Marketing Performance for Cadbury - Essay Example

?Marketing Essentials Table of Contents Overview of Cadbury 3 Analysis of Company Situation 4 Analysis of Market Situation 5 SWOT Analysis of Cadbury6 Strengths 6 Weaknesses 7 Opportunities 7 Threats 7 Competitor Analysis of Cadbury 9 A New Product Idea for Cadbury 10 Future Marketing Strategy 11 Marketing Objectives 11 Marketing Strategies 12 Marketing Mix 12 Forecast and Budget 15 Financial Forecast 15 Sales Budget 16 Projected Cash Flow 17 Conclusion 18 References 19 Bibliography 23 Overview of Cadbury Cadbury is one of the largest confectionery organisations with an excellent portfolio of chocolate, candy brands, milk food products, snacks and gums. It is presently possessed by Kraft Foods. The head office of the organisation is situated in London of the United Kingdom but it operates more than 60 diverse countries (Cadbury, n.d.). Cadbury was established in the year 1824 by John Cadbury with the idea of delivering excellent tea and coffee to its customers. It was originally named as Cadbury Schweppes Overseas Ltd (CSOL) after its merger with Schweppes. The mission of the organisation is to offer best quality products to its customers in order to enhance its market share and brand identity in the markets of the United Kingdom as well as globally (Cadbury, n.d.). Thus, in the year 2007, Cadbury undertook a vital strategic move and shifted from the sector of beverages towards confectionary, which not only augmented its corporate image and but its profit margin as well. It started developing various products such as ‘5 stars’, ‘Perk’, ‘Celebrations’, ‘Temptations’, ‘Diary Milks and Gems’. Along with this, it also has offered milk food beverage as well namely Bournvita. Thus, it can be affirmed that Cadbury is a renowned brand and in terms of financial aspect held annual revenue of ?5, 384 million in the year 2008 (Cadbury, n.d.). The major objective of this assignment is to prepare a marketing plan for Cadbury for the next one to three years. It also highlights the situation of the company and the market in the current scenario. The paper also focuses on the SWOT analysis and competitors’ analysis in order to evaluate the existing position of the organisation, Cadbury in the global market. Moreover, it also includes development of an innovative product idea for the organisation along with financial forecasts for the product for the future three years. Analysis of Company Situation Cadbury is a reputed organisation and it mainly operates in international confectionary market. It is the second leading supplier of chocolate and other sugar confectionaries in the market of the United Kingdom (Cadbury, n.d.). As the company is operating from many years so it has established an apparent market brand image that enhanced its position to a large extent among other leading competitors. Moreover, as the organisation is functioning in global markets, it includes high prospects of diversifying the booming products of one market to other emerging markets. This helps to augment the market share and uniqueness of the brand in the varied emerging markets all round the globe (Scribd, n.d.). Although Cadbury functions in more than 60 countries, the maximum turnover is originated from the markets of the United States, South Africa, Ireland and United Kingdom. Along with these, other promising markets namely India, Thailand and China also offer significant impact on the growth and development of the Cadbury brand. The other important factor, which enhanced the individuality of the brand among other apparent players in the market, is heavy concentration and investment over advanced technologies. This helped the organisation to offer various new products at an efficient cost, which enhanced the dependency and receptiveness of the customers (Scribd, n.d.). Thus, it facilitated in improvement of the financial situation of the organisation as well. In addition, the strong administration team with centralised hierarchical structure facilitates Cadbury in maintaining a uniform culture, which amplifies the satisfaction and motivation level of the employees. It helps in enhancing the dedication and commitment of the employees resulting in innovation of varied new products and/or services to its customers in order to cope up with challenging environment (Cadbury, n.d.). However, Cadbury also includes certain limitations as well. Due to increasing consciousness for health, the demand of its products is declining at a rapid pace, which might enhance business risks. Moreover, Cadbury is mainly concentrated into confectionary and beverage market, whereas other challengers such as Nestle also diversified into varied other product portfolios (Scribd, n.d.). Thus, from the above analysis, it can be revealed that Cadbury is a quite successful organisation with renowned personality and traits. Analysis of Market Situation In this era of globalisation, the confectionary industry is enhancing at a rapid speed due to the increasing demand of the chocolates. This is mainly due to the introduction of various products