COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

CHAPTER 1
ENTREPRENEURSHIP
The Concept Of Entrepreneurship
By definition, entrepreneurship is the practise of starting a new business/venture or
reviving an existing organisation. Entrepreneurial actions vary depending on the nature of
business. Entrepreneurs seek funding from venture capitalists and NGOs. Usually, such
investors expect higher returns on their investments. The very reason they invested in the
venture of a greenhorn is because they intend to make as much as possible out of the venture.
It is being increasingly recognized that entrepreneurship is the key to building and sustaining
the growth of any economy. The success of Silicon Valley is a case in point. It demonstrates the
success of start up ventures. Many entrepreneurs have chased their dreams and with innovative
ideas, succeeded in the face of adversities. The local economy and the national economy have
benefited from their ventures both in the short term and long term.
In the recent times, we have seen the emergence of entrepreneurs from developing countries
such as China, Ireland, Israel and India daring to pursue their innovative ideas and dreams to
logical conclusion. In many cases, they succeeded in their ventures. They have created business
opportunities for many others such as financiers, accountants, lawyers and restaurateurs, among
others.
ENTREPRENEURSHIP AND INDIA
Entrepreneurship is a critical element in the growth of an economy. It is estimated that there
are about 20 million entrepreneurs in the US. India ranked second in total Entrepreneurship
Activity (TEA) according to the Global Entrepreneurship Monitor Report for the year 2002.
Subsequently, India slipped in TEA rankings.
For its size India has lower number of start-up entrepreneurs. In spite of the shortcomings, it
ranked ninth in the survey of entrepreneurial countries by Global Entrepreneurship Monitor
(GEM). India ranks the highest among a group of countries in necessity-based entrepreneurship,
which is associated with developing countries. Conversely, it ranks fifth from bottom in
opportunity-based entrepreneurship.
Liberalization of economy started by the PV Narasimha Rao government in 1991 and the
Information Technology boom of the mid and late 90s have ushered in tremendous changes and
set for entrepreneurship is substantial. However, the society and government have not been
encouraging towards entrepreneurship in India.
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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

One of the major hindrances faced by the Indian entrepreneur is that of capital. It is
worth nothing that there is greater willingness among people to invest capital in enterprises that
is already established than in start-ups. The number of venture capitalists or angel investors in
India is very low. Another factor that has been hindering entrepreneurship in India is the lack of
mentors- very few success stories which could inspire youngsters to become entrepreneurs.
By and large, the India society is averse to risk. People normally look for long-term and
stable employment, such as government and public sector jobs. There is an urgent need to
overhaul the physical infrastructure and lack of government support is major hindering
entrepreneurship in India.
There are other factors that have been affecting entrepreneurship in India. The majority of
young people coming out of college are inclined towards the IT sector, starving other sectors of
critical talent. Most of the talent available in the country is considered to be mediocre and
technical talent is scarce. Another factor weighing against entrepreneurship in India is that it is
not perceived to be socially glamorous, though the concept is getting accepted slowly.
Indias economy has been growing at a scorching pace. Today, its economy ranks above that
of France, Italy and UK. Its GDP is the third largest in Asia. Among emerging nations, it has the
second largest economy. The liberalization of the economy in the 1990s has enabled a huge
number of people to become entrepreneurs. It is to Indias credit that its corporate and legal
systems have been operating with greater efficiency. Government needs to make efforts and
encourage entrepreneurship by providing training and also facilities, especially in the rural areas.
The Indian government has recently commissioned Entrepreneurship Development Institute of
India (EDI) to set up Entrepreneurship Development Centres (EDCs) in Cambodia, Laos,
Myanmar and Vietnam (CLMV) countries as a mark of Indias commitment to the initiative of
ASEAN integration. Vice-president Hamid Ansari recently inaugurated the Myanmar-India
Entrepreneurship Development Centre (MIEDC), Myanmars ministry of education at Yangon.
Centres in the other countries have already started functioning.

COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

CHAPTER 2
CHOCOLATE PRODUCTION
The cocoa-bean -- the heart of the sweetest delicacy in the world -- is bitter! This is why, up
to the 18th century some native tribes ate only the sweetish flesh of the cocoa fruit. They
regarded the precious bean as waste or used it, as was the case among the Aztecs, as a form of
currency.

