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The successful completion of any work would be always be incomplete unless we mention the valuable cooperation and assistance of those people who were a source of constant guidance and encouragement , they served as bacon light and crowned our efforts with success. I would like to extend our sincere gratitude to our Prof. VIJAY NAGRANI for his guidance.
PREFACE
The Cadburys, Indias number one chocolate, is able to share their market insights based upon unparallel breath of chocolate experience. The merger in 1969 with Schweppes and the subsequent development of the business have led to Cadbury Schweppes taking the lead in both, the confectionery and soft drink market and becoming a major force in the international market. Cadbury Schweppes today manufactures product in 60 countries and trades in staggering 120. This project is a sincere effort to study the buying behavior of consumers when they buy chocolates. A descriptive research procedure had been applied to come to the conclusions of the project. A detailed questionnaire had been prepared and the responses of the samples had been collected for the analysis. The project later ended with the analysis of the responses keeping the limitations under consideration.
EXECUTIVE SUMMARY
TITLE: ANALYSIS OF THE BUYING PATTERN OF
CADBURY CHOCOLATE IN THE MARKET WITH RESPECT TO ITS COMPETITORS.
Rationale of study:
The Cadburys Inc has taken the opportunity to offer us a broader view of chocolate category. The Cadburys, Indias no.1 Chocolate, is able to share their market insights based upon unparalleled breath of chocolate experience. Cadbury has grown from strength to strength with new technologies being introduced to make the Cadbury confectionary business, one of the most efficient in the world. This report studies about buying behavior of consumers in case of chocolates.
CONTENTS
1. INTRODUCTION TO THE STUDY Introduction of Cadbury History and development of Cadbury Introduction of Nestle Objective of study Hypothesis 05-17 05-06 07-10 11-16 16 17 18-27 19 21 28-30 31-43 44-45
2. PRODUCT PROFILE Cadbury product Market segmentation 3. RESEARCH METHODLOGY 4. DATA ANALYSIES AND INTERPRETION 5. CONCLUSION AND LIMITATIONS
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INTRODUCTION
INTRODUCTION
The Cadburys Inc has taken the opportunity to offer us a broader view of chocolate category. The Cadburys, Indias no.1 Chocolate, is able to share their market insights based upon unparalleled breath of chocolate experience. Cadbury has grown from strength to strength with new technologies being introduced to make the Cadbury confectionary business, one of the most efficient in the world. The merger in 1969 with Schweppes and the subsequent development of the business have led to Cadbury Schweppes taking the lead in both, the confectionary and soft drink market and becoming a major force in the international market. Cadbury Schweppes today manufactures product in 60 countries and trades in staggering 120. The Cadbury story is a fascinating story of a family business that grew in one of the biggest, most loved chocolate brand in the world. This project is a sincere effort to study the buying behavior of consumers when they buy chocolates. A descriptive research procedure had been applied to come to the conclusions of the project. A detailed questionnaire had been prepared and the responses of the samples had been collected for the analysis. The project later concluded with analysis of the responses keeping the limitations under consideration.
1831 By this year the business had changed from a grocery shop and John
Cadbury had become a manufacturer of drinking chocolate and cocoa. This was the start of Cadbury manufacturing business as it is known today. A larger factory in Bridge Street Birmingham was rented in 1847, John Cadbury was joined by his brother Birmingham and the business became Cadbury Brother of Birmingham.
1861 John Cadbury resigned his business and handed over to his sons, Richard,
25 and George, 21 who after 5 difficult years almost shut down the business to take up other vocation. Fortunately for generation of chocolate lovers, they didnt.
1866 Saw a turning point for the company with the introduction of a process
for pressing the cocoa butter from the coca beans. This not only enabled Cadbury Brothers to produce pure coca essence, but the plentiful supply of coca butter remaining was also used to make new kind of eating chocolate. The essence was advertised as Absolutely pure, therefore best.
1879 Business prospered from this time and Cadbury Brother outgrew
the Bridge Street factory, moving in 1879 to a Greenfield site some miles from the center of Birmingham which came to call Bourneville. The opening of the Cadbury factory in a garden also heralded a new era in industrial relations and employee welfare with joint consultation being just one of the introduced by the pioneering Cadbury Brothers.
1899 In this year the business private limited company Cadbury Brothers
Limited. Progress since the start of the century through the inter war years onwards has been rapid. Chocolate has moved being a luxury item to well within the financial reach of everyone.
