Chapter 1 Cadbury Business in India

Cadbury

We pour our hearts into creating foods that are delicious and loved by people worldwide. We have delicious chocolates, delectable cookies, flavorful gums, fortified beverages and blissful candies. And, whether youre grabbing a quick bite, sitting down with your family or celebrating with friends, were there with the brands you know and trust.

INTRODUCTION The Cadbury s Inc. has taken the opportunity to offer us a broader view of chocolate category. The Cadburys Indias no.1 Chocolate is able to share with their market insights based upon unparalleled breath of chocolate experience. Cadbury has grown from strength to strength with new technologies being introduced to make the Cadbury confectionary business, one of the most efficient in the world. The merge in 1969 with Schweppes and the subsequent development of the business have led to Cadbury Schweppes staking the led in both, the confectionary and soft drink market inside UK and becoming a major force in the international market. Cadbury Schweppes today manufactures product in 60 countries and a trade in staggering 120.The Cadbury story is a fascinating story of a family business that grew in one of the biggest, most loved chocolate brand in the world. A story that you remember as the story of The taste of life.

HISTORY With the entry of multinationals and home companies sprucing up their act, the confectionery market is booming. McKinsey & Co. has estimated the confectionery industry to touch a whopping Rs. 6 500 cores by the year 2008. Till the eighties, the chocolate market was small and the product category itself was fuzzy. In the eighties, Cadburys - the virtual monopolist had decided to focus its efforts on making chocolates a distinct category with an identity of its own. And the marketer had sharply positioned its product at children to do that. Hence, chocolates bore an Only for kids tag, and kept adults at bay. By the end of the eighties, Cadburys still ruled the roost with over 80 percent market share. And though several brands - like Amul and Campco - tried to break into the market, none of them had succeeded in shaking the leaders grip. In fact, Cadburys had become a brand virtually generic to chocolates. Then chocol ates were used to reward and reinforce positive behaviour and hence were categorised as a luxury reserved for special occasions. This was, a stark contrast to the west where chocolates were snacked on, eaten as mini meals or just to suppress pangs of hunger. But constant working by players like Cadburys (re-launch of Cadburys Dairy Milk targeting adults and as a casual anytime buy) and Cadbury towards exploding the myth that chocolates are meant for children only, has resulted in the segment booming.

Trends in the Industry

With socio-economic changes rapidly taking place, the young and not so young population will lead a new life style and chocolate eating is definitely going to be widespread and acceptable. In the industry, both population and family incomes as well as urbanisation are on the increase. There has been a significant growth in the middle class, with 5.8 million people having upgraded to the quoted middle class. There is quantified data on FMCG usage having increased (NRS-VI & IRS98 figures) Thanks to the above reasons the growth in the chocolate market is estimated to be at 22% in 2001. But marketers in the industry are looking forward to a much higher growth rate, as Indias per capita consumption of chocolates is only 15 Gms. Versus 6 Kg in the west.

About the company Cadbury India is a fully owned subsidy of Krafts Food Inc. The combinations of Krafts Food Inc. and Cadbury create a global power house in snacks, and confectionery and good meals. With annual revenues of approximately $50 billion, the combined company is the worlds second largest food company, making delicious products for billions of consumers in more than 160 countries. We employ approximately 140,000 people and have operation in more than 70 countries. In India, Cadbury began its operations in 1948 by importing chocolates. After 60 years of existence, it today 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). The corporate office is in Mumbai. Our core purpose "make today delicious" captures the spirit of what we are trying to achieve as a business. We make delicious foods you can feel good about. Whether watching your weight or preparing to celebrate, grabbing a quick bite or sitting down to family night, we pour our hearts into creating foods that are wholesome and delicious.

Cadbury India Currently, Cadbury India operates in four categories viz. Chocolate Confectionery, Milk Food Drinks, Candy and Gum category. In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over the years. Some of the key brands in India are Cadbury Dairy Milk, 5 Star, Perk, clairs and Celebrations. Cadbury enjoys a value market share of over 70% - the highest Cadbury brand share in the world! Our billion-dollar brand Cadbury Dairy Milk is considered the "gold standard" for chocolates in India.

The pure taste of CDM defines the chocolate taste for the Indian consumer. In the Milk Food drinks segment our main product is Bournvita - the leading Malted Food Drink (MFD) in the country. Similarly in the medicated candy category Halls is the undisputed leader. We recently entered the gums category with the launch of our worldwide dominant bubble gum brand Bubbaloo. Bubbaloo is sold in 25 countries worldwide. Since 1965 Cadbury has also pioneered the development of cocoa cultivation in India. For over two decades, we have worked with the Kerala Agriculture University to undertake cocoa research and released clones, hybrids that improve the cocoa yield. Our Cocoa team visits farmers and advise them on the cultivation aspects from planting to harvesting. We also conduct farmers meetings & seminars to educate them on Cocoa cultivation aspects. Our efforts have increased cocoa productivity and touched the lives of thousands of farmers. Hardly surprising then that the Cocoa tree is called the Cadbury tree! Today, as a combined company with an unmatched portfolio in confectionery, snacking and quick meals, we are poised in our leap towards quantum growth. We are the world's No.1 Confectionery Company. And we will continue to make today delicious
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 Who are we Consumers inspire us. To make today delicious, we begin with our consumers. We listen, we watch and we learn. We understand their joys and their challenges because were consumers too.

