ANALYZING MARKETS

Analyzing Consumer Markets

Consumer Behavior is the study how individuals, groups and organizations select, buy, use and dispose off goods, services, ideas or experiences to satisfy their needs and wants.

Factors affecting consumer behavior are :

Cultural factors :

5 star available in various quantities and is easily affordable irrespective of the social status. since Indians love to eat sweet after their meals , they generally prefer chocolates . Thus, 5 Star is consumed in various parts of India in the form of an after food dessert.

Social factors :

The behavior of people can be affected by family, friends, co-workers, religious groups, professional groups, inspirational groups etc. another direct influence is the family of procreation i.e. the person’s spouse and children.

Reference groups such as family and friends consume 5 star and hence other people looking at them also feel like trying it. Hence in this way socially the use of a product is effected.

Personal factors :

A person’s age, occupation, personality and perception of oneself, lifestyle, values etc also affects the choices we make.

5 Star is consumed by any one and every one in the society. No special status or personality or lifestyle is required to do the same.

Theories which govern the consumer behavior are :

Freud'sTheory

It is a sales theory which supposes that consumers choose whether or not to purchase a product due to unconscious desires and motivators, and that the qualities of the product, such as touch, taste or smell, remind them of past events. Recognizing how the elements of a product trigger an emotional response from the consumer can help a marketer or salesperson understand how to lead a consumer toward making a purchase.

When we link this theory to 5 star we find that most of the time it is consumed without any actual stated reason. It is consumed  just for a mood change, or when there is a craving to eat something sweet.

Maslow's Hierarchy of Needs 

Maslow's Hierarchy of Needs is a "content theory" of motivation"

The classes of needs were summarized by Maslow as follows:

5 Star is consumed in India as a dessert either after meal or anytime anywhere. Hence, according to this theory, 5 Star falls under the basic need  i.e. the psychological needs.

Herzberg's Two Factor Theory

Herzberg's theory is related to certain characteristics of job related to job satisfaction, while certain other factors are related with job dissatisfaction. These factors are:

 Here 5 star's seller has a role to play. He need to identify the motivators  or the person who is satisfied by its characteristics and taste.

Analyzing Business Markets 

A business market consists of all organizations that acquire goods and services used in the production of other products and services that are sold, rented or supplied to others.

Characteristics of business markets

• Fewer, larger buyers
• Close supplier-customer relationship
• Geographically concentrated buyers
• Derived demand
• Inelastic demand
• Fluctuating demand
• Professional purchasing
• Many buying influences 
• Multiple sales calls
• Direct purchasing
• Reciprocity
• Leasing

 In a business scenario there are three types of buying situations

• Straight rebuy
• Modified rebuy
• New task 

 Factors Influencing Business Buying Behaviour are depicted in figure below

For any confectionery to be manufactured , the supply chain include raw material suppliers to the manufacturer. Extensive search is done about the supplier. Quotations etc are called and one with the best price and service is fixed. Cadbury does regular checks to maintain the quality of 5 star. It also make sure that time to time new variants are launched.

SALES MANAGEMENT

Sales Management

The AMA defines sales management as ‘the planning, direction and control of the personal selling activities of a business unit, including recruiting, selecting, training, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the sales force.’ It is the business discipline which is based on the practical application of sales techniques and the management of a firm’s sales operations. It is an important aspect of business as it generates revenue for the firm and leads it to profits and future growth.

The sales management model is given below. It is how any sales department of an organization functions.

Sales management can involve any of the following activities:

(1) formulation of sales strategy,sales force compensation policies, sales revenue forecasts, and sales plan,
(2) implementation of sales strategy through selecting, training, motivating, and supporting the sales force, setting sales revenue targets 
(3) sales force management through development and implementation of sales performance, monitoring, and evaluation methods, and analysis of associated behavioral patterns and costs.

In case of 5 Star ,the sales management team should be aware of the competition and should do everything possible to promote the product in order to make it a market leader or help in retaining the position .The  price is more or less same when compared to competitors and hence extra efforts need to be put in order to persuade the customers. The benefit that 5 star has over its competitors is that it offers variety in flavors. Cadbury has always had good presentation,demonstration and high brand recall, so it was always successful in promoting 5 Star.

