Contents

ObjectiveDetailsPage Number1An investigation of the current marketing mix of Cadbury's2 - 62Secondary and primary research methods7 - 183SWOT and PEST analysis20 - 244Methods of analysing the marketing opportunities26 - 305Creating a new marketing strategy based on research32 - 34

BibliographyBooks and other sources usedAppendixValidity Checks

An investigation of the current marketing mix and strategies of Cadbury's

Introduction

I am going to investigate the current marketing mix and the strategies used by Cadbury's.

The marketing mix is the '4Ps' (Product, Price, Place and Promotion).

I will get the information required from various sources. Mainly I will use textbooks, the Internet and through some primary research (visiting supermarkets and shops). I got some pricing information from the local Sainsbury's supermarket. I looked on the Cadbury's website for additional information on Cadbury's.

Product

Product Type

Cadbury's offers a wide range of products for many different people. Cadbury's has chocolate aimed at children, 16-25year old, 25+, males and females. The products offered by Cadbury's come in many different sizes, the sizes are dependent on the market they are aimed at. Children usually have small appetites so most children's chocolate comes in small packs. A good example of this is the Cadbury's Buttons range. This range started out with just small bags for children and then the bags got even smaller for children. Then Cadbury's released giant buttons and buttons in big bags. This was not only to provide for the whole of the market but to increase sales as well. Giant buttons were aimed at older children and adults, as well as children with very large appetites.

Product Life Cycle

The product life cycle shows the sales of a product over time. When the product is launched, sales tend to be slow. If the product succeeds the sales will then grow, until at some point they begin to stabilise. This could be for one of a number of reasons. A rival company could have introduced a similar product or because the market has saturated. Sales will eventually decline because a company will release a new product type. For example when Cadbury's released the 'Fuse' bar it was for people to eat between meals. It was also new because it was the first bar not to use caramel to fuse the ingredients together; instead it used chocolate to fuse the ingredients.

Introduction - slow sales to begin with.Growth - Rapid growthMaturity - The market becomes saturatedDecline - new products from different company

Extension Strategies

There are various ways in which we can extend the life of a product. Changing one of the 4P's is the method often chosen, with the promotion of the product being first to be changed to increase slow sales. Releasing the new advert

will often boost the sales, but the other methods include aiming the same product at a different area of the market. For example aiming the product at adults by bringing out larger bags. The company could also try putting competitions on the packaging of the product this will encourage people to pick the chocolate bar up and buy it. Cadbury's took Buttons which was struggling and brought out Giant Buttons.

New Product

A product launched by Cadbury's was the 'Fuse' bar. It was released as the first bar to be eaten between meals. The adverts were messed up, to resemble the life of 16-25year old. The bar was aimed at that area of the market. The fuse bar had a slightly male bias. The product started out with group discussions, which is where, people in a room talk about the bar. The bar then went through to the marketing strategies and the advertising agency was told to come up with some ideas for the bar. The fuse bar was then released on Fuse day.

Price

The main factors that influence the price charged by the company are the costs of they have to pay for advertising, promotion and the market research. The main influencing factors though are the price of the competitors. If the company wants to increase their percentage share of the market, they will have to have competitive prices. It would be no good having the Cadbury's Dairy Milk bar priced at 50p when the Galaxy is only 30p, because the consumers are just going to buy the Galaxy because it's so much cheaper. The price is dependant also on whether the company wants to maximise profits or sales. A company wanting to maximise profits would use the cutthroat business of pricing their products at high prices and hoping the consumer buys their product.

The price is also dependant on demand. If the product is easily accessible the prices will be very competitive, whereas if the product is difficult to get hold of the prices will be a lot higher. This is same for competition if there is a lot of competition in one-area prices is going to be priced competitively. If there is no competition the prices will be higher. The products tend to be sold where there is demand for them if there is no demand the prices are not going to be very high. The Cadbury's SnowFlake was very difficult to get hold once it was released. This reflected the price it was released at 30p but due to demand the price rose to 38p.

Place

The products are available everywhere. There is a widely available mass market. After Cadbury's has manufactured the product it is then distributed to wholesalers and supermarket depots. The wholesalers then sell the products to independent retailers and the depots then transport the products to your local supermarkets.