by Cadbury namely hard-boiled candies, eclairs, toffees, chewing gums, lollipops, bubble gums and mintz among others, which enhanced the attraction of its customers (Cadbury, n.d.). As a result, the market share of Cadbury augmented to a significant extent as depicted by the below diagram. This also augmented the total turnover of the organisation in first quarter of 2011 by 11 percent, which depicts US$12.6 billion due to amplification of sales in global market. This proved quite beneficial both for Kraft Foods as well as for Cadbury (Forbes, 2011). Market Share of Cadbury in Global Market Source: (Martyn, 2010). Moreover, due to its large market segment ranging from adults to kids, the inimitability of Cadbury is augmenting in international markets. This helps to preserve its competitiveness among other evident market players (Scribd, n.d.). Thus, from the above discussion, it can be analysed that the market situation of Cadbury is stable and uniform due to its high market growth rate and eminence. SWOT Analysis of Cadbury Strengths In recent times, Cadbury is the world’s foremost confectionary organisation which includes the principal market share across the globe. This proves quite beneficial for Cadbury to penetrate into various emerging markets (Cadbury, n.d.). Moreover, due to the use of advanced technologies, Cadbury maintains a constant growth rate, which enhances customer loyalty along with economies of scale. Another most important advantage of Cadbury is that it possesses a large target market of all age groups (Cadbury, n.d.). Moreover, all the age groups hold high preferences for ‘chocolates’, ‘candies’, ‘chewing gums and candies’, which help to enhance its efficiency and efficacy in global market. The other significant strength of Cadbury is that it encompasses a strong distribution network than any other competitors in this segment, which also augments its attractiveness among the customers (Scribd, n.d.). Weaknesses One of the most significant limitations of Cadbury is that it is mainly reliant on the confectionery as well as beverage segment, which lowers its diversification rate. Besides, the other competitors such as Nestle which tender more concentration in offering varied product portfolios, in order to attract more customers (Cadbury, n.d.). Other than this, Cadbury has very little anxiety of cannibalisation over its chocolate brands as compared to other players, which might prove detrimental for the organisation to sustain in long run (Scribd, n.d.). Opportunities Apart from strengths and weaknesses, there also exists certain opportunities as well. Due to good brand identity, Cadbury comprises higher prospects of penetrating into new emerging countries (Cadbury, n.d.). Moreover, it is also attempting to offer various inventive products, in order to satisfy alternating customer demands. It is also endeavouring to focus more on its main products such as Cadbury dairy milk, halls as well as eclairs, in order to improve the effectiveness of the organisations. In addition, Cadbury is also endeavouring to increase its potential in the market, by co-branding with other diverse food manufacturers (Scribd, n.d.). Threats Although Cadbury is a reputed brand, still it is facing varied types of threats. Due to the rising health diseases such as obesity, the demand for products having large quantities of calorie is diminishing (Cadbury, n.d.). This might prove hinderous for the organisation to sustain in the long run. Moreover, due to high competitiveness, entrance of new players in the market might also hamper the sustainability of the organisation. Besides, due to insistent promotion and pricing activities, price wars may also develop among the competitors thereby hampering the image of the company (Scribd, n.d.). Competitor Analysis of Cadbury Competitor analysis of Cadbury can be prepared with the help of product features matrix. It includes five characteristics such as customisation, performance, reliability, durability and style in order to analyse Cadbury from its competitors. The prime competitors of Cadbury are Nestle, Mars and Hershey. Cadbury does not follow the policy of customisation as compared to its competitors in order to retain its brand status (Cadbury, n.d.). For this reason, Cadbury can quite easily sell the products in the market among other players. The performance of Cadbury is also quite well-known as it offers diverse array of products to its customers of varied age groups such as gums, candies, kitkat, perk and celebration gifts, which amplified its turnover of confectionery products to a large amount (Cadbury, n.d.). In addition, the durability of the products of Cadbury is also very good so that it can sustain even in stressful conditions as well, which also augmented the quality of the brand. Other than durability, the customers all round the globe rely on the products of Cadbury as it is believed to be free from any toxic materials, hindering the health. This factor acts as the catalyst for Cadbury by reducing the switching cost of the buyers to any other competitor brands, which