Sales And Distribution of Cadbury

This Presentation gives the information about how cadbury use their distribution channel as well as about their sales strategy and salesforce structure, how they give training etc

1. Cadbury- SALES & DISTRIBUTION Team members: 1 . Agrawal bhavin ( 02 ) Professor : Mr. neeraj ramnani Institute : som-lalit institute of management studies (slims)

2. History of Cadbury 1824 John Cadbury began selling tea, coffee, and drinking chocolate 1824 1897 1897 The first Cadbury solid chocolate bar is sold. 1905 1905 Dairy Milk brand appears for the first time 1948 1948 Cadbury began its operations in India by importing Chocolates 1969 1993 2009 2013 1969 Cadbury buys drink maker Schweppes to become Cadbury-Schweppes 2009 Acquisition by Kraft Foods: £ 11.5 billion ( US$18.9 billion) indicative takeover bid for Cadbury 2012 The confectionery business of Kraft became Mondelēz International, of which Cadbury is a subsidiary. 2012-13 Cadbury India profit slows to six year low PAT growth 2.2% under the new parent Mondelez International. 2008 Cadbury Schweppes demerger took with the drinks business becoming Dr. Pepper Snapple Group Inc. 1993 Cadbury opened the world's largest and most advanced chilled warehouse in Minworth, Birmingham 2012 3 2008

3. Cadbury India — a subsidiary of Mondelez International, the $32 billion global snacking major formed in October last year. Cadbury India enjoys a value market share of over 67 percent in the chocolate category and our brand Cadbury Dairy Milk (CDM) is considered the "gold standard" for chocolates in India. Cadbury in India operated in five categories: Chocolates, Beverages, Biscuits, Candy & Gum. Snapshot of some of the most popular Brand of Cadbury:- CADBURY INDIA

4. Vision & Mission Vision: "Working together to create brands people love" Cadbury’s mission statement   Says simply, ‘Cadbury means quality’; this is our promise. Our reputation is built upon quality; our commitment to continuous improvement will ensure that our promise     Mission Statement 0f the product: The mission statement of our new product is “To provide our customers with a tempting and exquisite taste” as Enticing Treats means a mouth watering treat which is simply irresistible.

5. Sales and Distribution structure of Cadbury Product Competition Medium Unit value Low Volume High Unit Margin Low Seasonality Low Retailer’s Capital Investment Low No. of Retailers High Retailer’s sales Low Manufacturer Retailer’s Relationship Low

6. To become the World’s Biggest and Best Confectionery Company. To make lots of chocolate & improve the quality of their chocolate. Have loads of stores worldwide. To be an ongoing company & achieve revenue growth of 20% per year. Increase earnings by 15% annually & dividends per share by 7% per year. OBJECTIVES

7. Source: Change at the chocolate factory By Geetanjali Shukla and Anusha Subramanian        Edition:Feb 19, 2012 Cadbury India’s Market share in different segments in 2015

8. COMPETITORS

9. Achievements Major Achievements of Cadbury Worlds No 1 Confectionery company World's No 2 Gums company. World's No 3 Beverage company. Cadbury Dairy Milk & Bournvita have been declared a "Consumer Superbrand " for 2006-07 by Superbrands India. Cadbury India has been ranked 5th in the FMCG sector , in a survey on India's most respected companies by sector conducted by Business World magazine in 2007 . Cadbury India has been ranked as the 7th Great Place to Work and the No. 1 FMCG company in India in 2008 , by the Great Place to Work Institute . Asian Marketing Effectiveness Awards 2008 for Bournvita Folk/Fusion campaign - GOLD award for the " Best Insights and Strategic Thinking " and SILVER award for the 'Most Effective Use of Advertising '.

