SADHANA EDUCATION SOCIETYS

L. S. RAHEJA COLLEGE OF ARTS AND COMMERCE

SANTACRUZ (W), MUMBAI-400 054.

A PROJECT REPORT ON

PRODUCT LIFE CYCLE OF CADBURY DAIRY MILK

SUBMITTED BY

TANIA MANWANI

M.COM (SEM. III ): BUSINESS MANAGEMENT

(ENTREPRENEURSHIP MANAGEMENT)

SUBMITTED TO

UNIVERSITY OF MUMBAI

2016-2017

PROJECT GUIDE

PROF. KRIPA

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e-mail :lsraheja.mcom@gmail.com Tel. : 26609320 Website
: www.lsraheja.org.in

SADHANA EDUCATION SOCIETYS

L. S. RAHEJA COLLEGE OF ARTS AND COMMERCE
RE-ACCREDITED BY NAAC WITH A GRADE

Juhu Road, Santacruz (West), Mumbai 400 054.

DECLARATION BY THE STUDENT

I, TANIA MANWANI student of M Com Part-I Roll Number ____ hereby declare that the project for the

Paper ENTREPRENEURSHIP MANAGEMENT

Recent Trends in Performance Appraisal submitted by me for Semester III during the Academic Year

2016-17, is based on actual work carried out by me under the guidance and supervision of

PROF. KRIPA

I further state that this work is original and not submitted anywhere else for any examination.

Signature of Student

EVALUATION CERTIFICATE

This is to certify that the undersigned have assessed and evaluated the project on PRODUCT LIFE CYCLE

OF CADBURY DAIRY MILK, Submitted by TANIA MANWANI, Student of M Com Part-II.

This project is original to the best of our knowledge and has been accepted for Internal Assessment.

Internal Examiner External Examiner Principal

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Internal Assessment: Project 40 Marks

Name of the Student Class Division Roll

Number.
First name : Tania

Fathers Name: Tekchand M COM

PART II
Surname : Manwani

Subject: Multinational Corporations

Topic for the Project:

Marks Awarded Signature

DOCUMENTATION
Internal Examiner
(Out of 10 Marks)
External Examiner

(Out of 10 Marks)

Presentation

(Out of 10 Marks)

Viva and Interaction

(Out of 10 Marks)

TOTAL MARKS (Out of 40)

L. S. RAHEJA COLLEGE OF ARTS & COMMERCE

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 ACKNOWLEDGEMENT

It is great pleasure for me to acknowledge the kind help and guideline received to me during the
project work. I was fortunate enough to get support from a large number of people to whom I
shall always remain grateful.

I would like to express my sincere gratitude to Professor KRIPA for giving me this opportunity
to undergo this lucrative project for her great guidance and advice on this project, without which
I will not be able to complete this project.

Signature

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Contents
1. Chapter One Introduction .................................................................................................................. 6
Challenges of the Introduction Stage ........................................................................................................ 7
Benefits of the Introduction Stage ............................................................................................................ 8
Growth Stage ................................................................................................................................................ 9
Challenges of the Maturity Stage ............................................................................................................ 11
Benefits of the Maturity Stage ................................................................................................................ 12
Product Life Cycle Management in the Maturity Stage.......................................................................... 12
Challenges of the Decline Stage ............................................................................................................. 13
Benefits of the Decline Stage .................................................................................................................. 14
Product Life Cycle Management ............................................................................................................ 14
2. Chapter Two Case study (Cadbury Dairy Milk) ................................................................................ 19

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1. Chapter One Introduction

As consumers, we buy millions of products every year. And just like us, these products have a
life cycle. Product life cycle (PLC) is the life cycle through which every product goes through
since its introduced in the market.

Concept Of PLC

1. Products have limited life.

2. Products sales pass through distinct stages, each posing different challenges,
opportunities and problems to the seller.
3. Profit rise and fall at different stages of the product life cycle.
4. Products require different marketing, financial, manufacturing, purchasing, and human
resource strategies in such stage of their life cycle.

