Cadbury: the Study of Consumer Behaviour

†There's one product that sells in good times and bad – a bar of chocolate†. It has been an axiom of Cadbury Company for generation. Today, the company which was opened in 1842 by John Cadbury, Is the global leader in the chocolate confectionery manufacturer. The beginning of Cadbury journey is when John Cadbury opened up a shop in Birmingham and sold coffee, tea, drinking chocolate and cocoa. In the later stage, John’s brother Benjamin joined the company in 1842 and opened an office in London and received Royal Warrant as manufacturer of chocolate and cocoa to Queen Victoria in 1854. After six years, John got problem about his health and his wife was death so they left their business and company to their sons George and Richard. The brothers was also dissolved their partnership at the same time. George and Richard continued to develop the product line, and by 1864, they were getting an early profit. By this time, Cadbury’s Cocoa Essence which was an all nature product with pure cocoa butter and no starchy was introduced to people. After which, the brothers soon moved their manufacturing operations to a larger facility four miles south of Birmingham and the factory and area was known as Bourneville. With a success in chocolate, George and Richard stopped selling tea in 1873 and master confectioner Frederic Kinchelman was appointed to share his recipe and production secrets with Cadbury workers. Moreover in two years time, the factory employed more than 2,600 people and was incorporated as a limited company. In 1969 Cadbury merged with Schweppes which was a large British brand that supply mineral water and soft drink and the company was know at Cadbury Schweppes. The merged companies would go on to acquire Sunkist, Canada Dry, Typhoo Tea and more. Schweppes Beverages was created, and the manufacture of Cadbury confectionery brands was licensed to Hershey. Today Cadbury Schweppes is the largest confectionery company in the world, employing more than 70,000 employees. In 2006 the company had over $15 billion in overall sales. In March of 2007, Cadbury Schweppes announced that it intends to separate its confectionery and beverage businesses. With almost 200 years in the business, Cadbury Schweppes will continue to prosper in the coming decades. Theories Used The whole paper will discuss about the model of motivation, arousal of motives , hierarchy needs of Maslow’s, ELM (elaboration likelihood model ) and how these theory and model apply to the improvement and expansion of Cadbury company to better understanding about their consumer behavior. First of all, motivation is basically defined as the driving force within individual that impels them to action. According to the model of motivation process (Schiffman et al, 2008), when people need, want and desire are unfulfilled, they tend to feel tension. After that it will drive people to the direct behavior through their thinking process and previous learning until their need is fulfilled (Schiffman et al, 2008). On the other hand, most of people specific needs are dormant much of the time. The arousal of any particular set of needs at a specific point in time may be caused by internal stimuli found in our physiological condition or our emotional or our cognitive process or by external stimuli in environment (Schiffman et al, 2008). One of the well know theory of human motivation was developed by Abraham Maslow which interpret how customer perceive satisfaction about goods and service at different level of needs. According to Maslow, there are five basic level of needs which are physiological needs; safety and security needs; social needs; ego needs; self-actualization. The theory is showed that human seek for the satisfaction from lowest level first (physiological) such as food, water, air, clothing, sex. After the first level of needs is satisfied, people will seek to higher level of needs which is safety and security needs. After they get these needs, they will look for the social needs such as love, affection, belonging and acceptance and then is ego needs and self- actualization. (Schiffman et al, 2008) The elaboration likelihood model proposes the more global view that consumer attitude changed by two distinctly different routes to persuasion: a central route and a peripheral route. When consumer‘s motivation or ability to assess the attitude is high, their learning and attitude change tend to occur via central route with available information about the attitude object. In contrast, when people’ s motivation or assessment skills are low, learning and attitude change tend to occur via the peripheral route without the consumer focusing on information relevant to the attitude object itself. (Schiffman et al, 2008) Maslow’s Hierarchy of Needs According to Hassan (2005), Maslow’s hierarchy of needs includes physiological needs, safety and security needs, social needs, ego needs and self-actualization which can help us to understand human behavior and have a right point to motivate customers power purchasing, especially for what Cadbury has been applied for their segmentation strategies and positioning strategies. First of all, as we know that chocolate is belonged physiological needs which means this kind of product is low price and more competitive so that there need have a successful key to become the second largest confectionary market after Marks-Wrigley (Conor Carroll 2009). This is the brand of itself because when customers try whatever product they always concerned about the brand name which not only help the customers identify their needs and satisfy product but also help the marketers to become different from their competitors. For this company which already have a strong brand and strong history from 1824 (Conor Carroll 2009) which is more powerful to get customers trust and remained loyal customers as well. For example, when a person go to the super market and he wants to buy a soft drink immediately he will think about Coke or Pepsi, as like as in this case when he go to the supermarket and he wants to buy a bar chocolate he may think about Cadbury although the price may higher than others brands but because of the high reputation and