Cadbury’s Analysis

Introduction

Cadbury has been upgrading its manufacturing facility in Australia since 2001 and has become one of the most popular confectionery brands and flavours in the world.

Cadbury has a total of fifty per cent market share in the confectionary market, selling 50 % of the top 20 selling chocolate singles in the world. Cadbury is a market-oriented company, therefore its success relies on satisfying the needs and wants of its consumers. It is able to do so by constantly listening to its consumers and its ability of getting adapted to the constant changes in the environment. In response to these changes, Cadbury seeks to create new products, improve on its existing core brands and browse new ways to add value to those brands.

Summary

The given case study recognizes the unethical practices used by Cadbury using palm oil instead of cocoa butter in one of their products to cut down on their expenses. This activity of Cadbury therefore left its consumers and other environmental organisations (WWF) attacked. It tried to gain back their consumers trust by their high profile announcements of using the fairtrade logo very shortly for the Dairy Milk Brand in key global markets. Due to the negative response of customers, Cadbury decided to get back to its Cocoa-Butter only formulae and apologized for non-environmental friendly decision made by them.

This report illustrates that with corporate governance, ethical behaviour is an integral part of every business (referring to Cadbury in this case). It outlines the key features of the case study and majors out in the marketing/advertising aspect of Cadbury. It also outlines the relevance of self-concept to marketing and the connection between motivational strategies and consumer behaviour, with a brief conclusion on the case and separate recommendations for Cadbury.

Unethical behaviour and lack of Corporate Social Responsibility may damage a firm’s reputation and make it less appealing to its stakeholders, whereas on the other hand, ethical behaviour and efficient corporate social responsibility can bring significant benefits to a business.

Objectives of Research

Chocoholics:

• NZ confectionery market including seasonal products: $490m
• NZ chocolate market including seasonal products: $315m
• NZ block chocolate market: $100m
• NZ Easter egg market: $28m

Chocolate is believed to be a stress buster , energizing brainwaves and decreasing your stress level because it contains ingredients that cause the brain to release endorphins(chemicals that make people feel better) & serotonin(anti-depressant). This is why people hog on chocolates or other sweets when they are angry or depressed. Chocolates therefore act a relaxing notion beneficial to your health. Research shows that the use of chocolates is on the rise global production of cocoa climbing up to 2% each year, reaching approximately 3 million tonnes.

An anarchistic study by psychology professor Paul Rozin discovered that chocolates are eaten because of its taste. People eat chocolates because of its taste and its flavour. The activation your body gets every time you eat a chocolate provides feeling to your taste buds makes you come back for it again and again.

Marketing & Self-Concept

The principal marketing goal for large business organisations is to focus on the most profitable opportunities in global markets in their own product category and can take the form of quality or quantity or a mix of both.

There is a simple logic behind gaining profit with value-by adapting the discernibility and volume in the global market, a business is at its best to provide its consumer with quality products accompanied by the best value for money. Another marketing aim is to provide innovation in products along with quality and price which will therefore help increase the volume of sales and market share. Innovation is an approach of being unique and different, an approach that every firm aims by developing their methods of conducting a business.

This approach helps firms to stay ahead of the competition. It can be fulfilled by identifying the new opportunities, adapting to the new changes in the environment, assessing the market research information and eventually allocating resources to commercialise on those opportunities. A firm that can easily adapt itself to the changing business environment and the constant changes in its consumers’ perceptions, needs, wants and interests will be able to satisfy its consumers accurately with the most innovative products.

The advancement of Cadbury’s Yowie in autralia elucidates these marketing strategies and provides a link between marketing and self-concept. This self-innovation by Cadbury has proven to be a successful product in children’s confectionery market in Australia. It even got voted as the best new confectionery product in the world in 1997 by the world’s grocery press. Yowie is a value for money, awakening and attracting chocolate product relating to a significant cause-the environment. This is how it exemplifies the innovation process from Cadbury of adding more value to a product in a socially fascinating way.

This is how Cadbury has built its self-concept by providing its consumers with the benefits that they desire. Self-concept is significant for the study of consumer behaviour because most of the purchases made by the consumers are directly inclined by the image a particular firm has made of it. Marketers need to evaluate this approach of self-concept which will lead them to the development of more effective marketing programs. Compliance and consistency play an important role in establishing strong relations between self-concept, image of the firm and the final buying behaviour.

Appropriate research, analysis and evaluation of the factors affecting the self-concept and their effects on consumer purchasing behaviour will provide more effective market strategic planning.

Motivational Strategies

The research done for this project shows that consumers do not evaluate the products very accurately & precisely which therefore makes it difficult for marketers to coherent their motivational drives. Consumer buying behaviour depends vastly on the exchange between the inner self and outer urge. Decisions made in the market are influenced by moral values, social relationships, cultural adherence & environmental conditions. We will now extend the list of ways for promotional strategies. there are various strategies used to attract consumers towards the brand and its products. Every consumer segment has its own individual motivation behind buying a particular product. The marketers therefore need to identify and isolate those strategies and perform their promotional activities. This makes it easier to target products and advertising in a more meaningful way to increase consumption.