10. PRODUCT

11. CHOCOLATE BAR. MADE FROM REAL DARK CHOCOLATE. SIMILAR DESIGN WORLDWIDE. CONTAINS MORE MILK THAN ANY OTHER CHOCOLATE BAR. AVAILABLE IN 10.5g, 22g, 95g, 165g & OTHER PREMIUM PACKS

12. Popular Brands in INDIA Chocolates Snacks Beverages CANDy’s GUMS

13. PRICE

14. WEIGHT (gm) PRICE 10.5 5 22 10 40 20 CRACKLE 25 95 50 80 FRUIT & NUT 55 165 90 PRICE MENTIONED ABOVE ARE SAME ALL OVER INDIA. COMPETETIVE PRICING. DUE TO PRICE HIKE IN RAW MATERIAL AND LABOUR COST COMPANY HAD NOT INCREASED THE COST OF PRODUCT BUT REDUCED THE WEIGHT OF PRODUCT. EG. 5 RS PACK WAS OF 13gm BUT NOW IT IS 10.5gm

15. PLACE

16. Business Operations Five company-owned manufacturing facilities: Thane Induri ( Pune ) Malanpur (Gwalior) Bangalore Baddi (Himachal Pradesh) 4 sales offices: New Delhi Mumbai Kolkota Chennai Corporate/Head office: Mumbai THESE FACTORIES CHURN OUT CLOSE TO 8,000 TONNES OF CHOCOLATE ANNUALLY

17. WHOLESELLER RETAILER DISTRIBUTION CDM ARE SOLD DIRECTLY TO WHOLESELLER AND RETAILERS. CADBURY'S DISTRIBUTION NETWORK USED TO ENCOMPASSES 2100 DISTRIBUTORS AND 450,000 RETAILERS.

18. PROMOTION

19. Strong brands are very important in the chocolate confectionery market. Almost 80% of chocolate purchases are made on impulse. The media mix for the campaign comprises TV, outdoor, Internet and radio. Use of emotional appeals in advertising. Concentrated more on TV. Advertisement.

20. The ‘Real Taste of Life’ with the girl dancing on the cricket field The message: ‘Dairy Milk is for enjoyment’ A FEW ADVERTISEMENTS

21. During late 90’s Campaign: ‘ Khanewalon ko khane ka bahana chahiye ’. Target: widening chocolate consumption among the masses

22. More recently Campaign: ‘ kuch metha ho jaye ’. Target: to associate Cadbury with celebratory occasion.

23. Campaign: ‘ pappu pass ho gaya ’. Target: encourage those who have pass the exams to celebrate with Dairy Milk.

24. Campaign: ‘Miss Palampur ’ Target: Focusing on the adults. Campaign: ‘AAJ PAHLI TARIK HAI ’ Target: To celebrate pay day / salary day

25. Cadbury appointed Amitabh Bachchan as its brand ambassador. The Big factor that has pushed up CDM sales is the Amitabh Bachchan campaign. THE BIG ‘B’ FACTOR

26. geographic SEGMENT IMPULSE SEGMENT For eating then and there. “ Khaane walo ko khane ka bahana chahiye ” GIFT SEGMENT Purchased to gift some one. segmentation

27. The prospective customers of Cadbury Dairy Milk have changed have changed from kids to adults-including every family member to celebrate any occasion with Dairy Milk. TARGET MARKET

28. For kids across India, the word ‘Cadbury’ is synonymous with chocolates. CDM positioned as ‘The perfect expression of love’ “ Mazza aa gaya ” spontaneous, carefree, special, real moments. " Kuch Meetha ho jaye “ The brand want itself to be synonymous with Sweet. Positioning

29. 1905 1990 1994 2003 2014 Time Sales Introduction Growth Maturity 2004 1998 +40% -30% +36% PRODUCT LIFE CYCLE

30. 1905 – Cadbury launches Dairy Milk onto the market. Positioned as ‘Unique Milk chocolate with far more milk and creamy taste’. In the 1980s, it was positioned as ‘the perfect expression of love’, ‘Sometimes Cadbury can say it better than words’. During the early1990s, emphasised its international identity, the ‘Real taste of chocolate’. Re-positioning was done in 1994, to the ‘free-child’ in every adult. Cadbury Dairy Milk redefined itself as the perfect expression of spontaneous, shared good feelings, providing the ‘real taste of life’ experience. The ‘Real Taste of Life’ with the girl dancing on the cricket field The message: ‘Dairy Milk is for enjoyment’ INTRODUCTION

