The Marketing Strategy of Cadbury through the 4Ps of Marketing - Case Study Example

Running Head: MARKETING REPORT ON CADBURY CHOCOLATE Marketing Report on Cadbury Chocolate [The of the will appear here] [The of the writer id will appear here] [The name of the course will appear here] [The name of the course number will appear here] Contents Contents 1 Reuters, 2010, Factbox: British confectioner Cadbury, Retrieved from http://uk.reuters.com/article/2010/01/14/us-cadbury-factbox-idINTRE60D1XX20100114 [Accessed March 5, 2013] 9 Reuters, 2010, Factbox: British confectioner Cadbury, Retrieved from http://uk.reuters.com/article/2010/01/14/us-cadbury-factbox-idINTRE60D1XX20100114 [Accessed March 5, 2013] 10 Introduction Cadbury is one of the most recognized confectionary brands in the world and more specifically the company is known for the chocolates that it produces including brands such as Diary Milk, Perk, Crème Eggs, Flake etc. The company continues to grow as the global market is adopting the taste of chocolate. The younger market segment is more attuned to the taste of chocolate and thus the industry is bound to grow further in the near future. This report will explore the marketing strategy of Cadbury through the 4P’s of Marketing developed by McCarthy in the 1960s. According to McCarthy’s theory, the right mix of the 4Ps needs to be developed in order for the marketing strategy to effectively work (Kotler, Armstrong, Wong and Saunders (2008). Thus, the report will analyze the 4Ps of Cadbury and present recommendations based on this analysis. Company Overview Cadbury is a UK based confectionary company that is owned by Mondelez International Inc. and is operating in more than 50 countries with a geographical network expanding to more than 250 countries of the world. The company is known for the manufacturing of good quality chocolates with the most popular brand being Diary Milk. The company began operations in the 1800s due to the vision and hard work of John Cadbury who began operating through a grocery store and later expanded into more stores and more varieties. The company, during the 1960s, merged with Schweppes but later demerged and then in 2009 again merged with Kraft Foods. This again did not work and in 2010, the company began being owned by Mondelez International Inc. (Bradely, 2012). Right now the company has a diverse product range and recently it launched a new campaign that has improved the brand value of the company further. Though manufacturing costs for the company have been increasing and recession has impacted the company, the company still hopes for better sales in the future. Competitors of Cadbury and Competitive Advantage With its chocolate brands, Cadbury faces its main competition from Nestle, Mars, Throtons Plc, Lindt and Spruengli and Ferroro within the UK market. With each new country, there is a slightly different competition. The main competitor for Cadbury remains Nestle since the product portfolio of Nestle closely matches that of Cadbury. Mars is yet another brand that is in direct competition with Cadbury and ranks as the top chocolate brand in the world. Cadbury faces indirect competition with Thortons Plc, Lindt and Spruengli and Ferroro since these chocolates are premium brands and market to the upper segment rather than the masses. Cadbury’s main competitive advantage is its diverse product range along with affordable prices and good quality chocolate that contains one and half glass of milk. Cadbury also has a strong brand loyalty as a result of its good promotion. Price The pricing strategy of Cadbury for its chocolates is done very competitively. The major competitor of Cadbury is Nestle since the company’s product range closely matches those of Cadbury. Therefore the prices of Cadbury’s products are set within the same price level as those of Nestle. When prices are competitively set, the company ensures that it achieves profit through increased sales. Cadbury is able to ensure competitive pricing after the mechanization of its factories in the 1920s and 30s which allowed it to reduce the cost of production while maintaining a superior quality of the product (Bradley, 2012). Thus, Cadbury is able to offer low pricing since it has achieved economies of scale in its production which means that the company can make high profits through high amount of sales. The company also reduces its prices during holiday and special seasons so as to make the product more easily available to the masses. This discount strategy by Cadbury ensures that brand loyalty is increased. When people consume certain brand during their moments of happiness such as during Easter or Christmas holidays, they begin to associate the brand with the particular emotion. Therefore, by ensuring that consumers buy Cadbury during special moments, the company becomes a brand ambassador for those moments. Product Cadbury has a wide range of chocolates available. Consumers can choose from different varieties and different sizes. Cadbury sells its chocolate during sub-brands that carry the original Cadbury logo. These sub-brands include Diary Milk, Bubbly, Crunchie, Flake, Time out, Bournville, Dream etc. All these brands are distinct from each other and thus cater to consumers with different tastes. For example, Cadbury Dream is meant for the consumers who have acquired the taste of white chocolate while Bournville is meant for those who enjoy a rich taste of chocolate. Cadbury has further divided its products in the ways that consumer consume. It has special products for special occasions. For example, for Easter Cadbury offers a wide range of products including Crème Egg, Easter Egg Trail Pack, Chocolate Bunny, Mini Eggs etc. The advantage of revising the product packaging for different occasions is that people are attracted to new packaging when they are considering buying a product for their loved ones. In terms of usage also Cadbury has been considerate towards its consumers. People buy chocolate for different reasons. They buy it to give themselves a special treat, they buy it for friends, they buy it family and they also buy it to give it as a special gift for someone special. Realizing this, the company has introduced different packaging in different sizes. For example, while Cadbury is available in normal wrappers for individual usage, it is also available in special boxes and trays to be given as a present. Since Cadbury is spread around the world, including in Muslim majority areas, it has also introduced Halal chocolates to cater for those people who do not buy chocolates with wine in them. This