Promotion

Cadbury's use two methods of advertising. They use above the line and below advertising. Above the line is what the company has to pay for e.g. Television adverts and newspaper spreads. Below the line is advertising the company does not have to pay for E.g. Point of sale advertising this is advertising where the product is sold, word of mouth, competitions, giving the radio stations free boxes for competitions and asking the DJ's to try one on air and special offers.

Conclusion

From this I have come to the conclusion that the current marketing mix from Cadbury's is working very well and I intend to take some of the good features and use them in my coursework.

Secondary Research and Primary Research Methods

Secondary Research

Introduction

Secondary research is a method of research carried out by another company or organization. Secondary research is research done by a third party company. The information gained is then analysed and made available for companies such as Cadbury's. The company may have to purchase this data from the third party source. More often than not though the government publishes papers with all the data and these are free for companies to view.

Secondary research is often used because it saves time. It saves time because you do not have to go out and collect the data and then analyse it. It also saves money; fewer people are required to carry out the research. I am using secondary data because it will save time and can prove to be better than collecting the data first hand.

I intend to use the following sources of data because they contain relevant information that I require on the breakfast cereal market.

1)www.clearlybusiness.com2)www.keynote.com3)Mintel Report

Findings

Source 1 - www.clearlybusiness.com

Market ValuePounds Mn% Growth119951082.3219961147.16.0319971163.51.4419981204.53.5519991252.24.0In the market overview of breakfast cereals. The report clearly shows that the market has grown. The most growth in the market is between 1995-1996 where the market grew by 6.0%. The 6.0% growth was well above the compound annual growth rate between 1995-1999. The compound annual growth rate this period was 3.7%.

This research is significant to Cadbury's because it shows the breakfast cereal market has been growing for the past 5 years. The figures also give reason to believe that the market will keep growing for years to come but at a slower rate.

The research supports the argument that Cadbury's should launch a new breakfast cereal. I have said this because the figures show an increase in growth.

Source 2 - www.keynote.com

In the executive summary of the breakfast cereal market, the market is referred to as being a 'well established grocery sector'. This means it is going to have to be something big to stop growth and induce a steep decline in the breakfast cereal market. The research also shows that breakfast cereal sales account for an estimated 63% this is almost two thirds of the sector. The research says that the breakfast cereal market has become 'static' it gives reasons for this. The main reason being because of intensive price cutting initiatives. The breakfast cereal manufactures have also diversified into other areas of the market, mainly aiming new products at people who skip breakfast or eat their breakfast at their desk in the office.

In the sector that Cadbury's want to launch their breakfast cereal, the main growth has come from niche products. The main breakfast cereal growth has come from organic cereals and adult indulgence products.

Source 3 - Mintel Report

The report states that breakfast cereals have shown a volume growth but have shown a decline in value growth. This

means people are buying more cereals but due to lower prices the value has declined. The Mintel report estimates there will be a decline in volume growth over the next few years as well. The Mintel report however does show that there is still a lot of life left in the breakfast cereal market in some sectors with the children's varieties and adult indulgence favouring very well. The UK retail sales of these two areas of the market show a growth over the past few years and it is estimated by Mintel that this growth will continue.

The Mintel Report shows that Kellogg lead the way in two areas of market, the share of the manufacturers market and share of the retail market. This means that Kellogg is the top dog in the breakfast cereal market. Kellogg has however seen a decline in their share of the market over the last two years. The Kellogg range leads the way in the breakfast cereal market with the main Kellogg label Corn Flakes taking 9.0% of the market. This is not the best selling breakfast cereal though. The best selling breakfast cereal is the Cereal Partners Shredded Wheat range. The range takes in 11.1% of the total retail sales.

The report supports the argument of Cadbury's launching a breakfast cereal as long as it is aimed at the correct segment of the market. That of course is being the children's varieties and adult indulgent. Due to the competition in this area of the market Cadbury's may not enter the market.

Conclusion

The reports to me suggest that Cadbury's should launch a breakfast cereal aimed at the children and adult indulgence sectors of the market.The main strengths of being able to get this secondary data is that it saved me time, rather than going out collecting the data and then analysing it. The data was already available and gave me more time to analyse.The limitations of the secondary data are that it was not engineered to suit all my needs. All the questions that I needed to answer could not be answered because of the lack of data made available. The reports also contained data which was of no use to me.

Primary Research

Introduction

Primary research is data you retrieve by doing some fieldwork. Primary research can often prove more relevant than secondary research because the primary research can be co-ordinated to the facts and data you want to retrieve.

