1 | P a g e

TABLE OF CONTENTS Executive Summary ...................................................................................................................................... 3

OBJECTIVES OF THE STUDY .................................................................................................................. 4

ABOUT CADBURY INDIA ........................................................................................................................ 5

ABOUT NESTLE ......................................................................................................................................... 6

ABOUT CADBURY DIARY MILK ....................................................................................................... 7

Cadbury Dairy Milk Shots ........................................................................................................................ 8

Cadbury Dairy Milk Silk .......................................................................................................................... 8

ABOUT KIT KAT .................................................................................................................................... 9

CADBURY DAIRY MILK: MARKETING MIX ..................................................................................... 10

PRICING: ............................................................................................................................................... 10

PROFIT MARGINS ........................................................................................................................... 10

PRICE TABLE FOR DAIRY MILK .................................................................................................. 11

PRODUCT: ............................................................................................................................................. 11

PACKAGING ..................................................................................................................................... 13

PLACE: ................................................................................................................................................... 14

DEALERS LIST FOR CADBURY IN MADURAI ........................................................................... 15

PROMOTION: ........................................................................................................................................ 15

SEGMENTATION, TARGETING & POSITIONING-DIARY MILK ..................................................... 17

SEGMENTATION: ................................................................................................................................ 17

TARGETING:......................................................................................................................................... 17

POSITIONING: ...................................................................................................................................... 18

NESTLE KIT KAT- MARKETING MIX .................................................................................................. 19

PRICING ................................................................................................................................................ 19

PRICE TABLE FOR DAIRY MILK .................................................................................................. 19

PRODUCT: ............................................................................................................................................. 20

PLACE: ................................................................................................................................................... 20

Presence across India .......................................................................................................................... 21

PROMOTION ......................................................................................................................................... 22

SEGMENTATION, TARGETING & POSITIONING-KIT KAT ............................................................. 23

2 | P a g e

SEGMENTATION ................................................................................................................................. 23

TARGETING:......................................................................................................................................... 23

Positioning .............................................................................................................................................. 24

CONCLUSION ........................................................................................................................................... 25

3 | P a g e

Executive Summary

This project is a comparative study on the marketing mix of the two major

confectionery companies prevalent in India Cadbury and Nestle. The research was

conducted in the city of Madurai using distributor’s response and retailer’s

response. It was found from the research that Cadbury possessed a better marketing

mix and hence topped the comparison in sales figures and net profits. Nestle is

currently ranked second behind Cadbury in terms of sales, market share, brand

equity etc.

4 | P a g e

OBJECTIVES OF THE STUDY

To analyze and compare the market mix of Cadbury Dairy Milk and Nestle

Kit Kat, and also to compare them.

To learn about the segmentation, targeting and positioning of Dairy Milk

and Kit Kat.

To determine through the study as to which product is marketed in a more

effective manner.

5 | P a g e

ABOUT CADBURY INDIA

Cadbury India Ltd. is a part of the Mondelēz International group of

companies and is in the business of creating a delicious world - producing

delectable chocolate confectionaries, gum and candy products, and popular

beverages and foods that include many of India's most popular and trusted food

brands.

It believes strongly in delighting our customers by offering the best quality

products possible. Over the years It has won our customers' hearts and achieved a

70 percent market share in the chocolates category in India. Its flagship

brand Cadbury Dairy Milk (CDM) is considered the "Gold Standard" for

chocolates - the pure taste of CDM defines the chocolate taste for the Indian

consumer.

Ranked fourth among India's most admired companies by Fortune India, in 2012,

Cadbury India is a part of Mondelēz International (NASDAQ: MDLZ), the global

snacking and food company and a spin-off from Kraft Foods Inc. Mondelēz

International is the world's largest chocolatier, biscuit baker and candy maker, and

the second-largest maker of gum.

Cadbury India has been in India for over 60 years, having started in 1948 as an

importer of chocolates. Since 1965; Cadbury has pioneered and enhanced the

development of cocoa cultivation in India. For over two decades, it has worked

with the Kerala Agricultural University to undertake cocoa research and improve

cocoa yields. The cocoa team works with farmers to improve incomes through best

practices in all aspects of cocoa cultivation - from planting to harvesting.