The Varieties
There are two quite different basic classifications of cocoa, under which practically all
varieties can be categorised: Criollo and Forastero cocoas. The pure variety of the Criollo tree
is found mainly in its native Equador and Venezuela. The seeds are of finer quality than those
of the Forastero variety.
They have a particularly fine, mild aroma and are, therefore, used only in the
production of high-quality chocolate and for blending. However, Criollo
cocoa accounts for only 10% of the world crop. The remaining 90% is harvested from trees
of the Forastero family, with its many hybrids and varieties. The main growing area is West
Africa. The cocoa tree can flourish only in the hottest regions of the world.

The Harvest
Immediately after harvesting, the fruit is treated to prevent it from rotting. At fermentation
sites either in the plantation or at, collecting points, the fruit is opened.

Fermentation
The fermentation process is decisive in the production of high quality raw cocoa. The
technique varies depending on the growing region.

COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

Drying
After fermentation, the raw cocoa still contains far too much water; in fact about 60%. Most
of this has to be removed.
Cleaning
Before the real processing begins, the raw cocoa is thoroughly cleaned by passing through
sieves, and by brushing. Finally, the last vestiges of wood, jute fibres, sand and even the
finest dust are extracted by powerful vacuum equipment.

Roasting
The subsequent roasting process is primarily designed to develop the aroma. The entire
roasting process, during which the air in the nearly 10 feet high furnaces reaches a
temperature of 130 C, is carried out automatically.

Crushing and shelling

The roasted beans are now broken into medium sized pieces in the crushing machine.

Blending
Before grinding, the crushed beans are weighed and blended according to special recipes. The
secret of every chocolate factory lies in the special mixing ratios, which it has developed for
different types of cocoa.

Grinding
The crushed cocoa beans, which are still fairly coarse are now pre-ground by special milling
equipment and then fed on to rollers where they are ground into a fine paste. The heat
generated by the resulting pressure and friction causes the cocoa butter (approximately 50%
of the bean) contained in the beans to melt, producing a thick, liquid mixture.

COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

Cocoa Butter
The cocoa butter has important functions. It not only forms part of every recipe, but it also
later gives the chocolate its fine structure, beautiful lustre and delicate,
attractive glaze.

Cocoa Powder
After the cocoa butter has left the press; cocoa cakes are left which still contain a 10 to 20%
proportion of fat depending on the intensity of compression.
These cakes are crushed again, ground to powder and finely sifted in several stages and we
obtain a dark, strongly aromatic powder, which is excellent for the preparation of delicious
drinks - cocoa. Cocoa paste, cocoa butter, sugar and milk are the four basic ingredients for
making chocolate. By blending them in accordance with specific recipes the three types of
chocolate are obtained which form the basis of ever product assortment,
namely:

Kneading
In the case of milk chocolate for example, the cocoa paste, cocoa butter, powdered or
condensed milk, sugar and flavouring - maybe vanilla - go into the mixer, where they are
pulverized and kneaded.

Rolling
Depending on the design of the rolling mills, three or five vertically mounted steel rollers
rotate in opposite directions. Under heavy pressure they pulverise the tiny particles of cocoa
and sugar down to a size of approx. 30 microns. (One micron is a thousandth part of a
millimetre.)

COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

Conching
But still the chocolate paste is not smooth enough to satisfy our palates. But within two or
three days all that will have been put right. For during this period the chocolate paste will be
refined to such an extent in the conches that it will flatter even the most
discriminating palate.

Conches (from the Spanish word "conch a", meaning a shell) is the name given to the troughs
in which 100 to 1000 kilograms of chocolate paste at a time can be heated up to 80 C and,
while being constantly stirred, is given a velvet smoothness by the addition of certain
amounts of cocoa butter. A kind of aeration of the liquid chocolate paste then takes place in
the conches: its bitter taste gradually disappears and the flavor is fully developed. The
chocolate no longer seems sandy, but dissolves meltingly on the tongue. It has attained the
outstanding purity, which gives it its reputation.

CONSUMPTION OF CHOCOLATES IN INDIA

Chocolate consumption in India is extremely low. Per capita consumption is around 160 gms
in the urban areas, compared to 8-10kg in the developed countries. In rural areas, it is even
lower. Chocolates in India are consumed as indulgence and not as a snack food. A strong
volume growth was witnessed in the early 90s when Cadbury repositioned chocolates from
children to adult consumption. The biggest opportunity is likely to stem from increasing the

COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

consumer base. Leading players like Cadbury and Nestle have been attempting to do this by
value for money offerings, which are affordable to the masses.

COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

CHAPTER 3
OVERVIEW OF ORGANIZATIONS

NESTLE

Nestle India
Nestle India is a subsidiary of Nestle S.A. of Switzerland. The company insists on honesty,
integrity and fairness in all aspects of its business and expects the same in its relationships.