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1905 Cadbury has many famous brands with one of major success story being
Cadburys Dairy Milk chocolate launched in 1905, today Britains favorite moduled chocolate bar. Cadbury today is the market leader in the U.K chocolate confectionary market, employing the most advanced processing technology and management information and control techniques. The company is the confectionary division of Cadbury Schweppes plc which is major force in the confectionary and soft drinks international market. World - wide Cadbury is one of the pre eminent names in confectionary with impressive range of famous brands. Quality has been the focus of the Cadbury business from the very beginning as generations have worked to produce chocolate with that very special taste, smoothness and snap, so characteristics of Cadburys chocolate.
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NESTLE INDIA
THE NESTLE India stock has been bubbling with activity in an otherwise listless equity market. Till date, the stock has surged 77 per cent from its low of Rs 304 in May 2000 and now commands a valuation 39 times the expected earnings for 2000. This is steep by FMCG standards. The recent surge in the stock is partly driven by the announcement by the parent, Nestle SA, that it would use the creeping acquisition route to mop up another five per cent in Nestle India through open-market purchases. But improving the stock's valuation can also be traced to good financial performance in a market starved of healthy earnings numbers.
On a comeback trail
The resumption of its coffee exports to Russia and a favorable input price environment pepped up Nestle India's net profit growth to 28 per cent in the first nine months of 2000. Sales growth in this period was 10.4 per cent, with domestic sales rising 9.8 per cent and export sales 13.8 percent. In reality, the growth in sustainable net profits was higher than reported as the company took an additional one-time charge of Rs 14.70 crore in the first nine months of 2000 for provisions against contingencies. Unusually, low input prices may have contributed considerably to margin expansion. Continuing surpluses in global production have pushed both coffee and cocoa prices (the two key inputs for Nestle India, apart from milk) to historic lows in 2000. While coffee prices are hovering close to their seven-year lows, cocoa prices recently bounced off their lowest levels in three decades.
With global agencies forecasting high carry-in stocks for the next season, the soft input price advantage could be with Nestle for the time being. Does this mean Nestle India will sustain its healthy earnings performance over the
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next couple of years? This will depend on its ability to revive sales growth in its domestic product categories.
Nestle's Kitkat has actually ceded market share to Cadbury's Perk in the past year. The market for specialized food products such as soups and noodles holds healthy growth potential. But the market is relatively small and players such as International Bestfoods, Unilever and Dabur are vying with a host of imported brands and regional players for a share of the pie.
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Tetrapacks. The product is priced at a substantial premium to the other local brands. Investment outlook: Nestle's new product forays are into extremely competitive markets and investments in the new businesses are likely to be high over the next few years. In this respect, the advantage of soft input prices, high cash flows available from the stable businesses (such as weaning cereals and coffee) and the financial might of the parent, Nestle SA, will stand Nestle India in good stead. The royalty to the parent should ensure that Nestle India continues to enjoy ungrudging access to the parent's product portfolio. In many respects, in India Nestle is pitted against its key adversaries worldwide -- Groupe Danone and Unilever. In the foods business at the global level, both companies are considerably smaller than Nestle SA. But marketing prowess, rather than size is likely to determine the success of Nestle India's new product forays in the next couple of years. Since the high growth rates of this are partly on account of the low base of last year, the growth rates are likely to reach more moderate levels next year. The stock continues to be a good investment option for investors with a three-year horizon. But since the recent uptrend is partly on account of factors unrelated to the fundamentals, there could be some downside to the stock in the near-term.
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Analyze the buying behavior of consumers regarding chocolate. Comparative study of Cadbury chocolate in the market with its main competitors. To study about the customer taste and preference in the confectionary item. To find out the market share of the different competitors in the Chocolate industry. And also to find out the satisfaction level of customer about their product. To find advertisement effect consumer buying behavior. To find which promotion scheme affect more. This report gives the help to the marketers for analyzing the different opportunities in the chocolate industry.
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HYPOTHESIES
Cadbury are more preferred brand than other brand. Diary milk is number 1 sub brand of Cadbury. Price is most important factor of consumer buying behavior. Most of customer recalls advertisement at a time of purchasing chocolate. Attractive display inside store more affects at the time of purchase a chocolate. Most of people like HARD chocolate.
