cadbury's international strategy

PAYAL JAIN – 28VIKASH JAISWAL- 30ASHUTOSH AGARWAL-03

SHURIT JOHN - 34ROMEL DHAWAN- 13SUNIL KARKERA- 38

TIMSR

INTERNATIONAL BUSINESS

1824 JOHN CADBURY OPENED BULL STREET SHOP

In 1824, John Cadbury, an English Quaker, begins roasting and grinding chocolate beans to sell in his tea and coffee shop.

1831 JOHN CADBURY OPENS FACTORY IN CROOKED LANE

The Cadbury manufacturing business was born in 1831, when John Cadbury decided to start producing on a commercial scale and bought a four-storey warehouse in nearby Crooked Lane.

1842 THE RANGE EXPANDS

By 1842 John Cadbury was selling no less than 16 varieties of drinking chocolate and 11 different cocoas!

1847 THE BUSINESS MOVES TO BRIDGE STREET

In 1847, the Cadbury brothers' booming business moved into a new, larger factory in Bridge Street in the centre of Birmingham.

1854

The brothers opened an office in London and in 1854 they received the Royal Warrant as manufacturers of chocolate and cocoa to Queen Victoria.

1861 RICHARD AND GEORGE CADBURY TAKE CHARGE

John's health rapidly declined and he finally retired in 1861, handing over complete control of the business to his sons Richard and George.

The brothers were just 25 and 21 when they took charge of the business.

1866 AN INNOVATIVE PROCESSING TECHNIQUE IS INTRODUCED

A new cocoa press developed in the Netherlands removed some of the unpalatable cocoa butter from the cocoa bean.

1875 FIRST MILK CHOCOLATE BAR

• In 1875, a Swiss manufacturer called Daniel Peter added milk to his recipe to make the first milk chocolate bar.

• 1875 Cadbury makes their first easter egg.

1879 BOURNVILLE 'THE FACTORY IN A GARDEN' IS BORN

• Birmingham architect, George H. Gadd worked closely with George Cadbury to draw up plans for the factory. The first bricks were laid in January 1879 and 16 houses for foremen and senior employees were built on the site.

1897 CADBURY MILK CHOCOLATE IS LAUNCHED

When Cadbury started making Cocoa Essence they had lots of cocoa butter left over, so they used it to make bars of chocolate!

1899The business became a private limited

company - Cadbury Brothers Limited - in 1899 following Richard Cadbury's sudden death at the age of 63.

George Cadbury became chairman of the new board; His fellow directors were Barrow and William A. Cadbury, sons of Richard and two of his own sons, Edward and George Cadbury Junior.

1900 EARLY OUTDOOR AND PRESS

ADVERTISING

1905 CADBURY DAIRY MILK IS LAUNCHED

1905 FIRST CADBURY LOGO COMMISSIONED

1906 BOURNVILLE COCOA IS LAUNCHED

At first, Cadbury resisted creating an alkalised cocoa - harmless carbonate of potash.

1908 BOURNVILLE CHOCOLATE IS LAUNCHED

Developed by George Cadbury Jr, it was the first time a British company had been able to mass-produce milk chocolate.

In 1910, Cadbury sales overtook those of Fry for the first time.

In 1914, Exports accounted for 40% of cadbury’s sales.

1919 CADBURY PURCHASES FRY'S

Cadbury bought Frys in 1919 and renamed the merger as British Cocoa and Chocolate Company.

1921: The firm opened its first overseas factory in Tasmania

19201921

1928 THE 'GLASS AND A HALF' SYMBOL IS INTRODUCED

By 1930 Cadbury had become the 24th largest British manufacturing company as measured by estimated market value of capital

• During World War II, parts of the Bournville factory were turned over to war work, producing milling machines and seats for fighter aircraft.

• Workers ploughed football fields to plant crops.

• As chocolate was regarded as an essential food, it was placed under government supervision for the entire war.

1939 SECOND WORLD WAR BEGINSInter-

war Britain saw cocoa replaced by chocolate (especially milk chocolate bars) as Britain's preferred product.

