Part 1 Marketing concept

The history of confectionery industry and its development is an intriguing one. The chocolate bar as we see today came in the market in 1840s. Fry and later Cadbury was the first companies who brought chocolate bar in the market. A number of changes in the confectionery produced and delivered chocolate in its current form. Prior to 1800, the only product produced under confectionery industry was the fatty chocolate drink that was prepared from the complete coca bean. Van Houten from Hollan who first invented cocoa press in 1828, which removed a portion of cocoa fat from the bean. It was then available in the form of powder with nearly 23% fat (Minifie 2012).

The founder of Cadbury Company, John Cadbury first started the company in 1824 as a grocery store in Birmingham. He then sued to sell cocoa and self made drinking chocolate in his store. He then started a manufacturing business in 1831. By the year1842, he was producing and selling more than 16 chocolate drinks and 11 varieties of cocas. The face of Cadbury changed forever in 1847 with the introduction of chocolate bars, as we know it today. Ever since, varieties of new types of chocolate bars were introduced to the customers around the world. It was 2012 when Cadbury merged with Mondelez International family and in 2016, the company had a net sale of $12,900 million USD which positions them in the second place in the international industry after Mars Inc. (Cadbury. 2017; Icco.org. 2017).

The first part of the report critically evaluates the marketing management of Cadbury, while the second part is comprised of the evaluation of the company’s external environment. Final part of the report identifies the opportunities and threats of the company in order to increase profitability, market share and the sustainability.

Armstrong et al. (2015) in their book “Marketing: An Introduction” stated that organizational success is dependable on the successful evaluation of the market and orienting their strategies accordingly for gaining success over the competitors present. Cadbury has thoroughly examined their market and oriented their products and services that resulted into the success of the organization. A detailed description of the marketing management of Cadbury is presented below:

According to Azizi, Ghytasivand and Fakharmanesh (2012) internal coherent is the key to the external success. Internal marketing has direct impact on the internal brand equity and brand orientation. Hence, it is necessary to identify the internal strengths and weaknesses of Cadbury in operating in the international market. The internal factors that actively takes part in the process are resources, capabilities and core competencies.

Internal Marketing

Resources – As opined by Winston and Cahill (2012) both tangible and intangible resources and brand reputation are necessary for a company to endure competitors’ challenge and hold their position in the market. After the collaboration with Mondelez, the company has successful enhanced their financial, physical and human resources. Moreover, the company has a high human intellectual resource and brand reputation to hold the top most position in the market.

Capability – Goetsch and Davis (2014) in their study demonstrate the importance of organisational management for attaining the capabilities to demonstrate a high-level if performance for getting prosperity in their venture. Cadbury’s partnership with Mondelez provide them a great deal of strength for competing in the international market. Company’s resources, strategic management and core competencies enables them to enjoy strong capabilities to endure external market challenge.

Core Competencies – Espinoza and Ukleja (2016) vouched for the importance of core competencies in the organisation for becoming an effective competitor in the market. They have identified a number of core competencies that can have significant effect that are branding, value, culture, technology, distribution, sales and many more. Cadbury in collaboration with Mondelez has attained apprentice in a global level that is unique in nature. It enabled them to redirect their value and culture that give them advantage over their competitors.

Gordon (2013) indicates that the organisations should integrate social marketing concept in the process of recognising the requirements of the target market for delivering the desired products to the more efficiently to their customers enhancing both customer and society’s well-being. Cadbury has a strong CSR policy that address both social land environmental issues around the world. Their production and supply chain follows the energy preservation and minimises the wastage of non-renewable resources.

Sirgy (2015) argued that the product delivered by a company should synchronise with the consumer’s image. It means company needs to identify and deliver the products desired by the target segment instead of delivering products they seek to sell. Consideration of this concept could be found in Cadbury’s product line as it has a wide range of high quality products addressing the needs of every economic group.

The concept of production marketing circulates around the high productivity and affordability as the customers tends to look for the product that is easily available in the market in an affordable price (Armstrong et al. 2015). Cadbury has a high production of their wide range of products, which is also available in the target market in affordable price for customers of all economic groups.

Social Marketing

Marketing orientation as described Armstrong et al. (2015) is to recognise the customer needs after a through study with the help of marketing mix. Marketing team of Cadbury regularly examines the market for the changed needs of the target customers and modify the products accordingly to the customer’s need.

As opined by Christopher, Payne and Ballantyne (2013), relation marketing is a part of value creation and that seeks to build long-term relationship with the customer and increase customer loyalty. Cadbury is the second best seller in the confectionary industry and preferred by the majority of the customers due to the intense use of relationship marketing. They have combo products addressing the religious festivals or other events that touches the customer’s emotion. This is just one example of value creation used by the company.

External environmental analysis enables the organization to form a solid idea about the environment they are working or want to expand their business. For the existing business, the external environment can have both positive and negative impact on the organisation. Different tools are present to conduct environmental analysis.

Porter’s five force model is a tool used for identifying the market threats that can significantly affect the business organisation is an given market. This market analysis tool was introduced in 1980 by Michael Porter. It will be used to analyse Cadbury’s target market and identify the strengths of the company (Dobbs 2012).

PESTLE analysis is a general approach to study the external macro environment of the company in which it is operating. It enriches the company with a general overview of the political, economic, social, technological, legal and environment condition of the target market that helps the company to determine suitable strategy for operating in the market (Yüksel 2012).

