Dokumen - Tips - Cadbury Vs Nestle

Marketing Project
V/S
Submitted to:
Dr.Kartik Dave
IBM – Innovative Business Minds, PGDM (RM), BIMTECH 1

Acknowledgement
An Old Chinese proverb says:

When eating your bamboo sprouts, remember the men who planted them.
Now that my sprouts are ready to eat, it is time for me to express my deepest
gratitude to all those who have made this possible.
We wish to express our sincere gratitude to Dr. Kartik Dave who guided us
and helped us from time to time to successfully conduct this research. We
think her direction was the best thing that could happen to us and our project.
We would also like to thank BIMTECH for letting us use the computer
resources and library.
We hope you enjoy reading the report as much as we enjoyed making it.
With Warm Regards,
IBM
(Innovative Business Minds)

Executive Summary
This case study looks at the massive, complex worldwide operations that ensure that
chocolate products are on the shelves of retail outlets 365 days a year. We tend to treat this
achievement as routine. In reality, it represents a triumph for careful planning and
meticulous organisation.
The UK has long been a major manufacturer (and consumer) of chocolate products.
All over the world you will find prominent brands first developed in the UK e.g. Smarties,
Dairy Milk, Aero and of course Kit Kat (the UK's Number 1 selling confectionery brand
since 1985).
Large organisations like Nestlé are able to pass on to us the benefits of economies
of scale, coupled with their experience of producing high quality chocolates over many
years. As a result, we consumers are able to enjoy products built around cocoa beans from
a small farm and transformed by complex production processes into sophisticated products
such as Quality Street, Smarties, Aero, or many other forms of chocolate product.
Cadbury is the world's largest confectionery company and its origins can be traced
back to 1783 when Jacob Schweppe perfected his process for manufacturing carbonated
mineral water in Geneva, Switzerland. In 1824, John Cadbury opened in Birmingham
selling cocoa and chocolate.
Boston Consulting Group matrix method is based on product life cycle approach.To
use the chart, analysts plot a scatter graph to rank the business units (or products) on the
basis of their relative market shares and growth rates. The BCG matrix has been used in the
same to further analyse the issue..
The main objective for the design of the report is to find the causes underlying the
low market share of Nestle in the Indian markets as compared to Cadbury’s even though it
is a much bigger company in terms of size, turnover and product range.

CONTENTS
1. Introduction……………………………………………………...5
a) Introduction of problem
b) Statement of Problem
c) Relevance of Problem
2. Introduction: Industry………………………………………..8
3. Nestle…………………………………………………………..10
a) Business principles
b) Value Chain
c) History
d) Portfolio Analysis
e) New Product Development
f) SWOT Analysis
4. Cadbury……………………………………………………..25
a) History
b) Shareholding
c) Product Details
d) New Product strategy
5. Review of Literature………………………………….………...35
a) Chain of Production
b) Concepts of Marketing
c) Niche Oriented Communication
d) Brand Strategy
e) Marketing- Global Environment
f) Growth Strategy
g) Product Lines
h) BCG Matrix Analysis
6. Analysis of Research…………………………………………..53
7. Limitations……………………………………………………..66

8. Conclusions………………….………………..………………..67
9. Recommendations………….…...……………………………..68
10. Annexure…...…….………………………………….………..69
11. Bibliography…….…………………………………………...76

Introduction
Introduction to the problem:

The main objective for the design of the report is to find the causes underlying the
low market share of Nestle in the Indian markets as compared to Cadbury’s even though it
is a much bigger company in terms of size, turnover and product range.
It wouldn’t be untrue to state the fact that both Cadbury and Nestle are major
competitors of each other and host a number of brands in the market. Still Cadbury fares
better than Nestle when it comes to market share. A number of factors are responsible for
the above mentioned problem; most important of which could be the consumer preference
of the same and also how it has been positioned into the eyes of the customer.
The stated problem lead the research to various market places, places near the
kirana stores, tier 1 and tier II cities , focus group interviews etc.
Statement of the problem:

To find the causes underlying the low market share of Nestle in the Indian markets
as compared to Cadbury’s even though it is a much bigger company in terms of size,
turnover and product range. Nestle, one of the largest and leading food processed company
and has various chocolate brands worldwide, which are doing well. But Cadbury the
market leader in chocolates segment in India has made it very tough for Nestle.
Relevance of the problem:

Cadbury India the market leader in chocolates segment has a market share of 71.9%
while Nestle India chocolate has a total market share of 24.7% (Market share; Aarati
Krishnan)
The research method is a comparative one wherein the comparison between two big
brands has been done. Cities like Delhi, Meerut, Dhanbad etc have been taken under
consideration. The type of sampling chosen is random. The total sample size was around
200.

The analysis was carried out on the basis of the following:
 The various age groups were designed between intervals of 5-13 yrs, 14-20yrs, 21-
27yrs, 28-35yrs, 36-45yrs, 45yrs and above.
 The reasons foe which consumers buy chocolates i.e. for self- consumption, family
etc..
 The preference of the chocolates was recorded.
 Also the research has tried to analyze the problem by trying to find out as to
whether the consumers are aware of the brand or label to which various chocolates
belong.
 The frequency at which chocolates are bought.
 Since the survey was carried out during the Diwali season hence the gift packets of
both the brands were considered.
 The advertisements, their frequency and their retention by the customers.
 Factors like price, taste, company, pack size, packing, availability, calories
(ingredients) were ranked by the consumers on the basis of their preference.

Introduction- Industry
Most of us love chocolate in one form or another and every week a typical UK citizen
spends around £1.80 on it. Amazingly, UK consumers have a choice of over 5,000
chocolate lines available from 150,000 outlets. Because it is so widely and readily
available, we tend to take chocolate for granted, and few of us probably ever consider what
is involved in producing it.
This case study looks at the massive, complex worldwide operations that ensure that
chocolate products are on the shelves of retail outlets 365 days a year. We tend to treat this
achievement as routine. In reality, it represents a triumph for careful planning and
meticulous organization.
We don't know who first discovered that cocoa beans could be turned into a drink, but we
do know that by 600AD the Mayan people living in what is now Mexico were growing
cocoa in the jungles of Yucatan.
In the 16th century the Spaniards invaded South America, quickly learned the secrets of
making chocolate as a drink and started shipping back cargoes of cocoa beans. By the 18th
century, chocolate-based drinks were popular in British high society. In the mid-19th
century an English cocoa manufacturer, Joseph Storrs Fry, tried mixing cocoa butter with
sugar and cocoa paste and invented the world's first solid blocks of chocolate.
The UK has long been a major manufacturer (and consumer) of chocolate products. All
over the world you will find prominent brands first developed in the UK e.g. Smarties,
Dairy Milk, Aero and of course Kit Kat (the UK's Number 1 selling confectionery brand
since 1985).
Three producers dominate the chocolate market. Cadbury with around 28% while Mars and
Nestle each have around 24%. Sales of milk chocolate (96%) predominate, with plain and
white chocolate accounting for about 2% each. Boxed chocolates such as Quality Street
make up 15% of the confectionery market. Blocks and bars like Kit Kat and Yorkie
account for 65% and bitesize chocolates e.g. Smarties and Rolo make up 10%. Easter eggs
are another big seller, accounting for 5% of the market.

The UK's chocolate industry is over 150 years old. Chocolate manufacture provides steady
employment and job security for tens of thousands of employees in manufacturing
locations like York and Birmingham. The industry also generates jobs in marketing,
administration, transport and storage. Chocolate sales are an important source of income
for many retailers.
CONFECTIONARY INDUSTRY IN INDIA
The confectionery industry in India is approximately divided into:
 Chocolates
 Hard-boiled candies
 Éclairs & toffees
 Chewing gums
 Lollipops
 Bubble gum
 Mints and lozenges
The total confectionery market is valued at Rupees 23 billion with a volume turnover of
about 145000 tones per annum. The category is largely consumed in urban areas with a
70% skew to urban markets and a 30% to rural markets.
Hard boiled candy accounts for 20%, Éclairs and Toffees accounts for 18%, Gums and
Mints and lozenges are at par and account for 13%. Digestive Candies and Lollipops
account for 1.5% share respectively.
Overall industry growth is estimated at 2.5 % in the chocolates segment and sugar
confectionery segment has declined by 3%.

Nestle
Nestle India is a subsidiary of Nestle S.A. of Switzerland. With seven factories and a large
number of co-packers, Nestle India is a vibrant Company that provides consumers in India
with products of global standards and is committed to long-term sustainable growth and
shareholder satisfaction.
The Company insists on honesty, integrity and fairness in all aspects of its business and
expects the same in its relationships. This has earned it the trust and respect of every strata
of society that it comes in contact with and is acknowledged amongst India's 'Most
Respected Companies' and amongst the 'Top Wealth Creators of India'.
BRAND PROMISE
Nestlé is a brand in its own right. For consumers, relevance of Nestlé as a company comes
first of all through contact with products that are branded Nestlé. If we want to be
perceived as the world's leading food company, we have to offer consumers an increasing
amount of products that they can identify as Nestlé's."
- Peter Brabeck Letmathe, CEO, Nestlé.
Nestlé’s Business Vision
Respected, Trustworthy Food, Nutrition, Health and Wellness Company”
Nestle India’s Business Vision
To rapidly build Nestlé India as the Respected and Trustworthy leading Food, Nutrition,
Health and Wellness Company ensuring long term sustainable and profitable growth
Nestlé Corporate Business Principles for Farming revolution in India….

Agricultural raw materials, milk, coffee, cocoa, cereals, vegetables, fruit, herbs, sugar

And spices are vital factors affecting the quality and costs of Nestlé manufactured food
products and, as a consequence, the Company’s business performance. In this context
Nestlé:
1) Provides agricultural assistance to farmers
2) Procures Agricultural raw materials either through trade channels or directly from
farmers
3) Supports farming practices and agricultural production systems that are sustainable; that
is those practices and systems that satisfy long-term economic, ecological and social
requirements;
4) Supports mechanisms that contribute to a more regular income for farmers;
5) Is not engaged itself in its own commercial farming activities
Nestle has also developed a series of business principles with the main focus on
communications with consumers. Two of these are:
(1) 'Nestle consumer communication should reflect moderation in food consumption and
not encourage overeating. This is especially important regarding children.
(2) Nestle consumer communication must [match the desire for] healthy, balanced diets.
Our advertising must not imply the replacement of meals with indulgence or snack foods,
nor encourage heavy snacking'.
The company strategy is to ensure that the consumer remembers recognize and understand
the nutritional content of the product they buy, by making the symbols immediately visible
on the front of packs at a glance. This has brought a positive effect on the reputation of the
company. Consumers can see that Nestlé is behaving responsibly and is communicating
effectively with them.

