Chapter 1 Cadbury Business in India

Cadbury

We pour our hearts into creating foods that are delicious and loved by people worldwide. We

have delicious chocolates, delectable cookies, flavorful gums, fortified beverages and blissful

candies. And, whether you’re grabbing a quick bite, sitting down with your family or celebrating

with friends, we’re there with the brands you know and trust.

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INTRODUCTION

The Cadbury’s Inc. has taken the opportunity to offer us a broader view of  chocolate

category. The Cadbury’s India’s no.1 Chocolate is able to share with their market insights based

upon unparalleled breath of chocolate experience. Cadbury has grown from strength to strength

with new technologies being introduced to make the Cadbury confectionary business,

one of the most efficient in the world. The merge in  1969 with Schweppes and the

subsequent development of the business have led to Cadbury Schweppes staking the led in both,

the confectionary and soft drink market inside UK and becoming a major force in

the international market. Cadbury Schweppes today manufactures product in  60

countries and a trade in staggering 120.The Cadbury story is a fascinating story of a family

business that grew in one of the biggest, most loved chocolate brand in the world.

A story that you remember as the story of ´The taste of life’.

HISTORY

With the entry of multinationals and home companies sprucing up their act, the confectionery

market is booming. McKinsey & Co. has estimated the confectionery industry to touch a

whopping Rs. 6 500 cores by the year 2008. Till the eighties, the chocolate market was small and

the product category itself was fuzzy. In the eighties, Cadbury’s - the virtual monopolist – had

decided to focus its efforts on making chocolates a distinct category with an identity of its own.

And the marketer had sharply positioned its product at children to do that. Hence, chocolates

bore an “Only for kids” tag, and kept adults at bay. By the end of the eighties, Cadbury’s still

ruled the roost with over 80 percent market share. And though several brands - like Amul and

Campco - tried to break into the market, none of them had succeeded in shaking the leader’s

grip. In fact, Cadbury’s had become a brand virtually generic to chocolates. Then chocolates

were used to reward and reinforce positive behaviour and hence were categorised as a luxury

reserved for special occasions. This was, a stark contrast to the west where chocolates were

snacked on, eaten as mini meals or just to suppress pangs of hunger. But constant working by

players like Cadbury’s (re-launch of Cadbury’s Dairy Milk targeting adults and as a casual any-

time buy) and Cadbury towards exploding the myth that chocolates are meant for children only,

has resulted in the segment booming.

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Trends in the Industry

· With socio-economic changes rapidly taking place, the young and not so young population will

lead a new life style and chocolate eating is definitely going to be widespread and acceptable.

· In the industry, both population and family incomes as well as urbanisation are on the increase.

· There has been a significant growth in the middle class, with 5.8 million people having

upgraded to the quoted middle class.

· There is quantified data on FMCG usage having increased (NRS-VI & IRS’98 figures) Thanks

to the above reasons the growth in the chocolate market is estimated to be at 22% in 2001. But

marketers in the industry are looking forward to a much higher growth rate, as India’s per capita

consumption of chocolates is only 15 Gms. Versus 6 Kg in the west.

About the company

Cadbury India is a fully owned subsidy of Kraft’s Food Inc. The combinations of

Kraft’s Food Inc. and Cadbury create a global power house in snacks, and

confectionery and good meals.

With annual revenues of approximately $50 billion, the combined company is the

world’s second largest food company, making delicious products for billions of

consumers in more than 160 countries. We employ approximately 140,000 people

and have operation in more than 70 countries.

In India, Cadbury began its operations in 1948 by importing chocolates. After 60

years of existence, it today has five company owned-manufacturing facilities at

thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh)

and 4 sales offices (New Delhi, Mumbai, Kolkata and Chennai). The corporate office is in

Mumbai. Our core purpose "make today delicious" captures the spirit of what we are trying to

achieve as a business. We make delicious foods you can feel good about. Whether watching your

weight or preparing to celebrate, grabbing a quick bite or sitting down to family night, we pour

our hearts into creating foods that are wholesome and delicious.

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Cadbury India

Currently, Cadbury India operates in four categories viz. Chocolate Confectionery, Milk Food

Drinks, Candy and Gum category. In the Chocolate Confectionery business, Cadbury

has maintained its undisputed leadership over the years. Some of the key brands in India

are Cadbury Dairy Milk, 5 Star, Perk, Éclairs and Celebrations. Cadbury enjoys a value market

share of over 70% - the highest Cadbury brand share in the world! Our billion-dollar brand

Cadbury Dairy Milk is considered the "gold standard" for chocolates in India.

The pure taste of CDM defines the chocolate taste for the Indian consumer. In the Milk Food

drinks segment our main product is Bournvita - the leading Malted Food Drink (MFD) in the

country. Similarly in the medicated candy category Halls is the undisputed leader. We recently

entered the gums category with the launch of our worldwide dominant bubble gum brand

Bubbaloo. Bubbaloo is sold in 25 countries worldwide. Since 1965 Cadbury has also pioneered

the development of cocoa cultivation in India. For over two decades, we have worked with the

Kerala Agriculture University to undertake cocoa research and released clones, hybrids that

improve the cocoa yield. Our Cocoa team visits farmers and advise them on the cultivation

aspects from planting to harvesting. We also conduct farmers meetings & seminars to educate

them on Cocoa cultivation aspects. Our efforts have increased cocoa productivity and touched

the lives of thousands of farmers. Hardly surprising then that the Cocoa tree is called the

Cadbury tree! Today, as a combined company with an unmatched portfolio in confectionery,

snacking and quick meals, we are poised in our leap towards quantum growth. We are the

world's No.1 Confectionery Company. And we will continue to “make today delicious”

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Who are we

Consumers inspire us.

