Chapter 1 Concept of Positioning
What is positioning? Positioning is the marketing the marketing activity and process of identifying a market problem or
opportunity, and developing a solution based on market on market research, segmentation research, segmentation and supporting data. Positioning may refer the position a business has chosen to carry out their marketing and
business objectives. objectives. Positioning relates to strategy, in the specific or tactical tactical development phases of carrying carrying out an objective objective to achieve a business' or or organization's goals, goals, such as increasingsales increasingsales volume, brand volume, brand recognition, or recognition, or reach reach in advertising. It effort to influence to influence consumer perception perception of a brand or product relative to the perception of the competing the competing brands brands or products.Every products.Every small business needs something that makes it different from competitors. The process of establishing this difference, called positioning, enables a business to target a particular segment of the market. 7- UP‟s Un-cola campaign serves as a particularly blunt and effective example of positioning, as it capitalizes on the obvious, non-cola nature of 7-UP. While most businesses cannot cannot position themselves this easily, they can employ any one of a number of strategies to set themselves apart. Since, positioning involves implanting the brand‟s unique benefits and differentiation in customer‟s minds, many firms have a tagline that is designed to support the firm‟s/brand‟s
identity. A review of a tagline may help provide a clear indication of the product/brand‟s desired market positioning. Tide is an „all- purpose‟ purpose‟ family detergent; deter gent; at Subway restaurants, we „eat fresh‟; f resh‟; at Olive garden restaurants, „when you‟re here, you‟re family‟; and Pepsi is the „choice of new
generation‟. In the automobile market, the Toyota Echo and Ford Focus are positioned on
economy, Mercedes Mercedes and Cadillac on luxury, and Porsche and BMW on performance. Volvo positions powerfully on safety. Definitions of positioning
Positioning is also defined as the way by which the marketers attempt to create a distinct impression in the customer's mind. According to Philip Kotler, “Positioning is the act of designing the company‟s offering and image to occupy a distinctive place in the target market‟s minds.” An ape of the definition was given by Ries and Trout, “Positioning starts with the product….But positioning positioni ng is not what you do to the product. pro duct. Positioning is what you do to the mind of the prospect.”
Al Ries and Jack Trout, in their book Positioning: The Battle for Your Mind , introduce the subject by saying: "Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect. So it's incorrect to call the concept 'product positioning.' As if you were doing something to the product itself. Not that that positioning doesn't doesn't involve change. change. It does. But changes changes made in the name, the price and the package are really not changes in the product at all'. Positioning is also the first body of thought that comes to grips with the problems of getting heard in our over-communicated over-communicated society." Positioning is perception that happens in the minds of the target the target market. It market. It is the aggregate perception the market has of a particular particular company, product product or service in relation to their perceptions of of the competitors in the same same category. category. It will happen whether or not a company's management management is proactive, reactive or passive about the on-going process of
generation‟. In the automobile market, the Toyota Echo and Ford Focus are positioned on
economy, Mercedes Mercedes and Cadillac on luxury, and Porsche and BMW on performance. Volvo positions powerfully on safety. Definitions of positioning
Positioning is also defined as the way by which the marketers attempt to create a distinct impression in the customer's mind. According to Philip Kotler, “Positioning is the act of designing the company‟s offering and image to occupy a distinctive place in the target market‟s minds.” An ape of the definition was given by Ries and Trout, “Positioning starts with the product….But positioning positioni ng is not what you do to the product. pro duct. Positioning is what you do to the mind of the prospect.”
Al Ries and Jack Trout, in their book Positioning: The Battle for Your Mind , introduce the subject by saying: "Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect. So it's incorrect to call the concept 'product positioning.' As if you were doing something to the product itself. Not that that positioning doesn't doesn't involve change. change. It does. But changes changes made in the name, the price and the package are really not changes in the product at all'. Positioning is also the first body of thought that comes to grips with the problems of getting heard in our over-communicated over-communicated society." Positioning is perception that happens in the minds of the target the target market. It market. It is the aggregate perception the market has of a particular particular company, product product or service in relation to their perceptions of of the competitors in the same same category. category. It will happen whether or not a company's management management is proactive, reactive or passive about the on-going process of
evolving a position. But a company can positively influence the perceptions through enlightened strategic actions. A company, a product or a brand must have positioning concept in order to survive in the competitive marketplace. A Positioning Concept attempts to sell the t he benefits of the product or service to a potential buyer. Positioning concepts focus on the rational or emotional benefits that buyer buyer will receive or feel by using the product/service. product/service. A successful successful positioning concept must be developed and qualified before a "positioning statement" can be created. The positioning concept concept is shared with with the target audience audience for feedback and and optimization. Positioning can further be differentiated as brand b rand positioning, that is target consumer's reason to buy your brand in preference to others, and product positioning, that is marketing technique intended to present products in the best possible light to different target audiences.
Brand positioning process
Brand Positioning is how a product is perceived in the mind of consumer in relation to competitors‟ brand in the market. Brand Positioning is act of placing placing a company‟s brand in consumers‟ minds over and against competitors in terms t erms of characteristics and benefits that
the brand does and does not offer such as:
Attribute or Benefit
Quality and Price
Use or User
Competition
Brand positioning is also referred as Unique Selling.
