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How does Cadburys discover potential competitors?

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Introduction

In all types of business, there is some sort of element of competition. As consumers, this is the perfect situation for us because there is a wider variety of products and services. For some businesses, competition is not beneficial and potentially disastrous for the business. Because of all this competition, businesses are required to identify new strategies in order to compete and win over the consumers. They also have to work hard to bring in new business. In terms of mastering this art, there is no company better at doing this than my selected business, Cadburys. Cadbury's is a confectionary giant, dominating not only the UK market, but is renowned worldwide. Via great marketing strategies and many other ideas, Cadbury's have been market leaders since 1993 (Source: BBC News) Cadbury's have to compete in the following categories in order to become the cream of the crop: * Price * Products * Marketing * Promotion * Customer Services How does Cadbury's discover potential competitors? Cadbury's do this by carrying out a competitor audit. The competitor audit is just a basic analysis of the market. There are usually obvious competitors, who offer the same service/ product. However, there are many that may be a business advertising an alternative to the products Cadbury's sells. Here is a completed customer audit for Cadbury's: Name of Competitor How does the competitor compete on product? i.e. What products do they sell? Are they of a better/poorer quality? ...read more.

Middle

However, if rival businesses also lower the price on a product, the action is known as a PRICE WAR. This is an effective strategy in driving smaller companies out of business. As well as one less competitor, the business would incur a larger market share. In terms of relating this to Cadbury's, the price war tactic is rarely used as they are market leaders and any further price wars could result in a fall of market share. Cadbury's main competitor in terms of price has to be confectionary rivals, Nestle. The prices are fairly similar, with Cadbury's Dairy Milk bar; attracting newsagent prices of around 50p a bar. The same goes for the Nestle creation, Galaxy. Furthermore, in terms of value for money, the products are fairly identical. Using the same products as examples, the smaller versions include six breakable pieces of milk chocolate for the same price. From a personal note, I feel the gap could be larger between the two companies. This would be achievable by Cadbury's raising their prices to make more money. This is justifiable because Cadbury's are the market leader and lots of people buy their product. However, this may backfire because people may pay the lower prices for Nestl´┐Ż's Galaxy bar, causing Cadburys' to lose market share and question whether they are still market leaders. How does Cadbury's compete in terms of product? Cadbury's has a range of different products within the confectionary market. This includes chocolate (Dairy Milk the most notable), chewing gum (newly produced Trident Soft) ...read more.

Conclusion

On the chewing gum side of the business, Trident Soft is being marketed and receiving heavy promotion because it is a new product and this just entices the customers more into buying the product. In terms of the prices that Cadbury's pay for the extensive advertisement, it is totally justified by the raise in market share they receive. How does Cadbury's compete in Customer Services? It is really tough for Cadbury's to compete in this field, as they bare market leaders and they are expected to perform fantastically by the public day and day out. The public have come to receive a good level of customer services for Cadbury's. There has been one notable problem with the products Cadbury's have provided recently, which aroused in 2006. This involved a batch of Dairy Milk chocolate was found to have E-Coli inside. This type of incident is very rare nowadays, however, due to the business incurring Quality Control checks. This was introduced in 1980 and insured that every products was checked before exiting the production stage. Cadbury's have also got a local and worldwide customer services department to deal with any problems customers may be experiencing. However the company is expected to have a lower number of complaints because they sell a high- quality product. In terms of competing to be customer service provider, all businesses have to have an excellent level of customer services or they would get masses of complaints. Remaining the market leader for 15 years running, Cadbury's must be good otherwise people would not buy the product again. ?? ?? ?? ?? William Burrows - 10B3 10/6/08 Unit 1 - Investigating Business AO6: Competing in Business ...read more.

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