Monday, August 5, 2019
Cadbury History And Important Developments Marketing Essay
Cadbury History And Important Developments Marketing Essay The name of Cadbury in the domain of chocolates was first established in the year 1824, when John Cadbury opened a store in Birmingham, London, selling freshly made cocoa and drinking chocolate. Seeing the heavy demand and success of his shop, John Cadbury set up a factory to commercially produce his offerings. In 1861, sons of John Cadbury Richard and George Cadbury took over the control of the company and to save Cadbury from closing down, invested all their funds into a cocoa press. It offered an efficient processing technique, reducing wastage and eliminating use of additives, thereby making the product Absolutely Pure (Cadbury marketed it like this). In the later years, Cadbury realized that a lot of cocoa butter is left after processing cocoa and if it is combined with milk; milk chocolates can be made out of it. So, in 1905, Cadbury launched the Dairy Milk for the first time, which became one of the major chocolates to be sold and consumed around the world. In the same year, Cadbury commissioned its first logo and went ahead on the lines of making it a brand to continue for long. First Cadbury logo commissioned. A smooth and outreaching success of Cadbury received a heavy blow during the Second World War. Rationing was imposed and the manufacturers were prohibited from using fresh milk. Cadbury finally resorted to dried skimmed milk powder and marketed the product as Ration Chocolate. Cadburys Ration Chocolate. So as to expand its operations in other countries, on 19th July, 1948, Cadbury entered India as a private limited company as Cadbury-Fry (India) Private Limited. With the years, they started setting up manufacturing facilities in the country too. Company felt the need to cut costs while maintaining quality. It decided to source the milk and cocoa from India only and eventually undertook the project for development of cocoa and milk in India. This included establishing a special advisory board, research centres and tying up with Induri Farm Ltd., for betterment of cattle breeding for better milk yield. Seeing the growing demand for chocolates in India, Cadbury realized the market potential here. They converted themselves into a public limited company on 7th June, 1977 Cadbury India Pvt. Ltd. And then in 1984, Cadbury launched its legendary brand Dairy Milk in India. Little did they know at that time that this product will become the flag bearer of the company in India. Besides chocolates and cocoa, the company also tried its hands on other products like food drinks, ice-creams, confectionaries, apple juice and even exporting software. The company introduced a high-protein food drink Enriche in 1988. A year later, they introduced Dollops ice cream in strategic alliance with Unilever. Cadbury India expanded its offerings to Five-Star, Perk, Crackle, Gems, Bourneville, Temptations, Nutties, etc and currently has 70.07% of the chocolate market share in the country with Nestle India second in the lead. Out of this around 30% is captured by Cadburys Dairy Milk alone. Mergers and Acquisitions J.S. Fry and Sons Ltd. In 1919, Cadbury merged with Frys, the manufacturers of the first chocolate bar. They merged together to form the British Cocoa and Chocolate Company and became the manufacturers of popular chocolate brands like Countlines (a hit in US and Canada), Crunchie, Fudge and Picnic. Schweppes Cadbury went for a merger with the drinks giant Schweppes. This led to the formation of Cadbury Schweppes in 1969. This merged company went on to acquire top brands like Canada Dry, Snapple, Royal Crown, etc, to increase its world market share in drinks. http://upload.wikimedia.org/wikipedia/commons/thumb/b/b0/Cadbury_Schweppes.svg/161px-Cadbury_Schweppes.svg.png In 2003, Cadbury Schweppes took over the worlds second largest gum manufacturer, Adams and became the world leader in confectioneries. Due to such a wide scale of operations, it became difficult to manage all the verticals under one umbrella. So the company decided to split into two one focusing on the chocolates and confectioneries while other on the drinks business. This led to the demerger of the companies in 2007 to form Dr Pepper Snapple Group to handle the drinks business. Kraft Foods Inc. In January, 2010, Kraft Foods Inc took over Cadbury for Ã £11.5 billion and became the global confectionery leader. But due to lot of offerings by Kraft Foods it got split into two and Cadbury came under the newly formed company Mondelez International. Consumer Behaviour The consumer behaviour of the world population towards chocolates and confectionaries has seen a drastic change over the years. Initially, chocolates were too costly and selective that only the high-ups of the society could afford to consume it. They were more of a luxury and in England; chocolate boxes were gifted only on very special occasions. But today, from a delicacy, chocolates have become an everyday sweet. Cadbury recognizes it and endorses this belief by its Aaj meethe me kya hai campaigns, forming an image that Cadbury is for everyone, everyday. Also they have made the Cadbury chocolates, especially Dairy Milk, synonymous with the word meetha or sweet. They understand how Indians have a sweet tooth and the youth is moving away from the traditional sweets. To capture this market opportunity, they pushed strongly for campaigns like Kuch meetha ho jaye and offered festive packs like Celebrations to replace the traditional Indian sweets. Some other significant decisions taken by the company with respect to changing consumer behaviour: In 1987, Cadbury launched Wildlife Bar chocolate. For sale of every bar of it, the company contributed a portion to the wildlife fund. The company marketed itself as an environmentally-aware firm, and the people could relate to the cause and supported the company. With the idea of capturing the maximum of India Inc., Cadbury also entered the confectionery business by launching a sugar candy Googly. Such candies were easy to manufacture in bulk, convenient to distribute. Also, they were lowly priced and could be consumed by the all the sections of the Indian society, who either didnt have a taste for chocolate or couldnt afford it. To bring the chocolates and food drinks within the budget of the wide middle-class population of India, Cadbury went for LUP (Low Unit Packs) by introducing chocolates in small grammages. The youth had more affinity to chocolates and colas and wanted to be a part of the new trends. Cadbury made it simpler for them by the LPU offerings and was very effective in capitalizing on this changing consumer behaviour. Not only the youth, the company also targeted the adults especially mothers by introducing its famous food drink Bournvita in sachets. As a result, in the wake of changed consumer