special consideration of Cadbury increases its brand loyalty among Muslim consumers. Promotion Recently Cadbury launched a new marketing campaign under the name of Joyville for its Diary Milk brand. In this campaign, the company began promoting itself as an organization that brings joy to the people. Before this campaign, the company associated itself as a chocolate that contained a glass and half of milk. This was established through the slogan on every Cadbury product. Right now, only Diary Milk is promoted through the campaign but further integration of the campaign would include more sub-brands in this campaign including Flake, Crunchie and Twirl (Reynolds, 2013) Even though Cadbury continues to use the image of the glass and half of milk, it has reestablished itself as a factory that produced joy instead of milk. This campaign was launched in 2012. Through this campaign, Cadbury has established itself as a company that brings happiness to the people. Thus, when people buy Cadbury, they do not just buy chocolate but they also buy the joy with the chocolate. In order to promote this campaign, Cadbury made use of various channels including television, print, and digital media. These channels are effective when advertising to the masses. Since the target market of the company consists of people from all ages and backgrounds, therefore promotion has been done is such a way that it reaches out to the maximum number of people. Promotion is important for this product since chocolate is not an everyday product. Most people are tempted to buy chocolate when they see the product in front of their eyes. In this age, when weight watchers have increased in dire numbers, the food industry and specifically the chocolate industry are facing certain pressures. Therefore, a new image and good promotion was called for in order to ensure the product remained fresh in the minds of the consumers. The company has taken a good step by establishing itself as a joy factory and in order to firmly establish this position, the company should use events such as get-togethers and special holidays like Christmas to promote the product. Place As mentioned earlier, Cadbury has a very strong international presence. Having its headquarters in London, UK, the company operates in over 50 countries over the world including US, Australia, New Zealand, India etc. The company furthermore sells chocolates in more than 200 countries around the world. The company has such a strong position that it is considered to be the second largest confectionary in the world after Mars-Wrigley (Reuters, 2010) The distribution channel for Cadbury is very like the distribution channel of other such players in the market. First the cocoa is extracted from cocoa farms of Cadbury placed primarily in Ghana. Ghana is the preferred choice for Cadbury since the country boasts of superior quality cocoa beans; however extensive reliance on the country has resulted in supply issues for the company as a result of certain bad crop years. Later, the chocolate is produced in the chocolate factories. From these chocolate factories, the product then moves to the wholesaler and then to the retailer. In some instances, the wholesaler does not come into the picture and the product moves directly to the retailer. In some cases, the chocolate moves from the agent to the vending machines. When the product moves from the wholesaler to the retailer, it usually ends up in small convenience stores such as stores located inside petrol stations. In the case when the product moves directly to the retailer, it usually ends up in convenience stores such as Wal-Mart, Sainsbury etc (Bhatia, 2008). This distribution channel is quite effective for the product as it ensures that the product has maximum coverage. Since the product is meant for the masses, it should be readily available for the passes and thus by covering as many distribution channels as possible, Cadbury is ensuring high sales. Recommendations and Conclusion Right now, Cadbury is in a good position mainly because its latest campaign of Joyville has revived the brand to a great extent. It should continue with the same campaign and incorporate more brands within this campaign as it has been playing to do. The brand, in terms of promotion, still needs to cover a long distance if it wants to associate itself with the emotion of joy. The only issue right now that Cadbury is facing is its limited suppliers along with increasing cost of production. Cadbury therefore needs to explore more suppliers other than the cocoa farms in Ghana. Also since Cadbury has a strong market position and brand loyalty, it has the ability to explore new target markets. It could introduce products in the luxury category since chocolate is still a luxury product for certain people and Cadbury can tap that market as well. References Bhatia, S. 2008, Retail Management, New Delhi: Atlantic Publishers & Distributors Bradely, J., 2011, Cadburys Purple Reign: The Story Behind Chocolates Best-Loved Brand, USA: John Wiley & Sons Kotler, P. Armstrong, N., Wong, V., & Saunders, J., 2008, Principles of Marketing, 5th European Edition, UK: Prentice-Hall/FT Reuters, 2010, Factbox: British confectioner Cadbury, Retrieved from http://uk.reuters.com/article/2010/01/14/us-cadbury-factbox-idINTRE60D1XX20100114 [Accessed March 5, 2013] Reynolds, J., (2013), Cadbury plots to extend Joyville Campaign across brand portfolio, Marketing Magazine, Retrieved from http://www.brandrepublic.com/news/1170453/Cadbury-plots-extend-Joyville-campaign-across-brand-portfolio/?DCMP=ILC-SEARCH, [Accessed 6 March, 2013] Bibliography Bhatia, S. 2008, Retail Management, New Delhi: Atlantic Publishers & Distributors Bradely, J., 2011, Cadburys Purple Reign: The Story Behind Chocolates Best-Loved Brand, USA: John Wiley & Sons Brassington F. and Pettit S, 2006, Principles of Marketing, 4th edition, New York: Financial Times/Prentice Jobber D., 2006, Principles and Practice of Marketing, 4th edition, New York: McGraw Hill Higher Education Kotler, P. Armstrong, N., Wong, V., & Saunders, J., 2008, Principles of Marketing, 5th European Edition, UK: Prentice-Hall/FT Reuters, 2010, Factbox: British confectioner Cadbury, Retrieved from http://uk.reuters.com/article/2010/01/14/us-cadbury-factbox-idINTRE60D1XX20100114 [Accessed March 5, 2013] Reynolds, J., 2013, Cadbury plots to extend Joyville Campaign across brand portfolio, Marketing Magazine, Retrieved from http://www.brandrepublic.com/news/1170453/Cadbury-plots-extend-Joyville-campaign-across-brand-portfolio/?DCMP=ILC-SEARCH, [Accessed 6 March, 2013] Read More