EXECUTIVE SUMMARY

The first chapter deals with introduction of chocolate. The chapter reveals the history of chocolate from the year 1585 to the year 1945. The chapter also helps us understand how chocolate is manufactured & what are the different types of chocolate. The chapter also reveals market share of each type of chocolate & segmentation of each chocolate. The chapter also informs about growth in chocolate market in the last 10 years. The next chapter deals with information of Cadbury chocolate. The chapter reveals the history of Cadbury, Cadburys success story in India, Cadburys industrial setup. The chapter also informs us about the strength, weaknesses, opportunities & threats which are faced by Cadbury. The next chapter deals with information of Nestle chocolate. The chapter reveals the history of Nestle, Nestles success story in India, Nestles industrial setup. The chapter also informs us about the strength, weaknesses, opportunities & threats which are faced by Nestle. The next chapter reveals the information about Amul chocolate and their success story. The chapter also reveals strength, weaknesses, opportunities & threats which are faced by Amul. The next chapter informs us about the different marketing strategies of three giants of the Indian chocolate industries.

CHAPTER 1 INTRODUCTION TO CHOCOLATE

History Of Chocolate 1585 The first official Spanish shipment of cacao beans arrived from Veracruz, Mexico, at the port of Seville. Religious leaders found them engaged in arguments about whether chocolate were a beverage or a food. Religious fasts forbade the taking of nourishment, and yet chocolate had become popular among those who were fasting precisely because it eased their hunger. Most people, including all of the popes consulted during the course of the debate (from Gregory XIII to Benedict XIV) agreed that, since one drank it, it did not break the fast. Nevertheless, there were many who took a more puritanical view, maintaining that it was far too nourishing and sustaining to be permissible. 1600 1650 By the mid-17th century, chocolate were known as a beverage in Britain. Interestingly, the appearance of chocolate coincided with the arrival of coffee from the Middle East and tea from China. Chocolate remained expensive long after the other two beverages were affordable to the middle classes, but it was one of the offerings commonly found in British coffeehouses. A tall pot was developed for serving chocolate beverages. Known as a chocolatiere, the lid had a small hole in the top where a plunger-like molinillo (moulinet in French) was fitted. 1765 In 1765 the Englishman James Watt invented the steam engine and in doing so set in motion what we now refer to as the Industrial Revolution. Around the same time in the colony of Massachusetts one of the first machine oriented chocolate manufacturing businesses was being established. The partnership of John Hannon, an Irishman, and Dr. James Baker of the Massachusetts colony formed the company Hannon's Best Chocolate. Through the use of an old grist mill, cacao beans were ground into chocolate liquor, pressed into cakes of paste for eventual use as a chocolate beverage. During a routine

trading mission to the West Indies, Hannon was presumed dead when his ship failed to return. The name of the company subsequently changed to the Baker Company. It was not until 1927 that the Baker family sold their business to General Foods. 1879 During the same period that Cadbury was developing into a formidable chocolate force, a Swiss chocolate manufacturer was struggling to find a way to combine chocolate with milk. Daniel Peter could not produce something with a smooth consistency because the milk and chocolate never mixed right. Coincidently a fellow Swiss named Henri Nestle was hard at work investigating ways in which milk could be made more shelf-stable for use as baby formula. The product of Nestle's experimentation was a sweetened condensed milk. The new milk, which had less water, was mixable with chocolate and made a product that would not spoil easily. Henri Nestle and Daniel Peter formed a company in 1879. The largest food company in the world today is Nestle. 1945 As the other countries were developing India felt the scope of chocolate and jumped in the chocolate segment. The Gujarat Cooperative Milk Marketing Federation (GCMMF) or known as Amul is an Indias largest food product marketing organisation. It is a state level apex body of milk cooperatives including chocolates in Gujarat that aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products, which are good value for money. In India Amul chocolates has a major share of the market. Today, GCMMF's Amul brand of chocolate products receives business queries from dozens of countries, ranging from the U.S. and the Netherlands to Singapore and New Zealand. For 30 odd years the Utterly Butterly girl of Amul has managed to keep her fan following intact. So much so that the ads are now ready to enter the Guinness Book of World Records for being the longest running campaign ever. Later in the same period the other foreign companies like Cadburys and Nestle entered in Indian market. So since 1500B.C. there has been use of cocoa or chocolate in various ways and was consumed which even today is used in various ways.

Preparation's Cocoa, common name for a powder derived from the fruit seeds of the cacao tree and for the beverage prepared by mixing the powder with milk. When cocoa is prepared, most of the cocoa butter is removed in the manufacturing process. After the fat is separated and the residue is ground, small percentages of various substances may be added, such as starch to prevent caking, or potassium bicarbonate to neutralize the natural acids and astringents and make the cocoa easy to dissolve in liquids. Cocoa has a high food value, containing as much as 20 percent protein, 40 percent carbohydrate, and 40 percent fat. It is also mildly stimulating because of the presence of Theo bromine, an alkaloid that is closely related to caffeine. The processing of the cacao seeds, better known as cocoa beans, is complex. The fruit harvest is cured or fermented in a pulpy state for three to nine days, during which the heat kills the seeds and turns them brown. The enzymes activated by fermentation impart the substances that will give the beans their characteristic chocolate flavor later during roasting. The beans are then dried in the sun and cleaned in special machines before they are roasted to bring out the chocolate flavor. They are then shelled in a crushing machine and ground into chocolate. During the grinding, the fat melts, producing a sticky liquid called chocolate liquor, which is used to make chocolate candy or is filtered to remove the fat and then cooled and ground to produce cocoa powder. The beans are sold in international markets. African countries harvest about twothirds of the total world output; Ghana, Cte d'Ivoire, Nigeria, and Cameroon are the leading African cocoa producers. Most of the remainder comes from South American countries, chiefly Brazil and Ecuador. Attempts by producing countries to stabilize prices through international agreements have had little success.

Types of chocolate Sweet chocolate, usually dark in colour is made with chocolate liquor, sugar, cocoa butter, and such flavourings as vanilla beans, vanillin, salt, spices and essential oils. Sweet chocolate usually contains at least 25-35% chocolate liquor content. The ingredients are blended, refined (ground to a smooth mass), and conched. Viscosity is then adjusted by the addition of more cocoa butter, lecithin (an emulsifier), or a combination of both. Milk chocolate is formulated by substituting whole milk solids for a portion of the chocolate liquor used in producing sweet chocolate. It usually contains at least 10% chocolate liquor and 12% whole milk solids. Manufacturers usually exceed these values, frequently going upto 12-15% chocolate liquor and 15-20% whole milk solids. Milk chocolates, usually lighter in colour than sweet chocolate, are milder in taste because of its lower content of bitter chocolate. Confectionery Confectionery, processed food based on a sweetener, which may be sugar or honey, to which are added other ingredients such as flavorings and spices, nuts, fruits, fats and oils, gelatin, emulsifiers, colorings, eggs, milk products, and chocolate or cocoa. Confectionery, usually called candy in the United States, or sweets in Great Britain, can be divided into two kinds according to their preparation and based on the fact that sugar, when boiled, goes through different stages from soft to hard in the crystallization process. Typical of soft, or crystalline, candy smooth, creamy, and easily chewedare fondants (the basis of chocolate creams) and fudge; typical hard, noncrystalline candies are toffees and caramels. Other favorite confections include nougats, marshmallows, the various forms of chocolate (bars or molded pieces, sometimes filled), pastes and marzipan, cotton candy (spun sugar), popcorn, licorice, and chewing gum. Records show that confectionery was used as an offering to the gods of ancient Egypt. Honey was used as the sweetener until the introduction of sugar in medieval Europe. Among the oldest types of candies are licorice and ginger from the Far East and marzipan from Europe. Candy-making did not begin on a large scale

until the early 19th century, when with the development of special candy-making machinery it became a British specialty. In the U.S. the candy industry began to grow rapidly during the mid-19th century with the invention of improved machinery and a cheaper process for powdering sugar. In 1911 the first candy bars were sold in baseball parks; by 1960 candy bars made up almost half of U.S. confectionery production. By the 1980s annual world production of confectionery totaled many millions of kilograms.

