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1.INTRODUCTION

The origins of chocolate can be traced back to the ancient Mayan and Aztec civilizations in

Central America. 'The obroma cacao', meaning 'food of the gods', was prized for centuries by the

Central American Mayan Indians, who first enjoyed a much-prized spicy drink called 'chocolatl',

made from roasted cocoa beans. The Aztecs introduced

cocoa to the Spaniards, who took it back to Europe in

the 16th century. However it was very expensive, so

only the rich could afford it. Chocolate was exclusively

for drinking until the early Victorian times when a

technique for making solid 'eating' chocolate was

devised. Throughout its history, whether as a cocoa

drinking chocolate or confectionery treat, chocolate has

always been much sought after. About 70% of the

world’s cacao is grown in Africa. A cacao tree can

produce close to two thousand pods per year. The

ridged, football shaped pod, or fruit, of the cacao grows

from the branches and, oddly, straight out of the trunk.

The pods, which mature throughout the year, encase a

sticky white pulp and about 30 or 40 seeds. The pulp is

both sweet and tart; it is eaten and used in making

drinks. The seeds, were you to bite into one straight out

of the pod, are incredibly bitter. Not at all like the

chocolate that comes from them. It’s actually a perfect design. The fruit attracts forest animals,

like monkeys, who eat the fruit but cast the seeds aside, dispersing them and allowing new trees

to sprout up. (One of my favorite memories of a recent trip to Costa Rica was watching monkeys

eating in a “chocolate” tree). It’s hard to imagine why humans ever thought to do anything with

the seeds. What is it that we do with these seeds, which we call beans, to answer the question

“Where does chocolate come from?” First, the pods must be harvested, which is usually done

twice a year. Because the trees are too fragile to climb, harvesting is accomplished by workers on

the ground, who wield either a machete or a long pole with a machete on the end. Then, workers

open the pods by hand, taking care not to damage the beans inside.

Next comes one of the most important steps in the process – fermentation. The beans, still sticky

with pulp, are placed in earthen pits or wooden bins and covered with banana leaves, then left to

ferment. The heat of fermentation changes the bitter flavors in the beans into something more

edible, more chocolatey .The sugars in the bean turn into acids, the color changes from pale to

dark brown, and the pulp residue melts away. The length of the fermentation process depends on

the type of bean; the higher quality beans may need only a few days, where others may need a

week or more.

After fermentation, the beans are dried in the sun for about a week. The flavor continues to

develop during this time. Some manufacturers try to speed this process along by drying the beans

over a fire, which gives them a smoky, inferior flavor. Once the beans are dry, they are ready to

be shipped to a factory, where they are turned into chocolate.

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2.Chocolate Market in India

Chocolate market is estimated to be around 1500crores growing at 18-20% per annum. Cadbury

is the market leader with 72% market share. According to a recent study conducted by a major

chocolate brand in India the major consumers of chocolates apart from kids are teenagers and

people between the age of 15 - 35. Chocolates which were considered expensive once have now

become affordable by one and all. Most of the chocolate brands in India produce chocolates in

different sizes that are priced according to their sizes. Chocolates like Diary Milk and Five Star

can be got for just Rs10.

Chocolates in India are slowly and steadily substituting the mithai or traditional Indian sweets.

Due to the increasing levels of social consciousness people prefer gifting well wrapped chocolate

packets rather than sweets on occasions and festivals. Taking advantage of this situation the top

chocolate brands in India are now concentrating on the packaging and are introducing well

packaged chocolates for specific occasions.

Initially chocolates were just limited to a few flavors caramel and milk chocolate till recent years

when the introduction of dry fruits in chocolates created waves in the chocolate industry in India.

Even dark chocolate which was not widely available in the Indian subcontinent till some time

back has started gaining ground in the Indian chocolate market.

