emerging trends

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Cadbury Credits Ganesh Karthikeyan.K(09ad10) Mansurali.A(09ad23) Raghunath.V(09ad31) RajeevGandhi(09ad34) Swaminathan.K(09ad44)

Transcript of emerging trends

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Cadbury Credits

Ganesh Karthikeyan.K(09ad10)Mansurali.A(09ad23)

Raghunath.V(09ad31) RajeevGandhi(09ad34)

Swaminathan.K(09ad44)

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Overview

- The story of CHOCOLATE- Introduction - Company History- Cadbury International- Cadbury India- The Kraft Takeover- Suggestions

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The story of CHOCOLATE

• First people who made chocolate were the Mayas and the Aztecs

• They drank chocolate as a bitter and spicy beverage called “xocoatl” (“bitter water”)

• Chocolate played an important role in their social and religious life

• It symbolized life and fertility and was also used as medicine

• It was a drink for wealthy and important people (royalty, priests, etc.)

• Cocoa beans were also used as money

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Introduction of Cadbury PLC

• Leading global confectionery company

• Outstanding portfolio of chocolate, gum and candy

brands

• Headquartered in Cadbury House, England

• Production in over 60 countries

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Introduction of Cadbury PLC

• The firm has changed hands thrice from the time of

its inception as Cadbury brothers.

• Until the Kraft takeover of Cadbury PLC, it remained

to be one of the oldest family managed business.

Cadbury brothers

Cadbury Scweppes PLC Cadbury PLC Cadbury PLC,

Kraft

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Cadbury International

•Cadbury’s global operations are in the following

categories.

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Cadbury International

•Cadbury’s global operations are in the following

regions.

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Cadbury International BIMA

Britain and Ireland: Chocolate + candy + gum.

•Britain and Ireland is the largest business unit in the group.

• Cadbury enjoys a huge heritage quotient and is the market

leader in this region.

• Last financial year the company’s sales shot up by 12%

Revenue £1,270m

No. of employees 5600

Manufacturing sites 8

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Global Competition

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Cadbury India

• Entered INDIA in 1948 through imports.

No. of employees 2000

Manufacturing sites 5 - Thane, Pune, Gwalior, Himachal Pradesh & Bangalore

• Cadbury is the market leader in the confectionary segment in India.

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Market Share in India

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Critical success factors

• Extensive distribution network

• Creation of strong brand equity

• Customization of products

• Leveraging the India advantage

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Market Entry Strategy

• Cadbury was one of the very first MNC’s to identify

potential unserved market in India.

• Reaped the Early mover Advantage.

• Entered as a wholly owned subsidiary

• Phenomenal success in India by employing unique

marketing strategies with specified objectives.

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Porters Five force Analysis1. Competitors rivalry:Cadbury in India is facing cutthroat competition from

Nestle, Nestle has been slowly eating into the market share of Cadbury.

Chocolate is an impulse product enjoyed all over the world, hence it does not face threat from substitutes

There is almost no bargaining power of consumer in this industry, however there is great price sensitivity.

Threat from suppliers is not high as the distribution is extensive with no single large supplier.

Threat of new entrants is high as the market has fewer barriers to enter and players like Lindt and Suchard have not yet entered India

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Case 1:Reinventing Cadbury:

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Case 1:Reinventing Cadbury

• In the late 80’s Cadbury changed the way Indians looked at Cadbury.• They promoted a product meant for children and designed for them, to adults by saying “to bring out the child in you”• The slogan “Kya swad ye zindagi mein”- The real taste of life• They came up with a series of succesful ads.

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Case 2:AB Germ free guy

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Case 2:AB Germ free guy

• Cadbury to free itself off the germ worm

controversy, introduced the pappu pass ho gaya

campaign.

• They chose the trust brand of India Mr.Amitabh

Bhachan as the brand ambassador.

• The campaign revolved around any paltry reason

was good enough to celebrate with cadbury.

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PEST AnalysisPolitical: Since the budget range is decontrolled, no political effects are envisaged.

Economical:• Increasing per capita income resulting in higher disposable income.• Growing middle class/urban population – increase in demand. • Low cost of production through economies of scale – better penetration. 

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PEST AnalysisSocial:Increasing gifts culture – increase in demand .Lower cholesterol than “mithais” (sweet meat) substitute demand. Dairy milk light variant serves calorie conscious

Technological: Will have to reinforce technology to international levels. 

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Strengths•Brand identification•Heritage•Supply chain and distribution•Efficient Marketing•Constant innovation in variants

Weakness•Germ worm controversy•Product close to saturation in metroes•Uncontrolled distribution to unorganized retail• Poor technology

SWOT Analysis

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Opportunities

• Untapped rural market•Kraft provides wider portfolio• Growing gift culture• Growth of department stores

Threats• Nestle • Obesity • Fragmented market• Globalization opens the market.

