EARLY HISTORY

The history of Cadbury as manufacturers of chocolate products in

Birmingham dates back to the early part of the 19th century, when John
Cadbury opened a shop in the centre of the city, trading as a coffee and tea
dealer. Soon a new sideline was introduced - cocoa and drinking chocolate,
which he prepared himself using a mortar and pestle.

The founding of the Cadbury business dates back to 1831 when John
Cadbury first made cocoa products on a factory scale in an old malt house in
Crooked Lane, Birmingham.

In 1847 the business moved to larger premises in Bridge Street, which had
its own private canal spur linking the factory via the Birmingham
Navigation Canal to the major ports of Britain.

Business continued at the Bridge Street site for 32 years and by 1878 the
workforce had expanded to 200, so more space was needed. This heralded
the move to Bournville and the building of what is now one of the largest
chocolate factories in the world.

John Cadbury retired in 1861 handing over the business to his eldest sons
Richard and George. It is to their leadership that the success of the enterprise
is owed as the company prospered.
The origin of the group goes back over two centuries. Some of the most
loved international brands are from the stable of Cadbury Schweppes –
Cadbury Dairy Milk, Dr Pepper, Flake, Trebor Basset, Snapple, Motts and

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with the acquisition of Adams, brands like - Halls, Clorets, Trident, Dentyne
and Bubbas bubble gum range will now be part of the Group’s portfolio.
55,000 people populate the humming offices of Cadbury Schweppes across
the globe.

Cadbury Schweppes is the No.1 confectionery and third largest soft drinks
company in the world. They manufacture, market and distribute branded
chocolates, confectionery and beverages that bring smiles to millions of
consumers across 180 countries.

The Core purpose of Cadbury Schweppes is “Working better together to

create brands people love”.

They are respectful of the social and natural environment in which

theyoperate; supportive of our consumers, customers and colleagues; proud
of our heritage, and passionate about success.

This passion for success led to the company expanding its business overseas
and thus briging the flavour of chocolate to people and tickling their taste
buds.

Cadbury’s expanded their business to many countries like Australia,

America, Canada, India etc.

When Cadbury Dairy Milk chocolate was first introduced in the early 1900s
it made an immediate impact quickly becoming the market leader. The
success story has continued. It is still the top selling chocolate brand in the

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country and the Cadbury Mega Brand's broad family of products today has
an international retail value approaching US$1billion.

As an international brand Cadbury Dairy Milk carries the same distinctive

image all over the world. Wherever you buy a bar of Cadbury Dairy Milk
the pack design will be exactly the same, only the language will be different.
The famous slogan "glass and a half of full cream milk in every half pound"
with the picture of milk pouring into the chocolate bar, is one of the all-time
greats of British advertising.

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 ABOUT CADBURY INDIA LTD.
Cadbury India began its operations as a trading concern in 1947. Cadbury in
the Indian sub continent defined the first taste of chocolate. The company
today employs nearly 2000 people across India.

With brands like Dairy Milk, Gems, 5 Star,

Bournvita, Perk, Celebrations, Bytes, Chocki,
Delite and Temptations, there is a Cadbury
offering to suit all occasions and moods.

They bring the sweetest of smiles to millions of consumers through their

dearly loved brands distributed through 5.5 lakhs outlets.

Cadbury India's four factories in India churn out close to 8,000 tonnes of
chocolate and the company sells a million bars every day.(locations of
factories.)

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 PURPOSE AND VALUES

Objective:
Grow shareholder value…over the long term.

Strategy:
Create robust and sustainable regional positions in our core categories of
confectionery and beverages through organic growth, acquisition and
disposal.

Process:
They achieve this by Managing For Value.

Managing For Value Process incorporates:

• Setting stretched financial objectives.

• Adopting Value Based Management for major strategic and

operational decisions and business systems.

• Creating an outstanding leadership capability within our management.

• Sharpening our company culture to reflect accountability,

aggressiveness and adaptability.

• Aligning our management rewards structure with the interests of our

shareowners across the country.