The Chocolate market in India is currently estimated a` 1500crores. Growing at a rate of almost

18-20% per annum the chocolate market in India is becoming one of the major industries in the

country. India produces almost 30,000 tones of chocolate products annually. India's per capita

consumption of chocolate is a whooping 300 grams. Out of which Over 70 per cent of the

consumption takes place in the urban areas. Chocolate consumption in the rural areas is

negligible in India. Top Chocolate Brands in India are Cadbury, Nestle, and Amul. Cadbury and

Nestle has been dominating the chocolate industry in India over the last few decades due to their

deep penetration levels and strong customer base. Cadbury over the years has become

synonymous with chocolates in the country. Be it the quality of the chocolate, the packaging, the

marketing or the advertising Cadbury has been ruling the chocolate industry since quite a few

decades now. However as compared to these two brands Cadbury and Nestle, Amul is relatively

new.

3.Global Market overview for Chocolates

The global chocolate industry has been in a moderate growth trajectory since the last five years.

This growth is largely fueled by the increased global demand for premium chocolate. The major

developing countries such as China and India are expected to offer great opportunities to the

global chocolate industry; thanks to the use of chocolate as a functional food. Organic and fair

trade chocolate is a rapidly growing segment of the industry. With consumers developing more

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awareness regarding environment-friendly products, this segment is expected to rise rapidly in

the next five years. One of the major concerns for the chocolate industry is the rising number of

counterfeit products.

The global chocolate market is highly consumer driven and companies need to focus on their

development and marketing strategies towards capturing a larger consumer base, and acquiring

new markets. Vanilla is the most preferred flavor in the chocolate industry. A number of other

important flavors such as mint, coffee, strawberry, and orange are being increasingly used these

days. The world enjoys various brands of blended chocolates which are available accordingly for

all. The Top ten are: Kitkat, Mars, Galaxy, Cadbury, Toblerone, Patchi, Guylian, Ghirardelli,

Lindt & Sprungli, Ferrero Rocher.

4.TOP CHOCOLATE BRANDS IN INDIA

1.Dairy Milk

2. Kit Kat

3. 5Star

4. Bar one

5. Munch

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5.CONSUMER TRENDS

Mithai- the traditional Indian sweats is getting substituted by chocolates among upwardly mobile

Indians. Instead of buying sweats on Raksha-Bandhan, sisters prefer offering chocolates to their

brothers. This is the reason for sudden spurt in advertisement between July & Sep by most of the

companies The range and variety of chocolates available in malls seems to be growing day by

day, which leads to lot of impulse sales for chocolate companies. Chocolates which use to be

unaffordable, is now considered mid-priced. Convenience over Mithai in terms of packaging and

shelf life in making both middle class and rich Indians opt for chocolates. Designer chocolates

have become status symbols. They are linked to one’s aspiration and lifestyle and malls are

perfect points of sale as people usually are happy and gay at these destinations. Cadbury initial

communication for Celebrations was concentrated on occasions like Diwali and Rakshabandhan.

Over the last seven to eight years, the brand emerged as a good gift proposition for occasions and

enabled people to come closer. Research done by Cadbury suggested that they should extend the

plank of occasion-based gifting to social gifting i.e. all-year-round gifting options. Consumers

can choose from wide range of chocolates, which initially was limited to Milk chocolates like

DairyMilk and MilkyBar. In past few years we have seen so many SKUs with almonds, raisins

and all sort of nuts. And how can we forget latest 5 star crunchy and Ulta Perk, which has

opened new windows for consumers. In past, consumers had negligible inclination for dark

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chocolates. But now we have seen a change in the Indian palate, which is increasing the base of

this sub-segment.

6.TARGET MARKET SEGMENTATION

Target marketing includes three activities: market segmentation, market targeting, and market

positioning. There are two bases for segmenting consumer markets: consumer characteristics and

consumer responses. The major segmentation variables for consumer markets are:-

Geographic segmentation-this is division of market into different geographical units

such as nations, states, region, countries, cities, or neighborhoods.

Demographic segmentation- In demographic segmentation, market is divided into

groups on the basis of variables such as age, family size, family life cycle, gender,

income, occupation, education, religion, nationality, and social class.

Cadbury is targeting people of age group-(3years to 18years),(18years to 25

years),&(25+years).

Psychographic segmentation –in this segmentation, buyers are divided into different

groups on the basis of personality traits, lifestyle, or values.

Cadbury has become a part of lifestyle.

Behavioral segmentation-many marketers believe behavioral variable –occasion, benefits,

user status, usage rate, buyer readiness stage, loyalty status, and attitude-are the best

starting points for constructing market segment.

