In 2008, Cadbury plc (formerly Cadbury-Schweppes plc) split from its Americas Beverages manufacturing business (Peston, 2008). It is a prominent worldwide producer and distributor of confectionery. Cadbury India Ltd. reports that the company operates in over 60 countries, collaborates with more than 35,000 suppliers, and has around 50,000 employees.
CEO Todd Stitzer states that Cadbury’s vision statement is detailed in its Vision In Action (VIA) plan, provided in Appendix A. This plan delineates the company’s objectives for the subsequent 4 years, encompassing achieving exceptional shareholder returns and attaining the status of the largest and finest confectionery enterprise globally. Cadbury presently holds the position as the industry’s largest corporation and is dedicated to establishing itself as unequivocally superior. The organization’s plan hinges on its performance scorecard, priorities, sustainability commitments, and culture (Cadbury plc, 2008).
Cadbury aims to provide its shareholders with strong financial returns by assessing its growth, efficiency, capabilities, and sustainability from 2008 to 2011 (Cadbury plc, 2008). Additionally, Cadbury’s mission statement encompasses its main objective in business and dedication to customers. The phrase “Working together to create brands people love” illustrates our ambition and highlights our collaborative efforts in transforming products into beloved brands.
In summary, Cadbury emphasizes the spread of happiness (Cadbury plc, 2008). Additionally, quality is a key focus for Cadbury, as evident in its mission statement and the slogan “Cadbury means quality” (Superbrands, 2008). Lastly, Cadbury strives to ensure that there is “A Cadbury in every pocket” (Karvy Research, n. d.).
According to Karvy Research (n. d.), Cadbury India Ltd intends to draw in existing customers and spur on spontaneous purchases through the use of successful marketing strategies. As a subsidiary of a well-known confectionery brand, Cadbury India Ltd shares its parent company’s mission and vision statements. However, when operating in the Indian market, it employs distinctive business tactics and approaches.
The report focuses on the activities of Cadbury India Ltd within the Indian market, which is acknowledged as one of the swiftest expanding confectioneries markets worldwide (Financial Express, 2008). As a subsidiary of Cadbury plc, Cadbury India Ltd offers three confectionery product varieties: chocolate, candy, and chewing gum (Cadbury India Ltd., 2008). Nevertheless, within the Indian market, its range of products is divided into segments such as chocolate confectionery, milk food drinks, candy, and gums (Cadbury India Ltd.).
, 2008). This report will explore two products offered by Cadbury India to the Indian market: Cadbury Dairy Milk (chocolate category) and Cadbury Bournvita (milk drinks category). (a) Cadbury Dairy Milk (i) Pricing: Cadbury India controls 70% of the confectionery market in India, with 30% credited to the success of its Dairy Milk product, which sells approximately 1 million bars per day (Cadbury Dairy Milk, 2008; Marketing Communications, 2008). Cadbury Dairy Milk bars are Cadbury India’s top-selling product in India’s 4000 tonne, Rs.
6. The chocolate market, valued at 50 billion (around 1.6 billion CAD) (Gupta, 2003), has designated its flagship brand as Cadbury India Ltd. (Cadbury India Ltd., 2008; Chatterjee, 2000).
The success of Cadbury Dairy Milk in India can be attributed to various factors. One reason is its connection to the country’s history, as it was first introduced in 1948, just a year after India gained independence from the British Empire (Cadbury Dairy Milk, 2008). Its affordable pricing also plays a significant role in its popularity among the Indian masses, as pointed out by Chatterjee (2006). Even the smallest Dairy Milk bar, weighing 13 grams, is priced at Rs. 5 (approximately 0.13 CAD), making it an accessible treat for many middle-class Indians. However, for those who rely on purchasing items below Rs. 3 (Rs.), it may not be considered affordable.
Cadbury dairy Milk bar is widely known for its high quality and affordable pure milk chocolate, making it a popular choice among Indian customers (Cadbury Dairy Milk, 2008). The company strategically targets various consumer segments based on age, income, technological knowledge, and health-consciousness. In the 1990’s, Cadbury India Ltd launched advertising campaigns promoting the chocolate as a treat for both adults and children, appealing to “the kid in everyone” (Cadbury Dairy Milk, 2008).
