USING MARKET RESEARCH Business 2000

TO LAUNCH A NEW BRAND millennium edition

Brands play an important role in the confectionery industry. A brand is observing people making purchases. A particular store, for example,
A challenge facing many established companies is to continue to grow a name, mark, or feature, which distinguishes one product from could be chosen and a study made of how many people buy a
and expand. Companies can use two strategies to expand their business. another. A good brand effectively guarantees that it will deliver all particular product.
They can grow organically by updating existing products or introducing of the qualities that the consumer associates with it.
new ones, or they can choose to expand through acquisitions and joint There are two types of market research - quantitative and qualitative.
ventures. Cadbury Ireland has chosen the organic route. Cadbury carries out a systematic process to identify new product
Quantitative research provides numerical data. At the completion of a
ideas, which can be developed and brought to the market.
This case study outlines the background to Cadbury, deals with quantitative project it is possible to say (for example) what proportion or
This process always starts with a market research exercise.
product development and the process used to bring Cadbury’s new percentage of the population fall into different groups – those that want
Snowflake to the marketplace. something, those that would be likely to buy something, those that are in
THE PURPOSE favour of a particular policy or plan, etc. The essence of quantitative
The confectionery market in Ireland was worth £364 million in OF MARKET RESEARCH research is that every respondent is asked the same series of questions.
1999. It is divided into the chocolate and sugar segments with Irish
Quantitative research can be carried out in various ways including face-
people consuming £250 million worth of chocolate each year. Market research is the collection and analysis of data in order to
to-face interviewing, by telephone, by post and self-completion
On average each individual in Ireland consumes 66 kilos of identify and satisfy consumer needs. The main purpose is to reduce Desk research, also known as secondary research, is making use of
confectionery or 160 bars every year. The market is very risk and facilitate decision making. It is particularly useful when questionnaires.
information that is already available. Internally the firm can draw on its
competitive with branding playing a very important part. Cadbury launching a new product and ensures that the right goods are
own records. Different departments can provide information on sales
Ireland is the dominant player with a market share of over 50%. produced. Market research provides information on consumer needs Qualitative research provides an understanding of how or why things
trends, customers and costings, which are useful in the development
and wants, competitors, the marketing mix and potential sales. are as they are. It can be used on its own or to help in the
Cadbury Ireland was founded in 1932. It is the only chocolate of new products. Extensive published material can also be sourced
development of a questionnaire for a quantitative study. There are no
manufacturer in Ireland and has a turnover of £118 million of which externally. In addition the development of new technology such as the
• Consumer needs and wants - individuals have different requirements fixed set of questions and therefore no assumptions about what is, or
£63 million is exported. Cadbury employs 1600 people at its two internet provides information at the touch of a button.
and consumers with similar characteristics must be identified. A is not, important. Instead there is a list of topics, problems, or
plants in Dublin and Kerry. The company buys large quantities of company can then choose a target market or section of the market
Field research or primary research is carried out by contacting potential possibilities to be explored. The informant’s own concerns or
Irish sugar and milk and last year spent £64 million on ingredients. for its products. This provides a focus for marketing activities.
consumers directly. It may include surveys, questionnaires and general assumptions heavily influence the form and nature of the discussion.
Cadburys have a product portfolio containing many well-known observation.
• Competitors - no firm exists in isolation. Competitors must be
brands, including the Dairy Milk range, Snack, Crunchie and Time Qualitative research can be used for everything from testing reaction
identified and their actions monitored. Research must be
Out bars. Other popular brands in its portfolio are Roses, Milk Surveys involve questioning people directly about their attitude to a to a potential new advertising campaign, to exploring staff attitudes to
undertaken on competing products in order to identify a
Tray, Twirl, Moro and Crème Egg. particular product or service. Surveys are usually carried out using a a new management structure or procedure. There are various sorts of
competitive advantage for the new product.
face to face interview or by telephone. Because it is impossible to qualitative research, including unstructured interviews and focus
• Marketing mix - marketing involves having the right product at the survey all target customers, sampling is used. A representative group groups (group discussions).
right price in the right place using the right promotion. These are or sample, whose views will accurately reflect the target population, is
the 4Ps of the marketing mix. It is necessary for the right chosen. Questionnaires are lists of prepared questions which potential PROJECT SNOWFLAKE
combination of these to be used in order for a product to be customers are asked to fill out. They are often used in conjunction
successful. For instance there is no point advertising nationally if
with surveys. Careful attention must be given to the design of The development of a new product is a process that starts with an
research shows the product is only sold in the local area.
questionnaires so that the answers received initial idea and finishing with its launch on the market. It involves a

