How Do Brands Become No. 1... in Fmcg

8/9/2019 How Do Brands Become No. 1... in Fmcg

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HOW DOBRANDS BECOMENO. 1... IN "FMCG"


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CONTENTS

Topic

Acknowledgements

Executive summary

Introduction

What is a Brand

How do Brands Become No. 1 inFMCG?

Objective of the Project

Research Methodology

Industry Overview

History of chocolates

Company Profile (for Chocolate Brands)

Nestle.

Cadbury

Product analysis

Kit Kat Vs CDM

Analysis of Competition

Current Segmentation targeting andPositioning

What is Strong Brand

Data Analysis and Findings

Cadbury's & Nestle

(Consumer Perception)

Cadbury & Nestle (RetailersPerception)

To Become a No. 1 Brand (in FMCG)One has to be ...

Analysis of Success or Failures

Conclusion


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Bibliography

References


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EXECUTIVE SUMMARY

This project was undertaken to find out the attributes that make a brand

No. 1. An exploratory and descriptive research was undertaken.

Sample of two brands were analysed namely - CDM, Kit Kat. The brands

were selected on the basis of their usage and noticibility. Total sample size

of 100 respondents selected on the basis of convenience was surveyed,

which included consumers, retailers and dealers.

Data was collected from secondary as well as primary sources. Structured

questionnaire was used to collect primary data.

Various statistical tools such as modal value, correlation, simple averages

and percentage were used to analyse the collected data.

From the above analysis it was concluded that in a highly competitive

FMCG market the following parameters were considered important for anyproduct (Chocolate) to become a No. 1 brand :

Top of the mind recall

Change in the style and code of the brand

Availability

Advertising

Keeping the brand alive

A clear brand personality

Satisfied retailers

These conclusions are based on a thoroughly conducted survey and gives

some insight of the characteristics that go in to make a brand the No. 1 in

its product category.


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INTRODUCTION

What is a Brand ?

The concept of a brand is probably the most powerful idea in the

commercial world. The formal history of brands is in many ways a prosaic

one, starting not all that many years ago when mass production and wider

distribution led manufacturers to identify (or brand) their merchandise in a

recognisable way, so as to offer a promise of consistent quality. But the

real history of brands is much longer and more interesting. Brands truly

understood are the things which patrol the boundary between people and

the world outside them. Well before the industrial revolution people were

acquiring swords, horses, estates even countries, not only for their

usefulness but because of what they projected about the person him or

herself. In a deeper sense, people have always used objects not just to

change outward impressions, but also to change things inwardly, i.e. to

change themselves. Childrens obsession with trivial objects like, say

coloured pens, is instructive. Once they have acquired the desired, but

frequently useless object, their interest disappears because they find that

no amount of coloured pens makes you into a different person.

The same is sadly true in later life. The anticipation of owning a fast sports

car is never matched by the reality. In truth, one car turns out to be much

like another, and youre still the same person. The science and art of

branding has become much more valuable since its practitioners havelearnt to expand the notion beyond the makers mark and pure

performance-based claims, to embrace the whole relationship between a

product or service and its customers.


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In the yearly 1990s, the marketing big wig were deliberating vociferously

about The Immortal Brand and it was said that :

Building age and become dilapidated.

Machines wear out.

People die.

But what live on are the brands.

The metaphor is clear: the brand as deity, a sentient being whose

existence transcends our merely human lifespan. And indeed this how we

in marketing and advertising talk of brands. They life cycles; they have

personalities. In our research we personify brands, and find consumers can

play the game. Unconsciously we credit the brand with some kind of

absolute platonic existence. Our mission is to discover (rather than invent)

its core values and abide by them. In fact, the brand is a rather primitive

kind of god. If we keep its laws and pay regularly the tributes due (mainly

advertising), fortune will smile on us - otherwise disaster.

Now most of this is way of saying valuable and important things about

branding. Brands can live longer than people. The metaphor of personality

has been very helpful, here. A brand may have personality, but it is not a

person, still less a good on a cloud. you cannot talk to its and it cannot

answer you back. In fact, a brand has no absolute or objective existence -

nor are its core values are engraved on any stone. A brand is simply a

collection of perceptions in the mind of the consumer.

The tentative answers in this chapter - and I regard it only as an essay

which I hope others may improve on - are rather complex. Branding can be

seen as satisfying various different needs, and working at different levels

and in different ways. What I will suggest in fact has happened is that

brands originally begin as a badge or promise of certainty in an uncertain

world, and that this offers simple and functional benefits to any consumer.

