Marketing Strategies of Cadbury: A Comprehensive Analysis

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Marketing Essentials
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Contents
Introduction......................................................................................................................................3
Marketing Process...........................................................................................................................3
Roles and Responsibilities of Marketing Function..........................................................................4
Interrelation of Marketing Function with Other Departments.........................................................6
Marketing Mix.................................................................................................................................7
Marketing Plan...............................................................................................................................10
Conclusion.....................................................................................................................................14
References......................................................................................................................................15
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Introduction
Marketing is a set of activities through which the product or service reach to the customers
meeting their needs and wants. It involves promoting the products and services for a target
market of customers. For any organization's success, customer engagement is very essential.
Marketing not only adds to customers to the organization but also plays a vital role in sustaining
them. It is not a one-time task but an ongoing process that helps in the enhancement of the
business of any company (Levens, 2010).
Current marketing trends are a blend of previous marketing strategies such as TV/Radio Ads
with expanded versions of the technology. Some of the most commonly used platforms of
marketing in today's world are Social Media Marketing, Targeted Emails, Global Marketing
Campaigns, Creative Outdoor Advertising etc. Most commonly used websites like Google and
Facebook are already making use of artificial intelligence to give structure to the unstructured
data and presenting it into forms through which it can be studied and examined. (Schlegelmilch
and Öberseder, 2010)
Marketing Process
The marketing process is a set of certain steps that are taken by the organization to identify the
specific needs of the customer and fulfil them by creating products and services. The process of
marketing involves the following:
1. Defining the Problem/Opportunity
For any solution to be provided, it is very important to define the problem clearly.
Therefore, to begin with, the marketing process of any company, it is important to define
the mission and vision of the company, having a clear view of which, analysis of the
situation in the market is done to identify the problems faced by the customers and
convert them into opportunity. Analyzing the market would also indicate the market size
and base of growth for customers, the nature of competitors in the market, different
environments affecting the organization, etc. The most commonly used models for these
are 5C Analysis and PEST Analysis. (Baker, 2014)
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2. Marketing Strategy/Planning
Once the detailed analysis of the market is done and opportunities and problems have
been identified, a strategic plan has to be made. The main purpose of this plan is to define
the ultimate aim. For the development of marketing strategies, the most commonly used
model is the STP Model (Segmentation, Targeting and Positioning).
3. Marketing Mix Decisions
The marketing mix is a set of decisions taken by the company to influence its customers
for purchasing its products/services. It was first developed by Neil Borden in 1949 that
identified 4P’s: Product, Price, Place and Promotion. Further in 1981, Bernard Booms
and Mary Bitner extended it to 7P’s by adding Process, People and Physical Evidence.
4. Implementation and Control
The final step of the marketing process is the execution of the plan and launches the
product/service in the market and persuade customer for it. Once the product has been
launched, it is very important to not just promote it but also study the results of the plan
implemented. For a successful marketing process, it is important to not just implement a
plan but to control it throughout so that it doesn't get deviated from the original standards.
(Fifield, 2012)
Roles and Responsibilities of Marketing Function
Cadbury, a confectionary giant has founded 195 years ago and is the second largest
confectionery brand in the world. It is wholly owned by Mondelez International and operates in
around 50 countries worldwide. The most commonly consumed Cadbury products are Cadbury
Dairy Milk, Cadbury Roses, 5 Star, Bournvita, etc. Holding a major share in the chocolate
industry, the company's marketing team has played a significant role in its success (Morgan,
2012). The roles and responsibilities of the marketing function in this company are as follows:
1. Coordination
For a big giant like Cadbury, it is important to coordinate between all levels of
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management regarding its marketing decisions. For instance, while promoting Cadbury
Dairy Milk, the marketing management ensures that it doesn’t take decisions which
would affect the consumption of its other products like 5 Star. Therefore, coordination
between all levels and management and coordination between all the business activities
plays a vital role.
2. Identification of Potential Markets
Marketing function does not rest with the first identification of the target customer and
restricting itself with the same. One of the biggest reasons behind Cadbury's success is
that it kept on identifying potential markets and grew over time along with it. Cadbury
has targeted all age groups but has diversified its products to a specific class of groups. It
has tapped all the potential markets like bars, beverages, desserts, ice creams, biscuits etc.
3. Identify, Develop and Evaluate Marketing Strategy
Identification, development and evaluation of marketing strategy are very important in
the marketing function. Cadbury developed different marketing strategies for its different
products and positioned them accordingly in the minds of customers. For instance,
Cadbury Bournville and Cadbury Temptation are positioned are premium chocolates
especially for the purpose of gifting.