• Potential sales - by knowing the likely level of sales a firm will be are of value for decision making. number of stages. Each stage must be completed before the next
able to estimate the correct amount to produce/supply. This Information can be gathered by stage begins.
reduces the financial risk involved and ensures the maximum
return from the firm’s investment.

Methods and types of market research

There are two main methods of market research – desk research and
field research.
 • be similar enough to the existing Flake so that consumers would If a firm does not wish to carry out the research themselves they can Price - pricing is vital to the success of a product. It must be
Product competitive, cover costs and offer consumers value for money.
identify with it employ the services of a Market Research Agency. Agencies are
development process • have innovative features to attract new consumers and not impinge expensive to use but the accuracy of their work can be of great Research indicated that the product should be priced at the 45p mark.
on sales of the existing bar. benefit. They are experts in research and have experience of doing

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idea generation similar work for other firms. Good trust must exist between the firm Promotion - an extensive advertising plan was put in place. Snowflake
ideas for a new product are thought up Researchers tried out the general idea on consumers using descriptions was advertised in trade magazines, consumer magazines and other
and agency because of the confidential nature of the work.
qualitative or mock-ups of the product. Opinions on the concept were sought printed media. Television, cinema and outdoor advertising was also
product screening research used. Cadbury are the sponsors of Coronation Street and Snowflake
focus and taken into account by the design team. From this the design team A research agency was employed in the Snowflake project. Cadbury
the ideas are assessed and the groups began designing the product. required it to: advertisements were placed around its screening.
most promising one selected • judge consumer reaction to the product
Place - this is the distribution channel used to get goods to customers.
Testing the feasibility of the product • estimate potential sales
concept development It must be in place before a product is launched. Cadbury’s already had
• determine the effect the new product would have on existing
the idea is turned into a finished product This aims to find out whether a new product idea is viable. It involves an extensive network of wholesaler and retailers. These provided a
Flake sales
finding out if it can be produced profitably. A detailed cost analysis distribution system for Snowflake.
prototype development • analyse which Snowflake option would be the optimum.
indicated that the cost of production would be similar to the existing
a model of the product is made With all elements in place Snowflake was launched in September 2000.
Flake bar. Various price assumptions were assessed until the optimum A sample survey using interviews was carried out. A total of 480
price was decided upon and the potential profits were calculated. The people were asked to sample three products in different locations. New product development is both a lengthy and expensive process. It

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feasibility study
study found that the product was likely to be profitable. All respondents ate chocolate bars at least once a fortnight. Three always contains an element of risk. However if carried out correctly
the product is assessed to
quantitative determine if it is viable products were included in the test: product development leads to increased sales and profits. For Cadbury
research Snowflake prototype
• a standard Flake. the process has resulted in a unique new product being successfully
focus
groups test marketing A prototype is the first working model or sample of the product. • a Snowflake with white chocolate inside and milk chocolate outside. developed and integrated into the product portfolio. Snowflake has
market research is carried out to A decision had to be made on the composition of the new bar. Many • a Snowflake with white chocolate outside and milk chocolate made a successful launch in the marketplace and will undoubtedly
determine consumer reaction different recipes were tried out for the new bar using different crumbly inside. contribute to Cadbury’s future success.
effects, types of chocolate, and various ingredients. Two recipes of
launch Snowflake were developed. A milk chocolate coated flake bar and a The products were tested against a background of other confectionery Tasks and Activities
the product is introduced to the market white chocolate coated one. products. Testing was conducted in January and February 2000.

