Professional Documents
Culture Documents
as a part fulfillment of
Semester:2nd
dbs
delhi business school
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CERTIFICATE
This is to certify that the summer training was done on” STUDY OF
CONSUMER PREFERENCE TOWARDS CADBURY AND NESTLE
CHOCOLATES ”Submitted to Delhi Business school, New Delhi Ratul
Bhattacharyya in partial fulfillment of the award of degree of MBA& post
graduate in entrepreneurship& business, is a bonafide work carried out
by him under my supervision and guidance . This work has not been
submitted anywhere else for any other degree /diploma. The original work
was carried during 1st may to 31st June .
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DECLARETION
RATUL BHATTACHARYYA
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ACKNOWLEDGEMENT
RATULBHATTACHARYYA
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INTRODUCTION
~5~
THE INDUSTRY SCENARIO
~6~
Trends in the Industry
~7~
CONSUMER PREFERENCE
~8~
SCOPE OF THE STUDY
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OBJECTIVES OF THE STUDY
~ 10 ~
RESEARCH METHODOLOGY
Primary Sources
~ 11 ~
Secondary Sources
~ 12 ~
Chocolate
~ 13 ~
Chocolates
Chocolates! Chocolates!
Every body has a liking for them, be they in the form of bar
Or a tiny little gem,
Or shaped like a rectangle,
Or a sphere, a brick or an éclair.
For chocolate lovers it is fun,
To have them during rain, breeze or sun.
They are white and brown in color,
And taste sweet and bitter
Some have them in a glass of cold coffee, or in the form of a toffee.
Some eat them when they are sad
Some relish them when they are happy or have sweet dreams,
But I feel, to have chocolates
We don’t need a reason,
‘Cause we can have it
Anytime, any season!
~ 14 ~
History of chocolate:
The origin of chocolate can be traced back to the ancient Maya and Aztec civilizations in
Central America, who first enjoyed “chocolati” 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
The Spanish invaded Mexico in the 16th century, by this time 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 America and seen how the Indians prepared the cocoa beans and how
they made the drink, and by 1606 chocolate was well established in Italy.
History of chocolate:
The origin of chocolate can be traced back to the ancient Maya and Aztec civilizations in
Central America, who first enjoyed “chocolati” 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
The Spanish invaded Mexico in the 16th century, by this time 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 America and seen how the Indians prepared the cocoa beans and how
they made the drink, and by 1606 chocolate was well established in Italy.
~ 15 ~
Drinking chocolate
The secret of chocolate was taken to France in 1615, when Anne, daughter of Phillip 2 of
Spain married king Louis 13 of France
The French court enthusiastically adopted this new exotic drink, which was considered
to have medicinal benefits as well as being a nourishing food. Gradually the custom of
drinking chocolate spread across Europe, reaching England in the 1650’s
First chocolate for eating
Up until this point all chocolate recipes were based on plain chocolate. It was an English
doctor, sir Hans’s sloane, who- after traveling in south America- focused on cocoa and
food values, bringing a milk chocolate recipe back to England.
The original Cadbury milk chocolate was prepared to his recipe.
History:
The earliest record of chocolate was over fifteen hundred years ago in the central
America rain forests, where the tropical mix of high rain fall combined with high year
round temperatures and humidity provide the ideal climate for cultivation of the plant
from which chocolate is derived, the cacao tree.
“ Chocolate is made from the cocoa bean, found in pods growing from the trunk and
lower branches of the cacao tree, Latin name “ theobroma cacao” meaning “ food of the
gods”
Cacao was corrupted into the more familiar “ cocoa” by the early European explorers.
The Maya brewed a spicy, bittersweet drink by roasting and pounding the seeds of the
cacao tree with maize and capsicum peppers and letting the mixture ferment. This drink
was reserved for use in ceremonies as well as for drinking by the wealthy and religious
elite; they also ate cacao porridge.
The Aztecs, like the Mayans, also enjoyed cacao as a beverage fermented from the raw
beans, which again featured prominently in ritual and as a luxury available only to the
very wealthy. The Aztecs called this drink xocolatl, the Spanish conquistadors found this
almost impossible to pronounce and so corrupted it to the easier “ chocolat” the English
further changed this to chocolate.
