Cadbury Marketing Mix Essays

Cadbury Communication Mix Essay

What is the communication mix of Cadbury?

The marketing communications mix consists of five major modes of communication

1. Advertising

- in the case of Cadbury, advertising is used to build a long-term image of the product

- Cadbury must therefore through its media posture be the market champion and carry the brand message

- Television is the advised primary medium of communication as it has mass reach, a favourable image, high prestige value and is attention getting

- Cadbury also advertise through magazines, radio, promotions, online etc

- Consumers might believe that a heavily advertised brand must offer good value

- The 'taste' of Cadbury's chocolate has long been the focus of Cadbury's advertising. This has been supported by the slogan 'a glass and a half of full cream milk in every 200 grams', accompanied by a picture of milk pouring into the Cadbury's Dairy Milk chocolate block. The image has become an integral part of the packaging design and has been featured in magazines, and on buses and trains, billboards, and of course television.

2. Sales promotions

- Cadbury use sales-promotion tolls to draw a stronger and quicker buyer response

- It can be used for short-run effects to dramatise product offers

- The Go Another Cadbury promotion encourages customers to purchase promotionally marked Cadbury products for a chance to win free chocolate bars. This is just one of the many Cadbury promtions.

3. Public Relations

- The thought behind public relations, is that it provides advertising to a large audience as well as generates a welcoming community likeness about the company

- Well-thought-out programs coordinated with the other promotion-mix elements can be extremely effective

- Cadbury are committed to a strategy of "growing community value around the world" and are focussing on investments in the principal areas of education and enterprise, health and welfare and the environment. Cadbury recognise that prosperous, educated and socially inclusive communities are central to its success. Cadbury are proud of their investment in the community and the contribution made by employees around the world. Creating value in the community is part of their heritage and integral to achieving the core purpose of working together to create brands people love.

- Some of the major events and projects that Cadbury support are the Students In Free Enterprise, Foodbank, Variety Club, Melbourne Cup Carnival, Royal Show, World's Largest Annual Easter Egg Hunt and the three time AFL premiership champion Brisbane Lions

Personal Selling

- is the most effective tool at later stages of the buying process, particularly in building up buyer preference, conviction and action.

Direct Marketing

- use of mail, telephone, fax, e-mail or internet to communicate directly with...

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Analysing External and internal environment of cadbury, their CSR using CSR stance model and the last section will be their overseas opportunity in one country except UK using that countries PESTEL analysis and CAGE framework between UK and the other country.

1.0 Introduction

A company can be assessed by its strategic position in the market with respect to its competitors. This paper consists of a n extended research analysis on the biggest confectionary organization in the world, Cadbury. It will assess the critical aspects of the strategic selections which are availed to Cadbury. The paper will give the reader a significant knowledge about the various tools of research and also their importance in analysing and evaluating the markets for a business entity. The core purpose of this project is to support Cadbury to expand in its home country and also internationally with the proper use of accurate modes, theories and concepts. The strategies of marketing model will be applied and analysed in this report to indicate the competitive and market position of Cadbury. Recommendations are also given to measure the perspective of the company on the growth of the profits and revenue along with the share of market. However the planned segmentation is also evaluated critically on the foundation of the multiple procedures to categorize the financially attractive fragment for Cadbury. The available position in the industry is also identified with the help of strategic framework. The reaction of the competitors offers a detailed assessment of the probable reaction of the competitors along with the options to the strategic plans of Cadbury which are counteractive. The paper finally ends with the justification of the most possible strategic location for further operations of the business (Agudo-Valiente, Garcés-Ayerbe and Salvador-Figueras, 2013).

