Cadbury Fuse Case Study

 What are the stages of NPD?
 What are the stages of PLC?
 What are the strategies involved in NPD?
 When did the sales of Cadbury decline in the
recent past? Mention the incident
 What were the objectives of fuse?
 How did the name ‘Fuse’ came into
existence?
 What are the top 3 countries in confectionary
market? Mention rank of the countries
Symbiosis Institute of Telecom Management 9/17/2014

BY
SAI PRANEETH
UDIT PANDEY
VISHRANT SHAH
VIVEK NAIR

 A GENERAL TERM FOR THE PRODUCTS OF THE SEEDS OF THE COCOA TREE
USED FOR MAKING BEVERAGES OR CONFECTIONARY
HARVESTING:
EACH TREE GIVES 20-30 PODS. 1 YEAR OF HARVEST GIVES 450G OF
CHOCOLATE.
 RIPE PODS COLLECTED IN BASKETS BY HAND.
 PODS ARE SPLIT OPEN.
 SEEDS REMOVED,FERMENTED (WHITE PULP),DRIED AND SOLD.

 Each of the podgive 20-30 beans, the pods
weigh 500g and are 20cm in length.
 BEANS ARE COATED WITH WHITE PULP AND
ARE 2 cm LONG.

COCOA BEANS IN THE FACTORY
 WINNOWING
 ROASTING
 GRINDING
 PROCESSING
Extract cocoa butter
Pulverize into powder
Ready to be made into chocolate

 BASE- COCOA AND COCOA BUTTER
 SUGAR AND CONDENSED MILK ADDED
Liquid Product
Evaporated to make crumb
 REFINING (reducing the size of cocoa solid and sugar)
 CONCHING(taste,texture,smell)
 TEMPORING(finished and glossy look)

THE MARKET
 GLOBAL MARKET TO BE AROUND 11O BILLION USD.
 100 TONNES CONSUMED EVERY SECOND
 INDIAN MARKET WORTH 5562 CRORES (400 Kgs PER
MINUTE).
 TO GROW BY A CAGR OF 23%. BY 2018 WILL BE AT 341609
TONNES.

 GLOBAL MARKET DOMINATED BY NORTH AMERICA AND WESTERN
EUROPE.
 BRIC NATION ACCOUNT FOR 55% GROWTH IN CONFECTIONARY
GROWTH.
 PERCEPTION OR MISCONCEPTION? 87 % MALES AND 91% FEMALES
RELISH CHOCOLATE.

 MONDE IS DERIVED FROM THE LATIN WORD FOR WORLD AND DELEZ
IS A FANCIFUL EXPRESSION FOR DELICIOUS.
 INCREASE THE WIDTH OF CHOCOLATE CONSUMPTION WITH LOW
PRICE POINT PACK
 MAINTAIN MARKET AND IMAGE LEADERSHIP WITH MARKETING MIX
STRATEGIES.
 BE A SIGNIFICANT PLAYER IN THE GIFTING SEGMENT.

 PROMOTION OF BRANDS CARRYING MASS FRANCHISE WITHOUT
COMPROMISING QUALITY.
 BETTER PRODUCT QUALITY AND PACKAGING
 BETTER CAPITAL MANAGEMENT
 INCREASE MARKETT PENETRATION ( ESPECIALLY RURAL MARKET)

INCOME – 3.9 MILLION USD.

CADBURY- History
 Cadbury chocolates was started in Birmingham in 1824 by John
Cadbury.
 Cadbury Dairy Milk came up with the mix of milk and chocolate tray
which is pretty much how the product still is.
 No drastic change in the recipe of product but the packaging and the
representation and prominence of the ‘glass and half of milk’
logo has changed over a period of time.
 1904- A new recipe is perfected by George Cadbury for milk chocolate.
 1905- Cadbury launches Dairy Milk onto the market.
 1913- Dairy Milk becomes Cadbury’s best selling line.

Cadbury India- Introduction
 Began its operations in 1948 by importing
chocolates and then re-packing them
before distribution in the Indian market.
 It currently has a market share of 70% in
the chocolate market and is way ahead of
its competitors.
Sales
Cadbury 70%
Others 14%
Nestle 16%

 HEAD OFFICE:MUMBAI
 FACTORIES: MALANPUR(UP), BADDI(J&K),
THANE, MUMBAI, BANGALORE
 SALES OFFICES: DELHI, MUMBAI, CHENNAI,
KOLKATA

THE EVOLUTION: DAIRY MILK

 DEVELOPMENT
 INTRODUCTION
 GROWTH
 MATURITY
 SATURATION
 DECLINE

Introduction
 In the 1980’s CDM was positioned as the
‘perfect expression of love’, captured in
memorable memory of love.
 During the early 1990’s ,communicating that
it was the real taste of chocolate.
 In the 1994, came the path breaking ‘real
taste of life’ campaign.
 The strategy paid off- the brand Cadbury
grew by over 40%.

