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Brand Analysis of Cadbury Dairy Milk

1. Cadbury won the exclusive right to use its signature purple color (Pantone 2685C) on packaging over 100 years ago and has kept this color identity. 2. The 1997 "Freebird" commercial conveyed a strong message of freedom and happiness using imagery of a couple freeing caged pigeons while enjoying Cadbury. 3. After worms were found in some Cadbury chocolates in 2003, the brand invested heavily to upgrade packaging and launch a PR campaign featuring Amitabh Bachchan, rebuilding its wholesome image.

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• Market Size: INR 113B (2016) • CAGR: 8% till 2021 • Industry is dominated by international brands • Market is characterized by high volumes, huge expenses on advertising, low margins, and price sensitivity • Major Players: Cadbury India, Nestle India, Ferrera SpA, M&M, Hershey’s, Godrej CPL • Mondelez India holds 49% MS by value • Ferrero Rocher is the fastest growing chocolate brand, capturing the premium chocolate confectionery • Chocolate industry can be segmented by the type of ingredients which is used to produce the chocolates. • Types are Dark (9%) , Milk (75%) and White chocolates (16%) • Cadbury and Nestle, that account for almost 90 percent of the market value • Cadbury offers Dairy Milk, 5 Star, Celebrations, Temptations, Bourneville, Gems • Adults represent the strongest c onsumer base for premium choc olates in India • The demand for premium chocolate is supported by the fact that they are used as gifts during festive seasons and occasions across India • It is common to consume som ething sweet after every meal in India • However, increasing health consciousness has led consumers to opt for dark chocolates • Independent small grocers rema- ins the most prominent distributi on channel for chocolate confectionery in India, accountin g for 75% of value sales in 2016 • Cadbury Dairy Milk dominates Cadbury India’s portfolio with 43.5% by value Source: Euromonitor December 2016 report on Indian Chocolate Industry The Chocolate Confectionery Industry in India
Bargaining Power of Suppliers: Moderate • Large number of suppliers • But Indian cacao production is very low and insufficient and therefore most of the raw material is imported • Differentiated raw materials in terms of taste (Foreign Cacao is preferred to the Indian variant) makes it more difficult to switch suppliers Threat of substitutes: High • Threat from both chocolate and non-chocolate products • Products like Chocolate biscuits, spreads, syrups, milk shakes offer different substitutes • Non-chocolate products, especially in the Indian context, sweets pose a major threat • People also find snacks, fruits to be fulfilling • Recently, a new healthier substitute to chocolate, Carob is finding place among customers Bargaining Power of Buyers: Moderate to High • Large number of brands with different SKUs with different price points • Some amount of brand loyalty with taste and psychological connotations • No switching cost of buyers Threat of New Entrants: Moderate • Huge capital requirements and complicated supply chains make it difficult • However, Indian market undergoing a transformation due to changing preferences for premium and dark chocolates, unconventional flavors and made for Instagram-packaging which has allowed several home grown as well as global brands to enter the market. Eg: Earth loaf with its fusion flavors, LuvIt from Godrej • Also India has the lowest per capita consumption of chocolates in the world which has made the segment attractive for the new players Current category rivalry: High • Large number of competitors with offerings from cost-effective to premium to dark chocolates available • Dairy Milk accounts for 40% market share followed by Nestle India with 20% market share • Premium Brands like Ferrero, Mars and Hershey’s have made significant inroads by launching globally accepted brands in India. Eg: The recent launch of M&Ms by Mars, Hershey’s Brookside • Rise of the affluent population and changing lifestyles making it an attractive segment for more companies
Political • Chocolate industry is highly regulated by FSSAI • Demonetization implemented in November caused a cash crunch and therefore caused the YoY revenue of all major companies to slide • GST has caused a tax hike with chocolate being placed in the highest tax slab of 28% which has caused price hikes and in some cases like Cadbury they have been forced to lower their margins by keeping the prices same Economic • Economic factors have had a mixed effect on the industry • Rising disposable incomes due to the economic growth observed has spurred spending on products like chocolates • Interest rate cuts or increases can increase and decrease cash flows for consumers Social • Changing lifestyle of people has caused an increased demand for indulgent products • People prefer chocolates as an effective snack on-the- go. Although, traditional sweets have a psychological presence, rise in the premium chocolates with attractive packaging has provided consumers a gifting alternative to sweets. • However, some consider it a guilt food and go for healthier alternatives Technological Factors • Technological advances has caused greater variation in the tastes and complexity of the product category Chocolates with different fillings like the Marvelous Creations by Cadbury and Cadbury Dairy Milk Silk Bubbly is India’s first aerated chocolate have been created • Innovations in packaging has also been seen which allow for longer preservation • Supply Chain innovations like reducing inventory pipeline have seen product reach the consumer in shorter times and also introduced convenience by allowing them to shop through online stores Environmental • Companies are increasingly pressurized to conform to environmental standards whether it is in terms of manufacturing, packaging, or disposal • Moreover, they are being forced to shift to greener methods and compensate for the environmental damage caused by them through CSR initiatives etc. Legal • Chocolates are a highly regulated company (Done by FSSAI) and various cases of adulteration have been discovered which have resulted in legal battles sometimes resulting in payouts. Eg. Worms being found in Cadbury Chocolates. Although the power of consumers in India is quite less as compared to other countrie • Also health advocates have started to take action against the obesity and other health problems associated with it • Legal protection is also required to protect the patents owned by various companies PESTEL Analysis
