Cadbury diabetic chocolate PDF

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Summary

new product...

Description

Student ID Number (Do not include student name as anonymous marking is implemented)

CRO18465764

Programme Title

Business Management Extended Degree (QA)

Module Title

PRINCIPLES OF MARKETING

Module Code (listed on Moodle and in LTAFP)

BUS020C416H

Module Convenor

Daniel Panford-Quainoo

Coursework Title

Cadbury Diabetic Chocolate

Academic Declaration: Students are reminded that the electronic copy of their essay may be checked, at any point during their degree, with Turnitin or other plagiarism detection software for plagiarised material. Date Submitted

Word Count 2486

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24.07.2020

Table of Contents Introduction...........................................................................................................................................3 Product description...............................................................................................................................3 Market Analysis.....................................................................................................................................3 Market trends....................................................................................................................................4 Key competitors.................................................................................................................................4 Consumer’s attitudes and behaviours...............................................................................................5 Issues and Opportunities...................................................................................................................5 Segmentation, Targeting and Positioning..............................................................................................6 Segmentation....................................................................................................................................6 Targeting............................................................................................................................................6 Positioning.........................................................................................................................................6 Marketing mix....................................................................................................................................6 Product..............................................................................................................................................6 Price...................................................................................................................................................7 Place..................................................................................................................................................7 Promotion..........................................................................................................................................8 Conclusion.............................................................................................................................................8 Reference list.......................................................................................................................................10

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Cadbury diabetic chocolate

Introduction The fundamental purpose of marketing is to attract consumers to your brand through messaging. This assignment will describe Cadbury diabetic chocolate, a new product launched by the company on the market in May 2020. I will analyse its market activities, market share, STP, customers behaviours, strategies in terms of segmentation, targeting and positioning and the recommended Marketing Mix.

Product description John Cadbury opened the first grocer’s shop in 1824 with tea, coffee, cacao, and drinking chocolate, but the manufacturing business was born in 1831. Since then the company expand and produce over 115 chocolates types and brands like Dairy Milk, Fudge, Roses, Decker, Twirl, Boost, Picnic, Snack, Wispa, Freddo, Crunchie, etc. My new product for Cadbury will be diabetic chocolate. Cadbury has already a dark chocolate on the market, but it has in it recipe sugar. The new diabetic chocolate will replace sugar with a chemical healthy sweetener called Erythritol. This sweetener was approved by the World Health Organisation (WHO) in 1999 and FDA in 2001(Sollid, 2019). The high percentage of cacao and the sweetener will make this chocolate not only healthy for diabetic’s people, but also good for the people who need to lose weight. The new Cadbury diabetic chocolate will contain 85% cocoa, fat reduced cocoa, cocoa butter and instead of sugar we’ll use Erythritol which is an alcohol sugar with no effect on insulin level and glucose. Making treats healthier is difficult for the manufactories, but the Government put pressure on the market. According to Amy Price (2019), Senior Food and Drink Analyst the Government asked for “the treat categories to reduce sugar and calories”. Our new product reduces sugar and calories, but also has no effect on glucose or insulin level.

Market Analysis Kotler (2014) argues that ‘a winning company is one that consistently exceeds customer expectations’. 3

Global Confectionary Market size is expected to reach in 2022 $232 million, but also become more differentiate and the companies need to adapt to the new trends such as vegan and less sugar products for being competitive on the market (Lindell and Thompson, 2019). The UK Confectionary Market is turning to quality over quantity. Now the market it is worth £1.1 billion to the UK economy and it is expected by 2025 to reach £5.5 billion. According to George Eustice, food and forming Minister in the UK the number of chocolatiers are growing and that it will become an opportunity to increase the exports around the world (Smith, 2018).

Market trends According to Mintel, the confectionary market is growing and is estimated to reach in 2025 £5.5 billion. Confectionary market growth makes governments around the world to be concerned about childhood obesity. The confectionary market it is mire orientated to the quality. According to Innova Market Insight last year “Indulgent & Premium” was number two in chocolate market. Premium trend is reflected also in flavour trend. The classic flavours like hazelnut, almond, caramel, peanut and nougat are still on the top. But the chocolate market has a growth in different flavours like strawberries, tiramisu, brownie, Oreo, coffee, matcha tea, sea salt, chilli and more percentage of cocoa content. Sweet alternative is another trend of chocolate market. Because of the childhood obesity confectionary manufactories use sugar alternative and no added sugar. But chocolate brands claims that using sugar alternative affects chocolate taste and quality. Storytelling, The Power of Plants, Wellness Flavours, Macronutrient Challenge, Tapping into Texture are the top five chocolate market trends in 2020. According to I.M.I survey there are 40% of global consumers interested to know the story around a brand. Storytelling is focus also on taste, flavours and recipes (Devenyns, 2019). Healthy trend is very important for the sugar free chocolate market and it is coming like a response for a multitude of nutritional recommendations. More and more consumers are looking for healthier food and sweets. The sugar free global market is growing and expected to reach in 2023 $3.05 billion. The UK sugar free market account only 5%, but it is growing year by year.

