ASSIGNMENT OF DISTRIBUTION MANAGEMENT ON

Submitted to: Prof. Ajay Bansal

Submitted by: Abhay Kumar Singh 11PGDM M001 Sec - C

TABLE OF CONTENT
Objective of the Project..3 About the Company4 Mission & Vision5 Company Analysis..5 Product Mix6 Market Segment & Strategy..10 Marketing Objective..10 Promotion and Advertising Objective11 Branding Objectives...11 Creating Brand Image11 Website Content.11 Competitor Reaction...12 Product Overview...12 Pricing Strategy...13 Factors Influencing Pricing.13 Distribution Channels..14 Motivating Channel Members.14 Data Collection Approach & Methods16 Questionnaire...17 Findings...18 Suggestions.18 Conclusion...18 Bibliography19

Objective of the project

This project report is on the THE STUDY TO ASSESS THE EFFECTIVENESS OF DISTRIBUTION CHANNEL OF CADBURY INDIA. This report is made for Cadbury India with their distribution points. Objective of the every organization is to satisfy the needs and wants of their customer in which distribution channel plays a vital role. The study will be done taking 100 as the Sample Size. The sampling method used is Stratified Random Sampling . The source for conducting survey was taken from the Distributors Red Outlet List. This study helps us in the following way: To know performance of existing distribution channel To know if there are any flows in the channel To know their retailers satisfaction level with respect to the existing channel

About The Company

Cadbury, a subsidiary of Cadbury Schweppes is a dominating player in the Indian chocolate market with strong brands like Dairy Milk, Five Star, and Perk etc. Dairy milk is in fact the largest chocolate brand in India. Cadbury India Limited now stands only second to Cadbury UK Limited in sales of Dairy Milk. The company is pushing the gifting segment, through occasion linked gifts. Chocolates contribute to 64% of Cadburys turnover. Confectionery sales accounting for 12% of turnover is contributed largely by eclairs. Cadbury also has a strong brand Bourn Vita the malted health drink category, which accounts for 24% of turnover.

Brief History
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 concoction. From these modest beginnings emerged Cadbury Schweppes that is today the leading manufacturer of confectionery and beverages in the United Kingdom. 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. 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 Bourn vita. The same year saw the launch of Cadburys Milk chocolate for millions of Indians. Through 50 years of investment in capital and marketing, the scale and scope of our operations has expanded to cover a range of brands in the chocolate, sugar confectionery and malted food drinks segments. We 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 over200 people across the country. And operates in one of the fastest growing chocolate markets for Cadbury Schweppes group across the globe.

Mission Statement
Increase the width of chocolate consumption with low price point pack Maintain image leadership through a superior marketing mix Be a significant player in a gifting segment

Vision Statement
Promotion of brands carrying mass franchise without compromising on quality Better product quality and packaging Efficient working capital management Increase the market depth including rural Indian coverage.

Company Analysis
Strengths
Cadburys India is the market leader in the confectionary market. For more than six decade, the company has established a market portfolio that has positioned it well in the confectionary industry. Currently the company has a market share of more than 70 percent of the chocolate market. The company has a worldwide operation. This gives the company a chance to transfer products which have been successful in one market to the other emerging market. The company operates in more than 200 countries in the world with the main markets in USA, UK, Ireland, South African and with other operator in emerging market like India, China, Thailand, and others. Cadbury India has five companies owned manufacturing plants in locate at Thane, Induri ad Malanpur, Bangalore and Baddi. It has four sales offices in New Delhi, Mumbai, Kolkata, and in Chennai. Cadbury India has good human resource policies which have ensured the growth of the company in a recent survey. Cadbury India was ranked the 7 th overall greatest place to work and was also ranked number 1 in FMCG Company in India by the Great Place to Work Institute. The company has been improving its ranking in the recent past for the last 10 years. All over the world the company employs more than 60,000 employees operating in more than 200 countries. One of the most important factors in the overall growth of the company has been heavy investment in technology. Through innovation the company has placed new recipes in the market which ensures reduced cost
5

of production. Investment in the new technology has ensured the growth of the company in the market. With a worldwide operation the company has been investing in technology which is first tried in its main market and then deployed to the emerging markets like India. The company has a strong management team with a strong centralized management structure. His ensure that there is standardization of operations procedures in all its plants. The company also has put in place effective corporate management structures which ensure timely disclosure of information on the performance of the company. This is important for the overall financial management of the company.

