Cadbury Dairy Milk.docx

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Introduction Name of the Company; Cadbury Dairy Milk Address; Uxbridge Business Park in Uxbridge, London Borough of Hillingdon, England Form of Organization; Corporation Description of Business Operations; Cadbury is a global manufacturer, marketer and distributor of branded confectionery. The company’s confectionery business operates chocolate, gum and sugar categories. The company along with its subsidiaries primarily operates in the Eurozone, the US, Central and Southern America, Australia and other parts of Asia Pacific. Chocolate business represents the biggest business segment of the company with around 46% of the overall revenues FY2008. The company’s chocolate business is carried out on a regional basis according the tastes of the consumers in each market. The company operates its business through four business segments namely: Britain, Ireland, Middle East and Africa (BIMA), Americas, Europe, and Asia Pacific. Britain and Ireland (B&I) is the largest business unit in the Group. The company has strong market position in the UK (30% market share in FY2008), and Ireland (42%). The company’s main markets in Middle East and Africa include South Africa, Botswana, Swaziland, Namibia, Kenya, Egypt, Lebanon, Morocco, Nigeria, and Ghana. The company American business comprises the US, Canada and Mexico, three of the largest confectionery markets in the world, and extends through Central America and the Caribbean. The company also has its operations in South American countries including Brazil, Argentina, Venezuela, Colombia and Peru. The company is the leading player in South America with a market share of nearly 20%, with core strengths in gum and candy. In Europe, the company has significant gum and candy businesses, with strong gum market shares in the majority of Western Europe, Scandinavia, Turkey and Russia. The company’s chocolate business is concentrated in Poland, Russia and France.The company’s biggest European operating unit is in France. The company’s Asian businesses are concentrated in India, Malaysia, Thailand and China. The company’s key brands in these regions include Cadbury Dairy Milk, Bournvita, Halls, Eclairs/Choclairs, Clorets, and Dentyne. In the Pacific regions the company’s operations are primarily located in Australia, New Zealand and Japan. Cadbury has a leading position in 1

Australia with an overall 30% market share. While in New Zealand, the company holds a market share of around 41% in FY2008. Target Market; Cadbury brand’s Dairy Milk chocolates targets kids within the age group of 5 to 10 years (Cadburyworld.co.uk 2016). This is because, consumers of this age group are expected to prefer chocolates than other confectionary and best satisfy their needs. Over the years the target consumer groups of Cadbury brand’s Diary Milk products has shifted from kids to adults that includes all the family members those can celebrate any festival with these chocolate products. The brand also targeted young generation who enjoy celebrating occasions by purchasing chocolates but this also limited the market segment for Dairy Milk product. For this reason Cadbury has developed a campaign “Kuch Meetha Ho jaaye’ for creating its image as a sweet that could target chocolate loving consumers of all age groups (Cadbury Official website 2016). Cadbury has targeted those consumers who celebrate special occasions by gifting sweets in attractive packaging (Cadburyworld.co.uk 2016). For attracting this target consumer group, premium packaging of Dairy Milk chocolates is done and gift boxes with all dairy milk product ranges are made available to its target consumers. Organizational Chart; The company does not have a specific organizational chart posted online. However, as per the company, this is how the organization works internally.

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Company History; Cadbury Dairy Milk is a brand of milk chocolate manufactured by Cadbury. It was introduced in the United Kingdom in 1905 and now consists of a number of products. Every product in the Dairy Milk line is made with exclusively milk chocolate. In 2014, Dairy Milk was ranked the best-selling chocolate bar in the UK.[1] It is manufactured and distributed by the Hershey Company in the US under licence from Cadbury.[ In June 1905 in Birmingham, England, Cadbury made its first Dairy Milk bar, with a higher proportion of milk than previous chocolate bars, and it became the company's best-selling product by 1914. George Cadbury Junior, responsible for the development of the bar, has said "All sorts of names were suggested: Highland Milk, Jersey and Dairy Maid. But when a customer’s daughter suggested Dairy Milk, the name stuck."[3] Fruit and Nut was introduced as part of the Dairy Milk line in 1926, soon followed by Whole Nut in 1930. By this point, Cadbury's was the brand leader in the United Kingdom.[4] In 1928, Cadbury's introduced the "glass and a half" slogan to accompany the Dairy Milk bar, to advertise the bar's higher milk content.[5] In September 2012, Cadbury made the decision to change the shape of the bar chunks to a more circular shape in order to reduce the weight. The bar had not seen such a significant change in shape since 1905. Since 2007 Cadbury had a trademark in the United Kingdom for the distinctive purple colour (Pantone 2865C) of its chocolate bar wrappers,[6] originally introduced in 1914 as a tribute to Queen Victoria.[7] In October 2013, however, an appeal by Nestlé succeeded in overturning that court ruling.[8] In July 2018, Cadbury announced it would launch a new Dairy Milk version with 30% less sugar. The chief nutritionist of Public Health England, Dr Alison Tedstone, said she was "pleased that Mondelez is the latest … name" to offer "healthier" products.[9]

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II.

