Product - Strategy - Cadbury 46312q

Product Strategy Chocalate as a product and developing into confectionary Product

Eating Chocolate Is Inconsistent With A Healthy Diet With so much going for it, it's unfortunate that chocolate is often surrounded by myths and misconceptions that result in its unjustified reputation as an 'unhealthy' food. Scientists are beginning to dispel common myths about the concerns of eating chocolate, demonstrating the ways in which chocolate can make us feel good when enjoyed in moderation. One example of this would be the high levels of cardiovascular friendly antioxidants contained in chocolate - in fact, dark chocolate in particular contains more antioxidants by volume than red wine11 12. There is no need to exclude chocolate from a healthy diet as long as it is consumed responsibly and in the context of the dietary needs of the individual and their energy balance. Chocolate causes Tooth Decay Chocolate has sometimes been blamed for tooth decay but there is research showing that chocolate isn't as bad for your teeth as people think. Research has indicated that naturally occurring substances in cocoa, such as tannins, may play a role in inhibiting plaque formation. Eating Chocolate gives you spots Despite the persistence of this myth, research by the Pennsylvania School of Medicine and also by the U.S. Naval academy13 found no link between acne and chocolate consumption. Chocolate has no nutritional value Few people know that chocolate actually contains a number of important nutrients. Milk chocolate is a source of potassium, calcium and magnesium, while being low in sodium. It also provides us with vitamins - including B1, B2 and E. Chocolate is Aphrodisiac Though not definitively proven, recent research has indicated that this might not be a myth after all! A study conducted by San Raffaele hospital, Milan14 has found greater levels of sexual desire in the group that reported daily chocolate intake as opposed to those who did not eat chocolate. Some more facts

The calcium in a 49g milk chocolate bar provides over 15% of your daily Reference Nutrient Intake (RNI). The magnesium in a 45g bar of dark chocolate provides 13% of a female's and 15% of a male's daily RNI. One 45g dark chocolate bar provides you with up to 12% of your daily iron RNI. The copper in a 45g dark chocolate bar provides 27% of your RNI. As much as 22% of your RNI of riboflavin can come from a single 49g bar of milk chocolate. A 49g milk chocolate bar provides you with 33% of your recommended daily vitamin B12 intake

How Cadbury Leveraged the Chocolate as a product and strategized its entry into confectionary market

Analysis of consumer behaviour

Cadbury India's main source of revenue is its 70% bite of the 23,000 tonnes Indian chocolate market. It is also present in the malted food market (Bournvita enjoys a 24 percent share of the 20,000 tonnes brown drinks market). Of late, the company has ventured into the 120,000 tonnes sugar confectionery market ('Googly') and has gained about 5% market share there. The revenue break up of its different business segments is as follows:

Despite the fact that Indians have strong affinity for sweets, the size of domestic confectionery market is small on of traditional consumer tastes and habits. The Chocolate market in India is a niche market penetrated largely in urban areas and per

capita consumption is low as compared to those in developed countries of the West. But future prospects of the chocolate category looks good as the company plans to move into the arena of snack foods, as it has done in the Western markets. The market for Malted food drinks is large and is characterized by a few large players. The market can be broadly segmented into white malted food drinks which dominates in the Southern and the Eastern parts of the country and Brown Malted food drinks which dominate in the North and the West. Large brands like Bournvita and Horlicks dominate in Malted food drinks sector and the growth has been steady in the last five years. The future mission of Cadbury India is 'A Cadbury in Every Pocket'. The company's business strategy hinges on following for driving its future growth: • •

Increase the width of chocolate consumption, through low price point packs and distribution focus. Increase depth of consumption, targeting regular chocolate consumers through generating impulse and a dominant presence at Point of Sale.

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Maintain image leadership through a superior marketing mix.

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Be a significant player in the gifting segment, through occasion linked gift packs.

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Build critical mass in the sugar business by introducing value-added sugar confectionery products.