Strength • Market leader in chocolate confectionery with Presence in more than 200 countries • Powerhouse of brands such as Dairy Milk, Bourneville, Oreo, 5 star and Temptation • Strong emotional connect/positioning with Indian customers with even greater focus on brand promotions • Cadbury has a very strong distribution network across the globe in 200 countries and even better in India with a very strong hold in the market leading to 43.5 % market share just for the Dairy Milk brand Opportunities • Being a very mature brand with good market share, Cadbury should focus on acquiring competitors to have a even better stronghold in the market and eliminate competition • Rural India consists of more than 65% of the population which is not exploited to its potential. Cadbury should focus on rural India and try to exploit the market • Cadbury can also venture out for the ice cream segment as it is an indirect competition to chocolates and the brand can diversify the portfolio in regards • Cadbury can also look into sugar free chocolates for the people who suffer from Diabetes Weakness • Few incidents of quality issues that affected the brand image a little Threats • Marketing expenditure in this category is very high, and any increase in raw materials and greatly affect the net margins • Much of the population in India suffer from Diabetes which can be a serious threat to Cadbury. • Rising purchasing power of Indian population might lead them to shift towards premium international chocolate brands like Ferrero Rochers, Lindt Excellence, etc SWOT Analysis
Who They Are o Demographic: Age groups from 5 to 40 form our primary consumers. Geographically, urban and semi- urban are the primary target groups o Psychographic: Primarily, people preferring indulgent food and snacking on-the-go are the targets. No considerable offerings for health-conscious people. o Behavioral: Both heavy and light users targeted. Sometimes used as a substitute for sweets, dessert and gifts What they buy and how they use it o Normally the standard variants Dairy Milk occupy the major market share. Although, Premium chocolates are the fastest growing segment with 19.4% growth with Silk gaining 5.5% market share over the 3.5% in 2015 o Usage is usually fragmented ranging from as a snack to a dessert to a gifting item to a socializing product How do they choose what to buy o Strong brand loyalty in this product category make the role of influencers very low o Word of Mouth is the most effective in terms of influence How they respond to marketing programs o Generally people have a high and favorable response to their communication efforts o Their ads are found to have an emotional connection, humor inducing, invoke joyous celebrationsWhen do they buy o There is no specific pattern to the consumption due to it being a impulse food item o Spikes in sales are generally observed close to festivals like Diwali, Raksha Bandhan etc. Why they prefer a product o Strong psychographic and brand associations are the main reasons for people Where Customers Buy o Most of the customers buy through traditional grocery stores (88.4%) whereas 10% is done through modern retail chains (hypermarkets, Supermarkets) o A very small percentage buy through online mediums Customer Analysis
Cadbury Product Portfolio Return to Q&A
Market Mapping
Competition Analysis
Target, Segmentation, Positioning • Geographic segmentation – PAN India with a very strong distribution network • Demographic Segmentation – • Income – Targets higher income group with the Cadbury Dairy Milk Silk chocolate bars, with the variants Oreo, Chocolate, Fruit & Nut, Caramel, Bubbly and Roasted Almond. Targets the medium and lower income group with the Cadbury Dairy Milk and other variants. • Age – Initially it was targeted at kids and youngsters but now the target group also includes adults and elderly people. • Behavioral Segmentation – Cadbury targets its customers based on occasions as well like celebrating Diwali, Rakshabandhan, any other joy in life or when starting something very auspicious. • Positioning – The brand positions itself as a premium chocolate synonymous to happiness. The ad campaign taglines ‘Real taste of life’, ‘Pappu pass ho gaya’, ‘Asli swad zindagi ka’, validate Cadbury’s claim of being a chocolate brand to celebrate happiness. Recently, the brand has also started positioning itself as a right thing to do before starting something auspicious with ‘Shubh Arambh - Kuch meetha ho jaye’ and also as a desert offering with the tagline ‘Meethe me kuch meetha ho jaye’.
Brand Mantra Points of Parity Points of Difference Substantiators Executional Properties/Visual Identities Values/Personality/Character Lots of variants Tastes like this feels.Strong emotional connect Excellent distribution system Strong advertising campaigns Strong legacy of chocolate making Good quality and taste Attractive Packaging & Fairly Priced Cadbury script logo Dark Purple color used in all packs The glass and a half with milk being poured on a chocolate cube Auspicious Kindness and Warmth Fun, excitement and Cheerful Young and Youthful Happiness, Romanticism Playful Indulgence Long standing brand, incorporated in 1948 in India Market leader in chocolates Years of innovative products Consistent Quality World’s largest confectionery company Five manufacturing units in India to meet demands Tagline ‘Shubh Arambh - Kuch meetha ho Jaye’ Brand Positioning Framework Return to Q&A
Brand Loyalty • Consumers are highly brand loyal, Number of repeat purchases is too high, DM enjoys loyalty in terms of gifting options also • Consumers are highly aware of the brand Cadbury Dairy Milk. Consumers are highly familiar with the brand and have high level of confidence on the brand and its taste • Highly Reputed brand in Chocolate Confectionery industry Brand Associations • Celebrations, Special occasions, Victory, Trusted Brand, Good gifting option, Friendship, Caring, Bonding, Happiness • Key association: Happiness • Number of brand extension: 4(Silk, Lickables, Shots, Jelly Popping Candy) Other proprietary brand assets • The Cadbury name, The Cadbury Purple Color is associated with DM, The Cadbury Logo and Trademark have been recognized as a symbol of quality and trust from Centuries, The Cadbury Cubes design Perceived Quality • Has a halo of being product of good quality, High quality packaging, Reasonably priced, The purple color is associated with premiumness and good quality, The Cadbury logo is highly trusted, considered a solution for sweet cravings- 'Kuch Meetha ho Jaye Brand Awareness • Dairy Milk is synonymous to the Brand Cadbury • High unaided awareness, Consumers are highly familiar with DM brand name, The logo, the purple color of the brand, and the jingle also, consumers like the taste Aaker Model for Brand Equity Return to Q&A