The Aztec’s regarded chocolate as an aphrodisiac and their emperor, Montezuma
reputedly drank it fifty times a day from a golden goblet and is quoted as saying of
xocolatl: “ the divine drink, which builds up resistance and fights fatigue. A cup of this
precious drink permits a man to walk for a whole day without food”
Chocolate in Europe
Xocolatl! or chocolat or chocolate as it became known, was brought to Europe by
Cortez, by this time the conquistadors had learned to make the drink more palatable to
European tastes by mixing the ground roasted beans with sugar and vanilla ( a practice
still continued today), thus offsetting the spicy bitterness of the brew the Aztec’s drank.
The first chocolate factories opened in Spain, where the dried fermented beans brought
back from the new world by the Spanish treasure fleets were roasted and ground, and by
the early 17th century chocolate powder – from which the European version of the drink
was made- was being exported to other parts of Europe. The Spanish kept the source of
the drink- the beans- a secret for many years, so successfully in fact, that when English
buccaneers boarded what they thought was a Spanish “ treasurer galleon” in 1579, only to
find it loaded with what appeared to be “ dried sheep’s droppings, they burned the whole
ship in frustration. If only they had known, chocolate was so expensive at that time, that
it was worth it’s weight in silver ( if not gold), chocolate was treasure indeed !
Within a few years, the cocoa beverage made from the powder produced in Spain had
become popular throughout Europe, in the Spanish Netherlands, Italy, France, Germany
and – in about 1520 – it arrived in England.
~ 16 ~
The first chocolate house in England opened in London in 1657 followed rapidly by
many others. Like the already well established coffee houses, they were used as clubs
where the wealthy and business community met to smoke a clay pipe of tobacco,
conduct business and socialize over a cup of chocolate.
Back to the America’s
Event’s went full circle when English colonists carried chocolate (and coffee) with them
to England’s colonies in north America. Destined to become the united states of America
and Canada, they are now the worlds largest consumers – by far – of both chocolate and
coffee, consuming over half of the words total production of chocolate alone.
The Quakers
The Quakers were, and still are, a pacifist religious sect, an offshoot of the puritans of
English civil war and pilgrim fathers fame and a history of chocolate would not be
complete without mentioning their part in it. Some of the most famous names in
chocolate were Quakers, who for centuries held a virtual monopoly of chocolate making
in the English speaking world – fry, Cadbury and row tree are probably the best known.
Its probably before the time of the English civil war between parliament and king Charles
1st that the Quaker’s who evolved from the puritans, first began their historic association
with chocolate. Because of their pacifist religion, they were prohibited from many normal
business activities, so as an industrious people with a strong belief in the work ethic (like
the puritans), they involved themselves in food related businesses and did very well.
Baking was a common occupation for them because bread was regarded as the biblical
“staff of life”, and bakers in England were the first to add chocolate to cakes so it would
be a natural progression for them to start making pure chocolate. They were also heavily
involved in breakfast cereals but that’s another story.
What is certain is that the fry, row tree and Cadbury families in England among others,
began chocolate making and in fact Joseph fry of fry &sons (founded 1728 in Bristol,
England) is credited with producing and selling the world’s first chocolate bar. Fry’s have
now all but disappeared (taken over by Cadbury) and row tree have merged Swiss
company nestle, to form the largest chocolate manufacturer in the world. Cadbury have
stayed with chocolate production and are now, if not quite the largest, probably one of the
best-known chocolate makers in the world.
Chocolate as we know it
The first mention of chocolate being eaten in solid form is when bakers in England began
adding cocoa powder to cakes in the mid 1600’s. Then in 1828 a Dutch chemist, Johannes
van houten, invented a method of extracting the bitter tasting fat or “cocoa butter” from
the roasted ground beans, his aim was to make the drink smoother and more palatable,
however he unknowingly paved the way for solid chocolate as we know it.
Chocolate as we know it today first appeared in 1847 when fry & sons of Bristol,
England – mixed sugar with cocoa powder and cocoa butter (made by the van houten
process) to produce the first solid chocolate bar then in1875 a Swiss manufacturer,
Daniel peters, found a way to combine (some would say improve, some would say ruin)
cocoa powder and cocoa butter with sugar and dried milk powder to produce the first
milk chocolate.