Confectionery Preparation Key raw materials for sugar confectionery are sugar (60-65% of the raw material volume), glucose, citric acid and flavoured essences. For chewing/ bubble gums, most leading MNC players import gum base. Other key raw materials include sugar, glucose and emulsifying agents. All the ingredients are mixed in a mixer and heated. An extruder converts the mixture into a long rope, which is then cooled and flattened. The gum is cut into pieces and wrapped. World over, confectionery products contain animal gelatin, use of which is banned in India. This has prevented development of categories such as jellies and superior chewing gums. Sugar Confectionery In confectionery products, retailer margin varies from 15% to 30%, including trade discount and incentive schemes. Distributor margin varies from 5% to 10%. Sales tax averages at around 10%. Freight, handling and distribution cost is minor at about 2%. Excise duty on sugar confectionery is 8%, whereas gums and chocolates attract 16% excise duty. Contribution margins vary between 30% and 60% depending upon the product. Advertisement and promotion costs are very high Organized market for sugar confectionery/gums is estimated to be 139,000 ton pa. Hard boiled confectionery and toffees account for 69%, 5% by eclairs, 18% contributed by gums (chewing gums/ bubble gums) and rest by mints, lozenges etc.

The confectionery market has undergone a metamorphosis, during the last 3-4 years. From a commodity market controlled by local players, it is changing to a branded products market with strong presence of MNC players. These MNCs Offer superior product ingredients with support of global technology Offer better packaging and ensure better distribution Invest heavily in building brands. New MNC players are trying to create Customer pull by advertisements and retail displays. Dealers push incentives by higher margins, promotional schemes, etc, on which local brands relied upon earlier, still remains the main form of marketing in the confectionery market dominated by the unorganized segment.

Product Segmentation Chocolate market can be segmented as follows Large unit's bars/ slabs,
y y y

Count lines, Panned varieties, Small value added units.

Confectionery products
y y y y

Hard boiled sugar candies, lollipops, jellies Toffees Chewing candies Breath freshners, digestives, throat relievers

Gum based products

y y

Chewing gum Bubble gum

Chocolate market Segmentation Chocolate market can be segmented into moulded chocolates, count chocolates, panned chocolates, eclairs and assorted chocolates. Type of chocolates Moulded Count Eclairs Panned Others % Share in chocolate market 37% 30% 20% 10% 3%

Others Panned 3% 10% Moulded 37% Count 30%

Moulded Count Eclairs Panned Others

Eclairs 20%

Chocolates Market Share Cadbury is the market leader in all categories with over 72% market share. Its main competitor is Nestle India. Nestle has identified chocolate and confectionery as one of the thrust areas for growth. It has launched some of its international brands like Quality Street, After Eight, and Lions in India. In 1998, Cadbury launched a new count bar Picnic. Nestle immediately followed it with the launch of Charge. Gujarat Cooperative Milk Marketing Federation (GCMMF), which is normally known as Amul and Central Arecanut and Cocoa Manufactures and Processors Co-operative (CAMPCO) are other two significant players. Both are local manufacturers. Distribution, in the case of chocolates, is a major deterrent to new entrants as the product has to be kept cool in summer and also has to be adapted to suit local tropical conditions. With removal of QRs all the major international chocolate brands especially Swiss brands would become freely available in the market.

Market Share Moulded segment Cadbury Nestle GCMMF Others 70% 23% 5% 2% Count segment Cadbury Nestle Campco Others 76% 20% 3% 1% Eclairs Cadbury Nutrine Nestle Parry's Others 49% 37% 12% 1% 1%

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Confectionery Market Share The confectionery market is highly fragmented with several players with strong regional presence. Leading national players are Nutrine, Parry's, Parle, Cadbury, Nestle, Ravalgon, Candico, Perfetti, Wrigleys and Joyco India. The entire market can be divided into 7 major categories, namely Hard Boiled Candies(HBC), Toffees, Eclairs, Chewing Gum, Bubble Gum, Mints and Lozenges. While HBCs form 51% of the entire market, 18% is formed by toffees and 18% by chewing gum & bubble gum collectively. Eclairs form just 5% of the entire market. Mints and Lozenges form 4% and 3% of the market respectively. Nutrine with a strong base in southern India has emerged as the reigning number one player in the sugar confectionery market with 24% share. Over last one year or so it has launched various products in the sugar confectionery market. It is the market leader in hard-boiled confectionery as well as toffees. It has share of 37% in eclairs market and is reigning at second position behind Cadbury's. Nutrine gets around 50% of its turnover from southern India, 20% from Eastern region and rest equally from westerns and northern region. Its biggest brand is Mahalacto followed by Asay and Kokonaka respectively. Total tonnage sold by Nutrine in the confectionery market is around 36650 tonnes. The second largest player, Parle has strong presence in orange candies (hard boiled) supported by its Melody toffees, Mango Bite and Kismi Toffee bar. Besides this the company also has brands like Rola Cola, Poppins, Peppermint etc. in its portfolio.It has market share of 16% in the total confectionery market with a tonnage of 16800 tonnes. It is number two in both HBC and Toffee market with 30% and 21% market share respectively. Parry's has emerged as the third largest player in the market with 13% market share and a tonnage of 14500 tonnes.The company has brands like LactoKing, Coconut Punch, Madras Cafe, Coffy Bite etc. in its portfolio. Though in the over all confectionery market it is at number three, it is at par with Parle in toffees market with 21% share. Cadbury has been one of the leaders with Cadbury eclairs with chocolate inside. It was the most successful in 1972 when it was launched because of its initial introductory

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price of 25 paise and was instant hit. It continues to be one of the biggest brands. Cadbury made a foray into the sugar confectionery segment with Googly, a hardboiled sweet in late 1996.Googly the tangy, fizzy candy, Cadbury took the market by surprise and marked the entry of Trebor into the fast growing Indian market. The product is sold under license from Trebor Bassett, UK. Googly was extended nationally in early 1997. Cadbury has also launched Mocka, a coffee based sugar confectionery. Nestle is a major player in the growing confectionary market. The company has brands like Polo, Allen's Splash, Soothers, Toffo Butter, and Fruit Rings, Foxs etc. in its portfolio. In recent years there has been a tremendous increase in the consumption of Fox in India. It is easily available everywhere and its cool taste is popular among consumers. It has a share of 8% in the market. Ravalgaon too is a significant player in the confectionery market. It has a share of 7% in the market with tonnage of 8000 tonnes. Some of the leading brands in its portfolio are Pan Pasand, Mango Mood, Coffee Break etc. It is third largest player in the toffee market with 11% share. Joyco's Boomer has emerged as the leading brand in the bubblegum category. Joyco pioneered the soft chew category with launch of its Bonkers. However the soft chew category has a minuscule market in India. Other brand available in this segment is Van Melle's Mentos. Perfetti has become a significant player with the success of its bubble gum Big Babol and hard boiled confectionery Alpenliebe. . Alpenliebe has also been a huge success and has become a Rs600m brand within one year of launch. Candico India Ltd , the confectionery division of the erstwhile Bakeman's Industries has been aggressively launching new brands post spin off as a separate confectionery company in April 1997. While Mint-O is Candico's largest brand, its other brands#include Candy King, Americano. Mint-O Fresh, After Smoke, etc. Candico and Joyco both have same share of 42% each in the bubble gum market.Perfetti is way behind in this segment at 13% share. In the overall confectionery market however the company has 3% share.