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PRODUCT PROFILE
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Cadbury Product
1. Dairy Milk
2. 5 Star
3.Perk
4. Celebration
5. Temptation
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Cadbury Schweppes
Cadbury Schweppes plc, a global beverage and confectionary giant with annual sale of Rs 20,000 crores,is the worlds number one non cola soft drink company having bottling and partnership operations in 14 countries and franchises of its brand in a further 86 countries around the world. Its Hundred Percent subsidiary in India named Cadbury Schweppes Beverage India (private) Limited (CSBIL) started operation in March 1995. The first brand was launched was crush which was later followed by Canada Dry, Schweppes Tonic Water, Schweppes Bitter Lemon. CSBIL with its franchise agreement with 19 bottles throughout India proposes to be a household name. It has a policy for FOBOs (Franchise owned bottling operations unlike Coke and Pepsi which prefer COBO,s (Company owned bottling operations). In FOBO the beverages company only supplies the concentrate and the marketing support to build brand equity. The other aspects like machinery, bottling line, land and distribution is the responsibility of the bottler. As its CEO Mr. Ashok Jain says, we are the software, they are the hardware.
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To meet the objectives of our project, we segmented the market on the basis of age and focused on age group 5 o 35 yrs.
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The Diagnosis
Today, The Real Taste of Life campaign, which served Up chocolate in general, and COM in particular, into the consciousness of adult, has already become a classic of advertising and marketing. By 1993, Cadbury was desperately seeking growth for the brand With a market share of 70%, trying to win away customers from competitors in this stagnant market wouldnt help. They had to find new customers, people whod never bought chocolate before. Or, they had to increase consumption levels. The obvious solution, in a peculiar predicament. Despite low penetration, both the brand and the category were displaying symptoms of age: faltering growth, high recognition, and lack of excitement. The market research revealed the cause of the graying: chocolate wasnt a snack in India. In mature markets, chocolate straddle a continuum, from boutique Product packaged raw indulgence to a casual food. So, Cadbury whipped up a growth solution that involved associating the brand with snacking and
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functionally, which inevitably go together with high consumption rates in the Western markets. The next step: identify the barriers preventing consumers from chocolate as a snack. A battery of test, both quantitative and qualitative, comparing chocolate consumption to a basket of competitive products revealed an unmistakable answer.
The Tests
Despite the Need To Clear The residual memory of CDMs former Association, caution prevented a big break with the past, forcing Cadbury to experiment with a combination of continuity and change. The process entailed understanding the foundation of the brand, since it was these that would support the new structure. Out went the caring - and - sharing element, but the family context stayed. Cadbury had two pillars, so it made sense to change one. Chocolate should be eaten whenever you feel like. It was an impulse item, so why shouldnt it be sold as one?. The first of the two commercial focused on functionality, purging the emotional element. Is the storyline, The father watches TV, engrossed, gnawing away of CDM. The children enter, followed by the mother-but, by that time, the father has completed the distinctly un paternal act of devouring the entire bar. The children are shocked, where upon the produces another bar for them-only to eat that up too. Finally, the mother brings another bar out of her bag. The last shot more CDM bars strew around casually. The second commercial conveyed the same message, depicting four member of a family doing their own thing on a Sunday afternoon, each casually munching away on chocolates. The less than subtle message: eating chocolates just an everyday affair, without special occasion or relationship coming into play. Despite their strategic intent, both ads failed on pre airing tests. Why for stators, children were outraged at the idea of a parent
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consuming chocolate, while adults were down right angry at the notion of the father depriving his children of chocolate bar. Just as important, consumer rejected the idea that chocolate-eating could be equated with mechanical activities like combing ones hair. After all, chocolates were about feelings. There had to be magic, romance, love and emotion. These elements had been ripped away from the advertising. It was sans emotion.
The Prescription
The crucial question that Cadbury was confronted with: what strategy should it deploy to rejuvenate COM in a way that would appeal to the child lurking within the adult? To inject a modern flavor into COM, they chose to create a new brand identity, borrowing a leaf from marketing guru David Aaker, who decrees that brand identity should establish a relationship between the brand and the customer by generating value proposition involving functional, emotional, or self-expressive benefits.
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The Elixir
Having decided to barter the distinctly use selfish values of sharing and caring for the suspiciously self-centered one of self-expression, Cadburys people insisted that the rejuvenate be enriched with compensation and equally enduring positive values: universal truths, enduring human values, and universal moment of joy. To translate the brief into the commercial, they decide to simply portray occasion of childlike-but not childish-behavior from adults, without explicitly identifying adults as the target customer. They left the connection to be made by the customer In the process they were able to get viewer involvement and high levels of empathy. Nowhere did they actually say, youre an adult, you can eat it. Because nobody wants to be told. Thus it was that, the montage of the child in the man-the old man kicking the football; the pregnant woman carving a chocolate; young girl breaking into a spirit; the young man tossing a bar of chocolate at his sweet-heart departing in a bus-was created. That the consumption had to be liked before it could penetrate the cultural resistance to chocolate consumption by adults was obvious. Taking a contrition
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stance, Cadbury decided to test the commercial being devised by O&Ms creative team not for the tire battery of likeability, comprehension, credibility and behavior modification but only for the first two. If asked upfront, the consumer was hardly likely to consider the dramaticallydifferent idea credible. Nor was there much chance of her announcing an immediate change in behavior. But why likeability and comprehension? Simple: the first was meant to be the vehicle on which the daring idea-that adults should enjoy chocolate-would ride into the consumers psyche. In other words, the commercial was meant to make him smile at first-and only then realize the import once of the message, which is where the comprehension had to be tested. What was clear in this case wasthat likeability would have to include identification and feeling warmth.
