Escolar Documentos
Profissional Documentos
Cultura Documentos
Submitted by:
Rathod Prashant (91)
Milan Dave(16)
Alpesh Mordiya(52)
Bodra Khodabhai (07)
Submitted to
Batch:-2012-2014
CERTIFICATE
This is to certify that Mr. RATHOD PRASHANT (91) Mr.MILAN DAVE(16), ALPESH
MORADIYA(52) AND BODRA KHODABHAI (07) are the students of MBA 3rd
SEMESTER of S. K. Patel Institute of Management and Computer Studies, have completed
their comprehensive project
INDUSTRY WITH SPECIAL FOCUS ON THE CADBURY INDIA in the year 2013,
in partial fulfillment of curriculum requirements for the award of MBA degree under Kadi
Sarva Vishwa Vidhyalaya University.
Dr.Bhavin Pandya
Director
DECLARATION
we, hereby, declare that the comprehensive project report titled, Brief study of the
chocolate industry with special focus on the Cadbury india is original to the best of our
knowledge and has not been published elsewhere. This is for the purpose of partial
fulfillment of Kadi Sarva Vishwa Vidhyalaya University requirements for the award of the
title of Master of Business Administration, only.
Student Names
Signature
Rathod Prashant
Milan Dave
Alpesh Mordiya
Bodra Khodabhai
ACKNOWLEDGEMENT
PREFACE
The objective of comprehensive project at the end of 3 rd semester of MBA is to develop skill
and knowledge among students to develop a practical bias as a supplement to the theoretical
study of management.
As per the direction of our course structure, we have to undergone for comprehensive project
report to study the whole chocolate industry and I have mainly focus on the Cadbury india.
The globle chocolate industry s growth is increasing very fast . the whole chocolate industry
market is estimated to the $ 50 billion . the Cadbury in the has the 70% of the total chocolate
market.
The great thing of this project report is that it gives us valuable knowledge about the
chocolate industry.
EXECUTIVE SUMMARY
The project report on the chocolate industry has make us aware about whole
chocolate industry and Indian market for the chocolate industry.
In the world market , the chocolate industry has the total market of $50
billion and has showing continuous growth in the market.
In the world market, Ghana , Cte d'Ivoire, Nigeria ,malesiya , brazil are the
main countries that produces the main raw material of the chocolate, cocoa.
Indian market :
Indian people are likes to eat the chocolate but the chocolate consumption in
India is low as compared to the other countries.
The Indian chocolate market is shared by two major company namey Cadbury
and nestle .The Cadbury has the 70% of the total market with products of
dairy milk , beverages , snacks and candy, and nesle has about to 15 % market
share
There are various types of the chocolates available in the market to eat like
milk chocolates , dark chocolates , low fat chocolates etc. The cocoa is the
main raw material of making the chocolate. But there is a scare of the cocoa
in the world.
Experts has warned that the cocoa will be finished in the 2020, so the people
will have no chocolates to eat.
TABLE OF CONTENTS
6
SR.NO
PARTICULARS
PAGE NO.
2.
RESEARCH METHODOLOGY
13
INDUSTRY STUDY
16
20
PRODUCT PROFILE
23
37
COMPANY STUDY
41
59
MARKETING STRATEGIES
75
10
INDUSTRY ANALYSIS
84
11
FINANCIAL ANALYSIS
94
12
97
13
103
CHAPTER 1 :
The main raw material of the chocolate is the cocoa. This material has limited the world due
to fast production and consumption.
GLOBAL SUPPLY
World production of cocoa increased rapidly over the course of the twentieth century,
prompted by rising demand, annual production of less than 125,000 tonnes in the early
twentieth century, annual global output rose to reach a record 3.1 million tonnes in the
2000/01 cocoa year and annual average growth rate of 3.5%.
Cocoa is grown in more than 50 countries world-wide, mainly occurring within ten
degrees latitude of the equator. Production is limited to three main growing areas: West
Africa, Latin America and South East Asia. West Africa is the major producing region,
with a market share of around 69%. The increasing dominance of Cte d'Ivoire as the
worlds largest producer has perhaps been the most spectacular development in the
cocoa industry in recent times. The country now accounts for around 43% of world
output compared to just 15% in 1975/76. Latin America has seen its share dwindle to
just 13%, while Asian production has expanded rapidly since the mid-1970s and now
accounts for around 17% of global output.
Sales
Indonesia; 13%
Cte d'Ivoire; 42%
Nigeria; 7%
Cameroon; 4%
Brazil; 4%
Malaysia; 3%
Others; 13%
Ghana; 15%
Indonesia
10
The growth of Indonesias cocoa production over the past two decades has been remarkable,
rising from just 4,000 tonnes in 1975/76 to around 3,90,000 tonnes in 2005/06 -an annual
average increase of over 20%. The majority of this increase has come from smallholders
producing at very low costs. Smallholders now account for approximately 82% of production,
compared to just 10% in 1980.
In addition, the countrys infrastructure combined with minimal government intervention has
created a highly efficient marketing system that results in growers receiving more than 75%
of the export price.
Brazil
Up until the present century, Latin American producers (namely Mexico, Venezuela,
Ecuador and Brazil) dominated global cocoa production.
However, the arrival of Witches Broom in Brazils main cocoa growing region of Bahia has
resulted in a dramatic decline in production. As Diagram 6 shows, production has declined
from 378,000 tonnes in 1990/91 to an estimated level of 118,700 tonnes in 2005/06 . Witches
Broom appeared in the late 1980s and has spread rapidly to the extent that it is now present in
99% of the regions growing area.
Nigeria
Diagram 7 shows that Nigerian cocoa production declined rapidly from a peak of
300,000 tonnes in 1970/71 to just 100,000 tonnes in 1986/87, due to a combination of
labour shortages and low producer prices. Since liberalisation in 1986, grower prices
rose significantly and production responded, reaching an estimated 205,000 tonnes in
2005/06.
However, the age of the tree stock and the incidence of pests and diseases continues
to be a major constraint to Nigerian production. An estimated 60% of trees are more
than 30 years old, while black pod disease is thought to reduce production levels by as
much as 70% in some areas.
11
Malaysia
The Malaysian cocoa sector has suffered in the 1990s, although some recovery was
apparent towards the end of the decade. Low world prices, higher labour costs and a
change in the relative competitiveness of other crops (particularly oil palm) have
reversed the trend of the 1980s, when production grew at a rapid rate
And in between 1975/76 and 2000/01, production in Malaysia increased from 16,200
tonnes to over 243,000 tonnes, as relatively low production costs and an efficient
marketing structure made cocoa production and extremely profitable venture.
Malaysian cocoa farmers receive a very high share of the international price as a result
of low taxation and an efficient marketing system. Prices in local currency terms were
given a boost by the devaluation of the ringgit during 1997 and 1998. As a result,
grower prices rose from an average of just over 3,000 ringgit per tonne in 1996/97 to
more than 5,000 ringgit per tonne in 1997/98. However, with falling international prices,
grower prices fell back to under 4,000 ringgit per tonne in 2000/01.