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Wrigley's is the leading chewing gum brand in the world. In India the company operates through a 100% subsidiary. The company initially marked its brands through a distribution tie-up with Parry's which was later discontinued. In the bubble gum segment, Perfetti has a 13% market share. Other Perfetti brands like Chlormint and Golia have not received encouraging response. The company has a 2% market share in the total confectionery market.

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Market shares in sugar confectionery market Company Market share (%) Major brands Mahalacto, Kokonaka, HoneyFab, Aam Ras, Nutrine 24 Chuma- Chuma, Gulkand, Funda, Gum Yum, Ole, Nutrine Eclairs,SuperStar, Caramella, Wild Coffy, Dishum, Aasay,Naturo, Fruit Bar Parle's 16 Melody, Mango bite, Kismi, Poppins, Rola cola, LuxDairy, Peppermint, Rosemint Coffy Bite, Lacto king, Coconut punch, Parry's 13 Caramilk, Madras Cafe, Soft-Spot, Flavoured Candy, Mango, Sunshine, Shakti, Pineapple Cadbury's 11 Googly, Mocka, English toffee,

Frutus, Gollum, Eclairs, Pops. Polo, Allen's Splash, Soothers, Toffo Butter, Fruit Rings, Fox's Pan pasand, Mango mood, Coffee break, Hisoft, Supreme, Cherries, Juicy Boomer, Bonkers, Donalds, PimPom, Mickey, Bonkers Minto, After smoke, Candy king, Americano,

Nestle

Ravalgaon

GDC/ Joyco

Candico

Orange-tutti frutti, Drum Beat, Vanilla Roll, Elaichi roll, Big Freedom, Jumbo-Gumbo, LocoPoco, Minto-Fresh

Wrigley

Wrigley's chewing gum, Spearmint, Boomer, Juicy Fruit Double mint Spearmint.

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Perfetti

Brooklyn, Big Babool, Alpenliebe, Center Fresh, Chlor Mint, Golia, Cofitos

Anticold/other OTC brands also sold as confectionery Market (%) 3 2.5 2.5 Share

Company Dabur P&G Warner Lambert

Major brands Hajmola Vicks Halls, Chiclets, Clorets

Anti-cold/OTC brands such as Halls, Vicks, Clorets, etc are increasingly being sold on the fun positioning rather than for their medicinal properties, competing directly with other confectionery brands. Halls and Vicks are available in various flavours.

Ravalgaon 7% Nestle 8% Cadbury's 11%

Others Nutrine 21% 24%

Parle's 16% Parry's 13%

Nutrine Nestle

Parle's Ravalgaon

Parry's Others

Cadbury's

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Consumer Habits And Practices Chocolates are consumed as indulgence and not as snack food, Almost 75% chocolates and 90% confectionery are impulse purchases. Chocolates are bought predominantly by adults and gifted to children. Direct consumption by adults has also increased. In contrast, over 90% of confectionery products are purchased by children between the age of 6 and 14, directly. In most cases, parents do not approve of confectionery consumption, and children buy out of their pocket money. Chocolate consumption dominance in rural areas. Confectionery consumption has a seasonal pattern. Sales peak of confectionery is in winter months from November to February. Off-take is lowest in the summer months as schools are closed and therefore children's pocket money is lower. Also in monsoon consumption falls as children are out of home for lesser time. Between February and April pressure of examinations causes lower sales. Brand loyalties are weak in confectionery products. Children look for novelty and excitement. Most purchases are impulse driven and POP retail displays (dispensers, etc) play an important role. Promotions such as stickers, cricketer/ star pictures have tremendous impact. Cross elasticity of demand - Different products amongst confectionery such as hard boiled sugar candy, bubble gum etc compete inter se and also with ice cream and chocolates. is concentrated largely in metropolitan cities.

Confectionery consumption is wide spread. The unorganized sector has a greater

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Confectionery market is extremely price sensitive. In India, 50 paise unit price has been the largest segment, followed by 25 paise segment. Re1 is considered premium pricing. When raw material prices escalate, marketers find it difficult to pass on the same due to problems of coinage, as price increase has to be in steps of 25 paise. Chewing gum consumption faces a major problem of disposal, as the gum residue has a tendency to stick. To keep public places clean, some countries like Singapore have banned use of gum-based confectionery. Consumption of chewing gum is significantly higher in the Western countries. Children consume bubble gums whereas chewing gums by teenagers and adults. In India, consumption of chewing gum has been very low due to non-availability of superior quality products till a few years ago. During the last few years, market for bubble gum has exploded. It is expected that similar growth would be witnessed in chewing gum as the current generation grows up with the habit of gum chewing. Grown up adults feel guilty about eating chocolate, akin to stealing a child's food. Now days the consumption of chocolates has even more decreased because of preparing of chocolates at house. Many people for fun sake or during occasions prepare chocolates rather than bringing for market. Women has started classes for teaching preparation of chocolates at home which is comparatively cheaper and looks good if given to guest by name of home made rather than a market chocolate. Many people has also started it as a business by selling on small scale and even selling to local shops for cheaper rates.

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Consumer trends 1. 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 2. 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 3. 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 4. Designer chocolates have become status symbols. They are linked to ones aspiration and lifestyle and malls are perfect points of sale as people usually are happy and gay at these destinations 5. 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 6. 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 7. In past, consumers had negligible inclination for dark chocolates. But now we have seen a change in the Indian palate, which is increasing the base of this sub-segment

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10-year data showing market growth of chocolate In one of the most remarkable demonstrations of acceleration, the chocolate market, after creeping up at an average rate of 6 per cent per annum between 1998 & 2000 and climbing to 9.55 per cent in 1995, suddenly raced up to 18.77 per cent in the year 2001-2003. A flurry of new launches which saw the introduction of 32 new brands, 5 brand extensions, 100 new variants and 122 new pack-sizes, added up to an unparalleled excitement in what was till then a one kind fits all product category.

10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0

9500 7600 5850 4500 3500 2100 2700

19981999

19992000

20002001

20012002

20022003

20032004

20042005

If we have to locate current position on the product life cycle we can say that chocolate is somewhere in the growth stage of the brand life cycle. This can be comprehended from the brand market shares in the past few years. The market shares of Cadbury in the total chocolate market convey an encouraging story. The market share of Cadbury in market is 70% and Nestle is having 20% followed by 5% Amul and 5% for others. It can be seen that sales of chocolate in Indian market is increasing, from the table and it is forecasted that it is growing to increase tremendously in near future. The demand in 1998-1999 has increased from 2100 to 2700 in 1993-94 and then 3500 in 1999-2000. Then the increase rate has been increased fast with 4500 in 2000-2001 to 5850 in 200219

2003 and then it increased to 7600 in 2003-2004. Then in the year 2004-2005 the growth had been upto 9500 and had been growing up since then. It is foreseen that sales growth should have approximately 16% increase in the demand by year 2008.

