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A Report onPROGRAMS TO ENHANCE VISIBILITY OF LARGE CADBURY SKUs AND DRIVING MARKETS AS PER NEW CONFIGURATIONS

Submitted By: Rituraj Negi Cadbury India Limited Date of Submission 23/05/2008

CADBURY INDIA LIMITED

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A Report onPROGRAMS TO ENHANCE VISIBILITY OF LARGE CADBURY SKUs AND DRIVING MARKETS AS PER NEW CONFIGURATIONS

Submitted By: Rituraj Negi(07BS3464)

A report submitted in partial fulfillment of the Requirements Of the MBA program of ICFAI Business School.

Distribution List: Prof. SPR Vittal IBS Hyderabad Mr. Rajesh Kanwar Sr. ASM (Cadbury) - Punjab


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AcknowledgementsI dotingly thank Mr. Rajesh Kanwar, Senior ASM, Cadbury India for Punjab. His able guidance has proved effective in both personal and professional life. Working with him gave a thorough insight of the fact that the clocks of people at the top brass have 48 hours in a day indeed. His team of efficient Sales Officers and the ancillary unconditionally extended full support.

I would like to express my deepest gratitude and sincere thanks to my Faculty Project Guide Prof. SPR Vittal (IBS Hyderabad), for his valuable suggestions, scholarly guidance, and constant encouragement at every step of the project.

I would also like to thank Mr. Pawan Arora (Sales Officer, Chandigarh), whose guidance and constructive criticism, has been a welcoming help that saw me through the completion of my project.

Last but not the least, I express my profound gratitude to the team of CIL, Chandigarh for providing a congenial and competitive work environment, which was a catalyst for a great learning experience.


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Table of Contents1. Abstract.. 9 2. Introduction ... 12 2.1 Objective of the Project ... 12 2.2 Need and Importance of this Project ..... 14 2.3 Methodology .... 15 2.4 Industry Trend.. 16 2.5 About the Company.. 19 2.6 SWOT Analysis of Cadbury India.. 20 2.7 Sales Hierarchy of Cadbury..... 23 2.8 Distribution Network of Cadbury... 24 3. Description of the Project...... 25 3.1 Process and Planning . 25 3.2 Retail Environment .... 25 3.3 Why do we need these Visibility programs? .. .. 25 3.4 The visibility programs ... 26 3.4.a Cadburys Purple King Program 26 3.4.b Cadburys Purple Prince program . 29 3.4.c Bournvita Ke Baadshah ... 29 3.5 Line Booked Per Call . 31 3.6 Penetration of other lines ... 32 3.7 Penetration of Bytes 32


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3.8 Outlet Penetration . 32 3.9 No Order Parties ... 33 3.10 Damages ... 34 3.11 MSS Compliance . 35 3.12 Distributor ... 35 3.13 Cadbury Depot ... 35 4. Segment and RE classification .. 40 5. Brief Overview of the classification of RE. 42 5.1 High End Grocers .. 42 5.2 Food Stores . 42 5.3 Modern Trade 43 5.4 Chemists .. 43 5.5 Pan Kiosks ... 43 5.6 Low End Grocers .... 44 5.7 Wholesaler ... 44 6. Measuring the effect of Visibility programs....... 46 6.1 Effect of Visibility Programs in Purple Star Outlets ... 46 6.2 Comparison of the sales of various categories... 48 6.3 How the big lines have moved in Purple Star Outlets.. 52 6.4 Effect of per sq. ft. increase in shelf space on sales... ... 53 7. Market Scenario April 07 v/s April 08.. 55 7.1 Comparison of the Sales of AD .. 57 7.2 Comparison of the Sales of BC .. 57


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7.3 Comparison of the Sales of Bytes .. 58 8. Whole Sellers. 60 8.1 AD Wholesale .. 61 8.2 BC Wholesale .. 62 8.3 Bytes Wholesale .. 62 9. Breakup of the Outlets(RE wise). 63 9.1 RE wise Penetration ... 64 9.2 RE wise LBPC .... 65 10. Comparisons.... 66 10.1 AD Penetration....... 66 10.2 CDM Group penetration... 68 10.3 CDM Rs. 5/- Penetration... 69 10.4 5 Star Rs. 5/- Penetration.. 70 10.5 Ulta Perk Penetration ... 71 10.6 Total Outlet Penetration ...72 10.7 LBPC .. 73 10.8 Damages . 75 10.9 MSS Compliance ... 77 11. Analysis of Survey on Bournvita 500 gm Refill pack .. 78 12. Analysis of Damages ... 85 13. Tambola for RDSMs .. 87 14. Emotional Marketing .. 90 15. Appendix A Map of Chandigarh marking areas covered by RDs... 101


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16. Appendix B Beat Routes of RDSMs... 102 17. Appendix C Comparison of figures of last 3 months ... 104 18. Appendix D MSS List for all REs .. 108 19. Appendix E Increase in shelf space in Purple Star Outlets . 111 20. Appendix F Questionnaire used for Survey on Bournvita .. 112 21.References. 115


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List of Tables1. Sales data for April 07(Purple Star Outlets) . 46 2. Sales Data for April 08(Purple Star Outlets) 47 3. Total Sales April 07 ...55 4. Total Sales April 08 ...56 5. Wholesale April 07 60 6. Wholesale April 08 ....60 7. RE wise performance 64 8. Damages Top 10 products .85 9. Damages Top 13 outlets .86


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List of Figures1. All Drinks Sales - Comparison Chart(Purple Star Outlets) ... 48 2. Base Chocolates Sales Comparison Chart(Purple Star Outlets) ..... 49 3. Bytes Sales Comparison Chart(Purple Star Outlets) ... 50 4. Big Lines Sales in Purple Star Outlets .. 52 5. All Drinks Sales Comparison Chart(Overall) ... 57 6. Base Chocolates Sales Comparison Chart(Overall) . 57 7. Bytes Sales Comparison Chart(Overall) 58 8. All Drinks Sales Comparison Chart(Wholesale) ...... 61 9. Base Chocolate Sales Comparison Chart(Wholesale) ...... 62 10.Bytes Sales Comparison Chart(Wholesale) ... 62 11.Breakup of outlets(RE wise) ...... 63 12.RE wise penetration 64 13.RE wise LBPC . 65 14.All Drinks Penetration Comparison Chart ... 66 15.CDM Group Penetration Comparison Chart ... 68 16.CDM Rs. 5/- Penetration Comparison Chart ... 69 17.Five Star Rs. 5/- Penetration Comparison Chart . 70 18.Ulta Perk Penetration Comparison Chart 71 19.Total Outlet Penetration Comparison Chart 72 20.LBPC Comparison Chart(Last three months) .. 73 21.LBPC Comparison Chart(Apr 07 v/s Apr 08) .... 74 22.Damages Comparison Chart ... 75 23.MSS Compliance Comparison Chart . 77


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AbstractThe project deals with enhancing the visibility of large Cadbury SKUs and driving the markets as per new configurations. The project aims to ensure that the Cadbury SKUs are sold to maximum number of outlets and after they reach the outlets they are placed with proper visibility. Currently, Cadbury is running three Visibility programs, namely Purple King, Purple Prince and Bournvita ke Baadshah. The first two programs are meant for Cadbury Chocolates, Bytes and Gift Packs, whereas the third program is for Bournvita. It was my responsibility to see that these programs were properly implemented in as many outlets as possible. The implementation of these programs was done in four phases: Phase I In the first phase, we studied the market and identified the outlets which can be enrolled in these visibility programs. The outlets were chosen on the basis of the sales that they have done of Cadbury products in the past. Phase II Then we visited these outlets and negotiated for the required Shelf space. After this, the outlets which agreed to give us the desired shelf space were enrolled for the visibility programs. In all, 59 outlets were enrolled in Purple King Program, 8 outlets were enrolled in Purple Prince Program and 58 outlets were enrolled in Bournvita ka Baadshah program. Phase III After enrolment came the phase of merchandising, in which our merchandisers placed Cadbury products in the agreed shelves in different outlets, and marked those shelves by putting posters and stickers of Cadbury there. Phase IV After the merchandising had been done, we had to regularly check whether the space allocated to Cadbury is stacked with Cadbury products only. We have been keeping a regular check on these outlets, and if they follow the norms of the visibility programs properly they will be awarded with payouts (on a quarterly basis). In all, 58 outlets were enrolled in Cadburys Purple King program, 8 outlets in Cadburys Purple prince program and 58 outlets in Bournvita ke Baadshah


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After implementation of these visibility programs, we measured the effect of visibility programs in big Purple Star Outlets. There performance was monitored using WinOmkar (a customized Cadbury software), and the growth was checked to measure the effectiveness of Visibility programs. In Purple Star outlets the visibility programs proved to be very effective. Sale of Chocolates went up by 38%, and the sale of All Drinks category went up by 18%. Then, I was also supposed to look after the brand wise penetration of Cadbury products. I am happy to say that the penetration of almost all the brands has went up (in comparison to the figures of the same time frame of the last year). This was mainly because we were working on increasing the LBPC (Line booked Per Call), which is the average number of lines sold in all the outlets. We have worked hard to improve the LBPC and currently it stands at 8.2, way ahead of the LBPC of 7.5 in February and 7.01 of April last year. Thus, as we were trying to improve LBPC, penetration of some problem brands also moved up, for example penetration of Ulta Perk reached 52.5% in April (moving up from a penetration of 34% in February) Also, the total outlet penetration had to be taken care of. We took this thing seriously and it resulted in the decrease in the total number of No Order Parties. In April 08 there were only 120 No Order Parties, compared to last Aprils 252. Currently, the outlet penetration is at 82%. I regularly accompanied the RDSMs (sales men) on their beats and study the market closely to understand the scenario of the market and to investigate the factors which may affect the penetration and visibility of Cadbury products. In all, I visited 600 odd outlets, big and small. These visits have given me a better understanding of the Retail Environment and have resulted in the methods that we have used for improvement in the penetration and LBPC. We also worked on reducing the damages. Currently the damages stand at .89% of the total sales made by Cadbury. We did an analysis of the Damages and found that the main culprits are Bytes and Celebration RDFC packs. I have also started to understand that how the SKUs move in different types of outlets like High End Grocers, Food stores, Chemists etc. This classification of outlets has been done by the


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Cadbury on the basis of their Shop space and sales. Since, we cannot work with the same strategies on all types of outlets; therefore we need to design different game plans for different outlets. Also, in my visits to outlets I checked whether the outlets have been classified correctly or they need to be re-classified. For example an outlet classified as HEG may not really be an HEG as it does not fulfill the space and sale criteria. Though, I did not find any such discrepancy and all the outlets that I have visited have been correctly classified. MSS compliance was one more thing which I had to improve. MSS stands for Must Sell SKUs. Must Sell SKUs have been defined by the company for different REs. Currently the MSS compliance is at 51%. The MSS compliance is targeted at 70%, so we need to work hard in this department. We also conducted a survey to understand why 500 gm refill packs are not doing well in the market. On the basis of the results of this survey we pointed out measures which can be taken to improve the sales of BV 500 gm refill pack. In the end, I also made an incentive plan for the RDSMs on the lines of Tambola. The outlets which have been enrolled under the visibility programs will be checked regularly by Cadbury representatives till the end of this year.


