Cadbury Report Done Retouched essay

Executive summary This marketing situational analysis was carried out by an independent group of students and was designed to investigate the current condition of Cadbury internally and externally as well as to think of venturing into a new protein based confectionery product line. Overview This report was written in conciseness and clarity to provide insights into Cadbury from the history to the marketing theories they have applied.

The information regarding the internal and external situation of Cadbury and conclusions drawn from the applied marketing theories in this report were ollected and deduced from reading materials such as news articles, textbooks, and related websites. Summary of Result: Cadbury is the world 2nd largest confectionery company. Mondelez operates in 55 countries and has captured 70% chocolate market share in India. Cadbury managed to market its way out of scandal in recent years by venturing into premium chocolate and by showing sensitivity towards a countrys belief and practices.

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The growing trend of health- consciousness in the society has pushed Cadbury into introducing an innovative idea of protein-based confectionery product line. CONTENTS 1. 0 Introduction . 0 Market Situation 3 2. 1 Market Competitors 2. 2 Market Segmentation 2. 3 Consumer Behavior 2. 4 Cultural Factors 2. 5 social Factors 2. 6 Personal Factors 2. 7 Psychological Factors 3. 0 product 4. 0 price 5. 0 Place 6. 0 Promotion 7. 0 Process 8. 0 people 7 8 9 10 9. 0 Physical Evidence 4 5 6 10. 0 Competitive Situation 1 1. 0 Macro Environment 11 15 12. 0 Demographic Environment 13. 0 Natural Environment 16 14. 0 Technological Environment 17 15. Cultural Environment 16. 0 Strengths 17. 0 weaknesses 18. 0 Opportunities 19. 0 Threats 18 20 22 23 20. 0 Opportunity Identification 24 21. 0 Conclusion References 27 28 Cadbury is a British multinational confectionery company which is founded by John Cadbury in 1824. Its business has been operating in more than fifty countries all over the world and it’s the second largest confectionary corporations in the world (Cadbury, 2015). In addition, Cadbury has three big types of products which are Bars, Bags and Drinks and their most well-known products are Dairy Milk, Bourneville, Creme Egg, Bourneville, Wispa and Hot Chocolate (Moth, D).

Nowadays Cadbury is well-known in the whole world and their products enjoy a high reputation in various groups of people. Not only ell-known among young people, many old people also get accustomed to this brand. Therefore, Cadbury became amongst the top 500 companies in the world. Upon evaluation of Cadbury’s current products and position in the market, we have evaluated the possibility of venturing into protein-based confectionery products 2. 0 Market situation 2. 1 Market competitors Even though Cadbury locates at a high status in confectionery industry, the level of competition in this industry has been becoming continuously high.

Wrigley Company, Hershey Company and Ferrero Company are its big competitors (Candyindustry, 2015). They compete on making marketing environment force, making price and quality of products. In general, the speed that Cadbury is developing is faster than its competitors. Hence, Cadbury is one of the biggest leaders in confectionery industry. Market Segmentation is defined as a marketing strategy that divides the total product market into the same types of groups of buyers and it is based on needs, characteristics or behaviors (Armstrong, Adam, Denize &KotIer, 201 2, p. 48). Cadburys target market is based on the theory of market segmentation. The segmentation also lets Cadbury find and satisfy the needs heir customers and potential customers (NetMAB, 2010). In addition, the market segmentation can be categorized into four portions which are Geographic, Demographic, Psychographic and Behavioral. Geographic segmentation is defined as dividing companys market into different countries, nations, states and regions. Cadbury divides its business into all over the world in order to let more people figure out their products.

Then, Demographic segmentation is segmented on Age, Gender, Family size, Family lifecycle, Generation, Income, Occupation, Education, Ethnicity, Nationality and Religion. Cadbury put emphasis on these factors and make many related products to fit these factors. Furthermore, Psychographic segmentation is categorized into social class, lifestyle and personality. Cadbury is familiar to their customers who have different social status, lifestyle and personality. So Cadbury is good at catch customers’ psychology and make products to let them satisfied.

