1

Per capita confectionery consumption in the UK is among the highest in the

world, exceeded only by Ireland and Denmark. Chocolate confectionery
accounts for around 70% of sales value in the UK market, with sales of
sweets (sugar confectionery) at around 30%.

Historically, the chocolate confectionery market has been characterised by the

dominance of a number of well established brands, such as Cadbury Dairy
Milk, Mars Bar and Kit Kat.

1
 2

Cadbury…

Cadbury plc is a confectionery and beverage company with its headquarters

in London, United Kingdom, and is the world's largest confectionery
manufacturer. Cadbury plc manufactures chocolates and sweets such as the
popular Dairy Milk, as well as a limited range of beverages in Australia.

The firm was formerly known as Cadbury Schweppes plc before demerging
in May 2008. With a history stretching back over 200 years, today Cadbury
Schweppes employs around 54,000 people and its brands are enjoyed in
almost every country around the world. They are also the world's third largest
soft drinks company.

Throughout history chocolate has been associated with romance and sharing.
Today the richness and smoothness of Cadbury chocolate is what makes it
one of the world's favorite treats.
Cadbury has two targets for its products - trade customers who stock the
product and consumers who buy it.

This project revolves around the chocolate bar called ‘FUSE’ launched by
Cadbury in 1996 in the UK.

2
 3

Fuse…

Fuse was a chocolate bar produced by Cadbury Schweppes in the UK. The
product was unusual for being a solid bar of chocolate containing suspended
within it nuts, raisins, crisp cereal and fudge pieces rather than having these
ingredients simply coated with chocolate.

The bar tested very well in research, with 82% rating it as excellent or very
good and 83% proposing to purchase it regularly.

Fuse was the subject of a large marketing campaign leading to a national

rollout of the product on "FuseDay" - Tuesday 24 September 1996.

The unusually large marketing campaign was the subject of a documentary

by TV Choice Ltd - The Marketing Mix at Cadbury's (1998). It’s launch is still
glorified by it’s makers as their most successful launch campaign ever.

Over 250 ingredients were tried and tested before the final recipe was
agreed. In the first three months of its launch, 70 million Fuse bars were
purchased. Sadly, it was discontinued in 2006.

3
 4

PRODUCT

The development of strong brands has always been a feature of the

confectionery market.

The market for chocolate bars is highly competitive. There are a small
number of large firms in the industry - Mars, Cadbury, Nestlé and Suchard
being the most well known. Many of the brands in the market have been in
existence for a long time and have a high amount of brand loyalty. Openings
for new products therefore are limited. There are many examples of products
that have been launched and which have been withdrawn because they could
not sustain long-term sales success.

The market for certain types of chocolate bar has changed in recent years.
The growth of the so - called 'count-line bar' (shaped like Mars bars) became
popular as people ate chocolate on the go as opposed to sitting down in a
room with a traditional bar of chocolate. Companies had to respond to these
changes. Rowntree (now owned by Nestlé) changed the shape of their Aero
bar and Cadbury brought out a rival bar called Wispa. Both of these were
designed to exploit this growing market.

The market is still changing but using chocolate as a snack as opposed to

sharing a bar amongst a family or giving chocolate as a gift is still a growing
part of that market.

The 'Fuse' concept was developed after market research identified the growth
of snacking and a definite gap in the market for a more chocolaty snack. A
number of ingredients were devised and tested following a survey which
questioned consumers about their snacking habits and preferences. A
research and development team was then asked to develop a number of
product recipes which addressed the needs expressed by consumers.

Not all products successfully emerge from the product development phase.
Research and development involves combining various ingredients to
develop potential new products. Considerable development time was spent

4
 5

on Fuse, carefully engineering the ingredients in order to deliver the right

balance of chocolate, food elements and texture. More than 250 ingredients
were tried and tested in various combinations before the recipe was finalised.

Any new product in the snacking sector must establish points of difference
from existing products within the market - thus creating a unique selling
proposition (USP) i.e. a product with unique appeal which is not shared by
any of its competitors. Whereas other confectionery snacking products focus
primarily upon ingredients, with chocolate used only to coat the bar, the
product developers decided to use Cadbury chocolate to ''fuse'' together a
number of popular snacking ingredients such as raisins, peanuts, crisp cereal
and fudge pieces.