is extremely beneficial for any organisation to sustain in this competitive environment. Moreover, the packaging style of the products of Cadbury is made, entirely keeping in mind the age groups, which offers high appreciation from the target customers (Scribd, n.d.). Thus, it can be revealed from the above discussion that Cadbury is a premium brand which controls the market of confectionery involving large range of sales growth. Product Features Matrix Product Features Competitors Cadbury Nestle, Mars and Hershey Customisation Customised Do not use customisation policy Performance Good Reputed, due to large number of products of diverse age groups Durability Good Cadbury products can be kept in hot atmospheric conditions for long time Reliability Good No existence of toxic ingredients Style Good In keeping with age groups Source: (Scribd, n.d.). A New Product Idea for Cadbury In the wake of industrialisation, the global economy is offering wide opportunities for diverse new brands of chocolates, resulting in augmentation of the competition. In today’s scenario, chocolates are no more considered as luxury items, which can be consumed only by the high class customers. Chocolates are positioned as light meals which can be consumed along with the heavy food intakes by various age groups (Cadbury, n.d). For this reason, it is essential for the confectionery companies such as Cadbury to introduce diverse types of the products in order to maintain its leading position among other industry competitors. Cadbury may introduce a new product named 5-Star Jelly for all age groups. This is mainly because people of all age groups have high interest for chocolates. Moreover, it may include various flavours such as ‘mango’, ‘pineapple’, ‘strawberry’ and ‘orange’ in order to attract large range of consumers. Cadbury could promote 5-Star Jelly in various weights such as 250 grams, 200 grams and 150 grams so that it can be afforded by customers of varying income groups. In addition, the prices of all the three weights of offering of 5-Star Jelly would range approximately ?12.00, ?10.00, ?8.00 with a slogan of ‘taste with health’. It would help to enhance the productivity and revenue of the organisation. Future Marketing Strategy Marketing Objectives In order to develop a profitable and loyal relationship with its customers, Cadbury attempts to develop various ranges of products (Armstrong & et. al., 2009). Other than this, in order to satisfy and understand the altering needs and desires of the customers, Cadbury endeavours to deliver superior value. This may enhance the competitive advantage of Cadbury among other competitors in the global market (Scribd, n.d.). Thus, Cadbury might introduce 5-Star Jelly in the international markets in order to accomplish its SMART marketing objectives. SMART signifies specific, measurable, achievable, realistic and time specific. Cadbury would launch 5-Star Jelly in order to enhance its range of customers which might prove valuable for the organisation to survive in this aggressive market. It might also help Cadbury to increase its market share along with its unique selling propositions (USP) (Kotler & Armstrong, 2009). The key objective behind this invention is to maximize its profit. This is the most essential corporate aim of an organisation operating in global perspective. Other than this, Cadbury can aspire to enhance its growth rate along with its value in the overseas markets by selling inventive products like 5-Star Jelly, which can be easily achieved due to its strong and skilled human resource team and financial strength. Thus, the uniqueness of the new product of Cadbury can be enhanced within 1 year resulting in improvement of its confectionery segment (Scribd, n.d.). Marketing Strategies Marketing Mix The marketing strategy for the introduction of any new product in a fresh market can be done with the help of marketing mix. It is one of the essential tools to analyse the market situations in global respect. It mainly includes 4Ps such as product, place, price as well as promotion (Scribd, n.d). Product The new product of Cadbury is 5-Star Jelly. It includes low calorie chocolate in varied flavours such as pineapple, mango, strawberry and orange (Scribd, n.d). Product Strategy The target market of 5-Star Jelly is customers of all age groups. It would facilitate a customer to obtain an ‘enticing treat’ at least calorie. Cadbury can easily position the product of 5-Star Jelly in the emerging markets due to its competitive advantage of high quality (Scribd, n.d.). Price The main objective of pricing is to offer excellent quality of products at effective price (Kotler & et. al., 2009). Pricing Strategy Cadbury might offer 5-Star Jelly in 250, 200 and 150 grams of weight at prices of ?12, ?10, ?8 approximately to make it reasonable for all income groups. Thus, it can utilise competitor based pricing (Scribd, n.d.). Place 5-Star Jelly can be launched both in emerging and existing international markets such as India, China, the USA, the UK and South Africa. Promotion Promotion is essential to make the