History of Cadbury

John Cadbury was one of ten children of

Richard

Tapper

Cadbury,

prominent

Quaker who had moved to Birmingham,

England from the West Country in 1794.
In 1824, 22yearold John Cadbury opened
his first shop at 93 Bull Street, next to his
father's drapery and silk business in the then
fashionable part of Birmingham.
Apart from selling tea and coffee, John
Cadbury sold hops, mustard and a new
side-line

cocoa and drinking chocolate,

which he prepared using a mortar and pestle.

Cocoa and drinking chocolate had been introduced into England in the 1650s but remained a
luxury enjoyed by the elite of English society. Customers at John Cadbury's shop were amongst
the most prosperous Birmingham families, the only ones who could afford the delicacy. Cocoa
beans were imported from South and Central America and the West Indies.
Experimenting with his mortar and pestle, John Cadbury produced a range of cocoa and
chocolate drinks, the latter with added sugar. The products were sold in blocks: customers
scraped a little off into a cup or saucepan and added hot milk or water.
John Cadbury had a considerable flair for advertising and promotion. "John Cadbury is desirous
of introducing to particular notice 'Cocoa Nibs', prepared by himself, an article affording a most
nutritious beverage for breakfast," announced his first advertisement in the Birmingham Gazette
in March 1824.
He soon established himself as one of the leading cocoa and drinking chocolate traders in
Birmingham. The popularity and growing sales of John Cadbury's cocoa and drinking chocolate
of 'superior quality' determined the future direction of the business.
In 1831, John Cadbury rented a small factory in Crooked Lane not far from his shop. He
became a manufacturer of drinking chocolate and cocoa, laying the foundation for the Cadbury
chocolate business.
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These early cocoa and drinking chocolates were balanced with potato starch and sago flour to
counter the high cocoa butter content, while other ingredients were added to give healthy
properties.
By 1842, John Cadbury was selling sixteen lines of drinking chocolate and cocoa in cake and
powder forms.

The Quaker Influence

The Cadbury family were prominent members of the Society of Friends or Quakers, one of the
many nonconformist religious groups formed in the 17th century. Their strong beliefs carried into
campaigns aimed at ending poverty and deprivation and many prominent Quaker run
businesses were part of reforms of social and industrial society in Victorian Britain.
John Cadbury's lifelong involvement with the Temperance Society influenced the direction of his
business enterprise. By providing tea, coffee, cocoa and chocolate as an alternative to alcohol
he felt he was helping to alleviate some of the alcohol related causes of poverty and deprivation
amongst working people. He also incorporated some of these principles in his industrial
relations philosophy.

Cadbury Brothers of Birmingham

As the enterprise prospered, in 1847 John Cadbury rented a
larger factory in Bridge Street, off Broad Street, in the centre
of Birmingham and went into partnership with his brother
Benjamin trading as Cadbury Brothers of Birmingham.
The retail side of the business in Bull Street was passed to
a nephew, Richard Cadbury Barrow in 1849. Barrow Stores,
as it became, traded in Central Birmingham until the 1960s.
A major turning point for the cocoa and chocolate industry came in the mid1850s, when taxes
on imported cocoa beans were reduced by Prime Minister William Gladstone. The previously
prohibitive chocolate products were now within the reach of the wider population.
2

Cadbury Brothers received their first Royal Warrant on February 4, 1854 as 'manufacturers of
cocoa and chocolate to Queen Victoria. The company continues to hold royal warrants of
appointment.
During the 1850s business began to decline. The partnership between the first Cadbury bothers
was dissolved in 1860, a difficult time in the companys history.
John Cadburys sons Richard and George, who had joined the company in the 1850s, became
the second Cadbury brothers to run the business when their father retired due to failing health in
1861
John Cadbury devoted the rest of his life to civic and social work in Birmingham until his death
in 1889. Although they had worked in their father's business for some years, the prospects for
Richard, 25, and George, 21, were daunting. Their first five years were a period of unremitting
toil with few customers, long hours and very frugal living. Both seriously considered taking up
other vocations Richard as a surveyor in England and George as a tea planter in India.
George was focused on manufacturing and Richard with sales, but in the early days both
bothers went out and promoted their goods. Due to their dedication, sheer hard work and
improvements in the quality of Cadbury cocoa products, the business survived and prospered.

Technological Advancements
Dissatisfied with the quality of cocoa products, including their own, the Cadbury
brothers took a momentous step in 1866 that not only had a bearing on their
business but revolutionized the whole of the British cocoa business.
Until that time English cocoa had been heavily adulterated with starch
substances like potato flour or sago to mask the excess cocoa butter. The
cocoa drink, as described by George Cadbury himself, was a "comforting
gruel".
Following a visit to the Van Houten factory in Holland to see their new
cocoa press, the brothers introduced this new process to their Bridge Street factory. The press
removed some of the cocoa butter from the beans, producing a less rich and more palatable
cocoa essence the forerunner of the cocoa we know today.
3

There was no need to add flour and Cadbury's new cocoa essence was advertised as
'Absolutely pure...therefore Best'
At that time there was much concern in Parliament about the adulteration of food, including
cocoa. The new unadulterated Cadbury's cocoa essence was heralded as a major breakthrough
and resulted in the passing of the Adulteration of Food Acts in 1872 and 1875. Cadbury received
a remarkable amount of free publicity during this period and sales increased dramatically.
The marketing of this cocoa essence helped turn a small business into a vast worldwide
company. The introduction of cocoa essence was not the only innovation that improved the
Cadbury Brothers' trade. The plentiful supply of cocoa butter remaining after the cocoa was
pressed made it possible to produce a wide variety of new kinds of 'eating chocolate,' leading to
the development of the smooth creamy chocolate produced today. T
The quality of the chocolates made by the company following the introduction of the cocoa
press was such that in the 1870s, Cadbury broke the monopoly which French producers had
previously enjoyed in the British Market.

Cadbury's Chocolate Box

A chocolate for eating had been produced at the Cadbury factory since 1849 but it was not, by
today's standards, a very palatable product. With the availability of cocoa butter a new
chocolate recipe produced chocolate similar to that which we enjoy today.
Refined plain chocolate was made for molding into blocks or making bars and chocolate creams
that with chocolatecoveredfruitflavoredcenters.
Cadbury's "fancy chocolates" or assortments as they are now called were sold in decorated
boxes, with small pictures that children could cut out to stick into scrapbooks.
Richard Cadbury applied his considerable artistic talents to introduce more ambitious and
attractive box designs from his own paintings, using his own children as models or depicting
flowers and scenes from his travels. They were the first Britishmade fancy chocolate boxes and
were very popular. Some of his original boxes still exist.

Elaborate chocolate boxes were much prized as special gifts by the late Victorians as they could
later be used as trinket or button boxes. Chocolate box designs ranged from superb velvet
covered caskets with beveled mirrors and silk lined jewel boxes to pretty boxes with pictures on
the lid.
The popularity of these splendid Cadbury boxes continued until their disappearance during the
Second World War. Victorian and Edwardian chocolate boxes are now collector's items.

Cadbury Brothers Ltd

The business became a private limited company Cadbury Brothers Limited in 1899 following
Richard Cadbury's sudden death at the age of 63.
George Cadbury became chairman of the new board and his fellow directors were Barrow and
William A. Cadbury, sons of Richard and two of his own sons, Edward and George Cadbury
Junior.
By 1899, the Bournville factory had trebled in size with more than 2,600 employees. With the
formation of the limited company, Bournville entered a new era as the younger members of the
Board introduced new ideas

analytical laboratories, advertising and cost offices, a sales

department, works committee, medical department, pension funds, education and training for
employees.
The Bournville factory site became a series of factories within a factory, as everything needed
for the business was produced on site, including tin box pressing plants, carton making units, a
design studio and printing plant.
This policy continued until well after the Second World War when the rationalization of the
business to mainstream activity production and marketing of chocolate confectionery led to the
use of outside specialized suppliers for ancillary items.

CADBURY INDIA
Introduction
5

Confectionery is a unique impulse category

because its eaten regularly throughout the day
rather

than

specifically

at

meal

times.

Confectionery now accounts for 24% of all food

media spend, more than any other food
category. According to a survey, purchase
levels for confectionery are significantly higher
than any other impulse category (Refer Fig1).
Fig1: %Population buying each Impulse Category
The four major confectionery categories are- chocolate confectionery, sugar
confectionery, gum and cereal bars. The Indian confectionery market reached a value of
around $500 million in 2005. Indias chocolate market is dominated by two just
companiesCadbury, which entered the country 60 years ago and has nearly 60%
market share, and Nestl, which has about 32%. The two have prospered by luring
consumers with attractively packaged chocolate assortments to replace the traditional
dried fruits and sugar confectioneries offered as gifts on Indian holidays, and by offering
lower-priced chocolates, including bite-sized candies costing less than 3 cents. With
growth just starting to kick in, Asia is going to remain a sweet spot for chocolate makers
for years to come.
The Indian chocolate market is estimated to be worth Rs. 3.2 billion, with an annual
growth rate of 10 percent. Per Capita Consumption levels are very low in India, as
compared to 8.7 kg per year in the U.K. The market therefore offers tremendous
potential for growth. In our analysis we are concentrating on the chocolate industry in
general and Cadburys in particular. Cadbury India Limited (CIL), a part of the Cadbury
Schweppes Group, is Indias leading confectionary manufacturer. Cadburys Dairy Milk,
5 Star, clairs, Perk and Gems are the largest selling brands in their segments. CIL is
estimated to have a 65 percent share of the Indian chocolate market. In fact the word
Cadbury is a classic example of a brand coming to symbolize a product category.
Vision

The governing objective for Cadbury India is to deliver Superior Shareholder value.
Cadbury in every pocket.
Sustain growth of Cadburys market through aggressive product development.
Focusing on cost competitiveness & productivity in operations and innovative utilization

of assets.
Investing to develop people.

Mission
To provide customers with a tempting and exquisite taste as enticing treats means a
mouthwatering treat which is simply irresistible.
Cadbury means quality this is the promise of Cadbury. Its reputation is to build upon
quality. Its commitment i to employ continuous improvement that will ensure that
promise.

Corporate Social Responsibility

At Mondelez, Protecting the Well-being of our Planet is part of the core strategy of our
business. It is one of the key paths to realizing our dream of Create Delicious Moments of Joy.
Being part of the Mondelz group of companies, the goal of Mondelez India Foods Private
Limited, is not only to be the trustees of a brand legacy but to continue our journey to enhance
that legacy. We aim to bring joy through measurable change - addressing the most challenging
issues impacting the communities in which we operate.

Combining our global focus with local needs, we aim to change the lives of those less fortunate
than

the

ones

that

enjoy

our

national

CSR

program

ShubhAarambh.

Project ShubhAarambh symbolises our long term commitment to address the needs of
children and young people and the ecosystem that impacts them the most by collaborating with
the communities in which we operate. ShubhAarambh means an auspicious beginning. As the
name suggests, it is a new beginning for change and transformation as we support children
from childhood to livelihood - by building communities of healthy, educated and more productive
youth. The program will promote healthy and active lifestyles by using Active Play for
Development as a channel for engagement to achieve larger development goals. The
programme addresses issues like health, nutrition education, gender equality, positive life skills

and youth development. Our goal is Healthy, Active, Productive and Positive Youth (HAPPY). It
is aligned both to our global platforms as well as local India development needs.

Corporate Objectives

Broadening consumer appeal and extending reach to newer markets

Sustained growth of market share through aggressive product development
Striving for international quality in the products and processes
Focusing on cost competitiveness, productivity and innovative utilization of

assets
Energizing and developing its people

In India, Cadbury India has defined its vision as "Life full of Cadbury, Cadbury full of
life"
India wants to achieve in the next four years what it has in the last 50 years.

Marketing Objectives:
Double its turnoverwhich stood at Rs.1, 0000 crore in 2014by 2020. This calls for
a growth rate of over 20 percent annually and will be done by setting up new capacity,
and increasing volumes

 Get more people to eat more

chocolate, which calls for making it
more

affordable

and

being

more

innovative

Could

get

into

new

product

categories like gums where the global

portfolio is impressive
Aiming for a larger footprint in the
confectionery space
To be stronger in health drinks
likemost players with near-monopoly
shares, Cadbury runs the risk of losing share to new players like Hersheys, ITC (with
brands like Minto and Candyman) as well as to premium imported chocolates. But that
may not be much of a worry if Cadbury succeeds in growing the market. They could, for
instance, hold a 50 per cent share but of a much larger pie.

Advertising Objective
Leverage further the Cadbury label, which is what the company has been doing with
aggressive advertising and promotions (these costs account for 12-13 per cent of sales,
with 30 percent of that spend being below the line).