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INTRODUCTION Objective of the ProjectI. Objective of the Project: The main aim of the project is to enhance the visibility of Cadbury Chocolates, Bournvita and Bytes to push the sales and fight the upcoming competition from various domestic as well as international players. Cadbury is the best selling chocolate brand in India and these programs have been designed to ensure that Cadbury stays at the top. The many tasks that we have to perform during the course of the project have been designed to accomplish various small sub-objectives which will contribute to the main objective of the project. The various sub-objectives are as follows

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The project aims at understanding the RE or the Retail Environment. RE refers to a group of outlets which are similar in shopper

perception/needs/behavior. Now, we have to set different targets for outlets falling in different RE categories. Therefore, we have to study RE closely and make plans for them accordingly. We keep track of the sales figures of various outlets through MeraNet and RD.Com, which helps us in designing plans for them.

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This project also aims at exploring and understanding the various issues relating to the sales of Cadbury products in the Summer Season. Seasonality is one big factor which affects the sales of Chocolates and Malted Food Drinks. Sales go up in the Winters/Festive Season and take a sharp nosedive during summers. With the help of the visibility programs we tried to reduce the effect of seasonality in sales.

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One major objective of the project was to improve the Line Booked per Call (or LBPC). LBPC stands for the average number of lines that a salesman sells at an outlet. LBPC was targeted at 13.


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We also tried to understand that why some brands are not doing well in the market. We checked whether visibility can help those products in any way or there are some other measures that we have to take for those products .It will make us better prepared for the similar problems that may arise in the future.

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The project also aimed at reducing the total damages. Damages reduce the total profits to a large extent. Damages can take place anywhere, be it the Depot, Distributors Godown, Outlet or while transporting. The target was to keep the damages below 0.4%.

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The project also aimed at increasing the penetration of various lines, for example Rs. 5/- lines, Ulta Perk etc.

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Overall Outlet penetration is one thing that we had to improve during the course of the project. Overall Outlet Penetration was targeted at 90%.

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For increasing the penetration, we had to reduce the number of No-order parties. No-order parties refer to those outlets which have not purchased Cadbury products in last one month.

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Also the MSS compliance had to be taken up to 70%. MSS stands for Must Sell SKU. Number of Must Sell SKUs for different REs has been decided by the company.

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As for me, all the above-mentioned things will give me a better understanding of the distribution network of Cadbury and how the Primary/Secondary sales are handled.


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Need and Importance of This ProjectFirst, of all this type of study has not been done by Cadbury in the past. Companies always talk about the importance of visibility in the process of selling FMCG product, but this is the first time that the direct effect of visibility on sales is being measured. It will give company a better insight of the market scenario and how/how much SKUs should be placed in different types of Retail Environments. While, working on this project we also tried to figure out the best way to put maximum number of Cadbury products in maximum number of outlets. Now, Cadbury has a large product portfolio, and it wants to focus on each of its product. This project makes an effort to track down the movement of various brands and categories in the market. It would help the company to decide better strategies for its brands. One thing which always troubles a company is the losses that it suffers due to damages. This project tries to investigate reasons for high damages and the ways to tackle them. All in all, these things will help the company in gaining a better understanding of the market and to maximize sales and profit.


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MethodologyFor the visibility programs I visited the shops personally and checked if they can provide us with the desired space. We also had to interview the retailers for getting a better understanding of their perception of the brands. For the three different programs, we had different lists of shops which can be enrolled in those programs. These lists were prepared on the basis of the earlier sales and the existing space in those shops. First, we tried to enroll these shops in the visibility programs and then we moved on to other counters. Then Sample surveys were conducted to understand the sales patterns and also to understand the standing of the competitors in the market. Use of Questionnaires was also taken to conduct surveys on Bournvita and its competitors. For, measuring the affectivity of per sq ft increase in shelf space on sales, we calculated the increase in shelf space by observation and by interviewing the retailers to know the shelf space that was there during last April. For comparing the incline or decline in penetration or LBPC, we needed accurate sales figures. We used three softwares namely MeraNet, WinOmkar and Rd.Com for this purpose. All the required data was obtained from these softwares. WinOmkar is a customized software package being used by Cadbury. At the distributor level all the billing is done in WinOmkar. WinOmkar generates all the reports such as reports on LBPC, No-order parties, penetration etc on the basis of billing. WinOmkar replaced Rd.Com in 2006. Rd.Com was a similar software which comes in handy when we have to extract any old data for comparison purpose. MeraNet is an online database of Cadbury in which the data is fed by WinOmkar. It can be accessed from anywhere in the world to retrieve reports of the sales of Cadbury products. It is available at www.cilsales.net. One needs an authentic username and a password to access the reports on MeraNet. I also took reference from some of the previous projects done by my seniors in Cadbury. I got all the figures and recommendations cross checked from Mr. Pawan Arora(Sales Officer, CIL Chandigarh).


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Industry trend:The confectionery industry in India is approximately divided into: Chocolates Hard-boiled candies clairs & toffees Chewing gums Lollipops Bubble gum Mints and lozenges The total confectionery market is valued at Rupees 41 billion with a volume turnover of about 223500 tonnes per annum. The category is largely consumed in urban areas with a 73% skew to urban markets and a 27% to rural markets. Hard boiled candy accounts for 18%, Eclairs and Toffees accounts for 18%, Gums and Mints and lozenges are at par and account for 13%. Digestive Candies and Lollipops account for 2.0% share respectively. Overall industry growth is estimated at 23% in the chocolates segment and sugar confectionery segment has declined by 19%. Cadbury with Dairy Milk, Perk, Gems, 5 Star, Celebrations, Bytes, Dairy Milk Eclairs and Halls brands is a key player in the chocolate, eclairs and mints segments. Milk Beverages: The Milk Beverages industry is valued at Rupees 16.1 billion with an annual turnover of approx 63,000 tonnes. As per Nielsen estimates the industry is growing at 10.1%. Cadbury is a key player in the segment with Cadbury Bournvita and Cadbury Bournvita 5 Star Magic


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Indias branded Chocolate industry is now worth 2,200-crore. Cadbury India leads the pack with a market share of 70%. The Indian chocolate industry has witnessed many innovative sales promotion activities in the recent past. Companies are trying to increase market share in stagnant to declining (volume terms) market in order to retain consumers, to encourage switching, to induce trials and liquidate excessive inventories. With the presence of so many brands the competition had increased severally leading to fight for market share and shelf space. Inflationary trend has made both the consumer as well as trade deal prone. Indias shopper is predominantly the one who prefers to walk down to the nearest mom-and-pop shop for buying his/her convenience products in spite of the extensive organized development of modern retail. Therefore, the penetration and proper visibility in the maximum number of outlets, both big and small, are the main focus areas that companies need to work upon. For most of our history, retailers have been a source of major potential that needs to be exploited with the growing trends of new retail formats. With the proliferation of new brands in newer product categories, coupled with growing competition in the market, especially FMCGs are looking to traditional retail outlets to be a source of volumes and growth. However, getting an insight of retailers mind still remains an unexplored area, a study of which will reinforce the company managers to further enrich their trade promotion schemes. Framing a trade promotion scheme for any product for retailers requires an understanding of retailer perceptions. They need to be made aware of the profits that they may generate if they follow the trade promotion scheme properly. The idea behind this project is to gain an understanding of the effect that Visibility can have in the traditional retail outlets. To measure the effect of maximum visibility combined with maximum penetration both brand wise and Outlet wise, is the main purpose of this project. There used to be a time when companies were happy if overall profits grew on regular basis. This is an era of tough competition, and a good company needs to study the brand wise breakup of the revenues that it is generating. Companies want to build stronger brands, and for this, first the retailers need to be convinced to keep the brands in their shelves.


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The method used to achieve the above aim is to gain an understanding of the traditional retailers on various counts and to see what influences the formation of their brand images of different brands, because brand image is an important determinant of the purchase decision. According to a report from FICCI, the chocolate industry is expected to register a growth of 10% every year and also we have witnessed a rapid growth in volumes in the chocolate industry. The profitability of Cadbury over the last few years has been increasing due to increase in the product demand and consumption. However there will reach a stage in future where the prices may not rise beyond a certain stage and there will be a need to increase volumes. To combat this situation Cadbury has to focus on increasing the nature of trade promotion scheme for chocolates. Widespread usage of sales promotion activities in Fast Moving Consumer Goods (FMCG) sector makes it imperative that manufacturers take into account channel member and consumer perceptions before planning such programs. A couple of years ago, Cadbury India started the Purple Star program for traditional retailers, where it tailors promotions and schemes for selected stores. Under the Purple Star program, Cadbury is helping outlets improve storage conditions by providing special hardware such as visi-coolers and dispensers. This hardware also helps in increasing the vending space and provides much required direct consumer interaction. The Purple Star program currently accounts for around 8% of the total outlets. While the focus is on high throughput outlets, company is focusing on absorbing more outlets under the program to improve its effectiveness. The design following this project is to explore Cadburys Current retail promotion practices for the purpose of evaluating its effectiveness in the premium outlets for all the categories at Chandigarh. The Project also attempts to study the impact of current retail promotion practices of Cadbury on the retailer, his business growth in terms of sales volume, his inclination towards competitor activities etc. and thereby identify related prospects and problems.


