Chocolate consumption is gaining popularity in India due to increasing income and lifestyle. Chocolate market in India is valued at Rs 2,000 crore and is growing at the rate of 18 – 20 per cent per annum. The Indian chocolate market is seen growing at a compounded annual growth rate of 15-20%. Over 70% of chocolate consumption takes place in the urban areas. Chocolate consumption in the rural areas is negligible in India. Chocolate market is a highly concentrated market, with Cadbury having 70 per cent and Nestle around 20 per cent. These two companies have been instrumental in building up the chocolate market in India with huge investments in product development, advertising and brand building. Modern trade constitutes about 10% of the overall chocolate category, or roughly Rs 320 crore, according to Nielsen. Of this, brand Cadbury Dairy Milk has a share of 35%, while Bournville and Silk together account for 18%.
Cadbury’s India Ltd, has been in India since 1948. In all the segments i.e. moulded chocolates, count chocolates and panned chocolates, it is undoubtedly the market leader. The world’s largest marketer of chocolates (became world number one when it acquired Rowntree Macintosh of the UK) – Nestle, made its foray in the Indian chocolate Industry in November 1990. In the eighties, Cadbury’s decided to focus its efforts on making chocolates a distinct category with an identity of its own. And the marketer had positioned its product at children to do that. By the end of the eighties, Cadbury’s ruled the market with over 80 percent market share. The rapid growth of various brands in India has led to a tight competition and consumers are offered with brand choice in the market, it becomes necessary for manufacturers to understand the major factors attracting buyers to his own brand.
Chocolates which were considered expensive once have now become affordable by one and all. Most of the chocolate brands in India produce chocolates in different sizes that are priced according to their sizes. Chocolates in India are slowly and steadily substituting the mithai or traditional Indian sweets. Due to the increasing levels of social consciousness people prefer gifting well wrapped chocolate packets rather than sweets on occasions and festivals. Taking advantage of this situation the top chocolate brands in India are now concentrating on the packaging and are introducing well packaged chocolates for specific occasions.
With socio-economic changes rapidly taking place, the young and not so young population led a new life style and chocolate eating is definitely expected to be widespread and acceptable. There has been a significant growth in the middle class, with 5.8 million people having upgraded to the quoted middle class which are the potential consumers of the lifestyle confectionery products.
The Indian chocolate market segments consists of Bars or Moulded Chocolate Segment like Dairy Milk, Amul, Nestle Premium, and Truffle that account for 35 – 40 % market volume, Countline Segment comprising of Count Chocolates such as Five Star, Kitkat, Perk, etc. is the next largest segment, accounting for 30 %, Choco-Panned Segment – comprising chocolate forms like Butterscotch, Nutties, Tiffins, etc., accounting to 10 %, and very small market for Sugar-Panned Segment – comprising chocolate forms such as Gems, Chocolate eclairs, etc. These generally have a sugar coating on the outside.
Therefore, more than 75 per cent of chocolate purchases are impulse. Chocolate consumption in India has changed since 2005, which is the reason why leading chocolate companies are investing in bringing premium brands such as Toblerone. Seasonal and boxed assorted chocolates have been experiencing the fastest growth, and sales are expected to expand 13% between 2010 and 2015. The conclusion can be drawn that chocolates are for all and its consumption depends on the perception of the consumers who consume chocolates. Cadbury and Nestle are the leading chocolate companies that are present in the market with giant percentage share.
The project was undertaken to understand the perception and behavior of consumers, retail outlet personnel and corporate for the competing confectionery companies: Cadbury and Nestle. The project hypothesis was conceived as Cadbury brands are perceived better than Nestle brands Indian market. Bournville is considered as a luxury product, Dairy Milk is to enjoy a moment and Kit kat is for pleasure to the consumers. The study is based on the primary as well as secondary data. The secondary data was gathered to understand and conclude on the perception on the social networks and the factual market analysis. The study depended mainly on the primary data collected through a well-framed and structured questionnaire to elicit the well-considered opinions of the respondents. The study was confined to Vapi and Delhi.
The sample population includes 60 consumers, 35 retail shops and 35 corporate. The consumers were given 2 sections in questionnaire; General section and Nestle and Cadbury comparison. Retail shop personnel were not given questionnaire but interviewed to obtain their insights on the brand perception. Questionnaire method for retail personnel was not used because they did not had time, many were not literate but they had market knowledge and Interview method was precise and accurate to obtain the market insights. Corporate opinion and views on the confectionery brands were obtained from their blogs, newsletters and online portals like LinkedIn. The observations and data obtained were analyzed to obtain market insights and strategy of the company to create such perception among the stakeholders.
