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Marketing Project

V/S

Submitted to: Dr.Kartik Dave

IBM Innovative Business Minds, PGDM (RM), BIMTECH

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)

IBM Innovative Business Minds, PGDM (RM), BIMTECH

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 Nestl 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 Cadburys even though it is a much bigger company in terms of size, turnover and product range.

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

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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 Cadburys even though it is a much bigger company in terms of size, turnover and product range. It wouldnt 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 Cadburys 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.

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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, 2127yrs, 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.

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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.

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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:
y y y y y y y

Chocolates Hard-boiled candies clairs & 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%, clairs 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%.

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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
Nestl is a brand in its own right. For consumers, relevance of Nestl as a company comes first of all through contact with products that are branded Nestl. 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 Nestl's." Peter Brabeck Letmathe, CEO, Nestl.

Nestls Business Vision


Respected, Trustworthy Food, Nutrition, Health and Wellness Company

Nestle India s Business Vision


To rapidly build Nestl India as the Respected and Trustworthy leading Food, Nutrition, Health and Wellness Company ensuring long term sustainable and profitable growth

Nestl 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 Nestl manufactured food products and, as a consequence, the Companys business performance. In this context Nestl:

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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 Nestl 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 GDAs and the labeling system. This proved to

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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, Nestl is able to contribute positively to societies across the globe.

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ISSUES IN THE SUPPLY CHAIN

As a major buyer Nestl 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 Nestl (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 Nestl, began in Vevey, and the Nestl 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, Nestl SA (Nestl), 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

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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, wellrecognized brands. In the end, Rowntree was acquired by Nestl 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 Nestl the largest chocolate manufacturer in the world. Analysts felt that Nestl had paid 2.5 billion because of Rowntree's brands, not its past financial performance. Industry observers wondered how Nestl 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 Nestl. In 1905, Nestl merged with AngloSwiss Condensed Milk Company, a manufacturer of milk-based infant food. During World War I, there was a huge demand for dairy products and Nestl capitalized on this opportunity by executing military contracts of various countries productsand Nestl capitalized on this opportunity by executing military contracts of various countries.In 1938 after 8 years of research years of research, Nestl 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 Nestl. The company added many new products. In its effort to expand its operations further, Nestl merged or acquired several companies. In 1947, Nestl expanded into culinary products by merging with Alimentana, a Swiss company that produced and sold Maggi soups, spices and other food products in many IBM Innovative Business Minds, PGDM (RM), BIMTECH 14

countries. In 1950, Nestl 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 Nestl) led to substantial synergies in Nestl'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 Nestl 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)

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Companys Future Strategy (Source financial analysts meet Nov 2006)

RESEARCH AND DEVELOPMENT ACTIVITIES AT NESTLE

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

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NEW PRODUCT DEVELOPMENT (INNOVATION AND RENOVATION) AT NESTLE


Each of Nestl'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 maynt 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 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... their part

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

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 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 cant directly compare products  High brand equity in consumers eyes, as demonstrated by highly successful launches of product extensions such as the orange and mint flavours  KitKats 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 KitKats 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 products recent loss of market share affects available resources and morale

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 High risk associated with 2-finger products 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)  Childrens 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 Foxs 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 KitKats market share (i.e. TimeOut chocolate vs. Have a break)  Competitors can take advantage of KitKats 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-

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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 grocers own labels and new product lines like Time Out Large grocers like Sainsbury and Tesco want Kit Kat minis 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  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  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 IBM Innovative Business Minds, PGDM (RM), BIMTECH 20

Channels

Coverage

Assortments

Locations

Inventory

 Recommend: Increase distribution coverage for the 4-finger category to match Mars, so it can meet the competition head-on and be in the consumers consideration set during the purchase decision  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  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  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 Nestl 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. Nestl'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 Milk Products & nutrition Brands Everyday Dairy Whitener, milk powder, Milkmaid, Milk, CY01 sales 8,159 CY02 sales 8,847 CY03 sales 9,880

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Dahi, Butter, Cerelac, Nestogen % of sales % growth Beverages % of sales % growth Prepared dishes/ cooking aids (Culinary) % of sales % growth Chocolates & confectionery 42.5% 10.6% 5,627 29.3% 14.7% 2,765 43.2% 8.4% 4,894 23.9% -13.0% 3,503 43.4% 11.7% 5,449 23.9% 11.3% 4,094

Nescafe, Milo, Nestea

Maggi (noodles, pickles, soups, sauces)

Munch, KitKat, Bar One, Classic, Choco Stick, MilkyBar Choo, Nestle Fruit & Nut

14.4% 19.6% 2,646

17.1% 26.7% 3,227

18.0% 16.9% 3,366

% of sales % growth Total Sales % growth *(figures in Rs m)

13.8% 21.4% 19,197

15.8% 21.9% 20,470 14.4%

14.8% 4.3% 22,790 6.6%

Strengths Parent support - Nestle India has a strong support from its parent company, which is the worlds largest processed food and beverage company, with a presence in almost every country. The company has access to the parents 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 companys 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.