Although there are so many different definitions of brand positioning, probably the most common is: identifying and attempting to occupy a market niche for a brand, product or service utilizing traditional marketing placement strategies (i.e. price, promotion, distribution, packaging, and competition). Effective Brand Positioning is contingent upon identifying and communicating a brand's uniqueness, differentiation differentiation and verifiable value. It is important to note that "me too" brand positioning contradicts contradicts the notion of differentiation differentiation and should be be avoided at all costs. costs. This type of copycat brand positioning only works if the business offers its solutions at a significant discount over the other competitor(s). Generally, the brand positioning process involves: 1. Identifying the business's direct competition (could include players that offer your product/service amongst amongst a larger portfolio portfolio of solutions) 2. Understanding how each competitor is positioning their business today (e.g. claiming to be the fastest, cheapest, largest, the #1 provider, etc.) 3. Documenting the provider's own positioning as it exists today (may not exist in startup business) 4. Comparing the company's positioning to its competitors' to identify viable areas for differentiation 5. Developing a distinctive, differentiating and value-based positioning concept 6. Creating a positioning statement with key messages and customer value propositions to be used for communications development development across the organisation
Product positioning process
Product‟s position is the way the product is defined by consumers on important attributes – the place the product occupies in consumers‟ minds relative to competing products. Positioning involves implanting the brands‟ unique benefits and differentiation in customers‟minds.
Louis E. Boone and David L. Kurtz, in their book Contemporary Marketing, defined product positioning as: "Product positioningrefers to consumers' perceptions of a product's attributes, uses, quality, and advantages and disadvantages relative to competing brands. Marketers often conduct marketing research studies to analyze consumer preferences and to construct product position maps that plot their products' positions in relation to those of competitors' offerings."
Generally, the product positioning process involves:1. Defining the market in which the product or brand will compete (who the relevant buyers are) 2. Identifying the attributes (also called dimensions) that define the product 'space' 3. Collecting information from a sample of customers about their perceptions of each product on the relevant attributes 4. Determine each product's share of mind 5. Determine each product's current location in the product space 6. Determine the target market's preferred combination of attributes (referred to as an ideal vector ) 7. Examine the fit between the product and the market
Chapter 2 Positioning Strategies
The positioning task consists of three steps: identifying a set of possible competitive advantages upon which to build a position, choosing the right competitive advantages, and selecting an overall positioning strategy. The company must then effectively communicate and deliver the chosen position to the market.
Identifying possible competitive advantage
To build profitable relationships with target customers, marketers must understand customer needs better than competitors do and deliver more value. To the extent that a company can
position itself as providing superior value, it gains competitive advantage. If a company positions its product as offering the best quality and service, it must then deliver the promised quality and service. Thus positioning begins with actually differentiating the company‟s
marketing offer so that it will give consumers superior value. To find points of differentiation, marketers must think through the customer‟s entire experience with the company‟s product or service. A company can differentiate itself or its
market offer along the lines of product, services, channels, people or image. Product differentiation
takes place along a continuum. At one extreme we find products that
allow little variation, such as aspirin, while on the other extreme are products that can be highly differentiated, such as automobiles. Such products can be differentiated on features, performance, or style and design. Thus, Volvo provides new and better safety features; Whirlpool designs it s dishwasher to run more quietly. Service differentiation
is differentiating the services that accompany a product through
speedy, convenient and careful delivery. For example, BankOne has opened full-service branches in supermarkets to provide location convenience along with weekend and weekdayevening hours. Some companies differentiate their offers by providing customer training service or consulting services- data, information systems, and advising services that buyers need. Firms that practice channel differentiation gain competitive advantage through the way they design their channel‟s coverage, expertise and performance. Amazon.com, Dell and Avon set
themselves apart with their high quality direct channels. People differentiation
is hiring and training better people that the competitors. People
differentiation requires that a company select its customer-contact people carefully and train
them well. Singapore Airlines enjoys an excellent reputation because of the grace of its flight attendants. Image differentiation is developing a strong and distinctive image of a brand. A company or
a brand image should convey the product‟s distinctive benefits or positioning. Symbols, such as the McDonald‟s golden arches or Google‟s colourful logo, can provide a strong company
or brand recognition and image differentiation.
Choosing the right competitive advantages
Sometimes the companies are fortunate enough to discover several potential competitive advantages. In such cases, it must decide how many differences to promote and which ones on which it will build its positioning strategy. How many differences to promote?
Many marketers think that companies should aggressively promote only one benefit to the target market. According to Ad man Rosser Reeves, a company should develop a unique selling proposition (USP) for each brand and stick to it. Other marketers think that companies should position themselves on more than one differentiator. This may be necessary if two or more firms are claiming to be best on the same attribute. For example, Unilever introduced the first three-in-one bar soap – Lever 2000 – offering cleansing, deodorizing and moisturizing benefits.
Which differences to promote?
Since each difference has the potential to create company cost and customer benefits, therefore the company must carefully select in which way it shall distinguish itself from its competitors. A difference should satisfy the following criteria:
Important: The difference delivers a highly valued benefit to target buyers.
Distinctive: Competitors do no offer the difference, or the company can offer it in a more distinctive way.
Superior: The difference is superior to other ways that customers might obtain the same benefit.
Communicable: The difference is communicable and visible to buyers.
Pre-emptive: Competitors cannot easily copy the difference.
Affordable: Buyers can afford to pay for the difference.
Profitable: The Company can introduce the difference profitably.
Selecting an overall positioning strategy
As the customers typically choose products and services that give them the greatest value, marketers want to position their brands on the key benefits that they offer relative to competing brands. The full positioning of a brand is called the brand‟s value proposition ––
the full mix of benefits upon which the brand is positioned. The following figure shows the possible value propositions upon which a company might position its products. The five winning propositions upon which companies can position their products are:
more for more, more for the same, the same for less, less for much less, more for less.
