DECLARATION

My self Shashank Chauhan student of PGDM-rm 4 th SEMESTER

of "SCHOOL OF MANAGEMENT SCIENCES VARANASI", hereby

declare that my dissertation entitled "ANALYSIS OF MARKETING

STRATEGIES OF DIFFERENT BRANDS OF CHOCOLATE" is based

on information collected by me through secondary sources.

The data provided in the dissertation report is true to the best of my

knowledge. This dissertation has not been published so far by any other

person.

Shashank Chauhan

1
 ACKNOWLEDGEMENT

IVth semester is the last and the concluding semester and for hereby
we will face the world with knowledge which we have gained in the
institute and for the various faculties. The experiences which we have
gained here will hereby help me and will be beneficial in my succeeding
career.

First of all I would like to express thanks to God, who has helped
me a lot all through my project work as well as my course of two years.

I also want to thank my director Mr. P. N. Jha, our Director. And

then I would like to express my ineffable sense of gratitude and also
express my deep sense of indebtedness to Dr. Preety Singh, the Principal
Coordinator and my mentor to provide me such an interesting topic
"Analysis of Marketing Strategies of different Brands of chocolate". I
want to thank her for her interest, constructive criticism, unrelenting
encouragement and persistent guidance throughout project work. It has
been my great privilege to work under his inspiring guidance.

I am also thankful to my Parents and my friends for their indelible

Cooperation for achieving the Goal of this study.

2
 PREFACE

This project is all about the knowledge gained from the study of
the Chocolate industry. The project consists of the marketing strategies
and problems and challenges of chocolate industry

The Project is divided into various topics and from it a conclusion

is taken.

The project starts by the introduction to the chocolate industry then

followed by-problems and challenges and then factors affecting growth of
chocolate industry.

With my best efforts, I have incorporated the role and functioning

of Security and Exchange Board of India along with its functions.

I hope that the project will be appreciated by all.

3
 TABLE OF CONTENTS

 Research Objectives

 Research methodology

 Chocolate industry n India

 Major players and market share

 Marketing promotion of chocolates in India

 Problems & challenges in Indian chocolate industry ^ Growth

opportunities in Indian chocolate industry

 Marketing strategies

 Success factors of Cadbury

 Conclusions

 Limitations

 Bibliography

4
 RESEARCH OBJECTIVES

 To know about the major players and their market share in

chocolate industry.

 To know about problems and challenges in Indian chocolate

industry.

 To know about external factors affecting growth of chocolate

industry in INDIA

 To know about growth opportunities in Indian chocolate industry.

5
 RESEARCH METHODOLOGY

Topic:

Analysis of marketing strategies of different chocolate brands

Type of Research:

Descriptive Research: descriptive research has been conducted as the

secondary data was studied and analyzed according to the need of the
study.

Type of Data: Secondary Data.

Data Collections:

All the information which have been collected is secondary in

nature, data have extracted from the various websites, books, published
journals, magazines , and newspapers.

6
7
 CHOCOLATE INDUSTRY IN INDIA

The chocolate industry in India as it stands today is dominated by

two companies, both Multinationals. The market leader is Cadbury with a
lion's share of 70 percent. The company's brands (Five Star, Gems,
Eclairs, Perk, Dairy Milk) are leaders their segments. Till the early 90s,
Cadbury had a market share of over 80 percent, but its party was spoiled
when Nestle appeared on the scene. The latter has introduced its
international brands in the country (Kit Kat, Lions), and now commands
approximately 15 percent market share. The Gujarat Co-operative Milk
Marketing Federation (GCMMF) and Central Arecanut and Cocoa
Manufactures and Processors Cooperative (CAMPCO) are the other
companies operating in this segment. Competition in the segment will get
keener as overseas chocolate giants Hershey's and Mars consolidate to
grab a bite of the Indian chocolate pie.