To make today delicious, we begin with our consumers.

We listen, we watch and we learn.

We understand their joys and their challenges because we’re consumers too.

What we do

We make delicious foods you can feel good about.

Whether watching your weight or preparing to celebrate, grabbing a quick  bite or sitting

down to family night, we   pour our hearts into creating foods that are wholesome and

delicious.

Our reach.

We believe we can make a delicious difference, everywhere.

We’re constantly looking for fresh ideas to improve our workplace, our  partnerships, our

communities and our world.

How we behave – Our Values

We understand that actions speak louder than words, so at Kraft Foods:

We inspire trust.

We act like owners.

We keep it simple.

We are open and inclusive.

We tell it like it is.

We lead from the head and the heart.

We discuss. We decide. We deliver.

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How we grow.

We focus on creating sustainable, profitable growth. And our strategies guide our efforts:

Build a high performing organization

Reframe our categories

Exploit our sales capabilities

Drive down costs … without compromising quality

About our people.

It takes great people to make great brands. Our approximately 140,000diverse employees around

the world are the reason we succeed. It established brand name in unrelated markets or product

categories, e.g. using a well-known designer name on cosmetics, clothes, sunglasses etc., such as

“John Rocha Waterford Crystal”

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Cadbury and Its Products

Cadbury Boost is a chocolate bar made by Cadbury Ireland in the Republic of Ireland, and sold

in the UK by Cadbury UK and also sold in Australia and South Africa.

 Its wrapper says that it consists of milk chocolate with caramel and biscuit filling. The wrapper

also states that Boost is "Charged with glucose."

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Importance & Scope

TARGET MARKET

The Indian chocolate markets is valued at Rs.650 cores (i.e. Rs 6.50 billion in a year)

The Indian chocolate bazaar is estimated to be in the region of 22000-24000 tonnes per

annum. And is valued in excess of US $80 million.

India’s metro proving to be the big draw locking penetration in excess of 15 percent.

Next, comes the relatively smaller cities/towns where consumption lags at about 8

percent.

Chocolates are a luxury in the rural segment, which explains the mere 2 percent

penetration in villages.

The market presently has close to 60 MN consumers and they are mainly located in

urban areas

Marketing objectives

Grow shareholder value

Over the long term

Cadbury in every pocket.

Marketing strategy is aimed at achieving this vision by growing the market, by

appropriate pricing strategy that will create a mass market and to have offering in every

category to wide in the market

  

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FACTORS INFLUENCING PRICING OF CADBURY

I. Internal Factors

Corporate and marketing objectives of the firm.

The image sought by the firm through pricing.

The characteristics of the product.

Price elasticity of demand of the product.

The stage of the product on the product life cycle.

Use pattern and turn around rate of the product.

Cost of manufacturing and marketing.

Extent of distinctiveness of the product and extent of production differentiation practiced

by the firm.

Other elements of the marketing mix of the firm and their interaction with Pricing.

Composition of the product line of the firm.

II. External Factors

Market characteristics.

Buyer’s behaviour in respect of the given product.

Bargaining power of major customers.

Competitors pricing policy.

Government controls regulations on pricing.

Other relevant legal aspects.

Societal (or social) considerations.

Understanding, if any reached with price cartels.

AN INSIGHT ON 5 P’S OF MARKETING (CADBURY)

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1. PRODUCT

 The average company will compete for customer by conforming to his expectation

consistently. But the winner will surpass them by constantly exceeding his expectation,

delivering to his door step additional benefits which he would never have imagined .

Cadbury’s offer such product. The wide variety products offered by the company include:

I. Chocolate & Confectionary 

II.Beverages 

III. Food Drinks 

2. PRICING

Make no mistake. Second P of marketing is not another name for blindly lowering prices

and relying on this strategy alone to increase sales dramatically. The strategy used by

Cadbury’s is for matching the value that customer pays to buy the product with the

expectation they have about what the production is worth to them. Cadbury’s has

launched various products which cater to all customer segments. So every customer

segment has different price expectation from the product. Therefore maximizing the

returns involves identifying right price level for each segment, and then progressively

moving through them.

Dairy Milk Rs. 15

Perk Rs. 10

5 Star Rs. 10

Fruit and Nut Rs. 22

Gems Rs. 10

3. Physical Distribution – “PLACE”

Distribution Equity: It takes much more time and effort to build, but once built,

distribution equity is hard to erode.  The fundamental axiom of Indian consumer market

is this: You can set up a state-of –the-art manufacturing facility, hire the hottest strategies

on the block, swamp prime television with best Ads, but the end of it all, you should

know how to sell your products. The cardinal task before the Indian market in managing

is to shoe-horn its product on retail shelves. Buyers are paying for distribution equity not

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Brand equity and market shares.

Why does the company need distribution equity more in India? With technology and

competitive pressure slash in it is becoming increasing difficult for marketers to retain a

unique product differentiation for long period. In a product and price parity situation, the

brand that sells more is the one that reaches the highest number of customers.  India – 1

billion people, 155 million household has over 4 million retail outlets in 5351 urban

markets and 552725 villages, spread cross 3.28 million sq. km. television has already

primed and population for consumption, and the marketer who can get to the to the

consumer ahead of competition will give a hard – to – overtake lead. But getting their

means managing wildly different terrains-climate, language, value system, life style,

transport and communication network. And your brand equity isn’t going to help when it

comes to tackling these issues.  Own distribution network consist of clearing and

forwarding (C&F) agents & distribution stockiest. This network of distribution can either

contact wholesalers and which in turn retailers or the distributors can contact to the

retailers directly. Once the stock product reaches retailers, the prospective customers can

have access to the product. Cadbury’s distributes the product in the manner stated above. 