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Todays Indian chocolate market 1. Chocolate market is estimated to be around 1500 crores (ACNielson) growing at 1820% per annum 2. Cadbury is the market leader with 72% market share 3. The per capita consumption of chocolate in India is 300 gram compared with 1.9 kilograms in developed markets such as the United Kingdom 4. Over 70 per cent of the consumption takes place in the urban markets 5. Margins in the chocolate industry range between 10 and 20 per cent, depending on the price point at which the product is placed 6. Chocolate sales have risen by 15% in 2007 to reach 36000 tonnes according to one estimate. Another estimate puts the figure at 25000 tonnes 7. The chocolate wafer market (Ulta Perk etc) is around 35 % of the total chocolate market and has been growing at around 13% annually 8. Indian candy market is currently valued at around USD 664 million, with about 70%, or USD 461 million, in sugar confectionery and the remaining 30%, or USD 203 million, in chocolate confectionery 9. Entire Celebrations range marketshare is 6.5% 10. The global chocolate market is worth $75 billion annually

Chocolate consumption in India is extremely low. Cadbury dominates the chocolate market with about 72% market share. Nestle has emerged as a significant competitor with about 20% market share. Key competition in the chocolate segment is from co-operative owned Amul and Campco, besides a host of unorganized sector players. There exists a large unorganized market in the confectionery segment too. Leading national players are Parry's, Ravalgaon, Candico and Nutrine. MNC's like Cadbury, Nestle, Perfetti, are recent entrants in the sugar confectionery market. Other competing brands such as GCMMF's Badam bar and Nestle's Bar One have minor market shares.

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Chocolate consumption in India is extremely low. Per capita consumption is around 160gms in the urban areas, compared to 8-10kg in the developed countries. In rural areas, it is even lower. Chocolates in India are consumed as indulgence and not as a snack food. Indian chocolate market grew at the rate of 10% pa in 70's and 80's, driven mainly by the children segment. In the late 80's, when the market started stagnating, Cadbury repositioned its Dairy Milk to any time product rather than an occasional luxury. Its advertisement focused on adults rather than children. Cadbury's Five Star, the first count chocolate, was launched in 1968. Due to its resistance to temperature, the chocolate has become one of the most widely distributed chocolate in the country. In the early 90's, high cocoa prices compelled manufacturers to raise product prices and reduce their advertisement budget affecting the volumes significantly. The launch of wafer chocolates Kit Kat and Perk spurred volume growth in the mid 90's. These chocolates positioned as snack food rather than on the indulgence platform compete with biscuits and wafers. A strong volume growth was witnessed in the early 90's when Cadbury repositioned chocolates from children to adult consumption. The mid 90's saw the entry of new players like Nestle, which created categories like wafer chocolate and spurred growth.

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CHAPTER 2 CADBURYS OVERVIEW

Half a century of constant innovation, constant value addition, constant success. Cadbury India Ltd. (CIL), a part of the Cadbury Schweppes group, is India's leading confectionery manufacturer with a 70% volume share of the chocolate market. And is synonymous with chocolate in the minds of countless Indians - young and old. The company is also a key player in the malted food drink and sugar confectionery markets in the country. Today, the governing objective for Cadbury India is to deliver Superior Shareholder Value and to see the brand in every pocket, in every home.

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History of Cadbury The Cadbury story is a fascinating story of a family business that grew into one of the biggest, most loved chocolate brands in the world. A story that you will remember as the story of the real taste of life as the business grew, it was moved to a larger factory in Bridge Street in 1847. John Cadbury then took his brother Benjamin into a partnership. And the business came to be 'Cadbury Brothers, Birmingham". In 1853, the Cadbury Brothers received a royal warrant as chocolate manufacturers to Queen Victoria a royal appointment that the company holds to this day. 22-year-old John Cadbury opened a one-man grocery business in Birmingham, selling tea, coffee, hops, mustard and cocoa. To this list he soon added drinking chocolate which he prepared using a mortar and pestle. Young Cadbury had a considerable flair for advertisement, which inspired him to install a pate glass window in his store - the first in Birmingham. This along with a Chinaman in native costume presiding over the counter created quite a stir and drew a lot of attention. The growing sales and popularity of Cadbury's 'superior quality cocoa and chocolates resulted in the business shifting to a larger warehouse in Crooked Street in 1831.

Dissatisfied with the quality of products produced by all manufacturers, including their own, the brothers Cadbury took a momentous step which was to change the way the chocolate business was done in England. Following a visit to Van Houten in Holland, they introduced a process for pressing the cocoa butter from the beans to produce cocoa essence, which was really the forerunner of the cocoa we know today. This essence was advertised as - 'Absolutely Pure, Therefore Best'. From the mid 1860's, Cadbury introduced many new kinds of eating chocolate. Not only the more refined forms of plain chocolate but chocolate cremes - fruit flavoured centres covered with chocolate. These exotic chocolates were sold in decorated boxes, which Richard Cadbury with his distinct artistic talent designed. In fact, many of his original designs still exist. Elaborate chocolate boxes were extremely popular with the late Victorians, with designs extending from superb velvet covered caskets with beveled mirrors, to pretty boxes showing kittens, flowers, landscapes or beautiful girls.

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As the company prospered, the brothers implemented new ideas in their work practices like, office picnics to the country, a sports field, kitchen and well heated dressing rooms for the workers. While these practices are common in organisations today, they were unheard of in the 19th century. Among the many innovations in the factory was the appointment of Frederic Kinchelman, a master confectioner from the continent, who was engaged to impart the secrets of his craft to Bournville. Cadbury was soon making nougats, pistache, pate b'abricot, avelines and other delights. All of the quality that 'Fredric the Frenchman', as he was known, was renowned for. Over the next few years, Cadbury opened up chocolate markets in Australia, New Zealand, South Africa, India, the West Indies, South America, the United States and Canada. Every successful company has its famous brands and Dairy Milk, today one of the most popular moulded chocolates in the world, is one of the biggest Cadbury success stories. Cadbury has grown from strength to strength with new technologies being introduced to make the Cadbury confectionery business one of the most efficient in the world. The merger in 1969 with Schweppes and the subsequent development of the business have led to Cadbury Schweppes taking the lead in both the confectionery and soft drinks markets in the UK and becoming a major force in international markets. Cadbury Schweppes today manufactures products in 60 countries and trades in over a staggering 120.

Cadbury in India Fifty years ago, the real taste of chocolate as we know it today, landed on Indian shores. An event that carried forward the entrepreneurship and vision born as far back as 1824, when John Cadbury set up shop in Birmingham (UK) to sell among other things - his own cocoa invention. From these modest beginnings emerged Cadbury Schweppes - that is today the leading manufacturer of confectionery and beverages in the United Kingdom. A company that has its presence in over 200 countries worldwide and has made the name 'Cadbury' synonymous with cocoa products in countries across the planet.

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This is the brand that came to India in 1947 - to a nation that was in its infancy, a market that was ready for the world and a people that were open to new ideas, new products. Within a year of being set up as a trading concern, Cadbury Fry India was incorporated as a Private Limited company, set up for processing imported chocolates and Bournvita. The same year saw the launch of Cadbury's Milk Chocolate - a brand that till today defines the taste of chocolate for millions of Indians. Through 50 years of investment in capital and marketing, the scale and scope of their operations has expanded to cover a range of brands in the chocolate, sugar confectionery and malted food drinks segments. They have a majority share in the Indian chocolate market and a significant presence in sugar confectionery and food drinks. Today Cadbury India Ltd., a subsidiary of Cadbury Schweppes employs over 2000 people across the country. And operates in one of the fastest growing chocolate markets for the Cadbury Schweppes group across the globe. Cadburys went in for intelligent diversification as any other successful company. Cadburys adopted concentric diversification adding new but related products to its existing product line. The company has leading brands in all segments i.e. 5 Star (count lines), Dairy milk (bars), Gems (panned chocolates), Eclairs (toffees), Perk (wafer chocolate), Bournvita (malted food drinks). List of products: 5 Star, Bournvita, Cocoa Powder, Crackle, Dairy Milk, clairs, Fruit And Nut, Gems, Googly, Nut Butterscotch, Perk, Picnic, Tiffins, Truffle, Nutties, Bubbaloo, Cadbury Bytes, Halls, Celebrations, Temptations, Bournvita, etc.