Products, like people, have been viewed as having a life cycle thus, all products have a limited
life, and during this life they will pass through four product life cycle stages; Introduction,
Growth, Maturity and Decline.

Product Life Cycle Stages

The product life cycle has 4 very clearly defined stages, each with its own characteristics that
mean different things for businesses that are trying to manage the life cycle of their particular
products. Most product life cycle curves are portrayed as bell-shaped curves. This curve is
typically divided into four stages:

Introduction
Growth
Maturity
Decline

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1. Introduction stage

The first of the four product life cycle stages is the Introduction Stage. Any business that is
launching a new product needs to appreciate that this initial stage could require significant
investment. This isnt to say that spending a lot of money at this stage will guarantee the
products success. Any investment in research and new product development has to be weighed
up against the likely return from the new product, and an effective marketing plan will need to be
developed, in order to give the new product the best chance of achieving this return.

Challenges of the Introduction Stage

Small or no market:

When a new product is launched, there is typically no market for it, or if a market does exist it is
likely to be very small. Naturally this means that sales are going to be low to start off with. There
will be occasions where a great new product or fantastic marketing campaign will create such a
buzz that sales take off straight away, but these are generally special cases, and it often takes
time and effort before most products achieve this kind of momentum.

High costs:

Very few products are created without some research and development, and once they are
created, many manufacturers will need to invest in marketing and promotion in order to achieve

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the kind of demand that will make their new product a success. Both of these can cost a lot of
money, and in the case of some markets these costs could run into many millions of dollars.

Losses, Not Profits:

With all the costs of getting a new product to market, most companies will see negative profits
for part of the Initial Stage of the product life cycle, although the amount and duration of these
negative profits does differ from one market to another. Some manufacturers could start showing
a profit quite quickly, while for companies in other sectors it could take years.

Benefits of the Introduction Stage

Limited competition:

If the product is truly original and a business is the first to manufacture and market it, the lack of
direct competition would be a distinct advantage. Being first could help an organisation to
capture a large market share before other companies start launching competing products, and in
some instances can enable a businesss brand name to become synonymous with the whole range
of products, like Walkman, Biro, Tannoy and Hoover.

High Price:

Manufacturers that are launching a new product are often able to charge prices that are
significantly above what will eventually become the average market price. This is because early
adopters are prepared to pay this higher price to get their hands on the latest products, and it
allows the company to recoup some of the costs of developing and launching the product. In
some situations however, manufacturers might do the exact opposite and offer relatively low
prices, in order to stimulate the demand.

Product Life Cycle Management

The initial stage of the product life cycle is all about building the demand for the product with
the consumer, and establishing the market for the product. The key emphasis will be on
promoting the new product, as well as making production more cost-effective and developing the
right distribution channels to get the product to market.

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 Growth Stage

The Growth stage is the second of stages in the product life cycle, and for many manufacturers
this is the key stage for establishing a products position in a market, increasing sales, and
improving profit margins. This is achieved by the continued development of consumer demand
through the use of marketing and promotional activity, combined with the reduction of
manufacturing costs.

Challenges of the Growth Stage

Increasing Competition:

When a company is the first one to introduce a product into the market, they have the benefit of
little or no competition. However, when the demand for their product starts to increase, and the
company moves into the Growth phase of the product life cycle, they are likely to face increased
competition as new manufacturers look to benefit from a new, developing market.

Lower Prices:

During the Introduction stage, companies can very often charge early adopters a premium price
for a new product. However, in response to the growing number of competitors that are likely to
enter the market during the Growth phase, manufacturers may have to lower their prices in order
to achieve the desired increase in sales.

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Different Marketing Approach:

Marketing campaigns during the Introduction stage tend to benefit from all the buzz and hype
that surrounds the launch of a new product. But once the product becomes established and is no
longer new, a more sophisticated marketing approach is likely to be needed in order to make
the most of the growth potential of this phase.