Consumer focus:
Appealing to a broader range of consumers is at the heart of the plan.
Future activities will cover further improvisation of product & packaging to deliver
superior value to the consumers
Greater innovation in packaging & product presentation across various power brands
Product introduction to provide new texture & taste experience to consumers

ABOUT CADBURY DIARY MILK

Cadbury Dairy Milk encapsulates an enormous breath of emotions, from shared values such as
family togetherness, to the personal values of individual enjoyment. It stands for goodness. A
moment of pure magic! Cadbury Dairy Milk (CDM) entered the Indian market in 1948, and since
then for consumers across India, the word Cadbury has become synonymous with chocolate.
CDM remains at the top of the Indian chocolate market not only because of its most delicious,
best tasting chocolate but also because of its memorable communication. The Dairy Milk brand
alone accounts for approximately 33% of Cadbury's total chocolate blocks (molded) and bars
sales, making it the number one confectionery brand in the market. The continued success of
the Dairy Milk brand is testament to the quality of its brand management.
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The Dairy Milk sub-brands available in India are:

Cadbury Dairy Milk shots
Cadbury Diary Milk silk
Cadbury Dairy Milk Crackle
Cadbury Dairy Milk Roasted Almond

Brand Elements
Dairy Milk has been meticulously built around the world by Cadbury. It has been able to sustain
a strong position in the market. There are many branding elements which have resulted into
consistent result of its success. In India and across the world, the only chocolate wrapped in
Purple with the logo of Cadbury written on it. Color of all other products of Cadbury like Gems
11

which is so colorful. Packaging which introduces slight of milk splash shows the relation of milk
with Cadbury. Insignia Logo which comes on the packaging in bold vintage Dairy font in white
which also shows the relation of milk with the product. Logo Not only the above three, But there
are many more elements due to which the consistent Branding of Dairy Milk is so very popular.
Its different Advertisements, its punch lines etc It has always kept a strong association with
Milk, with slogans such as a glass and half of full cream milk in every half pound. And also
advertisement which featured a glass of milk pouring out and forming the Dairy Milk bar. Also
the ad campaigns are also the important element of Dairy Milk. It made chocolate an eating
habit among the consumers, especially the adults. Long back it was a belief that chocolate is
only for kids. But Dairy Milk changed this belief. Also they changed the trend of Sweets (Mithai)
during the occasions like Diwali, New Year etc Dairy Milk brought a new trend that whether
any occasion, Dairy Milk is best for all. Tolani
It also gave some famous dialogues from the ads which people remember always. They were
also the core brand elements of Dairy Milk. Let us see them below: The Real Taste of Life- A girl
Dancing on Cricket Field

Khane walo ko Khane ka Bahana Chahiye

Kuch Meetha Ho Jaye

Pappu Paas ho Gaya

Aaj Pehli Tareekh Hai

Shubh Aarambh

All these above dialogues were form the very famous and popular ads of Dairy Milk.By this ad
they wanted to covey to the people that for eating Dairy Milk they do not haveto wait for any
occasion. They can just have it. Whether they are happy or Sad, But Dairy Milk can be taken in
any of the mood.

BRAND PORTFOLIO
Worldwide In June 1905, Cadbury launched its first Dairy Milk bar, with a higher proportion of
milk and it became the best selling product of the company by 1913. Fruit and Nut was
introduced in 1928.In 2003, Cadbury made Dairy Milk into a family brand by taking the brands
like Caramel, Whole Nut, and Wispa and marketed them as the sub-brands of Dairy Milk.
By2006, there were 15 Dairy Milk sub-brands produced in UK including Shortcake Biscuit,
12

Wafer, Orange Chips, Mint Chips, Crispies and Cream Egg. In following two years these brands
were discontinued as they were not successful. Indian Market The Dairy Milk Brand alone
accounts for approximately 33% of total Cadburys sales. It has made Cadbury the number one
confectionery brand in the market. Currently in India, Dairy Milk has following sub-brands under
its name.

BRAND POSITIONING AND REPOSITIONING

Cadbury Dairy Milk has been the market leader in the chocolate category for years and has
participated and been a part of every Indian's moments of happiness, joy and celebration.
Today, Cadbury Dairy Milk alone holds 30% value share of the Indian chocolate market.
In the early 90's, chocolates were seen as 'meant for kids', usually a reward or a bribe for
children.
In the Mid 90's the category was re-defined by the very popular `Real Taste of Life' campaign,
shifting the focus from `just for kids' to the `kid in all of us'. It appealed to the child in every adult
and Cadbury Dairy Milk became the perfect expression of 'spontaneity' and 'shared good
feelings'. The 'Real Taste of Life' campaign had many memorable executions, which people still
fondly remember. However, the one with the "girl dancing on the cricket field" has remained
etched in everyone's memory, as the most spontaneous & uninhibited expression of happiness.
This campaign went on to be awarded 'The Campaign of the Century', in India at the Abby (Ad
Club, Mumbai) awards.
In the late 90's, to further expand the category, the focus shifted towards widening chocolate
consumption amongst the masses, through the 'Khanewalon Ko Khane Ka Bahana Chahiye'
campaign. This campaign built social acceptance for chocolate consumption amongst adults, by
showcasing collective and shared moments.
More recently, the 'Kuch Meetha Ho Jaaye' campaign associated Cadbury Dairy Milk with
celebratory occasions and the phrase "Pappu Pass Ho Gaya" became part of street language. It
has been adopted by consumers and today is used extensively to express joy in a moment of
achievement and success. The interactive campaign for "Pappu Pass Ho Gaya" bagged a
Bronze Lion at the prestigious Cannes Advertising Festival 2006 for 'Best use of internet and
new media'. The idea involved a tie-up with Reliance India Mobile service and allowed students
to check their exam results using their mobile service and encouraged those who passed their
13

examinations to celebrate with Cadbury Dairy Milk. The 'Pappu Pass Ho Gaya' campaign also
went on to win Silver for The Best Integrated Marketing Campaign and Gold in the Consumer
Products category at the EFFIES 2006 (global benchmark for effective advertising campaigns)
awards.

Some Interesting Facts

Cadbury Dairy Milk emerged as the No. 1 most trusted brand in Mumbai for the 2005 edition of
Brand Equity's Most Trusted Brands survey. Cadbury Dairy Milk & Bournvita have been
declared a "Consumer Superbrand" for 2006-7 by Superbrands India.
During the First World War, Cadbury Dairy Milk supported the war effort. Over 2,000 male
employees joined the armed forces and Cadbury sent books, warm clothes and chocolates to
the front.

Changing Perception
Dairy Milk has regular users. They do not have any particular occasion. They just have it.
Children and youngsters play an important role Decision Roles in deciding when to have dairy
milk. And now old age people also are slowly are in decision making. Dairy Milk has changed
the scenario of having Occasions sweet sometimes. They say have it anytime including Diwali,
Raksha bandhan, Weddings Dairy Milk have absolute loylaty status. Loyalty Status As we know
that Dairy Milk is the only Brand who is the only one to promote chocolate as an important part
of Festivals as well as it changed the mind sets of the people that chocolate is not only for kids
but for all. The strategy to target adults was taken further with the help of a brand new
positioning Kuch Meetha Ho Jaye. For Indians occasions and festivals have utmost
importance and Dairy Milk rigorously focused on this point and set a new trend of having Dairy
Milk in place of Mithai during the occasions.

Changing Perception Overtime Through Advertisement

Cadbury is a brand that all of us have literally grown up with. Though it has been immensely
successful in its operations in the USA, UK, Australia, etc. from the 1800s, it entered the Indian
market only in 1948. Since then, it has used a variety of strategies and a string of ad campaigns
to reach out to the Indian consumer. Initially, Cadbury ads targeted children they showed a
loving father bringing chocolates home for the children as a surprise. The ads were formulated
14

keeping in mind the Indian society then, where the children didnt have money with themselves
to buy sweets and chocolates. With this, Cadbury was able to capture a substantial part of its
target segment the kids. Next, it launched its famous ad where a teenage girl watches her
friend play cricket and jumps into the cricket field, eating a Cadbury chocolate as soon as he
hits a century. Another advertisement showed a prospective bride with mehndi on her hands,
prying open the wrapping of Cadbury chocolate with her elbows. It showed that teenagers too
can enjoy the Cadbury chocolate.
Next came the much talked about ad featuring Cyrus Broacha. It showed people from all age
groups a housewife in her 40s, a couple well into their 60s, and a teenager enjoying the
chocolate as Cyrus sang in the background Khaane walon ko khaane ka bahaana chahiye. In
this way, Cadbury created inroads into all possible age groups.
Post this, Cadbury changed its strategy. Having tapped all age-groups, it wanted to
project Cadbury chocolates as a meetha thereby trying to eat into the market of traditional
Indian sweets. Advertisements were doled out showing Cadbury chocolate being enjoyed at
every possible instance- before a good task (Shubh kaam ke aarambh se pehle), after dinner
(Khaane ke baad meethe mein kya hai), on payday (Khush hai zamaana aaj pehli taariq hai),
after passing exams (Pappu pass ho gaya) or while just having a good day (Main khush hun aaj
khamakha). Apart from this, Cadbury always comes out with special advertisements before
important festivals like Diwali (toh iss Diwali aap kise khush karenge) and Rakshabandhan
(Cadbury Celebrations- Pyar ka shagun). Cadbury was projected as the chocolate to eat on
important as well as happy occasions.
It is because of such intelligent and innovative marketing strategies that Cadbury is the most
successful chocolate brand in the India. Even now it posts a revenue growth of 30% annually,
which is amazing.

Communication Strategy
Cadbury was the one having 70 % market shares in chocolate industry. Out of which 30% was
the Dairy Milk alone. This is because of constant re-invention of the brand & bombarding
communication towards the consumers consistently to maintain the top position in mind recall in
confectionery segment. Dairy Milk was awarded as No.1most trusted brand in Mumbai 2005 for
the edition of Brand Equitys most trusted Brand Survey. Dairy Milk targeted all the aspects as
possible to get into the heart of all the people, ofall age groups. For this they communicated with
15

people through different Ads &Campaigns. Let us see few of them below: Khane walo KO
Khane ka Bahana Chahiye Pappu Paas Ho Gaya Shubh Aarambh

was one of successful

campaigns of Dairy Milk. This means Auspicious Beginning. With this campaign they said that
for whatever you start, start it with Dairy Milk and it will be successful. For this they chose the
best to advertise: Amitabh Bacchhan.

Tools For Communication

Dairy Milk used different media options to communicate different campaigns and promote Dairy
milk. They are: Outdoor Television Radio Internet TV Advertisements is the most popular
method for Dairy Milk to show their new campaigns to people so that they can more and more
relate it with their personal lives. They also have ground promotions in different malls. They
arrange some contests also to promote their brand.

Distribution Strategy
As we know that Dairy Milk holds 30% value share of chocolate market. The demand of
chocolate is increasing day by day. And Dairy Milk is no. 1 in that race. Indian market
&specifically where the penetration of chocolates is increasing, brings a need for efficiencyin
logistics and distribution. There is stiff competition in the confectionery market due to large
exposure of foreign currency rate risk, mainly on account of import of cocoa beans, cocoa
butter. Cadbury Dairy Milk is easily available anywhere in the market. Cadbury success of
proper distribution is their efficiency.

Pricing Strategy
Dairy Milk is positioned towards age group of 4-50, and thus the price is accordingly kept
affordable. Also it is easily accessible to all categories. Price range starts from Rs.5to Rs.20 in
different sizes. Cadbury Dairy Milk fruit and nut starts from Rs.30. Dairy Milk Silk is a premium
brand and thus the price of it is little higher that is Rs.50.

Market Share
Cadbury Dairy Milk has launched some very creative advertisements in India over the years.
More than innovative, the ads have been very relevant to the Indian ethos. The shubh aarambh
ads which captured the Indian tradition of having something sweet before an important occasion
or kuch meetha ho jaye which associated Cadbury Dairy Milk with celebratory occasions.

16

Recently, Cadbury Dairy Milk has been airing the meethe mein kuch meetha ho jaye
campaigns which have found a lot of favour with the audience. The ads, in typical Cadbury
style, are very heartwarming and creative.
If we look through the years, we can
clearly see that Cadbury is doing
everything possible to maintain a strong
hold on the Indian chocolate market.
While it remains a dominant leader with
over 70% of the market share, this has
eroded over the years as competitors
like Nestle, Amul and CAMPCO have
made strong forays. There was a time
before and during the early 90s when
Cadburys enjoyed an even higher market share. This was the time when chocolates were very
clearly positioned for children. However, with the entry of global giant Nestle, two things
happened. Firstly, there was a sudden spurt of competition for Cadbury. But more importantly,
the market began to grow at a faster pace. Cadbury seized this opportunity and started creating
advertisements that were targeted towards the kids in all of us. This was a very smart move as
they already had the childrens segment all tied up. Moreover, the children of the 90s have now
grown up, and Cadbury still offers them reasons to eat Dairy Milk.
Hence, while their market share has eroded by a few points, Cadbury has significantly improved
its revenues in absolute terms by evolving a long term advertising plan and one that is very
relevant to the Indian context. With predominantly Indian themes, special moments (remember
the girl dancing on the cricket field) and soulful music, Cadbury has really managed to connect
with the audience. The recent meethe mein kuch meetha ho jaye campaign is simply a
continuation of this strategy to expand the market. In conclusion, Cadbury Dairy Milk has
managed to take a simple chocolate bar and create numerous associations with it over the
years. It has built up different audiences over the years, and to every audience it offers a
different meaning but one that is very relevant.

Competitors Analysis

17

In Indian Market, the main players in the confectionery market are Cadbury, Nestle, Candico,
ITC and Parle. Let us see the competitors of Cadbury Dairy Milk in detail below Company
Founded in Brand Portfolio Kraft Foods 1903 Cadbury Dairy Milk & Variants, clairs, Bourn vita
etcNestle 1860 Kitkat, Smarties Ferrero 1940 Rocher, Raffaelo, Nutella Amul 1945 Milk
Chocolate, Fruit and Nut chocolate Candico 1997 Loco Poco Gum, Big Bubble ITC
2002(Confectionery Minto and Candy man Segment) Parle 1929 Melody, Mango Bite, Poppins,
Kismi, Orange Candy.

POINT OF PARITY (POP) & POINT OF DIFFERENCE (POD) Pops Pods

Point of Parity Point of Difference Attributes or benefits Attributes which are which are strongly
not unique but associate with somewhat same as competitive brand compared to other They
make the brand brands something different from the other.

POPS & PODS Of Cadbury Dairy Milk

Point of Parity Point of Difference Chocolate manufacturing Legacy Goodwill Variants such as
Fruit & Nut, Dark Emotional connect with customers Chocolate Constant innovation in ads
Generic name in Indian chocolate market Good quality products Campaigns targeting from kids
to adults Association with milk Excellent distribution systems 2 Layer packaging Dairy Milk is the
only one chocolate which says that in occasions also it can be used as sweet.