Fuse was targeted at the general, already chocolate consuming customers

and also specifically at people between the age group of 20 to 45. This age
group is considered to be always on the go. The chunky Fuse was the perfect
chocolate snack for such consumers. Due to this chunky nature Fuse could
be stored for a long period of time and also used as snacks on outings and
picnics.

Fuse Bar which they described as "A fusion of Milk Chocolate, Raisins,
Peanuts, Crispy Cereal and Fudge pieces", were discontinued in 2006.
In the eyes of Cadbury's their Fuse Bars were never little more than an
experiment, a barometer to gauge the trends of the confectionary market.

The Bar itself is typically Milk Chocolate brown in colour and are rectangular
in shape and are sold in a plastic wrapper which is predominantly Purple in
colour. The weight of the Bars are 49g and are adequately sized, just slightly
smaller than a standard sized Mars or Snicker Bar. the texture is quite brittle
and crunchy and the Chocolate quickly melts in your mouth. Initial taste is of
Peanuts which works brilliantly when combined with the Milk Chocolate and
this Bar is packed full of Peanuts with a rich , creamy smell. Inside the Bar
there are Raisins and also bits of Cereal but the taste of these is drowned out
by the taste of the Peanuts whilst the Cereal gives the Fuse Bar its crunch.

5
 6

THE NUTRITIONAL INFORMATION

Each 49g Fuse Bar will provide you with the following:

Energy - 240 calories

Protein - 3.5g
Carbohydrate - 28.9g
Fat - 12.1g

The product is suitable for Vegetarians but does contain Nuts so is not
suitable for anyone with a Nut allergy. The product also contains Egg and
Soya.

6
 7

PRICE

Generally used pricing strategies:

Based price- This is a price that is nearly the same as the competition
has charged.

Loss leader - price is below the true cost of the product to encourage
consumers to buy product.

Penetration or destruction price - This is a low price to encourage

loyalty and to gain market share. Later the price is raised

Cost plus price - Cost of product plus a mark up of profit.

Psychological price - This is when a price is set at e.g. £6.99 rather

than £7.00 so it encourages people to think it is cheaper.

Their pricing strategy…

The Fuse went for base pricing since it was also being used by their
competitors. It was a market oriented strategy, so they set the R.R.P. at
33p. They did this because if they priced it too high then no one would
buy it since they could purchase other chocolate bars for less. They
couldn't set it too low because they have an oligopolistic market. This
means there are only a few dominant competitors in the market.
Hence, if they priced it too low, for example 20p they would be selling
at a price less than the rest but then the other companies would also
have to lower their prices because of which the overall the prices of
chocolates would fall and the profits of all the companies would go
down. So Cadbury priced the chocolate bar appropriately but not too
low so Cadbury still earns a fair bit of profit.

7
 8

The price would never really change throughout the life cycle of the
product since there are lots of other brands which are also selling their
products of the same category at similar prices.

Different people have different level of sensitivities when it comes to

prices. Some people prefer to buy without caring about the fact that
they could get a better deal and some other always want to land up
with the best deal. This logic applies to Fuse just a tiny bit because
people don't look for the best buy on a chocolate bar because it is an
impulse buy. An impulse buy is just when you walk in a shop and buy
something quickly without much thought before the purchase.

This means that large quantities of Fuse should be sold for the
company to break even. The firms will then in turn use flow production
and benefit from economies of scale. This will help them by saving
money and time because they will be buying and making in bulk.

From my findings I have seen that Fuse has under charged people for
their chocolate bars. Fuse could have increased the price ands still got
the same amount of sales because not many people care how much
their chocolate bar costs since most of these purchases are impulse
purchases. So a slight increase in price could have been more
beneficial since Fuse has to sell a lot to breakeven, even though
Cadbury have very good economies of scale.

8
 9

Place

This is where the product is sold, how it gets to the consumer and how
it gets to that place of purchase.

There are 4 types of places where you buy products:

Retailer: This is a businessman who sells to a consumer.