But because a brand offers this kind of certainty it also becomes a kind ofcurrency for consumers to carry out less obviously related kinds of


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transactions with themselves and with each other. In a sense, consumers

have hijacked brands for their own purposes. But all the ways in which

brands can be used derive from the basic promise of certainty, and I will

therefore argue that we are talking about one coherent, if complex

phenomenon. Brands as a badge, and brands as personality are aspects of

the same thing.

At its simplest, a brand is a recognizable and trustworthy badge of origin,

and also a promise of performance. But to be No. 1. is the name of the

game. To be the Best brand in a product category entails much-much morethan just being recognizable, trustworthy promise of performance. It is to a

very large extent perceptual in nature. In other world, it is directly

proportional the consumer. And, Consumer is the King. To be No. 1. is

something that every brand in its lifespan would try to achieve. Is it

possible? If yes, what does it take to be No. 1.? Lets find out.

How do Brands Become Number One ?

Now a days, everyone is talking about Kit kat, McDonalds, Marlboro etc.

But what is common to these Brands, that makes them the talk of the town!

The common feature in these brands is that, either they are, or have been

the Number One Brands of the worlds.

Since Liberalization of the Indian economy, Indian companies are now

facing tough competition from these brands. Nestle is here to compete with

its traditional rival Cadbury and with other Indian brands of Chocolates. on

the other hand, had an even tougher task to gain market share in the

Indian market, as is had to compete with two players, Amul and Campco.

McDonalds has come into the Indian market only a few months back and is

already creating waves. Its giving a tough competition to the already strong

local player Nirulas which has been on the scene for a long time.


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Now, the talk is of the cigarette giant Philip Morris Inc. of Marlboro fame

planning to enter India with its world famous brands. What should the

Indian big wig ITC do to make their brands of cigarettes compete against

the challenge posed by the one time Number One brands of the world ?

Are there any common attributes in the Number One brands which make

them Number One? To find out the answer to this question and also to find

out whether these attributes can be applied across different industries lets

take a journey into the World of Brands.

OBJECTIVE OF THE PROJECT:

To find out the attributes which make the Brand Number in FMCG

Chocolate Industry (Cadbury's and Nestle)


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RESEARCH METHODOLOGY

Type of Research : Exploratory and Descriptive.

Sample Units : Two of the Number One brands in India namely Cadburys

and Nestle, respectively, were chosen on the basis of their market shares.

These two industries were chosen on the basis of the usage of the

products, as the usage of FMCGs and is high and noticeable.

Sample Design : Non-probability sampling was resorted to and the

methods used is Convenience sampling and Judgement sampling.

Sample size : The total sample size is 120 which includes consumers of all

the two brands, retailers of Cadburys and Nestle .

Data Collection : Data was collected both from Secondary sources as well

as Primary data was also collected. A structured Questionnaire method

was used to collect the primary data. Secondary data was soured from

various published sources which includes magazines like A&M, Business

India and Business World. Newspapers like Brand Equity, Brand Wagon

and The Times of India were also used. Annual Report of Cadburys andNestle were also referred

Data Analysis Techniques used are :

Modal Value

Correlation

Simple Average

Percentage

Data was analyzed manually and with the help of computer software

EXCEL, to make graphs and pie charts.

Limitations of the Project :

1. For generalization of the results a study needs to be undertaken based

in a larger sample across different industries.

2. Since the study is confined to Delhi only, the findings cannot be applied

to other parts of the country.


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INTRODUCTION

HISTORY OF CHOCOLATE

The story of chocolate began in the New World with the Mayans, who

drank a dark brew called cacahuaquchtl. Later, the Aztecs consumed

chacahoua and used the cocoa bean for currency. In 1523, they offered

cocoa beans to Cortez, who introduced chocolate to the Old World, where

it swiftly became a favorite found among the rich and noble of Europe.

From the beginning turning raw, bitter cocoa beans into what one 17 th

century writer called the only true food of the gods has been a fine art, a

delicate mixture of alchemy and science. Centuries ago it was discovered

that by fermenting and roasting the beans, an almost otherworldly flavor

could be created. In 1875, after years of trying, a 31-year-old candy maker

in Vevay named Daniel Peter figured out how to combine milk and cocoa

powder. The result milk chocolate. Peter, a friend and neighbor of Henri

Nestle, started a company that would quickly become the worlds leading

maker of chocolate.

Currently it has a market capitalization of 100 billion Swiss franks. Another

household name in the field of chocolate market is Cadbury Schweppes

Plcs having $ 4.2 billion company and has a presence in 200 countries.