Per Capita Chocolate Consumption (in Ib) of first 15 countries of the

world Rank Countries Per Capita Consumption (in Ib)

1 Switzerland 22.36

2 Austria 20.13

3 Ireland 19.47

4 Germany 18.04

5 Norway 17.93

8
6 Denmark 17.66

7 United Kingdom 17.49

8 Belgium 13.16

9 Australia 12.99

10 Sweden 12.90

11 United States 11.64

12 France 11.38

13 Netherlands 10.56

14 Finland 10.45

15 Italy 6.13

INDIA, stands nowhere even near to these countries when

compared in terms of Per Capita Chocolate Consumption. The Indian
chocolate industry is extremely fragmented with a range of products
catering to a variety of consumers. We have the bars/slabs, jellies,
lollipops, toffees and sugar candies. The market size of chocolates was
estimated to be around 16,000 tonnes, valued around Rs.4.16 billion in
1998. After economic liberalization in 1991, major changes have
occurred in food habits, partly on account of rise in gross domestic
product (GDP) growth and higher purchasing power in the hands of the
middle-class representing a third of the total population. Availability of
chocolate products has also exploded.

9
Types of Chocolates

Depending on what is added to (or removed from) the chocolate liquor,

different flavors and varieties of chocolate are produced. Each has a
different chemical makeup, the differences are not solely in the taste.

1. Unsweetened or Baking chocolate

It is simply cooled, hardened chocolate liquor. It is used primarily as

an ingredient in recipes, or as a garnish.

2. Semi-sweet chocolate

It is also used primarily in recipes. It has extra cocoa butter and sugar
added. Sweet cooking chocolate is basically the same, with more sugar
for taste.

3. Milk chocolate

It is chocolate liquor with extra cocoa butter, sugar, milk and vanilla
added. This is the most popular form for chocolate. It is primarily an
eating chocolate.

Cocoa is chocolate liquor with much of the cocoa butter removed,

creating a finepowder.

Categories of Chocolates

Commercial Chocolates are available in the following forms:

1. Bars or Moulded Chocolates

2. Counts

10
3. Panned Chocolates (Gems)

4. Eclairs

5. Assorted Chocolates

Bars or moulded chocolates (like Dairy Milk, Truffle, Amul Milk

Chocolate, Nestle Premium, and Nestle Milky Bar) comprise the largest
segment, accounting for 37% of the total chocolate market in volume
terms. Wafer chocolates such as Kit-Kat and Perk also belong to this
segment. Panned chocolates accounts for 10% of the total chocolate
market. Wafer chocolates such as Kit-Kat and Perk also belong to this
segment.

Form of Consumption

a. Pure Chocolates

b. Toffees

c. Cakes & Pastries

d. Malted Beverages

e. Wafer Biscuits & Baked Biscuits

f. Chocolate Desserts

11
Market Size (by value & by volume)

The Indian chocolate market is valued at Rs. 650 crores (i.e. Rs. 6.50
billion) a year. The Indian chocolate bazaar is estimated to be in the
region of 22,000-24,000 tonnes per annum, and is valued in excess of
US$ 80 million. Chocolate penetration in the country is a little over 4
percent, with India's metros proving to be the big draw clocking
penetration in excess of 15 percent. Next, comes the relatively smaller
cities/towns where consumption lags at about 8 percent. Chocolates are a
luxury in the rural segment, which explains the mere 2 percent
penetration in villages.

12
13
Major Players & their Market Share

The major players in the Indian Chocolate Industry are:

1. Cadbury's India Limited

2. Nestle India

3. The Gujarat Co-operative Milk Marketing Federation (GCMMF)

AMUL

4. Cocoa Manufactures and Processors Co-operative (CAMPCO)

CADBURY'S -

Dairy Milk & Variants

5~Star, Milk

Treat Perk Gems,

Tiffins

Temptation & Celebrations

14
NESTLE'S -

Milky Bar

Bar One,

Crunch

KitKat,

Munch Nutties

AMUL'S-

Milk Chocolate

Fruit 'n' Nut

FUNDOO

Bindaaz

Almond Bar

15
CAMPCO'S-

Campco Bar

Cream

Krust

Turbo Treat

16
CADBURY'S INDIA LIM1TED-

Cadbury was originally incorporated as a wholly owned subsidiary of

Cadbury Schweppes Overseas Ltd (CSOL) in 1948. The company's
original name was Cadbury Fry (India) Ltd. In 1978, CSOL diluted its
equity stake to 40% to comply with FERA guidelines. In 1982, the name
was changed to Hindustan Cocoa Products.With brands like Dairy Milk,
Gems, 5 Star, Bournvita, Perk, Celebrations, Bytes, Chocki, Delite and
Temptations, there is a Cadbury offering to suit all occasions and
moods.Today, the company reaches millions of loyal customers through a
distribution network of 5.5 lakhs outlets across the country and this
number is increasing everyday.