In order to target potential lower-income customers in the villages of India, Cadbury Dairy Milk implemented a marketing campaign called the “Real taste of life” campaign (Cadbury Dairy Milk, 2008). This campaign utilized opinion leaders from Bollywood and conducted extensive advertising across various media platforms such as newspapers, television, magazines, and billboards throughout the country (Cadbury Dairy Milk, 2008; Marketing Communications, 2008). Through these efforts, Cadbury was able to attract the attention of the entire nation and solidify its dominance in the Indian market (Cadbury Dairy Milk, 2008).
Currently, Cadbury is also exploring the market of young internet users by organizing contests and competitions online. One notable example is the “Pappu Pass Ho Gaya” campaign, a joint venture with Reliance India Mobile (a subsidiary of India’s largest network service provider). This campaign allowed students across the country to check their examination results online and celebrate their success with Cadbury’s Dairy Milk chocolate (Cadbury Dairy Milk, 2008).
Additionally, Cadbury India continuously introduces new variations of its Dairy Milk brand to cater to the preferences of both adult and children consumers, ensuring their satisfaction and ongoing interest.
Variations of Cadbury Dairy Milk include the Fruit & Nut and Crackle & Roast Almond variations, designed for snacking. Additionally, Cadbury Dairy Milk offers desserts to satisfy the craving for something sweet after meals. The Cadbury Bournville Dark Chocolate bar, similar to the Dairy Milk bar, appeals to health-conscious consumers who desire the taste of dark chocolate and its health benefits. Moreover, Cadbury Dairy Milk Wowie features Disney characters on each chocolate square, specifically targeting children. Cadbury’s market segmentation effectively addresses three major market segments: children, adults, and technologically-savvy consumers. However, it neglects income-based market segments.
Although Dairy Milk is seen as a mid-priced item by upper and middle-income consumers, lower income consumers who purchase chocolate from the less-than-3-rupee range cannot afford to buy Cadbury Dairy Milk on a regular basis. Cadbury must focus on addressing the needs of this market segment in order to increase sales of Dairy Milk. Despite the belief that Cadbury Dairy Milk is a relatively expensive luxury item, Indian consumers appear to be satisfied with it due to its marketing as an occasional indulgence.
Cadbury Dairy Milk has become a benchmark for quality among Indians and is widely regarded as the gold standard for chocolate. The pure taste of Cadbury Dairy Milk sets the standard for Indian consumers when it comes to chocolate flavor (Cadbury India Ltd. 2008). In fact, a survey conducted in 2005 revealed that Cadbury Dairy Milk was voted as one of India’s most trusted brands (Cadbury Dairy Milk, 2008). While facing competition primarily from Amul, India’s dairy company, and Nestle India, Nestle’s subsidiary in India, Cadbury India Ltd maintains its position in the market through restrained marketing strategies.
According to Appendix B, Cadbury India dominates about 70% (Cadbury India Ltd., 2008) of the chocolate market, with Amul holding a mere 2% (Dobhal, n. d.) and Nestle India accounting for approximately 27% (Nestle to expand, 2008).
The Cadbury India Ltd Analysts Meet in 1999 emphasized that Cadbury’s key advantage is its skill in promoting Dairy Milk products by adapting the product’s theme and functionality to meet current demands. This has given Cadbury a greater hold on the market compared to its competitors. Nevertheless, Cadbury’s triumph can also be attributed to many Indians perceiving their chocolates as luxury items rather than everyday household goods. This contradicts Cadbury’s assertion that it maintains leadership through a “superior marketing mix,” as stated by Karvy Research.
). Cadbury India may have misinterpreted the popularity of Dairy Milk as a signal that it has been embraced by the Indian public as a common household item. However, the strong economy and the increasing wealth of the growing middle class in India (Basu, 2004) have resulted in a culture that places importance on status symbols. Consequently, the regular consumption of luxury chocolates like Cadbury Dairy Milk is seen as trendy (Kochhar, 2007). Despite Amul’s longer presence in India, its chocolates are considered local and less upscale, thus justifying a lower price (Chansarkar et al.
