CHAPTER:-1

AN INTRODUCTION

INTRODUCTION OF PRODUCT LIFE CYCLE:

All products and services have certain life cycles. The life cycle
refers to the period from the products first launch into the market
unit its final withdrawal and it is spilt up in phases. During this
period significant changes are made in the way that the product is
behaving into market i.e. reflection in respect of sales to the
company that introduced it into the market. Since an increase in
profits is the products life cycle management is very important.
Some companies use strategic planning and others follow the
basic rules of the different life cycle phase that are analyzed later.

The understanding of the products life cycle, can help to

understand and realize when it is time to introduce and withdraw a
product from the market, its position in the market compared to
competitors, and the products success or failure.

For a company to full above and successfully manage a products

life cycle, needs to develop strategies and methodologies, some of
which are discussed later on.

DEFINITION OF PRODUCT LIFE CYCLE:

The period of the time over which an item is developed, brought to
market and eventually removed from the market. First, the idea for
a product undergoes research and development. If the idea is
determined to be feasible and potentially profitable, the product will
be produced successful; its production will grow until the product
becomes widely available. Eventually, demand for the product will
decline and it will become obsolete.

INTRODUCTION ABOUT PRODUCT LIFE CYCLE:

There are five stages in a products life cycle:
Product development stage
Introduction stage
Growth stage
Maturity stage
Decline stage
The location of production depends on the stages of the cycle.

Stage 1: Product development

Product development is the incubation stage of product life cycle.
There are no sales and the firm prepares to introduce the product.
As the product progresses through its life cycle, changes in the
marketing mix usually are required in order to adjust to the
evolving challenges and opportunities.

Stage 2: Introduction
New products are introduced to meet local (i.e., national) needs,
and new products are first exported to similar countries, countries
with similar needs, preference, and incomes. If they also presume
similar evolutionary patterns for all countries, then products are
introduced in the most advance nations.

Stage 3: Growth
A copy product is produced elsewhere and introduced in the home
country (and elsewhere) to capture growth in the home market.
This moves production to other countries, usually on the basis of
cost of production. (E.g., the clones of the early IBM PCs were not
produced in the US.) The period till the maturity stages is known
as the saturation period.

Stage 4: Maturity
The industrial contracts and concentrates the lowest cost
producer wins here. (E.g., the many clones of the PC are made
almost entirely in lowest cost locations.)

Stage 5: Decline
Poor countries constitute the only market for the product.
Therefore almost all declining products are produced in developing
countries.

Note that s particular firm or industry (In a country) stays in a

market by adapting what they make and sell, i.e., by riding the
waves. For E.g., approximately 80% of the revenues of h-p are
from products they did not sell five years ago. The profits go back
to the host old country.

Chapter: -2
Introduction of Cadbury

INRODUCTION OF CADBURY:

GEORAGE CADBURY FOUNDER OF THE TRUST 1839- 1922:

Cadbury is a leading global confectionery company with an
outstanding portfolio, gum and candy brands. They create brands
people love brands like Cadbury, Trident and Halls.

They heritage starts back in 1824 when John Cadbury opened a

shop in Birmingham selling cocoa and chocolate. Since then they
have expanded their business through the world by a programmed
of organic and acquisition led growth. On 7 May 2008, the
separation of their confectionery and Americans Beverages
business was completed creating Cadbury plc with a vision to be
the worlds BIGGEST and BEST confectionery company.

MISSION:
To create and sustain flourishing communities where people
choose to live.
By promoting new social hosing of good quality which
enhances the environment.
By managing housing stock and estates to the highest
standard for all residents.
By encouraging residents to share in decisions affecting their
communities.

VISION:
Promotion of brands carrying mass franchise without
compromise on quality or margins.
Increasing the market depth including rural Indias coverage.
(So far in case of chocolates, rural areas are not covered)
Better product quality and packing.
All around efficient utilization of tangible as well as intangible
assets such as brands and people.
6

 Efficient working capital management.

Depreciation charge to meet the CAPEX needs every year.
Surplus cash so generated in business or return to
stakeholders.

Cadbury values:
They performance driven, values led. Throughout changing times,
their constant values have inspired them to be pioneers in
business and are critical to them core purpose of creating brands
people love.

Performance:
They are passionate about winning. They compete in a tough but
fair way. They are ambitious, hardworking and make the most of
them abilities. They are prepared to take risks and act with speed.

Quality:
They put quality and safety at the heart of all of their activitiestheir

products,

their

people,

their

partnership

and

their

performance.

Respect:
They genuinely care for their business and their colleagues. They
listen, understand and respond. They are open, friendly and
7

welcoming. They embrace new ideas and diverse customs and

cultures.

