Marketing Management of Cadbury - Assignment Example

?Marketing Management Assignment Table of Contents Table of Contents 2 Introduction 4 Situation Analysis 5 PESTLE Analysis 5 Political 5 Economical 5Social 6 Technological 6 Environmental 8 Legal 8 Core Competencies 8 SWOT Analysis 9 Strengths 9 Weaknesses 9 Opportunities 10 Threats 10 Marketing Objectives 11 New Product 11 Developing & Implementing a Marketing Plan 12 SMART Objectives 14 Marketing Plan 15 Market Segmentation & Target Market 15 Positioning and Differentiation 16 Marketing Mix Strategies 18 Distribution Plans 19 Using E-Business in Global Marketing Mix 21 Marketing Budget 22 Preparation of a Marketing Budget 23 Conclusion 25 References 26 Introduction Cadbury, the leader in the market of chocolate confectionery, came into existence in the year of 1824. A young boy named John Cadbury opened up the first shop in Birmingham, England. Gradually, it started spreading its branches all over the globe and now it has a global presence. In February 2010, the Cadbury was acquired by Kraft Foods. Cadbury has been operating in India for over 60 years now. It started its operation by importing chocolates in 1948. Presently, the company boasts of a market share of above 70% which is the highest share of the brand across the globe. Cadbury’s billion Dollar brand ‘Dairy Milk’ is referred in India as the “gold standard” in terms of chocolates. Cadbury was also a pioneer in India for developing cocoa cultivation, since 1965. They have given a quality life to thousands of farmers through their continuous efforts to increase the production of cocoa. No wonder that a Cocoa tree in India is popular in the name of Cadbury tree (Cadbury, n.d.). It can be said that Cadbury is the synonym for chocolates in India and also the brand loyalty of Cadbury in India is quite high. Thus, based on these important criteria’s, India has been preferred for the launch of a new brand of Cadbury (Doddamani, 2011). Situation Analysis PESTLE Analysis Political Change in regulations and laws regarding international food labelling and trade are bound to affect Cadbury. Cadbury should be aware of the Food Safety Act and should take care in not violating it. Cadbury should also be cautious and ensure that none of its manufacturing plants are breaking laws related to production such as employing minors or paying less wage compared to the stated amount in the Wages Act (Mullerschon, n.d.). Economical The economy in India is a bit stable at this point, thus, launching a new chocolate bar would be supported (Mullerschon, n.d.). The stable economic condition has increased the per capita income which signifies that the disposable income of the populace of the country is higher at present. High rate in consumer spending and decrease in interest rates would help to encourage launching of a new brand (Mullerschon, n.d.). Increase in the population of middle income group would signify increasing demands. The cost of production in India would be low compared to other countries, thus, this would make market penetration easy for Cadbury. The market of chocolate in India is growing and there is immense scope to be exploited. The chocolate industry of India is a unique mix of attitudes, high consumption patterns, income levels, beliefs and spending. The country has high sales and many segments that are still uncovered (Doddamani, 2011). Social People nowadays have become quite health conscious and are trying to cut down on soft drinks, confectionaries and sweat meat because of high cholesterol and calorie. However, Cadbury has an edge over this as their products are becoming substitutes of sweet meat and confectionaries. Cadbury enjoys strong customer loyalty and their opinion is high regarding this company, thus, there is not any reason for the consumers to stop buying their products. The gift culture in India is growing, which will also enable to keep a sustained demand of Cadbury’s products (Mullerschon, n.d.). Technological Production is increasing because of machines with high technology and this enables the factories to produce in mass without compromising with the product quality. Media such as the radio, the television and the internet provide scope for advertisements at cheap rates. This allows the company in endorsing their products effectively. The internet too has become a good place to buy goods even products such as chocolates. This makes the buying process easier and less time consuming and allows larger sales and gets a scope to cater to a different consumer group (Mullerschon, n.d.). Environmental Cadbury holds health as well as safety management as an important aspect of the company. While carrying out their business activities, they ensure minimisation of their impacts on the environment and also ensure better safety and health conditions for their employees. Cadbury also work towards improving the communities and the present environment in which they operate (Cadbury, n.d.). Legal The legal factors consist of various laws and legal procedures that can limit and influence the company immensely. Cadbury can get affected by the legal factors such as advertising taxation as well as regulations along with others (Bhawanji & Et. Al., 2011). Core Competencies Cadbury has a strong global presence and has a total market share of 9.9% across the globe. It has a strong brand name since years and thus, consumers have started associating quality with the brand. Cadbury has a wide array of products from health drinks to chocolates