I am using primary research to get data for Cadbury's because often secondary sources are used by other companies as well, for Cadbury's this could mean that Nestle and Mars are using the same research. These are not good because they could find a niche market before Cadbury has and take the custom. Primary research means all the data that is collected is kept confidential within Cadbury's and the competitors do not know what has been collected. Primary research is often better because the questions and data collected can be different from that of the competitors and therefore can prove to be more rewarding in finding a gap in the market and to launch a new product.

I am going to use a questionnaire to gather my primary data. I am using a questionnaire because the data that I collect can be easily collected and analysed. The questions that I shall ask shall all be closed questions.

I will gather the data by asking the public to complete my questionnaires.

Primary Sources of Data

I will have 25 questionnaires filled in by as many different people, as I can get. This will give me a wide aspect of what the market wants. The questionnaires will be filled in outside the local shop.

I will be asking closed questions because I have found from some previous research that open questions can be a lot more time consuming to both get data from and to fill in. The questions are more often than not skipped rather than been filled in. The closed questions will give me quantitative data rather than qualitative data. The quantitative data is numerical/statistical data, which is easy to analyse.

The purpose of the questionnaire is to get the data I require me to give Cadbury's an accurate decision on whether to launch a new product into the breakfast cereal market. I will be getting some information and data on the current range of Cadbury's products and the breakfast cereal market.

Analysis of Questionnaire

Section 1

1) How do you rate Cadbury's on the following? (Tick as appropriate.)

ExcellentGoodSatisfactoryPoorTaste 12101-Packaging51321Promotions-4712Advertising2137-Price-589

This question tells us the strengths and weaknesses facts on the current Cadbury's range. These results tell us that Cadbury's need to work on their promotion and competition aspects on products, and need prices that are more competitive. The pros of the research are that the public overall believes that the taste of product is very good and the packaging of the product is quite good. The advertising is also good. Cadbury's should use their good points with the new product to encourage sales.

2) Which of the following Cadbury's products do you usually buy? (Tick max. of three.)

Dairy Milk 13Whole Nut 11Fruit & Nut 11Buttons 9Fuse 5Picnic7Caramel 11

The results from this question show a selection of products that Cadbury's have in their current range wand which products are being bought by the public. The products with the lower figures could do better if an extension strategy was introduced.

Section 2

3) What factors would you consider when buying a breakfast cereal? (Rate in order of importance. 4 being most important, 1 being least.)

1234Taste13517Nutritional Value47105Price 3984Packaging12121Competitions92-1

This question tells us what people are looking at when they buy a breakfast cereal. The data has been set out in order of importance (with 4 being the most important). The bar graph represents the data in an easy to read format. The graph and results show that taste is the most important factor when people buy a breakfast cereal. The next most important is the NV (Nutrional Value) and price of the product. The least important factors when buying a breakfast

cereal I have found are packaging and competitions. Cadbury's should work on the taste of the product and concentrate on keeping the nutrional values high. The breakfast cereal should provide enough energy and fibre to see the person through until lunch. Cadbury's should also spend some time on the price of the product, as the customers want an affordable breakfast cereal.

4) Which of the following cereals do you regularly buy? (Tick max. of 3)

Corn Flakes 12Weetabix 14Frosties 7Coco Pops 5Shreddies 2Frosted Shreddies2Weetos 2Chocolate Weetos 5All-Bran5Shredded Wheat 7Special K 4Other5

These results show the main competitors if Cadbury's choose to launch a breakfast cereal. The main two breakfast cereals are very well established and are going to be very hard to displace, so Cadbury's will need to work hard on a very good product and will have to persist if they are to beat the big brands.

5) What price do you usually pay for your cereal? (Pack size 500g.)

£1.00 - £1.50 4£1.50 - £2.00 10£2.00 - £2.50 10More than £2.50 -

This question shows us what people are currently paying for their breakfast cereal. Cadbury's would be well advised to price their product in the £1.50 - £2.00 price bracket this would cover the majority and those that already pay more would like to save money. Cadbury's will have to be very competitive.

6) What area of the market do you think Cadbury's should aim the cereal at? (Tick only one.)

Adults -Children 4Both 20

The results show that an overwhelming majority of people believes Cadbury's should aim their product at both the adult and children's sectors of the market.

7) What type of cereal do you think Cadbury's should be producing? (Tick only one.)

