BUSINESS RESEARCH REPORT

ON

ANALYSIS OF CHOCOLATE INDUSTRY FROM PERSPECTIVE OF NEW

COMPANY LAUNCHING CHOCOLATE BAR

(DIVISION MFM/ SEM II)

BACTH 2014-2017
UNDER THE GUIDANCE OF
PROF. NISHANT PANWAR

SUBMITTED BY:-

GROUP NO: 12

DEVENDRA CHAUVAN (212)

ROHAN GURAV(227)
ROHIT MISTREY (242)
RAINDOLL PATIL (257)
YASH SHARMA (272)
BHAVIT VISARIA (287)

CERTIFICATE

This is to certify that the research project titled, ANALYSIS OF CHOCOLATE

INDUSTRY FROM PERSPECTIVE OF NEW COMPANY LAUNCHING
CHOCOLATE BAR is successfully completed by following students.

This project was undertaken in the second semester of Post Graduate Diploma in Finance
Management as the fulfillment of the course. It was completed under our guidance and
supervision.

Prof. Nishant Panwar

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

ACKNOWLEDGEMENT

We would like to express our gratitude towards faculty Prof. Nishant Panwar, who had
been very supportive as a guide to our efforts in making the project work a successful one.
we would also like to thank all our institute faculties and friends, who were helpful to us in
whatever little way they would.

CONTENT
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Executive Summary
Objective
India Chocolate Market Overview
Research methodology
Competitor analysis
Our products
Findings
Marketing strategy
Conclusion

Executive Summary
We are starting a business of manufacturing chocolates. Name of the company is Candy Chocolate. Our
target market is Whole of Mumbai. The customers to whom our products will be supplied are retailers,
wholesalers and traders Especially in Western Zones & Central Suburbs.

We would be targeting the consumers of all age groups. The products that we would offer are:
Candy Plain Chocolate
Candy Milk Chocolate
Candy Fruit N Nut Chocolate
The core competencies on which our company would be competing are taste and quality of our
chocolates. Our company would be a partnership firm.

Objective
The objective of this study is to make generalization of consumers buying behavior towards the purchase of
chocolates.
Analysis of Competitors in Chocolate Industry In India.
To determine the Entry Strategy.

General Company Description

Our company will be in the confectionary business. Our company will be involved in manufacturing of chocolates.

Vision of the company

Our vision is to be the leading manufacturer of chocolates all over India.

Mission of the company

We seek to produce high quality products at competitive price using modern technology to provide high satisfaction
to the consumers.

Objectives of the company

To manufacture and provide the customers with the quality products to the best interest of the customers.
To create Price competitive Products as part of the effect to increase the world access to high quality chocolates.
To ensure a hygiene & clean working environment as to continue to produce Safe & Tasty Products
To strive to Meet & Exceed Customer's Expectations so as to ensure a sustainable business relationship.
Target Market :
Upper class
Middle class
Lower middle class
All age groups

About Chocolate Industry

The chocolate market is estimated around 33,000 tons valued at approximately Rs. 870 CRORES. Bars of molded
chocolates like amul, milk chocolate, dairy milk, truffle, nestle premium, and nestle milky bar comprise the largest
segment, accounting for 37% of the total market in terms of volume. To push sales chocolate companies have been
targeting mainly adult audiences. Chocolates are being presented as snack food for the new target audiences. The
chocolate segment is characterized by high volumes, huge expenses on advertising, low margins, and price
sensitivity

Cadbury is the leading player in the chocolate market industry with the penetration of 70% market share. The
company's brands like Five Star, Gems, clairs, Perk, and Dairy Milk are leaders in their segments. Nestle & Amul
are the other major players in chocolate industry. Chocolate industry is growing at steady growth rate of 25%.
Over 70% of the consumption of chocolates takes place in the urban market. It is price sensitive market.
Until early 90's, Cadbury had a market share of over 80 %, but its party was spoiled when Nestle appeared on the
scene. The other one has introduced its international brands in the country (Kit Kat, Lions), and now commands
approximately 15% market share. The two companies operating in the segment are Gujarat Co-operative Milk
Marketing Federation (GCMMF) and Central Arecanut and Cocoa Manufactures and Processors Co-operation
(CAMPCO). Competition in the segment will soon get keener as overseas chocolate giants Hershey's and Mars
consolidate to grab a bite of the Indian chocolate pie.

