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Cadbury Marketing Plan
Cadbury Marketing Plan
Executive Summary
Cadbury Dairy Milk is a brand of chocolate bar made by the Cadbury plc unit of Kraft Foods and
sold in several countries around the world. It first went on sale in the United Kingdom in 1905.
The Cadbury dairy milk silk is launched by the Kraft foods Inc which is the largest confectionery,
food, and Beverage Corporation headquartered in the US. The Kraft foods Inc take over Cadbury
in 2010 which is the British confectionery company, the industry's second-largest globally. This
product is launched globally.
This presentation includes situation and category analysis of the chocolate industry and the
major companies at the forefront.
Chocolate Market in U.S’ sales is increasing every year. In 2007, total chocolate sales equaled
141.2, and in year after sales increased to 158.5 billion dollars. This substantial gain is expected
to repeat, and by year 2013, total sales are going to reach above 180 billion dollars. Without a
doubt, the chocolate industry can be expected to be successful for years to come, therefore,
Cadbury’s dairy milk is in a very attractive industry with a strong market potential.
Product/Brand Strategy and Supporting Marketing Programs for dairy milk will be explained in
detail. These include new product formulation, improved packaging design and extensive sales
promotion.
The chocolate industry is as popular as any in the world with the amount of people that
enjoy the delicious taste. There are many companies involved in the industry but none
are more powerful than the four which are known as the "Big Chocolate". Mars, Nestle,
Cadbury, and Hershey are the major companies at the forefront of the chocolate
industry.
One of the big four is Mars Incorporated which does not just dedicate their business to
chocolate. They devote their expertise over snack foods, pet care, main meal food,
drinks, electronics, and information technology. It is amazing they can compete at the
highest level in all of these categories. Thanks to the five principles that shape the
company they are able to sustain excellence in the different areas while not losing an
edge to their competitors. The five principles are quality, responsibility, mutuality,
efficiency, and freedom. By following these principles, Mars Inc. is able to compete in
the chocolate industry without being solely devoted to the brand.
The Nestle Company has been around since Henri Nestle (a Swiss pharmacist)
developed baby food for infants in the 1860s that were unable to breastfeed. Its
headquarters are in Vevey, Switzerland and is the world's biggest food and beverage
company. Nestle expanded their products in the 1920s to chocolate and quickly saw
immediate rewards with large profits. World War II damaged the company's profits as it
dropped from $20 million in 1938 to $6 million in 1939. Although, the war allowed the
company to introduce a popular beverage into the market as the armies began
obsessing over the Nescafe product. Since then, Nestle has made major acquisitions to
expand their company as the trade barriers crumbled and world markets developed into
more or less integrated areas. The most important acquisition occurred in 1996
obtaining Carnation (an American food giant). Nestle also follows a series of principles
promoting fairness, honesty, and a general concern for people. They are very concerned
about keeping the shareholders happy and delivering a high value product.
The Hershey Company is the most well known in the United States with their
headquarters in Hershey, Pennsylvania. It is a leading snack food company and the
largest North American manufacturer of quality chocolate and non-chocolate
confectionery products, with revenues of over $4 billion and more than 13,000
employees worldwide. Milton S. Hershey started the company in 1893 and became the
first American company capable of processing milk chocolate. The Hershey Company is
committed to diversity in everything they do ranging from ideas to the workforce. They
are not satisfied with being single minded and only good at one thing. Diversity is the
key to the Hershey Company.
Category Analysis
Assessment
Market
Factors Analysis Attractiveness
(+/-)
Aggregate Market
Category size With over $150 billion of retail sales
globally in 2008, confectionery is a large +
market. It is in fact the fourth largest
segment in packaged foods – a global
market worth an estimated $1,800 billion.
Category growth The chocolate market has grown steadily
over the past five years at a rate of 5%
(compound annual growth rate). Growth in
developed markets, which represent +
around 60% of the total by value, has been
at around 3% p.a. whereas growth in
emerging markets, the remaining 40%, has
been strong at around 10% p.a.
