Strategic Marketing: A Case Study of Cadbury in India

This assignment examines the strategic marketing approach of Cadbury in the Indian market. It delves into a macro-environmental analysis using PESTEL, identifying opportunities and threats. The study critically assesses three market-entry modes, recommending the most suitable option for Cadbury. It further explores market segmentation and targeting strategies, focusing on the potential target market in India. Finally, the assignment applies Porter's generic strategies to demonstrate how Cadbury can gain a competitive advantage in the Indian market.

Strategic Marketing
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Table of Contents
Introduction......................................................................................................................................3
1. Recommend a product or service and a country and provide a macro-environmental analysis
(PESTEL and future prediction) explaining the possible opportunities as well as threats your
client could face within the market of your recommended country and provide possible solutions
to the threats.....................................................................................................................................4
2. Critically assess three modes of market-entry that could be suitable to your client. Out the
three options, make a recommendation with justification as to the most appropriate one..............8
3. Applying the concepts of market segmentation and targeting critically evaluate the potential
target market of your client............................................................................................................10
4. Applying Porter’s generic strategy, explain how your client could gain competitive
advantage by adopting one of the generic strategies in your recommended market.....................12
Conclusion.....................................................................................................................................14
Reference.......................................................................................................................................15
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Introduction
Strategic marketing is helps the organization to create a better plan for satisfying the customers
and make a strong brand image in the market. This also helps to increase the productivity and the
profits for the business. Every organization use the strategic marketing to know the needs of the
customer and to create a marketing plan in order to achieve the goals and objectives of the
organization. It will help to improve and develop the organization and earn the profit through
business. However, the strategies which are involve in marketing is how to engage the
customers, how to influence the customer buying behavior, implementing new sales and
marketing methods. It also focuses on the innovation and penetration of a market. In order to
achieve the goals the organization must understand the market segments.
In this assignment, the chosen organization is Cadbury. The assignment will discuss elaborately
about the macro-environmental analysis that is PESTEL analysis, which can impact the
organization business. Additionally, this assignment will also discuss the modes of market-entry,
market segmentation and targeting and Porter’s generic strategy.
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1. Recommend a product or service and a country and provide a macro-environmental
analysis (PESTEL and future prediction) explaining the possible opportunities as well as
threats your client could face within the market of your recommended country and provide
possible solutions to the threats.
PESTEL is an important tool, which helps to understand the profit and loss of the business in the
market. External factors have an impact on the business. PESTEL stands for Political, Economic,
Social, Technological, Environmental and legal. PESTEL used as strategic planning, promotion
and development of the goods and services (Woods, 2017).
Cadbury is a confectionary brand and it is the second largest confectionery brand in the world.
The headquarter of the Cadbury company is in Uxbridge, West London. The company has their
presence in 50 countries. The popular product of Cadbury is Dairy Milk chocolate.
Factors Impacts
Political Political factors deals with the government
intervene in an economy. It includes tax,
policy, labor law, environmental law, trade,
tariff, health, education, infrastructure and
political stability. If the government of India
increase the rate on chocolate tax then it will
directly affect the customer thus they have
spend more on chocolates.
Positive and Negative affects in the business
depends on the government. Different
government has their own policies regarding
tax and norms. If the rates of chocolate in India
will become high then, the consumption of the
chocolate will decrease. Therefore, it will
directly affect the sales of the business
(Popescu, 2015).
Economic Economic factors have an important impact on
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the sale of the business. It includes economic
growth rate, interest rate, inflation rate, income
of consumer, and others. The factors affect
directly on the business operations and
decision making. Example: rate of interest
affect the cost of capital of the business.
Global recession has affected the Cadbury
expansion plan and sales. In spite of that
Cadbury gained 30% increase in its annual
profit from the sales of Dairy Milk. The
product Dairy Milk was a savior to the
company. It helps to increase the sale of the
business (Pintea, 2015). In order to set the
price of its products, the company should also
consider the inflation rate of the country.
Social Social factors are also known as socio-cultural.
This factor involves the society belief and
attitudes. It includes cultural and health
aspects, population growth rate, age and
distribution, attitudes, security and safety.
Social factors affect in demand of the product.
Example: if there is a high trend for any
particular product then the demand for that
product will be high. Company adopts different
management strategies to keep the product
updated in the market.
The Cadbury market in India is stable and also
growing in the market. Cadbury has a strong
brand image in the market. The demand for
chocolates in festive season is very high and
that will result in increase in buying power of
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the consumer. There are many varieties of
Cadbury products; the most popular one is
Dairy milk. Dairy Milk comes in wide range of
varieties that is Fruit and nuts, almond, Oreo,
raisins and others. The price also varies.
Different consumer has different taste
preference and different buying power. The
prices of the chocolates also vary according to
the flavor (Remer, 2015).
Technological The technological advancement factor impact
in the promotion of the product. The new ways
of producing, distributing and promoting the
product depends on new technological
changes. It includes the research and
development activity, technological change,
and automation. It helps to bring the innovative
ideas and produce efficiently. This has helped
the company to attract more number of
customers.
