MG412: Group Report - Cadbury Brand Extension into Potato Chips Market

This report analyzes Cadbury's brand extension strategy, focusing on the launch of baked potato chips. It begins with an executive summary, followed by an introduction outlining the brand extension concept and methodology utilizing secondary research and market analysis. The findings section delves into Cadbury's brand value, utilizing Kapferer's Brand Identity Prism to assess its physique, personality, culture, self-image, reflection, and relationship aspects. The report then details the target market using STP analysis (segmentation, targeting, and positioning), analyzes the market environment with a PESTLE analysis, and applies the Ansoff matrix to evaluate market penetration, development, product development, and diversification. The report proposes 'Cadbury Chips' as a healthy snack, compares it with competitors like Lay's, and concludes that the brand extension is viable due to Cadbury's strong supply chain and brand recognition. References include books and journals, providing a comprehensive overview of the marketing and brand extension concepts.

Principal of marketing
(Brand extension)

Executive summary
This report discusses about brand extension by Cadbury in Potato chips segment.
Secondary research is used in majority of the project and it shows that company should enter
in this segment by selling healthy snack. Company will use their brand name and product will
be named Cadbury Chips.

Contents
Executive summary...............................................................................................................................2
Introduction...........................................................................................................................................4
Methodology.........................................................................................................................................4
Findings.................................................................................................................................................4
Conclusion.............................................................................................................................................7
References.............................................................................................................................................8

Introduction
With changing global business environment, organisations now understand that they
must concentrate on growth as it is only option for survival. Brand extension is considered as
old but effective strategy for growing business. This report is based on Cadbury, Britain
based MNC, who is operating in confectionery industry. Project will discuss about brand
extension by company where they will launch Bake Potato chips in multiple flavours. This
will allow them to grab significant market share in US$ 30 Billion (approx.) global potato
chips industry (Potato Chips Market: Global Industry Trends, Share, Size, Growth,
Opportunity and Forecast 2020-2025, 2020).
Methodology
Secondary sources will be prime source of information along with analysis of
competitors and observing market. Enough data can be found to prove that Cadbury can enter
in potato chips segment by launching baked potato chips.
Findings
Brand value and current branding
Brand is a logo or mark which separates an organisation’s products or services from
others. Companies concentrate on brand extension because it is a basic strategy to earn more
profits. Cadbury is known for selling chocolates; this brand has global recognition and
entering in new segment will help enterprise in enhancing their revenue. Below is Kapferer’s
Brand Identity Prism to understand Cadbury and its Brand value:
Physique – It refers to look of brand; it is basically referring to physical features that
create brand’s image in mind of customers (Galli, Boger and Taylor, 2019). Cadbury use
navy blue colour for packaging and their product’s design differs according to the offerings.
Personality – It is related to the way organisations communicate with existing and
potential customers. It includes tone of communicating which basically delivers brand’s
message. Cadbury project themselves as a seller of joy. They understand that targeting
children is difficult as they are, anyway, going to buy chocolate so now they are representing
their products a replacement for dessert.

Culture – Every organisation has a culture which is consist of principles and values.
Cadbury wants to create trends; they promote same thing in their working culture by making
a balance between innovation and recent trends.
Self-image – It refers to the image that customers want to create about themselves. If
an organisation can find idea identity that is present in mind of buyers, then company can
modify their message accordingly. Cadbury attach the message of “joy” with their products
like dairy milk as it will be used by customers for making other people happy and indirectly it
will create customer’s image of someone who spread joy.
Reflection – It may look similar to self-image, but it isn’t. Here, company create
image of their customers and deliver message accordingly. Cadbury depict that children and
people in varying relationships are company’s main customer base.
Relationship – This element is related to the relationship that organisation wants to
create with its customers. Way of connecting with buyers, attitude of brand and other aspects
are focused under “relationship”. Cadbury has millions of customers from different age
group, they always concentrate on creating sweet relationship with purchasers through
designing or packaging of products.
Description of target market
Cadbury is entering in new segment where they will sell baked potato chips which are
not unhealthy (Suyanto, 2019). Below is STP analysis of Cadbury potato chips:
Segment – Potato Chips is already established industry it is expected to grow at the rate of
around 4% yearly. This industry has billions of customers across the globe and Cadbury will
use their brand visibility along with companies supply chain network for getting attention.
Target – Children and millennials will be main target of potato chips.
Positioning – Cadbury will promote baked potato chips as a product which does not do any
harm to customers. If will not have any unhealthy ingredient and quality of chips will be
better than average.
Analysis of market
PESTLE analysis

Political – Beside some regular trade wars between USA and China, there are not any
issues relating to global political instability. It is a positive factor for worldwide launch of
potato chips.
Economical – Demand in developing economies like India is continuously enhancing
due to improved purchasing power. Developed markets are also going to buy newly launched
product as there is no sign in reduced consumption of baked chips in these economies.
Social – The trend of eating heathy but tasty food is growing and it will sustain for
longer period (Perera, 2017). Potato chips are not healthy, but the product offered by Cadbury
will be baked and it will be made by using organic ingredients. These factors will work in
favour of company.
Technology – Latest technology will be used for production and marketing of Potato
chips. It will assist organisation in capturing more market share in less time period.
Legal – Cadbury will follow are the food safety related regulations. It will save
company from various legal troubles; and will make a positive impact on enterprise’s image
in long run.
Environmental – Instead of plastic, eco-friendly material will be used for packaging
as it will not do any harm to the environment.
Ansoff matrix
Market penetration – Selling existing product is a market where company already has
presence is known as market penetration.
Market development – It refers to selling existing product in a newly identified market
in order to increase company’s footprint.
Product development – When a new product is sold in an existing market then it is
considered as product development. Cadbury is using this strategy by selling baked potato
chips in those countries where they are already operational.
Diversification – It is known as most risky strategy; new product is sold in a market
where company does not have any experience of running business.
Explanation of new product

Tauber’s Brand Extension Options has brand extension as one of the options where
company sell more products by using same brand name. Cadbury will do same in order to
encash their brand value. The product will be called “Cadbury chips” and positioned as
healthy snacks for everyone.
Competition
Basis Lay’s Cadbury chips
Product Chips made by unhealthy
ingredients.
Organic ingredients will be
used in production of chips.
Price Competitive pricing Penetration pricing
Positioning Tasty and Favourite snack Healthy and tasty
Promotion Mostly Television
advertisement. Creative.
T.V and social media
promotion. Creative.
Conclusion
At the end, it can be concluded that brand extension will be successful because of
strong supply chain network and goodwill of Cadbury. Most of factors are in favour of
company; right execution of strategy can assure success to the organisation.

References
Books and Journals
Galli, F., Boger, C.A. and Taylor, D.C., (2019). Rethinking Luxury for Segmentation and
Brand Strategy: The Semiotic Square and Identity Prism Model for Fine
Wines. Beverages. 5(1). p.26.
Parker, J.R and et al., (2018). Building a multi-category brand: when should distant brand
extensions be introduced?. Journal of the Academy of Marketing Science. 46(2).
pp.300-316.
Perera, R., (2017). The PESTLE analysis. Nerdynaut.
Suyanto, AMA, (2019). Analysis of Segmentation, Targeting, and Positioning (stp)
Transmart. eProceedings of Management. 6 (2).
Online
Potato Chips Market: Global Industry Trends, Share, Size, Growth, Opportunity and
Forecast 2020-2025. 2020. [Online]. Available through<
https://www.imarcgroup.com/potato-chips-manufacturing-plant >.