• Cadbury merged with drinks company Schweppes to form Cadbury Schweppes in 1969.

1978

• The company acquired Peter Paul, the third largest chocolate manufacturer in the United States for $58 million.

• Which gave it a 10 percent share of the world's largest confectionery market.

• In 1988, Cadbury was part of Cadbury Schweppes.

• That year, Hershey paid $300 million for Cadbury Schweppes’ US candy operations, which included Mounds, Almond Joy, and York Peppermint Patties, in addition to Cadbury products like Dairy Milk and Carmello.

2003 CADBURY SCHWEPPES BUYS ADAMS

Cadbury bought the world’s number 2 gum manufacturer, Adams, in 2003 and achieved its aim of leading the market.

On 19 January 2010, Cadbury was bought by Kraft Foods for £8.40 per share, valuing Cadbury at £11.5bn (US$18.9bn).

On 2 February 2010, Kraft secured over 71% of Cadbury's shares thus finalising the deal.

The confectionery business of Kraft became Mondelēz International, of which Cadbury is a subsidiary.

Product Name Unit Quantity Value

% of RM cost

to Total CostCocoa Beans Thousands

Kgs15,096 233.53 37.83

Milk (Powder/Liquid/Condensed)

Thousands Kgs

39,487 133.55 21.63

Sugar & Liquid Glucose

Thousands Kgs

46,075 87.51 14.18

Other Raw Materials Not Reported NA 65.07 10.54

Malt Extract Thousands Kgs

13,855 42.28 6.85

Dry Fruits Thousands Kgs

862 18.04 2.92

Total   617.29

The price of hazelnuts has increased by more than 60% this year to a 10-year high after bad weather devastated crops in Turkey the world's biggest producer.

About 70% of the world's hazelnuts are grown on steep slopes near Turkey's Black Sea coast, but this year's harvest is likely to be sharply down after hail storms and frost in late March destroyed hazel flowers at a critical moment in the growing season.

Meanwhile, almond prices are at a nine-year high, because of drought in California, the world's biggest grower, while a prolonged dry spell in Brazil in January and February reduced the coffee harvest, pushing up prices.

About 250 jobs are being cut at Cadbury’s factory in Birmingham alongside a £75m investment in new equipment that the company says will secure the future of Bournville.

Meanwhile, almond prices are at a nine-year high, because of drought in California, the world's biggest grower, while a prolonged dry spell in Brazil in January and February reduced the coffee harvest, pushing up prices.

About 250 jobs are being cut at Cadbury’s factory in Birmingham alongside a £75m investment in new equipment that the company says will secure the future of Bourneville.

INDIA

• REINFORCE TECHNOLOGY TO INTERNATIONAL LEVEL.

• BETTER TECHNOLOGY ONCE INDIA BECOME FREE ECONOMY

• INCREASING GIFT CULTURE SO INCREASE IN DEMAND

• LOWER CHOLESTROL THAN “MITHAIS”

• GROWING MIDDLE CLASS POPULATION SO INCREASEIN DEMAND

• LOW COST OF PRODUCTION SO BETTER PENETRATION

• INSTABLE GOVERNMENT• HIGHER TAXATION

POLICIES.

POLITICAL ECONOMICAL

TECHNOLOGICALSOCIAL

USA

• TECHNOLOGY PLAYS A VITAL ROLE IN ADVERTISING THE CADBURY PRODUCTS IN USA.

• CONCEPTS LIKE 3-D PACKING WILL DO WELL IN USA.

• CADBURY CHANGED THE PRODUCTS ACCORDING TO CUSTOMERS PREFERENCE IN USA.

• ADVENTCALENDER CADBURY DAIRY MILK SPECIALLY FOR CHRISTMAS.

• EXCELLENT GROWTH OF 18% IS EXPECTED IN SOUTH AMERICA.

• PEOPLE CAN SPEND MORE IN THE PRODUCTS OF CADBURY AS PER CAPITA INCOME OF PEOPLE IS HIGH.