~ 17 ~
CHOCOLATE PRODUCTION
The cocoa-bean -- the heart of the sweetest delicacy in the world -- is
bitter! This is why, up to the 18th century some native tribes ate only the
sweetish flesh of the cocoa fruit. They regarded the precious bean as
waste or used it, as was the case among the Aztecs, as a form of currency.
TheVarieties
There are two quite different basic classifications of cocoa, under which
practically all varieties can be categorised: Criollo and Forastero cocoas.
The pure variety of the Criollo tree is found mainly in its native Equador
and Venezuela. The seeds are of finer quality than those of the Forastero variety.
They have a particularly fine, mild aroma and are, therefore, used only in the production
of high-quality chocolate and for blending. However, Criollo cocoa accounts for only
10% of the world crop. The remaining 90% is harvested from trees of the Forastero
family, with its many hybrids and varieties. The main growing area is West Africa. The
cocoa tree can flourish only in the hottest regions of the world.
TheHarvest
Immediately after harvesting, the fruit is treated to prevent it from rotting.
At fermentation sites either in the plantation or at, collecting points, the
fruit is opened.
Fermentation
The fermentation process is decisive in the production of high quality raw cocoa. The
technique varies depending on the growing region.
Drying
After fermentation, the raw cocoa still contains far too much water; in fact about 60%.
Most of this has to be removed.
What could be more natural than to spread the beans out to dry on the sun-soaked ground
or on mats? After a week or so, all but a small percentage of the water has evaporated.
Cleaning
Before the real processing begins, the raw cocoa is thoroughly cleaned by
passing through sieves, and by brushing. Finally, the last vestiges of
wood, jute fibres, sand and even the finest dust are extracted by powerful
vacuum equipment.
Roasting
The subsequent roasting process is primarily designed to develop the aroma. The entire
roasting process, during which the air in the nearly 10 feet high furnaces reaches a
temperature of 130 °C, is carried out automatically.
Crushingandshelling
The roasted beans are now broken into medium sized pieces in the crushing machine.
Blending
Before grinding, the crushed beans are weighed and blended according to special recipes.
The secret of every chocolate factory lies in the special mixing ratios, which it has
developed for different types of cocoa.
~ 18 ~
Grinding
The crushed cocoa beans, which are still fairly coarse are now pre-ground by special
milling equipment and then fed on to rollers where they are ground into a fine paste. The
heat generated by the resulting pressure and friction causes the cocoa butter
(approximately 50% of the bean) contained in the beans to melt, producing a thick, liquid
mixture.
This is dark brown in color with a characteristic, strong odour. During cooling it
gradually sets: this is the cocoa paste.
At this point the production process divides into two paths, but which soon join again. A
part of the cocoa paste is taken to large presses, which extract the cocoa butter. The other
part passes through various blending and refining processes, during which some of the
cocoa butter is added to it. The two paths have rejoined.
CocoaButter
The cocoa butter has important functions. It not only forms part of every
recipe, but it also later gives the chocolate its fine structure, beautiful
lustre and delicate, attractive glaze.
Cocoa Powder
After the cocoa butter has left the press; cocoa cakes are left which still contain a 10 to
20% proportion of fat depending on the intensity of compression.
These cakes are crushed again, ground to powder and finely sifted in
several stages and we obtain a dark, strongly aromatic powder, which is
excellent for the preparation of delicious drinks - cocoa. Cocoa paste,
cocoa butter, sugar and milk are the four basic ingredients for making
chocolate. By blending them in accordance with specific recipes the three types of
chocolate are obtained which form the basis of ever product assortment, namely:
Kneading
In the case of milk chocolate for example, the cocoa paste, cocoa butter, powdered or
condensed milk, sugar and flavouring - maybe vanilla - go into the mixer, where they are
pulverized and kneaded.
Rolling
Depending on the design of the rolling mills, three or five vertically
mounted steel rollers rotate in opposite directions. Under heavy pressure
they pulverise the tiny particles of cocoa and sugar down to a size of
approx. 30 microns. (One micron is a thousandth part of a millimetre.)