4. Balancing the Firm's Objective and Customer SatisfactionThe most important role of the
marketing function is to balance the firm's objective and meet customer satisfaction at the
same time. Cadbury's mission is stated as "Cadbury means quality; this is our promise.
Our reputation is built upon quality; our commitment to continuous improvement will
ensure that our promise is delivered.”
5. Continuous Research
For a company to sustain for a longer period of time, it has to ensure that it exhibits
continuous research. In the Indian market, Cadbury researched the expectations in hot
beverages and found out that there are several components required by Indian parents in
the beverages which were given to children.
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Interrelation of Marketing Function with Other Departments
Marketing function needs to be carried out in an organization in a heedful way, not just
because it is important for company’s product/service but also because it influences and
interrelates with other departments of the organization. Cadbury has been running a
successful business over so many years because of the coordination of its marketing
department along with all other departments. (Piercy, 2014) Importance of interrelationship
between marketing and other functional units can be noted as:
1. Operations/Logistics Department
Marketing translates the operational visions into customer needs and creates ways to
fulfil those needs. Cadbury shielded its marketing team with the operations
department. Cadbury made certain that all the demands created in the minds of
customers by marketing department are fulfilled by the operations. The combination
of both departments helped in creating customer's trust in the products offered by
them.
2. Finance Department
Marketing function of any organization has a major influence on its finance
department. Cadbury ensured that it builds a strong relationship between both the
departments. Cadbury’s marketing department focuses on expanding its customer
base while the finance department focuses on achieving profitability out of it.
3. Human Resource Department
Human Resource department is said to be a constellation of beliefs and assumptions.
Cadbury has a positive approach towards its business because of its good hire belief.
Cadbury ensured that the employees hired by them are given the job that is the best fit
for them. Therefore, a perfect combination of Human Resource and Marketing led
Cadbury to its success.
4. Research and Development Department
Cadbury has a strong Research and Development (R&D) department which
continuously studies the market trends and its effect possibilities on the future
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according to which its marketing department strategizes its plan. With strong
coordination between both the departments, Cadbury has successfully launched
several new products and has earned heavy profits out of them.
Marketing Mix
The marketing mix is a set of actions that an organization uses to promote and sell its
product/services in the market. The term marketing mix was first developed by Neil Borden in
1949. In 1960, E. Jerome McCarthy suggested 4p’s of marketing which was considered to be the
most commonly used variables of the marketing mix. However, in 1981, Bernard Booms and
Mary Bitner built a model consisting of 7p's which is now widely accepted all across the globe (
Akroush, 2011).
 Product
The first and major element of the marketing mix is the product. A product is something
that is produced to the customers for final consumption. Cadbury provides extensive
products to its customers. The company has majorly all types of confectionery products
like bars, desserts, beverages, biscuits, bags and boxes, etc. The variation in a wide range
of products has led Cadbury to tap all the possible potential customers and satisfy their
needs. Nestle, a competitor of Cadbury, has a product mix of chocolates, milk and milk
products, beverages, etc. While Cadbury’s product mix includes confectionary items, the
product mix of Nestle comprises more of FMCG products.
 Price
Price refers to the cost a consumer pays for consumption of any product/service. Cadbury
has products with a varied price range, depending upon the purpose and occasion of its
consumption. Cadbury holds a wide range of products which are classified with different
price ranges. It has also positioned its products on the basis of their prices. For instance,
Bourneville and Silk have been positioned as premium chocolates, majorly for the
purpose of gifting, whereas 5 Star and Dairy Milk has been positioned as low-priced
good quality chocolates.
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Cadbury also priced its products according to the packaging and the quantity provided,
for instance, Dairy Milk is available at a very low price but with less quantity and then its
price increases with the increased quantity. Nestle, on the other hand, has slightly higher
prices than that of its competitors. Nestle believes that good quality comes with a higher
price and therefore has more focus on the good quality of its product. However, Nestle
also has a varied range in prices of its products according to the quantity provided but
their prices are still higher than other manufacturers.
 Place
Place refers to the synopsis of the distribution system of an organization. Cadbury has a
colossal and hale distribution system with the help of which it has made a huge impact on
the global market and has its products available in more than 200 countries. It has
expanded its reach to all the urban areas and is also tapping rural areas.
Similarly, Nestle also enjoys the advantage of a huge distribution channel and has made
its products available across the globe. However, due to slightly higher price range nestle
products aren’t able to capture the rural market rapidly due to low demand.
 Promotion
Promotion refers to all those activities done by an organization to foster its sale of
products/services. It includes activities like advertising, sales promotions, offers etc.
Cadbury promotes each of its products differently. It has positioned its different products
according to different occasions.
