Introduction to the assignment
Marketing is about understanding the customer and ensuring that products and services match existing and potential customer needs. Marketing is also about looking at ways of influencing the behaviour of customers.
Marketing is essential to the success of any business. Its primary aim is to enable businesses to meet the needs of their actual and potential customers, whether for profit or not. If a business’s marketing is to be successful, it must:
; Understand customer needs
; Understand and keep ahead of the competition
; Communicate effectively with its customers to satisfy customer expectations
; Co-ordinate its functions to achieve marketing aims
; To be aware of constraints on marketing activities
The product that I am doing is Cadbury’s dairy milk, which is a chocolate bar. I am going to change the product and market it my self for it to be more successful in its market. Cadbury’s is a major product that is known by all over the world. The Cadbury’s company is a very large company, which is expanding and producing chocolate and other variety products to different countries. Cadbury’s also makes different beverages like Coco powder, Cherry coke and Sprite. But Cadbury’s also has a big competitor, which is Nestle even though they are not doing as well as Cadbury’s.
Even though the product is successful I am going to be changing it and making it more exciting product and making it user-friendly product.
In this assignment I am going to be describing the principals of marketing and explaining how they are relevant to my strategy, primary and secondary research on how I used them both in my marketing strategy. I am going to say how my strategy was affected by marketing and marketing research, how external influence have affected the development of my marketing strategy. How the internal and external influences are linked in the development of my strategy. Lastly I am going to check that I have enough information collected for my marketing strategy.
Introduction to Cadbury’s
In 1824 a young Quaker, John Cadbury, at the age of 22 opened a shop at 93 Bull Street in a fashionable part of Birmingham, England. This one-man business, trading mainly in tea and coffee, hops, mustard and a new sideline cocoa and drinking chocolate which was to be the foundation of Cadbury limited, ‘The first name in chocolate’. Today one of the largest producers of chocolate.
Cocoa and drinking chocolate had been introduced into England in the 1650’s and had remained a luxury enjoyed by the elite of English society. Customers at John Cadbury’s shop were amongst the leading prosperous families of Birmingham who were the only ones who could afford to buy cocoa and chocolate in those days.
In John Cadbury’s days most of the cocoa beans were imported from South and Central America and the West Indies, while today Cadbury buy their top quality beans mainly from Ghana and also from Malaysia.
Cadbury’s is known as an international name.
Cadbury’s dairy milk chocolate is one of the major success stories of Cadbury business. Cadbury’s dairy milk was first introduced in 1905, with its unique flavour and texture is a firm favourite all over the world.
When Cadbury’s dairy milk chocolate was first introduced to the market in the early 1905 it made an immediate impact, quickly becoming the market leader. A success story that has continued to this very day.
Milk chocolate is had been very coarse and dry. There is now a great deal of competition in the UK from Swiss manufactures, whose milk chocolate is re new red. George Cadbury jnr sets out to meet this challenge.
Cadburys also manufacture’s soft drinks, drinking chocolate, and cocoa. The drinks that Cadbury’s make are 7up, Dr paper and Orangena.
70% of the total confectionary market is chocolate and Cadbury’. Brown tree or mars manufactures all but 7 of the top 50 brands with many of the top favourites being long- established brands. Cadbury’s continues to the No 1 UK confectionary manufacturer with its position being further strengthened by both organic growth and acquisition.
Over 90% of the population eat confectionary and 75% eat chocolate at least once a week, giving the UK highest consumption of chocolate per head in the European Economic Community.
Cadbury not only manufactures chocolate and chocolate related products. They are also involved in packaging and marketing of their goods. This is important to them, as their unique selling point is that people are able to recognise the purple and gold as Cadbury’s unique corporate colours.
Cadbury royal purple and gold were firmly established as the Cadbury corporate house colours by the early 1920s. When milk tray was launched in 1915, purple was used for the pack but it wasn’t until 1920 that purple and gold colours were used in the pack design for the flagship brand of Cadbury’s dairy milk.
The main activities of the business are that of buying cocoa beans from Ghana in West Africa and roasting the bean in order to separate the cocoa powder and chocolate.
The diagram bellow shows you the production and procedures of Cadbury’s dairy milk.
The cocoa powder is then mixed with sugar and milk in order to make chocolate or plain chocolates, which have filings. The plain cocoa is used to make coca powder to make bedtime drinks as Bournville or Cadbury’s drinking chocolate or Cadbury cocoa.
