The Marketing Challenge

Published Date: 02 Nov 2017

Analyse the marketing strategies used by the company and discuss how it attempts to use them to sustain its competitive position in the market place.

Marketing is the way in which an organisation matches and meets the needs and wants of its customers. Kotler (2008) defines marketing as 'satisfying needs and wants through an exchange process'. Businesses usually plan to operate over a long period of time so they must ensure they have a plan to forecast what marketing techniques & strategies they are going to use over the coming years.

Cadburys mission statement

The company that I am going to analyse the marketing strategy of is the well-established chocolate company Cadbury's. The company does put the customers first making them marketing orientated but primarily to younger consumers by making their produce affordable and attractive to children. Cadburys mission statement is 'Cadbury's means quality: this is our promise. Our reputation is built upon quality: Our commitment to continuous improvement will ensure that our promise is delivered'. This means that Cadbury prides itself on the quality of its products and their main focus is to provide the consumer with a product they would expect from a chocolate manufacturer such as Cadburys and nothing less.

SWOT & PEST analysis

If we conduct an environmental analysis on Cadburys we can evaluate the potential effects of external factors to predict and formulate survival and growth strategies. The political & economical factors that affect Cadburys are any changes in government policies for example; if the interest rates went up it would result in less consumer expenditure, no new jobs and Cadbury would not want to borrow from the bank for any expansion or new products. If the rate of employment goes down and inflation went up this could affect the running costs and consumers will have less money to spend on luxury goods like Cadburys which will affect profits. This could also happen if the minimum wage was lowered, as an advantage it would mean cheaper running cost for Cadburys but low sales due to consumers lower income.

The social factors that affect Cadburys are any trends that may occur, there is already a growing trend of people snacking and eating on the go, but this works both ways as more a more people are becoming health conscious and are watching their weight because of the national obesity crisis and with pressure from magazines and celebrities to be "size 0" but as the public opinion of Cadbury's is high there are no big reasons to stop consumers from buying their products except the takeover by Kraft foods in March 2010 which created widespread disapproval from the British public as it could put 30,000 jobs at risk.

Technological factors that affect Cadburys could include improvements in technology and new equipment and machines that may be able to produce faster or better quality products. This would mean that Cadburys could cut down on their staffing and have a more automated process which would result in higher profits. Maintenance is another factor that affects the running of Cadburys because if machines break down they need to be replaced or repaired immediately as it could result in great losses in money. Cadburys will need to keep up with any technological advances if they want to remain as one of the market leaders. Medias such as the internet allow cheap advertising and selling to a larger consumer group.

Cadburys strengths are many some of which being that it is properly the most well-known chocolate and confectionary company in the world. It is the second largest confectionary company in the world and owns brands such as Orangina, Snapple, Dr. Pepper, 7 Up, Mott's, Bubbilicious and Trident. According to Cadburys (2009) they employ over 45,000 people working in over 60 countries and make over 300 million Pounds profit a year. Cadburys also has many weaknesses in the form of high production costs as nearly all production takes place in the UK also In today's society healthy eating plays a major part in consumer buying decisions as the Government is pushing the policy of '5 a day'. Cadburys as a major supplier of chocolate may be affected in the long term as people seek alternative to chocolate in the bid to stay fit and healthy. For Cadburys to remain competitive they have to diversify their products to fit in with their consumers new ideology for example low fat option and also encourage that these treat scan be part of a healthy lifestyle.

The opportunities that are available to Cadburys are expansion into different countries/markets and to gain and maintain market leadership over the confectionary market. Cadburys could also introduce some more new product lines or expand on their existing ones in order to target multiple consumer groups. Cadburys could also do some mass advertising in the form on sponsorship as in 2007 they ceased to sponsor Coronation Street which was a very good form of advertising for them. The threats that Cadbury face are the other leading confectionary brands Mars and Nestlé who are constantly competing with Cadburys for leadership. Another threat for Cadburys is any contamination of their products which they have had previously in 2006/07/08 which can seriously damage their public image.

Financial performance metrics

Cadburys has a good liquidity which means it has the ability to meet all its short-term obligations and needs. Cadburys activity metrics are also very good as they use all their resources effectively thus minimizing waste and any loss of profits. Their leverage metrics are not as good as they used to be since they have been taken over by Kraft Foods who had to borrow 7 Billion pounds to finance their takeover. On the other hand Cadburys profitability metrics are excellent as they have been generating high profits for decades. Cadburys is the second largest confectionary company in the world and has maintained this position for a long time so its market & growth metrics are exceptional.

Cadburys target market

Cadbury's does extensive research into what types of chocolate they can make to suit their customers resulting in a wide range of different products from chocolate bars to Easter eggs, drinks, cakes & ice cream which means they have a very large target market. Cadburys constantly attempts to drive innovation within the confectionery market and offers its brands in an assortment of flavours and pack sizes, relevant to today's changing consumer behaviour. Crucial to this success is innovation in the development of new products and brands. Cadburys does not target one specific individual market but instead uses a differentiated marketing using many different strategies to target different segments.

Cadburys Consumer segments, targeting & positioning

Cadburys uses market segmentation to divide total market into individual segments, by doing this they can target specific individuals with the range of different products that they make. For example their famous Fudge chocolate bar is aimed towards young children so it was advertised with the slogan "A finger of fudge is just enough to give your kids a treat", this is a prime example of Cadburys positioning strategies also their flake bar is heavily marketed toward women and is extremely popular amongst females due to its 'lighter' chocolate approach and its relatively low calorie content. Cadburys appeals to many different segment in the market including families, women, men and children with different products for each.

Cadburys has identified chocolate to be a very integral part of world culture, so by having such a diverse range of product that appeal to all different types of markets they have firmly made a stamp in the hearts of consumers around the world positioning them as the number one chocolate maker worldwide.

Cadburys marketing mix (4P's)

Product

Cadbury produce a wide variety of confectionary including items such as chocolate bars, cakes & biscuits, drinks, ice creams & desserts. The ingredients include pure cocoa butter and milk in most products.

Price

Price is an important factor for Cadburys as the price charged for a chocolate bar can have a ripple effect on whether a consumers will buy their products or not, which intern will affect the level of sales and decide whether or not Cadburys will make any profit. The price of Cadburys product is also affected by factors such as the economy and taxes, what the competitors are charging and the stage reached in the products life cycle.

Place

Cadburys chocolate is produced mainly in the UK and the main factory being in Bourneville in Birmingham. Cadburys then sell on these products to shops and companies that deal with beverages and confectionery such as supermarkets and corner shops; to then be sold again. Cadburys distributes confectionary all over the world and develops different product to fit in with the different cultures.

Promotion

Cadburys promotion convey a message that there is no particular occasion needed to consume their products as they are very versatile and can be a casual snack or a dessert at a dinner party. Cadburys use a range of advertising techniques including television, internet, radio, sponsorship and ambient outdoor. This is very effective for them as they get to reach a large amount of people all at once.

Competitor strategy

For Cadburys to remain being as successful as they are they must provide greater customer satisfaction than their competitors, they have to go further than simply adapting to the needs of customers. This can be done if they gain strategic advantages over their competitors by positioning their products highly in the consumers mind.