31. 1998- The next stage of growth for the brand deals with popularizing consumption in a social context, especially in more traditional settings like weddings. With the campaign ‘ Khaanein waallon ko khaanein ka bahana chahiye ’ Cadbury Dairy Milk aimed to substantially increase penetration levels with the award winning ‘ Kuchh khaas hai .. .’campaign. The brand penetrated into smaller towns and sales volumes grew by 40% During late 90’s Campaign: ‘ Khanewalon ko khane ka bahana chahiye ’. Target: widening chocolate consumption among the masses GROWTH

32. The ‘Worm Controversy’ resulted in Cadbury’s brand image taking a beating. Sales declined up to 30%. They had to recall a batch of chocolates. Cadbury rebuilt the trust of people by launching project ‘ Vishwas’in 2004. Redesign of Packaging With Bachchan they also launched their new positioning of “ Kuch Meetha Ho Jaaye ” bringing in the tradition of celebrating a joyous occasion in India with sweets and now Cadbury Dairy Milk in particular. The “ Pehli Tareekh Hai ” campaigns talked about the importance of having Dairy Milk and celebrating on getting your pay on pay-day. “ Shubh Aarambh ” ads that have brought back the old charm of Cadbury Dairy Milk with its very interesting insight of mixing the traditional with the new age MATURITY

33. Euromonitor predicts the industry will enjoy a 6% rise in revenues in 2014, delivering record global revenues of US$117bn. This robust performance is driven by a 2.1% increase in volume, reflecting growing appetite for chocolate in emerging markets. (Morris,2014 ) Sources:- 1. A taste of Future, KPMG international-Consumer Markets June 2014, By John A. Morris 2. http :// www.statista.com The overall market size, growth trends and future projections in the world Market

34. Distribution Structure: No. of Levels Selection Criteria for channel Partner CHANNEL DESIGN

35. Factory/Production unit Retailers C&F Agents Re-Distributors Consumers Depot Wholesaler Modern Trade CHANNEL OF DISTRIBUTION OF CADBURY

36. BUSINESS CAPACITY AND SALESMANSHIP CREDITWORTHINESS, FINANCIAL AND SOCIAL STATUS EXPERTISE AND EXPERIENCE RELATION WITH CUSTOMERS MARKET SEGMENTS PRODUCER CHANNEL FIT QUALIFICATION TRAINING AND SUPPORT REQUIRED SELECTION OF CHANNEL PARTNERS

37. MBA WITH 2-10 YEARS OF EXPERIENCE CAREER PATH ABILITY TO ANALYZE HIGH ENERGY AND COMMERCIAL THINKING INFLUENCING AND NETWORKING SKILLS RECRUITMENT

38. Rewards: Monetary and Non-Monetary Target Setting & Monitoring Training & Capacity Building Cash Flow CHANNEL MEMBER MANAGEMENT

39. General Trade Distributor Margin is around 4.75% and 1% is activity based(completion of Monthly Sales Target) Modern Trade Distributor Margin is around 4.5% and 0.5% Super Stockist Margin is around 2% and 1% of market value MONETARY BENEFITS

40. Retailers Margin Product Margin Bournvita 9% Oreo 13% Tang 10% Halls & Eclairs Pouch 15% Halls & eclairs Jar 12% Health Drinks 9% Drinking Choclate 7.5% Choclates worth Rs. 5-20 10% Choclates worth morethan Rs. 20 14%

41. Big Bazaar has a direct account with Cadbury and there are separate margins fixed for these chains overall India by both of them mutually Product Margin Bournvita 9.45% Choclates 11.03% Tang 10.23% Oreo 10.23% MODERN TRADE MARGIN

42. UDAAN: Foreign Trips to super stockists based on performance Visicoolers can be given only in food stores and Chemists where sales is more than 3000 per week SMDs can be given in Top shops where Sales is more than 2000 per week Mass market dispensers( Halls,Eclairs and Bubaloo gum) are given to chemists,Paan tapris Barrow Dispensers given to small shops and Paan Tapris Non-Monetary Benefits

