Consumption of chocolates in india

Bhai Parmanand Institute of Business Studies Page 1
CERTIFICATE
This is to certify that the project work entitled “STUDY ON BUYING
BEHAVIOUR OF CONSUMERS FOR DIFFERENT BRANDS OF
CHOCOLATES” is being submitted by Ms. Bhavna for the award of the degree of
Bachelor of Business Administration and, is a bona fide research work carried out
by her under my supervision and guidance. It is further certified that the report has
not been submitted in part or full to any other university or institution for the award
of any other degree.
Supervisor

DECLARATION
I, Bhavna, student of BBA 3rd
Year from Bhai Parmanand Institute of Business
Studies affiliated to Indraprastha University hereby declare that all the information,
facts and finding furnished in this report are based on my indigenous work and are
original in nature.
Bhavna
BBA 6th
semester
04711401714

ACKNOWLEDGEMENT
I owe a great deal of gratitude and indebtedness to everyone who helped me to
successfully compile this project report and have been a massive pillar to me.
I would like to thank my supervisor Ms. Alka Agnihotri, who have advised and
helped me through each step of this project, and I am sincerely grateful to her.
I would like to express my grateful thanks to Dr. Amita Dev, the Principal of our
college, and my all faculty members who helped me in completion of this project.
Bhavna
BBA 6th
semester
04711401714

ABSTRACT
In this report, we began with distribution of a questionnaire to participants of a
different age and profile of Delhi city. We analyze the industry profile so that we
get reliable data concerning the business climate. Then we use secondary data to
analyze the companies profile more deeply such as research papers. To show the
calculated data of primary research we use graphs and pie charts, which is the
easiest way to represent the data and is easy to understand.
This project is an extensive research on the buying behavior of consumers for
different brands of chocolates. It covers facts and figures and depicts all graphs of
the companies. It begins with the introduction of industries. It covers some of the
major strategies adopted by the companies like their pricing policy, sales
promotion and advertising policy, distribution policy etc. The project has been
made interesting with the inclusion of the topics, which covers the 4P’s of
marketing.
The major players in the sweet confectionary industry in India are Amul, Campo,
Cadbury and Nestle. They have a cut throat competition between themselves.
Whatever strategy is followed by one company, it is copied by the other to make
themselves popular among the market too.
Sample of the brands were selected on the basis of there uses and noticeciability.

INTRODUCTION
In this research, I have survey the product performance and buying behavior of
famous brands of chocolates- Nestle, Cadbury, Campo, and Amul, which are
consumed by people of all ages. Most of the people influence their purchases on
the basis of price ,quality, advertisement, satisfaction, taste, packaging, brand
loyalty, etc. In this research I have surveyed how frequently and much chocolates
they consume, whether they buy small, big or family pack. Trends are ongoing
changes in their likings has been shown in the report. In this report I have tried to
explain the entire research and facts product wise.
The project gives information about the competitors, their market share, and their
product basket and highlights success features. The project also presents data on
types & categories of chocolates, a brief study of chocolate manufacturing process.
The project also covers a brief study of Cadbury’s India Limited – the biggest
player in the Indian Chocolate Industry with reference to its presence, market
share, product offerings, marketing strategies, strengths & weaknesses, success
factors and Worm Controversy Management. Also, the implication of pricing,
distribution strategies and impact of external environment has been recorded. The
project throws light on problems and challenges of the Indian Chocolate Industry,
growth opportunities and strategies to be adopted for growth in this industry.
Finally, the project gives information about home-made chocolates and Chocolate
Boutique sand the ways in which Indian consumers and Chocolate players are
experimenting and innovating chocolates and giving the Indian Chocolate Industry
a new sweetness.

OBJECTIVES OF THE STUDY
Following are the objectives of the study:-
1. To study the factors involved in determining the customer preference for
different brands of chocolates.
2. To know the consumer satisfaction level associated with the different brands of
chocolates.
3. To study the factors (like price, age, income, taste, packaging, etc) affecting the
purchase decisions with respect to chocolates.
4. To study the factors (like price, age, income, taste, packaging, etc) affecting the
consumption patterns.

RESEARCH METHODOLOGY
RESEARCH PROBLEMS
Topic mentioned problem, i.e., buying behavior of consumers for different brands of chocolates.
Hypothesis:-
Objective 1:-
To study the factors involved in determining the customer preference for different brands of
chocolates.
H0: There is no significant difference in customer preference for different brands of chocolates.
H1: There is significant difference in customer preference for different brands of chocolates.
Objective 2:-
To know the consumer satisfaction level associated with the different brands of chocolates
H0: There is no significant difference in customer satisfaction level associated with different
brands of chocolates.
H1: There is significant difference in customer satisfaction level associated with different brands
of chocolates.
Objective 3:-
To study the factors (like price, age, income, taste, packaging, etc) affecting the purchase
decisions with respect to chocolates.
H0: There is no significant difference in factors affecting the purchasing decisions of chocolates.
H1: There is significant difference in factors affecting the purchasing decisions of chocolates.
Objective 4:-
To study the factors (like price, age, income, taste, packaging, etc) affecting the consumption
patterns.
H0: There is no significant difference in factors affecting the consumption pattern of chocolates.
H1: There is significant difference in factors affecting the consumption pattern of chocolates.
SCOPE OF THE STUDY
The scope of the study restricts itself to the analysis of consumer preference, perception and
consumption of chocolates. The study is limited to only four brands of chocolates- Cadbury,
Nestle, Amul and Campo. The scope is also restricts itself to Delhi region only.

RESEARCH DESIGN
1. Selection of Data collection Method:
Secondary data: Internet and other researches – books, journals, research papers,
articles.
Primary data: Data was collected through a questionnaire.
2. Primary considerations:
Sample plan: Sample was collected using simple random sampling.
Sample size: 100
3. Method of Analysis:
Quantitative
4. Selection of Measurement Technique:
Quantitative analysis: chi-square test, correlation, regression, etc.
5. Limitations of the study:
• Limited time
• Not enough respondents
• Changes of unbiased information are less
• Hesitation of people to disclose the true facts
• Limited number of factors undertaken for study.
SAMPLING TECHNIQUES
Simple random sampling has been used here.
DATA COLLECTION SOURCE
Data is one out of two types, either primary which is collected by the researchers or secondary
data which is gathered by other researchers. Project consist both secondary data and primary
data.

PURPOSE OF THE STUDY
The main purpose of this study was to gather the information about the
(i) Consumer satisfaction level associated with the product and the customer preference level.
(ii) Factors affecting the consumption patterns.
(iii)How to increase customer satisfaction and recapture the market share by fulfilling the
customer needs.
TOOLS TECHNIQUES
Chi-square test, frequency analysis, cross tabs analysis, correlation analysis.

LITERATURE REVIEW
THEORIES
CONSUMERPREFERENCE
All marketing starts with the consumer. So consumer is a very important person to a marketer.
Consumer decides what to purchase, for whom to purchase, why to purchase, from
where to purchase, and how much to purchase. In order to become a successful marketer, he
must know the liking or disliking of the customers. He must also know the time and the quantity
of goods and services, a consumer may purchase, so that he may store the goods or provide the
services according to the likings of the consumers. Gone are the days when the concept
of market was let the buyer’s beware or when the market was mainly the seller’s
market. Now the whole concept of consumer’s sovereignty prevails. The manufacturers
produce and the sellers sell whatever the consumer likes. In this sense, “consumer is the
supreme in the market”. As consumers, we play a very vital role in the health of the economy
local, national or international. The decision we make concerning our consumption
behavior affect the demand for the basic raw materials, for the transportation, for the
banking, for the production; they effect the employment of workers and deployment
of resources and success
of some industries and failures of others. Thus marketer must understand this.
Preference
(or "taste") is a concept, used in the social sciences, particularly economics. It assumes a
real or imagined "choice" between alternatives and the possibility of rank ordering of
these alternatives, based on happiness, satisfaction, gratification, enjoyment, utility they
provide. More generally, it can be seen as a source of motivation. In cognitive sciences,
individual preferences enable choice of
objectives/goals.The study of the consumer preference not only focuses on how and why
consumers make buying decision, but also focuses on how and why consumers make
choice of the goods they buy and their evaluation of these goods after use.
So for success of any company or product promotion it is very necessary to depart its
concentration towards consumer preference.

5 Common factors influencing consumer behaviour
Consumer behaviour can be broadly classified as the decisions and actions that influence the
purchasing behaviour of a consumer. What drives consumers to choose a particular product with
respect to others is a question which is often analyzed and studied by marketers. Most of the
selection process involved in purchasing is based on emotions and reasoning.
The study of consumer behaviour not only helps to understand the past but even predict the
future. The below underlined factors pertaining to the tendencies, attitude and priorities of people
must be given due importance to have a fairly good understanding of the purchasing patterns of
consumers.
The consumer behaviour or buyer behaviour is influenced by several factors or forces. They are:
1. Internal or Psychological factors
2. Social factors
3. Cultural factors
4. Economic factors
5. Personal factors

1. Internal or psychological factors:
The buying behaviour of consumers is influenced by a number of internal or psychological
factors. The most important ones Motivation and Perception.
a) Motivation:
A need becomes a motive when it is aroused to a sufficient level of intensity. A motive is a need
that is sufficiently pressing to drive the person to act. There can be of types of needs:
• Biogenic needs:
They arise from physiological states of tension such as thirst, hunger
• Psychogenic needs:
They arise from psychological states of tension such as needs for recognition, esteem. In the
words of William J Stanton, “A motive can be defined as a drive or an urge for which an
individual seeks satisfaction. It becomes a buying motive when the individual seeks satisfaction
through the purchase of something”. A motive is an inner urge (or need) that moves a person to
take purchase action to satisfy two kinds of wants viz. core wants and secondary wants.
b) Perception:
Human beings have considerably more than five senses. Apart from the basic five (touch, taste,
smell, sight, hearing) there are senses of direction, the sense of balance, a clear knowledge of
which way is down, and so forth. Each sense is feeding information to the brain constantly, and
the amount of information being collected would seriously overload the system if one took it all
in. The brain therefore selects from the environment around the individual and cuts out the
extraneous noise.
This mapping will be affected by the following factors:
• Subjectivity:
This is the existing world-view within the individual, and is unique to that individual.
• Categorization:
This is the ‘pigeonholing’ of information, and the pre-judging of events and products. This can
happen through a process known as chunking, whereby the individual organises information into
chunks of related items. For example, a picture seen while a particular piece of music is playing
might be chunked as one item in the memory, so that sight of the picture evokes the music and
vice versa.
• Selectivity:
This is the degree to which the brain is selecting from the environment. It is a function of how
much is going on around the individual.