Opportunities

• Emerging market in he developing countries
• Constant market analysis enables them to modify the products accordingly over time to maintain market share
• Increased technology cuts down the production cost.
• Expanding their factory in the developing countries will also reduce production cost
• Market share increased with the tie-up with Mondelez

Threats

• Threats from its competitors like Nestle, Mars, Hershey’s
• Public health concerns
• Constant climate change due to global warming reducing the cocoa productivity
• Threat of substitution form other products
• Brexit imposes political and economic threats to the company

Market segmentation is the building block of marketing theory. According to Wedel and Kamakura (2012) it is the identification of the target market and recognising the potential target population. Three primary segments are identified by Cadbury for their products that that are:

Hanlon (2013) defined targeting as the process of identification of the possible segment where organisations can better sell their products. Targeting is based on the segmentation outcome. Primary target for their Bournville product should be 18-35 age group with high purchasing power in the developed and developing countries. It is for the people who likes rich essence of chocolate.

Positioning is the strategy of placing the product in the market to attract the target customer segment. The strategy varies accordingly with the target customer group. Cadbury positions their product as high quality high price in the market as it targets the customers with high purchasing power.

Product Orientation

4Ps of marketing mix decides the product, price, promotion and place for the organization. It is a useful tool for positioning the product in the market (Khan 2014).

Cadbury developed its product Bournville focusing on the population who loves quality chocolate with the essence of richness of cocoa. Different flavours of Bournville would address the population will different taste.

Cadbury is promising to deliver the product the customer seeks in the market. It is made with richness of cocoa that increases the pricing of the product making it available for the high-end customers. As the company will be re-launching the product, it will be wise to increase the price along with the quality. The increased pricing will direct the customers to think of the modified high quality of the product. Limited inclination of the price will ensure increased customer base (Hinterhuber and Liozu 2012).

Bournville will be made available in every customer segment Bournville operates. It will be distributed through wholesalers, retailers, supermarkets and shopping malls to address the 100% of it target segment (Satit et al. 2012).

The company should focus on its social media marketing for Bourneville. The target age group are likely to be present in the social networking channels, which will be beneficial for the company. It will also reduce the cost of promotion to a certain extent. The company should use the push theory for promoting the product re-launch in the market (Dawson and Henley 2012).

Conclusion

Internal and external study is made to formulate idea on the existing overall condition of Cadbury in the market. The study also help in identification of the possible opportunities and threats the company is facing that in turn helped in determining the promotion of their product. The company should re-introduce its Bournville products and make it available worldwide with all its available flavours. STP and marketing 4Ps was finally used for targeting the customer segment in the market. Re-introducing of the product with some new essence will engage the existing customer to reconsider the product. Furthermore, their new promotion, pricing and placement will help addressing the new customer group of customer who share viewpoint as the existing ones. This will ensure the profitability, sustainability and increase market share.

References

Azizi, S., Ghytasivand, F. and Fakharmanesh, S., 2012. Impact of brand orientation, internal marketing and job satisfaction on the internal brand equity: The case of Iranian’s food and pharmaceutical companies. International Review of Management and Marketing, 2(2), p.122.

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.

Cadbury (2017). Bournville. [online] Available at: https://www.cadbury.co.za/Home/Products/cadbury-bournville?p=5218&provider={D193998A-4A6D-4EA5-BAA8-209357B27A09} [Accessed 19 Oct. 2017].

Cadbury. (2017). The History of Chocolate. [online] Available at: https://www.cadbury.co.za/the-story [Accessed 19 Oct. 2017].

Christopher, M., Payne, A. and Ballantyne, D., 2013. Relationship marketing. Taylor & Francis.

Dawson, C. and Henley, A., 2012. “Push” versus “pull” entrepreneurship: an ambiguous distinction?. International Journal of Entrepreneurial Behavior & Research, 18(6), pp.697-719.

Dobbs, M.E., 2012, January. Porter’s five forces in practice: Templates for firm and case analysis. In Competition Forum (Vol. 10, No. 1, p. 22). American Society for Competitiveness.

Espinoza, C. and Ukleja, M., 2016. Managing the Millennials: Discover the core competencies for managing today’s workforce. John Wiley & Sons.

Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Upper Saddle River, NJ: pearson.

Gordon, R., 2013. New ideas–fresh thinking: Towards a broadening of the social marketing concept?. Journal of Social Marketing, 3(3).

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Hinterhuber, A. and Liozu, S., 2012. Is it time to rethink your pricing strategy?. MIT Sloan Management Review, 53(4), p.69.

Icco.org. (2017). The Chocolate Industry. [online] Available at: https://www.icco.org/about-cocoa/chocolate-industry.html [Accessed 19 Oct. 2017].

Khan, M.T., 2014. The concept of’marketing mix’and its elements (a conceptual review paper). International journal of information, business and management, 6(2), p.95.

Minifie, B., 2012. Chocolate, cocoa and confectionery: science and technology. Springer Science & Business Media.

Satit, R.P., Tat, H.H., Rasli, A., Chin, T.A. and Sukati, I., 2012. The relationship between marketing mix and customer decision-making over travel agents: An empirical study. International Journal of Academic Research in Business and Social Sciences, 2(6), p.522.

Sirgy, M.J., 2015. The self-concept in relation to product preference and purchase intention. In Marketing Horizons: A 1980’s Perspective (pp. 350-354). Springer, Cham.

Wedel, M. and Kamakura, W.A., 2012. Market segmentation: Conceptual and methodological foundations (Vol. 8). Springer Science & Business Media.

Winston, W. and Cahill, D.J., 2012. Internal marketing: Your company’s next stage of growth.

Yüksel, ?., 2012. Developing a multi-criteria decision making model for PESTEL analysis. International Journal of Business and Management, 7(24), p.52.