HOLISTIC MARKETING

Holistic Marketing

According to Business dictionary holistic marketing is defined as "A marketing strategy that is developed by thinking about the business as a whole, its place in the broader economy and society, and in the lives of its customers. It attempts to develop and maintain multiple perspectives on the company’s commercial activities.

Holistic Marketing has four main components :

Cadbury through various channels like print,TVC etc reaches its audiences and inform them about their products.The company also maintains good performance and internal marketing policy.Cadbury performs multiple CSR activities like GurikhaProject,it also partnered with Vatsalya Foundation, an NGO working with underprivileged street children in Mumbai.They  believe that for sustaining in the long run it is very important to give back to the society .

Cadbury use integrated marketing to advertise its products and inform the customers They have strong internal communication system and the various departments work in coordination with each other for growth of the company .They also follow a strong set of ethics and culture.

BRANDING

   

Brand

AMA defines brand and branding as "a name,term,sign,symbol or design or a combination of them,intended to identify the goods or devices of one seller or a group of sellers and to differentiate them from those of competitors." 

Cadbury as brand was first launched in the year 1824 headquarter in Birmingham, United Kingdoman and  launched in India on 19 July 1948 , headquarter in Mumbai.5 Star was launched in 1969, 5 Star soon became the star of every refrigerator and pocket; people could not resist biting into one.
Being the second largest brand in the Cadbury portfolio, 5 Star enjoys extensive marketing and promotion. Continuous product development activities and interesting advertisements have ensured that 5 Star enjoys undivided attention and demand from its countless fans. This chocolate is iconic. To every chocolate-lover’s taste buds, it brings back mouth-watering memories. 

Brand Equity 

AMA defines brand equity as "Brand equity is a phrase used in the marketing industry to try to describe the value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products with a less well known name, as consumers believe that a product with a well-known name is better than products with less well known names. "

Within a pyramid, the model highlights four key levels that you can work through to create a successful brand. These four levels are:

1. Brand identity.
2. Brand meaning.
3. Brand responses.
4. Brand relationships.

Within these four levels are six building blocks that further help with brand development. These six building blocks are salience, performance, imagery, judgments, feelings, and resonance.

The brand equity of 5 Star very high as it is a brand that belongs to CADBURY . Cadbury itself as a brand has high brand equity and has been always associated to quality and value for money products .

SEGMENTATION, TARGETING and POSITIONING

  

Segmentation

According to AMA market segment refers to "The process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs. Each subset may conceivably be chosen as a market target to be reached with a distinct marketing strategy. The process begins with a basis of segmentation-a product-specific factor that reflects differences in customers' requirements or responsiveness to marketing variables. Segment descriptors are then chosen, based on their ability to identify segments, to account for variance in the segmentation basis, and to suggest competitive strategy implications. To be of strategic value, the resulting segments must be measurable, accessible, sufficiently different to justify a meaningful variation in strategy, substantial, and durable.

The elements of segmentation is depicted in the figure below.

Targeting

Targeting, according to AMA, is “narrowly focusing ads and keywords to attract a specific, marketing profiled searcher and potential customer.

”Target market is defined as the particular segment of a population on which the seller focuses its merchandising and promotional expertise to satisfy that sub-market in order to accomplish its profit objectives.

Since 5 Star is consumed by people from every age group, geographic location, gender and so its ads and promotional campaigns are designed in such a way that it targets all the sections of the society. In short rich or poor, male or female, kid or adult, everyone is a consumer of 5 Star.

Positioning

Product positioning as defined by AMA is ‘the way consumers, users, buyers and others view competitive brands or types of products. As determined by market research techniques, the various products are plotted onto maps, using product attributes as dimensions.” 

PROMOTIONS and INTEGRATED MARKETING COMMUNICATIONS

How a brand is Promoted

After the product and its pricing is decided the final step comes to promotion of the product. It is the most important part of the marketing mix.