More for more:
It involves providing the most upscale product or service and charging a
higher price to cover the higher cost. Ritz-Carlton hotels, Mont Blanc writing instruments, Mercedes – Benz automobiles –– each claims superior quality, craftsmanship, durability, performance, or style and charges a price to match. Not only is the marketing offer high in quality, it also gives prestige to the buyer. Often, the price difference exceeds the actual increment in quality. More for the same:
It involves introducing a brand offering comparable quality to
competitor‟s product but at a lower price. For Example, Toyota introduces its Lexus line with
the “more-for-the-same” proposition. Published surveys showed that Lexus dealers were providing customers with better sales and service experiences than were Mercedes dealerships. The same for less: “The-same-for-less” proposition involves offering equivalent quality
product as the competitors but at a lower price. For Example, Dell offers equivalent quality computers at a lower price; AMD makes less expensive versions of Intel‟s market-leading
microprocessor chips.
Less for much less: The “less-for-much” proposition involves meeting customer‟s lower
performance or quality requirement at a much lower price or charging low price by not providing extra services. For Example, Indigo airlines charges incredibly low prices by not serving food to customers. More for less: The “more-for-less” proposition involves providing better quality and
services
than the competitors for a lesser price. For example, Surf Excel claims that its laundry detergents provide the best cleaning and everyday low prices.
Positioning strategies can be conceived and developed in a variety of ways. It can be derived from the object attributes, competition, application, the types of consumers involved, or the characteristics of the product class. All these attributes represent a different approach in developing positioning strategies, even though all of them have the common objective of projecting a favorable image in the minds of the consumers or audience. There are seven approaches to positioning strategies:
1. Positioning by product attributes and benefits
It is associating a product with an attribute, a product feature or a consumer feature. Sometimes a product can be positioned in terms of two or more attributes simultaneously. The price/ quality attribute dimension is commonly used for positioning the products. A common approach is setting the brand apart from competitors on the basis of the specific characteristics or benefits offered. Sometimes a product may be positioned on more than one product benefit. Marketers attempt to identify salient attributes (those that are important to consumers and are the basis for making a purchase decision)
Consider the example of Ariel that offers a specific benefit of cleaning even the dirtiest of clothes because of the micro cleaning system in the product.
Colgate offers benefits of preventing cavity and fresh breath.
Promise, Balsara‟s toothpaste, could break Colgate‟s stronghold by being the first to
claim that it contained clove, which differentiated it from the leader.
Nirma offered the benefit of low price over Hindustan Lever‟s Surf to become a success. Maruti Suzuki offers benefits of maximum fuel efficiency and safety over its competitors. This strategy helped it to get 60% of the Indian automobile market.
2. Positioning by price / quality
Marketers often use price/ quality characteristics to position their brands. One way they do it is with ads that reflect the image of a high-quality brand where cost, while not irrelevant, is considered secondary to the quality benefits derived from using the brand. Premium brands positioned at the high end of the market use this approach to positioning. Another way to use price/ quality characteristics for positioning is to focus on the quality or value offered by the brand at a very competitive price. Although price is an important consideration, the product quality must be comparable to, or even better than, competing brands for the positioning strategy to be effective. For example, Parle Bisleri – “Bada Bisleri, same price” ad campaign.
3. Positioning by use or application
Another way is to communicate a specific image or position for a brand is to associate it with a specific use or application. For example, Surf Excel i s positioned as stain remover „Surf Excel hena!‟; Clinic All Clear – “Dare to wear Black”.
4. Positioning by product class
Often the competition for a particular product comes from outside the product class. For example, airlines know that while they compete with other airlines, trains and buses are also viable alternatives. Manufacturers of music CDs must compete with the cassettes industry. The product is positioned against others, while not exactly the same, provide the same class of benefits.
5. Positioning by product user
Positioning a product by associating it with a particular user or group of users is yet another approach. For example, Motography Motorola Mobile ad, in this ad the persona of the user of the product has been positioned.
6. Positioning by competitor
Competitors may be as important to positioning strategy as a firm‟s own product or services. In today‟s market, an effective positioning strategy for a product or brand may focus on
specific competitors. This approach is similar to positioning by product class, although in this case the competition is within the same product category. For example, Onida was positioned against the giants in the television industry through this strategy, ONIDA colour TV was launched with the message that all others were clones and only Onida was the leader. “neighbour‟s Envy, Owners Pride”.
7. Positioning by cultural symbols
It is an additional positioning strategy where in the cultural symbols are used to differentiate the brands. Few examples of this strategy are – Humara Bajaj; Tata Tea; Ronald McDonald.
Each of these symbols has successfully differentiated the product it represents from competitors.
Chapter 3 Literature Review
Different authors understand brand positioning slightly differently. Literature shows that there is a development in understanding what positioning means for brand management, moving from advertising strategy to core long-term brand strategy determining consumer perception of the brand. The word positioning” was first used by Ries and Trout in 1969 in an article in Industrial Marketing (Keegan & Schlegelmilch, 1999, p. 378) describing a strategy for ´staking out turf‟
or ´filling a slot´ in the mind of target customers. Many authors associate the importance of positioning with advertising concept of USP (Unique selling proposition). One of them, Jack Trout, associates positioning to a great extent to successful communication, leaving the preceding process of developing the strategy for this communication (and positioning of a brand or idea) aside, as demonstrated by his statement: “The term positioning means, that the company concentrates on one idea or slogan, with which the consumer identifies himself”
(Rivkim & Trout, 1996).
