Product Mix Decisions and New Product Development

Marketing planning begins with formulating an offering to meet target customers’ needs or wants. To achieve market leadership Cadbury has offered products of superior quality that provide unsurpassed customer value. To reach this status Cadbury has perfectly designed its product mix. Cadbury worldwide has a very strong brand presence and an even stronger product range.

However, in India alone, Cadbury has not unleashed its entire product line. It has selected its few mega-brands and released them to gain an appreciable market share. The product mix of Cadbury in India includes Chocolates, Beverages, Biscuits, Candy and Gum. Cadbury chocolates as a product line is the most successful in India and has a huge product width too.

Segmentation

One notable form of customer segmentation that Cadbury utilizes is behavioural segmentation, which is based on actual customer decision-making processes towards Cadbury’s products. Once dividing these customers by that base, they target them by providing specific product offerings. The relevant segments are the following: The Break Segment, Impulse Segment and Take-home Segment.

In the Break segment it is placed as a snack which people can eat at tea-time or as a dessert substitute. As an Impulse segment product it is strategically placed at eye level or counters where the consumer would buy it at an impulse. Both the Cadbury dairy milk block-size and bite-size could be purchased on impulse, depending on its packaging and its presentation. The take-home segment would include Cadbury celebrations which have to be consumed at home due to its sheer size.

Cadbury has introduced various products for different customer segments so that every customer segment has different expectations of price from the product. Therefore maximizing the returns includes maintaining right price level for each segment and then increasing moving through them.

To this extent Cadbury was successful in developing its products for the rural market. It came out with the RS. 5 dairy milk packing and the same for 5-star too, the two of its most popular products. Another rural success for Cadbury was through its Perk chocolate that specialised in high glucose content, perfect for the rural folk and priced at just RS. 5.

Cadbury modified its chocolate product line not just for the rural folk but also for the urban areas. It came out with the relatively expensive Temptations and Bournville and a new variant of Dairy Milk in the form of Silk. These products further have variants in different flavours. Where there is a perk available for RS. 5 there is also a Silk available for RS. 180.

Line Modernization, featuring and pruning

Product Lines need to be modernized. Companies plan improvements to encourage customer-migration to higher-valued, higher-priced products. Modernization should also not appear too early (damaging sales of the current line) or too late (giving the competition time to establish a strong reputation). To this extent Cadbury brought in Silk at the perfect time when Dairy Milk was already a well-established brand and there was nothing more they could have done with regards to its promotions. We all must have noticed how the promotion focus of Cadbury has shifted from “Kuch meetha ho Jaye” for Dairy Milk to “Miss me Kiss me” for Silk. They are now featuring this new modernized product which would earn them a lot more in terms of revenue. Which is also why this new product is priced higher than the old one.

Pruning of product lines is also something that Cadbury has done from time to time. We all remember the snack Cadbury bytes that we can no longer see in the market. Same goes the case for Cadbury Chokie and Cadbury Wowie. These products were discontinued as opportunity costs to promote the newer better products like Bournville.

Packaging

Cadbury successfully uses its packaging as a marketing tool. It performs many sales tasks: attract attention, describe the product’s features, create consumer confidence and make an overall favourable impression. The Cadbury Logo Brand names act as a simple perceptual cue that identifies a product as one people are familiar with or one they associate with particular attributes or features. The famous Cadbury white/purple script logo is unique and original, yet simple, familiar and somehow approachable. There is some element of a guarantee about the product created by the signature logo.

The appetizing visual of two glasses pouring milk into the signature is also well known and provides a pictorial heuristic for the perceived benefit of “a glass and a half of full cream dairy milk. Cadbury is also instantly recognisable because of its iconic purple packaging. Colour has emotional significance and can prompt swifter recognition to packaging than either written words or imagery. Cadbury uses colour for quick brand recognition across its many forms of marketing communications, for example, in outdoor advertising and television advertising.

Cadbury’s particular shade of purple has also long had associations with royalty and luxury. Cadbury’s signature colour is considered so valuable to the company for brand recall and brand recognition that it has spent millions of dollars in legal fees attempting to prevent other chocolate companies such as Darrel Lea from using purple in their marketing communications.

After the Cadbury worm controversy the company took extreme measures to ensure the consumer of their safe packaging. The new Purity Sealed packaging was launched and investment worth RS. 15 crores was made towards new packaging. The new metallic poly-flow used was costlier by 15%. Double wrapping was used to reduce infestation possibility.

With the help of above all activities Cadbury makes a place inside the heart of Indian people. And Indian Customer thinks that there is no substitute of Cadbury chocolates. It takes a long time to build up this kind of a relationship with customers and it has lead to the capturing of 70% of chocolate market in India.