Marketing strategy is aimed at achieving this vision by growing the

market, by appropriate pricing strategy that will create a mass market and
to have offerings in every category to widen the market.

Cadbury's Indian operations are not just the largest in Asia but also the
cheapest. In India, Cadbury has the largest market share anywhere in the
world and has been the fastest growing FMCG Company in the last three
years with a compound annual growth rate of 12.5 per cent.

17
PRODUCT BASKET

 Category Brand Variants

 Bars Dairy Milk
 Plain
 Fruit n Nuts
 Double Decker
 Roasted Almond
 Chunky
 5-Star
 Count Lines 5 Star Chrunchie
 Milk Treat Chocolate
 Orange
 Wafer Chocolate Perk Perk
 Perk XL

18
NEW PRODUCT LAUNCHES

Rich Dry Fruit Collection For Gifting Festive Season Cadbury

Celebrations' Rich Dry Fruit Collection - a range of premium chocolate
gift boxes. Available in attractive packs, the Collection caters to a
premium gifting consumer and is an ideal festive gift. It is a unique
combination of the best Cadbury chocolate and premium dry fruits and
comes in four different formats each of which is a mix of select premium
dry fruits enrobed in rich Cadbury Dairy Milk chocolate.

PRICING

After the roaring success of Nestle's Munch and Chocostick, Cadbury's

empire struck back hard. The Rs 5 price point accounts for more than half
of all chocolate sales. Nestle had seized the initiative at this price point,
with its launch of Munch, now a roaring success (and the largest selling
product at that price point). Today, Cadbury has four products at this
price point: CDM, Perk, 5 star and Gems — and the five-rupee CDM bar
is its single largest-selling SKU.

Volume led growth strategy

Cadbury has followed a well-planned strategy of fuelling volume growth

by introducing smaller unit packs at lower price points. Simultaneously,
the company seems to have astutely juggled with the larger pack sizes
and raised prices to a degree higher than what appears at face. The
strategy has driven volumes in the last two years and we expect the
volume growth to continue in the next two years.

19
DISTRIBUTION

Chocolate needs to be distributed directly, unlike other FMCG products

like soaps and detergents, which can be sold through a wholesale
network. 90% of chocolate products are sold directly to retailers.

CADBURY ADVERTISEMENTS

Cadbury's advertising has, over the past few years, aptly reflected India's
passion for chocolates.

 Dil ko jab kushi choo jaye."...kuch meetha jo jaye"

 Akhir barvi pass ho hi gaya." kuch meetha jo jaye..

 Log Cadbury Kyon Khate Hai....Khaane waalon ko khaane ka

bahaana."

 Cadbury's Dairy Milk.....Asli swad zindagi ka

CADBURY DESERTS

"Khaane ke baud kuch meetha ho jaaye."

20
21
MARKETING - PROMOTION of CHOCOLATES in INDIA

Traditionally, chocolates were always targeted at children. But stagnancy

in growth rates made the companies re-think their strategies. Cadbury
was the first chocolate company that took the market by storm by
repositioning brands at adults, as opposed to children.

BUYING BEHAVIOUR

Chocolates are consumed as indulgence and not as snack food, as

prevalent in western countries. Almost 75% chocolates are impulse
purchases. Chocolates are bought predominantly by adults and gifted to
children. On an average the wholesalers sells RsSOOOO/month of
Chocolates (all brands included). Also the wholesaler usually deals in all
kinds of FMCG goods, Foodstuff in addition to the chocolates. The items
like chocolates are placed near the counter. Chocolates are kept in
cardboard boxes and are also delivered in the same. ... In a few of the
cases the chocolates were kept separately (as per equipment provided by
the manufacturer -e.g. VISI Coolers), In addition to marketing
promotions companies have been focusing extensively on the promotions
by the sales staff. Also the companies can devise there marketing
strategies that are catering to specific segments and are thus more
effective.

NESTLE INDIA

Nestle India was promoted by Nestle Alimentana, Switzerland, a wholly

owned subsidiary of Nestle Holdings Ltd., Nassau, Bahama Islands.
Nestle is one of the oldest food MNC operating in India, with a presence
of over a century Nestle has a presence in 83 countries worldwide. It has

22
a total number of 509 factories out of which 220 are located in Europe,
153 in America and 136 in Africa, Asia and Oceania.