Future revenue growth will be through increasingly higher volumes rather than price increases. The management believes that price increase can only be a short term objective. It is volumes, which are very important to achieve the long-term goal of having a wide consumer base. The company sees its growth in future in market expansion and new product launches. Increased reach, new launches, higher marketing spend and intensive promotions - the mix, Cadbury is looking at to fuel its future growth. The company is also looking for acquisition of brands, and its huge cash reserves might be utilized for the purpose. Performance of segments Items

Sales Value (Rs.Lakhs) 12/2008 12/2009 %Change

Malted Foods Cocoa Powder and Drinking Chocolates Chocolates, Coated Wafer Biscuits and Sugar Confectionery.

11436.90 13144.75 747.22

14.93%

723.94

-3.12%

38923.60 43245.03

11.10%

Products The company manufactures and sells • • • • • • •

Chocolates Sugar confectionery Malted foods, Cocoa powder, Drinking chocolate and malt extract Candy Gum

Established brands of the company in the Chocolate segment includes Dairy Milk, Perk, Crackle, 5 Star, Eclairs and Gems. The other brands in sugar confectionery category are Googly, Frutus and Gollaum ; which are yet to get a foothold in india and making an effort to gain a major market share In the malted health category, Cadbury has a strong brand in Bournvita. Other food drinks offered by the company are Cadbury’s Drinking Chocolate and Cadbury’s Cocoa powder. The company is also into the business of Soft drink and has drinks like Canada Dry and Crush.

Few Examples of how Cadbury has defined its product

Cadbury Milk Chocolate The story of Cadbury Dairy Milk started way back in 1905 at Bournville, U.K., but the journey with chocolate lovers in India began in 1948. The pure taste of Cadbury Dairy Milk is the taste most Indians crave for when they think of Cadbury Dairy Milk. The variants Fruit & Nut, Crackle and Roast Almond, combine the classic taste of Cadbury Dairy Milk with a variety of ingredients and are very popular amongst teens & adults Cadbury Dairy Milk has exciting products on offer - Cadbury Dairy Milk Wowie, chocolate with Disney characters embossed in it, and Cadbury Dairy Milk 2 in 1, a delightful combination of milk chocolate and white chocolate. Giving consumers an exciting reason to keep coming back into the fun filled world of Cadbury

Snack –segment – Cadbury Byte Cadbury Bytes was launched in 2004-05 as Cadbury's foray into the rapidly growing packaged snack market.

Cadbury Bytes is a one of a kind snack, in that it is sweet and not salty, as compared to most of the other snacks. It's a bite sized snack with a crunchy wafer and rich Choco cream filling. There are three variants of Bytes available in the market - Regular, Coffee and Strawberry, at two price points- Rs 5 and Rs 10. Cadbury Bytes is targeted at teens as they are the largest consuming segment of packaged snack category. They are also the gateway to the family, especially for a new sweet snack

Beverages – Segment – Bournvita Cadbury was incorporated in India on July 19th, 1948 as a private limited company under the name of Cadbury-Fry (India). Cadbury Bournvita was launched during the same year. It is among the oldest brands in the Malt Based Food / Malt Food category with a rich heritage and has always been known to provide the best nutrition to aid growth and all round development. Throughout it's history, Cadbury Bournvita has continuously re-invented itself in of product, packaging, promotion & distribution. The Cadbury lineage and rich brand heritage has helped the brand maintain its leadership position and image over the last 50 years.

Therapeutic Candy – Segment - Halls Halls was first launched in India in 1968 & soon established itself as a ‘therapeutic’ candy competing in the cough lozenge market. Halls has been sold in India as part of the Pfizer & Warner Lambert networks before it came into the Cadbury fold in 2003 as part of a global merger with Adams Confectionery.

Gum – Chewing –Segment - Bubbaloo Cadbury India has expanded its confectionary portfolio in 2007 by foraying into the Bubble gum category with the launch of “Bubbaloo Bubblegum”- a successful bubblegum brand from its international portfolio. Bubbaloo is an innovative soft bubblegum with a centre filled liquid. It is filled with a high level of a great tasting fruit flavoured liquid that floods your mouth instantly. Bubaloo is currently available in two yummy flavors- Strawberry and Mixed Fruit.