Weakness
The company has not been able to standardize its operation in all the countries where it operates. For example while the company has a strong market share in India and other emerging market, its market share in the established market like US market has been declining. Its US market share is not strong enough to guarantee its market leadership. There has been declining market demand for chocolates with the emerging health concerns. The company has not done enough to defend its products in the market or put in the market other products which take care of the health concerns of the customers.

Products Mix

Market segment
The company is currently serving a wide range of market ranging from the adult to the children population. The company has been taking a wide market population appeal in its marketing strategy. However this marketing strategy is targeting the female adult population. Apparently this is the leading market segment in consumption of chocolate products but the adult population has been neglected especially in the rural areas. More than 50 percent of the Indian population is female population and therefore the company is targeting large market.

Marketing Strategy: Target Market(s) & Positioning

At present Cadbury doesn't have varied segmentation and the same marketing mix is offered to many categories of customers. However, there are several target groups, which are recommended for getting more profit. 1) Demographically it can be youth target group (people 16-25 years old) and children target group (approximately 6-15 years). As for youth the reoffered successfully, but as for children it will be better to propose products fortified with vitamins and microelements. 2) In segmentation base by psychographic criteria proposing new products with minimal content of fat, light products and products without preserving agents and genetically modified products will gain more customers who care about their health. 3) Geographically, offering or redistributing already existing products on Asian market segment may be quiet profitable too. 4) Giving special discounts and propositions to loyal customers will help Cadbury to maintain present and attract new ones.

Marketing objectives
To introduce the product successfully in the Indian market within a period of 6 Months. To ensure that there is a high level of awareness of the presence of product in the India market by using effective marketing strategies

10

To put in place a wide range of marketing strategies available in the Indian market including e-commerce strategies to ensure that there is overall growth of the product in the market. To acquire about 30 percent of the female adult market segment within period of 3 years from the introduction of the brand in the market.

Promotion and advertising objectives

The product will be launched in the market during a Beauty competition which will be organized by the company. The company will carry out a number of advertisements in the mass medical and online. There will also be outdoor advertisement activities in the billboards, and popular places. The company will also carry out off street promotion and sampling activities which will give consumer the true taste of the product. The company will also establish a site for the product to promote sales and to have timely response from consumers.

Branding Objectives
The success of the product in the market will depend on the branding image. In this case the company will create a personalized brand images. To ensure the growth and continues of product in the market the company will ensure that there is no brand which goes to slow growth or exist stage in the product life cycles. The brand will be distinct from other through package.

Creating brand image

To create a brand image, brand personality approach will be used. In this case mostly the launch of the product will be tied to females characteristic which they can easily identify with. This will identify the characteristics of the brand in relation to the target market. This will use key elements that enhance female appeal like styled, confident, sophisticated, and self assured.

Website content
The website will be the main communication site between the company and its customers. Therefore it is expected to be user friendly and to contain as much information as needed by the users. Specifically the website will contain information like, the product and its description, the
11

price of the product, how to order for the products, where to pick the product in the (the nearest company store), where to post comments about the product online, investors information, careers, and many more information that will be needed by the users. The website will be easy to use by arranging the contents in a simple manner. Most of all it will provide an interactive space where the users can have online chat with the company.

Competitor Reaction
Cadbury should develop new products and promote them domestically as well as internationally. Such product/market growth approach will ensure that the company has diversified range of products which are available and well-recognizable in many countries of the world. Such strategic choice will provide the company with enormous comparative advantages over its competitors and will help it to better cope with the hurdles of the global economic crisis. Most importantly, such strategic step will erase the common stereotype claiming that consumers mostly associate Cadbury with chocolate. Evidently, Chocolate is Cadbury' marketing approach much facilitated the company's success over the last decade. However, considering the challenges of the global competitive markets, this strategy will not be suitable any longer. Hence Cadbury should transform it into more powerful and innovative global image. The variety of new high-quality and reasonably-priced products will add value to the business activity of Cadbury and will win new overseas markets for the company. This task would require the company to carefully design and develop innovative brands of its products which are not yet present on any of the foreign markets, and which will be potentially demanded by the consumers (i.e. target markets).