Wholesaler: A wholesaler is a firm that buys from a factory in bulk

and breaks it down to sell to retailers.

Agent: This is somebody that puts buyers and sellers

together.

Producer: This makes the product. In this case, the producing

company is ‘Cadbury’.

Also there are vending machines which Cadbury uses quite a lot.

The channels of distribution

These paths were targeted by Cadburys to Extend Fuse Bars into the
market.

Types of retailers :

 Independent (newsagents etc.) -sole traders mainly

 Supermarkets

 Specialist multiples

 Variety chain stores

9
 10

 Franchised chains.

 Mail order and internet.

Chocolate bars are sold in most of these above mentioned places.

Specific ‘chocolate stalls’ or ‘chocolate counters’ are normally located
in areas near the checkout points since buying chocolates are
normally impulse purchases. So they are stacked at such places
wherein people could just grab one while buying another product.
Mostly, they are kept in huge boxes with some kind of promotion
campaign linked to it (for eg. Cheap discounts) , so it could attract
attention of consumers while they are shopping or paying their bills or
waiting in long queues.

The ‘Place’ factor doesn’t only concern the shops but also the place
where the chocolates are stored. Most people are going to look
around the normal eye level which is about 4 to 6 ft from the ground.
Hence that could be an ideal height to place the Fuse bars on the
shelves. This works very well as Fuse is an impulse buy so consumers
would just quickly look at the selections and would prefer to look at a
comfortable level without stretching upwards or downwards to find
Fuse.

Cadbury’s overall strategy on the ‘Place’ factor would be, it is not of

that importance where exactly it is sold in the sense that ‘Fuse’ will sell
where it has to and won’t where it doesn’t have scope to do so but
they have targeted all leading supermarkets and ‘big chain’ stores and
aimed at as many promotions as possible using big boxes of
chocolates stored near the checkout areas to attract impulse
purchasing. Secondly, they have also used the concept of eye level
shelves to a great extent so that the consumers don’t miss it.

10
 11

Promotion

Companies like Cadbury promote mainly either by persuading

consumers to buy the products or by explaining what the product is all
about or go for both. In the Fuse’s case the strategies they’ve adopted
are awareness and persuasion.

In recent years, product launching has become an art which can make or
break a product. A successful launch makes potential customers aware of the
new product and keen to try it.

Before consumers could try the product, however, it was important for
Cadbury to gain the support of its trade customers. Retailers had to view it as
helpful in encouraging customers to visit their shops. If the product had failed
to interest retailers and distributors, the costs of investment would not have
been met and they would not have stocked the product.

Cadbury conducted one-to-one briefings with over 70 key trade customers.

This helped Cadbury build awareness and commitment to the launch and
obtain significant orders for in-store displays and merchandising ahead of the
launch date. The trade commitment was reflected in high levels of display
support in store during the launch.

Traditionally, new confectionery products are initially launched in one region of

the country, in order to gauge the product's success, before moving on to
other regions over a period of time. The commitment to the success of Fuse
was so great, however, that it was Cadbury's first completely national launch
for 20 years.

Having a catchy 'hook' for a new launch helps to make consumers

notice the product. Cadbury and its trade customers managed the first
availability of Fuse around one day, Tuesday 24th September, aptly
christened 'Fuseday'.

11
 12

Public relations (PR) support was substantial. It told the story of Fuse,
explained that it had taken five years to develop, involved an investment of
£10 million, the development of a new plant at Somerdale near Bristol and £4
million in advertising costs. The TV campaign and PR campaign were so
successful that Cadbury was under pressure to meet repeat orders post-
launch!

Many advertising and promotional campaigns were carried out post launch.
These also included the traditional TV ads along with ads in magazines and
billboards. It was also a topic of discussion amongst people because in later
years fuse also developed high online presence.

Lately, a lot of emphasis has been given to consumption of healthy

foods or in other words natural foods. I’ve come across many graphs
and charts which depicts the average consumption of healthy foods by
individuals.

This could have been bad for the Fuse bar as the graph could
increase awareness of the fact that a healthy option is important which
could result in the pressure groups against unhealthy foods to increase
in number. The pressure groups could then target chocolates as
chocolates are seen as an unhealthy food that young people use to
substitute healthy food.

