A Marketing Strategy template on Cadbury Chocolate

A Template of marketing strategyAn overview for

Submitted toProf. Jitendra Sharma

Prepared by:
Chetan Panara
Vishal Soni
Jay Akhani

Xcellon Institute-School of Business

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A Marketing Strategy template on Cadbury Chocolate

Xcellon Institute-School of Business

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A Marketing Strategy template on Cadbury Chocolate

OVERVIEW OF MARKET ANALYSIS*

CHARACTERISTICS
SALES POTENTIAL
SHARE ESTIMATE
PROFIT FROM SERVING

Driving Forces and Implications for the Company in Order of Magnitude of Effect
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A Marketing Strategy template on Cadbury Chocolate

1. Driving Force:
Advertisement

2. Driving Force:
Chocolate as desire

3. Driving Force:
Brand Name

4. Driving Force:
Brand ambassadors

5. Driving Force:

Distribution

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implication/impact:
Increase in sales

implication/impact:
Create needs

implication/impact:
Top of the mind recall

implication/impact:
Increase brand awareness
Increase brand equity
Increase sales

implication/impact:
Availability

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A Marketing Strategy template on Cadbury Chocolate

Market Analysis
We have already completed the first level of analysis in identifying the driving forces that lead to changes in
our industry.
The next step is to analyze individual consumers (individuals, and organizations) and to set out our primary
and secondary segments or target markets.

Customer Need Analysis

Key Customer Groups

Customer Needs

1. Children

1. Desire for Chocolate

2. Youth

2. Gift

3. B2B

3. Revenue generation

(Distributer, Wholesaler, Retailer and

All type of channel members)

4. Parents

5. Old age

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4.Care of own children

5. After having lunch or dinner as sweet

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A Marketing Strategy template on Cadbury Chocolate

Product/Service Analysis
Product/Service

Benefit

1. Chocolate

1. Tasty

2. Satisfactory

3. Healthy (In some cases)

Target Segments on Order of Priority

Now match the needs of the customer segments with the benefits of the product /service.
Prime Market: Youth
Secondary Market: Child
Tertiary Market: Entire family
Peripheral Market: Replacement of sweet
Describe the characteristic of the target groups in a little more detail in order to understand the scope
of the markets:
Target Group: Primary Market
Characteristics:
Influence by advertisement
Fashion-trend
Increased Use of chocolate as gift
Sales Potential:

Biggest Market
Second highest population
India has highest number of youth in the world with 45% population will be youth by 2050
Increase of chocolate average consumption by 8 times per head in last 7 years

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A Marketing Strategy template on Cadbury Chocolate

Share Estimate: According to us share of this segment should be around 45% in total sales

Target Group: Secondary Market:

Characteristics:

Increased influence on purchase over the period of time

Emotion bonding with family

Sales Potential:
Chocolate was and will be always a first desire for any children so there will be no doubt on the sales
potential of this segment
Share Estimate:

25%

Target Market: Tertiary Market: Family

Characteristics:

To fulfill childrens need

To show care for children to the world and to increase their image in the public places

Sales Potential:
Biggest say on spending of income
Control over the income
Share Estimate:
17%
Target Market: Peripheral
Market
Characteristics:
Positioning from company as sweet replacer
Use as gift instead of sweets on occasions like Diwali, Rakshabandhan, etc

Sales Potential:

India as Sweet friendly nation

Number of occasions to celebrate and give gift

Share Estimate:
13%

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A Marketing Strategy template on Cadbury Chocolate

Research
Information is not always available from secondary sources but only from primary sources. A list of
needs with cost estimates may identify gaps.
Information Needed
Source
Cost
1. Choice of brand ambassador

The KPMG Group

5o lacs

2. Route map for the sales team

The KPMG Group

30 Lacs

Competitive Analysis
The first step is to identify the competition and analyze their strengths and weakness.
Competitor
1. Nestle

Strength
Strong brand equity in
high class market

Weakness
High price, Low customer base

2. Proctor

Strong brand equity I low market

Low distribution and low

quality

3. Amul

Strong brand loyalty of company

still not a national player

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A Marketing Strategy template on Cadbury Chocolate

Competitive Price Analysis

Competitor

Price
Product/Service

Nestle

High price

Proctor

Low price

Amul

Same price

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A Marketing Strategy template on Cadbury Chocolate

Competitive Analysis

Key Success Factor

Nestle

Amul

Proctor

Product/Service Offering

Product Service

Product/Service Quality
Cost

Management Marketing

Skills Marketing Effort

Technology

Sales Force Distribution

Pricing Manufacturing

Financial Strength

Location

Promotion/Advertising

Total

33

35

27

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Organizational Analysis
This is the internal situation analysis. We need to know our internal strengths and weaknesses and where we
stand in terms of being able to compete effectively in the marketplace. We also need to know our capacity to
take advantage of opportunities.
To start with, a listing of the past five years performance provides the sketch of the past successes.

