Asian Research Consortium

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1 Asian Research Consortium Asian Journal of Research in Marketing Vol. 5, No. 6, December 2016, pp ISSN Asian Journal of Research in Marketing Perception of Consumers towards Cadbury and Nestle Priyanka Chokshi*; Heli Shah**; Rajat Arora***; Nikunj Agrawal**** Abstract *VIT University, Vellore, India. **VIT University, Vellore, India. ***VIT University, Vellore, India. ****Manipal University, Jaipur, India. The chocolate industry of India is dominated by two large companies: Cadbury and Nestle. Both of the companies have a wide range of products. Cadbury has a greater market share than Nestle. Cadbury owns around 67% of the chocolate industry while Nestle owns around 21%. But both the companies provide relatively the same kind of product. Cadbury sells perk and at the same time Nestle sells munch which is relatively same as perk both in taste as well as price. There are many such product which are relatively the same. So the main aim of the research paper is to define the various factors which can play a major role in the decision making process of the consumer for the selection of the brand of the chocolate. The major factors that can influence the selection of a particular brand can include price of the product, taste of chocolate, availability of the product, different variations in the product, the way the product is promoted and the influence of promoting a product by a famous celebrity. So we conducted a survey to know about how can selection of a particular brand of chocolate: Cadbury or Nestle can differ based on the above and many other factors. The result of the survey along with conclusions is provided at the end of the paper. Keywords: 4 Ps of marketing mix, BCG matrix, Cadbury, Nestle, Promotional strategies. Introduction Cadbury was founded in 1824 by John Cadbury. He started his business by selling coco chocolates in a shop. Milk chocolates were first made by Cadbury in 1897 by adding milk powder and the dark chocolate 8

2 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 bestselling brand and in the midtwenties Cadbury's Dairy Milk gained its status as the brand leader. Cadbury India began its operations in Today, Cadbury India 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. Nestle was started around 1860.In the mid-1860s, Henri Nestlé (Henri), experimented with various combinations of cow's milk, wheat flour and sugar. The resulting product was meant to be a source of infant nutrition for mothers who were unable to breast-feed their children. Based on this formula, the company Nestle was formed in Nestle was established in India in They have a variety of products ranging from chocolates and beverages to makeup and cosmetics. Some of the products includes Kit Kat, Munch, Milky bar, Nestea, Nescafe and many more. Objective of the Study The objective of the study is to "compare the marketing of Cadbury and Nestle". The study is to identify the two most prominent and dominating chocolate companies- Cadbury and Nestle and to make a comparative study of the different ways in which both the companies promote and advertise their products and to draw a line between how the marketing strategies of both the companies differ from each other and in what aspects. The main focus in this study is on the chocolate products manufactured by both the companies. After performing the study and analysis we need to find out which company has more market share and which company is preferred by the people and the reasons behind it. The companies Cadbury and Nestle are chosen because they are the major players in the chocolate industry and majority of the population prefer either from the two. So the study aims to find the reasons behind their choice. Review of Literature Vision Statement Cadbury's vision statement is: "The Barrow Cadbury s Trust s Vision is of a peaceful, equitable society free from discrimination and based on the principle of social justice for all." Nestlé's vision statement is: "To become an inspiring growth partner that delivers creative, branded food and beverage solutions enabling operators to innovate, and delight their consumers. 9

3 Mission Statement Cadbury's mission statement is: Cadbury means quality ; this is our promise. Our reputation is built upon quality; our commitment to continuous improvement will ensure that our promise is delivered Nestle's mission statement is: Nestle is dedicated to providing the best foods to people throughout their lives, throughout the world, with their unique experience of anticipating consumers' needs and creating solutions, Nestle contributes to your well-being and enhance your quality of life." The 4 P's of Marketing Mix The four P's of marketing are: Place Fig. 1. The 4 Ps of Marketing Mix The Cadbury chocolate is produced at the chocolate factory in Bourneville in Birmingham. After production, it is transported to the stockrooms. After this Cadbury sells the products to shops that deal with beverages and confectionery e.g. corner shops, superstores. These shops then sell it to the general public. In India it has five manufacturing companies at the following places: Thane, Induri (Pune), Malanpur (Gwalior), Bangalore, Baddi (Himachal Pradesh) 10