Key competitors Global sugar free market is dominated by Hershey, Godiva, Lindt and Sprunghi, Russel Stover, Think Thin and Guilin Chocolate. There are intense competitions among these companies and they compete with strong brands identity and through advertising budgets. 4

The top Cadbury competitors are Mars, Hershey’s, Lindt, Nestle, Kraft Foods, Ferrero, Dove, Godiva, Kinder and Milka. To maintain the consumers interest the chocolate industry is coming with new creation and Cadbury use the best services for creating better chocolate.

Consumer’s attitudes and behaviours It is important for the organisations to know and understand the attitude of their consumers. The consumers become more concerned with sugar and cacao contents, that why the sugar free or no added sugar and the high cacao percentage are more popular. Global consumers behaviour is changing and now they prefer “less and better”, also they are interested in no sugar added and less calories. The UK consumers do not want to reduce the sugar varieties.62%of the UK consumers are looking for smaller packs, bars. Almost half of the chocolate eaters 42% prefer luxury chocolate than a larger amount of regular one. According to Researchgate (2019), chocolate consumers are interested when they buy chocolate about brand (24%), price (16%), personal experience (12%), helthrestrictions and allergies (11%) and less interested about flavour (4%), nutritional quality (3%), country of origin (2%) and packaging (1%). Chocolate eaters tend to change their behaviour and attitude influenced by external source such as: social media, friends, TV advertising, brand apps etc. Consumers with diabetes are concerned not only about the sugar content but also about calories in chocolate.

Issues and Opportunities Considering that the consumers are orientated to healthier products Cadbury lunch the diabetic chocolate with 85% cacao content. There is an increasing demand for chocolate with high percentage cacao content among male, female, teenagers and people with diabetes Type 2. The market penetration rate is low, but the potential of growing it is high and Cadbury use the current market position of their existing products. The company face also threats and challenges in the market as high level of competition within the industry. Considering the new chocolate it is a good alternative for the consumers who follow different diets for losing weight diabetic chocolate won’t be a niche product.

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Segmentation, Targeting and Positioning Market segmentation is the process of splitting a particular group of consumers into smaller, more detailed categories and helps us to know better our customers.

Segmentation For diabetic chocolate market segment as a new entrant our target market would include diabetic people, consumers that follow diets, but also chocolate eaters who like high percentage of cacao content. In general there are four types of segmentation demographic, psychographic, geographic and behavioural. Demographic: is based on age, income and occupation. Chocolate consumers are more interested of the sugar content and now they are orientated to the sugar free market. Psychographic: market is divided on basis of attitude, lifestyle and motives. This segment includes consumers with health attitude and refined lifestyle with enjoyable eating patterns. Geographic: include neighbourhood, areas, code, city, region, country etc. this new diabetic friendly, sugar free chocolate will be sold to customers in the whole of the UK and Europe initially. It will be sold as a new niche product satisfying a recognised gap in the market through a mass distribution system.

Targeting Targeting market defines a segment of customers based on their characteristics. For the new product Cadbury will target population ranging from year 15 to 85 living in UK and Europe.

Positioning Positioning is the act of designing a company. Cadbury diabetic and diet chocolate will be positioned as a high quality and premium chocolate. It will be a slightly higher priced product in comparison to other Cadbury chocolate bars, which will give the perception that the new product is different, special and superior to its competitors, and that being manufactured by a household name such as Cadbury, potential customers will trust the quality and claims of the new product.

Marketing mix To promote its product or brand in the market an organisation uses marketing mix. Before they will launch a new product needs to take a set of four decisions: product, price, place and promotion.

Product Any business starts with a product or a service. Product is the first variable in the market-mix. 6

The new diabetic chocolate will satisfy customer’s needs and the quality of the product will be beyond Cadbury traditional. For sugar free chocolate in confectionary industry it is used a sweetener called Maltitol which still has 2-3 kcal per gram. Our chocolate replaces this sweetener with a different one called Erythritol. It is a chemical sweetener like the other, but it can be found in natural foods like beer, wine and cheese ferment. The health benefits of the diabetic chocolate come from the cocoa and the higher percentage of cocoa in the chocolate, the better. The high percentage of cocoa and the sweetener in our diabetic chocolate will improve insulin sensitivity. According to the Bastyr University dark chocolate contain antioxidants like polyphenol which produce better heath advantages. The advantage of Erythritol is that it has zero calories, but the taste and texture is similar with sugar. The most important advantage for our customers is that Erythritol has no effect on glucose or insulin level. The future of our product with the new sweetener will become more popular not only for the diabetic consumers, but also will become a sweet alternative for the all healthier consumers. In general the confectionary and chocolate manufactures use quality printed laminates for packaging. Cadbury for the new diabetic chocolate will use high quality recyclable printed laminated keeping the same purple colour for the new product.