Occasions like Diwali, Rakhsha bandhan, new year etc are celebrated with Cadbury dairy

milk package.

With Respect To Product Form there are four major segments in the Indian Chocolate Industry.

Moulded Chocolate Segment

This segment constitutes 50% of the total market. Cadbury’s Dairy Milk (CDM) – Cadbury’s

flagship brand – has 50% of this segment market. To position CDM in this segment Cadbury

used the traditional demographic variables of age, socio-economic groups and usage intensity.

CDM was positioned as a product that elders (parents) bought for children. Cadbury has actually

associated itself to enduring and emotional values of love, sharing, parental affection, and

reward.

Bars Segment

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This segment forms 33% of the chocolates market. This segment is mostly targeted at teenagers.

Major Cadbury brands are 5-Star, Break, Real, crisp, and Double Decker. 5-Star is doing well

here (about 50% of the segment) while the rest of the brands act as endorser brands.

Nestle has a minor presence in this category with its product Bar-One.

Chocolate Wafers

Chocolate wafers are the new products being offered by chocolate companies today in order to

expand the market. In 1995, Cadbury and Nestle launched Perk and KitKat respectively. These

were wafer–enrobed chocolates in a new context and a different benefit offering. Both chocolates

had a snack positioning. Perk offered the anytime anywhere snack proposition – ‘Thodi si Pet

Puja’, whereas KitKat tried to promote snacking through ‘Have a break, Have a KitKat.

Choco Panned Segments

This segment forms 4% of the total market and Cadbury has 100% of the market in this segment.

The major brands are Nutties, Caramels, Butterscotch and Tiffins.

Sugar Panned Segment

This segment form 15% of the total market and Cadbury has about 98% of this segment, its

major brands being Gems and Éclairs.

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7. COMPANY PROFILE

7.1.CADBURY DAIRY MILK

Cadbury is a British confectionery company owned by Kraft Foods and is the industry's second-

largest globally after Mars, Incorporated. With its headquarters in Uxbridge, London, England,

the company operates in more than 50

countries worldwide.

Cadbury India began its operations in India

in 1948 by importing chocolates. It now has

manufacturing facilities in Thane, Induri

(Pune) and Malanpur

(Gwalior), Bangalore and Baddi (Himachal

Pradesh) and sales offices in New

Delhi, Mumbai, Kolkata and Chennai. The

corporate head office is in Mumbai. Since

1965 Cadbury has also pioneered the

development of cocoa cultivation in India.

For over two decades, Cadbury has worked

with the Kerala Agricultural University to

undertake cocoa research Currently, Cadbury

India operates in four categories: chocolate

confectionery, milk food drinks, beverage and candy & gum category. Its products

include CadburyDairyMilk, Bournville,5Star,Perk,Gems, Eclairs, Bournvita Celebrations,Bilkul

Bournville, Cadbury Dairy Milk Shots, Cadbury Dairy Milk Silk, Halls, Tang and Oreo..

Cadbury is the market leader in the Indian chocolate market with a share of 70% and sales of

around 12000 tons. It has successfully differentiated its product over the years by strategic brand

building. As the Cadbury’s official web site suggests, its journey in India has been an eventful

one. In the early 1990s, it tried to cater to the sweet tooth of the children. Those days they steered

the market and took control over the company’s major market share. However, the strategy

changed by letting out the secret that “everyone has a child inside “and thus everyone craves for

the taste of chocolate. Cadbury strategies went through a considerable change. It now catered

from children to adults and from chocolate to mithai. As the tagline goes “Khane walon ko kahne

ka bahana chahiye”.

VISION:- “Cadbury in every pocket” and “Superior Shareholder Value”

SWOT ANALYSIS

Strength

It has very strong brand equity in India. Dairy milk is reputed internationally as the topmost

chocolate provider in the world. The brand is well known to people and they can easily identify it

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from others. Due to its 54 years presence in India – has deep penetration – 2100

distridutors;450,000 retailers, 60 mid urban(22%) customers. It is a well force in marketing and

distribution. Users have a positive perception about the qualities of brand and it has a loyal

market also.