In 2006, it was suggested that Cadbury India should maintain its current marketing strategy but gradually promote Dairy Milk as a household product. The aim was to encourage consumers to spend their increasing disposable incomes on it and boost its sales. This strategy would help Cadbury India compete with Amul, which had transitioned from being a community welfare program in Gujarat to a national enterprise over the years. Amul’s growth coincided with India’s journey towards independence and played a significant role in shaping India’s identity. Therefore, Amul’s marketing strategy gained credibility through this association with national pride. Although Cadbury cannot replicate the same level of national endorsement, it can try to establish its Indian identity by highlighting its long-standing presence in the country.
Amul’s long-standing advertising campaign, combined with its reputation for credibility, safety, and consumer satisfaction, helps to boost brand awareness. This was particularly evident when Cadbury India faced controversy over its Chinese-made products being contaminated with worms and melamine (Sinn and Karimi, 2008). This incident shattered people’s confidence in Cadbury’s “Gold Standard” (Cadbury Dairy Milk, 2008) as a safe and reliable product. To regain consumer trust and position its products as affordable and safe treats once again, Cadbury India should prioritize being more responsive to consumer demands.
Ensuring customer satisfaction is crucial, even if it means incurring losses for a few months, as it will ultimately help the company recover from the negative impact on its reputation caused by negative publicity. The introduction of an additional layer of packaging in the production of Dairy Milk chocolate is a positive initial step towards regaining public trust (Vivek, 2004). Amul’s innovative ideas, such as the development of diabetic-friendly chocolate and chocolates tailored to different ethnic flavors (Janve and Dogra, 2007), as well as special chocolates for festive seasons, enable them to quickly attract consumers away from Cadbury, posing a threat to their business.
The Indian Express (1999) reported that Cadbury India experiences a substantial annual market growth rate of 18%. In contrast, Nestle India lacks the same level of brand recognition and market saturation as Cadbury India. Capitalizing on its established reputation, Cadbury extensively promotes its Cadbury Dairy Milk throughout the country. On the other hand, Nestle still needs to establish itself in the Indian market. One potential strategy for Nestle is to follow Amul’s example by developing and marketing products that cater to specific ethnic needs, such as chocolates for Diwali and Rakshabandan (Kochhar, 2007). Currently, Cadbury India has yet to explore these concepts.
Cadbury India needs to address the threat posed by Nestle and Amul in the production of chocolates specifically for festive seasons in India. The strategy Cadbury should adopt is to position its chocolates as ones designed exclusively for the Indian market. This will help build a strong connection with consumers and drive sales. (a) Cadbury Bournvita was introduced in the Indian market in 1948, shortly after the incorporation of Cadbury India Ltd (then called Cadbury-Fry). Thanks to its early entry into the market and effective marketing and promotional tactics, Cadbury Bournvita currently holds a 17% market share in the malt-based food drink segment (Cadbury Bournvita, 2008).
According to BeverageDaily (2004), India has a 22% share of global retail sales for malt-food milk drinks. However, unlike Cadbury Dairy Milk, Cadbury Bournvita does not have a significant market share in India’s malt-based food drinks market. Bournvita is mainly sold in 500 gram bottles, priced at around Rs. 95 (2. 35 CAD) per bottle, although other sizes are also available. This pricing is considered high, as mentioned by Hawa (2002).
However, Bournvita’s popularity remains high due to its long history with India and its use as a staple source of nourishment for Indian children by their mothers (Hawa, 2002). In terms of consumer segments and advertising strategies, Cadbury markets its Bournvita product to various market segments, including children, elderly individuals, pregnant women, and athletes (Hawa, 2002; Cadbury Bournvita, 2008). Despite changes in packaging, product design, promotion, and distribution over the years, Cadbury Bournvita has been able to maintain a 17% market share in India’s malt-food market, which is equivalent to 220,000 tonnes (Cadbury Bournvita, 2008; BeverageDaily, 2004).