Cadbury’s distribution network has expanded from 1990 distributors last year to 2100

distributors and 4,50,000 retailers. Beside use of TI to improves logistics, Cadbury is also

attempting to improve the distribution quality. To address the issue of product stability, it

has installed visible colours at several outlets. This helps in maintaining consumption in

summer when sales usually drops due to the fact that the heat affects product quality and

thereby off takes. Looking at the low penetration of the chocolate, a distribution

expansion would itself being incremental volume. The other reason is arch rival Nestle

reaches more than a million retailers. This increase in distribution is going to be

accompanied by reduction in channel costs. Cadbury’s marketing costs, at 18% of total

costs, is much higher than Nestlé’s 12% or even pure sugar confectionery major Parry’s

11%. The company is looking to reduce this parity level. At Cadbury, they believe that

selling confectionery is it like selling soft drinks.

4. PROMOTION

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Effective advertising is rarely hectoring or loudly explicit…. It often both attracts and

generates arm feelings. More often than not, a successful campaign has a stronger

element of the unexpected a quality that good advertising shares with much worthwhile

literature.

To penetrate into the inner recesses of customer memory, communication must first

ensure exposure, grab his attention evoke his comprehension, grab his acceptance and

then extract retention competing with thousands of other units of communication trying

to do the same.

Finding showed that the adults felt too conscious to be seen consuming a product actually

meant for children. The strategic response addresses the emotional appeal of the band to

the child within the adult. Naturally, that produced just the value vacuum that Cadbury

was looking to fill.

Thereafter it was the job of the advertising to communicate customer the wonderful

feeling that he could experience by re-discoursing the careful, unselfish conscious,

pleasure – seeking child within him – and graft these feeling onto the Ad campaign like

“Khane Walon Ko Khane Ka Bahana Chahiye” for CMD and “Thodi Si Pet Pooja –

Kabhi Bhi Kahin Bhi” for Perk have been sure shot winner with the audience. Whirl with

the new launched temptations with the slogan “Too To Share” the communication

resolves around the reluctance of a person who’s got their hand on a bar of temptation to

let anyone else to have a bite. As well as outdoor and radio ads, ad agency contract has

created communication for cinemas and even ATM machines for the brand.

All ICICI’s ATM a message flashes on the screen as soon as customer inserts his ATM

card. It tells the customer that this would be good time to get out of his temptation since

he/she is bound to be alone. Something familiar is planned for phone-book as well. In

cinemas, Cadbury has a message on-screen just before the lights are dimmed to give them

a chance to get their temptations. There will also be after dinner sampling in restaurants –

to begin with, 30 catteries in Mumbai have been selected. 

The next round of activity will include the wafer-chocolate Perk and the Picnic bar,

which has faced problems with its taste, because of the peanut it contains. Milk treat has

also been launched in a module bar form, just in time of Diwali gifting market. Éclairs

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has got potential for much wide distribution, in a small sweets that airlines, hostels, and

up market retail outlet offer to guest and customers.

Ad spend in 2000 was about 14% of sales and the management said that plans to maintain

as spend at this level in the current year also. Ad since any discussion today would be

incomplete without mention ‘e’ word, the management plans to tap this new channel of

marketing.

Beside three companies website

(i.e.www.cadburyindia.com,wwww.bourvita.com,www.cadburygift.com) that the

company has launched, it had also entered into various marketing relationship with other

portals, specially targeted during festivals and events such as Valentines day , etc….

It’s a combination of spiffing up its key brand, researching and improving the newer

products that haven’t taken off, supported with high ad – spends that Cadbury hopes will

see it emerges stronger after the current slowdown, as well as expand the market.

5. POSTIONING

In the 1970s consumers were ready to pay “more for more”, and luxury goods flourished.

In the 1980s, consumers began to demand “more for same”, and the discounting era grew

strong. Today’s consumer demanding “more for less”, and the winner will be that super

value marketers…. Some of today’s most successful companies recognize those

customers are more educated and able to recognize true customer value.

Positioning is simply concentrating on an idea – or – even a word defines that company

in the mind of the consumer. It is more efficient to market one successful concept to one

large group of people than 50 product or service ideas to 50 separate group…

repositioning is a must when customer attitude have changed and product have strayed

away from the consumer’s long standing perception of them…

Cadbury’s is an anchor in sea of confectionary products. As a variety of competitive

claims assails her senses, today customer uses complicated decision making process to

assess the alternative before making a purchase. Since Cadbury’s is more clearly

associated with a particular set of attributes in terms of benefits and prices, the quicker

becomes her search process.

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Positioning of individual product:

1. CMD: is and always remain flagship brand. The punch by the company for

advertising this product life. ‘Real taste of Life’, itself defines the positioning of the

product. The chocolate is meant for all age groups. It symbolizes fun, enjoyment,

good items. It has goodness of milk, taste and appetite appeal.

2. 5star: although positioned internationally as an energy bar, 5star was positioned on

an emotional platform in India during the late 1980s. Symbolizing togetherness, 5star

was originally targeted at teenagers. In June 1994, the company reworked the strategy

for 5star to make it a source of energy. In fact, before the launch of Perk, 5 star’s

energy bar positioning made it a snacking chocolate.

