New Product Development, Cadbury

1.0External Marketing Analysis Company: Cadbury is holding 11.6 per cent of the market share, number forth in terms of global sales with increased on average by over 15 per cent per year of sales growth since last ten years. Through the survey, we have concluded that 95 per cent people are familiar with our product from which 88 per cent of people are totally satisfied with our quality products; moreover 24 per cent people are our regular customers. Product: The rating achieved for a new Cadbury product; 32% of consumers rated this product as excellent and 58% as good.

1.0.1Situational Analysis It’s been 14 years since Cadbury Pakistan is doing its business in Pakistan and has gained the confidence of the Customers and now it has decided to launch a new product in Pakistan. Winters have come in Pakistan and it’s usually very cold in the Northern areas and in the upper parts of Punjab. As the winter season starts the demand for the dry fruits also increases and so does the chocolate. The reason for the increase for the chocolate is that it melts in the summer season in the normal temperature. According to a survey the consumption of the dry fruits in the winter increases by more than 35% so the Cadbury Pakistan has decided to launch a chocolate which has a beautiful combination of dry fruits in it and coated with the chocolate. Chocolate is being considered as the most delicious in Pakistan. It is also given as a gift to others especially on the Valentine’s Day. Prior to that there is no other Company in Pakistan which is producing the chocolate coated Nuts.

1.0.2 Market Summary Talking about the market summary the company should be well aware of its resources and the segments it would serve. Also divide the market into groups, based on demographic variables such as age, sex, family size, income, occupation and education. So we will discuss target market and market demographics.

1.0.2.1 TARGET MARKET Evaluating market segments Our segment size would be from age 5 – 60. The reason to target this age is because chocolate is eaten and liked by every one of us from child to the person of mature age. As our product is for people who are suffering from obesity or are diet conscious as the consumption of dry fruits increases in winter season, which is a great factor for

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Endeavors Souls obesity.So everyone would be searching the meal to eat that provides warmth and different taste. Differentiated marketing We would go for different offers for each age group. As we will split our segment into three different groups. That is from age 5 – 10, 11 – 20, and 21 – 60. We will offer a milk chocolate coated with nuts for children’s and it would be packed in an attractive wrapper for children’s with characters such as Spiderman, batman, Barbie and etc. We will offer another products like brown chocolate coated with nuts that has a low calorie and is for chocolate lovers and mature age people as they are more diet conscious will be offered white chocolate coated with nuts.

1.0.2.2 MARKET DEMOGRAPHICS Market demographics help the company to divide the market into groups based on variables such as age, gender, family size, income, education and occupation. And in different geographic units such as nations, regions and countries we will discuss in detail each of them.

1.0.2.2.1 GEOGRAPHICS We are launching our product in Pakistan. In first phase we will launch our product in four major cities 1. Islamabad 2. Karachi 3. Lahore 4 Faisalabad

1.0.2.2.2 DEMOGRAPHICS AGE: 5-60 GENDER: Male/Female FAMILY LIFE CYCLE: Young, Single, Married, Older INCOME: As concluded from the survey that our prices are economical so everyone can afford it. EDUCATION: Grade school or less, some high school, high school graduate, college graduate.

1.0.2.2.3Behavior factors Occasions:-We are targeting special occasions like New Years Eve and Valentines Day. Our product can also be used on regular bases as in winters people like to have chocolate with nuts. Benefits: - the main benefit of our product is that we are providing good quality product at economical prices. Keep the customers fitness in mind we are providing chocolate coated with nuts which will have a low calorie count.

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Endeavors Souls User’s status: - As we are launching a new product our product will be categorized in first time users. Readiness stage: according to the Questionnaire result we have come to the conclusion that people are interested in our new product. Attitude towards the product: the attitude towards our product is positive as people are very in trusted in our new product.