To be able to effectively communicate about the product, one should follow following 8 steps :

 

• For 5 star people of all age groups are TG
• Since 5 star belong to brand Cadbury so having an image benefit,whenever  someone recall chocolate caramel and nougat as ingredients what comes to mind is 5 star.
• 5 star has always done creative ads and moreover some time back it had a beautiful message saying "No hard Fillings". Everyone get the idea what they are trying to say
• Communication channel through which people advertise about 5 star can be TVC,print,word of mouth etc
• Budget is decided on how to go about the campaign or the ad.
• Marketing communication budget is allocated on 8 major modes : Advertising, Sales Promotion, PR, events, direct marketing, interactive marketing, word of mouth marketing and sales force. All these factors helped 5 star in building long term image,it has drawn attention through its various contests etc.
• Measurement of communication result is done by the fact that how much are the sales and what revenue is generated from it.

Integrated Marketing Communication 

AMA defines IMC as "a planning process designed to assure that all brand contacts received by a customer or prospect of a product,service or organization are relevant to that person or consistent overtime.

In this different modes of promotion and communication work hand in hand to provide consumers with the entire brand experience. It is an effort to position a brand in almost similar way across all mediums. It aims to get advertising, sales promotion, public relations and personal selling etc. Promotions are most effective when they are combined with advertising.

Various AD and Promotional campaign that 5 Star  has done are :

 

The Win With 5 Star Promotion is a consumer promotion activity launched by Cadbury India Private Limited that offers its consumers who buy 5 Star products in its limited edition variants, hereinafter referred to as “5 Star bars”, an opportunity to win a holiday in Bermuda along with a host of other prizes.

Other Campaign include "Lost in 5 Star" which was a contest in whuch advertising about 5 star was done.

These days 5 Star is recognized by "RAMESH and SURESH ads whether as TVC,Print or digital. It keeps changing it tag lines and also in regular intervals Cadbury releases a new AD so as to offer costumer something new everytime.

The following link will give all the evolution of ADs that were used to promote 5 star 

https://www.youtube.com/user/CadburyADCentre/videos.

 

DISTRIBUTION

Distribution Channels

Product distribution (or place) is one of the four elements of the marketing mix. According to AMA distribution in The marketing and carrying of products to consumers,

The various channels of distribution can be : 

Cadbury's distribution channels include the manufacturing warehouses where the chocolate production takes place. This is followed by wholesale and then retailer. From retailer the product is sold to the consumer.

Channel Design Decision :

Following are the points marketers keep in mind while designing a distribution channel :

• Analyzing customer wants
• Establishing objectives and constrains
• Identifying major channel alternatives
• Evaluation major channel alternatives

Retailers are the most important part of distribution channel as they are the direct link to the consumers.

5 star has a huge retailer base because it is easily available at stores ranging from local corner shops to malls to online shopping sites.

Various types of retailers are

• Store Retailers
• Non Store Retailers
• Franchising

Cadbury's distribution network encompasses 2100 distributors and 450,000 retailers with consumer base of over 65 million.and reaches 0.6 million retail outlets.
The distribution of 5 star is broken down as follows.

Company >> C&F agent >> Distributors >> Retailers >> Consumers

PRICING

Consumer Psychology and Pricing

AMA defines price as - "the formal ratio that indicates the quantities of money goods or services needed to acquire a given quantity of goods or services.” 

It is that element of marketing mix that creates revenue. Price usually depends on Customer value for a particular product and the competition on the same product.

There are 3 key topic on the basis of which consumer arrive to a perception of price.

1. Reference price: Consumer in their mind, set a price range in which they expect the product price to fall. This may be due to research,past experiences,society etc. A consumer tend to buy the product if the actual price is somewhat near to his reference price
2. Price-Quality Inferences: Consumer tend to associate price with the quality of a product. He thinks a product priced high has a better quality.This strategy go very well with products like perfumes,cars etc.
3. Price Endings: This deals with products priced in odd numbers, say 49,99,549,999 etc.This is done to play with the customer's psychology as he will prefer a product priced 999 rather than 1000

5 Star has been priced between Rs5/- to Rs30/- making it affordable for all sections of the society.

The price is really appropriate for this product because due to direct and indirect competition in the chocolate industry. If Cadbury tries to increase the price, consumer will start shifting towards the competitor and this will reduce the market share of 5 Star.