• BANNED BRITISH CHOCOLATE BECAUSE OF SOME TRADEMARK ISSUE.

• PROBLEMS IN IMPORTING CADBURY PRODUCTS FROM UK.

POLITICAL ECONOMICAL

TECHNOLOGICALSOCIAL

MODEOF ENTRY IN FOREIGN MARKET

LICENCING IN INDIA

EXPORTING AND AQUASATION IN USA

INDIAChanged from Cadbury-fry(India) pvt.ltd to Cadbury

India pvt.ltd in 1977.Later on it was converted to public company.Presently 70% market share in India, highest Cadbury

brand share globally.First unit was setup near pune at Induri farm ltd. To

have good quality milk at economic cost.Further business expanded by public issue at premium

and par,huge capital was raised through equity.

USACadbury purchased Adams brand from Pfizer to

make entry in USA for $4.2 billion.Cadbury merged with Peter Paul in 1978, ten year

later, the hershey company acquired the chocolate business from cadbury.

Also Cadbury chocolate products have been sold in US since 1988 which is manufactured by Hershey.

In 1982 cadbury purchased Duffy Mott company who were manufacturing apple juices since 1842.

Rivalry among existing competitors

Threat of a new entry

• Threat of new entrant is low in both the countries.

• High capital investment

• Established brand

Threat of substitute products (moderate)

• Cereal bars and fruit bars

• Fruits

• Cakes and pastries

• Ice creams

• Cookies

• Traditional sweets

• Dry fruits

Bargaining power of buyers

• Power of buyers is high for Cadbury in both the countries.

• Availability of substitute products

• Availability of rivals products at lower costs

• No switching cost for buyers

Bargaining power of suppliers In January 2008, Cadbury in partnership with the United Nations Development Programme launched the

Cadbury Cocoa Partnership.  

£45 million was put aside to put into cocoa farms in Ghana, India, Indonesia and the Caribbean over a

decade.

Mondelez India Foods Private Limited currently runs 11 latest nurseries spread across 4 states in an effort

to provide seedlings easily to farmers.

The seeds are provided at a subsidized rate to farmers.

Mondelez India Foods Private Limited also provides free technical know-how to farmers, conducting

over hundreds of farm demonstration meetings every year.

For Skimmed milk powder, Cadbury takes it's supplies from Nova dairy products, India

Hersheys gets cocoa in through UTZ, Fairtrade USA and Rainforest Alliance.

Dairy Milk Operations - India

• Manufacturing plant in Thane, Pune, Gwalior, Hyderabad, Bangalore and Himachal Pradesh

• It has one cocoa operations office at Dharapuram (Tamil Nadu).

• Packaging is upgraded. • Milk chocolate• Effective Supply chain – Cadbury distribution

network encompasses 21400 dealers and 612000 retailers.

Dairy Milk Operations - US

• Manufactured and distributed under a franchise agreement by: Hershey Chocolate

• First ingredient to Hershey's made U.S. Cadbury chocolate is sugar

• 5% vegetable fat is added to compensate for variatons in cocoa butter

Marketing Strategy

4 P’s (INDIA)PRODUCT

Cadbury India operates in five categories – Chocolate confectionery, Beverages, Biscuits, Gum and Candy.Key Brands:-• Cadbury Dairy Milk• Dairy Milk Silk• Bournville• Oreo• Tang• Gems

PRICECadbury always has adopted Competitive pricing for basic products whereas has gone for premium pricing on other variants

PLACE

• Cadbury are directly sold to retailers and wholesaler

• Cadbury distribution network encompasses 21400 dealers and 612000 retailers

Promotion (Dairy Milk)

• Almost 80% of chocolate purchases are pulse buy

• Cadbury adopted aggressive marketing strategy.

• Use of emotional appeals for advertising. • TV ads• Banners

Marketing Strategy (US)

Products

• Candy• Gum• Breath mints • Cough drops

Price

Price ranges from 0.8- 16.64 dollars

Promotion

• Cadbury creates bizzare yet catchy ads• The ads help them to increase their sales by

5%-10%.• Vending Machines