customers conscious about the features of the new product. Promotion Strategy Although Cadbury is a renowned brand, still 5-Star Jelly may be promoted with the help of television advertisements, hoardings and billboards along with a reputed brand ambassador. It is necessary as it might highlight the features such as low calorie product offered at an efficient cost (Scribd, n.d.). Branding Strategy 5-Star Jelly would be positioned in the market as an ‘Enticing Treat’, with a mouth refreshing taste at a reasonable cost. It has the potential to become irresistible for the users (Scribd, n.d.). Thus, it can be stated from the above discussion that Cadbury might offer more attention over the marketing strategies while introducing a new product like 5-Star jelly in both the domestic and international markets. Forecast and Budget Financial Forecast Financial forecast mainly includes the future estimation of financial results for a particular company. It can be prepared by analysing both the internal accounting data of the company along with external market factors. On the other hand, budget is a type of financial plan, which includes the list of all preplanned expenses and revenues. It is utilised as a tool for planning and control. The main objective of preparing a budget for the new product launch of Cadbury would be to accumulate, spend and utilise revenue in research and development activities, in order to develop the image of a brand and a company as well. With the help of budget, the projected success of a company can also be estimated, which helps the sales department to plan their future steps and ideas. Moreover, forecasting and budgeting is also a significant technique which is utilised in order to evaluate the sales growth and the profit margin of a company, after introduction of a new product in varied markets (Chandra, 2008). In addition to the above description, a financial plan also includes certain elements such as economic assumptions, sales forecast, cash budget and asset requirements (Chandra, 2008). Economic assumptions include certain basic hypothesis about the economic environment such as interest rate, exchange rate, government intervention policy, inflation rate and demand of the products among others. Sales forecast is the initial stage of a financial plan and it may include profit and loss details along with balance sheet figures. Cash budget is also another important aspect of financial plan and it offers a detailed analysis about the total cash inflow and outflow of an organisation while introducing a new product in the markets. Moreover, the actual requirement of assets is also necessary while prepararing a financial plan for an organisation. It offers comprehensive view about the requirement of varied assets such as working capital, human resources, operating capital in the entire financial year, in order to analyse the accurate financial expenditure of the organisation (Shim & Siegel, 2000). Hence, it can be said that financial forecast and budgeting is an important technique, which is utilised by an organisation, in order to evaluate the total sales, revenue along with costs incurrence. Financial Forecast and Budgeting In Global Market For 5-Star Jelly 1st Year (Approx) 2nd Year(Approx) 3rd Year (Approx) Net Sales ?10,000 ?20,000 ?30,000 Expenses: Research and Development ?2000 ?5,000 ?7000 Sales and Marketing ?1000 ?800 ?700 Promotion Expense ?500 ?400 ?400 Sales Force ?300 ?200 ?400 Distribution ?200 ?200 ?500 Total Operating Cost ?3000 ?5800 ?7700 Net Profit (Total Sales- Total Expanse) ?7000 ?14200 ?22300 Source: (Slideshare, n.d.) Sales Budget 1st Year (Approx) 2nd Year (Approx) 3rd Year (Approx) Expected Sales (Units) 1000 2000 3000 Unit Sales Prices ?10 ?10 ?10 Total/ Net Sales (Approx) ?10,000 ?20,000 ?30,000 Source: (Shim & Siegel, 2000). Projected Cash Flow The projected cash flow is presented below in a graphical presentation. This provides an idea about the total sales and expenditure in all the three years after introduction of 5-Star Jelly in global scenario. Source: (Scribd, n.d) Conclusion Thus, from the above analysis, it can be revealed that introduction of an innovative product i.e. 5-Star Jelly could prove highly beneficial for Cadbury to enhance its market share and turnover in the next three years. Hence, introduction of 5-Star Jelly is one of the significant strategies, which can augment the sustainability of Cadbury in long term. Thus, the generated revenue can be utilised by Cadbury in research and development so that more new products can be developed in order to retain its loyalty in the market. References Armstrong, G. & et. al., 2009. Marketing: An Introduction. Pearson. Cadbury, No Date. Home. Chocolate Ideas. [Online] Available at: http://www.cadbury.co.uk/ourproducts/tomorrow/Pages/eureka.aspx [Accessed April 25, 2012]. Cadbury, No Date. Home. Cadbury Products. [Online] Available at: http://www.cadbury.co.uk/ourproducts/Pages/ourproducts.aspx [Accessed April 25, 2012]. Cadbury, No Date. Home. Cadbury & Chocolate. 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