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Industrial Production and Setup Cadbury India's first manufacturing facility was set up at Thane (Mumbai) in 1966. Today, the factory has grown manifold and manufactures a range of products that include Cadbury Dairy Milk, 5 Star, Nutties, Gems and Bournvita. The factory employs about 750 people and houses the R&D and engineering development facilities of the company. In a move towards backward integration, Cadbury bought Induri Diary farm in Pune in 1964. Recently, a major investment program resulted in the installation of modern moulding, crumb and chocolate making facilities. Today, the Induri Factory manufactures intermediate products like milk crumb and a range of finished chocolates. In 1989, they began operations in their newest and most modern plant at Malanpur. Equipped with state-of-the-art technology and backed by constant investment, this unit manufactures Eclairs, Gems, Perk, Picnic, 5-star, etc.

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SWOT analysis of Cadburys

Strength
Cadbury is the largest global confectionery supplier, with 9.9% of global market share. Cadbury is a company, which is reputed internationally as the topmost provider

in the world.

Advantage that it is totally focused on chocolate, candy, chewing gum, unique understanding of consumer in these segments.

Successfully grown through its acquisition strategy. Recent acquisitions,

including Adams, 2003, enabled it to expand into important markets like the US market.
The brand is well known to people & they can easily identify it from others. Cadbury the world leaders in chocolate, is a well-known force in marketing and

distribution.
Users have a positive perception about the qualities of the brand. Cadbury main strength is Dairy milk. Dairy milk is the most consumed

chocolate in India.
By using popular models like Cyrus Brocha, Preety Zinta, Amitabh Bachhan

and others .
The famous advertisements are Kuch meetha ho jaye, Pappu pass ho gaya,

Khush hai zamana aaj pehli tarikh hai, etc .

Cadburys has managed to portray a young and sporty image, which has resulted in converting buyers of other brands to become its staunch loyalists.

Cadbury has well adjusted itself to Indian custom. It has properly repositioned itself in India whenever required i.e. from children

to adults, togetherness bar to energizing bar for young ones etc.

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Weaknesses There is lack of penetration in the rural market where people tend to dismiss it as a high end 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. Possible lack of understanding of the new emerging markets compared to competitors. People avoid having their chocolate thinking about the egg ingredients. The company is dependent on the confectionery and beverage market, whereas other competitors e.g. Nestle have a more diverse product portfolio, where profits can be used to invest in other areas of the business and R&D. Other competitors have greater international experience - Cadbury has traditionally been strong in Europe. New to the US

Opportunities The chocolate market has seen one of the greatest increases in the recent times (almost @ 30%) There is a lot of potential for growth and a huge population who do not eat chocolates even today that can be converted as new users. New markets. Significant opportunities exist to expand into the emerging markets of China, Russia, India, where populations are growing, consumer wealth is increasing and demand for confectionery products is increasing. The confectionery market is characterized by a high degree of merger and acquisition activity in recent years. Opportunities exist to increase share through targeted acquisitions. Key to survival within the FMCG market is increasing efficiency and reducing costs. Cadbury Fuel for Growth and cost efficiency programmes seek to bring cost savings by: 1) Moving production to low cost countries, where raw materials

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and labour is cheaper ii) reduce internal costs - supply chain efficiency, global sourcing and procurement, and wise investment in R&D. Innovation is key driver. To respond to changes in consumer tastes and preferences - healthier snacks with lower calories need to be developed. R&D and product launches have led to sugar-free & center filled chewing gum varieties and Cadbury premium indulgence treat. Low-fat, organic and natural confectionery demand appears strong.

Threat There exists no brand loyalty in the chocolate market and consumers frequently shift their brands. New brands are coming and existing brands are introducing new variants to add up to an already overcrowded market. Worldwide - there is an increasingly demanding cost environment, particularly for energy, transport, packaging and sugar. Global supply chain in low cost locations. Competitive pressures from other branded suppliers (national and global). Aggressive price and promotion activity by competitors - possible price wars in developed markets. Social changes - Rising obesity and consumers obsession with calories counting. Nutrition and healthier lifestyles affecting demand for core Cadbury products.

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CHAPTER 3 NESTLE'S OVERVIEW

Nestl worlds largest food company and Switzerlands largest industrial company. Nestl makes and markets a wide variety of foods and beverages, including chocolate, confectionery, instant and roasted coffee, powdered milk, infant and baby food, mineral water, pet food, breakfast cereals, ice cream and frozen desserts, frozen meals, condiments, sauces, soups, and pasta. The company also makes Alcon eye-care products and is a major shareholder in LOral, one of the worlds largest manufacturers of cosmetics. Nestl is based in Vevey, Switzerland, but derives only a tiny portion of its revenues from sales in Switzerland. Its largest market is the United States. The company operates production facilities in numerous countries around the world.

Nestls well-known confectioneries include Nestl and Nestl Crunch chocolate bars, Baby Ruth and Butterfinger candy bars, Kit Kat wafer bar, Rolo caramels, and Toll House chocolate chips. Its line of beverages includes Nescaf and Tasters Choice instant coffees, Nestl Quick and Milo chocolate-based drinks, Nestea iced tea, Perrier mineral water, and Carnation evaporated milk. Other well-known Nestl brands include Maggi soups and bouillons; Alpo and Friskies pet foods, Stouffers frozen entrees, and Libbys canned foods and sauces.

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History of Nestle In the mid-1860s Henri Nestl, a pharmacist, led efforts to find a healthy alternative to breast milk. He hoped to reduce mortality among infants who could not be breast-fed. Nestl developed an infant cereal that combined cows milk, wheat flour, and sugar and in 1867 tested it on a sick, premature baby boy who had refused his mothers milk. The baby accepted the formula and recovered. Later that year Nestl formed his own company, Farine Lacte Henri Nestl, in Vevey, to manufacture the infant formula, called Farine Lacte Nestl.Only a year earlier, in 1866, Americans Charles and George Page had founded the Anglo-Swiss Condensed Milk Company in Cham, Switzerland, to sell canned milk in Europe. It expanded in the mid-1870s to include infant formulas, entering into direct competition with Nestls company. In 1875 Nestl sold his company to three local business executives. The company began selling chocolate in 1904 when it acquired the Swiss General Chocolate Company. In 1905 Farine Lacte Henri Nestl merged with the Anglo-Swiss Condensed Milk Company to become the Nestl and Anglo-Swiss Milk Company. Increased demand for dairy products during World War I (1914-1918) led the company to expand rapidly overseas. By the wars end Nestle had 40 factories worldwide, and its production had more than doubled since 1914. In the 1920s the company introduced a stream of new products: malted milk, Milo powdered drink, and powdered buttermilk for infants. In 1929 Nestl acquired chocolate company Peter, Cailler, Kohler Chocolats Suisses S.A., whose founder, Daniel Peter, invented milk chocolate in 1875. In 1938 Nestl introduced Nescaf, a powdered instant coffee. A staple for Allied soldiers during World War II (1939-1945), Nescaf changed coffeedrinking habits worldwide and fueled Nestls expansion in the postwar era. In 1947 Nestl merged with Alimentana S.A., the manufacturer of Maggi seasonings and soups, becoming Nestl Alimentana Company. In the following decades Nestle acquired numerous companies, including Crosse & Blackwell, a British

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manufacturer of preserves and canned foods; Findus, a maker of frozen foods; Libby, McNeill & Libby, a maker of frozen and canned foods; frozen food manufacturer Stouffer Corporation; mineral water company Source Perrier; and American food giant Carnation, which made milk, pet foods, and other products. The company changed its name to Nestl S.A. in 1977. In 1977 international activist groups launched a boycott against Nestl for its methods of marketing infant formula in developing countries, alleging that it distributed free samples in maternity hospitals and that its promotional materials failed to recognize breast-feeding as the best form of infant nutrition. Health officials asserted that poor and uneducated women using the formula often mixed it with contaminated water, leading to diarrhea, malnutrition, and death of the infant. The boycott was lifted in 1984 after Nestl agreed to comply with infant formula marketing codes established by the World Health Organization (WHO). However, calls for boycotts resurfaced in the 1990s amid charges from the United Nations Childrens Fund (UNICEF) and other groups that Nestl continued to violate the WHO codes in some countries.

