Cadbury Enterprises Limited - Product Portfolio and Recommendation of a New Product for the UK Market - Report Example

An Analysis Of A Current Product Portfolio And Recommendation Of A New Product For The UK Market, Taking Into Account The Marketplace, Target Market And The Current Product/Brand Portfolio Table of Contents Introduction 3 Current Product Portfolio 4 Targeted Audiences 5 Marketplace and Environment in the UK 5 New Market Opportunity 7 Recommendations for New Product 10 Conclusion 13 References 14 Introduction Cadbury Enterprises Limited is a British multinational company established by John Cadbury and one of the largest manufacturers of chocolate and cocoa products in the world. Historically, the company was given a royal warrant by Queen Victoria. It was also declared as the official manufacturer of cocoa products for the monarch. Subsequently, the company started innovating newer product lines, including the milk chocolates made up of dried milk powder, sugar, cocoa solids and cocoa butter. The company increased its product portfolio primarily to compete with the leading Swiss brands offering milk chocolates in the market (Poulter, 2013). Even though Cadbury has a diversified product portfolio, its ultimate production has always been chocolates and other varied range of cocoa products. Their product range comprises from varieties of chocolates in the form of Christmas treats, bars and boxes to drinking chocolates (Cadbury, n.d). Cadbury possesses a wide range of product portfolios among which, the sub-set of bar chocolates product line has been taken into consideration in this report. This product portfolio constitutes such as Chomp bars, Fudge bars and Freddo bars as its main products (Woodgrange Technologies Ltd, 2012). This report focuses on the product portfolio of the company and makes recommendations for the launch of a new product after considering the factors, such as market opportunities, marketplace scenario and completion associated with the UK market. Current Product Portfolio If the history of the products under the bar chocolates product line of Cadbury is to be reviewed, it can be observed that all the products were developed by the company primarily during the years 1905-1938. Evidently, its rich ingredients of wafer biscuit, caramel and chocolate coating captured the hearts of people of all age groups, but majorly amid the children. Hence, the key targeted customers for this product principally focused on children, although in the later period, it was also expanded to adolescents and young adults. This particular sub-set was able to gain popularity within a very short period of time amid its targeted key customers, which positioned the company in a differentiated market context, rewarding it with substantial competitive advantages. Getting influenced by the success of Chomp bar in the market, the company has constantly been involved in adding products under this particular product line, in order to strengthen its product portfolio on a continuous basis (Cadbury, n.d.). Cadbury has been focusing on the expansion of its product line to make its market stronger and also with an intention of providing its customers with the best products. It is worth mentioning that Chomp bar is one of the most preferred and popular brands offered by Cadbury. Notably, the product was produced by the company with lower costs within the intention to capture the customer’s interests along with earning substantial profit through their sale to the kids section around the world. However, with its augmenting popularity amid the kids section, other competitors of Cadbury, including Nestle, Mars and Jacobs Suchard penetrated the market with their differentiated flavours of bar chocolates (Morland, 2009). Although the other rival companies are giving strong competition to Cadbury, the company has been effective in preserving its brand identification, capturing the loyalty of its valuable customers and therefore, has been able to perform sustainability in the worldwide context of global confectionary industry (Macmillan Publishers Limited, 2013). Targeted Audiences The major targeted customers for Cadbury’s bar chocolate product line can be identified as children and young adults who prefer experimenting new flavours and are also identified as quite loyal to the brands they prefer the most. The nutritional ingredient of the aforesaid products is further perceived to attract the major portion of the targeted audiences in the UK market. Since Cadbury is a well known brand existing for several years in the global market, it shall be easier for the company to identify and approach to the group of audiences, i.e. children who have been targeted for the product. Cadbury has launched many of its products in the market of the UK, Russia, China, India and the USA on the basis of the prevailing market structure along with the intention of attaining future growth and development (Macmillan Publishers Limited, 2013). Marketplace and Environment in the UK Market analysis is of prime importance prior to the process of launching of any new product in the market. It is worth mentioning in this context that one of the most important tasks that the company must adopt before planning for the launch of a new product is the analysis of the elements of marketing mix strategy, which is very essential in gaining substantial knowledge about the market situation. The analysis of 4Ps of the marketing mix, i.e. product, price, place and promotion must therefore be considered as quite important for the