Nestle India- Presence Across India

Beginning with its first investment in Moga in 1961, Nestls regular and substantial
investments established that it was here to stay. In 1967, Nestl set up its next factory at
Choladi (Tamil Nadu) as a pilot plant to process the tea grown in the area into soluble tea.
The Nanjangud factory (Karnataka), became operational in 1989, the Samalkha factory
(Haryana), in 1993 and in 1995 and 1997, Nestl commissioned two factories in Goa at
Ponda and Bicholim respectively. Nestl India is now putting up the 7th factory at Pant Nagar
in Uttaranchal.
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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

Nestle Story
Nestl was founded in 1867 on the shores of Lake Geneva in Vevey, Switzerland and its first
product was Farine Lacte Nestl, an infant cereal specially formulated by Henri Nestl to
provide and improve infant nutrition. From its first historic merger with the Anglo-Swiss
Condensed Milk Company in 1905, Nestl has grown to become the worlds largest and most
diversified food Company, and is about twice the size of its nearest competitor in the food and
beverage sector.

Nestls trademark of birds in a nest, derived from Henri Nestls personal coat of
arms, evokes the values upon which he founded his Company. Namely, the values of security,
maternity and affection, nature and nourishment, family and tradition. Today, it is not only the
central element of Nestls corporate identity but serves to define the Companys products,
responsibilities, business practices, ethics and goals.

In 2004, Nestl had around 247,000 employees worldwide, operated 500

factories in approx. 100 countries and offered over 8,000 products to millions of consumers
universally. The Companys transparent business practices, pioneering environment policy
and respect for the fundamental values of different cultures have earned it an enviable place
in the countries it operates in. Nestls activities contribute to and nurture the sustainable
economic development of people, communities and nations. Above all, Nestl is dedicated to
bringing the joy of Good Food, Good Life to people throughout their lives, throughout the
world.

COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

ANALYSIS OF THE 4PS FOR THIS DIVISION

PRODUCT MIX
The essence of all nestle milk products, particularly those targeted towards infants remain
same, irrespective of all the cultural nuances. So, our strategy remains more or less consistent
in India as compared to rest of the world, remarks
Rohit Dogra, Brand Manager, Milk
and Nutrients, Nestle.
Nestle is the worlds largest dairy, with an annual turnover of more than U.S. 8billion$. So
they understand the dairy business better than anyone else. When they operate in India, the
focus is to put to use their vast expertise and knowledge in the diversified domestic market.
However, the task is not uphill because their products address all basic needs of human
beings.
There is a lot of science that goes while we make our products, explains

Mr. Dogra.

This is particularly because of the sensitivity of the matter involved in manufacturing and
delivering perishable consumption products. Any margin of error could spell doom for the
companys fortunes. So there comes a lot of responsibility while dealing in such products.
Another sensitive area of concern is that a major chunk of its products cater to infants
and due to perceived risks involved (like unwarranted objections by certain segments of the
public, risk of depreciation in quality due to storage problems or transportation problems,
etc.), the challenge is enormous for the company.
Nestle realizes the need to constantly add new products to its portfolios to cater to
different market segments. This is in tune with a natural tendency to constantly
innovate.
Over a period of time, we have seen new products being added to its list. While products like
ceramel and milkmaid doing well, in recent times nestle has come up with products like
Lassi, fruit n dahi, etc to cater unexplored segments of Indian market.
The example of nestle slim milk is a classic, on how it was positioned and which set
benchmarks for others to follow.
The pack of Nestle Slim Milk is being positioned as drink for fitness and it is mentioned that
it is 99.5 per cent fat free. Apart from conveying that calories are kept in check, the
concluding message reinforces the packaged milk health proposition by saying: "So, don't
think twice before making the switch to a healthier alternative."
Breaking the myth of packaged milk (or for that matter milk on the whole) being only meant
for being 'strong' or to put on weight, the agency specifically conveys the message of being
slim and trim through milk.
O&M creative consultant, Sudip Bandyopadhyay said, "The brief was to creative awareness
about the brand. There seems to be a tendency of ignoring milk for putting on weight and also
milk in tetra-packs or packets is being considered as an artificial one. There is also emergence
of low-calorie sweeteners and other products. So the whole idea is to reinforce milk as an
option for providing a refreshing nourishing boost."
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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

