CADBURY- SALES & DISTRIBUTION TEAM MEMBERS: 1. AGRAWAL BHAVIN (02) PROFESSOR : MR. NEERAJ RAMNANIINSTITUTE : SOM-LALIT INSTITUTE OF MANAGEMENT STUDIES (SLIMS)

History of Cadbury

1824John Cadbury began selling tea, coffee, and drinking chocolate

1824

1897

1897The first Cadbury solid chocolate bar is sold.

1905

1905Dairy Milk brand appears for the first time

1948

1948Cadbury began its operations in India by importing Chocolates

1969 1993

2009 2013

1969Cadbury buys drink maker Schweppes to become Cadbury-Schweppes

2009Acquisition by Kraft Foods: £11.5 billion (US$18.9 billion) indicative takeover bid for Cadbury

2012The confectionery business of Kraft became Mondelēz International, of which Cadbury is a subsidiary.

2012-13 Cadbury India profit slows to six year low PAT growth 2.2% under the new parent Mondelez International.

2008Cadbury Schweppes demerger took with the drinks business becoming Dr. Pepper Snapple Group Inc.

1993Cadbury opened the world's largest and most advanced chilled warehouse in Minworth, Birmingham

2012

3

2008

• Cadbury India — a subsidiary of Mondelez International, the $32 billion global snacking major formed in October last year.

• Cadbury India enjoys a value market share of over 67 percent in the chocolate category and our brand Cadbury Dairy Milk (CDM) is considered the "gold standard" for chocolates in India.

• Cadbury in India operated in five categories: Chocolates, Beverages, Biscuits, Candy & Gum.

• Snapshot of some of the most popular Brand of Cadbury:-

CADBURY INDIA

Vision & MissionVision:

"Working together to create brands people love"

Cadbury’s mission statement   Says simply, ‘Cadbury means quality’; this is our promise. Our reputation is built upon quality;

our commitment to continuous improvement will ensure that our promise  

Mission Statement 0f the product: The mission statement of our new product is “To provide our customers with a tempting and exquisite taste” as Enticing Treats means a mouth watering treat which is simply irresistible.

Sales and Distribution structure of Cadbury Product

Competition Medium

Unit value Low

Volume High

Unit Margin Low

Seasonality Low

Retailer’s Capital Investment Low

No. of Retailers High

Retailer’s sales Low

Manufacturer Retailer’s Relationship Low

• To become the World’s Biggest and Best Confectionery Company.

• To make lots of chocolate & improve the quality of their chocolate.

• Have loads of stores worldwide.• To be an ongoing company & achieve revenue growth

of 20% per year.• Increase earnings by 15% annually & dividends per

share by 7% per year.

OBJECTIVES

Source: Change at the chocolate factoryBy Geetanjali Shukla and Anusha Subramanian Edition:Feb 19, 2012

Cadbury India’s Market share in different segments in 2015

COMPETITORS

Achievements

Major Achievements of Cadbury• Worlds No 1 Confectionery company• World's No 2 Gums company.• World's No 3 Beverage company.• Cadbury Dairy Milk & Bournvita have been declared a "Consumer Superbrand" for 2006-07

by Superbrands India.• Cadbury India has been ranked 5th in the FMCG sector, in a survey on India's most respected

companies by sector conducted by Business World magazine in 2007.• Cadbury India has been ranked as the 7th Great Place to Work and the No. 1 FMCG company

in India in 2008, by the Great Place to Work Institute.• Asian Marketing Effectiveness Awards 2008 for Bournvita Folk/Fusion campaign - GOLD

award for the "Best Insights and Strategic Thinking" and SILVER award for the 'Most Effective Use of Advertising'.

PRODUCT

CHOCOLATE BAR.

MADE FROM REAL DARK CHOCOLATE.

SIMILAR DESIGN WORLDWIDE.

CONTAINS MORE MILK THAN ANY OTHER CHOCOLATE BAR.

AVAILABLE IN 10.5g, 22g, 95g, 165g & OTHER PREMIUM PACKS

Popular Brands in INDIAChocolates

Snacks

Beverages

CANDy’s

GUMS

PRICE

WEIGHT (gm) PRICE

10.5 5

22 10

40 20

42 CRACKLE 25

95 50

80 FRUIT & NUT 55

165 90

PRICE MENTIONED ABOVE ARE SAME ALL OVER INDIA.