successful promotion of a particular product in the global context. In general, product can be referred to the quality, size, characteristics, brand and the guarantee of the new product that Cadbury is planning to launch. Likewise, price refers to the cost of the product after and before sales and the discount that might be offered in the purchase of the product with the intention to suffice the customer demands. Correspondingly, place refers to the targeted market selected for the sales of the product along with the numbers of sellers and the place of distribution and storage of the product. Ultimately, promotion is taken into account, which refers to the advertising and promoting of the new innovated product in an effective manner to make the targeted customers informed about the product, ignite a degree of demand among the customers for the product and facilitate the brand recognition of the company on the whole. Sometimes, promotion may refer to the modes of advertising adopted for making the customers aware about the product that is entering in the market (Borden, 1984). In other words, analysis of the aforesaid factors of marketing mix acquaints a company with prevailing business environment in the selected marketplace. Considering the same factors in the UK, it can be observed that the nation has been a major market for the confectionary business. In the past few years, it was observed that the annual revenue earned from the confectionary business in the UK was more than 4%, in case of gums it was more than 10% and trident was more than 23% (Performance Highlights, 2006). This data shows that the confectionary business in the UK provides ample scope for Cadbury to flourish its business activities. At the same time, Cadbury’s smooth functioning in the UK market has been contravened by numerous competitors, which also indicates the high level of competition prevailing in the market context. Illustratively, one of the major competitors of Cadbury can be identified as Wrigley, existing in the UK market and operating as the largest manufacturer of chewing gums. Consequently, competitors like Wrigley and Nestle can be argued to impose significant threats for the operations of the business of Cadbury’s present product of Chomp Bars. These types of threats usually give rise to extreme competition, which may further lead the company to develop innovative technologies or improved strategies to promote its product into the market. If the history of the confectionary market in the UK is to be analyzed, it can be observed that few of the Cadbury brands such as Chomp bar has already acquired a significant position in the market. Cadbury has long been applying the philosophy of sustaining in the confectionary market as a strong driving force and continue to serve its customers by providing the best of the products. This philosophy and the already existing brand image of the company can be deemed as quite beneficial for Cadbury in developing innovative ideas and launching of a newer product such as production of those chocolates, which contains healthy ingredients and also offers the benefits of low calorie and cheaper price to be promoted through innovative promotional campaigns (Woodgrange Technologies Ltd, 2012). New Market Opportunity Cadbury’s strong brand image and familiarity with its customer’s tastes shall also provide a better opportunity for the company in promoting newer products in the market. The company’s knowledge of the confectionary market of the UK can also reward another opportunity for the company in promoting the newer product with better alignment with its customers’ expectations. Apart from the opportunities, there are certain challenges that may restrict the company to gain the maximum benefit from introducing a newer product. Notably, during the development of a new product in this market, the barriers may emerge in the form of increasing competition and the health conscious attitude of the parents, restricting their children from consuming the chocolates to be offered by the company. In the modern day scenario, a rapid increase of competition can be witnessed as affecting the overall performance of a particular brand. Correspondingly, the major companies from which Cadbury is likely to face threats of competition are Mars, Nestle and Wrigley, which already exists in the UK market. Other than Wrigley and Nestle, Cadbury also faces problems with the diet companies those have long existed in the UK market, including Weight Watchers International among the majors (Miller-Kovach, 2007). Weight Watchers International is a company, which emphasizes the production of various food products along with providing assistance in reducing the weight of the consumers. Thus, as it has been observed that consumers in the UK are becoming increasingly health conscious, under the prevailing circumstances, people might move from Cadbury to the diet companies and hinder the competitive positioning of the confectionary industry leaders to a substantial extent (European Commission, 2010). An evident understanding of the industry competition can be observed with reference to the chart below. Cadbury’s Bar Chocolates Product Line Chomp bars, Freddos and Fudge bars etc. Competitors Alternatives Nestle Kitkat, Lion, Aero and Smarties Wrigley Extra Desert Delights, Skittles, Galaxy Mars Milky Way, Tracker, Revels Source: (Mars, 2012; Cadbury, n.d) The consciousness among the adults for health of their children as mentioned earlier is also one of the serious barriers that might come along in the launch