Product Overview and Strategies to Consider

The main goal of every proper marketing strategy consists in studying what, where, when and how much does consumers buy. Basing on the fact that Cadbury products are mainly chocolate and cocoa products is will be netter to base marketing strategy on the facts of their nutritional value which is kindly for health, because according to sociological researches the majority of people prefer to buy food products with nutritional labeling exactly for this reason.

12

Pricing Strategy
That factor that today customers prefer to buy healthy food make a low - pricing strategy based on advertising that chocolate is useful for health and company cares about their customers' heath, and because of this they can make prices on some types of chocolate lower than its business rivals price and in this case he will get more customers. This strategy is also based on philological aspect of people's mind.

Factors Influencing Pricing of Cadbury

Internal Factors:
Corporate and marketing objectives of the firm The image sought by the firm through pricing The characteristics of the product The stage of the product on the product life cycle Cost of manufacturing and marketing Other elements of the marketing mix of the firm and their interaction with pricing.

External Factors:
Market characteristics Buyers behavior in respect of the given product Bargaining power of major customers Competitors pricing policy Government controls regulations on pricing Societal considerations.

Cadbury Objective of Pricing

Profit maximization in the short-term Profit optimization in the long-term A minimum return on investment Targets sales volume Target market share
13

Deeper penetration of the market Entering new market Stabilizing prices and margins in the market.

Distribution Channels
Distribution, or lmnt, is a fundamental part of marketing mix which ffts sales. Cnftinry market use all types of distribution channels from vendors on the strt to nvnin strs, museums to vending mhins, and large rtilrs. Its suly chains sns the glb and nsists f litrlly thousands f ntributrs; hlt rduts start with sugar, nd milk rdutin frm frms ltd rund the world. However dbury's strategy consists in buying int thr rltd high growth sgmnts, where this company n itliz n its existing distributin hins and get rgni growth, quisitin f nw brnds and ffiiny sving. Cadbury's distribution channels include the manufacturing warehouses where the chocolate production takes place. The first distribution channel is manufacturer, then wholesaler, then retailer and then it is the consumer, which is the end result of the channels of distribution for Cadbury's.

Channel Distribution: Push and Pull

The promotional strategies will be carried out in collaboration with the distributors who will be the middlemen used in the distribution channel. The company will use pull strategies to entice consumer to purchase its product. Instead of giving out free sample the company will use discount strategies but it will also use off street sampling to help the consumer to directly experience the product.

Strategies of Motivating Channel Members:

The following are strategies:

Salary, wages and conditions of service:

To use salaries as a motivator effectively, personnel managers must consider four major components of a salary structures. These are the job rate, which relates to the importance the organization attaches to each job; payment, which encourages workers or groups by rewarding them according to their performance personal or special allowances, associated with factors such
14

as scarcity of particular skills of information professionals or librarians, or It is also important to ensure that the prevailing pay in other library or information establishments is taken into consideration in determining the pay structure of their organization.

Money:
Money remains the most significant motivational strategy. Money is the most important factors in motivating the industrial workers to achieve greater productivity. It possesses significant motivating power in as much as it symbolizes intangible goals like security, power prestige, and a feeling of accomplishment and success. The desire to be promoted and earn enhanced pay may also motivate employees.

Staff Training:
No matter how automated an organization or a library may be, high productivity depends on the level of motivation and the effectiveness of the workforce. Staff training is indispensable is an indispensable strategy for motivating workers. The library organization must have good training programmers. This will give the librarian or information professional opportunities for selfimprovement and development to meet the challenges and requirements of new equipment and techniques of performing a task.