What we do We make delicious foods you can feel good about. Whether watching your weight or preparing to celebrate, grabbing a quick bite or sitting down to family night, we pour our hearts into creating foods that are wholesome and delicious. Our reach. We believe we can make a delicious difference, everywhere. Were constantly looking for fresh ideas to improve our workplace, our partnerships, our communities and our world. How we behave Our Values We understand that actions speak louder than words, so at Kraft Foods: We inspire trust. We act like owners. We keep it simple. We are open and inclusive. We tell it like it is. We lead from the head and the heart. We discuss. We decide. We deliver.

 How we grow. We focus on creating sustainable, profitable growth. And our strategies guide our efforts: Build a high performing organization Reframe our categories Exploit our sales capabilities Drive down costs without compromising quality

About our people.

It takes great people to make great brands. Our approximately 140,000diverse employees around the world are the reason we succeed. It established brand name in unrelated markets or product categories, e.g. using a well-known designer name on cosmetics, clothes, sunglasses etc., such as John Rocha Waterford Crystal

Cadbury and Its Products Cadbury Boost is a chocolate bar made by Cadbury Ireland in the Republic of Ireland, and sold in the UK by Cadbury UK and also sold in Australia and South Africa. Its wrapper says that it consists of milk chocolate with caramel and biscuit filling. The wrapper also states that Boost is "Charged with glucose."

Importance & Scope TARGET MARKET The Indian chocolate markets is valued at Rs.650 cores (i.e. Rs 6.50 billion in a year) The Indian chocolate bazaar is estimated to be in the region of 22000-24000 tonnes per annum. And is valued in excess of US $80 million. Indias metro proving to be the big draw locking penetration in excess of 15 percent. Next, comes the relatively smaller cities/towns where consumption lags at about 8 percent. Chocolates are a luxury in the rural segment, which explains the mere 2 percent penetration in villages. The market presently has close to 60 MN consumers and they are mainly located in urban areas Marketing objectives Grow shareholder value Over the long term Cadbury in every pocket. Marketing strategy is aimed at achieving this vision by growing the market, by appropriate pricing strategy that will create a mass market and to have offering in every category to wide in the market

FACTORS INFLUENCING PRICING OF CADBURY I. II. Internal Factors Corporate and marketing objectives of the firm. The image sought by the firm through pricing. The characteristics of the product. Price elasticity of demand of the product. The stage of the product on the product life cycle. Use pattern and turn around rate of the product. Cost of manufacturing and marketing. Extent of distinctiveness of the product and extent of production differentiation practiced by the firm. Other elements of the marketing mix of the firm and their interaction with Pricing. Composition of the product line of the firm. External Factors Market characteristics. Buyers behaviour in respect of the given product. Bargaining power of major customers. Competitors pricing policy. Government controls regulations on pricing. Other relevant legal aspects. Societal (or social) considerations. Understanding, if any reached with price cartels.

AN INSIGHT ON 5 PS OF MARKETING (CADBURY)

1. PRODUCT
The average company will compete for customer by conforming to his expectation consistently. But the winner will surpass them by constantly exceeding his expectation, delivering to his door step additional benefits which he would never have imagined . Cadburys offer such product. The wide variety products offered by the company include: I. Chocolate & Confectionary II.Beverages III. Food Drinks

2. PRICING Make no mistake. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. The strategy used by Cadburys is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them. Cadburys has launched various products which cater to all customer segments. So every customer segment has different price expectation from the product. Therefore maximizing the returns involves identifying right price level for each segment, and then progressively moving through them. Dairy Milk Rs. 15 Perk Rs. 10 5 Star Rs. 10 Fruit and Nut Rs. 22 Gems Rs. 10

