1. Presented by :- Rashmi Dave, Shweta Multani,
Raghav Bindal, Saurabh Laddha
Supriya Pugalia, C V S S Vivek

2. About the 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. • British confectionery company owned by
Mondelēz International Industry's second-
largest co.
• Cadbury India began its operations in India in
1948 by importing chocolates.
• Operates in categories – Chocolate
confectionery, Beverages, Biscuits, Candy etc.

4. Cadbury Product Portfolio

5. About the case
• Cadbury Dairy Milk, the bread and butter
brand of Cadbury.
• Sold around 1 million bars a day

9. Just a month before Diwali, FDA Commissioner
received complaints about infestation in two
bars of Cadbury dairy milk.

10. INDIA
Cadbury under the scanner again
October 13, 2003 | PTI
MUMBAI: Maharashtra Food and Drug Administration on
Monday sent ten bars of allegedly worm-infested
chocolates to the testing laboratories, just three days after
the Maharashtra government expressed satisfaction at the
condition being maintained at the manufacturing unit of
Cadbury. However, company sources were not available for
comment on the allegations about the infestation. FDA
sources told PTI that the infested chocolates from a shop at
Kurla in central Mumbai, were handed over...

11. • 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

12. Crisis
• 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.

13. Problems faced by Cadbury
• 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.

14. Cadbury’s statement
• Infestation was not possible at the manufacturing
stage.
• Raised finger on retailers for poor/improper
storage.
• FDA didn’t accept that.
• FDA commissioner, Uttam Khobragade told CNBC-
TV18, "It was presumed that worms got into it at
the storage level, but then what about the
packing - packaging was not proper or airtight,
either ways it's a manufacturing defect with
unhygienic conditions or improper packaging."

16. Impact on the Consumer
• Conducted a research survey among 200
consumers in 7 cities
• 69% of consumers did not want their kids to
buy it
• 58% would not buy it for kids
• Awareness of infestation high in Maharashtra
and Kerela
• Political unrest

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

18. Objectives
In response to the crisis, Cadbury therefore
developed three key messages:-
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.

19. Steps taken by Cadbury to achieve the
objectives
• 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

20. What & How to be Done?
• 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

21. Therefore, focus on improving
employee morale ((because
employees are the best
ambassadors for the company),
& most importantly
Winning back its customers

22. • During the crisis Cadbury monitored consumer opinion
across the major cities regularly and identified four
kinds of consumers:
• 1. Loyalists, who were staunch supporters of the brand
in spite of the incident and its coverage;
• 2. Fence-sitters, in whose minds a basic trust in the
brand existed, but some doubts had been raised;
• 3. Pseudo-rejectors, who were not sure of the Cadbury
brand – sometimes defending, sometimes rejecting it;
• 4. Rabid rejectors, those who had already judged and
condemned the brand.

23. Implementation of Actions
Internal 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

24. Project VISHWAS
• 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.

26. Why Big B?
• 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

27. As A Result:-
• Infestation was Storage-linked problem, not
manufacturing related.
• Sales volumes climbed back.
• Responsiveness of company.
• Significant upward movement in ratings

28. A leading business magazine Business Today, which
had described the incident as “an unedifying
instance [of responding] to the worms crisis by
pointing a finger at the dismal storage conditions
at the retail level,”
changed its stance. The article lauded the
company’s efforts and concluded, “invariably, this
[infestation] is the result of improper storage and
handling at the level of the retailer … [Cadbury]
can (and should) take heart from the fact that the
media (and consumers) forgive and forget quite
easily.” And finally Media perceptions about the
company had changed. Cadbury had recovered its
reputation.