For instance, Cadbury celebrations have been positioned for the purpose of gifting,
Cadbury Silk has been positioned for people who cannot resist chocolate, Bournvita has
been positioned as a nutritious health drink for children, Bournvita Women has been
positioned as a drink for increasing immunity in women, etc. Nestle, on the other hand,
also has adopted different marketing schemes for its different range of products but has
however kept its positioning tagline as "Good Food, Good Life".
For instance, Nestle Maggi is one of the most consumed nestle product and is promoted
as a snack which can be easily prepared in 2 minutes. Similarly, when Nescafe coffee
was losing its popularity due to the higher price, nestle promoted the product by
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distributing free samples to customers and nurtured customers with its good taste. It also
provided free mug along with the coffee packages to increase its sales (Khan, 2014)
 Process
Process refers to how the service or product is delivered to the customer. Cadbury has a
very effective sales system which ensures the availability of its product wherever it is
required. The company has a reliable process of reaching to the customers timely. Nestle
also has a strong process and follows the FMCG process of reaching out in bulk at
required places. However, due to this system, it isn’t as effective in areas where the
consumption of its products is low.
 People
People in marketing mix refer to the target customers as well as the entire human
resource engaged in the company, right from a sales trainee to the CEO of the company.
Cadbury has a strong research team which has successfully identified the potential
customers and built up a strong team working for them. Nestle also has a strong blend of
both its customers as well as its human resource team because of which it has acquired a
large market share.
 Physical Evidence
Physical evidence refers to how the product/service is being presented for consumption.
Cadbury has worked sublimely on its physical evidence has always come up with new
ideas to attract the customers. For instance, during festival seasons, the premium
chocolate boxes by Cadbury are elegantly packed to attract the customers. Nestle
developed supreme colour ideas for its different products. For instance, Maggi was
packed in a yellow coloured packaging which created a separate identity of it in the
minds of customers. Chocolates by Nestle like KitKat and Nestle Classic are packed in
Red coloured packaging which has created an identity based on colour.
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Marketing Plan
Executive Summary
The following includes a basic marketing plan designed for Cadbury, a confectionary
corporation and detailed study of the environment of the industry, factors affecting it and certain
suggestions that could be used in the growth of the organization.
Introduction
Cadbury is a leading multinational confectionary company which was established about 195
years ago by Mr John Cadbury in England. It is the world's second largest confectionery brand in
the world. Headquartered in Uxbridge, West London, Cadbury is wholly owned by Mondelez
International and operates in around 50 countries worldwide. The most popular and successful
products by Cadbury are Cadbury Dairy Milk, Cadbury Milk Tray and Cadbury Roses. Apart
from these, Cadbury has an extensive range of chocolate bars, beverages, biscuits, ice creams,
spreads, bags, boxes and rolls and many more.
SWOT
Strengths
 High brand equity and loyalty in the
market
 Extensive range of products
 Strong research and development team
 Wide distribution system
Weakness
 Only confined to confectionary and
beverage market
 Received several dissensions regarding
worms in their chocolates
Opportunities
 Untapped rural market
 The large increase in the confectionery
market
Threats
 Increase in competition
 Increase in health consciousness
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Porter’s Analysis
 The threat to New Entry
With respect to the industry that Cadbury leads in, the threat from any new entrant is very
low as the confectionery market is already dominated by leading brands like Cadbury,
Mars & Wrigley, Hershey, Nestle, Lindt etc. For a new company to enter into this
market, it would be required to plunge in with a very innovative idea keeping in mind the
challenges caused by the existing companies. Even though, to capture a prime share in
the market would be very difficult due to the tight but healthy competitive market.
 Bargaining Ability of Buyers
Cadbury is the second largest confectionery brand all across the globe and thus has
extremely exhaustive and scattered buyers. Even though the brand holds a large buying
share in the market but the bargaining ability of buyers is very high because of the wide
range of similar products available by the competitors. Due to strong competition in the
market, buyers are having a similar range of products at varied price ranges.
 Bargaining Ability of Suppliers
Cadbury has a very large chain of suppliers and has a large purchasing power. The
ingredients used by Cadbury are not very unique and can easily be made available at a
cheaper rate due to their bulk buying of raw materials. Therefore, the bargaining ability
of suppliers is very low as Cadbury holds principal control over its suppliers.
 Competitive Rivalry
Cadbury, being a confectionary giant, has to face stiff competition in the industry and
thus holds a high competitive rivalry. The market is dominated by strong competitors like
Nestle, Ferrero Rocher, Mars & Wrigley who are trying to acquire the company's market
over many years. Also, a boost in local manufacturers has also increased the competition
in the confectionary industry.
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