4 Fig. 2. The Product Distribution Channel of Cadbury Fig. 3. The Distribution Network of Cadbury Now coming to Nestle, after the product has been manufactured in the factory, it goes to the warehouse from where it is supplied to the distributers. The distributors supply the products to wholesalers and retailers. From here the consumers are able to purchase the product. 11

5 The distribution channel can be shown as follows: Fig. 4. The Product Distribution Channel of Nestle Fig. 5. The Distribution Network of Nestle 12

6 Product The next P from the 4 P's of market mix is the product. Both Cadbury and Nestle are major companies in the food industry. Both the companies not just provide chocolate products but are also involved in manufacturing different products such as beverages, milk products and many prepared dishes. Both the companies have many related products. The list of the products by both the companies which can be compared with each other are: 1) Munch and Perk Munch is a product of Nestle where as Perk is the product of Cadbury. Both chocolates have wafer bas coated with chocolate. Thus both the companies provide the same kind of product with same taste. Depending of the way the company advertises the product, people can make their preference accordingly. 2) Eclairs and Choclairs Eclairs was manufactured and sold by Nestle and later the same product was sold by Cadbury by the name Choclairs. Both are toffees with chocolate sauce inside it. Thus the toffee product of both the companies is the same. Depending on price of the product consumer may take their buying decision. 3) Bar one and 5-star Bar one is the product of Nestle whereas 5-star is the product of Cadbury. Both these chocolates have caramel content in it coated with chocolate. As both the chocolates have same content and flavor, advertisement and price can play a major role in selection. 4) Milo and Bournvita Milo is a Nestle product and Bournvita is a Cadbury product. Both are chocolate flavored milk powders. Thus here the main factor that plays a role in product selection is taste of the powder and even price. 5) Nestle Nuts and Dairymilk Fruit and Nuts The similarity in both these chocolates is their nuts content. The difference in both the chocolates is that Nuts contain nougats and hazelnuts covered with chocolate where asdairymilk fruit and nuts contain almond and raisins in it. 6) Aero and Pepper Mint Aero is a product manufactured by Nestle and Pepper mint chocolate is manufactured by Cadbury. The similarity in both the products is that both contain peppermint in the centre coated around with chocolate. Although the products are not sold now but these can be seen as similar products manufactured by different companies. Selection can be made based on taste and price. 13

7 7) Milkybar and Dream Milkybar is a product of Nestle whereas Dream is chocolate manufactured by Cadbury. Both the products have white chocolate content in it. Price plays a major factor according to the content. 8) Classic and Dairy Milk Classic is a Nestle product whereas Dairy milk is the most famous product of Cadbury. The similarity in both the chocolates is they both are plain chocolate bars. But the difference in both is that Nestle does not have any variations in the product whereas Dairy milk have a lot of variations in the basic product like dairymilk silk, dairymilk raisins, dairymilk fruit and nuts, dairymilk orange and many others. Promotion Promotion of the product plays a major role as it helps people to be aware of the product and also pursue them to buy the product and recommend it to others. Cadbury prefers emotional advertisements showing people the role of their products in every aspects of their lives. The other strategy used by Cadbury to attract people is promoting their products through celebrities. Amitabh Bachchan is the brand ambassador of Cadbury. Cadbury promotes the products by using the following three mediums: Television The print media Posters Few of the advertisements of Cadbury along with their taglines are: 1) The Real Taste of Life. The advertisement has a girl dancing on the cricket field. The message from this advertisement is Dairy Milk is for enjoyment. 2) During the late 90's Cadbury had a campaign with tag line: Khane walon ko khane ka bahana chahiye. Their aim was to increase chocolate consumption among the masses. 3) The tagline of one advertisement was: Kuchmetha ho jaye'. The aim was to associate celebratory and congratulatory moments with Cadbury. 4) The advertisement with tagline: Pappu pass ho gaya. The message was to encourage those who have pass the exams to celebrate with Dairy Milk. 14

