The Graph shows that Mars-Wrigley own about 20% of the market compared to Cadburys 15% which makes Mars a major competitor. However Cadburys is known to have a strong command in the UK, therefore the implementation of the new product is to boost Cadburys market share and provide a more stiff competition to match Mars-Wrigley.
Secondary Research:
Reports suggest that men are likely to purchase chocolate as snacks while at work in a rush whereas women prefer sharing occasions as it helps share the guilt.
Women are heavy consumers of chocolate confectionery. For example, 24% were found to be 4+ consumers of chocolate confectionary types in the past year, compared to 17% of males. The female population grew 3% over the period 2003-08, and is predicted to grow at the same rate in the next 5 years which will mean good news for the market as a whole3. Within the report, consumers at the age of 12+ were asked “For which ONE of these occasions do you tend to buy chocolate confectionery most often?” the graph below details the answers of the consumers.
Source: BMRB/Mintel
The graph shows that most chocolates are consumed when at home while others tend to have it on the move as a form of a snack. Mintel suggests that Cadbury has revealed that UK sales climbed by 12% in the first half of 2009, saying that it benefited from the "stay-at-home" culture, brought on by the recession4this can be seen as a good development plan for the new product as we can target the chocolate as being a “home snacking” product. Whereas only 5% of people surveyed had suggested that chocolates are part of their daily lunch while a mere 3% showed that they used chocolate for cooking. Therefore the product being developed should appeal to consumers who generally purchase confectionary items for home snacking or while on the move.
In addition to this, during the years of 2002 and 2003 most confectionary sales fell from £3,365 million to £3,280 million due to health risks. However with the implementation of low fat less sugar confectionary items may help boost sales and demand as consumers would acknowledge the fact that health measures have been placed to help decrease obesity.
Marketplace:
Confectionary is known to be a large market making it the fourth largest market in the packaged foods section in the world. The graph below will show how confectionary items have grown within years and by expanding the market more with the introduction of new products would mean that demands would be met as well as profit margins would increase:
The confectionery market has grown steadily over the past five years at a rate of 5%. Growth in developed markets, which represent around 60% of the total by value, has been at around 3% per annum whereas growth in emerging markets, the remaining 40%, has been strong at around 10% per annum5.
Therefore this shows that emerging brands can prove to be a success and with the input of low fat less risk chocolate bars, would add to the success if the product was going to be developed. Cadburys report that in 2008 their main bran which is dairy milk had an increase in revenue by 11%, developed and emerging markets also increased by 4% and 12 % respectively6, thus showing positive figures for brand new products being introduced into the market.
Primary Research:
Primary Research Objectives:
The primary research I will be conducting must be relevant and must fulfil certain objectives that are relevant for the product concept. Primary research must be taken seriously and accurately, as it is time consuming and costs money. The primary research objectives are:
- To reveal whether there is an interest for new product idea?
- How often consumers will purchase the product?
- What factors affect the choice of a customer when buying the product?
- The likely expenditure per consumer?
- The likely ingredients the product should have?
- Whether chocolate is a normal eating habit?
I will ask a total of 10 questions, which will be directed towards Cadbury and the product. In addition information on consumer buying habits revolving around the product. This will help me to understand the needs of the consumers and indications will provide me with information on potential sales and demand.
The sampling method I will choose is cluster sampling; the reason for this is I will select an area such as a shopping mall for my sampling due to many various ages being there. This way I will have more positive and realistic results from my questionnaire as it will be answered by the potential target market most likely to purchase the product.
Questionnaire:
The purpose of this questionnaire is to identify potential customer needs for a new product being developed by Cadburys. The chocolate bare being developed is in the planning stages therefore customer wants and needs are a big necessity for Cadbury and the product will include what the consumer wants depending on the answers of this questionnaire.
- What is your gender?
Male Female
- What is your age?
5-13
14-20
21-30
31+
- What brand of chocolate do you normally purchase?
Mars
Cadbury
Nestle
Lindt
Other
- How often do you buy chocolate?