Benefits of the Growth Stage

Costs are Reduced:

With new product development and marketing, the Introduction stage is usually the most costly
phase of a products life cycle. In contrast, the Growth stage can be the most profitable part of
the whole cycle for a manufacturer. As production increases to meet demand, manufacturers are
able to reduce their costs through economies of scale, and established routes to market will also
become a lot more efficient.

Greater Consumer Awareness:

During the Growth phase more and more consumers will become aware of the new product. This
means that the size of the market will start to increase and there will be a greater demand for the
product; all of which leads to the relatively sharp increase in sales that is characteristic of the
Growth stage.

Increase in Profits:

With lower costs and a significant increase in sales, most manufacturers will see an increase in
profits during the Growth stage, both in terms of the overall amount of profit they make and the
profit margin on each product they sell.

Product Life Cycle Management

The standard Product Life Cycle Curve typically shows that profits are at their highest during the
Growth stage. But in order to try and ensure that a product has as long a life as possible, it is
often necessary for manufacturers to reinvest some of those profits in marketing and promotional

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activity during this stage, to help guarantee continued growth and reduce the threat from the
competition.

Maturity

After the Introduction and Growth stages, a product passes into the Maturity stage. The third of
the product life cycle stages can be quite a challenging time for manufacturers. In the first two
stages companies try to establish a market and then grow sales of their product to achieve as
large a share of that market as possible. However, during the Maturity stage, the primary focus
for most companies will be maintaining their market share in the face of a number of different
challenges.

Challenges of the Maturity Stage

Sales Volumes Peak:

After the steady increase in sales during the Growth stage, the market starts to become
saturated as there are fewer new customers. The majority of the consumers who are ever
going to purchase the product have already done so.

Decreasing Market Share:

Another characteristic of the Maturity stage is the large volume of manufacturers who are all
competing for a share of the market. With this stage of the product life cycle often seeing the
highest levels of competition, it becomes increasingly challenging for companies to maintain
their market share.

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 Profits Start to Decrease:
While this stage may be when the market as a whole makes the most profit, it is often the part
of the product life cycle where a lot of manufacturers can start to see their profits decrease.
Profits will have to be shared amongst all of the competitors in the market, and with sales
likely to peak during this stage, any manufacturer that loses market share, and experiences a
fall in sales, is likely to see a subsequent fall in profits. This decrease in profits could be
compounded by the falling prices that are often seen when the sheer number of competitors
forces some of them to try attracting more customers by competing on price.

Benefits of the Maturity Stage

Continued Reduction in Costs:

Just as economies of scale in the Growth stage helped to reduce costs, developments in
production can lead to more efficient ways to manufacture high volumes of a particular
product, helping to lower costs even further.

Increased Market Share Through Differentiation:

While the market may reach saturation during the Maturity stage, manufacturers might be
able to grow their market share and increase profits in other ways. Through the use of
innovative marketing campaigns and by offering more diverse product features, companies
can actually improve their market share through differentiation and there are plenty of product
life cycle examples of businesses being able to achieve this.

Product Life Cycle Management in the Maturity Stage

The Maturity stage of the product life cycle presents manufacturers with a wide range of
challenges. With sales reaching their peak and the market becoming saturated, it can be very
difficult for companies to maintain their profits, let alone continue trying to increase them,
especially in the face of what is usually fairly intense competition. During this stage, it is
organizations that look for innovative ways to make their product more appealing to the
consumer that will maintain, and perhaps even increase, their market share.

Decline

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The last of the product life cycle stages is the Decline stage, which as you might expect is often
the beginning of the end for a product. When you look at the classic product life cycle curve, the
Decline stage is very clearly demonstrated by the fall in both sales and profits. Despite the
obvious challenges of this decline, there may still be opportunities for manufacturers to continue
making a profit from their product.