3. Physical Distribution PLACE

Distribution Equity: It takes much more time and effort to build, but once built, distribution equity is hard to erode. The fundamental axiom of Indian consumer market is this: You can set up a state-of the-art manufacturing facility, hire the hottest strategies
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on the block, swamp prime television with best Ads, but the end of it all, you should know how to sell your products. The cardinal task before the Indian market in managing is to shoe-horn its product on retail shelves. Buyers are paying for distribution equity not Brand equity and market shares. Why does the company need distribution equity more in India? With technology and competitive pressure slash in it is becoming increasing difficult for marketers to retain a unique product differentiation for long period. In a product and price parity situation, the brand that sells more is the one that reaches the highest number of customers. India 1 billion people, 155 million household has over 4 million retail outlets in 5351 urban markets and 552725 villages, spread cross 3.28 million sq. km. television has already primed and population for consumption, and the marketer who can get to the to the consumer ahead of competition will give a hard to overtake lead. But getting their means managing wildly different terrains-climate, language, value system, life style, transport and communication network. And your brand equity isnt going to help when it comes to tackling these issues. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. Once the stock product reaches retailers, the prospective customers can have access to the product. Cadburys distributes the product in the manner stated above. Cadburys distribution network has expanded from 1990 distributors last year to 2100 distributors and 4,50,000 retailers. Beside use of TI to improves logistics, Cadbury is also attempting to improve the distribution quality. To address the issue of product stability, it has installed visible colours at several outlets. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heat affects product quality and thereby off takes. Looking at the low penetration of the chocolate, a distribution expansion would itself being incremental volume. The other reason is arch rival Nestle reaches more than a million retailers. This increase in distribution is going to be accompanied by reduction in channel costs. Cadburys marketing costs, at 18% of total costs, is much higher than Nestls 12% or even pure sugar confectionery major Parrys 11%. The company is looking to reduce this parity level. At Cadbury, they believe that selling confectionery is it like selling soft drinks.
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4. PROMOTION
Effective advertising is rarely hectoring or loudly explicit. It often both attracts and generates arm feelings. More often than not, a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. To penetrate into the inner recesses of customer memory, communication must first ensure exposure, grab his attention evoke his comprehension, grab his acceptance and then extract retention competing with thousands of other units of communication trying to do the same. Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. The strategic response addresses the emotional appeal of the band to the child within the adult. Naturally, that produced just the value vacuum that Cadbury was looking to fill. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful, unselfish conscious, pleasure seeking child within him and graft these feeling onto the Ad campaign like Khane Walon Ko Khane Ka Bahana Chahiye for CMD and Thodi Si Pet Pooja Kabhi Bhi Kahin Bhi for Perk have been sure shot winner with the audience. Whirl with the new launched temptations with the slogan Too To Share the communication resolves around the reluctance of a person whos got their hand on a bar of temptation to let anyone else to have a bite. As well as outdoor and radio ads, ad agency contract has created communication for cinemas and even ATM machines for the brand. All ICICIs ATM a message flashes on the screen as soon as customer inserts his ATM card. It tells the customer that this would be good time to get out of his temptation since he/she is bound to be alone. Something familiar is planned for phone-book as well. In cinemas, Cadbury has a message on-screen just before the lights are dimmed to give them a chance to get their temptations. There will also be after dinner sampling in restaurants to begin with, 30 catteries in Mumbai have been selected. The next round of activity will include the wafer-chocolate Perk and the Picnic bar, which has faced problems with its taste, because of the peanut it contains. Milk treat has
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also been launched in a module bar form, just in time of Diwali gifting market. clairs has got potential for much wide distribution, in a small sweets that airlines, hostels, and up market retail outlet offer to guest and customers. Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as spend at this level in the current year also. Ad since any discussion today would be incomplete without mention e word, the management plans to tap this new channel of marketing. Beside three companies website (i.e.www.cadburyindia.com,wwww.bourvita.com,www.cadburygift.com) that the company has launched, it had also entered into various marketing relationship with other portals, specially targeted during festivals and events such as Valentines day , etc. Its a combination of spiffing up its key brand, researching and improving the newer products that havent taken off, supported with high ad spends that Cadbury hopes will see it emerges stronger after the current slowdown, as well as expand the market.

5. POSTIONING
In the 1970s consumers were ready to pay more for more, and luxury goods flouris hed. In the 1980s, consumers began to demand more for same, and the discounting era grew strong. Todays consumer demanding more for less, and the winner will be that super value marketers. Some of todays most successful companies recognize those customers are more educated and able to recognize true customer value. Positioning is simply concentrating on an idea or even a word defines that company in the mind of the consumer. It is more efficient to market one successful concept to one large group of people than 50 product or service ideas to 50 separate group repositioning is a must when customer attitude have changed and product have strayed away from the consumers long standing perception of them Cadburys is an anchor in sea of confectionary products. As a variety of competitive claims assails her senses, today customer uses complicated decision making process to assess the alternative before making a purchase. Since Cadburys is more clearly associated with a particular set of attributes in terms of benefits and prices, the quicker becomes her search process.

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Positioning of individual product:

1. CMD: is and always remain flagship brand. The punch by the company for advertising this product life. Real taste of Life, itself defines the positioning of the product. The chocolate is meant for all age groups. It symbolizes fun, enjoyment, good items. It has goodness of milk, taste and appetite appeal. 2. 5star: although positioned internationally as an energy bar, 5star was positioned on an emotional platform in India during the late 1980s. Symbolizing togetherness, 5star was originally targeted at teenagers. In June 1994, the company reworked the strategy for 5star to make it a source of energy. In fact, before the launch of Perk, 5 stars energy bar positioning made it a snacking chocolate. 3. clairs: competing in the chewable toffees segment. clairs was re-launched during the mid-nineties with a new name, Dairy Milk clairs. 4. Gems: broadcasting Gems, though, didnt prove to be feasible proposition for Cadbury. Targeted at children less than 12 years with Gems Bond advertising. Cadbury decided to sell it to teenagers with the Smart Very Smart campaign. But now, the company is retargeting children with its animated commercial. Gems are the best brand to speak to children. Colourful chocolate buttons appeal most to children and that is why Cadbury is re-targeting children. 5. Crackle: it was the first Cadburys chocolate to have crunch in it. It was targeted as a funky chocolate to add spark to life. 6. Perk: in September, 1995, Cadbury pre-empted the launch of Nestls Kit-Kat by rushing a new brand, Perk into the market. Positioned much further on the functional scale of 5star, Perk was meant to be light snack-product for subduing the first pangs of hunger. 7. Bournvita: positioned as tasty health drink. While its competitors concentrated only on health aspect, Bournvita combined the nutritious value with taste.