The Kitkat brand is the largest selling chocolate brand in the world. Other
brands include Milky Bar, Marbles, Crunch, Nestle Rich Dark, Bar-One,
Munch etc. New-launches such as Nestle Choco Stick and Milky Bar
Choo were made at attractive price points to woo new consumers. The
company introduced two new brands, Charge and Crunch, in 1998. The
company has discontinued products Chocostick, as it did not add value to
the its portfolio. Nestle achieved roaring success by grabbing the Rs 5
price point. From Jan - Sep '05, Nestle chocolates witnessed a growth of
14.8 per cent.

New Product Introduction & Innovations

The Company sustained momentum during the year by driving

distribution through innovative consumer promotions and trade offerings
and supporting key price points.

High temperatures are a typical characteristic of Indian subcontinent.

Chocolate starts melting at such high temperatures thus making chocolate
unfit for consumption. Hence, Nestle introduced an innovative LIQUID
CHOCOLATE -CHOCO STICK at a price tag of Rs. 2/- which was in
instant hit. NESTLE MUNCH, which is the largest selling unit in the
wafer segment and the most widely distributed, continued to gain in
volumes. NESTLE CHOTU MUNCH, which was launched at Rs. 2/-
price point, was well received. A range of other innovative and renovated
products were launched which included NESTLE Milk Chocolate,
NESTLE Fruit & Nut, NESTLE Krunchy, NESTLE MILKYBAR

23
STARZ, NESTLE CHOO, NESTLE Chocolate Eclairs, NESTLE Coffee
Eclairs and various flavours for CHOCOSTICK

AMUL (GCMMF)

The Rs 2,748-crore GCMMF is in chocolate segment since quite some

time. However, its market share is just 5% and the company did not look
aggressive till recently. Amul chocolates used to come in not so attractive
packages and very little marketing effort was seen. But things have
changed and for good. Amul is now an important player in this growing
chocolate industry. It has firmed up its measures with marketing and new
product launches and revamping its packaging. Amul just recently
launched new chocolate brands in the market - Rejoice, Kite Bite and
Nuts "bout You.

In an attempt to boost sales, the company launched three new chocolates

in Mumbai under the brands Fundoo, Bindaas and Almond Bar. While
the first two were been priced at Rs 10 for a 30 gm stick, Almond Bar
carried a price tag of Rs 10 for a 35 gm chocolate.

Amul targeted various segments with its new product, including

housewives from SEC A and B households, caterers, bakeries,
restaurants, biscuit manufacturers, icecream parlours, and confectioners.
Amul also aimed to capture a market share of 20 per cent in the first two
months in Delhi and Mumbai. The market size of cooking chocolate in
Mumbai and Delhi alone is estimated at 50 tonnes per month.

24
CAMPCO

Central Arecanut and Cocoa Manufactures and Processors Co-operative

A sudden withdrawal by the buyers of cocoa from the procurement
operations due to crash in the international market came as a shock to
cocoa cultivators in India. Karnataka and Kerala Governments enthused,
at this stage, the CAMPCO to enter on the scene to rescue the farmers
from distress. CAMPCO willingly took up the responsibility to enter the
cocoa market and performed a savior's role. As a strategy for survival in
the International scene the CAMPCO played a major role in establishing
a name for Indian Cocoa, which hitherto had not been achieved. It
procured cocoa pods from growers and adopting scientific processing
methods to market standards, released dry cocoa beans matching in
quality in the world market equal to that of Ghana, Brazil and other cocoa
cultivation nations. After entering into the Cocoa market, the Co-
operative was able to export Cocoa Beans worth Rs 40 million to
European countries in the initial phase of operations. India was not
known as a Cocoa producer in the international Trading Community,
since yearly production was hardly 5 to 6 thousand tonnes which is not
even 0.3% of the total world consumption.

25
26
Problems & Challenges in Indian Chocolate Industry

1. TEMPERATURE:

A peculiar problem that hinders the distribution to far-off places is the

tendency of chocolates tomeltunder even moderate heat. Manufacturers
have to take precautionary measures to ensure the preservation of
chocolates especially in summer.

2. UNAVAILABILITY OF CONTROLLED REFRIGERATION:

India does not have controlled refrigerated distribution. Air-condition

supermarkets are rare. Cadbury loses 1.5 percent of annual sales of Rs.
6.8 billion to heat damage. Companies revise ingredients to make
chocolate withstand heat, and so Indian chocolates are more resilient to
heat than Eurupean chocolates by a factor of 2 degrees

3. RAW MATERIALS:

Cocoa is the key raw material and accounts for around 35% of the total
material cost (including packaging) of chocolates. The price of cocoa has
been hitting a new high of late. India does not produce cocoa to any
noteworthy extent but is a large consumer of chocolates. Consumption of
chocolates and other cocoa-based products, especially among the middle
class, has been growing.

