Cadbury Crisis Managment

2. ABOUT COMPANY
• In 1824, John Cadbury began selling tea, coffee, and drinking chocolate
which he produced himself at Bull Street in Birmingham, England.
• He later moved into the production of a variety of cocoa and drinking
chocolates, made in a factory in Bridge Street .
• John Cadbury became a partner with his brother Benjamin and the
company they formed was called ‘Cadbury Brothers of Birmingham’.

3. Company Analysis
Market Share: Chocolate
Cadbury (70%)
Nestle (14%)
Amul (5%)
Others (1%)

5. • In eight outlets across Maharashtra, worms were found in some bars of
Cadbury Dairy Milk.
• Inquiry was instituted by the Food and Drug Administration and negative
media publicity spread like wildfire.
• Consequently, sales volume plummeted, retailer cooperation lessened
and employee morale dwindled. All in all, the company's credibility
suffered extensive damage
Crisis

6. • Reputation and credibility was under intense scrutiny.
• Sales volumes came down drastically in the first 10 weeks.
• Employee morale – especially that of the sales team – was shaken.
• Due to which media coverage touched close to 1000 clips in print
and 120 on TV news channels.
• People even assumed that every chocolate could be contaminated.
Impact

7. • Cadbury India Ltd. has begun investigations into reports that live
worms were found in its Dairy Milk chocolate bars.
• Cadbury’s statement : We are concerned about these reports and are
investigating it," a company spokesperson said.
• The Maharashtra Food and Drugs Administration (FDA) had
announced that it would prosecute Cadbury India Ltd. after tests
indicated "insect infestations" in the chocolate samples tested.
Problems faced by Cadbury

8. • To Restore confidence in the key stakeholders.
• Build back credibility.
• Make customer believe about safety.
• To increase the sales.
Challenges

9. In response to the crisis, Cadbury therefore developed three key messages:-
• Infestation was a storage problem;
• It was safe to eat Cadbury chocolates; and
• Consumers must exercise the same care in purchasing a chocolate as
they would when buying any food item.
Objectives

10. • They did not deny the fact of worms being present in the chocolates
• Project Vishwas
• Advertisement featuring Amitabh Bachchan.
• Revamping of packaging of Dairy Milk having metallic poly flow.
Steps taken by Cadbury to
achieve the objectives -

11. • Identification of four stakeholders the consumers, its employees, the
media, and the government authorities (i.e. the FDA)
• Situation with FDA would improve as the company was strictly adhering to
food safety laws
• Attention from media would fade as media would lose interest and find
other stories to cover
What & How to be Done?

12. Internal Actions
Implementation of Actions
▪ Letters from MD to the employees
▪ Employees were asked to go to the
markets and check for themselves
▪ Series of town hall meetings were
held
▪ Regular email updates
External Actions
▪ Packaging
▪ Project “Vishwas”
▪ Two advertisements featuring Amitabh
Bachchan
▪ Media conferences platform of BQC
▪ Retail monitoring and education program
▪ Toll free numbers and emails to the
retailers

13. • A plan involving distribution and retail channels to ensure the quality of
products.
• Quality control managers and 300 sales staff checked over 50,000 retail
outlets in Maharashtra and replaced all questionable stocks.
• Built awareness among retailers on storage requirements for chocolates.
• Provided assistance in improving and strengthening packaging of
company’s range of products.
Project VISHWAS

14. • Appointed as brand ambassador for a period of two years.
• The company believed that the reputation he has built up over the last
three decades complements their own, which was built over a period of
50 years.
• AB played a pivotal role in all communication relating to Cadbury's
products and brands.
• Aimed at rational and emotional appeal.
Why Big B?

15. • Infestation was Storage-linked problem, not manufacturing related.
• Sales volumes climbed back.
• Responsiveness of company.
• Significant upward movement in ratings
• Within eight weeks of the introduction of its new packaging and
advertising campaign, sales had almost reached pre-crisis levels.
• Cadbury has maintained its position at the top of the Indian chocolate
industry ever since.
As A Result:-

16. • Through timely and consistent marketing communications Cadbury
succeeded in solving a daunting business crisis.
• With a 360-degree communications approach that targeted various
audiences, Cadbury could quickly control and off-set the negative word of
mouth it had received.
• By integrating a variety of tools like press release and conferences,
consumer advertising, trade advertising, point-of-purchase
communications, packaging initiatives, email communications and the like,
all focusing on the same problem, Cadbury could communicate a unified
message and get audiences to appreciate the efforts it had taken to
minimize instances of future occurrences.
Conclusion

17. THANK YOU