Chocolaty 14Healthy 11High in Fibre -Wheat Cereal -Other Please State ........................-

The results show that people want a chocolaty cereal from Cadbury's but it must also be healthy. This is an equal split between the healthy and chocolaty. This means Cadbury's will have to produce a healthy cereal, which is chocolaty. This will be hard to do, as chocolate and health are very hard to combine.

8) At a price of £1.75 for a 500g size of breakfast cereal produced by Cadbury's, how likely are you to buy it?

Yes, definitely 3Yes, very probably 10Yes, possibly 9No, probably not2No, definitely not-

The results of this question show that 22 out of the 24 surveyed said they would try the cereal, 13% of which said they would definitely try it. The results show that 92% would try the cereal. This is reason enough for Cadbury's to launch a product in to the breakfast cereal market.

9) Where do you buy your breakfast cereal? (Tick 2 only.)

Hypermarket 6Supermarket 19Convenience10Cornershop 7

The best places for Cadbury's to advertise and sell their products would be the supermarket. I have said this because this is where the most breakfast cereal is purchased.

Conclusion

The main findings from this primary research are as follows:

1) On the existing range of products

*Cadbury's need to work on the promotional aspects of their products. There are not enough competitions for the consumers.*Cadbury's also need to be more competitive with the pricing of their products.

Overall though the taste of the products, packaging on the products and the current advertising is very good.

2) On entering the breakfast cereal market

*Cadbury's should really aim to provide a cereal, which tastes as good as the current range of products, but also be healthy and have good nutritional content.*The price to begin with should be very low and competitive to attract new customers and then as the product becomes much better established the product price should increase.*The main competitors or the best selling cereal now is Corn Flakes and Weetabix. These two cereals are very well established and removing them is going to prove very difficult.*The product should be priced at between £1.50 - £2.00 for a box of 500g cereal.*The product should be aimed at both adults and children.*The breakfast cereal should be marketed strongly in supermarkets and convenience stores as these are the places where cereals tend to be bought.*The overall verdict of this primary research is all the data points in the direction of Cadbury's launching a breakfast cereal.

The main strengths of this primary research are that the questions were aimed specifically at the areas of the market I wanted to get data on.

The only possible bias from the research could be I asked too many people of the same age and sex.

The weaknesses of the primary research are that I should have had questionnaires filled out. I should have asked people at different times during the day. I should have asked an equal amount of each sex. The research should have been carried out in different areas of the UK.

The weaknesses with primary research overall is that it is very time consuming and not very cost effective. The data can prove to be biased. The data has to be cross-referenced with secondary data to check for any bias.

Swot and Pest Analysis

Introduction

In this part of my project I am going to produce a SWOT and PEST analysis to analyse the factors that may prevent Cadbury's launching a product into the breakfast cereal market.

SWOT Analysis

A SWOT analysis is a general and quick examination of a company so they can get accurate information on their strengths, weaknesses, opportunities and threats. It analyses the internal strengths and weaknesses, and the external opportunities and threats.

Internal

Strengths

Cadbury's has a world known brand name that is associated with quality. Cadbury's also have a large distribution and its bars can be found all over the world. Cadbury's has a very good customer service centre and has a large variety of chocolate bars to suit everyone's taste. Cadbury's is the biggest name in the chocolate market and is the market leader. Cadbury's has very effective promotions on their products. Cadbury's has a very good research and development department leading to new products. Cadbury's has built its name around a high quality almost faultless product quality.

Weaknesses

Cadbury's has its products priced higher than most of its other competitors. A large range of the Cadbury's products has reached the maturity stage of its life cycle. The costs of the company are too high. Cadbury's are making a low profit per bar due to the high costs.

External

Opportunities

Cadbury's has still got a lot large room for expansion into South Africa, Asia and South American regions. Cadbury's could look to develop new products in new markets. Due to the growing product range Cadbury's could launch new products. Cadbury's could diversify into new markets e.g. Breakfast Cereal Market.

Threats

Cadbury's have got a lot of competitors in the market and must be wary of their position as market leader. The pricing on their products is too high Cadbury's could lose sales if a competitor was to launch a new product to rival Cadbury's best sellers. Legislation on ingredients could cause huge problems. Healthier options could cause problems to Cadbury's with trends tending to favour the new healthier options. New products from competitors could cause problems to Cadbury's as they could begin to lose their market share.