Another interesting example is of variants like nestle Fruit n Milk
The company worked on the 'Tasty bhi healthy bhi' proposition to gain acceptance
among both kids and mothers.
A relatively new addition has been lassi, a classical case of adapting to the local Indian flavor.
The company began the test marketing of sweet lassi in Delhi, Haryana and Punjab.
"With changing lifestyles, there is a growing need for products that are convenient, tasty
and of high quality. In order to cater to such emerging needs, Nestl sweet lassi has been
developed as a ready-to-drink product that provides refreshment, nutrition and wellness," the
Chairman and Managing Director, Mr Carlo M. Donati, said in a statement here.
He said the product has been developed after extensive testing for consumer preferences and
traditional styles of preparation. It is available in 200-ml packs for Rs 12.
With big players like Amul and Mother Diary still ruling the roosts, tetra pack milk is a
good way to have a major slice of market share and go for penetration, suggests Mr. Dogra.
Lectogen is priced h liye
igher but it has more value additions, the product has been quite a hit with those who realize
that steep prices can justify quality and good health. This reflects a pricing strategy in
which company is charging higher prices in return for claiming superior valueadditions.
Efforts are underway to penetrate products like Milkmaid and Whitener but peoples
stereotype perceptions about them are still major obstacles.
In the `Milk Products and Nutrition' category, the Company continues to focus on introducing
products that leverage the Nestle Group's Know-how and Research and Development
competence. During 2003, the Company had launched the NESTLE DEVELOPMENTAL
NUTRITION PLAN and CERELAC 123 wheat based weaning food, which is backed by
continuous and ongoing research at the worldwide Research and Development facilities of
the Nestle Group. This was a major breakthrough in infant feeding. During the third quarter
of 2004, the Company has also launched NESTUM123, which is a rice based weaning food,
to ensure the right eating experience at the right stage of development for the infant.
NESTUM 123 also incorporates Nestle Group's unique Z-line technology that makes the
product easy for the infant to digest.
Using its knowledge of infant nutrition and local needs, the Company introduced NESTUM
Ragi in the Southern market and LACTOGEN 3 in select geographies, to provide proper
nutrition at the appropriate stage. Also, since India has a high incidence of low birth weight
infants', who require specialized nutrition, the Company utilized its access to the technology
from the Nestle Group to introduce PRE-LACTOGEN.
To sum up, Nestls Product Mix in milk and nutrients category, the company has been
continuing to add new products to its portfolio, which are in tune with the local flavour, and
is likely to do so.
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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

And with its value additions and proven expertise, it continues in its endeavour to become the
market leader in other categories.
About five years back, India was predominantly a sellers market but now there has
been a marked difference in the consumers, psychologically and behaviourally. This
awakening of Indian consumers brings great challenges to us, Mr. Dogra observes.

PRICE MIX
The high costs of raw materials and processing are a cause for concern. However, The
Company feels that raw material cost inflation could soon be brought under control.
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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

The management is implementing programs to control key raw materials costs. The company
recorded very low sales growth of 3.7 per cent last quarter as sales were by a non-recurring
factor of insufficient availability of milk solids, which restricted production. Due to high
prices of solid milk, the use of the milk was allocated to the most profitable business in its
product. Also sales to canteen store departments (army sales) and ghee sales were stopped
during the period, impacting sales growth. This shortage has now been resolved and is
unlikely to recur in 2H, the company said.
For the export market, there has been a decline in sales value as there is a movement from
retail packs to bulk packs. Overall, in milks, curd and powders, the products are priced
higher. But the top brass of the company justify high prices on account of superior
quality.
In milk segment, nestle is relatively dearer than brands like Amul and Mother Diary but
Mr. Dogra explains that the cooperatives generally operate on a no-profit margins so
they can afford to lower the prices.
He feels that high prices are more than compensated by greater value additions. He cites
the example of Lactogen, which although expensive, is still a hit with rural market because
of greater benefits attached.
Somehow, consumers have to make a trade-off between prices and quality. Overall
newcomers like Fruit Dahi and Slim Milk are fairly charged, consumers feel. Thus, Nestls
pricing strategy is little influenced by competitive moves but more by promising
customers more value additions.