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About the CompanyCadbury IndiaCadbury India is a food product company with interests in Chocolate Confectionery, Milk Food Drinks, Snacks, and Candy. Cadbury is the market leader in Chocolate Confectionery business with a market share of over 70%. Some of the key brands of Cadbury are Cadbury Dairy Milk, 5 Star, Perk, Eclairs, Celebrations, Temptations, and Gems. In Milk Food drinks segment, Cadbury's main product - Bournvita is the leading Malted Food Drink in the country.

Cadbury is the world's largest confectionery company and its origins can be traced back to 1783 when Jacob Schweppe perfected his process for manufacturing carbonated mineral water in Geneva, Switzerland. In 1824, John Cadbury opened in Birmingham selling cocoa and chocolate. Cadbury and Schweppe merged in 1969 to form Cadbury Schweppes plc. Milk chocolate for eating was first made by Cadbury in 1897 by adding milk powder paste to the dark chocolate recipe of cocoa mass, cocoa butter and sugar. In 1905, Cadbury's top selling brand, Cadbury Dairy Milk, was launched. By 1913 Dairy Milk had become Cadbury's best selling line and in the mid twenties Cadbury's Dairy Milk gained its status as the brand leader. Cadbury India began its operations in 1948 by importing chocolates and then re-packing them before distribution in the Indian market. Today, Cadbury 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). Its corporate office is in Mumbai. Worldwide, Cadbury employs 60,000 people in over 200 countries.

Major Achievements of Cadbury Worlds No 1 Confectionery company World's No 2 Gums company. World's No 3 beverage company. Cadbury Dairy Milk & Bournvita have been declared a "Consumer Superbrand" for 2006-7 by Superbrands India.


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Cadbury India has been ranked 5th in the FMCG sector, in a survey on India's most respected companies by sector conducted by Business World magazine in 2007.

SWOT Analysis of Cadbury IndiaSWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in any other situation requiring a decision. Strengths and weaknesses are internal factors and opportunities and threats are external factors. As per as the Cadbury India is concern the SWOT analysis is as follow: Strength: Brand Name: Cadbury has earned a reputation in the market for extending quality products to the market vis--vis its competitors. It has maintained a strong Brand name in confectionery market globally as company as in India. Market Share: Cadbury India has the largest market share of 70% in the confectionery market across the country. Distribution Network: Huge distribution network across the country with strong visual presence across all possible channels such as stores, Railway stations, Malls, Gifting mix, etc. Visibility is created everywhere to promote Cadbury products near schools and other places. Events such as Diwali and Valentine Day are capitalized very smartly by CIL. Aggressive Marketing through media channel as company as Promotional route i.e. has Amitabh as a brand ambassador for Cadbury Dairy milk and provides plethora of schemes for all channel partner as company as for end consumers. It is a global chocolate brand built upon a reputation for fine products and services. Cadbury Schweppes plc was rated as one of the Fortune Top 100 Companies to Work For in 2006. The company is a respected employer that values its workforce. The organization has strong ethical values and an ethical mission statement Its Chocolate and MFD brands are well established in the Indian Markets. Cadburys Dairy Milk is the foremost name in the Indian Chocolate Market. 5 star is another very


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strong Cadbury brand in Chocolates. In case of Malted Food Drinks, Cadburys Bournvita is the strongest Food beverage. Rich product mix. Support from the parent company i.e. Cadbury Schweppes plc. Cadbury Schweppes plc is a very profitable organization, generated revenue of more than 6,590 billion (2006).

Weaknesses: Cadburys one main strength can be its biggest weakness. Cadbury has done a rapid line extension in the recent years. Now it is selling well over 60 different lines. Competitors can take advantage of this by identifying vulnerable spots in this huge portfolio. Little Penetration in the rural sector.

Opportunities: Cadbury is very good at taking advantage of opportunities. The company has the opportunity to expand its global operations. New markets with new products which are limited in particular region. Cadbury has decided to focus on a few of its key brands such as Cadbury Dairy Milk, Bournvita, Eclairs and Halls to drive growth for the company. Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential. Recent tie up with Kentucky Fried Chicken (KFC), for selling Ulta Perk is one such example. Cadbury India is attempting to increase the declining market for chocolate with innovation, one of which is its sweet snack, Bytes. Brand Ambassador Amitabh Bachchan for the advertisement of their New Products. The Indian market and more specifically the urban areas where the penetration of Chocolates is low can be developed as a future market through affordability and availability.


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Target Urban population is 300-350 million people, while Cadbury is catering to 58 million people only. Thus, there is good scope to further widen its reach. This is one of the tactical strategies, whereby CIL aims to enhance share of Chocolate Confectionerys market share in Impulse category from 6% to 8%. Company aims to add 12 million consumers by establishing 100,000 additional retail outlets during 2000.

Per person chocolate consumption in India is among the least. As market leader, how do you plan to raise the consumption level? Company will continue to focus on affordability and value for money, thereby raising the relevance of chocolates in the daily consumption basket in India. Additionally, with our focus on width of distribution company hope to continue to expand the market for chocolates.

Threats Cadbury is exposed to rise in the cost of chocolate and dairy products. Entry of many foreign players in the Indian Confectionary market, which are giving higher margins to the retailers. Stiff competition in Confectionery segment The company has large exposure to foreign currency exchange rate risk, mainly on account of imported cocoa beans and cocoa butter in US Dollar and Pound Sterling. Storage problem: Given India's hot and humid climate, can there not be an alternative in terms of storing and packaging? Given India's climate, chocolates need to be stored in a cool, dry and hygienic place away from grains and cereals. To this end, the Company provides retailers with storage dispensers and visi-coolers to give adequate product protection. Additionally, every Cadbury product label mentions the care instruction: 'Store in a cool, hygienic and dry place.'

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Sales Hierarchy of the Company:Director (sales)

Branch Manager (taking care of the sales of north region)

Brach sales manager (look after specific territories in the north region)

*Area Sales Manager (Taking care of state)

*Sales officer/senior sales officer (taking care of towns)

*RdSM (field support at the local level)

In this project, I was required to communicate regularly with the Area Sales Manager, the Sales Officer and the RDSMs.


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Distribution Network of Cadbury

FACTORY/PRODUCTION UNIT

DEPOT

C & F AGENTS

RE-DISTRIBUTORS

RETAILERS

F

WHOLESALER S MODERN TRADE

CONSUMERS


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Description of the ProjectProcess and Planning: My Project in Cadbury Schweppes was primarily targeted at enhancing the visibility of Large Cadbury SKUs. So, for enhancing the visibility the company has introduced three programs across different REs (Retail Environment). Out of these three, two programs (namely Purple King and Purple Star) are for Cadbury's chocolates, and one program (Bournvita Ka Baadshah) is for Bournvita. Retail Environment: These programs were professionally implemented across REs for maximum returns. In Chandigarh, which is a Gold Town(Towns are classified as Titanium, Gold etc on the basis of Market Potential and Market Potential Value Index) shops have been further classified on the basis of the area, number of Salesmen, sales etc. A detailed study of the RE provides for the understanding of the RE reclassification. So, the Retail Environment has been reclassified as High End Grocers(HEG) Food Stores Supermarket/Hypermarket Chemists Pan Kiosks Low End Grocers(LEG), and Wholesale New Channel Institutional/others

Why do we need these Visibility Programs? I will discuss the programs that Cadbury has planned for these REs in brief, but first I will answer the question that why do we need Visibility programs for Cadbury, which already is the Number One Chocolate Company in the country? Now if we consider the markets in Chandigarh


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then we will see that here the markets are very organized, with a large number of big shops flaunting expensive imported brands. The competition is especially tough in the field of FMCG products. Higher Per Capita Income enables a large section of people to buy the desired products, in spite of the cost. Retailers also earn a higher margin on imported products, esp. chocolates, so they are willing to fill their shelves with those chocolates, and not to forget the competition from other domestic brands. Now, there is one thumb rule in case of chocolates and that is jo dikhta hai, wo bikta hai i.e. only that chocolate will sell which would be visible to the customer. The reason is simple chocolate sells primarily due to one factor which we call Impulsive Buying. In most of the cases, customers never really plan their purchasing decision of chocolates, its only after they see chocolates in counters that they feel like buying them. So, thats why visibility is one of the most important factors which drive the sale of chocolates. The Visibility Programs:So, as I mentioned before we implemented three programs for enhancing the visibility of Cadbury products. The shopkeepers will get monetary benefits if they are able to carry these programs properly. They are 1. Cadburys Purple King - A retailer or a food mart can become a "Purple King" if he keeps Cadbury's Chocolates in a Visi-cooler or in at least 3 sq. ft of Pure Horizontal space (Pure Space means Only and Only Cadbury Chocolates should be kept in that space). Similarly, Cadbury should also be visible in 3 sq. ft of Pure Vertical Space. Plus, the shop should have at least 5 hanging strips (60 packs) of Bytes or a Pure Bytes Rack. The Payouts in this scheme are - 2.5 %( of total purchase by the retailer) on Visibility, and - 1 % on value target achievement (by the shop) The payouts would be made in the name of the retailers through checques on a quarterly ba sis.


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Vertical space is the shelf space on the interior walls of an outlet. An outlet must provide us with at least 3 sq ft of vertical space to get enrolled in the Purple King Program.