PEST Analysis

A PEST analysis shows the external factors outside a company that could affect the business. PEST stands for Political, Economical, Social and Technological.

Political

This part of the PEST analysis deals with the government influences. These are the laws and the recent changes in the laws:

The main laws that will affect Cadbury's are the consumer protection law. These influence changes in food labelling. The food labelling shouldn't be too influential as I expect Cadbury's to label all their goods properly to begin with. Changes in manufacturing laws will also greatly influence Cadbury's as they may have to change the way they produce their cereal. This could lead to the introduction of new mechanical equipment being required or more thorough checks on the current equipment. If new equipment is required it could prove to be very expensive.

The Weights and Measures Act, this act should not affect Cadbury's a great deal as all the equipment and scales used should already be at that of the highest standard.

The Trade Description Act, this again should not affect Cadbury's, as all the labelling on the products should be correct and thorough giving all the ingredients.

The Sale of Goods Act, these state that Cadbury's should not mislead the consumer. There are currently 3 conditions. If the government was to introduce a few more it could prove to affect Cadbury's.

On the whole though the main act Cadbury's should be aware of is the Weights and Measures Act, and the Food Safety Act. I have mentioned these two as being the most important because I believe that Cadbury's are a straight forward, honest company. They don't want to jeopardise their reputation by doing some dodgy business. That's why changes in the weights and measures act and food safety act are all they should be aware of. They should check their equipment regularly and check the food safety regulations.

Economic

This part of the PEST analysis deals with a range of external factors in the economy.

The state of the economy is the main factor. If the country were to go into recession the consumer spending would also drop due to the unemployment. The recession would bring down the sales of a lot of goods mainly the expensive things, which are not a necessity. (E.g. the food manufacture industry would have a major decline in sales, as would the tourism industry and the clothes industry.)

The current economy is well in favour of Cadbury's launching a breakfast cereal. The interest rates are low and consumer spending is very high.

Other economic factors that could affect Cadbury's launching a product would be a rise in inflation. This is a rise in price over time.

Social

There is a variety of different social influences, which could affect the consumer, and in turn Cadbury's. A good

example of this is the change in eating habits. The primary and secondary research both show that consumers are moving towards healthier eating habits. The research shows people want a healthy breakfast cereal.

Technological

The increase in computers and the Internet could influence sales. The number of transactions taking place over the Internet is high and people can now buy their shopping over the Internet. The use of automation in factories could influence Cadbury's as they could produce more cereal with a smaller work force.

External Factors

Competitors

The main factors, which could stop Cadbury's launching a breakfast cereal, are the strength of its competitors. My primary research and some secondary research show that the top 3 in the breakfast cereal market are Kellogg's, Weetabix and Cereal Partners.

Name of CompetitorMarket ShareProduct TypesUnique Selling PointsKellogg's38.8Cereals, Cereal BarsWell known Brand NameWeetabix14.4CerealsStrong Advertising StrategiesCereal Partners11.0Cereals, PorridgeGood Promotions on products

Together these 3 companies have over 60% of the market share.

Industry Based Constraints

The main authorities Cadbury's would have to be aware of in the advertising section would be the following:

*The ASA (Advertising Standards Authority) is a voluntary group that advise the advertising companies on whether an idea is suitable or not. The ASA deal with the complaints from the general public. The ASA can withdraw an incorrect or misleading advertisement. The ASA only represents non-broadcast media.*The CAP (Code of Advertising Practice) represents all the areas of the media. The ASA can over rule the CAP and can fall back on the Office of Fair Trading.*The ITC (Independent Television Commission) regulate the adverts shown on television. The ITC can enforce action whenever necessary.

If Cadbury's advertising strategy was to get a ban it could in effect cost Cadbury's a lot of money and delay the product launch.

Legal Factors

The legal factors that are involved with a new cereal are much the same of those with a chocolate bar. Cadbury's would have to be aware of the following:

*The consumer protection law. These influence changes in food labelling. The food labelling shouldn't be too influential as I expect Cadbury's to label all their goods properly to begin with.*The manufacturing laws will also greatly influence Cadbury's, as they may have to change the way they produce their cereal.*The weights and measures act, this act should not affect Cadbury's a great deal as all the equipment and scales used should already be at that of the highest standard.*The trade description act, this again should not affect Cadbury's, as all the labelling on the products should be correct and thorough giving all the ingredients.*The sale of goods act, these state that Cadbury's should not mislead the consumer. There are currently 3 conditions. If the government was to introduce a few more it could prove to affect Cadbury's.