Indian Chocolate Industrys Margin range between 10 and 20%, depending on the price point at which the product
is placed. The input costs in India are under check owing to the 24% decline in the prices of sugar.

Problem Statement

To understand the Market Potential of Confectionery industry in India to help establish a new confectionery
company

Research Objective

Consumer Buying Behavior & Perception towards Chocolates.

Chocolate consumption is gaining popularity in India due to increasing prosperity coupled with a shift in food
habits, pushing up the country's cocoa imports. Chocolate market in India is pegged at Rs 2,000 crore and is
growing at the rate of 18 - 20 per cent per annum. The global chocolate market is estimated around $80 billion. The
Indian chocolate market is seen growing at a compounded annual growth rate of 15-20%. The Indian chocolate
market is thought to be worth some R1,500 crore and has been hailed as offering great potential for Western
chocolate manufacturers as the market is still in its early stages. Over 70% of chocolate consumption takes place in
the urban areas. Chocolate consumption in the rural areas is negligible in India. Chocolate market is a highly
concentrated market, with Cadbury having 70 per cent and Nestle around 20 per cent. The two giants have been
instrumental in building up the chocolate market in India with huge investments in product development,
advertising and brand building. Modern trade constitutes about 10% of the overall chocolate category, or roughly
Rs 320 crore, according to Nielsen. Of this, brand Cadbury Dairy Milk has a share of 35%, while Bournville and
Silk together account for 18%

Research Methodology
In this study the problem pertains to both State of nature and relationship among the variable i.e.; what is general
behavior of consumer and then inferencing the relationship that exist among the different variables to test the extent
of brand loyalty and influence of one variable over the other from the data. As the study is related to the study of
consumer behavior toward chocolates thats why the appropriate research design used is Fundamental descriptive
with the use of both qualitative and quantitative design with static research approach. Formalized research design is
also taken into consideration in order to test the Hypothesis framed. In this cross sectional co-relational field study
data related to various independent variables & dependent variables was collected from the stratified sample of 100
individuals, including males and females of different age groups constituting the sample. All the respondents were
approached on the basis of simple random sampling in Office Premises and College Campus.

Core Competencies

The core competencies on which our company will compete are:

Taste
By consuming the Candy Chocolates flavor begins to fill your mouth the moment the chocolate begins to melt on
your tongue like butter and it tastes like pure chocolate rather than cocoa powder. At first there is so much pleasure
in tasting the chocolate, it may be difficult to focus on the specifics of flavor. First perception the consumer would
describe for the chocolate as chocolaty and Candy.

Quality
The raw ingredients are of finest quality and also care is taken of the production process; roasting and crushing the
cocoa beans and mixing the cocoa paste with sugar and other ingredients such as milk. Candy chocolates are high
quality chocolates as they are shiny brown, breaks cleanly and is smooth. Candy chocolates has the sufficient
quantities of cocoa butter and vegetable fat so that it does not become greasy or sticky at ambient room
temperature.

Ownership
Our company will be a partnership firm.

Competitor Analysis
COMPANY

FOUNDED IN

Nestle
Ferrero

1860s
1940s

Mars

1911

Amul
Hersheys

1945
1894

Perfetti Van
Melle
ITC
Parle

2001, when Perfetti and

Van melle merged
2002(confectionery
segment)
1929

Cadbury

1948 (Indian Market)