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SWOT ANALYSIS OF CADBURY

STRENGTH Market leader in their segment Strong brand loyal consumer base Wide range of distribution channel Product according to the need of Indian consumer Innovative Product Excellent advertising, reach and accessibility

WEAKNESS Product are dependent on each other Not so much presence in rural market Marred by scandal few years back

SWOT ANALYSI S

OPPORTUNITY Increasing number of working youth Product has been acceptable in youth category Shift to rural market Can foray into other food markets with its strong Brand name

THREAT Price war with competitors. Strong presence of regional competitors Consumers dont perceive it a Healthy Product Sweets as substitute

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Awards in India Kraft Foods Inc, which recently changed its name to Mondelz International, so that
Kraft Foods focuses on the North American foods business whereas Mondelz International focuses on the global snacks business, tops the list with net sales of $19,965 million. Mondelz International makes Toblerone and Cadbury Dairy Milk Yahoo Cadbury Indian ranked 4th amongst the Most Admired Companies of India by Fortune India Cadbury India wins the EMVIES 'Media Client of the Year' in September 2012 Cadbury India wins the "Client of the Year" title at the EFFIES 2012 Dupont Award on Innovative packaging Best Suppliers awards (overall & processed foods category) at the Spencer's Best Supplier Awards 10 Advertising Awards at Goafest 2012 Oreo Togetherness Mela wins Gold at EEMAX Awards 2012 Bournvita Quiz Contest wins best kids program at India Telly Awards 5 Star's 'The Date' film wins Platinum Award at Digiratti 2012 4 Shopper Insight WINs (India) for H1'12 submitted by Asia Pacific

Cadbury also won 4 gold and 2 silver awards for the following campaigns: Gold: Silver: Oreo for consumer products Cadbury Celebrations for Integrated campaign of the year CDM Shubharambh for Consumer products CDM post dinner meetha for Consumer products Cadbury Celebrations for Consumer products CDM Shubharambh for Integrated campaign of the year across categories.

Future Plans
Cadbury India expects strong growth in India in future. The company plans to increase the franchise of its existing brands and continue to explore new product opportunities including adjacent market opportunities

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The Cadbury Story - Cadburys success story In 1984, John Cadbury founded U.K. company with one aim: - to create the highest quality chocolate. By1969, when Cadbury merged with the soft drink giant. Schweppes, Cadbury brands were already famous all around world. Today Cadburys production are enjoyed in 120 countries, with 40 chocolate confectionary brands, Cadbury dominated markets as far as the U.K. and Australia thats why Cadbury have been dubbed The worlds master chocolate makers.

The secret of Cadburys success What is the secret of Cadburys continuing success first theres the careful selection of the finest cocoa beans from West Africa, as well as tasty hazel nuts from Turkey and the fine sheet and choicest natural ingredient available to us anywhere. Finally theres skilful marketing Cadbury always takes extreme care in selecting and marketing the right range of product in every cause.

The right product, the right partners, the right marketing, the promotional back up and the right employees. These are the ingredients in Cadburys latest recipes for success. Right from the stand Cadbury Dairy Milk Chocolate success has been based on these factors: Quality, Value for Money, Advertising.

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Chapter 2 Chocolate Industries

Top Chocolate Companies and brands in India 1) Amul Amul is part of the Gujarat Cooperative Milk Marketing Federation Limited (GCMMF), which is the biggest organization in the domain of food product marketing in India. The company procures 13 million liters of milk on a daily basis in the peak period and has 16,117 milk cooperative societies that are based in villages, 3.18 million members who produce milk, and 17 member unions that cover 24 districts. In 2011-12 its aggregate turnover was 2.5 billion US dollars. Amul chocolates are available in various forms such as the following:

Amul Fruit n Nut Chocolate Amul Bindass Amul Chocozoo Amul Fundoo Amul Milk Chocolate

2) Cadbury Cadbury was established originally in UK during 1824 by John Cadbury. The company is presently owned by Mondelez International. It is among the two biggest global chocolate brands along with Mars and its head offices are at Uxbridge, London. Right now it operates in more than 50 countries across the world. Mondelez International is one of the biggest brands in the world when it comes to chocolates, candies, and biscuits. It is also one of the top two manufacturers of gums in the world. The company has many billion dollar brands like the following:

Jacobs Oreo LU Tang Milka Trident Nabisco

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It operates in more than 80 countries with staff strength of 100,000. In 2011 the company earned estimated revenue amounting to almost 35 billion dollars. Its stocks are traded on NASDAQ. Its top chocolate products available in India are as follows: Bournville: Bournville is a dark chocolate bar. The chocolate derives its name from a synonymous model village in Birmingham. It is primarily manufactured in France. Crunchie: Crunchie is a chocolate bar and comes with a honey laced sugary center. The product is available in several sizes such a snack size, which is basically a small cube like variation, and the king size. The single serve bar is the most commonly available version and comes with a length of 7 inches, width of an inch, and depth of 3/4th of an inch. Dairy Milk: Dairy Milk is a milk chocolate brand made by Cadbury. Every product in this line is created only with milk chocolate. It was launched during 1905 in the UK.