Challenges of the Decline Stage

Market in Decline:
During this final phase of the product life cycle, the market for a product will start to decline.
Consumers will typically stop buying this product in favour of something newer and better,
and theres generally not much a manufacturer will be able to do to prevent this.

Falling Sales and Profits:

As a result of the declining market, sales will start to fall, and the overall profit that is
available to the manufacturers in the market will start to decrease. One way for companies to
slow this fall in sales and profits is to try and increase their market share which, while
challenging enough during the Maturity stage of the cycle, can be even harder when a market
is in decline.

Product Withdrawal:
Ultimately, for a lot of manufacturers it could get to a point where they are no longer making
a profit from their product. As there may be no way to reverse this decline, the only option
many business will have is to withdraw their product before it starts to lose them money.

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Benefits of the Decline Stage

Cheaper Production: Even during the Decline stage, there may be opportunities for some
companies to continue selling their products at a profit, if they are able to reduce their costs.
By looking at alternative manufacturing options, using different techniques, or moving
production to another location, a business may be able to extend the profitable life of a
product.
Cheaper Markets: For some manufacturers, another way to continue making a profit from a
product during the Decline stage may be to look to new, cheaper markets for sales. In the
past, the profit potential from these markets may not have justified the investment need to
enter them, but companies often see things differently when the only other alternative might
be to withdraw a product altogether.

Product Life Cycle Management

Many products going through the Decline stage of the product life cycle will experience a
shrinking market coupled with falling sales and profits. For some companies it will simply be a
case of continuing to manufacture a product as long as it is economically viable, but withdrawing
it as soon as thats not the case. However, depending on the particular markets involved, some
companies may be able to extend the life of their product and continue making a profit, by
looking at alternative means of production and new, cheaper markets. Even in the Decline stage,
a product can still be viable, and the most successful manufacturers are those that focus on
effective product life cycle management, allowing them to make the most from the potential of
each and every product the company launches.

Marketing Strategies for the Different Stages of the Product Life Cycle

Introduction Stage

The need for immediate profit is not a pressure. The product is promoted to create awareness and
develop a market for the product. The impact on the marketing mix and strategy is as follows:

Product branding and quality level is established and intellectual property protection,
such as patents and trademarks are obtained.

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 Pricing may be low penetration to build market share rapidly or high skim pricing to
recover development costs.
Distribution is selective until consumers show acceptance of the product.
Promotion is aimed at innovators and early adopters. Marketing communications seeks to
build product awareness and educate potential consumers about the product.

Growth Stage

Competitors are attracted into the market with very similar offerings. In the growth stage, the
firm seeks to build brand preference and increase market share.

Product quality is maintained and additional features and support services may be added.
Pricing is maintained as the firm enjoys increasing demand with little competition.
Distribution channels are added as demand increases and customers accept the product.
Promotion is aimed at a broader audience.

Maturity Stage

Those products that survive the earlier stages tend to spend longest in this phase. At maturity, the
strong growth in sales diminishes. Competition may appear with similar products. The primary
objective at this point is to defend market share while maximizing profit.

Product features may be enhanced to differentiate the product from that of competitors.
Pricing may be lower because of the new competition.
Distribution becomes more intensive, and incentives may be offered to encourage
preference over competing products.
Promotion emphasizes product differentiation.

Decline Stage

At this point, there is a downturn in the market. For example, more innovative products are
introduced or consumer tastes have changed. There is intense price cutting, and many more
products are withdrawn from the market. Profits can be improved by reducing marketing
spending and cost cutting.

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As sales decline, the firm has several options:

Maintain the product, possibly rejuvenating it by adding new features and finding new
uses.
Harvest the productreduce costs and continue to offer it, possibly to a
loyal niche segment.
Discontinue the product, liquidating remaining inventory or selling it to another firm that
is willing to continue the product.

By imaginatively repositioning their products, companies can change how customers mentally
categorize them. They can rescue products struggling in the maturity phase of their life cycles
and get them back to the growth phase. And in some cases, they might be able take their new
products forward straight into the growth phase.