behaviour, where mothers preferred health-drinks for their children, Cadbury easily entered the homes of even middle class families, who couldnt afford large packs at a time. Over the years, the consumers have become more health and quality conscious and the companies cant be casual about such stricter consumer behaviour. A classic case when Cadbury erred was the Worms controversy. A batch of Dairy Milk chocolate was infested with worms. It lead to a huge controversy. People lost their trust in a quality conscious company like Cadbury and the consequences were loud and clear-Cadburys Diwali time sale of products dropped by a whopping 30%. The company bounced back by launching Operation Vishwas. They recalled all defective chocolate batches and even introduced double and plastic based packaging to ensure safety. They also roped in a reliable and trustworthy role model Amitabh Bachchan to invoke the lost trust of the people in the brand. Eventually, Cadbury was successful and is the market leader in the country. EMAMI GROUP The Emami Group came into existence when two ex-Birla Group executives Radhe Shyam Agarwal and Radhe Shyam Goenka, resigned from their jobs in 1974 to establish an ayurvedic medicine and cosmetic manufacturing unit in Kolkata. They named the company Kemco Chemicals. The founders had a strong belief that India being the land of Ayurveda, people here still had faith in the traditional medicinal system. And if it can be complemented with latest manufacturing techniques, it can be a huge commercial success. They made a risky decision of setting up their first factory in a sensitive area like Kolkata, where labour unrest, strikes and even cases of violence were common. But later, all turned out to be well. Realizing the size and potential the Indian middle class had, Emami targeted them initially and started off with a paltry sum of Rs 20,000.The distribution of the products under the Emami brand was initiated in West Bengal where the founders went to markets and retailers to market their products. Owing to the superior quality and competitive pricing of the products, as compared to other multinational products, the market and consumers easily accepted Emami. Slowly but steadily, efforts were put in to expand the distribution network in other eastern states. Soon, Emami went pan-India, where too it replicated its success as a trustworthy, reliable and traditional-yet modern brand. The basket of Emami products in the 1970s included standard and daily use products like Emami Talcum Powder, Vanishing Cream and Cold Cream. These were primarily focused at the fairer sex and were backed by strong marketing campaigns on radio and post-1982 on TV too. Emami was doing well when in 1978 it came across an opportunity to take over a dying yet credible company Himani Limited. The company was well known in eastern India for many years but due to poor operations and thin profit margins was on the verge of closing down. Emami at that time took a bold decision of acquiring Himani and by capitalizing on it brand equity and factory unit, transform both Himani and Emami into a larger and more successful company. After six years of acquiring Himani, Emami came out with two revolutionary products under the ambit of Himani only Boroplus Antiseptic Cream and Boroplus Prickly Heat Powder. These were introduced to cater to the change in consumer behavior. People were starting to become more conscious about their choices and wanted specialized products. Earlier they used to go for any cream or any talcum powder. But Emami knew that they had to produce and market specialized products like antiseptic creams for minor cuts and bruises and prickly heat powders for Indias scorching summers, to cater to changing consumer needs, so as to assure their sustenance in the future. Riding high on the success of brand Boroplus, the company launched it in Nepal, Ukraine and Russia. There also these products were a great success. The decade of 90s was very important and crucial for Emami. They launched an ayurvedic cool oil under the Himani brand Navratna Cool Oil. The oil was a runaway success and such was the demand of the product that Emami had to expand operations and setup another manufacturing facility in Pondicherry. Till date, Navratna oil is the world leader amongst cool oils. It was developed keeping in mind the changing behavior and lifestyles of the consumers. Lives became more stressful and hectic. People were losing on their health and wellness quotient and illness crept in. Keeping alive the tradition of massage, Emami developed this cool oil to not only cool off a person but also relieve him of stress, headaches, heat and insomnia. The people connected with the product and realized its usefulness in their lives. Availability of the oil in low unit packs further reached out to the rural population. Eventually, Navratna oil found acceptability in all economic sections of the society due to its USP. The setting up of the second manufacturing facility in Pondicherry provided two-pronged benefit to the company. Not only it catered to the heavy demands of Navratna Oil but also opened the markets of south India for Emami lead by Navratna Oil. Not only powders and oils, Emami increased its offering to chywanprash, hair dyes and pain-relief ointments. To further add on to its portfolio, Emami acquired close competitor Zandu and re-launched its products including balms and health foods. But in 2010, Emami had to face a failure in acquiring a tough competitor like Paras Pharmaceuticals. Paras had a parallel portfolio to Emami and included top brands like Moov, Krack, DermiCool, Livon, SetWet, Zatak, etc. If acquired, Emami would have become a major market player in the FMCG sector. But its bid fell short and Paras was eventually acquired by Reckitt Benckiser (RB). Emami now is in talks with RB to acquire Paras. A classic example of Emami changing with times is the launching of Fair and Handsome, a fairness cream for men. Emami understood that Indian men no longer want that dark skin tone and long for a fairer skin, a belief popular amongst the females. So, they launched a specialized product particularly for mens tough skin. Since its inception, Emami knew that its USP is ayurvedic compositions and it has to maintain it. Ayurveda connected well to the people in the 70s and 80s but in the new millennium, people, especially the youth are reluctant to such age-old traditional methods. They are more inclined towards latest researched techniques and formulations for their health and beauty. Emami understood this threat and heeded to the changing consumer behavior by roping in stars like Amitabh Bachchan, Shahrukh Khan, Kareena Kapoor, and many south stars , which promote the products amongst the youth and portray an image that Emami is a brand which offers the best of ayurveda and modern techniques and is a favourite amongst their star icons too.