In their 1981 book, Positioning: The Battle for your Mind, Al Ries and Jack Trout describe how positioning is used as a communication tool to reach target customers in a crowded marketplace. Jack Trout published an article on positioning in 1969, and regular use of the term dates back to 1972 when Ries and Trout published a series of articles in Advertising Age called "The Positioning Era." Not long thereafter, Madison Avenue advertising executives began to develop positioning slogans for their clients and positioning became a key aspect of marketing communications. Ries and Trout explain that while positioning begins with a product, the concept really is about positioning that product in the mind of the customer. This approach is needed because consumers are bombarded with a continuous stream of advertising, with advertisers spending several hundred dollars annually per consumer in the U.S. The consumer's mind reacts to this high volume of advertising by accepting only what is consistent with prior knowledge or experience. It is quite difficult to change a consumer's impression once it is formed. Consumers cope with information overload by oversimplifying and are likely to shut out anything inconsistent with their knowledge and experience. In an over-communicated environment, the advertiser should present a simplified message and make that message consistent with what the consumer already believes by focusing on the perceptions of the consumer rather than on the reality of the product. Ries and L. Ries stress also the importance of consumer: “Advertisers and agencies do not
position product. Consumers do. Companies need to determine what position their products already occupy in the consumers mind and relative to other products: only than they can act to reinforce or change that position.” (Ries & Ries, 2002) The important object in positioning is not the producer (marketer, advertiser) of the brand but the consumers .
Some other authors relate positioning closely to segmentation of the market and achieving competitive advantage through differentiation. Kuss and Tomczak understand under positioning “achieving a competitive advantage throughout specific target group” (Kuss &
Tomczak, 1998) while according to Belch and Belch it is “the art and science of fitting the product or service to one or more segments of the broad market in such a way to set it meaningfully apart from competition” (Belch & Belch, 1995), This means, that consumer, or
more specifically target audience and competition are source of differentiation of a brand. Kroeber-Riel and Esch relate positioning with consumer associations and brand image,
describing positioning as “measures leading to subjective customer perception of the offer, which is differentiated from the competition and therefore preferred” (Kroeber -Riel & Esch,
2000). K. Keller defines: “The essence of positioning is that the brand has some sustainable
competitive advantage or unique selling proposition. Such a selling proposition gives consumer a compelling reason why they should buy a particular product. Thus one critical success factor for the brand is that it has some strongly held, favorably evaluated associations that function as a point of differentiation and are unique to the brand and imply superiority over other competing brands” (Keller, 1998, str. 77).
David Aaker, one of the most respected authors on the topics of branding points that “Brand
position is part of the brand identity and value proposition that is to be actively communicated to the target audience and that demonstrates an advantage over competing brands” (Aaker, 1996, p. 176).
The further development shifts positioning into category of strategic marketing tools as brought by A. Tybout and B. Sternthal in Kellog on Branding “Brand positioning plays a key role in the building and managing of a strong brand by specifying how the brand is
related to consumer´s goals.” (Tybout & Calkins, 2005, p. 25) The authors present the
positioning statement composed of four parts: targeted consumer, frame of reference, point of difference and reasons to believe. Compared to other authors they put more emphasis on identification of the frame of reference as a potential source of brand´s future growth. Positioning is, despite his long history, a very contemporary tool in strategic marketing. There are some common opinions about what positioning should consist of, but there are also many uncertainties in how to achieve a clear and unique brand position in consumers´ mind. P. Kotler points that “marketing is not a static discipline. Marketing is a constantly changing
discipline and positioning is one of those revolutionary changes that keeps the marketing field alive, interesting, exciting, and fascination” (Ries & Trout, 2001, p. foreword).
According to Upshaw (1995) positioning is not verifiable scientific hypotheses. There is a great deal of subjective interpretation and high degree of risk involved in n choosing to seek one positioning strategy over another. He says that positioning campaigns that work often share common characteristics that can serve as a guide for marketers. Some of the most important factors are;
They are correctly and clearly targeted
They promise relevant benefits
Their promises are backed up with persuasive support
They serve as an integrated base with a compelling strategic personality
There is a credible brand fit
They are supported by sufficient market spending.
How a brand is recognized in the marketplace is based largely on its personality, but what is means in someone‟s life is derived from its positioning (ibid).
Chapter 4 About Cadbury
Cadbury is a British multinational confectionery
company owned by Mondelez
International. It is the second largest confectionery brand in the world after Wrigley's. Cadbury is headquartered in Uxbridge, London, and operates in more than fifty countries worldwide. Cadbury made different types of chocolates and other products which is sold in several countries around the world. It first sold its products in United States in 1905. Cadbury is best known for its confectionery products including the Dairy Milk chocolate, the Creme Egg, and the Roses selection box. The company‟s logo is :
History 1824 – 1900: Early history
In 1824, John Cadbury began selling tea, coffee, and drinking chocolate in Bull Street in Birmingham, England. From 1831 he moved into the production of a variety of cocoa and drinking chocolates, made in a factory in Bridge Street and sold mainly to the wealthy because of the high cost of production. In 1847 John Cadbury became a partner with his brother Benjamin and the company became known as "Cadbury Brothers". The brothers opened an office in London, and in 1854 they received the Royal Warrant as manufacturers of chocolate and cocoa to Queen Victoria. The company went into decline in the late 1850s.
An 1885 advertisement for Cadbury's Cocoa
John Cadbury's sons Richard and George took over the business in 1861. At the time of the takeover, the business was in rapid decline: the number of employees had reduced from 20 to 11, and the company was losing money. By 1864 Cadbury was profitable again. The brothers had turned around the business by moving the focus from tea and coffee to chocolate, and by increasing the quality of their products. The firm's first major breakthrough occurred in 1866 when Richard and George introduced an improved cocoa into Britain. A new cocoa press developed in the Netherlands removed some of the unpalatable cocoa butter from the cocoa bean. The firm began exporting its products in the 1870s. In the 1880s the firm began to produce chocolate confectioneries. In 1878 the brothers decided to build new premises in countryside four miles from Birmingham. The move to the countryside was unprecedented in business. Better transport access for milk that was inward shipped by canal, and cocoa that was brought in by rail from London, Southampton and Liverpool docks was taken into consideration. With the
development of the Birmingham West Suburban Railway along the path of the Worcester and Birmingham Canal, they acquired the Bournbrook estate, comprising 14.5 acres (5.9 ha) of countryside 5 miles (8.0 km) south of the outskirts of Birmingham. Located next Stirchley Street railway station, which itself was opposite the canal, they renamed the estate Bournville and opened the Bournville factory the following year. In 1893, George Cadbury bought 120 acres (49 ha) of land close to the works and planned, at his own expense, a model village which would 'alleviate the evils of modern more cramped living conditions'. By 1900 the estate included 314 cottages and houses set on 330 acres (130 ha) of land. As the Cadbury family were Quakers there were no pubs in the estate. In 1897, following the lead of Swiss companies, Cadbury introduced its own line of milk chocolate bars. In 1899 Cadbury became a private limited company.
