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CADBURY INDIA LIMITED A PROJECT REPORT ON “THE INSTITUTIONAL SELLING” FOR CADBURY VENDING MACHINE CADBURY INDIA LIMITED, N.DELHI Bachelor of Business AdministrationSUBMITTED TO : PREPARED BY :GGSIP University MAYUR JAINDelhi. BBA-III SEM. BLS INSTITUTE OF MANAGEMENT, MOHAN NAGAR, GHAZIABAD MAYUR JAIN BBA-III SEM.
ACKNOWLEDGEMENT First of all I would like to extend my vote of thanks to Mr. MARICHI MATHURand Mr. DEEPAK MEHROTRA of Cadbury India Limited, who assigned me a very livelyproject to work on. My parents and batchmates were also a source of motivation and inspiration forme and without whom this task would have been very difficult to accomplish. I would like to thank Dr. Sudhir Saran, Director of BLS Institute of Management,Ghaziabad. Mayur Jain BBA-III Sem. GGSIL University.
INDEX1. COMPANY PROFILE2. ORGANISATIONAL CHART FOR THE SALES TEAM3. INTRODUCTION4. CADBURY VENDING STORY5. ABOUT THE MARKET LEADER - NESTLE INDIA LIMITED6. LIMITATIONS OF THE PROJECT7. RECOMMENDATIONS
COMPANY PROFILE♦ Incorporation 1948♦ Corporate Status Public Limited Company♦ Business Food♦ Manufacturing Facilities Thane & Pune in Maharashtra♦ Registered Office Cadbury House, 19, Bhulabhai Desai Road, Mumbai♦ Listed on BSE, NSE In India, the name Cadbury is like a synonym to the word, chocolate. The keybusiness areas of the company are chocolates, confectioneries & malted food. Thecompany’s key brands in chocolates are as follows: CDM & Truffle (bars), Picnic & 5 Star (count lines), Crackles & Gold (mouldedchocolates), Gems (panned confectionery), Perk (wafer chocolates), Cadbury’s Eclairs(eclairs) and English Toffee & Byte (toffees). Bournvita is the leading brand in the malted food segment. The main business areas of the company are Chocolates and sugar confectioneries.In the chocolate confectionery segment, CIL is the market leader with a market share of70% followed by Nestle. Also, Cadbury cultivates its own cocoa beans, which gives thecompany an edge over others; as imported cocoa beans are expensive and also have adifferent taste.OUTLOOK
For the company, the thrust areas in the future would be the introduction of ITenabled services, new product launches, increasing the chain of distribution outlets andasset modernisation. The business in which Cadbury operates might continue to witnessintense competition, especially in the premium segment due to the entry of large foreignplayers and the permission by the government to import chocolates under the OpenGeneral License (OGL). Even though the turnover of the company’s chocolate & confectionery businessesis expected to show a moderate growth, a marginal drop in the contribution of thesebusinesses to the company’s overall revenues is likely over the medium term period due tohigher growth in the malted foods business. Especially, in case of the brown-coloured,malted beverage like Bournvita, the realisations are expected to increase moderately in thefuture.