1.0.2.3Market Needs: These days chocolate has become a need for people because it is a major part of desert which is eaten by all age groups of people

1.0.2.4Market trends: The market trends these days are to stay smart. So in this new product we are providing you a great taste with a low calorie count

1.0.2.5Market growth: According to the consensus we have found out that the market growth of our product is very steady.

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2.0Internal Company Analysis Structure and organization Our confectionery business is organized into four business segments which we call regions, and six global functions, as depicted in the chart below. Each region is focused on commercial operations in its geographical and product area, and also maintains teams from each of the six functions. The four regions are: Britain, Ireland, Middle East and Africa (BIMA); Europe; Americas and Asia. On 15 March 2007, we announced that we intended to separate our Americas Beverages and confectionery businesses, and this process is currently underway. The functions are 1. Global Supply Chain 2. Global Commercial, Science & Technology 3. Human Resources 4. Finance and Information Technology 5. Legal and Secretariat. Each function has a small central team and regional presences which are coordinated by the central team. This structure enables us to focus on delivering our commercial agenda and top-line growth, and allows the functions to develop and drive global strategies and processes towards best in class performance, while remaining closely aligned to the regions' commercial interests. The leaders of each of our functions and regions, and of Group Strategy, report directly to Todd Stitzer, CEO.

Functions Global Supply Chain The role of Global Supply Chain (GSC) is to ensure the supply of product to satisfy our customers' expectations whether manufactured by us or by a third party. GSC's role encompasses the supply of raw and packaging materials, and planning, manufacturing, distribution and customer services. GSC is responsible for managing both the fixed assets of over 100 manufacturing facilities and over 250 warehouses, and working capital. See more about Global Supply Chain. Global Commercial The role of Global Commercial (GC) is to enable higher sales growth from the regions and business units than they could otherwise generate on a stand-alone basis. GC has a central and regional structure, with a central team managing teams drawn from all parts of the Group. Its activities focus on: •creating a winning strategy for each category in which we participate •creating global solutions for markets to win locally 4

Endeavors Souls •creating a pipeline of innovation, •coordinating the management of key international customers, •creating world-class commercial capabilities.

Science and Technology Science and Technology (S&T) leads our technical innovation programs. S&T sets and communicates our global technical priorities, establishes and co-ordinates our science agenda, and facilitates global knowledge management and best-practice transfer. It prioritizes with the regional teams and funds technology developments which underpin our innovation agenda, including longer-term globally-applicable development programs. It co-ordinates nutrition initiatives as a key element of our food policy. Together with Group Legal, it also creates a strategy for our intellectual property assets. Human is to improve our performance by enhancing the effectiveness of our day-to-day working practices, the capability of our people and the quality of their output. It is also responsible for ensuring that the working environment at Cadbury Schweppes reflects our core purpose and values, and enhances our culture. HR supports the business in delivering its goals by putting in place the right people for the right job; by helping develop and support the most effective organizational strategies and structures; and by attracting, retaining and developing employees and rewarding the right behaviors and outcomes. .

Finance The role of Finance is focused on a strong business partnership with the commercial operators of the Group, while maintaining a robust financial control environment. The function sets low cost, IT-enabled common internal processes and standards for financial reporting and control, and ensures high quality external reporting which complies with all applicable laws and regulations. It is responsible for setting our annual contracts (or budgets), for developing our longer-term strategy and strategy platforms and for managing acquisitions and disposals. It seeks to act as a business partner and commercial adviser to the regions and other functions in achieving our goals and priorities. It is also responsible for external financial and other regulatory reporting and for managing our communications and relationship with the investment community around the world. Legal and Secretariat Legal and Secretariat work with and support the regions and other functions by taking responsibility for a broad range of legal activities. These include corporate governance matters; compliance with US and UK securities regulation and legislation; intellectual property; mergers and acquisitions; litigation management; general contract work and incident management.