Integrity:
They always strive to do right thing. Honesty, openness and being
straightforward characterize the way they do business. They have
clear principles and do what they will do.

PROFILE OF CADBURY:

Type

Confectionery

Founder

George Cadbury

Current owner

Cadbury plc

Country of origin

United Kingdom

Introduced 1905 Related brands

Cadbury products

Markets World Website

www.cadbury.co.uk

COMPANY OVERVIEW:

In India, Cadbury began its operations in 1948 by importing

chocolates. After 60 years of existence, it today has five companyowned manufacturing facilities at Thane, Induri (Pune) and
Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh) and
4 sales offices (New Delhi, Mumbai, Kolkata and Chennai). The
corporate office is in Mumbai.

10

Currently Cadbury India operates in four categories viz. Chocolate

Confectionery, Milk Food Drinks, Candy and Gum category. In the
Chocolate Confectionery business, Cadbury has maintained its
undisputed leadership over the years. Some of the key brands are
Cadbury Dairy Milk, 5 Star, Perk, clairs and Celebrations.
Cadbury enjoys a value market share of over 70% - the highest
Cadbury brand share in the world! Cadbury flagship brand
Cadbury Dairy Milk is considered the "gold standard" for
chocolates in India. The pure taste of CDM defines the chocolate
taste for the Indian consumer.

In the Milk Food drinks segment their main product is Bournvita the leading Malted Food Drink (MFD) in the country. Similarly in
the medicated candy category Halls is the undisputed leader.

Since 1965 Cadbury has also pioneered the development of cocoa

cultivation in India. For over two decades, Cadbury have worked
with the Kerala Agriculture University to undertake cocoa research
and released clones, hybrids that improve the cocoa yield.
Cadbury Cocoa team visits farmers and advises them on the
cultivation aspects from planting to harvesting. The company also
conducts farmers meetings & seminars to educate them on Cocoa
cultivation aspects. Their efforts have increased cocoa productivity
and touched the lives of thousands of farmers. Hardly surprising
then that the Cocoa tree is called the Cadbury tree!

11

CADBURY WORLDWIDE:
Cadbury are currently the world's biggest confectionery company
with a number one or number two positions in 20 of the 50 largest
confectionery markets across the globe.

They create chocolate, gum and candy brands people love brands like Cadbury, Trident and Halls.

Cadbury heritage starts back in 1824 when John Cadbury opened

a shop in Birmingham selling cocoa and chocolate. Since then
they have expanded their business throughout the world by a
programmed of organic and acquisition led growth. On 7 May
2008, the separation of Cadbury confectionery and Americas
Beverages businesses was completed creating Cadbury plc with a
vision to be the world's BIGGEST and BEST confectionery
company.

A few facts and figures:

The company make and sell three kinds of confectionery:
chocolate, gum and candy
The company operate in over 60 countries John Cadbury
opened for business in 1824 - making us nearly 200 years
young
The company work with around 35,000 direct and indirect
suppliers
The company employ around 50,000 people

12

 Every day millions of people around the world enjoy Cadbury

brands
23 June 2008

OVERVIEW OF CADBURY INDIA:

Cadbury is a British confectionery company owned by Mondelz
International Inc. and is the industry's second-largest globally
after Mars,

Incorporated With

its

headquarters

in Uxbridge,

London, England, the company operates in more than 50 countries

worldwide.

The company was known as Cadbury Schweppes plc from 1969

2008 until its demerger, in which its global confectionery business
was separated from its US beverage unit (now called "Dr Pepper
Snapple Group"). It was also a constant constituent of the FTSE
100 from the index's 1984 inception until its 2010 Kraft Foods
takeover.

Cadbury India began its operations in India in 1948 by importing

chocolates. It now has manufacturing facilities in Thane, Indri
(Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal
Pradesh)and sales offices in New Delhi, Mumbai, Kolkata and
Chennai. The corporate head office is in Mumbai. Since 1965
Cadbury has also pioneered the development of cocoa cultivation
in India. For over two decades, Cadbury has worked with the
Kerala to undertake cocoa research.
13

Cadbury India:
Founded

19 July 1948

Headequters

Mumbai, India

Key people

Anand Kripalu, managing director

Products

Cadbury dairy milk, 5-star, perk, gems, clairs,

Oreo and Bournvita

Employees

2000

Cadbury was incorporated in India on 19 July 1948. Currently,

Cadbury

India

operates

in

four

categories:

chocolate

confectionery, milk food drinks, beverage and candy & gum

category. Its products include Cadbury Dairy Milk, Bournville, 5Star, Perk, Gems, clairs, Bournvita, Celebrations, Bournville,
Cadbury Dairy Milk Shots, Cadbury Dairy Milk Silk , Halls , Tang
and Oreo.

