The Strategy of Cadbury Company - Essay Example

CADBURY MARKETING MIX & STARTEGIES Purpose of the assignment This proposal is going to provide a case study of marketing mix and strategies, Cadbury Company had successfully re-import the formula of quality products that had provided the inspiration for its own beginnings more than 50 years before. This assignment draws all the marketing mix that provides Cadbury Company to organize wide range of subsidiaries and to develop its brands of product. The focus of the report is to show via any organization what marketing is, how this organization uses marketing strategies and techniques, why marketing is essential to Cadbury and how its use of marketing has changed and will change in the future. 1.1 Company's Background Cadbury Trebor Bassett is a subsidiary of Cadbury Schweppes. The company operates in UK and its products are marketed globally. It produces wide range of chocolates, candy and gum The service concept of Cadbury World is to strive for happy customers. People visiting Cadbury World are provided for a complete experience of the company's chocolate-making process through a detailed tour, which starts from the main exhibitions and culminates to the shop. The company strives to impress on its customers the thoroughness of the activities that compromise its chocolate-making process. Thus, the service concept of Cadbury World is very customer-oriented and informative. In addition, the company also strives to make sure it maintains a happy staff, believing that happy employees result in happy customers. 1.2 Objectives: The company's broad objectives are: To increase customer numbers by a policy of communication, public relations, and collaboration To make use of the new marketing concept and strategies which will help the company to promote itself all over Asian & African countries, and internationally too. To blend the new brand of products apart from present ones in order to increase the enjoyment and pleasure the customers can drive from the pools constructed by Cadbury company To ensure permanence through: i) Premises, implying continuity ii) Consistent, steady revenue, guaranteeing development and progress. 2. The Market and Customer Analysis "According to the American Marketing Association, marketing research is the systematic gathering, recording, and analysing of data about problems relating to the marketing of goods and services." (SBA, Marketing research.) Although market research is imperfect science, it deals with customers and their continual changes feels and behaviours, which are influenced by innumerable subjective causes. (SBA, Marketing research.) Inputs Channels Processor Output (Response) Factors influencing buying behavior 3. The marketing activities & strategies 3.1 Marketing mix Marketing mix represents the total marketing programme of Cadbury Company. It involves decision, with regards to product, price, place and promotion. Marketing mix serves the linkage between a business firm and its customer. Thus marketing mix is a blending of decisions in the 4 P's. It is a system comprising the subsystems of product, promotion and distribution. These elements of the marketing mix are interrelated because decisions in one area affect the others. Marketing mix is a dynamic concept as it keeps on changing with changes in markets and the environment Philip Kotler has defined the term marketing mix as "the set of controllable variables that the firm can use to influence the buyer's response". (59) The marketing mix denotes a combination of various elements, which in their totality constitute Cadbury's "marketing system". These elements are often described as FOUR P's: Product, Price, Distribution (Place) and Promotion. Concept of Market Mix In order to fulfill the objectives there are several variables that have to be incorporated into the elements of the marketing mix: Product - must be high in quality. Price - must be at a premium price/high value. Promotion - media and merchandising coverage. Place - must be available at local shops, supermarkets and other retail outlets. People - people provide most services. Physical evidence - must illustrate the service quality through physical evidence. Process - choose among different processes to deliver the service. Thus, Human Resource in Cadbury has designed a marketing mix to analyze the mark the marketing problems. The problems are analyzed: (a) By utilizing the importance emanating from the market, which influences the marketing problems operations of Cadbury. For example, product acceptance, demand, price etc. (b) Adopting, procedures and policies for an efficient marketing programme. For example, distribution policies, promotional policies, etc. The product will effectively be introduced into its new market incorporating the main factors and variables which consumers deemed important/wanted in an electronic dictionary market. Positioning the product as a product 'high in quality' will satisfy the needs of the consumer. It will also portray the product as being fashionable. This will form the basis of the products unique selling point (USP). However, using the USP alone to generate sales will be insufficient. To further assist in forming favorable attitudes and creating intentions to purchase, other elements within the marketing mix should be considered. Simply relying upon price and the actual product as a differentiator from the competitors would be inadequate (KOTLER, 2003). In 1980, Cadbury Company continued its international expansion, steadily opening new markets, while retaining tight control of the Cadbury's image. 3.2. Company Perspectives and Customer orientation Cadbury's worldwide philosophy has been: We understand that as practical matter our universe is infinite and that we ourselves are the key variable in just how much of it we can capture. Cadbury Company's aim is to ensure the best price for their products by doing market survey and research and acquiring depth and breadth of knowledge within every aspect of production; capturing opportunities from the right market, occupy market share and efficient distribution mechanism. (i) Measures were implemented to secure and raise the quality of the goods, and by tightening the quality standards, (ii) Developing and improving its suppliers. (iii) Carry out careful and effective quality controls. 3.3 Diversification of business The service concept of Cadbury World is to strive for happy customers. People visiting Cadbury World are provided for a complete experience of the company's chocolate-making process through a detailed tour, which starts from the main exhibitions and culminates to the shop. The company strives to impress on its customers the thoroughness of the activities that compromise its chocolate-making process. Thus, the service concept of Cadbury World is very customer-oriented and informative. In addition, the company also strives to make sure it maintains a happy staff, believing that happy employees result in happy customers. 