Cadbury Dairy Milk Chocolate

Cadbury Dairy Milk Chocolate

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Stella Siman

ID: 24932477

Assessment 2: Major Assignment: Business Report

Due Date: 29th August 2013

Lecturer: Mr. David Henderson

MCD 2050

Marketing 1

Table of Contents

Executive Summary        

1. Industry        

2. Market        

3. Product Category        

4. Marketing Environment        

4.1. Microenvironment        

4.1.1. Suppliers        

4.1.2. Customers        

4.2. Macroenvironment        

4.2.1. Demographic        

4.2.2. Economic        

5. Major Competitors        

6. Cadbury Dairy Milk        

6.1. Type of Product        

6.2. Three Levels of the Product        

6.3. Branding Strategies        

6.4. Packaging        

6.5. Labelling        

7. Target Segment        

8. Personal Opinion        

9. Personal Recommendations        

Reference List        

Executive Summary

The purpose of this report is to review the appropriateness of Cadbury Dairy Milk for its target segments. This report includes the description of industry, market, marketing environment, evaluation of major competitors, description of Cadbury Dairy Milk chocolate encompassing the three levels of product, branding strategies, packaging and labeling, description of Cadbury Dairy Milk’s target segments and how Cadbury Dairy Milk’s marketing mix satisfy its customers needs and wants, and recommendations as to improve Cadbury Dairy Milk’s marketing mix.

Cadbury was founded in 1824 by John Cadbury who sold cocoa and drinking chocolate which he prepared himself using pestle and mortar. In the present, the brand offers delicious chocolates and drinks including the Cadbury Egg, Cadbury Dairy Milk chocolates, Flake, Wispa, Twirl and Éclair chocolates as well as Cadbury Bourneville drinking chocolate. Cadbury became part of Mondelez International family on 2nd February 2010.

The sources of information includes two marketing textbooks, a few journals relating to packaging, branding and labeling, company website and other marketing related websites.

The main findings include the current industry and market situation, how marketing environment affects Cadbury as an organization, the strengths of Cadbury’s competitors: Nestle and Mars, details about Cadbury Dairy Milk as a product and how its marketing mix satisfies its target segments’ needs and wants.

The conclusion of the report is that Cadbury Dairy Milk is appropriate for the segment Snacking Today and For Home. Although Cadbury is already a very successful confectioner with high net sales, it should still make improvements on the marketing mix of Cadbury Dairy Milk by designing products for heath conscious customers and the other 3 Cadbury’s segments: Functional, Giving, and Sharing Occasions.

1. Industry

Confectionery is defined as “sweets and chocolates considered collectively.” (Oxford University Press, 2013, Definition of Confectionery, para. 1). Department of Education and Early Childhood Development (2013) classified bubble gums, candy bars, caramel, chewing gum, chocolate, marshmallows and other small snacks with sugar as main ingredient as confectionery. Dun & Bradstreet Marketing Solutions (n.d., as cited in HighBeam Business, 2013) states that 3,738 establishments operated in the wholesale confectionery industry in 2010, about 40,800 people were employed and the total annual sales were around $3.6 billion. Candy Industry (2013) specifies top five leading confectioneries in the world are Mars Inc., Mondelez International Inc., Grupo Bimbo, Nestle and Meiji, and their net sales in millions ranged from $12,808 to $16,800.

2. Market

Market is “current and potential customers with needs or wants and ability and willingness to buy.” (Lamb, Hair, McDaniel, Summers & Gardiner, 2009, p. 69).

The global confectionery market had grown at a 3.2% compound annual growth rate (CAGR) since 2007 and generated USD 157,640 million by the end of 2011. Confectionery consumption volumes touched 15,148 million kg in 2011. It is predicted that the market performance will follow the same pattern (i.e. increase with a 3% CAGR) during 2011-2016, which will most probably push the market value to over USD 182,697 million in 2016. In terms of volume, it is forecasted to reach 16,712 million kg in 2016. Specifically, the Asia-Pacific confectionery market is expected to reach a volume of 2,927 million kg by 2016-end, and an increase of 12.4% since 2011 (Dow Jones & Company, Inc., 2013). The increase in market is mainly because of the availability in wide variety new products and most of them are providing health-related benefits such as gum (The Government of Canada, 2012).

Mintel (n.d.) stated that health has a major influence on the confectionery market as a whole and it causes confectioneries to introduce dark chocolate varieties. Research and Markets (n.d.) also clarified that most of the market growth in this developed world can be credited to niche sectors such as low fat, low-sugar, organic and Fairtrade products, and in order to ensure future success within the confectionery industry, new product innovation is crucial.

3. Product Category

Product is defined as “Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need” (Kotler, Burton, Deans, Brown & Armstrong, 2013, p. 276). Cadbury’s chocolate is classified as consumer product as normally people buy chocolate for themselves. Consumer product is defined by Kotler et al. (2013) as “products bought by final consumers for personal consumption” (p. 279). Convenience products are “consumer goods and services that people usually buy frequently, immediately, and with minimum product comparison and buying effort” and impulse products are products “purchased with little planning or search effort” (Kotler et al., 2013, p. 279). Cadbury’s chocolate is classified as convenience (impulse) product because it is easily affordable, distributed almost everywhere such as supermarket and minimarket, people buy it as they see it (without planning) and it does not require much shopping effort.