3. Éclairs: competing in the chewable toffees segment. Éclairs was re-launched during

the mid-nineties with a new name, Dairy Milk Éclairs.

4. Gems: broadcasting Gems, though, didn’t prove to be feasible proposition for

Cadbury. Targeted at children less than 12 years with ‘Gems Bond’ advertising.

Cadbury decided to sell it to teenagers with the ‘Smart Very Smart’ campaign. But

now, the company is retargeting children with its animated commercial. “Gems are

the best brand to speak to children. Colourful chocolate buttons appeal most to

children and that is why Cadbury is re-targeting children.” 

5. Crackle: it was the first Cadbury’s chocolate to have crunch in it. It was targeted as a

funky chocolate to add spark to life.

6. Perk: in September, 1995, Cadbury pre-empted the launch of Nestlé’s Kit-Kat by

rushing a new brand, Perk into the market. Positioned much further on the functional

scale of 5star, Perk was meant to be light snack-product for subduing the first pangs

of hunger. 

7. Bournvita: positioned as tasty health drink. While its competitors concentrated only

on health aspect, Bournvita combined the nutritious value with taste.

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SWOT ANALYSI

S

STRENGTHMarket leader in their segmentStrong brand loyal consumer baseWide range of distribution channelProduct according to the need of Indian consumerInnovative ProductExcellent advertising, reach and accessibility

WEAKNESSProduct are dependent on each otherNot so much presence in rural market

Marred by scandal few years back

OPPORTUNITYIncreasing number of working

youthProduct has been acceptable in

youth categoryShift to rural market

Can foray into other food markets with its strong Brand name

THREATPrice war with competitors.Strong presence of regional

competitorsConsumers don’t perceive it a

“Healthy ProductSweets as substitute

SWOT ANALYSIS OF CADBURY

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Awards in India Kraft Foods Inc, which recently changed its name to Mondelēz International, so that

Kraft Foods focuses on the North American foods business whereas Mondelēz International focuses on the global snacks business, tops the list with net sales of $19,965 million. Mondelēz International makes Toblerone and Cadbury Dairy Milk – Yahoo

Cadbury Indian ranked 4 th amongst the Most Admired Companies of India by Fortune India

Cadbury India wins the EMVIES 'Media Client of the Year' in September 2012 Cadbury India wins the "Client of the Year" title at the EFFIES 2012 Dupont Award on Innovative packaging Best Suppliers awards (overall & processed foods category) at the Spencer's Best

Supplier Awards 10 Advertising Awards at Goafest 2012 Oreo Togetherness Mela wins Gold at EEMAX Awards 2012 Bournvita Quiz Contest wins best kids program at India Telly Awards 5 Star's 'The Date' film wins Platinum Award at Digiratti 2012 4 Shopper Insight WINs (India) for H1'12 submitted by Asia Pacific

Cadbury also won 4 gold and 2 silver awards for the following campaigns: 

Gold:

CDM Shubharambh for Consumer products

CDM post dinner meetha for Consumer products

Cadbury Celebrations for Consumer products

CDM Shubharambh for Integrated campaign of the year across categories.

Silver:

Oreo for consumer products

Cadbury Celebrations for Integrated campaign of the year

Future Plans

Cadbury India expects strong growth in India in future. The company plans to increase the

franchise of its existing brands and continue to explore new product opportunities including

adjacent market opportunities

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The Cadbury Story - Cadbury’s success story 

In 1984, John Cadbury founded U.K. company with one aim: - to create the highest quality

chocolate. By1969, when Cadbury merged with the soft drink giant. Schweppes, Cadbury brands

were already famous all around world.

Today Cadbury’s production are enjoyed in 120 countries, with 40 chocolate confectionary

brands, Cadbury dominated markets as far as the U.K. and Australia that’s why Cadbury have

been dubbed “The world’s master chocolate makers”.

The secret of Cadbury’s success 

What is the secret of Cadbury’s continuing success first there’s the careful selection of the finest

cocoa beans from West Africa, as well as tasty hazel nuts from Turkey and the fine sheet and

choicest natural ingredient available to us anywhere.

Finally there’s skilful marketing Cadbury always takes extreme care in selecting and marketing

the right range of product in every cause.

The right product, the right partners, the right marketing, the promotional back up and

the right employees. These are the ingredients in Cadbury’s latest recipes for success.

Right from the stand Cadbury Dairy Milk Chocolate success has been based on these factors:

Quality, Value for Money, Advertising.

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Chapter 2 Chocolate Industries

Top Chocolate Companies and brands in India

1) Amul

Amul is part of the Gujarat Cooperative Milk Marketing Federation Limited (GCMMF),

which is the biggest organization in the domain of food product marketing in India. 

The company procures 13 million liters of milk on a daily basis in the peak period and has

16,117 milk cooperative societies that are based in villages, 3.18 million members who produce

milk, and 17 member unions that cover 24 districts. In 2011-12 its aggregate turnover was 2.5

billion US dollars. 

Amul chocolates are available in various forms such as the following:

Amul Fruit ‘n’ Nut Chocolate Amul Bindass Amul Chocozoo Amul Fundoo Amul Milk Chocolate

2) Cadbury

Cadbury was established originally in UK during 1824 by John Cadbury. The company is

presently owned by Mondelez International. It is among the two biggest global chocolate

brands along with Mars and its head offices are at Uxbridge, London. Right now it operates in

more than 50 countries across the world. 