quality brand so that consumers will pay a higher price for branded product which they believe it provides a higher value. Secondly, although Cadbury is a second largest confectionery company it still made a mistake when they did not concerned a lot about safety and security needs of consumers in 2006. According to Conor Carroll (2009), Cadbury be in scandal of salmonella scare in 2006 and Easter chocolate products scandal in 2007. Because of it, Cadbury reputation and benefits at this time was dropped significantly. However, they had fined by the Food Safety Authorities and need to recall the entire products problem. As a result, Cadbury get over the big two trouble and got it meaning lessons for safety and security products. However, it not only stops by there, they already have an action to get back their reputation from consumers by support more laboratory facilities and scientists to test the product quality and more involve in the social responsibilities. (http://www. cadbury. com/ourresponsibilities/Pages/ourresponsibilities. aspx) Thirdly, for social needs which are more concerned about the environment and social responsibilities than the quality of this product. Cadbury is not only use the campaigns to encourage their customer’s social consideration but also has a special strategy to stimuli their farmers and workers such as give more bonus and benefits to the workers in Ghana and support the people living around. This is meaningful that when consumer try Cadbury chocolate they may think that they already pay a right price which bring the benefits to the workers and also contribute a small part to support the society. As a result, this is the best idea for the marketers because when you want to have a strong brand name inside consumers mind you need to concerned more about the social and environment which are the strong strategy to maintain the product brand name and Cadbury did it. Next, some of the Cadbury products and advertisements emphasis the ego needs which is more specific on self-acceptance and self-esteem such as Cadbury already have targeted this concept to teenagers like Cadbury Perk. For this strategy, Cadbury Perk was targeted to the casual snacking which includes chips and wafers. Moreover, Cadbury Perk contains a message that whenever and wherever teenagers need it always available for their convenient it becomes a new mini snack in this market. Furthermore, for the confectionery market teenagers and children are the majority consumption and the most important of segmenting and positioning. When the teenagers try Cadbury Perk they may feel like this product was born for them and stands for them like young, active and creative life. (Cadbury PLC 2010) Lastly, there is need for self-actualization which is concentrated more on inner thinking such as psychological integration or demand higher level of personal potential. Hassan (2005) states that generatively, social justice and transformative thinking should be cooperate with this orientation. Thinking towards to Cadbury, we can see that they try to satisfy the customer’s needs as much as they can or even though more than what consumers expected like Cadbury celebrations which was aimed to replace the traditional gift options during festival seasons with a pretty box and nice packaging it really suit for gifting. It is different from others category because it is more formal and luxury which extend consumers needs. Moreover, Cadbury also have introduced a product for after dinner sweet which main targeting in India. Because in India people have a habit to have a sweet dessert after their dinner and this product can replace traditional sweet which inconvenient and take more time to repair. For this part, the advertisement more focuses on the adults rather than children. From this point, we can see that Cadbury not only segmenting and positioning their product on children but also expand their segmentation to the adults which called as potential customers. Certainly, in this point their advertisement and packaging are also be different from the product that they target to the children. Model of Motivation Motivation is a theoretical construction from which we can determine the driving force behind human behavior. (Kroeber-Riel and Weinberg 2003, cited in Wohlfeil and Whelan 2006) This, according to Weinberg (1995 cited in Wohlfeil and Whelan 2006), is a combination of both emotional and basic urges to direct behavior and cognitive process to direct the goals and drive to accomplish those goals. These goals differs also as the customer moves along the decision making process, as the needs and motivations changes will affect how the customer perceives any given information. (Mallalleu and Nakamoto 2008) In the case of Cadbury, the motivations of their customers who purchase their brand off the shelves in departmental stores will be different from those who purchase other brands of chocolate, depending on the segmentation, targeting and positioning of the brands, as they focus to fulfilling different groups of customer’s needs, wants and desire. Cadbury fulfills many market segments, ranging from milk chocolate, dark chocolate, chocolate flakes, chocolate powder, chocolate drinks and many more. By targeting many market segments, Cadbury aims to provide a sense of convenience, and variety within the same brand, lending the strength of their overall brand equity to all the brands under Cadbury. This benefits the customers as now they could purchase different products under the same brand, which they can be assured of the quality, packaging and taste, without having to take the risk of try other brands to purchase different chocolate products. Gale 1992; Smith and Park 1992, cited in Morgan and Rego 2009) Higher brand equity allows Cadbury to price their products at a slight premium, despite them competing within the low price segment of the chocolate industry. (Sivakumar and Raj 1997, cited in Morgan and Rego 2009) Cadbury also uses celebrity endorsements, such as Mr. Amitabh Bachchan in India, in order to regain brand equity after worms were discovered in Cadbury chocolates in India. (The Financial Express 2003) Although ultimately, it was later proven that the worms