ORGANISATIONAL CHART FOR THE SALES TEAM B R A N C H M A N A G E R B R A N C H S A LE S M A N A G E R A R E A S A LE S M A N A G E R S F IE L D S A L E S S U P E R V IS O R S S E N IO R S A L E S O F F IC E R S A L E S O F F IC E R S P IL O T S R E T A IL D IS T R IB U T IO N S A L E S M A N A G E R S The Delhi branch looks after the Northern India (Delhi Metro, Punjab, Haryana,Rajasthan, UP-East/West)
INTRODUCTION Bournvita is one of the major brand of Cadbury India Limited holding the 2ndposition in its sector (Malted Beverages) with a market share of 12% by volume and 11%by value. Traditionally it has been positioned as a Healthy and Tasty milk additive for theyounger generation. With such a positioning it has garnered a good market share for itself. Malted beverages can be segmented as: 1. White beverages 2. Brown beverages White beverages account for65% of the total health beverage segment whereas theshare of brown beverages is 35%. White beverages: Horlicks, Viva (Smithkline Beecham), Complan (Heinz) Brown beverages: Bournvita (Cadbury), Boost (Smithkline Beecham), Milo(Nestle), Maltova (Smithkline Beecham ) Traditionally positioned as milk substitutes/additives, malted beverages had astrong market in the milk deficit southern and eastern regions of India. Demand for whitedrinks declined in the 1980s when Operation Flood undertaken by National DairyDevelopment Board, made milk available in all parts of the country. With a view to revivedemand for the brands, malted foods were repositioned as strength and energy drinks witha nutritional thrust. Advertisement and positioning play a major role in initiating new brand trials orswitches. Most health drinks earlier focused on children as the target segment, butgradually the positioning has been extended to health drinks for the entire family. Playerssuch as Smithkline Consumer, Cadbury and Heinz have targeted different consumer
segments such as Junior brands for infants, separate formulations for expecting mothers,extra protein enriched variants positioned on health benefit, etc. To extend the success story of Bournvita, Cadbury is trying to increase its volumesby going into the market the other way round where it would also sell the productindirectly as a raw material for the vending machines. It has ventured into the business ofinstalling vending machines for beverages at corporate offices, fast-food outlets,entertainment centres, cafetarias, canteens etc. By this the company is also eyeing themarket share of its arch-rival Nestle, which is already a dominant player in the vendingbusiness. To offer more variety to the consumers Cadbury has also added another beverageto its vending machines - CHOCOLAIT (Hot chocolate drink having the luxurious taste ofDairy Milk - the flagship brand of Cadbury).
CADBURY VENDING STORYCONCEPT Bournvita is one of the major brand of Cadbury. It is also a leading brand in itscategory of Malted Beverages with a market share of 12% (by volume) and is at the 2ndspot just after Smithkline Beecham’s Horlicks. It is directly sold to the customers as ahealthy drink. Cadbury has launched the hot beverage vending machines which will offerBournvita as one of the product. The company has ventured into this business to giveleverage to the turnover of Bournvita. The companies which are already in the vendingbusiness are Nestle (Nescafe coffee and tea), Hindustan Lever Limited (Bru-InstantCoffee) and TATA Tea (TATA-Tetley tea). In the vending business the machines are generally installed at public places such asRestaurants, Cafes, Railway platforms, Airports, Entertainment Centres, Cinema halls,offices etc. The main idea behind this is to increase the turnover of the product by makingthe people to buy it as a raw material for the vending machines. This way through indirectselling the company can increase its market share.
PRODUCTS The two beverages offered by the vending machine of Cadbury are :♦ BOURNVITA♦ CHOCOLAIT BOURNVITA - Bournvita is primarily positioned as a healthy beverage. It isenriched with RDA balanced formula provides complete nutrition, keeping a person freshand energetic throughout the day. A cup of Bournvita served by the vending machine isthe perfect balance between Total Health and Rich Taste, served HOT. CHOCOLAIT - The Chocolait is added for the pure chocolate lovers who cannow savour the delicious taste of Cadbury’s chocolate. It has a rich luxurious taste ofCadbury Dairy Milk in a cup, served HOT. Both the above drinks are healthy and tasty drinks with no side effects ofaddiction, craving for caffeine etc.
