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Cadbury The Worlds Second Largest Confectionery Company Marketing Essay

2566 words (10 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Cadbury, which is the world’s second largest confectionery company, the second largest chewing gum company, the third largest soft drinks company, is also the only company that has a chocolate, candy and gum products, is a leading a large, growing, brand-led industry. It has a great market shares and has many honest consumers, but it has also a numerous of competitors such as Altria Group, Nestle, Hershey, Ferrero, Unilever, and so on. Cadbury Company produces markets and distributes confectionery (chocolate, sugar, sweets, chewing gum, etc.) and beverage products. To the competitors, Philippe Morris that is the world’s largest packaged food companies. Nestle is the world’s largest food manufacturer, and Nestle is famous for producing instant coffee and chocolate bars. Currently has for the local market and culture-rich products, such as Chocolate and candy, bottled water, beverages and dried milk. Hershey is the largest chocolate and candy manufacturer in the North America. Ferrero Group is the world’s fourth largest chocolate manufacturer. Unilever Group is the world’s second-largest consumer products maker. Unilever operates the following two major product areas: food and household and personal care products. So, besides Cadbury, Philippe Morris, Nestle, Hershey, Ferrero also produce candy and chocolate and some companies’ scale is larger than Cadbury. That it is a great threaten to Cadbury and they are the direct competitors to Cadbury as well. And all global candy and chocolate enterprise play a great role in the market battle in contend for markets.

Competing features and competitive advantages

Enterprise’s participating in market competition is founded by virtue of capital and its competitive characteristics of the enterprise (Piccolo, 2008). Companies must create a difference between competitors in order to survive in an invincible position in the market of fierce competition (Regan, 2008). However, any one of the characteristics or conditions is not forever. So, we must continue to develop innovative competitive features.

In today’s society, competition has following major characteristics: First, the expansion of the scope of competition, mainly including: 1) the diversification of the main competition. With the economic globalization, it will further promote the social division of labor, leading to the diversification pattern of competition. 2) The globalization of local competition. Economic integration and trade liberalization has reduced the country or regional limits of globalization towards the direction of promoting competition. 3) Competition content diversity. Modern competition not only stay in the competition for the market and customers, and further extended to technology, information, personnel and even strategic partners such as multi-level competition.

Second, changes in competition mode, mainly: 1) the aim of competing has changed from the market share to compete for customer loyalty. With increased competition intensity, market share is difficult to sustain customer loyalty as competition goals; 2) the focus features of competition shifts from competition to process competition, part of the development of competition into the system from the competition; 3) the way of competing changes from competitively price non-price competition. The traditional way of price competition is difficult to adapt to these changes. Information technology reduces customer search and transaction costs, reduced services, economic globalization, national differences in the prices of the effectiveness of price competition; 4) the relationship is becoming cooperating and fights against each other. Only by establishing strategic alliances with competitors to form both the interaction between competition and cooperation, pursue “win-win” competitive effects, can only better meet customer needs, effective response to the competitive environment, competitive objectives of enterprises.

Third the innovation of competition means. 1) Conversion from visible to invisible. With the technology and facilities improving, the competitiveness of enterprises shifts to the use of modern information technology, integration, functional reorganization, driving to improve efficiency of operation with information technology. 2) Competition shifted from a single competition to compound competition. The international logistics market, competition, the unique way of competition means is difficult both to obtain and maintain competitive advantage and meet customer demands for diversity in complex, showing a variety of sales promotion and use, services, price and promotion mix of the compound variety of competition means competition situation;3) Reliance from on the internal strength to both the internal strengths and external resources. But in the face all kinds of trade barriers and market access restrictions, companies simply is difficult to compete effectively with virtue of its own resources, only an integrated use of economic, psychological, political and public relations among other factors, with the government, associations, the media and the public, etc. the formation of internal strengths and external forces work together to beat the market and fierce competition to win.