3.4 Brand equity The Cadbury trademark is invaluable. If all the company's assets burned to the ground today, it would have no trouble borrowing the money to rebuild, based on the strength of is trademark alone. Its brand is pervasive around the world. The company's strategy for sustaining its brand image is the three Ps: 1. Pervasive Penetration in the marketplace 2. Offering consumers the best Price relative to value 3. Making Cadbury the preferred chocolate everywhere In addition Cadburys finding new ways of building relevant value into chocolates and all other bands by further differentiating them, making them unique and distinctive. There years ago, the company abandoned the use of entrusting all advertising and marketing to one single agency. Now agencies are selected on the basis of their particular expertise in enhancing a particular brand; this ear agency compensation is being tied to results their ads produce. . 4. Marketing Communication of Cadbury The purpose of marketing communication is to influence the thinking process of the recipient the communication about a brand, a project, a service etc. This called the conceptualization ion of the idea. The next step for Cadbury Company's communication campaign is the relationship building. The recipient of the communication and the brand should establish emotional connection. This activity takes place in the subliminal level. Marketing communication should establish a relationship of trust with the entire clientele, which is comprised of the every day functional user of a product in the wider society as well as the user of a product in a chosen niche of the community. This trust of the recipient would be expressed in sales enquiry or attempt switch to the new brand. This is the activation of behavioral change in visible forms. Once the activation is discernable, it is to be supported by immediate help by the quick operation of the service sector of the brand in the form of further information by some form of contact. This is followed by a product experience, which makes the initial trust with the communicator and the recipient of communication a concrete reality. All the above dimensions are performed in a coordinated manner in Cadbury Company. 4.1 Effective Use Of Appropriate Marketing Communication Techniques Marketing communication and advertising mix methods are chosen by Cadbury 1. According to cost, targeting and response Advertising cost includes cost of design, production such as printing and media includes, local radio, display advertisement etc. For effective marketing communication, Cadbury Company explores all methods that are available in the market. The company keeps up with market developments so as to give effective decisions about where to put marketing advertising emphasis, and what marketing communication 'mix' of methods to use. 2. According to design, production and the role of external agencies Cadbury's image is formed by advertising material and campaign. And company can takes the help of external agencies and good designers. The role of design and advertising agencies used by the Cadbury are: Concerned with planning advertisement campaign and Implementing advertising or promotional 'campaigns' on company's behalf 3. Advertise to generate response and to build awareness Cadbury's effective marketing communication focus to create awareness or to generate a direct response. Different advertisements media and methods are better suited to one or the other. For generating a direct response, newspaper advertisement, direct mails, magazines are very good and effective. For creating awareness and building credibility business organizations uses posters, TV, radio and press editorial are used by the company. 4. Use simple language for customer's understanding Customers are people with multi options from all sources and having good technical or detailed understanding of products and services. Cadbury Company advertisement campaign focuses on spell things out, using clear simple language and not in complicated language and technical detail. The effective advertising and marketing strategy for the company is the ability to convey complex issues to the customer in a interesting, relevant, meaningful, and easy manner. 5. Translate Cadbury product and service offer into meaningful customer benefits The effective advertising and marketing techniques of Cadbury Company focused on few key strengths of client's business such as 'service offer' and must express these in terms of benefits to your customers. Effective advertising and marketing communication specifies the improving the quality of their service to their own customers. 5. International Expansion and capturing market International marketing is the performance of business activities designed to plan, price promote and direct the flow of the company's products to consumers or users in more than one for a profit. (Cateora & Graham 10) Today, the international segment has grown so much that it now contributes 71 percent to total revenue. Because of the importance of international markets to Cadbury's future growth, it has eliminated its prior structure of two groups- international and domestic- and formed five operating groups: North America, Latin America, Greater Europe, the Middle and Far East, and Africa. The break down of unit case volume by group is shown below. AFRICA (5%) MIDDLE AND NORTH AMERICA (32%) FAR EAST (18%) GREAER LAIN EUROPE (21%) AMERICA (24%) 1995 Worldwide unit case volume by region (World wide total 12.7 billion) As indicated by the pi chart, North America which includes the United States and Canada, accounted for the largest, a 32 percent, and lain America accounted for 24 percent of sales. Greater Europe and the Middle and Far East accounted for 21 percent and 18 percent, respectively; Africa rails at only 5 percent. 