1900 – 1969
In 1905, Cadbury launched its Dairy Milk bar, a production of exceptional quality with a higher proportion of milk than previous chocolate bars. Developed by George Cadbury Jr, it was the first time a British company had been able to mass-produce milk chocolate. From the beginning, it had the distinctive purple wrapper. It was a great sales success, and became the company's best selling product by 1914. The stronger Bournville Cocoa line was introduced in 1906. Cadbury Dairy Milk and Bournville Cocoa were to provide the basis for the
company's rapid pre-war expansion. In 1910, Cadbury sales overtook those of Fry for the first time. Cadbury's Milk Tray was first produced in 1915 and continued in production throughout the remainder of the First World War. More than 2,000 of Cadbury's male employees joined the Armed Forces and to support the war effort, Cadbury provided clothing, books and chocolate to soldiers. After the war, the Bournville factory was redeveloped and mass production began in earnest. In 1918, Cadbury opened their first overseas factory in Hobart, Tasmania. In 1919 Cadbury merged with J. S. Fry & Sons, another leading British chocolate manufacturer, resulting in the integration of well-known brands such as Fry's Chocolate Cream and Fry's Turkish Delight. In 1921, the many small Fry's factories around Bristol were closed down, and production was consolidated at a new factory in Somerdale Factory, outside Bristol.
The former Fry's factory in Somerdale (1921 – 2010)
Cadbury soon expanded its product range with Flake (1920), Creme eggs (1923), Fruit and Nut (1928), and Crunchie (1929) (originally under the Fry's label). By 1930 Cadbury had become the 24th largest British manufacturing company as measured by estimated market
value of capital. Cadbury took direct control of the under-performing Fry in 1935. Dairy Milk Whole Nut arrived in 1933, and Roses were introduced in 1938. Chocolate ceased to be a luxury product and became affordable to the working classes for the first time. By the mid-1930s, Cadbury estimated that 90 percent of the British population could afford to buy chocolate. By 1936, Dairy Milk accounted for 60 percent of the UK milk chocolate market. During World War II, parts of the Bournville factory were turned over to war work, producing milling machines and seats for fighter aircraft. Workers ploughed football fields to plant crops. As chocolate was regarded as an essential food, it was placed under government supervision for the entire war. The wartime rationing of chocolate ended in 1950, and normal production resumed. Cadbury subsequently invested in new factories and had an increasing demand for their products. In 1952 the Moreton factory was built. In 1967 Cadbury acquired an Australian confectioner, MacRobertson's, beating a rival bid from Mars. As a result of the takeover, Cadbury built a 60 percent market share in the Australian market.
Schweppes merger (1969)
The Cadbury Schweppes logo used until the demerger in 2008
Cadbury merged with drinks company Schweppes to form Cadbury Schweppes in 1969. Head of Schweppes, Lord Watkinson, became chairman, and Adrian Cadbury became deputy chairman and managing director. The benefits of the merger were to prove elusive. The merger put an end to Cadbury's close links to its Quaker founding family and its perceived social ethos by instilling a capitalist venturer philosophy in management. In 1978 the company acquired Peter Paul, the third largest chocolate manufacturer in the United States for $58 million, which gave it a 10 percent share of the world's largest confectionery market. The highly successful Wispa chocolate bar was launched in the North East of England in 1981, and nationwide in 1984. In 1982, trading profits were greater outside of Britain than in the UK for the first time. In 1986, Cadbury Schweppes sold its Beverages and Foods division to a management buyout known as Premier Brands for £97 million. This saw the company divest itself of such brands as Typhoo Tea, Kenco, Smash and Hartley Chivers jam. The deal also saw Premier take the license for production of Cadbury brand biscuits and drinking chocolate. Meanwhile, Schweppes switched its alliance in the UK from Pepsi to Coca-Cola, taking a 51 percent stake in the joint venture Coca-Cola Schweppes. The acquisition of Canada Dry doubled its worldwide drinks market share, and it took a 30 percent stake in Dr Pepper. As a result of these acquisitions, Cadbury Schweppes became the third largest soft drinks manufacturer in the world. Snapple, Mistic and Stewart's (formerly Cable Car Beverage) were sold by Triarc to Cadbury Schweppes in 2000 for $1.45 billion. In October of that same year, Cadbury Schweppes purchased Royal Crown from Triarc.
Schweppes demerger
In March 2007, it was revealed that Cadbury Schweppes was planning to split its business into two separate entities: one focusing on its main chocolate and confectionery market; the other on its US drinks business. The demerger took effect on 2 May 2008, with the drinks business becoming Dr Pepper Snapple Group. In December 2008 it was announced that Cadbury was to sell its Australian beverage unit to Asahi Breweries. 2003 Name rebrand
In 2003, Cadbury dropped the 's' from its name and renamed the brand to Cadbury. The reason behind this change was because the company found that it was a much more suited, rounded name than the previous "Cadbury's". This change was officially announced on the 19th of December 2002.
