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THE CHOCOLATE INDUSTRY HISTORY Chocolates had its beginnings in the times of the Mayas and the Aztecs Hershey Food Company was the first to bring out chocolates in the currently popular solid form. The main ingredient of chocolates -: cocoa (40% OF Cost factor) sugar milk solids permitted emulsifiers


CHOCOLATE AS A PRODUCT Product category comes under Fast Moving Consumer Foods (FMCG) Purchased as a convenience good. General characteristics of this product are: low involvement product lot of brand switching

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Needs Satisfied : Physiological needs - satisfy the basic need of hunger. Belonging - seen as contemporary and trendy. Affection - parents have traditionally purchased chocolates for their children to show their love and affection. Social - westernized and upwardly mobile, exchange chocolates as gifts. Aspiration – A lot of people still can not afford chocolates

Chocolate Industry in India : 

Chocolate Industry in India The chocolate industry in India has a size of 23,000 tonnes Worth about Rs. 650 crores. Chocolate market is predominantly urban with coverage of 95%.

The Major Players : 

The Major Players The major national players in the chocolate market in India are: 1. Nestlé India Limited 2. Cadbury India Limited 3. Gujarat Cooperative Milk Marketing Federation Limited (Amul)

Nestlé India Ltd. : 

Nestlé India Ltd. Nestlé is one of the oldest food MNC operating in India, with a presence of over a century. Nestlé forayed into chocolates & confectionery in 1990. The category contributes 14% to Nestlé‘s turnover. Product Portfolio-: Kit Kat Munch Charge

Amul : 

Amul Gujarat Co-operative Milk Marketing Federation markets chocolates under the Amul brand. Product portfolio-: Amul Milk Chocolate Amul Fruit & Nut Amul Crisp Amul Crunch Amul Orange Amul Bitter Amul Badambar. It does not enjoy leadership in the segment. But this year it has chalked out an aggressive plan to revive its chocolate products

Market Segmentation With Respect To Product Forms : 

Market Segmentation With Respect To Product Forms Moulded Chocolate Segment This segment constitutes 50% of the total market Today, this segment grows at 40% per annum, and is likely to remain an important segment for further growth. Brands in this segment- Cadbury-CDM, Fruit & Nut, Crackle, Bournville Nestle-Nestle Classic, Nestle Milk Chocolate and Nestle Crunch.

2. Countline Bars Segment : 

2. Countline Bars Segment This segment forms 33% of the chocolates market. Brands in this segment-: Cadbury brands- 5-Star, Break, Real, Krisp, and Double Decker. Nestle -Bar-One.

3. Chocolate Wafers : 

3. Chocolate Wafers Worth over Rs. 100 crores. The growth rate of this segment is 15-20% annually. It is a very lucrative segment. 60% to 70% of the total advertisement budget of major companies on this segment. Brands in this segment-: Cadbury brands-Perk, Picnic Nestle-KitKat

4. Choco Panned Segments : 

4. Choco Panned Segments This segment forms 4% of the total market. Cadbury has 100% of the market in this segment. The major brands are Nutties, Caramels, Butterscotch and Tiffins.

5. Sugar Panned Segment : 

5. Sugar Panned Segment This segment forms 15% of the total market. Cadbury has about 98% of this segment, its major brands being Gems and Eclairs.


PRODUCT LIFE CYCLE In 1993-94, it looked that chocolates had completed the mature of PLC and was passing through its decline stage Volumes had fallen. The total tonnage decreased from 12,000 tones to 8,000 tonnes. Cadbury bounced back in 1994 when cocoa prices again fell to their normal level. Changed positioning which had been safely nurtured over many years, that lead to a dramatic growth in tonnage from 10,000 tonnes to 16,000 tonnes in period 1994-96. .


The strategy of the company was to bring about a change in adult's attitude towards chocolate eating. However, there was another increase in the prices of cocoa, which led to the decline in the sales till early mid 1997. Since then the cocoa prices stabilized leading to a reversal in the declining trend. Thus, PLC for the category can be described as scalloped PLC as industry moved back from mature stage to growth stage. PRODUCT LIFE CYCLE

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Distribution: Chocolate being an impulse purchase, wide and heterogeneous distribution channels are important. Visibility - for an impulse purchase: the consumer makes the decision most often than not when he sees the products displayed at the retail point. A recent in-depth survey carried out by Cadbury showed that more than 35% of the total sales of chocolates are on impulse. Thus visibility will surely spur the purchase of chocolates. PLACE

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Unfortunately, storing in refrigerators defeats this very purpose the consumer should have it within arm's length of desire. It should be observable to have top of the mind awareness In India, distribution for chocolates gain special significance due to the very hot weather conditions during summer months. PLACE

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Nestlé has a retail distribution network of: 0.65mn outlets reaching 3300 towns, serviced by a network of over 4000 distributors. Nestlé is expanding its retail distribution reach and expects to cover 1mn outlets Over the 40 years that Nestlé has been in India , it has invested in 6 factories and developed relationships with many co-packers and suppliers. PLACE

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At the outset, the chocolate market appears to be price-sensitive. This is starkly brought out in the following cases: When the excise-duty on chocolates was raised from 16.5% to 27.5% cocoa prices rose by 25%in 1992-93, the retail prices went up by 30%. the sales and consumption fell by more than 30% in the next two years. PRICE SENSITIVITY

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Due to the price sensitive nature of the market, the companies are reducing the pack sizes to be able to offer chocolates at affordable prices, and fit them to a Rs. 6-8 bracket. There is a drive towards smaller, convenient packs for a larger audience and it also increases trial. However, the upper segments of the consumer base are not price-sensitive Cadbury has done Line stretch upwards by introducing brands like temptations Line filling by having chocolates for all price ranges and different sizes

Our Evaluation Of The Advertising Strategy : 

Our Evaluation Of The Advertising Strategy


PRIMARY SURVEY Q. Do the respondents like having chocolates ?


PRIMARY SURVEY Reasons for not liking chocolates PRIMARY SURVEY


PRIMARY SURVEY Q. Which chocolate do the consumers prefer?


PRIMARY SURVEY Q. Do consumers purchase chocolate for self-consumption?


PRIMARY SURVEY Q. How much does the consumer spend during his each purchase?


PRIMARY SURVEY Q. The key attributes that affect the buying behaviour of consumers?

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