• Expectation:
These lead individuals to interpret later information in a specific way. For example, look at this
series of numbers and letters:
In fact, the number 13 appears in both series, but in the first series it would be interpreted as a В
because that is what the brain is being led to expect.
• Past experience:
This leads us to interpret later experience in the light of what we already know. Psychologists
call this the law of primacy, Sometimes sights, smells or sounds from our past will trigger off
inappropriate responses: the smell of bread baking may recall a village bakery from twenty years
ago, but in fact the smell could have been artificially generated by an aerosol spray near the
supermarket bread counter.
2. Social factors:
Man is a social animal. Hence, our behavior patterns, likes and dislikes are influenced by the
people around us to a great extent. We always seek confirmation from the people around us and
seldom do things that are not socially acceptable.
a) Family:
There are two types of families in the buyer’s life viz. nuclear family and Joint family. Nuclear
family is that where the family size is small and individuals have higher liberty to take decisions
whereas in joint families, the family size is large and group decision-making gets more
preference than individual. Family members can strongly influence the buyer behavior,
particularly in the Indian contest. The tastes, likes, dislikes, life styles etc. of the members are
rooted in the family buying behavior.
The family influence on the buying behavior of a member may be found in two ways
i) The family influence on the individual personality, characteristics, attitudes and evaluation
criteria and
ii) The influence on the decision-making process involved in the purchase of goods and services.
In India, the head of the family may alone or jointly with his wife decides the purchase. So
marketers should study the role and the relative influence of the husband, wife and children in
the purchase of goods and services.
b) Reference group:
A group is two or more persons who share a set of norms and whose relationship makes their
behavior interdependent. A reference group is a group of people with whom an individual
associates. It is a group of people who strongly influence a person’s attitudes values and behavior

directly or indirectly. Reference groups fall into many possible grouping, which are not
necessarily to be exhaustive (i.e. non over-lapping). The various reference groups are:
i) Membership or contractual groups:
They are those groups to which the person belongs, and interacts. These groups have a direct
influence on their member’s behavior.
ii) Primary or normative groups:
They refer to groups of friends, family members, neighbours co-workers etc whom we see most
often. In this case, there is fairly continuous or regular, but informal interaction with
cohesiveness and mutual participation, which result in similar beliefs and behavior within the
group.
iii) Secondary groups:
They include religious groups, professional groups etc, which are composed of people whom we
see occasionally. These groups are less influential in shaping attitudes and controlling behavior
but can exert influence on behavior within the purview of the subject of mutual interest. For
example, you can be member of a philately or literary club where you can discuss on mutually
interesting subjects.
iv) Aspiration group:
These are group to which a person would like to join as member. These groups can be very
powerful in influencing behavior because the individual will often adopt the behavior of the
aspirational group in the hopes of being accepted as a member. Sometimes the aspirational
groups are better off financially, or will be more powerful; the desire join such groups is usually
classed as ambition.
c) Roles and status:
A person participates in many groups like family, clubs, and organisations. The person’s position
in each group can be defined in tern of role and status. A role consists of the activities that a
person is expected to perform. Each role carries a status. People choose products that
communicate their role and status in society. Marketers must be aware of the status symbol
potential of products and brands.
3. Cultural factors:
Kotler observed that human behavior is largely the result of a learning process and as such
individuals grow up learning a set of values, perceptions, preferences and behavior patterns as
the result of socialisation both within the family and a series of other key institutions. From this
we develop a set of values, which determine and drive behavioral patterns to a very large extent.

4. Economic Factors:
Consumer behavior is influenced largely by economic factors. Economic factors that influence
consumer behavior are
a) Personal Income,
b) Family income,
c) Income expectations,
d) Savings,
e) Liquid assets of the Consumer,
f) Consumer credit,
g) Other economic factors.
a) Personal Income:
The personal income of a person is determinant of his buying behavior. The gross personal
income of a person consists of disposable income and discretionary income. The disposable
personal income refers to the actual income (i.e. money balance) remaining at the disposal of a
person after deducting taxes and compulsorily deductible items from the gross income.
b) Family income:
Family income refers to the aggregate income of all the members of a family.
Family income influences the buying behavior of the family. The surplus family income,
remaining after the expenditure on the basic needs of the family, is made available for buying
shopping goods, durables and luxuries.
c) Income Expectations:
Income expectations are one of the important determinants of the buying behavior of an
individual. If he expects any increase in his income, he is tempted to spend more on shopping
goods, durable goods and luxuries. On the other hand, if he expects any fall in his future income,
he will curtail his expenditure on comforts and luxuries and restrict his expenditure to bare
necessities.
d) Savings:
Savings also influence the buying behavior of an individual. A change in the amount of savings
leads to a change in the expenditure of an individual. If a person decides to save more out of his
present income, he will spend less on comforts and luxuries.

e) Liquid assets:
Liquid assets refer to those assets, which can be converted into cash quickly without any loss.
Liquid assets include cash in hand, bank balance, marketable securities etc If an individual has
more liquid assets, he goes in for buying comforts and luxuries. On the other hand, if he has less
liquid assets, he cannot spend more on buying comforts and luxuries.
f) Consumer credit:
Consumer credit refers to the credit facility available to the consumers desirous of purchasing
durable comforts and luxuries. It is made available by the sellers, either directly or indirect у
through banks and other financial institutions. Hire purchase, installment purchase, direct bank
loans etc are the ways by which credit is made available to the consumers.
g) Other economic factor:
Other economic factors like business cycles, inflation, etc. also influence the consumer behavior.
5. Personal factor:
Personal factors also influence buyer behavior. The important personal factors, which influence
buyer behavior, are:
a) Age:
Age of a person is one of the important personal factors influencing buyer behavior. People buy
different products at their different stages of cycle. Their taste, preference, etc also change with
change in life cycle.
b) Occupation:
Occupation or profession of a person influences his buying behavior. The life styles and buying
considerations and decisions differ widely according to the nature of the occupation. For
instance, the buying of a doctor can be easily differentiated from that of a lawyer, teacher, clerk
businessman, landlord, etc. So, the marketing managers have to design different marketing
strategies suit the buying motives of different occupational groups.
c) Income:
Income level of people is another factor which can exert influence in shaping the consumption
pattern. Income is an important source of purchasing power. So, buying pattern of people differs
with different levels of income.
d) Life Style:
Life style to a person’s pattern or way of living as expressed in his activity, interests and
opinions that portrays the “whole person” interacting with the environment. Marketing managers
have to design different marketing strategies to suit the life styles of the consumers.

RESEARCH PAPERS
1. The Indian Chocolate Industry is a unique mix with extreme consumption patterns, attitudes,
beliefs, income level and spending. At one hand, we have designer chocolates that are consumed
when priced at even Rs 2500/kg while there are places in India where people have never even
tasted chocolates once.
Understanding the consumer demands and maintaining the quality will be essential.
Companies will have to keep themselves abreast with the developments in other parts of the
world.
PRICING is the key for companies to make their product reach consumers’ pockets. Right
pricing will make or break the product SUCCESS. Economical distribution of the products will
also be equally important.
The companies’ strategies should focus on driving sales through a right product mix,
efficient materials procurement, reduced wastages, increased factory efficiencies and
improved
supply chain management.
There’s an immense scope for growth of chocolate industry in India - geographically as well
as in the product offering.
The Indian Chocolate Industry is destined to grow and will do so in the future.
2. Project analysis in chocolate confectionery industry: evidence from Macedonia
The aim of this paper is to construct a model for evaluation of a new established company in the
chocolate confectionery industry in emerging countries such as Macedonia. We begin with
distribution of a questionnaire to participants of a different age and profile across eight different
cities throughout Macedonia. Second, we analyze the industry profile so that we get reliable data
concerning the business climate and opportunities for opening a new chocolate factory. Then, we
use the one-year projected Income Statement and Cash Flow Statement to construct discounted
free cash flow model and calculate project’s Net Present Value and Internal Rate of Return.
Based on the forecasting variables and the financial projections, the project generates positive
NPV and high Internal Rate of Return despite the large investment needed for establishing
chocolate factory.

3. Study on chocolate good industry
The study was made upon various chocolate manufacturing units in India in and around Delhi.
Problems related to these companies were discussed with some company officials. These
discussions formed the basis of the research for the various problems assaulting the Chocolate
Industry. Some deep searching on the internet led one to conclude and surmise the above results,
which were found with the help of the references (given in the references section).
The tax structure governing the sales of chocolates in India was studied and analyzed and data
pertaining to the sales of chocolates during the various seasons and festivals were observed. This
led one to conclude that the sale of chocolates in India mirrors that of the rest of the world - It
booms during New Years, Diwali, Raksha Bandhan and Holi.
Rural areas in India were visited and the causes of the low sales in such areas were studied by
talking to as many locals as possible. The different mindset of the rural people and their low
income gives a perfect explanation for the difference in sales of chocolates in the urban areas to
the rural areas.
Thereafter, the multicultural area of Delhi was picked as the target location for the inquisition
amongst urban people. Chocolate sales were compared with that of rural areas like the
surrounding and nestled villages in the city of Delhi and were matched with that of South Delhi
markets.
Next the pioneer of a recently started chocolate company was contacted over the internet and by
whose help the process of setting up a plant was come about. In his own words, the setting up
process was difficult and time consuming.

