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Report on: Marketing strategies undertaken by Cadburys and how this helps them develop a product range.

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Task 2

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Date: 20 May 2007

Report on: Marketing strategies undertaken by Cadburys and how this helps them develop a product range.

Introduction

I have recently being employed as a junior marketing manager and have being asked to produce a report providing information on the strategies of the market leader Cadburys. It will be produced using Microsoft word and internet and library research will be used.

Market research is carried out to identify customer needs and views in relation to potential new products/services, or extending products or services.  The principles of market research are to refine marketing strategies and activities to satisfy customer’s requirements. After customer needs have been identified they need to be designed, it is essential to do all of this so that the business can make a profit to invest in advertising and other new products.

Findings

Cadburys started as a small grocers shop in 1824 by John Cadbury, in Bull Street Birmingham, and has developed and expanded from then on. The business changed its products to chocolate in 1831 when it manufactured chocolate drinks and cocoa. The business is now the leader in the UK confectionery market. This is due to effective management and identifying key marketing strategies to anticipate its customer needs and wants.

Marketing helps a business to make accurate decisions on the information it provides. Cadburys use market research techniques to help understand its competitors, customers and the environment it is in, as these are the main three things that affect the business from the out side. There are many different types of marketing research some are more effective than others. They identify opportunities and threats so the business can come up with new ideas to overcome these or proceed with them.

There are various research stages that Cadburys should do to help them develop a new product range successful.

Defining the objectives of the research to make sure that the objectives are SMART objectives so that they can make sure that the objectives are relevant and that they can be measured. This enables Cadburys to make and change objectives if they are not working so that they can achieve their aims of the research.

Planning this involves having a time scale and planning activities out to fit in with the time scale so that it can be on target. This can be applied to Cadburys, as they should plan every thing out to make sure that it is achieved properly and on time. For example if Cadburys did not use planning then they might lose a lot of money and wasted time as they might miss things out when doing their research as they did not plan it out first.

Collection of data this is gathering information from different sources of research then putting it all together to see what you have found out, by analyzing it to see what sort of information you have got for example primary/secondary then evaluating it to see if the information you have gathered is relevant and what you can do with the information you have got (how are you going to use it). This can be applied to Cadburys when they are doing their own research.

There are different types of market research techniques used within a business. As there are many different ways of collecting data.  For example research can be grouped into primary, secondary, qualitative and quantitative research.

 Research is usually carried out to find out directly from the market how a new product may be seen. Cadburys use primary research, as it is very effective as it allows them to find new opportunities and ideas before its competitors. For example Cadburys could do a door-to-door survey to find out how many people have heard of their products and how they have heard of them. This could tell them if a sponsorship is the right type of media to use to promote awareness, because if more consumers have heard of their brand name through seeing billboards then this is the right type of media to use to increase their sales. The draw back of using primary research is that Cadburys competitors like nestle, mars and Hershey might have already done a survey by using similar questions. Also some consumers who might have answered the survey might of being lying. This type of research is more expensive because it is first hand but it is more likely to meet precise needs of Cadburys research. In addition since this type of research is used to find out how a new product may be seen, if it will be successful or not. This can help Cadburys when developing a new product range as it determines what its market will think of the new idea. Cadburys can understand its market and what it wants. Primary data is needed to find out what consumers think of a new product or advert. However it is labour intensive and slow.

Examples of primary research sources: Telephone surveys, Face to face surveys, in-depth interviews, focus groups, observing etc.

Research makes use of research already carried out by someone else for some other purpose, for example the Internet, books, newspapers etc. Secondary research is widely used as it has a low cost. It is not effective enough to help businesses gather individual information, as it is available to mostly every organization. This type of research is not detailed enough to help Cadburys or any organization to make decisions about how to run their business or carry out activities or operations within the company. Also some secondary information might be out of date because the markets change rapidly. This type of research is useful to Cadburys in providing a comprehensive insight into a markets size, segments. Although this research can be accessed by Cadburys competitors, Cadburys may see opportunities that their rivals may have missed. Each business may use this research differently, so see things differently to everybody else. It allows the company to compare past competitive and customer behavior to what is happening now from the information this provides. It is a cheaper way of researching that may give the company a chance of seeing new opportunities.  For example secondary information gives Cadburys insight into its competitor’s activities and existing products; this may give them ideas how to come up with new products by enhancing existing ones that are already available. This gives an initial understanding of a market.

Secondary information can by obtained internally or externally. Internal is within the company. This could be done using data such as stock levels, to see which products are selling the most, prices and sale records. This will show Cadburys which techniques worked best (introduction prices etc). External secondary data is research out side the company. This can be obtained from a number of sources.