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company profile(for Chocolate brands)

Cadbury Nestle


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NESTLE A PROFILE

For 130 years, the Nestle story has been a tale of growth and expansion. In

1875, when Henri Nestle sold his company to a group of Swiss

businessmen, they incorporated the firm with a capitalization of one million

Swiss francs. Eight years later, as an attempt was made to merge the

Nestle Company with arch-rival Anglo Swiss Condensed Milk Company,

the capitalization of Nestle had risen by a factor of 10. On the eve of World

War 1, the value of Nestle, which by no included the Anglo-Swiss

Condensed Milk Company, stood at 60 million Swiss francs. By 1929, the

value had climbed to 145 million Swiss francs. Today, Nestle has a market

capitalization that has risen to around 100 billion Swiss francs.

SEGMENT OF NESTLE (World Wide)

By Geographic Area

Country 2001

Europe 36.7%

North and south America 31.8%

Africa, Asia and Oceania 19.3%

Other Activities 12.2%


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By Main Product Group (Nestle)

Product 2001

Beverages 27.4%

Milk Products, Nutrition & Ice Cream 27.6%

Prepared Dishes and Cooking Aids 25.2%

Chocolate and Confectionery 15.2%

Pharmaceuticals 4.6%

Nestle break up at a glance

Expenses (in %)

Raw Materials 26.2

Packaging 8.8

Salaries and Welfare Expenses 16.6

Depreciation 4.1

Other Trading Expenses 34.5

Total Trading Expenses 90.2

Trading Profit 9.8

Total 100

Nestles Chocolate and Confectionery

Nestle: Crunch, Cailler, Frigor, Chokito, Sarotti, Galak/Milkybar, Yes, Kit

Kat, Quality Street, Smarties, Baci, After Eight, Baby Ruth, Butterfinger,

Lion, Nuts, Roto, Aero, Polo, Bar one Charge, Classic etc.


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CADBURY SCHWEPPES PLCS

Chairman: Dominic Cadbury

Share Capitalization: $ 4.2 billion

Presence: 200 countries worldwide

Indias Scene (Turnover RS. 354 crores) (20012002)

Cadbury Schweppes business in India is split into two companies: -

Cadbury Indian Ltd. for Confectionery

Cadbury Schweppes Beverages India (CSBI) Pvt. Ltd. for soft drinks

Registered Office: Cadbury House, Poddar House, Mumbai

Managing Director: Rajeev Bakshi

Financial Position:

1997 : Sales 13%

Profit 17% (Due to 80 cr. Investment)

1998 - profit was 28 crore

Turnover of Chocolate is 2/3 of 354 crores

Advertisement spend % change Sales Ad spend % of sales

29.62 cr 15.75 354.4 cr. 8.36%

CADBURYS CHOCOLATE (MAJOR PRODUCT)


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1995 Perk

Thodi si Pet Puja

With minimum chocolate condition.

1997 Truffle Rs. 18/447

People resented both the price and flavour.

1998 Picnic

1999 Kuch Zyada Hi Solid

Cad bury gold (Prior to truffle)

CADBURY DAIRY MILK

CDMs AD :

Real Taste of Life


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PRODUCT ANALYSIS

(KIT KAT VS CDM)

KIT KAT

It is a hybrid between biscuit and chocolate

It is not a traditional type of chocolate and it is not too sweet

The chocolate is light and easy

Most people enjoy the unique ceremony of gliding their finger down the

foil to unwrap the chocolate.

Consumer say that the tearing of the foil and breaking of the finger is

really interesting and it adds to the eating .. like a game.

CADBURYS DAIRY MILK

CDM is a regular range of chocolate slabs

It has a traditional chocolate taste

It gives full chocolate experience too sweet and too rich


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PRODUCT TRUTH

A Tale of two experiences

Kit Kat

(Chocolate Surprise)

CDM

(Chocolate Temptation)

Altogether different Chocolate

experience

Full Chocolate experience. Too

rich

Light and easy Un questioned too rich and

too sweet

Not fulfilling


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ANALYSIS OF COMPETITION

Indian Chocolate market having a turnover of Rs. 350 crore (20,000

tonnes) has three major market players CIL dominating the market by

capturing 71% of the market share, followed by Nestle having 20% of

market share, Amul having a niche market of 6% and remaining 3% with

small players.

Nestle introduced Kit Kat in 1995, which brought in competition to the

monopolistic Chocolate Industry , dominated by Cadburys India Limited

(CIL).

Nestle introduced its Kit Kat brand with an all time unique feature of wafer

biscuit and chocolate, thereby giving light taste to its brand. Knowing this

entry as an uphill task they responded positively by exploring innovative

and early adopters market through Kit Kat which is a premium priced

brand. Nestle approach of entering Chocolate market was supported by the

7777333reluctant attitude of Monopolistic, CIL who uptill then never tried to

diversify their product with such innovative product features.