6 | P a g e

Headquartered in Mumbai, Cadbury India has sales offices in New Delhi, Mumbai,

Kolkata and Chennai and six manufacturing facilities at Thane, Bengaluru,

Hyderabad, Induri (Pune), Malanpur (Gwalior) and Baddi (Himachal Pradesh).

ABOUT NESTLE

Nestle India Ltd, one the biggest players in FMCG segment, has a presence

in milk & nutrition, beverages, prepared dishes & cooking aids & chocolate &

confectionery segments. The company is engaged in the food business. The food

business incorporates product groups, such as milk products and nutrition,

beverages, prepared dishes and cooking aids, chocolates and confectionery. Nestle

India manufactures products under brand names, such as Nescafe, Maggi,

Milkybar, Milo, Kit Kat, Bar-One, Milkmaid and Nestea. The company's brands

include milk products and nutrition, prepared dishes and cooking aids, beverages,

and chocolates and confectionery.

The company has presence across India with 7 manufacturing facilities and

four branch offices spread across the region. The four branch offices in the country

help facilitate the sales and marketing of its products. They are in Delhi, Mumbai,

Chennai and Kolkata. The company's head office is located in Gurgaon, Haryana.

Nestle India Ltd was incorporated in the year 1956. The company set up their first

production facility in the year 1961 at Moga in Punjab. In the year 1967, they set

up their second plant at Choladi in Tamil Nadu as a pilot plant to process the tea

grown in the area into soluble tea. In the year 1989, they set up a factory at

Nanjangud in Karnataka.

7 | P a g e

ABOUT CADBURY DIARY MILK

Cadbury Dairy Milk encapsulates an enormous breath of emotions, from shared

values such as family togetherness, to the personal values of individual enjoyment.

It stands for goodness. A moment of pure magic!

Cadbury Dairy Milk (CDM) entered the Indian market in 1948, and since then for

consumers across India, the word Cadbury has become synonymous with

chocolate. CDM remains at the top of the Indian chocolate market not only because

of its most delicious, best tasting chocolate but also because of its memorable

communication.

The Dairy Milk brand alone accounts for approximately 33% of Cadbury's total

chocolate blocks (molded) and bars sales, making it the number one confectionery

brand in the market. The continued success of the Dairy Milk brand is testament to

the quality of its brand management.

The Dairy Milk sub-brands available in India are:

Cadbury Dairy Milk shots

Cadbury Diary Milk silk

Cadbury Dairy Milk Crackle

Cadbury Dairy Milk Roasted Almond

Cadbury Dairy Milk Fruit and Nut

8 | P a g e

Cadbury Dairy Milk Shots

Cadbury launched CDM Shots in 2008. An innovative format of sugar

coated chocolate made to withstand the rural temperature fluctuations.

Positioned as ‘chocolate laddoo’ and priced at Rs. 2 for 2 pieces, the attempt was

to introduce the product to consumers as the perfect value-for-money

accompaniment for their small celebratory occasions.

Cadbury Dairy Milk Silk

Most Cadbury Dairy Milk lovers thought that nothing could taste better, but CDM

Silk came as a welcome surprise! It is creamier, smoother, and tastier. Its dome

shaped cubes pack more chocolate and hence provide a superior eat experience.

Launched in January 2010, with a tantalizing taste that tempts the taste buds, CDM

Silk delivered an exquisite chocolate eating experience in the Indian market.

9 | P a g e

ABOUT KIT KAT

Kit Kat is a chocolate-covered wafer biscuit bar confection that was created

by Rowntree's of York, England, and is now produced worldwide by Nestlé, which

acquired Rowntree in 1988, except in the United States where it is made under

license by The Hershey Company. Each bar consists of fingers composed of three

layers of wafer, covered in an outer layer of chocolate. Each finger can be snapped

from the bar separately. Bars typically have 2 or 4 fingers. Larger Kit Kat Chunky

bars are also popular.