Dairy Milk had successfully enabled the free child in the consumer subsequent adverting used the same communication strategy.In other words, the commercial was meant to make him smile at first-and only then realize the import once of the message, which is where the comprehension had to be tested. What was clear in this case was that likeability would have to include identification and feeling warmth.
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RESEARCH METHODOLOGY
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RESEARCH METHODOLOGY
Achieving accuracy in any research requires in depth study regarding the subject. As the prime objective of the project is to know buying behavior of consumers regarding Cadbury with the existing competitors in the market and the impact on Cadbury. The research methodology adopted is basically based on primary data via which the most recent and accurate piece of first hand information could be collected. Secondary data has been used to support primary data wherever needed. Primary data was collected using the following technique Questionnaire Method
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Sampling Method
Sample size- 60 Sampling involved selecting units from a population of interest so that by studying the sample we can fairly generalize the results back to the population from which they were chosen. In the present course work, convenience sampling was used and an aggregate sample size was 60.
Data analysisThe data collected through survey was analyzed with help of simple percentages. Tabular and graphic methods, which included pie charts and bar graphs, were used to analyze data.
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Prefer brand
cadbury nestle 20 15 25% 10 75% 5 0
cadbury nestle
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2. Which sub-brand you have purchased? Cadbury Diary Milk 5 Star Perk Celebration Temptation Total Below16 9 1 4 0 0 14 16.1-25 10 7 1 0 o 18 Above25 8 3 2 0 0 13 Nestle Kit Kat Munch Milky Bar Bar-One Milk Chocolate Total >16 2 3 1 0 o 6 16.1-25 1 0 1 0 0 2 <25 6 1 0 0 0 7
7 6 5 4 3 2 1 0 Kit Kat Munch Milky Bar Bar-One Milk Chocolate >16 16.1-25 <25
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3. Rank the sub-brand of chocolate according to your preference? Cadbury Diary Milk 5 Star Perk Celebration Temptation >16 59 45 51 32 18 16.1-25 65 56 50 48 50 <25 52 38 43 33 28 Nestle Kit Kat Munch Milky Bar Bar-One Milk Chocolate >16 26 24 18 14 8 16.1-25 7 5 6 2 6 <25 33 22 19 14 13
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4. How much importance do you give to the following factors when you purchase a chocolate? (Below 16)
Very Important Flavor/taste 13 Price Quality Packaging Brand Quantity 5 8 5 6 2 Factors Important 6 10 9 12 9 11 1 5 3 4 2 6 Normal Least Important 0 0 0 1 3 1 None 0 0 0 0 0 0
14 12 10 8 6 4 2 0 Flavor/taste Price Quality Packaging Brand Very Important Important Normal Least Important None
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20 15 10 5 0 Flavor/taste Price Quality Packaging Brand Very Important Important Normal Least Important None
(Above 25)
Factors Flavor/taste Price Quality Packaging Brand Quantity
15 Very Important 10 5 0 Flavor/taste Price Quality Packaging Brand Important Normal Least Important None
Very Important 13 3 7 4 1 4
Important 5 14 12 7 9 8 1 3 1 5 7 6
Normal
Least Important 1 0 0 4 1 1
None 0 0 0 0 2 1
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6. Please tick the following sources of information in term of effect, when you purchase a chocolate? (Below 16) More Effect 7 6 5 5 4 Effect Somewhat Not effect 11 10 8 6 7 2 4 7 1 8 Effect 0 0 0 8 1
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Factors Attractive Display inside store Advertisement Suggestion from friends and relatives Brand Ambassadors Ingredients
12 10 8 6 4 2 0 Attractive Advertisement Suggestion Display inside from friends store and relatives Brand Ambassadors
Factors Attractive Display inside store Advertisement Suggestion from friends and relatives Brand Ambassadors Ingredients
More Effect 5 5 3 0 10
Effect
10 12 7 6 4
1 2 7 7 4
15 10 5 0 Attractive Advertisement Suggestion Display inside from friends store and relatives Brand Ambassadors More Effect Effect Somewhat Not
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(Above 25)
Factors Attractive Display inside store Advertisement Suggestion from friends and relatives Brand Ambassadors Ingredients
More Effect 10 4 2 2 7