12
CHAPTER :2
RESEARCH METHODOLOGY
13
RESEARCH METHODOLOGY :
INTRODUCTION:
Marketing research means the systematic gathering, recording, analyzing of data
about problems relating to the marketing of goods and services
Marketing research has proved an essential tool to make all the need of marketing
management. Marketing research therefore is the scientific process of gathering and
analyzing of marketing information to use the needs of marketing management. But gathering
of observation is must be systematic.
RESEARCH OBJECTIVE :
To make a brief Study the chocolate industry
To know the major players the market.
To analysis the opportunities and problems in the market.
RESEARCH DESIGN:
Research design indicates the use of methods and procedure of conducting research study.
Our Research design is the descriptive research design .
DESCRIPTIVE RESEARCH :Descriptive research is undertaken when the researcher want to know the characteristics of
certain groups. It is s descriptive research design because our project includes point likes
description of the market research or function rests totally on secondary data.
DATA COLLECTION :
The data can be collected by primary and secondary data.We have used the secondary data
for study and analysis . Secondary data has been collected through websites and the
newspaper articles.
14
15
CHAPTER : 3
INDUSTRY STUDY
16
The global chocolate industry has been in a moderate growth trajectory since the last
five years. This growth is largely fuelled by the increased global demand for premium
chocolate. The major developing countries such as China and India are expected to
offer great opportunities to the global chocolate industry; thanks to the use of
chocolate as a functional food.
The chocolate industry has grown to a worldwide industry topping $50 Billion in
retail sales worldwide and continues to show healthy growth. Recently, there has been
an increasing trend towards high quality chocolates such as chocolates with high
cocoa content and or chocolates flavoured with natural flavors and rich spices.
Cocoa is the main raw material for chocolate production and has no other substitute.
Moreover, it can only be grown within 10 degrees (latitudes) of the equator. Due to
this constraint, global production of cocoa is highly concentrated in West African
countries such as Ghana, Cote d'Ivoire, Cameroon, and Nigeria. The cocoa fruit is
harvested twice a year in the form of a main crop and an intermediary crop (also
termed as mid-crop). The main crop is larger than the mid-crop though the relative
size varies according to the country where it is produced.
Vanilla is the most preferred flavour in the chocolate industry. A number of other
important flavours such as mint, coffee, strawberry, and orange are being increasingly
used these days as the consumer is more open to experimenting; however, the
traditional chocolate flavour is still the most sought-after.
A change in government will cause a change in polices.If the interest rates go up it will mean
that there is no capital expenditure and no new jobs will be created which will therefore affect
employment.
If inflation went up/down it would affect the cost of materials and therefore their profit
would increase/decrease accordingly.
If pensions and national insurance went up then Cadburys costs would go up meaning that
their profit would go down.
If taxation went up then it would increase the production costs meaning that their profit
would go down.
If unemployment was high then people will have less money to spend on luxury goods like
chocolate, again their profit would decrease.
If exchange rates changed it would affect the cost of exporting, so a change to the euro
would mean that it was better for exporting
If the national income went down people would have less money to spend on luxury items
such as chocolate.
Social :
If the population size decreased then their would be less people to buy their products
18
If peoples lifestyles changed e.g. more people wanting to get fit and lose weight, then they
will stop eating chocolate and spend there money on gym memberships etc. This means that
Cadburys profits will decrease.
Technological :
An increase in capital expenditure e.g. more up to date equipment would mean that the goods
where produced quicker and cheaper but would also result in job loses.
Research and development- keep developing new products to keep up with competition and
customers needs.
Legal :
More legislation in place to make sure that the workplace is safe and the worker is better
protected. Expensive costs to Cadburys to implement.
Environmental :
Cadburys is built on a river which at one time they would have been able to dispose waste in,
but now that they can't its expensive to dispose of waste properly.
19
CHAPTER : 4
STUDY OF INDIAN MARKET :
multinationals. The market leader is Cadbury with a lion's share of 70 percent. The company's
brands (Five Star, Gems, Eclairs, Perk, Dairy Milk) are leaders their segments. Till the early 90s,
Cadbury had a market share of over 80 percent, but its party was spoiled when Nestle appeared on
the scene. The latter has introduced its international brands in the country (Kit Kat, Lions), and now
commands approximately 15 percent market share. The Gujarat Co-operative Milk Marketing
Federation (GCMMF) and Central Arecanut and Cocoa Manufactures and Processors Co-operative
(CAMPCO) are the other companies operating in this segment. Competition in the segment will get
keener as overseas chocolate giants Hershey's and Mars consolidate to grab a bite of the Indian
chocolate pie.
Per Capita Chocolate Consumption (in lb) of first 15 countries of the world
1 Switzerland 22.36
2 Austria 20.13
3 Ireland 19.47
4 Germany 18.04
5 Norway 17.93
6 Denmark 17.66
7 United Kingdom 17.49
8 Belgium 13.16
9 Australia 12.99
10 Sweden 12.90
11 United States 11.64
12 France 11.38
13 Netherlands 10.56
14 Finland 10.45
15 Italy 6.13
NDIA, stands nowhere even near to these countries when compared in terms of Per Capita
Chocolate Consumption.The Indian chocolate industry is extreusly fragmented with a range
of products catering to a variety of consumers. We have the bars/slabs, jellies, lollipops,
21
toffees and sugar candies. Given India's mammoth population, it comes as a surprise that per
capital chocolate consumption in the country is dismally low - a mere 20 gms per Indian.
Compare this to over 7 kgs in most developed nations.
22
CHAPTER 5 :
PRODUCT PROFILE
23
The origin of chocolate can be traced back to the ancient Maya and Aztec civilizations in
Central Austria, who first enjoyed chocolaty a much-prized spicy drink made from roasted
cocoa beans. Throughout its history, whether as cocoa or drinking chocolate beverage or
confectionary treat, chocolate has been a much sought after food.
The Aztec empire
Chocolate(in the form of a luxury drink) was consumed in large quantities by the Aztecs:
the drink was described as finely ground, soft, foamy, reddish, bitter with chilli water,
aromatic flowers, vanilla and wild bee honey. The dry climate meant the Aztecs were unable
to grow cocoa trees, and had to obtain supplies of cocoa beans from tribute or trade.
Don Cortes
24
The Spanish invaded Mexico in the 16th century, by this tius the Aztecs had created a
powerful empire, and the Spanish armies conquered Mexico. Don Cortes was made captain
general and governor of mexico. When he returned to Spain in1528 he loaded his galleons
with cocoa beans and equipment for making the chocolate drink. Soon chocolate became a
fashionable drink enjoyed by the rich in Spain.
Chocolate across Europe
An Italian traveler, Francesco carletti, was the first to break the Spanish monopoly. He had
visited Central Ausrica and seen how the Indians prepared the cocoa beans and how they
made the drink, and by 1606 chocolate was well established in Italy.