Conching
But still the chocolate paste is not smooth enough to satisfy our palates.
But within two or three days all that will have been put right. For during
this period the chocolate paste will be refined to such an extent in the
conches that it will flatter even the most discriminating palate.
Conches (from the Spanish word "concha", meaning a shell) is the name given to the
troughs in which 100 to 1000 kilograms of chocolate paste at a time can be heated up to
80 °C and, while being constantly stirred, is given a velvet smoothness by the addition of
certain amounts of cocoa butter. A kind of aeration of the liquid chocolate paste then
takes place in the conches: its bitter taste gradually disappears and the flavor is fully
developed. The chocolate no longer seems sandy, but dissolves meltingly on the tongue.
It has attained the outstanding purity, which gives it its reputation.
~ 19 ~
CONSUMPTION OF CHOCOLATES IN INDIA
Chocolate consumption in India is extremely low. Per capita
consumption is around 160 gms in the urban areas, compared to 8-
10kg in the developed countries. In rural areas, it is even lower.
Chocolates in India are consumed as indulgence and not as a snack
food. A strong volume growth was witnessed in the early 90’s when
Cadbury repositioned chocolates from children to adult consumption.
The biggest opportunity is likely to stem from increasing the
consumer base. Leading players like Cadbury and Nestle have been
attempting to do this by value for money offerings, which are
affordable to the masses.
~ 20 ~
NESTLE’
Nestle India
Nestle’ India is a subsidiary of Nestle’ S.A. of Switzerland. The
company insists on honesty, integrity and fairness in all aspects of its
business and expects the same in its relationships.
~ 21 ~
Nestle’ Story
Nestlé was founded in 1867 on the shores of Lake Geneva in Vevey,
Switzerland and its first product was “Farine Lactée Nestlé”, an infant cereal
specially formulated by Henri Nestlé to provide and improve infant nutrition.
From its first historic merger with the Anglo-Swiss Condensed Milk Company
in 1905, Nestlé has grown to become the world’s largest and most diversified
food Company, and is about twice the size of its nearest competitor in the food
and beverage sector. Nestlé’s trademark of birds in a nest, derived from Henri
Nestlé’s personal coat of arms, evokes the values upon which he founded his
Company. Namely, the values of security, maternity and affection, nature and
nourishment, family and tradition. Today, it is not only the central element of
Nestlé’s corporate identity but serves to define the Company’s products,
responsibilities, business practices, ethics and goals. In 2004, Nestlé had around
247,000 employees worldwide, operated 500 factories in approx. 100 countries
and offered over 8,000 products to millions of consumers universally. The
Company’s transparent business practices, pioneering environment policy and
respect for the fundamental values of different cultures have earned it an
enviable place in the countries it operates in. Nestlé’s activities contribute to
and nurture the sustainable economic development of people, communities and
nations. Above all, Nestlé is dedicated to bringing the joy of ‘Good Food, Good
Life’ to peoplethroughout their lives, throughout the world.
Nestle’ Brands
Milk Products & Nutrition
Beverages
Prepared Dishes and Cooking Aids
Chocolates & Confectionary
~ 22 ~
MILK PRODUCTS AND NUTRITION:
NESTLÉ EVERYDAY Dairy Whitener
NESTLÉ EVERYDAY Slim
NESTLÉ EVERYDAY Ghee
NESTLÉ MILKMAID
NESTLÉ Fresh 'n' Natural Dahi
NESTLÉ Fresh 'n' Natural Slim Dahi
NESTLÉ Jeera Raita
NESTLÉ MILKMAID Fruit yoghurt
NESTLÉ Milk
NESTLÉ Slim Milk
BEVERAGES:
NESCAFÉ CLASSIC
NESCAFÉ SUNRISE
NESTLÉ MILO
NESCAFÉ 3 in 1
NESCAFÉ Koolerz
~ 23 ~
NESTLEKITKAT
Are crisp wafer fingers covered with choco layer? NESTLÉ KIT KAT has a
unique finger format with a ‘breaking' ritual attached to it.
NESTLÉ KIT KAT is one of the most successful brands in the world and every
year over 12 billion NESTLÉ KIT KAT fingers are consumed around the globe.