Then an outlet must also provide us with at least 3 sq ft of pure horizontal space. If the retailer has a Cadbury visi-cooler, then he can keep Cadbury chocolates in that visi-cooler. The visi-cooler should be placed in some prominent position in the outlet.

If the outlet does not have a visi-cooler then this is how the retailer should display Cadbury chocolates in horizontal space.


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A retailer should also keep atleast 5 hanging strips of Bytes. Or, if the retailer has a Bytes rack then he only and only Bytes should be kept in that rack.

Bytes has been a problem child for Cadbury, and one purpose of these programs is to test whether sales of Bytes can improve with enhanced visibility.

Here is a close up view of a vertical space. We can see that the space is surrounded by Cadbury Header Cards, and the inside walls are also covered with backing sheets. This sort of merchandising beautifies the shelf and, in a way, reserves that space for Cadbury products. Therefore, after the outlets have been enrolled, merchandisers will play a very important role in reserving the space for Cadbury by sticking banners and stickers in the booked shelf.


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2. Cadburys Purple Prince This is the second visibility program for chocolates and Bytes. For this a shop should have a visi-cooler or at least 3 sq. ft of pure horizontal space for Cadbury. The payout is 2 % on value target achievement.

3. Cadburys Bournvita ka Baadshah This visibility program focuses on Bournvita. For this the visibility requirements are - Min. 4 sq. feet - Shelf /Window adjacent to MFD (Malted Food Drinks) category stocking - Min. 12 facings for Bournvita (min. 3 for Bournvita Five Star Magic) - Point of Purchase Shelf strips/Header Cards/Wobblers Plus the shop should sell at least Rs. 3000 worth of Bournvita every month. The payout would be Rs. 300 per month through checques. It is worth mentioning here that this program is of particular interest because Bournvita is one product which is affected the most by the seasonality factor.An outlet should provide us with at least 4 sq ft of vertical space in order to get enrolled in BKB program. This space should be at a prominent place in the outlet, adjacent to MFD category.


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Herealso,proper merchandising is a must. The space allotted for Bournvita is to be merchandised properly with Bournvita backing sheets and shelf strips.

All the shops who wished to enroll in any of these programs were required to fill up a form provided by the company. There are different forms for the three programs.The forms for the visibility programs need to be signed by the retailer as well as the Sales Officer. The retailer also has to put his stamp on the form. The payouts have to be clearly mentioned on the forms. The visibility specifications should also be mentioned in the forms.


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The visibility of SKU (Stock Keeping Units) will be checked regularly by a team of Cadbury representatives, and if any enrolled shop fails to put up the required visibility then the payout would not be given to the shop. In all, we enrolled 59 outlets in Cadburys Purple King Program, 8 outlets in Cadburys Purple Prince Program and 58 outlets in Cadburys Bournvita ka Baadshah Program. We gave special attention to the Purple Star Outlets while tracking down the effects of these visibility programs. Purple Stars are the top end retailers of Cadbury i.e. they give big business to Cadbury. They are given some privileges after they fulfill some pre-requisites.

I have a team of 4 RDSMs working under me. I went to retailers with one of them each day (on their specified Beats), and we negotiated with them regarding the desired space and location. Asking for desired shelf space turned out to be a problem sometimes, because other big brands had already booked their shelves in most of the shops and food marts, but the fact that Cadbury is the Market Leader in Chocolate as well as Malted Food Drinks Category worked in our favor, and we were able to convince the retailers. Line Booked Per Call (LBPC):Now, if we talk about enhancing visibility then it could not have been done without working on the LBPC (Line Booked Per Call) i.e. the number of lines that RDSMs sell to shopkeepers. Now, Cadbury has about 60 different products (Lines) in its Portfolio. The target given to me was to take the LPBC up to 13, i.e. each RDSM was sell (on an average) 13 different lines in each shop. Good LBPC helps us in displaying more products from Cadbury Portfolio in shelves, which will work in favor of the sales of those products. When I started working on this project the average LBPC was 7.5. So we had to work really hard to push it up to the desired level. What we had planned to do was to mix the same price ranged categories while booking orders. Instructions were made clear to the RDSMs. If a shopkeeper asked for, say, two boxes of GEMS then the RDSM has to convince him to take one box of GEMS Fruity along with two boxes of regular GEMS. Similarly, the same strategy was followed for PERK and ULTA Perk and so on. These measures were instrumental in taking the LBPC up. We had to take proper care in mixing


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the products as the main product could have faced any cannibalization from the product which we were trying to push. Apart from playing with the strategy of Mix n Match, we took care of many other things, for keeping the LBPC on track. They were:Checking the availability of each SKU at the particular outlet The unavailable SKU were made available Keeping the dealer card with oneself (RDSM) and see to it that if the retailer forgets to order something then the RdSM can remind him/her of the product. Availability of products at the Re-distributor Efforts taken by sales force to make available all the variants and SKU's Merchandising the SKUs properly in the dispensers or the Visi-coolers Pushing those SKUs which are not available to be made available

Penetration of other Lines:We used the same measures to increase the penetration of some products like ULTA Perk targeted penetration at 80%,CDM (Rs. 5/-) and 5 Star (Rs. 5/-) targeted penetration at 85%. Penetration of Bytes:One more product on whose penetration we really had to work hard was BYTES. Cadburys Purple King Visibility program too focuses on BYTES because to become a Purple Prince, a retailer must keep at least 5 Strips of BYTES (12 packs in each strip). The basic rationale behind sales of BYTES is that a retailer, who sells Chocolates, can sell BYTES too. Its just that the visibility of BYTES should be proper and it should not be kept with other Salty Snacks which can (and will) hinder its sales. Outlet Penetration:Now, we cannot talk about visibility without covering maximum number of Outlets. Therefore, the Outlet penetration was targeted at 90%. The motive was simple; customer should find


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Cadbury products wherever he or she goes. We planned to achieve this by covering 100% of the High End Grocers (HEGs) and Supermarkets, and at least 80% of the Chemists and Food Stores. The biggest factor was the penetration in Low End Grocers (LEGs), where we targeted at 75% penetration. We knew that if we can do this then achieving the overall target should not be a very big problem. No Order Parties:For the purpose of maximum outlet coverage, we had to eliminate a large number of No Order Parties. No Order Parties are those outlets which have not placed any order within a span of last one month. Cadbury keeps a track of these outlets and we constantly keep trying to convert as many No Order Parties as we can. In the month of March we converted 259 No Order Parties. The possible reasons for Outlets not ordering Cadbury products from the Distributor can be:The company sales personnel / distributor sales man does not visit on a regular basis The distributor is not supplying goods as retailer has not paid the early balance (Outstanding) from a long time The retailer does not know who the distributor is The retailer is selling competitors products (Nestle/Perffetti) The retailer brings goods from whole sale Goods off take not taking place i.e. goods are stuck in the store and movement not taking place or competitor products selling more Scheme not coming from the company or no margin or no discount given Have had a bad experience relating to damages/expiry/salesman behavior etc. Any other outstanding issues from the company or the distributor i.e. early scheme not given. RdSM visiting when the shop is closed or the concerned person is not available. RdSM not knowing were the outlets are The name of the shop is entered as two names, the bill is cut on another bill and the shop is named as some other name Non availability of goods


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A lot of medical shops only order BV (jars). If those are unavailable then it is entered as No Order Party Some shops might be permanently closed but the names have not been removed. The RdSM also does not persuade the retailers to keep some other products.

Damages:One more thing which we took care of was Damages. Damages can take place due to:a) Logistics problem From depot to the Re-distributor and from there to the retailer b) Storage facility not according to the norms of the company c) Expiry/or damage caused at the retailer Various measures to reduce damages The sales officers and redistributors salesmen during their regular visit to the outlets should check and continue to educate the retailers on storage norms. Not only should the sales personnel be checking and educating but they should also stack the products at a cooler place, in case it is placed somewhere else. The damages/expiry should be collected on a periodic basis and the retailers should know as to when the company asks for damages or expiry to be collected. The time period for collection should be either of 3 months or less and not more than that, as the retailers will become jittery about keeping a product if it is not collected on timely basis. A proper format should be maintained wherein the retailer who is giving the damage/expiry, which product, quantity, amount, and date should be mentioned. This would help in knowing as to wherein most of the damage/expiry is coming from. It should also be known as to which product should not be forced/or given in bulk to a particular retailer, this leads to a lot of goods coming back as expiry. Damages in the month of April had been very high. A major portion of these damages came from the Celebrations packs (RDFC Range) which have been returned by the retailers. These Celebrations packs were purchased by the retailers during the Festive season in 2007.


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MSS Compliance: The MSS Compliance was targeted at 70%. MSS stands for Must Sell SKU. Must Sell SKUs are pre defined for different REs. We tried to push the penetration of MSS in the outlets according to the norms defined by the company. RDSMs were also instructed to take special care of the MSS compliance while booking orders. Distributor: My office was in the centre of the city, at Jagat Singh & Sons Agencies, the biggest distributor of Cadbury in Chandigarh. It contributes to about 70% of the total sales that is made by Cadbury (Base Market) in Chandigarh. It has been Cadburys distributor since 1966 and has been instrumental in the proper functionality of Cadburys Distribution Channel. Cadbury is not the only company for which Jagat Singh & Sons Agencies are the distributors. This agency is also the distributor for Wockhardt, Azinomoto, and Lindt etc. There are 4 RDSMs for Cadbury who are briefed regularly by Mr. Pawan Arora, Sales Officer-Cadbury (Chandigarh). The other distributor is KK and Company, which contributes to about 30% of Cadburys total business in Chandigarh. Jagat Singh and Sons Agencies supplies Cadbury products in 39 sectors (sector 1 to 39) and the remaining sectors are covered by KK and Company. I have given a map of Chandigarh in Appendix A marking the area covered by both the distributors. I have also given the beat routes of RDSMs in Appendix B. Cadbury Depot: Cadbury depot is located at Zirakhpur (Punjab), about 10 kilometers from Chandigarh. Cadburys Area Sales Manager, Mr. Rajesh Kanwar, has his office in the depot itself to look after the proper functioning of sales operations. The depot supplies stock to the whole of Punjab and Chandigarh. The storage section of depot is divided in 3 sections. These three sections are Air Conditioned section (for chocolates), Semi Air Conditioned (for Celebrations Gift packs) and the Non Air Conditioned Section (for Bournvita, Halls, Gems etc). At any time, stock which would last for 3 weeks is always stored in depot. Stock is supplied to the distributors located in various cities, from where it is further distributed to retailers and Whole sellers.