Brand Exploratory
Customer knowledge Cadbury Dairy Milk has been trying to get out of the image of Just
another chocolate and become something special in the minds of the people. They have also
been trying to position themselves as chocolates for all age groups and not just kids. The
campaign has successfully created a picture in the mind of the customers that Cadbury is not
just a chocolate but means of celebrations. Sources of Brand Equity There are two main
sources of Brand Equity and they are: Brand Brand Image Awareness It is customers ability to It
is consumers identify under different perception about the situations. brand. Brnad Image has
three Two things form Brand main pillars: How Awareness: Brand strong it is, Is it Recognition
and Brand Favourable and what Recall are the unique brand associations.

Brand Ambassadors

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As we know that previously Dairy Milk was only considered as Chocolate, but their new
campaign has changed this perception of consumers. As discussed above now Dairy Milk is
considered as Traditional sweet of Indian culture (Mithai) which people give to their near and
dear ones on the occasions and now they use Dairy Milk as sweet (Mithai).Brand Ambassador
chosen for Dairy Milk is none other than Megastar Amitabh Bacchhan. He endorsed the brand
so successfully that everyone loved the brand much more than they did. The endorsement has
successfully captured the Indian festivals like Raksha bandhan, Diwali, Wedding, Birthdays
etc Now people give Dairy Milk as token of love, care and affection to their friends and family.

Brand Mantra of Dairy Milk

Dairy Milk also enjoys a great - Brand Recall value when comes to chocolates with Milk. Dairy
Milk has huge command over - its distribution network spanning across India. Certain segment
feel that price of innovations with crafted Dairy Milk is high and compared to communication
campaign that Amul Milk chocolate is preferred. It offers quality product with Dairy Milk is
somewhat lacking in establish a clear and consistent other emerging markets. It has Brand
Image over the years. Strong command over its brand image in India and Europe But other
places it is lacking. Dairy Milk has been able to the recent acquisition of Cadbury which is a
globally established by Kraft Foods may result in brand name known for its somewhat negative
effect on the manufacturing competency and brand.
CUSTOMER-BASED BRAND EQUITY PYRAMID

19

Rationale of CBBE model:

Basic premise: The power of a brand resides in the minds of the customers. The challenge is to
ensure that the customers have the right kind of experiences with the products and services and
their marketing program to create the right brand knowledge structures i.e.

Thoughts
Feelings
Images
Perception & Attitudes

Building a strong brand involves a series of steps as part of a branding ladder. It is

characterized by a logically constructed set of brand building blocks.
We need to identify the areas of strength and weakness and to provide guidance to marketing
activities.

Brand Salience
Brand Salience measures awareness of the brand, how often and how easily the brand is
20

evoked under various situations or circumstances. It is the same as brand identity i.e. who are
you?

Depth of Awareness
It measures how likely it is for a brand element to come in mind i.e. ease of recognition and the
ease with which it does so i.e. recall value.
The Cadbury brand is associated with best tasting chocolate which includes from everything
from solid blocks to chocolate filled bars and novelties. For many people, chocolate is Cadbury
and no other brand will do. The core values of quality, taste and emotion supports the Cadbury
brand. Consumers know that they can trust a chocolate bar that carries Cadbury branding. The
swirling chocolate and glass and a half are powerful images. They both portray a desire for
chocolate while the half full glass suggest core values of goodness and quality. The brand has
been successful in establishing the link, in the mind of the consumer, that Cadbury equals
chocolate.

Breadth of Awareness
It measures the range of purchase and usage situations in which the brand element comes to
mind.
Branded products command premium prices. Consumers are willing to pay the premium if they
believe that the brand offers levels of quality and satisfaction that competing brands do not. Now
Dairy Milk comes in Rs. 5. The campaigns of Pappu pass ho gaya and Miss Palampur aim
to popularize Dairy Milk connecting it to various usage situations. Three consumer segments of
impulse, take home and gift has been identified. Impulse purchases are usually products
bought for immediate consumption. Take Home confectionary is generally bought in
supermarket and is often driven by specific need. The specific need or usage can be an
occasion. The consumers make more rational decisions like brand influence, price/value
relationship. These areas are further subdivided for e.g. the gift sector comprises special
occasions (Bdays or festivals) and token or spontaneous gift.

Brand Performance

21

It describes how well the product meets customers more functional needs. It transcends the
products ingredients and features to include dimensions that differentiate the brand.
The Cadbury brand name has been existence since 1824 when John Cadbury opened his shop
in Birmingham, England. Over the years it has survived in a highly competitive market and
developed its competitive advantage. It is successful in communicating the customers that it is
still the ultimate in chocolate pleasure. It has shown the consistency in performance. The
strength of the umbrella brand supports the brand value of each chocolate bar, thus implying
how reliable the brand is.
Cadburys packaging on the functional level, the pack was structurally sound to protect the
product quality in distribution and storage conditions, thus the consumers can acknowledge the
durability of the product. The economic life of the product was mentioned in the product as per
the respective food regulatory body.
Cadburys world famous packaging is comprised of four key elements:
1.

Distinctive packaging design

2.

The Cadbury corporate purple color

3.

The glass and a half full of full cream milk logo

4.

The Cadbury script logo

These elements convey to consumers the memorability, distinctiveness and high quality of
Cadbury products. The attractiveness of packaging alone can be instrumental in stimulating a
purchase specially impulse buyers.
The brand also comes in various attractive packages for different occasion like Diwali,
Raksha Bandhan, Christmas etc.
BRAND IMAGERY
It depends on the extrinsic properties of the product including the ways in which the brand
attempts to meet customers psychological or social needs.
The intangible association to Cadbury includes family experiences, childhood memories. The
product could be bought from supermarket on the insistence of the child to its parents or from
department store or specialty store through impulse buying or for little pleasures. The Cadbury
22

as a person is able to create a feeling of warmth, the togetherness of family & friends on special
occasions, to hold those relationships in life which are of prime importance and to savor the
sweet success of winning. The core values of quality, taste and emotion are the pillars of the
brand.
The milk pouring on the chocolate bar, the icon represents the unique production process in
Cadburys Dairy Milk chocolate which uses a glass and a half of full cream
Irish milk in every half-pound, hence the unique taste of the chocolate. It serves to identify the
product, its contents and the manufacturer. The heritage that has been passed down from the
past.

Brand Judgments
These are customers personal opinions about and evaluations of the brand, which consumers
form by putting together all the different brand performance and imagery associations.
Brand Quality: Consumers trust the brand because there is certain level of quality attached to
it. The people buy chocolates during the auspicious occasion as a token of their love tells the
level of trust that the people have.
Brand Credibility: The brands like Five Star, Perk derive benefit from the Cadbury parentage
including quality and taste credentials. The flagship chocolate brand, Cadbury Dairy Milk which
is over 100 years old, is the third largest chocolate brand globally with retail sales of $2 billion.
Its revenue grew by 5% in the year 2007 and by further 9% in the first half.
Brand Consideration: The brand has been considered for possible purchase and use not only
as a chocolate but it has become a substitute for sweet. The punchline Kuch Meetha Ho Jaye
justifies this. The campaign has been highly successful with the brand endorsement of Amitabh
Bachchan and consumers buy it for occasions like
Diwali and Raksha Bandhan
Brand Superiority: The unique taste of chocolate which comes in a pure form.

Brand Feelings

23

These are customers special responses and reactions to the brand. The feelings that are
evoked by the marketing program or by other means.
Warmth
The brand evokes a soothing type of feeling. As the chocolate melts inside our mouths, a similar
soothing effect is felt inside our hearts. The commercial for the cricket match shows how sweet
success of winning can be savored by the sweet taste of Cadbury. It also depicts fun and
excitement.
Passion
It is reflected in the impulse buying nature of consumers. The commercial featuring a girl with
mehndi put on her palms has a strong desire to have chocolates and she is adamant to have
it.
Bond of love & relationships
The brand provides the consumers with an opportunity to express their love to their family and
friends. It is a time to celebrate and have few precious moments of togetherness.
Enthusiasm
The cricket match commercial also reflects the fun & the excitement. The brand makes the
consumers feel excited.

Brand Resonance
It describes the nature of this relationship and the extent to which customers feel that they are
in sync with the brand. It is characterized in terms of intensity, or the depth of psychological
bond that customers have with the brand, also the level of activity engendered by this loyalty
(repeat purchase rates and extent to which customers seek out brand information).
Attitudinal attachment
The level of attachment can be judged by the fact that the consumers feel that is a perfect gift
for special occasions. It could be used to express their token of love. The
Little pleasures that can be derived from the moments of family get-together. The moment
consumers think about celebration they think about the brand.
24

Sense of community
The consumers feel a kinship or affiliation with other people associated with the brand. The
commercial in which BigB and his childhood friend exchange their gifts they feel how much their
choices resemble and automatically a feeling of kinship is developed. The sense of
belongingness to that particular brand is generated.
Behavioral loyalty
The repeat purchases on various occasion be it Diwali, Christmas or to express their love or
vote of thanks, only this brand comes to the consumers mind. This is the level of loyalty that the
Cadbury brand shares with it consumers.

INDIAN CHOCOLATE INDUSTRY

Size of the industry
Geographical distribution
Output per annum

The size of the market for chocolates in India was

estimated at 30,000 tonnes in 2008.
Mumbai, Delhi, Kolkata, Bangalore
Cadbury has over 70 %share in this market, and
recorded a turnover of over US$ 37m in 2008.
The Indian candy market is currently valued at around

Market Capitalization

$664 million, with about 70% share ($ 461 million) in

sugar confectionery and the remaining 30% ($ 203
million) in chocolate confectionery.

History
The Indian Chocolate Industry has come a long way since long years. Ever since 1947
the Cadbury is in India, Cadbury chocolates have ruled the hearts of Indians with their
fabulous taste. Indian Chocolate Industrys Cadbury Company today employs nearly
2000 people across India. The company is one of the oldest and strongest players in
the Indian confectionary industry with an estimated 68% value share and 62% volume
share of the total chocolate market. It has exhibited continuously strong revenue
25

growth of 34% and net profit growth of 24% throughout the 1990s. The brand of
Cadbury is known for its exceptional capabilities in product innovation, distribution and
marketing. 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. In 1946
the Cadburys manufacturing operations started in Mumbai, which was subsequently
transferred to Thane. In 1964, Induri Farm at Talegaon, near Pune was set up with a
view to promote modern methods as well as improve milk yield. In 1981-82, a new
chocolate manufacturing unit was set up in the same location in Talegaon. The
company, way back in 1964, pioneered cocoa farming in India to reduce dependence on
imported cocoa beans. The parent company provided cocoa seeds and clonal materials
free of cost for the first 8 years of operations. Cocoa farming is done in Karnataka,
Kerala and Tamil Nadu. In 1977, the company also took steps to promote higher
production of milk by setting up a subsidiary Induri Farms Ltd., near Pune.
In 1989, the company set up a new plant at Malanpur, MP, to derive benefits available to
the backward area. In 1995, Cadbury expanded Malanpur plant in a major way. The
Malanpur plant has modernized facilities for Gems, Eclairs, and Perk etc. Cadbury
operates as the third party operations at Phalton, Warana and Nashik in Maharashtra.
These factories churn out close to 8,000 tonnes of chocolate annually.
In response to rising demand in the chocolate industry and reduce dependency on
imports, Indian cocoa producers have planned to increase domestic cocoa production
by 60% in the next four years. The Indian market is thought to be worth some 15bn
rupee (0.25bn) and has been hailed as offering great potential for Western chocolate
manufacturers as the market is still in its early stages.
Chocolate consumption is gaining popularity in India due to increasing prosperity
coupled with a shift in food habits, pushing up the country's cocoa imports. Firms across
the country have announced plans to step-up domestic production from 10,000 tonnes
26

to 16,000 tonnes, according to Reuters. To secure good quality raw material in the long
term, private players like Cadbury India are encouraging cocoa cultivation, the news
agency said. Cocoa requirement is growing around 15% annually and will reach about
30,000 tonnes in the next 5 years.

Brief Introduction
Indian Chocolate Industry as today is dominated by two companies, both
multinationals. The market leader is Cadbury with a lion's share of 70%. The
company's brands like Five Star, Gems, Eclairs, Perk, Dairy Milk are leaders in their
segments. Untill early 90's, Cadbury had a market share of over 80 %, but its party
was spoiled when Nestle appeared on the scene. The other one has introduced its
international brands in the country (Kit Kat, Lions), and now commands approximately
15% market share. The two companies operating in the segment are Gujarat Cooperative Milk Marketing Federation (GCMMF) and Central Arecanut and Cocoa
Manufactures and Processors Co-operation (CAMPCO). Competition in the segment
will soonly get keener as overseas chocolate giants Hershey's and Mars consolidate to
grab a bite of the Indian chocolate pie.
The UK based confectionery giant, Cadbury is a dominant player in the Indian chocolate
market and the company expects the energy glucose variant of its popular Perk brand
to be singularly responsible for adding five per cent annually to the size of the
companys market share.

Market Capitalization

27

The Indian candy market is currently valued at around $664 million, with about 70%
share ($ 461 million) in sugar confectionery and the remaining 30% ($ 203 million) in
chocolate confectionery. Indian Chocolate Industry is estimated at US$ 400 million
and growing at 18% per annum. Cadbury has over 70 % share in this market, and
recorded a turnover of over US$ 37m in 2008.

Size of the Industry

The size of the market for chocolates in
India was estimated at 30,000 tonnes in
2008. Bars of moulded chocolates like amul, milk chocolate, dairy milk, truffle, nestle
premium, and nestle milky bar comprise the largest segment, accounting for 37% of the
total market in terms of volume. The chocolate market in India has a production volume
of 30,800 tonnes. The chocolate segment is characterized by high volumes, huge
expenses on advertising, low margins, and price sensitivity.The count segment is the
next biggest segment, accounting for 30% of the total chocolate market. The count
segment has been growing at a faster pace during the last three years driven by growth
in perk and kitkat volumes. Wafer chocolates such as kit kat and perk also belong to this
segment. Panned chocolates accounts for 10% of the total market. The chocolate
market today is primarily dominated by Cadbury and Nestle, together accounting for
90% of the market.