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To effectively manage the product life cycle, organizations need to have a very strong focus on a
number of key business areas namely:

Development

Before a product can begin its life cycle, it needs to be developed. Research and new product
development is one of the first and possibly most important phases of the manufacturing process
that companies will need to spend time and money on, in order to make sure that the product is a
success.

Financing

Manufacturers will usually need significant funds in order to launch a new product and sustain it
through the Introduction stage, but further investment through the Growth and Maturity stages
may be financed by the profits from sales. In the Decline Stage, additional investment may be
needed to adapt the manufacturing process or move into new markets. Throughout the life cycle
of a product, companies need to consider the most appropriate way to finance their costs in order
to maximize profit potential.

Marketing

During a products life, companies will need to adapt their marketing and promotional activity
depending on which stage of the cycle the product is passing through. As the market develops
and matures, the consumers attitude to the product will change. So the marketing and
promotional activity that launches a new product in the Introduction Stage, will need to be very
different from the campaigns that will be designed to protect market share during the Maturity
Stage.

Manufacturing

The cost of manufacturing a product can change during its life cycle. To begin with, new
processes and equipment mean costs are high, especially with a low sales volume. As the market
develops and production increases, costs will start to fall; and when more efficient and cheaper
methods of production are found, these costs can fall even further. As well as focusing on
marketing to make more sales and profit, companies also need to look at ways of reducing cost
throughout the manufacturing process.

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Information

Whether its data about the potential market that will make a new product viable, feedback about
different marketing campaigns to see which are most effective, or monitoring the growth and
eventual decline of the market in order to decide on the most appropriate response, information is
crucial to the success of any product. Manufacturers that efficiently manage their products along
the product life cycle curve are usually those that have developed the most effective information
systems.

Most manufacturers accept their products will have a limited life. While there may not be much
they can do to change that, by focusing on the key business areas mentioned, product life cycle
management allows them to make sure that a product will be as successful as possible during
its life cycle stages, however long that might be.

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2. Chapter Two Case study (Cadbury Dairy Milk)

Cadbury Dairy Milk

The Cadbury story is a fascinating study of industrial and social development, covering well over
a century and a half. It shows how a small family business developed into an international
company combining the most sophisticated technology with the highest standards of quality,
technical skills and innovation.

Description: A glass and a half of milk in every half pound bar of chocolate.
Product Range: As well as the classic Cadbury Dairy Milk, Cadbury Fruit & Nut, Whole Nut,
Caramel, Crackle, Silk, Cadbury Almond, Bubbly , Chunky

History

In 1824, John Cadbury began vending tea, coffee, and (later) chocolate at Bull Street in
Birmingham in the UK and sometimes in India. The company was later known as Cadbury
brothers. Richard and George, opened a major new factory at Bournville, five miles south of the
city.

1842

By 1842 John Cadbury was selling no less than 16 varieties of drinking chocolate and 11
different cocoas! The earliest preserved price list shows that you could buy drinking chocolate in
the form of both pressed cakes and powder.

1875

In 1875, a Swiss manufacturer called Daniel Peter added milk to his recipe to make the first milk
chocolate bar. The first Cadbury Easter egg was made in 1875. The earliest eggs were made with
dark chocolate and had a smooth, plain surface. They were filled with sugar-coated chocolate
drops known as 'dragees. Later Easter eggs were decorated and had their plain shells enhanced
with chocolate piping and marzipan flowers.

1905 Official Launch

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In June 1904, George Cadbury and his team of confectioners created a chocolate containing a
far higher milk content than previously known to challenge the Swiss domination of the
chocolate market. After names such as Highland Milk and Dairy Maid were considered,
Cadbury Dairy Milk (CDM) was launched in 1905 and became an instant success.

2005

Celebrating its 100 years.

