Executive
Summary
The paper studies the external and internal
environment of Cadbury Australia. Based on this study, an approach is
formulated for future course of action. Such an approach utilises the E
business marketing approaches to open a new market altogether for the
confectionery giant.
The study elaborates upon how Cadbury can
stand a first mover’s advantage over its competitors, if it considers
implementing the ecommerce model.
The following points have been used to
determine Cadbury’s current position in the Australian market:
1.
Market size and Cadbury’s
market share
2.
Behavioural aspects of Target
Market
3.
Cadbury’s position vis-à-vis
its competitors
4.
Its internal organisation and
philosophies
On the basis of the above points a plethora
of recommendations have been made with regard to setting and promotion of an e
business marketing module. The recommendations are stated in brief, below:
1.
Building a technologically
sound website.
2.
Integrating social media in the
promotion efforts of the website.
3.
Utilising technologies such as
SEO, SEM and Bulk Mailing to market the proposition.
4.
Stress on customer relationship
management to build a solid foundation for the model.
5.
Putting up a clever logistical
approach to manage online order receipt and delivery system.
1.
Introduction and Background
Cadbury is a
British confectionery company, founded in 1824. It operates in over 50
countries currently and is the second largest in the world (in the
confectionery industry) after Mars Incorporated. (http://en.wikipedia.org/wiki/Cadbury#Australia_and_New_Zealand)
Cadbury operates three Australian factories as well as one in New
Zealand; two in Melbourne, Victoria (Ringwood and Scoresby), one in Hobart, Tasmania (Claremont).
On 27 February 2009 the confectionery and beverages businesses of Cadbury
Schweppes in, Australia were formally separated and the beverages business
began operating as Schweppes Australia Pty Ltd. In April 2009, Schweppes
Australia was acquired by Asahi
Breweries. (http://en.wikipedia.org/wiki/Cadbury#Australia_and_New_Zealand)
In Australia
Cadbury holds some of the largest selling brands in the market like kit kat and
cherry ripe; It is also the market leader with a 36% share of the total
chocolate consuming market in Australia, comprising of approximately 9.6
million Australians. (www.roymorganonlinestore.com –
Mars bars, cherry ripe & kit kat – the favourites among chocolate bar
consumers.)
2.
Business Concept
Even in
Australia, Cadbury faces competitive threats from its biggest international
rival Mars Incorporated, which holds approximately 12% market share with its
Mars bar, as against 11% by Cadbury’s top selling product, Cherry Ripe. (www.roymorganonlinestore.com – Mars bars, cherry ripe & kit kat – the favourites
among chocolate bar consumers.)
Cadbury can
benefit from a unique first mover advantage by introducing an additional sales
channel for itself on an online platform. Currently the company’s website is
presented as a medium of community building and as a public relations exercise.
However a strong
potential exists to take the community building exercise to a higher level,
integrating the power of social media; along with exploiting the trends in e
commerce to establish an alternative sales channel in the virtual world.
Although the
task is not a simple one and requires focus in areas like logistics and order
handling (given Australia’s hot climate and chocolate largely being an impulse
purchase product), it is imperative to understand the value such endeavour can
bring to the market place and how a bold and novel step can revolutionalise the
way things are done in the confectionery industry.
At present
Australian online retail market stands at a worth of $ 12.3 billion (http://www.startupsmart.com.au/technology/in-pictures-australias-five-key-online-spending-trends/201211298339.html),
this market largely represents a young or middle aged population, which also
forms the core target audience of Cadbury’s various products. Hence, it is
quite obvious, the role an online platform can play in bringing back a lost
share or even a bigger share, to Cadbury’s kitty.
3.
Analysis
Before we
proceed to developing an online business model for Cadbury, it would help to
study the position of Cadbury with reference to various elements in its micro
and macro environment. Such a study will help provide a depth in to the issue
concerning the confectionery giant and how it can capitalise on its existing
capabilities to take over a new market.
a.
Industry
According to a
study, (www.roymorganonlinestore.com – Mars bars, cherry ripe & kit kat – the favourites
among chocolate bar consumers.) the Australian chocolate and
confectionery market comprises of over 9.6 million consumers. The market is
catered by 10 major brands mostly, out of these over 5 brands are owned by
Cadbury.
Being a part of
the local taste and cuisine, chocolate is an engrained part of Australian
dietary habits hence, has a very old and flourishing industry exists around the
trade of confectionery and chocolate.
It is important
to note that, Cadbury even owns some of the most popular and oldest brands in
Australian chocolate market (like, Cherry Ripe and Kit Kat), making it a strong
element in the whole industry.
b.