INDUSTRY PROFILE
Chocolate the very word makes your mouth water. Chocolate is more than just a food: it’s a state
of mind.
History of chocolate:
The origin of chocolate can be traced back to the ancient Maya and Aztec civilizations in
Central America, who first enjoyed “chocolati” a much-prized spicy drink made from roasted
cocoa beans. Throughout its history, whether as cocoa or drinking chocolate beverage or
confectionary treat, chocolate has been a much sought after food.
The Aztec empire
“Chocolate”(in the form of a luxury drink) was consumed in large quantities by the aztecs: the
drink was described as “ finely ground, soft, foamy, reddish, bitter with chilli water, aromatic
flowers, vanilla and wild bee honey. The dry climate meant the Aztecs were unable to grow
cocoa trees, and had to obtain supplies of cocoa beans from “ tribute” or trade
Don Cortes
The Spanish invaded Mexico in the 16th century, by this time the Aztecs had created a powerful
empire, and the Spanish armies conquered Mexico. Don Cortes was made captain general and
governor of Mexico.
When he returned to Spain in1528 he loaded his galleons with cocoa beans and equipment for
making the chocolate drink. Soon “chocolate” became a fashionable drink enjoyed by the rich in
Spain.
Chocolate across Europe
An Italian traveler, Francesco carletti, was the first to break the Spanish monopoly. He had
visited Central America and seen how the Indians prepared the cocoa beans and how they made
the drink, and by 1606 chocolate was well established in Italy.
Drinking chocolate
The secret of chocolate was taken to France in 1615, when Anne, daughter of Phillip 2 of Spain
married king Louis 13 of France.
The French court enthusiastically adopted this new exotic drink, which was considered to have
medicinal benefits as well as being a nourishing food. Gradually the custom of drinking
chocolate spread across Europe, reaching England in the 1650’s

First chocolate for eating
Up until this point all chocolate recipes were based on plain chocolate. It was an English doctor,
sir Hans’s sloane, who- after traveling in south America- focused on cocoa and food values,
bringing a milk chocolate recipe back to England. The original Cadbury milk chocolate was
prepared to his recipe.
Types of Chocolates
Depending on what is added to (or removed from) the chocolate liquor, different flavors and
varieties of chocolate are produced. Each has a different chemical make-up, the differences are
not solely in the taste.
1. Unsweetened or Baking chocolate is simply cooled, hardened chocolate liquor. It is used
primarily as an ingredient in recipes, or as a garnish.
2. Semi-sweet chocolate is also used primarily in recipes. It has extra cocoa butter and sugar
added. Sweet cooking chocolate is basically the same, with more sugar for taste.
3. Milk chocolate is chocolate liquor with extra cocoa butter, sugar, milk and vanilla added.
This is the most popular form for chocolate. It is primarily an eating chocolate.
Cocoa is chocolate liquor with much of the cocoa butter removed, creating a fine powder. It can
pick up moisture and odors from other products, so you should keep cocoa in a cool, dry place,
tightly covered.
There are several kinds of cocoa
Low-fat cocoa has the most fat removed. It typically has less than ten percent cocoa butter
remaining.
Medium-fat cocoa has anywhere from ten to twenty-two percent cocoa butter in it.
Drinking or Breakfast cocoa has over twenty-two percent left in it. This is the cocoa used in
chocolate milk powders like Nestle's Quik.
Dutch process cocoa is cocoa which has been specially processed to neutralize the natural
acids in the chocolate. It is slightly darker and has a much different taste than regular cocoa.
Decorator's chocolate or confectioner's chocolate isn't really chocolate at all, but a sort of
chocolate flavored candy used for things such as covering strawberries. It was created to melt
easily and harden quickly, but it isn't chocolate.

Categories of Chocolates
Commercial Chocolates are available in the following forms:
1. Bars or Moulded Chocolates
2. Counts
3. Panned Chocolates (Gems)
4. Éclairs
Bars or moulded chocolates (like Dairy Milk, Truffle, Amul Milk Chocolate, Nestle Premium,
and Nestle Milky Bar) comprise the largest segment, accounting for 37% of the total chocolate
market in volume terms. ... Wafer chocolates such as Kit-Kat and Perk also belong to this
segment. Panned chocolates accounts for 10% of the total chocolate market. ... Wafer chocolates
such as Kit-Kat and Perk also belong to this segment. ..
Form of Consumption:
a. Pure Chocolates
b. Toffees
c. Cakes & Pastries
d. Malted Beverages
e. Wafer Biscuits & Baked Biscuits
f. Chocolate Desserts
Major Players & their Market Share:
The major players in the Indian Chocolate Industry are:
1. Cadbury’s India Limited
2. Nestle India
3. The Gujarat Co-operative Milk Marketing Federation (GCMMF) – AMUL
4. Cocoa Manufactures and Processors Co-operative (CAMPCO) Bars Count
Lines Wafer Panned Premium
Cadbury’s Dairy Milk &
Variants ,5-Star, Milk
Treat Perk Gems,
Tiffins
Temptation &
Celebrations
Nestle Milky Bar Bar One,
Crunch
Kit Kat,
Munch Nutties
Amul
Milk Chocolate
Fruit ‘n’ Nut
FUNDOO

History:
The earliest record of chocolate was over fifteen hundred years ago in the central America rain
forests, where the tropical mix of high rain fall combined with high year round temperatures and
humidity provide the ideal climate for cultivation of the plant from which chocolate is derived,
the cacao tree.
“ Chocolate is made from the cocoa bean, found in pods growing from the trunk and lower
branches of the cacao tree, Latin name “ theobroma cacao” meaning “ food of the gods”
Cacao was corrupted into the more familiar “ cocoa” by the early European explorers. The Maya
brewed a spicy, bittersweet drink by roasting and pounding the seeds of the cacao tree with
maize and capsicum peppers and letting the mixture ferment. This drink was reserved for use in
ceremonies as well as for drinking by the wealthy and religious elite; they also ate cacao
porridge. The Aztecs, like the Mayans, also enjoyed cacao as a beverage fermented from the raw
beans, which again featured prominently in ritual and as a luxury available only to the very
wealthy.
The Aztecs called this drink xocolatl, the Spanish conquistadors found this almost impossible to
pronounce and so corrupted it to the easier “ chocolat” the English further changed this to
chocolate. The Aztec’s regarded chocolate as an aphrodisiac and their emperor, Montezuma
reputedly drank it fifty times a day from a golden goblet and is quoted as saying of xocolatl: “
the divine drink, which builds up resistance and fights fatigue. A cup of this precious drink
permits a man to walk for a whole day without food”
Chocolate in Europe
Xocolatl! or chocolat or chocolate as it became known, was brought to Europe by Cortez, by
this time the conquistadors had learned to make the drink more palatable to European tastes by
mixing the ground roasted beans with sugar and vanilla ( a practice still continued today), thus
offsetting the spicy bitterness of the brew the Aztec’s drank. The first chocolate factories opened
in Spain, where the dried fermented beans brought back from the new world by the Spanish
treasure fleets were roasted and ground, and by the early 17th century chocolate powder – from
which the European version of the drink was made- was being exported to other parts of Europe.
The Spanish kept the source of the drink- the beans- a secret for many years, so successfully in
fact, that when English buccaneers boarded what they thought was a Spanish “ treasurer galleon”
in 1579, only to find it loaded with what appeared to be “ dried sheep’s droppings, they burned
the whole ship in frustration. If only they had known, chocolate was so expensive at that time,
that it was worth it’s weight in silver ( if not gold), chocolate was treasure indeed ! Within a few
years, the cocoa beverage made from the powder produced in Spain had become popular
throughout Europe, in the Spanish Netherlands, Italy, France, Germany and – in about 1520 – it
arrived in England.
The first chocolate house in England opened in London in 1657 followed rapidly by many
others. Like the already well established coffee houses, they were used as clubs where the

wealthy and business community met to smoke a clay pipe of tobacco, conduct business and
socialize over a cup of chocolate.
Back to the America’s
Event’s went full circle when English colonists carried chocolate (and coffee) with them to
England’s colonies in north America. Destined to become the united states of America and
Canada, they are now the worlds largest consumers – by far – of both chocolate and coffee,
consuming over half of the words total production of chocolate alone.
The Quakers
The Quakers were, and still are, a pacifist religious sect, an offshoot of the puritans of English
civil war and pilgrim fathers fame and a history of chocolate would not be complete without
mentioning their part in it. Some of the most famous names in chocolate were Quakers, who for
centuries held a virtual monopoly of chocolate making in the English speaking world – fry,
Cadbury and row tree are probably the best known. Its probably before the time of the English
civil war between parliament and king Charles 1st that the Quaker’s who evolved from the
puritans, first began their historic association with chocolate. Because of their pacifist religion,
they were prohibited from many normal business activities, so as an industrious people with a
strong belief in the work ethic (like the puritans), they involved themselves in food related
businesses and did very well. Baking was a common occupation for them because bread was
regarded as the biblical “staff of life”, and bakers in England were the first to add chocolate to
cakes so it would be a natural progression for them to start making pure chocolate. They were
also heavily involved in breakfast cereals but that’s another story.
What is certain is that the fry, row tree and Cadbury families in England among others, began
chocolate making and in fact Joseph fry of fry &sons (founded 1728 in Bristol, England) is
credited with producing and selling the world’s first chocolate bar. Fry’s have now all but
disappeared (taken over by Cadbury) and row tree have merged Swiss company nestle, to form
the largest chocolate manufacturer in the world. Cadbury have stayed with chocolate production
and are now, if not quite the largest, probably one of the best-known chocolate makers in the
world.
Expansion
The new craze for chocolate brought with it a thriving slave market, as between the early 17th
and late 19th centuries the laborious and slow processing of the cacao bean was manual.[2]
Cacao
plantations spread, as the English, Dutch, and French colonized and planted. With the depletion
of Mesoamerican workers, largely to disease, cacao production was often the work of poor wage
laborers and African slaves. Wind-powered and horse-drawn mills were used to speed
production, augmenting human labor. Heating the working areas of the table-mill, an innovation
that emerged in France in 1732, also assisted in extraction.