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

PLACE MIX
The company has been very thoughtful about its geographic segmentation. There are
many instances of how some products are marketed only in specific areas.
NESTL CEREMEAL is available in select outlets in the markets in East and South India
because in other parts of the country, there are still stereotype conventions about the product.
NESTL Curds is available in Chennai and Bangalore because of relatively high-anticipated
profitability in these regions.
NESTL Set Dahi, NESTLE MILK and SLIM MILK is available in all the metros and
NESTL Jeera Raita is available in Delhi for similar reasons.
Supply Chain
With increasing market penetration and larger coverage of geographies, the Company has
initiated efforts to ensure that the supply chain and distribution structure remains efficient. In
order to strengthen these efforts to improve the distribution of Stock Keeping Units (SKU's)
across retail outlets and to improve the quality of sales and consumer satisfaction, the
Company has implemented web related processes to increase efficiencies in supply chain and
order planning.
During the year, the Company also initiated the rationalization of stocks in order to increase
the freshness of stocks available to the consumer. These initiatives are necessary to maintain
the high quality that Nestle Guarantees the consumer. In addition to these, there are efforts on
to create more awareness among wholesalers and retailers to create storage value and
minimize loss of quality or time.

PROMOTION MIX
Overall, there has been a lot of emphasis on packaging, not only to safeguard products, but
also to create a distinct brand entity.
Nestle India bagged the Best Package Design Award and Portfolio Registering Highest
Sales Growth Award at the second Annual Indian Dairy Awards presented at the
National Milk Seminar 2003 held at Goa on 17 and 18 January.
Hosted by Tetra Pak India, the fourth National Milk Seminar on Strategic Marketing,
organized by the Ministry of Food Processing and Ministry of Agriculture was focused
around Time to Act - Here & Now. Presentations and panel discussions were held to spotlight
on business opportunities, perspectives of international and national speakers from within the
dairy industry and outside highlighted the areas of successful government-industry
cooperation, business strategy, innovating for category conversion and upgradation, premium
branding, new channel development, and value branding.

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

Using the health platform as a proposition for a milk brand is not an alien concept. But
Ogilvy & Mather Delhi has used the same USP differently in its new ad campaign for
Nestls Fruit n Milk. The agency recently released two television commercials for the new
brand. Mothers catching and correcting their children when they are up to mischief is quite
common. Of course kids being kids love having fun even if it borders on what their mothers
have forbidden them to do. Moms know this and have a habit of keeping tabs on their little
ones.
Using this mother-child peculiarity as a key, the agency worked on the 'Tasty bhi healthy bhi'
proposition to gain acceptance among both kids and mothers.
Says O&M associate creative director Sudip Bandyopadhyay, There are these dos sand
donts for kids. Mothers have their eyes on kids. We have taken situations, where kids
normally get caught. But when mothers find children sheepishly having Nestle Fruit n Milk,
they dont find it to be a problem. Instead, they have an expression of acceptance for this.
The first commercial has two mothers looking for their children. They anticipate them to be
on the terrace and up to - as you guessed right - some mischief. As their kids see them
approaching, they hide something. After a fair deal of urging, they reveal to their mothers
what they are concealing: a pack of Nestls new ready to drink milk brand.
And their mothers, with a sigh of relief, say this is allowed. The frame then cuts to Nestls
new product and positioning statement.
The second commercial shows an in-charge of a boarding school catching students in a
similar situation with a torch. And the kids face a similar outcome with their headmaster
condoning their sipping on their Fruit n Milk.
The campaign is for the 8-15 age-group. We have tried not only a fresh angle from the taste
and health proposition but also from the new product launch perspective. We came up with
this, when mothers says 'yeh to allowed hai.' This has been conveyed through the surprise
element. Not only to catch kids but also to empathise with mothers, says Bandyopadhyay.
The commercials have been directed by Red Ices Koushik Sarkar. The campaign has been
extended to outdoor campaign has rolled out nationally.
One major issue is that Nestl India does not advertise its Infant Nutrition products
due to legal obligations.
So, quality considerations drive sales volumes in these
segments.
Nestle India launched a new print campaign for its packaged milk
brand Nestle Slim Milk. Created by Ogilvy & Mather, the
campaign focused on propagating milk as a proposition for
staying healthy and trim with a stylish presentation of the pack
amidst a yellow background. The campaign, released mainly in magazines, primarily targeted
the socio-economic class A. Breaking the myth of packaged milk (or for that matter milk on
the whole) being only meant for being 'strong' or to put on weight, the agency specifically
conveys the message of being slim and trim through milk. O&M creative consultant, Sudip
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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