As a company responsive to Nutrition, Health and Wellbeing Company, Nestle is keen to
promote and facilitate healthy living for its employees as well. Nestle linked the launch of
its Guideline Daily Amounts on front of the packs with an internal communication
programmed to inform the employees about GDA’s and the labeling system. This proved to
be motivation employees as it showed that Nestle cared for their well-being and also the
families. Nestle's business principles and its approach to corporate responsibility were the
steps towards of what is known within Nestle as 'Creating Shared Value'.
This process of Creating Shared Value has two major components. It links the needs of the
shareholders and consumers to the need to respective persons and their environment.
Creating Shared Value implies that Nestle looks at the influence of each and every
corporate activity that it undertakes on the wider environment. This attitude is at the core of
everything that the company does or intends to do.
This process begins when products are brought from various parts of the world. It continues
through the manufacturing and distribution of the products. It gets over when the products
are finally rendered to the customers for e.g. supermarkets and ultimately sold to the
ultimate consumers (the public).
VALUE CHAIN
Each step in this value chain is critical and has harmful consequences if failed to be
managed properly. For example, without sustainable agricultural practices the natural
resources of farms worldwide would get damaged.
By carrying forward corporate responsibility in its business practices in this way, Nestlé is
able to contribute positively to societies across the globe.

ISSUES IN THE SUPPLY CHAIN
As a major buyer Nestlé seeks to be as closely involved in the supply chain as possible, to
ensure quality and fairness.
Currently Nestle is participating in a process to examine potential problems of forced child

labour on cocoa farms in West Africa. This is being done on an industry wide basis, in
consultation with governments, labour organizations and Non-Governmental Organisations
(NGO), as well as with other members of the cocoa and chocolate industry. We strictly
monitor that no child labour is used in Nestle facilities and reject industrial suppliers who
do so. We hope that the constructive dialogue that has been started on this issue will
continue, and that these discussions will result in pragmatic approaches to doing what is
best for workers in Western Africa.
THE HISTORY
In the mid-1860s, Henri Nestlé (Henri), a merchant, chemist, and innovator experimented
with various combinations of cow's milk, wheat flour and sugar. The resulting product was
meant to be a source of infant nutrition for mothers who were unable to breast-feed their
children. In 1867, his formula saved the life of a prematurely born infant. Later that year,
production of the formula, named Farine Lactee Nestlé, began in Vevey, and the Nestlé
Company was formed. Henri wanted to develop his own brands and decided to avoid the
easier route of becoming a private label. He also wanted to make his company a global
company.
In mid-1988, Nestlé SA (Nestlé), the world's largest consumer packaged foods company
based in Switzerland, acquired Rowntree Mackintosh PLC (Rowntree), in the largest ever

acquisition deal of a British company during that time. Rowntree was the world's fourth
largest manufacturer of chocolates and confectionery products, with well-known brands
like Kit Kat, After Eight, Smarties and Rolo.
The deal attracted considerable attention all over the world since several bids to acquire
Rowntree were rejected. Rowntree claimed that the bids were too low for its valuable, well-
recognized brands. In the end, Rowntree was acquired by Nestlé for £2.5 billion, two and a
half times the pre-bid price and eight times the net asset value of the company.
This acquisition made Nestlé the largest chocolate manufacturer in the world. Analysts felt
that Nestlé had paid £2.5 billion because of Rowntree's brands, not its past financial
performance. Industry observers wondered how Nestlé would manage Rowntree's brands.
Rowntree followed a "one product, one brand" policy.
The brands were simply Kit Kat, After Eight, Smarties and Rolo, Rowntree was never
mentioned. Moreover, Rowntree's brands were not strongly managed European brands. In
fact, according to an analyst , Kit Kat was one of the worst cases of an over-localized brand
of a company across Europe.
Within a few months of establishing his company, Henri began to sell his products in many
European countries. In the initial years, Henri restructured the organization to facilitate
research, improve product quality, and develop new pr In 1875, Daniel Peter, Henri's friend
and neighbor, developed milk chocolate. He soon became the world's leading chocolate
maker. Later, his company was acquired by Nestlé. In 1905, Nestlé merged with Anglo-
Swiss Condensed Milk Company, a manufacturer of milk-based infant food.
During World War I, there was a huge demand for dairy products and Nestlé capitalized on
this opportunity by executing military contracts of various countries productsand Nestlé
capitalized on this opportunity by executing military contracts of various countries.In 1938
after 8 years of research years of research, Nestlé discovered a soluble powder that
revolutionized coffee drinking around the world. The product was launched under the
brand name Nescafe and became an instant success.
The end of the World War II marked the beginning of a new phase of growth for Nestlé.
The company added many new products.
In its effort to expand its operations further, Nestlé merged or acquired several companies.
In 1947, Nestlé expanded into culinary products by merging with Alimentana, a Swiss

company that produced and sold Maggi soups, spices and other food products in many
countries. In 1950, Nestlé acquired Crosse & Blackwell, a British manufacturer of
preserves and canned foods. This was followed by the acquisition of Findus, a Swedish
company producing frozen foods (1963), Vittel, a French mineral water company (1969),
Libby's, a British fruits, vegetables and meat company (1971), Ursina Franck, a Swiss
company producing milk products, baby food and culinary products (1971), Stouffer's, a
US frozen foods company (1973), and L'Oreal, a leading French cosmetics manufacturer
(1974). All these acquisitions (Refer Exhibit II for other acquisitions by Nestlé) led to
substantial synergies in Nestlé's production, distribution and sales. A sneak Peak into the
activities -
1912: Acquired the Dutch company – Galak Condensed Milk Company of Rotterdam,
Holland and also established a skimmed milk powder company entirely for export market
1920: Entered South America by establishing a milk districts in Brazil, in Argentina in
1922, and in Peru in 1940
1961: Started to replicate its successful milk district models in Asian countries with Moga
in India, followed by Sri Lanka in 1982, Indonesia 1986, Pakistan 1988, China 1990,
Thailand 1991, Morocco 1993 and Uzbekistan 2001 China, India and Pakistan each
collect over 10, 00,000 Kg/day On an average Nestlé milk districts are growing 2% - 5%
annually, and in some cases as high as 10%.
PORTFOLIO ANALYSIS OF NESTLE
(Source Financial analysts meet Nov 2006)

Company’s Future Strategy (Source financial analysts meet Nov 2006)
RESEARCH AND DEVELOPMENT ACTIVITIES AT NESTLE
(Source Werner Bauer, Nestlé's Head of Technical, Production and R&D)

NEW PRODUCT DEVELOPMENT (INNOVATION AND RENOVATION) AT
NESTLE
Each of Nestlé's factories is a centre of excellence that specializes in developing new areas
of food technology. New paste bouillon research and development is carried out at an
Austrian factory. New product development involves a number of important stages. To
give an idea of timescale, the development process for paste bouillons took 6 months:
Research and Development brief - the company gives the factory a clear written
document about the various details of the product. The product may or mayn’t be a part of
the repositioning strategy of the company. The briefing is all about the small details like
product specifications, details relating to the calories specifications and also the final price
range of the product.
Creation of the samples and tasting- the food technologists after completing their part
develop a variety of samples which are checked by the specialists.
Feedback and observations- after the testing part gets over the response of the specialists
is being forwarded to the factory as a part of company process and if any changes are to be
made it is being incorporated in the product.
Sign-off – the next step after making the recommended changes in the product when every
one is satisfied and an agreement is confirmed. Also, the final price of the product is
finalised. Before the company goes in for large scale production it has to produce
approximately 1 tonne. At that point the front labels are designed, product photography
commissioned, recipe sheets are produced and sales presenters are designed to make a
successful product launch.
KitKat UK: Have a break...

Strengths
 High advertising spend creates high brand loyalty as well as barriers to entry
 High brand recognition due to effective ‘Have a break’ slogan

 Its position in 2 different markets (2-finger and 4-finger) gives it double the
retail Space which results in diversification of risk for the brand as well as
sales potential
 Market leader in the 2-finger product; as the price-setter it enjoys high margins
in a market that has low price sensitivity
 Cascade strategy system is efficient management that gives KitKat marketing
managers freedom and flexibility to act quickly
 Cannibalization of 2-finger and 4-finger products avoided through two different,
targeted marketing and pricing strategies
 Different packaging for grocers and independent sector diminishes the power
for multiple grocers to negotiate for higher profits, since consumers can’t
directly compare products
 High brand equity in consumer’s eyes, as demonstrated by highly successful
launches of product extensions such as the orange and mint flavours
 KitKat’s creation of the CBCL sector gives it brand recognition amongst
chocolate biscuit consumers as well as first mover advantage
 KitKat is largest brand in Rowntree and designated as 1 of 5 brands to have an
innovation focus; as a result, will have lots of company resources and capital to
use.
Weakness
 Production already at capacity, which means profitability is impacted,
particularly in 4-finger market where there is little opportunity to increase prices
to control demand
 Yearly decline of 2.6% in CBCL market means the company may not have
enough resources for innovation, which is a key component of KitKat’s strategy
 Current focus on physicality & packaging does not offer core product benefits
(like taste)
 High advertising costs are not bringing ROI; consumers cannot tell the
difference despite positioning and segmentation strategies
 Special foil packaging is expensive and not a sales driver. From a competitor
perspective (i.e. Cadbury), it is no longer necessary
 4-finger product’s recent loss of market share affects available resources and
morale

 High risk associated with 2-finger product’s price setter position; if priced
incorrectly, can easily lose market share
 Brand space is undefined in consumer mind due to position between snack,
indulgence
Opportunities
 In the 4-finger market, can build on 3rd place position as a market challenger
 Build on the success of past product extensions (i.e. KitKat Chunky, Orange,
Mint) to meet competitors head-on
 Leverage growth of multiple grocers by investing further in building
relationships with them to claim optimal retail space and as a result, increase
sales
 Capitalize on growing confectionary snack market (20% growth over the last
five years)
 Children’s market; is not specifically targeted to but identified as KitKat
consumers
 Chocolate box assortment market.
Threats
 High intensity of competition; Cadbury and Mars are established players, while
new entrants such as Fox’s Rocky bar, small brands, discount European
confectioners, grocery retailers’ own labels are increasing pressures
 Chocolate confectionary market is saturated and stable with maturing growth
which may have cost implications due to the need for higher adaptation
 Due to increasing crossover between chocolate countline and CBCL,
competitors like Cadbury are finding market entry easier, which encroaches on
KitKat’s market share (i.e. TimeOut chocolate vs. “Have a break”)
 Competitors can take advantage of KitKat’s capacity issues and fill the market
void
 Population of 15-24 year olds in Countline market is declining
CHANNEL STRATEGY IN THE U.K
Currently, Rowntree distributes KitKat through large grocers and CTN (confectioners,
tobacconists, newsagents) through cash-and-carries. Although both the 2-finger and 4-

finger varieties can be found in these two channels, they follow different strategies: Only
18% of the 2-finger variety is sold to CTN, while 80% of the 4-finger variety can be found
stocked at CTNs. Management plans to boost trade cooperation and become more
categories focused.
Key challenges with the existing distribution system:
 Competing retail space with grocer’s own labels and new product lines like Time
Out
 Large grocers like Sainsbury and Tesco want Kit Kat mini’s like Aldi
 Current distribution system reaches the mass market effectively but is unfocused on
the specific target consumer groups
 Some decline in product sales over the last 5 years (i.e. 4-finger multipacks have
declined –40% in sales to wholesale/independent retailers over 5 years, Exhibit 1.2)
RECOMMENDATION: Key elements in a channel strategy for Rowntree
 Devote more resources in building stronger relationships in the CBCL sector:

o Since CBCL is a high-growth market, Rowntree will see long-term returns
o At 23,900 tonnes, the 2-finger variety distribution is larger than the 4-finger
at 19,600 tonnes (Exhibit 1.2) and as such, requires more attention
 Work with large grocers to launch more promotions (i.e. repeat purchase incentives)
to gain optimal retail space in respective product categories
o Promotions will help compete with grocers’ own labels
 Build relationship with retailers by launching internal promotions (i.e. Contest with
a prize for the supermarket that sells 200 bars the quickest) in order to generate
retailer interest and gain optimal retail space
Channels  Current: Large grocers and CTNs through cash-and-carries
 Recommendation: Diversify risk by exploring other
channels, i.e. gas stations, drug stores
 While mass distribution is effective for a convenience good
such as Kit Kat, Rowntree can penetrate the specific target
markets better through also distributing to targeted channels,
such as focusing on coffee shops and tea houses for the 35-44
year old market in the 2-finger category, or distribution at
amusement parks for young people in the 4-finger category
Coverage  Current: 2-finger targeted to 35-44 age groups (mostly
women), 12-15 age group and some children while 4-finger
targets 16-24 year olds