4. TRANSPORTATION:

Chocolate needs to be distributed directly, unlike other FMCG products.

90% of our products are sold directly to retailers. Building such a direct

27
network in rural areas is a daunting task since the infrastructure is poor in
India in rural areas.

4. THREAT FROM IMPORTED BRANDS:

Free availability of imported brands bought through illegal routes pose a

threat t the domestic chocolate industry. Usually, these imported
chocolates taste better than domestic chocolate due to recipe difference.
Hence consumers who are willing to spend a little more, prefer these
imported chocolates.

However, the premium brands, which come through official channels, do

not pose a threat to the market, as these cater to a small niche market.
However there is a lot of dumping from neighboring countries like Dubai,
Nepal, etc of inferior brand of imported chocolates. These are not only of
low quality, but are brought very near to their expiry dates. Most of the
cheap chocolate brands that are available do not meet Indian Food
Regulations

28
29
Growth Opportunities in Indian Chocolate Industry

The Indian market is still untapped and provides immense scope for
growth, both geographically as well as product basket wise. Chocolates
right now reaches about 70mn to 75mn consumers. It is estimated that
chocolates have a potential market of about 116mn consumers. Chocolate
consumption in India is extremely low. Per capita consumption is around
160gms in the urban areas, compared to 8-10kg in the developed
countries. The per capita chocolate consumption in India is still much
below the East Asian standards. Hence per capita consumption has a
immense scope for improvement. The biggest opportunity is likely to
stem from increasing the consumer base. Leading players like Cadbury
and Nestle have been attempting to do this by Value for money offerings,
which are affordable to the masses. We also believe that the near term
opportunity lies in increasing penetration rather than increasing intensity
of consumption. In the past five years, the chocolate business grown by
14-15% on an average and is expected to grow further for at least next
five years.

30
31
Strategies of Cadbury-

In order to increase sales Cadburys needs to undertake a range of

marketing activities before deciding upon the best way to encourage the
purchase of its product. When identifying the basic principals which
Cadburys must apply to its marketing will be its basic objectives because
all business must have objectives it allows them to increase sales and
make profit. Corporate aims are the long term intentions of a business,
whereas corporate objectives are the specific targets required to achieve
the aims.

The common aim and objectives of the corporation such as Cadbury

includes the following:

1. Survival

2. Profit maximisation-

which is often taken to be the reason why firms exists and to be the
primary objectives in practices most firms have a hierarchy of objectives
when a firms survival is threaten it may profit maximise in order to
restore its financial health.

3. Growth-

which includes Cadbury selling new products or expanding overseas.

4. Diversification-

which is the spreading of business risks by reducing dependence on one

product.

32
5. Sales maximisation-which is the increasing of sales

6. Improving the product image-

Which includes creating a new logo or launching a new brand of product

and creating more attractive packaging.For example, Cadbury set out two
objectives for the development of their chocolate, Fuse. These were:

1. To grow the market for chocolate confectionery

2. To increase Cadbury's share of the snacking sector

When launching a product the company Cadbury's had to make sure that
any new product in the snaking sector must establish points of difference,
creating a unique selling proposition (USP) i.e. a product with unique
appeal which is not shared by any of its competitors. Referring back to
the example of Fuse, Cadbury lost a lot of money testing out the
combination of various ingredients and more than 250 were combined
before the recipe of the chocolate was finalised. As the products are
developed, Cadbury tests them to ensure that consumers are willing to
buy them.

Cadbury then promotes its products in various ways such as the use of
above the line promotion, which is where a product is advertised through
consumer media such as television, magazines, newspapers and radio.

Evaluate the marketing strategy of Cadbury's Fuse Bar making

recommendations on how they may be developed.

33
Evaluate the marketing strategy of Cadbury's Fuse Bar making
recommendations on how they may be developed Introduction In
September 1996 the Cadburys Fuse bar was launched and before this they
did a lot of marketing. My job is to evaluate the way they marketed the
product and make recommendations. To do this I will have to conduct
some surveys and questionnaires. The key word in this question is
marketing this is the management process, which is responsible for
identifying potentially profitable products and then selling them to
customers. (Anderton) In marketing you have to take the marketing
strategy or mix into account. This is th combination of factors which help
the business sell a product - usually summarise as the 4 Ps, which are
price, product, promotion and place. (Anderton) Once these things have
been taken into account I can evaluate the marketing strategy used by
Cadbury.