VENDING MACHINE The vending machine installed by Cadbury is procured from KRISHMAK IndiaLtd., Bangalore, which is one of the leading names involved in the manufacturing of alltypes of vending machines. The machine is a digital machine with LCD display, compactlydesigned, easy to operate, that can fit anywhere and requires no operator. It is designed todispense a cup of hot beverage at the touch of a button. Hence it relieves the person fromthe bindings of office and canteen timings and gets him a cup of delicious drink withoutthe hassles of stirring, boiling and even adding sugar and milk. To ensure high hygienic standards, the machine has a foodgrade water tank,disposable cups and provision of cleaning mixing bowls and tubs automatically.Technical Specifications - DIMENSIONS( in mm.) - 430*415*580 WEIGHT - 30 KG WATER TANK - 5 LITRES PREMIX CAPACITY - 1.2 kgs. of each premix. NO. OF SELECTIONS - TWO DISPENSING RATE - 8-10 CUPS / MIN INITIAL STARTUP TIME - 10 MINS. POWER SUPPLY - 230 V/AC MAXIMUM LOAD - 2.2 KW POWER CONSUMP. - 0.9 UNITS/HR ( AT PEAK OUTPUT) COST - Rs. 16,400/- In addition to these it has option of vending half cups of each drink.PRICE
Premix Costing - ELEMENT BOURNVITA CHOCOLAIT Purchase price/kg.(Rs.) 187 192 Cups per kg. 50 63 Grams per cup of premix 20 16 Water 110 ml 110 ml Premix Cost/cup (Rs.) 3.74 3.04 Cost of paper cup(optional) 0.85 0.85Cost of Vending Machine and rentals - Though the cost of the machine is Rs.16,400/-, the vending machine is installed atthe corporate offices absolutely free of cost. The company will just have to pay the rentalsfor operating the machine at Rs. 1000/- per month.
MARKETING STRATEGY The company is a new player in the hot beverage vending business, hence it needsto offer some concessions to the companies in order to penetrate into the market. Thefollowing points should be mentioned to describe the policy adopted by the company - 1) The company is not itself involved in the purchasing and installing of the machines. Rather the machine is purchased and installed by the authorised distributors of the company. The marketing of the machines at the corporate offices is look after by the company. 2) Similarly, the premixes are also sold to the customers through the distributors. Hence, the distributor will purchase the machine and will invoice the premixes to the customer. 3) In order to ensure that the distributors get a proper return, the company installs the machines in only those offices where the consumption is expected to be more than 50 cups per day (both the drinks combined). 4) For the first 20 machines installed at the offices, on a promotional basis, the rental fees of Rs.1000 per month has been waived off. 5) The company shall also run first 100 cups of Bournvita and Chocolait each as a free sample at the offices to promote awareness in the employees. 6) Prompt service and delivery of premix will be provided at the site.
ABOUT THE MARKET LEADER - NESTLE INDIA LIMITEDVENDING MACHINE USED - AUTOVEND DIMENSIONS( in mm.) - 435*420*575 WEIGHT - 28 KG WATER TANK - 5 LITRES PREMIX CAPACITY - COFFEE 1.4 KG ( 120 DRINKS) TEA 1.4 KG (140 DRINKS) NO. OF SELECTIONS - TWO DISPENSING RATE - 8-10 CUPS / MIN INITIAL STARTUP TIME - 6 MINS. POWER SUPPLY - 230 V/AC MAXIMUM LOAD - 2.2 KW COST - RS. 17,000/-COSTING OF PREMIXESTEACOST /KG - RS. 88/-NO. OF CUPS/KG - 90-100COST/CUP - RS. 0.88 - 0.97COFFEECOST/KG - RS.160/-NO. OF CUPS - 70-80COST/CUP - RS. 2 - 2.28
LIMITATIONS OF THE PROJECT♦ HALF-HEARTED APPROACH - The project of installation of vending machines by the company was a half-hearted project. It was not seen as a full fledged part of the business. Hence there were very limited resources allotted for the sake of the project.♦ MONOPOLY OF NESTLE - Nestle India Limited has almost a monopolistic presence in the market. They are in this business much before Cadbury entered into it. At those Corporate offices which have a vending machine, about 95% of the time it had to be of Nestle’s. Hence the entry barrier in this business is very high.♦ POSITIONING OF THE PRODUCT - The main beverage under consideration is Bournvita. It is positioned in the market as a health beverage, specially for growing kids. Hence, this positioning was not relevant to achieve the objective of the project.♦ LOW LEVEL OF CONFIDENCE - Due to the absence of any potential USP in the product, the confidence level of the person in charge was quite low. They were very sceptical about installing the vending machines in somewhat less-potential offices.♦ LACK IN COMMUNICATION WITH THE PERSON IN CHARGE - We were supposed to report to the Market Development Manager who was in charge of this project. But he looked after so many other units such as NCDs ( New Channel Development ) etc. that there was not enough communication with him.♦ POOR PLANNING RIGHT FROM THE BEGINNING - Due to the lack in communication with the person in charge and other trainees involved in the same project, the project took off in a very haphazard manner. Due to