During the early days there was a strong, albeit short lived advertising
campaign that launched the Fuse Bar into prominence but this soon fizzled
away and Fuse Bars never quite made it as a household name like so many
of the other Cadbury brands and instead they were relegated to the back of
the shelves.

Even after a decade later they recorded low sales and showed little
signs of improvement. This finally led to the discontinuation of the
product.

12
 13

PACKAGING

Proper packing not only helps to protect and preserve the product in transit,
but also helps to sell the product in the market. The terms packaging and
packing are used interchangeably. However, there is a difference between the
two terms. Packing refers to protective covering used for transportation of
goods, whereas, packaging refers to the containers in which products reach
the ultimate consumer.

The type of packing differs from product to product, depending upon its
physical properties, the distance of transportation, specifications of the
importer, etc.

The packaging achieved impact by using bright, fiery colours for the product
name and contrasting them against the deep and instantly recognisable
'Cadbury purple', which communicated the manufacturer's heritage. The first
thing that hits you when you spot a Fuse Bar on the shelf is the distinctive
Cadbury's Purple coloured wrapper.The wrapper it must be said is quite
attractive but not overly eye-catching. It is a plastic wrapper as opposed to the
more common foil. Although it would seem the foil wrappers are
predominantly used on only the most popular bars in Cadbury’s range.

13
 14

The colours were also used in a gun powder style to suggest an explosive
taste. The vibrancy of the design aimed to differentiate it from other products
in the sector so that it would have an immediate point-of-sale impact both on-
shelf and in store display units.

The word "Fuse" is written across the front of the wrapper in large Orange
capital letters and above this there is the Cadbury's logo.

Also across the front of the wrapper there is a white line which weaves itself
between the letters within the word "Fuse." Closer inspection reveals that this
is actually a wire, complete with a plug on the end. The white line is actually a
Fuse wire and there are sparks coming off it.

The reverse of the wrapper clearly contains the ingredients and nutritional
information as you would expect, as well as the bar code and best before
date. There is also a customer satisfaction guarantee tucked away under the
flap at the back.

Three different packaging formats were developed in order to maximise the

various multi-purchase opportunities available. The key pack size was the
single bar, designed to entice trial and to encourage repeat purchase. The
'treat size' and the multi-packs were aimed at families.

PACKAGING CONSIDERATIONS

1). Containers – big containers are used for shipping bulk items.

2).The weight of each package should not be very high since it can affect
the chocolates and also as it may attract more dock handling and freight
charges.

14
 15

Conclusion

Concept of a ‘on-the-go’ chocolate bar was an interesting idea. But Fuse

wasn’t the first in this category. Similar products, that were described as
chunky were already available in the markets aiming at the same consumers
with similar pricing strategies. In fact, Cadbury itself already had a product
named ‘Picnic’ which was very similar to Fuse, the only difference being
omission of caramel in the later. The Marketing strategies were very well
thought of. Especially the Pre-launching phase and the marketing researches
were done quite accurately. Customer needs were pinpointed before
development of Fuse. Cadbury had gone ahead with careful planning and
some amount of risk when it came to launching of Fuse. The campaign was
overly expensive and targeted all forms of media. Due to this the consumers
were already aware of the product and were waiting for Fuse to be launched.
It was the biggest ever marketing launch for a confectionery snack ever seen
in the UK. The launch recorded a phenomenon success and sold like hot
cakes in the initial years. But later due to poor planning and inadequate
market analysis, the Fuse ship started sinking and the product was pulled
from the market before things became worse. According to the numerous
blogs that I’ve gone through, people all across UK are still puzzled as to why
Fuse was discontinued. Fuse was loved by chocolate consumers and it’s
peanuty taste was refreshing to most. If this lapse in the market analysis was
handled better there wouldn’t have been a need to implement such drastic
measures such as discontinuation of the product

15
 16

Bibliography

Internet Sources

www.cadbury.co.uk
http://www.chocolatereview.co.uk
www.cadburyschweppes.com
www.wikipedia.org

Special Thanks to our marketing professor Mr. Maccario.

16