 Recommend: Increase distribution coverage for the 4-finger
category to match Mars’, so it can meet the competition
head-on and be in the consumer’s consideration set during
the purchase decision
Assortments  Current: 2-finger (single/multi/other) and 4-finger
(single/multi), minis
 Recommend: In channels for mass market (i.e. large grocers),
ensure that both confectionary and biscuit aisles are stocked
with Kit Kat (4- and 2-finger categories, respectively) to
maintain competitive advantage of double the retail space,
due to its dual positioning
Locations  Current: retailers across UK
 Recommend: Conduct market research to find out what
regions in the UK the target market lives in, and work with
distributors and grocers to place Kit Kat products in those
locations
Inventory  Current: Production capacity issues
 Recommend: Given capacity issues, ensure that no Kit Kats
are wasted by implementing efficient JIT inventory system
THE VISION
To rapidly build Nestlé India as the Respected and Trustworthy leading Food, Nutrition,
Health and Wellness Company ensuring long term sustainable and profitable growth. Good
Food, Good Life. The market segment is impulse snackers and the target is kids and
teenagers. Positioning was done by TV advertisements with kids only
Nestle - A SWOT analysis
Nestle India Limited is the Indian arm of Nestle SA, which holds a 51% stake in the
company. It is one of the leading branded processed food companies in the country with a
large market share in products like instant coffee, weaning foods, instant foods, milk
products, etc. It also has a significant share in the chocolates and other semi-processed
foods market.
Nestlé's leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and
Milkmaid. To strengthen its presence, it has been the company's endeavor to launch new
products at a brisk pace and has been quite successful in its launches.
Nestle business break-up

Segments Brands CY01 CY02 CY03
sales sales sales
Milk Products & Everyday Dairy Whitener, 8,159 8,847 9,880
nutrition milk powder, Milkmaid, Milk,

Dahi, Butter, Cerelac, Nestogen
% of sales 42.5% 43.2% 43.4%
% growth 10.6% 8.4% 11.7%
Beverages Nescafe, Milo, Nestea 5,627 4,894 5,449
% of sales 29.3% 23.9% 23.9%
% growth 14.7% -13.0% 11.3%
Prepared dishes/ Maggi (noodles, pickles, 2,765 3,503 4,094
cooking aids soups, sauces)
(Culinary)
% of sales 14.4% 17.1% 18.0%
% growth 19.6% 26.7% 16.9%
Chocolates & Munch, KitKat, Bar One, 2,646 3,227 3,366
confectionery Classic,
Choco Stick, MilkyBar Choo,
Nestle Fruit & Nut
% of sales 13.8% 15.8% 14.8%
% growth 21.4% 21.9% 4.3%
Total Sales 19,197 20,470 22,790
% growth 14.4% 6.6%
*(figures in Rs m)
Strengths
Parent support - Nestle India has a strong support from its parent company, which is the
world’s largest processed food and beverage company, with a presence in almost every
country. The company has access to the parent’s hugely successful global folio of products
and brands.
Brand strength - In India, Nestle has some very strong brands like Nescafe, Maggi and
Cerelac. These brands are almost generic to their product categories.
Product innovation - The company has been continuously introducing new products for
its Indian patrons on a frequent basis, thus expanding its product offerings.
Weakness
Exports – The company’s exports stood at Rs 2,571 m at the end of 2003 (11% of
revenues) and continue to grow at a decent pace. But a major portion of this comprises of
Coffee (around 67% of the exports were that of Nescafe instant to Russia). This constitutes
a big chunk of the total exports to a single location. Historically, Russia has been a very
volatile market for Nestle, and its overall performance takes a hit often due to this factor.

Supply chain - The company has a complex supply chain management and the main issue
for Nestle India is traceability. The food industry requires high standards of hygiene,
quality of edible inputs and personnel. The fragmented nature of the Indian market place
complicates things more.
Opportunities
Expansion - The company has the potential to expand to smaller towns and other
geographies. Existing markets are not fully tapped and the company can increase presence
by penetrating further. With India's demographic profile changing in favour of the
consuming class, the per capita consumption of most FMCG products is likely to grow.
Nestle will have the inherent advantage of this trend.
Product offerings - The company has the option to expand its product folio by introducing
more brands which its parents are famed for like breakfast cereals, Smarties Chocolates,
Carnation, etc.
Global hub - Since manufacturing of some products is cheaper in India than in other South
East Asian countries, Nestle India could become an export hub for the parent in certain
product categories.
Threat
Competition - The company faces immense competition from the organised as well as the
unorganised sectors. Off late, to liberalise its trade and investment policies to enable the
country to better function in the globalised economy, the Indian Government has reduced
the import duty of food segments thus intensifying the battle.
Changing consumer trends - Trend of increased consumer spends on consumer durables

resulting in lower spending on FMCG products. In the past 2-3 years, the performance of
the FMCG sector has been lackluster, despite the economy growing at a decent pace.
Although, off late the situation has been improving, the dependence on monsoon is very
high.
Sectoral woes - Rising prices of raw materials and fuels, and inturn, increasing packaging
and manufacturing costs. But the companies’ may not be able to pass on the full burden of
these onto the customers.
Conclusion
The food processing business in India is at a nascent stage. Currently, only about 10% of
the output is processed and consumed in packaged form thus highlighting huge potential
for expansion and growth. Traditionally, Indians believe in consuming fresh stuff rather

then packaged or frozen, but the trend is changing and the new fast food generation is
slowly changing

Cadbury
Cadbury India is a food product company with interests in Chocolate Confectionery, Milk
Food Drinks, Snacks, and Candy. Cadbury is the market leader in Chocolate Confectionery
business with a market share of over 70%. Some of the key brands of Cadbury are Cadbury
Dairy Milk, 5 Star, Perk, Eclairs, Celebrations, Temptations, and Gems. In Milk Food
drinks segment, Cadbury's main product - Bournvita is the leading Malted Food Drink in
the country.
THE HISTORY
Cadbury is the world's largest confectionery company and its origins can be traced back to
1783 when Jacob Schweppe perfected his process for manufacturing carbonated mineral
water in Geneva, Switzerland. In 1824, John Cadbury opened in Birmingham selling cocoa
and chocolate. Cadbury and Schweppe merged in 1969 to form Cadbury Schweppes plc.
Milk chocolate for eating was first made by Cadbury in 1897 by adding milk powder paste
to the dark chocolate recipe of cocoa mass, cocoa butter and sugar. In 1905, Cadbury's top
selling brand, Cadbury Dairy Milk, was launched. By 1913 Dairy Milk had become
Cadbury's best selling line and in the mid twenties Cadbury's Dairy Milk gained its status
as the brand leader. Cadbury India began its operations in 1948 by importing chocolates
and then re-packing them before distribution in the Indian market. Today, Cadbury has five
company-owned manufacturing facilities at Thane, Induri (Pune) and Malanpur (Gwalior),

Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai,
Kolkota and Chennai). Its corporate office is in Mumbai. Worldwide, Cadbury employs
60,000 people in over 200 countries.
Major Achievements of Cadbury

 Worlds No 1 Confectionery company
 World's No 2 Gums company.
 World's No 3 beverage company.
 World's No 3 beverage company.
 Cadbury Dairy Milk & Bournvita have been declared a "Consumer Superbrand" for
2006-7 by Superbrands India.
 Cadbury India has been ranked 5th in the FMCG sector, in a survey on India's most
respected companies by sector conducted by Business World magazine in 2007.
INDIA AMONG CADBURY TOP 12 GLOBAL MARKETS.
The UK-based chocolate, confectionery and beverages major Cadbury Schweppes has
identified India among its top 12 focus markets globally, in an announcement made last
week. Under a new management structure which would emerge following the proposed
demerger of its beverages arm Americas Beverages into a separate company, the Cadbury
Schweppes management announced last week that its commercial strategy would hinge on
‘fewer top markets and brands’.
The Rs 1,058-crore Indian subsidiary, along with the UK, US, Australia, Mexico, Brazil,
Russia and Turkey, now represents around 70% of Cadbury Schweppes’ global revenues.
This, despite beverages brands such as Schweppes, Snapple and Dr Pepper not having a
presence in India. The 12 core markets have been forecast to account for growth in excess
of 60% over the next five years.
Cadbury India, growing in double digits the past two years, has forecast a healthy 2007
riding on the back of factors such as sharper focus on core brands, product rationalisation
and working closely with trade channels. The Indian subsidiary, which now operates under
five categories –- chocolates, snacks, beverages, candy and gums being the newest, is learnt
to be in the process of pushing products in categories other than chocolate where it is a
dominant player. Of Cadbury Schweppes’ 13 focus brands clocking above average revenue
growth and operating returns, two are in India as of now — Cadbury Dairy Milk and Halls.