Product Life Cycle The chocolate market is in its Maturity
Stage with continuous revenue growth
and consumption levels have been largely
static in recent years. +
But despite its maturity, overall retail sales
of confectionery are forecast to grow by
21% in value at current prices between
1999 and 2004. Sugar confectionery is
expected to grow twice as fast as
chocolate, albeit from a smaller base.
Seasonality Trade research shows that almost 40% of
chocolate sales takes place in the first
quarter of the year, which itself can be
divided into Easter and Spring occasions +
such as Valentine's and Mother's Days.
Category
Threat of new Chocolate is mainly a regional business
entrants/exits where consumers seek a particular taste in
each market. This brings about
fragmentation in the market as well as +
complexities in production.
Objectives
Strategies
Marketing Mix
Place Retail Outlets and They adopted Hershey distributes CDM are sold
Wholesalers distributive its products directly to
channel and so it through a variety of whole sellers
was available distribution and retailers
only on stores networks. Distribution
and super Network
markets. Retail outlets like: encompasses
large grocery 2100
chains, large Distributions
drugstore chains and 450,000
convenience ores, retailers.
wholesalers, small
retail outlets, and
brokers
Promotion In spite of its market The sales strategy The company has The media mix
share setbacks, which Nestle concentrated on for the
Mars, Incorporated adopted is producing a wide campaign
was still a serious Availability & variety of chocolates comprises TV,
to suit the customers'
marketing force Visibility. To outdoor,
taste. Hershey's
around the world. increase sales Internet and
strategy
At the beginning of and gain profit encompasses radio.
the millennium, the the company has extension of its Use of
company had to provide proper product line that emotional
facilities in more supply of product provides the appeals in
than 60 countries in the market. company a distinct advertising.
and sold products in advantage over its
more than 150. It Use of extensive competitors like
was spending $850 promotional tools Mars and Nestle. In
million a year addition, Hershey's
focus on acquisitions
advertising brands
of well-known
such as M & M's
brands, discontinuing
candies, Snickers weak product lines,
candy bars, Uncle apart from
Ben's rice, and appropriate
Pedigree dog food. marketing of its
products
Differential Competitor Analysis Matrix
Customer Analysis
What do they For snacks and for Chocolates are A lot of their Purchase as a gift.
buy and how do dessert what they love. As chocolate As a snack & as
they use it? a snacks. products are in dessert.
Sometimes can be demand actually.
gift. This can be used
as snacks, or and
enjoyment
Where do they At the malls, Preferably at the Retail outlets like Leading
buy? wherein there are leading grocery chains supermarkets and
a lot of variance to supermarket, such large ‘big chain’ stores
choose, they may where a lot of drugstore chains and aimed at as
be found in an eye people can choose convenience many promotions
leveled shelves to from a lot of their stores, as possible using
a great extent so variance available. wholesalers, big boxes of
that customers Some people small retail chocolates stored
won’t miss it. around selling outlets, and near the checkout
small amount of brokers who sell areas to attract
our chocolates, products to impulse
grocery stores. purchasing.
Secondly, they have
also used the
concept of eye level
shelves to a great
extent so that the
consumers don’t
miss it.
When do they Impulse Impulse When grocery impulse
buy? Season shopping season
How do they Fallowed quality, Influenced by The choice of influenced by
choose? tradition of peers, a word-of- high chocolate flavor/taste
favorites. mouth. content/standard followed by quality,
quality level brand and image
Why they prefer Quality and the The taste, the The availability of It is the home of
a product image of this quality, and the the product, in hugely popular
product. price of the good stores. brands.
product.
How they Feedback Actively Accurately and Brand Loyalty
respond to participating in straight to the
marketing any event that point feedbacks
programs would help them
to gain more
knowledge for the
products
Will they buy it Whenever the Any time, because If the parents are Because of its
again? product is it is cheaper than off to availability. They
available. others. Always supermarket and can actually
available. stores purchase our
product any time
they want.