to gums and thus, has a loyal consumer following in all age groups. The company leads in manufacturing competence and innovation. It is the largest supplier of confectionery globally and in terms of India’s perspective, the company has been successful in changing the tradition of having sweetmeat as Cadbury has replaced sweets with their chocolates in the country, which is one of the most important competencies of the company aimed to be beneficial for the new brand as well. SWOT Analysis Strengths Cadbury being the largest supplier of confectionery and has a considerable market share. It has a strong financial strength in terms of sales turnover. It has a strong established name for its brand as well as manufacturing competence and leads in innovation. The company has an advantage of being totally focused on gum, candy, chocolates and has developed a unique quality of understanding their consumers in those segments. These aspects can be stated to be the core competencies of Cadbury that will enable their new brand to sustain in the Indian market. It has grown successfully through its innovations and acquisition strategies. Acquisitions such as that of Adams in the year 2003 enabled the company to expand its business into certain extremely important markets such as the US. It has an employee strength of 60,000 worldwide and market capitalisation of approximately 10 Billion Pounds. It is also the third largest company in soda i.e. soft drinks (Ganesh, n.d.). ; (Mullerschon, n.d.). Weaknesses The company is absolutely dependent on the beverage and confectionery market, while others such as Nestle is more varied in its portfolio which helps in investing the profits in R&D along with other business segments. The other competitors of Cadbury are more experienced internationally. Cadbury always had a strong presence in Europe and is quite new in the US and so has a weak understanding of the markets compared to its competitors (Ganesh, n.d.). Opportunities It has ample opportunities to expand in India, Russia and China where the markets are emerging because of the boost in consumer wealth and population and as a result of which the want for confectionery products are escalating as well. It has existing opportunities to increase its share in market through acquisitions. To survive in the FMCG market, it is important to lessen costs and increase efficiency. Cadbury’s plan of cost efficiencies aim at bringing down the cost by moving production to countries where labour and raw materials are comparatively cheap and by bringing efficiency in its supply chain, procurement, investing wisely in R&D and global sourcing to reduce costs. Innovation is the key factor in the current market so products with low calorie and sugar free should be developed and there is a strong demand for natural, low-fat and organic confectionery which needs to be explored and exploited (Ganesh, n.d.). Threats Competitive stress from other national and global suppliers and aggressive endorsement and price activity by the competitors are threats to Cadbury. Rising consciousness about calories and obesity can affect the demand of the core products of Cadbury (Ganesh, n.d.). Increasing transportation costs and international taxes charged on goods, especially on confectionaries and beverage goods are bound to affect the company (Mullerschon, n.d.). Marketing Objectives New Product Cadbury has a strong name of its brand across the globe and especially in India. Brand name is quite important in the business of confectionery. A brand is a feature mark or name that makes a distinction between each product. A superior brand efficiently guarantees of delivering all those qualities that a consumer particularly connects with the brand. Hence, it is quite vital that when a new product is launched in the market under a particular brand, it should be made certain that the product lives up to the quality expectations associated with the brand. The new product in this context that is to be launched under the brand name of Cadbury is ‘Snow Flake’. Snow Flake is a flake bar that will be covered with a coating of white milk chocolate (Cadbury, n.d.). Source: (Cadbury, n.d.). Developing & Implementing a Marketing Plan The major trends of the marketing practices of the present industry emphasises on the value i.e. the perfect combination of product quality and that of a reasonable price. Development of an effective and well-grounded marketing plan is exceptionally important as it is the sole contributor behind the triumph or collapse of a product. Firstly, a thorough scrutiny of environment, customer, and competitor and product-market definition has to be conducted. Developing a marketing plan engages settling on the procedure of merging the variables of marketing to satisfy the market needs. Preparation of a plan engages choosing on the frequency and planning cycle, settling on the application and nature of the final plan, estimating expenses and forecasting revenues along with the effective choice a plan format. In order to reach out to the customers and satisfy their wants, a proper marketing approach concerning the variables of marketing that is the marketing mix is important (Loudon & Et. Al., 2005). Adoption of relevant pricing approach is important for a business. Cadbury should develop an approach of penetration pricing by keeping the prices low in order to enter the mass market successfully. However, the price should not be too low for the product because the product will be projected as a special