In this study the problem pertains among the variable i.e.; what is general behavior of consumer and the extent of brand loyalty and influence of one variable of from the data. As the study is related to the study of consumer behavior and perception toward chocolates so the research design used was descriptive study with use of both qualitative and quantitative design. All the respondents were approached on the basis of simple random sampling in convenient market place to ensure the accuracy & precision of results. The corporate opinions and views were collected from online portals LinkedIn and the blogs. The information gathered through the questionnaires was analyzed and inferred to understand the perception of chocolate industry.
The observations from the consumer questionnaire concluded that Cadbury brands are on the top of the respondents mind. Cadbury is well known brand and perceived as better chocolate brand even after the worm issue that had negative impact on the brand image for long period. Nestle brand is known but not on the top of the mind. Kitkat is a well known brand among other in Nestle.
The respondents feed-back provided the insight that chocolate purchase behavior is impulsive or event-based. The consumers do watch advertisements and get influenced to buy for sometime but the impulse purchase is more often than the advertisement trigger for chocolate. The brands known or perceived as better quality are more often bought based on the events. Habitual chocolate consumers do buy same chocolates where the brands play an important role. Cadbury brands have more visibility and advertisements that influence the consumers to buy chocolates. Dairy milk is the most common brand purchased by the respondents.
Chocolate taste, quality and availability were the major factors influencing the buying behavior of the chocolates. Consumers mostly go for the chocolates that have sweet cocoa taste that is mostly in the Dairy Milk. Bourville is a dark chocolate and mostly preferred by females during particular occasions. Bournville is also used to present as gift for some well-achieved occasion in schools and colleges. 50% respondents agreed that flavor do influence their purchase behavior of chocolate. Kitkat having crunchy wafer inside is also preferred by many respondents as it is perceived as just a treat product that can be consumed for fun.
The important influencers to buy new chocolates apart from impulse were advertisements and personality of the consumer who experiments the features of chocolates. Friends, colleagues or neighbor consumption in peer influence are the most common influencer to buy chocolates. Apart from these shape, color and packaging of chocolates also have impact on the consumption of the chocolates. Consumers perceive the chocolates should be creative but have taste that is familiar. This is one reason for the success of Dairy Milk or Silk brand in the market.
The interview from retail outlet personnel was accurate in getting a perfect understanding of the industry. Based on the interview it was inferred that the consumers usually buy chocolates when they see them or in exchange of the unavailable coins. Cadbury and Nestle chocolates were mostly bought by the female adults or students. During festivals like Rakhi the Celebrations pack of Cadbury was mostly purchased, so they say that Cadbury had successfully replaced the mithai during festival. The Cadbury Celebrations pack was mostly used as gifts. Bournville is said to be perceived as a chocolate that has to be earned and consumed. Many students or children and adults buy Dairy milk on a regular basis. Perk and Kitkat both were purchased by the consumers to consume themselves. Gems were considered as children treat.
Total 35 blogs and online portals were used to collect data and infer the corporate insights on the chocolate market and the consumer perception. The reviews inferred Cadbury as undoubted market leader in Indian chocolate industry. Nestle is perceived to be as an alternative to Cadbury and not as a separate brand. The consumers were well informed on the Cadbury chocolates and brand that Cadbury is perceived as the only chocolate available. Cadbury has become acronym for chocolates in India. The brand communication and image of Cadbury in India is much stronger than Nestle. Nestle is slowly building its brand presence and communicating by advertisement that has achieved much success but still it’s a long way for Nestle to truly become a competitor of Cadbury in India.
Consumers perceive that the chocolates should be creative but have taste that is familiar. This was one major reason for the success of Dairy Milk or Silk brand in the market. Cadbury brand Dairy Milk has maximum visibility on the counter that influences the purchase. Loyal consumers in chocolates however are rare as consumers do buy new chocolates but not as frequently as their earlier brands.
Chocolate taste, quality and availability were the major factors influencing the buying behavior of the chocolates. Bourville is a dark chocolate and mostly preferred by females during particular occasions. Bournville is also used to present as gift for some well-achieved occasion in schools and colleges. Kitkat having crunchy wafer inside is also preferred by many respondents as it is perceived as just a treat product that can be consumed for fun.