Cadbury's worm issue-Case study

Presented By,

Chaithanya Vijayan

Dhanya ushas

Introduction• Birmingham dates back to the early part of the 19th century,

• John Cadbury trading as a coffee and tea dealer.

• Introduced - cocoa and drinking chocolate

• The founding of the Cadbury business dates back to 1831

• John Cadbury first made cocoa products on a factory scale in an old malt house in Crooked Lane, Birmingham.

• In 1847 -larger premises in Bridge Street

• Navigation Canal to the major ports of Britain.

• Business continued at the Bridge Street site for 32 years

• They move to Bournville and the building –

one of the largest chocolate factories in the world.

• John Cadbury retired in 1861

• business to his eldest sons Richard and George

• Cadbury Schweppes is the No.1 confectionery &

• third largest soft drinks company in the world.

• bring smiles to millions of consumers across 180 countries.

• Cadbury India trading concern in 1947.

• Cadbury --- first taste of chocolate.

• The company today employs nearly 2000 people across India.

• 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.

• They bring the sweetest of smiles to millions of consumers through their dearly loved brands distributed through 5.5 lakhs outlets.

• Cadbury India's four factories in India -- close to 8,000 tonnes of chocolate and the company sells a million bars every day

PURPOSE AND VALUES• Objective:

• Grow shareholder value…over the long term.

• Strategy:

• Create long lasting and sustainable regional positions in our core categories of confectionery and beverages through organic growth, acquisition and disposal.

• Process:

• They achieve this by Managing For Value. Managing For Value Process incorporates- finance

Cadbury worm controversy

• In 8 outlets across Maharastra worms were found in some bars of Cadbury’s bread and butter brand selling 1 millions bars a day and an icon of chocolate in india.2003

• enquiry was instituted by the food and drug administration and negative media publicity spread like wild fore. The extensively graphic media coverage led people to believe that every bar could be contaminated.

• Consequently, sales volume plummeted, retailer cooperation lessened and employee morale dwindled all in all the company’s credibility suffered extensive damage.

Cadbury worm controversy (cont.)

• After a through investigation of the entire supply chain it was found that the problem originated at the distribution end.

• Apparently at the retail outlets the infested bars were placed next to open unpacked items susceptible to worms.

• However although the problem was not of its own making Cadbury did take responsibility for the lack in educating retailers on storage and hygiene.

Cadbury worm controversy (cont.)

• The company began its multi pronged campaign on key print, board cast and electronic media to regain its lost credibility and almost reestablished the category.

• It decide to convey that the root of the problem was as the distribution end, that any food item could face similar infestation

• Cadbury also roped in Amitabh bachhan as its brand ambassador -- reputed for his integrity qualities that Cadbury needed to associate with the brand.

• A rationally and emotionally connecting television commercial, the star gave a first hand account of his visit to the Cadbury factory assuring about the quality of the chocolate, in another version of ad, he also emphasized the safety of the product for children.

Crisis Management & its characteristics

1) Fast and active communication

2) Ability to admit mistakes

3) Clear recovery stage

Challenge

To restore confidence in the key stakeholders

Build back credibility

Make customer believe about safety

To increase the sales

The actions taken by Cadbury to overcome this crisis are:

PHASE I

In media conference new packaging was introducedThe new Purity Sealed packaging was launchedBy investing up to Rs. 15 croreThe metallic poly-flow was costlier by 15%Cadbury didn’t hike the pack priceDouble wrapping for maximum protection to reduce infestation possibility

PHASE II

To communicate these changes

Mr. Amitab bachchan was chosen as Brand ambassador to endorse Cadbury

To reinforce the credibility of Cadbury

Audio visuals with message from star was prepared

To announcement of new pack was done through Testimonial Ad.

Safety communication

• Jan 2004 the company launched a new double packaging that wrapped even the smallest 13gm chocolate in an aluminum foil, heat sealed for complete protection from all sides and further encased in poly flow pack. The over engineered pack.

• The first of its kind in india cost the company a fortune but fulfilled the company's promise to media and consumers

• The new packing was launched amidst much fanfare in media conference. Amongst the material distributed in the conference were a comparison kit allowing evaluation of old and new packs and videos new release with packing and factory shots for television coverage.

• To reinstate confidence among sales people and to motivate them another audio visual with message from the ambassador bachchan was shown in a string of sales conferences

Double packing changing

Campaign Target Shift over years Promo mechanism

1 Real taste of India Child in adult Shift just for kids to the kids to the kids in every adult

TV , print, Hoardings

2 Khanewalon ko khane ka bahana chahiye

Wider masses Appeal to wider mass based on age gender etc

Tv print hoarding

3 Pappu pass ho gaya Youngsters Tv hoardings

4 Miss palampur Rural masses Shift to smaller packs

Tv hoardings

5 Kuch meetha ho jaaye Conversion of sweet consumers to chocolate for special occasion

This was innovative idea and Cadbury went ahead with celelebrations packs with these ads

Tv print hoarding social media

6 Subh aarambh Targeting the belief of that anything begun y having something sweet provides good luck

Converting yet another segment of set consumers.. Before the start of any work

Tv print hoarding social media

Real taste of India

Kuch meetha ho jaaye

Pappu pass ho gaya

Outcome of the effort

• As a result of the integrated campaign Cadbury won over the invincible media and got extensive media coverage that highlighted the company’s perspective instead of pointing a finger at it.

• Surveys revelaed a positive change in consumer perceptions and an increase in their likelihood to buy. Further.not only did Cadbury’s sales recover from the crisis plunge, but also grew by 20%in 2005.

conclusion

• Through timely and consistent marketing communications Cadbury succeeded in solving a daunting business crisis

• With a 360 degree communications approach that targeted various audiences, Cadbury could quickly control and off set the negative word of mouth it had received.

• By integrating a variety of tool like press release and conference consumer advertising, trade advertising, point of purchase communications, packing initiatives, email communications and the like all focusing on the same problem, Cadbury could communicate a unified message and get audiences to appreciate the efforts it had taken to minimize instances of future occurrences.

Thank You