Cadbury’s produces special occasion chocolates and take pride in their presentation packages. Cadbury’s has a factory and many different administrative and distribution departments. All these departments need to work together in order for the products to be delivered to the customers.
The major departments are: Sales and Marketing, Personnel, Finance, Operation and Projects, Production Packaging and Reception. Cadbury’s also has exhibition, which helps to inform the general public about their history and product, which shows them how the chocolate was made.
Cadbury’s has a fleet of lorries, which are also used for, through the country on motorways to promote and advertise Cadbury product.
Most of the staff employees are specialist in their own field, e.g. the artists who designs the packaging, the people who make the hand made chocolates and staff who manage the workers on the production line.
In the UK manufacturing business is declining but food retailing is growing. This is because Cadbury’s is manufacturing for the food retailing business, which has a strong place.
I made up a questionnaire, which will help me to make this product successful in the market. I gave out 20 copies of the questionnaire to people to fill out. I will receive in what customers in Cadbury’s and by receiving this information I can fulfil their demands as well as making my product popular. Here some of the statistics information I have received.
Looking at this chart I can see I am going to have to produce an enormous amount of Cadbury’s in order to meet the demands as my survey indicates that 35% out of the 20 I people interviewed buy Cadbury’s everyday. This shows a high percentage of people buying chocolate. This means that demand will be very high as long as the price is right. As long as I have an accurate price and good promotion the new Cadbury’s dairy milk should do well in the market. Although I anticipate this product will do remarkably well, bust if does not meet customer’s exceptions the competitors such as Nestle might get more attention than my product would get.
This chart suggests that 11 people out of the 20 people I interviewed said they would pay 30-50p for the new improved Cadbury’s. This is an acceptable price cause it’s cheaper. This is a customer price and I think the product will sell because as long as people eat chocolate and the product is promoted widely and largely. Another reason why I think this is an acceptable price for Cadbury’s because it’s an average price, which would sell, and they can receive an acceptable amount of revenue to break even. The Company Cadbury’s would not have any problems but only one problem can occur about this price which is when demand gets too means then they have to put the price higher to break even cause there will be money lost, making the new improved existing product and also there would be running cost to pay for.
Looking at this chart I can see the new product has every chance of doing well, because out of 20 people 10 would like to try Cadbury’s dairy milk with crunch bits. This is very promising as my new product will be dairy milk with crunchy bits. As I am promoting this new product locally and nationally it will have no problems selling in the market.
Looking at this chart I will be selling my chocolate in newsagents where I gave out the questionnaire because most people buy their chocolates in a newsagents. But I will still be stoking it everywhere else like supermarkets, school and colleges, because as this product is going to be sold worldwide it might be different elsewhere.
That is my primary research, which is the questionnaire.
Task 1: A) Primary and Secondary Research
There are two types of market research, which are primary and secondary. When I did my market research not only I researched the size, location and the customers attitude but I also researched the organisations activities such as pricing, selling and advertising.
In this task I have collected primary and secondary data about my chosen product, which is Cadbury’s Dairy milk. The reason I chose this product was because I noticed that this brand was one of the popular brands in the retail outlet and that a lot of people were buying the product, which I thought, would be easier for me, when I carry out my market research.
Primary research can also be called field or original research which I gathered using questionnaire. Primary research is the most valuable method of researching as I am collecting original data in the market place, which is done by fieldwork where I ask consumers surveys about Cadbury’s.
My primary research is mainly from questionnaires, I asked consumers about Cadbury’s interviews and telephone conversations. The questionnaire provided me with several different information on the product of Cadbury’s, such as:
> Factual information
> Opinions of consumers
> Their judgement of the product
I telephoned Cadbury’s and interviewed them over phone and the response I got from them was very useful research and it was effective. Though I wished to have a face-to-face conversation with the company but as the branch was out of London, I had to phone them instead but it gave me an experience on interviewing over the phone as I got the answers straight away.
When I was designing the questionnaire I made sure that:
; The language I used was simple straight forward and easy to understand
; The questions were not personal, misleading, or ambiguous in anyway.
; It was not time-consuming task to complete the questionnaire.
The language I used in the questionnaire was informal and I used a mixture of open and closed questions. The reason I chose to use both is to find out the consumers opinions because it’s important what they think as it will help develop a high quality product and make sure it has all the things they want, which will attract them to buy my product.