New processes that speed the production of chocolate emerged early in the Industrial Revolution.
In 1815, Dutch chemist Coenraad van Houten introduced alkaline salts to chocolate, which
reduced its bitterness. A few years thereafter, in 1828, he created a press to remove about half the
natural fat (cacao butter) from chocolate liquor, which made chocolate both cheaper to produce
and more consistent in quality. This innovation introduced the modern era of chocolate. Known
as "Dutch cocoa", this machine-pressed chocolate was instrumental in the transformation of
chocolate to its solid form when in 1847 Joseph Fry learned to make chocolate moldable by
adding back melted cacao butter. Milk had sometimes been used as an addition to chocolate
beverages since the mid-17th century, but in 1875 Daniel Peter invented milk chocolate by
mixing a powdered milk developed by Henri Nestlé with the liquor. In 1879, the texture and taste
of chocolate was further improved when Rodolphe Lindt invented the conching machine.
Lindt & Sprüngli AG, a Swiss-based concern with global reach, had its start in 1845 as the
Sprüngli family confectionery shop in Zurich that added a solid-chocolate factory the same year
the process for making solid chocolate was developed and later bought Lindt's factory.
Besides Nestlé, several chocolate companies had their start in the late 19th and early 20th
centuries. Cadbury was manufacturing boxed chocolates in England by 1868. In 1893, Milton S.
Hershey purchased chocolate processing equipment at the World's Columbian Exposition in
Chicago and soon began the career of Hershey's chocolates with chocolate-coated caramels.
Modern usage
Roughly two-thirds of the world's cocoa is produced in Western Africa, with close to half of the
total sourced from Côte d'Ivoire. Like many food industry producers, individual cocoa farmers
are at the mercy of volatile world markets. The price can vary from between £500 ($945) and
£3,000 ($5,672) per ton in the space of just a few years. While investors trading in cocoa can
dump shares at will, individual cocoa farmers can not ramp up production and abandon trees at
anywhere near that pace.
Only three to four per cent of "cocoa futures" contracts traded in the cocoa markets ever end up
in the physical delivery of cocoa. Every year seven to nine times more cocoa is bought and sold
on the exchange than exists.
CHOCOLATE PRODUCTION
The cocoa-bean -- the heart of the sweetest delicacy in the world -- is bitter! This is why, up to
the 18th century some native tribes ate only the sweetish flesh of the cocoa fruit. They regarded
the precious bean as waste or used it, as was the case among the Aztecs, as a form of currency.

The Varieties
There are two quite different basic classifications of cocoa, under which practically all varieties
can be categorised: Criollo and Forastero cocoas. The pure variety of the Criollo tree is found
mainly in its native Equador and Venezuela. The seeds are of finer quality than those of the
Forastero variety. They have a particularly fine, mild aroma and are, therefore, used only in the
production of high-quality chocolate and for blending. However, Criollo cocoa accounts for only
10% of the world crop. The remaining 90% is harvested from trees of the Forastero family, with
its many hybrids and varieties. The main growing area is West Africa. The cocoa tree can
flourish only in the hottest regions of the world.
The Harvest
Immediately after harvesting, the fruit is treated to prevent it from rotting. At fermentation sites
either in the plantation or at, collecting points, the fruit is opened.
Fermentation
The fermentation process is decisive in the production of high quality raw cocoa. The technique
varies depending on the growing region.
Drying
After fermentation, the raw cocoa still contains far too much water; in fact about 60%. Most of
this has to be removed. What could be more natural than to spread the beans out to dry on the
sun-soaked ground or on mats? After a week or so, all but a small percentage of the water has
evaporated.
Cleaning
Before the real processing begins, the raw cocoa is thoroughly cleaned by passing through
sieves, and by brushing. Finally, the last vestiges of wood, jute fibres, sand and even the finest
dust are extracted by powerful vacuum equipment.
Roasting
The subsequent roasting process is primarily designed to develop the aroma. The entire roasting
process, during which the air in the nearly 10 feet high furnaces reaches a temperature of 130 °C,
is carried out automatically.
Crushing and shelling
The roasted beans are now broken into medium sized pieces in the crushing machine.

Blending
Before grinding, the crushed beans are weighed and blended according to special recipes. The
secret of every chocolate factory lies in the special mixing ratios, which it has developed for
different types of cocoa.
Grinding
The crushed cocoa beans, which are still fairly coarse are now pre-ground by special milling
equipment and then fed on to rollers where they are ground into a fine paste. The heat generated
by the resulting pressure and friction causes the cocoa butter (approximately 50% of the bean)
contained in the beans to melt, producing a thick, liquid mixture.
This is dark brown in color with a characteristic, strong odour. During cooling it gradually sets:
this is the cocoa paste. At this point the production process divides into two paths, but which
soon join again. A part of the cocoa paste is taken to large presses, which extract the cocoa
butter. The other part passes through various blending and refining processes, during which some
of the cocoa butter is added to it. The two paths have rejoined.
Cocoa Butter
The cocoa butter has important functions. It not only forms part of every recipe, but it also later
gives the chocolate its fine structure, beautiful lustre and delicate, attractive glaze.
Cocoa
After the cocoa butter has left the press; cocoa cakes are left which still contain a 10 to 20%
proportion of fat depending on the intensity of compression.
Powder
These cakes are crushed again, ground to powder and finely sifted in several stages and we
obtain a dark, strongly aromatic powder, which is excellent for the preparation of delicious
drinks - cocoa. Cocoa paste, cocoa butter, sugar and milk are the four basic ingredients for
making chocolate. By blending them in accordance with specific recipes the three types of
chocolate are obtained which form the basis of ever product assortment, namely:
Kneading
In the case of milk chocolate for example, the cocoa paste, cocoa butter, powdered or condensed
milk, sugar and flavouring - maybe vanilla - go into the mixer, where they are pulverized and
kneaded.

Rolling
Depending on the design of the rolling mills, three or five vertically mounted steel rollers rotate
in opposite directions. Under heavy pressure they pulverise the tiny particles of cocoa and sugar
down to a size of approx. 30 microns. (One micron is a thousandth part of a millimetre.)
Conching
But still the chocolate paste is not smooth enough to satisfy our palates. But within two or three
days all that will have been put right. For during this period the chocolate paste will be refined to
such an extent in the conches that it will flatter even the most discriminating palate.
Conches (from the Spanish word "concha", meaning a shell) is the name given to the troughs in
which 100 to 1000 kilograms of chocolate paste at a time can be heated up to 80 °C and, while
being constantly stirred, is given a velvet smoothness by the addition of certain amounts of cocoa
butter. A kind of aeration of the liquid chocolate paste then takes place in the conches: its bitter
taste gradually disappears and the flavor is fully developed.

COMPANY PROFILE
1. CADBURY COMPANY
The Story of Cadbury
Early Days - A One Man Business
Birmingham 1824
John Cadbury was one of ten children of Richard Tapper Cadbury, a prominent Quaker who had
moved to Birmingham, England from the West Country in 1794.
In 1824, 22-year-old John Cadbury opened his first shop at 93 Bull Street, next to his father's
drapery and silk business in the then fashionable part of Birmingham.
Apart from selling tea and coffee, John Cadbury sold hops, mustard and a new sideline - cocoa
and drinking chocolate, which he prepared using a mortar and pestle.
Cocoa and drinking chocolate had been introduced into England in the 1650s but remained a
luxury enjoyed by the elite of English society. Customers at John Cadbury's shop were amongst
the most prosperous Birmingham families, the only ones who could afford the delicacy. Cocoa
beans were imported from South and Central America and the West Indies.
Experimenting with his mortar and pestle, John Cadbury produced a range of cocoa and
chocolate drinks, the latter with added sugar. The products were sold in blocks: customers
scraped a little off into a cup or saucepan and added hot milk or water.
John Cadbury had a considerable flair for advertising and promotion. "John Cadbury is desirous
of introducing to particular notice 'Cocoa Nibs', prepared by himself, an article affording a most
nutritious beverage for breakfast," announced his first advertisement in the Birmingham Gazette
in March 1824.
He soon established himself as one of the leading cocoa and drinking chocolate traders in
Birmingham. The popularity and growing sales of John Cadbury's cocoa and drinking chocolate
of 'superior quality' determined the future direction of the business.
In 1831, John Cadbury rented a small factory in Crooked Lane not far from his shop. He became
a manufacturer of drinking chocolate and cocoa, laying the foundation for the Cadbury chocolate
business.