Daily
Weekly
Few times a month
Hardly
- When buying your product how important do you consider each of the following?
Very Important Quite Important Not Important
Price
Brand
Packaging
Quality
- How much do you roughly spend on a chocolate bar?
£0.40-£0.90
£0.91-£1.50
£1.51-£2.50
- What size chocolate bar do you usually buy?
Small
Medium
Large
- Do you prefer your chocolate plain or with a filling?
Plain
Filling
- If you answered Filling- What filling do you prefer?
Orange Mint Caramel Biscuit Other
- What type of Chocolate do you prefer?
Plain Milk White Dark
Thank you for your time.
Purpose of Questions:
I have kept my questionnaire short and concise in order to get accurate results from those surveyed and avoid inaccurate results from usually long and detailed questionnaires. I have used a mix of open and closed questions, quantitative and qualitative to allow better analysis.
I gave each person a general summary of my proposed business idea; I asked the questionnaire and recorded results accordingly so taking up minimal time. In my interview I have come up with the following answers:
Question 1:
The purpose of this question was to find out whether more men like chocolate then women and vice versa. However in order to get accurate results, the questionnaire was aimed at both genders equally thus leading to the product being targeted for both men and women.
Question 2:
This question indicates the age groups of the interviewees. It will give me rough idea on how many people from certain age groups will try out the product. The results show that the majority of people interviewed were aged 14-20 followed by 21-30. Thus from this information promotion can be targeted towards the popular target market and the product should appeal mostly to this age group.
Question 3:
These results show that 40% of the interviewees prefer Cadburys than any other brand. However close second was Mars which is known to be a major competitor to Cadburys, therefore during development, the product must differ to that of Mars products so that customers can get attracted to the product more.
Question 4:
The results of this question suggest that most of the people surveyed prefer purchasing chocolate daily therefore showing a huge demand in the market for chocolate. Therefore by introducing new products Cadbury can keep up with these demands hence getting a loyal customer fan base and also the chance for the company to increase profits and prove worthy competition to other brands
Question 5:
The above tally chart shows how certain factors hold importance with the different range of people interviewed. I will list the factors in order of importance.
Price seems to be the most important factor affecting consumers whilst they are buying products. This is of high relevance and will become helpful for the company as the product is intended to have a unique selling point which is high quality, low fat and less sugar.
The next important factor for consumers is that of quality. Like every one else all consumers want quality products for their money and no one likes to buy low quality products as they have disadvantages . Therefore the product should be of high quality to provide products for the consumers.
The last two factors are Packaging and brand. Packaging can also be considered as an important factor as it is relatively in close competition with quality. However in this case the packaging does not seem to bother the consumers as they are more concerned about the price and quality of the product rather than its looks. Brand is of much importance, as all customers require is quality products at good prices. Most quality products are from popular brands and I feel popular brands are for the customers who like to be trendy as well as keeping up the reputation of the business is of importance too.
Analyses of questions 6-10:
Question 6 shows that 60% of consumers prefer to spend less than £1 on chocolate bars therefore while developing the new product, the bar should be at a competitive price to what other brands are selling. Offers can also be given out as an introduction to the market such as two bars for the price of one or each bar would include a chance to win a holiday or a car etc.
Question 7 suggests that the size of the chocolate bar should be medium rather than large. Most people consider larger bars as being more in demand however as the results show, demand is high for medium sized chocolate bars maybe due to the recent health laws and by implementing low fat less sugar ingredients, this may make it an ideal snack for people to have while on the go or while at home.
Question 8 proves that chocolate bars with fillings are in high demand which leads to another stage in development. The bar should have a filling of some sort in order to fulfil consumer needs and wants.
Question 9 suggests that the filling that consumers want most is mint which is ideal for the new product as this would make an appropriate chocolate bar to introduce. The USP would be low fat less sugar chocolate bar filled with Mint with a chocolate layering. This therefore would attract customers to purchase the product.
