth of Gems

Fig11: Celebration Product Depth

Financial Analysis of Cadbury India:In 2012, with the new parent Mondelez International, Cadbury India though performed consistently

in the past experienced downs in revenue growth. When American conglomerate Kraft Foods split

Bournville

Raisin & Nuts(40gm, Rs 30)

Raisin & Nuts(90gm, Rs 75)

Rich Coco(40gm, Rs 30)

Rich Coco(90gm, Rs 75)

Almonds(40gm, Rs 30)

Almonds(90gm, Rs 75)

Hazelnut(45gm, Rs 30)

Hazelnut(90gm, Rs 75)

Gems

Gems (11.4 gm, Rs 5)

Gems (28.4 gm, Rs 15)

Gems Jar (307 gm, Rs111)

Celebrations

Celebrations(104.41 gm, Rs

50)

Celebrations(122.9 gm, Rs 75)

Celebrations(252.2gm, Rs 150)

Celebrations (324gm, Rs 450)

Celebrations(432gm, Rs 600)



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up into two companies, Mondelez International came into existence. The international business of

company was spun off including Cadbury and Oreo and named Mondelez while most of the assets

remained in Kraft.

Cadbury India experienced a go-slow in sales and profit in 2012, in spite of launching Toblerone,

renowned Swiss triangular chocolate brand, 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."

From the above chart, it can be inferred that lowest growth rate in total sales turn-over was

experienced in 2012 which was about 20.8% when compared to growth observed in 2011 which

accounted to 34.4%. This setback can be seen as Modelez International’s plans to revolutionize

growth in emerging markets.

SWOT ANALYSIS

Strengths

High Brand Equity and Brand recall

Very High Product line and depth

Employee strength of 71,000

Highly targeted and segment oriented promotional campaigns

Strong R&D and innovation

Strong distribution and Network operations

0

1000

2000

3000

4000

5000

Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

Revenue Model

Sales Turn Over in Cr Reported Net Profit



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Opportunities

Individual Cadbury stores: Increase the range of products, company can easily venture into

new segments individually or jointly.

Theme stores: Chocolate themes boutiques

Introduction of foreign products in India: target urban areas and work of affordability and

availability.

Introducing product for the gum market in terms of Nicotine patches in India

Introduction of jellies (to counter the competition of Perfetti etc.)

Introduction of low calorie chocolates

Sugar free candies

Weakness 6.3 crore population suffers from diabetes, cholesterol disorders etc.

Chocolate eating population (specially kids) is prone to Dental problems

Sales tend to be seasonal (sale of Celebrations spikes during festivals)

Threats

Rising prices of cocoa (%)

Influenced by: Extreme weather

Pests and disease

Speculation and political instability in producing countries.

In 2000, oversupply of beans saw prices slump to a 27-year low of around $714 a tonne.

Then prices rocketed to a 32-year high of $3,775 a tonne in 2011.

New brands are entering (Mars International is opening International India focusing on

Snickers and galaxy bars)



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PEST ANALYSIS

1. Political FactorsPolitical factors are mainly associated with government policies which may bring in economic, legal

and social changes. For example, Cadbury India started a plant in Himachal Pradesh in 2005 to get

benefits of a 10- year ‘Tax Holiday’ scheme of the central government. However, it is now battling

tax demands of over 500 crores on charges of excise-duty evasion for the same plant [6]. It is

believed [that the new government at the centre is trying to increase tax-rate collection and already

a number of companies like Cairn India, Royal Dutch Shell and LG Electronics are facing tax claims

[7].

Further, the government is likely to implement GST soon which is may have inflationary effect on

food products including chocolates in the short run. On the other hand, government policies like

providing support to cocoa cultivators under ‘National Horticultural Mission’ in 2008 had positive

effects for the company by reducing need for costlier imports [8].

2. Economic FactorsSome of the economic factors that may affect Mondelez India are economic growth rate, inflation,

interest rate and unemployment. According to RBI’s bi-monthly monetary statement, the estimated

GDP growth for 2015-16 is 7.8%, up from 7.5 % of the previous year [9]. Further, RBI has gone for

third rate cut of 25 bps within a year [10]. This is likely to increase investment and growth of the

company. A reduction in CPI inflation from 7.8 % in 2014 [11] to 5.8% (projected) [9] in 2015-16 willincrease disposable income of consumers and the sales of chocolates may get a boost.

3. Social FactorsIn addition, there are also concerns in the western world owing to rising cases of obesity, especially

among children. Many nutritionists recommend people to reduce their consumption of chocolate

and candy, which is likely to affect Cadbury sales in the future.

Company launched its Cadbury Glow Signature Experience in the form of a 15-day pop-up store at

Select City Walk mall in New Delhi. The company plans to promote the brand across key retail

outlets, too, with initiatives such as free-standing displays.Siddhartha Mukherjee, Director, Chocolate Category & Media, Mondelez India Foods Ltd, said

globally, chocolate gifting constitutes nearly 15-35 per cent of the total chocolate market, while in

India this is just about 5-7 per cent. “So, we see a huge opportunity for the festive as well as non-

festive gifting market to grow in India.

4. Technological FactorsMondelez India has improved technology by bringing in new brewing machines to blend coffee and

cocoa beans. Packaging has undergone major changes after the worm incident. Moreover, a

pathogen testing system and cold chain have been introduced to improve quality of products.



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REFERENCE

1. http://in.mondelezinternational.com/home

2. https://en.wikipedia.org/wiki/Cadbury

3. https://www.cadbury.co.uk/

4. http://articles.economictimes.indiatimes.com/2015-02-16/news/59196990_1_mondelez-india-cadbury-india-chocolate

5. http://indiafonline.com

6. http://www.reuters.com/article/2015/04/06/mondelez-intl-india-tax-

idUSL3N0X31XY20150406

7. http://www.livemint.com/Politics/TYyPOQ8UJi7InOgPrZrpYO/Beware-prowling-tax-officers-

as-Modi-woos-you-to-make-in-Ind.html’

8. http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/minister-moots-cocoa-as-an-

intercrop-for-coconut-farmers/article1351030.ece

9. http://www.thehindu.com/business/highlights-of-rbis-first-monetary-policy-

statement/article7076884.ece

10. http://www.thehindu.com/business/highlights-of-rbis-first-monetary-policy-statement/article7076884.ece

11. http://www.indiainfoline.com/article/news-top-story/gdp-growth-at-5-6-for-2014-15-

cpi-inflation-rate-at-7-8-for-2014-15-ficci-114091500025_1.html

http://in.mondelezinternational.com/home


https://en.wikipedia.org/wiki/Cadbury


https://www.cadbury.co.uk/


http://articles.economictimes.indiatimes.com/2015-02-16/news/59196990_1_mondelez-india-cadbury-india-chocolate





http://indiafonline.com/


http://www.reuters.com/article/2015/04/06/mondelez-intl-india-tax-idUSL3N0X31XY20150406





http://www.livemint.com/Politics/TYyPOQ8UJi7InOgPrZrpYO/Beware-prowling-tax-officers-as-Modi-woos-you-to-make-in-Ind.html





http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/minister-moots-cocoa-as-an-intercrop-for-coconut-farmers/article1351030.ece




http://www.thehindu.com/business/highlights-of-rbis-first-monetary-policy-statement/article7076884.ece










http://www.indiainfoline.com/article/news-top-story/gdp-growth-at-5-6-for-2014-15-cpi-inflation-rate-at-7-8-for-2014-15-ficci-114091500025_1.html























MM Final Project Group 8

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