The most common primary research resources are:
* Social surveys:
o Questionnaire surveys
o Interviews: informal or structured
* Participant (overt) or covert (masked identity)
> Quick and cheap if your sample is small
> Allows generalization to a larger population
> Verifiable by replication and re-questioning of interviewees/respondents
> Coding enables multiple comparisons among variables
> Using a large sample can be time-consuming
> Closed questions may constrain the data (pre-empting a richer range of response)
> Respondents may interpret the questions differently. This makes comparison of the answers difficult
> It is impossible to check if people are responding honestly
Secondary research can also be called Desk. This is when I gathered information that already exists; this method of research can also save time and money for the company researching. The only problem with this kind of method is that the information already available can be out of date. The secondary data I collected about Cadbury’s is from the website of Cadbury’s.
When I carried out my secondary research I was very sensitive to what I was reading this is so I wouldn’t get information that I didn’t need or information, which were wrong. First I did a list of the type of information I needed and then went to the library and the Internet to find out the data I needed on Cadbury’s. The only problem there is with the secondary research is that sometimes the data is out of date.
There is a wide range of resources available for secondary research: the most well known are:
; Published statistics: census, housing and social security data, and so on
; Published texts: theoretical work, secondary analyses by ‘experts’ and reports
; Media: documentaries for example, as a source of information
; Personal documents: diaries
; Cheap and accessible
; Often the only resource, for example historical documents
; Only way to examine large-scale trends
; Lack of consistency of perspective
; Biases and inaccuracies can not be checked
; The concern over whether any data can be totally separated from the context of its collection
There are two ways in which you can collect the data you need, e.g. quantitative and qualitative.
Quantitative is when research is collected in numbers, e.g. recording the numbers of Cadbury’s dairy milk being bought by customers, the number of outlets stocking the product etc. this method is easily collected and analysed as it can be done quicker and easier on the computer.
Qualitative research is when information is collected on the customer’s opinions and view of the product of organic. The disadvantage of a qualitative research is the questions asked tend to be open ended therefore the response of people will be long and chatty.
Desk research is a good starting point of researching, this is because the information is available to get but you just to find it. This saves you time because the data you want is out there but in a primary research the data is not available and you collect it newly and freshly from the customers about their opinions and views on your chosen product. There are several different sources you can use to find secondary data on the chocolate, e.g. from their website, books, and other ways in which you can get in contact with the company such as e-mail, letter and telephone.
Internal sources is data which is available within the organisations, e.g. at Cadbury’s they have internal data about there record of the amount of chocolate sold to customers, and how often they are sold in retailers. Other internal data’s, which can be available, for example accounts: i.e. the company Cadbury’s profit figures and sales figures of the product.
External data is when data can be collected in the government publication, for example, in government agencies and office for national statistics etc.
But there are other useful source, which may be used, for example newspapers and the Internet, because Cadbury’s is well known company and it has its own web site.
Market research is also external source of data where the company does a survey to find out the views and opinions of customers.
The reason why primary and secondary research is important is because once you find all the information you need it will help you with your marketing strategy. For example the graphs gave me the indication that there is a lot of people who drink Cadbury’s. But you cant rely a lot on secondary research because it might be out of date information and not reliable depending on where you got the information, if you get information from the government statistics it will be very reliable. Primary research is more important because the information you get is fresh and very helpful depending on what type of research you carried out.
Task 1: B) Explain how marketing and market research have affected your choice of strategy
My marketing and market research could affect my strategy very much. For example I have to look into the PEST analysis, which could help me in the future because it is going to state the parts where my product could have problems. The other research I did was that you have to look into the SWOT analysis, which is important to your product cause it is going to show you different stages of the product life. The research I did of doing a questionnaire helped a lot because I didn’t know I had to stock most of my Cadbury’s at newsagents. The reason why it affected it in that way was because I thought I was going to be putting most of my Cadbury’s in super markets but instead the questionnaire has shown that most people buy their coke in newsagents. Most of the things that I found out in the questionnaire are what I expected such as the price customers would pay.
Task 1: C) Show how you used wide range of relevant information for your strategy
I have used a wide range of information for my strategy. The information I have used is my class notes and books such as the business studies book. I also went to the business library to get more information about the company Cadbury’s. When I went there I got the annual report of Cadbury’s and some facts about the business. I also did a questionnaire to help my strategy. So basically I used a wide range of information to help my strategy.
The table below shows the wide range of information I have used.