Positioning Statement To every individual who shares a chocolate and likes to spread happiness, Cadbury Dairy Milk is a brand of chocolate that provides the feeling of goodness and the best experience of milk chocolate because every Dairy Milk is made with the best cocoa, the purest milk and loads of love Brand Mantra Taste like this feels Brand Tagline • Shubhaarambh.. Kuch Meetha Ho jaaye • Dairy Milk Silk.. Have you felt the Silk Lately? • Dairy Milk Shots... Mann me laddu foota Brand Mantra vs Tagline vs Positioning Statement
Upward Stretching Dairy Milk Silk Downward Stretching Dairy Milk Shots Line Extension Dairy Milk Lickables Line Pruning Dairy Milk Wowie Product Line Stretching Dairy Milk Marvellous Creations
Product Life Cycle
Brand Elements • Brand Names – Cadbury Dairy Milk, Cadbury Dairy Milk Silk (Chocolate, Fruit & Nut, Caramel, Oreo, Bubbly and Roasted Almond), Cadbury Dairy milk shots, Cadbury Dairy Milk Lickables, Cadbury Dairy Milk Jelly Popping Candy • Logos – Cadbury Dairy Milk script logo, The glass and a half with milk being poured on a chocolate icon, The piece of chocolate icon • Brand Symbol – • Spokespeople – Amitabh Bachchan
Brand Elements Slogans Jingles Cadbury Dairy Milk Silk – Kiss Me Cadbury Dairy Milk – Shubh Arambh
Brand Elements Packaging Signage Juhu Beach, Mumbai
Signature Stories • One of the most known story of Cadbury is the signature Pantone 2685C purple that it has been using on its packaging for more than 100 years now. It had also won the right to stop rival chocolate makers to use this color in their product packaging. • 1997 campaign ‘freebird’ – The commercial shows a couple sitting on the seaside, when a pigeon vendor strolls the area with the two pigeons locked in a cage. The woman looks at the man with disappointment, and he goes ahead to buy the two. The woman then frees both the pigeons from the cage and feels the moment of happiness. The ad campaign portrayed a very strong message of freedom relating to true happiness of life. That’s when dairy milk is shown with the tagline of ‘Alsi swad zindagi ka’ • In October 2003, just a month before Diwali, customers in Mumbai complained about finding worms in Cadbury Dairy Milk chocolates. The brand’s wholesome, warm image was threatened, and sales dropped drastically. Cadbury issued a statement that the infestation was not possible at the manufacturing stage and poor storage at the retailers was the most likely cause of the reported case of worms. Even though the cases reported were few in number and mainly from one particular state of Maharashtra, Cadbury still went ahead the extra mile by investing up to Rs 15 crore (Rs 150 million) on imported machinery, Cadbury's revamped the packaging of Dairy Milk to a poly flow one. The metallic poly-flow, was costlier by 10-15 per cent, but Cadbury didn't hike the pack price. In less than two weeks, the company launched a PR campaign for the trade. And three months later, Cadbury roped in brand ambassador Amitabh Bachchan to do some heavy duty endorsement putting his personal equity on the line for the brand. • Cadbury Dairy Milk campaigns broke the stereotype in the early nineties that chocolates were only meant for children. Back in the early nineties, a trip to the grocery store always meant possible treats for kids, while the mother and father never got anything. This was confusing because the chocolates were delicious and grown ups who did like eating all these other less tasty things, would want nothing to do with the wonder that was good chocolate. Most adults love chocolates too and they’d enjoy breaking the small bars of the chocolate and pop one in the mouth. But stereotype had shoved all that wonderful, delicious goodness into the children’s area, and lugged the poor adults with the idea that growing up meant growing out of things which actually had very little to do with age. Real Taste of Life” - the campaign was pure joy distilled into a few seconds of screen time where adults had a bar of Cadbury chocolate in their hand and it was okay for them to indulge now! Source: ‘A Sweet Story’ by Hindu (February, 2015)
Brand Communication Strategies Advertisements: Cadbury Dairy Milk ads have always been found to imbibe emotional connect with sometimes a tinge of humor. As it evolved it started focusing on festivals, modern events and auspicious ceremonies to encourage it to be used as a substitute for traditional sweets. Some of the major ad-campaigns: • ‘Kuch meetha ho jaaye’: A common theme across most of the ads and encourages to use it whenever there is a craving for something sweet or on festive occasions. ‘Pappu Paas ho gaya’ and ‘Badhti Dosti ke Naam’ are some of the more popular ones • ‘Shubh Aarambh’: Launched in 2010, it plays on the Indian custom of having something sweet before starting any major event in life • ‘Meethe Mein Kuch Meetha Ho Jaaye’: Encourages people to use it as a dessert instead of ice-cream, sweets etc. • Cadbury Dairy Milk Silk focuses more on playful romance by showing chemistry between opposite sexes • Cadbury Lickables (primarily for the kids) recently launched shows its yummy flavor and having fun along with the toys which are free with it Return to Q&A To Cadbury Ads
Promotions: Cadbury Dairy Milk generally is not a brand that engages in extensive promotions. However some of the more prominent ones are shown below • Recently, offering an extra piece with the 5/- SKU • Offer running in the first half of 2017 of getting a free coffee at CCD with Dairy Milk Silk • Using third parties like amazon.in to provide more combos
Events and Social Media Marketing Events are regularly organized on Friendship Day, Valentines Day etc. to grow the connection between these events and Dairy Milk. Social Media is a big forte for them and have a combined 2m followers from India • Friendship Adda organized in collaboration with MTV in light of upcoming Friendship Day and introducing two new flavors. • #RealDosti Campaign whereby people have been encouraged to take a selfie with friends and share with the hashtag MADFIE
PR & Publicity • The Shubh Aarambh CSR Initiative and focusses on the integrated development of children to foster nutrition/health education, promote education and address social issues impacting young people, gender equality and support young people to become better citizens • Assisting Cacao farmers through the Cocoa Life Initiative by helping them through the production process • iCARE, an employee volunteering program, inspires employees to invest time, skills and passion in the areas of education, child/elderly welfare, NGO capacity building, etc.
