How Cadbury Penetrated India - 65% Market Share | Business Case Study

Summary

Cadbury dominates the Indian chocolate market with a 65% share, vastly outpacing competitors. This video explores Cadbury’s journey, starting in 1948 when chocolates were a luxury in India. Over time, Cadbury localized production, introduced cocoa farming, and benefitted from the White Revolution. Its marketing evolved from targeting children to tapping into traditional sweets markets with campaigns like 'Kuch Meetha Ho Jaye,' leading to massive growth. Today, Cadbury is a part of Indian celebrations, expanding into rural markets and continuing to innovate in distribution.

Takeaways

• 🍫 Cadbury dominates the Indian chocolate market with a 65% market share, significantly larger than competitors like Nestle, Ferrero, and Mars.
• 🇮🇳 The Indian chocolate market, now worth 15,000 crore rupees, was almost non-existent at the time of India's independence.
• 🌾 Localization was key to Cadbury's success in India, including setting up local manufacturing and encouraging farmers to grow cocoa in southern states like Kerala, Tamil Nadu, and Andhra Pradesh.
• 🥛 India's White Revolution solved the milk shortage, further supporting Cadbury's local production of chocolates.
• 👶 Initially, Cadbury targeted kids as their primary audience, but realized by the 1980s that they needed to expand beyond children as adults were not consuming chocolates.
• 🎉 The breakthrough came with the 1994 “Asli Swad Zindagi Ka” campaign, positioning Dairy Milk as a treat for all age groups, not just kids.
• 📈 Despite Cadbury’s dominance, growth stagnated by 2000 due to market saturation. The company then shifted focus to the larger Indian sweets market, which was much bigger than the chocolate market.
• 🍬 Cadbury’s “Kuch Meetha Ho Jaye” campaign successfully positioned Dairy Milk as a substitute for traditional sweets during festivals and celebrations, boosting sales significantly.
• 🎁 The introduction of Cadbury Celebrations targeted the gifting market, especially during festivals like Diwali, contributing to a major increase in sales.
• 🏪 Cadbury’s extensive distribution network, including impulse purchase points like visi coolers in small shops, played a crucial role in its market penetration across both urban and rural India.

Q & A

How did Cadbury establish dominance in the Indian chocolate market?

Cadbury's dominance in India was established through localization of production, creating a strong distribution network, and effective marketing campaigns. They localized cocoa farming and benefitted from India's White Revolution, which improved milk availability. Strategic marketing, particularly campaigns like 'Asli Swad Zindagi Ka' and 'Kuch Meetha Ho Jaye,' helped them grow beyond just children's products and into adult markets, expanding the overall chocolate market in India.

What was the biggest challenge Cadbury faced when entering the Indian market?

The biggest challenge was the high cost of imported ingredients, particularly milk and cocoa, which made chocolates expensive for the general population. India’s post-independence milk production was low, and cocoa was not cultivated locally. Cadbury overcame this by sourcing milk powder and importing cocoa initially, while gradually introducing cocoa farming in India and benefiting from the White Revolution, which improved milk production.

How did Cadbury overcome the lack of cocoa production in India?

In 1965, Cadbury established an experimental cocoa farm in Kerala and encouraged local farmers to grow cocoa. Over time, they expanded this initiative to Tamil Nadu and Andhra Pradesh, creating a sustainable local supply of cocoa and reducing reliance on imports.

How did the White Revolution impact Cadbury's production in India?

The White Revolution, a nationwide movement launched in 1970, turned India into the largest milk producer in the world. This increased availability of milk allowed Cadbury to locally source a critical ingredient for their chocolates, which in turn helped reduce production costs and made chocolates more affordable for Indian consumers.

What marketing strategy did Cadbury use to grow its brand in the 1990s?

Cadbury launched the 'Asli Swad Zindagi Ka' campaign in 1994 to break the stereotype that chocolates were only for children. This iconic campaign targeted adults, using ads that promoted Dairy Milk as a treat for the 'kid inside everyone,' leading to significant growth in their adult consumer base.

Why did Cadbury’s sales start stagnating by 2000, and how did they respond?

By 2000, Cadbury had captured a large share of the chocolate market, leading to diminishing returns due to market saturation. To continue growing, Cadbury shifted focus from selling chocolates as an everyday treat to positioning them as alternatives to traditional Indian sweets for celebrations, starting with their 'Kuch Meetha Ho Jaye' campaign in 2003.

How did Cadbury penetrate the traditional Indian sweets market?

Cadbury used the 'Kuch Meetha Ho Jaye' campaign to position Dairy Milk as a substitute for traditional Indian sweets during major celebrations and festivals like Diwali and Raksha Bandhan. This strategy was highly successful, leading to a 10-fold increase in sales within a year and deepening their market penetration.

What role did Cadbury’s distribution network play in their success in India?

Cadbury's extensive distribution network played a crucial role in their success. They ensured that their products were available in over 1 million retail outlets, including small local shops, chemists, and departmental stores. Their strategic use of visi coolers in stores increased impulse purchases, further driving sales.

What was the significance of the 5-rupee Dairy Milk packaging?

The introduction of the 5-rupee Dairy Milk packaging was significant because it made chocolate more affordable and accessible to a larger portion of the Indian population. This move, coupled with improved distribution, helped Cadbury expand its customer base and increase overall sales.

What are Cadbury’s future growth plans in India?

Cadbury's parent company, Mondelez, plans to target untapped rural markets in India for future growth. Rural areas have yet to be fully reached, and Mondelez aims to expand their distribution network to capture these potential customers.