Other Issues

The other issues that can affect Cadbury's are the growing social trends. My primary and secondary research both shows that people want a healthy cereal. The article found on the BBC website is promoting healthy cereal and tells the reader what they get from different foods. The article goes on to say how eating a healthy breakfast can help people recall information quicker. The article goes on to say that eating fruit on the move in the morning would also help you diet.

Conclusion

The main findings from the PEST analysis and external influences have told me that Cadbury's should be very wary when they choose to launch there breakfast cereal. I have said when they choose to launch because I believe they will do very well in such a market that is dominated by so very few.

The main legal factors that should worry Cadbury's are, well there are none. Cadbury's are more than capable of staying on top of any new regulations introduced by the government.

If Cadbury's produce a healthy cereal that is also chocolaty I see no reason why they shouldn't be able to take a share of a market that is very biased towards three companies.

As for any advertising problems that may arise I can see no reason why Cadbury's cannot over come them.

Methods of Analysing marketing opportunities

Introduction

In this objective I will be analysing the influences of different marketing models. The four models I will be analysing are the PEST analysis, SWOT analysis, Boston Matrix and Ansoff Matrix. These four models should give me an accurate over view of if Cadbury's should launch a breakfast cereal. I intend to find the advantages and disadvantages. These will tell me whether it is worth while for Cadbury's to launch a breakfast cereal. I intend to get all the information required to fill in the all the models. The SWOT and PEST analysis have already been completed in a previous objective. This only leaves me with the Boston and Ansoff Matrix.

Model 1 - SWOT analysis

A SWOT analysis is a general and quick examination of a company so they can get accurate information on their strengths, weaknesses, opportunities and threats. It analyses the internal strengths and weaknesses, and the external opportunities and threats.

My SWOT analysis was very helpful in finding the best possible marketing strategy for Cadbury's.

Launching a new breakfast cereal appeared in the opportunity section of the analysis, as this is a growing market with new smaller companies emerging in it. Cadbury's would be well advised to launch a new breakfast cereal in this growing market.

Model 2 - PEST analysis

A PEST analysis shows the external factors outside a company that could affect the business. PEST stands for Political, Economical, Social and Technological.

My PEST analysis was very helpful in determining the external factors outside the control of Cadbury's and the problems these could bring. My main findings were as follows:

*There is a change in eating habits and people are moving to healthier alternatives.*The laws could also cause problems for Cadbury's. The main laws being the Weights and Measures Act and the

Sale of Goods Act.*The economy could also act as a threat as recession would cause a large drop in consumer spending.

The PEST analysis showed me a lot of problems that could arise but I still feel that Cadbury's should launch a breakfast cereal.

Model 3 - The Boston Matrix

The Boston Matrix doesn't show the length of the life cycle, nothing shows how long a product will last in the market. The Boston Matrix does show where a product is in the market by assessing a few things.

It looks at the market share of a product and the market growth; from this the Boston Matrix can put a product in one of the following categories:

*Cash Cow this is a product with low market growth but with a big market share. This means the market has reached its full potential with very little growth; this in turn means that the company has to spend less on advertising. The product has a high market share so the product will be bringing in a lot of money. Cadbury's would do well if they kept selling this product and kept the high market share. Cadbury's Cash Cows: Dairy Milk, Caramel, Crunchie, and Buttons. I have chosen these products as cash cows because they keep selling a lot of products with little advertising.

*Star this is a product with both high market growth and a high market share. This means a product that Cadbury's will have to keep spending a lot on the marketing strategies and advertising, this will cost a lot; the high market share means a lot of money will be brought in. The star doesn't bring in as much money as a cash cow. Cadbury's Stars: Wispa, Wispa Gold, Wispa Bite. I have chosen these because they sell a lot of products but there are a lot of promotions on them at the supermarket.

*Problem Child (???) this is a product with a small share of the market, and a high market growth. This would be very tricky for Cadbury's because they would have two options invest a lot of money and try and increase the market share, or leave the product to become a dog. Cadbury's Problem Childs: Picnic, Double Decker. I have chosen these products because they are not bringing in a lot of money for Cadbury's due to their low market share.