Cadbury ads Return to Brand Communication Strategies
1952 Cadbury Dairy Milk adopted Cadbury's famous signatu re, Dropped the picture of the churner in the center 1970 Saw the specific mention 'Milk chocolate' in its packaging. This continued till 1993 1993 Saw the replacement of Milk Chocolate by the famous 'A glass and a Half' picture in the logo 1999 The chocolate cube was shown for the first time with milk being poured into it from 'A glass and a half'. The graphics in the Logo became 3D and also a brighter purple color was used. This was a huge shift from the normal Dairy Milk logo 2010 Cadbury Dairy Milk again reintroduced The Gold Color font. The chocolate cube was removed and now the milk was directly poured onto the name. They also used 2D design and the swirl remained. This Design, primarily took the Cadbury Dairy Milk logo design to the era of 1980-1993 2015 Finally they removed the swirl, made the logo look flat, richer purple was used and for the first time shifted away from all Capital letters 2003 Cadbury Rebranded Cadbury's Dairy Milk to Cadbury Dairy Milk. A newly altered Cadbury logo, featuring a swirling purple oval, and a new white, beveled, slightly squashed typeface. They dropped the usual Gold color font of Cadbury Cadbury Dairy Milk Packaging Over the Years
Pricing Strategy • Hidden price increase - In 2005, a Dairy Milk chocolate of 60g priced was priced at INR16 in 2005, and currently INR 20 for 40g which is an increase of 87.5% in 12 years, 7.29% YoY • Product Line Pricing Premium Pricing Parity Pricing Value Pricing Return to Q&A
Brand Variant Price Grams Price/Grams Cadbury Dairy Milk Milk chocolate 5 10.5 0.476190476 Cadbury Dairy Milk Milk chocolate 10 20 0.5 Cadbury Dairy Milk Milk chocolate 20 40 0.5 Cadbury Dairy Milk Fruit & Nut 94 80 1.175 Cadbury Dairy Milk Crackle 40 38 1.052631579 Cadbury Dairy Milk Lickables 40 20 2 Cadbury Dairy Milk Silk Silk Chocolate 160 150 1.066666667 Cadbury Dairy Milk Silk Bubbly 170 120 1.416666667 Cadbury Dairy Milk Silk Roasted Almond 160 137 1.167883212 Cadbury Dairy Milk Silk Oreo 170 130 1.307692308 Cadbury Dairy Milk Jelly Popping Candy 100 94 1.063829787 Cadbury Dairy Milk Silk Caramello 170 136 1.25 Lindt Excellence Piedmont Hazelnut 575 100 5.75 Lindt Excellence 70% Cocoa Dark Chocolate 575 100 5.75 Lindt Excellence 85% Cocoa Extra Dark Chocolate 500 100 5 Lindt Excellence 99% Cacao Noir Absolu 640 50 12.8 Cadbury Temptation Cashew 72 90 0.8 Cadbury Temptation Almond Treat 72 90 0.8 White Chocoville Compound Chocolate slab 150 500 0.3 Lindt Excellence 90% Cocoa Dark Supreme Noir 650 100 6.5 Cadbury Bournville Raisin and Nut 99 80 1.2375 Cadbury Bournville Cranberry 99 80 1.2375 Nestle Kitkat 10 12.8 0.78125 Nestle Kitkat 25 37.5 0.666666667 Nestle Kitkat 20 27.5 0.727272727 Amul Milk chocolate 100 150 0.666666667 Hershey's Creamy milk chocolate 100 35 2.857142857 Mars Snickers 20 24 0.833333333 Mars Milk chocolate 40 17 2.352941176 Ferrero Rochers 630 200 3.15 Ferrero Rochers 800 300 2.666666667 Toblerone Milk chocolate 80 50 1.6 Toblerone Milk chocolate 350 100 3.5 Price Analysis Return to Q&A
Increasing competition with the entry of both major global and homegrown players. Global players like Mars and Hershey have been launching their globally iconic brands in India looking to leverage the low penetration in India Increased preference of premium and dark chocolates have presented a new threat. Ferrero (due to its primarily premium offerings) has already overtaken Nestle and is the fastest growing company in chocolate confectionary. Mars had recently overtaken Mondelez in the modern retail category Chocolates are considered a sinful indulgence and linked to obesity which has forced people to look for healthier alternatives. Carob, a healthier substitute to chocolate has been finding increasing acceptance among consumers because of the above reasons Prying away the share from traditional sweets which are intrinsically linked to the taste buds and traditions of the people here is extremely difficult and is both money and time consuming Price points pose another challenge. Majority of Indians still do not see paying 10 or 30 Rupees as value for money which accounts for the low penetration in India Increased demand for unconventional flavors has seen brands like Earth Loaf make gains. Cadbury Dairy Milk doesn’t have an offering in this segment Major Threats Return to Q&A
Primary Research Insights • Reasons to Buy: To uplift mood, sweet Craving, Gifting, better alternative for a diabetic person than sweets when sweet craving increases, Works as a energy booster • Gift given to: Date, first meeting, child's birthday part, birthday gift, child in a home • Consumed by everyone in the family, cubes are broken and consumed, cube helps in sharing, kids consume it by biting, fun is in breaking and eating it • Highly likely to gift Dairy Milk because the chocolate pack looks good • Purple color looks good, has been the same purple color for ages, purple color means Dairy Milk, looks premium, purple color is associated with a nice chocolate • Cubes broken and consumed as a sweet after food on a habitual basis • Dairy Milk is sugary, sweet, has a strong after taste • Dairy Milk consumed when there is sugar craving • Dairy Milk is synonymous with the brand Cadbury
Q & A • There are total 5 products under Dairy Milk brand and a total of 17 variants. The number of products is optimal • Each and every product is addressing a particular need of the customer. Dairy milk – Milk chocolate, Dairy milk silk – Premium chocolate, Dairy milk shots– Budget Chocolate, etc. • Products of Cadbury Dairy Milk are well differentiated from each other and its competitors. Price analysis of the products of Cadbury has been done including that of some major competitors • Cadbury dairy milk just launched the ‘Cadbury Dairy Milk Lickables’. It should not launch any new product now but should prepare to venture into the ice cream and sugar free chocolate segment. Because, this is an untapped market and is a different segment altogether, there shouldn’t be any cannibalization of the brand but rather sales and market share would increase from untapped markets. Positioning of the brand • Brand Equity and Positioning of Cadbury Dairy Milk • Point of Difference – Strong brand recall of the brand; high emotional connect with the Indian consumers through strong emotional marketing; very strong distribution network and attractive packaging • Over time the packaging has changed very subtly and the stories have been quite consistent as well, starting from ‘Asli swad zindagi ka’ to ‘ Shubh Arambh – Kuch meetha ho jaega’, all relating to happiness quotient. The same has been advertised on media as well • Major threat include – Consumers being health conscious, Strong international brands entering the Indian market, etc.
Recommendations Cadbury can venture into the ice cream segment as it is an indirect competition to chocolates and the brand can diversify the portfolio in regard. The extension will be as ‘Dairy Milk Ice Cream’ exclusive outlets where the flavors will have the mix of the classic Dairy Milk chocolate bar with other ingredients Diabetes currently affects more than 69.2 million Indians, which is more than 8.7% of the adult population (WHO 2015 Data), restricting them to experience their favorite Cadbury Dairy Milk chocolates. Cadbury can extend the brand with ‘Dairy Milk Sugar Free chocolates for the people who suffer from Diabetes as this segment is currently untapped While making chocolate cakes at homes, instead of using Hershey’s chocolate sauce, people prefer to melt and mix Cadbury cocoa and Cadbury Dairy milk together and use it for the icing. This insight can help Cadbury Dairy Milk to consider launching Dairy Milk Melted Chocolate in the near future Return to Q&A
Brand Analysis of Cadbury Dairy Milk

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Brand Analysis of Cadbury Dairy Milk

  • 1.