This resulted in eating up of 20% of market share of CIL by Nestle within a

short period of 3 years. .Kit Kat had hold good and touched huge volumes

at a significantly high price. The up market image of Kit Kat had caused

some worry to CDM.

Though CIL introduced Perk to subside the daunting effort made by Nestle,

Kit Kat. But Perk could never withstand the competition due to the

combination of unique and better quality of product, good packing and

effective communication tools adopted by Kit Kat.


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In the present scenario CIL is seeing Kit Kat as a threat to CDM the main

weapon in its arsenal. Kit Kat having developed an upmarket image

promises to make competition stiffer in times to come.

Thus, in a nutshell, CIL has been losing its Prestige share to Nestle.

Share in percent of the 20,000 tonnes chocolate market in 2002

Cadbury

71%

Nestle

20%

Amul

6%

Others

3%


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AN OVERALL REVIEW OF COMPETITION

CADBURY INDIA LTD. NESTLE INDIA LTD

Sales (total ) 354.14 crore 1489.33 crore

Advertisement (total) 29.62 crore 79.89 crore

Advertising Rank 27th 5th

CHOCOLATE MARKET : 337 CRORE

(20000 tonnes)

Chocolate share

CADBURY CHOCOLATE NESTLE CHOCOLATE

236 crore (2/3 of CIL sales) 67. 42 crore (4.5% of total sales of

Nestle)

70% of chocolate market 20% chocolate market

Advertising expenses

CADBURY CHOCOLATE NESTLE CHOCOLATE

26.66 crore

(90% of CIL Ad exp.)

31.96 crore

(40% of Nestle Ad Exp.)


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CADBURY DAIRY MILK KIT KAT

Sales 129.8 crore 57.29 crore

55% of CIL chocolate 84.9% of Nestle chocolate

38.5% of chocolate market 17% of chocolate market

CADBURY DAIRY MILK KIT KAT

Advertising Expenses 13.33 crore 17.58 crore

50% of CIL chocolate ad

exp.

55% of Nestle

Chocolate ad. Exp.

AD AGENCY

Cadbury Dairy Milk Ogilvy & Mather (O&M)

Kit Kat Hindustan Thompson Associate (HTA)


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CURRENT SEGEMENTATION, TARGETING &

POSITIONING

SEGMENT

CDM KitKat

Age Group (in years)

8-14 25% 7%

15-20 24% 23%

20-25 31% 28%

25 and above 20% 42%

Income Group (Monthly income in Rs.)

For both the brands

4000-8000 16.2%

8000-12000 28.3%

12000-16000 32.0%

16000 & above 23.5%


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TARGET

Kit Kat

Youngsters and Adults having a yearning for light sweet snack in the age

group of 20-25 and also from 25 and above are the target customers of

Nestle Kit Kat

CDM

Its target is almost equally vast as its segment i.e. ranging from kids and

youngsters to adult willing to go in for traditional rich and sweet chocolate.

POSITIONING

Kit Kat

Kit Kat wanted to position it self as a ritualistic break -time snack and it

had been successful in bringing this image, by their slogan Have a break,

Have a Kit Kat, which is used worldwide. Kit Kat has strong association

(young, modern, fun) but an image that is nascent.

CDM

Wanted to position the product as real taste of life. Wanted to moveChocolate from the realms of pure indulgence for children to indulgence

for everyone. It tries to position itself as a stimulant for those who wants to

find the real taste of life through its advertisement by depicting

emotional associations in synchronization with the product experience.


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WHAT IS A STRONG BRAND ?

Before understanding What is a strong brand or How to build a strong

brand, we must understand Why is it hard to build a strong brand?

David A. Aaker in his book Building Strong Brands has said :

It is not easy to build a strong brand in todays environment. The brand

builder can be inhibited by substantial pressures and barriers, both internal

and external. These pressures and barriers are :

1. Pressure to compete on price : This affects the motivation to build a

brand.

2. Proliferation of Competitors : This reduces the positioning options

available to the brand builder.

3. Fragmenting markets & media : Increases the complexity in building a

brand. As of today with the media getting fragmented it becomes very

difficult for the brand builder to decide the most effective option.

4. Complex brand strategies and relationship : This also increases the

complexity for the brand builder as he has to maintain all the

relationships of the brand with the outside world.

5. Bias towards changing strategies : The temptation to change a sound

strategy, by the top management is a major problem faced by todays

brand managers. This might lead to a weak brand.

6. Pressure to invest elsewhere : If the brand is strong the management

does not feel the need to invest in that particular brand. This may be

caused by arrogance or more often by complacency.


