Cadbury india

1. Cadbury India In India , Cadbury began its operations in 1948 by importing chocolates Cadbury India operates in four categories viz. Chocolate, Confectionery, Milk Food Drinks, Candy and Gum category Cadbury enjoys a value, market share of over 70% - the highest Cadbury brand share in the world! In 1824 John Cadbury began selling tea, coffee and chocolate produced by himself

2. Cadbury India Leading Global confectionery company Employ around 50,000 people and have direct operations in over 60 countries After 60 years of existence has five company owned facilities at Thane, Pune, Gwalior, Bangalore and Himachal Pradesh 4 sales office – New Delhi, Mumbai, Kolkata and Chennai The brand name ‘Cadbury’ is synonymous with chocolates in India

3. A SWEET STORY TURNING SOUR Worm controversy hit Cadbury in Oct 2003 Fungus layer on portions of its chocolates Food and Drugs Administration ( FDA ) began seizure of the chocolate from all outets across the state FDA also ordered inspection of Stock at company’s Mumbai Plant Peak Season Sale and outsourcing model affected due to controversy

4. Effects The heat of negative publicity melted Cadbury's sales by 30 percent, at a time when it sees a festive spike of 15 percent N et profit in 2003 dipped 37 per cent to Rs 45.6 crore as compared to a 21 per cent increase the previous year Retailer stocking and display dropped, employee morale especially that of the sales team was shaken

5. Reasons A ggressive marketing by Company while neglecting on the Quality of Retailers L ack of efforts to E ducate Retailers and ensure adequate hygienic storage conditions at retail outlets Poor quality in packaging of product Issues related to transportation of product N o N orms in terms of Storage for Chocolates

6. Two Phase Strategy Phase 1 : Presenting Cadbury’s view (October – December 2003 ) the agency set up a media desk to ensure that no media query went unanswered the Cadbury’s Managing Director addressed consumer concerns Project Vishwas (Trust ) E ditorial Outreach Program with 31media editors across affected cities

7. Two Phase Strategy Phase 2 : Packaging Change and Communication ( January – March 2004 ) Advertisement weapon : Brand Ambassador to reinforce the credibility Amitabh Bachchan , a legendary Indian film star , was chosen, as he embodied the values of Cadbury as a brand

8. Two Phase Strategy Phase 2 : Packaging Change and Communication ( January – March 2004 ) Packaging : N ew ‘purity sealed’ packaging ( Jan 2004) -investment of Rs 15crore on imported machinery Metallic Poly-Flow was costlier by 10-15% but Cadbury didn’t hike the Pack Price Investment  of millions of Dollars leads to achieve a  production process in 8 weeks, that would normally take 6 months.

9. Campaign Results and Measurement Media Coverage all Media reports carried Cadbury’s point of view 378 clips in over 11 languages covering the new packaging and its benefits Sales Sales declined drastically between week 1 to week 10 of the crisis W ithin 8 weeks of introduction of new packaging and communication sales volume reached to the pre-incident levels Image Upward movement in ratings amongst consumer Media’s  positive coverage and the trade’s  positive  pre-disposition played a huge part in helping in Cadbury regain its reputation

10. Cost of Quality Prevention Design Quality Progress Reviews Requirements   Documentation Quality planning Supplier capability surveys Appraisal Unit  Testing Regression   Testing A utomated Test  Tools User Interface Reviews Internal Failure Rework , Scrap, Re-inspection, Defect Tracking & Reports, Requirement   Changes External Failure Product Recall, L iability Costs, H elp Desk/ W arranty Claims, L ost Sales/Market Share

11. External F ailure Cost of Cadbury Sales declined by 30% during festival season as compared to previous year In 2002 the N P A T was Rs. 72.72 cr. but after the worm controversy in 2003 the N P A T was Rs. 45.6 cr. which was down by 37 % Cadbury spent additional Rs. 40 cr. on advertisement to save its brand value Cadbury hired Ad vertising A gency O & M to bail them out this worm crisis Cadbury's roped in brand ambassador Ami tabh Bachchan  to do some heavy duty endorsement to regain confidence of consumer which cost Cadbury Rs. 15  cr

12. Internal Failure Cost of Cadbury L ost Production Potential L oss of Morale of the Sales Staff  Rework  - Rebuild Problem Tracking Transportation / Storage Cost

13. Preventive Cost for Cadbury India T he company already had an Internationally accepted HA CCP( H azard A nalysis and Critical Control Points) for food safety system. With this controversy the company had to incur cost on Complete overhauling of packaging and spend around Rs 15 cr on Imported machinery to improve packaging of Chocolates Double Protection Packaging of Chocolates to counter the allegations of FD A Various levels of Quality Checks at Its facilities and plants Carrying/Forwarding W arehouses and Distributor warehouses To ensure that its products are free of infestation

14. Conclusion Factors that led to Cadbury’s sweet recovery from crisis- Brand equity Customer’s perceptions Media coverage N ew product introduction “An optimist sees an opportunity in every difficulty where as a pessimist sees a difficulty in every  opportunity” -Winston Churchill