SHAREHOLDING PATTERN
The share capital of the company is Rs. 35.7 crore and the number of total shares
outstanding amount to 3.57 crore. The face value per share is Rs.10. The share is currently
trading at Rs. 418, as on May 22, 2001. The market capitalization of the company is
Rs.1990.52 crore. The parent Cadbury Schweppes holds 51% stake in the company.
The Cadbury brand has a profound impact on individual product brands. Brands have
individual personalities aimed at specific target markets for specific needs e.g. Timeout, for
example, is an ideal snack to have with a cup of tea. These brands derive benefit from the
Cadbury parentage, including quality and taste credentials. To ensure the success of
product brands every aspect of the parent brand is focused on. A Flake, Crunchie or
Timeout are clearly different and are manufactured to appeal to a variety of consumer
segments. However the strength of the umbrella brand supports the brand value of each
chocolate bar. Consumers know they can trust a chocolate bar that carries Cadbury
branding. The relationship between Cadbury and individual brands is symbiotic with
Some brands benefiting more from the Cadbury relationship, i.e. pure chocolate brands
such as Dairy Milk. Other brands have a more distant relationship, as the consumer
motivation to purchase is ingredients other than chocolate, e.g. Crunchie. Similarly issues
such as specific advertising or product quality of a packet of Cadbury biscuits or a single
Crème Egg will, in turn, impact on the perception of the parent brand. Similarly the
umbrella brand has a strong brand value

CADBURY DAIRY MILK.
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.
Recently, Cadbury Dairy Milk Desserts was launched, specifically to cater to the urge for
'something sweet' after meals.
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.
Our Journey:
Cadbury Dairy Milk has been the market leader in the chocolate category for years. And
has participated and been a part of every Indian's moments of happiness, joy and
celebration. Today, Cadbury Dairy Milk alone holds 30% value share of the Indian
chocolate market.
In the early 90's, chocolates were seen as 'meant for kids', usually a reward or a bribe for
children. In the Mid 90's the category was re-defined by the very popular `Real Taste of
Life' campaign, shifting the focus from `just for kids' to the `kid in all of us'. It appealed to

the child in every adult. And Cadbury Dairy Milk became the perfect expression of
'spontaneity' and 'shared good feelings'.
The 'Real Taste of Life' campaign had many memorable executions, which people still
fondly remember. However, the one with the "girl dancing on the cricket field" has
remained etched in everyone's memory, as the most spontaneous & un-inhibited expression
of happiness.
This campaign went on to be awarded 'The Campaign of the Century', in India at the Abby
(Ad Club, Mumbai) awards.
In the late 90's, to further expand the category, the focus shifted towards widening
chocolate consumption amongst the masses, through the 'Khanewalon Ko Khane Ka
Bahana Chahiye' campaign. This campaign built social acceptance for chocolate
consumption amongst adults, by showcasing collective and shared moments.
More recently, the 'Kuch Meetha Ho Jaaye' campaign associated Cadbury Dairy Milk with
celebratory occasions and the phrase "Pappu Pass Ho Gaya" became part of street
language. It has been adopted by consumers and today is used extensively to express joy in
a moment of achievement / success.
The interactive campaign for "Pappu Pass Ho Gaya" bagged a Bronze Lion at the
prestigious Cannes Advertising Festival 2006 for 'Best use of internet and new media'. The
idea involved a tie-up with Reliance India Mobile service and allowed students to check
their exam results using their mobile service and encouraged those who passed their
examinations to celebrate with Cadbury Dairy Milk.
The 'Pappu Pass Ho Gaya' campaign also went on to win Silver for The Best Integrated
Marketing Campaign and Gold in the Consumer Products category at the EFFIES 2006
(global benchmark for effective advertising campaigns) awards.
Did You Know?
Cadbury Dairy Milk emerged as the No. 1 most trusted brand in Mumbai for the 2005
edition of Brand Equity's Most Trusted Brands survey.

During the 1st World War, Cadbury Dairy Milk supported the war effort. Over 2,000 male
employees joined the armed forces and Cadbury sent books, warm clothes and chocolates
to the front.
CADBURY 5 STAR
Chocolate lovers for a quarter of a century have indulged their taste buds with a Cadbury 5
Star. A leading knight in the Cadbury portfolio and the second largest after Cadbury Dairy
Milk with a market share of 14%, Cadbury 5 Star moves from strength to strength every
year by increasing its user base.
Launched in 1969 as a bar of chocolate that was hard outside with soft caramel nougat
inside, Cadbury 5 Star has re-invented itself over the years to keep satisfying the consumers
taste for a high quality & different chocolate eating experience.
One of the key properties that Cadbury 5 Star was associated with was its classic Gold
colour. And through the passage of time, this was one property that both, the brand and the
consumer stuck to as a valuable association. Cadbury 5 Star was always unique because of
its format and any communication highlighting this uniqueness, went down well with the
audiences. From 'deliciously rich, you'd hate to share it' in the 70's, to the 'lingering taste of
togetherness' & 'Soft and Chewy 5 Star' in the late 80's, the communication always paid
homage to the product format.

More recently, to give consumers another reason to come into the Cadbury 5 Star fold,
Cadbury 5 Star Crunchy was launched. The same delicious Cadbury 5 Star was now
available with a dash of rice crispies.
Cadbury 5 Star & Cadbury 5 Star Crunchy now aim to continue the upward trend. This
different and delightfully tasty chocolate is well poised to rule the market as an extremely
successful brand.
Did you know?
Cadbury 5 Star played an adept cupid for young couples in love in the 70's. In fact,
Cadbury 5 Star was a way of professing undying love for the significant other.
CADBURY PERK
A pretty teenager; a long line, and hunger! Rings a bell? That was how Cadbury launched
its new offering; Cadbury Perk in 1996. With its light chocolate and wafer construct,
Cadbury Perk targeted the casual snacking space that was dominated primarily by chips &
wafers. With a catchy jingle and tongue in cheek advertising, this 'anytime, anywhere'
snack zoomed right into the hearts of teenagers.
Raageshwari started the trend of advertising that featured mischievous, bubbly teenagers
getting out of their 'stuck and hungry' situations by having a Cadbury Perk. Cadbury Perk
became the new mini snack in town and its proposition "Thodi si pet pooja" went on to
define its role in the category.
As the years progressed, so did the messaging, which changed with changes in the
consumers' way of life. To compliment Cadbury Perk's values, the bubbly and vivacious
Preity Zinta became the new face of Perk with the 'hunger strike' commercial in the mid
90's.
In the new millennium, Cadbury Perk moved beyond just owning

'hunger' to a "Kabhi bhi kaise bhi" position, because the urge for
Cadbury Perk could strike anytime and anywhere.

With the rise of more value-for-money brands in the wafer chocolate segment, Cadbury
Perk unveiled two new offerings - Perk XL and XXL.
The temptation to have more of Cadbury Perk was made even greater with the launch of
Cadbury Perk Minis in 2003 for just Rs. 2/-
In 2004, with an added dose of 'Real Cadbury Dairy Milk' and an 'improved wafer', Perk
became even more irresistible. The product was supported in the market with a new look
and a new campaign. The advertisement spoke of the irresistible aspect of the brand, with
'Baaki sab Bhoola de' becoming the new mantra for Cadbury Perk.
Did you know?

Cadbury Perk advertising has been a launch pad for Bollywood stars - Preity Zinta,
Raageshwari, Gayatri Joshi and Amrita Rao, were all Perk models before they made it big
on cinema screens.
CADBURY CELEBRATIONS
Cadbury Celebrations was aimed at replacing traditional gifting options like Mithai and
dry- fruits during festive seasons.
Cadbury Celebrations is available in several assortments: An assortment of chocolates like

5 Star, Perk, Gems, Dairy Milk and Nutties and rich dry fruits enrobed in Cadbury dairy
milk chocolate in 5 variants, Almond magic, raisin magic, cashew magic, nut butterscotch
and caramels.
The super premium Celebrations Rich Dry Fruit Collection which is a festive offering is an
exotic range of chocolate covered dry fruits and nuts in various flavours and the premium
dark chocolate range which is exotic dark chocolate in luscious flavours.
Cadbury Celebrations has become a popular brand on occasions such as Diwali, Rakhi,
Dussera puja. It is also a major success as a corporate gifting brand. The communication is
based on the emotional route and the tag line says "rishte pakne do" which fits with the
brand purpose of strengthening your relationships with something sweet.

Did you know?
The "Rishte Pakne do" jingle was penned by noted writer Gulzar
TEMPTATIONS
Ever see people hide away their chocolate since they don’t want to share it! If you have,
then its likely to be a bar of Cadbury Temptations! Cadbury Temptations is a range of
delicious premium chocolate in five flavours.
Research revealed a niche segment of “chocoholics” - those exposed to international

chocolates and those who love a variety of chocolates but possibly find the price of
international chocolates too high. Cadbury Temptations is a range targeted at this segment
of discerning chocolate lovers.
The Cadbury Temptations range is available in 5 delicious flavour variants- Roast

Jamaica. With its international quality chocolate Temptations soon became a popular brand
for "chocoholics".
The advertising positioned Cadbury Temptations as a chocolate range so delicious that it

was "too good to share".

STUDYING CADBURY OVER THE YEARS
The company Cadbury began its operation in India in 1948 by importing chocolates and
repacking them before distribution. After 59 years of existence it has five factories at Pune,
Thane, Malanpur, Banglore, Baddi and 4 sales offices at New Delhi, Kolkata and Mumbai.
CADBURY SECTORS
Currently Cadbury operates in three sectors chocolate, milk food drinks and candy. Under
our project we are studying only one sector that is chocolates. Key brands under the
chocolate sector are Cadbury dairy milk, perk, five star, éclairs and celebration. The flag
ship brand is Cadbury dairy milk in quality standards in India. The pure taste of CDM
defines the taste of Indian consumers.
NEW PRODUCT STRATEGY
Cadbury India announced the national launch of 'Ulta Perk', a wafer-based chocolate. 'Ulta
Perk' has been test marketed in southern states like Tamil Nadu and Karnataka for over 6
months and is now being launched in other parts of India.
The product is targeted towards teenagers and youth. 'Ulta Perk' will be the second product
offering from Cadbury in the chocolate-wafer segment, after the ‘Perk’ brand.
Commenting on the launch, Sanjay Purohit, executive director – marketing, Cadbury India
said, “The product construct and pricing for ‘Ulta Perk’ has been designed to meet the
needs of our largest target segment – the youth and will broaden our product appeal and
options to the consumers”. The product is currently priced at Rs 5.
Perk was launched in the market in 1995 and has seen consistent growth through the years,
said the company. The chocolate wafer market is around 35% of the total chocolate market
and has been growing at around 13% annually.
A 360-degree campaign will be rolled out in the first week of October. The campaign will
be a mix of television commercials, outdoor, consumer contact activities, etc. Cadbury
India has tied up with leading coffee chain Café Coffee Day for direct sampling of the
product in top cities. ‘Ulta Perk’ will see a multi-media marketing campaign to connect
with the target consumers

Review of Literature
George Bernard Shaw wrote, “What used are the cartridges in battle? I always carry
chocolates instant”. This is how chocolates are making our life sweeter everyday.
Chocolates are comprises of number of raw and processed food that are produced from
beans of coco tree. It is grown in tropical countries with high temperature, high rainfall,
and high humidity. Bringing the coco beans to the market involves heavy lifting, carrying
and sorting. Most of the crops grown in the tropical countries are sold to the MNC’s like
Cadbury Schweppes and Nestle.
CHAIN OF PRODUCTION
The supply chain is the sequence of activities and processes required to convert raw
materials and components into consumer goods and services and to deliver them to the
consumer. For cocoa, the chain is often complex and varies from one country to another.
However, a typical pattern would pass through the following stages.
Primary producers: The first stage is to grow the cocoa beans. Often the many small
farmers involved will live some distance from the market
They depend on people operating in the tertiary or service sector of the economy to collect,
purchase and transport the cocoa product to warehouses. In an exporting country like Ivory
Coast, export warehouses are located near one of the country's ports, Abidjan and San
Pedro.
It is at this stage that companies such as Nestlé play an important role in the supply chain
by checking consignments for quality
Nestlé may buy directly from an export warehouse, or it may approach intermediary
suppliers who buy cocoa beans in bulk from across the world and arrange shipment to the
confectionery manufacturers.
The secondary stage of production is the manufacturing companies. These companies bring
together the sugar, cocoa and other raw materials to manufacture the chocolate products we
know so well: they convert the beans into chocolate bars and other finished products.