Finally, behavioral segmentation divides buyers into segments and it is based on consumer’s attitudes, uses and the responses to a product. Cadbury does well in observing customers’ behaviors to find opportunities of usiness (Armstrong, Adam, Denize , 2012). 2. 3 Consumer behavior Furthermore, consumer behavior issue is important for Cadburys Market. Customers’ motivation is to buy tasty and high-quality products. The taste and quality would also influence their decisions. There are four factors to infl uence consumers behavior. 2. Cultural factors: Cultural factors are coming from the different components related to culture or cultural environment from which the consumer belongs (Armstrong Adam, Denize &KotIer, 201 2, p. 149). Cadbury provides halal chocolate for people in Muslim-majority countries and vegetarian chocolate for vegan (Cadbury, 2015). So these cultural groups influence Cadburys variety of products a lot. Therefore, it makes a win-win result for both customers who want to buy special type Of chocolate and Cadbury which can make more profit from this. . 5 Social Factors: Social classes are defined as groups more or less homogenous and ranked against each other according to a form of social hierarchy (Armstrong, Adam, Denize &Kotler, 201 2, p. 150). People’s statuses and incomes are different. So Cadbury has cheap and expensive chocolate for different people who have ifferent incomes and status. 2. 6 Personal Factors: Decisions and buying behavior are obviously also influenced by the characteristics of each consumer (Armstrong, Adam, Denize , 201 2, p. 152).

Cadbury regards the characteristics of people and they make sweet and bitter chocolate for different characteristics people. 2. 7 Psychological Factors: Among the factors which influencing consumer behavior, psychological factors can be divided into four categories: motivation, perception, learning as well as beliefs and attitudes (The consumer factor, 2015). To increase sales nd encourage consumers to purchase, Cadbury should try to create, make conscious or reinforce a need in the consumer’s mind so that he develops a purchase motivation. He will be much more interested in considering and buy their products.

As said by Kotler (2002), “Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market’. Marketing mix is known as the Seven P’s, which are price, product, place, promotion, personnel, process and physical evidence (Khan, 2014). Marketing Mix is important because it influences the success of the companys marketing strategy. In this part, it will analyze Cadburys marketing mix situation by detailed analyze Cadburys product, price, place, promotion, personnel, process and physical evidence’s situations. . 0 Product Product is some service or good that a firm offers in the market (Khan, 2014). Cadbury produces different types of chocolate products to customers. For example, chocolates that come in bars, mixture boxes and tins, and powdered chocolate drinks (Cadbury, 2014). It also produces chocolate products by use different ingredients, such as vegetarian, dairy-absent, wheat-absent, nut-absent and gluten-absent (Cadbury, 2014). In addition, in different holidays or some special events, it will use special packaging for its products.

For example, the Magical Advent Calendar, the Milk Chocolate Snowman and the Caramel Bell Tree Decorations are all use the Christmas packaging (Cadbury, 2014). According to the above information, it can confirm that Cadbury’s product offering is a combination of goods, services, experiences and ideas because Cadbury provides many different varieties Of products. This can make customers be more loyalty to Cadburys chocolate products because it meets every individual’s preference and taste. In addition, here are some internal and external considerations can affect the products’ price.

Those internal and external considerations are as the following: Internal Considerations: Cost of production The product’s operational life External Considerations: Competitor’s pricing Buying power of customers Special holidays or events (Usually, in some special holidays or events, customers have the strong demand to buy Cadburys chocolate products because they buy it as a gift and give it to their friends. ) The change Of raw materials price Price is the most important factor that determining customer’s satisfaction Khan, 2014). Cadbury has many varieties of chocolate product, it offers different pricing of each product (Bhasin, 2014).

All the products’ prices are affordable to all customers with different income. In fact, Cadbury is using the customer-value based pricing strategy. According to Bhasin (2014), Cadburys dairy chocolate milk product priced in high as well as low variants because the product has a position of gifting and therefore is selling high volumes even at higher prices. Therefore, it can assurne that Cadbury uses the customer-value based pricing strategy because its products are priced on the asis of perceived of the product. 5. 0 Place Place refers to the availability of the product to the targeted customers (Khan, 2014).