Throughout its history, Cadbury has strategically marketed Bournvita to adapt to changing consumer perceptions and preferences. Its focus on the “Good Upbringing, Goodness that grows with you” campaign aimed to establish Bournvita as a vital health drink for kids (Cadbury Bournvita, 2008). This campaign primarily utilized radio, a popular medium of communication among Indians at the time (Ranjan, 2007). Following this success, Cadbury launched the immensely popular “Brought up right, Bournvita bright” television, newspaper, and magazine campaign. This multi-channel approach aimed to reach a broader audience of children and highlight the connection between intelligence and Bournvita, a concept that resonated with many youngsters (Cadbury Bournvita, 2008).
Cadbury Bournvita aimed to solidify their customer base and establish brand loyalty in the 1990s by making a promise of complete physical and mental development for their consumers (Cadbury Bournvita, 2008). Their subsequent television marketing campaign successfully secured their position in the Indian market. Recently, Cadbury Bournvita launched a new marketing campaign specifically targeting consumers’ uncertainties about the challenges of the new millennium. The campaign, titled “Real Achievers who have grown up on Bournvita,” emphasized the importance of health, vitality, and nutrition in preparing consumers to face these challenges (Cadbury Bournvita, 2008). This campaign was featured on television and in newspapers as part of the recruitment process for contestants (Kapoor, 2007).
The release of new versions of the original Bournvita, such as Bournvita 5-Star, incorporating the flavors of both the original chocolate Bournvita and Cadbury 5-Star, has helped maintain consumer interest. This new product is targeted towards children who desire both nutrition and taste. In addition to this, Cadbury Bournvita has sponsored the Indian Olympic team at the Moscow Olympics in 1980, appealing to an athletic market segment. Recently, Cadbury Bournvita has further promoted itself as a sports drink for athletes by supporting sports competitions and sponsoring athletes nationwide.
Furthermore, one of the most well-known examples of clever marketing from Cadbury Bournvita in India is its sponsorship of the Bournvita Quiz Contest. This quiz show has been on air since 1972 and is considered the longest running quiz show in India. The contest has expanded to 7 countries, involving over 4000 schools and more than 1 million students. It has become one of the most popular high school contests and one of Cadbury’s most successful marketing endeavors to date (Cadbury Bournvita, 2008).
Despite Cadbury Bournvita’s long history of catering to consumers in the Indian market, there have been allegations of a decline in the quality and taste of the Bournvita brand (Hawa, 2002). As a result, many customers believe that Bournvita lacks the appeal of other brands like Horlicks (see Appendix C). Consequently, the market is gradually shifting towards white malt-based food drinks such as Horlicks (Karvy Research, n.d.).
According to the Cadbury India Ltd Analysts Meet in 1999, the malt-based food drinks market in India is categorized into brown drinks and white drinks (Cadbury India Ltd Analysts Meet, 1999; Karvy Research, n. d.).
According to Karvy Research, white drinks are popular in the southern and eastern parts of the country, while brown drinks are popular in the northern and western parts of the country. Cadbury Bournvita faces competition primarily from GlaxoSmithKline’s Horlicks and Heinz Food’s Complan.
According to Appendix C, Horlicks holds the largest market share at 44% (Chatterjee, 2006), followed by Cadbury Bournvita with a market share of 17% (Chatterjee, 2006) and Complan with 13% market share (Samajdar, 2006). The malt-drinks market is divided into white and brown drinks. Horlicks dominates the white drinks category while Bournvita leads the brown drinks category (Karvy Research, n. d.).
According to Karvy Research, there has been a recent shift in consumer preference towards white drinks as opposed to brown drinks. As a result, Horlicks now has a larger market share than Bournvita (Karvy Research, n. d.).
When it comes to competing against Horlicks, Cadbury Bournvita’s current marketing strategy is insufficient. It can be argued that Horlicks’ longer presence in the Indian market has resulted in greater consumer familiarity compared to Bournvita (Horlicks, 2008). However, Horlicks’ extensive marketing campaigns have also likely contributed to its larger market share. Horlicks has consistently marketed itself as a “Great Family Nourisher,” offering products like Mother’s Horlicks tailored for various family members (Horlicks, 2008). This approach makes it more appealing to a broader segment of the market as it caters to different family members, unlike Bournvita’s primarily child-focused strategy. Consequently, even elderly and recovering individuals can consume Horlicks without feeling like they are consuming a product meant only for children.
