Innovators: Assignment 2 - Analysis of the Existing IMC Plan of Cadbury Dairy Milk

MARKETING PLAN

Marketing Objectives:-

Over the years Cadbury dairy milk has positioned itself as an all-time favorite chocolate that is meant for all irrespective of the age, class and gender. It has been always marketed as a chocolate having the contemporary taste but which is affordable, with several variants to select from and over the time it has been trying to position itself as an alternative to the traditional Indian sweet. Whereas the corporate strategies are centered towards ensuring profitable growth in the market and grow shareholder value over the long term the marketing strategies are more particular which can be stated a follows:-

Increase sales profit of Cadbury diary milk

Positioning diary milk as a successful alternative to the traditional Indian sweets in order to cash in the rich tradition of Indian people associated with desserts

Sustain market share over the year through product innovation in product development and packaging

STP for Cadbury Diary Milk:-

Dairy Milk chocolate bars have been in existence since 1905. Their packaging has changed, although their promotions remain somewhat constant but the positioning has evolved over the years. Their actual Diary Milk chocolate has not been altered over time except for when being sold to different regions –Indians like creamier chocolate than do those from England so Dairy Milk in India contains more of a milk content.

Segmentation: - The segmentation of the market for dairy milk is based on three things. The first one being based geography. Geographically, Dairy Milk bars are segmented by consumer preferences in the area and are sold more predominantly in regions which consume more snack/junk food. The other type of segmentation is catering to the impulse purchasers. These type of consumers form a major chunk of the consumer base that the product caters to. Dairy Milks are often stocked in convenience stores and the check-out aisles of supermarkets due to impulse purchasers who are buying the chocolate for purchase and consumption now. The other segment is the gift segment. Giving away chocolates as gifts is a trend that is fast catching up in India Cadbury dairy milk wants to cash in on that. The latest segment that Cadbury dairy milk is catering to is the dessert segment. The tradition of having a dessert after meal is present in every civilization and this is a huge segment. The latest drive of dairy milk is to become the national dessert of the country. As far as segmenting the market on income there are different variants of dairy milk (bournville and silk) targeted towards the higher class who are ready to pay the premium for extra dark chocolate.

Targeting: - Starting from 1905 the purchasers of dairy milk have changed from children to all age groups. When Cadbury started its operation in India their main buyers were children and the youth who brought chocolates to celebrate special occasion. This limited the market for Cadbury dairy milk. This is a reason that Cadbury came out with the campaign of (‘kuch meetha ho jaye’) to make dairy milk synonymous with sweet so that it could target all the age groups. In India it was a mentality that chocolates are for children and the adults were more inclined towards to the conventional sweets. This campaign targeted them and saw a change in the target market for the brand. Now the target market for dairy milk is every member of the family.

Positioning: - Cadbury Dairy Milk excels at positioning. Not only can the chocolate bars have many different positions based on which segment they are in, but also none of the positions damper the effects of other positions! Youth see with word Cadbury as a synonym for chocolate, others see it as synonyms for sweet and love and bliss. In India it positioned itself as “spontaneous, special, carefree, real moments (‘Mazza aa gaya’) in the initial stage. But later it tried to position itself as brand that is synonymous with sweet (‘Kuch meetha ho jaye’). The most recent campaign (‘Shubh Aarambh’) tries to take forward the initial positioning of dairy milk as an alternative for the traditional sweet and positions itself as something that is as auspicious as the sweet which is generally offered as ‘bhog’ to gods.

The Marketing Mix:-

Product:- The product Diary Milk is a chocolate bar that is made from real dark chocolate. The design of the chocolate is nearly same throughout the world with slight changes that are made according to the different regions. The amount of milk content in dairy milk is the highest as compared to other competitors. The components that are used in making the chocolate are sugar, cocoa butter, vegetable fats, cocoa mass and emulsifiers. The various variants of dairy milk are Wowie, Crackle, Fruit and Nut, Crunchie, Temptations (roasted almond, rum raisins and raisin apricot), Bournville and Silk.

Price:- Cadbury Dairy Milk has always adopted a competitive pricing strategy for the basic product whereas has gone for premium pricing on the other other variants. The price list is given as follows*:-

Product	Weight(gms)	Price(Rs.)
Dairy Milk	9.5	5
Dairy Milk	20	10
Dairy Milk	38	20
Dairy Milk Crackle, Roast Almonds	42	35
Dairy Milk Wowie	17	10
Dairy Milk	95	60

*From foodworld.esmartshop.in

The same price is followed all across the country.