8 5) The advertisement with tagline : Miss Palampur. The target of this advertisement was to focus on the adults. 6) The tagline of the advertisement was: Aajpahlitarikhai. The target was to spread the message to celebrate the salary or pay day along with Cadbury dairy milk. 7) The 5 star advertisement has the tagline- "Khayeinaurkho jaeye", which tells us about the delicious and long-lasting taste of the chocolate Nestle has four distinct elements for promotion. They are: Advertising Public relations Personal selling Sales promotion Nestle uses the following strategies for product sales. They can be summarized as: 1) Nestle uses the same symbol worldwide. They never change the symbol according to places. 2) Nestle follows the tagline: 'Think globally act locally'. 3) The formulation of the products of Nestle varies to suite the cultural differences. 4) To increase the sales of the product, they reduced prices and introduced smaller packages for productsto make them affordable has helped in more promotion of the products. 5) The company has also promoted their products like giving free samples of the new products free with old, popular and famous product. 6) The most famous advertisement by Nestle was for Kit Kat, which was an animated advertisement with the tagline:" KIT KAT BREAK BANTA HAI". It urges busy youngsters to take a break and notice the fun events in their surroundings. Nestle focuses more on RURAL DEVELOPMENT. It has projects like: 1) Clean Drinking Water Project and Water Education Program for Children The project has benefited more than children and even the farmers were made aware to make proper use of water during their farming activities. 15

9 2) Nestle Agricultural Services Chokshi et al. (2016). Asian Journal of Research in Marketing, It has used the experience gained by nestle in different parts of the world to set up a system of direct and efficient contact with the farmers in India. Price The fourth P of the marketing mix is price. Price plays a crucial role in the selection of the product because if the same kind of products is offered by different brands in different prices, people usually prefer the product with lower price and with better taste. Given below is a table of prices of various products of Cadbury and Nestle. The products selected for comparison are similar kind of products manufactured by Cadbury and Nestle. Table 1. Price Comparison for Cadbury and Nestle Products Products by Nestle Products by Cadbury Price of product of Nestle according to weight Price of product of Cadbury according to weight Munch Perk 200 grams for Rs grams for Rs.99 Eclairs Choclairs 290 grams for Rs grams for Rs.50 Nestle Classic Dairymilk 18 grams for Rs grams for Rs.10 Bar one 5 star 44 grams for Rs grams for Rs.20 Milo Bournvita 480 grams for Rs grams for Rs.200 Aero Peppermint 200 grams for Rs grams for Rs.595 Milky bar Dream 20 grams for Rs gram for Rs.34 From the above table we see that how the same kind of product is sold by Nestle and Cadbury and the price of the product also depends upon weight and this can help in the selection of the product. Market Share From the above chart we see that 70% of the Indian chocolate industry is owned by Cadbury where as 16% is owned by Nestle and rest 14% by some other companies. Fig. 6. Market Share of different Companies in Chocolate Industry of India 16

10 VI. BCG Growth Market Share Analysis The BCG matrix, also known as Boston consulting group matrix is used to determine the priority that needs be given to various products of Cadbury and Nestle. The matrix assumes that increase in market share will increase the revenue generation for the company. The matrix is divided into four boxes with two axis. The four units in the matrix are: Dog Cash cow Star Question The two axis in the matrix are: Market Growth Rate Relative Market Share Fig. 7. BCG Growth Matrix Now we come to comparing the BCG matrix of both Cadbury and Nestle. Cadbury's BCG Matrix The different products of Cadbury can be classified based on their market share and market growth rate as high market share and high market growth, high market share and low market growth, low market share and high market growth, low market share and low market growth. 1) Star The star unit of BCG matrix shows high market share and high market growth. It generates large amount of cash as it has large market share but on the same side consumes cash as it has high market growth rate. The Cadbury's products included in star category are- 17