It is the market leader in the chocolate confectionery business with

a market share of over 70%. The Brand Trust Report, India Study,
2011 published by Trust Research Advisory ranked Cadbury in the
top 100 most trusted brands list. Cadbury India will soon launch
parent Kraft Foods' legendary triangular Swiss chocolate brand
Tolerance, to take on Italian brand Ferrero Rocher in the premium
chocolate market.
14

CHAPTER: - 3
THEORETICAL VIEW

THE PRODUCTS LIFE CYCLE PERIOD USUALLY CONSISTS

OF FIVE MAJOR STEPS OR PHASES:
Product development, product introduction, product growth,
product maturity and finally product decline. These phases exist
and are applicable to all product or service from a certain make of
automobile to a multimillion-dollar lithography tool to a one-cent
capacitor. These phases can be split up into smaller ones
depending on the product and must be considered when a new
product is to be introduced into a market since they dictate the
products sales performance.

15

1. PRODUCT DEVELOPMENT PHASE:

Product development phase begins when a company finds and
develops a new product idea. This involves translating various
pieces of information and incorporating them into a new product. A
product is usually undergoing several changes involving a lot of
money and time during development, before it is exposed to target
customer via test markets. Those products that survive the test
market are then introduced into real marketplace and the
introduction phase of the product begins. During the product
development phase, sales are zero and revenues are negative. It
is the time of spending with absolute no return.

2. INTRODUCTION PHASE:
The introduction phase of a product introduce the product launch
with its requirements to getting it launch in such a way so that it will
have maximum impact at the moment of sale. A good example of
such a launch of Windows XP by Microsoft Corporation.

This period can be described as a money sinkhole compared to

the maturity phase of a product. Large expenditure on promotion
and advertising is common, and quick but costly service
requirements are introduced. A company must be prepared to
spend a lot of money and get only a small proportion of that back.
In this phase distribution arrangements are introduced. Having the
product in every counter is very important and is regarded as an
16

impossible challenge. Some companies avoid this stress by hiring

external

contractors

or

outsourcing

the

entire

distribution

arrangement. This has the benefit of testing an important

marketing tool such as outsourcing.

Pricing is something else for a company to consider during this

phase. Product pricing usually follows one or two well structured
strategies. Early customers will pay a lot for something new and
this will help a bit to minimize that sinkhole that was mentioned
earlier. Later the pricing policy should be more aggressive so that
the product can become competitive. Another strategy is that of a
pre-set price believed to be the right one to maximize sales. This
however demands a very good knowledge of the market and of
what a customer is willing to pay for a newly introduced product.

A successful product introduction phase may also result from

actions taken by the company prior to the introduction of the
product to the market. These actions are included in the
formulation of the marketing strategy. This is accomplished during
product development by the use of market research. Customer
requirements on design, pricing, servicing and packaging are
invaluable to the formation of a product design. A customer can tell
a company what features of the product is appealing and what are
the characteristics that should not appear on the product. He will
describe the ways of how the product will become handy and
useful. So in this way a company will know before its product is
introduced to a market what to expect from the customers and
17

competitors. A marketing mix may also help in terms of defining

the targeted audience during promotion and advertising of the
product in the introduction phase.

3. GROWTH PHASE:
The growth phase offers the satisfaction of seeing the product
take-off in the marketplace. This is the appropriate timing to focus
on increasing the market share. If the product has been introduced
first into the market, (introduction into a virgin1market or into an
existing market) then it is in a position to gain market share
relatively easily. A new growing market alerts the competitions
attention.

The company must show all the products offerings and try to
differentiate them from the competitors ones. A frequent
modification process of the product is an effective policy to
discourage competitors from gaining market share by copying or
offering similar products. Other barriers are licenses and
copyrights, product complexity and low availability of product
components.

Promotion and advertising continues, but not in the extent that was
in the introductory phase and it is oriented to the task of market
leadership and not in raising product awareness. A good practice
is the use of external promotional contractors.

18

This period is the time to develop efficiencies and improve product

availability and service. Cost efficiency and time-to-market and
pricing and discount policy are major factors in gaining customer
confidence. Good coverage in all marketplaces is worthwhile goal
throughout the growth phase.

Managing the growth stage is essential. Companies sometimes

are consuming much more effort into the production process,
overestimating their market position.

Accurate estimations in forecasting customer needs will provide

essential input into production planning process. It is pointless to
increase customer expectations and product demand without
having arranged for relative production capacity. A company must
not make the mistake of over committing. This will result into losing
customers not finding the product on the self.