From the perspective of a firm following steps must be kept in mind while setting up a price for a particular commodity :

1. Selecting Pricing Objective
2. Determining Demand
3. Estimating Costs
4. Analyzing competitors' costs,prices and offers
5. Selecting a pricing method
6. Selecting the final price

Price is linked to buying decision as :

• alternatives of 5 Star are Barone and Mars,so consumer will compare prices of all 3 and will choose the best

 Customer Value Linked to Price :

• 5 Star being a cadbury product has a huge image benifit. Also the customer perceived value is high because of affordable price and easy availability.

 Price linked to ILC stage :

• 5 Star is in its maturity stage and hence to remain the market leader it has launched its new variant Chomp and kept the price of other variants constant.

 

PRODUCT STRATEGY

Product Mix

According to the AMA, product mix refers to “the full set of products offered for sale by an organization. The product mix includes all the product lines and categories It is also a set of all the products a seller offers for sale. The categories related to product mix are :

Product Width:

 It refers to how many product line a company carries. The parent company of 5 star is cadbury. So the product width of cadbury is 5.

Product Length:

It refers to the total number present in the product mix.

Beverages

• Bournvita
• Bournvita l'il Champs

Biscuits

• Oreo

 Candies

•  Eclairs

Gums

• Chiclets
• Bubblicious 

 Product Depth:

Number of variants of each product in the line. 5 Star has following variants available.

 

Also 5 Star is available in Rs 5/- 10/- 20/- 25/-.

Product Consistency :

It refers to how closely the various product lines are related in terms of end use,production and distribution. Cadbury other than chocolates also offers biscuits,beverages etc. More or less the target audience for the product is same so in order to save money products can be distributed through same channels. This defines the close relation between various product lines.

  Product Hierarchy

It stretches from the basic requirement that is created to the final product that satisfy the want.

According to AMA “an organizational chart type of array of the products offered in a given market, breaking first into product class, then product form, then variations on form, and then brand is product hierarchy. The basic elements are :

MARKETING MIX

Marketing Mix- FOUR P's

Marketing Mix basically describes different choices an organization needs to make in the whole process of bringing a good or a service to the Market.
According to AMA : The mix of controllable marketing variables that the firm uses to pursue the desired level of sales in the target market. The most common classification of these factors is the four-factor classification called the "Four Ps"-price, product, promotion, and place (or distribution). Optimization of the marketing mix is achieved by assigning the amount of the marketing budget to be spent on each element of the marketing mix so as to maximize the total contribution to the firm. Contribution may be measured in terms of sales or profits or in terms of any other organizational goals.

 Product :

• Under the brand Cadbury
• Availability of Variants (e.g. Fruit and Nut, Crunchy,Chomp)
• Available in 2 sizes
•  Contains Chocolate,Nougat + Caramel
• TG mainly Kids,but more or less every section consumes it

 Price:

• Price as low as Rs 5/-
• Anyone and everyone can buy it

Promotion:

• Part of a established brand 
• Extensive advertising through print and Electronic media (Suresh and Ramesh ads)

Place:

• Large distribution network
• It is available in big store to local kirana shops

PRODUCT LIFE CYCLE

Product Life Cycle of Cadbury 5 Star

Any product undergo a life cycle which has following four stages

• Introduction
• Growth
• Maturity
• Decline or Renewal
  

5 star was first launched in 1969 and after dairy milk it was one of the most sold chocolates in India. It was suitable for all the people in the country. With over 40 years of being a favorite of the Indian consumer, 5 Star still continues to be what it was back then.

5 Star is in its maturity stage and in order to save it from declining and competition it was re-launched with new packaging and variants (e.g. 5 star Chomp) so that it can connect itself with the TG esp the youth and make a strong hold in the market. Advertising and innovation in 5 star have made sure that it has continuous demand from its fans and provide maximum value to its consumer. 

COMPETITORS and INDUSTRY

Competition of 5 Star

In Indian chocolate market Cadbury has the highest share followed my Nestle. So clearly as a part of Cadbury 5 star in the Market Leader in the sub category.

The biggest competitors of 5 star are:

• Nestle Barone
• Mars 

  

  Source - http://businesstoday.intoday.in

  
  

  
  

  
  

After Cadbury Dairy Milk 5 star has the maximum market share close to 14%. What make 5 star a different from its competitors is  that it has a lot of variants available like 5 star crunchy , Fruit n Nut etc. The target customers are all age group belonging to every section of the society, so it makes it reachable to every customer segment.