BRAND PORTFOLIO
(confectionery products)
Kit Kat, Smarties, Wonka
Rocher, Raffaello, Kinder, Tic Tac, Mon Cheri,
Nutella
Bounty, Galaxy, Mars, Snickers, Milky Way,
Wrigleys, M&Ms etc
Milk chocolate, Fruit & Nut chocolate
Hersheys milk chocolate, Kisses, Pot of gold,
Milk duds, Reeses, Icebreakers etc
Alpenliebe, Chlormint, Centerfresh, Happydent,
Mentos
Minto and Candyman
Melody, mango bite, poppins, kismi toffee,
mazelo, xhale, clair, golgappa, parle lites, orange
candy
Dairy Milk, Dairy Milk fruit N nut,
Dairy Milk Shots, Dairy Milk Roasted Almond,
Dairy Milk Silk

Our Products
Our company will be dealing in the manufacturing of 3 products. They are:
Milk Chocolate
Fruit & Nut Chocolate
Plain Chocolate
Ingredients of Milk Chocolate
Sugar, Full Cream Milk Powder, Vegetable Fat, Emulsifiers, Flavors, Whole Cows Milk, Cocoa Butter.
Recipe for milk chocolate
Take one cup of powdered sugar, one cup of milk powder.
One heaped table spoon of cocoa powder, about half table spoon of butter, and to this add the minimum quantity of
water required to make a thick batter.
Place this batter on a stove and bring to a boil on a low flame.
When the batter becomes thick (shown in the clip) stop the boiling, cool.
Pour into suitable molds, cut, cool in a fridge and it gets ready.
Ingredients of Fruit & Nut
Sugar, Full Cream Milk Powder, Raisins, Cocoa Butter, Cocoa Mass, Almonds, Vegetable Fat, Emulsifiers, Flavors.
Recipe for fruit & nut chocolate
First take whatever molds you like and grease it with butter. Set this aside for a moment.
Melt the chocolate either in double boiler method or in a microwave. Remove it and set aside.
Chop up all your nuts and dried fruits. Add it to the chocolate and mix well.
Take a spoonful of this and fill your prepared mold and put it in the deep freeze for 1 hour.
Unmold it and keep it in the fridge until serving.
Ingredients of Plain Chocolate
Sugar, Full Cream Milk Powder, Cocoa Butter, Cocoa Mass, Vegetable Fat, Emulsifiers, Flavors.
Recipe for plain chocolate
Combine cocoa and sugar and blend until all lumps of cocoa are gone. Add water and salt and mix well.
Cook over medium heat, bringing it to a boil.
Keep boiling until thick, stirring to keep from overflowing.
Remove from heat and let cool.
When cool, add vanilla.
Then put this in your milk, just like the store bought stuff.

Interpretation and Analysis of Findings.

In our study 48% (41) of respondent are males while 52% (45) of respondent were females.
In this 57% (49) respondent are student 15-21
33% respondent includes people of age group 22 - 29, while other includes those of age 30-59.

Q.1 How frequently do they purchase?

Out of 86 respondents 23 (26%) respondents buy chocolates daily while 35 (40%) of them buy it weekly compared
to 28 (34%)

Q.2 Important Attribute of the chocolate?

It can be inferred from study that taste is very important for buying chocolate 95%males & 93% females buy chocolates because of
taste. 54% males & 49% females are showing response to availability. Price is most important consideration for
29% males & 33% females. Packaging seems to impact purchase decision of 49% males & 58% females
moderately.

Q.3 Forms of chocolate impact?

32% of respondents are affected by advertising. 28 % respondents are affected by form. And 80% are affected by
brand image.

24
ADVT
FORM
69

23

BRAND

Q.4 how advertisements persuade consumers to purchase?

20% respondent persuades chocolate because of the emotion shown in the advertising.
43% respondent persuades chocolate for fun by watching advertising.
28% respondents persuade chocolate because of the knowledge shown of the product in the advertising.
9% persuade chocolate because of the music.

17
EMOTION
FUN

24

KNOWLEDGE
MUSIC
37

Q.5 which brand mostly preferred by consumers?

In the undertaken study it was found that Cadbury is the most favored brand with 70% of share as against 21%of Nestle, 4% & 5%
respectively for Amul and miscellaneous ones.