The final stage in the production chain is selling (retailing) to final consumers. Just as
Nestlé buys in bulk from exporters and suppliers, retailers buy in bulk from Nestlé. Every
Kit Kat or other chocolate product that you buy will have been through all these stages of
production.
RESOURCES NEEDED FOR PRODUCTION
All goods and services depend on resources for their production; these are known as factors
of production one key factor is enterprise: the risk bearing associated with any business. In
the past, many firms owed their existence to perhaps just one person, who set it up.
Nowadays, with the growth of companies, business risk tends to be born by shareholders,
whilst managers exercise day to day control.
Manufacturing, marketing and distributing a product for worldwide consumption involves a

huge amount of careful planning.
A second major resource is the land: cocoa trees grow on it; chocolate factories are built on
it. Cocoa is grown in Central and South America, the west coast of Africa and more
recently in South East Asia. Eight countries - Ivory Coast, Ghana, Indonesia, Nigeria,
Brazil, Cameroon, Ecuador and Malaysia supply 88% of world output. Over 40% of the
world's supply comes from Ivory Coast, where cocoa is grown mainly on over 600,000
small, family-owned farms. Most cocoa farms occupy between one and three hectares.

Labour is another key input. Small farmers (who are entrepreneurs in their own right) have
developed the skill of producing a high yielding, top grade product. Cocoa production is
often their only source of income.
They may also grow subsistence crops such as yams or palms, but they typically rely on the
cash from cocoa to pay for extras such as health services and educating their children. Raw
materials are another important resource within the production process. Besides the cocoa
beans themselves, raw materials for the chocolate industry include sugar, milk and
wrapping/packaging materials e.g. paper, foil and card.
Another input is the buildings, plant and equipment required for manufacturing and
distribution e.g. factory premises, complex machines and fleets of trucks. These items are
known as capital.

PRODUCTION
Chocolate production consists of many stages. Farmers are at the start of the production
chain.
 Cocoa plants are generally grown in low lying areas and planted in the shade of
other trees such as banana or coconut. It takes up to five years for a new plant to
fruit, after which it may have a life span of 30 years, unless severe weather or
disease destroys it.
 Ripe pods are cut from the tree, broken open and the beans removed.
 The beans are then allowed to ferment, often in baskets, perforated vats, holes in the
ground, or in piles covered by banana leaves. This process takes about six days.
 The beans will by now have turned brown. They will then be spread out to dry in
the sun. Sometimes they are dried artificially. This process reduces the moisture
content from 60to 13
 The beans are then sold. Manufacturers and processors are the major buyers.
The manufacturer then takes over the production process. This involves:
 Cleaning: ensuring materials such as sticks and stones are removed
 Winnowing: the shells are cracked open, the beans isolated, collected and heated
 Roasting: the beans are roasted in furnaces at temperatures between 100ºc- 150ºc
for 20 to 50 minutes. This releases the cocoa's full flavour and aroma
 Grinding: this process breaks down the cocoa butter on the beans and produces a
smooth liquid (cocoa paste)

 Blending: different varieties of cocoa paste are combined to ensure a consistent
final product and to determine the flavour, quality and hardness of the chocolate.
Thereafter, manufacture follows two different paths to produce either cocoa powder (used
in chocolate drinks, pastries, ice creams and desserts) or solid chocolate.
Because cocoa powder requires a low fat content, the paste is pressed to remove most of
the cocoa butter. It is then crushed, pulverized and finely sieved.
Making solid chocolate requires combinations of four basic ingredients: cocoa paste, cocoa
butter, sugar and milk. The mixture depends on the type of chocolate being produced.
Other processes involved in providing high quality chocolate include:
 Refining to reduce the size of the particles
 Conching (stirring) to produce a smooth and glossy chocolate
 Tempering (heating at 45ºc to produce an even smoother end product
 Molding the chocolate into shape, before it is finally packaged.
Typically, chocolates are produced using a continuous flow method along a production line
dedicated to producing large quantities of a single product. To make soft-centre items such
as Rolo, liquid chocolate is poured into deep moulds. These are inverted very quickly,
leaving a coating of chocolate on the inside. Once this hardens, the mould is again turned
over. The filling is then poured inside and covered with another layer of chocolate to form
the base.
A continuous flow method is far more economical than producing in batches, for example,
because once the equipment settings have been established the line can run cost efficiently.
This production advantage is known as a technical economy of scale. By producing very
large quantities at very low costs per unit, a company like Nestlé is able to offer consumers
good value for money and so remain competitive.

CONCLUSION
Large confectionery companies meet customer requirements with a wide selection of

different types of chocolate products to meet a variety of tastes. A company like Nestlé is
involved at every stage of the production chain. It gets to know as many people as possible
in the supply chain, providing growers with technical advice, advising intermediaries about
quality issues, and of course researching the market to find out what the consumer wants.
Large organizations like Nestlé are able to pass on to us the benefits of economies of scale,
coupled with their experience of producing high quality chocolates over many years. As a
result, we consumers are able to enjoy products built around cocoa beans from a small farm
and transformed by complex production processes into sophisticated products such as
Quality Street, Smarties, Aero, or many other forms of chocolate product.
FUNDAMENTAL CONCEPTS OF MARKETING (2)
Needs, Want and Demand: Needs are basic human requirements. People need food, water
and clothing. These wants become needs when they are directed towards a specific
objective that may specify their need. Demands are specific products backed an ability to
pay.
STP: Segmenting, Targeting and Positioning A marketer can seldom satisfy everybody in
the segment so he begins by segmenting the market by identifying the identifying the
profile and distinct group of buyers. The marketer then studies which segment has the
maximum opportunity .He then targets that Market.
Offerings and Brand: The Intangible value proposition is made physical by offering. A
brand is an offering from a known source

Marketing environment: The marketing environment consists of the task environment
and broad environment. Task environment consists of (1)
o Company
o Supplier
o Distributor
o Dealers
o Target customers
The Broad environment consists of
o Demographic Environment
o Physical environment
o Technological Environment
o Political – Legal Environment
o Socio- Cultural Environment
NICHE ORIENTED COMMUNICATIONS (3)
As the target market is a small segment of consumers, marketing communications are less
costly and more effective. The message could be focused on selective media vehicles.
Premium products and brands can make use of niche media now widely available in India-
star, discovery, sun and other cable TVs. Celebrities could be selected and used for niche
consumers. There is also an option of resorting to direct marketing tools so that an effective
niche base of consumers could be established. A new technique which could be jointly used
by manufacturers of niche products is the videocals. These are video magazines which like
periodicals carry special- interest stories on a specific subject sandwiched with
commercials of niche products and services. The theme of the subject could vary
depending on the products and services figuring in the videocal. A specific aspect of
developing a niche should be that, the company should ensure that the communications do
not give rise to a confused positioning regarding the corporate image of the company.

A typical problem facing a niche marketer is cannibalization due to different items in the
product line. This could be avoided by marketing to multiple niches. A variety of credit
cards by Citibank, different brands of Godrej soap and the different schemes of mutual
funds offered by finance companies are good examples of attempts to minimize
cannibalization.
What Influences consumer Behaviour? (2)
1. Culture: It is the fundamental determinant of persons wants and behaviour

o Social Factors: Consumer Behaviour is affected by reference groups like
Primary groups and Secondary groups; Aspiration Groups and Dissociative
groups; Opinion leader
o Roles and statuses
2. Personal Factors
o Age and stage in life cycle
o Occupation and economic circumstances
o Personality and Self Confidence
o Life Style And Values
What is Brand Equity?
The American Marketing Association defines a brand as “a name, term, sign, symbol, or
design, or combination of them, intended to identify the goods or services of one seller and
to differentiate them from the competitor.
Product Differentiation
It Exists due to
1. Form: Distinction that exits due to the size, shape or physical structure of a product

2. Features: Distinction that exits due to varying basic and supplementary functions
that exists in the products.
3. Performance Quality: Distinction that exits due to varying performance level
4. Conformance Quality: Distinction that due to the exits as buyers expect to have
high conformance
5. Durability: Distinction that exits that due to products expected operating life
6. Reliability: Distinction that exits due to difference in measure of profitability
7. Style: Distinction that exits due to the look and feel of the product
BRAND STRATEGY
The company has come up with consistent, simple and imaginative contents to its category
distribution. Excess manufacturing capacity, pressures by sales force and distributors has
made product line extensions an essential part of company’s strategy. In order to lengthen
its product line it has followed the line stretching technique. The company follows a two
way line stretching technique- down market stretch and up market stretch.
Line Stretching
Down Market Stretch-
o Presence of strong growth opportunities

o Tying up with lower end competitors
o The company may find that middle level market is stagnating
Up Market Stretch-

o Companies try to enter into the high end of the market.
o Position themselves as full-line manufacturers.
o More growth, high margins.
MARKETING IN GLOBAL ENVIRONMENT
Economic Conditions *Stage of Development
*Buying Power of Consumers
*Type of Currency
Political and Legal Considerations *Political Stability
*Laws Limiting Trade
*Laws of Host Nations
Culture and Language *Cultural Influences o Buying Power
*Language Differences
Demographic and Lifestyle *Population Sizes
*Population Distribution
*Socio Economic Status
*Life Styles of foreign Buyers
Ethical Considerations *Impact of Marketing on Culture
*Bribery
*Human Rights

GROWTH STRATEGIES
Market
MARKETPenetration Product
PENENTRATION Development
NEW PRODUCTMarket
DEVELOPMENT Diversification
Development
New product development means- a new brand of car in the market, a new model of TV, a
re-launch of a product, a reduced price version of a brand, or a totally new concept. Experts
identified the following categories of new product
1. Products new to the company but not new to the market.
2. Product that are significantly different from the existing ones but are good
replacements. Example: CD’s in the place of cassettes.
3. Innovative product. Example: microwave oven.
The new product come from the cutting edge of technology and orderly process of new
product development, and experienced persons well versed in product innovations. A
combination of observations made by experts on projects, firms and the connected theory
suggest some rules for organizations. These rules can be applied to new products of
different sizes, values and technological complexity. The rules are as follows-
1. Make sure that the project is well organized. There must not be an over crowding of
persons.
2. Having a precise and comprehensive definition of the product.
3. Efficient execution of new product program. The product development manager
must ensure that efficient market and technical assessments have been carried out to
avoid inept execution.
4. Detailed market study and research make efficient execution of the marketing
program possible.