Weakness

Poor technology in India compared to current international technologies. There is a lack of

penetration in the rural market where people tend to dismiss it as high end or luxurious product.

It is mainly found in urban and semi-urban areas. It has been relatively high priced brand, which

is turning the price conscious customer away.

Opportunities

Tremendous scope for per capita consumption(160 gms of 8-10 kg).Increasing per capita

national income resulting in higher disposable income and growing middle class will give this

industry a new height.The chocolate market has seen one of the greatest increase in the recent

times. Chocolate is often described as recession-proof. There is a lot of potential for growth and

huge population who do not eat chocolate even today that can be converted as new users.

Threats

There exists no brand loyalty in the chocolate market. Consumers may frequently shift their

brands. New brands are coming and existing brands are introducing new variants to add up value

to an already overcrowded market.

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MARKETING STRATEGY (APPLYING 4PS)

Product category:-

The products offered by Cadbury's come in many different sizes, the sizes are dependent on the market

they are aimed at. Children usually have small appetites so most children's chocolate comes in small

packs. A good example of this is the Cadbury's Buttons range.

1. Cadbury dairy milk

2. 5-star

3. Perk

4. Celebrations

5. Temptations

6. Eclairs

7. Gems

8. Bubbaloo

9. Bournville

10. Dairy milk silk

Price As price is an important element of the marketing mix, the price charged for a chocolate bar can

determine whether a consumer will buy the product or not . Cadbury dairy milk offers discount

during festive seasons. The strategy used by Cadbury’s is for matching the value that customer

pays to buy the product with the expectation they have about what the production is worth to

them. Cadbury’s has launched various products which cater to all customer segments. So every

customer segment has different price expectation from the product.

Dairy milk Rs.15

Perk Rs.10

5 Star Rs.10

Fruit and Nut Rs.22

Gems Rs.10

Break Rs.5

Nutties Rs.18

Bournvita (500gm) Rs.104

Place Cadbury dairy milk is produced in factories and they are at

Thane,Induri(pune),Malanpur(Gwalior), Bangalore, Baddi(H.P.)

Promotion

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Advertisement on TV, on internet, through newspaper, magazines, hording and promotion

through brand ambassadors:-If an advertisement is to communicate effectively, the receiver must

get half want it to, and be prepared to take step toward the sender.

POSITIONING OF CADBURY DAIRY MILK

In the 1970s consumers were ready to pay “more for more”, and luxury goods flourished.

Today’s consumers demanding “more for less”. Some of today’s most successful companies

recognize those customers are more educated and able to recognize true customer value.

Positioning is simply concentrating on an idea or even a word defines that company in the mind

of the consumer. It is more efficient to market one successful concept to one large group of

people than 50 product or service ideas to 50 separate group.

"Positioning Dairy Milk as a dessert will generate more business"

The Indian palate has always been famous for the variety and quality of sweets that it contains.

No matter from which part of this vast country you belong, the taste of sweets has always been

successful in exciting your taste buds. The Indian cuisine is virtually incomplete without the

presence of sweet as the dessert. When Cadbury’s launched its campaign of “Kuch meetha ho

jaye”, it directly targeted in positioning Dairy Milk as an alternative of the traditional mithai and

in turn it made Cadbury’s as the direct competitor of a Haldiram’s, Gangurams’, Sweet Bengal

etc. It also differentiated Dairy Milk from other chocolates in terms of the target customer as a

dessert for the whole family and not only for the kids.

Hence Cadbury’s decision to position Dairy Milk as a dessert opened up new avenues of

marketing it in terms of a new target customer and instances of purchase. The most

commendable achievement of Cadbury has been its unique marketing communication through

which it has been able to position its products appropriately . The most recent campaign

launched by Cadbury is the ‘Meethe mein kya hai?’ campaign. This campaign clearly intends to

portray Cadbury Dairy Milk as an alternative to the dessert or the traditional Indian sweet. This

move has been taken up with a very clear intention of pepping up sales by competing with the

traditional Indian sweet.

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7.2. KIT KAT

(NESTLE INDIA LIMITED)

Nestle is a strong player in chocolates world wide but it entered the Indian market much later (in

1991) than one of its global competitor Cadbury. . Nestle ended 1997with a 41% increase in their

net profit with Rs. 74.3 crores. The net sales of the company amounted to Rs. 1425 crores, which

is an 18% increase over last year. Out of this, chocolates had a 31% increase in the sales

turnover.