Long-term value Giving them Call to action Being visible Offering the
of customers souvenirs, promos movement. Giving through internet customers their
hotlines website. hotline number for
any comments,
suggestions, etc,
Segmentation Sweet lovers Young Middle aged, Teens, loves sweet
professionals, teens
teens,
Planning Assumptions
Market Potential
Chocolate Market in U.S’ sales is increasing every year. In 2007, total chocolate sales
equaled 141.2, and in year after sales increased to 158.5 billion dollars. This substantial
gain is expected to repeat, and by year 2013, total sales are going to reach above 180
billion dollars. Without a doubt, the chocolate industry can be expected to be successful
for years to come.
With 2006 sales estimated at close to $16 billion through all channels, chocolate is
forecast to grow to $18 billion by 2011, according to the U.S. Market for Chocolate, a
fully updated Packaged Facts report. Strong consumer interest in the reported health
benefits of dark chocolate and a general trend towards product premiumization
(including organic and fair trade products) are offsetting steady declines in other
categories, such as sugar-free and novelty products. For example, the market share for
premium chocolate grew from 13% of the total market in 2002 to nearly 17% in 2006.
Cadbury beat sales forecasts and raised targets in a bumper third-quarter trading
report, pushing up its shares and pressuring suitor Kraft to come up with a bigger bid to
win its takeover battle.
Top-down approach
Uses Quantitative Technique of Forecasting
3-year Moving Average Method is implemented
Year divided into 12 periods
Seasonality also taken into account
Major Emphasis on last year’s data
Statistical Tools being used
SAP integration
Promotional Offers according to Sales Forecast
Other assumptions
It is assumed that Wholesale chocolates and retail store sales should stay strong despite
increasing new players in the market.
III. OBJECTIVES
Corporate objectives:
Ensure profitable growth in the market.
Grow shareholder value over the long term.
Marketing objectives:
Increase market share of Cadbury using marketing strategies offering the market an
assortment of innovative confectionery products.
Increase sales profit of Cadbury.
Sustain market share over the year through product innovations in product
development, packaging.
Competitor targets - Cadbury's target competitors are Hershey, Nestle and Ferrero.
What we will do is to sell Cadbury at affordable prices and put it on a convenient
position, develop a range of new products for every need. (Occasional gift, snacks, after
dinner dessert)
C. I. Market penetration
Use market penetration as a strategy to achieve growth through the use of existing
products of Cadbury in the current market. Come up with promotions that would
enhance customer loyalty and product awareness.
C. III. Packaging
Improve packaging design by adding graphics or caricatures to the original label &
making a re-sealable pack and reducing the cost of packaging by using cheaper
resources and materials that are safe for the environment. Package should protect the
product from deteriorating, efficient and more importantly it should attract the
customers.
Core strategy
Value proposition
Cadbury perceived as a brand that is meant for everybody disregarding age/class.
Affordable and has contemporary taste, with various selections to choose from.
Product positioning
Cadbury positioned as an all time favorite chocolate. An irresistible snack, after
dinner dessert anything that can be shared and offered to loved ones.
To objective of this campaign is to promote the new look of dairy milk, Cadbury should implement
comprehensive campaign. This involved a highly coordinated set of promotional activities across
various communications channel each activity bearing the same message which is “the look of
happiness”. This approach ensures that consumers receive a clear and consistent message about
Cadbury.
The look of happiness campaign includes advertisements showing the new packaging of
Cadbury, free samples and contests.
B. Advertising
Creative Execution
C. Promotion
Objectives
Strategies
D. Sales
In order to maintain the sales of Cadbury, sales promotion should be implemented to generate
growth
Sales Promotion Execution
Tactics
Price cut off, or no increase in prices but products’ weight would be reduced.
G.Channels
We recommend the use of small vending machines exclusively for Cadbury products
that will be placed in different public areas such as: school canteens, airports, hospital,
malls, etc.
Consumers are having a difficulty to capture and classify that’s why the strong relationship to
the consumer is very important. Cadbury also use sites like Facebook, Twitter, Multiply and
Friendster to get closer with their customers and collect feedback.