5. Economizing on advertisements, sales promotion, personal selling, transportation
costs, stocks etc. can prove to be fatal.
6. Technologically weak product is most likely to fail. A quick technical assessment of
a new product needs to be done.
7. Efficient trial production should be carried out. Managements need to take a lot of
care and effort in developing the physical product.
8. Marketing of company resources and the needs of the project.
9. Familiar products should be chosen for development.
10. Availability of an attractive market for the new product.
11. Finally the product development manager needs to choose a less competitive
intensive segment. Launching a new product in an aggressively competitive market
can be frustrating, especially if it is price intensive. The increase in the intensity if
competition should be forecast correctly at the time of selecting the target segment.
Integration of the Existing Resources:

The basis of new product development for most firms today should be “to maintain core
business with minimum reinvestment” i.e., to use what you already have. Here are nine
different combinations that occur due to changes in the market and technology.
TECHNOLOGY
NO CHANGE IMPROVEMENT NEW
NO CHANGE 1. Product re- 2. Product re- 3. Product
launch formulation replacement
M
A
R STRENGTHENED 4. Product 5. Product 6. Product
K remerchandising augmentation diversification
E
T NEW 7. New usage 8. Extensive 9. Extensive
differentiation diversification
Setting up an organizational form for new product development involves-

1. Who is to be responsible for NPD?
2. What tasks are to be accomplished?
3. How are the tasks to be accomplished?
The standard NPD process model comprises of the following stages:

 Idea generation

 Idea screening
 Concept development and testing
 Marketing and strategy development
 Business analysis
 Product development
 Market testing and commercialization.
There is also a need of financial calculations so , the total economic analysis or a

complete new product business plan should include estimates from marketing, production
and accounting personnel.
Test marketing: It comprises of investigating into buyers characteristics, trial and usage
rates, purchase frequencies, product applications response to an altered marketing mix,
trade response etc.
The launch cycle: this cycle contains four phases- pre launch, announcements, beach-
head and early growth.
Pre-launch involves-
1. Activities like developing marketing organizational and sales force, hiring an
advertising agency.
2. Building a network for service comprising locations, facilities, equipments, parts
and personnel.
3. Pre- announcements or press conference.
4. Stocking product where customer will want it.
Announcement- the new item is put on view for public, in trade or road show or press
conference is called.
Beach-head- this is the climax of new product development. Its objective is to induce trial
and repeat purchase.
Early growth involves activities like-

1. Product quality improvement.

2. Pressure on price.
3. Price cost.
4. New segment and,
Opportunities and Threats involved in a project or in a business venture. It involves

specifying the objective of the business venture or project and identifying the internal and
external factors that are favourable and unfavourable to achieving that objective. The
technique is credited to Albert Humphrey, who led a research project at Stanford
University in the 1960s and 1970s using data from Fortune 500 companies.
If SWOT analysis does not start with defining a desired end state or objective, it runs the
risk of being useless. A SWOT analysis may be incorporated into the strategic planning
model. An example of a strategic planning technique that incorporates an objective-driven
SWOT analysis is SCAN analysis. Strategic Planning, including SWOT and SCAN
analysis, has been the subject of much research
 Strengths: attributes of the organization those are helpful in achieving the

objective.
 Weaknesses: attributes of the organization those are harmful in achieving
the objective.
 Opportunities: external conditions those are helpful in achieving the
objective.
 Threats: external conditions those are harmful in achieving the objective.
Identification of SWOT is essential because subsequent steps in the process of planning for
achievement of the selected objective are to be derived from the SWOT.
First, the decision makers have to determine whether the objective is attainable, given the
SWOT. If the objective is NOT attainable a different objective must be selected and the
process repeated.

DIFFERENT PRODUCT LINE
1. Changing consumers, needs

2. Reach out to a larger consumer base.
3. Pre-empt competition with regard to specific niches.
4. Need to have a complete product line to offer a value added bid.
5. Prevention of loyal customers from switching over to a competitive brand.
6. To gain short-term advantage before the company launches several
competitive models in the line to make itself competitive.
7. To add to product line by offering a technologically advanced version of the
product.
8. To enhance the image of the brand.
9. To expand the market and find new uses for an existing product.
10. To accommodate new forms of the product in response to the value based
consumer needs.

.
BCG Growth-Share Matrix
Companies that are large enough to be organized into strategic business units face the
challenge of allocating resources among those units. In the early 1970's the Boston
Consulting Group developed a model for managing a portfolio of different business units
(or major product lines). The BCG growth-share matrix displays the various business
units on a graph of the market growth rate vs. market share relative to competitors:
BCG Growth-Share Matrix
Resources are allocated to business units according to where they are situated on
the grid as follows:
 Cash Cow - a business unit that has a large market share in a mature, slow growing
industry. Cash cows require little investment and generate cash that can be used to
invest in other business units.
 Star - a business unit that has a large market share in a fast growing industry. Stars
may generate cash, but because the market is growing rapidly they require
investment to maintain their lead. If successful, a star will become a cash cow when
its industry matures.
 Question Mark (or Problem Child) - a business unit that has a small market share
in a high growth market. These business units require resources to grow market
share, but whether they will succeed and become stars is unknown.

 Dog - a business unit that has a small market share in a mature industry. A dog may
not require substantial cash, but it ties up capital that could better be deployed
elsewhere. Unless a dog has some other strategic purpose, it should be liquidated if
there is little prospect for it to gain market share.
The BCG matrix provides a framework for allocating resources among different business
units and allows one to compare many business units at a glance. However, the approach
has received some negative criticism for the following reasons:
 The link between market share and profitability is questionable since increasing
market share can be very expensive.
 The approach may overemphasize high growth, since it ignores the potential of
declining markets.
 The model considers market growth rate to be a given. In practice the firm may be
able to grow the market.
Product range of Nestle Chococlates

KIT KAT
 NESTLE KIT KAT has a unique finger format with a ‘breaking' ritual attached to
it.
 NESTLE KIT KAT is one of the most successful brands in the world and every
year over 12 billion NESTLÃ
KIT KAT LITE
New KIT KAT Lite, a breakthrough innovation has the same great KIT KAT taste but with
50% less sugar. It is the first of its kind in the Nestle world and provides consumers a
choice for a healthier lifestyle. So the next time they want to indulge, they can enjoy KIT
KAT Lite “Do not Think, Just Bite”.
An explosive launch package including a multi-media campaign spanning television,

outdoors, magazines, etc. and consumer contact programs has been put in place to create an
impact. The catchy KIT KAT lite tune can be downloaded by consumers as their mobile

ring tones by sending a SMS to 8243. KIT KAT Lite can also be experienced through a
specially created website www.justbite.com.
Priced at Rs. 7/-, KIT KAT Lite will be available in the 2-finger format. It will be available
in major metros including Delhi, Mumbai, Kolkata, Bangalore, Chennai and Hyderabad.
NESTLE MUNCH:
NESTLE MUNCH is wafer layer covered with delicious Chocó layer. NESTLE MUNCH
is so crisp, light and irresistible that you just can't stop MUNCHing.' NESTLE MUNCH is
the largest selling SKU in the category!
"MUNCH POP CHOC" is a pack of delightful chocolate nibbles - Crispy wafer cubes
covered with delicious chocolayer. There a new & easy way to eat this chocolicious treats -
Just Open Pop & Enjoy!"
NESTLE MILKYBAR is a delicious milky treat which kids love. Relaunched in January
2006 with a Calcium Rich recipe, NESTLE MILKYBAR is a favourite with parents to treat
their kids with.
NESTLE MILKYBAR CHOO is a soft chewy fudge with white chocolayer that kids
love to ‘choo'. NESTLE MILKYBAR CHOO is also available in Strawberry flavour that
promises the fun of a strawberry shake in a MILKYBAR CHOO! Nestlé India
Presentation, Dec 7, 2006
The Milk District is an integral part of delivering high quality nutritional milk
Products to our consumers The Milk District is an integral part of delivering high quality
nutritional milk products to our consumers
Nestle adds value at each step of the milk supply chain…

• Technical assistance to farmers
• Farmer education – Good dairying practices, etc
• Technical assistance to farmers
• Farmer education – Good dairying practices, etc
• Milk Quality Policy

• Expertise, Know how
• Milk Quality Policy
• Expertise, Know how
4 Nestlé Milk Districts
Analysis
Question 1 Analyzed Below

1.1 To show that there is no gender distinction in purpose of purchasing the chocolates.
(Annexure 2: 1.1)
Inferential Analysis
According to the one-way ANOVA analysis, the calculated value of F-statistic is .000511
and the probability value for testing our hypothesis is .999489. Since this probability value
is larger than the level of significance .05. We cannot reject the hypothesis hence we
conclude that the mean value for purpose of purchasing the chocolates are not significantly
different gender wise.
As the variation within the group is very high so F-statistic is less than one .the reason
behind it may be the response error as we considered the appropriate sampling design.
1.2 The purposes of buying chocolates do not so significant difference
According to the one-way ANOVA analysis, the calculated value of F-statistic is 22.31401
and the probability value for testing our hypothesis is .005848. Since this probability value
is less than the level of significance 0.05 and the calculated value is greater than the critical
value so we don’t accept the hypothesis. Therefore it is concluded that the purposes of
buying chocolates shows significant differences.
Implies: The promotion activities are independent of gender but it should be focused on the
purpose of buying i.e. self consumption, family, gifts, others
Question 2

Inferential analysis
The chi test calculated value is 0.142152 and the tabulated value at level of significance .20
is 12.242 . hence the hypothesis that gender wise choice of chocolate is independent from
each other. At 80% confidence level we accept it.
To find out whether Male and female choice of chocolate are independent from each other
or not?
Inferential analysis (Annexure 2)

The Chi test calculated value is 0.142152 and the tabulated value at level of
significance .20 is 12.242. Hence the hypothesis analysis at 80% confidence level shows
that gender wise choice of chocolate is independent from each other.
Implication
Chocolate name plays vital role to become choice of consumer so while prompting a
product the product name should be highlighted rather that the brand name.

Question. 3
To find the relationship between the factors which are influencing the choice of consumer
in their buying of chocolates.(annexure 3)
Inferential analysis
The correlation analysis determines the strength of relationship between two variables.
Here, pack size and taste, price and availability, availability and friends, price and friends
are showing the direct relationship. The coefficient of correlation equals to 1 means almost
the regression line can easily explain 100% variation in one variable. While availability and
taste, price and taste, friends and taste, availability and pack size, price and pack size,
friend and pack size show indirect relationship
Implication:
Considering the relationship between any two parameters (say pack size and taste)
whenever there will be a change in one parameter the related parameter should also vary.
Further the relationship can be determined by fitting the regression line.

Question 5
The average mode value of the given data is 20. Hence, it is conclude that most the
chocolate consumption is weekly or occasionally.

