Marketing Audit for Cadbury Drinking Chocolate in Australia - Case Study Example

Name: Lecturer: Course: Semester: Date: Table of Contents 1.0 Introduction………………………………………………………………3 2.0 Target market……………………………………………………………3 3.0 Marketing mix……………………………………………………………4 3.1 Product……………………………………………………………………4 3.2 Promotion…………………………………………………………………6 3.3 Price……………………………………………………………………….7 3.4 Place……………………………………………………………………….8 4.0 Competitive advantage……………………………………………………8 5.0 Success of the Firm……………………………………………………….9 References …………………………………………………………………10 Marketing Audit for Cadbury Drinking Chocolate in Australia 1.0 Introduction The product I have chosen is Cadbury Drinking Chocolate. I have researched about the performance of this product in the Australian market. Cadbury is the Drinking Chocolate of choice for Australians. Other international brands such as Milo and Nesquik dominate the Australian hot drinks market (sivasailam, 2010). Cadbury Drinking Chocolate is an essential item in every kitchen pantry. The real Chocolate taste of Cadbury Drinking Chocolate is ideal as icy cold Chocolate milk during summer and as a warm full-flavored hot Chocolate during winter (Kraft Foods Australia, 2013). Cadbury is produced by Cadbury Pty Ltd Australia which is a subsidiary of Kraft Foods international. The history of the company in Australia dates back to the opening of Cadbury Fry and Pascall in 1922. Apart from Cadbury Drinking Chocolate, the company also manufactures other Chocolate based products such as Chocolate bars, Biscuits, Kosher products, Pascall Confectionary among others (sivasailam, 2010). 2.0 Target market Cadbury’s Drinking Chocolate is an essential item in many household in Australia. It is a simple and inexpensive indulgence which was not very much affected by the global economic recession whose effects did not spare Australian consumers. Chocolate is consumed by both adults and kids in Australian homes (Kraft Foods Australia, 2013). The market could be segmented into the following segments: Demographic Gender: Cadbury Drinking Chocolate is taken by both male and female in Australia in equal measures. It is a family product and as such does not attach any gender targeting features to attract certain gender group and exclude the other according to Peter (2008) this is characteristic of family consumer goods. Age: Cadbury is taken by the young and old alike. This is because it is a family drink. It is basically taken during both cold and warm seasons to either cool the body or keep it warm. People take it for the unique flavor it offers. Perhaps the older generation might be substituting Chocolate with other health conscious drinks such as soya but the young take Cadburys Drinking Chocolate regularly (sivasailam, 2010). Ethnicity: Cadbury is a consumer product which can be taken by anybody in the Australian society. There is no ethnicity which can claim complete ownership of the brand nor is it associated with any particular ethnicity’s culture or way of life. Knowledge of languages: the product features and instructions are well communicated in English which is spoken widely in Australia as the official language. The target market is composed of English speakers Behavioral characteristics Expectations: Cadbury Drinking Chocolate is taken as a hot or icy drink (Kraft Foods Australia, 2013). The consumers expect to enjoy its flavor while cooling their bodies or warming their bodies depending on the particular weather conditions. Cadbury Drinking Chocolate is available ink 225g and 400g (Kraft Foods Australia, 2013). This different packaging is meant for consumers who take varying amounts of Drinking Chocolate at home and will thus be suited by different packaging amounts. According to (Rigby, 2009) the different packaging is very strategic as some consumers prefer less of something as they can manage their consumption behavior and consequently their budgets. Geographic characteristics The product is available in more than 60 countries around the world. For this particular case it has segment the Australian market to cater for its special needs and preferences through its local subsidiary. 3.0 Marketing mix 3.1 Product The product I have chosen is Cadbury Drinking Chocolate; the product is used as flavor in Hot and Cold self made drinks (Kraft Foods Australia, 2013). Chocolate is made from dried cocoa seeds from the pods of cocoa tree. The main ingredients in Cadbury Drinking Chocolate are: sugar, Cocoa powder, Mineral salts, Flavor. 15 grams of Cadbury Drinking Chocolate can provide (Kraft Foods Australia, 2013): 252 KJ Energy 13.4 Carbohydrates 0.7 g protein What consumers look for though is the unique taste of the Drinking Chocolate which differs depending on the ingredients. The product is taken in by adding it to hot water or milk or in icy water during summer (Kraft Foods Australia, 2013). The core product in Cadbury Drinking Chocolate is the flavor provided by the ground powder of the cocoa seed mixed with other ingredients to give a unique flavor in cold or warm drinks. The product is an effective brand with other strong products from the same manufacturer in the Chocolate based industry. The fact that this other brands have strong market share in their respective areas and a strong financial backing, means the brand advertisement has been strong making the product a major player in the Australian Drinking Chocolates’ market (sivasailam, 2010). The product is packaged I beautiful purple coloured tins with the picture of a hot Chocolate drink to initiate desire for the product in the buyer. It is a good differentiation since the company has stuck with the colour and thus maintaining a unique identity in the market. The product is at the maturity stage in its product life cycle this means that the company ahs had to run sustained advertisements in order to boost its sales in the wake of stiff competition from similar products and substitutes. The company also has to rely on market driven pricing strategy since there are many competitors in the industry who can take advantage of high pricing. Low prices may also lower the already shrinking revenue from the brand. 