25
Types of Chocolates :
Depending on what is added to (or removed from) the chocolate liquor, different flavors and
varieties of chocolate are produced. Each has a different chemical make-up, the differences
are not solely in the taste.
1. Unsweetened or Baking chocolate is simply cooled, hardened chocolate liquor. It is used
primarily as an ingredient in recipes, or as a garnish.
2. Semi-sweet chocolate is also used primarily in recipes. It has extra cocoa butter and sugar
added. Sweet cooking chocolate is basically the same, with more sugar for taste.
3. Milk chocolate is chocolate liquor with extra cocoa butter, sugar, milk and vanilla added.
26
Categories of Chocolates :
Commercial Chocolates are available in the following forms:
1. Bars or Moulded Chocolates
2. Counts
3. Panned Chocolates (Gems)
4. clairs
5. Assorted Chocolates
Bars or moulded chocolates (like Dairy Milk, Truffle, Amul Milk Chocolate, Nestle
Premium, and Nestle Milky Bar comprise the largest segusnt, accounting for 37% of the total
chocolate market in volume terms. Wafer chocolates such as Kit-Kat and Perk also belong to
this segment. Panned chocolates accounts for 10% of the total chocolate market.
27
Form of Consumption
a. Pure Chocolates
b. Toffees
c. Cakes & Pastries
d. Malted Beverages
e. Wafer Biscuits & Baked Biscuits
f. Chocolate Desserts
Harvesting takes place twice a year from november to january and from may to july.
Once harvested, the pods are opened and their seeds are removed.
Fermentation :
Germination in the cacao bean is killed by the high temperatures produced during the
fermentation process.
After the 5 days process of fermentation, beans are brown and have a better flavor.
Drying :
30
After fermentation, the water present in the beans is dried up to convert them into
chocolate.
Cacao beans are often dried in the sun, which can happen on tarps, mats, or patios.
Humidity in the beans is decreased down to 6-8% for storage and export.
After sorting and bagging, the cocoa beans are then loaded on ships to be delivered to
chocolate manufacturers.
Roasting
31
After being cleaned, the cacao beans pass to the first critical step in flavor development at the
factory. There are two main approaches to roasting: roast the beans for a short time at high
heat, which produces a strong chocolate flavor but eliminates any subtle, floral notes and
risks the developing of charred flavors from over-roasting, or roast the beans for a long time
at low heat, which allows the more delicate flavors to cous through but sacrifices the big,
chocolate flavor.
Winnowing Getting Rid of the Shells :
After roasting, The beans are then usually grounded in a milling or grinding machine
called a melangeur.
A roll refiner or ball mill is used to create heat that melts and distributes the cocoa
butter and to further reduce the particle size of cocoa mass.
Flavor of the chocolate bar depends on the percentage of cocoa butter in the liqour.
With more grinding and the addition of sugar, lecithin, milk or cream powder or milk
crum and spices such as vanilla depending upon the manufacturer, chocolate is made.
32
To make dark chocolate, chocolate liquor, sugar and other minor ingredients such as vanilla
are mixed together and kneaded until well blended.
To make milk chocolate, milk and sugar are mixed together and then blended with chocolate
liquor. This sweet combination of ingredients is stirred until the flavors are thoroughly
combined.
After the chocolate is properly tempered ,Addition of other ingredients are added and
then chocolate is ready for it.
34
35
36
CHAPTER : 6
KEY ISSUES AND CURRENT TRENDS
37
The world will run out of cocoa - the basic ingredient of chocolate - within the next seven
years due to pressures of rising global demand, experts have warned.
Industry experts who met at the British Library in London last week have even predicted the
exact date of the impending meltdown - October 2, 2020.
"There will be a chocolate shortage and there isn't a solution to the problem. Seven years is
what we think we have left," chocolate taster and expert Angus Kennedy said.
Confectionery giants noted that there are just not enough cocoa plantations across the globe
to cater to the soaring chocolate demand,.
They warned that world would need the equivalent of another planet Earth to fill the gap
needed to keep the chocolate industry going.
Industry need another Earth basically if we carry on at this rate. We are destroying the whole
thing. The problem we've got is that much of the space that was used for cocoa plantations is
no longer there.
Chocolate prices may increase over the next few years as cocoa becomes harder to get hold
of. With the result, many big chocolate brands will fill small sized bars with more nuts and
fruit as they are cheaper to produce.
38
Current Trends :
Shift in consumer preferences
Driven by marketing initiatives, consumer
preferences are slowly changing in favour of Chocolate
Channel Trends
Independent retailers are the largest channel but modern
retail is growing faster
CURRENT ISSUES :
39
40
41
CHAPTER : 7
COMPANY STUDY
COMPANY INFORMATION
42
COMPANY NAME
ADDRESS
Cadbury House,
19, Bhulabhai Desai Road,
Mumbai
Maharashtra
400026
C . Y PAL
CHAIRMAN
CONTACT NUMBER
Tel: 022-40073100
Fax: 022-23521698
Email: parveen.vasaigara@csplc.com
WEBSITE
Website: http://www.cadburyindia.com
GROUP
MNC
43
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, clairs, Celebrations, Temptations, and Gems. In Milk Food drinks
segment, Cadbury's main product - Bournvita is the leading Malted Food Drink
in
the
country.
Cadbury is the world's largest confectionery company and its origins can be traced back to
1783 when Jacob Schweppes perfected his process for manufacturing carbonated mineral
water in Geneva, Switzerland. In 1824, John Cadbury opened in Birmingham selling cocoa
and chocolate. Cadbury and Schweppes merged in 1969 to form Cadbury Schweppes plc.
Milk chocolate for eating was first made by Cadbury in 1897 by adding milk powder paste to
the dark chocolate recipe of cocoa mass, cocoa butter and sugar. In 1905, Cadbury's top
selling brand, Cadbury Dairy Milk, was launched. By 1913 Dairy Milk had become
Cadbury's best selling line and in the mid twenties Cadbury's Dairy Milk gained its status as
the brand leader. Cadbury India began its operations in 1948 by importing chocolates and
then re-packing them before distribution in the Indian market. Today, Cadbury has five
company-owned manufacturing facilities at Thane, Induri (Pune) and Malanpur (Gwalior),
Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkota
and Chennai). Its corporate office is in Mumbai. Worldwide, Cadbury employs 60,000 people
in over 200 countries.
44
Cadbury's distribution network used to encompasses 2100 distributors and 450,000 retailers.
To avoid cannibalization of its higher priced products from lower priced ones, Cadbury is
setting up two separate distribution channels one for Core business & other for Mass
markets, with different stockists, wholesalers and retailers. But today, Cadbury's distribution
network reaches out to six lakh outlets each for its chocolate & confectionery brands (i.e.
total reaching12 lakh outlets).
The total confectionery market is valued at Rupees 41 billion with a volume turnover of
about 2,23,500 tonnes per annum. The category is largely consumed in urban areas with a
73% skew to urban markets and a 27% to rural markets.