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The sales promotion goods, the cooler etc are also stored here. The finished goods arrive at different times from different packaging units. Here I came to know that reading the Batch Code is an art. There are 2 basic types of bath codes that tell the whole story about a particular product, namely: * The one on the carton {outer} * The other on the product itself.

It tells us * Time, date and place of manufacture and subsequent packaging. * With or without scheme * Factory shift and day of production. It is enticing to get to know the exact details. Here is an example. T08M7T3 Tuesday = T 8th week of the year i.e. of month February = 08 Malanpur {manufacturing unit} = M 2007 = 7 The packaging units name = T Third shift = 3

It is from here, that the goods to be distributed are sent to the respective distributors for further allocation. The details of the arrival and dispatch are neatly fed in dedicated software.

The goods are kept on FIFO basis. FIFO stands for First In First Out i.e. goods which arrive first in the depot are supposed to be forwarded to the distributors before other goods. Now lets have a look at some of the norms which are followed while storing goods at the depot:


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The cartons are stacked inside the markings made by yellow lines. This is to ensure that that there is plenty of space to move around in the storage section. Also, you can see two cards in the pic, one red and the other green. These cards are there to ensure that FIFO is properly followed. The cards inform the labor that which cartons are to be transferred to the delivery trucks. Stock marked by green card is the stock with an earlier expiry date(which arrived earlier in the depot) and it is supposed to be forwarded first to the distributors. Similarly, stock with red card means that this stock should not be transferred anywhere right now.


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Here, you can see a black line painted on the wall. This line is painted at a height of 8 feet. When the cartons are stacked over each other in the depot then their height should not surpass this line. If the uppermost carton is too high then it would be difficult for the labor to move that carton. Since the labor cannot pull out any carton from the middle of the stack therefore the uppermost carton should be within reach to avoid any damages.

In the depot the stock is never kept too close to the wall. In this picture we can see that there is plenty of space between the stock and the wall. The yellow line, within which the stock is kept , is at a distance of 2 ft from the wall. This is done for ease in inspection and to avoid infestation.


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A view of the Air Conditioned section. The ACs are checked regularly to ensure that the stored chocolates do not melt while in cartons.

The storage norms chart for Non AC section is pasted in the depot itself. It tells the workforce the permissible number of cartons (of different products) that can be stacked over each other while storing.


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Segment and RE Classification:Towns and REs have been segregated into different categories by Cadbury. The towns have been classified on the basis of Market Potential and Population. 1) Market Potential It is based on 18 parameters Means(prosperity of town) 35% weightage 3 parameters Consumption Patterns 35% weightage 6 parameters Awareness(Media Exposure) 20% weightage 5 parameters Market Support(Infrastructure that facilitates marketing activities) 10% weightage 4 parameters Population(Size of the Market)

2) One other important factor in classification of towns is Market Potential Value Index (MPV), It is defined for each town It measures the overall purchasing power of the town Town-wise MPV is indexed to the MPV of Mumbai(Mumbai has MPV of 1000)

On the basis of these factors, CIL has segmented the towns as 1) Titanium Towns In all, 35 cities have been classified as Titanium Towns. These are the cities with population > 10 lakh and MPV > 30 2) Gold Towns Total 84 cities with MPV between 10 & 30 3) Silver Towns Total 274 cities with population > 1 lakh and MPV between 3 & 10 4) Rest of Urban(RoU) All other urban towns(3975 towns as per Nielsen Census) 5) Super stockists


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Further the Retail Environment has been classified on the basis of shopper needs and the perception that shoppers have for different types of outlets. Thus, the RE has been classified as: High End Grocers(HEG) Low End Grocers(LEG) Food Stores Wholesale Hypermarkets Supermarkets Chemists Pan Plus

This RE wise activation is done only in Titanium and Gold towns. In RoU and Superstockists, only wholesale and retail classifications exist, and in Silver towns, HEG is the only RE which is treated differently. Here is the complete list of REs across different segments

Titanium TownsHEG LEG Food Stores Wholesale Hypermarkets Supermarkets Chemists

Gold TownsHEG LEG Food Stores Wholesale Hypermarkets Supermarkets Chemists

Silver TownsHEG Wholesale Other Retail

RoU and SSTRetail Wholesale


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Brief overview of the classifications of the RE 1) High End Grocers All Grocers and General Stores dealing in grains, provisions, spices, oil and branded FMCG products can become HEGs if they fulfill any 3 of the following parameters Area of shop > 300 sq ft Number of Counter salesman > 1(including owner) More than 10 MFD(Malted Food Drink) large packs(>=500 gm) are on display Typically, average monthly CIL value sale > Rs 6000 per month HEGs cater to the monthly grocery needs of the shopper while LEGs are typically used for top-up(emergency purchase) Number of HEGs according to Nielsen in All India Urban : 37,682 outlets which keep chocolates 35,945 outlets which keep MFD 37,460 outlets which keep confectionary

2) Food Stores These are the outlets whose main business comes from food products like baked products, ice cream etc. It includes ice-cream shops, bakeries(which sell cakes/pastries), dry fruit stores It does not include outlets which stock FMCG groceries like soaps, detergents etc. Number of Food Stores according to Nielsen in All India Urban 1.09 lakh outlets which stock confectionary 0.83 lakh outlets which stock chocolates


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-

0.93 lakh outlets which stock Western Snacks 0.32 lakh outlets which stock Malted Food Drinks(MFD)

3) Modern Trade It includes two REs Supermarkets & Hypermarkets Nielsen clubs them together, hence they are analyzed together Supermarkets These are the self service outlets that have at least 1 computerized checkout counter. Hypermarkets These are the self service outlets that sell food and non-food items, and has at least 5 checkout counters. These outlets are air-conditioned and have more than 20,000 sq ft of space 4) Chemists An outlet which sells ethical allopathic medicines and also stocks FMCG products. Number of Chemists according to Nielsen in All India Urban 1.48 lakh outlets which stock Malted Food Drinks 1.63 lakh outlets which stock confectionary 0.43 lakh outlets which stock Chocolates

5) Pan Kiosks These are the outlets which sell Pan/Bidi/Gutkha and also stock FMCG products These outlets have been referred to as Pan Plus in Nielsens Survey Number of Pan Plus according to Nielsen in All India Urban: 6.9 lakh outlets which stock confectionary 2.9 lakh outlets which stock chocolates


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-

0.88 lakh outlets which stock Malted Food Drinks

6) Low End Grocers All Grocers and General Stores (which are not HEGs) which deal in grains, provisions, spices, oil and branded FMCG products can be classified as LEGs. Typical parameters for classification are Area of shop < 300 sq ft Number of counter salesman (including owner) = 1 Less than 10 MFD large packs on display Average monthly CIL < Rs. 6000 per month HEGs cater to the monthly grocery needs of the shopper while LEGs are typically used for top-up (emergency purchase) Number of outlets according to Nielsen in All India Urban: 6.01 lakh outlets which stock chocolates 4.74 lakh outlets which stock Malted Food Drinks 11.23 lakh outlets which stock confectionary

7) Wholesalers Any outlet which sells more than 50 % of his stock to other retailers can be classified as a Wholesaler. As per current Route list, CIL covers 16000 wholesalers Other FMCG companies cover between 35000-60000 wholesalers across India


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Note: The Analysis and comparisons in this report are done by comparing thefigures of April 2007 and April 2008. I have purposefully done so, keeping in mind the factor of Seasonality. As we have seen in the past, the sale of Cadbury products tends to decrease as the temperature rises. So, it would have been quite unfair to compare sales of April with the figures of February and March (which are comparatively cooler months than April). Though, there has been improvement in many tasks( for example LBPC, penetration of Ulta Perk, AD category etc) from February to April, but still I think that if we have to get a clear picture of the work that we have done, then the data should b compared with the data from the same time frame. One more reason is that my project focuses on the effect of visibility programs, and the Visibility programs were implemented from the first week of April. The outlets were enrolled by the last month of March, and the visibility programs started giving the results from April only. So I have compared the data of April 2008 with the data collected during the same time frame in 2007. I have done keeping the fact in mind that even the companies compare and analyze the data of same time frame(for example Comparison of sales figures of Quarter 1 of one year with Quarter 1 of another year) . Since my Internship started from the month of February 08, I have collected the data from February to April also, and have compared those using charts. I have put these charts at the end of the report in Appendix C.


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Measuring the effect of Visibility ProgramsThe effect of Visibility programs in Purple Star Outlets:To measure the effect of Visibility programs, we first selected a sample of 39 Purple Star outlets and compared their sales of All Drinks, Base Chocolates and Bytes in those outlets in the first two weeks of April 08 with the sales in the first two weeks of April 07. Only those Purple Star Outlets were selected which were also operational during the month of April last year, so that we can get all the required data. The comparison clearly shows that Visibility programs have made their mark in the Purple Star Stores. The sales of Cadbury Base Chocolates and Cadbury All Drinks category have gone up significantly. The sale of Bytes hasnt improved though. Here are the comparison charts and Data for Purple Star outlets.