*Dog this is a product with both low market share and low market growth. Cadbury's would be well advised to remove the product from sale. Cadbury's Dogs: Flyte, Star Bar, and Fuse. I have chosen these products because they have either been removed or are very close to being removed from the product range due to a fall in sales and reaching the end of their life cycles.

Cadbury's breakfast cereal would appear as a problem child in the Boston Matrix because it would have a low market share in a growing market.

Model 4 - Ansoff Matrix

The Ansoff Matrix is a model made for companies which want to emphasise on growth. It has four categories which can help the company grow in the market.

Existing ProductNew ProductExisting MarketMARKET PENETRATIONPRODUCT DEVELOPMENTNew MarketMARKET DEVELOPMENTDIVERSIFICATION

The Ansoff Matrix looks at the growth of a product. Each box represents a different stage:

*Market Penetration is to sell the existing product to the existing market. Increasing brand loyalty, and encouraging people to use the product more often carry this out. Cadbury's have done this by putting emphasis on their glass and half of milk. They believe no other product has the same taste.

*Product Development is to sell a new product to the existing market. A good example is Nokia selling new mobile phones to the same market with only small product changes. Cadbury's have done this by releasing the Dairy Milk Orange.

*Market Development is to sell existing products in new markets. Cadbury's have done this buy marketing the very successful Cadbury's buttons range and tried selling them to adults.

*Diversification is to sell a new product to a new market this is a very risky strategy. This is where a breakfast cereal would appear if Cadbury's were to launch one. The Cadbury's breakfast cereal would not be expected to be very successful to begin with due to the more experienced competitors already in the market.

A new breakfast cereal from Cadbury's would appear in diversification, as it would be a new product and a new market that Cadbury's are trying to exploit.

Conclusion

The reliability of these results is reasonably high because most of the data I have used was very up-to-date. From this I believe the marketing strategies I have come up with to be correct.

The SWOT analysis this was good in identifying the strengths, weaknesses, opportunities and threats.

The SWOT analysis was very helpful in deciding whether it would be worthwhile for Cadbury's to launch a breakfast cereal.

The PEST analysis this was good in identifying the following:

*The problems new laws could bring.*The changing social attitudes and the fall in sales if the breakfast cereal wasn't made to be healthy.*The problems a change in the economy could bring although currently the economy is at a stage where launching a breakfast would be very feasible.

The PEST analysis was good at showing the possible problems that may arise if changes in the laws and social habits were to occur.

The Boston Matrix was good in identifying the following:

*Where the current range of products are in the Boston Matrix and where Cadbury's would expect the product to go.

The Boston Matrix was good at analysing where the current range of products are and which products could require more investment to increase profits in the long run and the products that could need to be removed from the product range.

The Ansoff Matrix was good in identifying the following:

*What sort of extra marketing may be required if the products are to increase and grow.

The Ansoff Matrix is good if Cadbury's know what they want to get from the Ansoff Matrix. E.g. If Cadbury's had an existing product in an existing market and wants to increase sales they would use market penetration.

Creating a New Marketing Strategy Based On Research

Introduction

Marketing strategy is a series of approaches undertaken by a company, Cadbury's. It is here to enable Cadbury's to meet its objectives. (E.g. Where Cadbury's want the company to go and how to get it there).

The following factors influence a business marketing strategy. The business objectives are the main point with the company needing to know where it currently is in comparison to its competitors and where it wants to go and what it wants to achieve. Cadbury's marketing strategy would also have to take into consideration the market it is entering and how to enter it. Cadbury's also have to be wary of their competitors and what the competitors are doing, if Cadbury's are to succeed in the breakfast cereal market they will have to be very careful, as there are already some well-established brands namely, Kellogg's. Cadbury's would also have to look at the company and assess their strengths and weaknesses of the business. Also the external laws and other factors will have to be taken into consideration, which are not in control of Cadbury's.

Main Body

Understanding the customers needs

Cadbury's can only do this by researching the customers' needs. Cadbury's can do this by carrying out primary research and analysing this will be up to date with customers needs and can be based around what customers want. The primary research will also be relative to what Cadbury's want to learn about the market. Once the data is analysed it can be checked with some secondary data to make sure the data is accurate. Cadbury's could set up some focus groups to taste the products. Cadbury's could carry out some interviews to make sure that the data they collect is what they want to collect. The interviews can be very time consuming and can become very expensive. Cadbury's can test market a product in a certain area and then collect the customer feedback.