Evaluators

Balance Sheet of Cadbury India

------------------- in Rs. Cr. ------------------Dec '09

Dec '08

Dec '07

Dec '06

Dec '05

12 mths

12 mths

12 mths

12 mths

12 mths

Total Share Capital

31.07

32.18

33.20

34.36

35.71

Equity Share Capital

Sources Of Funds
31.07

32.18

33.20

34.36

35.71

Share Application Money

0.00

0.00

0.00

0.00

0.00

Preference Share Capital

0.00

0.00

0.00

0.00

0.00

499.73

432.22

372.94

357.73

398.10

0.00

0.00

0.00

0.00

0.00

530.80

464.40

406.14

392.09

433.81

Secured Loans

2.28

32.02

1.28

3.26

3.71

Unsecured Loans

9.89

9.68

7.48

6.75

4.51

12.17

41.70

8.76

10.01

8.22

Reserves
Revaluation Reserves
Networth

Total Debt
Total Liabilities

542.97

506.10

414.90

402.10

442.03

Dec '09

Dec '08

Dec '07

Dec '06

Dec '05

12 mths

12 mths

12 mths

12 mths

12 mths

Gross Block

724.75

586.94

544.77

430.21

395.50

Less: Accum. Depreciation

372.09

335.55

299.18

265.13

234.88

Net Block

352.66

251.39

245.59

165.08

160.62

Capital Work in Progress

152.53

123.86

25.58

82.18

29.55

18.01

2.92

298.49

253.42

258.21

199.82

222.81

151.02

122.08

102.33

Application Of Funds

Investments
Inventories
Sundry Debtors

31.09

19.67

13.14

11.37

10.68

Cash and Bank Balance

271.50

269.59

8.90

11.20

18.40

Total Current Assets

502.41

512.07

173.06

144.65

131.41

Loans and Advances

74.20

69.82

72.34

44.27

53.39

0.00

0.00

0.62

0.62

0.00

576.61

581.89

246.02

189.54

184.80

Fixed Deposits
Total CA, Loans & Advances

Deffered Credit

0.00

0.00

0.00

0.00

0.00

534.02

433.56

370.89

275.84

205.09

22.83

20.40

29.91

25.96

13.41

Total CL & Provisions

556.85

453.96

400.80

301.80

218.50

Net Current Assets

19.76

127.93

-154.78

-112.26

-33.70

0.00

0.00

0.00

13.68

27.35

Current Liabilities
Provisions

Miscellaneous Expenses

S.W.O.T. Analysis
The quickest way to get to a qualitative assessment of the company is via the strength, weakness,
opportunity and threat analysis (S.W.O.T.).
Strengths

Maintain a stable growth of a company,

With its brand name, Cadbury could counterattack the competitors.
Keep up with the financial strength by increasing its sales and profit.
Acquisition rules in UK, reduce its dependence on the UK market.
Overall, Cadbury has been successful through the new products (development) it has
to offer.

Weakness

Weak position in the US market.

Lack of distribution network.

Total French production of chocolate bars and confectionary has slowed down in
more recent years, partly due to the economic slump.

Consumption of chocolate products, fall in demand due to the gloomy economic

situation.

Sales of milk chocolate bars, which account for 24 per cent by volume of total sales
of chocolate bars, decreased by 3.7 per cent.

Opportunities

Through its confectionary product line, to build viable positions in prioritized markets.

Cadbury has other opportunities to have market development in Russia and China.

This company is also at the same time distributing its products via the internet
Develop Gourmet Line.

Besides developing the Low Calorie line of chocolates and sweets, they also offer
the Sugar Free sweets line.

Therefore in order to get the product into a new foreign market, France, Cadbury
would have good opportunities in store for them.

Threats

The company should take note of the changes in the consumers buying trend.

Price wars would occur between its competitors like Mars, Hershey and Nestle.

There would be seasonal sales slumps all year round which will reflect to an increase
in cost of the raw materials needed.

Cadbury would then have to be prepared for growth of small local gourmet
chocolates and regional candy manufacturers.

Also to be aware of the cost of packaging materials as it has increased over time.

Increase Marketing and Promotion globally by marketing products in emerging

markets.

Identification of the
Companys Competitive Advantage
Competitive Advantages (current)
Innovation is at the heart of creating brands people love. Cadburys investment in technology of taste,
flavor, packaging, process development and nutrition has never been greater. Cadbury is supporting our
brands with innovative approaches to marketing and advertising.

Scale of production
Distribution channel
Loyal base of customers

Competitive Advantages (to be developed)

Segmentation on the basis of income of the people in terms of branding

Packaging
Availability in the rural areas

Issues that the Organization Needs

to Address Based on the Situation Analysis

1. Create product on the basis of the competitors

product portfolio

3. Highest R&D player but still need to be consistent as

Nestle.

2. Customize products on the basis of

the nations

Mission

Cadbury's means quality: this is our promise. Our reputation is built upon quality: Our commitment to
continuous improvement will ensure that our promise is delivered

Objectives

Overall Company Objectives:

1. Grow shareholder valueover the long term
returns

3. To deliver superior shareholder returns by

realizing our vision to the worlds biggest
and best confectionery company.