Mondelez International is one of the biggest brands in the world when it comes to chocolates,

candies, and biscuits. It is also one of the top two manufacturers of gums in the world. The

company has many billion dollar brands like the following:

Jacobs Oreo LU Tang Milka Trident Nabisco

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It operates in more than 80 countries with staff strength of 100,000. In 2011 the company earned estimated revenue amounting to almost 35 billion dollars. Its stocks are traded on NASDAQ. 

Its top chocolate products available in India are as follows: 

Bournville: Bournville is a dark chocolate bar. The chocolate derives its name from a synonymous model village in Birmingham. It is primarily manufactured in France. 

Crunchie: Crunchie is a chocolate bar and comes with a honey laced sugary center. The product is available in several sizes such a snack size, which is basically a small cube like variation, and the king size. The single serve bar is the most commonly available version and comes with a length of 7 inches, width of an inch, and depth of 3/4th of an inch. 

Dairy Milk: Dairy Milk is a milk chocolate brand made by Cadbury. Every product in this line is created only with milk chocolate. It was launched during 1905 in the UK. 

3) Nestle  

Nestle is one of the top names in the world when it comes to nutrition, wellness, and health. The organization was established by Henri Nestle at Vevey, Switzerland during 1866 and its head offices are located over there. It has approximately 280,000 staff members and operates in nearly all countries in the world. 

Its leading chocolate products in India are as follows: 

Kit Kat: Created originally by Rowntree’s based in York, England, Kit Kat is produced on a global scale by Nestle that had acquired the company during 1988. Kit Kat is a wafer biscuit bar covered in chocolate. 

Every bar is made up of fingers that contain 3 layers of wafer that are covered by chocolate on the outside. Each bar can be eaten separately. Kit Kat bars with only one finger are fairly popular as well. 

Milky Bar: Made by Nestle, Milky Bar is composed of white chocolate. It is also available in the following countries in addition to India:

Australia South Africa New Zealand Spain Ireland United Kingdom Kuwait

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Nestle Crunch: Nestle Crunch, a Nestle product, is made from crisped rice and chocolate. It was launched during 1937. In addition to Nestle Crunch, Nestle also produces related products and the ingredients they are made from may be mentioned thus:

Buncha Crunch – crisp rice and milk chocolate Dark Nestle Crunch with Caramel - dark chocolate, caramel, and crisp rice Nestle Crunch White – white chocolate Nestle Crunch Stixx – candy crème, and wafers Nestle Crunch Ice Cream Bars – ice cream, crisp rice, and milk chocolate Nestle Crunch Dark Stixx – dark candy crème and wafers Nestle Crunch with Caramel – milk chocolate, caramel, and crisp rice Nestle Crunch Crisp – chocolate crème, and wafers Nestle Crunch with Peanuts - milk chocolate, peanuts, and crisp rice Nestle Crunch Cereal – chocolate, wheat clusters, and crispy rice

4) Ferrero Rocher

Since its launch in India, Ferrero Rocher is also among the popular chocolates across the country. It is famous for its unique taste defined by its main ingredients- wafer, hazelnut and cream filling coated with a chocolate shell.

5) Mars Chocolate

Mars chocolate bars and other products are manufactured Mars Chocolate, which is owned by Mars Incorporated and based out of Mount Olive, New Jersey. It is among the leading chocolate makers on a global scale and operates in 19 countries with at least 15 thousand associates. 

Following are its major offerings in India: 

Mars Bar: Mars Bar, which is also referred to as Mars, is primarily made of caramel and nougat that are coated in milk chocolate. 

Bounty: Bounty is a chocolate bar made by Mars Incorporated and sold all around the world with certain places in the US being the only exceptions. It is covered in either milk chocolate or dark chocolate and has a coconut filling.

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6) SK Industries

SK Industries, a sister organization of the Mahak Group of Companies, was incorporated in 1991 and its head offices are at New Delhi. The company specializes in making, importing, and exporting a diverse range of confectionery products under the following brand names:

Jelly Belly Fruitjel – jellies Frugurt – fruit yogurt Star Fruitjel – jellies Funchoos – lollipops Milk-N-Nut – soft nougat bar

The company employs between 100 and 500 people and its yearly turnover has been estimated at INR 50 to 100 crore. Choc On, its chocolate brand, is a nougat bar available in chocolate and caramel flavours. It is also available as a coconut bar with chocolate flavour.

7) CAMPCO

Campco boasts of one of the larger chocolate factory in South East Asia, and with the help of

the Indian government, as well as Kerala and Karnataka state governments, has created a

special place for itself in the Indian market. Its leading chocolate based product Turbo is

made from creamy chocolate that is filled with nougat.

8) Other chocolate brands available in India

Libertin: Produced by Ivory Gull Industries, Libertin is a plain milk chocolate bar. 

Safari: Safari comes with a chocolate flavored coating that contains a center made of almond

and caramel nougat. It is made by Gandour. 

Tofi Luk: Yet another Gandour product, Tofi Luk basically comprises biscuit bars that are

covered in chocolate and caramel. 

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Chocolate Industry Of India Present Scenario: Factors like modern trade, increasing

levels of income among the middle class, economic liberalization, and present macroeconomic

situations have been major contributors to the prominent status enjoyed by the top chocolate

brands in India. 

Rajesh Ramanathan, the Director of the HR division at   Cadbury Kraft Foods , states that the per

capita consumption of chocolate has gone up to 110 to 120 gram as compared to 40 gram during

2005. He says that there are further chances that the usage of these products will go up in the

future. 