Major Players

Cadburys India Limited

Nestle India

Gujarat Co-operative Milk Marketing Federation

Cocoa Manufactures and Processors Co-operative (CAMPCO)

Bars Count Lines Wafer Panned Premium

28

Cadburys Dairy Milk & Variants

5-Star, Milk

Amul Milk Chocolate

Treat Perk Gems,

Tiffins Temptation & Celebrations

Nestle Milky Bar & Bar One.

Latest Developments

Chocolate-lovers may soon find their chocolate dearer if the problems

plaguing the industry continue. Raw material costs have risen by more than
20 % in the last few years. Although retail prices have not increased, a rise in
input costs will force the manufacturers to consider a price hike. The Bigger
players in the country such as Cadbury, which leads the Rs 2,500 crore
chocolate markets in India with a share of 72%, will find it easier to absorb the
surge in input costs as it has products at various price points in the market,
said industry experts. Cadbury may also opt for a price hike, albeit marginal, if
the current trend continues. Indian Chocolate Industrys Margin range
between 10 and 20%, depending on the price point at which the product is
placed. The input costs in India are under check owing to the 24% decline in

the prices of sugar.

The Worlds leading manufacturer of high quality cocoa and chocolate
products Barry Callebaut, has announced the opening of its first, state-of the

art, Chocolate Academy in Mumbai, India in July 2007.

According to the analysis of the international market intelligence provider
Euro monitor, the relatively small Indian chocolate market with volumes of
about 55,000 metric tonnes of chocolate and compound per year is expected
to grow on average per year by around 17.8% between 2008 and 2012.
29

Ferrero the Italian confectionery giant of $8 billion has planned up for a new
production facility in Maharashtra with an investment of over $125 million to
whip up some of its popular brands that include Rocher and Kinder.

Product Development
Idea Generation
In the late 1800s, Cocoa Essence was the beginning of chocolate as we know it today. With
Cadburys continued success in chocolate, George and Richard stopped selling tea in 1873.
Master confectioner Frederic Kinchelman was appointed to share his recipe and production
secrets with Cadbury workers. This resulted in Cadbury production of its own chocolate.
Cadbury manufactured its first milk chocolate bar in 1897 by blending milk powder with the
basic chocolate ingredients of cocoa butter, cocoa mass and sugar. The plentiful supply of
cocoa butter remaining after the cocoa was pressed made it possible to produce a wide variety
of new kinds of eating chocolate. These produced chocolates of Cadbury by today's standards,
the chocolate wasn't particularly good.Made of milk powder paste, cocoa mass, cocoa butter
and sugar, the first Cadbury milk chocolate bar was coarse and dry and not sweet or milky
enough to be a big hit. But, it didnt stop people of Cadbury to innovate more from their available
resources.
In the early, 1900s, Swiss manufacturers dominate the milk chocolate market with a product of
superior taste and texture produced by Daniel Peters of Vevey, using condensed milk rather
than milk powder. George Cadbury Jr. took this as a challenge to create his own chocolate bar
that can compete with the leading producers of chocolates in the market. He was set to develop
a chocolate product with more milk than anyone else on the market.

Idea Screening
Since the first produced chocolates of Cadbury didnt make a hit when it first hit the shelves,
they plan to develop a new product that would conform to the taste of people for chocolates.
Delicious, rich and creamy chocolates were the perceived to be the good ones since before.

Concept Development

30

In the early 1900s, George Cadbury Junior and experts at Bournville took on the Swiss,
researching new recipes and production methods.

By June 1904, the recipe was perfected and a delicious rich and creamy new milk chocolate
was ready for production. The first prototype created by Cadbury has its own distinctive
packaging.

In the early years, chocolate for eating was a novelty and the packaging was

primarily functional to ensure freshness and hygiene. Richard Cadbury himself was responsible
for creating the first designs for the beautifully illustrated chocolate assortment boxes of the
Victorian era. Elaborate chocolate boxes were designed with an after use very much in mind.

Market strategy
Cadbury dairy milk chocolate understands the new market which is targeted. First it selects the
targeted customers like Kids, Youths and then made products according to their needs.
Cadbury Dairy Milk Chocolate made by company which offers to specific market, specific
customers

and

to

all

types

of

customers.

Marketplace also selected by Cadbury Dairy Milk according to customer needs and
requirements. Cadburys target markets in mind in their development of their new product are
kids and adults. Adults of 21-29 year old females, but a great deal of interest comes from the 45
years+ consumer as well.

Feasibility analysis
Researches have been conducted by the owners itself in order for them to know if they will be
able to have a market for their product. They have prudently studied their expected competitors
when they enter the market. Observations have been made to tell them if they can compete or if
possible even out the leading manufacturers of chocolates that time. George have perfectly
known the preferences of consumers when it comes to chocolate eating and he used this in the
development of his improved chocolates.

Product design

31

Cadbury proudly boasted that its new milk chocolate was not
only "as good as," but better than the European milk
chocolate. With its now-famous glass and a half of full-cream
milk in every200gms, it contained far more milk than any
previously known chocolate. The special flavours produced
when fresh milk, cocoa mass and sugar are cooked together in
the first stages of the chocolate crumb making process give Cadbury Dairy Milk its unique taste.
When first introduced in the market, it already carries its color purple and until now, this iconic
color of Cadbury chocolate is one of the distinguishing characteristics of the product.

Test marketing
Because of rich and perfect recipe of Cadbury Dairy Milk that was introduced, it easily
gained acceptance in the market. They were able to put in actual what the people
searches for in a chocolate product.
Market entry
In June 1905, Cadbury launched its first Dairy Milk bar, using fresh milk in higher proportions
than previous chocolate bars, and it became the company's bestselling product by 1913. All
sorts of names were suggested: Highland Milk, Jersey and Dairy Maid. But when a customers
daughter suggested Dairy Milk, the name stuck. It was sold in unwrapped blocks that could be
broken down into penny bars.

Product life cycle

Cadbury Dairy Milk has adapted itself to the Indian market quite impressively. From making a
sweet eating nation to switch to chocolates to becoming the market leader, Cadbury Dairy Milk
has done it all because of the emotional connect it established with the consumers. Its
communication also always focused on the emotional aspects and feelings of life apart from
spontaneity. Its communication has always showcased its values and personality.
1. Introduction/birth: Sales are slow as the product is not yet known. Costs are high due to
heavy marketing spend to create awareness. Emphasis is on advertising and distribution. The
Cadbury Dairy milk was launched by Cadbury in 1905.

32

2. Growth: This stage shows

growing
and

market
increasing

acceptance
profits.

Competitors begin to enter the

marketplace.

The

business

concentrates

on

optimizing

product availability. The Cadbury Dairy milk is the market

leader in chocolate market with 30 % market share. Cadbury
Dairy Milk advertising has always depicted a rich tapestry of human emotions and relationships.
In the 1980s, it was positioned as 'the perfect expression of love', captured in memorable copy:
'sometimes Cadbury can say it better than words'. During the early1990s, Cadbury Dairy Milk
emphasized its international identity, communicating that it was the 'real taste of chocolate'. In
1994 came the path-breaking 'real taste of life' campaign. The ad featuring a woman running on
the cricket field celebrating the victory is still strongly etched in our mind even today. This
campaign created a dramatic shift in the way chocolates were perceived. Cadbury Dairy Milk
has increasingly become trapped as a reward or bribe for children and this campaign
unshackled the brand by re-positioning it to the 'free-child' in every adult. Cadbury Dairy Milk
redefined itself as the perfect expression of spontaneous, shared good feelings, providing the
'real taste of life' experience. The strategy paid off: Brand Cadbury grew by over 50% in sales
volumes.
Then in 1998, the next stage of growth for the brand dealt with popularizing consumption in a
social context, especially in more traditional settings like weddings. With the campaign
'Khaaneinwaallonkokhaaneinkabahanachahiye' featuring Cyrus Broacha, Cadbury Dairy Milk
aimed to substantially increase penetration levels. The campaign was launched in tandem with
the award winning 'Kuchhkhaashai...'campaign and the media strategy was to let the two coexist towards a common vision: 'A Cadbury in every pocket'. The brand penetrated into smaller
towns and sales volumes grew by 40% (Source: Internal Sales Data).
3. Maturity: The rate of sales growth slows down as the product has been widely distributed
and sold. The company now focuses on creating brand extensions and promotion offers to
boost sales. New product research is critical to ensure future sales. The Cadbury Dairy Milk Silk
chocolate range is an example of creating brand extensions brand at the maturity stage.

33

The worm
recall

controversy resulted in Cadbury's brand image taking a beating. They had to

a batch of chocolates. Instead of taking any short term measures, Cadbury used
this opportunity to take action and rebuild the trust of people. They
launched a project 'Vishwas' which educated retailers and wholesalers on
storage and other aspects apart from educating consumers.

The

other major step was to change the packaging.

The

company's repackaging exercise, which used a

combination of packaging technologies, was
unprecedented

in

the

category.

With

the

redesigned packaging in place, the company

decided to communicate the measures it had taken
to safeguard quality standards. To add credibility to its pitch, Cadbury took
recourse to Amitabh Bachchan's deep baritone. This was the first time that
a celebrity was used to endorse Cadbury Dairy Milk. The commercial did
wonders to consumer confidence.
A series of ads with Bachchan including "PappuPaas ho Gaya" to "Miss Palampur" brought
back the lost credibility of the people. With Bachchan they also launched their new positioning of
"KuchMeetha Ho Jaaye" bringing in the tradition of celebrating a joyous occasion in India with
sweets and now Cadbury Dairy Milk in particular.
The focus for a period shifted to taking the concept of "KuchMeetha Ho Jaaye" further. The
"PehliTareekh Hai" campaigns talked about the importance of having Dairy Milk and celebrating
on getting your pay on pay-day. The ads had a very retro-feel to it and did click with the
audience. But, it is the recent string of "ShubhAarambh" ads that have brought back the old
charm of Cadbury Dairy Milk with its very interesting insight of mixing the traditional with the
new age.
At this stage, the company never stops giving their product a constant quality. Growth is also an
undeniable focus of Cadbury. The reasons for sustained growth have been that we have
focused on power brands, Cadbury dairy milk, Bournvita et al.
The second big focus is distribution. These are impulse buy products so wide distribution makes
a lot of difference. So reach or quality of availability makes a huge difference. So clear focus
there has helped the company have great deal.

34

The third thing is focus on customer service and product freshness.

4. Decline: Sales slow down dramatically and profits fall off. The product may be dropped to
make way for new products and the cycle recommences. So far CDM has not reached at this
stage because of extension in maturity stage.

Process Selection
Method of Production
Cadbury world mainly produce chocolates in batch production, this is most convenient way that
the Cadbury can manufacture its products due to there being high a demand of chocolate and
the way that fixed amounts of chocolate is needed to make each individual chocolates, and
hence this is also a quicker method to make large amounts of chocolate. Mainly batch
production is used because Cadbury produce a wide variety, including sizes and flavor.
Although their main method of production is batch, Cadbury also offer job production as well.
They used this method when producing handmade or personalized goods (e.g. writing using
melted chocolate).
Cadbury also uses flow production to make hundreds of thousands of the same product, with
machinery moving each one along a production line. As Cadbury also uses batch production35

some machines are set to make different products during different shifts. Machinery is often
used on flow and batch product lines to make things quicker and reduce human error. This is
called automation.
Cadbury Crme Eggs are made using automated flow production:

Melted chocolate is poured into special half-egg molds.

The molds move down the production line where they are filled with the fondant egg

white.
The half eggs move to another section where the fondant egg yolk is added.
The tops of the eggs are put on each egg, and they are individually wrapped.

HOW CADBURY CHOCOLATE IS MADE

The following steps define a detailed process of how chocolate is made at various factories of
Cadbury globally. The process starts from harvesting of Cocoa beans to molding in the final
shape.

THE SEED HARVEST

The Cacao tree grows to 15 meters, but cultivated ones are usually kept down to 6 meters to
make it easier for people to harvest the fruit. In addition. The lower branches are all removed to
allow workers to move through the grove easily.

Cacao Pod:
36

The large colorful fruits (Cacao Pods) grow close to the tree, different varieties vary significantly
in shape, texture and color. A ripe pod can be left on the tree for 2 or 3 weeks without spoiling,
allowing plantations to harvest every couple of weeks instead of daily although it will not open
and lose its seeds, when overripe. It is important for the flavor that it is harvested only when
ripe.
The tree flowers and fruit at the same time, there are always flowers and always ripe pods, so
harvesting is done almost year round, although there are generally two peak times in the year
and the main harvest is near end of wet season. The pods are harvested by hand using a
machete. Great care must be taken since leaves and stem sprouts grow where the fruits were,
the continued growth of the tree depends on avoiding damage to the chupon. It is not possible
to harvest the pods by machine.
The harvested pods are taken to a processing location very close to the trees usually a few
meters away, and each fruits is opened with a machete, a whack from a piece of wood or even
by knocking two pods together, so that the pulp and seeds can be removed. The seeds are
surrounding by a sugary mucilaginous substance that must be fermented off before they can be
roasted and processed.

Cocoa Pods and Beans

The cocoa tree bears two harvest of cocoa pods per year. Around 20cm. in length and 500
grams in weight, the pods ripen to a rich, golden orange color. Within each pod there are 20-40
purple, 2cm. long cocoa beans covered in a sweet white pulp.
Cadbury buys quality cocoa beans from Indonesia, Malaysia and Ghana. The raw beans
undergo a lengthy process to prepare them for chocolate making.

Type of Cocoa Pods

There are three broad types of cocoa- Forastero and Criollo, as well as Trinitario, a hybrid of the
two. Within these types there are several varieties.