  • 2.
    • Market Size:INR 113B (2016) • CAGR: 8% till 2021 • Industry is dominated by international brands • Market is characterized by high volumes, huge expenses on advertising, low margins, and price sensitivity • Major Players: Cadbury India, Nestle India, Ferrera SpA, M&M, Hershey’s, Godrej CPL • Mondelez India holds 49% MS by value • Ferrero Rocher is the fastest growing chocolate brand, capturing the premium chocolate confectionery • Chocolate industry can be segmented by the type of ingredients which is used to produce the chocolates. • Types are Dark (9%) , Milk (75%) and White chocolates (16%) • Cadbury and Nestle, that account for almost 90 percent of the market value • Cadbury offers Dairy Milk, 5 Star, Celebrations, Temptations, Bourneville, Gems • Adults represent the strongest c onsumer base for premium choc olates in India • The demand for premium chocolate is supported by the fact that they are used as gifts during festive seasons and occasions across India • It is common to consume som ething sweet after every meal in India • However, increasing health consciousness has led consumers to opt for dark chocolates • Independent small grocers rema- ins the most prominent distributi on channel for chocolate confectionery in India, accountin g for 75% of value sales in 2016 • Cadbury Dairy Milk dominates Cadbury India’s portfolio with 43.5% by value Source: Euromonitor December 2016 report on Indian Chocolate Industry The Chocolate Confectionery Industry in India
  • 3.
    Bargaining Power ofSuppliers: Moderate • Large number of suppliers • But Indian cacao production is very low and insufficient and therefore most of the raw material is imported • Differentiated raw materials in terms of taste (Foreign Cacao is preferred to the Indian variant) makes it more difficult to switch suppliers Threat of substitutes: High • Threat from both chocolate and non-chocolate products • Products like Chocolate biscuits, spreads, syrups, milk shakes offer different substitutes • Non-chocolate products, especially in the Indian context, sweets pose a major threat • People also find snacks, fruits to be fulfilling • Recently, a new healthier substitute to chocolate, Carob is finding place among customers Bargaining Power of Buyers: Moderate to High • Large number of brands with different SKUs with different price points • Some amount of brand loyalty with taste and psychological connotations • No switching cost of buyers Threat of New Entrants: Moderate • Huge capital requirements and complicated supply chains make it difficult • However, Indian market undergoing a transformation due to changing preferences for premium and dark chocolates, unconventional flavors and made for Instagram-packaging which has allowed several home grown as well as global brands to enter the market. Eg: Earth loaf with its fusion flavors, LuvIt from Godrej • Also India has the lowest per capita consumption of chocolates in the world which has made the segment attractive for the new players Current category rivalry: High • Large number of competitors with offerings from cost-effective to premium to dark chocolates available • Dairy Milk accounts for 40% market share followed by Nestle India with 20% market share • Premium Brands like Ferrero, Mars and Hershey’s have made significant inroads by launching globally accepted brands in India. Eg: The recent launch of M&Ms by Mars, Hershey’s Brookside • Rise of the affluent population and changing lifestyles making it an attractive segment for more companies
  • 4.
    Political • Chocolate industryis highly regulated by FSSAI • Demonetization implemented in November caused a cash crunch and therefore caused the YoY revenue of all major companies to slide • GST has caused a tax hike with chocolate being placed in the highest tax slab of 28% which has caused price hikes and in some cases like Cadbury they have been forced to lower their margins by keeping the prices same Economic • Economic factors have had a mixed effect on the industry • Rising disposable incomes due to the economic growth observed has spurred spending on products like chocolates • Interest rate cuts or increases can increase and decrease cash flows for consumers Social • Changing lifestyle of people has caused an increased demand for indulgent products • People prefer chocolates as an effective snack on-the- go. Although, traditional sweets have a psychological presence, rise in the premium chocolates with attractive packaging has provided consumers a gifting alternative to sweets. • However, some consider it a guilt food and go for healthier alternatives Technological Factors • Technological advances has caused greater variation in the tastes and complexity of the product category Chocolates with different fillings like the Marvelous Creations by Cadbury and Cadbury Dairy Milk Silk Bubbly is India’s first aerated chocolate have been created • Innovations in packaging has also been seen which allow for longer preservation • Supply Chain innovations like reducing inventory pipeline have seen product reach the consumer in shorter times and also introduced convenience by allowing them to shop through online stores Environmental • Companies are increasingly pressurized to conform to environmental standards whether it is in terms of manufacturing, packaging, or disposal • Moreover, they are being forced to shift to greener methods and compensate for the environmental damage caused by them through CSR initiatives etc. Legal • Chocolates are a highly regulated company (Done by FSSAI) and various cases of adulteration have been discovered which have resulted in legal battles sometimes resulting in payouts. Eg. Worms being found in Cadbury Chocolates. Although the power of consumers in India is quite less as compared to other countrie • Also health advocates have started to take action against the obesity and other health problems associated with it • Legal protection is also required to protect the patents owned by various companies PESTEL Analysis
  • 5.
    Strength • Market leaderin chocolate confectionery with Presence in more than 200 countries • Powerhouse of brands such as Dairy Milk, Bourneville, Oreo, 5 star and Temptation • Strong emotional connect/positioning with Indian customers with even greater focus on brand promotions • Cadbury has a very strong distribution network across the globe in 200 countries and even better in India with a very strong hold in the market leading to 43.5 % market share just for the Dairy Milk brand Opportunities • Being a very mature brand with good market share, Cadbury should focus on acquiring competitors to have a even better stronghold in the market and eliminate competition • Rural India consists of more than 65% of the population which is not exploited to its potential. Cadbury should focus on rural India and try to exploit the market • Cadbury can also venture out for the ice cream segment as it is an indirect competition to chocolates and the brand can diversify the portfolio in regards • Cadbury can also look into sugar free chocolates for the people who suffer from Diabetes Weakness • Few incidents of quality issues that affected the brand image a little Threats • Marketing expenditure in this category is very high, and any increase in raw materials and greatly affect the net margins • Much of the population in India suffer from Diabetes which can be a serious threat to Cadbury. • Rising purchasing power of Indian population might lead them to shift towards premium international chocolate brands like Ferrero Rochers, Lindt Excellence, etc SWOT Analysis
  • 6.
