Mondelez-Owned Cadbury - Second-Largest in Industry

Cadbury is a British confectionery company owned by Mondelez International and is the industry’s second-largest globally after Mars, Incorporated. Cadbury was established in Birmingham by John Cadbury in 1824, who sold tea, coffee and drinking chocolate. Cadbury developed the business with his brother Benjamin, followed by his sons Richard and George. George developed the Bournville estate, a model village designed to give the company’s workers good living conditions. The company is best known for its confectionery products including the Dairy Milk chocolate, the Creme Egg, and the Roses selection box.

Dairy Milk chocolate in particular, introduced in 1905, used a higher proportion of milk within the recipe compared with rival products. By 1914, the chocolate was the company’s bestselling product. Creme Eggs are made available for sale in the United Kingdom from January of each year untilEaster, and are the bestselling confectionary product in the country during the period. The company was known as Cadbury Schweppes plc from 1969 until its demerger in 2008, when its global confectionery business, was separated from its US beverage unit (now called “Dr Pepper Snapple Group”).

3] It was also a constant constituent of the FTSE 100 from the index’s 1984 inception until the company was bought by Kraft Foods in 2010. [4][5] Cadbury is headquartered in Uxbridge, London, and operates in more than fifty countries worldwide. Seen as a new venture into the leisure industry when it opened in 1990, Cadbury World began its life principally as a public relations tool, but quickly became a popular half-day venue for people of all ages looking for quality leisure time.

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The original attraction was very educational and historical-based, with mainly static displays.Over time, Cadbury World has grown to be a family attraction of much bigger dimensions. It has maintained visitor numbers comfortably in excess of half a million annually, and returns a healthy paper profit back into Cadbury UK as well as bringing value to the company in terms of public interface and direct communication to the consumer. The original vision for Cadbury World was to provide a tourist attraction experience and provide an alternative to the demands from the general public denied access to the Bournville factory tour, which ceased due to health and safety practicalities round the time of the merger between Cadbury and Schweppes in 1969. In setting up Cadbury World, in the face of strict health and safety and hygiene legislation, the vision was to underpin the central message of “Cadbury means chocolate means fun” with the interpretation of cocoa and Cadbury’s chocolate both past and present. Responding to these principles, Cadbury World was conceived as a continuation of the message “Cadbury means chocolate, means fun,” through the interpretation of cocoa and Cadbury chocolate both past and present.. 3 The original vision for Cadbury World developed as follows:To significantly enhance consumers’ perceptions of Cadbury and develop long term brand loyalty by: The Early Years Opened on 14 August 1990, Cadbury World’s first weeks proved to be successful beyond initial projections and led to a number of operation concerns and issues. Huge queues built up at the start of each day and most visitors came with the expectation of taking part in the resumption of the Bournville factory tour (although it was thought by Cadbury World management that this perception had been overcome in its launch publicity and literature).Free samples were not deemed to be as freely available as the public expected, and prices in the retail shop were more ‘gift shop’ than ‘factory shop’. The team’s response to these initial problems were quick and comprehensive: including the immediate introduction of a timed-ticketing system (later a formal pre-booking system), and a greater access gained to a small part of the factory. Free samples gradually became more plentiful and – as today – are distributed to visitors at intervals throughout the tour.The prices in Cadbury World took longer to resolve as the Cadbury World ‘gift shop’ strategy needed to be aligned to serious and real business concerns relating to the threat to some serious and well-established commercial relationships. The belief from retailers in the Birmingham area was that unlike the Cadbury staff shop, the Cadbury World offering was open to the general public and would prove so successful that the it would represent serious competition to those local traders if prices and offers were misaligned with those available from other retailers.A policy was developed whereby there would be no more than a token reduction in the prices the Cadbury World gift shop charged, compared with prices in normal retail outlets. In reality, where the major retail organisations exerted substantial buying power, they were able to charge well below Cadbury World rates. Eventually, a ‘bargain corner’ (now called the factory area) was established, the ‘gift shop’.The retail offer developed and Cadbury World now has two retail outlets: ‘The World’s Largest Cadbury Shop’ and the ‘Essence Emporium’ offering themed gifts and merchandise, standard retail offerings from the Cadbury brand portfolio and exclusive chocolate novelties hand-crafted in Cadbury World’s ‘Demonstration Area’.