43. Monthly Targets set Separately General & Modern Trade Distribution Incentives only after surpassing Targets Targets Sets as on data are: General Trade: 80-90 Lakhs Modern Trade: 10 Lakhs Monitoring Done by”Analysing Invoices” generated by the distributors & through company’s Salesforce TARGET SETTING & MONITORING

44. LAKSHYA NEW RECRUITS AND UNDERPERFORMERS COMPANY & DISTRIBUTOR’S SALESFORCE COST OF TRAINING ONCE IN A YEAR TRAINING &capacity building

45. THE DISTRIBUTOR–RETAILER CASH CYCLE VARIES FROM 1-7 DAYS. IN MODERN TRADE THE CASH CYCLE IS OF 16DAYS TO 1 MONTH. THE DISTRIBUTOR IS LIABLE TO PAY SALARY TO THE PCS BUT THE MONTHLY INCENTIVES ARE GIVEN BY THE COMPANY THERE IS PAYMENT DONE THROUGH RTGS & PREPAID CHEQUES TO THE COMPANY FLOW DISTRIBUTOR MAKES PAYMENT TO THE COMPANY ON A WEEKLY BASIS. CASH FLOW

46. SALESFORCE STRUCTURE OF CADBURY

47. ANNUAL MEETINGS FOR DISTRIBUTORS "UDAAN" FOREIGN TRIP TO HIGH PERFORMING SUPER STOCKIEST LAST YEAR TRIP TO BANGKOK & MALAYSIA FOR STOCKIEST PREVIOUSLY TRIPS WERE TO THAILAND & DUBAI GIFT HAMPERS SALES FORCE MOTIVATION

48. EVERY PURPLE CHAMP IS ALLOTTED A SPECIFIC ROUTE TO BE COVERED IN EVERY BEAT AND HIS BEAT PLAN IS MADE FOR THE ENTIRE WEEK BY THE TSI UNDER THE SUPERVISION OF HIS TSE USUALLY 10-12 PCS ARE APPOINTED BY A DISTRIBUTOR. THEY REPORT DIRECTLY TO TERRITORY SALES INCHARGE (TSI). DISTRIBUTOR'S SALES FORCE IS CALLED AS PURPLE CHAMP. PURPLE CHAMP

49. INFORMATION PASSING NEED RECOGNITION VISIT AND CLASSIFY REPORTING AND DAY PLAN CONVINCE AND FINALIZE ORDER A DAY WITH PURPLE CHAMP

50. COLLECTION OF CASH OR CHEQUE ENTERING ORDER AND MAKING BILLS CONFIRMATION OF BILL LOOK AT VISIBILITY A DAY WITH PURPLE CHAMP

51. Sr. No Parameters MOP Metro 1 Overall Value Achievements Secondary Value 1200 2 Focus Category Volume Achievement (only one category) Volume in tonnes 600 3 Overall MSS Improvement 65.5% 1100 4 Big hits Achievement (2 Big Hits) 100% if both 30% if one 1100 Total Incentives 4000/- Month COMPANY INCENTIVES FOR PURPLE CHAMP

52. Modes of transport Use of IT Role of Third Party Transportation & Logistics

53. Mainly Roadways MODES OF TRANSPORT

54. The invoice is generated by the company and the stock is sent along with the invoice and a copy of it for the distributor. WINOMKAR is a software where all the data and reports are maintained and is made available for the ASMs, the BMs and SE's(Limited Access) online for making further decisions. Provides all the data, Performance reports Beat Wise, Outleat wise Sales Trends over the years and months and Inventory Report (MIS of company developed by Pune based ‘ Heerasoft ’) Documentation is required once a retailer enrolls for a display scheme or receives a visicooler or SMD or Fridge by the company Meranet is a software through which the SO reports everything on a daily basis to the ASM. Daily sales figures get synced here and the SO can view the summary at a glance. SO also mandatorily has to mail it to the ASM on a daily basis. USE OF IT & DOCUMENTATION

55. THIRD PARTY ROLE