Effect
6 11 13 5 11
4 3 4 6 1
14 12 10 8 6 4 2 0 Attractive Advertisement Suggestion Display inside from friends store and relatives Brand Ambassadors More Effect Effect Somewhat Not
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Chew 2%
Below 16 7 4 9 0
Between 16.1 to 25 5 7 7 1
Above 25 3 8 9 0
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8. What pack do you purchase? Small Big Family Pack Below 16 11 9 0 Between 16.1 to 25 12 8 0 Above 25 5 12 3
9. Which promotional offers attract most? Free gifts Price offer Any other Below 16 14 6 0 Between 16.1 to 25 4 15 1 Above 25 8 12 0
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11. Where do you purchase chocolates from? Below 16 16 to 25 Above 25 Option 1 3 6 2 Option 2 12 8 9 Option 3 3 3 6 Option 4 2 3 3
12. How frequently do you purchase chocolates? Below 16 Once in a fortnight 0 Daily 6 Weekly 12 Monthly 2 Quarterly 0 16 to 25 1 11 1 5 2 Above 25 1 13 1 4 1
Below 16 16 to 25 Above 25
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13. If your preferred brand is not available for repeat purchases then what will you do? Postpone your purchase Switch over to other brand Go to the other shop to search for your preferred brand Below 16 2 9 9 Between 16.1 to 25 6 6 8 Above 25 6 11 3
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CONCLUSION
Cadbury is the most preferred brand than other brands in India and Dairy Milk is the most preferred product from Cadbury. Flavor and packaging are most important factors that affect the buying behavior of customer. 57% of customer recalls advertisement before buying the product. So by our research it is concluded that advertisement affects the buying behavior. 41% people like crunchy and 32% people like nutties chocolate. And most of the people like small packs. Free gift are more attracting for children and price offer schemes attracts middle group more.
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Limitation
1. Segmentation was based on age group only. 2. As sample size of 60 is small so the buying behavior of whole cant be appropriately judge. 3. The research was restricted to a small geographical area. 4. Minimum age among respondent was 5 year and maximum 35 years. 5. The study dont consider occasion of buying chocolate.
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APPENDIX
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QUESTIONNAIRE
NAME-
GENDER-
MALE
FEMALE
AGE-
Below 16 Above 25
16.1 - 25
Cadbury
Nestle
Cadbury
Nestle
Dairy Milk
Kit Kat
5Star
Munch
Perk
Milky Bar
Celebrations
Temptation
Bar-One
Milk Chocolate
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Que4. Rank the sub-brands of chocolates according to your preference? (5 for most and 1 for least preferred).
Cadbury
Nestle
Dairy Milk
Kit Kat
5Star
Munch
Perk
Milky Bar
Celebrations
Temptation
Bar-One
Milk Chocolate
Que5. How much importance do you give to the following factors when you purchase a chocolate? (Tick in the desired column)
Factors
Very Important
Important
Normal
Least Important
None
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Yes
NO
Que7. Please tick the following sources of information in term of effect, when you purchase a chocolate?
Factors
More Effect
Effect
Somewhat effect
Not Effect
Attractive Display inside store Advertisement Suggestion from friends and relatives Brand Ambassadors Ingredients
Hard
Nutties
Crunchy
Chew
Que10. Which promotional offers attract you most? Free gifts ___________________ Price Offer Any other (specify)
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Que11. Where do you purchase chocolates from? Neighborhood shop where chocolates are kept in bottles Neighborhood shop where chocolates are kept in cold storages Neighborhood shop where chocolates are kept in special boxes Malls and convenience store
Que12. How frequently do you purchase chocolates? Once in a fortnight Weekly Quarterly Que13. If your preferred brand is not available for repeat purchases then what will you do? Daily Monthly
Postpone your purchase Switch over to other brand Go to the other shop to search for your preferred brand Que14. If another brand of the same product appears in the market, will you prefer to stop buying this brand and buy the new brand? No, not at all I may consider
Cant say
Thank You
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BIBLOGRAPHY
1. www.cadburyindia.com 2. www.nestle.in 3. Marketing Management Philip kotler
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