Use of the name "Kit Kat" or "Kit Cat" for a type of food goes back to the

18th century, when mutton pies known as a Kit-Kat were served at meetings of the

political Kit-Cat Club in London.

The origins of what is now known as the "Kit Kat" brand go back to 1911,

when Rowntree's, a confectionery company based in York in the United Kingdom,

trademarked the terms "Kit Cat" and "Kit Kat".

The original four-finger bar was developed after a worker at Rowntree's

York Factory put a suggestion in a recommendation box for a snack that "a man

could take to work in his pack" The bar launched on 29 August 1935, under the

title of "Rowntree's Chocolate Crisp" (priced at 2d), and was sold in London and

throughout Southern England.

10 | P a g e

CADBURY DAIRY MILK: MARKETING MIX

PRICING:

Cadbury Dairy milk is targeted towards people between the age group of 5-

45 and hence is made available at a very affordable price of Rs. 5, Rs.10 and

Rs. 22. The exception to this pricing is its premium range “SILK” which is

priced higher.

One of the major problems faced by Cadbury in pricing is the effect of

inflation of the cost of raw materials. They have tackled this decision by

reducing the weight of the products and keep the price of the product

unchanged.

Upon interaction with one supplier it was found that a recent increase from

Rs. 20 to Rs. 22 was negatively received in the market and volume of sales

went down.

Profit margin for the dealers is 5% and the profit margin for retailers is at

10%. Wholesalers compensate for this low profit margin by attaining a large

sales turnover.

PROFIT MARGINS

Profit margin for Wholesale 5%

Profit margin for Retailer 10% (12% for above Rs. 10)

The profit percentage in Cadbury for retailers was 12% for all products

above Rs. 10.

11 | P a g e

The basic Dairy Milk is available in three prices, Silk is available in two

prices, and Fruit& Nut and Roasted Almonds are available in also two

prices.

PRICE TABLE FOR DAIRY MILK

Weight in grams Price in rupees

10.5 5

17 10

38 22

42 (Fruit & Nut) 35

60 (Silk) 55

145 (Silk) 125

PRODUCT:

Dairy Milk is made from real dark chocolate. It contains the maximum

amount of milk solids.

Dairy Milk has a unique three layer packaging consisting of the inner foil,

middle paper and the outer plastic covering.

This unique packaging is responsible for keeping intact the flavor of the

chocolate and increases its shelf life.

The product has a good brand image and loyalty in India.

Dairy Milk is available in three ranges the basic variant, Fruit and Nut,

Almond, and Silk.

Dairy Milk Silk is a recent launch from Cadbury and has been well received.

The flavors include orange peel, roasted almonds and fruit& nut.

The basic ingredients used in the manufacturing process are sugar, cocoa

butter, vegetable fat, cream, cocoa mass and emulsifiers.

12 | P a g e

The Sales breakup of dairy milk is as follows: Rs. 5 pack- 70%, Rs. 10 pack-

25% and Rs. 22 pack- 5%. The 5 rupee is the sales leader.

13 | P a g e

PACKAGING

ALUMINIUM FOIL

PAPER COVER

PLASTIC COVER

ADVANTAGES

Protect the product from physical damage or deterioration

Display the product – good graphic design and shape is important.

Attracting customers

Improved efficiency

14 | P a g e

PLACE:

Dairy Milkis manufactured in five company owned factories at Thane, Pune,

Gwalior, Bangalore and Baddi. Four major sales offices include Delhi,

Mumbai, Kolkata and Chennai.

Cadbury has over 2,100 distributors and over 500,000 retailers across India.

Distribution for Tamil Nadu is from Chennai. There are a total of four

dealers for Cadbury in Madurai city.

The area separation for the dealers to operate is decided by the Cadbury

office in Chennai. Earlier during the 1980’s there existed only one supplier

and currently and the sales and demand for Cadbury chocolates increases the

number of dealers set up by Cadbury has increased to 4.

