Chocolate industry

1. College : SNJB’s COE, Chandwad.
Class : MBA 1st year.
Guidance By : Hon. Prof. Mr. U. S. Kasar Sir.
Industry : Chocolate Industry.
Presenters : Gaziyani Md. Hasnain
Rahul O. Bhandari
Khushbu Mutha
Bhagyashree Mankar
Abu Swaleh

2. Chapter - 1
Industry Analysis –
The Basics

3. Nature of the Industry
1. The chocolate industry in India works at different levels that include
chocolate giants like Cadbury's , Dairy Milk, etc, small
chocolate manufacturers, chocolate retailers, chocolate importers
and people who make chocolates at home
2. Diversification and innovation is the need of the hour and chocolatiers
are exactly doing that to increase their client-base.
3. The population of India presents multiple avenues for companies to
foray into India. "The regulatory environment, too, has become
conducive for foreign players to operate in the country. There is
immense scope that the country presents to players in terms of hiring
home grown talent to grow business, given the educational boom.
This clearly means that the three main factors like demand for
products, conducive regulations and customized talent are abundant
in India, which makes it inevitable for foreign players to ignore India.

4. Players in the Industry
1. Cadbury's India Limited
2. Nestle India
3. Amul India
4. Gujarat Co-operative Milk Marketing Federation
5. Cocoa Manufactures and Processors Co-operative (CAMPCO)
6. Bars Count Lines Wafer Panned Premium
7. 5-Star, Milk
8. Mars chocolate
9. Krafts Food
10. Ferrero

5. Market share of top 3 and bottom 3 players
Cadbury Nestle Amul Mars Krafts food Ferrero
70% 24% 3% 1% 1% 1%
Market Share
70%
24%
3%
1%
1%
1%
Market share of top 3 and bottom 3 players
Cadbury Nestle Amul Mars Krafts food Ferrero

6. Classification Of Players
Market Leader
• Cadbury
Challengers
• Nestle India
• Amul India
Followers
• CAMPCO
• Bar Count
Nichers
• Mars Inc.
• Treat Perk
• Tiffins

7. Positioning and strategies of Key Players
1 - Dairy milk
• The Cadbury ad campaign designing Team at Saatchi and
Saatchi aimed at first retaining shoppers and ensure that they do not
move to other brands. The Cadbury Rich dry fruit collection was
projected as the ultimate gifting solution for festivals like Diwali.
• The campaign aimed at creating a platform for chocolates that
superseded all kinds of gifts and other forms of sweet. The campaign
communication was to be done in such a way that it is projected that
each and every range of Cadbury chocolate and toffee collection is
highlighted. The idea was to show that Cadburies owned the gifting
space.
• With the help of SAB retail solutions, the Cadbury celebrations
campaign was created in such a way that shoppers could browse
through the entire collection at one place.

8. • Special displays units of size 10*10 ft were
created and assembled in one store.
• Mega display units were created in stores
like Reliance mart, Star bazaar with a height of 10
* 10*9.
• Floor stack claddings were used in Hyper
City and Metro Cash and Carry with a height of
6*6 and bigger.
• Besides these a variety of display tools like
Standee, Box Gates, Gondola branding
were deployed across various
hyper markets across India.
• The impact of Campaign was felt all across
India and projected the brands as an
ultimate gifting solution.

9. Positioning and strategies of Key Players
2 - Amul India
 The tag line "for someone you love",
again symbolizing it as something very
precious for your loved one creating a
niche image.
 For people who are very brand,
taste, quality conscious.
 Amul chocolate ads always had an
emotional appeal justifying the tagline.
 Lot of varieties of chocolates from
different flavours to fruit and nut to dark
chocolate catering to the tastes of all the
consumers.
 Also different packaging for different
flavours and for different festivals.
 Two cute babies always there for
Amul chocolate ads.

