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The famous case study of Cadbury Fuse for New Product Development
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04/14/2023Symbiosis Institute of Telecom Management
QUIZ What are the stages of NPD? What are the stages of PLC? What are the strategies involved in
NPD? When did the sales of Cadbury decline
in the recent past? Mention the incident What were the objectives of fuse? How did the name ‘Fuse’ came into
existence? What are the top 3 countries in
confectionary market? Mention rank of the countries
04/14/2023Symbiosis Institute of Telecom Management
CASE STUDY
BY
SAI PRANEETH
UDIT PANDEY
VISHRANT SHAH
VIVEK NAIR
04/14/2023Symbiosis Institute of Telecom Management
WHAT IS A CHOCOLATE? A GENERAL TERM FOR THE PRODUCTS OF THE SEEDS OF THE
COCOA TREE USED FOR MAKING BEVERAGES OR CONFECTIONARY
HARVESTING:
EACH TREE GIVES 20-30 PODS. 1 YEAR OF HARVEST GIVES 450G OF CHOCOLATE.
RIPE PODS COLLECTED IN BASKETS BY HAND.
PODS ARE SPLIT OPEN.
SEEDS REMOVED,FERMENTED (WHITE PULP),DRIED AND SOLD.
04/14/2023Symbiosis Institute of Telecom Management
Each of the podgive 20-30 beans, the pods weigh 500g and are 20cm in length.
BEANS ARE COATED WITH WHITE PULP AND ARE 2 cm LONG.
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WINNOWING
ROASTING
GRINDING
PROCESSING Extract cocoa butter Pulverize into powder Ready to be made into chocolate
COCOA BEANS IN THE FACTORY
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CHOCOLATE MAKING
BASE- COCOA AND COCOA BUTTER SUGAR AND CONDENSED MILK ADDED
Liquid Product
Evaporated to make crumb
REFINING (reducing the size of cocoa solid and
sugar) CONCHING(taste,texture,smell) TEMPORING(finished and glossy look)
04/14/2023Symbiosis Institute of Telecom Management
GLOBAL MARKET TO BE AROUND 11O BILLION USD.
100 TONNES CONSUMED EVERY SECOND
INDIAN MARKET WORTH 5562 CRORES (400 Kgs PER MINUTE).
TO GROW BY A CAGR OF 23%. BY 2018 WILL BE AT 341609 TONNES.
THE MARKET
04/14/2023Symbiosis Institute of Telecom Management
GLOBAL MARKET DOMINATED BY NORTH AMERICA AND WESTERN EUROPE.
BRIC NATION ACCOUNT FOR 55% GROWTH IN CONFECTIONARY GROWTH.
PERCEPTION OR MISCONCEPTION? 87 % MALES AND 91% FEMALES RELISH CHOCOLATE.
MISSION MONDE IS DERIVED FROM THE LATIN WORD FOR WORLD
AND DELEZ IS A FANCIFUL EXPRESSION FOR DELICIOUS.
INCREASE THE WIDTH OF CHOCOLATE CONSUMPTION WITH LOW PRICE POINT PACK
MAINTAIN MARKET AND IMAGE LEADERSHIP WITH MARKETING MIX STRATEGIES.
BE A SIGNIFICANT PLAYER IN THE GIFTING SEGMENT.
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04/14/2023Symbiosis Institute of Telecom Management
VISION PROMOTION OF BRANDS CARRYING MASS FRANCHISE
WITHOUT COMPROMISING QUALITY.
BETTER PRODUCT QUALITY AND PACKAGING
BETTER CAPITAL MANAGEMENT
INCREASE MARKETT PENETRATION ( ESPECIALLY RURAL MARKET)
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INCOME – 3.9 MILLION USD.
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CADBURY- History
Cadbury chocolates was started in Birmingham in 1824 by John Cadbury.
Cadbury Dairy Milk came up with the mix of milk and chocolate tray which is pretty much how the product still is.
No drastic change in the recipe of product but the packaging and the representation and prominence of the ‘glass and half of milk’
logo has changed over a period of time.
1904- A new recipe is perfected by George Cadbury for milk chocolate.
1905- Cadbury launches Dairy Milk onto the market.
1913- Dairy Milk becomes Cadbury’s best selling line.
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Cadbury India- Introduction
Began its operations in 1948 by importing chocolates and then re-packing them before distribution in the Indian market.
It currently has a market share of 70% in the chocolate market and is way ahead of its competitors.
Sales
Cadbury 70%Nestle 16%
Others 14%
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OFFICES IN INDIA HEAD OFFICE:MUMBAI
FACTORIES: MALANPUR(UP), BADDI(J&K), THANE, MUMBAI, BANGALORE
SALES OFFICES: DELHI, MUMBAI, CHENNAI, KOLKATA
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THE EVOLUTION: DAIRY MILK
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STAGES OF PRODUCT LIFE CYCLE
DEVELOPMENT INTRODUCTION GROWTH MATURITY SATURATION DECLINE
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DAIRY MILK
Introduction
In the 1980’s CDM was positioned as the ‘perfect expression of love’, captured in memorable memory of love.
During the early 1990’s ,communicating that it was the real taste of chocolate.
In the 1994, came the path breaking ‘real taste of life’ campaign.
The strategy paid off- the brand Cadbury grew by over 40%.
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DAIRY MILK
GROWTH 1998- The new stage of growth for the
brand deals with popularizing consumption in a social context ,especially in a more traditional settings like weddings.
‘Khaane walo ka khaane ka bahana chhaiye’.