one and not any regular bar. This would help the product to be perceived with a difference by the people. But, the company should find out a way to compensate for the relatively higher price by any added feature. Thus, the prices will not be perceived high by the customers in comparison to the features that the product is providing. It is important for a pricing strategy to adapt to the competitive, economic and environment conditions. Promotion strategy is among the most significant features in a marketing plan. The promotional strategy of the company should be effective, thorough and well-thought for successfully entering the market. Paid advertising is considered among the effective forms of promotion (Kurdina, n.d.). A marketing plan needs to be chalked out keeping in mind the above factors. A proper pricing and promotion strategy is significant while launching a new product. Pricing and promotion are the key factors that help the new product to enter and make a way into the market. SMART Objectives From the above marketing plan, the SMART objectives for the company can clearly be defined. Cadbury is quite specific about the fact that the stakeholders must know about the new product that is about to be launched. Cadbury has plans to promote the product in such a way that it would create a sense of curiosity which would lead the people to buy the product and try it and the company is sure to cover the costs of the new product in a short span which makes it measurable. Cadbury should plan to efficiently promote product in the market. The ways of promotion would be quite effective which would help the company achieve whatever it has planned about the product and the company’s aim to gain a grip in the market with the new product, would be realised. Thus, the achievable objective for the new brand in the Indian market would be to establish its particular buyer segment and also to penetrate among the non-regular purchasing segment of Cadbury products. The awareness of the product and the promotions will help the company in generating sales which is realistic. A specific time frame of around six months will be set within which the product has to capture the market and the consumers in order to harvest profit from it in the coming years (Brethauer, 2002). Smart Objective Diagram Source: (Learn Marketing, n.d.). Marketing Plan Market Segmentation & Target Market Cadbury has always acted quite wise while segmenting the market and targeting its consumers. Half of the job of targeting consumers is done through the advertisements itself. In the outset, when Cadbury came into India, it mainly decided on serving the children’s segment of the market and it emerged quite successful in the segment. Gradually, the company’s strategy changed and it focused on all age groups, by putting it this way that there is a child inside everyone and everyone enjoyed the taste of chocolate. And since then Cadbury had started catering children as well as adults. Cadbury did not stop there and then it started to focus on the rural population of India which had not been explored yet and had a lot of potential. At present, Cadbury caters to all age groups and all classes of people, thus, while launching the new product, Cadbury will not have much difficulty in segmenting the market. Moreover, the customer reliability on Cadbury is quite strong. The new product is not fully made of chocolate but it has a crunchy wafer like taste as well. It is somewhat similar to its existing product ‘Perk’ but it has white milk chocolate instead of dark chocolate. The white milk chocolate market in India is still left unexplored to certain extent. Cadbury should make the most of it and try to target the young teen age group and the children as they are quite fond of the taste of wafer. Once the product gains popularity among the young age group and children, the company should focus on the middle age crowd. Cadbury has both consumers in the urban as well as in the rural sector, thus, it should focus on both the sectors, however the new product is supposed to be projected as special from the regular ones, therefore, emphasis should be initially laid on the urban sector and then on the rural (India Study Channel.com, 2011). From an international perspective, it must be noted that the Flake Bar already has its presence in countries such as Australia, New Zealand, Ireland and South Africa. The product is quite popular in those countries although the composition is a bit different than that of India. As the flake bar is quite admired among the female population in Ireland, thus, even in India, the female population must be targeted as their consumers. Positioning and Differentiation Marketing is the most vital activity in a business and specially while launching a new product in order to position the product effectively. Thus, it is important to have a proper and effective marketing plan. Firstly, the unique selling proposition (USP) of the new product should be developed which will differentiate it from the other similar products of the competitors. The uniqueness can range from quality to price to taste. In this case, the Flake Bar has white milk chocolate and this should be highlighted. Secondly, it is important to feature its quality and satisfaction in terms of quality. It is important to know that while developing a marketing plan, the focus should be on the consumer and not on the product. In the case of the new brand to be launched, which is a confectionery product, the satisfaction that