Understanding and keeping ahead of competitors

Cadbury's keeps ahead of competition by having a very good research and development department that keeps constantly releasing new products. Cadbury's must also remain competitive by pricing their products in a similar price band as their competitors. Cadbury's is a market leader in the chocolate bar market and understands that the competitors (e.g. Mars and Nestle) are very keen to take some of Cadbury's share in the market.

Cadbury's keep releasing new product promotions both above the line, which is paid for and below the line, which is not paid for. Cadbury's above line promotion is adverts in magazines and newspapers and on Television. Cadbury's below the line promotion is competitions on the radio where the winner gets a free box of the Cadbury's product. This constant promoting of products is good for Cadbury's and for the number of sales achieved. Cadbury's put special offers on some of their products to increase the number of sales. In the supermarket there is usually an offer on for Cadbury's chocolate (i.e. Buy 4 Cadbury's Picnic's for £1). Cadbury's also have to keep existing products selling so extension strategies usually begin with advertising. The adverts keep reminding the customer of what the chocolate has and if the advertising is good the customer will usually buy the product.

Communicating with its customers

Cadbury's communicates with its customers by two main Medias. It uses above the line promotion and below the line promotion. Cadbury's satisfy their customer's needs by offering them the products the customers want. The promotions keep the customers alert to the product. If the packaging says you can win something the product is more like to be purchased. Cadbury's offer their customers quality products and if the product is not up to the high standards that Cadbury's expect, Cadbury's have a dedicated and well-trained customer service department to handle the calls and any queries.

Co-ordinating functions to achieve marketing aims

Cadbury's co-ordinates it's marketing mix very well to meet and pass its marketing aims. Cadbury's give each area of the marketing mix the same length of time. The four areas of the marketing mix are product, price, place and promotion. If the marketing mix is successful Cadbury's should meet all its aims.

Aware of the constraints on marketing activities

Cadbury's moist be aware of both the internal and external constraints that launching a new product can bring. Cadbury's carry out a number of analyses and reports to analyse their current situation. They analyse most of the external constraints (e.g. laws, politics, changing social views, and changes in the technology) using the PEST analysis.

Cadbury's only need to look at the balance sheets to see their financial situation, which shouldn't be at all limiting. The Cadbury's work force is highly trained so the internal constraints are kept to a minimum.

Marketing Strategy

Based upon my research I have developed the following strategy for Cadbury's.

Product

The breakfast cereal will be the same size as the breakfast cereal boxes and will be eye catching and colourful. The design on the box will be very cartoon like to appeal to children. The reverse of the box will be aimed at the adult section of the market. The product will taste very chocolaty but have good nutrional value. The box will have a large price at the top of the box. This will attract the buyer's attention, as it will be a low price. The product will have the famous Cadbury's logo on the box in very large letters.

Price

Based on my research I am going to use market penetration and have a special introductory offer on the cereal so a box of 350g will cost 99p and a box of 500g cereals will cost £1.25. The prices will then rise to £1.75 for a box of 500g cereal and £1.50 for a box of 350g. This will attract customers to our product and I am confident once they taste our chocolaty cereal they will not go to another brand. Once the product is established competition based pricing will be used.

Place

I would distribute the products to the main wholesalers so the small shops would have easy access to the cereal; through their local cash and carry. I would then distribute the product to the supermarket depots. The supermarket chains will then distribute the product to outlets. The benefits of this distribution is it is cost effective to Cadbury's and the orders will be in bulk so the product will not have to be distributed to every small chain.

Promotion

I would promote the product via both above the line and below the line promotions. The product will have TV advertising the product. The radio will also have a radio advert. The product will be advertised at the cinemas before a movie. The cereal will also have a banner on the Internet. The below the line promotion will be competitions on the radio. We will give the radio a box of cereal to try and then give away a supply of cereal over the week.

Bibliography

I used the following books:

Title:

Advanced Vocational Business

Authors:

Matthew Glew

Michael WattsMalcolm SurridgeStuart Merrills

Published by:

Collins

Date Published:

2000

I also used the following internet sites:

WWW.BBC.CO.UK to get my information on the changing eating habits of people.

Appendix

AppendixTitle/Brief details1Clearly business printout of the market overview.2Web site printouts from the keynote marketing report - food market and breakfast cereal market.3Mintel report on the market share of the breakfast cereal and companies.4Blank copy of the questionnaire.5Tally sheet for questionnaire.