The consumer demand for chocolates has only been increasing in the last few years and this has

led to a greater number of companies venturing into the Indian market. In the last 64 years, the

market has been led by Cadbury Kraft Foods. 

The industry is presently valued at INR 3200 crore and 70 percent of the market is in Cadbury’s

control. Nestle is a distant second with 20 percent share and the remaining companies together

take up 10 percent of the available market. 

Mahesh Joshi, who heads the marketing and business development segment of Choco a la Carte,

says that the chocolate industry in India operates at various levels. It is inclusive of the big

brands like Cadbury, and Dairy Milk as well as the smaller manufacturers, importers, and

retailers. There are several people who make chocolates in their homes as well. 

Innovation and diversification are presently the key aspects of the industry and all the leading

companies are trying their best to be successful in this regard and thus add to their existing

customer base. The chocolate designer of Chocolatier-The Chocolate Boutique, Sanjiv Obhrai,

has stated that adapting the products as per local culture is an important part of the innovation

process. 

The population of India is such that it presents several ways for international chocolate

companies to come here. The regulations too are good enough for international companies to

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come and operate here. The immense focus on education over here means that international

companies can come and employ local talent to operate their business efficiently. Ramanathan

feels that the presence of all these means the international companies are unable to ignore India

as a viable business destination. 

A Lebanon based chocolate brand named Patchi has more than 300 stores across the world. It

opened a store in Delhi during 2007. The manager of the Delhi operations of Patchi, Meenal

Babbar says that there is virtually no competition between the Indian and international chocolate

companies since the customer bases for both are different. She feels that people who look for

international options possess a lot of buying capacity and look for quality. 

When it comes to the problems being encountered by the international brands in India, Babbar

opines that the market is price sensitive, which restricts a product’s appeal in case the price is

conceived to be higher than one’s capacity. The fluctuations in exchange rate also pose problems

in this regard. To illustrate her example she says that Patchi products cost less in Dubai than in

Delhi. 

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Chocolate Market

The Chocolate Market in India is a growing one. There are several players in this segment, and

Cadbury India Ltd. and Nestle India Ltd constitute the major share of the chocolate market.

Overview

The Chocolate Market in India is defined by the huge expenses incurred in advertising,

high volumes of production, and sensitivity towards price. The volume of chocolate

produced in India in a year is around 30,800 tons. Everybody loves chocolates, but again

the Chocolate Market in India is concentrated in the urban areas.

Challenges

The challenges faced by the Chocolate Market in India are:- 

The products are perishable in nature

Due to the huge consumption of milk in India, the availability of milk is less than the

requirements

The distribution network or the food supply chain is not so strong

As the demand for milk is higher than the supply the price of milk is high

Major Players

The major players in the chocolate market are, Cadbury India Ltd, and Nestle India Ltd.

Together these two companies constitute nearly 90% of the Chocolate Market in India. The other

players are Amul Chocolates, ITC Chocolates, Hindustan Uni Lever Chocolates.

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PESTAL ANALYSIS

Every organization is confronted with macro-environment, which deals with such factors that

have direct influence on supply and demand of the firm. These factors are beyond the control of

organization agitating it to formulate such strategic measures that support the organizational goal

and strategic planning. The dynamism in the arena of market is surfacing such uncertainties that

have significance impacts on the functions of organization. In order to comprehend these vague

possible issues, a series of checklists have been framed to grab an increment in the organizational

effectiveness or its survival to some extent. The main framework widely used with its in depth

strategic concentration on environmental influences is PESTEL analysis. This analysis evaluates

the external environment of the firm on the basis of factors like political, economical, socio-

cultural, technological, environmental, and legal. In this regard, this paper will examine PEST

analysis of a chocolate manufacturing firm operating in UK.

PESTEL FRAMEWORK

PESTEL framework is considered as the best strategic equipment to measure business

position and expected relevant growth or decline in the market and also gives the directions for

possible profit oriented business operation. This analysis works as a useful tool in planning

process which may include; organizational planning, strategic planning, financial planning,

marketing planning, product development planning and most importantly in research and

development reports. It is one of the effective tools that summarizes the scattered aspects in one

horizon, especially when entering into the new markets or when the purpose is to go beyond the

geographical boundaries. It helps the organization to eyeshot the comprehensive realities of the

new environment and its market features which aid to penetrate in it with most effective strategic

concerns and groundings.

As already mentioned, PESTEL describes five factors according to which their impacts

on the chocolate manufacturing firm is analyzed. These external factors and their detailed

analysis with respect to firm is explained below:

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Political Factor

Political factor relates to any changes in the government or its policies. Every organization is

obliged to do its business operation in compliance with laws made by the government. These

laws and rules should be acquainted in the functions performed by the organization. The

government of every country varies with respect to its policy, stability, and major influences on

the trade. In this regard, it is most appropriate for any organization to conduct its operation and

formulate its strategic plan in accordance with the political theme of the country. Every strategic

plan must cater the importance of political impacts so that effective strategy is built to make

proper alignment and the riskiness of project failures due to political instability is already

comprehended with alternative choices (Porter, 1998).

In the given scenario of chocolate manufacturing industry operating in India has to analyze that

the political stability in the existing country is pretty much secured. The impacts of political

influences on the sale of the chocolate products and its manufacturing will be observed when this

organization will intervene in such practices that are not supported by the government. As India

government restricts the chocolate manufacturers to import its raw material from indicated

African countries in order to oppose child labour and women harassment in those countries.