the consumers will get after eating it should be the main focus. Thirdly, identification of the target market is necessary to be conducted which would include the group of people to whom the company will cater to. A list of their age, socio economic status, gender and other characteristics should be made to position the product properly in the market. Then, the places should be determined where the target consumers visit and the form of media that they read or watch. Marketing materials that would help to reach to the target consumers should be developed and finally a plan must be chalked out to position the marketing materials where the target consumers will view it. The strategies to be used should be focused on the consumers such as where do they go and their responsiveness to the various types of marketing (Truex, 2011). Cadbury should effectively plan to advertise the product extensively so that everyone becomes aware of the new product that is to be launched. In order to market the product, road shows should be planned by which the consumer can be informed about the product. The marketing plan should include road shows, frequent advertisements, press releases, sponsoring shows and events. The product should be offered to the people in restricted quantities as a part of free trial so that the people get to taste the product which would stimulate curiosity and make them crave more for it and this will surely make them go and buy the product once it launches. Cadbury has at all times been quite specific about targeting consumers through their advertisements, thus, even for this new product they should design the advertisements specifically to attract the consumers that it is targeting and the way in which it wants to position its product. Road shows and campaigns in super markets and shopping malls would help the company in effectively implementing the marketing plans as in India, the shopping malls are increasing in all the cities, thus, and it would enable Cadbury to reach a large number of consumers at a single place. Marketing Mix Strategies Product: The product should be placed uniquely in the market through its marketing strategy and the new characteristics and the new taste should be highlighted aiming to catch the fancy of consumers. The features that set it apart from all other brands should be focused on to attract new consumers and the difference in taste from all other existing products of the same brand should also be highlighted to tempt the existing consumers to try out the product. Price: The price of the product should be kept reasonable but a bit higher compared to the ordinary existing bars in order to add a feel of class and the high price should be repaid by adding larger amount so that the consumers do not feel indignant. The price should be kept fair and not too high as the fair price would help the product to enter the market easily and this would encourage the people to attempt the new product. Place: The product should be made available everywhere possible such as super markets, shopping malls, gas stations and even in small outlets where the other Cadbury products are already available. The company must ensure that all the outlets have an ample supply of the product. There should also be an online order processing facility for the bar. This new added feature would surely attract the teenage generation who are quite comfortable with the online concept and would make the product popular among them. Promotion: An advertising campaign should be launched by Cadbury just before the launch of the product. It should exploit most of the media to the hilt in order to reach to each and every individual. It should have its posters and hoardings in all the possible places so that no one misses out. And shortly before the launch of the product, Cadbury should have a press release and should support events as much as possible, should conduct road shows and go to super markets and shopping malls to offer free trail of the product to the people and arouse the curiosity among them. It needs to be done on a minimum scale as this will make them crave for more. Both under and above promotion should be conducted in order to ensure that everyone is aware of the commencement of the product. Distribution Plans The basic aim and goal of a marketing plan is to get people to buy the new product. And without effective distribution arrangement of the product, this seems quite impossible. An efficient distribution plan will reduce the investment costs. As Cadbury is already an established brand, so it should rely on its active distributing channels and intermediaries. The intermediaries should be provided a proper guideline as how the new product is required to be carried (Longnecker & Et. Al., 2006). The company should make sure that the product is distributed in all the possible outlets including super markets, shopping malls and gas stations. The product should have a wide distribution so that it catches the eyes of the consumers. The product should be distributed to wholesalers as well as retailers. The proper implementation of the above strategies would surely help the product get a chance to grab the market. The main concern of Cadbury should be to promote and advertise the product and then to make sure that consumers get a product of good quality with a good taste. This bar is surely different from other competing products available in the market and this would help it to occupy and create its own segment of market. The main task of Cadbury