Referring to the given case, the food managers have also paid attention to two types of strategies to resolve motivational conflicts:

• Maslow’s Hierarchy Of Needs
• McGuire’s Psychological Motivations.

These requirements play a significant role in predominance of consumer behaviour. Motivational conflict is an approach that deals with the colliding motivational drives of the consumers. Therefore here the product is used as a solution to such collision of drives. Maslow’s strategy has already been briefly examined in the given case, therefore we skip to McGuire’s Psychological Motivations.

It is a classification system that organizes theories of motives into 16 categories which helps marketers to detach motives likely to be involved in various consumption situations.

Cognitive Preservation Motives:

Identifies whether the brand has been performing well consistently.

• Need for Consistency
• Need for Attribution
• Need to categorize
• Need for objectification

Cognitive Growth Motives

Includes self-control, variety, and difference of products and achievement of desires.

• Need for Autonomy
• Need for Stimulation
• Teleological Need
• Utilitarian Need

Affective Preservation Motives

To reduce stress, express self-identity to others, protection of ego and need of reward.

• Need for Tension Reduction
• Need for Expression
• Need for Ego Defence
• Need for Reinforcement

Affective Growth Motives

To increase self-esteem and develop mutually satisfying relationships with others.

• Need for Assertion
• Need for Affiliation
• Need for Identification
• Need for Modelling.

According to McGuire ,these divisions would help to resolve the motivational conflicts of consumer buying a Cadbury.

Cadbury and its Decisions

Eventually, coming to one of the major hurdles of the case study i. e. , Cadbury using palm oil in its dairy milk product. Cadbury being a large family-owned business is the giant of New Zealand chocolate manufacturing and the 4th largest confectionery business in the world. Therefor it becomes the first of all brands to catch the attention of the general public. Consumers not only have high expectations out of Cadbury but they even enjoy Cadbury’s nature of reciprocating focus mainly on its consumers.

But due to the flash of the palm oil incident, customers stopped buying chocolates in droves and The company lost its title of “New Zealand’s most trusted brand. Cadbury taking the decision of trimming its chocolate block sizes by 50g and replacing the expensive ingredient called cocoa butter by the environmentally perplexed and tremendously cheap Palm Oil as a cost cutting strategy which was aspired to be a smart response to the on-going global recession but foolishly turned out to be a public relations hazard.

As for the very first time, Cadbury did not target its consumers in this decision-making process and focused only on their own costs and profit, not its effectiveness. Palm oil is a pugnacious constituent and is one of the principal reasons for global warming and accelerated habitat extermination leading to the deaths of orange-tans in vast numbers and is also considered to be the “single biggest threat for the survival of orang-utans in the wild”. Abundant amount of the oil comes from the land where existing rainforests have been lacerated and conflagrated just to make way for Palm oil plantations.

Consumers got even more excited on Cadbury’s use of palm oil even though there are so many manufacturers out there using palm oil in their products because they had blind trust over Cadbury, it inheriting its brand loyalty since so many years and suddenly they hear in the news next morning that the market leader of the confectionery industry having the largest market share of all the role model for all beginner manufacturers has set the wrong example and followed a non-eco-friendly practice of using palm oil instead of its traditional cocoa butter just to cut down on its raw materials expenditure.

This is why Cadbury lost its consumer loyalty all of a sudden. Conclusion Cadbury finally lost against consumer pressure and announced that it has decided to go back to cocoa butter instead of the environmentally harmful palm oil. Cadbury New Zealand managing director Matthew Oldham said he was “really sorry” and that the decision was in direct response to consumer feedback, including hundreds of letters and emails. Therefore proving that Cadbury can never let down its consumers to make profit and that it is surely a market-oriented firm.

Members of the nearly 3500-strong Facebook group ‘Take palm oil out of Cadbury chocolate bars’ were jubilant at this news. Auckland Zoo director Jonathan Wilcken also congratulated Cadbury on their decision. Recommendations Cadbury needs to have more diversity in its product portfolio and use its profits in the needed areas of the business, for example-R;D, rather than depending only on its confectionery and beverage market. According to today’s lifestyle, due to rising obesity, more than half of the world has become diet conscious and is obsessed with healthy food and calories counting.

Thus this is a threat for Cadbury affecting the demand for its existing core brands. New markets are an opportunity for Cadbury. In countries like China and India, where population is reaching the peak giving rise to consumer wealth and spending power, demand for confectionery products will also increase.

References

1. Peter Stimpson and Alastair Farquharson Cambridge International AS and A Level second edition. * Cambridge international IG business Coursebook.