• Giving the visitor a memorable enjoyable, and unique Cadbury chocolate experience
• Offering high quality and good value for money
• Delivering Cadbury values of fun and quality, whilst achieving a break-even cost target for Cadbury Limited (at the time the UK chocolate operation of Cadbury Schweppes plc). In its early years, due to both visitor comfort and also health and safety provisions, Cadbury World’s limited capacity required a robust control on the numbers of visitors allowed inside at any one time, as well as their flow and passage through the exhibition. Initially, a system of timed ticket entry was introduced – based on a first come first served approach – and enabled visitors to have a known time when they would go into the main exhibition. As popularity for the attraction grew, even this measure proved to be inadequate to the increasing visitor numbers, and queues began to trail outside the main building once more.In March 1993, a reservations system was introduced, whereby visitors could prebook the date and time of their entry into Cadbury World, and eliminated much of the need to queue. From 1993 onwards, all publicity material for Cadbury World emphasised the reservations service and still strongly recommends that the visitor pre-book via the booking office telephone number or via the internet in order to avoid disappointment. Whilst the reservations system had an immediate benefit, around 30% of admissions on a busy day would consist of visitors ‘rolling-up’ (as awareness f the need to pre-book increased, the number of ‘roll-ups’ has fallen to a more manageable of no more than 20% during peak periods). Indeed, during school holidays and bank holidays, it is not unknown for a visitor arriving at 10am without reservation to sometimes have to wait four hours before being admitted into the main exhibition. During these peak times, this allows the visitor to ‘reverse their visit’ and visit the Essence and Bournville Experience zones (accessed separately from the main building), enjoy any complimentary ntertainments, utilize the outdoor play area for those visitors with children, or pick up a map from reception and take a walking tour of places of interest in the Bournville area. Essence Launch, 2005 Sir Adrian Cadbury opening The Bournville Experience, 2007 “In the early 1960s, Professor Neil Borden at Harvard Business School identified a number of company performance actions that can influence the consumer decision to purchase goods or services. Borden suggested that all those actions of the company represented a “Marketing Mix”. Professor E.Jerome McCarthy, also at the Harvard Business School in the early 1960s, suggested that the Marketing Mix contained 4 elements: product, price, place and promotion,” (Wikipedia). The “4 p’s” are good place to start when looking at any marketing strategy and its effectiveness. Overtime, the main concept of the “4 p’s” has developed to become the “7’ps” (with the inclusion of ‘Process’, ‘Physical Evidence,’ and ‘People’). As techniques and technology develops, even these ‘”7 p’s” have been deemed too restrictive in terms of marketing analysis and now some commentators have even point to a recently devised “Web 4. (the new 4 P’s)” including ‘Personalisation’, ‘Participation’, ‘Peer-to-Peer’, and ‘Predictive Modelling’. Whilst not giving a comprehensive overview into Cadbury World’s marketing strategy, broadly in-line with the relevant ‘P’s’ of the marketing mix, the below gives an insight into the way Cadbury World goes about talking to visitors, potential visitors and generating awareness for its products and services. Product As a leading tourist attraction, Cadbury World operates in a service industry and is almost unique in being owned by a major manufacturer.The product that Cadbury World delivers is “a memorable, exciting and great day out”; whereas for the main Cadbury business, the product delivered is chocolate, candy, gum brands and drinking chocolate products. The actual product Cadbury World delivers has been built up over nearly 20 years. As discussed in previous sections, it has changed, developed and evolved overtime. Whilst being intrinsically-linked to the main Cadbury business; Cadbury World as a profit-making business unit would not survive if it wasn’t for the desire to offer a quality day out. PricingIn the confectionery market, the price of the products, and the amount of planning prior to purchase are both relatively small. In the leisure industry generally, and specifically for a visit to Cadbury World, the commitment e. g. admission price, travel costs and time to plan the visit are significant. Cadbury World offers various pricing structures to meet the expectations of different visitors and changing economic situations. For instance, in the third quarter of 2008, the pricing structure for 2009 had already been agreed and printed on marketing literature for use during the following year.Current 2009 Cadbury World pricing is split into peak (classed as school holidays) for Group parties (special Group packages are offered including a Memory Lane Tour, Choc & Cruise, Choc & Steam, and meal deals – designed to meet the different needs of different Groups) and off-peak prices. A special rate for educational visits (non talk) and educational visits (with talk / study day). The standard adult ticket costs ? 13. 45, child ticket is ? 10. 10, with a concessionary rate offered to seniors and students at ? 