4. MATURITY PHASE:
When the market becomes saturated with variations of the basic
product, and all competitors are represented in terms of an
alternative product, the maturity phase arrives.

In this phase

market share growth is at the expense of someone elses

business, rather than the growth of the market itself. This period is
the period of the highest returns from the product. A company that
19

has achieved its market share goal enjoys the most profitable
period, while a company that falls behind its market share goal,
must reconsider its marketing positioning into the marketplace.

During this period new brands are introduced even when they
compete with the Companys existing product and model changes
are more frequent (product, brand, and model). This is the time to
extend the products life.

Pricing and discount policies are often changed in relation to the

competition policies i.e. pricing moves up and down accordingly
with the competitors one and sales and coupons are introduced in
the case of consumer products. Promotion and advertising
relocates from the scope of getting new customers, to the scope of
product differentiation in terms of quality and reliability.

The battle of distribution continues using multi distribution

channels. A successful product maturity phase is extended beyond
anyones timely expectations. A good example of this is Tide
washing powder, which has grown old, and it is still growing.

5. DECLINE PHASE:
The decision for withdrawing a product seems to be a complex
task and there a lot of issues to be resolved before with decide to
move it out of the market. Dilemmas such as maintenance, spare
20

part availability, service competitions reaction in filling the market

gap are some issues that increase the complexity of the decision
process to withdraw a product from the market. Often companies
retain a high price policy for the declining products that increase
the profit margin and gradually discourage the few loyal
remaining customers from buying it. Such an example is telegraph
submission over facsimile or email.

Sometimes it is difficult for a company to conceptualize the decline

signals of a product. Usually a product decline is accompanied
with a decline of market sales. Its recognition is sometimes hard to
be realized, since marketing departments are usually too optimistic
due to big product success coming from the maturity phase.

This is the time to start withdrawing variations of the product from

the market that are weak in their market position. This must be
done carefully since it is not often apparent which product variation
brings in the revenues.

The prices must be kept competitive and promotion should be

pulled back at a level that will make the product presence visible
and at the same time retain the loyal customer. Distribution is
narrowed. The basic channel is should be kept efficient but
alternative channels should be abandoned.

21

CHARACTERISTICS OF PLC STAGES:

The four main stages of a product's life cycle and the
accompanying characteristics are

Development stage:
Introduce the product in paper
Target customer
Take small survey on that

Introduction stage:
costs are very high
slow sales volumes to start
little or no competition
demand has to be created
customers have to be prompted to try the product
Makes no money at this stage.

Growth stage:
costs reduced due to economies of scale
sales volume increases significantly
profitability begins to rise
public awareness increases
competition begins to increase with a few new players in
establishing market
increased competition leads to price decreases
22

Maturity stage:
costs are lowered as a result of production volumes
increasing and experience curve effects
sales volume peaks and market saturation is reached
increase in competitors entering the market
prices tend to drop due to the proliferation of competing
products
brand

differentiation

and

feature

diversification

is

emphasized to maintain or increase market share

Industrial profits go down

Decline stage:
costs become counter-optimal
sales volume decline
prices, profitability diminish
profit becomes more a challenge of production/distribution
efficiency than increased sales

Product termination is usually not the end of the business cycle,

only the end of a single entrant within the larger scope of an ongoing business program.

23

CHAPTER:-4
ANAYLSIS VIEW

CADBURY DAIRY MILK:

Cadbury Dairy Milk encapsulates an enormous breath of emotions,

from shared values such as family togetherness, to the personal
values of individual enjoyment. It stands for goodness. A moment
of pure magic!

Cadbury Dairy Milk (CDM) entered the Indian market in 1948, and
since then for consumers across India, the word Cadbury has
become synonymous with chocolate. CDM remains at the top of
the Indian chocolate market not only because of its most delicious,
best tasting chocolate but also because of its memorable
communication.

24

CADBURY DAIRY MILK ADVERTISING:

IN 1994:In the early days, the brand had a huge fan following among kids.
In order to build stronger appeal among older age groups, the
brand re-positioned itself through the classic Real Taste of
Life campaign in 1994. The campaign positioned Cadbury Dairy
Milk as the chocolate that awakened the little child in every grown
up and very soon, both teenagers and adults, were hooked on to
this bar of pure magic.

IN 1998:With the launch of the Rs. 5 pack in 1998, CDM became more
affordable and hence more accessible for the masses. The
ensuing positioning of Khaane Waalon ko khaane ka Bahana
Chhayie made consumption into a joyful, social occasion.