2007 – 2010
In October 2007, Cadbury announced the closure of the Somerdale Factory, Keynsham, formerly part of Fry's. Between 500 and 700 jobs were affected by this change. Production transferred to other plants in England and Poland. In 2008 Monkhill Confectionery, the Own Label trading division of Cadbury Trebor Bassett was sold to Tangerine Confectionery for £58 million cash. This sale included factories at Pontefract, Cleckheaton and York and a distribution centre near Chesterfield, and the transfer of around 800 employees.
In mid-2009 Cadbury replaced some of the cocoa butter in their non-UK chocolate products with palm oil. Despite stating this was a response to consumer demand to improve taste and texture, there was no "new improved recipe" claim placed on New Zealand labels. Consumer backlash was significant from environmentalists and chocolate lovers. By August 2009, the company announced that it was reverting to the use of cocoa butter in New Zealand. In addition, they would source cocoa beans through Fair Trade channels. In January 2010 prospective buyer Kraft pledged to honour Cadbury's commitment. Acquisition by Kraft Foods
On 7 September 2009 Kraft Foods made a £10.2 billion (US$16.2 billion) indicative takeover bid for Cadbury. The offer was rejected, with Cadbury stating that it undervalued the company. Kraft launched a formal, hostile bid for Cadbury valuing the firm at £9.8 billion on 9 November 2009. Business Secretary Peter Mandelson warned Kraft not to try to "make a quick buck" from the acquisition of Cadbury. On 19 January 2010, it was announced that Cadbury and Kraft Foods had reached a deal and that Kraft would purchase Cadbury for £8.40 per share, valuing Cadbury at £11.5bn (US$18.9bn). Kraft, which issued a statement stating that the deal will create a "global confectionery leader", had to borrow £7 billion (US$11.5bn) in order to finance the takeover. The Hershey Company, based in Pennsylvania, manufactures and distributes Cadbury branded chocolate (but not its other confectionery) in the United States and has been reported to share Cadbury's "ethos". Hershey had expressed an interest in buying Cadbury because it would broaden its access to faster-growing international markets. But on 22 January 2010, Hershey announced that it would not counter Kraft's final offer.
The acquisition of Cadbury faced widespread disapproval from the British public, as well as groups and organisations including trade union Unite, who fought against the acquisition of the company which, according to Prime Minister Gordon Brown, was very important to the British economy. Unite estimated that a takeover by Kraft could put 30,000 jobs "at risk", and UK shareholders protested over the mergers and acquisitions advisory fees charged by banks. Cadbury's M&A advisers were UBS, Goldman Sachs and Morgan Stanley. Controversially, RBS, a bank 84% owned by the United Kingdom Government, funded the Kraft takeover. On 2 February 2010, Kraft secured over 71% of Cadbury's shares thus finalising the deal. Kraft had needed to reach 75% of the shares in order to be able to delist Cadbury from the stock market and fully integrate it as part of Kraft. This was achieved on 5 February 2010, and the company announced that Cadbury shares would be de-listed on 8 March 2010. On 3 February 2010, the Chairman Roger Carr, chief executive Todd Stitzer and chief financial officer Andrew Bonfield all announced their resignations. Stitzer had worked at the company for 27 years. On 9 February 2010, Kraft announced that they were planning to close the Somerdale Factory, Keynsham, with the loss of 400 jobs. The management explained that existing plans to move production to Poland were too advanced to be realistically reversed, though assurances had been given regarding sustaining the plant. Staff at Keynsham criticised this move, suggesting that they felt betrayed and as if they have been "sacked twice". On 22 April 2010, Phil Rumbol, the man behind the famous Gorilla advertisement, announced his plans to leave the Cadbury company in July following Kraft's takeover. In June 2010 the Polish division, Cadbury-Wedel, was sold to Lotte of Korea. The European Commission made the sale a condition of the Kraft takeover. As part of the deal Kraft will
keep the Cadbury, Hall's and other brands along with two plants in Skarbimierz. Lotte will take over the plant in Warsaw along with the E Wedel brand. On 4 August 2011, Kraft Foods announced they would be splitting into two companies beginning on 1 October 2012. The confectionery business of Kraft became Mondelez International, of which Cadbury is a subsidiary.
Accounting With annual revenues of approximately $50 billion, the combined company is the world‟s
second largest food company, making delicious products for billions of consumers in more than 160 countries. Cadbury employs approximately 1,40,000 people and operates in more than 70 countries. In July 2007, Cadbury Schweppes announced that it would be outsourcing its transactional accounting and order capture functions to Shared Business Services (SBS) centers run by a company called Genpact, (a business services provider) in India, China, and Romania. This was to affect all business units and be associated with U. S. and UK functions being transferred to India by the end of 2007, with all units transferred by mid-2009. Depending on the success of this move, other accounting Human Resources functions may follow. This development is likely to lead to the loss of several hundred jobs worldwide, but also to several hundred jobs being created, at lower salaries commensurate with wages paid in developing countries.
Products
Major chocolate brands produced by Cadbury include the bars Dairy Milk, Crunchie, Caramel, Wispa, Boost, Picnic, Flake, Curly Wurly, Chomp, and Fudge; chocolate Buttons; the boxed chocolate brand Milk Tray; and the twist-wrapped chocolates Heroes. As well as Cadbury's chocolate, the company also owns Maynards and Halls, and is associated with several types of confectionery including former Trebor and Bassett's brands or products such as Liquorice Allsorts, Jelly Babies, Flumps, Mints, Black Jack chews, Trident gum, and Softmints.
Mission
Cad bury‟s mission statement says simply: “Cadbury means qualit y; this is our promise. Our reputation is built upon quality; commitment to continuous improvement will ensure that our promise is delivered.” This statement justifies Cadbury‟s mission or aim of contantly
improving their quality as their reputation is built upon the quality that they deliver.