10. 30. Both family tickets and annual passports are also available. 2 In a need to respond to the reduction in VAT at the start of December 2008, not only did all the prices offered in the retail outlets change but the proposed admission prices for 2009 were reduced even though on the marketing literature they’re higher. Consequently, a potential visitor looking at a 2009 Cadbury World leaflet will see a slightly different price than the one they will ultimately pay upon their arrival. Promotion Promotion of Cadbury World to various tarOne element of Cadbury World’s pricing strategy growing in importance and requiring onstant review and monitoring is that of its discount strategy. Cadbury World works with a number of third party promoters and businesses in order to offer a discount on the entry price. This strategy helps to increase visitor footfall, whilst using the third party’s databases and own marketing budget to promote Cadbury World and its products. Other considerations in determining the pricing strategy would be the participation costs for competing leisure activities (other attractions, cinemas etc. ) as well as the price Recommended Selling Price (RSP) for erchandise and confectionery. Promotion of Cadbury World to various target audiences to build visitor numbers is proving to be a vital part of the management function and encompasses every method for generating awareness of the Cadbury World offer. In the past, and as alluded to in previous sections, Cadbury World has been seen as having a bias towards a certain age demographic. Indeed, it was concluded through research, that the potential visitor may not be fully aware of what Cadbury World is or what its position is in the leisure market. Some members of the public hought it was a theme park, whilst others thought it was a museum, and others still being confused about what age group it appealed to. Cadbury World’s marketing campaign from 2005-2007 One element of Cadbury World’s pricing strategy growing in importance and requiring constant review and monitoring is that of its discount strategy. Cadbury World works with a number of third party promoters and businesses in order to offer a discount on the entry price. This strategy helps to increase visitor footfall, whilst using the third party’s databases and own marketing budget to promote Cadbury World nd its products. Other considerations in determining the pricing strategy would be the participation costs for competing leisure activities (other attractions, cinemas etc. ) as well as the price Recommended Selling Price (RSP) for merchandise and confectionery. Cadbury World’s marketing campaign from 2003-2005 13 Eight of the fourteen Zone Icons In 2008, working with Big Communications, it was deemed that in order to execute a successful campaign, Cadbury World should start by talking to the consumer at a very basic level in terms of what Cadbury World is and what there is to offer.Launched in 2008, all Cadbury World marketing material now leads with the visually compelling and emotionallycharged “Where Chocolate Comes to Life”, with an additional tag line to tell the visitor that there is quite a lot on offer: “Fourteen Amazing Zones, One Fantastic Day Out” Place Usually the fourth element in the traditional marketing mix is Place. There is only one Cadbury World in the UK, and it is located in Bournville in Birmingham – the ‘spiritual heart’ of the Cadbury business. Processes and Physical EvidenceAs discussed previously, processes and ways of working are continuously reviewed (across all departments) to maintain a very high level of service and to ensure the smooth running of all Cadbury World operations. This is evident in the number of returning visitors, customer feedback and a consistently high score in the mystery shopper survey annual report CADBURY PLC (the “Company”): ANNUAL FINANCIAL REPORT AND ASSOCIATED DOCUMENTS ANNOUNCEMENT In compliance with Listing Rule 9. 6. 1 Cadbury plc announces that it has, today, lodged two copies of the following documents with the UK Listing Authority: i) Annual Report and Accounts 2008 i) Shareholder Magazine 2009 iii) Notice of 2009 Annual General Meeting iv) Proxy voting form These documents will shortly be available for inspection at the UK Listing Authority’s Document Viewing Facility, which is situated at: The Financial Services Authority 25 The North Colonnade Canary Wharf London E14 5HS Telephone no. +44 (0)20 7066 1000 The Annual Report and Accounts 2008, the Shareholder Magazine 2009 and the Notice of 2009 Annual General Meeting will, in due course, be available on-line at www. cadbury. com In addition, Cadbury plc makes the following disclosures in compliance with provisions 4. . 3 and 6. 3. 5(2) of the Disclosure and Transparency Rules: RESPONSIBILITY STATEMENTS To the best of the Directors’ knowledge: (a) the financial statements, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and (b) the Directors’ report includes a fair review of the development and performance of the business and the position of the Company (and the Group as a whole), together with a description of the principal risks and uncertainties that it faces.For the purposes of this statement, the Directors (whose biographical details and functions are contained on page 53 of the Annual Report and Accounts) are: Roger Carr; Todd Stitzer; Ken Hanna; Guy Elliott; Lord Patten; Dr Wolfgang Bendt; Raymond Viault; Colin Day; and Baroness Hogg.