Sales Data for April 07(Purple Star Outlets)Party Name AGGARWAL KARYANA STORE-39 ALLRIGHT DEPT.STORE-15 ANIL MEDICAL HALL-20 BANSAL BAKER & CONF. SEC-34 BEDI STORE SEC-07 BHATIA INTERNATIONAL SEC-35 CHEAP PROV.STORE SEC-11 DAILY NEED/HARISON CONF.SEC-11 DES RAJ BANSAL & SONS - 35 DEWAN CHAND JOGINDER PAL S-19 DOGRA TRADERS SEC 7 CHD EMPIRE STORE SEC-17 EXCEL CONF. SEC-17 GANESH KARYANA STORE SEC-15 GUPTA STORE SEC-16 GURON FOOD FARMS (P)LTD.SEC-34 HARRI FOOD NOOK SEC-19 JANTA DEPT.STORE SEC-23 KEWAL STORE SEC-09 MOTI PROV. STORE SEC-15 NEW BANSAL NAMKEEN& SWEET PROD NEW PALACE PROV.STORE SEC-30 NEW PATIALA PROV.STORE SEC-20 NEW SHAM PROV.STORE SEC-22 OM PARKASH & SONS SEC-11 PARK VIEW SEC-33 ALL DRINKS 2484.53 2022.41 3913.3 1395.82 1690.01 9376.6 2252.71 159.64 1150.09 9631.93 859.77 9465.71 318.34 1724.96 6203.2 6924.81 1919.42 3240.86 4274.93 10370.36 183.41 3671.77 6134.24 1513.89 6429.66 1689.9 BASE CHOCOLATES 7441.55 6181.51 12295.11 7058.18 6213.96 29024.07 14374.24 4249.6 8510.51 27891.99 10495.42 86942.45 10540.01 7762.25 8716.99 20650.7 12516.62 13110.75 9939.56 14745.04 2145.69 24824.85 12185.39 2400.57 7881.87 10739.42 Bytes 477.41 318.25 424.51 TOTAL 10403.5 8522.16 16632.92 8454.01 7903.96 38931.33 17369.85 4409.24 9660.6 39961.89 12151.82 97151.92 11177.11 9699.47 15556.95 28212.99 15179.75 16988.68 14426.99 25853.73 3284.26 29451.81 18638.42 3914.46 15478.94 12429.32

530.66 742.89 0

2437.97 796.64 743.76 318.77 212.25 636.76 637.49 743.72 637.07 212.51 738.34 955.16 955.18 318.78 0 1167.41


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PARKASH DEPT.STORE SEC-21 PARKASH MEDICAL HALL SEC-21 PESHWARI SUPER MARKET SEC-19 PREM STORE SEC-15 RAKESH TRADERS SEC-14 RUMPY'S DELICACIES SEC-34 SAI CONF. SEC-16 SETHI CONF. SEC-18 SHIVALIK BAKERS & CONF.SEC-21 SINGH BROTHERS SEC - 35 SNOOPYS SCO -1 SEC-34 CHD SWAN AGENCIES SEC- 35 TALWAR BROTHERS SEC-15 TOTALS :

6059.9 2424.96 15730.5 2628.27 4372.3 378.5 252.32

316.51

6696.07 6267.44 30212.28 10375.28 9460.56 10600.65 11280.39 22251.1 23994.03 12101.86 5061.73 6308.34 8805.4 542253.43

318.25 1591.91 689.76 424.53 956.21 2018.67 318.74 212.25 318.74 956.22 21810.81

13074.22 8692.4 47534.68 13693.31 13832.86 11403.67 11532.71 23207.3 26012.7 12737.1 5273.98 6627.08 11930.49 697398.58

2168.87 133334.4Table 1 Sales Data - April '07(Purple Star Outlets)

Sales Data for April 08(Purple Star Outlets)Party Name AGGARWAL KARYANA STORE-39 ALLRIGHT DEPT.STORE-15 ANIL MEDICAL HALL-20 BANSAL BAKER & CONF. SEC-34 BEDI STORE SEC-07 BHATIA INTERNATIONAL SEC-35 CHEAP PROV.STORE SEC-11 DAILY NEED/HARISON CONF.SEC-11 DES RAJ BANSAL & SONS - 35 DEWAN CHAND JOGINDER PAL S-19 DOGRA TRADERS SEC 7 CHD EMPIRE STORE SEC-17 EXCEL CONF. SEC-17 GANESH KARYANA STORE SEC-15 GUPTA STORE SEC-16 GURON FOOD FARMS (P)LTD.SEC-34 HARRI FOOD NOOK SEC-19 JANTA DEPT.STORE SEC-23 KEWAL STORE SEC-09 MOTI PROV. STORE SEC-15 NEW BANSAL NAMKEEN& SWEET PROD NEW PALACE PROV.STORE SEC-30 NEW PATIALA PROV.STORE SEC-20 NEW SHAM PROV.STORE SEC-22 OM PARKASH & SONS SEC-11 PARK VIEW SEC-33 PARKASH DEPT.STORE SEC-21 PARKASH MEDICAL HALL SEC-21 PESHWARI SUPER MARKET SEC-19 ALL DRINKS 3735.42 2296.16 2039.37 4438.74 4471.84 5875.73 2392.77 91.74 2985.78 7848.08 1306.07 11433.31 568 2173.53 7967.44 6059.45 1276.15 8762.59 3100.97 11887.54 2580.15 5130.04 7644.99 4536.31 6471.43 2159.17 3067.91 2299.98 18650.02 BASE CHOCOLATES 8234.22 7481.93 10419.63 49077.16 16147.89 30262.55 17099.38 2953.43 7394.64 41149.37 8587.25 72785.88 14444.27 5648.75 17131.55 19324.6 7271.8 15796.26 16796.6 17788.6 22605.51 20664.23 21947.66 8957.94 22766.59 13491.73 12782.97 7376.82 72662.07 Bytes 159.12 TOTAL 12128.76 9778.09 12459.01 56105.97 20725.81 36668.67 19598.23 3045.18 10380.42 49209.37 10318.1 84644.07 15118.53 7822.29 25205.09 25808.83 9078.93 24664.94 19897.58 29888.34 26034.28 27173.38 30336.07 13494.26 29450.24 15969.54 16063.03 9676.8 92054.73

2590.06 106.08 530.39 106.08

0 211.92 424.78 424.88 106.25

106.08 424.78 530.98 106.08

212.2 848.62 1379.1 743.42

212.2 318.64 212.16

742.64


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PREM STORE SEC-15 RAKESH TRADERS SEC-14 RUMPY'S DELICACIES SEC-34 SAI CONF. SEC-16 SETHI CONF. SEC-18 SHIVALIK BAKERS & CONF.SEC-21 SINGH BROTHERS SEC - 35 SNOOPYS SCO -1 SEC-34 CHD SWAN AGENCIES SEC- 35 TALWAR BROTHERS SEC-15 TOTALS :

7418.86 3492.77 201.65 293.58 1293.6 506.42 102.05

18746.71 18096.07 14547.97 7333.35 22053.25 33249.84 7342.03 8261.01 7290.8 22115.41 748087.72

636.46 318.23 424.31 106.2 743.42 2123.9 318.59

1170.22 157729.83Table 2 Sales Data - April '08(Purple Star Outlets)

212.39 424.78 15804.74

26802.02 21907.07 15173.93 7733.14 24090.3 35880.16 7762.66 8261.01 7503.19 23710.41 921622.4

Comparison of the Sales of various categories in Purple Star OutletsComparison Chart for AD sales in Purple Star Outlets:Apr 2007 Sales AD133334

Apr 2008157729

Figure 1

The figure clearly shows that the sales of Cadbury AD Category have improved in the Purple Star Outlets. Last year in the month of April, the total sales of AD category in Purple Star outlets


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was of Rs. 1,33,334. This year the total sales figure of AD has improved to Rs. 1,57,729. There has been an increase of 18% in the sales. The visibility programs have clearly played their part and have been very instrumental in pushing the sales of AD category in the hot month of April.

Comparison chart for Base Chocolates:2007 April Sales BC542253

2008 April748087

Figure 2

Here again, the sales of BC has gone up from Rs. 5,42,253 in April 07 to Rs. 7,48,087 in April 08. The major gainers are Cadburys Dairy Milk and Ulta Perk .Clearly; Visibility programs have played a good role in increasing the sales. All in all there has been an increase of 38% in the sales of Chocolates.


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Comparison Chart for Bytes:2007 April Sales Bytes12151.83

2008 April 9861.1

Figure 3

This is one problem area. The visibility programs have not been able to improve sales of Bytes. According to me the possible reason can be that if a shop has put up 5 strips of Bytes on display but has put it near the salted snacks category then it will hinder the sales of Bytes, as the customers will pick up those salty snacks which are well established in the market. One solution can be to keep the strips away from that area, somewhere near the Cadbury chocolates counter. The Cadbury chocolate counter will attract the customers near itself and Bytes, itself being a product from Cadbury, can make a good use of it. Bytes was launched as a sweet snack in the market which was dominated by salty snacks such as Lays chips and Uncle Chips. So, initially it was competing against them, but then, after a while, Lays launched its own sweet snack called 3-D. So, now, there was another sweet snack in the market which was giving direct competition to Bytes. If we consider todays market then we will see that though the sales of Bytes are declining but still its way ahead of 3-D (this


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statement is based on my personal judgment, I examining both the products in a number of outlets across the city, and found out that Bytes outperforms 3-D in visibility as well as penetration, here we could have made use of 3-Ds sales figures if they were available). So, this can be blessing in disguise for Bytes, because Lays has, knowingly or unknowingly, created a different market segment by launching its product (3-D) against Bytes, and in that segment Bytes is doing better than 3-D. So, in the future if this segment of the market segment grows, then Bytes would be the most profitable player there.


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How the big lines have moved in Purple Star OutletsHere, we have tried to track down the effect of Visibility programs on big lines (Rs. 10/- and above).Month Big Line Sales 2007 April 513422 2008 April 762126

Figure 4

The sales of Big Lines have increased from Rs. 5,13,422 in the last April to Rs. 7,62,126 this year. So, in all there has been an increase of 48.4% in the sales of big lines. The major gainers have been the family packs and Gift packs(Heroes, Celebrations etc). Now, one interesting fact worth noticing is that Gift packs are usually always kept in the vertical spaces, and those vertical spaces have proved to be very profitable. So, we can use those vertical spaces to push Special value packs and other chocolates as well. Mostly smaller chocolates are kept in the horizontal space only, but if vertical space has proved to be so profitable for Gift packs then we can put some other products also in the vertical spaces.