The History of Kit Kat

KitKat 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 licence 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. Single fingered larger Kit Kat Chunky bars are also popular. The traditional bar has four

fingers which each measure approximately 1cm (0.39 in) by 9 cm (3.5 in). A two-finger bar was

launched in the 1930s, and has remained the company’s best-selling biscuit brand ever since. Kit

Kat bars are produced in 13 countries by

Nestlé: UK, Canada, Australia, SouthAfrica, Germany, Russia, Japan, China, Malaysia, India, Tu

rkey, United Arab Emirates, and Bulgaria. Kit Kat bars in the United States are produced under

licence by The Hershey Company, a Nestlé competitor, due to a prior licensing agreement with

Rowntree. During the First world war and the Second world war the company grew significantly,

eventually expanding its offers and products beyond condensed

milk products and infant/baby formula products. Today Nestlé

has a large variety of products to offer like infant food, ice

creams, chocolates, and beverages like coffee and bottled water.

The product of Nestlé that has been chosen to work on for this

company project is Kit Kat.

KEY ELEMENT ABOUT NESTLE

World’s Largest food Company

Founder: John Heinrich Nestle in the year of 1967

Present in all countries

456 factories in 84 countries

Strengths:

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Market leader in coffee and baby food sector

Well-established distribution network extending to rural areas.

Strong brands in the FMCG sector.

Low cost operations

Large product portfolio.

Weaknesses:

Low presence in health drinks: - In comparison to Bournvita, Horlicks and Boost the

market penetration of MILO is very low.

Low Market Share in chocolates as compared to Cadbury’s.

Didn’t get the first movers advantage.

Initially the distribution focus had been on the larger cities and urban

areas, which limited their customer base.

7.3. 5-STAR

5-STAR a (better) version of Mars from Cadbury (now Kraft Foods), which

is extremely popular in India. Indeed, because of its spectacular market share

Mars and other foreign brands couldn’t stand for long in the Indian market – and this wasn’t due

to flavors or prices.With over 40 years of being a favorite of the Indian consumer, 5 Star still

continues to be what it was back then – a novel concept in the chocolate world! Launched in

1969, 5 Star soon became the star of every refrigerator and pocket; people could not resist biting

into one. What made 5 Star so irresistible was the unique combination of chocolate, caramel, and

nougat that set a new revolution in the making of chocolates. Never before had people bitten into

something so chocolaty and deliciously chewy at the same time! 5-star has been such a success

in India that it would soon sweep the taste buds of other countries populations. It is an incredible

example of localization of international companies – understanding Indian flavors, desires and

mentality when choosing chocolates – they have to be closer, popular, and tasteful.

In 2005, to revive the market Cadbury relaunched 5 Star (with more golden!) and also brought a

new variant – 5 star Crunchy for the chocolate lovers. It is the same taste with a crunch now.The

variant was such a run away success that 5 Star’s market share jumped by almost 50% post it’s

launch!

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5 STAR is the second largest brand in chocolate.

MARKET POSITIONING

What makes 5 star so popular – the second largest brand in chocolates ?

To a great extent, it is about the marketing.

Walk into any local mart across the country and a golden bevy of chocolate beauties will arrest

your eye! One of the key properties that Cadbury 5 Star is associated with, is its classic Gold

color. The unique packing became the brand image of 5-star.

The 5 satr taglines were also alluring and unique:

“deliciously rich, you’d hate to share it”

“‘lingering taste of togetherness”

“Soft and Chewy 5 Star”

“Get lost”

It was always showing the desirability of the product. One of the unique features for 5 Star’s

popularity is the delicious dual (5 Star is an exemplary combination of Chocolate & Caramel) eat

experience that it provides to the consumer.

7.4. Bar One

Bar One is a brand of Nestle for around two decades. The brand recently got

some attention from the owners and its future is being rewritten. Bar One was

launched in India in 1991. The brand when launched was positioned as an energy /snack bar-

something that you can eat in between times.