34
35
MARKETING STRATEGIES OF NESTLE INDIA LTD-

PRODUCT STRATEGY-

No matter how effective the promotion and packaging, a firm will find it
very difficult to market a product which fails to satisfy a consumer need.
Kit Kat owes much of its success to a unique dual appeal - as a four-
finger chocolate bar, (known in the confectionery trade as a countline),
sold at corner shops and newsagents, but also as a two-finger biscuit sold
in supermarkets. It is a product that has endured because of its wide
appeal across the age ranges and to both sexes.

Altering the actual product is potentially a very hazardous act for an

established brand name as it risks altering the consumer perceptions of
quality built up over decades. Tampering with the recognised core
qualities could well damage the integrity of the brand. For Kit Kat, these
intrinsic elements of the brand, or unique selling points include the:

• chocolate fingers

• foil and band wrapping, unique in the countlines market and seen as
an important feature which encourages involvement and sharing by
consumers

• well-known strapline - Have a Break, Have a Kit Kat.

In spite of the risks of altering the product, the two finger bar and
multipacks were introduced in the 1960s to meet the increased needs of
supermarket shopping and more recently, Orange, Mint and Dark
Chocolate Kit Kats have been available for limited periods. In the third
week that Kit Kat Mint was available, it more than doubled total Kit Kat

36
Sales. The Orange Kit Kat proved particularly popular with sales of 38
million bars in just three weeks. It provided very positive market research
results. While they are seen as novelties, they can also be used to provide
reassurance and reinforcement of the core attributes of the original
established brand name.

Special editions are used primarily as promotional tools. Market research

has shown that consumers prefer special editions to be available for
limited periods only and that consumers are likely to purchase the
original Kit Kat at the same time or shortly after. (They are, therefore, a
good way of injecting new life into the Kit Kat product life cycle).
Depending on their popularity, some special editions are introduced more
than once. The Orange Kit Kat has proved so popular that the two-finger
multipacks are now permanently available.

Apart from these variants, the intrinsic characteristics of the Kit Kat
product and packaging have changed very little during the last sixty
years. Although some minor, subtle changes have been made in
packaging, merchandising and sales promotions, a Kit Kat from the 1930s
would be instantly recognisable to modern consumers today.

37
PRICING STRATEGY-

A key advantage of maintaining a strong brand image in a competitive

market is a degree of flexibility in the pricing strategy. It is a common
characteristic of imperfectly competitive markets for producers to
concentrate on non-price competition. When looking at the pricing
strategy for Kit Kat, it can be seen from the figures that the real price has
remained remarkably stable over the last sixty years.

PROMOTIONAL STRATEGY-

Nestle has used a wide range of promotional tactics with Kit Kat.
Promotion offers have included free bars in the multi-bar family packs
and an instant win deal with Burger King in 1996. This promotion, where
over 75 million free burgers were on offer, increased sales of Kit Kat by
an estimated 30 In 1998, an on-pack promotion featuring 'The Simpsons,'
with the chance to win £20,000 cash and hundreds of other prizes,
increased sales of Kit Kat by a staggering 41

Advertising plays an extremely important part in the confectionery

industry, with spend approaching £114 million in 1996. The Have a
Break, Have a Kit Kat theme appeared briefly in 1939, but has been the
on-going Kit Kat slogan, or strapline, since the mid 1950s. Kit Kat's
advertising is concentrated in two media:

• television commercials - which follow the well-known Have a Break

tradition

• posters - where the powerful colours of the pack and product are used
to dramatise the message.

38
A particular challenge for the advertisers is to appeal to both the
consumers and the purchasers. Women account for two thirds of all
confectionery sales, but a large proportion of these purchases are
subsequently consumed by children. Men eat as much as they purchase
suggesting they are less generous!

DISTRIBUTION STRATEGY-

Nestle has developed distribution channels which ensure the availability

of Kit Kat to buy wherever and whenever the consumer wishes to
purchase it. Sales of confectionery depend heavily on its availability, with
market research showing that well over 60of all purchases are made on
impulse. Consequently, Nestle tries to supply as many outlets as possible
- both wholesaler and retailer channels.