Reason for choosing this source
To gain general information on marketing.
The book has generic information on marketing.
* Out of date information
* Irrelevant to the product itself.
To gain information on confectionary market in the UK.
* The CD-Rom has facts and statistics of confectionary market.
* Easy to use
* Out of date information
To gain information on Cadbury’s and marketing.
* Easy to use
* Out-of-date information
* Un reliable
To gain information on Cadbury’s financial matters.
* Up-to-date information
* Irrelevant to the product
To gain customers opinion on Cadbury’s.
* Can be time consuming
* It’s impossible to check if people are responding honestly.
To gain historical information on the company.
* Cheap and accessible
* Often the only resource for historical documents.
* Out-of-date information
* Time consuming
Key Note ; Mintel
To gain information on various consumers, industrial and service sector with in the UK.
* Easy to use
* Only way to examine large scale trends.
* Time consuming
* Out-of-date information
The way I know my information is correct is that I used class notes which were based on this assignment. I also know that this information is correct by getting information from books which are ‘Essentials of marketing’ and elements of marketing. To be so sure that the information in the book is correct the update the books every year. I also went to the central library to get the annual report of Cadbury’s, which gives me accurate figures and information. I also did a sensible questionnaire, which was straightforward, and easy so this gave me the customer’s information of what they like, which I am sure, that will be correct.
Task 2: A
One useful way of analysing an organisation’s external environment is by grouping external forces neatly into four areas using a PEST analysis. PEST stands for Political, Economic, Social and Technological influences. The PEST analysis examines changes in market place caused by Political, Economic, Social and Technological factors, all of which are external.
Political is things such as legal and fiscal factors.
> Government Legislation and Law: The government legislation and law affects my new strategy because the parliament is responsible for creating new laws, which all businesses must follow. These can affect the ways in which Cadbury’s market operate and so can affect other businesses. Government actions bring into play a wide range of changes to taxes. These changes then become law through a finance bill, which becomes an Act of Parliament (a new law). Here are some examples of the laws the government created to protect consumers against exploitation by producers.
* The Sale Of Goods Act 1997
* Sale and Supply of Goods Act 1994
* Trade description act.
; Taxation (VAT): VAT is lived on selling prices and is calculated at each stage of production. For example, if Cadbury’s buys a box of goods for ï¿½500 and sells them for ï¿½800, ï¿½300 has been added to the value of goods. Cadbury’s will be responsible only for the ï¿½300 worth of value that has been added to the goods when it comes to tax liability. Therefore if the government raises income taxes, for example, people have less money to spend, which affects sales for Cadbury’s when the VAT is increasing, then Cadbury’s will have to raise the price of their product so that they don’t loose any money.
Economic is things such as recession, this is when people are spending less money, which mean the companies get less profit and the sales figures drop.
> Recession: This will affect my strategy because consumers will not spend more money on the product because demand will go down.
> Income: People who have lower income tend to look for bargains, which are cheaper. But people who are upper class tend to buy quality products and expensive ones. The questionnaire I designed was for all kinds of people with whichever income.
> Interest rates: When interest rates are increased it will affect my strategy. This is because it will raise the interest rates when borrowing money from the bank. Higher interest rates discourage spending and dampen down business activity. Therefore Cadbury’s company will have to increase the price of their product so that they don’t loose money. If the bank lowers the price of borrowing, people will borrow more and spend more.
Lower Interest Rates
People borrow more from banks and
other financial institutions
People spend more
Helps to revitalise economy
Inflation is a continuous persistent rise in the general price level and is usually measured by retail price index. If Inflation increases people will pay more for the products and services. This could mean they would have to switch to a much cheaper brand. At periods like this, it’s when other cheaper dinks increase sales value. If inflation tends to occur when I am marketing my product I will have to decrease the price of my product to the same as the other cheaper drinks. This would attract customers to demand more on my product seeing that it has decreased in price.
; Employment ; Unemployment
The relationship between unemployment and demand for Cadbury’s is essential to note when considering a marketing strategy for Cadbury’s drink. If the unemployment rate is high, people have less disposable income. Seeing that Cadbury’s is not a luxury good, it might not be greatly affected. Cadbury’s belongs on confectionary market and people eat chocolate to satisfy their needs, therefore, my product tends to be income inelastic. The only affect it could have on my product is the fact that customers could switch to cheaper brands. If the unemployment rate is low, it means more people are in employment, resulting to greater expenditure levels. If unemployment rate rises, I will have to base my marketing strategy on other features like flavours, taste and etc may be these points could help motivate my consumers to purchase my product.