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2.0 Background of the Company

John Cadbury founded this company in the year 1831 which was covered successfully and also revolutionized the processing of cocoa in the market from the year 1866. Cadbury then merged successfully with Schweppes in the year 1969. The company is now internationally acknowledged as the most reputed organisation with the acclamation of an international status, Cadbury Schweppes PLC (referred to as Cadbury hereinafter). The company also successfully employs more than 45,000 employees in around 60 countries worldwide. The company is positioned strategically as the fourth highest supplier of the chocolate and sugar confectionary all over the world. The supreme successful product that was promoted by Cadbury since the year 1905 is “Dairy Milk”, the product has become very popular melted chocolate in UK along with the other chocolate bars internationally in the terms of revenue. The company’s three major pillars in its strategic success are top notch quality, money value and sound advertisement (Ajibola and Njogo, 2012).

3.0 Research Design

Research design which is used in this paper focuses mainly on the accurate tools of research like PESTEL Analysis, Porters Five Forces Model to assess the external environment of Cadbury so as to recognize the probable opportunities and threats. To evaluate the internal environment the resources and capabilities framework is used in the report. To equalize with the opportunities and the external threats with the internal weakness and strengths TOWS matrix have been applied here. The corporate social responsibility of the company is also analysed clearly with the support of Carroll’s Pyramid of CSR and CSR stance. To assist in the growth of Cadbury in the international market UAE PESTEL Analysis and the CAGE framework is considered to identify and point the profitability of the markets (Appleton, McKeown and Woodside, 2011).

3.1 Consequence and Outcomes

With the involvement of these tools to the Cadbury Company it will help us to recognize the probable opportunities in expanding the business and also assist it forecasting the threats which cannot be anticipated now. The market of UK confectionery is very much established market having a high demand and also levels of penetration. Additionally, the market is very much controlled and is also influenced by the big players like Mars and Nestle. Thus it becomes very essential for Cadbury to be pre-emptive in implementing the different strategies of business which are effective after considering the various factors and also to construct an effective strategy of corporate social responsibility to achieve the competitive advantage (Appleton et al., 2011).

4.0 External Analysis

The first and foremost fundamental step of strategic management is to analyse the current factors of the environment within which the operations of the company will be executed. The environmental factors consist of both internal and external factors. PESTLE framework is used to evaluate the external environment. There are two aspects of this analysis. The first aspect is to identify the environment in which the operations of the company take place and secondly, it gives valuable data to the company which helps in predicting the circumstances and situations of the future (Assessing the industry using Porter's five forces, 2014). Furthermore the PESTLE framework also gives a certain amount of essential fundamental knowledge to examine the macro environment; it has some constraints in measurements terms. They are:

  • The first setback which was seen that the PESTLE analysis does not adopt the quantitative measurement method. It was majorly concentrated on the qualitative approach if measurement.

  • The autonomous assessment of the each factor of the PSTLE model may not replicate the exact situation.
  • According to (Beneke et al., 2015) the PESTLE analysis must adopt the approach which is based on the inter dependence of the aspects of the model.

However with these restrictions the PESTLE framework is very used by the companies to examine the external environment and the impact of the same on the objectives and targets of the organization.

 

4.1 PESTLE Analysis- UK Confectionery Industry

The factors of the framework of PESTLE have a possible influence on the company, Cadbury. Thus the analysis that is mentioned below is of high importance for Cadbury if they want to successfully execute its operations of the business.

Political Factors

The political factors very much scrutinize the industry of the UK confectionery. It has both positive and negative impact on the company. It is very much essential for Cadbury to make themselves aware of the different political factors which are mentioned below:

  • The government has initiated campaigns to advertise the healthier way of living among every citizen. It is also additionally, pushing the drink and the food companies to manufacture all healthy products with a clear labelling (BOYLE, 2012).

  • Argument on Fat Tax- The first country to initiate the “fat tax” on food which contains 2.2% of saturated fat was Denmark. This also included confectioneries. Later it was obliterated because the food price was inflated after this. The medical experts however seemed to believe that the fat tax was an efficient way to decrease the obesity that was prevailing in UK. Thus as that fat tax can increment the unhealthy food price, it might be implemented in near future (Bray, 2015).

Economic Factors

Cadbury’s margin of profit is affected by the economic factors. It is necessary for an organization to know the factors so that they can take steps which are important to lessen the impact of this factor.