37

 Forastero
Producing the greater part of all cocoa grown, Forastero is hardy and vigorous,
producing beans with the strongest flavor. The Forastero variety most widely grown in
West Africa and Brazil is Amelondaro. It has a smooth yellow pod and pale purple beans.
Criollo
With its mild or weak chocolate flavor, Criollo is grown in Indonesia, Central and South
America. Criollo trees are not hardy and produce a softer red pods, containing 20-30
whites, ivory or very pale purple beans.
Trinitario
Plants are not found in the wild as they are cultivated hybrids of the other two types.
Trinitario cocoa trees are grown mainly in the Caribbean, but also in Cameroon and
Papua New Guinea. The mostly hard pods contain 30 or more beans of variable color,
though white beans are rare.

HARVESTING AND SPLITTING COCOA PODS

The harvesting of cocoa pods is very labor intensive. On West African small-holdings the whole
family, together with friends and neighbors help out.
Ripe pods are gathered every few weeks during the peak season. The high pods are cut with
large knives attached to poles, taking care not to damage nearby flowers or buds. The pods are
collected in large baskets, which workers carry on their heads and piled up ready for splitting.

38

There are generally 50 to 60 small (3 cm x 1.5 cm) purple seeds in each pod although that can
vary considerably from 20 to 100. The Criollo variety has the few seeds. The seeds can be kept
for up to 24 hours after removal from the pod. The raw seeds are tough and bitter- fermenting
brings the aroma and taste as well as cleaning off the residue of the pulp. Before fermenting,
the seeds themselves are also split opened. The pods are split open by hand and the seeds or
beans, which are covered with a sweet white pulp or mucilage. The opened seeds are spread in
large heaps, often right next to the grove of trees they came from.

PROCESSING THE COCOA BEANS

Processing cocoa beans ready for chocolate making involves six main steps:

FERMENTATION
The beans are fermented. There are two main methods of cocoa bean fermentation: Heap and
Sweating. In West Africa, the Heap method is used. The cocoa beans are piled upon a layer of
banana leaves, with more leaves placed on top to cover them. They are then left for five or six
days to ferment. During fermentation the pulp and astringency of the beans are removed as the
sugar in the pulp turns to alcohol and vinegar-like liquids, which drain away and the true
chocolate flavor starts to develop.

39

Sweating boxes method is followed in large plantations in the West Indies, Latin America and
Malaysia, strong wooden boxes with drainage holes or gaps in the slats in the base are used,
allowing air and liquid to pass through. This process take 6-8 days during which time the beans
are mixed twice.
In Nigeria, cocoa is fermented in baskets lined and covered with leaves. The fermenting seeds
need air and create heat, so batch must be turned several time during the process. The purple
seeds turn brown during the fermentation period. Fermentation takes about a week- although
depending on climate and variety it can be as little as 2 days or as much as 10; the Criollo
variety ferments for very short time, Forester for the longest.

Heap Method

Sweating Boxes Method

DRYING AND BAGGING

40

When fermentation is complete, the wet mass of beans is dried, either traditionally by being
spread in the sun on mats or using special drying equipment. The cured beans are packed into
sacks for transportation to Singapore, where we process the beans. After quality inspection they
are shipped to the processing factory in Singapore, which produces the basic ingredients from
which Cadbury chocolate products are made.
On arrival at the factory, the cocoa beans are sorted and cleaned.

CLEANING PROCESS

The dried beans are cracked and a stream of air separates the shell from the nib, the small
pieces used to make chocolate this process is called winnowing. The beans are then dried to six
to eight percent moisture level in sun of artificial dryers. The dried beans are cleaned sorted
roasted. Before the real processing begins, the raw cocoa is thoroughly cleaned by passing
through sieves, and by brushing. Finally, the last vestiges of wood, jute fibers, sand and even
the finest dust are extracted by powerful vacuum equipment.
41

Roasting

The photo shown above is one of the types of roasting machines used at Cadbury Bourneville. It
resembles an ordinary coffee roaster, the beans being fed in through a hopper and heated by
gas in the slowly revolving cylinder. The beans can be heard lightly tumbling one over the other,
and the aroma round the roaster increases in fullness as they get hotter and hotter. The
temperature which the beans reach in ordinary roasting is not very high, varying round 135 C
(275F), and the average period of roasting is about one hour. The amount of loss of weight on
roasting is considerable (some seven or eight percent), and varies with the amount of moisture
present in the raw beans. The actual roasting time depends on whether the end use is for
cocoa or chocolate.
During roasting, the cocoa nibs darken to a rich, brown color and acquire their characteristic
chocolate flavor and aroma. This flavor however, actually starts to develop during fermentation.
Roasting develops the characteristic flavor, after roasting the beans are passed through
corrugated rollers to break their shells and removed winnowing. The cotyledons are known as
nibs. These nibs are used for manufacturing of cocoa and chocolate.

Blending
Before grinding, the crushed beans are weighted and blended according to special recipes. The
secret of every chocolate factory lies in the special mixing ratios which it has developed for
different types of cocoa.

Grinding
The roasted nibs are ground in stone mills until the friction and heat of the milling reduces them
to a thick chocolate-colored liquid, known as 'mass', chocolate liquor or bitter chocolate. It
42

contains 53-58% cocoa butter and solidifies on cooling. This is the basis of all chocolate and
cocoa products.

Pressing
The cocoa mass is pressed in powerful machines to extract the cocoa butter, vital to making
chocolate.
The solid blocks of compressed cocoa remaining after extraction (press cake) are pulverized
into a fine powder to produce a high-grade cocoa powder for use as a beverage or in cooking.
The cocoa mass, cocoa butter and cocoa powder are then quality inspected and shipped to our
factories in Australia and New Zealand, ready to be made into chocolate.

The rest of the production process is same for both the dark chocolate and milk
chocolate however differences lies in the mixing of both of them. The dark chocolate is
mixed with sugar and extra cocoa butter while milk chocolate is mixed with full cream
milk and sugar.

Mixing Of Dark Chocolate

To make dark chocolate, cocoa mass is sent from Ghana to Cadburys chocolate factories. Its
mixed with extra cocoa butter and sugar.
Composition of dark chocolate
Plain dark chocolate

Cocoa Powder
Cocoa Liquor
Cocoa Butter
Sugar
Lethicin
Vanilla

Mixing Of Milk Chocolate

Composition of Milk Chocolate

43

Milk chocolate

Sugar
Milk Powder Or Milk
Cocoa Powder
Cocoa Liquor
Cocoa Butter
Lethicin
Vanilla

The cocoa mass is sent to the Cadbury Milk Factory. There it is mixed with sugar and fresh full
cream milk, which has already been condensed into a thick liquid to form chocolate liquor.
The amount of cocoa butter added depends on what the chocolate is for- bar chocolate needs
to be thick, but if its to cover assortments and bars with different centers, thinner chocolate is
used. In the UK up to 5% vegetable fat is added too- this stabilizes the chocolate and gives the
ideal texture to ensure that the melting properties of the chocolate are precise and preserve the
taste and ideal texture of the chocolate.

Dried In Vacuum
The special flavors are produced when fresh milk, cocoa mass and sugar are cooked together
in the first stages of the chocolate crumb making process giving Cadbury Dairy Milk its unique
taste.
The mixture is dried in vacuum ovens to become milk chocolate crumb. Chocolate crumb is a
vacuum-dried mixture of cocoa solids, milk, and sugar; at most chocolate factories in the world,
it is the base product for making various chocolate products. The crumb is taken to Cadburys
manufacturing factories and milled between enormous rollers before extra cocoa butter and
special flavorings are added. Cadbury manufactures huge amount of chocolate crumb and ship
it to different locations overseas, which is then used in the chocolate manufacturing process in
other Cadbury factories.
A fleet of tankers deliver over 250 tonnes of chocolate crumb form Marlbrook and 50 tonnes of
cocoa butter form Chirk, to Cadburys Bourneville chocolate factory every day.

Conching
44

Next, the milk chocolate needs to be conched.

The process of conching involves rolling and
kneading so that the chocolate becomes silky
smooth. The conching machines, so-called
because

the

original

designs

resembled

seashells, kneads and massages the chocolate

mixture for 24-60 hours at 110 degrees. The
speed, temperature and the length of the
conching process determines the final texture
and flavor of the chocolate, as conching smooths the chocolate and mellows any remaining
acidic tones.
The conching process redistributes into the fat phase the substances for the dry cocoa that
create flavor. Air flowing through the conche removes some unwanted acetic, propionic and
butyric acids from the chocolate and reduces moisture. A small amount of moisture greatly
increases viscosity of the finished chocolate, so machinery is cleaned with cocoa butter instead
of water. Some of the substances produced in roasting of cocoa beans are oxidized in the
conche, mellowing the flavor of the chocolate.
The temperature of the conche is controlled and varies for different types of chocolate.
Generally higher temperature leads to a shorter required processing time. Temperature varies
from around 49 C for milk chocolate to up to 82 C for dark chocolate. The elevated
temperature leads to a partially caramelized flavor and in milk chocolate promotes the Maillard
reaction.
The chocolate passes through three phases during conching. In the dry phase, the material is in
powdery form, and the mixing coats the particles with fat. Air movement through the conche
removes some moisture and volatile substance, which may give an acidic note to the flavor.
Moisture balance affects the flavor and texture of the finished product because after the
particles are coated with fat, moisture and volatile chemicals are less likely to escape.
In the pasty phase, more of the particles are coated with fats from the cocoa. The power
required to turn the conche shafts increases at this step.
The final liquid phase allows minor adjustment to the viscosity of the finished product. Fats and
emulsifiers are added to adjust the viscosity, and thoroughly mixed.
45

Tempering
Tempering means improving the consistency, durability or hardness
pf a substance by heating and cooling it. Tempered chocolate is very
glossy, has a firm finish and melts smoothly at around body
temperature. Tempering is the final crucial and complex stage which
involves mixing and cooling the liquid chocolate under carefully
controlled conditions to ensure that the fat in the chocolate
crystallizes in its most stable form. Highly sophisticated machinery
has been developed for this process.
Tempering of chocolates is done by melting solid chocolate to a temperature high enough that
the crystals in the cocoa butter break down. This temperature is between 110-120 0F. Once the
chocolate is fully melted, it must be cooled to about 82 0F, a temperature at which crystals will
start to form again so that the chocolate can eventually re-solidify. The chocolates temperature
is then raised back to about 900F, where it is very fluid and can be poured into chocolate molds
and used for other applications. Tempering provide the necessary structure for the chocolate to
become shiny, smooth and have a good snap when it is set.

Moulding

Bars of chocolate like Cadbury Dairy Milk, are called moulded products because chocolate is
poured into a mould to make them. Liquid chocolate is poured in, shaken (to make sure it fits
the mould perfectly and to remove any air bubbles).
In the factory the method used is to place the moulds on rocking tables which rise gradually and
fall with a bump. These vibrating tables are worked by means of ratchet wheels. Ratching tables
are made which are silent in action, but moulds jerkily dancing about on the table make a very
46

lively clatter. During the shaking-up the chocolate fills every crevice of the mould, and any
bubbles, which if left in would spoil the appearance of the chocolate, rise to the top. The
chocolate then passes on to the endless band which conducts the mould through a chamber in
which cold air is moving. As the chocolate cools, it solidifies and contracts so that it comes out
of the mould clean and bright.
Sixty four thousands eight hundred (64, 800) bars can be wrapped in 1 hour. Quality checks are
built in at the end of the production process before packing. Cadburys clever machinery is able
to automatically check unmoulded chocolate bars for appearance, shape and weight.

Supply Chain Management

Industry uses a wide range of raw materials in
manufacturing chocolate products, the main
ones being cocoa beans, sugar and other
sweeteners(including artificial sweeteners
such

as

aspartame),dairy

products

(including milk), gum base and fruit and

nuts. Cadbury buys its raw materials from
suppliers around the world. No single
supplier accounts for more than 10% of
their raw material purchases.
To make the final product of dairy milk the
Cadbury needs the raw materials. To full fill its basic requirement Cadbury India takes help of local
vendors. They do agreements or contracts on annual basis and then local vendors supply them
these raw materials as per requirements. Apart from the cocoa beans which are extremely important
for aromatic taste for the Cadbury dairy milk it is imported. The pure variety of the Criollo tree is
found mainly in its native Equador and Venezuela. The seeds are of finer quality than those of the
Forastero variety.
The company supplies the local market through its local production units. Cadbury India has five
factories, located in Thane, Pune, Induri and Malanpur in West India, and Baddi in North India.
Cocoa is one of the major raw materials used by the company, and is procured mainly from
plantations in South India, in the states of Kerala, Tamil Nadu, Karnataka and Andhra Pradesh.

47

All cocoa operation done by Cadbury is carried in

Tamil nadu. Generally Cadbury India make a
contract with the local framers to supply them a
cocoa for the production of the all Cadbury
products.
All items used in the production process of
Cadbury are very perishable in nature it cant be
stored for longer time not even two to three days
also if the raw material is not used in time then the
product may have bad and unhealthy effects.
The company exports its products to Sri Lanka,
Dubai, the US and the Maldives.

Cadbury India is not known to be involved in third party manufacturing.

Cadbury has direct control over what happens in the transformation stage of its own process
and can also influence the behaviour of suppliers and distributors. It performs due diligence on
potential suppliers by requesting them to complete a
questionnaire prior to engagement.
This enables Cadbury to monitor a supplier and
check they adhere to stringent standards in particular
criteria. One criteria, for example, may be the
environment and the questionnaire allows the
supplier to express whether they carry out audits or
have an environmental policy.
Cadbury deals with tens of thousands of suppliers around the world and aims to work closely
with them to ensure they receive fair treatment.
In the case of cocoa farmers for example, Cadbury is a member of a global coalition, which is
comprised of industry, governments, non-government organizations and special interest groups
created to improve working practices on cocoa farms. The coalition has funded independent
48

surveys into cocoa farming in West Africa that have contributed to the development of programs
to help local communities. In 2003, the coalition also established a foundation, the International
Cocoa Initiative - Working towards Responsible Standards for Cocoa Growing, which aims to
support field projects and will act as a clearinghouse for best practices to ensure that cocoa is
grown responsibly.
The work of the coalition, however, is only one way to support cocoa farmers and their families.
Another practice is Fair Trade. Under this scheme cocoa is paid for at a fixed minimum price
with a premium going to the farmer co-operatives in exchange for using the Fair Trade logo and
accreditation. Presently, a modest amount of cocoa goes to the Fair Trade market. This scheme
works best when farms have access to communications and warehousing facilities. Many farms,
however, are family owned operations in remote areas and access to a Fair Trade co-operative
group may be difficult so the coalition is working to ensure these farms can benefit from the
work that it does.
It is Cadbury aim to help all cocoa farmers improve their standard of living by helping them
develop sustainable crops of quality beans. In Ghana, for example, where Cadbury buys most
of its cocoa, the company supports farming communities through programmes on sustainable
tree crop management and building wells for drinking water.