Technological advances help the company in
manufacturing the product from raw materials
into finishes goods. The company came up
with new and innovative ideas like heat
resistance chocolate that is fit for hot climate
especially for India. Cadbury promote their
product through social media that is Facebook,
they advertise their product in social media in
order interact and communicate with the
customers. This help to build the strong public
relation and also make strong the brand image
in the market (White, 2014). With the help of
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the technological advancement, the company is
able to increase its sales.
Environmental Environmental factors are important because of
the threat of raw material scarcity, population,
and others. It includes environmental factors
like weather, climate, and others. This factor
should be take care because it has direct impact
on the tourism industry.
The Cadbury follows the different scheme and
programs for improvement of the environment
without harming it.
The main aim of the Cadbury is to focus on the
emission of the greenhouse gases and water
usage. The Cadbury is into dairy products
which include the energy consumption and
water usage. The company supports the
farmers for growing cocoa beans so that the
sustainability should be there.
Legal Legal factors include equality, consumer
rights, laws, product safety and health safety.
The company should know the legal rights;
they should follow the government rules and
regulation to run the business.
The problem the company has faced regarding
legal issues is ingredients of the chocolate. The
customer is concern about the fat, so it was
affecting the buying decision of the consumer.
Due to past scandals regarding Dairy Milk
product, the company had badly affected. The
company had faced many difficulties regarding
this issue. It affected their public relation
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because it got viral everywhere. Therefore, the
company should maintain the health and safety
regarding the ingredients of the product.
Table 1: PESTLE analysis
(Source: Created by learner)
After the PESTEL analysis of the Cadbury, it is noticed that the product has a strong image in
Indian market. The demand for the Dairy milk product is very high as compared to the other
products of Cadbury. The company is improving and developing rapidly in the market. The
competitors of the Cadbury in Indian market is Hershey, Nestle, kinder and Ferrero. The
company was affected badly by the past scam. Therefore, the company had overcome and
surviving in the market. From the above table of PESTEL analysis, the company is growing
rapidly and has scope to expand in the market. From the above analysis, it can be stated that the
company needs to incorporate advance technology to increase its market share.
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2. Critically assess three modes of market-entry that could be suitable to your client.
Out the three options, make a recommendation with justification as to the most
appropriate one.
Market-Entry options
Cadbury being a multinational confectionary organization must adapt to definite mode of
entering the market of India. India being a land if diverse culture, offers an immense opportunity
for the company to enter the general market and prosper. A business giant like Cadbury can
make use of any of the three modes of market entry as per the customer base of the country. The
three modes of market entry are:
Joint venture: this is a strategy implemented by the companies to get an entry in the foreign
market with the help of sharing the ownership as well as the management with another
organization (Schlegelmilch, 2016). This can be used when two or more than two companies are
on the same page when the objectives and the mission of the businesses are concerned. In India
the business of Cadbury can gain an impetus if the company endeavors to jointly work with
another company. The joint venture is one of the simplest ways of entering the foreign market.
The benefit of joint venture is sharing of risk, reward, technology, joint development of products
(Yan and Luo, 2016).
Merger and acquisition: Merger can be considered as the amalgamation of two or more than
two entities into one with the desired result of an accumulation of properties, assets, tax benefits,
economies of scale, synergy, rapid growth, diversification and many more (Lebedev et al.,
2015). The entities of the organization cease to exist and the organizations merge to form a
single entity. Acquisition refers to the acquiring of the controlling interest in the company by the
other company. In a diversified country like India, Cadbury being a multinational organization
can merge and acquire a smaller company dealing with confectionary.
Exporting: This involves the process of selling the goods that are produced in one country and
sold in another country. Exporting the products in India can help the organization to distribute
their surplus goods and the process involves less cost and poses less threat to the business
(Mallick and Marques, 2017). The business can also have a good access of the market.
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Cadbury and its business have extended its global footprints since ages. In India, the business
can prosper by implementing Merger and Acquisition as the mode for foreign market entry.
This form of entry can help maintain the cost efficiency through the economies of scale, and
help Cadbury to gain their market share in India. The organization can also attain tax gains
through this approach. If the organization adopts this approach, their chances of multiplying
their revenue become higher in India. Moreover, in recent years many other similar companies
have chosen India as their first preference in their foreign market entry programs and hence if
Cadbury adopts this form of market entry, the business can gain competitive advantages in the
Indian market. It is also worthy to mention that the approach can help to enhance the profitability
Earning per share and the productivity of the organization. Merger and Acquisition can also be
beneficial for the positioning and gaining the knowledge of the industry know how by the
company especially when the business is getting expanded in developing country.
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3. Applying the concepts of market segmentation and targeting critically evaluate the
potential target market of your client.
Market Segmentation
Market segmentation is a process that allows a company to understand its market in a better way.
It dissect the market in different sections and small groups it can be based on age, gender,
religion, location, lifestyles, attitudes, urban population comparison with local, and many more.