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Historic Development

1866 1905 1929 1947 1971 1985 1988 1988 1992 1995 1997 1998

Company's foundation Merger between Nestl and Anglo-Swiss Condensed Milk Company Merger with Peter-Cailler-Kohler Chocolats Suisses S.A. Merger with Alimentana S.A. (Maggi) Merger with Ursina-Franck (Switzerland) Acquisition of Carnation (USA) Acquisition of Buitoni-Perugina (Italy) Acquisition of Rowntree (GB) Acquisition of Perrier (France) Nestl acquires Victor Schmidt & Shne, Austria's oldest producer of confectionery, including the famous 'Mozartkugeln'. Nestl, through the Perrier Vittel Group, expands its mineral water activities with the outright acquisition of San Pellegrino. Nestl acquires Spillers Petfoods of the UK and strengthens position in the petfood business which began in 1985 with the acquisition of the Carnation Friskies brand.

1999

Divestiture of Findus brand (except in Switzerland and Italy) and parts of Nestl's frozen food business in Europe. Divestiture of Hills Bros, MJB and Chase & Sanborn roast and ground coffee brands (USA). Acquisition of PowerBar.

2000

2007 Nestle is the worlds largest and diversified company.

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Industrial Setup With a total workforce of approximately 224,541 people in some 509 factories worldwide, Nestl is not only Switzerland's largest industrial company, but it is also the World's Largest Food Company. Nestl products are available in nearly every country around the world. Nestle has a presence in 83 countries worldwide. It has a total number of 509 factories out of which 220 are located in Europe, 153 in America and 136 in Africa, Asia and Oceania Nestle started its manufacturing operations with Milkmaid in 1962 at Moga factory. Manufacturing of Nescafe started in 1964 at the same factory. The company set up another factory at Cherambadi in Tamil Nadu, for manufacture of infant foods, coffee etc. For almost two decades there were no new additions of manufacturing facilities due to restrictive policy environment. The company set up its Nanjangad (Karnataka) factory in 1989 and the Samlakha (Haryana) factory in 1992. The Ponda (Goa) factory started operations in 1995. The Company set up its sixth manufacturing unit in 1997 at Bicholim in Goa.

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Nestle in India Nestle, has a broad based presence in the foods sector with leading market shares in instant coffee, infant foods, milk products and noodles. It has also consolidated its presence in chocolates; confectioneries and other semi processed food products.

The processed foods sector, which currently accounts for less than 1-2% of total food consumption, is slated to grow at a fast pace. Historically, the policy framework favored small and unorganized players while the MNC players were restricted from adding capacities. This led to the mushrooming of a vast unorganized sector. Large players with strong marketing network and brand equity, were forced to source a large part of their requirements from third party producers.

Current scenario: During the last two years, however, several food products have been de-reserved from small-scale sector. Many MNC as well as domestic players have made aggressive investments in the sector. Also quantitative restrictions on several food products have been lifted/ will be lifted in the next one year. This will lead to growth spurred by greater availability of imported products. Nestl's leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and Milkmaid. To strengthen its presence, it has been the company's endeavor to launch new products at a brisk pace and has been quite successful in its launches.

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SWOT analysis of Nestle Strength Parent support - Nestle India has a strong support from its parent company, which is the worlds largest processed food and beverage company, with a presence in almost every country. The company has access to the parents hugely successful global folio of products and brands. Brand strength - In India, Nestle has some very strong brands like Nescafe, Maggi and Cerelac. These brands are almost generic to their product categories. Product innovation - The company has been continuously introducing new products for its Indian patrons on a frequent basis, thus expanding its product offerings.

Weaknesses Exports The companys exports stood at Rs 2,571 m at the end of 2003 (11% of revenues) and continue to grow at a decent pace. But a major portion of this comprises of Coffee (around 67% of the exports were that of Nescafe instant to Russia). This constitutes a big chunk of the total exports to a single location. Historically, Russia has been a very volatile market for Nestle, and its overall performance takes a hit often due to this factor

Supply chain - The company has a complex supply chain management and the main issue for Nestle India is traceability. The food industry requires high standards of hygiene, quality of edible inputs and personnel. The fragmented nature of the Indian market place complicates things more.
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Opportunities Expansion - The company has the potential to expand to smaller towns and other geographies. Existing markets are not fully tapped and the company can increase presence by penetrating further. With India's demographic profile changing in favour of the consuming class, the per capita consumption of most FMCG products is likely to grow. Nestle will have the inherent advantage of this trend. Product offerings - The company has the option to expand its product folio by introducing more brands which its parents are famed for like breakfast cereals, Smarties Chocolates, Carnation, etc. Global hub - Since manufacturing of some products is cheaper in India than in other South East Asian countries, Nestle India could become an export hub for the parent in certain product categories. Threat Competition - The company faces immense competition from the organised as well as the unorganised sectors. Off late, to liberalise its trade and investment policies to enable the country to better function in the globalised economy, the Indian Government has reduced the import duty of food segments thus intensifying the battle. Changing consumer trends - Trend of increased consumer spends on consumer durables resulting in lower spending on FMCG products. In the past 2-3 years, the performance of the FMCG sector has been lackluster, despite the economy growing at a decent pace. Although, off late the situation has been improving, the dependence on monsoon is very high. Sectoral woes - Rising prices of raw materials and fuels, and inturn, increasing packaging and manufacturing costs. But the companies may not be able to pass on the full burden of these onto the customers.

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CHAPTER 4 GCMMF (AMUL): AN OVERVIEW

Gujarat Cooperative Milk Marketing Federation Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing organisation. It is a state level apex body of milk cooperatives in Gujarat which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money. 12 district cooperative milk producers' Union 2.12 million 10,411 6.1 million liters per day 1.59 billion liters 450 metric Tons per day

Members: No. Of Producer Members: No. Of Village Societies: Total Milk handling capacity: Milk collection (Total - 1999-00):

Milk collection (Daily Average 1999-00): 4.47 million liters Milk Drying Capacity:

Amul products was launched in market by Kaira District Co-operative Producers Union ltd. the union choose Amul as brand name a variant of Amulya. AMUL means "priceless" in Sanskrit. A quality control expert Anand suggested the brand name Amul, from the Sanskrit Amoolya. Variants, all meaning "priceless", are found in several Indian languages. Amul products have been in use in millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made Amul a leading food brand in India. The product was initially advertised on hoardings as main medium. The Utterly Butterly ad campaign soon became popular. In 1973 an apex organisation was formed GCMMF ltd., which integrated activities of district unions to oversee the marketing of their product.

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GCMMF set up a network of thousands of stockiest catering to over 4 lakh retail outlets throughout in India. GCMMF has invested nearly Rs. 100 crore in establishing cold chain from Gujarat to rest of the country. Products like Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk etc. were transported over long distances in its refrigerated vans and through its 39 C&F agents and 17000 distributors. Few multinationals were successful in competing with multinational even in relatively high end products categories such as milk products, infant foods, and chocolates where it managed to price its products competitively. (Turnover: Rs.18.8 billion in 1997-98). Today Amul is a symbol of many things, of high-quality products sold at reasonable prices, of the genesis of a vast co-operative network, of the triumph of indigenous technology, of the marketing savvy of a farmers' organisation and have a proven model for dairy development.