Nearly 60% of sales for the dealers are from medium to large super markets

which average at only 40 shops for the total number of shops dealt. This

shows that high volume of sales in retailing is from large stores and food

outlets such as bakeries.

15 | P a g e

DEALERS LIST FOR CADBURY IN MADURAI

DEALER NUMBER OF SHOPS

SUPPLIED

ZONE SUPPLIED

Vishalakshi stockist, East

Maret street.

920 Central Madurai

Alamu agency, 56-B, Work

shop road.

1050 South Madurai

Lakshmi agency, Anna

nagar.

750 North Madurai

A.S.V. Arunachalam& Sons 1300 South Madurai

&Thirumangalam

PROMOTION:

Extensive marketing campaigns have been undertaken by Cadbury to boost

the sales of Dairy Milk. The media mix for campaigns include T.V, outdoor,

internet and radio. Advertisements usually have a slight emotional touch.

Has Amitabh Bachchan as its current brand ambassador.

Has successfully launched and run advertising campaigns such as “The real

taste of life”,”Kuchmetha ho jaye” which was targeted at associating Dairy

Milk with celebrating occasions.

Most chocolate purchases amounting to nearly 80% of sales is upon impulse.

Hence, dealers insist on obtaining prime pace in the super markets such as

adjacent to the billing counter, so as to maximize sales.

16 | P a g e

One promotional activity aimed at dealers by the company is organizing a

yearly family event for all dealers of a particular region and their employees.

Cadbury also supplies chocolate storage trays, coolers and billboards with

their logos to supermarkets to increase the appeal and promote their

products.

Dealers offer discounts to retailers of up to 5% cash back policy if they

reach a sales target every month. This target is incremented upon achieving a

sales target.

17 | P a g e

SEGMENTATION, TARGETING & POSITIONING-DIARY MILK

SEGMENTATION:

The market for Dairy Milk is segmented in five ways. They are as follows:-

IMMEDIATE EAT: The immediate eat segment of the market contains

products which are purchased for immediate consumption. These purchases

are done on impulse to fill up, as a light snack etc.

HOME STOCK: The home stock segment of the market contains products

which are purchased for later use in and out of the home.

KIDS: The kids segment of the market contains products which are

purchased for children.

SEASONAL: The seasonal segment of the market contains products which

are purchased specifically at Easter, Christmas or other events such as

Valentine's Day.

GIFT: The gift segment of the market contains products which are purchased

for everyday gifting occasions.

TARGETING:

Dairy Milk is targeted at people from age 5 to 50. The smaller Rs. 5 pack is

aimed at kids and people with low income.

Silk from Cadbury is aimed at premium consumers and for gifts and

celebrations.

Aimed at people celebrating parties and for festivals as gifts and souvenirs.

18 | P a g e

POSITIONING:

The brand is positioned as a sweet or chocolate for any upbeat occasion. It is

positioned as the perfect recipe for all of life’s upbeat occasions. No matter

what the occasion, Dairy Milk will provide the perfect accompaniment.

POD:

o Goodwill/ emotional connect with Indian consumers

o Almost generic name in the Indian chocolate segment

o Campaigns are directed at kids as much as at adults

o Excellent distribution system, in India specifically

o 3 layer packaging

POP:

o Good quality product

o Chocolate manufacturing legacy

o Variants such as dark chocolate, fruit and nut etc.

o Constant innovation in marketing campaigns

19 | P a g e

NESTLE KIT KAT- MARKETING MIX

PRICING

Kit Kat is one of the premium tasty chocolate from nestle. It is offered in 5

different prices. The product is available at a price of Rs 5, Rs10, Rs20, Rs

40, Rs 60 and Rs 65. The premium price is packed by Dark chocolate type.

Compared to ordinary chocolate flavors dark chocolate flavors are placed at

high rate. To attract in low cost segment it is offered at Rs30 which is now

available only at tier 1 cities.

Profit margin for the dealers is 5.8% and the profit margin for retailers is at

9%.