Growth Prospects & Consolidated Market

Indias chocolate market has been growing at an annual compound growth rate (CAGR) of 15%
in the last three years to reach INR 52bn ($851m) in fiscal 2014. Value Notes expects the
industry will grow at CAGR of 16% over the next five years to reach INR 122bn ($2bn) by fiscal
2019.
Demand for premium chocolate is expected to outpace medium and low priced chocolates, but
the premium segment is becoming highly competitive.

Sustainability focus of the company

49

Cocoa farming is another sustainability area that they focus on. The company introduced cocoa
farming in the country. They have a separate wing of people working to ensure farmers grow
cocoa and are remunerated well. The manufacturing still imports half our cocoa from Africa and
Middle Eastern countries.
Cadbury India targeted to plant five million trees a year. Reason why it is good for farmers is
that cocoa does not require fresh land and grows as an intermediate crop in coconut fields. It
also helps increase soil fertility. So the farmer gets double income from the same piece of land.

Suppliers and Business Partners:

Continue using Ethical Sourcing Standards when working with suppliers
Continue to engage in regular dialogue with its suppliers and responds to their suggestions
Continue evaluating potential suppliers against a set of standards such as environmental
Protection and ethical labor practices prior to doing business with them

Custom
50

External Distributors
(RK Foodland

Retail

Internal
Functions

External
Suppliers

Factories (Processing and Packaging

facilities):
Thane
Malanpur
Baddi
Induri
Sri City

Cocoa beans
Cocoa plantation
(Tamil Nadu)

Milk
Induri farms Ltd.

Other raw
materials

Purple Goes Green

51

Cocoa Life is a holistic, verified program created by Mondelz International and partners.
Mondelz International is the worlds largest chocolate company. We are committed to working
to transform the lives and livelihoods of cocoa farmers and their communities, and to inspiring
the next generation.
OUR NON-NEGOTIABLE PRINCIPLES: COCOA LIFE IS...
1. Farmer-Centric Cocoa Life listens to and empowers farmers and cocoa communities. It's our
aim that cocoa farming becomes a livelihood that lifts people out of poverty and that cocoa
communities become desirable places for the next generation to live. A sustainable cocoa
supply begins with thriving farmers.
2. Committed to Partnerships Cocoa Life joins forces to build and implement the program. By
creating partnerships with governments, non-government organizations, supply chain partners,
and communities, we can support Cocoa Life communities in finding real solutions that lead to
measurable transformations. Partnership is the key to lasting change.
3. Aligned with Our Sourcing Cocoa Life upholds its principles throughout the supply chain. We
strive to ensure that all of our partners, along all of our supply chains, support our approach.
Integrity and accountability are as important as sun and water.
In India "Cocoa Life" reaches out to 100,000 farmers in 4 states in South India
The program it is helping coconut farmers to plant cocoa as an intercrop in Tamil Nadu, Andhra
Pradesh and Karnataka. While cocoa is grown mainly as an intercrop with coconut in Tamil
Nadu it is also grown as an intercrop with arecanut in Karnataka and with Oil palm in Andhra.
In addition to the 3 states, the program also reaches out to farmers in Kerala where cocoa is
grown as a mixed crop since the late sixties.
Mondelez India Foods Private Limited (Formerly Cadbury India Ltd.) currently runs 11 latest
nurseries spread across 4 states in an effort to provide seedlings easily to farmers. The seeds
are provided at a subsidized rate to farmers and Mondelez India Foods Private Limited
(Formerly Cadbury India Ltd.) also provides free technical know-how to farmers, conducting
over hundreds of farm demonstration meetings every year.

52

Our Cocoa Life program marks a perfect combination of our business and sustainability goals,
providing us an opportunity to achieve self-sufficiency in the production and procurement of
cocoa beans while making a meaningful difference in the community.

Cocoa grows well in the interspaces between coconut trees that otherwise is unused land.
Cocoa is less labor intensive compared to many other horticultural crops. This enables a farmer
to earn additional income without much investment on inputs and labor and without an
investment on land. Another very important aspect of Cocoa is that it is a perennial crop that
lasts for 30-50 years continuously yielding the farmer additional income throughout the year.

Origin

Cocoa, botanically known as being a tropical crop is native to Amazon basin and spread to other
countries within 15 degrees on either side of the equator including Mexico, Central America,
Caribbean Islands, South America, West Africa and South East Asia where the conditions for

53

growing were ideal. West Africa dominates the world production today followed by South East
Asia.
Entry In To India
India is relatively a new entrant in to the world of cocoa cultivation. Cadbury initiated cocoa
cultivation as a viable cash crop in India through a demonstration farm at Chundale in Wyanad
district of Kerala in 1965. Planting of cocoa in India on a commercial scale was taken up from
the early 1970s onwards with Mondelez India Foods Private Limited (Formerly Cadbury India
Ltd.) giving the free planting material and technical knowhow to the farming community. Central
Plantation Crops Research Institute (CPCRI) started research on cocoa in 1972 and Kerala
Agricultural University (KAU) followed in 1979. Mondelez India Foods Private Limited (Formerly
Cadbury India Ltd.) has been partnering the research at KAU for the last 20 years. In 2008, we
also partnered with Tamil Nadu Agricultural University (TNAU) to help promote cocoa cultivation
in the state.

Mondelez India Foods Private Limited (Formerly Cadbury India Ltd.) Role in
Indian Cocoa

a) Pioneering Effort
Though cocoa is believed to have been introduced into Sri Lanka and India in the 18th century,
1965 marked the turning point for cocoa in India, when Mondelez India Foods Private Limited
(Formerly Cadbury India Ltd.) pioneered Cocoa cultivation by establishing a demonstration farm
at Wyanad in Northern Kerala. The company offered cocoa seedlings at subsidized prices to the
farmers and free technical advice on the cultivation practices. Thus, planting of Cocoa was

54

taken up in Kerala, Coastal Karnataka and parts of Tamil Nadu initially and later spread to the
state of Andhra Pradesh.
b) Research on Cocoa
In addition to being involved in cocoa research in its own plantation for long, Mondelez India
Foods Private Limited (Formerly Cadbury India Ltd.) has been associated with KAU and funding
the research from 1987 in the areas of importing germplasm from Reading University, UK, the
world renowned quarantine station, maintaining germplasm, selection for high yield, desirable
bean characteristics and disease resistance, hybridization for evolving superior varieties with
desirable characters, breeding programs for disease resistance, standardization of farm
practices, rejuvenation techniques and Hybrid Seed garden for cocoa area expansion.
Being an introduced crop (not native), spectacular increase in yield and other desirable
characteristics through breeding is possible only by building a strong genetic base. Hence, the
effort to import germplasm form UK was initiated and KAU today boasts of having the largest
number of germplasm in the country. Hybridization is essentially combining accessions in
germplasm with special attributes as parents that would yield progeny with exceptional
characteristics. Hybridization is done towards achieving high yield, improved quality and disease
tolerance and field trials are conducted before introducing the same for commercial
multiplication.
Since 2008, an agreement has been signed with TNAU with research focus on germplasm
enrichment, hybridization program, agronomy, environmental science and biotechnology tool
C) Cocoa extension program
Mondelez India Foods Private Limited (Formerly Cadbury India Ltd.) Cocoa department
produces over latest million hybrid seedlings annually and distributes among farmers in Kerala,
Andhra, Tamil Nadu and Karnataka. Mondelez India Foods Private Limited (Formerly Cadbury
India Ltd.) technical staff travel all over the cocoa growing areas giving farmers advice and
assistance in all aspects of cocoa cultivation. Mondelez India Foods Private Limited (Formerly
Cadbury India Ltd.) adopts innovative training approach through seminars and field
demonstrations similar to farmers field school (FFS) developed by FAO to impart knowledge of
good agri practice (GAP) about cocoa cultural practices to farmers. It is an interactive and
knowledge oriented approach to improve farm management increasing productivity and farmers
55

income. Farmers are encouraged to share their experience for the benefit of all. The challenge
is to reach more farmers and motivate them to take up cocoa cultivation. It is heartening to note
that knowledge transfer has taken place to over 100,000 cocoa farmers through a dedicated
team of 60 full time employees. The testimony of this lies in the fact that the productivity per tree
in India is at over 1.1 kg which is amongst the best in the world.
Farmer communication is an important part of the cocoa extension program. Mondelez India
Foods Private Limited (Formerly Cadbury India Ltd.) cocoa operations team has developed
number of printed material for farmers on cocoa cultivation techniques as well as videos. There
is also an extremely successful television program for farmers in Tamil on cocoa cultivation that
is running in a local television channel.

D) Post Harvest Farm Processing

Proper fermentation of beans after harvesting and opening of pods followed by sun drying only
will ensure the beans meet the quality requirements of the user industries. In Kerala and
Coastal Karnataka, buyers need to do fermentation and sun drying elsewhere as the average
land holding is small resulting in inadequate quantities coupled with continuous rain during most
part of the year hindering farm-gate processing. However, in Andhra and Tamil Nadu the
fermentation and sun drying are done in the farm itself.
Mondelez India Foods Private Limited (Formerly Cadbury India Ltd.) technical team advises and
assists the farming community in the primary processing of Cocoa in the farms immediately on
harvesting.
E) Procurement
Mondelez India Foods Private Limited (Formerly Cadbury India Ltd.) with its well established
network procures cocoa in all the cocoa growing areas. A healthy competition exists for the
56

commodity from many other users and traders. The prices have been remunerative to the
farmers and cocoa offers a fairly steady price levels ensuring profits to the farmers. The demand
has been steadily increasing over the years opening more avenues for the expansion of this
crop in to newer territories.

Community Activities
Farming, community, livelihoods, youth and environment form three pillars of the Cocoa Life
program. The Mondelez India Foods Private Limited (Formerly Cadbury India Ltd.) cocoa
operations team has been working closely with the cocoa farmers supporting not only the
farming and livelihood pillars but also investing in the community. Over 1000 children across five
schools in cocoa communities have benefitted from desk / benches and water supply
infrastructure making school attendance a comfortable experience.
On the occasion of our Founders Day celebration, four schools were provided with learning
material and nutrition education across the four cocoa growing states benefitting over 200
children. Cocoa Life is a holistic, verified program created by Mondelz International and
partners. Mondelz International

Distribution
Cadburys brands are available in over a million outlets
across the country. Cadbury is also focusing intensively
on achieving distribution equity. Though it takes much
more time and effort to build, but once built, distribution
equity is hard to erode. With technology and competitive pressure slash
in it is becoming increasing difficult for marketers to retain a unique product differentiation for
long period. In a product and price parity situation, the brand that sells more is the one that
reaches the highest number of customers.
To tap this huge potential Cadbury's distribution channels include the manufacturing
warehouses where the chocolate production takes place. This is followed by wholesaler & then
followed by retailer.
Due to 65 years of presence in India - has deep penetration- 2,500 distributors; 550,000
retailers, 60 mid urban (22%) customers. The modern trade is handled separately.

57

The company aims to keep within acceptable limits the fuel consumption and air emissions that
result from transporting its products.
Distribution for Tamil Nadu is from Chennai. There are a total of four dealers for Cadbury in
Madurai city.
The area separation for the dealers to operate is decided by the Cadbury office in Chennai.
Earlier during the 1980s there existed only one supplier and currently and the sales and
demand for Cadbury chocolates increases the number of dealers set up by Cadbury has
increased to 4.
Nearly 60% of sales for the dealers are from medium to large super markets which average at
only 40 shops for the total number of shops dealt. This shows that high volume of sales in
retailing is from large stores and food outlets such as bakeries.
Installed coolers and vans:
Cadbury installed coolers and vans within its distribution network. This system helps in the season of
the summer as it helps to prevent quality of Cadbury.

Problems Encountered With Distribution

Although reports said that the infrastructure had improved in rural areas in India, Eguvanti said
that the retail environment was still largely made up of small tin shacks.
In the deepest rural areas, you dont see a supermarket at all, she said.
The ValueNotes project manager said that Tesco and Walmart had both tried to enter rural India,
but had faced resistance from Mom and Pop stores. Spencers, More, Reliance Mart are other
established retailers in the country but Eguvanti said it was unlikely they would venture into rural
India due a limited distribution network.
She added that manufacturers needed to think carefully about access to cool storage in remote
regions.
Only 35% of rural India has electricity and the villages that do face load shedding problems,
which could be a major problem for retailers stocking chocolate, particularly in the summer
months. Many also dont have access to telephones or mobile phones, making it difficult for
manufacturers to take orders from retailers and distributors.

58

Retail outlets:

Shops And Supermarkets

Restaurants And Caf

Cinemas And Theatres Theme Parks

A schematic representation of the entire distribution channel:

Manufacturing
As a major international company Cadbury Schweppes recognizes its environmental
responsibilities and the need to care for its workforce, local communities and all those who may
be affected by its activities. For example, its environmental responsibilities include:

Treating waste water prior to disposal

Looking to improve its energy efficiency

Controlling the release of gases into the atmosphere.