Question 10 shows that while mint is a good filling the outer layer should be milky which is once again ideal as Cadbury can expand the ‘dairy milk’ brand into milky mint.
4 Principals of marketing:
Price – The product as shown in the questionnaire results would be between 40p-90p.With competitive prices consumers would be more attracted to purchase the product as well as a chance to increase market share.
Product- The product being sold after careful research and analyses, in order to meet consumer demands would be the a milky chocolate layered mint bar with less sugar and low fat which would be the USP of the product. The chocolate would be called ‘Cadbury Ice Mint’.
Promotion- Cadburys is known to have immaculate advertisement techniques such as that of the Gorilla playing drums advert. The same advert could be used due to its popularity with the exception of a different product of the same brand which is the ‘Cadbury Ice Mint’ chocolate.
Packaging- The packaging would be green reflecting the mint feeling of the product with the trademark Cadbury logo as well as the ingredients on the back to show the consumer that it is a low fat product but with the same taste.
SWOT Analysis:
Strengths:
- The global confectionery market is an attractive and growing market. Cadbury leads this market with unrivalled strength and breadth of participation.
- There is always chance for growth as well as new emerging products are always being introduced by Cadbury in order to meet demands.
- 10% market share in the UK as well as factories throughout the country
Weaknesses:
- Very few products are being introduced by Cadbury and with the introduction of the new mint chocolate may prove to be a successful expansion of brands.
- The Cadbury has many different kinds and taste of chocolate bar selling in UK; in addition various other brands are also sold throughout the UK. Therefore this would decrease the chance of the demand for customers to choose Cadbury chocolate bar to purchase.
Opportunities:
- As the product is being introduced in the UK only, there is a strong chance for the company to find out the trends and tastes of the British people hence developing the product to meet consumer needs.
- If the product deems a success this means that there are vast opportunities for expansion of the product due to Cadbury having factories located all around the world.
Threats:
- Competition such as Mars and Nestle are multinational organisations that have proved worthy competitors to Cadbury and there is always a risk of other firms increasing their market share
- There is a growing concern of obesity hitting the UK and the confectionary market is being blamed for majority of this health scare. Therefore the product may be deemed as a failure due to low sales as consumers may feel that chocolate bars lead to obesity.
Profit and Loss Account:
The profit and loss account calculates the overall level of profit made by a business; it does this by recording all the businesses costs given within a period of time and calculates the net profit by taking away the gross profit.
The profit and loss account shows a net profit of £2,172500 which means by the end of the first year the business is may be gaining profit. However this could easily improve over the next year due to the fact that the product maybe a success thus leading to exports of the chocolate bar into various other countries to test the sales levels there.
Evaluation:
Recommendations:
The concept of introducing a new Cadbury product into the confectionary market has vast prospects, and has a lot of scope to expand as proven by the above feasibility study. The report shows that there is a gap in the market for Cadburys to innovate new products and by introducing this new product concept can lead to Cadbury expanding its brand as well as proving worthy competition for other multi-organisations such as Mars. Furthermore, with the introduction of low fat less sugar flavours may build up consumer loyalty as the recent obesity reports suggest that confectionary items are to blame with Cadburys ‘Ice Mint’ the consumer can regain back their faith in confectionary products without having to worry about their health.
Overall the product concept seems marketable and can also fill all the potential gaps left in the market which can result in more consumers for Cadburys leading to potential increases in profit and market share.
References:
David Jones (2009) Cadbury sees chocolate eating rising in recession (Online) Available at: (Accessed 14th August 2009)
Linda Rano (2008) Mars-Wrigley merger creates world's largest confectionery player (Online) Available at: (Accessed 14th August 2009)
Author unknown (2008) Chocolate Confectionery – UK (Online) Available at: (Accessed 15th August 2009)
Author unknown Cadbury benefits from stay at home consumers (Online) Available at: (Accessed 15th August 2009)
Author unknown Marketplace (Online) Available at: (Accessed 15th August 2009)
Author unknown Our strengths (Online) Available at: (Accessed 15th August 2009)