5 3
CADBURY

18

NESTLE
AMUL
OTHER

60

Q.6 From where consumers mostly buy?

The sample study results show that 84% (72) respondent buys from local 7% (6) and 9% (8) respondent who buys
from store, cafeteria and malls respectively.

8
local shop
store
malls
72

Q.7 Do you prefer your chocolate to be one of the following.

The respondent study results in 21%(18) prefer chewy, 29%(25) prefer crunchy, and 50%(43) prefer melts in mouth

Marketing Strategy for the Candy Chocolate Bar

Situation Analysis -- Marketing Environment Forces Impacting Product/Service

In the chocolate bar industry there are three marketing environment forces that will have an impact on
the chocolate bar, they are: price of cocoa for making chocolate, cost of transportation, and competition of
the market.

Price of Cocoa for making Chocolate: The price of the resources are going to make a difference in
the ability to make a product that can be priced in a competitive market environment, Taking into
account the economy and cost of resources, the pricing is an important part of the product and
appeal to the target markets. Pricing of resources may make lower grades of coca more attractive,
but the competition may be a key into how much one is willing to sacrifice in terms of product
quality or pricing

Cost of Transportation: Due to fuel prices rising, adjustments will have to be made to cover costs. What
most likely will be part of the pricing consideration would be making sure that the product arrives in good
condition and a timely manner because it will affect the product's reception as well as how it is perceived
by sellers and buyers.

Competition of the Market: Competition makes pricing and placement considerations very
important. Too much market saturation can mean prices have to be kept low or placement costs on

shelves may be too high. With there being so many different kinds and flavors of chocolate bars
already in the market, placement will be a key in attracting the eye of buyers.

Marketing Strategy: Target Market(s) & Positioning

When it comes to influencing buyer behavior with Candy bars there are really two things that may have an
influence on the buyer; personal choice and psychological. Face it, everyone has their favorite chocolate bar they
like to eat being Cadbury, Nestle, Amul, etc., so personal preference is a big thing for Candy bars. We are planning
to place the Candy bar on all the local shops/malls/super markets in a such way that it will catch the eye of the
consumer effectively.
For example, consumer walks in any shop/super market for buying anything, not even thinking about buying a
Candy bar, his eye catches that display of sugar satisfaction right there in plan site, so he reaches over and grab one
and place it on the counter to buy with his other stuff.
Many chocolate companies know of this buying habit and they either get the company to place a display right there
in front where the consumer can see it in plain site or even pay to have their display placed there in order to play on
the psychological aspects of the consumers mind in order to boost the sales of their product and therefore make a
profit.
By being consumers ourselves we as marketers know how the consumers think and we need to use this to the
advantage of the company we are working for to help in the promoting and sales of the company's products.

Product/Service Overview and Strategies to Consider

Candy bar being a new entrant in the market is not only targeting the young consumers for its product, but also
targeting the adult consumers as well. Unlike other chocolate companies that focus on the young, Candy bar can be
the one known for looking out for the health of others as well. It would be good for us to help spread the word
about the health benefits of chocolate, the package of this Candy bar can be simple with maybe a slogan such as;
"The Sweet Sensation for Your Heart". It can be promoted as being the chocolate bar for adults, while at the same
time getting the kids to want it because if you have kids, you know they always want what their parents have. By
doing this we will be helping in promoting good health while at the same time increasing sales. Placement of this
product should be with all the other chocolate bars as well as displays by registers and at the same price as other
chocolate bars.

Pricing Strategy
There are many factors that affect pricing strategy such as marketing and manufacturing cost, competitions
price, as well as consumer perception of the product, to name a few. When it comes to chocolate bars however, they
have always pretty much sold themselves for many years no matter what the price was. If you think about it,
chocolate bars were first sold for 5-10 Rs in the early 1900's and now sell for over a 100 Rs. in many areas.
Being that we are marketing a new healthy chocolate bar for adults, we will need to adopt a pricing strategy that
will allow us to penetrate the market in order to attract consumers to at least try the product at least one time. Once
the initial launch period is over and hopefully successful, we would then adopt a competitive pricing strategy that
will price our product in-line with other competitor's, to ensure that no customers are lost due to higher pricing.