11 Cadbury Celebrations Bournvita Cadbury Dairymilk 2) Question Mark Question mark falls under the category of low market share and high market growth rate. They consume more cash and generates less as it has low market share. This part of matrix should be analysed properly to determine whether it is worth the investment or not. The products which fall under this category are: Bournville chocolates Dairymilk candy 3) Cash Cows This part of the matrix has low market growth but a relative high market share. It requires less investment and generates more cash, thus having a high market share. This category contains well established matured products. The Cadbury products which fall under this category are: Perk 5-Star Cadbury Delight Dogs This category of the matrix has low market share and low market growth. It neither generates revenue nor consumes cash. The money falling under this category has very little potential. This products should be carefully analysed and discarded if they are of no use. The Cadbury's products which fall under this category are- Cadbury Gems Eclairs 18

12 Fig. 8. BCG Matrix for CADBURY Bcg Matrix of Nestle The different products of Nestle can be classified based of their market share and market growth. 1) Star It represents high market share and high market growth, having high revenue generation and investment. Thus the net revenue nullifies. The products of nestle included in this category are: Nescafe Ceralac 2) Question Marks This part of the matrix stands for high market growth and low market share. The products included in this part are: Nescafe decaf Nestle nestum Smarties Nesquik 3) Cash Cows It represents high market share and low market growth. The products included in this category are: Maggie noodles Kit Kat 19

13 Dogs This is the part of matrix that has low market share as well as low market growth. This part includes the following products: Nestea Milky Bar Nestle Dahi Nestle Crunch Nestle Munch Fig. 9. BCG Matrix for Nestle Survery based Study Data Collection For collecting the data, we made a questionnaire, to find the preferences of people for different parameters and situations. The data was collected for 110 responses. Data Analysis From the data collected, we can analyze the following: Most of the people like to consume chocolates, but usually the chocolates are consumed occasionally. The factor that plays the most important role in selection of a chocolate is sample tasting. 20

14 With respect to price, both Cadbury and Nestle are reasonable. The advertisement with has an emotional connection attracts most customers. Brand ambassador promoting the product has more impact on the sales of the product. Different kind of chocolates such as hard or crunchy and many other also plays a major role in chocolate selection. Dairymilk is the most preferred chocolate out of all the products sold by Cadbury and 5- Star is the most preferred chocolate out of all the products sold by Nestle. Fig. 10. Response for Question 1 Fig. 11. Response for Survey Question 2 21

15 Fig. 12. Response for Survey Question 3 Fig. 13. Response for Survey Question 4 Fig. 14. Response for Survey Question 5 Fig. 15. Response for Survey Question 6 22

16 Fig. 16. Response for Survey Question 7 Fig. 17. Response for Survey Question 8 Fig. 18. Response for Survey Question 9 Fig. 19(A). Response for Survey Question 10 23

17 Fig. 19(B). Response for Survey Question 10 Fig. 19(C). Response for Survey Question 10 Fig. 20. Response for Survey Question 11 Fig. 21. Response for Question Number 12 24

18 Fig. 22. Response for Survey Question 13 Fig. 23. Response for Survey Question 14 Fig. 24. Response for Survey Question 15 Fig. 25. Response for Survey Question 16 25

19 Fig. 26. Response for Survey Question 17 Fig. 27(A). Response for Survey Question 18 Fig. 27(B). Response for Survey Question 18 Conclusion Doing the market research on the topic, "Comparative study on the marketing of Cadbury and Nestle", we got a chance to interact with people having different views on the same product. Depending on the way the company promotes its products, people set their preferences accordingly. The choice of the product also depends on the price of the product, the packaging of the product and how frequently it is available. So in conclusion we can make is: Cadbury has a great impact on the mindset of people as it has a good brand name and brand ambassador promoting the product has a great influence. 26

20 Nestle is preferred by people but its preference is low in comparison to Cadbury but still it is one of the top most company in chocolate industry References Walter van Waterschoot & Christophe Van Den Bulte, The 4P Classification of Marketing Mix Revisited. Carl R. Anderson & Carl P. Zeithaml, Stages of Product life cycle, Business Strategy, and Business Performance. Fazlollah Kazemi&Malihe Esmaeili, The Role of Media onconsumer Brand Choice A Case Study of Chocolate Industry. Amandeep Kaur Hundal&Moira Singh, Buying Behaviour of Consumers For Different Brands of Milk Chocolates. Dr. G. Muruganantham and Priom Biswas, Factors Influencing The Buying Behaviour Of Chocolates. 27