IN 2004:In 2004, the `Kuch Meetha Ho Jaaye campaign was launched,

seeking to increase CDM consumption by making it synonymous
with traditional sweets (Mithai). With Amitabh Bachchan as the
face and voice of the brand, the campaign went on to become a
huge success. People could relate to the commercials that were
aired to promote Cadbury Dairy Milk. How many can forget the
`Pappu Pass Ho Gaya commercial? The country cheered on as
Pappu fell in love in the Pappu Love Test commercial. Then came
25

Miss Paramour and the country celebrated the beauty pageant

with a difference. The Kenya commercial that was aired in 2008
celebrated the spirit of cricket and that of true sportsmanship. In
2009, they aired another commercial under the `Kuch Meetha Ho
Jaaye platform, called the `Pay Day commercial.

IN 2010:In the year 2010, the `Shubh Aarambh campaign was launched,
drawing lines from the traditional Indian custom of having
something

sweet

before

embarking

on

something

new.

With `Shubh Aarambh, Cadbury took the Dairy Milk journey a step
further into the hearts of its million lovers.

IN 2012:With the current campaign Khaane Ke Baad Meethe Mein Kuch

Meetha Ho Jaaye, our aim is to introduce the thought of having
a CDM as a post dinner meetha (dessert).

26

SWOT ANALYSIS OF CADBURY:

STRENGTHS:
Cadbury is the largest global confectionery supplier, with
9.9% of global market share.
High financial strength (Sales turnover 1997, 7971.4 million
and 9.4%)
Strong manufacturing competence, established brand name
and leader in innovation.
Advantages that it is totally focused on chocolate, candy,
chewing gum.

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.

27

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.

THREATS:
Underestimate foreign regulations and incur unexpected
costs.
Threat of entry due to competition growing through
acquisition.
Fail to offer competitively attractive products to foreign
customers.

PRODUCT LIFE CYCLE OF CADBURY DAIRY MILK:

28

INTRODUCTION STAGE:
Cadbury made different types of chocolates and other
products which were sold in several countries around the
world. It first sold its products in United States in 1905.
Cadbury core purpose was creating brands people love. The
core purpose captures the spirit of what we are trying to
achieve as a business.
The pure taste of Cadbury Dairy Milk is the taste most
Indians crave for when they think of Cadbury Dairy Milk.
Cadbury dairy milk is made from real chocolate. Its
ingredients include cocoa butter and there is a glass and half
full cream dairy milk in every 200 grams of Cadbury dairy
milk chocolate, Cadbury buys 65 million liters of fresh milk
each year to make Cadbury dairy milk chocolate.
The company was use price penetration strategy where it
was use low prices strategy to penetrate the market.
However this was being combined with cost plus pricing
since it was have to operate at a profit market. The products
were offered at Rupee 2 per 45 gm size bar.

GROWTH STAGE:
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
29

`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'.
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.
Their packaging style also became changed for Cadbury
dairy milk (CMD) in mentioned above product life cycle
diagram.
Vendor TVCs cut ice among both heavy as well as marginal
user. The strategy helped increase brand penetration
(specially in smaller towns) leading to a brand growth of
around 40%
Position CDM as the chocolate meant for everyone
Chocolate = CDM

MATURITY STAGE:
The `Kuch Meetha Ho Jaaye campaign was launched,
seeking

to

increase CDM consumption

by

making

it

synonymous with traditional sweets (Mithai).

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
30

consumers an exciting reason to keep coming back into the

fun filled world of Cadbury.
A price competitive edge while the distribution strategies will
ensure that the products reach the final consumers.
Chocolate are meant for kids only seen as an indulgence
product. Negative associations:-Too much was bad, bad for
health.
In maturity stages their increasing competition for Cadbury
day by day and therefore they product life cycle came near
maturity stage in diagram their main competition for Cadbury
dairy milk chocolate was Nestle, Parle etc.
And also in the product size goes decrease leads to
dissatisfaction of chocolate in consumer mind they divert
towards other chocolate brands.

CADBURY AND THE WORM CONTROVERSY:

The discovery of worms in some samples of Cadburys Chocolate
in early October 2003 created one of the biggest controversies in
India against a Multi National reputed for being a benchmark of
QUALITY.

The controversy created an deep adverse impact on the company

with their sales not only drastically dipping down, but at the same
time allowing the competitors to establish their foothold and taking
maximum advantage of Cadburys misfortune.

31

The controversy, and the adverse publicity received in several

countries, set back its plan of outsourcing model which would have
resulted in significant revenue generation, several months back.
The "worms controversy" came at the worst time.the next few
months were the peak season of Diwali, Eid & Christmas. Cadbury
sells almost 1,000 tones of chocolates during Diwali. In that year,
the sales during festival season dropped by 30 per cent. The
company saw its value share melt from 73 per cent in October
2003 to 69.4 per cent in January 2004. In May, however, it inched
up to 71 per cent. CDM sales volumes declined from 68 per cent in
October 03 to 64 per cent in January 2004.