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7. Bias against innovations : Generally, if the brand is doing well in the

market place the management does not feel the need to innovate. This

again is caused by complacency on the part of the management.

8. Short term pressure : Short term results pervade the organizations. The

management does not think of the long term benefits, in the process

many brands do and strong brands become weak.

The irony is that many of the formidable problems facing brand builders

today are caused by internal forces and biases that are under the control of

organization.

Now the question arises how to build a strong brand. For this David A.

Aaker in his book Building strong Brands has suggested certain

measures which, if practiced, can make a brand strong.

According to David A. Aaker to become a strong brand the brand must

Learn to change their style and products in order to remain in fashion and

up to date. According to the author of building Strong Brands, to manage

effects of changes in time one must :

1. Permanently Innovate

2. Cultural Evolution : As the values, customs and behavior patterns are

continuously evolving, so must the should evolve to keep pace with

these changes.

3. Clientele advance and grow older : The power of the brand lies in its

ability to cater to the needs of its clientele without adjusting its faith or

becoming a brand for elders. The brand must respond to the needs of a

continuous sequence of clientele.

4. Core value of the brand is kept permanent over long run. The core

values of a brand should remain the same and must be reflected in any

thing the brand indulges in.


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5. Style and codes of the brand is a reflection of the brands core identity.

Style should be related to the brands deep identity.

6. Communication : Clear understanding of brands core and source point

is the essence of communication. Since now the market is not restricted

to a particular geographical area the communication and images are not

homogenous throughout the world.

Therefore, a strong brand is the one with high brand equity. Brand equity

generates value for the customer as well as for the firm. Brand equity of a

brand is not created overnight, it is over a period of time that brand equity

is created and a brand which has withstood the test of time becomes a

strong brand and a Number One Brand.

This project was chosen to find out whether these features of building

Strong Brands, if applied, can make a brand number one or not.


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DATA ANALYSIS & FINDINGS

Data was tabulated manually and was also analyzed manually. EXCELwas used to make graphs and pie charts. Main techniques used were :

Model value was used to analyze the questions with ranking.

Percentage were used to analyze those questions which had two choices

as their answers.

Simple averages were used to get answer to question of Semantic

Differential scale.

Correlation was used to find out relationship between two variables.


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CADBURY & NESTLE(Consumer Perception)

Sample Size : 50 consumers

1. This question was used to analyze Brand Recall of chocolates which

would help us establish whether the chocolate with top of the mind

recall is the most widely consumed or not.

Findings :

On the ranking scale of the highest brand recall a total of 26

respondents said that when they think of Chocolates - its Cadbury.

Second on the recall level is Nestle

Nestle is followed by Amul

2. This question along with question # 1 will help us establish the fact that

positive relationship exists between top of the mind recall and

consumption of that brand.

According to the survey 46% of respondents say that they consume

Cadbury's followed by Nestle 34% hence the positive relationship

between brand recall and consumption is established. 20% of the

respondents consume other Chocolates

There is a perfect correlation of 1.0 between top of the mind recall and

consumption of that brand.

3. This question is used to find out whether Brand loyalty exists in

Chocolates or not.


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Findings :

Brand Loyalty is very low, with 82% respondents willing to switch their

generally preferred brand if they do not get the brand of their choice.

This leads to another question which says why do consumers prefer

Cadbury's? On the semantic differential scale respondents have marked

their choice that of availability an important parameter.

Therefore availability of the brand should be widespread as loyalty is low.

4. This question is used to find out respondents preference of Cadbury

over Nestle or vice versa. This will establish another fact whether the

Chocolate is consumed or not.

Findings :

58% respondents prefer Cadbury and 42 % prefer Nestle. Respondents

which consume other chocolates that is 20%, prefer cadbury more thanNestle as 63% respondents were in favour of Cadbury's.

Hence, it is established that Cadbury's is the most widely preferred and

consumed chocolate.

5. After getting the preference of the respondent the next question is to find

out as to why he/she prefers this particular chocolate. This will help find out

the attributes which influence the purchase behavior of a consumer indeciding whether to consume the number on brand or any other brand.

Findings :

In the case of Cadbury Taste and availability are the two most important

attributes that make it the most widely consumed brand in India.

In case of Nestle, taste is followed by the attribute - brand being more alive,

that is the brand continuously evolve with culture.


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If we take both the brands together then it can be seen that Taste and

Keeping the brand alive are the most important attributes that makes a

brand number one.

These are followed by availability, matching the brand personality with

consumers and packaging.

If we take into account those respondents who consume other chocolates

and classify their choices then it is again evident that taste and keeping the

brand alive are the two most important attributes that make a brand strong.