3) Nestle Nestle is one of the top names in the world when it comes to nutrition, wellness, and health. The organization was established by Henri Nestle at Vevey, Switzerland during 1866 and its head offices are located over there. It has approximately 280,000 staff members and operates in nearly all countries in the world. Its leading chocolate products in India are as follows: Kit Kat: Created originally by Rowntrees based in York, England, Kit Kat is produced on a global scale by Nestle that had acquired the company during 1988. Kit Kat is a wafer biscuit bar covered in chocolate. Every bar is made up of fingers that contain 3 layers of wafer that are covered by chocolate on the outside. Each bar can be eaten separately. Kit Kat bars with only one finger are fairly popular as well. Milky Bar: Made by Nestle, Milky Bar is composed of white chocolate. It is also available in the following countries in addition to India:

Australia South Africa New Zealand Spain Ireland United Kingdom Kuwait
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Nestle Crunch: Nestle Crunch, a Nestle product, is made from crisped rice and chocolate. It was launched during 1937. In addition to Nestle Crunch, Nestle also produces related products and the ingredients they are made from may be mentioned thus:

Buncha Crunch crisp rice and milk chocolate Dark Nestle Crunch with Caramel - dark chocolate, caramel, and crisp rice Nestle Crunch White white chocolate Nestle Crunch Stixx candy crme, and wafers Nestle Crunch Ice Cream Bars ice cream, crisp rice, and milk chocolate Nestle Crunch Dark Stixx dark candy crme and wafers Nestle Crunch with Caramel milk chocolate, caramel, and crisp rice Nestle Crunch Crisp chocolate crme, and wafers Nestle Crunch with Peanuts - milk chocolate, peanuts, and crisp rice Nestle Crunch Cereal chocolate, wheat clusters, and crispy rice

4) Ferrero Rocher Since its launch in India, Ferrero Rocher is also among the popular chocolates across the country. It is famous for its unique taste defined by its main ingredients- wafer, hazelnut and cream filling coated with a chocolate shell. 5) Mars Chocolate Mars chocolate bars and other products are manufactured Mars Chocolate, which is owned by Mars Incorporated and based out of Mount Olive, New Jersey. It is among the leading chocolate makers on a global scale and operates in 19 countries with at least 15 thousand associates. Following are its major offerings in India: Mars Bar: Mars Bar, which is also referred to as Mars, is primarily made of caramel and nougat that are coated in milk chocolate. Bounty: Bounty is a chocolate bar made by Mars Incorporated and sold all around the world with certain places in the US being the only exceptions. It is covered in either milk chocolate or dark chocolate and has a coconut filling.

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6) SK Industries SK Industries, a sister organization of the Mahak Group of Companies, was incorporated in 1991 and its head offices are at New Delhi. The company specializes in making, importing, and exporting a diverse range of confectionery products under the following brand names:

Jelly Belly Fruitjel jellies Frugurt fruit yogurt Star Fruitjel jellies Funchoos lollipops Milk-N-Nut soft nougat bar

The company employs between 100 and 500 people and its yearly turnover has been estimated at INR 50 to 100 crore. Choc On, its chocolate brand, is a nougat bar available in chocolate and caramel flavours. It is also available as a coconut bar with chocolate flavour. 7) CAMPCO Campco boasts of one of the larger chocolate factory in South East Asia, and with the help of the Indian government, as well as Kerala and Karnataka state governments, has created a special place for itself in the Indian market. Its leading chocolate based product Turbo is made from creamy chocolate that is filled with nougat.

8) Other chocolate brands available in India

Libertin: Produced by Ivory Gull Industries, Libertin is a plain milk chocolate bar. Safari: Safari comes with a chocolate flavored coating that contains a center made of almond and caramel nougat. It is made by Gandour. Tofi Luk: Yet another Gandour product, Tofi Luk basically comprises biscuit bars that are covered in chocolate and caramel.

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Chocolate Industry Of India Present Scenario: Factors like modern trade, increasing
levels of income among the middle class, economic liberalization, and present macroeconomic situations have been major contributors to the prominent status enjoyed by the top chocolate brands in India.

Rajesh Ramanathan, the Director of the HR division at Cadbury Kraft Foods, states that the per capita consumption of chocolate has gone up to 110 to 120 gram as compared to 40 gram during 2005. He says that there are further chances that the usage of these products will go up in the future.

The consumer demand for chocolates has only been increasing in the last few years and this has led to a greater number of companies venturing into the Indian market. In the last 64 years, the market has been led by Cadbury Kraft Foods. The industry is presently valued at INR 3200 crore and 70 percent of the market is in Cadburys control. Nestle is a distant second with 20 percent share and the remaining companies together take up 10 percent of the available market.

Mahesh Joshi, who heads the marketing and business development segment of Choco a la Carte, says that the chocolate industry in India operates at various levels. It is inclusive of the big brands like Cadbury, and Dairy Milk as well as the smaller manufacturers, importers, and retailers. There are several people who make chocolates in their homes as well.