    Who They Are oDemographic: Age groups from 5 to 40 form our primary consumers. Geographically, urban and semi- urban are the primary target groups o Psychographic: Primarily, people preferring indulgent food and snacking on-the-go are the targets. No considerable offerings for health-conscious people. o Behavioral: Both heavy and light users targeted. Sometimes used as a substitute for sweets, dessert and gifts What they buy and how they use it o Normally the standard variants Dairy Milk occupy the major market share. Although, Premium chocolates are the fastest growing segment with 19.4% growth with Silk gaining 5.5% market share over the 3.5% in 2015 o Usage is usually fragmented ranging from as a snack to a dessert to a gifting item to a socializing product How do they choose what to buy o Strong brand loyalty in this product category make the role of influencers very low o Word of Mouth is the most effective in terms of influence How they respond to marketing programs o Generally people have a high and favorable response to their communication efforts o Their ads are found to have an emotional connection, humor inducing, invoke joyous celebrationsWhen do they buy o There is no specific pattern to the consumption due to it being a impulse food item o Spikes in sales are generally observed close to festivals like Diwali, Raksha Bandhan etc. Why they prefer a product o Strong psychographic and brand associations are the main reasons for people Where Customers Buy o Most of the customers buy through traditional grocery stores (88.4%) whereas 10% is done through modern retail chains (hypermarkets, Supermarkets) o A very small percentage buy through online mediums Customer Analysis
  • 7.
  • 8.
  • 9.
  • 10.
    Target, Segmentation, Positioning •Geographic segmentation – PAN India with a very strong distribution network • Demographic Segmentation – • Income – Targets higher income group with the Cadbury Dairy Milk Silk chocolate bars, with the variants Oreo, Chocolate, Fruit & Nut, Caramel, Bubbly and Roasted Almond. Targets the medium and lower income group with the Cadbury Dairy Milk and other variants. • Age – Initially it was targeted at kids and youngsters but now the target group also includes adults and elderly people. • Behavioral Segmentation – Cadbury targets its customers based on occasions as well like celebrating Diwali, Rakshabandhan, any other joy in life or when starting something very auspicious. • Positioning – The brand positions itself as a premium chocolate synonymous to happiness. The ad campaign taglines ‘Real taste of life’, ‘Pappu pass ho gaya’, ‘Asli swad zindagi ka’, validate Cadbury’s claim of being a chocolate brand to celebrate happiness. Recently, the brand has also started positioning itself as a right thing to do before starting something auspicious with ‘Shubh Arambh - Kuch meetha ho jaye’ and also as a desert offering with the tagline ‘Meethe me kuch meetha ho jaye’.
  • 11.
    Brand Mantra Points ofParity Points of Difference Substantiators Executional Properties/Visual Identities Values/Personality/Character Lots of variants Tastes like this feels.Strong emotional connect Excellent distribution system Strong advertising campaigns Strong legacy of chocolate making Good quality and taste Attractive Packaging & Fairly Priced Cadbury script logo Dark Purple color used in all packs The glass and a half with milk being poured on a chocolate cube Auspicious Kindness and Warmth Fun, excitement and Cheerful Young and Youthful Happiness, Romanticism Playful Indulgence Long standing brand, incorporated in 1948 in India Market leader in chocolates Years of innovative products Consistent Quality World’s largest confectionery company Five manufacturing units in India to meet demands Tagline ‘Shubh Arambh - Kuch meetha ho Jaye’ Brand Positioning Framework Return to Q&A
  • 12.
    Brand Loyalty • Consumersare highly brand loyal, Number of repeat purchases is too high, DM enjoys loyalty in terms of gifting options also • Consumers are highly aware of the brand Cadbury Dairy Milk. Consumers are highly familiar with the brand and have high level of confidence on the brand and its taste • Highly Reputed brand in Chocolate Confectionery industry Brand Associations • Celebrations, Special occasions, Victory, Trusted Brand, Good gifting option, Friendship, Caring, Bonding, Happiness • Key association: Happiness • Number of brand extension: 4(Silk, Lickables, Shots, Jelly Popping Candy) Other proprietary brand assets • The Cadbury name, The Cadbury Purple Color is associated with DM, The Cadbury Logo and Trademark have been recognized as a symbol of quality and trust from Centuries, The Cadbury Cubes design Perceived Quality • Has a halo of being product of good quality, High quality packaging, Reasonably priced, The purple color is associated with premiumness and good quality, The Cadbury logo is highly trusted, considered a solution for sweet cravings- 'Kuch Meetha ho Jaye Brand Awareness • Dairy Milk is synonymous to the Brand Cadbury • High unaided awareness, Consumers are highly familiar with DM brand name, The logo, the purple color of the brand, and the jingle also, consumers like the taste Aaker Model for Brand Equity Return to Q&A
  • 13.
    Positioning Statement To everyindividual who shares a chocolate and likes to spread happiness, Cadbury Dairy Milk is a brand of chocolate that provides the feeling of goodness and the best experience of milk chocolate because every Dairy Milk is made with the best cocoa, the purest milk and loads of love Brand Mantra Taste like this feels Brand Tagline • Shubhaarambh.. Kuch Meetha Ho jaaye • Dairy Milk Silk.. Have you felt the Silk Lately? • Dairy Milk Shots... Mann me laddu foota Brand Mantra vs Tagline vs Positioning Statement
  • 14.
    Upward Stretching Dairy MilkSilk Downward Stretching Dairy Milk Shots Line Extension Dairy Milk Lickables Line Pruning Dairy Milk Wowie Product Line Stretching Dairy Milk Marvellous Creations
  • 15.
  • 16.
    Brand Elements • BrandNames – Cadbury Dairy Milk, Cadbury Dairy Milk Silk (Chocolate, Fruit & Nut, Caramel, Oreo, Bubbly and Roasted Almond), Cadbury Dairy milk shots, Cadbury Dairy Milk Lickables, Cadbury Dairy Milk Jelly Popping Candy • Logos – Cadbury Dairy Milk script logo, The glass and a half with milk being poured on a chocolate icon, The piece of chocolate icon • Brand Symbol – • Spokespeople – Amitabh Bachchan
  • 17.
    Brand Elements Slogans Jingles CadburyDairy Milk Silk – Kiss Me Cadbury Dairy Milk – Shubh Arambh
  • 18.