Statement of the Problem II.I Internal 1. It has been relatively high priced brand, which is turning the price conscious customer away. 2. Cadbury offers a limited variety of products as opposed to other leading competitive brands, e.g. Amul and Nestle that offer an array of products like biscuits, dairy products, etc. 3. One of the major raw materials i.e. cocoa has to be imported, leading to bunched imports and higher inventory. II.II External 1. New brands are coming and existing brands are introducing new variants to add up to an already overcrowded market. 2. Changing restrictions and rules from Government quality control boards may result in pressure on the production of the company & cost increase 3. Health conscious people think that chocolates are bad for the health, thus, it can affect the sales of the company.

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SWOT Analysis Strengths Strong Distribution: Cadbury has identified needs of different market perfectly and accordingly has set up strong distribution which has helped it gain strong market share in urban as well as rural parts of various countries. Cadbury’s support: Cadbury, being one of the largest confectionery companies around the world, has a strong hold in many countries. It has set up strong distribution channels around the world and has financial stability. Strong Brand Loyalty: Dairy Milk is a part of an impulse buying industry, confectionery. In such an industry, customers tend to switch brands at zero cost and thus maintaining customer loyalty is difficult. But, Dairy Milk has been able to maintain strong brand loyalty. Strong Brand Recall: Dairy Milk is one of the most successful products of Cadbury and has a very strong brand recall. People equate chocolate with Dairy Milk, especially in areas where awareness of other brands is very low. Strong Advertising: Dairy Milk has always positioned the brand as a family product with specific importance to its target audience which is 10-25 years of age. Variety in offerings: Dairy Milk is present in 4 different variants which are Chocolate, Fruit & Nut, Roast Almond and Crackle. This attracts a different set of consumers and helps in increasing revenues. High Number of SKUs: Dairy Milk has a high number of SKUs especially for its chocolate version. In India, it has SKUs starting at Rs. 10 and ranges till about Rs 200. This presents the high number of options and offerings for different types of consumers and markets. 4

Weaknesses Because it is one of the most loved brands in chocolates, there are very few weaknesses which Dairy milk has. High Sugar Content: Cadbury Dairy Milk has very high sugar content, as per food net India; Cadbury Dairy Milk had over 50% (w/w) sugar content. The current trend globally is to move towards healthy products and thus this is a weakness. Lower cocoa content than the competition: Cadbury Dairy Milk has about 2.58% (w/w) of cocoa content which represents the intensity of chocolate in the product. Other competitors like Amul and Schmitten had over 3% Cocoa content. Controversies: Cadbury has had to face its share of controversies. Cadbury’s worm controversy in India had made a big impact on its brand credibility and Cadbury had to put in a lot of marketing effort to be able to overcome that. Such controversies affect the trust on the brand. Opportunities Low Sugar variant: Cadbury Dairy Milk can come out with products with low sugar or zero sugar content considering the fact that health awareness is increasing around the world and people are moving towards healthier products. Nutritional variant: Being in line with bringing out new variants, the market for nutritional chocolate is emerging and Dairy Milk can come out with a variant with high Nutrition content. Continue market domination with high brand engagement and interesting advertisement: Cadbury dominates various markets around the world in the confectionery segment. Being an impulse market, it is very important to keep engaging customers and roll out interesting advertisements. Threats Low Switching cost: Dairy Milk’s marketing expenses are higher considering the low switching cost as it falls under the impulse buying category. Competition: Dairy Milk has to compete with many brands around the world like Lindt, Ferrero, Amul, Hershey’s and Schmitten etc. Such competition reduces market share. Increasing health awareness: With increasing health awareness around the world, People are moving away from high fat containing products to healthy products.

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IV.

Solution Cadbury is a brand which almost everyone knows. Even after completion of more than 100 years, the brand is into hearts of many people & it also leaves a significant mark amidst all the competition. Cadbury stands tall in food product sector. Although, they also are facing several issues like the one they encountered in 2003 where worms were found in their chocolates. This issue has been already resolved but the company still needs to make sure that this kind of issue won’t happen again in the future. Generally, Cadbury needs to focus on making sure that they always address their internal and external issues with sense of urgency.

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Recommendations Upon reviewing the SWOT analysis and analyzing the problems of the company, Cadbury may consider the recommendations below;  

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They can try introducing a variety of products just like its competitors so that they can expand their market. If they do not want to lessen the price of their chocolates, perhaps they can try to offer budget friendly bundles for customers who are concern about their budget. They can offer chocolates with lesser sugar content for health conscious customers.

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References    

https://en.wikipedia.org/wiki/Cadbury_Dairy_Milk https://www.marketing91.com/swot-analysis-dairymilk/?fbclid=IwAR3ZQLHKLx5gJQos39Sjgr8qv9V5s1Bpq_IIJyamOuf_ckCfDN1uNhTxMqo https://pestleanalysis.com/pest-analysis-cadbury/ https://www.ukessays.com/essays/marketing/business-description-and-market-analysis-forcadbury-marketing-essay.php

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