SWOT Analysis

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4 P’S OF CADBURY

PRODUCT:• Chocolate bar• Made from real dark chocolate. • Similar design worldwide. • Contains more milk than any other chocolate bar. • Available in 10.5g, 22g, 95g, 165g & other premium

packs

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PRODUCT LIST

• Diary milk

• Fruit n nut • Roast almond• Crackle• 5-star• Relish • Picnic

• Perk • Gems• Nutties • Caramel • Googly • Mr.pop

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PRICE

• Price is same all over india.• Competetive pricing.• Due to price hike in raw material and labour

cost company had not increased the cost of product but reduced the weight of product.

• Eg. 5 rs pack was of 13gm but now it is 10.5gm

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PLACE Five company-owned

manufacturing facilities• Thane • Induri (Pune)• Malanpore (Gwalior)• Bangalore• Baddi

(Himachalpradesh)

Sales offices• New Delhi• Mumbai • Kolkatta• Chennai Headquarter• Mumbai

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PROMOTION• Strong brands are very important in the chocolate

confectionery market. • Almost 80% of chocolate purchases are made on impulse. • The media mix for the campaign comprises TV, outdoor,

Internet and radio.• Use of emotional appeals in advertising.• Concentrated more on TV. Advertisement.• The ‘Real Taste of Life’ with the girl dancing on the cricket

field • The message: ‘Dairy Milk is for enjoyment’

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Cntd...• Campaign: ‘kuch metha ho jaye’.• Target: to associate Cadbury with celebratory

occasion.• Cadbury appointed Amitabh Bachchan as its brand

ambassador.• The Big factor that has pushed up CDM sales is the

Amitabh Bachchan campaign.

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PACKAGING• Aluminium foil• Paper cover• Plastic cover

• PRESENT

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ADVANTAGES OF PACKAGING

• Protect the product from physical damage or deterioration

• Display the product – good graphic design and shape is important.

• Attracting customers• Improved efficiency

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Kraft takeover of Cadbury

Kraft acquired Cadbury during feb 2010.

Biding- $ 19.1 billion

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Cadbury-Kraft

Kraft had till date operated in India through an import model and had been selling only one brand ‘Tang’ powder drink here through distributors.

A couple of years back, it sold off its powdered soft drink concentrate plant in Hyderabad since low volume offtake meant the plant was not commercially viable in the long term

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Benefits of Takeover (Global)

Kraft will displace Mars Inc as the world’s biggest candy maker, according to Euromonitor data.

It will create a company with about $50 billion in annual sales, adding Cadbury’s Crème Eggs and Trident gum to Kraft’s Oreo cookies.

Cadbury-Kraft jointly accounts for 60% of the global absolute retail value gain for the packaged food market over the same period.

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Benefits of Takeover

The joint Kraft/Cadbury entity has become the 2nd largest packaged food conglomerate in Latin America.

In Asia-Pacific, the company now joins the ranks of the top 10 packaged food companies across the region, moving from 17th to ninth position in 2009.

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In India

The deal would give Kraft Cadbury’s distribution network for its beverages, cheese, dairy products and snacks in addition to Cadbury’s chocolates.

 India, the confectionery sales in local currency terms is expected to increase by an average of 14.8% annually through to 2014, is without doubt one of the highlights of Kraft's new emerging market opportunity.

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Kraft activitiesKraft is planning strategies to establish its name in the market.

The first step is strengthen Cadbury's current product portfolio. 

Assesment of the brands, categories and products resonate the best with Indian consumer. The challenge is to think not like leaders but like challengers.”A key element of the challenger's strategy will be targeting the lower end consumers -- that means, for starters, lower price packs. 

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Kraft Activities

Kraft Foods Inc.  is seeking to raise the profile of Cadbury products in China.

The U.S. food giant ramps up investments in developing markets, particularly the Asia-Pacific region (Indonesia, India, China, Australia, New Zealand, HongKong, Philippines)

The top ten ‘power brands’ finalised by kraft for its markets are: Cadbury Dairy Milk chocolates, Halls lozenges and Trident gum, three Cadbury brands.

They join Oreo cookies, Milka chocolate, Lacta chocolate, Jacobs coffee, Tang drink mix, Club Social/TUC crackers, Biskuat/Biscuits.

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Suggestions

Maintain the same old recipe for chocolates.

Host competitions at schools and other colleges and give free samples of cheese to gain good customer base.

Could develop a new product altogether, infusing new blood. Kraft should take special care not in anyway to change the taste of Chocolate especially in the Europe market.

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Cadbury World

•Cadbury World, located in Birmingham, is a visitor attraction dedicated to telling the story of Cadbury and chocolate.• As winner of the ‘Large Visitor Attraction of Year’ award at the‘Heart of England Excellence in Tourism Awards,’ • Cadbury World welcomes a vast number of customers, especially family groups, on a daily basis.

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