Place:- The company has five company owned manufacturing capacities in Thane, Induri (Pune), Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh). The sale offices are located in the metros and the head office is located in Mumbai. The distribution structure is such that Cadbury dairy milk are sold directly to the retailers and the whole sellers. Cadbury’s distribution network used to encompass 2100 whole sellers and 450,000 retailers.

Promotion: - Creation of a strong brand is very important in the confectionery industry. Almost 80 percent of the chocolate purchases are unplanned and are on impulse. The media mix for any campaign for diary milk comprises of TV, radio, print, OOH and Internet. The advertisements are used to create and emotional bonding with the consumers and hence are high on the emotional content. The print media is for making the consumers more knowledgeable about the brand and digital media is used for more targeted two way communication. Over the years dairy milk has concentrated heavily on TV advertising but lately there is a shift towards digital media. The promotions have been done keeping in mind to increase brand loyalty and to encourage repeat purchases at the same time increasing market share. Apart from the mass media the other strategies include making dairy milk a visible brand in the market and encouraging free samples through competitions to gain trust and familiarity among the target audience.

5C Analysis:-

Company:- Cadbury dairy milk is a brand of chocolate made by Cadbury Plc. unit of Kraft Foods and sold in several countries around the world. It first went on sale in 1905 in the United Kingdom.

Customers: - The prospective customer of dairy milk range from 5 to 60 years of age. Since dairy milk has a range of product suited for every member of the family. The aim is to strengthen the brand relationship in the current consumer’s life. The ranges of customers vary for diary milk. Whereas some buy it as an alternative for sweet others buy it as a gift item. The consumers mostly buy the product on impulse and are influenced by taste/flavor and then by company/brand.

Competitors: - The main competitors of Dairy milk in India are nestle, Mars and Amul chocolates. The high end chocolates (Bournville and silk) also face competition also face competition from the imported Swiss chocolates. But one of the biggest advantage the dairy milk has over its competitors is the brand loyalty that it has got. The excellent advertising , reach and accessibility has made it the top of mind brand in the chocolate category.

Climate:- The climate for the chocolate industry and dairy milk in particular seems very attractive in a country like India. With the size of the market being so big along with encouraging category growth the prospects look very good. Since the product is not seasonal and the margin is also good makes the climate for the industry even better. With new innovations coming up in terms of product and packaging the market is still on a growth curve.

Collaborators: - As already said Cadbury dairy milk manages a huge range of retailers and whole sellers who make up the collaborators. Over the years the company has partnered with various other companies like Adam Philippines in 2001 so that diary milk has a much wider distribution network in the Philippines.

ANALYSIS OF THE PROMOTIONAL PROGRAM SITUATION

Internal Analysis – assesses relevant controllable issues

Firm’s Promotional Capabilities - Cadbury as a company is a PLC. unit for Kraft Foods. Dairy milk is the flagship product of Cadbury in India as well as abroad and the firm doesn’t leave any stone unturned to promote the brand which gives it the highest revenue. As far as the promotional capabilities is concerned the company has resorted to every communication media (print, OOH, TV, radio etc.) to create a high brand recall for dairy milk. With a sales and advertisement budget of nearly four hundred crores the firm can employ any promotional mechanism it wishes and it has done full justice to the dairy milk by spending a major chunk of this budget in the promotion of dairy milk and its variants.

Product/Service Analysis - Dairy Milk offers a range of products suited for the taste buds of all types of consumers – from nutty flavours to rich chocolate flavours. A few of Dairy Milk’s product offerings are as follows:

Review of Past Promotional Programs -

Campaign	Target	Shift over the years	Promo Mechanisms
Real Taste of Life	Child in adult	From just for kids to the kid in every adult	TVC, Print, Hoardings
Khanewalon ko khane ka bahana chahiye	Wider masses	Appeal to a wider mass based on age, gender, etc.	TVC, Print, Hoardings
Pappu Pass Ho Gaya	Youngsters		TVC, Hoardings
Miss Palampur	Rural masses	Shift to smaller packs	TVC, Hoardings
Kuch Meetha Ho Jaaye	Conversion of sweet consumers to chocolate for special occassions	This was an innovative idea and Cadbury went ahead with the ‘Celebrations’ packs with these ads	TVC, Print, Hoardings, Social Media
Khane ke baad Meethe mein Kuch Meetha Ho Jaaye	Targeting the habit of Indians to have desserts after meals	From converting sweet consumers on special occasions Cadbury now tried to sweet consumption for dessert to chocolate as well	TVC, Print, Hoardings, Social Media
Shubh Aarambh	Targeting the belief of Indians that anything begun by having something sweet provides good luck	Converting yet another segment of sweet consumers i.e. before the start of any work	TVC, Print, Hoardings, Social Media

External Analysis – assesses relevant uncontrollable issues

Customer Analysis -

Who are the customers?
Cadbury has targeted different segments of consumers through their various ad campaigns. From targeting kids they extended their target audience to 'the kid in every adult' through their 'Real Taste of Life' campaign. Next they targeted the youths through their 'Pappu Pass Ho Gaya' campaign and the rural populous through their 'Miss Palampur' campaign. The last few of their ad campaigns have specifically been targeted towards converting consumers of sweets to chocolates and this they have done extensively by giving consumers the idea that chocolates could substitute sweets in ways that consumers could never think of like on special occasions or for dessert after meals or for the auspicious start of something important.