We only recommend Cadbury to play more gimmicks with their existing online fan pages.
H. Website
Cadbury has available website for consumer's here in the Philippines consumers can freely
navigate in their website and get information about the products.
http://www.kraftfoodscompany.com
http://www.cadbury.com.ph
The existing flash websites of Cadbury are already functional (because of its own search engines
and extensive information available) and is tremendously attractive (because of the heavy use of
graphics and animations), therefore, no more improvements needed.
I. Marketing research
Market research determined the knowledge, attitude and opinions of consumers in our country.
We recommend Cadbury to continue investing in consumer research that helps build knowledge
around health concerns, including obesity. And to help improve understanding of concerns,
research within both inside and outside the business will be applied.
J. Partnerships/joint ventures
By March 2001 - Cadbury Confectionery Phils. Partnered with Mc Kenzie Distribution, thereby
providing Cadbury with much wider distribution cove in the Philippines.
May 2003 – Adams Philippines, a well known Candy Manufacturing Company merged with
Cadbury.
Financial Documents
ADVERTISEMENT:
Television
30 seconds airing during
noontime shows(6months) 8,635,500
Tarpaulin
100 stores in metro manila
(2x3 sq ft--x Php 25 x 100) 14000
Candy 400,000
Cosmopolitan 500,000
Seventeen 430,000
Total: 26,174,500
FORECASTED BUDGET
Advertising 26,174,500
Sales Promotions 1,850,000
Events and Sponsorship 1,450,000
In Millions of GBP (except for per share items) 52 weeks ending 2009-12-31
Revenue 5,975.00
Other Revenue, Total -
Total Revenue 5,975.00
Cost of Revenue, Total 3,210.00
Gross Profit 2,765.00
Selling/General/Admin. Expenses, Total 2,001.00
Research & Development -
Depreciation/Amortization 4.00
Interest Expense(Income) - Net Operating -
Unusual Expense (Income) 256.00
Other Operating Expenses, Total -
Total Operating Expense 5,468.00
Operating Income 507.00
Interest Income(Expense), Net Non-Operating -
Gain (Loss) on Sale of Assets -
Other, Net -21.00
Income Before Tax 378.00
Income After Tax 275.00
Minority Interest -1.00
Equity In Affiliates -
Net Income Before Extra. Items 274.00
Accounting Change -
Discontinued Operations -
Extraordinary Item -
Net Income 509.00
Preferred Dividends -
Income Available to Common Excl. Extra Items 274.00
Income Available to Common Incl. Extra Items 509.00
Basic Weighted Average Shares -
Basic EPS Excluding Extraordinary Items -
Basic EPS Including Extraordinary Items -
Dilution Adjustment -
Diluted Weighted Average Shares 1,364.00
Diluted EPS Excluding Extraordinary Items 0.20
Diluted EPS Including Extraordinary Items -
Dividends per Share - Common Stock Primary Issue 0.16
Gross Dividends - Common Stock -
Net Income after Stock Based Comp. Expense -
Basic EPS after Stock Based Comp. Expense -
Diluted EPS after Stock Based Comp. Expense -
Depreciation, Supplemental -
Total Special Items -
Normalized Income Before Taxes -
Effect of Special Items on Income Taxes -
Income Taxes Ex. Impact of Special Items -
Normalized Income After Taxes -
Normalized Income Avail to Common -
Basic Normalized EPS -
Diluted Normalized EPS 0.34
Marketing Metrics
Secondary data:
Internal
Sales record
Stock record
Accounting record
Distribution date
Sales person‘s opinion
External
Government statistics
Specialist business organizations
Customer database
Primary data
Face to face
Observation
Experiment
Research
Contingency Plan
If we receive negative feedback from our new developed product, we could make it
more affordable or improve flavor.
If new developed products will not be successful globally, we will first focus on
positioning one country at a time.
If we receive negative feedback from our market with extensive health concerns, we
will make a strategy that will promote wellness.