Hard boiled candy accounts for 18%, Eclairs and Toffees accounts for 18%, Gums and Mints
and lozenges are at par and account for 13%. Digestive Candies and Lollipops account for
2.0% share respectively. Overall industry growth is estimated at 23% in the chocolates
segment and sugar confectionery segment has declined by 19%. The Milk Beverages industry
is valued at Rupees 16.1 billion with an annual turnover of approx 63,000 tonnes. As per
Nielsen estimates the industry is growing at 10.1%.
Major Achieveusnts of Cadbury:
Cadbury Dairy Milk & Bournvita have been declared a "Consumer Super brand" for
2006-7 by Super brands 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.
45
CADBURY have been supporting SARVAM (Sri Aurobindo Rural Village Action
Movement) since 2006 to redevelop the two villages of Puthurai and Perambai in the
Villipuram district of Tamil Nadu. The SARVAM project has made a tremendous impact to
the lives of about 1,400 families in areas like education, health, sanitation, housing and
special programs for children, girls, youth, women and elders. their support to SARVAM is
also towards the construction of Sharanam - a learning centre for rural transformative leaders.
Sharanam will conduct training programs and research and aim to create role models and
change agents in the communities.
46
Mondelz Internationals first anniversary was celebrated with great zeal by their colleagues
by lending a hand and leading with their hearts and conducting a host of impactful
volunteering activities across all their locations around the world during the entire month of
October.
In India over 500 employees volunteered, clocking close to 1,500 volunteering hours thus
impacting 3,600 beneficiaries (school children, old age hous and orphanage) through various
activities like sports, nutrition education, kitchen gardening and eye and blood donation
camps.
47
With a view to address child mortality, Cadbury partnered with NGO Save the Children and
targeted 4000 children under the age of 2 and 828 pregnant mothers in 30 villages of Jawhar
and Mokhada blocks in Thane district. The project aims to save and protect the children from
hunger and malnutrition for the first 1000 days of their lives by providing access to basic
maternal, newborn and child health and nutrition services. The project also included
establishing a Nutrition Rehabilitation Center (NRC) where children with Severe Acute
Malnutrition (SAM) are treated & mothers educated
This project included the installation & set up of three E-Learning Centres with 10 computers
each across 3 schools at Induri, Baddi and Malanpur. The project supports teacher and
students computer training and knowledge in English and Maths to over 600 children.
48
iCARE - 2012-13 :
iCARE, an employee volunteering program, inspires employees to invest time, skills and
passion in the areas of education, child/elderly welfare, NGO capacity building, etc.. and
make a difference to the community. The program is active in Mumbai and Delhi and has
impacted 990 beneficiaries across 35 NGOs with over 1,050 hours of employee volunteering
and 80 employees.
49
AWARDS OF CADBURY :
Cadbury India wins the EMVIES 'media Client of the Year' in September 2012.
Cadbury India wins the "Client of the Year" title at the EFFIES 2012.
Ranked 4th amongst India's 50 Most Admired companies by Fortune India.
Dupont Award on Innovative packaging.
Best Suppliers awards (overall & processed foods category) at the Spencer's Best
Supplier Awards.
10 Advertising Awards at Goafest 2012.
Oreo Togetherness mela wins Gold at EEMAX Awards 2012.
Bournvita Quiz Contest wins best kids program at India Telly Awards.
5 Star's 'The Date' film wins Platinum Award at Digiratti 2012.
4 Shopper Insight WINs (India) for H1'12 submitted by Asia Pacific.
Cadbury India Limited won the Client of the Year at the Effies 2011.
Cadbury wins the Gold Standard at the 2011 APPIES Awards.
Cadbury wins a silver trophy at the University of Asia and Pacific (UA&P) Tambuli
Awards.
Cadbury wins Gold at the Asian Marketing Effectiveness Awards 2011.
Cadbury wins 8 Creative Abby Awards at the Goa Fest 2011.
Make-A-Wish Corporate Partner Award 2011.
Cadbury ranked among India's Most Respected Companies 2011.
Cadbury ranked among the Best Companies to Work For 2011.
Cadbury retains AAA rating awarded by CRISIL 2010.
Cadbury wins Effie's Award 2010.
Business units
Their operations are split into seven business units:
50
Connect Playfully with Oreo:Actors Ranbir Kapoor and Karthi introduced as brand
ambassadors for Oreo in India .
Cadbury India to Invest Rs 1000 crores in Phase 1 to set up its largest manufacturing
plant in Asia Pacific in Sri City, Andhra Pradesh .
Cadbury meveils new TVC to announce the launch of Oreo Choco Crmeread.
Cadbury BOURNVILLE gets darker and more mysterious with it's latest TVC, a
sneak peek into the world of BATMAN THE DARK KNIGHT RISES.
52
53
Chennai
54
Delhi
Kolkata
Cadbury Factories :
Thane
Pune
Himachal Pradesh
Gwalior
55
Bangalore
Hyderabad
Cocoa Operations :
Dharapuram
Cadbury India ltd.
Cocoa Operations
Sennakalpalayam
Dalavaipattinam P.O
Dharapuram - 638 672
Tamil Nadu.
NESTLE INDIA
Background
Nestle was started in 1866 by Henri Nestle. It was basically a merger of two companies
namely European Condensed milk factory started by the Anglo-Swiss condensed milk
Company and Henri Nestles Prepared infant cereals Farine lacte.
Its head quarter is based in Vevey, Switzerland.
56
Nestle has over 330000 employees all over the world. Antonio Helio Waszyk is the Chairman
and Managing Director of Nestle.
Nestle India came into existence in 1912.
Its India head office is in Gurgaon, Haryana.
Nestl has been a partner in India's growth for over nine decades now and has built a very
special relationship of trust and commitment with the people of India. The Company's
activities in India have facilitated direct and indirect employment and provides livelihood to
about one million people including farmers, suppliers of packaging materials, services and
other goods.
Nestle is a listed company in the BSE under the Food Processing industry. According to the
official press release by Nestle, its net sales for the 1st quarter of 2012 are 2047.5 Crores.
And its net profit is 275.7 Crores up from 255 crores in the same period in 2011.It shows a
domestic sales growth of 13.7%.
NESLE PRODUCTS :
MILK PRODUCTS AND
PREPARED DISHES
NUTRITION
3. Nestle Milk
4. Maggi Soups
5. Maggi Sauces
5. Nestle Milkmaid
6. Maggi Pazzta
6. Nestle Dahi
7. Nestle Neslac
57
BEVERAGES
CHOCOLATES
1. Nescafe Classic
1. Nestle Kitkat
2. Nestle Milkybar
3. Nestle Bar-One
4. Nescafe Cappuccino
4. Nestle Munch
5. Nestle Eclairs
6. Nestle Polo
Business
Nestle has a presence in the following categories - Baby Food, Milk products, Beverages
(Coffee, malted beverage), Chocolates & confectionery and other processed food products.