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 MANAGEMENT TEAM AT CADBURY
CHAIRMAN
C. Y. PAL

VICE CHAIRMAN
RAJIV WAHI

MANAGING DIRECTOR
BHARAT PURI

NON EXECUTIVE DIRECTORS EXECUTIVE DIRECTORS

- Harsh Mariwala - Girish Bhat
- Jaithirth Rao
- Suresh Talwar - Radhakrishnan Menon
- Jaiboy Phillips
- Chandramouli V
- Vidyut Arte
- Sanjay Purohit
Company Secretary
Ms Monaz Noble
General Managers
- Vivek Aggarwal - Finance
- Sunil Taldar - Sales
- Jimmy Gandhy - Materials
- Sharad Gangal - Human Resources
- Ajit Tawde - Science & Technology
- Cedric Vaz – Operations
- Shivanand Sanadi - Legal

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 ENVIRONMENT AND SOCIETY

At Cadbury India, it is believed that good values and good business go hand
in hand.

Nutrition, Education, Security and Love

Cadbury India has a large factory in Malanpur, one of the most under
developed districts in Central India. In 1999, theylaunched the Cadbury
Community Initiative Programme under the banner: Nutrition, Education,
Security and Love.

In setting up the programme, the local Corporate Affairs Manager, Narender

Katoch, initiated a long-term dialogue with local stakeholders to engage
them in helping the compnay identify what community support theyshould
be providing.

As a result, theyfocused on healthcare and education in the nearby village of

Gurikha. A nursery school was started and key improvements were made to
the primary school. The consultation and a bit of lateral thinking led to some
real social improvements: fresh drinking water from a new village pump, a
doctor’s clinic, vet services for milk producing animals and fruit trees for
each household to plant during the rainy season. They also helped increase
school attendance levels.

Last year, the education programme supported the Indian Government’s Year
of Women Empowerment. Special focus was given to the rights and

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contribution of girls and to the counteraction of female infanticide through a
variety of initiatives, including awareness generation and gender
sensitization programmes leading to formation of women self help groups.

Reaching Out Programme

Reaching Out Programme is one small beginning in their endeavour to lend

a helping hand to the needy. They collect from those who have and give it to
those who need it the most. They have recently completed the Medicine
Collection Drive in which they collected medicines and distributed it among
those sections of society that needed it the most. They also have a toy box
programme. Used toys are collected and donated to needy children.

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 MILESTONES OF CADBURY

The June 2003 issue of Business Today identified Cadbury India as one of
India's best-managed companies in 2003.

Cadbury India was identified as one of India’s Best Managed Companies in

2003. India’s Finance Minister, Mr Jaswant Singh at Business Today’s Best
Managed Companies Awards ceremony, felicitated Mr Bharat Puri,
Managing Director of Cadbury India. It was the only Multinational
Company featured in the list of Best Managed companies in India.

Cadbury India was lauded for its value creation, for its strategy of focusing
on power brands, and its aggressive foray into the low end market with
Chocki as well as launches at the top end.

Cadbury succeeded in reducing the impact of the slow down in the Indian
FMCG industry & was also recognized for its innovation and consistent
development of new products for consumers in India.

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 NEW PRODUCT LAUNCHES

Cadbury launches Rich Dry Fruit Collection for gifting this festive
season.

Come Diwali and the gifting options for consumers just got better with the
launch of Cadbury Celebrations Rich Dry Fruit Collection a range of
premium chocolate gift boxes.

Available in attractive packs, the Collection

caters to a premium gifting consumer and is
an ideal festive gift. It is a unique
combination of the best Cadbury chocolate
and premium dry fruits.

This combination will be available in select outlets in select cities across

India for the first time. The Rich Dry Fruit Collection comes in four different
formats. Each of these is a mix of select premium dry fruits enrobed in rich
Cadbury Dairy Milk chocolate. This launch will augment the existing Diwali
offerings from Cadbury such as the Celebration packs with collection of
assorted chocolates. Cadbury Celebrations aims to be the preferred gifting
choice among family and friends this season.