Examples of secondary research methods: Internet, Books, news papers, financial reports, news bulletins, radio etc.

 Research is in-depth into people’s attitude and their motives for buying a product. It is undertaken in small groups called focus groups or interviewers. The number interviewed is likely to be small so might not be as reliable. This type of research asks open questions to get a more detailed answer from consumer; this gives more informative data to the business. Cadburys should use this research method because it could help them find out relevant information they need to know when developing their advertisement, for example qualitative research finds out information about consumers lifestyles, habits, buying patterns and it could help Cadburys find out what TV programs they watch so they know which ones to sponsor to increase their sales. Qualitative research would help Cadburys understand their customers, as they would get more specific information to help them identify what they want, so they can produce a product range around this.

 Research produces facts and figures (numerical statistics). It uses multiple-choice questionnaires that ask closed questions e.g. do you like this product? A. Yes B, no. These are fixed answers that make analyzing easier. This would help Cadburys measure sales week by week, including those of competitors before and after the sponsored advertisement is broadcasted, this will help them determine if the advertisement has helped them increase their sales and if their competitors have decreased due to Cadburys attracting them to buy their products.  

Primary is new research that has been found using strategic, technical and data bank research and secondary is existing research like in books.

This is business direction strategies like new opportunities and planning new markets.  This type of research would be beneficial to Cadburys as it would help them to plan its future direction, for example identifying a new internal market to enter to make sure that the market that Cadburys has chosen is the right one for them.

This enables a business to look at its market more precisely, so that its current activities can be improved. Cadburys could use this to improve its promotional tactics within its market.

This involves collecting new or updated information about the markets segments and consumer interests to the organization. Cadburys could use this type of research to find out what consumers think of their products so that they can improve them so that they will be at customers satisfaction, this could help them increase their sales of their products.

Primary research uses sampling to make predictions about the whole market based on a sample. This type of research involves using a number of individuals to gather information, on what everybody thinks about something in the whole group. It is very effective and will help Cadburys to find the relevant information they need and will be more accurate. There are a number of sampling methods available; this gives you a choice to see which ones are suitable for your research. This method will help Cadburys when developing a new product range as it is accurate and precise. There are certain types of sampling that are more appropriate for different types of research. These are stratified sampling, random, quota, cluster, judgment and systematic sampling. The most appropriate for Cadburys is quota sampling as this helps them to understand their consumers better.

A quota is set for each target sub group in the consumer profile. Cadburys should use this type of research because it will give them the specific information they want from the people who buy and use their products, instead of wasting money and time on asking consumers who have never heard of the company or its products because they will not be able to give them the information they are wanting.

All sampling methods have errors that might occur for instance respondents might give the answer they think the researcher would want them to say. Also the researcher might not full understand what they are trying to find out so inappropriate questions might be asked. The sampling might get a low response rate which means that information can not be balanced out to what people think the most, because it is uneven.

Table to show which research methods target which category the most.

Cadburys definitely use qualitative research and quota sampling method because they are both linked together. Qualitative research helps Cadburys to find out what kinds of people buy their products so when this is done quota sampling can be used to target the people that use their products. To find out and gather information from them on what they think of the products and what improvements can be made, which will help Cadburys in the future when making new products and help them establish what their customers are like to see who might be buying their products in the future. Both of these research methods are primary research as they are gathering individual information to what Cadburys wants to find out. In addition they help the organization to understand their customers better, which will overall help them when producing a new product range, as they are directly finding information from the targeted audience.

Conclusion

On the one hand Cadburys is a very successful company and has being running for many years. They have done in-depth market research to get this far and have a selection of products to offer from this. This has allowed the business to determine which marketing techniques to use and which is best suited when gathering right information when developing a new product range. However on the other hand, Cadburys have a lot of competition from other leading companies listed in the table below. So need to constantly review their marketing strategies to keep ahead of the rest.

2004 $ Share

Total

Chocolate

Sugar

Gum

Cadbury Schweppes

10.0%

7.8%

6.9%

26.0%

Mars

9.2%

15.2%

3.1%

0.2%

Nestle

7.8%

12.3%

3.6%

-

Hershey

5.8%

8.4%

3.1%

1.7%

Kraft

4.9%

7.3%

2.7%

0.5%

Wrigley

4.9%

-

0.3%

36.0%

Recommendation

Overall from the above information I recommend that Cadburys should use the above two types of research and sampling methods, as they seem the most appropriate for why the research is being done. Also they will provide the company with direct information on what they are trying to find out. What its customers want? So that they can develop this through a new product range. However other research methods should still be used, but having qualitative and quota as the main ones.

By Michaela Louise Burnett          Tutor Karen Porter                                                    

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