Clearly, the worm controversy took a toll on Cadbury's bottom-line.

For the year ended December 2003, its net profit fell 37 per cent to
Rs 45.6 core (Rs 456 million) as compared with a 21 per cent
increase in the previous year.

However, Cadburys reiterated that all through the 55 years of

leadership in India that it has remained synonymous with
chocolates and has remained committed to high quality and
consumer satisfaction.

32

DECLINE STAGE:
C a db u r y dai r y m i l k d ec l i n e d ue t o t h at w o rm s
i s s ue w as h a p pe n i n 2 0 03 .
The product will be offered in 45 gm packages, 100 gm and
200 gm packages. These will be the most important sized
packages that the product will be sold in. it will be sold in
whole sale and retail.

CABDBURYS FIGHT-BACK:
'Project Vishwas'
Steps to ensure quality & regain the confidence

'Project Vishwas, a plan involving distribution and retail channels

to ensure the quality of its products.
The company's team of quality control managers, along with
around 300 sales staff, checked over 50,000 retail outlets in
Maharashtra and replaced all questionable stocks with immediate
effect.

The Vishwas programmed was intended to build awareness

among retailers on storage requirements for chocolates, provide
assistance in improving storage conditions and strengthen
packaging of the company's range of products.

33

Cadbury reduced the number of chocolates in its bulk packets to

22 bars from the present 60 bars. These helped stockiest display
and sell the products "safely and hygienically ".Nearly 190,000
retailers in key states were covered under this awareness
programmed.

BCG OF CADBURY:
Product is on what stage mean Cadbury Dairy milk chocolate are
Star, Cash Cow, and Question mark Or Dog. And what is the
position of market share of Cadbury dairy milk chocolate.

STAR:
It is high growth, high market share and high profit businesses and
products.

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.

34

QUESTION:
Question marks are low market share, low profit and high growth in
markets and they need heavy investment to hold their market
share.

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.

CADBURY DAIRY MILK STRATEGIES:

Below explain the different strategies used by Cadbury dairy milk
in different stages i.e.

1. PRICING:
Cadbury India enjoys controlling 70% of the confectionery market
in India, of which 30% is directly due to the success of its Dairy
Milk product, which averages sales of around 1 million bars per
day. Cadbury Dairy Milk bars are Cadbury Indias cash cow in the
countrys 4000 tone, Rs. 6.50 billion chocolate markets as such,
has been designated its flagship brand

Part of Cadbury Dairy Milks success lies in its shared history with
Indias identity but also in the fact that it is priced relatively cheaply
and is relatively affordable by the Indian masses. Even its smallest
35

Dairy Milk bar, the 13 gram version, is priced at Rs. 5, affordable

by many middle-class Indians as an occasional treat, but not
affordable for those who buy from the less-than-3-rupee segment
of the market. Its history of operating in the country and its average
level pricing of chocolate bars has made the Cadbury dairy Milk
bar synonymous with high quality, affordable pure milk chocolate
for many Indian customers.

2. CONSUMER SEGMENTS SERVED AND

ADVERTISING/PROMOTIONAL STRATEGIES USED:
Cadbury India Ltd continuously markets Dairy Milk as a relatively
inexpensive treat, towards market segments divided by age,
income, technological knowledge and health-consciousness.

In the 1990s, the company stated promoting the chocolate for the
kid in everyone, in an attempt to appeal to adults as well as
children.

In order to appeal to potential lower-income customers in the

villages of India, further marketing in the form of the Real taste of
life campaign attempted to absorb these customers into its market
share. By using opinion leaders from Bollywood and using
extensive advertising in newspapers, television, magazines and
massive billboards across the country, Cadbury managed to
capture the attention of the nation and cement its market share
superiority in India.
36

Cadburys is trying to tap into the potential market of younger

generation Internet users by offering contests and hosting
competitions online, the most notable being its Pappu Pass Ho
Gaya (Pappu Passed!) joint venture operation with Reliance India
Mobile, a branch of Indias largest network service provider, which
allowed students across the country to check their examination
grades online and celebrate with Cadburys Dairy Milk if they did
well.