Bandyopadhyay said, "The brief was to creative awareness about the brand. There seems to
be a tendency of ignoring milk for putting on weight and also milk in tetra-packs or packets is
being considered as an artificial one. There is also emergence of low-calorie sweeteners and
other products. So the whole idea is to reinforce milk as an option for providing a refreshing
nourishing boost."
The pack of Nestle Slim Milk is being positioned as drink for fitness and it is mentioned
that it is 99.5 per cent fat free. Apart from conveying that calories are kept in check, the
concluding message reinforces the packaged milk health proposition by saying: "So, don't
think twice before making the switch to a healthier alternative."
"The whole presentation revolves around first glance, which should immediately strike
the slim proposition. That's why the pack is shown to be curved (portraying a body with
slim waist) in the centre. Instead of using blue colour, we have deliberately chosen
yellow colour in the background," adds Bandyopadhyay.
Apart from the print campaign, the agency also worked on outdoor advertising.. Nestle,
which had launched ready-to-drink milk market with its Fruit n Milk brand in mango and
strawberry flavours earlier, is sourcing its Slim Milk and Fruit n Milk from Dynamix Dairy
Industries. In addition, other promotional tools like consumer contact programs, exchanges
with medical personnel and a lot of ground work is involved, informs Mr. Dogra.
Earlier, Nestle only talked to kids but there is an 'inclusive audience' that is also being
spoken to, these days and that is the mothers, as at the end of the day it is the mothers
that are the buyers of the products. So the brand though specifically targeted at kids
'has' to speak to the mother too," says one industry analyst.
Against Competition
Perhaps the greatest challenge to Nestle comes from cooperatives like Amul and Mother
Diary. Unfortunately for Nestle, it has been unable to be at the top of the ladder, with these
domestic players still ruling the roost. Mr. Dogra acknowledged this and admitted that both
these cooperatives have extremely efficient operations and a very good marketing set-up.
However he points out to the fact that since these cooperatives generally operate on low/no
profit margins, they enjoy higher sales volumes due to price slashes.
Another interesting point he raised was that these cooperatives have been clever enough to
manipulate food laws in the country, which puts them in an advantageous position.

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CHAPTER 4
COMPANY INFORMATION
CADBURY
How Cadbury Chocolate is made

John Cadbury
Milk chocolate for eating was first made by Cadbury in 1897 by adding milk powder John
paste to the dark chocolate recipe of cocoa mass, cocoa butter and sugar. By today's standards
this chocolate was not particularly good: it was coarse and dry and not sweet or milky enough
for public tastes.
There was a great deal of competition from continental manufacturers, not only the French,
but

also

the

Swiss,

renowned

for

their

milk

chocolate.

Led by George Cadbury Junior, the Bournville experts set out to meet the challenge. A
considerable amount of time and money was spent on research and on new plant designed to
produce the chocolate in larger quantities.
A recipe was formulated incorporating fresh milk, and production processes were developed
to produce a milk chocolate 'not merely as good as, but better than' the imported milk
chocolate'.
Four years of hard work were invested in the project and in 1905 what was to be Cadbury's
top selling brand was launched.
Three names were considered: Jersey, Highland Milk and Dairy Maid.
Dairy Maid became Dairy Milk, and Cadbury's Dairy Milk, with its unique
flavour and smooth creamy texture, was ready to challenge the Swiss domination of the milk
chocolate market.

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

By 1913 Dairy Milk had become the company's best selling line and in the mid twenties
Cadbury's Dairy Milk gained its status as the brand leader, a position it has held ever
since.COMPANY OVERVIEW OF CADBURY INDIA
Cadbury began its operations in 1948 by importing chocolates and then re-packing them
before distribution in the Indian market. After 59 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, Kolkota
and Chennai). The corporate office is in Mumbai.

Currently Cadbury India operates in three sectors viz. Chocolate Confectionery, Milk Food
Drinks and in the Candy category.
In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership
over the years. Some of the key brands 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! Their flagship 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 their main product is Bournvita - the leading Malted Food
Drink (MFD) in the country. Similarly in the medicated candy category Halls is the
undisputed leader.
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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

The Cadbury India Brand Strategy has received consistent support through simple but
imaginative extensions to product categories and distribution. A good example of this is the
development of Bytes. Crispy wafers filled with coca cream in the form of a bagged snack,
Bytes is positioned as "The new concept of sweet snacking". It delivers the taste of chocolate
in the form of a light snack, and thus heralds the entry of Cadbury India into the growing
bagged Snack Market, which has been dominated until now by Salted Bagged Snack Brands.
Bytes was first launched in South India in 2003.
Since 1965 Cadbury has also pioneered the development of cocoa cultivation in India. For
over two decades, it has worked with the Kerala Agriculture University to undertake cocoa
research and released clones, hybrids that improve the cocoa yield.
Today, Cadbury is poised in its leap towards quantum growth and new categories of business,
namely gums, mints, snacking and gifting. It is a part of the Cadbury Schweppes Group,
world's No.1 Confectionery Company.