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Endeavors Souls Companies purpose and values We are an international company, proud of our long heritage, respectful of the social and natural environment in which we operate, supportive of our consumers, customers and colleagues and passionate about success. We make market and sell unique brands which give or bring pleasure to millions of consumers around the world every day. We have done this successfully for over 200 years. This success has been built upon understanding the needs of our consumers, customers and other stakeholders and by operating to a clearly defined set of values. But the world changes around us. The obligations of business to society have broadened. Yet at the same time we want to ensure the continuation of our own heritage. Our statement of purpose and values provides a clear framework for our strategic intent and how we will conduct our business.

Our objective is to consistently deliver superior shareowner returns. We are committed to this objective although we recognize that the company does not operate in isolation. We have clear obligations to consumers, customers and suppliers, to our colleagues and to the society, communities and natural environment in which we operate. Together, our purpose and values capture the heritage of our past, recognize the demands of the future and blend them to establish the guiding principles and values for the way we operate our business around the world. Cadbury Schweppes is committed to the highest standards of corporate governance and corporate and social responsibility throughout the group. We are committed to ethical business practices, honesty, fair dealing and full compliance with all laws affecting our businesses.

Companies business principles We take our ethical business practices very seriously and have defined our commitment to these in Our Business Principles. They describe the high standards of conduct we set for ourselves and act as a guide for turning our values into action. The 6

Endeavors Souls principles take into account global standards, such as the Universal Declaration of Human Rights and the International Labor Organization conventions. Please click on the link below to read a full copy of Our Business Principles. We expect each employee to uphold our ethical business practices. Every manager receives an annual communication on the principles and each is expected to be responsible for ensuring the same behavior of those they manage. We ask our managers to sign up to Our Business Principles, which includes affirming that they have communicated the principles to their staff. In 2006, we used an electronic IT communication and sign-up process for our senior executives. Our Human Resources department confirms sign-up by our senior executives to our Group Company Secretary and the Chief Executive's Committee Marketing Expenditure Marketing expenditure was £515 million, which at constant exchange rates, was an 18% increase over 2000. This represents marketing to sales ratio of 20.9% (21.1%). The modest reduction on last year is due to the changing mix of the Group's portfolio following acquisitions made in 2000. Adjusting for this the Group continues to increase real investment behind its beverage and confectionery brands.

2.0.1 SWOT analysis 2.0.1.1 Strengths Quality and brand name of our product will be our strengths as there are no close competitors of our product in PAKISTAN .The people will only be buying our product in excess because they do not find the quality in the market regarding chocolate coated nuts or any other chocolate which has dry fruits in it. The innovative idea in our product is that we are providing hazelnuts, walnuts and almonds all in one chocolate. 2.0.1.2 Weakness As Pakistan is developing country so many firms are trying to come into the market with there products which are imported from foreign (mainly from china). These products are really cheap compared to the market Our product will be the first of its kind in the local market which is produced by a local brand so people do not have the idea of prices. As we have set the prices low according to our profits but as we see the local market which has really cheap prices as compared to our product. 2.0.1.3 Opportunity: There will be no local competitor of our product except Candy land’s Sonnet (a chocolate bar which has dry fruits added in it) which is not widely used in Pakistan .The product like ours will be the first of its kind which is chocolate coated nuts so the people will be purchasing in a great quantity.

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Endeavors Souls 2.0.1.4 Threats: The threats to our products will be the foreign importers who are importing the chocolate from other countries which are really very cheap and have very low quality but there are some products like Mars and Snickers which are rated high in the Markets. The other threat is our local home industry that are making cheap and low quality products which are also not good for the health

2.0.2 Competition Our main competition is Cadbury chocolate with nuts as there is no close competitor of Cadbury in Pakistan. The new thing in our product Enticing treats is that we are providing variety of nuts in one chocolate.

2.0.3 Product Offering Weight

Prices

20gm pack,

Rs.10

50 gm Pack,

Rs.30

150 gm Pack,

Rs.90

350 gm Tin,

Rs.175

500 gm Tin,

Rs.350

2.0.4Keys to success •

The innovative feature of our product is that we are the first company launching nuts and chocolate together.