Cadbury Brothers Ltd
The business became a private limited company - Cadbury Brothers Limited - in 1899 following
Richard Cadbury's sudden death at the age of 63.
George Cadbury became chairman of the new board and his fellow directors were Barrow and
William A. Cadbury, sons of Richard and two of his own sons, Edward and George Cadbury
Junior.
By 1899, the Bournville factory had trebled in size with more than 2,600 employees. With the
formation of the limited company, Bournville entered a new era as the younger members of the
Board introduced new ideas - analytical laboratories, advertising and cost offices, a sales
department, works committee, medical department, pension funds, education and training for
employees.
The Bournville factory site became a series of factories within a factory, as everything needed
for the business was produced on site, including tin box pressing plants, carton making units, a
design studio and printing plant.
This policy continued until well after the Second World War when the rationalisation of the
business to mainstream activity - production and marketing of chocolate confectionery- led to the
use of outside specialised suppliers for ancillary items.
Brands of Cadbury
• Dairy Milk and variants
• 5 Star
• Treat perk gems
• Temptation
• Celebrations
Marketing mix of Cadbury Company
Products in the Marketing mix of Cadbury – Cadbury has a power house lineup of products.
In fact, several of our readers will be surprised when they read the different varieties and markets
where Cadbury is present. A company might have 1 or 2 cash cows, but Cadbury has several
with the lions share of the market. Some in the chocolate business are Dairy milk, Bournville,
Five star, Perk, Cadbury eclairs. In the biscuits segment is the premium Oreo. In beverages there
is bournvita which again is one of the leaders in milk additives. Halls as a mouth freshener as
well as a remedy during cold is used across India. Thus, with such a strong line of products,
cadbury is bound to lead the chocolates industry. Due to its products, Cadbury is the leading
name of chocolates across the world and has presence in all 7 continents.

Price in the Marketing mix of Cadbury – With quality comes price. As the quality of the
products is high, and the beverages and Oreo requires constant marketing to be on top, the price
of Cadbury products is also high in some cases, whereas in others it is very much reasonable.
Products like perk, five star and eclairs give the taste of Cadbury even at lower price. Dairy milk
is considered to be a premium brand of chocolates due to this positioning, but because of lower
priced chocolates, it is also accepted across various target segments. Cadbury has many varieties
of products in the chocolate segment and the pricing of each chocolate is different based on the
type of customer who is going to buy it. However, in all these, the Dairy milk brand is the clear
winner. Priced in high as well as low variants, the cadbury dairy milk has a position of gifting
and hence is selling high volumes even at higher prices. The cadbury celebrations pack in fact,
sells in millions on any festival or on celebrations.
Place or Distribution in the Marketing mix of Cadbury – The distribution of Cadbury is
fantastic and widespread. It is present strongly in all urban areas as well as A,B and C category
towns. The rural marketing of Cadbury is known to be weak but that is because demand there is
also weak. Cadbury follows the same mantra of FMCG marketing which is breaking the bulk.
The cadbury chocolate is manufactured in Bournville, England. Recently there was an
advertisement which promoted that Cadbury buys only the best cocoa beans from Ghana for its
chocolates. These chocolates are then distributed across the world. Cadbury is present in 200 or
more countries. Once the chocolate reaches in bulk, it is broken down as follows.
Company >> C&F agent >> Distributors >> Retailers >> Consumers
Marketing Strategy of Cadbury Company
Mission – “Cadbury means quality; this is our promise. Our reputation is built upon quality; our
commitment to continuous improvement will ensure that our promise is delivered”.
Vision- “Working together to create brands people love”
Tagline- “Real Taste of Life”
Objective
Grow shareholder value…over the long term-Cadbury in every pocket Our marketing strategy is
aimed at achieving this vision by growing the market, by appropriate pricing strategy that will
create a mass market and to have offerings in every category to widen the market
Our Managing for Value Process incorporates Setting stretched financial objectives. Adopting

Value Based Management for major strategic and operational decisions and business systems.
Creating an outstanding leadership capability within our management. Sharpening our company
culture to reflect accountability, aggressiveness and adaptability. Aligning our management
rewards structure with the interests of our shareowners.
Distribution strategy in the Marketing strategy of Cadbury – Although Cadbury is not so
extensively in FMCG but they are able to make the product available in the extreme regions in Urban
as well as rural areas but they focus more on Urban markets due to the demand economics. Products
are being made available through the C&F to wholesaler to retailer & then to the end customer,
which is actually a 3-tier distribution approach.
Brand equity in the Marketing strategy of Cadbury- Cadbury addresses the needs of each and
every consumer, from childhood to maturity, from impulse purchase to family treats. Cadbury
designs products to coincide with Christmas, Easter, Valentine’s, Mother’s and Father’s Day and
other calendar landmarks. Cadbury use marketing strategies such as the ‘Choose Cadbury’ strategy to
encourage a link between chocolate and these events ensuring there is a Cadbury chocolate product
suitable and available for every occasion. The marketing communications over the years as well the
lovely taste of Cadbury and its consistence have gien a fantastic brand equity to the brand.
Competitive analysis in the Marketing strategy of Cadbury – The confectionaries industry is
highly competitive & is overcrowded by local & national players. While Cadbury’s parent company
Mondelez International is the world leader in Bars & chocolates for middle age income group, other
players like Nestle, Ferrero Rocher , Perfett, Amul , Kraft foods etc. have product categories &
customer groups in which they are specialized in. Due to high R& D and change in organoleptic of
milk, changing lifestyle of Asian markets, eating habits etc. this industry will observe high growth
momentum in the coming years.
Market analysis in the Marketing strategy of Cadbury – Confectionaries business is ever growing
& due to the changing consumption of milk and daity products, there is more & more opportunity
that is lying ahead in this industry. The market is ruled by few companies such as Cadbury, nestle,
Mars, Heinz, Perfetti van etc. Cadbury has a broad product portfolio in the chocolate segment like
dairy milk, Bournville, Cadbury crunch, Eclairs etc. due to which they are able to lead the market in
this segment but their other product categories like biscuits & cakes are suffering due to the narrow
product portfolio.
Customer analysis in the Marketing strategy of Cadbury – Customers of Cadbury are from all
segments & people from all age group consume chocolates, biscuits & beverages but it is the
growing middle income group as well as the youngsters who form the major consumer segment.

SWOT Anaysis of Cadbury Campany
Strengths in the SWOT analysis of Cadbury
World leader – Cadbury is the world’s leader in chocolates. Known to have the best manufacturing
and a wide distribution channel, Cadbury has a presence in 200 or more countries.
Powerhouse brands and Products – Cadbury has many strong brands in its product portfolio such
as dairy milk, Bournvita, oreo, five star and others. The product are high quality products and some
of them are cash cows for Cadbury.
Brand name, brand equity and Brand loyalty – Cadbury products are blessed with a fantastic
brand loyalty. Due to its marketing and strong branding over the years, the brand equity of Cadbury
is also high and hence Cadbury is comfortable charging a premium for its product because of the
high brand equity. Finally some brand names within the Cadbury family are known world wide and
are desired by many.
Positioning as gift – The smartest tactic that Cadbury has done over the years with products like
dairy milk and celebrations is that these chocolates are positioned for gifting. In fact the recent
bournville, has a complete focus on the gifting position. Due to this smart strategy Cadbury has
safely differentiated itself from majority of its competitors.
Promotions – With an amazing tag line of “kuch meetha ho jaye” along with fantastic ATL and
BTL activities, Cadbury has one of the strongest promotions in the fmcg industry. This further
imparts strength to Cadbury because it provides excellent brand recall.
Indian connect – Cadbury is one of the few brands which connects so well with the Indian diaspora.
For Indians, family, friends and love are all important parts of their life. And Cadbury has always
focused on emotional marketing to connect with the Indian audience.
Placement and distribution – Cadbury has a superb distribution strategy in place and like all FMCG
companies, it uses the strategy of breaking the bulk. Distributing to 200 countries with a variety of
more than 40 variants is not a small feat. And cadbury has been achieving the same for the past many
years. It is known to have one of the best FMCG distribution channels in India.
Weaknesses in the SWOT analysis of Cadbury
As mentioned previously, a brand like Cadbury is expected to have many strengths and
few weaknesses, and the same is the case. Cadbury’s weakness is its rural distribution considering
India has such a wide rural diaspora which can be covered.

At the same time, A few cases here and there have happened based on the quality of the product
where cockroaches or other rodents were found in the chocolate. It is inexcusable for a brand like
Cadbury to show such ignorance because such infected chocolates should not leave quality control at
all. Thus quality control needs to be strengthened.
Opportunities in the SWOT analysis of Cadbury
Rural markets – What is a weakness can become an opportunity. Penetrating rural markets and
distribution in rural markets can be a large opportunity for Cadbury. It is present in foreign countries
and a rural presence is much needed for Cadbury which will boost the brands presence and turnover.
New Tastes – Indian consumers have a sweet tooth and they frequently like to eat small chocolates
as well as chocolate bars. On top of it, there are various flavors which consumers like. Thus, new
tastes and new flavors are an opportunity which Cadbury can generate regularly.
Threats in the SWOT analysis of Cadbury
Cost and price increase – With an increase in fuel cost as well as cost of transportation, distribution
cost has gone up. At the same time, the cost of procurement and manufacturing is high as well. Thus,
over the years, the constant increase in costing and thereby pricing of the product is a threat to
Cadbury as it creates a gap for other companies to enter.
Health consciousness on the rise – Health consciousness is on the rise amongst the Indian
population. Many people prefer drinking health juices as well as fruits rather than having chocolates.
Every week you will see articles on news papers as well as on blogs which advice against eating
chocolate and propagate the benefits of staying healthy. At the same time, many parents have stopped
giving chocolates to their kids looking at the adverse affects.
Decreasing importance of festivals – Cadbury has spent years to get the position of a gift on
festivals and occasions. What happens when the importance of these festivals drops? The buying of
chocolates also drops.
Rising demand of people, growing purchasing power – Nowadays, if you gift a chocolate to
children, they are likely to demand a toy car, a bicycle or for a young adult, a computer. Thus, with a
rise in purchasing power, the demands of gifts also has gone up in value and just a chocolate will not
suffice. This is also a threat for Cadbury.