PRICE TABLE FOR KIT KAT

Weight in grams Price in rupees

10 5

18 10

35.4 20

27.5(Dark chocolate) 30

40 (Dark chocolate) 50

108 60

20 | P a g e

PRODUCT:

Kit Kat is offered in two varieties. One ordinary chocolate with wafer inside

and another dark chocolate with wafer inside

Kit Kat comes with a fresh foil packing which has two layers consisting of

the inner foil and the outer plastic covering .This unique packaging is

responsible for keeping intact the flavor of the chocolate and increases its

shelf life and also when it leaves the pack it is as fresh as when they were

put in there

Kit Kat is made from Milk solids, Wheat flour, Cocoa solids and

hydrogenated vegetable oils

Kit Kat is offered in a rectangular size called as fingers, the number of

fingers differs over price

Kit Kat is offered under the brand NESTLE which has good image and

considered as the “Worlds 5th most beloved brand”.

Company has a policy of return if the product is expired or Damaged.

Kit Kat is channeled through retail, supermarkets and bakeries.

PLACE:

Kit Kat is manufactured in eight company owned factories at Punjab,

Tamilnadu, Karnataka, Goa, Haryana, Uttarakhand and HimachalPradesh.

Four major sales offices include Delhi, Mumbai, Kolkata and Chennai. Also

an R&D at Haryana.

Cadbury has 1 or 2 distributors per city and over 1500 super stockist across

India.

Distribution is through own network through cold chain.

21 | P a g e

Distribution for Tamil Nadu is from Chennai. There are a total of two

dealers for Kit Kat in Madurai city.

DEALER NUMBER OF SHOPS

SUPPLIED

ZONE SUPPLIED

Ramu Wholesale Mart

Thallakulam

1650 Central Madurai ,

North Madurai

Balaji Agencies,

Sathya Sai nagar

1500 South Madurai

&Thirumangalam

Presence across India

22 | P a g e

PROMOTION

The sale is promoted only in the retailer end. Retailers will earn a margin of

Extra 1% if target is achieved.

The distributors are not advertising, since adverting is taken care by Nestle

(Kit Kat).

Extensive marketing campaigns have been undertaken by nestle to boost the

sales of Kit Kat. The media mix for campaigns include T.V, internet.

Advertisements usually have a youth’s feel of product.

Has successfully launched and run advertising campaigns such as “Have a

Break Have a Kit Kat” which was targeted at young people to enjoying the

leisure time with Kit Kat.

The New release of Androids KIT KAT has made the brand popular one.

Kit Kat promotion along with Google for Android Kit Kat.

23 | P a g e

SEGMENTATION, TARGETING & POSITIONING-KIT KAT

SEGMENTATION

The market for Kit Kat is segmented in three ways. They are as follows:-

Immediate eat: The immediate eat segment of the market contains products

which are purchased for immediate consumption

Wafer product: chocolate coated wafer product which is crisp and differs in

taste

Break segment: products are consumed during short breaks

TARGETING:

Kit Kat is targeted at people from age 5 to 45.

Core target audience – youths aged between 18 -24 years old

Kit Kat Dark is initially aimed at premium consumers but moved to medium

cost.

The brand is youthful in nature and focuses on the consumer who love

chocolate and are willing to indulge themselves with chocolaty snacks.

24 | P a g e

Positioning

The brand is positioned at a premium snack chocolate. It has a unique

identity.

Points of parity

Wafer, Milk/Dark chocolates, Packaging

Points of difference

Wafer stick

Associated with snacks

Comes in 2 finger, 4 finger, 6 finger

25 | P a g e

CONCLUSION

Upon completion of this Comparative study of marketing mix of Cadbury’s

Diary Milk and Nestlé’s Kit Kat, it is found that 4P’s of Diary Milk is more

effective and better than Kit Kat in the Indian Market. Though Nestle-Kit Kat had

a renowned brand worldwide, Cadbury Diary Milk had gained a share in Indian

market through its variety, taste, low cost and promotions. Dairy Milk has over the

years built a chocolate brand that is synonymous with trust and loyalty.