2. Deliver superior shareholder

4. To make lots of chocolate

.

5. Improve the quality of their chocolate

Marketing Objectives:
1. To have offerings in
every category to widen the
market

3. Marketing strategy is aimed at

achieving this vision by growing the
market

2. Cadbury in every pocket

4. Profitability Objective

Financial Objectives:
1. To achieve the higher ROE in every financial year

3. To become most transparent financial company

for its stake holders

2. To provide maximum benefits to the

share holder

4. To increase the consistent cash inflow

Strategy
The first thing to do is to analyze the options and decide where the strategy is heading. In a general way, there
are four directions:
Current Product/Service
Present Market

New Market

New Product/Service
I

II

III

IV

Penetrations (Risk/opportunities in Quadrant I)

Cadburys was to use market penetration for their product, I feel this would not help at all as the current product
they have out in the market which is the Brunchbar, is not doing very well and people would not buy it, so I feel
this would be the worst option to choose.
Product Development (Risk/opportunities in Quadrant II)
Cadburys was to use product development for their product; I feel this could possibly be successful, although
after the failure of their previous product people may not buy their new product.
Market Development (Risk/opportunities in Quadrant III)
Cadburys was to use market development; I feel that again there could possibly be a chance of success, as they
may have aimed their previous product at the wrong market, although people from the new market may also not
be keen to buy their product.
Diversification (Risk/opportunities in Quadrant III)
It is clear that if Cadburys was to use diversification and aim a new product at a new market, there would be a
high chance of success as long as the new product was to meet customer needs, which can be done through
extensive market research to help gather an idea of people who would regularly purchase their product

The Choices
Marketing strategies are statements of the direction of the companys marketing effort. Four
1
choices must be made :
1. The chosen market and target segments.

Youth
Child
Entire Family
Replacement of Sweet

2. The market position and value provided to the selected market.

Advertisement related to all target segment

Use of holistic communication strategy
3.

The distribution channels to be used to reach the market.

Distribution
Chocolate needs to be distributed directly, unlike other fmcg products like soaps and
Detergents, which can be sold through wholesale network. 90% of chocolate products are
sold

Directly to retailers.

Cadbury's distribution network used to encompasses 2100 distributors and 450,000

retailers

To avoid cannibalization of its higher priced products from lower priced ones, Cadbury is

Setting up two separate distribution channels one for core business & other for mass
markets

4.

A list of the activities to be undertaken in order to support the direction taken.

Trade promotions
Retailers connection program
Advertisements to achieve the sales

Statement of Investments
Needed to Implement
the Strategy
1. Capital funds

R&D: 500 Cr. Next 5 year

Advertisement
o TVCs: 20 Cr. Next year
o Print: 10 Cr. Next year
o Radio: 2 Cr. Next Year
Sponsorship of the events:3 Cr. Next Year
Distribution channel member:120 Cr. Next year entire India (incentives, promotional offer
etc.)

2. Human capital
R&D Team: 30 people
Advertisement: 10 people
Events Teams: 10 people
Distribution Channel: 2000 people
3. Expenses

Transportation: 50 Cr.
TA, DA, HRA and other perks: 30 Cr.
Miscellaneous Expenses: 20 Cr.

Organizational Structure to Carry Out Strategy

Action Needed to Create a Market Strategy Supported Culture

1. Advertisement according to the keeping cultural aspect in mind
2. Signing brand ambassador as per the mind spaces of the Indian consumer.

3. Target the rural market of the segment as 70% of the population still live the rural area.

Tactics
Tactics have traditionally been summarized by four variables: price, promotion, product and place (4 Ps). The
following is a good start in developing tactics.

Product/Service:
A price competitive edge while the distribution strategies will ensure that the products reach the final
consumers.
Product description
This marketing strategy will be offering a particular product in the market. It is specifically offering white
chocolate in the Indian market. The main brand that is to be introduced in the market is Cadburys Dream which
is mainly targeted for the adult female population. The product will be offered in 45 gm packages, 100 gm and
200 gm packages. These will be the most important sized packages that the product will be sold in. it will be
sold in whole sale and retail.

Pricing strategies
Since the product is being offered for the first time in the market, the company will use price penetration
strategy where it will use low prices strategy to penetrate the market. However this will be combined with cost
plus pricing since it will have to operate at a profit market. However the initial price set up will be based on the
low prices to penetrate the market. The product will be offered at Rupee 2 per 45 gm size bar.

Distribution strategies
To ensure that the products reach the intended consumer, the company will use the current existing distribution
changing. It will sell the product in wholesale to intermediary wholesales who will in return sell to the retailers.
To reduce on the cost of operation, retailers and distributors will be expected to obtain the product directly
from the company store to reduce the cost of production. However the company will establish a number of
stores on all provinces to take the product close to the retailers. Taking the product near to the consumer will be
the main pillar for the success of the distribution marketing strategy.