Social is the life style and habits of consumers. These days people are living longer because of the improvement of medication and doctors, therefore people will carry on buying goods and products.
There are many social and cultural changes taking place in society. My product will not be affected by the social and cultural factor.
Technology technological changes can improve and affect sales figures on Cadbury’s.
Technology is getting more and more advanced every day. This creates opportunities for new products and product improvement. If an invention of a new technology were created to help in the research and development, Cadbury’s would get a competitive advantage over its competitors. Technology is important as I am changing the packaging because the image of Cadbury’s is done on computer.
SWOT analysis examines the strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. For example, strength could be your specialist marketing expertise. A weakness could be the lack of a new product. Opportunities and threats are external factors. For example, an opportunity could be a developing market such as the Internet. A threat could be a new competitor in your home market.
Strength of Cadbury’s dairy milk
; The strength of Cadbury’s dairy milk is that is one of the popular products in retail outlet and it is very well known around the world.
> Cadbury’s dairy milk has shown year-on-year growth for many years. They are one of the worlds top four confectionary businesses. Their chocolate and drinks brand can be found almost everywhere. They are well known for supplying good products, good reputation, high level of finance and expertise.
; Cadbury’s has a large number of well-established brands, commanding a high degree of loyalty. Customers also willing to try out new brands (or brand extension), which often become well sellers.
> Very strong customer loyalty to the brand
Weaknesses of Cadbury’s dairy milk
; Cadbury’s has a high seasonal market. This is because the sales of chocolate items decrease quite significantly in the summer month, especially if the weather is hot while consumption rises during occasions such as Easter and Christmas.
> Cadbury’s suffers from unhealthy image, us it will tooth decay and rising level of obesity. Although the company has responded to this by introducing products such as low fat chocolate bars and sugar free chewing gums. Concerns still remain especially over how the chocolate is advertised,
; Cadbury’s have outlet all over and it’s hard for them to maintain required level of stock. Cadbury’s has also shortage of production staff.
Opportunity of Cadbury’s dairy milk
; Cadbury’s company can offer a wide variety of Cadbury’s product for different kinds of people with different size, flavours and packaging.
; New technology being developed will mean a re-alignment of the market sector
; Government legislation about to be introduced will enable Cadbury’s to make additional product claims
> Cadbury’s has always room for new ideas and products.
Threats of Cadbury’s dairy milk
> Cadbury’s has a lot of threat such as Nestle. Therefore the company has to compete with the competitors by using different pricing and packaging.
; Customer dissatisfaction, if the customers are not happy with the product then they will not purchase my new product.
; Usage figures suggest that customers in this sector are using these products less frequently because of health concerns
External influences affecting my new strategy are:
; The Government
The government is one of the external bodies, which affects my new strategy of flavouring. This is because the government has an interest in all businesses otherwise it would not be trying to encourage them with initiatives such as regional aid. This is because businesses create employment opportunities and pay tax. People who are employed pay tax and don’t claim benefit, which means the government gains revenue.
The government also tries to restrain and control business activities and produces legislations such as health and safety. Not only protects employees but also gives employers legal protection against unsafe action by workers who disregards safety instructions. Therefore when changing to a new flavour it costs money and when the government raise the VAT, most of the profit the company will make will go to the government as VAT which means we would not have enough money to change the flavour.
> The Suppliers
Suppliers are external influences to Cadbury’s. This is because they provide the quality goods and materials for making customer demands. It is important that Cadbury’s product sells for both company and suppliers. This is because if the new product doesn’t sell then the suppliers will not supply.
; The Local community
The local community can be very important external influence on business decisions. For example if the local community does not agree to what Cadbury’s is doing then they will make their objections to the press to try to increase pressure on the company and no organisation likes a bad publicity. Therefore, one of the prime aims of any business is to gain local community support for their activities.
Competition is very important to Cadbury’s, this is because if there are other chocolate products at the same quality of Cadbury’s and it is well known as Cadbury’s with cheaper price than Cadbury’s, then consumers are going to buy the cheapest one, therefore Cadbury’s will loose customers. So it is best for Cadbury’s to keep on the same price levels as other products, which have the same quality.
In order for Cadbury’s to become more competitive they can add more value to the product such as changing the packaging to make it look more attractive.