What do they buy and how they use it?

Purchase as a gift - Cadbury Dairy Milk Celebrations
As a snack
As a dessert

Where do they buy?

Leading supermarkets and 'big chains' stores
Kirana stores

How has Cadbury tried to capture these buyers?

For those shopping at malls and supermarkets Cadbury aimed at as many as possible using big boxes of chocolates stored near billing area to stimulate impulse buying
They also used the concept of eye level shelves to a great extent to capture the attention of consumers

When do the consumers buy?

Impulse buying
Festive season
Special Occasions

How do they choose?
Consumers are influenced to buy a particular brand/product based on the following criteria in the order of importance:

How they respond to marketing programs?
Consumers have till date responded very well to Cadbury's marketing campaigns. With every new campaign, Cadbury's market share has increased and Cadbury has been able to capture the audience targeted. Also brand loyalty has increased with the promotional campaigns.

Competitive Analysis -

Product Feature	Nestle	Amul	Cadbury
Market Position	2nd	3rd	1st
No. of variants	Many	Few	Many
Gift Packs	Yes	No	Yes
Objective	To be the world’s largest and best branded food manufacturer, whilst ensuring that the brand name is synonymous with products of the highest quality	Confectioneries just happens to be a side business for Amul whose core competency lies in milk and milk products	To grow the market for chocolate confectionery To increase Cadbury’s share of the snacking sector
Strategy	Integrated cost leadership/differentiation Wide range of products Low cost operators	No clear-cut strategy	Growing the market by apt pricing strategy that will create a mass market and to have offerings in every category to widen the market

Environmental Analysis -

Porter's 5 forces Analysis:

PEST Analysis:

ANALYSIS OF COMMUNICATION PROCESS

Real Taste of Life

Communication Objective- Through the ad, they wanted to convey the message that there is a child in each one of us and they wanted to appeal to that child, since children loved eating chocolates. The ad was meant to create a particular image in the eyes of the customer and successfully communicate what the product conveyed.

It appealed to the child in every adult and Cadbury Dairy Milk became the perfect expression of 'spontaneity' and 'shared good feelings' In every adult there is a child let that child express itself give in to temptation and satisfy his or her desire to sink teeth into a smooth creamy delicious chocolate This approach appears to be unique to Cadbury.

What was Communicated- The Real Taste of Life was launched in the 1990 s. It was an attempt to capture the child-like spontaneity in every adult. From the depiction of an old man offering his wife a Dairy Milk chocolate to the dancing girl in crowded stadium, it all reflected the impulsiveness and the spontaneity of the child in the adult.

Why they communicated- They wanted tore-create the image of a child in the eyes of the adults, remind them of their childhood days and create an image that Cadbury essentially stood for childhood and stimulate them to buy chocolate so as to make them remember the childhood days.

What was achieved- A change in Consumer mindset that chocolates were mostly for kids and young people. Through the campaign, adults realized they could and should enjoy chocolates as well.

Khanewalon ko khane ka bahana chahiye

Communication objective- Through the ad, it was aimed at widening the chocolate consumption among the masses and making sure the product reached a wider group of people, based on age, sex etc.

What was Communicated- The ad reflected the fact that Cadbury could be available and eaten by all groups of people. In the ad, an elderly lady, middle-aged man, newly married bride, young guy and a child are all seen enjoying Cadbury, which showed that all people, irrespective of their sex and age could enjoy it.

Why they communicated- The ad was meant to stimulate purchase intentions and enable the reach of Cadbury to a wider audience.

What was achieved- A widening of audience, which meant a wider market for the product.

Kuch Meetha Ho Jaaye

Communication Objective- The ad was meant to portray Cadbury as something which can be had on all celebratory occasions. It projected chocolates as a substitute to mithai (sweets) and cheered people to have chocolate on every joyous occasion.

What was communicated- The basic depiction was that the ad showed that chocolate can be showed as being enjoyed during Diwali and any other celebratory occasions.

Why they communicated- The idea was mainly to develop preferences among people for chocolates to sweets and stimulate the demand for chocolates in festive and joyous occasions.