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Cadbury's Creative Launch A new after dinner' segment

Cadbury India Limited, in its endeavor to continuously provide a chocolate-

experience, brings the magic of Cadbury Dairy Milk (CDM) Desserts - with
rich indulgent crème center, in exotic & traditional flavors of Tiramisu and
Kalakand. CDM Desserts offer the perfect rounding off taste, after meal that
adds special Meetha’ moments to the family.

The rich tastes of CDM combined with the unique crème center in exotic
flavors provide a special chocolate experience. CDM Desserts add delight to
the after-meal moments, especially with the consumers whose current choice
of sweets range from home made delicacies to fruits to meethai.

Hence CDM Desserts positions itself as the perfect after meal, with the idea
“Khaane Ke baad Kuch Meetha Ho Jaye”.

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 THE WORMY CONTROVERSY
RISE OF THE CONTROVERSY

State FDA Commissioner Uttam Khobragade said a group of people

approached him with chocolates that had worms in them. Sebastian
Fernandez had purchased Cadbury Dairy Milk chocolate from a shop at Pick
and Pay, Vile Parle. Fernandes discovered that the chocolate (Batch No
28F3I10703) had worms in it.

Fernandes complained to the shopkeeper Jitendra Shah who later informed

Pravin Marve, vice-president, Andheri Vyapar Manch.

Marve then contacted the FDA and gave them the sample. FDA Joint
Commissioner Hindurao Salunkhe said Cadbury's Talegaon plant will also
be inspected.

Bharat Puri, managing director of Cadbury India will never forget the batch
of Dairy Milk chocolates numbered 28F311 manufactured last year at the
company's plant in Thane, near Mumbai.

That was the worm-infested batch that triggered a crisis for the company that
had always prided itself on its squeaky clean image.

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EFFECTS OF THE CONTROVERSY ON CADBURY

The state Food and Drug Administration has ordered seizure of Cadbury's
Dairy Milk chocolates from all over Maharashtra after worms were found in
two of them in Mumbai.

Cadbury India, whose chocolates had ridden into controversy late last year
during the festival season because worms were discovered in some stocks of
its Dairy Milk chocolates is probably hoping the association with Bachchan
will help consumers forget the bad press the company got on account of the
discovery.

The Food and Drug Administration had then seized the company's stocks
and the Cadbury India management had explained it was bad storage
practices by retailers and distributors that had led to the worms. Cadbury
India's sales fell following the discovery. And even the government got into
the act with the central health ministry asking for a report on the
controversy.

The timing of the controversy couldn't have been worse. Festival season
sales (Cadbury sells almost 1,000 tonnes of chocolates during Diwali)
plummeted 30 per cent.

Until then, in the country's FMCG sector plagued by slow, low single digit
topline and bottomline growth, Cadbury was a sweet exception. But its net
profit in 2003 dipped 37 per cent to Rs 45.6 crore (Rs 456 million) as
compared to a 21 per cent increase the previous year.

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ROLE OF THE PUBLIC RELATIONS

PR concerns the total communications of your total organization/group of

organizations.

It is unlike advertising, where you are sharing skills of planning, creative

and media buying teams with an out-sourced agency. PR calls for a very
intimate understanding of the total inner workings of your organisation at all
levels - workers to Board levels. It requires the integration of knowledge and
communications.

It is not a part time job for a Marketing Services Manager. If it is to work

and serve the larger objective, the PR department should be independent,
servicing others like production, personnel, marketing, finance, corporate
agendas. Therefore, the PR Head should be part of the top management team
- reporting directly to the CEO. He also needs to share everyone's
confidences.

The PR department of Cadbury’s played a very effective role in managing

the reputation and keeping up the goodwill of the company.

After being struck with the Worm Controversy it was not possible to create a
very good impact on consumers who trusted the company the most. But
through the efforts and a good PR team Cadbury’s managed to wriggle its
self out of the controversy with a clean chit.

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STEPS TAKEN TO SOLVE THE CONTROVERSY

• NOT DENYING THE FACT

It helped that the Maharashtra Food and Drug Administration had

given a clean chit to the company's two plants in the state. Cadbury
went into overdrive to tell consumers that improper storage of what is
essentially a perishable commodity might lead to worm infestation.