Vision
The Barrow Cadbury‟s Trust is of a peaceful, equitable society, free from discrimination and based on the principle of social justice for all. Cadbury‟s set out a vision to achieve “a Cadbury in every pocket” dream by increasing the penetration of chocolates.
Cadbury has plans to move from a product brand to a service brand, where it intends to open up cafes termed “Cadbury Cocoa House”. These cafes will be Cadbury branded, traditional
English style cafes where you can expect to enjoy a delicious afternoon tea, along with a range of Cadbury-themed goods. Cadbury aims to have an edge over rivals such as Starbucks
and Pret a Manger by selling alcohol alongside its more traditional beverages. The first of these delicious chocolate themed cafes is proposed to be constructed in London. If this service-themes proposition works out, then Cadbury can hope to go worldwide with the same idea by opening up stores in Singapore. Seeing the local success of Milo as a chocolate and family brand, Cadbury would like to attempt becoming the same in the confectionery category. They have made significant headway into breaking into Singapore‟s saturated chocolate industry through their use of innovative social-media
campaigns.
Objective
Cadbury successfully turned its mission statement into its overall objectives and goals. Cadbury‟s main objectives are:
To make lots of chocolates
Improve the quality of their chocolate
To survive in the market
Have loads of stores worldwide
Expand itself into service sector
Be luxurious at affordable prices
Organization Structure Cadbury‟s type of organization structure is a hierarchial structure.. it is based on a distant
chain of commands from managing dierector to clerical support assistants. Decisions are made at the top and pass down. Cadbury‟s employee roles are usually based on clearly
defined procedures and roles. Cadbury organization is based on a Democratic Management Style wherein decisions are made as a result of consultation process involving vaious members of the organization (Cadbury). Ideas would be discussed and thought through collectively. Within Cadbury organization we can find a democratic structure, because cadbury tends to be found in a situation where it is felt to be important for all members of the organization to understand what they are doing, where decisions require individual initiative, and where members of the staff need to work as a team. In cadbury‟s organizational strcture
there is less complexity, less formalization and they are almost decentralized. In that sense we can say that Cadbury‟s organizational structure is Neo classically designed.
Cadbury’s Organization Structure
Cadbury India
Cadbury was incorporated in India on 19 July 1948.After over 60 years of existence, it today has six company owned manufacturing facilities at Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore, Baddi (Himachal Pradesh)and Hyderabad and 4 sales offices (New Delhi, Mumbai, Kolkata and Chennai). The corporate office is in Mumbai. Currently, Cadbury India operates in five categories – Chocolate confectionery, Beverages, Biscuits, Gum and Candy. Some of the key brands are Cadbury Dairy Milk, Bournvita, 5 Star, Perk, Bournville, Celebrations, Gems, Halls, Éclairs, Bubbaloo, Tang and Oreo. Its products include Cadbury Dairy Milk, Dairy Milk Silk, Bournville, 5-Star, Temptations, Perk, Gems (a version of M&M's), Eclairs, Bournvita, Celebrations, Bilkul Cadbury Dairy Milk Shots, Toblerone, Halls, Tang and Oreo. Cadbury India is a significant leader in the impulse market enjoying 70% shares in chocolates and a substantial share of sugar confectionary market. Cadbury India, Ltd. is by far the market leader, followed by Perfetti Van Melle India, Ltd. and Nestle India, Ltd. Cadbury India, on 21 April 2014, changed its name to Mondelez India Foods Limited.
Chapter 5 Cadbury’s Positioning Strategy
Positioning is all about that what is the customer concept or image of your product in the minds of the people who are likely to purchase the product. It also concerns about what is the position of your product in the market. Cadbury dairy milk made position of it product chocolate not only in the minds of consumers but also in the market. It means what is the view of consumers or concept about of your product like trough adds children‟s and youngsters view and action after seeing the add of
your product.
To make position in the minds of customers company used different promotional techniques through
By giving add through any superstar
Electronic media
Press media
Sign boards
By giving discount
By giving funds to welfare organizations
Cadbury has tried to position itself as somewhat of an affordable luxury. By keeping its price relatively high, it has managed to give competition to some of the premium brands like Ferrro Rocher.
Cadbury has maintained its positioning statement as – “Delivering recipes for life‟s upbeat occasions – i.e. no matter what your humour or the occassion, Cadbury Dairy Milk will provide the perfect accoplishment.”
Slogans
Slogans also play an important role to position a positive concept in the minds of customer. Cadbury has created a position for itself in the market with the slogans such as:
A glass and a half of full cream
Cadbury is the name of quality it is our promise
For kids across India, the word Cadbury is synonymous with chocolates; Cadbury has positioned as „the perfect expression of love‟; Cadbury‟s slogan „Mazzaaagaya‟ implies
Spontaneous, carefree, special, real moments; With slogan „Kuch Meetha ho jaye‟ the brand wants itself to be synonymous with Sweet by encouraging the use of chocolates as sweets on occasions. The brand has a slogan abroad “a glass and half of fresh milk in every half pound”.
Campaigns
Right campaigning plays a major role in brand positioning of a company. Cadbury undertook various campaigns in a period of few years to position itself as an affordable and luxurious product and has associated itself to be synonymous with sweets. Few of these campaigns are:
Campaign „Khane walo ko khane ka bahanachahiye‟
Target: Widening chocolate consumption amongthe masses. Tolani Institute of Management Studies
`Campaign „Kuch Meetha Ho JayeMessage‟ Target: Cadbury is not only a chocolate but also means for celebrations on occasions
Campaign „Pappu Paas Ho GayaTarget‟ Target: Encourage those who have passes exams and celebrate with Dairy Milk.
Campaign „Miss Palanpur ‟
Target: Focusing on rural people.
Campaign „Aaj Pehli Taarikh Hai ‟
Target: To celebrate pay day/ salary day.