Cadbury’s company are always in competition with other chocolate companies, therefore Cadbury’s should always find the ways in which too look better than their competitors, but at the same time the prices of Cadbury’s product should be kept low and on the same level of other brands so they don’t loose any customers.
All customers have an interest in the business they support, but the type of interest they have will vary depending upon the business activity. Customers affect Cadbury’s because if they are not pleased or happy with the goods, products or services Cadbury’s provides for them, then the customers will not purchase anything from that particular organisation. They will also pass remarks to others, which will increase pressure on the business. Therefore the business will not be able to sale or make profit. They will not be able survive as a business or expand.
Cadbury’s should look after their customers by listening to their view and meeting their need to keep them happy so they can keep on buying the products. Therefore Cadbury’s has a lot of competition, for this reason Cadbury’s must take care of their customers by producing new flavours, size, and packaging and not to ignore its customers.
I believe that a successful business, which identifies customer, needs and wants and works hard to satisfy these needs and wants. Therefore, customers exercise constant pressures on businesses to make them develop, and supply, the right product at the right price in the right place.
> Pressure groups
Pressure groups affect my chosen strategy because they act on behalf of the community and represent public opinion on a particular topic, which gives the business a bad image.
Those external influences are important to my strategy in terms of achieving the best in my product. The external influences will affect my product in certain ways, which means it is very important to my strategy. For example my product depends on political issues such as tax wise because if tax is high that will mean less customers because they will have less money to spend so this is an important external influence to my strategy. It is an important external influence to my strategy because it is telling me what to expect when tax increases.
Internal influences my new strategy are:
Employees are the work force, which is employed by a business. Managers and employees are stakeholders in a business.
Task 2: A
The UK’s average per capita consumption of chocolate confectionary is the worlds second highest, at about 9 kg per year, compared to 10 kg in Switzerland.
Chocolate bars are the UK’s most purchased type of confectionary, especially amongst buyers less than 35 years old.
Due to the high level of consumption of chocolate confectionary amongst children, households with children are the most likely to purchase confectionary, since children buy only less than 10% of total confectionary sold in the UK but eat more than 30%.
The proportion of consumers purchasing boxed chocolate is relatively stable across all age groups, mainly because they are often purchased as gifts, though remains inferior amongst younger buyers.
Almost 40% of all buyers of chocolate bars purchase them once a week or more often, whereas boxed assortments are bought by the majority of consumers only three or four times a year.
The Chocolate confectionary sector is particularly concentrated between the three leading manufactures, Cadbury, Nestle and Mars, together accounting for more than 77% of the total market value in 2001.
However, their combined share has declined slightly in 2000 compared to the previous year.
Though Cadbury retained its leadership with successful brands in all the market sectors, the company faced increased competition from Mars and Nestle. The three main brands have acquired their current market share through acquisitions and brand development.
The combined market share of other specialised manufactures such as Kraft Jacobs Suchard, Lindt, and Thorntons has increased over the review period to reach about 25%.
Due to the market being highly mature and dominated by a smaller number of companies, the manufactures market position has remained relatively stable through the review period and no new entrants have gained a significant share.
The table below shows you the growth and market shares of the companies.
Cadbury Schweppes’ turn over grew by 20.6% since 2000 to reach almost ï¿½5.5 billion in 2001.
Cadbury Schweppes is presented in the confectionary and beverages markets, and is the world’s third biggest soft drinks producer with brands such as Canada Dry, and Dr paper. The company bought the Snapple Beverage Group in 2000 to expand its coverage of the soft drinks market.
The groups European confectionary division recorded sales of ï¿½1.427 million and generated sales ï¿½200 million of profits in 2001.
Cadbury’s main countlines brands are Wispa, Twirl, Flake, Fry’s chocolate cream and Turkish delight.
The table below shows Cadbury Schweppes profits and turnover from 1997-2001
Cadbury’s has a lot of competition such as Nestle and Mars. In 2001 Nestle’s Kit Kat was the leading brand in the UK chocolate confectionary market with a 4.2% market share. Therefore the UK confectionary market grew by 4.7% between 2000 and 2001 to reach a value of almost ï¿½3.7 billion.
The table below shows the market shares in 2001
Cadbury’s dairy milk
Total spend by leading companies in the chocolate confectionary market stood at more than ï¿½101 million in 2001.