should be to project the product as a quite different and special one from the others so that the consumers feel the urge to try it in order to see if it is really true. The above strategy, if executed properly, would surely make the product successful and help the company earn profit from it over the years (Mullerschon, n.d.). Evaluation of the Appropriateness of E-Business Strategies The use of computer and internet is increasing in day-to-day life. People are getting quite used to the internet that even buying and selling is transacted online nowadays and this is enjoyed by many people, especially by the younger generation. Cadbury is targeting the younger generation and children as their target customers for their new product that is to be launched. It is a known phenomenon that today’s youth and even the children are quite internet savvy. They spend a lot of time surfing the internet. Thus, Cadbury should have the facility of purchasing its new product online. Online purchasing facility would attract the target consumers for sure. Buying the product online would save time and would add an extra amount of excitement in the process. This concept of online buying would surely add an extra zeal to the product. Cadbury should have a special section in their website where online buying of the product would be done and this feature should be highlighted in the advertisements for the product. Online buying would also attract people who want to place orders for huge quantities. The orders can be placed with the help of just one click. This feature would also add an edge to the product and distinguish it from the other competitors. Using E-Business in Global Marketing Mix Online buying and e-mailing can be used as a form of e-business in global marketing mix. This will come under the place factor of marketing mix. The facility of online buying the product will help to gain the product popularity as everyone today is quite used to the internet and if buying a product or placing bulk order for the product can be made easy through online, then it would also save time (Bizcem, 2011). Global Marketing Mix and Expansion Global marketing mix consists of the same factors such as product, place, price as well as promotion. However, there will be certain alterations in the factors of the marketing mix as this is being analysed globally. Similarly in case of the new product, while planning a global marketing mix, the basic product would remain unchanged but there would be certain changes in the taste and packaging suiting to the global needs or rather the countries where it is to be introduced. The price of the product will also vary because the price charged in India for the product cannot be charged in other countries, thus, a difference in price is bound to exist as the cost of production and transportation will differ from country to country. The ways of distributing the product will also vary. Places where the product would be made available would again depend on the nature of product. In case of the new product, as Cadbury operates globally, so, it would be easy for the company to decide the places of availability. But, making a product available globally has its own advantages as people who are loyal to the product and brand would be happy to find the product in a different country and this would make the product popular. These are the ways by which the global marketing mix can be expanded (Hollensen & Banerjee, 2009). Marketing Budget Taking into account the promotional plan that has been designed to launch the new product, a marketing budget needs to be prepared. The estimated budget for marketing is made below: Preparation of a Marketing Budget Marketing Strategies Expenses in Pound (?) Advertisement: Television 30 seconds airing during Noon-time shows (For 6 months) 12163 Prime-time shows (For 6 months) 21590 Billboards 12197 Magazines Full Page 12676 Posters 7042.5 TOTAL 65668.5 Road Shows & Campaigns 7042 Press Release 5634 Events & Sponsorships 20422.5 Sales Promotion 26056 Total Expenses 124823 Source: (Scribd, n.d.). Conclusion The entire study provides a complete picture of the whole process of launching a new brand in a new market. The above study signifies that how important it is to have a proper marketing plan of the complete process to successfully launch a product and also what are the other factors that needs to be taken care of and those that contributes towards the successful launch and survival of a product. The complete process of developing the product and that of marketing has been planned after performing strategic management tools like PESTLE analysis and SWOT analysis. Planning of the complete process needs analysis of the factors of marketing-mix and that were also taken into consideration in the above study. It would not be wrong to suggest that even for a brand such as Cadbury, the process has to be analysed minutely because a small mistake or loopholes in planning might result in a huge loss. References Bhawanji, D. & Et. Al., 2011. Legal Factors. Cadbury Dairy Milk. [Online] Available at: http://www.scribd.com/doc/51525481/cadbury-final [Accessed July 07, 2011]. Bizcem, 2011. Important Role of E-Mail Marketing in Electronic Commerce. Business Marketing And Ecommerce. [Online] Available at: http://bizcem.com/e-commerce/important-role-of-e-mail-marketing-in-electronic-commerce/ [Accessed July 08, 2011]. Brethauer, D., 2002. New Product Development And Delivery. AMACOM. 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