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The Cadbury Case Study: Strategies adopted

Cadbury is a brand that almost everyone knows. Even after completion of more than 100 years, the brand is into the hearts of many people & it also leaves a significant mark amidst all the competition. Cadbury stands tall in the food production sector. Cadbury is the world’s leader in chocolates and it is also one of the topmost FMCG brands in India. Cadbury decided to enter the Indian market in 1948. Cadbury India began its operations in India by importing chocolates. On 19th July 1948 Cadbury was incorporated in India. Cadbury has a share of over 67% in the market, which is the highest Cadbury brand share globally. Cadbury now has 5 manufacturing units all over India.

Cadbury operates in India with the following categories of products: Chocolate, Confectionery, Beverages, Biscuits, and Candy.

Cadbury was performing very well since its incorporation in India But, suddenly in 2003 Cadbury came across a problem of worms. This cost them a lot, not only in terms of finance but also in terms of customer trust.

In 2003 incidents of worms in Dairy Milk were reported and news surfaced all over media. Worms were reported in around eight outlets in Maharashtra. As the news surfaced the Maharashtra Food and Drugs Administration responded. It seized the stock of Dairy Milk which was manufactured in the Pune Plant.

“It was presumed that worms got into it at the storage level, but then what about the packing – packaging was not proper or airtight, either way, it’s a manufacturing defect with unhygienic conditions or improper packaging.” Said FDA commissioner Uttam Khobragade.

All this had a huge impact on the Cadbury sales which reduced by 30% which the company was expected to increase by 15%.

Strategy Adopted by the Company after the incident:

As this stage series of incidents had a negative impact on the Brand image and its sales. It became furthermore important for the company to recover. The company adopted various projects and a very well thought strategy.

Project Vishwas: The project targeted trade, consumer, media, and employees. It adopted steps to cater to each one of them.

For Trade

  • The company launched the education and monitoring program for the retailers under which the quality checks of over 50000 retail outlets were carried out and 190,000 wholesalers were educated regarding the storage conditions
  • Press advertisement telling the ‘facts about Cadbury’ was also published in 55 trade publications about the remedial measures taken by the company channel members.
  • Posters and leaflets on the issue were also distributed to retailers, to share them with the consumers.
  • The company linked the trade with the response cell through a toll-free number and email Id.

For Media

  • The company explained its point of view to the media and also instituted a media desk that would answer every query coming from the media. It followed the strategy to clarify and gave confidence to the consumers that the product was safe to consume.
  • It also assured consumers on improving the packaging to tackle poor storage conditions and implement packaging changes in two months.
  • Company’s MD and a key spokesperson had one-to-one sessions with 31 media editors as a part of the ‘Outreach’ program.

Change in the Packaging

The new packaging launched in January 2004, had double packaging following which each chocolate was wrapped in an aluminum foil and heat-sealed for complete protection from all sides and further encased in a poly flow pack. This packaging costs a lot of money to the company but fulfilled the promise made to consumer and media. The company invested 15cr in the packaging machinery though the new packaging was higher by 10-15% the company didn’t hike the price per pack.

Ad campaign:

Amitabh Bachchan was made the brand ambassador of the company. The team came up with a strong Ad campaign to gain the confidence of the consumer.

All this added to the expense but it helped the company recover from the crisis and earned its consumer again.

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