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CADBURY WORLD WIDE
Cadbury is the world's largest confectionery company and have a strong regional presence in
beverages in the Americas and Australia.
With origins stretching back over 200 years, today their products - which
include brands such as Cadbury, Schweppes, Halls, Trident, Dr Pepper,
Snapple, Trebor, Dentyne, Bubblicious and Bassett - are enjoyed in almost every country
around the world. We employ around 60,00 people.
Their heritage starts back in 1783 when Jacob Schweppe perfected his process for
manufacturing carbonated mineral water in Geneva, Switzerland. And in 1824 John Cadbury
opened in Birmingham selling cocoa and chocolate.
These two great household names merged in 1969 to form Cadbury
Schweppes plc. Since then they have expanded their business throughout
the world by a programme of organic and acquisition led growth.
Concentrating on their core brands in beverages and confectionery since the 1980s, they have
strengthened their portfolio through almost fifty acquisitions, including brand icons such as
Mott's, Canada Dry, Halls, Trident, Dentyne, Bubblicious, Trebor, Bassett, Dr Pepper, 7 Up
and Snapple.
-

It employs 60,000 people in over 200 countries

Worlds No 1 Confectionery company

World's No 2 Gums company

World's No 3 beverage company

ANALYSIS OF THE 4PS FOR THIS DIVISION

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

PRODUCT:
Currently Cadbury operates in four categories i.e. chocolate confectionary, milk food drinks,
candy and gums category.
Chocolates: Cadbury dairy milk
Cadbury celebration
Bornville
Five star
Perk
Gems
Toblerone
Beverages: Bornvita
Tang
Biscuits:

Oreo

Candy:

Halls
clairs

Gums:

Bubbaloo

Cadbury products

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

PRICE:
Cadbury dairy milk has always adopted a competitive strategy for the basic product whereas
it has gone for premium prices on the other variants. Since Cadbury is positioned towards a
very large audience from ages 4- 50years, the pricing strategy is extremely affordable and
easily accessible to all categories. The price list is as follows:Product

Pack size

Rate

Dairy milk

9.2 gram, 17 gram, 38 gram

Rs 5, Rs 10, Rs 22

Dairy milk shots

18.6 grams

Rs10

Dairy milk crackles

42 grams

Rs 35

Dairy milk Roast Almonds

42 grams

Rs 35

Dairy milk Fruit and Nut

42 grams

Rs 35

Dairy milk Silk

60 grams, 145 grams

Rs 55, Rs 125

Five star (clairs)

10 grams, 15 grams, 30 grams

Rs 2, Rs 5, Rs 10

Five star (crunchy)

30 grams

Rs 12

Five star (fruit and nut)

45 grams

Rs 23

Cadbury Five Star Jelly

10 grams, 15 grams, 30 grams

Rs 2, Rs 5, Rs 10

Perk

10 grams, 15 grams

Rs 2, Rs 5

Oreo

120 grams

Rs 27

bubbaloo

Rs 1

clairs

Rs 1

PLACE: It today has 5 company-owned manufacturing facilities at Thane, Induri (Pune),

Malanpur (Gwalior), Bangalore & Baddi (Himachal Pradesh) & 5 sales offices in 5 metros.
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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

The corporate office is in Mumbai. It works as teams to convert products into brands.
Cadbury enjoys a value market share of over 70% - the highest Cadbury brand share in the
world.

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

Cadbury has over 70% of the total market share in India.

market share of cadbury

India
Srilanka
Australia
Brazil
USA
UK
Rusia

Market share in global confectionery, in percentage terms (202-brands)

Companies

All Confectionery

Chocolate

Gum

Candy

Cadbury

9.9

7.5

25.7

7.2

Mars

9.0

14.8

3.0

Nestle

7.8

12.6

0.1

3.2

Wrigley

5.8

35.9

2.7

Hershey

5.5

8.2

1.1

2.7

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

CHAPTER 5
SWOT ANALYSIS
SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in any other situation requiring a decision.
Strengths and weaknesses are internal factors and opportunities and threats are external
factors.

SWOT ANALYSIS OF CADBURY INDIA

As per as the Cadbury India is concern the SWOT analysis is as follow:
STRENGTH:
1. Largest global confectionery supplier.
2. Market leaders in three sectors: Chocolates, Confectionery and food drinks
3. Cost of Production is low due to economic of scale which leads to higher profit and better
market penetration.
4. High financial strength.
5. Strong brand name and leader in innovations.

WEAKNESS:
1. Poor technology in India as compared to other nations
2. Limited key products as it is depended only on chocolates and beverage market compared
to other competitors.