Present

Cadbury is a dominating player in the Indian chocolate market with strong brands like Dairy
Milk, Five Star, Perk, and Gems etc. Dairy milk is the largest chocolate brand in India.
Chocolates & Confectionery contribute to 75% of Cadburys turnover.

ABOUT CADBURY INDIA LTD.

Objective

Grow shareholder valueover the long term.

Strategy

Create robust and sustainable regional positions in our core categories of confectionery and
beverages through organic growth, acquisition and disposal.

Vision

The governing objective for Cadbury India is to deliver:

Superior Shareholder Value

Cadbury in every pocket

Cadbury India began its operations as a trading concern in 1947. Cadbury in the Indian sub
continent defined the first taste of chocolate. The company today employs nearly 2000 people
across India.

With brands like Dairy Milk, Gems, 5 Star ,Bournvita, Perk, Celebrations, Bytes, Chocki, Delite
and Temptations, there is a Cadbury offering to suit all occasions and moods.

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They bring the sweetest of smiles to millions of consumers through their dearly loved chocolates
distributed through 5.5 lakhs outlets.

Cadbury India's four factories in India churn out close to 8,000 tonnes of chocolate and the
company sells a million bars every day.(locations of factories.)

PRODUCTION

Cadbury Indias first manufacturing facility was set up at Thane (Mumbai) in 1966. Today, the
factory has grown manifold and manufactures a range of products that include Cadbury Dairy
Milk, 5 Star, Nutties, Gems and Bournvita. The factory employs about 750 people and houses
the R&D and engineering development facilities of the company.

In a move towards backward integration, Cadbury bought Induri Diary farm in Pune in 1964.
Recently, a major investment program resulted in the installation of modern molding, crumb and
chocolate making facilities. Today, the Induri Factory manufactures intermediate products like
milk crumb and a range finished chocolates.

In 1989, the company began operations in their newest and most modern plant at malanpur.
Equipped with state-of-the-art technology and backed by constant investment, this unit
manufactures clairs, Gems, Perk and Picnic.

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Cadburys Dairy Milk (CDM) has had an amazing journey in India, and is an excellent case
study in how a brand can become a success story, gaining extensive market shares (it is close to
70% right now with all extensions, 30% alone) and become almost a generic name for chocolates
in India. Let us follow this journey and see what things Cadbury must have done right to achieve
the kind of success it has.

Introduction stage

1905 Cadbury launches Dairy Milk onto the market.

Positioned as Unique Milk chocolate with far more milk and creamy taste.

In the 1980s, it was positioned as the perfect expression of love,

Sometimes Cadbury can say it better than words.

During the early1990s, emphasised its international identity, the Real taste of chocolate.

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 Re-positioning was done in 1994, to the free-child in every adult.

Famous Campaigns during growth stage

1994

In its initial years Cadburys chocolates were meant basically for the kids and the ads also
revolved around that concept only in which parents were seen trying to bribe or reward their
children with Cadburys dairy milk chocolates for getting them to do the things that they wanted
them to do.

Despite a major market share, depending on just the kids as a market was a bit risky and as sales
in this segment were not growing rapidly so Cadbury had very few options but to push up the
width of consumption. In other words, get more people to consume chocolates. That's because
while children were major consumers, focusing on depth was ruled out because parents were
actively cutting down consumption. .

So unless the blocks were removed, there was little hope of increasing depth. The trick was to
get the adult to eat chocolates himself, so that the child too could eat it. The first task was,
therefore, to shift adults into the chocolate mode. They did so by shifting the focus from kids to
the adults.

But the task was complex because motivational research showed chocolates were perceived as a
product meant for children. This was a big challenge as in Indian market not many adults were
thought to be consumers of chocolate.

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"The ad very consciously showed adults consuming chocolate in a very public setting. It was the
first major leap forward to make the category acceptable for adult consumption."