Last November Bharat Puri, Cadbury's mild-mannered MD, went to

media offices around the country meeting reporters, answering mostly
hostile queries and patiently explaining the company's stand on the
issue.

"Unlike the cola companies which were caught in a controversy just a

month earlier and displayed an ostrich-like attitude, Cadbury did not
go into denial mode. It accepted that there was a problem, which may
not have been of its own making, and made a commitment to the
consumer that it would plug all possible safety loopholes," says a
Mumbai-based brand consultant.

As a result Cadbury improved the packaging and paid more attention

to the way its chocolates were stored by nearly 650,000 retailers
across the country.

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• TAKING PRECAUTIONS

In the aftermath of the controversy, the company launched Project

Vishwas, a retail education programme under which 190,000 retailers
in key states were covered. The programme entailed generating
awareness and providing assistance in improving storage quality.

"What you see now is the most over-engineered packaging for a Dairy
Milk chocolate anywhere in the world. Even our festival packs come
with a tamper-proof outer sealing and improved packaging inside,"
explains Purohit.

The new double packaging even for the smallest offering, the 13 gm
Rs 5 Cadbury Dairy Milk, had the bar wrapped in aluminium foil and
enclosed in a polyflow pack, which was sealed on all sides.

The larger Cadbury Dairy Milk packs came in poly-coated aluminium

foil, which was heat-sealed and then wrapped in the branded outer
package. Both these initiatives are country specific and Cadbury
invested nearly Rs 25 crore (Rs 250 million) this year on new
machinery for the improved packaging.

The company also carried out quality checks at its facilities as well as
its carrying and forwarding warehouses and distributor warehouses
and found products free of infestation.

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 • GAINING BACK TRUST

The Big B promoted the Big C in the chocolate business - Cadbury in

India. Indian cine superstar Amitabh Bachchan has signed on to
become the brand ambassador of the chocolate major for two years.

AB played a pivotal role in all communication relating to Cadbury's

products and brands, be it in print, on television or the great outdoors,
the company's managing director Bharat Puri has been quoted as
saying in media reports.

With the help of its Public Relations Dept. and advertising agency
O&M, it created a campaign which aimed for both rational and
emotional appeal.

One of the ads showed Bachhan visiting a Cadbury plant, inspecting

the systems and processes and finally consuming a bar of chocolate to
be convinced that there's nothing wrong with the brand.

The other ad featured Bachhan and his granddaughter to emphasize

that the product was absolutely safe for children.

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Cadbury stepped up it’s advertising spend significantly this year to
nearly Rs 40 crore (Rs 400 million). With a turnover of Rs 729 crore
(Rs 7.29 billion) in 2003, Cadbury has a 70 per cent market share in
chocolates and Dairy Milk chocolate has 30 per cent market share,
despite competitors like Nestle and Amul.

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• BENEFITS OF A GOOD CAMPAIGN

The company bounced back soon after the campaign hit the screens.
Between October 2003 and January 2004, Cadbury's value share
melted from 73 per cent in to 69.4 per cent. The recovery began in
May 2004 when Cadbury's value share went up to 71 per cent.

Cadbury's Indian operations are not just the largest in Asia but also the
cheapest. In India, Cadbury has the largest market share anywhere in
the world and has been the fastest growing FMCG Company in the
last three years with a compound annual growth rate of 12.5 per cent.

So, despite the bitter moments of the last year, the company is hoping
that the future will be much sweeter.

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 CONCLUSION

• PR needs research, planning, implementation and evaluation.

• PR needs to be based upon a strategy, including the budget.

• PR is a very vital tool for management, but the top leaders and policy-
makers must also be involved in the strategy.

• Theymust be knowledgeable and be up-to-date on what key audiences

or “publics” know (or think they know) about our organization, if
theyexpect to communicate effectively with them.

PUBLIC RELATIONS FORM AN INDISPENSABLE PART OF ANY

ORGANISTION.

Public relations include ongoing activities to ensure the company has a

strong public image. Public relations activities include helping the public
to understand the company and its products. Often, public relations are
conducted through the media that is, newspapers, television, magazines,
etc.

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