  • 19.
    Signature Stories • Oneof the most known story of Cadbury is the signature Pantone 2685C purple that it has been using on its packaging for more than 100 years now. It had also won the right to stop rival chocolate makers to use this color in their product packaging. • 1997 campaign ‘freebird’ – The commercial shows a couple sitting on the seaside, when a pigeon vendor strolls the area with the two pigeons locked in a cage. The woman looks at the man with disappointment, and he goes ahead to buy the two. The woman then frees both the pigeons from the cage and feels the moment of happiness. The ad campaign portrayed a very strong message of freedom relating to true happiness of life. That’s when dairy milk is shown with the tagline of ‘Alsi swad zindagi ka’ • In October 2003, just a month before Diwali, customers in Mumbai complained about finding worms in Cadbury Dairy Milk chocolates. The brand’s wholesome, warm image was threatened, and sales dropped drastically. Cadbury issued a statement that the infestation was not possible at the manufacturing stage and poor storage at the retailers was the most likely cause of the reported case of worms. Even though the cases reported were few in number and mainly from one particular state of Maharashtra, Cadbury still went ahead the extra mile by investing up to Rs 15 crore (Rs 150 million) on imported machinery, Cadbury's revamped the packaging of Dairy Milk to a poly flow one. The metallic poly-flow, was costlier by 10-15 per cent, but Cadbury didn't hike the pack price. In less than two weeks, the company launched a PR campaign for the trade. And three months later, Cadbury roped in brand ambassador Amitabh Bachchan to do some heavy duty endorsement putting his personal equity on the line for the brand. • Cadbury Dairy Milk campaigns broke the stereotype in the early nineties that chocolates were only meant for children. Back in the early nineties, a trip to the grocery store always meant possible treats for kids, while the mother and father never got anything. This was confusing because the chocolates were delicious and grown ups who did like eating all these other less tasty things, would want nothing to do with the wonder that was good chocolate. Most adults love chocolates too and they’d enjoy breaking the small bars of the chocolate and pop one in the mouth. But stereotype had shoved all that wonderful, delicious goodness into the children’s area, and lugged the poor adults with the idea that growing up meant growing out of things which actually had very little to do with age. Real Taste of Life” - the campaign was pure joy distilled into a few seconds of screen time where adults had a bar of Cadbury chocolate in their hand and it was okay for them to indulge now! Source: ‘A Sweet Story’ by Hindu (February, 2015)
  • 20.
    Brand Communication Strategies Advertisements: CadburyDairy Milk ads have always been found to imbibe emotional connect with sometimes a tinge of humor. As it evolved it started focusing on festivals, modern events and auspicious ceremonies to encourage it to be used as a substitute for traditional sweets. Some of the major ad-campaigns: • ‘Kuch meetha ho jaaye’: A common theme across most of the ads and encourages to use it whenever there is a craving for something sweet or on festive occasions. ‘Pappu Paas ho gaya’ and ‘Badhti Dosti ke Naam’ are some of the more popular ones • ‘Shubh Aarambh’: Launched in 2010, it plays on the Indian custom of having something sweet before starting any major event in life • ‘Meethe Mein Kuch Meetha Ho Jaaye’: Encourages people to use it as a dessert instead of ice-cream, sweets etc. • Cadbury Dairy Milk Silk focuses more on playful romance by showing chemistry between opposite sexes • Cadbury Lickables (primarily for the kids) recently launched shows its yummy flavor and having fun along with the toys which are free with it Return to Q&A To Cadbury Ads
  • 21.
    Promotions: Cadbury Dairy Milkgenerally is not a brand that engages in extensive promotions. However some of the more prominent ones are shown below • Recently, offering an extra piece with the 5/- SKU • Offer running in the first half of 2017 of getting a free coffee at CCD with Dairy Milk Silk • Using third parties like amazon.in to provide more combos
  • 22.
    Events and SocialMedia Marketing Events are regularly organized on Friendship Day, Valentines Day etc. to grow the connection between these events and Dairy Milk. Social Media is a big forte for them and have a combined 2m followers from India • Friendship Adda organized in collaboration with MTV in light of upcoming Friendship Day and introducing two new flavors. • #RealDosti Campaign whereby people have been encouraged to take a selfie with friends and share with the hashtag MADFIE
  • 23.
    PR & Publicity •The Shubh Aarambh CSR Initiative and focusses on the integrated development of children to foster nutrition/health education, promote education and address social issues impacting young people, gender equality and support young people to become better citizens • Assisting Cacao farmers through the Cocoa Life Initiative by helping them through the production process • iCARE, an employee volunteering program, inspires employees to invest time, skills and passion in the areas of education, child/elderly welfare, NGO capacity building, etc.
  • 24.
    Cadbury ads Return toBrand Communication Strategies
  • 25.
    1952 Cadbury Dairy Milk adoptedCadbury's famous signatu re, Dropped the picture of the churner in the center 1970 Saw the specific mention 'Milk chocolate' in its packaging. This continued till 1993 1993 Saw the replacement of Milk Chocolate by the famous 'A glass and a Half' picture in the logo 1999 The chocolate cube was shown for the first time with milk being poured into it from 'A glass and a half'. The graphics in the Logo became 3D and also a brighter purple color was used. This was a huge shift from the normal Dairy Milk logo 2010 Cadbury Dairy Milk again reintroduced The Gold Color font. The chocolate cube was removed and now the milk was directly poured onto the name. They also used 2D design and the swirl remained. This Design, primarily took the Cadbury Dairy Milk logo design to the era of 1980-1993 2015 Finally they removed the swirl, made the logo look flat, richer purple was used and for the first time shifted away from all Capital letters 2003 Cadbury Rebranded Cadbury's Dairy Milk to Cadbury Dairy Milk. A newly altered Cadbury logo, featuring a swirling purple oval, and a new white, beveled, slightly squashed typeface. They dropped the usual Gold color font of Cadbury Cadbury Dairy Milk Packaging Over the Years
  • 26.
    Pricing Strategy • Hiddenprice increase - In 2005, a Dairy Milk chocolate of 60g priced was priced at INR16 in 2005, and currently INR 20 for 40g which is an increase of 87.5% in 12 years, 7.29% YoY • Product Line Pricing Premium Pricing Parity Pricing Value Pricing Return to Q&A
  • 27.