NESTLE MUNCH
NESTLÉ MUNCH is wafer layer covered with delicious choco layer. NESTLÉ
MUNCH is so crisp, light and irresistible that you just ‘can't stop Munching.'
NESTLÉ MUNCH is the largest selling SKU in the category!
NESTLE BAR-ONE
is a luscious nougat and caramel with delicious choco layer. NESTLÉ BAR-
ONE constantly reminds you that it is ‘Time for Action'.
NESTLÉ Milk Chocolate is a milk chocolate with a delicious taste. Kids just love it!
~ 24 ~
CADBURY
How Cadbury Chocolate is made
Milk chocolate for eating was first made by Cadbury in 1897 by adding milk
powder John paste to the dark chocolate recipe of cocoa mass, cocoa butter and
sugar. By today's standards this chocolate was not particularly good: it was
coarse and dry and not sweet or milky enough for public tastes. There was a
great deal of competition from continental manufacturers, not only the
French,but also the Swiss, renowned for their milk chocolate. Led by George
Cadbury Junior, the Bournville experts set out to meet the challenge. A
considerable amount of time and money was spent on research and on new plant
designed to produce the chocolate in larger quantities. A recipe was formulated
incorporating fresh milk, and production processes were developed to produce a
milk chocolate 'not merely as good as, but better than' the imported milk
chocolate'.
Four years of hard work were invested in the project and in 1905 what
was to be Cadbury's top selling brand was launched. Three names were
considered: Jersey, Highland Milk and Dairy Maid. Dairy Maid became Dairy
Milk, and Cadbury's Dairy Milk, with its unique flavour and smooth creamy
texture, was ready to challenge the Swiss domination of the milk chocolate
market. By 1913 Dairy Milk had become the company's best selling line and in
the mid twenties Cadbury's Dairy Milk gained its status as the brand leader, a
position it has held ever since.
~ 25 ~
COMPANY OVERVIEW OF CADBURY INDIA
Cadbury began its operations in 1948 by importing chocolates and then re-
packing them before distribution in the Indian market. After 59 years of
existence, it today 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). The
corporate office is in Mumbai.Currently Cadbury India operates in three sectors
viz. Chocolate Confectionery, Milk Food Drinks and in the Candy 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, Éclairs and Celebrations. Cadbury enjoys a value
market share of over 70% - the highest Cadbury brand share in the world! Their
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.
The Cadbury India Brand Strategy has received consistent support through
simple but imaginative extensions to product categories and distribution. A
good example of this is the development of Bytes. Crispy wafers filled with
coca cream in the form of a bagged snack, Bytes is positioned as "The new
concept of sweet snacking". It delivers the taste of chocolate in the form of a
light snack, and thus heralds the entry of Cadbury India into the growing bagged
Snack Market, which has been dominated until now by Salted
Bagged Snack Brands. Bytes was first launched in South India in 2003.
Since 1965 Cadbury has also pioneered the development of cocoa cultivation in
India. For over two decades, it has worked with the Kerala Agriculture
University to undertake cocoa research and released clones, hybrids that
improve the cocoa yield. Today, Cadbury is poised in its leap towards quantum
growth and new categories of business, namely gums, mints, snacking and
gifting. It is a part of the Cadbury Schweppes Group, world's No.1
Confectionery Company.
~ 26 ~
CADBURY WORLD WIDE
With origins stretching back over 200 years, today their products -
which include brands such as Cadbury, Schweppes, Halls, Trident, Dr Pepper,
Snapple, Trebor, Dentyne, Bubblicious and Bassett - are enjoyed in almost
every country around the world. We employ around 60,00 people. Their
heritage starts back in 1783 when Jacob Schweppe perfected his process for
manufacturing carbonated mineral water in Geneva, Switzerland. And in 1824
John Cadbury opened in Birmingham selling cocoa and chocolate. These two
great household names merged in 1969 to form Cadbury Schweppes plc. Since
then they have expanded their business throughout the world by a programme of
organic and acquisition led growth. Concentrating on their core brands in
beverages and confectionery since the 1980s, they have strengthened their
portfolio through almost fifty acquisitions, including brand icons such as Mott's,
Canada Dry, Halls, Trident, Dentyne, Bubblicious,Trebor, Bassett, Dr Pepper, 7
Up and Snapple.