Chocolates & Confectionery
Nestle forayed into chocolates & confectionery in 1990 and has cornered a fourth share of the
chocolate market in the country. Chocolates contributes 14% to Nestles turnover. It has
expanded its products range to all segments of the market. In fact, Nestle is the fastest
growing
Company in India.
58
The Kitkat brand is the largest selling chocolate brand in the world. Other brands include
Milky Bar, Marbles, Crunch, Nestle Rich Dark, Bar-One, Munchetc. New launches such as
Nestle Choco Stick and Milky Bar Choowere made at attractive price points to woo new
consumers. The company introduced two new brands, Charge and Crunch, in 1998. The
company has discontinued products Chocostick, as it did not add value to the its portfolio.
Nestle achieved roaring success by grabbing the Rs 5 price point. From Jan Sep 05, Nestle
chocolates witnessed a growth of 14.8per cent.
CHAPTER : 8
59
CADBURYS BRANDS :-
1. CHOCOLATES:
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Cadbury Dairy Milk has been the market leader in the chocolate category for years. And has
participated and been a part of every Indian's moments of happiness, joy and celebration.
Today, Cadbury Dairy Milk alone holds 30% value share of the Indian chocolate market.
In the early 90's, chocolates were seen as 'meant for kids', usually a reward or a bribe for
children.
In the Mid 90's the category was re-defined by the very popular `Real Taste of Life'
campaign, shifting the focus from `just for kids' to the `kid in all of us'. It appealed to the
child in every adult. And Cadbury Dairy Milk became the perfect expression of 'spontaneity'
and 'shared good feelings.
5 STAR:
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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.
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.
PERK :
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With the rise of more value-for-money brands in the wafer chocolate segment, Cadbury Perk
unveiled two new offerings - Perk XL and XXL.
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 advertiseusnt spoke of the irresistible aspect of the brand, with 'Baaki
sab Bhoola de' becoming the new mantra for Cadbury Perk.
CELEBRATIONS:
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Cadbury Celebrations has become a popular brand on occasions such as Diwali, Rakhi and
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.
BOURNVILLE :
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Hailed as Cadburys answer to the emerging market of luxury chocolates, Cadbury unveiled
Bournville the Indian formula for dark chocolate in 2009.
The creative route taken was You don't buy a Bournville you earn it which aptly describes
it as a chocolate meant for consumers with a mature palate.
The campaign has successfully built Bournville with special credentials based on its distinct
rich intense taste, quality ingredients (best Ghanaian Cocoa) and a British heritage
CLAIRS :
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In India, Cadbury Dairy Milk clairs has been the most preferred brand in the clairs
category for years and has always been a favourite with consumers.
clairs advertising over the years has talked about the taste of clairs because of the Cadbury
Dairy Milk chocolate it contains at its center.
GEMS:
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The sheer taste and the fun associated with eating Cadbury Gems and the joy of sharing it
with friends has made the brand a dear companion and a source of nostalgia for consumers.
Early 2006 gave consumers one more reason to celebrate with Cadbury Gems; the launch of
Cadbury Fruity Gems, a fruit flavored variant with a crispy shell outside and white chocolate
inside. Now consumers had not one, but two reasons to enter the 'Masti' world of Cadbury
Gems.
(2) SNACKS:
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OREO :
Launched in India in March 2011 the delicious combination of dark chocolate biscuit and
vanilla cream was first introduced to the world in 1912. That original formula was so perfect
that it has hardly been modified since. Each year more than 7.5 billion Oreo Biscuits are
eaten, making it the worlds No. 1 biscuit. Paired with a glass of milk, it is the perfect snack.
Children across the world teach their parents the fun way to eat Oreo twisting the biscuit
open, licking the cream, and then dunking the biscuit in milk. Its no wonder then, that
families the world over, come together over this tasty snack.
(3) BEVERAGES:
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BOURNVITA :
The brand has been an enduring symbol of mental and physical health ever since it was
launched in 1948. It is hardly surprising then, that Bournvita enjoys a major presence in the
Malt Food market. Given its market share of 17%, Cadbury Bournvita reaches across
hundreds of cities, towns and villages through 3,50,000 outlets in India.
It is a universal truth that mothers attach a lot of emotional importance to nourishment while
bringing up their children. However, children always look out for the tastiest option to make
their daily dose of milk more enjoyable.
Cadbury now offers two options to capture this appeal: Cadbury Bournvita, with its popular
chocolate taste, and its latest offering, Cadbury Bournvita 5 Star Magic, leveraging the rich
chocolate and caramel flavour of Cadbury 5 Star Cadbury Bournvita advertising has moved
with the times to reflect the changing needs of the consumers.
TANG :
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The worlds favorite powdered beverage Tang, is now available in India the delicious and
refreshing flavors of Orange & Lemon. Launched in March 2011, the combination of yummy
taste and micronutrients such as Iron, Vitamin A B & C makes it a favorite with moms. At an
affordable price, mothers are able to make a deliciously refreshing, nutritious and convenient
drink for their kids.
One of our power brands in India, Tang is right on trend as it delivers a winning bundle for
consumers - affordability, convenience, nutrition and great fruit taste! Tang.
Sold in more than 30 countries, Tang, is the latest brand from the Kraft Foods portfolio to
enter the billion dollar brands club.
(4) CANDY:
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HALLS :
Halls was first launched in India in 1968 & soon established itself as a therapeutic candy
competing in the cough lozenge market. Halls has been sold in India as part of the Pfizer &
Warner Lambert networks before it came into the Cadbury fold in 2003 as part of a global
merger with Adams Confectionery.
Cadbury India Limited, Indias leading Confectionery Company today announced the launch
of a new marketing campaign for its leading mints brand Halls. The new TVC revolves
around the theme Thandi Saans Ka Blast to demonstrate the Intense cooling leading to a
feeling of rejuvenation.
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(5) GUMS:
BUBBALOO :
Cadbury India has expanded its confectionary portfolio in 2007 by foraying into the Bubble
gum category with the launch of Bubbaloo Bubblegum- a successful bubblegum brand from
its international portfolio.
Bubbaloo is an innovative soft bubblegum with a centre filled liquid. It is filled with a high
level of a great tasting fruit flavored liquid that floods your mouth instantly.
Bubaloo is currently available in two yummy flavors- Strawberry and Mixed Fruit.
Cadburys multi-award winning campaign - The Real Taste of Life - launched in the
90s attempts to capture the child like spontaneity in every adult. From the old man
offering his wife a Dairy Milk chocolate to the dancing girl in a crowded stadium, all
reflect the impulsiveness and the spontaneity of the child in the adult.
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 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 '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.
-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.
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.
B. CADBURY PERK:
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Cadburys has extended its marketing strategy to the internet space and has launched an
innovative & interactive website www.usethamousnts.com wherein one can experience the
meetha thought via sending of personalized e-greetings to their friends & family.