this proper allotment of areas was not done, which resulted in repetitions of calls at the same offices. This all gave rise to unhealthy competition between the trainees.♦ POTENTIAL AREAS WERE NOT ALLOTTED - We were only told to work within the geographical boundaries of Delhi. Due to this the major potential area like Noida, Gurgaon and Faridabad were ignored. These three cities are homes to large corporate offices and MNCs.♦ INEFFICIENT DISTRIBUTOR - Whatever money was involved in the purchasing the machines and sale of premixes was that of the distributor. The distributor appointed by the company didn’t have enough sources to purchase the machines which can be timely supplied to the customer when they wanted. The distributor was willing to purchase the machine only when there was a potential confirmed order. The purchase and arrival of machine takes at least 10-12 days. Due to this we were not able to carry out sampling an demonstrations at various offices.♦ WRONG TIMING OF THE PROJECT - This project was carried out in a full-fledged manner when the mercury in the capital was recording temperatures of more than 41-42 °C. When we used to tell the Administrator about the hot beverage vending machine, their response was very gloomy right from the beginning. At most of the places we got to hear that they won’t be able to provide the minimum consumption level in such climatic conditions.♦ ECONOMIC RECESSION - The ongoing recession faced by the business is also one of the reasons due to which there were few takers for the machine. Most of the companies were facing a decline in their net profits and were resorting to stringent cost-cutting measures.
RECOMMENDATIONS♦ TAKE IT UP AS A FULL-FLEDGED PROJECT - The project of installation of vending machines by the company should be taken a full- fledged project as there is immense potential in the business.. Hence adequate sources should be allotted for making the project successful.♦ LOOSEN THE CONDITIONS - As the entry barriers are too tall due to monopolistic presence of Nestle the company should loosen the conditions. The minimum consumption level should be brought down to 25-30 cups in the beginning and after the company get enough market presence, it should raise the limits.♦ TARGET AT THE YOUNGER GENERATION - As Bournvita is positioned in the market as a health beverage, specially for growing people the company should target at those offices where there are more of younger staff. The younger generation is moving away from the addiction of tea and hence Bournvita can serve as a very healthy alternative.♦ REGULAR MEETINGS WITH THE INCHARGE - Regular meetings and feedback sessions should be called with the incharge so that he can he can solve the problems in time and can arrange for the resources as and when required.♦ PROCURE EXTENDED VERSION OF THE MACHINES - Some of the offices have the policy of providing only a couple of cups of tea to their employees. Any additional facility comes at a cost. Hence Cadbury should also try to procure such machines in which there is a provision of getting the beverage only on the insertion of some token or coins.
♦ PROPER ALLOTMENT OF AREAS AMONG THE SALES PERSONS - All the areas which are being targeted should be properly divided among all the sales persons. Then they should be given the targets to increase accountability. In this way the work would be done in a systematic manner and no areas are left out due to confusion.♦ MOVE TO POTENTIAL CITIES - The company should also allow the sales persons to move into cities such as Noida, Gurgaon and Faridabad which are homes to large corporate offices and MNCs. Such offices generally have a young, energetic, health-conscious staff who look for better alternatives for tea and coffee to get rid of their addiction.♦ APPOINT A NEW DISTRIBUTOR - The company should also appoint a new distributor for this project or give this project to a more potential distributor, who can afford to hold enough inventory of machines and the premixes. This is very important because ultimately main purpose of all the marketing efforts is to increase the turnover through the distributors.♦ RE-LAUNCH IT AT A PROPER TIME - The project should have been launched just before the start of the monsoons when the temperature goes down and the consumption of hot beverages go up. Thus the company should re-launch the project in the month of July-August.♦ RE-CALIBERATE THE MACHINE - The cost per cup of the machine is slightly higher than that of tea and coffee due tomore quantity per cup and Bournvita and Drinking Chocolate being premium categoryproducts.