Cadbury India continuously develops new versions of its Dairy Milk

brand in order to keep its adult and children consumers satisfied
and interested. Variations include the Fruit & Nut and Crackle &
Roast Almond variations which are meant for snacking, as well as
the Cadbury Dairy Milk Desserts, to cater to the urge for
something sweet after meals. The Cadbury Bournville Dark
Chocolate bar, similar to the Dairy Milk bar, targets the healthconscious market segment of the chocolate market, who wishes to
enjoy the taste of dark chocolate but also its health benefits.
Lastly, Cadbury Dairy Milk Wowie, with Disney characters
embossed on each chocolate square clearly targets the child
segment of its market. Cadburys market segmentation is quite
effective because it allows them to target all three major market
segments: children, adults and technologically-savvy consumers,
but it does not serve those segments of the market that have been
divided by income levels. Although Dairy Milk is affordable to the
upper and middle-income consumers who view it as a mid-priced

37

item, lower income consumers who buy from the less-than-3-rupee

range of chocolate cannot afford to buy Cadbury Dairy Milk
regularly. Cadbury will need to address the needs of this market
segment in order to boost its sales of Dairy Milk.

Indian consumers seem to be satisfied with Cadbury Dairy Milk as

its marketing promotes it as an occasional indulgence, despite
popular opinion that it is a relatively expensive luxury product
(Cadbury India Ltd. Analysts Meet, 1999). This restrained
marketing has allowed the chocolate to slowly become a measure
of quality for many Indians, as Cadbury Dairy Milk is their Gold
Standard for chocolate, where the pure taste of Cadbury Dairy
Milk defines the chocolate taste for the Indian consumer. In fact,
Cadbury Dairy Milk was voted one of the Indias most trusted
brands in a poll conducted in 2005.

3. PRODUCT POSITIONING:
Cadbury India Ltds main sources of competition come from Amul,
Indias own dairy company and Nestle India, Nestls subsidiary in
India. As seen in Appendix B, Cadbury India controls around 70%
of the chocolate market, whereas Amul controls around 2% and
Nestle India around 27%.

Cadburys main strength comes from its ability to market Dairy Milk
products through altering the theme and functionality of the
product as the time demands (Cadbury India Ltd Analysts Meet,
38

1999). Although this has allowed it to control more of the market

than its closest competitors, the reasons for its success may also
lie in the fact that many Indians still view its chocolates as luxury
products (Cadbury India Ltd Analysts Meet, 1999) and not as
household goods. This contradicts Cadburys assertion that its
leadership is maintained by a superior marketing mix (Karvy
Research, n.d.). Cadbury India may have misinterpreted the
popularity of Dairy Milk as a sign that the Indian public has
accepted it as a household product. In fact, the booming economy
and the increasing affluence of the burgeoning middle class (Basu,
2004) has promoted the use of status symbols, where the regular
consumption of so-called luxury chocolates such as Cadbury Dairy
Milk is viewed as fashionable. Despite Amuls longer history in
India, its chocolates are viewed as being local and not luxurious,
justifying a lower price tag. Cadbury India must maintain its current
marketing strategy but slowly start to promote Dairy Milk as a
household good so that consumers spend their rising disposable
incomes on it and boost its sales.

39

5 Stars:

5 Star is special; behind every bar of 5 Star, you will find a

delighted person relishing every bit of it!

With over 40 years of being a favorite of the Indian consumer, 5

Star still continues to be what it was back then a novel concept in
the chocolate world!

Launched in 1969, 5 Star soon became the star of every

refrigerator and pocket; people could not resist biting into one.
What made 5 Star so irresistible was the unique combination of
chocolate, caramel, and nougat that set a new revolution in the
making of chocolates. Never before had people bitten into
something so chocolaty and deliciously chewy at the same time!

40

Walk into any local mart across the country and a golden bevy of
chocolate beauties will arrest your eye! One of the key properties
that Cadbury 5 Star is associated with is its classic Gold color.

5 star Advertising:
5 Star is - a golden classic with a savory caramel filling covered
with hard chocolate. With 5 Star Fruit & Nut, which was launched
in 2008, and 5 Star Crunchy, which was launched in 2005, the fan
following of 5 Star increased manifold. People could choose
between chewy caramel and crispy flakes covered with the good
old chocolate

The current Jo Khaaye Kho Jaaye proposition of 5 Star has been

enlivened by the lovable duo of Ramesh Suresh, who get lost in
the involving taste of 5 Star. The duo has gained huge popularity
through successive media campaigns.

41

PRODUCT LIFE CYCLE OF 5 STARS:

EXPLANATIONS OF CADBURY 5 STAR LIFE CYCLE:

Introduction stage:
Cadbury 5 star introduced in India in 1967 that time their
introduced well in the market.
Their market share was 67% at that time.
5 Star (Ordinary) Ingredients :- Nougat + Caramel 63%,
liquid glucose, sugar, hydrogenated vegetable oils, milk
solids, cocoa solids, invert sugar, soya solids, salt,
emulsifiers

(E471),

edible

gum

(412)

and

acidity

regulator(526), Milk chocolate 37%, sugar, cocoa butter,

emulsifier (E442,E476).