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

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

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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,

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Kolkota and Chennai). Its corporate office is in Mumbai. Worldwide, Cadbury employs 60,000 people in over 200 countries. Major Achievements of Cadbury
y y y y y

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.

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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 Crme Egg will, in turn, impact on the perception of the parent brand. Similarly the umbrella brand has a strong brand value

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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

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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.

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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.

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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

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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.

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Did you know?


The "Rishte Pakne do" jingle was penned by noted writer Gulzar

TEMPTATIONS
Ever see people hide away their chocolate since they dont 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".

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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, clairs 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 Caf 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

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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 MNCs 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 Nestl play an important role in the supply chain by checking consignments for quality Nestl 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.

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The final stage in the production chain is selling (retailing) to final consumers. Just as Nestl buys in bulk from exporters and suppliers, retailers buy in bulk from Nestl. 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.

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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.

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PRODUCTION

Chocolate production consists of many stages. Farmers are at the start of the production chain.
y

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:
y

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 100c- 150c 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) IBM Innovative Business Minds, PGDM (RM), BIMTECH 38

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:
y

Refining to reduce the size of the particles Conching (stirring) to produce a smooth and glossy chocolate Tempering (heating at 45c 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 Nestl is able to offer consumers good value for money and so remain competitive.

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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 Nestl 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 Nestl 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

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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 Indiastar, 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

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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

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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 companys 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 Stretcho 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 Stretcho 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

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*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 Penetration MARKET


PENENTRATION NEW PRODUCTMarket DEVELOPMENT

Product 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 IBM Innovative Business Minds, PGDM (RM), BIMTECH 44

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: CDs 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 follows1. 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:

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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 NO CHANGE M A R STRENGTHENED 4. Product remerchandising K E T NEW 7. New usage 1. Product relaunch IMPROVEMENT 2. Product reformulation 5. Product augmentation 8. Extensive differentiation NEW 3. Product replacement 6. Product diversification 9. Extensive diversification

Setting up an organizational form for new product development involves1. 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:


y y y y y y y

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.

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The launch cycle : this cycle contains four phases- pre launch, announcements, beachhead and early growth.

Pre-launch involves1. 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 like1. 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 IBM Innovative Business Minds, PGDM (RM), BIMTECH 47

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.

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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

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Resources are allocated to business units according to where they are situated on the grid as follows:
y

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:
y

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


y

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 NESTL

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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 Choc 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! Nestl India
Presentation, Dec 7, 2006

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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 Nestl Milk Districts

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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 dont accept the hypothesis. Therefore it is concluded that the purposes of buying chocolates shows significant differences.

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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.

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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.

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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.

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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

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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 kit- kat by nestle and perk and perk lite by Cadbury.

Welfare Economics By Cadbury Cadburys 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. Nestles 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. Nestl 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

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Corporate initiatives is to help provide Clean Drinking Water and educate children in schools to conserve this scarce resource. Education and Training Nestl supports initiatives to create awareness about the right to education and encourages the communities around its factories to send their children to school. Nestl 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 Nestl 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 Nestl India and the community CADBURY STRENGTH 1. Strategically planned location of 5 factories. 2. Strong brand name like Cadbury dairy milk, five star and clairs. 3. Rich product mix of different flavors of chocolate. 4. Support from parent company Cadbury Schweppes. 1. Lack of timely launch of new brands, unable to capitalize on market leader strategies. NESTLE 1.Strategically planned milk districts 2.maket lead in wafer Chocolate category 3. Only company with white chocolate

WEAKNESS

1. Though it has seven factories but is unable to maintain a even distribution in the country. 2. Emphasis on promotion of other confectionary products under its brand name. 3.Inadeqate product mix

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OPPORTUNITY

1. The Indian urban market where penetration of chocolate is low can be developed though affordability and availability. 2. Using IT to bring efficiency in logistics and distribution. 3. capture the wafer coated chocolate segment with its brand name. 1. Increase in competition. From Nestle, Amul, Mars, and other exotic chocolate brands. 2. The company has large dependency on imported cocoa beans and cocoa butter which exposes inherent dependency on U.S pound sterling. this is dangerous due to rupee appreciation

1.The Unexplored snacking category 2. The R&D Center at Gurgaon

THREAT

1.Aggressive new product strategy being followed by Competitors 2.Threat of other products overpowering chocolate line

What has made Cadbury successful?


