Cadbury Case Study

Introduction

Today the share of promotions in the marketing budget of a typical consumer products' company is continually on the rise. They may be preferred because good promotional exercises provide the facility to carry out controlled activity on a focused target group and unlike mass media advertising, it directly addresses and involves the consumer.

There are other reasons that abet their popularity, they are: -

* Consumer promotions produce results

* The results occur quickly

* The results are measurable

* Consumer promotions are relatively easy and in expensive to implement

Different marketing activities affect various aspects of consumer buying process. Consumer promotions generally hit directly at the decision and purchasing stages of the buying process. Thus, they affect behaviour directly producing immediate results. Consumer promotions can thus be defined as "Marketing and communication activities that change the price / value relationships of a product or service, thereby generating immediate sales and altering long term brand value". Various types of consumer promotions are coupons, contests, sampling, cross promotions, bonus back, freebies, etc.

Brand managers have, thus, a plethora of choices when opting for a consumer promotion. How they actually go about choosing it is critical in determining the extent of success the promotion would achieve. To design an effective promotion, the brand manager must understand what is it that puts that gleam in the consumer's eye without distorting its brand equity.

Promotions must be synergistically linked to the brand attitude. Promotions or below-the-line-marketing is spreading like craze.

Though there is a considerable change in the presentation and approach. Companies are throwing just about anything to boost their branding and sales. From tangible to intangible, everything is being effectively exploited. The next most effective and result oriented strategy is Give-away. Considering the influence of the housewife in the day-to-day buying decisions, this strategy is yielding outstanding results. Besides, considering the rising influence of children in the buying decisions this strategy surely yields results. Creativity and innovation is the key to this form of promotions. Specialized Give-aways make excellent premiums.

Consumer Promotion by Cadbury's

Cadbury had embarked on a strategy which involves increased consumption of its products through enhanced reach, affordability and visibility, which it feels, can be attained by creating new markets, widening the depth of its distribution network and working towards a comprehensive portfolio with brands across all price segments.

On the distribution front, the company increased the number of its distribution outlets from the present 4 lakh to 5 lakh by the year 2000. To attain the objectives of affordability, over the past two years, Cadbury has been changing its product portfolio from pure chocolate items to confectionery, which includes caramel, nuts, raisins and wafers.

The aim is to bring down the price line and enter other markets than the purely urban ones. In line with this, it launched Googly in early 1997, and followed it up with products like Mocka and English Toffee. The strategy of the company has been to launch one major product and follow it up with smaller products, for instance, the launch of Picnic was followed by Cadbury Gold and a couple of sugar confectionery launches.

Intense competition from Nestle is one of the reasons Cadbury has re-worked its product range and made efforts to enter the mass product segment. In 1998, the company moved into smaller sized versions of Diary Milk and Perk and found to its delight that the introduction of economy priced models led to more people eating chocolate. In the same year, small packs increased chocolate volumes of Cadbury by 19 per cent and market. Nestle, with a 20 per cent share in the chocolates market responded with Munch, a chocolate brand came to counter Picnic.

Cadbury Dairy Milk chocolate was first introduced in the early 1900s, it made an immediate impact quickly becoming the market leader. The success story has continued. It is still the top selling chocolate brand in the country and the Cadbury Mega Brand's broad family of products today has an international retail value approaching US$ 1 billion. As an international brand, Cadbury Dairy Milk carries the same distinctive image all over the world. Wherever you buy a bar of Cadbury Dairy Milk, the pack design will be exactly the same, only the language will be different.

The first two additions to the Cadbury Megabrand family were Fruit & Nut in 1928 followed by WholeNut in 1933. The family has since been extended and there are now 10 varieties of Cadbury Dairy Milk bars in the range. In India Cadbury dairy milk is the most loveable one for kids as well as grown ups available in various sizes and prices.

Advertising highly influences consumers due to its brand ambassador Amitabh, jingles and also concentrates on emotional advertisements. Nestlй's liquid paste format Chocostick, priced at Rs 2 a unit, has been a runaway success and Cadbury countered Nestlй's Chocostick with a similar offering - Chocki. The mass market is categorized by Rs 5-10 price points, and according to industry data, this segment accounts for 70 per cent of overall chocolate sales in the domestic market. Urban penetration of chocolates among adults is just about 15 per cent in India, according to industry estimates.

Cadbury Heroes was launched in September 1999 meant for everyone, Tiny little bits of fun for everyone to share. A mix of Cadbury bars packed in a tub format that is ideal for informal everyday sharing. Consumers love to rummage and scrimmage in the tub to find their favourites. Includes Cadbury Dairy Milk, Cadbury Dairy Milk with Caramel, Cadbury Dairy Milk Whole Nut, Twirl, Time Out, Dream, Fudge, Crunchie, Picnic, Nuts About Caramel. Consumers love the brand - it's perceived as more fun, up-to-date and great for younger people.

It was launched in September 1999 in UK with the "People Magnet" campaign that features famous heroes being attracted to the tub. In 2002, a new campaign was introduced which showed adults in everyday situations sharing Heroes and having a "Tiny little bit of fun.

The brand also features as part of Cadbury's sponsorship of Coronation Street, where people