39
POINTS OF SALES MERCHANDISING-

It is also important when consumers are making instant, snap decisions

from a wide range of products on view. Instantly recognisable packaging
also helps to tempt customers. Shoe shops, for example, have recently
been identified as having potential for confectionery sales owing to the
large number of families that visit them. It is also predicted that
confectionery, along with all foodstuffs, will become available through
cable and interactive television, videophones and the Internet.

Internationally, Eat Kat is now also manufactured in Canada, Germany,

India, Malaysia, China, Japan, Australia, South Africa and the United
States. It is available in more than 100 countries throughout the World.

Marketing objectives-

Having decided its corporate objectives and strategy, Nestle can set
marketing objectives for each of its product lines and profit centres. The
primary objective for Kit Kat is to maintain its position as the UK's
number one selling confectionery brand. In order to achieve this, Nestle
has to develop a marketing strategy that will take into account all the
elements of the marketing mix. This will involve individual strategies for
pricing, product development, promotion and distribution. For an
established brand name, these strategies must be flexible and relevant to
each new generation of consumers, but at the same time, great care must
be taken not to damage the perceptions of the product built up over
decades of marketing.

40
Kit Kat has a particularly broad consumer profile and is popular with all
age groups. The Kit Kat marketing strategy can be summarised by the
line 'Broad in appeal, young in feel and big in stature.'

41
Success factors of Cadbury's India Limited

1. Global management processes:

India occupies a high profile position in the global organization, with

advocates in regional and global headquarters. Global management has
allowed the local operation a high degree of flexibility in growing the
business, understanding that asset utilization may be lower and returns
slower to arrive, but expecting volume share to compensate for lower
margins in the long run.

2. Local management processes:

The Cadbury India team is all-Indian and has a deep understanding of

local market dynamics.The business is set in a way that highlights
localization across all facets -driving the belief that the only way to
succeed in India is by developing localized business models. For
example, thecompany tailored the chocolate formula in India to prevent
melting in the country's open-air high frequency store environment.

3. Customized business models:

Local management has set up systems to test and develop products from
the ground up with specialized interlinked cells that execute innovation
and market testing hand-in-hand. Cadburylndia is known as a key product
innovator. Besides Dairy Milk, the entire Cadbury product portfolio in
India has been developed locally to suit Indian consumer tastes.
Packaging, marketing and distribution have all been tailored to local
market conditions.

42
4. Royalty Structure:

Royalty to Cadbury Schweppes Pic., is around 1 per cent of the turnover.

But with that, the company gets unlimited access to latest technology,
new products and so on. They can also introduce new products from the
parent, if it is suitable for Indian market.

5. Subtle reengineering of raw material mix led to cost savings:

Cadbury has reduced its dependence on cocoa, thus lowering its exposure
to volatile raw material prices as well as cutting costs.

It appears that they have subtly altered its recipe by using less of costlier
cocoa and more of milk and sugar. Cadbury's launch of Perk has also
contributed significantly in reducing the proportion of cocoa in the
overall raw material mix. Consequently, Cadbury saved about Rs.94mn
(1.8 percent of net sales) in FY1999.S.

43
44
 CONCLUSIONS;

It can be very easily concluded that Cadbury is leading the chocolate

industry by their 70% market share.

 In comparison to other Chocolate like Amul, Nestle and

CAMPCO, Cadbury, provide a better availability and give
competition to the hilt.

 Mostly market is captured by Cadbury, but for the existence in the

local market other brands must use aggressive selling techniques.

 Other brands like Amul and CAMPCO must come up with new
promotional activities such that people become aware about their
chocolates.

 We found generally that AMUL don't use any celebrity and special
advertising activities which make them popular. That's why having
low market share.

 We can conclude that there are several problems and challenges in

chocolate industry which can be overcome by several means.

 Thus we can finally concluded that the companies' strategies

should focus on driving sales through a right product mix, efficient
materials procurement, reduced wastages, increased factory
efficiencies and improved supply chain management.

45
46
 LIMITATIONS

 Dependency on secondary data limits the scope of study.

 Being a novice in conducting research and assessing the market

trend, I realized that I had limited knowledge about the topic.

 Problem in availability of needful information.

 Time available was limited for such an exhaustive study.

47
48
 BIBLIOGRAPHY

 www.cadburyindia.com

 www.nestleindia.com

 www.amul.com

49