  • Being responsive to the campaigns on obesity the companies manufacturing chocolates are now downsizing the bars of the chocolates before the VAT rise.

  • The changes in climate are also affecting the yields of the crops. The prices and the trade balance are being affected in this return.

  • The crisis in the economy y might also affect the spending of the consumers and also the chocolates which are premium will be considered as unaffordable luxury for at least some months (Bugge and Lavik, 2012).

Social Factors

The consumers of a company are the most essential assets for a company. Thus it is significant for Cadbury to comprehend the alterations in the needs of the consumers and also the social trends so as to manufacture value products.

  • To deal with the downfall in the economy the consumers always prefer to save money by staying home, however to have a sweetening experience and for the guests they have started purchasing the chocolate bags.

  • As we know that the chocolate is a versatile gift in every occasion; boxed and seasonal chocolates have experienced a very high demand thereby giving rise to the sales which have been forecasted to rise by 12.5%.

  • In the present economic and social surrounding it has been seen that the sale of dark chocolates have increased dramatically (Collier, 2010).

Technological Factors

To attain a competitive advantage over the competitors Cadbury should be updated technologically and should also make use of the best and the latest technology that is present in the market.

  • In the current world the researchers and analysts are working with the growers of cocoa by the assistance of the satellite; internet connections so that it can improve the evenness and quality of their beans.

  • The companies are now opting for the advanced methods to examine and also rank the cocoa beans. In addition they are also taking the help of six division flavour wheel to fetch out natural aroma and the essence.

  • The change in the shape of the chocolate is a surprising trend which is ruling the market for a decade. The chocolate today are prepared very creatively in various combinations and shapes like for example Oreo biscuits having chocolates combined with it (Dulčić, Gnjidić and Alfirević, 2012).

Environmental Factors

The key element of Cadbury to execute its business is Cocoa. Cadbury should be responsive to the fact that there are certain effects of the environment on the production of the cocoa beans. Cadbury can design its own strategies to make sustainable cocoa.

  • The changes in the climate are estimated to affect the cocoa farms of West Africa. By some years, more than half of the countries producing cocoa might be too hot to help in the growth of the cocoa.

  • There is a huge decrement in the production of the cocoa because of the plant disease like black pot. The disease is a very serious problem which is destroying more than 85% of the cocoa crop. This disease is significantly severe in Central and West Africa.

  • With the outburst of Ebola the production of cocoa beans and its trade have been affected adversely (George, Owoyemi and Onakala, 2012).

Legal Factors

Cadbury should be responsive enough towards the alterations in the legal regulations and law to produce their products in a legally acknowledged manner. It is very much essential for the global players in manufacturing chocolates to be upgraded with the latest changes in the law or else it might affect the reputation of the company. The current legal laws are mentioned below:

  • The chocolate and the cocoa products must follow up with the reserved details that are formed by the Coca and Chocolate Products Regulations Act.
  • The members of CAOBISCO should abide by with the food and safety policy laid down by EU so that the companies execute practises of fair trade and also give sales and superior products to its consumers (Jerzewska-Zychowicz, Jeznach and Kosicka-GÄ™bska, 2012).
  • The government of UK have enacted the imposition of penalties which is worth £4500 for any company who fails to comply with the description and labelling requirements.

4.2 Porters Five Forces Model

To improve the effectiveness of a business plan, there is a necessity to evaluate the present situation. The best approach in this process is using the framework of Porter’s Five Forces Model. This model assists to recognize the competitive force of an industry and also give an indication of the industry’s attractiveness. The following diagram will show the determinants of the model (Ketola, 2013).

Figure 1: Porter’s Five Forces Model

New entrants

The confectionery market in UK is very much established and reputed in the market with top demand and also increased penetration level. There are around 274 producers of confectioneries in UK. The market is highly influenced and controlled by the major players like Nestle, Mondelez International and Mars. The company Cadbury is deemed to be an essential barrier for the new entrants because the company has a strong recognition of brand and also the threat of new firms is considerably less on Cadbury. Until and lest the product is innovative enough associated healthy style of living it cannot connect with the market to make its presence because already the market is captured by Cadbury (Kozelová et al., 2014).