Cadburys product can be bought in different supermarkets in Singapore, which are 7-Eleven, Cheers, Cold Storage, Giant, Guardian, NIIJC Fairprice, Sheng Siong and Watsons (Cadbury Glow, 2015). Cadburys distribution channels include the manufacturing warehouses where the chocolate production takes place. The first distribution channel is manufacturer, then wholesaler, then retailer (Cadbury, 2014). This shows that Cadbury is using the conventional marketing channel. 6. Promotion Khan (2014) reported that “promotion is a vital part of business and is an integral ingredient of the total marketing process”.

Also, promotion as a selling technique should be involved with communication. Cadbury has used a large number of advertising to promote its products in order to reach its target audience. They first type of Cadburys advertisements is put up the advertisement posters on the public areas. As figure 1, this advertisement poster uses the phrase ‘creme egg season 1st Jan – 4th of April’ to highlight that creme eggs are available for a limited period and ‘here today, goo omorrow to suggest that they will be gone soon. Cadbury used this poster to tell its customers that the number of creme eggs will be limited.

In addition, Cadbury also put the advertisements in different television channel. Figure 1 – Creme Egg Advertisement (Luke, 201 3) 7. 0 process Khan (2014) asserted that process is generally defined as the implementation of action and function that increases value for products with low cost and high advantage to customer and is more important for service than for goods. There are three main points in the process Of creating, delivering and onsumption that serve as ‘moments of truth’ for customers to determine their satisfaction level which are the technological process, electronic point- of-sale and indirect activities.

In Cadburys caser the technological process refers to produce chocolates with absence of ingredients that consumers are most commonly allergic to (Cadbury, 2014). The electronic point-of-sale refers to the barcodes printed on packaging quickens the process of checking out at the cashier. The indirect activities refer to interacting with consumers via social media and organizing competitions on social media platforms for ustomers to set up an opportunity to win prizes (Cadbury, 2014). . 0 People It seems that Cadbury’s staffs have not got a lot of interactions with customers in Singapore because Cadbury sends its products to the retailers to help them to sell it. Therefore, the customers have interactions with the retailers’ staffs but not Cadbury. 9. 0 Physical Evidence Khan (2014) revealed that physical evidence refers to the environment in which the service and any tangible goods that facilitate the performance and communication of the service are delivered.

Although Cadbury has not got ny direct store in Singapore, however, it carefully uses the blue color and obvious brand logo to design all the sales counters which placed in the retailers’ Store in order to build a environment which full with Cadburys feeling (as Figure 2). This as a physical evidence can shows a Cadbury environment to all the customer thereby facilitate the performance and communication of its service. Figure 2 – Cadbury Sales Counter Design (The Mooide Report, 201 3) 10. Competitive Situation As quoted by the renowned philosopher Heraclitus, “the only thing that is constant is change” (Heraclitus, 500B. C. is inevitably true and still is relevant even after 2 millennia. The trend of the world is ever changing as much as the needs and wants of people are ever growing. Being in the industry specifically the confectionery industry is no exception, the constant change in taste and preference of consumers is relatively difficult to be fathomed out even for the big well-established companies, let alone new entrants.

Having said so, Cadbury is undoubtedly creditable for its ability to survive and breakthrough to being the world 2nd largest confectionery company. With that being said, Cadbury has earned its place by standing out in the ompetitive situation within the industry, and will be further discussed and analyzed. The history of Cadbury stretches back Into year 1824, back then it was a mere grocer shop in Birmingham, however in the 21st century, Cadbury has ventured into various markets, operating in more than 55 countries worldwide. In terms of size, Cadbury proudly stood at 14. % of market share, followed closely by Mars at 14. 6% (Reuters, 2009). Cadbury has had a good start of the year earning 47cents per share into the second month of 2015 (Athavaley and Sharma, 2015). This is also contributed y the open innovation used by the Cadbury team to ensure competitive advantage by collaborating with external partners to find improvements they could bring to the market. For instance, Cadbury collaborated with King’s College, London who then conducted a research project to develop and validate the characterization of the physiochemical attributes of chocolate.