GROWTH
 1998- The new stage of growth for the brand
deals with popularizing consumption in a
social context ,especially in a more
traditional settings like weddings.
 ‘Khaane walo ka khaane ka bahana chhaiye’.
 Cadbury Dairy Milk aimed to substantially
increase penetration levels with the award
winning ‘kuch khaas hai’ campaign.
 The brand penetrated into smaller towns and
sales increase by 40%.

MATURITY
 With Bachchan they also launched their
positioning of ‘Kuch meetha ho jaye’ bringing in
the tradition of celebrating a joyous occasion in
India with sweets and now Cadbury Dairy Milk in
particular.
 The ‘Pehli Tareek Hai’ campaigns talked about
the importance of having Dairy Milk on your pay
day.
 ‘Shubh Arambh’ ads have brought back the old
charm of CDM with its very interesting insight of
mixing the tradition with the youth.

 LEADING KNIGHT IN THE CADBURY PORTFOLIO
 2nd LARGEST MARKET SHARE – 14%.
 5STAR AND 5STARS CRUNCHYS – WERE A HIT WITH THE MASSES.

 LAUNCHED IN 1996.
 TWO VARIANTS – XL,XXL
 MINI LAUNCHED IN 2003 – 2Rs.

 AIMED AT REPLACING TRADITIONAL MITHAAIS AND DRY FRUITS.
 HAS KEPT DIWALI AND RAKHI AS THE MAXIMUN SALE SEASON.

 FOUNDED BY A LOCAL CONFECTIONARY FIRM IN LONDON IN THE
1960s.
 A PART OF CADBURY BY 1971 TO BECOME THE SECOND LARGEST
BRAND IN THE COMPANY.
 IN 2006, LAUNCHED A CRUNCHY ECLAIRS WITH A HARD CARAMEL.

 ENTERED THE INDIAN MARKET IN 1968
 THE SUGAR COATED COCOA CHOCOLATE HAS CAPTURED THE
CONSUMER’S MINDS AND HEARTS ( ESPECIALLY KIDS).
 STILL GOING STRONG.

 LAUNCHED IN 2004-05.
 AVAILABLE IN REGULAR, COFFEE AND STRAWBERRY FLAVOURS.
 IN 5 AND 10 Rs PACKS.

 Consumer "Needs and Wants" Change
 Product Reaches The End Of Its Product
Life Cycle
 Competitors
 All Products Experiencing Problems

• Idea
Generation
• Idea Screening
• Concept
• Development
and Testing
• Business
Analysis
• Prototype
Development
• Market Testing
• Commercial-ization

Production and
purchasing skills

 In practice, most new products
are improvements on existing products.
 Generally easier and less risky than
developing completely new ideas
 Better understanding of the technologies
involved and customer preferences for that
kind of product
 Development process is usually less complex,
requires less investment and can be
completed more quickly.

 Businesses like to think in terms of a 'unique
selling proposition' (USP) - a clear reason why
customers should switch to your product
 Prepare a product specification listing
 Effective design is wide-ranging as well as
fulfilling the product spec, it includes
considering how component and processing
costs can be minimized.
 As the design progresses, you may have one
or more pre-launch stages when you test the
product.

 After product concept/marketing strategy is
developed, company can evaluate proposal’s
business attractiveness
 Estimating Total Sales
 Total sales is made up of:
1. First time sales
2. Replacement sales
3. Repeat sales

 Estimating Costs & Profits:
Costs estimated for 5 year period jointly by
1. Research & Development
2. Manufacturing
3. Marketing
4. Finance
 Based on the above data maximum
investment exposure,payback period,break
even point and risk analysis are determined

 To use a prototype to assess customer
reaction to the look and feel of a product
 Test for Functionality
 Test for Psychological aspects such as
color,size and taste
 Test for Looks/Styles.
 Test for Price Fitment.

•Confectionery - £4.9bn (chocolate sector £3.4bn)
•Biscuits - £1.7bn
•Snacks - £1.2bn
•Crisps - £1.1bn
•Ice Cream - £0.8bn.

• The ‘Fuse’ concept was developed after market
research identified the growth of snacking and a
definite gap in the market for a more chocolaty
snack.
• The name fuse was chosen to communicate the
fusion of snacking ingredients.
• Extensive testing was done by mixing various
ingredients and the results were multiplied into
repeat purchase and the volume of bars required
were calculated.
• 82% of people rated it as excellent, and 83% said
they would buy it again.

 Package design and brand name.
 Launched on a Tuesday, 24th September 1996
christened as the ‘Fuseday’.
 Extensive advertisements.
 1st time in 20 years Cadbury had a
nationwide launch.
 Sales of over 40 million bars in the opening
week.

 Important to analyse the product after
launch.
 Chocolate market grew by 9% in 1996
 19% of this growth is attributable to Fuse- a
brand which was there in the market for only
a quarter of a year.

 Stopped production in 2006.
 Increase in visibility of rival products
 At the same time lack of advertisements of
Fuse.

Cadbury Fuse Case Study

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