    Brand Variant PriceGrams Price/Grams Cadbury Dairy Milk Milk chocolate 5 10.5 0.476190476 Cadbury Dairy Milk Milk chocolate 10 20 0.5 Cadbury Dairy Milk Milk chocolate 20 40 0.5 Cadbury Dairy Milk Fruit & Nut 94 80 1.175 Cadbury Dairy Milk Crackle 40 38 1.052631579 Cadbury Dairy Milk Lickables 40 20 2 Cadbury Dairy Milk Silk Silk Chocolate 160 150 1.066666667 Cadbury Dairy Milk Silk Bubbly 170 120 1.416666667 Cadbury Dairy Milk Silk Roasted Almond 160 137 1.167883212 Cadbury Dairy Milk Silk Oreo 170 130 1.307692308 Cadbury Dairy Milk Jelly Popping Candy 100 94 1.063829787 Cadbury Dairy Milk Silk Caramello 170 136 1.25 Lindt Excellence Piedmont Hazelnut 575 100 5.75 Lindt Excellence 70% Cocoa Dark Chocolate 575 100 5.75 Lindt Excellence 85% Cocoa Extra Dark Chocolate 500 100 5 Lindt Excellence 99% Cacao Noir Absolu 640 50 12.8 Cadbury Temptation Cashew 72 90 0.8 Cadbury Temptation Almond Treat 72 90 0.8 White Chocoville Compound Chocolate slab 150 500 0.3 Lindt Excellence 90% Cocoa Dark Supreme Noir 650 100 6.5 Cadbury Bournville Raisin and Nut 99 80 1.2375 Cadbury Bournville Cranberry 99 80 1.2375 Nestle Kitkat 10 12.8 0.78125 Nestle Kitkat 25 37.5 0.666666667 Nestle Kitkat 20 27.5 0.727272727 Amul Milk chocolate 100 150 0.666666667 Hershey's Creamy milk chocolate 100 35 2.857142857 Mars Snickers 20 24 0.833333333 Mars Milk chocolate 40 17 2.352941176 Ferrero Rochers 630 200 3.15 Ferrero Rochers 800 300 2.666666667 Toblerone Milk chocolate 80 50 1.6 Toblerone Milk chocolate 350 100 3.5 Price Analysis Return to Q&A
  • 28.
    Increasing competition withthe entry of both major global and homegrown players. Global players like Mars and Hershey have been launching their globally iconic brands in India looking to leverage the low penetration in India Increased preference of premium and dark chocolates have presented a new threat. Ferrero (due to its primarily premium offerings) has already overtaken Nestle and is the fastest growing company in chocolate confectionary. Mars had recently overtaken Mondelez in the modern retail category Chocolates are considered a sinful indulgence and linked to obesity which has forced people to look for healthier alternatives. Carob, a healthier substitute to chocolate has been finding increasing acceptance among consumers because of the above reasons Prying away the share from traditional sweets which are intrinsically linked to the taste buds and traditions of the people here is extremely difficult and is both money and time consuming Price points pose another challenge. Majority of Indians still do not see paying 10 or 30 Rupees as value for money which accounts for the low penetration in India Increased demand for unconventional flavors has seen brands like Earth Loaf make gains. Cadbury Dairy Milk doesn’t have an offering in this segment Major Threats Return to Q&A
  • 29.
    Primary Research Insights •Reasons to Buy: To uplift mood, sweet Craving, Gifting, better alternative for a diabetic person than sweets when sweet craving increases, Works as a energy booster • Gift given to: Date, first meeting, child's birthday part, birthday gift, child in a home • Consumed by everyone in the family, cubes are broken and consumed, cube helps in sharing, kids consume it by biting, fun is in breaking and eating it • Highly likely to gift Dairy Milk because the chocolate pack looks good • Purple color looks good, has been the same purple color for ages, purple color means Dairy Milk, looks premium, purple color is associated with a nice chocolate • Cubes broken and consumed as a sweet after food on a habitual basis • Dairy Milk is sugary, sweet, has a strong after taste • Dairy Milk consumed when there is sugar craving • Dairy Milk is synonymous with the brand Cadbury
  • 30.
    Q & A •There are total 5 products under Dairy Milk brand and a total of 17 variants. The number of products is optimal • Each and every product is addressing a particular need of the customer. Dairy milk – Milk chocolate, Dairy milk silk – Premium chocolate, Dairy milk shots– Budget Chocolate, etc. • Products of Cadbury Dairy Milk are well differentiated from each other and its competitors. Price analysis of the products of Cadbury has been done including that of some major competitors • Cadbury dairy milk just launched the ‘Cadbury Dairy Milk Lickables’. It should not launch any new product now but should prepare to venture into the ice cream and sugar free chocolate segment. Because, this is an untapped market and is a different segment altogether, there shouldn’t be any cannibalization of the brand but rather sales and market share would increase from untapped markets. Positioning of the brand • Brand Equity and Positioning of Cadbury Dairy Milk • Point of Difference – Strong brand recall of the brand; high emotional connect with the Indian consumers through strong emotional marketing; very strong distribution network and attractive packaging • Over time the packaging has changed very subtly and the stories have been quite consistent as well, starting from ‘Asli swad zindagi ka’ to ‘ Shubh Arambh – Kuch meetha ho jaega’, all relating to happiness quotient. The same has been advertised on media as well • Major threat include – Consumers being health conscious, Strong international brands entering the Indian market, etc.
  • 31.
    Recommendations Cadbury can ventureinto the ice cream segment as it is an indirect competition to chocolates and the brand can diversify the portfolio in regard. The extension will be as ‘Dairy Milk Ice Cream’ exclusive outlets where the flavors will have the mix of the classic Dairy Milk chocolate bar with other ingredients Diabetes currently affects more than 69.2 million Indians, which is more than 8.7% of the adult population (WHO 2015 Data), restricting them to experience their favorite Cadbury Dairy Milk chocolates. Cadbury can extend the brand with ‘Dairy Milk Sugar Free chocolates for the people who suffer from Diabetes as this segment is currently untapped While making chocolate cakes at homes, instead of using Hershey’s chocolate sauce, people prefer to melt and mix Cadbury cocoa and Cadbury Dairy milk together and use it for the icing. This insight can help Cadbury Dairy Milk to consider launching Dairy Milk Melted Chocolate in the near future Return to Q&A