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Effect of per square feet increase in Shelf Space on SalesNow, let us calculate the contribution of extra shelf space in the increased sales of BC and AD categories. We studied the Purple Star outlets and found out that on an average we have managed to increase the shelf space for chocolates by 2 sq ft. The minimum requirement, as I have mentioned earlier was of 3 sq. ft of Horizontal space (or a Visi-cooler) and 3 sq. ft of Vertical space. In most of the outlets we managed to get much bigger space for Cadbury, but some outlets were reluctant to provide us anything bigger than the minimum shelf space required. I have listed down the increase in shelf space that we managed to get at each purple star outlet, and have put it in Appendix E at the end of the report. Now, the total shelf space that we managed to obtain for Purple King Program is:= 2 sq ft x 37 {because 37 Purple Star Outlets were enrolled in the Purple King Program} = 74 sq ft Now, this space of 74 sq. ft resulted in an increase of Rs. 2,05,834 in the sales of Chocolates. Therefore, the increase in sales by 1 sq ft of shelf space would be = = 205834 74 = Rs. 2782 Thus, in Purple Star outlets, on an average, just 1 sq ft of shelf space was enough to push up the sales of Chocolates by Rs. 2782.

Similarly, we found out that the increase in shelf space for Bournvita is about 1.2 sq ft. The minimum space requirement to become a Bournvita ka Baadshah was of 4 sq. ft. So, the total increased space would be = 1.2 sq ft x 35 (because 35 Purple Star outlets were enrolled in the BKB program)CADBURY INDIA LIMITED

P a g e | - 54 -

= 42 sq ft This 42 sq ft resulted in an increase of Rs. 24395 in the sales of Bournvita and thus pushed the sales of AD category. Therefore, profit from 1 sq ft of increased space would be = 2439542 = Rs 581 Thus in Purple Star outlets 1 sq ft of shelf space pushed the sales up by Rs. 581 Now we can see that in the case of Chocolates, 1 sq ft of space was more profitable than in the case of Bournvita. The reason is simple; more chocolates can be stacked in 1 sq. ft than Bournvita. Plus we can also say that visibility has worked more in the case of Chocolates than Bournvita. In the case of Bytes though, the visibility programs did not increase the sales. Though, the outlets which were enrolled in the Purple King Program kept at least 5 strips of Bytes, it did not take the sales anywhere. Thus, one thing is clear; sale of Bytes cannot be increased by the Visibility factor alone. Here, when we talk about shelf space then we are referring to the Pure Shelf Space i.e. in that space, only and only Cadbury Products were displayed.


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Market ScenarioIt is evident that the Visibility programs have worked in the case of Purple Star outlets, where the Visibility is quite good, with distinctly defined space for various categories. But if we consider the condition of the entire market then we can see that the Total Sales for the month of April 08 have declined in comparison to the sales in April 07. This fact comes as a surprise especially when the total number of outlets covered has increased. The decline in sales figures is primarily due to the existing Stock-pressure in the outlets. Even the wholesalers havent made any big purchases. BC is the only category which has registered an increase in sales in the month of April (in comparison to last April). There are some active schemes on Bournvita such as discounts for the retailers which will motivate them to buy stock in large quantities. One fact which should be considered in this comparison is that last year, during these months, there was a Free Gift scheme on Bournvita, which really had a very favorable impact on its sales.

Comparison of Sales Apr 07 v/s Apr 08 Total Sales - April 07Group & Cat Code BOURNVITA Cocoa DRINKING CHOC. ALL DRINKS (Cat Total) Assortment COUNT Chocolate Panned Gems Moulded Perk BASE CHOCOLATES (Cat Total) Byte Bytes (Cat Total) Volume 6288.8 70.45 164.3 6523.55 618.07 1887.45 311.84 414.72 4092.17 877.66 8201.904 636.52 636.519 %(Cat) 96.4 1.08 2.52 %(Grand) 40.93745081 0.458599957 1.069524101 42.46557487 4.023376514 12.286508 2.029947631 2.699653289 26.63831066 5.713198556 53.3909556 4.143478277 4.143471768 Value 1306153 29861.44 31726.5 1367740 238545.79 512490.06 197615.32 164929.63 1699558.24 252251.44 3065391 144912.8 144912.8 %(Cat) 95.5 2.18 2.32 %(Grand) 28.53081234 0.652275148 0.693014385 29.87608134 5.210649265 11.19452142 4.316588953 3.602622605 37.12411732 5.510027155 66.95853807 3.165387135 3.165387135

7.54 23.01 3.8 5.06 49.89 10.7

7.78 16.72 6.45 5.38 55.44 8.23

100

100

GRAND TOTALS:

15361.97Table 3 Total Sales - April '07

4578044


P a g e | - 56 -

Total Sales April 08Group & Cat Code BOURNVITA Cocoa DRINKING CHOC. ALL DRINKS (Cat Total) Assortment COUNT Chocolate Panned Gems Moulded Perk BASE CHOCOLATES (Cat Total) Byte Bytes (Cat Total) Volume 4548.43 130.8 206.8 4886.03 668.23 2157.08 232.94 288.7 4670.19 772.13 %(Cat) 93.09 2.68 4.23 %(Grand) 32.34844 0.93025 1.470762 34.74945 4.752453 15.34116 1.65667 2.053235 33.2144 5.49139 Value 972181.3 54680.59 53150.92 1080013 256737.5 645907.9 138718.2 117163.5 2066830 231252.5 %(Cat) 90.02 5.06 4.92 %(Grand) 20.97771932 1.179897338 1.146890131 23.30451197 5.539879959 13.93739512 2.993259791 2.528153723 44.59804074 4.989963968

7.6 24.54 2.65 3.28 53.14 8.78

7.43 18.69 4.01 3.39 59.79 6.69

8789.274 385.43 385.433

100

62.50933 2.741179 2.7412

3456611 97726.47 97726.47

100

74.58672481 2.108740996 2.108740996

GRAND TOTALS:

14060.74Table 4 Total Sales - April '08

4634352

Here, we can see that the total sales of two out of three categories have declined. We have sped up the selling operations to surpass the last years milestone. Our particular focus would be on the wholesalers who, till now, havent made any big purchases. Wholesalers are the key to achieve the targets both value wise and volume wise.


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Comparison of the Sales of AD (Overall)Month Sales AD 2007 April 1367740 2008 April 1080013

Figure 5

Comparison of the sales of BC (Overall)

Month Sales BC

2007 April 3065391

2008 April 345611

Figure 6


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Comparison of the Sales of Bytes (Overall)Month Bytes Apr '07Apr '08 144912.8 97726.47

Figure 7

As can be seen in the graphs, the total sales of both AD and BC Categories have dropped in this month in comparison to the last April.

AD Category: - Overall, there has been a decline in the sales of AD Category. This year thesale of AD category in the month of April is of Rs. 10,80,013, whereas last year the total sale of AD category for the same time frame was of Rs. 13,67,740 . The total fall in sales is of Rs. 2,87,727. In Percentage terms, there has been a decline of approximately 21% this year, in comparison to last year.

BC Category: - In the case of BC category the sales have gone up this year. This year the saleof BC Category in April has been of Rs. 34,56,611 , whereas last year the sale of BC category for this category was of Rs. 30,65,391 . The total increment in sales is of Rs. 3,91,220 i.e. the sales have gone up by 12.7%.


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Bytes: - Bytes has also performed badly this year. The sales have gone down to Rs. 97,726from last years 1,44,912 . The fall is by Rs. 47,186 i.e. the sales of Bytes have declined by 32%.

One main reason for the decline in the sales of both these categories is that the wholesalers did not make any big purchases in the month of April. The wholesalers are the biggest customers; they place big orders and are thus instrumental in driving the sales both volume wise and value wise. Last year, in the month of April the performance of the wholesalers was quite good. We are giving special attention to the wholesalers now and the Sales officer, Mr. Pawan Arora, is himself accompanying the sales team to visit the wholesalers.


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WholesalersAs we have seen in the previous pages, the total sale of AD and BC category has declined this year. One main reason for this decline has been our failure to book big orders from all the wholesalers. Lets look more closely at this issue by comparing the Whole Sale performance of last April with this April. Whole Sale April 07Party Name BHATIA BROTHERS SEC-26 BHATIA STORE SEC-28 CAPITAL TRADING CO. SEC-26 G S TRADING CO. CHD HIGH CLASS CONF. SEC-18 JINDAL PROV. STORE SEC-37 KATARIA CONF. CHD LUXMI TRADERS SEC-26 MANCHANDA TRADERS SEC 42 MANGAL DASS DES RAJ SEC-22 ONKAR TRADERS SEC-26 PREM CHAND SUBHASH CHAND S26 RAM PARKASH & SONS SEC-26 RAVINDRA TRADERS SEC 30 CHD S.G.TRADERS SEC-26 SARDAR CONF. SEC-26 ALL DRIN KS BASE CHOCOLATES 3747.35 13910.5 Bytes 794.76 7612.77 TOTAL 3747.35 14705.26 23689.82 306390.9 349099.5 11866.66 232175.37 158937.75 26637.37 2856 178311.26

23689.82 62907.95 49695.23 6832.25 53973.75 158937.75

235870.18 299404.27 5034.41 165514.77

12686.85

26637.37 2856 55255.13 153082.14 78650.14 8579.4 4833.05 47949.36 267932.19 1139535.16 31245.8 112904.72 10151.42

153082.14 78650.14 8579.4 4833.05 315881.55 1869443.52

TOTALS :