Innovation and diversification are presently the key aspects of the industry and all the leading companies are trying their best to be successful in this regard and thus add to their existing customer base. The chocolate designer of Chocolatier-The Chocolate Boutique, Sanjiv Obhrai, has stated that adapting the products as per local culture is an important part of the innovation process.

The population of India is such that it presents several ways for international chocolate companies to come here. The regulations too are good enough for international companies to
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come and operate here. The immense focus on education over here means that international companies can come and employ local talent to operate their business efficiently. Ramanathan feels that the presence of all these means the international companies are unable to ignore India as a viable business destination.

A Lebanon based chocolate brand named Patchi has more than 300 stores across the world. It opened a store in Delhi during 2007. The manager of the Delhi operations of Patchi, Meenal Babbar says that there is virtually no competition between the Indian and international chocolate companies since the customer bases for both are different. She feels that people who look for international options possess a lot of buying capacity and look for quality.

When it comes to the problems being encountered by the international brands in India, Babbar opines that the market is price sensitive, which restricts a products appeal in case the price is conceived to be higher than ones capacity. The fluctuations in exchange rate also pose problems in this regard. To illustrate her example she says that Patchi products cost less in Dubai than in Delhi.

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Chocolate Market
The Chocolate Market in India is a growing one. There are several players in this segment, and Cadbury India Ltd. and Nestle India Ltd constitute the major share of the chocolate market.

Overview

The Chocolate Market in India is defined by the huge expenses incurred in advertising, high volumes of production, and sensitivity towards price. The volume of chocolate produced in India in a year is around 30,800 tons. Everybody loves chocolates, but again the Chocolate Market in India is concentrated in the urban areas.

Challenges
The challenges faced by the Chocolate Market in India are:

The products are perishable in nature Due to the huge consumption of milk in India, the availability of milk is less than the requirements

The distribution network or the food supply chain is not so strong As the demand for milk is higher than the supply the price of milk is high

Major Players
The major players in the chocolate market are, Cadbury India Ltd, and Nestle India Ltd. Together these two companies constitute nearly 90% of the Chocolate Market in India. The other players are Amul Chocolates, ITC Chocolates, Hindustan Uni Lever Chocolates.

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PESTAL ANALYSIS Every organization is confronted with macro-environment, which deals with such factors that have direct influence on supply and demand of the firm. These factors are beyond the control of organization agitating it to formulate such strategic measures that support the organizational goal and strategic planning. The dynamism in the arena of market is surfacing such uncertainties that have significance impacts on the functions of organization. In order to comprehend these vague possible issues, a series of checklists have been framed to grab an increment in the organizational effectiveness or its survival to some extent. The main framework widely used with its in depth strategic concentration on environmental influences is PESTEL analysis. This analysis evaluates the external environment of the firm on the basis of factors like political, economical, sociocultural, technological, environmental, and legal. In this regard, this paper will examine PEST analysis of a chocolate manufacturing firm operating in UK. PESTEL FRAMEWORK

PESTEL framework is considered as the best strategic equipment to measure business position and expected relevant growth or decline in the market and also gives the directions for possible profit oriented business operation. This analysis works as a useful tool in planning process which may include; organizational planning, strategic planning, financial planning, marketing planning, product development planning and most importantly in research and development reports. It is one of the effective tools that summarizes the scattered aspects in one horizon, especially when entering into the new markets or when the purpose is to go beyond the geographical boundaries. It helps the organization to eyeshot the comprehensive realities of the new environment and its market features which aid to penetrate in it with most effective strategic concerns and groundings. As already mentioned, PESTEL describes five factors according to which their impacts on the chocolate manufacturing firm is analyzed. These external factors and their detailed analysis with respect to firm is explained below:

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Political Factor
Political factor relates to any changes in the government or its policies. Every organization is obliged to do its business operation in compliance with laws made by the government. These laws and rules should be acquainted in the functions performed by the organization. The government of every country varies with respect to its policy, stability, and major influences on the trade. In this regard, it is most appropriate for any organization to conduct its operation and formulate its strategic plan in accordance with the political theme of the country. Every strategic plan must cater the importance of political impacts so that effective strategy is built to make proper alignment and the riskiness of project failures due to political instability is already comprehended with alternative choices (Porter, 1998). In the given scenario of chocolate manufacturing industry operating in India has to analyze that the political stability in the existing country is pretty much secured. The impacts of political influences on the sale of the chocolate products and its manufacturing will be observed when this organization will intervene in such practices that are not supported by the government. As India government restricts the chocolate manufacturers to import its raw material from indicated African countries in order to oppose child labour and women harassment in those countries. Government can intervene in the operations which are not environmental friendly and the issues of such like are the impacts that chocolate manufacturer will have to face from the political point of view. As a democratic political influence, the firm can grab maximum advantages in terms of low restrictions on the volume of production and sales scale. Hence, there are political issues that may affect the industry and their impacts can only be minimized if the company is already prepared to handle political matters.