In order to attract new customers 5 Star started off with a new Rs 2/- pack in which TG was mainly school going kids who can distribute it in school. No such variant of Barone or Mars exists and hence making 5 star is the market leader in this segment.

CONSUMER BEHAVIOUR and BUYING DECISION

The Buying Decision Process

Consumer behavior is the study of how individuals, groups and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and wants.

The factors which influence a consumer's decision are :

 Consumer Buying Decision Process:

There is a 5 stage model which a consumer should follow before buying any product. Here in case of 5 star some points may work some might not.

1. PROBLEM RECOGNITION :The process of buying a product gets triggered due to a reason. this can be triggered due to an external or internal stimuli. In India people generally prefer to eat sweet after every meal. So, a chocolate is the best option due to its long life and taste and since the cost of 5 star is very low even people with considerably low income can afford it in contrast to expensive sweets available in market.
2. INFORMATION SEARCH : Before buying chocolate of a particular type one must gather all the information about it. If one prefer chocolate,caramel and nougat so, other than 5 star available brands are Nestle Barone and Mars bar.
   
3. EVALUATION OF ALTERNATIVES : A consumer looks at 3 basic concept: a) Satisfy a need  b) looking for benefit and c) look for set of attributes. If we consider 5 star a consumer evaluates it in terms of taste,availability, value for money etc.
4. PURCHASE DECISION : In evaluation stage a consumer forms a preference to buy the most preferred brand. In case of 5 star it is a leading brand having better value of money and availability. But sometimes due to unavailability of the preferred brand consumer tend to buy other brand.
5. POST PURCHASE BEHAVIOR : After intensive research and purchasing the preferred brand consumer can either be satisfied or dissatisfied. If he satisfied it is likely that he will buy more of 5 Star and will recommend it to others but if dissatisfied he may discontinue to use the product and will move to alternatives available.
   

INTRODUCTION and CUSTOMER VALUE

MARKETING DIARY

Product - 5 star

Cadbury India Ltd. is a part of the Mondelez International. Cadbury India operates in five categories - chocolate confectionery, beverages, biscuits, gum and candy. In the chocolate confectionery business, Cadbury has maintained its undisputed leadership over the years. Some of the key brands are Cadbury Dairy Milk, Bournvita, 5 Star, Perk, Bournville, Celebrations, Halls, Choclairs, Tang and Oreo.

For over 25 years, chocoholics have loved the Cadbury 5 star. It is a flagship product of Cadbury. It is the second most sold chocolate in the country after Cadbury dairy milk. Cadbury 5 star was launched in 1969, which is hard from the outside and has a soft caramel core or nougat on the inside. Over the years, 5 star has undergone several refinements to be able to satisfy the consumers taste.

CUSTOMER VALUE

 In today's competitive world there exists similar products under different brands and due to availability of social media and internet anyone can gather information about the particular product , what is important for a brand is to live up to the customer expectations and deliver the best in order to retain the customer.
Customer Perceived Value is the difference between the prospective customer's evaluation of all benefits and all costs of the offerings and the perceived alternatives.

The two most important parts under Customer perceived value are :

1. TOTAL CUSTOMER BENEFIT : This can be further classified into 4 sub-parts, analyzing it with respect to my product.

• Product Benefit :  5 Star is easily available almost everywhere ranging from local kirana shops to mall. What makes 5 Star so irresistible is the unique combination of chocolate, caramel, and nougat.
• Service Benefit : The cost of 5 Star is as low as Rs5/- which makes it affordable for everyone.
• Personnel Benefits : Consumers are loyal to the brand as it provides value for money.
•  Image Benefit : Cadbury in itself is huge brand since the beginning and hence has huge image benefit.Also 5star had a strong market share in this particular chocolate segment as it has limited competitors.

   2.   TOTAL CUSTOMER COST ; The 4 sub-parts are :

• Monetary Cost : The price of 5 star ranges from Rs5 to Rs 30/-.
• Time Cost : Available at all the stores ranging from small local stores to malls.
• Energy Cost : it refers to the amount of energy required to reach a particular store to buy 5 Star. Since it is easily available the energy cost associated with is low,
• Psychological cost : it is how a particular customer look at the price of the product. In case of 5 Star since the price is bare minimum every customer will look positively towards it.

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