Market
As mentioned in
the previous point, Australia harbours a population of over 9.6 million
chocolate consumers; this is a huge market potential for any chocolate seller,
including a player as well grounded as Cadbury. It is of even more relevance to
know that the total population of chocolate consumers exhibits frequent repeat
purchases behaviour.
Also of
importance is the fact that a huge chunk of the total consumers are people aged
between 15-39 years and the majority of them are male. This is relatable to the
trends in e commerce, where majority of the target audience for e-commerce
setups comes from people who are young or middle aged males.
Chocolate and
confectionery largely being an impulse or a habitual purchase decision, or
sales for specific products, motivated by occasion; presents a challenge for
marketers to integrate such buying patterns into the promotion of an online
sales model for Cadbury’s.
c.
Competitor
Even in
Australia Cadbury faces tough competition from its international rival Mars
incorporated. According to surveys, mars bars (a product of Mars incorporated)
are the market leaders in the chocolate market with 12% of total market share;
products from Cadbury’s such as Cherry Ripe hold the second highest share with
11% and Kit Kat with 10%.
Cadbury can
exploit a first mover’s advantage over its closest competitor Mars, by bringing
a first of its kind online sales model to life. It is evident from a brief
study of the websites of both the organisations that, whereas Cadbury
australia’s website is working towards building a community interaction and
following by integrating social media plug ins, blogposts and interactive chat
modules; Mars Australia’s website looks like a formality executed, with only
display of inadequate static information. Thus, Cadbury already has a strong
platform to build upon an advantage.
d.
Organisational Analysis
With a
vision statement that envisions a dream of ‘ a Cadbury for every pocket’ and a
mission statement that focuses on delivery of quality always, it is of
significance to Cadbury to develop an online store to put the product within
arm’s reach of the ultimate consumer; striking down barriers of any sort.
Cadbury
has always aspired to be able to relate to a younger marker, which fuels the
following of the brand. It has always tried to be affordable and easily
accessible to its target audience, given their impulse and repeat purchasing
behaviour. Such an organisational focus will be justified if Cadbury could
develop a successful system to operate in the online sphere making a better
connect with its target audience.
4.
Online Business Model (Brief)
The unique
selling proposition being detailed for Cadbury’s online sales model is, to make
Cadbury available at arm’s reach to a prospective consumer through a
distribution and delivery channel which provides more comfort to the consumer.
Such a sales
platform will also be spear heading community building exercises for the
organisation thus, generating a positive word for the brand.
The platform
will require:
-integrating
social media with the strategy to capitalise on reaching out to larger number
of people and making a prolonged impression.
-social media
will also help in engaging target audience in community building as well as
sales promotion efforts.
-utilising
processes such as search engine marketing (SEM) and search engine optimisation
(SEO) to increase the brand’s foot print on the internet.
-working on
strategies like price motivation, timely logistics and customer support, to
encourage purchases and instil confidence among consumers for the new platform.
5. Strategic plan for e-commerce initiatives
The strategic
plan for Cadbury’s e-commerce initiatives provides the details of planning and
execution of bringing the online platform into action. This plan will start in
its formative stages after laying down the objectives of the ecommerce
framework that the company is willing to create.
5.1.
Objectives
The objectives under Cadbury’s ecommerce
business model plan are outlined below:
a)
Alternative sales channel- Cadbury’s e
portal will act as alternative sales channel, promoting even wider distribution
of the company’s products; in line with the vision statement of ‘a Cadbury for
every pocket’. This channel is also targeted to capture a newer market still
out of reach of cadbury’s competitors.
b) New products- The website will also focus on certain product variants which have
higher probabilities of online purchases by a consumer. Such products can be on
the lines of, gifting packs - which allow one to share the love of chocolates
with loved ones based in far flung places; or, super saver packs which promote
sales by driving the idea of thrift in the minds of the consumer; or special
combos where Cadbury products can be paired with products from different
categories and brands, for example, a valentine’s pack combining Cadbury
chocolates with a teddy and flowers, promoted on the occasion.
c) Capitalising on trends- It is largely observed that Chocolate and confectionery purchasers
are usually young and exhibit impulse buying behaviours. This is also true for
most online shoppers. The proposed ecommerce site for Cadbury will benefit from
capitalising on these trends.
d) Community Building- the website is also pitched at filling for a community development
role. The website by attracting a large target audience will strive to gather
support and attention for community building and fan following promoting
activities undertaken on social networking sites like facebook, twitter and
youtube. Also it will act as a public relationship building tool by hosting
blog posts, company news, activities and encouraging live interaction between
public and company personnel by means of the website itself.