Cadbury Dairy Milk aimed to substantially increase penetration levels with the award winning ‘kuch khaas hai’ campaign.
The brand penetrated into smaller towns and sales increase by 40%.
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DAIRY MILK
MATURITY With Bachchan they also launched their
positioning of ‘Kuch meetha ho jaye’ bringing in the tradition of celebrating a joyous occasion in India with sweets and now Cadbury Dairy Milk in particular.
The ‘Pehli Tareek Hai’ campaigns talked about the importance of having Dairy Milk on your pay day.
‘Shubh Arambh’ ads have brought back the old charm of CDM with its very interesting insight of mixing the tradition with the youth.
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5STARS LEADING KNIGHT IN THE CADBURY PORTFOLIO
2nd LARGEST MARKET SHARE – 14%.
5STAR AND 5STARS CRUNCHYS – WERE A HIT WITH THE MASSES.
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CADBURY PERK LAUNCHED IN 1996.
TWO VARIANTS – XL,XXL
MINI LAUNCHED IN 2003 – 2Rs.
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CADBURY CELEBRATION AIMED AT REPLACING TRADITIONAL MITHAAIS AND DRY
FRUITS.
HAS KEPT DIWALI AND RAKHI AS THE MAXIMUN SALE SEASON.
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ECLAIRS FOUNDED BY A LOCAL CONFECTIONARY FIRM IN LONDON
IN THE 1960s.
A PART OF CADBURY BY 1971 TO BECOME THE SECOND LARGEST BRAND IN THE COMPANY.
IN 2006, LAUNCHED A CRUNCHY ECLAIRS WITH A HARD CARAMEL.
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CADBURY GEMS ENTERED THE INDIAN MARKET IN 1968
THE SUGAR COATED COCOA CHOCOLATE HAS CAPTURED THE CONSUMER’S MINDS AND HEARTS ( ESPECIALLY KIDS).
STILL GOING STRONG.
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CADBURY BYTES LAUNCHED IN 2004-05.
AVAILABLE IN REGULAR, COFFEE AND STRAWBERRY FLAVOURS.
IN 5 AND 10 Rs PACKS.
WHY DEVELOP NEW PRODUCTS FOR YOUR BUSINESS? Consumer "Needs and Wants"
Change
Product Reaches The End Of Its Product Life Cycle
Competitors
All Products Experiencing Problems
NEW PRODUCT DEVELOPMENT PROCESS
• Idea Generation
• Idea Screening
• Concept
• Development and Testing
• Business Analysis
• Prototype Development
• Market Testing
• Commercial-ization
APART FROM A GOOD IDEA, WHAT DO WE NEED FOR SUCCESSFUL PRODUCT DEVELOPMENT?
Production and
purchasing skills
SHOULD WE TRY TO DEVELOP COMPLETELY NEW PRODUCTS, OR TO IMPROVE EXISTING ONES?
In practice, most new products are improvements on existing products.\
Generally easier and less risky than developing completely new ideas
Better understanding of the technologies involved and customer preferences for that kind of product
Development process is usually less complex, requires less investment and can be completed more quickly.
CONCEPT DEVELOPMENT AND TESTING Businesses like to think in terms of a
'unique selling proposition' (USP) - a clear reason why customers should switch to your product
Prepare a product specification listing Effective design is wide-ranging as well
as fulfilling the product spec, it includes considering how component and processing costs can be minimized.
As the design progresses, you may have one or more pre-launch stages when you test the product.
BUSINESS ANALYSIS After product concept/marketing
strategy is developed, company can evaluate proposal’s business attractiveness
Estimating Total Sales Total sales is made up of:
1. First time sales2. Replacement sales 3. Repeat sales
Estimating Costs & Profits: Costs estimated for 5 year period jointly
by 1. Research & Development 2. Manufacturing 3. Marketing 4. Finance
Based on the above data maximum investment exposure,payback period,break even point and risk analysis are determined
IS IT WORTH CREATING A PROTOTYPE? To use a prototype to assess customer
reaction to the look and feel of a product
Test for Functionality Test for Psychological aspects such as
color,size and taste Test for Looks/Styles. Test for Price Fitment.
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THE SNACK MARKET
•Confectionery - £4.9bn (chocolate sector £3.4bn)•Biscuits - £1.7bn•Snacks - £1.2bn•Crisps - £1.1bn•Ice Cream - £0.8bn.
04/14/2023Symbiosis Institute of Telecom Management
FUSE…• The ‘Fuse’ concept was developed after
market research identified the growth of snacking and a definite gap in the market for a more chocolaty snack.
• The name fuse was chosen to communicate the fusion of snacking ingredients.
• Extensive testing was done by mixing various ingredients and the results were multiplied into repeat purchase and the volume of bars required were calculated.
• 82% of people rated it as excellent, and 83% said they would buy it again.
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LAUNCH STRATEGY Package design and brand name. Launched on a Tuesday, 24th September
1996 christened as the ‘Fuseday’. Extensive advertisements. 1st time in 20 years Cadbury had a
nationwide launch. Sales of over 40 million bars in the
opening week.
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POST LAUNCH Important to analyse the product after
launch. Chocolate market grew by 9% in 1996 19% of this growth is attributable to
Fuse- a brand which was there in the market for only a quarter of a year.
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WHAT HAPPENED TO FUSE-BAR? Stopped production in 2006. Increase in visibility of rival products At the same time lack of
advertisements of Fuse.
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04/14/2023Symbiosis Institute of Telecom Management