Under the new era of competitive characteristics, Cadbury also has its own competitive features – that is powerful combination, and along with Kraft to create a market. Kraft and Cadbury combining has become the world’s largest confectionery company. Through the merger, it reflects the complementary advantages both of them. First, Cadbury could help Kraft make up for disadvantaged in chocolate and chewing gum products; Second, in some Kraft, there has not yet reached the emerging markets, Cadbury has established a relatively strong distribution system. Kraft launched Cadbury now choosing the timing of the acquisition can also be said about right. From the perspective of the development to Cadbury, its current operating conditions very good, but limited by company size, development bottlenecks encountered. So by merging, Cadbury will have a brighter future.

A new kind of product and its target market

After uniting with KFT, a new kind of product will be exploited, this is walnut candy. First, the main raw material of walnut is nut, which is a nut fruit. It has many effects. For example, Walnut nutritious are rich in protein, fat, minerals and vitamins, fat containing linoleum acid and more nutritional value, as well as vitamins B and E, which could prevent cell aging, enhance memory and release aging. Walnuts also contain special vitamin ingredients, not only did not increase cholesterol, but also reduce the intestinal absorption of cholesterol for atherosclerosis, hypertension and coronary heart disease human consumption. Walnuts contain linolenic acid and calcium, phosphorus, iron, the body’s skin beauty ideal agent, regular consumption of a profit the skin, hair Ukraine, and have prematurely white hair, and loss prevention functions. Walnuts also contain many trace elements needed by the body, which are important proprietary accessories. When you feel tired, chew more walnut, with ease fatigue and stress. So, if through a special process, nuts can be made the walnut sugar, that it not only can play the role of health care products, but also a broad market. This is the walnut candy birth.

Because walnut candy is a new product to a lot of people, in order to better promote their products, to find greater and more extensive market, determine the target market is particularly important. Target market is the fundamental starting point of regional marketing. Analysis and grasp the regional marketing system, subsystem from its target market began to take marketing or target marketing positioning of thinking. Determining the target market must be looking for both demand in the market and consistent with its resources and advantages of the target market segments. Customers need is to be able to respond to customer requirements, and meet the customer’s desires and needs, and can see farther than the customers, to find and meet with customers and the request, so the key is to meet the needs of the customer better than competitors; integrated marketing is that the company will have to serve customers in all sectors interests, all sectors must be coordinated departure from the Customer Perspective; earnings capability refers to” enterprises depend on more than competitors to better meet customer need to make a profit. “

The first principle of selecting target market is that the market should demand, if there is no real market demand or potential demand, it can not be selected as the target market. Not for the company to decide what conditions should it do, but according to the social needs of the market to decide what to do.

Second important principle of selecting the target market is that: to use their own existing resources, avoid weaknesses, looking for their strengths target market. Many enterprises focuses only on market demand, regardless of their condition diversification, it is very dangerous.

Third principle of selecting target market is to pay attention to find the edge of target markets. In general, each company has its own possession of the technology, resources and operating conditions and it play a different role in marketing system. So the enterprise should treat market opportunity as a key factor in the marketing selection. But to the external enterprise, it is difficult to find such chances. Even as fierce competition among peers, so that market opportunities in certain sectors lost or diminished opportunities for efficiency, we can not blindly go outside the industry to find the target market.

Therefore, the boundary between the industry and trade office, there will be a vacuum, usually called “the edge of market opportunities.” Edge of market opportunities on the one hand some companies can still play advantage, on the other hand, because it is covert, difficult to be found in most businesses, easy access to opportunities for efficiency. If companies need to look outside the target market in the industry, major efforts should be made to find market opportunities, and select edge of the target market.

The fourth principle is to select the ideal target market, but also consider the different degree of difficulty into retirement. According to industry profit point of view, the most attractive target market should be high barriers to entry low barriers to exit.

The fifth principle is to be good at identifying potential target markets and future target markets. Opportunities in the market some demand is evident, while another is hidden behind the existing market demand for some kind of demand, which we call the potential market opportunities, corresponding to, then there is a potential target market.