59

New technologies used by Cadbury

After the pesticide case that happened with Cadbury it went through allot of changes in supply
change process of the product. The new technologies it used are as follows:New package form: after this incident took place the company in the year 2004 announced that
the packaging of its dairy milk chocolate will be completely changed. It said that the chocolates
will be now packed in a wrapper which is said to be impenetrable.
Direction to the consumer: the company now states all the information on the wrapper of the
product that will lead to its contamination. It specifically states the minimum temperature needs
to be maintained for the best results.
Use of new software: the company uses new software such as the SKEP solutions by DynaSys
and other software named SAP in 1999, these software help the company in providing supply
chain planning solutions to the company.
Use of better storage facilities: due to the perishable nature of the product the company has
now focused on its storage. Now even during the transportation of the chocolates from the
factory to the distributors the transportation is done in cold storage vans. This avoids any risk of
the product getting harmed in any way.

Logistics
Cadbury India, the Indian unit of the Mondelez, has outsourced its entire supply chain
operations of its chocolate, beverage and confectionery businesses for north India to third-party
logistics service provider Radhakrishna Foodland (RK Foodland). RK Foodland has also
partnered

with

firms

such

as

McDonalds

and

Subway

in

India.

This is the first time any FMCG major has outsourced operations of an entire region to a thirdparty logistics (3PL) firm on an end-to-end basis. The outsourced supply chain operation
includes that for its Dairy Milk chocolates, Bournvita malted beverages and Oreo biscuits
businesses.
Indian operations are divided into four regions north, south, east and west with regional
head

offices

in

Delhi,

Chennai,

Kolkata

and

Mumbai,

respectively.

According to the Council of Supply Chain Management Professionals, 3PL is defined as a firm
60

that provides multiple logistics services for use by customers. Preferably, these services are
integrated, or bundled together, by the provider. Among the services
provides

are

transportation,

warehousing,

3PL

cross-

docking, inventory management, packaging, and freight

forwarding. Progressively the multinational companies
are focusing on core competencies that are related to

branding

and

manufacturing. The other aspects are outsourced to third parties, said Harish Bijoor, chief
executive

officer

(CEO)

at

consulting

firm,

Harish

Bijoor

Consults.

RK Foodland will take care of warehousing, transport and value-added services such as
inventory planning for Mondelez operations in India, according to senior executives, who spoke
to Financial Chronicle, on condition of anonymity. The supply chain activities will include
everything related to stocking and supply of finished goods to distributors and retailers in the
region. RK Foodland will operate in eight states in the region, said at least three senior company
officials.
The chocolate major made the decision of outsourcing its northern region supply chain with a
player with expertise in food as items such as chocolates require a cold chain to ensure the
taste and form is preserved till it reaches the customer. Cadbury India wanted to give it out to a
player with the capability of managing the entire scale and invest to develop the supply chain.
The biggest saving of the company would be in terms of maintaining the product, reducing
shrinkage

and

inventory,

said

senior

company

official.

RK Foodland is a pan-India supply chain management specialist, mainly in food category. Its
clients include leading FMCG players such as Subway, Pepsico, Bharti-Walmart, McDonalds
and Sodexho. Cadbury India is investing heavily in sales infrastructure such as visi coolers
(refrigeration systems that allow ease of display of chocolates) and chocolate dispensers, said a
senior company executive.
RK Foodland approach:

61

Quality
Management
Stock Control
Cadbury, use Just-in-time as their method of stock control. Cadbury carry stock of packaging
materials for the next two to three days. JIT systems keep the stock levels to a minimum and
rely on the delivery of materials just when they are needed.
They have large amount of crumbs delivered each day and fresh milk and eggs. They use this
method as with chocolate and food products they have a sell-by date, therefore they cannot
afford to keep large amounts of food products, as they will go off. Also Cadbury regularly change
their packaging.
Gains of Just-in-Time

Reduce Cost
By using JIT product line, the inventory of Cadbury reduced from $670,000 to $200,000
Improve the productivity
Because of reducing stock holding, Cadbury was able to cut the assembly time by over
95%
Improve of the competitive advantage

62

JIT creates a more flexible business that has better communication with customers and
suppliers, and can react more quickly to market demands, which bring more competitive

advantages for Cadbury.

Improve job satisfaction
JIT demands active participation in the production process from employees. It increases
their skills, gives them greater responsibility and fosters an interest in the performance of
the whole company.

Quality Control
In 1924, Edward Cadbury outlined his first rule of success, the best quality- nothing is too good
for the public. He had philosophy of maintaining a right at first time culture that consistently
embraces quality and food safety.
In the older days of chocolate production the only way that the standard of the chocolate would
be measured is by taste testing it, this is known as the traditional method. Even today the
traditional method is still being followed, although there are often meetings of workers discuss
the quality of the chocolate, and what they can do to improve and raise their standards. The
every 20 minutes a chocolate bar is taken from each batch that is being produced will be
checked for their appearance and taste.
Hazard Analysis Critical Control Points (HACPP)
Cadbury uses a system called Hazard Analysis Critical Points (HACPP). This helps to identify
what could go wrong in the production process (e.g. biological, physical, and chemical hazards),
and to put in place strict quality control checks called critical control points (CCPs) at key
production stages that make sure that the product is safe.
Other checks might not be to do with safety, but are put in place to make sure that the product
always has exactly the same appearance, taste, aroma and texture. Quality control checks
might include visual, weight, temperature, microbiological, pH, chemical, and metal checks, as
well as organoleptic checks (sampling the final product to check its flavor, aroma and texture).
Cadburys plants operates 24 hours a day, producing products to the highest standards of
quality control.

Total Quality Management (TQM)

63

Cadbury also monitors the production process by using the total quality management to ensure
that the chocolate/products that are produced are of high quality and meet the needs of the
customers. This is vital for Cadbury because they produce chocolate products mainly which has
a lot of substitutes, this means that the customers could lose interest in Cadbury products if their
demands are not met or thought about.
To enforce total quality management Cadburys has supervisors that monitor the machines, the
other workers and the products that are made. TQM ensures that the products that Cadbury
produces taste good to the customers, is appealing to the customers, customer complaints are
solved, listening to customers and Cadbury make continuous improvements to their products.
Those are all the benefits for Cadbury monitoring the quality of their products and using a
quality assurance method.

Cadbury and the Worm Controversy

In October 2003, worms were reported to be in a few Cadbury Dairy Milk chocolate bars in
Mumbai. Problems with infestation during storage occasionally can occur in the chocolate
industry throughout the world, if the product is not stored in ideal conditions. To be clear,
infestation, though unpleasant, is not a food safety risk. And although Cadbury provided its then
700,000 shopkeepers with metal dispensers and coolers to keep the chocolate stored properly,
it was simply not possible to ensure all retail outlets were handling the chocolate well.
Just a month before Diwali, the Food and Drug Administration Commissioner received
complaints about infestation in two bars of Cadbury Dairy Milk, Cadbury Indias flagship brand
with over 70% market share. He ordered an enquiry and went directly to the media with a
statement. Over the following 3-week period, resultant adverse media coverage touched close
to 1000 clips in print and 120 on TV news channels. The companys reputation and credibility
was under intense scrutiny. Sales volumes came down drastically in the first 10 weeks, which
was the festival season; retailer stocking and display dropped, employee morale especially
that of the sales team was shaken. The challenge was to restore confidence in the key
stakeholders (consumers, trade and employees, particularly the sales team) and build back
credibility for the corporate brand through the same channels (the media) that had questioned it.
In defense, Cadbury issued a statement that the infestation was not possible at the
manufacturing stage and poor storage at the retailers was the most likely cause of the reported

64

case of worms. But the FDA didnt buy that. And blamed the packaging of Cadbury for the
infestation.
That was followed by allegations and counter-allegations between Cadbury and FDA. The heat
of negative publicity melted Cadburys sales by 30 per cent, at a time when it sees a festive
spike of 15 per cent.
For the first time, Cadburys advertising went off air for a month and a half after Diwali, following
the controversy. Consumers seemed to ignore their chocolate cravings.
Cadburys greatest challenge was a lack of experience in dealing with a public opinion crisis.
Their first response was to identify core principles that would guide their actions moving
forward: place the consumer first; always tell the truth; and dare greatly, act quickly.
The Cadbury Team met with the media for the first time to explain the companys position.
Cadburys leadership team decided to embrace the truth about the infestation and understood
from consumer research feedback that their message must be very clear. Cadbury therefore
developed three key messages to respond to consumer concerns:
1. Infestation was a storage problem;
2. It was safe to eat Cadbury chocolates; and
3. Consumers must exercise the same care in purchasing a chocolate as they would when
buying any food item.
Cadbury identified its four basic stakeholders: the consumers, its employees, the media, and the
government authorities (i.e. the FDA). Cadbury understood that the relationship with the FDA
would improve easily because the company was strictly adhering to food safety laws. Attention
from the media would also fade over time because the media would inevitably lose interest and
find other stories to cover. Cadbury therefore needed to focus its efforts on improving employee
morale (because employees are the best ambassadors for the company), and most importantly,
winning back its consumers.
Dealing with the crisis required internal as well as external actions. Every step moving forward
was focused on promoting Cadbury as a company you can trust.
65

Before addressing the consumer, however, it was essential for Cadbury to reinstate the belief of
each and every employee in the company for which they worked. Letters from the Managing
Director were sent out to all the employees. The doubts in the minds of the sales team were
removed by asking them to go into their markets, buy chocolates worth up to Rs 1000 and see
for themselves if any bars were infested. None of the sales people found infested chocolate
bars and were thus able to convince themselves there was nothing wrong with their product and
that Cadbury had nothing to hide. Furthermore, a series of town hall meetings were held with
the senior managers and employees to ensure the employees were kept informed of the
proactive steps being taken to manage the media, help the retailers, and ensure future
occurrences of such incidents were kept to a minimum. Regular email updates were also used
to communicate the senior managements point of view and to ensure consistency of
messaging.
Cadburys external response to the crisis included changing the product packaging,
implementing a comprehensive media campaign, and reaching out to its retailers.
The first tangible action taken by Cadbury was to strengthen Cadbury Dairy Milks packaging.
The packaging changes would reduce dependency on proper storage conditions as much as
possible. Cadbury introduced purity-sealed packaging: an inner layer of foil with an outer
metallic flow wrap for small packs of chocolate; and a reinforced heat-sealed polyfoil with an
outer band wrap for the large packs. A purity-sealed logo was created and displayed on all
wrappers and advertisements. The new purity-sealed packaging was launched in January 2004
and involved a significant investment of 15 crore. Furthermore, the new production process was
implemented in an unprecedented eight weeks (instead of the usual six months).
Cadburys second important response to the crisis was the implementation of the Project
Vishwas (Project Trust) campaign. The goal of Project Vishwas was to win back the
confidence of the consumer. Retailers and consumers were reached nationally through the
press advertisement, Facts about Cadbury, released in 55 publications in 11 languages. The
advertisement presented facts about Cadburys manufacturing and storage facilities and
highlighted corrective steps being taken by the company.
Cadbury also brought in a brand ambassador to reinforce the credibility that the company had
demonstrated through its re-packaging efforts. Amitabh Bachchan, a legendary Indian film star,
was chosen (at a significant cost) because he embodied the values of Cadbury as a brand and
66

connected with all of India: mothers, teenagers, children, media persons and business partners.
In a consumer study, the Indian Prime Minister Atal Bihari Vajpayee and Amitabh Bachchan
were found to be the two most credible people in India!
Bachchan announced Cadburys new packaging through a testimonial advertisement on TV
called Sincerity. Most importantly, the ad acknowledged and accepted the problem. Bachchan
spoke straight into the camera and described how he visited the Cadbury factory to first
convince himself of the quality of Cadbury chocolates before agreeing to become a
spokesperson. He then described the actions Cadbury had taken in introducing new packaging.
A second TV advertisement Charm showed Bachchan playing with his granddaughter, who is
wary of eating the chocolate he offers her, stating she has heard there is something in it.
Bachchan assures her of the safety of the product. The second advertisement also refused to
skirt the issue, and dealt with infestation fears directly and honestly.
In addition to rolling out the Bachchan TV ads, a media conference was organized in Mumbai to
launch the new packaging. This was followed with press conferences in cities worst affected by
the crisis: Pune and Nagpur in Maharashtra and Cochin in Kerala. In these conferences, media
persons were encouraged to compare the old and new packs with an innovative comparison kit
and experience the significant changes in packaging first hand. An audio-visual message from
Bachchan was beamed to build credibility and excitement. To advertise the new packaging in
the city where the crisis began, Mumbai, Cadbury launched a school outreach program across
100 schools, using the platform of the Bournvita Quiz Contest3 (a popular childrens TV quiz
show sponsored by Cadbury). Road shows were conducted across the states of Maharashtra
and Kerala.
Given that much of the damage had come from television coverage, a video news release with
packaging and factory shots was given to television channels to control the visual messaging.
Simultaneously, senior Cadbury spokespersons continued with the Editor Outreach program
that had been initiated in November 2003.
Cadburys third major response included the implementation of a retail monitoring and education
program to address storage problems. Distributors and shopkeepers were supported with
posters and leaflets to help improve their storage conditions as well as share Cadburys pointof-view with their customers. Cadbury also distributed more metal dispensers and coolers to its
retailers. A response cell with a toll free number and e-mail was put in place to give
67

shopkeepers a means to directly contact the company with any issues they faced. On the
response cells first day, the unit received 158 calls and 60 emails. These actions helped
reinforce the companys commitment to quality and reaffirm retailers confidence and proper
storage practices.
Finally, even as Cadbury was in the midst of the crisis, the company believed it was necessary
to assure its consumers and retailers that it was business as usual at Cadbury. Cadbury
increased its spending on all other chocolate brands (e.g. Perk, Five Star), and re-launched its
chocolate product, Temptations.