It had its roots in a strike of milk producers' unions against the British colonial administration over 50 years ago. A few decades later, the Gujarat Cooperative Milk Marketing Federation (GCMMF) became India's largest food products marketing organisation. Today, GCMMF's Amul brand of milk products receives business queries from dozens of countries, ranging from the U.S. and the Netherlands to Singapore and New Zealand - thanks to an innovative marketing campaign on the World Wide Web. Advertising on the Internet has helped them develop business contacts in many countries. They have invited us to visit their site to get a first hand understanding of their operations, product range, and of course, the advertisements. The round-eyed, chubby-cheeked Amul Moppet has been a wildly popular advertising fixture, with its punchy one-liners amusing Indian viewers from bus stands, lamp kiosks and billboards for over thirty years. Amul's Web site was launched in March 1996 by an initiative of the marketing department, in consultation with the information

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systems division; the site is designed and hosted by Mumbai-based Ravi Database Consultants (which also hosts the India-World and India-Line sites). Created in 1966 by an advertising team headed by Sylvester daCunha. For 30 odd years the Utterly Butterly girl has managed to keep her fan following intact. So much so that the ads are now ready to enter the Guinness Book of World Records for being the longest running campaign ever. The ultimate compliment to the butter came when a British company recently launched butter and called it Utterly Butterly, a fitting recognition of the "Thoroughbred, Utterly Butterly Delicious Amul." Every week, Amul's topical ads for its butter products are posted on its Web site, along with recipes for Indian dishes featuring Amul products. Archives of hundreds of topical dating back to 1979 are available on the site. The topical have also been carried every day on the India-World home page. From the Sixties to the Nineties, the Amul ads have come a long way. While most people agree that the Amul ads were at their peak in the Eighties they still maintain that the Amul ads continue to tease laughter out of them. Where does Amul's magic actually lie? Many believe that the charm lies in the catchy lines. That we laugh because the humour is what anybody would enjoy. They don't pander to your nationality or certain sentiments. It is pure and simple, everyday fun.

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SWOT analysis of Amul (GCMMF)

Strengths The company is having Indian origin thus creating feeling of oneness in the mind of the customers. It manufactures only milk and milk products, which is purely vegetarian thus providing quality confidence in the minds of the customers. It is aiming at rural segment, which covers a large area of loyal customers, which other companies had failed to do. People are quite confident for the quality products provided by Amul. Amul has its base in India with its butter and so can easily promote chocolates without fearing of loses. The prices of chocolates of Nestles are comparatively cheap as compared to other companies.

Weaknesses There are various big players in the chocolate market, which acts as major competitors restricting their growth. Lack of capital invested as compared to other companies. Improper distribution channel in India.

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Opportunities There is a lot of potential for growth and development as huge population stay in rural market where other companies are not targeting. The chocolate market is at growth stage with very less competition so by introducing new brand and intensive advertising there can be a very good scope in future.

Threats The major threat is from other companies who hold the majority share of consumers in Indian market i.e. Cadburys and Nestle. There exists no brand loyalty in the chocolate market and consumers frequently shift their brands. New companies entering in Indian market like Fantasie fine poses lot problems for Amul.

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CHAPTER 5 STRATEGIES OF THREE GIANTS IN THE INDUSTRY

Since its inception, Cadbury in India has stayed ahead thanks to their constant marketing initiatives, that have at all points in time understood the needs of and opportunities in a changing nation but Nestle had stood firm in second position resulting from their responsibilities and providing quality products. Amul an Indian company has been able to create brand quality and thus selling their product through their name.  Wide variety of brands: The '60s was a decade which saw the launch of brands that are etched in the hearts of generations of Indians - Tiffins, Nut Butterscotch, Caramels, Crackle, 5 Star and Gems. It was a strategy that introduced consumers to a variety of tastes and product forms leading to a rapid increase in chocolate consumption. Nestle has been continuously working on the new products as per the needs of the consumers. Since the launch they have introduced many new products, which has placed a sweet taste in the heart of the customers. They have provided various products with different taste such as- Nestle classic, Bar one, Kit Kat, Fox, Crunch, Milky bar, Nestle clairs etc. Amul in India knows the exact requirement of the Indian customers and has been able to fulfill the requirements with wide variety of products. Amul has provided all types of chocolate products like- Amul crisp, Amul crunch, Amul orange, Badambar, Amul milk chocolate, etc.

 Quality products at low price: Cadbury's Eclairs was launched in 1972, at the then princely sum of 0.25p and was an instant hit. It continues to be one of the biggest brands

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in the Cadbury portfolio and offers the lowest price point at which consumers can experience the real taste of chocolate. But as compared to other companies the price are very high because of lack of competition. Quality is the cornerstone of the success of the Nestl Company. Every day, millions of people all over the world show their trust in the company by choosing Nestl products. This trust comes from a quality image that has been built up for over a century. They provide products of all range i.e. for Polo the price changes from 1 Rs. to 3 Rs. and 7 Rs. Also. Amul has been able to build trust in India as an Indian origin and providing absolutely pure vegetarian and best quality product. Amul aims to create value for consumers that can be sustained over the long term by offering a wide variety of high quality, safe food products, at affordable prices. Amul provides chocolate for all customers that are even a person with low income can effort it. The prices of the products are far less if compared to other companies.

 Innovative & attractive packaging: In the years that followed, Cadbury invested in technology and made an impact through innovative packaging. This decade experienced a continuous growth in volumes as Cadbury launched a flurry of brands with different pack sizes, at various price points. The now ubiquitous Sheet Metal Dispenser seen on cash counters of thousands of shops for dispensing chocolates was an innovation that helped brand the colour purple in the minds of the Indian consumer. Even though Amul has not been able to be so successful but it has been able to have a great impact through its special designer packaging. The mopped girl was an innovation for the Indian mind living an impact in minds of the people. The special festival packs with great designer packs have also attracted the customer.

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 Timely expansion of market: In the 90's Cadbury realised both the scope and the need to expand the market. Hitherto perceived only as a children's product, Cadbury 'universalized' the chocolate market. The multi-award winning advertising campaign - 'The Real Taste of Life' - was launched, capturing the childlike spontaneity in every adult. Moulded chocolate and clairs also showed satisfactory growth. This has also helped in improving the infrastructure and distribution reach of the company in chocolate and confectionery segment. Amul has previously launched chocolates aiming at the children as the consumers but later they switched their marketing positioning to children as well as adults. They are having the punch line as A gift for someone you love. They have shown mopped girl sitting in corner with Amul chocolates and a mother presenting the Amul chocolate to her child, which shows the dearness and love in the heart of consumers.  Introducing new products: Cadbury 5 Star with its Energizing Bar campaign targeted the youth, offering them a mind and body charge. While pre-empting competition, Cadbury Perk - the light chocolate snack - pushed chocolates into the wider area of snacking by promising 'Thodi Si Pet Pooja Kabhi Bhi Kahin Bhi' (anytime, anywhere) and has introduced new flavours like Mint Hint, Mango Tango, Very Strawberry. It has also introduced various new chocolates like Gollum and Frutus in recent years. Nestle has been continuously coming up with new products providing different taste to the products. They recently introduced polo the refreshing chocolate. For the competition they also introduced Kit Kat the wafer chocolate that was successful and pushed the market in great competition. It has recently introduced the Milkybar clair facing the competition of Cadbury clairs even then able to remain the consumers one of the favourite.
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 Constant diversification: Faced with rapidly changing markets and increased competition, Cadbury launched Truffle to hit the high ground of great tasting chocolate. This was followed by Picnic in 1998, which with its unique, multi-ingredient construct, promises to take chocolates straight into the realm of snacks. With the introduction of Gollum and Frutus Cadbury has taken the market by surprise. In the area of chocolate and confectionery Nestle Munch wafer biscuit with chocolayer, which was launched in select markets in 1999, was rolled out nationally during 2000 and had good growth. Continuing with the efforts to meet consumer expectation on price points, the pricing of KitKat was also reduced during the later half of the year. Because of increasing competition Amul had to look in new segment. Amul products mainly included milk and milk products but now they have placed themselves in chocolate market with various tastes in this segment. They had introduced wide variety of products and now they have small packs of all its products i.e. 18 grams packs.  Commitment of expansion: With the launch of Trebor Googly, the tangy, fizzy candy, Cadbury took the market by surprise and marked the entry of Trebor into the fast growing Indian sugar confectionery market. The extension of Googly to a Mint flavour reinforces Cadbury's commitment to establish the Trebor name as a strong player in the value added sugar confectionery market. Nestle who initially developed their market in urban areas is now expanding in the semi-urban and rural markets. They are providing various products at very low price. They had polo a mint with hole and now they have the remains of the hole of polo in cachets. Amul has been able to constantly expand in Indian market. They have Introduced Badambar and Amul crisp, Amul orange and Amul milk