5.2.
Strategy
This part elaborates on the steps the
organisation needs to actualize to achieve the objectives laid down for the
ecommerce programs. The following form a crucial part of Cadbury’s ecommerce
strategy in Australian web sales sphere:
a) Knowing the market- A crucial part of formulating the strategy is to know the target
market. Cadbury’s target market is young or middle aged between the brackets of
14-39 year olds. This market is tech savvy and is active online on various
social media sites and forums. This group also happens to be the first
generation of online shoppers therefore; it is still experimenting and toying
with the technology. The prospective consumer exhibits impulse buying behaviour
and has a propensity to shell out small amounts only on the purchase of Cadbury
products.
b) Easy to Use- The ecommerce platform need to be simple so as to be understandable
by different sections of the target audience. It should be simple enough to be
understood by a country side simpleton or a college student. Such a platform
will encourage use by prospects and easy familiarity with its various processes,
making it approachable; stimulating repeat sales and a higher comfort level
experienced by customer in dealing with such technology.
c) Pricing- while selling online pricing plays a major role In ensuring sales.
We have already observed that a typical Cadbury customer has a propensity to
shell out small amounts on a single purchase transaction. This fact cannot be
ignored while deciding for an online pricing strategy.
d) Logistics and Inventory- A critical aspect of online selling of chocolates will be of
managing logistics and inventory. Chocolate being an impulse purchase or an
occasion specific purchase (in case of gifting) requires prompt delivery and
consumption. In case of Cadbury it will help to establish delivery models of
the likes of Domino’s pizza ensuring delivery within day’s time, half a day’s
time or even better if made within an hour or two. Decentralised logistic
management by the way of establishing distribution centres across the
geographical area of the market will help ensure timely deliveries and accurate
inventory management.
e) Customer Relationship
Management- As in any physical market, customer
relationship is crucial even in the online virtual market. Approaches need to
be implemented to monitor customer feedback and ensure a positive experience
for the customer. Also involving customer in relation building activities will
win their support. Simultaneously maintaining accurate customer database can
mean a huge resource for marketing promotions and, encouraging referrals from
already satisfied patrons.
f) Scalable- The online model should be such so as to be scalable to larger
proportions when the need arises and to be able to adapt to changing
technologies. An ecommerce business model should also be flexible enough to
employ different channels at the same time so as to create more sales avenues
on the World Wide Web.
g) Marketing Campaigns- It is quite obvious that marketing online will require different
approaches and technology vis-à-vis marketing offline. Marketing mediums
available online and the trends associated with each should be carefully
studied before Cadbury proceeds to devise a marketing campaign for promotion of
online wing.
h) Team- Last but not the least, we will stress on the importance of a team.
The company needs to form an internal team in the organisation structure which
will be exclusively managing the online platform. Such a team should comprise
of people proficient in the technology employed to create the ecommerce
framework, familiar with trends in the e world and the various avenues
available to propagate a business, have a sound enquiry in to the target
customer’s psyche and can handle logistics, inventory and customer relationship
management with dexterity.
5.3. Value Proposition
Cadbury’s value
proposition by establishing an online business model is, to offer its products
(and special variants of its products) to the ultimate consumer through an even
more efficient and effective sales and distribution channel, adding to the
comfort of the customer by making available services like, door step delivery,
cash on delivery payment, increasing the choices available, cutting through
physical barriers, and reducing costs simultaneously.
5.4. Service Delivery Strategy
In this section, we discuss how the actual
e commerce framework will work to deliver the value proposition of Cadbury.
a) Choice of online platform-
The basics of building up an ecommerce platform lie
in the selection of a technology to develop the website and integrating the
payment gateway.
Since, Cadbury Australia
already has a functioning website which is already handling online traffic very
well, worries for selection of a web development technology are already taken
care of. The only modification needed right now to the existing site structure
is the addition of a shopping catalogue; which displays the confectionery,
chocolate and its various variants on sale, along with the price and an option
to order multiple quantities of the same product or a combination of products.
b) Payment gateway
integration- Once the basic structure of the
website is ready along with the shopping catalogue, we’d proceed to getting the
payment gateway integrated. A payment gateway is a software embedded on the
site that allows a merchant to capture payment from the customer’s bank against
the goods and services purchased by the customer on the online platform.