2. NESTLE COMPANY
Nestle India
Nestle’ India is a subsidiary of Nestle’ S.A. of Switzerland. The company insists on honesty,
integrity and fairness in all aspects of its business and expects the same in its relationships.
Nestle India- Presence Across India
Beginning with its first investment in Moga in 1961, Nestlé’s regular and substantial
investments established that it was here to stay. In 1967, Nestlé set up its next factory at Choladi
(Tamil Nadu) as a pilot plant to process the tea grown in the area into soluble tea. The
Nanjangud factory (Karnataka), became operational in 1989, the Samalkha factory (Haryana), in
1993 and in 1995 and 1997, Nestlé commissioned two factories in Goa at Ponda and Bicholim
respectively. Nestlé India is now putting up the 7th factory at Pant Nagar in Uttaranchal.
Nestle’ Story
Nestlé was founded in 1867 on the shores of Lake Geneva in Vevey, Switzerland and its first
product was “Farine Lactée Nestlé”, an infant cereal specially formulated by Henri Nestlé to
provide and improve infant nutrition. From its first historic merger with the Anglo-Swiss
Condensed Milk Company in 1905, Nestlé has grown to become the world’s largest and most
diversified food Company, and is about twice the size of its nearest competitor in the food and
beverage sector.
Nestlé’s trademark of birds in a nest, derived from Henri Nestlé’s personal coat of arms, evokes
the values upon which he founded his Company. Namely, the values of security, maternity and
affection, nature and nourishment, family and tradition. Today, it is not only the central element
of Nestlé’s corporate identity but serves to define the Company’s products, responsibilities,
business practices, ethics and goals.
In 2004, Nestlé had around 247,000 employees worldwide, operated 500 factories in approx. 100
countries and offered over 8,000 products to millions of consumers universally. The Company’s
transparent business practices, pioneering environment policy and respect for the fundamental
values of different cultures have earned it an enviable place in the countries it operates in.
Nestlé’s activities contribute to and nurture the sustainable economic development of people,
communities and nations. Above all, Nestlé is dedicated to bringing the joy of ‘Good Food,
Good Life’ to people throughout their lives, throughout the world.
Nestle’ Brands
• Milky Bar
• Bar One
• Crunch
• Kitkat
• Munch nutties

Marketing Mix of Nestle Company
The Marketing mix of Nestle discusses the 4P’s of one of the strong FMCG companies of the
world. The Nestle marketing mix shows Nestle has a strong product line which boosts its
marketing mix. Below are the products, price, placement and promotions of Nestle.
Products – There are 4 different strategic business units within Nestle which are used to manage
various food products.
Beverages – One of the most known coffee brands Nescafe, belongs to the house of Nestle and is
one of the cash cows for Nestle. However, it is not the biggest cash cow. Nestle has a worldwide
distribution and has many different variants. Looking at India, Nestle has also launched Nestea.
Milk and Milk products – Nestle everyday, Nestle slim and Nestle Milk maid are some of the
milk and milk based products from the house of Nestle.
Prepared dishes and cooking aides – Nestle has a third category of products which comes into
prepared dishes and cooking aides. The major cash cow of Nestle lies in this segment, which is
Maggi Noodles. Probably one of the most widely sold ready to cook noodle brands is Maggi.
Maggi has a fantastic taste and quality. Thus, it was not a surprise, that Nestle expanded the
Maggi brand to create an umbrella of different products like Maggi pasta, Maggi sauce, Maggi
cubes etc. The maggi range contributes vastly to the bottom line of Nestle.
Chocolates – Nestle has some popular chocolate products, most popular being Nestle Kitkat,
Munch, Milky bar, Eclairs and Polo. The newly introduced Alpino is targeting the gifting
segment in response to various chocolates like Dairy milk and Bournville by Cadbury.
The chocolates segment of Nestle is a star, where the competition is high and the expense is high
but at the same time the market size is huge as well.
As we can see, two major brands of Nestle are a very high contributor to its Brand equity –
Nescafe and Maggi. These are two brands sold across India in small as well as big shops and
super markets. There have been many competitors for these products, like Bru for Nescafe and
Top ramen and Sunfeast Yippie against maggi.
The appreciable factor in Nestle is that quality maintenance of products is upto mark and there
are hardly any complaints about Nestles products in the market. This is a major achievement for
a company which relies majorly on food products.

Price- The price is dependent on the market of each individual products. For example, Nescafe
and Maggi being the clear leaders are priced with higher margins for the company as compared
to competition. This is because the product quality is good enough and a bit of skimming price
will not cause the customer to switch brands.
The strength of pricing for Nestle comes from its packaging or consumption based pricing. For
Nescafe as well as Maggi, Nestle offers a lot of sizes and package options. In supermarkets, you
can even find a 16 packet maggi whereas in small retail shops, you can find 5 rs maggi.
Thus, with the variety available, customer can make his own choice based on his consumption.
In other products like Kitkat and Munch, due to tough competition from other companies, Nestle
offers competitive pricing. You will find that nestle will be similar priced to many of Cadbury’s
Products in the chocolate segment.
Placement – Nestle follows the FMCG strategy of distribution which involves breaking the bulk.
The typical distribution strategy of Nestle is as follows.
Manufacturing >> C & F agent >> Distributors >> Retailers >> Consumer
Manufacturing >> Bulk buyers >> Consumer
These are the two different forms of distribution which Nestle has. It is typical of any FMCG
company. However, the Nestle channel is known to be strong with a good marketing and sales
network for channel distribution.
On top of it, Nestle regularly introduces trade discounts and various tactics to keep the channel
motivated. The major challenge is in the distribution of Maggi which is the most in-demand
product along with Nescafe. Due to these two products, Nestle is able to drive other products in
the market as well. Thus, on purchase of one weak product, the distributor might get a discount
on the stronger product or vice versa.
The challenge for Nestle is in the chocolate segment where it faces stiff competition from
Cadbury and hence selling the chocolates becomes difficult. Kitkat might have its own brand
positioning, but it is not better than Dairy milk. Thus, converting retailers to sell Nestle instead
of Cadbury is the toughest task for Nestle. This is converted mainly through promotions.
Promotions
One of the most widely known tunes is the Nescafe tune. It was one of the best advertising
campaigns and was launched at least 2 decades back. However, that campaign brought Nescafe
strongly in the market.

On the other hand, Nestle’s brand was pushed by the excellent product quality of Maggi and the
witty and innovative campaigns of Maggi. Where Nescafe focuses on value and the good things
in life, Maggi focuses on moments you had with your Maggi. The recent campaign
was completely focused on your maggi story, where people had to come out with various
innovative ways that they had their maggi.
Promotions for other products too is done smartly. Kitkat focuses on “Take a break” and has
done some good marketing for the same. Kitkats website too is very innoative and shows nothing
but asks the visitor to take a break and have a Kitkat. The major push expected of a FMCG
company is in sales promotions at the ground level. This is where Nestle really rocks. Nestle
focuses on its strength which is Maggi, Nescafe and Kitkat which are the most
promoted brands in the market on ground level.
Marketing Strategy of Nestle Company
Mission Statement
• "We strive to bring consumers foods that are safe, of high quality and provide optimal nutrient
to meet physiological need. Nestle helps provide selections for all individual taste and lifestyle
preferences.“
• Motto: "Good Food, Good Life."
Vision Statement
"Nestlé's aim is to meet the various needs of the consumer everyday by marketing and selling
foods of a consistently high quality."
Growth Strategy
• Transnational strategy : Low cost, Different products, Different Markets, High local
responsiveness
• Localization strategy : brand name resonates locally as the cultural habits difference in different
nations
• Customization : delivering goods that are modified to satisfy a specific customer need. 85
percent of the market for instant coffee in Mexico. 66 percent of the market for powdered milk
in the Philippines.
Marketing Environment
• Micro Environment:
a) Suppliers: Suppliers provide the raw material resources, unfinished goods and labors to the
company in order to produce goods and services
b) Marketing Intermediaries: The market intermediaries of the company help to advertise, sell
and distribute its product to the end customers.
c) Customer: Immediate customers of Nestle are retail and grocery stores d) Competitors: Petra
Foods Limited, Yeo Heap Sang Limited, Mail Dairy Industry Co. Ltd

Marketing Environment
• Macro Environment:
a) Political Environment
b) Cultural Environment
c) Economic Environment
d) Technological Environment
Market Segmentation
• Geographic
• Demographic
• Psychographic
• Behavioral
Target Marketing
Undifferentiated
• Koko Krunch, Nesquick: Chocolate milk who want to get taste of chocolate.
• Nescafe Ice: Cold coffee for the people in hot weather.
Positioning Strategy
• Image differentiation: Nestlé’s logo is totally different from its competitors that are greatly
accepted by its customers.
• People differentiation: Nestle has a large number of employees that are highly educated and
trained.
• Service differentiation: better service for its respective customers from its competitors, 24
hours hot line service
SWOT Anaysis of Nestle Company
Strengths in the SWOT analysis of Nestle
1. World Renowned brand: It is fortune 500 Company and is world’s largest food company
measured by revenues (2014). Nestle does individual branding of their different food brands
which help them in creating awareness about their various food brands. This also helps them
because if a brand like Maggi is affected, it does not affect the sale of Coffee.
2. Extensive distribution system: With its diversified product portfolio Nestle has been
successful in penetrating Urban as well as rural markets. Locally adapted distribution
methods & decentralization in supply chain, including street markets, mobile street vendors,
door-to-door distributors & Medical outlets has helped the company in making its products
visible in the market. If you just look at the