This segmentation helps an organization to conduct its operation in an effective manner. They
can target their potential market and proceed with the marketing process. As Cadbury is chosen
as one of the company to enter into the Indian market it needs to understand the market and the
area of operation within the market. As it sells most of its products to children and female
consumers it can chose an effective way to approach them. If it is going to be by television or by
the means of internet is totally up to the company. However, entering into a market the company
needs to understand its competitors too (Kim, 2017).
Segmentation
There are a lot of segmented markets available for an organization. The segmented market can be
based upon geographic segmentation, demographic segmentation, psychographic segmentation,
behavioral segmentation and many more. However, Cadbury Company chooses India as a
country to enter and made the market segmentation based on demographic and geographic
situation. These two types of segmentation is very much needed for the company as it dissects on
the following basis.
Targeting
Demographic segmentation is based upon age, gender, occupation, socio-economic group. It was
very much important for the Cadbury Company to dissect its market on these criteria as because
the potential consumers are children below 15 years of age and female consumers. Although
there are other groups of people who fall as a potential consumers but their number is almost half
in number compared to these two.
Out of India’s total population over 28% falls under the age group of 0 to 15 which is the most
desirable by the Cadbury company as one of the potential market. Another big market for its
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product is the number of female consumers which is also very much high in number within this
country. Over 38 billion person in this country is female and under the age of 60. The marketing
process requires a lot of money and time. The marketing segmentation can help the company to
target these exact consumers in a better way.
Geographic segmentation is very much important for this company because it hold one of the
most diverse markets in the entire world. As this country holds one of the largest population in
the entire planet only next to china people belonging from all shapes and sizes are present in this
country. It is also one of the seventh largest countries in the entire planet. All kind of
geographical stature is present in this country.
Cadbury Company should make its choice based on the urban areas of the country. As Cadbury’s
products are not so cheap people belonging to the rural areas cannot effort to purchase the goods.
However, the Cadbury Company can make small segmentation of the product itself and make it
available even in the rural areas of the country. The mode of doing business is also important
with the segmented market.
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4. Applying Porter’s generic strategy, explain how your client could gain competitive
advantage by adopting one of the generic strategies in your recommended market
Porter’s generic strategy
Porter’s generic strategy is completely based on the three strategic options which provide a
company a strategic and competitive advantage in the market. The three competitive strategies
are cost leadership, differentiation and focus (Barin et al 2015).
Different types of generic strategy
Cost leadership strategy- Porter’s generic strategy has always helped the company in gaining
strategic advantage among the competitors within a given market. This type of strategy helps in
reducing the cost while keeping the price tags same hence improving the profit margin. For
example, MV Agusta chose to reduce the cost of production of its Brutele 800 without many
changes in the quality. Brutele 800 rivals Trumph’s 675 Street Triple the price of these two bikes
are almost similar however, due to reduction of price in the market by MV the company can gain
a lot of money from the market. This method also allows the company to make more profit and
gain more market at the same time because it can reduce the price of its product so that more
number of consumers can get attracted by it. Cadbury can also adopt this method and enhance its
profit margin. Provide a low cost product is not always suitable because another low cost
company can reduce the price of its product which will ultimately give a recoil effect to the first
company in the market share and with the profit margin (Ju, et al 2015).
Differentiation strategy- this type of strategy is very much effective in the market it gives the
producers an oligopoly market to operate. In this type of market due to the nature of the product
there will be no competitors. A different product allows the company to put a price on the
product as it may like. It is very much hard and time consuming to create a different product the
likes of which is competing in a monopoly market. For example Sony Company is selling
television and at the same time Samsung company is also selling the television. However, some
consumer go to the Sony brand because of its Bravia line of product and others go to the
Samsung because of its 4K television line of products. Cadbury can use this method on the entry
time into the country. Both of them sells televisions but however, both of them managed to
create a product that is very much different than one another.
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The focus strategy- this type of strategy is very much efficient for a new company entering into
a new business because. It basically concentrates on one particular niche market after market
segmentation. This type of approach needs to create a strong brand loyalty in the market
(Johnson, 2016).
The Cadbury Company can choose a combination of these three and make a plain accordingly.
The cost reduction can give this company a boost to the company’s profit margin on the other
hand a differentiation in the product can bring a lot of consumers into its doorsteps. And a focus
strategy can keep the competitors out from the competition (Wicker, et al 2015).
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Conclusion
After the above discussion, it is concluded that strategic marketing is important factor for an
organization. With the help of marketing strategies, the company can deal with uncertainties and
can come up with the innovative ideas that will be effective for the organization. The external
factors of macro- environment analysis explains the possible opportunities of the company that
how the organization can improve and develop their business. This also helps to know, how to
deal with the threats and overcome with problems with possible solution. The study also focuses
on the market segmentation and targeting, this will help to know the potential customer. The
Porter’s strategy explains that how the client can gain the competitive advantage by adopting the
strategies. Therefore, the study of the marketing strategies helps to develop the organization
adopting different strategies.
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