COMPETETIVE PRICING.

DUE TO PRICE HIKE IN RAW MATERIAL AND LABOUR COST COMPANY HAD NOT INCREASED THE COST OF PRODUCT BUT REDUCED THE WEIGHT OF PRODUCT.

EG. 5 RS PACK WAS OF 13gm BUT NOW IT IS 10.5gm

PLACE

Business OperationsFive company-owned manufacturing facilities:

Thane Induri (Pune) Malanpur (Gwalior) Bangalore Baddi (Himachal Pradesh)

4 sales offices: New Delhi Mumbai Kolkota Chennai

Corporate/Head office: Mumbai

THESE FACTORIES

CHURN OUT CLOSE TO 8,000

TONNES OF CHOCOLATE ANNUALLY

WHOLESELLERRETAILER

DISTRIBUTION

CDM ARE SOLD DIRECTLY TO WHOLESELLER AND RETAILERS.

CADBURY'S DISTRIBUTION NETWORK USED TO ENCOMPASSES 2100 DISTRIBUTORS AND 450,000 RETAILERS.

PROMOTION

Strong brands are very important in the chocolate confectionery market.

Almost 80% of chocolate purchases are made on impulse.

The media mix for the campaign comprises TV, outdoor, Internet and radio.

Use of emotional appeals in advertising.

Concentrated more on TV. Advertisement.

• The ‘Real Taste of Life’ with the girl dancing on the cricket field

• The message: ‘Dairy Milk is for enjoyment’

A FEW ADVERTISEMENTS

During late 90’s

• Campaign: ‘Khanewalon ko khane ka bahana chahiye’.

• Target: widening chocolate consumption among the masses

More recently

• Campaign: ‘kuch metha ho jaye’.

• Target: to associate Cadbury with celebratory occasion.

• Campaign: ‘pappu pass ho gaya’.

• Target: encourage those who have pass the exams to celebrate with Dairy Milk.

• Campaign: ‘Miss Palampur’

• Target: Focusing on the adults.

• Campaign: ‘AAJ PAHLI TARIK HAI’

• Target: To celebrate pay day / salary day

Cadbury appointed Amitabh Bachchan as its brand ambassador.

The Big factor that has pushed up CDM sales is the Amitabh Bachchan campaign.

THE BIG ‘B’ FACTOR

GEOGRAPHIC SEGMENT

IMPULSE SEGMENTFOR EATING THEN AND THERE.

“KHAANE WALO KO KHANE KA BAHANA CHAHIYE”

GIFT SEGMENT PURCHASED TO GIFT SOME ONE.

segmentation

The prospective customers of Cadbury Dairy Milk have changed have changed from kids to adults-including every family member to celebrate any occasion with Dairy Milk.

TARGET MARKET

FOR KIDS ACROSS INDIA, THE WORD ‘CADBURY’ IS SYNONYMOUS WITH CHOCOLATES.

CDM POSITIONED AS ‘THE PERFECT EXPRESSION OF LOVE’

“MAZZA AA GAYA”SPONTANEOUS, CAREFREE, SPECIAL, REAL MOMENTS.

" KUCH MEETHA HO JAYE “THE BRAND WANT ITSELF TO BE SYNONYMOUS WITH SWEET.

Positioning

1905 1990 1994 2003 2014 Time

Sale

s

Introduction

Growth

Maturity

20041998

+40%

-30%

+36%

PRODUCT LIFE CYCLE

• 1905 – Cadbury launches Dairy Milk onto the market.• Positioned as ‘Unique Milk chocolate with far more milk and

creamy taste’.• In the 1980s, it was positioned as ‘the perfect expression of love’,• ‘Sometimes Cadbury can say it better than words’.• During the early1990s, emphasised its international identity, the

‘Real taste of chocolate’.• Re-positioning was done in 1994, to the ‘free-child’ in every adult. • Cadbury Dairy Milk redefined itself as the perfect expression of

spontaneous, shared good feelings, providing the ‘real taste of life’ experience.• The ‘Real Taste of Life’ with the girl dancing on the

cricket field

• The message: ‘Dairy Milk is for enjoyment’

INTRODUCTION

• 1998- The next stage of growth for the brand deals with popularizing consumption in a social context, especially in more traditional settings like weddings.