Cadbury has created a complete 360 degree campaign to involve & engage the TG by
promoting the big thought of Iss Diwali aap kise khush karengey? This integrated
communication strategy will be rolled out to intensify the engagement with the consumers.
The mediums of communication will include television, print, radio, online, and outdoor
activities.
E. CADBURY DAIRY MILK ECLAIRS:
Cadbury Dairy Milk clairs the deliciously creamy caramel filled with a rich Cadbury
Dairy Milk chocolate center recently launched a new TVC with the theme "Chocolate ka
meetha Bomb". The TVC aims to showcase the new and improved Cadbury Dairy Milk
clairs which boasts a greater gush & and a richer chocolaty center. In order to communicate
this, the burning wick and chocolate head explosions has been brought to play.
The 360 marketing campaign, apart from the TVC will also feature outdoors, sampling and
free goodies.Cadbury Dairy Milk clairs Crunch is being supported heavily through a new
TV campaign, coupled with radio in select cities.
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CHAPTER : 9
MARKETING STRATEGIES
Buy Cadburys products worth Rs.3000/- and get 30 any chocolates worth Rs.5 free.
Point-of-purchase displays i.e. product displays and information sheets are useful in reaching
the consumer at the point of purchase and often encourage retailers to support ones brand.
Free goods:
A free goods promotion is a deviation from straight price cut. The promotion offer to trade is
in the form of extra quantity of purchased product free. Free goods deal often encourages
resellers to stock more during the promotion period. For the manufacturer, it is an excellent
promotion because it costs less than it otherwise appears.
E.g.:
Buy Cadburys products worth Rs.3000/- and get 30 any chocolates worth Rs.5 free.
Cadbury's gift packs for the festive months:
Cadbury India has come out with some pretty packing and useful, appropriate gifts for the
festive season. Assorted Cadbury confectionery is packed into different containers and gift
boxes. E.g., a gift packs for Rs 85/- was available in a pretty plastic tray that can be used in
the house. Also available are glass bowls, steel salvers, casserole, etc. Another attractive
container is a beautiful hand-painted jewellery box. Some packs cous with a free gift. For
instance, floating candles, crystal timepiece, electrically operated samai, etc.
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A first for India, Cadbury Perk with Glucose Energy is a new innovation that is aimed to
appeal to consumers taste buds. Targeted at 14-18 year olds, it is a fun treat which combines
energy giving glucose with great taste.
This new offer will be backed by significant advertising created by Ogilvy & Mather
Advertising centered around the theus of Naya Perk with Glucose Energy. An integrated
marketing campaign will be launched to create awareness around the product. The 360degree marketing communication will encompass TV, Outdoor, tie-ups and sampling
activities. Perk with Glucose Energy will offer two pieces in each pack affordably priced at
Rs.5/- for 21 gms. And as singles at Rs.2/- for 7.5 gms. It will be available at all retail outlets
across cities in the country.
Two separate TVCs have been created to capture the audiences interest, the first aimed at the
kids and the other at their mothers.
The communication objective of campaign for mothers is to tell them that Bournvita ++
offers the benefits of nature and science which helps your child to keep going with all the
physically and mentally demanding activities of the day, so that your kid is confident in
whatever he does.
There is a separate TVC for kids which hinges on the same idea- nonstop action from natures
goodness and the power of science. The TVC for kids has a complete video game look & feel
to it and is the first of its kind in this category. This unique treatment has been chosen with
the intent of increasing the brand appeal amongst the kids.
Champs its latest offering for young children at an unique event with tennis ace SaniaMirza
and an excited group of children and their mothers at their corporate office.
BournvitaLil Champs is a specially created nutrition supplement for 2 to 5 year olds with the
goodness of natural ingredients and the power of 20 scientific nutrients. It contains DHA,
which is vital for brain and vision development in the formative years of a child. In addition,
it is also suppleumented with Whey protein concentrate that not only increases the over-all
protein content, but also enhances muscle development and immunity necessary for children.
The core proposition of BournvitaLil Champs is to provide mental alertness and physical
fitness for children in the age group of 2-5 years. This offering has milder cocoa content and
with the great Cadbury Bournvita taste will help children realize their innate potential.
The company has roped in tennis ace SaniaMirza for the brand communication that shows her
transformation from a young toddler to a tennis champ. The new TV commercial will be aired
in the first week of March and other mediums like outdoor, Internet and radio will be
leveraged extensively for brand
Cadbury BournvitaLil Champs will be available in two pack sizes 200 gms priced at
Rs.90/- and 500 gms at Rs.175/- at all modern retail outlets across major cities.
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For the first time in India, Cadbury Bournvita brings the guru &shishya Jodis to quiz it out
on Indias favourite quizzing show 'Bournvita Quiz Contest'.
The contest intends to explore the interesting aspects of 'Confidence' in the young consumer's
life-space. Each episode brings together 2 teams - one teachers team and one students team
to compete on an experience v/s eagerness platform - teacher's experience and student's
eagerness. The teachers are asked questions like 'What's Shahrukh's new hairstyle? & the
students 'Which city in India has the highest crius rate?
mediums changed, channels changed, but the Bournvita Quiz Contest remains to this day, the
longest running quiz show of India. The Bournvita Quiz Contest (BQC) has succeeded in
making quizzing one of the nation's most popular events after one-day cricket. But, more
importantly, BQC had occupied a very special place in the history of Indian education.
The contest opened by inviting schools from across India and Gulf to send in nominations for
students from classes VII and VIII. Initiations were sent to teachers from reputed schools
across the country and were then selected through rounds of personal interviews conducted
by Derek O' Brien.
2.Cadbury Perk presents Zapak Gameplex Premiere League Indias 1st National
Gaming Leagues:
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Mumbai, November 3, 2008: Zapak Digital Entertainment Ltd, Indias largest online
gaming portal, a Reliance ADA Group Venture today launches Indias biggest gaming
tournament Cadbury Perk ZapakGameplex Premiere League. This mega tournament will be
activated in 35 Zapak Gameplexes in cities like Chennai, Bangalore, Jamshedpur, Bhopal,
Bhubaneswar, Cochin, Coimbatore, DehraDun, Hyderabad, Indore, Lucknow, Ludhiana,
Delhi, Ranchi, Mumbai, Secunderabad, Siliguri, Baroda, Trivandrum, Chandigarh, Jaipur,
Ahmedabad, and Pune.
The tournament will showcase worlds most popular games like - Counter Strike, FIFA 08
and Crazy Kart- Worlds Craziest Online Racing Game. This tournament will be a league
based format where gamers across the country will play each other in the most competitive
format ever.
ZapakGameplex will rank & felicitate Indias top 100 gamers in Counter Strike, FIFA 08 and
CrazyKart, along with cash prizes of uptoRs. 5 lakhs to be won.
This event is being promoted by AXN, BIG Fm, and Living Digital along with online media
and Zapak.com themselves. The league will also be promoted extensively across all youth hot
spots by way of Banner and Poster activation. Leaflets announcing tournament also to be
distributed across these hot spots.