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The quality of Cadbury’s product is recognized through out the world

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We have the competitive advantage as the products are mostly consumed more then other brands.

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The economy price will attract a large number of buyers.

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The product is widely available in the market. 8

Endeavors Souls The product is promoted through advertisements and ads on billboards

2.0.5Critical issues Economical situation of the country: The economical situation of our country Pakistan is not that good. We are planning to launch our product after the emergency is lifted on Valentine’s Day. It is foreseen that at that time the economical situation will be better. Work force: The workers in Pakistan are not skilled enough to work on our machinery. Because of this Cadbury company is going to train all the workers for six months and then put them on it. This process has already started. Quality control: A food inspector will be assigned to check the quality of the product in every factory so he/she will give us an updated on the quality and if there is a problem then it can be solved. Price control: The retailers will be given an allowance that they keep the products fixed prices every where n don’t fluctuate them.

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3.0Market Strategy We are using Undifferentiated Marketing Strategy for our new product. As age group of 7-64 is mostly nuts consumer, so we are targeting that group with our single offer.

3.1 MISSION Cadbury’s mission statement Says simply, ‘Cadbury means quality’; this is our promise. Our reputation is built upon quality; our commitment to continuous improvement will ensure that our promise

Mission Statement 0f the product: The mission statement of our new product is “To provide our customers with a tempting and exquisite taste” as Enticing Treats means a mouth watering treat which is simply irresistible.

3.2Financial Objectives • • • • • • •

Achieve revenue growth of 20% per year Increase earnings by 15% annually Increase dividends per share by 7% per year Increase net profit margins 8% to 4% Boost annual returns on invested capital from 15% to 20% Stronger bond and credit ratings Stable earnings during recessionary periods

3.3Positioning Cadbury find it easy to choose their Positioning Strategy. Cadbury is well Known Company for its Superior Quality in certain segments and will go for this position in new segment’s as there are enough buyers seeking quality now day’s. The positioning task Cadbury consists of three steps; 1. Identifying Possible Competitive Advantage 10

Endeavors Souls 2. Choosing the Right Competitive Advantage 3. Selecting an overall Positioning Strategy The Cadbury must effectively Communicate and deliver the Chosen Position to the market.

Identifying Possible Competitive Advantage: As Cadbury want to build profitable relationship with target customer’s so Cadbury must understand Consumer’s needs better than Competitor’s do and must deliver superior value. Cadbury can position itself as Providing Superior Value. It will be a competitive advantage for the Cadbury. Cadbury position it’s product as offering the best quality and services. But it must have to deliver the promised quality and services. Cadbury can also differentiate the services that accompany the product. Cadbury can gain services differentiation through speedy, Convenient and careful delivery. Cadbury can gain a strong competitive advantage through people differentiation by hiring and training the better people than competitor’s do. Choosing the Right Competitive Advantage Cadbury has been lucky enough to discover several potential Competitive advantages. Cadbury must carefully select the way in which it will distinguish itself from competitors. A difference is the worth establishing to the extent that it satisfies the following criteria. Important: The difference delivers a highly valued benefit to the Target buyers. Superior: The difference is superior to other ways that consumers might obtain the same benefit. Communicable: the difference is Communicable and visible to the buyers. Selecting an overall Positioning Strategy Cadbury would be selling its high quality products at lower prices to get the Buyer’s Greater Value.

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3.4 STRATEGIES Product strategy We have the competitive advantage that is our quality. It is recognized throughout the world and our product is a convenience product. Promotion strategy: We can distinguish ourselves from the competitors on the following criteria: Important: as we are the first one launching nuts coated with chocolate .and due to winter season it will serve as a good product to our target market. Communicable: yes the difference is communicable to the buyers through our advertisements on TV and billboards. Affordable: as the result of a survey the prices set are economical. Positioning strategy: More for the same: As we are offering the same quality same taste at a economy price. Brand strategy: We will position our brand at its attributes that is its innovative ingredient and good taste. And strong beliefs and values as Cadbury’s have many loyal customers. The product name is Enticing Treats means a mouth watering treat which is simply irresistible The brand is licensed and is a international brand.