of a newer product. It was studied in the earlier description that nowadays children are very much sensitive about having a healthy diet, inspired by health conscious parents and lifestyle. In this context, Cadbury must also consider the aspect of health and nutrition while planning for introducing a new product. This strategy will help the company to meet its targeted customers’ expectations and preferences along with attaining its broad business goals with effectiveness. Irrespective of these barriers, Cadbury can be successful if innovative ideas are being applied in the production of newer product. The responsibility of the company must not end up with the promotion of its product, but it also take much initiative in keeping track of the results, which will be driven from the promotional activity. Cadbury must apply the marketing metrics and derive the impact that the product has created in the minds of its key targeted customers. Looking after the promotion of the newer products of Cadbury, it can be recommended that Cadbury must apply three major factors of the marketing metrics i.e. opportunities, performance and accountability. The marketers of the company must also explore new opportunities from the promotional activity besides planning the investments required for the realization of those opportunities. After the exploration of the potential opportunities, the marketers of Cadbury must identify its potential customers, price of the product and also the channels of distribution, which can be termed as performance as per the marketing metrics. Finally, the company should emphasise maintaining a high degree of accountability, which refers to keeping records of the various aforesaid performances, such as the promotion, pricing strategy and the required investments in all these activities (Petersen & et al., 2009). According to the study conducted in relation to the market segmentation in the UK, it was observed that this market type is suitable for the development of a new product and hence, Cadbury might not face much problem in its home country. Certainly, the UK confectionary market is not an alien market for the company and much of the market research is not required in this case. The UK has always been a developed market for the confectionary and snacks brands, wherein Cadbury has already acquired a leadership position (Deloitte LLP, 2009). Thus, it can be affirmed that Cadbury might not face as such challenges in the development of its product portfolio repeatedly in the UK market. Recommendations for New Product The product portfolio of Cadbury covers the major proportion of the global market. Its diverse product line includes chocolate for the children as well adults, drinks, and vegetarian products. There are certain factors, which can promote Cadbury to launch a new product in the UK market such as its existing brand image, customer’s tastes and preferences and the population or the age group. Brand image plays an important role in creating demand for the product. Responding to this element, it can be argued that Cadbury already possesses a strong brand image amid the customers that would benefit the company while introducing a newer product (Park & et al., 1986). The evidences available from the historic evaluations reveal that Cadbury has been specialized in manufacturing the products with the usage of high quality cocoa beans and additional ingredients of nuts and healthy cocoa butter. For this reason, it will be quite easier for the company to attract customers towards its products with substantial concern for the product quality. Above all, it is crucial for the company to identify the fundamental preferences and tastes of its customers, i.e. kids or children section, prior to introducing a new product in the UK market. Cadbury must manufacture the product in such a way that it shall be suitable for the children, adults and the old age group of people along with keeping the demand for the product stable in the market (European Commission, 2010). After the analysis of the confectionary market structure of the UK, it has been observed that the people in the country are becoming more health conscious day by day. Taking this factor into consideration, Cadbury can opt for the product, which has fewer implications on the health of the consumers. The major advantage that can be derived from the UK market is its already strong brand image (Dobni & Zinkhan, 1990). Being its home country, Cadbury is also well acquainted with the UK market structure currently prevailing. However, it would be crucial for the company to engage in the promotional activities for familiarising customers about the new product introduced in the market. Correspondingly, an aggressive advertising campaign can be recommended as the most effective tool while launching a new product. As per the confectionary market structure of the UK, it can be recommended that Cadbury must concentrate on targeting different groups of customers that has been less focussed by its competitors like Wrigley, Nestle and Mars (Morland, 2009).Correspondingly, it is recommended to Cadbury to develop products that are suitable for the health of its customers as well as are efficient enough to satisfy the objectives of the company in the form of increasing profitability. Therefore, it is recommended to Cadbury to introduce products that are of low calorie, but are superior in term of its quality. More specifically, it is proposed that the company should introduce the product that can be consumed by all age groups of