In 1994 Cadbury changed this perception with the help of ads under the campaign kid in all of
us. Then from this campaign to the one 'Real Taste of Life' campaign, which had many
memorable executions, which people still fondly remember. Out of these the one which people
still remember very fondly is the one in which a girl is shown breaking the security barriers and
entering the cricket field to celebrate the victory of the country in the cricked match under the tag
line Kuch Khaas Hai Zindagi mein. This campaign went on to be awarded 'The Campaign of
the Century', in India at the Abby (Ad Club, Mumbai) awards

Distribution was expanded and smaller packs introduced at more affordable prices. "It led to
20% plus growth for 3 to 4 straight years

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Growth Stage

In 1998, growth for the brand dealt with popularising consumption in a social context.

Especially in more traditional settings like weddings.

With the campaign Khaanein waallon ko khaanein ka bahana chahiye featuring Cyrus
Broacha, Cadbury Dairy Milk aimed to substantially increase penetration levels.

The campaign was launched in tandem with the award winning Kuchh khaas
hai...campaign.

The brand penetrated into smaller towns and sales volumes grew by 40%.

Famous Campaigns during the growth stage

1998

Then moving on came the new campaign which tried to tell people that chocolates can be had
anytime. With the campaign, Khaane Waalon Ko Khaane Ka Bahana Chahiye. That meant
that people who want to have a chocolate can find any reason to have one and no particular
occasion is required to wait for consuming the chocolates. This campaign showed that even
adults could have chocolates and this was showcased by showing collective and shared

25
moments among themselves. This campaign took the previous ad campaign even further which
showed that adults could go to any lengths to get their own bar of chocolate. In this ad Cyrus
Broacha is shown selling Cadburys Dairy Milk chocolate on the street and people are giving
their reasons for why they eat Cadburys Dairy Milk Chocolate.

"The challenge was to get a functional message across in what's not a functional category."

Cadbury Dairy Milk aimed to substantially increase penetration levels through its award winning
campaign Kuchh khaas hai

The brand penetrated into smaller towns and sales volume grew by 40%

Maturity Stage

The Worm Controversy resulted in Cadburys brand image taking a beating.

Sales declined up to 30%.

They had to recall a batch of chocolates. Cadbury rebuilt the trust of people by launching
project Vishwasin 2004.

Redesign of Packaging.

Focus shifted to taking the concept of Kuch Meetha Ho Jaaye further in 2004 with
Amitabh Bachchan.

In 2010, Shubh Aarambh ads that have brought back the old charm of Cadbury Dairy
Milk with its very interesting insight of mixing the traditional with the new age.

New Launch of Cadbury Silk, Bubbly and Chunky Marvellous creations

2003

Three years back, Cadbury's found itself in the eye of a storm, when a few instances of worms in
its Dairy Milk bars were reported in Maharashtra. In less than two weeks, the company launched

26
a PR campaign for the trade. And three months later, came an ad campaign featuring Big B and a
revamped poly-flow packaging.
Marketing and communications experts brought together by AICAR and the Subhash Ghoshal
Foundation say that Cadbury moved quickly to bear the cost of damage.

And thanks to its equity with the consumers, Cadbury's won back consumer confidence, with hit
on sales notwithstanding.

In October 2003, just a month before Diwali, customers in Mumbai complained about finding
worms in Cadbury Dairy Milk chocolates. Quick to respond, the Maharashtra Food and Drug
Administration seized the chocolate stocks manufactured at Cadbury's Pune plant.

In defense, Cadbury issued a statement that the infestation was not possible at the manufacturing
stage and poor storage at the retailers was the most likely cause of the reported case of worms.

But the FDA didn't buy that. FDA commisioner, Uttam Khobragade told CNBC-TV18, "It was
presumed that worms got into it at the storage level, but then what about the packing - packaging
was not proper or airtight, either ways it's a manufacturing defect with unhygienic conditions or
improper packaging."

That was followed by allegations and counter-allegations between Cadbury and FDA. The heat
of negative publicity melted Cadbury's sales by 30 per cent, at a time when it sees a festive spike
of 15 per cent.