3. Broad Product portfolio: Nestle has more than 8000 brands / products under its name
which ranges from beverages like Coffee & Mineral water, Breakfast cereals, Soups &
sauces etc. Under each product categories Nestle have deep assortments to satisfy different
needs & wants of the consumers.
4. Large workforce: Nestle have engaged 340000 odd global workforce who are continuously
working to make its products available in every nook & corner of the world.
5. R & D centers: Nestle have the world’s largest food & nutrition research organization, with
about 5000 people involved in R & D, as well as corporate venture funds and research
partnerships with business partners and universities. It has 21 research centers globally.
6. Brand equity – As of 2016, it is the 37th highest rank brand in the world which says a lot
about its brand equity.
Weaknesses in the SWOT analysis of Nestle
1. Maggi Controversy – In India, Maggi was recently banned because it was found to contain
additives which were harmful. This affected the brand name of Nestle as well as Maggi big
time. However, it has been relaunched recently and Nestle is trying to convince people about
the quality of Maggi.
2. Brand structure: It has many brands under the same umbrella group so managing such large
number of individual brands can create conflict of interest.
3. Legal & consumer issues: Although Nestle is global food giant but it got into controversies
over the years like Nestle baby formula boycott. Child labor by suppliers, Chocolate price
fixing etc. which resulted in negative word of mouth.
Opportunities in the SWOT analysis of Nestle
1. Healthy breakfast – Maggi oats or other such healthy breakfast alternatives have a big time
future as most breakfast alternatives are heavy and people are becoming more health
conscious. Nestle needs to do more market penetration with regards to its Cereals.
2. Expanding market: By entering into other markets & penetrating more & more in the rural
markets through its robust supply chain and transition of spots of unorganized business to
organized one will lead to further expansion of the company’s business.
3. Increasing Income levels: Due to stable political scenario, improved literacy rate &
controlled inflation, disposable income of the people is increasing there by resulting into
upsurge in demand & changing their lifestyle.
4. Strategic Alliances: Nestle is already engaged in partnerships with a number of major
companies, such as Coca-Cola, and several others, opening doors of opportunities for the
company. It is one of the main shareholders ofL’Oreal, the world’s largest cosmetics So
partnering with other food giants will help the company in further growth.
5. Focusing more on R & D to handle ethical issues: Recent outcry of Maggi Noodles in
India for lead presence like issue will create hindrances in the future growth of the company.

So in order to handle these health issues Nestle must invest in R & D further to come up with
more hygienic food products.
Threats in the Marketing strategy of Nestle
1. Competition in the market: With increasing number of local & national players it’s
becoming very hard for the companies to differentiate themselves from others. There is also
threat from counterfeit products destroying its brand image in the market.
2. Price of commodities: Increasing price of commodities will result in further increase in the
price. Further increase in price will result in decrease in sales, margins & brand switching.

3. AMUL COMPANY
Marketing Mix of Amul Company
Product in the marketing mix of Amul – Amul has a very very strong product portfolio. Amul
product portfolio is comprised mainly of Dairy products. Amul butter, Amul cheese and Amul
ice cream are cash cows for Amul as they have the major market share in their product category.
Amul ice cream is amongst the top 10 ice cream brands of India.
Price in the marketing mix of Amul – Amul has a strategy of low cost pricing. Some may call
it penetrative pricing. But penetrative pricing strategy is used when the market has a high level of
competition and a player wants to establish itself in the market by giving low prices. However, in
the case of Amul, when Amul started, there were no national players and the dairy market was
unorganized. During the introduction stage itself, Amul had a vision to provide their products to
end customers at the best affordable rates. And the same vision is in place even today.
Today also, you will find that Amul butter, milk and cheese are available at affordable prices
keeping in mind the end customers. You may call these products costly, but the cost has nothing
to do with Amul’s strategy. Remember that transportation costs as well as storage and
distribution costs are very high in FMCG. Thus, as the cost of transportation, storage and
distribution has increased over the years, so has the cost of Amul products gone up. But
considering their value for the average India consumer, these products are still priced at an
affordable rate.
Place in the marketing mix of Amul – Amul has a massive distribution network because its ice
creams, milk, butter and cheese is found practically everywhere. As it is a FMCG product, Amul
follows the methodology of breaking the bulk. The initial factory output is in bulk. Later on this
bulk becomes smaller and smaller and finally one individual slab of butter or scoop of ice cream
is sold at the retail place.
There are two different channels through which Distribution happens in Amul. One is the
procurement channel which is responsible for collection of Milk through dairy co operatives. The
other is the distribution channel which is responsible for distributing the finalized product to the
end customers.
The distribution is as follows.
Amul >> Carrying and forwarding agent >> Distributor >> Dealer / Retailer / Amul Shoppe >>
Customer Amul >> Modern retail

Thus there is a lot of transportation involved for all of Amul’s products. However, the
distribution channel of Amul ensures that the products reach every nook and corner of India.
Promotions in the marketing mix of Amul – Amul is responsible for one of the most unique
and longest running outdoor campaign as well as one of the most known outdoor advertising
characters – The Amul girl. We would like to take this opportunity to specially thank Mr
Eustace fernandes, the creative brain behind the sweet girl. But we should know by now that the
Amul girl is hardly sweet or cute. She is known to be the most naughty advertising girl ever.
Amul hoardings mainly feature the current news and are used to take a tongue in cheek
viewpoint at current happenings. However, each advertisement hits the nail on the head.
The promotions of Amul are mainly for butter but for all the other products there is hardly any
promotions. During the launch of products, Amul is known to go ATL and advertise milk, butter
etc. The Smita Patil ad wherein Smita patil is shown as a village milk collector is one of the most
famous ads for Amul. But overall, the main advertisement is BTL through outdoor, trade
promotions, discount schemes and sales promotions.
The major reason for Amul’s absence in hardcore advertising is that Amul does not want to give
away margins in advertising its products. As per Amul, their maximum budget for advertising is
1% of the turnover. Above and beyond that will directly affect the cost of the product. And the
major reason for Amuls strong presence in the market is its excellent quality combined with the
affordable price. Thus, overall promotions will always be low for Amul except for the outdoor
advertising of Amul butter.
This concludes the marketing mix of Amul. The bottom line is that we love that an Indian brand
like Amul has reached such staggering heights and that we are a part of the time when such a
white revolution took place.
Marketing Strategy of Amul Company
The Marketing strategy of Amul covers various aspects of the business right from segmentation and
targeting to the overall mission and vision of the company and the various parameters which the
company executes to become the top brand that it has in the market. So what is the marketing
strategy of Amul? Let us discuss
Segmentation, targeting, positioning in the Marketing strategy of Amul
The segmentation of Amul is the mass population and in general, you will find people of all
different age groups and demography enjoying Amul products. This is because Amul is not only
present in Ice cream, but also in Milk, Butter, Cheese and other such products. As it has a very
deep product portfolio, it does not differentiate in its customers but uses a mass marketing

principle. And till date, this principle has worked very well for the marketing strategy of Amul.
Similarly, the target audience are the regular middle class people. This is because higher end
customers do have a lot of high end products as an alternative in ice cream. However, for other
products like Butter and cheese, both high end and low end customers are the target. In terms of
positioning, Amul has top of the mind positioning because it is the first brand which comes in
mind when talking of Ice cream, milk, cheese, butter or any other milk based products.
Mission of Amul
“We the motivated and dedicated workforce at amul are committed to produce wholesome and
safe foods of excellent quality to remain market leader through development of quality
management system, state of art technology, innovation and eco-friendly operations to achieve
delightment of customers and milk producers”.
Vision of Amul – Amul has a vision to provide more and more satisfaction to the farmers,
employees and distributors.
Tagline of Amul
The taste of India.
Competitive advantage in the Marketing strategy of Amul
There are two major competitive advantages of Amul over other brands. First and foremost is the
supply chain. Because of the large numbers of dairy suppliers, Amul has a tremendous strength
and reliability in its supply chain. Hence it is able to produce such high volumes. The second
competitive advantage is the wide product portfolio due to which it can run Amul shoppe’s and
also have its products present in retail. The product portfolio is such that products like Butter and
Ice cream are cash cows for the company.
BCG Matrix in the Marketing strategy of Amul
When we plot the BCG matrix, Amul has certain products which are stars whereas others are
cash cows. And in fact, Amul chocolates are question marks because they have very low market
share in a growing market. Amul ice cream and Amul butter can clearly be said to be a cash cow
because they have very high market share and the market in itself is growing with the increase in
population. On the other hand, Dairy products like Milk, buttermilk, cheese, lassi, amul kool etc
have a lot of direct and indirect competition in their niche. However, when compared with the
same type of product, then Amul has a high market share. Thus, these products are stars for
Amul.

Distribution strategy in the Marketing strategy of Amul
Like any FMCG company, Amul concentrates on breaking the bulk. It supplies in huge amounts
to its C&F, who is required to have the right arrangements to store Amul products in bulk. This
C&F then transfers the products to distributors who in turn give it to retailers. Furthermore,
Amul has a direct sale team too which sells to modern retail. Besides this, the company has
exclusive Amul stores which sell all products of Amul brand. Thus, in the marketing strategy of
Amul, distribution is another strength of the brand.
Brand equity in the Marketing strategy of Amul
Because of the excellent products, the top of the mind positioning, the fantastic distribution and
supply chain channels and finally the point of purchase branding and advertising of the Amul
girl, Amul finds itself in a very strong position where its brand equity is concerned. Amul brand
is worth $3.2 billion as per the 2013 brand equity report. Furthermore, most analysts say that
Amul would have touched the $4 billion mark, but the dropping value of the rupee is what
caused the difference.
Competitive analysis in the Marketing strategy of Amul
Amul has some good competitors who have entered the market in the last decade and growing
strong steadily. Most of these ice creams entered regionally but then held on to the regional
market share. Thus, even though individually these brands might not be a worthy adversary,
combined and with their total net aggregate, all of them together are giving a very tough
competition to Amul. Some of these competitors are Kwality walls, Vadilal, Havmore,
Dinshaws, Arun Ice cream, Baskin Robbins, London dairy and others. Many of these ice cream
products have their own niche or geographic targets. Arun ice cream is strong in the south
whereas havmor and Vadilal are strong in the west.
Market analysis in the Marketing strategy of Amul
The FMCG market is highly competitive in nature and is known to have a combination of
organized players as well as unorganized players. Similarly, in FMCG, direct competition is
equally important as indirect competition. For example – During winters, ice cream and cold
milk products will not sell, whereas butter and cheese will sell equally well. But on the other
hand, during summers the demand of ice cream shoots up so much so that companies are not able
to meet demands. Thus, when we analyse the market of Amul, in some cases Amul is the clear
market leader, whereas in other products it is a competitor in the market.

