Cadbury began operations in India in 1948 and enjoys a 70% market share. In 2003, a worm controversy affected Cadbury's sales which declined 30%. Cadbury launched a two-phase strategy, addressing media to share its perspective and introducing new sealed packaging. It hired Amitabh Bachchan for advertising and regained pre-crisis sales levels within 8 weeks. The crisis cost Cadbury losses but also improvements to its quality processes.

1. CADBURY INDIA
InIndia , Cadbury began its operations in 1948 by
importing chocolates
Cadbury India operates in four categories viz.
Chocolate, Confectionery, Milk Food Drinks, Candy
and Gum category
Cadbury enjoys a value, market share of over 70%
- the highest Cadbury brand share in the world!
In1824 John Cadbury began selling tea, coffee
and chocolate produced by himself

2.  Leading Global
CADBURY INDIA confectionery company
 Employ around 50,000
people and have direct
operations in over 60
countries
 After 60 years of existence
has five company owned
facilities at Thane, Pune,
Gwalior, Bangalore and
Himachal Pradesh
 4 sales office – New Delhi,
Mumbai, Kolkata and
Chennai
 The brand name „Cadbury‟ is
synonymous with chocolates
in India

3. A SWEET STORY TURNING SOUR
Worm controversy hit Cadbury in Oct 2003
Fungus layer on portions of its chocolates
Food and Drugs Administration ( FDA ) began seizure of
the chocolate from all outets across the state
FDA also ordered inspection of Stock at company‟s
Mumbai Plant
Peak Season Sale and outsourcing model affected due
to controversy

4. EFFECTS
 The heat of negative publicity melted Cadbury's
sales by 30 percent, at a time when it sees a
festive spike of 15 percent
 Net profit in 2003 dipped 37 per cent to Rs 45.6
crore as compared to a 21 per cent increase the
previous year
 Retailer stocking and display dropped, employee
morale especially that of the sales team was
shaken

5. REASONS
 Aggressive marketing by Company while
neglecting on the Quality of Retailers
 Lack of efforts to Educate Retailers and ensure
adequate hygienic storage conditions at retail
outlets
 Poor quality in packaging of product
 Issues related to transportation of product
 No Norms in terms of Storage for Chocolates

6. TWO PHASE STRATEGY
 Phase 1 : Presenting Cadbury‟s view
(October – December 2003 )
 the agency set up a media desk to ensure that
no media query went unanswered
 the Cadbury‟s Managing Director addressed
consumer concerns
 Project Vishwas (Trust)
 Editorial Outreach Program with 31media
editors across affected cities

7. TWO PHASE STRATEGY
 Phase 2 : Packaging
Change and
Communication
( January – March 2004
)
Advertisement weapon :
 Brand Ambassador to
reinforce the credibility
 Amitabh Bachchan, a
legendary Indian film star,
was chosen, as he
embodied the values

8. TWO PHASE STRATEGY
 Phase 2 : Packaging Change and
Communication
( January – March 2004 )
Packaging :
 New „purity sealed‟ packaging ( Jan 2004) -
investment of Rs 15crore on imported
machinery
 Metallic Poly-Flow was costlier by 10-15% but
Cadbury didn‟t hike the Pack Price
 Investment of millions of Dollars leads
to achieve a production process in 8

9. CAMPAIGN RESULTS AND MEASUREMENT
 Media Coverage
 all Media reports carried Cadbury‟s point of view
 378 clips in over 11 languages covering the new packaging and
its benefits
 Sales
 Sales declined drastically between week 1 to week 10 of the
crisis
 Within 8 weeks of introduction of new packaging and
communication sales volume reached to the pre-incident levels
 Image
 Upward movement in ratings amongst consumer
 Media‟s positive coverage and the trade‟s positive pre-
disposition played a huge part in helping in Cadbury regain its
reputation

10. COST OF QUALITY
 Prevention
 Design Quality Progress Reviews Requirements Documentation
Quality planning Supplier capability surveys
 Appraisal
 Unit Testing Regression Testing Automated Test Tools User
Interface Reviews
 Internal Failure
 Rework , Scrap, Re-inspection, Defect Tracking & Reports,
Requirement Changes
 External Failure
 Product Recall, Liability Costs, Help Desk/Warranty Claims, Lost
Sales/Market Share

11. EXTERNAL FAILURE COST OF CADBURY
 Sales declined by 30% during festival season as
compared to previous year
 In 2002 the NPAT was Rs. 72.72 cr. but after the
worm controversy in 2003 the NPAT was Rs. 45.6 cr.
which was down by 37%
 Cadbury spent additional Rs. 40 cr. on advertisement
to save its brand value
 Cadbury hired Advertising Agency O & M to bail them
out this worm crisis Cadbury's roped in
brand ambassador Amitabh Bachchan to do some
heavy duty endorsement to regain confidence
of consumer which cost Cadbury Rs. 15 cr

12. INTERNAL FAILURE COST OF CADBURY
 Lost Production Potential
 Loss of Morale of the Sales Staff
 Rework -Rebuild
 Problem Tracking
 Transportation / Storage Cost

13. PREVENTIVE COST FOR CADBURY INDIA
 The company already had an Internationally accepted
HACCP(Hazard Analysis and Critical Control Points) for food
safety system.
With this controversy the company had to incur cost on
 Complete overhauling of packaging and spend around Rs 15 cr
on Imported machinery to improve packaging of Chocolates
 Double Protection Packaging of Chocolates to counter the
allegations of FDA
 Various levels of Quality Checks at
 Its facilities and plants
 Carrying/Forwarding Warehouses and Distributor warehouses
 To ensure that its products are free of infestation

14. CONCLUSION
 Factors that led to Cadbury‟s sweet recovery from
crisis-
 Brand equity
 Customer‟s perceptions
 Media coverage
 New product introduction
“An optimist sees an opportunity in every difficulty
where as a pessimist sees a difficulty in
every opportunity” -Winston Churchill