There is a high degree of positive correlation 0.73, consumption of Cadbury

and availability of the chocolate

3 2 1 0 -1 -2 -3

More Popular ---- ---- ---- ---- ---- ---- ---- Less Popular

Attractive Packaging ---- ---- ---- ---- ---- ---- ---- Unattractive Packaging

More Fizz ---- ---- ---- ---- ---- ---- ---- Low Fizz

More Availability ---- ---- ---- ---- ---- ---- ---- Less Availability

Excellent Taste ---- ---- ---- ---- ---- ---- ---- Bad Taste

Fits with your Personality ---- ---- ---- ---- ---- ---- ---- Does not fit with the personality

More Alive ---- ---- ---- ---- ---- ---- ---- Less Alive

Key : ____ Cadbury , ------ Nestle

6. Kit Kat's packaging is famous all over the world.

Therefore to find whether, using a different shaped pack helps distinguish

ones product form the other.


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Findings :

60% of the chocolate consumes like the pack of Nestle.

Thus we can say that packaging of the chocolate eaters has little

significance in distinguishing ones product from the other. This can also be

established from the findings of question # 5 in which respondents marked

the liking of the packaging towards the lower end of the scale.

7. As CDM is the number one brand in Chocolate category in India. This

question will answer why is it doing better than Nestle which, is the number

one brand of the world.

Findings :

By calculating the modal value it was evident that because of :

a. This is followed by availability,

b. Which is then followed by advertising, that is the adaptation of

communication to the Indian Culture.

c. After that comes promotional activities and

d. Finally comes Indianisation of the brand.


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10

4

11

3

6

5

182

0 2 4 6 8 10 12 14 16 18

Promotional

Activities

Advertising

Indianisation of

Brand

Availability

Ranking

Score

8. This question was asked to find out the effectiveness of communication.

Aided recall was used in the form of Nestle's tag line.

Findings :

61% respondents remembered the tag line of Kitkat, reason for which could

not be Indianising the communication. Till recently, the company had been

using international ads to advertise.

9. For Cadbury unaided recall was used to find out whether localizing

communication has any impact on the recall level and hence the

purchase decision.

Findings :

78% respondents remembered the tag line of Cadbury, which is high,

considering that it is unaided recall. This makes Cadbury the Top of the

Mind brand hence is widely consumed and preferred.

10. To find out the authenticity of the responses, this question was asked.


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Findings :

Most respondents remembered the tag line of Cadbury being The RealTaste Of Life.

11. & 12. These questions was used to administer the brand personality of

the two chocolates. This is also an important parameter because a clear

brand personality ads to the strength of a brand.

Findings :

Cadbury : Belonging to the age group of 15-25 years, male, cool, not

stereo typed, outgoing, independent, full of life, open to new ideas. He also

sophisticated, savvy and sports loving.

Nestle: This person belongs to the age group of 30-40 years and is a

business man, belonging to the upper middle class. Mature, sincere,

hardworking, smart, sophisticated, rich, controlled, intelligent. He is short,

lazy and rounded.

Some respondents have said that this person is also energetic, lively,

mean, warm from within. This clearly shows that Nestle has a conflicting

brand personality unlike Cadbury, and a conflicting brand personality can

harm the image of the company.


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CADBURY & NESTLE(Retailers Perception)

Sample Size : 50 Retailers

1. This question was asked to find out whether the Number One brand is

the most demanding.

Findings :

By finding out the model value of the responses, it was evident that

Cadbury is the most demanded brand.

Nestle is the second most demanded brand, followed by Amul and

Campco.

Therefore the Number One brand if the most widely demanded one

followed by the second of the recall level.

2. This question was asked to find out the attributes that a consumer

considers before buying a chocolate, as it is the consumer who makes

the brand Number One. Another objective was to find out whether the

attributes rated by the consumers are the same as perceived by the

retailers.

Findings :

According to the survey it was evident that Taste is the most important

attribute that the consumer considers before purchase.

Second to Taste lies Popularity which is followed by Availability and

Promotional activities come on number four.

Consumer does not eat the chocolate under the influence of their peer

group as it falls low on the ranking scale i.e. on # 7.


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According to the consumer survey of the Cadbury eaters Taste, Availability,

The Brand is More Alive and Popularity are the most important attributes

that influence the consumer to consume the chocolate. Hence, it can be

inferred that Taste, Popularity and Keeping the Brand Alive are the most

important factors that make Cadbury the Number One Brand.

7

10

12

6

5

15

13

5

4

3

6

7

1

2

0 2 4 6 8 10 12 14 16

Fizz

Promotional

activities

Availability

Fits w ith

personality

Influence

Taste

More Popular

Rank

Score

3. As availability has a high degree of positive correlation with consumption

it is important for any company who have wide spread retail network.