Brand positioning as a gifting solution
The Cadbury ad campaign designing Team at Saatchi and Saatchi aimed at first retaining shoppers and ensure that they do not move to other brands. The Cadbury Rich dry fruit collection was projected as the ultimate gifting solution for festivals like Diwali. The campaign aimed at creating a platform for chocolates that superseded all kinds of gifts and other forms of sweet. The campaign communication was to be done in such a way that it is projected that each and every range of Cadbury chocolate and toffee collection is highlighted. The idea was to show that Cadbury owned the gifting space.
Marketing strategies:
To encourage the consumers Cadbury uses many strategies. Some of them are as follows: On Every Hand Everywhere: The customers demand flawless services from the salesmen
and they have to deliver that to the customers. Cadbury is the market leader in confectionery and chocolates. Their sales team plays an important role in the success. They regularly
conduct surveys of consumer‟s choice and requirements. They deliver the products not only in the super markets but also in the small shops, so that every segment of the customers can easily get their products. They also provide selling techniques. Growing with Emerging Markets: Revenue of the
company grows with the emerging
markets. Therefore ,they continuously modify the products to fulfill the requirement of all segments of consumers. This strategy has lead them to a growth of above 20% annually for the past three years. A strong foundation: Since 1948, Cadbury is serving their
products in India and they have
created a very strong tradition and leadership position. They are the number one chocolate brand with a share of about 70%. Today only one third of the population buys the chocolate so Cadbury is challenged to introduce the pleasure of Cadbury to many peoples. Expanding with the market:
To attract the broader range of consumers is the main target
the Cadbury. They created a base range of their acceptable chocolate brands at more reasonable and affordable price. They also introduced the gift range products for the customers segments with high-income group. Functional advantage: Cadbury Bournvita was launched in India in 1948 and it
always
required providing nutrition that helps in the development and growth. Today the natural goodness of milk, chocolate and malt is prepared with vitamins A, B1, B3, B6, B12 and C, plus protein, iron, calcium, manganese, zinc, and folic acid. It is also known as “a cup of confidence”. Affordable luxury: Cadbury has increased their presence in the candy in
the form of halls
and Cadbury dairy milk Eclairs. Eclairs became more popular in the markets with a hotter climate. The consumers find the delicious taste of chocolate in the middle that easily melts in the mouth and not in the hot climate. It is also an affordable chocolate for everyone.
Enhancing Brand image through Promotions:
Another Cadbury initiative was the Bournvita Quiz Contest. Even though it was not related to Dairy Milk in any way its success story deserved a mention. This quiz show was a big hit and greatly enhanced the value of the mother brand Cadbury. It was taken further by introducing a general knowledge book “BOURNVITA Book of Knowledge”. The latest innovation was
the first ever teachers versus students quiz show. These gimmicks have enhanced the brand value of both Bournvita and Cadbury.
Point-of-Sale Promotion and Displays:
Since positioning refers to implanting a distinct impression in the minds of the customers, Cadbury adopted the strategy of Point-of-Sale and display. In a bid to trigger chocolate penetration, Cadbury India Ltd rolled out a slew of customised marketing and communication initiatives at the retail end. The purple package and now the glossy purple package has forever been a very attractive feature of CDM prompting customers (kids and adults alike) to choose the vibrant purple over other brands. Point-of-sale plays a key role in promoting impulse product sales. This is especially true in chocolates, which are bought largely on impulse and are meant for out-of-home consumption. The entire POS strategy of Cadbury is shifting. The focus now is to provide dispensing and display solutions to outlets rather than just some ordinary POS material. The emphasis is now clearly on channel-specific solutions and mass customisation. The point-of-sale (POS) initiative that the company has undertaken for the more expensive variants of Cadbury Dairy Milk include innovative dispensers, premium window displays,
purple coloured wrappers and advertisement boards and message cards that are strategically placed to convey what the brand stands for. For all its other products, the company is also extensively using innovative PET jars i.e. jars made of safe plastic used for containing food and beverages without causing any reaction, display-cum-dispensing outers, hangers, and sheet metal dispensers for grouping and displaying a cluster of Cadbury products. Cadbury has also developed and rolled out customised top-end dispensers in large numbers, customised for each major retail channel. To align such initiatives with a tactical action plan on the shelves, the company has rolled out the “Choose Cadbury” initiative. This creative idea found expression across point-of-sale
material, in-shop visibility, shop-front signage and outdoors. The execution typically involves “appetite-appeal” visuals as a stimulus, followed by a call to action.
This kind of mass customisation will help break clutter and gain saliency for the brand.
Chapter 6 Conclusion
Positioning is about creating a dominant and distinct image of the brand in the minds of the customer. It is about identifying and creating opportunities for the brand to grow and attain a stable position in the market as compared to the competitors. This can be done via various customized positioning strategies that shall allow a brand or a product to obtain an individual unique identity. Positioning may refer the position a business has chosen to carry out their marketing and business objectives. Positioning relates to strategy, in the specific or tactical development phases of carrying out an objective to achieve a business' or organization's goals, such as increasingsales volume, brand recognition, or reach in advertising. The positioning task consists of three steps: identifying a set of possible competitive advantages upon which to build a position, choosing the right competitive advantages, and selecting an overall positioning strategy. Cadbury is the world‟s second largest chocolate and conf ectionary company. It was established in 1824 by John Cadbury n Birmingham and used to deal in tea, coffee and drinking chocolate. The company has annual revenues of approximately $50 billion and is now operational in more than 70 countries and has over 50 products out of which Cadbury Dairy Milk (CDM) is the most successful. Cadbury incorporated in India in 1948. In April 2014, Cadbury India changed its name to Mondelez India Foods Limited. The company has