42

 One of the key properties that Cadbury 5 Star was

associated with was its classic Gold color.

Growth stage:
Cadbury is in its growth Stage as its revenue growth was up
12%
And it was help to keep those products developing.
New add-ons are being added to keep the excitement on and
to stay in the market in pace with their competitors.
5 Star was leading knight in the Cadbury portfolio.
5 Star was wrapped in 3mm foil. It is advised to store 5 Star
at lower temperature around 15 degree CC.

Maturity stage:
Cadbury was in its Maturity Stage as its revenue growth was
up 12% and in India it grew up by 23%.
Cadbury 5 stars were on growth stage they take feedback
from consumer for fulfill their requirements.
Consumer feedback suggested that the old 5 star was too
chewy, and people complained of it sticking to their teeth.
It was made softer and melted easily in the mouth
& introduced as 5 star crunchy.
A small kirana shops, big kirana shops, general stores, super
markets etc.
43

Decline stage:
In 2002 the NPAT was Rs. 72.72 cr. but after the worm
controversy in 2003 the NPAT was Rs. 45.6 cr. which was
down by 37%
Competition in market also increased and their competitors
are Amul, Nestl and etc.

RE LAUNCHING:
Cadbury is re-launching the product because the product has
crossed the maturity stage of the product life cycle. Once the
product finishes its maturity level, the sales may start decreasing
so in order to increase the sales by 3-5% and keep the product in
touch with the competition the product is re-launched.

Cadbury 5 Star needed to introduce an element of surprise in its

eating 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 crispiest. In order to engage youth the campaign
was executed across TV, radio, internet, outdoor and print media.
And their prices were 5 Star (Ordinary)-Rs 5, Rs 10, Rs 30, 5 Star
(Crunchy)-Rs 12, 5 Star (Fruit &Nut)-Rs 23.

44

5 STAR JELLY:
As India is emerging market, hence the company forecasts the
sales of the chocolates to grow by 8% after launching 5 Star Jelly
in different flavors.

Weight in gm

Price in Rs.

30 gms

Rs. 10 /-

15 gms

Rs. 5 /-

10 gms

Rs. 2 /-

Ingredients:
Nougat + Caramel 63%, liquid glucose, sugar, hydrogenated
vegetable oils, milk solids, cocoa solids, invert sugar, soya solids,
salt,

emulsifiers

(E471),

edible

gum

(412)

and

acidity

regulator(526), Milk chocolate 37%, sugar, cocoa butter, emulsifier

(E442,E476) + Fruit flavor + Fruit Jelly.

Flavors:
Orange, Mango, Strawberry, Pineapple

Target audience:
Target audience will be small school going kids mostly in rural
areas who will give this Rs. 2 as gift to their entire friend on their
birthday.
45

CHAPTER:-5
CONCLUCSION

Every product has a life cycle and every company focuses

on extending it.
Cadbury five star is present in the market from various
decade so strategies are being made order extend the plc,
so that customers can make more use of products.
Re-packaging, innovating new flavors and promotional
tactics can extend the product life cycle and the product can
remain for a longer time in the market.
Cadbury plc is a confectionery and beverage company with its
headquarters in London, United Kingdom, and is the
world's largest confectionery manufacturer. The firm
was formerly known as "Cadbury Schweppes plc" before
demerging in May 2008, separating its global confectionery
business from its US beverage unit, which has been
renamed Dr Pepper Snapple Group Inc. The company is
listed on the London Stock Exchange and is a constituent of
the FTSE 100 Index. It is headquartered in Mayfair, City
of Westminster, and Greater London.
Cadbury India enjoys controlling 70% of the confectionery
market in India, of which 30% is directly due to the success
of its Dairy Milk product, which averages sales of around 1
million bars per day.
Cadbury Plc by Kraft Foods Inc. two years back has left a
sweet taste in the mouth of Cadbury India Ltd which
46

recorded its highest growth at 30% in 2010 and grew 40% in

the first nine months of 2011.
The Dairy Milk brand alone accounts for approximately 33%
of Cadbury's total chocolate blocks (molded) and bars sales,
making it the number one confectionery brand in the market.
The continued success of the Dairy Milk brand is testament
to the quality of its brand management.

47

BIBLIOGRAPHY AND WEB-BIBLIOGRAPHY:

Bibliography:
Marketing management, 10 th edition, Philip kotler.
Marketing strategy planning & implementation, 3 rd edition,
Orvill c. walker and Harpa w. Boyd.

Web-bibliography:
www.cadbury.com
www.cadbury.co.uk
Wikipedia
www.businessteacher.org.uk
www.scribd.com

48