What was achieved- Depiction of chocolate as a substitute to sweets and the fact that it can be enjoyed in joyous occasions too.

Pappu Pass Ho Gaya

Communication Objective- The ad targeted youngsters and has become part of street language. It has been adopted by consumers to express joy in a moment of achievement/success. The ad showed association with little joys of life. The campaign urged people to celebrate every little moment of happiness in their life with a chocolate.

What was communicated- The ad showed the coming out of results and the passing of a person called Pappu, who had failed repeatedly. All youngsters were seen having chocolate to enjoy their moment of success. Thus, it predominantly targeted youngsters.

Why they communicated- The ad was meant to reach out to youngsters and encourage them to buy chocolates.

What was achieved- Enabling Cadbury to be portrayed as a product which can be had by youngsters to celebrate their successes.

Miss Palampur

Communication Objective- The ad targeted the rural parts of India. It focused on Adults and values, like Sacred Cow campaigns aimed at rural India did fare well. Campaigns aimed at rural India did fare well. The share of Cadbury increased by more than 20% in rural India. The share of Cadbury increased by more than 20% in rural India. The brand further strengthened its positions with the core audience. The brand further strengthened its positions with the core audience.

What was communicated- It shows a villager enjoying the success of his cow becoming Miss Palampur. The entire village joins in the celebration, with all having chocolates.

Why they communicated- The ad was meant to increase the reach of the product to rural areas and develop preferences for chocolates in the rural areas.

What was achieved- Enabled Cadbury to be shown as a product which can be enjoyed in rural areas too.

Shubh Aarambh

Communication Objective- The ad was specifically aimed at indicating a shift from the notion of celebrating happy occasions with chocolate to the happy occasions with chocolate to the concept of anticipating concept of something good after consuming the chocolate, a substitute for mithai. The campaign is aimed at consumers across sectors, and is supposed to have a balanced appeal across all tiers.

What was communicated- The ad depicted the starting if friendship over having Cadbury and how a bonding developed over it.

Why they communicated- The ad was meant for the core group, i.e. consumers in the age group of 15-35 years. The ad was established to remind consumers about the utility of Cadbury

What was achieved- Enabled Cadbury to re-establish itself in the eyes of the core target customers.

**BUDGET DETERMINATION FOR SHUBH AARAMBH CAMPAIGN**

Shubh Aarambh campaign was launched in 2010, drawing lines from the traditional Indian custom of having something sweet before embarking on something new.

We have adopted the Percentage of Sales method for budget determination of the Shubh Aarambh campaign. We have referred the Profit & loss statement of Cadbury India Ltd for 5 years prior to the launch of the Shubh Aarambh campaign i.e. from 2005 to 2009.

Profit & Loss account (in Rs Crores)
	Dec '05	Dec '06	Dec '07	Dec '08	Dec '09
Income
Sales Turnover	1006.02	1149.97	1441.92	1751.24	2045.08
Sales Growth		14.3%	25.4%	21.5%	16.8%
Excise Duty	126.24	91.73	148.45	162.65	110.71
Net Sales	879.78	1,058.24	1,293.47	1,588.59	1,934.37
Other Income	17.87	8.71	7.68	25.07	12.67
Stock Adjustments	10.44	-2.54	17.29	51.32	-16.28
Total Income	908.09	1,064.41	1,318.44	1,664.98	1,930.76
Expenditure
Raw Materials	246.22	441.53	563.06	732.53	832.28
Power & Fuel Cost	19.62	20.83	25.3	29.7	37.25
Employee Cost	94.38	93.93	107.36	130.22	150.62
Other Manufacturing Expenses	138.85	57.63	76.61	96.01	6.52
SG&A expenses	292.11	302.42	366.67	432.91	624.19
SG&A as % of sales	29.0%	26.3%	25.4%	24.7%	30.5%
Total Expenses	791.18	916.34	1,139.00	1,421.37	1,650.86
Operating Profit	99.04	139.36	171.76	218.54	267.23
PBDIT	116.91	148.07	179.44	243.61	279.9
Interest	1.7	2.22	2.03	5.2	1.72
PBDT	115.21	145.85	177.41	238.41	278.18
Depreciation	34.07	33.41	34.32	36.52	43.83
Other Written Off	0	0	0	0	0
Profit Before Tax	81.14	112.44	143.09	201.89	234.35
Extra-ordinary items	0	0	19.23	0	0
PBT (Post Extra-ord Items)	81.14	112.44	162.32	201.89	234.35
Tax	35.19	43.62	44.67	36.11	45.73
Reported Net Profit	45.95	68.81	117.65	165.78	188.63