3. Cadbury 5 Star: Now lost in Cricket Fever:Brings you the World's Largest Online Cricket League with Zapak.com Mumbai, May 27,
2009: Don't just watch the Cricket League, be a part of it! Cadbury 5 Star along with
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Apart from this winners will also get Kolkata Knight Riders merchandise. There are other
prizes like free downloadable games, Cricket kits, Gameplex coupons, Game Cds etc. This is
a chance for children who love cricket to be a part of an actually cricket league and represent
their city.
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Mumbai, August 27, 2008: After the successful launch of Bournvita Confidence
Academy last year, the innovative reality platform is back with an all new exciting 2008
series premiering on pogo tv.
Bournvita Confidence Academy is a nationwide hunt to unearth talent in young prodigies
aged 12-16. The nationwide search, attracted applications from over one-lack school students
out of which only six young prodigies have been selected to compete with each other in 2008
Bournvita Confidenceacedamy.
Cadbury Bournvita is among the most loved and trusted brands in the country. With the extra
physical and mental energy that Bournvita provides, youngsters have the confidence to take
on the world and actualize their innate potential. Cadburys association with the Confidence
Academy aims to recognize and reward champions who through their achievements embody
the Bournvita brand values.
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Cadbury Bournvita brings together Young Champs from all over the country for an exciting
All India Junior Badminton Tournament being held in Chennai from May 26th -31st. 2007.
The tournament is organized by the Express Shuttle Club and recognized by the Badminton
Association of India. It will feature players from various states in India who will vie for the
top slot in their respective categories.
The various categories: U-1o Singles, U-13 Singles, U-13 Doubles, U-16 Singles, U16 Doubles, U-19 Singles, U-19 Doubles & U-19 Mixed Doubles
Cadbury Bournvita has been an enduring symbol of mental and physical health ever since it
was launched in 1948. It is hardly surprising then, that Bournvita has enjoyed a long
association with sports. In the 1980 Moscow Olympics, Cadbury Bournvita was the official
health drink for the Indian team. In the new millennium, keeping pace with the evolving
mindsets of the new age consumers, Cadbury Bournvita is about arming consumers with
Confidence to take on physical and mental challenges that nobody else can, resulting in one
of the most successful advertising campaigns which is based on 'Real Achievers who have
grown up on Bournvita.
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CHAPTER : 10
INDUSTRY ANALYSIS
B a r g a in
in g
P o w e r
To hf r e a
tCs oonf s u m
seur b s t i
tu te
R iv a lr y
A m o n g
C o m p e
t it o r s
B a r g a in
in g
P o w e r
o f
S u p p ie r
T h re a t
o f
N e w
E n tra n
ts
There is a huge rivalry in the industry because all players are very aggressive to snatch the
market share of each other and this rivalry in the industry make it attractive.The rivalry from
the nesle and amul and from the local players in india ,increase the rivalry in chocolate
industry for Cadbury.
All the other players against Cadbury using heavy marketing strategy for market shere like
advertiseusnt , celebrity endorsement , produt launches in different verities and flaviors.
Competitions is increasing because consumers demand is repidy increasing in the chocolate
industry.
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Cadburys chocolate has the moderate threat from its substitute products. It has placed in the
minds of people in india and it has 70 % of the total market and million of people love it
round the globe.
But there is a various substitutes of the chocolates like nesle , amul and local player parle.
And the chocolate products have the same features and taste and buyers switching cost is
low , therefore there is moderate threat of the substitute for the product of the cadbury.
The confectionery industry has no barrier to entry and this make this industry open to
competition and make it attractive. Hence Cadbury has the high threat of new entrants.
The demand for the chocolate industry is increasing rapidly so it attracts the new comers to
enter in the chocolate market .
In some case , the threat is low , because the chocolate industry requires the strong network
and market awareness as well as high marketing strategy.
Bargaining power of customer are moderate to high. Buyers are extreusly choosy about the
brand and type chocolate they want to eat . health conscious people are ready to buy braded
products and substitutes are available readly and buyers switching cost is low hence it
increase the bargaining power of the consumers . The industry is highly price sensitive and
increase in price or decrease in incous of people will result in decrease in demand for the
product and will affect the brand. When produces have low dependence, distributors have
less bargaining power.
.
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The Cadbury has the modeate bargaining power from its supplier , because there is a large
number of suppliers available in the market. companies are using the backward integration
and focusing on the contracting with farmers.
But the main raw material cocao is available in the African countries and it has estimated that
cocao will be finished in the 2020. So here the bargaining power from the supplier is high.
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Star :
It is high growth, high market share and high profit businesses and products
In the star position Cadburys dairy milk , Cadbury celebrations , 5 star , Eclairs , and
Cadbury bournvita beverage is placed . Cadbury dairy milk s the oldest chocolate in the
Indian market and has placed in the mind of the customers. And other products like
celebrations are highly prefferd by peoples in happy occasions. Bournvita has been
advertised as the mind improving beverages for chinld and younge people .
Cash Cow:
It is low growth, high market share and more revenue generating products and it has high
profit as compare to star. It need less investment to hold their market share because it has
already well established SBUs. It produces and made investment in other products because it
is well stand itself and made other products from their revenue.
In the cash cow , cadburys well established Cadbury gems , Cadbury delight beverage is
placed.
Question marks:
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These products are the low market share, low profit and high growth in markets and they
need heavy investment to hold their market share.
In these category cadburys fruit and nut , Cadbury lite placed that is preferd by the people so
well but it needs heavy investment for promotions and advertisement.
Dog:
Dogs are low growth, low market share, and low profit earning products or we can say that it
is those that almost phased out from market.
In this category , cadburys Cadbury candy halls and gums are placed , thet has relatively
low market share and are generating low profits as compared to other products of the
Cadbury.
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Strengths:
Cadbury is the largest global confectionery supplier, with 9.9% of global market
share.
High financial strength
Strong manufacturing competence, established brand name and leader in innovation.
Advantage that it is totally focused on chocolate, candy, chewing gum, unique
understanding of consumer in these segments.
Successfully grown through its acquisition strategy. Recent acquisitions, including
Adams, 2003, enabled it to expand into important markets like the US market.
. Weaknesses:
The company is dependent on the confectionery and beverage market, whereas other
competitors e.g. Nestle have a more diverse product portfolio, where profits can be
used to invest in other areas of the business and R&D.
Other competitors have greater international experience - Cadbury has traditionally
been strong in Europe. New to the US, possible lack of understanding of the new
emerging markets compared to competitors.
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Opportunities:
New markets. Significant opportunities exist to expand into the emerging markets of
China, Russia, India, where populations are growing, consumer wealth is increasing
and demand for confectionery products is increasing.
The confectionery market is characterized by a high degree of merger and acquisition
activity in recent years. Opportunities exist to increase share through targeted
acquisitions.
Key to survival within the FMCG market is increasing efficiency and reducing costs.