10. Positioning and strategies of Key Players
3 – Nestle India
•Nestlé India put it, "It is the result of an experience of 135 years that
Nestlé gives us ‘Good Food, Good Life‘."
•Nestlé primarily focuses on the areas where it can be the market
leader.
•It believes that one cannot take a competitor head-on where the latter
already has considerable competitive advantage. So the focus is to
explore other areas.
•It develops new products like Munch, which are somewhat new in
concept and take Nestlé to the leading position. Nestlé India has its own
local application laboratories to be able to access modern technology
and to check that the chocolates meet certain quality standards. Nestlé
chocolates are more heat-resistant than the other chocolates in the
market.

11. •The company having such beliefs ought to have the second highest
market share in the Indian as well as the world chocolates and
confectionery market. It is consistently bridging the gap between its
position and the leader’s position, with the help of its flagship brands
Nestlé Kit-Kat, Nestlé Munch and Nestlé Milk Chocolate (Nestlé Milky
bar).

12. Marketing Strategy Of Major Players
1-

13. PRODUCT
A - PRODUCT VARIANTS
•Currently Cadbury India operates in four categories viz.Chocolate
confectionery, milk food drinks, candy and gum category• cadbury dairy
milk, 5star, perk, éclairs and celebrations
•candy category – halls, bubble gum brand bubbaloo
B - PRODUCT INNOVATIONS
• 5 Star
Consumer Feedback Suggested That The Old 5 Star Wastoo Chewy, And
People Complained Of It Sticking To Theirteeth. It Was Made Softer And
Melted Easily In The Mouth& Introduced As 5 Star Crunchy
•Perk:
Perk Was Made Much Lighter And The Size Of The Barincreased To
Match Nestle’s Munch. Perk Had Been Underfire From Nestle’s Deadly
Duo Of Kitkat And Munch, Butafter The Relaunch, Its Marketshare Is Two
Per Centmore Than Kitkat’s. And, The Five-year-old Brand Is Nowalmost
As Big As The Decades-old 5 Star In Size, Both Inthe Region Of Rs 50-55
Crore.

14. C - PACKAGING
• The packaging was changed to include asealed plastic wrapper inside the outsidefoil.
Cadbury’s launched A new 'purity-sealed' packaging for its flagshipproduct, cadbury
dairy milk. Over the next few weeks Cadbury will work towards introducing either A heat
sealed or a flow-pack packaging that offers A high-level of resistance to infestation from
•Improper storage. Cadbury invested nearly Rs. 25 crores (Rs. 250 million) this year on
new machinery for the improved packaging.
PRICE
•The rs. 5 price point accounts for more than half of all chocolate sales
•Today, Cadbury has four products at this price point: cdm, perk, 5 starand gems — and
the five-rupee cdm bar is its single largest-selling sku.
•“This is a potent price point in India, because the average purchasingpower is
abysmally low,” is what industry analyst have to say
A - VOLUME LED GROWTHSTRATEGY
•Cadbury has followed a well-planned strategy of fuelling volume growth by introducing
smaller unit packs at lower price points. Simultaneously, the company seems to have
astutely juggled with the larger pack sizes and raised prices to a degree higher than
what appears at face.

15. B - HIRES AT KEARNEY TO CURBCOSTS
•Cadbury India appointed management consultancy firm at Kearney to draw up strategy
to control costs in several areas, including sourcing of raw materials and packaging.
•The consultancy firm will also look at the sourcing of direct and indirect materials like
renegotiating with suppliers for longer term contracts and vendor management. Other
costs (indirect expenses) like travel costs and hotels were also being studied.
C - EARNINGS SENSITIVITYFACTORS
•Cocoa bean prices: domestic as well as international prices of key raw material -
cocoa have significant impact on margins.
•Excise duties : changes in excise levied on malt and chocolate influences end
product prices and thereby volume growth as well as margins.
•Changes in custom duties and foreign exchange fluctuation: as 20% of raw
material is imported, changes in custom duties & foreign exchange fluctuations
have significant impact on the final cost of the product.
•Competition from MNCs like nestle as well as imported brands. Increasing
competition puts pressure on advertisement budget and margins. However on the
positive side, it helps in expanding the market.