This collaboration has not only brought benefits from the invention itself, but also serves as a publication for Cadbury, spreading good words about them regarding how they are giving opportunities to the local students for a more practical exercise in the form of education. Product quality is vital to ensure the survival and success of a firm, as for Cadbury, the quality not only serves as a significant identity to its brand, it also carries the heart-filled sincerity the Cadbury team hopes to bring across to each and every customers.

According to the recent research conducted by the BBC team in conjunction with the current issue faced by Cadbury where a petition has been Signed by more than 37,000 people to boycott Hershey’s, which has the licensee to produce Cadbury chocolate in the US, and regards imported British-made Cadbury chocolate as a trademark infringement (Metz, 01 5), 5 out of the 6 people who participated in the chocolate tasting rated Cadbury as better than average, while Hersheys has only got 2 out of 6 people.

Comparatively speaking the quality of Cadbury products is one of the top in the industry, though they may not be as positively publicized as the competitors. Other than that, despite being a multinational company, Cadbury is sensitive towards practices and respectful of the difference in culture in each and every country. Look into Malaysia as an example, the incident where porcine DNA crisis scandal floods Cadbury Malaysia, making its way to the eadlines. Cadbury faced this problem with total transparency, participative and cooperative in each test and experiment until the truth is brought to light.

After months of struggle, efforts have paid off; Cadbury products are proven to be opposed as what has been claimed. Despite knowing that Cadbury is safe to be consumed by all ethnicities especially the Muslims, however very unfortunately the damage has been done to the reputation of Cadbury Malaysia. Most difficult part is what is beyond the control of Cadbury when people jump into their own conclusions and question the integrity of Cadbury as a company. Just as the battle seems unending, there comes an opportunity knocking on the door when the government authorities declared the GST to be imposed nationwide.

Mondelez Malaysia has then decided and promised not to add the Goods and Services Tax (GST) to the product prices when it comes into effect on the 1st of April 201 5 (Bingeman, 2015). This statement made by the Managing Director of Mondelez Malaysia is significantly comforting as the nation in Malaysia is deeply troubled by this issue, concerned about the increase in the cost of living. With the mentioned strategy, Cadbury has then been able to market its way out of the pork hocolate scandal and rebuild its reputation as well as the customer relationship and loyalty.

Moving on, there are also 2 marketing theories that should not be neglected, those are Points-of-difference (POD) where the aspects of the product offering that are relatively distinct to the offerings of like competitors and the points-of-parity (POP) which is the aspects of the product offering that are largely similar to the offerings of like competitors. In order to understand this better we must look into the case of Cadbury and its market positioning. The Cadbury consumers are of different ethnicity and age roup.

Market positioning is not apparent, as the goal was to cater to every single individual in the market, from Christians to Muslims, toddlers to elderly. The POP has been adopted by Cadbury since the beginning. However in recent months, Cadbury has decided to go for the point of difference approach by breaking into the premium chocolate market, by introducing ‘Cadbury GloW. This product made its global debut in India where the Cadbury has captivated 70% of the chocolate market share, loved by many as not only is it premium, also it offers customization, causing consumers to feel pecial and more attached to the purchased product 1 1. Macro- environment Macro-environment is an important part in Marketing and organization’s macro-environment decides organization’s marketing strategies. In general, this part talks about main forces in the Cadbury Organization’s Macro- environment. The force can be categorized into demographic forces, natural forces, technological Forces and cultural forces. These forces cause the decline of sales for Cadbury. 12. 0 Demographic environment For marketers, the demographic environment is a major interest because it includes people, and people who consist of markets.

Changes in the world demographic environment have major implications for business. There are many potential consequences for organizations when there are some changes happen in population demographics. As a result of the changes in total population, the demand for products and services would also change a lot (Armstrong, Adam, Denize &Kotler, 201 2, p. 80). A main target market for Cadbury is children and young adults. They are the group of people who are keen on buying Candy and chocolate.