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Economical Factor
Economic conditions of the country is the most important factor of analysis to any country because it decides the successful and failure of any business profitability (Worrell, 1998). Every business works on the core concept of economics that explains the importance of demand and supply. If the demand is low because of low economic growth and development then it will destine the company to raise such amount of capital that will ultimately meet the expected profit after covering the cost incurred. Making bulks of production on just forecasting without considering demand pattern of the country may cause an irreparable loss to the company no matter how effective was the strategy and planning. This is due to the fact that economic influences of the country are beyond the control of organization and it is bound to reflect back in accordance with economic situation. If the organization gives high concerns to the economic choices, then it is beyond any nagging doubt that it can make successful profits even in the realm of recession. On the contrary, organizations keeping aside these economic conditions cannot even survive in economic boom. The economic conditions of any country act as an opportunity as well as threat depending upon the strategic planning made by the firm. If the firm gives high degree of concern to the economic choices even in the depressed economic state can make its survival and the firms ignoring them will be seen as going out of the market. It can be articulated with certitude justification that India chocolate industry is most developed and competitive sophisticated market in the world. The greatest share of market is captivated by global chocolate industries which include Nestle, Mars, and Cadbury (Cadbury, website). In the presence of such global giants it is very difficult for new entrants to etch their position in the market but the economic system and growth of chocolate market is such that even new entrants can entertain the customer with good profitability. The chocolate market should make contracts with cocoa beans farmer to apprehend the price fluctuations under control. The increase in advertising and promotions cost will yield higher margin in sales and profitability because of increased customers interest in buying chocolate. The reason that argues the increase in promotion is because chocolate is a luxury product and customer will not buy until it is preceded with high promotion efforts in the arena of market where recession is expected to strike and profitability in the luxury market is at stake.
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Socio-cultural Factor
The socio-cultural environment of the country has significant impact on the demand of the product or services. This is the reason that organizations mainly manufacture the products according to the taste and demand pattern of the nation in which it is operating. Especially, in food industries where the taste and variety of the food products vary from country to country according to the socio-cultural environment. Most importantly, the consumption behaviour has significant impact on the product sales and in reflection to this companies have to consider demographics changes of the customer. Companies have to select the specific demographic segment and produce such goods which are in compliance with socio-economic norms of that particular segment. Chocolate is a food product which has in depth relation with health yielding the fact that chocolate industry has to penetrate in the market with all factors concerning health issues. In India, costumers are more health conscious and provide an opportunity for the chocolate makers to diversify the product with different flavours and healthy ingredients (Foods Standards Agency, website). The chocolate consumption is seen to have more consumption in young age children group and teenagers. This reflects that the chocolate company has to keep its focal point on the tastes of young customers and such modifications in the chocolate that urges the consumers to give a taste at least once in a year. For instance, chocolate in the form of bar has attained much more popularity in Indian market.

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Technology Factor
A company can achieve greater success and competitive advantage in the market by emphasizing on the aspects of technological factors as a strategic concern (Porter, 2004). The increased pace of technology have revolutionized the scope of markets. The emerging technologies are projecting new opportunities to the new markets and giving threats to the existing one surfacing the fact to compensate with new technology has become optimum intrinsic need (Middleton, 2003). In the chocolate manufacturing company, technology can be the most effective tool in product development, advertising, and promotion. Technology can alter the process of production and can yield higher quality product at much less cost. It can also support in building a strong brand name and product portfolio by adopting digital media to promote products. It is a luxury food product; therefore, it demands a mass promotional effort to persuade the customers to buy. Hence, the existing available technology in the India has much significant importance on the chocolate industry and the industry has to adapt the concerned technology in order to captivate greater market share.

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Environmental Factor
Every organization operates in a society and it has certain obligations with respect to its welfare. The overall environment is comprised of many elements which organization has to cater before conducting its business operations. In case of chocolate manufacturing firm Cadbury, has continue to make progress in reducing our CO2 emissions to achieve our target of reducing emissions by 25 percent between 2005 and 2011. This is consistent with Cadburys longer term ambition to reduce CO2 emissions by 50 percent by 2020. As from 2011 we will have a common baseline that will allow us to pursue ambitious CO2 emission reductions as a combined business and will soon announce our goals beyond 2011. Kraft Foods has actively participated in the Carbon Disclosure Project (CDP) since 2005 and was named in the 2010 Global CDP Leadership Index. The Carbon Disclosure Leadership Index recognizes companies that demonstrate good internal data management practices for understanding greenhouse gas emissions, including energy use. Companies that appear on this index have also demonstrated clear consideration of how climate change impacts their business

Legal Factor
It is a well known fact that every organization has to conduct its operation which compliance with the laws of the country. The trade laws, rules and regulations direct all the companies to set their pricing policy, production policy, and strategic policies according to the country mercantile laws. The chocolate industry has to anticipate the outcomes of their business operations in such a way that are in abidance with the rules and regulations made by the government of the country. Like in India, there are set of general accepted rules and standards for the safer and healthier food products which must be met in chocolate products of the company.. Ignoring such legal consideration can cause irreparable harm to the industry and that should not be the practice by the chocolate manufacturing company because Indian government does not give flexibility to any size of industry which gives least consideration to laws and regulations.