Threat of Substitutes

The threat from substitution is very les on Cadbury because the brand equity is the key competitive edge of the company. Furthermore for the last few decades there is an increasing apprehension on the healthy life style. Thus there has been a huge increase in the sales of the products which are sugar free, products having reduced aft and cereal bars and calories providers. As per a survey recently it has been seen that the demand for the dark chocolates have also increased since it is deemed to be healthier than the other chocolates (New Partnership launched, 2010).

Buyer Power

There are two types of buyers in the confectionery markets; majorly the retailers and the ultimate consumers. There are also five super markets who dominate the confectionery retail markets in UK. These players are ASDA, TESCO, ALDI, SAINSBURY’S and MORRISON’S. These stores force more power of negotiation than the regular customers. The customers also purchase confectionary from the retailers in the local areas which are purchase on compulsion, for getting daily essentials. The confectionery products are broadly appreciated by every person in UK and they think it to luxury which is affordable (Pai and Subramanian, 2014). 

 

Supplier Power

The industry dealing in confectionery works primarily with merchants of food ingredients who supply the products like sugar, cocoa and gelatine. The key producers of cocoa are in Latin America, West Africa and South East Asia. In accordance with a recent study it was founded that Mars, Mondelez and Nestle controls 38.5% of the entire global supply. The Cadbury-cocoa partnership have kept the supplier power ti a low state because the funds in the partnership are invested in cocoa farms located in India, Ghana, Caribbean and Indonesia so as to determine a long term supply of cocoa (Parasramka and Dufresne, 2012).

Competitive Rivalry

It has been seen that there exists an aggressive competition in the confectionery industry due to the existence of multiple manufacturers. The big players like Nestle, Ferrero, Mondelez and Mars are indeed very robust brands which will give a very hard competition to Cadbury. These companies are striving for high presence in market by the implementation of multiple marketing strategies.

4.3 Recommendations

It is essential for the company Cadbury to ponder over all the external factors and taking them into consideration and turn them into opportunities and plan an effective strategy to execute a successful business. The company is recommended to continue investing in the innovation of the product since it is providing a competitive advantage for Cadbury. It must come up with more innovative and interesting strategies and promotion tactics to uphold the sturdy brand awareness so as to decrease the competitive rivalry. Cadbury should also focus on producing low-calorie and healthy confectionery to address the customers’ high concerns for healthy life style (Petrone, Gaziano and Djoussé, 2013).

5.0 Internal Analysis

Resource and Capabilities

According to (Sager, 2012), the resources and the capabilities of a market play a major role in constructing a top quality value for the consumers and also in achieving the competitive edge. In the year 1980 there was a shift from the industrial framework to the resource based view (RBV); this highlights the significance of the external environment. The major purpose for this shift is inability of industrial structure to rationalize that why certain firms in the similar industry vary in the internal performance.

Resources

The resources can be differentiated into intangible and tangible resources. As per (Salabun, 2014) the tangible resources can be physical, financial and human resources while the intangible resources are the skills and also the corporate culture, knowledge of the employees and the company policies. It is very much essential to convert the resources to valuable yield. The capabilities are things which are more than the resources; it comprises, constructs and also transforms te resources so as to create value for the products (Salabun, 2014).

Financial Resources

·         Bank overdraft of Cadbury has reduced compared to 2012

·         Increment of 29.5% in the cash balance

·         Increment in the working capital and also in shareholders capital.

Physical Resources

·         The core production unit of Cadbury is located at Bourneville. Mondelez is investing £75 million in the plant of Bourneville Cadbury to create it a world class one.

·         Cadbury also has their own online and physical stores to transact their products. Other than this the company also have teamed up with various retail stores on a huge scale.

Technological Resources

·         Cadbury has the right to approach the top notch facilities.

·         The company has started the “Chocolate Centre of Excellence” in 2012 for the purpose of research and development. 

·         Cadbury has adopted ERP system and SAP so as to cope with the merger

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