- It employ 60,000 people in over 200 countries
- Worlds No 1 Confectionery company
- World's No 2 Gums company
- World's No 3 beverage company
~ 27 ~
Cadbury Brands:
Chocolates
Snacks
Beverages
Candy
SNACKS:
Bytes
BEVERAGES
Bournvita
CANDY
Halls
CHOCOLATES
Dairy Milk
5 Star
Perk
Celebrations
Temptation
Eclairs
Gems
DAIRY MILK
The story of Cadbury Dairy Milk started way back in 1905 at Bournville, U.K.,
but the journey with chocolate lovers in India began in1948. The variants Fruit
& Nut, Crackle and Roast Almond, combine the classic taste of Cadbury Dairy
Milk with a variety of ingredients and are very popular amongst teens & adults.
Cadbury Dairy Milk has exciting products on offer - Cadbury Dairy Milk
Wowie, chocolate with Disney characters embossed in it, and Cadbury Dairy
Milk 2 in 1, a delightful combination of milk chocolate and white chocolate.
Giving consumers an exciting reason to keep coming back into the fun filled
world of Cadbury. Today, Cadbury Dairy Milk alone holds 30% value share of
the Indian chocolate market.
~ 28 ~
5 STAR
the second largest after Cadbury Dairy Milk with a market share of 14%,
Cadbury 5 Star moves from strength to strength every year by increasing its
user base. Launched in 1969 as a bar of chocolate that was hard outside with
soft caramel nougat inside, Cadbury 5 Star has re-invented itself over the years
to keep satisfying the consumers taste for a high quality & different chocolate
eating experience. One of the key properties that Cadbury 5 Star was associated
with was its classic Gold colour. And through the passage of time, this was one
property that both, the brand and the consumer stuck to as a valuable
association. 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
Cadbury launched Perk in 1996. With its light chocolate and wafer construct,
Cadbury Perk targeted the casual snacking space that was dominated primarily
by chips & wafers. With 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.
~ 29 ~
CELEBRATIONS
TEMPTATION
~ 30 ~
VISION
The governing objective for Cadbury India is to deliver:
· Superior Shareholder Value
· Cadbury in every pocket
~ 31 ~
The initial impetus for embarking on a New Product
Development project can be:
· Changes in consumer lifestyles
· Technology developments where new processing techniques have been
devised
· The need for market extension abroad, particularly into Asia Pacific, and the
demise of trade barriers.
However, products cannot be simply transferred from one market to another
without review and possible adaptation to suit differing expectations and
cultures.
Whether the product strategy is:
· Existing product improvement
· New product development within the current range of activity
· Production diversification
~ 32 ~
The Real Taste of Life
This slogan was prepared for the first chocolate introduce by the Cadbury first
time in India. The chocolate was ‘Dairy Milk’. This slogan says that there are
many types of products present in the market, they have different taste but
Dairy Milk is the best and the true taste of the life. This slogan also stands for
the victory. On electronic media, the advertisement shows that a cricketer wins
the match and after that he and his girl friend eats this product. Therefore, this
stands for victory of any body eats this product will definitely win in his life.
~ 33 ~
DISTRIBUTION SYSTEM ADOPTED BY
CADBURY
Cadbury Schweppes pick the world number 3 soda market has aggfed to sell
most of its soft drinks business outside the US to Coca Co. for $ 1.85 billions
to finance a head on battle with Coke in the No. 1 soda makers home market.
The agreements included the Schwoers Dr. Pepper chanda dry and crush
brands and exude South Africa and France the pact which was dependent on
regulatory approval was likely to be concealed in mid 1999 Cadbury said.
The more will allow Cadbury to expand it Dr. Peeper business in US where it
derives two-thirds of its soft drinks sales and was a 15 per cent market share
at the same time it get Cadbury out of markets where it is growing at a slower
pace. The shares rose as much as 70.5 per cent or 7.5 per cent or 7.5 per
cent 1002.
