Because of Cadbury’s current strong presence in those markets, India was one of its most resilient markets with sales growth of 20% and profits growing at 30% in a competitive market. Kraft believed the Cadbury purchase was also necessary because of the likelihood of Nestle and Hershey joining together. Kraft also believed it could squeeze savings of at least $675m annually by the end of the third year. The Kraft Foods management saw the merger as a logical next step in our transformation toward a high-growth, higher-margin company.
The organization also justified the merger in order to build a “global powerhouse in snacks, confectionery and quick meals. ” Following the purchase of Cadbury, Kraft commanded 14. 8% of the global candy and gum market. Kraft argued that it could take advantage of the Cadbury distribution in developing markets of India, Brazil and Mexico. As incomes rise in these developing nations, Kraft hopes that products such as Oreo will become impulse buys for children. Mars, Inc. is second in the confectionery market with 14. 6% share, followed by Nestle with 7. %. At the time of the purchase, the chocolate and sugar industry had been growing rapidly at 15% over the previous three years and was valued at $113 billion. The purchase of Cadbury was considered strange because they did not have a strong foothold on the confectionery market, but at the time Kraft noted their production of confectionery foods like Toblerone and candy foods like Oreo. Cadbury also owned popular gum brands such as Stride, Trident, Acquisition fallout Cadbury sales were flat after Kraft’s acquisition.
The Term Paper on Kraft Foods Group Inc.
... powerhouse in snacks, confectionery and quick meals.”[33] Following the purchase of Cadbury, Kraft commanded 14.8% of the global candy and gum market. Kraft argued that ... with 3,400 employees.[44] Spinoff of Kraft Foods Group Former Kraft Foods corporate logo In August 2011, Kraft Foods announced plans to split into two publicly ...
Despite the Cadbury takeover helping to boost sales by 30%, Kraft’s net profit for the fourth quarter fell 24% to $540m due to costs associated with integrating the UK business after the acquisition. Kraft suffered from one-time $1. 3billion of implementation costs to achieve just $675 million in recurring annual cost synergies by the end of 2012 (estimated).
[44] Kraft was forced to increase prices to offset rising commodity costs in North America and Europe. Kraft has had to contend with the higher cost of ingredients such as corn, sugar and cocoa.
Kraft chief executive Irene Rosenfeld said, “We expect it will remain weak for the foreseeable future. ” Taking into account integration costs, the acquisition knocked about 33% off Kraft’s earnings per share Immediately after the purchase of Cadbury, in March 2011, Kraft caused national outrage when they sold the site of a historic Cadbury factory it vowed not to close for L50million after initially publically promising the continuity of production within the UK in order to win over support for the deal from shareholders. Instead, production was immediately outsourced to Poland.
The Somerdale Factory was closed just days after the takeover by Kraft Foods. Former Cadbury workers demanded an apology for the abrupt selling of the plant, but Kraft’s management refused to explain their actions. Kraft continues to use Cadbury brands in emerging markets to expand all of its products. In April 2011, Kraft set to invest $150 million in South Africa’s manufacturing plants over three years. President Sanjay Khosla said, “South Africa is a priority market for us, where we focus on power brands like Cadbury chocolate. Figure 1 Presence in India
Figure 1 Presence in India Cadbury in India Cadbury began its operations in India by forming Cadbury India Ltd. in 1948. They imported chocolates to the Indian market. After 64 years of existence in India the company has six company owned manufacturing facilities at various places across the country. It also has 4 sales offices one each in all 4 metros in India, with its corporate office located in Mumbai. Cadbury India operates in five categories which include the following: * Chocolate * Confectionery * Beverages * Biscuits * Gum and Candy
The Research paper on British East India Company
The British East India Company was the main source of trade between the east and Britain for more that 200 years. I chose to do my research paper on the British east India Company. The British east India Company was the most important of the various East India companies; this company was a major force in the history of India for more than 200 years. Queen Elizabeth I granted the original charter ...
In the chocolate and confectionery business, the company has been a leader in the market throughout its tenure. Their mission statement “Make Today Delicious” gives the hint of what they are trying to achieve as their business. Since 1965 Cadbury has pioneered the cocoa cultivation in Kerala, Karnataka and Tamil Nadu in India and has worked with the ‘Kerala Agricultural University’ to undertake research in cocoa production. They have released clones and hybrids which have helped them improve the yield and reduce the loss of crops due to natural and environmental factors.
The company has helped a lot of farmers by engaging them in this endeavor. Their success is attributed by the fact that the cocoa tree is now being called as ‘Cadbury tree’ by people. Cadbury India Ltd. employs about 2000 people across the country. With a long existence in the Indian market the company reaches out to the millions of people through its widespread distribution network having approximately 2100 distributors and 4. 5 lac retail outlets. Chocolate consumption has gained popularity in India due to rising prosperity.
The company defines themselves as being inspired by the consumers and that they listen, watch and learn from their consumers. They want to make delicious food items for their consumers which they can feel good about as and when they have it. They believe that they can make a good tasting difference everywhere and that improvement in their workplace, partnerships and communities can help them achieve what they desire. The company has a value system in place that encapsulates the values of trust, ownership, simplicity, transparency, leadership and collective efforts.
They have an ambition of growing by building a high performing organization and by exploiting their sales capacities to the maximum possible and by reducing the costs without compromising the quality for which they are known throughout the world and which stands as one of their competitive advantages besides their other assets. Size of the Market The company has an existence which goes long back in the history. The company owns approximately 70% value share and approximately 62% volume share in the Indian chocolate market.
The Essay on Marketing strategies of the mass-market chocolate industry
This report is an evaluation of the marketing strategies used in the mass-market chocolate confection industry in the United Kingdom (UK). The four brands this report studies in detail are Cadbury, Galaxy, Kit Kat, and Maltesers. The UK mass-marker chocolate confectionary market is the biggest in the European Union and sales are heavily reliant on a solid marketing strategy. Using the four brands ...