6. Risks and Contingency Plan 6.1 Market uncertainties To be an entrepreneur who has ideas that occur on a daily essence. The real challenge, though, is to gather good ideas. Good ideas are more than just ideas - they are opportunities. (MULLINS, 2004) 6.2 SWOT analysis Strength within the Cadbury company are that it caters for a wide rage of aspects involved in good financial position, company can afford expand product range in future. Product is globally produced, company can get production material anytime without delay, and do not really on other country to supply production material. Company is big can respond to changes very quickly. Resources for more products, capacity to produce more in the case demand increases, ability to cope with demand. Weaknesses, which will occur in the Cadbury Company is that it is new in the emerging markets than local brands like Diary Milk. It might be hard for the company to capture full market share as compared to existing competitors. To adjust and adapt a marketing program to foreign markets, marketers Cadbury should able to interpret effectively the influence and impact of each of the uncontrollable environmental elements on the marketing plan for each foreign market in which they hope to business. SWOT Analysis of Cadbury Company After performing the SWOT analysis the following objectives are found important to be considered urgently. In order to formulate the goals it is important to align them according to their importance. Marketing Research: The Company should try its level best to get the primary and secondary data regarding its customers demand. Because before formulating a marketing plan the opinion of the customers is important to know. 6.3 Long Term Objectives: After achieving short-term goals, the vision of marketing plan will be enlarged to the long-term goals, which are as follows: SMART Objectives for the Cadbury Company Objectives Activity Responsibility Promotional Objective: Improvement in promotion by introducing new methods. 1. By implementing Web based advertising. 2. By sending e- newsletters. 3. By using the relationship with media more effectively. Marketing Staff Market Share Objectives: Increase in customers for 25% 1. By using aggressive marketing techniques. 2. By gaining knowledge about the competitors steps through continuous research 3. By continuous performance evaluation and improvement. 4. By introducing new services. Management & Marketing Staff. Profitability Objectives: Increasing revenue for 30-35% 1. After gaining promotional and market share objectives. Increase in profit to be attained by continuing above-mentioned tasks. 2. By introducing new and attractive programs for other age groups. 3. By introducing new culturally enriched educational programs. 4. By improving the construction techniques. Management and Education Staff. 7. Competition Business is taking place in a steeply competitive, volatile environment, so it is important to understand the competition. (SBA, Competitive Analysis.) As a new product concept, Cadbury products have been tested in the market. While Cadbury company are confident about the technology and product, and are in the process of conducting both consumer and competitive research to prove more accurately the market potential for Cadbury brands. 7.1 Threats from imitation As protection of intellectual property rights is rather weak in Asian countries even though Cadbury is unique it is still possible that other companies, especially those that are producing similar products may imitate Cadbury marketing concept and technology. When this kind of scenario happens, Cadbury will seek legal counsel and fight against the imitators. 7.2 Technical Risk With technology advancement, there always exists the possibility that disruptive or superior marketing technology would replace Cadbury or provide the same benefits at a lower cost. Thus, Cadbury would continuously improve their marketing and brand technology and products in order to meet consumers' ever-changing needs. 7.3 Financial performance scorecard Customer driven instrument of analyzing the financial performance scorecard is an essential part of Cadbury's marketing strategy. Through using market based score card two purposes can be served. 1) Provision of early warning signals. 2) Provision of early warning signals. The customer performance scorecard will use the analysis of following in order to analyze the performance of the Company. It will measure increase in the new customers. Number of lost customers. Quality of services provided. Quality of products presented. Right awareness of target market. The preferences of target market. Increasingly customer-focused competition 8. Is Cadbury World a successful operation Cadbury World is a successful operation, basing it on the number of visitors who frequent the site and the low number of customer complaints. Surprisingly, there is a larger number of visitors during weekdays - 60 per cent for Mondays to Fridays, and only 18 per cent for Saturdays and 22 per cent for Sundays. This indicates that visitors come to Cadbury more for informative reasons, or curiosity, rather than visiting it as a weekend place for recreation or to unwind with their families. Cadbury should capitalize on their high attendance rate during weekdays by providing special discounts or reductions in perhaps their entry fees, or in certain items in their stores or restaurant. A frequent visitor card would also encourage people to come back, if not to view the tour, but to at least visit the restaurant or the shop. 9. Conclusion The growing globalization of markets that gives rise to standardization must be balanced with the continuing need to access all market for those differences that might require adaptation for successful acceptance. The premise that global communications and other worldwide socializing forces have fostered a homogenization of tastes, needs and values in a significant sector of the population across all cultures is difficult to den. However, "In spite of the forces of homogenization, consumer also sees the world of global symbols, company images, and product choice through the lens of their own local culture and its stage of development and market sophistication."(Jeanne Binstock van, 18) The hottest battles between Cadbury and its competitors will be in international markets especially emerging one. First-mover advantages can be crucial in the international soft-drink war. The strategic challenge is to establish greater brand awareness and preference through advertising on a scale similar to that of domestic market. Another challenge is to make their brands, accessible and ubiquitous they are in the United States. Cadbury must remain adaptable and agile with the ability to make rather quick product changes to appeal to the tastes of the public, and keep up with rapid changes introduced by smaller rival in the market. At some point, upon saturation in the market, he may return to a modified "multipronged" approach, and readdresses their desire to dominate the market, altering their product strategy to meet the specific needs of the market as dictated by their cultural and economic environments. Bibliography & Reference From book: American Market Association (1960) Marketing Definitions-Glossary of terms. New York BARROW, C., BURKE, G., MOLIAN, D. and BROWN, R. (2005) Enterprise development: the challenges of starting, growing and selling businesses. 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