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chocolate. They have captured various rural markets and introduced themselves on self of almost all retailers.

 Awards: Cadbury is the first FMCG Company in India to have successfully implemented SAP R/3 as an Enterprise Resource Planning tool. SAP awarded Cadbury India the SAP Star Customer Award in 1998 for the successful implementation of SAP R/3 and for the invaluable support extended to SAP and the SAP user community. This is the 4th year of ERP since the financials went live with SAP, beginning 1996. In 1999 plans are on for the completion of the supply chain module within SAP R/3 by implementing production systems, thereby integrating major functions and gaining a quantum jump in efficiencies. For 30 odd years the Utterly Butterly girl has managed to keep her fan following intact. So much so that the ads are now ready to enter the Guinness Book of World Records for being the longest running campaign ever. Samalkha factory received the Haryana State Safety and Welfare Award from the Labour Department, Government of Haryana, an award intended to encourage industries to excel in safety and environmental efforts.

 Special strategies: Amul has set up small telephone booth at various places where they also provide their products for sale. Thus the customer coming to make a call gets attracted to the chocolates and is tempted to purchase it. Cadbury has come up with wrapper collection contest. The wrapper of any Cadbury product had a specific point based on the cost of the product. Consumer who submitted the wrapper within a specific period of the tome would get prices on the basis of points received by them for collecting the wrappers.

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 Nestle has launched exciting and educational offering like Tarzan jigsaw puzzle and classic tale series with the packs of the chocolates for the children. They also give balls of cricket and lawn tennis with the family pack of the chocolate and this can be seen in Kit Kat at present.

 Festival packaging: Amul being an Indian company know the importance of festival in India and can foresee the profit in the festival that can be generated. They make festival packages for special festivals for customers to be gifted to beloved ones. They recently had introduced Utsav as a festival pack. They have also designed the family pack with Rajput and Maharajas. According to Cadbury, chocolate is also specially suited to Indian festivals. The year 2000 saw brothers gift Bandhan packs to sisters on the day of Raksha Bandhan. It saw young suitors buy their loved ones boxes of heart shaped chocolate for Valentines Day. It saw families gift each other chocolates for diwali, a shift from the conventional ghee-laden mithai of yore. The gifting market for chocolates provides a great potential for growth. Nestle has played a key role in tapping this market through dominant presence in the diwali retail and the institutional gifting segment. Gifting initiatives were extended to other festivals and occasions like Raksha Bandhan and Valentines Day in an effort to get the chocolate category into the Indian consumers life space.

 New products: Cadburys has been continuously introducing new products in the market. As per the need the Cadbury Company has introduced various products. At present Cadbury is introducing temptation in the market. Nestles had also been working for new product since long time. For standing the competition nestle introduced nestle clairs and recently introduced nestle munch and had introduced KitKat.

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 Amul also is working for its products and is now introducing small packs of all the Amul chocolates. The pack is of 16 gms. and is also affordable by all.

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CHAPTER 6 FINDINGS OF SURVEY

The surveyor conducted a survey on consumption of chocolate in India between the age group of 10-75 and found the following facts.

Out of 30 people questioned 27 replied that they consume chocolate and 18 of them consume chocolate on daily basis and remaining consume chocolate on weekly basis.

Yes No

27

The survey also stated that 21 out of the total chocolate consumers { 27 } preferred Cadbury chocolate over other brands, and the balance 6 preferred other brands ie Nestle, Amul

6
Ca OT

21

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CHAPTER 7 SUGGESTIONS

Of the person who consumes chocolate normally answered that they look out for great taste and is delicious to eat. The very second feature said is that it is healthy and nutritious but it can be said this answer is mainly because of shyness. Many say it is for , foreignbrands, etc fun moments and also freshens your mood. Many consider its price,quality and attractive packaging also.

The survey also asked the respondents the kind of changes or variants in chocolates they would like to have. The following are some of the suggestions made by the respondents:

Chocolate should be available everywhere. They should introduce calorie free or low calorie chocolate. They should provide packs of all sizes so that it can be afforded by anyone. The chocolate should have attractive packaging. The chocolate should be energizing and healthy to eat. Provide different taste of chocolates. Inform about the ingredients on back of all packs. They should make absolutely vegetarian chocolates. Price should be kept low even when the chocolate is successful. It should be able to replace snack if consumed i.e. heavy when eaten.

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CHAPTER 8 CONCLUSION
Now on the basis of survey and SWOT analysis done we can reposition the chocolate in the Indian market as per the needs of the customers. Distribution Chocolate should be available in all i.e. even a small store in India. Even the rural market should be aimed at providing chocolates everywhere in India. Awareness Customer should be made aware about their presence. Creating brand image in the market can do this. Name of the company should be made trust worthy in the minds of the consumers and also non-consumers. Company should be able to make consumers brand loyal by its name. There should be sustained growth of their market share through aggressive product development. They should broaden their consumer appeal and extend their reach to newer markets. Promotion Since the Indian chocolate market is in growth stage there should be exclusive advertising on T.V., radio, magazines, hoardings, posters, cinema, shop displays etc. should be done to promote the product in the market. Product They should provide quality products as per the needs of the consumers. They should take care of the Indian customs by providing pure vegetarian products. Their product should be distinguishable among other brands in the market. They should be striving for international quality in their products and processes. Price

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The price of the product should be kept low as compared to its competitors. The product should be purchasable by all i.e. even a middle class family people can buy it. They should provide value for the money paid for the product. Initially they should cut on profits and keep prices low. Packaging The packaging of the product should be very attractive. By looking at the packet consumer should be tempted to buy it. The product should also be available in various sizes. The product package should create an image in the minds of the people like purple colour for Cadburys. Responsibilities They should fulfill all their responsibilities among the consumers, employees, shareholders, society, government, and others involved with them. They should also take care of the environment and provide environment friendly products and the covers should be recyclable. People should be encouraged to recycle and reuse the packets of the product.

Collecting feedback Company should encourage its customers to give their feedback (as to the level of their satisfaction) regarding the product. On the wrapper of the product the company suggests the customer to contact them either by mail or phone in case the consumer are dissatisfied with the product.

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The top 10 qualities that people look out for in a chocolate Have a perfect taste or delicious to eat Nutritious and healthy For fun filled moment Is value for money Freshens you up Price Quality Packaging

Replace snack

Able to be gifted or family chocolate

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BIBLIOGRAPHY

 www.google.com  www.yahoo.com  www.cadbury.com  www.nestle.com  www.amul.com  www.cacaoweb.net/chocolate

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