Task 2: B
Another external influence, which is important to my strategy, is an economical issue for example if inflation is high customers will be expected to pay more for their products which means you will lose customers unless you put prices down. This is a very important external influence to my strategy because it is telling me what will happen if inflation is high and I can make plans to keep my customers. Economic issues is important to my strategy because it tells me the unemployment rate and the demand for Cadbury’s which will tell me how many customers will be able to purchase my product. For example if unemployment rate is high then some people will not be able to purchase my product and that means there will be less demand.
Another external influence, which is important to my strategy, is technology. Technology is getting more advanced which means I have to be competitive technology wise because other companies may be creating new products in the new technology. This is very important external influence to my strategy because it keeps me in mind to what I need to do to keep competitive.
Task 3: A
The marketing mix provides us with a useful way of looking at the marketing of products. Organisations need to create a successful mix of:
> The right product
> Sold in the right place
> At the right price
> Using the most suitable form of promotion
The Marketing Mix is made up from the four P’s and this is how is used to create a product:
Product- what the customers want to buy.
Price- this must be one that the customer thinks is good value for money.
Promotion- this is to make potential customers aware of the products existence.
Place- this must be positioned conveniently for the customer to buy the product.
If Cadbury’s gets the four P’s correct then they will be successful as it will be easy for them to attract customers.
Product is high quality oriented from the market. Products are high quality it comes from the company, originated is market based approach will reflect as you have to promote the product in the market. Companies have to take risks, as customers may not like the product. Company might not like the product if the markets to make a product people will like it is a form their market e.g. a company launched a mini disks, which failed.
Price is important because it is main source of income to the organisation. If prices are lowered for promotional reasons, the cash flow within the company will, and its long term profitably, could be seriously affected. Product prices are normally a range of prices. This varies to the number of quantity brought, the important is pricing can involve discounts, special offers, allowances and credit.
Penetration Pricing- is where a firm charges a very low price when the product is new, and is used to increase the interest from customers.
Skimming- is when firms charge a high price to make the product seem desirable to customers who have a larger income.
Destroyer Pricing- this is when firms charge prices, which they know are unprofitable for their competitors, driving them out of the market. However this is illegal.
Price discrimination- this is charging different prices to different customers for the same product e.g. petrol.
Promotion is not just advertising. Promotion is about creating awareness to public relation. There are different types of sales promotion that trade invalid of what attracts when, why and who? E.g. advertising on the Internet is a form of promotion another form is word of mouth.
A business when planning its marketing will ask a number of question relating to the place i.e. which outlet should we sell the product? Place or distribution policy is a massive complex decision area that helps these problems.
Task 3: B
My four P’s are based Cadbury’s dairy milk. I am launching a new improved product and here are my four P’s.
I am going to improve an existing product by adding a new flavour. In order for the new product to be successful I will need to launch the product accurately with the right needs from the research I have done. My new product will be redesigned for the customer’s satisfaction. I will also change the size and packaging so it wouldn’t get mixed up with the old product. The reason for this change emerged from my primary research, which is questionnaire.
> Packaging: the packaging of my new product will definitely need to change as I have found out from the questionnaire. The packaging will remain the same colour the only difference would be it will have longer name.
> Colour: the colour of my new product will stay the same, which is light purple. I chose to stay with the same colour because it’s attractive and eye catching. And also because Cadbury’s main colour is purple therefore the customers know the product is new and improved from the same company.
> Name: the name of the new product is going to be ‘Cadbury’s dairy milk with crunchy bits’ to indicate new product from Cadbury’s. as I have found out from the questionnaire. I gave customers a list of options in my questionnaire to what they would like try in the future and the response I got was Cadbury’s dairy milk with crunchy bits. As it is similar to the existing one, the only difference would be the name and size. The size will be 35g.
; Image: the image will need to look elegant and attractive. So it could attract all sorts of customers.
Advantage: the advantage is that it’s small and easy to carry.
Disadvantage: the disadvantage is that it will cost a lot of money to improve the existing product.
Quality: the quality of the new product will remain the same as the original Cadbury’s dairy milk. This is because customers associate Cadbury as a high quality product.
; The new improved product will have customer service help line and address of Cadbury’s company. This is because if customers have any complaints they can write or call the company.
> If the customers are not happy with the new product then is guaranteed they can return with a full refund, which will not affect their statutory rights.
> If the customers want to find out about the new product or any other existing products then they can write or call the company. The information will be on the back of the package such as Cadbury’s website www.cadbury.co.uk.