• With the campaign ‘Khaanein waallon ko khaanein ka bahana chahiye’

• Cadbury Dairy Milk aimed to substantially increase penetration levels with the award winning ‘Kuchh khaas hai.. .’campaign.

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

During late 90’s

• Campaign: ‘Khanewalon ko khane ka bahana chahiye’.

• Target: widening chocolate consumption among the masses

GROWTH

• The ‘Worm Controversy’ resulted in Cadbury’s brand image taking a beating.

• Sales declined up to 30%.

• They had to recall a batch of chocolates. Cadbury rebuilt the trust of people by launching project ‘Vishwas’in 2004.

• Redesign of Packaging

• With Bachchan they also launched their new positioning of “Kuch Meetha Ho Jaaye” bringing in the tradition of celebrating a joyous occasion in India with sweets and now Cadbury Dairy Milk in particular.

• The “Pehli Tareekh Hai” campaigns talked about the importance of having Dairy Milk and celebrating on getting your pay on pay-day.

• “Shubh Aarambh” ads that have brought back the old charm of Cadbury Dairy Milk with its very interesting insight of mixing the traditional with the new age

MATURITY

Euromonitor predicts the industry will enjoy a 6% rise in revenues in 2014, delivering record global revenues of US$117bn. This robust performance is driven by a 2.1% increase in volume, reflecting growing appetite for chocolate in emerging markets. (Morris,2014 )

1999 2009 202002468

10

5.87.2

8.5

Consumption in World wide

year

Mill

ion

Tons

Sources:-1. A taste of Future, KPMG international-Consumer Markets June 2014, By

John A. Morris2. http://www.statista.com

The overall market size, growth trends and future

projections in the world Market

• Distribution Structure: No. of Levels

• Selection Criteria for channel Partner

CHANNEL DESIGN

Factory/Production unit

Retailers

C&F Agents

Re-Distributors

Consumers

Depot

WholesalerModern

Trade

CHANNEL OF DISTRIBUTION OF CADBURY

BUSINESS CAPACITY AND SALESMANSHIP

CREDITWORTHINESS, FINANCIAL AND SOCIAL STATUS

EXPERTISE AND EXPERIENCE

RELATION WITH CUSTOMERS

MARKET SEGMENTS

PRODUCER CHANNEL FIT

QUALIFICATION

TRAINING AND SUPPORT REQUIRED

SELECTION OF CHANNEL PARTNERS

MBA WITH 2-10 YEARS OF EXPERIENCE

CAREER PATH

ABILITY TO ANALYZE

HIGH ENERGY AND COMMERCIAL THINKING

INFLUENCING AND NETWORKING SKILLS

RECRUITMENT

• Rewards: Monetary and Non-Monetary

• Target Setting & Monitoring

• Training & Capacity Building

• Cash Flow

CHANNEL MEMBER MANAGEMENT

• General Trade Distributor Margin is around 4.75% and 1% is activity based(completion of Monthly Sales Target)

• Modern Trade Distributor Margin is around 4.5% and 0.5%

• Super Stockist Margin is around 2% and 1% of market value

MONETARY BENEFITS

• Retailers MarginProduct Margin

Bournvita 9%

Oreo 13%

Tang 10%

Halls & Eclairs Pouch 15%

Halls & eclairs Jar 12%

Health Drinks 9%

Drinking Choclate 7.5%

Choclates worth Rs. 5-20 10%

Choclates worth morethan Rs. 20 14%

• Big Bazaar has a direct account with Cadbury and there are separate margins fixed for these chains overall India by both of them mutuallyProduct Margin

Bournvita 9.45%

Choclates 11.03%

Tang 10.23%

Oreo 10.23%

MODERN TRADE MARGIN

• UDAAN: Foreign Trips to super stockists based on performance

• Visicoolers can be given only in food stores and Chemists where sales is more than 3000 per week

• SMDs can be given in Top shops where Sales is more than 2000 per week

• Mass market dispensers(Halls,Eclairs and Bubaloo gum) are given to chemists,Paan tapris

• Barrow Dispensers given to small shops and Paan Tapris

Non-Monetary Benefits

• Monthly Targets set Separately General & Modern Trade Distribution

• Incentives only after surpassing Targets• Targets Sets as on data are:

General Trade: 80-90 LakhsModern Trade: 10 Lakhs

• Monitoring Done by”Analysing Invoices” generated by the distributors & through company’s Salesforce

TARGET SETTING & MONITORING

LAKSHYA

NEW RECRUITS AND UNDERPERFORMERS

COMPANY & DISTRIBUTOR’S SALESFORCE

COST OF TRAINING

ONCE IN A YEAR

TRAINING &capacity building

THE DISTRIBUTOR–RETAILER CASH CYCLE VARIES FROM 1-7 DAYS.