Distribution Channels

Organizations and companies use distribution channels to bring their products to market and the
consumer. A distribution channel is a method of interdependent organizations which helps the marketer
delivers their products to the consumer. Because of it being part of the marketing mix, it can be direct or
indirect. Due to the expanded use of the internet, companies and organizations are able to sell their
products directly to the consumer leaving the middle man out thus reducing their cost. Indirect
distribution uses two or more level of channels before reaching the consumer. Some of these channels
include wholesalers, retailers, agents and brokers. Companies us the indirect distribution best suited for
their product in order to obtain the vest market share allowing them to focus on producing their goods.
There are various kinds of channel organizations:

Vertical Marketing System: In this structure producer, wholesalers, and retailers act as a unified
system and one channel member owns the other.

Horizontal marketing system: In this arrangement two or more companies join together to explore
more market opportunities.

Conventional Marketing System: In this structure there is one or more independent produce,
wholesaler and retailer.

Multichannel Marketing system: This is also called hybrid marketing channel. In this arrangement
a company selects two or more channels to reach two more customer segment base.

Integrated Marketing Communications

The integrated marketing communications will consist of high spending for advertising, consumer
production, and publicity in order to create a strong consumer demand for the Candy Chocolate Bar.

Promotion Mix Strategy

The promotion mix strategy for this Candy Chocolate Bar will be a push strategy. The product will be
displayed on all retail channels at the most eye catchy place. Retailers will get the maximum benefits by selling
our product. The promotion tools of TV, magazines, and internet marketing will be used. TV advertising will help
develop a premium positing while magazines will communicate the health benefits and direct marketing will help
in reaching the target market.
Message Strategy
The message strategy for this Candy chocolate bar will be the luxurious, tasty, and good for your health
sweet sensation. This general message will be communicated to the target market across all promotional tools.

There will be an integrated approach to promote this chocolate in order to reach as many consumers as
possible. At the time TV ads are broadcast, public relations will show how the new chocolate bar is not only
luxurious and tasty, but also good for the heart. At the same time internet advertising and direct marketing will also
be going on. It can be expected that a strong push will be created and retailers will market our product as tey will
get the maximum benfit from our sale compare to our competitors

Promotion Tool #1
Advertising will be the first marketing tool used. This promotional tool will be essential in communicating
the health benefit of this chocolate bar and to position it as a premium brand.
Promotion Tool #2
Direct marketing through the companys website will be the second marketing tool use. Advertising on the
internet will be integrated through website selling. By doing this communication can be sent to the target market
and allow customers the ease of booking orders from the website.

Conclusion
The marketing of the Candy Chocolate Bar will take place in the market as a positive attitude toward healthy
eating. This bar will be a premium product and pricing will support that image. Channels of distribution will be
high end and the integrated marketing communications will help achieve a high quality, tasty, good for you, healthy
chocolate bar image.
In study of 86 respondents it was found that 70% (60) respondents like Cadbury Brand, 21% (18) respondents like
Nestle Brand, 6% (5) of respondents like Amul Brand & 3% (3) respondents like Other Brand. So it can be
concluded that Cadbury is most famous brand among others.
It has shown that 57% (49) of respondents like chocolate flavor, 23% (20) likes coffee flavor & 20% (17)
respondents like nuts flavor. So it can be concluded that chocolate is the most profitable flavor & coffee second
most profitable.
India high cultural, economic, ethnic, linguistic, religious diversity
Differences between regions and income levels
Huge growth potential of the chocolate market, many international players are entering

Westernization of culture and lifestyles

Market is highly concentrated, very price-sensitive

References

http://store.chocolatceleste.com/cacao-beans-criollo-trinitario.html
http://www.xocoatl.org/variety.htm All about Chocolate Varieties
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http://www.fieldmuseum.org/chocolate/history.html
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