“This sort out the places where Cadbury’s systems weren’t strong enough to
compete with Coca-Cola,” said Mr. David long an analyst a Henderson
Croshtwaite, “they were fighting with proper for this.
~ 34 ~
Main steps involved in Developing the channel design
· Formulation of channel objectives.
· Identification of channel functions.
· Analysing the product characteristics and linking channel design to the
product.
· Evaluation of the distribution environment including legal aspects
· Evaluation of competitors channel patterns.
· Evaluation of company resources and matching the channel design to
the resources.
· Development of alternative channel designs and selation of the one
· that suits the firm most.
~ 35 ~
PRICING POLICIES ADOPTED BY CADBURY
Despite intensifying competition for target share and a stream of new
products, pitted against each other, the price line of popular brands of
chocolate had move upward over the past one year.
Prices of key brands like Nestle’s Kitkat and Cadbury’s Dairy Milk have rose
by 25 per cent each between November 2001 and November 2002.
Brands such as Cadbury’s Eclairs, where the unit prices is lower, have seen a
sharpener price hike.
A major portion of the price revision occurred in the last part of 2001 and in
the first quarter of 2002.
A sharp rise in cocoa prices and rupee and depreciation escalation in input
costs for chocolate manufacturers in the last leg of fiscal 2001-98.
Whole cocoa, prices have receded from their high after September 2001,
rupee depreciation and the higher incidence depreciation and the higher
incidence of excise duties has kept the price line of chocolates.
The cost of cocoa, the key input, accounts for around 45 per cent of the
manufacturing costs for chocolates production.
Domestic cocoa production (estimated at 4500) to 5000 tonnes for the current
year) has been stagnant and takes are of less than a third of domestic
requirements of chocolate and malted food manufacturers. Manufacturers
such as Cadbury and Nestle India import over half of this cocoa requirements.
International cocoa prices moved up from 140 cents per kg in January 2001 to
peak at 190 cents per kg in September 2001, prompting a round or price
increase in chocolates in the last part of 2001.
Subsequently cocoa prices have receded to around 150-160 cents per kg and
are expected to rule at these levels in the near term. However, rupee
depreciation of around 17 per cent since September 2001 is likely to have
offset the impact of this on production costs.
The reclassification of the wafer-coated chocolates, making them chargeable
to an excise duty of 18 per cent, against 8 per cent earlier, is also likely to
contribute to price escalation.
The excise authorities have recently passed an order on Nestle, directing it to
pay excise dues at the higher rate of 18 per cent. The matter is now under
appeal. Maximum Retail Price - based excise duties, which have been
introduced on chocolates in the latest budget could also add to the production
cost especially in the premium categories. Though cocoa prices have extended
to rule relatively soft. The price line for chocolates appears unlikely to come
down in the near future.
~ 36 ~
FACTORS INFLUENCING PRICING OF
CADBURY
Internal Factors
· Corporate and marketing objectives of the firm.
· The image sought by the firm through pricing.
· The characteristics of the product.
· Price elasticity of demand of the product.
· The stage of the product on the product life cycle.
· Use pattern and turn around rate of the product.
· Cost of manufacturing and marketing.
· Extent of distinctiveness of the product and extent of production
differentiation practiced by the firm.
· Other elements of the marketing mix of the firm and their interaction with
pricing.
· Composition of the product line of the firm.
External Factors
· Market characteristics.
· Buyer’s behavior in respect of the given product.
· Bargaining power of major customers.
· Competitors pricing policy.
· Government controls regulations on pricing.
· Other relevant legal aspects.
· Societal (or social) considerations.
· Understanding, if any reached with price cartels.
Cadbury objective of pricing
· Profit maximization in the short-term.
· Profit optimization in the long-term.
· A minimum return (or target return) on investment.
· A minimum return on sales turnover.
· Targets sales volume.
· Target market share.
· Deeper penetration of the market.
· Entering new markets.
· Target profit on the entire product line irrespective of profit level in individual
products.
· Keeping competition out, or keeping it under check.
· Fast turn around and early cash recovery.
· Stabilizing prices and margins in the market.
~ 37 ~
PREFER CHOCOLATES?