This question was asked to find out what motivates a retailers to keep

a particular brand of chocolates

Findings :

The findings clearly indicate that retailers keep a brand because of the

consumer pull and the brand name. Therefore, the company was try to

convince their target consumers to consume their brand of chocolates.

Company support comes at No. 3 of the ranking scale and then is the

Promotional schemes . Therefore, to be a Number One Brand the


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consumers play a very important role, more important than the retailers as

they influence the retailers to keep a particular brand.

4 & 5. Since the shelf space of a particular brand depends on the retailers,

keeping them satisfied is as important as keeping the consumer

satisfied. Therefore, to judge whether the retailers of Cadbury and

Nestle are satisfied or not, these questions were asked.

Findings : Most of the retailers are not satisfied with the credit terms

because of the trade is on cash terms. Barring a few retailers in big

markets, no retailer is given credit. But retailers of Nestle are slightly betterthan that of Cadbury as they score 3.83 as against 4 on the scale of 5.

Retailers are more satisfied with Cadbury as regard to timely delivery as

they score 1.37 which is highly satisfied and Nestle scores 2.16 which is

satisfied. Here one can see why is Cadbury doing better than Nestle.

As regard to Replacement, both the companies are fairly close to each

other but Cadbury again is slightly better than Nestle as it scores 2.75 and

Nestle scores 2.79 which is neutral.

The Promotional Activities of Cadbury keep the retailers slightly more

satisfied than that of Nestle as it scores 3.25 as against Nestle 3.33.

POP Material given by Cadbury is more satisfying for retailers than that of

Nestle as they score 2.70 and 3.08 respectively. On the commission front,

both the companies fair poorly on the scale as the retailers are dissatisfied

with the company. The scores of 3.29 and 3.83 for Cadbury and Nestle

respectively are an indication of the same. What is surprising, is that both

the companies give the same commissions but the scores of Cadbury are

better than Nestle.

Cadbury is also doing better than Nestle in terms of Complaint Handling,

though the retailers are dissatisfied with both the companies. In terms of

Company Support both the companies are once again close and they are

on the neutral mark with 3.0 and 3.33 as the scores.


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Retailers are satisfied with advertising of Cadbury and neutral with that of

Pepsi. The scores are 1.62 for Cadbury and 2.13 for Nestle.

By analyzing these attributes we can see that both the companies are neck

to neck on the satisfaction scale, but due to the customer pull, the retailers

have to keep both the brands. But shelf space provided and the retailer

push is more towards Cadbury than Nestle. Some retailers even told that if

a consumer asked for no particular brand of chocolate, they give them

Cadbury instead of Nestle.

2.125

3.33

3.83

3.41

3.08

3.33

2.79

2.16

2.83

1.62

3

3.62

3.29

2.7

3.25

2.75

1.37

4

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

Advertising

Co . Support

Complaint Handling

Commission

POP M aterial

Promotional

Activities

Replacement

Timely Delivery

Credit

Cadbury

Nestle

6. There are so many promotional schemes that these two companies

indulging, but to find out whether the sale of a particular brand is

affected by others or not, is answered by this question.

Findings :

56% retailers said that the sale of a particular brand is not affected by the

promotional schemes of the other brand. This could be because, not all

retail stores are given this scheme and since those stores that do not give

a chance to run the schemes may not like to talk too high of the sales

being affected .


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TO BECOME A NUMBER ONE BRAND

(IN FMCG) ONE HAS TO BE...

1. At the Top of the Mind Recall. It is established that there is a perfect

correlation of 1.0 between the Top of the Mind Recall and the

consumption of the chocolate this means that the chocolate which

strikes the mind first is consumed.

2. Change the style and code of the brand which Cadbury did by bringing

in Vending Machine.

3. The product should be widely available in the case with Cadbury. As

there is a high degree of correlation of 0.73, between preference of a

brand and its availability, it is suggested that the brand should be widely

available. Cadbury eaters have rated availability on the higher side of

the scale after Taste and Advertising. Moreover, since the brand loyalty

is very low, as 82 % consumers changed their mind if they dont get theChocolate of their choice, availability of the brand becomes even more

important.

4. Advertising plays a very important role in making a brand Number One

and the communication should be done by adapting to the culture of the

particular country as done by Cadbury and not done by Nestle. Nestle

eaters feel very strongly that because of advertising Cadbury is doing

better than Nestle. On the overall raking scale advertising is at #4. If we

look at the history of the Nestle company, we find that Nestle had spent

a lot of money on advertising.

