Semester:
WS 2012/2013
Course No.: 436.222 (VU) Wid Maximilian, Wolff Laura, Wolf Robert, Zanon Johanna
1. Case Summary
Cadbury Plc. is a multinational confectionery (chocolate, chewing gum and candy) company which was founded in 1824 by John Cadbury. In the first years, a time when only wealthy people could afford its products, Cadbury only sold cocoa and chocolate. After World War I, Cadbury started its mass production of chocolate and later was consequently enlarging the companys capabilities and portfolio via acquisitions and the creation of further products and stand-alone brands. In 2003, Cadbury made a momentous strategic marketing decision, namely to establish Dairy Milk as the Megabrand of the company, inhering, besides others, the two famous and former stand-alone brands Caramel and Wispa. Wispa consumers were longing for the chocolate bar in its traditional way and therefore protested through different social media. The management was forced to re-launch the bar; with tremendous success.
market. These factors are essential, because the importance of powerful brands, packaging and advertising are strongly valued and influencing the companys growth.
4.
As also emerged from related literature due to the conditions of the confectionery market, Cadbury follows a hybrid branding strategy with multiple brands, which means it possesses a combination of corporate brands (Cadbury) and product brands (Wispa). Dairy Milk can be regarded as a sub brand of Cadbury. It uses its Cadbury brand worldwide, but offers many product variants. Cadburys branding architecture can be seen as a result of prior management decisions as well as competition and was shaped throughout its complete history. Due to its history and past development, the company possesses high operational capabilities and access to different distribution channels. Its brands are appreciated by huge and often loyal customer bases which are spread over many national markets. The Cadbury and Dairy Milk brand should stand for tradition, a fact which also wants to be communicated via the traditional packaging. Further, it has to be evaluated how Cadbury should manage its brand architecture especially in the case of Caramel in order to strengthen its position in the multinational confectionery market.
propose to keep Caramel in the Dairy Milk range, but to modify its packaging and advertising. A packaging, which strongly reminds of the old design of the chocolate bar and advertisements, which focus on customers familiar taste and eating experience would be helpful to strengthen the position of Caramel even though it is still part of Dairy Milk. Before introducing any actions we strongly propose to undertake market analysis in order to have a clearer picture of what consumers appreciate most about the chocolate bar and which values are mostly associated with it. Concerning the general future development it is absolutely necessary that Cadbury continues exploiting market opportunities and trends. Developing regions, such as India or Eastern Europe offer opportunities to increase its sales and scope. The question if Cadbury places confectionery in these growing markets through the introduction of new product- or corporate brands or uses its existing brands is market dependent and is relative to the existing establishments of the companys brands. Sufficient market research is an important requirement for expanding into new markets, because specific cultural and regional taste preferences need to be satisfied. Also niche markets, such as low-fat, low-sugar, organic or Fair-Trade products, offer promising opportunities for Cadbury. Due to the general transition of a great number of consumers towards healthiness, we would recommend to focus on their perceptions and needs as well. We think it would be a promising strategic decision to introduce a product line which consists of low-fat and low-sugar confectionery and targets figure- and health-conscious consumers. For these niche markets we suggest to develop a seperate brand. Traditional confectionery consumers may have completely different attitudes towards Cadburys products than health-conscious consumers and therefore it is important that there is some kind of separation. In the end, regarding the Caramel question, it will be up to Cadbury themselves to weigh up competences and environment, to find out to which extent theoretical approaches should be taken into account on one side, and how important the own history and experience, development, cultural differences and customer loyalty in general will affect final decision making on the other side.
Literature
Douglas, Susan and Craig, Samuel (1999), International Brand Architecture: Development, Drivers and Design, Stern School of Business, University of New York.
Leatherhead food International (2006), The Global Confectionery Market Trends and Innovations http://www.researchandmarkets.com/reports/39940/the_global_confectionery_market_ trends_and