3.2 Promotion Cadbury Drinking Chocolate is an already established brand in the Australian market (sivasailam, 2010). It only does advertising and promotion to remind people to continue buying the product. The product is a family product targeted to people of all ages. Cadbury uses impersonal communication to promote the product. They use a variety ways to let remind parents and children to buy Cadburys Drinking Chocolate. The company advertises the product via TV advertising, especially in children’s time view, which is from 4pm to 6pm. In weekend, they put more advertisements on children’s channel to let more children remind their parents to buy Cadbury Drinking Chocolate for them. On 26th January 2013, Cadbury hosted the Cadbury super team event at Skoda stadium on Australia day. This event is used to popularize Cadbury’s products including the Drinking Chocolate (Kraft Foods Australia , 2013). The company is currently running the “Cadbury Match for Cash” promotion to popularize its brands in the Australian market and maintain its market share (Kraft Foods Australia , 2013). The company uses online media such as its website and social media to provide information relating to the product. The media is also used for public relations since people can use the page to Ask questions and report problems they have discovered with the brand. The promotion efforts attest to the products stage in its life cycle. The product is in maturity stage and thus needs sustained promotion to keep it competitive in the industry. 3.3 Price From my own research, the product is priced as a fast moving consumer good. It is priced at an average price of $5 dollars for the 400g tin. This means that the product is within the reach of average families in the Australia. The prices of the competitors such as Milo is also within this average meaning that much of the competition is feature and brand based as opposed to price based competition. As can be seen from the prices below, buying the larger 400g Cadburys Drinking Chocolate saves you an average of $0.5 meaning that the pricing strategy is meant to encourage customers to buy more of the product and not less. Such a strategy is common for consumer goods as it gives an incentive to buy (Blackwell, 2003, Rigby, 2009). The pricing really depicts the true state of a product at Maturity life cycle stage, this view is supported by (Solomon 2006, Barney, and Hesterly, 2008 ). It has to be competitive and to fight competition in the market, meaning it has to be priced averagely. The price is also logical enough to maintain significant profit for the brand sustainability and profitability. The price is inconsistent with the product features as well as the message and intention of the promotion strategy of selling more for less. Product size Price at Woolworths 225 grams $ 3.50 400grams $5.04 3.4 Place The company has chosen to distribute the product through retailers such as large chain supermarkets like Coles and Woolworths. There are no intermediaries involved in such kind of distribution. However for small retailers spread across the country, they have to rely on wholesalers and general distributors to reach this market. This means for the large supermarkets the product is likely to be cheap as there are few inefficiencies and costs involved but for the small family run retail shops the product is likely to have a slightly higher price. The customers are the end users of the efficient distribution channel adopted in the case of large retailers since the price is lower that it would have been had the company involved many intermediaries in the distribution process. According to Hitt & Ireland, (2010) the strategy is appropriate for the stage the product is in because the price based competition and differentiation can be achieved through reducing inefficiencies in the supply chain to get the products in the market in time and at a little cost than expected thereby giving the product competitive advantage which is much needed for the stage the product is in. 4.0 Competitive advantage Cadbury enjoys a strong financial backing from the mother company Kraft food international which has a strong market share of 10 % global confectionary market. This means that the company is able to develop the product in terms of quality and additional benefits such as formulae to make it suit the target market. Joyner (2009) also argues that the strong financial backing also ensures that the economies of scale enjoyed in its production can also translate into cheaper prices of the product at retail level making the product competitive and also able to give value for money to consumers. Cadbury is a global brand making it very appealing to many people around the globe and thus consumers believe it is a quality product evidenced by its global dominance. The brand has been able to offer a high quality product in a convenient packaging which has enabled it to be very competitive in the market in terms of capturing the target market. The company has also done extensive promotion of the brand Cadbury to ensure as many consumers as possible identify with the brand this is a big competitive advantage over the competitors. The fact that the product is available in major supermarkets in Australia also enables the product to offer convenience to consumers as they can easily get the product while shopping for other items in these major supermarkets. 5.0 Success of the Firm The company has succeeded in developing quality product for Chocolate lovers in Australia thus satisfying the needs of the Australian population through careful integration of the 4Ps of marketing. The product is very competitively priced giving value for money to consumers. However due to rising health awareness health awareness concerning calories intake amongst the Australian and global population and competition from substitutes such as coffee and tea, the product market share is shrinking gradually and not just for Cadburys but for other Drinking Chocolates as well. The product is available in all major supermarkets distributed all over the Australia attesting to the company’s commitment to avail the product to the consumers in the target market. This means the consumers can easily access the product translating into profitability for the company and increase in market share. References Barney, J. B., and Hesterly, W. S. 2008 Strategic Management and Competitive Advantage, Pearson Prentice Hall. Blackwell,R., (2003) Consumer behavior, 9th Ed, Harcourt Hitt, M., & Ireland, D. 2010. Strategic management: Competitiveness and Globalization, Concepts, Cengage Learning Joyner, M. (2009). Integrating Marketing: How small businesses become big businesses and big businesses become empires. John Wiley and Sons. Kraft Foods Australia . (2013, April 29). Competition. Retrieved May 7, 2013, from Cadbury australia: http://www.cadbury.com.au/Competition.aspx Kraft Foods Australia. (2013, April 29). About Chocolate. Retrieved May 7, 2013, from Cadbury Australia Web site: http://www.cadbury.com.au/About-Chocolate/What-is-Chocolate.aspx Rigby, G. (2009). Sales and marketing for entrepreneurs. Harriman house Limited. Peter, P. (2008). Consumer Behavior and Marketing Strategy, McGraw Hill sivasailam, N. (2010). Chococlate and Confectionary Manufucturing in Australia. IBIS World.[PDF] Available online at: http://rmitintergratedcommunication.wikispaces.com/file/view/C2172+Chocolate+and+Confectionery+Manufacturing+in+Australia+Industry+Report.pdf Solomon,m., (2006). Consumer Behavior: European perspective. Prentice Hall (Kraft Foods Australia , 2013) Read More