Government can intervene in the operations which are not environmental friendly and the issues

of such like are the impacts that chocolate manufacturer will have to face from the political point

of view. As a democratic political influence, the firm can grab maximum advantages in terms of

low restrictions on the volume of production and sales scale. Hence, there are political issues that

may affect the industry and their impacts can only be minimized if the company is already

prepared to handle political matters.

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Economical Factor

Economic conditions of the country is the most important factor of analysis to any country

because it decides the successful and failure of any business profitability (Worrell, 1998). Every

business works on the core concept of economics that explains the importance of demand and

supply. If the demand is low because of low economic growth and development then it will

destine the company to raise such amount of capital that will ultimately meet the expected profit

after covering the cost incurred. Making bulks of production on just forecasting without

considering demand pattern of the country may cause an irreparable loss to the company no

matter how effective was the strategy and planning. This is due to the fact that economic

influences of the country are beyond the control of organization and it is bound to reflect back in

accordance with economic situation. If the organization gives high concerns to the economic

choices, then it is beyond any nagging doubt that it can make successful profits even in the realm

of recession. On the contrary, organizations keeping aside these economic conditions cannot

even survive in economic boom. The economic conditions of any country act as an opportunity

as well as threat depending upon the strategic planning made by the firm. If the firm gives high

degree of concern to the economic choices even in the depressed economic state can make its

survival and the firms ignoring them will be seen as going out of the market.

It can be articulated with certitude justification that India chocolate industry is most

developed and competitive sophisticated market in the world. The greatest share of market is

captivated by global chocolate industries which include Nestle, Mars, and Cadbury (Cadbury,

website). In the presence of such global giants it is very difficult for new entrants to etch their

position in the market but the economic system and growth of chocolate market is such that even

new entrants can entertain the customer with good profitability. The chocolate market should

make contracts with cocoa beans farmer to apprehend the price fluctuations under control. The

increase in advertising and promotions cost will yield higher margin in sales and profitability

because of increased customers’ interest in buying chocolate. The reason that argues the increase

in promotion is because chocolate is a luxury product and customer will not buy until it is

preceded with high promotion efforts in the arena of market where recession is expected to strike

and profitability in the luxury market is at stake.

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Socio-cultural Factor

The socio-cultural environment of the country has significant impact on the demand of the

product or services. This is the reason that organizations mainly manufacture the products

according to the taste and demand pattern of the nation in which it is operating. Especially, in

food industries where the taste and variety of the food products vary from country to country

according to the socio-cultural environment. Most importantly, the consumption behaviour has

significant impact on the product sales and in reflection to this companies have to consider

demographics changes of the customer. Companies have to select the specific demographic

segment and produce such goods which are in compliance with socio-economic norms of that

particular segment.

Chocolate is a food product which has in depth relation with health yielding the fact that

chocolate industry has to penetrate in the market with all factors concerning health issues. In

India, costumers are more health conscious and provide an opportunity for the chocolate makers

to diversify the product with different flavours and healthy ingredients (Foods Standards

Agency, website). The chocolate consumption is seen to have more consumption in young age

children group and teenagers. This reflects that the chocolate company has to keep its focal point

on the tastes of young customers and such modifications in the chocolate that urges the

consumers to give a taste at least once in a year. For instance, chocolate in the form of bar has

attained much more popularity in Indian market.

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Technology Factor

A company can achieve greater success and competitive advantage in the market by emphasizing

on the aspects of technological factors as a strategic concern (Porter, 2004). The increased pace

of technology have revolutionized the scope of markets. The emerging technologies are

projecting new opportunities to the new markets and giving threats to the existing one surfacing

the fact to compensate with new technology has become optimum intrinsic need (Middleton,

2003).

In the chocolate manufacturing company, technology can be the most effective tool in product

development, advertising, and promotion. Technology can alter the process of production and

can yield higher quality product at much less cost. It can also support in building a strong brand

name and product portfolio by adopting digital media to promote products. It is a luxury food

product; therefore, it demands a mass promotional effort to persuade the customers to buy.

Hence, the existing available technology in the India has much significant importance on the

chocolate industry and the industry has to adapt the concerned technology in order to captivate

greater market share.

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Environmental Factor

Every organization operates in a society and it has certain obligations with respect to its welfare.

The overall environment is comprised of many elements which organization has to cater before

conducting its business operations. In case of chocolate manufacturing firm Cadbury, has

continue to make progress in reducing our CO2 emissions to achieve our target of reducing

emissions by 25 percent between 2005 and 2011. This is consistent with Cadbury’s longer term

ambition to reduce CO2 emissions by 50 percent by 2020. As from 2011 we will have a common

baseline that will allow us to pursue ambitious CO2 emission reductions as a combined business

and will soon announce our goals beyond 2011. Kraft Foods has actively participated in the

Carbon Disclosure Project (CDP) since 2005 and was named in the 2010 Global CDP Leadership

Index. The Carbon Disclosure Leadership Index recognizes companies that demonstrate good

internal data management practices for understanding greenhouse gas emissions, including

energy use. Companies that appear on this index have also demonstrated clear consideration of

how climate change impacts their business

Legal Factor

It is a well known fact that every organization has to conduct its operation which compliance

with the laws of the country. The trade laws, rules and regulations direct all the companies to set

their pricing policy, production policy, and strategic policies according to the country mercantile

laws. The chocolate industry has to anticipate the outcomes of their business operations in such a

way that are in abidance with the rules and regulations made by the government of the country.

Like in India, there are set of general accepted rules and standards for the safer and healthier

food products which must be met in chocolate products of the company.. Ignoring such legal

consideration can cause irreparable harm to the industry and that should not be the practice by

the chocolate manufacturing company because Indian government does not give flexibility to

any size of industry which gives least consideration to laws and regulations.