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

OPPORTUNITIES:
1. Growing middle class and growing urban population.
2. Increasing gifts cultures.
3. Substitute to Mithais with higher calories/cholesterol.
4. Increasing concept in departmental stores desire @ at cash counters.
5. Opportunity increases with increase in market shares by acquisition.
6. Transfer production to low cost countries where labour cost and raw material will be
cheap.

7. Introduction of new products with low fats.

Threats:
1. Due to highest brand equity and low cost, it is successful in India.
2. Globalization will bring in better brands for upper end of the market.
3. High fats and calories in the products of Cadbury may reduce the demand of the consumers
who are conscious of nutrition and healthier lifestyles.
4. Competitive pressure from other national and global suppliers

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

SWOT ANALYSIS OF NESTLE

STRENGTHS:

1. Access to the Nestle Group's proprietary technology/brands, expertise and the

extensive centralised Research and Development facilities under the General Licence
Agreement.
2. High quality, safe food products at affordable prices, endorsed by the Nestle Seal of
Guarantee.
3. Strong and well differentiated brands with leading market shares.
4. Ongoing product innovation and renovation, to convert consumer insights.
5. Well-diversified product portfolio.
6. Efficient supply chain.
7. Distribution structure that allows wide reach and coverage in the target markets.
8. Capable and committed human resources.

Weakness:
1. Exports of coffee to Russia constitute substantial part of overall exports.
2.

Complex supply chain configuration.

OPPORTUNITIES
1. Nestle have opportunity to expand their product line like tea etc.
2. Company can open separate stores for eliminating retailers.
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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

3. Integration of new acquisitions in growth markets.
4. Growth in international & emerging markets.
5. Transition to a "Nutrition and well-being" company.
6. Continuous growth in the Pakistan coffee market.
7. Ethical business activities and support in community.
8. Nestle can make itself as social company.
9. Fair Trade agreements for cocoa and other products produced in third world countries.
THREATS
1. Price fluctuations due to rupee devaluation as raw material are imported. The uncertainty
of economic conditions poses a great threat as the major funds invested in the country
come from outside Pakistan.
2. The present economic crisis in the world, led to the withdrawal of foreign management
from the company and the investment has come to a halt.
3. Competition with Nestls owns smuggled brands.
4. Effect of Seasonalitys upon sales.
5. Imported raw material, in some of the companys products.
6. Major Player may enter target market Legal and ethical issues.
7. Market segment growth could attract new entrants.
8. Economic slow down can reduce demand.
9. Inflation is getting higher and higher so the purchasing power of the people is decreasing
day by day.

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

CHAPTER 6
FINDINGS AND CONCLUSION
I found many things which are well executed by distributors. Here are some of the key
findings given by me are purely based on my research. It doesnt have any kind of bias from
my side.
They are given as under.
I have found that the consumption of the chocolates are more in children and teenage
group though having any occasion or not having any occasion.
The most selling product of both the company are in small size of chocolates and there
market is 73% because its not much costlier. And also easily available & affordable.
Nestl India has a very wide portfolio of products ranging from Maggi Hot n Sweet
Tomato Sauce to Nestle Fruit n Dahi. Although, Nestl does not advertise much about its
products in India, still it is the world market leader in the milk market and Maggi noodles is
the product we have all grown up eating.
On the whole, Nestl India focuses mainly on the areas where it is a potential leader.
They may not try to replace the leader but surely their product becomes the second best
product in the market. For example, they do agree that Cadburys is synonymous to chocolates
in India and therefore they did not necessarily try to replace their flagship brand Cadburys
Dairy Milk but have developed a product in the other chocolates segment and therefore
Nestl Munch is the second best chocolate in India today as showed by the sales figures.
They have tried to price their products at lesser than the price of the competitors, for
example, Nestl Bar-One was sold at Rs.5 whereas the same quantity of its competitor
chocolate Cadburys 5-Star was sold at Rs.6.
In some areas, Nestl has been able to outperform its competitors and rather, for
products like Maggi noodles, it has no substantial competitors. When magi noodles came into
the market, there were other players like Top Ramen, whose presence counted but now it
makes no difference to the leader-Maggi.

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COMPARATIVE STUDY BETWEEN CADBURY AND NESTLE

Anybody looking for a good, refreshing coffee would like to drink a Nestl Nescafe
coffee and may not even at times give a second thought to the competitor Bru coffee.
Cadbury Dairy Milk encapsulates an enormous breath of emotions, from shared values such
as family togetherness, to the personal values of individual enjoyment. It stands for goodness.
A moment of pure magic!

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