Review of Prices

Price objective

Price target is the enterprise business goals. Through the pricing system, the enterprise is to make a proper price level to achieve its price objective(Steinberg, 2005). Because companies set their own price before the first target audience, the target group of their income determines their acceptable price. Then companies need to capture the market first, or first create profits as much as possible. If it is to capture the market, it should take penetration pricing, if the first to create profits as much as possible, we should use skimming pricing. It is why should have a price objective. While prices should also consider cost of production, circulation costs, profits and taxes.

Walnut candy is one of the main components of walnut, and walnuts are distributed all over the world. Therefore, the production of raw materials is very convenient, relatively low freight costs and raw materials are more abundant. So a medium and reasonable price level should be positioned in Walnut candy.

Price competition

The so-called price competition points to that an enterprise considers the cost of enterprises and products based on market and enterprises has established a competitive price relative to competitors, thus price advantage attracts consumers, realizing the purpose of profit(Orzen, 2008; Kondo, 2004). It should say that, in the current market, price is still an important factor to affect the consumers to make in consumer choice, so the use of price competition means businesses to seize the market price reduction approach is still very effective. Price competition is an inherent phenomenon of market economy which is dominated by the law of market economy, and only follows the law of competition in commodity prices and other economic laws, economic activities, to achieve greater economic efficiency.

Competition makes the consumer sensitive to very price; price competition has a strong effect. At the same time, price competitions can often significantly lowering prices and expanding market in growth companies. Therefore, the outbreak of a price war is to re-divide the market resources to expand production scale and the weak competitiveness of small businesses out. This realization of the effective allocation of resources, market price competition has certain inevitability.

Walnut candy is a fresh product for most people, because of its abundant and wide variety of sources of raw materials, so it has a big price advantage. Meanwhile, Cadbury and Kraft as a joint, for the walnut candy sales offers a wide range of channels. Therefore, walnut candy as a new product is very competitive and has a broad space for development.

Pricing strategies

Pricing strategy is that through the assessment of the demand and cost analysis the business chooses one strategy to attract customers and achieve marketing mix of pricing strategies (Größler, 2008; Farmer, 2002). The low elasticity of demand (elasticity coefficient is less than 1, demand inelastic) of goods, should be taken to high pricing strategy. Sales influenced by the prices of its small, prices low after the sales drop, while the total income increase. Elasticity of demand for high (greater than 1, demand elasticity) of the commodity, low-cost pricing strategy should be adopted. Because prices will rapidly decline sales, resulting in sales revenue. Demand elasticity for a single (equal to 1) of the commodity, the price change will not lead to sales revenue, and should refer to other standard pricing. To Walnut candy should have a low-cost pricing strategy.

For the walnut candy sales process, you can use Customer Value Innovation Strategy, which is a corporate strategic thinking. Such strategic thinking is orientated by the clients as a strategic orientation, it is based on the satisfying value to improve customers’ satisfaction and retain customers as loyal to the changing market environment, achieving sustainable development of enterprises. Meanwhile, to the enterprise, it could improve its core competitive capability to go ahead of the competitors under the Customer Value Innovation Strategy. The dynamic development of core capabilities associates to the changes customer value. If the enhancement of core capabilities can not meet the changed needs of customers, then upgraded the core competencies and is not to generate new competitive advantages. At this point, the development of core competencies should be modified of track and direction. Only when the upgraded the core competence could give customers greater satisfaction, the upgrade can be as effective to enhance this. Thus, enhancement of core competence direction and goals should be founded under Customer Value Innovation Strategy.

Key factors influence the price decisions and strategies

The fundamental factors affecting the price are socially necessary labor time value. Value determines the price. In the commodity economy, commodity prices mainly determined by market supply and demand affect prices, but can not decide the price. Price decision, the main factors affecting the price: 1) raw materials, if raw material prices have gone up, prices go up. 2) Supply and demand, short supply of natural prices, sluggish sales will be lower prices; 3) consumer psychology; product design is reasonable, they are quite attractive to consumers, or it could be not. There are major environmental factors, such as the financial crisis, inflation and so on. Financial crisis and inflation will affect the purchasing power of consumers. In determining the price, it should be taken into account various factors.

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