Information Availability and Communication:

One way managers can stimulate motivation is to give relevant information on the consequences of their action on others. To this researcher it seems that there is no known organization in which communicate, cooperate, and collaborate with one another. Information availability brings to bear a powerful peer pressure, where two or more people running together will runners. By sharing information, subordinates compete with one another. Studies on work motivation seem to confirm that it improves workers performance and satisfaction.

New packaging of Cadbury products

Over the next few weeks Cadbury will work towards introducing either a heat-sealed or a flowpack packaging that offers a high level of resistance to infestation from improper storage.Meanwhile, Cadbury India has announced a three-step strategic programme involving the distribution chain and retail channels so as to ensure that the product reaching the consumer is of high quality. Called Project Vishwas, the programme aims at building awareness among retailers
15

about storage requirements for Cadbury products, assistance in improving storage conditions at the retail end and strengthening packaging of the Cadbury Dairy Milk range. Also, the company will reduce the bulk packaging from 60 bars to 22 bars. Each bulk pack will be shrink-wrapped. This is expected to minimize the sale of loose packs to the retail trade. The teams will conduct checks on storage facilities and Cadbury-supplied chocolate dispensers and talk to owners and educate them about the appropriate handling and storage of chocolates. As a precautionary measure, they will also replace questionable stocks immediately, reducing significantly the chances of damaged products reaching the consumer.

Current opportunities
In the confectionary market, there are a lot of opportunities that currently exist. There is a large female market segment that has not been tapped. Market data shows a high consumption of chocolate in the urban market it still remains low in the rural market. There is a large rural market that has not been catered for. These marketing strategies will therefore look on tapping into the urban and rural female market. Internet usage in India has been growing at a very high rate and majority of the urban population is connected to the interest. Since there is not company that is currently using online sales, the company will look into using this strategy to boosts its sales.

Potential Future Opportunities

In the future the company expects the chocolate and the general confectionary market to grow in India. Therefore it is looking at introducing other confectionary products targeting the same market. In the future the company will offer its other products online to the specifically targeted market.

Data Collection Approach

The Data was collected through two sources

Primary sources:
a) Questionnaire b) Personal interaction
16

 Secondary sources:
a) Related information from internet b) Organization Report

Data Collection Method

Retailer Survey Personal Interview Questionnaire

Questionnaire:
Q.1) What is the nature of the outlet? a) Cadbury b) Nestle c) Shared Q.2) How is the relationship with the distributor? a) Good b) Bad Q.3) How many times the distributor visits outlets per week? a) Daily b) Alternate c) once in a week Q.4) How many times he is expected to visit? a) Once b) Daily Q.5) Are Cadbury product delivered on time? a) Yes b) No Q.6) Are you satisfied with the supply each time? a) Yes b) No
17

Q.7) Sales per week? a) 0-10 b) 10-20 c) Above 20

Findings
Most of the outlets are shared. The basic problem is that the supply from the plant to the depot and then to the distributors takes a long time due to which the distributors are not in the position the supply the required quantity to the retailers. On an average the sales per week of the retailers is between 0-20 cases. The sales people and the distributor have maintained good relationship with the retailers. On an average the expected visits are daily.

Suggestions
The company has to convert Nestle outlets into Cadbury outlets by giving them promotions like schemes, gifts, proper supply. The company has to put on their best efforts to convert the76% shared outlets into Cadbury monopoly outlets by giving promotional activities and also by on time delivery of stocks which plays a very important role. 36% of the retailers expect alternative days visits instead of daily visits, the outlets which are non potential outlets expect the distributor to visit once a week therefore the company has to supply accordingly. To make the satisfaction level of the retailers to 100% the company has to supply properly to the remaining 34% outlets surveyed.

Conclusion
Distribution Channel plays a very important role especially with respect to the confectionery industry because if the product is not available on time, the consumers will switch on to other brands and the company will lose its market share and hence an effective distribution channel is the need of this industry. The distribution channel of Cadbury is effective.

18

Bibliography
All the information needed to complete this project is obtained from the following sources: 1. Company Website: www.cadburyindia.com 2. Search Engines 3. Market Developers 4. Distributors.

19