Customer analysis in the Marketing strategy of Amul
The typical customers of Amul belong to the Sec B and Sec C segment wherein they are either
middle class or lower class. Amul in general uses mass marketing and therefore it targets these 2
classes majorly. The high end customers are more likely to prefer a Naturals, a Baskin robbins,
or any other such brand which meets their taste and status.
SWOT Anaysis of Amul Company
Strengths in the SWOT analysis of Amul
Very high market share in ice cream – Amul has the top market share in ice cream segment
which further helps it push other products into the market.
Excellent brand equity – amul is a beloved brand over the years and the contribution of amul
girl and her outdoor ads should specifically be mentioned here.
Excellent quality management – even though amul has such a wide and large distribution
network, hardly any quality complaints come for amul.
Strong distribution network – This is one company which is strong in urban as well as rural
distribution. You will find amul present even in small towns and villages.
Good product portfolio – Amul had a deep product portfolio when compared to any fmcg
company. It has many different variety of milk milk based food items like cheese, butter, milk,
buttermilk, lassi and many others. In ice creams too, amul has a large variety of flavours
Strong Supply chain – Vendors love Amul and amul is known for the white revolution in India.
Rural presence – Strong rural presence of Amul is its plus point. It is mentioned here separately
because this rural presence gives amul a strong competitive advantage.
Weaknesses in the SWOT analysis of Amul
Cost of Operations – Amul’s operation is huge. And so is the cost. Plus the sector is such that
maintaining margins becomes difficult day by day. Thus, to face international players, Amul
needs to maintain the operations in the same manner it is carrying out today. It is not a weakness
but rather a constant challenge for Amul. In fact, during summers, the brand faces severe
shortage of supply.

Chocolates – Amuls expansion to chocolate has failed and hardly any product of Amul
chocolates is selling in the market. Amul needs further products to expand its product line and
increase bottomline.
Opportunities in the SWOT analysis of Amul
Export – Amul can export its product to other countries thereby increasing its turnover and
margins exponentially.
Concentrate more on chocolate market – Amul has a no advertisement policy which creates a
problem for its foray into additional products. Amul should in fact have separate SBU’s and
concentrate more on increasing its product line through chocolates or other such products.
Threats in the SWOT analysis of Amul
Increasing competition in Ice cream segment – Many players, local and international, are
entering the ice cream market thereby taking away share of wallet from Amul. Kwality walls,
Naturals, London dairy, Havmor, Arun ice cream, Vadilal, Ramani, are some of the few brands
who are directly in competition with Amul.

4. CAMPO COMPANY
Marketing Strategy of Campo company
Category: - Beverages
Sector: - Food and Beverages
Tagline/ Slogan: - Pure Spanish Character.
USP: - Campo Viejo wines are at the forefront of Rioja wine making with a state-of-the-art
sustainable winery and award winning Spanish wines to suit every palate.
Segment: - Individuals seeking a premium wine beverage
Target Group: - Young Men & Women from the upper middle class
Positioning: - Deep cherry color that suggests a young, vibrant wine. Rich and intense ripe red
fruit with oak nuances and subtle tones of vanilla and sweet spices.
CURRENT STATUS of CAMPCO
However, the company does not have much visibility in the Indian market. No advertising are
seen
being aired on TV…at least not on the prime channels. The company seems to have restricted
its marketing efforts in south India only.
Campco, being a co-operative is functioning under pressures from various political parties and
is surrounded by various controversies all of which arising out of internal disputes.
Home-made Chocolates
Another area of chocolate industry in India is HOME-MADE CHOCOLATES. This segment
is
highly fragmented and operates independently. They are more pronounced for manufacturing
distinct
flavors and varieties of chocolates in various shapes and size. But, these chocolates are usually
priced at a higher price than that available for branded products for the same quantity. House-
wives
from elite class usually indulge in this kind of business. They usually operate in local area
and through their contact network. Some home-made chocolate manufacturers manufacture
really attractive GIFT CHOCOLATES.
SWOT Analysis
Strengths
1. The drink appeals to a wider audience and tends to offer some flexibility when pairing. Pairs
perfectly with pasta, poultry and fresh light cheeses, grilled chicken and small bites.
2. Price leadership. The wine is available at an affordable price.

3. Bottle recognition & different dispensing instruments.
4. Availability. Campo Viejo wines can be easily found at local grocers and wines shops.
Weaknesses
1. Limited varieties offered by the company. Only 3 varieties are popular amongst the masses.
2. Misuse of brand name for fake beverages affects sales
3. Lower presence globally. It is primarily famous in Spain & other European countries.
Opportunities
1.Less trade barriers give an opportunity for expansion globally
2. Prospective consumers are growing rapidly
Threats
1.The wine industry has slowed down in the past few years.
2. Competitors increasing their market share in Spain.

DATA ANALYSIS AND INTERPRETATIONS
Analysis of data is a process of inspecting, cleaning, transforming and modeling data with the
goal of discovering useful information, suggestions conclusion and support decision making.
Data analysis has multiple facts and approaches, encompassing diverse techniques under a
variety of names, in different business, science and social science domains.
DESCRIPTIVE ANALYSIS
A de3scriptive analysis offers a detailed description through the use of objective or subjective
language to describe some object (a person, place or thing; it may be a “social objective” such as
discrimination), and in the process, give the reader some dominant impression (the thesis) of the
thing being described.
Problems & Challenges in Indian Chocolate Industry
1. TEMPERATURE:
A peculiar problem that hinders the distribution to far-off places is the tendency of chocolates to
melt under even moderate heat. The temperatures can reach as high as 48 degrees in summers,
whereas chocolate starts melting at body temperature (about 37-38 degrees) .Manufacturers
have to take precautionary measures to ensure the preservation of chocolates especially in
summer.
2. UNAVAILABILITY OF CONTROLLED REFRIGERATION:
India does not have controlled refrigerated distribution. Air-condition supermarkets are rare.
Cadbury loses 1.5 percent of annual sales of Rs. 6.8 billion to heat damage. Companies
revise ingredients to make chocolate withstand heat, and so Indian chocolates are more resilient
to heat than Eurupean chocolates by a factor of 2 degrees. Ironically, the chocolate market has
grown recently because smaller retailers have stuffed fridges and coolers supplied by the cola
companies Coke and Pepsi with chocolates.
Nestle and Cadbury have tried to provide loans for retailers to buy fridges, but to hold down
power costs the shopkeepers switch off the fridges at night. As a result the cocoa fat melts and
migrates to the main body of the chocolate bar. When the cooling is switched on in the morning,
the cocoa fat solidifies and turns white, presenting a bizarre, un-sellable white on black form.
Nestle tried to provide fridges with see-through doors, but was appalled to see its
chocolates sandwiched between dead chicken, butter and vegetables.
Small coolers were provided to retailers to keep the chocolate from melting, but that didn't quite
do the trick. Electricity costs money and is not provided in a uniform way, so on and off the
electricity goes and the product may suffer sometimes
3. RAW MATERIALS:
Cocoa is the key raw material and accounts for around 35% of the total material cost
(including packaging) of chocolates. The price of cocoa has been hitting a new high of late.
Cocoa prices are at a near 20-year high at $2358 per ton, up from $900 a year back. India does
not produce cocoa to any noteworthy extent but is a large consumer of chocolates. Consumption
of chocolates and other cocoa-based products, especially among the middle class, has been
growing.

4. TRANSPORTATION:
Chocolate needs to be distributed directly, unlike other FMCG products. 90% of our products are
sold directly to retailers. Building such a direct network in rural areas is a daunting task since the
infrastructure is poor in India in rural areas.
5. THREAT FROM IMPORTED BRANDS:
Free availability of imported brands bought through illegal routes pose a threat to the domestic
chocolate industry. Usually, these imported chocolates taste better than domestic chocolate due
to recipe difference. Hence consumers who are willing to spend a little more, prefer these
imported chocolates.
However, the premium brands, which come through official channels, do not pose a threat
to the market, as these cater to a small niche market. However there is a lot of dumping
from neighboring countries like Dubai, Nepal, etc of inferior brand of imported chocolates.
These are not only of low quality, but are brought very near to their expiry dates. Most of
the cheap chocolate brands that are available do not meet Indian Food Regulations.
External factors affecting growth of chocolate
Industry in INDIA
Good monsoon ensures adequate availability of raw materials, which are mainly agricultural
in nature. Raw material prices have significant influence on margins.
Government policies in terms of licensing, duties, movement of agricultural commodities
etc. also affect the introduction of products, time lag for a product launches, taxes, excise, etc all
influence the business.
Market growth driven by overall economic growth and urbanization also contributes. An
overall booming economy will consume tonnes of chocolates because consumer spending
increases. Also, the absolute number of consumers in middle class & upper middle class
increases.
Rupee depreciation improves export realizations, however it also makes import of raw
material (esp. cocoa) expensive.
Growth Opportunities in Indian Chocolate Industry
Untapped Market & Limited Consumption:
The fact that chocolate is not a traditional food, high prices and domestic production problems
will provide the main problems to market growth. As these markets develop, prices will fall
making these
products more accessible to the wider population. However the Indian market is still untapped
and provides immense scope for growth, both geographically as well as product basket wise.
Chocolates right now reaches about 70mn to 75mn consumers. It is estimated that chocolates
have a potential market of about 116mn consumers.
Chocolate consumption in India is extremely low. Per capita consumption is around
160gms in the urban areas, compared to 8-10kg in the developed countries. The per capita
chocolate consumption in India is still much below the East Asian standards. Hence per
capita consumption has a immense scope for improvement.

Consumption of chocolates in india

Consumption of chocolates in india

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