Bar One initially was well promoted by Nestle so much so that at one point in time, Bar One had

a market share of around 5%.But Nestle's attention soon shifted to non-confectionery items and

Bar One was pushed aside in terms of strategy and investment.

One of interesting the old Bar One jingle:-

Nestle Bar One Ba Ba Bar One

For those in between times ......

Later the brand had the tagline " Get More Out of Life "

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Bar One in terms of brand competition competed with Cadbury 5 Star. 5 Star had tremendous

brand power during the nineties and Bar One could not hold out with the competition. How ever

Nestle did not kill the brand but put it on the sidelines. The interesting part is that the brand was

available in the retail outlets even when the brand was silent in the media.

POSITIONING STRATEGY

The earlier packaging was dull compared to the 5 Star's golden packaging. The package for

confectionery is significant because this is a product that is bought impulsively and the

packaging conveys a strong cue for the purchase. In 2010, the brand was relaunched with a new

packaging and price. The new packaging is bold and lot of golden color splashed across it. After

a long while, the brand had a reasonably attractive packaging. The relaunch also saw a new

positioning for the brand. The brand sadly messed up on the positioning in the relaunch also. The

brand came out with very poorly executed campaign positioning Bar One as a chocolate that will

attract girls !!!

The brand now has the tagline " Kaafi Hai " meaning " Its enough ". I really don't understand the

connection between the brand and the tagline.

The product, packaging and communication have been revamped. The re-launch campaign,

which has the tagline, 'Kaafi Hai', targets college-goers.

Nestlé Bar One is available at price points of Rs 5 and Rs 10, and this new thrust is further

strengthened by revamped packaging which is fresh, youthful and premium.

Bar One has now returned from the back-burner with a campaign titled 'Kaafi Hai'. The catch-

phrase bears a double meaning. At the surface level, the message is that the chocolate is loaded

with caramel and nougat, and is, hence, filling enough. At a deeper level, the brand encourages

youngsters to be themselves, as that would be enough (kaafi hai) to impress the opposite gender.

TARGET MARKET

The target group thus comprises young, college-going boys and girls. There are three TVCs in

all, two of which focus on a guy impressing girls; and one where guys are at the receiving end of

female attention.

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7.5.MUNCH

Munch is one of the largest brand in the chocolate based confectionery segment in India. It is

also the largest selling SKU in the industry. Munch was launched in 1999 by Nestle to counter

the brand Picnic from Cadbury. But now Munch survived and Picnic is dead.

Munch is any time consumption product. The product is a wafer layer covered with delicious chocolayer. The brand is positioned based on its taste. Munch uses the tagline "Can't Stop Munching" to promote its taste as the USP. In 2004, the brand roped in the Bollywood actress Rani Mukharjee as the brand ambassador. The brand is promoted heavily across the visual media. The company has also invested heavily into the brand which has reaped rich rewards.

POSITIONING:-

Munch is positioned as a tasty brand. The brand is a result of the intense war between Kitkat and

Perk. When Kitkat was launched, Cadbury launched Perk to flank its flagship brand Dairy Milk.

The war between Kit Kat and Perk resulted in a stalemate and the category itself became

stagnant. Then Munch was launched by Nestle as a price warrior. At Rs5, the brand became a

blockbuster success cannibalizing Kit Kat and forcing Perk to launch a low priced variant.

The prime factor behind the brand's success was the price factor. Rs5 always excited the

customers to make that impulse purchase.

The quantity was just right for the price and parents will have a feeling that kids are not eating

too much chocolate.

Munch is brand which has been innovating to keep the excitement going. Munch earlier had

come out with a Coconut variant. Another major innovative variant was the Munch Pop Chocs.

Pop Chocs are chocolaty nibbles in the form of wafer cubes.

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8. BIBLIOGRAPHY

1. Kotler, Philip. "Marketing Management" Analysis, Planning, Implementation, and Control

Prentice-Hall, Inc. Eighth Edition

2. Internet Sources:

en.wikipedia.org/wiki/Chocolate

www.business.com

economictimes.indiatimes.com

www.cadburyindia.com/

www.nestle.co.in/nestle_india_landing.aspx

www.barone.co.za/products.aspx

fitho.in/health/munch-chocolate-india

www.india-today.com/btoday