YES
NO
figure:1
~ 38 ~
PREFERENCE OF BRAND
CADBURY
NESTLE
figure:2
~ 39 ~
BAR ONE NESTLE
5% MILK CHOCOLATE
MILKY BAR 3%
3%
KITKAT
36%
MUNCH
53%
figure:3
CADBURY TEMPTATION
1%
CELEBRATION
PEARK
2%
15%
5 STAR
18%
DAIRY MILK
64%
figure:4
~ 40 ~
Rank the sub-brands of chocolates according to your preference
NESTLE
MILK
CHOCOLATE RANKING SUB BRAND
3%
BAR ONE
MILKY BAR 11%
3% KIT KAT
33%
MUNCH
50%
figure:5
CADBURY
CELEBRATION
6%
DAIRY MILK
PERK 47%
33%
5 STAR
11%
figure:6
~ 41 ~
Which form of a chocolate do you like?
FORM OF CHOCOLATES
CHEW
6%
NUTTIES
18%
HARD
47%
CRUNCHY
29%
figure:7
~ 42 ~
What pack do you purchase?
SIZE OF PACK
FAMILY PACK
10%
BIG
17%
SMALL
73%
figure:8
~ 43 ~
Which promotional offers attract you most?
Sales
ANY OTHER
4%
FREE GIFT
12%
PRICE OFFER
84%
figure:9
~ 44 ~
Which of these factors affects your purchase?
Sales
INGREDIENCE
8%
ATTRACTIVE
DISPLAY
7%
BRAND
AMBASSADOR
ADVERTISEMENT 25%
60%
figure:10
~ 45 ~
Using brand ambassador by Cadbury.
~ 46 ~
Findings
CONSUMER RESEARCH:
Consumer research deals with consumer and their problems and solution to the
problems. In this we came to know about the consumers need and
expectation levels regarding products and ascertainable levels of consumer
satisfaction.
PRODUCT RESEARCH:
Under product research I came to know about the modification which
consumers wants as to the quality, packing, shape, color, and quantity etc. of
their favorite chocolate.
PRICING RESEARCH:
This includes ability to consume, to pay for the product, how much a person can
spend on his/her favorite chocolate. In this I have tried to find out consumer’s
price expectations and reactions.
ADVERTISING RESEARCH:
Under this I have concluded that whether the advertisement appeals the
consumers or not. This also includes evaluating and selecting the proper media-
mix and measuring advertising effectiveness. From the one and half month
experience of our research project with Consumer preference towards Nestle
and Cadbury Chocolates, We have come to know lot things and it has enhanced
our knowledge to great extent. We found many things which are well executed
by distributors. Here are some of the key findings given by us are purely based
on our research. It doesn’t have any kind of bias from our side.
~ 47 ~
They are given as under:
By doing the comparison of Nestle and Cadbury chocolates, we have found that
the preference of the chocolates more preferred by the consumer is Cadbury.
From the analysis we have found that Nestlé’s some brand has covered 50% of
the market in one product (Munch) of the chocolates which is a very good sign
for the company.
Through the research we found that consumer is very conscious about the
quality of the product in that matter they are not ready to compromise. And we
found both company product are very qualitative.
In some cases we found that if a product is not available in the market than
some consumer would to switchover to another product or brand.
So from these survey we have found that the consumption of the chocolates are
more in children and teenage group though having any occasion or not having
any occasion. The most selling product of both the companies is in small size of
chocolates and there market share is 73% because it’s not much costlier and is
also easily available & affordable.
~ 48 ~
SUGGESTIONS AND RECOMMENDATIONS
~ 49 ~
CONCLUSION
A survey of the people has been conducted to know the liking pattern of
the two products Cadbury and Nestle. It is observed that overall people like
to eat Cadbury brand rather than Nestle. It is concluded that mostly people
preferred Dairy Milk of Cadbury due to its flavor/taste, quality and image
and due to its hard form. Some people often like to have a chocolate with
good flavor, quality hard form. Some people often like to have a chocolate
with good flavor, quality taste and crunchiness. It is thus concluded from
the facts collected that mostly people refer to buy big pack of their favorite
chocolate, and sometimes some of them go for small and family pack .
~ 50 ~
BIBLIOGRAPHY
~ 51 ~
~ 52 ~