Results of testing (a) Explain the term Market Research.

The new product also required a name. Six possible names were 1 (b) Outline the reasons why firms carry out Market Research.
Generating the idea selected. Research was carried out among consumers to identify the
Both variations were seen to stand out well from other confectionery (c) Describe briefly the role of Market Research Agencies.
most popular one. The results were as follows:
The search for new products is ongoing at Cadbury. This work starts with products on display and the idea was generally well liked. The panel felt
that they would be interesting and unique. Snowflake rated well on: (a) Distinguish between Field Research and Desk Research.
the Cadbury Research and Development team who are continually on the FAVOURITE NAME 2
• taste (a) Illustrate the use of the following in Primary Research:
lookout for new ideas that can be developed into a profitable product. Name %Choosing as First Choice
• quality • surveys
Ideas may come from the company’s personnel or the consumer. Snowflake 58
• combination of white/milk chocolate • questionnaires
Whirl 11
• balance of white/milk chocolate • observation.
Brainstorming sessions are used where a group of people come Snow Swirl 10
together to generate ideas. They are given complete freedom to come Snow Twirl 8 • aftertaste
(a) Describe the stages involved in the development process
up with any ideas they think might be suitable for a product. All ideas Marble Twirl 7 • overall texture
3 of a new product.
no matter how far-fetched are submitted for discussion. The other White Twirl 6 • ease of eating
(b) Identify the elements of the Marketing Mix for a product
members then develop or improve on them. • difference from other chocolate bars.
of your choice.
Clearly Snowflake was the most popular name and this was the one used.
The best ideas are chosen The white chocolate flavour inside was favoured over the milk
(a) Distinguish between qualitative and quantitative research.
chocolate variety with more people agreeing this bar tasted better.
Following on from this the wrapper was designed. The packaging of 4 (b) Describe where and why you would use each type
In 1999 many different product proposals were evaluated. The idea for The product was seen as unique and different to the Flake. Snowflake
Cadbury products is a powerful marketing tool. While each product of research.
a new Flake bar appeared the most promising. It offered the greatest was seen as less of an everyday product and more special.
has its own distinctive design it must still be obvious that it belongs to
likelihood of success in the market. After examining existing brands, (a) What is a Prototype?
management identified a possible gap in the market alongside the the Cadbury range. The eye-catching wrapper of Snowflake carries the A considerable investment was made in new equipment and
distinctive Cadbury logo and the integration of the colour purple, 5 (b) Describe how Cadbury’s used Test Marketing in the
existing crumbly milk chocolate Flake bar. production of Snowflake began.
synonymous with the best tasting chocolate from Cadbury. It also development of Snowflake.
The standard Flake is one of Cadbury’s strong sellers and is readily includes information on ingredients and weights as required by law.
identifiable by consumers. To build on the goodwill of the Flake name
launching the Snowflake
it was decided to introduce a related product. Other product ideas
were eliminated at this stage.
Test Marketing the Snowflake A launch introduces a new product to the market. The timing is crucial
and all the elements of the marketing mix must be in place. These are:
Test marketing is the process of finding out consumer reaction to a
Turning the idea into a finished product
product before full production commences. The final decision to invest Product - the product must be one that can satisfy consumer need, is
The idea now had to be turned into a marketable product. Cadbury’s in a production system is only made after this is carried out. It reduces top quality and has a real point of difference. Test marketing indicated
engineers were given the task of coming up with a product that would: the risk of making a costly mistake. that Sowflake met these criteria.

While every effort has been made to ensure the accuracy of information contained in this case study, no liability shall attach to either the Irish Times Ltd or Woodgrange Consultants Ltd for any errors or omissions in this case study.

Business 2000
millennium edition