5. The brand should be kept alive as done by Cadbury through effective

Event Management and with a larger voice share. Keeping the Brand

Alive ensures brand awareness and that contributes towards brand

recall.


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6. A clear brand personality is a must so that the consumers can identify

themselves with the brand. A conflicting brand personality does not help

the sales of a brand.

Nestle has a conflicting brand personality as people have portrayed a

confused image when they think of Nestle as a person. They have used

different attributes to define Nestle as a person like Lazy, Full of Life,

Hardworking. Maybe, due to this the sales of the company are hit hard.

On the other hand, Cadbury has a much clearer brand personality. People

can identify themselves with the positioning of Cadbury as can be observed

from the analysis of the questionnaire.

7. Retailers must be kept satisfied as they only push that brand with which

they are more satisfied (in this case Cadbury).

It is clear from the analysis of the questionnaire of the retailers that even

though they have to keep all the brands of chocolates because of customer

pull, but as far as pushing the brand, the dealers play an important role.

They provide shelf space to that brand with which they are satisfied. In this

case, the commissions provided by both the companies are the same but

still the retailers are more satisfied with Cadbury and therefore they push

the brand more than Nestle.


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ANALYSIS OF SUCCESS OR FAILURE

The Indian chocolate market has almost totally depended on kiddie

purchases. The market tends to wildly swing up and down with chocolate

prices. CDM took a major initiative at bringing grown ups into the market.

The objective makes chocolates a legitimate indulgence for adults. To

move chocolate from the realms of pure indulgence for children to

indulgence for every one.

CDM advertising has shown adults eating chocolates, at times self

consciously, at times brazenly. All set to warm, emotive sound track; like

the real taste of lifeand your license to dream.

Contrast this with Kit Kat. The entire brand advertising is focused on the

product. Open the pack break the foil along the ridges, Peel the foil off,

Break the chocolate wafer finger and prop it right in.

An elaborate ritual that is legitimized by the promise. Have a break have

a Kit Kat. There is no mention of chocolate. There is no mention of milk.

All the communication is product- centric. No great music No. domining

girls and premium pricing to boot.

Who is Playing it Right ? CDM or Kit Kat

While CDM is trying to sell an indulgence to adults, Kit Kat is selling a

ritualisticbreak to teenagers/young adults. Now pull back a bit and the

mosaic that is India. Indians are not used to sweet snacks. Almost all our

snacks are salty.

So the questions are Is selling sweet snack a sound strategy? Will Indiansaccept a chocolate wager at a higher price.


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Reports indicate that within a very short period of time, Kit Kat has caught

in a very big way across the country. While numerous global brand, have

failed to make an impact in the foods arena, Kit Kat has punched a huge

hole. That too with strategies pretty much perfected in over 50 countries. At

prices that appeared to be very high at one stage.

Cadburys Dairy Milk is supposed to be full of milk. Milk is supposed to be

good for you, any time, any place could Cadbury have gone after tasty-

snacking in a more focused manner?

Now who will own the snacking market? Will it one day become larger

than the ;indulgence market?

Very often, while creating communications for consumer products, it is

tempting to fly too much on pure emotions. Which can relegate the product

an also ran. This is what exactly had happened with CDM. While showing

the emotions the product was over looked.

But at the same time, Kit Kat, as mentioned before focused on the product

itself without any emotional attachment. This working on the fringes of

marketing and entertainment, come as a remainder to us , that it is often

more effective to make the product the hero. Albeit, in an interesting,

amusing, manner. No doubt, this is the secret behind the success of Kit

Kat.


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CONCLUSION

The objective of the study was to find out the attributes which make a

brand No.1. After the study we find that the following attributes are

important in making a brand No. 1.

a. Advertising plays an important role in creating brand awareness, brand

recall and brand recognition which are important in helping a customer

make purchase decision of that brand.

b. Brand should adopt itself to the local culture.

c. Brand should be kept alive.

d. The styles and code to the brand should change as clientele advance

and grow.

e. Brand should continuously evolve with the culture and the product

should innovate.

Thus, we can say that companies which want to make their brands No. 1

should adopt the above findings in their brand building exercise. However

for generalization of the results, a study needs to be undertaken based on

a larger sample across different industries.


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BIBLIOGRAPHY

David A. Aaker (1991), Managing Brand Equity, The Free Press.

Jean-Noel Kapferer (1994), Strategic Brand management, Macmillan

Publishing Co.

Philip Kotler (Eighth Edition), Marketing management, Prentice Hall of

India Pvt. Ltd.

Stewart Pearson (1996), Building Brand Identity, Macmillan Publishing

Co.

How Do Brands Become No. 1... in Fmcg

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