Cadbury Fuel for Growth and cost efficiency programmes seek to bring cost savings
by:
1. Moving production to low cost countries, where raw materials and labour is
cheaper.
2. Reduce internal costs - supply chain efficiency, global sourcing and procurement,
and wise investusnt in R&D.
Innovation is key driver. To respond to changes in consumer tastes and preferences healthier snacks with lower calories need to be developed. R&D and product launches
have led to sugar-free & center filled chewing gum varieties and Cadbury premium
indulgence treat. Low-fat, organic and natural confectionery demand appears strong.
Threats:
Worldwide - there is an increasingly demanding cost environment, particularly for
energy, transport, packaging and sugar. Global supply chain in low cost locations.
Competitive pressures from other branded suppliers (national and global). Aggressive
price and promotion activity by competitors - possible price wars in developed
markets.
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Social changes - Rising obesity and consumers obsession with calories counting.
Nutrition and healthier lifestyles affecting demand for core Cadbury products.
Strength :
1. Diversification: Nestle has a wide product portfolio encompassing baby foods and dairy
products, chocolates and breakfast cereals and food seasoning.
2. Joint ventures: Nestle holds joint ventures with leading businesses like Coca Cola, General
Mills and L'Oreal which allow it to access their technical knowledge to further develop its
own brand.
3. Influencing consumer decisions: With its innovative and attractive advertising campaigns
Nestle is able to influence customer's buying decisions.
4. Established brand across the globe: With an employee base of over 200,000, annual
revenues of more than $120 billion and a presence in more than a 100 countries, Nestle
brings with it a strong brand name and knowledge of different markets all over the world.
Weakness :
1. Storage and transportation problems: Because the Indian food industry is not developed
enough to handle complex storage and transport requireuments, Nestle has a difficult job of
providing product quality at centers far off from the manufacturing base.
2. Complex supply chain management: Nestle has a complex supply chain management and
the main issue for Nestle India is its traceability
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3 The companys exports comprises majorly Nescafe exported to Russia. Owning to the
volatile markets in Russia, the exports of Nestle has faced a setback.
Opportunities :
1. Growing middle class: The growing middle class and the high percentage of youth
population provides an excellent opportunity for Nestle to use its existing range of kiosks in
malls and educational institutes to build a loyal brand following.
2. Urbanization and nuclear families: With the Indian society moving towards a more urban
and nuclear family society, Nestle has huge market for its products like Maggi and Dahi and
other milk products.
Threats :
1. Nestle faces strong competition from many of its competitors.
2. Recently the Government of India has reduced the import duty of food segments. This will
add to the existing competition faced by Nestle.
3. Observing the recent trends consumers spend less on FMCG products. The growth of the
FMCG sector is not as expected in the last few years.
4. The increasing fuel prices will add to the transportation costs of the company. Also the
increasing prices of packaging and manufacturing will add to the burden. The company may
have to burden its consumers with increased costs of its products because of this.
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CHAPTER : 11
FINANCIAL ANALYSIS
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FORMULA:
Net Profit Margin x Total Asset Turnover x Leverage Factor
Years
2009
2008
2007
ROE (%)
35.53
35.69
28.96
Years
2009
2008
2007
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Leverage Analysis :
2.67
2008
2.71
2007
2.40
2009
2008
2007
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CHAPTER : 12
FUTURE OUTLOOK
AND
PROBLEM ANALYSIS
98
99
In the past five years, the chocolate business grown by 14-15% on an average and is
expected to grow further for at least next five years.
100
chocolate industry in India not only in its offering pattern but also for increment in its total
consumption value and size.
101
102
black form. Nestle tried to provide fridges with see-through doors, but was appalled to see its
chocolates sandwiched between dead chicken, butter and vegetables.
Small coolers were provided to retailers to keep the chocolate from melting, but that didn't
quite do the trick.
Electricity costs money and is not provided in a uniform way, so on and off the electricity
goes and the product may suffer sometimes.
3. RAW MATERIALS:
Cocoa is the key raw material and accounts for around 35% of the total material cost
(including packaging) of chocolates. The price of cocoa has been hitting a new high of late.
Cocoa prices are at a near 20-year high at $2358 per ton, up from $900 a year back. India
does not produce cocoa to any noteworthy extent but is a large consumer of chocolates.
Consumption of chocolates and other cocoa-based products, especially among the middle
class, has been growing.
4. TRANSPORTATION:
Chocolate needs to be distributed directly, unlike other FMCG products. 90% of our products
are sold directly to retailers. Building such a direct network in rural areas is a daunting task
since the infrastructure is poor in India in rural areas.
5. THREAT FROM IMPORTED BRANDS:
Free availability of imported brands bought through illegal routes pose a threat to the
domestic chocolate industry. Usually, these imported chocolates taste better than domestic
chocolate due to recipe difference. Hence consumers who are willing to spend a little more,
prefer these imported chocolates.
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However, the premium brands, which come through official channels, do not pose a threat to
the market, as these cater to a small niche market. However there is a lot of dumping from
neighboring countries like Dubai, Nepal, etc of inferior brand of imported chocolates. These
are not only of low quality, but are brought very near to their expiry dates. Most of the cheap
chocolate brands that are available do not meet Indian Food Regulations.
CHAPTER : 13
CONCLUTION AND BIBLIOGRAPHY
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CONCLUSION
The Indian Chocolate Industry is a unique mix with extreme consumption patterns, attitudes,
beliefs, income level and spending. At one hand, we have designer chocolates that are
consumed when priced at even Rs 2500/kg while there are places in India where people have
never even tasted chocolates once.
Understanding the consumer demands and maintaining the quality will be essential.
Companies will have to keep themselves abreast with the developments in other parts of the
world.
Chocolate industry is very fast growth industry in the market.and developing country like
India gives the opportunities to the companies to ecpand the market.though indias
consumption as compared to other countries is low , but growth of the chocolate industry in
India is increasing so fast.
As we compare Cadbury products with some other companys product, the chocolate may
seem to be same as other chocolates existing in the market but it has a distinct taste of its own
and also the main difference is the marketing strategy and the profit margin ensured ,
Cadburys dairy milk product is the oldest chocolate in the india hence it has placed in the
minds of the customers.
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As we know if strong competitors are already exist in the market, it gets really very tough to
enter into the market. Instead of all these if cadbury give value for money product to the
customers, it can definitely compete with the competitors and can draw the positive attitude
of the customer towards the product.
As estimated by the experts , the main raw material of the chocolate cocoa will be finished
within 7 years. Chocolate prices may increase over the next few years as cocoa becomes
harder to get hold of.
With the result, many big chocolate brands will fill small sized bars with more nuts and fruit
as they are cheaper to produce.
They warned that world would need the equivalent of another planet Earth to fill the gap
needed to keep the chocolate industry going.
BIBLIOGRAPHY :
Website :
Google.com
Indiainfoline.com
Wikipedia.com
Cadburyindia.com
Nesleindia.com
Indian express.com
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