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THREE MOST IMPORTANT FACTORS

Chocolate is a luxury food product which can draw an important analysis from the framework of PESTEL. In the above mentioned factors of analysis, the most important ones are discussed below:

Social Factor

The social-cultural impacts of the environment on chocolate industry are important because it can be viewed as an opportunity as well as a threat to the industry. As a luxury food product, customers always have changing demand pattern in the tastes of such like products. The joint ventures with other retail industries like coffee, bread, etc. can diversify the taste of chocolate in such a way that they can even replace the traditional food products. The customers are normally health conscious which persuade the chocolate manufacturers to make such products that give them health benefits as well. For instance, the dark chocolate is useful for blood pressure patients.

Political Factor

The importance of political factor in chocolate industry is considered because the production of cocoa been is an issue in most of the countries and many government restricts the import of cocoa beans from some of the African countries because of their child labour involved in producing cocoa. This is one of the most important factors that urge the chocolate company working in India to generate other possible alternatives that would increase their product quality at low cost.

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Technological Factor

The chocolate industry is mainly dependent upon the milk as the basic raw material for manufacturing the products. The advancement in technology has introduced such machines which are specifically made for milking cows in the most efficient and hygienic manner. The packaging of chocolate products is yet another dimension where the use of technology can reduced many wastes. The modern trend of technology has introduced such digital ways that can multiply the sales of chocolate where the exposure of media and technology is worthwhile. CONCLUSION

In a nutshell, it can be said that PESTEL analysis is a useful framework to understand the external environment in which an organization operates. The snapshot of this analysis is discussed with respect to chocolate manufacturing company. Among the six factors, sociocultural, political and technological factors are the most important issues.

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Chapter 3 Entrepreneurial opportunities

If chocolate is your passion, this could be the business opportunity you've been waiting for.

1. Health Benefits Studies have come out demonstrating the health benefits of flavanoids often contained in dark chocolate. Sales are soaring (dark chocolate sales were up 40 percent in 2006, according to Mintel International), and entrepreneurial opportunities are rich with promise. "Chocolate is more popular today than ever before," says Joan Steuer, founder and president of Chocolate Marketing LLC, a Los Angeles consulting firm that specializes in strategic forecasting and tracking trends in the chocolate industry. So stop drooling and take a bite of the action. Dark, artisanal, organic, and socially responsible and nutraceutically enhanced chocolates are especially hot varieties. 2. Cafes Opportunities also exist in chocolate cafes, chocolate fountains and chocolate education, such as tastings. And you can't go wrong with basics like chocolate snacks. 3. Food Processing India's mainstay is agriculture. Entrepreneurs can explore many options in the food grain cultivation and marketing segments. Inefficient management, lack of infrastructure, proper storage facilities leads to huge losses of food grains and fresh produce in India. Entrepreneurs can add value with proper management and marketing initiatives. The processed food market opens a great potential for entrepreneurs be it fast food, packaged food or organic food. Fresh fruits and vegetables too have a good demand abroad. A good network of food processing units can help potential exporters build a good business.

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4. Gifting There is a good social demand for chocolates in India. People who can meet this demand in a cost effective way can make a good business. With gifting getting very popular, this is also a unique business to explore. And moreover like flower shops, these business often focus on themed chocolates. 5. Organic farming Organic farming has been in India since a long time. The importance of organic farming will grow at a fast pace, especially with many foreigners preferring only organic products. Entrepreneurs can focus on business opportunities in this sector. There are many small-time farmers who have adopted organic farming but the demand is still unmet, offering many opportunities for those who can promote organic farming on a large scale. 6. Packaging With China invading the markets with cheap plastic goods and packaging materials, there is a good opportunity to develop good packaging materials to meet domestic and foreign demand. There is a huge demand various sectors like agriculture, automotive, consumer goods, healthcare infrastructure and packaging sectors for plastics. 7. Franchising India is well connected with the world. Hence, franchising with leading brands who wants to spread across the country could also offer ample opportunities for young entrepreneurs. With many small towns developing at a fast pace in India, the franchising model is bound to succeed.

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Conclusion
Cadbury is one of the best known brands in the world today. It is a brand which is associated with high levels of quality and customer satisfaction. Mondelz International is the world's largest chocolatier, biscuit baker and candy maker, and the second-largest maker of gum. Every day, our employees create delicious moments of joy by sharing the world's favorite brands-including Cadbury, Jacobs, LU, Milka, Nabisco, Oreo, Tang and Trident. -Anywhere, Anytime, everyday. We make the products that make people smile.

For nearly every industry, sustainability is a key objective. Creating a sustainable chocolate industry benefits all of the industry's stakeholders, from the grower to the manufacturer. The chocolate industry is working with relevant partners to create a sustainable future. By cooperating in this way, it is possible to improve the sustainability of the industry: better working conditions on farms; better quality cocoa; fair prices for all contributors; superior and more varied chocolate; more satisfied customers.

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Bibliography: http://www.cadburyindia.com http://www.guardian.co.uk/business/cadburyschweppes http://www.kraftfoodscompany.comp http://www.icco.org/about-cocoa/chocolate-industry.html http://businesstoday.intoday.i n http://www.entrepreneur.com

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