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THREE MOST IMPORTANT FACTORS

Chocolate is a luxury food product which can draw an important analysis from the

framework of PESTEL. In the above mentioned factors of analysis, the most important ones are

discussed below:

Social Factor

The social-cultural impacts of the environment on chocolate industry are important because it

can be viewed as an opportunity as well as a threat to the industry. As a luxury food product,

customers always have changing demand pattern in the tastes of such like products. The joint

ventures with other retail industries like coffee, bread, etc. can diversify the taste of chocolate in

such a way that they can even replace the traditional food products. The customers are normally

health conscious which persuade the chocolate manufacturers to make such products that give

them health benefits as well. For instance, the dark chocolate is useful for blood pressure

patients.

Political Factor

The importance of political factor in chocolate industry is considered because the production of

cocoa been is an issue in most of the countries and many government restricts the import of

cocoa beans from some of the African countries because of their child labour involved in

producing cocoa. This is one of the most important factors that urge the chocolate company

working in India to generate other possible alternatives that would increase their product quality

at low cost.

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Technological Factor

The chocolate industry is mainly dependent upon the milk as the basic raw material for

manufacturing the products. The advancement in technology has introduced such machines

which are specifically made for milking cows in the most efficient and hygienic manner. The

packaging of chocolate products is yet another dimension where the use of technology can

reduced many wastes. The modern trend of technology has introduced such digital ways that can

multiply the sales of chocolate where the exposure of media and technology is worthwhile.

CONCLUSION

In a nutshell, it can be said that PESTEL analysis is a useful framework to understand the

external environment in which an organization operates. The snapshot of this analysis is

discussed with respect to chocolate manufacturing company. Among the six factors, socio-

cultural, political and technological factors are the most important issues.

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Chapter 3 Entrepreneurial opportunities

If chocolate is your passion, this could be the business opportunity you've been waiting for.

1. Health Benefits

Studies have come out demonstrating the health benefits of flavanoids often contained in dark

chocolate. Sales are soaring (dark chocolate sales were up 40 percent in 2006, according to

Mintel International), and entrepreneurial opportunities are rich with promise. "Chocolate is

more popular today than ever before," says Joan Steuer, founder and president of Chocolate

Marketing LLC, a Los Angeles consulting firm that specializes in strategic forecasting and

tracking trends in the chocolate industry. So stop drooling and take a bite of the action. Dark,

artisanal, organic, and socially responsible and nutraceutically enhanced chocolates are

especially hot varieties.

2. Cafes

Opportunities also exist in chocolate cafes, chocolate fountains and chocolate education, such as

tastings. And you can't go wrong with basics like chocolate snacks.

3. Food Processing

India's mainstay is agriculture. Entrepreneurs can explore many options in the food grain

cultivation and marketing segments. Inefficient management, lack of infrastructure, proper

storage facilities leads to huge losses of food grains and fresh produce in India.

Entrepreneurs can add value with proper management and marketing initiatives. The processed

food market opens a great potential for entrepreneurs be it fast food, packaged food or organic

food. Fresh fruits and vegetables too have a good demand abroad. A good network of food

processing units can help potential exporters build a good business.

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4. Gifting

There is a good social demand for chocolates in India. People who can meet this demand in a

cost effective way can make a good business. With gifting getting very popular, this is also a

unique business to explore. And moreover like flower shops, these business often focus on

themed chocolates.

5. Organic farming

Organic farming has been in India since a long time. The importance of organic farming will

grow at a fast pace, especially with many foreigners preferring only organic products.

Entrepreneurs can focus on business opportunities in this sector. There are many small-time

farmers who have adopted organic farming but the demand is still unmet, offering many

opportunities for those who can promote organic farming on a large scale.

6. Packaging

With China invading the markets with cheap plastic goods and packaging materials, there is a

good opportunity to develop good packaging materials to meet domestic and foreign demand.

There is a huge demand various sectors like agriculture, automotive, consumer goods, healthcare

infrastructure and packaging sectors for plastics.

7. Franchising

India is well connected with the world. Hence, franchising with leading brands who wants to

spread across the country could also offer ample opportunities for young entrepreneurs. With

many small towns developing at a fast pace in India, the franchising model is bound to succeed.

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Conclusion

Cadbury is one of the best known brands in the world today. It is a brand which is associated

with high levels of quality and customer satisfaction.

Mondelēz International is the world's largest chocolatier, biscuit baker and candy maker, and the

second-largest maker of gum.  Every day, our employees create delicious moments of joy by

sharing the world's favorite brands-including Cadbury, Jacobs, LU, Milka, Nabisco, Oreo,

Tang and Trident.  -Anywhere, Anytime, everyday. We make the products that make people

smile.

For nearly every industry, sustainability is a key objective. Creating a sustainable chocolate

industry benefits all of the industry's stakeholders, from the grower to the manufacturer.

The chocolate industry is working with relevant partners to create a sustainable future. By co-

operating in this way, it is possible to improve the sustainability of the industry: better working

conditions on farms; better quality cocoa; fair prices for all contributors; superior and more

varied chocolate; more satisfied customers.

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Bibliography:

http://www.cadburyindia.com

http://www.guardian.co.uk/business/cadburyschweppes

http://www.kraftfoodscompany.comp

http://www.icco.org/about-cocoa/chocolate-industry.html

http://businesstoday.intoday.i n

http://www.entrepreneur.com

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