Cadbury can utilise the services of any gateway provider like Paypal, eway,
qvalent, etc depending upon the integration time, service fee and commission
charged by the provider.
c) Security- Online systems are vulnerable to a fast growing stream of online
fraud and crime. In order to guard against such evils in the online industry it
is a must to put some checks on the website to monitor unwanted activities and
to protect the personal information and money received by online shopping
models such as Cadbury’s. Thus it will be recommended that cadbury’s Australia
procures tools such as PCI certified scanners, SSL certificates, ReD
technologies and the like to protect shopper’s interest and guard against
elements such as hackers.
d) Logistics and Inventory- For a purchase like chocolate which needs to be delivered
immediately, well protected against the Australian hot climate, to ensure a
quality delivery; it is recommended that Cadbury establishes a decentralised
distribution model for servicing online purchases. Establishing a distribution
centre in all major localities and employing technologies such as cool box
(counterparts of hot box, as in Pizza delivery industry) while delivering can
ensure in delighting customers and winning their praise. Also a decentralised
delivery model calls for an integrated inventory management model wherein,
updated inventory from all distribution hubs is fed live to a centralised
inventory office, where all the information is compiled, documented, analysed
and used.
Cadbury can choose from,
contracting with courier companies for its specialised assignment or, establish
its own setup for distribution and inventory management.
e) Marketing and Promotion- Cadbury can benefit from online promotion by utilising the following
methods:
. Search Engine Optimisation – This is a
process wherein a web site manager aims to popularise a site in search engine
results. This is achieved by building, updating and linking an inventory of
keywords, tags and Meta tags on back end platforms of various search engines.
Cadbury can benefit from SEO by becoming visible to a prospective consumer when
he/she conducts an organic search on a search engine.
. Search Engine Marketing – Cadbury can
also aim to popularise it e-tailing venture by placing ads on various search
engines and web pages which are of relevance to the target market. Example of
SEM will be to employ Google Ads and Facebook Ads to propagate a web site.
. Social
Media – Cadbury can also build an audience for its marketing efforts and
promote its products using social media like Facebook, Twitter and Youtube.
Engaging prospects by means of contests, coupon code offers and discount
schemes, published on such media can promote sales for the confectionery giant.
Additionally Cadbury can integrate social media plug ins on its website and
publish web links on social media, so as to achieve a seamless flow from social
media promotion to the actual site for sales and vice versa, for community
building.
. On site promotion- On site promotions
like bulk discounts, shipping discounts, coupon code offers, etc. can be
published on the website itself to promote prospects to make actual purchase
decision.
. Email-
Cadbury can also undertake bulk email campaigns to promote certain
products, occasion specific variants and the like; among the email database of
existing customers or, a specially collected database targeting its prospective
market.
f) Customer relationship
management- A long term relationship can be formed
with a customer by special engagement tactics. This relationship building will
not only fetch repeat sales but will also encourage the customer to self
initiate word of mouth publicity or generate referrals. Cadbury can achieve
this by integrating certain events in its social media engagement schedule.
Also, tools such as live chat on website and timely customer feedback survey go
a long way in establishing strong bonds with a customer.
5.5. Critical Success Factors
After considering the whole setup in
detail, we must give special attention to areas which will be critical in determining
the success of Cadbury Australia’s ecommerce venture:
a) Easy to use interface- the online retail interface should be attractive, simple and easy
to use. Only such an approach will motivate a consumer to log on repeatedly and
make purchases.
b) Customer care- Grievance redressal and feedback monitoring will be the key to
establishing brand loyalty in the hearts of the consumer.
c) Logistics- immediate delivery and consistent quality will ensure impulse
buying behaviour from the target audience.
d) Product and pricing- Value for money products and similar pricing decisions are the key
to attracting a currently experimenting online shopper.
6. Recommendations and Conclusion
Cadbury, although a market leader (in
Australia) in its segment currently, must not ignore the fact that the market
is adapting to newer technologies faster than the speed of thought. Gauging the
inevitability of adapting to newer technologies various modern businesses have
aligned their approaches with these technologies, and have reaped the benefit
of the same.
In this paper we have successfully chalked
out an approach for Cadbury Australia to align its capabilities and resources
to a technology such as e-tailing, in order to prepare for future growth
trends.
It is recommended for Cadbury to:
1. Initiate
resource mobilisation to meet technological requirements for setting up the
e commerce framework.
2. Mobilise a specialised team to handle the online operations. Such a team
should be proficient in technology as well as marketing strategy and should
know how to operate various marketing tools.
3. Create
an inventory of ideas to market and promote the e business among its target
audience.
4. Work on the offline infrastructure, such as logistics and customer support
execution, which would support the online model.
Assignment Brief:
E-business Marketing
3000 words，Maximum 20
printed pages, 1.5 line- spaced and 12-point font