HINDUSTAN TIMES BUILDING CONNAUGHT PLACEI visited Hindustan Times office and met Mr. Tripathi who takes care of the Cafeteria. Hedirected me to Mr. Singh who has the contract of the Cafeteria for the entire HindustanTimes office. Mr. Singh was happy with his own stuff in the Cafeteria and was notinterested in making space for any additional thing. He has his own mindset that peopleonly look for lunch and bread-pakora or samosa in the Cafeteria and chocolates was a kiddish thing to keep, but when I visited him again I was able to change his mind forchocolates. The next time I visited Mr. Singh I was able to take the order but the nonavailability of the visi-coolers again stopped Mr. Singh to give the order.
ORIENT CRAFT NOIDA SECT-57I visited Orient Craft which is the No.1 Export House, as the work is done 24 hours so thechocolates can really help the employees to reduce their stress, but out their the femalestrength didn’t exist and all the work force was the labour which can not afford achocolate everyday. Another thing that there is no pantry for the employees only a kitchenfrom where the boy serves the tea, that also only to the superiors. I metMr. Vineet Sharma ( Sr. Merchandiser ) I gave him the idea of sending chocolates to their
clients, and taking Bournvita in the office for energy as a health drink in place of a colddrink.Though he didn’t placed an order at the very moment but did show the interest andpromised to starty with it, the next month. ORION DIALOG EAST OF KAILSHI visited Orion Dialog a leading domestic call centre with all the youngsters working dayand night. I met Ms. Shikha, the senior HR in the organization and gave her thepresentation of the entire idea of keeping chocolates in the pantry. Although it was a very
small one but chocolates did not require a large space, and serving Bournvita to theemployees who are working in the night as a health drink as an incentive in kind tomotivate the employees. Ms.Shikha was quite convinced about the idea so she asked meto take an appointment later and meet her again, as she would consult with the directors. I met her again then she asked me to take an appointment directly with thedirector, which I did and got an appointment with Ms.Tina Sapra, I gave her thepresentation and she was quite impressed by the idea and agreed to take chocolates for thepantry and small training program’s which they have often. Ms. Tina Sapra agrees to takechocolates for the Cafeteria when they shift their organization to a bigger area.
PEC LTD. CONNAUGHT PLACEI visited PEC ltd. and met Mr. S.S.Negi ( Dy.Mgr ), he gave me a blunt answer that theydon’t have any pantry and no trend of chocolates in the office as chocolates have caloriesand are very sweet and not for a diabetic patient. I requested him to take out some timeand have a look at my presentation, he permitted me to do the same and soon after thepresentation, he went to meet his boss. He came back after ten minutes with a positivereply and placed an order to be delivered as soon as possible.
JAYPEE VASANT CONTINENTAL VASANT VIHARI visited five star hotel Jaypee Vasant Continental and met Mr. Rakesh Dua (Purchase)who was very good to me, although they were not keeping Cadbury chocolates in theirhotel, as I gave him the reasons to keep Cadbury in place of Nestle he took the proposalfrom me and asked me to come later with an appointment. When I visited the next time hemade me meet Mr. Pramod Gupta (V.P materials) whom I gave the presentation ofCadburys and he asked me to call back later.When I called up Mr. Pramod Gupta he gave me the order of drinking chocolate at thatvery moment, but it was something really bad that our distributor could not supply it in theevening, he supplied it in the morning. Mr. Pramod Gupta was interested in keepingCadbury chocolates in the mini bars as well but after getting the proposal passed by themanagement.
COMPARE INFOBASE JANAKPURII visited Compare InfoBase in Janakpuri and met Ms. Smriti Vashisht ( Dy. Mgr.)finance.She was quite amazed why a chocolate company executive has taken up an appointmentwith her. As I met her, I gave her my presentation of the entire idea of chocolates which Ihad in my mind. According to me, she was quite impressed by the idea but she nevershowed any sign of interest and asked me to call up later. When I called up later she gaveme an appointment and asked me to meet her, in the meeting she cleared few of herdoubts and then finally was ready to take Cadbury chocolates for the office as well as forthe gifts, which they give to their clients.