customers, especially children and be marketable at a reasonable price. It is very often observed that the children are very much fond of having chocolates but are restricted by their parents owing to their scepticism that regular consumption of chocolates would cause them harm. In such case, Cadbury can prepare those chocolates, which contain harmless nutrients and possess the capacity to convince the parents that it would not cause any harm to the children’s health and nutrition needs. This low calorie bar chocolate, aiming at children as their major targeted audience, will create a positive remark as it will not affect the health of the children and also prevent from increasing child obesity portraying the brand as a socially responsible one. Child obesity is a common problem that is usually found among children consuming too high calorie foods. Thus, if Cadbury opts for preparing chocolates, with low calorie nutrients aimed at children and also the adults, the brand can capture the entire UK confectionary market and earn an attractive profit margin. This product would gain a huge attention within the UK as it will be specially designed for the children. As expected, Cadbury shall have to face limited risk from competitors in the market, facilitating its expansion in terms of its market share through the introduction of the newer products. It will also be a unique product in the UK market, which shall expand the possibility of long-run competitive advantage in the coming future. The packaging of the product must be presented in an attractive manner. Cadbury’s strategy to use the purple and golden colour combination in its packaging can again be implemented in the case of this new product as it is the unique feature of the brand, making it different from other chocolate manufacturing companies. The adults can also rely on this product as they need not worry about the health of their children when consuming the chocolate. At the same time, the inclusion of the proposed product will also strengthen the current product portfolio of the company. The proposed product is very much different from the current product of Cadbury Chomp bar as the new product concentrates on the health of the targeted group of people. The proposed product fully targets at the children who are often restricted by their parents in having chocolates as too much intake of chocolate often leads to obesity to the child. However, this product can make a good market positioning for the brand, as it emphasises the nutritional needs of the children and also can be harmless as compared to the Cadbury Chomp bar, which contains huge amount of chocolate and sugar. The proposed product of Cadbury must also be offered at a reasonable price so that it becomes affordable for all the parents to buy for their children and satisfy their needs. Conclusion The aforesaid study explains the current market scenario of the United Kingdom and recommends the company regarding the launch of a new product. The study of the market segmentation prevailing in the UK says that it is the suitable market for the confectionary and snacks business. The major part of the per capita income of the country comes from the confectionary business (National Statistics, 2012). Cadbury had started its business initially from the same country and also successful in creating its own brand image. It had provided its customers with a variety of products ranging from the chocolates to the drinks. It has also marked a rapid success in the launch of the product named Chomp bar in the earlier days (Woodgrange Technologies Ltd, 2012). The targeted audiences set for the new product are the adults who decide about the healthy diet to be given to their children. The study has also recommended that certain necessary steps such as the implementation of marketing mix and marketing metrics will surely help the company in the launch of its new product. Cadbury, being a larger brand and UK being its country of origin, might not face much severe challenges while promoting a new product in the same market. The product that has been recommended for manufacture will gain a huge consumer as it will contain healthy nutrients and the most important thing is that it can be consumable by all people as it contains low calorie nutrients. If the company focuses on the attractive packaging of the new product and communicate its usefulness it can gain the sole attraction of the customers which would eventually contribute towards the expansion and increased revenue for the company. References Borden, N. H., 1984. 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Journal of Marketing, Vol. 50, No. 4, pp. 135-145. Performance Highlights, 2006. A Passion for Winning. Annual Report & Accounts 2006. [Online] Available at: http://www.skillsspace.co.uk/docs/Cadbury_Report_LoRes.pdf [Accessed November 13, 2013]. Petersen, J. A., & Et Al., 2009. Choosing the Right Metrics to Maximize Profitability and Shareholder Value. Journal of Retailing, Vol. 85, No. 1, pp. 95-111. Poulter, S., 2013. Cadbury Loses Five-Year Battle With Swiss Rivals Nestle To Trademark The Colour PURPLE On Its Chocolate Bars. Company Introduced Distinctive Purple Colour As Tribute To Queen Victoria. [Online] Available at: http://www.dailymail.co.uk/news/article-2443740/Cadbury-loses-year-battle-Swiss-rivals-Nestle-trademark-colour-PURPLE-chocolate-bars.html [Accessed November 13, 2013]. Woodgrange Technologies Ltd, 2012. Using Market Research to Launch a New Brand. The Irish Times. 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