Forecasting
Sales forecasting is the process of a company predicting what its future sales will be.
This forecast is done for a particular period of a time in the near future, usually the next
fiscal year. Accurate sales forecasting enables a company to make informed business
decisions.
Sales forecasting involves techniques including both informal methods, such as
educated guesses, and quantitative methods, such as the use of historical sales data or
current data from test markets. Sales forecasting may be used in making pricing
decisions, in assessing future capacity requirements, or in making decisions on whether
to enter a new market.
The inputs from sales and marketing finance should be considered. The final sales
forecast is the consensus of all participating managers. You may also want to put up a
Sales and Operations Planning group composed of representatives from the different
departments that will be tasked to prepare the sales forecast.
Steps of Sales Forecasting Process

Setting Goals for Forecasting

Gathering Data
Analysis of Data
Choosing the best model for forecasting
Forecasting
Evaluation of Forecasting outcomes
68

The time horizon of the forecast is classified as follows:

Description

Forecast Horizon

Short Range

Medium Range

Duration

Usually less than 3 3 months to 3 years

months,

Applicability

Long Range
More than 3 years

maximum

of 1 year
Job
scheduling, Sales
worker assignments

and New

product

production planning, development,

budgeting

facilities planning

How is sales forecast determined?

There are two approaches to determine demand forecast (1) the qualitative approach,
(2) the quantitative approach.
Description
Characteristics

Qualitative Approach
Quantitative Approach
Based on human judgment, Based on mathematics;
opinions;

Strengths

subjective

nonmathematical.
Can
incorporate

and quantitative in nature.

latest Consistent and objective;

changes in the environment able

and inside information.
Weaknesses

to

consider

much

information and data at one

time.
Can bias the forecast and Often quantifiable data are
reduce forecast accuracy.

not available. Only as good

as the data on which they

Applicability

Used

when

situation

are based.
is Used when

situation

is

vague and little data exist. stable and historical data

(e..g., new products
technologies)

and exist.
(e.g.,

existing

products,

current technology)

69

Techniques

Jury of executive opinion

Time series models

Sales force composite

Casual models

Delphi Method
Consumer Market Survey

Cadbury use Quantitative method as a way of forecasting and it uses time series model
as the basis of their forecast.
Time series models assume that all the information needed to generate a forecast is
contained in the time series data. A time series is a series of observations taken at
regular intervals over a specified period of time. It assumes that we can generate a
forecast based on patterns in the data such as trend, seasonality, and cycle.
Sales Forecasting For Cadbury
Cadbury plan their production process by using a time series method as this helps
Cadbury to accurately produce the needed amount of chocolate at correct period of
time. A time series shows historical data that can be used and analyzed to predict
future trends. Christmas and Easter are peak selling times for all chocolate
manufacturers including Cadbury, this is obviously because chocolate products make
good gifts for these occasions. Time series analysis does not explain the casual
relationship between variables and how they will be in future also. It simply assumes
that past analysis tries to find out the factors which affect the behavior of the variable.
The changes in the variable over a period of time are divided into 4 components. They
are:

Trends
Seasonal Variations
Cyclical Variations
Random Fluctuations

70

By the use of trial and error, we assumed that Cadbury India used Linear Trend line
method in its forecast. Linear trend line is a time series technique that computes a
forecast with trend by drawing a straight line through a set of data.
Cadbury Dairy Milk not only accounts for 30 percent of the total chocolate market in
value, but commands nearly 26 percent in volume terms and close to 30 percent of
Cadbury Indias annual sales turnover. So as the basis for computation we take 29
percent of actual sales turnover to account for its sales forecast. Also as the basis of
computation we are only using the data for the years 2005 to 2007 to compute for the
forecasted sales of Year 2008.

Cadbury India
Years (X)

Sales (Y)

XY

1 (2005)

291.7458

291.7458

2 (2006)

333. 4913

666.9826

3 (2007)

418.1568

1254.4704

1043.3939

2213.1988

14 X =2 Y = 347.7979667

6
Step 1.

b = XY n XY
X - n X

=126. 4109998

= 63.2054999

71

72

Step 2.
a = Y - bX

= 221.3869669

Step 3.
Y = a + bX

= 221.3869669 +(63.2054999) 4

= 474.21

Forecasted Sales for the year 2008 is equal to Rs474.21 crore.

The Actual sales For the Year 2008 is Rs.456.53crore. We cannot actually say that
these method is the possible method to be used because of the lack of sales
information and other information relating to forecast, but we still think it can also be
useful because the difference is not quite big. Also this Linear Trend Line relates much
to Cadburys demand.
Computation for the forecasted sales of Year 2009 to 2015.
2009
Y = a + bX

= 221.3869669 +(63.2054999)5

= 537.41

= 221.3869669 +(63.2054999)6

= 600.62

= 221.3869669 +(63.2054999)7

= 663.83

= 221.3869669 +(63.2054999)8

= 727.03

= 221.3869669 +(63.2054999)9

= 790.24

= 221.3869669 +(63.2054999)10

= 853. 44

= 221.3869669 +(63.2054999)11

= 916.65

= 221.3869669 +(63.2054999)12

= 979.85

2010
Y = a + bX
2011
Y = a + bX
2012
Y = a + bX
2013
Y = a + bX
2014
Y = a + bX
2015
Y = a + bX
2016
Y = a + bX

73

2017
Y = a + bX

= 221.3869669 +(63.2054999)13

= 1043.06

= 221.3869669 +(63.2054999)14

= 1106.26

= 221.3869669 +(63.2054999)15

= 1169. 47

= 221.3869669 +(63.2054999)16

= 1232.67

2018
Y = a + bX
2019
Y = a + bX
2020
Y = a + bX
Standard error
Year (X)

Actual Sales (Y)

Forecasted Sales

Standard Error(^2)

2005

291.7458

284.5925

51.170

2006

333. 4913

347.7980

204.682

2007

418.1568

411.0035

51.170

2008

456.53

474.21

312.582
619.604

309.802

= 17.60

Location Analysis
Cadbury have done a strong research for searching a place for its plant as well as for its regional sales
offices. They have look into their primary factors of production as well as secondary factors before
choosing the place for its location facilities.
PRIMARY FACTORS

Man

Money

Material

Machinery

Infrastructure

SECONDARY FACTORS

74

Facility

Natural factor

Political factor

Religious factor

Miscellaneous factors

Capacity Planning
The capacity planning strategy adopted by Cadbury makes sure that the organization
has enough capacity to exceed the current demand and mean while it also uses match
strategy to slowly increase the capacity in order to meet the ever increasing Cadbury
demand. Cadbury capacity planning is mix of lead and match strategy.
Lead Strategy:
It is adding capacity in anticipation of an increase in demand. It is an aggressive
strategy with the goal of luring customers away from the company's competitors. It often
results in excess inventory, which is costly and often wasteful.

Facility Layout
Facility layout refers to arrangement of physical facilities like machines, equipments, tool etc. in
such a way that to have quickest flow of raw material at the lowest possible cost and with the
least amount in processing of the product. Cadbury follows the hybrid layout type to bring
efficiency in the work environment. The manufacturing plants are combination of process and
product layout. Facilities are more capital intensive. resources used are general purpose. Higher
space requirements. Material handling costs are lower.
Step 1:

75

First Cocoa beans are transferred to roasting and winnowing

machines.
The beans are roasted in a revolving drum called a continuous
roaster. Hot air is filtered into the roaster as the beans pass
along it, and it is during this process that youll begin to smell
chocolate.

Roasting Machine
The roasted beans are kibbled (broken in to small pieces) and
then winnowed (the brittle
Shells are blown away, leaving just the nibs, the centre of the
beans).
Step 2:
Transferred to grinding machine.
The nibs are then ground in a mill until they become a

Winnower

chocolate- colored liquid, rather like thick cream, over half of

which is cocoa butter. The liquid is called mass or cocoa liquor

and this is the basic ingredient for all cocoa and chocolate products. Mass contains cocoa butter
and about half of this is pressed out. Youre then left with a solid block that can be ground into
cocoa powder and is used to make Cadbury Drinking Chocolate.

Step 3:
Once weve made dark chocolate and milk chocolate, what
happens next depends on what confectionery were
making. Bars of chocolate like Cadbury Dairy Milk, are
called moulded products because chocolate is poured
into a mould to make them. Liquid chocolate is poured in,
shaken (to make sure it fits the mould perfectly and to
remove any air bubbles), and then cooled before being
wrapped at high speed.

76

Job Design and Work Measurement

Workplace Wellness
Healthy colleagues are engaged and productive. So it's no surprise that to grow a successful
business you need a healthy workforce. That's why we encourage and support our colleagues in
having healthier lifestyles. We offer various health and well-being tools and resources in many
of the facilities we have around the world and our goal is to expand these efforts each year.
Though the current tools and resources may differ based on local and cultural needs, they
generally offer similar elements around nutritional, physical and mental well-being.

77

Here are just a few ways we're helping our teams feel betterphysically and mentally:

Lifestyle improvement programs, such as stress management, weight management and

smoking cessation

Fitness and/or sports facilities onsite, incentives for gym membership reimbursement
and employee sports competitions

Health screenings and exams, including vaccinations and flu shots

Healthier options and nutrition information in our cafeterias and canteens

Health newsletters/intranet sites that offer health tips and work-life/flex time programs.

Mondelez India Foods Private Ltd (Formerly Cadbury India Limited), a part of the Mondelz
International group of companies, deals directly with prospective employees, not through

78

intermediaries. The company does not seek payments of any kind from its prospective
employees.

Employees Motivation
Cadbury motivates their staff by opportunities for employees to grow within the business. Such
as promotions into management and higher. They also like to make their employees feel
involved in the running of the business by allowing them contribute their ideas in how they think
the business and achieve more.
At Cadbury the following step are taken in order to keep the employees and labor motivated
towards the joint effort.

Core labor right and dignity at work:

-

Cadbury respect the rights of employees to join legally recognized labor unions.
It does not tolerate any form of harassment in the workplace.

Health and safety in the workplace:

- Cadbury ensures healthy and safe work environment for each employee.
Fair remuneration
- Working hours and remuneration are reasonable and comparable to those offered by
-

similar companies
Chemistry, Science, Food/nutrition, or Chemical Engineering Degree holders are

regularly coached by managers

Managing an annual sensory screening program to develop product knowledge and

understanding of the Confectionery categories.

Analytical Laboratories (Microscopy, DNA and Protein and Investigate Analysis) provide
training for employees.

Inventory Management
For running any business, managing inventory and operating it is the key factor. Various
principles depend upon how an organization manages their inventory. Moreover it also largely
depends upon the nature of the business i.e. the product that whether it is perishable or nonperishable. Therefore the entire product line of Cadbury India comes under the category of
perishable goods. Its confectionery is diversified at a large scale as it provides various different
types of product such as toffee, chewing gum, clairs, mint, biscuits, beverages, etc. Its entire
79

confectionery is to be projected to produce 80, 000 tons of units, which can be valued as 7
Billion in India (Sople, 2004). Moreover it also continues to dominate the Indian market by a
large scale of 70%. As the company that we are talking about entirely deals with the perishable
goods, it becomes exceptionally important for a company to lay down unique skills for managing
inventory as there are also various costs attached to the inventory and also the perishable
nature of the product
Thus, the company currently uses JIT (Just in Time) technique for maintaining the inventory.
Firstly, many advantages can be detected while using or opting JIT type of inventory
management system. They are as follows:
It is more of a demand pull related inventory management system, instead of the normal
supply push.
This type of inventory can help an organization to save about 5-20% on the normal
inventory that is being managed.
Costs related to space, people goods, everything is saved and reduced.
Workflow is much easier and new technological advancement helps one to monitory the
inventory with help of IT sector much more easily.
In store expenses and damages are reduced as well.
And also workers can be motivated to produce defect free products.
Therefore the quality check is done on the same level, improving efficiency and wastage
of time, enabling total quality control. (Chary, 2009) (Sethi, 2004)
Currently Cadbury India, outsources its transport facilities, by transporting 75% of goods under
the temperature controlled transport system and remaining 15% in the normal ones. Also, it
maintains 15 day finished goods inventory and at various CFAs and warehouse 18-20 days. For
further improvements they have set their deadlines and are trying to reduce the finished goods
inventory to 8-10 days ad CFA and warehouse to 15-16 days. Letting the customer and
consumers to access the complete quality product as demanded. As accuracy is very important
when we talk about managing the inventories. (Sople, 2004)
In order to control inventory in an efficient and effective manner, Cadbury introduced Service
Level Optimizer 99+ that easily integrated into the SAP APO system that Cadbury was already
using. After implementing this inventory buffer variability and demand control had less human
intervention, safety stocks determination was highly automated and the inventory management
of Cadbury was stable. This step towards an affective inventory management helped them
satisfy the customer needs at reduced costs. The implementation of Service Level Optimizer
99+ ensures the plant produces manages inventory effectively there by reducing the cost and
80

meet

customer

demand.

References

https://www.cadbury.com.au/About-Cadbury/Chocolate-Hall-of-Fame.aspx

https://www.cadbury.co.uk/the-story

https://www.scribd.com/doc/36305300/Cadbury-Operations-project

81

https://marketingbrainstorm.wordpress.com/2011/02/16/brand-analysis-cadburys-dairymilk-a-journey-of-success/

https://sufiakhan1990.wordpress.com/page/2/

https://www.scribd.com/doc/146072524/Cadbury

http://www.mbaskool.com/business-articles/marketing/9618-cadbury-the-legend-ofchocolate-in-india.html

http://www.history.co.uk/biographies/the-cadbury-family

https://books.google.com.ph/books?
id=2kGvTCc538gC&pg=PA19&lpg=PA19&dq=why+did+john+cadbury+invent+chocolate
&source=bl&ots=_KT2mriCgp&sig=lkbkDEKY_A1NbbdLlxKe7fdDPR0&hl=fil&sa=X&ved
=0CDoQ6AEwBDgUahUKEwiiuvz0lsTHAhVEkY4KHeeqDVY#v=onepage&q=why
%20did%20john%20cadbury%20invent%20chocolate&f=false

http://docslide.us/documents/cadburys-dairy-milk-chocolate.html

http://www.irjcjournals.org/ijmssr/Mar2014/8.pdf

http://news.bbc.co.uk/2/hi/uk_news/england/8467489.stm

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