The Cadbury - Essay Example

Cadbury is one of the well-known British Confectionery Companies founded in the year 1824 in the region of Birmingham. It was established by John Cadbury. Initially, it used to present tea, coffee and drinking chocolate, and many others. It was recognized as one of the flagship brands offering high-quality cocoa chocolates to its target customers at a quite lowest cost. Because of this the brand image and market share of the organization enhanced substantially to a certain extent as compared to other rivals (Cadbury, n.d.).

Cadbury, the market leader in the chocolate industry faced a huge setback in the month of October of 2003. In spite of being a legendary brand and dominant position in the market, the revenue and total sale of Cadbury experienced a serious downfall due to the worm problem detected in the dairy milk bars. Immediately, the problem was presented in front of the Food and Drug Administration Commissioner (FDA) complaining about the infestation in the chocolate dairy milk bars. The sale of the brand attained a serious loss in that festive season of Diwali, along with a huge loss of brand value as well.

The problem of worms created a crisis situation for the brand due to which the promotions and advertisements are entirely banned. As a result, the total profit margin along with reputation and credibility also reduced. As Cadbury is entirely identical to chocolate so infestation in dairy milk bars reduced the market value and sales. It is mainly due to the technical defects in the machines at the time of manufacturing of Cadbury bars i.e. fermentation, drying, roasting, crushing, blending, and grinding. Apart from this, improper packaging and unhygienic storage also lead to this problem. Due to this, a huge range of stocking of the products in retailer and distributor go-downs took place along with a reduction of the morale and credibility of the customers. Due to excess stoking of the products, the retailers and distributors had to sell them at discounted prices attaining huge losses. This is the prime cause that declined the confidence power of the retailer and distributors of the brand. So, the management became extremely conscious to retain its portfolio and market share as before by the below-mentioned strategy (MBA Knowledge Base, 2003).

In order to regain back the credibility and reliability of the stakeholders and customers, the management of Cadbury used a strategy named: Two-Phase. The first stage mainly highlights the views of the organization of Cadbury and the second stage includes packaging changes and detailed communications. In the first stage, the management ensured the customers improved their monitoring and analyzing the process of storages and the raw materials used for the preparation of its varied items. Along with this, it also ensured the implementation of modern machines so as to reduce technical defects.  Moreover, it also introduced a new toll-free number so that the consumers may directly contact the management in case of any sort of defects faced for the period of October to December 2003 (MBA Knowledge Base, 2003).

In the second phase, the management thought of changing the packaging so as to regain its market share. It used a double wrapping system to reduce the trouble of worm infestation and also introduced a reputed brand ambassador: Mr. Amitabh Bachchan to retain its previous brand image. Along with this, it also invested 40 cores in advertising and promotional campaigns to make the customers aware about their strategies. It is used to improve its brand value and market share in the market among others. Other than this, restoring the level of confidence in key stakeholders, customers, employees, and sales team is also extremely essential for Cadbury (MBA Knowledge Base, 2003).

The two-phase strategy acted as a boon for the organization of Cadbury. Due to this, the total sales and revenue of the brand increased considerably to a certain extent. Along with this, the market share and brand equity of the organization also enhanced resulting in amplification of its profit margin in the next coming years. Other than this, the brand image and customer reliability and perception also improved resulting in retaining its growth and dominance in the market as before. It might be viewed clearly in the below-given picture (MBA Knowledge Base, 2003).

Therefore, it may be stated that the strategy proved extremely effective for the organization of Cadbury resulting in the up-liftment of the image in the market. Hence, it proved quite beneficial and advantageous for the organization.