External And Internal Environment of Chocolate
Industry Analysed
Before studying the project in detail we need to identify the external and environment that
affects any the chocolate industry. We identified them as-
 Media: Today media has unprecedented focus on nutrition. There are endless
articles on what to eat and what not too. Media has made consumer aware that high
calorie food is not good for their health. That is why media posses a big challenge
for the chocolates brands.
 Population and demographics trends: the average life expectancy in India is 64.7
years. This aging population is “second lifers” who are health conscious and
therefore are away from the reach of the chocolate brands. Its not that their taste for
chocolate has died so this segment is an opportunity for the chocolate brands.
Globally more than one billion people are overweight. So this oversized population
is another challenge for the chocolate brands.
 More authorities involved under the 2004 WHO global strategy on diet, physical
activity and health. An awareness campaign is launched worldwide against the
obesity, chronic diseases, absence of physical activities. This campaign is an anti
calorie drive.
INTERNAL FACTORS AFFECTING A CHOCOLATE MANUFACTURING

COMPANY:
Cocoa Prices: Cocoa is the main ingredient of any chocolate .It contributes to 45% of the
manufacturing cost and in companies like Cadbury and Nestle it is outsourced.
Research and Development Support : R&D is the life line of any MNC today . In
chocolate industry, company has to understand the taste of the consumer and come up with
flavors which are new and acceptable.
Welfare Economics
After studying the above factors and observing that the above factors have led the
chocolate manufacturers to practice what is known as welfare economics. Welfare

economics analyses individuals with their economic activity, which are the basic unit for
aggregating to social welfare whether of a group or a community, a society. The chocolate
industry has analyzed the consumer behavior and come up with low calorie sweet flavors
of chocolate like kitkat by nestle and perk and perk lite by Cadbury.
Welfare Economics By Cadbury
Cadbury’s commitment to the Environment
They realize that they are responsible for environmental, health and safety management.
They aim to look after the health and safety of our people and minimize the environmental
impact of our business around the world.
Migratory birds stop over at our Bangalore factory
Water is a precious resource. As part of Cadbury India's efforts to continuously increase

water conservation our Bangalore factory has constructed a check dam to store the
rainwater. This dam not only acts as a major ground water replenishing source for the bore
wells in the factories and surrounding community, but is also a stopover location for some
of the migratory birds.
Sarvam Program
With operations around the Pacific Ocean, we responded

immediately to the Asian Tsunami in late 2004. After initial
emergency relief donation we established a Tsunami
Regeneration Programme for essential long- term community
rebuilding.
Nestle’s Contribution to welfare Economics
Safe Drinking Water

Water is a scarce resource. In India, availability of clean drinking water is a major concern
for many communities. Almost 200 million people do not have access to clean drinking
water. Nestlé India is committed to improving the situation and believes that the first step is
to create awareness in the communities around its factories. A key focus area of our

Corporate initiatives is to help provide Clean Drinking Water and educate children in
schools to conserve this scarce resource.
Education and Training

Nestlé supports initiatives to create awareness about the right to education and encourages
the communities around its factories to send their children to school. Nestlé India
employees have developed a special play 'Let Us Go to School' for this purpose. This has
been staged amongst the communities around our factories, and its recordings screened at
smaller gatherings along the milk routes.
The Company also recognizes the active role that village women play in adopting good
dairying practices in dairy farms and regularly conduct special programs that help them
Nestlé India supports local schools, helps in the maintenance of public parks and green
belts, facilitates blood donation camps and health awareness programs. The key messages
of conservation, hygiene, health and wellness are progressively built into the communities
where the Company is present. All these initiatives strengthen the bond between Nestlé
India and the community
CADBURY NESTLE
STRENGTH 1. Strategically planned 1.Strategically planned milk

location of 5 factories. districts
2. Strong brand name like 2.maket lead in wafer
Cadbury dairy milk, five Chocolate category
star and éclairs. 3. Only company with white
3. Rich product mix of chocolate
different flavors of
chocolate.
4. Support from parent
company Cadbury
Schweppes.
WEAKNESS 1. Lack of timely launch of new 1. Though it has seven
brands, unable to capitalize on factories but is unable to
market leader strategies. maintain a even distribution in
the country.
2. Emphasis on promotion of
other confectionary products
under its brand name.
3.Inadeqate product mix
OPPORTUNITY 1. The Indian urban market 1.The Unexplored snacking

where penetration of category

chocolate is low can be 2. The R&D Center at
developed though Gurgaon
affordability and
availability.
2. Using IT to bring
efficiency in logistics and
distribution.
3. capture the wafer coated
chocolate segment with
its brand name.
THREAT 1. Increase in competition. 1.Aggressive new product

From Nestle, Amul, Mars, and strategy being followed by
other exotic chocolate brands. Competitors
2. The company has large
dependency on imported cocoa 2.Threat of other products
beans and cocoa butter which overpowering chocolate line
exposes inherent dependency on
U.S pound sterling. this is
dangerous due to rupee
appreciation
What has made Cadbury successful?
1. It has carved out a distinct role in consumer’s life by marketing itself as an essential part
of celebration in Indian families.
2. It has constantly maintained consumer delight year after year. It has given
consumers consistent value proposition by bringing out special value packages.
BRAND PROMISE
Cadbury promises that it will bring out the delicious the best tasting chocolates under its
brand name and create always create movements of pure magic. Cadbury dairy milk has
encaptured enormous breath of emotions which Indians are best known for. It has
recognized Indian values such as family togetherness (which is incomplete without
wholesome fun). It has also valued individual enjoyment and there by has always stood for
goodness.
To do so Cadbury has followed a mass marketing approach. By mass
marketing Cadbury has engaged in mass production, mass distribution and mass promotion
of its brand. It has led to the largest potential market, low cost and high margins. It has
given its consumer’s flexible market offering as consumers have diffused preference when
it comes to chocolates. Some consumers like the pure taste of chocolate in Cadbury dairy

milk; some want the chocolate to crackle with fruit and nut, roasted almonds, some love
chocolate to be mix with the Indian traditional sweets like Cadbury dairy milk desserts.
Some want Cadbury dairy milk wowie chocolate with Disney characters embossed in it.
The two in one milk chocolate and white chocolate is another preference for the consumers.
Cadbury has recognized these diffused preferences of the consumers and has come up with
innovative and sweet chocolates.
BRAND STRATEGY
its product line it has followed the line stretching technique. The company follows a two
way line stretching technique- down market stretch and up market stretch.
Down Market Stretch- It followed the down market stretch in order to reach the
unexplored mass market by repositioning brands such as perk at a price of mere Rs.10 and
by launch of Cadbury mini perk for mere Rs.2.
Up Market Stretch- the up market strategy is followed by the company when it wishes to
enter the high end of market for more growth, higher margins or simply to position
themselves as full line manufacturers. Such products are premium products and targeted
towards the high end customers. Cadbury temptations is available in five delicious flavour
roast almond coffee, honey apricot, mint crunch, black forest and old jamica. It is the mast
costly chocolate under the Cadbury brand
Cadbury has identified the need of new product development in order to maintain the
market leader position in chocolates. It brought out new to the world product Cadbury
bites. It has also repositioned its product Cadbury five star by additions to the existing
product in form of five star lite, ulta perk. Also tempatations repositioned by reducing its
price from Rs.40 to Rs.35.
Studying the New Product Development by Cadbury : Cadbury Bytes
Market Background:
Cadbury is the market leader in chocolates but was a new entrant in the packaged snacking
category. The company had a loyal child following but snacking was driven by teens and

adults. The Indian palette also showed a distinct preference for salty snacks. Overall brand
Cadbury strengths in the confectionery market were weaknesses in the packaged snacking
market. Snacks were also largely driven by shared consumption vis s avis confectionery
which is largely an impulse individual consumption
Competition
Well entrenched competitors and local unorganized players which are synonymous with
snacking and dominated the market.
The Brand
Cadbury Bytes was a one of a kind snack, in that it was sweet and not salty and had the
irresistible taste of Cadbury chocolate in it. To be positioned effectively as a snack it had to
offer the irresistible taste of Cadbury chocolate in the context of shared snacking
The Brand Objective

Position Cadbury Bytes as the "people magnet" of snacking which led to being creatively
expressed as "Bytes Jahaan Public Wahaan!"
The Results
Cadbury Bytes expands the chocolate category.
Five Star Crunchy
Market Background:
Cadbury is the market leader in the chocolates category, with Cadbury
5 Star being its second largest brand. Cadbury 5 Star which is unique bar of nougat and
caramel enrobed in Cadbury Dairy Milk Chocolate provides one of the most distinctive and
involving chocolate eat experiences. However in recent years the Cadbury 5 Star franchise
was in decline.
Competition
The brand was under threat from other more offerings in the market.

The Brand
Cadbury 5 Star needed to introduce an element of surprise in its eat experience to gain
share among lapsed consumers. To do this the variant Cadbury 5 Star Crunchy was
launched- which still had the richness of caramel, chewiness of nougat but also contained
rice crispies.
The Strategy
The campaign was built around the proposition of an " unexpected surprise" which had a
surprise in every bit. This was creatively expressed as " Naya Five Star Crunchy.. Ab har
bite main Arrey!"
The campaign targeted at youth was executed in a lighthearted vein built around a boy-girl
relationship.
In order to engage youth the campaign was executed acrossTV, radio, internet, outdoor and
print media.
The Results
The brand registered double digit growth post the launch
BRAND STRATEGY

its product line it has followed the line stretching technique.
Down Market Stretch- It followed the down market stretch in order to reach the
unexplored mass market by repositioning Kit Kat again and again by price reductions.
From Rs. 15 To Rs. 12 (Four Finger)
Nestle is not a market leader in chocolates and thus has to depend on new products to
increase its market share. Some of the new products are
1. "MUNCH POP CHOC"

Market Background
Nestle already has nestle munch in the market.

But I had not yet entered the snacking market. Munch Pop Choc was an attempt to enter
this category.
Competition
The competition in snaking category is from players like Haldiram, but they sell salt snacks
only. So the challenge was to reach the consumers
The Brand
Munch Pop Choc is a pack of delightful chocolatey nibbles - Crispy wafer cubes covered
with delicious chocolayer. There a new & easy way to eat this chocolicious treats - Just
Open Pop & Enjoy!"
The Branding Statergy
The product was positioned as a downward line extension. The Target was teenagers and
Adult Impulse snackers.It was Positioned Using Personality endorsement by Rani
Mukherjee On TV across the channels
2. NESTLÉ MILKYBAR CHOO

Market Background
Milkybar is an existing product line under Nestle Chocolates. Milkybar Choo is an

extention to the this product line.
Competition Competition is not clear and defined as it is new to te world prodoct – white
chocolate paste that can be chewed.
The Brand
Milky Bar Choo is a soft chewy fudge with white chocolayer that kids love to ‘choo'.
NESTLÉ MILKYBAR CHOO is also available in Strawberry flavour that promises
the fun of a strawberry shake in a MILKYBAR CHOO!
Limitations
 Open ended questions were asked in the questionnaires. Analyzing these questions
would not require any quantitative statistical analysis. Hence the analysis could be
biased.