Pricing strategy Our pricing strategies are as follows Weight Prices 20gm pack, 50 gm Pack, 150 gm Pack, 350 gm Tin, 500 gm Tin,

Rs.10 Rs.30 Rs.90 Rs.175 Rs.350

And it is concluded from the survey that customers by looking this price chart have accepted the prices and called it as an economical.

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3.5Market Mix The market mix comprises of the 4 P’s which are product, price, place and promotion. Those are all discussed below. 3.5.1 Product: Our product is a new product of Cadbury Chocolate. It is called “Enticing Treats”. In this we are providing chocolate coated nuts with a low calorie count. Product strategy We have the competitive advantage that is our quality. It is recognized throughout the world and our product is a convenience product. 3.5.2 Price: We are providing good quality and economical price.

Propose Price: Weight 20gm pack, 50 gm Pack, 150 gm Pack, 350 gm Tin, 500 gm Tin,

Prices Rs.10 Rs.30 Rs.90 Rs.175 Rs.350

3.5.3 Place: We are launching our new product in the main cites of Pakistan which are as follows 4. 5. 6. 7.

Islamabad Karachi Lahore Faisalabad

3.5.4 Promotion: we are promoting our new product with the help of advertisement on bill boards and on television.

Advertisement

Scene 1# There is a fat person doing exercise in the gym. After a while he gets on the treadmill and finds out that his weight has not decreased even after a year’s exercise.

Scene 2# That person goes to a nutritionist to find out an effective way to lose weight. The nutritionist asks the fat person, “What the main content of his diet is?” He answers “chocolate and nuts.” The nutritionist advised him to eat the new Cadbury product which is made up of low calorie chocolates with nuts. It tastes the same yet is less fatting. 13

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Scene 3# After 6 months the person is in the gym checking his weight after a workout. He has lost 10kg. He smiles and says “Nothing comes between me n my Cadbury”. Promotion strategy: We can distinguish ourselves from the competitors on the following criteria: Important: as we are the first one launching nuts coated with chocolate .and due to winter season it will serve as a good product to our target market. Communicable: yes the difference is communicable to the buyers through our advertisements on TV and billboards. Affordable: as the result of a survey the prices set are economical.

4.0 Control 14

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Price We have made the Price of our Product so economical so that even a lower class can afford it. We have not made this Product for only one class but it is for all. The prices of our products are; a) 20gm pack Rs.10 b) 50gm pack Rs.25 The retailers will be given an allowance that they keep the products fixed prices every where n don’t fluctuate them. Promotion We will be doing massive Promotion of our product. We will be doing Road Shows for the awareness of our new product for making customers Loyal and Our potential Customers. As our product is launching in three majors cities so will advertise our product massively with the help of Television Commercial, Pamphlets, Banners and we will give our customers incentives such as to win prizes in lucky draws. As our policy is Customer come first so we would establish a department Customer care Center if there would be any problem of the customer about the so we could solve. The basic aim of this department will be to get suggestion of the customer about the product and try to improve it and make customers loyal.

Quality control A food inspector will be assigned to check the quality of the product in every factory so he/she will give us an updated on the quality and if there is a problem then it can be solved.

4.1 IMPLEMENTATION Initial Packaging •

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Packs: The Nuts are packed in bags, that consist of thin layer of aluminum foil and printed sheet attached and sealed together, which protect the product from heat, light, air, germs etc keeping the real taste for long time. The sizes of these packs depend upon the product quantity. Tins: The inner sides of the tins used for canning finale product are coated with butter paper (like bucket). The Coated Nuts are packed in it and its top is sealed with aluminum foil to make it air-tight. After cap, it is again sealed with a thin layer of plastic sheet enabling the product protected against environmental effects. These are in jar shape and special designed tins are also used according to the occasions like Eid, New Year, and Valentines etc. 15