were caused by their retailers bad storage practices in India, their reputation was already tarnished. However with celebrity endorsement, the celebrity acting as a source lends credibility and attractiveness to the product, giving it familiarity in the process. (Sternthal and Craig 1973, cited in Biswas, Biswas and Das 2006) this motivates the customers by giving them the drive to purchase it when their favorite celebrity endorses the product, and through their cognitive process, any perceived notion of risk is significantly reduced. According to Rao and Monroe (1988), consumers are likely to process more information other than price if they are motivated, to determine the quality of a given product. This is important as Cadbury often creates contests and advertisements to build involvement in their products in order to motivate consumers to choose their brand. This involvement however only targets the people with specific personal relevance from which the product has on the person involved. (Coulter et al 2003, cited in Wohlfeil and Whelan 2006) Such event marketing allows marketers to provide interactivity, personal sharing of experience with others, and learning more about the brand in an informal and relax way, while in the meantime, circumventing the natural tendency for consumers to ignore corporate messages that appears elsewhere. Whelan and Wohlfeil 2005; Mc Alexander et al. 2002, cited in Wohlfeil and Whelan 2006) As such, from the motivation perspective, we are able to see how and why Cadbury segmented and targeted multiple segments of the market, used their brand equity to price at a slight premium, and used celebrity endorsement to rebuild brand equity in India, and used contests and advertisements to generate involvement in their brand in an informal and exciting way. Elaboration Likelihood Model (ELM) Customers can be motivated in many ways, but based on the elaboration likelihood model (ELM), two routes of persuasion are identified – central route and peripheral route (schiffman et al 2009). The concept of this model is to explain the motivation behind consumers purchases and they way to persuade them, as two major type of customers can be found – one with high assessment skills (high involvement) and low assessment skills (Low involvement). However, the success of a company does not come solely through the tampering of marketing elements; it also includes the fostering of a long term relationship between buyer and seller (Ford et al. ited in Zineldin & Philipson 2007). Thus, the next few sections, will describe how Cadbury successfully maneuver its marketing mix, while retaining their customers. But, how does Cadbury appeal to both types of customers mentioned above? Cadbury dairy milk is basically famous among children and teenager, as it is not only affordable, b ut delicious. Children and teenagers are considered to fall under the category of low assessment skills, as the motivation behind buying Cadbury for them is the craving for sweets (schiffman et al 2009).. These target group do not concerns on the information of the product , instead, it is the tangible aspect that is the motivation behind, which is to say, this particular group can be persuade through peripheral route. For instance, Celebrity endorsement, Event and advertisement promoted. In addition, variety of assortments in â€Å"Dairy Milk’ are introduced in the market to meet changing consumer trends and drive further growth of the UK’s favorite chocolate brand. For instance, Cadbury Milk Double Choc, Cadbury Milk Fruit and nut, Cadbury Caramel and 10 other types of Dairy Milk are introduced in UK alone in the time span of 100 years (Times Online 2010). The customers’ preferences for Cadbury ‘Dairy Milk’ are the taste, quality and convenience to get a hand of it. That is why the distribution of the chocolate bars and confectionery are important because of the fact that ‘Dairy Milk’ is becoming more of staple and impulse types of good. In France, the chocolate consumption is one of the highest in the world with average of 5. kg per head in 1995 and with the highly competitive market and wide spread price-cutting, retail prices and margins vary widely according to product and outlet company must be efficient in distributing their goods, as the cost of distribution makes up 40-60% of the product cost (Vrontis & Vignali 2001). The other type of persuasion route is central route, which is used to explain on how to persuade customers that have high assessment skill (high involvement), which fall under the target group of adults (Schiffman et al 2009).. As one grow, they are becoming more conscious of their health and have the perspective that everything that is sweet mean fat and calories. However, the way Cadbury dairy milk appeal to this group is by using the advertisement campaign of 1 ? glass of milk that give a message that one Cadbury bar is contains nutrition and proteins, which is healthy and not healthy deteriorating. In addition, the packaging, design and sizes are being emphasized by the company to accommodate consumers’ demands. For instance the packaging of Cadbury is being refined in terms of image and resolution to create brand identity and also increase in size variety for Cadbury in 140 g and 230g package. Kate Harding, the trade communication manager for Cadbury commented, â€Å"Stores come in all shapes & sizes and we have changed the sizes to suit the needs of our different retailers who can choose a range which will best suit their shopper. † (Talking Retail 2008) Conclusion Cadbury is a well known chocolate brand dealing with a wide array of chocolate products. This with their low pricing allows them to extensively penetrate many chocolate market segments. Through the use of Maslow’s hierarchy of needs, model of motivation, and elaboration likelihood model, we are able to see how they are applied to the company in terms of segmentation, targeting and positioning, allowing the company to gain considerable market share, regain lost brand equity through celebrity endorsement, and generate consumer involvement to create better trust and brand familiarity, through informal and exciting approach in teaching the corporate values to their consumers.