 Also if vast variations are seen in the tastes and preferences in the tier II and tier I
cities then analysis might be affected.
 Choice of the consumers is biased since the research was carried out during the
Diwali festival season, hence the choice of the customers could be biased.
 Due to reasons like shortage of time, availability of adequate resources this research
could not give accurate picture about the opportunities and threats that could come
in the brands’ way, but this study can be helpful in pointing the areas where the
brands should concentrate and go for further research.
 The sample size in the survey was about 100 customers, which was comparatively
small to the total number of existing chocolate customers. To get the better image
among the customers, this research could be carried on further by increasing the
sample size.
 With so much of competition in the market it is difficult to make predictions about

the future
market trends.
 Some of the respondents were not willing to give certain information because of
their own personal reasons.
 Due to non-relevance of certain factors samples had to be rejected.
 Inter willing customers sometime become difficult since they were in hurry.
Conclusion
The present study comes to the floor with the revelations having exciting and full of
curiosity determinants in relation to the specified objectives to identify the reasons which
makes customers buy Cadbury chocolates over Nestle Chocolates and to understand
customer Brand knowledge with regard to chocolates . As the study has been conducted, in
the context of Indian customers (where interviewed customers are from seven different

locations in North India), the investigation perspectives have been thrown, conditioning the
specified motives of Indian people, putting aside the motives outside India.
The following are the conclusion that have been drawn after analysing the data -
 The main motive behind the purchase of the chocolate for both the male as well as
the female is self-consumption. It is being observed that there is similarity between
the objective of purchase in both the genders is use for self rather than other
purposes like gifts , friends etc
 The purchase of the chocolate is highly influenced by the brand to which it belongs.
people identify Cadbury’s with dairy milk so even that feature
 The basic attribute that leads to the purchase of a particular chocolate is the taste.
People were found more sensitive towards taste as an important factor
 There is lot of awareness about the product line among the consumers as compared
to that of nestle.
 The women are frequent purchasers of the chocolate as compared to that of the
male. There is also significant difference in the manner of purchase in terms of
time between male and female.
 The most important conclusion that we can draw is that nestle proves to be a low in
demand product to that compared with Cadbury’s chocolate.
Recommendations
1) Nestle needs to be more specific of every product promotion rather then promoting
just few product lines like Maggi and coffee.
2) The premium chocolate segment which consists of chocolates like temptations etc
remains untapped.

3) It should go for aggressive selling in festive seasons especially in a country like
India.
4) It should pay importance to better packaging and looks.
5) It needs a stronger and more convincing brand ambassador to fight Cadburys
Amitabh Bachchan.
6) Its needs to generate more ads for its lost products like Classic, Crunch, and Milky
Bar etc.
7) Nestle lacks aggressive selling and promotion techniques for its new products like
Fruit N Nut unlike Dairy Milk which tries to create a position and demand for each
and every of its products.
8) The distribution channels need to be reallocated and a country wide presence needs
to be made
9) It needs to channelise more resources towards event sponsorships and other
promotional techniques for its chocolates like it does for other products like coffee.
10) Small retailers and dealers need to be targeted and steps should be taken to
negotiate deals with them so that they can give more shelf preference to nestle
chocolates over the major players like Cadbury.
11) It needs to tab Indian values like sharing and family consumption over
individualism as done by Cadbury.
12) It needs to touch the emotional Indian mindset as done beautifully by Cadbury
which shall help build loyalty also.
13) Nestle should follow market development policy that is it must increase its
customer base and new products.
14) Nestle needs to be more specific about its chocolate product strategy and pay more
importance then giving it a step product treatment.
Annexure
To show that there is no gender distinction in purpose of purchasing the chocolates.

Chart 1.
ANOVA TABLE of 1.1
ANOVA: Single Factor
SUMMARY
Groups Sum Average Variance
MALE 51 12.75 80.91667

FEMALE 50 12.5 123
ANOVA
Source of
Variation df MS F P-value F crit
Between Groups 2 0.0625 0.000511 0.999489 5.786135
Within Groups 5 122.35

Total 7
ANOVA Table of 1.2
Anova: Single Factor
SUMMARY
Groups Count Sum Average Variance
Self
Consumption 2 52 26 8
Family 2 26 13 0
Gifts 2 17 8.5 24.5
Others 2 6 3 2
ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 577.375 3 192.4583 22.31401 0.005848 6.591382
Within Groups 34.5 4 8.625

Total 611.875 7
To find out whether Male and female choice of chocolate are independent from each
other or not?

Chart 2 Normal Table of 2
Question No.3
To find the
relationship
between the factors which are influencing the choice of consumer in their buying of
chocolates?
Correlation Table for 3

Pack
Taste size Availability Price Friends
Taste 1
Pack size 1 1
Availability -1 -1 1
Price -1 -1 1 1
Friends -1 -1 1 1 1

Questionnaire
Age
5- 13 14-20 21-27 28-35 36-45 46 & above
Gender: Male Female
Place:
1) You buy chocolates mostly for:
Self consumption Family Gifts Others (________)
2) Rank the following chocolates on the basis of your preference:
3) Why do you prefer the above mentioned chocklates? ( one or more options )
Taste Pack size Availability Price Friends’ influence
4) Which brand/label do the following chocolates belong to?
Crackle
Kit kat
Dairy milk
Perk
Munch
Temptation
5 star
Bar one
Milky bar
Crunch

5) How often do you buy chocolates?
Daily Weekly Monthly Occasionally
6) Do you prefer giving chocolate gift boxes?

yes no
7) If yes, which of the following do you prefer?

i) Nestle selections
ii) Bandhan
iii) Celebrations
iv) Heroes
Out of the above mentioned four, which is most easily available? ______________
8) Rank the following advertisements on the following basis.(1 -4, 1 being the highest
and 4 being the lowest)
Brand Jingle Informative Frequency

ambassador
Kuch metha ho
jaye
Papu paas ho gaya
Kit kat
(have a break have a
kit kat)
Rani Mukherjee
(munch ad)
9) Do controversies involving your favourite brand affect your buying of chocolates?
Yes No
10) How important are the following factors for you?

(Rate 1- 7, 1 being the highest and 7 being the lowest)
Price ___
Taste ___
Company ___
Pack size ___
Packing ___
Availability ___
Calories (ingredients) ___

GRAPH ANALYSIS
Ques1. You buy chocolates mostly for:
Purpose Of Purchase
100% 2 4
90% 5
12
Percentage Of Respondents
80%
70% 13
60% 13
50%
40%
30% 28
24
20%
10%
0%
MALE FEMALE
GENDER
Self Consumption Family Gifts Others
Ques2. Rank the following chocolates on the basis of your preference:
Choice of Chocolate
10 10
10 10
8 9
9 7
8 10
7 6
6
55 7
6 5
Ranks
5
4 3 2
3
2
2 11 1
1 1
0
ch
MALE
t
M t io n
rk
ilk
Da itKa
ne
ar
t
e
un
Nu
sic
Pe
kl
m
yB
ro
a
M
ac
as
K
pt
iry
Ba
tn
Chocolate Brands
ilk
Cr
Cl
m
ui
Te
Fr
MALE FEMALE
Ques3. Why do you prefer the above mentioned chocklates? ( one or more options )
Factors Influencing Choice
100%
3
6 3
90%
1
80% 4 3
2
70% 2
60%
50%
40% 41
29
30%
20%
10%
0%
Male Female
GENDER
Taste Pack size Availability Price Friends

Ques4. Which brand/label do the following chocolates belong to?
Chocolate Brand Awareness

100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Crackle Kit Kat Dairy milk Perk Munch Temptation 5star Bar1 Milkybar Crunch
Chocolate Brands
Male Female
Ques5. How often do you buy chocolates?
Chocolate Consumption (MALES) Chocolate Consumption (FEMALES)
Daily Daily
Occasionaly 7% 23%
Occasionaly
33%
41%
Weekly
47%
Monthly Monthly Weekly
13% 4% 32%
Daily Weekly Monthly Occasionaly Daily Weekly Monthly Occasionaly
Ques6&7. Do you prefer giving chocolate gift boxes? If yes, which of the following do
you prefer?
6%
Nestle Selection
Bandhan
77%
13% Celeberation
Heroes
4%

Ques9. Do controversies involving your favourite brand affect your buying of chocolates?
CONTROVERSIES AFFECTING CHOICE OF CUSTOMER
45%
55%
YES NO
Ques10. How important are the following factors for you?
Rank of Preference
7 77
6
6
5 5 5
4
4 3
33
Ranks
3
3
1 2
22 1
1
0
Price
Taste
Company
Packing
Pack Size
Availability
Calories
MALE
Factors
MALE FEMALE

Bibliography
 Gilber A. Churchil, Jr. J Paul Peter “Marketing – Creating Value For

Customers”;Richar D Irwin INC;1995
 Philip Kotler and Kevin Lane Keller “Marketing Management” ; Pearson
Educational Inc. ; 2006
 S.Ramesh Kumar “ Managing Indian Brands Marketing Concepts and

Stratergies” Vikas Publishing House Pvt. Ltd
 Mukesh Chaturvedi “New Product Development”; Vikas Publishing House

Pvt. Ltd
 Naresh Malhotra “Marketing Research” ; Pearson Publication
 Business line internet edition (Thursday sep 16 2004)
 www.quickmba.com/strategy/matrix/bcg/
 www.wikipedia.org/wiki/Swot_analysis
 www.cadburyindia.com
 www.nestleindia
 www.hinduonnet.com/businessline/catalyst/2001/12/20/stories/
1920f051.htm
 www.prdomain.com/companies/N/Nestle/newsreleases/
200742342246.html

Dokumen - Tips - Cadbury Vs Nestle

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Marketing Project

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 1

An Old Chinese proverb says:

With Warm Regards,

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 2

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 3

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 4

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 5

Introduction to the problem:

Statement of the problem:

Relevance of the problem:

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 6

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 7

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 8

CONFECTIONARY INDUSTRY IN INDIA

The confectionery industry in India is approximately divided into:

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 9

- Peter Brabeck Letmathe, CEO, Nestlé.

Nestlé’s Business Vision

Respected, Trustworthy Food, Nutrition, Health and Wellness Company”

Nestle India’s Business Vision

Nestlé Corporate Business Principles for Farming revolution in India….

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 10

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 11

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 12

Currently Nestle is participating in a process to examine potential problems of forced child

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 13

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 14

PORTFOLIO ANALYSIS OF NESTLE

(Source Financial analysts meet Nov 2006)

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 15

RESEARCH AND DEVELOPMENT ACTIVITIES AT NESTLE

(Source Werner Bauer, Nestlé's Head of Technical, Production and R&D)

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 16

KitKat UK: Have a break...

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 17

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 18

CHANNEL STRATEGY IN THE U.K

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 19

RECOMMENDATION: Key elements in a channel strategy for Rowntree

 Devote more resources in building stronger relationships in the CBCL sector:

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 20

Nestle business break-up

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 21

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 22

Changing consumer trends - Trend of increased consumer spends on consumer durables

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 23

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 24

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 25

Major Achievements of Cadbury

INDIA AMONG CADBURY TOP 12 GLOBAL MARKETS.

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 26

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 27

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 28

Did You Know?

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IBM – Innovative Business Minds, PGDM (RM), BIMTECH 30

Did you know?

In the new millennium, Cadbury Perk moved beyond just owning

IBM – Innovative Business Minds, PGDM (RM), BIMTECH 31

Did you know?

Cadbury Celebrations is available in several assortments: An assortment of chocolates like