IN MODERN TRADE THE CASH CYCLE IS OF 16DAYS TO 1 MONTH.

THE DISTRIBUTOR IS LIABLE TO PAY SALARY TO THE PCS BUT THE MONTHLY INCENTIVES ARE GIVEN BY THE COMPANY

THERE IS PAYMENT DONE THROUGH RTGS & PREPAID CHEQUES TO THE COMPANY

FLOW DISTRIBUTOR MAKES PAYMENT TO THE COMPANY ON A WEEKLY BASIS.

CASH FLOW

Branch Mgr

BLM (Branch Logistic Mgr)

BSM (Branch Sales Mgr)

Area Sales Mgr Area Sales Mgr Area Sales Mgr

Sales Engineer

Territory Sales In Charge

Interim Sales Representative

Super Stockist

Area Sales Mgr

BCM (Branch Commercial

Mgr)HR Mgr

SALESFORCE STRUCTURE OF CADBURY

ANNUAL MEETINGS FOR DISTRIBUTORS

"UDAAN" FOREIGN TRIP TO HIGH PERFORMING SUPER STOCKIEST

LAST YEAR TRIP TO BANGKOK & MALAYSIA FOR STOCKIEST

PREVIOUSLY TRIPS WERE TO THAILAND & DUBAI

GIFT HAMPERS

SALES FORCE MOTIVATION

EVERY PURPLE CHAMP IS ALLOTTED A SPECIFIC ROUTE TO BE COVERED IN EVERY BEAT AND HIS BEAT PLAN IS MADE FOR THE ENTIRE WEEK BY THE TSI UNDER THE SUPERVISION OF HIS TSE

USUALLY 10-12 PCS ARE APPOINTED BY A DISTRIBUTOR.

THEY REPORT DIRECTLY TO TERRITORY SALES INCHARGE (TSI).

DISTRIBUTOR'S SALES FORCE IS CALLED AS PURPLE CHAMP.

PURPLE CHAMP

INFORMATION PASSING

NEED RECOGNITION

VISIT AND CLASSIFY

REPORTING AND DAY PLAN

CONVINCE AND FINALIZE ORDER

A DAY WITH PURPLE CHAMP

COLLECTION OF CASH OR CHEQUE

ENTERING ORDER AND MAKING BILLS

CONFIRMATION OF BILL

LOOK AT VISIBILITY

A DAY WITH PURPLE CHAMP

Sr. No Parameters MOP Metro

1 Overall Value Achievements

Secondary Value 1200

2 Focus Category Volume Achievement (only one category)

Volume in tonnes 600

3 Overall MSS Improvement

65.5% 1100

4 Big hits Achievement (2 Big Hits)

100% if both30% if one

1100

Total Incentives 4000/- Month

COMPANY INCENTIVES FOR PURPLE CHAMP

• Modes of transport

• Use of IT

• Role of Third Party

Transportation & Logistics

Mainly Roadways

Retailer

DistributorTata Ace/ Magic

Production Site

Insulated Vans

MODES OF TRANSPORT

• The invoice is generated by the company and the stock is sent along with the invoice and a copy of it for the distributor.

• WINOMKAR is a software where all the data and reports are maintained and is made available for the ASMs, the BMs and SE's(Limited Access) online for making further decisions.

• Provides all the data, Performance reports Beat Wise, Outleat wise Sales Trends over the years and months and Inventory Report(MIS of company developed by Pune based ‘Heerasoft’)

• Documentation is required once a retailer enrolls for a display scheme or receives a visicooler or SMD or Fridge by the company

• Meranet is a software through which the SO reports everything on a daily basis to the ASM.

• Daily sales figures get synced here and the SO can view the summary at a glance.

• SO also mandatorily has to mail it to the ASM on a daily basis.

USE OF IT & DOCUMENTATION

Transportation

Audit

Promotion

Hiring and Payment

THIRD PARTY ROLE