16. PLACE
A - PLANT LOCATIONS
•In India, Cadbury began its operations in1948 by importing chocolates. After 60years of
existence, it today has five company-owned manufacturing facilities at thane, induri
(pune) and malanpur(Gwalior), Bangalore and baddi (Himachal Pradesh) and 4 sales
offices (new Delhi, Mumbai, Kolkata and Chennai). The corporate office is in Mumbai.
These factories churn out close to 8,000 tones chocolate annually
B - DISTRIBUTION
•Chocolate needs to be distributed directly, unlike other fmcg products like soaps and
detergents, which can be sold through wholesale network. 90% of chocolate products
are sold directly to retailers.
•Cadbury's distribution network used to encompasses 2100 distributors and 450,000
retailers to avoid cannibalization of its higher priced products from lower priced ones,
Cadbury is setting up two separate distribution channels –one for core business & other
for mass markets
C - NATURE OF RETAIL OUTLET
•Chocolates are primarily sold through kirana stores, gift stores, medical stores,
canteens, pan-bidi stores, bakeries, sweetshops etc. This is true for chocolates also.
The space allocated for the chocolates was less when compared to the total area of the
shop. Of the space allocated for chocolates, Cadbury brands occupied more than nestle
brands.

17. PROMOTION
•Advertisements
The advertisement aimed at conveying the idea that no specific occasion is required for
consuming cdm
•Celebrities endorsements
Cadbury roped in preity zinta for its perk brand. Preity zinta’s angelic dimples laid the
foundation for what would become the Indian teenager's favorite snack. After this
campaign, perk’s sale surged
•The big ‘b’ factor
The big factor that has pushed up cdm sales is theamitabh bachchan campaign.
Cadbury appointed amitabh bachchan as its brand ambassador
•From kids to youth
Indian chocolate market is almost totally depended on purchases of kids. While Cadbury
is trying to sell indulgence to adults, kit Kat is selling 'ritualistic' break to teenagers/
young adults. This is reflected in the changing advertising patterns cross different
channels.

18. Marketing Strategy Of Major Players
2-

19. Product
The chocolates have a wide range to suit different targeted segments
• Variety – Classic, Munch, Milky bar, etc.
• Design – Plain bars, filled, chocolate covered wafers,
• Large number of Brand names
• Sizes and Packages – wide range to suit key price points and occasions

20. Price
• Pricing – In line with Cadbury’s offerings
• Incentive schemes – e.g. Maha munch give more value for the same price
• Priced at key price points like Rs.5

21. Place
• General FMCG distribution structure.
• Strong coverage in urban areas, developing in rural.
• New Regional Sales Offices to increase width and penetration and focus in rural
areas.
Promotion
•Brand ambassador- Rani Mukherjee for munch ( targeting youth)
•ADVERTISING
•Decreased dependence on children’s TV channels over recent years
•33% of total industry spend but near equal spend on each brand with rival offerings
from Cadbury.

22. Geographical Spread
1 - Cadbury

23. Geographical Spread
2 - Nestle

24. Worldwide Market share of all players of
Chocolate world

25. Professional Trade bodies
1. Fine Chocolate Industry Association (FCIA)
2. American Association of Candy Technologists (AACT)
3. National Confectioners Association
4. The Associated Chambers of Commerce and Industry of India

26. Online Presence
1. NESTLE
•www.nestle.in/
•www.nestle.com/
•www.nestlecareers.co.uk/
•www.nestle.co.uk/
•www.nestle-nutrition.com/
•www.nestlegoodfoodgoodlife.com/
2. CADBURY
• www.cadburyindia.com/
• https://www.cadbury.co.uk/
• www.cadbury.co.nz/
• https://www.cadbury.com.au/
• www.cadbury.co.za/