698662.57

Table 5 Wholesale - April '07

Whole Sale April 08Party Name BHATIA BROTHERS SEC-26 BHATIA STORE SEC-28 CAPITAL TRADING CO. SEC-26 HIGH CLASS CONF. SEC-18 JAGJIT SINGH SEC CHD JINDAL PROV. STORE SEC-37 KATARIA CONF. CHD LUXMI TRADERS SEC-26 MANGAL DASS DES RAJ SEC-22 ONKAR TRADERS SEC-26 ALL DRIN KS 1097.25 1484.73 35678.32 22880.38 15219.69 10714.8 20047.17 8106.67 6175.44 57349.63 BASE CHOCOLATES 22175.64 10629.48 Bytes 316.39 TOTAL 23272.89 12430.62 35678.32 138503.6 162058.1 10714.8 324302.9 8106.67 6175.44 203821.8

115623.2 146838.41 297821.88 6433.82

140061.72

6410.44


P a g e | - 61 PREM CHAND SUBHASH CHAND S26 RAM PARKASH & SONS SEC-26 RAVINDRA TRADERS SEC 30 CHD S.G.TRADERS SEC-26 SARDAR CONF. SEC-26 SHRI KRISHNA CONFECTIONERS26

19889.63 66206.37 4581.75 4459.92 7155.98

8261.25 189915.12

2593.72

19889.63 66206.37 15436.71 4459.92 197071.1

10541.22 TOTALS : 291588.95

33775.05 965101.75 15754.37

44316.27 1272445

Table 6 Wholesale - April '08

As we can see, the total sales to the whole sellers have declined significantly. There is a huge difference of Rs. 5,96,998 in the total sales. This year the AD category sold to Whole Sale has fallen short of the last years mark by Rs. 4,07,073 and BC category has Rs. 1,74,433 to cover up to meet the last years milestone. We assume that one wholesaler covers 125 outlets directly. The decline in sales can imply that the number of outlets being covered by wholesalers has gone down. Here are the comparative charts of AD, BC and Bytes of this April and the last April: 1) AD Whole Sale Comparison

Figure 8


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2) BC Whole Sale Comparison

Figure 9

3) Bytes Wholesale

Figure 10

Thus, it is visible that the total sale have not increased much because of the Whole Sellers have not been very active, in this month.


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Break-up of the outlets (RE Wise)As I have mentioned earlier, the Retail Environment has been further classified into High End Grocers, Low End Grocers, Supermarkets, and Chemists etc. To study the performance of Cadbury in the market, we need to investigate that how the Cadbury products are performing in these different types of outlets. Now, Jagat Singh & Sons Agency covers about 70% of the total Market of Chandigarh for Cadbury. It sells Cadbury products to 715 outlets. The breakup of these outlets is as follows:8) High End Grocers(HEG) 9) Food Stores 10) Supermarket/Hypermarket - 14 11) Chemists 12) Pan Kiosks 13) Low End Grocers(LEG) 14) Wholesale 15) New Channel 16) Institutional/Others - 119 - 28 - 259 - 20 - 33 - 25 - 151 - 67

Figure 11

As we can see, LEGs take the major portion of the Pie. So LEGs are the key for achieving the overall penetration targets.


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RE wise performance:RE HIGH END GROCER SUPERMARKET FOOD STORE WHOLESALE LOW END GROCER PANPLUS CHEMIST NEW CHANNEL INSTITUTIONAL/OTHERS Total Accounts 151 14 67 20 259 28 119 33 24 Active Accounts 144 14 56 16 218 24 92 22 10 Penetration % 95.36 100 83.58 80 84.17 85.71 77.31 66.67 41.67 LBPC 10.20 14.55 10.11 5.69 7.32 6.80 5.79 7.82 3.76

Sub Total:

715

596

83.3

8.2

Table 7 - RE wise performance

Here is the performance summary of Cadbury products across the entire RE of Chandigarh in the month of April 08. The penetration has been very good in HEGs and Supermarkets. In the case of Food Stores, LEGs, Pan Plus, Chemists and New Channel, the penetration has been quite decent. But the condition is quite bad in the case Whole Sale. We have covered only 80% whole sellers, the penetration should have been 100% there. We really need to pull up our socks and focus more on the Whole Sellers for the next month. RE Wise Penetration:

Figure 12


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We registered 100% penetration in the Super Markets and 95.36% penetration in HEGs. Overall we have done a fairly decent job, as far as penetration is concerned. The only problem lies in the case of wholesalers. RE Wise LPBC

Figure 13

The LBPC is one major factor which governs the Brandwise Penetration. Since, penetration of various brands is one major objective of this project therefore we worked hard to improve LBPC, and as a result the LBPC started improving. Currently, the overall LBPC is 8.2. The culprits in the equation(till now) are Chemists and Institutional buyers. We are working on them and expect a good overall result.


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ComparisonsIf we talk about the penetration of various brands then this is one area where we have succeeded in all fronts. The penetration of almost all the products has gone up in comparison to last year. The total number of outlets (covered by Jagat Singh & Sons Agency) in Chandigarh City is 715. The penetration is in percentage terms with 715 as the base.

All Drinks Penetration Comparison April 07 v/s April 08Month All Drinks Apr '07 43% Apr '08 66.80%

Figure 14

The penetration of All Drinks category has improved to 66.80 % in April 08 in comparison to 43% in April 07. This is a good indication for future because once the Shopkeeper keeps some product and it sells then it encourages him/her to order more and more of that product. This fact is not only true for only All Drinks category, but for all the other categories and products. The major portion of the sales of AD Category comes from the Sales of Bournvita. Bournvita in itself has 8 different lines. Out of these 8 lines, 5 lines are of Regular Bournvita and 3 lines are of Bournvita 5 star magic. Here is a complete list of Bournvita lines:-


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17) Bournvita 90 gm Pouch 18) Bournvita 200 gm Jar 19) Bournvita 500 gm Jar 20) Bournvita 500 gm Refill 21) Bournvita 1 Kg Jar 22) Bournvita Five Star Magic 200 gm Jar 23) Bournvita Five Star Magic 500 gm Jar 24) Bournvita Five Star Magic 500 gm Refill Apart from this, AD category also consists of 4 lines of Drinking Chocolate and Cocoa. They are: 25) Cadbury Drinking Chocolate 200 gm 26) Cadbury Drinking Chocolate 500 gm 27) Cadbury Cocoa 200 gm 28) Cadbury Cocoa 50 gm It is a fact worth mentioning here that we were able to improve the penetration of AD category because we were trying to increase the LBPC. We made it a point to see to it that at least one product from the AD category is billed in the maximum number of outlets (which can keep Bournvita or Drinking Chocolates). I realized during my initial market visits that the number of tasks assigned to me in my project may look to be numerous, but almost all the penetration related tasks are directly related to LBPC. After all, if we keep on increasing the LBPC then obviously more and more lines from different categories will find their way into the outlets.


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CDM Group Penetration Comparison April 07 v/s April 08Month CDM Apr '07 Apr '08 52%65%

Figure 15

In the case of Cadbury Dairy Milk also the penetration has gone up from 52 %( April 2007) to 65 %( April 2008). Like in the case of AD category, here also the penetration has gone up because we were working to improve the LBPC. CDM is the flagship product of Cadbury and though the current penetration stands nowhere in front of the penetration that it achieves in the peek seasons, but the increase in penetration in the hot months comes as good news. There are 14 different lines in CDM group. They are:29) CDM 12 gm 30) CDM 22 gm 31) CDM 40 gm 32) CDM 95 gm 33) CDM 165 gm 34) CDM Fruit & Nut 44 gm


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35) CDM Fruit & Nut 80 gm 36) CDM Fruit & Nut 160 gm 37) CDM Roast Almond 44 gm 38) CDM Roast Almond 80 gm 39) CDM Crackle 42 gm 40) CDM Crackle 160 gm 41) Bourneville 42) CDM Wowie With these many lines under CDM group, it was clear that we cannot improve LBPC without improving CDM Penetration and vice-versa. Our little game of selling by mixing n matching different lines to improve LBPC resulted in the improvement of CDM penetration.

CDM Rs. 5/- Penetration - Comparison April 07 v/s April 08Month CDM Rs.5/Apr '07Apr '08 35.70% 52.50%

Figure 16


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5 Star Rs. 5/- penetration Comparison April 07 v/s April 08Month Apr '07Apr '08 Five Star Rs.5/- 40.80%49.90%

Figure 17

Penetration of Rs. 5/- line has been a real problem. Though there has been a significant improvement in the penetration of Rs. 5/- line but still there is a long way to go. For CDM Rs. 5/- , the penetration has improved from 35.7% in April last year to 52.5% in April this year. Penetration of Rs 5/- Five Star has improved from 40.80% to 49.90% for the same time frame. We intend to push it as much as we can to obtain respectable figures. We were able to convince a majority of retailers that Rs. 5/- lines of Cadbury are actually very profitable lines. They occupy minimum of space and the strong brand names helps them to sell easily. The argument that Rs. 5/- chocolates occupy lesser space (than other products like Rs. 5/biscuits for example) was very effective in convincing the retailers to keep these two products.


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Ulta Perk PenetrationMonth Ulta Perk Feb '08 35.94% Mar '08 57.34% Apr '08 52.5%

Figure 18

Since Ulta Perk wasnt there in the market during the April month of 2007, I have compared the penetration with last two months. The data for April 08 is for only 15 days, so we expect the penetration to go up by the end of the month. Last month has particularly been very good for Ulta Perk. Penetration of Ulta Perk rose up to 57.34% in the last month. It shows that Ulta Perk has the potential to make it big in the coming times. Recently, Kentucky Fried Chicken (KFC) has tied up with Cadbury India for the sale of Ulta Perk in the KFC outlets. This will surely help Ulta Perk in generating some extra revenues for Cadbury. Now, Ulta Perk can be the solution to the decline in the sales of Chocolates in summers. Since it has a hard crunchy outer therefore it cannot melt, unlike other chocolates which are exposed to the risk of melting whe

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