1. It has carved out a distinct role in consumers 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

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given its consumers 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 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 companys 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. 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.

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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

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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. B

The Results The brand registered double digit growth post the launch IBM Innovative Business Minds, PGDM (RM), BIMTECH 63

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 companys strategy. In order to lengthen 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 this category. the market.

But I had not yet entered the snacking market. Munch Pop Choc was an attempt to enter

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

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2. NESTL 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'. NESTL MILKYBAR CHOO is also available in Strawberry flavour that promises the fun of a strawberry shake in a MILKYBAR CHOO!

Limitations

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 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

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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 Cadburys 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 Cadburys chocolate.

Recommendations

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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.

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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 MALE FEMALE

Sum 51 50

Average 12.75 12.5

Variance 80.91667 123

ANOVA Source of Variation Between Groups Within Groups Total

df 2 5 7

MS 0.0625 122.35

F 0.000511

P-value 0.999489

F crit 5.786135

ANOVA Table of 1.2


Anova: Single Factor SUMMARY Groups Self Consumption Family Gifts Others

Count 2 2 2 2

Sum 52 26 17 6

Average 26 13 8.5 3

Variance 8 0 24.5 2

ANOVA Source of Variation Between Groups Within Groups Total

SS 577.375 34.5 611.875

df 3 4 7

MS 192.4583 8.625

F 22.31401

P-value 0.005848

F crit 6.591382

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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
Availability Price Friends

Taste

Pack size

Taste
Pack size Availability Price Friends

1 1 -1 -1 -1

1 -1 -1 -1

1 1 1

1 1

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Questionnaire
Age 5- 13 Gender: Male Place: 1) You buy chocolates mostly for: Self consumption Family Gifts Others (________) 14-20 Female 21-27 28-35 36-45 46 & above

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 IBM Innovative Business Minds, PGDM (RM), BIMTECH 71

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) ii) iii) iv) Nestle selections Bandhan Celebrations 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 ambassador Kuch metha ho jaye Papu paas ho gaya Kit kat
(have a break have a kit kat)

Jingle

Informative

Frequency

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 ___ ___ ___ ___ 72

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Packing Availability Calories (ingredients) GRAPH ANALYSIS

___ ___ ___

Ques1. You buy chocolates mostly for:


Purpose Of Purchase
100% 90% Percentage Of Respondents 12 80% 70% 60% 50% 40% 30% 20% 10% 0% MALE GENDER Self Consumption Family Gifts Others FEMALE 24 28 13 13 2 4 5

Ques2. Rank the following chocolates on the basis of your preference:


C
10 9 8 7 6

6 7 2 11 1 1
A E

3 2 1 0

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ss

A E

FE A E

Ques3. Why do you prefer the above mentioned chocklates? ( one or more options )

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te

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Factors Influencing Choice


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Male GENDER Taste Pack size Availability Price Friends Female 29 41 6 4 2 2 3 3 1 3

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?


e su

ee ly
onthly

Ques6&7. Do you prefer giving chocolate gift boxes? If yes, which of the following do you prefer?

IBM Innovative Business Minds, PGDM (RM), BIMTECH

a ly

ee ly

onthly

ccas onaly

Daily

fj

onthly

Weekly

Monthly

Occasionaly

fde h g

l fj k

ccas onaly

ccas onaly

fed

a ly

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e su a ly ee ly

edh g f

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74

6% Nestle Selection 77% Bandhan 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?

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Rank of Preference
7 6 5

77 6 5 3 1 1 4 3 2 33 5

Ranks

4 3 2 2 1 0

Price

Taste

Company

Pack Size

Packing

Availability

Calories

Factors

 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

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MALE

EMALE

MALE

Bibliography

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 www.cadburyindia.com  www.nestleindia  www.hinduonnet.com/businessline/catalyst/2001/12/20/stories/192


0f051.htm

 www.prdomain.com/companies/N/Nestle/newsreleases/ 200742342246. html

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