But nowadays, with the aging population problem occurs, especially in some regions where Cadbury owns a ig market, the number of people who want to buy Cadburys products is decreasing. Old people usually do not like eating chocolate and Candy. Therefore, there is a big influence for Cadburys sales. Furthermore, Chocolate is defined as junk food by many people. There is a possible problem comes in is with the ingredients that are added to the chocolate. For instance, milk chocolate contains as much or even more sugar than actual chocolate.

And candy bars often contain a variety of other ingredients, some healthy, like nutsr some not so healthy, like caramel which is melted sugar and artificial ingredients. Such chocolate products would not be healthy foods (Zeolla, G. , 2012). As many of Cadburys products are regarded as junk food, it causes the decline of their sales. 13. 0 Natural environment The natural environment is another important factor of the macro- environment. It includes the natural resources which a corporation uses as inputs in order to influence their marketing activities.

The concern in this area is the increased pollution, shortages of raw materials and the increased governmental intervention. As raw materials become increasingly scarcer, the ability for company to create a product has been getting much more difficult. Similarly, pollution can make such a big influence and bring a big damage to a company’s reputation if they do not pay attention to the environment. The last concern, government Intervention can make it increasingly harder for a company to achieve their goals like the requirements that they set previously (Rust, R. T. , Lemon, K. N. & Zeithaml, V. 2004, p. 109). Pollution is an issue to confectionery productions. Cadbury has to increase their safety procedures as there have been many occasions where its products were infected by microorganisms. As long as the ingredients of Cadburys products re not polluted, consumers could safely purchase their products. Furthermore, the proportion which Cadbury occupies in a country is limited. Some country starts emphasize more on other industries such as cotton, wine and husbandry and there are many reasons cause this situation such as urbanization and industrialization.

If the proportion of Cadbury occupies in a country decrease, their sales will also decrease. 14. 0 Technological environment The technological environment is perhaps one of the fastest changing factors in the macro-environment. It includes all developments from antibiotics and urgery to nuclear missiles and chemical weapons to automobiles and credit cards. As these markets develop it can create new markets and new uses for products. It requires a company to keep their advantages which other company do not have and update their own technology in order to avoid recession.

They have to keep pace on trends so they can get ready for next important step and they would not become old-fashioned and suffering the financial consequences (Armstrong, Adam, Denize , 201 2, p. 92). It’s no surprise to find out that Cadbury has established separate Facebook pages to xhibit its most popular products such as Dairy Milk, Wispa, Crame Egg, Bourneville and Hot Chocolate (Moth, D. , 2013). However, although Cadbury has established Facebook page, they do not do enough publicity. There are not many people notice their Facebook page.

Therefore, although they did well for their Facebook page, there are seldom people see it and it is helpless for their sales. 15. 0 Cultural environment The cultural environment consists of institutions and other forces which influence a society’s behaviors, basic values, perceptions and preferences. Sometimes even within a country or in different countries, there are ubstantial differences in attitudes, beliefs, motivation, morality, superstition, and perception, as well as other characteristics (Armstrong Adam, Denize , 2012, p. 7). According to different people’s needs, Cadbury has halal chocolate for Muslim-majority country people. However, Cadbury Malaysia recalled two of its chocolate products after they tested positive for pork DNA, according to Reuters. Malaysia is a majority of Muslims and they do no consume products which contain pork DNA- Therefore Cadbury in Malaysia has to make sure chocolate products are Halal before distributing to the arket there.

Cadbury in Malaysia always tests food products to ensure that they are halal, Or in compliance with Islamic dietary restrictions (Hallowell, 2014). If Cadbury does not make suitable products to satisfy the people’s needs, based on their culture, it would directly cause an impact on the sales and cause it to decline. 16. 0 Strengths Cadbury is the world’s leader in the production and distribution of chocolates and they are known to have the best manufacturing and one of the widest channels of distribution. Cadbury is present in over 200 countries. (Hitesh Bhasin, n. d.

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