cadbury worm crisis and management

1. CRITICAL SITUATION IN AN
ORGANISATION AND MANAGERIAL
SKILLS
PRESENTOR
R.KARTHIKEYAN ( 1st year M.B.A)
RA1952001020064

2. Cadbury Dairy Milk worm
crisis Management

3. INTRODUCTION
• British multinational confectionery company owned
by Mondelez International
• Headquarters in London and operates in 50
countries worldwide
• Origin - 1915
• Cadbury has 70% of market share in India
• Cadbury is best known for its confectionery
products including Dairy Milk chocolate

4. THE CRISIS
• In October 2003 customers in Mumbai complained about finding worms in Cadbury Dairy Milk
chocolates.
• The Maharashtra Food and Drug Administration seized the chocolate stocks manufactured at Cadbury's
Pune plant
• Sales volume came down very fast in the 1st 10 weeks which was the festival season
• The Company was slow out of the gates.
• It released a statement claiming that the infestation was not possible at the manufacturing stage, while the
FDA disagreed, prompting a tussle between the two.
• The media jumped on Cadbury, and the brand was under widespread assault.

5. Cadburys Statement
• Cadbury’s Managing Director addressed consumer that:
• Infestation is a storage-linked problem.
• It is safe to eat Cadbury chocolates.
• Consumers must exercise the same care in purchasing a chocolate as
they would when buying any food item.

6. How Cadbury Responded
• Cadbury took its advertising off the air.
• launched an educational PR project that targeted retailers.
• It kept the media updated through press.
• Cadbury imported new machinery and changed the packaging of its
Dairy Milk bars.

7. Cadbury's Challenges
• To restore confidence in the key stakeholders.
• Build back credibility.
• Make Customer believe about safety
• Increase the sale

8. Cadbury's Objectives
• To communicate that:
• Infestation could never occur at
the manufacturing stage.
• The problem was storage linked.
• Cadbury Dairy Milk continued to
be safe for consumption

9. Phase 1 (Presenting Cadbury’s view)
• Cadbury announced significant steps to restore consumer
confidence. Called Project Vishwas (Trust), this entailed:
• Retail monitoring and education program undertaken on a war
footing to address storage problems.
• Significant packaging changes to ‘reduce dependency on
storage conditions as much as possible’.
• A response cell with free number and e-mail id.

10. Phase 2
(Packaging Change)
• 4 months later, Cadbury began advertising more aggressively. By then,
the company's relationship with the media had improved greatly.A
media conference was organized in Mumbai to launch the new ‘purity
sealed’ packaging.
• To communicate these changes, Amitabh Bachchan was chosen to do
an audio visual message to build credibility of cadbury.
• A video news release with packaging shots and factory shots was
given to television channels to control the visual messaging.

11. The Results • Cadbury's sales in India increased by 30%.
• Within 8 weeks of the introduction of its new
packaging and advertising campaign, sales had almost
reached pre-crisis levels.
• The company announced 8 months after the incident
that its consumer confidence was back to normal.
• Cadbury has maintained its position at the top of the
Indian chocolate industry ever since.
• Public Relations department of Cadbury played a great
job in managing reputation and goodwill of the
company.

12. CONCLUSION
• 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.