Even though the Bournvita Quiz Contest, which is considered Bournvita’s longest-running marketing campaign, primarily attracts more child consumers to its product (Radakrishnan, 2002), it cannot rival Horlicks’ broader appeal. The solution lies in Cadbury India marketing Bournvita as a beverage for adults as well. This way, it will be able to effectively compete with Horlicks. Meanwhile, Complan’s market share of 13% (Samajdar, 2006) is lower than Bournvita’s.
Both Complan and Bournvita are aimed at children, but they have taken different marketing approaches. Complan presents itself as a “perfect nutritional supplement,” emphasizing the need for extra nourishment. On the other hand, Bournvita positions itself as a healthy drink for children. However, this strategy may backfire for Complan, as some families may feel that their child already receives sufficient nourishment and does not need additional supplementation.
Although Cadbury Bournvita currently has a larger market share, it needs to continue marketing itself as a child-friendly drink rather than a nutritional supplement to maintain its superiority. Delivering Cadbury products to customers in India’s 300 billion USD retail market, which is growing at a rate of 30% per annum (Rai, 2006), is a lucrative opportunity. With a population where half a billion people are under 25 and disposable incomes are rising, selling treats like Cadbury Dairy Milk bars and Cadbury Bournvita powder can lead to significant profits. However, the identification of proper distribution channels is crucial for successfully selling these products to customers.
The Indian retail sector mainly consists of 97% “family-run, street corner stores” (Rai, 2006), while the remaining 3% comprises malls and shopping complexes. As a result, Cadbury India Ltd. operates factories in different geographical locations in India and distributes its products through a network of over 300,000 retailers across the country (Cadbury India Ltd Analysts Meet, 1999). These retailers receive support from 1900 distributor locations and 27 depots (Cadbury India Ltd Analysts Meet, 1999).
Furthermore, Cadbury India Ltd supplies nearly 3100 out of a total of 3600 locations that sell Cadbury products at least three times a month through its distributors (Cadbury India Ltd Analysts Meet, 1999). These distribution networks contribute to Cadbury India’s competitive advantage in India’s large consumer market. The SWOT analysis of Cadbury India Ltd shows its objective of ensuring the presence of a Cadbury product in every pocket (Karvy Research, n.
The company’s success in promoting Cadbury Dairy Milk as a household good and Bournvita as a family-friendly drink is crucial for sustainable growth. Without this marketing strategy, the success of Cadbury Dairy Milk will only be temporary, and Bournvita will struggle to compete with white malted drinks like Horlicks, as stated in the Cadbury India Ltd Analysts Meet in 1999.
According to Appendix D, if Cadbury Dairy Milk can break the perception of being a luxury item among consumers, it can tap into inelastic demand as a household product. This will generate a constant stream of revenue and solidify the Dairy Milk brand as a cash cow product.
In order to achieve this objective, it is necessary to build on the good reputation and trust that Cadbury India Ltd has earned. Additionally, it is important to listen to the needs of its consumers. Bournvita, on the other hand, needs extensive marketing efforts to counteract the negative impact of Horlicks’ family-friendly marketing mix on its market share. Furthermore, Cadbury India Ltd faces a significant threat from Amul’s innovative marketing strategy. With its clever marketing strategies, long history of serving India, and ability to create and promote products specifically tailored for Indian consumers, Amul’s yearly growth rate of 18% may slowly erode Cadbury’s success (Indian Express, 1999).
Conclusion: Cadbury India Ltd has a strong position in India. To stay ahead in such a large market, Cadbury must understand its customers’ needs and maintain their trust. Additionally, it should analyze its competitors’ marketing strategies to identify their strengths and weaknesses and use them to its advantage. Moreover, Cadbury should recognize the value of a good reputation and prioritize consumer satisfaction.
One key aspect of maintaining Cadbury’s brand reputation is ensuring the safety of its products. It is crucial to prevent incidents like the melamine and worms controversies from occurring again. If consumer confidence in Cadbury’s brand is damaged, it will be associated with tainted food products. This will harm sales and undo 70 years of hard work, allowing more competent local companies like Amul to learn from Cadbury’s mistakes and seize its market share.