For the first time, Cadbury's advertising went off air for a month and a half after Diwali,
following the controversy. Consumers seemed to ignore their chocolate cravings.

As a brand under fire, in October itself, Cadbury's launched project 'Vishwas' - a education
initiative covering 190,000 retailers in key states. But what the company did in January 2004 is
what really helped de-worm the brand.

By investing up to Rs 15 crore (Rs 150 million) on imported machinery, Cadbury's revamped the
packaging of Dairy Milk. The metallic poly-flow, was costlier by 10-15 per cent, but Cadbury
didn't hike the pack price.

Bharat Puri, managing director, Cadbury's India says, "While we're talking about a few bars of
the 30 million we sell every month - we believe that to be a responsible company, consumers
need to have complete faith in products. So even if it calls for substantial investment and change,
one must not let the consumers confidence erode."

Simultaneously, Cadbury's roped in brand ambassador Amitabh Bachchan to do some heavy

duty endorsement putting his personal equity on the line for the brand.

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The company upped ad spends for the Jan-March quarter by over 15 per cent. The recovery
began in May 2004, and by June, Cadbury's claimed that consumer confidence was back.

These experts believe that the reason for Cadbury's success was that it took crisis head-on. And
the consumers were more forgiving, because the brand enjoyed an emotional equity in India.

Santosh Desai, former president, McCann-Erickson says, "The nature of the relationship that
Cadbury's has built with the consumer is responsible for latitude the consumers are giving it.

"They are seeing it as a lapse, not a breach of trust - this difference is key. What Cadbury's set
out to deliver, it goofed up once but it seemed to be very sincere in its intent to get things right."

Even so, other experts felt Cadbury's was itself to blame for the worm crisis.

Mahnaz Curmally, PR counsel, explains, "Cadbury's had known for a long time that packaging
needed change, so in a sense, they waited for something to happen before they made that change
and perhaps in hindsight, they could have made that change voluntarily."

Cadbury's could be case study of a sweet recovery from a crisis. It continues to lead the Indian
chocolate market with over 70 per cent marketshare. However, the experts feel that today's
constantly changing environment should keep the company on guard.

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2004

After this campaign to capture more and more target segments Cadburys launched
another ad campaign i.e. Kuch Meetha Ho jaye. The message was clear that when
anytime you feel that you are happy and want to celebrate then you can have Cadburys
Dairy Milk to celebrate the occasion. Amitabh Bachan was used as the celebrity
endorser in this ad showcasing that these moments are meant to be celebrated and so
go on and celebrate them with Cadburys Dairy Milk.

Chocolate consumption is always seen as an act of indulgence and self-pampering by

the individual. Hence, Cadbury hit upon the idea of associating CDM with happiness. A
range of spaced apart advertisements, such as the ones shown below talk about
connecting CDM to happiness, and that too not in the form of major achievements, but
as the simple things in life that brings a smile to ones face.

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30
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CONCLUSIONS

Cadbury Dairy Milk has adapted itself to the Indian market quite impressively.
Different Promotional Strategies in different stage.
With its latest product Dairy Milk Silk, it is holding more than 70% of the market share
in India.
Cadbury Dairy Milk has done it all because of the emotional connect it established with
the consumers.
Its communication has always showcased its values and personality.

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Bibliography

http://basicmarketingfundas4u.blogspot.in/2010/11/cadbury-india-very-successful-story-of.html

http://articles.economictimes.indiatimes.com/2014-08-20/news/53028868_1_cadbury-dairy-
milk-chocolate-the-real
tastehttp://www.icmrindia.org/casestudies/catalogue/Marketing/Cadbury%20Dairy%20Milks%2
0Advertising-Case.htm

http://www.yourarticlelibrary.com/marketing/marketing-strategies-stages-of-product-life-
cycle/48630/

https://mymediawatch.wordpress.com/2015/07/14/product-lifecycle-of-cadbury-dairy-milk-
india/

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