Price The cost of the product, the advertising, marketing expenses, distribution cost etc. will be considered when choose the product price. Also we need to look at the competitors before choosing our price. Cadbury approach for pricing will be penetration pricing. The price for UK will be £1.99 for one chocolate or £3 for two. Penetration price it is used when a new product is being launched and the price will be raised once the promotion period ends and the market goals are accomplished. Penetration price have a few advantage like increase customers interest, reduce competition and brand loyalty, but also disadvantage like potential price wars, decrease brand perception and poor customers experiences by increasing the price later.

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Place Place in the market-mix refers to the distribution channel of a product. To deliver at the right time, place and price companies pay attention who manages their marketing channels. The distributors are very important partners for all businesses. Cadbury distribution will be a multichannel coverage approach, which use agents, wholesalers and retails. The company will introduce the diabetic chocolate in retails, stores cafes following the distribution pattern of other Cadbury products. In addition to the usual distribution channels that Cadbury uses, new distribution strategies to also include health stores for example like Holland and Barret should be considered. To have a distribution network strong the company need to set and follow a few steps. Need to sign up deals with dealers and distributors, to keep track of channel dealers, to keep inventory management and tracking to see which areas are selling our product better and which are not performing. Also the company need to switch channel members when needed and to look on market changes.

Promotion Promotion is the 4th part of the marketing-mix and contains all activities that include communicating with the customers about the product. The promotional mix for the new Cadbury diabetic and diet friendly chocolate will consist of: Social media like Facebook, YouTube, Twitter, Instagram, Bloggers and Vloggers etc. The advantage of social media used for advertising is the large number of people who interact on those apps. Print advertising in newspapers and magazines, Television and Radio will be another way of promotion. To make customers more interested by the new product will use promotional samples and money off coupon with retail outlets and in railway stations. Sponsoring a diabetic charity will be a good promotion, but also will contribute at the company image. A.I.D.A model will be applied to highlight promotion. Awareness: it would be captured using celebrities, influencers, vloggers, bloggers and advertising on YouTube, Facebook and other online platforms. Interest: will be generate by the sales promotion which will make the consumers to try the new Cadbury diabetic chocolate. To captured customers interest the advertising message will be “Your piece of healthy sweet”.

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Desire: social media campaign will convince all the consumers that the new product is suitable for them. Action: Cadbury will be sure that the consumers will know from where they can buy the new product. Positioned on social media and magazine the customers will find website offers, and the product will receive feedback. The advantage of social media used for advertising is the large number of people who interact on those apps. To advertise the new chocolate Cadbury will use newspaper, magazine, television and social media, but also will be stores promotion that mean the customers gets one piece sample to taste.

Conclusion To conclude I have found for the new diabetic chocolate the marketing-mix is very important and if we are not focus on all elements the marketing-mix would not be completed. The sugar free and diabetic chocolate market will continue to increase and the consumers will continue to become more conscious about quality and taste. Healthier trends caught the attention of the manufactures and as the result the diabetic chocolate will be a growing category in the confectionary market. The new product will appeal to the diabetic people and the consumers orientated to the healthier products. The pricing of £1.99 or two for £3.00 will give the perception of being affordable by all whilst still being of a superior quality. The distribution of the new product will be successful and also create new channels for Cadbury products through health shops. The promotional mix will ensure a mass coverage of the UK and Europe reinforcing the brand name, informing a new target market of this wonderful treat which previously they could not purchase from an established and large chocolate manufacturer as Cadbury. When the above detailed marketing mix is applied to the new idea of a diabetic and diet chocolate and sold within fast growing market and increasing demand, this will then contribute to the prestigious brand of Cadbury and its profits and success.

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Reference list                 

https://www.cadbury.co.uk/our-story?timeline=1824 . (Accessed at 09.07.2020) https://www.webmd.com/diet/what-is-erythritol#1. (Accessed at 09.07.2020) https://www.healthline.com/nutrition/erythritol. (Accessed at 09.07.2020) https://reports.mintel.com/display/919570/?highlight . (Accessed at 13.07.2020) https://www.alliedmarketresearch.com/confectionery-market. (Accessed at 13.07.2020) https://www.statista.com/outlook/40100000/156/confectionery-snacks/unitedkingdom?currency=gbp. (Accessed at 13.07.2020) https://store.mintel.com/uk-chocolate-confectionery-market-report. (Accessed at 13.07.2020) https://www.newfoodmagazine.com/news/65759/uks-chocolate-exports-up/. (Accessed at 13.07.2020) https://www.businesswire.com/news/home/20190226005939/en/2019-UnitedKingdom-Confectionery-Market---Analysis. (Accessed at 13.07.2020) https://www.confectionerynews.com/Article/2018/04/04/Cocoa-chocolate-andsugar-confectionery-worth-1.1bn-to-UK-economy. (Accessed at 13.07.2020) Kotler Philip, 2014. Kotler on Marketing: How to Create, Win and Dominate Market. Reprint Edition. Free Press. Kotler, P. and Armstrong, G.(2018) Principles of Marketing. (17 th edn.) Pearson Education Limited. Kotler, ...